Gold Fields Limited · JSE:GFI
Gold Fields — Investor Day (December 2011)
42 slides from Gold Fields's investor day presentation, Dec 5, 2011
Slide 1: 2011 Investor Day Presentation 1 of 9: Introduction, Macro Overview and Gold Market
Gold Fields Limited Investor Day Presentations 5 December 2011 Gold Fields Limited 2011 Investor Day Presentation 1 of 9 Introduction, macro overview and the gold market, strategic response and Group performance Nick Holland Chief Executive Officer Johannesburg 5 December 2011 1 Introduction, Macro
Slide 2: Gold Fields Investor Day Presentations
Gold Fields Limited Investor Day Presentations 5 December 2011 2 Introduction, Macro Environment, Strategy and Group Performance
Slide 3: Gold Fields Investor Day Presentations
Gold Fields Limited Investor Day Presentations 5 December 2011 3 Introduction, Macro Environment, Strategy and Group Performance
Slide 4: Welcome and broad world issues
Gold Fields Limited Investor Day Presentations 5 December 2011 Thank you very much Zakira, and good morning everyone. Welcome to the analyst day 2011. The last time we had one of these was about two years ago, so obviously a lot has happened over that period. We intend to share with you today our vi
Slide 5: Social norms and technology changes
Gold Fields Limited Investor Day Presentations 5 December 2011 in this particular area. And we think this particular issue is going to increase in magnitude over time. And hence one of the reasons that Gold Fields wants to be the global leader in sustainable gold mining. Social norms. There are chan
Slide 6: Two thirds of the world's economy remains turbulent
Gold Fields Limited Investor Day Presentations 5 December 2011 Two thirds of the world’s economy remains turbulent. If you look at a breakdown of GDP and the bottom one of those those blue blocks that you see there is the USA. What is going to happen in terms of additional monetary and fiscal stimul
Slide 7: Eurozone, China, Japan and UK outlook
Gold Fields Limited Investor Day Presentations 5 December 2011 The Eurozone. What is going to happen to the Euro? What is going to happen to the Eurozone itself? What is going to happen to those countries defaulting? Where is the money going to come from? Is the Eurozone going to end up doing what t
Slide 8: World growth is not doing too much
Gold Fields Limited Investor Day Presentations 5 December 2011 The world’s growth is not really doing too much. If you look at the world itself, the blue line over here, you can see our estimate for this year is pretty mediocre, around about 3%. But if you strip out the BRICS, which are these countr
Slide 9: Emerging markets taking a bigger share of GDP
Gold Fields Limited Investor Day Presentations 5 December 2011 What’s interesting is that the emerging markets are going to have a much bigger slice of the world’s cake going forward. And the stats that we’ve put together indicate that the developed countries will account for more than 50% of GDP in
Slide 10: Increased fiscal demands from governments
Gold Fields Limited Investor Day Presentations 5 December 2011 Increased fiscal demand is a natural consequence we believe of the state of the various nations across the globe and the problems they are facing as they try to balance their own books. We just listed four countries here that we operate
Slide 11: Input cost pressures
Gold Fields Limited Investor Day Presentations 5 December 2011 Input cost pressures. The one thing that people have started to realise more and more now is that the gold price doesn’t move up by itself. And if we see gold moving up it is usually accompanied by oil. And you can see over here oil has
Slide 12: Changing social attitudes and community activism
Gold Fields Limited Investor Day Presentations 5 December 2011 Social attitudes are changing dramatically. I talked about that earlier. Previously we used to have something like the Panama Canal disaster that caused 27,000 people to die, and yet as recently as a year ago in Chile we managed to rescu
Slide 13: Gold Fields Investor Day Presentations
Gold Fields Limited Investor Day Presentations 5 December 2011 13 Introduction, Macro Environment, Strategy and Group Performance
Slide 14: Gold demand: China and India
Gold Fields Limited Investor Day Presentations 5 December 2011 Now, let’s look at what is happening in the gold market. Let’s look first of all at demand. I’m a great believer that demand is the biggest driver of the gold price, not so much supply, but demand. And demand has been pretty robust notwi
Slide 15: GDP split and change in gold demand
