All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.
TORONTO, Oct. 3, 2014 /CNW/ – IAMGOLD Corporation (“IAMGOLD” or “the Company”) today announced that it has reached an agreement to sell its Niobec mine, one of the world’s three niobium producers, to a group of companies led by Magris Resources Inc. for cash proceeds of $500 million after tax upon closing. The sale of Niobec, which is located in Saint-Honoré-de-Chicoutimi in the Saguenay-Lac-Saint-Jean region, Quebec, is to include the adjacent rare earth element (“REE”) deposit. The total consideration of $530 million for the transaction is comprised of a cash payment of $500 million payable on closing, as well as an additional $30 million when the adjacent REE deposit goes into commercial production. A 2% gross proceeds royalty will be payable on any REE production.
“This sale unlocks the value of Niobec for our shareholders, positions IAMGOLD as a pure gold play and significantly improves our liquidity, which provides us with the opportunity to further improve the grade and cost structure of our portfolio of gold assets,” said the Company’s President and CEO, Steve Letwin . “On behalf of the Board of Directors, I extend my thanks to the entire Niobec team for their outstanding efforts over the years to improve their operating performance and strengthen the attractiveness of this asset. I also commend all our employees who continue to work hard and find innovative ways to improve productivity and reduce costs, getting us closer to our target of being free cash flow positive at our owner-operated gold mines, including capital spending.”
“Niobec has been a steady contributor to our operating cash flow since 2006 when we acquired this asset as part of a larger transaction,” said Carol Banducci , IAMGOLD’s Executive Vice President and CFO. “We are pleased that the group of companies is led by Aaron Regent, who brings a wealth of experience in mining and finance to Niobec. The additional liquidity provided by this sale offers IAMGOLD an opportunity to invest in the profitable growth of our gold portfolio. However, we are committed to taking a disciplined approach to investment, seeking out only appropriately-sized opportunities that improve our overall cost structure and cash flow generation capabilities. In the absence of appropriate investment opportunities we would consider reducing financial leverage (as prescribed by the terms of the bond indenture).”
The group of companies includes Magris Resources, as well as CEF Holdings Limited; which is a Hong Kong based investment company owned 50% by Cheung Kong (Holdings) Limited and 50% by the Canadian Imperial Bank of Commerce (“CIBC”); and Temasek, which is a Singapore-based investment company with a portfolio that covers a broad spectrum of sectors.
“The transaction proceeds on closing of $500 million, when added to current cash and cash equivalents as well as the market value of the Company’s gold holdings, strengthen IAMGOLD’s liquid assets to over $800 million,” continued Banducci. “Along with the Company’s $500 million in unused credit facilities, IAMGOLD would have substantial liquidity of over $1.3 billion.”
Niobec will be reclassified as “Held for Sale” for the purposes of IAMGOLD’s fourth quarter 2014 results. Based on current estimates, the expected gain on the transaction is expected to be approximately $50 million to $60 million. The transaction is targeted to close in the fourth quarter of 2014, subject to the receipt of regulatory approvals.
TD Securities Inc. provided a fairness opinion to the Board of Directors of IAMGOLD in connection with the transaction.
CONFERENCE CALL
A conference call will be held on Friday, October 3, 2014 at 10:00 a.m. (Eastern Daylight Time) for a discussion with management regarding IAMGOLD`s sale of Niobec. A webcast of the conference call will be available through IAMGOLD`s website – www.iamgold.com.
Conference Call Information: North America Toll-Free: 1-800-319-4610 or 1-604-638-5340.
A replay of this conference call will be accessible for one month following the call by dialing: North America toll-free: 1-800-319-6413 or 1-604-638-9010, passcode: 1952#.
For the CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION and the original source of this news release, click here: http://www.iamgold.com/English/News/News-Releases/News-Release-Details/2014/IAMGOLD-to-sell-Niobec-for-a-total-consideration-of-US530-million—Will-focus-on-profitably-growing-its-core-gold-business/default.aspx
About IAMGOLD
IAMGOLD (www.iamgold.com) is a mid-tier mining company with five operating gold mines (including current joint ventures) on three continents. A solid base of strategic assets in Canada, South America and Africa is complemented by development and exploration projects and continued assessment of accretive acquisition opportunities. IAMGOLD is in a strong financial position with extensive management and operational expertise.
About Magris
Magris is an emerging mining company that was formed to build and grow a significant diversified mining platform. Magris is led by Aaron Regent who previously served as President and Chief Executive Officer of Barrick Gold, and President and Chief Executive Officer of Falconbridge Ltd., and a team of veteran mining executives with a track record of managing best-in-class operations in an environmentally responsible manner with a commitment to maintaining the highest standards in safety and community relations.
About CEF Holdings Ltd
CEF Holdings Limited is a Hong Kong based investment company which is owned 50% by Cheung Kong (Holdings) Limited and 50% by the Canadian Imperial Bank of Commerce (“CIBC”). Cheung Kong (Holdings) Limited is the publicly-listed flagship company of the Cheung Kong Group of companies, the Hong Kong based multi-national conglomerate with a combined market cap of the Group in excess of US$100 billion. CIBC is a leading North American financial institution with operations around the world. CEF is an investor in significant resource assets on a global basis.
About Temasek
Temasek is an investment company based in Singapore. Supported by 11 offices globally, Temasek owns a S$223 billion (US$177 billion) portfolio as at March 31, 2014. Temasek’s investment themes centre on: transforming economies; growing middle income populations; deepening comparative advantages; and emerging champions. Its portfolio covers a broad spectrum of industries: financial services; telecommunications, media and technology; transportation and industrials; life sciences, consumer and real estate; as well as energy and resources.
Please note:
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Si vous désirez obtenir la version française de ce communiqué, veuillez consulter le http://www.iamgold.com/French/Home/default.aspx.
SOURCE IAMGOLD Corporation
Bob Tait, VP Investor Relations, IAMGOLD Corporation, Tel: (416) 360-4743 Mobile: (647) 403-5520; Laura Young, Director Investor Relations, IAMGOLD Corporation, Tel: (416) 933-4952 Mobile: (416) 670-3815; Penelope Talbot-Kelly, Analyst Investor Relations, IAMGOLD Corporation, Tel: (416) 933-4738 Mobile (647) 280-0519; Toll-free: 1-888-464-9999 info@iamgold.com