For the six months ended 30 June 2019 compared with the six months ended 30 June 2018

Revenue

Attributable equivalent gold production, (including Asanko) increased by 9 per cent from 994,000 ounces for the six months ended 30 June 2018 to 1,082,500 ounces for the six months ended 30 June 2019. Attributable equivalent gold production at Asanko for the six months ended 30 June 2019 was 55,100 ounces. Revenue from Asanko is not included in Group revenue as Asanko results are equity accounted.

Gold production at South Deep in South Africa, decreased by 5 per cent from 3,003 kilograms (96,500 ounces) for the six months ended for the six months ended 30 June 2018 to 2,851 kilograms (91,700 ounces) for the six months ended 30 June 2019.

Attributable gold production at the West African operations (including Asanko), increased by 25 per cent from 318,500 ounces for the six months ended 30 June 2018 to 399,500 ounces for the six months ended 30 June 2019 due to increased production at Tarkwa and Damang, as well as the inclusion of 55,100 ounces (45 per cent basis) from Asanko for the six months ended 30 June 2019. Production at Asanko (not included in revenue) amounted to 55,100 ounces (45 per cent basis) for the six months ended 30 June 2019 compared to no ounces included for Asanko for the six months ended 30 June 2018. Asanko was acquired by Gold Fields in H2 of 2018.

Attributable equivalent gold production at Cerro Corona in Peru increased by 14 per cent from 136,900 ounces for the six months ended 30 June 2018 to 156,400 ounces for the six months ended 30 June 2019.

Gold production at the Australian operations decreased by 2 per cent from 442,400 ounces for the six months ended 30 June 2018 to 434,900 ounces for the six months ended 30 June 2019 mainly due to lower production at all the Australian operations.

At the South Africa region, production at South Deep decreased by 5 per cent from 3,003 kilograms (96,500 ounces) for the six months ended 30 June 2018 to 2,851 kilograms (91,700 ounces) for the six months ended 30 June 2019 the decrease was due to a slow production build-up period experienced post the restructuring to reorganise operations in the December quarter 2018. Gold sold decreased by 13 per cent from 3,240 kilograms (104,200 ounces) to 2,804 kilograms (90,100 ounces).

At the West Africa region, managed gold production at Tarkwa increased by 2 per cent from 264,400 ounces for the six months ended 30 June 2018 to 270,900 ounces for the six months ended 30 June 2019 mainly due to higher head grade and recovery. At Damang, managed gold production increased by 25 per cent from 89,500 ounces for the six months ended 30 June 2018 to 111,800 ounces for the six months ended 30 June 2019 mainly due to higher head grade and higher volumes processed. Gold produced and gold sold are the same for both Tarkwa and Damang. Production at Asanko amounted to 55,100 ounces (45 per cent basis) for the six months ended 30 June 2019 compared to no ounces included for Asanko for the six months ended 30 June 2018. Asanko was acquired by Gold Fields in H2 of 2018.

At the South America region, total managed gold equivalent production at Cerro Corona increased by 14 per cent from 137,600 ounces for the six months ended 30 June 2018 to 157,100 ounces for the six months ended 30 June 2019 mainly due to mining of higher grade areas in line with the mining sequence. Gold equivalent ounces sold increased by 19 per cent from 131,700 ounces to 156,400 ounces.

At the Australia region, St Ives’ gold production decreased by 1 per cent from 189,800 ounces for the six months ended 30 June 2018 to 187,600 ounces for the six months ended 30 June 2019. Gold sold decreased by 4 per cent from 190,200 ounces to 183,200 ounces. At Agnew, gold production decreased by 2 per cent from 115,400 ounces for the six months ended 30 June 2018 to 113,300 ounces for the six months ended 30 June 2019. Gold sold decreased by 1 per cent from 116,900 ounces to 115,400 ounces. At Granny Smith, gold production decreased by 2 per cent from 137,200 ounces for the six months ended 30 June 2018 to 134,000 ounces for the six months ended 30 June 2019 due to decreased tonnes mined and processed. Gold sold decreased by 2 per cent from 137,300 ounces to 133,900 ounces.

