Profitable production and sustainable cash

GOLD FIELDS 2021 BSC KPIs

Increase FCF per ounce at a set gold price
Eliminate fatalities, serious injuries and environmental incidents in our business
Improve innovation and technology
Improve South Deep people and processes
Future strategy decision with regard to Asanko to be made by August 2021

Trade-offs

Our trade-offs refer to the difficult decisions made during the year in the context of resource scarcity. Below are some of the significant actions taken during a difficult year to do so:

We will not mine if we cannot mine safely, which means that occasionally we do not mine profitable ore bodies
Setting conservative gold prices for planning purposes restricts the scope of our operations
Benefits of higher gold prices on our operations are, in part, offset by rising mining costs
Increased investment in modernisation and automation will lead to declining employee numbers
Ensuring the sustainability of South Deep requires constant focus on workforce optimisation

Overview

The gold mining industry was uniquely challenged during 2020. As the Covid-19 pandemic swept across the globe, we had to adapt and enforce substantial changes to our operating protocols. Spearheaded by our regional leadership teams, Gold Fields responded swiftly in establishing the necessary protocols, procedures and practices to mitigate the impacts of
Covid-19 and keep our people safe. Strict adherence to government protocols and rigorous Covid-19 testing of all site-based employees were swiftly rolled out across the Group.

In Australia, we adjusted rosters and amended flight schedules to limit travel and reduce interaction between employees. At Cerro Corona in Peru, we initially extended shift cycles in response to a nationwide curfew, while also constructing additional accommodation facilities to enable social distancing.

Our Cerro Corona and South Deep operations were the most impacted by the pandemic during 2020. In compliance with the government-imposed lockdown towards the end of March, we placed South Deep on care and maintenance for the first four weeks of Q2 2020. At the end of April, as South Africa eased the lockdown restrictions, South Deep could resume mining activities, albeit at 50% of its full labour complement. This continued until the end of May, when our workforce gradually ramped up to its full complement. In all, South Deep lost approximately 52 days of operation.

In Peru, a curfew was imposed on 16 March, which entailed strict intra-provincial and international travel restrictions. Mining was declared an essential industry, and Cerro Corona could continue to operate largely as normal until mid-April, when the mine was restricted to 30% of its workforce. The labour complement gradually increased from the end of April and was back at full capacity during October 2020. Lost production from Covid-19-related stoppages and restrictions during 2020 amounted to approximately 32koz at South Deep and 46koz at Cerro Corona. For more information on the impacts of Covid-19, refer to Developing a fit-for-purpose workforce and Value creation for stakeholders.

The combination of our strong operational performance and the higher gold price during the year enabled the Group to contain the impacts of Covid-19 and post a solid set of results in 2020, comfortably meeting our underlying goal of generating a FCF margin of 15% at a gold price of US$1,300/oz.

Despite the Covid-19 restrictions, Gold Fields' attributable gold-equivalent production increased by 2% to 2.236Moz in 2020 (2019: 2.195Moz), within revised guidance of
2.200Moz – 2.250Moz. We revised original guidance of 2.275Moz – 2.315Moz in April 2020 to account for the impact of Covid-19 on our operations – particularly South Deep and Cerro Corona.

Group AIC increased marginally in 2020 to US$1,079/oz (2019: US$1,064/oz), which was within revised guidance of US$1,070/oz – US$1,090/oz. The year-on-year increase in AIC was driven by higher cost of sales before amortisation and depreciation, higher sustaining capex and higher royalties, partially offset by higher level of gold sold and lower non-sustaining capex. Group AISC for the year totalled US$977/oz (2019: US$897/oz), again within revised guidance of US$960/oz – US$980/oz. Covid-19-related costs amounted to US$26m in 2020, equal of US$12/oz, and are included in Group AIC and AISC.

During 2020, Gold Fields maintained the capex levels we believe are important to ensure the longevity of our portfolio. Total capex (excluding Asanko) decreased to US$584m in 2020 from US$613m in 2019. This comprised sustaining capex of US$409m and project capex of US$175m.

