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GV Gold Board of Directors approves new dividend policy

Published by , Deputy Editor
Global Mining Review,

The Board of Directors of GV Gold, together with its subsidiaries (GV Gold, Vysochaishy), one of the largest and fastest growing gold producers in Russia, has approved the company’s new dividend policy. This new policy further enhances dividend proposition of GV Gold vis-à-vis industry best practices.

Vladislav Barshinov, CEO of GV Gold, commented: “Our operating and financial performance – and cash flow in particular – has been driven by the measures we have been taken to increase ore processing volumes at the strategic growth projects Taryn and Ugakhan, as well as by macro factors. Stronger cash flow gives us greater scope to increase the dividend distribution, while at the same time continuing to invest in development projects. This has underpinned our consistently high dividend payments in recent years with the payout ratio reaching almost 40% of EBITDA for the first nine months of 2020. Already on track with such ambition, we are now formalising it with the new dividend policy.”

The new version of the dividend policy reflects actual changes to the terms of the company's dividend payments. Payments will vary depending on the company’s leverage and with account of the company’s CAPEX requirements to execute new strategic projects:

  • The company is targeting a dividend payment of 40% of EBITDA, provided that the net debt to EBITDA ratio is lower than or equal to 1.5x.
  • The company plans to allocate 30% of EBITDA to dividend payments, if the net debt to EBITDA ratio is higher than 1.5x but lower than or equal to 2.5x.
  • The company plans to allocate up to 20% of EBITDA to dividend payments, if the net debt to EBITDA ratio is higher than 2.5x but lower than or equal to 4x.

If the company’s liquidity position, CAPEX and equity to debt ratio allow, the Board of Directors may consider making special dividend payments, as long as this does not conflict with the company's current liabilities.

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