Johannesburg – Gold miner Randgold Resources says it is proposing lifting its dividend 52 percent.
This, it said in a statement issued on Monday, is because of its financial strength.
The listed gold miner says it increased production for the sixth successive year in 2016 in the 12 months to December, while reducing total cash cost per ounce.
“With profit of $294.2 million up 38 percent on the previous year, the board has proposed a 52 percent increase in the dividend to $1.00 per share.”
Flagship Loulo-Gounkoto in Mali exceeded its annual guidance by 37 000 ounces at its lowest ever total cash cost per ounce, and solid performances from the other mines contributed to the record group production of 1 252 957 ounces (2015: 1 211 288 ounces). The group’s total cash cost per ounce of $639 was down 6 percent on the previous year.
The company also adds, in spite of the high level of activity at its operations, Randgold broke another record by reducing its lost time injury frequency rate by 22 percent to a lowest ever 0.46.
CEO Mark Bristow says, in a year of significant achievements, it was also notable that Randgold had passed its net cash target of $500 million, with $516.3 million in the bank at the end of 2016, and no debt.
Read also: Randgold Resources reports flat profit
“We have shared with the market our 10-year plan, which shows how we plan to sustain our profitability over the next decade at a gold price of $1 000 per ounce. It also envisages – but does not depend on – the development of three new mines over the next five years,” Bristow says.
“The board has now given the go-ahead for the Gounkoto super pit and the technical and financial study on the Massawa-Sofia project in Senegal has demonstrated that this has the potential to meet our investment criteria.
“In the meantime, our exploration programmes have continued to add reserves at Loulo-Gounkoto and Sofia and to expand our portfolio in Côte d’Ivoire. As reported earlier, we have also increased our presence in our target areas through a number of early-stage joint ventures,” he says.
The company adds, now it has reached its $500 million cash target, it 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 about $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, it says.