UPDATE 2-South Africa`s Gold Fields profit up 20%, flags rising costs

Published: 2022-02-17 tag: precious metals and minerals

* CEO says Australian labour crunch to impact costs

* Expects to maintain profits backed by higher output

* Sees firm gold prices in 2022

* Annual output to top 2.7 mln ounces by 2024 (Adds CEO interview comments, details)

JOHANNESBURG, Feb 17 (Reuters) - South African miner Gold Fields Ltd reported a 20% rise in full-year profit on Thursday, boosted by higher production and firmer prices, but flagged growing cost pressures.

The gold miner’s headline earnings per share (HEPS) - the main measure of corporate profit in South Africa - rose to 100 U.S. cents last year from 83 cents the year before.

Gold prices have declined from a peak in August 2020, forcing miners to reduce costs and lift output to push profits higher. But with inflation rising at a time of peak production levels, it is unclear how long they will be able to do that.

“We are seeing a very, very substantial inflation environment at the moment... I think it’s unavoidable that there will be an impact on costs,” CEO Chris Griffith told Reuters.

Gold Fields’ all-in sustaining cost (AISC) - a metric to measure overall production cost - rose to $1,063 per ounce last year, and it projected an increase to $1,140-$1,180 per ounce for 2022.

Griffith said that, besides rising inflation, the company’s costs would be boosted by an imminent increase in power prices in South Africa and higher labour costs in Australia.

However, it should be able to maintain profitability on the back of firm gold prices and higher production, he said.

Gold Fields’ bigger global rival Barrick Gold said on Wednesday the cost of its gold operations would increase in 2022, but hoped effects of inflation could be mitigated.

However, miners in Australia have flagged concerns around a severe labour shortage across all mining operations which could have a prolonged effect on costs.

Gold Fields aims to produce 2.25-2.29 million ounces in 2022, 2.375-2.425 million in 2023 and up to 2.777 million in 2024, the CEO said.

Enhanced Investments, Inc.
329 South Oyster Bay Road #2085
Plainview, NY 11803
team@eninvs.com

Important disclosures

Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.

Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities.
Past performance is no guarantee of future results. Any historical returns, expected returns [or probability projections] are hypothetical in nature and may not reflect actual future performance.
All the strategies assume investments in equity invstrumenta only and are more relevant for "agressive investment profile". Eastern European flagship strategy assumes using up to 20% leverage of total portfolio. GlobalCommodities and US Growth strategy currently assume no leverage.
Results for the Enhanced Investments strategies as compared to the performance of Illustrative Benchmarks is for informational purposes only. Our investment program does not mirror that of the Illustrative Benchmarks and the volatility may be materially different from the volatility of Illustrative Benchmarks. Reference or comparison to an Illustrative Benchmark does not imply that strategies of Enhanced Investments will be constructed in the same way as the Illustrative Benchmark or achieve returns, volatility, or other results similar to those of the Illustrative Benchmark. The S&P 500 is an unmanaged market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.
Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.