GOLD’S historic price gains last year and a strong operational recovery in the fourth quarter gave Gold Fields’ 2024 financial year a positive blush.
The Johannesburg-headquartered company said in a trading statement on Thursday that earnings for the 12 months would be 70% to 82% higher year-on-year in a range of $1.34 to $1.44 per share. Gold Fields reported a $156m write-down in 2023 which also contributed to the earnings increase in 2024.
Operationally, the company had a difficult time over the last 12 months. It restated production after misjudging the ramp up of its Salares Norte project in Chile. It also suffered the effects of higher capitalised waste stripping at its Australian, a cyclonic event at Gruyere in Australia, and at South Deep in South Africa backfill rehandling problems.
Production was down a fifth at the half year point and resulted in Mike Fraser, serving his first year as CEO, having to lower the group’s forecast for full-year gold output to between 2,05 to 2,15 million ounces from previous guidance of 2.33 to and 2.43 million oz.
Commenting in the trading statement on Thursday, Fraser said the group’s full year production was expected to be about 2.07 million oz. All-in sustaining costs for 2024 were expected to be between $1,580 to $1,670/oz – 26% higher than in 2023 owing to 10% less gold sold, higher royalties (on the back of the gold price increase), and higher sustaining capital costs.
The production increase in the fourth quarter includes some 45,000 oz from Salares Norte (within its guided range of 40,000 to 50,000 oz) which resumed ramp-up in the September quarter. The mine is scoped to produce up to 550,000 oz, a level it was only expected to reach in the group’s 2026 financial year.
Nonetheless, the results were positive, according to RMB Morgan Stanley. “Given the difficult first nine months, the fourth quarter rebound may come as a positive surprise to the market,” the bank said.
All things being equal, Gold Fields is positioned for a significantly better production year while the gold price has also showed signs of sustaining its high levels. Gold is trading at $2,866/oz on Friday, an increase of just under 9% since the start of the year. In comparison, shares in Gold Fields are 32% higher year-to-date.
“It was definitely a year of two halves,” said Fraser in an interview with Miningmx on Tuesday in which he acknowedged his team were “naive” to think Salares Norte could be ramped up as quickly as guided. “But in the second half we regained some credibility, and you will see in the fourth quarter we have come through very nicely.”
