Gold Fields Ltd FY 2013 financial results presentation

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Gold Fields Ltd FY 2013 financial results presentation

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Gold Fields Ltd FY 2013 financial results presentation

  1. 1. Building a Sustainable Business at US$1,300/oz Q4 2013 and 2013 Year-End Results NICK HOLLAND 13 February 2014
  2. 2. 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 occurrence of unanticipated events. Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 2
  3. 3. Q4 2013 Results Salient Features ● Attributable production up 21% to 598,000 gold equivalent ounces (Q3 2013: 496 Koz) ● AISC US$1,054/oz ● AIC US$1,095/oz ● Net cash generated pre-financing and acquisition US$38 million (Q3 2014 – US$3 million) ● Normalised earnings US$14 million (Q3 2013 US$12 million) ● H2 2013 dividend of ZAR0.22 per share, as per dividend policy ● Impairments of US$672 million as a result of lower gold price and higher discount rates Focus On Margins And Free Cash Flow Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 3
  4. 4. Q4 2013 Results Key Achievements ● Yilgarn South assets fully integrated ̵ 114,000 ounces maiden contribution ̵ AIC of US$940/oz Q4 2013 All-in Costs* (US$/oz) Damang - improved performance 1600 ̵ Production up 39% qoq to 45 Koz 1400 ̵ AIC down 27% qoq to US$1,261/oz ● 1200 1 436 Gold Price – US$ 1 265/oz 1 261 1 132 1 096 1 095 929 1000 ● South Deep - further reductions in costs ̵ AIC US$1,436/oz ̵ 35% better than Q1 2013 (US$2,223/oz) ̵ 1 091 888 800 600 10% better than Q3 2013 (US$1,599/oz ) 400 207 200 0 ● Group AIC of US$1,095/oz ̵ 26% better than Q1 2013 (US$1,476/oz) ̵ 7% better than Q3 2013 (US$1,176/oz) * Cerro Corona includes Copper credits 7 Out Of 8 Mines AIC Lower Than Gold Price (US$1,265/oz) Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 4
  5. 5. Q4 2013 Results Scorecard: Commitments Made on 22 Aug 2013 Underway Position Gold Fields To Make Cash At US$1,300/oz Gold Price Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 5
  6. 6. 2013 Results Salient Features ● Attributable production of 2.022 million gold equivalent ounces (F2012* - 2.031 Moz) ● Total cash cost US$803/oz (F2012*- US$779/oz) ● NCE US$1,146/oz (F2012* - US$1,348/oz) ● NCE margin 17% (F2012* - 19%) ● AISC US$1,202/oz (F2012* - US$1,310/oz) ● AIC US$1,312/oz (F2012* - US$1,537/oz) ● Normalised earnings US$58 million (F2012* - US$409 million) ● 2013 dividend of ZAR0.22 per share, as per dividend policy * 2012 restated to exclude discontinued operations (Sibanye Gold unbundling) A Year Of Significant Restructuring Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 6
  7. 7. 2013 Achievements Cost Trend Analysis $/oz oz 2 100 700 000 1 900 600 000 1 700 500 000 1 500 400 000 1 300 300 000 1 100 200 000 900 100 000 700 500 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2012 2012 2012 2013 2013 2013 2013 Gold Produced Gold Price AIC A Structural Shift In The Cost Base Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 7
  8. 8. 2013 Achievements US$450 Million Removed From Cost, Capital, Exploration and Project Expenditure ● Marginal mining eliminated ̵ ̵ Agnew: Rajah and Main lodes ̵ Tarkwa: South heap leach operations ● St Ives: heap leach operations Corporate, regional and operational structures rationalised ̵ ̵ 10% reduction in head count ● Fit for purpose structures ̵ Capex rationalisation and prioritisation ● 40% reduction in Capex - 2012: US$1,221 million; 2013: US$739 million Uneconomic brownfields expansions cancelled ̵ ̵ Cerro Corona Oxides and Sulphides Expansion ● Tarkwa Expansion Phase 6 ̵ General cost savings and improved efficiencies across the board ● AIC reduced by US$225/oz (15%) – 2012: US$1,537/oz; 2013: US$1,312/oz ̵ Exploration & International Projects Division closed down 42% Reduction - 2012: US$281 million; 2013: US$162 million Focus On Margin And Cash Flow Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 8
  9. 9. 2013 Achievements 2013 Cost And Production Versus Guidance 2013 Production Versus Guidance 2013 Costs Versus Guidance (Moz) (US$/oz) 1600 2.5 2 1.83 – 1.90 1.92 – 2.00 2.03 1,360 1400 1,240 1,146 1000 1.5 860 860 16% 830 1200 4% 800 1 600 400 0.5 200 0 0 27 Feb 13 Guidance 20 Nov 13 Guidance Actual Production 27 Feb 13 Guidance NCE 22 Aug 13 Guidance Actual Costs Cash Costs Delivery On Commitments Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 9
  10. 10. 2013 Achievements Geographic Distribution Of Portfolio Q4 2013 Production 13% 13% 31% 43% South Africa Ghana Australia Peru 8 Operating Mines In Four Regions Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 10
  11. 11. 2013 Achievements Balance Sheet ● Total outstanding debt US$2.06 billion ● Cash on hand US$325 million ● Net debt US$1.74 billion ● Net debt / EBITDA: 1.53 (Q4 2013 annualised) ● 49% of debt is a 10-year US$ bond (US$1.0bn), no covenants, fixed coupon of 4.875%, maturity 10/2020 ● 35% of debt (US$720m), maturity 11/2015 ● Head room circa US$750 million Conservative Debt Maturity Ladder Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 11
  12. 12. OPERATIONS REVIEW It’s not about ounces Its about cash!
