UPDATE 1-Gold Fields Q3 gold output dips, sees Q4 recovery

* Q3 adj EPS at 45 cents v 145 cents in Q2

* Q3 gold output at 793,000 vs 900,000 oz in Q2

* Q3 total cash costs up 15 pct to $703/oz

* Q4 output seen at between 875,000-900,000 oz

(Adds CEO, details)

JOHANNESBURG, May 7 (BestGrowthStock) – South Africa’s Gold Fields
(GFIJ.J: ), the world’s 4th-largest listed gold miner, posted weak
third quarter earnings below market consensus on falling output
and rising costs, but forecast a recovery in the fourth quarter.

Gold Fields — the No. 2 producer in Africa with operations
in Africa, South America and Australia — said the decline in
production in South Africa was caused by a slow start-up in
January after the Christmas break and the maintenance of the
water pump column at the South African Kloof mine’s main shaft.

The declining production was partially offset by a 6 per
cent rise in the combined output of its international mines.

The company on Friday reported adjusted earnings per share
of 45 cents to end March against a market estimate of 67 cents,
down from 145 cents in the December quarter.

Third quarter output — which had been revised downwards
twice — fell 12 percent to 793,000 ounces from 900,000 ounces
in the previous quarter, but the firm said output would recover
to between 875,000-900,000 ounces in the fourth quarter.

“Production at all of the South African mines has since
improved and we expect that increase to be sustained in Q4,”
Chief Executive Officer Nick Holland said in a statement.

“The most important thing on our radar is cost control. We
want to reduce costs across our operation so we can reach our
objective of generating free cash and growth.”

Total cash costs rose 15 percent to $703 per ounce.

Analysts had forecast weaker March quarter earnings for Gold
Fields and its South African peers, due to lower gold output,
rising costs and a marginal rise in the dollar and rand price of
bullion. [ID:nLDE64315Z]

AngloGold Ashanti (ANGJ.J: ) also posted weaker earnings on
Friday, and Harmony Gold (HARJ.J: ) reports on Monday.
[ID:nLDE6450R5]

Higher electricity tariffs and a new revenue based royalty
could worsen their cost outlook in the June quarter, analysts
said. [ID:nWEB0627] [ID:nLDE61N0HE]

South African gold producers, who sell their gold in dollars
and pay their costs in rand, saw little benefit from the
increase in the dollar price of gold due to a strong rand.

The gold price in the March quarter rose $10 an ounce or 1
percent to an average of a record $1,110 per ounce from $1,100
an ounce in the December quarter.

The rand gold price gained one percent to 267,300 rand a kg
from 264,500 rand per kg.

Gold Fields earnings are adjusted to exclude the effects of
financial instruments and foreign debt.

Stock Market Research

(Reporting by James Macharia; Editing by Eric Onstad)

UPDATE 1-Gold Fields Q3 gold output dips, sees Q4 recovery