Kinross to pay its first dividend in seven years after gold surges
Kinross Gold Corp. is boosting output and paying its first dividend in seven years after gold prices surged to a record.
The Toronto-based company will give shareholders three cents a common share, and resume quarterly dividends of the same amount, taking the total distribution to 12 cents a year, according to a statement Thursday. Production is expected to increase 20 per cent by 2023.
The move comes after investors flocked to the yellow metal as a safe haven, with the pandemic threatening to derail global economic growth. Spot gold climbed to a record US$2,075.47 an ounce in August and while prices have declined since then, they are still up 28 per cent this year, making it the second-best performer in the Bloomberg Commodity Index of 22 raw materials.
“Our growing production profile, combined with our declining cost structure, is expected to drive strong and growing free cash flow,” chief executive J. Paul Rollinson said in the statement. “We are also studying further organic development options given our attractive pipeline of projects and promising exploration results.”
Kinross, one of the world's top10 gold producers, will pay the dividend on Oct. 22 to holders of its stock on record at the close of trading 14 days earlier, according to the statement. The last time the company paid a quarterly dividend was in March 2013, paying out eight cents a share.
“The update rewards shareholders with a significant and sustainable return, and demonstrates management's ability to balance a disciplined and conservative approach with reinvestment in value-accretive projects,” Bank of Montreal analyst Jackie Przybylowski
said in a note. She upgraded Kinross to outperform from market perform.
Kinross shares have almost doubled this year. Kinross, which withdrew its guidance in April, said it's on track to meet 2020 goals for production, cost of sales per ounce sold, all-in sustaining cost per ounce sold and capital expenditures announced in February.