Building a Sustainable Business At US$1,300/oz Gold Price Denver - - PowerPoint PPT Presentation

Building a Sustainable Business At US$1,300/oz Gold Price Denver Gold Forum

Nick Holland

16 September 2014

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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.

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

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The Transformation of Gold Fields

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

The Journey Started With The Speech To The Melbourne Mining Club

Building A Sustainable Business At US$1,300/oz

What Investors Want Aug 2012 Portfolio Review Aug - Dec 2012 Sibanye Gold Dec - Jan 2012 New Cash Strategy 2013 Business Plan A New Paradigm 15 April 2013

Gold Price < US$1,300/oz

A Fundamental Shift In Strategy Focus on free cash flow and growing the margin “It’s all about cash – not ounces for the sake of ounces”

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The Transformation of Gold Fields

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Six Strategic Themes Focus on Total Shareholder Returns

>15% Free Cash Flow Margin at US$1,300/oz Gold

Underway Underway

Commitments Made On 22 August 2013

1. Focus on free cash flow ̵ Structural shift in cost base ̵ >15% free cash flow at a US$1,300/oz gold price ̵ No marginal mining, no high-grading, maintain cut-off grades ̵ Protect sustainability of ore bodies by investing in development and stripping 2. Reboot and deliver South Deep 3. Drive brownfields exploration 4. No greenfields exploration & projects and divest non-core assets 5. Strengthen balance sheet 6. Pay dividends

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451,000 496,000 598,000 557,000 548,000

200 400 600 800 1,000 1,200 1,400 1,600 1,800 100,000 200,000 300,000 400,000 500,000 600,000 700,000 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 US$/oz Ounces

Production and Costs

Gold Produced Gold Price AIC

The Transformation of Gold Fields

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

AIC Down 30% from US$1,572/oz (Q2 13) to US$1,093/oz (Q2 14) A Sustainable, Structural Shift In The Cost Base

6

The Transformation of Gold Fields

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Net Cash Flow1 US$294 Positive Swing In Net Cash Flow From Q2 2013 to Q2 2014

• 229

3.6 38 54 65

1,372 1,315 1,265 1,283 1,275

• 2,000
• 1,500
• 1,000
• 500

500 1,000 1,500 2,000

• 250
• 200
• 150
• 100
• 50

50 100 150 200 250 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 US$/oz US$ million Net cash flow Gold price

1 Net cash flow from operating activities after taking account of net capital expenditure, environmental payments, debt service costs and non-recurring items.

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The Transformation of Gold Fields

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Creating Value Through Corporate Restructuring (Announced 29 November 2012) +47% TSR Despite 26% Fall In Gold Price

Source: Bloomberg 47%

• 20%
• 26%
• 30%
• 40%
• 43%
• 45%
• 55%
• 55%
• 61%
• 61%
• 80%
• 60%
• 40%
• 20%

0% 20% 40% 60% GFI & Sibanye Combined Randgold Goldcorp Agnico Eagle Newmont Anglogold Barrick Yamana Newcrest Harmony Kinross

Total Shareholder Returns

28 November 2012 to 3 September 2014

1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800

Gold Price

28 November 2012 to 3 September 2014 28 Nov 2012 US$1,719.69/oz 3 Sep 2014 US$1,269.40/oz

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The Transformation of Gold Fields

• H1 2014 - Net debt reduced by US$100m to US$1,635m
• Net Debt to EBITDA reduced to 1.47X1
• Maturity date on US$715m of debt extended, on same terms, from November 2015 to

November 2017

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Balance Sheet Further Strengthened If We Make The Earnings, We Will Pay The Dividend

1 12-month rolling historical average

H1 2014 Dividend

• ZAR0.20 per share
• In line with dividend policy of paying out 25% to 35% of normalised earnings

Targeting Net Debt To EBITDA of 1X

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The Transformation of Gold Fields

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Active Portfolio Management Re-invest Proceeds in Debt Reduction or Value Adding Acquisitions

Woodjam British Columbia “The wrong metal” Asosa Ethiopia “The wrong address” Yanfolila Mali “Franchise / hurdle rates” Royalty Portfolio

“Value release”

