Gold Fields

Six months ended 30 June 2020 compared with the six months ended 30 June 2019

Results for the Group

Safety

It is with deep sadness that we have to report that Abel Magajane, a shaft timber man, succumbed from injuries sustained after falling down an underground reef ore-pass at South Deep on 3 June 2020. At South Deep a contractor has also died as a result of his COVID-19 infection. We cannot name him – at the request of his family – but our heartfelt condolences go out to his and Abel's families, friends and colleagues.

Our goal is no fatalities or serious injuries and we have redoubled our safety efforts in the light of these setbacks. The total recordable injury frequency rate (TRIFR) for the Group regressed to 2.54 for the six months ended 30 June 2020 from 2.21 for the six months ended 30 June 2019.

  Six months   Year  
Safety H1 19 H2 19 H1 20   FY 19  
Fatalities 1 0 1   1  
TRIFR1 2.21 2.18 2.54   2.19  
1 Total Recordable Injury Frequency rate (TRIFR). (TRIFR) = (Fatalities + Lost Time Injuries2 + Restricted Work Injuries3 + Medically Treated Injuries4) x 1,000,000/ number of hours worked.
2 A Lost Time Injury (LTI) is a work-related injury resulting in the employee or contractor being unable to attend work for a period of one or more days after the day of the injury. The employee or contractor is unable to perform any functions.
3 A Restricted Work Injury (RWI) is a work-related injury sustained by an employee or contractor which results in the employee or contractor being unable to perform one or more of their routine functions for a full working day, from the day after the injury occurred. The employee or contractor can still perform some of his duties.
4 A Medically Treated Injury (MTI) is a work-related injury sustained by an employee or contractor which does not incapacitate that employee and who, after having received medical treatment, is deemed fit to immediately resume his/her normal duties on the next calendar day, immediately following the treatment/re-treatment.

Environmental

No Level 3 – 5 environmental incidents were reported for the six months ended 30 June 2020, as was also the case for the six months ended 30 June 2019.

The Global Industry Standard on Tailings Management (GISTM) was officially launched on 5 August 2020 by the Principles for Responsible Investment, the United Nations Environment Programme and the International Council on Mining & Metals (ICMM), of which we are a member. We will now begin the process of aligning our already stringent standards with the GISTM within the agreed five-year implementation period. A gap analysis against the new standard does not show material weaknesses in our current processes.

Fresh water withdrawal was 5.61 gigalitres for the six months ended 30 June 2020 compared with 7.67 gigalitres for the six months ended 30 June 2019 mainly due to a decrease in water withdrawal at Tarkwa and Cerro Corona because of increased recycling/reuse at both operations. Water recycled/reused was 70% of total water use for the six months ended 30 June 2020, higher than the 68% for the six months ended 30 June 2019, because process water is now reused for cooling at the power plant and for mixing explosives and some chemicals at Tarkwa and optimised recycling/reuse at Cerro Corona during the dry season.

Group energy spend was US$126m (16% of operating costs) for the six months ended 30 June 2020 compared with US$145m (21% of operating costs) for the six months ended 30 June 2019, driven by lower fuel spend following the oil price decline during Q2. For the six months ended 30 June 2020 energy savings of 440 terajoules were achieved (69% of our 2020 target of 640 terajoules) and 7% of H1 energy consumption).

Scope 1 and 2 CO2 emissions were 0.72 million tonnes for the six months ended 30 June 2020 compared with 0.70 million tonnes for the six months ended 30 June 2019, as a result of Gruyere being commissioned, despite lower emissions at Agnew. CO2emissions intensity increased to 8.0kg CO2e/t mined from the 7.2kg CO2e/t reported for the six months to 30 June 2019.

The Granny Smith and Agnew microgrids in Australia were commissioned during H1 2020. Agnew is supplied power by 18MW wind turbines, 16MW gas turbines, 4MW solar and 14MWh battery energy storage system. Granny Smith has a 7MW solar power plant supplementing the gas power plant. During H1 2020, renewable electricity averaged 34% of total energy supply at Agnew and 4% at Granny Smith, with renewables contributing 2% of total Group electricity. As part of the construction of our Salares Norte mine in Chile, to commence in Q4 2020, a 7MW solar power plant will be developed. Gold Fields is still seeking to expedite the regulatory process for a 40MW solar plant at its South Deep mine in South Africa.

Gold Fields published its second climate change report for the 2019 financial year in line with the recommendations of the Task force on Climate-related Financial Disclosures (TCFD). Gold Fields has also included the Sustainability Accounting Standards Board (SASB) key performance metrics in our non-financial data reporting for the first time.

  Six months   Year  
Environmental H1 19 H2 19 H1 20   FY 19  
Environmental Incidents – Level 3-5 0 0 0   0  
Water recycled/reused (% of total) 68 67 70   68  
Fresh water withdrawal (GL)1 7.7 6.4 5.6   14.1  
Energy consumption (PJ)2 5.97 6.53 6.45   12.50  
Energy intensity (MJ/t mined) 62 70 72   66  
CO2 emissions (kt)3 703 753 717   1,456  
CO2 emissions intensity (kg CO2 /t mined) 7.2 8.1 8.0   7.7  
1 Relates to operations only.
2 Petajoules (1 PJ=1,000,000MJ).
3 CO2 emissions comprise Scope 1 and 2 emissions4.
4 Scope 1 emissions arise directly from sources managed by the Company. Scope 2 are indirect emissions generated in the production of electricity used by the Company.

Social

Gold Fields continues to focus on maximising in-country and host community economic impact. The Group's value distribution to national economies was US$1.29bn for the six months ended 30 June 2020 compared with US$1.26bn for the six months ended 30 June 2019. Gold Fields procurement from in-country suppliers, excluding corporate procurement spend, was US$814m for the six months ended 30 June 2020 (96% of total procurement).

Gold Fields aims to sustain the value delivered to host communities through employment, procurement and social investments. Group host community workforce was 8,190 people - 53% of total workforce for the six months ended 30 June 2020 (year-end 2019: 9,269 host community workforce, 55% of total workforce). Group host community procurement spend for the six months ended 30 June 2020 was US$260m – 31% of total spend compared with 34% spend for the six months ended 30 June 2019. The decrease was due to the COVID-19 pandemic and a change of mining contractor at Damang.

