[miningmx.com] — GOLD Fields benefitted significantly from the rising gold price during the June quarter, managing to translate a 5% production increase into 15% earnings growth.
Also, the company has made good progress towards achieving its output target for 2011.
Delivering results for the quarter and six-months to end-June on Thursday, Gold Fields’ quarterly net earnings increased 15% to R1.26bn, from R1.1bn. More significantly was the 95% jump in interim net earnings from R1.21bn (to end-Jun 2010) to R2.36bn. This came in spite of production remaining virtually flat over the comparative periods (1.7 million ounces in 2011 compared to 1.69m oz).
An interim dividend of 100 SA cents per share was declared. Headline earnings for the same period was 329c/share (176c/share for the quarter).
The interim production figure of 1.702m oz represents 48% of the bottom range of its full-year target of between 3.5m oz and 3.7m oz. The group said its full-year guidance remained unchanged.
Gold Fields CEO Nick Holland said costs during the quarter ($816/oz, compared to revenue of $1,496/oz) were impacted by the annual increase in electricity tariffs, compounded by the adjusted winter tariffs. Still, Gold Fields managed to contain net operating costs to R5.1bn, an increase of 5% on the March quarter.
“During the quarter we made significant progress at our four major international growth projects as part of our plan to achieve five million quality gold equivalent ounces, in production or in development by 2015,’ said Holland. “In addition, our South Deep project in South Africa continues to progress towards its target of 750,000oz per annum at full production.’
Looking forward, the group expects cash cost to be $790/oz for the year, compared with $760/oz guidance provided earlier. “This is mainly due to an increase in fuel costs at the West Africa region, higher power costs at the South Africa and West Africa regions, higher wage costs than originally anticipated, an increase in the workers’ participation of profits at Cerro Corona and increased royalties at all our operations due to the higher gold price.’
