[miningmx.com] — GOLD Fields has kept its attributable production guidance for the financial year to end-December unchanged at between 3.5 million ounces (moz) and 3.7moz .
That’s despite an 8% drop in gold production in the March quarter to 830,000oz (December quarter – 898,000oz) because of shifts lost due to the Christmas holiday break, which falls into this quarter.
The March quarter production figure was still 5% up on the production level of 793,000oz recorded for the March 2010 quarter.
Gold Fields made a net profit of R1.1bn for the March quarter (R777m loss), which also compares with a net profit of R316m for the March 2010 quarter.
Total net operating costs dropped to R4.9bn (R5bn), but the unit total cash cost rose 4% to R168,455/kg of gold produced (R161,894/kg) because of lower production levels.
CEO Nick Holland said that total cash costs for the year to end-December were estimated at R175,000/kg, and notional cash expenditure (NCE) costs were estimated at R240,000/kg.
NCE costs measure the “all-in’ cost of producing gold, including capital expenditure which is excluded from the total cash cost calculation. The NCE calculation provides a much more accurate assessment of gold producers’ true financial situation.
Holland said: “Cost containment allowed Gold Fields to increase its NCE margin to 21%. Our intention is to position the group to generate sustainable margins at a range of long-term gold prices.
Turning to exploration, Holland said progress made on the various exploration projects in Peru, the Philippines, Mali and Finland meant “we are well positioned to achieve our goal of the group having a profile of five million ounces per annum, either in production or development by 2015.”
– The writer owns shares in Gold Fields
