Volatility Cuts Both Ways For Gold Fields

Posted by on February 8, 2010 at 8:18 am in Business, Other Business Stories

by: Scott Nystrom,
Because of high production costs and no hedges, profits can swing wildly for this South African miner.

On Thursday, Feb. 4, Gold Fields kicked off the fourth-quarter 2009 gold miners’ earnings season by announcing profits of $187 million, a 44% gain over the previous quarter, and up 146% from the fourth quarter of 2008.

The boost to the bottom line for Gold Fields ( GFI – news – people ) was driven higher by a rising gold price in the fourth quarter compared to the previous quarter. Shares were perversely rewarded for the strong performance, walloped by 9% Thursday and then stabilizing and turning back higher Friday.

Looking forward, the company stated it hopes to achieve greater consistency in production for 2010. Gold Fields CEO Nick Holland said the company is still on track to be a million-ounce-per-quarter producer.

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