Gold Fields Limited (GFI) Q4 2025 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and welcome to the Gold Fields' Q4 Results Presentation. [Operator Instructions] Please note that this event is being recorded. I will now hand the conference over to Chief Executive Officer, Mike Fraser. Please go ahead, sir.

Thank you very much. Good afternoon, good morning and good evening for those that have joined the presentation of our financial year 2025 results. And on behalf of the team at Gold Fields, I'm really pleased to deliver a very strong set of results for the group. Going into the presentation, I have with me our Chief Financial Officer, Alex Dall. Also joining in the room is Jongisa Magagula, our Executive Vice President of Corporate Affairs; as well as Chris Gratias, our EVP of Strategy and Business Development. As going into the presentation, we will run through a short presentation that will be shared between myself and Alex, and then we will spend some time at the back end addressing questions. I would like to first draw your attention to the disclaimer on the forward-looking statements. Just going into some of the highlights. I think, first and foremost, as I said, we are very proud to deliver a strong operating and financial performance for 2025. I think firstly and most pleasingly, we delivered a safe delivery during the year. And it's quite clear that our safety improvement plan is starting to deliver positive outcomes for the group. In terms of production, attributable production was up 18% year-on-year to 2.44 million ounces, and that was at the upper end of our guidance of 2.25 million to 2.45 million ounces. That was assisted by a strong performance across many of our assets, but most importantly, through the strong contribution and ramp-up of our Salares Norte mine in Chile. Our all-in costs and all-in sustaining costs were within guidance and were marginally higher than 2024. Most of the impact was due to higher sustaining capital, but also due to royalties and stronger producing currencies. If we look at the work that we've done on improving our portfolio, as I said, calling out Salares Norte achieved commercial production in quarter 3 2025 and steady-state production during quarter 4. And certainly, Salares' ramp-up has been a very pleasing part of the delivery during 2025. In addition, during the year, we completed the acquisition of Gold Road Resources that was completed in quarter 3 that allowed us to consolidate 100% of Gruyere and the surrounding tenements and I will touch on the outlook for Gruyere in a short while. We also continued the progressing of Windfall towards FID. We worked on updating the execution plan as well as advancing conversations with our host community on advancing the impact and benefit agreement as well as progressing the final environmental approvals. In addition, in terms of our portfolio and as communicated at our Capital Markets Day in November, we've identified a number of asset optimization opportunities across our assets, and we have started embedding those into our plans for 2026. Also to -- finally to talk to the fact that we have significantly increased returns to shareholders, and that has been communicated in our results today. This follows our decision to revamp our capital allocation policy in November, which we communicated as part of Capital Markets Day, where we now are delivering 35% of free cash flow before discretionary investments. In addition, we announced a special dividend of ZAR 4.50 per share as well as a share buyback of $100 million to be delivered during the course of the next 12 months. And that delivers a total shareholder return of ZAR 31.85 per share, which, in our view, delivers an upper quartile yield of over 6%. We also have decided to allocate an additional $250 million to our top-up program over the next 2 years, which increases that total program to around $750 million, of which $353 million is delivered now in this result. So overall, I think the key message is that we've had a safe, reliable operating delivery during 2025, and that has delivered a strong cash flow generation, which has allowed us to continue to reinvest in our business and return additional cash to our shareholders. Just again, to remind everyone of our portfolio, Gold Fields today is a global gold miner with assets in high-quality jurisdictions. We have 9 mines and 1 project across 6 countries, and these are all in attractive mining jurisdictions. We have delivered adjusted cash -- free cash flow of just under $3 billion during 2025 with around 44% of our production from Australia and key growth in Chile and Canada through Salares Norte and our Windfall Project. If we move on to the operational performance for 2025. Again, just most importantly, we're proud of the fact that we've been able to get everyone home safe and well at the end of every day. We have had, however, 7 serious injuries across the year, which again just galvanizes us to focus even more on delivering safer outcomes across our business. Pleasingly, we have also completed all 23 of the Elizabeth Broderick & Co recommendations. These have now been implemented. And now we are working on continuous improvement of our culture. As I mentioned, attributable production at 2.44 million ounces above 18% improvement year-on-year. And that meant that we were able to deliver within our original production and cost guidance that we set at the beginning of 2025. Our costs -- all-in costs were up 3% and all-in sustaining costs up 1%, largely due to increases in royalty paid as well as strengthening producer currencies, offset by dilution of higher ounces produced as well as higher quality ounces coming out of Salares Norte. I think the highlight is, again, we call out is despite the challenges we had in 2024, the safe ramp-up at Salares Norte meant that we were able to deliver well above the market guidance during 2025. That enabled us to deliver a 175% increase in cash flow from operations. As Alex will show a little later, some of that is just allocation differences from Salares Norte between operational cash flow and group cash flow. So when you look at our net group cash flow, that is up nearly 4x from 2024. Just going on to our ESG performance briefly. We've spoken about the impact of our -- positive impact of our safety improvement plan that we're implementing. We also had 0 serious environmental incidents and that's been consistent for the last 7 years. We have also made good progress on our gender diversity with now 27% of our employees being women with 28% in leadership. And of that, 20% of our women are in core operating roles. Due to the strong cash generation, we were able to share significantly to our stakeholders and ZAR 1.4 billion of the total ZAR 5.7 billion that has been created was delivered to host communities. We have also delivered significant work in building out our group legacy programs in Peru, Ghana, Chile and in South Africa with the Australian legacy program currently being scoped. In terms of decarbonization, we've delivered 15% absolute emission reduction against our '26 baseline and a 5% net increase against the '26 baseline. We've also been able to achieve full conformance against the global GISTM on tailings management. And under water stewardship, we've had 74% water recycling against our target of 73%. We've also completed our midterm review in -- of our 2030 targets. I think 2 key changes that we are considering is changing our decarbonization target to an intensity reduction target which will allow us to more actively move in line with the portfolio changes and also setting context-based water targets, given that some of our water -- our operating areas, we certainly have saline and hypersaline operating environments. Just calling out our production very briefly. We have a couple of things to call out. Gruyere, you see an increase of 42,000 ounces, mainly due to the inclusion of 100% in quarter 4 as well as an increase in tonnes milled. Granny Smith was down in line with our business plan, but what we are seeing is increasing grades as we're mining deeper. St Ives, we saw the benefit of higher tonnes milled and an increase in the yield because of more fresh material going through the mill than stockpiles. South Deep, pleasingly, we're up 16%, largely driven by improved mining grades as well as improved stope turnover, which allowed us to get greater consistency and feed through the system. Damang was down largely due to the fact we were mining -- processing stockpiles through the year, and that was due to lower yield. And Tarkwa were down largely due to the fact that we had prioritized stockpile feed through the mill rather than fresh material. And then the other big kicker for us is obviously Salares Norte giving us a 16% increase. I'll now hand over to Alex to give us a rundown on the cost changes year-on-year.

