GOLD Fields CEO, Chris Griffith identified South Deep as the group’s stand out performer in the company’s 2021 financial year saying gold output of 293,000 ounces – 29% higher than forecast – would be exceeded this year.
“After a strong performance in 2021, South Deep is set to continue on the growth trajectory previously outlined,” said Griffith in the firm’s 2021 full year financial results today. “We expect production to grow by a further 20 to 30% to 345,000 oz to 375,000 oz over the next three to four years,” he added.
This is a far cry from the mine’s position in 2018 when then Gold Fields CEO Nick Holland set about its restructure. Since then, the mine has flourished – assisted by the gold price – albeit on a much smaller scale than envisaged when Gold Fields bought it in 2007.
Griffith said in November he expected South Deep would “make a lot of money” in the future. Production is forecast to be 7% higher at 312,000 oz this year.
His comments come amid a solid showing for Gold Fields last year. From an earnings perspective, the company reported a 22% increase in headline earnings year-on-year to $890m. On a normalised earnings level, Gold Fields reported a 6% increase to $929m (2020: $879m) equal to share earnings of $1,05/share ($1.00/share).
The group paid out a final dividend of 260 South African cents a share taking the total dividend payout for the year to 470 South African cents/share, equal to 29.5% of normalised earnings. Gold Fields’ dividend policy is to pay out 25% to 35% of nomalised earnings.
Commenting on this year, Griffith said Gold Fields was shooting for attributable gold production of 2.25 to 2.29 million oz excluding gold from its Asanko Gold joint venture in Ghana compared to 2021 gold output of 2.25 million oz (excluding Asanko).
Griffith said he was largely content with Gold Fields’ strategy opting to build on its foundation, but one wrinkle is the role of the Asanko Gold joint venture in the group. A production update on guidance is expected from Asanko partner Galiano Gold later this month.
All in sustaining costs (AISC) are expected to be between $1,140/oz and $1,180/oz compared to $1,063oz. The increase is accounted for by heavy roll out of development capital at Gold Fields’ Chile project, Salares Norte of some $330m.
This outlay comprises the majority of non-sustaining capital for the year estimated to be between $425m and $475m. Total capex including sustaining capex is expected to be between $1.05bn and $1.15bn.
Griffith outlined again Gold Fields intention to find ways to maintain production at its projected peak of up to 2.77 million ounces in its 2024 financial year rather than tailing off as is currently contained in the plan.