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Gold Fields swings to profit

Johannesburg - Gold Fields, the South African company that spun off most of its domestic mines last year, swung to a profit in the first quarter after revenue per ounce of bullion increased.

Earnings excluding one-time items were $5 million (R52 million) in the three months ended March 31 compared with a loss of $23 million rand in the previous quarter, the Johannesburg-based company said today in a statement.

Gold revenue rose 1.4 percent to $1,283 an ounce.

Gold Fields has been cutting costs and boosting cash generation after spinning off three mature and profitable South African mines to create Sibanye Gold last year.

The company has been plagued by production delays at South Deep, its one remaining mine in the country, and last year paid Barrick Gold $300 million for three mines in Western Australia to boost production.

The output decrease “was mainly due to lower production at South Deep, Agnew/Lawlers, Tarkwa and St. Ives,” the company said in the statement.

Gold Fields produced 557,000 ounces of gold in the quarter, 6.9 percent less than the previous three months, while all-in sustaining costs rose 1.1 percent to $1,066 an ounce.

Production at South Deep, which Gold Fields said is the “most important value driver” among its assets, will be 10 percent lower than the targeted 360,000 ounces this year because of “temporary disruptions” in the ramp-up plan.

Gold Fields has brought in a team of Australian experts to improve way it’s developing South Deep. - Bloomberg News

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