While myriad miners may come and go, I plan to grow old with IAMGOLD (NYS: IAG) .

I continue to await an overdue resurgence by the gold miners to slow my aging process a bit; but, no matter my trajectory, I intend to hold this deeply undervalued gold stock for the very long haul. Trading for about six times trailing earnings, and less than eight times the miner's 2011 operating cash flow of $590 million, IAMGOLD stands out as uncommonly cheap within a sea of deep-value bargains. Offering a 2% dividend yield that likewise stands out from the pack, this shareholder-friendly operator is paying the patient investor adequately to await its inevitable resurgence.

IAMGOLD announced a friendly all-cash acquisition last week of junior explorer Trelawney Mining, in a transaction valued at $620 million. More than a year had passed since IAMGOLD raised substantial cash proceeds through the sale of non-core, minority-owned assets to Gold Fields (NYS: GFI) , leaving the market to speculate ceaselessly over potential acquisition targets. Adjusting for acquired cash, this deal values Trelawney's mineral properties at $511 million. And because IAMGOLD held $1.26 billion in cash and equivalents (including gold bullion) at the end of 2011, the company retains a well-stocked balance sheet even after this move.


Trelawney's flagship Côté Lake project adds only a modest 0.93 million ounces of gold to IAMGOLD's indicated resources, but the project's inferred resource of 5.94 million ounces delivers a powerful 95% increase in inferred resources. These ounces are relatively low-grade, but within the passable range for the envisioned open-pit extraction method. They are also fairly early-stage ounces, requiring additional work to prove these resources into demonstrably economic reserves, but at a per-ounce acquisition price of less than $75 per ounce, I see ample room for IAMGOLD to extract meaningful value for shareholders as the asset's commercial viability is demonstrated over time.

Given the breadth and scale of distressed valuations affecting the gold mining industry at present, however, this market is keeping miners on a very short leash and offering no benefit of the doubt. Investors are still nursing hangovers, after all, from Kinross Gold's (NYS: KGC) overeager $7.1 billion acquisition of the Tasiast project in Mauritania in 2010. Even the most clearly accretive transactions, like AuRico Gold's (NYS: AUQ) attractively priced acquisition of Northgate Minerals last year, have failed to spark excitement within this effectively comatose sector.

I take a very different view, and despite the noteworthy setbacks plaguing multiple mine developments over recent years, I continue to amass shares of those companies capitalizing on the market's persistent failure to deliver fair value by acquiring quality gold assets at distressed market valuations. Eldorado Gold (NYS: EGO) offers another fine example with its transformative acquisition of European Goldfields. I believe that both Eldorado and IAMGOLD, moreover, belong within an elite group of proven operators that Fools may wish to consider for very long-term investments beyond even the scope of the present bull-market cycle for gold.

IAMGOLD offers gold investors a completely unique combination of exposure to a world-class niobium mining operation and a massive new rare-earth discovery. With a record of returning shareholder value over the long-term, as illustrated by a 43% outperformance of the S&P 500 by my bullish CAPScall initiated in 2006, I continue to confront this protracted sell-off in the gold-mining equities with an unbroken expectation for sustained long-term outperformance by IAMGOLD.

Looking for more ideas? Download The Motley Fool's special free report, " The Tiny Gold Stock Digging Up Massive Profits ." Our analysts have uncovered a little-known gold miner that we believe is poised for greatness. Find out which company it is and why we strongly believe in its future -- for free!

At the time this article was published Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of AuRico Gold, Eldorado Gold, and IAMGOLD. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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