Earnings Call Transcript - GFI Q4 2023

Mike Fraser, CEO

Good day, everybody, and welcome to Gold Fields’ 2023 Financial Results Presentation. For those of you that I haven’t yet met, my name is Mike Fraser and I have been CEO of Gold Fields since January 1, 2024. I took over from Martin Preece, who was Interim CEO during the course of 2023, and I want to thank Martin again for his contribution over the past 12 months. We distributed our results book earlier today. And if you haven’t seen it, it is on our website at goldfields.com. On the first slide of this presentation is a photo of the Brecha Principal pit at Salares Norte. It indicates a significant amount of activity that has taken place over the past 2 years in mining the ore body. This has enabled us to have 520,000 ounces of contained gold in our stockpiles ahead of processing at our processing plant under construction. If we go to the next slide, please take note of our forward-looking statement, which you can peruse on our website. Just moving on to the next slide, which is our agenda. Our agenda for today includes going through the 2023 overview. I’ll talk about safety and sustainability in the business, an operational overview, and an update on Salares Norte. Paul will take us through the financials and then we will end with guidance for 2024. Just moving on to the next slide. I believe Gold Fields offers a very strong value proposition. We have a clearly defined and well-executed strategy consisting of our three pillars that have been clearly communicated previously. We have a geographically diverse portfolio in attractive mining jurisdictions. The addition of Windfall last year was a significant improvement in the portfolio. We have a track record of meeting cost and production guidance. In 2023, we again achieved cost guidance and achieved 99.7% of our production guidance. We are fortunate to have a quality pipeline of projects in Salares Norte, a world-class deposit in the Northern Atacama desert. The proposed Tarkwa-Iduapriem JV in Ghana will create one of the largest gold mines in Africa, and the Windfall project in Canada is another high-quality project in Quebec, an attractive mining jurisdiction, and more of this later in the presentation. What's important is having a disciplined capital allocation methodology and approach. Our first priority in capital allocation is investing in safe and reliable production at our assets. We focus on ensuring a strong balance sheet to maintain an investment-grade credit rating. We have had strong financials supported by tailwinds in the gold price, with sound debt levels at below 0.5% net debt to EBITDA. Next in our capital allocation profile are shareholder returns in the form of a base dividend, in line with our policy. The focus for 2024 includes materially improving our safety performance. I’ll talk more about this later, but 2023 was a significant disappointment. We need to ensure predictable delivery of our operating plan, take steps to mitigate the recent cost trajectory, and deliver on our clear portfolio initiatives, which will contribute to reducing our cost trajectory. Lastly, we pride ourselves on our ESG leadership. This is key to our strategy. In 2024, we will continue to progress on all six priority areas, particularly our decarbonization commitments, which I’ll address shortly. Moving on to our 2023 performance, starting with safety. Tragically, we had 2 fatalities last year, both at our Tarkwa mine in Ghana, and on January 2 this year, we had another fatality at South Deep. Clearly, this is unacceptable. In response, we have commissioned an independent review of our overall safety system of work, culture, and processes to develop a single safety work system fit for Gold Fields that will provide a high level of assurance regarding our ability to work safely. I mentioned cost and production performance earlier. While we achieved our guidance in 2023, it is critical that we deliver on our guidance in 2024. We delivered an adjusted free cash flow of $367 million after operating cash flow from operations of just over $1 billion. Although we increased debt marginally, mainly to fund the Salares Norte project, our debt levels at 0.42x net debt to EBITDA are stable and healthy. We continue to pay strong dividends and declared a final dividend of ZAR4.20 per share, bringing the total for the year to ZAR7.45, unchanged from the 2022 dividend, generating a yield of just over 3%. I’ll address Salares Norte later, but we expect to commission with first gold by no later than April 2024. Earlier this week, the Board approved the go-ahead for a $195 million micro-grid at St. Ives, comprising both solar and wind. This will be our most significant renewable investment to date, providing nearly 75% of the mine’s electricity requirements and reducing the electricity bill by nearly half. Just moving on to our global overview. This is a snapshot of our business performance in 2023. We will go into individual performances in detail later, but