IAMGOLD plunges 7% after suspending dividend • 10:59 AM
• IAMGOLD (IAG -7.1%) tumbles to new 52-week lows following the miner's suspension of its dividend; other gold miners also are racking up losses, and the top gold miner ETF (GDX -1.8%) thuds to 52-week lows.
• Given IAG's dividend yield had climbed to 6.5%, TD Securities says the move should not surprise anyone; indeed, it makes sense to conserve cash in an environment of low gold prices, and the move saves ~$94M/year.
• TD also points out that the market has reacted positively when miners such as Barrick (ABX -0.7%) and Kinross (KGC -0.4) cut dividends.
• IAG has enough liquidity to continue to operate its mines, Goldman Sachs says, but thinks the next step for the company should be to close cash-negative operations or monetize its niobium asset.
• Also hitting new 52-week lows: NEM -1.2%, GFI -3.8%, GG -1%.