Gold Fields (GFI) - 2023 Q2 - Quarterly Report

Highlights and Strategic Overview Gold Fields' H1 2023 performance was shaped by strategic corporate actions, solid operating results despite challenges, and a focus on internal initiatives Strategic Initiatives & Corporate Actions Gold Fields advanced its strategy in H1 2023 through two key corporate actions: the proposed Tarkwa/Iduapriem JV in Ghana and the Windfall JV in Canada - Proposed Tarkwa/Iduapriem JV in Ghana (March 2023) and Windfall JV in Canada (May 2023) to grow portfolio value and quality[1] - Accelerated internal initiatives: "Gold Fields Way" culture journey and Asset Optimisation to unlock potential and drive improved business value[2] H1 2023 Performance Snapshot Despite a challenging operating environment, Gold Fields delivered solid H1 2023 results with a 4% production decrease, 3% AIC rise, 9% earnings decrease, and US$140 million free cash flow - Solid operating results achieved despite challenging environment with elevated mining cost inflation and strong competition for skills[3] - Attributable production decreased 4% (in line with plan) and all-in costs (AIC) rose only 3%[3] - Normalised earnings decreased by 9% YoY, and the Company generated free cash flow of US$140 million[3] Health and Safety The company reported one operational fatality and three serious injuries in H1 2023, consistent with H1 2022, plus a non-operational fatal incident - One operational fatality and three serious injuries reported in H1 2023, same as H1 2022[4] - A non-operational fatal incident occurred involving a contractor at the Tarkwa stadium renovation project[4] Cash Flow and Balance Sheet Overview Adjusted free cash flow decreased to US$140 million, net debt increased to US$1,028 million due to the Windfall acquisition and dividends, with a net debt to EBITDA ratio of 0.42x - Adjusted free cash flow for H1 2023 was US$140 million, compared to US$293 million in H1 2022[7] - Net debt increased by US$324 million during H1 2023 to US$1,028 million, driven by Windfall acquisition payment, pre-construction capital, and dividend payments[8] - Net debt to EBITDA ratio was 0.42x at the end of June 2023[8] Dividend Declaration Gold Fields declared an interim dividend of 325 SA cents per share for H1 2023, an 8% increase year-on-year, representing 35.1% of normalised earnings - Interim dividend declared: 325 SA cents per share, an 8% increase YoY compared to 300 SA cents in H1 2022[6] - Dividend represents 35.1% of normalised earnings, in line with the policy of paying out 30%-45% of normalised profit[6] Key Statistics (Summary Table) This section summarizes key financial and operational metrics for H1 2023, Q2 2023, and H1 2022, including gold production, costs, net debt, and earnings | Metric | H1 2023 | H1 2022 | Change (YoY) | | :---------------------------------- | :-------- | :-------- | :----------- | | Attributable Gold Produced (koz) | 1,154 | 1,201 | -4% | | AISC (US$/oz) | 1,215 | 1,148 | +6% | | Total AIC (US$/oz) | 1,398 | 1,352 | +3% | | Net Debt (US$m) | 1,028 | 851 | +21% | | Adjusted Free Cash Flow (US$m) | 140.2 | 292.7 | -52% | | Normalised Earnings (US$m) | 454.2 | 498.4 | -9% | | Normalised EPS (US c.p.s.) | 51 | 56 | -9% | | Metric | H1 2023 | H1 2022 | | :---------------------- | :-------- | :-------- | | Gold price (US$/oz) | 1,927 | 1,851 | | Copper price (US$/tonne) | 8,704 | 9,757 | | US$1 - ZAR | 18.21 | 15.40 | | A$ - US$ | 0.68 | 0.72 | Pro Forma Financial Information Disclosure The report includes non-IFRS financial measures for performance assessment, which are pro forma, the Board's responsibility, and unaudited - Non-IFRS financial measures are included to assess performance and are considered pro forma financial information[37] - These pro forma financial measures are the responsibility of the Group's Board of Directors and have not been reported on by the Group's auditors[37] Group Performance Analysis (H1 2023 vs H1 2022) This section analyzes Gold Fields' H1 2023 performance across ESG, operations, cash flow, and financial position compared to H1 2022 ESG Performance Gold Fields' H1 2023 ESG performance showed mixed results, with decreased CO2 emissions but one operational and one non-operational fatality Health and Safety The company reported one operational and one non-operational fatality, along with three serious injuries, while improving its Total Recordable Injury Frequency Rate - One operational fatality and one non-operational fatality reported in H1 2023, with three serious injuries[40] - Total Recordable Injury Frequency Rate (TRIFR) improved to 2.08 in H1 2023 from 2.36 in H1 2022[40] Environmental Performance Environmental incidents remained low, CO2 emissions decreased due to renewable energy, but fresh water withdrawal increased in H1 2023 - No Level 3-5 environmental incidents reported for H1 2023[42] - Scope 1 and 2 CO2 emissions decreased to 819kt in H1 2023 from 864kt in H1 2022, with renewable energy accounting for 16% of total electricity consumption (up from 12%)[43] - Fresh water withdrawal increased to 5.3 gigalitres (GL) in H1 2023 from 4.7 GL in H1 2022[43] Social Impact Value distribution to national economies remained stable, host community workforce decreased, but procurement spend with host communities increased in H1 2023 - Group's value distribution to national economies was US$1.9 billion for H1 2023, stable YoY[48] - Host community workforce decreased by 9% to 48% of the total workforce, attributed to competitive labor markets[49] - Host community procurement spend increased to US$426 million (34% of total spend) in H1 2023 from US$358 million (30%) in H1 2022[49] Operating Performance Gold Fields' H1 2023 operating performance saw a 4% decrease in attributable gold equivalent production, 1% revenue increase, and an 11% decrease in profit for the period Production