[miningmx.com] – Gold Fields shares jumped 15% to trade as high as R43.62 after publication of its June quarter results on Thursday but on a day where precious metals producers moved up across the board in response to firmer dollar metal prices and a weaker rand.
According to Gold Fields CEO Nick Holland, “you can debate what drove our share price higher but, no matter, we’ll take it.’
The June quarter results reported a net profit of $14.4m compared with a loss of $12.2m for the March 2015 quarter and a profit of $22.3m for the June 2014 quarter while Gold Fields declared an interim dividend of 4 SA cents a share.
But there was further disappointing news from the South Deep mine where the gold production target for 2015 has been dropped to 6,500kgs from the previous estimate of 7,100kgs.
Despite this, Gold Fields has left its guidance on total production for the year unchanged at 2.2 million ounces at an AISC (all-in sustaining cost) of $1,055/oz. Reason is better-than-expected output from the group’s foreign operations which will offset the losses at South Deep.
Holland also pointed out that Gold Fields had restructured in 2012 and 2013 to deliver a cash-flow margin of 15% at a gold price of $1,300/oz which translates into an AISC break-even level of $1,050/oz meaning; “we do not believe Gold Fields needs to make structural changes to our business at this juncture.’
He told Miningmx the production losses at South Deep resulted from the need for further training of the workforce which frequently involved stopping operations.
“We are trying to get them to do the job correctly and we have to take the pain now for the long-term benefits. There’s no point applying pressure for more production and then having to deal with the same problems every year. “
Holland said management was still holding to its “aspiration’ of achieving cash break-even at South Deep by the end of 2016.
