Lending Association

Gold Fields sticks to its 2024 output guidance

Despite weaker than expected March quarter production, Gold Fields is sticking to its 2024 full year output guidance it boosted in February.

The global gold giant revealed on Tuesday that problems in South Africa as well as weather events in Australia and Peru held back production in the three months to March 31.

The South African based miner said that attributable gold equivalent production for the quarter–excluding the 45% owned Asanko operations-in Ghana -is expected to be between 460,000 ounces and 470,000 ounces.

The company said operations at South Deep mine in South Africa were impacted by a fatal accident on January 2, and reduced access. The group expects production in the mine to be between 57,400 ounces and 58,000 ounces.

Production at its gold mines in WA was impacted in the quarter on at least two occasions by heavy rain events last month. The 50% owned Gruyere mine (Gold Road Resources, 50%) was especially impacted with Gold Road revealing on Tuesday that the mine produced about 64,300 ounces in the quarter, down 22% from the 82,000 ounces produced in the first quarter of 2023.

Gold Road said in its usual start of quarter brief update on Tuesday that mining has been disrupted since early March by the two rain events in the month. While it managed to continue producing lower grade ore stockpiles, it warned of the impact on final figures for the quarter, especially costs.

“Final gold production and All-in sustaining costs (AISC) for the quarter will be released in Gold Road’s quarterly report in late April. All-in sustaining costs are expected to be impacted by the lower gold production and lower mining volumes,” Gold Road said in Tuesday’s release.

The last event on March 28 saw plant at the Gruyere mine shut down and maintenance brought forward (“to minimise the impact on annual production”according to Gold Road) when roads were again cut in the Laverton area. The company expects limited mining activities to resume this week at Gruyere.

In its statement to exchanges offshore, Gold Fields says that despite these problems, it is holding to 2024 guidance of gold equivalent production between 2.33 million ounces and 2.43 million ounces, and all-in sustaining costs between $US1,410 and $US1,460 per ounce.

Gold Fields added that it has started production at the $US1 billion Salares Norte project in northern Chile with the delivery of the first gold on March 28.

It was only mid February in the company’s 2023 financial results that the company lifted the 2024 guidance because of the rapid production ramp-up at the Salares Norte.

Construction of the mine started in 2020 with production initially expected in early 2023. However, the mine missed several targets due to delays caused by COVID-19 and bad weather.

Salares Norte is key to Gold Fields’ long-term goal of raising output to about 2.8 million ounces annually with production around 250,000 ounces expected this year and more than doubling to 580,000 ounces in 2025.

Gold Fields reported a 21% decline in headline earnings to $US837 million in the year to December 2023, down from $US1.06 billion the previous year, on the back of a dip in output and higher costs.

Its attributable gold production of 2.304 million ounces was 4% lower than the previous year’s, while all-in-sustaining costs – an industry measure – rose 17% to $US1,295 per ounce.

Gold Fields’ 2023 earnings looked lower because its 2022 results were boosted by a $US202 million break fee it received after its failed bid to acquire Canada’s Yamana Gold. Deduct that from the comparison with 2022 and 2023 results looks a bit better.