NYSE- and JSE-listed Gold Fields has generated an attributable profit of $510-million for the six months ended June 30, and declared an interim dividend of R3, or $0.18, apiece.

This compares with an attributable profit of $387-million and a dividend of R2.10, or about $0.12 apiece, for the six months ended June 30, 2021.

While attributable profit grew by 24% year-on-year, the interim dividend increased by 43% year-on-year.

CEO Chris Griffith says that, although the period saw an operating environment dominated by elevated mining cost inflation, as a result of rising commodity and fuel prices, Gold Fields contained the rise in its all-in costs (AIC) to only 6% year-on-year, to $1 352/oz.

The company operates nine mines across Australia, Peru, South Africa, Ghana and Chile, reporting attributable production of 1.2-million ounces of gold for the six months under review, compared with the 1.1-million ounces produced in the six months ended June 30, 2021, marking a 9% year-on-year increase.

The 3% higher gold price this year helped the company to increase its normalised earnings by 16% to $498-million, or $0.56 apiece, compared with the prior interim period’s normalised earnings of $431-million, or $0.49 apiece.

The group also grew its adjusted free cash flow by 63% year-on-year to $293-million.

Gold Fields managed to reduce its net debt by $120-million in the reporting period, with the net debt balance at the end of June standing at $851-million.

The company leaves its cost guidance for the year unchanged at between $1 370/oz and $1 410/oz, excluding the Asanko operation, as higher-than-expected mining inflation is being offset by weaker exchange rates and higher-than-expected copper by-product credit.

Gold Fields forecasts mining inflation reaching 10.9% by the end of the year.

Attributable gold production guidance for the full-year remains at between 2.25-million and 2.29-million ounces, excluding the Asanko operation, which, if included, may see attributable gold production range between 2.31-million and 2.36-million ounces.

Meanwhile, Gold Fields says its Salares Norte project, in Chile, is 77% complete, with construction progressing well.

The company highlights that it has managed to keep the project on track through the challenges of the past two years, including Covid-19 and severe weather events; however, more severe weather events in recent months have resulted in marginal delays in the project timeline.

Gold Fields estimates a three-month delay in the start of production, and, consequently, there may be a knock-on impact in the ramp-up to full production.

The company hopes to start operating the mine in March next year, which should result in 200 000 oz of gold being produced in 2023. Should the mine only start operating at the end of April, however, it will produce closer to 165 000 oz for the year.

The company spent $172-million on developing the project in the six months under review. The project capital expenditure (capex) is expected to be about 5% higher than the original guidance of $86-million, given the potential delay in production.

Overall group capex increased by 20%, from $456-million in the prior half-year to $545-million in the reporting half-year.

In South Africa, Gold Fields reported an increase of 28% in attributable gold production from the South Deep operation to 158 000 oz.

Gold production at the Australian operations increased by 10% year-on-year to 527 400 oz, owing to higher grades of ore mined and processed at the Agnew, Granny Smith and Gruyere operations.

Cerro Corona, in Peru, posted 31% higher interim production of 129 300 oz, mainly owing to higher grades of ore processed and higher recovery rates achieved.

Attributable gold production from the West African operations, including Damang, Asanko and Tarkwa, came in 4% lower at 401 000 oz in the period under review, mainly owing to planned lower production from Damang and Asanko, the latter of which Gold Fields has a 45% stake in.

Gold Fields expects to spend between $1.05-billion and $1.15-billion on capex for the full year, of which sustaining capital accounts for between $625-million and $675-million.