Gold Fields flags slight drop in production

Gold Fields’s South Deep mine operations in Johannesburg. Picture: Simphiwe Mbokazi (ANA)

Gold Fields’s South Deep mine operations in Johannesburg. Picture: Simphiwe Mbokazi (ANA)

Published Nov 4, 2022


Gold Fields has flagged a slight drop in production, despite its South Deep mine in Gauteng delivering a strong performance.

In its operational update for the quarter ended September 30, 2022, the group, which operates gold mines across three continents, said yesterday that gold production recoiled by 1.5% year on year in the reported period and 3.9% quarter on quarter to 597 000 ounces.

However, the South Deep mine, near Johannesburg, delivered a strong quarter, with gold production up 2.32% to 87 900 ounces.

Gold Fields CEO Chris Griffith said: “South Deep has been tracking well against its production targets throughout the year. As a result, the team has revised gold production guidance to 321 500 ounces for the year ending December 2022.”

The group’s overall guidance remains unchanged at 2.25-2.29 million ounces at all-in-sustaining costs of $1 140-$1 180 per ounce, (R20 925-R21 659 per ounce).

It remained in a strong financial position during the third quarter of 2022, there was an increase in the net debt balance, including leases, to $997 million (R18 billion) at the reported period from $851m on June 30, 2022, mainly due to the interim dividend payment of $151m.

“The net debt balance (excluding leases) increased to $603m from $451m at the end of June 2022,” it said.

In the third quarter of 2022, construction activities at Salares Norte were again impacted by Covid together with severe weather conditions that flowed over from the second quarter.

It said $80.5m was spent on the project during the quarter, comprising mainly $70.9m in capital expenditure, $3.5m in exploration, a $3.7m investment in working capital and a realised loss of $3.7m on the forex hedge. A total of $253m was spent on the project during the nine months that ended September 30, 2022.

On its Yamana transaction, Gold Fields received approval for the transaction from the government of Canada under the Investment Canada Act.

“We continue to make good progress on the transaction,” Griffith said.

Some shareholders had expressed concern that Gold Fields’ proposed acquisition of Yamana was too expensive, too dilutive of Gold Fields shares and would negatively impact returns for existing shareholders. Under the deal, Gold Fields has offered 0.6 of one of its shares for each Yamana share.

The group will know the outcomes as the voting on the deal will take place on November 22, during the firm’s annual general meeting.

Gold Fields shares traded in intraday trade at R137.61, 3.65% lower on the JSE yesterday. They have decreased by 33.06% in the past six months.