Intrinsic value of IAMGOLD - IAG

Previous Close

$5.73

  Intrinsic Value

$1.18

stock screener

  Rating & Target

str. sell

-79%

Previous close

$5.73

 
Intrinsic value

$1.18

 
Up/down potential

-79%

 
Rating

str. sell

We calculate the intrinsic value of IAG stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.63
  18.00
  16.70
  15.53
  14.48
  13.53
  12.68
  11.91
  11.22
  10.60
  10.04
  9.53
  9.08
  8.67
  8.30
  7.97
  7.68
  7.41
  7.17
  6.95
  6.76
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.76
  5.68
  5.61
Revenue, $m
  987
  1,165
  1,359
  1,570
  1,798
  2,041
  2,299
  2,573
  2,862
  3,165
  3,483
  3,815
  4,161
  4,522
  4,898
  5,288
  5,694
  6,116
  6,554
  7,010
  7,484
  7,976
  8,488
  9,021
  9,576
  10,155
  10,757
  11,385
  12,041
  12,725
  13,439
Variable operating expenses, $m
 
  2,130
  2,486
  2,872
  3,288
  3,733
  4,206
  4,707
  5,235
  5,789
  6,370
  6,977
  7,611
  8,271
  8,958
  9,672
  10,415
  11,186
  11,988
  12,821
  13,688
  14,588
  15,525
  16,500
  17,515
  18,573
  19,675
  20,824
  22,022
  23,273
  24,579
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  951
  2,130
  2,486
  2,872
  3,288
  3,733
  4,206
  4,707
  5,235
  5,789
  6,370
  6,977
  7,611
  8,271
  8,958
  9,672
  10,415
  11,186
  11,988
  12,821
  13,688
  14,588
  15,525
  16,500
  17,515
  18,573
  19,675
  20,824
  22,022
  23,273
  24,579
Operating income, $m
  37
  -966
  -1,127
  -1,302
  -1,490
  -1,692
  -1,906
  -2,133
  -2,373
  -2,624
  -2,887
  -3,163
  -3,450
  -3,749
  -4,060
  -4,384
  -4,720
  -5,070
  -5,434
  -5,811
  -6,204
  -6,612
  -7,037
  -7,479
  -7,939
  -8,418
  -8,918
  -9,438
  -9,982
  -10,549
  -11,141
EBITDA, $m
  301
  -652
  -761
  -879
  -1,006
  -1,142
  -1,287
  -1,440
  -1,601
  -1,771
  -1,949
  -2,135
  -2,329
  -2,530
  -2,741
  -2,959
  -3,186
  -3,422
  -3,668
  -3,923
  -4,188
  -4,463
  -4,750
  -5,048
  -5,359
  -5,682
  -6,019
  -6,371
  -6,738
  -7,120
  -7,520
Interest expense (income), $m
  25
  20
  29
  39
  50
  61
  73
  86
  100
  114
  130
  146
  162
  180
  198
  217
  236
  257
  278
  300
  323
  346
  371
  397
  424
  451
  481
  511
  542
  575
  609
Earnings before tax, $m
  95
  -986
  -1,156
  -1,341
  -1,540
  -1,753
  -1,980
  -2,220
  -2,473
  -2,738
  -3,017
  -3,308
  -3,612
  -3,929
  -4,258
  -4,601
  -4,957
  -5,327
  -5,711
  -6,111
  -6,527
  -6,959
  -7,408
  -7,876
  -8,363
  -8,870
  -9,398
  -9,949
  -10,524
  -11,124
  -11,750
Tax expense, $m
  33
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  53
  -986
  -1,156
  -1,341
  -1,540
  -1,753
  -1,980
  -2,220
  -2,473
  -2,738
  -3,017
  -3,308
  -3,612
  -3,929
  -4,258
  -4,601
  -4,957
  -5,327
  -5,711
  -6,111
  -6,527
  -6,959
  -7,408
  -7,876
  -8,363
  -8,870
  -9,398
  -9,949
  -10,524
  -11,124
  -11,750

