As filed with the Securities and Exchange Commission on 29 March 2019

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

(Mark One)

☐    REGISTRATION   STATEMENT  PURSUANT  TO  SECTION  12(b)  OR  12(g)   OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

or

☒    ANNUAL   REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF   THE  SECURITIES  EXCHANGE  ACT  OF  1934

For the fiscal year ended 31 December 2018

or

☐    TRANSITION   REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF   THE  SECURITIES  EXCHANGE  ACT  OF  1934

or

☐    SHELL   COMPANY  REPORT  PURSUANT  TO  SECTION  13  OR   15(d)  OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

Date of event requiring this shell company report

For the transition period from              to             

Commission file number: 1-31318

Gold Fields Limited

(Exact name of registrant as specified in its charter)

Republic of South Africa

(Jurisdiction of incorporation or organisation)

150 Helen Road

Sandown, Sandton, 2196

South Africa

011-27-11-562-9700

(Address of principal executive offices)

with a copy to:

Taryn L. Harmse

Executive Vice-President: Group General Counsel

Tel: 011-27-11-562-9724

Fax: 011-27-86-720-2704

Taryn.Harmse@goldfields.com

150 Helen Road

Sandown, Sandton, 2196

South Africa

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

and

Thomas B. Shropshire, Jr.

Linklaters LLP

Tel: 011-44-20-7456-2000

Fax: 011-44-20-7456-2222

One Silk Street

London EC2Y 8HQ

United Kingdom

Securities registered or to be registered pursuant to Section 12(b) of the Act

Title of Each Class	Name of Each Exchange on Which Registered
Ordinary shares of no par value each American Depositary Shares, each representing one ordinary share	New York Stock Exchange* New York Stock Exchange

* Not for trading, but only in connection with the registration of the American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or

common stock as of the close of the period covered by the Annual Report

821,532,707 ordinary shares of no par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:    Yes  ☒    No  ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    ☐  Yes    No  ☒

Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒  Yes    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  Yes    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☒                Accelerated filer  ☐                Non-accelerated filer  ☐                Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☐        International Financial Reporting Standards as issued by the International Accounting Standards Board  ☒    Other  ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:    Item 17  ☐    Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  ☐    No  ☐

Gold Fields’ Operations

FORM 20-F CROSS REFERENCE GUIDE

Item	Form 20-F Caption	Location in this document	Page
1	Identity of directors, senior management and advisers	NA	—
2	Offer statistics and expected timetable	NA	—
3	Key information
	(a)   Selected financial data	Further Information—Key Information—Selected Historical Consolidated Financial Data	1-3
	(b)   Capitalisation and indebtedness	NA	—
	(c)   Reasons for the offer	NA	—
	(d)   Risk factors	Further Information—Risk Factors	4-38
4	Information on the Company
	(a)   History and development of the Company	Further Information—Additional Information on the Company—Organisational Structure—Group Structure	39
		Annual Financial Report—Accounting policies	AFR 129-149
		Integrated Annual Report—Leadership	IAR 26-28
		Further Information—Additional Information on the Company—Memorandum of Incorporation—General	112
		Integrated Annual Report—Administration and Corporate Information	IAR 131
		Annual Financial Report—Director’s Report—Significant Announcements in 2018	AFR 23-24
		Annual Financial Report—Management’s Discussion and Analysis of Financial Statements—Capital Expenditures	AFR 80-81
		Further Information—Description of the Mining Business—Capital Expenditures	73-74
		Further Information—Additional Information—Documents on Display	135
	(b)   Business overview	Gold Fields’ Operations	Back of cover
		Further Information—Additional Information on the Company—Gold Fields’ Mining Operations	40-48
		Integrated Annual Report—Our Business	IAR 4-7
		Integrated Annual Report—CEO Report	IAR 31–41

i

Item	Form 20-F Caption	Location in this document	Page
		Integrated Annual Report—Portfolio Management	IAR 42-53
		Integrated Annual Report—Safe Operational Delivery	IAR 54-71
		Integrated Annual Report—Licence and Reputation	IAR 90-123
		Annual Financial Report—Corporate Governance Report—Application of King IV within Gold Fields	AFR 17-20
		Further Information—Description of the Mining Business	72-76
		Further Information—The Gold Mining Industry	76-77
		Further Information—Environmental and Regulatory Matters	78-98
	(c)   Organisational structure	Further Information—Additional Information on the Company—Organisational Structure	39
	(d)   Property, plant and equipment	Further Information—Additional Information on the Company—Property	49-50
		Annual Financial Report—Management’s discussion and analysis of the financial statements	AFR 63-126
		Annual Financial Report—Notes to the consolidated financial statements—Note 13. Property, plant and equipment	AFR 171
		Further Information—Additional Information on the Company—Reserves of Gold Fields as at 31 December 2018	65-71
4A	Unresolved staff comments	NA	—
5	Operating and financial review and prospects
	(a)   Operating results	Annual Financial Report—Management’s discussion and analysis of the financial statements	AFR 63-126
		Annual Financial Report—Consolidated income statement	AFR 150
		Annual Financial Report—Consolidated statement of financial position	AFR 152
		Annual Financial Report—Consolidated statement of cash flows	AFR 154

ii

Item	Form 20-F Caption	Location in this document	Page
		Annual Financial Report—Notes to the consolidated financial statements—Note 38. Risk management activities—Foreign currency sensitivity	AFR 197
		Further Information—Environmental and Regulatory Matters	78-98
	(b)   Liquidity and capital resources	Annual Financial Report—Management’s discussion and analysis of the financial statements	AFR 63-126
		Annual Financial Report—Notes to the consolidated financial statement—Note 24. Borrowings	AFR 182-184
		Annual Financial Report—Notes to the consolidated financial statement—Note 34. Commitments	AFR 188
		Annual Financial Report—Notes to the consolidated financial statement—Note 37. Financial Instruments	AFR 191-193
		Annual Financial Report—Notes to the consolidated financial statement—Note 38. Risk Management Activities	AFR 194-201
		Annual Financial Report—Notes to the consolidated financial statement—Note 39. Capital Management	AFR 202
	(c)   Research and development, patents and licences, etc.	NA	—
	(d)   Trend information	Annual Financial Report—Management’s discussion and analysis of the financial statements—Trend and Outlook	AFR 126
	(e)   Off-balance sheet arrangements	Annual Financial Report—Management’s discussion and analysis of the financial statements—Off-balance sheet items	AFR 125
	(f)   Tabular disclosure of contractual obligations	Annual Financial Report—Management’s discussion and analysis of the financial statements—Contractual obligations and commitments as at 31 December 2018	AFR 124-125
	(g)   Safe harbour	Forward-Looking Statements	xii
6	Directors, senior management and employees
	(a)   Directors and senior management	Annual Financial Report—Corporate Governance Report—Directors	AFR 14-16
		Further Information—Directors, Senior Management and Employees—Directors	99-104

iii

Item	Form 20-F Caption	Location in this document	Page
		Further Information—Directors, Senior Management and Employees—Executive Committee	102-104
	(b)   Compensation	Annual Financial Report—Remuneration Committee Report	AFR 30-62
	(c)   Board practices	Further Information—Directors, senior management and employees	99-104
		Annual Financial Report—Corporate Governance Report—Application of King IV within Gold Fields	AFR 17-20
		Annual Financial Report—Corporate Governance Report—Board committees—Audit committee	AFR 10-11
		Annual Financial Report—Corporate Governance Report—Board committees—Remuneration committee	AFR 11
	(d)   Employees	Integrated Annual Report—Safe operational delivery—Fit-for-purpose workforce	IAR 74-81
		Further Information—Directors, senior management and employees—Employees	104
		Integrated Annual Report—Safe operational delivery—Safety	IAR 61-64
		Integrated Annual Report—Safe operational delivery—Health	IAR 65-67
	(e)   Share ownership	Annual Financial Report—Directors Report—Share ownership of directors and executive officers	AFR 22
		Annual Financial Report—Notes to the consolidated financial statements—Note 5. Share-based payments	AFR 156-161
7	Major Shareholders and Related Party Transactions
	(a)   Major shareholders	Further Information—Major Shareholders and Related Party Transactions—Major Shareholders	110
	(b)   Related party transactions	Further Information—Related Party Transactions—Related Party Transactions	110
		Annual Financial Report—Notes to the consolidated financial statements—Note 40. Related parties	AFR 203-204
	(c)   Interests of experts and counsel	NA	—

iv

Item	Form 20-F Caption	Location in this document	Page
8	Financial information
	(a)   Consolidated statements and other financial information	Annual Financial Report—Management’s discussion and analysis of the financial statements	AFR 63-126
		Annual Financial Report—Consolidated income statement	AFR 150
		Annual Financial Report—Consolidated statement of comprehensive income	AFR 151
		Annual Financial Report—Consolidated statement of financial position	AFR 152
		Annual Financial Report—Consolidated statement of changes in equity	AFR 153
		Annual Financial Report—Consolidated statement of cash flows	AFR 154
		Annual Financial Report—Accounting policies—Basis of preparation—Provision for silicosis settlement costs	AFR 136
		Annual Financial Report—Accounting policies—Provision for environmental rehabilitation costs	AFR 136
		Annual Financial Report—Notes to the consolidated financial statements—Note 25. Provisions	AFR 185-186
		Annual Financial Report—Notes to the consolidated financial statements—Note 35. Contingent liabilities	AFR 189-190
		Annual Financial Report—Management’s discussion and analysis—Silicosis settlement costs	AFR 91
		Annual Financial Report—Directors’ report—Financial affairs—Dividend policy	AFR 22
	(b)   Significant changes	Annual Financial Report—Notes to the consolidated financial statements—Note 36. Events after the reporting date	AFR 190
9	The Offer and listing
	(a)   Listing details	Further Information—The Listing	111
	(b)   Plan of distribution	NA	—
	(c)   Markets	Integrated Annual Report—About this Report	IAR 2
		Annual Financial Report—Administration and Corporate Information	AFR 228

v

Item	Form 20-F Caption	Location in this document	Page
	(d)   Selling shareholders	NA	—
	(e)   Dilution	NA	—
	(f)   Expenses of the issue	NA	—
10	Additional information
	(a)   Share capital	NA	—
	(b)   Memorandum and articles of association	Further Information—Additional Information—Memorandum of Incorporation	112-117
	(c)   Material contracts	Further Information—Additional Information—Material Contracts	117-123
	(d)   Exchange controls	Further Information—Additional Information—South African Exchange Control Limitations Affecting Security Holders	129-130
	(e)   Taxation	Further Information—Additional Information—Taxation	130-135
	(f)   Dividends and paying agents	NA	—
	(g)   Statement by experts	NA	—
	(h)   Documents on display	Further Information—Additional Information—Documents On Display	135
	(i) Subsidiary information	NA	—
11	Quantitative and qualitative disclosures about market risk	Annual Financial Report—Notes to the consolidated financial statements—Note 38. Risk management activities	AFR 194-201
12	Description of securities other than equity securities
	(a)   Debt securities	NA	—
	(b)   Warrants and rights	NA	—
	(c)   Other securities	NA	—
	(d)   American depositary shares	Further Information—Additional Information—American Depositary Receipts	123-129
13	Defaults, dividend arrearages and delinquencies	NA	—
14	Material modifications to the rights of security holders and use of proceeds	NA	—
15	Controls and procedures	Further Information—Controls and Procedures	136

vi

Item	Form 20-F Caption	Location in this document	Page
16A	Audit Committee financial expert	Further Information—Audit Committee Financial Expert	137
16B	Code of ethics	Annual Financial Report—Corporate Governance Report—Standards, principles and systems	AFR 5
16C	Principal accountant fees and services	Further Information—Principal Accountant Fees and Services	139
16D	Exemptions from the listing standards for audit committees	NA	—
16E	Purchase of equity securities by the issuer and affiliated purchasers	NA	—
16F	Change in registrant’s certifying accountant	Change in Registrant’s Certifying Accountant	138
16G	Corporate governance	Further Information—Corporate Governance	140
16H	Mine safety disclosure	NA	—
17	Financial statements	NA	—
18	Financial statements	Report of Independent Registered Public Accounting Firm	AFR 127-128
		Annual Financial Report—Consolidated income statement	AFR 150
		Annual Financial Report—Consolidated statement of comprehensive income	AFR 151
		Annual Financial Report—Consolidated statement of financial position	AFR 152
		Annual Financial Report—Consolidated statement of changes in equity	AFR 153
		Annual Financial Report—Consolidated statement of cash flows	AFR 154
		Annual Financial Report—Accounting policies	AFR 129-149
		Annual Financial Report—Notes to the consolidated financial statements	AFR 155-212
19	Exhibits	Exhibits	141-144

vii

PRESENTATION OF FINANCIAL INFORMATION

Gold Fields Limited (Gold Fields or the Company) is a South African company and, in fiscal 2018, 7 per cent., 36 per cent., 42 per cent. and 15 per cent. of Gold Fields’ operations, based on managed gold-equivalent production, were located in South Africa, Ghana, Australia and Peru, respectively. Its books of account are maintained in South African Rand. The reporting currency of the Gold Fields consolidated financial statements is the U.S. dollar. The Group’s annual and interim financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and as prescribed by law (refer to the “Basis of preparation” section of the accounting policies to the consolidated financial statements).

Except as otherwise noted, the financial information included in this annual report has been prepared in accordance with IFRS and is presented in U.S. dollars, and for descriptions of critical accounting policies, refer to accounting policies under IFRS.

For Gold Fields’ consolidated financial statements, unless otherwise stated, statement of financial position item amounts are translated from Rand and A$ to U.S. dollars at the exchange rate prevailing on the date that it closed its accounts for fiscal 2018 (Rand 14.63 per U.S.$1.00 and U.S.$0.70 per A$1.00 as of 31 December 2018), except for specific items included within shareholders’ equity and the statement of cash flows that are translated at the rate prevailing on the date the relevant transaction was entered into, and income statement item amounts are translated from Rand and A$ to U.S. dollars at the weighted average exchange rate for each period (Rand 13.20 per U.S.$1.00 and U.S.$1.00 per A$0.75 for fiscal 2018).

In this annual report, Gold Fields presents the financial items “all-in sustaining costs” (AISC), “all-in sustaining costs per ounce”, “all-in costs” (AIC), and “all-in costs per ounce”, which have been determined using industry standards promulgated by the World Gold Council (WGC) and are non-IFRS measures.¹ The WGC standard was released by the WGC on 27 June 2013. Gold Fields voluntarily adopted and implemented these metrics as from the quarter ended June 2013. An investor should not consider these items in isolation or as alternatives to cost of sales, profit before tax, profit for the year, cash flows from operating activities or any other measure of financial performance presented in accordance with IFRS. While the WGC provided definitions for the calculation of AISC and AIC, the calculation of AISC, AISC per ounce, AIC and AIC per ounce may vary significantly among gold mining companies, and by themselves do not necessarily provide a basis for comparison with other gold mining companies. See “—Further Information—Key Information—Selected Historical Consolidated Financial Data”, “—Additional Information on the Company—Glossary of Mining Terms—All-in sustaining costs” and “—Additional Information on the Company—Glossary of Mining Terms—All-in costs”.

Gold Fields also presents “net cash flow”, “free cash flow margin” and “adjusted EBITDA” in this annual report, which are a non-IFRS measures¹. An investor should not consider these items in isolation or as alternatives to cash flow from operating activities, cash and cash equivalents or any other measure presented in accordance with IFRS. Net cash flow is defined as net cash flow from operations less the South Deep dividend, net capital expenditure (additions to property, plant and equipment less proceeds on disposal of property, plant and equipment), and environmental trust fund and rehabilitation payments, as per the consolidated statement of cash flows. Free cash flow margin is defined as adjusted all-in costs adjusted for non-cash share-based payments, non-cash long-term employee benefits, exploration, feasibility and evaluation costs outside of existing operations, non-sustaining capital expenditure for growth projects only, realised gains or losses on revenue hedges and taxation paid (excluding royalties) expressed as a percentage. Adjusted EBITDA is defined as profit or loss for the year adjusted for interest, taxation, amortisation and depreciation and certain other costs. The definition for the calculation of net cash flow, free cash flow margin and adjusted EBITDA may vary

¹  These non-IFRS measures have been defined and reconciled to IFRS in the Management’s discussion and analysis of the financial statements.

viii

significantly between companies, and by themselves do not necessarily provide a basis for comparison with other companies. See “—Additional Information on the Company—Glossary of Mining Terms”.

Market Information

This annual report includes industry data about Gold Fields’ markets obtained from industry surveys, industry publications, market research and other publicly available third-party information. Industry surveys and industry publications generally state that the information they contain has been obtained from sources believed to be reliable but that the accuracy and completeness of such information is not guaranteed. Gold Fields and its advisers have not independently verified this data.

In addition, in many cases, statements in this annual report regarding the gold mining industry and Gold Fields’ position in that industry have been made based on internal surveys, industry forecasts and market research, as well as Gold Fields’ own experiences. While these statements are believed by Gold Fields to be reliable, they have not been independently verified.

ix

DEFINED TERMS AND CONVENTIONS

In this annual report, all references to the “Group” are to Gold Fields and its subsidiaries. On 18 February 2013 (the Spin-off date), Gold Fields completed the separation of its wholly-owned subsidiary, Sibanye Gold Limited, trading as Sibanye-Stillwater (Sibanye-Stillwater), formerly known as GFI Mining South Africa Proprietary Limited (GFIMSA), which includes the KDC and Beatrix mining operations (the Spin-off).

In this annual report, all references to “fiscal 2014” are to the 12-month period ended 31 December 2014, all references to “fiscal 2015” are to the 12-month period ended 31 December 2015, all references to “fiscal 2016” are to the 12-month period ended 31 December 2016, all references to “fiscal 2017” are to the 12-month period ended 31 December 2017, all references to “fiscal 2018” are to the 12-month period ending 31 December 2018, and all references to “fiscal 2019” are to the 12-month period ending 31 December 2019. In this annual report, all references to “South Africa” are to the Republic of South Africa, all references to “Ghana” are to the Republic of Ghana, all references to “Australia” are to the Commonwealth of Australia, all references to “Chile” are to the Republic of Chile, all references to “Peru” are to the Republic of Peru, all references to the “Philippines” are to the Republic of the Philippines and all references to the “United States” and “U.S.” mean the United States of America, its territories and possessions and any state of the United States and the District of Columbia.

In this annual report, all references to the “DMR” are references to the South African Department of Mineral Resources, the government body responsible for regulating the mining industry in South Africa.

This annual report contains descriptions of gold mining and the gold mining industry, including descriptions of geological formations and mining processes. In order to facilitate a better understanding of these descriptions, this annual report contains a glossary defining a number of technical and geological terms. See “—Additional Information on the Company—Glossary of Mining Terms”.

In this annual report, gold production figures are provided in troy ounces, which are referred to as “ounces” or “oz”, or in kilograms, which are referred as “kg”. Ore grades are provided in grams per metric tonne, which are referred to as “grams per tonne” or “g/t”. All references to “tonnes” or “t” in this annual report are to metric tonnes. All references to “gold” include gold and gold equivalent ounces, unless otherwise specified or where the context suggests otherwise. See “—Additional Information on the Company—Glossary of Mining Terms” for further information regarding units of measurement used in this annual report and a table providing rates of conversion between different units of measurement. AIC, net of by-product revenue, and AISC, net of by-product revenue, are calculated per ounce of gold sold, excluding gold equivalent ounces. See “—Annual Financial Report—Management’s Discussion and Analysis of the Financial Statements—All-in Sustaining and All-in Costs”.