Talas Kyrgysztan “The wrong address” Arctic Platinum Project Finland “The wrong metal” Chucapaca Peru “Franchise / hurdle rates” Salares Norte Chile “Great optionality” FSE Phillippines “Great optionality” Sold Disposal Underway Retain

10

The Transformation of Gold Fields

• Short term bonus (Annual)

̵ Based on Board approved annual operational plans and targets ̵ Includes parameters for operational sustainability

• Long term bonus (Three year cycle)

̵ Cash rather than shares ensures no shareholder dilution ̵ Introduces downside – if threshold is not achieved, no bonus

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Alignment of Executive and Senior Management Incentives With Shareholders If Shareholders Win We Win, If Shareholders Lose, We Lose Free Cash Flow Total Shareholder Returns

15% Free Cash Flow Margin US WACC 6% Real compounded (Threshold)

50% Weighting 50% Weighting

+

= BONUS

Australia Region

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Australia Region

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Gold Fields Australia: A Robust Portfolio Targeting One Million Ounces at AIC Below US$1,050/oz

256.9 83.4 84.6 66.0 22.9 1 042 1,372 692 1,010 1,228 200 400 600 800 1,000 1,200 1,400 1,600 Region St Ives Granny Smith Agnew/Lawlers Darlot 50 100 150 200 250 300

Q2 2014 Production and AIC By Mine

Production AIC US$/oz Koz

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Australia Region

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Yilgarn South Acquisition: Key Performance Indicators Leverage Operational Expertise

KPI Unit GFI 9 Months ABX 9 Months Comments Safety TRIFR 7.72 15.51 Actual injuries - 11 under GFI vs 30 under ABX Ore Processed Kt 1,931 2,274 Only mining ore that contributes to the required margin Head Grade g/t 6.29 5.08 As above Gold Production Koz 367,540 341,466 All In Sustaining Cost A$/oz 982 1,243 Gold Price A$/oz 1,398 1,464 Free Cash Flow Margin % 28% 11% Efficiencies have compensated for gold price

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RESOURCE EXTENSION & EXPLORATION

DISCOVERY

RESOURCE

4.3 Moz

Australia Region

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

St Ives Gold Mine Investment in Exploration Underpins Reserve Replacement

RESERVE

2.0 Moz

• Strong endowment
• Exploration >A$25m pa
• Speedway Trend project pipeline
• Extensions to current mines

2013 2019 LoM Extension Potential

LoM

~12 Moz produced since 1980

• Orogenic style of mineralisation
• 127,556 ha of granted tenements with

significant exploration potential

• Circa 16 Moz discovered and 12 Moz

produced since 1980

• Significant new discoveries with potential to

extend mine life beyond 10 years

̵ Neptune – High grade open pit - Paleoplacer System

• Mineral Resources: 5.5mt @3.3g/t for 0.58

Moz

• Mineral Reserves: 2.9mt @ 3.4g/t for 0.32

Moz ̵ Invincible High grade open pit and underground >2 Moz potential

• Mineral Resources: 9.2mt @ 4.50g/t for 1.33

Moz

• Mineral Reserves: 3.7mt @ 4.09g/t for 0.49

Moz

5 10 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Moz

Consistent Reserve Replacement History

Reserves Production Cumm Production

Optimisation Opportunities Neptune in production in H2 2014 - expected to underpin improved H2 2014 Invincible in production in H1 2015 – consolidate open pit mining in one higher grade pit Fast-track exploration of Invincible and Speedway Trend for life extension

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Australia Region

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Agnew / Lawlers Gold Mine A Long-Term Steady Producer With Long-Life Potential

• Orogenic style of mineralisation
• 78,547 ha of granted tenements with significant exploration

potential

• Circa 11 Moz discovered and 7 Moz produced since 1985
• Significant on-site ore reserve extension and new

exploration opportunities with potential to extend mine life beyond 10 years

̵ Lawlers

• Lateral extensions to the existing 200, 500, 600 and 700

series

• Repeat of horizontal lodes at depth
• Hidden Secret underexplored

̵ Agnew

• New discoveries in FBH and Link Drive area between

Kim and FBH

• Kath, Waroonga North,
• Depth and lateral exploration opportunities in all

directions Optimisation Opportunities High grade FBH and Link Drive area to underpin 2015 plan Shallower Kath and Waroonga North opportunities fast-tracked Cinderella “boundary pillar” between Agnew and Lawlers not explored