The average US dollar gold price achieved by the Group (excluding Asanko) decreased by 1 per cent from US$1,306 per equivalent ounce for the six months ended 30 June 2018 to US$1,298 per equivalent ounce for the six months ended 30 June 2019. The average rand gold price increased by 16 per cent from R518,504 per kilogram to R600,601 per kilogram. The average Australian dollar gold price increased by 8 per cent from A$1,707 per ounce to A$1,843 per ounce. The average US dollar gold price for the Ghanaian operations (excluding Asanko) decreased by 1 per cent from US$1,318 per ounce for the six months ended 30 June 2018 to US$1,304 per ounce for the six months ended 30 June 2019. The average equivalent US dollar gold price, net of treatment and refining charges, for Cerro Corona increased by 3 per cent from US$1,228 per equivalent ounce for the six months ended 30 June 2018 to US$1,268 per equivalent ounce for the six months ended 30 June 2019. The average US dollar/Rand exchange rate weakened by 16 per cent from R12.25 for the six months ended 30 June 2018 to R14.22 for the six months ended 30 June 2019. The average Australian/US dollar exchange rate weakened by 8 per cent from A$1.00 = US$0.77 to A$1.00 = US$0.71.

Gold equivalent ounces sold (excluding Asanko), increased by 3 per cent from 1.03 million ounces to 1.06 million ounces.

Revenue increased by 2 per cent from US$1,351 million for the six months ended 30 June 2018 to US$1,379 million for the six months ended 30 June 2019 due to the higher gold sold, partially offset by lower gold price.

Cost of sales before amortisation and depreciation

Cost of sales before amortisation and depreciation increased by 1 per cent from US$688 million for the six months ended 30 June 2018 to US$695 million for the six months ended 30 June 2019.

At the South Africa region, at South Deep, cost of sales before amortisation and depreciation decreased by 11 per cent from R1,882 million (US$154 million) for the six months ended 30 June 2018 to R1,669 million (US$117 million) for the six months ended 30 June 2019 due to lower production and lower payroll costs due to restructuring in 2018, lower expenditure on consumables and a gold inventory credit of R17 million (US$1 million) for the six months ended 30 June 2019 compared with a charge of R36 million (US$3 million) for the six months ended 30 June 2018.

At the West Africa region, (excluding Asanko), cost of sales before amortisation and depreciation increased by 1 per cent from US$213 million for the six months ended 30 June 2018 to US$216 million for the six months ended 30 June 2019 mainly due to higher operational tonnes mined, partially offset by a higher gold-inprocess credit of US$13 million compared with gold-in-process charge of US$11 million for the six months ended 30 June 2018 at Tarkwa. The net gold-in-process movement at Tarkwa was US$24 million.

At the South America region, at Cerro Corona, cost of sales before amortisation and depreciation increased by 4 per cent from US$78 million for the six months ended 30 June 2018 to US$81 million for the six months ended 30 June 2019 due to higher workers participation in line with higher revenue and profit.

At the Australia region, cost of sales before amortisation and depreciation increased by 26 per cent from A$316 million (US$244 million) for the six months ended 30 June 2018 to A$397 million (US$280 million) for the six months ended 30 June 2019 mainly due to a higher gold inventory charge to cost at St Ives of A$20 million (US$14 million) for the six months ended 30 June 2019 compared with a credit to cost of A$36 million (US$28 million) for the six months ended 30 June 2018, resulting in a net movement of A$56 million (US$42 million).

Amortisation and depreciation

Amortisation and depreciation for the Group decreased by 16 per cent from US$347 million for the six months ended 30 June 2018 to US$292 million for the six months ended 30 June 2019. The US$55 million decrease in amortisation was due to lower amortisation of US$39 million in local currencies and the exchange rate effect of US$16 million on translation into US dollars at a 16 per cent weaker rand and an 8 per cent weaker Australian dollar. The lower amortisation in local currencies mainly related to a decrease at St Ives of A$52 million (US$44 million) due to higher ounces mined in the six months ended 30 June 2018 compared with the six months ended 30 June 2019.

