OceanaGold PH declares first dividend (22% annualized yield)

OceanaGold PH [OGP 13.48 ?2.3%; 330% avgVol] [link] declared a regular cash dividend of $0.0066 USD per share, payable on September 11 to shareholders of record as of August 14. The dividend covers the “post-listing period” from May 13 through June 30. OGP noted that while the dividend has been declared in USD, it will be converted and paid in PHP “based on the PHP:USD exchange rate on the day the payment is processed.”. OGP said that the annualized yield of this dividend is approximately 21.5% based on a share price of P13.80. OGP reported that it produced 23,100 ounces of gold and 2,800 tonnes of copper in Q2/24, with a Q2 net income of $14M on $69M of revenue. OGP said that it expects output to increase in H2/24, “based on stope sequence and the addition of new underground mining equipment.” 

MB BOTTOM-LINE: OGP’s dividend policy is to distribute 90% of its free cash flow, which for FY24 it estimates to be $76 million USD. That was based on an average gold selling price of $1,939/oz. Gold has surged basically since OGP listed, and its spot price has remained consistently above $2,300/oz since early May and threatened to breach $2,500/oz just a few weeks ago. Of course, a lot can happen between now and whenever OGP declares that dividend based on its FY24 free cash flow. The price of gold could absolutely plummet. Storms or other operational disruptions could limit the amount of gold OGP pulls out of its mine. The gold and copper deposits that OGP is working on could lead nowhere and recovery could fall dramatically. The point I’m trying to make here is that OGP could be in the early stages of proving out a very viable cash income stream. If the dividend were calculated at today’s exchange rate, shareholders would receive ?0.39/share for just 48 days of operations. 

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