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Reviewed Results | Year ended 31 December 2021

Commentary Results for the Group

Year ended 31 December 2021 compared with year ended 31 December 2020

Safety

During 2021, Gold Fields recorded one fatality, Vumile Mgcine, a shaft timberman at South Deep. He died of injuries sustained in a mining incident in April, as reported in our H1 results. Another setback in our effort to achieve zero harm were the nine serious injuries reported during 2021, up from six serious injuries in 2020. However, our injuries are less severe than in previous years as demonstrated by the 40% reduction in the severity rate. The Group's total recordable injury frequency rate (TRIFR) improved by 10%, and despite COVID-19- related travel restrictions, we continued to roll-out training in our Courageous Safety Leadership programme in all regions. Our goal, as entrenched in our 2030 targets, remains zero fatalities and serious injuries every year.

We continue to implement advanced collision avoidance technologies to eliminate vehicular incidents. A key focus for the health of our workforce is to reduce diesel particulate matter exposure underground through, among others, improved ventilation and exhaust filters, procurement of low-emission machinery, low sulphur fuel and continuing training and monitoring. We are also trialing electric vehicles in Australia and will also do so later this year at South Deep. The introduction of electric vehicles with zero emissions will also gradually contribute to our reduced carbon emissions.

A noticeable trend over the past few years, has been an increase in mental health issues among employees, with many of our colleagues making use both of private and company-provided medical support. The Company plans to focus more resources on this rapidly emerging health issue across all operations.

      Year ended    
Safety 2021   2020 2019  
Fatalities 1   1 1  
TRIFR1 2.16   2.40 2.19  
Serious injuries5 9   6 4  
Severity rate6 19   32 23  
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.
5 A Serious Injury is a work-related injury that incurs 14 days or more of work lost and results in a range of injuries detailed at Goldfields.com/safety.php
6 Severity rate is calculated as (Days lost to lost-time injuries/hours worked) x 1,000,000.

Environmental

No serious (Level 3 – 5) environmental incidents were reported for the third year in a row during 2021, while the number of Level 2 incidents reduced from 11 in 2020 to seven in 2021. This is a critical achievement as it signals not only sound environmental stewardship, but also a limited impact of our operations on neighbouring communities with whom we share many of the natural resources.

Tailings management

Gold Fields continues to address gaps identified in our process of aligning with the Global Industry Standard on Tailings Management (GISTM), which was launched in August 2020. As a member of the International Council on Mining & Metals, we have committed that all tailings facilities with "extreme" or "very high" consequence category ratings will be in conformance with the GISTM by 5 August 2023 and that all other tailings facilities that we operate that are not in a state of safe closure will be in conformance with the GISTM by 5 August 2025. Our priority facilities are on track to be in conformance with the GISTM by August 2023. All key personnel appointments have been made and our overall GISTM conformance programme is on track. We estimate that capital expenditure needed over the five years to achieve full compliance will be approximately US$25m. This excludes expenditure that will be required to migrate a number of our TSFs to downstream disposal and dry-stack deposition methods over time. As studies are finalised the associated costs will be disclosed.

Water management

Reducing freshwater usage and optimising Group water recycling/reuse are key strategic intents for the Company and we are making good progress on these. Fresh water withdrawal was 9.44 gigalitres (GL) in 2021 compared with 9.97GL in 2020, mainly due to a decrease in water withdrawal at Tarkwa and South Deep owing to increased recycling/reuse at both operations. South Deep continued to recycle treated sewage effluent, which was previously discharged to the Leeuspruit. The mine has also upgraded its water pipeline to reduce water losses. In terms of our 2030 water priorities, we are on track to achieve the 80% target for water recycled or reused, having recorded 75% in 2021, up from 71% in 2020. From a 2018 baseline, we have also reduced our freshwater use by 35% to date, on track to achieve the targeted 45% reduction by 2030.

The CDP Water NGO again placed Gold Fields on its A list for water management and disclosure, one of only 118 high-performing global companies out of almost 3,400 to make this year's top level. Gold Fields was ranked A-, a step below the highest possible A level, which we achieved in 2020.

Energy management and climate change

Group energy spend was US$341m (18% of operating costs) in 2021 compared with US$257m (16% of operating costs) in 2020, driven mainly by higher fuel prices. Energy intensity was 5.66GJ/oz (2020: 5.64GJ/oz) and 69MJ/t mined (2020: 72MJ/t). Total energy consumption during 2021 rose by 6% to 13.9 petajoules (PJ) (2020: 13.1PJ). Energy efficiency initiatives at our operations saved 1.2PJ, including compressor, pumping and fan optimisation at South Deep, haulage efficiencies at Gruyere and fuel switching at St Ives.

Scope 1 and 2 CO2e emissions increased by 6% to 1.7 million tonnes (Mt) in 2021 (2020: 1.6Mt), in line with the increased energy use. CO2e emissions intensity improved 3% to 8.6kg CO2e/t mined from the 8.8kg CO2e/t recorded in 2020.

