Goldcorp (TSX:G) declared its fourth monthly dividend for 2011 Monday as gold prices climbed north to US$1,435 per ounce.
The company, which is the largest B.C.-based gold producer, posted record cash flow and earnings in 2010 on the back of soaring precious metal prices.
That revenue paid off handsomely for shareholders, who raked in $154.4 million in dividend payments in 2010.
President and CEO Chuck Jeannes said in an interview that Goldcorp is dedicated not only to rewarding shareholders with dividends, but also using its cash flow to build and expand new mines for long-term growth.
“We doubled our dividend in October and then we added another $0.04 per share in February, so that increased it by another 11%,” Jeannes said.
“We’ve been very active on the dividend, and the reason is that the world of gold companies is quite different now than it has been for most of my career when we were producing gold at US$200 or US$250 an ounce and selling it at US$300 or US$400 per ounce, and we had to scrape and claw for every bit of capital we could to reinvest in the business. Dividends just weren’t part of the overall strategy.
“Well, things have changed pretty dramatically. We at Goldcorp produced gold for US$274 an ounce last year and sold it for over $1,200, so we had margins – cash margins – of nearly US$1,000 per ounce, and in that environment we believe we can reinvest in the business, and we’re doing that.
“We have six new mines we’re building over the next five years to increase our production 60%, and we still have free cash flow available after that expenditure on growth or investment on growth to enhance our dividend.”
At press time, Goldcorp’s shares were up $0.35 to $47.76.
The company’s annual dividend is $0.408 per share.