Gold Fields, which has a $1-billion financial headroom, boasts a net debt position that is lower than that of most gold majors, says Gold Fields CFO Paul Schmidt, who points out that Gold Fields ratio of net debt to earnings before interest, tax, depreciation and amortisation is 0,48.

"There're very few majors that can boast a number as low as that. I'm very comfortable with the debt at the moment," Schmidt tells Mining Weekly Online.

Available "headroom" is also providing financial flexibility: "We've got almost a billion dollars in available facilities. It's a good position to be in. The reason why we are accessing the commercial paper at the moment is because there is a about 2% cheaper than normal bank debt and it's reflected in our much lower net interest cost," Schmidt adds to Mining Weekly Online.

Gold Fields declared an interim dividend of 50c a share, which amounts to half of the dividend payout in terms of dividend policy and is 65% higher than the interim dividend paid in 2009.

Gold Fields net debt has remained consistent in the December quarter at R6,7-billion, with its decrease of cash on hand to R1,8-billion reflecting a consistent net debt.

Gold Fields leverage to the gold price is reflected in its December quarter operational cash flow rising substantially to R2,1-bilion from R1,2-billion in the September quarter.

Capital expenditure in the quarter was up to R2-billion, most of it going on building infrastructure at South Deep in South Africa and Athena at St Ives in Australia.

It repaid R600-million in loans compared to loans received in the previous quarter of R600-million, a net swing of R1,2-billion

Net profit in the December quarter increased R400-million to R1,6-bilion and normalised earnings to more than R1-billion.

Gold Fields attributable production of 900 000 oz was slightly down on its 906 000 oz in the previous quarter.

The rand gold price with the rand strength at R7,49 saw the rand gold price in the December quarter rise to R263 828/kg, increasing the revenue to R8-billion, with operating costs flat at R4,6-billion.

Operating profit increased 25% to R3,5-billion and the operating profit margin rising to 43%.

Notional cash expenditure rose to R216 830/kg owing to an additional R200-million investment in capital expenditure.

To watch a video on Gold Fields CFO Paul Schmidt on the debt position, go to www.miningweekly.com and click on 'Multimedia' and then on 'Video Clips'

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