The Group’s policy is to remain unhedged to the gold price. However, hedges are sometimes undertaken on a project specific basis as follows:
to protect cash flows at times of significant expenditure;
for specific debt servicing requirements; and
to safeguard the viability of higher cost operations.
Gold Fields may from time to time establish currency financial instruments to protect underlying cash flows.

South Africa Derivative Instrument*
On 25 February 2016, USD/ZAR forward exchange contracts (FEC’s) were entered into for a total delivery of US$69.8 million starting July 2016 until December 2016. The average forward rate achieved over the 6 month period is R16.8273, based off an average spot rate of R16.0748.
At the reporting date, the marked-to-market value on the outstanding FEC is positive US$5.6 million.

  *  Do not qualify for hedge accounting and are accounted for as derivative financial instruments in the income statement.