  13. 13. South Deep Project Q4 2013 Production Q3 2013 2013 Production 2012 (Koz) Koz 79 82 302 270 AISC US$/oz 1,399 1,448 1,541 1,732 AIC US$/oz 1,436 1,599 1,763 2,308 2013 results in line with guidance • Gold production up 12% to 302 Koz • Destress up 24% to 53,700 m2 • 90 80 70 60 50 40 30 20 10 0 81.9 77.8 79.4 Q3 2013 Q4 2013 63.0 AIC down by 41% from US$2,436/oz in Q4 2012 to Q1 2013 Costs US$1,436/oz in Q4 2013 • Q2 2013 (US$/oz) Right-sizing of cost base continues 2300 2100 1900 2014 Guidance 1700 • Production: 360 Koz • AISC: ~US$1,290/oz (~R394,000/kg) • AIC: ~US$1,350/oz (~R412,000/kg) • Exchange rate ZAR9.50 = US$1.00 1500 1300 Q1 2013 Q2 2013 AISC Q3 2013 Q4 2013 AIC Positive Trajectory Continues Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 13
  14. 14. South Deep Project Build-up review concluded February 2014 Fleet Availability & Utilisation Operator & Technician Skills Ore Handling Infrastructure Destress Step Change Improved Productivity ● Steady state run rate by end of 2017 ̵ 300,000 to 330,000 reef tonnes per month ̵ 650 to 700 Koz of gold p.a. ̵ AIC circa US$900/oz (ZAR9.50 = US$1.00) ● Independent, external review done Build-up 12 Months Longer Than Previously Advised Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 14
  15. 15. South Deep Project Progress With Destress Mining Destress m² 80 000 Steady State circa 70,000 m2 p.a. 70 000 60 000 50 000 40 000 30 000 20 000 10 000 2011 2012 2013 Destress Doubled In Two Years Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 15
  16. 16. South Deep Project Destress Mining Progression Conventionally mined destress voids (pre 2009) Mechanised destress voids - pre 2012 Mechanised destress voids - C2012 Mechanised destress voids – C2013 2014 Plan 2015 Plan 2016 Plan 2017 Plan 4W 3W 2W 1W Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 16
  17. 17. South Deep Project Opening Up The Ore Body Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 17
  18. 18. South Deep Project Opening Up The Ore Body Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 18
  19. 19. South Deep Project Opening Up The Ore Body Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 19
  20. 20. Tarkwa Q4 2013 Production 2013 Production 2012 (Koz) Koz 160 163 632 719 US$/oz AIC • Q3 2013 1,096 1,124 1,291 1,117 Successful transition to CIL only ‒ South heap leach closed in early 2013 ‒ North heap leach closed in Dec 2013 ‒ Higher recoveries through CIL relative to heap leach • 162.9 160.0 Q3 2013 Q4 2013 Q3 2013 Q4 2013 139.2 Q1 2013 New life of mine production profile circa 500 Koz p.a. Q2 2013 Benefits of North heap closure from 2014 onwards • 180 160 140 120 100 80 60 40 20 0 170.1 2014 Guidance • Production 520 Koz • AISC & AIC: ~US$1,100/oz • Exchange rate Costs (US$/oz) 1700 1600 1500 1400 1300 1200 1100 1000 ZAR9.50 = US$1.00 Q1 2013 Q2 2013 AIC A World Class Mine Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 20
  21. 21. Damang Q4 2013 Production Q3 2013 2013 Production 2012 (Koz) 45 33 153 166 50 US$/oz AIC Koz 1,261 1,727 1,558 1,753 40 45.4 43.3 31.8 32.6 Q2 2013 Q3 2013 30 • Significant improvement in operational 20 performance in Q4 2013 10 ‒ Focussed costs control, reduced cash burn ‒ Quality selective mining, reduced dilution ‒ Improved plant availability, recoveries and 0 Q1 2013 Q4 2013 Costs (US$/oz) throughput 2014 Guidance • Production: 165 Koz • AISC & AIC: ~US$1,240/oz • Exchange rate 2400 2200 2000 1800 1600 1400 1200 1000 ZAR9.50 = US$1.00 Q1 2013 Q2 2013 Q3 2013 Q4 2013 AIC Solvency Restored Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 21
  22. 22. Damang On-lease Exploration Opportunities HUNI SADDLE PIT JUNO PIT NYAME TOMENTO NORTH & DIP EXTENSION 17km AMOANDA CHIDA REX More Than 17 Kilometre Strike Length Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 22
