Gold Fields

Financial Report


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Annual Financial Report including Governance Report 2018

Directors' Report

The directors have pleasure in submitting their report and the annual financial statements of Gold Fields Limited (Gold Fields or the Company) and its subsidiaries (together referred to as the Group) for the 12-month period ended 31 December 2018.


Business of the Company

Gold Fields is a globally diversified gold producer with eight operating mines in Australia, Ghana, Peru and South Africa, and a total attributable annual gold-equivalent production of approximately 2.04 million ounces (Moz). It has attributable gold Mineral Reserves of around 48.1Moz and gold Mineral Resources of around 96.6Moz. Attributable copper Mineral Reserves total 691 million pounds and Mineral Resources 4,816 million pounds.

Review of operations

The activities of the various Gold Fields operations are detailed in the Integrated Annual Report.

Financial results

The information on the financial position of the Group for the period ended 31 December 2018 is set out in the financial statements in Accounting policies. The income statement for the Group shows a loss attributable to Gold Fields shareholders of US$348m for the 12-month period ended 31 December 2018, compared with a loss of US$19m in 2017.

Compliance with Financial Reporting Standards

The consolidated financial statements have been prepared in accordance with the International Accounting Standards Board, the South African Institute of Chartered Accountants (SAICA) Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, as well as the requirements of the South African Companies Act No 71 of 2008 (as amended) (Companies Act).


The abbreviated name under which the Company is listed on the Johannesburg Stock Exchange Limited (JSE) is GFIELDS and the short code is GFI. The Company also has a secondary listing on the following stock exchanges: New York Stock Exchange (NYSE) and the SIX Swiss Exchange.

At 31 December 2018, the Company had in issue, through The Bank of New York Mellon on the NYSE, 388,735,882 American Depository Receipts (ADRs) (31 December 2017: 350,110,923). Each ADR is equal to one ordinary share.


Composition of the Board

The Board currently consists of two executive directors and nine non-executive directors (NEDs). At the May 2018 Annual General Meeting (AGM), Don Ncube retired from the Board and as the Chairperson of the Social, Ethics and Transformation (SET) Committee. Subsequently, Carmen Letton was appointed the Chairperson of the SET Committee at the 2018 AGM. In September 2018, Phuti Mahanyele-Dabengwa joined the Board as an independent NED.

Rotation of directors

Directors retiring in terms of the Company’s Memorandum of Incorporation (MoI), all of whom are eligible and offer themselves for re-election, are Phuti Mahanyele-Dabengwa, Paul Schmidt, Alhassan Andani, Peter Bacchus and Carmen Letton, all of whom are eligible and offer themselves for re-election.

The Board of Directors of various subsidiaries of Gold Fields comprise some of the executive officers and one or both of the executive directors, where appropriate, as well as NEDs of Gold Fields.

Directors’ and officers’ disclosure of interests in contracts

During the period under review, no contracts were entered into in which directors and officers of the Company had an interest and which significantly affected the business of the Group.

For the year ended 31 December 2018, the directors’ beneficial interest in the issued share capital and listed share capital of the Company (see table below) was 0.202%. No one director individually exceeded 1% of the issued share capital or voting control of the Company.

Share ownership of directors and executive officers

  Direct1 Indirect2
  31-Dec-18   31-Dec-17   31-Dec-18   31-Dec-17  
Nick Holland 610,877   610,877   916,090   916,090  
Paul Schmidt 122,549   122,549      
Cheryl Carolus 3,129   3,129      
Richard Menell 5,850   5,850      
Steven Reid        
Alhassan Andani        
Carmen Letton        
Terence Goodlace        
Peter Bacchus        
Yunus Suleman        
Phuti Mahanyele-Dabengwa        
Prescribed Officer                
Naseem Chohan 42,023   42,023   4,298    
Brett Mattison 43,103   43,103      
Taryn Harmse 16,302   16,302      
Alfred Baku 40,404   40,404      
Avishkar Nagaser     11,168    
Martin Preece 32,500        
Luis Rivera        
Richard Butcher        
Stuart Mathews        
Rosh Bardien3        
Total 916,737   884,237   931,556   916,090  
1 Direct ownership - shares owned outright; includes personal investment shares (excluding Nick Holland). Subject to tax gross-up at top marginal rate of individual taxation for Minimum Shareholder Requirement purposes
2 Indirect ownership - restricted shares, not grossed-up for taxes
3 Rosh Bardien appointed 1 February 2018

Related party information is disclosed on p203 to 204 of the Annual Financial Report.

Financial affairs

Dividend policy

The Company’s dividend policy is to declare an interim and final dividend of between 25% and 35% of its normalised earnings (as set out in the dividend policy). On 15 February 2019, the Company declared a final cash dividend number 89 of 20 South African cents per ordinary share (2018: 50 South African cents) to shareholders reflected in the register of the Company on 15 March 2019. The dividend was declared in the currency of the Republic of South Africa. This dividend was paid on 18 March 2018. The dividend resulted in a total dividend declared of 40 South African cents per share for the year ended 31 December 2018 (2017: 90 South African cents), with the final dividend being accounted for in 2019.

Borrowing powers

In terms of the provisions of Section 19(1) of the Companies Act, read together with Clause 4 of the Company’s MoI, the borrowing powers of the Company are unlimited. As at 31 December 2018, the Company’s net debt totalled US$1,612m, compared to total borrowings of US$1,303m at 31 December 2017.

Capital expenditure

Capital expenditure for the year ended 31 December 2018 amounted to US$814m compared with US$834m for 2017. Estimated capital expenditure for 2019 is US$633m and is intended to be funded from internal sources and, to the extent necessary, borrowings.

