Today, IAMGOLD Corp. (NYSE:IAG) closed a previously announced bought deal offer and sold to a syndicate of underwriters led by TD Securities Inc., National Bank Financial Inc. and Morgan Stanley Canada Ltd., a total of 44,677,500 common shares for an aggregate gross proceeds of $230 million.
The underwriters have also exercised the option to purchase up to an additional 5,827,500 common shares, which is included in the total number of shares before mentioned.
The miner is going to use the net proceeds of $230 million as follows:
- To fund its concurrently announced tender offer for its outstanding 6.75% senior notes due 2020:
Source: IAMGOLD Corp.
The total consideration for each $1,000 principal amount of the notes is $970, which includes an early tender payment of $30 per $1,000 principal amount of the notes and a tender payment of $940 per $1,000 principal amount of the notes.
- To fund internal growth projects, including the expansion of the Sadiola mine, subject to the timely approval of its joint venture partner, AngloGold Ashanti (AU, Financial), to proceed and the government of Mali’s renewal of construction and operating permits.
On Aug. 15, before the bought deal offering was closed, IAMGOLD closed at $4.93 per share on the NYSE, down 7 cents (or 1.4%) from the previous close, with a volume of 21,359,439 shares traded.
Let’s see how the market will react to this news and to the management's decision to strengthen the balance sheet and fund internal projects with the equity offering. As of the second quarter, the miner has $587.2 million in cash and short term investments.
As of today, the Enterprise Value/EBITDA is 13.66 and Price/Book (mrq) is 1.02.
Disclosure: I have no positions in IAMGOLD Corp.
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