Slide 1: Investor Reference Pack: Building a Sustainable Business at US$1,300/oz
Investor Reference Pack: Building a Sustainable Business at US$1,300/oz NICK HOLLAND Chief Executive Officer 8 August 2014
Slide 2: Brief overview of the gold mining sector
Brief overview of the gold mining sector
Slide 3: Introduction: Brief Overview of the Gold Mining Sector
Introduction Brief Overview of the Gold Mining Sector ● The gold price has been hard hit with little respite in sight ● Gold is becoming scarce ̵ World gold supply trends from mines, scrap, ETFs and hedging are steadily retreating ̵ Number and average grades of gold discoveries have dropped dramatic
Slide 4: Gold Price Has Been Hard Hit With Little Respite In Sight
Gold Price Has Been Hard Hit With Little Respite In Sight Historical & Forecast Gold Prices GOLD PRI CI NG DEVELOP M EN T Annual, Real 2013 Terms(a) 2 000 1 800 1 600 Max: $1,500/oz 1 400 (US$/oz, real terms) Median: $1,268/oz 1 200 1 000 Min: $815/oz 800 600 Broker Max & Min 400 200 0 Jan 04 Jan 02
Slide 5: Gold Is Becoming Scarce (1)
Gold Is Becoming Scarce (1) World Gold Supply Trends – Steadily Retreating Supply of gold from mines, scrap, ETFs and hedging (tons) 6000 5000 4 850 4 422 4 476 4 155 4 364 4 138 840 3 845 4000 15 3 565 3 731 300 35 1610 1615 150 1655 1120 1549 1000 900 3000 1315 875 2000 2812 2861 2890 2855 2780 25
Slide 6: Gold Is Becoming Scarce (2)
Gold Is Becoming Scarce (2) Average ng Number And Average Grades Of Gold Discoveries Have Dropped Dramatically Industry will need innovation and/or higher prices Source: GFL/MinEx Consulting An Introduction to Gold Fields: Building a Sustainable Business at US$1,300/oz | Nick Holland | 8 August 2014
Slide 7: Strong Consumer Demand For Metals From The East
Strong Consumer Demand For Metals From The East 2013 Gold Consumer Demand By Country 450 tonnes in 2008 EAST WEST 630 tonnes in Total East: 2,840 Total West: 573 (tonnes) 2008 tonnes tonnes 1 200 1 066 975 (83%) (17%) 1 000 800 600 400 175 190 200 140 121 92 77 72 68 57 77 73 65 38 25 21 18 16 23 20
Slide 8: Gold Price Analysis – Mainstream Bank Views
Gold Price Analysis – Mainstream Bank Views Last 5 years Gold Price Performance Note: Sell off of ETFs predated sell off of gold. Did we create our own enemy, or were the ETFs used to “manage” the gold price? 2 000 ETFs seem to have 90 plateaued and there 1 800 are no short term 80 demand drivers 70
Slide 9: Increasing Resource Nationalism
Increasing Resource Nationalism Governments And Communities Are Increasingly Antagonistic Towards Mining “Resource nationalism “Miners encounter the a key threat to mining” hard rock of resource BlackRock, Oct 2011 nationalism” The Telegraph (UK), Nov 2011 “Resource nationalism plagues the oil marke
Slide 10: Industry Is Halting New Investments And Closing Operations
Industry Is Halting New Investments And Closing Operations Low Margins And Declining Equity Prices Are Putting Mining Investments Under Threat A Harsh Environment With New Projects Increasingly Being Delayed And Cancelled Sources: Factiva, Literature search An Introduction to Gold Fields: Building a
Slide 11: How Gold Fields has responded
How Gold Fields has responded
Slide 12: The Transformation of Gold Fields
The Transformation of Gold Fields The Journey Started With The Speech To The Melbourne Mining Club What Investors Want Aug 2012 Portfolio Review Aug - Dec 2012 Sibanye Gold Dec - Jan 2012 New Cash Strategy 2013 Business Plan A New Paradigm 15 April 2013 Gold Price < US$1,300/oz A Fundamental Shift I
Slide 13: The Transformation of Gold Fields: Yilgarn South Acquisition