This annual report contains references to the “total recordable injury frequency rate” (TRIFR) at each Gold Fields operation—which was introduced in 2013. The TRIFR at each operation includes the total number of fatalities, lost time injuries, medically treated injuries (MTI) and restricted work injuries (RWI) per million man hours. A lost time injury (LTI) is a work-related injury resulting in the employee or contractor being unable to attend work for a period of one or more days after the day of the injury (i.e. the employee or contractor is unable to perform any of his/her duties). An MTI is a work-related injury sustained by an employee or contractor which does not incapacitate that employee and who, after having received medical treatment, is deemed fit to immediately resume his/her normal duties on the next calendar day, immediately following the treatment or re-treatment. An RWI is a work-related injury sustained by an employee or contractor which results in the employee or contractor being unable to perform one or more of their routine functions for a full working day from the day after the injury occurred, but the employee or contractor can still perform some of his/her duties.

In this annual report, “R” and “Rand” refer to the South African Rand and “SA cents” refers to subunits of the South African Rand, “$”, “U.S.$” and “U.S. dollars” refer to United States dollars, “U.S. cents” refers to

x

subunits of the U.S. dollar, “A$” and “Australian dollars” refer to Australian dollars, “GH” refers to Ghana Cedi, “S/.” refers to the Peruvian Nuevo Sol and “CAD” refers to Canadian dollars.

In this annual report, except where otherwise noted, all production and operating statistics are based on attribution of 100 per cent. of Gold Fields’ total operations, which include production from the Tarkwa and Damang mines in Ghana and from the Cerro Corona mine in Peru, a portion of which is attributable to the non-controlling shareholders in those mines. In addition, production and operating statistics for Asanko are included on an attributable basis. This annual report contains references to “gold equivalent ounces”, which are quantities of metals (such as copper) expressed as amounts of gold using the prevailing prices of gold and the other metals. To calculate this, the accepted total value of the metal based on its weight and value is divided by the accepted value of one troy ounce of gold.

xi

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the Securities Act) and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the Exchange Act) with respect to Gold Fields’ financial condition, results of operations, business strategies, operating efficiencies, competitive position, growth opportunities for existing services, plans and objectives of management, markets for stock and other matters.

These forward-looking statements, including, among others, those relating to the future business prospects, revenues, income and 2019 production and operational guidance of Gold Fields, wherever they may occur in this annual report and the exhibits to the annual report, are necessarily estimates reflecting the best judgement of the senior management of Gold Fields and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. As a consequence, these forward-looking statements should be considered in light of various important factors, including those set forth in this annual report. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation:

• the difficulties, delays and costs in relation to the restructuring plan at the South Deep operation;

• decreases in the market price of gold or copper;

• fluctuations in exchange rates, currency devaluations and other macroeconomic monetary policies;

• changes in relevant government regulations, particularly labour, environmental, tax, royalty, health and safety, water, regulations and potential new legislation affecting mining and mineral rights;

• court decisions affecting the South African mining industry, including, without limitation, regarding the interpretation of mineral rights legislation and the treatment of health and safety claims;

• the success of the Group’s business strategy, development activities and other initiatives, particularly at Damang and Gruyere;

• the ability to achieve anticipated efficiencies and other cost savings in connection with past and future acquisitions or joint ventures;

• changes in assumptions underlying Gold Fields’ mineral reserve estimates;

• the ability to achieve anticipated cost savings at existing operations;

• the occurrence of hazards associated with underground and surface gold mining or contagious diseases (and associated legal claims) at Gold Fields’ operations;

• loss of senior management or inability to hire or retain sufficiently skilled employees;

• power cost increases as well as power stoppages, fluctuations and usage constraints;

• the ability of the Group to protect its information technology and communication systems and the personal data it retains;

• the ability of the Group to comply with requirements that it operate in a sustainable manner and provide benefits to affected communities;

• regulation of greenhouse gas emissions and climate change;

• geotechnical challenges due to the older age of certain mines and a trend toward mining deeper pits and more complex deposits;

• the occurrence of work stoppages related to health and safety incidents;

• the ability to manage and maintain access to current and future sources of liquidity, capital and credit, including the terms and conditions of Gold Fields’ facilities and Gold Fields’ overall cost of funding;

xii

• downgrades in the credit rating of Gold Fields or South Africa;

• political instability in South Africa, Ghana, Peru or regionally in Africa or South America;

• overall economic and business conditions in South Africa, Ghana, Australia, Peru and elsewhere;

• fraud, bribery or corruption at Gold Fields’ operations that leads to censure, penalties or negative reputational impacts;

• the inability to modernise operations and remain competitive within the mining industry;

• the effects of a failure of a dam at a tailings facility and the closure of adjacent mines;

• the occurrence of labour disruptions and industrial actions;

• the adequacy of the Group’s insurance coverage;

• supply chain shortages and increases in the prices of production imports;

• the manner, amount and timing of capital expenditures made by Gold Fields on both existing and new mines, mining projects, exploration projects or other initiatives; and

• the appointment of a new registered independent accounting firm which may interpret accounting rules differently than its former firm.

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 annual report or to reflect the occurrence of unanticipated events.

xiii

TABLE OF CONTENTS

	Page
FORM 20-F CROSS REFERENCE GUIDE		i
PRESENTATION OF FINANCIAL INFORMATION		viii
DEFINED TERMS AND CONVENTIONS		x
FORWARD-LOOKING STATEMENTS		xii
INTEGRATED ANNUAL REPORT		IAR-1
ANNUAL FINANCIAL REPORT		AFR-1
FURTHER INFORMATION		1
KEY INFORMATION		1
RISK FACTORS		4
ADDITIONAL INFORMATION ON THE COMPANY		39
GLOSSARY OF MINING TERMS		60
RESERVES OF GOLD FIELDS AS AT 31 DECEMBER 2018		65
DESCRIPTION OF MINING BUSINESS		72
ENVIRONMENTAL AND REGULATORY MATTERS		78
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES		99
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS		110
THE LISTING		111
ADDITIONAL INFORMATION		112
CONTROLS AND PROCEDURES		136
AUDIT COMMITTEE FINANCIAL EXPERT		137
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT		138
PRINCIPAL ACCOUNTANT FEES AND SERVICES		139
CORPORATE GOVERNANCE		140
EXHIBITS		141
SIGNATURES		145

xiv

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About this report

Gold Fields Limited is a globally diversified gold producer with eight operating mines (including our Asanko Joint Venture) and projects in Australia, Chile, Ghana, Peru and South Africa, and total attributable annual gold-equivalent production of approximately 2Moz.

It has attributable gold Mineral Reserves of around 48.1Moz. Attributable copper Mineral Reserves total 691 million pounds, while silver Reserves total 39.3Moz.

Gold Fields has a primary listing on the Johannesburg Stock Exchange (JSE) Limited, with a secondary listing on the New York Stock Exchange (NYSE).

Our integrated reporting approach aims to enable our stakeholders to make a more informed assessment of the value of Gold Fields and its prospects. This Integrated Annual Report (IAR) is structured around the Gold Fields’ Group balanced scorecard, which is how we measure our performance against our strategy and the matters we consider to be most material to the sustainability of our Group (p14). Gold Fields embraces integrated thinking and takes an integrated approach to value creation, which is aligned with the International Integrated Reporting Council’s (IIRC) six capitals model.

The IAR also forms part of our adherence to the Global Reporting Initiative (GRI) Standards and the 10 Principles of the International Council on Mining &  Metals (ICMM), whose mandatory requirements of its position statements are presented online. We also align with the 10 Principles of the United Nations Global Compact.

Report scope and boundary

This report covers the reporting period from 1 January 2018 to 31 December 2018 and provides an overview of our eight operations (including our Asanko JV) in Australia, Ghana, Peru and South Africa, as well as our exploration and business development activities. Details on the exact location of each operation and project can be found on p2 – 3.

Non-financial data for 2018 only covers our seven operating mines and excludes exploration activities and projects. Data from Darlot, which was sold, is included for the January to October 2017 period.

This report has been compiled in accordance with the GRI Standards: core option and the International Integrated Reporting Council Framework. Gold Fields also references a broad range of additional codes, frameworks and standards in compiling the report, including the King IV Code on Corporate Governance (King IV). The full list can be found in the Annual Financial Report (p15 – 16). We consider that this IAR, together with additional documents held online, complies with the requirements of the GRI Standards.

Non-IFRS measures are used throughout the IAR. These have been defined in the Management’s discussion and analysis of the financial statement in the Annual Financial Report, p129 – 130.

Average exchange rates for 2018 of R13.20/US$1 and US$0.747/A$1 have been used in this report. For 2019, forecast exchange rates of R13.61/US$1 and US$0.75/A$1 have been used.

ICMM subject matters

Gold Fields has complied with the ICMM Sustainable Development Framework, Principles, Position Statements and Reporting Requirements (see p129 – 130, for the assurance hereof).

Our compliance with the ICMM is addressed throughout this report and on our website. This detail covers:

∎ The alignment of our sustainable development policies against the 10 principles and mandatory position statements

∎ The process for identifying specific sustainable development risks and opportunities

∎ The existence and implementation of systems and approaches for managing sustainable development risks and opportunities

∎ Gold Fields’ performance across a selection of identified material sustainable development risks and opportunities.

Assurance

ERM has provided independent reasonable assurance over selected sustainability information in this report, which is prepared in accordance with the GRI Standards: core option. As a member of the ICMM, we are committed to obtaining assurance in line with the ICMM Sustainable Development Framework: Assurance Procedure. ERM has provided assurance over our statement on compliance with the ICMM Sustainable Development Framework, Principles and Reporting Requirements. The key sustainability performance data for assurance by ERM in 2018 can be found on p131 – 132.

Board approval

The Gold Fields Board of Directors acknowledges its responsibility to ensure the integrity of this IAR and has applied its collective mind throughout the preparation of this report. The Board believes that the integrated report is presented in compliance with the International Integrated Reporting Framework. Furthermore, the Board considers that this IAR complies in all material respects with the relevant statutory requirements of the various regulations governing disclosure and reporting by Gold Fields and that the annual financial statements comply in all material respects with the South African Companies Act No 71 of 2008, as amended, as well as with the International Financial Reporting Standards.

As such, the Board unanimously approves the content of the IAR 2018, including the Annual Financial Report 2018, and authorised its release on 29 March 2019.

Cheryl Carolus

Chairperson of the Board

25 March 2019

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The Gold Fields Integrated Annual Report 2018 1

Contents

1\
	Our global footprint	4
	Our business model	6
	Value creation and distribution	8
	Our operating context	10
	Risks and materiality	12
	Performance against strategic targets	16
2\
	Vision of the Chairperson	22
	Summarised corporate governance	25
	CEO Report	31
3\
	Managing our portfolio	44
	Life extension through near-mine exploration	52
4\
	Operational performance	56
	Safety	61
	Health	65
	Energy management	68
	Innovation and technology	72
	A fit-for-purpose workforce	74
	Summarised Remuneration Report	77
5\
	Financial performance	84
6\
	Overview	92
	Environmental stewardship	93
	Climate change	95
	Water management	98
	Waste and tailings	101
	Mine closure	103
	Stakeholder relations	104
	Community relations	112
	Human rights	120
7\
	First party: Internal Audit Statement	126
	Independent Assurance Statement of Gold Fields Limited	127
	Key sustainability performance data	129
	Administration and corporate information	IBC

Send us your feedback:

To ensure that we report on issues that matter to our stakeholders please provide any feedback and questions to: investors@goldfields.com, sustainability@goldfields.com or visit www.goldfields.com to download the feedback form.

	linkedin.com/company/gold-fields
	business.facebook.com/GoldFieldsLTD
	@GoldFields_LTD

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2 The Gold Fields Integrated Annual Report 2018

Our global footprint

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The Gold Fields Integrated Annual Report 2018	3

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4 The Gold Fields Integrated Annual Report 2018

Our business model

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6 The Gold Fields Integrated Annual Report 2018

Value creation and distribution

The ultimate aim of our strategy and business model is to create value for our stakeholders

Total and national value distribution
National value distribution by region and type 2018 (US$m)	Government		Business		Employees		Socio- economic spend			Capital providers		National value distribution
Americas		55		156		37		6			4		258
Australia		121		812		128		1			0		1,062
South Africa		3¹		176		144		3	2		9		336
West Africa		90		654		83		15			13		855
Corporate		14		15		49		0			121		200
Total Gold Fields		283		1,813		442		26			147		2,711
1   South Deep does not yet pay income tax as it is in a loss-making position 2   This includes spending from the South Deep trusts and SLP commitments

Governments			Workforce
			Payments include
Payments include Mining royalties and land-use payments, taxes, duties and levies. Why these stakeholders matter Governments provide us with access to ore bodies by granting mining and other licences. They also deliver the infrastructure necessary to build and maintain our mines, including roads, electricity and water supply. 2018 Contributions: ∎   We paid governments US$283m (2017: US$310m) in taxes and royalties, 10% of total value distribution (2017: 11%) ∎   In addition, the Ghanaian government benefited from US$15m in declared dividends relating to its 10% shareholding in Gold Fields Ghana			Salaries and wages, benefits and bonus payments (including shares and payroll taxes). Why these stakeholders matter The technical skills, experience and activity of our people drive the day-to-day operations of our business. 2018 Contributions: ∎   We paid US$442m (2017: US$506m) to employees in terms of salaries, dividends and benefits, representing 16% of total value distribution (2017: 18%) ∎   We also provide employees (where legislated) with additional benefits such as retirement savings, healthcare assistance, life and disability insurance, housing assistance and personal accident cover ∎   We prioritise the employment of members from our host communities. At end 2018 host community employment comprised 56% of our workforce
Business
Payments include Operational and capital procurements. Why these stakeholders matter Supply chain businesses provide the equipment and services needed to develop and maintain our operations. They comprise business partners, contractors and suppliers. 2018 Contributions: ∎   We paid US$1,813m to suppliers and contractors, representing 67% of total value creation (2017: US$1,857m/65%) ∎   Of the total 2018 procurement expenditure of US$1,813m, US$1,542m, or 85%, was spent on businesses based in operating countries by our mines (2017: US$1,620m/88%) ∎   US$441m, or 29%¹, of total procurement by our mines was spent on suppliers and contractors from host communities (2017: US$774m/45%) ¹   The % decline is due to a change in the definition of host communities by our Australian operations to only include communities in their area of influence (previously Perth was included in the definition due to the FIFO nature of our mines)
		Capital providers
		Payments include Interest and dividend payments to capital providers. Why these stakeholders matter Financial institutions, shareholders and bond holders invest with us, thus enabling us to fund the development, maintenance and growth of our operations and our overall business. 2018 Contributions: ∎   We paid US$147m (2017: US$160m) to the providers of debt and equity capital, mainly in the form of interest and dividends ∎   Net debt increased by US$309m to US$1,612m ∎   We paid a total dividend of R0.40/share for the 2018 financial year

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The Gold Fields Integrated Annual Report 2018	7

         Communities   How we create value for communities                

                    

Why the focus on communities

We believe that our host communities are one of our most critical stakeholders as they grant us our licence to operate. Over the past few years, we devoted considerable resources to sharing the value created through our mines with the communities surrounding them. This goes beyond the direct financial investment to creating sustainable surrounding economies through community employment and procurement.

During 2018, we enhanced our understanding of the value created through these programmes by quantifying the impact.

	Trade-offs We continue to balance the legitimate, and at times conflicting, needs of our stakeholders in order to create value over the short, medium and long-term. These were some of the significant trade-offs we had to make during 2018.
1.	Balancing financial viability with employment
	∎	To improve financial viability, we unfortunately had to retrench 1,082 employees and 420 contractors at South Deep to right-size the business (p46)
	∎	At Tarkwa mine, we retrenched 2,211 employees, of which 1,714 were re-engaged by contractors or on a contractor basis (p33)
2.	Improving long-term sustainability
	∎	By channelling funds into growth capital we aim to secure future growth by temporarily cutting back on other stakeholder spending
3.	Managing our environmental impacts
	∎	Mining is resource intensive, but we seek to minimise our environmental impacts. During 2018, we had two Level 3 water-related environmental incidents. We responded speedily to address the causes and communicated the incidents (p95)
4.	Balancing the immediate needs of communities with long-term value creation
	∎	Our focus shifted from short-term projects to long-term value creation by creating sustainable value for host communities through employment and procurement programmes (p113)
5.	Providing long-term contributions to host governments
	∎	At the Cerro Corona mine, we reduced our taxable income in the short term to fund future growth. The investment is set to provide longer-term tax and royalty revenues to the host government

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8 The Gold Fields Integrated Annual Report 2018

Our operating context

Gold Fields is subject to external strategic dynamics that inform decision-making and influence our business performance. An analysis of the three key strategic themes - and how Gold Fields is responding to them - is set out below.

Gold price

Issue

The price of gold continued its relatively static course during 2018, ending the year at US$1,280/oz, down just over US$30/oz from the 2018 opening price of US$1,313/oz. The average gold price received by Gold Fields, however, has barely changed from US$1,255/oz in 2017 to US$1,252/oz in 2018.

The traditional investment case for gold as a safe haven asset was called into question as many investors sold their physical gold holdings after the gold price collapsed in 2013. However, in late 2018 and early 2019 we have seen some shift to gold amid political and economic uncertainty in the US and the subsequent weakness in the US Dollar. While much of the gold price’s short-term movement is driven by market sentiment and geopolitical developments, an analysis of gold’s supply and demand fundamentals underpins our belief that the gold price could continue to improve over the next few years, though there will undoubtedly be periods of short-term volatility.

According to the CPM Group, total gold demand was steady at 127.4Moz in 2018 (2017:127Moz), with jewellery and industrial demand unchanged at 97Moz, and higher central bank purchases offsetting a decline in private investment in coins and bullion. Net purchases by central banks and other official institutions continued to grow steadily in 2018, improving by over 50% to 16.5Moz in 2018, after a similar rise in 2017 to 11Moz. Total stock demand by Exchange Traded Funds remained stable at 30.3Moz in 2018 (2017: 30Moz).

In the long term, gold supply issues will also support a recovery in the gold price, in our view. According to CPM data, mine production has plateaued between 90Moz – 92Moz since 2014. Mine supply in 2018 totalled 92.1Moz and secondary

supply 30.1Moz, both unchanged from 2017, leaving total supply marginally higher at 127.4Moz in 2018 (2017: 127Moz). Many gold market analysts are of the view that the industry has reached peak production levels given the limited number of new gold discoveries since the mid-1990s, together with the decreased levels of exploration spend in recent years.

Response

Gold Fields does not predict the gold price. We expect volatility and structure the business accordingly.

We seek to maximise value by:

∎ Prioritising cash-flow over production volumes

∎ Setting targets for each region at a 15% free cash-flow (FCF) margin around a planning price of US$1,200/oz

∎ Eliminating marginal mining

∎ Selling non-strategic assets

∎ Hedging a portion of our gold production in times of high capital expenditure

The Group is therefore in a relatively strong state to weather a sustained lower gold price (at just over US$1,000/oz) and well positioned to capture future upside when the gold price recovers.

During 2017 and 2018, we invested in the future of our portfolio with a number of new projects, while at the same time continuing to invest in the ongoing development of ore bodies – through proactive near-mine exploration and development. Our mines avoid ‘high-grading’ – due to the obvious negative impact this would have on the sustainability of their ore bodies – by mining at or below their reserve grade. We are implementing these strategies despite the current price environment.

