Gold Fields (GFI) - 2022 Q2 - Quarterly Report

Executive Summary Statement by Chris Griffith, CEO Gold Fields delivered strong H1 2022 operational performance with 9% production growth and 16% normalised earnings, declaring a 300 South African cents per share interim dividend - H1 2022 production increased 9% YoY, with all-in costs rising only 6% YoY, leading to a 16% YoY increase in normalised earnings[1] - The proposed acquisition of Yamana Gold was a key focus, viewed as the best option to accelerate growth and deliver long-term shareholder value[2] H1 2022 Key Performance Highlights | Metric | H1 2022 | H1 2021 | YoY Change | |---|---|---|---| Salient Features Gold Fields reported US$510 million profit attributable to owners of the parent for H1 2022, a significant increase, and declared a 300 South African cents per share interim dividend Profit and Dividend Highlights | Metric | H1 2022 | H1 2021 | YoY Change | |---|---|---|---| H1 2022 Overview Covid-19 Update The Covid-19 pandemic's impact significantly abated in H1 2022 due to high vaccination rates and relaxed restrictions, with no employee fatalities and US$12 million in related spending - Impact of Covid-19 pandemic abated in H1 2022, especially in Q2, with 87% of the workforce fully vaccinated[9] - No Covid-related employee fatalities in 2022, though a 4th wave in Chile impacted Salares Norte's program[9] Covid-19 Related Spending | Metric | H1 2022 (US$ million) | |---|---| ESG Developments Gold Fields is progressing well towards its 2030 ESG targets, particularly decarbonization, with Cerro Corona achieving 100% renewable electricity and new solar plants commissioning soon - Progressing well on 2030 ESG targets, especially decarbonizing operations[10] - Cerro Corona mine's electricity supply certified 100% renewable in April[10] - R715 million, 50MW solar plant at South Deep set for Q3 2022 commissioning; US$20 million, 12MW solar - 4.4MW battery plant at Gruyere fully operational in August[10] Regional Performance Highlights The Australian region delivered solid Q2 2022 performance, significantly contributing to H1 production, with Ghana, Cerro Corona, and South Deep also showing strong results H1 2022 Regional Production and Costs | Region | H1 2022 Production (thousand ounces) | AIC (US$ per ounce) | AISC (US$ per ounce) | |---|---|---|---| Update on Salares Norte Project The Salares Norte project reached 77.0% completion by H1 2022, but severe weather and Covid-19 caused 1-3 month delays to production, increasing project capex to US$920 million-US$940 million - Total project progress reached 77.0% by H1 2022, with construction at 73.1%[13] - Construction activities impacted by Covid-19 and severe weather, leading to an estimated 0-3 month delay in production commencement[15] Salares Norte Project Key Updates | Metric | H1 2022 | Original Guidance | Revised Guidance | |---|---|---|---| Proposed Acquisition of Yamana Gold Fields announced a definitive agreement to acquire Yamana Gold Inc. on May 31, 2022, in an all-share transaction valued at US$6.7 billion, with closing expected by mid-November 2022 - Gold Fields entered a definitive agreement to acquire Yamana Gold Inc. on May 31, 2022[18] - Transaction terms: 0.6 Gold Fields ordinary shares or ADSs for each Yamana share[18] - Expected closing by mid-November 2022, subject to shareholder and regulatory approvals[19][20] FY 2022 Guidance Unchanged Gold Fields maintains its FY 2022 production and cost guidance despite higher mining inflation, projecting attributable gold equivalent production between 2.25Moz and 2.29Moz and AISC between US$1,140/oz and US$1,180/oz - FY 2022 guidance remains unchanged due to solid H1 operational performance and offsetting factors for mining inflation[20] FY 2022 Production and Cost Guidance | Metric | 2022 Guidance (excluding Asanko) | 2021 Comparable | |---|---|---| 2022 Effective Mining Inflation Forecast | Region | February 2022 (%) | April 2022 (%) | July 2022 (%) | |---|---|---|---| Key Statistics Key Financial and Operational Metrics Gold Fields reported significant improvements in H1 2022 key financial and operational metrics, including increased gold production, higher revenue, improved profitability, and a stronger balance sheet with decreased net debt Key Statistics (Six months ended) | Metric | June 2022 (Six months) | June 2021 (Six months) | YoY Change (%) | |---|---|---|---| All-in Cost Reconciliation The total all-in cost for H1 2022 increased to US$1,352/oz, up from US$1,274/oz in H1 2021, primarily driven by higher costs at mining operations and the Salares Norte project All-in Cost Reconciliation (US$/oz) | Component | June 2022 (Six months, US$/oz) | June 2021 (Six months, US$/oz) | YoY Change (%) | |---|---|---|---| Currencies and Metal Prices Average exchange rates showed a weakening of the Rand and Australian Dollar against the US Dollar in H1 2022, while average gold and copper prices both increased Average Currencies and Metal Prices (Six months ended) | Metric | June 2022 (Six months) | June 2021 (Six months) | YoY Change (%) | |---|---|---|---| Stock Data and Financial Information Disclosure Stock Data for H1 2022 As of June 