Sally Malay increases resource, plans maiden dividend

Investors in Sally Malay Mining Ltd are likely to receive a maiden dividend this year on the back of solid profit growth for the nickel miner in the past 12 months.

Speaking at Kalgoorlie's Diggers & Dealers mining conference today Sally Malay managing director Peter Harold also revealed that the mine life of the company's namesake project had been extended by about a year following an increase in its reserves.

The 23 per cent reserve increase, or about 7,000 tonnes of contained nickel, at its Sally Malay project 240 kilometres south of Kununurra came after the nickel producer revealed an initial probable ore reserve for its Kambalda Deacon ore body.

Sally Malay said its Deacon ore body had an initial probable ore reserve of 1.7 million tonnes at a grading of 2.5 per cent nickel for 43,000 tonnes.

"This reserve represents the conversion of 1.4Mt of Indicated Nickel Resource at a grade of 3.20% Ni for 45,000 tonnes," the company said.

In his Diggers & Dealers presentation Mr Harold revealed that the miner's net profit had increased 460 per cent in the past 12 months, up from $16 million last August to between $90 million and $100 million.

DJ Carmichael & Co associate director Mike Munro said Sally Malay's decision to pay-out a dividend was good news for shareholders but it indirectly highlighted fully priced or expensive projects and or competitors.

"It shows that projects are fully priced and they don't see the need to pay top of the market prices for them," Mr Munro said.

"This says that at the moment (company) share prices are too high or people want too much for their assets and Sally Malay is not willing to buy them so they will give some money back to their shareholders."