Cadence Capital Limited returned a gross performance of +2.7% in August, compared to the All Ordinaries Accumulation Index which was up +3.2% for the month. The top contributors to performance during August were West African Resources, Equinox Gold, New Gold, Kingsgate Consolidated, Pantoro, Endeavor Mining and Turaco. The largest detractors from performance were Clarity Pharmaceuticals, James Hardie Industries and QBE Insurance Group.
In multiple past webcasts we have discussed that the AUD gold price had been rising, and that because gold mining companies are leveraged to the gold price their share prices should have outperformed gold price movements. At that point they had underperformed, and this continued for most of 2024. We have recently seen gold company share prices “catch up” to the gold price. This continued in August with the All Ordinaries Gold Index up 20% while the Australian dollar gold price was up 3%. The seven top contributors listed above are all gold mining companies.
Equinox Gold and New Gold both performed particularly well in August with share price rises of over 40%. Equinox Gold is on track for first gold at its Valentine mine in Canada this quarter, which is expected to produce 180,000 ounces of gold per year when operating at capacity. New Gold recently reported record quarterly free cash flow which was driven by a higher gold price and record production at its Rainy River mine.
Year-End Dividend
On 21 August 2025, the Company announced a 3.0 cents per share final dividend, partially franked at 50%, bringing the full year dividend to 6.0 cents per share. This full year dividend equated to an 8.8% yield or a 10.7% gross yield (grossed up for franking credits) based on the share price of $0.68 per share on the day of the announcement. Importantly this equated to a 7.5% dividend yield or a 9% gross yield (grossed up for franking credits) based on the pre-tax NTA of $0.805 on the day of the announcement, due to the Company shares trading at a discount to NTA. After paying this dividend the Company still has around 6.5 cents per share of profits reserves to pay future dividends.
The Ex-Date for the dividend is the 15 October 2025. The payment date for the dividend is the 31 October 2025.
The dividend re-investment plan (DRP) will be in operation for this final dividend. We would encourage shareholders to participate in the DRP as an efficient mechanism to add to existing holdings in the fund. The DRP will be priced at the weighted average share price over the relevant DRP pricing period. The Company will continue to buy-back the shares it issues under the DRP when the CDM share price is trading at a discount to the Pre-Tax NTA.
If you are not registered for the DRP and you would like to participate, please contact Boardroom on 1300 737 760.
Year-End Webcast
To watch CDM’s recently released Year-End Webcast please click here. In this year-end webcast, Karl Siegling firstly provides an update on the Company’s full year results, the 3.0c final dividend, the current composition of the portfolio and the Company’s discount to NTA. He then discusses price earnings expansion before looking into the company’s investments in the gold sector. He then discusses the following three investments in some detail, Endeavor Mining (EDV CN), Amplitude Energy (AEL AU) and Samsung (005930 KS) before closing with the outlook for the rest of the year.
Discount to NTA
For the first 8 months of this calendar year, after adjusting for dividends, CDM’s Pre-tax NTA has increased 9% whilst its share price has increased by 2%. CDM is trading at a pre-tax NTA discount of around 18% whilst holding some cash balances. CDM is currently trading at its third highest discount in 19 years, only trading at larger discounts during the GFC (41% discount) and COVID-19 (43% discount) market moves. The current portfolio can be purchased for 82 cents in the dollar.
The Company has been buying back its own stock at a discount to NTA in the CDM on-market buy-back program. Directors have also been adding to their CDM shareholdings at a discount to NTA by participating in the DRP and by buying shares on-market.
Fund NTA
Fund Performance
Fully Franked Dividends Declared Since Listing
After paying the 3.0c final dividend the company will have around 6.5 cents per share of profits reserves to pay future dividends.
Historic Portfolio Exposure
Portfolio Sector Analysis
Portfolio Market Capitalisation Analysis
News
To view all previous Cadence webcasts and interviews please visit the Media Section of the website.
We also encourage you to visit our 52 books you should read before buying your next stock page on our website. We have compiled a list of books/ documentaries that have influenced our investment style or helped provide insight into the Cadence investment process.