Other

Net interest expense for the Group decreased by 6 per cent from US$33 million for the six months ended 30 June 2018 to US$31 million for the six months ended 30 June 2019. Interest expense of US$51 million, partially offset by interest income of US$3 million and interest capitalised of US$17 million for the six months ended 30 June 2019 compared with interest expense of US$44 million, partially offset by interest income of US$4 million and interest capitalised of US$7 million for the six months ended 30 June 2018.

The share of results of equity accounted investees after taxation decreased from US$6 million for the six months ended 30 June 2018 to US$1 million for the six months ended 30 June 2019 due to sundry asset write-offs at Far Southeast project (FSE) for the six months ended June 2018. The impact of the equity accounted earnings of Asanko for the six months ended 30 June 2019 was US$nil million due to Asanko breaking even for the six months ended 30 June 2019.

The gain on foreign exchange of US$3 million for the six months ended 30 June 2018 compared with US$nil million for the six months ended 30 June 2019 and related to the conversion of offshore cash holdings into their functional currencies.

The loss on financial instruments of US$109 million for the six months ended 30 June 2019 comprises a loss on hedges of US$114 million and a gain on valuation of shares and options of US$5 million. The loss on hedges of US$114 million includes realised gains/losses and the mark to market of the gold hedges taken out at the Australian operations (a loss of A$137 million/US$97 million), the Ghanaian operations (a loss of US$8 million) and South Deep (a loss of R132 million/US$10 million), the oil hedges taken out at the Ghanaian and Australian operations (a gain of US$3 million and A$4 million/US$3 million, respectively) and the currency hedge taken out at the Australian operations (loss of A$7 million/US$5 million). The loss on the hedges included in financial instruments comprised US$6 million realised losses and US$108 million unrealised losses.

The gain on valuation of shares and options of US$5 million comprises a gain of US$2 million on the valuation of the Maverix options and US$3 million on the valuation of the Maverix shares prior to their disposal.

This compared with a gain on financial instruments of US$24 million for the six months ended 30 June 2018, which included realised gains/losses and the mark to market of the gold hedges taken out at the Australian operations (a gain of A$1 million/US$1 million), the Ghanaian operations (a gain of US$10 million) and South Deep (a loss of US$1 million/R14 million), the oil hedges taken out at the Ghanaian and Australian operations (a gain of US$7 million and A$5 million/US$4 million, respectively), as well as the copper hedge taken out at Cerro Corona (gain of US$4 million). In addition, a currency hedge taken out at the Australian operations resulted in a loss of US$1 million (A$1 million).

Share-based payments for the Group decreased from US$20 million to US$11 million and related to the current valuation of the share scheme. The long-term incentive plan increased from US$1 million to US$6 million due to the current valuation of the plan.

Other costs for the Group increased from US$30 million to US$36 million and mainly related to increased community spend in Peru.

Exploration expenses

Exploration expenses decreased by 21 per cent from US$56 million for the six months ended 30 June 2018 to US$44 million for the six months ended 30 June 2019 mainly due to decreased costs at Salares Norte as we await the EIA approval on the project.

Non-recurring items

Non-recurring income of US$19 million for the six months ended 30 June 2019 compared with expenses of US$661 million for the six months ended 30 June 2018.

Non-recurring income of US$19 million for the six months ended 30 June 2019 mainly includes:

•	profit on sale of Maverix holding of US$15 million;
•	reversal of impairment of FSE of US$10 million; and
•	loss on the repurchase of 2020 bond of US$5 million.

Non-recurring expenses of US$661 million for the six months ended 30 June 2018 mainly included:

•

impairment of R6.471 billion (US$482 million). The after tax impairment is R4.819 billion (US$359 million) in respect of the South Deep cash-generating unit. The impairment calculation is based on the 2018 life of mine plan using the following assumptions:

Gold price of R525,000 per kilogram;

Resource price of US$17 per ounce at a Rand/Dollar exchange rate of R13.44;

Resource ounces of 29.0 million ounces;

Life of mine: 77 years; and

Discount rate: 13.5 per cent nominal.