Gold Fields invested US$8.4m in socio-economic development (SED) projects in our host communities for the six months ended 30 June 2020, compared with US$13.3m for the six months ended 30 June 2019. The reduction is due to project delays as we observe physical distancing due to COVID-19. The investments are funded through Gold Fields' foundations, trusts and operations.

Women comprised 20% of Gold Fields' workforce at the end of H1 2020, compared with 20% at end-H1 2019. Of the 20%, just over half work in core mining activities. Training spend for the six months ended 30 June 2020 was US$3.2m, compared with US$5.5m for H1 2019 (restated at end 2019).

  Six months   Year  
Social H1 19 H2 19 H1 20   FY 19  
Host community procurement (% of total) 34 33 31   34  
Host community workforce (% of total) 57 55 53   55  
Socio-economic development spending (US$m) 13.3 8.1 8.4   21.4  
Women in workforce (%) 20 20 20   20  
Training spend 5.5 4.6 3.2   10.1  

COVID-19 report

Across the globe the first half of 2020 has been dominated by the political, social and economic impact of the COVID-19 pandemic. It has affected all spheres of life and impacted our employees, contractors and other stakeholders on a personal and professional level. The gold mining sector has been as severely affected as other sectors of the global economy, though there has been relief in the form of the higher gold price. The financial and operational impacts of the pandemic on our Company are discussed in the CEO Statement as well as the Group's and mines' financial results.

As at 17 August 2020, Gold Fields has had a total of 1,361 COVID-19 positive cases among employees and contractors. Currently active cases are 643, of which 13 are receiving care in hospitals. A further 719 are awaiting their test results. The relatively high number of positive cases reflects the high prevalence rate of the pandemic in neighbouring communities at our operations in Peru, Ghana and South Africa. Testing among our workforce is also more stringent than in public health facilities in these countries. One contractor at South Deep and one employee at Cerro Corona tragically passed away after contracting the virus. There have been no cases to date at our Australian mines.

Since the start of the pandemic in March, a Group Exco COVID-19 Crisis Management Team has met weekly to coordinate actions and strategies to mitigate the impact of the pandemic on operations. Regular meetings of the Risk Committee of the Board have also been held to provide governance oversight. Support to employees and contractors, with particular attention to their health and wellness, have been a focus. Regional and site committees have performed similar roles.

Key activities to ensure safe operations include:

  • Strict adherence to all government regulations/protocols;
  • Closure of offices and imposition of travel restrictions;
  • Standard operating procedures on return to work;
  • Social distancing, sanitisation and mask wearing mandatory;
  • Regular communication to employees about COVID-19, assisting them to work remotely and how to deal with the fall-out of the pandemic;
  • Dedicated COVID-19 information portal;
  • Participation in ICMM knowledge sharing; and
  • Social media awareness and return-to-work communication campaigns for employees, communities and others.

Similarly, our operations have actively supported host communities and governments to assist their efforts in controlling the pandemic and assisting people in need. Support to communities has been tailored to country circumstances and has included:

  • Donations to government/industry response funds;
  • Donation of medical equipment;
  • Distribution of food/meals to vulnerable people;
  • Supporting local government efforts such as street sanitisation;
  • Distribution of masks; sanitisers; education leaflets and videos; and
  • Radio and TV campaigns to educate, raise awareness, dispel myths and address stigmatisation and gender-based violence.

Following are detailed regional reports on the impact of the pandemic and actions taken by our operations.

Americas

National context

Both Peru and Chile have high rates of infections and while mining has been declared an essential industry, strict intra-provincial and international travel restrictions were put in place and are, by and large, still operational. In early July, the Peru government lifted the curfew, except in those cities where the outbreak is still severe; this includes Cajamarca province, where a night curfew is in place. Access roads are closed and commercial flights not permitted.

Since March 2020, which marked the beginning of the COVID-19 pandemic in Peru and Chile, Gold Fields has implemented strict protocols to avoid and mitigate its impact on Gold Fields personnel and contractors, as well as to control the pandemic at the Cerro Corona mine in Peru and the Salares Norte project in Chile.

In March a decision was taken to demobilise from the Cerro Corona mine and project sites all personnel with co-morbidities and those older than 60. Full home office was implemented for all administrative and planning activities. Our regional offices in Lima, Cajamarca and Santiago were shut down and working from home introduced.

Given the daylight curfew in Cajamarca we can only receive external supplies during the day, while buses and charter flights for our mining crews are permitted, subject to strict sanitary permits. The mine can operate 24 hours a day.

Peru

Impact on our workforce

COVID-19 report Peru (as at 17 August 2020) Total  
Tested 10,972  
Positive 714  
Negative 9,714  
Awaiting results* 544  
Active cases* 457  
Hospitalised* 5  
Recovered 257  
Died 1  

Note:"Awaiting results", "Active cases" and "Hospitalised" refers to the current figures

As at 17 August 2020, we have had a total of 714 COVID-19 cases among employees and contractors at Gold Fields offices and sites. One employee sadly passed away after contracting the virus. Thirty employees over 60 years of age or with at-risk due to pre-existing health conditions were asked to work from home, where possible. We recruited 4 extra personnel to cover vacant posts as a result of the pandemic. To date, 140 people are working from home, while 807 people are working on the mine (of which 89 are Gold Fields employees).

Mitigating actions

For Cerro Corona to be allowed to operate, the existing protocols require the full screening of incoming shift personnel before starting the shift change, as well as testing at the sites. These procedures apply to both Gold Fields staff and contractors.

The protocol is split into two stages. The first takes place at employees' homes, and the second upon arrival at the mine-site. Both are conducted through the use of PCR tests. People who test positive are reported to local health authorities and a demobilisation procedure is carried out, by which the worker is returned to his/her home, an authorised hotel, or a clinic/hospital, depending on medical advice.

Only people who test negative are permitted to board a flight and/or buses to the mine site. Given that tests are not always reliable we also test our returning employees and contractors when they arrive on site, with the same protocols applying should the test results be positive. Employees are also tested at the end of their roster.

A new roster system was introduced at Cerro Corona to control any potential spread of the virus. The roster is scheduled at 20 days on and 10 days off for all contractors (90% of the people at the site), and 20 days on and 20 days off for Gold Fields personnel. The normal roster is eight days on, six days off.

The Cerro Corona workforce has been configured to operate in small groups (working cells of 3 – 13 people) to minimise mixing, so that, in the event of a positive case at the site, contact tracing is more effective. A cell starts once the worker arrives at the mine site, and only workers within the same cell are permitted to work together, to have meals together and to be in the same two-bed dormitory. To date 89 cells have been established.

