Iamgold's game plan for growth
Add the chief executive of Iamgold Corp. to the list of voices saying there are too many companies in the gold space.
“Junior gold companies right now are really struggling,” Steve Letwin, president and CEO Iamgold (IMG.TO), told BNN Bloomberg in an interview on Wednesday. “They can’t raise any money. So, our reserves are being depleted … We’re not replacing our depletion. The industry is shrinking, capital-wise. So it would make sense to me if you saw some consolidation.”
Letwin’s comments echo Goldcorp Inc. (G.TO) CEO David Garofalo, who told BNN Bloomberg on Oct. 25 that “there are too many players in the sector.”
Both executives praised Barrick Gold Corp.’s (ABX.TO) takeover of Randgold Resources Ltd. as a necessary step toward shrinking the industry.
“That is a good deal for the industry,” Letwin said. “I applaud it. I think it will lead to further consolidation, and we need it. Whether it happens or not, we’ll see, but I vote in favour of, ‘Let’s get smaller.’”
Letwin added that when investors begin to pour money back into the gold space, it will be the biggest players that will see the greatest reward.
“We’re not loved right now,” he said. “I do not feel loved, but when that love comes back I think they’ll reward the companies that have more heft.”