Gold Fields Connect - Special Edition

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Group communication to inform › engage › inspire The year of
reinvestment
Dear Colleagues
Gold Fields has just published a strong set of results for FY2016 and I would like to thank all of you for your hard work, energy and dedication in helping us achieve nearly all of our strategic objectives.
We beat our original guidance to
the market on both production and costs. Our eight mines generated
net free cash ow of US$444m – South Deep’s delivery of a small net cash in ow of US$12m, compared
to the $US80m cash out ow in the previous year, played a signi cant role in helping us achieve this excellent result. We strengthened our balance sheet by reducing net debt further, and over the year distributed a total dividend of 110 SA cents per share to investors.
In the year ahead we will continue to drive operational excellence and reinvest in the business to ensure continuing and increasing free cash ow. This will set us up for the future and long-term sustainability.
With various new growth and development projects, we have entered the next cycle in our evolution. At the end of 2016 we announced
our joint venture with Gold Road to develop and operate the Gruyere
Gold project. We have taken over its management in February 2017 and production should start early in 2019.
Last year we also announced the
Damang Reinvestment Plan, which is expected to extend the life-of- mine from 2017 to 2024 and will add signi cantly to the production in our West Africa region.
In Chile, our Salares Norte project received Government approval for suf cient water rights, a signi cant milestone. We are on track to complete a prefeasibility study in H2 2017.
We will continue to invest in brown elds exploration in Australia and look for opportunities for life extension at Cerro Corona and Tarkwa.
Investments such as these do not mean that our strategy has changed. We remain focused on generating cash in order to reduce our debt, pay dividends to shareholders and share the value we create with employees and host communities.
However, for us to grow and sustain cash ow, investing is necessary. While we may spend more cash than we may generate in 2017, we are taking a longer term view to growing our cash ow in the future.
Nick Holland, CEO of Gold Fields.
Our business is a long-term game, which has to be sustainable though gold price cycles. And we will only embark on investments and capital expenditure that offer excellent potential for pay-backs and returns, and which will continue to drive down our costs. It is also important to remember that we need to keep managing our existing ore bodies to ensure repetitive strong cash ow.
In this issue you will learn more about our Regions and departments’ focus areas for the year. I look forward to an exciting 2017 working with all of you as we continue to drive the delivery of value to all our stakeholders.
A new year lies ahead of us – let’s make it count!
Nick Holland
CEO
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Luis Rivera, EVP: Americas
In the Americas Region, and as part of our Vision to be the global leader in sustainable gold mining, our 2017 driving focus is related to four imperatives:
 Continue to create the greatest sustainable value from gold – for our investors, employees, host governments and communities in Peru;
 Secure production and cash ow from Cerro Corona through ef ciency and excellence in all our operations – with a focus on de ning additional in-pit ore, and realising better metallurgical recovery and lower unit costs;
 Extend Cerro Corona’s life-of-mine, while striving to nd another asset in Peru, and
 Deliver the Salares Norte project in Chile within the proposed schedule, while aiming to nd additional mineral resources within our operations in the Salares district.
As a Gold Fields operation, we consistently deliver what we promise, and 2017 should con rm this once again.
... secure
production and cash ow from Cerro
Corona and extend its life-of-mine ...
Peru
Chile
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Americas


REGIONAL FOCUS
Salares Norte
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Stuart Mathews, EVP: Australia
Our 2017 goals and aspirations in Australia will remain similar to those in 2016, but we will also focus on additional areas to meet our strategic priorities.
In 2016, the Australian team’s main drivers were:
 Ensuring Vital Behaviours (VB) were fully
and comprehensively implemented among employees and contractors;
 Consistency of delivery in production and costs to exceed plan, and
 A focus on the Margin Improvement Programme (MIP) in three main areas: Standardisation of maintenance across all sites, reengineering and restructuring the purchasing, supply and logistic area for the Region, and improving productivity at all mines.
In 2017, we will build on these successes and also focus on:
 Incorporating the Gruyere Gold Project development fully into the Region as a growth project and delivering within budget and schedule;
 Consistency of delivery in ounces production, and operating cost and all-in sustaining cost (AISC) performance – 'we do what we say we will do';
 Focused exploration to deliver organic growth from our operations;
 Ensuring that we maintain positive relationships in the communities where we operate. We will be building and strengthening relationships with the Yilka indigenous people, and
 Providing ongoing support, training and engagement taking VB at all operations to a new level of excellence in safety.
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... ensuring
consistency of delivery and incorporate
the Gruyere Gold Project into the Australasia Region ...
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REGIONAL FOCUS
Gruyere Gold Project
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West Africa
Alfred Baku, EVP: West Africa
Going into this year, another key focus will be on maximising our ef ciencies and providing better supervision and leadership to our employees and contractors. The aim is to ensure that our performance metrics are met without compromising our Values. I am happy to announce that management has successfully concluded a two-year negotiation with the Union, covering 2016 and 2017 – a demonstration of our commitment to continuously improve employee wellbeing and productivity.
