Gold Fields

Review of Operations

Year ended December 2019 compared with year ended December 2018

South Africa region

South Deep

      Year ended  
 
Dec
2019
   Dec
2018
%
Variance
  
Ore mined 000 tonnes   1,060   836 27%  
Waste mined 000 tonnes   77   200 (61)%  
Total tonnes mined 000 tonnes   1,138   1,036 10%  
Grade mined – underground reef   g/t     6.17     6.04   10%  
Grade mined – underground total   g/t     5.75     4.87   18%  
Gold mined 000’oz   210.4   162.3 30%  
  kg   6,546   5,048 30%  
Destress m2   26,606   18,793 42%  
Development m   4,412   5,047 (13)%  
Secondary support*   m     9,670     9,312   4%  
Backfill m3   426,338   241,334 77%  
Tonnes milled 000 tonnes   1,666   1,320 26%  
Yield – underground reef   g/t     6.21     5.85   6%  
Surface yield g/t   0.16   0.14 14%  
Total yield g/t   4.15   3.70 12%  
Gold produced 000’oz   222.1   157.1 41%  
  kg   6,907   4,885 41%  
Gold sold 000’oz   222.1   167.8 32%  
  kg   6,907   5,220 32%  
AISC – original interpretation   R/kg     585,482     807,688   (28)%  
  US$/oz   1,259   1,903 (34)%  
AISC – revised interpretation guidance (WGC November 2018)   R/kg     585,482     —   —  
  US$/oz   1,259    
AIC R/kg   585,482   854,049 (31)%  
  US$/oz   1,259   2,012 (37)%  
Sustaining capital expenditure   Rm     479.1     528.0   (9)%  
  US$m   33.1   40.0 (17)%  
Non-sustaining capital expenditure   Rm         242.0   (100)%  
  US$m     18.3 (100)%  
Total capital expenditure   Rm     479.1     769.9   (38)%  
  US$m   33.1   58.3 (43)%  
Net cash flow Rm   221.2   (1,923.2) 112%  
  US$m   15.3   (145.7) 111%  

* Secondary support figures excludes shotcrete.

Gold production increased by 41% to 6,907 kilograms (222,100 ounces) in 2019 from 4,885 kilograms (157,000 ounces) in 2018 exceeding guidance of 6,000 kilograms (193,000 ounces). The increased gold production resulted from an increase in both volume and grade mined. The current mine (95 level and above) contributed 40% of the ore tonnes in 2019 (55% in 2018), while the New Mine (North of Wrench) contributed 60% (45% in 2018).

Capital expenditure decreased by 38% to R479 million (US$33 million) in 2019 from R770 million (US$58 million) in 2018, driven by the decrease in non-sustaining capital expenditure, which was communicated as part of the restructuring at the end of 2018 with the temporary suspension of New Mine development in 2019.

Sustaining capital expenditure decreased by 9% to R479 million (US$33 million) in 2019 from R528 million (US$40 million) in 2018 mainly due to lower spend on underground fleet and shaft infrastructure upgrade projects, of which the bulk was completed in 2018. Non-sustaining capital expenditure decreased by 100% to Rnil (US$nil) in 2019 from R242 million (US$18 million) in 2018 due to the temporary suspension of New Mine development activities.

All-in sustaining costs decreased by 28% to R585,482/kg (US$1,259/oz) in 2019 from R807,688/kg (US$1,903/oz) in 2018 mainly due to higher gold sold, lower sustaining capital expenditure and lower cost of sales before amortisation and depreciation. Total all-in cost decreased by 31% to R585,482/kg (US$1,259/oz) in 2019 from R854,049/kg (US$2,012/oz) in 2018 due to the same reasons as above, together with the temporary postponement of non-sustaining capital. All-in costs were 4% below guidance of R610,000/kg (US$1,394/oz).

South Deep demonstrated a remarkable improvement in most production metrics, resulting from a culmination of initiatives driving organisational culture, systems, processes, technical improvements and foundational work conducted in 2018. The improvement process has focused on:

Enabling Visible Felt Leadership (PVFL);
Reinvigorating our leadership system;
Improving face time;
Improving effectiveness of face time;
Driving enabling logistics; and
Implementing of innovation and technology.

Development decreased by 13% to 4,412 metres in 2019 from 5,047 metres in 2018, due to a 96% decrease in New Mine capital development to 41 metres in 2019 from 988 metres in 2018. The decrease in New Mine development metres was partially offset by an increase in on-reef development. The decrease in New Mine development was once again communicated as part of South Deep’s turnaround strategy. This development will be restarted in H2 2020 and accelerated in order to open up new mining areas for the production build-up.