These actions were in addition to the hygiene protocols, sanitisation and other educational programmes introduced at the mine.

COVID-19 community programmes

By end-July Gold Fields has made US$267,000 in donations to communities and government organisations in the form of PPE, sanitation campaigns in communities, food and medical supplies, etc). Cerro Corona has also sponsored educational programmes on local community radio. The majority of our programmes were in our host communities and the Cajamarca province. We expect to spend a total of US$524,000 for the year.

Cost and production impact

Cerro Corona's COVID-19 related costs in H1 2020 were US$2.9m and are expected to total US$12.5m for the year – equal to US$57/gold equivalent ounces. Additional costs include capex for new site facilities, such as dining rooms and PCR testing facilities, and charter flights.

Although at the beginning of the pandemic, provincial borders were closed, Cerro Corona engaged with the authorities to enable transport of concentrate to the Port of Salaverry. To date three vessels have been loaded with concentrate from the mine.

Chile

Impact on our workforce

COVID-19 report Chile (as at 17 August 2020) Total  
Tested 829  
Positive 143  
Negative 686  
Awaiting results* 0  
Active cases* 7  
Hospitalised* 0  
Recovered 136  
Died 0  

Note:"Awaiting results", "Active cases" and "Hospitalised" refers to the current figures

As at 17 August 2020, we have had a total of 143 COVID-19 cases among employees and contractors, of which 17 were at the Salares Norte project.

Mitigating actions

Our Salares Norte project has similar access protocols on site as Cerro Corona in Peru. The protocols require full PCR tests at home in the week employees and contractors are scheduled on site. Only negative cases are permitted to bus to the project site, and once at the project, all workers are directed to working cells of 3 – 13 people.

If a worker at Salares Norte is reported to have symptoms, they are directed to the near-by town of Copiapo, where the worker is isolated and placed under quarantine and a PCR test is carried out. If the test comes back positive, the worker is reported to the local health authority and, based on medical advice, is directed home for quarantine, or to a hospital for treatment. His/her entire working cell is also demobilised and subject to PCR tests at Copiapo.

COVID-19 community programmes

Salares Norte expects to spend about US$400,000 during 2020 to assist communities and local authorities in fighting the pandemic, including donations of equipment and PPE to the local hospital in Copiapo, as well as sanitisation campaigns in the city. In H1 2020, US$150,000 had been spent.

Cost and production impact

The extra costs related to COVID-19 programmes are forecast at US$465,000 for the year, which is less than 0.5% of the 2020 total project cost for Salares Norte. Construction of the mine is on schedule to start in Q4 2020, with contractor deliveries and work plans having not been materially impacted by the pandemic. However, the management team demobilised the remaining exploration teams on site to ensure physical distancing in the camp.

Australia

National context

Mining has been designated an "essential' industry by the federal and state governments for the economic stability of Australia and the state of Western Australia and for the recovery from the pandemic.

The size of Western Australia, the relatively small population, and remote mine sites have been to the region's advantage. Three of four mine sites are located in very remote areas and all our employees and contractors are based on Fly In/Fly Out roster arrangements. As of early August 2020 there were only two active COVID-19 cases in Western Australia and both in quarantine. No community transmissions have been recorded recently. The state government of Western Australia has also instigated strict state border closures to all but essential supply chains. Fly in/Fly out workers from other parts of Australia, were initially exempt to enable them to return to work. However, since July, interstate workers are no longer able to travel to Western Australia.

COVID-19 testing in Australia remains the responsibility of medical service providers and designated testing clinics across the country.

Impact on our workforce

As at 17 August 2020, there have been no recorded cases of COVID-19 at Gold Fields mine sites, the Perth regional office, or any mining operation in Australia.

At Gold Fields 70 employees over 65 years of age or with at-risk due to pre-existing health conditions were asked to work from home, where possible, with the full support of the Company for their protection. From July these personnel have been risk-assessed to ensure their health and well-being are protected when they return to work. To date 68 employees have returned to work.

The region implemented an over-recruitment strategy for critical production and professional roles to cover any potential loss of personnel to exposure to the virus. An extra 58 employees were recruited and they remain in place while infection risks exist.

Mitigation actions

Since March 2020, a crisis management team at the Perth office has coordinated daily crisis management, implemented responses, developed communications plans and provided direction and guidance to sites. Infectious disease management plans and an appointed infectious disease manager are in place at each site.

Work rosters at the mines were changed to a predominantly two weeks on/two weeks off rotation to facilitate potential isolation/quarantine that may be required. Following three months of reduced infections in Western Australia and easing of official restrictions, rosters reverted to previous arrangements from July.

Charter flights were increased to site with maximum 60% loading and strict check-in and health check/declarations in place. Temperature checks were instigated. Any person with symptoms or a high temperature were not allowed to report for work. From early July 2020 flight arrangements have reverted to normal travel, with sanitation procedures in place.

At our four mine sites the following additional protocols have been put in place:

  • Physical distancing for all meetings, catering/dining, and work places;
  • Additional security personnel;
  • Increased sanitation and general hygiene measures and additional catering services personnel; and
  • Designated isolation/quarantine areas in accommodation villages and evacuation procedures if required.

From early March all Perth office employees were mandated to work from home or remotely, and leave home only for essential services and supplies. No visitors or meetings with site personnel were permitted. All travel for business was ceased, including to mine sites, to control any potential risk to employees. From July all personnel have returned to Perth office, with strict physical distancing measures in place, but the Company has also approved over 50% of employees to work on flexible work arrangements at their request.

The regional supply and contracts team fully assessed the company supply chain to for critical supplies with special focus on sanitation and hygiene products. Major critical consumables were also risk assessed and re-orders bolstered in response.

COVID-19 community programmes

Gold Fields in Australia has donated A$250,000 to Foodbank (A$100,000), Lifeline (A$100,000), and Royal Flying Doctor (A$50,000) to assist these organisations during the pandemic. The company has also maintained its major sponsorship for Football West. Meals-on-wheels contributions were also made in Kambalda, close to the St Ives mine site.

Cost and production impact

In the Australia region, the cost impact of the pandemic varies slightly between mine sites, but is currently at A$15-A$20/oz. These costs are mainly due to deliberate over-recruitment for critical production roles, additional charter flights, additional catering services arrangements and medical personnel.

