https://www.engineeringnews.co.za

South Deep soars, Gold Fields spawns $123m cash, pays divi

Rope winder at Gold Fields' South Deep mine

Rope winder at Gold Fields' South Deep mine

18th February 2016

By: Martin Creamer

Creamer Media Editor

  

Font size: - +

JOHANNESBURG (miningweekly.com) – Production at the South Deep gold mine rose 24% in the last three months of 2015 to almost double the output for the corresponding period of the previous year, Gold Fields said on Thursday.

In presenting yearly as well as fourth-quarter (Q4) financial results, Gold Fields reported a half-year production leap at South Deep of 71% compared with 2014.

The JSE- and New York-listed company announced normalised earnings of $15-million for the December quarter compared with $22-million for the September quarter.

A final dividend of 21c a share will be paid on March 14, giving a total 25c a share dividend for the year, which Gold Fields CEO Nick Holland described as “challenging”, owing to the dollar gold price falling $250/oz through the course of the year, to close at the $1 050/oz level.

However, weakening commodity currencies provided some offset, which combined with ongoing cost-saving initiatives and efficiency improvements to enable the company to generate net cash flow of $123-million for the year.

Holland singled out South Deep for making good Q4 progress in producing 68 000 oz, or 2 119 kg, of gold, driven by a 20% increase in tonnes and 4% better head grade from underground sources.

As a result, South Deep’s Q4 all-in costs (AIC) fell 19% to $1 156/oz with more improvement guided in the first quarter of this year.

Group attributable equivalent gold production for the year was within 1% of original guidance at 2.16-million ounces, which was down on 2014’s 2.22-million ounces, and all-in sustaining costs (AISC) and AIC bettered guidance at $1 007/oz and $1 026/oz.

Group AISC decreased by 2% quarter-on-quarter to $929/oz and AIC by the same percentage to $942/oz.

South Deep’s AISC fell 14% to $1 095/oz, or R495833/kg, on higher gold sold.

In the West Africa region, AISC and AIC fell 4% in Q4 but in the South America region, AISC soared 72% to $1 285/oz on less gold sold, the copper price decrease and higher capital expenditure.

Total AIC per equivalent ounce increased 47% to $1 073 per equivalent ounce for mainly the same reasons.

Ghana’s attributable Q4 gold production fell 3%  to 174 000 oz on lower production at both Tarkwa and Damang. However, AIC was 4% lower quarter-on-quarter at US$925/oz.

Tarkwa had a difficult year-end, following a fatality, and various options are being evaluated for Damang for reporting before mid-year.

Australia produced 6% more Q4 gold at 263 000 oz on better output at St Ives and Agnew/Lawlers, pushing AIC down 5% to $819/oz.

The Australian region generated $86-million of net cash flow, up from $64-million in Q3.

Production at St Ives rose 20% and production at Agnew/Lawlers by 14%.

Lower grades mined at Granny Smith resulted in a 12% gold production fall while production at Darlot was 3% lower.

The Australia region increased its exploration spend to A$91-million as part of a three-year strategy to increase reserves and resources at the various operations.

In additional to exploration drilling to increase current orebodies, activity was also focused on developing new targets on the prospective leases.

Group net debt has been lowered to $73-million and guidance for 2016 is gold production equivalent of between 2.05-million ounces and 2.10-million ounces, with decreases in the international operations partly offset by the growth in production at South Deep.

Edited by Creamer Media Reporter

Comments

Showroom

WearCheck
WearCheck

Leading condition monitoring specialists, WearCheck, help boost machinery lifespan and reduce catastrophic component failure through the scientific...

VISIT SHOWROOM 
AutoX
AutoX

We are dedicated to business excellence and innovation.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.145 0.202s - 156pq - 2rq
Subscribe Now