South African mining company Gold Fields, which aims to be the global leader in sustainable gold mining, has published its operational results for the first quarter of 2016.
Gold Fields produced 515,000 ounces of gold in Q1, and this represents a 3 percent increase from Q1 in 2015, but a 9 percent drop from the 566,000 ounces produced in the December quarter. March is usually a seasonally weak quarter for the company, due to mines restarting after Christmas.
CEO Nick Holland said: "Encouragingly, all eight operations exceeded their planned production for the quarter."
Holland referred to South Africa's new Mining Charter, and stated: "Although the mining industry was not consulted prior to its publication, Gold Fields will engage with the Department of Mineral Resources, through the Chamber of Mines and appropriate structures, during the consultation period which ends on the 31st of May."
South Deep’s 64,000oz production was 75 percent higher than the matching quarter last year, and "only 7 percent" lower than the December quarter.
All-in sustaining costs (AISC) were 16 percent lower YoY (3 percent higher QoQ) at $961/oz and all-in costs (AIC) were 15 percent lower YoY (5 percent higher QoQ) at $986/oz. Managed production in Ghana was 181,000 ounces, up 4 percent year on year but down 3 percent quarter on quarter. According to Holland, a key highlight of the quarter was the conclusion of a development agreement with Ghana’s government.
This included a lower corporate tax rate for Gold Fields of 32.5 percent, which used to stand at 35 percent. It also includes a change in the royalty rate from a flat 5 percent of revenue to a sliding-scale royalty based on the gold price.