Eldorado Gold Corp. said Monday its next dividend will be 50 per cent higher than the previous payout in August, thanks to higher bullion prices.
Eldorado says it will pay a dividend of 9 cents per share on Feb. 14 to shareholders of record as of Jan. 31, up from a dividend of 6 cents paid in August.
The company, which ties its dividend to gold prices, produced 659,134 ounces of gold in 2011 with an average realized price of S$1,582 (U.S.).
It expects to produce 730,000 to 775,000 ounces of gold this year and 560,000 to 600,000 tonnes of iron ore in 2012.
The increase in gold production will come from a full-year of production from the Efemcukuru mine in Turkey where production started last year and the first production from the Eastern Dragon in China in the second half of the year.
“The addition of the Efemcukuru mine in 2011 and the planned start-up of the Eastern Dragon mine in 2012 continue to increase the company’s production while maintaining costs in the lower quartile of gold producers,” president and chief executive officer Paul Wright said in statement.
Capital spending for 2012 is expected to total $335-million including $325-million on the gold mines and $10-million at the Vila Nova iron ore mine in Brazil.
Eldorado has operations in Brazil, China, Greece, and Turkey and surrounding regions.
UBS analyst Dan Rollins, who rated Eldorado a “buy” with a $19 price target on the stock, noted the company had a strong finish to 2011 and topped its midyear production guidance.
Looking to 2012, Rollins noted that “although production is in-line with our forecast due to higher than expected production from Efemcukuru and Kisladag, production from Jinfeng is significantly lower than expected due to a phased push-back of the open-pit.”
Last month, the gold miner announced a friendly takeover bid for European Goldfields Ltd. valued at the time at $2.5-billion.
Under the takeover deal, European Goldfields shareholders will receive 0.85 of an Eldorado share and a tiny cash amount – one hundredth of a cent per share – for each share.
European Goldfields owns 95 per cent of the Stratoni lead, zinc and silver mine in northeastern Greece. The company also has gold and base metal deposits at Skouries and Olympias in Greece and Certej in Romania.