Gold Fields, the South African gold miner, has reported a decline in production for the third quarter of the year. This decrease was observed across its various regions, with the largest slide seen in Ghana. Meanwhile, costs rose across the company's operations. Let's take a closer look at Gold Fields' production figures for the quarter.
Gold Fields' group attributable gold-equivalent production for Q3 2023 was 9% lower year-on-year, amounting to 542 koz (compared to 597 koz in Q3 2022). Additionally, there was a 6% decrease in production compared to the previous quarter (577 koz in 2Q2 2023).
The Ghana region experienced the most significant decline in production volumes year-on-year. This reduction aligns with the mine plan as Damang reduces production volumes. Moreover, lower yields and safety-related stoppages negatively impacted production at Tarkwa.
Gold Fields' Australian operations suffered from lower grades mined and skills shortages, leading to a decrease in production volumes. Ventilation challenges also affected operations at Granny Smith, St Ives, and Agnew, but these issues have been mostly resolved. In total, the Australian operations produced 244 koz during Q3 2023, which represents a 5% decline compared to the previous year and an 8% decrease compared to the previous quarter.
The South Africa region managed to produce 81 koz during the quarter, showing an 8% decline year-on-year. However, it marked a remarkable 19% improvement quarter-on-quarter. This improvement can be attributed to ore phasing, gold in process release, and stockpile movements.
In Ghana, Gold Fields' mines produced 185 koz in Q3 2023 on a managed basis. This figure represents a 14% decline year-on-year, primarily due to lower production at Damang in line with the mine plan. Additionally, volumes were 9% lower quarter-on-quarter due to lower yields at Tarkwa, as the mine treated more ore from lower-grade stockpiles compared to previous quarters.
The production at Cerro Corona in Peru, managed efficiently, recorded 52 koz (gold-equivalent) in the current period. This represents a 14% decrease compared to both the previous year and the previous quarter. The decline can be attributed to lower gold and copper grades processed, as well as lower metallurgical recoveries in alignment with the mining plan.
All-In Costs Increase
The Group's all-in costs for the third quarter of 2023 exhibited a significant increase of 27% compared to the same period last year (3Q 2022: $1,279/oz). This rise in costs can be attributed to lower gold sold and above-inflation increases in operational expenses across all mining operations. Additionally, there was an initial spending of pre-production capital at the Windfall Project in Canada.
Increased All-In Costs
The all-in sustaining cost (AIC) for the third quarter of 2023 experienced a quarter-on-quarter increase of 12%, reaching $1,622/oz (3Q 2023: $1,454/oz). This rise in AIC can be attributed to lower gold sold and the initial expenditure of pre-production capital at the Windfall Project during the quarter. However, if the pre-production expenditure for Windfall is excluded, the AIC for 3Q 2023 would have been $1,574/oz.
All-In Sustaining Cost
The all-in sustaining cost (AISC) for the third quarter of 2023 amounted to $1,381/oz, representing a year-on-year increase of 30% (3Q 2022: $1,061/oz). Quarter-on-quarter, AISC also increased by 8% (3Q 2023: $1,279/oz). This increase in AISC can be attributed to lower gold sales volumes and inflationary cost pressures.
Gold Fields is on track to meet the original production and cost guidance provided in February 2023, taking into account both guided and forecast exchange rates. The expected attributable gold-equivalent production (excluding Asanko, a joint venture in Ghana) is estimated to be between 2.25 Moz and 2.30 Moz, slightly lower than the 2022 comparable figure of 2.32 Moz. The projected all-in cost is expected to range from $1,480/oz to $1,520/oz.
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