Gold Fields Limited · JSE:GFI
Gold Fields — Q2 F2009 Earnings Presentation
53 slides from Gold Fields's earnings presentation, Jan 29, 2009
Slide 1: Generating Free Cash Flow: Q2 F2009 Results
H2 F2009 GENERATING FREE CASH FLOW Q2 F2009 RESULTS Johannesburg 29 January 2009
Slide 2: Forward Looking Statements
1 INTRODUCTION 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. 1934 Such forward looking statements involve known and u
Slide 3: Emergency Procedures
2 EMERGENCY PROCEDURES • In the event of an emergency an alarm will sound • Exit ppremises through g doors on the north side of room • Congregate C on lawns to the north off the building • Await further instructions 3
Slide 4: Programme
3 PROGRAMME Introduction Nick Holland Chief Executive Officer Financial Review Paul Schmidt Chief Financial Officer South Africa Review Vishnu Pillay Head of South African Operations International Review Glenn Baldwin Head of International Operations Strategy Review and Conclusion Nick Holland Chief
Slide 5: Introduction
Introduction Nick Holland Chief Executive Officer
Slide 6: CFO Appointed
5 INTRODUCTION CFO Appointed Paul Schmidt Chi f Financial Chief Fi i l Officer Offi LEADERSHIP TEAM BEDDED DOWN 6
Slide 7: Strategy To Release Value
6 INTRODUCTION Strategy To Release Value Again A Four Million Ounce Producer Notional Cash Expenditure (NCE) FREE SAFETY CASH FLOW Total cash costs + All Capital C it l Growing Gold Fields Operational Q3 F09 TARGET Excellence 4 moz run rate ~4 t Securing the Future annualised NCE of ~US$725/oz @ R:U
Slide 8: Delivering Our Commitments
7 INTRODUCTION Strategy To Release Value DELIVERING OUR COMMITMENTS GUIDANCE • Q1 and Q2 F09 production and cost targets achieved TARKWA • CIL plant expansion completed EXPANSION • 1 mtpm design capacity by 23 Dec 08. • Capital project completed CERRO CORONA • 500,000 tpm name plate capacity by late
Slide 9: Safety Projects
8 INTRODUCTION Strategy To Release Value SAFETY PROJECTS KLOOF • Main Shaft steel replacement completed on schedule DRIEFONTEIN • Critical secondary support backlog completed • 95 2 & 3 West Ramps rehabilitation completed SOUTH DEEP • Vent Raise Hole repaired PILLAR MINING • Pillar mining review com
Slide 10: Step Change in Safety
9 INTRODUCTION Strategy To Release Value STEP CHANGE IN SAFETY Du Pont Safety Review completed Training and Culture interventions ongoing Si ifi Significant t improvements i t in i allll safety f t metrics ti 8 Fatalities year to Dec against total of 47 for F2008 “WE WILL NOT MINE IF WE CANNOT MINE
Slide 11: Q2 F2009 Results
10 INTRODUCTION Strategy To Release Value Q2 F2009 RESULTS Gold production • Up 5% to 839,000 attributable ounces • ZAR – flat at R153,893 Cash costs (US$ - down 21% to US$ 487/oz) • ZAR - up 8% to R244,210 NCE (US$ - down 15% to US$774/oz) Operating profit • Up to R2,566m Net earnings • Up to R483m
Slide 12: Higher Gold Price
11 INTRODUCTION Strategy To Release Value HIGHER GOLD PRICE + Higher production + Weaker exchange rate + Lower input costs Lower NCE + Lower capex = IMPROVED FREE CASH FLOW A BETTER H2 F2009 12
