Johannesburg, South Africa — 22 August 2013 – Gold Fields Limited, which spun off most of its South African assets earlier this year, has suffered a second-quarter loss and suspended its dividend after a slump in prices. It also agreed to pay US$300 million to buy three Barrick Gold Corporation mines in Australia.
Gold Fields’ loss excluding certain items was US$36 million in the second quarter, compared with a profit of US$68.3 million in the first, reports Bloomberg News. Gold production at its South Deep mine in South Africa is unlikely to achieve the annual target of 700,000oz set for 2016, the company said.
“Due to the significant decline in the gold price, the group has made a loss for the quarter,” the Johannesburg-based company said. “Management and the board are also concerned about gold price volatility in the short-term. As a result, the Gold Fields board has deemed it prudent not to declare an interim dividend.”
South African miners including Gold Fields are battling rising power costs and union wage demands that exceed inflation at a time when gold prices have dropped 28% from their 2011 peak. AngloGold Ashanti Limited, Sibanye Gold Limited and Harmony Gold Mining Company preserved cash by skipping dividends as gold prices sank and the threat of strikes loomed this year.
Gold Fields will pay US$300 million, subject to capital adjustments of as much as US$30 million, for Toronto-based Barrick’s Yilgarn South assets in Western Australia, it revealed in a separate statement.
The deal will add 452,000oz of annual production and make Australia Gold Fields’ largest regional production centre at 42%, with Ghana accounting for 34% and Peru and South Africa 11% each, the statement added.
Gold Fields spun off all of its South African assets, apart from the largely mechanised South Deep mine, to create Sibanye and focus on higher-growth sites in Australia, Peru and Ghana.
Second-quarter production was 451,000 ounces of gold, 5% lower than in the previous three-month period, at a total all-in cost of US$1,572 an ounce.
Source: Bloomberg News. For more information, click here.