it’s worth pointing out the strong contribution from our Australian operations, accounting for over 45% of our production ounces. All operations contributed to our adjusted free cash flow for the year, aided by higher gold prices and the great performance of our teams. A highlight is South Deep’s contribution, which provided over $200 million of free cash flow. A few years back, this was almost inconceivable, and considering where South Deep has come from, I see this as a great achievement. Moving on, let's address ESG, which, as you know, is our second pillar of Gold Fields' strategy. The 50-megawatt Khanyisa solar plant at South Deep has over 100,000 solar panels and produces around 22% of the site's electricity needs. Since late 2021, we set ambitious 2030 targets across our six key ESG priorities, three related to people and stakeholders and three environmental. Although we still face fatal and serious injuries in our business, we are proud to report no serious environmental incidents for several years. We are also making steady progress in increasing female representation in our business, achieving over 25% against our 30% target by 2030. We generated around $3.8 billion in contributions to our broader stakeholder groups and over $1 billion in our direct communities through procurement, employment, and investment. On the environmental front, I will discuss our decarbonization program shortly, which aims for a 30% net reduction by 2030. On tailings, this is a critical issue for us and the industry, and we are making significant strides in making our tailing facilities safer. Our technical team actively participates in industry standard setting and benchmarking. This year, we undertook a full self-assessment of our priority tailings at Tarkwa and Cerro Corona per global standards. Two of our upstream dams at Tarkwa are transitioning to downstream facilities. In terms of water stewardship, we are on track to meet our 2030 targets, including recycling 80% of our water use and limiting fresh water usage across our operations. Moving on to safety, we do have a lot of work to do across our industry, and Gold Fields is no different. After reporting 2 fatalities last year and 1 to date, we recognize the urgency to do more. We have various safety processes in place, covering both leadership-specific safety risk routines. We engage extensively with our employees to support safe design of work. We encourage them to speak up when they feel unsafe. If we cannot mine safely, we will not mine. Despite our efforts, we acknowledge this is insufficient, so we are engaging in an independent review. We will gather our teams to understand what needs to change and ensure safe, predictable work delivery. On the occupational disease frequency rate, there was a slight rise due to noise-induced hearing loss cases at South Deep and in Australia. You are also aware of the respectful workplace report carried out by Elizabeth Broderick & Company last August. We are committed to the 22 recommendations from that report and will provide further details in our annual report in March. Moving to decarbonization, our actions toward decarbonizing the business have been among our success stories. So far, five of our nine operations utilize renewable energy sources. With South Deep and Gruyere online, we achieved 17% of our total electricity mix from renewables, contributing to a 5% reduction in Scope 1 and Scope 2 carbon emissions, which we view as good progress over the past year. Last year, we also announced a target for Scope 3 emissions reduction of 10% by 2030. This may not seem substantial, but Scope 3 emissions account for 40% of our total emissions, requiring extensive engagement with our suppliers and contractors. We are committed to this decarbonization journey. As mentioned, the Board approved one of our most ambitious projects to date, the $195 million St. Ives micro-grid combining solar and wind with current gas supplies from the grid. This year, we will allocate significant funding toward this, as will be reflected in our 2024 capital plan. This project will enable St. Ives to source 73% of its energy needs through renewables and result in expected energy cost reductions of 50%. South Deep is also exploring wind farm studies to further decrease its electricity needs and reliance on Eskom. Lastly, I want to outline our journey to 2030. Our target is a 30% net decline in Scope 1 and 2 emissions. Given the uncertainty in gold production outlook, we concentrate on emissions intensity, as shown in the graph. We are making commendable progress and remain on track to meet our 2030 plan thanks to our planned and approved projects. The South Deep wind turbine project is included in the scoping and trials, and we have yet to account for the comprehensive renewables agreement signed with First Nations at the Windfall project in January this year. Beyond renewables, there is still much work to be done across the industry. We are committed to continuing studies for diesel