Gold Fields commends govt on tax measures
Gold Fields Ghana has commended the government for “creating a fair and competitive environment in the country” after the mining company reached an agreement with the government on some tax reliefs.
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Under the agreement, the company’s corporate tax rate fell from 35 per cent to 32.5 in mid-March, while its flat royalty rate of five per cent of revenue was expected to change to a sliding scale compared with the gold price from 2017.
The company said a gold price of up to US$1,300 per ounce (oz) would render a royalty rate of three per cent of revenue. It is expected to announce its Damang development plan by mid-year.
CEO of Gold Fields, Mr Nick Holland Gold Fields, is on track to meet its annual gold production guidance of 2.05 million ounces (Moz) to 2.10Moz after a “solid” first quarter, which saw attributable equivalent production increase three per cent year-on-year to 515 000oz.
Quarterly production
This is despite a nine per cent decline in quarterly production, all eight of the company’s operations exceeded planned production for the three months ended March 31, CEO Nick Holland said.
The South African mine registered a 75 per cent increase in year-on-year production while quarterly production was “only seven per cent lower” at 64 000 oz. All-in-costs (AIC) came in at R 616,706/kg – 20 per cent lower year-on-year and 18 per cent higher on a quarterly basis.
The average ZAR/USD rate of 15.79 in the first quarter was 35 per cent weaker year-on-year and 12 per cent weaker quarter-on-quarter.
Managed production of 181 000 oz in Ghana was up four per cent year-on-year but down three per cent quarter-on-quarter and AIC of US $1,028/oz were down 21 per cent year-on-year but up 11 per cent quarter-on-quarter.
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Gold equivalent production in Peru fell six per cent year-on-year and five per cent quarter-on-quarter to 63 000 oz, with AIC of US US$709/oz up six per cent year-on-year but down 34 per cent quarter-on-quarter.
Gold prices
At 225 000 oz, production from Gold Fields’ Australian operations fell seven per cent year-on-year and 14 per cent quarter-on-quarter, while its AIC of AUD US$904/oz were up one per cent year-on-year and nine per cent quarter-on-quarter. The average AUD/USD rate of 0.72 was nine per cent weaker year-on-year and flat on a quarterly basis.
Total all-in-sustaining costs (AISC) and AIC of US$ 986/oz and US$ 961/oz respectively are tracking below its full-year cost guidance.
Annual unit costs are expected to remain largely unchanged from 2015, with AISC expected to range from US$1,000/oz to US$1,010/oz and AIC to be between US$1,035/oz and US$1,045/oz. “The average USD gold price achieved was largely unchanged year-on-year at US $1,192/oz, but was nine per cent or US $100/oz higher quarter-on-quarter,” said Holland.
Ownership empowerment
The company will also provide the South African Department of Mineral Resources (DMR) with input on the empowerment ownership targets set out in a reviewed draft of the Mining Charter.
“Although the mining industry was not consulted prior to its publication, Gold Fields will engage with the DMR, through the chamber and appropriate structures, during the consultation period which ends on May 31, 2016,’’ Holland said.