Thanks, Mike. We've seen a 3% year-on-year increase in all-in costs. This is higher volumes offsetting inflation as well as investing in our future at Windfall. The higher operating costs are driven by the inclusion of Salares Norte as it reached commercial levels of production, the accounting for Gruyere at 100% for the fourth quarter of the year as well as higher mining costs driven by both volumes and contractor rate increases. The higher sustaining capital is primarily due to the investment in the winterization project at Salares Norte to ensure that we got through the winter. And the higher growth expenditure at Windfall is due to a full year of consolidated costs after the acquisition of Osisko Mining in Q4 2024. And then we see the significant impact of the higher gold volumes on decreasing our cost base. Thank you, Mike.

Thanks very much, Alex. So just moving on very briefly then to the -- some of the individual assets before I hand over to Alex for a more detailed financial overview. I think just starting with Gruyere, we're very pleased to have consolidated Gruyere. I think it gives us an unconstrained opportunity to unlock the potential of the asset. I mean, clearly, during 2025, we didn't entirely deliver all of the ounces that we would have liked to, but we made significant progress. We were able to deliver record material movements. So we're up 37% year-on-year on tonnes mined, largely due to a focused attention to accelerating the Stage 5 waste strip. And that really translated into where we're seeing the higher cost due to larger development capital at the site. But the other thing that was pleasing is that our mill achieved record throughput rates at 9.6 million tonnes. That was a significant achievement in getting the mill running close to its potential. Moving on to Granny Smith. Again, Granny Smith continues to be an important asset in our portfolio and delivers consistent results. The reduction in production was in line with our plan as we prioritized development and in particular, significant effort going into catching up on some of the infrastructure spend, particularly ventilation and energy reticulation capital. St Ives had a very pleasing year, where we were able to lift production by 12% and that meant that we were able to really see those higher grades coming through the mill. All-in cost was up 14%, but that was largely due to the higher capital spend, in particular, as we bore the brunt of the capital spend on the renewable energy micro grid during the year. On an all-in sustaining cost basis, they were down 5% year-on-year. Moving on to Agnew. Agnew was -- saw a 7% increase in attributable production. And that was largely due to an increase in improvement in mine grades and processes grades. But we did see a 21% increase in capital spend, which translated into a 14% increase in costs. And that, again, was largely due to the development of the Barren Lands underground mine and related brownfield exploration. South Deep, we've touched on this, production up nearly 16%, which had the effect of diluting the cost increase by only 3%. And this shows us the leverage at South Deep because of the fact that it's a highly fixed cost operation. And that translated into a significant growth in free cash flow, which is really pleasing to see. The improvement at South Deep was really driven by an improving stope turnaround. And that really is the key focus for us to improve rock on ground. And once we have rock on ground, we're able to get that through the system and deliver higher yields through the plant. So from our point of view, South Deep has really had a good 2025 and has positioned itself for a good start into 2026. Damang, we had production down 28%. That's largely due to the fact that we stopped mining in the beginning of 2025 and have really been processing stockpiles with the associated yield loss through the mill. Despite that, they did continue to deliver reasonably good cash flow on much lower volume. Moving on to Tarkwa. Tarkwa had a 12% reduction in production ounces against 2024. That was largely again due to the fact that we had prioritized a lot of waste stripping activities during the year and prioritized waste movement over ore mining. That meant that our grades were down over the year as we use low-grade stockpiles to supplement feed into the mine. That had a direct translation into higher costs as we capitalized a lot of the mining activities as well as the fact that we had lower production ounces during the year. Despite that, we saw free cash flow up over 100%, largely due to the benefits of the tailwind of gold prices. Salares Norte, without adding a lot more to that, really pleased with the performance at Seladas Norte. The mill is running really well. We're also seeing recoveries above what we had anticipated. And everything at Salares largely going on track. We did have some slightly higher capital, which Alex can talk to during the additional winterization during 2025, but that certainly has paid us back well. Cerro Corona has performed well. And although we see the all attributable production down 3%. That's largely due to the copper gold price factor. And on a specific commodity basis, we saw copper and gold being delivered above our plan, largely due to better-than-expected grade yields. All-in costs were slightly higher on an all-in equivalent basis due to some of that lower production. With that, I hand over to Alex to take us through the detailed financial performance.

