* Sells 18.9 pct stake in Tarkwa and Damang gold mines
* Says sale is first of several initiatives
* Shares down 3.55 pct in early trade in Toronto
By Pav Jordan
TORONTO, April 15 Canadian mid-tier gold miner
Iamgold Corp (IMG.TO) said on Friday its war chest for
expansion has grown to more than $1 billion with the sale of
stakes in two West African mines.
Iamgold agreed to sell its 18.9 percent stake in the Tarkwa
and Damang gold mines in Ghana to Gold Fields Limited (GFIJ.J),
world's fourth-largest gold producer, giving it $667 million
once the transaction is complete. That is in addition to a $350
million undrawn credit facility.
"Upon completion of this transaction, we will have more
than one billion dollars in cash, cash equivalents and gold
bullion (at market)," Iamgold Chief Executive Steve Letwin said
in announcing the deal. [ID:nL3E7FF1UX]
"This sale is the first of several strategic initiatives to
create value for our shareholders," he said.
Iamgold is bolstering its financial strength at a time of
aggressive merger and acquisition activity in the global gold
sector, driven by safe-haven buying that has driven the price
of the precious metal to record levels.
Letwin did not indicate how the funds would be used to
drive the Toronto-based company's growth but said that the
minority stakes did not fit with Iamgold's strategy of being
the operator of the mines it invests in.
The company said in a statement to announce the stake sale
that it continued to assess acquisition opportunities that will
Iamgold, which expects to produce more than 1 million
ounces of gold in 2011, has invested aggressively to expand
existing operations and to explore for new gold properties.
In January, the company forecast 2011 capital expenditures
of $460 million, mainly for expansion of its Rosebel mine in
Suriname, Essakane mine in Burkina Faso and the development of
its Westwood gold project in Canada.
"Our strong liquidity position gives us considerable
financial flexibility to continue growing our business," Letwin
said on Friday.
Iamgold's growth plans focus on West Africa, South America
and regions of Canada.
The company's shares fell 3.55 percent in early trade in
Toronto on Friday to C$20.30 per share.
(Editing by Steve Orlofsky)