Business Context and Reporting Period
This Form 6-K filing by Gold Fields Limited, dated December 18, 2019, reports a significant regulatory milestone for its Salares Norte project in Chile. The company is a globally diversified gold producer with operations in Australia, Chile, Ghana, Peru, and South Africa.
Key Financial Metrics and Project Economics
The filing does not provide consolidated revenue, profit, cash flow, or debt figures for the reporting period. However, it details specific economic parameters for the Salares Norte project based on a feasibility study:
- Capital Cost: US$834 million for construction.
- Mineral Reserves: 3.5 million ounces (Moz) of gold and 39 Moz of silver (4.0 Moz gold-equivalent).
- Production Profile: 12-year life-of-mine with an initial annual throughput of 2 million tonnes of ore.
- Output: Life-of-mine production of 3.7 Moz gold-equivalent; average annual production of 450,000 ounces gold-equivalent for the first seven years.
- Costs: All-in Sustaining Costs (AISC) estimated at US$465 per ounce for the first seven years.
Material Changes and Developments
The primary material change reported is the approval of the environmental impact study for the Salares Norte project by the Atacama Environmental Assessment Commission in Chile. This approval is a prerequisite for the company to evaluate a construction decision.
Guidance, Outlook, and Management Commentary
CEO Nick Holland stated that the company will now formulate a funding plan and update the feasibility study to proceed to a construction decision during the first half of 2020. If approved, construction is estimated to be completed by the end of 2022. The project is expected to create approximately 2,700 jobs during construction and 900 permanent operational jobs.
Risks and Contingencies: The filing notes that the project remains subject to a final construction decision by Gold Fields following the formulation of a funding plan and updated feasibility study.
Investor Verification Checklist
- Confirm the timeline for the updated feasibility study and the final construction decision in H1 2020.
- Verify the funding plan details and capital allocation strategy for the US$834 million project cost.
- Monitor the company's total attributable gold production (approx. 2 Moz annually) and reserve base (48.1 Moz) to assess the relative impact of Salares Norte.
- Review subsequent filings for any changes to the AISC estimate of US$465/oz or the projected 12-year mine life.