Thank you, Mike. On the back of the higher production as unpacked earlier by Mike, and an average gold price for the period of about $3,500 per ounce, headline earnings are up 117% year-on-year to $2.6 billion. Adjusted free cash flow is just shy of $3 billion for the year or up 391% year-on-year and $3.32 per share. This has enabled us to declare a record base dividend the full year of ZAR 25.50 per share, comprising the interim dividend of ZAR 7 per share and a final dividend payable in quarter 1, 2026 of ZAR 18.50 per share. In addition, we are also in a position to announce additional returns to shareholders of $353 million, comprising a special dividend of ZAR 4.50 per share, taking the total dividends for the year to ZAR 30 per share, and a share buyback program of $100 million, which will be executed over the next 12 months. I'm also pleased that our balance sheet is in a strong position after funding both the Osisko and Gold Road transactions, and we are sitting in a net debt-to-EBITDA ratio of 0.26x. This slide unpacks our cash generated over the period. The operations before tax generated cash of $5.5 billion. After tax and royalties as well as interest and certain working capital adjustments, we generated cash flows from operations before investing activities of $4.5 billion. After capital of $1.4 billion, lease payments of $100 million and certain rehab outflows, we have generated free cash flow of $3 billion or approximately 5x the free cash flow of $600 million in 2024. This slide is the capital allocation framework that we communicated with the market as part of our Capital Markets Day in November 2025, which is all about ensuring we continue to invest in our assets to ensure safe, reliable and cost-effective operations, maintain our investment-grade credit rating and pay a sector-leading base dividend. After this, it is all about getting that competitive tension right in allocating our free cash flow generated between investing in our future, building balance sheet flexibility and delivering industry-leading returns to shareholders. Unpacking the allocation of our cash that we generated in 2025, our free cash flow before capital and dividends generated is $4.4 billion, This enabled us to deliver on our capital allocation priorities in a disciplined manner, ensuring that we got the tension right between the 3 core pillars. We reinvested in the business through spending over $1 billion on sustaining capital. And we also delivered on our growth objectives by spending growth capital and exploration expenditure of $665 million. This was to bring Salares Norte to commercial levels of production, advance the Windfall Project and to increase life and lower costs at our existing operations, in particular, at St Ives. We delivered strong shareholder returns through $1.4 billion through our base dividend, which is aligned to our revised policy and additional returns of up to $353 million. After this, we had $944 million of cash, which was used to delever and build balance sheet flexibility on the back of the debt raise to fund both the Osisko and the Gold Road transactions. We ended the year with net debt of $1.4 billion, which includes leases of around $500 million. As communicated at the CMD through the change to our base dividend policy, we are declaring a full year dividend of $1.4 billion, special dividends of USD 253 million and a buyback of $100 million. This enables us to deliver total shareholder returns of $1.7 billion over the period, which is 44% of free cash flow before growth and 54% of total free cash flow. This is in excess of half of all our cash being returned to shareholders. On the back of the additional returns, we are also -- on the back of the stronger gold price, we are also in a position to top up our program that we announced at the CMD from $500 million to $750 million over the next 2 years. After both the special and the share buyback, this leaves $400 million under the program. This graph shows our dividend history over the last 5 years. In 2025, we are able to deliver record shareholder returns of ZAR 31.90 per share, a 220% increase from 2024. And this, we believe, equates to an industry-leading yield of 6.3%. Thanks, Mike, and back to you.

