Gold Fields reports that its attributable gold equivalent production for the six months ended 30 June 2020 increased marginally YoY to 1,087koz (H1 2019: 1,083koz), with the contribution from Gruyere and increased production days, largely offset by the impact of COVID-19 stoppages at South Deep and Cerro Corona, as well as the impact of the lower copper price at Cerro Corona, which resulted in lower gold equivalent ounces.
The increase in production days relates to a decision that was taken, during Q2 2020, to align the production month-end with the calendar month-end, which resulted in an extra 10 production days in H1 2020.
These 10 extra production days also impacted Q2 2020. This once-off adjustment has no impact on H2 2020.
The impact of the extra production days is estimated at 45koz, while the lost production from COVID-19-related stoppages is approximately 42koz, comprising South Deep at 24koz and Cerro Corona at 18koz.
The impact of the lower copper price on Cerro Corona is estimated at 13koz for H1 2020.
All-in sustaining costs (AISC) for the Group for H1 2020 of US$987/oz, compared to US$891/oz in H1 2019, an increase of 11% YoY, driven by an increase in net operating costs (mainly driven by a move of waste tonnes from capital to operating costs at Damang following intersection of the main orebody), sustaining capital expenditure and royalties (approximately US$15/oz) as well as lower by-product credits (due to the lower copper price). COVID-19 related costs are estimated at approximately US$20/oz for H1 2020 and are embedded in the AISC.
All-in cost (AIC) for H1 2020 were 4% lower YoY at US$1,065/oz
(H1 2019: US$1,106/oz) as project capital was US$137m lower in
H1 2020 compared to H1 2019, which more than offset the increases relating to AISC, discussed above.
Gold Fields delivered the higher gold price to the bottom line. Normalised earnings for the six months ended June 2020 more than doubled YoY to US$323m or US$0.37 per share compared to US$126m or US$0.15 per share for the six months ended June 2019.
In line with its dividend policy of paying out between 25% and 35% of normalised profit as dividends, Gold Fields declared an interim dividend of 160 SA cents per share which compared with the 2019 total dividend of 160 SA cents per share.