OTTAWA (Reuters) - Fourth-quarter profit at Canadian gold producer Iamgold Corp (IMG.TO) IAG.N dipped 9 percent, the company said on Friday, as charges related to its acquisition of gold miner Cambior and resource development costs at its Doyon mine in Quebec hurt results.
The mid-tier producer earned $8.5 million, or 3 cents a share, in the three months ended December 31, down from $9.4 million, or 4 cents a share, in the same period a year earlier.
Shares in the Toronto-based company fell sharply in early trade, losing 6.4 percent on the Toronto Stock Exchange to $7.44 and falling 6.2 percent in New York to $7.30.
The company also said that its proven and probable resources dropped 17.5 percent to 8 million ounces at the end of 2007 from 9.7 million at the close of 2006. Measured and indicated resources rose 5 percent over 2006 to 22.7 million ounces.
Quarterly net results included an impairment charge of $5.9 million, or 2 cents a share, from its Doyon mine, and $10.8 million, or 4 cents a share, related to the Cambior deal.
Adjusted earnings rose to $14.4 million, or 5 cents a share, from $10.7 million, or 4 cents a share.
On average, analysts polled by Reuters Estimates had expected the company to earn 11 cents a share.
Iamgold produced 253,000 ounces of gold during the quarter, up from 221,000 ounces in the comparable quarter. Cash costs were up 16 percent at $427 an ounce.
The average realized gold price surged to $787 an ounce from $619 an ounce.
Cash flow jumped to $56.6 million from $4.7 million reflecting bigger sales from its acquisitions and higher gold prices.
For 2008, the company forecasts gold production at 920,000 ounces of gold at a cash cost of between $455 and $470 per ounce.
Iamgold also said that demand for ferroniobium, a strengthening element used in steel manufacturing which it produces from its niobium mine, is seen strong for at least the next two years.
For the full year, Iamgold’s net loss was $42.1 million, or 14 cents per share, versus earnings of $72.5 million, or 39 cents share, in 2006. Adjusted earnings fell to $57.6 million from $74.1 million.
“While we were disappointed with the loss for the year, we delivered a record operating cash flow and we have made significant progress at our operations and most of our development projects,” Chief Executive Joseph Conway said in a statement.
Reporting by Susan Taylor; Editing by Peter Galloway