Thanks to the high global gold prices, another Australian miner has joined the list of companies with a dividend-paying purpose in mind.
Gold Road Resources said yesterday that it is likely to start paying dividends at the end of this year.
There is a proviso or two – that it has at least $100 million cash on hand and payouts will be limited to between 15% and 30% of free cash flow above the $100 million level.
But directors expect to pay its first dividend after the half-year ends in December. The company says it will also set up a dividend reinvestment program.
The company says it has no debt after it was repaid in July of this year, after the balance date.
The company’s main asset is a 50% ownership in the Gruyere open-pit gold mine in WA with Gold Fields. It has an estimated life of 11-year mine life averaging 300,000 ounces a year output.
The mine has an estimated 3.7 million ounces of reserves and a total resource of 6.6 million ounces.
The first year’s output in the year to June was 230,950 ounces at an all-in cost of $A1,155 ($US840 an ounce against a global price of more than $US1,900).
“In less than a year since we declared commercial production at Gruyere, I am pleased to be in a position to announce a dividend policy,’’ chairman Tim Netscher told yesterday.
“The company is debt-free and building a strong cash balance. The dividend policy seeks to share our strong cash flow generation with our shareholders whilst still allowing us to prioritise ongoing operations and growth opportunities’’.
The shares edged up 0.6% to $1.665.