We will continue to pursue carbon emission reductions at all our operations, in line with our 2030 ESG target commitment to reduce Scope 1 and 2 emissions by 30% from a 2016 baseline. A large part of these reductions will be achieved by continuing our successful roll-out of renewable energy projects. Our two completed microgrids are at the Agnew and Granny Smith mines in Western Australia.

The Gruyere mine, also in Western Australia, is set to add a 13MW solar farm and 4.4MW battery storage to its current gas engines during Q2 2022. As part of the construction of our Salares Norte mine in Chile, a 25.9MW hybrid energy project, comprising a 9.9MW solar power plant and thermal power, will be commissioned in Q1 2023 when the mine is scheduled to be operational.

At our South Deep mine in South Africa, we commenced with the construction of a R715m solar power plant in Q3 2021. The plant will provide the mine with about a quarter of its power requirements and save it over R120m a year in electricity costs. In Q4 2021 we increased the planned capacity of the plant from 40MW to 50MW. It is scheduled to be completed in H2 2022.

During 2021, renewable electricity averaged 55% of total electricity supply at Agnew, 7% at Granny Smith, 10% for the Australia region and 4% of total Group electricity. These percentages are set to increase over the next few years as we work to achieving our 2030 targets.

         Year ended          
Environmental  2021     2020     2019    
Environmental incidents - Level 3 – 5  0          
Water recycled/reused (% of total) 75     71     68    
Fresh water withdrawal (GL)1  9.4     10.0     14.2    
Energy consumption (PJ)2  13.90     13.13     12.49    
Energy intensity (MJ/t mined) 69     72     66    
CO2 emissions (kt)3  1,714     1,6055     1,6115    
CO2 emissions intensity (kg CO2 /t mined) 8.5     7.9     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.
5 Restated due to changes in emission factors in Ghana.

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$3.591bn in 2021 compared with US$2.849bn in 2020, with significant payment increases during the year to our host governments, in the form of higher taxes and royalties, as well as improved dividend and interest payments to our capital providers. Gold Fields procurement from in-country suppliers, excluding corporate procurement spend, was US$2.231bn in 2021 (96% of total procurement).

Gold Fields aims to sustain the value delivered to host communities through employment, procurement and social investments. In 2021 US$872m – 28% of total value distribution – flowed to our host communities in the form of procurement spend, wages and socioeconomic development (SED) investment (USS$676m, 28% in 2020). The Group host community workforce totaled 9,330 people – 53% of total workforce in 2021 (2020: 8,752 host community workforce, 53% of total workforce). Group host community procurement spend in 2021 was US$709m – 31% of total spend - compared with US$536m and 29% spend in 2020.

Gold Fields invested US$16.3m in socio-economic development (SED) projects in our host communities in 2021, compared with US$16.8m in 2020. The SED investments are funded through Gold Fields' foundations, trusts and operations.

      Year ended      
Value distribution to national economies (US$m) 2021   2020   2019  
Royalties/taxes 558   381   254  
Royalties/taxes 2,101   1,786   1,744  
Wages/salaries 463   412   395  
SED 16   17   22  
Capital providers1 454   253   162  
Total 3,591   2,849   2,577  
1 Includes payment to capital providers from Corporate Office
      Year ended      
Value distribution to host communities (US$m) 2021   2020   2019  
Procurement 709   536   635  
Wages/salaries 147   123   125  
SED 16   17   22  
Total 872   676   782  
Percentage of total value distribution 28 %   28 %   33 %  

A key priority for Gold Fields is to build a diverse and inclusive workplace by increasing the participation of women, Indigenous People and other targeted demographic groups in our workforce. At the end of 2021, women comprised 22% of Gold Fields' workforce compared with 20% in 2020. We are targeting 30% gender diversity by 2030. Training spend for 2021 was US$8.3m, compared with US$6.8m for 2020. Gold Fields was once again a constituent of the Bloomberg Gender-Equality Index for 2021.

      Year ended      
Social 2021   2020   2019  
Host community procurement (% of total) 31   29   34  
Host community workforce (% of total) 53   53   55  
Women in workforce (%) 22   20   20  
Training spend 8.3   6.8   10.8  

COVID-19 report

While the impact of COVID-19 on our operational performance was relatively limited during 2021, an estimated 30koz, the impact on our workforce has been devastating. During 2021, we reported 17 deaths among our employees and contractors at South Deep, Ghana and Peru. It brings the total number of COVID-19 related deaths in the Company to 20 since the beginning of the pandemic in early 2020. Our heartfelt condolences again go out the families, friends and colleagues of the deceased.

Vaccination remains our primary defense against the impact of the virus and by mid-February 2022, 83% of our employees and contractors were already fully vaccinated, with a further 22% already receiving their booster jabs. Our Western Australian mines have introduced mandatory vaccination for most job categories in line with government policies. At South Deep, a risk-based mandatory vaccination approach has been implemented, whereby employees in higher risk categories have to be vaccinated. In Ghana, Chile and Peru mandatory vaccination is not permitted, as yet.

Apart from the vaccination campaigns, we continue to support our workforce through, amongst others, educational awareness programmes, implementing stringent safety protocols, rapid testing and offering medical assistance if employees contract the virus.

