Slimmed-down gold major Gold Fields sat pretty on a 50% operating margin in the March quarter, the first quarter since the unbundling of its mature underground mines into Sibanye Gold. With cost reduction, Gold Fields is seen as positioned to absorb the pressure befalling South Africa’s gold mining industry following April’s fierce global gold sell-off, which sent the now-recovering gold price into a sudden tailspin.

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New York- and Toronto-listed midtier miner Eldorado Gold this week reported a net loss of $45.4-million or $0.06 a share for the first quarter ended March 31, compared with profit of $67.9-million or $0.11 a share in the same quarter of 2012, as a result of a $125.2-million adjustment related to a change in Greek tax rates. Eldorado reported adjusted profit of $79.8-million or $0.11 a share for the period, an improvement of 17.5% when compared with $67.9-million for the same quarter in 2012. The difference in adjusted profit year over year was owing to a higher gross profit from gold mining operations during the quarter as well as $17.8-million in costs related to the acquisition of European Goldfields reported in the first quarter of 2012.

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South African gold producer Harmony Gold plans to cut its service and corporate costs in South Africa by R400-million and its overall capital expenditure in South Africa and Papua New Guinea by R1.4-billion in the 2014 financial year, Harmony Gold CEO Graham Briggs said on Friday. “We cannot influence or predict the future price of gold. For the past year, the high gold price has assisted us in producing strong margins but, with the gold price that fluctuated and decreased to levels close to $1 400/oz, immediate actions to reduce costs were implemented during April,” he said on Thursday.

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Gold miner Focus Minerals has called a halt to operations at its Laverton gold mine, in Western Australia, saying that the rising processing costs for the toll processing arrangement was making the mine commercially unviable. The operational cease was also blamed on the falling gold price.

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The recent decline in the gold price has forced junior Scotgold Resources to delay a capital raising to fund the development of its Cononish gold project, despite the project’s robust economics. A final development project for the Cononish operation has found that at a base case gold price of $1 300/oz, the project could deliver some £26.3-million in pre-tax cash flow over the life of mine, with a net present value of £11.8-million and an internal rate of return of 26%.

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