Gold Fields Unveils Plan to Grow Production and Returns
First capital markets day held in London to reveal five-year plan
Gold Fields (JSE: GFI) has held its inaugural capital markets day in London, providing details on growth, exploration and capital allocation.
The company operates nine mines across five countries and is aiming to have 10 mines across six countries with the addition of the Windfall development project in Canada.
Guidance for 2025 is 2.25-2.45 million ounces of gold at all-in sustaining costs of US$1500-1650 an ounce and all-in costs of US$1780-1930/oz.
Gold Fields expects production of 2.4-2.8Moz from 2026-28, rising to 2.5-2.8Moz in 2029 as Windfall starts production and 2.8-3.1Moz from 2031 onwards.
The company outlined US$2 billion of discretionary investments to support its growth target.
Around 35% of the spend is stripping at the Agua Amarga deposit at Salares Norte in Chile, while another 20% of the funds will be spent on materials handling systems at St Ives and Granny Smith in Western Australia to extend mine lives and reduce costs.
Windfall
Gold Fields provided an update on the Windfall project in Quebec, including budget and schedule.
The company originally invested in the project in 2023 and acquired the remaining 50% via the takeover of Osisko Mining last year.
“I think the investment in 2023 was a very smart investment which allowed us access at a very low entry cost, and I think when Osisko decided to put themselves up for sale last year, we were absolutely convinced this was the right deal for us,” Fraser said.
“At that time, it felt like a little bit early in the piece for us on the development, but in hindsight, that was absolutely perfect timing, and the fact we now have 100% control of the asset at a very low entry price – I always say, I think if this asset, at 100% terms, was available in the market today, we probably would not be able to be competitive.”
The first phase of Windfall will produce 300,000oz per annum at AISC of US$1000/oz over 10 years.
Capital costs for the project have been forecast at US$1.7-1.9 billion with first gold in the first half of 2029.
“We are still working very hard on delivering a potential upside case of H2 2028 but it really depends on permitting,” Fraser said.
“Because what’s crucial for us is to do tree-clearing during the course of April next year, and if we miss the tree-clearing period, then we go into May, and then we probably run out of time to get the camp constructed and completed before you get into the winter season, so that’s the first window for us to be on track for the upside case, which is H2, 2028.
“If we lose that, then the next critical date is for us to get primary and secondary permits in place by September of 2026, which then allows us to do clearing in the back end of H2, and also have the pond collection dams in place during Q4 of 2026 which sets us up for civil works in early 2027.”
Exploration
Gold Fields plans to spend more than US$100 million per year on brownfields exploration and more than US$50 million per year on greenfields.
Its greenfields portfolio comprises 19 projects, while the company invested C$50 million in Founders Metals (TSXV: FDR) last week for a 10% stake.
According to Fraser, Gold Fields’ greenfields exploration program has been reinvigorated.
“If we spend US$50 million a year on greenfields over 10 years, and you come out with two really advanced projects that you’re taking into development pipeline, that’s a really, really good acquisition cost, so that’s how we think about it.”
Exploration will continue at Windfall, where only around 10% of the ground has been explored.
Fraser said the Urban-Barry and Quevillon camp, covering 2400sq.km, could rival the 1400sq.km Val-d’Or mining camp, which has produced 100Moz and has an inventory of 47Moz.
Capital allocation
Gold Fields’ board has approved a revised dividend policy which includes a targeted base dividend of 35% of free cashflow before discretionary growth investments, with a minimum dividend of US50c per share, subject to maintaining an adjusted net debt to adjusted EBITDA ratio of below 1.0 times.
If the minimum is lower than the targeted 35%, Gold Fields will make a top-up payment to bring the total base dividend to 35% of free cashflow before discretionary growth investments.
The company also pledged to return an additional US$500 million to shareholders over the next two years in the form of share buybacks and/or special dividends.
Based on consensus gold prices, Gold Fields expects to generate around US$20 billion of cashflow over from 2026 to 2030.
“Those kind of cashflow returns, it’s kind of quite eye-watering when you think about what the market value of the company is,” Fraser said.
Fraser stressed that the five-year plan was a base case.
“We’re not going to sit on our hands and say, ‘this is the best that it can be’,” he said.
“We’re working really hard every day to see what we can do to further optimise and improve our business.
“Ultimately, improvement comes off a very stable base, so I’ve got every confidence that our plan over the next five years really sets our business up to be sector-leading in terms of the cash generation in the business.”