The Transformation of Gold Fields Acquisition of the Yilgarn South Assets - 1 October 2013 Expanding The Gold Fields Franchise • Acquisition of Lawlers, Granny Smith and Darlot Gold Mines in WA • Focus on free cash flow and growing the margin • Synergies optimised • Optimised contractor vs owner min
Slide 14: The Transformation of Gold Fields: Structural Shift in Production and Cost Base
The Transformation of Gold Fields A Structural Shift in the production and cost base Yilgarn South Acquisition 700 000 1 800 1 600 600 000 1 400 500 000 1 200 400 000 1 000 300 000 800 600 200 000 400 100 000 200 - - Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Gol
Slide 15: Changing Gold Fields' Global Footprint
The Transformation of Gold Fields Changing Gold Fields’ Global Footprint 2012 Attributable Production 2014 Attributable Production 10% 13% 19% South America South America 43% West Africa 26% West Africa South Africa 31% South Africa Australia Australia 45% 13% Australia 43% Of Gold Fields’ Attributa
Slide 16: Strategic Focus 2014
The Transformation of Gold Fields Strategic Focus 2014 ● Driving margins and cash flow across the portfolio ● Improving the balance sheet and reducing net debt ● Rebasing South Deep to de-risk the build-up plan and achieve cash break-even in H1 2014 ● Realising the potential of the Yilgarn South acq
Slide 17: Australia Region
Australia Region
Slide 18: Gold Fields Australia: A Robust Portfolio
Australia Region Gold Fields Australia: A Robust Portfolio Koz US$/oz Q1 2014 Production and AIC By Mine 120 1 400 1 291 96.6 1 200 100 1 025 1 075 910 1 000 80 66.5 800 59.2 60 600 40 400 22.9 20 200 0 0 St Ives Granny Smith Agnew/Lawlers Darlot Production AISC Targeting One Million Ounces at AIC B
Slide 19: Shaping Our Destiny
Australia Region Shaping Our Destiny ● Leverage our orogenic expertise to add to the Resource and Orogenic Ore Bodies Reserve positions of all mines in the portfolio ● Are well understood geologically ● Can be large and of good grade ● US$50 million exploration spend in 2014 to crystalize known ● Oc
Slide 20: St Ives Gold Mine
Australia Region St Ives Gold Mine A Very Significant And Productive Land Position An Introduction to Gold Fields: Building a Sustainable Business at US$1,300/oz | Nick Holland | 8 August 2014 20
Slide 21: St Ives Gold Mine
Australia Region St Ives Gold Mine ● 2014 Guidance: 395 Koz @ AIC of ~US$1,150/oz On-site discoveries with significant upside (Exchange rate US$0.95 = A$1.00) • Neptune in production in 2014 • Mineral Resources: 5.5mt @3.3g/t for 0.58 Moz ● Mineral Resources: 4.34 Moz • Mineral Reserves: 2.9mt @ 3.4
Slide 22: St Ives Gold Mine: Invincible Discovery
St Australia Region St Ives Gold Mine: Invincible Discovery ● Large high grade open pit and potential underground operation ● 2.25 km strike length ● Wide mineable zones (up to 20m) ● 2014 Drill focus on expanding the open pit and full UG potential 1860m 2.25 km SE 400m 10m @ 11.0g/t 11m @ 11.2g/t ●
Slide 23: St Ives: Invincible and Neptune Relative to Lefroy Mill
Australia Region St Ives Gold Mine: Invincible and Neptune Relative to Lefroy Mill • Within Operating Radius of Existing Operations • Limited to Lake Disturbance Only Within Trucking Distance From The Plant An Introduction to Gold Fields: Building a Sustainable Business at US$1,300/oz | Nick Holland
Slide 24: St Ives Gold Mine: Speedway Trend
Australia Region St Ives Gold Mine: Speedway Trend 1m @ 21.8 g/t (49m) ● New under-explored trend 2m @ 8.3 g/t (56m) ● Invincible the anchor deposit in the North ● Proven capacity to deliver major deposits 2m @ 24.3 g/t (24m) ● Evidence of gold along 22 km strike ● Rigorous staged exploration progra
Slide 25: Agnew/Lawlers Gold Mine
