Gold Fields Limited · JSE:GFI
Gold Fields — Merger or Acquisition (November 2012)
34 slides from Gold Fields's merger presentation, Nov 29, 2012
Slide 1: Creating a New South African Gold Mining Champion
Picture C Creating ti A N New S South th Af African i G Gold ld Mining Mi i Champion Ch i Ni k Holland Nick H ll d N l Froneman Neal F Chief Executive Officer Chief Executive Officer Designate Gold Fields Limited Sibanye Gold 29 November 2012
Slide 2: Disclaimers
Disclaimers Certain statements included in this presentation, as well as oral statements that may be made by Gold Fields, or by officers, directors or employees acting on their behalf related to the subject matter hereof, constitute or are based on forward-looking statements. Forward-looking stateme
Slide 3: Investors expect us to deliver leverage to the gold price
Investors expect us to deliver leverage to the gold price However we have not met their expectations… However, expectations Note: Data indexed to 13 January 2006; index made up of 8 major gold producers’ total return indexes weighted by market capitalisation; Major Gold producers defined as: AngloGo
Slide 4: Initial outcomes of the portfolio review
Initial outcomes of the portfolio review Two categories of assets assets, each requiring a different approach Deep Level, Narrow Vein, Tabular Ore Other Ore Bodies Bodies Composition Composition South Deep, Tarkwa, Damang, St Ives, KDC, Beatrix mine (GFIMSA) Agnew, Cerro Corona Type Of Mining T Mi i
Slide 5: Liberating GFIMSA
Liberating GFIMSA We e need eed a new e app approach oac KDC BEATRIX 1 800 2 500 600 1 800 1 600 1 600 2 000 500 1 400 1 400 1 200 400 1 200 1 000 1 500 $//oz 1 000 Koz $/oz oz 300 Ko 800 K 1 000 800 600 200 600 400 500 400 200 100 200 ‐ ‐ ‐ ‐ Production (Koz) Gold Price ($/oz) NCE ($/oz) Production
Slide 6: Liberating GFIMSA
Liberating GFIMSA Significant investor pressure to create focussed focussed, fit for purpose, purpose smaller companies GFI Share Distribution GFI Share Distribution September 2010 September 2012 3.20% 3.40% 23.67% 15.60% 23 51% 23.51% 34 00% 34.00% 49.96% 47.00% South Africa Americas Europe Rest of
Slide 7: Liberating GFIMSA
Liberating GFIMSA Unlocking U oc g value a ue - pee peer co comparison pa so Harmony GFIMSA Market Capitalisation R bn 30.9 19.0* Net debt R bn 0.1 4.0 Wafi Golpu Enterprise value R bn 7.8 - Enterprise value adjusted for Wafi Golpu R bn 23.0 23.0# H1 2012 Production Koz 551.1 688.1 H1 2012 Cash Cost
Slide 8: Liberating GFIMSA
Liberating GFIMSA GFIMSA G S -a amongst o gst tthe e largest a gest domestic do est c gold go d producers p oduce s in SA S Gold Production H1 2012 (Ounces)* 800 000 700 000 600 000 500 000 400 000 300 000 200 000 100 000 0 GFIMSA AngloGold Harmony DRD Pan African Resources * Source – company report
Slide 9: Liberating GFIMSA: Rationale
Liberating GFIMSA Rationale Creating Two Proudly South African Gold Mining Companies GFI portfolio has competing asset types - base load, growth and mature assets Each with dedicated management, funding, technology and skills requirements Sibanye Gold on a 10 10-year year declining trend despite inh
Slide 10: Liberating GFIMSA: Rationale
Liberating GFIMSA Rationale Long-term sustainability of labour intensive operations Create fit-for-purpose, sustainable, long-life operations Install a specialist, specialist dedicated and focussed management team Ring-fence SA cash flows for SA projects and dividends Reverse declining production tr
Slide 11: Creating Sibanye Gold
Creating Sibanye Gold Overview and mechanics of transaction Change name of GFIMSA to Sibanye Gold (“WE ARE ONE”) Seeking JSE primary listing, NYSE secondary listing – mid February Pro-rata distribution of Sibanye y Gold to GFI shareholders and ADR holders Equity capital structure to mirror GFI (1 fo
