IAMGOLD upgraded at RBC as Côté mine hits nameplate capacity

IAMGOLD (NYSE:IAG) (TSX:IMG:CA) late Tuesday was upgraded to Outperform from a previous investment rating of Sector Perform by analysts at RBC Capital Markets. They cited stronger gold price assumptions, reduced ramp-up risks at the Côté Gold mine and long-term growth potential from Gosselin and other projects.

In his note to clients, analyst Michael Siperco wrote: “Cote has essentially reached nameplate capacity and our focus is now shifting to longer term upside from Gosselin, expansion and potentially Nelligan/Monster Lake.”

He now forecasts roughly $2.5 billion in free cash flow through 2030 on a 15% higher gold price outlook, which could allow IAMGOLD (NYSE:IAG) (TSX:IMG:CA) to fully repay its debt as early as 2026 while funding additional growth.

Côté seen as turning point

RBC views IAMGOLD’s (IAG) (IMG:CA) second-quarter results as a key de-risking event, with Côté achieving throughput of 36,000 tons per day and meeting grade guidance.

“We see 2H25 as a significant production and FCF inflection point,” Siperco said.

The higher target reflects a 20% increase in RBC’s net asset value estimate and a 35% rise in its three-year average sustainable free cash flow forecast. In addition, the bank raised in-situ valuations for Gosselin and Nelligan by 17% to $1.7 billion.

Expansion and cash flow outlook

Management plans to release an updated Côté life-of-mine plan by year-end 2026, which will incorporate the 7.4 million-ounce Gosselin resource and potentially expand throughput by 30–40%. That could extend mine life well beyond the current 16 years, subject to additional tailings capacity.

IAMGOLD’s (IAG) (IMG:CA) Essakane mine in Burkina Faso remains a strong cash generator, with RBC modeling four more years of production delivering over $400 million annually in free cash flow at spot prices.

Balance sheet strengthening

Concerns over leverage have eased. IAMGOLD (IAG) (IMG:CA) ended the second quarter with $1.1 billion in long-term debt and $224 million in cash.

“With $1 billion in forecast free cash flow for 2026, IAG could reach a net cash position by 2Q26 as prepay deliveries conclude and Cote capex slows,” Siperco wrote.

RBC estimates IAMGOLD (IAG) (IMG:CA) is trading at just 0.68 times net asset value, a 22% discount to mid-cap peers, and expects an average free cash flow yield of about 23% in 2026-2027: “One of the best profiles in the sector assuming Cote delivers on guidance.”

RBC raised its price target for IAMGOLD (IAG) (IMG:CA) to $14 a share from $9 previously.