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Gold Fields earnings to halve, and it sets aside $30m for silicosis class action

Thursday, 27 July 2017

Gold Fields expects interim earnings to roughly halve in dollar terms, it said on Thursday.

It also gave an estimate of its liability in a silicosis and tuberculosis class action suit.

Gold Fields said earnings per share (EPS) for the six months to end-June would be 43%-57% lower than the 14 US cents reported a year ago, coming in at between 6c and 8c.

Headline earnings per share (HEPS) will fall 38%-50%, to 8c-10c, from 16c a year ago.

Dollar-denominated earnings in the first half were hit by stronger local currencies and higher amortisation rates, which Gold Fields said were largely due to lower reserve ounces at the Tarkwa mine in Ghana, and "an increase in ore mined and stockpiled" at that mine.

Gold Fields has made a provision of $30.2m or R390m for its share of a possible settlement of current and former mineworkers’ class action suit against a group of mining companies.

"The nominal value of this provision is $39.5m (R509m)," Gold Fields said.

"The ultimate outcome of these matters remains uncertain, with a possible failure to reach a settlement or to obtain the requisite court approval for a potential settlement.

"The provision is consequently subject to adjustment in the future, depending on the progress of the working group discussions, stakeholder engagements and the ongoing legal proceedings," it said.

Gold Fields is a member of a working group with African Rainbow Minerals, Anglo American, AngloGold Ashanti, Harmony and Sibanye Gold, to address issues related to lung diseases suffered by workers in SA’s gold mining industry.

The class action for which Gold Fields has made the $30.2m provision is one of several cases brought against mining companies.

Gold Fields said the mining companies intended to defend the suits, but would continue to work with the government, labour and claimants "to seek a solution to this South African mining industry legacy issue".

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