Gold Fields eyes rapid ramp-up at new Chile mine, lifts output forecast

The Salares Norte gold project is located in the Atacama region of northern Chile. (Image courtesy of Gold Fields Chile.)

South Africa’s Gold Fields on Thursday raised its 2024 gold output forecast to between 2.33 million and 2.4 million ounces, saying it expects a rapid production ramp-up at its new Salares Norte mine in Chile, which comes online in April.

The Johannesburg-based miner is racing to start production at Salares Norte after several delays, and after its output last year dipped due to production decreases at its operations in Ghana and South Africa.

Construction of the $1 billion mine in Chile started in 2020 with production initially expected early in 2023. However, the mine has missed several targets due to delays caused by Covid-19 and bad weather.

Salares Norte, which is key to Gold Fields’ long-term goal of raising output to about 2.8 million ounces annually, is expected to produce 250,000 ounces of gold this year, before ramping up to 580,000 ounces in 2025.

Gold Fields CEO Mike Fraser, who took up the post to head the company in January, told Reuters there was “a high degree of confidence” the Chilean mine would rapidly ramp up output.

“We’re well positioned because we’ve already got about 520,000 ounces of gold sitting on stockpile. The mining operations have worked really well, we’re just now closing out the pre-commissioning and commissioning of the processing plant,” Fraser said.

Gold Fields posted a 21% decline in headline earnings to $837 million in the year ended December 2023, down from $1.06 billion the previous year, on the back of a dip in output and higher costs.

Its attributable gold production of 2.304 million ounces was 4% lower than the previous year’s, while all-in-sustaining costs – an industry measure – rose 17% to $1,295 per ounce.

Gold Fields’ 2023 earnings also came off a higher base after its 2022 income was boosted by a $202 million break fee it received after its failed bid to acquire Canada’s Yamana Gold.

The company declared a final dividend of 4.20 rand ($0.2222) per share, bringing the total for the year to 7.45 rand.

($1 = 18.9051 rand)

(By Nelson Banya and Felix Njini; Editing by Mrigank Dhaniwala and Tom Hogue)


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