Slide 13: Financial Review
Financial Review Paul Schmidt Chief Financial Officer
Slide 14: Salient Features
13 Q2 F2009 FINANCIAL REVIEW Salient Features Q2F2009 Q1F2009 Gold Produced1 000oz 839 798 Exchange rate ZAR/US$ 9.82 7.74 US$/oz 792 874 Revenue R/kg 250 058 250,058 217 586 217,586 Rm 7,074 5,724 Operating costs, net Rm 4,508 4,150 R/ton 340 333 Operating costs SA ug R/t 973 1,038 Operating profit
Slide 15: Income Statement
14 Q2 F2009 FINANCIAL REVIEW Income Statement Q2F2009 Q1F2009 Operating profit Rm 2,566 1,574 Amortisation & depreciation Rm (1 033) (1,033) (902) Net operating profit Rm 1,533 672 Finance cost Rm (164) (112) Share of loss of associates Rm (47) (104) Loss on financial instruments Rm (66) (56) Explor
Slide 16: Cash Flow Statement
15 Q2 F2009 FINANCIAL REVIEW Cash Flow Statement Q2F2009 Q1F2009 Cash flows from operations Rm 1 787 1,787 (32) Dividend paid Rm - (785) C it l expenditure Capital dit nett Rm (2 345) (2,345) (1 811) (1,811) Other investing activities Rm (5) (97) Net loans (repaid)/received Rm (340) 2,596 Other fina
Slide 17: Net Debt as at End December 2008
16 Q2 F2009 FINANCIAL REVIEW Balance Sheet Net Debt as at End December 2008 Rm $m Loans - Long term (10,016) (1,039) Loans - Short term (392) (41) T t l loans Total l (10 408) (10,408) (1 080) (1,080) Less cash and deposits 1,054 110 Net debt (9,354) (970) Less investments 4,360 , 452 Net debt after
Slide 18: Financial Flexibility: Headroom Available
17 Q2 F2009 FINANCIAL REVIEW Financial Flexibility Headroom Available Rand Denominated US$ Denominated Rm $m Uncommitted Facilities 550 40 Committed Facilities 500 150 Total credit 1,050 190 Debt Maturity Profile (Rm) as at Dec 2008* 6,000 4 820 4,820 Refinancing g Plan 5,000 3,410 4,000 3,000 2 000
Slide 19: Capital Expenditure Profile
18 Q2 F2009 FINANCIAL REVIEW Capital Expenditure Profile All Amounts Rm F2009 Q1 Q2 Q3 Q4 Growth Projects: Actual Actual Forecast Forecast • Cerro Corona 168 371 - - • Tarkwa CIL Expansion 278 328 - - • South Deep 189 256 280 320 Total growth projects 635 955 280 320 • Sustaining Capex – South 288 3
Slide 20: Supply Spend Trends
19 Q2 F2009 FINANCIAL REVIEW Supply Spend Trends Key Global Commodities 200.00 Cyanide y Ave Price Index •Price indexes from January Diesel Ave Price Index 08 to December 08 180.00 STEEL INDEX •Downward trend from Ammonia Index (Explosives) 160.00 September 08 onwards. •Assuming current prices, 140
Slide 21: South Africa Review
South Africa Review Vishnu Pillay p Head of South African Operations
Slide 22: Safety
21 Q2 F2009 SOUTH AFRICA Safety Mining Weekly “WE INTEND STEERING THIS SHIP WITH AN INCREDIBLY STEADY HAND AND YOU WILL SEE, IN THE QUARTERS TO COME, AN IMPROVEMENT” 22
Slide 23: Safety Frequency Rates
22 Q2 F2009 SOUTH AFRICA Safety Fatal Injury Frequency Rate Serious Injury Frequency Rate 0.60 9.00 8.00 0.50 7.00 0.40 6.00 5.00 0.30 4.00 0.20 3.00 2.00 0.10 1.00 0.00 0.00 YTD F2004 F2005 F2006 F2007 F2008 YTD F2004 F2005 F2006 F2007 F2008 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2008Q1 2008Q2 2
