Gold Fields Limited Q4 FY2023 earnings call

Management Statement and Operational Highlights

• Safety and Sustainability: Tragic fatalities in 2023 led to commissioning of independent safety review. ESG focus includes targets for women representation (25% achieved vs 30% target by 2030), decarbonization (17% renewable electricity mix in 2023), and water stewardship (on track to recycle 80% of water use by 2030).
• Financials: 2023 adjusted free cash flow $367 million, operating cash flow over $1 billion. South Deep contributed $204 million. Strong balance sheet with net debt to EBITDA below 0.5x.
• Projects: Salares Norte construction progress, Tarkwa-Iduapriem JV in Ghana, Windfall project in Canada. Capital allocation focuses on safe production, strong balance sheet, dividends, and opportunities with positive returns.

Segment Performance

• Australia: Accounts for ~45% of production ounces. 2023 production ~1 million ounces. Costs higher in Australian dollars due to mining inflation; 2024 production guided above 1 million ounces.
• South Africa (South Deep): Produced 322,000 ounces in 2023. Extended wage agreement until 2026. 2024 focus on ramping up to 380,000 ounces by end of 2026.
• Ghana: Attributable production 8% lower in 2023 (633,000 ounces). Tarkwa remains key asset; Damang's costs expected to increase as it processes stockpiles.
• Peru (Cerro Corona): Gold equivalent production 8% lower in 2023 (239,000 ounces) due to heavy rain and mine nearing end of life.
• Salares Norte: Construction 99.4% complete. Stockpiles have 520,000 ounces of contained gold. First gold expected by April 2024. 2024 production guidance 250,000 ounces, with higher production in 2025-2026 then decline as higher-grade areas are processed first.

Guidance

• Production: Group attributable gold equivalent production expected 2.3-2.43 million ounces in 2024, 4% higher than 2023.
• Costs: All-in sustaining cost guided 1,400-1,440 per ounce; all-in costs 1,590-1,630 per ounce. Excluding St. Ives micro-grid, costs more normalized.
• CapEx: Total CapEx 1.13-1.19 billion in 2024, including sustaining capital 860-890 million.

Risks

• Safety: 2 fatalities in 2023 and 1 in 2024; need for improvement in safety system.
• Salares Norte Delays: Production delays and additional capital spend impacted financials.
• Cost Pressures: Rising costs, particularly in Australia and Ghana, due to mining inflation and other factors.

Question and Answer

Q: Yaameen Gosain from Laurium Capital asks about Salares Norte production decline.

A: Mike Fraser explains optimized mining of higher-grade areas first, with exploration to extend life.

Q: Andrea Phillis from Risk Insight comments on ESG ratings.

A: Positive feedback on consistent positive ESG ratings.

Q: Emmanuel Mungari from Bloomberg Intelligence asks about cost pressures and debt.

A: Paul Schmidt says comfortable with debt below 1x net debt to EBITDA, and focuses on capital deployment to manage costs.

Q: Sandile from Umthombo Wealth asks about post-Salares and Yamana.

A: Mike Fraser talks about potential consolidation and focus on quality asset growth.

Q: Chantelle Baptiste from Fairtree asks about Windfall CapEx.

A: Paul Schmidt says $45 million in 2024, waiting on EIA for future spend.

Q: Cameron Needham from Bank of America Securities asks about South Deep ramp-up and St. Ives energy cost.

A: Mike Fraser says South Deep ramp-up is value-accretive, and St. Ives energy costs to be reduced by over 50%.

Q: Adrian Hammond from SBG asks about investment case and cost curve.

A: Mike Fraser discusses impact of Salares delays and need for better capital deployment communication.

Q: Leroy Mnguni from HSBC asks about reserves, SRB CapEx, and Salares milestones.

A: Mike Fraser talks about reserve addition through exploration and partnerships, Paul Schmidt on SRB CapEx range, and Salares milestones monitored weekly.