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Why Is Centamin Ignored As A Dividend Paying Gold Producer?

|Includes: Centamin PLC (CELTF)


When you google the top dividend paying gold producers on the globe you will find several sites listing what they believe are the top dividend paying gold producers.

Why they leave Centamin off the list a mystery to me. This gold miner is one of the few that is unhedged, and is debt free.

Centamin's principal asset, the Sukari Gold Mine, began production in 2009 and is the first large scale modern gold mine in Egypt. Base case production is c. 500,000 ounces per annum, with the potential to exceed this level as optimisation of the mining and processing operations continues. Their solid financial position, strong cash flows and development and operating experience provides them with a significant advantage in acquiring and developing other gold projects.

In March 2017 Centamin paid a special dividend to shareholders of .135( US) a share. In September they will pay another .025  bringing the total to .16 .

This equates to about  8% annual dividend at current market prices.

Now one has to wonder if  Centamin is being blackballed by the North American and British stock markets, because they refuse to give out cheap stock with warrants to brokerages and big funds.

Why else would this stock be trading down while the spot gold price heads higher?

Why is there no analyst or precious metals writer that lists Centamin as one of the top dividend paying miners on the globe?

If you measure Centamin by P/E ratio they again come out near the top , at about 10 P/E currently. 

With no debt , their debt to capital ratio has to be number one on the list of gold miners. ANd perhaps , there in lies their problem. Bankers and fund managers  love gold producers with big debt and big plans. 

Centamin just pays out to shareholders , no big interest rates paid to preferred shares, no big interest payments on big lines of credit with financial institutions......

If this isnt on your radar as a great income investment when gold rockets up in the years to come, it should be.

Management tells me they will be going into higher grade ore in the last half of 2017, so production and costs per oz of gold will improve. Very likely we will see a much bigger dividend in March of 2018, with higher gold prices and better production. 

Centamin is a winner that gives to shareholders, and leaves the bankers to get their $$$ from other miners out there.

Disclosure: I am/we are long CETLF.

Additional disclosure: I am long Centamin shares acquired on the TSX in 2017.