4.1 Introduction

In 2015, Gold Fields consolidated its position as a more focused, leaner business and its portfolio is now characterised by modern, fully mechanised open-pit and underground mining operations, with diversified production spread across eight mines in four countries.

This supports our broader strategy focused on disciplined spending and cash-generation rather than ounces for ounces sake, enhancing the Company’s ability to generate free cash flow and delivering investors value over and above the price of gold through its dividend policy and share price performance. As a result of this proactive strategy, Gold Fields has been in a favourable position to weather current low gold prices.

During 2015, Gold Fields continued to focus on improving the cash- generation performance of its existing operations. This included:

  • The avoidance of marginal ounce mining, whilst protecting the commercial sustainability of its mines by eschewing high-grading and investing in ore development on an ongoing basis
  • Enhanced cost-efficiency at all of its operations
  • Production and strategic planning based on the delivery of healthy free cash flow margins at lower gold prices
  • A back-to-basics strategy at the South Deep mine, which is showing early benefits in improving its operational performance

Similarly, Gold Fields focused on life extensions of its operations and the sustained cash flow margin per ounce of gold produced. This process of active portfolio management in 2015 resulted in:

  • The continued focus on low-risk, near-mine exploration activities as opposed to early greenfields exploration, which saw resources increase by 13% in Australia
  • Examining further cash-generative acquisition opportunities aligned with Gold Fields’ core competencies
  • The continued disposal of growth projects that are marginal and primarily focused on metals other than gold
 Key operating statistics 2015     2014    20131   20121   
Gold produced – attributable ('000 ounces) 2,159     2,219   2,022   2,031  
Revenue (US$m) 2,545     2,869   2,906   3,531  
AISC (US$/oz) 1,007     1,053   1,202   1,310  
AIC (US$/oz) 1,026     1,087   1,312   1,537  
Gold price (US$/oz) 1,140     1,249   1,386   1,656  
Operating profit (US$m) 1,089     1,191   1,239   1,879  
Operating costs (US$m) 1,431     1,685   1,679   1,674  
Headline earnings (losses) (US$m) (28)     27   (71)   350  
Normalised earnings (US$m) 45     85   58   409  
Net cash flow (outflow) (US$m) 123     235   (235)   (280)  
Free cash flow margin (%) 8     13   n/a   n/a  
1 Continuing operations