Gold miner Gold Fields Ltd. (GFI) has announced its production and cost guidance for the first quarter of 2013. The company expects attributable Group production for the new Gold Fields, excluding contribution from Sibanye Gold, to be 476,000 equivalent ounces of gold, at total cash costs and notional cash expenditure (:NCE) of approximately $830 per ounce and $1,290 per ounce, respectively.
The expected production for the quarter is at par with the production outlook for 2013 of 1,825,000 to 1,900,000 ounces and the cash cost and NCE guidance of $860 per ounce and $1,360 per ounce, respectively.
Gold Fields will include production of Jan and Feb 2013 from Sibanye Gold in its first- quarter 2013 results. Thus, Gold Fields expects production to be roughly 662,000 equivalent ounces of gold at total cash costs of $915 per ounce and NCE of $1,325 per ounce. Gold Fields is scheduled to post its first quarter results on May 10.
Gold Fields, one of the prominent gold mining companies along with Barrick Gold Corporation (ABX), faced an illegal strike by the employees at its Tarkwa and Damang mines in Ghana leading to an immediate halt of its productions. At these mines, Gold Fields holds a 90% interest.
This strike is the result of a number of demands coming from the Ghana Mineworkers Union (:GMU) and its affiliates, the Professional Managerial Staff Union and the Branch Union. These employees even threatened Gold Fields to take industrial action if their demands are not fulfilled favorably within 24 hours.
The demands of the Union included certain disputes in relation to the determination of profit share payments to employees, the unconditional reinstatement of an employee who was dismissed following an internal disciplinary procedure, dissatisfaction with certain management structures, removal of certain members of senior management, concerns about catering delivery models, and allegations of discrimination between expatriate and Ghanaian employees.
Gold Fields is taking actions to resolve the issues by analyzing and investigating the demands. In the meantime, Gold Fields appealed to its employees to maintain law and order. Gold Fields is of the opinion that the industrial action is illegal and unprotected.
Gold Fields currently carries a short-term Zacks Rank #5 (Strong Sell).
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