JOHANNESBURG (miningweekly.com) - JSE-listed gold producer Gold Fields was likely to reach its short-term production target of one-million ounces in the March quarter, CEO Nick Holland said on Wednesday.

The company, Africa’s second-largest gold producer, produced 798 000 oz in the September quarter, which was down 7% on the previous quarter, owing to safety related rehabilitation work.

Holland noted that the attributable gold production for the December quarter was forecast to increase by around 5%, while the production from the South African operations specifically would increase by 2% owing to the increased production from Beatrix and South Deep mines.
 
He was also confident that Gold Fields would reach its medium-term target of five-million ounces a year.

“We currently have two strategies. The one is obviously to restore Gold Fields to the one-million ounce mark, which we hope to get by March. And then, in line with the whole regionalisation strategy, we want to build each of the America, Australasian, and African regions up to a million ounces, within three or four years.”

Holland said that if the company could achieve this feat, while retaining a stable production at its South Deep operation, it was confident that it could reach the five-million-ounce mark in the next three to four years.

“The growth could be from a number of sources. The cheapest ounce to bring into production would always be the ounces that you find yourself, through organic growth, near mine exploration, and trying to leverage off the existing footprints of our assets around the world.”

However, Holland added that the company was not excluding acquisition opportunities that might present themselves in the near future. “There is no doubt that in these markets right now, there are bargains out there. But I think one has to be circumspect. There are certain things that are cheap for a good reason, and you have to understand and analyse the fundamentals of each of the opportunities.”

Holland added that Gold Fields had a specialised team that was investigating at the opportunities around the world and judge the attractiveness of these opportunities. “I think the important thing is that anything that we buy has to be better than what we already own. We do not want to buy more of the same, we want to improve and upgrade the quality of the portfolio. That will be part of our strategy going forward.”

GOLDEN ASSETS

The company’s first quarter financial results, for the period ended September 30, stated that the company’s gold production was 2% lower than the guidance provided for the quarter, however this was mainly as a result of a slower build-up of the company’s Peruvian asset, the Cerro Corona mine as it took longer to get the plant into a steady state.

The Cerro Corona mine was set to increase production to between 55 000 oz and 60 000 oz by the December quarter, which would be a significant improvement from its current 12 000 oz production. Holland stated that full capacity for this project would be around 90 000 oz a quarter, and the operation was expected to reach this milestone by the March quarter.

The Australian St Ives mine also had a projected increase to around 110 000 oz a quarter. This was up from the 101 000 oz that it generated during the past quarter. Full production, which was also scheduled to be reached during the March quarter, was between 115 000 oz and 120 000 oz.

Holland further added that the rehabilitation project at the South African Kloof mine was expected to be complete by December, while the Ghanaian Tarkwa mill expansion would also be completed before Christmas.

“It is anticipated that production will be around an annualised four-million attributable ounces during the March 2009 quarter. South Africa will contribute about 234-million ounces, once the Kloof mine shaft rehabilitation is complete, with the balance coming from the international operations,” Holland said.

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