Yamana hikes dividend again with room for further increases
Canadian gold miner Yamana Gold on Monday announced an additional 25% dividend increase to $0.05 a share a year, effective for the first quarter of 2020, as it also outlined a new dividend policy to ensure the sustainability of shareholder payouts.
The latest increase follows the doubling of dividends declared in the third quarter of 2019, thereby representing a 125% increase in dividends since September.
Yamana said these initial two increases were part of a gradual and progressive approach to dividend increases as the company’s cash balances continued to grow from increasing free cash flow and continuing initiatives to monetise its portfolio of non-producing assets and financial instruments.
The mining company would also begin to report dividends on a per gold-equivalent ounce (GEO) of production basis with the latest increase bringing the dividend level to $50 a GEO with room for further increases.
To ensure it kept dividend sustainable, Yamana announced that it would establish a cash reserve fund to draw upon for dividends, should the gold price decline and negatively impact on margins over a longer period of time.
The balance in the cash reserve fund would change from time to time, but Yamana said it intended to maintain a balance that could support the current or any future increased dividend for a minimum period of no less than three years, independent of prevailing gold prices.
The gold miner has paid dividends consistently through 12 of its 16-year history since declaring its first dividend in 2007. The company was in its initial capital spending and development phase from 2003 to 2006.
In the 12-year period since 2007, Yamana has paid more than $900-million in dividends.
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