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Gold Fields Q4 gold earnings fall but output rises

Gold Fields, the world’s fourth-biggest gold producer, said on Friday output of the metal rose 4 percent in the  fourth quarter while costs fell, but it posted lower earnings due to a stronger rand.South African gold miners sell  their gold in dollars, and pay their costs in rand, which gained in the June quarter on increasing global demand for  risk and expected capital inflows.

Gold Fields, the No. 2 producer of the metal in Africa, said in a statement gold  production rose 4 per cent to 906,000 ounces and total cash costs fell 6 per cent to $512 per ounce.The company  forecast production in the September quarter would match that of the June quarter, while total cash costs would jump  15 per cent to $590 per ounce mainly because of a new wage deal agreed last month and electricity tariff increases  in South Africa, as well as a stronger rand/dollar exchange rate.For the third quarter to the end of June, the  company said adjusted headline earnings per share came in at 140 South African cents, beating a market consensus of  121 cents, but were below the 204 cents posted in the third quarter to end March.”As a consequence of the stronger  rand, our operating margin decreased from 47 per cent to 43 per cent,” Nick Holland, Gold Fields’ chief executive  officer said.

Headline earnings are the key profit measure in South Africa, stripping out capital, non-trading and some  extraordinary items. Gold Fields earnings are adjusted to exclude the effects of financial instruments and foreign  debt.Gold Fields said it would pay a final dividend of 80 South African cents, and a total dividend of 110 cents.  The company paid a final dividend of 120 last year. The group said a recovery at its Beatrix and Tarkwa mines in  South Africa and Ghana respectively, as well as an improvement at its Cerro Corona mine in Peru had boost gold  production.


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