gold fields h1 2020 results · h1 2020 results | 20 august 2020 net debt (including lease...

Gold Fields H1 2020 results

20 August 2020 Nick Holland: CEO

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Certain statements in this document constitute “forward looking statements” within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934. In particular, the forward looking statements in this document include among others those relating to the Damang Exploration Target Statement; the Far Southeast Exploration Target Statement; commodity prices; demand for gold and other metals and minerals; interest rate expectations; exploration and production costs; levels of expected production; Gold Fields’ growth pipeline; levels and expected benefits of current and planned capital expenditures; future reserve, resource and other mineralisation levels; and the extent of cost efficiencies and savings to be achieved. Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements. Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa, Ghana, Australia, Peru and elsewhere; the ability to achieve anticipated efficiencies and other cost savings in connection with past and future acquisitions or joint ventures, exploration and development activities; decreases in the market price of gold and/or copper; hazards associated with underground and surface gold mining; labour disruptions; availability terms and deployment of capital or credit; changes in government regulations, particularly taxation and environmental regulations; and new legislation affecting mining and mineral rights; changes in exchange rates; currency devaluations; the availability and cost of raw and finished materials; the cost of energy and water; inflation and other macro-economic factors, industrial action, temporary stoppages of mines for safety and unplanned maintenance reasons; and the impact of the AIDS and other occupational health risks experienced by Gold Fields’ employees. These forward looking statements speak only as of the date of this document. Gold Fields undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Further details of potential risks and uncertainties affecting Gold Fields are described in Gold Fields’ filings with the Johannesburg Securities Exchange and the US Securities and Exchange Commission, including in Gold Fields’ Annual Report on Form-20F for the year ended 31 December 2017, Gold Fields’ Integrated Annual Report 2017 and Gold Fields’ Annual Financial Report 2017

Forward looking statement

H1 2020 results | 20 August 2020

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H1 2020 highlights

● Covid-19 impact largely contained thus far

● Net cash flow of US$320m

● Mine net cash flow of US$405m

● Net debt (excluding lease liabilities) down to US$876m

● Normalised earnings more than doubled to US$323m

● Interim dividend of R1.60/share = FY 2019 dividend

● Salares Norte commenced – funding plan secured after US$250m equity raise

Delivering the higher gold price

AIC down to US$1,065/oz in H1 2020 from US$1,106/oz in H1 2019


4

Covid-19 update

● The relatively high number of positive cases reflects the high prevalence rate of the pandemic in neighbouring communities at our operations in Peru, Ghana and South Africa

● Testing among our workforce is also more stringent than in public health facilities in these countries

Current status

Note: "Awaiting results", "Active cases" and "In hospital" refers to the current figures. South Africa includes the corporate office. West Africa includes Galiano/Asanko


Americas Australia South Africa

West Africa Group

Tested 11 801 11 3 952 4 327 20 091

Positive 857 - 330 256 1 443

Negative 10 400 11 3 503 4 021 17 935

Awaiting results 544 - 119 56 719

Active cases 464 - 148 46 658

In hospital 13 - - - 13

Recovered 393 - 181 210 784

Died 1 - 1 1 3

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Americas region Mine: Cerro Corona (Peru) Att. production: 108koz (Au eq) AIC: US$984/eq oz Net cash flow*: US$49m inflow Project: Salares Norte (Chile)

A globally diversified gold miner

South Africa region Mine: South Deep Att. production: 100koz AIC: US$1,234/oz Net cash flow*: US$5m inflow

West Africa region Mines: Tarkwa, Damang and Asanko Att. production: 384koz AIC: US$1,093/oz Net cash flow*: US$139m inflow

Gold Fields Group

Mines: 9 Projects: 1 Countries: 5 Att. production: 1,087koz AIC: US$1,065/oz Mine net cash flow: US$405m inflow Net cash flow**: US$320m inflow

Australia region Mines: St Ives, Granny Smith, Agnew and Gruyere Att. production: 494koz AIC: US$960/oz Net cash flow*: US$208m inflow

H1 2020 results


*Net cash flow = Cash flow from operating activities less net capital expenditure and environmental payments and lease payments **Net cash flow = Cash flow from operating activities less net capital expenditure, environmental payments, lease payments and redemption of Asanko preference shares

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Delivered on reinvestment plan

