Creating enduring value beyond mining

Strengthening the balance sheet

Gold Fields has a prudent approach to balance sheet management, with one of our strategic priorities being to reduce our gearing. Despite the elevated capex levels over the past four years, we managed to reduce our net debt from a peak of US$1.664bn in 2019 to US$969m (US$553m excluding lease liabilities) at end-December 2021.

Given the cyclical nature of the gold industry, along with the limited control we have over key cost drivers – such as the gold price, currencies, wage inflation and the oil price – we aim to reduce our debt even further to be well positioned to take advantage of value-adding opportunities as they come along.

Gold Fields' business strategy focuses on growing margin and FCF through the cycle. In 2021, Gold Fields generated a FCF margin of 25% at an average gold price of US$1,794/oz, compared with 28% in 2020 at an average gold price of US$1,768/oz.

However, given the finite nature of our mines, ongoing investment is necessary to ensure the longevity of the portfolio. 2021 was another year of relatively high capex, with US$375m spent on advancing the Salares Norte project in Chile.

Despite this, higher-than-planned gold prices enabled us to adhere to our well established Dividend Policy of paying out between 25% and 35% of normalised earnings and reduce the Group's net debt by a further US$100m during the year. The 2022 financial year will again see significant investment into the Group's assets, with US$330m budgeted for the Salares Norte project.


The high gold price once again provided a tailwind to Gold Fields' financial results in 2021. While the average gold price received by the Group increased by 2% in US Dollar terms to US$1,794/ oz, the slight strengthening of the Australian Dollar and South African Rand meant the average Australian Dollar gold price decreased by 6% to A$2,400/oz and the average Rand gold price decreased by 8% to R851,102/kg.

The slightly higher gold price received, coupled with a 5% increase in attributable production, resulted in an 8% increase in Group revenue to US$4.20bn in 2021 from US$3.89bn in 2020.

Cost of sales before amortisation and depreciation increased by 12% to US$1.66bn in 2021. AIC at US$1,297/oz and AISC at US$1,063/oz increased by 20% and 9% respectively from 2020 to 2021, but were still in line with guidance for the year. Covid-19- related costs were US$10/oz in 2021 and are included in the AISC and AIC numbers

Other salient features during 2021 included the following:

  • Royalty expenses increased by 7% to US$112m
  • The Group's taxation charge decreased by 2% to US$425m from US$433m in 2020, with normal taxation increasing 22% to US$449m (2020: US$367m) offset by a deferred tax credit in 2021 against tax charges in 2020
  • Total capex increased by 86% to US$1,089m in 2021 from US$584m in 2020, in line with guidance
  • Losses from financial instruments decreased by 58% to US$100m (2020: US$239m) as we closed out all gold price-linked hedges

Considering the above, earnings for 2021 totalled US$789m – a 10% increase from the US$723m reported in 2020 – while normalised earnings increased by 6% to US$929m (2020: US$879m).

We provide a detailed analysis of our financial performance in the management's discussion and analysis of the Group's AFS in Management's Discussion and Analysis of the Financial StatementsTrend and outlook of the 2021 AFR. The consolidated income statement, statement of financial position and cash-flow statement – extracted from the 2021 AFR – can be found in Consolidated Income StatementConsolidated Statement of Cash Flows.


Gold Fields' capital allocation priorities during 2021 were to maintain the necessary levels of sustaining capex, the equivalent of approximately US$300/oz, invest in our Salares Norte project, adhere to our Dividend Policy and continue to reduce our debt.

Pleasingly, we achieved all these objectives despite significant headwinds in the form of Covid-19 disruptions and cost inflation across our regions. The Group reduced its net debt by US$100m to US$969m, resulting in a net debt:EBITDA ratio of 0.40x. This compares with net debt of US$1,069m and a net debt:EBITDA ratio of 0.56x at 31 December 2020. Excluding lease liabilities, core net debt amounted to US$553m at the end of 2021.

Throughout the cycle, Gold Fields has maintained the capex levels we believe are essential to ensure the longevity of our portfolio. Group capex amounted to US$1,089m in 2021 compared with US$584m in 2020, comprising sustaining capex of US$576m (2020: US$409m) and growth capex of US$513m (2020: US$175m).