If the mines continue to report no COVID-19-positive cases, it could be expected that these costs will reduce gradually in coming months, though they will remain in place for the immediate future to manage risks.

As of 17 August 2020, there have been no production impacts due to the COVID-19 pandemic and full-year production guidance for the region remains unchanged.

South Africa

National context

Since the beginning of March, South Deep has implemented strict protocols to avoid and mitigate the impact of the pandemic on employees and contractors, as well as control potential COVID-19 cases at the mine. In March 2020, South Africa announced a level 5 lockdown for the month of April 2020, which forced the mine to operate only essential pumping services and other critical support functions. All other activities were temporarily ceased.

At the end of April 2020, the lockdown levels were eased to level 4. This allowed the mine to operate at 50% labour force capacity until the end of May when all but vulnerable and foreign employees were allowed to return. With workers only gradually returning from neighbouring countries, and those with co-morbidities still working from home, the mine has been operating at around 75% capacity since then.

For the mine to operate, it has to follow government departments' standard operating procedures (SOPs) and Code of Practice (COP). The mine's own SOPs and COP have been aligned to these. South Deep continues to engage with the Minerals Council of South Africa to collaborate and share best practice within the industry.

Impact on our workforce

COVID-19 report South Deep (as at 17 August 2020) Total  
Tested 3,952  
Positive 330  
Negative 3,503  
Awaiting results* 119  
Active cases* 148  
Hospitalised* 0  
Recovered 181  
Died 1  

Note:"Awaiting results", "Active cases" and "Hospitalised" refers to the current figures

As at 17 August 2020, we have had a total of 330 COVID-19 cases among employees and contractors, of which 148 are active. One contractor at South Deep tragically passed away after contracting the virus. While a noteworthy increase in COVID-19 positive cases was detected toward the middle of July 2020, current results suggest a plateauing and progress will continue to be monitored.

Employees with co-morbidities have been gradually allowed back to the mine with 18% (161) currently on precautionary sick leave. We recruited 30 extra personnel to cover critical interim production staff shortages as a result of the pandemic.

Mitigation actions

The impact of COVID-19 on site is mitigated primarily through rigorous on-site screening and a contracted biochemical laboratory-testing regime. An employee self-declaration form, submitted via the WhatsApp social media platform, provides an access permit on successful completion and temperature monitoring.

The mine has purchased testing equipment which provides for about 80 tests a day with a 24 to 48-hour turn-around time on results. All employees who returned to work for the first time after the easing of lockdown levels, were tested and isolated before they were able to return to work. Mine medical protocols provide for COVID-19 positive and investigated cases to be quarantined at home or at the mine's isolation and quarantine facility managed by an external provider. A mine case manager monitors all cases and contact tracing.

Working protocols have been changed for all office staff and a rotational roster has been implemented to reduce contact and exposure to the virus for these workers. The shaft schedules have also been amended to ensure physical distancing in vertical transport of employees underground, with a limit of 80 employees per conveyance.

COVID-19 community programmes

Local community ranges from donations to assisting local government in their anti-COVID-19 programmes. Some of the key projects and donations include:

  • Over R15m has been donated by South Deep and Corporate Office directors, manages and employees to South Africa's Solidarity Fund, aimed at providing social and economic support to organisations and businesses impacted by the pandemic.
  • A total of R350,000 has been donated to the Minerals Council South Africa's campaign to purchase ventilators for hospitals and clinics in the Eastern Cape.
  • The mine has initiated food security programmes in co-operation with NGOs which feed an average 135 poor households in local communities a day, at a cost of R30,000/month.
  • Over 23,000 COVID-19 information booklets (in English and the dominant vernacular languages) have been distributed to local schools and community organisations.
  • Distribution of over 16,000 face masks to community members and organisations.

South Deep has also teamed up with mining peers to launch an extensive radio campaign in its host communities and labour sending areas to educate community members about the virus, how to deal with it and avoid stigmatisation of those who have contracted it.

Cost and production impact

With 65 – 75% of our core production employees back at work – as a result of the South African borders having been closed, employees testing positive and employees with high risk co-morbidities – the mine was forced to revise its gold production targets down from 8,000kg to 7,000kg for 2020.

Operational costs incurred relate to PPE, sanitisers, medical supplies, testing equipment and kits, and alterations to buildings to set up the mines quarantine and isolation facilities. In H1 2020 these costs totalled R12.9m and are expected to be approximately R40m by the end of 2020. This will represent R178/oz of gold produced based on the new target for the year.

West Africa

National context

After reporting its first two imported cases of COVID-19 on 12 March 2020, the government introduced rigorous measures to prevent infections and contain the spread of the virus, including testing, treatment, closure of facilities and local and international travel restrictions. Since July, Ghana has begun easing restrictions such as reopening of schools, universities and churches as well as limited travel within Ghana, though the country's borders remain closed.

Impact on our workforce

COVID-19 report Ghana (as at 17 August 2020) Total  
Tested 4,327  
Positive 256  
Negative 4,021  
Awaiting results* 56  
Active cases* 46  
Hospitalised* 0  
Recovered 210  
Died 1  

Note: "Awaiting results" and "Active cases" and "Hospitalised" refers to the current figures; the numbers include COVID-19 cases at Galiano Gold/Asanko

As at 17 August 2020, we have had a total of 256 COVID-19 cases among employees and contractors, of which 56 are currently active. While a noteworthy increase in COVID-19 positive cases was experienced during the period May-June, since then numbers of cases have come down sharply. The numbers above include cases at the Asanko gold mine, managed by Galiano Gold. Galiano COO Josephat Zvaipa sadly passed away after contracting COVID-19.

Gold Fields Ghana currently has 166 co-morbid employees working from home or on extended leave. Arrangements are underway to return less exposed co-morbid employees to work without compromising their health and safety. Accra office employees continue to work from home.

Mitigation actions

After an initial surge in cases, mostly among contractors at the Tarkwa mine, Gold Fields Ghana has successfully managed its COVID-19 cases and contained the spread of the virus at the mine sites and the Accra office. Strict adherence to government and company protocols was key, including contact tracing, testing and isolation, appointing host community COVID-19 ambassadors, and travel restrictions, among others. Employees of the two major contractors (E&P and BCM) and Gold Fields employees commute on separate buses.