● The Group has more or less achieved cost and production guidance over last 7 years

● Implemented the turnaround at South Deep which included a labour restructuring

● Reinvested in the future of the business

Delivered Gruyere which was ramped up ahead of plan – low cost, long life mine

Delivered the Damang Reinvestment Plan ahead of schedule (on most metrics) – getting into

the main part of the orebody (Tarkwa phyllites) which is expected to result in significant

production and cost improvements from H2 2020

Delivered a favourable feasibility study for Salares Norte which has progressed to construction

phase


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Strong organic growth within the portfolio

● Extended the life-of-mine of Cerro Corona to 2030

Exploring potential upside

● St Ives: life extension driven by growth at the Invincible complex

● Exploration success at Agnew – best position the mine has been in for many years

● Have addressed concerns around the Reserve position

Reserves outside of SA exceed 20Moz – c.10 year mine life

Production outlook of 2.0-2.5Moz for the next 8-10 years

Organic growth opportunities at all of our assets

Replaced depletion and slightly added to Tarkwa’s Reserves in 2019 – first time in 10 years

• Starting to see some exploration success

Continue to replace depletion and add Reserves in Australia

• Discovery cost per ounce is c.A$80/oz, compared to cost of acquiring ounces of >US$300/oz


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Tarkwa potential Untapped Down Dip Potential along 22km Strike Length And Room For New Discoveries


N

0 1 2 3

Kilometer Down dip Extension Potential Inferred Resources

Indicated Resources Measured Resources

Pepe – Atuabo – Mantraim

–Tebberebie-Aw

onaben (PAMTA)

Kobada

Kott

rave

rchy

Pit

Ulap Nth Ext 1

West Hill

Akon Nth

Ulap Nth Ext 2 Ulap-Pepe Dozer Build Yard

Pepe Central

Kottra-Ridge West Corridor

Pepe East 2

Pepe East 1

Continue testing Pepe East down-dip potential.

Potential multi million ounce ‘order of magnitude’ exploration target

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Damang complex W-E Section (25896mN)


771 RL

Huni Sandstone Tarkwa Phyllite Intrusive/Dolerite Banket Hangingwall Banket K1

Banket Footwall Banket K2

25896mN

As-mined (17th Aug)

DRP LoM

Aug FC

0.3 0.6

1.0 2.0

Assay (g/t)

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Greater Agnew Project

Gold Fields has made 2 strategic investments for the long term at Agnew ● A$112m sustainable power solution – hybrid Gas, Solar, Wind Power solution ● A$38m for new accommodation camp – investment for our people

Next Investment Phase (2021-2023): Reserves, Process plant upgrade, Increased gold production

Underpinned by continued exploration success


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Resource Potential – Greater Waroonga 2013 2019

Main/FBH South

Waroonga North Lower

Saint

Kath Lower

Kim/South/FBH Link

Priority 1

Priority 2

North South Order of magnitude Resource Potential of 500koz to 1.0Moz (over 3-year window)

FBHOD486017 11.25m at 20.61g/t

Order of magnitude Resource Potential of 500koz to 1.0Moz (Over 5-year plus window)


Stated boreholes are selected to indicate the potential grade range and mineralisation width

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2013 2017

2019

Priority 1

Priority 2

Hidden Secret

Himitsu

200 Series

Genesis Lower Sheba South & Spitfire

Sheba Lower

Sheba North

Order of magnitude Resource Potential of 600koz to 1.2Moz (over 3-year window)

South North

300m

Resource Potential – New Holland Greater New Holland Complex

EMSD1873W1 3m @ 32.64g/t

EMSD1867 4.07m @ 7.45g/t

EMSD1632 – 5.3m @ 26.85g/t EMSD1632 –

3.56m @ 3.52g/t

Order of magnitude Resource Potential of 600koz to 1.0Moz (over 5-year plus window)



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Resource Potential – Redeemer Complex


Barren Lands

Zone 2 North – southern infill

500m

Zone 2 South Zone 2 North

Priority 1

Priority 2

Order of magnitude Resource Potential of 600koz to 1.2Moz (over 3-year window)

North South

Greater Redeemer Complex

EMSD1934 17.08m @ 1.94g/t from 874m – (Basalt)