Regional capex included:

Americas: At Cerro Corona, capex decreased by 11% to US$50m in 2020 from US$56m in 2019, mainly due to the impact of Covid-19 restrictions on construction activities. We spent capex of US$97m on Salares Norte during 2020, as capitalisation of project spend began on 1 April 2020
Australia: Our Australian mines decreased capex to A$319m (US$220m) in 2020 from A$458m (US$319m) in 2019, with near-mine exploration amounting to A$72m (US$50m) in 2020 (2019: A$84m (US$58m))
South Africa: As previously guided, total capex at South Deep increased by 68% year-on-year to R804m (US$49m) in 2020 from R479m (US$33m) in 2019. This increase was driven by the purchase of new equipment and the recommencement of development in the new mine area
West Africa: Total capex (excluding Asanko) decreased to US$167m in 2020 from US$202m in 2019, driven by a decrease in waste tonnes mined at Damang

Group operational performance

	2021 Guidance		2020 Actual		2020 Guidance (revised)		2019 Actual
	Prod	AIC	Prod	AIC	Prod¹	AIC	Prod	AIC
Group	2.30Moz – 2.35Moz	US$1,310/oz – US$1,350/oz	2.24Moz	US$1,079/oz	2.20Moz – 2.25Moz	US$1,070/oz – US$1,090/oz	2.20Moz	US$1,064/oz

Regional performances

South Africa region

	2021 Guidance		2020 Actual		2020 Guidance		2019 Actual
	Prod	AIC	Prod	AIC	Prod¹	AIC	Prod	AIC

South Deep	9,000kg (289koz)	R660,000/kg (US$1,320/oz)	7,056kg (227koz)	R663,635/kg (US$1,260/oz)	7,000 (225koz)	R610,000/kg (US$1,394/oz)	6,907kg (222koz)	R585,482/kg (US$1,259/oz)

¹ Original guidance revised to take account of Covid-19 lockdown

After a good start to 2020, South Deep was placed on care and maintenance for the first four weeks of Q2 2020 in compliance with government-imposed Covid-19 restrictions. South Deep operated well below its full labour complement for the remainder of Q2 2020. Our workforce gradually ramped up to its full complement during Q3 2020 and early Q4 2020. As such, most of the impact of Covid-19 was felt during H1 2020, with the mine recovering well in H2 2020.

Gold production increased by 2% to 7,056kg (227koz) from 6,907kg (222koz) in 2019, which was marginally ahead of revised guidance of 7,000kg (225koz). Had it not been for disruptions relating to Covid-19, South Deep would have exceeded its original production guidance of 8,000kg (257koz). It is estimated that South Deep lost approximately 32koz due to Covid-19-related stoppages in 2020, which was partially offset by 10 additional production days as a result of the change in production calendar.

AISC increased by 11% to R651,514/kg (US$1,237/oz) in 2020 from R585,482/kg (US$1,259/oz) the previous year, while AIC increased by 13% to R663,635/kg (US$1,260/oz) from R585,482/kg (US$1,259/oz) due to higher cost of sales before amortisation and depreciation, as well as higher capex, which was partially offset by higher gold sold.

Encouragingly, South Deep generated net cash-flow of R558m (US$34m) in 2020, more than double the R221m (US$15m) recorded in 2019.

2021 guidance:

Gold production: 9,000kg (289koz)
Destress: 48,370m²
Development: 9,067m
Capex: R1,234m (US$79m), of which R889m (US$57m) is sustaining capex and R345m (US$22m) is growth capex
AISC: R620,000/kg (US$1,240/oz)
AIC: R660,000/kg (US$1,320/oz)

Americas region

Production overview	2021 Guidance	2020 Actual	2020 Guidance	2019 Actual

Gold-only production	130koz	119koz	158koz	156koz
Copper production	24.7kt	24.9kt	27.5kt	31kt
Gold-equivalent production	220koz	207koz	275koz	293koz
AIC	US$1,060/oz	US$715/oz	US$575/oz	US$472/oz
AIC eq-oz	US$1,190/oz	US$1,119/oz	US$830/oz	US$810/oz

From a production perspective, our Cerro Corona mine in Peru was the most impacted by Covid-19 across the Group. Gold-equivalent production decreased by 29% to 207koz in 2020 from 293koz in 2019, due to lower copper grades processed, together with a lower price factor. The price factor was 3.5 in 2020 compared with 4.4 in 2019. It is estimated that Cerro Corona lost approximately 46koz due to Covid-19-related stoppages and 22koz due to the lower price factor, partially offset by 10 additional production days as a result of the change in the production calendar in 2020.

Consequently, total AIC on a gold-equivalent basis increased by 38% to US$1,119/oz from US$810/oz in 2019. This increase was primarily due to the lower equivalent ounces sold and additional Covid-19 related expenditure, partially offset by lower cost of sales before amortisation and depreciation and lower capital expenditure.

Despite the Covid-19 challenges, the region reported net cash-inflow of US$84m during 2020, in line with the US$86m generated in 2019.

2021 guidance:

Gold only production: 130koz
Copper production: 24.7kt
Gold-equivalent production: 220koz
Capex: US$58m
AISC (Au-eq): US$1,030/oz
AIC (Au-eq): US$1,190/oz
AISC: US$780/oz
AIC: US$1,060/oz

Details of the construction progress of our Salares Norte project are on Creating a global, sustainable portfolio.

