Picture Creating A New South African Gold Mining Champion C ti A N S th Af i G ld Mi i Ch i Nick Holland Ni k H ll d N Neal Froneman l F Chief Executive Officer Chief Executive Officer Designate Gold Fields Limited Sibanye Gold 29 November 2012
Disclaimers Certain statements included in this presentation, as well as oral statements that may be made by Gold Fields, or by officers, directors or employees acting on their behalf related to the subject matter hereof, constitute or are based on forward-looking statements. Forward-looking statements are preceded by, followed by or include the words “may”, “will”, “should”, “expect”, “envisage”, “intend”, “plan”, “project”, “estimate”, “anticipate”, “believe”, “hope”, “can”, “is designed to” or similar phrases. These forward- “ i ” “ i i ” “b li ” “h ” “ ” “i d i d ” i il h Th f d looking statements involve a number of known and unknown risks, uncertainties and other factors, many of which are difficult to predict and generally beyond the control of Gold Fields or Sibanye Gold, that could cause Gold Fields' and/or Sibanye Gold’s actual results and outcomes to be materially different from historical results or from any future results expressed or implied by such forward-looking diff t f hi t i l lt f f t lt d i li d b h f d l ki statements. Such risks, uncertainties and other factors include, among others, Gold Fields’ ability to successfully complete the proposed transaction, the effect of the distribution on Gold Fields’ and Sibanye Gold’s operations, Gold Fields’ and Sibanye Gold’s ability to implement its strategy and any changes thereto, Gold Fields’ and Sibanye Gold’s future financial position and plans, strategies, h th t G ld Fi ld ’ d Sib G ld’ f t fi i l iti d l t t i objectives, capital expenditures, projected costs and anticipated cost savings and financing plans, as well as projected level of gold price and other risks. 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 presentation or to reflect any change in Gold Fields and/or Sibanye Gold’s ft th d t f thi t ti t fl t h i G ld Fi ld d/ Sib G ld’ expectations with regard thereto. Gold Fields Limited | Creating Two New South African Gold Champions | 29 November 2012 Page 2
Investors expect us to deliver leverage to the gold price However we have not met their expectations However, we have not met their expectations… Note: Data indexed to 13 January 2006; index made up of 8 major gold producers’ total return indexes weighted by market capitalisation; Major Gold producers defined as: AngloGold Ashanti, Barrick, Harmony, Kinross, Goldcorp, Gold Fields, Newmont and Newcrest Source: Bloomberg This has necessitated a review of the portfolio Gold Fields Limited | Creating Two New South African Gold Champions | 29 November 2012 Page 3
Initial outcomes of the portfolio review Two categories of assets each requiring a different approach Two categories of assets, each requiring a different approach Deep Level, Narrow Vein, Tabular Ore Other Ore Bodies Bodies Composition Composition South Deep, Tarkwa, Damang, St Ives, KDC, Beatrix mine (GFIMSA) Agnew, Cerro Corona Type Of Mining T Of Mi i Type Of Mining Deep level, narrow vein, tabular ore bodies, Mechanised mining underground operations Capex Capex Capex Mature life stage Earlier life stage Focus on delivery of stable profitable Growth and life extension p production Exploration Exploration Little or no exploration Life extension, growth, capital beyond Largely sustaining capex sustaining Tailings Project LIBERATE GFIMSA Manage mature assets (KDC and Beatrix) separately g ( ) p y in a fit for purpose sustainable, longer-life, lower cost model Gold Fields Limited | Creating Two New South African Gold Champions | 29 November 2012 Page 4
Liberating GFIMSA We need a new approach e eed a e app oac KDC BEATRIX 1 800 1 800 2 500 2 500 600 600 1 800 1 800 1 600 1 600 500 2 000 1 400 1 400 1 200 400 1 200 1 500 1 000 /oz 1 000 Koz oz oz 300 300 Ko $/ K 800 $/ 800 1 000 600 200 600 400 500 400 100 200 200 ‐ ‐ ‐ ‐ Production (Koz) Gold Price ($/oz) NCE ($/oz) Production (Koz) ( ) Gold Price ($/oz) ($/ ) NCE ($/oz) ($/ ) * Year to date: 30 September 2012 If we stay as we are the production decline is inevitable with consequential impact . on jobs, tax & royalty revenues j b t & lt A focussed management on its own will drive these assets up the value curve WE NEED TO BREAK THE TREND Gold Fields Limited | Creating Two New South African Gold Champions | 29 November 2012 Page 5