30, 2022, Gold Fields had 891,248,083 shares in issue, with its stock trading between US$9.11 - US$16.71 on NYSE and ZAR142.93 - ZAR254.41 on JSE Stock Data (Six months ended 30 June 2022) | Metric | Value | |---|---| Pro Forma Financial Information This section clarifies the use of non-IFRS financial measures like normalised profit and net debt, presented for additional performance insights, which are the Board's responsibility and not audited - The media release includes non-IFRS financial measures to provide relevant information for assessing performance[31] - Key non-IFRS measures include normalised profit, net debt, adjusted free cash flow, and all-in sustaining/total all-in costs[31] - These pro forma financial measures have not been reported on by the Group's auditors[32] Certain Forward-Looking Statements This section contains forward-looking statements regarding Gold Fields' future financial condition, operations, and strategies, which are estimates subject to inherent risks and uncertainties like commodity prices, currency fluctuations, and regulatory impacts - The report contains forward-looking statements regarding financial condition, operations, business strategies, and growth opportunities[35] - These statements are estimates reflecting management's best judgment and involve risks and uncertainties that could cause actual results to differ materially[35] - Important factors include changes in market prices of gold/copper/silver, currency fluctuations, government regulations, operational delays, and the success of the Salares Norte project[37] Six months ended 30 June 2022 (H1 2022) compared with the six months ended 30 June 2021 (H1 2021) Safety and Health Gold Fields reported no fatal injuries since April 2021, but recorded three serious injuries in H1 2022, with TRIFR regressing slightly to 2.36 due to high turnover - No fatal injuries since April 2021; three serious injuries recorded in H1 2022 (down from four in H1 2021)[39] Safety Performance | Metric | H1 2022 | H1 2021 | FY21 | |---|---|---|---| Environmental Performance The Group reported no Level 3-5 environmental incidents in H1 2022, with fresh water withdrawal decreasing by 6% and water recycling at 75%, while energy spend increased by 37% to US$206 million - No Level 3-5 environmental incidents reported in H1 2022[41] Environmental Metrics | Metric | H1 2022 | H1 2021 | YoY Change (%) | |---|---|---|---| - Renewable energy accounted for 12% of total electricity, with Cerro Corona certified 100% renewable[44] Social Performance Gold Fields maintained US$1.9 billion value distribution to national economies in H1 2022, with host community workforce increasing to 53% and SED spending rising to US$9.2 million - Value distribution to national economies remained at US$1.9 billion in H1 2022[47] Social Metrics | Metric | H1 2022 | H1 2021 | YoY Change (%) | |---|---|---|---| COVID-19 Report (Detailed) The impact of COVID-19 significantly diminished in H1 2022 due to high vaccination rates (88% fully vaccinated) and milder variants, with only one hospitalization and US$12 million spent on programs - COVID-19 impact abated in H1 2022, with 88% of the workforce fully vaccinated by late July[52] - Only one hospitalization in H1 2022, compared to at least two employees hospitalized at any time in H1 2021[52] - Total spending on COVID-19 related programs and projects was US$12 million during H1 2022[53] H1 Operating Performance Group attributable equivalent gold production increased by 9% to 1.2 million ounces in H1 2022, driven by strong performances in South Africa, Australia, and South America, partially offset by a 4% decrease in West Africa Group Gold Production (Attributable Equivalent) | Metric | H1 2022 (ounces) | H1 2021 (ounces) | YoY Change (%) | |---|---|---|---| - South Deep (South Africa) attributable gold production increased by 28% to 158,000 ounces[55] - Australian operations' gold production increased by 10% to 527,400 ounces, driven by higher grades and improved mill performance[58] - West African operations' attributable gold production decreased by 4% to 385,800 ounces, mainly due to planned decreases at Damang and Asanko[56] - Cerro Corona (Peru) attributable equivalent gold production increased by 31% to 129,300 ounces due to higher grades and recoveries[57] Revenue Group revenue increased by 13% to US$2,235 million in H1 2022, driven by a 10% increase in gold equivalent ounces sold and a 3% higher average US Dollar gold price Revenue and Gold Price | Metric | H1 2022 | H1 2021 | YoY Change (%) | |---|---|---|---| - Gold equivalent ounces sold (excluding Asanko) increased by 10% to 1.21 million ounces[61] Cost of Sales and Other Expenses Cost of sales before amortisation and depreciation increased by 11% to US$923 million due to inflation, partially offset by weaker currencies, while a US$23 million gain on financial instruments positively impacted results Key Cost and Expense Items | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | YoY Change (%) | |---|---|---|---| - Cost of sales before amortisation and depreciation increased by 11% due to inflationary increases of US$130 million, partially offset by US$39 