Gold Fields lowers full-year target for South Deep


Gold Fields lowers full-year target for South Deep

Published Date: 2017-10-24 | Source: Stephen Gunnion | Author: Stephen Gunnion

Gold Fields lowers full-year target for South Deep

The miner is maintaining its output target despite South Deep miss

Gold Fields has bounced back from a poor second quarter, lifting production by 3% in the three months to end September, while all-in sustaining costs were 5% lower. However, despite an improvement in production at its South Deep mine, it won't be able to recover the full extent of the weak March quarter when output was affected by safety stoppages following two fatalities. Full-year production from the mine is now expected to be 5% to 10% below its original guidance.

Gold Fields says it's keeping its total production target unchanged as its other mines make up for the shortfall at South Deep. In the September quarter, gold equivalent production at its Cerro Corona mine in Peru was 31% higher. Managed production in Ghana contracted 4% as it spent $34 million in project capital on the Damang reinvestment project. Production in Australia was 3% lower.

CEO Nick Holland says the group generated net cash flow of $85 million compared with an outflow of $67 million in the second quarter, a positive swing of $152 million. That's after the capital expenditure at Damang, as well as $17 million at its Gruyere project in Australia, $12 million at Salares Norte in Chile and $4 million at South Deep. Excluding the $67 million of capex, net cash flow for the quarter would have been $152 million, after paying interest of $19 million.

Its shares slid 0.8% to R54.78 yesterday.

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