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  652
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  3,401
  3,244
  3,786
  4,374
  5,007
  5,685
  6,405
  7,168
  7,972
  8,817
  9,702
  10,626
  11,591
  12,596
  13,643
  14,730
  15,861
  17,036
  18,257
  19,527
  20,846
  22,218
  23,644
  25,129
  26,675
  28,286
  29,964
  31,714
  33,539
  35,445
  37,434
Adjusted assets (=assets-cash), $m
  2,749
  3,244
  3,786
  4,374
  5,007
  5,685
  6,405
  7,168
  7,972
  8,817
  9,702
  10,626
  11,591
  12,596
  13,643
  14,730
  15,861
  17,036
  18,257
  19,527
  20,846
  22,218
  23,644
  25,129
  26,675
  28,286
  29,964
  31,714
  33,539
  35,445
  37,434
Revenue / Adjusted assets
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
Average production assets, $m
  1,861
  2,197
  2,563
  2,961
  3,390
  3,849
  4,337
  4,853
  5,398
  5,970
  6,569
  7,195
  7,848
  8,529
  9,237
  9,974
  10,739
  11,535
  12,362
  13,221
  14,114
  15,043
  16,009
  17,014
  18,061
  19,152
  20,288
  21,473
  22,709
  23,999
  25,345
Working capital, $m
  817
  194
  227
  262
  300
  341
  384
  430
  478
  529
  582
  637
  695
  755
  818
  883
  951
  1,021
  1,095
  1,171
  1,250
  1,332
  1,418
  1,507
  1,599
  1,696
  1,796
  1,901
  2,011
  2,125
  2,244
Total debt, $m
  485
  698
  930
  1,182
  1,454
  1,745
  2,054
  2,381
  2,726
  3,088
  3,468
  3,865
  4,279
  4,710
  5,159
  5,625
  6,110
  6,615
  7,138
  7,683
  8,249
  8,837
  9,449
  10,087
  10,750
  11,441
  12,161
  12,911
  13,694
  14,512
  15,365
Total liabilities, $m
  1,179
  1,392
  1,624
  1,876
  2,148
  2,439
  2,748
  3,075
  3,420
  3,782
  4,162
  4,559
  4,973
  5,404
  5,853
  6,319
  6,804
  7,309
  7,832
  8,377
  8,943
  9,531
  10,143
  10,781
  11,444
  12,135
  12,855
  13,605
  14,388
  15,206
  16,059
Total equity, $m
  2,222
  1,852
  2,162
  2,498
  2,859
  3,246
  3,657
  4,093
  4,552
  5,034
  5,540
  6,068
  6,619
  7,193
  7,790
  8,411
  9,057
  9,728
  10,425
  11,150
  11,903
  12,686
  13,501
  14,349
  15,232
  16,151
  17,109
  18,109
  19,151
  20,239
  21,375
Total liabilities and equity, $m
  3,401
  3,244
  3,786
  4,374
  5,007
  5,685
  6,405
  7,168
  7,972
  8,816
  9,702
  10,627
  11,592
  12,597
  13,643
  14,730
  15,861
  17,037
  18,257
  19,527
  20,846
  22,217
  23,644
  25,130
  26,676
  28,286
  29,964
  31,714
  33,539
  35,445
  37,434
Debt-to-equity ratio
  0.218
  0.380
  0.430
  0.470
  0.510
  0.540
  0.560
  0.580
  0.600
  0.610
  0.630
  0.640
  0.650
  0.650
  0.660
  0.670
  0.670
  0.680
  0.680
  0.690
  0.690
  0.700
  0.700
  0.700
  0.710
  0.710
  0.710
  0.710
  0.720
  0.720
  0.720
Adjusted equity ratio
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571
  0.571

