* CEO eyes quick new growth opportunities for gold miner
* CEO outlines plan to spin-off niobium, rare-earth asset
By Euan Rocha and Julie Gordon
TORONTO, May 24 Mid-tier miner Iamgold Corp
(IMG.TO) is ready for risk and acquisitions as it builds and
then spends a cash pile that will soon top $1.5 billion.
New Chief Executive Stephen Letwin, a newcomer to the
booming gold sector, told Reuters that he aims to spin off
Iamgold's non-gold asset into a new entity and speed up the
process of developing new mines.
"I find the time between discovery and actual production to
be much longer than I think it needs to be," said Letwin, who
took the reins at Iamgold (IMG.TO) last November after a career
at the likes of Enbridge (ENB.TO) and TransCanada (TRP.TO).
In an industry filled with colorful characters, but fairly
conservative practices, Letwin's views sound refreshing. He
wants to challenge his team to take risks and think outside the
box, especially when it comes to bringing new ounces online.
"I find that the mining side is not as integrated as I
would like it to be," he said from a corner office adorned with
West African and Chinese figurines, and a stunning view of the
towers of downtown Toronto.
"The exploration team and the production community tend to
be too silo-like in structure... One thing I'm going to work on
is making it more fluid, so that we work more in unison and
bring production onstream sooner."
Since Letwin's arrival about six months ago, Iamgold's
shares have risen close to 20 percent, easily outpacing shares
of peers like Yamana Gold (YRI.TO), Eldorado Gold (ELD.TO), New
Gold (NGD.TO) and Agnico Eagle (AEM.TO).
Iamgold plans to produce roughly a million ounces of gold
this year and 1.8 million ounces within five years.
For Sector Comparison Data: link.reuters.com/peb79r
Since Letwin arrived Iamgold has sold its interests in the
Tarkwa and Damang gold mines in Ghana. It has begun work on
spinning out its niobium mine in Quebec and it plans to expand
its Rosebel gold mine in Suriname.
Once those deals are done, Letwin sees Iamgold sitting on a
cash horde of over $1.5 billion, which he intends to deploy
toward mine expansions and acquisitions. He can expand some
existing assets with minimal capital spending, he says.
To prove his point, Letwin picks-up a marker and maps out
some promising prospects around Rosebel on a whiteboard.
"It means probably taking more risk," he said. "But I think
it's worth it, because you don't have to drill everything to
certainty, especially in some of these trends that we're in."
Letwin said any future Iamgold acquisitions will most
likely be in Canada or South America. He said Iamgold may look
at takeovers in the $300 million to $500 million range.
"We're not really interested in buying a producing mine
where the market's given it full value and you're paying
another 30 percent to get it," he said.
With his sight set on transforming Iamgold into a pure-play
producer, Letwin wants to spin out Niobec, the company's
niobium mine, into a separate, rare metal-focused company.
"Most of our gold investors don't even know how to
pronounce niobium and they have no idea what it is," he said.
Iamgold produces about 8 percent of the world's supply of
the rare metal, which is used to harden to steel.
With a $1 billion expansion, Niobec could triple production
within three to five years, said Letwin, pulling out a resource
map and pointing to a large red and orange blob that surrounds
the pinpoint dot of the current shaft.
"We're gonna sell 10 percent of this block, or 20 percent,
get a marker on value and then look to IPO another 25 to 35
percent," said Letwin, who sees steelmakers as likely suitors.
Letwin thinks the asset, which is being shopped in Asia,
North America and Europe, will end up being worth $1.5 to $2
billion. But niobium is just one aspect of the project.
"We have alongside it some rare earths that we drilled in
the 1990s," said Letwin, pointing at the orange blob. "We did
more drill work and were doing some metallurgy on it to figure
out whether or not this is commercial."
Demand is booming for rare earth metals, which are used in
smartphones, wind turbines and hybrid cars, even as China,
producer of about 95 percent of world's supply of the group of
17 metals, has clamped down on exports.
But rare earths are not gold. Each deposit is different,
and separating the rare earths from the host mineral is often
Letwin, an avid hunter and fisherman, is confident that the
metallurgical work, due to be completed this summer, will prove
a mother lode of valuable rare earths at Niobec.
"All I know is that my gut tells me that this thing is
going to be commercial. We're going to go after it," he said.
(Editing by Janet Guttsman)