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Gold Fields Ltd ADR (GFI) has reported a robust start to 2025, with its Q1 earnings per share (EPS) significantly exceeding expectations. The company posted an EPS of $0.85, outpacing the forecast of $0.59 by 44.07%. This financial performance has positively influenced investor sentiment, resulting in a 6.84% increase in the stock price, moving from $30.26 to $32.33 post-earnings. Currently, the stock is trading at $37.49, slightly down by 0.29% in the premarket session. According to InvestingPro data, GFI has delivered an impressive 191.6% return year-to-date, with an "EXCELLENT" Financial Health Score of 3.76 out of 5.
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Key Takeaways
- Gold Fields reported an EPS of $0.85, beating the forecast by 44.07%.
- The stock price surged 6.84% following the earnings announcement.
- Strong cash flow generation allowed for significant dividend payments and debt reduction.
- Key projects like Salares Norte and Windfall showed positive developments.
Company Performance
Gold Fields Ltd ADR demonstrated strong operational performance in Q1 2025, with gold equivalent production reaching 551,000 ounces, aligning with the company’s plans. This performance, coupled with effective cash flow management, enabled the company to pay $346 million in dividends and reduce net debt, aiming for a net debt to EBITDA ratio of 1x through the cycle. The company’s strategic acquisitions, such as Gold Road Resources, further strengthened its competitive position.
Financial Highlights
- Revenue: $3.48 billion
- Earnings per share: $0.85, a significant beat over the forecasted $0.59
- Dividends paid: $346 million
- Net debt reduction achieved
Earnings vs. Forecast
Gold Fields reported an EPS of $0.85, significantly surpassing the forecast of $0.59 by 44.07%. This result marks a substantial earnings surprise, indicating effective management and operational efficiencies. The revenue of $3.48 billion also aligns with positive market expectations. InvestingPro data reveals the company maintains impressive gross profit margins of 51.92% and has consistently paid dividends for 34 consecutive years, demonstrating long-term operational excellence.
Market Reaction
Following the earnings report, Gold Fields’ stock price rose by 6.84%, reflecting investor confidence in the company’s financial health and strategic direction. Currently, the stock is trading near its 52-week high of $38.06, indicating strong market interest and positive sentiment. InvestingPro analysis indicates the stock is in overbought territory based on RSI, with analyst targets ranging from $24.50 to $46.00 per share. Based on InvestingPro’s Fair Value model, the stock appears to be trading near its fair value.
Outlook & Guidance
Gold Fields remains on track with its full-year production guidance, with significant developments expected in projects like Salares Norte, which is anticipated to reach commercial production by June 2025. The company’s strong financial position is evidenced by its healthy current ratio of 1.89 and moderate debt levels, with total debt to capital at just 7%.
Access the complete GFI Pro Research Report and detailed financial metrics by subscribing to InvestingPro, covering over 1,400 top US stocks with expert analysis and actionable insights. The Windfall project is also progressing, with a feasibility study update expected in the second half of 2025.
Executive Commentary
CEO Mike Fraser highlighted the company’s strong cash generation across its portfolio, stating, "We are in a very fortunate position that we foresee a strong cash generation across the portfolio." He also emphasized the company’s strategy to enhance reserves through additional brownfield drilling.
Risks and Challenges
- Potential technical adjustments needed in the Salares Norte project.
- Environmental permitting challenges for the Windfall project.
- Market volatility affecting gold prices could impact future earnings.
- Integration risks associated with the acquisition of Gold Road Resources.
Q&A
During the earnings call, analysts inquired about the Damang mine agreement, which allows a 12-month operation and transition. Questions also focused on the Windfall feasibility study and cost optimization, as well as the strategic rationale behind the Gold Road acquisition, seen as a low-risk portfolio enhancement.
