Shares of IAMGOLD Corporation (IAG) climbed to a new 52-week high of $5.12 on August 16, propelled by a surge in gold prices and the company’s impressive second-quarter production figures. IAMGOLD, with a market capitalization of $2.89 billion, currently boasts a Zacks Rank #1 (Strong Buy). The company’s stock has seen a remarkable 135.2% gain in the past year, outpacing the industry’s 43.6% growth and significantly exceeding the S&P 500’s 28.3% rise in the same period.
IAMGOLD’s strong second-quarter performance, announced on August 8, was a major driver behind the stock’s surge. The company reported adjusted earnings per share of 16 cents, a significant improvement from the 1-cent loss reported in the previous year’s quarter. This impressive turnaround was fueled by higher gold sales and realized gold prices, leading to a 61.1% year-over-year revenue surge to $385 million. Attributable gold sales reached 167,000 ounces, a 38% increase compared to the 121,000 ounces sold in the second quarter of 2023. The average realized gold price per ounce also climbed 16% year-over-year to $2,294.
One of the key contributors to IAMGOLD’s strong performance was the successful launch of the Côté Gold mine. The mine, operated as a joint venture with Sumitomo Metal Mining Co., Ltd., achieved commercial production on August 2, 2024. In the second quarter, the Côté Gold mine contributed 20,000 ounces of gold to IAG’s production, boosting its total attributable production to 166,000 ounces, a remarkable 55.1% year-over-year increase. In May, IAMGOLD completed a bought deal equity financing, raising $300.24 million. These proceeds will be used to repurchase a 9.7% interest in the Côté Gold mine from Sumitomo, increasing IAMGOLD’s stake in the mine back to 70%.
IAMGOLD’s positive outlook for the future is another factor supporting its stock price. The company projects the Côté Gold mine to produce between 220,000 and 290,000 ounces of gold (on a 100% basis) in 2024. Strong performances at the Essakane and Westwood mines also contributed to the solid second-quarter results. Essakane mine reported attributable production of 111,000 ounces in the second quarter, a 26.1% year-over-year increase, primarily driven by higher grades. Westwood’s output surged 84% year-over-year to 35,000 ounces. This strong performance led to an increase in the company’s production guidance for Essakane and Westwood, raising it to 495,000-540,000 ounces from the previous forecast of 430,000-490,000 ounces.
Gold prices have been on an upward trajectory throughout 2024, driven by a potential for the Federal Reserve to start lowering interest rates. Since the start of the year, gold prices have risen by 21.3% and consistently remained above the $2,000-per-ounce mark. This upward trend is attributed to several factors, including heightened geopolitical tensions, the possibility of monetary policy easing, and continuous purchasing by central banks. The yellow metal currently trades at an all-time high of around $2,500 per ounce.
In addition to IAMGOLD, other top-ranked stocks in the basic materials sector include Carpenter Technology Corporation (CRS) and Eldorado Gold Corporation (EGO). Both companies currently hold a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share, with a 17% upward revision in the past 60 days. CRS shares have gained 155.9% in the past year. Eldorado Gold’s 2024 earnings consensus estimate stands at $1.32 per share, with a 22% increase in the past 60 days. EGO shares have experienced a 103% gain in the past year.