Looking ahead, our 2022 capital allocation priorities will again be informed by our strategy to improve the quality of our asset base and extend the life-of-mine of our portfolio while balancing returns to shareholders. As such, we will allocate the FCF we generate to

  • Funding Salares Norte: US$330m is budgeted for the continued construction of Salares Norte during 2022
  • Maintaining levels of sustaining capex: We believe spending US$300/oz in sustaining capital is essential to ensuring the longterm health of the production base
  • Rewarding shareholders with dividends: Gold Fields has a long and well established policy of rewarding shareholders by paying out between 25% and 35% of normalised earnings as dividends. During 2021, Gold Fields declared a total dividend of R4.70/share, which translates to 30% of normalised earnings for the year – in line with the average pay-out over the past 10 years. We will continue to honour this policy in 2022
  • Further reducing net debt and strengthening the balance sheet: Although the Group continued to decrease its net debt and net debt:EBITDA ratio during 2021, management believes that decreasing our debt levels even further would be favourable to the Group to allow the Company to have the balance sheet to take advantage of value-adding opportunities as they come along

For 2022, we budgeted total capital of US$1,050m – US$1,150m, comprising sustaining capital of US$625m – US$675m and nonsustaining capital of US$425m – US$475m. The vast portion of the growth capital will be spent at Salares Norte, with US$330m in project capital budgeted for the year. In 2021, we spent US$375m in capital on Salares Norte, bringing total project spend to US$472m to date. Total project cost is expected to be approximately US$860m.


Given the cyclical nature of our business, along with the volatility of the gold price, Gold Fields implemented an active hedging programme in recent years. We do not enter long-term systematic hedges, but instead regularly evaluate the Company's position and outlook to determine whether short-term hedging is appropriate.

Our policy allows for hedging to protect cash-flows:

  • During times of significant capital expenditure
  • For specific debt servicing requirements, and
  • To safeguard the viability of higher-cost operations

For full details of our hedges, see the table below:

Table of hedges

Hedge Country Quantity hedged Hedging instrument and price Hedge term
Gold Australia 1,000koz (100% of guidance) Put options; Ave strike price of A$2,190/oz Jan 2021 – Dec 2021
Copper Peru 24kt (97% of guidance) Zero-cost collars; Ave floor price of US$6,525/Mt; Ave cap price of US$7,382/Mt Jan 2021 – Dec 2021

Hedge Country Quantity hedged Hedging instrument and price Hedge term
Chilean peso hedge Chile US$545m Exchange rate of 836.45 CLP per US$ July 2020 – Dec 2022
Oil Ghana 123Mℓ (50% of annual diesel consumption) Swaps; Equivalent Brent crude swap price US$75.80/bbl Jan 2020 – Dec 2022
  Australia 75Mℓ (50% of annual diesel consumption) Swaps; Equivalent Brent crude swap price US$74.00/bbl Jan 2020 – Dec 2022

During 2021, the purpose of our hedging was mainly to protect cash generation in Australia, our main cash-generating region. Given the sizeable capital budget at Salares Norte, the Group purchased downside protection for 2021 in the form of put options on 1Moz of our Australian production at an average strike price of A$2,190/ oz. In addition, we implemented a currency hedge on the Chilean Peso, as roughly two-thirds of the costs relating to the Salares Norte project are in the local currency. Finally, we hedged 24kt of copper using zero cost collars with a floor of US$6,525/Mt and a cap of US$7,382/Mt.

For 2022, the only outstanding hedges are the oil hedges in Ghana and Australia, which were entered into in June 2019, and the currency hedge in Chile, which was entered into in March 2020.


Gold Fields has actively managed the liquidity and maturity profile of the Group's debt over the past few years. During 2021, we executed the following transactions:

  • In April, we entered a US$150m revolving credit facility (RCF) in our Americas region, with a final maturity date of April 2024
  • In July, we extended the US$1,200m revolving credit bank facilities by another year
  • In September, Gold Fields Ghana entered a US$100m RCF with a maturity date of July 2026

We have not been active in the bond market since we refinanced our bonds in 2019. In May 2019, we raised two new bonds, extending and staggering the maturity profile. A total of US$1bn was raised at an average coupon of 5.625%, with the maturity spread between five to 10 years.