Global gold demand and supply versus the US$ gold price (average annual)

Source: WGC

Total mine supply

Source: CPM

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The Gold Fields Integrated Annual Report 2018	9

Social licence to operate

Issue

The nature of the extractive sector means the industry must pay particular attention to its social licence to operate. Unlike other companies, mines are dependent on their mineral deposits and cannot relocate to new locations when facing deteriorating local or national operating environments. Furthermore, despite many mines’ lives being finite, they can still span decades. Mines must be able to navigate complex social, economic and political dynamics over time to avoid conflicts with their host communities. As it is, conflicts between communities and mines in the industry globally have risen sharply over the last decade.

To manage the potential risks, mining companies need to maximise their positive impacts, minimise their negative impacts and make sure that this is communicated to – and recognised by – host community stakeholders. For many decades this was not the case and, apart from a limited number of community jobs and procurement offered by mining companies, these communities saw few benefits. Similarly, taxes and royalties went into the coffers of central governments for national benefit and rarely found their way back through investment in host communities. It is therefore not surprising that demands from host communities have become more vocal and strident in recent years. Amid widespread use of social media and activism in these communities their demands have also found a global audience.

Response

At Gold Fields, a strong social licence to operate is embedded in our societal value proposition and is a prerequisite for long-term generation of value for stakeholders. This approach had to be underpinned by:

∎ Responsibility: ongoing investment in responsible operational standards to avoid and mitigate negative social and environmental impacts. This includes effective water and environmental management, which has become an increasingly material issue for most mining companies (p95)

∎ Trust: frank, two-way communication, realistic expectation management and visibly honouring commitments builds trust. This includes ongoing engagement on issues such as indigenous rights, employment opportunities and social transformation (p111)

∎ Understanding: investment in communities relies on a thorough understanding of the risks, community needs and community perceptions. Since 2015, Gold Fields has undertaken relational proximity studies at a number of its mines and in 2017 also undertook socio-economic baseline and social return on investment (SROI) studies at its South Deep mine in South Africa

∎ Value creation in host communities: we seek to create value in our communities through investment in socio-economic development (SED) projects, and, more critically, by recruiting employees and contractors from host communities and sourcing goods and services from companies in these communities (p113)

These initiatives are particularly important in the low gold price context, which has an impact on the Group’s ability to invest in community development projects as well as raising the prospect of job cuts among employees, many of whom hail from host communities.

Conflicts between mines and communities on the rise

Source: ICMM

Regulatory issues

Issue

A sound and certain regulatory and fiscal environment should enable the global gold sector to ride out short-term fluctuations in gold prices

and achieve sustained returns over the 15- to 20-year average life of a mining project. In many jurisdictions, however, the legal and tax environment has become less conducive to the long-term viability of the mining sector. Many governments view the industry as an easy target for higher taxes and other fiscal imposts, particularly during tough economic times. As a result, the governments’ share of mining revenue has grown at the expense of other stakeholders, but at the same time miners and investors are shying away from more risky jurisdictions.

Response

The question is how the trust gap between mining companies and governments can best be bridged. Gold Fields on its own and in conjunction with its peers in the wider global mining industry, has sought to address this trust gap in a number of ways:

∎ The industry is continuing to spread value to a number of stakeholders. Over the past three years, Gold Fields has consistently created between US$2bn and US$3bn in total value annually for our wide range of stakeholders – accounting for around 90% of revenue on average (p6)

∎ Gold Fields is actively promoting host community employment and procurement from host community enterprises in an effort to strengthen its social licence to operate and mitigate any regulatory actions that limit its ability to share the benefits of mining. In 2018, about 25% of our total value creation benefited host communities through these initiatives (p7)

∎ We are working with international mining bodies, such as the International Council on Mining and Metals (ICMM),to promote industry-wide best practice and showcase the benefits that a responsible and fairly regulated industry can bring

∎ We actively engage with our host governments in Ghana, Australia, Peru and South Africa, either directly or through industry organisations, in addressing the resource nationalism that, we believe, prevents the sector from achieving sustainable growth.

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10 The Gold Fields Integrated Annual Report 2018

Risks and materiality

Top 20 Group risks and opportunities in 2018

How Gold Fields manages risk

The approach to assessing risk in Gold Fields is a collective effort by Group, regional and mine management of the risks facing the business. The assessments of the risks and their mitigating actions are a critical internal management tool, which reduce the identified risks significantly. Risk mitigations are included in the annual Group Performance Scorecard and cascaded down to the performance scorecard of management employees at regional and operational levels. The formal risk review process starts during management’s annual strategic planning sessions where strategic risks and macro-trends are analysed in developing the Company’s risk register and mitigating actions. These are updated quarterly, and presented to the Board’s Risk Committee twice a year for verification.

Risk tables and heat maps have been published in the IAR on this basis for the last nine years.

 OUR MATERIAL ISSUES

Gold Fields Group materiality score for GRI standards (where 1 = critical to Gold Fields and 10 = not material at all)
Direct and indirect economic impacts	1.85
Health and safety	2.62
Public policy / corporate governance	2.75
Environmental compliance	3.09
Employment	3.23
Water management	3.36
Energy / emissions	3.66
Indigenous people	3.85

	RISK AND MITIGATING ACTIONS
	South Deep – loss of investor confidence due to non- achievement of the restructuring plan
	∎	Implementation of the organisational restructuring programme
	∎	Productivity initiatives to unlock the full potential of all our employees
	∎	Skills development programmes – artisan upskilling and supervisor training programme – progressed
	∎	Ensure compliance to mine design
	∎	Improve fleet performance by focusing on effective maintenance and operation of equipment
	∎	Continue to ensure safe working environments
	∎	Short-, medium- and long-term strategies to supplement grid power
	A sustained and significantly lower gold price and currency exchange rate volatility
	∎	Business plans implemented and monitored through regular cost, capital and production reviews
	∎	Ongoing portfolio optimisation to ensure cash generation
	∎	Gold and copper production hedging for various regions
	∎	Business restructuring and technology strategies to improve safety, efficiencies and costs
	Resource nationalism
	∎	Enhanced engagement and lobbying through industry bodies
	∎	Further refinement of stakeholder engagement policies and strategies
	∎	South Deep’s new 2018 – 2022 Social and Labour Plan (SLP) submitted. Waiting for approval by the regulator
	∎	Shared Value projects, particularly host community employment and procurement programmes
	Non-delivery of Damang Reinvestment and Gruyere projects
	∎	Damang Reinvestment project ahead of schedule
	∎	Mitigating strategies in place to catch up on the slight backlog at Gruyere caused by severe weather
	∎	Monthly reporting and monitoring of construction and engineering schedules
	∎	Management of construction and commissioning contractor strengthened
	∎	Night shift introduced at Gruyere to ensure project schedule is achieved
	Replacing Resources and Reserves at international operations
	∎	Comprehensive near-mine exploration programmes in place
	∎	Mergers and acquisitions strategy to identify opportunities, such as the Asanko joint venture (JV) in 2018
	∎	Damang Reinvestment progressing ahead of plan, and Gruyere commissioning planned for mid-2019 Salares Norte project feasibility study completed

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	Safety and health of our employees
	∎	Establishment of the Group Safety Leadership forum in 2018
	∎	Courageous Safety Leadership programme to be rolled out throughout the Group during 2019
	∎	Behaviour-based safety and visible-felt leadership programmes ongoing in all regions
	∎	All operations certified to OHSAS 18001 standard, converting to ISO 45001
	∎	Independent verification of critical controls identified in the ICMM critical control management programme during 2019
	Water pollution, supply and cost
	∎	Strict and focused compliance with environmental management regulations
	∎	All operations ISO 14001 certified
	∎	Water management plans expanded to include post-closure water management
	∎	Water recycle, reuse and conservation practices in place in all regions, and targets set for 2019
	Attraction and retention of skills
	∎	Fit-for-purpose regional and mine human resource (HR) structures to meet operational requirements
	∎	HR strategy focused on developing a high-performance culture
	∎	Succession planning and talent review systems in place at mine, regional and Group level
	∎	Building line leader capabilities to enable strategic and operational focus and key deliverables
	Cost of energy and security of power supply
	∎	Implementation of the integrated energy and carbon management strategy
	∎	Solar microgrid system advanced at Granny Smith, and signed agreement for a hybrid solution at Agnew
	∎	Review of South Deep solar photovoltaic project
	∎	Oil price hedges in place in Australia and Ghana, ending in 2022
	Cybercrime / Loss of ICT data
	∎	South Deep, corporate and regional offices ISO 27001 certified, with certification of all outstanding operations planned for 2019
	∎	Cyber security maturity assessment conducted and areas for continual improvement identified
	∎	Ongoing attack and penetration testing
	Impact on social licence to operate
	∎	Growth opportunities in stable mining destinations – Damang, Gruyere and Salares Norte
	∎	Enhanced stakeholder engagement planned for 2019
	∎	Strengthen stakeholder engagement strategy to deal with Native Title issues in Australia
	∎	Ongoing community investment and Shared Value projects in Ghana, Peru and South Africa
	Failure to implement climate adaptation measures
	∎	Comprehensive climate change risk assessment conducted at all mines with remedial action plans being implemented
	∎	Alignment of financial and operational disclosures to the Task Force on Climate-related Financial Disclosures (TCFD)
	∎	Evaluating 20% renewable energy options for new project in Chile

	Increased geotechnical underground risks
	∎	Implementation of the recommendations by the external Geotechnical Review Board (GRB) at South Deep is ongoing
	∎	Enhanced ground and secondary support to mitigate against rock bursts
	∎	GRB work extended in 2018 to all Australian operations to mitigate the effects of seismicity
	Increased surface open pit geotechnical risks
	∎	GRB work to be undertaken for all major project and pit cutbacks
	∎	Real time continuous pit wall monitoring at Damang
	∎	Upgrading hydro-geological monitoring at the Cerro Corona pit to enhance pit wall stability
	Tailings dam failure
	∎	Gold Fields’ tailings storage facilities (TSFs) aligned with and assured against the ICMM position statement
	∎	Increased governance of TSFs at Company and Board level
	∎	Accelerated dam break assessments, design code compliances and updated emergency response procedures implemented
	High debt levels
	∎	Ongoing sale of non-core investments
	∎	Extensions for maturity dates on revolving credit facilities
	∎	Regular engagements with credit rating agencies and financial institutions
	∎	Cash generation from operations to be used to pay down debt
	∎	New bond offering under review
	Political uncertainty in jurisdictions where we operate
	∎	Continued geographic de-risking towards mining jurisdictions in which we operate
	∎	Enhanced stakeholder engagement planned in 2019 with key stakeholders, particularly governments and communities
	∎	Engaging governments directly and indirectly through industry associations
	Fraud and breach of the Code of Conduct
	∎	Rigorous oversight through Board and the Social, Ethics and Transformation Committee
	∎	Compliance with corporate governance codes and regular reviews
	∎	Global training programme conducted on relevant legislation
	∎	Screening of suppliers and contractors for pre-defined risks
	Failure to modernise operations
	∎	Real-time monitoring solutions that track movement of equipment, people and production
	∎	CEO Young Persons Team established to align with latest digital and social media trends
	∎	Programme in place for cooperation between original equipment manufacturers, suppliers and ourselves
	∎	Innovation and technology (I&T) strategy implementation to work towards Gold Fields Mine of the Future
	Ezulwini (neighbouring mine) re-watering impact on South Deep
	∎	Planned maintenance and monitoring programme of reinforced concrete water plugs between the two mines
	∎	Participation in Ezulwini closure regulatory processes backed by legal strategy
	∎	Development of alternative solutions to utilise mine water

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12 The Gold Fields Integrated Annual Report 2018

Risks and materiality continued

Top five risks and opportunities per region in 2018

Americas

region

	RISK/OPPORTUNITY AND MITIGATING ACTIONS
	Life-of-mine extension at Cerro Corona
	∎	Accelerate mining and stockpiling to facilitate early in-pit tailings
	∎	Pre-feasibility study for 2030 life-of-mine extension finalised, and feasibility study to be completed in 2019
	Salares Norte project, Chile – Potential delay in Environmental Impact Assessment (EIA) approval
	∎	Close interaction with the authorities and building sound relations in terms of baseline studies
	∎	Assurance of project information, engineering design, scope and timetable
	∎	Proactive and timely community engagement programme
	Lower copper and gold grades
	∎	Continuous monitoring of grade reconciliation
	∎	Drilling programme to target deeper ore resources
	∎	Additional stockpile build-up to reduce risk of ore shortages due to higher cut-off grade
	Increasing hardness of ore impacting processing throughput
	∎	Ongoing blasting engineering project to optimise ore fragmentation
	∎	Implementation of optimisation projects in the process facility to deal with increased hardness
	Local social pressures, conflicts and community expectations
	∎	Proactive community and stakeholder relationships and engagement
	∎	Crisis management plans to deal with potential conflict
	∎	Stringent follow-up and feedback on all community commitments
	∎	Involvement of government authorities in our social projects

Australia

region

	RISKS/OPPORTUNITY AND MITIGATING ACTIONS
	Reserve life
	∎	Commissioning of the Gruyere project planned for mid-2019
	∎	Significant near-mine exploration to delineate further reserves
	∎	Accelerating exploration intervention at Agnew
	∎	Acquisition of JV ground near St Ives and assessing toll-treatment options
	Gruyere project delivery
	∎	Stronger management team appointed at the construction contractor
	∎	Increased room capacity at onsite camp facility to facilitate larger labour component
	∎	Night shift implementation
	∎	Stricter expenditure approval process
	Turnover of key personnel
	∎	Review and enhancement of employee development programmes
	∎	Flexible working arrangement to facilitate greater work-life balance
	∎	Market-related salary increases
	∎	Quarterly talent discussions held at leadership level
	Volatility of Australian gold price
	∎	Ongoing portfolio of business improvement projects
	∎	Continued focus on cost controls
	∎	Hedges in place for gold, currency and oil
	Native title legislation
	∎	Stakeholder engagement strategies and programmes in place
	∎	Extend business opportunities and job placement to Indigenous groupings, where feasible
	∎	Finalisation of a holistic strategy for Indigenous Engagement
	∎	Development of a Reconciliation Action Plan
	∎	Ongoing legal and specialist support

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West Africa

region

	RISKS/OPPORTUNITY AND MITIGATING ACTIONS
	Fiscal and government policy changes
	∎	Frequent engagement with relevant government departments
	∎	Intensive engagement via the Chamber of Mines
	∎	Ensure adherence to principles and conditions in the Development Agreement (DA)
	∎	Back-up legal strategies
	Under-performance of contractor mining at Tarkwa
	∎	Updating and monitoring key contract milestones
	∎	Implementation of continuous improvement initiatives
	∎	Dedicated team to address and mitigate shortfalls in contractor performance
	Execution of Damang mine Reinvestment project
	∎	Implementation and delivery of milestones under the reinvestment plan
	∎	Fit-for-purpose organisational structure and continuous improvement initiatives
	∎	Ongoing monitoring of contract mining milestones
	∎	Pit-wall control implementation
	Reserve depletion at Tarkwa – inadequate organic growth and life-of-mine extension
	∎	Bringing the Asanko JV ounces to account and aligning processes and systems
	∎	Continued brownfields exploration to test for further potential at Tarkwa
	∎	I&T programme to improve operational and processing efficiencies
	∎	Ensure utilisation of DA benefits for long-term exploration potential
	Optimisation of Independent Power Producer (IPP) arrangements
	∎	Continuous monitoring of IPP performance
	∎	Full commissioning and expansion of power plants at both Damang and Tarkwa
	∎	Completion of the gas pipeline to supply plants with natural gas replacing the road trucked liquid gas

South Africa

region

	RISKS/OPPORTUNITY AND MITIGATING ACTIONS
	Loss of investor confidence due to non-achievement of the business plan
	∎	South Deep workforce has been restructured through the Section 189 process – ensure the right people in the right roles
	∎	Frontline leadership, productivity and ways of working intervention
	∎	Effective and sustainable management operating system
	∎	Identify business improvement initiatives and drive implementation
	∎	Improvement of fleet reliability and utilisation
	∎	Adaptation to Eskom supply constraints and developing longer-term strategies for power self-sufficiency
	Poorly defined execution strategy
	∎	Develop and roll out key visual control standards
	∎	Organisational restructuring frontline coaching
	∎	Implementation of a business improvement process
	∎	Improved fleet utilisation
	∎	Ore pass/tip/discharge chute rehabilitation
	∎	Roadway and footwall (water) management
	Inappropriate organisational structure
	∎	Embed new HR structure
	∎	Fit-for-purpose organisational structures with the right people in the right roles
	∎	Robust talent management system
	∎	Identity, develop and recruit successor for critical roles
	Ageing infrastructure
	∎	Replacing ageing infrastructure based on an inventory of our assets
	∎	Utilise South Shaft for mining services only to enable extended maintenance
	∎	Implementing infrastructure and maintenance improvement projects
	∎	Independent risk engineering audit conducted on infrastructure and fire risks with a five-year remedial action plan developed
	Health and safety of our employees
	∎	Roll out and effective monitoring of the safety management systems
	∎	Implementing behaviour-based safety programmes and the Courageous Leadership programme
	∎	Effective baseline risk management process identifying major unwanted events and verification of effective critical controls
	∎	Strengthen systems for effective reduction of dust and noise exposure levels
	∎	Implementation of South African mining industry’s occupational safety and health initiatives

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14 The Gold Fields Integrated Annual Report 2018

Performance against strategic targets

Group 2018 performance against BSC objectives

Our strategy is embodied through our Board-approved balanced scorecard (BSC), which is cascaded throughout our organisation. Below we reflect on our performance against these targets in 2018. On the pages that follow, we show our CEO’s performance against his 2018 targets, as well as the Group’s 2019 BSC.

¹ At 2019 levels

² FCF does not take project capital into account

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PERFORMANCE AGAINST 2018 BALANCED SCORECARD TARGETS

	∎	Production and AIC/oz better than yearly guidance with spatial compliance to plan			pg 56
	∎	No fatalities and a reduction in TRIFR by 10% in the long term (due to a regression in 2017, the stretch target was 12% for 2018)			pg 63
	∎	Reduce energy usage by 5% to 10% against a future baseline through energy saving initiatives and implement renewable energy initiative at South Deep			pg 70
	∎	Implement ICMM critical control guidelines on safety, health and environmental stewardship and stakeholder management			pg 64
	∎	Project delivery: deliver in accordance with key metrics for 2018
		–	Damang		pg 48
		–	South Deep		pg 46
		–	Gruyere		pg 44
	∎	Manage talent pipeline and succession cover for critical roles			pg 76
	∎	Reinvigorate vision and values to a winning culture that rewards teamwork and delivery of Group strategy
	∎	Pay dividends in line with policy			pg 87
	∎	Debt:
		–	Maintain net debt: adjusted EBITDA ratio of under 1.25x-		pg 87
		–	Extend debt maturity		pg 87
	∎	All new capital spend to have appropriate returns taking into account risks and cost of capital ranked and prioritised in accordance with an agreed matrix and in line with internal capital control standards and study guidelines. Accordingly all growth capital expenditure on existing mines, new projects or acquisitions to have hurdle rates of 15% at a US$1,300/oz gold price
	∎	Deliver life extension, cost reduction, revenue enhancement and improved health and safety through innovation and technology (I&T) and business improvement initiatives			pg 74
	∎	Reduce Group life-of-mine AIC/oz and increase reserve life per region through brownfields exploration, M&A and optimisation of existing mines			pg 50
	∎	Deliver positive Salares Norte feasibility project that exceeds metrics set for the project			pg 47
	∎	Mine closure costs, along with concurrent rehabilitation plans, incorporated into strategic plans			pg 105
	∎	Improve total shareholder return by positioning share price between median and upper quartile of peer group			pg 106
	∎	Increase the proportion of sustainable host community procurement and employment to drive Shared Value			pg 111
	∎	No Level 3 or above environmental incidents and a 10% reduction in Level 2 incidents			pg 95
	∎	Align management practices with ICMM tailings and water position statements			pg 100
	∎	Deliver and manage a robust and transparent group governance and compliance programme			pg 23
	∎	Maintain position in top five of the Dow Jones Sustainability Index (DJSI)

Performance key:      Achieved          Ongoing          Not achieved

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Performance against strategic targets continued

CEO’s 2018 performance against BSC objectives

Gold Fields recognises that remuneration is a critical part of value creation. We are committed to aligning our employees’ remuneration to our strategic objectives, as embodied in our Group BSC. The Group BSC is then cascaded into individual scorecards, to ensure individual effort drives Group performance. Below is a summary of our CEO, Nick Holland’s, BSC for 2018 and his performance against it. His average score for 2018 was 2.9 out of 5, as evaluated by the Remuneration Committee. The Board believes that by reflecting on the CEO’s scorecard and how it drives value creation, we demonstrate to our stakeholders our commitment to fair and transparent reporting. For the detailed breakdown of the CEO’s BSC, refer to our comprehensive Remuneration Report in the AFR p44 – 46.

