With mining companies generating massive amounts of cash this year, the idea of returning capital to shareholders is getting more traction and Peter Marrone is one of the big believers.

"I believe there is a universe of investors that would love to be invested in these commodity-based companies, especially if they have growth," the chief executive of Yamana Gold Inc. said in an interview.

"But they can't invest in them until you have an entry-level event, and that's the dividend."

The big gold companies reported huge cash flows in their quarterly earnings this week as prices leapt above US$1,000 an ounce. And some of those companies expect to be generating much more cash as new mines come onstream.

That spurred Yamana to triple its annual dividend to 12¢ a share. Barrick Gold Corp. hiked its dividend 33%, and Kinross Gold Corp., which just recently introduced a dividend, indicated Wednesday that its payout could rise again.

Agnico-Eagle Mines Ltd. also raised its dividend 50% last December.

Those four gold companies, along with Goldcorp Inc., are sitting on a combined total of more than $4.4-billion in cash (and Barrick spent nearly US$2.5-billion of cash in the quarter on acquisitions).

Paying dividends still does not sit right with some mining investors, who think the companies should be investing to grow their production.

But as people begin to believe that this commodity cycle could last a long time, they understand that many miners will have more cash than they need. Returning it to shareholders is seen as a logical option.

"To be able to run these companies like [other] businesses, where you base your business model on trying to give a return to your shareholders other than just capital appreciation, is a good thing," said Kerry Smith, an analyst at Haywood Securities.

He added that he never wants to see mining companies getting complacent with dividends, because metal prices can change very fast. But with so few investment opportunities on the horizon right now, it makes sense.

"I don't think any of these guys are paying out so much cash that they couldn't do a deal if they wanted to. They'll keep a little bit around for when those opportunities emerge, and they will," said Rick de los Reyes, a buy-side analyst at T. Rowe Price Associates.

However, the company that has received the loudest calls to pay out cash is resisting them:HudBay Minerals Inc.

Winnipeg-based HudBay had $780-million in cash at the end of the first quarter, prompting one analyst to say it "will have to" pay a special dividend.

But new chief executive Allen Palmiere considers it a last resort as HudBay plans to fast-track its Lalor Lake discovery into production and looks for potential acquisitions.

He noted that commodity prices have stayed very strong but equity values have fallen off, which could create investment opportunities. But it is impossible to take advantage if you return too much cash to shareholders, especially since raising money on the credit markets is so tough right now.

"If you distribute cash, that's fine. That's a one-time impact," he said in an interview.

"But it doesn't create long-term value. And we've got significant opportunities to do just that in the [Flin Flon] greenstone belt."

He also noted that HudBay is generating less cash than it was last year because of weaker zinc prices.