South Africa’s Gold Fields Ltd is considering putting its Damang mine in Ghana “under care and maintenance” until gold prices recover, the bullion producer said on Thursday.
Gold Fields, which posted flat normalised earnings for its third quarter, said Damang did not benefit from weaker currencies like its mines in other regions and this made it more exposed to sinking gold prices.
The spot price of gold fell about 5 percent over the three months through September on bets that the U.S. central bank would raise interest rates, denting the metal’s safe-harbour appeal.
The bullion producer pays its costs in local currencies, which have mostly weakened, while selling gold in U.S. dollars.
Gold Fields could place Damang under care and maintenance – meaning that although the mine is closed there is the potential to restart production at a later date – or inject more cash into the operation, the company said.
“We are considering various options for Damang which include a recapitalisation of the mine to expose the higher grade ore or whether it would be more appropriate to preserve the inherent value of Damang until gold prices recover,” Gold Fields said.
A firm decision on actions at Damang – a mine that produced 44,400 ounces in the third quarter of this year – would be announced in early 2016, the company said.
Gold Fields, which also operates mines in Australia, South Africa and Peru, said normalised earnings for July-September reached $22 million, the same as the previous quarter. It also said it cut net debt by 3.4 percent to $1.42 billion.