During 2021, our operations spent approximately US$30m on COVID-19 related initiatives and interventions, such as specialised camp accommodation, testing equipment and facilities, additional labour costs and transport facilities. This amount includes US$2m was spent on donations to assist governments and communities in their fight against the pandemic while in Ghana the government imposed a US$5m COVID-19 health recovery levy. In 2020, total COVID-19 related spending amounted to about US$33m.

As a result of the high rate of COVID-19 infections, South Deep and Cerro Corona in Peru were the most affected during 2021 amid the impact of regulations imposed by the governments of those countries to curb the spread. South Deep lost an estimated 300kg and Cerro Corona 20koz of gold production, mostly in Q1 2021. The impact on overall Group production though was minimal.

At our Salares Norte project in Chile, the Company had to cater for an additional 2,000-plus contractors on site during the construction process. This has been facilitated successfully and there have been no major COVID-19 related delays to the construction programme to date.

Since the start of the pandemic in March 2020, a Group Exco COVID-19 Crisis Management Team has met regularly 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. Regional and site committees have performed similar roles.

The latest COVID-19 statistics at our Group are displayed in the table below:

COVID-19 Report (as at 14 February 2022) Total  
Tested 177,027  
Positive 6,342  
Negative 170,658  
Awaiting results1 0  
Active cases1 142  
Hospitalised1 0  
Recovered 6,436  
Vaccinated2 83%  
Deceased 20  
1 “Awaiting results”, “Active cases” and “Hospitalised” refers to current figures.
2 Fully vaccinated. Private vaccinations by employees are not always declared. Numbers exclude Asanko/Galiano.

Revenue

Attributable equivalent gold production, (including Asanko) increased by 5% from 2.236Moz in 2020 to 2.341Moz in 2021. Attributable equivalent gold production at Asanko decreased by 16% from 112,500oz in 2020 to 94,600oz in 2021. Revenue from Asanko is not included in Group revenue as Asanko results are equity accounted. The impact of COVID-19 on our operational performance during 2021 amounted to an estimated 30koz (Cerro Corona at 20koz and South Deep at 10koz) and compared to 78koz in 2020 (Cerro Corona at 46koz and South Deep at 32koz).

At the South Africa region, attributable production at South Deep increased by 24% from 7,056kg (226,900oz) in 2020 to 8,776kg (282,200oz) in 2021. Managed production increased by 29% from 7,056kg (226,900oz) in 2020 to 9,101kg (292,600oz) in 2021. The increase was due to the productivity improvement programmes introduced in 2019 which are sustainably delivering results. Gold sold increased by 29% from 7,056kg (226,900oz) to 9,102kg (292,600oz).

Attributable gold production at the West African operations (including Asanko), increased by 1% from 786,900oz in 2020 to 793,100oz in 2021 mainly due to increased production at Damang as mining progressed into the main ore body at the Damang Pit Cutback (DPCB) and a full year of commercial levels of production in 2021 as opposed to half a year in 2020 after exiting the project stage. Managed gold produced and sold at Tarkwa decreased by 1% from 526,300oz in 2020 to 521,700oz in 2021. At Damang, managed gold produced and sold increased by 14% from 223,000oz in 2020 to 254,400oz in 2021. Gold production at Asanko decreased by 16% from 112,500oz (45% basis) in 2020 to 94,600oz (45% basis) in 2021. Gold sold decreased by 11% from 109,700oz (45% basis) to 97,200oz (45% basis).

Attributable equivalent gold production at Cerro Corona in Peru, increased by 20% from 206,100oz in 2020 to 247,000oz in 2021 mainly due to the higher price factor (41Koz). Total managed gold equivalent production increased by 20% from 207,100oz in 2020 to 248,300oz in 2021. Gold equivalent ounces sold increased by 21% from 205,500oz to 248,400oz.

Gold production at the Australian operations increased marginally from 1,016,800oz in 2020 to 1,018,500oz in 2021. At St Ives, gold production increased by 2% from 384,900oz in 2020 to 393,000oz in 2021. Gold sold decreased by 1% from 393,800oz to 391,100oz. At Agnew, gold production decreased by 4% from 233,300oz in 2020 to 223,000oz in 2021 mainly due to decreased ore tonnes processed, partially offset by an increase in yield. Gold sold decreased by 5% from 233,500oz to 222,800oz. At Granny Smith, gold production increased by 4% from 269,600oz in 2020 to 279,200oz in 2021 due to an increase in yield, partially offset by decreased ore tonnes processed. Gold sold increased by 7% from 265,200oz to 283,600oz. At Gruyere, gold production (100% basis) decreased by 5% from 258,200oz in 2020 to 246,500oz in 2021 due to a decrease in grade of ore mined and processed. The Group's share of gold production at Gruyere decreased by 5% from 129,100oz in 2020 to 123,300oz in 2021 due to a decrease in grade of ore mined and processed. Gold sold decreased by 3% from 128,000oz in 2020 to 124,400oz in 2021.

