GORO cut their dividend by 50% due to lower gold prices. They have been a leader in monthly dividends from gold mining. Wall St. Journal article "Gold rally may lose stearm" (by Tatyana Shumsky page C3) today predicts gold going lower.
GORO is primarily a silver producer. Silver falling from $32 to $23-24 is deeper than gold going from $1600 to $1475. As for the WSJ article, its all MSM PROPAGANDA. Did you learn about William Randolph Hearst in school and the "Yellow Press?" A Zionist Jewess writes a negative gold article in MSM? Is this newsworthy? These gold hating bank/govt paid trolls are pathetic.
GORO example today shows that dividend cut is not necessarily bad for stock price; though GORO is unique in too many respects and can hardly be used as an yardstick.
At current yield IAG pays out about $90M/year in dividends. Strictly speaking they have money for this year to continue, but still it is not small money, especially for this environment. It is up to management to decide how they cut fat for these lean times. As of now many PM miners announce specific programs to cut expenses. To my taste today’s announcement by EXK included the best: 10% cut in management/board compensation.
IAG was probably the first company announcing austerity program; few months ago it told about $100M cut in 2013 expenses. It is possible that more cuts will be added later. Generally speaking, every reasonable cut makes company stronger in long run.
I never like to see a dividend cut. However, when Newmont cut theirs last week, I was pleased with the announcement. They got it done early, and left some meat on the bone. Had they waited a quarter or two, they may have had to cut a lot deeper to get their cashflows healthy again. I was pleased with GORO's cut as well.
These are prudent moves to keep their cashflows from getting them in trouble. I would expect a similiar cut from IAG in the near future as well. Newmont and GORO got a neutral to positive response from the street about it, signaling its ok for IAG to do it as well.
I think anyone holding these stocks at this point are firm believers in the yellow wonder and are in it for the long haul upward. I am, and I want to see my company healthy before I see if pursue an unsustainable dividend policy.