The Iamgold conference call had a fairly long section at the end with analysts’ questions. I have covered Iamgold’s successful cost cutting effort at length (all-in cost reduced $114/oz. over last year), so there is no need to repeat it here. CEO Letwin did confirm that the company is “starting to see benefits of lower fuel costs.” He stated IAG will be free cash flow positive in 2015.

Other new points: “The government of Mali is doing very positive things” to help at Sadiola. I have assigned zero value to that mine.

This call did give clues as to the general thinking of producers. They are still looking at optionality. That’s good because the “market” has assigned zero value to this. The common strategy is to curtail higher cost mines and projects and replace with lower cost. He defined “lower cost” as under $1,000 all-in cost, and “the lower the better.” That would be every hyper-depressed name I have used here. Take note: there are not that many.

Incidentally in looking at various company gold production guidance I get the general impression that global output may already be down by 2-3% (say 60 tonnes).

Letwin also offered a clue as to the companies that would be “opportunistically” targeted (by everyone). Here you have very low hanging fruit producers, like Luna.  Luna needs a very modest capex to finish phase II to increase production and lower costs.

“The perfect storm Doug would be companies that have attractive investment opportunities they can’t fund. And if we combine with them and bring cash to the table, we’re able to provide the cash that would develop a lower cost operation. But physically they can’t achieve because they don’t have the balance sheet.”

He went on to say they are interested in producers or near producers. Again, not too many of those under 1,000 AIC. Personally, with IAG’s cash and liquidity, I think they are the best bulls eye of all for this in the “market.”