Gold Fields Limited · JSE:GFI
Gold Fields — International Gold & Silver Symposium Lima Peru 2018
11 slides from Gold Fields's conference presentation, May 29, 2018
Slide 1: Perspectives on Gold Mining
International Gold & Silver Symposium Lima Peru Perspectives on Gold Mining NICK HOLLAND CEO: GOLD FIELDS 29 May 2018
Slide 2: Forward looking statement
Forward looking statement 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 a
Slide 3: The state of the global gold industry
The state of the global gold industry ● Production: The growth rate in global mine supply has slowed significantly in recent years. Whilst global mine supply may remain at current record levels for a few years, the industry looks set to enter a period of secular decline over the longer term ● Costs:
Slide 4: Has production peaked?
Has production peaked? ● Growth in global mine supply has slowed significantly ̵ Mine supply increased only 0.2% in 2017 compared to 5.5% in 2013 ● 30% of global reserves are currently associated with assets where a construction decision is yet to be made ● The industry can potentially sustain produ
Slide 5: Industry AISC and AIC have bottomed
Industry AISC and AIC have bottomed ● In 2013, the World Gold Council introduced the All-in Sustaining Cost (AISC) measure to show all costs associated with producing an ounce of gold ● From 2012 to 2016, industry AISC costs decreased at a compound annual growth rate (CAGR) of 6.2% whilst All-in Cos
Slide 6: Capex has fallen dramatically
Capex has fallen dramatically 25 000 Absolute capex of industry proxy ● Capital expenditure has been one of the US$m 20 000 ‘low hanging fruits’ targeted by gold miners in their cost cutting drives 15 000 ● Of concern is the notable decrease in 10 000 sustaining capital (SIB capex) from 5 000 US$310
Slide 7: Exploration spend has fallen
Exploration spend has fallen Total exploration spend of industry proxy ● After peaking in the 1980’s, the rate at US$m 2 500 which gold is being discovered has declined over the past three decades 2 000 ● There has been a lack of ‘world-class’ 1 500 (5Moz +) discoveries capable of producing 250koz p
Slide 8: How Gold Fields has adapted
How Gold Fields has adapted ● Moved away from a focus on ounces to a focus on margin and cash flow ● Set a target of achieving a 15% free cash flow margin at a gold price of US$1,300/oz ● Production footprint has become more focused on 4 key jurisdictions, with a focus on mechanised underground and
Slide 9: How has Gold Fields fared?
How has Gold Fields fared? koz Gold Fields production: actual vs. guidance 450 US$/oz SIB/oz: Gold Fields vs. industry proxy 2500 400 385 2000 350 300 313 1500 299 289 287 250 257 240 234 1000 200 197 150 176 172 161 500 100 0 50 2013 2014 2015 2016 2017 0 2012 2013 2014 2015 2016 2017 Actual Guidan
Slide 10: Parting thoughts
Parting thoughts ● Capital and exploration expenditure have to increase given the impending fall in production profiles ̵ These have been two of the key areas for cost cutting in the industry over the past six years and have driven the decrease in AIC. We already saw AIC increase in 2017 (first time
Slide 11: THANK YOU
THANK YOU Fievcps
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