CAPITAL MARKETS

Gold Fields tips big rise in earnings

Production in line but costs tracking slightly higher

Tom Hoskyns

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Attributable gold production amounted to 563,000oz, up from 541,000oz in Q1, according to a trading update released on Friday.

Gold Fields operates the Agnew/Lawlers, St Ives, Granny Smith and Gruyere mine in Western Australia, South Deep in South Africa, Tarkwa in Ghana and Cerro Corona in Chile.

The company is tracking slightly below its full-year guidance range of 2.3-2.35Moz, but Gold Fields has said production would be back-weighted in the second half of the year.

Costs are tracking slightly higher than expected, with all-in sustaining costs of US$1093/oz in the first half, above the full-year cost guidance of $1020-1060/oz.

Gold Fields said headline earnings per share for the first six months of the year were expected to be 43-47c per share, more than double the prior year period but slightly below estimates by analysts at investment bank BMO Capital Markets.

The company is due to publish its half-year financial results on August 19.

"While we see costs potentially benefiting from higher production volumes in H2/21, we expect to get a better idea of cost drivers upon release of the company's detailed financial results, especially given the inflationary cost pressures starting to emerge in the mining sector," said analysts at BMO.

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