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Gold Fields lifts FY production guidance as South Deep, Aus operations perform in H1 - Mining Weekly

Thursday, 18 August 2016

JOHANNESBURG – Gold major Gold Fields, led by CEO Nick Holland, has increased its production guidance for this year to between 2.1-million and 2.15-million ounces, up from its previous guidance of 2.05-million to 2.1-million ounces.

This, the company reported, was on the back of a “better-than-expected” performance from its South Deep operations, near Johannesburg, where guidance has been lifted from 257 000 oz to 289 000 oz for the full year.

In the six months to June 30, the mine produced 140 000 oz of Gold, 87% more than the 75 000 oz produced in the first half of 2015.

The mine’s all-in costs (AIC) for the year are, however, expected to increase to $1 310/oz from $1 265/oz, relating to higher capital expenditure (capex) of R211-million, owing to a change in strategy on housing and the acquisition of additional fleet.

The miner’s Tarkwa operations, in Ghana, saw attributable Gold production drop by 7% to 311 000 oz in the six months to June 30, but AIC for the West Africa region decreased 9% year-on-year to $1 052/oz as a result of lower net operating costs and lower capex.

Citing West Africa as a key region for the group, Holland on Tuesday noted that Gold Fields would continue to evaluate a range of options for its Damang operations, where Gold production had decreased by 11% to 71 900 oz in the first half of the year.

“The mine is in a state of transition; we need to make an urgent decision now on the recapitalisation of the project,” Holland said of the lossmaking asset.

The Damang mine also saw a drop in tonnes mined, a decrease in yield and a decrease in processed tonnes over the last six months, while its costs decreased by 21% to $74-million, paired with 38% higher capex of $11-million, with the majority spent on waste stripping at the Amoanda pit.

Holland explained that the mine was currently operating “almost at feasibility levels”.

Meanwhile, Gold Fields has raised its production guidance for its operations in Australia, which also performed well relative to the production plan for the first half of the year, from 905 000 oz to 925 000 oz.

The Australian operations contributed 175 900 oz of production, a 6% decrease form the prior year’s 187 900 oz, owing to the closure of Cave Rocks and Athena underground mines and transition to openpit operations.

Gold Fields on Thursday reported a significant year-on-year increase in its normalised earnings to $103-million for the six months ended June 30, compared with earnings of $8-million in the prior comparable period. .

Holland added that although Gold Fields had been worried about the Gold market and its prospects for this year, “it was certainly nice to see [the market] pick up”.

Looking ahead, Holland said the company would “keep making hay while the sun shines”, focusing on growing its cash flow and margins.

The group is aiming to, this year, achieve the fourth year in a row of meeting its production targets, as well as exceeding its cost targets. 

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