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Gold Fields pays dividend on net loss, flat production, two fatalities

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Gold Fields pays dividend on net loss, flat production, two fatalities

Photo by Duane Daws
Gold Fields CEO Nick Holland

14th February 2018

By: Martin Creamer
Creamer Media Editor

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JOHANNESBURG (miningweekly.com) - Gold mining company Gold Fields on Wednesday announced a final dividend on a net loss and flat production, impacted by two fatalities.

As per its trading statement released on February 8, headline earnings for 2017 were $194-million, or $0.24 a share, and net loss for the year was $35-million, or $0.04 a share. Normalised earnings for the year were $138-million, or $0.17 a share.

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In the 12 months to December 31, the Johannesburg- and New York-listed company achieved normalised earnings from continuing operations of $141-million, down on 2016's $190-million, and 1% higher attributable gold production of 2.16-million ounces, which exceeded guidance.

A final dividend of 50c a share was declared, taking the total dividend for 2017 to 90c a share.

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The group was largely cash neutral in 2017 on the back of better than expected gold prices and outperformance from the international operations.

Net cash outflow was $2-million during 2017 when the company invested project capital of $115-million at the Damang gold mine in Ghana, $81-million at Gruyere in Australia, $17-million at South Deep in South Africa, $53-million on the feasibility study at Salares Norte in South America and $60-million on the deferred portion of the purchase price for 50% of Gruyere.

Excluding growth projects, cash flow from operations was $329-million, prompting another year of high capital expenditure in 2018 on Gruyere and Damang.

All-in sustaining costs were a lower $955/oz and all-in costs $1 088/oz with international operations all exceeding guidance.

However, South Deep was impacted by two fatalities and three falls of ground in the high grade corridors, with production for the year 11% below original guidance and costs 3% above guidance.

On the back of the cash breakeven position from operating activities achieved for the year, the net debt at December 31 was a higher $1 303-million when compared with $1 166-million at the end of 2016, implying a net debt to adjusted earnings before interest, taxation, depreciation and amortisation (Ebitda) of 1.03 times, compared to 0.95 times at the end of December 2016 and largely in line with the target of 1.0 times.

"Gold Fields balance sheet remains in a strong position to complete its reinvestment phase," Gold Fields CEO Nick Holland stated in a release to Creamer Media's Mining Weekly Online.

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