Gold Fields’ net debt position is lower than that of most gold majors, says CFO Paul Schmidt, who points out that the 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.”

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 that it is about 2% cheaper than normal bank debt and it’s reflected in our much lower net interest cost,” Schmidt tells Min-ing Weekly.

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 with loans of R600-mil-lion received in the previous quarter, a net swing of R1,2-billion.

Net profit in the December quarter increased R400-million, to R1,6-billion, 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, rose 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 in which Gold Fields CFO Paul Schmidt tells Mining Weekly Online’s Martin Creamer that Gold Fields finances are in very good shape, click here.

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