With an all-inclusive cost (AIC) of $1 279/oz and sustaining cost of $1 061/oz, JSE- and NYSE-listed Gold Fields produced 597 000 oz of gold in the third quarter ended September 30.
CEO Chris Griffith says the company – with nine operations across South Africa, Ghana, Peru, Chile and Australia – had a stable third quarter, with attributable gold equivalent production of 597 000 oz – down 1% year-on-year and 4% quarter-on-quarter.
As such, Gold Fields is on track to achieve its full-year guidance of producing between 2.25-million and 2.29-million ounces.
Meanwhile, in terms of its acquisition of Yamana Gold, he says “good progress” is being made, with the company having received approval for the transaction from the Canadian government under the Investment Canada Act.
Gold Fields will hold a general meeting on November 22, during which shareholders will vote in favour or against the transaction.
Meanwhile, during the third quarter, there was an increase in the group’s net debt balance, including leases, to $997-million, from $851-million at the end of the second quarter, mainly as a result of the interim dividend payment of $151-million.
“This translates into a net debt to earnings before interest, taxes, depreciation and amortisation of 0.40 times, compared with 0.33 times at [the end of the second quarter],” says Griffith.
As such, the miner’s net debt balance, excluding leases, increased to $603-million at period’s end, up from the $451-million at the end of the second quarter.
Griffth says the South Deep mine, in South Africa, increased its output by 2% quarter-on-quarter, with managed production totalling 88 000 oz at an AIC of R649 812/kg ($1 176/oz) and all-in sustaining costs (AISC) of R624 701/kg ($1 131/oz).
For the period, Gold Fields’ AIC increased by 1% year-on-year, but decreased by 7% quarter-on-quarter; while AISC increased by 4% year-on-year, but decreased by 7% quarter-on-quarter.
“AIC would have decreased by 6% quarter-on-quarter to $1 145/oz from $1 220/oz if we exclude the significant project capital expenditure (capex) at [our Chile-based] Salares Norte,” says Griffith.
The Australian region produced 258 000 oz of gold at an AIC of A$1 707/oz ($1 159/oz) and AISC of A$1 517/oz ($1 029/oz), while on a managed basis, the miner’s Ghana-based mines (Tarwa, Damang and Asanko) produced 215 000 oz at an AIC of $1 134/oz and an AISC of $1 101/oz.
The Peru-based Cerro Corona mine produced 60 000 oz of gold equivalent at an AIC of $1 035 per gold-equivalent ounce and an AISC of $948 per gold equivalent ounce.
However, the Salares Norte mine was impacted by ongoing construction activities and Covid-19 implications, together with severe weather conditions that flowed over from the second quarter.
As such, Gold Fields had to spend $80.5-million on the project – which is 82% complete – during the quarter, comprising mainly $70.9-million in capex, $3.5-million in exploration, a $3.7-million investment in working capital and a realised loss of $3.7-million on the foreign exchange hedge.
This totalled $253-million spent on Salares Norte for the year to date.
Griffith says mining cost inflation has been higher than initially expected, but that the weaker exchange rates – of R16.49 to the dollar and A$0.69 to the dollar – have partially offset the higher cost inflation.
In terms of diversifying its energy sources, he says “significant progress” is being made in the rollout of renewable energy at group operations, including the $20-million 12 MW solar photovoltaic and 4.4 MW battery plant at the Australia-based Gruyere becoming fully operational in August.
In addition, the 50 MW Khanyisa solar PV plant at Gold Fields' South Africa-based South Deep mine was fully commissioned in October, and had already achieved peak production of 47.5 MW. To date, the Khanyisa plant has generated 8.3 GWh.