and Sales Attributable gold equivalent production decreased by 4% to 1,154.2 thousand ounces in H1 2023, primarily due to planned declines at Damang - Attributable gold equivalent production decreased by 4% to 1,154.2koz in H1 2023 (H1 2022: 1,200.5koz), primarily due to planned decline at Damang[54] - Managed equivalent gold production also decreased by 4% to 1,197.2koz in H1 2023 (H1 2022: 1,245.3koz)[54] Revenue Analysis Revenue increased by 1% to US$2,266 million in H1 2023 due to a 4% higher average gold price, despite a 2% decrease in gold equivalent ounces sold - Revenue increased by 1% to US$2,266 million in H1 2023 (H1 2022: US$2,235 million)[63] - Average US Dollar gold price achieved increased by 4% to US$1,927/eq oz[62] - Gold equivalent ounces sold (excluding Asanko) decreased by 2% from 1.21Moz to 1.18Moz[63] Cost of Sales Analysis Cost of sales before amortisation and depreciation increased by 2% to US$939 million in H1 2023, mainly due to inflationary pressures - Cost of sales before amortisation and depreciation increased by 2% to US$939 million in H1 2023 (H1 2022: US$923 million)[63] - Increase mainly due to inflationary cost pressures impacting all regions, partially offset by weakening Australian Dollar and South African Rand[63] Amortisation and Depreciation Amortisation and depreciation increased by 12% to US$424 million in H1 2023, primarily due to additional ounces mined at Tarkwa - Amortisation and depreciation increased by 12% to US$424 million in H1 2023 (H1 2022: US$378 million), mainly due to additional ounces mined at Tarkwa[68] Investment Income and Finance Expense Investment income surged by 225% due to higher cash balances, while finance expense decreased by 13% due to lower borrowings - Investment income increased by 225% to US$13 million in H1 2023 (H1 2022: US$4 million) due to higher cash balances[69] - Finance expense decreased by 13% to US$33 million in H1 2023 (H1 2022: US$38 million) due to lower borrowings and higher interest capitalised[70] Equity-Accounted Investees & Financial Instruments Equity-accounted investees generated a US$10 million gain, primarily from Asanko, while gains on financial instruments were nil as contracts matured - Share of results of equity-accounted investees after taxation was a gain of US$10 million in H1 2023 (H1 2022: loss of US$5 million), primarily from Asanko[71] - Gain on financial instruments was nil in H1 2023 (H1 2022: US$23 million) as all contracts reached maturity[72] Other Expenses (Share-based payments, LTIP, Other costs, Exploration, Non-recurring items, Royalties) Share-based payments, long-term incentive plan, other costs, and exploration expenses generally increased, while non-recurring items decreased and royalties rose slightly - Share-based payments increased by 25% to US$5 million in H1 2023[74] - Long-term incentive plan increased by 118% to US$24 million in H1 2023[75] - Other costs, net, increased by 91% to US$21 million, mainly due to higher offshore office costs and loan facility cancellation fees[76] - Exploration expense increased by 15% to US$38 million due to higher spend in Australia[77] - Non-recurring expenses decreased by 80% to US$2 million, mainly restructuring costs at Tarkwa[78] - Government royalties increased by 2% to US$60 million, in line with higher revenue[78] Mining and Income Taxation Total taxation charge remained stable at US$275 million in H1 2023, with normal taxation increasing and deferred tax decreasing - Total taxation charge remained stable at US$275 million in H1 2023 (H1 2022: US$274 million)[79] - Normal taxation increased by 13% to US$253 million, while deferred tax charge decreased by 55% to US$22 million[79] Profit for the Period Profit for the period decreased by 11% to US$475 million, with net profit attributable to owners of the parent decreasing by 10% to US$458 million - Profit for the period decreased by 11% to US$475 million in H1 2023 (H1 2022: US$534 million)[80] - Net profit attributable to owners of the parent decreased by 10% to US$458 million (US$0.51 per share) in H1 2023 (H1 2022: US$510 million or US$0.57 per share)[80] Normalised Profit Reconciliation Normalised profit attributable to owners of the parent decreased by 9% to US$454 million (US$0.51 per share) in H1 2023 - Normalised profit attributable to owners of the parent decreased by 9% to US$454 million (US$0.51 per share) in H1 2023 (H1 2022: US$498 million or US$0.56 per share)[81] Cash Flow Analysis Gold Fields' H1 2023 cash flow saw a 16% decrease in operating cash inflow, a 40% surge in investing outflow, and a 130% higher net cash inflow from financing activities Operating Activities Cash inflow from operating activities decreased by 16% to US$735 million in H1 2023, mainly due to lower profit and increased working capital investment - Cash inflow from operating activities decreased by 16% to US$735 million in H1 2023 (H1 2022: US$871 million)[85] - Decrease mainly due to lower profit before royalties and taxation, and an investment in working capital (inventory build-up)[85] Investing Activities (Capital Expenditure, Acquisitions) Cash outflow from investing activities increased by 40% to US$773 million, driven by the Windfall acquisition and capital expenditure, despite a 7% reduction in total capex - Cash outflow from investing activities increased by 40% to US$773 million in H1 2023 (H1 2022: US$552 million)[87] - Total capital expenditure decreased by 7% to US$508 million in H1 2023 (H1 2022: US$545 million)[88] - Non-sustaining capital expenditure decreased by 18% to US$168 million, mainly due to reduced project capital at Salares Norte[88] - US$222 million (C$300 million) contributed for 50% stake in Windfall joint venture[99] Financing Activities Net cash inflow from financing activities increased by 130% to US$159 million, driven by US$469 million draw-downs