Johannesburg - Gold Fields, which claims to have posted the best quarterly safety achievement of all South African gold miners, recorded a fall in gold production and a rise in costs as it repaired its mines to make them safer places to work and to reach a quarterly output of one million ounces.
Gold production in the September quarter, which is the first in Gold Fields' 2009 financial year, fell 8% quarter-on-quarter and 19% year-on-year to 798 000 oz.
It was slightly lower than the market guidance issued in August because a slower-than-expected ramp-up of production at the Cerro Corona mine in Peru failed to offset planned decreases at the South African mines.
Cash costs came in at R153 461/kg or $617/oz, in line with guidance, but 22% higher than the June quarter and well above the R98 500 a year ago.
'Clean-up quarter'
"This really was a clean-up quarter where we expected to have significantly lower earnings on the back of the lower production and the cost increases, but we remain well set to get Gold Fields back up to a million ounces a quarter by March," CEO Nick Holland said.
Normalised net earnings plunged to R120m in the September quarter from R943m in the previous period and R409m in the same period a year ago.
The copper gold porphyry project at Cerro Corona will produce between 55 000 and 60nbsp;000 gold equivalent ounces in the December quarter and the Kloof mine, where the main shaft is being rehabilitated, will be back in full swing from January.
Cerro Corona shipped 12nbsp;000 equivalent oz in the September quarter.
The Tarkwa mill expansion in south-western Ghana will be completed in December and operating in January. St Ives in western Australia is projected to produce 110nbsp;000 oz/quarter from 100nbsp;000 oz and then rising to at least 115nbsp;000 oz by March.
The South Deep rehabilitation project of two underground shafts is completed and the mine is ramping up again. Two thousand people have been retrenched from the mine.
"I look forward to this operation restoring itself to profitability," Holland said.
Uranium potential
In the next three to five years, Gold Fields intends producing five million ounces of gold, with the bulk of that coming from South Africa and a million ounces from each of its three regions: South America, West Africa and Australasia, including China.
In the December quarter, Gold Fields estimates it will produce 840 000 oz, with notional cash expenditure (operating costs plus capital expenditure) easing to $890/oz from $909 in the September period.
Holland is keen to extract value from Gold Fields' uranium potential, which is contained in tailings and as a by-product, and the company is spending R160m to study the economic values in two projects.
A full-feasibility study on the Driefontein tailing will be completed in February. The 77 million tonnes of tailings are estimated to have 21 million pounds of uranium, according to a 2007 pre-feasibility study.
There's the historical tailings opportunity, which is estimated to be 392 million tonnes at 74 g/t uranium content producing 28 million pounds of uranium and 2 million ounces of gold. A pre-feasibility study will be completed in April next year.
"A financial model has been developed to evaluate the different treatment options and to determine the most suitable business model for this project. Partners will be brought in where required," Holland said.
- Miningmx.com
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