The average US Dollar gold price achieved by the Group (excluding Asanko) increased by 2% from US$1,767/eq oz in 2020 to US$1,794/ eq oz in 2021. The average Rand gold price decreased by 8% from R928,707/kg to R851,102/kg. The average Australian Dollar gold price decreased by 6% from A$2,551/oz to A$2,400/oz. The average US Dollar gold price for the Ghanaian operations (excluding Asanko) increased by 1% from US$1,773/oz in 2020 to US$1,797/oz in 2021. The average equivalent US Dollar gold price, net of treatment and refining charges, for Cerro Corona decreased by 3% from US$1,795/ eq oz in 2020 to US$1,750/eq oz in 2021. The average US Dollar/ Rand exchange rate strengthened by 10% from R16.38 in 2020 to R14.79 in 2021. The average Australian/US Dollar exchange rate strengthened by 9% from A$1.00 = US$0.69 to A$1.00 = US$0.75.

Gold equivalent ounces sold (excluding Asanko) increased by 6% from 2.22Moz in 2020 to 2.34Moz in 2021.

Revenue increased by 8% from US$3,892m in 2020 to US$4,195m in 2021 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 12% from US$1,489m in 2020 to US$1,662m in 2021 mainly due to inflationary increases affecting all the regions and the effect of the strengthening of the South African Rand and Australian Dollar. Effective mining inflation for 2021 was as follows:

  • 10.4% in South Africa;
  • 5.8% in Ghana;
  • 3.1% in Peru; and
  • 6.8% in Australia.

At the South Africa region, at South Deep, cost of sales before amortisation and depreciation increased by 20% from R3,751m (US$229m) in 2020 to R4,510m (US$305m) in 2021 mainly due to increased volumes mined and processed as well as inflationary increases.

At the West Africa region, (excluding Asanko), cost of sales before amortisation and depreciation decreased by 2% from US$469m in 2020 to US$460m in 2021 mainly due to a 8Mt decrease in operational waste tonnes mined at Damang as the strip ratio reduced and physical space constrained as mining moved deeper into the pit, combined with a gold-in-process credit to cost of US$72m in 2021 compared with gold-in-process credit to cost of US$61m in 2020. The decrease in cost of sales before amortisation and depreciation at Damang was partially offset by an increase in cost of sales before amortisation and depreciation at Tarkwa mainly driven by an increase in the contractor mining rate as well as inflationary increases. Tarkwa had a gold-inprocess credit to cost of US$30m in 2021 compared with a gold-inprocess charge to cost of US$2m in 2020.

At the South America region, at Cerro Corona, cost of sales before amortisation and depreciation increased by 14% from US$154m in 2020 to US$176m in 2021 mainly due to a 8Mt increase in operational waste tonnes mined. This is in line with the low-grade ore stockpiling strategy and the waste recovery plan implemented at the end of 2020, through the deployment of additional mining fleet and equipment.

At the Australia region, cost of sales before amortisation and depreciation increased by 4% from A$924m (US$637m) in 2020 to A$960m (US$721m) in 2021 mainly due to inflationary increases and additional processing cost associated with reliability projects at Gruyere, combined with a gold-in-process charge to cost of A$0m in 2021 compared with a gold-in-process credit to cost of A$6m in 2020.

Amortisation and depreciation

Amortisation and depreciation for the Group increased by 8% from US$661m in 2020 to US$713m in 2021 mainly due to the higher production in 2021 and the effect of the strengthening of the South African Rand and Australian Dollar.

Other

Net interest expense for the Group decreased by 22% from US$106m in 2020 to US$83m in 2021 mainly due to lower interest paid as a result of lower borrowings. Net interest expense of US$83m comprised of interest expense of US$80m and lease interest of US$24m, partially offset by interest income of US$8m and interest capitalised of US$13m in 2021. In 2020, net interest expense of US$106m comprised of interest expense of US$106m and lease interest of US$22m, partially offset by interest income of US$9m and interest capitalised of US$13m.

The equity accounted loss increased by 967% from US$3m in 2020 to US$32m in 2021.

The share of results of equity accounted investees after taxation decreased by 55% from US$47m in 2020 to US$21m in 2021. The equity accounted earnings of Asanko of US$23m in 2021 compared with US$49m in 2020. The decrease is mainly due to the lower production in 2021. The balance under share of results of equity accounted investees after taxation relates to expenditure of US$2m incurred at FSE in both 2020 and 2021.

The share of results of equity accounted investees - impairment of Asanko related to an impairment of US$53m in 2021 of the Asanko Gold Mine following the identification of an impairment trigger. This compared with an impairment of US$50m in 2020. Due to the reevaluation of the geological modelling by our JV partner, Galliano, which is still not complete, Gold Fields is still not in a position to provide a reserve and resource estimate for Asanko as at 31 December 2021. Taking this into consideration, management has modelled various scenarios for the Asanko Life of Mine (LoM) in order to determine their best estimates of the future cash flows of the Asanko gold mine. The various LoM scenario runs were undertaken in an attempt to model Asanko's future cash flows in the absence of a revised Resource and Reserve for 31 December 2021. These scenarios are based on the pre-feasibility study completed in 2019, in order to declare a Reserve at 31 December 2019, but were modified where appropriate to reflect prevailing circumstances.

The loss on foreign exchange of US$2m in 2021 compared with a gain of US$9m in 2020 and related to the conversion of offshore cash holdings into their functional currencies.

