Canada-based precious metals miner Yamana Gold has rewarded shareholders with a maiden quarterly dividend of $0.0125 a share, in line with its previously announced 25% increase to the company’s yearly dividend.
The gold miner has now increased its yearly dividend cumulatively by 150% to $0.05 a share, from $0.02 a share in the second quarter of last year.
Yamana has adopted a policy of treating dividends on a per-ounce basis and established a programme pursuant to which it would create a reserve fund to protect the dividend for a minimum of three years.
Given a significant increase in free cash flow, the company said on Thursday it was targeting the payment of a dividend between the current rate of about $50 a gold-equivalent ounce (GEO) and $100/GEO.
The gold producer had a particularly strong year for cash flow growth, with cash flow from operating activities increasing by 29% to $521.8-million and free cash flow rising by 63% to $219.8-million.
The growth in free cash flow contributed to a sharp rise in its cash balance, which increased to $158.8-million at the end of the fourth quarter, from $98.5-million a year earlier.
The company also managed to nearly halve its net debt in 2019, significantly strengthening its balance sheet and financial flexibility.
CEO Daniel Racine commented in a statement that 2019 had been an “exceptional year” for Yamana.
“We significantly strengthened our balance sheet by lowering debt and increasing free cash flow.
“Our operations executed extremely well, with Jacobina posting record fourth quarter and full-year production and El Peñón enjoying its strongest quarter since we rightsized the operation three years ago. Minera Florida also performed well, particularly in the month of December, something we believe is a sign of things to come. We are carrying this momentum into 2020 using our improved financial flexibility to further reduce debt, advance our organic growth projects and exploration programme, and continue to increase shareholder returns.”
Fourth-quarter GEO production of 256 288 comprised gold production of 221 595 oz and silver production of 2.97-million ounces and full-year production of 1.02-million GEOs exceeded its guidance, with gold production of 900 339 oz and silver production of 10.6-million ounces.
The miner reported net income of $225.6-million, compared with a loss of $297.7-million in the full year. Its fourth-quarter earnings came to $14.6-million, from a loss of $61.4-million a year earlier.
Yamana’s Toronto-listed stock closed more than 4% higher at C$5.33 a share, giving the company a market capitalisation of C$5.07-billion. The New York-listed shares closed 3.76% up at $4.00.