Gold Fields

2017 in review

Our focus on long-term value

The ore body dictates mining method, mine design, production scheduling and risk-return plus overall commerciality and consequently investment now in our assets will show returns over the years ahead through the replacement of production depletion, organic growth, increased flexibility and life extension. Gold Fields' investment in operating mines, projects and mergers and acquisitions has retained a strong positive outlook and has been integral to maintaining a steady year-on-year Group Mineral Resource and Mineral Reserve position, despite the numerous challenges affecting the mining industry including volatile gold prices, cost pressures and geopolitical turmoil. The key steps to driving long-term value in Gold Fields from investment in exploration and the ore body development are listed below:

Operations and growth projects update

Gold Fields reported a solid operational performance with production and cost guidance exceeded at most mines reflecting higher margins at all operations except South Deep. 2017 saw an increased level of expenditure on project capital but operational out-performance and higher prices received helped drive the internal funding of growth projects.

If South Deep's capital programme, Damang's reinvestment initiative and the Gruyere project investment are excluded, the Group's mining operations generated US$441m in 2017. This places Gold Fields in a position to take on another high capital expenditure year in 2018 as both Damang and Gruyere progress toward completion.

The year was characterised by the implementation of a number of key projects, including the Cerro Corona LoM extension project, the South Deep rebase plan, the Damang reinvestment plan and the Gruyere project. Darlot and the Arctic Platinum project (APP) were divested in line with the Group's portfolio management strategy.

Australia region		Americas region
There were a number of important developments in the region in 2017: The sale of Darlot to Red 5 was completed in October 2017 and Gold Fields now has a 19.9% shareholding in Red 5 The US$75m on-lease exploration (brownfields) programme continued to show positive results with the increase in Reserves more than offsetting depletion for the region in 2017 Mining at St Ives' Invincible underground commenced in Q4 2017. The Invincible complex continues to grow and is expected to remain a key contributor to production for several years Mine life extension at Agnew is supported by the addition of a major new take-over mining front at Waroonga North A favourable advanced scoping study on the palaeochannel project at St Ives has moved the project into pre-feasibility stage, which is expected to be accelerated in 2018 Following a positive feasibility study (FS) on Granny Smith's Wallaby Zone110/120, development to this ore body extension has been approved with Reserves growing to ~1.3Moz, extending the mine's life to 2027, with anticipated upside beyond that The Gruyere 50-50 joint venture (JV) with Gold Road Resources is investing a total US$408m in the project which is developing a new long life (13 year) open pit mine, and progress on construction continues on track for first gold in Q1 2019		The following key developments for 2017 are highlighted: Gold equivalent production at Cerro Corona increased year-on-year by 17% due mainly to higher copper prices, high gold head grades and higher gold recovery Cerro Corona's life has been extended by seven years to 2030. This is achieved by a combination of a higher density factor for the tailings plus an increase in the dam wall of the current tailings dam to 3,803m amsl, which adds two years to the existing TSF, and the in-pit tailings solution adds another five years life This extension equates to an increase in Cerro Corona Reserves of 1.4Moz equivalent and converts 80% of the Resource to Reserve The Salares Norte project in Chile has progressed into feasibility status (FS), which will be progressed in 2018

South Africa region		West Africa region
The key activities undertaken in 2017 are listed: Despite the execution of the full mining value chain being suboptimal the focus on the 'Journey to Operational Excellence' for cultural and operational improvement is gaining traction Progress was made on several technical fronts: Implementation of the mining method received support from the Geotechnical Review Board (GRB) Marginal year-on-year improvements in long-hole stoping and destress mining volumes (both plus 3%) Global stability of destress cut excavations validating the geotechnical design Extraction of secondary stopes in the older current mine Improved backfilling practices A more gradual build up to steady state production of circa 230kt/month and approximately 500koz by 2022 is now expected		The following key points summarise progress in the region in 2017: In support of the US$341m investment in Damang to extend the LoM to 2025, the mine materially outperformed, with good productivities and total material moved exceeding plan, coupled with a better than expected performance at Amoanda Tarkwa is to implement a contractor mining option in 2018 due to unsustainable wage increases, increase in operational costs as the pits get deeper and haulage distances getting longer, as well as the need to replace the ageing fleet Exploration of the Tarkwa concessions, not previously well explored, continued with several hydrothermal targets identified and scheduled for follow-up in 2018, to test full site potential outside of the current palaeoplacer resource footprint

Looking to 2018

The following key focus areas for 2018 support the company strategy regarding Mineral Resources and Reserves and are designed to leverage growth, life extension, capital discipline, reduced AIC per ounce and free cash-flow margin.

2018 operations and growth projects outlook – focus on Resource and Reserve growth

Americas

Cerro Corona life extension		Continue with the feasibility study for the in-pit tailings life extension project Focus on increased productivity, blending and sustaining capital management Increase size and scale of the mining fleet and increase mining volume rates
Salares Norte moving to maiden Reserve		Brecha Principal PFS completed in early 2017 FS with Brecha Principal and Agua Amarga, tracking for completion in 2018 Environmental impact assessment (EIA) to be submitted to Chilean authorities by April 2018

Australia

Granny Smith Resource and Reserve growth		Access to and growth of Zone 110/120, plus the extension of Zone 135 footprint Follow-up work on the Blurry BIF new discovery – Lake Carey Deliver key infrastructure projects, ventilation (VR8), chiller, paste plant and vertical development
St Ives Reserve replacement		Continued underground down dip extensions to the Invincible South ore body drilling to evaluate the greater underground potential Profile Hamlet North extension potential and progress palaeochannel project study Exploration discovery from outside of the Invincible Trend
Agnew Resource conversion		Mine life extension from Waroonga North take-over mining front – complete feasibility study Profile Kath Lower extension potential Definition of future LoM at New Holland – focus on Sheba Zone and Genesis area
Gruyere joint venture (JV) commissioning		Maintain momentum on the project construction schedule Deliver first gold in Q1 2019
Australia exploration delivery		Grow balanced project pipeline by identifying early-stage targets using a combination of geophysics and full-field aircore Priority areas are St Ives and Agnew for discovery to feed the project pipeline and drive conversion and reserve replacement (life extension)

South Africa

South Deep rebase execution

Embed the rebase plan and target steady state production by circa 2022 Complete organisational changes and grow the business culture Continue with NoW infrastructure project - crushers, conveyors and development

West Africa

Damang reinvestment		Continue tracking against the project plan (physicals and cost) Maintain momentum on waste stripping and mine Amoanda to its full potential Complete Far East tailings storage facility (FETSF) construction by Q1 2018
Tarkwa cost base		Implement contractor mining Leverage plant efficiency with gravity gold circuit and increased mill throughput
Ghana exploration delivery		Identify hydrothermal open pit opportunities at Tarkwa to provide high-grade supplementary feed Drill for potential Damang extensions at Saddle, Amoanda and Tomento Infill drilling (Huni, Saddle and DPCB), includes drilling for unconstrained Damang study