Destress square metres mined increased by 42% to 26,606 square metres in 2019 from 18,793 square metres in 2018. Longhole stoping volumes mined increased by 36% to 631,281 tonnes in 2019 from 463,348 tonnes in 2018, as a result of improved stope availability, equipment productivity and extraction quality.

A record volume (426,338m3) of backfill was placed in 2019. Coupled with this achievement, there has been a significant reduction of backfill backlog and an improvement in stope turnaround time to an average of 4.9 months in 2019 from 7.8 months in 2018. Significant enhancements have also been made to both quality and process controls which have underpinned the achievement.

The mine's overall productivity improved to 33.4 tonnes per employee costed in 2019 from 21.7 tonnes per employee costed in 2018.

South Deep generated net cash of R221m (US$15m) in 2019 compared to an outflow of R1,923m (US$146m) in 2018.

Guidance

The estimate for 2020 is as follows:

Gold produced ~ 8,000kg (257,000 ounces) of which 200,000 ounces of gold were hedged at an average price of R670,700/kg;
Destress square metres ~ 44,000 square metres;
Development metres ~ 8,040 metres (including ~ 1,098 metres from New Mine Development, 2,894 metres from Normal development and 4,048 metres from Destress);
Sustaining capital expenditure ~ R775 million (US$53 million);
Non-sustaining capital expenditure ~ R220 million (US$15 million);
All-in sustaining costs ~ R598,000/kg (US$1,283/oz); and
Total all-in cost ~ R625,000/kg (US$1,340/oz).

As communicated with the restructuring announcement at the end of 2018, capital expenditure was purposefully cut back in 2019 to focus the team on improving short-term metrics. The increase in capital expenditure in 2020 compared to 2019 is a result of capital returning to normalised levels.

West Africa region

Ghana*

      Year ended  
 
Dec
2019
   Dec
2018
%
Variance
  
Gold produced 000’oz   840.4   750.2 12%  
AISC – original interpretation US$/oz   942   926 2%  
AISC – revised interpretation guidance (WGC November 2018) US$/oz   942    
AIC US$/oz   1,039   1,098 (5)%  
Net cash flow US$m   173.8   44.5 291%  

* 2018 includes Asanko for five months.

Total managed production increased by 12% to 840koz in 2019 from 750koz in 2018, driven by the build-up in production at Damang and the inclusion of a full 12 months’ worth of production from Asanko (2018 only included Asanko production for five months from 1 August 2018).

All-in sustaining costs increased by 2% to US$942/oz in 2019 from US$926/oz in 2018 while all-in costs decreased by 5% to US$1,039/oz in 2019 from US$1,098/oz in 2018 as the project capital at Damang rolled off.

The region produced net cash flow of US$174m in 2019 compared to US$45m in 2018.

Tarkwa

      Year ended  
 
Dec
2019
   Dec
2018
%
Variance
  
Ore mined 000 tonnes   15,029   14,176 6%  
Waste mined 000 tonnes   77,494   75,471 3%  
Total tonnes mined 000 tonnes   92,523   89,647 3%  
Grade mined g/t   1.23   1.26 (2)%  
Gold mined 000’oz   594.4   572.1 4%  
Strip ratio     5.2   5.3 (2)%  
Tonnes milled 000 tonnes   13,749   13,791 0%  
Yield g/t   1.17   1.18 0%  
Gold produced 000’oz   519.1   524.9 (1)%  
Gold sold 000’oz   519.1   524.9 (1)%  
AISC – original interpretation   US$/oz     958     951   1%  
AISC – revised interpretation guidance (WGC November 2018)   US$/oz     958     —   —  
AIC US$/oz   958   951 1%  
Sustaining capital expenditure   US$m     125.5     156.1   (20)%  
Non-sustaining capital expenditure   US$m         —   0%  
Total capital expenditure   US$m     125.5     156.1   (20)%  
Net cash flow US$m   150.0   112.1 34%  

Gold production decreased by 1% to 519,100 ounces in 2019 from 524,900 ounces in 2018 but was 1% ahead of guidance of 514,000 ounces. All-in sustaining costs and total all-in cost increased by 1% to US$958/oz in 2019 from US$951/oz in 2018 due to lower gold sold, partially offset by lower capital expenditure and were 1% higher than guidance of US$949/oz.