0.5 1 1.5 2 2.5 3 3.5 4

F2001 F2002 F2003 F2004 F2005 F2006 F2007 F2008 F2009 F2010 F2011 F2012 F2013

Million Ounces

Reserves and Production

Reserves Production Cumulative Production

RESOURCE EXTENSION & EXPLORATION

DISCOVERY

RESOURCE

3.66 Moz

RESERVE

0.95 Moz

• Extensive exploration pipeline

across combined land package

• Resource growth targeted at

600/700 Series, Kath, Hidden Secret & Cinderella

• New FBH-Link model to drive 2015

planning

2013 2019 LoM Extension Potential

LoM

~7 Moz produced since 1985

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Australia Region

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 20147

Granny Smith Gold Mine A Great Address for Significant Discoveries

• Orogenic style of mineralisation
• 61,774 ha of granted tenements with significant exploration

potential

• >20 Moz mined in the Laverton region including ~ 2.5 Moz

from Grannny Smith, ~ 8 Moz from Wallaby and ~10 Moz from Sunrise

• Significant on-site ore reserve extension and new

exploration opportunities with potential to extend mine life beyond 15 years ̵ Wallaby Underground

• Horizontal lenses repeat at depth with higher grades

̵ Lake Carey under-explored

• 2 World Class deposits on the margin of Lake Carey
• Wallaby and Sunrise Dam – analogue for Lake Le

Froy at St Ives

• No significant or systematic exploration since 2005

̵ Large tenement position with multiple targets

Optimisation Opportunities Wallaby resource conversion and exploration at depth Improved extraction ratio through potential use of paste fill CIL plant under-utilised – 50% upside

RESOURCE EXTENSION & EXPLORATION

DISCOVERY

RESOURCE

3.3 Moz

RESERVE

0.8 Moz

• Extensions to Wallaby footprint
• System potential down to Z150
• District exploration gaining traction
• New gravity circuit in 2014

2013 2020 LoM Extension Potential

LoM

~7 Moz produced since 1989

West Africa Region

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West Africa Region

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Gold Fields Ghana: Significant Potential Beyond Current Resource Life Targeting One Million Ounces at AIC Below US$1,000/oz

181.3 140.7 40.5 1,084 1,026 1,282 200 400 600 800 1,000 1,200 1,400 Region Tarkwa Damang 20 40 60 80 100 120 140 160 180 200

Q2 2014 Production and AIC By Mine

Production AIC

US$/oz Koz

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West Africa Region

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Tarkwa Gold Mine A Gold Fields Franchise Asset Generating Significant Cash

• Wits Style Paleoplacer mineralisation
• 20,825 ha of granted tenements with significant

exploration potential at existing pits and on-site

• Significant on-site ore reserve extension and new

exploration opportunities with potential to extend mine life beyond 15 years ̵ Upside potential in current pits

• Last drilled at a gold price of circa

US$400/oz ̵ Hydrothermal overlay on property

• Significant exploration targets

̵ Reserve upside resulting from structural cost reduction

Optimisation Opportunities Optimisation of Mill from 12 Mtpa to +13 Mtpa by early 2015 PPA agreement with independent third party Teberebie pillar expansion (AGA ground exchange)

RESOURCE EXTENSION & EXPLORATION

DISCOVERY

RESOURCE

10.3 Moz

RESERVE

7.3 Moz

• Very well understood ore bodies
• Exploration expanding beyond

Resource conversion

• District soil sampling project
• Blue Ridge exploration potential

2013 2030 LoM Extension Potential

LoM

~9.4 Moz produced since 1997

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West Africa Region

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Damang Gold Mine Returning to Profitability, Targeting >15% Free Cash Flow Margin

• Hydrothermal Paleoplacer mineralisation
• 25,016 ha of granted tenements
• Significant exploration potential on 30 km strike

length between Tarkwa and Damang

• Upside potential at historic satellite pits last mined

at a gold price of circa US$400/oz

Optimisation Opportunities Underway Significant reserve upside - exploration focus on 30 km strike Improved plant availability, reduced dilution, recoveries and throughput