At Gold Fields West Africa, we are gearing up for a challenging year.
While we continue to be excited about the reinvestment in Damang, our Board of Directors, analysts and shareholders are all keen to see the value it will generate. Some of the key considerations that informed the granting of our Development Agreement in 2016 included our commitment to job security and delivery, dividends and other social and economic programmes. We also have obligations to our communities and all our employees. So delivering Damang on time and within budget will be a key imperative for us in 2017.
Preparing for the task ahead, we have taken a strategic decision to swap Tarkwa and Damang’s general managers to provide the mines with a mix
of leadership that is challenged, experienced and motivated to deliver on our promise and mandate for 2017 and beyond.
We also need Tarkwa to perform optimally, as we go through the process to unearth Damang’s potential and bring it to a steady state.
... unearth
Damang’s potential and bring it to
a steady state ...
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Ghana
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REGIONAL FOCUS
Damang
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South Africa
With South Deep rolling out its 2017 Rebase Plan, this will be a critical year for the team. Our driving focus for 2017 is underpinned by
these imperatives:
Nico Muller, Outgoing EVP: South Africa
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Following the three fatal injuries during past six months, we will invest renewed focus and energy into identifying and preventing potential hazards and risks that may cause serious and fatal injuries
Bedding down South Deep’s principal mining methods, in particular the new rib pillar destress stoping and sequential longhole stoping, will be another focus.
As a capital intensive mechanised mining operation, we will continue the systematic upgrading of our infrastructure and mobile eet for sustained economic viability and pro tability.
We will work on improving our HR model’s effectiveness by focusing on our HR information systems, business processes supporting this function, and the capacity and skills required for this.
We are in the early phases of our Rebase Plan and preparations for production ramp-up. This means that we have to manage operating and capital expenditure prudently and in line with revenue to eliminate the need for additional funding in the year.
With our three-year Wage Agreement expiring in late-2017, we will start negotiations on a new agreement.
We will continue to engage robustly and dynamically with our communities and the unions.
Wewillalsocontinuetosupportandenhancecollaborativeinteraction in relation to the regulatory environment in South Africa.
... prepare for production ramp up as we roll out our Rebase Plan ...
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Adriaan de Beer,
Acting EVP: South Africa
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DEPARTMENTAL FOCUS
Finance
Cost management continues to be a priority for us in 2017. As a
business, we need to ensure that all of our spending takes place with due consideration. In addition to meeting our budgets and complying with policies, this means treating company money as carefully as we would if it were our own. This is what we mean when we encourage our employees to ‘act like owners’. One of the things we need to focus on this year is managing our outsourcing more effectively, ensuring that we only contract out tasks, functions and services when absolutely necessary.
Paul Schmidt, Chief Financial Of cer
Legal, Governance and Compliance
In addition to supporting the Group with all legal matters to ensure it meets its strategic milestones, we will be driving a good governance agenda across the company in the year ahead.
Globally, there is a strong trend of corporate organisations acknowledging that good governance can be a lever for business value creation. This has been supported recently with the publication of the King IV Code on Good Governance in South Africa (a tool used and supported globally) which was released in November 2016. Gold Fields has adopted this broader, more holistic de nition of good governance – we recognise that it can lend us a distinct competitive advantage by reducing our risks and protecting our license to operate, from both a social and legal perspective. This in turn strengthens our position as an investment, employer and partner of choice and ultimately drives business sustainability and the achievement of our Vision.
Taryn Harmse, EVP: Group General Counsel
... we recognise that good
governance can lend us a distinct competitive advantage ...
In terms of this broad de nition, governance goes far beyond simply being legally compliant. It means conducting ourselves with absolute integrity. During 2017 we will therefore continue the work done under the Group Governance and Compliance Project which focuses on putting all the necessary governance structures, policies and procedures in place to ensure we have a robust good governance framework to inform our decisions and behaviour.
An important part of this is the revised Code of Conduct that you all received towards the end of last year. We are excited about the engagement and training planned for the year ahead that will take employees through, among other things, the Code and build their understanding of how governance can help them achieve their business objectives.
This is an important journey for Gold Fields and I look forward to engaging with you all on it.
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Lee-Ann Samuel, EVP: People and Organisational Effectiveness
Human Resources
We will continue to drive a high-performance culture across the Group
in the year ahead. This means leveraging and supporting the skills
and commitment of our people to ensure the business displays agility, operational excellence, high levels of productivity, high ef ciency rates and leadership in people tactics.
In addition to chasing excellence, a high performance team is one that works towards shared targets and has a sense of shared responsibility for the results we achieve. To this end we will be evolving and rolling out a revamped Gold Fields DNA, which will articulate our common purpose and the uni ed Gold Fields culture that we wish to entrench across the Group.
