Gold Fields H1
2020
Results
10
off work. Previously different rosters providing a maximum three days
off a week were used. Arrangements are in place to manage fatigue
during the four-week work period and to test employees for COVID-19
once every month before they resume work. In addition, during the work
period, employees are not allowed to travel outside the Tarkwa or
Damang host communities.
Tarkwa tested 84% of the workforce in a mass testing programme,
though this was partially suspended until a private company, Lancet
Laboratories, was approved to perform COVID-19 testing. Damang and
Galiano will embark on the mass testing programme as soon as Lancet
has caught up the current backlog of Tarkwa tests. The mines’ isolation
facilities have 86-bed capacity, with two facilities located at Tarkwa and
one at Damang.
COVID-19 community programmes
Community support programmes and donations have been channelled
via the Gold Fields Ghana Foundation. To date the Foundation has
spent about US$261,000, which equates to US$1.34/oz. Items funded
and supplied to local clinics and community organisations include hand-
held thermometers, sanitisers, face masks, protective gowns, goggles
and other PPE. Gold Fields Ghana has also aired radio educational
programmes on how to deal with COVID-19 and to prevent
stigmatisation of those who have been infected,
Cost and production impact
Gold Fields Ghana to date has spent US$863,000 on programmes and
infrastructure to deal with the pandemic, which translates into
US$4.42/oz. This includes on-site measures such as isolation facilities,
increasing busing and testing facilities, as well as support programmes
for government and communities.
The region has taken various steps to increase strategic inventory
levels. These include raising stocks of reagents, increasing fuel stocks
to maximum tank capacities, and strategic fuel stocks by our suppliers.
The region has worked with local suppliers to increase stocks for other
critical supplies as well.
A number of projects at the mines have been impacted by the pandemic,
as the appointed contractors are prohibited from visiting the sites. Key
among them are CIL pump upgrades, installation of drapes on the east
wall of the Damang Pit Cutback and a number of Information &
Technologies projects.
Revenue
Attributable equivalent gold production, (including Asanko) increased
marginally from 1,082,500oz for the six months ended 30 June 2019 to
1,086,700oz for the six months ended 30 June 2020. Attributable
equivalent gold production at Asanko increased by 11% from 55,100oz
for the six months ended 30 June 2019 to 60,900oz for the six months
ended 30 June 2020. Revenue from Asanko is not included in Group
revenue as Asanko results are equity accounted.
At the South Africa region, production at South Deep increased by 10%
from 2,851kg (91,700oz) for the six months ended 30 June 2019 to
3,123kg (100,400oz) for the six months ended 30 June 2020. The
increase was due to the first half of 2019 being impacted by a slow
production build-up period post the restructuring in the December
quarter 2018. Gold sold increased by 8% from 2,804kg (90,100oz) to
3,042kg (97,800oz).
Attributable gold production at the West African operations (including
Asanko), decreased by 4% from 399,500oz for the six months ended 30
June 2019 to 384,400oz for the six months ended 30 June 2020 mainly
due to decreased production at Damang following the completion of the
Amoanda pit in H1 2019. Managed gold produced and sold at Tarkwa
increased marginally from 270,900oz for the six months ended 30 June
2019 to 271,700oz for the six months ended 30 June 2020. At Damang,
managed gold produced and sold decreased by 21% from 111,800oz
for the six months ended 30 June 2019 to 87,800oz for the six months
ended 30 June 2020 mainly due to the completion of the Amoanda pit
in H1 2019. Gold produced at Asanko increased by 11% from 55,100oz
(45% basis) for the six months ended 30 June 2019 to 60,900oz for the
six months ended 30 June 2020. Gold sold increased by 7% from
53,900oz (45% basis) to 58,100oz.
Attributable equivalent gold production at Cerro Corona in Peru
decreased by 31% from 156,400oz for the six months ended 30 June
2019 to 108,100oz for the six months ended 30 June 2020 mainly as a
result of COVID-19 restrictions on production (18Koz), and a lower price
factor (13Koz) as well as lower grades mined in line with the current
year plan. Total managed gold equivalent production decreased by 31%
from 157,100oz for the six months ended 30 June 2019 to 108,700oz
for the six months ended 30 June 2020. Gold equivalent ounces sold
decreased by 28% from 156,400oz to 113,000oz.