Slide 24: Findings of Du Pont Review
23 Q2 F2009 SOUTH AFRICA Safety Findings g of Du Pont Review • Areas for improvement: • Culture • Training • Application of standards • Will not have a negative g impact p on p production • Learning points will improve Health and Safety initiatives “ clear and simple safety “A f vision cascading dow
Slide 25: South Africa Summary
24 Q2 F2009 SOUTH AFRICA Summary Actual Actual Guidance Q1 F09 Q2 F09 Q3 F09 Salient Points Gold kg 15 304 15,304 15 571 15,571 17 900 17,900 Production koz 492.0 500.6 575.5 • Kloof Main Shaft rehabilitated on Total cash R/kg 153,581 148,944 130,000 schedule costs US$/oz 617 472 400 R/kg 212 742 21
Slide 26: Driefontein Gold Mine
25 Q2 F2009 SOUTH AFRICA Driefontein Gold Mine Actual Actual Guidance Q1 F09 Q2 F09 Q3 F09 Salient Points Gold kg 6 428 6,428 6 063 6,063 6 900 6,900 Production koz 206.7 194.9 221.8 Total cash R/kg 130,149 137,886 120,000 • 2 Fatalities; Section 54 stoppage with costs US$/oz 523 437 375 resultant l
Slide 27: Kloof Gold Mine
26 Q2 F2009 SOUTH AFRICA Kloof Gold Mine Actual Actual Guidance Q1 F09 Q2 F09 Q3 F09 Salient Points Gold kg 4,871 , 4,717 , 6,100 , Production koz 156.6 151.7 196.1 Total cash R/kg 153,747 156,689 120,000 • 2 Fatalities; Section 54 stoppage with costs US$/oz 618 496 375 resultant loss in production
Slide 28: South Deep Gold Mine
27 Q2 F2009 SOUTH AFRICA South Deep Gold Mine Actual Actual Guidance Q3 F09 Salient Points Q1 F09 Q2 F09 Gold kg 849 1 471 1,471 1 600 1,600 Production koz 27.3 47.3 51.4 • Vent Raise Hole repaired & winder Total cash R/kg 339,694 179,130 172,000 replaced costs US$/oz 1,365 567 535 • Twin Vent Shaft
Slide 29: Beatrix Gold Mine
28 Q2 F2009 SOUTH AFRICA Beatrix Gold Mine Actual Actual Guidance Q1 F09 Q2 F09 Q3 F09 Salient Points Gold kg 3 156 3,156 3 320 3,320 3 300 3,300 Production koz 101.5 106.7 106.0 Total cash R/kg 150,982 144,759 147,000 • 2 fatalities; Section 54 stoppage resulted costs US$/oz 607 459 460 in producti
Slide 30: SA Region Way Forward
29 SA REGION Way Forward Simple p Strategy gy • Safety ¾Principal value and top priority • Deliver Operational Plans ¾ Volume ¾ Value ¾ Quality ¾ NCE Management FOCUS ON THE FUNDAMENTALS 30
Slide 31: International Review
International Review Glenn Baldwin p Head of International Operations
Slide 32: International Summary
31 Q2 F2009 INTERNATIONAL Summary Actual Actual Guidance Q1 F09 Q2 F09 Q3 F09 Gold Produced - managed koz 366 405 467 Total cash costs US$/oz 616 507 490 NCE US$/oz 981 891 680 Capex US$m 131 147 89 Outlook Q3 • Tarkwa CIL Expansion ramped up to full production • Cerro Corona ramped up to full produ
Slide 33: Tarkwa Gold Mine
32 Q2 F2009 INTERNATIONAL Tarkwa Gold Mine Actual Actual Guidance Salient Points Q1 F09 Q2 F09 Q3 F09 • 1mtpm 1 t CIL plant l t commissioned i i d enddD Dec: Gold Production koz 156 139 190 • Full capex ~$173 mllion fully accounted for in Q2 Total cash US$/oz 548 563 485 • Achieved name plate capaci
