Vancouver — The world’s fourth largest bullion producer posted a 40% drop in profits during the three month period ended Sept. 30.
Gold Fields (GFI-N) gained US$61 million in the latest quarter, down from US$114 million recorded in the previous three month quarter.
“Results for the first quarter were negatively impacted by above-inflation annual wage increases, lower underground yields at Beatrix, other normal inflationary increases and a marginally lower rand gold price received,” explains company CEO, Ian Cockerill.
Attributable gold production came in at 1.04 million ozs, down from the 1.13 million ozs poured in the last quarter, while cash costs rose 10.6% to US$282 per oz.
In South African, where most of the company’s operations are located, operating profits fell 66% to 78.2 million rand. Underground grades at the Beatrix mine in the Free State fell to 4.4 grams gold per tonne from the 5.1 grams gold in the last quarter.
Based on the weak results, the company plans on cutting production and closing shafts at operations with weak gold content, but cautioned that this would only boost margins slowly especially if the local currency remained strong.
A rising rand has hit the bottom line of South African miners this year, as a strong local currency cuts income from US dollar-based gold revenues.
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