million impact of weakening AUD and ZAR[62] Gain/(Loss) on Financial Instruments Breakdown | Hedge Type | H1 2022 Gain/(Loss) (US$ million) | H1 2021 Gain/(Loss) (US$ million) | |---|---|---| Mining and Income Taxation The Group's taxation charge increased by 27% to US$274 million in H1 2022, in line with higher profit before tax, with normal taxation rising 17% and deferred tax increasing 104% Mining and Income Taxation | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | YoY Change (%) | |---|---|---|---| Profitability Profit for the period increased by 30% to US$534 million, with net profit attributable to owners rising 32% to US$510 million (US$0.57 per share) and headline earnings increasing 31% Key Profitability Metrics | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | YoY Change (%) | |---|---|---|---| Normalised Profit Reconciliation | US$ million | June 2022 | June 2021 | |---|---|---| Cash Flow Cash inflow from operating activities increased by 26% to US$871 million, and adjusted free cash flow surged 63% to US$293 million, despite higher capital expenditure increasing investing cash outflow by 18% Cash Flow Summary | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | YoY Change (%) | |---|---|---|---| - Capital expenditure increased by 20% to US$545 million, with sustaining capital up 30% and non-sustaining capital up 6%[82][83][85] - Environmental payments increased significantly by 420% to US$26 million[92] Statement of Financial Position The balance sheet improved in H1 2022, with net debt decreasing by 12% to US$851 million and the net debt to EBITDA ratio improving to 0.33x, indicating stronger financial leverage Net Debt and Leverage | Metric | June 2022 (US$ million) | Dec 2021 (US$ million) | Change (US$ million) | |---|---|---|---| Adjusted EBITDA Adjusted EBITDA for the 12 months ended June 30, 2022, was US$2,590 million, an increase from US$2,225 million, used to evaluate compliance with debt covenants Adjusted EBITDA Calculation | US$ million | June 2022 | June 2021 | |---|---|---| - Adjusted EBITDA is defined as profit or loss for the year adjusted for interest, taxation, amortisation and depreciation, and certain other non-operating costs[102] All-in Sustaining and Total All-in Cost Group all-in sustaining costs (AISC) increased by 5% to US$1,148/oz in H1 2022, while total all-in cost (AIC) rose 6% to US$1,352/oz, driven by higher capital expenditure All-in Sustaining Costs (AISC) and Total All-in Cost (AIC) | Metric | H1 2022 (US$ per ounce) | H1 2021 (US$ per ounce) | YoY Change (%) | |---|---|---|---| - Normalizing for exchange rate differences, AISC would have increased by 9% and AIC by 10%[104][106] Review of Operations South Africa Region South Deep continued strong H1 2022 performance, with gold production increasing by 28% to 163,900 ounces, all-in cost rising 5%, and capital expenditure surging 128% to R978 million (US$64 million) South Deep H1 2022 Performance | Metric | H1 2022 | H1 2021 | Variance (%) | |---|---|---|---| - Gold production increased by 28% to 163,900 ounces, in line with the production ramp-up to 12 tonnes gold output annually by 2025[109] - Capital expenditure increased by 128% to R978 million (US$64 million), driven by the solar plant, mining fleet, and Doornpoort phase 2 construction[114][115] - Adjusted free cash flow increased by 178% to R1,131 million (US$74 million)[115] - FY 2022 guidance for South Deep remains unchanged[116] West Africa Region Total gold production in the West Africa region decreased by 4% to 424 thousand ounces in H1 2022, with all-in cost increasing by 10% to US$1,230/oz and adjusted free cash flow decreasing by 15% to US$154 million West Africa Region H1 2022 Performance | Metric | H1 2022 | H1 2021 | Variance (%) | |---|---|---|---| - Total production decreased by 4% to 424 thousand ounces due to planned decreases at Damang and Asanko[118] - Adjusted free cash flow (excluding Asanko) decreased by 15% to US$154 million[118] Tarkwa Tarkwa's gold production remained stable at 257,300 ounces in H1 2022, but all-in cost increased by 9% to US$1,306/oz due to higher costs and capital expenditure, which rose 12% to US$120 million Tarkwa H1 2022 Performance | Metric | H1 2022 | H1 2021 | Variance (%) | |---|---|---|---| - Gold production marginally increased to 257,300 ounces[119] - All-in cost increased by 9% to US$1,306/oz due to higher royalty tax, mining costs, and capital expenditure[121] - FY 2022 guidance for Tarkwa revised due to inflationary pressures[123] Damang Damang's gold production decreased by 6% to 125,200 ounces in H1 2022 due to lower yield, with all-in cost increasing by 19% to US$964/oz and capital expenditure surging 225% to US$33 million Damang H1 2022 Performance | Metric | H1 2022 | H1 2021 | Variance (%) | |---|---|---|---| - Gold production decreased by 6% to 125,200 ounces due to lower yield from low-grade material[123][125] - Capital expenditure increased by 225% to US$33 million, mainly for Huni waste stripping[128] - FY 2022 guidance for Damang revised due to inflationary pressures and increased royalty[129] Asanko (Equity-accounted Joint Venture) Asanko's gold production decreased by 16% to 