Loss on financial instruments decreased by 58% from US$239m in 2020 to US$100m in 2021. The loss on financial instruments of US$100m in 2021 comprised a loss on hedges of US$96m and a loss on valuation of warrants of US$4m. The loss on hedges of US$96m includes realised losses of US$44m and unrealised losses and prior year marked-to-market reversals of US$52m. The realised losses of US$44m comprised losses realised on the Australian gold hedge of A$42m (US$31m) and Peruvian copper hedge of US$46m, partially offset by realised gains of US$33m on the Chilean currency hedge and the Australian oil hedge of A$1m (US$nil). The unrealised losses and prior year marked-to-market reversals of US$52m comprised losses on the Chilean currency hedge of US$93m, partially offset by gains on the Australian gold hedge of A$8m (US$6m), Peruvian copper hedge of US$14m, the Ghanaian oil hedge of US$13m and the Australian oil hedge of A$11m (US$8m).

In 2021, the loss on valuations of warrants of US$4m related to the Maverix warrants.

The loss on financial instruments of US$239m in 2020 comprised a loss on hedges of US$240m and a gain on valuation of options of US$1m. The loss on hedges of US$240m includes realised losses of US$417m, partially offset by unrealised gains and prior year markedto- market reversals of US$177m. The realised losses of US$417m comprised losses realised on the South Deep gold hedge of R1,563m (US$95m), the Australian gold hedge of A$292m (US$201m), the Australian oil hedge of A$5m (US$3m) the Ghanaian gold hedge of US$115m and the Ghanaian oil hedge of US$7m, partially offset by realised gains of US$4m on the Chilean currency hedge. The unrealised gains and prior year marked-to-market reversals of US$177m comprised gains on the South Deep hedge of R176m (US$11m), the Australian gold hedge of A$106m (US$73m), the Ghanaian gold hedge of US$36m and the Chilean currency hedge of US$86m, partially offset by a loss on the Peruvian copper hedge of US$14m, the Ghanaian oil hedge of US$10m and the Australian oil hedge of A$7m (US$5m).

In 2020, the gain on valuations of options of US$1m relates to the Maverix warrants.

Share-based payments for the Group decreased by 13% from US$15m in 2020 to US$13m in 2021 mainly due to lower forecast vesting percentages of the scheme.

The long-term incentive plan decreased by 43% from US$51m in 2020 to US$29m in 2021 due to the current marked-to-market valuation of the plan reflecting forecast performance.

Other costs for the Group increased by 18% from US$39m in 2020 to US$46m in 2021 and mainly related to higher community spend in the South African and South American regions.

Exploration expenses

Exploration expenses increased by 22% from US$50m in 2020 to US$61m in 2021 mainly due to higher exploration spend in Australia and Ghana. The US$61m spend in 2021 included US$27m spend at Salares Norte which relates to exploration and project expenses. The balance of US$34m related to exploration at the other operations. The US$50m spend in 2020 included US$30m spend at Salares Norte with the balance of US$20m related to exploration at the other operations.

Non-recurring items

Non-recurring expenses of US$89m in 2021 compared with nonrecurring income of US$34m in 2020.

Non-recurring expenses of US$89m in 2021 mainly include:

  • impairment of FSE of US$31m 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;
  • expected credit loss against a contractor loan of US$41m at Tarkwa and Damang;
  • US$10m impairment of capitalised exploration costs at St Ives based on technical and economic parameters of various studies;
  • US$2m write-off of redundant assets in Peru;
  • restructuring costs at Tarkwa of US$2m;
  • donations made to various bodies in response to COVID-19 of US$1m; and
  • a cost arising on the rehabilitation year-end adjustments of US$11m; partially offset by profit on disposal of assets of US$9m.

Non-recurring income of US$34m in 2020 mainly included:

  • US$24m income related to a submission of VAT claims for expenses incurred from 2010 to June 2020 at Salares Norte to the Chilean tax authority which become claimable from the commencement of construction;
  • net reversal of impairment of FSE of US$62m and is limited to previous impairments recognised. The reversal of 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;
  • expected credit loss against a contractor loan of US$29m at Tarkwa;
  • 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;
  • US$2m write-off of redundant assets in Peru;
  • donations made to various bodies in response to COVID-19 of US$3m;
  • a cost arising on the rehabilitation year-end adjustments of US$2m; and other costs of US$5m mainly related to the capital raising in February 2020.

Royalties

Government royalties for the Group increased by 7% from US$105m in 2020 to US$112m in 2021 in line with the higher revenue.

Taxation

The taxation charge for the Group decreased by 2% from US$433m in 2020 to US$425m in 2021. Normal taxation increased by 22% from US$367m in 2020 to US$449m in 2021 in line with the higher profit before tax. The deferred tax charge of US$66m in 2020 compared to a deferred tax credit of US$24m in 2021.

The deferred tax credit in 2021 is due to the raising of a deferred tax asset of US$87m at Salares Norte. At 31 December 2021, there has been significant progress with the construction of the Salares Norte project as indicated by total project progress at 62.5%, construction progress at 55% and the early forecast curve being aligned with the scheduled finish of Q1 2023. The project is expected to deliver significant value and all tax credits are expected to be fully utilised before they expire.

