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Iamgold shares lose luster as it responds to chatter of a possible sale

The stock action follows reports saying the group was working with advisers and had spoken to potential buyers
Gold pour
M&A activity in the gold sector has been rife

Iamgold Corp (NYSE:IAG), the Toronto-based gold producer, saw shares fall Friday as it responded to recent trading activity after reports emerged it was mulling a possible sale of all or part of the group.

Yesterday and earlier today, the stock saw sharp rises as reports emerged of a possible sale from people "familiar with the matter" saying the group was working with advisers and it had spoken to several potential buyers.

Shares in Iamgold were recently down 2.67% to stand at US$2.55 in New York. In Toronto, they are off 2.29% to stand at $3.42.

READ: Here’s why the consolidation in the gold mining industry is far from over

"As a general policy, the company does not comment on speculation and rumours," said Iamgold in a statement.

"The company is not aware of any material change that would account for recent trading activity in its stock. The company regularly reviews strategic alternatives available to it and may engage in discussions regarding potential transactions. The company will inform the market as required and does not have any further comment at this time."

Consolidation in the gold sector continues to be a big theme.

Some big names have announced deals recently. There was Newmont Mining Corp’s US$12-billion acquisition of GoldCorp Inc and Barrick Golds' US$7.8 billion purchase  of Randgold Resources Ltd.

Experts  have pointed out that now is the time for gold miners to go on a shopping spree because there isn’t enough lead time for most to develop new projects to capitalize on the next bull market of the yellow metal.

Contact Giles at [email protected]

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