EMSD1936 W1 12.85m @ 4.74g/t from 978m - (Basalt) 13.90m @ 3.93g/t from 1005m - (Basalt)

EMSD1936 W2 2.00m @ 8.73g/t from 955m - (Basalt) 5.55m @ 3.01g/t from 959m - (Basalt)

EMSD1929 0.68m @ 33.1g/t, FW lode 1.81m @ 33.34g/t, FW lode

EMSD1929 1.81m @ 33.34g/t

Redeemer North

Order of magnitude Resource Potential of 300koz to 400koz (over 5-year plus window) Stated boreholes are selected to indicate the potential grade range and mineralisation width

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St. Ives Invincible Camp Exploration

0m RL

N

Larger points = 2020 Intercepts

S

200m

-750m RL

Invincible Invincible South

Additional Extensional

Underground

Invincible Deeps

Fenton

Drake

Invincible Footwall South

Invincible Stage 6

Invincible Mids

Invincible South Extensions

Invincible Deeps ADEX

Greater Invincible North

LD82957W6: 21.9m at 13.17g/t

LD82955W1: 42m at 9.9g/t

LD81611W18: 11.6m at 9.45g/t

LD83046 42m at 1.99g/t

LD830171: 22m at 6.66g/t

IMD-0761: 9.8m at 11.78g/t

Potential multi million ounce ‘order of magnitude’ exploration target to be profiled over ~3 years H1 2020 results | 20 August 2020


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Strong cash generation in H1 2020

● Strong cash generation Mine cash flow: US$414m in 2019,

US$405m in H1 2020

Net cash flow: US$249m in 2019, US$320m in H1 2020

● De-geared faster than expected – c.US$700m over 18 months (includes equity raise)

● Raised two new bonds in May 2019 – both US$500m with maturities in 2024 and 2029

● Restructured the bank debt

● Successful equity raise completed in February 2020 – US$250m at a 3% discount

*Net Cash Flow = Cash flow from operating activities less net capital expenditure and environmental payments and finance lease payments


-300

-200

-100

0

100

200

300

400

2013 2014 2015 2016 2017 2018 2019 H1 2020

Net Cash Flow

0100200300400500600700800900

2013 2014 2015 2016 2017 2018 2019 H1 2020

Capital expenditure

Sustaining capital Project capital

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Balance sheet


● Net debt (including lease liabilities) amounts to US$1,239m at end-June 2020 (leases relate to Genser, Gruyere power plant and gas pipeline, Granny Smith power plant), compared to US$1,664m at 31 December 2019

Net debt (excl. lease liabilities) was US$876m, compared to US$1,331m at 31 December 2019

● Net debt (including lease liabilities) to EBITDA of 0.84x at end-June 2020

● Unutilised facilities (committed and uncommitted) of US$1,514m, R4,135m and A$300m ● US$940m in cash on the balance sheet

0

500

1000

1500

2000

2500

3000

3500

4000

US$ facilities Rand facilities A$ facilities Total facilities

Available facilities at 30 June 2020

Utilised Unutilised

0.0

0.5

1.0

1.5

2.0

0200400600800

1 0001 2001 4001 6001 8002 000

FY 2

013

H1 2

014

FY 2

014

H1 2

015

FY 2

015

H1 2

016

FY 2

016

H1 2

017

FY 2

017

H1 2

018

FY 2

018

H1 2

019

FY 2

019

H1 2

020

US$m

Net debt (US$m) and Net debt/EBITDA – excl. lease liabilities

Net debt Net debt/EBITDA

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Salares Norte update

● Engineering progress 74.7% at end-June (plan: 76.0%) ● Camp Phase 1 progress 80.8% at end-March (plan: 84.3%)

Camp Phase 1 spend of US$11m, in line with plan ● H1 pre-development cost of US$11m vs plan of US$12m, all spent in Q1 ● Mining contract awarded to ICV after a rigorous tender process ● Work on diversion channels has commenced ● Bulk earthworks contract awarded at end-May and preparation for bulk earthworks on site has

commenced ● Main procurement packages have been awarded ● 61% of total capex has been awarded and priced and only subject to escalation ● Currency hedges provide an additional cushion of c.US$70m ● District exploration spend of US$7m ● District drilling 8,458m during H1 2020

Drilling activities stopped at end of Q1 2020 and the exploration team was moved offsite in response to COVID-19 pandemic


