After generating $1 billion (R18.6bn) from its mines in 2023, Gold Fields has committed to acquisitions, enhanced exploration and will tie up executive remuneration to company performance.
With four mines in Australia, one in South Africa and three mines in Ghana, including the Asanko project, Gold Fields is one of the biggest gold mining companies in the world. It also operates in Peru, Chile and has a development property in Canada.
This year, Gold Fields had tied executive remuneration to the company’s financial and non-financial performance, the board said on Friday.
The company was “reviewing the CEO short-term incentives with increased emphasis” on group outcomes.
“A meaningful portion of pay is ‘at risk’ with challenging performance measures that include financial and non-financial business metrics,” Gold Fields said in its annual report for 2023 released last week.
The Gold Fields share price increased 3.41% on the JSE to close at R303.90 in Thursday trade session.
This was after the chairperson of the company, Yunus Suleman, said Gold Fields would focus on growth through exploration and acquisitions in existing and new jurisdictions. Gold Fields would use the $1 billion cash generated in 2023 to fund this.
“Our mines generated approximately $1bn in cash during 2023, enabling us to fund growth, pay strong dividends and ensure debt levels continue to remain stable. We remain committed to exploring alternative reserve replacement and growth options in our existing jurisdictions and other top-tier mining countries,” said Suleman.
In addition to Gold Fields’ existing near mine and district exploration, the gold miner “will pursue greenfields exploration, development projects, bolt on acquisitions of producing assets and strategic joint venture” partnerships.
In February, Gold Fields said it was investing at least $1.1bn in capital expenditure this year. This would be spend more on infrastructure upgrades and fleet replacements at its South Africa operation, South Deep, which will ramp up output over the next two years, as well as into planned development at the St Ives mine in Australia.
The Gold Fields board has already approved the proposed Tarkwa/Iduapriem joint venture (JV) with AngloGold Ashanti in Ghana although government approvals for the project are still pending.
On completion, the Ghana JV with AngloGold Ashanti would become the largest gold mine in Africa, the company said.
“Gold Fields will have the majority stake and will manage the combined asset set to be the largest gold mine in Africa.”
The management of JVs and delivery of JV projects in Canada and Ghana are among the top board priorities for Gold Fields this year. The company’s board will also prioritise ramp up of production from South Deep.
A rally in gold prices has left mining executive bullish about prospects of the industry and this has been driving merger and acquisition activity in the gold mining industry.
However, Mike Fraser, the CEO of Gold Fields, is looking beyond the current stability in gold prices. He is positioning the company for a possible gold price downturn by managing costs and putting the company on a sustainable production path.
“We are mindful that the favourable gold price and exchange rate support will not persist,” said Fraser.
In 2023, Gold Fields had total attributable production of 2.11 million ounces of gold and 58.7Mlbs of copper. Its attributable proved and probable mineral reserves touched 44.65 million ounces of gold and 336Mlbs of copper.
Last month, Gold Fields completed the divestment of its 45% interest in Asanko Gold Mine to Galiano Gold for $170 million, in addition to a 1% net smelter royalty on future production from the Nkran deposit.
Gold Fields has received $65m in cash and 28 500 000 shares in Galiano as upfront proceeds for the divestment.
BUSINESS REPORT