replacement, extending beyond just battery electric vehicles to include conveyors and other ore transportation methods. When we announced our Scope 3 targets last year, we indicated we would return to the market in 2025 with a full review of our commitments for the remainder of the decade, which will certainly be reported back to the market. Turning to group and regional results for 2023, we have a photo of the Tarkwa open pit, being the largest mine in our portfolio, moving the most tons of dirt. Regarding group results, production was marginally down, 4% year-on-year, yet we delivered 99.7% of our guidance for 2023. Production for 2024 is guided to be 4% higher than 2023 numbers, even with 60,000 ounces from Asanko in 2023 and none in 2024. This year, we will see growth from Salares as it ramps up and South Deep's increase from 322,000 ounces in 2023. The 14% increase in all-in costs highlights some operational challenges we faced, with a focus on managing costs in 2024. Additionally, capital expenditure is set for significant increases over 2 years as we reinvest in the business. Again, capital discipline will be critical to ensure we deliver strong returns on our reinvestment. The operations generated adjusted free cash flow of just over $1 billion, which, after deducting net capital expenditures and other costs, resulted in group free cash flow of $367 million. Moving to Australia, the costs here are presented in Australian dollars to provide a year-on-year like-for-like comparison. This remains a cornerstone of our production base, generating around 1 million ounces, which is about 45% of our portfolio. The region is guided for another 1 million ounces of production in 2024. Costs, both all-in and all-in sustaining, were higher in Australian dollar terms, reflecting impacted mining inflation and labor costs. A 5% depreciation of the Australian dollar against the U.S. dollar provided some relief in U.S. dollar terms. We are developing the invincible ore body and St. Ives into a long-life, Tier 1 ore body. As we transition, we invest in a sizable renewable energy solution, as I mentioned earlier, and evaluate efficient ore handling solutions to cut costs and energy needs. Gruyere faced challenges in 2023 as its resource capacity was insufficient for planned volumes. A strong collaborative approach with the main contractor and our partner, Gold Road, has initiated a bigger fleet to enhance site operations. An active intervention is underway to ramp back up to the targeted production profile. On a regional basis, costs for 2024 are expected to rise by 24%, with 11% tied to the St. Ives micro-grid, 3% related to underground pit development at St. Ives, and 2% associated with additional stripping at Gruyere. Excluding specific project costs, overall costs are expected to be 9% higher, reflecting tight labor market conditions in Western Australia. The production estimate for 2024 remains above 1 million ounces. Moving to South Africa, specifically our South Deep operation, these costs are noted in rands per kilogram. South Deep faced challenges in Q1 of 2023 due to ground conditions, with the remainder of the year used to catch up. Key skill competition posed another headwind for the mine this year, particularly the loss of drill rig operators and artisans to new underground projects willing to pay higher rates. However, the team successfully rehabilitated ground conditions and returned to target during the second half of last year. The availability and staffing of development roles are now back on track. As a result, management production slightly decreased to 322,000 ounces, aligning with revised guidance. While all-in and all-in sustaining costs fell in U.S. dollar terms, they increased in rand terms due to mining inflation and slightly higher volumes on a unit basis. The difference is attributed to the rand weakening against the dollar by 13% this year. During 2023, South Deep successfully extended the current wage agreement by an additional two years until 2026, ensuring a stable operating environment. Initial development towards the south of Range mine began in 2023, with further wind power studies progressing from the 50-megawatt Khanyisa solar plant, expected to conclude this year. In 2024, we are committed to safe, reliable production as we aim to ramp up towards the targeted mine capacity level of 380,000 ounces by the end of 2026. It's crucial we understand that continuing to build on the successes of the past few years and ramping up incrementally is vital to avoid regression. The cash flow generation of the mine has been strong, and we must maintain that momentum. In 2024, scheduled cost increases will impact due to higher sustaining capital levels due to ongoing investments in renewables and development towards the south of Wrench. In Ghana, attributable production decreased by 8% to 633,000 ounces, largely due to the planned reduction at Damang. Mining has ceased at Damang; we will continue to mine stockpiles for the next 2 