Thanks very much, Alex. And look, I think just what the work that was done on revisiting our capital allocation framework has certainly given us a lot of clarity on how we position the business going forward. And what I can honestly say is that, that does not limit our ability to continue to improve the quality of our portfolio. So now we will move on to what we are doing and the 3 levers of growth that we consider around improving our portfolio. So I think during the year, despite the significant cash generation and what we have returned to shareholders, we continue to make disciplined investments across the 3 growth levers during 2025. In terms of our bolt-on M&A, we did complete the Gold Road acquisition, which allowed us to consolidate 100% of Gruyere and the surrounding land package. We also significantly advanced our Windfall Project in preparation for FID, which we are still planning for mid-2026. In addition, we have been hugely successful in extending life our assets through our brownfields exploration program. And in a short while, a few slides, we'll touch on the success we've had in reserve replacement at our assets, but we spent USD 129 million in our brownfields program in '25, which allowed us to deliver a 9% increase in reserves across the year. In addition, we have really revitalized our greenfields exploration program. We have spent $101 million during 2025. This is inclusive of a USD 35 million investment -- equity investment in Founders Metals to gain a significant exposure to Antino Gold project in Suriname. In addition, we spent $21 million on our broader land package at Windfall, which is beyond the brownfield spin. And also what we did in quarter 4, we integrated the Gold Fields exploration portfolio, which gave us a significant additional exposure for our Gruyere mine. I think one of the other things to call out is, again, not speaking it up, but Salares is going to continue to be an important part of our value accretion over the coming years. we were able to have uninterrupted operations during 2025 despite the same weather conditions that we experienced in 2024, which again spoke to the effectiveness of the work that we did to prepare it for winter. We achieved commercial level of production in quarter 3 with steady-state production achieved during quarter 4. We were also able to continue to progress the Chinchilla capture and relocation program to derisk the development of the Agua Amarga extension. In 2026, our focus is to continue to maintain the steady-state throughput and stability through the plant. We still have around 2 years of mine material sitting in front of the plant. So we're certainly not mine constrained or at risk in the mining in any way. We will continue to advance the Chinchilla capture and relocation program. and starting to prepare the second half of the year, the Agua Amarga pioneering and pre-strip activities. We will also continue to undertake near-mine exploration to identify potential additional ore bodies and ore sources for the mill. Our 2026 guidance remains intact against our CMD disclosures of 525,000 to 550,000 ounces of gold equivalent with an all-in sustaining cost of between $450 and $600 per ounce. The next big growth lever for us is really progressing Windfall to final investment decision. Our key deliverables really for 2026 is finalizing the execution plan, getting the main environmental completed and awarded during the end of H1, continuing the secondary permitting approvals, which we also require by the end of June, getting the impact benefit agreement signed and really ensuring that these are all in place to take the most advantage of the weather windows ahead of the next weather -- the winter season at the end of 2026. So our plan at this stage is to really advance those key deliverables during the first half of this year. That will ensure that we have all of the site cleared and core infrastructure in place for the start of 2027, which allows us to start plant construction during the first half of 2027, with commissioning to start commencing the back end of 2028 with first gold due in 2029. So the critical path for us over the next few months is really around the key permitting and approvals, and we are confident that we remain on track at this point in time, but we'll provide a good update at the Q1 operating update in early May. Just moving on to the Gold Road acquisition very briefly. Again, we think that this was a very well-executed transaction. We got the timing right. This was always something we wanted to do, and we feel very pleased with the outcome of what this has delivered. So for a net $1.4 billion, we were able to consolidate 100% of this asset. And that allows us to really deliver on the full potential of this asset and optimize the full life of mine. It also allows us to bring in 100% of Golden Highway and that entire Yamana land package, which we have already identified a number of targets to build into our longer-term plan. So the key focus for us in 2026 is advancing the studies to optimize the deposit, obviously, looking at ways of accelerating access to some of those high-grade material to supplement the lower-grade Gruyere deposit as well as investing in further drilling across the Yamana package. Just going on to reserve replacement. This is ultimately how we measure the health of our -- the life of our portfolio. Pleasingly, we were able to deliver additional 4 million ounces in reserves over the year, which gave us a 9% improvement in our overall reserve position. So with the 2.5 million ounce reserve depletion, we saw an increase on the Gruyere addition from the other 50%. Granny Smith, we've included the Z150 discovery. We've also added additional ounces for Santa Ana and Invincible at St Ives. Agnew replaced depletion, and this is the nature of that ore body where they just continue to replace depletion on an incremental basis, and Tarkwa, we were able to convert resources to reserves through that additional price assumption adjustment as well as removing some of the key operational constraints. And this is going to be a key focus for us to continue to replace reserves. Just moving on then to the outlook and conclusion. For 2026, our guidance really is completely in line with our guidance that we provided at Capital Markets Day for 2026 with production targeted between 2.4 million and 2.6 million ounces. Total capital is between $1.9 billion and $2.1 billion. All-in sustaining costs between $1.8 (sic) [ 1,800 ] and $2,000 and all-in cost $2,075 million to $2,300. We've included the capital markets guidance next to those numbers and the only deltas that we've adjusted for in 2026 guidance is really foreign exchange and royalties, and that we've just run through on the cost numbers. I think for our focus this year is really about continuing to improve safety performance, ensuring the predictable delivery of our plan and continue to improve the portfolio quality by advancing our greenfields program and advancing Windfall to FID. Key priorities we've set out for each of our assets are really in line with the Capital Markets Day plan for each of our assets. We have a number of studies and activities and capital investment going into each of these assets. to improve the quality of these individual assets and also clearly progressing 2 key permitting and lease renewal processes. Firstly, the Tarkwa renewal and secondly, the permitting around Windfall. So we have a very clear plan, and we are progressing against our strategic plan that we set out in our Capital Markets Day in November. So with that, we've come to the end of the presentation. Thank you for listening. And now we hand over to Jongisa to facilitate the questions.

