Production and Earnings Decline Due to Seasonal Christmas Break in South Africa
JOHANNESBURG, May 7, 2010 /PRNewswire-FirstCall/ -- Gold Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) today announced net earnings for the March 2010 quarter of R316 million compared with earnings of R1,409 million and R1,307 million in the December 2009 and the March 2009 quarters respectively. In US dollar terms net earnings for the March 2010 quarter were US$44 million, compared with US$187 million and US$140 million for the December 2009 and March 2009 quarters respectively.
March 2010 quarter salient features:
- Attributable gold production of 793,000 ounces;
- Strong performance at the international operations with a 6
per cent increase in production;
- Net cash inflow of R1 billion despite lower production;
- South Deep ventilation shaft deepening commenced;
- Total cash cost up 15 per cent from R147,648 per kilogram
(US$613 per ounce) to R169,538 per kilogram(US$703 per ounce);
- Notional cash expenditure up 12 per cent from R216,830 per
kilogram (US$900 per ounce) to R241,860 per kilogram (US$1,003 per
ounce);
- Damang's secondary crusher successfully commissioned on time
and within budget.
Statement by Nick Holland, Chief Executive Officer of Gold Fields:
I deeply regret to report that the South Africa region reported three fatal accidents during Q3 F2010. We remain singularly focused on eliminating all serious and fatal accidents on all of our mines and our deliberate efforts towards this goal continue unabated. One of the most important safety initiatives is the set of measures we are putting in place to counteract the impact of seismicity. These initiatives are showing early promise.
Our improved performance in the management of safety generally, combined with positive engagement and cooperation with the Safety Inspectorate of the Department of Mineral Resources has resulted in reduced safety stoppages. We will continue to work closely with the Department to improve our safety.
Attributable gold production of 793koz was achieved during Q3, which is broadly in line with the revised guidance issued on 26 March 2010. The decrease in production this quarter was due to the customary Christmas break in South Africa, accelerated maintenance at Kloof Main shaft and safety related stoppages late in the December quarter which reduced opening inventories of available ore early in the March quarter. I am pleased to report that production at all of the South African mines has since improved and we expect that increase to be sustained in Q4.
The seasonal decline in South Africa was partially offset by a 6 per cent increase in the combined attributable production of the international regions to 398koz, which reflects the improved outlook for our operations in West Africa, Australasia and South America.
Overall, we expect Group production during Q4 to approach the level achieved in the December 2009 quarter.
In the West Africa region, Tarkwa continues to gain momentum after resolving commissioning issues relating to the newly expanded CIL plant and is expected to increase production during Q4 F2010. At Damang, the new secondary crusher is in the process of being commissioned which should positively impact on the recovered grades and lead to an increase in production levels over the next few quarters.
In the Australasia region, the strategy to address the grade gap at St. Ives had positive results, with blended recovered grades from all sources on the mine improving by 24 per cent to 2.1 grams per ton, resulting in a 12 per cent increase in production. Indications are that this trend is being maintained into Q4 F2010. Agnew saw a 13 per cent decline in production due to lower underground tons associated with complex ground conditions which are expected to be of a short term nature. Production levels are expected to be similar in Q4 F2010. Production should improve in F2011 once additional areas are opened up by this underground mine.
In the South America region, Cerro Corona had an outstanding quarter with a 13 per cent increase in gold equivalent ounces produced. This increase was mainly as a result of higher gold and copper grades during the quarter.
On the growth front significant progress was made during the quarter. On-mine exploration at St Ives' Argo-Athena camp, Agnew's Kim and Main Lode's and Damang's Greater Damang and Amoanda North project areas continue to deliver excellent results and we expect to post increases in the reserves of all three of these mines in our next reserve declaration.
At St Ives, the construction of the new Athena underground mine, which is part of the new Argo-Athena Camp referred to above, is on track to produce its first ore in the first quarter of 2011 and reach full production early in F2012. It is estimated that this new mine, which could see St Ives producing in excess of 450koz per annum, will add incremental production of up to 100koz per annum. Feasibility studies of the new Hamlet mine in the same camp are underway.
At the Chucapaca project in Peru, results continue to be positive and the interim scoping study should be completed during Q4 F2010. At Cerro Corona the feasibility study on the exploitation of the oxide stockpiles is progressing rapidly and is expected to be completed by June 2010. This project will enable us to recover an additional 300koz of gold over the next three to five years. An expansion study is also underway at Cerro Corona and this could yield a further modular expansion of production by up to 20 per cent. This study is expected to be completed by December 2010.
Exploration at the Yanfolila project in Mali continues to deliver promising results and our work has outlined possible extensions to the Komana East target. We anticipate completing the scoping study on the Komana East and West targets of this large property by the end of December 2010.
At South Deep, the capital development programme remains on track for this mine to achieve its target of building up to between 750koz and 800koz by the end of 2014. During the quarter we commenced with the deepening of the ventilation shaft, which is a critical milestone in the development of this project. We have also commenced partial hoisting through the newly renovated South shaft. Currently, approximately 60,000 tons of hoisting capacity is available which will assist in the production build up from South Deep. Further increases in this capacity to 120,000 tons will be available post planned rehabilitation over the next three years.
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 about 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
SOURCE Gold Fields Limited
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