African Barrick Gold - a dividend paying gold stock?

Concisely, yes African Barrick Gold is a dividend paying gold stock. But is it one worth investing in? 

This kind of stock doesn't normally suit my requirements, normally I invest in large caps with a strong dividend policy and positive dividend growth but it caught my eye a while ago when I was looking for exposure into gold. Gold stocks themselves have greater leverage to the price of gold compared with gold itself. When the price of gold goes up, hopefully the price of gold stocks goes up by more but, as has been seen when the price of gold pulls back, gold equities have the potential to collapse.

I dipped into African Barrick Gold a while ago on a dip in price and managed to make 40%. The price again retraced and I took another position. The price continued to slide. 

Part of this was due to the deal with the Chinese Government falling through alongside the issues in Cyprus which caused gold to take a pounding when they announced that they were to sell part of their gold reserves. African Barrick Gold were also having problems with extraction and were failing to achieve targets. They also have a high cost of extraction compared to their peers which means any reductionism the price of gold hurts their margin.

They are currently (well on last years dividend) paying a dividend of 16.2 cents per share which equates to around 10.5p per share. On today's price that gives a hefty yield of around 7%. Their dividend policy to date (they have only existed for 3 years) is reasonable and we've seen no reduction yet however their dividend cover is now less than 1 (their dividend is greater than their earnings). This is never good and creates all kinds of uncertainty for the future.

So whilst this pays an attractive dividend currently nothing is certain with the future and I think this will get slashed unless there is a big turnaround with the price of gold, the output volume and their production costs. As a growth stock at these levels it might be worth a punt for those with an appetite for risk but as a dividend stock it's to avoid (I continue to hold), I just don't feel the dividend policy will held be if the share price and other factors don't see a serious turn around.