Slide 1: Q2 2012 Results
Q2 2012 Results 23 August 2012 Nick Holland Chief Executive Officer
Slide 2: Emergency Procedures
Emergency Procedures • In case of emergency Alarm will sound • Leave room through doors to the North of the Room (your right) • Move to lawns furthest away from buildings to the North • Await further instructions from officers Gold Fields Limited | Results Q2 2012 | 23 August 2012 Page 2
Slide 3: 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 4: Dedication
Dedication Gold Fields Limited | Results Q2 2012 | 23 August 2012 Page 4
Slide 5: Q2 2012: Highlights – Strong Financial Performance
Q2 2012: Highlights Strong Financial Performance Q2 2012 H1 2012 US$m US$m EBITDA 667 66 1,367 ,36 Normalised earnings 224 504 Operating cash flow 514 874 F Free cash h flow fl 100 119 New Dividend Policy – 25% to 35% of Normalised Earnings Gold Fields Limited | Results Q2 2012 | 23 August 2012 Page
Slide 6: Q2 2012: Highlights – Operations
Q2 2012: Highlights Operations • Production up 4% to 862koz • Cash costs down 2% to US$851/oz and NCE up 2% to US$1,308/oz • Solid performances from South Africa Region, Cerro Corona, St Ives and Tarkwa • Work W k to t be b done d att Agnew A and dDDamang Solid Operational Performance Gold Fields Li
Slide 7: Q2 2012: Highlights – Growth Projects
Q2 2012: Highlights Growth Projects • Chucapaca Project - feasibility study to be completed by end of 2012 • Arctic Platinum Project – Suhanko North drilling completed, (targeting a 2 to 4Moz 2PGE +Au Resource) • Far Southeast Project - maiden resource by Q4 2012, FPIC and FTAA processes continue Go
Slide 8: Q2 2012: South Africa Region
Q2 2012: South Africa Region Strong performance from South Africa Region South Africa Region • KDC production up 12% to 280koz Production (koz) 500 400 300 • Cash costs of US$936/oz and NCE of US$1,201/oz 200 100 - 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 KDC Beatrix South Deep • NCE margin of 26% • Produ
Slide 9: Q2 2012: South Africa Region – Beatrix
Q2 2012: South Africa Region Strong performance from South Africa Region • Beatrix production steady at 80koz. • Cash costs of US$1,055/oz and NCE of US$1,342/oz. • NCE margin of 18% • Production on target to meet guidance of 325 to 350koz per annum South Africa Region Free Cash Flow of R 1.3bn (US$
Slide 10: South Deep Project
Q2 2012: South Africa Region South Deep Project Production up 33% to 78koz. Cash costs of US$942/oz and NCE of US$1,979/oz South Deep 88% self-funding* in Q2 2012 Build-up to full production run-rate of 700koz by end of 2015 Section 189 process initiated Major onkey progress on 2 August 20
Slide 11: West Rand Surface Resources Project
Q2 2012: South Africa Region West Rand Surface Resources Project • Positive scoping study by consultants on behalf of 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
Slide 12: Q2 2012: West Africa Region
Q2 2012: West Africa Region 14Moz of Reserves and 25Moz of Resources West Africa Region Production (koz) • Tarkwa production 176koz 250 200 150 100 • Cash costs US$663/oz and NCE US$1,033/oz 50 - 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 • NCE margin of 36% Tarkwa Damang • Achieving outstanding mining cost
Slide 13: Tarkwa Expansion Phase (TEP 6)
Q2 2012: 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 • Do
Slide 14: Damang - a mine in transition
Q2 2012: West Africa Region Damang - a mine in transition • Production 38koz • Cash costs US$995/oz and NCE US$1,799/oz • NCE margin -11% • High level of stripping to secure future mining – impacts NCE • Lower production from high-grade Damang pit due to safety concerns • Super-pit project work on s
Slide 15: Q2 2012: Australasia Region
Q2 2012: Australasia Region St Ives at steady state Australasia Region • Production 111koz 200 Production (koz) 150 • Cash Costs of US$920/oz and NCE of US$1,581/oz 100 50 • NCE margin of 3% due to short-term capex 0 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 St. Ives Agnew • Restore NCE margin g to 20% Aus
Slide 16: St Ives – Cave Rocks Extension
Q2 2012: 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 | Results Q2 2012 | 23 August 2012 Page 16
Slide 17: St Ives – Invincible
Q2 2012: 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 | Results Q2 2012 | 23 August 2012 Page 17
Slide 18: Agnew – work to be done
Q2 2012: Australasia Region Agnew – work to be done • Production 37koz • Cash costs US$928/oz and NCE US$1,526/oz • NCE margin of 6% due to short-term capex • Restore NCE margin to 20% • R t Return to t steady t d state t t production d ti off 45koz 45k per quarter t b by year-end d ‒ Establish righ
