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US gold miner Fortitude Gold (OTCQB:FTCO) has increased its monthly dividend by 14%, or 4 cents per share. The company is a gold explorer and producer with its operations based in Nevada. The dividend is payable to shareholders of record on 19 October.

The dividend hike represents Fortitude Gold’s third dividend hike of the year. The company’s 2021 cumulative dividend increase is now 100% and its annual dividend is a substantial dividend for a gold producer.

Fortitude’s business strategy of returning as much cash back to shareholders while balancing the needs of the operations, organic growth and paying taxes transcends the typical gold mining investment. It continues to tap into a pool of investment capital much larger than that of the gold space itself with investors that chase dividends and yield.

“We provide an excellent yield, currently over six percent, rewarding our shareholders and attracting new investors looking for both yield and gold exposure,” noted CEO Jason Reid. “This has been reflected in our positive year-to-date stock performance compared to many of our industry peers.”

Fortitude Gold is targeting projects with low operating costs, high margins, and strong returns on capital. Its strategy is to grow organically, remain debt-free and distribute substantial dividends. Its Nevada mining unit consists of five high-grade gold properties located in the Walker Lane Mineral Belt, with the Isabella Pearl gold mine in current production. Nevada is among the world’s premier mining friendly jurisdictions.

While it already has a producing mine at Isabella Pearl, Fortitude also continues to explore for further gold. It has just announced results from its 2021 Golden Mile delineation program. These included 16.76m of 3.31 g/t gold including 1.52m of 27.50 g/t of gold. There was also an intercept just reported at 6.1m of 5.93 g/t and 24.38m of 1.69 g/t gold.

Significant near-surface gold mineralisation

The results confirm significant widths of near-surface gold mineralisation that could be accessed by an open pit. Mineralisation at Golden Mile remains open along strike and at depth. Fortitude’s vice president of exploration, Barry Devlin, said that the plan currently includes step out holes once condemnation drilling on the sites where the proposed process facilities are to be located is completed. “We look forward to building on this positive definition drilling at Golden Mile,” he said.

Fortitude said that it started a two month infill drill program in July which is helping to further delineate the mineralisation at Golden Mile. The primary goal of the program is to add to the known mineralisation by testing undrilled areas where gold-bearing intercepts have been returned from historic holes.

Numerous high grade gold intercepts

The current program has intercepted numerous high grade gold intercepts in untested open areas and, in Fortitude’s view, has accomplished this objective.

Once the geology team has processed all of the infill drill results, Fortitude says it will target its initial resource at Golden Mile for later in the year. The goal is to make a production decision at the earliest possible point in time, once additional necessary project due diligence has been completed.

The Golden Mile property covers an area of 11,811 acres consisting of 599 unpatented lode mining claims and five patented mining claims in central Nevada’s Walker Lane Mineral Belt. Two established mineralised zones have been drilled by previous operators on the property, with the larger mineralised zone located within the five patented claims.

We have an opportunity for a small number of investors to meet the Fortitude Gold management team in London in the near future. If you are a sophisticated mining investor interested in this opportunity, please contact our events team at brian@thearmchairtrader.com

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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