  23. 23. Damang The Way Forward ● 1.1 Moz Mineral Reserves @ US$1,300/oz gold price ● 6.6 Moz Mineral Resources provide significant optionality ● Focus areas 2014 ̵ Grade and dilution control ̵ Mining efficiencies ̵ Cost optimization ̵ Resource development, add satellite pits to improve flexibility and extend the life of mine ̵ Optimisation of metallurgical recoveries and maintain mill throughput ● Windfall tax off the table ● Q4 2013 performance - platform to deliver on plan Potential For A Five To Six Year Life Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 23
  24. 24. St Ives Q4 2013 Production Q3 2013 2013 (Koz) Koz 99 104 403 450 120 US$/oz AIC 1,091 1,116 1,218 1,659 100 • Significant improvement in AIC • On-site discovery leads Reserve Growth • Invincible – a significant discovery ‒ Mineral Resources*: 9.2mt @ 4.50g/t = 1.33 Moz ‒ • Production 2012 102.0 Q1 2013 Q3 2013 Q4 2013 40 20 0 Costs (US$/oz) Mineral Resources*: 5.5mt @3.3g/t = 0.58 Moz Mineral Reserves*: 2.9mt @ 3.4g/t = 319 Koz Q4 2013 60 Neptune – in production in 2014 ‒ Q3 2013 Q2 2013 99.1 80 Mineral Reserves*: 3.7mt @ 4.09g/t = 492 Koz ‒ 103.8 97.7 1300 1250 * Gold price: A$1,570/oz for Resources and A$1,370 for Reserves 1200 1150 2014 Guidance 1100 • Production 395 Koz • AISC & AIC: ~A$1,210/oz ~(US$1,150/oz) • Exchange rate US$0.95 = A$1.00 1050 1000 Q1 2013 Q2 2013 AIC Significant Reduction In Cost Base Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 24
  25. 25. St Ives Invincible Ore Body ● Large high grade open pit and potential underground operation ● 2.25 km strike length ● Wide mineable zones (up to 20m) ● 2014 Drill focus on expanding the open pit and full UG potential 2.25 km NW SE 300m 11m @ 11.2g/t 21m @ 3.0g/t Model Limit 10m @ 11.0g/t 17m @ 11.4g/t 12m @ 3.0g/t 17m @ 7.6g/t 26m @ 6.5g/t (Deepest Hole) Targeting a 2 Moz + Resource Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 25
  26. 26. St Ives Location of Invincible and Neptune Relative To Lefroy Mill • • Within Operating Radius of Existing Operations Limited to Lake Disturbance Only Within Trucking Distance From The Plant Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 26
  27. 27. Agnew/Lawlers Q4 2013 Production 2013 Production 2012 (Koz) Koz 74 45 216 177 US$/oz AIC • Q3 2013 929 842 919 1,253 Agnew/Lawlers integration well advanced ‒ Employees reduced by 14% ‒ Lawlers processing plant on care and 80 70 60 50 40 30 20 10 0 73.6 53.0 45.2 43.7 Q1 2013 Q2 2013 Q3 2013 Q4 2013 maintenance • • Significant exploration potential on combined Costs Further synergies to be realised (US$/oz) 1100 1000 site 900 800 2014 Guidance 700 • Production 260 Koz • AISC & AIC: ~A$1,170/oz ~(US$1,110/oz) • Exchange rate US$0.95 = A$1.00 600 Q1 2013 Q2 2013 Q3 2013 Q4 2013 AIC Agnew + Lawlers = Synergies Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 27
  28. 28. Agnew/Lawlers Waroonga Complex Kath Upper Rajah Main Waroonga North Kath Kim Yeoman FBH Main South Link Significant Exploration Potential Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 28
  29. 29. Agnew/Lawlers New Holland/Genesis Complex Hidden Secret New Holland Genesis Hidden Secret 200 Series Genesis 500 Series New Holland Hidden Secret Significant Exploration Potential Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 29
  30. 30. Darlot Q4 F2013 Managed production Koz US$/oz AIC • 20 1,132 Transition to Gold Fields ownership successfully completed • Significant restructuring since acquisition Site picture (AIC > A$1,600/oz pre acquisition) • Targeted brownfields exploration to establish mine life beyond existing reserves 2014 Guidance • 2014 Production 80 Koz • AISC & AIC: ~A$ 1,385/oz (~US$1,315/oz) • Exchange rate US$0.95 = A$1.00 Speedy Turnaround Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 30
