Gold Fields has reported lower production for the quarter ended March, but has kept its full-year production guidance unchanged.
Production for the quarter was severely affected by weather-related events and operational challenges particularly at the Gruyere, St Ives, South Deep and Cerro Corona mines, the group said in a statement on Tuesday.
This resulted in group attributable equivalent gold production (excluding Asanko) for the quarter of 464,000oz — 18% lower year on year and down 22% quarter on quarter. All-in sustaining costs were $1,738/oz in the quarter compared with $1,372/oz in the previous quarter.
Despite the challenges experienced in the quarter, annual group production and cost guidance for 2024 remain unchanged.
Speaking to investors on Tuesday, CEO Mike Fraser said while group production guidance for the year remained unchanged, guidance for South Deep and Salares Norte — which together account for about 22% of total production — had been revised downward.
“We expect to accelerate production for the balance of the year to meet the annual production and cost guidance. Many of our operations have back-ended production profiles, which should see a stronger second half,” he said.
“We certainly know what is required to deliver on the numbers and feel quite confident we meet our revised guidance. There is a clear intention to not have another disappointing quarter, and while the second quarter might see some improvement, the real improvement will come in the second half of the year.”
Group attributable gold equivalent production (excluding Asanko) for 2024 is expected to be between 2.33-million and 2.43-million ounces, with gold production weighted to the second half of 2024.
The group reported two deaths at its operations this year. On January 2 an engineering supervisor died in an incident involving trackless mining equipment underground at South Deep mine. The other incident occurred at the group’s St Ives mine in Australia on April 23, when a colleague employed by a contractor was killed in a mobile equipment-related incident at a construction site on the mine.
‘Fatality-free’
“These tragic incidents are deeply concerning for us, as we strongly believe that a fatality-free mining business is possible,” the group said.
It has initiated an independent review of its safety culture, processes, systems and practices. The review, which started in February, is expected to be completed in the first half of 2024.
The death affected operational momentum at South Deep, where gold production for the quarter was 34% lower year on year and 32% lower quarter on quarter at 56,300oz.
“Backfill rehandling is presenting the most impactful challenge to production. The mine has developed a recovery plan to address this,” it said.
South Deep’s attributable gold equivalent production for 2024 is expected to be in the range of 9,500kg-9,700kg, in line with gold mined in 2023. The mine’s all-in sustaining costs for 2024 is expected to be higher than initial guidance at $1,590/oz-$1,625/oz mainly due to the lower production volumes.
Lower grades
Production at its Australian operations — Gruyere and St Ives — was 22% and 26% lower year on year.
At Cerro Corona in Peru, attributable gold equivalent production was 44% lower year on year, affected by lower gold and copper grades processed and lower metallurgical recoveries, in line with the long-term mining plan. Inclement weather during the quarter also played a role.
On March 28, the Salares Norte project in northern Chile delivered its first gold, a milestone for the project that Gold Fields has taken from discovery, through resource and reserve development and project development into production over a 13-year journey, it said.
The group’s net debt at the end of the quarter was $1.143bn compared with $1.024bn at end-December. Gold Fields’ $500m current outstanding bond becomes redeemable on May 15 and will be redeemed using a portion of the group’s $1.2bn revolving credit facility.
Group all-in sustaining costs is expected to be $1,410-$1,460/oz while all-in costs is guided to be $1,600--$1,650/oz for the year. Capital expenditure for the year is guided at $1.130bn-$1.190bn, it said.
Update: May 7 2024
This story has been updated with new information.
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