Gold Fields deciding Ghana’s mine fate, as bullion prices dive - Mining.com
Gold Fields (NYSE, JSE:GFI), the world’s seventh-largest bullion producer with operations from Australia to Peru, may place its Damang mine in Ghana "under care and maintenance" until gold prices recover, it said Thursday.
Shares in the South African miner, however, jumped more than 20% as it reported improved production and lower cash outflows at its South Deep mine, the company’s only remaining asset in South Africa.
The stock soared as much as 29% to 39.98 rand a share around 11:40am local time in Johannesburg. That is the highest price reached since September 1999. It was up almost 19% at 36.72 rand by 3:33 p.m.
South Deep, the world’s largest gold ore body behind Grasberg in Indonesia, is a "kingpin" asset for Gold Fields, according to the miner’s website, despite almost a decade of delays, accidents and financial losses. This, as the mechanized mine holds about 75% of the company’s reserves.
As the gold price continues to languish, we constantly review our portfolio," CEO Nick Holland said.
“As the gold price continues to languish, we constantly review our portfolio," CEO Nick Holland said. "While the weaker currencies offer some respite in most regions, Ghana is fully exposed to further declines in the dollar gold price
Another option, the company said, would be to inject cash into the operation in order to access deeper higher quality ore.
A final decision will be announced early next year, the company said in its September quarter results which showed increased gold output and higher earnings.
Gold Fields reported attributable net earnings of $18m for the three months to September 30 compared with $12m in the June quarter and $19m a year ago. It also said it cut net debt by 3.4% to $1.42 billion.
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