The ban on travel and non-essential site visits remains in place, however, a new roster system has been introduced at the mines. A 4-2 work roster requires employees to work four weeks and take two weeks off work. Previously different rosters providing a maximum three days off a week were used. Arrangements are in place to manage fatigue during the four-week work period and to test employees for COVID-19 once every month before they resume work. In addition, during the work period, employees are not allowed to travel outside the Tarkwa or Damang host communities.

Tarkwa tested 84% of the workforce in a mass testing programme, though this was partially suspended until a private company, Lancet Laboratories, was approved to perform COVID-19 testing. Damang and Galiano will embark on the mass testing programme as soon as Lancet has caught up the current backlog of Tarkwa tests. The mines' isolation facilities have 86-bed capacity, with two facilities located at Tarkwa and one at Damang.

COVID-19 community programmes

Community support programmes and donations have been channelled via the Gold Fields Ghana Foundation. To date the Foundation has spent about US$261,000, which equates to US$1.34/oz. Items funded and supplied to local clinics and community organisations include hand-held thermometers, sanitisers, face masks, protective gowns, goggles and other PPE. Gold Fields Ghana has also aired radio educational programmes on how to deal with COVID-19 and to prevent stigmatisation of those who have been infected.

Cost and production impact

Gold Fields Ghana to date has spent US$863,000 on programmes and infrastructure to deal with the pandemic, which translates into US$4.42/oz. This includes on-site measures such as isolation facilities, increasing busing and testing facilities, as well as support programmes for government and communities.

The region has taken various steps to increase strategic inventory levels. These include raising stocks of reagents, increasing fuel stocks to maximum tank capacities, and strategic fuel stocks by our suppliers. The region has worked with local suppliers to increase stocks for other critical supplies as well.

A number of projects at the mines have been impacted by the pandemic, as the appointed contractors are prohibited from visiting the sites. Key among them are CIL pump upgrades, installation of drapes on the east wall of the Damang Pit Cutback and a number of Information & Technologies projects.

Revenue

Attributable equivalent gold production, (including Asanko) increased marginally from 1,082,500oz for the six months ended 30 June 2019 to 1,086,700oz for the six months ended 30 June 2020. Attributable equivalent gold production at Asanko increased by 11% from 55,100oz for the six months ended 30 June 2019 to 60,900oz for the six months ended 30 June 2020. Revenue from Asanko is not included in Group revenue as Asanko results are equity accounted.

At the South Africa region, production at South Deep increased by 10% from 2,851kg (91,700oz) for the six months ended 30 June 2019 to 3,123kg (100,400oz) for the six months ended 30 June 2020. The increase was due to the first half of 2019 being impacted by a slow production build-up period post the restructuring in the December quarter 2018. Gold sold increased by 8% from 2,804kg (90,100oz) to 3,042kg (97,800oz).

Attributable gold production at the West African operations (including Asanko), decreased by 4% from 399,500oz for the six months ended 30 June 2019 to 384,400oz for the six months ended 30 June 2020 mainly due to decreased production at Damang following the completion of the Amoanda pit in H1 2019. Managed gold produced and sold at Tarkwa increased marginally from 270,900oz for the six months ended 30 June 2019 to 271,700oz for the six months ended 30 June 2020. At Damang, managed gold produced and sold decreased by 21% from 111,800oz for the six months ended 30 June 2019 to 87,800oz for the six months ended 30 June 2020 mainly due to the completion of the Amoanda pit in H1 2019. Gold produced at Asanko increased by 11% from 55,100oz (45% basis) for the six months ended 30 June 2019 to 60,900oz for the six months ended 30 June 2020. Gold sold increased by 7% from 53,900oz (45% basis) to 58,100oz.

Attributable equivalent gold production at Cerro Corona in Peru decreased by 31% from 156,400oz for the six months ended 30 June 2019 to 108,100oz for the six months ended 30 June 2020 mainly as a result of COVID-19 restrictions on production (18Koz), and a lower price factor (13Koz) as well as lower grades mined in line with the current year plan. Total managed gold equivalent production decreased by 31% from 157,100oz for the six months ended 30 June 2019 to 108,700oz for the six months ended 30 June 2020. Gold equivalent ounces sold decreased by 28% from 156,400oz to 113,000oz.

Gold production at the Australian operations increased by 14% from 434,900oz for the six months ended 30 June 2019 to 493,800oz for the six months ended 30 June 2020 mainly due to the inclusion of Gruyere with the operation reaching commercial levels of production at the end of September 2019. At St Ives, gold production increased marginally from 187,600oz for the six months ended 30 June 2019 to 188,100oz for the six months ended 30 June 2020. Gold sold increased by 8% from 183,200oz to 197,100oz. At Agnew, gold production decreased by 6% per cent from 113,300 ounces for the six months ended 30 June 2019 to 105,900 ounces for the six months ended 30 June 2020. Gold sold decreased by 9% from 115,400oz to 105,500oz. At Granny Smith, gold production increased marginally from 134,000oz for the six months ended 30 June 2019 to 134,100oz for the six months ended 30 June 2020. Gold sold was similar at 133,900oz. At Gruyere gold production for the six months ended 30 June 2020 was 65,700oz with gold sold at 65,000oz.

The average US Dollar gold price achieved by the Group (excluding Asanko) increased by 26% from US$1,298/eq oz for the six months ended 30 June 2019 to US$1,637/eq oz for the six months ended 30 June 2020. The average rand gold price increased by 41% from R600,601/kg to R847,286/kg. The average Australian Dollar gold price increased by 35% from A$1,843/oz to A$2,493/oz. The average US Dollar gold price for the Ghanaian operations (excluding Asanko) increased by 26% from US$1,304/oz for the six months ended 30 June 2019 to US$1,646/oz for the six months ended 30 June 2020. The average equivalent US Dollar gold price, net of treatment and refining charges, for Cerro Corona increased by 29% from US$1,268/eq oz for the six months ended 30 June 2019 to US$1,638/eq oz for the six months ended 30 June 2020. The average US Dollar/Rand exchange rate weakened by 16% from R14.22 for the six months ended 30 June 2019 to R16.50 for the six months ended 30 June 2020. The average Australian/US Dollar exchange rate weakened by 7% from A$1.00 = US$0.71 to A$1.00 = US$0.66.

Gold equivalent ounces sold (excluding Asanko) increased by 1% from 1.06Moz to 1.07Moz.

