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Gold Fields full-year profits rise, to raise funds

Higher gold prices and increased gold output helped the miner.
Image: Supplied

Gold Fields on Wednesday reported a jump in 2019 profit as the South African miner benefited from increased gold production and a higher gold price.

Gold Fields also said it intended to place new shares to raise about $269 million to help fund its new Salares Norte mining project.

The share placing, which is around 5% of the company’s existing issued ordinary shares, will be done through an accelerated bookbuild.

Salares Norte is expected to have a life of around 11 years and an average annual production of 450 000 ounces of gold over the first seven years, Gold Fields said.

The gold-silver project in Chile is expected to begin producing in the first quarter of 2023.

“Following a review of the alternatives available to the company and consistent with the company’s prudence regarding its debt position, the board believes that a combination of the proceeds of the placing, operational cash flow and existing debt facilities will allow the company to fully fund the construction of Salares Norte,” Gold Fields said in a statement.

The company, which operates producing gold mines in South Africa, Ghana, Australia and Peru, said headline earnings per share (HEPS) rose to $0.20 per share for the full year ended December 31, from $0.07 in the year prior and in line with what the company had flagged to the market.

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

“Gold Fields had a strong finish to 2019, reporting higher production and lower costs for the last quarter of the year,” chief executive officer Nick Holland said in a statement.

The company reported 590 000 ounces of attributable gold production for the final quarter of the year from 523 000 ounces a year earlier.

Attributable equivalent gold production for the miner for 2020 is expected to be between 2 275 million ounces and 2 315 million ounces, it said.

Gold Fields declared a final dividend of 100 South Africa cents per ordinary share giving a gross dividend of 160 cents compared with 40 cents per share in the previous year.

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