Annual Reserve Declaration of 80.6 Million Ounces Reflects Greater Technical and Global Diversification
JOHANNESBURG, May 17, 2012 /PRNewswire/ --
Gold Fields Limited (NYSE & JSE: GFI) today announced net earnings for the March quarter of R2,082 million compared with R2,605 million in the December quarter and R1,100 million in the March 2011 quarter. In US dollar terms net earnings for the March quarter were US$268 million, compared with US$336 million in the December quarter and US$158 million in the March 2011 quarter.
March 2012 quarter salient features:
- Group attributable equivalent gold production of 827,000 ounces;
- Total cash cost of US$870 per ounce;
- Operating margin of 48 per cent and NCE margin of 24 per cent; and
- Project pipeline continues to advance.
Statement by Nick Holland, Chief Executive Officer of Gold Fields:
During the quarter, we regrettably had four fatal accidents at our South African operations. Safety and health remains the most important value in our Group and we will continue, in partnership with the Safety Inspectorate of the Department of Mineral Resources and with organised labour, to focus our efforts on improving our safety performance. Five key areas can lead to sustainable improvements in safety: engineering out risk; ensuring compliance with standards and procedures; improving the health of employees; continuous stakeholder engagement; and behavioural based safety initiatives.
In the March 2012 quarter, Gold Fields reported attributable Group production of 827,000 gold equivalent ounces, similar to the corresponding quarter a year ago (Q1 2011: 830,000 gold equivalent ounces) and 6 per cent lower than in the December 2011 quarter of 883,000 ounces. Production was seasonally lower in the March quarter as it includes the extended Christmas break. Despite the lower production, net earnings remained robust benefiting from a stable gold price combined with continued sound cost control.
Attributable gold production for the year ending December 2012 is expected to be approximately 3.5 million equivalent ounces.
The Group NCE increased by 2 per cent from R313,286 per kilogram (US$1,206 per ounce) in the December quarter to R319,835 per kilogram (US$1,280 per ounce) in the March quarter. This increase was as a result of higher operating costs and lower production, partially offset by lower capital expenditure. The Group reported a NCE margin of 24 per cent for the March 2012 quarter, which was above the short term objective of 20 per cent and broadly in line with the longer term target of 25 per cent.
The March quarter saw steady progress on all of our growth projects. The most significant development being the US$110 million payment made on 20 March 2012 to exercise our option to acquire a 40 per cent interest in the Far Southeast project in the Philippines. The decision to exercise the option earlier than originally planned was linked to positive results from our due diligence and scoping studies at Far Southeast. A pre-feasibility study, including a significant 100,000 metre drilling programme, has commenced, and will concentrate on infill-drilling the exploration target zone to a level appropriate for resource declaration. We still have the option to acquire an additional 20 per cent stake from Lepanto Consolidated Mining Company for US$110 million.
In Peru, the Chucapaca feasibility study is progressing well, with particular emphasis on optimising recoveries, plant design as well as permitting requirements. The study remains on track for completion in the second half of 2012. The Environmental Impact Assessment (EIA) is underway, with submission planned following completion of the feasibility study. Extensive community engagement programmes and activities are continuing.
At the Arctic Platinum project in Finland, activities during the quarter included: resource drilling on the Suhanko North prospect, which has the potential to add meaningful additional tonnes of PGE mineralisation to the original Suhanko project of 140 million tonnes; associated metallurgical test work; and the completion and review of the amendment to the Suhanko Environmental Permit to incorporate the Platsol hydro-metallurgical process was submitted at the end of March 2012. An additional EIA and mining lease application is expected to be submitted later in 2012 to cover Suhanko North and other nearby deposits. Our aim is to complete a pre-feasibility study on the expanded project, including Suhanko North, by the end of 2012.
At the Damang Super-pit project in Ghana, all drilling activities were completed and resource models finalised for execution of the pre-feasibility study. All other activities, including engineering and environmental work are scheduled for completion along with the pre-feasibility study in the second half of 2012. The impact on the project of recently gazetted tax changes, increasing the tax rate from 25 to 35 per cent and the imposing of less favourable capital allowances on the project, are being assessed.
During the quarter we published our Integrated Annual Report for 2011, which includes our latest Mineral Resource and Reserve Statement. Gold Fields has total attributable precious metal and gold equivalent Mineral Reserves of 80.6 million ounces, a 5 per cent increase in reserves after taking into account the inventory mined during 2011. The Mineral Resource position in the West Africa region increased by 46 per cent from 17.3 million ounces to 25.2 million ounces, net of depletion, largely due to discoveries at the Greater Damang project. The total Mineral Reserve in the West Africa region has increased by 21 per cent, from 11.3 million ounces to 13.7 million ounces, net of mine depletion. In the South American region, Cerro Corona's total gold equivalent Mineral Reserve base improved by 15 per cent, from 5.3 million ounces to 6.1 million ounces, net of depletion, primarily due to the increase in the capacity of the tailings storage facility from 99 million tonnes to 130 million tonnes. The improved Mineral Reserve position is in line with our long-term target of 5 million gold-equivalent ounces per year either in production or in development by the end of 2015.
Notes to editors
About Gold Fields
Gold Fields is one of the world's largest unhedged producers of gold with attributable annualised production of 3.5 million gold equivalent ounces from eight operating mines in Australia, Ghana, Peru and South Africa. Gold Fields also has an extensive and diverse global growth pipeline with four major projects in resource development and feasibility, with construction decisions expected in the next 18 to 24 months. Gold Fields has total attributable gold equivalent Mineral Reserves of 80.6 million ounces and Mineral Resources of 217 million ounces. Gold Fields is listed on the JSE Limited (primary listing), the New York Stock Exchange (NYSE), NASDAQ Dubai Limited, Euronext in Brussels (NYX) and the Swiss Exchange (SWX).
Sponsor: J.P. Morgan Equities Limited
Gold Fields Limited
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