PERFORMANCE RATING SCALE:				CATEGORY KEY:
1	/ Target not achieved	3.5	/ Great performance	Safe Operational Delivery
	(less than 60% of goals achieved)		(106% - 110% of goals achieved)	Portfolio Management
2	/ Underperformance	4	/ High performance	Licence and Reputation
	(60% - 90% of goals achieved)		(111% - 120% of goals achieved)	Capital Discipline
2.5	/ Development required	4.5	/ Top performance
	(91% - 99% of goals achieved)		(121% -125% of goals achieved)
3	/ Good performance	5	/ Exceptional performance
	(100% - 105% of goals achieved)		(126% or more of goals achieved)

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Group 2019 performance targets

Each year, management and the Board assess the Group’s key objectives for the year ahead to ensure the Group achieves its medium-term target. The 2019 goals are captured in the BSC below.

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The Gold Fields Integrated Annual Report 2018        19
Leadership
Our vision of being the global leader in sustainable gold mining requires the highest levels of corporate governance to ensure we create value for our stakeholders over the short, medium and long term. In order to ensure our ultimate operational and strategic success, as well as our sustainability, we remain committed to sound and robust corporate governance and responsible corporate citizenship.
	Vision of the Chairperson	p20
	Summarised governance and compliance report	p23
	Our Board of Directors	p24
	CEO Report	p29
	∎  Introduction and overview	p30
	∎  Group performance scorecard	p31
	∎  Strategy overview	p38
	∎  Note of thanks	p39

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20 The Gold Fields Integrated Annual Report 2018

Vision of the Chairperson

Many of our stakeholders, particularly investors, still see Gold Fields as a South African mining company, with much of its fortunes inextricably linked to the country’s current and future mining landscape, as well as the short-term performance and outlook for South Deep, our sole remaining mine in the country. We are a proudly South African company with a history going back to 1887 and remain deeply committed to the country despite the political and economic uncertainties currently besetting it. While South Deep is a key component of our portfolio, I continue to stress that Gold Fields is a global gold mining company with a portfolio of assets spread across three continents.   Not only are our production and cash-flow already heavily weighted towards our mines in Australia, Peru and Ghana, we have increased our investment in these countries to enhance sustainability of our business: ∎  Our combined US$502m investment over the past two years in the Damang mine in Ghana and the Gruyere project in Australia is set to bear fruit in 2019, with the potential to further boost our production and profitability in these regions ∎  During 2018, we acquired a 45% stake in the highly prospective Asanko gold mine (AGM) in Ghana, further raising our profile in a jurisdiction in which we have operated for 25 years ∎  We expect the production of our portfolio in Australia, Ghana and Peru to approach 2Moz during 2019. Based upon our attributable gold-equivalent Mineral Reserves of over 20Moz in these regions, our track record of resource conversion and exploration activity, we believe that our global portfolio outside of South Africa will be able to maintain a similar production level over the medium to longer term (at the current gold price)  ∎  We have successfully completed a feasibility study for the Salares Norte project in Chile and declared a maiden Mineral Reserve. While we await the outcome of the Environmental Impact Assessment (EIA), expected in early 2020, we have also asked management to develop a funding plan for the project ∎  We have extended the life of our Cerro Corona mine in Peru to 2030 and are working on a scoping study with the aim of extending it further to 2040 ∎  Our substantial investments in near-mine exploration at our Australian mines continued to yield good results, with the mines not only making up annual depletion but adding net Mineral Reserves over the past four years ∎  Until two years ago, just over 70% of our Reserves were held by South Deep. That profile has changed: at end 2018, 59% of the Group’s attributable Mineral Reserves were at the mine   I believe that these developments clearly underscore Gold Fields’ strong and sustainable global profile.   Turning to South Deep, I fully appreciate the frustration experienced by our shareholders over the past few years. We failed to deliver the rebase plan in 2018, as it became evident that South Deep would not achieve the targets set out in the plan and continued to experience cash losses that averaged R100m (US$8m) a month.   With the full backing of the Board, the mine embarked on a fundamental restructuring in Q3 2018, which saw management close loss-making areas, reduce the cost base and embark on a section 189 retrenchment process. Unfortunately, this meant that we had to retrench just over 1,500 employees and contractors, despite the strong opposition by the unions, which led to a 45-day strike. We could not yield to the demands of the unions to reverse the retrenchments, as this would have put the sustainability of South Deep, and the remaining 3,500 jobs, at risk.   I believe that the restructuring, the most comprehensive in South Deep’s history, will achieve a significant reduction in the cash losses this year and set the mine up for long-term and sustainable growth. However, the Board has also mandated management to investigate alternative options should it fail to deliver its key targets over the next year.   Gold Fields’ mines performed well against a background of a volatile gold price and heavy investment in growth projects during 2018. All mines, except South Deep, met, or improved on, their production and cost guidance and generated sufficient cash to fund the bulk of the investment spend and pay a modest dividend to shareholders. We had to increase our debt to pay for the acquisition of Asanko Gold but, notwithstanding this, our balance sheet remained in good health.   Not only has the cash generated by our mines enabled us to invest in future growth, but also to create significant value for our key stakeholders. During 2018, Gold Fields’ total value distribution to our stakeholders was US$2.7bn in the form of payments to governments, capital providers, business suppliers and our workforce.   A particular focus in 2018 was strengthening our relations with host communities, whose partnership is critical in sustaining our mines. We have asked management to focus on host community employment and procurement, to improve the economic wellbeing of these communities. During 2018, almost a quarter of our total value creation,

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22 The Gold Fields Integrated Annual Report 2018

Vision of the Chairperson continued

almost US$700m, remained in our host communities through focused job creation and procurement.

Stakeholder engagement and relations remain a critical issue for the Board. As a foundation, we want to develop honest, mutually beneficial partnerships with these stakeholders and, by and large, have found ways to achieve this. In return though, we would expect governments and trade unions, in particular, to work with us to ensure that our mines can continue to operate sustainably.

During 2018, the major trade unions at our Ghanaian and South African operations resisted the restructurings we believed were essential to ensure the longevity and profitability of our Tarkwa and South Deep mines. While we eventually implemented contractor mining at Tarkwa and retrenchments at South Deep, we need to re-establish common ground with our union partners.

Resource nationalism is growing in many major mining jurisdictions. This presents a significant challenge for Gold Fields as we seek to expand our operations in some of these jurisdictions. In South Africa, a new Mining Charter was finally agreed in mid-2018. It is a significant improvement on previous iterations. There are, however, critical areas with which Gold Fields and the industry has deep concerns, namely that the Charter does not fully recognise the black economic empowerment (BEE) ownership credentials of previous BEE transactions. This is the case in respect of mining right renewals and transfers of these rights. To be frank, this is a non-negotiable for the mining sector and will require more engagement between the Minerals Council of South Africa and the Department of Mineral Resources (DMR). The 2018 Charter will also

require significant investment in employment equity, procurement and enterprise development, and human resource development.

The mining regimes in Peru, Ghana and Australia remain largely stable. Overall though, we would welcome a more proactive approach by governments, such as the one adopted by the Ghanaian government – which has entered into development agreements (DAs) with large mining companies that actively encourage investments.

Most importantly, the Board shares management’s commitment to eliminate all fatalities and serious injuries. It is therefore a major disappointment that we experienced a fatality during 2018. I want to express my sincerest condolences to the family, friends and colleagues of Ananias Mosololi, a load haul dump truck operator at South Deep.

Gold Fields continues to show significant progress in improving our safety performance and management practices. During 2018, the fatality rate, the benchmark total recordable injury frequency rate (TRIFR) and the total number of recordable injuries continued their overall improvements of the past few years. At 1.83 incidents per million hours worked, the Gold Fields 2018 TRIFR has improved by 55% since 2014.

On the health front, the Occupational Lung Disease Working Group, representing the majority of gold mining companies in South Africa, including Gold Fields, reached a historic settlement with attorneys representing ex-mineworkers suffering from silicosis and tuberculosis (TB). The settlement, once approved by the courts, is set to see R5bn (US$380m) dedicated to compensating ex-mine workers.

Appreciation

As directors of this Company, one of our key responsibilities is to ensure that the global corporate governance programmes at Gold Fields are in line with the ever-changing and more stringent standards expected from multinational companies. I take enormous comfort in the fact that our Board of Directors comprises a team of dedicated and able men and women whose experience, knowledge and commitment makes my task as Chairperson so much easier.

The composition of this team was strengthened during 2018 with the addition of Phuti Mahanyele-Dabengwa to the Board. Phuti took over from Don Ncube, who was on Gold Fields’ Board for over 11 years. Don left a considerable mark at Gold Fields in terms of the transformation of the Company, improved relationships with our host communities and, most recently, as Chairperson of the Social, Ethics and Transformation (SET) Committee. His experience, counsel, humour and friendship will be missed.

Gold Fields had to contend with difficult economic and operational circumstances during 2018. The continued operational, financial and sustainability progress made by the Company in these conditions is a credit to the hard work and dedication of its employees, led by CEO Nick Holland and his executive management team. On behalf of the Board, I would like to express my gratitude to Nick and his team around the globe and wish them strength for their endeavours in the year ahead.

Cheryl Carolus

Chairperson

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The Gold Fields Integrated Annual Report 2018	23

Summarised corporate governance

Corporate governance overview

Strong leadership and good governance support the achievement of our vision to be the global leader in sustainable gold mining. By protecting and enhancing our reputation and licence to operate, and ensuring compliance with legislation and industry standards, good governance ensures we continue to enjoy the support of stakeholders and allows us to deliver sustained value. The long-term, capital-intensive nature of our mining operations, as well as the often challenging social and political contexts in which we operate, make it even more important that we leverage good governance to ensure the long-term sustainability of our business.

In addition to the international standards and guidelines to which we voluntarily subscribe (outlined on p3 of the Annual Financial Report (AFR)), we are committed to entrenching the principles of the King IV Report on Corporate Governance (King IV) in our operations. The application of King IV within the Company can be found in the full corporate governance report on p15 – 16 of the AFR.

KEY DELIBERATIONS AND DECISIONS TAKEN BY THE BOARD

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Our Board of Directors

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The Gold Fields Integrated Annual Report 2018	25

    1.  Cheryl Carolus (60) Chairperson BA Law; Bachelor of Education, University of the Western Cape; Honorary Doctorate in Law, University of Cape Town Appointed to the Board: Director 2009, Chairperson 2013   2.  Richard Menell (63) Deputy Chairperson MA (Natural Sciences Geology), Cambridge; MSc (Mineral Exploration and Management), Stanford University, California Appointed to the Board: 2008, Deputy Chairperson 2015, Lead Independent Director 2017   3.  Terence Goodlace (59) Independent non-executive director MBA (Business Administration), University of Wales; BCom, University of South Africa; NHDip (Metalliferous Mining), Witwatersrand Technikon; MDP, University of Cape Town Appointed to the Board: 2016   4.  Phuti Mahanyele-Dabengwa (48) Independent non-executive director Executive Development Programme, Kennedy School of Government, Harvard University, US; MA Business Administration, De Montford University, Leicester, UK; BA Economics, The State University of New Jersey, US Appointed to the Board: 2018   5.  Paul Schmidt (51) Chief Finance Officer BCom; University of the Witwatersrand; BCompt (Hons), University of South Africa; CA(SA) Appointed to the Board: 2009   6.  Carmen Letton (53) Independent non-executive director PhD (Mineral Economics, University of Queensland; Bachelor Mining Engineering, WASM Appointed to the Board: 2017   7.   Steven Reid (63) Independent non-executive director BSc (Mineral Engineering), South Australian Institute of Technology; MBA, Trium Global Executive, ICD.D, Institute of Corporate Directors Appointed to the Board: 2016   8.   Alhassan Andani (57) Independent non-executive director BSc (Agriculture), University of Ghana; MA (Banking and Finance), Finafrica Institute in Italy Appointed to the Board: 2016   9.  Peter Bacchus (50) Independent non-executive director MA (Economics), Cambridge University Appointed to the Board: 2016   10. Nick Holland (60) Chief Executive Officer BCom; BAcc, University of the Witwatersrand; CA(SA) Appointed to the Board: Executive director, 1998 CEO, 2008   11. Yunus Suleman (61) Independent non-executive director BCom, University of KwaZulu-Natal; BCompt (Hons), University of South Africa; CA(SA) Appointed to the Board: 2016

Board diversity	Board independence	Board tenure
Experience
		Nationalities:

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26 The Gold Fields Integrated Annual Report 2018

Governance

THE BOARD AND ITS SUB-COMMITTEES (as at March 2019)

The Board of Directors

Meets four times per year

As the highest governing authority of the Group, the Board offers guidance and oversight that allows the Company to achieve its strategic objectives and deliver maximum value for stakeholders. It comprises a diverse group of competent and appropriately skilled and experienced individuals who seek to govern with integrity, responsibility, accountability, fairness and transparency. This informs the manner in which it leads to set the ethical tone of the Company. It delegates to management the responsibility of the implementation of and adherence to the Gold Fields Code of Conduct and the Company’s values, and monitors how a culture of ethics is being managed.

Audit Committee

Meets six times per year

Members: Rick Menell, Alhassan Andani, Peter Bacchus

The Audit Committee oversees the integrity and transparency of Gold Fields’ corporate reporting, and considers risks that may affect the integrity of external reports.

Remuneration Committee

Meets four times per year

Members: Cheryl Carolus, Alhassan Andani, Rick Menell, Peter Bacchus

The Remuneration Committee assists the Board in confirming that remuneration throughout the Group is fair and equitable and that the remuneration of executive management, in particular, is directly linked to Gold Fields’ performance against strategic objectives. This protects the interests of stakeholders by incentivising management to deliver value.

Social, Ethics and Transformation

Committee

Meets four times per year

Members: Cheryl Carolus, Rick Menell, Alhassan Andani, Nick Holland, Phuti Mahanyele-Dabengwa

This committee guides corporate behaviour and holds the Company accountable for conducting business ethically in line with the principles of good corporate citizenship. With a central focus on how the business interacts with communities and employees, it helps the business to retain its social licence to operate – a critical component of long-term sustainability.

Capital Projects, Control and

Review Committee

Meets four times per year

Members: Peter Bacchus, Terence Goodlace, Yunus Suleman, Steven Reid, Cheryl Carolus, Phuti Mahanyele-Dabengwa, Carmen Letton

This committee considers new capital projects and satisfies the Board that the Group has used correct, efficient methodologies in evaluating and implementing such projects.

Safety, Health and Sustainable

Development Committee

Meets four times per year

Members: Cheryl Carolus, Rick Menell, Steven Reid, Carmen Letton, Phuti Mahanyele-Dabengwa

The SHSD Committee seeks to ensure that Gold Fields complies with relevant laws, regulations and external standards to ensure optimal safety, health and environmental practices, contributing to the Group’s reputation as a responsible corporate citizen.

Risk Committee

Meets twice per year

Members: Terence Goodlace, Carmen Letton, Yunus Suleman

The Risk Committee assists the Board in developing improved risk management approaches, ensuring consistent value creation for our stakeholders in an ever-changing risk environment.

Nominating and Governance Committee

Meets four times per year

Members: Steven Reid, Rick Menell, Yunus Suleman

This committee plays a leadership role in the structure and operation of Gold Fields’ Board, and guides the Company’s corporate governance – ensuring an ethical and value-driven culture.

Ad-hoc Investment Committee

Members: Alhassan Andani, Yunus Suleman, Steven Reid, Cheryl Carolus, Rick Menell

This committee makes recommendations to the Board on strategic restructuring options for the Group, as and when required.

Our Group Executive Committee (Exco)

The Group Exco is primarily responsible for the implementation of Gold Fields’ strategy, as well as carrying out the Board’s mandate and directives.

Exco meets on a regular basis to review Company performance against set objectives and develops strategy and policy proposals for consideration by the Board. It also assists the Board in the execution of the Company’s disclosure obligations.

Exco consists of the principal officers and executive directors of Gold Fields – 12 members in total.

