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Reviewed Results | Year ended 31 December 2021

Financials Hedging/derivatives (Reviewed)

The Group's policy is to remain unhedged to the gold price. However, hedges are sometimes undertaken as follows:

  • to protect cash flows at times of significant expenditure;
  • for specific debt servicing requirements; and
  • to safeguard the viability of higher cost operations.

Gold Fields may from time to time establish currency financial instruments to protect underlying cash flows.

Derivative instruments*

Ghana – Oil hedge

In June 2019 fixed price ICE Gasoil cash settled swap transactions were entered into for a total of 123.2 million litres of diesel for the period January 2020 to December 2022 based on 50% of usage over the specified period. The average swap price is US$575 per metric tonne (equivalent to US$75.8 per barrel). At the time of the transactions, the average Brent swap equivalent over the tenor was US$59.2 per barrel.

At the reporting date, the marked-to-market value on the hedge was a positive US$3.1m with a realised gain of US$0.3m for the year ended 31 December 2021.

Australia – Oil hedge

In June 2019 fixed price Singapore 10ppm Gasoil cash settled swap transactions were entered into for a total of 75.0 million litres of diesel for the period January 2020 to December 2022 based on 50% of usage over the specified period. The average swap price is US$74.0 per barrel. At the time of the transactions, the average Brent swap equivalent over the tenor was US$57.4 per barrel.

At the reporting date, the marked-to-market value on the hedge was a positive A$2.7m (US$2.0m) with a realised gain of A$0.8m (US$0.6m) for the year ended 31 December 2021.

Australia – Gold hedge

In the first six months of 2020, 400,000oz of the expected production for 2021 was hedged for the period January 2021 to December 2021 using bought puts. Between July and October 2020, an additional 600,000oz of the expected production for 2021 was hedged for the period January 2021 to December 2021 using bought puts. The average strike price of the total 1,000,000oz hedged is A$2,190/oz.

At the reporting date, the hedge had matured and there was a realised loss of A$41.8m (US$31.4m) for the year ended 31 December 2021.

Salares Norte – Currency hedge

In March 2020, a total notional amount of US$544.5m was hedged at a rate of CLP/US$836.45 for the period July 2020 to December 2022.

At the reporting date of 31 December 2021 the marked-to-market value on the hedge was a negative US$6.8m with a realised gain of US$32.9m for the year ended 31 December 2021.

La Cima – Copper hedge

In October and November 2020, a total of 24,000 metric tonnes of copper were hedged using cash settled zero cost collars. The hedges are for the period January 2021 to December 2021 and represent the total planned production for 2021. The average strike price is US$6,525/Mt on the floor and US$7,382/Mt on the cap.

At the reporting date of 31 December 2021, the hedge had matured and there was a realised loss was US$45.8m for the year ended 31 December 2021.

Outstanding hedges

At 31 December 2021, the following hedges are outstanding:

  • Australia – oil hedge – a total of 26.6 million litres of diesel at an average swap price is US$74.0 per barrel using fixed price Singapore 10ppm Gasoil cash settled swap transactions for the period January 2022 to December 2022 with a positive marked-to-market value of A$2.7m (US$2.0m).
  • Ghana – oil hedge – a total of 41.9 million litres of diesel at an average swap price is US$75.8 per barrel using fixed price ICE Gasoil cash settled swap transactions for the period January 2022 to December 2022 with a positive marked-to-market value of US$3.1m.
  • Salares Norte – currency hedge – a total notional amount of US$179.0m at a rate of CLP/US$836.45 for the period January 2022 to December 2022 with a negative marked-to-market value of US$6.8m.

*Have not been designated for hedge accounting and are accounted for as derivative financial instruments in the income statement.