Full transcript - Gold Fields Ltd ADR (GFI) Q1 2025:
Conference Operator: Good day, ladies and gentlemen, and welcome to the Goldfields Q1 twenty twenty five Operating Update Market Conference Call. All participants will be in listen only mode. There will be an opportunity to ask questions later during the conference. Please note that this call is being recorded. I would now like to hand you over to Mike Fraser, Goldfield’s CEO.
Please go ahead.
Mike Fraser, CEO, Goldfields: Hi. Good morning, and good afternoon, everybody, and thank you for joining us today on our quarter one twenty twenty five operating results update call. I’m in Johannesburg, and joined in Johannesburg with me is Jongis Mogabula, Thomas Mengel, Alex Dahl and Chris Gracias. And we have a really good turnout. So thank you all for joining.
Just a couple of comments, and then we can jump straight into questions. Firstly, I just want to talk about safety performance. We have put in a huge amount of effort into our safety improvement plan over the past twelve months. And pleasingly, I can say that some of these benefits are starting to bear fruit, and we continue to see improvement in many of our safety metrics. In addition, pleasingly, I can report that we have now had 12 without any fatalities across the business.
And whilst this isn’t a good statistic on its own right, it does demonstrate the benefits of the effort that we are putting in and meeting our goal of delivering safe, reliable, cost effective production across our operations. In the quarter, we had a good start to the year with our operational momentum reported in H2 continuing into Q1 twenty twenty five. Our gold equivalent production of 551,000 ounces is in line with our plan for the quarter and importantly means that we remain on track to meet our guidance for the full year. From a cash flow point of view, we delivered strong cash flow during the quarter, obviously, supported by good supportive gold price environment despite paying out $346,000,000 in dividends. We were able to reduce our net debt in the quarter.
And our focus during the quarter, apart from, say, our safe, reliable operations of our core assets, was continuing the ramp up at Salares Norte and preparing the plant for the upcoming winter. We were able to increase production by 13% in the quarter, in line with our ramp up plan. At the Windfall project, the environmental permitting progressed during the quarter, and we continued to advance detailed engineering and ramping up our project execution team ahead of a final investment decision planned for 2026. Post the quarter end, you would have seen a lot of communication and media around our demand mining Ghana. And pleasingly, post quarter end, we reached an agreement with the government of Ghana for a way forward with demand, which includes an extension of the mining lease for twelve months to Goldfields to continue to operate and mine stockpiles as well as recommence open pit mining.
And during the twelve months, we will look to a transition of this asset to new ownership during that period. Underpinned by this support was a clear and open support for the life extension at Tarka Mine and the lease extension there, and we immediately commenced preparing for the application to extend those leases. Lastly, as you would have seen by the press yesterday, we also concluded a binding agreement to acquire 100% of Gold Road Resources, which was announced yesterday. We believe this transaction represents low risk opportunity to enhance our portfolio through the consolidation of the Gruyere mine, which we already operate. Full ownership of Gruyere will likely take place in around October and will immediately enhance our cash flow profile and enable us to streamline decision making and increase flexibility with respect to the operation and future development opportunities.
I’ll now pause there and hand over to Q and A.
Conference Operator: Thank We have a question from Tanya Jakusconek of Scotiabank.
Tanya Jakusconek, Analyst, Scotiabank: Maybe I’m just going to start on this demand agreement with the government and then the joint venture pause with AngloGold. Can we assume these are tied together in terms of Anglo’s decision to pause? Or maybe you can shed some light on why the pause at the same time as demand is negotiated?
Mike Fraser, CEO, Goldfields: Yes. Thanks for that question, Tanya. I hope you’re well. Look, I think I wouldn’t like to speculate that these are connected in any way. I do believe that these are separate issues that are being dealt with on their own merits.