Australia Region Agnew/Lawlers Gold Mine Leinster airport Leinster A Large Combined Land Position with Significant Exploration Potential An Introduction to Gold Fields: Building a Sustainable Business at US$1,300/oz | Nick Holland | 8 August 2014 25
Slide 26: Agnew/Lawlers Gold Mine
Australia Region Agnew/Lawlers Gold Mine ● Combined 2014 Guidance: 265Koz @ AIC of Agnew Reserves and Production 2.5 ~US$1,110/oz (Exchange rate US$0.95 = A$1.00) 2.0 ● Mineral Resources: 3.7 Moz Million Ounces 1.5 ● Mineral Reserves: 1.0 Moz 1.0 0.5 ● Outstanding reserve replacement history 0.0 F20
Slide 27: Agnew Lawlers Gold Mine
Australia Region Agnew Lawlers Gold Mine ● Combination of two adjacent operations with different mining methods, streamlined into one multi-mine operation ● Can meet GFI key metric of 15% FCF margin at a gold price of US$1,300/oz ● Synergies realised ̵ Operating mine less than 5km away from the Agne
Slide 28: Agnew/Lawlers: New Holland Exploration Potential
Australia Region Agnew/Lawlers Gold Mine: New Holland Exploration Potential Genesis Open Pit New Holland Open Pit Hidden Secret Open Pit Sheba Potential for deeper lodes?? 1,000m Potential extensions Current target areas Drilled, to be developed New Holland Under Explored - Gets Better! An Introduct
Slide 29: Agnew/Lawlers: Waroonga Exploration Potential
Australia Region Agnew/Lawlers Gold Mine: Waroonga Exploration Potential Kath Rajah Main South Main North Waroonga North Hauptspalt Yeoman FBH Kim Indicated Resource Link Inferred Resource Pre-resource early stage target Target Zones High Grade Shoots Open at Depth – Potential Along Strike! An Intro
Slide 30: Granny Smith Gold Mine
Australia Region Granny Smith Gold Mine ● 2014 Guidance: ~240 Koz @ AIC of ~US$1,060/oz (Exchange rate US$0.95 = A$1.00) ● Mineral Resources: 3.3 Moz ● Mineral Reserves: 0.80 Moz ● Outstanding reserve replacement history with significant reserve growth potential K Oz GSM Wallaby Underground Reserves
Slide 31: Granny Smith Gold Mine
Australia Region Granny Smith Gold Mine ● Located in highly endowed province ● >20 Moz in the Laverton Region including: ̵ Granny Smith ~ 2.5 Moz ̵ Wallaby ~ 8 Moz ̵ Sunrise ~ 10 Moz ● 2 World Class deposits on the margin of Lake Carey - Wallaby and Sunrise Dam ● Lake Carey under-explored: ̵ No sign
Slide 32: Granny Smith: Wallaby Ore Body
Australia Region Granny Smith Gold Mine: Wallaby Ore Body Wallaby Ore Body Mineral Resources • Open Pit – 27.6 Mt @ 1.33 g/t for 1.18 Moz Zone 250 • Underground – 8.5 Mt @ 7.54 g/t for 2.06 Moz Zone 60 Mineral Reserves • Underground – 4.1 Mt @ 6.34 g/t for 838 Koz Zone 70 • +15% on 2012 ounces post
Slide 33: Granny Smith: Wallaby Ore Body
Australia Region Granny Smith Gold Mine: Wallaby Ore Body Zone 250 Zone 60 Zone 70 Un-depleted Global Resource Zone 80 Intrusive 3.58Mt @ 8.50g/t for Depth 1.8km 980Koz (3.0g/t cut) Zone 90 3.84Mt @ 8.88g/t for Zone 100 1.1Moz (3.18g/t cut) 3.36Mt @ 9.04g/t for Zone 100 South– Target Zone 110 Zone 1
Slide 34: Granny Smith: Wallaby Growth Potential
Australia Region Granny Smith Gold Mine: Wallaby Growth Potential 2013 MY Resource Wireframes vs 2014 Planned Drilling Zone 60 Zone 250 Zone 70 Zone 70E Z100 Infill and Extensions Resource Drilling Zone 80 Zone 90 Zone 90 Extensions Z100 Step-Out Inferred Resource Drilling Zone 100 Phase 2 – 25 m in
Slide 35: West Africa Region
West Africa Region
Slide 36: Tarkwa Gold Mine
West Africa Region Tarkwa Gold Mine ● 2014 Guidance: ~520 Koz @ AIC of ~US$1,100/oz ● Optimisation of Mill from 12 Mtpa to +13 Mtpa underway ● Mineral Resources: 10.3 Moz ● Settled down well after closure of heap leach ● Mineral Reserves: 7.3 Moz operations in Q1 2014 ● A 1g/t, 90 Mtpa open pit oper