	The impairment is due to a deferral of production. The underperformance of the mine in 2018 and the resultant knock-on impact has necessitated a further impairment of South Deep. For the purpose of the impairment calculation, we have used a number equivalent to extrapolating the six months ended 30 June 2018 production for 2019 of 6,100 kilogram (196 kilogram per ounce). The carrying value after impairment is R20.7 billion (US$1.5 billion). The information underlying the impairment calculation may be subject to further adjustments in the future. These adjustments could be as a result of further information becoming available to management during Gold Fields’ production planning processes.
•	restructuring costs at Tarkwa (US$81 million) with the transition to contractor mining;
•	restructuring costs at Damang (US$15 million);
•	restructuring costs at South Deep (US$4 million/R53 million);
•	losses on the sale of mining fleet and heavy machinery equipment and inventory at Tarkwa as part of the transition to contractor mining, amounted to US$38 million and US$9 million, respectively; and
•	impairment of FSE amounted to US$20 million and other losses on the sale of assets amounted to US$16 million. The impairment of FSE was based on the fair value less cost of disposal of the investment which was directly derived from the market value of Lepanto Consolidated Mining Company.

Royalties

Government royalties for the Group increased by 3 per cent from US$33 million for the six months ended 30 June 2018 to US$34 million for the six months ended 30 June 2019 in line with higher revenue.

Taxation

The taxation charge for the Group of US$62 million for the six months ended 30 June 2019 compared with a credit of US$129 million for the six months ended 30 June 2018. Normal taxation increased by 12 per cent from US$74 million for the six months ended 30 June 2018 to US$83 million for the six months ended 30 June 2019. The deferred tax credit of US$21 million for the six months ended 30 June 2019 compared with US$201 million for the six months ended 30 June 2018. The significant deferred tax credit for the six months ended 30 June 2018, arose due to the taxation credit of R1.652 billion (US$123 million) on the impairment of South Deep, as well as the settlement of the South Deep tax dispute with SARS. GFIJVH has recognised an additional R2,338 million (US$191 million) of capital allowance with a tax effect on this amount of R701 million (US$57 million).

Profit/(loss)

Net profit attributable to owners of the parent for the Group of US$71 million or US$0.09 per share for the six months ended 30 June 2019 compared with net loss of US$367 million or US$0.45 per share for the six months ended 30 June 2018.

Headline earnings attributable to owners of the parent for the Group of US$40 million or US$0.05 per share for the six months ended 30 June 2019 compared with headline earnings of US$67 million or US$0.08 per share for the six months ended 30 June 2018.

Normalised profit for the Group of US$126 million or US$0.15 per share for the six months ended 30 June 2019 compared with US$43 million or US$0.05 per share for the six months ended 30 June 2018.

Normalised profit

Normalised profit reconciliation for the Group is calculated as follows:

	Six months ended
	June 2019	June 2018
Profit/(loss) for the period	70.5	(366.6)
Non-recurring items	(19.0)	661.2
Tax effect of non-recurring items	(0.1)	(166.6)
Non-controlling interest effect of non-recurring items	–	(9.7)
Loss/(gain) on foreign exchange	0.1	(2.8)
Tax effect of loss/(gain) on foreign exchange	–	0.1
Loss/(gain) on financial instruments	109.4	(23.9)
Tax effect of loss/(gain) on financial instruments	(34.2)	7.2
Non-controlling interest effect of loss/(gain) on financial instruments	(0.5)	1.1
South Deep tax settlement	–	(57.2)
Profit excluding gains and losses on foreign exchange, financial instruments and non-recurring items after taxation and non-controlling interest effect	126.2	42.8

Normalised profit is considered an important measure by Gold Fields of the profit realised by the Group in the ordinary course of operations. In addition, it forms the basis of the dividend pay-out policy. Non-IFRS measures such as normalised results are considered as pro forma financial information as per the JSE Listing Requirements. The pro forma financial information is the responsibility of the Group's Board of Directors and is presented for illustration purposes only and because of its nature, normalised profit should not be considered as a representation of earnings.

