Cape Times E-dition

Gold Fields revises down guidance for South Deep

DINEO FAKU dineo.faku@inl.co.za

GOLD FIELDS expected South Deep mine, south west of Johannesburg, to produce less gold and incur higher production costs this year after taking into account the impact of the second wave of the Covid-19 pandemic, the group said yesterday.

In revising the 2021 guidance for South Deep, Gold Fields said the original guidance published in February had excluded any impacts due to Covid-19, as these were indeterminable.

“As a result of the impact of the second wave of Covid-19 on the operation during the March quarter, it became necessary to update the 2021 guidance for South Deep,” the group said.

South Deep’s gold production guidance for 2021 was reduced to 8 700 kilograms (280 000 ounces), down from the original 9 000kg.

Gold Fields said South Deep’s sustaining capital expenditure was revised upwards to R1.219 billion, including the solar plant, up from the original guidance of R889 million.

On Wednesday, Gold Fields announced that the board had approved the construction of a R660m 40 megawatt solar plant at South Deep.

The solar plant was expected to save the mine R120m in electricity costs a year, and will provide 20 percent of the mine’s average power consumption.

South Deep’s all-in sustaining costs increased to R672 000 a kilogram for 2021, up from the R620 000 a kilogram original guidance, while the total all-in cost had risen to R712 000 a kilogram, while the original guidance was R660 000 a kilogram.

Gold Fields said gold production at South Deep had declined by 3 percent to 1 858kg in the March quarter from 1 914kg in the December quarter as a result of lower tons milled, partially offset by a marginally higher total yield.

Gold Fields operates mines in Australia, Ghana, Peru and South Africa, and is one of the world’s biggest gold producers.

The group said 2021 was a high capital expenditure year. In addition to the South Deep solar plant, it had approved the development of the $42m (R605m) Huni Pit in Damang mine in Ghana, aimed at boosting production.

It was making progress with the construction of its Salares Norte mine in Chile.

Newly appointed chief executive Chris Griffith said the project had maintained its positive momentum and continued to track ahead of schedule during the first quarter to the end of March.

During the March quarter, the group spent $86.9m, comprising $58.6m in capex, S$7.6m in exploration, a $27.6m investment in working capital and a credit of $9.7m from the realised portion of the forex hedge.

“Encouragingly, the detailed engineering was completed in January, and pending work is being tracked through a punch list.

“Relocation of Chinchilla remains on hold, and we continue to work with the authorities around a revised plan. The team continues to monitor the two Chinchilla that had already been relocated,” said Griffith.

Gold Fields said during the quarter to the end of March construction had progressed 7.7 percent, bringing the overall construction progress at the end of March to 23.3 percent, ahead of the planned 18.8 percent.

The company said camp construction was completed three months ahead of schedule and included an additional module to accommodate Covid-19 restriction measures and allow for the distancing of employees.

The plant office complex progressed to 90 percent, two months ahead of the plan, and the plant canteen became fully operational on April 1.

Gold Fields shares closed 3.09 percent higher at R143.37 on the JSE yesterday.

BR

en-za

2021-05-07T07:00:00.0000000Z

2021-05-07T07:00:00.0000000Z

https://capetimes.pressreader.com/article/281904481048593

African News Agency