Tarkwa generated net cash flow of US$150m in 2019 compared to US$112m in 2018.

Guidance

The estimate for 2020 is as follows:

Gold produced ~ 510,000 ounces;
Capital expenditure ~ US$150 million;
All-in sustaining costs ~ US$970/oz; and
Total all-in cost ~ US$970/oz.

Damang

      Year ended  
 
Dec
2019
   Dec
2018
%
Variance
  
Ore mined 000 tonnes   4,680   4,495 4%  
Waste mined 000 tonnes   29,418   41,442 (29)%  
Total tonnes mined 000 tonnes   34,098   45,937 (26)%  
Grade mined g/t   1.58   1.68 (6)%  
Gold mined 000’oz   237.9   242.3 (2)%  
Strip ratio     6.3   9.2 (32)%  
Tonnes milled 000 tonnes   4,645   4,205 10%  
Total yield g/t   1.40   1.34 4%  
Gold produced 000’oz   208.4   180.8 15%  
Gold sold 000’oz   208.4   180.8 15%  
AISC – original interpretation   US$/oz     809     813 (1)%  
AISC – revised interpretation guidance (WGC November 2018)   US$/oz     809     —  
AIC US$/oz   1,147   1,506 (24)%  
Sustaining capital expenditure   US$m     5.8     13.5 (57)%  
Non-sustaining capital expenditure   US$m     70.5     125.0 (44)%  
Total capital expenditure   US$m     76.3     138.5 (45)%  
Net cash flow US$m   23.8   (67.6) 135%  

Gold production increased by 15% to 208,400 ounces in 2019 from 180,800 ounces in 2018 mainly due to higher head grade and tonnes treated. This was 4% lower than guidance of 218,000 ounces.

During H2 2019, production was impacted by a negative grade reconciliation as the mine transitioned through the Huni sandstone lithology which exhibited more variable grades than anticipated. The transition through the Huni sandstones will continue during H1 2020 and be completed by mid-year, at which point mining will occur in the higher (and more consistent) grade Tarkwa phyllites. The Huni sandstones make up less than 5% of reserves, the bulk of which will be mined by the end of 2020.

All-in sustaining cost decreased slightly to US$809/oz in 2019 from US$813/oz in 2018 due to higher gold sold, partially offset by higher cost of sales before amortisation and depreciation.

All-in cost decreased by 24% to US$1,147/oz in 2019 from US$1,506/oz in 2018 due to higher gold sold and lower non-sustaining capital.

Total capital expenditure decreased by 45% to US$76 million in 2019 from US$139 million in 2018 due to lower capital waste tonnes mined. Operational waste tonnes mined increased 56% to 12.2mt and capital waste tonnes mined decreased 49% to 17.2mt in 2019. Non-sustaining capital expenditure decreased by 44% to US$71 million in 2019 from US$125 million in 2018, in line with the Damang reinvestment project (DRP) schedule.

Sustaining capital expenditure decreased by 57% to US$6m in 2019 from US$14m in 2018 mainly due to the installation of a new SAG mill shell and other engineering projects undertaken in 2018. At the end of the December 2019 quarter, 36 months into the Damang reinvestment project (DRP), total material mined amounted to 120 million tonnes, 17% ahead of the project schedule. Gold produced for the same period was 532,800 ounces, 17% above the DRP plan of 456,460 ounces. Project capital spent as at 31 December 2019 was US$347 million versus the DRP budget of US$313 million, largely driven by the additional capital waste tonnes mined.

Damang generated net cash flow of US$24m in 2019 compared to a cash outflow of US$68m in 2018. This is the first year of positive free cash since the start of the reinvestment.

Guidance

The estimate for 2020 is as follows:

Gold produced ~ 215,000 ounces;
Sustaining capital expenditure ~ US$8 million;
Growth capital expenditure ~ US$10 million;
All-in sustaining costs ~ US$990/oz; and
Total all-in cost ~ US$1,030/oz.

Given the fact that Damang will continue to mine the Huni sandstone lithology during H1 2020 before reaching the higher grade Tarkwa phyllites around mid-year, mined grade is expected to be lower in H1 2020 before improving in H2 2020. Gold production will thus be lower in the first half of the year relative to the second half. This will have a negative impact on AISC and AIC which are expected to be elevated in H1 2020 before decreasing significantly in the second half of the year. This is line with the DRP.

