Gold companies struggle to woo investors despite high prices, lure of dividends – by Gabriel Friedman (Financial Post – February 29, 2020)

North America’s biggest mining conference starting Sunday may offer hope for juniors hungry for cash

One sign that Canada’s gold mining executives are still working to lure back investors to their sector is how many companies are giving money back to shareholders.

Agnico Eagle MInes Ltd. boosted its dividend 14 per cent, Barrick Gold pushed its dividend up by 25 per cent, and Kirkland Lake Gold has committed to doubling its dividend while other companies have also made similar promises.

Giving cash back to investors comes at a time when gold prices are soaring — still up roughly 20 per cent since the beginning of June to US$1,569 on Tuesday — meaning many gold producers are suddenly awash in cash.

Gold prices fell 4.6 per cent on Friday to US$1,568.96 per ounce Friday, as the safe-haven metal withered amid a broad-based market rout. Yet, even as factors mount to suggest that gold prices will continue to rise, including fears of a global pandemic combined with low-interest rates, investors remain skeptical about gold mining companies.

Agnico Eagle, for example, generated record cash in 2019 of US$881 million. But since it cut its 2020 production guidance on Feb. 13, to 1.875 million ounces from 1.9 to 2 million ounces, its stock has dropped 20 per cent to $62.41.

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