EM CEEMEA CREDIT: GFISJ: Rating affirmation by Moody’s, time to tap primary?
Apr-23 13:32
Gold Fields (GFISJ; Baa3/BBB-/-)
Rating affirmation by Moody’s, time to tap primary?
- Gold Fields had mandated banks in recent weeks for a potential USD 10Y benchmark. Now that mkt conditions have evolved, and primary is open again, we may see this news flow progress further.
- Moody’s cites in its rationale the Co.’s strong credit metrics and robust liquidity, as well as lower production and higher AISC. With gold px at current levels, we are not that surprised.
- As a large gold miner by global standards, South Africa headquartered Gold Fields boasts production presence across continents (South Africa, Ghana, Australia and Chile). The Co. recently failed attempt to buy its JV partner Gold Rand has highlighted its potential from Gruyere, Australia. In a recently published release outlining the findings from the Gruyere underground study. Gold Rand shows Ore Reserve at Gruyere of 45mnt at 1.51g/t for 2.2mn oz on a 50% basis. Previously, Gold Fields had indicated reserves of 3.1mn oz on a 100% basis. The mine is high quality with FCF yield of 27% (source: Gold Fields website).
- Gold Fields solid credit metrics benefit from rev’s of USD5.2bn on lower production (-10% YoY at 2.15Moz for FY24) and higher avg prices (+25% YoY at USD2418/oz, with AISC +26% at USD1629/oz). Adj EBITDA was USD2.85bn, FCF at USD605mn, the Co. has a moderate leverage profile with net debt/adj EBITDA at 0.73x.
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