Integrated Annual Review 2012 Annual Financial Report 2012 Mineral Resources and Mineral Reserves Regional overview  

2.2.1 Introduction

The last year has seen a great deal of change, much of which will play an instrumental role in the future success of Gold Fields – both in the short- and long-term. The first of these has been the implementation of a new strategy that is firmly focused on cash generation – and providing investors with leverage to the price of gold. This was the core message in my keynote speech to the Melbourne Mining Club on 31 July 2012 – and marks a departure from our previous goal of having 5 million ounces of gold in production or development by 2015. It also marks our determination to only pursue production growth where it is supported by attractive cash returns.

This shift in focus has had a major operational and strategic impact. It has meant that we have phased out marginal production at our mines in Australia and Ghana and are focusing on the pursuit of low-risk, high-return near-mine growth opportunities principally at our Cerro Corona, Damang and Tarkwa mines. Beyond this, all greenfields growth opportunities will be subject to strict commercial stage-gates to ensure the potential is robustly assessed.

Strategically it has led us to unbundle our mature underground mines in South Africa. These will now be managed by the newly-independent Sibanye Gold, which I believe will be in a strong position to ensure a positive and sustainable future for the Beatrix and KDC mines.

Our links to, and foundation in, South Africa remain strong. It is home to our most important growth asset: the developing South Deep gold mine. During 2012, we marked two major milestones in the development of this world-class, deep underground mechanised mine.

The first was the completion of all the major infrastructure installations required to take this mine to its full production target of 700,000 ounces by 2016.

The second was the agreement – after long negotiations – of a new, landmark ‘24/7/365’ operating model, backed by a range of high-impact and progressive incentives for employees. Other than the need to continue to de-stress and develop the underground workings, South Deep now has everything in place to ensure that it fulfils its potential – not only as the model for the industry in terms of production, technology, safety and transformation, but also as the jewel in Gold Fields crown.