Ann: Production Update Q3 March 2018, page-31

SBM will produce around 380 K Oz this financial year (range up to 392 K Oz according to latest reports if I recall correctly). AISC should be around 950 AUD. Very simply (based on 1300 USD Au), that generates operating cash flow of around 290 M$ pa. Competing for that cash is exploration, expansion, investments (e.g. PEX, CYL etc.), dividends (and tax). Cash inflow is excellent and underpins opportunity..

Over the last 3 quarters, SBM has added around 100M to its cash balance (after 41M$ of dividends, 16M investments and 31M$ tax). Cash balance at end Q3 was 262M. That is a handy some of cash to progress growth - and still grow the divi.

I don't think there is any doubt that shareholders will see a final dividend higher than last years 6c. That 6c cost the company 25M cash (and increase in shares). The divi can / should also grow to maintain yield with share price growth. The most recent 4c cost 16M (plus shares). It would very reasonable to expect 8 to 10 cps this time around (and no surprise if higher). That would mean total dividends in the 12 to 14 c range for full year - which would be a yield range of 2.4 to 2.8% for $5 share price (which is week/s away IMO). That level of divi is probably enough - as long as something else is going on. The company could comfortably afford more - but (as a long term holder) I would rather see a balance between further investments to grow the company (beyond Gwalia and Simberi). Strategies with CYL and PEX are particularly pleasing to see - but I think SBM can look harder - and further afield (in Aust) for green field value - without paying the earth.

For some - the dividend represents more than they paid for the stock back in 2014!

Just my thoughts. Interested in other views - DYOR!