Asanko (Equity accounted Joint Venture)

      Year ended  
 
Dec
2019
   5 months
ended
Dec 2018
%
Variance
  
Ore mined 000 tonnes   5,071   2,500 103%  
Waste mined 000 tonnes   25,719   14,400 79%  
Total tonnes mined   000 tonnes     30,791     16,900   82%  
Grade mined g/t   1.52   1.48 3%  
Gold mined 000’oz   248   119 108%  
Tonnes milled 000 tonnes   5,498   2,100 162%  
Total yield g/t   1.42   1.50 (5)%  
Gold produced 000’oz   251.0   98.9 154%  
Gold sold 000’oz   248.9   102.1 144%  
AISC – original interpretation   US$/oz     1,112     1,069   4%  
AISC – revised interpretation guidance (WGC November 2018)   US$/oz     1,112     —   —  
AIC US$/oz   1,214   1,175 3%  
Sustaining capital expenditure   US$m     43.5     18.0   142%  
Non-sustaining capital expenditure   US$m     16.1     11.0   46%  
Total capital expenditure   US$m     59.6     29.0   106%  

All figures in table 100% basis.

Asanko produced 251,000 ounces in 2019, of which 113,000 ounces was attributable to Gold Fields. This compares to the 44,500 ounces attributable to Gold Fields for the five months from August to December in 2018.

All-in sustaining cost increased 4% to US$1,112/oz in 2019 from US$1,069/oz in 2018 and all-in cost increased 3% to US$1,214/oz in 2019 from US$1,175/oz in 2018. A detailed cost and efficiency review was initiated by the JV partners during 2019. The review is ongoing and we will update the market once it has been completed.

On 28 November there was a pit wall failure on the west wall of the Nkran pit. All mining crews were vacated and the pit barricaded in advance of the slippage with no injuries or damage to equipment. Asanko generated net cash of US$42m in 2019.

Guidance

The estimate for 2020 is as follows:

Gold produced ~ 255,000 ounces (100% basis);
Gold produced ~ 115,000 ounces (attributable);
All-in sustaining costs ~ US$1,000/oz; and
All-in costs ~ US$1,130/oz.

South America region

Peru

Cerro Corona

  Year ended  
 
Dec
2019
   Dec
2018
%
Variance
  
Ore mined 000 tonnes   8,024   6,854 17%  
Waste mined 000 tonnes   14,317   14,922 (4)%  
Total tonnes mined 000 tonnes   22,341   21,776 3%  
Grade mined – gold   g/t     1.05     1.06   (1)%  
Grade mined – copper   per cent     0.51     0.56   (10)%  
Gold mined 000’oz   270.0   233.8 15%  
Copper mined tonnes   40,625   38,556 5%  
Tonnes milled 000 tonnes   6,718   6,644 1%  
Yield – Gold g/t   0.75   0.73 3%  
  – Copper per cent   0.49   0.50 (3)%  
  – Combined eq g/t   1.35   1.47 (8)%  
Gold produced 000’oz   156.2   149.9 4%  
Copper produced tonnes   31,318   31,965 (2)%  
Total equivalent gold produced   eq oz     292.7     314.1   (7)%  
Total equivalent gold sold   eq oz     296.9     299.1   (1)%  
AISC – original interpretation   US$/oz     472     282   67%  
AISC US$/eq oz   810   699 16%  
AISC – revised interpretation guidance (WGC November 2018)   US$/oz     381     —   0%  
AISC US$/eq oz   761   0%  
AIC US$/oz   472   282 67%  
AIC US$/eq oz   810   699 16%  
Sustaining capital expenditure   US$m     56.3     33.2   70%  
Non-sustaining capital expenditure   US$m         —   0%  
Total capital expenditure   US$m     56.3     33.2   70%  
Net cash flow US$m   85.9   112.2 (23)%  

* Average daily spot price for the period used to calculate total equivalent gold ounces produced.

Gold production increased by 4% to 156,200 ounces in 2019 from 149,900 ounces in 2018, while copper production decreased by 2% to 31,300 tonnes in 2019 from 32,000 tonnes in 2018. Equivalent gold production decreased by 7% to 292,700 ounces in 2019 from 314,100 ounces in 2018, mainly due to the lower copper/gold price ratio. Equivalent gold production was slightly ahead of guidance for the year of 291koz.

All-in cost and all-in sustaining costs (original interpretation) increased by 67% to US$472/oz in 2019 from US$282/oz in 2018 but were 17% below guidance of US$566/oz. The year-on-year increase was mainly due to lower by-product credits, higher capital expenditures and higher operating costs. All-in sustaining costs and total all-in costs per equivalent ounce increased by 16% to US$810 per equivalent ounce in 2019 from US$699 per equivalent ounce in 2018 and were 1% higher than guidance of US$802 per equivalent ounce. The year-on-year increase was due to the same reasons as above and slightly lower equivalent ounces sold.