Significant announcements in 2018

Sale of Arctic Platinum Project (APP) to CD Capital

24 January 2018

Gold Fields announces the sale of its polymetallic APP in northern Finland to London-based private equity fund CD Capital Natural Resources for US$40m in cash along with a royalty on future production.

Tarkwa mine transitions to contractor mining

8 March 2018

Gold Fields Ghana begins the transition from owner mining to contractor mining at its Tarkwa gold mine. About 1,850 employees are affected by the transition. As per an agreement between Gold Fields Ghana and the two contractors, about 85% of employees are re-engaged by the contractors.

Joint venture with Asanko Gold in Ghana

29 March 2018

Gold Fields agrees to acquire a 50% stake in Asanko Gold Ghana’s 90% interest in the Asanko Gold mine, a multi-deposit complex, with two main deposits, Nkran and Esaase. The purchase consideration comprises an upfront payment of US$165m and a deferred payment of US$20m. In addition, Gold Fields subscribes to a 9.9% share placement in the holding company Toronto Stock Exchange-listed Asanko Gold. The transaction is completed on 31 July 2018.

Notification of change in auditor

23 July 2018

After a formal tender process, Gold Fields appoints PricewaterhouseCoopers Inc (PwC) as its new external auditors to replace KPMG on conclusion of its responsibilities relating to the 31 December 2018 financial year audit, expected in April 2019.

South Deep restructuring and trading statement

14 August 2018

Gold Fields announces the restructuring of its South Deep operation, aimed at consolidating mining activity to increase focus and to match the cost structure to the current level of performance. As part of the restructuring management commences with consultations in terms of Section 189 of the Labour Relations Act with its two trade unions, the National Union of Mineworkers (NUM) and UASA (formerly named the United Association of South Africa). It is envisaged that approximately 1,100 permanent employees could potentially be impacted by the proposed restructuring.

Gold Fields appoints new non-executive director

28 August 2018

Gold Fields announces the appointment of Phuti Mahanyele-Dabengwa as an independent NED to the Board of Directors of Gold Fields with effect from 1 September 2018.

Gold Fields top South African mining company on Dow Jones Sustainability Index (DJSI)

13 September 2018

Gold Fields is again ranked the top South African mining company on the prestigious DJSI benchmarking database. Gold Fields is ranked fourth among around 60 mining companies assessed, and the third best global gold company.

NUM commences strike notice at South Deep

2 November 2018

The NUM embarks on a protected strike at South Deep to protest planned retrenchments at the mine. About 80% of the mine’s workforce are members of the union and the 45-day strike stops all production at the mine.

South Deep and NUM reach agreement to end strike action

18 December 2018

Gold Fields reaches agreement with the national and regional offices of the NUM to officially end the strike at South Deep, after having called an end to the strike five days earlier. In terms of the agreement, the retrenchments of 1,082 employees and 420 contractors goes ahead.

Going concern

The financial statements have been prepared using appropriate accounting policies, supported by reasonable judgements and estimates. The directors have reasonable belief that the Group has adequate resources to continue as a going concern for the foreseeable future.

Dematerialisation of the shares

Shareholders are reminded that, as a result of the clearing and settlement of trades through STRATE, the Company’s share certificates are no longer good for delivery for trading. Dematerialisation of the Company’s share certificates is a prerequisite when dealing in the Company’s shares.


The register of property and mineral rights is available for inspection at the registered office of the Company during normal business hours.

Occupational healthcare services

Occupational healthcare services are made available by Gold Fields to employees in South Africa from its existing facilities. There is a risk that the cost of providing such services could increase in the future, depending upon changes in the nature of underlying legislation or relevant court rulings, such as the ruling by the Gauteng High Court in 2016 in favour of a class action suit brought on behalf of ex-mineworkers and current mineworkers suffering from silicosis and tuberculosis, among others. The Company is monitoring developments and has already taken comprehensive action in this regard. For more details see Contingent Liabilities.

Environmental obligations

The Company’s total gross closure liability for environmental rehabilitation costs amounted to US$400m at 31 December 2018 compared with US$381m at 31 December 2017. The regional gross closure liabilities are as follows:

  • Australia: US$178m
  • South Africa: US$42m
  • Peru: US$79m
  • Ghana: US$101m

The funding methods used by each region to make provision for the mine closure cost estimates are:

  • Australia – existing cash and resources
  • South Africa – contributions into environmental trust funds and guarantees
  • Peru – bank guarantees
  • Ghana – reclamation security agreement bonds underwritten by banks along with restricted cash

Contingent liabilities and litigation

A Material Group Litigation Report is presented at each Audit Committee meeting for discussion and consideration on whether the matter remains contingent or whether a provision has to be recognised. Details of Gold Fields contingent liabilities and litigation matters can be found in note 35 to the financial statements.


The office of Company Secretary of Gold Fields was held by Lucy Mokoka for the period under review.

Computershare Investor Services (Pty) Limited are the Company’s South African transfer secretaries and Link Asset Services are the United Kingdom registrars of the Company.


The Audit Committee has recommended to the Board that PwC be appointed as the external auditors of the Company, until the conclusion of the next AGM, in accordance with Section 90(1) of the Companies Act.

KPMG's appointment as external auditors will end on conclusion of its responsibilities relating to the 31 December 2018 financial year audit, which is expected to be concluded on or about the middle of May 2019, and PwC’s appointment as external auditors will be effective immediately after KPMG’s appointment concludes, subject to shareholder approval at the AGM for the year ending 31 December 2018.

Subsidiary companies

Details of major subsidiary companies in which the Company has a direct or indirect interest are set out on major group investments – direct and indirect.