UPDATE 1-Iamgold says no news pending; no reason for stock surge

Tue Jun 3, 2014 5:12pm EDT
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(Adds details from market participants, trading data, background)

By Euan Rocha and Nicole Mordant

TORONTO/VANCOUVER, June 3 (Reuters) - Canadian gold miner Iamgold Corp said it was unclear why its stock had surged in late afternoon trading on Tuesday, and stressed that the company had no news pending at this time.

Toronto and New York listed shares in the stock both surged at around 1400 ET (1800 GMT). The stock rallied as much as 16 percent, before closing the day up more than 12 percent on both exchanges.

Market sources, who asked not to identified as it is against their firm's policy on comment on individual companies, said the move might be tied to speculation around Iamgold's long-planned sale of its Niobec niobium mine in Quebec.

However, Bob Tait, the company's head of investor relations, stressed that Iamgold has nothing imminent to announce around that asset sale process.

The market sources said the surge may also be tied to B2Gold Corp's move on Tuesday to acquire Australia's Papillon Resources in a bid to gain access to its Fekola gold deposit in Mali.

Iamgold also owns interests in assets in Mali and Burkina Faso and market participants said there is speculation that the B2Gold move could spur other companies focused on West Africa to make a move on Iamgold, whose share price has fallen more than 70 percent in the last two years as the price of gold has slid.

However, the B2Gold deal was announced before market open on Tuesday, and the rally in Iamgold's share price and the uptick in trading volumes began only in afternoon trading.

Trading data indicates that the vast majority of the spike in buying volumes on Tuesday afternoon was driven by brokerage firm CIBC Capital Markets, with other large firms like Jennings, ITG and National Bank selling positions in Iamgold's stock.

A spokeswoman for CIBC was not immediately able to comment on the trading moves. (Editing by Alden Bentley)