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Gold Fields reviewing future of Damang mine - BDlive

Thursday, 19 November 2015

GOLD Fields is reviewing options around the future of its Damang mine in Ghana, which is struggling with a weakening dollar gold price, the company said in its September quarter results which showed increased gold output and higher Gold Fields reviewing future of Damang mine GOLD Fields is reviewing options around the future of its Damang mine in Ghana, which is struggling...

GOLD Fields is reviewing options around the future of its Damang mine in Ghana, which is struggling with a weakening dollar gold price, the company said in its September quarter results which showed increased gold output and higher earnings.

Gold Fields posted attributable net earnings of $18m for the three months to September 30 compared with $12m in the June quarter and $19m a year ago.

It reported headline earnings of $21m for the September quarter, up from $19m in the previous quarter.

Gold Fields achieved an average gold price of $1,103/oz for the quarter, which was 6% lower than the price it realised in the June quarter.

"As the gold price continues to languish, we constantly review our portfolio," CEO Nick Holland said. "While the weaker currencies offer some respite in most regions, Ghana is fully exposed to further declines in the dollar gold price.

"In particular, Damang is challenged in the current environment and, as such, we are considering various options for Damang, which include a recapitalisation of the mine to expose the higher grade ore or whether it would be more appropriate to preserve the inherent value of Damang until gold prices recover."

Gold Fields would unveil its decision early next year, Mr Holland said.

The standout performance in the quarter after an extended period of difficulties was South Deep in SA, the last remaining Gold Fields’ asset in the country and one that is still in development.

Gold output at the mine shot up 42% to nearly 55,000oz compared with the previous quarter as a result of higher yield and increased milled tonnages.

Full-year production is forecast to be as high as 193,000oz, with the second half’s production 50% higher than the first half as renewed management focus on the mine and a fresh approach to the way the mine is being developed take effect.

Other mines contributing to the group’s higher total gold production were Damang and three mines in Australia, all of which offset lower production from the Cerro Corono mine in Peru, Tarkwa in Ghana and St Ives in Australia.

The lower gold price offset the 2% increase in gold sales of 576,000oz in the quarter, pushing revenue down 4% to $635m.

Operating profit fell 3% to $269m compared with the June quarter.


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