So in effect, the managements at the bigger gold mining companies (which are having difficulties growing) are trying to move away from attracting growth-only investors to enticing investors that may be interested in high dividend yields. This is a logical move.
But rising costs at mining projects may put a crimp into the plans of gold mining companies' as they may not have the cash to raise dividends much. And they have done a poor job of raising dividends for their shareholders to date. In 2011, the dividend yield for gold producers globally was less than half the average for the mining sector as a whole at a mere 1.3%. Their yields are below that of the base metal mining sector and the energy sector.
It seems like management for these precious metal companies have the similar emotional response shareholders have when they are in a winning position. When investors' brains have experienced a winning streak and are happy, they automatically go into preservation/protection mode.
What does this mean? It means management is going to tighten up their spending to stay cash rich as they do not want to give back the gains during a time of increased uncertainty. Smaller bets/investments are what the investor's brain is hard wired to do, which is not always the right thing to do...Looks like there is still a lot work to be done by gold mining companies' to improve returns to their shareholders. But it is also important to be aware that when physical gold truly starts another major rally, these gold stocks will outperform the price of gold bullion drastically for first few months.