92,400 ounces (100% basis) in H1 2022, with all-in cost increasing by 9% to US$1,576/oz despite a 71% reduction in capital expenditure to US$6 million Asanko H1 2022 Performance (100% basis) | Metric | H1 2022 | H1 2021 | Variance (%) | |---|---|---|---| - Gold production decreased by 16% to 92,400 ounces due to lower tonnes milled and yield, in line with planned ramp-down[129] - Total capital expenditure decreased by 71% to US$6 million[131] - Full year gold production guidance revised upwards to 135 thousand ounces-145 thousand ounces[132] South America Region The South America region saw mixed results, with Cerro Corona significantly increasing gold and copper production, while Salares Norte experienced project delays due to weather and COVID-19 Cerro Corona (Peru) Cerro Corona's gold production increased by 43% to 60,900 ounces and copper production by 18% to 13,310 tonnes in H1 2022, with all-in cost decreasing by 16% and adjusted free cash flow doubling to US$56 million Cerro Corona H1 2022 Performance | Metric | H1 2022 | H1 2021 | Variance (%) | |---|---|---|---| - Gold production increased by 43% and copper production by 18%, leading to a 31% increase in equivalent gold production[135] - Adjusted free cash flow doubled to US$56 million[137] - FY 2022 guidance for Cerro Corona revised due to inflationary increases[138][141] Salares Norte (Chile) The Salares Norte project reached 77% total progress by H1 2022, but Covid-19 and severe weather caused 1-3 month delays, with H1 2022 expenditure at US$172 million and projected capex of US$920 million-US$940 million - Total project progress at 77%, construction progress at 73.1% by H1 2022[139] - Project timeline delayed by 1-3 months due to Covid-19 and severe weather conditions[140] Salares Norte Project Expenditure | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| - Project capex could be in the range of US$920 million-US$940 million, higher than original guidance[145] Australia Region The Australian region delivered strong H1 2022 performance, with gold production increasing by 10% to 527 thousand ounces, all-in cost rising 9% (A$) / 2% (US$), and adjusted free cash flow increasing 57% (A$) / 47% (US$) to US$235 million Australia Region H1 2022 Performance | Metric | H1 2022 | H1 2021 | Variance (%) | |---|---|---|---| - Gold production increased by 10% to 527 thousand ounces, with all Australian operations showing positive production variances[147] - Adjusted free cash flow increased by 57% (Australian Dollar) / 47% (US Dollar) to A$327 million (US$235 million)[148] St Ives St Ives' gold production marginally increased by 1% to 190,300 ounces in H1 2022, with all-in cost increasing by 23% (A$) due to pre-strip activities and inflation, and capital expenditure rising 24% to A$83 million (US$59 million) St Ives H1 2022 Performance | Metric | H1 2022 | H1 2021 | Variance (%) | |---|---|---|---| - Gold production increased by 1% to 190,300 ounces[149] - All-in cost increased by 23% (Australian Dollar) due to high pre-strip activities and inflationary pressures[154] - FY 2022 guidance for St Ives updated due to higher production costs[157] Agnew Agnew's gold production increased by 8% to 120,500 ounces in H1 2022 due to higher grades, with all-in cost increasing by 11% (A$) due to increased capital expenditure and inflationary pressures Agnew H1 2022 Performance | Metric | H1 2022 | H1 2021 | Variance (%) | |---|---|---|---| - Gold production increased by 8% to 120,500 ounces due to increased grade of ore mined and processed[157] - All-in cost increased by 11% (Australian Dollar) due to increased capital expenditure and inflationary pressures[157] - FY 2022 guidance for Agnew updated due to higher production costs and mining schedule delays[160] Granny Smith Granny Smith's gold production increased by 14% to 138,300 ounces in H1 2022 due to increased grades, with all-in cost marginally increasing by 1% (A$) and adjusted pre-tax free cash flow more than doubling to A$142 million (US$102 million) Granny Smith H1 2022 Performance | Metric | H1 2022 | H1 2021 | Variance (%) | |---|---|---|---| - Gold production increased by 14% to 138,300 ounces due to increased grades of ore mined and processed[161] - Adjusted pre-tax free cash flow increased by 117% (Australian Dollar) / 102% (US Dollar) to A$142 million (US$102 million)[166] - FY 2022 guidance for Granny Smith remains unchanged[167] Gruyere Gruyere's gold production increased by 31% to 156,800 ounces (100% basis) in H1 2022 due to higher grades, with all-in cost decreasing by 18% (A$) due to increased gold sold and lower capital expenditure Gruyere H1 2022 Performance (100% basis) | Metric | H1 2022 | H1 2021 | Variance (%) | |---|---|---|---| - Gold production increased by 31% to 156,800 ounces due to increased grades and ore milled[167] - All-in cost decreased by 9% (Australian Dollar) due to higher gold sold and decreased capital expenditure[173] - FY 2022 guidance for Gruyere updated due to higher production costs[175][183] Corporate Gold Fields published its 2021 Climate Change Report, detailing decarbonization targets, had its credit rating upgraded to 'BBB-' by S&P, and declared an interim