BMO Capital Markets Global Metals and Mining Conference CASH - - PowerPoint PPT Presentation
BMO Capital Markets Global Metals and Mining Conference CASH - - PowerPoint PPT Presentation
BMO Capital Markets Global Metals and Mining Conference CASH POSITIVE DESPITE THE LOWER GOLD PRICE Nick Holland 29 February 2016 Forward looking statements Certain statements in this document constitute forward looking statements within
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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 among others those relating to the Damang Exploration Target Statement; the Far Southeast Exploration Target Statement; commodity prices; demand for gold and other metals and minerals; interest rate expectations; exploration and production costs; levels of expected production; Gold Fields’ growth pipeline; levels and expected benefits of current and planned capital expenditures; future reserve, resource and other mineralisation levels; and the extent of cost efficiencies and savings to be achieved. Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements. Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa, Ghana, Australia, Peru and elsewhere; the ability to achieve anticipated efficiencies and other cost savings in connection with past and future acquisitions, exploration and development activities; decreases in the market price of gold and/or copper; hazards associated with underground and surface gold mining; labour disruptions; availability terms and deployment of capital or credit; changes in government regulations, particularly taxation and environmental regulations; and new legislation affecting mining and mineral rights; changes in exchange rates; currency devaluations; the availability and cost of raw and finished materials; the cost of energy and water; inflation and other macro-economic factors, industrial action, temporary stoppages of mines for safety and unplanned maintenance reasons; and the impact of the AIDS and other occupational health risks experienced by Gold Fields’ employees. These forward looking statements speak only as of the date of this document. Gold Fields undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of this document or to reflect the
- ccurrence of unanticipated events.
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
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Q4 and FY 2015 Results
BMO Capital Markets Global Metals and Mining Conference, Nick Holland, 29 February 2016
Salient features Cash positive despite the lower gold price Net cash flow from operating activities of US$47m (FY15: US$123m) Attributable gold equivalent production up 2% QoQ to 566koz (FY15: 2,159koz) All-in costs down 2% QoQ to US$942/oz (FY15: US$1,026/oz) Normalised earnings of US$15m (FY15: US$45m) Final dividend of 21 SA cents declared (FY15: 25 SA cents) Net debt decreased US$47m QoQ to US$1,380m, net debt to EBITDA at 1.38x South Deep – production up 24% QoQ to 68koz (FY15: 198koz) FY16 guidance – production of 2.05-2.10Moz at AIC of US$1,035-1,045/oz Impairments of US$300m – none of the significant operating assets affected
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477000 451,000 496,000 598,000 557,000 548,000 559,000 556,000 501,000 535,000 557,000 566,000 200 400 600 800 1000 1200 1400 1600 1800 100,000 200,000 300,000 400,000 500,000 600,000 700,000 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
US$/oz Ounces
Attr Gold Produced Gold Price AIC
Steady decrease in all-in costs
Q4 2015: production up 2%, all-in costs down 2%, gold price flat Steady decrease in AIC through 2015
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016 2015
Production: 2,159koz AIC: US$1,026/oz
2014
Production: 2,219koz AIC: US$1,087/oz
2013
Production: 2,022koz AIC: US$1,312/oz
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Strong focus on cash generation
Net cash flow US$123m net cash flow from operating activities generated in FY15
- 45
- 229
4 38 54 65 63 54
- 29
30 75 47 1,625 1,372 1,315 1,265 1,283 1,275 1,265 1,179 1,198 1,174 1,103 1,092
- 2,000
- 1,500
- 1,000
- 500
500 1,000 1,500 2,000
- 350
- 250
- 150
- 50
50 150 250 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
US$/oz US$ million Net cash flow Gold price
Net cash flow from operating activities after taking account of net capital expenditure, environmental payments, debt service costs and non-recurring items.
