IAMGOLD's Q4 Surge Bolsters BUY Case, But Risks Linger

What happened

IAMGOLD's Côté mine achieved sustained nameplate throughput by mid-2025, de-risking its ramp and driving operational scale. The company reported explosive Q4 2025 growth, with revenue up 132% and EPS up 367% year-over-year, bolstered by higher gold prices and production. Current valuations at 10.4x forward EPS and 5.4x EV/EBITDA remain well below sector medians, offering upside potential. Aggressive capital allocation, including $400–$500 million in planned share repurchases and debt reduction, leverages the newly positive free cash flow. However, significant risks persist from Burkina Faso security issues and potential cost overruns in Côté's ongoing ramp.

Implication

The company's transition to consistent free cash flow generation could lead to multiple expansion if operational targets are met. Attractive valuations relative to peers provide a margin of safety, especially with supportive gold prices. Planned share repurchases and deleveraging should enhance shareholder returns, contingent on stable performance. Key monitoring points include Côté's throughput and recovery rates, Essakane distributions, and Burkina Faso stability. Any deterioration in these areas would weaken the investment case and necessitate a reassessment of the stance.

Thesis delta

The strong Q4 2025 results validate the operational de-risking and growth assumptions in the master report, reinforcing the BUY thesis. However, the article's mention of lofty technical stock levels suggests that near-term price appreciation might be capped, requiring patience. Overall, the thesis is strengthened but remains dependent on continued execution and risk management.