Gold Fields gold output slumped marginally to 210,000 ounces of gold (including 45% of Asanko) in Q1 2022, down 3 per cent compared to output in the previous year’s quarter, owing to lower yields and throughput at an all-in sustaining cost (AISC) of US$1,181/oz (up 14% Year-on-Year).
Production at its Tarkwa mine decreased marginally to 128,500oz at end-Q1 2022, representing a decline from end-Q4 2021 at 129,100oz whereas production at the Damang mine came in at 62,000oz, down from 64,500oz in end-Q4 2021.
Similarly, gold production at the Joint Venture (JV) with Galiano Gold, the Asanko Gold mine, saw a production decrease by 16 per cent to 42,300oz (100% basis) and accrued 19,035oz (45% basis) to Gold Fields.
While yield at the Tarkwa mine decreased by 2 per cent to 1.16g/t at end-Q1 2022 from 1.18g/t at Q4 2021, owing to lower grade ore mined and processed, yield at the Damang mine decreased by 2 per cent to 1.64g/t at end-Q1 2022 from 1.67g/t at end-Q4 2021 due to movements in gold-in-circuit and lower recovery.
The company’s operational update for the quarter revealed that while production declined, all-in cost for its Tarkwa mine also increased by 6 per cent to US$967/oz at end-Q1 2022 “mainly due to lower gold sold and higher capital expenditure on the Huni waste stripping, partially offset by lower cost of sales before amortisation and depreciation.”
Similarly, all-in cost at its Damang mine increased by 13 per cent to US$1,269/oz owing to “higher cost of sales before amortisation and depreciation as a result of higher mining cost, lower gold sold and higher capital expenditure.”
Operational Performance of the Group
Despite the global challenges emanating from the impact of the Russia-Ukraine war, the Group had a solid Q1 2022. Attributable equivalent gold production was 580koz, up 7 per cent year-on-year.
Group AISC for the quarter was US$1,150/oz, up 7 per cent Year-on-Year and up 9 per cent Quarter-on-Quarter. All-in cost (AIC) for the Group was US$1,320/oz, 6% higher YoY as project capital expenditure at Salares Norte continued into 2022.
Chris Griffith, CEO of Gold Fields said:
“Q1 2022 was another challenging start to a year from a macro viewpoint. As we finally seemed to have overcome the worst of COVID-19 around the world, the invasion of Ukraine by Russia has had a material impact. Despite the devastation caused by any form of war, the world is being plagued with heightened inflation, driven by high oil and gas prices and more broadly, higher commodity prices.
“While we expected the mining sector to be challenged by high inflation at the start of the year, the impact has been worse than initially expected. High commodity prices have driven inflation in energy costs; logistics and consumables.
Chris Griffith
Net debt at the end of the quarter was US$984 million, compared to US$969 million at the end-Q4 2021, primarily driven by the payment of the final dividend of US$153 million and a non-controlling interest holders’ dividend of US$14 million. The Group generated free cash flow of US$161 million in Q1 2022.
Gold Field’s maintained its production guidance set previously in February 2022, given the solid operational performance in Q1 2022. While inflation comes in as one of the challenges, the report notes that “higher-than-expected copper by-production credit has partially offset the higher cost inflation”.
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