Gold Fields remains steady despite low price environment - CNBC Africa

Gold Fields remains steady despite low price environment


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Gold Fields' normalised earnings for the quarter ended December 2014 were 17 million US dollars. PHOTO: africanbusinessreview

This is an increase in comparison to the same period of the previous year, December 2013, where earnings were at 14 million US dollars.

The company’s net losses for the December 2014 quarter were 26 million US dollars a significant change from net losses of 491 million US dollars for the December 2013 quarter.

“Over the past two years, Gold Fields has undergone a significant transformation that has positioned it to operate successfully in the current low gold price environment. This strategy continues to deliver sound results,” said Nick Holland, CEO of [DATA GFI:Gold Fields].

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"For the sixth consecutive quarter, the group has generated positive cash flow from operating activities with 54 million US dollars generated in the December 2014 quarter, despite the 7 per cent lower average gold price during the quarter,” added Holland.

The South Deep mine gold production increased by 16 per cent to 48,500oz for the quarter.

“This was as a result of the resumption of full production after the ground support programme was completed during the September quarter. However, production for the full year was severely impacted by this four-month remediation programme, reducing by 34 per cent to 200,500oz in 2014,” said Gold Fields.

The mine faces challenges including the ground support remediation programme and a lack of skills in mechanised mining practices.

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With South Africa’s current energy crisis, South Deep has chosen to operate on a load restriction schedule; however, they will not be subjected to load shedding.

“Under Eskom Stage 1 and 2 emergencies, the mine is required to reduce its load by 10 per cent for the duration of the emergency. Thus far, South Deep has only been subject to Stage 1 and 2 emergencies. We expect minimal impact on production due to the excess hoisting and plant capacity at the mine,” the company said.

If the mine has to move to a Stage 3 emergency then they will have to reduce capacity by 20 per cent for the time period of the emergency.