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South Deep underpins a strong first half for Gold Fields - BDlive

Thursday, 18 August 2016

GOLD Fields swung to profit in the first half of the year as it benefited from a higher dollar gold price and improvements at its South Deep mine in SA, which offset declines at its international operations.

Gold Fields posted a net profit of $115m for the six months to end-June, compared with a $2m loss the year before.

The company declared a dividend of R0.50 per share for the period, up from a payout of R0.04 a year ago.

Gold Fields attributed its improved performance to a 3% higher gold price in dollar terms as well as its cost controls.

The South Deep mine, the company’s last operating asset in SA, grew production by 87% to 140,000oz, ahead of target.

The outlook for the new mine, which has missed production targets in the past as the company grappled to find the optimal mining method and struggled to find the correct skills mix, was forecast to be 289,000oz for the year, an increase from an earlier forecast of 257,000oz.

The all-in cost at South Deep fell 20% to R622,453/kg. The outlook for the year is for the all-in cost to be R595,000/kg, which is about R20,000 higher than an earlier forecast as Gold Fields bumped up capital expenditure this year by R211m, for housing and new equipment as well as bonus payments for the mining teams exceeding targeted production.

The strong performance at South Deep underpinned first-half production of 1.044-million ounces of gold, compared with 1.036-million ounces a year ago.

Production in Australia fell 2% to 466,000oz and in Ghana output was 7% lower at 311,000oz. In South America, output was down 15% to 128,000oz.

Gold Fields reduced its net debt to $1.155bn from $1.38bn in December.

Looking ahead, Gold Fields raised its full-year production forecast by 50,000oz to between 2.1-million and 2.15-million ounces at an all-in cost of $1,010/oz, including $50m of exploration spending at the Salares Norte prospect in South America.

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