years. Tarkwa's production increased by 4% to 551,000 ounces, remaining a cornerstone asset for Gold Fields. Understanding the trajectory of costs and production in the region for 2024 and 2025 is crucial, as Damang will process stockpiles moving forward, resulting in material increases in all-in sustaining costs due to expensed costs previously capitalized while stockpiles were built. This will distort regional costs for the next 2 years, although both the mine and region will still generate substantial cash at current gold prices because of accounting costs captured in Damang's unit costs. We also confirmed the sale of our 45% stake in Asanko last year, finalized this week, while exploring Damang's long-term future responsibly, given it is just over 20 kilometers from our Tarkwa mine. Managing the community around this asset aligns with our values and strategy. Lastly, ongoing engagements with the government regarding the Tarkwa/Iduapriem JV continue. The tone of these discussions is increasingly collaborative, yet as we approach an election year in Ghana, we remain aware of potential impacts on the timing of these engagements. In Peru, gold equivalent production at Cerro Corona fell by 8% to 239,000 ounces, with costs rising by 15% due to that lower production. Production was affected by unseasonably heavy rain in H2 2023 and as the mine reaches the end of its operational life, variability in mine production is anticipated. Optimization studies are in progress as the mine's current production profile approaches stockpile processing post-2025. We are still awaiting EIA approval for tailings input, enabling that process to proceed. I now want to move on to Salares Norte, an issue of great interest to many stakeholders and investors. While our focus remains on getting this mine into production, we are also investing in exploration. This photo shows our geologists working in nearby tenements, seeking additional opportunities to extend the life of Cerro Corona and Salares Norte. The Salares Norte project is now 99.4% complete on a construction basis. Key circuits, Circuit A and Circuit B, have progressed significantly. As I mentioned earlier, mining has continued throughout the project, and we have around 520,000 ounces of gold equivalent in our stockpile ready for processing. The photo shown on the cover depicts how far we have mined in the Brecha Principal Pit. In December, we announced a further delay in first gold and the subsequent ramp-up. We acknowledge this was unexpected for the market. However, it was necessary to ensure we deliver a safe and reliable ramp-up for this world-class deposit that will generate significant shareholder value over time. We have been progressing construction and have seen improved labor availability from contractors. As of last week, we had our site fully staffed with contractors and employees, and we are addressing outstanding pre-commissioning and commissioning activities. Progress on Circuit A has been excellent. On February 15, we produced the first filtered dry stack tailings in the business. There will be an upcoming vote to showcase what that looks like. We are still targeting first gold by April 2024. We feel confident that the completion of commissioning is on track. We commissioned an independent review into the project schedule for first gold, completed by Hatch, who verified and confirmed our timeline. Hatch is also working on the second phase of the review, focusing on the complete ramp-up. We initially planned for a 12-month ramp-up to full production and expect that timeline within the next 2 weeks. There is nothing currently suggesting we will not meet this objective. Capital guidance for the next 3 years is set for 250,000 ounces for 2024, 580,000 ounces for 2025, and 600,000 ounces for 2026. It is essential to note that in 2025, a slight backlog in production will occur in the second half due to a scheduled plant calibration shutdown in Q1 2024. Our cost guidance this year, due to lower production, is in the range of $1,790 to $1,850 per ounce, owing to the production profile and increased capital for the project. However, costs will revert to previously advised levels of below $800 per ounce from 2025 to 2029, providing significant dilution to the overall group cost. Final project capital is expected to range from $1.18 billion to $1.2 billion, an increase from prior guidance due to heightened contract costs and extended on-site duration. Just moving on to the next slide, I want to showcase some photos from Salares Norte. One thing Gold Fields has been recognized for over many years is that South Deep mines at 3,200 meters below the surface in challenging conditions, while Salares Norte is at 4,600 meters above sea level. It speaks volumes of our organization’s technical capabilities to deliver on such projects. The images reflect the dry stack tailings produced, the tailings storage facility, and an aerial view of the plant. With that, I’ll hand over to Paul to take us through the financials.

