Iamgold gets regulatory nod to close $500m Niobec sale
TORONTO (miningweekly.com) – Canadian gold miner Iamgold has received the regulatory approvals required to close the $500-million cash sale of its Niobec niobium mine, in Quebec, to a group of companies led by Magris Resources, the investment company founded by former Barrick Gold CEO Aaron Regent.
Iamgold said on Friday that with the approvals in place, the deal was expected to close before the end of the month.
Niobec, located in Saint-Honoré-de-Chicoutimi, in the Saguenay-Lac-Saint-Jean region, was considered one of the world's three significant niobium producers. The deal would include the adjacent rare earth element (REE) deposit.
The price tag of $530-million for the transaction comprised a cash payment of $500-million payable on closing, as well as $30-million payable when the REE deposit had gone into commercial production. A 2% gross proceeds royalty would be payable on any REE output.
"We are taking the steps to change the game at Iamgold. The company's financial position is stronger than many of its competitors as a result of this sale. By unlocking the value of Niobec, we have significantly strengthened the company's liquidity, which increases our capacity to invest further in our existing business and consider acquisitions,” Iamgold president and CEO Steve Letwin said.
Executive VP and CFO Carol Banducci added that Iamgold would invest strategically, seeking out only opportunities that would improve the company’s cost structure and that would have near-term capability to produce gold and generate positive cash flow.
Following the transaction, Iamgold would have liquid assets of more than $800-million, excluding about $500-million available in unused credit facilities.
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