Centamin PLC Joins The Ranks Of Dividend Payers

Not many London-listed gold miners actually return money to their shareholders. But now Egypt-based Centamin (LSE: CEY) is one of that select group.

After outlining its proposed dividend policy in a statement a few months ago, Centamin announced a 0.87 cents per share dividend (roughly 0.5p) alongside its interim results this morning. Payable in early October, this represents a total distibution of $10m versus cash and gold on hand of around $130m.

In due course, Centamin has said it “will aim to approve an annual dividend within the range of 15-30% of the Company’s net cash flow after sustaining capital costs and following the payment of Profit Share due to the Government of Egypt.” Centamin reckons no profit share will become due for a couple of years, although it did make a $19m profit share payment last year as a gesture of goodwill.

Production forecast maintained

Other highlights of today’s statement included second-quarter production of 81,281 ounces, which was 9% higher than the first quarter but 13% lower than the same period last year. Nevertheless, Centamin is sticking with its full-year target of 420,000 ounces at a cash cost of $700 per ounce, as it is expecting plant throughput to increase and grades to improve from its underground mine. For next year onwards, the production target is 450,000 to 500,000 ounces. 

Centamin shares were largely unchanged on today’s news, changing hands at 74.5p. However, the shares have more than doubled from their lows of around 30p in early 2013 when there was a legal dispute over its exploration licence.