Martin Preece, Executive Vice President South Africa,

GOLD FIELDS

"In South Africa we continue to invest in our South Deep mine as we improve efficiencies and returns."

What was South Deep’s production performance in 2020 amid the pandemic? What is your guidance for 2021-2022?

After a good start to 2020, South Deep was placed on care and maintenance for the first four weeks of Q2 2020 in compliance with government-imposed Covid restrictions. South Deep continued to operate well below its full labour complement for the remainder of Q2 2020.

Despite this, gold production increased by 2% to 227,000 oz from 222,000 oz in 2019. Had it not been for Covid disruptions, South Deep would have exceeded its original production guidance of 257,000 oz.

Encouragingly, South Deep generated net cash-flow of R558 million (US$34 million) in 2020, more than double the R221 million (US$15 million) recorded in 2019. Gold production for 2021 is guided at 280,000 oz. Looking beyond 2021, we are optimistic that a further 20% – 30% can be added to production levels over the next four years.

What changes did South Deep introduce to enhance operational efficiency?

The improvements were the result of several initiatives the mine implemented following the restructuring at the end of 2018, principally the Siyaphambili intervention, which continued to bear fruit in 2020. This is a middle management and supervisory leadership program focusing on building the capacity and capability of our middle managers and front-line supervisors. The Siyaphambili intervention also includes a Maintenance Improvement Program focusing on improving the reliability and effectiveness of our fleet.

The mine's overall productivity improved to 303 tonnes per employee in 2020 from 286 tonnes per employee in 2019.

Can you elaborate on your solar plant investment at the South Deep mine?

The estimated capital investment for the plant is R660 million, including contingencies and escalation. This will be funded from the mine’s positive cash-flows over the next two years. The unsustainable tariff increases and unreliable supply of electricity from Eskom is a major risk for all mining companies. Once completed, the solar plant has the potential to provide around 22% of South Deep’s average electricity consumption, translating into a cost saving of roughly R120 million per year and reducing our carbon footprint by 100,000 tonnes per year from 490,000 tonnes to 390,000 tonnes.

The solar plant will further enhance the sustainability of South Deep, resulting in stakeholders benefiting more from the mine’s activities for longer.

Could you outline the extent to which you rely on automated and remote equipment and machinery at South Deep?

The adoption and successful deployment of technology and remotely operated equipment is an imperative for South Deep as it will give us an opportunity to leverage a step change in our safety and health performance, our productivity, and allow us to unlock a fuller operating window as a result of not being delayed by current shift change arrangements. South Deep currently makes extensive use of line of sight remotely operated Load, Haul Dump Loaders (LHDs) for loading in unsupported long hole stopes. Long hole stopes make up approximately 60% of the ore mined.

As we build on this capability, South Deep has converted underground impact breakers to function tele-remotely, operated from our surface control center. We have also successfully deployed a non-line of sight tele-remote LHD, also operated from the surface Control Centre, and are currently commissioning a second machine to expand this capability. The LHD is fully automated except for the loading activity that that is still performed by the operator from the surface operator station. This capability will be expanded to our underground truck fleet that will operate in separate haulages.

Can you elaborate on Gold Fields’ investment plan in Africa in the upcoming years?

Gold Fields is investing significantly in its African operations. We have spent over US$340 million on our Damang mine in Ghana over the past few years and have also acquired a 45% stake in the Asanko mine in Ghana in 2019. In South Africa we continue to invest in our South Deep mine as we improve efficiencies and returns. As such we do not envisage further capital investments in the region beyond annual sustaining capital expenditure. Having said that, the gold market is very dynamic at the moment and it would be remiss of us not to be alert to potential M&A opportunities on the continent that could add shareholder value.