GFI - Gold Fields: Nearing The Finish Line At Salares Norte

2024-03-18 10:43:16 ET

Summary

• Gold Fields reported higher costs year-over-year despite the benefit of currency tailwinds given the negative impact of a tight labor market, but beat its cost guidance midpoint.
• Unfortunately, this was overshadowed by higher capex at Salares Norte and a later than planned start as well as a disappointing year from a safety standpoint.
• In this update, we'll dig into Gold Fields' Q4 and FY2023 results, recent developments, and why the stock is becoming a more attractive buy-the-dip candidate.

We're approaching the end of the Q4 earnings season for the Gold Miners Index ( GDX ) and it was a mixed reporting season overall. Unfortunately, inflationary pressures weighed on margins of many producers and a few of the larger producers came in shy of their guidance midpoints. The good news is that the H1 2024 outlook is looking much better, with gold prices higher year-over-year and several producers look to have guided toward more achievable results this year. Meanwhile, there's the possibility for higher dividends on balance in H2 if gold prices stay at current levels, whether this be performance dividends or special dividends. The latter makes the most sense, with a conservative and stable but growing base dividend that's able to be supplemented in stronger periods vs. a commodity price linked dividend that by definition will swing wildly....

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