Gold Fields Limited: Attributable Production Up 13 Per Cent to 898,000 Ounces
JOHANNESBURG, August 5, 2010 /PRNewswire-FirstCall/ -- Gold Fields Limited (NYSE & JSE: GFI) today announced net earnings for the June 2010 quarter of R900 million compared with earnings of R316 million and a loss of R293 million in the March 2010 and the June 2009 quarters respectively. In US dollar terms net earnings for the June 2010 quarter were US$120 million, compared with earnings of US$44 million and a loss of US$29 million for the March 2010 and June 2009 quarters respectively.
June 2010 quarter salient features:
- New production record for Tarkwa at over 200,000 ounces for
the quarter;
- Total cash cost down 2 per cent from R169,538 per kilogram
(US$703 per ounce) to R166,215 per kilogram (US$688 per ounce);
- Notional cash expenditure down 3 per cent from R241,860 per
kilogram (US$1,003 per ounce) to R235,223 per kilogram (US$974 per
ounce);
- NCE margin doubled from 9 per cent to 18 per cent;
- Net debt down to R4.7 billion (US$620 million) from R6.1
billion (US$829 million).
A final dividend of 70 SA cents per share is payable on 30 August 2010, giving a total dividend for financial 2010 of 120 SA cents per share.
Statement by Nick Holland, Chief Executive Officer of Gold Fields:
"Safe production remains a key priority for the Group and I deeply regret to report three fatal accidents at the South African operations during the quarter. The fatality rate and the serious injury frequency rate reduced year-on-year by 15 per cent and 20 per cent respectively. F2010 has been the best safety year ever, and our focus will now be on behavioural change, with no let-up in our efforts to create a safe working environment.
The financial highlight of the June quarter was Gold Fields' ability to generate R1.8 billion in cash, in line with our strategic focus on controlling the all-in cost of production, i.e. notional cash expenditure (NCE), and as a consequence increasing free cash flow.
Attributable Group production for the quarter amounted to 898koz, 13 per cent higher than the previous quarter. Production from the South Africa region increased by 23 per cent to 488koz, with significant improvements at all the South African mines. Particularly pleasing was the performance at Tarkwa in West Africa, which increased production by 16 per cent to 200koz for the June quarter, a new record from this mine. St. Ives also had a strong production quarter, reflecting an excellent performance from the underground operations.
In the June quarter South Deep achieved record production levels since becoming a fully mechanised mine. South Deep's production has increased by 52 per cent year-on-year, achieving annual production of 265koz. South Deep will seek to build on this momentum as it progresses towards full annual production of between 750koz and 800koz by the end of 2014. The South African Department of Mineral Resources has approved the conversion of the South Deep old order mining right into a new order mining right, which includes an additional portion of ground known as Uncle Harry's, which is contiguous to South Deep. This, together with the previous conversions for Driefontein, Kloof and Beatrix granted in 2005, means that all of Gold Fields' South African operations have now been granted their new order mining rights.
In addition, we are finalising three further empowerment transactions that will assist in achieving our 2014 ownership target. These deals include an Employee Share Option plan for 10.75 per cent of GFIMSA, a broad-based Black Economic Empowerment transaction for 10 per cent of South Deep and a broad-based Black Economic Empowerment transaction for 1 per cent of GFIMSA, excluding South Deep.
Growth projects continue to make good progress. Exploration drilling has led to an increase in indicated and inferred Mineral Resources at the Hamlet deposit at St Ives, which is now reported at 1 million ounces. After Athena, Hamlet is the second major discovery in the developing Argo-Athena camp in the last two years, amid extensive investment in the St Ives' near-mine exploration programme. At Athena, good progress has been made in decline development, which is on track to achieve first production at this new underground mine by December 2010.
At the Chucapaca project in Peru, Gold Fields, together with our joint venture partner Buenaventura, announced an initial resource estimate of 5.6 million gold equivalent ounces at the Canahurie discovery, with mineralisation potential beyond the extent of the current drilling. A pre-feasibility study has commenced together with a new round of in-fill and step-out drilling.
During the quarter we also announced a change in leadership at Gold Fields. After a long and outstanding career, during which he served Gold Fields with distinction in various capacities, Alan Wright will retire as chair and director of Gold Fields at the Annual General Meeting in November 2010. It is proposed that he be replaced as chair by prominent businesswoman and activist, Dr. Mamphela Ramphele, who was appointed as director and deputy chair with effect from 1 July 2010. As we continue on our path towards being the world's leading sustainable gold producer, we look forward to Dr. Ramphele's contribution, leadership and wealth of experience."
The full results are available on the Gold Fields website:
http://www.goldfields.co.za
Notes to editors
About Gold Fields
Gold Fields is one of the world's largest unhedged producers of gold with attributable production of 3.6 million ounces* per annum from nine operating mines in South Africa, Ghana, Australia and Peru. Gold Fields also has an extensive growth pipeline with both greenfields and near mine exploration projects at various stages of development. Gold Fields has total attributable Mineral Reserves of 81 million ounces and Mineral Resources of 271 million ounces. Gold Fields is listed on JSE Limited (primary listing), the New York Stock Exchange (NYSE), the Dubai International Financial Exchange (DIFX), the Euronext in Brussels (NYX) and the Swiss Exchange (SWX). For more information please visit the Gold Fields website at http://www.goldfields.co.za
*Based on the annualised run rate for the second quarter of F2010
SOURCE Gold Fields Limited
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