Iamgold gets $667M for African stake
Iamgold Corp. has sold stakes in two gold mines in Ghana to Gold Fields Ltd. for $667 million US, the company said Friday.
Iamgold, a Toronto-based gold miner, said it dumped its 18.9 per cent piece of the Tarkwa and Damang mines in the West African country because the company did not want to be a minority partner in the operation anymore.
"We cannot fully leverage our skills and experience in developing and operating mines if we are not the operator and have a minority interest in the mine. Our strategy is to invest in mines that we own and operate," said Steve Letwin, Iamgold's president and chief executive officer.
Cash is king
Once the deal is finalized, Iamgold will have more than $1 billion in cash and liquid financing, he said. At that level, the company will have more doubled the $411 million amount of cash and cash equivalents on hand at the end of 2010.
Letwin also indicated that the company will be making more deals in the coming quarters.
"This sale is the first of several strategic initiatives to create value for our shareholders," he said.
That could put operations, such as the Yatela mine in Mali, up for sale. Gold giant AngloGold Ashanti is Iamgold's partner in the west African mine.
Iamgold said the two mines that it sold yielded approximately 182,000 ounces of gold production in 2010.
The Canadian firm acquired its interest in Tarkwa back in 1993 and the stake in Damang seven years ago.
Gold Fields had already owned 71 per cent of the two mines and, with the Iamgold transaction, moves its stake in Tarkwa and Damang up to 90 per cent.