May 21, 2019 / 3:14 PM / a year ago

BUZZ-RBC cuts Iamgold PT on uncertainty at Westwood mine and limited FCF

** RBC Capital Markets lowers PT for Iamgold Corp to $3.25 from $5 following operational challenges in co’s Westwood mine in Canada, limited near-term free cash flow and elevated geopolitical risk at a mine in Burkina Faso

** Operations at Westwood have taken a hit as a result of seismic issues underground. An updated mine plan expected in Q4 2019 could result in lower output at higher costs long term -RBC

** Brokerage lowers output estimates at Westwood to 135,000 ounces (oz) at $930/oz over a 12-year mine period vs prev est of 145,000 oz at $875/oz over 15 years

** Co trades at a significant discount to peers on long-term NAV and near-term EV/EBITDA and this could persist until greater clarity is provided on the mine -RBC

** RBC estimates average FCF yield of negative 12% vs 6% for peers through 2021

** Out of 13 brokerages, 7 rate the stock “buy” or higher, 6 “hold”; median PT $4

** Up to Monday’s close, stock down ~30% YTD (Reporting by Shanti S Nair in Bengaluru)

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