gOld Fields Ltd. said the turnaround at its giant mine in South Africa was starting to pay off after more than a decade of losses that plagued the Johannesburg-based company.
South Deep, which sits on the third-largest known deposit of gold ore, nearly tripled the net cash it generated to US$97 million in 2021 as production increased and the rand strengthened. Production from Gold Fields’ latest South African mine is expected to increase another 30% over the next three to four years.
This will complete a turnaround after years of financial bleeding compounded by power shortages, social unrest and regulatory uncertainty in South Africa. This justifies management’s decision to restructure the mine after investors pressured Gold Fields to end the losses or sell the asset.
“I absolutely believe it was the right thing to do,” general manager Chris Griffith said in an interview. “Already in a year we’ve probably figured out what people would have paid for the asset, so I think it makes perfect sense to stay in the asset.”
Net profit rose 9.2% to $789 million last year after production increased, Gold Fields said Thursday. The company will pay a final dividend of R2.60 per share, bringing its total payout for the year to R4.70.
Gold Fields, like its competitor AngloGold Ashanti Ltd., has focused on more profitable operations in Ghana, Australia and Latin America. CEO Griffith said the company is on track to increase production to around 2.7 million ounces in 2024, with production supported by a new mine in Chile and the turnaround of South Deep.
The Salares Norte project would be near completion by the end of 2022 and should begin production in the first quarter of next year, Griffith said. The mine is expected to produce 200,000 ounces in 2023, growing to over half a million ounces a year later. This would give the Chilean operation so-called Tier 1 status.
The miner is also accelerating the search for new gold deposits in Chile, Peru and Australia and may also consider exploration in North America to increase reserves as some of its mines lack commercially viable ore, the miner said. CEO.