Gold Fields CEO Nick Holland
Photo by: Creamer Media
Dual-listed Gold Fields achieved normalised profit from continuing operations of $27-million for the year ended December 31, 2018, compared with the $154-million posted for 2017.
The company’s profit was dented by a decline in output, led by its South Deep mine in South Africa.
Output at the mine decreased by 44% year-on-year to 157 000 oz and was 36% below a revised guidance of 244 000 oz.
South Deep, the company’s last asset in South Africa, has made losses over the past five years and the company completed a large-scale restructuring of the asset in December.
Through the process, R400-million of capital expenditure was removed, with a considerably reduced footprint.
However, the process also saw 1 092 employees exit the business.
CEO Nick Holland on Friday noted that the restructuring had placed the mine on an improved footing, from which it can gradually build up production.
The company’s headline earnings per share (HEPS), meanwhile, decreased to $0.07, from $0.26 in 2017.
Revenue decreased by 7% from $2.76-billion in 2017 to $2.58-billion in 2018, owing to lower ounces sold.
All-in sustaining costs (AISC) were $981 /oz, and all-in costs (AIC) were $1 173 /oz – both below the company’s original guidance.
At the Tarkwa gold mine, in Ghana, the company transitioned from contractor mining, but was still able to meet production and cost guidance, enthused Holland.
At the Damang gold mine, also in Ghana, the company was able to outperform its production guidance by 13%. Moreover, AIC came in below plan.
At the Gruyere gold project, in Western Australia, the company experienced a slight in production, with first gold now set to be poured in the second quarter of this year.
At Salares Norte in Chile, a feasibility study was completed and a maiden reserve declared. The mine’s environmental-impact assessment is also being reviewed.
At Cerro Corona, in Peru, the life-of-mine has been extended from 2023 to 2030, with a further life extension study under way.
Looking to 2019, the company expects an inflection in free cash flow generation.
Attributable equivalent gold production guidance for this year is set at between 2.18-million and 2.3-million ounces.
AISC is expected to be between $980 /oz and $995 /oz and AIC between $1 075 /oz and $1 095 /oz.