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BOARD OVERSIGHT OF KEY ISSUES PERTAINING TO OUR BUSINESS

Building an ethical culture As the highest governing authority of the Group, the Board is responsible for upholding an ethos of good governance and sustainability. It sets the tone for a culture of ethics that permeates throughout the Company. This underpins Gold Fields’ commitment to going beyond compliance requirements, and voluntarily embracing best practice standards and principles. The Board also seeks to ensure that business decisions are made with reasonable care, skill and diligence. This protects and enhances the Company’s reputation and helps to maintain its licence to operate – a fundamental foundation of sustainability.				Setting fair remuneration In determining remuneration principles, the Board is guided by the principles of King IV. The remuneration policy (outlined on p79) includes detailed and specific disclosures on implementation. Gold Fields provides stakeholders with transparent reporting of the remuneration of the CEO and CFO. The Board seeks to ensure that remuneration of executives is fair, equitable and responsible, and informed by the value added by the Exco through the achievement of strategic objectives. Through the Remuneration Committee, the Board ensures that remuneration practices align with shareholder interests and support the achievement of a sustainable business by: ∎   Helping to attract, motivate, retain and reward employees ∎   Driving the achievement of strategic objectives through appropriate incentives and rewards ∎   Promoting a culture of ethics and responsible corporate citizenship
Creating a safe working environment Our Board’s commitment to safety and health as our key 4 priority reflects the imperative of minimising any potential negative impact on our employees and contractors, maintaining operational continuity and protecting our reputation. The Board, together with management, drives a stringent safety culture. In upholding our primary value, ”If we cannot mine safely, we will not mine”, the Board also backs management in stopping mining in areas or situations that are deemed unsafe. In discharging its oversight responsibilities with regard to safety, the Board is assisted by the SHSD Committee, which receives detailed quarterly reporting on all safety issues and incidents. The Board also oversees Gold Fields’ adherence to safety, health and environmental standards and compliance requirements, and has approved the Company’s adoption of various voluntary best practice safety principles.
				Stakeholder relationships and engagement Gold Fields understands that stakeholders are an integral part of our business, representing a wide range of interests that both influence and are impacted by our operations. The Board, through the adoption of the Stakeholder Relationship and Engagement Policy, seeks to ensure that the Company follows a stakeholder engagement approach that allows for participative and informed decision making. By overseeing transparent reporting, it allows stakeholder groups to make an informed assessment of Gold Fields’ ability to deliver sustainable value. As stakeholder concerns have become increasingly important to Gold Fields’ sustainability, the Board has driven an evolution from simple stakeholder management to inclusive stakeholder engagement and relationship building. This approach balances the interests, needs and expectations of our stakeholder with the best interests of Gold Fields.
Environmental and stewardship impact on communities The Board seeks to ensure that Gold Fields conducts business in a way that aligns with good corporate citizenship, and that we continually assess and respond to any negative impacts our operations may have on communities and the environment. The importance of these issues informed the Board’s establishment of a dedicated SET Committee in 2015. The committee focuses on, among others, our impact on communities, while the SHSD Committee deals with, inter alia, issues of environmental stewardship. For more information on our environmental stewardship and how we interact with communities, refer to p95 – 124.
		Strategy to deliver long-term value and sustainability The Board is independent and delegates responsibility for the development and implementation of the strategy to the Group Exco. However, the Board nevertheless has a deep understanding of and approves the strategic goals and direction of the Company. When reviewing the strategy, it considers the business’ risks and opportunities and how these might impact the achievement of objectives. In so doing it aims to ensure that the strategy drives a sustainable business agenda and considers the interests of stakeholders. Exco presents the Company strategy, business plans and risk register to the Board on an annual basis for input and approval. The Board also agrees performance targets with management. The CEO provides the Board with monthly reports on, among others, performance against strategic and operational targets. This input allows the Board to effectively monitor the implementation of strategy. Board members perform onsite visits to our operations and projects, and on occasion interact with individual executives on strategic and operational performance.
Regulatory environment We seek to comply with all relevant laws and regulations, as well as the highest levels of corporate governance, and often our governance practices exceed the legal minimum. As such, corporate governance systems and frameworks at Gold Fields are reviewed constantly to align with the ever-changing and increasingly stringent standards that are being rolled out by regulators.
		Innovation and Technology (I&T) Gold Fields recognises the importance of implementing I&T to secure the sustainability of our operations. Doing so is expected to deliver higher production, greater efficiencies, improved safety and a decrease in the potential negative impact on the environment and communities. In line with the requirements of King IV, the Board has approved an I&T strategy that is set to further the achievement of Gold Fields’ Group strategy.

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Summarised corporate governance

Ensuring we do business ethically

THE STRUCTURES AND MECHANISMS USED TO DRIVE ETHICAL BUSINESS PRACTICE

Our business is built on the foundation of ethics, which informs a culture of integrity and transparent reporting to our stakeholders. This foundation assists us in ensuring that we build trust, strengthen our reputation and create value for all our stakeholders. The Board and its committees set the ethical tone for the business. We use various mechanisms to confirm ethical behaviour, compliance and good governance in the business:

  Assesses the legal risks facing the Company and mitigates these by enacting effective policies, procedures and controls.   During 2018, we: ∎  Enhanced the regulatory risk profile process to incorporate the review and assessment of all applicable and adopted, non-binding rules, codes and standards (RCS) per country ∎  Developed an online regulatory and RCS risk dashboard for the Group ∎  Recorded an Annual Compliance Index per region and for the Group ∎  Confirmed alignment with the Internal Audit Plan ∎  Screened 100% of all new and existing suppliers and contractors for a range of pre-defined risk categories, including human rights and related violations   The Risk Committee reports our key business risks to the Board on a biannual basis. The Board aims for effective controls and corrective measures are in place to manage and mitigate these risks. Furthermore, the Audit Committee seeks to ensure the integrity, accuracy, and adequacy of accounting records.   Internal Audit assesses that the internal controls in place are working to mitigate potential risks. This takes place in all regions on a quarterly basis and operations are given an audit ranking. Corrective measures are put in place where necessary.   External Audit provides the integrity, accuracy and adequacy of accounting records and corporate reporting. During 2018 we contracted PricewaterhouseCoopers as our new auditors from 2019 onwards, following our standard tender process. KPMG had been our auditors since 2010.   For more information on our Risk and Audit committees, refer to the full Governance Report in the Annual Financial Report.     We support the development of an ethical and impactful industry, one that goes beyond a compliance-based approach. Gold Fields is aligned to both international and local best practices, which underpin our commitment to responsible corporate citizenship. We are committed to and guided by: ∎  The legislation and regulations of the countries in which we operate ∎  The requirements of the stock exchanges on which we are listed ∎  The United Nations (UN) Guiding Principles on Business and Human Rights ∎  The ICMM 10 Principles on Sustainable Development ∎  The 10 Principles of the UN Global Compact ∎  King IV ∎  UN Convention Against Corruption ∎  OECD Convention on Combating Bribery ∎  Extractive Industry Transparency Initiative ∎  World Gold Council – Conflict Free Gold Standard ∎  Voluntary Principles on Security and Human Rights   During 2018, we also committed to the Task Force on Climate-related Financial Disclosures (TCFD).

Code of Conduct
	Our Code of Conduct is informed by the Gold Fields values and underpins the way we conduct ourselves, from our operations to our Board. It also extends to our supply chain business partners. The Code of Conduct was updated in 2017 and distributed to all existing employees, while all new employees receive it during their onboarding. As at end 2018, 66% of our people had undergone training on the Code of Conduct. An anonymous Tip-Offs hotline is permanently in operation, and the Company takes a zero tolerance approach to intimidation and victimisation of those who report incidents.
	Key principles of our Code of Conduct: ∎  Emphasis on ethical leadership within the organisation in addition to ethical management ∎  Protection of employee and third-party whistle-blowers, promoting an environment for reporting of Code of Conduct transgressions ∎  Safeguarding the business against potential reputational harm and litigation ∎  Transparent and ethical dealings with government and suppliers ∎  Protection of company information ∎  Accurate and transparent reporting ∎  Safeguarding against insider trading

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CEO Report

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Introduction and overview

Dear stakeholders 2018 marked the second year of the reinvestment programme embarked on by Gold Fields at the end of 2016. The key motivation behind the investment focus is to ensure that our portfolio of mines continues to generate cash sustainably into the foreseeable future, while at the same time lowering our costs and extending mine life.   Having spent total project capital of US$502m over the past two years, primarily on Damang and Gruyere, Gold Fields is now well placed to maintain a production profile of near to 2Moz a year at our international operations in Australia, Ghana and the Americas over the medium to long term. This is based on current gold price levels, our attributable gold Mineral Reserves of 20Moz in these regions as well as our track record of Resource conversion and exploration activities.   The 2Moz milestone is expected to be reached for the first time in 2019 as Damang and Gruyere are set to come into production and our Asanko joint venture (JV) in Ghana contributes for the full year. The longer-term future of this portfolio also looks positive as we continue to invest in near-mine exploration at our Australian mines, while the Board has approved a maiden Mineral Reserve and the technical components of the feasibility study for the Salares Norte project in Chile.   The globalisation of our portfolio has also been evident in a gradual shift in our Mineral Reserve exposure. Until two years ago, just over 70% of our Reserves were held by South Deep. That profile has changed: of our total gold-equivalent Mineral Reserves of 50.9Moz in December 2018 (December 2017: 53.1Moz), 41% are now outside South Africa.   One of the key benefits of the reinvestment programme over the past two years is the expected reduction in Group All-in Costs (AIC) to approximately US$900/oz, a level which we feel is required to be competitive on a global scale. As the quality of the portfolio improves and our cost profile starts to decline, we expect an improved free cash-flow (FCF) margin. For 2019, therefore, we have adjusted our target to a FCF margin of 15% at a gold price of US$1,200/oz (previously US$$1,300/oz).   Not only did our international portfolio of mines exceed its production targets in 2018, but it also outperformed cost guidance. However, as South Deep, our only remaining South African operation, was well below target, Group attributable production of 2.04Moz for the year was below our original guidance of 2.08 – 2.10Moz, as well as 2017 production of 2.16Moz. Group AIC of US$1,173/oz were below the guided US$1,190/oz – US$1,210/oz, but slightly higher than the US$1,088/oz reported in 2017, due to the continued investment in our growth projects.   The strong operational performances of our operations in Ghana, Peru and Australia resulted in net cash flows of US$332m, and enabled us to fund our US$290m total project capital expenditure in 2018 (excluding Asanko), without putting undue pressure on our balance sheet. Despite the increased spending, as anticipated, we declared a total dividend for 2018 of R0.40/share. Planned project and sustaining capital for 2019 is scheduled to decline to US$633m, of which US$143m is growth capital.   At South Deep, annual production in 2018 at 157,100oz was half the originally guided 321,000oz. Production in the second half of the year was impacted by the tragic fatal accident as well as a wide ranging restructuring, including the retrenchment of over 1,500 employees and contractors, and a subsequent six-week strike by the majority National Union of Mineworkers (NUM). However, I believe that in the wake of the restructuring, which has seen our employee workforce at the mine fall by about 30% to just under 2,500 and the number of contractors decrease from 2,294 to 1,725, we are in a position to significantly reduce South Deep’s pre-restructuring (H1 2018) cash-burn of about R100m (US$8m) a month.   During 2018, we recorded one fatality (three in 2017), which served as a tragic reminder that we have lots more work to do to eliminate all fatalities and serious injuries to realise our goal of zero harm. We did however see a continued improvement in our health and safety performance amid renewed efforts to entrench a committed safety culture and standards. Gold Fields’ total recordable injury frequency rate (TRIFR) fell below two recordable injuries per million hours worked for the first time, a continuation of our long-term downward trend and our best safety performance ever.   Mining is an industry that has significant impacts on the countries and communities in which it operates. This requires continued proactive stakeholder engagement strategies and sustainable development policies.   Host communities, in particular, are critical stakeholders for our mines. During 2018, we continued investing significant resources in community programmes, including increasing the share of jobs and procurement spend allocated to host communities. We are showing good results with around 25% of our total value creation of US$2.7bn during 2018 channelled into host communities.   The judicious use of water and energy resources by our mines and proactive mine closure programmes are other critical elements of our sustainable development programmes, not only as part of our commitment to operational efficiencies and environmental stewardship, but also as part of strengthening our social licence to operate.   We are also committed, in collaboration with our peers in the ICMM, to a renewed focus on the governance and technical management of our tailings storage facilities (TSFs) following the collapse of a TSF at Vale’s Feijão iron ore mine in Brumadinho, Brazil, in January 2019, during which there were over 300 deaths.   The Gold Fields share price took a hit when we announced the restructuring of South Deep in August 2018. While it has gradually recovered since then, overall in 2018 our share price decreased by 18% on the New York Stock Exchange and 9% on the JSE.

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Group performance scorecard

Performance highlights (Group)

		2018		2017	4
Fatalities	Number	1		3
TRIFR	/million hours worked	1.83		2.42
Attributable production	Moz	2.04		2.16
All-in Sustaining Costs (AISC)3	US$/oz	981		955
AIC3	US$/oz	1,173		1,088
Net cash-flow1,3	US$m	(132	)	(2	)
Free cash-flow (FCF) margin3	%	16		16
Net debt3	US$bn	1,612		1,303
Dividend declared	R/share	0.40		0.90
Total value distribution	US$bn	2.711		2.849
Energy usage2	TJ	11,628		12,178
Water withdrawal5	M	21,179		32,985
CO2 emissions	million tonnes	1.85		1.96
Host community procurement (% of total)6	%	27		45
Host community employment (% of total)7	%	56		40
Gross mine closure liabilities	US$m	400		381

¹  Net cash-flow = cash-flow from operating activities less net capital expenditure, environmental payments and finance lease payments

²  The sum of direct and indirect energy consumption reflects a conversion factor used by Granny Smith, Tarkwa and Damang power stations to account for generation losses

³  These non-IFRS measures have been defined in management’s discussion and analysis in the Annual Financial Report and have been reconciled to IFRS

⁴  2017 numbers include continued and discontinued operations

⁵  Large difference in numbers due to change of definition of water withdrawal to exclude diverted water

⁶  The % decline is due to a change in the definition of host communities by our Australian operations to only include communities in their area of influence (previously Perth was included in the definition due to the FIFO nature of our mines)

⁷  South Deep’s host community definition was changed in 2018 to align with the 2016 municipal boundary change which amalgamated the Westonaria and Randfontein municipalities. It now includes all individuals who reside in the Rand West City Local Municipality. This number also excludes the Perth office and Gruyere project

Each year, Gold Fields adopts a Group performance scorecard that incorporates the Company’s strategic priorities and seeks to instil the right culture and behaviours among our workforce, driven by the imperatives of safety, cash generation and sustainably growing the business.

By integrating all of the key value drivers into the business, the scorecard also aims to enhance the Group’s sustainability and reflects the integrated nature of our business. The scorecard consists of four key performance areas and elements against which we measure our performance, which are discussed in detail in the IAR:

1. Safe operational delivery – how we make money (p56)

2. Portfolio management – what we choose to invest in (p40)

3. Capital discipline – how we spend money (p84)

4. Licence and reputation – how we conduct ourselves (p92)

My performance as CEO against my scorecard objectives is shown on p16. This Integrated Annual Report (IAR) is structured along the lines of our 2018 scorecard and an overview of each performance area follows.

Safe operational delivery

Safety and health

Safety is management’s first priority and it is critical that we continuously emphasise our commitment to zero harm. Therefore, the fact that we still had one fatality at our mines during 2018, compared with three in 2017, is a setback. Our heartfelt condolences go out to the family, friends and colleagues of Ananias Mosololi, a load haul dump operator at South Deep, who died after an underground accident on 12 October 2018. In a non-mining-related accident, a member of the Community Security Task Force, Francis Yeboah, drowned in a settling pond at our Tarkwa mine in Ghana. We are deeply saddened by his loss and extend our condolences to his family.

Our overall safety performance improved during 2018, with the TRIFR declining to 1.83 incidents per million hours worked from

2.42 in 2017, as the total number of recordable injuries reduced to 99 from 138 in 2017. This is a continuation of a longer-term trend. As recently as 2014, our TRIFR was 4.04 and we reported 200 recordable injuries.

Working towards eliminating all fatalities and serious injuries remains a priority for our management teams at the operations, which have ultimate responsibility for health and safety issues. The Group Safety Leadership Forum, formed in 2017, is overseeing the development of a Group-wide safety strategy that will further improve our safety performance. It has identified three pillars to underpin our safety efforts - systems and processes, safety leadership, and safe behaviour - to complement the many good safety initiatives already in place. To further

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entrench safe behaviour, we have also implemented greater recognition for safety in performance scorecards of all employees by adding a number of leading indicators to the current lagging indicators.

On the health front, the Occupational Lung Disease Working Group, representing most gold mining companies in South Africa, including Gold Fields, reached an historic settlement with attorneys representing ex-mine workers suffering from silicosis and TB. The settlement still needs to be approved by South Africa’s courts. Once it is approved a trust will be set up, funded by R5bn (US$390m) from the gold mining companies, and the process of compensating ex-mine workers can finally begin. Gold Fields has provided R368m (US$25m) for its share of the settlement.

Business and financial performance

2018 was the second year of our reinvestment programme that seeks to improve the quality of our portfolio and sustain the current production base for the next decade. The significant capital expenditure requirements that accompany this programme inevitably resulted in higher Group AIC and reduced net cash-flow during both 2017 and 2018. As such, we guided the market at the beginning of 2018 on higher costs and marginally lower production.

Group attributable production of 2.04Moz for the year was 2% below our originally guided 2.08 – 2.10Moz. All the international mines exceeded their production guidance. South Deep’s production at 157,100oz was well below guidance.

Despite the significant capital expenditure programme during 2018, stringent cost management across the Group resulted in a good cost performance with AIC of US$1,173/oz and AISC of US$981/oz in 2018, below guidance

for the year of US$1,190/oz – US$1,210/oz and US$990/oz – US$1,010/oz respectively.

Total capital expenditure during 2018 was US$814m, just lower than the US$834m spent in 2017. The Group reported net cash-outflow of US$132m (2017: US$2m cash-outflow) and a FCF margin (which excludes capital spend on growth projects) of 16% (2017: 16%). The gold price received by Gold Fields during 2018 averaged US$1,252/oz (2017: US$1,255/oz).

The Group and mine operating and financial performances are detailed on p56 – 62.

South Deep restructuring

2018 proved to be an extremely difficult year for South Deep. After falling behind plan in H1 2018, management announced a material restructuring on 14 August 2018. The aim of the restructuring was to consolidate mining activity to increase focus, and to match the cost structure with the level of production.

As part of the restructuring, South Deep closed mining activities in loss-making areas of the mine and reduced operational and support staff commensurately. Development activities in the new mine areas were also suspended. Both registered trade unions were served with section 189 notices in terms of South Africa’s Labour Relations Act and, after the legislated consultation period ended, the retrenchment of 1,092 employees and 420 contractors were implemented. This leaves the staff complement approximately 30% lower than it was before the retrenchments.

The NUM commenced strike action on 2 November 2018 to protest the retrenchments, which continued until 18 December 2018. Amid violence and intimidation, non-striking employees were prevented from accessing the mine and, subsequently, no production was possible for November and December 2018.

Attributable gold production

All-in Costs (AIC)

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The Gold Fields Integrated Annual Report 2018	33

Production at South Deep during 2018 decreased by 44% to 4,885kg (157,100oz) from 8,748kg (281,300oz) in 2017 driven by decreased volumes and grade. AIC for 2018 increased 42% to R854,049/kg (US$2,012/oz) from R600,109/kg (US$1,400/oz) in 2017, mainly due to lower gold sold. Net cash-outflow for the year was R1,891m (US$141m). South Deep also reported an asset and goodwill impairment of R6.47bn (US$482m) in 2018 following a goodwill impairment of R3.5bn (US$278m) in 2017.

Subsequent to the 2018 year-end, South Deep commenced the process of building up production with a reduced, but more focused, workforce and having removed over R800m from the mine’s cost base. The immediate target is to get the mine to break even at the current level of production. Once this has been achieved, the focus will be on improving productivity off the restructured cost base and overhead structure, to bring the mine to profitability. Gold Fields is unable to continue sustaining the cash losses of the last few years and, should our efforts subsequent to the restructuring at South Deep not show positive results, other options for the asset cannot be ruled out.

Guidance of 6,000kg (193,000oz) has been provided for 2019 at an AIC of R610,000/kg (US$1,394/oz). The mine’s Mineral Reserves were reduced by 12% to 32.8Moz in December 2018 compared with a year earlier.

Energy

During 2018, Gold Fields shifted further away from the use of carbon-intensive energy sources. Our mines in Ghana, Australia and Peru are now largely powered by low-carbon gas, though diesel is still being used for the majority of our mining fleet. During 2018, 54% of our total electricity capacity was generated by gas, with coal accounting for 35%, hydro-electric for 9% and diesel for 2%.

Currently Gold Fields has 134MW in installed gas capacity and an additional 16MW of gas capacity is being evaluated by the Australian and Ghanaian mines. Renewable energy is also becoming a viable option, not only due to its positive impact on carbon emissions but also because the cost of renewables is rapidly coming down. At present, Gold Fields has 55MW of solar capacity and 18MW of wind capacity under study at our South African, Australian and Ghanaian mines.

