File picture: Phill Magakoe
File picture: Phill Magakoe

Gold Fields hit by R3.5bn impairment at South Deep mine

By Siphelele Dludla Time of article published Feb 14, 2018

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JOHANNESBURG - Gold Fields said on Wednesday it had taken a R3.5 billion, or U.S.$278 million, impairment charge at its South Deep mine due to a below-forecast gold price and a slower ramp up of production for the year ended 31 December 2017.

The company reported headline earnings per share of  24 U.S. cents down slightly from 25 cents in 2016. Net loss for the year was four cents per share, compared with a profit of 20 cents per share in 2016.

Gold Fields chief executive Nick Holland, said 2017 was a year of two halves for South Deep, with the first quarter negatively impacted by two fatal accidents and three falls of ground in the higher grade section of the mine which resulted in a deferral of mining higher grade areas.

Production at South Deep decreased by three percent from 290,400 ounces in 2016 to 281,300 ounces in 2017, Holland said.

"South Deep was unable to recover from the tough first quarter of 2017 which was impacted by two fatalities and three falls of ground in the high grade corridors, with production for the year 11 percent below original guidance ... as flagged in third quarter of 2017 operating results in October 2017," he said.

He said while good progress has been made on the technical front at South Deep, with the implementation of the mining method receiving positive feedback from the Geotechnical Review Board, the execution of the full mining value chain remained sub-optimal."

Gold Fields declared a final gross dividend of 50 South African cents per share, payable on 12 March 2018, giving a total gross dividend for the year ended December 2017 of 90 SA cents per share,  compared with 110 SA cents in 2016.

- African News Agency (ANA)

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