Slide 1: Denver Gold Forum
Denver Gold Forum 11 September 2012 Nick Holland Chief Executive Officer
Slide 2: Forward Looking Statements
Forward Looking Statements 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
Slide 3: Investors just seeking gold exposure can buy ETFs
Investors just seeking gold exposure can buy ETFs Total global gold ETF holdings (by quarter) 2,500t 2,000 1 500 1,500 1,000 , 500 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 Note: ETFs and similar products, including closed-end gold funds Source: World Gold Council Gold Fields Limited | Denver G
Slide 4: So gold mining stocks must provide returns that beat the ETF… but…
So gold mining stocks must provide returns that beat the ETF… but… th Note: Data indexed to 14 January 2000; index made up of 8 major gold producers’ total return indexes weighted by market capitalisation; Major Gold producers defined as: AngloGold Ashanti, Barrick, Harmony, Kinross, Goldcorp, Gold
Slide 5: The industry is struggling to grow production…
The industry is struggling to grow production… Investors are sceptical: • Can this be delivered? • Is it g growth or jjust replenishment? Note: Major Gold producers defined as: AngloGold Ashanti, Barrick, Harmony, Kinross, Goldcorp, Gold Fields, Newmont and Newcrest. Source: World Gold Council; Annu
Slide 6: …operating costs are increasing whilst yields are declining…
…operating costs are increasing whilst yields are declining… Note: Cost per tonne is the weighted average of 8 major gold producers by total ore mined; average grade is the weighted average of 8 major gold producers by total ore mined; Major Gold producers defined as: AngloGold Ashanti, Barrick, Har
Slide 7: …and total expenditure has grown in line with the gold price…
…and total expenditure has grown in line with the gold price… CAGR (06 – 11) 21% 21% 16% Note: Major Gold G producers defined f as: AngloGold G Ashanti, Barrick, Harmony, Kinross, Goldcorp, G Gold G Fields, Newmont and Newcrest; *Estimated * NCE/oz C / based on total cash costs plus capex for existi
Slide 8: …yet we shoot ourselves in the foot by telling only half the story…
…yet we shoot ourselves in the foot by telling only half the story… ..whereas in practice, free cash flow is much lower CAGR once we include capital to (06 – 11) sustain and grow our businesses 21% Governments think 21% we generate this much cash… 16% Note: Major Gold G producers defined f as: Anglo
Slide 9: Counter to analyst expectations fundamentals have supported a strongly rising gold price…
Counter to analyst expectations fundamentals have supported a strongly rising gold price… th th Note: Consensus forecast is median forecast of all contributing analysts to Bloomberg; Forecast as of 10 May in each year, except 2006 which is from 30 June; Futures price 2t curve based on contracts pric
Slide 10: There are strong indications that the gold industry recognises that investment cannot be sustained
There are strong indications that the gold industry recognises that investment cannot be sustained whilst returns remain low “Barrick Gold slows down expansion” Financial Times, 26th July 2012 “Newmontt tto cutt over $1b “N $1bn from f planned Peru project spend” Mineweb, 24th May 2012 “The era of g
Slide 11: Strategic response
Strategic response It is not about ounces at any cost…. 1• Review operating and growth portfolio to optimise cash generation and investment payback 2• Understand and manage all-in costs (Notional cash Expenditure) 3• P dividends Pay di id d off 25% tto 35% off normalised li d earnings i 4• Deliver S
Slide 12: Optimise cash generation
Optimise cash generation Q2 2012 NCE margin i 18% 18%; 2012 H1 21% US$/oz 1,800 1,600 NCE 1,400 Margin 1,200 1,000 800 600 400 200 - Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Gold price Total cash costs NCE Targeting a 25%
Slide 13: Leverage the Balance Sheet
Leverage the Balance Sheet Strong balance sheet Net Debt 11,900 1,500 • Q2 2012 - Cash generated from 11,200 1,450 operations R4,195m R4 195m (US$514 million) US$ million R million 10,500 1,400 • Net debt R11,457 million (US$1,366 million) 9,800 1,350 9,100 1,300 • Net Debt/EBITDA ratio of 0.53 1Q20
Slide 14: Prioritise Dividends
Prioritise Dividends Leading dividend payer in the peer group Dividends as a % of EPS Dividend Yield 60% 3.0% 50% 2.5% 40% 2 0% 2.0% 1.5% 30% 1.0% 0% 20% 0.5% 10% 0.0% 0% 2007 2008 2009 2010 2011 Interim: 2012 Gold Fields Industry Average Source: Bloomberg, Company results Source: Bloomberg, company
Slide 15: South Africa Region
South Africa Region Stable performance, performance in line with expectations • KDC producing within 1.0 to 1.1 Moz p.a. range (Dec 2011 Analyst Day guidance) • Beatrix producing with 325 to 350 Koz p.a. range (Dec 2011 Analyst Day guidance) • Q2 2012 NCE margin 17% South Africa Region Production (k
Slide 16: South Africa Region: South Deep Project
South Africa Region South Deep Project Production build-up to run-rate of 700koz by end of 2015 Destress mining improved as planned 88% self-funding* in Q2 2012 Section 189 process initiated on 2 August 2012 Key Infrastructure Projects On Budget And On Time 2010 2011 2012E 2013E 2014E 2015E