The Granny Smith mine in Australia looks set to be the first mine in our portfolio to be partly solar powered, having contracted an independent power producer to design, build and operate a 8MW solar plant backed by 2MW of battery systems, to be commissioned in Q4 2019. The Agnew mine is also expected to develop a hybrid gas and renewable power plant during 2019.

By 2020 we are confident that around 2% of installed Group energy capacity will be from solar and wind. Gold Fields also remains committed to its goal of 20% renewable energy generation over the life-of-mine at all new projects.

Energy accounted for 22% of Group operating costs in 2018, the second largest cost component at our mines. While energy consumption decreased by 4% in 2018, the Group increased energy spending by 17% to US$302m in 2018, amid higher diesel unit costs and regulated tariff increases. Operational energy efficiencies yielded savings of US$29m.

Greater use of renewables has the added benefit of reducing the carbon footprint, which is one of Gold Fields’ key environmental priorities. During 2018, total CO₂ emissions declined to 1.85m tonnes (2017: 1.96m tonnes), and we expect longer-term benefits arising from the energy efficiency and fuel-switching projects we have put in place at our mines.

Fit-for-purpose workforce

A key area of focus in 2018 was to ensure that our mines have appropriately sized and qualified workforces to drive safe operational delivery. As part of the restructuring of South Deep, which commenced in August 2018, 1,092 employees and 420 contractors were retrenched as part of our efforts to align the cost base with the reduced operational footprint of South Deep. Earlier in the year a further 260 employees and about 25% of the mine’s management team had accepted voluntary severance packages.

The Tarkwa mine switched to contractor mining during 2018, with about 90% of the affected workforce of the mine moving over to the two contractors. At our Damang mine, too, we converted just over 300 full-time employees into fixed-term contractors. As a result, the number of full-time employees in the West Africa region reduced from 2,910 at end 2017 to 1,079 at end 2018, while the number of contractors rose from 4,761 to 6,291 over the same period. Damang has been using contractor mining since the start of the reinvestment project early in 2017.

As a result of these initiatives, the Group now employs 5,601 full-time employees (2017: 8,856) and 12,010 contractors (2017: 9,738).

Another important human resource initiatives implemented in 2018 is the continued drive to have appropriately skilled people in the right roles. With the increasing shift towards mechanisation and automation at our mines, we have found that, in addition to the continued development and training of our workforce, it is important to recruit appropriately skilled and experienced people. During 2018, we spent over US$14m globally on training and development – on top of recruiting the best mining skills to supplement our existing talent pool.

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Capital discipline

The core focus of Gold Fields’ financial strategy is to grow our FCF margin and to sustain this margin in the long-term. The Group has set a FCF margin target per region (after capital expenditure, royalties and taxes) of at least 15% at a notional long-term planning gold price of US$1,200/oz, thus providing a cushion in case of lower prices.

Despite the significant capital investment programme of US$814m, Gold Fields produced a sound cost and cash-flow performance during 2018. AIC of US$1,173/oz and AISC of US$981/oz for 2018 were slightly ahead of 2017 numbers but below guidance for the year of US$1,190 – US$1,210/oz and US$990 – US$1,010/oz, respectively.

Cash-flow generated by the operations remained strong. Excluding project capital and off-mine exploration expenditure, operational cash-flow was US$334m (US$194m in Australia, US$114m in Peru, US$149m in Ghana and a negative US$141m in South Africa) versus US$441m in 2017. On a net basis, which includes growth capital, the Group reported net cash-outflow of US$132m (2017: US$2m cash-outflow) and an FCF margin (which excludes capital spend on growth projects) of 16% (2017: 16%) at an average gold price received of US$1,252/oz (2017: US$1,255/oz).

Revenue was down by 7% to US$2.58bn (2017: US$2.76bn) due to the production decline at South Deep. Cost of sales were down proportionally at US$2.04bn (2017: US$2.11bn). The overall financial performance was impacted largely by non-recurring items, including impairment of South Deep and retrenchment costs in Ghana related to the conversion to contract mining at Tarkwa.

Given the volatility in commodity prices and exchange rates and, more pertinently, the high levels of project capital expenditure incurred during 2018, management undertook short-term, tactical hedging of the oil price, the copper price and the

US Dollar, Australian Dollar and South African Rand gold prices to protect cash-flow. We are continuing with our gold hedging programme in Australia during 2019 as we finalise the construction of Gruyere. We have also extended hedging to the Rand gold price to protect South Deep’s cash-flow during the build-up to more sustainable production levels. Altogether, around 1Moz of gold production for 2019 has been hedged.

Dividends and debt reduction

Two of Gold Fields’ key strategic objectives are to pay its shareholders a dividend and reduce the amount of debt on our balance sheet. Despite recording a net cash-outflow, the Group declared a total dividend for the year of R0.40/share (2017: R0.90/share).

Having moved into a capital-intensive phase during 2017 and 2018, management guided the market for a pick-up in debt. Net debt increased by US$309m during 2018 to US$1,612m, mainly due to project capital spend and the funding of the Asanko Gold deal.

Gold Fields ended 2018 on a net debt:adjusted EBITDA ratio of 1.45x compared with 1.03x at the end of 2017, but still well below the debt covenant level of 2.50x.

During 2018, we continued to successfully manage our balance sheet by extending the maturity of the US$380m term loan by 12 months to June 2020. We are considering additional refinancing of our debt in 2019 to further improve liquidity.

Portfolio management

Gold Fields manages its assets to improve the overall quality of its portfolio and enhance the sustainability of the cash-flow generated by this portfolio. In this regard, the focus is on reducing Group AIC, increasing the FCF/oz and extending the life of the assets.

All assets in our portfolio are subject to the Group’s annual strategic planning process. A scenario analysis is conducted for each operation,

assessing how to maximise cash-flow, life-of-mine and margin. The results of this analysis are then used in conjunction with the Group’s capital profile and the current economic environment as inputs into our annual business planning.

Mine developments

The strength of our international portfolio is evident in the continued net cash-flow generation of our mines in Australia, Ghana and Peru, which collectively generated US$457m in 2018 (2017: US$501m), before taking into account project capital.

During 2018, we announced an extension of Cerro Corona’s life-of-mine to 2030 through work on the tailings facility and the future use of in-pit tailings.

Our Australian mines continue to benefit from our consistent and sizeable near-mine (brownfields) exploration programmes. During 2018, we spent A$83m (US$62m) at Agnew, Granny Smith and St Ives and, as a result, added 1.18Moz in Mineral Reserves (before depletion) at our Australian mines. Notable projects arising from this investment drive are:

∎ Greater Invincible Complex continued to grow in 2018 and now represents one of the largest mineralised systems at St Ives

∎ Significant incremental ounces added to the Wallaby mine at Granny Smith

∎ Near-mining resources and reserves replaced at Agnew’s New Holland and Waroonga mines and new discoveries at Waroonga North and Redeemer

A further A$76m (US$57m) has been budgeted for brownfield exploration at our Australian mines in 2019.

Near-mine exploration is also being stepped up at our Ghanaian mines, notably at Tarkwa, where the focus is on paleoplacer extension opportunities at the mine’s existing pits. US$9m was spent in 2018 with some early promising results evident.

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The only operating asset in the Group that still needs to be brought to full account is the South Deep mine. Management believes that following the significant restructuring in the second half of 2018 the cost base has been adjusted to the reduced operating footprint. We expect to significantly reduce the monthly cash losses at the mine and are confident that South Deep is set up for a sustainable recovery over the next few years.

Gold Fields holds investment positions in Gold Road Resources and Asanko Gold, which are the joint venture partners in the Gruyere project and the Asanko gold mine (AGM) respectively. We also have minority holdings in a number of junior mining companies, including Cardinal Resources, Red 5 and Hummingbird, and evaluate these interests on a regular basis. The company also diluted its shareholding in Toronto-listed Maverix Metals to 20%.

Project advancements

2018 was the second year in our drive to secure the longevity and sustainability of our portfolio of assets, and all our key projects in this respect are tracking their delivery deadlines and financial budgets:

∎ At Gruyere, the JV partners, Gold Fields and Gold Road Resources, have to date invested A$492m (US$374m) of the total expected project cost of A$621m (US$480m). During 2017 and 2018, Gold Fields’ portion of the spend was A$246m (US$185m), including capital investment and management costs. First gold is expected to be poured during Q2 2019, with production for 2019 guided at 118koz (100% basis)

∎ At the end of 2016 we commenced the US$341m investment at our Damang mine in Ghana to extend the life-of-mine to 2025. Capital spending during 2018 was US$125m (2017: US$115m). The project is ahead of plan and the mine is set to reach full production in early 2020

∎ At the Salares Norte project in Chile, the feasibility study was completed in 2018, and a maiden Mineral Reserve of 4.0Moz (gold equivalent) was declared. Any decision to build a mine at Salares Norte will be made based on the outcome of the Environmental Impact Assessment (EIA), which was accepted for evaluation by the regulator in July 2018 and is expected to take 18 - 24 months. Spending on further drilling and other work totalled US$64m during 2018.

Potential operational parameters established by the feasibility study for a possible future mine include:

– Initial 11.5-year life-of-mine

– Annual throughput of 2Mt

– Life-of-mine production of 3.2Moz of gold and 26.7Moz of silver

– Average annual production of 450koz gold equivalent for the first seven years of the project at an AISC of US$465/Au-eq oz

– Project construction capital of US$834m

∎ A JV with Asanko Gold in Ghana was completed in July 2018, with Gold Fields acquiring 45% in the Asanko Gold Mine (AGM) for approximately US$185m, of which US$20m was deferred. The mine achieved total production of 223koz (100% basis) at an AIC of US$1,183/oz and is guiding for production of 225koz - 245koz at AIC of US$1,130/oz - US$1,150/ oz for 2019. Gold Fields has also acquired a 9.9% stake in the holding company, Toronto listed Asanko Gold

∎ The sale of the Arctic Platinum Project to CD Capital Management was concluded in early 2018 for a cash consideration of US$40m and future royalties of 2%

Mineral Reserves

During 2018, Gold Fields’ managed gold-equivalent Mineral Reserves (net of depletion) decreased by 1% to 54.1Moz at 31 December 2018. The declines were largely due to reductions in Mineral Resource and Reserves at South Deep, due to a higher cut-off grade.

Other notable developments during 2018 were:

∎ Salares Norte declared a maiden gold-equivalent Mineral Reserve of 4.0Moz at 31 December 2018, following the completion of its feasibility study

∎ In Australia, managed Mineral Reserves (net of depletion) increased by 0.2Moz to 6.4Moz at 31 December 2018, testament to the continued success of brownfields exploration at the mines

∎ At South Deep, Mineral Reserves totalled 32.8Moz (2017: 37.4Moz) at 31 December 2018.

As recently as 2017 South Deep held just over 70% of our Group Mineral Reserves. The profile has changed: of our total managed gold-equivalent Mineral Reserves as at 31 December 2018, 59% are held by South Deep, and our Mineral Resource profile indicates that this percentage could continue to fall.

A straight comparison between South Africa’s and our international operations’ Mineral Reserves is in any case misleading, given the different style of mineralisation. The paleoplacer type orebody at South Deep is large and consistent, while most of the rest of the Group’s reserves are dominated by orogenic/ greenstone type orebodies, which are more variable and usually do not have particularly long Reserve lives. But these orebodies are characterised by consistent replacement of Reserve depletion. Importantly, our commitment to brownfields exploration has allowed us to continually replace Reserves, particularly at our Australian mines, over a number of years.

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Licence and reputation

The success of our business is dependent on our relationships with key external stakeholders which determine both our regulatory and social licences to operate.

Environmental stewardship

Responsible environmental management remains a vital component of Gold Fields’ approach to operate at all our operations and projects. In 2018, we reported two Level 3 environmental incidents (2017: two), one in Peru and one in Ghana (p95). Gold Fields has had no Level 4 or 5 environmental incident for well over ten years, but the two Level 3 incidents had the potential to impact water supply to the nearby communities. Our teams acted quickly to remediate the events and communicated transparently with regulators and communities on this issue. The number of Level 2 incidents fell by 18% to 68 in 2018 from 83 in 2017.

Water is a particular focus of our environmental strategy, as it is becoming an increasingly scarce and expensive resource globally. Managing the risks around current and anticipated water security, which includes the quantity and quality of supply as well as associated costs, is essential to ensure sustainable production for existing operations and the future viability of projects.

During 2018, our operations invested in improving water practices, including pollution prevention, recycling and conservation initiatives. A key target is to reuse or recycle much of the water we use in our processes and we set ourselves a target of 65%, in line with ICMM guidance. We achieved the target in 2018, when 66% of our total water use was recycled or reused water.

Work carried out by the ICMM on water and tailings management has provided best-practice guidelines for the Company, and during 2017 and 2018 we worked closely to align our practices to these ICMM position statements. During 2018, external reviews of our compliance with these position statements concluded that

we are aligned with the ICMM position statements both in terms of water and tailings management.

After the catastrophic tailings failure at the Feijão iron ore mine in Brumadinho, Brazil, in January 2019, during which there were over 300 deaths, all Gold Fields’ operations carried out additional safety inspections at our 33 tailings facilities, particularly on the 18 decommissioned TSFs, and concluded that Gold Fields-managed TSFs were not at risk. During 2019 we will further strengthen technical and governance oversight over all of our TSFs. Longer term, our teams are working with our peers at the ICMM to evaluate independent assessment and accreditation of all ICMM member TSFs as will as on solutions such as filtered and dry-stack tailings.

The total gross mine closure liability for Gold Fields was raised by 5% to US$400m in 2018 from US$381m in 2017. During 2018, we further enhanced our integrated approach to mine closure management with a focus on progressive environmental rehabilitation and full life-of-mine closure obligations.

Stakeholder relations

Employees, business partners, shareholders, investors, governments and communities have been identified as Gold Fields’ key stakeholders. Their support is critical in ensuring that we receive and retain our regulatory approvals and social licence to operate. This can only be achieved if we develop stakeholder relationships that are based on transparent and open engagement and if we create shared value with them. The ability to generate cash is critical in distributing the benefits from mining to our stakeholders. In 2018, Gold Fields’ value distribution totalled US$2.7bn, compared with the US$2.9bn we distributed in 2017. For details on how this amount was dispensed to stakeholders during 2018 see p6.

Government relations

As the issuers of mining licences, developers of policy and implementers of regulations, host

governments at all levels (national, regional and local) are one of Gold Fields’ most critical stakeholders. While we seek to engage with these stakeholders regularly to build trusts, these relationships are not always easy. Over the past few years we have seen a resurgence of resource nationalism, particularly in Africa. As part of this many governments accuse the mining industry of not paying fair taxes by using profit-shifting and under-invoicing their physical gold exports. Gold Fields has appropriate controls and procedures in place to ensure that we comply with relevant tax legislation, including compliance with transfer pricing regulations, and account fully for our gold exports.

In South Africa the industry and government have been at an impasse for a number of years over the implementation of a new Mining Charter to govern the sector. A new Charter was published by the Department of Mineral Resources (DMR) in mid-2018. The 2018 Mining Charter is an improvement on previous draft versions, but there are still critical matters, including renewals of licences, that are not dealt with. As it stands now the licence renewal clause is unacceptable to the industry, as it would invalidate all previous empowerment deals if the empowerment partner has since sold its interests. Should this impasse continue, the Minerals Council of South Africa (MCSA), reserves its rights to proceed with a legal review of the Charter relating to, among others, the renewal of licences.

The Minerals Council of South Africa won a court case recognising the ”once empowered, always empowered” principle, which would guarantee the legislated black economic empowerment ownership levels for South Deep until its licence renewal in 2040 and a further term of 30 years after that. However, the ruling has been appealed by the DMR and the MCSA will follow due process in this regard.

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A more proactive approach is required, such as the one adopted by the Ghanaian government, which has entered into development agreements with large mining companies, including Gold Fields, and incentivises new mining projects. Our agreement with the Ghana government was fundamental in our US$341m reinvestment programme in Damang, which created or secured around 1,850 jobs. The favourable investment environment also encouraged us to take a 45% holding in AGM.

The mining regimes in Peru and Australia remained relatively stable, though we opposed a proposed rise in the gold royalty rate in Western Australia.

Labour relations

Gold Fields fundamentally respects and protects the rights of its employees to organise themselves through trade unions. Over the years we have developed good working relations with organised labour at our operations and constructive engagement usually precedes any restructuring and corporate actions needed to keep our operations sustainable. However, during 2018, our relationship with unions at our Ghanaian mines and at South Deep turned adversarial.

At Tarkwa, the Ghanaian Mineworkers Union brought a court injunction against the decision to convert from owner to contractor mining, which is essential to ensure life extension at the mine. This was overturned by the courts and the mine implemented the transition to contractor mining successfully, with a large part of affected employees joining the two mining contractors. As a result the employee workforce at our Ghanaian mines is now non-unionised.

At South Deep, the NUM embarked on a 45-day strike in November and December 2018 following the mine’s decision to retrench around 1,500 employees and contractors as

part of its wide-ranging restructuring. The strike was marred by violence and intimidation carried out by a small group of NUM branch members against the majority of employees who wanted to return to work, but were prevented from doing so. The strike was resolved after many NUM employees sought the assistance of the national and regional offices of the NUM to end the industrial action.

The strike highlighted the need to rebase our labour relations at South Deep, and a new collective agreement was signed between the NUM and the mine in March 2019 to take cognisance of South Deep’s new operating model.

Community relations and Shared Value

One of the biggest challenges facing mining companies is building relationships and trust with their host communities, without which there is potential for operational disruption, project delays and cancellations – the loss of our social licence to operate.

Gold Fields has traditionally invested in communities through a range of educational, skills development, health and infrastructure projects and, more recently, through Shared Value-based projects. This approach to structuring our investments in communities ensures that the value created is shared by communities and the business. Socio-Economic Development (SED) is still an important part of our community investment strategy, but host community procurement and employment have proven to be more impactful as they create economic value directly in the communities most impacted by our mines and projects.

During 2018, host community members accounted for 56% of our total workforce (employees and contractors) throughout the Group – 9,259 employees – with the numbers varying from around 5% at our Fly-in, Fly-out mines in Australia to over 70% at our two Ghanaian operations.

Host community procurement can be even more impactful as our spending with suppliers and contractors is generally our biggest cost component. In 2018 we spent about US$1.81bn with these businesses, of which 94% was spent in-country and 27%, or US$441m, with businesses from our host communities. The economic benefits in terms of skills development, job creation and reducing dependency from the mine are self-evident.

Altogether, we have calculated that during 2018 almost a quarter of our total value creation of US$2.71bn – US$686m – remained with our host communities. It is a number we are seeking to grow and our regions have developed ambitious targets in this respect.

Governance and compliance

Supporting our integrated management approach is a robust corporate governance programme throughout the Company. During 2018, building on the implementation of the recommendations of the King IV Report on Corporate Governance during 2017, the Board approved a diversity policy and revised human rights, stakeholder engagement, environmental as well as occupational health and safety policy statements. These policies are expected to improve sound governance, transparency and regulatory compliance at Gold Fields.

Adherence to legislation, controls and standards is a non-negotiable aspect of doing business, while ethical leadership and sound business governance serve to strengthen our reputation and relationships with shareholders, governments, communities and employees.

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CEO Report continued

Strategy overview

Industry developments

The past few months has seen a pick-up in mergers and acquisitions in the global gold mining sector. Most notably, there have been announced tie-ups between Newmont Gold and Goldcorp and between Barrick Gold and Randgold Resources, as well as Newmont and Barrick merging their Nevada assets. These deals, if and when finalised, will reshape the industry. Amid speculation about further sector consolidation, Gold Fields has been linked with a number of similar-sized industry peers.

