South Africa's Gold Fields earnings surge on strong gold prices

JOHANNESBURG (Reuters) - South African miner Gold Fields Ltd posted a more than four-fold jump in annual earnings on Thursday on the back of higher bullion prices and said it is preparing for substantial capital expenditure in 2021.

Workers are seen underground South Africa's Gold Fields South Deep mine in Westonaria, 45 kilometres south-west of Johannesburg, South Africa, March 9, 2017. REUTERS/Siphiwe Sibeko

Headline earnings per share for 2020 rose 315% to $0.83 from $0.20 a year earlier, driven by a surge in gold prices, which reached a record above $2,000 an ounce in August.

Higher gold prices and a weaker rand to the dollar have helped cushion miners from the impact of the COVID-19 pandemic.

“Gold Fields has delivered a strong set of results for 2020, with production and costs both within the revised guidance,” said Gold Fields Chief Executive Officer Nick Holland.

Holland will be retiring in April when former Anglo American Platinum boss Chris Griffith steps into the role.

The Johannesburg-listed miner is set for big capital expenditure in 2021, with total capex expected to reach $1.18 billion as its Salares Norte project in Chile reaches its peak spending. The project is expected to be 70% complete by the end of the year, the miner said.

Gold Fields will also be undertaking various projects at its other operations, including the Agnew mine in Australia and the South Deep mine in South Africa.

The company declared a final dividend of 3.20 rand ($0.22) per share for 2020, bringing the annual dividend to 4.80 rand per share compared with a total dividend of 1.60 rand per share a year earlier.

Production remained within the revised guidance range, increasing by 2% to 2.236 million ounces from 2.195 million ounces.

The gold miner said the impact of the pandemic was limited to 100,000 ounces at its Cerro Corona and South Deep operations.

Cash flow in 2020, which excludes project capital, rose to $868 million from $552 million, while net debt reduced by $595 million.

Reporting by Tanisha Heiberg; Editing by Clarence Fernandez and Subhranshu Sahu