Thank you so much, Mike. We've got participants that are joining on the webcast as well as on the Chorus Call. So to keep it balanced. I'll take 2 questions from the webcast and then switch over to the voice-only Chorus Call questions. The first one comes from [ E Adeleke ] from [ Marotodi ] Capital Markets. He says, congratulations on your stellar set of results. The first question, what is the most troublesome KPI on your radar at the moment? And how are you anticipating moving the needle on it? His second one says, could you outline the current exploration road map and clarify if excess liquidity is being prioritized to these operations? Okay. So those are the first 2.

Thank you very much for those questions. Look, I think just on the key issues undoubtedly, and I'm sure many words are going to be written about it. But across the industry, we are facing cost inflation, not just the impacts of producers, strengthening producer currencies, increasing royalty rates, but there is some pressure on costs. Pleasingly, we have a number of opportunities to really arrest that. And that was really what we were trying to unpack at our Capital Markets Day and what we try to present in here. So many of those costs are an outcome of the things that we do to improve the structure of our business, and we're very focused on that. But that's a very important focus. And I think the second one, undoubtedly is with the changes that are going on in Ghana is to really progress that the Tarkwa lease renewal and the safe and reliable transition of the Damang mine. So those would be, I think, in the top of our mind, the things that are really important for us to progress. I think in terms of exploration, I absolutely think if you think about the levers of growth and the opportunities in front of us, M&A is always really expensive, but you have to be opportunistic to really grab things that present themselves to improve the quality for future generations. Obviously, our brownfield exploration continues to be the lowest cost per ounce replaced of discovery, and we'll continue to prioritize our brownfields program, in particular, at Windfall, where we have a very, very significant land package that we're trying to identify the next Windfall opportunity. But then in terms of our greenfields program, really ramping that up because we've seen what success looks like. Salares Norte was a product of our greenfields exploration strategy. And you can just see the multiplier of that. So we are very much focused on finding ways of really building our longer-term pipeline through our greenfields program, and you've seen that through the investment in the Antino project through Founders Metals, where we've been able to put our foot on what we think is a highly prospective next horizon opportunity for us. So as you rightly identify, I think more value is going to be created through the drill bit for the next generation than it is necessarily by buying assets, although we're always going to have to be mindful of being able to be agile when those opportunities present themselves.

Good. I'm going to pause and hand over to the operator on the Chorus call to see if there's any questions. I'm not hearing that there are any questions on the Chorus call, so we'll just carry on. The next one, sir, is from Luca Grassadonia, from VSME report. He says, good afternoon, could you please explain the rationale for a $100 million buyback on a market cap of $47 billion?

Thanks for that Luca. And I think I'm going to probably hand that question to Alex to take.

Certainly. Thanks, Mike, and thanks, Luca, for that question. I think what we need to bear in mind is that we have competing shareholder priorities depending on the jurisdiction that they are in. We have North American shareholders who prefer buybacks and have been looking for them. So I think what we've done here with the buyback program is it is small relative to the total returns to shareholders. It approximates about 6% of the total shareholder returns. So we think it is just finding the right balance of mixing our returns between both dividends -- special dividends and buybacks, top-up returns.

Alex, and I would just say that the views amongst shareholders about buybacks are quite polarized at times. This would be the first time that we've really been in the market buying back shares. And it really is an opportunity for us to just see how it goes with a very low-risk entry.

Okay. Just the second question, also on the webcast is, do you plan on doing any joint ventures with Zijin Mining?

