What happened
Looking a lot more lustrous to investors, shares of Iamgold (IAG 0.41%) are flying off the shelves today. The company announced this morning that it's selling its interest in Rosebel Gold Mines (a move that will strengthen its balance sheet), and investors are clearly pleased.
As of 11:28 a.m. ET on Tuesday, shares of Iamgold are up 16.9%.
So what
Slimming down the assets in its portfolio, Iamgold has entered into a definitive agreement with Zijin Mining Group regarding Rosebel Gold Mines. According to the terms of the agreement, Iamgold will sell its 95% interest in Rosebel for cash consideration of $360 million.
While the company's portfolio will soon be slimmer, management plans on using the funds to help advance an important growth project. Speaking to the merits of the divestment, Maryse Belanger, Iamgold's interim president, said, "The proceeds of the sale will be invested in the ongoing construction of our flagship Côté Gold project -- a strong positive step toward addressing our funding commitments to deliver the Côté Gold project on the updated schedule for production in early 2024."
Rosebel Gold Mines has a 100% interest in the Rosebel mine and a 70% interest in the Saramacca mine, both of which are in Suriname.
Iamgold expects the transaction to close in the first quarter of 2023 or possibly earlier.
Now what
The news of Iamgold's agreement for the sale of its interest in Rosebel Gold Mines shouldn't come as much of a surprise for investors; the company stated an interest in a sale of this sort during its second-quarter 2022 earnings report.
While the market is celebrating the news, gold-minded investors shouldn't feel compelled to blindly follow the herd and pick up shares since there are plenty of other lustrous options to consider.