If the deferred tax credit of US$87m is excluded, deferred taxation would have decreased by 5% from US$66m in 2020 to US$63m in 2021.

Profit

Net profit attributable to owners of the parent of the Group increased by 9% from US$723m or US$0.82 per share in 2020 to US$789m or US$0.89 per share in 2021.

Headline earnings attributable to owners of the parent of the Group increased by 22% from US$729m or US$0.83 per share in 2020 to US$890m or US$1.00 per share in 2021.

Normalised profit for the Group increased by 6% from US$879m or US$1.00 per share in 2020 to US$929m or US$1.05 per share in 2021.

Normalised profit

Normalised profit reconciliation for the Group is calculated as follows:

   Year ended    
US$'m  2021     2020    
Profit for the year attributable to owners             
of the parent  789.3     723.0    
Non-recurring items  89.0     (34.1)   
Tax effect of non-recurring items  (4.8)    (6.1)   
Non-controlling interest effect of non-             
recurring items  (4.2)    (3.8)   
Share of results of equity accounted             
investees – Asanko impairment  52.8     49.5    
(Gain)/loss on foreign exchange  1.9     (8.6)   
Tax effect of gain on foreign exchange  1.2     1.9    
Non-controlling interest effect of gain on             
foreign exchange  0.5     0.6    
Loss on financial instruments  100.4     238.9    
Tax effect of loss on financial instruments  (11.6)    (76.1)   
Non-controlling interest effect of loss on             
financial instruments  0.9     (6.4)   
Salares Norte deferred tax asset raised  (86.7)    –    
Normalised profit attributable to owners of the parent  928.7     878.8    

Normalised profit is considered an important measure by Gold Fields of the profit realised by the Group in the ordinary course of operations. In addition, it forms the basis of the dividend pay-out policy. 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$1,599m in 2021 compared with an inflow of US$1,257m in 2020. The increase of 27% was mainly due to a higher profit before royalties and taxation due to lower realised hedge losses in 2021 and lower investment in working capital. This was partially offset by higher royalties and taxation payments of US$558m in 2021 compared to US$381m in 2020. The higher tax payments in 2021 related mainly to higher profitability in 2020 with the final top-up payment for 2020 made in 2021.

Dividends paid of US$369m in 2021 compared with US$145m in 2020 and comprised dividends paid to owners of the parent of US$322m and related to the final 2020 and interim 2021 dividend, as well as dividends paid to non-controlling interest holders of US$47m.

Cash outflow from investing activities increased by 76% from US$607m in 2020 to US$1,071m in 2021. Capital expenditure increased by 86% from US$584m in 2020 to US$1,089m in 2021.

Sustaining capital expenditure, (excluding Asanko), increased by 41% from US$409m in 2020 to US$576m in 2021, while non-sustaining capital expenditure (excluding Asanko), increased by 193% from US$175m in 2020 to US$513m in 2021. The increase in sustaining capital expenditure is mainly attributable to:

  • increased expenditure on capital waste mining and tailings storage facilities at Tarkwa;
  • the solar plant construction and tailings storage facility extension at South Deep; and
  • increased development and waste stripping activities at the Australian operations.

Non-sustaining expenditure of US$513m in 2021 comprised US$375m at Salares Norte, US$83m at the Australian operations, US$28m at Cerro Corona, US$6m at Damang and US$21m at South Deep. Nonsustaining expenditure of US$175m for 2020 comprised US$97m at Salares Norte, US$41m at the Australian operations, US$26m at Cerro Corona, US$6m at Damang and US$5m at South Deep.

At the South Africa region at South Deep, capital expenditure increased by 64% from R804m (US$49m) in 2020 to R1,320m (US$89m) in 2021 mainly due to the construction of the solar plant, Doornpoort tailings storage facility expansion project, on site power generation plant (diesel generators), the purchase of a mobile raise boring machine and the recommencement of capital development in the new mine area and associated infrastructure projects.

At the West Africa region, (excluding Asanko), capital expenditure increased by 39% from US$167m in 2020 to US$232m in 2021. At Tarkwa, capital expenditure increased by 42% from US$147m in 2020 to US$209m in 2021 due to increased expenditure on capital waste stripping and tailings storage facility construction. Capital expenditure at Damang increased by 18% from US$20m in 2020 to US$23m in 2021 mainly due to higher capital waste tonnes mined at the Huni pit.

Capital expenditure at Asanko (on a 100% basis) amounted to US$46m in 2021 compared with US$69m in 2020. The Asanko capital expenditure is not included in the Group capital expenditure.

At the South America region at Cerro Corona, capital expenditure increased by 12% from US$50m in 2020 to US$56m in 2021 mainly due to the replacement of a crusher in the process plant to deal with an increase in ore hardness and land acquisition.

At Salares Norte, capital expenditure increased by 287% from US$97m in 2020 to US$375m in 2021 due to an increase in construction activities at the project as construction progressed to 55.0% at the end of 2021 compared to 15.6% at the end of 2020.

