“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.” Although many would recognize the quote as the beginning of the 1859 Charles Dickens’ classic, A Tale of Two Cities, the theme is recalled to life in the bipolar market sentiment and behavioral finance which has created the most recent 2 day chart of the Standard & Poor’s 500 index. The S & P 500 climbed 5 percent by the end of Tuesday’s close, recovering from an 8.8 percent fall, its largest single day decline since October 1987. Following in the wake of Monday’s sell off, Wall Street saw its strongest trading session in six years, with many investors expecting that Washington will revitalize the US financial sector bailout plan in some format. Closing the chapter on a very dark September for Wall Street, gold has increased 5.5 percent over the month, and is up 17 percent in the past year. The spot price of gold ended the day at USD $871.45 per troy ounce, as the US dollar strengthened on positive news flow and market sentiment.
On Monday, IAMGOLD Corporation (TSX: IMG, NYSE: IAG) provided an update on recent progress focused on optimizing operational performance, cost reduction initiatives and exploration and project development acceleration. The release highlighted strategic planning that will result in cost-cutting measures at a number of operations and additional initiatives designed to accelerate development in Quebec, Mali, and Botswana.
Additional positive news flow for IAMGOLD was supplied in a statement issued earlier Monday, indicating strong support for Ecuador’s constitutional referendum which includes the mandate to form a new policy for mining development. The market responded positively, on a day when many of the major gold producers traded down, IAMGOLD shares finished strongly at USD $5.62.
The North American Precious Metals team at Macquarie recently maintained an “outperform” rating on IAMGOLD Corporation shares. The team raised the 12 month target price to USD $10.00 per share, which implies a 77.9 percent premium to current market valuation levels. Operational results were strong for the second quarter, with production higher than anticipated, partly due to acceleration of final mining at Sleeping Giant, and increased production guidance for the year.
During the second quarter earnings conference call, Carol Banducci, Chief Financial Officer highlighted the cash flow position of the company, “IAMGOLD continues to maintain a very strong balance sheet and has significant liquidity”. Many analysts and observers believe that the company might have an excellent opporunity to make strategic acquisitions, however capturing value and successfully integrating a target into the company’s current operational portfolio will remain a question mark for investors.
IAMGOLD is a mid-tier gold producer, and is engaged in the exploration and development of mineral resource properties in the North West Territories, Quebec, Suriname, Mali, Ghana, Botswana, French Guiana, Ecuador, Tanzania and Peru. The company is headquartered in Toronto, and has a market capitalization of USD $1.7 B.