Gold Fields well positioned for lower gold price environment – chairperson
Gold Fields chairperson Cheryl Carolus has said that the fundamental recalibration of the company’s business model to focus on innovation has, fortuitously, positioned the miner well for the lower gold price currently seen in the industry.
Gold Fields management had, in 2012, under the leadership of CEO Nick Holland, initiated research into the factors prevent- ing gold mining companies, in general, and Gold Fields, in particular, from capturing the decade-long bull market in their share prices.
Holland subsequently espoused that, for the company to be successful in creating shared value for all stakeholders, it should refocus its business model on cash generation and not on “ounces for ounces’ sake”.
“As a result, during the second half of 2012, Gold Fields engaged in a comprehensive review of its portfolio – both its producing mines and growth projects – to give teeth to the principles put forward in the presentation.
“The key outcomes of this review have fundamentally changed the structure of Gold Fields and the way in which it operates, leading it to slim down its corporate and regional structures, trim its exploration expenditure and to stop min- ing marginal ounces,” Carolus said during an address at the company’s annual general meet- ing last week.
This review culminated in the unbundling of Sibanye Gold earlier this year, which Carolus said would enable Sibanye, with its significant cash generation capability, to pay dividends and extend the productive lives of its mature Kloof, Driefontein and Beatrix mines.
Despite the current slump in the gold price, she remained optimistic about the future of gold, as well as the future of the company.
“We believe that gold remains a very relevant commodity and, with the changes that we have made to our strategy, operating model and structures, that we are now well positioned to benefit from the upturn when it again arrives,” Carolus commented.
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