What happened
Shares of Iamgold (IAG -2.96%) soared 31% this past week, according to data from S&P Global Market Intelligence. The international mining company took a major step toward optimizing its asset portfolio and bolstering its cash reserves.
So what
Iamgold agreed to sell its 95% stake in Suriname-based Rosebel Gold Mines N.V. to China-based Zijin Mining Group for $360 million in cash. Iamgold will also be released from roughly $41 million in equipment lease liabilities as part of the deal.
"This transaction represents a significant step forward in pursuing Iamgold's strategy of disciplined portfolio management as we look to create value for shareholders through a focus on core assets," CEO Maryse Bélanger said in a press release.
The transaction is expected to be completed in the first quarter of 2023, subject to regulatory approval. Iamgold intends to use the cash proceeds to fund the construction of its Côté Gold mine in Ontario, Canada. Bélanger said the additional capital should help the miner bring its prize project online by early 2024.
Now what
The impending Côté Gold project should add a powerful growth element to Iamgold's portfolio. The open pit mine is projected to produce 495,000 ounces of gold annually during its first six years in production and an annual average of 365,000 ounces over the life of the mine. For comparison, Iamgold's existing Essakane mine in West Africa and Westwood mine in Quebec are forecasted to produce approximately 373,000 and 65,000 ounces, respectively, in 2022.
