Shareholders in Australian junior Resolute Mining (ASX:RSG) will now have the option of collecting dividend payments in gold, under a new policy announced Tuesday, which is believed to be a world first.
The gold miner, which has nine operations across Australia and Africa, said it would still offer shareholders the option to choose cash instead. The new sales-linked dividend strategy, however, will allow shareholders to pick up the company’s latest 1.7 cent a share dividend payout in bullion.
To be eligible, shareholders need to hold 5,000 or more shares in Resolute Mining and have an account with the Perth Mint.
Here is the catch: To complete the deal, shareholders need to hold 5,000 or more shares in the company and have an account with the Perth Mint so bullion can be deposited directly into their accounts.
Resolute chief executive officer John Welborn said its company’s strong performance, including a record 2016 profit of A$213 million, has allowed the adoption of this exclusive dividend policy.
He also said he expected the bullion option to appeal mainly to retail shareholders, adding that it would be interested to see whether institutions also proved keen to accumulate a direct holding in gold.
Resolute will pay out a total of A$11.1 million in dividends, which amounts to 2 percent of the gold miner’s fiscal 2016 gold sales revenue of A$555 million. As of June 30, 2016, the junior had A$102 million in cash and bullion.
Shares in the company closed 6.8% higher in Sydney to A$1.88 on the news. So far this year, the company’s stock has gained 656%.
3 Comments
Jeff Hall
Gold Resource Corporation (GORO) also gives it’s shareholders the option to have dividends payed in gold bullion.
Altaf
Its better to convert the value of the shares to grams of gold instead of dollars. Then if they pay certain grams per share, out of their own produce, then it is just.
As long as they have shares in dollars and dividend declared in dollars and converted into gold (not raw gold but mint gold) is almost 20% expensive.
Its not giving its shareholders returns. Its like giving Perth Mint an additional business.
goldfinger
So they give their shareholders gold at the nominal spot market price say 1320, when in fact production costs are going to be substantially less, say 900. Sounds like a good deal. But if were a share holder I would take the gold.