Yes. Look, I think firstly, I would want to say that Zijin has been shown really remarkable growth. And we engage them in all of our industry bodies in the countries that we operate. And we see them as a very credible miner who've really developed their business very, very well. So we have a very productive relationship with them. And certainly, we are not closed to working with any of our peer groups around the world. Our point is always clear. We're here to exist to create value as long as we can find partners who share our values and are willing to work in line with our standards and what our expectations are of ourselves and the priorities for our shareholders. Then, frankly, it would be incumbent on us to be constructive about any potential working relationship.

I'm going to pause again and just see if there are any questions on the Chorus Call, operator. So I'm hearing that there are, please go ahead.

We have a few questions. The first question we have comes from Chris Nicholson of RMB Morgan Stanley.

I've just got 2 questions, please. So I know we touched on it on our call this morning. So can you just go back to the current situation in Ghana. My understanding that royalty bill is now before the parliament. So is it your base case that royalties will be lifted on Tarkwa in particular? And then in relation to the ongoing lease renewal negotiations you're having with the government there. I know that there's a couple of things at stake. Could you talk to the fact whether the 10% government ownership is one of the issues that are at stake in relation to lease renewal? And then just the final one, just -- I mean, obviously, we're looking at roughly about $2 billion of CapEx this year. I mean I've been going through my model today. And the one region I'm specifically interested in is in the Australian region. It looks like you spent somewhere close to about $600 million in 2025. Could you give us what the CapEx number would be for 2026 in the Australian region? It looks to me like it's going to be north of $1 billion?

Thank you, Chris. I'll come back. Alex can take the CapEx question, but let me just start with Ghana. You're quite right. The royalty bill is in front of parliament. Under that, the parliamentary procedure unless it's withdrawn, it will be passed into law within weeks. So you would expect it during the course of March, I expect to be announced as law. Under our current lease agreement at Tarkwa though, we won't be immediately impacted because our lease agreement does include some stability provisions, which means that it won't apply to us at least until the end of our lease, which expires in April of 2027, which, as we know, is not that far away, but it does provide some protection during the course of 2026. But I think the issue around the royalty rates and will it apply going forward, I think is something that is still not yet entirely clear because as you rightly call out, there's also a debate about, well, is the 10% ownership appropriate? And it's not just for -- for Tarkwa, there's many other assets don't have any local participation or any state ownership in the asset. And I think the way that we're having the conversation with government, and it's very early days. So there's nothing is hard on the table from proposals either from our side or their side, just to be clear, we're really talking about the process at the moment is it's really about how we share value here. And today, there's already a significant sharing of value with the government of Ghana. And the conversation we're having is to say, look, you can pull many levers here. But just bear in mind that you can't put all the levers because otherwise, you end up in a world where there's -- it makes very little sense for companies like ours to continue to invest. So I think the conversation is really to try and be quite broad and pragmatic. And I do think the government is aware of the fact that now that you've pulled -- you shot 1 of the arrows in terms of royalties that you've got to be quite pragmatic about how you think about the rest of the package. And I also don't think it's off the table to think that there could be potentially some other movements. The ministers and the Minister of Finance have already been talking about reducing the stability levy from the current 3% to 1%, for example, to mitigate some of those impacts to the higher royalties. So there's a degree of pragmatism. But I think as the bill stands today, we will see that new royalty rate coming through. But we certainly think that the door is now not closed to continue to talk about what a fair sharing of value looks like going forward. Alex?

And thanks, Chris. To just go to your capital, you are right, there are going to be significant increases in Australia. The first one is at Gruyere, an increase of about $150 million. That is just purely due to consolidating at 100% versus 50%. Then at Granny Smith, we've seen close to $100 million increase, and that's as we invest in ventilation, cooling and power upgrades to access the Zone 150 ore body that you saw Mike talk about the additional reserve of 0.5 million ounces there. And then at Agnew, we're also seeing a $50 million as we invest in tailings, paste plant construction as well as ventilation and cooling upgrades. And then also St Ives about a $50 million increase at the Invincible complex development and on the materials as we advance the materials handling system. So you're right. If you also add the strong Australian dollar that moves your $600 million closer to the sort of $1 billion mark.

There are quite a few questions still on the Chorus Call. And I understand that there was an issue with connectivity. I'm going to take another one on the Chorus Call.

[Operator Instructions] The next question we have comes from Rene Hochreiter of NOAH Capital.

Very nice cost control, especially. Mike, you have a dividend policy, and I get that one. But would you consider having a special dividend policy? Like it looks like at the moment, a special dividend is declared depending on what your capital allocation is. But would you like have a more rigid policy going into the future some time?