Capital expenditure increased by 70% to US$56 million in 2019 from US$33 million in 2018 due to higher expenditure resulting from the new waste storage facility construction and infrastructure relocation (access roads, blasting supplies warehouse, general warehouse, etc) expenses for the life extension plan.

Cerro Corona generated net cash of US$86m in 2019 compared to US$112m in 2018.

Guidance

The estimate for 2020 is as follows:

Gold equivalents produced ~ 275,000 ounces;
Gold produced ~ 158,000 ounces;
Copper tonnes produced ~ 27,493 tonnes;
Capital expenditure ~ US$55 million;
Copper price ~ US$5,730 per tonne;
Gold price ~ US$1,300 per ounce;
All-in sustaining costs ~ US$725/eq oz;
Total all-in cost ~ US$830/eq oz;
All-in sustaining costs ~ US$390/oz; and
Total all-in cost ~ US$575/oz.

Australia region

 

      Year ended  
 
Dec
2019
   Dec
2018
%
Variance
  
Gold produced 000’oz   914.3   886.4 3%  
AISC – original interpretation US$/oz   986   943 5%  
  A$/oz   1,418   1,262 12%  
AISC – revised interpretation guidance (WGC November 2018)   US$/oz     829     —   0%  
  A$/oz   1,192   0%  
AIC US$/oz   986   943 5%  
  A$/oz   1,418   1,262 12%  
Net cash flow* US$m   138.5   29.7 366%  
  A$m   199.1   39.8 400%  
Net cash flow (excluding Gruyere growth capital)   US$m     205.4     192.2   7%  
  A$m   295.3   257.3 15%  

* Includes Australia consolidated tax paid of A$74.7m (US$51.9m) in 2019 and A$124.1m (US$92.7m) in 2018, respectively.

Gold Fields’ Australian operations delivered another strong operational performance in 2019. Gold production increased by 3% to 914koz in 2019 from 886koz in 2018, mainly due to the inclusion of Gruyere production during H2 2019.

All-in cost (which included capital expenditure on Gruyere) and allin- sustaining costs (original interpretation) increased by 12% to A$1,418/oz in 2019 from A$1,262/oz in 2018 due to lower ounces sold (part of Gruyere production for the year was capitalised) and higher cost of sales before amortisation and depreciation, partially offset by lower sustaining capital expenditure.

Capital expenditure decreased to A$458m (US$319m) from A$553m (US$413m) in 2018, with the completion of Gruyere.

The Australia region reported a net cash inflow of A$199m (US$139m) in 2019 which includes Gruyere growth capital of A$96m (US$67m) compared to A$40m (US$30m) in 2018 which includes A$218m (US$163m) cash outflow for Gruyere.

St Ives

  Year ended  
 
Dec
2019
   Dec
2018
%
Variance
  
Underground              
Ore mined 000 tonnes   1,328   911 46%  
Waste mined 000 tonnes   926   467 98%  
Total tonnes mined 000 tonnes   2,254   1,379 64%  
Grade mined g/t   4.09   4.08 0%  
Gold mined 000’oz   174.6   119.5 46%  
Surface              
Ore mined 000 tonnes   3,752   3,396 10%  
Waste mined 000 tonnes   9,161   16,895 (46)%  
Total tonnes 000 tonnes   12,913   20,290 (36)%  
Grade mined g/t   1.77   2.68 (34)%  
Gold mined 000’oz   213.3   292.6 (27)%  
Total ore – combined   000 tonnes     5,080     4,307   18%  
Grade mined – combined   g/t     2.38     2.98   (20)%  
Total tonnes – combined   000 tonnes     15,167     21,669   (30)%  
Total gold mined 000’oz   387.9   412.0 (6)%  
Tonnes milled 000’oz   4,466   4,250 5%  
Yield – underground g/t   3.82   3.85 (1)%  
  – surface g/t   1.98   2.42 (18)%  
  – combined g/t   2.58   2.69 (4)%  
Gold produced 000’oz   370.6   366.9 1%  
Gold sold 000’oz   363.3   367.0 (1)%  
AISC – original interpretation   US$/oz     963     902   7%  
  A$/oz   1,385   1,207 15%  
AISC – revised interpretation guidance (WGC November 2018)   US$/oz     818     —   0%  
  A$/oz   1,176   0%  
AIC US$/oz   963   902 7%  
  A$/oz   1,385   1,207 15%  
Sustaining capital expenditure   A$m     141.4     170.3   (17)%  
  US$m   98.3   127.7 (23)%  
Non-sustaining capital expenditure   A$m         —   0%  
  US$m     0%  
Total capital expenditure   A$m     141.4     170.3   (17)%  
  US$m   98.3   127.7 (23)%  
Net cash flow A$m   158.2   164.1 (4)%  
  US$m   110.0   122.6 (10)%  

