Akwaaba - Welcome Gold Fields West Africa Alfred Baku Executive - - PowerPoint PPT Presentation

akwaaba welcome gold fields west africa
SMART_READER_LITE
LIVE PREVIEW

Akwaaba - Welcome Gold Fields West Africa Alfred Baku Executive - - PowerPoint PPT Presentation

Akwaaba - Welcome Gold Fields West Africa Alfred Baku Executive Vice President and Head of Region 17 May 2015 Forward looking statements Certain statements in this document constitute forward looking statements within the


slide-1
SLIDE 1

Gold Fields West Africa

17 May 2015

Alfred Baku Executive Vice President and Head of Region

‘Akwaaba’ - Welcome

slide-2
SLIDE 2

2

Forward looking statements

Certain statements in this document constitute “forward looking statements” within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934. In particular, the forward looking statements in this document include among others those relating to the Damang Exploration Target Statement; the Far Southeast Exploration Target Statement; commodity prices; demand for gold and other metals and minerals; interest rate expectations; exploration and production costs; levels of expected production; Gold Fields’ growth pipeline; levels and expected benefits of current and planned capital expenditures; future reserve, resource and other mineralisation levels; and the extent of cost efficiencies and savings to be achieved. Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements. Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa, Ghana, Australia, Peru and elsewhere; the ability to achieve anticipated efficiencies and other cost savings in connection with past and future acquisitions, exploration and development activities; decreases in the market price of gold and/or copper; hazards associated with underground and surface gold mining; labour disruptions; availability terms and deployment of capital or credit; changes in government regulations, particularly taxation and environmental regulations; and new legislation affecting mining and mineral rights; changes in exchange rates; currency devaluations; the availability and cost of raw and finished materials; the cost of energy and water; inflation and other macro-economic factors, industrial action, temporary stoppages of mines for safety and unplanned maintenance reasons; and the impact of the AIDS and other occupational health risks experienced by Gold Fields’ employees. These forward looking statements speak only as of the date of this document. Gold Fields undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of this document or to reflect the

  • ccurrence of unanticipated events.

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-3
SLIDE 3

3

Gold Fields West Africa

Alfred Baku – EVP & Head of West Africa

  • Over 20 years of international mining experience in Ghana and Australia
  • Worked as General Manager of both the Tarkwa & Damang mines
  • Holds an MSc in Mining Engineering and a Statutory Mine Manager’s certificate
  • Member of the Australian Institute of Mining Metallurgy (AusIMM)

Lindley Witbooi - VP & Head of Finance

  • Over 15 years Finance experience in the mining industry
  • Holds an MBA and B.Comm (Accounting)
  • Member of various accounting bodies in both South Africa & Australia

Mubashir T Dari - VP & Head of HR

  • Joined Gold Fields HR in 2002 and has undertaken various senior roles
  • Previously worked as a private legal practitioner
  • Chaired the HR Committee of the Ghana Chamber of Mines from 2006 - 2008

Regional Leadership Team

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-4
SLIDE 4

4

Gold Fields West Africa

Michiel van der Merwe - General Manager, Tarkwa Gold Mine

  • Responsible for Tarkwa Mine’s overall strategic direction, leadership and management
  • Over 19 years experience in mining and metallurgy
  • Holds a B.Eng Metallurgy (Extractive)

Marcus Brewster – General Manager, Damang Gold Mine

  • Responsible for Damang Mine’s overall strategic direction, leadership and management
  • Over 10 years expertise in development and implementation of best practice Mineral Resource

Management, Safety and Environmental systems delivery & project management

  • Holds Masters Degrees in both Mining Geology & Mining Engineering

David Johnson - VP & Head of Stakeholder Relations

  • Responsible for Corporate Affairs and Sustainable Development functions
  • Over 10 years corporate communication experience
  • Holds an MSc in Corporate Communications & Public Relations

Michael Akafia – VP & Head of Legal, Company Secretary

  • Responsible for regional compliance
  • Multi-disciplinary background in Law, Economics and Finance
  • Over 15 years legal experience
  • Holds an MBA and is a member of the Ghana Bar Association

Regional Leadership Team

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-5
SLIDE 5

5

Gold Fields West Africa

Serge Nitiema - VP Exploration & Business development

  • Responsible for the Organic Growth & Business Development initiatives within the Region.
  • Over 23 years experience in the mining industry
  • Joined Gold Fields in 2007
  • Holds a PhD in Structural Geology applied to Minerals Exploration

