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Gold Fields settles into 'new normal' post Covid-19 -

Thursday, 12 November 2020

Gold producer Gold Fields produced 557 000 oz of gold in Q3, 2020, up 7% year-on-year (or 1% quarter-on-quarter), as its operations recovered from the Coronavirus pandemic.

Gold Field's South Deep gold operation in South Africa, which was significantly impacted by the COVID-19 pandemic and related lockdown restrictions during Q2, 2020 has slowly ramped up production as labour numbers returned to normal, while adherence to COVID-19 protocols has continued in order to manage the pandemic.

South Deep had a strong recovery after the disrupted Q2 2020, producing 64 900 oz in the September quarter, up 63% from 39 800 oz in the June quarter due to an increase in volume mined.

All-in cost decreased by 21% to US$1 075/oz) in the September quarter from $1 231/oz in the June quarter mainly driven by higher gold sold, partially offset by higher cost of sales before amortisation and depreciation and higher capital expenditure.

Underground reef grade mined decreased by 6% to 6.37 g/t in the September quarter from 6.74 g/t in the June quarter as a result of an increase in destress mining as well as mining lower grade stopes compared to Q2. The reduction in broken grade is in line with the mining sequence. Reef yield increased by 5% to 6.07 g/t in the September quarter from 5.80 g/t in the June quarter.

Development increased by 56% to 995 m in the September quarter from 638 m in the June quarter, while destress increased by 83% to 10 533 m2 in the September quarter from 5 751 m2 in the June quarter. These increases are mainly as a result of production ramp-up post COVID-19 restrictions. Similarly, secondary support and backfill increased by 161% quarter-on-quarter and 122% quarter-on-quarter, respectively.

FY outlook and guidance remains unchanged

Gold Fields said that its FY 2020 production and cost guidance remains unchanged from the update in August 2020. Attributable equivalent gold production for 2020 for the Group is expected to be between 2.200 Moz and 2.250 Moz (original guidance: 2.275 Moz – 2.315 Moz). AISC is expected to be between $960/oz and $980/oz (original guidance: $920/oz – $940/oz) and AIC is expected to be between $1 070/oz and $1 090/oz (original guidance: $1 035/oz –$1 055/oz).

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