Cash flow

Cash inflow from operating activities of US$426 million for the six months ended 30 June 2019 compared with US$263 million for the six months ended 30 June 2018. The increase of 62 per cent was mainly due to an increase in the line item ''profit before royalties, tax and non-recurring items''. In addition, royalties and taxation paid decreased from US$169 million to US$99 million. This was partially offset by an investment into working capital of US$25 million compared with a release of working capital of US$6 million in 2018.

Dividends paid of US$12 million for the six months ended 30 June 2019 compared with US$35 million for the six months ended 30 June 2018 and comprised dividends paid to owners of the parent related to the final dividends paid for 2017 and 2018, respectively.

Cash outflow from investing activities of US$277 million for the six months ended 30 June 2019 compared with US$320 million for the six months ended 30 June 2018. Capital expenditure decreased from US$411 million to US$356 million.

Sustaining capital expenditure (excluding Asanko), decreased by 3 per cent from US$254 million to US$246 million, while non-sustaining capital expenditure (excluding Asanko) decreased by 29 per cent from US$157 million to US$111 million. At South Deep, growth expenditure decreased from R149 million (US$12 million) to Rnil million (US$nil million). Growth expenditure on the reinvestment plan at Damang decreased from US$66 million to US$46 million and at Gruyere it decreased from US$66 million (A$86 million) to US$65 million (A$92 million), respectively.

Cash inflow from operating activities less net capital expenditure, environmental payments and finance lease payments of US$49 million for the six months ended 30 June 2019 compared with an outflow US$79 million for the six months ended 30 June 2018 mainly due to lower taxation paid, higher inflow from operating activities and lower capital expenditure as planned.

In the South Africa region at South Deep, capital expenditure decreased by 34 per cent from R379 million (US$31 million) for the six months ended 30 June 2018 to R250 million (US$18 million) for the six months ended 30 June 2019 due to temporary suspension of new mine development in 2019.

At the West Africa region, (excluding Asanko), capital expenditure decreased by 24 per cent from US$156 million to US$118 million. At Tarkwa, capital expenditure decreased by 19 per cent from US$84 million to US$68 million due to lower capital waste stripping in line with the operational plan. Capital expenditure at Damang decreased by 32 per cent from US$73 million to US$50 million and included US$46 million spent on the Damang re-investment project for the six months ended 30 June 2019. Capital expenditure at Asanko on a 100 per cent basis amounted to US$36 million for the six months ended 30 June 2019 and US$nil million for the six months ended 30 June 2018 (prior to acquisition). The Asanko capital expenditure is not included in the Group capital expenditure.

At the South America region at Cerro Corona, capital expenditure increased by 60 per cent from US$10 million to US$16 million mainly due to the beginning of the infrastructure reallocation activities related to the extension of the life of mine to 2030.

At the Australia region, capital expenditure increased by 12 per cent from A$174 million (US$134 million) for the six months ended 30 June 2018 to A$195 million (US$138 million) for the six months ended 30 June 2019. At St Ives, capital expenditure decreased by 3 per cent from A$74 million (US$57 million) to A$72 million (US$51 million). At Agnew, capital expenditure increased by 70 per cent from A$46 million (US$35 million) to A$78 million (US$55 million) due to expenditure on the new accommodation village. At Granny Smith, capital expenditure decreased by 15 per cent from A$54 million (US$42 million) for the six months ended 30 June 2018 to A$46 million (US$33 million) for the six months ended 30 June 2019 due to a reduction in capital development and exploration cost.

Proceeds on disposal of capital equipment of US$1 million for the six months ended 30 June 2019 compared with US$77 million for the six months ended 30 June 2018. The proceeds in 2018 related to Tarkwa's sale of fleet to the contractor as part of the conversion to contractor mining.

Purchase of investments of US$6 million for the six months ended 30 June 2019 related to Gold Fields subscription to a 16.1 per cent share interest in Chakana Copper Corporation. This compared with purchase of investments of US$18 million related to Gold Fields subscription to a 9.9 per cent share interest in Asanko Gold by way of a private placement of 22,354,657 Asanko shares for the six months ended 30 June 2018.

Proceeds on the sale of Maverix amounted to US$67 million for the six months ended 30 June 2019 and related to the sale of the Group's 19.9 per cent holding in Toronto-listed gold and royalty streaming company Maverix.