Australia region

	2021 Guidance		2020 Actual		2020 Guidance		2019 Actual
	Prod	AIC	Prod	AIC	Prod	AIC	Prod	AIC

St Ives	360koz	A$1,410/oz (US$1,060/oz)	385koz	A$1,266/oz (US$873/oz)	360koz	A$1,320/oz US$910/oz)	371koz	A$1,385/oz (US$963/oz)
Agnew	240koz	A$1,625/oz (US$1,220/oz)	233koz	A$1,528/oz (US$1,053/oz)	225koz	A$1,440/oz (US$995/oz)	219koz	A$1,656/oz (US$1,152/oz)
Granny Smith	265koz	A$1,600/oz (US$1,200/oz)	270koz	A$1,465/oz (US$1,010/oz)	265koz	A$1,415/oz (US$975/oz)	275koz	A$1,325/oz (US$922)
Gruyere (50%)	140koz	A$1,330/oz (US$1,000/oz)	129koz	A$1,350/oz (US$931/oz)	135koz	A$1,150/oz (US$795/oz)	50koz	A$4,170/oz (US$2,900/oz)
Region	1,005koz	A$1,500/oz (US$1,125/oz)	1,017koz	A$1,388/oz (US$957)	985koz	A$1,350/oz (US$932/oz)	914koz	A$1,418/oz (US$986/oz)

Gold Fields' Australian operations delivered another strong operational performance in 2020, surpassing the 1Moz annual production level for the first time since 2015. Gold production increased by 11% to 1,017koz in 2020 from 914koz in 2019, with Gruyere contributing for the full year in 2020. AIC decreased by 2% to A$1,388/oz (US$957/oz) in 2020 from A$1,418/oz (US$986/oz) in 2019, but was slightly higher than guidance of A$1,350/oz (US$932/oz).

Capex decreased by 30% to A$319m (US$220m) in 2020 from A$458m (US$319m) in 2019, due to reduced spending on Gruyere, a decrease in development at the Invincible and Hamlet North underground operations at St Ives, and the high level of expenditure on the new accommodation village at Agnew in 2019. Capex includes near-mine exploration expenditure of A$72m (US$50m), lower than the A$84m (US$58m) spent in 2019.

The Australia region reported net cash-inflow of A$723m (US$498m) in 2020 compared with A$199m (US$139m) in 2019.

Mine performances

At St Ives, Invincible Underground, Hamlet Underground and the Neptune open pit are now the main sources of ore. Production increased by 4% to 385koz in 2020 from 371koz in 2019, 7% above guidance of 360koz. AIC decreased by 9% to A$1,266/oz (US$873/oz) in 2020 from A$1,385/oz (US$963/oz) in 2019, mainly due to lower capex and increased gold sold, partially offset by higher cost of sales before amortisation and depreciation and higher royalty tax.

Capex decreased by 25% to A$107m (US$74m) in 2020 from A$141m (US$98m) in 2019 due to reduced development of the Invincible South and Hamlet North underground mines during 2020.

St Ives generated net cash-flow of A$383m (US$264m) (pre-tax) for the year.

A review of the mine's brownfields exploration activity in 2020 is in Creating a global, sustainable portfolio.

2021 guidance:

Gold production: 360koz
Capex: A$129m (US$97m), of which A$110m (US$83m) is sustaining capex and A$19m (US$14m) non-sustaining capex
AISC: A$1,360/oz (US$1,020/oz)
AIC: A$1,410/oz (US$1,060/oz)

At Agnew, gold production increased by 6% to 233koz in 2020 from 219koz in 2019 – 4% higher than guidance of 225koz. AIC decreased by 9% to A$1,528/oz (US$1,053/oz) in 2020 from A$1,656/oz (US$1,152/oz) in 2019 due to lower capex and increased gold sold, partially offset by increased cost of sales before amortisation and depreciation and higher royalty tax.

Capex decreased by 31% to A$75m (US$52m) in 2020 (2019: A$109m (US$76m)) driven by a 79% decrease in non-sustaining capex to A$12m (US$9m) in 2020 from A$58m (US$41m) in 2019. Additional capex of A$32m (US$22m) was incurred in 2019 to establish the new accommodation village, together with A$5m (US$3m) on the development of the Waroonga North decline. In addition, spending on exploration drilling reduced by A$6m (US$4m) from 2019.

