Gold Fields Limited — FY2022 Form 20-F
Reporting period: Year ended 31 December 2022; filed 30 March 2023. This is an annual report, not a standalone 2022 fourth-quarter report, and the filing text does not provide a clear standalone Q4 financial result. Financial statements are prepared under IFRS and presented in U.S. dollars.
Business context and reporting period
Gold Fields is a South African gold producer with operations in South Africa, Ghana, Australia and Peru, and the Salares Norte development project in Chile. Fiscal 2022 attributable gold-equivalent production was 2.399 million ounces, including its 45% interest in Asanko. Gold Fields reported 891,378,571 ordinary shares outstanding at year-end.
Key financial and operating metrics
| Metric | FY2022 | FY2021 | Change / context |
|---|---|---|---|
| Revenue | US$4.287bn | US$4.195bn | Up 2%, mainly from higher sales volumes |
| Profit for the year | US$721.7m | US$829.5m | Down 13% |
| Profit attributable to owners | US$711.0m | US$789.3m | Down 10%; basic EPS fell to 80 cents from 89 cents |
| Normalised profit attributable to owners | US$860m | US$929m | Down 7%; non-IFRS measure |
| Net cash from operations | US$1.715bn | US$1.600bn | Up 7% |
| Cash flows from operating activities | US$1.379bn | US$1.230bn | Up 12% |
| Adjusted free cash flow | US$431m | US$463m | Down 7%; excludes the Yamana break fee and related costs and taxes |
| Capital expenditure | US$1.069bn | US$1.089bn | US$656m sustaining and US$413m growth capital |
| Gold-equivalent production | 2.399Moz | 2.341Moz | Up 3%; excluding Asanko, attributable production was 2.322Moz |
| Average realised gold price | US$1,785/oz | US$1,794/oz | Down 1% |
| AISC / AIC | US$1,105/oz / US$1,320/oz | US$1,063/oz / US$1,297/oz | AISC up 4%; AIC up 2%. Both are non-IFRS measures |
| Cash and cash equivalents | US$769.4m | US$524.7m | Up US$244.7m |
| Borrowings / net debt | US$1.079bn / US$704m | US$1.078bn / US$969m | Net debt includes lease liabilities; net debt-to-adjusted EBITDA was 0.29x versus 0.40x |
| Total equity | US$4.340bn | US$4.130bn | Up US$209m |
| Dividends | R7.45 per share | R4.70 per share | 2022 included an elevated payout supported by the Yamana fee |
Additional balance-sheet context: total assets were US$7.338bn and total liabilities US$2.999bn. Lease liabilities were US$394.2m. The Group reported US$1.804bn in undrawn committed borrowing facilities and US$80m in uncommitted facilities at year-end. Management stated that working capital resources and available facilities were sufficient for foreseeable requirements. The financial statements received an unqualified audit opinion; the auditor also concluded internal control over financial reporting was effective.
Material changes versus FY2021
- Production rose 3% and revenue rose 2%, but cost of sales increased 10% to US$2.608bn, reflecting inflation and higher depreciation and amortisation. Group-weighted effective mining inflation was 10.7%.
- Profit attributable to owners fell 10%, with US$505m of net impairments, primarily at Tarkwa (US$325m), Cerro Corona (US$63m) and Far Southeast (US$114m, written down to nil).
- Net debt declined by US$265m, despite high capital expenditure. Cash increased, while dividends paid in the cash-flow statement decreased to US$336m from US$370m.
- South Deep production increased 12% to 328koz and generated positive adjusted free cash flow for a fourth consecutive year. Australian production rose 4% to 1.061Moz; Ghanaian production, including Asanko, fell 4% to 838koz.
- Gold Fields terminated its proposed Yamana acquisition after a competing offer emerged. It recognised a US$300m termination fee and US$33m of transaction costs. The filing describes the fee as US$202m net of taxes and costs for capital-allocation purposes, while the adjusted free-cash-flow reconciliation separately deducts US$127m of net fee, costs and tax; timing and tax-recovery details merit verification.
