On the subject of dividends, the following extract from the recent AGM address of IGR's better performing neighbour is of particular interest:
"On the subject of finance, I would also like to touch on our dividend policy as we are sometimes asked by shareholders about when we are going to pay a dividend. To date, we have decided not to do so given our growth strategy. I would ask shareholders to consider the scenario where a successful exploration dollar is spent by S***** L***. For example: • Every 1c dividend (fully diluted) would reduce our cash by about A$2m. • If we applied that same A$2m to successful exploration at our average discovery cost of A$10/oz, then we would hopefully increase our resource base by 200,000oz. This increase in resource base potentially equates to an increase in our market capitalisation of A$50m of market capital or about A$0.20 per share. This is back of the envelope maths, but hopefully it illustrates the potential impact of exploration success compared to a modest dividend. It also again underscores our continued commitment to growth and exploration. Nevertheless, we will continue to review our dividend policy over time."
Cheers
IGR Price at posting:
62.5¢ Sentiment: None Disclosure: Not Held
