Gold Fields expects its production for the first quarter of 2024 to be lower, dragged down by challenges at its South Deep operation in South Africa, although it is maintaining its full-year guidance at between 2.33 million ounces and 2.43 million ounces.
Bullion output for Gold Fields for the 2024 first-quarter period was also set to be impacted by weather-related events in Australia and Peru, the company said on Tuesday.
“Operational momentum at South Deep was impacted by the fatality on January 2, 2024. This was compounded by reduced stope access, due to increased backfill rehandling, and slower stope turnaround in current destress cuts,” it said in an update.
As a result of this, Gold Fields’ gold production for the period will amount to between 460 000 ounces and 470 000 ounces, excluding the Asanko mine, which has just been sold off to Galiano Gold.
Gold Fields is also anticipating the lower production for the period to affect its costs for the quarter. Its all-in sustaining costs for 2024 are expected to range between $1 410 (R26 785) per ounce and $1 460 per ounce while all-in costs are expected to be as high as $1 650.
The expected sustaining capital expenditure for 2024 for Gold Fields includes about $132 million for the St Ives renewable power project. Excluding this project, which accounts for approximately $60 per ounce, Gold Fields’ ranges for all-in sustaining costs are expected at between $1 350 per ounce and $1 400 per ounce as well as at between $1 540 per ounce and $1 590 per ounce for all in costs.
The commencement of gold production from Gold Fields’ Salares Norte Project in Chile has boosted the company’s production profile. The Salares Norte mine delivered its first gold ounce on March 28, 2024, representing “a significant milestone” for the operation.
It has taken Gold Fields 13 years to commence gold production from the mine since discovery. It has had to take the mine through exploration and development over the 13-year period.
The total capital cost for the Salares Norte project has remained in line within the $1.18 billion to $1.2bn guidance range provided in February.
Gold Fields said the ramp up of the project to steady state production was progressing “with gold equivalent production of 250 000 ounces at an all-in cost of $1 790 per ounce – $1 850 per ounce expected” for the remainder of the year.
Production volumes from the new mine for 2025 are expected to be 580 000 ounces.
“We are incredibly excited to have reached this milestone and delivered first gold in line with the updated project schedule, as we committed in December 2023. Salares Norte is a world-class project with one of the industry’s lower cost profiles and a payback period of less than three years at current gold prices,” said Gold Fields CEO Mike Fraser.
He added that the Salares Norte “presents significant growth and value uplift” for Gold Fields’ portfolio and “adds meaningfully to the cash flow profile” of the company.
At its South Deep operation in South Africa, Gold Fields was now undertaking actions to address the operational constraints encountered in the first-quarter period under review. These had started to yield positive results, Gold Fields said.
Although all of Gold Fields’ Australian operations were impacted by recent severe weather conditions, its Gruyere project had been worst affected, with rainfall in the region resulting in the damage and closure of the Laverton Shire roads, which provide access to the mine.
Gold Fields suspended mining operations at Gruyere last month while the plant continued to process lower-grade stockpiles until the end of March.
“The access road remains closed with no firm date on when it will reopen. Gruyere has opportunistically brought forward a three-day shutdown originally scheduled for April 2024 and is assessing options to bring fuel and supplies in via alternative routes to enable a resumption of the operations,” the company said.
First-quarter 2024 production from Gruyere is, therefore, expected to be around 64 000 ounces, subject to minor adjustments.
BUSINESS REPORT