dividend of 300 South African cents per share - Published 2021 Climate Change Report, outlining decarbonization targets: 30% reduction in Scope 1 and 2 emissions by 2030, net-zero by 2050[175][177] - S&P Global Ratings upgraded Gold Fields' credit rating to 'BBB-' from 'BB+'[181] - Proposed acquisition of Yamana Gold aims to create a top-4 global gold major, strengthening portfolio, financial capacity, and ESG commitment[185][187][192] Interim Dividend Declared | Metric | Value | |---|---| Outlook for 2022 Gold Fields remains on track to achieve its FY 2022 production and cost guidance, projecting attributable gold equivalent production between 2.25Moz and 2.29Moz and AISC between US$1,140/oz and US$1,180/oz, with total capital expenditure between US$1.050 billion and US$1.150 billion - On track to achieve Group production guidance for 2022, with cost guidance unchanged despite higher mining inflation[194] FY 2022 Production and Cost Guidance | Metric | 2022 Guidance (excluding Asanko) | |---|---| FY 2022 Capital Expenditure Guidance | Capital Expenditure Type | 2022 Guidance (US$ billion) | |---|---| Financial Statements Basis of Preparation and Auditor's Review The condensed consolidated interim financial statements for H1 2022 were prepared in accordance with IFRS (IAS 34) and South African regulations, and reviewed by PricewaterhouseCoopers Inc. who concluded they are materially prepared according to the framework - Financial statements prepared in accordance with IFRS (IAS 34) and South African regulations, presented in US Dollars on a going concern basis[199][200] - PricewaterhouseCoopers Inc. reviewed the statements and concluded they are prepared in all material respects in accordance with the applicable financial reporting framework[202][203] Class Action Settlement Gold Fields has provided US$13.0 million for its share of the silicosis and TB class action settlement, though the ultimate outcome remains uncertain and the provision is subject to adjustment - Gold Fields has provided US$13.0 million for its share of the silicosis and TB class action settlement[204] - The ultimate outcome remains uncertain, and the provision is subject to adjustment[204] Segment Reporting The net profit for H1 2022, excluding Asanko, reconciles to operating segments and corporate/projects, with operating segments contributing US$583.3 million and corporate/projects having a US$49.7 million loss Net Profit by Segment (excluding Asanko) | Segment | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| Income Statement The consolidated income statement shows a 13% increase in revenue to US$2,235.3 million and a 30% increase in profit for the period to US$533.6 million in H1 2022, driven by higher gold sales and prices Condensed Consolidated Income Statement Highlights | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| Statement of Comprehensive Income Total comprehensive income for H1 2022 was US$440.2 million, a slight decrease from US$446.8 million in H1 2021, influenced by a negative foreign currency translation adjustment of US$78.7 million Condensed Consolidated Statement of Comprehensive Income Highlights | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| Statement of Financial Position As of June 30, 2022, total assets increased to US$7,547.9 million, total equity increased to US$4,406.6 million, and net debt decreased to US$851.3 million, reflecting an improved financial position Condensed Consolidated Statement of Financial Position Highlights | Metric | June 2022 (US$ million) | June 2021 (US$ million) | |---|---|---| Statement of Changes in Equity Total equity increased to US$4,406.6 million at June 30, 2022, from US$4,130.1 million at December 31, 2021, primarily driven by profit for the period, partially offset by dividends Condensed Consolidated Statement of Changes in Equity (H1 2022) | US$ million | Balance at 31 December 2021 | Total comprehensive income | Dividends declared | Share-based payments | Balance at 30 June 2022 | |---|---|---|---|---|---| Statement of Cash Flows Cash flows from operating activities increased by 26% to US$871.0 million in H1 2022, while cash outflow from investing activities increased by 18% to US$551.6 million, resulting in US$220.2 million net cash generated Condensed Consolidated Statement of Cash Flows Highlights | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| Notes to the Condensed Consolidated Financial Statements Revenue and Cost of Sales Revenue from contracts with customers, primarily gold and copper sales, increased to US$2,235.3 million in H1 2022, while cost of sales before amortisation and depreciation increased to US$922.6 million Revenue Breakdown | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| Cost of Sales Breakdown | Cost Component | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| Investment Income and Finance Expense Investment income remained stable at US$3.5 million in H1 2022, while finance expense increased to US$38.2 million, primarily due to lease and rehabilitation interest Investment Income | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| Finance Expense Breakdown | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| Equity-Accounted