Gold Fields maintains guidance despite Covid impact

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Gold Fields maintains guidance despite Covid impact

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Published Date: 2021-05-07 | Source: Stephen Gunnion | Author: Stephen Gunnion

Gold Fields maintains guidance despite Covid impact

The South Deep mine in South Africa was affected by the second wave of the pandemic while Cerro Corona in Peru was impacted by unusually wet weather.

Gold Fields says it's on tack to meet its full-year production guidance after holding output steady in the first quarter of its new financial year. That's despite the impact of Covid-19 at the beginning of the year, with a second wave of the pandemic impacting its South Deep gold mine in South Africa, while Cerro Corona in Peru was affected by unusually high rainfall during the quarter.

In an operational update for the three months to 31 March, the gold miner reported production of 541,000 ounces, up from 537,000 a year earlier. Quarter-on-quarter, output fell 8.8%. All-in sustaining costs rose 11% to $1,078 per ounce, while all-in costs grew by 18% to $1,249/oz due to a ramp-up in capital investment at its Salares Norte mine in Chile.

Gold Fields said Salares Norte would be one of its key focus areas in the coming years, with the project so far delivering on time and on budget. Recently-appointed CEO Chris Griffith said after 36 days in the seat, his expectations that the company was well on its way to being a global leader in sustainable mining had been confirmed.

Gold Fields said its board had given the green light for the construction of a 40MW solar plant at South Deep after it was granted a licence by the National Energy Regulator in February. The plant would generate over 20% of the average electricity consumption of the mine. It follows plants that are in operation at its Agnew and Granny Smith mines in Australia as well as the plans for solar plants at Gruyere, also in Australia, and Salares Norte.

The company reiterated that 2021 would be a high capital expenditure year, with the addition of two further projects including the development of the Huni Pit at its Damang mine in Ghana and the South Deep solar plant, which would cost it R318-million this year.

While gold production at South Deep and Cerro Corona would be lower than previously guided, Gold Fields said copper production at the latter would remain at similar levels. The higher copper price had more than offset the impact on a gold equivalent basis, allowing it to keep group guidance intact.

The company's shares rose 3.1% to R143.37 yesterday.





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