By William Clowes.
Gold Fields, a miner of the precious metal in Africa, Australia and South America, said first-half profit more than doubled after bullion prices soared and production rose.
The Johannesburg-based company benefited from gold’s record-breaking rally this year, as elevated geopolitical and economic risks drove haven demand. The average price received by Gold Fields in the six-month period jumped 40% to $3 089 an ounce.
With output also climbing by almost a quarter, that raised net income to $1.03 billion, from $389 million a year earlier, the firm said on Friday. Gold Fields shares rose as much as 2.6%, after more than doubling in value this year.
Now Gold Fields is looking to optimise its assets after striking $4 billion of deals over the past 12 months to take full control of projects in Canada and Australia. That strategy includes designing a “business case for a much longer life” at its Tarkwa mine in Ghana, Chief Executive Officer Mike Fraser said in an interview.
The operation accounted for more than 20% of the company’s first-half output, but is currently expected to run out of reserves in the mid-2030s. A plan to extend Tarkwa’s life would support Gold Fields’ application to renew its mining license beyond 2027, Fraser said.
Gold Fields is also working with Ghana’s government to transfer the Damang mine — a mature operation that contributed less than 5% of its output — to local shareholders. “But, at this stage, we certainly don’t know what that ultimate ownership structure would look like,” the CEO said.
The company still expects to produce 2.25 million to 2.45 million ounces of gold this year, as its new Salares Norte mine in Chile nears commercial output levels. All-in sustaining costs are projected at $1 500 to $1 650 an ounce, less than half the current gold price of about $3 370.
The company “will continue to look and scan” for additional opportunities, but there’s certainly no need for us to do anything at this stage,” Fraser said.