CAPITAL MARKETS

Newmont declares 38% higher quarterly dividend

Gold major Newmont is the latest big miner to unveil an increased dividend.

Staff reporter
 Gold producer Newmont has increased its dividend

Gold producer Newmont has increased its dividend

It declared a quarterly dividend of US55c per share, a 38% increase on the previous quarter's dividend of 40c.

It follows Rio Tinto this week declaring its biggest dividend ever, a record final ordinary dividend of $3.09 per share plus a 93c special dividend, and BHP also declaring a record interim dividend of $1.01 per share.

Newmont said its increase was supported by a framework to return 40-60% of incremental attributable free cash flow to shareholders that was generated above a $1,200 per ounce gold price.

For the fourth quarter, the dividend increase was based on an $1,800/oz gold price assumption and a 40% payout ratio applied to the previously articulated $1.2 billion incremental free cash flow for every $300/oz change in the gold price, Newmont said.

"We are pleased to continue delivering industry-leading returns through the highest dividend in the gold sector at an annualised payout of $2.20 per share and a dividend yield of over 3.5%," president and CEO Tom Palmer said.

"Our dividend framework provides shareholders with a sustainable base dividend and the ability to directly benefit from Newmont's significant free cash flow generation at higher gold prices."

The gold price reached a record above $2,000/oz in August but has since softened to below $1,800/oz this week.

Newmont said its base annualized dividend remained at $1 per share and was sustainable at a $1,200/oz gold price.

The company is due to release its full 2020 and fourth quarter results later today, as is peer Barrick Gold.

Newmont shares have ranged from $33-$72.22 over the past year and closed down 1.4% in New York, valuing it about $46 million.

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