Gold Fields FY HEPS hurt by production slips

Gold Fields, a global mining company with operations in Africa, Australia, and Chile, has faced challenges in its latest financial results, with all-in costs up 17%. CEO Mike Fraser joined CNBC Africa's Godfrey Mutizwa to discuss the company's performance. Fraser acknowledged the cost challenges, particularly in Australia, where skills are in high demand, leading to higher costs for retaining contractors and hiring skilled workers. He mentioned that the company's heavy capital investments in the previous year and ongoing projects like Solaris Norte are impacting its cost profile. Despite these challenges, Fraser highlighted their focus on asset optimization programs and efficiency improvements rather than large-scale job reductions. He emphasized the importance of accessing ore bodies sustainably to extend the life of their assets. Regarding Gold Fields' African operations, Fraser discussed the success of South Deep, the company's largest asset in South Africa. Despite its troubled history, South Deep showed significant improvement, contributing over $200 million in free cash flow in the last year. Fraser emphasized the focus on safety and relationships at the mine, highlighting the recent wage agreement extension as a testament to the positive working environment. In West Africa, the Damang mine is approaching the end of its life, leading to an 8% drop in production. Fraser mentioned plans to mine stockpiles and explore alternative options for the site. Looking at the company's global presence, Fraser expressed the importance of value creation over size growth. He mentioned investments in new geographies like Windfall while focusing on optimizing existing operations. Fraser acknowledged the potential for industry consolidation and mentioned Gold Fields' openness to explore growth opportunities through brownfields exploration, greenfield exploration, and partnerships. Fraser emphasized the importance of collaboration and joint ventures in creating value within the industry. When asked about the future of the gold industry, Fraser expressed bullish sentiment, citing strong support from central banks and geopolitical factors driving demand. While cautious in business planning, Fraser acknowledged the potential for gold prices to rise further and emphasized Gold Fields' readiness to outperform in such scenarios. In conclusion, Gold Fields faces cost challenges and operational complexities but sees opportunities for growth through cost optimization, asset management, and strategic partnerships. The company remains focused on sustainability, efficiency, and value creation to navigate the evolving landscape of the mining industry.