Gold Fields Ltd.
) recently announced its production and cost guidance for the
second quarter of 2012. The company expects to produce 862,000
equivalent ounces of gold, at total cash costs and notional cash
expenditure (NCE) of approximately $855 per ounce and $1,310 per
BARRICK GOLD CP (ABX): Free Stock Analysis
ANGLOGOLD LTD (AU): Free Stock Analysis Report
GOLD FIELDS-ADR (GFI): Free Stock Analysis
NEWMONT MINING (NEM): Free Stock Analysis
To read this article on Zacks.com click here.
The expected production for the quarter is almost consistent year
over year, but is 4% higher on a sequential basis. Also, total cash
costs and notional capital expenditure are almost in line with the
company's annual guidance of $860 per ounce and $1,300 per ounce,
respectively, which was issued in February. Gold Fields is
scheduled to post its second quarter results on August 23.
First Quarter Flashback
Gold Fields clocked attributable equivalent gold production of
827,000 ounces in the first quarter, at a cash cost of $870 per
ounce. It reported net earnings of $268 million, up from $158
million posted in the first quarter of 2011, an impressive jump of
70%. The growth in earnings was remarkable, especially considering
the fact that Gold Fields' production dropped slightly from the
year ago period.
Growth and Diversification
Going forward, Gold Fields has a number of development programs,
which are expected to drive its growth. The company acquired a 40%
stake in the Far Southeast project in the Philippines for $110
million in March. In addition, Gold Fields' Chucapaca feasibility
study in Peru is going as per schedule and is expected to be
complete this year. Also, it concluded drilling activities at the
Damang Super Pit project in Ghana in the previous quarter.
Moreover, the company is highly focused on improving its reserves.
It managed to add 5% to its mineral resource and reserve base in
2011, taking its total attributable precious metal and gold
equivalent mineral reserves count to 80.6 million ounces. Gold
Fields has managed to spread its reserve base across a wider
geographical area in a bid to cut down on geopolitical risks and
diversify itself. Its legacy operations now account for only 23% of
its reserves, a marked improvement from the 46% concentration in
such regions five years back.
Gold Fields, which competes with
AngloGold Ashanti Ltd.
Barrick Gold Corporation
Newmont Mining Corp.
), currently holds a Zacks #4 Rank, reflecting a short-term (1 to 3
months) Sell rating.