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Gold Fields concern about economic challenges
• Martin Preece — Interim CEO, Gold Fields

Gold Fields concern about economic challenges

Gold Fields, a gold mining firm, says it is gravely concerned about the political and economic environment in the country.

It held the view that the terrain has become more challenging especially with developments in the latter part of 2022 and the early part of 2023.

Consequently, the company said it was continuing to engage with government and through industry bodies to reiterate its stance on key fiscal matters.

It indicated that “the process of claiming certain rebates relating to our development agreements has become more onerous.”

The concerns raised by Goldfields in a statement copied to the Graphic Business at the weekend comes at a time when the South Africa-listed gold miner has vehemently disputed tax payments demanded by the Ghana Revenue Authority (GRA) after an audit.

The gold miner is, however, working with the tax authority to resolve the matter.

Gold Fields, which has three gold-mining operations in Ghana, said it could not disclose the size of the back taxes bill but was emphatic when it said it was “nowhere close” to the amount Ghana has demanded from mobile operator MTN.

The Ghana tax authority last month slammed MTN with a $773 million bill for back taxes after auditing it for the years 2014 to 2018. However, after fighting back that has been reversed.

The GRA audit of Gold Fields covered the period 2018 to 2020, according to a statement from the company but it is not clear what the outcome is presently as discussions continue.
Production pattern

Meanwhile, total production decreased by four per cent to 838koz in 2022 from 871koz in 2021 mainly due to decreased production at Damang, the company said in a release.

This was the result of the completion of the Damang pit cutback as well as decreased production at Asanko with the treatment of lower grade stockpiles due to the temporary cessation of mining activities in July 2022.

All-in cost increased by 10 per cent to US$1,220/oz in 2022 from US$1,112/oz in 2021 mainly due to cost inflation and higher all-in cost at Damang.

The company said the region produced adjusted free cash flow (excluding Asanko) of US$219m in 2022 compared to US$292m in 2021.

Redemption payment

Gold Fields further indicated that it received no payments on the redemption of preference shares from Asanko in 2022. Gold Fields received US$5m on the redemption of preference shares from Asanko in 2021.

If included, the adjusted free cash flow in 2021 would be US$297m.

Gold production increased by two per cent to 531,600oz in 2022 from 521,700oz in 2021 mainly due to higher tonnes processed and improved yield.

Yield increased by one per cent to 1.18g/t in 2022 from 1.17g/t in 2021 due to higher grades processed. Ore rehandled from stockpiles was 1,250kt at a head grade of 1.42/t in 2022 compared to 3,336kt at a head grade of 0.78g/t in 2021.

Total tonnes mined, including capital waste stripping, decreased by four per cent to 87.6Mt in 2022 from 91.7Mt in 2021 due to less capital waste stripped in 2022.

Ore mined increased by 19 per cent to 14.0Mt in 2022 from 11.8Mt in 2021 due to exposed ore areas in Akontansi Central and Teberebie Cut 7 pits, as a result of more capital waste stripped in 2021. Capital waste stripped decreased by 18 per cent to 43.4Mt in 2022 from 53.1Mt in 2021. Operational waste increased by 12 per cent to 30.2Mt in 2022 from 26.8Mt in 2021, due to more tonnes mined below the capital waste elevations.

All-in cost increased by eight per cent to US$1,248/oz in 2022 from US$1,155/oz in 2021 due to higher capital expenditure and higher cost of sales before amortisation and depreciation, partially offset by higher ounces sold. 

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