IAMGOLD Corporation has announced that to reinforce an already strong financial position and improve its return on capital, the Company has initiated a program to reduce annualized spending by $100 million.
This will be achieved through cost-cutting initiatives aimed at reducing mine operating costs, exploration expenditures and mine site and corporate general and administrative costs. The Company ended 2012 with over $1 billion in cash and gold bullion.
“We have a long track record of generating attractive returns on capital employed,” said President and CEO, Steve Letwin.
“The need for a robust return on capital is not a new concept at IAMGOLD, and we continue to approve only projects that will generate a return surpassing our risk adjusted cost of capital. Our recent share price performance is unacceptable. We are determined to intensify our return on capital and improve our operating performance. In this period of lower gold prices and rising costs we have launched an aggressive cost reduction program to remove $100 million from our 2013 plan.”
While improving operating efficiency and containing costs are on-going priorities, the company has targeted cost reductions across all aspects of its global operations. These cost reductions will counter the cost pressure from inflation and an increasing amount of hard rock at Essakane and Rosebel. The higher proportion of hard rock at these operations increases the demand for power to grind and crush the ore.
Letwin added, “Our assault on costs will continue until we have exhausted all possible opportunities to reduce spending. Our management team is fully focused on meeting this goal and intends to report on our progress as we move forward.”