05/07/2013 07:14 EDT | Updated 07/07/2013 05:12 EDT

Iamgold profits drop 91 per cent in Q1 as company moves forward with cost cuts

TORONTO - Iamgold Corp. (TSX:IMG) says its profits fell 91 per cent in the first quarter as the company moved forward with its cost cutting plan while gold prices weakened.

The Toronto-based gold miner said net earnings weakened to US$10.9 million, or three cents per share, from $119.2 million or 22 cents per share a year earlier.

Adjusted earnings, a better indication of Iamgold's underlying performance, dropped to $57.7 million or 15 cents per share, a penny above the expectations of analysts polled by Thomson Reuters.

Revenue declined to $305.3 million from $354.1 million.

Spot gold prices have weakened in recent months, falling about 14 per cent since the start of the year.

"With the initiation of our $100 million cost reduction program before the drop in gold prices and our history of disciplined capital allocation, Iamgold was well ahead of the curve in responding to the challenges in our industry," said chief executive Steve Letwin in a release.

"We will move forward only with expansion and development projects that meet our criteria for delivering attractive returns. The traction we are making on the cost front together with our renewed commitment to capital discipline points to a positive outlook ahead."

Gold production was 188,000 ounces in the quarter, down from 207,000 a year earlier, due to lower grades at the Essakane mine in Burkina Faso and the Sadiola in Mali.