Paul Schmidt, CFO

Thanks, Mike. Good day, everybody. Mike has alluded to a lot of the numbers, but I want to emphasize some key figures: normalized earnings of $900 million, a 5% year-on-year increase; adjusted free cash flow of $367 million. On the next slide, I will provide a reconciliation. All-in costs were $1,512 per ounce, within our original guidance of $1,480 to $1,520 per ounce. I would like to talk about our final dividend of $4.20, leading to a total dividend of ZAR7.45 for the year. Comparing it to last year, it’s similar. However, last year included ZAR0.185 related to the Yamana break fee. When we compare apples to apples, we increased from ZAR560 to ZAR745, a 33% rise. Net debt increased from last year to $1,024 million, primarily due to a $316 million investment in Windfall as part of the acquisition price. Excluding this, net debt would have remained similar at around $710 million year-on-year. We are particularly proud of our achievements in terms of loans and ESG, having secured two green loans this year: a $1.2 billion loan and an AUD500 million loan, focusing on gender, water, and decarbonization.

Mike Fraser, CEO

Thank you, Paul. I wanted to close on a brief outlook on our strategy and our focus for 2024. 2024 is set to be another significant CapEx year for Gold Fields, with total CapEx projected between $1.13 billion and $1.19 billion. This includes sustaining capital of $860 million to $890 million. A notable part of this is about $132 million for the St. Ives micro-grid, which can be viewed as a one-off expenditure. Additionally, we have $116 million for Salares Norte, plus another $32 million for working capital build at Salares Norte. So, that $280 million represents an unusual expense this year, resulting in a return to more normalized capital levels moving forward. For 2024, our group attributable gold equivalent production is expected between 2.3 million ounces and 2.43 million ounces. This is slightly higher than the 2023 actual and reflects contributions from Salares and South Deep against planned reductions from Damang and Cerro Corona. All-in sustaining costs are projected between $1,400 and $1,440 per ounce, with all-in costs between $1,590 and $1,630 per ounce. Excluding the St. Ives micro-grid shows a significant impact on returning to normalized levels. Our priorities for 2024 focus on ensuring the physical safety and wellness of our employees and contractors, driving the findings from the respectful workplace report, and undertaking a complete review of our safety system across Gold Fields. Secondly, we need to deliver predictably on our plan, as we recognize the importance of committing to what we promise. We will focus intensely on delivering on our guidance. Thirdly, we must begin addressing the rising cost trend and maintain discipline in capital deployment, ensuring that our investments yield robust returns. We also aim to progress against our 2030 ESG targets, particularly our decarbonization journey, which we believe will differentiate our strategy. Another focus will be improving our portfolio and the quality of our projects, especially Salares Norte, a significant enhancement for our portfolio. We will continue to advance the Tarkwa/Iduapriem JV and Windfall project progress. With that, I’d like to thank everyone for listening and open the floor to Q&A.

Operator, Operator

Thanks Mike. I have two questions on the webcast. We will also hand over to the conference call to take questions. The first question is from Yaameen Gosain from Laurium Capital. He says, good day, please explain why Salares Norte production falls off sharply from 580 in 2025 to an average of 485 between 2025 and 2029 in terms of averages.

Mike Fraser, CEO

Hi Yaameen, thank you for that question. We always knew Salares Norte is a high-quality asset with certain high-grade areas. We are optimizing the mine by accessing the higher-grade parts of the ore body first to extract maximum value. We anticipate a decline in production over the years, which is reflected in our guidance and understanding of the current ore body. However, we are actively exploring nearby tenements for additional sources of ore to extend the asset's life. Salares Norte remains a world-class asset and will continue to be so for years to come.

