Gold, silver and antimony miner Mandalay Resources(TSE:MND) has issued a strong message of intent with a promise to pay 6% of net future revenues in dividends.
Mandalay announced a dividend for the quarter of C$0.769 in line with this new policy.
Going forward it will said it pay quarterly dividends in an aggregate amount equal to 6% of the trailing quarter's gross revenue, which it defines as revenue before royalty payments.
Brad Mills, Mandalay’s chief executive, said the new policy would closely align shareholder returns with the actual business performance” in a sustainable way as metal prices and operational results fluctuate”.
“Mandalay's board has taken a decision to adopt a dividend policy that aligns with these variations by tying dividends to actual revenue generated.
“Mandalay's low cost operations ensure that this is a sustainable approach to delivering shareholder returns and allows us to better plan for future capital and operational needs." .
The dividend commitment follows another quarter of record income from the miner driven by a strong performance from its Costerfield gold and antimony mine in Australia.
Group revenues in the three months to March almost doubled to US$41.6mln (US$20.8mln), a rise that led to underlying earnings (EBITDA) more than trebling to US$19.8mln.
Net income swung from a loss of US$8.9mln to a profit of US$10.9mln.
Brad Mills said the quarter was defined by a strong operating and financial performance at Costerfield.
The improvement was due to operational improvements in the mine and plant plus excellent mine and mill grades during the quarter, he added.
Mandalay had previously announced that Costerfield produced saleable 6,203 ounces gold and 766 tonnes antimony, versus 3,690 oz gold and 489 t antimony a year ago.
Ore production rose 25,865 t, versus 19,093 t in 2012, while grades were an impressive 9.08 g/t gold Au and 4.80% Sb, against 8.45 g/t Au and 4.39% Sb in a year earlier.
“The greater metal production in the first quarter of 2013, combined with good cost control, led to a reduction in cost per gold equivalent ounce produced to $967/oz as compared to $1,301/oz in the corresponding quarter of 2012, “ the company added.
At Cerra Bayo in Chile, production in the current quarter was lower than in the prior three months quarter as new flotation automation equipment was installed to improve recoveries of both gold and silver.
Cerra Bayo’s cash cost per silver ounce produced net of gold was $8.96/oz during the first quarter, against than $11.45/oz in a year earlier, mainly due to higher production as the ramp-up proceeded.
Production guidance for Cerra Bayo for the full year remains unchanged, with lost production expected to be made up full by the year end.
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