Mining Company To Start Minting Shareholder Payments
Earlier this month, the attraction of an interest style payment in silver form to owners of investment paper in a silver minting company was highlighted on 3rd August when the Panamanian Royal Silver Company’s innovative scheme was discussed.
A few days later, on 13th August, the potential value of silver mining companies to stock investors was explained.
Now, it seems a junior mining company listed on the Amex has decided to combine these two potential benefits and looks set to offer its shareholders something very unique in years to come.
In the 3rd August post, the potential for profits to increase and therefore dividends to do likewise where paid, and the share price to follow, was described. A potential pot of gold for stock investors if the markets wake up to intrinsic values of silver and gold mining companies.
One such mining company is Gold Resources Corporation (GRC). GRC concentrates on the exploration and mining of gold, silver, and other precious metals, mainly in Mexico and is headquartered in Denver, Colorado, USA.
Recently it paid a special dividend of 4 cents per share, indicating its intention of continuing dividends in the future, and announced record quarterly results.
The problem with cash dividends, of course, is that if held in a bank account as savings, the value of the dividend over time is likely to decrease due to factors such as inflation and tax.
Along with its results’ announcement, GRC has said that it will be minting around $1 million of its own gold and silver coins in the future. This paves the way for dividends in kind to be paid, rather than cash dividends.
Such a move could prove good news for investors, who will receive gold or silver in the place of cash. Payment of such dividends will offer investors the opportunity for the paid dividend to increase in value over time, as the cash value of the gold or silver handed out may increase. It will also prove of benefit to the company, who will be able to retain more of its cash on the balance sheet.
GRC says that it focuses on mining opportunities that have low production costs and high returns on capital. Since it started production a little more than a year ago, it has paid 13 special dividends in line with its aim of paying meaningful dividends to its shareholders.
It may be that other miners follow GRC’s lead with more dividends paid in kind. Investors will have to wait and see if this transpires over the next few years.
