Gold Fields' production, costs beat estimates, but basic earnings fall on impairments
Gold miner Gold Fields beat its production and cost guidance for the financial year ended December 31, but it warns that its earnings a share will be lower year-on-year, mainly on the back of impairments and other one-off items.
In a trading update ahead of the publication of its results, on February 23, the company reports that it expects to report attributable gold-equivalent production of 2.4-million ounces – a 3% increase on the 2.34-million ounces produced in 2021 and higher than the August 2022 guidance of between 2.31-million and 2.36-million ounces.
Further, all-in costs are expected to be 2% higher year-on-year at $1 320/oz, but below the lower end of the guidance range of $1 370/oz to $1 410/oz.
Gold Fields attributes the year-on-year increase in operating costs to mining inflation, which was partially offset by lower project capital expenditure at Salares Norte, in Chile, and weaker exchange rates.
All-in sustaining costs are also expected to be 4% higher year-on-year at $1 105/oz, but below the lower end of the guidance range of $1 140/oz to $1 180/oz.
Gold Fields expects to report a 16% to 22% year-on-year increase in its headline earnings a share to between $1.16 and $1.22. Headline earnings benefited from the $202-million break fee received as a result of the unsuccessful buyout of Yamana Gold.
Basic earnings a share are, meanwhile, expected to range from $0.77 to $0.83 – a 7% to 13% decrease on the basic earnings of $0.89 reported for the 2021 financial year.
Gold Fields attributes the decrease in basic earnings to impairments recognised at the Tarkwa and Cerro Corona operations, in Ghana and Peru, respectively; a writedown of the investment in Far South East; and inflationary cost pressures.
An impairment of $325-million pre-tax was incurred for the Tarkwa mine, while the impairment for Cerro Corona was $63-million pre-tax.
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