I think just a bit of color on Domingue. And probably during the course of last year, we’ve been talking about Domingue as a transition asset and an asset that the most important objective for us was to find a pathway for a future life extension opportunity, given that there is resource there, but it would require a considerable amount of capital that we didn’t see passing our hurdles to invest in. What we had done, though, is applied for an extension of that lease so that we could at least continue the feasibility study with an idea of finding a pathway for a transition. As it turned out, I think the agreement that we got to was a reasonably elegant one, which allowed us to deliver on our plan for the year, which is what we’ve committed to the market, but also then work to an orderly transition of the asset to an owner who would then obviously need to find the capital to reinvest into the future mine life extension. So I think that kind of stands on its own.
I think on the joint venture, I think what has happened with the passage of time is clearly one of the biggest drivers that has changed the economics of this asset is gold price. And without reading too much into it, I think you can quite easily see that all of a sudden, parties had a slightly different view of what that gold price meant for their different options analysis on a combined basis or a stand alone basis. I certainly believe that the industrial logic of the combination and the unlocked benefits that will be realized still is compelling. But what this pause does do is at least allows us to get through the lease extension process in a fairly short order of time, which is what the government of Ghana committed to, and equally allow both parties to focus on the things that are needed to be done within our own business. And then hopefully, that allows us to bring them bring these assets together to some point in the future.
Tanya Jakusconek, Analyst, Scotiabank: Explanation. Maybe I can move on if I can to just windfall. Wanted to try and understand a couple of things on windfall. Number one, we’ve got this feasibility study that is coming out in the second half of the year. And with it, I guess the updated reserves and resources.
Just trying to get an understanding of why, what do you need to still do on the reserves and resources to provide us with an estimate there given that there was a lot of drilling done already on the property. So number one, what should I be thinking about on the reserve front? And two, how should I be thinking about the feasibility study from a costing side in the sense that, you know, we’ve come through inflation. Should I be thinking that sort of normal inflation of from that period has been as high as like 15%, 20%? Should I be thinking those type of numbers in capital and operating costs?
Mike Fraser, CEO, Goldfields: Yes. Thanks, Tanja. Very good question. And maybe let me unpack it as follows. So the reason we did not declare and we do have, obviously, and overlaid our own internal operating assumptions and modifying factors on the reserve and resource statements that had previously been declared by Osisko.
But what we didn’t want to do is to go out and publicize that alongside of any changes to our development assumptions whilst we had the environmental permitting process underway. And so we wanted to allow that process to continue to unfettered, which has actually been supported by the original feasibility study that was completed in 2022 by Osisko Mining. So we really didn’t want to complicate that process. So that’s why we’ve left that to run on its own feet. The feasibility study is really, in our view, an update.
So the core parameters of the mine is not going to fundamentally change. We’re still going to be constrained by the environmental permit application, which is essentially a 300,000 ounce mine, a 2,000,000 ton per annum processing plant and a ten year mine life. But what we are doing is doing quite a number of trade off studies in this update around what you would always appreciate is, is there a trade off between operating cost and upfront capital? Are there optionality that we want to bring into our capital estimate now that gives us expansion and extension opportunities at a later stage? And obviously, the original feasibility study that was done in 2022 would be, I don’t want to say promotional, but clearly done with a slightly different purpose than trying to build a mine and a plant that we want to continue to operate for multiple decades.
So that’s kind of how it plays out. We will provide an update on those capital estimates later in the year once we’ve got a better feel for those, and obviously leading into our Board approval in, ideally, 2025. I think as you think about the what is a way to model this, quite clearly, there is going to be a significant component of escalation in related to just coal mining inflation. We are doing repricing on some of the key components now. And clearly, as tariffs move around, could be a component of what we need to model.
But equally, we are really minded to the fact that we’re wanting to build a plant that is going to be here for multiple decades. It is going to be a cornerstone of our portfolio. And without being overly irrational and exuberant on the upfront capital, I would be more inclined to on the side of being conservative upfront than putting ourselves into a corner for an asset that is going to be a high quality part of our business. So I think with those kind of cautions, think you’re kind of thinking of escalating with inflation and then maybe a little bit is not a bad way to think about it.
