GOLD Fields said today it planned to return $500m to shareholders over the next two years either in special dividends or by buying back its shares.
Commenting ahead of a closed presentation to analysts on Wednesday, the group also proposed a rebasing of its dividend in terms of which it will pay out 35% of free cash flow before discretionary growth expenditure.
As part of the dividend overhaul, it pledged to pay a minimum dividend of 50 US cents per share in two payments of 25c/share each provided its net debt did not exceed one times its Ebitda. The dividend will be topped up if the minimum payment is less than 35% of the targeted free cash flow, the group said.
The current dividend policy is a base dividend of 30% to 45% of normalised earnings. In August, the group declared an interim dividend of 700 SA cents a share which is more than double the 300c interim paid in 2024 and represented a payout of 34% of normalised earnings. It generated adjusted free cash flow of $952m in the six months compared with a negative cash outflow of $58m in the first half of 2024.
The adjustment to its capital returns programme is in line with some of the plans rolled out by other significant producers in the gold sector amid record-breaking gold prices.
Bullion is currently trading 57% higher this year at some $4,125 per ounce, largely on concerns over rising global debt, especially in the US, as well as geopolitical distress and so-called dollar debasement strategies, led by China.
Gold Fields also said it would present to analysts its plans for maintaining gold production at between 2.5 to three million ounces a year.
The trajectory of Gold Fields’s production has been a feature of the company’s narrative for probably longer than it would want. Former CEO Chris Griffith famously failed to get shareholders to agree to the $4bn takeover of Yamana Gold in 2022 in an effort to sustain production at levels the group now plans to lay out.
Since the Yamana debacle, Gold Fields has spent about $4.8bn buying out its joint venture partners in the Gruyere mine in Western Australia ($2.4bn or A$3.7bn) and at Windfall, a C$1.1bn, 300,000 oz/year project in Canada’s Quebec ($440m for its initial stake and $1.39bn for the balance). As part of its capital markets day, Gold Fields plans to update analysts on progress and its plans at Windfall.
Last week Gold Fields said it was on track to hit the upper end of its gold production forecast for the 2025 financial year of 2.45 million ounces (2.25 to 2.45 million oz). Attributable third quarter production was 621,000 ounces, 6% higher than in the previous June quarter and 22% higher than in the third quarter last year.
These are rare days for the world’s gold securities which have this year started to catch up with the metal’s price increases. The Van Eck EFT is 117% higher this year and up 101% over five years compared to bullion’s 120% gain over the same period.
Earlier this week Barrick Mining announced an increase in the base dividend as well as its share buy-back programme. This was on the back of a record $1.5bn in free cash flow for the three months to end-September.
In February, AngloGold Ashanti unveiled a new dividend policy earlier this year in which it rebased its dividend and promised to pay out 50% of free cash flow by year-end. Such has been the cash bonanza, AngloGold has twice declared the early payout of free cash flow in both its second and third quarter announcements.