We concluded the second stage of the electricity supply project, with EDL commissioning the 13MW battery plant in March 2020 and the 18MW wind farm in May 2020. More than 50% of Agnew's energy needs are now generated from renewable and low-carbon sources. The microgrid consists of a 23MW power station which integrates solar with gas, diesel generation, a new battery plant and the wind farm. It is owned and operated by EDL, who will recoup its investment via an electricity supply agreement with Agnew.

Agnew generated net cash-flow of A$192m (US$132m) (pre-tax) in 2020 compared with A$16m (US$11m) in 2019.

A review of the mine's brownfields exploration activity in 2020 is in Creating a global, sustainable portfolio.

2021 guidance:

Gold production: 240koz
Capex: A$113m (US$85m), of which A$72m (US$54m) is sustaining capex and A$41m (US$31m) non-sustaining capex
AISC: A$1,450/oz (US$1,090/oz)
AIC: A$1,625/oz (US$1,220/oz)

At Granny Smith, production decreased by 2% to 270koz in 2020 from 275koz in 2019, but was 2% ahead of guidance for the year of 265koz.

AIC increased by 11% to A$1,465/oz (US$1,010/oz) in 2020 from A$1,325/oz (US$922/oz) in 2019. With the mining of deeper ore zones, we incurred additional cost relating to paste fill, support and hauling. Furthermore, we incurred additional contractor labour costs, as well as employee flight and accommodation costs, during 2020 due to Covid-19-related restrictions. Royalty tax was also higher than 2019 as a result of the higher gold price received.

Capex decreased by 7% to A$96m (US$66m) in 2020 from A$104m (US$72m) in 2019 due to decreased exploration drilling costs during the year. The mine generated net cash-flow of A$224m (US$155m) (pre-tax) in 2020 compared with A$134m (US$93m) in 2019.

A review of the mine's brownfields exploration activity in 2019 is in Creating a global, sustainable portfolio.

2021 guidance:

Gold production: 265koz
Capex: A$147m (US$110m), of which A$116m (US$87m) is sustaining capex and A$31m (US$23m) non-sustaining capex
AISC: A$1,475/oz (US$1,110/oz)
AIC: A$1,600/oz (US$1,200/oz)

At Gruyere, gold production increased by 161% to 258koz in 2020, the mine's first full year of production, from 99koz in 2019. Gruyere commenced production in June 2019 and achieved commercial production at the end of September 2019.

AIC decreased by 68% to A$1,350/oz (US$931/oz) in 2020 from A$4,170/oz (US$2,900/oz) in 2019. AIC for 2019 included construction capital up to the point of commercial production.

Capex (on a 50% basis) decreased by 61% to A$41m (US$28m) in 2020 from A$104m (US$72m) in 2019. The 2019 capex was primarily incurred to complete the Gruyere construction project and stripping activities at the Gruyere pit.

Gruyere generated net cash-flow (on a 50%-basis) of A$110m (US$76m) (pre-tax) in 2020 compared with a cash-outflow of A$80m (US$55m) in 2019.

2021 guidance (50% basis):

Gold production: 280koz (100% basis)
Capex: A$57m (US$43m), of which A$54m (US$41m) is sustaining capex and A$3m (US$2m) non-sustaining capex
AISC: A$1,310/oz (US$985/oz)
AIC: A$1,330/oz (US$1,000/oz)

West Africa region

	2021 Guidance		2020 Actual		2020 Guidance		2019 Actual
	Prod	AIC	Prod	AIC	Prod	AIC	Prod	AIC

Tarkwa	510koz	US$1,075/oz	526koz	US$1,017/oz	510koz	US$970/oz	519koz	US$958/oz
Damang	275koz	US$790/oz	223koz	US$1,035/oz	215koz	US$1,030/oz	208koz	US$1,147/oz
Asanko¹	106koz	US$1,400/oz	112koz	US$1,316/oz	115koz	US$1,130/oz	113koz	US$1,214/oz
Region	891koz	US$1,025/oz	862koz	US$1,060/oz	840koz	US$1,006/oz	840koz	US$1,039/oz

¹ 45% stake, equity-accounted

The Ghanaian region is the second biggest producer in the Gold Fields portfolio. Gold Fields has a shareholding of 90% in both Tarkwa and Damang, with the Ghanaian government holding the remaining 10%. We hold a 45% stake in Asanko, with our JV partner Galiano Gold, which manages the project, holding 45% and the Ghanaian government the remaining 10%.

Total gold production for the region increased by 3% to 862koz in 2020, being 3% higher than guidance of 840koz. The increase in output was driven by the continued build-up in production at Damang, with the mine having a much-improved H2 2020 as it moved into the heart of the main ore body. Total attributable production increased to 787koz in 2020 from 768koz in 2019.

