Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Gold Fields (NYSE:GFI), the fourth-biggest bullion producer, said it will fail to reach its predicted output target of 3.5 million ounces for 2012 and that it is revising its operations to increase the delivery of profits rather than ounces of the precious metal.
South Africa’s second-largest gold miner posted lower net earnings of R1 606-million for the June quarter compared with R2 082-million in the March quarter. Profit tumbled 16% as costs rose and prices decreased.
Net June-quarter earnings of $198 million were far below than the $268 million for the first quarter, but up on the $186 million compared to the previous year.
The company produced 862,000 oz at a total cash cost of $851/oz and an all-in cost of $1,308/oz.
Gold Fields’ shares were down over 3.2% at 3:37 EDT.