RESOURCE EXTENSION & EXPLORATION

DISCOVERY

RESOURCE

6.6 Moz

RESERVE

1.1 Moz

• Exploration aligned to turnaround

strategy

• Extensions to active pits
• Targeting high grade hydrothermal

prospects

2013 2019 LoM Extension Potential

LoM

~4.03 Moz produced since 1997

South America Region

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South America Region

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Cerro Corona Copper/Gold Mine The Most Profitable Mine In The Group

• Cu/Au porphyry mineralisation
• 2,765 ha of mining concession
• Continued outperformance against resource model
• Upgrades to the crushing facility positively

impacting throughput of increasingly harder ore

Optimisation Opportunities Underway Future capital reduced through cancellation of TSF raise and review of cheaper alternatives Potential to increase reserves by ~ 30% through TSF and WSF

• ptionality

RESOURCE EXTENSION & EXPLORATION

DISCOVERY

RESOURCE

3.3 Moz Au 1,124 Mlb Cu

RESERVE

2.0 Moz Au 712 Mlb Cu

2013 2023 LoM Extension Potential

LoM

~2.0 Moz Au eq produced since 2008

• 2014 re-logging project to

better define Geo-metallurgy

• Upgraded crushing facility
• TSF options being assessed

to increase LoM footprint

South Africa Region

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South Africa Region

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

South Deep Project Positioning The Mine For Success in the Medium Term

Steady state production: 650 Koz to 700 Koz p.a.@ AIC of US$900/oz by the end of 2017

Destress Step Change Improved Productivity Operator & Technician Skills Fleet Availability & Utilisation Ore Handling Infrastructure

• Ground Support Programme

̵ Affected majority of production and destress areas ̵ Commenced mid-May ̵ Completed end-September ̵ Expected to provide stability for life-of-mine

• Critical interventions fast-tracked

̵ Labour refresher training ̵ Machine maintenance

• Initial review of destress mining method underway – pilot

projects being mobilised

• Long-term build-up plan remains in place
• Cash break-even expected in H1 2015

RESOURCE EXTENSION & EXPLORATION

DISCOVERY

RESOURCE

76.2 Moz

RESERVE

38.2 Moz

• Massive, multi-layered

palaeoplacer with high predictability

• Grade control and LIB drilling

continues to be effective

• Improved regional pillar

configuration being reviewed

• Pilot destress mining

2013 2087 LoM Extension Potential

LoM

~15 Moz produced since 1968

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South Deep Project

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Reviewing The Mining Method De-Risking The Build-Up Plan

• International Geotechnical Advisory Board (IGAB)
• Industry leading experts from across the globe
• Reviewed South Deep’s destress mining methodology over past seven months
• Two alternative mining methods identified
• Both methods piloted in areas outside current plan - Q4 2014 to Q4 2015
• Both are Single-pass systems compared to current three-pass system

1. 4x4 Metre Destress Method

• Increases dimensions of excavations from 2.2(high) X 5.0(wide) metre to 4.0(high) X 4.0(wide) metre
• Allows the use of conventional mining equipment as opposed to low profile equipment
• Alleviates logistical constraints and facilitate a fully mechanised mining process
• Interim step, pending decision on the Inclined Slot Method

2. Inclined Slot Method

• Entirely removes the need for conventional destress mining as destress is inherent in the new mining design
• Potential to de-risk build-up plan and future production

Conclusions

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Conclusions

Nick Holland | Denver Gold Forum | Building a Sustainable Business at US$1,300/oz Gold Price | 16 September 2014

Its All About Cash!

1. Focus on free cash flow ̵ Structural shift in cost base ̵ >15% free cash flow at a US$1,300/oz gold price ̵ No marginal mining, no high-grading, maintain cut-off grades ̵ Protect sustainability of ore bodies by investing in development and stripping 2. Reboot and deliver South Deep 3. Drive brownfields exploration 4. No greenfields exploration & projects and divest non-core assets 5. Strengthen balance sheet 6. Pay dividends

Building a Sustainable Business At US$1,300/oz Gold Price Denver Gold Forum

Nick Holland

16 September 2014