While gold marches blindly into unknown territory, Gold Fields
When CEO Nick Holland took the reins at Gold Fields more than a year ago, his company had been forced into a reactive posture by a spate of challenges, including mine fatalities and electricity shortages. While fellow South African miners like AngloGold Ashanti
When the company last year revealed an ambitious plan to increase gold production to 1 million ounces per quarter during 2009, I wondered whether the "Easy Button" had been found.
As any mining industry CEO will tell you, though, the path to increased production is invariably lined with potholes and pitfalls. The goal has now been deferred to sometime beyond fiscal 2010, but the accompanying roadmap makes the milestone appear well within reach.
Gold Fields' flagship South Deep mine, featuring almost 30 million ounces of gold reserves, is outpacing the company's own timetable for achieving 300,000 ounces of production next year. Citing "much greater confidence in the South Deep orebody and mine plan," Holland reiterated a longer-term production target approaching 800,000 ounces by 2014. Gold Fields is focusing efforts upon accessing additional ores at its underground operations, with an emphasis upon automation of extractive processes.
Meanwhile, Gold Fields is stepping up exploration efforts around the globe to enhance its already impressive trove of 81 million ounces of gold reserves. To place that collective treasure in context, consider that Goldcorp's
Selling its stake in Eldorado Gold
The road ahead will not be easy for Gold Fields, as production from the depths of mature South African deposits seldom is, but I believe Holland will deliver on his revised production target, and see significant long-term potential in vetting and then developing some promising resources around the globe.