Gold Fields Limited (NYSE:GFI) shareholders are now losing patience as the South Deep deposit of the company in the South African region failed to deliver expected returns. The fact that company failed to overcome the losses irked the shareholders more. However, the Chief Executive Officer of the company, Nick Holland stated that the shareholders should not lose hope.
The second largest gold-bearing ore body in the world repeatedly failed to meet the annual targets with the company sinking beyond $620 million into the mine apart from the enormous amount paid in 2006 to purchase the asset. Gold Fields’ plans to announce a new project next year in February and will take around 18 months to assess whether the plan is delivering the results or not.
Gold Fields coming up with turnaround plan at South Deep deposit site
The company in August this year stated that it is coming up with another turnaround plan at the South Deep deposit site, the only one place now left for trying in the South African area. Gold Fields is battling with the failure of South Deep since years and management is quite aware of that.
In an interview, the CEO of Gold Fields said, “They are now very impatient, and one can understand it but I think we need to calmly look where we are and evaluate the best way forward. There is a large resource base there, it’s well-drilled and we have spent a lot on infrastructure development costs. We are not far away, we just need more time.”
Holland further added that Gold Fields is not the only company facing such issues in South Africa as many other gold producers are losing owing to the persistently high costs. He further added that the aging and deep mines require intensive labor and mining methods which puts pressure on the expenses. That is one reason; the South African gold production dropped in recent times.
Gold Fields to begin mining in Western Australia
After the dismal performance of South Deep deposit site, Gold Fields is now trying to gain some revenue by collaborating with Gold Road Resources for the Gruyere project in Western Australia. The new project may begin at the start of the next month and the gold production will start coming in H2 2019.