Gold Fields improves earnings

South African-based Gold Fields (GOLD-Q) increased its earnings in the first quarter despite a 3% drop in the price of gold over the past three months.

The company turned a profit of US$36.9 million (or 8 per share), an increase of 20% over the US$31.5 million (7 per share) earned in the first quarter of 1999.

Gold production during the recent 3-month period totalled 959,000 oz. at an average cash cost of US$217 per oz., compared with 990,000 oz. at US$220 per oz. a year ago.

“Despite March being a traditionally difficult quarter, Gold Fields experienced steady performance, highlighted by costs that continue to be under control,” says Gold Fields Chairman Christoper Thompson.

Gold Fields realized a metal price of US$291 per oz. gold, down from US$296 in the fourth quarter of 1999. However, a weakened exchange rate between the South African rand and the dollar helped offset the lower prices.

At the Driefontein mine in South Africa, operating costs fell to US$202 per oz., compared with US$217 per oz. in the previous quarter. The mine produced 366,000 oz., down slightly from 370,000 oz. in the last three months of 1999.

In Ghana, where the company holds a 71.1% interest in the Tarkwa heap-leach mine, gold production increased to 73,700 oz. at a cash operating cost of US$206 per oz. Toronto-based Repadre Capital (RPD-T) has an 18.9% indirect interest in the mine.

Meanwhile, Gold Fields has formed a joint venture with Tanami Gold to explore the Solitaire project in Australia’s Northern Territory.

Gold Fields can earn an initial 25% interest in the property by spending A$1.5 million, and this can be increased to 51% in return for an additional expenditure of A$1 million over three years. By completing a bankable feasibility study, Gold Fields can boost its interest further still, to 60%.

Gutnick Resources holds an 11.4% stake in Tanami. Together, the two companies control more than 100,000 sq. km in the Tanami-Arunta region of the Northern Territory.

The Solitaire property comprises 1,650 sq. km and is situated 500 km northwest of the town of Alice Springs and 80 km southeast of Normandy Mining’s Granites gold mine.

Preliminary exploration has outlined five zones of anomalous gold and arsenic over a strike length of 40 km. Tanami, as operator of the joint venture, intends to carry out mapping, sampling and drilling.