Join        Login             Stock Quote

Iamgold (IAG) Closes Sale of Quimsacocha Project in Ecuador

 November 14, 2012 12:27 PM

(By Balaseshan) Iamgold Corp. (NYSE: IAG) said it has completed a transaction with INV Metals Inc. to sell Iamgold Ecuador S.A., which includes the Quimsacocha project in Ecuador.

Iamgold indirectly received an aggregate of 221.28 million INV Metals' common shares as consideration for the sale. In addition, as part of INV Metals' private placement that was required as part of the transaction, Iamgold acquired an additional 10 million INV shares for $0.10 per INV share.

The total number of INV shares received by Iamgold or its affiliates pursuant to the transaction combined with the INV shares Iamgold acquired in the related private placement is 231.28 million INV shares, which represents about 47 percent of all INV shares issued and outstanding.

[Related -One Thing Needs To Happen Before Precious Metals Start To Rally Again]

Based on the closing price of the INV shares on the Toronto Stock Exchange on November 6, the INV shares acquired by Iamgold or its affiliates pursuant to the transaction have a deemed value of $0.13 per INV share, giving the transaction a total value of about $30 million.

Pursuant to the transaction, Iamgold will also be entitled to receive two milestone payments. The first milestone payment of 50 million INV shares will be paid when INV Metals signs an exploitation contract with the government of Ecuador. The second milestone payment of 25 million INV shares will be paid upon achieving commercial production.

"Our strategy has been to focus on expanding our core long-life assets that can provide the greatest rate of return for Iamgold. Structuring the sale of Quimsacocha in this way allows Iamgold to participate in the future success of this project," said Steve Letwin, president and CEO of Iamgold.

[Related -For Bears Who Want To Bear Down]

Iamgold currently has no intention of acquiring ownership of, or control over, additional securities of INV Metals other than additional INV shares that may be issued to Iamgold through the milestone payments.

In addition to the share purchase agreement, Iamgold entered into: a registration rights agreement with INV Metals, an equity rights agreement, and a nomination agreement.

IAG is trading down 16.62 percent at $12.39 on Wednesday. The stock has been trading between $9.20 and $21.54 for the past 52 weeks.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageEmerging-Markets Stocks Took The Lead Last Week

Emerging-markets equities enjoyed a solid rise last week among the major asset classes, based on a set of read on...

article imageDoes Your Latest Investment Pass This Test?

On Wednesday, I sounded the alarm about the problems looming for some consumer staples stocks. In short, read on...

article imageIs The Slump In US Manufacturing Easing?

Yesterday’s November survey data from the Philadelphia Fed hints at the possibility that a stronger trend read on...

article imageMarket Potentially Facing Near Term Technical Headwinds

After the S&P 500 Index pullback on Thursday and Friday last week, the market's advance on Monday and read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.