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GOLD Fields was set for adjusted gold production of between 2.2 million to 2.25 million ounces for its 2020 financial year following a strong recovery in the third quarter.
Production totalled 537,000 oz in the quarter ended-September, 7% higher year-on-year, and featured 63,000 oz from South Deep.
South Deep, Gold Fields' remaining South African asset, was among the most affected by Covid-19 lockdowns. The mine, which has underperformed for years until recently, was generating "meaningful" cash flow in the current gold market, said the group in an update.
There were only 26 active cases of Covid-19 on its premises having so far recorded three deaths from the disease. It had tested 41,273 employees registering 1,745 positive cases.
All-in sustaining costs (AISC) for the group's mines was expected to come in between $960 to $980/oz for the year. This compares to previous guidance of $920 to $940/oz which had also assumed full-year production of 2.28 million to 2.32 million oz.
Gold Fields adjusted its production and AISC guidance in August.
AISC for the third quarter was $964/oz, a 2% increase year-on-year.
Net debt, including leases, at the end of September totalled $1.16bn which was slightly lower than the $1,24bn recorded end-June. Net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) was 0.68x compared to a ratio of 0.84x at end-June.
The group said it was slightly ahead of schedule in the construction of its 450,000 oz/year, $860m Salares Norte project in Chile which it decided last year to finance alone. Some $78m had been spent on the project to date.
Gold Fields alerted shareholders to the likelihood that capital spending in its 2021 financial year would be higher than previously.
In former financial years, the group has tended to spend at the lower end of a $250m to $300m capital spend range but for 2021 there was a need to replace ounces in order to preserve production from its Australian base at about one million oz.
The third quarter commentary, signed off by CEO, Nick Holland, made no mention of whether the board had been progress in finding a replacement CEO. In August, Holland announced his decision to resign from the company in 2021 after reaching the mandatory retirement age of 63 years.
Commenting on South Deep at the firm's second quarter results, Holland said it might be possible to double the mine's production to 400,000 oz/year.
thinks the improvement in the fortunes of its South African mine, South Deep, might lead to a doubling in annual gold production to 400,000 ounces. "We are going to keep our feet on the ground, but South Deep has made tremendous strides," he said.
"We can do better than 200,000 ounces a year. The process plant is doing 100,000 tons a month but we have got the ability to double that," he said.