on offshore loans - Net cash inflow from financing activities increased by 130% to US$159 million in H1 2023 (H1 2022: US$69 million)[101] - Driven by US$469 million draw-down on offshore loans, partially offset by repayments and lease liability payments[101] Adjusted Free Cash Flow Adjusted free cash flow decreased by 52% to US$140 million due to lower operating cash flows, higher working capital investment, and increased capital contributions - Adjusted free cash flow decreased by 52% to US$140 million in H1 2023 (H1 2022: US$293 million)[102] - Decrease due to lower operating cash flows, higher investment in working capital, higher dividends, and Windfall capital contributions[102] Financial Position Gold Fields' financial position in H1 2023 showed a 46% increase in net debt to US$1,028 million, with the net debt to adjusted EBITDA ratio rising to 0.42x Net Debt and Leverage Net debt increased by 46% to US$1,028 million, with net debt excluding lease liabilities more than doubling to US$629 million - Net debt increased by 46% from US$704 million at 31 December 2022 to US$1,028 million at 30 June 2023[105] - Net debt (excluding lease liabilities) increased by 103% from US$310 million to US$629 million[105] Adjusted EBITDA Adjusted EBITDA for the 12 months ended June 2023 was US$2,424 million, a decrease from US$2,590 million in H1 2022 - Adjusted EBITDA for the 12 months ended June 2023 was US$2,424 million (H1 2022: US$2,590 million)[107][109] Net Debt/Adjusted EBITDA The net debt/adjusted EBITDA ratio increased to 0.42x at June 30, 2023, reflecting higher debt levels relative to EBITDA - Net debt/adjusted EBITDA ratio increased to 0.42x at 30 June 2023 (H1 2022: 0.33x)[106] Cost Benchmarks (AISC & AIC) Group AISC increased by 6% to US$1,215/oz and AIC rose by 3% to US$1,398/oz in H1 2023, driven by lower gold sold and higher cost of sales - Group AISC increased by 6% to US$1,215/oz in H1 2023 (H1 2022: US$1,148/oz)[110] - Total AIC increased by 3% to US$1,398/oz in H1 2023 (H1 2022: US$1,352/oz)[111] - Normalising for exchange rates, AISC would be US$1,284/oz (+12%) and AIC US$1,469/oz (+9%)[110][112] Regional Operations Review (H1 2023 vs H1 2022) This section reviews the H1 2023 operational and financial performance of Gold Fields' regional operations compared to H1 2022 Australia Region The Australian region experienced a 3% decrease in gold production to 509 thousand ounces, with AIC increasing by 12% to A$1,879/oz due to inflationary pressures - Gold production decreased by 3% to 509koz in H1 2023 (H1 2022: 527koz), with lower production from Granny Smith, St Ives, and Agnew[115] - AIC increased by 12% to A$1,879/oz (US$1,270/oz) due to inflationary pressures[116] - Adjusted free cash flow decreased by 10% to A$293 million (US$198 million)[116] Gruyere Gruyere's gold production increased by 1% due to higher ore processed, but total tonnes mined decreased by 20%, and AIC rose by 21% due to increased capital expenditure - Gold production increased by 1% to 158.7koz in H1 2023 (H1 2022: 156.8koz) due to increased ore processed[117] - Total tonnes mined decreased by 20% to 15.60 million tonnes due to lower reliability and utilisation of production drills, and a significant rain event[118] - AIC increased by 21% to A$1,648/oz (US$1,114/oz) due to increased capital expenditure and higher cost of sales[122] - FY2023 production guidance updated to 320koz - 350koz (100% basis), down from 340koz - 370koz[29] Granny Smith Granny Smith's gold production decreased by 3% due to lower ore grade, with AIC increasing by 15% and adjusted pre-tax free cash flow decreasing by 32% - Gold production decreased by 3% to 134.1koz in H1 2023 (H1 2022: 138.3koz) due to lower grade of ore mined and processed[126] - Grade mined decreased by 12% to 5.17 g/t due to lower grades from specific mining areas[128] - AIC increased by 15% to A$1,913/oz (US$1,293/oz) due to higher cost of sales, capital expenditure, and lower gold sold[130] - Adjusted pre-tax free cash flow decreased by 32% to A$97 million (US$65 million)[135] St Ives St Ives' gold production decreased by 3% due to lower yield, with AIC increasing by 8%, and adjusted pre-tax free cash flow decreasing by 40% - Gold production decreased by 3% to 184.2koz in H1 2023 (H1 2022: 190.3koz) due to lower combined yield[136] - AIC increased by 8% to A$1,858/oz (US$1,256/oz) due to higher cost of sales and lower gold sold, partially offset by lower capital expenditure[141] - Adjusted pre-tax free cash flow decreased by 40% to A$133 million (US$90 million)[145] - FY2023 production guidance updated positively to 385,000oz (original guidance 380,000oz)[147] Agnew Agnew's gold production decreased by 7% due to lower ore grade, with AIC increasing by 8%, while adjusted pre-tax free cash flow remained stable - Gold production decreased by 7% to 111.7koz in H1 2023 (H1 2022: 120.5koz) due to a decrease in grade of ore mined and processed[148] - Overall grade mined from underground mines decreased by 12% to 6.50g/t[149] - AIC increased by 8% to A$2,038/oz (US$1,377/oz) due to higher cost of sales and lower gold sold, partially offset by decreased capital expenditure[151] - Adjusted pre-tax free cash flow was A$87 million (US$59 million), stable YoY[156] South Africa Region South Deep's gold production decreased by 5% in H1 2023 due to reduced stope availability from ground-related incidents and a shortage of skilled operators South Deep South Deep's gold production decreased by 5% due to ground-related incidents and skilled operator shortages, but adjusted free cash flow increased by 55% - Gold produced decreased by 5% to 4,841kg (155.7koz) in H1 2023 (H1 2022: 5,097kg or 163.9koz)[160] - Production impacted by reduced stope availability due to ground-related incidents and shortage of skilled operators[160][161] - AIC increased by 15% to R811,816/kg (US$1,387/oz) in H1 2023 (H1 2022: R705,623/kg or US$1,425/oz)[165] - Adjusted free cash flow increased by 55% to R1,759 million (US$97 million) due to higher gold price and lower capital expenditure[170] - FY2023 production guidance updated to 10,000kg (321,500oz), down from 10,800kg (347,200oz)[30][171] Ghana Region Total gold production in Ghana decreased by 6% to 397 thousand ounces, with AIC decreasing by 2% to US$1,210/oz, and adjusted free cash flow decreasing by 25% - Total production decreased by 6% to 397koz in H1 2023 (H1 2022: 424koz), mainly due to planned decreases at Damang and Asanko[172] - AIC decreased by 2% to US$1,210/oz in H1 2023 (H1 2022: US$1,230/oz)[172] - Adjusted free cash flow (excluding Asanko) decreased by 25% to US$116 million[172] Damang Damang's gold production decreased as planned by 37% due to lower yield, with AIC increasing by 28%, and adjusted free cash flow decreasing by 63% - Gold production decreased as planned by 37% to 79.3koz in H1 2023 (H1 2022: 125.2koz) due to lower yield from low-grade material and completion of high-grade mining[173] - Yield decreased by 38% to 1.03g/t[173] - AIC increased by 28% to US$1,230/oz in H1 2023 (H1 2022: US$964/oz)[175] - Adjusted free cash flow decreased by 63% to US$18 million[179] - FY2023 production guidance revised up to 142,000oz (original guidance 136,000oz)[180][181] Tarkwa Tarkwa's gold production increased by 12% due to higher grade, with AIC decreasing by 10%, but adjusted cash flow decreased by 7% - Gold production increased by 12% to 287.7koz in H1 2023 (H1 2022: 257.3koz) due to higher grade fed and processed[182] - Yield increased by 11% to 1.28g/t[182] - AIC decreased by 10% to US$1,181/oz in H1 2023 (H1 2022: US$1,306/oz)[184] - Adjusted cash flow decreased by 7% to US$98 million[188] - FY2023 production guidance updated positively to 550,000oz (original guidance 545,000oz)[189][191] Asanko (Equity-accounted Joint Venture) Asanko's gold production decreased as planned by 28% due to lower yield from stockpiles, with no mining activities in H1 2023 - Gold production decreased as planned by 28% to 66.4koz (100% basis) in H1 2023 (H1 2022: 92.4koz) due to lower yield from stockpiles[189] - No ore and waste tonnes mined in H1 2023 due to cessation of mining activities in July 2022[192] - AIC decreased by 9% to US$1,435/oz in H1 2023 (H1 2022: US$1,576/oz)[192] - Total capital expenditure (100% basis) increased by 173% to US$16 million[195] Americas Region In the Americas, the Salares Norte project achieved 94.9% construction completion, with total capital expenditure increasing by 24% Chile (Salares Norte Project) The Salares Norte project reached 94.9% construction completion, with total capital expenditure increasing by 24%, and first production expected in Q4 2023 - Total project construction progress stood at 94.9% at the end of June 2023 (H1 2022: 73.1%)[198] - US$202 million was spent on the project in H1 2023 (H1 2022: US$172 million)[199] - Total capital expenditure increased by 24% to US$180 million (H1 2022: US$145 million)[201] - Sustaining capital expenditure increased by 100% to US$56 million as mining moved from pre-strip to normal capital waste mining[201] - First production expected during Q4 2023, with project capex on track to meet revised guidance of US$1.020 billion[15] Peru (Cerro Corona) Cerro Corona's total equivalent gold production increased by 4% due to higher grades, with AIC per gold ounce decreasing by 23% - Total equivalent gold production increased by 4% to 135.3koz in H1 2023 (H1 2022: 129.9koz) due to higher grades and metallurgical recoveries[205] - AIC per gold ounce decreased by 23% to US$307/oz (H1 2022: US$397/oz)[206] - AIC per equivalent ounce increased by 1% to US$990/eq oz (H1 2022: US$981/eq oz)[207] - Total capital expenditure increased by 23% to US$20 million (H1 2022: US$16 million)[210] - FY2023 guidance remains unchanged as provided in February 2023[212] Corporate Developments & Outlook This section covers Gold Fields' strategic joint ventures, leadership appointments, sustainability-linked financing, industry collaboration, and updated FY2023 guidance Strategic Joint Ventures Gold Fields pursued two significant joint ventures in H1 2023: a proposed partnership in Ghana and a partnership for the Windfall Project in Canada Ghana JV (Tarkwa/Iduapriem) The proposed Ghana JV aims to create Africa's largest gold mine, increasing production and reducing AISC, with Gold Fields holding a 66.7% interest - Proposed joint venture between Gold Fields' Tarkwa mine and AngloGold Ashanti's Iduapriem mine in Ghana[215] - Expected to create Africa's largest gold mine, materially increasing production and reducing AISC[217] - Gold Fields will have a 66.7% interest (excluding Government of Ghana's share) and operate the JV[216][224] - No material additional capital injection is anticipated, improving capital intensity[216] Windfall Project Partnership (Canada) Gold Fields acquired a 50% interest in the Windfall Project for C$300 million, expecting a high-quality, low-cost underground gold mine with exploration potential - Partnership with Osisko Mining Inc. to develop the Windfall Project in Québec, Canada[219] - Gold Fields acquired a 50% interest for an upfront cash payment of C$300 million (US$220 million)[99][225] - Gold Fields will fund the first C$75 million in regional exploration over seven years[219] - The project is expected to be a high-quality, low-cost underground gold mine with significant exploration potential[220] Leadership Appointments Gold Fields announced new leadership appointments, including a Non-Executive Director and several Executive Vice-Presidents, while the search for a permanent CEO continues - Carel Smit appointed as a Non-Executive Director, effective June 1, 2023[222] - New Executive Vice-Presidents appointed: Kelly Carter (Legal & Compliance), Benford Mokoatle (South Africa), Francois Swanepoel (Chief Technical Officer), and Jongisa Magagula (Investor Relations & Corporate Affairs)[222] - The process to appoint a permanent CEO is ongoing, with final interviews planned for September[25] - Executive Director and CFO, Paul Schmidt, advised his intention to proceed on early retirement[26] Sustainability-Linked Financing Gold Fields refinanced its US$1.2 billion revolving credit facility, making it sustainability-linked to gender diversity, decarbonisation, and water stewardship targets - Successfully refinanced its US$1.2 billion 2019 revolving credit facility (RCF) with a sustainability-linked RCF[9][223] - Loan repayment is linked to three key ESG priorities: gender diversity, decarbonisation, and water stewardship, aligned with 2030 ESG targets[9][226] - Gold Fields will benefit from a lower margin if sustainability-linked key performance indicators (KPIs) are fulfilled, and pay a premium if not met[236] Industry Collaboration & SME Support Gold Fields joined the GeoStable Tailings Consortium for tailings management and introduced preferential 14-day payment terms for host community SMEs - Joined the GeoStable Tailings Consortium (GSTC) with eight global mining companies to develop new technological applications for tailings management[227][228] - Introduced preferential payment terms (reduced from 30 to 14 days) for host community SMEs and Aboriginal-owned businesses in Australia to alleviate cash-flow challenges[230] Dividend Policy & Declaration The Board declared an interim dividend of 325 SA cents per ordinary share for H1 2023, subject to a 20% Dividend Withholding Tax - Interim dividend number 98 of 325 SA cents per ordinary share (gross) declared for H1 2023[232] - The interim dividend is subject to a 20% Dividend Withholding Tax[232][237] FY 2023 Guidance Update Gold Fields remains on track to meet its original FY2023 production and cost guidance, with minor mine-specific adjustments and updated exchange rates - On track to meet original FY2023 production and cost guidance, with mine-specific updates due to H1 performance and high mining inflation[27][28][233] | Metric | FY 2023 Guidance (excl. Asanko) | | :---------------------------------- | :------------------------------- | | Attributable Gold Equivalent Production | 2.25Moz - 2.30Moz | | AISC | US$1,300/oz - US$1,340/oz | | AIC | US$1,480/oz - US$1,520/oz | | Total Capex (Group) | US$1.110 billion - US$1.170 billion | - Updated exchange rates for 2023 guidance: A$1/US$0.70 and US$1/R17.00[234] Financial Statements and Notes This section presents Gold Fields' unaudited consolidated interim financial statements for H1 2023, including income, comprehensive income, financial position, equity, cash flows, and detailed notes Basis of Preparation & Non-IFRS Measures The unaudited H1 2023 interim financial statements were prepared under IFRS and the South African Companies Act, presented in US Dollars on a going concern basis - Unaudited interim financial statements prepared in accordance with IFRS (IAS 34) and South African Companies Act[239] - Presented in United States Dollars on a going concern basis, with consistent accounting policies[240] - Non-IFRS financial measures are included for performance assessment, are pro forma, and have not been reported on by the Group's auditors[240][241] Mineral Resources, Reserves & Class Action Settlement No material changes to Mineral Resources and Reserves were reported, and a US$9.3 million provision was made for the silicosis and TB class action settlement - No material changes to Mineral Resources and Mineral Reserves from 31 December 2022[242] - Provision for Gold Fields' share of the silicosis and TB class action settlement amounts to US$9.3 million (R174.8 million) at 30 June 2023[243] - The ultimate outcome of the class action settlement remains uncertain, and the provision is subject to future adjustment[243][244] Revolving Credit Facilities Gold Fields secured R2.5 billion in bilateral revolving credit facilities and refinanced its US$1.2 billion RCF as a sustainability-linked facility - Entered into four bilateral revolving credit facilities with South African banks for a total of R2.5 billion, with a five-year maturity[245] - Refinanced its US$1,200 million 2019 RCF as a sustainability-linked facility, tied to ESG priorities[246][247] Income Statement The H1 2023 consolidated income statement shows a 1% revenue increase to US$2,266.3 million, but an 11% decrease in profit for the period to US$474.6 million | Metric (US$m) | H1 2023 | H1 2022 | | :-------------------------------------------------- | :-------- | :-------- | | Revenue | 2,266.3 | 2,235.3 | | Cost of sales | (1,362.7) | (1,300.4) | | Profit before royalties, taxation and non-recurring items | 811.5 | 875.5 | | Profit for the period | 474.6 | 533.6 | | Profit attributable to owners of the parent | 457.8 | 509.7 | | Basic earnings per share (cents) | 51 | 57 | | Normalised profit attributable to owners of the parent | 454.2 | 498.4 | Statement of Comprehensive Income Total comprehensive income for H1 2023 was US$294.6 million, significantly impacted by negative foreign currency translation adjustments of US$180.0 million | Metric (US$m) | H1 2023 | H1 2022 | | :-------------------------------- | :-------- | :-------- | | Profit for the period | 474.6 | 533.6 | | Other comprehensive income, net of tax | (180.0) | (93.4) | | Total comprehensive income for the period | 294.6 | 440.2 | | Attributable to Owners of the parent | 280.4 | 416.9 | Statement of Financial Position As of June 30, 2023, total assets increased to US$7,847.3 million, total equity rose to US$4,415.6 million, and net debt surged by 46% to US$1,028.4 million | Metric (US$m) | June 2023 | Dec 2022 | | :-------------------------------- | :-------- | :-------- | | Total assets | 7,847.3 | 7,338.1 | | Total equity | 4,415.6 | 4,339.5 | | Total equity and liabilities | 7,847.3 | 7,338.1 | | Net debt | 1,028.4 | 704.1 | | Net debt (excluding lease liabilities) | 629.4 | 309.9 | Statement of Changes in Equity Total equity increased to US$4,415.6 million at June 30, 2023, driven by profit for the period, partially offset by other comprehensive income and dividends | Metric (US$m) | June 2023 | Dec 2022 (Balance at 31 Dec 2021) | | :-------------------------------- | :-------- | :------------------------------- | | Balance at 31 December | 4,339.5 | 4,130.1 | | Total comprehensive income | 294.6 | 440.2 | | Dividends declared | (214.7) | (153.2) | | Balance at 30 June | 4,415.6 | 4,406.6 (Balance at 30 June 2022) | Statement of Cash Flows The H1 2023 consolidated statement of cash flows shows a net cash outflow of US$102.2 million, a reversal from H1 2022, with adjusted free cash flow decreasing by 52% | Metric (US$m) | H1 2023 | H1 2022 | | :-------------------------------- | :-------- | :-------- | | Cash flows from operating activities | 735.2 | 871.0 | | Dividends paid | (223.2) | (167.8) | | Cash flows from investing activities | (773.0) | (551.6) | | Cash flows from financing activities | 158.8 | 68.6 | | Net cash (utilised)/generated | (102.2) | 220.2 | | Adjusted free cash flow | 140.2 | 292.7 | Notes to Financial Statements This section provides detailed breakdowns and explanations for various financial statement line items, including revenue, cost of sales, expenses, and capital commitments | Revenue Source (US$m) | H1 2023 | H1 2022 | | :--------------------- | :-------- | :-------- | | Gold | 2,151.7 | 2,132.1 | | Copper | 114.6 | 103.2 | | Total Revenue | 2,266.3 | 2,235.3 | | Cost of Sales Component (US$m) | H1 2023 | H1 2022 | | :------------------------------- | :-------- | :-------- | | Salaries and wages | (205.4) | (199.9) | | Consumable stores | (196.2) | (187.6) | | Mine contractors | (366.0) | (322.5) | | Gold inventory change | 74.3 | 21.3 | | Amortisation and depreciation | (423.5) | (377.8) | | Total cost of sales | (1,362.7) | (1,300.4) | | Expense Category (US$m) | H1 2023 | H1 2022 | | :----------------------- | :-------- | :-------- | | Exploration expense | (37.6) | (32.8) | | Royalties | (60.2) | (58.6) | | Mining and income taxation | (274.6) | (273.5) | | Share-based payments | (4.7) | (4.1) | | Long-term incentive plan | (24.1) | (11.4) | - Basic earnings per share: 51 cents (H1 2023) vs 57 cents (H1 2022)[273] - Total capital commitments contracted for: US$154.8 million (June 2023), including US$81.0 million for Salares Norte[286] Detailed Segmental & Cost Data This section provides granular operating and financial results, along with detailed All-in Cost reconciliations, for each segment and mine Segmental Operating and Financial Results (H1) This section details H1 2023 operating and financial results for each region and mine, including production, costs, revenue, and capital expenditure | Metric | H1 2023 | H1 2022 | | :---------------------------------- | :-------- | :-------- | | Gold Produced (000 attributable oz) | | | | Australia Region | 509.3 | 527.4 | | South Africa (South Deep) | 150.1 | 158.0 | | Ghana Region (incl. Asanko) | 360.2 | 385.8 | | Americas Region (Cerro Corona) | 134.6 | 129.3 | | Total AIC (US$/oz) | | | | Australia Region | 1,270 | 1,211 | | South Africa (South Deep) | 1,387 | 1,425 | | Ghana Region | 1,210 | 1,230 | | Americas Region (Cerro Corona) | 990 | 981 | | Americas Region (Salares Norte) | 3,042 | 2,970 | | Financial Metric (US$m) | H1 2023 | H1 2022 | | :---------------------------------- | :-------- | :-------- | | Revenue | | | | Australia Region | 997.8 | 991.7 | | South Africa (South Deep) | 259.6 | 217.7 | | Ghana Region (excl. Asanko) | 775.7 | 792.4 | | Americas Region (Cerro Corona) | 291.3 | 235.5 | | Net profit/(loss) before non-recurring items | | | | Australia Region | 257.7 | 277.7 | | South Africa (South Deep) | 41.7 | 28.4 | | Ghana Region (excl. Asanko) | 164.2 | 141.5 | | Americas Region (Cerro Corona) | 40.6 | 43.2 | | Americas Region (Salares Norte) | 3.3 | (14.8) | All-in Cost (World Gold Council Standard) (H1) This section provides a detailed reconciliation of AISC and AIC for the Group and by region/mine for H1 2023 and H1 2022, adhering to World Gold Council standards | Metric (US$m) | H1 2023 | H1 2022 | | :-------------------------------------------------- | :-------- | :-------- | | AISC (excluding equity-accounted JV) | | | | Group | (1,323.1) | (1,281.3) | | Americas Region (Total) | (72.0) | (19.5) | | Ghana Region (Total) | (479.0) | (505.3) | | South Africa Region (South Deep) | (211.5) | (222.7) | | AIC (excluding equity-accounted JV) | | | | Group | (1,527.1) | (1,518.2) | | Americas Region (Total) | (220.8) | (185.6) | | Ghana Region (Total) | (485.6) | (519.1) | | South Africa Region (South Deep) | (211.5) | (233.6) | | Metric (US$/oz) | H1 2023 | H1 2022 | | :---------------------------------- | :-------- | :-------- | | AISC per ounce of gold sold | | | | Group | 1,215 | 1,148 | | Australia Region | 1,169 | 1,117 | | South Africa (South Deep) | 1,387 | 1,359 | | Ghana Region | 1,194 | 1,197 | | Americas Region (Cerro Corona) | 168 | 312 | | AIC per ounce of gold sold | | | | Group | 1,398 | 1,352 | | Australia Region | 1,270 | 1,211 | | South Africa (South Deep) | 1,387 | 1,425 | | Ghana Region | 1,210 | 1,230 | | Americas Region (Cerro Corona) | 307 | 397 | Underground and Surface Metrics (H1) This section provides detailed H1 2023 and H1 2022 metrics for tonnes mined, grade, gold mined, tonnes milled, and yield, separated by underground and surface operations | Metric (000 tonnes) | H1 2023 | H1 2022 | | :---------------------------------- | :-------- | :-------- | | Total Ore Mined | | | | Australia Region (Total) | 2,123 | 1,002 | | South Africa (South Deep) | 798 | 816 | | Ghana Region (Damang) | 2,265 | 3,610 | | Ghana Region (Tarkwa) | 9,957 | 6,341 | | Americas Region (Cerro Corona) | 6,370 | 5,478 | | Americas Region (Salares Norte) | 420 | 0 | | Total Gold Mined (000 ounces) | | | | Australia Region (Total) | 205.3 | 137.0 | | South Africa (South Deep) | 160.6 | 161.7 | | Ghana Region (Damang) | 77.3 | 182.6 | | Ghana Region (Tarkwa) | 384.2 | 232.6 | | Americas Region (Cerro Corona) | 142.2 | 126.6 | | Americas Region (Salares Norte) | 97.1 | 0 | Quarterly Operations Review (Q2 2023 vs Q1 2023) This section reviews Gold Fields' operational performance for Q2 2023 compared to Q1 2023, detailing regional and mine-specific production and cost trends Australia Region (Quarterly) The Australian region showed mixed Q2 2023 performance, with Gruyere production decreasing, Granny Smith and Agnew increasing, and St Ives stable but concluding open pit mining | Metric (000 managed eq oz) | Q2 2023 | Q1 2023 | | :---------------------------------- | :-------- | :-------- | | Gold Produced (Total Australia) | 266.5 | 242.8 | | Gruyere (50%) | 38.0 | 41.3 | | Granny Smith | 73.2 | 60.8 | | St Ives | 91.5 | 92.7 | | Agnew | 63.7 | 48.0 | | Metric (US$/oz) | Q2 2023 | Q1 2023 | | :---------------------------------- | :-------- | :-------- | | Total AIC (Total Australia) | 1,299 | 1,239 | | Gruyere (50%) | 1,154 | 1,077 | | Granny Smith | 1,254 | 1,340 | | St Ives | 1,450 | 1,079 | | Agnew | 1,228 | 1,580 | Gruyere (Quarterly) Gruyere's gold production decreased by 8% in Q2 2023 due to a planned mill shutdown, leading to a 10% increase in AIC - Gold production decreased by 8% to 76.1koz in Q2 2023 (Q1 2023: 82.6koz) due to a planned mill shutdown[308] - AIC increased by 10% to A$1,727/oz (US$1,154/oz) in Q2 2023 (Q1 2023: A$1,575/oz or US$1,077/oz) due to lower gold sold and increased capital expenditure[312] Granny Smith (Quarterly) Granny Smith's gold production increased by 20% in Q2 2023 due to higher ore and grade, resulting in a 4% decrease in AIC - Gold production increased by 20% to 73.2koz in Q2 2023 (Q1 2023: 60.8koz) due to increased ore and grade mined and processed[314] - AIC decreased by 4% to A$1,875/oz (US$1,254/oz) in Q2 2023 (Q1 2023: A$1,960/oz or US$1,340/oz) due to higher gold sales and lower capital expenditure[316] St Ives (Quarterly) St Ives' gold production remained stable in Q2 2023, but open pit mining concluded, and AIC increased by 37% due to higher costs and capital expenditure - Gold production decreased by 1% to 91.5koz in Q2 2023 (Q1 2023: 92.7koz)[319] - Mining activities at Neptune open pit stage 7 concluded in Q2 2023, with focus shifting to pre-stripping Swiftsure pit and rehabilitation[321][322] - AIC increased by 37% to A$2,166/oz (US$1,450/oz) in Q2 2023 (Q1 2023: A$1,578/oz or US$1,079/oz) due to increased cost of sales, capital expenditure, and lower gold sold[323] Agnew (Quarterly) Agnew's gold production increased by 33% in Q2 2023 due to higher ore volumes and grade, leading to a 21% decrease in AIC - Gold production increased by 33% to 63.7koz in Q2 2023 (Q1 2023: 48.0koz) due to increased ore volumes and grade mined and processed[327] - Overall grade mined from underground mines increased by 24% to 7.17g/t[328] - AIC decreased by 21% to A$1,837/oz (US$1,228/oz) in Q2 2023 (Q1 2023: A$2,311/oz or US$1,580/oz) due to higher gold sold and lower capital expenditure[332] South Africa Region (Quarterly) South Deep's total tonnes mined improved by 34% in Q2 2023, but gold production decreased by 23% due to ore phasing, leading to a 19% increase in AIC - Total tonnes mined increased by 34% to 542kt in Q2 2023 (Q1 2023: 404kt)[336] - Gold produced decreased by 23% to 2,107kg (67.8koz) in Q2 2023 (Q1 2023: 2,734kg or 87.9koz), with Q1 production elevated by GIP release[336] - AIC increased by 19% to R891,619/kg (US$1,479/oz) in Q2 2023 (Q1 2023: R751,830/kg or US$1,317/oz) due to a decrease in gold sold[340] South Deep (Quarterly) South Deep's total tonnes mined increased by 34% in Q2 2023, but gold production decreased by 23% due to ore phasing, while reef grade mined improved - Total tonnes mined increased by 34% to 542kt in Q2 2023 (Q1 2023: 404kt)[336] - Gold produced decreased by 23% to 2,107kg (67.8koz) in Q2 2023 (Q1 2023: 2,734kg or 87.9koz)[336] - Reef grade mined increased by 22% to 6.77g/t in Q2 2023 (Q1 2023: 5.56g/t)[337] - AIC increased by 19% to R891,619/kg (US$1,479/oz) in Q2 2023 (Q1 2023: R751,830/kg or US$1,317/oz)[340] Ghana Region (Quarterly) Ghana's regional performance in Q2 2023 showed a 6% increase in gold production and a 3% increase in AIC quarter-on-quarter | Metric (000 managed eq oz) | Q2 2023 | Q1 2023 | | :---------------------------------- | :-------- | :-------- | | Gold Produced (Total Ghana) | 203.9 | 193.0 | | Damang | 39.8 | 39.5 | | Tarkwa | 148.9 | 138.8 | | Asanko (45%) | 15.2 | 14.7 | | Metric (US$/oz) | Q2 2023 | Q1 2023 | | :---------------------------------- | :-------- | :-------- | | Total AIC (Total Ghana) | 1,227 | 1,193 | | Damang | 1,130 | 1,329 | | Tarkwa | 1,228 | 1,131 | | Asanko (45%) | 1,479 | 1,394 | Damang (Quarterly) Damang's gold production increased slightly by 1% in Q2 2023 due to higher throughput, while AIC decreased by 15% due to lower costs - Gold production increased by 1% to 39.8koz in Q2 2023 (Q1 2023: 39.5koz) due to higher throughput[344] - AIC decreased by 15% to US$1,130/oz in Q2 2023 (Q1 2023: US$1,329/oz) due to lower cost of sales, studies, and capital expenditure[346] Tarkwa (Quarterly) Tarkwa's gold production increased by 7% in Q2 2023 due to higher ore tonnes and grade, but AIC rose by 9% due to increased costs and capital expenditure - Gold production increased by 7% to 148.9koz in Q2 2023 (Q1 2023: 138.8koz) due to higher ore tonnes and grade mined and milled[348] - AIC increased by 9% to US$1,228/oz in Q2 