Proceeds on disposal of assets held for sale for the six months ended 30 June 2018 comprised US$40 million cash and royalty (2 per cent NSR (net smelter return)) on all metals and related to the disposal of APP.

Proceeds on disposal of investments for the six months ended 30 June 2019 amounted to US$21 million and related to the sale of 247 million shares (19.9 per cent holding) in ASX-listed Company Red 5.

Environmental payments decreased from US$8 million for the six months ended 30 June 2018 to US$4 million for the six months ended 30 June 2019.

The US$49 million cash flow from operating activities less net capital expenditure and environmental payments and finance lease payments for the six months ended 30 June 2019 comprised: US$198 million net cash generated by the seven mining operations (after royalties, taxes, capital expenditure and environmental payments), less US$39 million of net interest paid, US$37 million at Salares Norte on exploration, US$65 million (A$92 million) at Gruyere with US$65 million (A$92 million) on capital expenditure and US$nil million (A$nil million) on working capital, as well as US$8 million on non-mine based costs mainly due to working capital movements. Included in the US$198 million above is US$46 million capital expenditure on the Damang reinvestment project.

The US$79 million outflow from operating activities less net capital expenditure and environmental payments and finance lease payments for the six months ended 30 June 2018 comprised: US$71 million net cash generated by the seven mining operations (after royalties, taxes, capital expenditure and environmental payments), less US$18 million of net interest paid, US$35 million at Salares Norte on exploration, US$79 million (A$103 million) at Gruyere with US$66 million (A$86 million) on capital expenditure and US$13 million (A$17 million) on working capital, as well as US$18 million on non-mine based costs mainly due to working capital movements. Included in the US$71 million above is US$66 million capital expenditure on the Damang reinvestment project and US$12 million on South Deep growth capital expenditure.

Net cash flow from financing activities of US$nil million for the six months ended 30 June 2019 compared with US$115 million for the six months ended 30 June 2018. The inflow for the six months ended 30 June 2019 related to a drawdown of US$1,521 million, partially offset by the repayment of US$1,503 million on offshore and local loans and payment of finance lease liabilities of US$17 million. The inflow for the six months ended 30 June 2018 related to a drawdown of US$358 million, partially offset by the repayment of US$243 million on offshore and local loans.

The net cash inflow for the Group of US$137 million for the six months ended 30 June 2019 compared with an inflow of US$24 million for the six months ended 30 June 2018. After accounting for a negative translation adjustment of US$2 million on non-US dollar cash balances, the cash inflow for the six months ended 30 June 2019 was US$135 million. The cash balance at 30 June 2019 of US$535 million compared with US$498 million at 30 June 2018.

All-in sustaining and total all-in cost

The Group all-in sustaining costs increased by 1 per cent from US$965 per ounce for the six months ended 30 June 2018 to US$973 per ounce for the six months ended 30 June 2019 mainly due to higher sustaining capital expenditure and higher cost of sales before amortisation and depreciation partially offset by higher gold sold.

On 14 November 2018 the World Gold Council published an update to its guidance note on the interpretation of all-in sustaining and all-in costs. The note provided additional clarity on what constitutes growth capital expenditure. Gold Fields has considered the new guidance note to ensure the interpretation of the guidelines is consistent with the additional guidance now available and has adopted it prospectively from 1 January 2019. Based on the revised World Gold Council interpretation guidance, all-in sustaining costs for the Group are US$891 per ounce for the six months ended 30 June 2019. One of the benefits of adopting the new standard is closer alignment of our cost reporting with existing practices in our sector.

All-in sustaining cost revised reconciliation

US$/oz		Total Group
AISC per ounce of gold sold (original WGC interpretation)	Year to date 2019	973
Development and infrastructure capital reclassified from sustaining to non-sustaining^#	Year to date 2019	(58)
Exploration expenditure reclassified from sustaining to non-sustaining	Year to date 2019	(24)
AISC per ounce of gold sold (revised WGC interpretation)	Year to date 2019	891

^# Comprising mainly Agnew accommodation village, Granny Smith Zone 110 and 120 lateral development and infrastructure and St Ives Invincible South development and infrastructure.

