Trans-Siberian Gold 2Q 20 - Good results with an all-time high declared dividend payout
Today, Trans-Siberian Gold published its 1H 2020 IFRS financial results, which broadly stood in line with our expectations on revenue as well as EBITDA and net income, once adjusted for two one-offs. On a positive note, in the 1H 2020, the company received a net cash income tax credit of USD 1.4 mn, which supported net operating cash flow. Together with a smaller-than-expected capex, the latter delivered a strong free cash flow of USD 8.6 mn, which is only marginally below the full-year 2019 figure of USD 9.1 mn. A cherry on the pie was an announcement an all-time high interim dividend totalling USD 7 mn (USD 0.08 per share) and securing an attractive dividend yield of 6.7%. All in all, we treat the results as positive for the stock and thus expect an immediate share price reaction.Trans-Siberian Gold is a U.K.-based resources company. Co.'s operations are focused on gold production and exploration and development activities within the Russian Federation. Co.'s wholly owned subsidiary, ZAO Trevozhnoye Zarevo holds mining license in the southern part of the Kamchatka peninsula, including the Asacha gold deposit, an epithermal gold/silver deposit located on a tertiary volcanic arc typical of ore systems found along the Pacific Rim. As of Dec 31 2016, the main ore zone at Asacha consisted of five steeply dipping veins. Veins are characterized by low sulfidation quartz-adularia occurring predominately in dacite domes.
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