Our priorities for the free cash-flow (FCF) we generate are:

• Strengthening the balance sheet: At the height of the growth capital cycle at the end of 2018, the Group's net debt:EBITDA (excluding lease liabilities) peaked at 1.45x. With Gruyere and Damang now at or approaching steady state, we have used the free cash generated in 2020 to reduce net debt further and strengthen our balance sheet
• Funding growth projects: Capex for the Salares Norte project in Chile is planned to total US$860m (in 2020 terms), a portion of which will be funded from cash-flow. Apart from the Salares Norte project, there is no major growth capital budgeted for the medium term
• Returning dividends to shareholders: Gold Fields has a long and well-established Dividend Policy of paying out between 25% - 35% of normalised earnings to shareholders. During 2020, Gold Fields declared a total dividend of R4.80/share, which translates to 30% of normalised earnings

Gold Fields' Hedging Policy allows for hedging to protect cash-flows, firstly, at times of significant capex, secondly, to address specific debt servicing requirements and, thirdly, to safeguard the viability of higher-cost operations. We do not enter into long-term systematic hedges, but do determine whether short-term hedging is appropriate.

Given the high levels of project capital incurred over the past three years, the Group has run an active hedging programme using short-term hedges to protect our cash-flow and balance sheet. These gold, copper, oil and foreign exchange hedges resulted in a net realised loss of US$417m in 2020.

With the project capital having largely been spent by mid-2019, the purpose of the hedging programme shifted to servicing debt, with management paying down almost US$600m during 2020 and the net debt:EBITDA ratio falling substantially below 1x. Gold Fields is generally active in the debt markets through a range of instruments to further improve the liquidity and profile of Group debt.

DEBT AND DIVIDEND TRENDS FROM 2010 TO 2020

¹Adopted the new IFRS 16 Lease accounting standard