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Gold Fields remains in a strong position, says interim CEO

Martin Preece has said Gold Fields has a solid production base underpinned by its Australian region which is expected to produce c.1Moz pa for at least the next 10 years

The interim chief executive officer of Gold Fields, Martin Preece said the company remains in a strong position, with high-quality near-term production growth that sets it apart from its global peers.

“we have a disciplined capital allocation framework, focusing on maintaining a strong balance sheet; returning cash to shareholders; investing in our business; and seeking appropriate value accretive external opportunities,” Preece said.

He said Gold Fields has a solid production base underpinned by the company’s Australian region which is expected to produce c.1Moz pa for at least the next 10 years.

In a media release, Preece described 2022 as an “eventful” year for the gold producer, its profit decreased by 13% to US$722-million, while the net profit attributable to the group decreased by 10% to US$711 million.

Headline earnings increased by 19% to US$1.06-billion, but normalised earnings were 7% lower year-on-year at US$860-million.

Cash inflow from operating activities increased by 7% to $1.71-billion, mainly owing to a higher profit before royalties and taxation which was largely as a result of the break fee received in the failed Yamana deal.

Cash inflow was partially offset by a higher royalties and taxation payment and a higher investment in working capital as a result of higher gold in process inventory owing to stockpiling in certain operations in 2022.

In 2022, Gold Fields’ capital expenditure (capex) decreased by 2% to US$1.07-billion, comprising sustaining capex of US$657-million and non-sustaining capex of $412-million.

Group all-inclusive sustaining costs increased by 4% to US$1.1 billion, mainly owing to higher sustaining capex and higher cost of sales before amortisation and depreciation, but partially offset by higher gold sold and the 11% weakening of the rand to US dollar and 8% weakening of the Australian dollar to dollar.

Total all-inclusive costs increased by 2% to US$1 320/oz, mainly owing to higher sustaining capex and higher cost of sales before amortisation and depreciation, partially offset by higher gold sold, lower non-sustaining capex and the 11% weakening of the rand to the dollar and an 8% weakening of the Australian dollar to the dollar.

Mixed production results

According to the release, the mining giant had a mixed production results in the past year.

Attributable equivalent gold production at Asanko – which is excluded from group revenue as a result of Asanko’s revenue being equity accounted – decreased by 19% year-on-year to 76 700 oz.

Gold-equivalent ounces sold (excluding Asanko) increased by 3% to 2.4-million ounces for the period under review.

Managed gold production at the miner’s West African operations decreased by 4% to 838 300 oz, mainly owing to decreased production at Damang with the completion of mining at the Damang pit cutback and decreased production at Asanko as a result of the temporary cessation of mining activities in July 2022 and lower grade material processed from stockpiles.

Gold produced at Tarkwa, increased by 2% to 531 600 oz, while managed production from Damang decreased by 10% to 230 000 oz.

Cornerstone asset

Preece said Tarkwa is a cornerstone asset for the group and is expected to produce about 500 000 oz this year.

Tarkwa is another cornerstone asset for the Group and is expected to produce c.500koz. We have strong production growth from 2024 onwards with the completion and ramp-up of Salares Norte (to 500koz) and
continued build-up at South Deep (to 380koz),” he said.

Gold production at Asanko, in Ghana, decreased by 19% (on a 45% basis) to 76 700 oz (on a 45% basis).

“In 2023, production from Damang will come from a combination of ore from the Huni pit and stockpiles, with only stockpiles being treated from 2024 onwards.”

The interim CEO added, “Cerro Corona will continue to operate at current levels until 2025, after which the level of production will drop significantly as it will also start only processing stockpiles. This lower level of production will continue until the end of the decade which is when the mine is currently scheduled to comes to an end.”

He said Gold Fields is currently pursuing some smaller asset (in the region of 2.2-million to 2.5-million ounces) deals.

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