Gold Fields Limited Investor Day Presentations 5 December 2011 If we look at the GDP split that I mentioned earlier – you remember this graph from earlier – where I said more than half of the GDP is going to come from the emerging countries, you can see the impact that growth is having on demand. He
Slide 16: Central banks are now buying gold
Gold Fields Limited Investor Day Presentations 5 December 2011 Central banks are now buying gold. Interestingly we find that central banks tend to sell when the price goes down and they tend to buy when the price goes up. And they’re still buying. And in fact in the first quarter of 2011 we saw more
Slide 17: Gold share of reserves by country
Gold Fields Limited Investor Day Presentations 5 December 2011 And here is the interesting part. If you look at the split of gold reserves you will find in fact that the developed countries hold 40% of their reserves in gold. They’re the economies that are struggling, and yet the economies that are
Slide 18: ETF holdings of gold
Gold Fields Limited Investor Day Presentations 5 December 2011 ETFs. We now know that ETFs are probably around $120 billion. From nothing in 2004, exchange traded funds now represent $120 billion. That’s massive over the last number of years. But yet some people say, well, it is all over now and peo
Slide 19: Split of gold demand
Gold Fields Limited Investor Day Presentations 5 December 2011 Here is the split of demand that I talked about earlier. Interestingly, ETFs here were 9% of total demand back in 2010. When people say they worry about ETFs being sold off, don’t think that’s the end of the gold price. Because here is t
Slide 20: Gold supply and production growth
Gold Fields Limited Investor Day Presentations 5 December 2011 Now, let’s look at supply. Now, you would have thought with the gold price having gone up four times over the last seven or eight years that supply should be booming. We should have new mines being built every other month. What has happe
Slide 21: Recycling and decline in large discoveries
Gold Fields Limited Investor Day Presentations 5 December 2011 And where is the extra demand being satisfied from? Recycling. Little old ladies in the UK are now being approached by gold traders who want to buy all their old jewellery for a song and sell it for a lot of money because of the demand f
Slide 22: Gold industry facing rising costs
Gold Fields Limited Investor Day Presentations 5 December 2011 The gold industry is facing rising costs. If you look at the all-in costs for the industry these are the top eight companies that make up about 40% of the total industry. You can see where the costs are approaching. They are getting up h
Slide 23: Peer all-in costs for top eight companies
Gold Fields Limited Investor Day Presentations 5 December 2011 Here are the September results for the top eight companies. And the peer average NCE – remember notional cash expenditure is all-in cost of production, capital expenditure plus operating costs – is $1,371. And that is where Gold Fields i
Slide 24: Conclusion: gold fundamentals remain positive
Gold Fields Limited Investor Day Presentations 5 December 2011 So what is the conclusion from all of this? If you look at the macro situation I outlined for you earlier, if you look at where the gold industry is, if you look at the sentiment and look at the fundamentals, we believe the fundamentals
Slide 25: Gold Fields Investor Day Presentations
Gold Fields Limited Investor Day Presentations 5 December 2011 25 Introduction, Macro Environment, Strategy and Group Performance
Slide 26: Gold Fields strategy
Gold Fields Limited Investor Day Presentations 5 December 2011 Right, let’s look at the Gold Fields strategy in relation to all of this. And it hasn’t really changed significantly over the last couple of years. We still want to get a 25% NCE margin from our existing assets. The reason for that is tw
Slide 27: M&A and production per share focus
Gold Fields Limited Investor Day Presentations 5 December 2011 We’re not averse to M&A, but we’re not going to rely on it as a key part of our strategy. And we’re going to be opportunistic like we have in the past. We’re very focussed on growing our production per share and also the NCE margin per o
Slide 28: 5 million ounce target and project pipeline
Gold Fields Limited Investor Day Presentations 5 December 2011 There is the target. I must say, two years ago when I mentioned this target at our last analyst day, this 5 million ounces, we didn’t have the pipeline to fill it because it was a strategic objective. Today we’ve got the pipeline to fill