Liberating GFIMSA Significant investor pressure to create focussed, fit for purpose, smaller companies Significant investor pressure to create focussed fit for purpose smaller companies GFI Share Distribution GFI Share Distribution September 2010 September 2012 3.20% 3.40% 15.60% 23.67% 23.51% 23 51% 34 00% 34.00% 47.00% 49.96% South Africa Americas Rest of the World Europe Investors are demanding alternative investment choices If we do not provide them there is a risk of a lack of liquidity and further stock price deterioration, which will lead to a lack of funding capacity A separate company will create a new access point for a new breed of high quality investor who is prepared to make the trade-offs for the high yield and long life offered by the GFIMSA assets Gold Fields Limited | Creating Two New South African Gold Champions | 29 November 2012 Page 6
Liberating GFIMSA Unlocking value - peer comparison U oc g a ue pee co pa so Harmony GFIMSA Market Capitalisation R bn 30.9 19.0* Net debt R bn 0.1 4.0 Wafi Golpu Enterprise value R bn 7.8 - Enterprise value adjusted for Wafi Golpu R bn 23.0 23.0 # # H1 2012 Production Koz 551.1 688.1 H1 2012 Cash Costs H1 2012 Cash Costs US$/oz US$/oz 1 134 1,134 993 993 H1 2012 Cash +Capital costs (NCE) US$/oz 1,467 1,254 * Proforma market cap assuming market affords GFIMSA the same EV as to Harmony’s South African assets * P f k t i k t ff d GFIMSA th EV t H ’ S th Af i t # Median consensus EV for GFIMSA R13.5bn Source: Bloomberg, company reports, market reports Gold Fields Limited | Creating Two New South African Gold Champions | 29 November 2012 Page 7
Liberating GFIMSA G GFIMSA - amongst the largest domestic gold producers in SA S a o gst t e a gest do est c go d p oduce s S Gold Production H1 2012 (Ounces)* 800 000 800 000 700 000 600 000 600 000 500 000 400 000 400 000 300 000 200 000 100 000 0 GFIMSA AngloGold Harmony DRD Pan African Resources * Source – company reports, H1 2012 production Gold Fields Limited | Creating Two New South African Gold Champions | 29 November 2012 Page 8
Liberating GFIMSA Rationale Rationale Creating Two Proudly South African Gold Mining Companies GFI portfolio has competing asset types - base load, growth and mature assets Each with dedicated management, funding, technology and skills requirements Sibanye Gold on a 10 year declining trend despite inherent quality and extensive Sibanye Gold on a 10-year declining trend despite inherent quality and extensive reserve & resource and life potential Sibanye Gold’s mature operations not competitive in expansion-focussed GFI Sib G ld’ t ti t titi i i f d GFI Sibanye Gold’s own needs secondary to investment intensive growing portfolio and d developing South Deep l i S th D Both companies domiciled in South Africa with primary listings on the JSE and secondary listings on the NYSE primary listings on the JSE and secondary listings on the NYSE Gold Fields Limited | Creating Two New South African Gold Champions | 29 November 2012 Page 9
Liberating GFIMSA Rationale Rationale Long-term sustainability of labour intensive operations Create fit-for-purpose, sustainable, long-life operations Install a specialist dedicated and focussed management team Install a specialist, dedicated and focussed management team Ring-fence SA cash flows for SA projects and dividends Reverse declining production trends Optimise extraction of reserves & resources and extend life of mines Optimise extraction of reserves & resources and extend life of mines Harness technology for challenges of deep level, hard rock, labour intensive mining Align all employees with sustainable outcomes through profit-sharing plans Act as catal st for consolidation in SA gold ind str Act as catalyst for consolidation in SA gold industry Gold Fields Limited | Creating Two New South African Gold Champions | 29 November 2012 Page 10
Recommend
More recommend