Gold production at the Australian operations increased by 14% from
434,900oz for the six months ended 30 June 2019 to 493,800oz for the
six months ended 30 June 2020 mainly due to the inclusion of Gruyere
with the operation reaching commercial levels of production at the end
of September 2019. At St Ives, gold production increased marginally
from 187,600oz for the six months ended 30 June 2019 to 188,100oz
for the six months ended 30 June 2020. Gold sold increased by 8% from
183,200oz to 197,100oz. At Agnew, gold production decreased by 6%
per cent from 113,300 ounces for the six months ended 30 June 2019
to 105,900 ounces for the six months ended 30 June 2020. Gold sold
decreased by 9% from 115,400oz to 105,500oz. At Granny Smith, gold
production increased marginally from 134,000oz for the six months
ended 30 June 2019 to 134,100oz for the six months ended 30 June
2020. Gold sold was similar at 133,900oz. At Gruyere gold production
for the six months ended 30 June 2020 was 65,700oz with gold sold at
65,000oz.
The average US Dollar gold price achieved by the Group (excluding
Asanko) increased by 26% from US$1,298/eq oz for the six months
ended 30 June 2019 to US$1,637/eq oz for the six months ended 30
June 2020. The average rand gold price increased by 41% from
R600,601/kg to R847,286/kg. The average Australian Dollar gold price
increased by 35% from A$1,843/oz to A$2,493/oz. The average US
Dollar gold price for the Ghanaian operations (excluding Asanko)
increased by 26% from US$1,304/oz for the six months ended 30 June
2019 to US$1,646/oz for the six months ended 30 June 2020. The
average equivalent US Dollar gold price, net of treatment and refining
charges, for Cerro Corona increased by 29% from US$1,268/eq oz for
the six months ended 30 June 2019 to US$1,638/eq oz for the six
months ended 30 June 2020. The average US Dollar/Rand exchange
rate weakened by 16% from R14.22 for the six months ended 30 June
2019 to R16.50 for the six months ended 30 June 2020. The average
Australian/US Dollar exchange rate weakened by 7% from A$1.00 =
US$0.71 to A$1.00 = US$0.66.
Gold equivalent ounces sold (excluding Asanko) increased by 1% from
1.06Moz to 1.07Moz.
Revenue increased by 27% from US$1,379m for the six months ended
30 June 2019 to US$1,754m for the six months ended 30 June 2020
due to the higher gold sold and higher gold price received.
Cost of sales before amortisation and depreciation
Cost of sales before amortisation and depreciation increased by 10%
from US$695m for the six months ended 30 June 2019 to US$767m for
the six months ended 30 June 2020.
At the South Africa region, at South Deep, cost of sales before
amortisation and depreciation increased by 2% from R1,669m
(US$117m) for the six months ended 30 June 2019 to R1,705m
(US$103m) for the six months ended 30 June 2020.
At the West Africa region, (excluding Asanko), cost of sales before
amortisation and depreciation increased by 23% from US$216m for the
six months ended 30 June 2019 to US$265m for the six months ended
30 June 2020 mainly due to a 9mt increase in operational waste tonnes
mined (capital waste tonnes decreased by 12mt) at Damang following
the intersection of the main orebody, as well as a gold-in-process
charge of US$6m for the six months ended 30 June 2020 compared
with gold-in-process credit of US$20m for the six months ended 30 June
2019. The net gold-in-process movement at Tarkwa was US$19m and
at Damang was US$7m. In line with the current year plan Tarkwa is
supplementing ore feed to the plant with lower grade stockpile material.
At the South America region, at Cerro Corona, cost of sales before
amortisation and depreciation decreased by 2% from US$81m for the
six months ended 30 June 2019 to US$79m for the six months ended
30 June 2020.
At the Australia region, cost of sales before amortisation and
depreciation increased by 23% from A$397m (US$280m) for the six
months ended 30 June 2019 to A$487m (US$320m) for the six months
ended 30 June 2020 mainly due to the inclusion of Gruyere with the
mine reaching commercial levels of production at the end of September
2019.
Amortisation and depreciation
Amortisation and depreciation for the Group increased by 4% from
US$292m for the six months ended 30 June 2019 to US$305m for the
six months ended 30 June 2020 mainly due to the inclusion of Gruyere
with the mine reaching commercial levels of production at the end of
September 2019.