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Gold Fields records solid Q1 results

  • SOURCE: | qwesa2big
  • 1.8930299Gold producer Gold Fields has had a solid start to 2016 with attributable equivalent gold production for the first quarter 3% higher year-on-year at 515 000 oz, compared with the 501 000 oz produced in the first quarter of 2015.

    In a quarterly operating update for the three months to March 31, the company reported a 16% year-on-year decrease in all-in sustaining costs (AISC) to $961/oz, compared with an AISC of $1 143/oz in the first quarter of 2015, while all-in costs (AIC) were 15% lower year-on-year at $986/oz, compared with the AIC of $1 164/oz in the prior comparable period.

    “Both AISC and AIC are tracking below the cost guidance for the full year provided in February. The average US dollar gold price achieved was largely unchanged year-on-year at $1 192/oz, but was 9%, or $100/oz, higher quarter-on-quarter,” said CEO Nick Holland.

    Guidance for attributable equivalent gold production for the group for 2016 remained unchanged at between 2.05-million and 2.1-million ounces. Holland further noted that AISC and AIC were expected to be between $1 000/oz and $1 010/oz and between $1 035/oz and $1045/oz, respectively.


    Despite the first quarter of the year being a seasonally weak quarter for South African mines, Gold Fields’ South Deep mine managed to absorb some of the impact of the Christmas holidays owing to production from voluntary shifts worked over the period.

    The mine’s production increased 75% year-on-year and was only 7% lower quarter-on-quarter at 64 000 oz. Consequently, the AIC was 20% lower year-on-year and 18% higher quarter-on-quarter in rand terms at R616 706/kg or $1 215/oz.

    Holland explained that the transition to high-profile (HP) destress mining, which started in the second half of 2015, had progressed during the first quarter of the year, increasing 51% quarter-on-quarter to 4 517 m2. HP destress accounted for 44% of total destress meters at the mine in the first quarter, he added.

    Managed production in Ghana for the first quarter was 181 000 oz, up 4% year-on-year but down 3% quarter-on-quarter, with the AIC of $1 028/oz down 21% year-on-year, but up 11% quarter-on-quarter.

    “The evaluation of various options for our Damang mine, in Ghana, are ongoing. We are on track to make a decision and provide an update to the market by mid-year,” Holland added. Gold-equivalent production at Cerro Corona, in Peru, was down 6% year-on-year and 5% quarter-on-quarter to 63 000 oz with an AIC of $709 per equivalent ounce, down 34% quarter-on-quarter but up 6% year-on-year.

    Holland highlighted that the company’s Australian operations produced 225 000 oz for the quarter, which was down 7% year-on-year and 14% lower quarter-on-quarter, with an AIC of $904/oz, which was up 1% year-on-year and 9% quarter-on-quarter in Australian dollar terms.


    Gold Fields said it had noted the publication on April 15 by the Mineral Resources Minister Mosebenzi Zwane of a reviewed draft of the Mining Charter that has been prepared by the Department of Mineral Resources (DMR).
    “Although the mining industry was not consulted prior to its publication, Gold Fields will engage with the DMR, through the Chamber of Mines and appropriate structures, during the consultation period which ends on May 31,” Holland said.


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