Recently, gold miner
Yamana Gold, Inc.
) has taken some steps to deliver greater value to shareholders.
Earlier this week, the company announced that it has entered into
an agreement to acquire
Extorre Gold Mines Limited
), a move aimed to fortify its development pipeline.
In addition, Yamana also decided to pump up its annual dividend
to 26 cents a share, an 18% jump from the second quarter's payout
and 117% higher than what it used to pay a year ago.
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Shareholders will be entitled to receive the increased dividend,
amounting to 6.5 cents per share, from the third quarter this year.
The record date for the dividend is yet to be finalized.
This is the fourth time that Yamana has increased its dividend in
the last one year based on its commitment to deliver growth and
value to shareholders. The company is confident of generating
enough cash flows through its operations to meet the increased
dividend payouts. Yamana expects that its C1 Santa Luz and
Ernesto/Pau-a-Pique projects will soon become productive and
further contribute to cash flows.
In addition, the acquisition of Extorre is expected to provide
further impetus to cash flows. Yamana is acquiring Extorre at a
bargain price, which is just 3% of its market capitalization. This
is certainly impressive considering that Extorre is capable of
accelerating Yamana's production by 10%, which will probably lead
to higher cash flows.
Yamana, which competes with
AngloGold Ashanti Ltd.
Kinross Gold Corporation
), holds a Zacks #3 Rank, reflecting a short-term (1 to 3 months)