IAMGOLD enters £300M financing deal to repurchase Côté stake

IAMGOLD announced it entered a US$300 million bought-deal financing with a syndicate of underwriters led by National Bank Financial Markets, BMO Capital Markets and RBC Capital Markets.

The underwriters are purchasing 72 million common shares for US$4.17/share. Additionally, they have the option to buy an additional 10.8 million shares up to 30 days after the closing to cover over-allotments.

IAMGOLD said it will use the funds to repurchase the 9.7% interest in the Côté gold mine in Ontario, Canada, in which it currently has a 60.3% stake, from Sumitomo Metal Mining. The mine is operated through a joint venture between IAMGOLD and Sumitomo, and it sold the 9.3% share to Sumitomo as part of a funding lifeline as the project faced cost overruns and delays. As part of the funding agreement, IAMGOLD has the right to repurchase the additional interest.

Earlier this year, IAMGOLD already said it aimed to buy back the shares once commercial production at the mine is achieved.

According to the Canadian gold miner, the price for the repurchase is equal to Sumitomo's initial funding of $250 million, plus the incremental contributions made and less incremental gold production received by Sumitomo due to its increased ownership up to achieving commercial production.