Gold Fields earnings rise as low-cost mines boost output

Gold bars are stacked at a safe deposit room of the ProAurum gold house in Munich
Gold bars are stacked at a safe deposit room of the ProAurum gold house in Munich March 6, 2014. REUTERS/Michael Dalder

JOHANNESBURG (Reuters) - South African bullion producer Gold Fields reported a 20 percent rise in quarterly profit on Thursday despite a fall in prices and production as output increased at its lower-cost mines.

But the company also reported fresh setbacks at its flagship South Deep project, its last mine in South Africa, where production has been curtailed by maintenance and a safety review.

Delays at South Deep, a mechanised operation where a team of Australian engineers has been brought in to iron out problems, has been a source of annoyance to investors.

But Gold Fields said the review "will make the mine safer and position the mine for an improved performance in 2015".

Gold Fields' adjusted headline earnings increased to 24.6 cents per share in the quarter to the end of June from 20.5 cents in the previous quarter and versus a loss of 36 cents for the same quarter a year earlier.

Production fell by 2 percent to 548,000 ounces compared to the March quarter and the gold price also slipped to an average of $1,288 an ounce from $1,293.

But the company's lower-cost mines boosted output and earnings.

Output at the Granny Smith mine in Australia rose to 85,000 ounces from 65,000 ounces while all-in costs fell to $692 per ounce from $910.