Gold Fields slashes annual output target as icy weather bogs down Chile mine
Adds CEO comments and background throughout
By Felix Njini and Nelson Banya
JOHANNESBURG, Aug 23 (Reuters) -Gold Fields GFIJ.J lowered its annual output forecast for the second time this year after unusually harsh winter conditions hobbled a planned output ramp up at a new mine in Chile.
The Johannesburg-based gold miner's initial targets to raise output at the Salares Norte mine in Chile had been "ambitious" after the early and harsh winter conditions resulted in some pipes at its processing plant freezing, CEO Mike Fraser said on Friday.
The CEO added that the icy weather conditions were seasonally unusual and the company lost two months in production time at the mine located in the Atacama region in northern Chile.
"The massive lesson here is attempting a ramp up during winter was the wrong thing," Fraser said.
Gold Fields said its 2024 output is now forecast to be about 7% lower to between 2 million ounces and 2.15 million ounces. The revised output forecast would be its lowest since 2013 when it sold some of its South African mines to Sibanye Stillwater SSWJ.J.
This is also the second time this year that Gold Fields has revised its production forecast after initially targeting 2.43 million ounces of gold. The miner's shares were down 5.66% in early trade in Johannesburg.
The South African company has shifted focus away from its home country to more lucrative deposits in Ghana, Australia and the Americas region. Earlier this month, Gold Fields agreed to buy Canadian miner Osisko OSK.TO for about $1.57 billion.
Fraser said Gold Fields anticipates improvement in the second half of the year and output is expected to rise in 2025.
The miner's profit slumped 30% to $320.7 million in the half year ended June 30, hurt by declining gold output.
It also faced production setbacks at South Deep mine in South Africa and at Gruyere mine in Australia, which was hit by excessive rains, during the reported period.
Gold Fields declared an interim dividend of 3 rand per share.
Reporting by Felix Njini and Nelson Banya in Johannesburg; Editing by Mrigank Dhaniwala, Rashmi Aich and Shounak Dasgupta
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.