2013 2014
Gold: US$1,249/oz Net cash: US$236m Gold: US$1,386/oz Net cash: (US$232m)
2015 BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Gold: US$1,140/oz Net cash: US$123m
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Comfortable balance sheet, with flexibility
- Net debt of US$1,380m at 31 December 2015
- Net debt to EBITDA of 1.38x at end-Q4 2015
- Unutilised facilities of US$844m and R2.5bn
- First debt maturity in November 2017
Balance sheet Continue to lower net debt
0.8 1.0 1.2 1.4 1.6 1.8 500 1,000 1,500 2,000 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
US$m Net debt (US$m) and Net debt/EBITDA
Net debt Net debt/EBITDA
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
500 1,000 1,500 2,000 2,500 3,000 3,500 US$ facilities Rand facilities Total facilities
US$m Debt facilities
Utilised Unutilised 950 1,000 1,050 1,100 1,150 1,200 1,250 1,300 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 US$/oz
Net debt/EBITDA and gold price
Net debt/EBITDA Gold price
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South Deep
Target is to reach breakeven by end-2016
- Required leadership in place
- Bedding down a performance driven culture
- Skills development strategy developed
- Significant improvement in safety performance
- Positive production trends emerging
- Simplified destress mining being implemented
- Targeting cash breakeven by end-2016
2016 Guidance
- Production:
257koz
- AISC:
R550,000/kg
- AIC:
R575,000/kg
- Capex:
R999m
- Exchange rate:
R14.14 = US$1.00 Q4 2015 Q3 2015 2015 2014 Production
koz
68.1 54.9 198.0 200.5 AISC
US$/oz
1,095 1,404 1,490 1,548 AIC
US$/oz
1,156 1,431 1,559 1,732
49 36 39 55 68 500 1,000 1,500 2,000 2,500 10 20 30 40 50 60 70 80 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
Production (koz) and AIC (US$/oz)
Production AIC
- 361
- 398
- 330
- 266
- 57
100,000 200,000 300,000 400,000 500,000 600,000
- 450
- 400
- 350
- 300
- 250
- 200
- 150
- 100
- 50
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
Net Cash Flow (R million) and Gold Price (R/kg)
Net cash flow Gold Price
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Business performance
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South Deep
- 98% of critical skills appointed
- Business improvement implementation
capacity established
- Fleet renewal
- Infrastructure upgrade and maintenance
- Improvement in underground working
conditions
- Employee motivation through improved
working conditions, safety performance, reward programs and engagement
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Key factors underpinning performance improvements Operating platform improving
Key Pillars
- 1. People
- 2. Safety and health
- 3. Mechanised Fleet
- 4. Infrastructure
- 5. Mining
- 6. Mine design and planning
- 7. Systems
BUSINESS IMPROVEMENT
- BI Team
̵ Program Manager ̵ Project managers ̵ Execution teams
- 68 Projects
̵ Project management framework ̵ Progress monitoring and reporting in early stages TRACKLESS FLEET
- Fleet Renewal
̵ 24 new units commissioned ̵ 3 old units decommissioned ̵ Fleet size increased from 74 to 95
- Planned Maintenance
̵ 93L Workshop commissioned ̵ OEM Maintenance contracts commenced in Q4 BUSINESS IMPROVEMENT TRACKLESS FLEET
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South Deep
Positive trends Underground operations gaining momentum
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
20 40 60 80 100 120 140 160
Q1 2015 Q2 2015 Q3 2015 Q4 2015 2014 2015
Tonnes (‘000)/Q Long Hole Stoping Production & Contribution
24% 22%
10 20 30 40 50 60 70 80 90
Q1 2015 Q2 2015 Q3 2015 Q4 2015 2014 2015
Number of Ends Destress Face Availability
10 20 30 40 50 60 70 80
Q1 2015 Q2 2015 Q3 2015 Q4 2015 2014 2015
Tonnes (‘000)/Q Backfill Production (kt)
34% 40% 37% 36% 200 400 600 800 1000 1200 1400 1600 Q1 2015 Q2 2015 Q3 2015 Q4 2015 2014 2015 m/Q
Development
Current Mine New Mine
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South Deep
People / Skills / Organisational culture Empowering the team
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016 30% 52% 6% 12%
Employee Satisfaction Barometer (Q4 2015)
Strongly Satisfied Satisfied Strongly Dissatisfied Dissatisfied
Experienced leadership team in place 143 of 146 core positions filled Business Improvement team established 47 x Artisans in training OEM Maintenance contracts (Q4 2015)
(26% of mining contribution)
Disciplined culture Performance oriented Personal engagement
Quality Skills Culture
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FURTHER SAFETY IMPROVEMENTS SUSTAINABLE IMPROVEMENT 257 KOZ GOLD CASH BREAKEVEN BY YEAR-END
South Deep
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Looking forward Targeting cash breakeven by end-2016 – continuous improvement thereafter
- Strong focus on basic
- perational requirements
remain
- Operating conditions
- Workforce confidence and self
belief
BASICS
- Engineering skills
development program continues
- Planned maintenance:
develop systems & business processes
- Shafts and winders
ASSET MANAGEMENT
- High profile destress stoping
- Seismic risk correlation to
increased production
- Mining value chain
management and operational flexibility
MINING METHODS 2016
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Solid global portfolio
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Production and AIC (ex South Deep) Operations cash positive at US$1,100/oz gold price
- Attributable production Q4 2015: 498koz (FY15: 1.96Moz)
- AIC Q4 2015: US$912/oz (FY15: US$944/oz)
- Net cash flow from international operations Q4 2015: US$86m (FY15: US$334m)
100 200 300 400 500 600 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
Equivalent production (koz)
200 400 600 800 1,000 1,200 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
AIC (US$/oz)
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Australia: Exploring the Orogenic Mines
- Post depletion reserves expected to be
largely unchanged
- Resources expected to increase
between 10% and 15%
- Discovery of Invincible South
- Cinderella and FBH in development
- Strong reserve and resource addition
continues at Wallaby
- Comprehensive update of geophysics
program has provided definition of structures and alteration under cover generating new drill targets
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Return on the 2015 investment Orogenic exploration continues to deliver
- A$86m planned for 2016
- Exploration drill drive to commence to
Waroonga North (Agnew)
- Continue to grow the Resource and
Reserve on the discoveries at Cinderella, FBH, and Invincible South
- Complete resource growth and scoping
study on the Paleochannel Resources (St Ives) 2016-2017 Focus
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St Ives
- Additional Invincible style shoot located within the Speedway Trend
- Higher grade than previous shoots
- Initial Resource of 1.4 Mt @ 6.9 g/t (312koz) defined to a depth of 400m, open down plunge
- Pit and underground potential
- Q4 intercepts:
̵ 19.1m at 12.1 g/t Au ̵ 11.4m at 13.9 g/t Au ̵ 11.0m at 14.7 g/t Au
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Invincible South A new high grade resource
~200m 750m
NW SE
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St Ives
- Exploration focused on sparsely
tested flanks of camp
- 30km Speedway trend being
systematically explored targeting Invincible analogues
- 21 new targets advanced in
exploration pipeline
- Reinterpretation of geology and
structure in an area of shallow cover growing central corridor
- Lead to multiple ore grade
intersections in reconnaissance diamond drilling at Retribution
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
New exploration fronts Still discovering mineralised systems on large tenement package
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Agnew/Lawlers
Drill drive design to test multiple targets on the way to Waroonga North and expedite production
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Waroonga North High grade Kim analogues Target Areas
Figure: Waroonga Complex looking east, orthogonal to Emu shear. 2015/2016 exploration drilling piercing points in red.
