Gold Fields was marginally up at midday on Wednesday after ratings agency Moody’s upgraded the gold producer to Baa3 from Ba1, taking it into investment grade.
At 12.14pm, Gold Fields was up 0.23% to R47.24.
The rating was mainly based on South Deep Mine’s proven gold reserves. "The mine is expected to remain a prominent feature of Gold Field’s credit profile," Moody’s said. South Deep accounts for about 71% of the company’s total gold reserves.
"The ability of Gold Fields to continue to deliver on production ramp-up will remain essential in reducing production costs, which are driven by economies of scale," Moody’s said.
The agency said it would consider a further upgrade if South Deep remained free cash flow generative in an environment where the gold price trades in a range between $1,100 and $1,300 an ounce, and if the company progresses further with its expansion plans in Ghana.
Negative factors include a heavier debt burden.
Gold Fields is down 12.6% for the year, so far, with the gold index having lost 22%.