Molten gold. Montreal-based gold miner Semafo Inc. has declared its first dividend on rising output in its West Africa operations.Petr Josek/Reuters
Gold miner Semafo Inc. has approved an inaugural cash dividend as the company increases output at its West Africa mines.
Semafo said Tuesday it will begin paying a dividend to shareholders of 2 cents a share on Jan. 16 to investors who own shares of the company at year-end.
In trading on the TSX, Semafo shares were up 2 cents at $9.35 after the dividend was announced.
"With our continued solid performance and significant cash flows, Semafo is well-positioned to fund its operations and has the economic capacity to internally finance value-creation activities," president and chief executive officer Benoit La Salle said in a release.
"The board of directors is of the opinion that this is the right time to provide a dividend return to our shareholders. The payment of this inaugural dividend is evidence of Semafo's commitment to maximize shareholder value."
The miner said it will evaluate future dividends twice a year.
Semafo operates three gold mines – the Mana mine in Burkina Faso, the Samira Hill mine in Niger and the Kiniero mine in Guinea.
Last month, Semafo signed a deal to connect the Mana mine to the country's power grid with the construction of a 73-kilometre high-voltage transmission line, a move that will cut the mine's power costs to about 18 cents per kilowatt-hour from about 31 cents.
Semafo also recently said it would increase processing capacity at its Mana property to take advantage of positive new drill results and boost gold production from the mine by as much as two-thirds.
The expansion could add as much as 120,000 ounces of additional gold production per year and bring Mana's total annual production to more than 300,000 ounces.
The expansion is scheduled to begin early next year and is expected to be completed during the second half of 2013.
The company earned $48.8-million or 17 cents per diluted share on $179.8-million in gold sales for the six months ended June 30. That compared with a profit of $41.7-million or 16 cents per diluted share on $150.7-million in gold sales in the first six months of 2010.