Gold Fields expects its half-year profit to rise by up to 33 per cent, driven by higher metal prices and increased production, but flagged the impact of rising inflation on costs, according to preliminary trading statement and operational results.
Gold Fields expects headline earnings per share (HEPS)– the main profit measure used in South Africa– of between $0.56 and $0.60 for the six months to June 30, 2022 up from $0.45 a year earlier. The gold major expects gold production of 1.201 million ounces, up 9 per cent from 1.104 million ounces.
Basic earnings per share for H1 2021 are expected to range from US$0.55-0.59 per share (US$0.11- 0.15 per share higher), which is 25 per cent to 34 per cent higher than the basic earnings of US$0.44 per share reported for H1 2021.
Normalised earnings per share for H1 2022 are expected to range from US$0.54-0.58 per share (US$0.05-0.09 per share higher), which is 10% to 18% higher than the normalised earnings of US$0.49 per share reported for H1 2021.
Higher operating costs driven by inflation as well as increased capital expenditure at Gold Fields’ Salares Notre project in Chile pushed all-in sustaining costs (AISC) – an industry measure of production costs – by 5 per cent to $1,148 per ounce.
H1 2022 Production Expected to Rise
For Q2 2022, attributable gold equivalent production is expected to be 621koz (Q1 2022: 580koz), with All-in costs (AIC) for the quarter expected to be US$1,382/oz (Q1 2022: US$1,320/oz). All-in sustaining costs (AISC) are expected to be US$1,146/oz (Q1 2022: US$1,150/oz).
Attributable gold equivalent production for H1 2022 is expected to be 1,201koz, a 9 per cent increase year-on-year (H1 2021: 1,104koz).
All-In-Cost for H1 2022 is expected to be US$1,352/oz, higher than H1 2021 (US$1,274/oz), representing a 6 per cent increase year-on-year, as a result of an increase in operating costs driven by mining inflation and the increased project capex at Salares Norte.
AISC for H1 2022 is expected to be US$1,148/oz (H1 2021: US$1,093/ oz), a 5 per cent increase year-on-year. The financial information on which this trading statement is based has not been reviewed, and reported on, by the Company’s external auditors. Gold Fields expects to release its full first-half results on August 25, 2022.
In May 2022, the South Africa-listed miner, which has assets in Africa, Australia and South America, announced plans to acquire Yamana Gold in an all-share deal that valued the Canada-based miner at $6.7 billion on May 31, 2022.
Since announcing the Gold Fields buy-in of Yamana Gold, convincing the company’s shareholders to back its takeover offer for Canada’s Yamana Gold has been “work in progress”.
“We are trying to get them to see the massive upside that exists in this deal. So work in progress is probably the best way to describe it,” Gold Fields CEO, Chris Griffith said.
Given the delay in closing the transaction, there are expectations that the transaction will close in the second half of 2022 subject to and following the satisfaction of the conditions precedent to the transaction.
Griffith said Gold Fields shareholders will vote on the deal in the second week of October 2022. Accordingly, a couple of road shows have been held in recent weeks to “educate” shareholders.
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