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Gold price lifts Gold Fields' interim earnings - Mining Weekly

Wednesday, 5 August 2020

JSE- and NYSE-listed Gold Fields expects its basic earnings a share for the six months ended June 30 to be between 90% and 110% higher year-on-year at between $0.17 and $0.18.

Headline earnings per share (HEPS) for the first half of the year are expected to be between $0.19 and $0.20, which is at least 290% higher than the HEPS of $0.05 apiece reported in the first half of 2019.

The company advises that its normalised earnings a share for the six months under review should be between $0.35 and $0.38, which is at least 137% higher than the $0.15 apiece normalised earnings a share reported in the prior comparable six months.

Gold Fields says the increase in earnings for the period is driven largely by the higher gold price, which averaged at about $1 800/oz in the first half of the year and which has since breached the $2 000/oz mark.

The company's attributable gold equivalent production for the six months under review increased marginally year-on-year to 1.09-million ounces, compared with attributable gold equivalent production of 1.08-million ounces in the prior comparable six months.

Gold Fields explains that gold output from the Gruyere mine, in Australia, which started producing in July last year, and ten extra production days in the review period, was offset largely by the impact of Covid-19 stoppages at South Deep, in South Africa, and Cerro Corona, in Peru.

The company says the increase in production days relates to a decision that was taken by the company during the second quarter of this year to align the production months with the calendar months, resulting in an extra ten production days in the first half of the year.

This one-off adjustment will have no impact on the second half of the year.

The company maintains its guidance for the full year at between 2.2-million and 2.25-million ounces.

Gold Fields did, however, increase its cost guidance for the year. After achieving all-in sustaining costs (AISC) of $986/oz for the six months under review, the company revised its AISC guidance to between $960/oz and $980/oz, compared with an original guidance at between $920/oz and $940/oz.

AISC in the prior comparable six months were $891/oz.

The company says there was an increase in net operating costs in the six months under review, mainly driven by a move of waste tonnes from capital to operating costs at the Damang mine and lower byproduct credits, as a result of a lower copper price.

Covid-19-related costs are estimated at about $20/oz for the six months under review and are embedded in the AISC.

The company will release its results for the interim period on August 20. 


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