Friday, 19 August 2016

Gold Fields lifts output guidance as South Deep turns corner

In Commodity News 18/08/2016

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Miner Gold Fields lifted its full-year output guidance on Thursday as its mechanised South Deep operation in South Africa picked up steam and its Australia shafts did better than expected in the first half of the year.
* Production at South Deep increased 87 percent to 140,000 ounces from 75,000 ounces in the first half of 2015, driven in part by improved grades.
* Chief Executive Nick Holland said South Deep, the company’s last South African operation, may turn a corner this year and start generating a profit. Its target was to break even in 2016.
* “If the rand/gold price stays where it is, there is a good chance that we can maybe do a little bit better than just break even at South Deep this year,” Holland tells Reuters.
* New mining methods help lift production at South Deep.
* 2016 production guidance for the group increased to between 2.10 million ounces and 2.15 million ounces, from 2.05 million ounces to 2.10 million ounces.
* In line with trading statement, headline earnings for the first half of 2016 were $124 million, or $0.16/share, compared with $5 million, or $0.01/share, reported in the same period a year earlier.
* The increase in earnings was primarily driven by an increase in the U.S. dollar gold price (3 percent) and good cost control which resulted in lower net operating costs in local currencies, as well as the impact of converting these costs at weaker exchange rates.
Source: Reuters [Source text for Eikon: Further company coverage: (Reporting by Ed Stoddard; editing by David Clarke)]