Gold Road will target annual dividend payments which in...

Gold Road will target annual dividend payments which in aggregate represent 15% – 30% of free cash flow for each
calendar year, payable by way of two half yearly payments. Gold Road’s free cash flow is defined as cash flow before
debt and dividends. Declaration of any dividend will be subject to the Board’s discretion and Gold Road maintaining a
minimum net cash balance of $100 million (after the payment of any dividend).
For clarity, the inaugural dividend will be calculated by reference to the free cash flow for that six month period.

Underlying cash flow for the September quarter: $22.2 million (reported)
Underlying cash flow for the December quarter: $25 million* (personal estimate)
Total underlying cash flow for the 6 month period: $47.2 million

*Reason why I have gone with $25 million (June quarter was $23.8 million) is due to the management highlighting the December quarter will be a higher production and lower cost quarter compared to the September quarter.

I estimate cash to be $133 million (increase of $30 million) at the end of the December quarter.

15% of free cash flow for 6 month period is: $47.2 million/15% = $7,080,000
30% of free cash flow for 6 month period is: $47.2 million/30% = $14,160,000

The estimated cash balance at the end of the quarter would allow Gold Road to pay out the upper range of 30% of the free cash flow and still have more than $100 million in cash.

Shares on Issue: 880 million

Dividend per share @ 30%: $14,160,000/880,000,000 = 0.016

Therefore, I estimate the dividend will be 1.6 cents per share. Also, GOR has $65.7 million in franking credits.

Happy to revisit this post in a couple months time and see whether I am on the money or not even in the ball park. Time will tell I guess.

Also believe the management need to do a better job keeping the market informed. Gold Fields is managing the Gruyere mine so management's only job is to discover another 1 million ounce project and with $20 something million in exploration funding, they have the time and resources to do it.

In terms of the comment that Gold miners aren't generous with dividends in comparison to other miners like RIO or BHP, yes its true but BHP and RIO shouldn't be the benchmark. FMG should with an estimated 10% dividend yield excluding franking.

These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.

Best of luck to all holders and remember there is more important things in life than money like family, happiness and health.

Sarge