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Gold Fields H1 earnings fall on stronger local currencies

South Deep bounces back after a slow start to the year.

Gold Fields posted a 25% drop in first-half normalised earnings on Thursday due to stronger exchange rates in South Africa and Australia, but maintained its full-year targets.

The gold miner said normalised earnings fell to $77 million in the six months to June from $103 million a year earlier.

Gold Fields pays costs in rand and Australian dollars and receives revenue in US dollars.

The company, which also operates in Ghana and Peru, declared an interim dividend of 40 South African cents per share, representing a 20% decline on last year’s first-half payout. 

At the end of last year, Gold Fields started a programme to invest more in its mines in order to maintain production levels and improve costs over the next eight to ten years.

It said Damang mine in Ghana and Gruyere mine in Australia progressed well while its South Deep in South Africa had bounced back after a slow start to the year.

CEO Nick Holland said Gold Fields was unlikely to spend any money on acquisitions or mergers at this stage as the main focus was on the reinvestment program.

Earlier this year Holland said he had about $1 billion of firepower for possible purchases.

Shares in Gold Fields were up 3.7% to R54 by 0715 GMT.

For the year, the company said it still expected gold production to be 2.1-2.15 million ounces. 

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