- Leadership changed materially: CEO Chris Griffith left at year-end and Martin Preece became interim CEO on 1 January 2023. Four other executives also resigned or announced resignations during 2022.
Outlook, commentary, risks and contingencies
- 2023 guidance: Attributable gold-equivalent production of 2.25–2.30Moz, excluding Asanko; AISC of US$1,300–1,340/oz; AIC of US$1,480–1,520/oz; and total capital expenditure of US$1.11–1.17bn. Guidance assumes exchange rates of R17.00/US$1 and US$0.70/A$1. Management cautions that a St Ives renewable microgrid approval could add US$25/oz to both cost ranges.
- Salares Norte: The project was approximately 87% complete at year-end. First gold was expected in Q4 2023, with 15–35koz expected in 2023; production was forecast at about 500koz in 2024 and 600koz in 2025. Estimated total project capital cost increased to approximately US$1.02bn. COVID-related disruption, severe weather and contractor skills shortages drove delays and cost pressure.
- Longer-term outlook: Management forecast production, excluding Asanko, of 2.72–2.77Moz in 2024 and 2.79–2.82Moz in 2025. It expects Damang and Cerro Corona to mature, placing greater importance on replacement growth and reserve conversion.
- Capital allocation: The dividend payout policy was increased to 30–45% of normalised earnings from the 2023 interim dividend onward, from 25–35%. Management also prioritises Salares Norte, sustaining investment and further debt reduction. Refinancing of facilities falling due in 2023 was planned.
- Proposed Ghana joint venture: Gold Fields and AngloGold Ashanti agreed key terms to combine Tarkwa and Iduapriem, with Gold Fields as operator. The proposal remained subject to agreement with Ghana’s government, due diligence and regulatory approvals. The proposed ownership, excluding Ghana’s interest, was 66.7% Gold Fields and 33.3% AngloGold Ashanti.
- Tax and legal matters: Gold Fields is disputing a Ghana Revenue Authority assessment of about US$124m for 2018–2020; about US$63m relates to the tax treatment of waste-stripping costs. The filing says US$15m was paid for non-Development-Agreement items while discussions continued. A separate silicosis settlement provision was US$10.5m; the ultimate number of eligible claims remains uncertain. Other disclosed matters include a substantial Randgold and Exploration claim, and potential acid-mine-drainage exposure for which the Group could not reliably estimate total impact.
- Operating and country risks: Key exposures include gold and currency volatility, persistent inflation, energy cost and reliability, Ghanaian fiscal and regulatory pressure, political uncertainty in Peru and Chile, reserve replacement, contractor performance, cybersecurity, safety, water access, tailings integrity and climate-related events. One fatality and five serious injuries were recorded in 2022; three additional contractor fatalities were reported at Tarkwa and Asanko after year-end.
- Environmental commitments: Targets include 30% net and 50% absolute reductions in scope 1 and 2 emissions by 2030 from a 2016 baseline, and net zero by 2050; 80% water recycling/reuse and a 45% reduction in freshwater use by 2030; and tailings-standard conformance. The filing notes uncertainty in scope 3 data and identifies certain emissions-avoided projects as exceptional continuous projects.
Most important facts for investors to verify
- Obtain standalone Q4 operating and financial figures separately; this filing reports full-year results and does not provide a clear Q4-only value.
- Track Salares Norte commissioning, first-gold timing, revised total project cost and 2023 production contribution.
- Confirm the status and amount of the disputed Ghana tax assessment, related payments and any subsequent resolution.
- Check refinancing progress and liquidity available as revolving facilities approach maturity.
- Verify approval status, final ownership, terms and expected benefits of the proposed Tarkwa–Iduapriem joint venture.
- Reconcile Yamana termination-fee disclosures, including the US$202m net amount and the US$127m cash-flow adjustment, and the timing of any tax refund.
- Monitor reserve replacement, impairments, inflation and cost guidance, together with the assumptions behind non-IFRS AISC, AIC and adjusted free cash flow.
- Review safety performance, tailings conformance, environmental liabilities and progress toward climate and water targets.