Gold Fields: Projects look good, now let’s see about debt
Company is prudently managing its debt after a busy two years on its projects in Australia and Ghana
Gold Fields is coming to the end of its big capital expenditure in Australia and Ghana and has turned its attention to tidying up and pushing out big debt repayments.
The miner told the market earlier in May that it had secured two bond instruments worth $500m each, with a five-year and a 10-year term respectively.
Coupled with its growth plans, the company is setting itself apart from its peers with its ability to raise the money to repay near-term debt and put longer-term debt on its balance sheet.
On Monday, Gold Fields said it had bought back $250m of its 2020 bonds. The balance of the 2020 bonds, worth $600m, will be repaid when they fall due in October through a combination of cash and debt.
Gold Fields wants to bring its net debt down by up to $150m during the course of 2019. Net debt stood at $1.6bn at the end of December 2018, up from $1.3bn the year before.
Paul Schmidt, Gold Fields’ CFO, said during the company’s full-year 2018 results presentation that a further $1.2bn of bank debt would also be refinanced.
While at minimal risk of breaching any debt covenants, the company is prudently managing its debt after a busy two years on its projects in Australia and Ghana, lining the group up to deliver two million ounces of gold a year, and not putting the balance sheet at any risk in a volatile gold market.