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  53
  -986
  -1,156
  -1,341
  -1,540
  -1,753
  -1,980
  -2,220
  -2,473
  -2,738
  -3,017
  -3,308
  -3,612
  -3,929
  -4,258
  -4,601
  -4,957
  -5,327
  -5,711
  -6,111
  -6,527
  -6,959
  -7,408
  -7,876
  -8,363
  -8,870
  -9,398
  -9,949
  -10,524
  -11,124
  -11,750
Depreciation, amort., depletion, $m
  264
  314
  366
  423
  484
  550
  620
  693
  771
  853
  938
  1,028
  1,121
  1,218
  1,320
  1,425
  1,534
  1,648
  1,766
  1,889
  2,016
  2,149
  2,287
  2,431
  2,580
  2,736
  2,898
  3,068
  3,244
  3,428
  3,621
Funds from operations, $m
  333
  -672
  -790
  -918
  -1,056
  -1,203
  -1,360
  -1,526
  -1,701
  -1,886
  -2,079
  -2,280
  -2,491
  -2,710
  -2,938
  -3,176
  -3,423
  -3,679
  -3,945
  -4,222
  -4,510
  -4,810
  -5,121
  -5,445
  -5,782
  -6,134
  -6,500
  -6,882
  -7,280
  -7,695
  -8,129
Change in working capital, $m
  19
  30
  32
  35
  38
  41
  43
  46
  48
  51
  53
  55
  58
  60
  63
  65
  68
  70
  73
  76
  79
  82
  86
  89
  93
  97
  101
  105
  109
  114
  119
Cash from operations, $m
  314
  -702
  -822
  -953
  -1,093
  -1,244
  -1,403
  -1,572
  -1,750
  -1,936
  -2,132
  -2,336
  -2,549
  -2,770
  -3,001
  -3,241
  -3,490
  -3,749
  -4,019
  -4,299
  -4,589
  -4,892
  -5,207
  -5,534
  -5,875
  -6,230
  -6,600
  -6,987
  -7,389
  -7,810
  -8,249
Maintenance CAPEX, $m
  0
  -266
  -314
  -366
  -423
  -484
  -550
  -620
  -693
  -771
  -853
  -938
  -1,028
  -1,121
  -1,218
  -1,320
  -1,425
  -1,534
  -1,648
  -1,766
  -1,889
  -2,016
  -2,149
  -2,287
  -2,431
  -2,580
  -2,736
  -2,898
  -3,068
  -3,244
  -3,428
New CAPEX, $m
  -274
  -336
  -367
  -398
  -429
  -459
  -488
  -516
  -544
  -572
  -599
  -626
  -653
  -681
  -708
  -737
  -766
  -796
  -827
  -859
  -893
  -929
  -966
  -1,005
  -1,047
  -1,090
  -1,136
  -1,185
  -1,236
  -1,290
  -1,347
Cash from investing activities, $m
  -165
  -602
  -681
  -764
  -852
  -943
  -1,038
  -1,136
  -1,237
  -1,343
  -1,452
  -1,564
  -1,681
  -1,802
  -1,926
  -2,057
  -2,191
  -2,330
  -2,475
  -2,625
  -2,782
  -2,945
  -3,115
  -3,292
  -3,478
  -3,670
  -3,872
  -4,083
  -4,304
  -4,534
  -4,775
Free cash flow, $m
  149
  -1,303
  -1,503
  -1,717
  -1,945
  -2,187
  -2,441
  -2,708
  -2,987
  -3,279
  -3,584
  -3,900
  -4,230
  -4,572
  -4,928
  -5,297
  -5,681
  -6,079
  -6,493
  -6,924
  -7,371
  -7,837
  -8,322
  -8,826
  -9,352
  -9,901
  -10,473
  -11,070
  -11,693
  -12,344
  -13,024
Issuance/(repayment) of debt, $m
  -143
  213
  232
  252
  272
  291
  309
  327
  345
  362
  380
  397
  414
  431
  449
  467
  485
  504
  524
  544
  566
  588
  612
  637
  663
  691
  720
  751
  783
  817
  853
Issuance/(repurchase) of shares, $m
  264
  1,268
  1,465
  1,677
  1,901
  2,140
  2,391
  2,655
  2,932
  3,221
  3,522
  3,836
  4,163
  4,502
  4,855
  5,222
  5,602
  5,998
  6,409
  6,836
  7,280
  7,742
  8,223
  8,724
  9,245
  9,789
  10,356
  10,948
  11,566
  12,212
  12,886
Cash from financing (excl. dividends), $m  
  22
  1,481
  1,697
  1,929
  2,173
  2,431
  2,700
  2,982
  3,277
  3,583
  3,902
  4,233
  4,577
  4,933
  5,304
  5,689
  6,087
  6,502
  6,933
  7,380
  7,846
  8,330
  8,835
  9,361
  9,908
  10,480
  11,076
  11,699
  12,349
  13,029
  13,739
Total cash flow (excl. dividends), $m
  171
  178
  195
  211
  228
  244
  259
  274
  289
  304
  318
  333
  347
  362
  376
  391
  407
  423
  439
  456
  475
  493
  513
  534
  556
  579
  604
  629
  657
  685
  716
Retained Cash Flow (-), $m
  -326
  -1,268
  -1,465
  -1,677
  -1,901
  -2,140
  -2,391
  -2,655
  -2,932
  -3,221
  -3,522
  -3,836
  -4,163
  -4,502
  -4,855
  -5,222
  -5,602
  -5,998
  -6,409
  -6,836
  -7,280
  -7,742
  -8,223
  -8,724
  -9,245
  -9,789
  -10,356
  -10,948
  -11,566
  -12,212
  -12,886
Prev. year cash balance distribution, $m
 