Slide 34: Damang Gold Mine
33 Q2 F2009 INTERNATIONAL Damang Gold mine Actual Actual Guidance Salient Points Q1 F09 Q2 F09 Q3 F09 Gold Production koz 44 50 52 • Rex pit started Total cash costs US$/oz 790 90 622 610 • Improved I d yield i ld and d plant l t availability il bilit • DPCB performing as planned NCE US$/oz 895 753
Slide 35: St Ives Gold Mine
34 Q2 F2009 INTERNATIONAL St Ives Gold Mine Actual Actual Guidance Salient Points Q1 F09 Q2 F09 Q3 F09 Gold • Higher grade underground ore improves koz 101 109 113 Production costs Total cash • Leviathon pit on schedule US$/oz $ 708 551 500 costs • Cash costs includes US$80/oz royalties NCE US$/oz 9
Slide 36: St Ives: Argo-Athena-Hamlet
35 Q2 F2009 INTERNATIONAL St Ives Gold Mine Argo-Athena-Hamlet ARGO Reserve : 1.37Mt@6.47g/t for 285Koz Resource : 4.42Mt @ 7.34g/t for 1.04Moz 50Koz 750 Koz 250 Koz Drill Holes Drill Holes 1.5Moz 750Koz 6.1m@6.1g/t 12m@21.9g/t 15m@14.3g/t 9m@10.3g/t 7.6m@7.4g/t 13m@7.6g/t Ounces are inventory unles
Slide 37: St Ives: The Future Backbone
36 Q2 F2009 INTERNATIONAL St Ives Gold Mine ARGO ATHENA 250m Ore Reserves (Dec08) 285Koz THE FUTURE BACKBONE OF ST IVES 37
Slide 38: Agnew Gold Mine
37 Q2 F2009 INTERNATIONAL Agnew Gold Mine Actual Actual Guidance Salient Points Q1 F09 Q2 F09 Q3 F09 Gold koz 52 45 50 Production • Kim lode achieves 40ktpm sustainably Total cash • Equipment q p availability y issues resolved US$/oz 494 371 355 costs • Mine scheduling opportunities to increase NCE
Slide 39: Cerro Corona Gold Mine
38 Q2 F2009 INTERNATIONAL Cerro Corona Gold Mine Actual Actual Guidance* Salient Points Q1 F09 Q2 F09 Q3 F09 Gold koz 6.8 26.1 34.6 • Gold and Copper production on target Copper tons 750 6,200 7,300 • Mine production ramped up to design Production Eq oz 12 61 62 levels at q quarter end Total cash US
Slide 40: Cerro Corona Equivalent Ounce Calculation
39 Q2 F2009 INTERNATIONAL Cerro Corona Mine Equivalent Ounce Calculation Formula: Equivalent Gold Ounces = Gold Ounces + ( Copper Tons x Copper Price $/t ) Gold Price $/oz Q2 F2009 Q3 F2009 Guidance Actual at Forecast at Forecast at Actual at prices & guidance Q1 Guidance Q3 Guidance actual prices p
Slide 41: Strategy Review
STRATEGY REVIEW Nick Holland Chief Executive Officer
Slide 42: Uranium Opportunity: Global Resource Process
41 SHORT TERM TARGET Uranium Opportunity Global Resource Process (working hypothesis) Historic Tailings Underground Various options reviewed Resource mt 402 205 Proceeding with consolidated feasibility study Metal grade - Drilling accelerated g/t 55 95 U3O8 SAMREC Resource in Jun 09, Reserve Dec 09
Slide 43: South Deep Opportunity
42 STRATEGY REVIEW South Deep Opportunity Outlook SV1 AREA SV-1 Shaft • Short Term Target: 320 koz oz p.a. by Q1 OLD MINE F2010 ¾ Accelerate South South Shaft Complex Shaft refurbishment 87 L ¾ Accelerate depletion Twin Shaft Complex of current mine CURRENT MINE • Long Term Target: 95 L PHASE 1 800
