TORONTO – Iamgold Corp. (TSX:IMG) reported a big drop in third-quarter revenue and earnings, citing lower prices for gold and higher operating costs.
The Toronto-based miner, which reports in U.S. dollars, said Tuesday that net earnings attributable to shareholders fell 68 per cent to US$25.3 million or seven cents per share in the period ended Sept. 30.
That compared with net earnings of $78 million or 21 cents per share in the year-earlier period.
Revenue fell 13 per cent to $293.5 million from $336.2 million as lower gold prices were only partially offset by a higher volume of sales.
The cost of sales for the third quarter was $218.3 million, up $33.1 million from the same prior-year period, primarily the result of higher operating costs ($27 million) and higher depreciation expense ($9.7 million), partially offset by lower royalties arising from a lower average realized gold price ($3.6 million).
“We had a good quarter despite the challenging environment in our industry,” president and CEO Steve Letwin said in the Iamgold earnings announcement, issued after stock markets closed.
He said the company launched a program to reduce its annual operating costs by $100 million, without cutting jobs, before the drop in gold prices.
“This program has been highly successful to date as costs have been lowered by $77 million,” he said.
“As a result, our third-quarter cash costs and all-in sustaining costs were well within guidance and we expect to meet our cost reduction targets for the year.”
Meanwhile, Letwin said that while Iamgold remains optimistic about the long-term prospects for gold, “we are prudently planning for a lower gold price environment.”
On the Toronto Stock Exchange, Iamgold shares closed down 21 cents, or 3.9 per cent, at C$5.18 on Tuesday.