Newmont Mining Corp., which initially announced a link between its dividend and the price of gold, said Monday its annual dividend could rise to $4.70 if gold hits $2,500.

Newmont will continue to link its quarterly dividend rate to changes in the gold price, but it will also provide an additional step up of 7.5 cents per share when the company's realized gold price for a quarter exceeds $1,700 per ounce and a further step up of 2.5 cents per share -- 10 cents in total compared to the existing policy -- when the company's realized gold price for a quarter exceeds $2,000.

At average realized gold prices below $1,700 per ounce, the current dividend policy remains unchanged. Newmont's quarterly gold price-linked dividend payments are based on the company's average realized gold price for the preceding quarter.

In April, Newmont launched the industry's first and only dividend policy linked directly to the realized gold price, said CEO Richard O'Brien. Newmont's cash flow and balance sheet strength in the current metal price environment provide us with the flexibility and strength to simultaneously fund our internal growth pipeline and return meaningful cash to our shareholders.

Subject to board approval, the first quarterly dividend under the enhanced policy is expected to be payable on Dec. 30, to shareholders of record on Dec. 8, and will be based on the company's average realized gold price for the third quarter.

Shares of Newmont rose $1.42 percent, or 93 cents, to $66.65 in midday trading.

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