Look, Rene, thanks for that question, and I'll ask Alex to contribute it to as well. I think from our point of view, we look at whatever we provide in top-ups is really a function of probably 3 things. Firstly, are we maintaining a good balance sheet? So are we maintaining an investment-grade balance sheet. Secondly, are we limiting the opportunities to reinvest in our business for the future generation? And thirdly, what does the total dividend look like in relationship to our peers? And that's why we always talk about targeting upper quartile total returns to shareholders -- total dividends to shareholders. So that special dividend in my mind will always be something that is a function of those other 3 elements. And so being very precise about it, in terms of formula, I don't think really serves us well. And that's why in the way that we've described capital allocation it really is about sharing the cash flow that we generate between those 3 elements of maintaining a strong balance sheet and keeping a strong balance sheet to give us flexibility for the future, making sure that we are in the upper quartile of total dividends payable to shareholders. And then thirdly, making sure that we've got cash to reinvest in the future. So that's how we thought about it. But I don't know, Alex, if you got any other thoughts.

Well, I think that's right, Mike. And we also obviously benchmarked our base dividend policy, and we do believe that it is one of the top ones in the sector. And we were very strategic in how we thought about, do we allocate it purely on free cash flow, but we actually decided to go with free cash flow before growth investments that we don't penalize shareholders returns on us investing in the future. So we honestly believe giving back 1/3 of all free cash flow before growth investments will deliver strong returns to shareholders at sort of consensus gold prices. If we see gold prices above those consensus prices, I think there will be room to deliver special dividends.

Okay. Just a couple of other questions. Under underground drilling results at Gruyere. Is there any update on that?

No, early days yet, Rene. So we'll probably only be in a position to provide more detail maybe in 12 months. We've got a pretty good program during the course of this year. We know that the ore body is there. It's really just trying to size it up. And in parallel, we'll be doing the trade-offs of the additional cutback versus moving into the underground. The underground will happen at some point. But pretty early days. We know what the grade is largely. It's pretty consistent, but it's really now sizing up the size of the ore body.

Okay. And just 1 more question, if I may. St Ives grades, mine grades were down 29% and the yield was up 3%, and Gruyere's mine rates were down 18% and the yield was down 6%. The yield was down or quite a lot different from what the mine grades were. Can you sort of explain that a little bit? I'm a mining engineer, but I still don't understand that.

I think what always happens is that it's a function of how much of the stockpile material that we're processing. At St Ives, we also had an impact where we were actually processing the Swift Shore and Invincible Footwall South, which were 2 open pit operations, which come in at a slightly lower average grade than our underground material. So it really becomes a mix. And that really meant that our mining grades were slightly lower year-on-year, but we had more mined material going through the plant and therefore, you saw yields being slightly higher as it replaced -- as it replaced stockpile material. And then I think on Gruyere, it's also a function of higher stockpile processing because even though we moved massively more material in the year, we weren't able to get all of that through the mill because the mill was also stepping up in terms of its volume of process. They moved up nearly 1 million tonnes year-on-year. So that's kind of what you're dealing with.

I'm going to come back into the webcast questions, and we're going to have to pick up pace because I'm just mindful of the time. The next one is, can you discuss any outstanding permits that might be needed for Agua Amarga? The incoming Chilean administration has hinted at easing some regulatory burdens. Do you see any potential that such executive actions could ease issues at Salares? I'm going to cluster a few of Ghana-related questions just so that we can speak to it in one go. The next 1 is from Cornelius from Robeco. He says, do you expect the proposed royalty increase in Ghana will lead to higher royalty payments for us in the next 5 years? And then the other one that is related to Ghana is for Tarkwa, how are you treating the lease renegotiation for your reserve calculation? What outcome on the lease renewal do you assume in the reserve calculation? And that's from Reinhardt van der Walt from Bank of America. Shall we do those 2?

Thank you. So just on Agua Amarga, I think we feel quite confident. There's nothing additional that we require. So we are now -- it really is -- the progress is largely aligned to our Chinchilla capture and relocation program. So that's the only thing. But it's not permit related. I think in Ghana, yes, if the royalty payments -- the royalty regime would apply to us, currently, we pay what the industry pays, which is around 5% royalty. Under the new sliding scale that's 6% to 12% even if you offset 2% of the stability levy at worst -- sorry, it's likely at these kind of gold prices to still mean an additional 5% royalty payment, if that's what gets applied under our new lease conditions. So whilst in the next 12 months, it doesn't impact us. It could impact us beyond 2027. And in terms of, Reinhardt, the question that you've asked on reserves, we have applied the full life of mine reserves into our declaration, and that's what the application is for. So anything that would limit our horizon on our lease could potentially impact that. But we're certainly confident that we'll find the right path on the term of lease.

If I can tag one on, Mike, from Shaib, which is along the same lines. Could you quantify the increase once it starts affecting Tarkwa the impact to unit costs of increased royalty?

Alex, do you want to take that?

Yes. So at current spot prices, that would be $350 an ounce increase -- $5,000 an ounce.

Great. I'm going to go back to the Chorus call to take an additional question or 2.

The next question we have comes from Adrian Hammond of SBG.

