LSE: MOEX: AIX: GOLD: $

Investor proposition

Leading dividend yield in the gold sector of 5% in 2018

Our prime responsibility is to build long-term value per share. Adherence to strong capital discipline is the foundation of our strategy:

Pay significant sustainable dividends
Ensure a strong balance sheet
Deliver meaningful value-accretive growth through internally generated funds
Any excess cash will either be invested for profitable growth or considered for additional returns to shareholders

Regular dividend is a shareholder’s right

We believe that a regular dividend is a shareholder’s right and comes before growth spending.

Target Net debt/EBITDA of 1.5x

Our near-term objective is to reduce net debt to ensure the Group’s Net debt/Adjusted EBITDA ratio is no more than 1.5x.

High capital expenditure hurdle rate

    We impose strong capital discipline on all investment decisions across the business:
  • We apply high IRR hurdle rates (12% real unlevered at a $1,200/oz gold price).
  • Our strong preference is with high-grade, low-cost and low-capital-intensity projects with high development optionality.
  • We minimise our capital costs by employing a centralised hub-based system that handles ores from different high-grade sources.
  • We preserve our focus by streamlining high-cost and short-lived assets.

Translating production into dividents

Dividends per gold equivalent produced in 2012-2018, $/oz

Source: Companies data and Bloomberg

Translating production into dividents

Dividends per gold equivalent produced in 2012-2018, $/oz

Polymetal 156
Centamin 132
Goldcorp 92
Pan American 88
Polyus 86
Fresnillo 85
Agnico-Eagle 68
Randgold 67
Yamana 64
Eldorado 59
Newmont 49
Acacia 43
Barrick Gold 42
Newcrest 42
Centerra 40
Goldfields 38
Iamgold 25
Hochschild 22
Kinross 15
Agnlogold 11
B2 Gold 0
Endevaour 0

Source: Companies data and Bloomberg

What makes us different

Focus on high-grade assets

Return on investment in the precious metals industry is reliant on grades and mining conditions. We achieve better returns and lower risks from our project portfolio by setting appropriate thresholds on head grades and largely focusing on open-pit mines.

Hub-based system

Our centralised hub-based system handles ores from different sources, achieving economies of scale by minimising processing and logistics costs, as well as capital spending per ounce. This facilitates production at otherwise uneconomical medium- and small-sized near-plant deposits.

Strong capital discipline

We engender a strong focus on capital discipline throughout the business; maximising risk-adjusted return on capital is our priority in all investment decisions. We do not retain excess cash and return free cash flow to shareholders through substantial dividend payments while maintaining a safe leverage level.

Exemplary governance

We believe that good corporate governance is key to the ongoing success of the business and value creation for our shareholders. We are compliant with all regulatory requirements and are recognised as sustainability leaders in the countries in which we operate, adopting best practice in nurturing relationships with all our stakeholders in government, industry and the communities.

Investing in exploration

Investment in both greenfield and near-mine exploration provides us with a cost-effective increase in our reserve base and, along with successful acquisitions, is the key source of our long-term growth.

Operational excellence

We pride ourselves on our operational excellence and delivering on our promises to shareholders. Despite difficult trading conditions, we beat our production guidance for the seventh consecutive year.