On a few levels, Atotx.
MDL has 100k oz hedged in FY11 at $US 848 price with production guidance of only 135k oz in FY11 (therefore only 35k to be sold at spot). Right now we can organically finance the plant expansion and have it finished in 12 months time, perhaps a bit longer. The hedge book seriously limits how quickly we can finance exploration, development etc. It's snail pace progress.
After the IPO we can fast track the plant expansion and grow to 200k+ production rate, reducing impact of the hedge book... maybe even accelerate delivery into it and have the hedging expunged much sooner. We'd have much more cash flow available to explore, maybe buy back the hedge book at some point.
The split opens up corporate plays. A merger with TSX-listed Oromin would be hugely beneficial to both companies. In fact, I hope/expect this will be a priority for new management. Also, IAMGold becomes a potential predator; no doubt others are as well.
Today's news is very exiting... the market reacted just as I'd expected.
Rowingboat
demerger, page-4
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