Slide 12: Creating Sibanye Gold: Benefits for South Africa
Creating Sibanye Gold Benefits for South Africa SA industry is maturing - mines deep-level, high cost and declining production SA multinationals are seeking to exploit lower cost cost, mechanised open-cast or bulk underground ore bodies found off-shore SA gold mining sector becoming increasingly fra
Slide 13: Creating Sibanye Gold: Benefits for Employees
Creating Sibanye Gold Benefits for Employees Terms and conditions Will remain unchanged Better p positioned to extend life of mines, counter the Fit for purpose vehicle Fit-for-purpose natural decay of mature mines Employment No job losses as a result of unbundling Inward investment options to susta
Slide 14: Current corporate structure
Creating Sibanye Gold Current Cu e t co corporate po ate st structure uctu e Shareholders Gold Fields Limited International South Deep Project Sibanye Gold Tarkwa ((GFIMSA)) Damang KDC St Ives Beatrix Agnew Service Entities Cerro Corona Other subsidiaries and Investments Gold Fields Limited | Creati
Slide 15: Proposed corporate structure
Creating Sibanye Gold Proposed oposed corporate co po ate st structure uctu e Shareholders Gold Fields International Limited GFIMSA Tarkwa KDC Damang Beatrix St Ives Service Entities Agnew Cerro Corona Other subsidiaries and Investments South Deep Sou eep Project ojec Gold Fields Limited | Creating
Slide 16: Corporate structure
Creating SibanyeGold Corporate Co po ate structure st uctu e Shareholders Gold Fields Limited International South Deep Project GFIMSA Tarkwa KDC Damang St Ives THE Beatrix NEW Service Entities Agnew SO SOUTH AFRICAN C Cerro Corona Other subsidiaries GOLD MINING CHAMPION and Investments South Deep So
Slide 17: Leadership and Management: The Board of Directors
Leadership and Management The Board of Directors Chair Matthews S Moloko. BSc (Hons) and Certificate in Education, University of Leicester, Advanced Management Programme, Wharton. Mr Moloko was appointed Pic a director of Gold Fields Limited on February 25, 2011. He is the executive Chair and Founde
Slide 18: Leadership and Management: The Board of Directors Cont.
Leadership and Management The Board of Directors Cont. Non‐Executive i Director i Richard P. Menell. BA (Hons), MA (Natural Sciences, Geology), Trinity College, Cambridge, UK; M.Sc. (Mineral Exploration and Management), Stanford University, California, USA. Mr Menell has been a Director of Gold Fiel
Slide 19: Leadership and Management: Senior Management
Leadership and Management Senior Management: Chief Executive Officer Neal Froneman Pr Eng BSc Mech Eng (Ind Opt), University of the Witwatersrand, Johannesburg, South Africa; BCompt, University of South Africa, Pretoria, South Africa. Mr Froneman has over 30 years of relevant operational and corpora
Slide 20: Our Resource Base
Our Resource Base B ti Beatrix KDC West KDC East KDC Johannesburg Johannesburg Beatrix Bloemfontein Bloemfontein Cape Town Cape Town KDC Beatrix TOTAL Resources1 68 Moz 11 Moz 79 Moz Reserves1 17 Moz 5 Moz 22 Moz C2011 production 1,100 koz 347 koz 1,447 koz Number of shafts 12 4 15 Number of process
Slide 21: What Sibanye Gold Offers
What Sibanye Gold Offers A Quality Reserve 21.6 million ounces of reserves1 Solid Production Base 1.3 Moz pa2 Long Life Asset At least 16 years of production left Margin g Positive cash flow and margin g Conservative Balance Sheet Net debt to EBITDA ratio: ~ 0.5x3 Unhedged Full exposure to gold pric
Slide 22: The Opportunity
The Opportunity • A new vehicle focussed on the challenges of South African gold mining and the ability to do things differently • Well positioned to create and exploit emerging and new opportunities in South Africa • The recent industrial unrest has created recognition and a willingness from all st
