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Gold Fields sharpens cost focus
Allan Seccombe
Posted: Thu, 03 Aug 2006
[miningmx.com] -- GOLD Fields posted a 530% increase in net profit to R1.6bn for the year to end-June and the company will continue its focus on managing costs to ensure the full benefit of a higher gold price is achieved, the group said on Thursday.
Total cash costs rose 11.6% for the year to R73,746/kg, with the fourth quarter figure coming in at R77,187.
Gold production for the year was 126,712kg or four million ounces against 131,284 kg before because of a weeklong strike at the South Africa mines and problems at the Kloof mine.
June quarter gold output slipped from the previous quarter to 31,669 kg because of lower international gold output.
“Gold production for the September quarter should be marginally higher when compared with the June quarter. Total cash costs should also increase due to the wage increases at the South African operations,” Gold Fields
said in note accompanying its results.
“During the September quarter the focus will remain on the mining of quality volumes and tight cost control to mitigate the strong inflationary pressures and to ensure that shareholders reap the benefits of the stronger gold price,” Gold Fields CEO Ian Cockerill said.
The company’s operating margin has increased steadily since 2005, rising to 30% for the 2006 financial year from 19% in 2005. In the fourth quarter the margin stood at 38%.
The South African operations had a strong June quarter, with production rising four percent to 669,000 oz, as increased output at Driefontein and Kloof offset lower production at Beatrix.
The international operations’ output fell seven percent to 349,000 oz. Tarkwa in Ghana had lower grade ore to contend with and Damang had less high-grade ore to process. St Ives in Australia had a five-day mill maintenance shutdown and lower grades from surface and underground
mines.
Exploration expenditure in the June quarter was R94m from R34m in the March quarter, with a large chunk of the expenditure going towards the Essakane project in Burkina Faso, where a pre-feasibility study is underway.
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