Slide 17: South Africa Region: West Rand Surface Resources Project
South Africa Region West Rand Surface Resources Project • Positive scoping study – Gold Fields and Gold One • Synergies in treating combined tailings of both parties utilising the following: • An integrated reclamation network • A high grade uranium leach facility • A single g low g grade g gold and
Slide 18: West Africa Region
West Africa Region 14Moz of Reserves and 25Moz of Resources • Minority buy-outs increases interest from 71% to 90% • Tarkwa p production in 700 to 750 Koz range g – world-class operation p with upside p • Damang a mine in transition – focus on restoring production to ~180 Koz p.a. • Q2 2012 Regional
Slide 19: West Africa Region: Tarkwa Expansion Phase (TEP 6)
West Africa Region Tarkwa Expansion Phase 6 (TEP 6) • 8Mtpa CIL plant to replace North Heap Leach • Adds ~100koz p p.a. on improved p recoveries – to p provide ~800koz p p.a. p production p profile • Additional 1Moz over life of mine based on lower cut-off grade and improved recoveries • Double digi
Slide 20: West Africa Region: Damang - a mine in transition
West Africa Region Damang - a mine in transition • High level of stripping to secure future mining – impacts NCE • Lower production from high high-grade grade Damang pit due to safety concerns • Super-pit project work on slow burn, focus on restoring profitability and cash flow Juno – 490koz Damang
Slide 21: Australasia Region
Australasia Region St Ives at steady state, state Agnew needs work • St Ives steady state production 450koz p.a. • Agnew A t recover to to t ~180 180 Koz K p.a. • Q2 2012 NCE margin 3% • Chunky Ch k capital it l on lif life extensions t i and d owner mining i i conversion i • Transition to owner min
Slide 22: Australasia Region: St Ives – Cave Rocks Extension
Australasia Region St Ives – Cave Rocks Extension Coloured blocks indicate three-year mining plan Depth D th 500m 5m @52.8g/t 5m @2.4g/t 9m @5.2g/t 3m @ @37.4g/t g South Potential for Two Years Plus Life Extension Gold Fields Limited | Denver Gold Forum | 11 September 2012 Page 22
Slide 23: Australasia Region: St Ives – Invincible
Australasia Region St Ives – Invincible Cave Rocks Invincible Neptune Existing ug mines Existing op mines Leviathan Argo Exciting New Discovery in Major High Grade Corridor Gold Fields Limited | Denver Gold Forum | 11 September 2012 Page 23
Slide 24: Australasia Region: Agnew – Waroonga Complex
Australasia Region Agnew – Waroonga Complex Mining g Pre-2008 Main Lode Mining Post 2008 Kim Lode Current Reserves Fitzroy Target 500m Bengal Target 5 Hastings Target Link Target Fitzroy – Bengal- Link Hastings High target Grade Shoots Reserve Level 2011 (1500m bs) Significant Upside Gold Fields Lim
Slide 25: South America Region: Cerro Corona
South America Region Cerro Corona - Now a 6Moz, 6Moz 16 16-year year, fully developed asset • Production ~340 Koz eq p.a. • Outstanding cost performance - highest margin operation in the Group - ~50%+ 50% • Q2 2012 NCE margin 48% • Maintain high profitability and cash flow Cerro Corona Au eq Product
Slide 26: South America Region: Cerro Corona growth projects
South America Region Cerro Corona - Now a 6Moz, 6Moz 16 16-year year, fully developed asset Progress future production growth projects • Sulphide plant extension (Feasibility 2013) • H Heap lleach h option ti Advancing ffor oxides id (F(Feasibility ibilit (2013) Organic Growth Opportunities Gold Fie
Slide 27: Growth Portfolio: Chucapaca Project
Growth Portfolio Chucapaca Project • Feasibility study Q4 2012 • Submit EIA Q4 2012 • Start value engineering and optimisation Q4 2012 • Re-establish exploration in 2013 Gold Fields Limited | Denver Gold Forum | 11 September 2012 Page 27
Slide 28: Growth Portfolio: Far Southeast Project
Growth Portfolio Far a Sou Southeast eas Project ojec - First s Go Gold d Fields e ds dec declared a ed resource esou ce Completion of Maiden Inferred Mineral Resource 19.8Moz Au & 4.5Mt Cu Cu* Equivalent - 43.1Moz AuEq** Deposit remains open Resource drilling progressing well focused on:
Slide 29: Growth Portfolio: Far Southeast Mineral Resource
Growth Portfolio Far a Sou Southeast eas Project ojec - First s Go Gold d Fields e ds dec declared a ed resource esou ce Grade Grade Metal Mineral Resource Tonnes Metal Gold Gold Copper Copper Classification (Mt) (Au Moz) (Au g/t) (Cu %) (Cu Mt) Measured - - - - - Indicated - - - - - Inferred 891.7
Slide 30: Growth Portfolio: Arctic Platinum Project
Growth Portfolio Arctic Platinum Project • Suhanko North drilling complete (targeting a 2 to 4Moz 2PGE + Au Resource in addition to existing Greater Suhanko Resource of ~7Moz 2PGE + Au) • Initial Platsol amenability tests on Suhanko North complete • Platsol risk review completed • Second integrated
Slide 31: Growth Portfolio: Damang Super-pit Project
Growth Portfolio Damang Super Super-pit pit Project • Resource 10.1Moz (+116% y-o-y) • Reserve 3.4Moz ((+63% yy-o-y) y) • Focus on returning the operation to a stable base • Super-pit project work on slow-burn while prioritising operational performance Gold Fields Limited | Denver Gold Forum | 11 Se