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Gold Fields opts for hedging amid commodity price volatility - Mining Weekly

Tuesday, 20 June 2017

JOHANNESBURG ( – Given recent volatility in commodity prices and exchange rates, JSE- and NYSE-listed Gold Fields has undertaken select hedging of the oil price and the Australian dollar gold price, the miner said on Tuesday.

Gold Fields’ Australian dollar gold price hedge would comprise 165 000 oz at a floor price of A$1 695.86 and a cap of A$1 754.18 from June this year to December 2019; and 130 000 oz at an average forward price of A$1 719.92, between July and December this year.

The gold volumes hedged represent 75% of the expected production from the Australia region for the second half of the year.

The hedging activity is in line with Gold Fields’ policy to protect cash flow at a time of significant expenditure.

“The Australian dollar gold price hedge will protect the underlying cash flow of Gold Fields Australia, while we are funding the construction of the Gruyere gold project ,” the company noted.

Meanwhile, the oil hedge comprises 78-million litres at an equivalent brent crude swap price of $49.92/bl between June this year and December 2019, in Australia, while in Ghana, the company hedged 126-million litres at an equivalent brent crude swap price of $49.80/bl for the same period.

The volumes hedged represent 50% of the yearly fuel consumption for the two regions.

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