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Iamgold names new CEO as it continues growth trajectory

Canadian gold producer Iamgold has reported “solid” 2019 production results and announced a successor to replace CEO Steve Letwin, who has decided to retire after leading the company for a decade.
Iamgold names new CEO as it continues growth trajectory Iamgold names new CEO as it continues growth trajectory Iamgold names new CEO as it continues growth trajectory Iamgold names new CEO as it continues growth trajectory Iamgold names new CEO as it continues growth trajectory

Iamgold CEO Steve Letwin has announced his retirement effective end-February

The Toronto-headquartered company said COO Gordon Stothart would take the reins and also join the board on March 1. Letwin and Stothart had worked closely since Letwin's appointment as CEO on November 1, 2010.

Chairman Don Charter said Stothart was "highly respected" in the industry and the board believed he was the "right successor" to lead the company.

The company also reported consolidated output of 762,000oz for 2019, which came in at the lower end of the 765,000-810,000oz guidance range. December-quarter production was 192,000oz.

Stothart said Iamgold faced a "number of challenges" in 2019, but the company still delivered a "solid" year of production.

Contributing factors included an extended maintenance shutdown at the Burkina Faso-based Essakane mine in the fourth quarter and changes to mine sequencing.

The company's total cash costs were expected at the top end of the guidance of US$860-$910/oz and all-in sustaining costs were expected at the top end of guidance between $1,090-1,130/oz.

Stothart said 2020 would be a "year of transition" for Iamgold, as it focused on the future of Essakane and Rosebel (in Suriname), continued development of Westwood (in Canada's Quebec province) and brought Saramacca (also in Suriname) up to full production, "leading to an improvement in the forecast for 2021".

Iamgold expects total gold production of 700,000-760,000oz in 2020, reflecting no production at Sadiola, rising by 10% in 2021 to between 760,000-840,000oz.

BMO Capital Markets analyst Jackie Przybylowski said the guidance update was a negative in her view.

"2020 guidance is below our estimates for production and above for capex spending, as pit pushbacks at both Essakane and Rosebel affect operations through the year and as Iamgold moves forward with development at Westwood. We maintain our 'Market Perform' rating, but our target price is lowered to US$4.00 per share (from $4.25/share)," she said in a note.

Przybylowski also said the company's 2020 guidance highlighted the continued importance of exploration and growth at the company, which was a differentiator from other gold companies in BMo's coverage universe. "Iamgold expects to continue evaluating satellite targets around Saramacca and to explore at Cote, Boto, the Rouyn project near Westwood, Nelligan, and other earlier-stage projects."

Iamgold will report full-year and December-quarter financial results on February 19.

The company's share price (TSX:IMG) has fallen more than 13% over the past 12 months, sheding another 7% Thursday to C$4.11, which capitalises it at just under $2 billion (US$1.5 billion).