3.2.5 Share price performance

Gold Fields has made a commitment to its investors to offer leverage to the gold price. This commitment was one of the main reasons why, in 2012, Gold Fields embarked on its major restructuring drive to enhance cash flows.

Since then Gold Fields has fundamentally transformed its business and become a focused, modern, mechanised mining operation, significantly reducing its cost base and thus offering greater cash returns. A key pillar of this transformation was the unbundling of Gold Fields’ legacy mines in South Africa into Sibanye Gold – this was announced on 1 November 2012 and took effect on the stock exchanges on which Gold Fields is listed on 11 February 2013.

This transformation has, however, coincided with a slide in the gold price from levels of around US$1,650/oz at the beginning of 2013 to approximately US$1,050/oz at the end of 2015. By the end of February 2016, the price had recovered to around US$1,200/oz.

The long-term share price performance of both Gold Fields and Sibanye Gold has validated this transformation journey. Just before the announcement of the Sibanye Gold unbundling on 28 November 2012, the Gold Fields share price was trading at R102.73/share. Since then Sibanye’s share price in particular has performed strongly, rising by 320% to R57/share over the period. The combined share price of Gold Fields and Sibanye Gold on 29 February 2016 was valued at R122.56/share – an increase of 19.3% on its pre-announcement level.

Over the same period of time the gold price declined by 25.8%, the JSE gold index – representing gold miners listed on the JSE – fell by 5.3%, and the Philadelphia gold index – representing gold miners listed on the New York Stock Exchange – decreased by 57%. This represents a significant market endorsement of the Gold Fields’ transformation decision.

Between 1 January 2015 and 29 February 2016, the Gold Fields share price improved by just over 25%, once again outperforming the gold price, which showed a 3.4% gain. The Philadelphia gold index still traded in negative territory, down 7%, but the JSE gold index has improved by 81% as JSE-listed gold miners received a boost by the stronger Rand gold price.

Share price performance (Feb 2013 – Feb 2016) Share price performance (Jan 2015 – Feb 2016)