Tanya Jakusconek, Analyst, Scotiabank: Okay. And so I should be thinking that the plant then could be designed potentially after you’ve got the permits that you’re doing a plant for that size of the dam, you’re saying, but maybe it has the ability to factor in potential expansion in the future. Would you be thinking Yes. Of it that
Mike Fraser, CEO, Goldfields: And I think what we’d have to do is we’d have to go through probably another permitting process because I think we have the maximum of the provincial approval limit. But what we would design the plant to do is to ideally be have some kind of expansion potential to it. So that would be the idea.
Tanya Jakusconek, Analyst, Scotiabank: Yes, yes, you’d have to go for federal permit. Yes. Okay, thank And you for just my final question, if I can, just on Solaris Norte. It’s nice to see that the project is moving forward. Just wanted to ask about the commercial production because it appeared to me that we flipped a quarter from Q2 into Q3.
I know it had always been somewhere the end of Q2 and now it’s slipping into Q3. Can we just review what is it exactly that has moved us from Q2 to Q3? And what is your definition of commercial production? Is it thirty days or 60% capacity at the mill?
Mike Fraser, CEO, Goldfields: I think I think it’s it’s it’s two components. So it’s it’s thirty days of 60% and then 85% of metallurgical gold recovery on a thirty day average basis.
Thomas Mengel, Executive, Goldfields: Yes. And then it would be and forecast to continue operating
Mike Fraser, CEO, Goldfields: And to forecast to continue
Thomas Mengel, Executive, Goldfields: it would be the month after that thirty days is achieved. So that’s actually just flipped from May to June for the current modeling. That’s what happens. Then July becomes the month. Yes.
Tanya Jakusconek, Analyst, Scotiabank: Okay. Got it. So it’s just really the definition on that, the metallurgy part for thirty days after that, that we get that commercial production.
Executive, Goldfields: Okay. And that’s just from an accounting perspective and accounting definition, it doesn’t materially change. The ramp up profile for the year hasn’t changed.
Tanya Jakusconek, Analyst, Scotiabank: Okay. Yes. It. No, I really, really appreciate it. I’ll leave someone else to ask questions.
I really appreciate you taking all my questions. Thank you.
Mike Fraser, CEO, Goldfields: Thanks, Simon.
Conference Operator: The next question we have is from Shilan Modi of HSBC. Please go ahead.
Shilan Modi, Analyst, HSBC: Afternoon, team. Just a couple of questions from my side. How are you thinking about your debt levels post the conclusion of the acquisition of Gold Road? Does this affect the sequencing for windfall CapEx? And how does the ramp up of Solaris and the cash generation from that also feed into your thinking around debt and CapEx sequencing?
Mike Fraser, CEO, Goldfields: Yes. Thanks, Shyam. I’ll have a first attempt, but I will ask Alex to touch on it. I think the first thing I’ll just say is that, clearly, we are in a very fortunate position that we foresee a strong cash generation across the portfolio and a very strong deleveraging impact. Obviously, Saladis is a component of that support.
But in the modeling that we’ve done, obviously, we see that money going out in quarter four for the acquisition of Gold Road. But with the cash generation and the buildup over the next while, we feel quite confident with where debt levels are. But Alex, I don’t know if you want to comment about the modeling and the work we do.
Thomas Mengel, Executive, Goldfields: Yes. So obviously, we as we say, we want to target a net debt to EBITDA ratio of 1x through the cycle. So we run various modeling scenarios. And the base case being we run it at consensus, and then we do on that basis see ourselves being comfortably below the one. And then obviously, even at conservative prices, we might push there slightly, but then we see the deleveraging rapidly as Lars Nordde comes on.
So we do run multiple scenarios and all of that, and we’re quite comfortable that the balance sheet has the ability to hold
Mike Fraser, CEO, Goldfields: the debt level. Yes. And just on the timing, we don’t see any of this impacting the timing of windfall. That capital will largely be spread between ’twenty six and ’twenty seven. And even with that, we don’t see any impact on our current dividend policy and any of our future return programs.