  31. 31. Granny Smith Q4 F2013 Managed production Koz US$/oz AIC • 62 888 Transition to Gold Fields ownership successfully completed • Restructuring largely done • Significant exploration potential • Site picture Spare processing capacity 2014 Guidance • 2014 Production 240 Koz • AISC & AIC: ~ A$1,115/oz ~(US$1,060/oz) • Exchange rate US$0.95 = A$1.00 A World Class Mine Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 31
  32. 32. Granny Smith Wallaby Underground ● South dipping intrusives within conglomerate ● Lateral extension to all known lodes − − − − 150m – 200m apart 600m x 500m footprint Gentle to Moderate dip to the NW 5 – 10m thick lodes ● Z250/60 Stacked shear/lode system Geological model has been focused to the intrusive alteration pipe Z70 Z80 2012 Reserve – Better at Depth Zone Repetition of main lodes Z110-120+ 250/60 120 4.2 16 420 5.7 77 1,312 5.5 231 90 1,667 5.9 314 100 Z100 Koz 80 Decline approaching Z100 g/t 70 Z90 kt 215 8.1 56 View toward North and Down Significant Exploration Upside Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 32
  33. 33. Granny Smith Wallaby Underground • Z250/60 Quality ore-body, high-grade with continuity • Positive reconciliation – consistently outperforming against resource and grade control Lateral extension to all known lodes Z70 • Entering best part of the ore-body (Zones 90 and 100) Z80 • Significant upside with unused processing capacity Z90 • Mineralisation is open laterally (Zones 90 and 100) and at depth (Zone 120) Z100 • Study underway to optimize ore body extraction ratio Repetition of main lodes Z110-120+ Under Explored Asset In Highly Prospective Region Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 33
  34. 34. Cerro Corona Q4 2013 AU eq Prod Q3 2013 2013 2012 Production 79 91 317 342 US$/oz AU eq AIC Koz 707 609 713 775 100 Koz 36 45 159 170 80 US$/oz 207 (21) 206 82 60 AU only Prod AU only AIC 90.7 79.2 76.9 70.0 40 • Consistent, world class mine • Continued outperformance against resource 20 0 model • (Koz) Q1 2013 Q2 2013 Future capital reduced – Replanning of TSF • Production AU eq • AISC & AIC: Production AU only ‒ Q3 2013 Q4 2013 (US$/oz) 2014 Guidance ‒ Q4 2013 Costs raise • Q3 2013 AISC & AIC: Exchange rate 290 Koz ~US$865/oz AU equivalent 140 Koz ~US$490/oz 700 600 500 400 300 200 100 0 -100 Q1 2013 ZAR9.50 = US$1.00 Q2 2013 AIC Lowest Cost Producer In Group Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 34
  35. 35. 2014 Guidance Production AISC (Koz) AIC South Deep Project 360 US$1,290/oz US$1,350/oz Tarkwa 520 US$1,100/oz US$1,100/oz Damang 165 US$1,240/oz US$1,240/oz Cerro Corona1 290 US$865/oz US$865/oz St Ives 395 A$1,210/oz A$1,210/oz Agnew/Lawlers 260 A$1,170/oz A$1,170/oz 80 A$1,385/oz A$1,385/oz 240 A$1,115/oz A$1,115/oz 2.20 US$1,125/oz US$1,150/oz Darlot Granny Smith Group2,3 (Moz Au equivalent) Exchange rates ZAR9.50 = US$1.00 ZAR9.00 = A$1.00 1: Gold equivalent ounces. If calculated on gold only basis Group production will be 2.1 Moz at AISC of US$1,125/oz and IAC of US$1,150/oz 3 Includes project costs of US$20/oz 2 7% Increase In Production Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 35
  36. 36. Conclusions ● Gold Fields has been transformed into a global producer ● Delivery of South Deep is the top priority ● Focus on cash flow and margin – make money at current prices Nick Holland | Building a Sustainable Business at US$1,300/oz | Q4 2013 and 2013 Year-end Results | 13 February 2014 36
  37. 37. Building a Sustainable Business at US$1,300/oz Q4 2013 and Year-End Results NICK HOLLAND 13 February 2013

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