Gold Road Resources Limited (ASX: GOR) (Gold Road or the Company) is pleased to announce that the Board of Directors has approved its inaugural Dividend Policy.
Gold Road will target an annual aggregate dividend payout of 15%-30% of free cash flow for each calendar year in two half yearly payments
Payment of any dividend will be subject to maintaining a minimum net cash balance of A$100 million
Gold Road will announce any dividend payments when announcing its future full year or half year results in accordance with ASX Listing Rules
To the extent the Company has franking credits, it will look at distributing franking credits to shareholders. As at 31 December 2019, franking credits available to shareholders were A$65.7 million
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 Gold Road maintaining a minimum net cash balance of A$100 million (after the payment of any dividend). Subject to the Board’s discretion, it is anticipated that the inaugural dividend will be declared for the six month period ended 31 December 2020. For clarity, the inaugural dividend will be calculated by reference to the free cash flow for that six month period.
The declaration of, or determination to pay, dividends remains at the absolute discretion of Gold Road’s Board of Directors after taking into account a number of factors, including but not limited to, Gold Road’s underlying financial performance and cash flow, commodity price expectations, balance sheet and treasury risk management, working capital needs and competing internal and external investment opportunities necessary for future growth, development and exploration.
Gold Road intends to establish a Dividend Reinvestment Plan in due course, and may, from time to time, provide shareholders with the option to increase their shareholding by reinvesting all or part of any potential future dividend in additional Gold Road shares.
Gold Road’s Chairman Tim Netscher said: “In less than a year since we declared commercial production at Gruyere, I am pleased to be in a position to announce a dividend policy. The company is debt free and building a strong cash balance. The dividend policy seeks to share our strong cash flow generation with our shareholders whilst still allowing us to prioritise ongoing operations and growth opportunities.”