We believe, though, that we are in the final stages of successfully implementing our own growth strategy, one we embarked upon two years ago. By kick-starting the investments in our growth projects then, we are confident that we are ahead of the curve in terms of project development.

Historically, mergers between gold mining companies have faced significant challenges to achieving success. We believe that too often a proposed merger was based on an increased production profile without necessarily achieving greater cost synergies, while cultural differences between companies are another impediment to delivering value to shareholders and other stakeholders.

It is early days for the recently announced mega-mergers but extracting value-creating synergies could prove challenging. Instead, they suggest that the companies are seeking to build growth and boost their Reserve lives. At Gold Fields, we don’t believe we need a merger to achieve profitable growth. We are executing what we believe to be strong, sustainable and deliverable growth strategy, which will create shareholder value in the short, medium and long-term.

Our growth strategy

Gold Fields seeks to be a low-cost gold producer that secures sustainable cash-flow through the inevitable price cycles in the gold mining industry. Through this, we are confident we can deliver superior returns when the gold price is high, and offer a degree of protection when the price falls. At the same time, sound cash-flow has enabled us to manage our debt, invest in the right

assets and distribute the benefits of mining to our stakeholders.

To continue expanding margins and distributing cash, the long-term sustainability of the business must be kept intact. This requires investing to extend the life of our assets, ensuring we maintain our social licence to operate and retaining our people who are key to the Company’s success.

2018 was the second year of our reinvestment programme in which we have invested a total of almost US$550m. The key projects under this programme are set to come to fruition in 2019 and have the potential to produce strong cash-flows for Gold Fields in the future.

At present gold prices, I am confident that our Ghanaian, Australian and South American regions are well placed to maintain a production profile of nearly 2Moz per year over the medium to longer-term, based upon our Mineral Reserve profile in these regions, our track record of resource conversion, finalisation of our growth projects, and expected exploration activity.

In Ghana, the reinvestment at Damang is essentially the equivalent of developing a new mine, while our investment in Asanko Gold also has the potential for longer-term growth through life-of-mine extension. The Gruyere JV is close to completing a new mine in Western Australia, with first production scheduled in Q2 2019. Finally, in the Americas region, we have successfully completed a feasibility study for the Salares Norte project in northern Chile.

These projects are important in terms of their contribution to the strategic objectives of Gold Fields, namely to maintain and grow cash-flow on a sustainable basis. Based on current projections, they are expected to operate at an AIC that is lower than the current AIC of the Group, once steady-state levels of production are realised. As such, management believes that the Group’s overall cost of production has the potential to reduce over time.

We continue to invest in brownfields exploration in Australia with the objective of not only replacing what we mine, but also increasing our

Mineral Resources and Mineral Reserves at a higher quality than what has been mined previously. Finally, we need to optimally manage the ore bodies of our operating mines in terms of grade management and ongoing sustainable capital expenditure by planning for outcomes that optimise the lives of these ore bodies.

We should not forget the potential growth and profitability that we believe South Deep and its 33Moz in gold Reserves can offer Gold Fields in the longer-term. We have thus far failed to bring that potential to the fore, but I believe that the wide-ranging restructuring measures we implemented during 2018 – reducing the mine’s footprint and cutting the accompanying cost structures – have laid the foundation for future growth. For 2019, the focus will be on improving productivity and reducing the mine’s significant cash-outflows. But beyond that I believe we could see sustainable growth from South Deep that has the potential to add further to Group production.

A key element of the Group’s underlying strategy, which has contributed towards improving the quality of the portfolio over the years, are value-accretive acquisitions. During 2018, this resulted in our acquisition of a 45% stake in AGM.

Given the amount of capital that has been committed to Gruyere, Damang, Asanko and South Deep, and the potential call on funding resources to build Salares Norte, should we decide to do so, management has adopted a cautious approach on future acquisitions.

I am confident that Gold Fields has put in place the strategies that will lead to sustained value creation in the medium to long-term, and will see the Company build on its current production profile.

Executive management has sought to align itself with investors through its long-term incentive scheme, a large portion of which relates to the performance of the share price over time. If we stay the course on which we have embarked, I am confident that the Company will achieve strong operational performances, cash-flow generation and profitable growth.

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Gold price outlook

During 2018 the average US Dollar gold price declined marginally to US$1,252/oz from US$1,255/oz in 2017. It recovered strongly from lows in late November and Q1 2019 was trading in between US$1,290/oz – US$1,330/oz. In their assessments the World Gold Council (WGC) and the CPM Group credit gold’s recent stronger performance to three main factors:

∎ Increased market uncertainty, political turmoil in the US and the expansion of protectionist economic policies, which have historically made gold attractive as a hedge

∎ While gold has faced headwinds from higher interest rates and US Dollar strength, these effects have been limited as the US Federal Reserve has signalled a more neutral stance following a series of rate hikes in 2018

∎ Continued purchases of gold by central banks, a trend set to continue into 2019

While management anticipates that these trends may have a positive impact on the gold price, Gold Fields has adopted a cautious approach and is planning its business for 2019 on the assumption of a US$1,200/oz gold price, the same as in 2018.

The fundamentals may support a firmer gold price in future. On the supply side the steady increase in primary gold supplies until 2015 has since stabilised to around 105Moz per annum. This is predominantly due to the cut in exploration spending as well as the dearth of new mines being built, but also exacerbated by the decline in grades and the increasing depth and complexity of the ore bodies being mined and processed.

Consumer demand in India and China, while significantly down on its highs over the last five years, should remain strong according to CPM and WGC, given economic growth, rising urbanisation and traditional affinity towards gold in these countries. Central banks continue to buy gold and it appears that most of the central banks that were looking to sell gold have already done so.

Management believes these factors bode well for the long-term future of gold, although the price will

undoubtedly move through cycles with the attendant volatility.

Guidance for 2019

Gold Fields’ business plan for 2019 has been built around an average gold price of US$1,200/oz (A$1,600/oz, R525,000/kg) and assuming exchange rates of R13.8 per US$ and A$0.75 per US$.

As stated, 2019 is set to be an important growth year for Gold Fields, with the Damang project approaching completion and Gruyere commencing production. In addition, Asanko will contribute for a full year for the first time since acquisition. As a result the Company is guiding for an increase of 4% – 7% in attributable equivalent gold production in 2019 to 2.13Moz – 2.18Moz. AISC is expected to be between US$980/oz and US$995/oz and AIC between US$1,075/oz – US$1,095/oz. The year will however, be one of two halves, with both production and cash-flow being weighted to H2 2019.

The main drivers behind production and cost guidance for 2019 are:

∎ Our 50% share of production at Gruyere, which is guiding 118koz (100% basis) for the year with production set to start in Q2 2019

∎ An expected increase in Damang’s production from 181koz to 218koz, with AIC of US$1,100/oz (2018: US$1,506/oz)

∎ Asanko is set to contribute for the full year. Its guidance for 2019 is 225koz – 245koz (100% basis) at AIC of US$1,130/oz -US$1,150/oz

∎ Production for South Deep is expected to be 6,000kg (193koz), with AIC of R610,000/kg (US$1,394/oz)

∎ An expected 5% decline in the production of our three Australian mines to 843koz (2018: 886koz)

∎ A drop in gold-equivalent production at Cerro Corona from 314koz in 2018 to 291koz at a higher AIC of US$802/Au-eq oz (2018: US$699/oz)

With our two key projects set to reach fruition it means that our capital expenditure is expected to decline through 2019. Capex for 2019 is split into planned sustaining capital expenditure of US$490m (including near-mine exploration) and growth capital expenditure of US$143m. Growth capex comprises US$69m

for Damang and A$99m (US$74m) for Gruyere. Expenditure on Salares Norte (which is not capitalised) is expected to be US$57m in 2019, comprising US$37m on fixed costs and engineering work and US$20m on district exploration. The capital expenditure above excludes Gold Fields’ 50% share of Asanko’s capital expenditure of US$25m for 2019, as this interest is equity accounted.

For 2019, Gold Fields has continued to undertake certain gold price hedging to secure short-term cash flow and protect the balance sheet from the volatility of the gold price as we complete our investment phase and ramp up the projects.

Note of thanks

I would like to express my gratitude to my fellow directors, led by our Chairperson, Cheryl Carolus, for their support and guidance during 2018. I want to pay a special tribute to Don Ncube, who retired as Chairperson of the Social, Ethics and Transformation Committee and the Board in May 2018. He was a director of Gold Fields for 11 years and the input he provided in transforming the Company and building closer relations with our host communities, particularly at South Deep, will stand us in good stead for years to come.

The composition of our Executive Committee remained stable during 2018, with Rosh Bardien joining as Executive Vice President: People and Organisational Effectiveness in early 2018. I rely heavily on the members of this team in guiding and advising me in managing a complex, multinational company like Gold Fields. Each member of the team did a fantastic job in 2018.

Most importantly, I would like to express my sincere appreciation and gratitude to all the employees of Gold Fields. They have gone through some difficult times over the past year, with wide-ranging restructuring initiatives impacting their work lives, particularly for our colleagues at Tarkwa and South Deep. Their resilience, hard work and dedication never fails to astonish me and it gives me great comfort to know that I have this team behind me.

Nick Holland

CEO

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Portfolio

management

Mining is a long-term investment. As a business, we need to balance investing for future growth of our portfolio whilst generating cash today. Through our investment projects and strategic decisions, we aim to sustainably extend the life of Gold Fields’ overall portfolio at lower costs than today.
	∎  Managing our portfolio	p42
	∎  Life extension through near-mine exploration	p50

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Managing our portfolio

Introduction Gold Fields manages its business with the aim of continually improving the quality of its portfolio and, ultimately, its cash-flow generation. From a strategic standpoint, the overriding goal is to generate a free cash-flow (FCF) margin of at least 15% at a US$1,200/oz gold price, which is an adjustment from the previous 15% FCF margin at US$1,300/oz. To achieve this, there is strict focus on reducing AIC and, as a result, increasing the FCF/oz. However, it is also imperative that the generation of cash-flow is sustainable. Therefore, in addition to lowering Group AIC, strategic decisions aim to extend the life of the Group’s asset base and the overall portfolio.   To improve the quality of our portfolio, management employs the following elements in the portfolio management process: ∎  Acquiring or developing lower-cost (than Group average), longer-life assets ∎  Disposing of higher-cost, shorter-life assets that management believes can be better served by a company that has more time and resources to commit to them ∎  Extending the life of current assets through near-mine brownfields exploration ∎  Focusing on in-country opportunities to leverage off our existing footprint, infrastructure and skill set and capitalise on the experience we have gained from operating in these jurisdictions   Recent developments that improved the quality of our portfolio include the sale of Darlot in 2017, the acquisition of a 45% stake in the Asanko gold mine (AGM), and the continued investment into the Damang and Gruyere projects. Once Damang and Gruyere are operating at steady state, expected in 2020, Group AIC is expected to approach US$900/oz. Quality portfolio of growth projects By employing an active portfolio management approach, Gold Fields has built an attractive global portfolio of assets in Australia, Ghana and Peru, which have met or exceeded production and cost guidance over the past few years. At a mine level, this international portfolio of assets, excluding South Deep, generated net cash flow of US$457m (excluding project capital) during 2018 (2017: US$$485m), enabling the Group to report a FCF margin, which takes into account the outflow from South Deep, of 16% (2017: 16%). This is in line with our targeted 15% margin at a US$1,200/oz planning gold price.   South Deep is the only asset within the Company that has failed to meet expectations, with 2018 proving to be an extremely difficult year for the mine. After falling behind plan in the first half of 2018, management announced a material restructuring on 14 August 2018, with the aim of consolidating mining activity to increase focus and to match the cost structure with the level of production. The immediate target is to get the mine to break even at the current level of production (around 190koz per annum) and minimise the cash burn. Once this has been achieved, the focus will be on improving productivity off the restructured cost base and overhead structure, to bring the mine to profitability. For more details on the South Deep restructuring and outlook, refer to p46. All assets in our portfolio are subject to the Group’s annual strategic planning process, which assesses how to best maximise cash-flow, life-of-mine, and margin. The results of this analysis are combined with the Group’s capital profile and the current economic environment as inputs into our annual business planning. This process supported the continued investment in the Group’s three key growth and exploration projects (Damang, Gruyere and Salares Norte) during 2018: ∎  US$125m in project capital was incurred on the Damang Reinvestment project in 2018, after having spent US$115m in 2017 (p48) ∎  Gold Fields spent A$218m (US$163m) on the Gruyere project in 2018, compared with A$182m (US$140m) in 2017. Included in this number is A$153m (US$115m) in project capital, A$39m (US$29m) in capitalised interest, A$18m (US$14m) in operational support costs and A$8m (US$6m) in exploration expenditure. During 2018, the joint venture (JV) partners announced that there had been a delay to the project timeline (first gold now expected in Q2 2019), together with a 17% increase in the final forecast capital cost estimate to A$621m (US$480m) (p44) ∎  US$64m on further feasibility study work was spent on the Salares Norte exploration venture in Chile during 2018. The feasibility study was completed and approved by the Board in February 2019 (p47).

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Expanding our global footprint

2018 was the second year of Gold Fields’ reinvestment phase, in which we incurred US$290m (excluding Asanko) in project capital (2017: US$217m). All project capital spent was in countries that Gold Fields currently operates in, allowing us to leverage our knowledge of the business environment. Importantly, management only invested in projects that it believes have relatively short pay-back periods and attractive returns.

Gold Fields also increased its footprint in Ghana during 2018 by acquiring a 50% stake of Asanko Gold’s 90% interest in AGM for an upfront payment of US$165m (the government of Ghana holds the remaining 10%). A deferred payment of US$20m will be paid to Asanko Gold, should it achieve key milestones in the development of the Esaase project at AGM before 31 December 2019. In addition, Gold Fields purchased a 9.9% equity stake in Toronto Stock Exchange-listed Asanko Gold for US$17.6m.

While the Group spent more than it generated in 2017 and 2018, the cash-outflow over the period (US$2m in 2017 and US$132m in 2018) was lower than anticipated, underpinned by favourable hedge positions and a gold price received that was higher than planning prices. Despite the cash-outflows over the past two years, Gold Fields remains committed to its strategy of generating cash to reduce our debt, pay dividends to shareholders and share the value we create with employees, governments and host communities.

Gold Fields also has a portfolio of minority investments through a range of transactions conducted over the previous few years. During 2018, the Arctic Platinum Project in Finland was sold for US$40m, while we also bought a 9.9% stake in Toronto-listed Asanko Gold for US$17.6m. Asanko is our JV partner in AGM in Ghana. In 2016 Gold Fields injected its royalty portfolio into Toronto-listed Maverix Metals in exchange for a 32% interest. As other gold mining companies, including Newmont Gold, have followed our move this interest has been diluted to approximately 20%. A summary of our investments is in the table below.

Gold Fields’ material investments

Investment	Shareholding			Market Value  (Dec 2018 –  US$m)
Gold Road Resources		10%			37
Asanko Gold		9.9%			14
Cardinal Resources		11.3%	¹		11
Red 5		19.9%			16
Maverix Metals		19.9%	²		75
Hummingbird Resources		6%			6
Rusoro Mining		25.7%			13
Lefroy Exploration		18.2%			2
Magmatic Resources		15%			1
Orsu Metals		7.2%			1
Other					15
Total value (including warrants)					191

¹ Gold Fields owns an additional 38.2m options valued at US$6.0m

² Gold Fields owns an additional 10m warrant options valued at US$9.3m. Adding these warrants results in a holding of 20.5% in Maverix on a diluted basis

There were no further material developments regarding the Far Southeast (FSE) project in the Philippines during 2018. The project is held by Far Southeast Gold Resources (FSGRI) in which Gold Fields has a 40% interest, with an option to increase its stake to 60%, and is adjacent to an existing mining operation with established infrastructure. Lepanto Consolidated Mining of the Philippines holds the remaining 60% interest and manages the existing mining operation. Gold Fields impaired its investment in Far Southeast to US$92m in 2018, as determined by an evaluation of Lepanto’s market value on the Philippine Stock Exchange.

Gold Fields’ holding costs in FSE have been reduced to approximately US$120,000/month, related mainly to staff and administrative costs, managing existing drill core, environmental monitoring, community engagement work, as well as activities to support the permitting process.

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Managing our portfolio continued

Gruyere

In November 2016, Gold Fields entered into a 50/50 JV with Australian exploration company, Gold Road Resources, for the development and operation of the Gruyere gold project in the Yamarna belt of Western Australia, one of the country’s largest undeveloped gold regions. The JV comprises the Gruyere gold deposit and 144km² of exploration tenements.

Gruyere is a large shear hosted porphyry gold deposit, with Mineral Reserves of 3.8Moz, 50% of which is attributable to Gold Fields. It is located 200km east of Laverton in Western Australia, where our Granny Smith mine is located.

Early work at Gruyere began in December 2016, with Gold Fields taking over management of the project on 1 February 2017. After remaining largely on track and within budget in 2017, the JV partners announced a slight delay to project completion and an increase in the final forecast capital (FFC) cost estimate during 2018. First gold is now expected to be poured during the June 2019 quarter (previously the March 2019 quarter) whilst the FFC estimate is A$621m (US$480m), a 17% increase from the previous FCC estimate of A$532m (US$411m). Included in the new FFC estimate are scope changes and force majeure costs (due to extreme rainfall events during 2018) of A$30m (US$22m) and a contingency of A$30m (US$22m).

During 2018, Gold Fields spent project capital of A$153m (US$115m) on Gruyere, bringing our cumulative capital expenditure as at end-December 2018 to A$246m (US$187m). In addition, capitalised interest of A$39m (US$29m), operational support costs of A$18m (US$14m) and exploration expenditure of A$8m (US$6m) was incurred during the year, bringing Gold Fields’ total spending on Gruyere for 2018 to A$218m (US$163m). The remaining project capital of A$129m (US$97m) (100%

basis) has been budgeted for 2019, the majority of which is expected to be spent during the first half of the year.

In a project update released on 6 December 2018, the JV partners announced an increase in average annual production to 300koz from 270koz, driven by the purchase of larger semi-autogenous grinding (SAG) and ball mills which increased processing throughput to 8.2Mtpa from 7.5Mtpa. In addition, there was an increase in average All-in Sustaining Costs (AISC) over life-of-mine to A$1,025/oz (US$738/oz) from A$945/oz (US$709/oz) to reflect industry cost inflation since the 2016 feasibility study.

As at end December 2018, engineering was largely complete, while construction progress was 86.7% with all major equipment and materials for effective construction already delivered to site. During 2018, civil works on the TSF and installation of the tailings decant recovery pipelines were completed and the power station was fully commissioned. All civil and concrete works for the process plant were completed by year-end, with structural steel, plate steel and tanks nearing completion. Post year-end, the remaining work focused on piping, electrical and instrumentation and delivery of plant systems for commissioning of the plant during Q1 2019.

Downer EDI, which was awarded a five-year mining services contract in Q4 2017, began mobilising its workforce during Q1 2018 to begin construction of the mining infrastructure. Mining activities commenced in November 2018, focusing on completing the pre-strip and second stage run-of-mine (ROM) pad development. First ore was in Q1 2019, with mining rates expected to peak at 60Mtpa (100% basis) in 2023 and average 32Mtpa over life-of-mine.