Hans de Beer – VP & Head of Engineering

  • Strategically positioning the Engineering function to achieve world class technical standards
  • Joined Gold Fields Ghana as Chief Engineer in 2006
  • Registered as a Professional Engineer with the Engineering Council of South Africa

Balaji Subrahmanyan - Head of Mining

  • Focus is to set West Africa up as a cost-effective world class mining operation, instrumental in

establishing a modern approach to planning and scheduling system

  • Previously held the position of Group Mining Engineer at Gold Fields Group Technical Services

Kevin Butler – VP & Head of Supply Chain

  • Responsible for procurement & supply chain functions in West Africa
  • Over 20 years experience in Supply Chain Management
  • Joined Gold Fields in 2011 as regional supply chain manager

Regional Leadership Team

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-6
SLIDE 6

6

Ghana Site Visit - Itinerary

DATE ACTIVITY TIME 17 May Group Dinner & Regional Overview Best Western Hotel 19h30 18 May Fly to Takoradi – travel to Tarkwa 06h00 Drive from Takoradi to Tarkwa 08h20 Introduction of team and safety briefing 09h30 Overview of Tarkwa operations 10h00 Finger lunch 11h30 Mine tour:

  • CIL Plant visit
  • HME workshop visit – HME
  • Pit Tour
  • Exploration site

13h00 14h00 15h00 16h30 Wrap–up & change PPE 17h30 Freshen up & allocation of accommodation 18h00 Dinner with HOD Team (Pool Side, Tarkwa Mine) 19h00 DATE ACTIVITY TIME 19 May Depart Tarkwa to Damang 06h30 Breakfast at Damang 07h30 Presentation and Safety Briefing Town Site Club House 08h00 Plant visit 09h30 Visit to Mining Operations – update on Mining &Exploration 10h30 Light lunch – finger food 12h30 Drive to Takoradi 13h30 Fly to Accra 16h55 Freshen up - Best Western Hotel 18h30 Dinner with Board Members (Il Cavaliere Pazzo - Italian Restaurant) Depart to Airport 19h00 20h30

slide-7
SLIDE 7

7

  • Long history of mining, especially for gold
  • Gold from West Africa traded to Europe at least as early as the 10th century
  • Most of this gold came by Sahara caravan, one of the original sources being the Ghana empire
  • Major minerals currently being mined in Ghana are gold, diamonds, bauxite and manganese
  • Ghana’s mining industry accounts for 5% of the country’s GDP
  • Minerals make up 37% of total exports, of which gold contributes 90%

History of mining in Ghana

Source: Minerals Commission, Ghana

Gold Fields West Africa

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-8
SLIDE 8

8

  • IMF bailout
  • Reduce wage bill
  • Remove subsidies

(e.g. on fuel)

  • Infrastructure focus
  • Promise of reforms

John Dramani Mahama

Sitting President seeking 2nd term in 2016

Nana Akuffo Addo

Contested results of last election in Supreme Court

  • Economically savvy
  • Business oriented
  • Social Intervention

(free senior high school policy) Growth in FDI Political stability Power still a major challenge Gold a major foreign exchange earner Next general elections – December 2016

Ghana Gold Fields West Africa

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

Ghana - Political Overview

slide-9
SLIDE 9

9

Performance of the GHS against major currencies

US$/GHS Performance:

After a period of stability, the GHS continues to depreciate against major currencies. Over 12% depreciation against the US$ in Q1 2015

19% 6.90% 9.50% 6.90% 17% 7.10% 8.80% 12.10% 13% 0% 5% 10% 15% 20%

Monetary Policy Rate GDP Growth Including oil Overall Fiscal Budget Deficit (% of GDP) Mining & Quarrying Subsector Growth Rate Inflation Rate (Dec)

Target Actual

Indicator Actual Target

Inflation rate 16.6% (Mar 2015) 13%±2% BoG policy rate 22% (May 2015) n/a Overall GDP Growth (incl. oil) 3.5%* 3.9% Fiscal Budget Deficit 9.5% of GDP** 6.5% of GDP (2015)

2015 Macroeconomic Indicators 2014 Macroeconomic Performance

Gold Fields West Africa

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

* IMF World Economic Outlook (WEO) Update (April 2015) ** 2014 Actual

slide-10
SLIDE 10

10

177 243 442 472 261 558 178 287 1 020 1 530 849 423 1 252 1 068 1 175

  • 200

400 600 800 1 000 1 200 1 400 1 600 1 800 50 100 150 200 250 300 350 400 450 500 550 600 Anglo - Iduapriem Anglo - Obuasi Newmont - Ahafo Newmont - Akyem Golden Star