Gold production increased by 1% to 370,600 ounces in 2019 from 366,900 ounces in 2018 and was 2% ahead of guidance for the year of 362,000 ounces.

All-in cost and all-in sustaining costs (original interpretation) increased by 15% to A$1,385/oz (US$963/oz) in 2019 from A$1,207/oz (US$902/oz) in 2018 due to higher cost of sales before amortisation and depreciation, partially offset by lower capital expenditure. All-in cost were 3% above guidance of A$1,342/oz (US$1,007/oz).

The transition to underground mining continued at the Invincible complex during 2019. At the underground operations, ore mined increased by 46% to 1.33 million tonnes in 2019 from 0.91 million tonnes in 2018 with the new Invincible underground mine reaching steady state during the first half of 2019. Grade mined from underground was 4.09g/t in 2019 compared to 4.08g/t in 2018 and contained gold mined from underground increased by 46% to 174,600 ounces in 2019 from 119,500 ounces in 2018.

At the open pits total ore tonnes mined increased by 10% to 3.75 million tonnes in 2019 from 3.40 million tonnes in 2018 with increased ore production from Neptune stage 5 following the completion of pre-strip activities during the second half of 2019. Stage 6 of the Invincible open pit was mined out during 2019, bringing mining of the Invincible open pit to an end. Grade mined decreased by 34% to 1.77g/t in 2019 from 2.68g/t in 2018 mainly due to grades in Neptune stage 5 pit being lower than areas of Neptune mined in 2018, and grades in stage 6 at Invincible being lower than other stages. Contained gold mined from the open pits decreased by 27% to 213,300 ounces in 2019 from 292,600 ounces in 2018.

Capital expenditure decreased by 17% to A$141 million (US$98 million) in 2019 from A$170 million (US$127 million) in 2018 due to reduced pre-stripping of the open pits (A$19 million/US$13 million) combined with lower spend on mining infrastructure in 2019 (A$9 million/US$6 million).

St Ives generated net cash flow of A$158 million (US$110 million) in 2019 compared to A$164 million (US$123 million) in 2018.

Guidance

The estimate for 2020 is as follows:

Gold produced ~ 360,000 ounces;
Sustaining capital expenditure ~ A$83 million (US$57 million);
Growth capital expenditure ~ A$22 million (US$15 million) ;
All-in sustaining costs ~ A$1,260 per ounce (US$870 per ounce); and
Total all-in cost ~ A$1,320 per ounce (US$910 per ounce). The decrease from 2019 is due to lower capital expenditure and increased grades. The decrease in capital expenditure is due to a decrease in capital development following the completion of the Hamlet and Neptune growth projects.

Agnew

      Year ended  
 
Dec
2019
   Dec
2018
%
Variance
  
Underground ore mined   000 tonnes     1,284     1,216   6%  
Underground waste mined   000 tonnes     678     740   (8)%  
Total tonnes mined 000 tonnes   1,961   1,955  
Grade mined – underground   000 tonnes     5.71     6.49   (12)%  
Gold mined g/t   235.5   253.7 (7)%  
Tonnes milled 000’oz   1,231   1,178 4%  
Yield 000 tonnes   5.55   6.31 (12)%  
Gold produced 000’oz   219.4   239.1 (8)%  
Gold sold 000’oz   219.6   238.5 (8)%  
AISC – original interpretation   US$/oz     1,152     1,026   12%  
  A$/oz   1,656   1,374 21%  
AISC – revised interpretation guidance (WGC November 2018)   US$/oz     967     —   0%  
  A$/oz   1,391   0%  
AIC US$/oz   1,152   1,026 12%  
  A$/oz   1,656   1,374 21%  
Sustaining capital expenditure   A$m     109.5     97.5   12%  
  US$m   76.1   73.1 4%  
Non-sustaining capital expenditure   A$m         —   —%  
  US$m     —%  
Total capital expenditure   A$m     109.5     97.5   12%  
  US$m   76.1   73.1 4%  
Net cash flow A$m   16.3   92.4 (82)%  
  US$m   11.3   69.0 (84)%  

Gold production decreased by 8% to 219,400 ounces in 2019 from 239,100 ounces in 2018 due to decreased grade of ore mined and processed. Grade mined decreased by 12% to 5.71g/t in 2019 from 6.49g/t in 2018 due to lower grades mined in establishing the Waroonga North area and the completion of mining in the high grade areas of the FBH lode at Waroonga early in 2019. Production was 1% below guidance of 221,000 ounces.