Operator, Operator

Okay, good. The second question is also around Salares. Given the Salares delays, please clarify when the chinchilla relocation becomes an issue. When do you expect to start mining the impacted area?

Mike Fraser, CEO

Thank you for the question, Catherine. First, the chinchilla relocation is a vital demonstration of our values. To date, we have identified 36 chinchillas through extensive monitoring of the impacted rockeries. We will commence the relocation of the chinchillas at the end of February, continuing this until about May, pausing during the winter months, and resuming in summer. This is an 18-month program where we are investing significantly in independent experts to ensure a safe process. To answer your question, we expect to start mining in Agua Amarga around Q2 of 2029, which is some time away. We aim to be proactive to ensure no impact from mining Brecha Principal and to manage one of the impacted rockeries near the waste dump. Therefore, we believe there is no risk to future mining.

Operator, Operator

Thanks Mike. The next one is from Andrea Phillis from Risk Insight. It’s not a question. She says, risk insights have been generating ESG ratings for Gold Fields since 2016. It’s encouraging to note the consistent positive ratings and observed improvements, which demonstrates the company’s commitment to enhancing its environmental, social, and governance practices over time. The next one is from Emmanuel Mungari from Bloomberg Intelligence. It’s mostly for Paul. He asks, with sticky cost pressures and higher CapEx, should gold price weakness start to affect your cash margins? Are there levers you can pull to keep AISC within range or lower? What do you consider a targetable debt level or range?

Paul Schmidt, CFO

I'll answer the debt question first. We have previously stated that we are comfortable with anything below 1x net debt to EBITDA. We currently are below 0.5x, making us very secure. Regarding cost pressures, much depends on oil prices, which saw some positive movements last year but have begun to rise this year. As Mike indicated, we will evaluate our capital spend to ensure effective allocation, which should help manage all-in sustaining costs.

Operator, Operator

Good. A follow-up question for Mike from Emmanuel. Are there pain points in the business you want to address immediately?

Mike Fraser, CEO

Thank you, Emmanuel. I wouldn’t categorize them as pain points, but rather opportunities for improvement. Safety is a top priority, and we need to focus on that and respond accordingly. Delivering on Salares Norte will be valuable despite delays, as it is a world-class project that many would want in their portfolios. Also, leadership changes could induce nervousness. However, everyone who is here, including Paul, has been supportive during my onboarding, and we need to enhance collaboration within our organization. While past structures have been regionalized, we aim to leverage capabilities from various areas of the business, seeing it more as an opportunity than a pain point.

Operator, Operator

Thanks, Mike. The next question is from Sandile from Umthombo Wealth. He asks, what’s next after Salares and the Yamana setback?

Mike Fraser, CEO

Thank you for the question. The gold sector may see further consolidation, and we recognize varying valuations on market assets, indicating a lack of full price discovery. We have confidence in our systems for identifying growth and reserve replacement options. Our focus is to grow the value of the company by focusing on cash flow per share rather than solely on production ounces. This means we must continue prioritizing high-quality ounces for our portfolio. We will always look for bolt-on acquisitions. Windfall was a great opportunity. While we can't rule out transformational M&A, that isn't our current focus; this year, we aim to deliver on existing projects.

Operator, Operator

Thanks, Mike. The last question is from Chantelle Baptiste from Fairtree. Perhaps to Paul, how much CapEx will you need for Windfall over the next 3 years?

Paul Schmidt, CFO

For 2024, we have about $45 million allocated for Windfall. As for 2025, assuming we receive EIA approval and make our second payment of CAD300 million, we still need to approve subsequent capital projects, so I can’t provide specific figures at this time. We are currently working on revised numbers as per previous disclosures by our partners regarding Windfall.

Operator, Operator

Thanks, Paul. That's it from the webcast questions. We are now going over to the conference call, which has three pending questions.