Investees and Financial Instruments Share of results from equity-accounted investees shifted from a US$16.5 million income to a US$5.1 million loss in H1 2022, while the Group recorded a significant US$23.4 million gain on financial instruments, reversing a US$53.1 million loss Share of Results of Equity-Accounted Investees | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| Gain/(Loss) on Financial Instruments | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| - The Group's policy is to remain unhedged to the gold price, but hedges are undertaken for specific purposes like protecting cash flows or debt servicing[228][234] - Outstanding hedges at June 30, 2022, include Australia oil, Ghana oil, and Salares Norte currency hedges[235] Share-Based Payments and Long-Term Incentive Plan Share-based payment expense decreased by 33% to US$4.1 million in H1 2022 due to lower forecast vesting percentages, with long-term incentive plan expense stable at US$11.4 million Share-Based Payments and Long-Term Incentive Plan | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| Exploration Expenses and Royalties Total exploration expense remained flat at US$32.8 million in H1 2022, with US$15.2 million spent at Salares Norte, and government royalties increased by 9% to US$58.6 million Exploration Expenses | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| Royalties | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| - Royalty rates vary by region: South Africa (0.5%), Australia (2.5%), Ghana (sliding scale 3.0%-5.0%), Peru (sliding scale 1%-12%)[237] Mining and Income Taxation (Detailed) The total mining and income taxation charge increased to US$273.5 million in H1 2022, including US$224.2 million in normal taxation and US$49.3 million in deferred taxation Mining and Income Tax Components | Component | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| - South African mining tax is determined by a formula based on profit and revenue, with a maximum royalty of 5% on refined minerals[239] - International operations have varying current tax rates: Australia (30.0%), Ghana (32.5%), Peru (29.5%)[239] Earnings Per Share Basic earnings per share increased to 57 cents (H1 2022) from 44 cents (H1 2021), diluted EPS rose to 56 cents, and headline earnings per share increased to 58 cents, reflecting improved profitability Earnings Per Share Summary | Metric | H1 2022 (cents) | H1 2021 (cents) | |---|---|---| - Basic EPS is calculated by dividing profit attributable to owners of the parent (US$509.7 million) by the weighted average number of ordinary shares (890,640,752)[243] - Headline earnings reconciliation adjusts profit for non-recurring items like profit on disposal of assets and impairment of investments[243] Impairment of Investments and Assets Impairment of investments and assets totaled US$9.3 million in H1 2022, primarily due to a US$5.7 million impairment of Far Southeast Gold Resources Incorporated (FSE) and US$3.6 million for property, plant, and equipment Impairment of Investments and Assets | Metric | H1 2022 (US$ million) | H1 2021 (US$ million) | |---|---|---| - FSE impairment was based on fair value less cost of disposal, indirectly derived from the market value of Lepanto Consolidated Mining Company[243] Debt Maturity Ladder Gold Fields' total uncommitted and committed loan facilities amount to US$2,977.3 million, with significant maturities in 2023 and 2024, and US$1,175.3 million utilized as of June 30, 2022 Debt Maturity Ladder (US$m) | Year | Uncommitted Loan Facilities (US$ million) | Committed Loan Facilities (US$ million) | Total Facilities (US$ million) | Utilisation (US$ million) | |---|---|---|---|---| Fair Value Hierarchy The Group classifies its financial assets and liabilities into a fair value hierarchy (Level 1, 2, or 3), with environmental trust funds and derivative contracts primarily Level 2, and listed investments Level 1 - The Group uses a three-level fair value hierarchy for financial assets and liabilities[248] Fair Value Hierarchy at 30 June 2022 | Asset/Liability | Total (US$ million) | Level 1 (US$ million) | Level 2 (US$ million) | Level 3 (US$ million) | |---|---|---|---|---| - Valuation methods include quoted market prices (Level 1), forward LME prices (Level 2), and discounted cash flow methods (Level 3)[250][251][252][253][254](index=254&type=chunk] Capital Commitments Contracted capital expenditure commitments totaled US$183.3 million as of June 30, 2022, with US$114.0 million allocated to the Salares Norte project Capital Commitments | Metric | June 2022 (US$ million) | June 2021 (US$ million) | |---|---|---| - Contracted capital expenditure includes US$114.0 million for Salares Norte[257] Segmental Operating and Financial Results This section provides detailed operating and financial results by region and mine for H1 2022, covering metrics like gold production, cost of sales, and capital expenditure, highlighting regional contributions and performance variances - Detailed operating results are provided for each region and mine, including ore milled/treated, yield, and gold production[260][262][263][264][266][268][269] - Financial