← Back to Investments

GOLD FIELDS LIMITED

GFI JSE Listed

DATE: 14 January 2026 TO: Investment Committee / Retail Desk FROM: Senior Equity Analyst SUBJECT: Investment Analysis – GOLD FIELDS LIMITED (JSE: GFI)

Step 1: Data Gathering & Source Verification

Reporting Periods Used:

  • Latest Interim Results: Unaudited results for the six months ended 30 June 2025 (Released 22 August 2025).

  • Source File (PDF)

  • Latest Annual Financial Statements: Integrated Annual Report for the year ended 31 December 2024 (Released 27 March 2025).

  • Source File (PDF)

Recent SENS Activity (L12M):

  • 17 Dec 2025: Dealings in securities by management (routine vesting).
  • 12 Nov 2025: Capital Markets Day presentation (Strategic update on the "Windfall" project).
  • 25 Sep 2025: Completion of Osisko Mining acquisition (Major M&A closing).
  • 22 Aug 2025: H1 2025 Interim Results & Dividend Declaration.

Step 2: Metric Extraction

| Metric | Value | Notes | | --- | --- | --- | | Market Cap | ~R725 Billion | A heavy-weight counter on the JSE; Top 10 by value. | | Share Price | R819.00 | Closing price as of 13 January 2026. | | Dividend Yield (L12M) | ~1.7% | Low. Calculated on a total L12M payout of 1,400 cents (Final 2024: 700c + Interim 2025: 700c). The yield is compressed due to the share price rally and high capital allocation to the Osisko acquisition. | | Liquidity Check | High Pass | Average daily value traded is >R1.2 Billion. Extremely liquid; suitable for all portfolio sizes. | | P/E Ratio | 20.4x | Elevated. Trading at a premium to its historic average (typically 12x-15x) and local peers. This premium reflects the "growth" implicit in the new Canadian assets (Windfall). | | Net Asset Value | N/A | Valued on earnings/cash flow multiples (EV/EBITDA). |

Step 3: Operational & Strategic Analysis

1. Business Overview Gold Fields is a globally diversified gold producer with nine operating mines across Australia, South Africa (South Deep), Ghana, Peru, and Chile.

  • Strategic Pivot: Unlike many peers who focused solely on dividends, Gold Fields has aggressively pursued growth. They recently completed the acquisition of Osisko Mining (Canada) to secure 100% of the high-grade Windfall project, cementing a foothold in a tier-1 jurisdiction.

2. Performance Trend (H1 2025 vs H1 2024)

  • Trend: Mixed / Capital Intensive.
  • Revenue: Surged 64% to $3.48bn, driven by the record gold price environment and higher sales volumes.
  • Costs: The major concern is inflation. All-in Costs (AIC) remain sticky around $1,900/oz (up from ~$1,500/oz in previous cycles) due to the heavy capital spend at Salares Norte (Chile) and the Windfall integration.
  • Salares Norte Issues: The ramp-up in Chile has been plagued by delays (weather and the infamous "chinchilla" environmental stoppages), forcing guidance revisions throughout 2024/25. However, Q3/Q4 2025 operational updates suggest the asset is finally nearing steady-state production.

3. Sector Context (Macro Factor) The "Safe Haven" Premium vs. Cost Inflation. Gold miners are currently benefiting from a record gold price (trading above $2,600/oz) driven by global geopolitical instability. However, this revenue boost is partially eroded by mining inflation—specifically energy, labor, and steel costs. The market is currently favoring miners with jurisdiction safety (Canada/Australia) over those with high exposure to unstable regions.

Step 4: The Verdict

Bull Case: The "Windfall" Growth Engine Gold Fields has the best organic growth pipeline among the JSE majors. The acquisition of the Windfall project (Canada) and the completion of Salares Norte (Chile) will add significant low-cost, high-grade ounces to their profile over the next 3 years. You are buying a company that is growing production, whereas most peers are struggling just to maintain it.

Bear Case: Execution Risk & Valuation The stock is priced for perfection at ~20x Earnings. The market has fully priced in the success of the new projects. If Salares Norte faces another winter freeze delay, or if the Windfall integration proves more expensive than guided, the stock could de-rate sharply. The low dividend yield (1.7%) offers very little "carry" while you wait for this growth.

Fair Value Estimate R750.00 – R780.00 Derived from a 1.2x P/NAV multiple and 7.0x forward EV/EBITDA. The current price (R819) suggests it is trading slightly ahead of fundamental value.

Final Rating: HOLD

  • Why? Gold Fields is a high-quality company, but the entry point is expensive. The share price has rallied hard on the gold price and the M&A news. At R819, the risk/reward is skewed. Existing holders should stay for the quality, but fresh capital should wait for a pullback to the R750 level or clearer evidence that costs at Salares Norte are permanently falling.
AI Generated Analysis Last Updated: 2026-01-14