All-in cost and all-in-sustaining costs (original interpretation) increased by 21% to A$1,656/oz (US$1,152/oz) in 2019 from A$1,374/oz (US$1,026/oz) in 2018 due to a decrease in gold sold and an increase in cost of sales before amortisation and depreciation, as well as capital expenditure. All-in cost were 8% higher than guidance of A$1,538/oz (US$1,154/oz).

Capital expenditure increased by 12% to A$109 million (US$76 million) in 2019 from A$98 million (US$73 million) in 2018. Additional expenditure was incurred in 2019 to establish the new accommodation village with A$32 million spent on the village in 2019 compared to A$8 million in 2018. The additional expenditure was partially offset by lower capital development in 2019 following the completion of developing the Waroonga North complex early in the year (A$12 million/US$8 million).

In addition, Gold Fields signed a 10-year electricity supply agreement with global energy group, EDL, during 2019. In terms of the agreement, a A$112m investment will be made in a world-leading energy micro-grid combining wind, solar, gas and battery storage, which will result in over 50% of Agnew’s energy needs coming from renewable and low-carbon sources. The micro-grid will be owned and operated by EDL, who will incur the capital and recoup its investment via the electricity supply agreement with Agnew.

On 20 November 2019, EDL commissioned its 23MW power station that integrates solar with gas and diesel generation (4MW solar and 19MW from gas and diesel). The second stage of the project, which includes 18MW of wind generation, a 13MW battery and an advanced micro-grid control system, is currently under construction and due to be completed by mid-2020.

Agnew generated net cash flow of A$16 million (US$11 million) in 2019 compared to A$92 million (US$69 million) in 2018.

Guidance

The estimate for 2020 is as follows:

Gold produced ~ 225,000 ounces;
Sustaining capital expenditure ~ A$55 million (US$38 million);
Growth capital expenditure ~ A$20 million (US$14 million) ; The reduction in capital expenditure from 2019 is due to the completion of the accommodation village in 2019;
All-in sustaining costs ~ A$1,350/oz (US$930/oz); and
Total all-in cost ~ A$1,440/oz (US$995/oz).

Granny Smith

      Year ended  
 
Dec
2019
   Dec
2018
%
Variance
  
Underground ore mined   000 tonnes     1,712     1,755   (2)%  
Underground waste mined   000 tonnes     631     567   11%  
Total tonnes mined 000 tonnes   2,342   2,322 1%  
Grade mined – underground   g/t     5.29     5.25   1%  
Gold mined 000’oz   291.1   296.0 (2)%  
Tonnes milled 000 tonnes   1,753   1,778 (1)%  
Yield g/t   4.88   4.90 (1)%  
Gold produced 000’oz   274.8   280.4 (2)%  
Gold sold 000’oz   274.8   280.5 (2)%  
AISC – original interpretation   US$/oz     922     925   0%  
  A$/oz   1,325   1,239 7%  
AISC – revised interpretation guidance (WGC November 2018)   US$/oz     752     —   —  
  A$/oz   1,081    
AIC US$/oz   922   925  
  A$/oz   1,325   1,239 7%  
Sustaining capital expenditure   A$m     103,845     105,421   (1)%  
  US$m   72,224   79,066 (9)%  
Non-sustaining capital expenditure   A$m         —   —  
  US$m      
Total capital expenditure   A$m     103.8     105.4   (1)%  
  US$m   72.2   79.1 (9)%  
Net cash flow A$m   134.3   130.1 3%  
  US$m   93.4   97.2 (4)%  

Gold production decreased by 2% to 274,800 ounces in 2019 from 280,400 ounces in 2018 due to a decrease in tonnes mined and processed, but was 6% ahead of guidance of 260,000 ounces.

