Iamgold seeking to raise US$650M for Suriname, other operations

(de Ware Tijd) PARAMARIBO – Iamgold is seeking to raise US$ 650 million in the US and Canada by issuing securities. “In any case, the offering of the debt securities gives us the flexibility to keep up with the new expansion and growth opportunities that might result from the negotiations with Suriname’s government,” says Sharmila Jadnanansingh, head business relations of Rosebel Goldmines(RGM), a reference to negotiations about the expansion of the mining company’s operations in Brokopondo.
At first, the company was looking to raise US$ 500 million, but that amount has been increased. The sale of the debt securities started on 10 September and will be closed tomorrow depending on the sales. This involves an operation that is similar to Staatsolie’s 2010 bond loan to finance expansion of its refinery. “The money will be used for general corporate purposes, including investments and exploration,” Iamgold states on its official website. Jadnanansingh says the ‘loan’ need not be decisive for Iamgold’s expansion plans in Suriname. “We do not need the proceeds of the sale to finance Rosebel’s ongoing investment program.
The current expansion plans for Brokopondo and our other mines could be financed out of our own revenues with a gold price of US$ 1,500 per troy ounce.” Besides, the securities issue offers the option of raising extra funds if those are needed. “Additional financing that might be needed to increase production is safeguarded now,” Jadnanansingh explains. Securities offer many benefits to both company and shareholders. “Although we have no immediate plans with the money, it is cheaper and faster to raise it when you do not need it,” the RGM executive says. To the investor, the high interest rates (6.5% per year) within a certain term (until 2020) are attractive.