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Having turned a profit for the third year in a row, the once-troubled South Deep gold mine is on track to becoming "bulletproof" at any gold price, Gold Fields has said.
Speaking to Fin24 following the release of the group results on Thursday, Gold Fields CEO Chris Griffith said the mine was in a much more sustainable position having experienced a steady improvement over the past three years.
Work now continues to ramp up the mine to reach 380 000 ounces over the next few years.
"That's where our focus will be [and if] we keep on doing what we've been doing in the past, we'll be bulletproof at whatever gold price," Griffith said.
"We do not focus on trying to make money at these gold prices. We will generate very substantial amounts of cash, as we did this year, because of the great work of the team and the good gold price, but we will manage this mine for much lower gold prices."
The mine is Gold Fields' last remaining asset in South Africa. The group has for over a decade poured billions of rands into the loss-making operation, which appeared turn a corner into profitability in 2019.
On Thursday, Gold Fields reported a 157% increase in cash generated from South Deep mine with net cash more than doubling to R1.4 billion in 2021 compared with R558 million in the year prior.
Gold production at the mine grew 29% to come in at 293 000 ounces for the year.
The gold price last year remained strong, staying between $1 700 and $1 900 an ounce. Gold has not weakened to below $1 300 an ounce since 2019.
The group meanwhile reported a 5% increase in gold production for the year ended in December 2022 to reach 2.34 million ounces.
Normalised earnings for the year were 6% higher $929 million or $1.05 per share. Gold Fields declared a final dividend of R2.60 per share, taking the total dividend for the year to R4.70 per share, marginally lower than the R4.80 per share declared in 2020.
While Gold Fields is on the lookout for opportunities to maintain and expand its gold production into the future, it has not announced any acquisition targets as yet. Griffith said plenty work was going on in the background to look at both internal and external growth opportunities.
"But we don't have to rush out to try and buy something by Friday. We have some time to be able to get it right, in terms of making sure that whatever we do has value," he said. "And in this high price environment, we also want to be careful we don't overpay for assets."
The preference, he said, is to focus on internal growth opportunities.
However, an expansion of South Deep - which is engineered to be a far larger mine - is not on the cards.
"We have [been] disappointed so much in South Deep over many years, that I think we've got a much more realistic objective for the next number of years," said Griffith. "To say we want to go to the stars, when we can't even sort of go around the corner is not is not something that, over the last number of years, the team in Gold Fields wants it to aspire to."
Rather, the group will pursue a realistic plan for the mine. Only once the goals within that plan are achieved, further steps could be considered, he said.