The tenements comprising the Gruyere project fall within the area of the Yilka and Sullivan Edwards native title determination. The Yilka People and the Sullivan Edwards families are the traditional owners of the land, with many of their members residing in the nearby Cosmo Newberry community. The JV partners have a Native Title Agreement in place with the Yilka People and the Cosmo Newberry Aboriginal Corporation, which provides consent to mine. The partners also offer financial, contracting and employment benefits to the community, and have facilitated comprehensive processes for the management of Aboriginal heritage within the project area. A number of projects have been implemented with the Yilka People, including the provision of cultural awareness training for Gruyere employees and contractors. Key contractors at Gruyere have also been required to identify and pursue employment and contracting opportunities with the Yilka People to expand the scope of local participation.

First gold is forecast for Q2 2019 with production guidance of 118koz (100% basis) for the year at an AIC of A$3,178/oz (US$2,384/oz) (Gold Fields’ share only). A relatively quick ramp up is anticipated, with steady state run-rate expected by year-end.

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Managing our portfolio continued

South Deep

The key challenge for Gold Fields since taking ownership of South Deep in 2006 has been transitioning the mine from a conventional mining mindset to mining with a safe, modern, bulk, mechanised approach. Despite numerous interventions over the years to address the mine’s underperformance – including optimising the mining method, extensive training and skills development, changing shift and work configurations, and outsourcing functions – the mine has continued to underperform and make losses.

South Deep got off to a difficult start in 2018, with production in Q1 2018 impacted by a slow build-up after the seasonal holidays, two labour restructuring processes that took place at the end of 2017 and Q1 2018 respectively, and a change in the underground working shift arrangements implemented to increase face time and productivity. In addition, low mobile equipment reliability, the intersection of active geological features (faults and dykes) in the high-grade corridor 3 and poor ground conditions in the western sections of the mine (composites) slowed production rates. South Deep only produced 1,485kg (48koz) in Q1 2018.

Production was further impacted by a Department of Mineral Resources (DMR) related safety stoppage during April. As a result of these factors, guidance for the mine was downgraded to 7,600kg (244koz) with the release of our Q1 2018 production update on 25 April, down from the original guidance of 10,000kg (321koz).

Despite the two restructuring processes, South Deep continued to face a number of organisational and structural challenges that directly impacted performance during Q2 2018, with production during the quarter only marginally higher than Q1 2018 at 1,518kg (49koz). As a result, on 14 August 2018, Gold Fields announced a further material restructuring of the mine. The aim of the restructuring was to consolidate mining activity to increase focus, and to match the cost structure with the level of production. This included:

∎ Temporarily suspending mining activities at one of the mining areas

(87 Level) and redeploying these mining crews into a different corridor (4W)

∎ Servicing the eastern part of the mine from the Twin Shafts and restaffing the South Shaft operations to a single shift per day. South Shaft now only facilitates the provision of water and backfill reticulation, water pumping and ventilation services to the full mining operation

∎ Reducing growth capital expenditure for an 18-month period up until end 2019 to reduce the cash burn. New mine development has outperformed the plan with 918m achieved during 2018 against 749m planned, which allowed us some flexibility to reduce this spending in the near term

As part of the restructuring, Gold Fields served a section 189 notice on its trade unions, the National Union of Mineworkers (NUM) and UASA (formerly named the United Association of South Africa), on 14 August 2018, which is when the legislated minimum 60-day consultation period commenced. It was envisaged that an estimated 1,100 permanent employees and 460 contractors could be impacted through the retrenchment process. The consultation period ended on 31 October and Gold Fields formally served the NUM and UASA with a list of employees that were to be given notice of termination as per the section 189 process. Severance letters were issued to 1,082 affected employees, which prompted the majority union (NUM) to serve Gold Fields a 48-hour notice of its intention to commence a strike.

The strike started on 2 November and Gold Fields was granted an urgent court interdict on 3 November which prevented striking employees from intimidating other employees and blocking access to the mine. Despite this, the strike, which was orchestrated by a core group of about 200 NUM members and supporters of the South Deep branch leadership, was immediately characterised by intimidation and violence, prompting management to instruct all employees to remain clear of the mine property for the duration of the industrial action. The “no work,

no pay” policy applied to all NUM members given that this union had declared the strike.

On 20 November, Gold Fields tabled an improved retrenchment offer in an attempt to break the deadlock and end the strike. The union rejected the offer twice before the regional office of the NUM suspended the strike on 13 December and signed a settlement agreement five days later. Through the restructuring, a total of 1,092 permanent employees exited the business, of which 904 were retrenched, 183 opted for voluntary separation packages and five resigned.

In the wake of the restructuring, which has seen us remove R800m (US$56m) from the mine’s cost base and our employee workforce fall by 38% to just under 2,500 and the number of contractors from 2,294 to around 1,500, we are in a position to significantly reduce South Deep’s pre-restructuring cash-burn during 2019. We expect to build-up gradually to a sustainable production profile from this restructured position. Guidance of 6,000kg (193,000oz) has been provided for 2019 at an AIC of R610,000/kg (US$1,394/oz).

The key enablers for sustainable improvements at South Deep are expected to be:

∎ Improved organisational design with the right people in the right roles and a flat management structure

∎ Rigorous performance management linked to line of sight performance

∎ Improved stakeholder management, including government, trade unions and surrounding communities

∎ Reliable fixed infrastructure

∎ Accelerated backfill placement

∎ Improved fleet availability and utilisation

Once this has been achieved, the focus will be on improving productivity off the restructured cost base and overhead structure, to bring the mine to profitability.

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Salares Norte

The Salares Norte project is 100% Gold Fields-owned and is focused on a gold-silver deposit in the Atacama region of northern Chile. Mineralisation is contained within a high-sulphidation epithermal system, offering high-grade oxides. The project is at an elevation of 4,200m – 4,900m above sea level.

The Salares Norte feasibility study was completed in late 2018 and peer reviewed in January 2019. Gold Fields spent US$51m on feasibility study work and drilling in 2018 (2017: US$53m) with a further US$13m spent on district exploration. The findings of the feasibility study were presented to the Gold Fields Board in February 2019.

Key findings of the feasibility study include the following potential operational parameters for Salares Norte:

∎ Initial 11.5-year life-of-mine

∎ Annual throughput of 2Mt

∎ Life-of-mine production of 3.2Moz of gold and 26.7Moz of silver

∎ Average Annual production of 450koz gold equivalent for the first seven years of the project at AISC of US$465/Au-eq oz

∎ Average annual production of 355koz gold equivalent for the first 10 years of the project at AISC of US$545/Au-eq oz

∎ Project construction capital of US$834m (in current terms)

∎ Internal rate of return of 25% at a US$1,300/oz gold price with a 2.2-year payback period from commencement of production

The project envisages open pit operations with a processing plant that includes both Carbon-in-Pulp (CIP) and Merrill Crowe processes due to the high silver content of the ore. The processing plant could

deliver recovery rates of around 92% for gold. In addition, filtered and dry stack tailings will be used for safety, water scarcity and environmental reasons. Contractor mining is likely to be used for Salares Norte.

In December 2018, a maiden Mineral Reserve has been declared with 3.5Moz of gold and 39Moz of silver. The gold-equivalent Mineral Reserve is 4.0Moz.

A final go-ahead decision on the project hinges on the outcome of the Environmental Impact Assessment (EIA) for the project, which was accepted by the regulator for review on 11 July 2018. The EIA entails baseline research comprising hydrogeological, flora, fauna and biodiversity studies, including research and recommendations on the protection of the endangered short-tailed Chinchilla in the area. Gold Fields anticipates the EIA review to take 18 – 24 months to complete.

This time period will give Gold Fields sufficient time to consider funding options for the anticipated US$834m in project capital. Depending on the timing of the EIA decision, construction could commence in late 2020 with first gold production in 2023.

A pre-development budget of US$81m has been estimated to advance detailed engineering, permits and early works during 2019 and the first half of 2020, while we await the outcomes of the EIA and the permit to proceed. As at December 2018, Salares Norte controlled about 84,000ha of mineral rights concession in the Salares Norte district and has carried out extensive district-wide exploration within a 20km radius of Salares

Norte. It will continue investing in exploration in the area, with the objective to discover and deliver ore from these targets to the production pipeline from 2025 onwards.

Land easement for 30 years was granted on 30 May 2016 and water rights for the project were obtained on 29 December 2016, with the regulator granting Gold Fields access to 114.27l/second (more than double what the project is planning to use). Energy demand for the project is estimated at 12MW, with an independent power producer (IPP) operating an onsite 14MW diesel power station to meet this requirement. A staged approach to incorporating renewable energy sources is also being considered.

While there are no indigenous claims or community presence on the concession or the dedicated access routes, Salares Norte has embarked on an extensive engagement programme with three indigenous communities in the wider vicinity of the project. The principal area of social influence of the project – and, potentially, for recruiting labour – is the Diego de Almagro municipality, approximately 125km away. A long-term framework agreement has been signed with the municipality and its communities to govern the relationship. Furthermore, work protocols have been signed for the gathering of information and citizen participation process with two of the three communities, with the process ongoing for the third community.

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Managing our portfolio continued

Damang Reinvestment

The Damang Reinvestment project is set to extend its life-of-mine to 2025. It entails a major cutback to both the eastern and western walls of the Damang Pit Cutback (DPCB). When complete, the cutback is expected to have a total depth of 341m, comprising a 265m pre-strip to access the base of the existing pit. This will be followed by a deepening of the pit by a further 76m which will ultimately provide access to the full Damang ore body, including the high-grade Tarkwa Phyllite lithology.

The project is on track to begin sourcing higher-grade ore from the Saddle area of the DPCB towards the middle of 2019, and then reach the bottom of the main pit in early 2020. The Amoanda pit has been the main ore source during the cutback of the Damang pit, with positive grade reconciliation from Amoanda being

the main reason for the out performance of the project during 2017 and 2018.

The reinvestment project, which commenced on 23 December 2016, got off to a strong start in 2017 and continued to track well against plan during 2018. Total tonnes mined were 45.9Mt in 2018 (2017: 39.7Mt) versus the project schedule of 41.5Mt, driven by a good performance by both contractors (BCM and E&P). Gold produced of 180.8koz (2017: 143.6koz) was 13% higher than guidance of 160koz, underpinned by the high-grade material from the Amoanda pit, while AIC of US$1,506/oz (2017: US$1,827/oz) was below guidance of US$1,520/oz. Project capital of US$125m was spent during 2018, on top of the US$115m spent during 2017.

To ensure sufficient tailings capacity for Damang’s extended life-of-mine, a new tailings storage facility, the Far East Tailings Storage Facility (FETSF), with a tailings capacity of 44Mt, was commissioned in Q4 2017, on time and within budget. Decommissioning of the older East Tailings Storage Facility (ETSF) commenced during Q1 2018, and was completed during 2018, with all tailings now being deposited on the FETSF.

A sharp increase in Damang’s production from 181koz to 218koz has been guided for 2019, with AIC sharply reduced to US$100/oz (2018: US$1,506/oz). Project capital for 2019 is expected to be US$69m.

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Asanko

In March 2018, Gold Fields announced that it had entered into an agreement to form a 50:50 incorporated JV with Asanko Gold. In the deal, which went unconditional on 31 July 2018, Gold Fields acquired a 50% stake in Asanko Gold Ghana’s 90% interest in AGM, associated properties and exploration rights in Ghana (the Ghana government holds the remaining 10% through the legislated free carry arrangements). Our 45% stake in AGM is equity accounted as Asanko Gold remains the operator of the mine.

The acquisition was in line with the Group’s growth strategy of focusing on jurisdictions in which it already has an established footprint and can leverage off its infrastructure and skills set. A JV committee has been established which oversees the running of the JV.

AGM is a multi-deposit complex, with two main deposits, Nkran and Esaase, and nine known satellite deposits. The mine is situated 100km north of Gold Fields’ Tarkwa and Damang operations along the prospective and under-explored Asankrangwa greenstone belt in Ghana.

Gold Fields’ purchase consideration included an upfront payment of US$165m and a deferred payment of US$20m by 31 December 2019, or earlier if agreed development milestones at the Esaase project are reached. In addition, Gold Fields purchased 9.9% of Asanko Gold’s issued equity on the Toronto Stock Exchange through a private placement, for a total consideration of US$17.6m.

During 2018, AGM produced 223koz (100% basis) at an AISC of US$1,072/oz and an AIC of US$1,183/oz. Gold Fields’ share of the production for the period August – December 2018 was 44,500oz.

Guidance for 2019 is production of 225koz – 245koz (100% basis) at an AISC of US$1,090/oz – US$1,110/oz and AIC of US$1,130/oz – US$1,150/oz. The guidance includes oxide material from the Esaase deposit, which will be trucked about 30km to the processing plant. A feasibility study has been completed and the JV partners are currently deciding on the long-term development and associated ore transportation plans for the Esaase project in H2 2019.

An updated Mineral Reserve will also be released on completion of the feasibility study. Development capital of US$18m is planned for AGM during 2019, mainly on the development of Esaase.

AGM’s sizeable resource base, with a life-of-mine of at least 15 years at 2018 production rates, is accretive to the Gold Fields portfolio, with the potential for further discoveries on the large, relatively unexplored, tenement package of about 540km², held by Asanko Gold.

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Life extension through near-mine exploration

Near-mine exploration plays a key role in Gold Fields’ strategy as we believe it offers one of the lowest-cost opportunities for growing cash-flow, particularly on a per share basis. The value in near-mine exploration lies in:

∎ Knowledge of the ore bodies, which enables the exploration teams to identify extensions or additional ore sources housed within the mining tenement

∎ Operational capabilities, including Gold Fields’ proven ability to develop and mine orogenic ore bodies, which are prevalent at our Australian mines

∎ Regional and operational infrastructure, including existing processing plants and regional management teams

In addition to adding to Gold Fields’ Mineral Resource and Mineral Reserve base, near-mine exploration:

∎ Extends the life of the Group’s existing mines

∎ Ensures each region can continue to leverage its infrastructure

∎ Provides a robust platform for regional growth

In 2018, Gold Fields spent US$80m on near-mine exploration (2017: US$87m), which supported a total of 507,497 metres of near-mine drilling (2017: 754,669 metres). The majority of this spending – US$63m (A$85m) (2017: US$75m (A$99m)) – was incurred at our Australian mines. US$14m was spent in Ghana, which is slightly higher than the US$11m spent in the region in 2017, amid a renewed focus on extending the life of the Tarkwa mine.

For 2019, Gold Fields has budgeted US$63m for near-mine exploration of which US$57m (A$76m) will be at our Australian operations.

Following is a breakdown of brownfields exploration at our operations during 2018:

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Safe

operational

delivery

In order to deliver sustainable financial returns, meet our strategic promises and achieve our aim of zero harm, we need the right people in the right roles with the right skills, ongoing investments in technology, and an innovative approach to energy cost management.
	∎	Introduction	p54
	∎	Operational performance overview	p54
	∎	Safety	p59
	∎	Health	p63
	∎	Energy cost management	p66
	∎	Innovation and technology	p70
	∎	A fit-for-purpose workforce	p72

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54 The Gold Fields Integrated Annual Report 2018

Operational performance

Introduction During 2018, Gold Fields continued to expand its international footprint with the acquisition of a 45% stake in the Asanko gold mine (AGM) in Ghana. The portfolio is geographically diversified, boasting eight mines in four regions, only one of which is in South Africa. In addition, investment into the Gruyere project in Australia continued as planned during 2018. The project remains on track to start contributing to the production profile during Q2 2019, and is set to reach steady state production towards the end of 2019 or early 2020. At name plate, Gold Fields’ share of Gruyere’s production is expected to be 150koz, bringing production in the Australian region to approximately 1Moz.   In another positive development, the feasibility study on Salares Norte in Chile was completed during the year, showing an internal rate of return of 25% at a US$1,300/oz gold price (for more details refer to p47). While there is more work to be done on the project, Salares Norte offers longer-term optionality to the production base.   The Group’s broader strategy is focused on reducing Group All-in costs (AIC) and improving cash generation. Our international operations (excluding South Africa) lived up to this mandate during 2018, with each mine meeting or exceeding production and cost guidance for the year. The solid operational and cost performances of our Australian, Ghanaian and Peruvian assets contributed to strong overall Group results and enabled Gold Fields to contain the net debt increase during a year in which US$295m in project capital was incurred.   Some of the key investments made during 2018 in order to bolster the longevity of our portfolio include: ∎  A$153m (US$115m) (2017: A$182m (US$139m)) spent on the Gruyere project in Western Australia (p44) ∎  US$125m (2017: US$115m) in project capital spent at our Damang mine in Ghana (p48) ∎  Near-mine exploration spending of A$85m (US$63m) (2017: A$95m (US$72m)) in Australia (including Gruyere) and US$14m (2017: US$11m) in Ghana (p50) ∎  US$51m (2017: US$53m) spent on feasibility study work and further exploration drilling at Salares Norte in Chile (p47)

Group operational performance

	2019 Guidance				2018 Actual				2018 Guidance				2017 Actual
	Prod       (Moz)		AIC     (US$/oz)		Prod       (Moz)		AIC     (US$/oz)		Prod       (Moz)		AIC     (US$/oz)		Prod       (Moz)		AIC     (US$/oz)
Group		2.13		1,075						2.08		1,190
		-2.18		-1,095		2.04		1,173		-2.10		-1,210		2.16		1,088

In 2018, Gold Fields’ attributable gold-equivalent production decreased by 6% to 2.036Moz, driven predominantly by the underperformance at South Deep, which was compounded by a six-week strike on the mine during Q4 2018. The Group performance takes into account attributable production from AGM from 1 August 2018, with the acquisition having gone unconditional on 31 July 2018.

The Group achieved AIC of US$1,173/oz in 2018, which was lower than guidance (US$1,190/oz – US$1,210/oz), but higher than the US$1,088/oz recorded in 2017. The year-on-year increase in AIC was driven by an increase in non-sustaining capital and Salares Norte expenditure, coupled with the lower

level of gold sold. Group All-in Sustaining Costs (AISC) increased to US$981/oz from US$955/oz in 2017, and were lower than the guidance of US$990/oz – US$1,010/oz.

During 2018, Gold Fields maintained the capital expenditure (capex) levels deemed critical to sustain the portfolio. With the focus on extending the life of our ore bodies at all of our international mines, Group capex remained elevated at US$814m (excluding Asanko) (2017: US$834m). This comprised sustaining capital of US$524m and project capital of US$290m.

Regional capex highlights included:

∎ Australia: Our Australian mines decreased capex to A$373m (US$279m) in 2018 from A$423m

(US$324m) in 2017, with near-mine exploration spending amounting to A$85m (US$63m) in 2018 (2017: A$95m (US$72m))

∎ South America: At Cerro Corona, capex decreased slightly to US$33m in 2018 from US$34m in 2017

∎ West Africa: Capex declined to US$290m (excluding Asanko) (2017: US$313m), mainly as a result of lower expenditure on the mining fleet at Tarkwa. Project capital at Damang increased to US$125m in 2018 from US$115m in 2017

∎ South Africa: Capex at South Deep decreased to US$58m in 2018 from US$82m in 2017, with project capital remaining stable at US$18m (2017: US$17m)

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South Africa region

	2019 Guidance		2018 Actual		2018 Guidance		2017 Actual
	Prod	AIC	Prod	AIC	Prod	AIC	Prod	AIC
	6,000kg	R610,000/kg	4,885kg	R854,049/kg	10,000kg	R540,000/kg	8,748kg	R600,109/kg
South Deep	(193koz)	(US$1,394/oz)