Friday, May 10, 2013

Gold Fields earnings fall as production declines

JOHANNESBURG (Reuters) - Bullion producer Gold Fields reported a 66 percent drop in first quarter earnings on Friday, its first results since it split off the bulk of its South African assets, as its production and the price of the precious metal fell.

Headline earnings for the first three months of the year came in at 4 U.S. cents a share from a restated 12 U.S. cents a share in the previous quarter. Production slumped 11 percent to 477,000 ounces.

Gold Fields unbundled its mature deep-level KDC and Beatrix operations in South Africa into a separately listed company, Sibanye Gold, earlier this year.

These labour-intensive operations were also rocked last year by the wave of wildcat strikes that hit the country's mining sector.

Lower group production allowed notional cash expenditure, which includes capital expenditure, to decrease by 2 percent to $1,291 an ounce in the March quarter.

The spot gold price declined 5 percent in the quarter but has fallen a further 12 percent since the end of March, which will put pressure on margins.

Gold Fields is targeting full year production of between 1.8 and 1.9 million ounces.

The market has not embraced the split with the warmth Gold Fields had hoped and its share price is down over 30 percent so far this year.

Source: http://news.yahoo.com/gold-fields-earnings-fall-production-declines-063618705.html

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