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Forward looking statements

This report contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to Gold Fields' financial condition, results of operations, business strategies, operating efficiencies, competitive position, growth opportunities for existing services, plans and objectives of management, markets for stock and other matters.

These forward-looking statements, including, among others, those relating to the future business prospects, revenues and income of Gold Fields, wherever they may occur in this report and the exhibits to the report, are necessarily estimates reflecting the best judgment of the senior management of Gold more

  Salient features
US$948 per ounce All-in-sustaining costs
US$961 per ounce All-in-costs
557,000 ounces of attributable gold production
US$75 million cash inflow from operating activities*

Note: *Cash flow from operating activities less net capital expenditure and environmental payments

Higher production and cash flow

JOHANNESBURG. 19 November 2015

Gold Fields Limited (NYSE & JSE: GFI) today announced net earnings attributable to our shareholders of US$18 million for the September 2015 quarter compared with net earnings of US$12 million for the June 2015 quarter and US$19 million in the September 2014 quarter. Normalised earnings of US$22 million for the September 2015 quarter compared with normalised earnings of US$22 million for the June 2015 quarter and US$23 million in the September 2014 quarter.

Statement by Nick Holland, Chief Executive Officer of Gold Fields

The Group generated US$75 million in net cash flow from operations for the September quarter (Q2 2015: US$30 million) despite the lower US dollar gold price. This enabled us to reduce our net debt balance further by US$50 million to US$1,427 million at the end of September 2015 (June 2015: US$1,477 million). The net debt/EBITDA ratio at the end of the quarter was 1.41x, compared with 1.44x at the end of the June quarter.

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Group attributable equivalent gold production increased by 4 per cent to 557koz (Q2 2015: 535koz), with most operations producing more gold in the September quarter. Encouragingly, all-in sustaining costs (AISC) decreased by 8 per cent to US$948/oz (Q2 2015: US$1,029/oz) and total all-in cost (AIC) decreased by 9 per cent to US$961/oz (Q3 2015: US$1,059/oz). In addition to the increase in production, weaker currencies and the lower oil price are favourably impacting costs. The Group realised a FCF margin of 11 per cent at a gold price of US$1,103/oz in Q3 2015, compared with 9 per cent at a gold price of US$1,174/oz in the June quarter.

We are pleased to report that our ongoing efforts to improve safety allowed us to achieve a fatality free quarter.

As the gold price continues to languish, we constantly review our portfolio. While the weaker currencies offer some respite in most regions, Ghana is fully exposed to further declines in the US$ gold price. In particular, Damang is challenged in the current environment and as such, we are considering various options for Damang which include a recapitalisation of the mine to expose the higher grade ore or whether it would be more appropriate to preserve the inherent value of Damang until gold prices recover. We should be in a position to announce a decision in early 2016.

Better quarter at South Deep

South Deep delivered a much improved quarter in Q3 2015, with gold production up 42 per cent to 54.9koz (1,709kg), driven by a 30 per cent increase in tonnes milled and a 13 per cent increase in underground yield.

As previously reported, we reviewed the destress mining method in collaboration with a team of leading international and local geotechnical experts. A strategic mine design change in the destress methodology was adopted with a detailed transition programme developed to guide the change process. The conversion from low profile (2.5m vertical height) to high profile (5.0m vertical height) destress mining commenced in the quarter and is expected to simplify and derisk the mining process. The transition to high profile destress is expected to continue until the early part of 2017.

At the end of Q2 2015, we undertook to provide an update on the leading indicators, in order to track progress being made at South Deep. Progress was made on a number of important activities at the mine during Q3 2015:

The cash outflow came down from R330 million (US$27 million) in the June quarter to R266 million (US$20 million) in the September quarter.
Development increased 58 per cent from 939 metres in the June quarter to 1,486 metres in the September quarter. Included in this was 347 metres of new mine capital development (phase one, sub 95 level), which increased from 83 metres in the June quarter.
Destress mining increased 57 per cent from 6,056 square metres in the June quarter to 9,523 square metres in the September quarter. The increase in destress mining is attributed to the commissioning of new low profile fleet, improved mining cycles and the introduction of dedicated supervision per activity per corridor.
Total reef tonnes broken increased 37 per cent to 333kt. Longhole stoping accounted for 40 per cent of total ore tonnes mined, compared with 37 per cent in the June quarter.
Secondary support improved by 14 per cent during the quarter to 1,584 metres, while backfill cubes increased by 42 per cent from 79 cubic metres in the June 2015 quarter to 113 cubic metres in the September quarter. Both secondary support and backfill are crucial to providing improved mining flexibility.
As at the end of the September quarter, 87 per cent of the critical skill positions of 164 personnel identified had been filled.
A total of 20 out of the 27 new category 1 equipment purchased during the year had been commissioned by the end of the September quarter. The balance of 7 category 1 units are expected to be commissioned by the end of the 2015 year.

Production for the full year is expected to be between 5,900kg (190koz) and 6,000kg (193koz), with H2 2015 being up around 50 per cent on H1 2015. We expect 2016 production to be significantly better than 2015.


Gold production at the Australian operations increased by 6 per cent to 249koz (Q2 2015: 235koz). AIC for the region decreased by 9 per cent to A$1,173/oz (Q2 2015: A$1,288/oz). In US$ terms, costs were 15 per cent lower at US$859/oz (Q2 2015: US$1,008/oz). Net cash flow generated from the region was US$64 million compared with US$40 million in the June 2015 quarter.

Production at St Ives was 6 per cent lower mainly due to a drawdown of gold-in-circuit in the June quarter. Despite challenging ground conditions at Waroonga, production at Agnew/Lawlers increased by 7 per cent driven by higher grades. Darlot had a good quarter, with production increasing by 46 per cent as a result of the higher grades mined at Lords South Lower, and as a consequence, returned strong cash positive results. Granny Smith continued its strong performance with production up by 10 per cent.


Attributable gold production at the West African operations decreased as anticipated by 2 per cent to 174koz (Q2 2015: 178koz), driven by lower production at Tarkwa due to lower grades mined. Damang had an improved quarter with production up by 7 per cent on higher volumes and grade. Despite the lower production, the region reported a 7 per cent decrease in AIC to US$962/oz (Q2 2015: US$1,029/oz), with net cash flow for the quarter of US$32 million. The exceptional quality of Tarkwa was again highlighted in the quarter, with the mine producing 150koz, at AIC of US$872/oz.


Attributable equivalent gold production at Cerro Corona decreased by 5 per cent to 78.8koz (Q2 2015: 83.2koz), mainly due lower gold and copper head grades. Consequently, AIC per equivalent ounce increased by 10 per cent to US$731/oz (Q2 2015: US$662/oz).

FY15 guidance

We expect our FY15 production to be within 1 per cent to 2 per cent of previous guidance. However, costs are expected to be better than previously guided at around US$1,035 per ounce for AISC and US$1,055 per ounce for AIC.

Mining Phakisa

We commend the South African government for arranging and leading the Mining Phakisa that is currently underway. We fully support the initiative and believe that constructive dialogue between the various stakeholders in the industry can only yield positive results.

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Stock data
Number of shares in issue   Range – Quarter   US$2.42 – US$3.55
– at end September 2015   776,219,005   Average Volume – Quarter   5,520,601 shares/day
– average for the quarter   775,270,967  
JSE Limited – (GFI)
Free Float   100 per cent  
ADR Ratio   1:1   Range – Quarter   ZAR31.41 – ZAR47.40
Bloomberg/Reuters   GFISJ.GFLJ.J   Average Volume – Quarter   2,320,896 shares/day