Gold production from the South Deep mine operated by Gold Fields in South Africa declined by 17% to 8.3 tons in the full year to December 2024 as a result of low volumes and reduced grades while all in-sustaining costs shot up by 32% with free cash flow generation subsequently reducing.
Gold Fields, which also operates gold mines in Australia, Ghana, Peru and Chile as well as Canada, reported Thursday that attributable profits for the 2024 full year of $1.2 billion (R22.2bn) compared to a profit of $703.3 million a year ago had yielded a rise in the final dividend from 420 cents in 2023 to 700 cents per share.
This brought up the total dividend for 2024 to 1 000 cents per share compared to 745 cents a year ago.
Gold Fields attributed the reduction in gold produced from South Deep to “lower longhole stoping volumes and lower grade and gold contribution” from destress cuts.
The lower volumes from the longhole stopes were occasioned by increased backfill rehandling which restricted access to stopes and slower stope turnaround.
The mined reef grade for South Deep decreased by 10% to 5.77 grams per toe. This was, however, in line with the company’s business plan driven by the mining footprint and mining mix between longhole stoping and destress.
For the full year, all in-sustaining costs for the South Deep mine rose 32% to $1 794 per ounce. Gold Fields attributed this to lower gold sold, higher cost of sales before amortisation and depreciation and higher capital expenditure which went up by 19% to R2bn.
“South Deep generated an adjusted free cash flow of R3 070m ($168m) for the year ended 31 December 2024 compared to R3 755m ($204m) for the year ended 30 December 2023. The 18% decrease is mainly due to a 17% decrease in gold sold, partially offset by the higher gold price received,” said Gold Fields.
For the current year year, it has been estimated that South Deep will produce between 8.7 tons and 9.5 tons of bullion, with sustaining capex set at R2.3bn. All in-sustaining costs have been set at between $1 745 per ounce and $1 905 per ounce.
Across its operations, Gold Fields raised revenues by 16% to $5.2bn as a result of a 25% firming in the gold price received for 2024, which however was partially offset by a 10% dip in gold equivalent ounces sold that amounted to 2.1 million ounces.
BUSINESS REPORT