Gold Fields sees fall in profit

GOLD Fields said yesterday its full-year profit fell 4%, with production from its last South African asset South Deep falling below guidance.

Diluted headline earnings per share (HEPS) from continuing operations fell to $0.24 for 2017 from $0.25 in the previous year, but in line with what was flagged to the market.

HEPS is the main profit measure used in South Africa that strips out certain one-off items.

Gold Fields unveiled a new plan last year to make its mechanised South Deep mine, which has presented operational challenges in an unforgiving geology 3km beneath the surface, profitable with a production target of 500000 ounces in 2022.

The company said it had incurred a R3.5bn goodwill impairment due to the slow start of the rebase plan over the year at South Deep and a reduction in the gold price and resource price assumptions used in the life of the mine model.

Production at South Deep mine for the year was 11% below original guidance at 281 000oz, compared with 290 000oz in the previous year.

“South Deep was unable to recover from the tough Q1 2017 which was impacted by two fatalities and three falls of ground in the high grade corridors,” the company said.

Gold Fields, which also operates in Ghana and Peru, declared a final dividend of 50c a share, taking the total dividend for the year to 90c compared with R1.10 in the previous period. – Reuters