Vancouver — A variety of writedowns pushed South African-based Gold Fields (GOLD-Q) deep into the red during the quarter ended June 30.
The major posted a loss of US$194 million, compared with a profit of US$27 million tallied in the corresponding period last year. The decline is attributed to a writedown of the Oryx, Libanon and St. Helena gold mines.
The company also took a hit from the declining market value of investments in Eldorado Gold (ELD-T), Aquest Resources (AQU-V) and Brazilian Gold Fields (BGF-V). The remaining exceptional items relate mainly to a writeoff pertaining to the aborted Franco-Nevada (FN-T) merger and retrenchment costs.
Excluding the one-time charges, the company posted a profit of US$28 million, or $0.06 per share, in the quarter, compared with US$26 million, or $0.06 per share, for the previous quarter.
During the quarter, Gold Fields also saw an 8% decline in gold production to 888,000 oz., down from 923,000 oz. during the March quarter. The decrease in production was attributed to poor operating performance at some mines, including a two-week suspension of operations at the Beatrix Mine after a fatal accident.
Total gold production was 3.94 million oz. for the financial year ended June 30. This was a decrease from the 3.78 million oz. tabled in the previous year. The drop in production was mainly due to the closure of the Libanon mine, cutbacks at St Helena and Oryx, lower underground volumes at the West Wits operations and lower grades at Driefontein.
On May 8, a flammable gas explosion at Beatrix 2 shaft resulted in the death of 13 Gold Fields employees. The accident, the worst ever at Beatrix, led the Department of Minerals and Energy to mandate a cessation of operations at Beatrix 1 and 2 shafts for a period of two weeks.
Be the first to comment on "Tough quarter for Gold Fields"