At a time when several companies are cutting or suspending dividends, Barrick Gold (GOLD 0.17%) just gave investors in the precious metal stock another reason to smile: The gold mining giant has increased its dividend by 14% as cash flows surged in its second quarter, buoyed by a rallying gold price.

Gold has shot up in recent weeks amid the COVID-19 pandemic and global uncertainty, even topping the $2,000 mark. With every dollar-price increase in gold, gold miners like Barrick can earn wider margins.

Gold nuggets placed on a chart that includes the word gold

Image source: Getty Images.

On the morning of Aug. 10, Barrick Gold not only delivered a solid set of second-quarter numbers, but also rewarded shareholders with a 14% increase in its dividend. Chief Financial Officer Graham Shuttleworth was quoted in a company press release as saying:

The Board believes that the dividend increase is sustainable and is reflective of the ongoing robust performance of our operations and continued improvement in the strength of our balance sheet, with total liquidity of $6.7 billion, including a cash balance of $3.7 billion as of the end of the second quarter, and no material debt repayments due before 2033.

Despite a 15% drop in gold production, Barrick's gold sales shot up 45% year over year. Barrick generated $1 billion in operating cash flow and half as much in free cash flow in Q2 as its average realized gold price increased to $1,725 per ounce from $1,317 an ounce in the year-ago quarter. Its realized price was up nearly 9% sequentially. The strong cash flows and liquidity encouraged management to increase the dividend.

Barrick has grown its dividends substantially in the past year or so. At the time of its merger with Randgold Resources in September 2018, Barrick was paying out $0.03 per share in dividend. With the latest increase, its dividend has more than doubled to $0.08 per share.

Barrick's dividend increase comes at a time when investors in the stock are already minting money: The stock is up a whopping 56.9% so far this year and yielding 1% as of the time of this writing, underpinned by the miner's strong operating performance and the persistent rally in the gold price.