RE:dividendAurum1983 wrote
Any chance that they will cancel/suspend the dividend?
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It all depends on where copper prices go from here. At the current copper price of around $3.60 ARG should have annual EBITDA of aprox. $35 million US or aprox. $42 million Cdn. From that we have to subtract income taxes, interest etc. They should be netting aprox. $32 million Cdn. The 3 cent quarterly dividend costs ARG aprox. $20 million Cdn. per year. If copper prices stay at these levels they should be able to continue with the current dividend as they are still banking aprox. $1 million Cdn. per month after paying the dividend. They should also have enough money to buy back $1 million Cdn. per month in shares. They also have aprox. $53 million US in cash and $27 million US in debt so they have a nice cash cushion and the loan repayments are spread out over a few years.
The price of copper makes all the differance. At $3 copper they are basically breaking even. At $4 copper they should have EBITDA of aprox. $54 million US. That is a lot of money for a company with
a market cap. of under $200 million cdn.
Personally i sold some shares awhile back around the current shareprice and have been slowly buying back some of those shares as i have faith that copper prices will rebound as they have been doing and i am happy to recieve my 10% plus dividend every quarter.
Good luck to all.