  652
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -438
  -1,271
  -1,465
  -1,674
  -1,896
  -2,132
  -2,381
  -2,642
  -2,917
  -3,204
  -3,504
  -3,816
  -4,141
  -4,479
  -4,830
  -5,196
  -5,575
  -5,969
  -6,379
  -6,805
  -7,248
  -7,710
  -8,189
  -8,689
  -9,210
  -9,753
  -10,319
  -10,910
  -11,526
  -12,171
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  -420
  -1,163
  -1,275
  -1,378
  -1,470
  -1,547
  -1,608
  -1,652
  -1,676
  -1,680
  -1,664
  -1,628
  -1,574
  -1,504
  -1,418
  -1,320
  -1,213
  -1,099
  -982
  -865
  -750
  -640
  -537
  -443
  -358
  -285
  -221
  -169
  -126
  -92
Current shareholders' claim on cash, %
  100
  60.0
  36.3
  22.2
  13.6
  8.4
  5.2
  3.3
  2.1
  1.3
  0.8
  0.5
  0.3
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

IAMGOLD Corporation (IAMGOLD) is engaged primarily in the exploration for, and the development and production of, mineral resource properties throughout the world. Through its holdings, IAMGOLD has interests in various operations, exploration and development properties. IAMGOLD is a mid-tier mining company with approximately four operating gold mines on over three continents. The Company's gold mine segment is divided into geographic segments, such as Burkina Faso - Essakane mine; Suriname-Rosebel mine; Canada-Doyon division, which includes the Westwood mine and the Doyon mine, and Joint ventures (Mali)-Sadiola mine (41%) and Yatela mine (40%). The Company's non-gold segments are divided into Exploration and evaluation, and Corporate, which includes royalty interests located in Canada and investments in associates and joint ventures. In Canada, the Company owns the Westwood mine in Quebec and the Cote Gold project, a development project located in Ontario.

FINANCIAL RATIOS  of  IAMGOLD (IAG)

Valuation Ratios
P/E Ratio 49.1
Price to Sales 2.6
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 8.3
Price to Free Cash Flow 65
Growth Rates
Sales Growth Rate 7.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 36.3%
Cap. Spend. - 3 Yr. Gr. Rate -15%
Financial Strength
Quick Ratio NaN
Current Ratio 0.5
LT Debt to Equity 21.8%
Total Debt to Equity 21.8%
Interest Coverage 5
Management Effectiveness
Return On Assets 2.1%
Ret/ On Assets - 3 Yr. Avg. -7%
Return On Total Capital 2%
Ret/ On T. Cap. - 3 Yr. Avg. -10%
Return On Equity 2.6%
Return On Equity - 3 Yr. Avg. -12.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 10.3%
Gross Margin - 3 Yr. Avg. 5.2%
EBITDA Margin 38.9%
EBITDA Margin - 3 Yr. Avg. -1.1%
Operating Margin 3.6%
Oper. Margin - 3 Yr. Avg. -27.7%
Pre-Tax Margin 9.6%
Pre-Tax Margin - 3 Yr. Avg. -30.1%
Net Profit Margin 5.4%
Net Profit Margin - 3 Yr. Avg. -32.5%
Effective Tax Rate 34.7%
Eff/ Tax Rate - 3 Yr. Avg. -16.2%
Payout Ratio 0%

IAG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IAG stock intrinsic value calculation we used $987 million for the last fiscal year's total revenue generated by IAMGOLD. The default revenue input number comes from 2016 income statement of IAMGOLD. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our IAG stock valuation model: a) initial revenue growth rate of 18% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for IAG is calculated based on our internal credit rating of IAMGOLD, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of IAMGOLD.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of IAG stock the variable cost ratio is equal to 182.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for IAG stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.2% for IAMGOLD.

Corporate tax rate of 27% is the nominal tax rate for IAMGOLD. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the IAG stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for IAG are equal to 188.6%.

Life of production assets of 7 years is the average useful life of capital assets used in IAMGOLD operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for IAG is equal to 16.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2222 million for IAMGOLD - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 470.383 million for IAMGOLD is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of IAMGOLD at the current share price and the inputted number of shares is $2.7 billion.

