“In mid-2012, Gold Fields embarked on a fundamental shift in strategy away from an emphasis on ounces of production, to a primary focus on driving margins and cash flow,” commented Nick Holland, chief executive officer of [DATA GFI:GOLD FIELDS LTD.] on the group’s financial results for the year ended 31 December 2013.
“To this end, and to sustain our business in the long-term, we embarked on a process to engineer a sustainable and structural shift in the Group’s cost and production base. This process continued through the December 2013 quarter and will carry on throughout 2014.”
The company announced an increase in normalised earnings for the December 2013 quarter from 120 million rand to 145 million rand. A final dividend of 22 cents per share was also declared and is payable to shareholders on the 10 March 2014.
Production at their Damang improved by 39 per cent from 32,600 ounces to 45,400 ounces and reduced its all in sustaining costs by 27 per cent to 1,261 US dollars.
“Damang is expected to continue its turnaround through 2014 and build on the sound base created in the December 2013 quarter. At a US$1,300 per ounce gold price, Damang has economic Mineral Reserves of 1 million ounces with Mineral Resources of 6.6 million ounces thus providing significant upside potential and optionality,” continued the statement.
Production has also increased due to the successful integration of the Yilgarn South Assets located in Western Australia with a maiden contribution of 114,000 ounces for the quarter at an aggregate all in cost of less than 1,000 US dollars per ounce.
“These assets, which in a short period of time have been restructured to lower their costs in line with the Group objectives and have been fully integrated into the portfolio, are expected to contribute approximately 400,000 ounces during 2014 at 1,000 US dollars per ounce,” add the company.
Gold production at the South Deep project in South Africa, however, decreased by 3 percent from 81,900 ounces to 79,400 ounces mainly due to a decline in reef tonnes mined and processed, offset by an increase in head grade.
Total operating profit for the group increase by ten percent from 283 million US dollars to 312 million US dollars due to a increase in revenue while their net operating costs rose 17 per cent as a result of higher net operating costs offset by the increase in gold sold.
Attributable equivalent gold production for the group for the year ending December 2014 is forecast at around 2.2 million gold ounces.