Why Iamgold's Stock Popped Today

Shares of Iamgold (NYSE: IAG) rose on Wednesday as investors cheered the Canadian mining company's third-quarter results.

As of 1:35 p.m. ET, Iamgold's stock price was up more than 8%.

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Higher gold prices are lifting Iamgold's profits

The miner's gold production climbed by 10% year over year to 190,000 ounces in the third quarter, driven by record results at its flagship Côté Gold Mine. Combined with a 46% rise in the company's average realized gold price, to $3,492 per ounce, these strong results drove a 61% surge in Iamgold's revenue to $706.7 million.

Moreover, expense-control measures helped to keep a lid on production costs despite industrywide pricing pressure. The company's all-in sustaining costs -- which include operating expenses and spending required to maintain existing production -- increased by 11% to $1,956 per ounce sold.

This widening spread between mining costs and gold prices is boosting Iamgold's profits. The company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) soared by 62% to $359.5 million.

"Our trailing twelve-month EBITDA now exceeds $1 billion, and we have repaid approximately $270 million of our second lien notes, further strengthening our balance sheet and financial flexibility," CEO Renaud Adams said in a press release.

Acquisitions and buybacks should boost Iamgold's long-term earnings power

Iamgold's enhanced profitability is allowing it to accelerate its expansion plans while still returning cash to shareholders. The company struck deals to acquire mining assets in the Chibougamau region in Quebec. Iamgold's board of directors also authorized a stock buyback program of up to 10% of its shares.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.