IAMGOLD Corp (USA) (NYSE:IAG) shares jumped 16.00% to $3.77 on Friday thanks to rising gold prices and the company’s joint venture with Canadian company TomaGold.
IAMGOLD Corp (USA) (NYSE:IAG) is engaged in the exploration, development and production of mineral resource properties across the world. It has interests in various operations and exploration properties, as well as various royalty interests on mineral resource properties. Its gold bars are sold to gold refineries in North America and Europe.
The joint venture between IAMGOLD Corp and TomaGold was initiated in 2013 and has evolved on encouraging results. TomaGold is a Canadian exploration company with properties in Quebec, where the government is very pro-mining in its support for companies and investors in different ways through subsidizing taxes and paying back some of the exploration costs.
The company’s flagship property is in Monster Lake, Quebec, with IAMGOLD Corp holding a large 50% ownership of the lake. With these 2015 terms, IAMGOLD Corp has the option to acquire an additional 25% interest by spending $10 million in exploration work over a 7-year period, with a minimum of $500,000 to be spent each year.
IAMGOLD Corp has a market cap of $1.74 billion under 405.94 million shares outstanding. Its shares have been trading in a 52-week range of $1.15 to $4.05 and its current price is already approaching the top of the range, at which profit-taking could take place.
Gold has recently jumped back to the $1,250/ounce level after the US economy printed a weaker than expected May NFP report. The economy added only 38K jobs during the month versus the estimated 159K gain while the previous reading was downgraded from 160K to 123K. Gold could be poised for further upside to the $1,280-1,300/ounce levels on continued risk aversion in the financial markets, allowing mining-related companies such as IAMGOLD Corp to keep seeing stock gains.
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