Gold producer Gold Fields Limited (GFI) announced that it is on track to meet its production targets for 2013. The company retained its guidance of 1,825,000 and 1,900,000 ounces (oz) of gold for 2013 despite a 5% decline in production in the second quarter of 2013 compared with the first quarter. Cash cost and notional cash expenditure (NCE) for the year are expected to be $860/oz and $1,360/oz, respectively.
Gold Fields also provided its outlook of 451,000 gold-equivalent ounces for the second quarter of 2013, with cash costs and NCE of about $860/oz and $1,250/oz, respectively. The primary cause for the sequential decline in production in the second quarter was the illegal strike at the Tarkwa and Damang mines in Ghana. The illegal strike was resolved following the settlement of issues between Gold Fields’ management team and the Ghana Mineworkers Union (GMU).
This illegal strike resulted from a number of demands coming from the GMU and its affiliates, the Professional Managerial Staff Union and the Branch Union. These employees threatened to take industrial action against Gold Fields if their demands are not fulfilled.
Disputes relating to 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 some members of senior management, concerns regarding catering delivery models, and allegations of discrimination between expatriate and Ghanaian employees are some of the causes of concern for the Union.
Gold Fields currently carries a Zacks Rank #4 (Sell). The company is scheduled to post its second quarter results on Aug 22.
Other companies in the mining industry with favorable Zacks Rank are Lake Shore Gold Corp. (LSG), NovaGold Resources Inc. (NG) and Pretium Resources Inc. (PVG). All of them carry a Zacks Rank #2 (Buy).
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