Johannesburg – As Randgold Resources releases its latest resources and reserves update, it confirms its commitment to paying out a dividend that is 52 percent higher than a year ago.
In a statement released on Tuesday, the listed mining company noted – since it paid its first dividend for the 2006 financial year – its payouts to shareholders have gained 900 percent.
Tuesday also marked the release of its annual report.
It notes its board had proposed a 52 percent year-on-year increase in the dividend to $1 per share for the year to December 31. This is up for approval at its annual general meeting on May 2. The dividend will be paid in cash with no scrip alternative being made available.
“Now that we have reached our $500 million cash target, going forward Randgold intends to continue to pay an annual dividend that will take into account its profitability, cash flows and the wider capital requirements of the group in the context of its financial position, including its expected cross-cycle operating cash flows and its cross-cycle capital expenditure requirements.
“The company will seek to maintain a net cash position of approximately $500 million to provide financing flexibility should a new mine development or other growth opportunity be identified. To the extent that Randgold has surplus capital, the company intends to return such excess to shareholders,” says CFO Graham Shuttleworth. “The increase in dividends validates the business model and reflects the profitability and financial strength of the group.”
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However, Randgold Resources’ annual resource and reserve declaration shows attributable proved and probable reserves down by 1 percent after another record production year. Total attributable resources of 25.5 million ounces were down 8 percent, reflecting mining depletion and changes to the method of reporting underground resources at Kibali.
Despite this, the group’s reserve grade increased from 3.6g/t to 3.7g/t and chief executive Mark Bristow said this shows that Randgold has been able to replenish ounces at grades above or equal to its reserve base despite the high depletion rate from mining.
“This means our current reserves have secured our business plan for at least 10 years of profitable production. In the meantime, our exploration teams continue to hunt for additional ounces to replenish these reserves as well as for our next big discovery,” Bristow says.