Nevsun Resources (TSX:NSU) is rewarding shareholders barely a week after its first profitable quarter of production.
The Vancouver-based gold miner, which recently startedproduction at Eritrea’s first modern-day gold mine, has issued a semi-annual cash dividend of $0.03 per common share.
The dividend is payable July 15.
CEO Cliff Davis said it’s unusual for a mining company to issue a dividend so quickly (commercial production began in February), but strong operating results and high gold prices have boosted the company’s results right out of the gate.
“We’re making a lot of money so we thought we’d give some back to our shareholders,” Davis told Business in Vancouver.
The company posted net income of US$21.9 million in the first quarter, producing some 75,000 ounces of gold at a price point of $1,405 per ounce.
Nevsun had US$104 million in cash and cash equivalents as of March 31.
Davis said the mine is producing approximately 1,000 ounces of gold per day, and in the months ahead Nevsun will focus on a drill program to expand its resource base there.
Despite the milestone, Davis said the dividend was still “baby steps” toward creating true value for shareholders.
At press time, Nevsun’s shares were up 11% to $5.78.
Joel McKay