Gold Fields: Lower gold production increases all-in-sustaining costs
Lower gold production in the quarter has contributed to a material increase in all-in-sustaining costs (AISC) and all-in costs (AIC) across all its business. Group AISC for continuing operations was US$1,738/oz, 51% higher YoY and 28% higher QoQ while group AIC was 58% higher YoY and 31% higher QoQ to US$2,115/oz for the quarter. The group AIC includes costs for Salares Norte (US$319/oz), Windfall (US$46/oz) and Corporate (US$17/oz).
Salares Norte AIC included costs for the project but marginal gold equivalent production for the quarter as first gold was delivered on 28 March 2024. Group AIC for the mining operations (excluding Salares Norte, Windfall and Corporate) were US$1,733/oz (Q1 2023: US$1,142/oz and Q4 2023: US$1,321/oz).
Returning production to normalised levels at the operations affected by weather-related and operational challenges is key in the short-term to addressing the material cost increases experienced in the quarter. To address this its current Asset Optimisation programme includes a focus on delivering the 2024 operating plan and proactively identifying medium to longer term opportunities across the business.
This involves completing detailed asset diagnostics to assess current performance, outlining potential opportunities, defining improvement initiatives based on constraints and key levers, establishing project charters and developing execution plans with senior asset leaders to deliver and embed priority projects.
These initiatives represent operating effectiveness, volume, work quality and elimination of wastage that contribute to improving the AISC. These will be crucial for the long-term sustainability of our operations to offset the risk of margin erosion through persistent inflation. In addition, unit costs and global cost curve position are key considerations for assessing reserve replacement, growth and disposal opportunities as we manage our portfolio to improve the quality and value of the ounces that it produces. An example is the Salares Norte project which with a life of mine AIC of US$820/eq oz (Real 2024$) is expected to markedly improve the group’s AIC.
