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Business & Finance

Gold Fields warns of heavy hits to production in first quarter

By : cd on 03 Apr 2024, 10:15     |     Source: Miningmx

Gold Fields warned first quarter production would be lower than forecast owing to weather related disruptions at its Australian and South American mines while a fatality at South Deep in South Africa interrupted “operational momentum”.

Production would come in between 460,000 and 470,000 ounces for the quarter which is roughly 110,000 oz below the assumed run-rate required to meet the upper end of annual guidance of 2.33 to 2.43 million oz that Gold Fields maintained today.

The lower production would inevitably hit costs but Gold Fields didn’t provide details. The company is due to report its numbers on May 23. It had previously guided to all-in sustaining costs (AISC) for the year of $1,410 per ounce to $1,460/oz.

“Severe weather” conditions in Australia affected all Gold Fields’ mines but it had a particular impact at Gruyere. Mining at the operation was suspended on March 5 after the closure of roads that supply it although low grade stockpiles are being processed.

Production from the mine is expected to be 64,300 oz on a 100% basis for the quarter. A three day maintenance programme planned for April has been brought forward.

“The access road remains closed with no firm date on when it will re-open,” said Gold Fields which added it was “assessing options to bring fuel and supplies in via alternative routes to enable a resumption of the operations”.

Production at Cerro Corona in Peru was also affected by inclement weather resulting in the resequencing of mining to the lower-grade areas. Gold output is expected to be 40,000 and 42,000 oz for the quarter, the group said.

First quarter production at South Deep would be between 57,400 and 58,000 oz – lower than planned owing to a fatality and reduced stope access. Gold Fields said it was resolving these constraints.

There was better news for Gold Fields Salares Norte project in Chile. The $1.18bn to $1.2bn project delivered first gold in the quarter and is expected to meet restated guidance of 250,000 oz this year at an all in cost (AIC) of $1,790 to $1,850/oz. Gold production in 2025 was expected to increase to 580,000 oz and average 485,000 oz over the first five years of mine life.

“Salares Norte is a world class project with one of the industry’s lower cost profiles and a payback period of less than three years at current gold prices,” said Mike Fraser, CEO of Gold Fields in a statement.

Salares Norte ran into heavy delays last year but the current ramp up programme was deemed by engineering company Hatch to be realistic.