results are presented for each segment, covering revenue, cost of sales, royalties, taxation, net profit, and capital expenditure[260][262][263][264][266][268][269] - Comparative figures for June 2021 and December 2021 are included, with H1 2022 figures being reviewed and prior periods unreviewed[263][268] All-in Cost Benchmarks This section presents detailed all-in cost (AIC) and all-in sustaining cost (AISC) benchmarks, both net and gross of by-product credits, across all operations and regions, providing a comprehensive breakdown of cost components - Detailed breakdown of All-in Sustaining Costs (AISC) and Total All-in Cost (AIC) components for each region and mine[271][273][274][277][279][280][282][283][285][286] - Includes reconciliation of costs before gold inventory change, royalties, realised gains/losses on commodity hedges, and various operational and capital expenditures[271][273][274][277][279][280][282][283][285][286] - AISC and AIC are also presented gross of by-product credits per equivalent ounce of gold sold, providing a different perspective on cost efficiency[282][285] Underground and Surface Operations Data This section provides detailed operational data for underground and surface mining activities across all regions, including tonnes mined, grade mined, gold mined, and tonnes milled, for H1 2022, H2 2021, and H1 2021 - Detailed breakdown of tonnes mined, grade mined, and gold mined for underground and surface operations by region[288][291][292] - Includes data on ore milled/treated and yield for both underground and surface operations[288][291][292] - Data is provided for H1 2022, H2 2021, and H1 2021 for comparative analysis[288][291][292] Review of Operations - Quarter ended 30 June 2022 compared with quarter ended 31 March 2022 South Africa Region South Deep's gold production increased by 10% to 85,900 ounces in Q2 2022, with all-in cost stable, and total capital expenditure increasing by 23% to R540 million (US$35 million), including significant solar plant spending South Deep Q2 2022 Performance | Metric | June 2022 Quarter | March 2022 Quarter | Variance (%) | |---|---|---|---| - Gold production increased by 10% to 85,900 ounces due to higher underground ore mined[294] - Total capital expenditure increased by 23% to R540 million (US$35 million), including significant spend on the solar plant[297] - Solar project capacity increased to 60MW, with 50MW planned for Q3 2022 commissioning, despite construction delays[298] West Africa Region The West Africa region showed mixed quarterly performance, with Tarkwa's gold production stable but costs increasing, Damang seeing slight production increase with lower costs, and Asanko's production increasing with decreased all-in costs Tarkwa Tarkwa's gold production remained stable at 128,800 ounces in Q2 2022, with all-in cost increasing by 6% to US$1,342/oz due to higher mining costs and capital expenditure, which rose 10% to US$63 million Tarkwa Q2 2022 Performance | Metric | June 2022 Quarter | March 2022 Quarter | Variance (%) | |---|---|---|---| - Gold production marginally increased to 128,800 ounces[302] - All-in cost increased by 6% to US$1,342/oz due to higher mining costs and capital expenditure[302] Damang Damang's gold production increased by 2% to 63,200 ounces in Q2 2022 due to higher yield, with all-in cost decreasing by 1% to US$961/oz and total capital expenditure increasing by 44% to US$20 million Damang Q2 2022 Performance | Metric | June 2022 Quarter | March 2022 Quarter | Variance (%) | |---|---|---|---| - Gold production increased by 2% to 63,200 ounces due to higher yield and throughput[303] - Total capital expenditure increased by 44% to US$20 million, mainly for Huni waste stripping[306] Asanko (Equity-accounted Joint Venture) Asanko's gold production increased by 18% to 50,000 ounces (100% basis) in Q2 2022 due to higher yield, with all-in cost decreasing by 7% to US$1,519/oz and total capital expenditure increasing by 40% to US$4 million Asanko Q2 2022 Performance (100% basis) | Metric | June 2022 Quarter | March 2022 Quarter | Variance (%) | |---|---|---|---| - Gold production increased by 18% to 50,000 ounces due to higher yield from Akwasiso[307] - All-in cost decreased by 7% to US$1,519/oz[308] South America Region Cerro Corona's gold equivalent production increased by 32% in Q2 2022 due to higher grades, while Salares Norte project progressed to 77% total completion, but construction productivity was impacted by severe weather Cerro Corona Cerro Corona's gold equivalent production increased by 32% to 73,900 ounces in Q2 2022 due to higher grades, with all-in cost decreasing by 5% and total capital expenditure increasing by 122% to US$11 million Cerro Corona Q2 2022 Performance | Metric | June 2022 Quarter | March 2022 Quarter | Variance (%) | |---|---|---|---| - Gold equivalent production increased by 32% to 73,900 ounces due to higher gold and copper grades[311] - Total capital expenditure increased by 122% to US$11 million, mainly for tailings dam construction[314] Salares Norte The Salares Norte project reached 77% total progress by Q2 2022, with US$94.2 million spent, though construction productivity