So we feel quite confident that we’re going to be in good shape from that point of view. And our current modeling shows us, as I say, rapidly deleveraging even with that windfall capital.
Shilan Modi, Analyst, HSBC: And then perhaps another one or two. How are
Mike Fraser, CEO, Goldfields: you guys
Shilan Modi, Analyst, HSBC: thinking on build or buy going forward? I mean, to be fair, you guys are doing both, and I know it’s a moving target, but do you think the market is still do you think there’s still good deals to be made in the markets? Or do you think it’s moving shifting more towards the builders’ market?
Mike Fraser, CEO, Goldfields: Look, I think that’s a difficult question, and I’m sure Chris can jump in on this one. But I will say that our strategy is not one or the other. Our strategy is continuously that we will try and add reserves and ounces through additional brownfield drilling. We’ll look through incremental enhancement of our existing portfolio because we’ve got some incremental improvement within our existing operating assets. We also are revitalizing our greenfield program and are increasing the number of options that we have in our greenfield program, although those are longer dated assets longer dated opportunities.
And then obviously, we do the bolt on acquisitions like you’ve seen with the acquisition of the other half of Osisko and Gruyere, which are really low risk additions if you think about it because we’re already in those assets for half of the value. But I do think there are opportunities to be had. But I think over the next still while, our focus is very much going to be on delivering what’s currently in our portfolio. And I think for certainly for the next while, we’re quite comfortable with the balls that we’ve got to deal with. But Chris, don’t know if you want to add anything.
Chris Gracias, Executive, Goldfields: Maybe the only other thing I’d add, Mike, is I think you can never time M and A perfectly and a lot of times it is opportunistic. But I think the Gold Road acquisition was really a unique opportunity to invest in an existing asset that we already controlled and operated and it was an ability to get full control of a land package that we view is very prospective. So it’s the same approach we take all of our assets about looking for opportunities to invest and enhance value within the existing portfolio. This just happened to be one that was through a public transaction. Okay.
Shilan Modi, Analyst, HSBC: Now that makes sense. Appreciate that. I have given feedback to the team that also agree acquiring assets that you already operate makes a lot of sense.
Mike Fraser, CEO, Goldfields: Appreciate the time. Thanks. Thank you.
Conference Operator: The next question we have is from Adrian Hammond of SBG. Please go ahead.
Adrian Hammond, Analyst, SBG: Yes. Good afternoon, everyone. Thanks for the call. Yes, Mike, tough Q1 when you look at the costs, but certainly I think it’s still early days. Just looking at the dollar per ton cost, that’s where I’m coming from.
Is it I’m trying to understand if it’s still the change in the mining mix with your the dollar per ton costs up about 8%, but your mill tonnes are up 8%. So is it just high inflation, bit of oil mix underground surface that’s still playing out? Or is it just the sort of maturity of the operations playing out into those numbers?
Mike Fraser, CEO, Goldfields: Adrian, look, I think there’s a couple of things that are playing out in our costs. I think one is, as you’re quite right, is a bit of an oil mix coming through on and also, we’ve seen slightly higher milled tonnes. But what we also expect to see during 2025 is there’s a slightly higher strip across a couple of our material assets. So St. Ives, Tarkwa.
In Tarkwa as well, what you’re also seeing is lower grade feed. So some of that cost is playing out at Tarkwa, for instance. And then you’ve got some high strip and some higher capital coming through. So we’re not yet going to see the full benefit of lower costs probably through until 2027 when you’re going to start seeing some of those that higher strip coming out, and we should then see a higher ore mix going in.
Adrian Hammond, Analyst, SBG: All right. That’s understood. And there was a question on Solari that sort of covers mine, I mean, just to be devil’s advocate, and I appreciate that ramp no ramp up is ever perfect, but you achieved 50,000 gold equivalents in Q1, ramp up did say 60,000. The miss, is it are there issues there that temporary or things that you’re comfortable with leading into the winter period? Or is there anything new that you need to resolve there that should give us comfort for the full year guidance?
