Johannesburg - Gold Fields Ltd., the South African company that spun off most of its domestic mines last year, cut its reserves of bullion by 11 percent as a lower gold price reduced the amount of ore that’s profitable to extract.
Gold Fields had 52.6 million ounces of mineral reserves in December, compared with 59.4 million a year earlier, the Johannesburg-based company said today in a statement.
The gold price it used to calculate economically viable reserves dropped to $1,300 an ounce from $1,500.
Gold Fields’ depletion in reserves is in contrast to a 46 percent increase in reserves at Sibanye Gold Ltd., the company created when Gold Fields spun off three South African mines last year.
Sibanye used a gold price of 410,000 rand a kilogram, or about $1,166 an ounce to calculate its reserves.
“The 2013 declaration is a reflection of Gold Fields’ restructuring over the past 18 months, during which the group embarked on a fundamental shift in strategy away from an emphasis on ounces of production to a primary focus on driving margins and cash flow,” the company said.
Gold dropped 28 percent last year, the biggest slump since 1981, as an improving US economy prompted the Federal Reserve to ease bond buying, reducing the precious metal’s demand as a haven for investors. - Bloomberg News