August 8, 2008 / 5:38 PM / 10 years ago

UPDATE 1-Iamgold seeking acquisitions, rebounds to profit

By Cameron French

TORONTO, Aug 8 (Reuters) - Iamgold (IMG.TO) has added its name to the list of mining companies seeking cheap takeovers among hard-hit exploration firms.

Speaking on a conference call to discuss Iamgold’s second-quarter profit, Chief Executive Joe Conway said the mid-tier gold producer was actively looking for acquisitions, particularly in West Africa, where it is already active.

“We’re looking at projects at various levels, all the way from exploration projects to those that are pre-feasibility or better,” he said.

Stocks of small miners with development-stage projects have fallen harder than larger producers, as unfavorable credit conditions mean the small players have run into funding problems.

But larger miners such as Goldcorp (G.TO) and Kinross Gold (K.TO) have made moves in order to secure future production.

Goldcorp has bid C$1.3 billion for Gold Eagle GEA.TO, while Eldorado Kinross is buying Aurelian Resources ARU.TO for about C$1 billion.

Toronto-based Iamgold operates 8 gold mines in Canada, South America, and Africa.

The company also has five development projects, including the Quimsacocha deposit in Ecuador, which has been somewhat in limbo since Ecuador froze mining activities as it rewrites its mining law.

Conway said he expects the new law to be unveiled before the end of September, and said Iamgold has been working with the government to prepare the new standards.

“We’ve participated very actively in the ongoing mining code development,” he said.

The uncertainty in Ecuador has hurt the shares of companies active in the country, including Iamgold, which is down 25 percent so far this year.

The stock was down 20 Canadian cents at C$6.04 on the Toronto Stock Exchange on Friday, falling alongside other gold miners as the price of the metal continued to decline.

Iamgold said it earned $33.3 million, or 11 cents a share, in the second quarter, compared with a loss of $81.4 million, or 28 cents a share, in the same period last year.

The year-before result was hit by a big impairment charge at its Mupane mine in Botswana.

Iamgold raised its 2008 production expectations to 950,000 ounces from 920,000 ounces, due to better-than-expected production at its mines. It said cash costs would be in a range of $485 to $495 an ounce, up from $455 to $470 an ounce. ($1=$1.07 Canadian) (Reporting by Cameron French; editing by Janet Guttsman)

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