The head of Newmont Mining Corp said that the price of gold could top $2,000 an ounce. Gold has never reached $2,000 an ounce but last September it hit an all-time high of $1,920.30. Gold rose 0.4% today to $1,731.20 an ounce continuing its gains from last week.
Tue Sep 11, 2012 3:15pm EDT
(Reuters) - The head of Newmont Mining Corp, the world's No 2 gold producer, said on Tuesday the price of gold could top $2,000 per ounce, which would benefit Newmont shareholders whose dividends are linked to the price of the precious metal.
"Up is good," Chief Executive Richard O'Brien told participants at the Denver Gold Forum, as the gold price rose toward six-month highs above $1,700 per ounce.
Noting that Newmont's current annualized dividend of $1.40 per share represented a 3 percent yield based on the gold price, O'Brien said that at $1,800 per ounce, the dividend would be around $2 per share, or a 4 percent yield.
"And at $2,000, which is not unreasonable, the dividend would be $2.70 per share, which is a 5.4 percent yield," he said.
Gold has never reached $2,000. On Sept. 6 last year, it reached an all-time high of $1,920.30.
"If the price goes up, I think you will see us outperform the entire sector," O'Brien told the industry conference in Denver. His comments were webcast and monitored in New York.
Spot gold was up 0.4 percent at $1,731.20 an ounce in New York on Tuesday. The price has risen 2.5 percent this month to its highest level in six months.
Newmont's stock was up 1.5 percent at $52.14 in afternoon trading on the New York Stock Exchange.
Newmont introduced its gold price-linked dividend policy last year to attract investors, who are often more interested in buying physical gold than shares in the companies that mine it.
In July, Denver-based Newmont announced a quarterly dividend of 35 cents per share, payable on Sept. 28. That represents an annualized dividend of $1.40 per share.
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