“The loss occurred in the three months to June compared to the previous quarter’s earnings of 27 million US dollars, this resulted in a loss of 18 US cents per share,” said international gold mining company,Gold Fields, [DATA GFI:GOLD FIELDS LIMITED.] in a statement released on Thursday.
The loss is mostly derived from impairments at Gold Field’s Ghana plants. The impairment charges cost 143 million US dollars at its Tarkwa operation and 127 million US dollars at its Damang operation. The company’s decision to curtail processing activities at the two operations was due to the declining gold price.
The average gold price in June 2013 was 13 per cent lower at 1.405 US dollars an ounce and the spot price lost around 30 per cent since its record high of just over 1,920 UU dollars in September 2011.
Another contributing factor to the quarterly loss was the lower revenue resulting from a decline in production. Total gold production decreased by 5 per cent from 477,000 ounces in March 2013 to 451,000 ounces in June.
Revenue declined by 21 per cent from 805 million to 637 million US dollars, mainly due to the illegal strikes at the Ghana operations.
The company regrettably had also reported a fatal injury at their south deep mine in South Africa.
“It is with deep regret that we report that one of our colleagues was fatally injured after a fall of ground accident at a destress section at South Deep during the quarter. This was after a period of 3,923,208 shifts and 805 days without a fatality at South Deep,” Nick Holland, Chief Executive Officer of Gold Fields said in a statement.
The group has now seized the practice of manual support drilling in the hanging wall of distress sections and a new standard has been implemented whereby all drilling is now remotely operated.
“Work place injuries of any nature are unacceptable and the safety of our people is not negotiable. We will not mine if we cannot mine safely,” said the statement.
Gold Fields also reported that they are in the process of acquiring Barrick Gold Corporation’s Granny Smith, Lawlers and Darlot gold mines situated in Western Australia for a total of 300 million US dollars.
The group’s outlook for the company remains positive as they intend to focus on cash generation rather than ounces by reducing marginal mining and aggressively seeking cost reductions.
“The objective is to retain the integrity of our operations and to position the group for profitability at current spot gold prices,” concluded the statement.