TORONTO (miningweekly.com) – After declaring commercial production at its flagship Escobal silver/lead/zinc mine, in south-eastern Guatemala in January, TSX- and NYSE-listed miner Tahoe Resources has declared a maiden dividend of $0.02 a share.

The Vancouver-based company said its board had on Monday approved a monthly dividend, payable on December 19, to shareholders of record on December 12.

The dividend would qualify as an ‘eligible dividend’ for Canadian income tax purposes, with tax legislation enacted in 2007 seeing Canadian residents who received eligible dividends entitled to an enhanced gross-up and dividend tax credit on such dividends. The company said in a statement on Wednesday that it planned to continue the monthly dividend subject to board discretion.

"We have produced strong free cash flow in each of our first three quarters of production and paid down $25-million of our term debt this quarter. As the Escobal mine approaches our goal of 18-million ounces  to 21-million ounces of silver production in its first year, the time is right to initiate a dividend that we believe is sustainable and can grow over time,” Tahoe vice chairperson and CEO Kevin McArthur said.

"This dividend complements our 'New Leader in Silver' identity and is an important part of our commitment to delivering shareholder value," he added.

Net earnings for the September quarter amounted to $20-million, or $0.13 a share, derived from revenue of $90.3-million, which was generated from concentrate sales at operating costs of $53.4-million and resulted in earnings from mine operations of $36.9-million.

Silver output was 5.2-million ounces at a total cash cost of $7.02/oz and an all-in sustaining cost of $9.62/oz produced, net of by-product credits.

Year-to-date production was 15.1-million silver ounces.

The company was currently expanding to 4 500 t/d at the Escobal operation, which it reported was on track to be complete late next year.

Tahoe had last week reported an 18% increase in the compliant measured and indicated resources at its flagship operation, supported by a feasibility study.

The miner said the combined measured and indicated resources were now 433.9-million silver ounces, with an average grade of 346 g/t, a significant increase compared with the resources of the January 2012 resource estimate. The inferred resources were 9.3-million silver ounces, at an average grade of 224 g/t. The proven and probable reserves of 31.4-million tonnes, at an average silver grade of 347 g/t, accounted for 350.5-million silver ounces contained in the mine plan.

Tahoe now expected to produce 19.1-million silver ounces and 22.4-million silver equivalent ounces, on average, over the first ten years of the mine's life.

The company's NYSE-listed stock gave back 5.57% on Wednesday to close at $16.12 apiece.