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Gold Fields reaches production and cost guidance in 2021

GOLD Fields, which operates gold mines across three continents, said it had benefited from a solid operational performance in the year to end-December 2021, achieving both production and cost guidance, bolstered by higher gold output and gold prices. REUTERS/Siphiwe Sibeko

GOLD Fields, which operates gold mines across three continents, said it had benefited from a solid operational performance in the year to end-December 2021, achieving both production and cost guidance, bolstered by higher gold output and gold prices. REUTERS/Siphiwe Sibeko

Published Feb 18, 2022

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GOLD Fields, which operates gold mines across three continents, said it had benefited from a solid operational performance in the year to end-December 2021, achieving both production and cost guidance, bolstered by higher gold output and gold prices.

The world’s sixth-largest producer reported a 6 percent rise in normalised earnings to $929 million (R13.9 billion) for the period.

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Gold production rose 5 percent to 2.34 million ounces and was at the upper-end of the guidance range of between 2.30 million and 2.35 million ounces.

Revenue was up 8 percent to $4 195bn due to the higher gold sold and higher gold price received.

“Basic earnings for 2021 increased by 9 percent to $789m or $0.89 per share, versus $723m or $0.82 per share in 2020,” it said.

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Headline earnings for 2021 increased by 22 percent to $890m or $1 per share, compared $729m or $0.83 per share in 2020.

The average dollar/gold price, excluding the Asanko joint venture in Ghana, rose by 2 percent to $1 794/oz in 2021, while the average rand/gold price dropped 8 percent to R851 102/kg.

Gold Fields also declared a 260 SA cents per share dividend.

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“This takes the total dividend declared for the year to 470 South African cents per share for the year (2020: 480c),” Gold Fields said.

The company said 2021 was a year of big capital expenditure, driven by an increase in project capital expenditures at Salares Norte.

“Despite this higher capex, Gold Fields generated cash flow from operating activities less net capital expenditure, environmental payments, lease payments, and redemption of Asanko preference shares of $463m (2020: $631m). Adjusted free cash-flow from the operations for the year, which excludes project capital, was $913m compared to the $868m generated in 2020,” the mine’s management said.

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Net debt stood at $969m after a $100m reduction.

“This compares with a net debt balance of $1 069m and a net debt to adjusted Ebitda ratio of 0.56x at the end of December 2020. Excluding lease liabilities, the core net debt was $553m at the end of the financial year 2021,” the company said.

Gold Fields chief executive Chris Griffith said: “Despite the challenges experienced during 2021, Gold Fields had a solid operational performance, achieving both production and cost guidance for the year.”

South Deep, Gold Fields’s last remaining SA asset, was the stand-out performer during 2021, with production exceeding the original guidance provided in February 2021 despite the Covid-19 challenges. The company said South Deep’s gold output of 293 000 ounces was 29 percent higher than forecast.

“Our Salares Norte project remains largely on track, with the project achieving total completion of 63 percent at the end of the year,” Griffith said.

Salares Norte is Gold Fields’s $860m project, located in the Atacama region of Northern Chile. It is scheduled to be completed in late 2022, with the first gold production in early 2023.

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