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Thread: I´m searching for gold miners that peg dividends to gold prices

  1. #1

    Question I´m searching for gold miners that peg dividends to gold prices

    I want to generate some cash flow from my pm investments.
    Therefore i´m searching for gold mining companies that peg their dividends to the price of gold.

    I only know one: NEM.
    Do you know others?



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  3. #2
    I believe they are the only ones.
    What I say is for entertainment purposes only!

    Mark 10:45 The Son of Man did not come to be served, but to serve, and to give His life as a ransom for many.

    "If you want to make a lot of money, resist diversification." - Jim Rogers

  4. #3
    I´m sure there are others i just can´t remember...

  5. #4
    Ok here is a similar strategy: Yamana Gold (AUY)
    http://www.fool.com/investing/genera...ng-for-di.aspx
    They already went ballistic.

  6. #5
    I've noticed that Newmont pegs it's dividend at 30cents a share, QUARTERLY.


    So 10 shares would yield 3 dollars every 3 months?

    Seems awefully low. The shares are 55$ a pop.

    At this point I'm more inclined to buy silver to continue building a solid core of savings/investment.

  7. #6
    Quote Originally Posted by Seraphim View Post
    I've noticed that Newmont pegs it's dividend at 30cents a share, QUARTERLY.


    So 10 shares would yield 3 dollars every 3 months?

    Seems awefully low. The shares are 55$ a pop.

    At this point I'm more inclined to buy silver to continue building a solid core of savings/investment.
    Yep, yield is 2,1% annually. Quite poor.
    That´s why i´m searching for higher yields.

  8. #7
    What's a more "normal" annual yield for a dividend?

    Quote Originally Posted by swissaustrian View Post
    Yep, yield is 2,1% annually. Quite poor.
    That´s why i´m searching for higher yields.

  9. #8
    Quote Originally Posted by Seraphim View Post
    What's a more "normal" annual yield for a dividend?
    Mining shares usually aren´t dividend stocks, because this market is in the growth phase.
    consumer stocks, utitilities, telecommunications, oil, tobacco, and some insurances offer yields of 5%-7% right now. Some even higher.



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  11. #9
    Ok cool - I figured 6% was probably around average.

    Thanks - I think I will buy some Newmont at some point soon. I don't see how their gold priced dividends will go anywhere but up.

    Quote Originally Posted by swissaustrian View Post
    Mining shares usually aren´t dividend stocks, because this market is in the growth phase.
    consumer stocks, utitilities, telecommunications, oil, tobacco, and some insurances offer yields of 5%-7% right now. Some even higher.

  12. #10
    Look at MLPs for yield and some commodity exposure.
    What I say is for entertainment purposes only!

    Mark 10:45 The Son of Man did not come to be served, but to serve, and to give His life as a ransom for many.

    "If you want to make a lot of money, resist diversification." - Jim Rogers

  13. #11
    Quote Originally Posted by Seraphim View Post
    Ok cool - I figured 6% was probably around average.

    Thanks - I think I will buy some Newmont at some point soon. I don't see how their gold priced dividends will go anywhere but up.
    6% for the big blue chips, yes.
    I´m thinking about accumulating NEM too. Probably the stock is going to fall with the gold price for a couple of days. Then we might see a good entry point.
    The quarterly Dividend will be priced in on 9-6 (ex-dividend date).

    Analyst opinion is this:
    Strong buy:8
    Buy: 2
    Hold: 6
    Sell: 0
    Strong sell: 1
    Latest revisions:
    0 Upgrades
    0 Downgrades

    P/E 12, probably this estimation is too high, because analysts didn´t expect the surge in gold prices.

  14. #12
    Quote Originally Posted by cubical View Post
    Look at MLPs for yield and some commodity exposure.
    If i type in MLP i get: Maui Land&Pineapple (DCT)?

  15. #13
    Quote Originally Posted by swissaustrian View Post
    If i type in MLP i get: Maui Land&Pineapple (DCT)?
    Master Limited Partnerships. They offer tax advantages and huge distributions to US citizens. I am unsure how it works if you are overseas.
    What I say is for entertainment purposes only!

    Mark 10:45 The Son of Man did not come to be served, but to serve, and to give His life as a ransom for many.

    "If you want to make a lot of money, resist diversification." - Jim Rogers

  16. #14
    Quote Originally Posted by cubical View Post
    Master Limited Partnerships. They offer tax advantages and huge distributions to US citizens. I am unsure how it works if you are overseas.
    Ok thanks.

  17. #15
    Don't invest in miners. Please listen to my advice. Physical metal in your possession has outperformed the miners and with LESS RISK. You should only own specific miners if you have a large base of physical and are ready to pour over financials to find a gem amongst the rubble.