2023 (Q1 2023: US$1,131/oz) due to higher cost of sales and capital expenditure[349] Asanko (Equity-accounted JV) (Quarterly) Asanko's gold production increased by 3% in Q2 2023 due to higher recovery, with no mining activities, and AIC increased by 6% - Gold production increased by 3% to 33.7koz (100% basis) in Q2 2023 (Q1 2023: 32.7koz) due to higher recovery[353] - No tonnes mined in both quarters due to temporary cessation of mining activities in July 2022[354] - AIC increased by 6% to US$1,479/oz in Q2 2023 (Q1 2023: US$1,394/oz) due to lower gold sold and higher capital expenditure[354] Americas Region (Quarterly) In Q2 2023, Salares Norte progressed to 94.0% completion, while Cerro Corona's gold equivalent production decreased by 20%, leading to a 36% increase in AIC | Metric (000 managed eq oz) | Q2 2023 | Q1 2023 | | :---------------------------------- | :-------- | :-------- | | Gold Produced (Total Americas) | 60.2 | 75.1 | | Cerro Corona | 60.2 | 75.1 | | Salares Norte | 0 | 0 | | Metric (US$/eq oz) | Q2 2023 | Q1 2023 | | :---------------------------------- | :-------- | :-------- | | Total AIC (Total Americas) | 1,162 | 853 | | Cerro Corona | 1,162 | 853 | | Salares Norte | 3,699 | 2,516 | Chile (Salares Norte Project) (Quarterly) The Salares Norte project reached 94.0% completion in Q2 2023, with total capital expenditure decreasing by 5%, and no ore mined due to an infill drilling campaign - Total project progress was 94.0% at the end of June 2023 (March 2023: 90.4%)[356] - Total spend for Q2 2023 was US$88 million, comprising US$87 million capital expenditure and US$5 million exploration[357] - Total capital expenditure decreased by 5% to US$87 million in Q2 2023 (Q1 2023: US$92 million)[359] - No ore was mined in Q2 2023 due to an infill drilling campaign; mining of ore will continue in Q3[358] Peru (Cerro Corona) (Quarterly) Cerro Corona's gold equivalent production decreased by 20% in Q2 2023 due to lower grades and recoveries, leading to a 36% increase in AIC per equivalent ounce - Gold equivalent production decreased by 20% to 60.2koz in Q2 2023 (Q1 2023: 75.1koz) due to lower grades, recoveries, and tonnes processed[363] - AIC per equivalent ounce increased by 36% to US$1,162/eq oz in Q2 2023 (Q1 2023: US$853/eq oz)[367] - Increase in AIC due to lower copper by-product credit, higher operating costs, and higher capital expenditure[366] - Total capital expenditure increased by 34% to US$11 million in Q2 2023 (Q1 2023: US$9 million)[367] Quarterly Detailed Segmental & Cost Data This section provides detailed quarterly operating metrics and cost benchmarks for each region and mine, offering a granular view of performance trends Salient Features and Cost Benchmarks (Quarterly) This section details quarterly operating metrics and cost benchmarks for each region and mine for Q2 2023, Q1 2023, and Q2 2022 | Metric | Q2 2023 | Q1 2023 | Q2 2022 | | :---------------------------------- | :-------- | :-------- | :-------- | | Gold Produced (000 managed eq oz) | | | | | Total Group | 598.4 | 598.8 | 643.3 | | Australia Region | 266.5 | 242.8 | 269.0 | | South Africa (South Deep) | 67.8 | 87.9 | 85.9 | | Ghana Region (incl. Asanko) | 203.9 | 193.0 | 214.5 | | Americas Region (Cerro Corona) | 60.2 | 75.1 | 73.9 | | Americas Region (Salares Norte) | 0 | 0 | 0 | | Total AIC (US$/oz) | | | | | Total Group | 1,430 | 1,325 | 1,382 | | Australia Region | 1,299 | 1,239 | 1,183 | | South Africa (South Deep) | 1,479 | 1,317 | 1,410 | | Ghana Region | 1,227 | 1,193 | 1,246 | | Americas Region (Cerro Corona) | 1,162 | 853 | 961 | | Americas Region (Salares Norte) | 3,699 | 2,516 | 2,970 | Underground and Surface Metrics (Quarterly) This section provides a quarterly breakdown of tonnes mined, grade, gold mined, tonnes milled, and yield, distinguishing between underground and surface operations | Metric (000 tonnes) | Q2 2023 | Q1 2023 | Q2 2022 | | :---------------------------------- | :-------- | :-------- | :-------- | | Total Ore Mined | | | | | Total Mine Operations | 12,895 | 13,720 | 11,971 | | Australia Region (Total) | 597 | 1,526 | 807 | | South Africa (South Deep) | 462 | 336 | 451 | | Ghana Region (Damang) | 1,437 | 828 | 1,735 | | Ghana Region (Tarkwa) | 5,079 | 4,879 | 3,058 | | Americas Region (Cerro Corona) | 2,975 | 3,394 | 3,185 | | Americas Region (Salares Norte) | 0 | 420 | 0 | | Total Gold Mined (000 ounces) | | | | | Total Mine Operations | 670.3 | 739.1 | 633.4 | | Australia Region (Total) | 257.8 | 290.3 | 252.3 | | South Africa (South Deep) | 100.5 | 60.1 | 87.7 | | Ghana Region (Damang) | 48.3 | 29.0 | 90.4 | | Ghana Region (Tarkwa) | 199.7 | 184.5 | 109.7 | | Americas Region (Cerro Corona) | 64.1 | 78.1 | 77.8 | | Americas Region (Salares Norte) | 0 | 97.1 | 0 | Administration and Legal Disclosures This section provides corporate information, contact details, and a disclaimer regarding forward-looking statements Corporate Information This section provides essential administrative and corporate contact information for Gold Fields Limited, including registered offices and website - Registered office: 150 Helen Road, Sandown, Sandton, Johannesburg[378] - Website: www.goldfields.com[381](index=381&type=chunk) - Listings: JSE / NYSE / GFI[381] Forward-Looking Statements This section contains a standard disclaimer regarding forward-looking statements, emphasizing inherent risks and uncertainties, and cautions against undue reliance - Announcement contains forward-looking statements within the meaning of the 'safe harbour' provisions of the Private Securities Litigation Reform Act of 1995[382] - These statements are necessary estimates reflecting the best judgment of senior management and involve risks and uncertainties[382] - Readers are cautioned not to place undue reliance on such statements, and Gold Fields undertakes no obligation to update them publicly[382]