Mike Fraser, CEO, Goldfields: ALEXANDER Yeah. Adrian, I think you rightly identify. I mean, there’s always challenges in a ramp up. And yes, we would have had one or two issues. We had some issues on filter pumps that we had to change out.
We’ve realized that we also need a bigger furnace capacity. So we’ve got a new furnace, additional furnace on order, which is going to give us greater throughput. But there’s nothing that is a process wise of concern to us. So I think the area that I’ve always been consistent to say that given our experience of last year, the bigger risk to guidance is just getting through winter reliably and safely. So from a plant performance and an operating performance, I don’t think you should read much into Q1.
Yeah, we probably could have had a few extra thousand ounces based on more mill up time, but it’s nothing that’s carried over from the first quarter.
Adrian Hammond, Analyst, SBG: Got you. And then lastly, on the JV that you’ve put on ice now, I mean, is quite disappointing, I would say, after twenty seven months. Certainly, AngloGold has plans of their own with opportunities with their existing assets. Where does this put Parkwa in respect of a standalone option? And what is the reason to step back?
And I have to ask, given the issue around the mine life extension at the Mang, and I think market got a bit concerned around Tarkwa. Was there any of that factored in?
Thomas Mengel, Executive, Goldfields: No, Adrian. And look, I
Mike Fraser, CEO, Goldfields: I have had it obviously, have had the conversation with our counterparties. But I’d start with saying that it takes three parties to make this dance work at the JV. I think the industrial logic and the long term strategic intent about the combination still makes perfect sense. And I don’t think it changes, certainly, my view that this makes the combination makes sense. But I think there’s always going to be times where one party may may not be ready.
And I think that’s the challenge and the risk, obviously. We got really close last year with the previous government and the previous administration. And then once that changed, we had a new government and a new administration who’ve obviously created a little bit of uncertainty with what how the demand issue played out. But certainly, they’ve been very strong in support of Tawqua, and they’ve actually asked us to very quickly get the mine lease extension in place so they can take that uncertainty out of the market. So I think we feel quite confident with that.
But I think without talking too much into how this played out, I mean, you can quite conceivably see a world where, as gold prices have run-in the way they have since the first deal was inked, the economics on both sides would have changed. And I think that’s played a part in it. But the way I look at this is quite philosophically, think it does actually just make both of us focus on making our stand alone assets the best they can be. And we’re certainly not afraid of that challenge, it presents opportunity for our teams to stop focusing for a minute on the integration of these assets to how do we make them the best on a stand alone basis, which makes the combined business even better.
Adrian Hammond, Analyst, SBG: Sure. Certainly, the gold price today is can change your planning. Thanks so much.
Conference Operator: The next question we have is from Rene Horriter of NOAH Capital. Please go ahead.
Rene Horriter, Analyst, NOAH Capital: Hi, good afternoon Mike and team. Thanks for taking my question.
Mike Fraser, CEO, Goldfields: Hi Rene.
Rene Horriter, Analyst, NOAH Capital: I’ve got a couple of questions on Gold Road and Gruyere. I looked at the website, they say they have an open pit life to about 02/1932. And then about two years underground, about 760,000 ounces underground reserves or resources. That sort of makes it a ten year life. What was the on your $3,200,000,000 payment that you or deal value that you’re making, what was the internal rate of return of that deal?
And is there any basically on the exploration assets, is there anything that could be quite like brought into production quite early? Because to me, they look like they’re deep out of the money.
Mike Fraser, CEO, Goldfields: Rene, thanks for that question. And I’ll ask Chris again can add some color to this. But I think just a couple of things, first and foremost. The two years of underground that they declared was certainly based on cold road assumptions. We would not have declared any resource or reserves on the base that we are very early stages in studying the underground.
