Gold Fields is focusing on harvesting in the second half of financial year 2009 after doing some hard work on South African operations and investing capex of R2.3bn (US$231 million) to complete the new Cerro Corona mine in Peru and the Tarkwa CIL expansion plant.
However, the company is simultaneously hunting for new opportunities around the world and would like to add two additional gold-copper deposits, similar to the Cerro Corona porphyry, to its portfolio. Gold Fields reached nameplate capacity of 500 000t per month at Cerro Corona in December.
Chief Executive Officer Nick Holland said Thursday the company was targeting substantial gold-copper deposits that could be mined economically at prices of $800/ounce of gold and $1.75 per pound of copper around the world.
Gold Fields was scouting Peru, Europe and Australia for copper-gold projects and would buy all options in projects that worked at these prices.
Holland said copper stockpiles were likely to run down in the first half of 2009, leading to a rise in copper prices. He added that someday the copper price would be back at $4 a pond and the company had to take a five to twenty year view on projects.Gold Fields is a gold company, despite the fact that it's also planning to exploit existing uranium tailings and an underground resource of 99 million pounds in South Africa. But this did not preclude the company from having more Cerro Coronas or gold-silver deposits in its portfolio.
The company is spending $100m annually on exploration on five continents and Holland said the company had to hunt for good new opportunities all the time and be quick-footed to pick them up.
Getting its South African production back to normal levels after extensive safety refurbishment work at Kloof, rehabilitation at South Deep, secondary support work at Driefontein and a pillar mining review, required doing the basics right and doing it safely, said Holland.
Gold Fields is targeting an increase in South African production from 15.5tons to 18t of gold per quarter and the group is still chasing its set target of 4m ounces per year in the next third quarter of financial 2009.
Holland said the results of doing the basics right would be seen straightaway. The reasons the company was bullish on gold was that Kloof was coming back into production, production at South Deep was picking up, while production at Beatrix and Driefontein was also set to increase.
Holland said that in an industry that's said to have long winters and long summers the company had to ensure it enjoyed summer, if this was it.
During the company's results presentation earlier today Holland said a number of ingredients were present for the company to achieve a better cashflow, including a 4% rise in the gold price, favourable South African rand and Australian dollar exchange rates, lower capital expenditure since the completion of Cerro Corona and the Tarkwa CIL plant, higher production and cost reductions Gold Fields was pursuing.
The company believed its uranium resource would make its fifth South African mine and together with South Deep it didn't see the sun setting for Gold Fields, but instead its profile rising.
Gold Fields is also seeking an additional mine in Australasia to raise its production in this region to 1m ounces a year and wanted a project at least in development in three to four years.
The company today announced headline earnings for the second December 2008 quarter of $55m compared to $5m in the previous quarter and a 5% rise in attributable gold production to 839,000 ounces.