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Salares Norte update continued Progress in pictures


Diversion channel assembly Channel trenching

Camp phase II structural excavation Camp phase I

Regional overviews

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Australia

● 14% year-on-year increase in gold produced driven by the inclusion of Gruyere which reached commercial levels of production at end-September 2019

● Stage 2 of the electricity supply project concluded at Agnew during H1 2020 13MW battery plant commissioned in March 18MW wind farm commissioned in May

● St Ives continued its transition to a predominantly underground operation, driven by the ramp up in production at Hamlet North All open pit ore sourced from the Neptune pit in H1 2020

● Region generated net cash flow of US$208m (A$317M) in H1 2020

44% of Group managed production

H1 2020 H1 2019

Att. Production koz 494 435

AIC US$/oz 960 1,185

A$/oz 1,463 1,677

Net cash flow* US$m 208 92


* Net cash flow excludes Gruyere project capital for 2019

1Moz per year region

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Americas

● Cerro Corona was significantly impacted by the COVID-19 pandemic during H1 2020 ● As announced in Q1 2020, we estimate the impact of COVID-19 on gold equivalent

production will be c.25koz for FY 2020 ● In addition, rebasing the price ratio at the end of Q1 had a negative impact of c.30koz on

gold equivalent production guidance for FY 2020 ● Despite the challenges presented by COVID-19, Cerro Corona generated net cash flow of

US$49m in H1 2020 (H1 2019: US$52m)


H1 2020 H1 2019

Au Eq production koz 109 157

Au Eq AIC US$/oz 984 698

Au only production koz 64 81

Cu only production kt 13 16

Au only AIC US$/oz 709 290

Net cash flow US$m 49 52


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West Africa

● Mining in main Damang pit transitioned through the bulk of the Huni Sandstone during H1 2020, with minimal volumes remaining 35% of ore mined from Tarkwa Phyllites in Q2 2020 vs. 20% in Q1 2020 Mining will occur predominantly in the higher-grade, more consistent Tarkwa Phyllites during

H2 2020 Notable improvement expected at Damang in H2 2020

● At end-June, 42 months into the the Damang reinvestment Project: Tonnes mined were 14% ahead of plan Gold produced was 13% ahead of plan

● Region generated net cash flow of US$139m in H1 2020 (H1 2019: US$72m) Including US$38m received on redemption of preference shares from Asanko brings the

regions cash flow to US$177m for H1 2020

H1 2020 H1 2019

Managed production koz 420 438

AISC US$/oz 1,060 892

AIC US$/oz 1,093 1,007

Net cash flow* US$m 139 72


* Net cash flow includes Damang project capital


Numbers include 45% of Asanko Gold Mine

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South Africa

● 1 Fatality during H1 2020: Mr. Abel Magajane ● Q2 2020 severely impacted by COVID-19 related restrictions

Was placed on care and maintenance for the first month of Q2 and operated well below its full labour complement for the remainder

C.32koz lost during COVID-19 lockdown and ramp up ● Despite the COVID-19 interruptions, the mine managed to generate positive cash flow of R79m

(US$5m) during H1 2020 ● c.30% year-on-year productivity improvement in destress and development ● Improved compliance on stoping, up to c.90% ● Migration to North of Wrench from Current mine continued during H1 2020

Increased volumes from North of Wrench during Q2 2020 as extraction from 3W and 4W corridors increased

H1 2020 H1 2019

Att. Production koz 100 92

AISC US$/oz 1,227 1,529

AIC US$/oz 1,234 1,529

Net cash flow US$m 5 -18 9% of Group managed production


Outlook

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2020 outlook and guidance

2020 revised Group guidance

● Attributable equivalent gold production: 2.20Moz – 2.25Moz

● AISC: US$960/oz – US$980/oz

● AIC: US$1,070/oz – US$1,090/oz

Focus areas for H2 2020

● Continue to navigate Covid-19 ● Damang: deliver higher grade from main part of the orebody ● Salares Norte: commence construction in Q4 ● Further embed productivity improvements at South Deep – restart new mine development ● Continue to reduce net debt – repay 2020 bond ● Commitment to maintain dividend policy


Thank You QUESTIONS AND ANSWERS

gold fields h1 2020 results · h1 2020 results | 20 august 2020 net debt (including lease...

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