This will be underpinned by strengthened employee engagement and the development of a compelling internal brand that re ects the diversity and shared values of our people. We will be building the capacity and expertise of our internal communications teams, and developing targeted training to strengthen the communication skills of line management across the Group.
This last item is closely tied to our focus on developing people managers who are agile enough to draw on a variety of problem-solving approaches, able to identify key talent and can engage employees in a way that drives the behaviours needed to deliver on business objectives.
Finally, we will continue to strengthen our HR systems to ensure we have accurate real-time data and policies and procedures that are underpinned by sound governance and compliance.
... a high-performance team works towards shared targets and has a sense of shared responsibility for the results we achieve ...
Avishkar Nagaser, EVP: Investor Relations and Corporate Affairs
Investor Relations
2016 was a volatile year for our share price, with the gains during the
rst half eroded during the latter months of the year. Our focus in 2017
is to rebuild investor con dence in Gold Fields. To do so, we will need to demonstrate our commitment to our strategic objectives and delivery of these to the market. This means that we need to ensure that we once again meet our production and cost guidance.
We also need to show continued improvement at South Deep, which is a key focus area for the market. The South Deep Rebase Plan was published in February 2017 and we will engage extensively with our shareholders and other market participants on this. The market will also keep a close eye on progress at Damang, Ghana and Gruyere, Australia. Keeping them updated on developments at these two key projects throughout the year will be key for us in 2017.
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DEPARTMENTAL FOCUS
Strategy, Planning and Corporate Development
When it comes to portfolio management, our key strategic deliverable is enhancing our portfolio both in terms of quality and life. In 2016, we took signi cant steps towards this goal with the acquisition of the Gruyere Gold Project in Australia, the Reinvestment Plan in Damang and further progressing Salares Norte.
A key focus for the Group for the year ahead will be to ef ciently deliver Gruyere and Damang, ensuring they are properly integrated into the business and that their schedules and budgets are met. We’ll also be focusing on the Salares Norte feasibility study that kicks off during 2017.
This year will also see further enhancements to our strategic planning process, as we factor in the full potential and endowment of each of our operations. This will add a more robust dimension to our strategic planning which will give us a more comprehensive and accurate view of the real potential of each operation.
In terms of future growth opportunities, our priority will be to focus on smaller, more strategic bolt-on opportunities, similar to the Gruyere transaction. However we will continue to consider larger strategic acquisitions to enhance the quality of our portfolio should the opportunity arise to do so.
Finally, we are concluding the ‘clean up’ of our portfolio by divesting remaining non-core assets that do not meet our strategic imperatives.
Brett Mattison, EVP: Strategy, Planning and Corporate Development
Sustainable Development
Between 2015 and 2016, we put in place various Sustainable Development strategies and plans focusing on our top priorities: water (including tailings), energy, climate change, mine closure and creating Shared Value
in our communities. This year will see the implementation of these plans as we work to meet our strategic objectives.
We will continue to integrate Sustainable Development more broadly
into our business and operations, strengthening links and enhancing collaboration as we work with multi-disciplinary teams involved in planning and operations.
We will also work to gain an even deeper understanding of our impact, especially when it comes to communities, energy and water. Continuously measuring, quantifying and benchmarking our energy and water use
and cost savings, and strengthening trust and relations with our key stakeholders are critical to realising Gold Fields’ vision. As part of this focus, we’ll be incorporating the recently approved International Council on Mining and Metals (ICMM) position statements on water stewardship and tailings management.
Naseem Chohan, EVP: Sustainable Development
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Richard Butcher, EVP: Technical
In 2016 we spent the year re-establishing Group Technical Services to provide technical oversight to Exco and support the Regions in nalising the life-of-mine and business plans in line with Gold Fields’ strategic objectives.
In the year ahead we’ll be embedding the Technical Services function into the company and establishing basic technical governance for the operating model. A further exciting focus area will be launching the technology and innovation programmes for the company, which will focus on rapid modernisation of our technical systems to ensure their readiness for automation.
At the operations we’ll be working with the Americas Region on the Salares Norte feasibility study, partnering with Ghana on the Damang Reinvestment Plan, assisting South Deep in the delivery of its Rebase Plan, and supporting Australia with Gruyere.
Group Technical Services
... we’ll be embedding the Technical Services into the company and establishing basic technical governance for our operating model ...
Look out for the 2017 BSC
Our Group Balanced Scorecard (BSC) encapsulates our key focus areas for the year ahead, and the metrics against which we will measure our performance. Out now, it informs the Regional Scorecards and your own individual BSC.
BUSINESS OPTIMISATION
PEOPLE
FINANCIAL
SOCIAL LICENCE TO OPERATE
2017
OUT NOW
ECNECIL LAICOS ETAREPO OT
LAICNANIF
7102
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