Revenue increased by 27% from US$1,379m for the six months ended 30 June 2019 to US$1,754m for the six months ended 30 June 2020 due to the higher gold sold and higher gold price received.

Cost of sales before amortisation and depreciation

Cost of sales before amortisation and depreciation increased by 10% from US$695m for the six months ended 30 June 2019 to US$767m for the six months ended 30 June 2020.

At the South Africa region, at South Deep, cost of sales before amortisation and depreciation increased by 2% from R1,669m (US$117m) for the six months ended 30 June 2019 to R1,705m (US$103m) for the six months ended 30 June 2020.

At the West Africa region, (excluding Asanko), cost of sales before amortisation and depreciation increased by 23% from US$216m for the six months ended 30 June 2019 to US$265m for the six months ended 30 June 2020 mainly due to a 9mt increase in operational waste tonnes mined (capital waste tonnes decreased by 12mt) at Damang following the intersection of the main orebody, as well as a gold-in-process charge of US$6m for the six months ended 30 June 2020 compared with gold-in-process credit of US$20m for the six months ended 30 June 2019. The net gold-in-process movement at Tarkwa was US$19m and at Damang was US$7m. In line with the current year plan Tarkwa is supplementing ore feed to the plant with lower grade stockpile material.

At the South America region, at Cerro Corona, cost of sales before amortisation and depreciation decreased by 2% from US$81m for the six months ended 30 June 2019 to US$79m for the six months ended 30 June 2020.

At the Australia region, cost of sales before amortisation and depreciation increased by 23% from A$397m (US$280m) for the six months ended 30 June 2019 to A$487m (US$320m) for the six months ended 30 June 2020 mainly due to the inclusion of Gruyere with the mine reaching commercial levels of production at the end of September 2019.

Amortisation and depreciation

Amortisation and depreciation for the Group increased by 4% from US$292m for the six months ended 30 June 2019 to US$305m for the six months ended 30 June 2020 mainly due to the inclusion of Gruyere with the mine reaching commercial levels of production at the end of September 2019.

Other

Net interest expense for the Group increased by 32% from US$31m for the six months ended 30 June 2019 to US$41m for the six months ended 30 June 2020 mainly due to lower interest capitalised in the six months ended 30 June 2020 with Gruyere reaching commercial levels of production in September 2019. Interest expense of US$56m, partially offset by interest income of US$3m and interest capitalised of US$12m for the six months ended 30 June 2020 compared with interest expense of US$51m, partially offset by interest income of US$3m and interest capitalised of US$17m for the six months ended 30 June 2019.

The share of results of equity accounted investees after taxation of US$29m for the six months ended 30 June 2020 compared with a loss of US$1m for the six months ended 30 June 2019. The equity accounted earnings of Asanko for the six months ended 30 June 2020 of US$29m compared with US$nil m for the six months ended 30 June 2019. The increase was mainly due to the higher gold price and higher production for the six months ended 30 June 2020.

The gain on foreign exchange of US$12m for the six months ended 30 June 2020 compared with US$nil m 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$275m for the six months ended 30 June 2020 comprised a loss on hedges of US$274m and a loss on valuation of options of US$1m. The loss on hedges of US$274m includes realised losses of US$166m and unrealised losses of US$108m. The realised losses of US$166m comprised losses realised on the South Deep gold hedge of R544m (US$33m), the Australia gold hedge of A$140m (US$92m), the Ghana gold hedge of US$36m, Ghana oil hedge of US$3m and Australia oil hedge of A$2m (US$2m). The unrealised losses of US$108m comprised losses on the South Deep gold hedge of R910m (US$54m), the Australia gold hedge of A$25m (US$16m), the Ghana gold hedge of US$23m, Ghana oil hedge of US$17m and Australia oil hedge of A$14m (US$9m), partially offset by an unrealised gain on the Chilean currency hedge of US$11m.

The loss on valuation of options of US$1m relates to the Maverix options.

This compared with a loss on financial instruments of US$109m for the six months ended 30 June 2019 comprising a loss on hedges of US$114m and a gain on valuation of shares and options of US$5m.

The loss on hedges of US$114m included realised losses of US$6m and unrealised losses of US$108m. The realised losses of US$6m comprised losses realised on the Australia gold hedge of A$14m (US$10m) and the Australia currency hedge of A$7m (US$4m), partially offset by realised gains on the Ghana gold hedge of US$2m, Ghana oil hedge of US$3m, Peruvian copper hedge of US$1m and Australia oil hedge of A$2m (US$2m). The unrealised losses of US$108m comprised losses on the South Deep gold hedge of R136m (US$10m), the Australia gold hedge of A$123m (US$87m), the Ghana gold hedge of US$10m and the Peruvian copper hedge of US$1m.

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

Share-based payments for the Group decreased by 36% from US$11m for the six months ended 30 June 2019 to US$7m for the six months ended 30 June 2020 mainly due to an additional vesting of share-based payments. The long-term incentive plan increased from US$6m to US$25m due to the current marked-to-market valuation of the plan reflecting current performance, as well as the allocation in 2020.

Other costs for the Group decreased by 25% from US$36m for the six months ended 30 June 2019 to US$27m for the six months ended 30 June 2020 and mainly related to lower social spend at Cerro Corona in the six months ended 30 June 2020 and the completion of the Damang road in the six months ended 30 June 2019.

Exploration and project expenses

Exploration and project expenses decreased by 18% from US$44m for the six months ended 30 June 2019 to US$36m for the six months ended 30 June 2020 mainly due to lower exploration spend as a result of the approval of the feasibility study of Salares Norte and the subsequent capitalisation of costs to the project as from 1 April 2020. The US$36m spend for the six months ended 30 June 2020 included US$19m spend at Salares Norte comprising US$11m related to pre-capitalisation spend and US$8m related to exploration activities. The balance of US$17m related to exploration spend at the other operations.

Non-recurring items

Non-recurring income of US$1m for the six months ended 30 June 2020 compared with US$19m for the six months ended 30 June 2019.

Non-recurring income of US$1m for the six months ended 30 June 2020 mainly includes:

  • US$20m income related to a submission of historic VAT claim for expenses incurred from 2010 to June 2020 to the Chilean tax authority which become claimable from the commencement of construction;
  • US$10m impairment of drilling costs at Damang. Based on technical and economic parameters of various studies, all assets related to the Amoanda-Tomento corridor were impaired;
  • net impairment of FSE of US$2m. The impairment of FSE was based on the fair value less cost of disposal of the investment which was indirectly derived from the market value of Lepanto Consolidated Mining Company;
  • donations made to various bodies in response to COVID-19 of US$2m; and
  • other costs of US$5m mainly related to the capital raising in February 2020.

