IAMGOLD warns of drop in 2Q11 gold production

Toronto's IAMGOLD Tuesday reported that second-quarter gold production is less than anticipated while average cash costs are higher than expected.
Despite gold production problems at the Rosebel Mine in Suriname, as well as a lower than expected crusher ramp up and downtime at the Esskane Mine in Burkina Faso, IAMGOLD expects to meet its 2011 production guidance in the range of 1.1 million and 1.2 million ounces.
"Cost inflation has been experienced at all operations," said COO Gord Stothart. "Even with these higher costs, and a conservative gold price assumption of $1,200 per ounce, we believe that the projected cash flow from our operations combined with our current cash position will fund our significant, three-year $1.2 billion investment to expand production at our existing gold mines and further strengthen our balance sheet."
IAMGOLD also announced that it has increased its annual dividend payment by 150% from C$0.08 per share to C$0.20 per share. CEO Steven Letwin said, "The dividend increase reflects the confidence board and management have in the current and future cash flows of the company. ...Our growth outlook is very positive."
 On Monday, IAMGOLD announced that a NI 43-101 preliminary economic assessment revealed a 691% increase in measured and indicated resources to 1.93 billion kilograms of contained niobium pentoxide at its Niobec niobium mine in Quebec.
The assessment revealed a potential threefold increase in the annual niobium production to 15 million kilograms per year, with the potential of further production increases. Remaining mine life is estimated to be in excess of 40 years at the expanded production rate.
A prefeasibility study to be completed by year-end will help determine which bulk mining method will provide the best financial returns in the planned transition from underground mining to bulk mining. Niobec is the only North American producer of niobium and one of only three producers globally.
Niobium is important in the production of high-quality specialty steel known as High Strength Low Alloy. In the form of ferroniobium, it is added to molten steel before casting to give it desirable physical characteristics.