Gold Fields Ltd ADR Earnings Call Insights: Bonds, Peru

On Thursday, Gold Fields Ltd ADR (NYSE:GFI) reported its first quarter earnings and discussed the following topics in its earnings conference call. Take a look.


Carly Mattson – Goldman Sachs: I was looking if you could give us an update on the factor that you’re taking into account in as you look at potentially – if you consider registering your bonds?

Investing Insights: How Strong is Global Gold Demand?

Paul A Schmidt – CFO: It’s Paul here. We’ve done a lot of work at looking at registering the bond and we don’t believe it will have a material impact on our rating etcetera. The issue with our bond trade at the moment is not the lack of demand, it’s the lack of supply and that a lot of our bond holders are long-term holders and they are not prepared to sell. We just probably spent six month analyzing the situation hearing stories pushing both sides where you should register or not and we decided that the current bond we are not going to resister it, because it will not – we don’t get the benefits of that effort we will have to put in and the additional cost of it.


John Bridges – JPMorgan: Just wondered with what’s going on in Peru, the uncertainty there, what’s your read on that and how it would affect Chucapaca?

Juan L Kruger – EVP, South America Region: This is Juan Kruger from South America here. The Conga project is clearly marking, I think, an interesting point for the industry because I think it has allowed for the government to go publicly in support of the development of the mining industry and the future projects in the country. So what we have right now is a situation by which the Yanacocha, meaning by that Newmont and Buenaventura are evaluating the outcome of the independent review of the Conga project EIA and we all expect that the project should be moving forward. Going back to our Chucapaca project, I think we have a difference, and the difference is that there is no fundamental opposition to the project. When I say fundamental opposition is opposition driven by political interests or ideological movements. What we have in Chucapaca is our group of people in the communities that is supportive of the project and that not only them, but also the regional and local authorities are supporting the project. When I say supporting is that they all understand the importance of the project and they are all willing to support the project because they see the benefit that they can get in terms of future economic and social development in the region. What we are now in the middle of is negotiations with the communities who own the land. Obviously, as in any negotiation, they are going to push to get the highest price possible and we need to get into fair and equitable terms with them. I think that we have completely different situation in Southern Peru, specifically in the highlands of (indiscernible), where our project is located, compared to what we have in the Northern part where the Conga project is located. With a framework agreement with the government, where the government is really supportive and looking forward to developing industry.

John Bridges – JPMorgan: Also, the local government there is supportive as well?

Nicholas J Holland – CEO: The local government is supportive. I have been personally meeting with them. My last meeting with the regional president of Mukewo was actually Wednesday last week, and we are in permanent interaction with them, and actually they are – just to illustrate how supportive he is, he is willing to help us mediate on the land acquisition discussion with the communities.