Total all-in cost decreased by 5 per cent from US$1,169 per ounce for the six months ended 30 June 2018 to US$1,106 per ounce for the six months ended 30 June 2019 due to higher gold sold, lower non-sustaining capital expenditure and lower exploration costs, partially offset by higher cost of sales before amortisation and depreciation and higher sustaining capital expenditure.

In the South Africa region, at South Deep, all-in sustaining costs increased by 4 per cent from R669,306 per kilogram (US$1,699 per ounce) for the six months ended 30 June 2018 to R698,982 per kilogram (US$1,529 per ounce) for the six months ended 30 June 2019 mainly due to lower gold sold, partially offset by lower cost of sales before amortisation and depreciation and lower sustaining capital expenditure.

Based on the revised World Gold Council interpretation guidance, all-in sustaining costs for the South Africa region are R698,982 per kilogram (US$1,529 per ounce) for the six months ended 30 June 2019 i.e. no change.

Total all-in cost decreased by 2 per cent from R715,373 per kilogram (US$1,816 per ounce) for the six months ended 30 June 2018 to R698,982 per kilogram (US$1,529 per ounce) due to the same reasons as for all-in sustaining costs as well as nil spend on non-sustaining capital expenditure for the six months ended 30 June 2019.

At the West Africa region, all-in sustaining costs decreased by 3 per cent from US$924 per ounce for the six months ended 30 June 2018 to US$892 per ounce for the six months ended 30 June 2019 mainly due to higher gold sold and lower sustaining capital expenditure, partially offset by higher cost of sales before amortisation and depreciation. Asanko all-in sustaining costs at US$1,155 per ounce is included for the six months ended 30 June 2019.

Based on the revised World Gold Council interpretation guidance, all-in sustaining costs for the West Africa region are US$892 per ounce for the six months ended 30 June 2019. Total all-in cost decreased by 10 per cent from US$1,114 per ounce for the six months ended 30 June 2018 to US$1,007 per ounce for the six months ended 30 June 2019 due to the same reasons as for all-in sustaining costs, as well as lower non-sustaining capital expenditure at the Damang reinvestment project.

At the South America region, all-in sustaining costs and total all-in cost increased by 47 per cent from US$197 per ounce for the six months ended 30 June 2018 to US$290 per ounce for the six months ended 30 June 2019 mainly due to higher capital expenditure and higher cost of sales before amortisation and depreciation, partially offset by higher gold sold. All-in sustaining costs and total all-in cost per equivalent ounce decreased by 5 per cent from US$737 per equivalent ounce for the six months ended 30 June 2018 to US$698 per equivalent ounce for the six months ended 30 June 2019 due to higher equivalent ounces sold, partially offset by higher capital expenditure and higher cost of sales before amortisation and depreciation.

Based on the revised World Gold Council interpretation guidance, all-in sustaining costs for the South America region are US$264 per ounce and US$684 per equivalent ounce for the six months ended 30 June 2019.

At the Australia region excluding the Gruyere project, all-in sustaining costs and total all-in costs increased by 26 per cent from A$1,166 per ounce (US$900 per ounce) for the six months ended 30 June 2018 to A$1,465 per ounce (US$1,035 per ounce) for the six months ended 30 June 2019 mainly due to lower gold sold, higher cost of sales before amortisation and depreciation due to a gold-in-process charge to cost of A$22 million (US$16 million) for the six months ended 30 June 2019 compared with a gold-in-process credit to cost of A$31 million (US$24 million) for the six months ended 30 June 2018 and higher capital expenditure mainly relating to A$31 million (US$22 million) on the Agnew accommodation village.

Based on the revised World Gold Council interpretation guidance, all-in sustaining costs for the Australia region are A$1,191 per ounce (US$841 per ounce) for the six months ended 30 June 2019.

Statement of financial position

Net debt (borrowings plus the current portion of borrowings and finance lease liabilities less cash and cash equivalents) increased from US$1,612 million for the six months ended 31 December 2018 to US$1,794 million for the six months ended 30 June 2019.

