Precious metals have always attracted investors as the payouts can be lucrative. This is the reason that precious metal mining contractors and companies can get investors more easily compared to other commodity miners. The return on investment occurs quickly, and sometimes it can be quite attractive. This is exactly what Centamin investors will be experiencing when the gold mining firm pays dividends.
Centamin has had a record production and this prompted the company to alter its dividend policy. As a result, investors in the gold mining company can expect a tidy sum to come their way.
Previously, the company had announced that it would be paying 15 to 30 per cent of its free cashflow as dividends. However, the Sukari mine operator has now confirmed that investors will receive a minimum of 30 per cent. The exact amount that investors will receive will be revealed after Centamin announces the results for the full year in February.
In 2016, Centamin was able to extract 551,000 ounces of gold, which was 25 per cent more than its production in 2015. The production was even higher than what the company had forecasted. Centamin CEO Andrew Pardey attributed the increase to efficiencies in production, especially in the processing plant. He also stated that the company would be revisiting its dividend payment policy so that investors can also benefit from the company’s windfall.
The gold miner has repaid the capital costs of $1 billion for Sukari mine and has started sharing profits with the Egyptian Government, with whom it has a 50-50 profit-sharing agreement.
Sukari is located in the desert and is an open-pit gold mine. However, nearly 45 per cent of the mined gold is extracted from below ground. This gold is superior in quality.
Besides its mine in Egypt, Centamin has also started exploration projects in Burkina Faso and Côte d’Ivoire. However, these projects are still in the initial stages of development.