Gold Fields announces $879m earnings in 2020

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Mining giant, Gold Fields has announced a profit of $879 million for last year, according to its 2020 Financial Results.

This represents $1.00 per share and is compared with normalised profit of $343m (US$0.42 per share) for last year.

Indeed, the company benefited from the windfall of gold prices, following the covid-19 pandemic which compelled investors to invest in gold, considered as a safe haven in periods of economic uncertainties.

A final dividend of 320 South African cents per share (gross) will be payable on 15th March 2021, giving a total dividend for the year ending 31st December 2020 of 480 South African cents per share (gross).

According to Gold Fields, a combination of strong operational performance and an increase in the gold price drove a significant increase in cash flow from operating activities less net capital expenditure, environmental payments, lease payments and redemption of Asanko preference shares of US$631 million, from US$249 million generated during 2019.

Also, there was a significant decrease in the net debt, ending the year at US$1.069 billion. This compares with a net debt balance of US$1.664 billion.

Commenting, Chief Executive Officer, Nick Holland, said “despite the challenges and disruptions experienced during the past 12 months, the integrity of our operations has been maintained while putting our people first.”
“Overall, Gold Fields has delivered a strong set of results for 2020, with production and costs both within the revised guidance. The impact of COVID-19 on the operations was limited to less than 100koz (Cerro Corona and South Deep). Normalising the production for this, the Group would have exceeded the original guidance.”

Regional overview

Ghana

Total production increased by 3% to 862koz in 2020 from 840koz in 2019, primarily driven by the continued build-up in production at Damang.

As expected, Damang had a much improved second half-year 2020 as it moved into the heart of the main orebody.

All-in costs increased by 2% to $1,060 per ounce in 2020 from US$1,039 per ounce in 2019.

The region produced net cash flow (excluding Asanko) of $252m in 2020 compared to $174m in 2019.

Australia

Gold Fields’ Australian operations delivered another strong operational performance in 2020, once again surpassing the one million ounce annual production level.

Gold production increased by 11% to 1,017koz from 914koz in 2019, with Gruyere contributing for the full year in 2020.

The Australia region generated net cash inflow of $498m (A$723m) in 2020, a more than threefold increase from the US$139m in 2019.

Peru

Cerro Corona was the operation in the group that was most impacted by COVID-19 from a production perspective.

Equivalent gold production decreased by 29% to 207.1koz from 292.7koz in 2019, mainly due to the COVID-19 related disruptions and the lower copper price.
Consequently, total all-in costs per equivalent ounce increased by 38% to $1,119 per equivalent ounce from US$810 per equivalent ounce in 2019.

South Africa

The South Deep was the other operation that was materially impacted by COVID-19.

Most of the impact was during first-half year 2020, with the mine recovering well in the second half year 2020.

Gold production at South Deep increased by 2% to 7,056kg (226.9koz) from 6,907kg (222.1koz) in 2019, which was marginally ahead of revised guidance of 7,000kg.

 

Source: Charles Nixon Yeboah

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