When the mining gets tough, the leaders get leaner.
Canadian mid-tier miner IAMGOLD
As the rapid escalation of mining costs has ratcheted up pressure on the world's metal miners, we've seen companies employ an array of means to keep those costs under control. Some of the big hitters have focused on reducing energy costs, exhibited by Barrick's purchase of a Canadian oil and gas company and Newmont Mining
Barrick, for its part, appears content to convert long-term royalty rights to up-front capital, as evidenced by its $150 million sale of royalty assets to specialist Royal Gold
By purchasing royalty obligations on its own properties, IAMGOLD will boost long-term cash flow by increasing profit margins for each ounce of gold mined at these properties. That increased cash flow should assist with the timely development of the 1.5 million ounce Quimsacocha project in Ecuador and continued exploration of high-grade discoveries at Boto in Senegal.
Considering these prudent cost-cutting measures, nearly one million ounces of annual gold production, a treasure in cash and gold, and what strikes me as cheap valuation, I am digging IAMGOLD.
Fool contributor Christopher Barker captains yachts and writes about stocks. He can also be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns shares of IAMGOLD, Silver Wheaton, International Royalty, and Royal Gold. The Motley Fool has a disclosure policy.
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