was impacted by difficult weather conditions - Total project progress at 77% by end of Q2 2022[315] - US$94.2 million was spent on the project during Q2 2022[316] - Construction productivity in Q2 was impacted by difficult weather conditions[315] Australia Region The Australian region showed varied quarterly performance, with St Ives and Granny Smith seeing increased gold production, Agnew's production decreasing, and all mines experiencing inflationary pressures St Ives St Ives' gold production increased by 3% to 96,400 ounces in Q2 2022 due to higher average grade, with all-in cost similar at A$1,712/oz (US$1,222/oz), and total capital expenditure increasing by 12% St Ives Q2 2022 Performance | Metric | June 2022 Quarter | March 2022 Quarter | Variance (%) | |---|---|---|---| - Gold production increased by 3% to 96,400 ounces due to higher average grade of ore milled[319] - Total capital expenditure increased by 12% to A$44 million (US$31 million)[322] Agnew Agnew's gold production decreased by 9% to 57,400 ounces in Q2 2022 due to lower grade, with all-in cost increasing by 13% (A$) due to increased capital expenditure and decreased gold sold Agnew Q2 2022 Performance | Metric | June 2022 Quarter | March 2022 Quarter | Variance (%) | |---|---|---|---| - Gold production decreased by 9% to 57,400 ounces due to lower grade of ore mined and processed[322] - All-in cost increased by 13% (Australian Dollar) due to increased capital expenditure and decreased gold sold[323] Granny Smith Granny Smith's gold production increased by 10% to 72,400 ounces in Q2 2022 due to increased grade, with all-in cost decreasing by 10% (A$) due to increased gold sold, and total capital expenditure increasing by 3% Granny Smith Q2 2022 Performance | Metric | June 2022 Quarter | March 2022 Quarter | Variance (%) | |---|---|---|---| - Gold production increased by 10% to 72,400 ounces due to increased grade of ore mined and processed[326] - All-in cost decreased by 10% (Australian Dollar) due to increased gold sold[326] Gruyere Gruyere's gold production increased by 21% to 85,700 ounces (100% basis) in Q2 2022 due to higher grades, with all-in cost decreasing by 18% (A$) due to increased gold sold and lower capital expenditure Gruyere Q2 2022 Performance (100% basis) | Metric | June 2022 Quarter | March 2022 Quarter | Variance (%) | |---|---|---|---| - Gold production increased by 21% to 85,700 ounces due to higher grades and increased tonnes milled[328] - All-in cost decreased by 18% (Australian Dollar) due to increased gold sold and lower capital expenditure[329] Salient Features and Cost Benchmarks This section provides a quarterly comparison of key operational metrics and cost benchmarks across all regions, detailing ore milled, gold produced, gold sold, cost of sales, and capital expenditures - Quarterly comparison of ore milled/treated, yield, gold produced, and gold sold across all regions[333][336] - Detailed quarterly breakdown of cost of sales, sustaining and non-sustaining capital, and all-in sustaining costs (AISC) and total all-in costs (AIC)[333][336] - Includes average exchange rates for the respective quarters for currency conversion context[333][336] Independent Auditor's Review Report PricewaterhouseCoopers Inc. reviewed Gold Fields Limited's condensed consolidated interim financial statements for H1 2022, concluding they were prepared in all material respects according to IFRS (IAS 34) and the Companies Act - PricewaterhouseCoopers Inc. reviewed the condensed consolidated interim financial statements for H1 2022[344] - The review concluded that the statements are prepared in all material respects in accordance with IFRS (IAS 34) and the Companies Act of South Africa[347] - The auditor's report does not cover future financial performance, non-IFRS measures, or other non-financial information[348] Administration and Corporate Information This section provides essential administrative and corporate contact details for Gold Fields Limited, including registered office, UK secretaries, ADR transfer agent, investor/media enquiries, and stock exchange listings - Provides contact information for corporate secretary, registered office, UK secretaries, and American depository receipts transfer agent[352][353] - Includes contact details for investor and media enquiries, and transfer secretaries in South Africa and the UK[354][355] - Lists company website (www.goldfields.com) and stock exchange listings (JSE / NYSE / GFI)[355][356](index=356&type=chunk] Certain Forward-Looking Statements This section reiterates the forward-looking statements disclaimer, emphasizing that the report contains estimates subject to various risks and uncertainties, including changes in market prices, currency fluctuations, and regulatory impacts - The report contains forward-looking statements that are estimates reflecting management's best judgment[359] - These statements involve risks and uncertainties that could cause actual results to differ materially, including changes in commodity prices, currency values, and regulatory environments[359][361] - Gold Fields undertakes no obligation to update or revise these forward-looking statements[360]