Slide 23: Our Vision
Our Vision • Primary focus is to enhance KDC and Beatrix’s operating performance to ensure solid operating and commercial performance resulting in strong cash generation and superior returns to shareholders • Ch Change currentt ttrajectory j t tto: – Reverse declining production trend – Extend life
Slide 24: The Investment Case
The Investment Case • Experienced and supportive board of directors • A management team with significant South African experience • World class assets with long life potential • Strong cash flows with significant gearing to the gold price • Primary focus on the existing suite of assets to maximise y
Slide 25: Gold Fields Limited - Post transaction
ADD new picture G ld Fields Gold Fi ld Limited Li it d - Post P t transaction t ti Nick Holland Chief Executive Officer
Slide 26: Gold Fields Limited: A balanced global footprint
Gold Fields Limited A ba balanced a ced global g oba footprint ootp t FINLAND Arctic Platinum Project MALI Vancouver Yanfolila Denver Beijing PHILIPPINES PERU GHANA Far South East Cerro Corona Tarkwa Chucapaca Damang AUSTRALIA Agnew Lima St Ives Johannesburg Perth SOUTH AFRICA Santiago South Deep Of
Slide 27: Gold Fields Limited – International Diversification
Gold Fields Limited – International Diversification Gold Fields Gold Fields Before Unbundling Post Unbundling 18% uction1 13% 29% 24% 28% aged) 9% 47% (mana Produ 43% 13% 15% 35% 26% C2012 C20162 South Africa Australia West Africa South America 5% 7% 4% 5% erves3 17% naged) 22% Rese (man 74% 66% 1 B
Slide 28: Gold Fields Limited – The investment case
Gold Fields Limited – The investment case Sound financial growth A Quality Reserve 59.1 million ounces of reserves1 Solid Production Base 2.1 Moz pa2 NCE Margin ≥ 25% Defensive Portfolio → cash generation Proforma cash costs $780/oz; NCE $1 $1,336/oz 336/oz2 Geographical Diversification South Africa
Slide 29: Gold Fields – Strong Commitment to South Africa
Gold Fields – Strong Commitment to South Africa Investing in South Deep, our new R36 billion flagship operation A 60 years + life ~33%* of new Gold Fields’ NAV, ~66% of Reserves, ~30% of production by 2016 Fully F ll mechanised h i d modern d mine i with ith highly hi hl skilled kill d workers k ear
Slide 30: Gold Fields Limited - Financial strategy
Gold Fields Limited - Financial strategy Largely a ge y u unchanged c a ged from o ppre-transaction e t a sact o Financial a c a Targets a gets • Commitment to conservative leverage continues • Maintain a Net Debt / EBITDA ratio ≤1.0x Shareholder Returns • Dividends first call on cash flow: 25% to 3
Slide 31: Gold Fields Limited – Conclusion
Gold Fields Limited – Conclusion A smaller, ll more focussed, f d yett solid lid platform l tf for f growth th Focus on cash generation and a superior return on all funds invested Cash generation takes priority over production targets Dividends have first call on cash flows – 25% to 35% of normalise
Slide 32: Questions
Questions
Slide 33: Proforma Five-Year Financial History
Proforma Five-Year Financial History Units F2007 F2008 F2009 F2010 C2011 C2012ytd Gold Price R/kg 147,320 189,964 252,991 264,231 369,139 425,186 G ld produced Gold d d (managed) K Kg 77 226 77,226 68 023 68,023 57 976 57,976 51 888 51,888 45 005 45,005 31 228 31,228 Revenue R’m 11,377 12,922 14,667
Slide 34: Gold Fields Limited - Pro-forma financial history
Gold Fields Limited - Pro-forma financial history Salient Sa e t features eatu es o of 5-year 5 yea financial a c a history sto y Description Units F2007 F2008 F2009 F2010 C2011 C2012ytd Gold price $/oz 639 819 877 1,086 1,555 1,642 Managed gold produced Koz 1,748 1,694 1,827 2,173 2,250 1,565 Reven