Gold Fields Profit Drops as Further Review of Operations Planned

Gold Fields Ltd. (GFI), the South African company with operations in Ghana and Australia, reported a drop in first-quarter profit after production fell as the miner plans additional spending cuts.

Adjusted net income dropped to $68 million, or 9 cents a share, from $127 million, or 18 cents a share, in the prior quarter, the Johannesburg-based company said today in a statement. Output slipped 11 percent to 477,000 ounces from 534,000 ounces in the previous three months.

The shutdown of marginal production after a review that finished late last year was implemented during the quarter, Gold Fields Chief Executive Officer Nick Holland said in the statement. “As a consequence of the review, exploration and project activities are being curtailed so as to deploy our available financial capability and technical skills on the most promising activities.”

The company plans to reduce so called near-mine exploration, where it looks for extensions to existing deposits, by more than 50 percent this year to $28 million from $65 million spent in 2012, according to the statement. Capital expenditure for international growth projects is under review and expected to be significantly lower than what was spent last year, Gold Fields said.

The average price of gold fell 5 percent in the first quarter to $1,632.60 an ounce from the previous three months. Gold analysts in South Africa compare companies’ quarterly results sequentially.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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