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(Bloomberg) — AngloGold Ashanti Ltd. will consider resuming dividend payments next year after a four-year hiatus as a higher bullion price, weaker currencies in countries where it operates and lower interest payments boost the free cash flow of the world’s third-largest miner of the metal.
“We’re getting closer, every quarter or six months as we go, to resuming dividends,” AngloGold Chief Executive Officer Srinivasan Venkatakrishnan said on a call with reporters Monday. “Whatever we do would be sustainable and obviously would not be from borrowed money.”
The board will meet to discuss what to do with excess cash toward the end of this year and announce any new policy early in 2017, Venkatakrishnan said. AngloGold last paid a dividend in the first half of 2013 as the price of the metal slumped 28 percent that year.
Gold has soared 26 percent this year to about $1,340 an ounce as the U.S. dialled back expectations for increasing interest rates and central banks in the developed world moved to negative rates.
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Cash flow tripled to $108 million in the first half of the year while net debt dropped 32 percent to $2.1 billion, the Johannesburg-based company said in a statement Monday. Adjusted headline earnings were $159 million in the first half of the year compared with $61 million in the same period a year earlier.
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The dividend “is likely to be based on a percentage of free cash flow,” Venkatakrishnan said. Other uses of cash would include paying down net debt and investing in mine-expansion projects in Guinea, Mali and Australia.
AngloGold maintained its production forecast for this year at 3.6 million to 3.8 million ounces. Cash costs are estimated at $680 to $720 an ounce, and it kept the prediction for capital spending at $790 million to $850 million.