At the Australia region, capital expenditure increased by 40% from A$319m (US$220m) in 2020 to A$447m (US$336m) in 2021. At St Ives, capital expenditure increased by 29% from A$107m (US$74m) to A$138m (US$103m) mainly due to increased development at Invincible underground, pre-stripping of Neptune stage 7 and Delta island open pit as well as the construction of a paste plant at Invincible underground mine. At Agnew, capital expenditure increased by 56% from A$75m (US$52m) in 2020 to A$117m (US$88m) in 2021 mainly due to increased underground development, underground ventilation upgrades, the crusher circuit update and increased exploration drilling. At Granny Smith, capital expenditure increased by 39% from A$96m (US$66m) in 2020 to A$134m (US$100m) in 2021 mainly due to an increase in development in the Zone 110/120 and Zone 135 areas as well as the development of the second decline. At Gruyere, capital expenditure increased by 43% from A$41m (US$28m) in 2020 to A$58m (US$44m) in 2021 mainly due the pre-stripping of stages 2 and 3 of the pit.

Proceeds on disposal of assets of US$3m in 2021 compared with proceeds on disposal of assets of US$1m in 2020.

Purchase of investments of US$27m in 2021 compared with US$1m in 2020. Purchase of investments of US$27m in 2021 related to US$10m paid for the conversion of warrants to Maverix shares, US$2m paid for 6.6m shares in Chakana Copper Corporation, US$2m for 11.0m shares in Hamelin Gold Limited and an investment of US$13m in bonds for the insurance captive. The US$1m in 2020 related to a purchase of 3.4m shares in Lefroy Exploration Limited.

Redemption of Asanko preference shares amounted to US$5m in 2021 compared to US$38m in 2020.

Loan advanced to contractors in Ghana for fleet replacement in 2020 amounted to US$68m. These loans are interest bearing and a portion is secured over the fleet purchased by the contractor in 2020.

Proceeds on disposal of investments decreased by 17% from US$23m in 2020 to US$19m in 2021. Proceeds of US$19m in 2021 related to the disposal of shares in the Toronto-listed gold and royalty streaming company Maverix. In 2020 it amounted to US$23m and related to the sale of 81m shares in ASX-listed Cardinal Resources Limited.

Environmental payments increased by 11% from US$9m in 2020 to US$10m in 2021.

Cash inflow from operating activities less net capital expenditure, environmental payments, redemption of Asanko preference shares and lease payments decreased by 27% from US$631m in 2020 to US$463m in 2021 mainly due to higher capital expenditure, partially offset by higher cash from operations due to lower hedge payments.

The US$463m adjusted free cash flow in 2021 comprised: US$913m adjusted free cash flow from operations generated by the eight mining operations plus redemption of Asanko preference shares of US$5m, less US$65m of net non-mine interest paid, US$327m at Salares Norte on exploration and construction capital, as well as US$63m on non-mine based costs mainly due to working capital movements.

The Salares Norte expenditure of US$327m comprises the following:

US$'m  2021    
Exploration expenditure  (27)   
Capital expenditure  (375)   
Release of working capital  66    
Other    
Total spend  (327)   

The US$631m adjusted free cash flow in 2020, comprised: US$868m adjusted free cash flow from operations generated by the eight mining operations plus redemption of Asanko preference shares of US$38m, less US$92m of net non-mine interest paid, US$151m at Salares Norte on exploration and construction capital, as well as US$32m on non-mine based costs mainly due to working capital movements.

The Salares Norte expenditure of US$151m comprises the following:

US$'m  2020    
Exploration expenditure  (30)   
Capital expenditure  (97)   
Investment into working capital  (24)   
Total spend  (151)   

Net cash outflow from financing activities of US$511m in 2021 compared with US$140m in 2020. The outflow in 2021 related to loan repayments of US$644m and payment of lease liabilities of US$74m, partially offset by loan drawdowns of US$207m. The outflow in 2020 related to the repayment of US$1,014m of offshore loans (including the 2020 bond of US$602m) and payment of lease payments of US$64m, partially offset by shares issued of US$249m and loan drawdowns of US$689m.

The net cash outflow for the Group of US$351m in 2021 compared with an inflow of US$364m in 2020. After accounting for a negative translation adjustment of US$11m on non-US Dollar cash balances, the cash outflow in 2021 was US$362m. The cash balance of US$525m in 2021 compared with US$887m in 2020.

All-in sustaining and total all-in cost

The Group all-in sustaining costs increased by 9% from US$977/oz in 2020 to US$1,063/oz in 2021 mainly due to higher sustaining capital expenditure, higher cost of sales before amortisation and depreciation and higher royalties (due to higher gold price realised), partially offset by higher gold sold. If the all-in sustaining costs are normalised for the strengthening of the currencies by using the same exchange rates as in 2020, the all-in sustaining costs would be US$1,006/oz for 2021. This represents a 3% increase in all-in sustaining costs compared with 2020.

Total all-in cost increased by 20% from US$1,079/oz in 2020 to US$1,297/oz in 2021 due to higher cost of sales before amortisation and depreciation, higher sustaining and non-sustaining capital expenditure and higher royalties, partially offset by higher gold sold.

