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IAMGOLD's (IAG) Shares Scale 52-Week High: More Room to Run?

Shares of IAMGOLD Corporation IAG scaled a new 52-week high of $3.80 on Apr 5, before closing the session a tad lower at $3.72.

The stock rose on the announcement of its first gold pour at the Côté Gold Mine, located in Ontario, Canada, on Mar 31, 2024. This marks a milestone for IAG as the mine is expected to significantly boost its production while lowering the cost profile. The company’s share price surged as gold prices hit record levels due to multiple factors like U.S. interest rate cut bets, geopolitical tensons, speculative buying and central bank purchases.

IAG has a market capitalization of $1.86 billion and carries a Zacks Rank #3 (Hold) at present.

Over the past three months, the stock has risen 57.6%, outperforming the industry's 18% growth.

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IAMGOLD’s shares have surged 47% since it reported fourth-quarter 2023 results on Feb 15, 2024. The company reported fourth-quarter adjusted earnings per share of 6 cents, which marked a turnaround from a loss of 2 cents per share in the fourth quarter of 2022. Revenues surged 44% year over year to $298 million on higher sales volume and average realized gold price.

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With Côté Gold coming online, IAMGOLD now operates three active mines, alongside Essakane in Burkina Faso and Westwood in Quebec, Canada. Côté Gold is operated as a joint venture between IAMGOLD and Sumitomo Metal Mining Co., Ltd., a subsidiary of Sumitomo SSUMY. IAG and Sumitomo Metal Mining started construction on the Côté Gold Project in the third quarter of 2020.

IAMGOLD will concentrate on the ramping up operations toward commercial production scheduled for the third quarter of 2024 and expects to achieve a throughput rate of 90% by the end of this year.

The company has meanwhile entered into a forward gold sale and partially amended one of its existing gold prepay arrangements. The net result of these arrangements is the effective transition of current gold delivery obligations totaling 37,500 ounces out of the second quarter of 2024 into the same period in the following year. This will lead to an increase in cashflow in the second quarter of 2024 by approximately $73.6 million, based on current gold prices.

The deferral of the prior prepay arrangement for gold deliveries out of the second quarter will provide additional liquidity during a period when the Côté Gold mine ramps up toward commercial production.

Production guidance from Côté Gold mine for 2024 (on a 100% basis) remains at 220,000 to 290,000 ounces of gold, subject to the fulfillment of the remaining milestones. For 2024, excluding Côté Gold, IAG anticipates attributable gold production to range between 430,000 ounces and 490,000 ounces. IAMGOLD reported attributable gold production of 465,000 ounces for 2023.

At a steady run rate, Côté Gold is expected to rank among the largest operating gold mines in Canada. It has an expected mine life of more than 18 years and significant opportunities for growth.

Zacks Rank & Key Picks

Some better-ranked stocks from the basic materials space are Ecolab Inc. ECL and Carpenter Technology Corporation CRS, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ecolab’s 2024 earnings is pegged at $6.39 per share, indicating an increase of 22.7% from the prior year’s reported number. It has a trailing four-quarter average earnings surprise of 1.7%. ECL's shares have risen 16% in the past three months.

The Zacks Consensus Estimate for Carpenter Technology’s 2024 earnings is pegged at $4.00 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days. It has a trailing four-quarter average earnings surprise of 14.3%. CRS shares have gained 22% over the last three months.

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Ecolab Inc. (ECL) : Free Stock Analysis Report

Carpenter Technology Corporation (CRS) : Free Stock Analysis Report

Sumitomo Corp. (SSUMY) : Free Stock Analysis Report

Iamgold Corporation (IAG) : Free Stock Analysis Report

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