All-in cost and all-in sustaining costs (original interpretation) increased by 7% to A$1,325/oz (US$922/oz) in 2019 from A$1,239/oz (US$925/oz) in 2018 mainly due to a decrease in gold sold. All-in costs were 3% lower than guidance of A$1,370/oz (US$1,028/oz).

Granny Smith generated net cash flow of A$134 million (US$93 million) in 2019 compared to A$130 million (US$97 million) in 2018.

Guidance

The estimate for 2020 is as follows:

Gold produced ~ 265,000 ounces;
Sustaining capital expenditure ~ A$67 million (US$46 million);
Growth capital expenditure ~ A$43 million (US$30 million);
All-in sustaining costs ~ A$1,255/oz (US$865/oz); and
Total all-in cost ~ A$1,415/oz (US$975/oz). The increase from 2019 is due to an increase in operating costs together with a slight increase in capital. The increase in operating costs is driven by the increasing mining depth at Wallaby which requires the introduction of paste fill and increased ventilation.

Gruyere

      Year ended  
 
Dec
2019
   Dec
2018
%
Variance
  
Ore mined 000 tonnes   6,761   0%  
Waste mined 000 tonnes   13,089   0%  
Total tonnes mined 000 tonnes   19,850   0%  
Grade mined – underground   g/t     0.87     —   0%  
Gold mined 000’oz   189.2   0%  
Tonnes milled 000 tonnes   3,278   0%  
Yield g/t   0.94   0%  
Gold produced 000’oz   99.1   0%  
Gold sold 000’oz   67.4   0%  
AISC – original interpretation   US$/oz     915     —   0%  
  A$/oz   1,316   0%  
AISC – revised interpretation guidance (WGC November 2018)   US$/oz     915     —   0%  
  A$/oz   1,316   0%  
AIC US$/oz   2,900   0%  
  A$/oz   4,170   0%  
Sustaining capital expenditure – 100% basis   A$m     15.1     —   0%  
  US$m   10.6   0%  
Non-sustaining capital expenditure – 100% basis   A$m     102.0     314.8   (68)%  
  US$m   71.4   236.1 (70)%  
Total capital expenditure – 100% basis   A$m     117.1     314.8   (63)%  
  US$m   82.0   236.1 (65)%  
Net cash flow A$m   (79.5)   (217.6) (63)%  
  US$m   (55.3)   (162.5) 66%  

Mine physicals in table on a 100% basis.

Gruyere commenced production during 2019, with first gold produced in June 2019 and sold in July 2019. Commercial levels of production were achieved at the end of September, with gold sold prior to this date being capitalised against the construction capital. Gruyere produced 99,000 ounces (100% basis) in 2019, hitting the upper end of the revised guidance (75,000 ounces – 100,000 ounces on a 100% basis).

Ore mined in 2019 was 6.8 million tonnes at a head grade of 0.87g/t. The mined grade includes additional ore above the cut-off grade but below the average life of mine grade identified during grade control drilling. This additional ore is within the existing pit shell and would otherwise be categorised as waste. This lower grade ore was stockpiled to preferentially process the high-grade ore.

The grade is increasing at depth as modeled, with mined grades lifting to an average grade of 1.21g/t mined during the month of December. Mined grade is expected to become more consistent as the mining front moves into fresh rock from Q2 2020.

Gold Fields portion of capital expenditure for 2019 was A$104 million (US$72 million), with the funds spent primarily on the completion of the Gruyere construction project and stripping activities at the Gruyere pit.

The Final Capital cost for the Gruyere construction is confirmed at A$610 million, below the Final Forecast Capital estimate of A$621 million (-2%/+2%), Gold Fields share being A$329 million. All-in cost post commercial levels of production for the 3 months from September 2019 were A$983/oz (US$684/oz). AIC for the full year was A$4,170/oz (US$2,900/oz) compared to the revised guidance of A$4,450/oz.

Gruyere’s cash outflow of A$80 million (US$55 million) in 2019 compared to a cash outflow of A$218 million (US$163 million) in 2018. However, in Q4 post commercial levels of production were achieved, a cash inflow of A$31 million (US$21 million) was generated.

Guidance

The estimate for 2020 is as follows:

Gold produced ~ 270,000 ounces (100%);
Gold Fields share of production ~ 135,000 ounces;
Sustaining capital expenditure# ~ A$40 million (US$27 million);
Growth capital expenditure# ~ A$1 million (US$1 million);
All-in sustaining costs# ~ A$1,140/oz (US$785/oz); and
Total all-in cost# ~ A$1,150/oz (US$795/oz)

# Gold Fields share only.