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What Would It Take to Restore Investors’ Confidence in IAMGOLD?

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IAG’s third-quarter earnings

IAMGOLD (IAG) reported its third-quarter earnings results after the market closed on November 6. It reported EPS of -$0.01, in line with analysts’ consensus estimate. Its revenue, however, missed expectations, coming in at $244.8 million compared to the consensus estimate of $266 million.

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Stock momentum weak

IAMGOLD’s overall stock momentum has been negative YTD (year-to-date). As of November 7, the stock has fallen 43%. This is a huge underperformance given the 17% fall in the value of the VanEck Vectors Gold Miners ETF (GDX) in the same period and the SPDR Gold Shares ETF’s (GLD) return of -6.2%.

Its peers Agnico Eagle Mines (AEM), Yamana Gold (AUY), and Kinross Gold (KGC) have returned -22.7%, -25.6%, and -38.2%, respectively, YTD. Eldorado Gold (EGO) and New Gold (NGD) are faring worse than IAMGOLD in terms of stock performance YTD, but they’re dealing with a lot of geopolitical and operational issues.

IAMGOLD’s operating performance has been weak in 2018, including during its latest quarter, which is concerning for investors.

Series overview

In this series, we’ll look at the key drivers of IAMGOLD’s operational performance in the third quarter. We’ll discuss the company’s production progress, unit cost update, project progress, and financial position. We’ll also look at its valuation multiple and any catalysts that could lead to its rerating.

In the next article, we’ll look at more highlights from IAMGOLD’s third-quarter earnings results.

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