[miningmx.com] – SIBANYE Gold overcame the effects of load-shedding and a fire at its Driefontein premises to produce 1.59 million ounces in its 2014 financial year, and said it would target up to a 5% increase in output this year.
Commenting in a trading update, South Africa’s largest gold producer said record output for the December, at some 452,700 oz, was the reason for meeting its guidance for 2014 which was also hampered by slower than planned build-up at its Cooke shafts. The fire at Driefontein resulted in the loss of 17,637 oz of gold.
For the current financial year, Sibanye Gold said it would produce between 1.61 million oz and 1,67 million oz of gold at an all-in sustaining cost of $1,055/oz and $1,100/oz which compares with and all-in cost of $1,080/oz in 2014. Sibanye did not publish its all-in sustaining cost for 2014 because it did not embark on capital spending.
Capital expenditure would increase 10% to R3.6bn year-on-year as Sibanye sought to extend the operating lives of the mines and on growth projects such as Burnstone, the underground mine it bought from Wits Gold.
Sibanye acknowledged that its Cooke operations, bought from Gold One with R1.2bn worth of shares in 2013, had ramped up slower than usual, mainly owing to Cooke 4, currently the subject of a restructuring.
The restructuring has been held up, however, owing to Competition Commission objections that Sibanye had agreed not to close the operation when it bought the asset. Some 2,500 jobs are potentially at risk.
The gold contribution from Cooke was 138,400 oz during the first seven months of its incorporation in Sibanye whilst uranium output contributed to a 180,000 pounds (lbs) stockpile. Uranium production this year would be 250,000 lbs, the company said.
Interestingly, Sibanye based its expenditure on an average rand/dollar exchange rate of 11.20 despite the general three-year trend of rand weakness against the dollar. The rand is currently trading at 11.465 against the dollar but traded as strong as 10.30 and 10.40 during last year.
Shares in Sibanye traded down 2.2% on January 26 but have more than doubled in value over the last 12 months. The company is currently valued at R27.2bn.
