Gold Fields West Africa
17 May 2015
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
17 May 2015
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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
Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015
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Alfred Baku – EVP & Head of West Africa
Lindley Witbooi - VP & Head of Finance
Mubashir T Dari - VP & Head of HR
Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015
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Michiel van der Merwe - General Manager, Tarkwa Gold Mine
Marcus Brewster – General Manager, Damang Gold Mine
Management, Safety and Environmental systems delivery & project management
David Johnson - VP & Head of Stakeholder Relations
Michael Akafia – VP & Head of Legal, Company Secretary
Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015
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Serge Nitiema - VP Exploration & Business development
Hans de Beer – VP & Head of Engineering
Balaji Subrahmanyan - Head of Mining
establishing a modern approach to planning and scheduling system
Kevin Butler – VP & Head of Supply Chain
Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015
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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:
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
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Source: Minerals Commission, Ghana
Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015
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(e.g. on fuel)
John Dramani Mahama
Sitting President seeking 2nd term in 2016
Nana Akuffo Addo
Contested results of last election in Supreme Court
(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
Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015
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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 - Introduction | Alfred Baku | 17 May 2015
* IMF World Economic Outlook (WEO) Update (April 2015) ** 2014 Actual
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177 243 442 472 261 558 178 287 1 020 1 530 849 423 1 252 1 068 1 175
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
Wassa Gold Fields - Tarkwa Gold Fields - Damang Chirano Gold Produced All In Costs
Source: Financial statements/quarterly reports: various companies
Gold Produced Oz ‘000 All in Cost/Oz
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̵ Tarkwa & Damang
destination.
Tarkwa and Damang mines being configured to deliver value and provide or deliver growth opportunities to support the Gold Fields vision
“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
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to 2014
2014
Ghana, employing approximately. 6,100 people
(including contractors).
Damang Mines are from the surrounding communities.
mines is also from the surrounding communities.
6% ratio of expatriate officials to (local) senior
Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015
Overview Damang Tarkwa
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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
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Why the need for change?
Cash Strategy - Building a Sustainable Business in line with our Strategic Vision
Focus on Total Shareholder Returns……Growing the Margin, Not Ounces
Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015
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Commissioning of Genser Plant, Tarkwa Negotiated Price: 10US¢ / kWh
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:
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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
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
Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015
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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
Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015
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Underpinned by these 4 key Pillars
Gold Fields West Africa - Introduction | Alfred Baku | 17 May 2015
Supported by an approved Investment Agreement with Government Business Optimisation People Social Licence to Operate
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
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communities directly from the Mines
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%
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̵ Corporate income tax: USD384Million; ̵ Royalties: USD248Million; ̵ Capital expenditure: over USD1Billion
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
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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 - Introduction | Alfred Baku | 17 May 2015