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Gold Fields well capitalised to survive COVID-19 lockdowns, says Holland -

Tuesday, 31 March 2020

GOLD Fields' mines were largely unaffected by COVID-19 related stoppages, but the group was sufficiently capitalised to withstand prolonged downtimes should they materialise in the future, said the group’s CEO Nick Holland.

We have evaluated the potential effects of a three-month operational closure period across the group, said Holland in the group’s annual report published on March 30. A three month closure was hypothetically applied to the group’s operations based on periods of lockdown experienced China and South Korea, he said.

Over this period there could potentially be no production and approximately 50% savings on cost and capital, said Holland. Gold Fields is of the view that it will be a stable, going concern for the foreseeable future. However, this estimate is inherently uncertain as it is based on expectations of future events, including the length of the closure period, which is currently unknown.

Gold Fields had $600m in cash and in excess of $1.5bn of committed, undrawn debt facilities as of December 31.

The group’s South African mine South Deep had been put on care and maintenance for the period of the 21-day lockdown as ordered by South African president, Cyril Ramaphosa. However, the group’s other operations in Ghana, Australia and Peru continued to operate.

Apart from South Deep, the rest of the group production has been largely uninterrupted, said Holland. However, increasingly stricter regulations are being put in place by governments around the world. As a result, we caution that our production and cost guidance for the 2020 financial year provided in February 2020 has an elevated level of risk, he said.

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