Gold Fields West Africa ALFRED BAKU Executive Vice President and - - PowerPoint PPT Presentation

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Gold Fields West Africa ALFRED BAKU Executive Vice President and - - PowerPoint PPT Presentation

d all Asanko e picture and send to back Gold Fields West Africa ALFRED BAKU Executive Vice President and Head of Region May 2019 Forward Looking Statements Certain statements in this document constitute forward looking statements


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Gold Fields West Africa

ALFRED BAKU Executive Vice President and Head of Region

May 2019

Asanko

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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

  • ccupational 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 occurrence of unanticipated events.

Forward Looking Statements

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The Operating Environment

  • The ruling New Patriotic Party (NPP) is in its 3rd year
  • Next elections in 2020
  • Permitting takes longer but usually successful
  • The 2017-18 campaign to clamp down on illegal mining

POLITICAL ENVIRONMENT

  • Ongoing Political stability
  • Focus on strengthening

existing frameworks and expanding the tax net (Tax Identification Numbers + Digital Addresses, Ghana ID Card).

  • Gold and now Oil are still

major foreign exchange earners

  • Successful exit of US$918M IMF Program: 2 Apr
  • Financial Sector Reform which started in 2018

continues

  • Private management of state owned

̵ Electricity Company ̵ Ports

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4 Source: Ghana Government

  • The USD/GHS reached an all time high of 5.60 in

March 2019. Mainly due to market speculation & Ghana’s import led economy

  • Relief so far in Q1 2019 has been brought mainly by
  • versubscribed US$3B bond issuance in March & exit
  • f the IMF Program
  • 9.2% (Feb 2019) Target: 8.0%

Inflation Rate

  • 16% (Feb 2019)

BoG Policy Rate

2018/19 Inflation Trend 2015-19 Policy Rate Trend

Fastest growing economy in Africa

2019 Growth Outlook – World Bank

  • Ghana's economy is expected to pick up strongly on the

back of Agriculture and Oil & Gas

  • 7.6% expected 2019 growth rate compared with

Government’s 7.2% projection

FX Overview

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5 Source: Ghana Chamber of Mines (2017)

  • Gold continues to account for over 90% of total mining

revenues

  • Gold Mining = 8% of national GBP
  • Dependent on its policies, Ghana is well positioned to gain

regional competitive advantage

Ghana is now the largest producer of gold in Africa

20.19% 16.87% 12.44% 8.12% 8.75% 7.42% 7.31% 5.12% 4.89% 4.65% 4.18% 0.06% Gold Fields Ghana- Tarkwa Newmont Golden Ridge Limited- Akyem Newmont Ghana Gold Limited- Ahafo AngloGold Ashanti Iduapriem Limited Chirano Gold Mines Perseus Mining (Ghana) Limited Asanko Gold Mines Abosso Goldfields Limited- Damang Golden Star Wassa Limited Golden Star Bogoso Prestea Limited Adamus Resources Limited AngloGold Ashanti Limited- Obuasi

Source: Fitch

Gold Production vs Global Gold Gold Production by company

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West Africa Region

Region consists of 2 mines Tarkwa & Damang and a JV, Asanko, all in Ghana

1 Includes 45% of Asanko Gold for August – December 2018 2 TFIFR – Total Recordable Injury Frequency Rate Injuries per 1 million hours worked, including employees and contractors 3 Net cash flow = cash-flow from operating activities less net capital expenditure, environmental payments and finance lease payments. If growth capital is excluded the numbers in US$m would have been: 2017: 179 & 2018: 149

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West Africa Region

WA Gold Produced (Oz) and All-in-cost (AIC)

200 400 600 800 1,000 1,200 1,400 1,600 100 200 300 400 500 600 700 800 900 2013 2014 2015 2016 2017 2018 2019 Gold Produced (Oz) & All-in-cost (AIC) Actual Oz Plan Oz Actual AIC Plan AIC Guidance

West Africa

200 400 600 800 1,000 1,200 1,400 100 200 300 400 500 600 700 2013 2014 2015 2016 2017 2018 2019 Gold Produced (Oz) & All-in-cost (AIC) Actual Oz Plan Oz Actual AIC Plan AIC Guidance Oz AIC

Tarkwa

500 1,000 1,500 2,000 2,500 50 100 150 200 250 2013 2014 2015 2016 2017 2018 2019 Gold Produced (Oz) & All-in-cost (AIC) Actual Oz Plan Oz Actual AIC Plan AIC Guidance

Damang

Oz AIC Oz AIC

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25 Years in Ghana

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Our Contribution and Recognition 2018 Awards Contribution to the State

1. 3.

Corporate tax and royalties

US$1.28 billion

Gold Fields Ghana Foundation spend on community development

US$60 million

2. 4.

Dividend payments to the Government

  • f Ghana

US$107.3 million

Damang Road

US$26 million

5.

Amount of money accrued to Government of Ghana from employees’ pay-as-you-earn (PAYE)

US$266.2 million

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Community Development

Gold Fields Ghana Foundation

  • 2002: Establishment of Gold Fields Trust Fund
  • 2004: Registered as Gold Fields Ghana Foundation, a

charitable non-profit organization

  • Main objective: generate funding for the development
  • f host communities
  • Funding : US$1 per ounce of gold produced + 1.5% of

profit before tax 33km Tarkwa-Damang road Apinto Government Hospital refurbishment Tarkwa T&A Park reconstruction

Key Foundation Commitments

US$60M invested in our communities, their dreams, and their future

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What are the goals we have set?

AIC of US$900/oz for the region Sustaining operations through continued investment and brownfields exploration

Meet Production & Cost Guidance Genser Energy Power Project

  • Damang Reinvestment Plan
  • M&A: Identify High Quality

Assets

  • Development Agreement
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Development Agreements

Some challenges in administration but DA provisions PREVAIL

2015: Newmont (re- negotiated) 2016: Gold Fields (new) 2018: AngloGold Obuasi (new) 2019: New DAs ??? Minerals & Mining Act, 2006 (Act 703): Stability Agreement for a period no more than 15 years Minimum US$500 Million investment for a Development Agreement (no period stated) Benefits:  No adverse effects from new enactments or actions that impose obligations  No adverse effects of subsequent changes to:  customs or other duties on inputs necessary for mining operations  Royalties, taxes, fees  Exchange controls, transfer of capital and dividend remittance

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Commissioning Tarkwa Mine - 42MW Tarkwa Rates 12US¢ / kWh Damang rates 16US¢ / kWh

Power Purchase Agreement with Genser Energy

A World Class Mine

Aug 2015 - Phase 1 Final approval PPA with Genser 1 Jan 2017– Phase 2 Commissioning Damang Mine

  • 27MW

Tarkwa Mine - 25MW Tarkwa Rates 13.5US¢ / kWh Damang rates 16US¢ / kWh 1 Jan 2018 – Phase 3 1 May 2019 – Phase 4 Commissioning NG gas pipe line to Tarkwa and Damang Mine Tarkwa Rates 10US¢ / kWh Damang rates 14US¢ / kWh 1 Aug 2019 – Phase 5 Commissioning Control Panel for Island mode option for Tarkwa Power station. Damang Power Station – Island Mode Tarkwa Mine – 42MW Power Station Damang Mine – 27MW Power Station Tarkwa Power Station - parallel with grid Gas Pipe line route to Tarkwa and Damang Length -73km Work pressure - 165bar NG Temp - 23ºC