Safe and OpeRational Delivery
Key measurements - Safe operational delivery
2017 | Status | 2016 | 2015 | 2014 | 2013 | |||||||
Total Recordable Injury Frequency Rate (TRIFR) (rate per million) |
2.42 | 2.27 | 3.40 | 4.04 | 4.14 | |||||||
Fatalities | 3 | 1 | 3 | 3 | 2 | |||||||
Gold production - attributable (koz) | 2,160 | 2,146 | 2,159 | 2,219 | 2,022 | |||||||
Revenue (US$m) | 2,811 | 2,750 | 2,545 | 2,869 | 2,906 | |||||||
All-in sustaining cost (AISC) (US$/oz) | 955 | 980 | 1,007 | 1,053 | 1,202 | |||||||
All-in cost (AIC) (US$/oz) | 1,088 | 1,006 | 1,026 | 1,087 | 1,312 | |||||||
Average gold price received (US$/oz) | 1,255 | 1,241 | 1,140 | 1,249 | 1,386 | |||||||
Cost of sales before amortisation and depreciation (US$m) | 1,404 | 1,388 | 1,456 | 1,678 | 1,667 | |||||||
Headline earnings/(loss) (US$m) | 210 | 204 | (33) | 27 | (71) | |||||||
Normalised earnings (US$m) | 154 | 186 | 39 | 85 | 58 | |||||||
Net cash (outflow)/inflow (US$m) | (2) | 294 | 123 | 235 | (235) | |||||||
Free cash-flow (FCF) margin (%) | 16 | 17 | 8 | 13 | n/a | |||||||
Attributable gold production 2.16Moz |
Results and impact
|
||||||
|
Consecutive |
|||||
|
||||||
Key stakeholders | |||||
Employees | Communities | Governments | Shareholders and investors | ||
Introduction
Gold Fields has consolidated its position as a more focused, leaner business with a portfolio that is characterised by modern, fully mechanised underground and open-pit mines, as well as a number of projects that will ensure the long-term sustainability of the Company. The production base is geographically diversified with seven mines and two development projects in four regions.
Gold Fields' broader strategy is focused on cash generation and capital discipline rather than ounces for ounces' sake. This focus has enhanced the Group's ability to generate free cash-flow (FCF) and provide investors leverage to the gold price through dividends and share price performance. Our six operating mines in Ghana, Australia and Peru lived up to this mandate during 2017, with solid operational and cost performances which contributed to strong overall results for the Group.
While cash generation has remained a core attribute in all strategic decisions, management is cognisant that the sustainability of this cash generation is vital. As such, the longevity of our portfolio was addressed during 2017 through a number of investments:
- A$184m (US$141m) was spent on the Gruyere project in Western Australia. A$106m (US$81m) of this was project capital, with the bulk of the remaining A$78m (US$60m) relating to cash calls on the deferred Gruyere purchase consideration. This is a 50:50 joint venture with Gold Road Resources. See here
- US$115m in project capital was spent at our Damang mine in Ghana. See here
- Near-mine exploration spending of A$99m (US$75m) in Australia (including Gruyere) and US$11m in Ghana. See here
- US$53m investment on further exploration and drilling at Salares Norte in Chile. See here
In 2017, Gold Fields' attributable gold-equivalent production increased to 2.16Moz (2016: 2.15Moz), beating the upper end of guidance. This performance takes into account the loss of Darlot's contribution in Q4 2017 - when its sale took effect - and reflects an improved performance across the portfolio, with South Deep being the exception.
Group production overview
2018 Guidance | 2017 Actual | 2017 Guidance | 2016 Actual | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Prod (Moz) |
AIC (US$/oz) |
Prod (Moz) |
AIC (US$/oz) |
Prod (Moz) |
AIC (US$/oz) |
Prod (Moz) |
AIC (US$/oz) |
||||||||||||||
2.08 | 1,190 | 2.10 | 1,170 | ||||||||||||||||||
Group | - 2.10 | - 1,210 | 2.16 | 1,088 | - 2.15 | - 1,190 | 2.15 | 1,006 |
Central to Gold Fields' strategy of growing our margin and maximising FCF, is a relentless focus on managing costs on an all-in cost (AIC) basis. The Group recorded AIC of US$1,088/oz in 2017, which was lower than guidance (US$1,170/oz - US$1,190/oz), but higher than the US$1,006/oz recorded in 2016. The year-on-year increase in AIC was driven by the capital expenditure at Gruyere, Damang and South Deep as well as continued exploration spending at Salares Norte. Group AISC decreased to US$955/oz from US$980/oz in 2016, and was significantly lower than guidance of US$1,010/oz - US$1,030/oz.
During 2017, Gold Fields increased the capital expenditure levels deemed critical for the longevity of the portfolio. With the focus on extending the life of our ore bodies at all our international mines, Group capital expenditure increased to US$840m (2016: US$650m). This comprises sustaining capital of US$623m (including near-mine exploration of US$87m), equivalent to US$288/oz, and project capital of US$217m. Regional sustaining capital expenditure included:
- Australia: Our Australian mines decreased capital expenditure to A$423m (US$324m) in 2017 from A$431m (US$322m) in 2016, with near-mine exploration spending coming in at A$99m (US$75m) in 2017 (2016: A$102m (US$76m))
- South Africa: Sustaining capital expenditure at South Deep decreased to R874m (US$66m) in 2017 from R1,030m (US$70m) in 2016
- South America: At Cerro Corona capital expenditure declined to US$34m in 2017 from US$43m in 2016. The decrease was mainly due to lower expenditure on the construction of the tailings dam and waste storage facilities
- West Africa: Sustaining capital expenditure declined to US$198m (2016: US$206m)