By Barry Fitzgerald
NEWCREST and BlackRock - the world's biggest mining fund manager and Newcrest's biggest shareholder - will have to agree to disagree on the reasons why gold stocks have lagged behind the surge in gold prices.
BlackRock chief Evy Hambro said earlier this week the disconnection between gold's rise and gold share prices reflected meanness by the gold companies when it came to their dividend payout ratios.
Newcrest managing director Greg Robinson has different ideas. Speaking after the group's annual meeting in Melbourne yesterday, Mr Robinson agreed that there was a gap, maybe as much as 15 per cent to 20 per cent across global gold stocks. But rather than blaming dividend yields, he pointed to more structural issues.
''Short-term money, when it is attracted to gold, goes into physical [gold] and exchange-traded fund markets. But I think that when you are looking at the medium to longer term, you find that stocks will reflect longer-term [gold] prices,'' Mr Robinson said.
''If prices hold - and people are forecasting higher prices - you will see the stocks recalibrating in price.''
Mr Robinson defended Newcrest's dividend record. For the June year, it paid an ordinary dividend of 30¢ a share and a ''special'' dividend of 20¢ a share. The 50¢-a-share total doubled the 25¢-a-share total for 2010.
''We are at the higher end of dividend payments by gold companies,'' he said. ''We are roughly at a 1.5 per cent yield with that normal and special dividend that we paid - and that would be in amongst the top in the gold industry.''
The annual meeting was a low-key affair, the highlight being Newcrest securing one of the highest ''yes'' votes (96 per cent) in the annual meeting season for the adoption of its remuneration report, despite the urging of the Australian Shareholders Association for a protest vote.