Net debt excluding the effect of IFRS 16 is US$1,498 million at 30 June 2019 compared with US$1,393 million at 30 June 2018.

The difference between the two methods of calculating net debt is the long and short term portion of lease liabilities identified as part of IFRS 16, comprising mainly the Genser power purchase agreement, Granny Smith power plant and Gruyere power plant and gas pipeline.

Net debt/EBITDA

The net debt/EBITDA ratio of 1.59 at 30 June 2019 compared with 1.07 at 30 June 2018. The ratio above includes the effect of adoption of IFRS 16 which marginally increased cost of sales before amortisation and depreciation and substantially increased the net debt due to the inclusion of lease liabilities.

The net debt/EBITDA ratio (excluding the effect of IFRS 16) of 1.36 at 30 June 2019 compared with 1.07 at 30 June 2018.

EBITDA

Adjusted EBITDA for calculating net debt/EBITDA is based on the previous 12 months profit and takes into account the adoption of IFRS 16, which is determined as follows in US$ million:

Reconciliation between operating profit and adjusted EBITDA for the 6 months ended:

US$'m	June 2019	June 2018
Revenue	1,379	1,351
Cost of sales before amortisation and depreciation	(695)	(688)
Environmental rehabilitation interest	6	6
Exploration and project costs	(44)	(56)
Other costs	(33)	(7)
	613	606

Reconciliation between operating profit and adjusted EBITDA for the 12 months ended:

US$'m	June 2019	June 2018
Adjusted EBITDA for 6 months January to June	613	606
Adjusted EBITDA for 6 months July to December	517	701
Adjusted EBITDA for 12 months July to June	1,130	1,307

Non-IFRS measures such as adjusted EBITDA are considered as pro forma financial information as per the JSE Listing Requirements. The pro forma financial information is the responsibility of the Group's Board of Directors and is presented for illustration purposes only and because of its nature, adjusted EBITDA should not be considered a representation of earnings. Adjusted EBITDA is required to be determined in terms of the loan and revolving credit facilities agreements to evaluate compliance with covenants.

Adjusted EBITDA excluding the effect of IFRS 16 is US$1,104 million for the 12 months ended 30 June 2019.

The difference between the two methods of calculating adjusted EBITDA is a net reduction in operating costs relating to contracts identified as leases under IFRS 16.

Free cash flow margin

The free cash flow (FCF) margin is revenue less cash outflow divided by revenue expressed as a percentage.

The FCF for the Group for the six months ended 30 June 2019 is calculated as follows:

	US$’m	US$/oz
Revenue*	1,291.4	1,309
Less: Cash outflow	(1,010.9)	(1,025)
AIC	(1,084.5)	(1,099)
Adjusted for:
Share-based payments (non-cash)	11.2	11
Long-term incentive plan (non-cash)	5.8	6
Revenue hedge	(10.7)	(11)
Exploration, feasibility and evaluation costs outside of existing operations	22.8	23
Non-sustaining capital expenditure (Damang reinvestment and Gruyere)	110.6	112
Tax paid (excluding royalties which is included in AIC above)	(66.1)	(67)
Free cash flow**	280.5	284
FCF margin	22%
Gold sold only – 000’ounces	986.6

*	Revenue from income statement at US$1,378.5 million less revenue from by-products in AIC at US$87.1 million equals US$1,291.4 million.
**	Free cash flow does not agree with cash flows from operating activities less capital expenditure in the statement of cash flows on page 27 mainly due to working capital adjustments and non-recurring items included in the statement of cash flows.
Non-IFRS measures such as free cash flow margin are considered as pro forma financial information as per the JSE Listing Requirements. The pro forma financial information is the responsibility of the Group’s Board of Directors and is presented for illustration purposes only and because of its nature, free cash flow margin should not be considered a representation of earnings. The free cash flow margin is used as a key metric in the determination of the long-term incentive plan.

The FCF margin of 22 per cent for the six months ended 30 June 2019 at a gold price of US$1,298 per ounce compared with 17 per cent for the six months ended 30 June 2018 at a gold price of US$1,306 per ounce.

The higher FCF margin for the six months ended 30 June 2019 was mainly due to higher revenue and lower tax paid.