Slide 29: Team to deliver the strategy
Gold Fields Limited Investor Day Presentations 5 December 2011 There is the team that can help us deliver it, a team that is well balanced and is resourced in all of the right areas. 29 Introduction, Macro Environment, Strategy and Group Performance
Slide 30: Gold Fields Investor Day Presentations
Gold Fields Limited Investor Day Presentations 5 December 2011 30 Introduction, Macro Environment, Strategy and Group Performance
Slide 31: What we have delivered since 2008
Gold Fields Limited Investor Day Presentations 5 December 2011 What have we done since 2008? I think it is important that we go back and say what did we promise you when we stood up here two years ago and what have we delivered since that time. We’ve done a lot of work in fixing the infrastructure i
Slide 32: Increased focus on people and regional structures
Gold Fields Limited Investor Day Presentations 5 December 2011 even my own expectations on that. We’ve got an increasing focus on people because this business is all about people. And we’ve set up fit for purpose regional structures so that the corporate is more focussed on strategy and allocation o
Slide 33: Margin improvement from gold price and cost containment
Gold Fields Limited Investor Day Presentations 5 December 2011 There is an idea of the significant benefit we’ve derived from the gold price and the cost containment. We’ve gone from no margin back in June 2008 to a 29% margin in the last quarter. 33 Introduction, Macro Environment, Strategy and Gro
Slide 34: Reserve growth at international operations
Gold Fields Limited Investor Day Presentations 5 December 2011 I talked about replacing and growing reserves at the international operations. Now, this slide goes back ten years and shows you that back in June 1999 we only had 2.1 million ounces at our international operations. Since then we’ve adde
Slide 35: Achievements in growing the company since 2008
Gold Fields Limited Investor Day Presentations 5 December 2011 Our achievements in growing the company since 2008. We’ve certainly diversified the portfolio significantly, and you will see in a moment what I mean by that. We have developed the pipeline in support of the 5 million ounce target which
Slide 36: Attributable production growth internationally
Gold Fields Limited Investor Day Presentations 5 December 2011 That shows you what the portfolio has done if you look at the attributable production. Back in 2008 we were looking at about 1.25 million ounces from our international operations. Today we’re just shy of 2 million ounces a year. So we ha
Slide 37: Split of production by region
Gold Fields Limited Investor Day Presentations 5 December 2011 There is the split of production. Back in 2008 we really were a South African dominated company with 62% of our production coming from South Africa. Today that is less than 50%. 37 Introduction, Macro Environment, Strategy and Group Perf
Slide 38: Project portfolio in 2008
Gold Fields Limited Investor Day Presentations 5 December 2011 So that’s the project portfolio we had in 2008. It was pretty lean at that point in time. 38 Introduction, Macro Environment, Strategy and Group Performance
Slide 39: Project portfolio today
Gold Fields Limited Investor Day Presentations 5 December 2011 That’s the portfolio we have today. Chucapaca in Peru, which has gone from nothing to 7.6 million ounces in three years. Yanfolila in Mali. Damang, a very exciting opportunity to double the production and significantly increase the reser
Slide 40: Securing our future: achievements
Gold Fields Limited Investor Day Presentations 5 December 2011 Securing our future. We’ve had a number of achievements. I’m not going to read all of them in the interests of time. We’ve significantly improved our safety over the last three years, which is the number one issue for us. Safety we will
Slide 41: Safety performance and initiatives
Gold Fields Limited Investor Day Presentations 5 December 2011 There is your safety. Financial 2008 to June we had 43 fatalities. Shocking. Hard to believe, but true. So far in South Africa we have 18 fatalities. The year is not finished yet, but that is where we stand today. These are some of the i
Slide 42: Beatrix methane project and handover
Gold Fields Limited Investor Day Presentations 5 December 2011 And of course the Beatrix methane project, the only carbon offset project of its kind in the gold industry in South Africa. We’re very proud of that as that particular project picks up steam. With that I’m going to hand over to Tommy McK