Business Context and Reporting Period
This Form 6-K filing by Gold Fields Limited, dated January 16, 2015, provides a production and cost update for the fourth quarter (Q4) and full year (FY) ended December 31, 2014. Gold Fields is an unhedged, globally diversified gold producer with operations in Australia, Ghana, Peru, and South Africa.
Key Financial and Operational Metrics
The filing focuses on operational guidance rather than finalized financial statements, which are scheduled for release on February 12, 2015.
- Q4 2014 Production: Expected attributable gold equivalent production of approximately 556,000 ounces.
- Q4 2014 Costs: Expected All-in Sustaining Costs (AISC) of US$1,030/oz and All-in Costs (AIC) of US$1,055/oz.
- FY 2014 Production: Expected attributable gold equivalent production of approximately 2.22 million ounces.
- FY 2014 Costs: Expected AISC of US$1,060/oz and AIC of US$1,095/oz.
- Reserves and Resources: Attributable Mineral Reserves of ~49 million ounces of gold and ~708 million pounds of copper; Mineral Resources of ~113 million ounces of gold and ~7,120 million pounds of copper.
The filing text does not provide clear values for revenue, net profit, cash flow, debt levels, or liquidity metrics.
Material Changes vs. Prior Periods and Guidance
Gold Fields has revised its full-year 2014 guidance upward for production and downward for costs compared to previous estimates.
- Production vs. Original Guidance: FY14 production guidance of 2.22 million ounces is slightly better than the original guidance of 2.20 million ounces.
- Cost Improvements:
- FY14 AISC of US$1,060/oz is approximately 6% better than the original guidance of US$1,125/oz (Feb 2014) and 3% better than the revised guidance of US$1,090/oz (Oct 2014).
- FY14 AIC of US$1,095/oz is approximately 5% better than the original guidance of US$1,150/oz and 3% better than the revised guidance of US$1,130/oz.
- Quarter-over-Quarter: Q4 2014 production (556,000 oz) is slightly lower than Q3 2014 (559,000 oz), while Q4 AISC (US$1,030/oz) and AIC (US$1,055/oz) are lower than Q3 2014 levels (US$1,074/oz and US$1,096/oz, respectively).
Outlook, Risks, and Unusual Items
Management commentary indicates that both AISC and AIC for the year are expected to be better than previously guided. The company remains unhedged regarding gold prices. No specific risks, contingencies, or unusual items were detailed in this specific update, though the company notes the unbundling of South African mines (KDC and Beatrix) into Sibanye Gold in 2013 and the acquisition of Yilgarn South Assets in 2013 as part of its operational history.
Investor Verification Checklist
- Verify the final audited results for Q4 and FY 2014 when published on February 12, 2015, to confirm if actual production and costs met the updated guidance.
- Review the upcoming full results for revenue, net income, cash flow, and debt positions, which are not included in this update.
- Monitor the impact of the unhedged gold price exposure on the company's financial performance given the current market environment.
- Confirm the operational status and cost performance of the newly acquired Yilgarn South Assets in Western Australia.