Resource News
OZ Minerals dangles a dividend carrot to investors
By resourceINTEL · February 25, 2010 · 8:44 am · Leave a Comment
OZ Minerals is looking to reward investors with a dividend this year as it continues to plan expansion beyond being a one-mine company and spend some of the $1.08 billion in cash it is holding.
Chief executive Terry Burgess, revealing the annual results yesterday, said the Melbourne-based miner was still focused on implementing the strategy he introduced three months ago, which included targeting copper acquisitions in low-risk regions.
The miner reported a $517.3 million loss for 2009, which was in line with the guidance given earlier this month for a loss of between $500m and $520m. It compares with a loss of $2.5bn in 2008 when the company booked severe writedowns to the value of its mining assets.
The miner posted no final dividend, in line with the prior year, but Mr Burgess said the board would review dividend payments ahead of the first-half result in the middle of the year.
Deutsche Bank analyst Paul Young upgraded OZ to a “buy”, highlighting it was low-cost, low-risk, had organic growth, should begin dividend payments in 2010 and was on the lookout for copper joint ventures.
OZ was left with its flagship Prominent Hill project in South Australia when China Minmetals purchased the remainder of the company last year in a $US1.3bn deal that saved OZ from closing its doors.
“It was a very strong year out of Prominent Hill and we are pleased with how it has progressed,” Mr Burgess said.
OZ is carrying out a feasibility study on an underground mine at Prominent Hill, which is expected to be complete by June.
“Regional exploration around Prominent Hill is the key activity for the exploration team and the business development team continues to look for opportunities and they will only be developed if we can see there is value out there,” Mr Burgess said.
Deutsche’s analysis of the result said the underground potential at Prominent Hill appeared attractive. “We believe OZ remains a strong defensive base metal play in the Australian copper sector due to the strong balance sheet and low cash costs,” Mr Young said…read more at The Australian
