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Gold Fields dividend grows as profit shines - BDlive

Friday, 19 August 2016

GOLD Fields posted its largest interim dividend since 2012 as its South Deep mine posted its first cash flows since the company bought it a decade ago and struggled to bring it to account.

Gold Fields paid a 50c per share dividend, the highest since its 160c payout in June 2012. The latest interim dividend dwarfed the total annual dividends paid since that year.

Gold Fields posted a net profit of $115m for the six months to end-June compared to a $2m loss the year before

"Gold Fields did well. They beat expectations for the first half of the year and raised expectations for a strong second half of the year. The big dividend shows commitment and they’re likely to pay more in the second half," said an analyst who declined to be named for company policy reasons.

The standout performance for the interim period was the 87% year-on-year increase in gold output from the South Deep mine, which has for years missed production targets and failed to generate cash.

Gold Fields bought the mine in 2006 and has spent a total of R28bn on it — including the R15bn purchase price — to develop it, changing mining methods and mine plans a number of times as it struggled to make the mine profitable.

In the second quarter of the year, it generated $63m in net cash flow for the first time as it employed a fresh mechanised mining approach, and a new management team took control of the operation and its 68-million ounce resource, the world’s second-largest known gold deposit after Grasberg in Indonesia.


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