Resolute Mining is giving some of its shareholders a unique choice of a cash dividend or gold.
The option is for those who hold more than 5,000 shares and it could pay off if the price of gold keeps rising. It is already standing at near-record levels in Australian dollar terms, and if the local currency falls further against the U.S. dollar, this could see a high return for those holding shares in the Australian company.
The Sydney Morning Herald reported that the company is joining the ranks of gold miners sharing their largesse with shareholders by paying a dividend, thanks to the strength of the gold price.
Resolute, which has gold mines in Queensland, Mali and Ghana is to pay a dividend of 1.7cents a share. So, holders of 5,000 shares will receive the equivalent in gold valued at $85. To complete the deal, you need to have an account with the Perth Mint, with the gold to be paid into your account.
"Shareholders will be able to safely store and accumulate Resolute dividends in gold and have the ability to convert their gold balances into cash or physical gold bullion," the miner's chief executive, John Welborn said.
The miner reckons it will be giving shareholders more than 2 per cent of its gold output annually via the new approach.
Resolute is producing around 3.2 million ounces of gold annually, indicating it expects to distribute 64,000 ounces directly to investors.
The company is targeting retail investors as the most likely to take up the option of receiving gold metal rather than cash for their dividends, although institutional investors have been occasional holders of gold bullion. But the lack of a return from owning gold directly is a disincentive for most.