By Ben Hirschler
LONDON (Reuters) - Canada's Yamana Gold Inc (YRI.TO: Quote, Profile, Research, Stock Buzz) will consider hiking its dividend in the third quarter of 2008 as it reaps the benefits of record high gold and silver prices, its chief executive said on Tuesday.
"By the third quarter, we will seriously have to look at what we do with that available cash and part of it will be looking at an increase in the dividend," Peter Marrone told the Reuters Global Mining Summit in London.
Yamana spent $4.5 billion on acquisitions last year to turn itself into a top mid-tier gold producer and expects to produce up to 1.3 million gold equivalent ounces this year, mainly in Latin America, with a goal of 2.2 million by 2012.
Marrone said he was looking to match the sort of pay-outs from major gold producers like Barrick Gold Corp (ABX.TO: Quote, Profile, Research, Stock Buzz) and Newmont Mining Corp (NEM.N: Quote, Profile, Research, Stock Buzz), which last year offered a dividend yield of just under 1 percent.
A comparable yield for Yamana would equate to around 4 cents a share per quarter, up from 1 cent at present, he added.
A higher dividend would be "good financial discipline" and would also attract yield investors -- a pool of capital around 10 times the size that focused specifically on gold miners.
Yamana acquired rival Meridian Gold and smaller Northern Orion Resources last year to bolster its portfolio. It plans to increase production progressively this year, with output in the second half exceeding that of the first half.
The timing of these deals leaves it well-placed to capitalize on soaring gold prices, which Marrone said had a "good chance" of breaching $1,500 an ounce this year. Continued...
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