Slide 19: Agnew – Waroonga Complex
Q2 2012: 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) Agnew To Return To 45koz
Slide 20: Q2 2012: South America Region – Cerro Corona
Q2 2012: South America Region Cerro Corona - Now a 6Moz, 6Moz 16 16-year year, fully developed asset • Production 85koz eq Cerro Corona • Gold - 40koz (68% recoveries) 120 Au eq Production (koz) 100 • Copper – 9,234t (85% recoveries) 80 60 • Cash costs US$482/oz $ and NCE US$708/oz $ 40 20 • NCE Mar
Slide 21: Cerro Corona – Organic Growth Opportunities
Q2 2012: 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
Slide 22: Group Margin
Q2 2012: Group Margin Q2 2012 NCE margin i 18% 18%; 2012 H1 21% US$/oz 1 800 1 600 1 400 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% NCE Margin Gol
Slide 23: Strong Financial Position
Q2 2012: Strong Financial Position Strong balance sheet Net Debt 11 900 1 500 • Cash generated from operations 11 200 1 450 R4 195m (US$514 million) R4,195m US$ 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 1Q2011
Slide 24: Dividends
Q2 2012: Dividends Leading dividend payer in the peer group Dividends as a % of EPS Dividend Yield 60% 3.0% 50% 2.5% 40% 2.0% 1 5% 1.5% 30% 1.0% 20% 0 5% 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 25: Growth Portfolio Update
Growth Portfolio Update
Slide 26: 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 | Results Q2 2012 | 23 August 2012 Page 26
Slide 27: Growth Portfolio – Far Southeast Project
Growth Portfolio Far Southeast Project • Resource drilling progressing well • Maiden Resource Q4 2012 • FPIC and FTAA processes continues • Community engagement and support remains the highest priority • PFS timing dependent on progress towards community acceptance and FTAA Gold Fields Limited | Res
Slide 28: 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 29: 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 | Results Q2 2012 | 23 Augu
Slide 30: 2012 Guidance Update
2012 Guidance Update Production No more than 3.4Moz eq Cash costs US$880/oz R230,000/kg NCE US$1,340/oz R348,000/kg Capital p Programme g US$20/oz to US$25/oz Exchange Rates: ZAR : US$ = 8.20 : 1.00 and ZAR : A$ = 8.55 : 1.00 Gold Fields Limited | Results Q2 2012 | 23 August 2012 Page 30
Slide 31: Industry Overview
Industry Overview
Slide 32: Investors seeking gold exposure only can buy ETFs…
Investors seeking gold exposure only can buy ETFs… Note: ETFs and similar products, including closed-end gold funds Source: World Gold Council Gold Fields Limited | Results Q2 2012 | 23 August 2012 Page 32
Slide 33: …so gold mining stocks must provide returns that beat ETFs...
…so gold mining stocks must provide returns that beat ETFs... Total gold and major gold equities return (%, 2000-12) 600% Gold price 400 200 Major gold equities equ es 0 -200 200 As an industry we’re not delivering against these expectations th Note: Data indexed to 14 January 2000; index made up of
Slide 34: 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 35: …operating costs are increasing sharply whilst yields are declining...
…operating costs are increasing sharply whilst yields are declining... Note: Cost C per tonne is the weighted average off 8 major gold producers by total ore mined; average grade is the weighted average off 8 major gold producers by total ore mined; Major Gold producers defined as: AngloGold Ashanti
Slide 36: …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 producers Note prod cers defined as as: AngloGold Ashanti Ashanti, Barrick, Barrick Harmony, Harmon Kinross, Kinross Goldcorp, Goldcorp Gold Fields Fields, Ne Newmont mont and Newcrest; Ne crest
Slide 37: 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 once we include capital to sustain and grow our businesses Governments think we generate this much cash… Note: Major Gold producers Note prod cers defined as as: AngloGold Ashanti A
Slide 38: The industry needs continued appreciation in the gold price
The industry needs continued appreciation in the gold price, and counter to analyst expectations, prospects remain robust 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 th pri
Slide 39: Strong indications the gold industry recognises 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 40: Conclusion
Conclusion
Slide 41: Portfolio Review
Portfolio Review It is not about ounces at any cost, it is about…. • Leveraging existing assets to the gold price • Paying dividends • Sustaining the business • Real returns on capital invested • Investing in growth that makes robust returns – Ghana and Peru Minority Buy-outs • Leveraging the balanc