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COMPANY NEWS

▶ IamGold Looks to Outperform for the Rest of 2017   [Oct-23-17 07:40AM  Market Realist]
▶ Are Mining Stocks Following Precious Metals?   [Oct-20-17 09:10AM  Market Realist]
▶ How Indian Demand Could Influence Gold Prices   [07:40AM  Market Realist]
▶ Understanding Mining Stock Moving Averages in Mid-October   [Oct-18-17 07:43AM  Market Realist]
▶ How Recent Mining Stock Performances Relate to Metals   [Oct-16-17 01:36PM  Market Realist]
▶ How Did Mining Stocks Technicals Look on October 10?   [Oct-12-17 12:44PM  Market Realist]
▶ Analyzing Mining Stocks Moving Averages   [Oct-10-17 04:58PM  Market Realist]
▶ IamGolds Strong Exploration Results Catch Analysts Attention   [Oct-06-17 10:41AM  Market Realist]
▶ Can Mali Maintain Its Gold Mining Status?   [Oct-04-17 03:00PM  Oilprice.com]
▶ Reading the Ups and Downs of Mining Stocks in September 2017   [Oct-02-17 05:22PM  Market Realist]
▶ Iamgold Corp Downgraded by Canaccord Genuity to 'Hold'   [Sep-30-17 09:50PM  GuruFocus.com]
▶ Behind the Gold-Silver Relationship in 2017   [Sep-28-17 04:36PM  Market Realist]
▶ Unrest in the Market Due to North Korea: The Impact on Gold   [Sep-26-17 01:32PM  Market Realist]
▶ Reaction of Mining Stocks after Precious Metals Rebound   [Sep-25-17 03:46PM  Market Realist]
▶ Analyzing Technical Indicators for Precious Metal Miners   [Sep-22-17 05:06PM  Market Realist]
▶ These Factors Could Propel Gold to the $1,400 Mark   [Sep-20-17 10:37AM  Market Realist]
▶ The Most Crowded Trades Today: Assessing Golds Benefit   [Sep-19-17 04:06PM  Market Realist]
▶ ETFs with exposure to IAMGOLD Corp. : September 13, 2017   [Sep-13-17 06:37PM  Capital Cube]
▶ Whats Next for Iamgolds Exploration Program?   [Sep-12-17 03:06PM  Market Realist]
▶ Analysis of Canadian Gold Stocks' Year-to-Date Return   [Sep-09-17 06:35AM  GuruFocus.com]
▶ Precious Metals Performance on September 7, 2017   [Sep-08-17 05:35PM  Market Realist]
▶ What Miners Volatility Metrics Indicate   [Sep-07-17 02:33PM  Market Realist]
▶ ETF Inflows Propping Up Gold Prices   [07:00AM  Morningstar]
▶ Better Buy: Franco-Nevada Corporation vs. IAMGOLD Corp.   [Aug-21-17 08:17AM  Motley Fool]
▶ This Could Be The Biggest Gold Discovery In History   [Aug-20-17 07:30PM  Oilprice.com]
▶ Iamgold Acquires a 19.98% Stake in TomaGold   [Aug-16-17 01:49PM  GuruFocus.com]
▶ Why IAMGOLDs Valuation Could Climb Higher in 2017 and Beyond   [Aug-15-17 09:06AM  Market Realist]
▶ Iamgold Beats Expectations on 2nd-Quarter Revenue   [Aug-10-17 03:30PM  GuruFocus.com]
▶ Iamgold meets 2Q profit forecasts   [Aug-09-17 10:31PM  Associated Press]
▶ IAMGOLD Reports Another Solid Quarter   [05:05PM  CNW Group]
▶ How Miners Rebounded in the Past Month   [Aug-07-17 09:40AM  Market Realist]
▶ How Demand for Gold Is Moving in 2017   [Aug-01-17 10:40AM  Market Realist]
▶ Will Barrick Resolve Its Export Ban Issues in Tanzania Soon?   [Jul-28-17 04:06PM  Market Realist]
▶ Why Mining Stocks Swung Higher on Tuesday, July 25   [Jul-27-17 02:05PM  Market Realist]
▶ Is This The Next Gold Major?   [07:00PM  Oilprice.com]
▶ Gold Stocks For a Falling Dollar   [Jul-23-17 11:32AM  Motley Fool]
▶ The Latest Upgrades and Downgrades for Intermediate Miners   [Jul-19-17 05:35PM  Market Realist]
Financial statements of IAG
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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