Shares in Troy Resources rose 4% yesterday after the company revealed a plan to return to paying dividends.
The shares ended up 17c at $3.63.
The news came in a statement to the ASX announcing the opening of Troy’s new mine in Argentina.
"In recognition of the official opening and the continued ramp up in gold and silver production at the mine, the Company has declared a A$0.04 per share Fully Franked Interim Cash Dividend. The Record Date will be Tuesday June 17, 2011 and the Payment Date will be June 29, 2011," the company said.
CEO Paul Benson said the opening was an excellent opportunity to acknowledge and celebrate the hard work of all the people involved in Casposo’s development from a geological discovery to an operating mine.
“The declaration of a dividend is a clear signal of the Board’s confidence in the Company’s performance as Casposo, our new flagship gold-silver mine continues to ramp up throughput,” he said in the statement.
The 4c a share will be higher than the 3.9c a share paid in total dividends in 2009 and the 2.9c a share paid out in 2008. Because of a loss Troy didn’t pay a dividend in the 2010 financial year.
Troy said the Casposo gold and silver mine in San Juan Province in Argentina was officially opened on May 27.
“Casposo is already a very low cost mine – producing 4,414 oz of gold in April at a cash cost of just US$232/oz Au net of silver credits.
"In April we realised a gold price of US$1481 and thus had a pre-tax margin of over US$1200/oz. A four-day plant shut is planned in June to modify identified bottlenecks in the plant, following which we expect to reach budget throughput of 1,100 tpd, which will further reduce unit costs,” he said.
The ramp up in the plant throughput continued during April, averaging approximately 550 tonnes per day (tpd), compared to 360 tpd in March. In May, throughput continued to increase averaging around 600 tpd with a peak of 910 tonnes in a single day.
April’s production of 4,414oz compares to 2,465oz of gold at a unit cash cost of US$477/oz in March. Silver produced for the month of April totalled 60,862 oz. Using co-product costing the mine produced 5,935/oz gold-equivalent in April at a cash cost of US$531/oz Au_eq.
Casposo produces a gold/silver doré which is transported to Toronto for refining, resulting in a delay of about six weeks between gold production and receipt of the proceeds from sale.
Because of this, Troy has only recently begun to receive proceeds from March production.
At current prices the value of doré in process at the Toronto refinery approximates US$9.2 million.
The company says it has drawn $30m from its debt facility with some $5m remaining undrawn.
"With regular receipt of sales revenue, the project is now generating excess cash and the first repatriation of cash to Australia is expected in June."
Mr Benson said that at current production levels Casposo is expected to continue to generate excess cash and Troy will have no need to draw additional funds from its debt facility.
Troy made a profit of $6.05 million for the half year ended
December 31, 2010, up from the $5.5 million loss for the previous corresponding period.
