Gold Fields’ Yamana break-fee helps soften impact of $502m in 2022 impairments

COMPENSATION from Gold Fields’ failed bid for Yamana Gold last year helped soften the impact from a string of impairments booked by the South African gold producer in its 2022 financial year.

Gold Fields received a ‘break-fee’ of about $300m from Yamana and today declared that a net amount of $202m offset $502m in impairments of which the largest impairment was $325m related to a higher country risk discount rate applied to Tarkwa in Ghana.

Gold Fields also registered an impairment of $114m after writing down to nil its investment in Far South East, a gold and copper prospect in the Philippines. The company had bought a 40% stake in a company that controlled the resource.

An increase in the country risk free rate of Peru also resulted in an impairment of the firm’s ageing Cerro Corona mine totalling $63m.

The outcome is a 7% to 13% year-on-year decline in basic earnings which will be between 77 US cents a share to 83 cents/share. On a normalised basis, share earnings for the year ended December 31 was expected to range between 94 US cents/share to $1/share, a decline year-on-year of between 5% and 11%.

Gold Fields said inflationary factors also fed into the reduction in earnings. From an operational perspective, all-in costs for 2022 are expected to be 2% higher coming in at between $1,320/oz but below the guidance range of $1,370 to $1,410/oz.

All-in sustaining costs are expected to be $1,105/oz, 4% higher than in 2021 and below the lower end of the guidance range of $1,140/oz to $1,180/oz, said Gold Fields. Attributable gold production for the financial year will be 2.34 million ounces representing a 3% increase year-on-year and exceeding guidance range of 2.31 and 2.36 million oz.