Despite challenges in the mining sector, Gold Fields has delivered a solid operating results, with attributable production decreasing 4% (in line with plan) and all-in costs (AIC) rising only 3%.
Normalised earnings decreased by 9% YoY and the company generated free cash flow of US$140m, allowing it to declare an interim dividend of 325 SA cents.
Gold Fields, in its unaudited interim results for the six months ended 30th June 2023, said it recorded adjusted free cash flow from operations of US$482 million. Also, it posted US$1,215 per ounce of all-in sustaining cost and US$1,398 per ounce of all-in cost.
Furthermore, Gold Fields recorded 1.154m ounces of attributable production and US$454m normalised earnings.
The Group announced two corporate actions that underline its strategic imperative of pursuing value accretive deals to grow the value and quality of its portfolio: The proposed Tarkwa/Iduapriem JV in Ghana on 16th March 2023 and the Windfall JV with Osisko Mining in Canada on 2nd May 2023.
“We have also accelerated a number of internally focused initiatives which will further enhance the implementation of our strategy, by unlocking the full potential of our people and assets and drive improved business value. During H1 2023 the focus was on two of these initiatives: Rolling out our culture journey, termed the ‘Gold Fields Way’, and Asset Optimisation.”
Gold Fields
H1 2023 operational performance
Attributable gold equivalent production for H1 2023 was 1,154koz, a 4% decrease YoY (H1 2022: 1,201koz), underpinned by the planned decline in production from Damang.
AIC for H1 2023 was US$1,398/oz, 3% higher than H1 2022 (US$1,352/oz), as a result of lower gold sold and higher cost of sales before amortisation and depreciation, partially offset by lower non-sustaining capital expenditure. Meanwhile, all-in sustaining cost (AISC) for H1 2023 was US$1,215/oz (H1 2022: US$1,148/oz), a 6% increase YoY.
Normalised earnings for the six months ended June 2023 decreased by 9% YoY to US$454m, or US$0.51 per share, compared to US$498m, or US$0.56 per share, for H1 2022.
“In line with our dividend policy of paying out between 30% – 45% of normalised profit as dividends, we have declared an interim dividend of 325 SA cents per share (35.1% of normalised earnings), which compared with the 2022 interim dividend of 300 SA cents per share. This represents a 8% increase YoY.
Health and safety
The company said the safety of its people remains our number one value, and “it is therefore with deep regret that we had to report one operational fatality and three serious injuries during the first half of 2023, the same as in H1 2022. The fatal incident involving a contractor occurred at our Tarkwa mine in Q1 2023”.
In late June 2023, Gold Fields said it also suffered a non-operational fatal incident when a contractor working on the renovation and upgrade of the T&A Stadium in Tarkwa fell from the roof of the stadium.
“The project is funded by the Gold Fields Ghana Foundation. We extend our heartfelt sympathies and condolences to the family, loved ones and colleagues of the deceased,” the company said.
Cash flow and balance sheet
During H1 2023, Gold Fields generated adjusted free cash flow of US$140m (after taking into account all costs and project capex), which compares to US$293m in H1 2022.
The mines generated adjusted free cash flow from operations of US$482m in H1 2023 compared to US$518m in H1 2022. “While our balance sheet remains strong, with a net debt to EBITDA ratio of 0.42x at the end of June 2023, our net debt increased by US$324m during H1 2023 to US$1,028m,” Gold Fields.
This increase was driven by the initial US$222m payment for the Windfall acquisition, US$34m in Windfall pre-construction capital and the US$215m dividend payments.
Excluding lease liabilities, the core net debt was US$629m at the end of H1 2023. In June, Gold Fields successfully refinanced its 2019 revolving credit facility (RCF), with a sustainability linked RCF. The facility has a principal loan amount US$1.2bn with the option to increase it by up to US$400m and a maturity of five years with an option to extend this through two one-year extensions.
Goldfields indicated that loan repayment for the new facility is linked to the achievement of three of Gold Fields’ key ESG priorities: gender diversity, decarbonisation and water stewardship.
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