Gold Fields Buys Aussie Mines after Loss



Gold Fields Buys Aussie Mines after Loss

BYLINE: Reuters

Hit by lower gold prices and rising costs at home, Gold Fields reported a second-quarter loss yesterday and said it was expanding abroad with a $300 million (R3.1bn) deal to buy three Australian mines from top producer Barrick Gold.

The company said it made a net loss of $129m in the three months to June compared with a net profit of $27m in the previous quarter and $105m in the same quarter last year.

Earlier this year Gold Fields separated off the bulk of its assets in South Africa, where labour and political risks are seen as relatively high in the context of a sharp fall in gold prices, a point underlined this week by a new strike threat.

"The gold industry [in South Africa] is frankly in crisis at the moment," chief executive Nick Holland said.

Gold Fields' shares fell by 9.13 percent to close at R59.89 yesterday, with the strike threat in South Africa hitting the shares of other producers in the country.

The company said the Barrick acquisition, which would be 50 percent payable in shares, would add 452 000 ounces to its annual production and make it Australia's third-largest gold producer. The company expects to produce between 1.83 million and 1.9 million ounces this year.

Following the acquisition, Australia would be Gold Fields' largest regional production centre, it said, accounting for 42 percent of group production, with Ghana decreasing to 34 percent and Peru and South Africa remaining largely unchanged at 13 percent and 11 percent, respectively.

"The acquired assets are located in a preferred jurisdiction that we know well and where we have significant operational and management experience and infrastructure to maximise the value of the acquired assets," Holland said.

"This acquisition further repositions Gold Fields as an international gold producer with a well-balanced global footprint, which should enhance our risk profile and global credit rating," he said.

The company said its second-quarter loss was mostly due to impairment charges in Ghana of $143m at its Tarkwa mine and $127m at Damang

Comments

Post a Comment

Popular posts from this blog

WPIAL Mines Gold Medals at PIAA Track Meet

Image
WPIAL Mines Gold Medals at PIAA Track Meet Schofield, Paul, Tribune-Review/Pittsburgh Tribune-Review SHIPPENSBURG -- It didn't take long for the WPIAL to get its first gold medalist Saturday at the PIAA track and field championships. District 7 was shut out Friday, but South Fayette senior Nicole Hilton won the 3, 200 meters almost 11 minutes after Day 2 started at 9 a. m. at Shippensburg University. She wasn't the only athlete from the WPIAL to win gold; 9 others collected 11 more championships. Penn Hills senior Iman Wilkerson (Class AAA) and Clairton junior Trenton Coles (Class AA) headed the list by sprinting to wins in the 100 and 200. Hempfield senior Rachel Serafin won her third consecutive Class AAA discus title, and Belle Vernon senior Matt Green won his second Class AAA long jump title. He also won in 2009. Other winners were Quaker Valley junior L. J. Westwood (AA, 800), Summit Academy senior Cyniel Hinton (AA, 110 hurdles), Norwin junior Kase...
Read more

Mines Tighten Belts as Gold Boom Ends

Image
Mines Tighten Belts as Gold Boom Ends BYLINE: Eddie van der Walt London THE BIGGEST gold bust in three decades is about to end a six-year expansion in mine output. From Russia to South Africa to North America, the biggest producers saw profits turn to losses as prices plunged, forcing them to cut spending on mines in half over three years. While bullion output would probably reach a record this year, the increase would be the smallest in at least six years, before production dropped 1 percent in 2016, according to Barclays. Mines supplied 3 114 tons last year, a record high valued at about $127 billion (R1.5 trillion), after companies stepped up investment to capitalise on prices that surged more than fivefold in the decade through 2011. While the appeal of gold as a financial asset means that supply does not usually influence the precious metal's value as much as economic or monetary policies - partly because every ounce ever mined still exists - demand is gr...
Read more

Mining Battle Lines Drawn Zz Gold Mines Set for Strike after Talks Fail

Image
Mining Battle Lines Drawn Zz Gold Mines Set for Strike after Talks Fail BYLINE: Dineo Faku Rumblings of lockouts by gold sector employers and resolutions to strike by trade unions culminated in a firm commitment to do battle by both parties as the deadline for a wage deal expired at noon yesterday. "This is it. This is our final offer, we cannot afford an increase," Harmony Gold chief executive Graham Briggs told a press conference hosted by the Chamber of Mines yesterday. The industry's final stand includes insisting on a collective bargaining forum and not negotiating or settling with unions at either company or mine level. Briggs said reaching different settlements would probably fuel inter-union rivalry and incite violence. Across the divide, the National Union of Mineworkers (NUM) said it rejected "with contempt" the final pay offer of a 6.5 percent wage increase linked to a profit share scheme as part of a two-year wage agre...
Read more