TORONTO (miningweekly.com) – South Africa-headquartered gold major Gold Fields this week said its corporate restructuring activities would now aim to make a free cash-flow margin of about 15% at a gold price of $1 300/oz.

CEO Nick Holland said the company’s plan for every one of its operations was to make around a 15% margin after paying all the bills, taxes, royalties, capital, etcetera.

“At $1 300/oz we are targeting to get us up to around $200/oz of cash flow after everything,” he told the Denver Gold Forum, in Colorado, on Tuesday.

In order to achieve the goal, Holland said all Gold Fields’ business plans were in the process of being reformatted at that price, which meant it was changing all its cutoff grades and relooking each particular pit and underground operation.

The company was also revising its reserves at $1 300/oz, which Holland said was a break from the tradition of using a three-year trailing average.

“And frankly, if we’re going to make this business exciting for investors to come back into, that’s what we’ve got to achieve. Because right now we’re working for suppliers, we’re working for governments, we’re working for communities, but we need to remember the poor old shareholder who is putting his money into the company.

“If gold prices go down as some people predict to $1 100 or $1 000, we will still be in good shape to survive that,” he said.

As part of the restructuring effort, the company had decided that growth should be consolidated into the individual regions. Broken up into growth and exploration groups, the regions comprise Africa, South America and Australia.

Gold Fields had also reduced its burn rate on projects, halving the project spend to about $74-million this year, and exploration had also been significantly reduced.

Holland predicted that, despite not having finalised the 2014 budgets, those numbers would be “significantly reduced” yet again as the company looked to get razor-sharp focus across its portfolio.

“We were looking at about 16 exploration projects, which is far too many for a company like Gold Fields today. We are looking to have a handful of the best exploration projects, principally in the Americas. That is one of the key areas of growth,” he said.

Further, Holland noted that the gold miner expected to next week close the Yilgarn South transaction, through which it bought TSX-listed Barrick Gold’s Granny Smith, Lawlers and Darlot mines, in Western Australia, for $300-million.

“Once we have concluded our deal in Australia we will have five assets in Australia producing a million ounces, all of them having very significant brownfields growth potential.

“I would rather prefer us, in Australia, to focus on bringing to account the near-term opportunity of those individual mines as opposed to pursuing greenfields projects,” he said.

The Gold Fields chief expected the combined Agnew and Lawlers mines to produce between 250 000 oz and 275 000 oz of gold a year at a cost of about A$900/oz and Granny Smith to produce between 220 000 oz and 245 000 oz of gold at about A$1 150/oz.