SIBANYE Gold downgraded its full-year gold production target following interruptions at its Driefontein mine west of Johannesburg, but said full-year share earnings would be about 200% higher year-on-year.
Production was expected to be 1.71 million ounces, some 3% lower than previously forecast at a total cash cost of R380,000 per kilogram and an all-in sustaining cost of R460,000/kg.
The all-in cost margin guidance was unchanged at 20% assuming an average gold price of $1,255/oz and an average exchange rate of R14 to the dollar.
Sibanye said in a production update of the September quarter today that its safety performance had improved at its gold mines since a review of its safety strategy in August.
However, gold production in the quarter was 7% lower year-on-year owing to a one fifth decline in underground throughput at Driefontein. Kloof performed well in the September quarter.
“Driefontein experienced various production disruptions this quarter, specifically at its Masakhane and Hlanganani shafts. Stoppages related to engineering issues resulted in underground gold production declining to 111,500 ounces”.
Production at Cooke 4 had been stopped in terms of plans to shut the mine after Sibanye failed to turn a profit from the operation.
The strong annual financial performance of the gold division was put down to a higher average rand gold price which was 27% higher in the September quarter. However, Sibanye’s platinum division made a solid contribution.
Production hit record levels for a quarter in the September period at some 94,791 oz (4E) despite “punitive interventions” by the Department of Mineral Resources in the region and the “knock-on effects” of illegal industrial action.