Capex decreased to US$167m in 2020 from US$202m in 2019, mainly due to lower expenditure on capital waste stripping at Damang. AIC for the region was US$1,060/oz in 2020, 2% higher than the US$1,039/oz reported in 2019.

The region reported a material increase in net cash-flow in 2020 to US$252m (2019: US$174m). Gold Fields received US$38m on the redemption of preference shares from Asanko in 2020, which would have increased the total cash-flow for the region to US$290m.

Mine performances

Tarkwa's production increased by 1% to 526koz in 2020 (2019: 519koz) and was slightly ahead of guidance of 510koz.

AISC and AIC increased by 6% to US$1,017/oz in 2020 from US$958/oz in 2019, and were slightly higher than guidance of US$970/oz. The increase in costs was driven by increased royalties on the back of the higher gold price received, together with increased capex.

Tarkwa generated net cash-inflow of US$186m during 2020.

A review of the mine's brownfields exploration activity in 2020 is in Creating a global, sustainable portfolio.

2021 guidance:

Gold production: 510koz
Capex: US$174m
AISC/AIC: US$1,075/oz

Damang produced 223koz in 2020, which is 7% higher than the 208koz produced in 2019 and 4% above guidance of 215koz. Damang had a year of two halves as the mine continued to transition through the Huni sandstone lithology during H1 2020, which exhibited more variable grades than anticipated. H2 2020 was much stronger as mining moved into the higher grade Tarkwa phyllites in the base of the pit.

AISC increased by 25% to
US$1,008/oz in 2020 from
US$809/oz in 2019 due to higher cost of sales before amortisation and depreciation, as well as higher royalties on the back of the elevated gold price.

AIC decreased by 10% to
US$1,035/oz in 2020 from US$1,147/oz in 2019 due to higher gold sold and lower non-sustaining capex, which decreased by 91% to US$6m in 2020 (2019: US$71m).

Damang recorded net cash-inflow of US$66m in 2020 compared with US$24m in 2019.

A review of the mine's brownfields exploration activity in 2020 is in Creating a global, sustainable portfolio.

2021 guidance:

Gold production: 275koz
Capex: US$23m (sustaining capital: US$13m; project capital: US$10m)
AISC: US$730/oz
AIC: US$790/oz

Asanko produced 250koz in 2020, of which 113koz was attributable to Gold Fields, which is in line with 2019. AISC remained flat at US$1,114/oz in 2020 (2019: US$1,112/oz), while AIC increased 8% to US$1,316/oz in 2020 from US$1,214/oz in 2019.

2021 guidance:

Gold production: 235koz
AISC: US$1,235/oz
AIC: US$1,400/oz

Modernisation at Gold Fields

Gold companies with maturing mines face rising costs, dropping grades and remote ore bodies. One way of addressing these challenges is through modernisation, which can deliver a safer working environment, improve efficiencies and production, reduce costs and limit their environmental impact. Ultimately, the ideal end state is a decarbonised, fully electric, sustainable mine, embracing innovative technology and providing a safe working environment for all.

Gold Fields modernisation plan stretches across three horizons:

Horizon 1 (H1) – The foundational phase to visualise the operations through real time data, and using these business insights to plan the approach for Horizon 2
Horizon 2 (H2) – The transformational phase to integrate and optimise processes and systems over a three to seven-year period
Horizon 3 (H3) – The Gold Fields Mine of the Future, delivering the future state of Gold Fields

Significant progress has been made in H1, with some operations already having transitioned to H2. Some of the modernisation initiatives deployed include:

Major advancements in digital infrastructure at our mines. This is key as it provides the backbone required to run the technology for other modernisation programmes
3D visualisation to measure key aspects of the production value stream
Improved two-way communication underground, which enhances safety and improves health response times
Mobile devices that provide real-time information to inform better business decisions
Open-pit drone technology to monitor blast locations
Remote controlled equipment, which allows operators to work safely away from active mining areas
Wind and solar power that have already helped to reduce energy costs and our environmental impact

In working with our peers in the ICMM, we have also developed a Cleaner, Safer, Vehicles (CSV) roadmap for underground and open pit operations, each with context-specific projects within the three horizons. The introduction of CSVs will mean step changes for the safety and health of our workforce and the environmental impacts our operations have.

Modernisation extends beyond technology, however. Perhaps most importantly it will mean introducing a diversity of new skills, specialists and technical role to our Company, reskilling and upskilling people to adapt in an agile environment and improving performance management systems. Central to our people-focused modernisation plan is the development of a culture of diversity and agility to ready us for the new world of work.

Mapping out underground automation at Granny Smith, Australia.