Normalising for the exchange rate differences by using the same exchange rates as in 2020, the total all-in cost would be US$1,236/oz for 2021, an 15% increase when compared with 2020.

Excluding the project construction capital at Salares Norte, total all-in cost increased by 11% from US$1,038/oz in 2020 to US$1,148/oz in 2021.

Normalising for the exchange rate differences as well as excluding the Salares Norte project capital, the total all-in cost would be US$1,089/ oz for 2021, an 5% increase when compared with 2020.

Royalties paid increased by US$2/oz or 4% from US$51/oz in 2020 to US$53/oz in 2021.

COVID-19 related costs are estimated at approximately US$10/oz for 2021 and are included in the AISC and AIC.

Statement of financial position

Net debt decreased from US$1,069m at 31 December 2020 to US$969m at 31 December 2021.

Net debt excluding lease liabilities decreased from US$640m in 2020 to US$553m in 2021.

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 0.40x in 2021 compared with 0.56x in 2020.

Adjusted EBITDA

Adjusted EBITDA for calculating net debt/adjusted EBITDA is based on the year ended 31 December 2021 profit, which is determined as follows in US$ million:

   Year ended    
   2021     2020    
Profit for the year  829.5     745.4    
Taxation and royalties  537.3     537.5    
Non-recurring items  89.0     (34.1)   
Long-term incentive scheme  28.5     51.3    
Share-based payments  12.7     14.5    
Loss on financial instruments  100.4     238.9    
Loss/(gain) on foreign exchange  1.9     (8.6)   
Equity accounted loss, after taxation  32.0     2.6    
Net interest expense  82.9     105.8    
Amortisation and depreciation  713.2     661.3    
Realised loss on financial instruments*  (43.5)    (416.6)   
Other*  9.7     12.2    
Adjusted EBITDA  2,393.6     1,910.2    

Adjusted EBITDA is defined by the Group as profit or loss for the year adjusted for interest, taxation, amortisation and depreciation and certain other non-operating costs.
*Based on information underlying the reviewed condensed consolidated financial statements of Gold Fields Limited for the years ended 31 December 2021 and 31 December 2020.

Adjusted free cash flow margin for LTIP purposes

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

The FCF for the Group for the year ended 2021 is calculated as follows:

   Year ended 2021    
   US$'m     US$/oz    
Revenue1  3,962.9     1,7984    
Less: Cash outflow  (2,970.1)    (1,348)   
AIC  (2,832.0)2     (1,285)   
Adjusted for:             
Share-based payments (non-cash) 12.7     6    
Long-term employee benefits (non-cash) 28.5     13    
Exploration, feasibility and evaluation             
costs outside of existing operations*  28.1     13    
Non-sustaining expenditure (Salares Norte) 350.9     159    
Revenue hedge (realised)*  (77.2)    (35)   
Redemption of Asanko preference shares  5.0     2    
Payment of long-term employee benefits  (37.3)    (17)   
Tax paid (excluding royalties which is included in AIC above) (448.8)    (240)   
Adjusted free cash flow for LTIP purposes3  992.8     450    
Adjusted FCF margin for LTIP purposes  25%          
Gold sold only – 000'oz  2,203.6          
1 Revenue from income statement at US$4,195.2m less revenue from Cerro Corona by-products in AIC at US$232.3m equals US$3,962.9m.
2 AIC for the Group of US$2,983.6m less AIC for Asanko of US$151.6m.
3 Adjusted free cash flow for LTIP purposes does not agree with cash flows from operating activities less capital expenditure in the statement of cash flows on page 30 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.
* Based on information underlying the reviewed condensed consolidated financial statements of Gold Fields Limited for the year ended 31 December 2021.

 

   Year ended 2020    
   US$'m     US$/oz    
Revenue1  3,748.0     1,7714    
Less: Cash outflow  (2,710.8)    (1,281)   
AIC  (2,258.3)2     (1,067)   
Adjusted for:             
Share-based payments (non-cash) 14.5     7    
Long-term employee benefits (non-cash) 51.3     24    
Exploration, feasibility and evaluation costs outside of existing operations*  31.4     15    
Non-sustaining capital expenditure (Damang reinvestment and Salares Norte) 102.8     49    
Revenue hedge (realised)*  (411.3)    (194)   
Redemption of Asanko preference shares  37.5     18    
Tax paid (excluding royalties which is included in AIC above) (278.7)    (132)   
Adjusted free cash flow for LTIP purposes3   1,037.2      490    
Adjusted FCF margin for LTIP purposes  28%          
Gold sold only – 000'oz  2,116.7          
1 Revenue from income statement at US$3,892.1m less revenue from Cerro Corona by-products in AIC at US$144.1m equals US$3,748.0m.
2 AIC for the Group of US$2,402.7m less AIC for Asanko of US$144.4m.
3 Adjusted free cash flow for LTIP purposes does not agree with cash flows from operating activities less capital expenditure in the statement of cash flows on page 30 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.
* Based on information underlying the reviewed condensed consolidated financial statements of Gold Fields Limited for the year ended 31 December 2020.

The FCF margin of 25% in 2021 at a gold price of US$1,798/oz compared with 28% in 2020 at a gold price of US$1,771/oz.