Slide 37: Damang Gold Mine
West Africa Region Damang Gold Mine ● 2014 Guidance: ~165 Koz @ AIC of ~US$1,1,240/oz ● Mineral Resources: 6.6 Moz ● Mineral Reserves: 1.1 Moz ● Central CIL Processing Plant: 4.0 Mtpa ● Turn-around consolidated in Q2 2014 ● Significant improvement in operational performance, focussed costs control,
Slide 38: Damang On-lease Exploration Opportunities
West Africa Region Damang On-lease Exploration Opportunities HUNI SADDLE PIT JUNO PIT NYAME TOMENTO NORTH & DIP EXTENSION 17km AMOANDA CHIDA REX More Than 17 Kilometre Strike Length An Introduction to Gold Fields: Building a Sustainable Business at US$1,300/oz | Nick Holland | 8 August 2014 38
Slide 39: South America Region
South America Region
Slide 40: Cerro Corona Copper/Gold Mine
South America Region Cerro Corona Copper/Gold Mine ● 2014 Guidance: ~ 290 Koz AU eq @ AIC ~US$865/oz,240/oz ● Mineral Resources: Au 3.3 Moz and Cu 1,124 Mlb ● Mineral Reserves: Au 2.0 Moz and Cu 712 Mlb ● Central Sulphide flotation Plant: 6.7 Mtpa ● Continued outperformance against resource model ●
Slide 41: South Africa Region
South Africa Region
Slide 42: South Deep Project
South Deep Project South Deep Project ● +50-year mine life: ̵ Resources 76.2 Moz Fleet Availability & ̵ Reserves 38.2 Moz Utilisation Operator & ● ~US$4 billion capital invested to date Ore Handling Technician Infrastructure Skills ● Ground support rehabilitation intervention underway, completed end
Slide 43: South Deep: Reviewing The Mining Method
South Deep Project Reviewing The Mining Method • International Geotechnical Advisory Board (IGAB) - Industry leaders from across the globe - Reviewed South Deep’s destress mining methodology over past seven months - Two alternative mining methods were identified • Both methods being trailed between
Slide 44: South Deep: 4x4 Meter Destress Method
South Deep Project 4x4 Meter Destress Method 4m x 4m excavations 5m x 2.2m excavations New 3m wide crush pillars Old 2m wide crush pillars 1. Bigger excavation sizes - conventional equipment vs. low profile equipment 2. Changes corridor spans from 240m to 120m - greater longhole stope extraction and
Slide 45: South Deep: Inclined Slot Method
South Deep Project Inclined Slot Method ● All development always within the destressed window provided by vertical slots ● Lower cost method ̵ No separate destress ̵ Slots are non-entry, no support required ● Period to commencement of longhole stoping only 6 months (previous design ~3 Years) ● Singl
Slide 46: South Deep: Inclined Slot Method
South Deep Project Inclined Slot Method Inclined slots destress the development required for subsequent destress slots Slot access in destress shadow (4.5m x 4.5m) Rotated view 20m Front view 9m XX Side view An Introduction to Gold Fields: Building a Sustainable Business at US$1,300/oz | Nick Hollan
Slide 47: South Deep: Inclined Slot Method With Longhole Stoping
South Deep Project Inclined Slot Method With Longhole Stoping Subsequent slot The destress slot also acts as the slot for the longhole stope 20m(w) x 20m(h) x 15m(l) Rotated view XX An Introduction to Gold Fields: Building a Sustainable Business at US$1,300/oz | Nick Holland | 8 August 2014 47
Slide 48: South Deep: Inclined Slot Method Mining Sequence
South Deep Project Inclined Slot Method Mining Sequence 1 Initial two inclined slots mined destressing the subsequent slot access 2 Project at steady state 3 Completed test project An Introduction to Gold Fields: Building a Sustainable Business at US$1,300/oz | Nick Holland | 8 August 2014 48
Slide 49: Building a Sustainable Business at US$1,300/oz
Building a Sustainable Business at US$1,300/oz NICK HOLLAND Chief Executive Officer 8 August 2014