Gold Fields net earnings for the September quarter was R102-million (21 cents per share) compared with a net loss of R186-million (39 cents per share) in June, the gold miner announced on Thursday.
Earnings were however down compared to September last year when a sum of R421-million (89 cents per share) was posted.
In a statement, the company listed a number of salient features for the quarter, including:
attributable gold production was on target at 1 007 000 ounces;
costs were well controlled with total cash costs up less than one percent to R66,516 per kilogram;
costs at South African operations quarter-on-quarter were flat at about R73 000 per kilogram, despite a seven percent wage increase; and
an operating profit of R456-million was achieved despite a lower rand gold price and a small planned reduction in the gold produced.
”In line with guidance provided for the quarter, Gold Fields delivered another solid operational performance,” said chief executive Ian Cockerill.
”The strategic repositioning of the South African operations…, to cope with the strong local currency, continues to deliver the expected results, reflecting the inherent quality and flexibility of these assets. Particularly pleasing has been our ability to control costs, offsetting the seven percent wage increase implemented at these operations during the quarter. Our initial target remains to reduce costs at the South African operations to R70 000 per kilogram, and we are striving to achieve this,” Cockerill added.
Cockerill also commented on Harmony Gold Mining Company’s unsolicited and hostile proposal to ”merge” with Gold Fields.
”In accordance with their obligations to act in your (shareholders’) best interest, the board is considering Harmony’s proposal and taking independent advice and the board’s formal response is due to be published shortly.
”I am concerned that Harmony’s proposal may not be in the interests of Gold Fields shareholders as it appears to undervalue Gold Fields’ assets and your shares. Harmony is a company that has recently reported its fifth consecutive quarterly headline loss and is offering you its paper to acquire quality Gold Fields assets. In addition, I am concerned that the two-stage offer structure, which
would not be permitted in other international jurisdictions, could allow Harmony (with the support of Norilsk) to acquire effective control of Gold Fields before a full offer has run its course,” Cockerill said. – Sapa