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

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

Royalties

Government royalties for the Group increased by 41% from US$34m for the six months ended 30 June 2019 to US$48m for the six months ended 30 June 2020 in line with the higher revenue.

Taxation

The taxation charge for the Group of US$103m for the six months ended 30 June 2020 compared with US$62m for the six months ended 30 June 2019. Normal taxation increased by 84% from US$83m for the six months ended 30 June 2019 to US$153m for the six months ended 30 June 2020 in line with the higher profit before tax. The deferred tax credit of US$49m for the six months ended 30 June 2020 compared with US$21m for the six months ended 30 June 2019.

Profit

Net profit attributable to owners of the parent for the Group of US$156m or US$0.18 per share for the six months ended 30 June 2020 compared with net profit of US$71m or US$0.09 per share for the six months ended 30 June 2019.

Headline earnings attributable to owners of the parent for the Group of US$173m or US$0.20 per share for the six months ended 30 June 2020 compared with headline earnings of US$40m or US$0.05 per share for the six months ended 30 June 2019.

Normalised profit for the Group of US$323m or US$0.37 per share for the six months ended 30 June 2020 compared with US$126m or US$0.15 per share for the six months ended 30 June 2019.

Normalised profit

Normalised profit reconciliation for the Group is calculated as follows:

  Six months ended  
US$’m June
2020
  June
2019
 
Profit for the period attributable to owners of the parent 155.5   70.5  
Non-recurring items (1.0)   (19.0)  
Tax effect of non-recurring items (4.0)   (0.1)  
Non-controlling interest effect of non-recurring items (0.7)    
(Gain)/loss on foreign exchange (12.0)   0.1  
Tax effect of gain on foreign exchange 2.5    
Non-controlling interest effect of gain on foreign exchange 0.3   —   
Loss on financial instruments 275.0   109.4  
Tax effect of loss on financial instruments (86.9)   (34.2)  
Non-controlling interest effect of loss on financial instruments (5.3)   (0.5)  
Normalised profit attributable to owners of the parent 323.4   126.2  

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. Normalised profit is defined as profit excluding gains and losses on foreign exchange, financial instruments and non-recurring items after taxation and non-controlling interest effect.

Cash flow

Cash inflow from operating activities of US$549m for the six months ended 30 June 2020 compared with US$456m for the six months ended 30 June 2019. The increase of 20% was mainly due to a higher profit before royalties and taxation. This was partially offset by a higher royalties and taxation payment, as well as an investment of working capital of US$22m compared with a release of working capital of US$2m.

Dividends paid of US$53m for the six months ended 30 June 2020 compared with US$12m for the six months ended 30 June 2019 and comprised dividends paid to owners of the parent related to the final dividends paid for 2019 and 2018, respectively.

Cash outflow from investing activities of US$251m for the six months ended 30 June 2020 compared with US$277m for the six months ended 30 June 2019. Capital expenditure decreased from US$356m to US$236m.

Sustaining capital expenditure, (excluding Asanko), increased by 11% from US$162m for the six months ended 30 June 2019 to US$180m for the six months ended 30 June 2020, while non-sustaining capital expenditure (excluding Asanko), decreased by 71% from US$196m for the six months ended 30 June 2019 to US$56m for the six months ended 30 June 2020. This movement is mainly attributable to Australia where projects like Invincible South and Hamlet at St Ives, Zone 110-120 at Granny Smith and Gruyere development all turned cash flow positive resulting in a movement from growth to sustaining capital expenditure in accordance with the revised World Gold Council interpretation. Growth expenditure of US$56m in the six months ended 30 June 2020 comprised US$21m at the Australian operations, US$19m at Salares Norte, US$11m at Cerro Corona and US$5m at Damang. Growth expenditure of US$196m in the six months ended 30 June 2019 comprised US$84m at the Australian operations, US$65m at Gruyere, US$46m at Damang and US$1m at Cerro Corona.

In the South Africa region at South Deep, capital expenditure decreased by 3% from R250m (US$18m) for the six months ended 30 June 2019 to R242m (US$15m) for the six months ended 30 June 2020 mainly due to reduced overall spending as a result of the COVID-19 pandemic.

At the West Africa region, (excluding Asanko), capital expenditure decreased by 36% from US$118m to US$76m. At Tarkwa, capital expenditure was similar at US$68m. Capital expenditure at Damang decreased by 84% from US$50m to US$8m mainly due to a reduction in capital waste tonnes mined.

Capital expenditure at Asanko (on a 100% basis) amounted to US$28m for the six months ended 30 June 2020 compared with US$36m for the six months ended 30 June 2019. The Asanko capital expenditure is not included in the Group capital expenditure.

At the South America region at Cerro Corona, capital expenditure increased by 19% from US$16m to US$19m mainly due to construction capital on the Arpon waste storage facility and infrastructure reallocation activities related to the extension of the life of mine to 2030.

At the Australia region, capital expenditure (excluding Gruyere construction capital), decreased by 17% from A$195m (US$138m) for the six months ended 30 June 2019 to A$161m (US$106m) for the six months ended 30 June 2020. At St Ives, capital expenditure decreased by 21% from A$72m (US$51m) to A$57m (US$37m) mainly due to the development of the Invincible and Hamlet North underground mines in 2019. At Agnew, capital expenditure decreased by 49% from A$78m (US$55m) to A$40m (US$26m) mainly due to expenditure on the new accommodation village in 2019. At Granny Smith, capital expenditure increased by 7% from A$46m (US$33m) for the six months ended 30 June 2019 to A$49m (US$32m) for the six months ended 30 June 2020. At Gruyere, capital expenditure for the six months ended 30 June 2020 was A$15m (US$10m). During the six months ended 30 June 2019 construction capital at Gruyere amounted to A$92m (US$65m). Gruyere reached commercial levels of production at the end of September 2019.

Proceeds on disposal of capital equipment of US$nil m for the six months ended 30 June 2020 compared with US$1m for the six months ended 30 June 2019.

Purchase of investments of US$6m for the six months ended 30 June 2019 related to Gold Fields subscription to a 16.1% share interest in Chakana Copper Corporation.

