Gold Fields Limited (ADR) (NYSE:GFI) has issued an operational update for its 3Q2016 and also announced a reinvestment plan for its Damang Gold mine in Ghana. The company noted that the plan is aimed at extending the life of the mine, by approximately 8-years. As such, GFI would be investing $1.4 billion in the project, to enhance its presence in the region and also provide social benefits for the country. The plan is expected to create and preserve approximately 1,900 jobs for the locals.
In its operational update, GFI stated that the 3Q2016 had a strong start, driven by higher gold prices, which had dramatically declined, by the end of the period. The company was working on positioning its portfolio to withstand such movements and also delivering on its objectives. The company also made a reference to a fatality, at one of its mines, due to a seismic event, stating that it was a reminder that there was more work to be done in the safety department.
The company noted that it had observed a 4% decline in gold production and an 8% surge in all-in costs, on a year-over-year basis. However, the costs were still below the guidance issued in February 2016. Moreover, the net cash flow of GFI was 2.5 times more than that in the 1H2016, while its net debt balance declined by $126 million, over the same period. Gold Fields also announced that it had been named as the top South African mining company, on the Dow Jones Sustainability Index, for 2016.
The Damang mine has been operational since 1997 and has so far produced over 4 million ounces of gold. However, since 2013, the output has been in constant decline, causing the company to consider closing the project. Through its reinvestment plan, Gold Fields expects to produce 1.56 million ounces of gold, over the next 8-years, at $950 an ounce.
Gold Fields Limited (ADR) (NYSE:GFI) completed the October 24 trading session with a loss of 6.11% to its share value, on a trade volume of 5.28 million, to close at $4.07 per share.