First-quarter profit at Iamgold(IMG.TO) tripled, the company said on Tuesday, as soaring gold prices more thanmade up for higher-than-expected costs and the impact of a robust Canadiandollar.
The mid-tier Canadian goldproducer earned $34.4 million, or 12 cents a share, in the three months endedMarch 31. This was up from $11.3 million, or 4 cents a share, in the sameperiod a year earlier.
Analysts polled by Reuters hadexpected, on average, a profit of 13 cents a share, before exceptional items.
In early trading on the TorontoStock Exchange, the company's shares were up 2 Canadian cents at C$6.07.
Quarterly revenue grew 42 percentto $208 million, as average realized gold prices surged to $899 an ounce from$648 an ounce.
Gold production was 234,000ounces during the quarter, up from 219,000 a year before.
Cash costs per ounce climbed 14percent to $476, above the company's expectations, due to higher oil prices, astrong Canadian dollar and royalties paid on higher gold prices.
However, Iamgold maintained itsfull-year 2008 cost expectations of $455 to $470 an ounces, and also reaffirmedits production outlook of 920,000 ounces of gold.
SELLING NON-CORE ASSETS
The company has been trying toraise cash by selling off non-core assets, such as the La Arena copper and goldproperty in Peru, which it agreed last week to sell to Rio Alto Mining for $47.6 millionand a 5.5 percent interest in Rio Alto.
Iamgold also obtained a $140million five-year revolving credit facility in April.
This financial strengthmeans we have almost $0.5 billion in cash available to expand our productionand resource base beyond our existing portfolio and is a step towards achievingour long term growth objective of doubling production within five years,Chief Executive Joseph Conway said in a release.
Iamgold's shares have come underpressure recently, as a six-month freeze on mining activity in Ecuador has muddied the future of Iamgold's Quimsacochagold deposit, which contains an estimated 3.3 million ounces.
Iamgold said it will advance thework necessary to complete a prefeasibility study scheduled for July. It warnedthere could be an adverse impact if it is not able to reach an agreement on arevised mining concession, but said there was no reason to record an impairmenton the property.
(Reporting by Cameron French;Editing by Bernadette Baum)
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