(Kitco News) - (Reuters) Gold Fields Ltd recorded a 9% increase in gold production for the third quarter that ended September from a year earlier, but its cost of production increased, the South Africa-based miner said on Thursday. Annual global gold production had fallen for the first time in 2019, followed by 2020 as no new major mines were discovered or brought online. This has prompted a long-term view that gold reserves have peaked out, triggering a wave of capital expenditure from miners globally to bring new mines online and benefit from high prices and demand. However, high capital expenditure also adds to the all-in sustaining costs (AISC) - a metric used by gold miners to measure overall cost of producing gold.
Gold Fields, which has mines across Africa, Australia and Latin America, produced 606,000 ounces of gold in the quarter at an average AISC of $1,016 per ounce, 5% higher cost than the corresponding period a year ago.
Costs rose mainly because of high capital expenditure in Chile, where it is developing a gold mine, and were also fuelled by stronger local currency exchange rates in Australia and South Africa, the miner said in a statement. The company, however, said that it was still on track to meet its cost and production guidance with its AISC expected to be between $1,020 per ounce and $1,060 per ounce.
Gold production for the full year will be in a range of 2.3 million ounces to 2.35 million ounces of gold, as estimated in the beginning of the year, it said. While Gold Fields will fail to meet its target of 65% project completion of Salares Norte project in Chile by the end of 2021, it said the project was on track to deliver first gold by the end of Q1 2023.