Cameron Needham, Analyst

Thanks for the presentation. I have two questions. First, on South Deep and ramping to 380,000 ounces, will this require considerable management time and internal resources? Is this the best allocation of resources, considering current capacity and the potential to maintain solid cash flows by leaving the operation? My second question relates to the microgrid; you mentioned it would save about half your energy costs. Can you quantify your 2023 energy costs?

Mike Fraser, CEO

Thank you, Cameron. Regarding South Deep, that team is largely self-sufficient, which does draw on some resources from our technical teams, but the asset management mainly operates independently. Thus, I wouldn't consider this a significant drag on the organization. They have quality personnel, and with Martin's leadership, they are set for long-term success. While this asset has a long lifespan, we can invest in reducing costs and ensuring success. Therefore, we will prioritize caution in our ramp-up to ensure we build on past gains rather than move backward. About your second point on St. Ives, we can provide you with the specific number later, but it’s crucial to know they currently pay around $0.20, reducing to $0.09, marking over a 50% reduction.

Paul Schmidt, CFO

Cameron, we will follow up on the actual electricity cost, but it’s more than 50% lower after implementing the microgrid solution.

Adrian Hammond, Analyst

Thanks Mike for the presentation. For my question, I want to focus on Gold Fields' investment case. This year was expected to be one where Gold Fields moved down the cost curve, but we see it moving up quickly. The stock is down almost 8%, and while it’s partially due to internal factors, I’d like your insight on what we can look forward to. Will Gold Fields be able to return to the first half of the cost curve?

Mike Fraser, CEO

Yes, Adrian, there are a couple of factors to consider. Salares undoubtedly hurt us because we expected a much greater contribution from ounces and did not anticipate additional capital spend this year. Both of these played a significant role in our negative impact. Looking ahead, as we ramp up Salares in 2025, we should start seeing benefits that lead us back down the cost curve. Furthermore, we must be strategic with our capital deployment. It’s important to communicate how we manage and time internal reserves and future enhancements. While all capital investments make sense individually, it’s vital to ensure we are prudent in our choices.

Leroy Mnguni, Analyst

Good afternoon, everyone. I have three questions. First, Mike, you mentioned that one of your focuses will be extending reserves to bolster the business’s long-term sustainability. Which do you find more value accretive: acquiring more reserves in the market or increasing reserves via exploration? Secondly, Paul, some of your peers have provided guidance on a reasonable range for SRB CapEx per ounce for medium-term reference. Do you have a range in mind? Lastly, Mike, regarding Salares, April is fast approaching, and slide 18 reflects items yet to be started. What key KPIs or milestones are you looking for to deliver on your April target?

Mike Fraser, CEO

Thank you for those questions, Leroy. Regarding reserve additions, let me provide strategic context. Gold Fields maintains a solid reserve outlook for the next decade, ensuring we will continue to produce within our recent performance range. However, sustainability and future reserves must extend beyond this period. There are various means to achieve this: through procurement, joint partnerships with juniors, or our own near-mine extensions. We aim to enhance our resource-to-reserve conversion path. While we continue to evaluate targets, we need to maintain a broad pipeline of low-cost opportunities to respond when needed. There's no single pathway for this. Now regarding Salares, we have instituted weekly meetings with the project team to monitor KPIs and performance. We receive daily reports on project progress, staff levels, punch lists, and circuit progress. I am confident in our oversight, and nothing thus far suggests we will not meet our timeline. As for Capital, Paul can address your SRB inquiry.

Paul Schmidt, CFO

Regarding sustaining capital, it's consistent with my previous guidance, estimated at $350 to $400 per ounce. Since we classify any decarbonization capital as sustaining, if we exclude decarb capital, we are around $350 to $400. This number aligns with earlier discussions and has not changed significantly since last year.

Operator, Operator

Thank you to Mike and Paul. There are no further questions on the conference call, so that concludes it.

Mike Fraser, CEO

Great, thank you everyone, and thanks for your time today and for listening to us.