TORONTO - IAMGOLD (NYSE:IAG) Corporation (NYSE:IAG, TSX:IMG), a mid-tier gold mining company, has struck a deal with a group of underwriters for a bought deal offering of 72 million common shares at a price of $4.17 each, totaling approximately $300 million in gross proceeds. The syndicate is led by National Bank Financial Markets, BMO Capital Markets, and RBC Capital Markets.
This transaction, announced today, includes an over-allotment option for the underwriters, allowing them to purchase up to an additional 10.8 million shares at the same price within 30 days post-closing. If fully utilized, this could raise the total proceeds to roughly $345 million.
IAMGOLD intends to use the net proceeds from this offering, which may include the additional funds from the over-allotment option, to repurchase a 9.7% interest in the Côté Gold Mine from Sumitomo Metal Mining Co., Ltd. This move will restore IAMGOLD's ownership stake in the mine to 70%.
The company plans to deposit the net proceeds from the offering into an interest-bearing account or to use them to repay amounts under its credit facility until the repurchase transaction is complete, which is anticipated before the end of the calendar year.
The Côté Gold Mine, located in Ontario, Canada, is operated through a joint venture between IAMGOLD and Sumitomo. IAMGOLD currently holds a 60.3% interest and has the option to buy back the 9.7% interest from Sumitomo, a right established in a joint venture agreement dated December 19, 2022.
The offering is expected to close on or about May 24, 2024, subject to customary closing conditions, including regulatory approvals from the Toronto Stock Exchange and the New York Stock Exchange.
IAMGOLD has filed a registration statement with the U.S. Securities and Exchange Commission and a base shelf prospectus with Canadian securities regulators for the offering. The base shelf prospectus and the prospectus supplement, which will be filed within two business days, will be available on SEDAR+.
The information in this article is based on a press release statement from IAMGOLD Corporation.
InvestingPro Insights
As IAMGOLD Corporation (NYSE:IAG) navigates through its strategic financial maneuvers, insights from InvestingPro shed light on some of the underlying financial metrics and analyst expectations that could be pivotal for investors.
With a market capitalization of $2,230 million and a Price/Earnings (P/E) ratio of 15.73, the company is making noticeable strides in the market. Still, when considering the adjusted P/E ratio for the last twelve months as of Q1 2024, which stands at 36.46, investors are valuing the company's earnings more richly in anticipation of future growth.
Speaking of growth, IAMGOLD's revenue has seen a significant uptick, with a 19.54% increase over the last twelve months as of Q1 2024. This is further accentuated by a quarterly revenue growth of 49.82% in Q1 2024, highlighting a robust short-term expansion in sales. The company's gross profit margin stands at 16.98%, which, while not exceptional, indicates a stable ability to turn revenue into profit.
Turning to InvestingPro Tips, analysts are optimistic about IAMGOLD's prospects, expecting net income and sales growth in the current year. Moreover, two analysts have revised their earnings estimates upwards for the upcoming period, signaling confidence in the company's financial performance.
On the flip side, the company is noted for its cash burn, which is something investors should monitor closely, especially when considering the capital raised through the recent share offering. Moreover, the stock's recent performance has been quite volatile, with a substantial price uptick over the last six months, and it is currently trading near its 52-week high.
For investors seeking a deeper dive into IAMGOLD's financial outlook and performance, InvestingPro offers additional expert analysis and tips. There are 14 more InvestingPro Tips available for IAMGOLD at Investing.com/pro/IAG. To enhance your investment research, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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