Ian Cockerill Thanks very much Willie. Morning everybody. You can - PDF document

Introduction – Willie Jacobsz - Good morning ladies and gentlemen. Welcome to the Q2 quarterly results for Gold Fields Ltd. I just want to assure you that we’ve learnt a lot about power outages in the last few days and we do have stand-by generators and UPSs and so on, so we hopefully won’t be without power. May I ask you all to just switch off your cell phones please? We would also like to particularly welcome the people who are watching the presentation on DSTV and those on the website. The procedure we will follow is that Back To Work Back To Work Ian will kick off and people will then speak in the order that they’re sitting here, and then afterwards there will be time for questions. After the presentation and the Q&A time we Q2 F2008 Results will be serving some food, but it’s out that door this time and not this one. And we will 31 January 2008 have a press media interview in one of the rooms behind us immediately after the presentations. Good. We hand over to Ian now. Ian Cockerill Thanks very much Willie. Morning everybody. You can see the title of our presentation Introduction Introduction today is “Back to Work” and back to work we are, albeit somewhat slowly and somewhat patchily. But I always think in times like this its quite important to have at least some sense of humour., It is a serious subject, but having said that it is nice to show you that Gold Fields is trying to do something. I think also on another highlight point, it is quite pleasing for us as the headline sponsors of the Ghanaian Black Star soccer team to see them getting through to the knockout stages of the African Cup of Nations. And probably the one highlight this last week that I’ve had is that last night Liverpool got beaten by West Ham and is now four places below Everton. So at least there have been some good points for this particular week. 4 Just looking at the quarter as a whole, actually the quarter under review was… we gave the guidance in early December on where we were going to be on production, but it was pleasing to see that our net earnings are up quite significantly to just below R2 billion. If Introduction Introduction you strip out all the funnies, the unrealised gains, if you look at the forex gains and losses, Highlights Highlights even on a bottom-line earnings basis it is still up nearly half to over R600 million. Obviously we’re starting to see the higher price translate through into stronger operating margins across the group, which I know has always been a major concern for everyone. Investors want to see this higher price coming through into the margin, and we’re consistently seeing that now. Production was down 3% to 960,000 ounces, bearing in mind this is comparing quarter on quarter without Choco either in this quarter or the previous quarter. But despite the production being down slightly, unit cash costs were only up 3% to just over R101,000 per kilogram. And I think it shows the degree of cost control that we are trying to bring to this business. Now normally we would be paying a dividend in this quarter, but it was decided by the board last night, solely on the basis of Gold Price Captured in Margin Growth Gold Price Captured in Margin Growth 5 the current power crisis, it was deemed prudent not to pay a dividend in this quarter. But it’s basically because of the power situation, and let’s see what eventuates. Other things that happened in the quarter that are pleasing to see: the sale of two assets, Introduction Introduction Corporate Action Corporate Action firstly the Essakane project in Burkina Faso sold for $201 million. That can all report to the bottom line. Nick can talk more about that later. And we also took the conscious decision to sell our controlling interest in Choco 10 in Venezuela to Rusoro. Although we did land up as part of this deal as still being a 38% shareholder in Rusoro. US$201 million US$532 million* * Priced on the day of the sale Upgrading the Portfolio Upgrading the Portfolio 6

̵ ̵ ̵ ̵ ̵ ̵ ̵ ̵ But we’re out of Venezuela as an operating entity. I think the other important feature that Introduction Introduction Cerro Corona Project Cerro Corona Project certainly has occurred over the quarter is that towards the end of the December quarter the slippage that we had seen in the Cerro Corona project has started to reverse. John will give you a lot more detail later on, but it is pleasing to see the recovery in the situation LOM Salient Features LOM Salient Features Ore 6.2mtpa there. And the situation is looking a lot healthier than it did a couple of months back, so Au 150koz Cu 57mlb Cu (26kt) we are very pleased. And John can give you more details. Au equiv* 360koz pa* Strip ratio 0.58 X Cash costs ~ US$320/oz Capital US$421m EBITDA contribution* = (0.15*900 + 57*3.3) – EBITDA contribution* = (0.15*900 + 57*3.3) – (120) = ~US$203mpa (120) = ~US$203mpa * Au equiv and EBITDA calc : US$900/oz Au and US$3.3lb and typical LOM parameters 7 Now clearly the one issue which is paramount in everybody’s minds is what are the consequences of this situation in which we find ourselves here in South Africa? Well as things stand we have been told by Eskom that as of this evening they have said to us that they hope to put us back into a position where we will get 90% of our normal power allocation. And if you look at that, the normal power allocation is somewhere in the order of 600 megawatts of total power. So we’re going to be looking at a total power supply to our mines going forward hopefully of around 540 megawatts. Now clearly over the past few years we’ve done an awful lot on energy efficiency and looking at more effective ways of utilising our power, a lot of demand side programmes. So we’ve actually teased out a lot of efficiency savings from our operations. But I think in a situation like this we clearly have got to see what else we can do, both short-term and long-term, to reduce the amount of power that we need to keep our mines running. Bear in mind, we require at least half of that 600 megawatt just to keep our mines in a steady state condition. And by that I mean literally emergency pumping, minimal ventilation and minimal refrigeration. There is no power allowance in there for running your compressors full tilt, hoisting or milling. So effectively over 300 megawatts is required just to keep your mine alive. On top of that mining takes an incremental amount. Introduction Introduction Consequences of Power Shedding Consequences of Power Shedding So you take 10% power away from overall, it actually eats into 20% of your mining • 10% energy saving imposed by Eskom • 10% energy saving imposed by Eskom capacity. So this is a serious issue. Clearly what we’ve got to do is look at how we Energy efficiencies across all mines Energy efficiencies across all mines prioritise our power, and that’s the work that the guys have spent a lot of time on over the Potential shedding of marginal production Potential shedding of marginal production • Reviewing power constrained options for South Deep last week, seeing how we can do that. Obviously when it comes to power constraints • Reviewing power constrained options for South Deep everything has to be looked at. Even something like South Deep, a critical part of Gold • Q3 08 Production: down 20% to 25% • Q3 08 Production: down 20% to 25% Christmas break Christmas break Fields’ future, a very important part, and will continue to be an important part of Gold Power shedding Power shedding Fields’ future, even that has to be looked at as well. What is the impact on production • Steady state production at 90% power: down 15% to 20% • Steady state production at 90% power: down 15% to 20% here in South Africa? Well, it’s difficult to say at this stage, because we’re still building back up again. But the first part that we can see is the power outages we have had, the normal slow start-up after the Christmas break, all of those features are likely to mean South African Mines Back At Work South African Mines Back At Work 8 that we will be down between 20% and 25% on South African production in the March quarter. That’s just a guideline. I can’t give it to you any more accurately than that because we don’t know how quickly we can build our production back up or how the power comes online. But I know that you’re going to ask that question. We tried to give you an effective range. However, on assuming a normal quarter, and assuming 90% of power, the best guess that we can come up with is that production from South Africa would be down – using the September quarter as a proxy – somewhere north of 15%. That should give you 15% to 20%. That will give you a ballpark number to think about. As things stand at the moment we are moving back. We have started to hoist at Driefontein as well as Beatrix. Beatrix is less affected, being a shallower mine, and can get moving a bit quicker. It’s a cooler mine than our deeper-level mines. Already we’re around 40% to 50% of normal hoisting, and we started to do some limited milling. But I must stress this is a very serious situation. We take it seriously. The guys on the operations have done a fantastic job of analysing where we should be applying the scarce power, and make sure that we’re maximising the returns that we get for that scarce power. I think with that brief introduction let me hand you over to Nick.