  • Bogoso &

Wassa Gold Fields - Tarkwa Gold Fields - Damang Chirano Gold Produced All In Costs

Peer Comparison: 2014 Total Ounces Produced & All in Cost/oz

Source: Financial statements/quarterly reports: various companies

Gold Produced Oz ‘000 All in Cost/Oz

Gold Fields West Africa

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-11
SLIDE 11

11

Gold Fields West Africa

  • Gold Fields operates 2 mines in Ghana:

̵ Tarkwa & Damang

  • Host to world-class gold deposits and a premier mining

destination.

  • Gold Fields has a strong presence in the region, with the

Tarkwa and Damang mines being configured to deliver value and provide or deliver growth opportunities to support the Gold Fields vision

  • Total Mineral Resources > 14.8 Moz
  • Total Mineral Reserves > 8.7 Moz

“The West Africa Region currently accounts for 14% of Gold Fields Group’s Mineral Resource and 17% of the Mineral Reserve base, excluding growth projects”

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

Overview

Tarkwa Mine Damang Mine

90%

Government

10% Abosso Goldfields Limited Gold Fields Ghana Limited

slide-12
SLIDE 12

12

Gold Fields West Africa

  • 4.1Moz Produced at the Damang Mine from 1998

to 2014

  • 9.7Moz Produced at the Tarkwa Mine from 1994 to

2014

  • One of the largest private sector employers in

Ghana, employing approximately. 6,100 people

(including contractors).

  • Over 50% of the employees at the Tarkwa &

Damang Mines are from the surrounding communities.

  • Over 55% of total procurement spend at both

mines is also from the surrounding communities.

  • Our localisation plan over the long term targets a

6% ratio of expatriate officials to (local) senior

  • fficials. Expected to be achieved by end of 2015.

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

Overview Damang Tarkwa

slide-13
SLIDE 13

13

Gold Fields West Africa

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

Our Strategic Journey Focusing On Our Core Competencies

Fastest decline in gold prices in 30 years Fiscal: Capital allowances on a straight line basis over 5 years 5% Investment Allowance abolished Fiscal: Increase in Corporate Income Tax to 35% from 25% Fiscal: Increase in royalty rates to 5% from a 3-6% range

Optimised Operations Continuous Stakeholder engagement Growth through M&A, Exploration New Business Plan & Cash Strategy

Portfolio Review

Catalysts for Change:

  • Reduction in Gold Price
  • Tightened Fiscal Regime (2011/2012)
  • Reduced confidence in the industry

Now

slide-14
SLIDE 14

14

Gold Fields West Africa

  • High AIC
  • Low prevailing gold price
  • Need for a Fit for purpose, low cost operating model

Why the need for change?

  • Free cash flow margin & consistent payment of dividend returns
  • Independent Power Purchase Agreement (PPA) with Genser Energy
  • Dedicated management & project team at the Damang mine, sustaining operations
  • Plant Optimisation : increasing efficiencies and reducing cash burn
  • Constructive and Proactive Engagement with Stakeholders (incl. Unions, Government, Media)
  • Labour rationalisation at Tarkwa & Damang mines
  • Growth in-country and region through exploration & acquisition opportunities

Cash Strategy - Building a Sustainable Business in line with our Strategic Vision

Change Beckons - The transformation of Gold Fields West Africa

Focus on Total Shareholder Returns……Growing the Margin, Not Ounces

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-15
SLIDE 15

15

Commissioning of Genser Plant, Tarkwa Negotiated Price: 10US¢ / kWh

Gold Fields West Africa

Impact of Power Purchase Agreement with Genser Energy A World Class Mine

40MW Plant Genser Generation Process 31 May 2015 - Phase 1 Commissioning of Chirano Plant GFG gets 7MW Power @ 13.5US¢ / kWh 1 Jan 2016 – Phase 2 Commissioning of 40MW Plant, Tarkwa gets 40MW Power @ 13.5US¢ / kWh 1 Jan 2018 – Phase 3

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

►Power to be delivered in phases ►Potential to lower power price by ~30%. ►Reduction of 15% in LOM processing cost ► AIC over LOM:

  • Tarkwa:US$ 988/oz
  • Damang: US$ 987/oz
slide-16
SLIDE 16

16

Gold Fields West Africa

Building a Sustainable Business in line with our Strategic Vision

Tarkwa Mine

Tarkwa Expansion Project 6 (TEP6) project cancelled Transition to CIL only (Heap Leach Closure) Expansion of CIL plant to treat 13.5Mt Business Improvement Initiatives and Drive for operational excellence 2014 production & cost guidance exceeded

Damang Mine

Dedicated project team > increase in reserves & mine life New Management Team & innovation driven philosophy Focused Cost control & reduced cash burn Quality selective mining, grade control and plant optimisation 2014 production & cost guidance exceeded

A Remarkable turnaround A World Class Mine

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-17
SLIDE 17

17

Gold Fields West Africa

The effect of the change in strategy is seen in our results to date…. Maintained Production Overall reduction in AIC Improved stakeholder relations

Tarkwa Damang

2013 2014 2013 2014 Production koz 632 558 153 178 AISC & AIC US$/oz 1,291 1,068 1,558 1,175

Tarkwa Damang

Production 580koz 180koz AISC & AIC ~US$1,040/oz ~US$1,220/oz

2015 Guidance:

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Ounces (000) 213.4 171.0 195.5 205.4 191.9 181.3 182.0 180.9 174.8 Combined AIC/oz 1358 1712 1224 1132 1039 1084 1131 1126 1299 50 100 150 200 250 200 400 600 800 1000 1200 1400 1600 1800

West Africa Region Production & AIC

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-18
SLIDE 18

18

Gold Fields West Africa

Underpinned by these 4 key Pillars

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

Our Strategic Vision: 1 Million Attributable Ounces @ US$1,000/oz in 3 Years with 0 LTI’s

Supported by an approved Investment Agreement with Government Business Optimisation People Social Licence to Operate

Financial

Plant Optimisation (sweating our existing assets) Sustainable assets at/above 15% margin at US$1,300/oz Brownfields/ Near Mine Exploration targeting +1.50g/t discoveries on Mining leases Acquisition of in country & regional assets/projects Power Strategy (Genser Energy IPP) Investor & Stakeholder Confidence Creating & Sustaining Shared Value Staff Training & Development

slide-19
SLIDE 19

19

Gold Fields West Africa

Gold Fields Ghana Foundation

  • Gold Fields Trust Fund set up in 2002, the first in Ghana’s Mining Industry
  • 2004: changed to Gold Fields Ghana Foundation & legally registered as a charitable organization
  • Main objective of the Foundation: generate funding for the development of our primary stakeholder

communities directly from the Mines

The Gold Fields Foundation is funded by US$1 for every ounce of gold sold and 1% of pre-tax profits

Some contractors have also contributed either in cash or kind The Foundation has sponsored Ghana’s Black stars

Education 30% Health 8% Water & Sanitation 15% Agriculture 23% Others 24%

Over US$26m invested since 2002

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-20
SLIDE 20

20

Gold Fields West Africa

Our Contribution & Recognition

  • 2011 to 2014: Financial contribution to Government:

̵ Corporate income tax: USD384Million; ̵ Royalties: USD248Million; ̵ Capital expenditure: over USD1Billion

  • Consistent Recognition for our endeavours:

Year Nature Awarded by

2010  Gold Fields Ghana Limited: Largest taxpayer GIPC 2011  Gold Fields Ghana Limited & Abosso Goldfields Limited: 1st and 2nd largest taxpayers in Ghana  Abosso Goldfields Limited: Top company in the Petroleum & Mining Services Sector  Abosso Goldfields Limited: No 4 Company in GIPCs Club 100  Gold Fields Ghana Limited: No 7 Company in GIPCs Club 100 GIPC 2012  Gold Fields Ghana Limited: Best taxpayer in Ghana GRA 2012  Gold Fields Ghana Limited: Largest taxpayer  Gold Fields Ghana Limited: Top company in the Petroleum & Mining Services Sector  Gold Fields Ghana Limited: No 2 Company in GIPCs Club 100 GIPC

2013 GIPC Awards yet to be announced

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-21
SLIDE 21

21

Power Power rationing and IPP with Genser Energy Fiscal Policy Investment Agreement Negotiations Cash Flow Business Process Reengineering, Cost leadership & Cost containment Social Licence to Operate Stakeholder engagement/ relationships Sharing the benefits Shared Value Initiative Employee motivation & productivity

Gold Fields West Africa - Challenges

Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015

slide-22
SLIDE 22

‘Medaase’ - Thank you