Redemption of Asanko preference shares amounted to US$38m in the six months ended 30 June 2020 and compared to US$nil m in the six months ended 30 June 2019.

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

Loan advanced to contractors in Ghana for fleet replacement in the six months ended 30 June 2020 amounted to US$68m. These loans are interest bearing, secured and are recoupable over three years (2021 – 2024).

Proceeds on disposal of investments for the six months ended 30 June 2020 amounted to US$23m and related to the sale of 81 million shares in ASX-listed Cardinal Resources Limited. Proceeds on disposal of investments for the six months ended 30 June 2019 amounted to US$21m and related to the sale of 247 million shares (19.9% holding) in ASX-listed Company Red 5.

Environmental payments increased from US$4m for the six months ended 30 June 2019 to US$5m for the six months ended 30 June 2020.

Cash inflow from operating activities less net capital expenditure, environmental payments, redemption of Asanko preference shares and lease payments of US$320m for the six months ended 30 June 2020 compared with a cash inflow of US$80m for the six months ended 30 June 2019 mainly due to higher inflow from operating activities and lower capital expenditure.

The US$320m cash flow from operating activities less net capital expenditure, environmental payments, redemption of Asanko preference shares and lease payments for the six months ended 30 June 2020 comprised: US$405m net cash generated by the eight mining operations (after royalties, taxes, capital expenditure and environmental payments) plus redemption of Asanko preference shares of US$38m, less US$51m of net interest paid, US$47m at Salares Norte on exploration and construction capital, as well as US$25m on non-mine based costs mainly due to working capital movements.

The US$80m cash flow from operating activities less net capital expenditure and environmental payments and lease payments for the six months ended 30 June 2019 comprised: US$229m net cash generated by the seven mining operations (after royalties, taxes, capital expenditure and environmental payments), less US$39m of net interest paid, US$37m at Salares Norte on exploration, US$65m (A$92m) at Gruyere with US$65m (A$92m) on capital expenditure and US$nil m (A$nil m) on working capital, as well as US$8m on non-mine based costs mainly due to working capital movements. Included in the US$229m above is US$46m capital expenditure on the Damang reinvestment project.

Net cash flow from financing activities of US$210m for the six months ended 30 June 2020 compared with US$105m for the six months ended 30 June 2019. The inflow for the six months ended 30 June 2020 related to shares issued of US$249m and a loan drawdown of US$41m, partially offset by the repayment of US$58m on offshore loans and payment of lease payments of US$22m. The inflow for the six months ended 30 June 2019 related to a drawdown of US$1,514m, partially offset by the repayment of US$1,392m on offshore and local loans and payment of lease payments of US$17m.

The net cash inflow for the Group of US$454m for the six months ended 30 June 2020 compared with US$273m for the six months ended 30 June 2019. After accounting for a negative translation adjustment of US$29m on non-US Dollar cash balances, the cash inflow for the six months ended 30 June 2020 was US$426m. The cash balance at 30 June 2020 of US$941m compared with US$490m at 30 June 2019.

All-in sustaining and total all-in cost

The Group all-in sustaining costs increased by 11% from US$891/oz for the six months ended 30 June 2019 to US$987/oz for the six months ended 30 June 2020 mainly due to higher sustaining capital expenditure and higher cost of sales before amortisation and depreciation, partially offset by higher gold sold.

Total all-in cost decreased by 4% from US$1,106/oz for the six months ended 30 June 2019 to US$1,065/oz for the six months ended 30 June 2020 due to higher gold sold and lower non-sustaining capital expenditure, partially offset by higher cost of sales before amortisation and depreciation and higher sustaining capital expenditure.

Statement of financial position

Net debt decreased from US$1,664m at 31 December 2019 to US$1,239m at 30 June 2020.

Net debt excluding lease liabilities decreased from US$1,331m at 31 December 2019 to US$876m at 30 June 2020.

Net debt is defined by the Group as total borrowings and lease liabilities less cash and cash equivalents.

Net debt/adjusted EBITDA

The net debt/adjusted EBITDA ratio of 0.84 at 30 June 2020 compared with 1.59 at 30 June 2019.

Adjusted EBITDA

Adjusted EBITDA for calculating net debt/adjusted EBITDA is based on the year ended 30 June 2020 profit and takes into account the adoption of IFRS 16, which is determined as follows in US$ million:

US$’m June 2020  
Revenue 3,343   
Cost of sales before amortisation and depreciation (1,496)  
Exploration and project costs (77)  
Other costs* (300)  
  1,470   

*Other costs relate mostly to the hedge losses for the year.

Adjusted EBITDA is defined by the Group as profit or loss for the year adjusted for interest, taxation, amortisation and depreciation and certain other costs.

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 2020 is calculated as follows:

  Six months ended    
US$’m US$’m US$/oz    
Revenue1 1,691.4 1,6474    
Less: Cash outflow (1,251.0) (1,217)    
AIC (1,092.9)2 (1,064)    
Adjusted for:        
Share-based payments (non-cash) 6.7 7    
Long-term employee benefits (non-cash) 25.4 25    
Exploration, feasibility and evaluation costs outside of existing operations 19.9 19    
Non-sustaining capital expenditure (Damang reinvestment and Salares Norte) 24.1 23    
Revenue hedge (realised) (161.5) (157)    
Redemption of Asanko preference shares 37.5 37    
Tax paid (excluding royalties which is included in AIC above) (110.2) (107)    
Free cash flow3 440.4 430    
FCF margin 26%      
Gold sold only – 000’oz 1,026.9      
1 Revenue from income statement at US$1,754.3m less revenue from Cerro Corona by-products in AIC at US$62.9m equals US$1,691.4m.
2 AIC for the Group of US$1,155.8m less AIC for Asanko of US$62.9m.
3 Free cash flow does not agree with cash flows from operating activities less capital expenditure in the statement of cash flows mainly due to working capital adjustments and non-recurring items included in the statement of cash flows.
4 Calculated by dividing revenue by gold sold only.

The free cash flow margin (adjusted for realised revenue hedges and redemption of Asanko preference shares) is used as a key metric in the determination of the long-term incentive plan.

The FCF margin of 26% for the six months ended 30 June 2020 at a gold price of US$1,636/oz compared with 22% for the six months ended 30 June 2019 at a gold price of US$1,298/oz. The higher FCF margin is due to the higher revenue.