LIHIR Gold Ltd (LGL), the second-largest gold mining company on the Australian Stock Exchange, is considering paying its first dividend since 2003 after output and prices rose.
“We are closer now than ever to start paying out regular dividends,” chief executive Arthur Hood told Bloomberg in a phone interview yesterday, citing gains in the gold price and better performance at its operations.
“Now is the time you should be rewarding shareholders with potentially a combination of dividends or capital returns or both.”
Gold for immediate delivery rose to a record yesterday as investors bought the precious metal to hedge against a lower dollar and a pickup in inflation.
Port Moresby-based Lihir, which owns mines in Australia, Papua New Guinea and Ivory Coast, has forecast record production this year.
The company may return to paying a dividend “in the not too distant future”, Hood said, without specifying a more precise timeframe. The company last paid a dividend of A$0.02 (K0.049) per share in 2003.
Lihir jumped 2.8% to A$3.29 (K8.06) at 12:45pm Sydney time on the Australian stock exchange.
The stock has risen 9.3% this year and has a market value of A$7.8 billion. (K19.12 billion).
The S&P/ASX 200 Index has climbed 30% this year.
“We’ve been driving down our cost of operation over the last few years so we’ve got very high margins,” Hood said in a separate interview on Bloomberg television.
Lihir produced a record 612,022 ounces of gold in the half- year to June 30 and has forecast output of between 1 million and 1.2 million ounces for the full year.
Gold for immediate delivery traded at US$1,066.43 (K2,612.75) an ounce in Sydney. It touched a record of US$1,068.63 (K2,619.19) yesterday.
LGL is a major employer in PNG, with a workforce of some 3,500 nationals. The company produces more than 750,000 ounces of gold annually, is a major contributor to the PNG economy and is the second largest-listed company on the Port Moresby Stock Exchange.