We’ve only really started drilling out that opportunity. We know there is gold there, and it looks pretty consistent. But it’s going to come down to us determining the most effective way of mining that underground before we would even be prepared to put a resource or reserve declaration out on that asset. The other thing that complicates the future development pathway for Gruyere is that if gold price consensus prices continue to hold where they are, then in fact, you may delay the underground development by potentially doing another further cutback, which extends your open pit life by a few years before you have to then go underground. And then the last item, which is what we’ve acquired with Gold Road, is that really fairly extensive land package that sits outside of the current joint venture that we wouldn’t have otherwise had access to, which we also know contains gold.
So whilst you’re right, based on the declared numbers, you can quite easily come to a point and say, well, what have we paid this $2,400,000,000 for? Well, 1,600,000,000.0 when you strip out at the Northern Star stake. We’re quite comfortable that this is now going to transition into a multistage or multi decade asset. It’s just about what is the pathway for development of that. And as that evolves over the next few years, that study evolves, you’ll start seeing us declaring resource, which will add to the life of that asset.
And then just on your question on IRRs, clearly, don’t always declare those and publicize them because there are a number of different scenarios you need to assume. But what I can say is based on consensus prices, which we know is reasonably conservative right now, we’d be quite comfortable that is nearing mid teens kind of IRRs. And then when you overlay near term spot, that certainly goes up a lot higher.
Chris Gracias, Executive, Goldfields: Maybe the other thing I’d add, Mike, and then you touched on the exploration ground. For example, they have come out with a PFS on deposit called Gilmore. There’s smoke push, there’s other opportunities that also looks to be potentially higher grade. So as that you could potentially resequence it in the mine to extend life even before you get to the underground. I think the other pockets of additional value that you get is Gold Road did have a royalty that would kick in at a certain point in time, which would get eliminated.
You obviously have the gold corporate costs. Obviously, are clearly some valuable employees, especially on the exploration side that we’ll want to maintain, but there’s some savings there. And I think quite importantly, to us, which was quite unique to us, there are significant tax synergies for us in Australia with the ability to write the value of the assets up, you get a big kick up in depreciation, which has meaningful, meaningful tax synergies to us, which will benefit across our entire portfolio in Australia.
Rene Horriter, Analyst, NOAH Capital: Yes, just one more question. On the deeper extension of Grayera, has a scoping study been done? I heard somebody told me that a scoping study had been done on that.
Mike Fraser, CEO, Goldfields: Yes, correct. So we have completed a scoping study. Literally, it was received around three weeks ago, and that was immediately disclosed by Gold Road as part of their defense. Mean, clearly, from our point of view, we would never have disclosed at this stage because it still requires quite a bit of work and interrogation. And that’s why I’ve always said, yes, it’s absolutely an option.
It is going to add life to the asset. But trying to attribute value to that right now, given a long life dating on it, is quite hard. We’re quite comfortable when we did the assessment on the asset that the additional 50%, even on the current loan loss reserve, we believe, is accretive.
Conference Operator: At this stage, we have no further questions, and I would like to hand back to Mike for any closing remarks.
Mike Fraser, CEO, Goldfields: Well, thank you very much for the questions. They were really very good questions that we received today, so I appreciate the thought that went into those. I think from our point of view, the quarter one was largely on track to what we expected. Clearly, there’s a few things that have emerged post quarter that we are now dealing with, including demand, Tawqua and the integration of Gold Road. But the real focus for us is just to keep delivering safe, reliable production and delivering on our guidance and our plan for the year, both across production and costs.
And if we can do that, we will see continued significant cash generation in the business, which will be good for everybody. So very comfortable with how we started the year, and we’re all very much focused on delivering to our plan for the remainder of the year. And I look forward to chatting to you again in at the half year. But thank you very much for your interest.
Conference Operator: Ladies and gentlemen, that concludes today’s conference. Thank you for joining us. You may now disconnect your lines.
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