Slide 44: Exploration: Investing in the Future
43 STRATEGY REVIEW Exploration Discretionary Exploration Expenditure All in US$m Names of Projects Q1 F2009 Q2 F2009 Greenfields (Expensed) 8.7 14.5 West & Central Africa Kisenge, Sankarani 2.5 2.7 South America Chile Generative, Peru Generative, GoldQuest JV 1.6 1.8 Australasia Myall. Delamarian, L
Slide 45: Short Term Targets: Production
44 STRATEGY REVIEW Short Term Targets PRODUCTION ON TARGET Actual Estimate 1,200 TARGET Agnew 1,000 St Ives 800 Cerro Corona nces Damang g ‘000 oun 600 Tarkwa 400 South Deep Beatrix 200 Kloof Driefontein 0 Attributable Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 F08 F08 F08 F08 F09 F09 F09 F09 STILL TARGETING ~ 4MOZ PE
Slide 46: Short Term Targets: Cash Costs
45 STRATEGY REVIEW Short Term Targets CASH COSTS AHEAD OF GUIDANCE Actual Estimate 1000 900 800 700 600 US$/oz 500 400 300 200 100 0 Q1F08 Q2F08 Q3F08 Q4F08 Q1F09 Q2F09 Q3F09E Q4F09E F2008 F2009 South Africa Ghana Australia Peru Group Estimate at US$1: R10 R10.00 00 POSITIVE IMPACT OF INCREASED PROD
Slide 47: Short Term Targets: Capital
46 STRATEGY REVIEW Short Term Targets MAJOR CAPITAL PROJECT COMPLETED Actual Estimate US$ 'm 350 300 250 200 150 100 50 0 Q1F08 Q2F08 Q3F08 Q4F08 Q1F09 Q2F09 Q3F09E Q4F09E F2008 F2009 SA Ghana Australia Cerro Corona Estimate at US$1: R10 R10.00 00 STRONG CASH FLOW IN H2 F2009 47
Slide 48: Short Term Targets: Notional Cash Expenditure
47 STRATEGY REVIEW Short Term Targets NOTIONAL CASH EXPENDITURE WELL BELOW TARGET Actual Estimate 1000 900 800 NCE TARGET 700 600 500 US$/oz 400 300 200 100 0 Q1F08 Q2F08 Q3F08 Q4F08 Q1F09 Q2F09 Q3F09E Q4F09E F2008 F2009 South Africa Ghana Australia Peru Group NCE Estimate at US$1: R10 R10.00 00 WEL
Slide 49: Opportunities
48 STRATEGY REVIEW Opportunities Lower oil price Power conservation programmes Cost reductions due to pull-back in mining cons mables’ prices consumables’ Sweat the assets DELIVER POTENTIAL OF EXISTING MINES 49
Slide 50: Opportunities: Risks and Mitigation
49 STRATEGY REVIEW Opportunities RISKS MITIGATION Cost optimisation Copper Price Mine planning Safety y stoppages pp g at SA mines Increased focus on safety y Achieving production and cost “Beef up” regional teams targets Operational flexibility Major investments completed Fi Financial i l position
Slide 51: Conclusions
50 Q4 F2008 Conclusions SAFETY FIRST STILL TARGETING 4 MOZ PER ANNUM IMPROVE CONSISTENCY, PREDICTABILITY AND DELIVERY GET ASSETS TO DELIVER TO THEIR POTENTIAL AGGRESSIVE PURSUIT OF FREE CASH FLOW 51
Slide 52: Discussion
51 CONCLUSION Discussion CELEBRATE PROGRESS, DON’T WAIT TO BE PERFECT ANNE MCGEE- 52 MCGEE-COOPER
Slide 53: New Appointments
52 NEW APPOINTMENTS Nikki Catrakilis-Wagner Marritt Claassens Investor Relations Manager Corporate Affairs Manager Office: (Direct): +27 11 562-9706 Office (Direct): +27 (11) 562-9774 Switchboard: +27 11 562-9700 Switchboard: +27 (11) 562-9700 M bil +27 Mobile: 27 (0) 83 309-6720 309 6720 M bil +27