Shares in South African gold mines Goldfields (GFI -7.84%) fell 8% by 1:50 p.m. ET Friday after the company reported disappointing results for the first half of 2024.

That’s not my word – “disappointing.” That’s how CEO Mike Fraser himself described a first half of the year in which gold production fell 20%, leading to a 16% drop in net income to $0.43 per diluted share.

Gold Fields’ half-year results

Gold is now selling for more than $2,500 an ounce, up 31 percent from a year ago. You might think that would be good news for gold miners – and it is. Unfortunately, Gold Fields was unable to benefit from this price increase.

“Delayed production ramp-ups at Salares Norte and backfilling issues at South Deep,” the CEO explained, combined with cold weather that froze pipes and temporarily shut down the Salares Norte plant, reduced gold production to 918,000 ounces in the first half of 2024, compared to 1.15 million ounces in the same period last year.

A peculiarity: The company cited “evidence of the presence of chinchillas in the rock garden (Salares Norte)” and the need to develop a “plan for capturing and relocating chinchillas” as reasons for the delays.

Overall, production costs per ounce at Gold Fields rose to $2,060, an increase of 47 percent over the previous year. Only rising gold prices prevented profits from falling as much as production.

Is Gold Fields stock a buy?

Gold Fields cited weak results in the first half of the year as the reason for this and lowered its forecast for the rest of the year. Although Gold Fields predicted a “significant increase in production” and lower production costs (per ounce) for the second half of the year, the company now expects gold production to be between 2.05 and 2.15 million ounces by year-end.

However, the stock only costs about 22.4 times earnings, including the weak first-half results. Strong second-half results should lower that P/E later in the year, and analysts are forecasting annual earnings growth of about 20% over the next five years. Add in a modest 2.6% dividend yield, and Gold Fields stock looks pretty attractive.