  18. #16
    NEM raises its dividend 10 cents everytime gold rises $100. If gold stays around 1800, the dividend will be at 50 cents next quarter.
    Tu ne cede malis sed contra audentior ito



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  20. #17
    Quote Originally Posted by jclay2 View Post
    Don't invest in miners. Please listen to my advice. Physical metal in your possession has outperformed the miners and with LESS RISK. You should only own specific miners if you have a large base of physical and are ready to pour over financials to find a gem amongst the rubble.
    I own quite a bit of physical and miners are just 5% of my portfolio as stocks only make 10-25% of it. I´ve done pretty well with them. (e.g. SLW, RGLD)
    Some mining shares are totally undervalued right now. The surge in the price of gold hasn´t been priced in so far. see here
    :
    In order to generate some cash flow, mining shares that pay dividends are a good pick for me. Especially because hedge funds often use the long metals, short miners trade. Some companies are set up to have massive short squeezes. Look at what happened to Yamada Gold.
    Surely, you have to do your homework and analyze the single company.
    Last edited by swissaustrian; 08-12-2011 at 05:26 PM.

  21. #18
    The great thing about dividend investing is that even though you may only be getting 2% right now, as time goes on and the stock price goes up, so does the dividend. In time, that dividend may wind up yielding 7 or 8% of your original investment.

  22. #19
    Check out Gold Resources, ticker GORO. They commit to pay out a meaningful percentage of cash flow which is effectively a peg to the gold price. I own it. Their deposit is very rich. Management is good. It is fairly priced. (not cheap, fair). I think it will be a popular stock due to dividend policy.

    LL

  23. #20
    Quote Originally Posted by llepard View Post
    Check out Gold Resources, ticker GORO. They commit to pay out a meaningful percentage of cash flow which is effectively a peg to the gold price. I own it. Their deposit is very rich. Management is good. It is fairly priced. (not cheap, fair). I think it will be a popular stock due to dividend policy.

    LL
    Thanks, Larry!
    The dividend policy really sounds interesting:
    GRC is proud to have declared its initial $0.03 per/share "special" cash dividend July 31, 2010, just 30 days after declaring commercial production, and distributed consecutive monthly "special" dividends totaling $0.18 per/share returned back to the shareholders of the Company in 2010. The Company targets long-term dividend distributions of approximately 1/3 of cash flows.
    http://www.goldresourcecorp.com/overview.php

    What about the role of Mexican unions in mining? From what I know they´re causing some trouble for the companies, but it´s not as bad as in South Africa?

  24. #21
    ^mining companies in Mexico are sketchy investments because they have a history of nationalization.
    Tu ne cede malis sed contra audentior ito

  25. #22
    Quote Originally Posted by libertybrewcity View Post
    ^mining companies in Mexico are sketchy investments because they have a history of nationalization.
    As Carlos Slim is probably more powerful than the whole Mexican gov., i don´t expect any nationalization moves soon. He is substancially exposed to the mining sector (see e.g. here http://www.istockanalyst.com/article...icleid/4911999 ) and would suffer from that.
    Therefore my main concern are the unions.

  26. #23
    After doing some research on GORO, I found this controversy between GORO and an author from Barrons who basicly claims that the company is a fraud. See here:
    http://online.barrons.com/article/SB...Tabs%3Darticle
    Defense by the company: http://www.prnewswire.com/news-relea...125017169.html

  27. #24
    Swissaustrian, do you live in die Schweiz?
    Last edited by QE Is Theft; 08-14-2011 at 09:56 PM.



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  29. #25
    Quote Originally Posted by QE Is Theft View Post
    Swissaustrian, do you live in die Schweiz?
    Yes.

  30. #26
    I envy you.

    Switzerland is the best/most beautiful country in the world.
    Last edited by QE Is Theft; 08-15-2011 at 07:28 PM.

  31. #27
    Arklatex
    Member

    Ramelious Resources is my favorite Gold Miner and they surprised me last year with a 2% dividend, more than any other miner I'm aware of at the moment which is unusual because they are a lot smaller, by far, than the Newmonts and Barricks. My favorite management, makes right decisions, has growth AND yields. What more could I want?

  32. #28
    Quote Originally Posted by swissaustrian View Post
    After doing some research on GORO, I found this controversy between GORO and an author from Barrons who basicly claims that the company is a fraud. See here:
    http://online.barrons.com/article/SB...Tabs%3Darticle
    Defense by the company: http://www.prnewswire.com/news-relea...125017169.html
    Barron's article was a smear.

    Mexico confiscation is not too likely. However, security is an issue. Drug business is stealing trucks, etc. Co. has good security.

  33. #29
    Quote Originally Posted by llepard View Post
    Barron's article was a smear.

    Mexico confiscation is not too likely. However, security is an issue. Drug business is stealing trucks, etc. Co. has good security.
    This author from Barron´s probably shorted the hell out of GORO before publishing his article.
    Do you have some information on the role of unions in the Mexican mining business? I´ve heard that it´s a challange to deal with unions in Mexico, but that it´s not as bad as in South Africa...

  34. #30

    Thumbs up GORO wins



    I'll be grabbing Gold Resource shares ASAP.

    Doing so breaks my rule against investing in production outside of NATO.

    But I've already made an exception for EXK, and it's been my fastest horse.
    Bachmann2012.com is For Sale, to benefit RPF and RP2012.

    Silver kills vampires: We store. We wait. We win.

    Economics, like chemistry, has nothing to do with politics. -Chodorov

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