Iamgold to sell Ghana mines for $667m to Gold Fields

Iamgold Corporation says it has decided to sell its 18.9% stake in Ghana’s Tarkwa and Damang gold mines to Gold Fields Limited for $667 million in cash.

According to Iamgold, which is a mid-tier gold mining company based in Toronto, Canada, the sale is the first of several strategic initiatives to create value for its shareholders.

“Iamgold Corporation announced today that it has reached an agreement to sell its 18.9% interest in the Tarkwa and Damang gold mines in Ghana, West Africa to Gold Fields Limited for $667 million”, the company said in a statement published on its website today April 15, 2011.

Gold Fields, the world’s fourth largest gold miner, said on Thursday April 14, 2011 that it would consider buying shares owned by Iamgold in its Western Africa operations if an offer was tabled, the Reuters News Agency reported.

“We own 71% of those assets and it would be a logical outcome if we are able to acquire (Iamgold’s) stakes. I guess the question is whether the parties can put a deal together,” Reuters said citing Nick Holland, CEO of Gold Fields.

When the transaction is completed by the end of July 31, 2011, IamGold says it will have more than $1 billion in cash, cash equivalents and gold bullion at market, adding “we have a $350 million undrawn credit facility.”

“We cannot fully leverage our skills and experience in developing and operating mines if we are not the operator and have a minority interest in the mine”,Steve Letwin, Chief Executive Officer of Iamgold was quoted in the statement as saying.

In 2010, gold production attributable to Iamgold from the Tarkwa mine was 139,000 ounces and attributable production from the Damang mine was 43,000 ounces, the company said.

By Ekow Quandzie