Outlook for 2016

As a result of the better than expected performance at South Deep, we have increased the 2016 production guidance for the mine to 9,000 kilograms (289,000 ounces) from 8,000 kilograms (257,000 ounces). However, we have also increased the AIC guidance for the year to R595,000 per kilogram (US$1,310 per ounce) from R575,000 per kilogram (US$1,265 per ounce). The higher AIC relates to increased capital expenditure of R211 million (US$15 million) to R1,210 million (US$86 million) due to a change in strategy on housing (decision to build instead of rent) and the acquisition of additional new fleet. The remainder of the increase is due to higher working costs, which comprise higher bonuses due to higher gold production achieved relative to plan as well as the investment in additional resources in line with the strategy to sustainably improve all aspects of the operation.

For Tarkwa, we have increased the 2016 AIC guidance to US$980 per ounce from US$940 per ounce, mainly due to a US$38 million increase in capital expenditure to US$166 million. The mine took advantage of the higher gold price and the benefits from the Development Agreement to increase capital stripping in order to increase flexibility for 2017 and beyond.

Based on the outperformance of the Australian operations relative to plan in the first half of 2016, we have increased the 2016 production guidance for the region to 925,000 ounces from 905,000 ounces.

Consequently, 2016 production guidance for the Group has been increased to 2.10 million ounces to 2.15 million ounces, from 2.05 million ounces to 2.10 million ounces. AISC and AIC guidance for the year remains unchanged at US$1,000 per ounce to US$1,010 per ounce and US$1,035 per ounce to US$1,045 per ounce. AIC includes US$50 million for Salares Norte. Group capital expenditure has increased to US$655 million, from U$602 million. The cost guidance is based on unchanged exchange rate assumptions: US$0.73 = A$1.00 and R14.14 = US$1.00.

The above is subject to safety performance which limits the impact of safety-related stoppages and the forward looking statement on page 3.

BASIS OF ACCOUNTING

The unaudited condensed consolidated six monthly financial statements are prepared in accordance with International Financial Reporting Standard, (IAS) 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards Council and the requirements of the Companies Act of South Africa.

The accounting policies applied in the preparation of these six monthly financial statements are in terms of International Financial Reporting Standards and are consistent with those applied in the previous annual financial statements.

CERTIFICATION JUDGEMENT

As previously indicated, the Respondents in the Certification Application, including Gold Fields, all opposed the certification application, which was heard by the Gauteng Local Division of the High Court from 12 to 23 October 2015.

On 13 May 2016, the High Court ordered, amongst other things: (1) the certification of two classes: (a) a silicosis class comprising current and former mine workers who have contracted silicosis and the dependents of mine workers who have died of silicosis; and (b) a tuberculosis class comprising current and former mine workers who have worked on the mines for a period of not less than two years and who have contracted pulmonary tuberculosis and the dependents of deceased mine workers who died of pulmonary tuberculosis; and (2) that the common law be developed to provide that, where a claimant commences suing for general damages and subsequently dies before close of pleadings, the claim for general damages will transmit to the estate of the deceased claimant.

The progression of the classes certified will be done in two phases: (i) a determination of common issues, on an opt out basis, and (ii) the hearing and determination of individualized issues, on an opt in basis. In addition, costs were awarded in favour of the Claimants. The High Court ruling did not represent a ruling on the merits of the cases brought by the Claimants. The amount of damages has not yet been quantified for any of the claimants in the Consolidated Class Application or for any other members of the classes.

Gold Fields and the other Respondents believe that the judgment addressed a number of highly complex and important issues, including a far reaching amendment of the common law, that have not previously been considered by other courts in South Africa. The High Court itself found that the scope and magnitude of the proposed claims is unprecedented in South Africa and that the class action would address novel and complex issues of fact and law. The companies applied for leave to appeal against the judgement because they believed that the court's ruling on some of these issues is incorrect and that another court may come to a different decision.

On 24 June 2016, the High Court granted the mining companies leave to appeal against the finding amending the common law in respect of the transmissibility of general damages claims. It refused leave to appeal on the certification of silicosis and tuberculosis classes.

On 15 July, the Gold Fields and the other Respondents each filed petitions to the Supreme Court of Appeal for leave to appeal against the certification of the two separate classes for silicosis and tuberculosis. In an attempt to shorten any delay due to an appeal process, it is permissible to request that the appeals be dealt with on an expedited basis. The companies intend to do this, should leave to appeal be granted by the Supreme Court of Appeal.

GOLD WORKING GROUP

The Occupational Lung Disease Working Group, made up of African Rainbow Minerals, Anglo American SA, AngloGold Ashanti, Gold Fields, Harmony and Sibanye Gold, remains of the view that achieving a mutually acceptable comprehensive settlement which is both fair to past, present and future employees, and sustainable for the sector, is preferable to protracted litigation. Notwithstanding that the companies deny liability for the claims, the Working Group will continue with its efforts – which have been ongoing for more than a year – to find common ground with stakeholders, including the claimants' legal representatives

N.J. Holland
Chief Executive Officer
18 August 2016