Fresnillo pays out its dividend early to avoid new tax charge

Suzie Neuwirth
FTSE 100 miner Fresnillo yesterday said it is issuing part of next year’s dividend early, which will spare shareholders a new Mexican tax charge.

The firm said that it could pay out the $165m (£102.2m), equating to 22.39 US cents per share, after confirming that the company has a strong balance sheet and is well placed to finance spending on its projects.

“We’d speculate that this was related to the new tax laws due to come into effect next year, and specifically withholding tax on dividends,” said Kate Craig, analyst at Liberum Capital.

Distributing the dividend payment early could save shareholders around $16.5m in future taxes, JP Morgan said.

The precious metals miner also said that it has hired Roberto Diaz as chief operating officer.

He previously worked at Penoles, the mining company which owns 75 per cent of Fresnillo, and has served as Fresnillo’s vice president of operations and vice president of project development.

A temporary ban on Fresnillo’s use of explosives at certain mines was expected to be lifted this week, but has now been pushed back to early November, at which time it will provide an update on full-year gold production guidance.

The company’s shares closed up 2.8 per cent at 1,022p.