Gold Fields back in the money


Gold Fields back in the money

Published Date: 2020-02-13 | Source: Stephen Gunnion | Author: Stephen Gunnion

Gold Fields back in the money

Given its healthy position, the gold producer says it has decided to go ahead with the construction of its Salares Norte gold-silver project in Chile.

Gold Fields has reported a strong end to its 2019 financial year as it grew production, cut costs and benefitted from a stronger gold prices. It has also seen the positive results of remedial action taken at its South Deep gold mine in SA in 2018.

The gold producer said the last quarter of the year was particularly strong, with gold equivalent production rising 13% quarter-on-quarter, driven by the ramp up at its Gruyere mine in Australia and increased production at St Ives, also in Australia.

Gold Fields has nine operating mines in Australia, Ghana, Peru and South Africa, including its 50% stake in Ghana's Asanko joint venture. It also own the Salares Norte open pit gold-silver project in Chile. It said last year marked the end of a three-year reinvestment programme, which saw it pump $1 billion into its operations. The benefits were likely to continue into this year, it said, with attributable production expected to rise by 4-5% to as much as 2.315 million ounces. The higher gold price placed it in a strong position to generate substantial free cash flow this year.

Given its healthy position, it has decided to go ahead with the construction and development of Salares Norte, which will meaningfully change its future profile, boosting production and resulting in lower all-in costs. It plans to fund the project through the capital markets and with the cash it generates and will dip into existing debt facilities if required.

For the year as a whole, production rose 8% to 2.195 million ounces, beating its target, while all-in costs fell 9%. Headline earnings rose 167% to $163 million, or 20 US cents per share. It's declared a final dividend of R1 per share, taking its total dividend for the year to R1.60, up from 40c the previous year. It cut net debt by more than a quarter to $1.33 billion over the course of the year.

It plans capital expenditure of $630 million for the year ahead including $111 million for Salares Norte. Separately, it said it intended to place just more than 41-million new shares with investors, raising gross proceeds of around R4 billion.

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