Gold Fields (JSE, NYSE: GFI) on Wednesday reported a jump in 2019 profit as the South African miner benefited from increased gold production and a higher gold price.
Gold Fields also said it intended to place new shares to raise about $269 million to help fund its new Salares Norte mining project in Chile.
The share placing, which is around 5% of the company’s existing issued ordinary shares, will be done through an accelerated bookbuild.
Salares Norte is expected to have a life of around 11 years and an average annual production of 450,000 ounces of gold over the first seven years, Gold Fields said.
The gold-silver project in Chile is expected to begin producing in the first quarter of 2023.
“Following a review of the alternatives available to the company and consistent with the company’s prudence regarding its debt position, the board believes that a combination of the proceeds of the placing, operational cash flow and existing debt facilities will allow the company to fully fund the construction of Salares Norte,” Gold Fields said in a statement.
The company, which operates producing gold mines in South Africa, Ghana, Australia and Peru, said headline earnings per share (HEPS) rose to $0.20 per share for the full year ended Dec. 31, from $0.07 in the year prior and in line with what the company had flagged to the market.
HEPS is the main profit measure used in South Africa that strips out certain one-off items.
“Gold Fields had a strong finish to 2019, reporting higher production and lower costs for the last quarter of the year,” chief executive officer Nick Holland said in a statement.
The company reported 590,000 ounces of attributable gold production for the final quarter of the year from 523,000 ounces a year earlier.
Attributable equivalent gold production for the miner for 2020 is expected to be between 2,275 million ounces and 2,315 million ounces, it said.
Gold Fields declared a final dividend of 100 South Africa cents per ordinary share giving a gross dividend of 160 cents compared with 40 cents per share in the previous year.
(By Noor Zainab Hussain and Tanisha Heiberg; Editing by Jane Merriman)