Au g/t
500m Drill intersections 2015/16 Pre-2015
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Agnew/Lawlers
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Cinderella A growing resource and reserve base
- Accelerated development to open
up deposit (commenced Q4 2016)
- Incline provides access to drill below
Cinderella and Hidden Secret targets
- Drilling plan to grow reserves
- First ore H2 2016
- Contained ounces
̵ 55koz reserve, 101koz LoM
Cinderella Incline N New Holland Open Pit
Face positions as of end of December
Hidden Secret Open Pit Cinderella Waroonga UG
Grey = As-mined Blue = Planned stopes Red = Vent drive Other = Development Cinderella North Target Himitsu & Hidden Secret Targets Cinderella East Target 200m
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Darlot
Exploration update – Assay highlights
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
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Granny Smith
Wallaby
Growing and growing and growing
Wallaby Underground
- Over 63km diamond core drilled in
2015 - 48km in plan for 2016
- Further extensions to Z100, Z110 and
Z120 expected in 2016
- Deep exploration drilling at Wallaby
continues to confirm the interpretation
- f 5 lenses (Z125 to Z150) below
defined resources
- Excellent results from Z135 to date:
6.0m @ 9.70g/t 14.8m @ 13.66g/t 15.6m @ 17.87g/t 26.9m @ 9.13g/t
- The Wallaby system remains open at
depth
- Alternate Haulage Study to optimise
cash flow and production in progress
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Zone 250 Zone 60 Zone 70 Zone 80 Zone 90 Zone 100 Zone 110 Zone 120
Thet’s Shear
Zone 150 Zone 140 Zone 135 Zone 125 Zone 130
1.9km depth
Current vertical extent
- f reported R&R
Current vertical extent
- f mine development
Advanced exploration target area Z125-150
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Granny Smith
Regional exploration
- Major evaluation of regional lease holding
commenced in 2015
- Over 56km of aircore drilled in 2015 –
returning an abundance of anomalous intersections and highlighting several new areas of interest. 96km of follow-up and new programs in plan for 2016
- Establishing geological framework, as was
successfully applied at St Ives, key to improved geological understanding and future target generation
- Diamond drill testing at Alabama has
intersected (low grade) anomalous intervals with visible gold observed in the core
- Studies to optimise a potential open pit
(~75koz) and underground (~350koz) at Granny Smith are underway
- Least explored of all the Australian assets
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Aircore Drilling Completed 2015 – max Au
6m @ 6.88g/t 2m @ 2.56g/t 2m @ 4.88g/t
2m @ 1.57g/t 10m @ 0.41g/t
2m @ 1.57g/t 2m @ 1.14g/t
Northern Fleet Project anomalous trend – +6km
Alabama Project Area – visible Au in core
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Conclusions
- Cash flow and margin – Make money at current prices
- Committed to delivering on our plans in terms of both production and costs
̵ Near-mine exploration continues ̵ Ongoing development of orebodies is critical
- Continue to reduce net debt – Targeting net debt/EBITDA of 1x
̵ Balance sheet has flexibility with regards to capacity and maturity
- We are firmly focused on delivering a sustainable South Deep – encouraged by early signs
- Continue to evaluate value-accretive opportunities
BMO Global Metals and Mining Conference, Nick Holland, 29 February 2016
Strategic priorities Focus on cash
- Attributable equivalent gold production: 2.05-2.10Moz
- AISC: US$1,000-1,010/oz
- AIC: US$1,035-1,045/oz
2016 Group guidance
Investor Relations Contacts
Avishkar Nagaser Tel: +27 11 562 9775 Mobile: +27 82 312 8692 E-mail: Avishkar.Nagaser@goldfields.co.za Francie Whitley Tel: +27 11 562 9712 Mobile: +27 82 321 7433 E-mail: Francie.Whitley@goldfields.co.za