Just to follow up a bit on Windfall. The project as it stands, you've given us a CapEx number at Capital Markets Day, although there is still due in EIA and IBA as well. And obviously, the most importantly, the feasibility study. So I guess the question is, what's your confidence in the CapEx number given the feasibility has yet to be done? And I'm assuming that your reserve gold price increase to 2,000 will have a large influence on the project and the reserves, et cetera. So I guess, should we be looking forward to a -- I'd like to call it a Tier 1 asset for Windfall, but I don't see it as a Tier 1 yet, not because of it's jurisdiction, but because of its size and cost profile, but perhaps you can enlighten us?

Adrian, maybe just a couple of things. So this investment in Windfall is what we look at as almost the first phase of the development of this entire property. So the first phase of this was always designed to be -- to fit in with provincial approvals, which was always going to be the fastest process, fastest pathway to get this project started. That is going to really deliver us at 300,000 ounces for the next 10 years and banks it in. But we're already starting the next second phase of studies, which will help us to further optimize the asset. That's about looking at potential additional material handlings, potentially a shaft for the long term. We know this is a 20-year plus asset. In addition, we're looking at ways of improving the yield of that asset. But today, we have a fairly tight footprint that is within the current approval that we -- that is being developed. And so just to be very clear, the feasibility study for this asset that supports the environmental approval was actually done 2 to 3 years ago. So the only thing that we're really working on is optimizing our underground mining. So even with a change in reserve price assumptions because of the nature of our footprint, in this first phase of the project delivery, it's not going to have a material impact on the reserves in the near term. But the bigger opportunity really is to go into that second phase of permitting, which hopefully will allow us to widen the footprint and create further opportunities to mine this ore body. And then we've got the opportunities of all the nearby resource that we haven't even started including in this. So we absolutely do believe that in the long term, it's Tier 1. Yes, you may look at it today and it might be too small. But the potential of this asset is -- and the footprint is really huge, and it's up to us to now migrate to that. But the first approval is really this. In terms of the capital cost, we felt that when we got to November, we put a lot of work into understanding the underground mining. We've put a lot of work in updating our cost estimates and the execution plan. And certainly, that presented the best view of it. In terms of the IBA, that's largely going to be translated into some form of royalty equivalent-type participation, I suspect. But I do think that that's not going to necessarily hit our capital number. I think the biggest risk on capital is possibly likely to be any significant changes in exchange rates, U.S. dollar Canada, but also just an underlying contractor and project productivity. I mean we've seen and we've been engaging with some of the peers who are delivering big projects in Canada. And the biggest concern is just like as years passed, productivity rates are dropping off. So that's probably one of our bigger concerns. But Chris is on the line. I don't know if, Chris, you want to add anything to that?

No, Mike, I think you covered it extremely well. Maybe I just -- the one point I would add as to the prospectivity that we see. This gets to a related question before about additional investments in exploration. Well, obviously, are prioritizing increased spend at Windfall. And as we think about future pipeline management and people always ask us, what's next after Windfall, we kind of say, we highly are excited about the next Windfall Project will be found at Windfall.

I'm just mindful of time. I'm going to take 2 questions from...

Thanks for the color there, Mike and Chris. That's very useful. And then to follow-up, if I may, for Alex on inflation rates, which follows on about the CapEx. We've seen some incredible increases with some of your peers as well. And it sort of reminds me of the price cycle where competition for labor has become a thing. Are you able to put some color to us on what the labor landscape is like for you out there right now, given where record prices are at? Just so that we can get a sense of when we're looking at these companies, on a cost basis, what is actually a real cost increase versus a real -- an inflationary increase. It's quite nuanced.

Thanks, Adrian. And we're not quite seeing -- we're not seeing the inflation we saw during COVID, but I mean we are probably seeing CPI plus a couple of percentage point inflation across the board. We are continuing to see labor pressure in Australia. I think luckily with the Windfall construction, we've actually modeled sort of all the labor and other construction projects in -- that are going on in Quebec, and we think we actually fall in quite a good window from labor availability from some projects ramping off before others ramp up in that construction phase. But I think the real labor pressure we're experiencing in Australia at our mining contractors in particular.

Thanks for that, Adrian. I'm going to take questions from Josh Wolfson, and we are on time. So I do note that there's still quite a few from the webcast. We'll take note of them and then reach out to answer them directly. The first one from Josh says, can you provide more details on turnover at Gruyere? How would the operating trends there differ from GFI's other operations in Australia? I'm assuming he's talking labor turnover. And then can you speak to high-level indications of quarterly expectations for 2026 production, thinking about sequencing and seasonality?

Yes. Thanks very much, Josh. Good to chat. Look, I think Gruyere absolutely has been a challenge with our contractor. They've seen in the fourth quarter, turnover rates of up to nearly 50% amongst their workforce. That's been a combination of certainly some of the iron ore producers really being quite aggressive in hiring. But it also demonstrated that when we looked at it, that probably our contractor wasn't really being market competitive. And so we have rectified that and tried to address that trend. And we're certainly hopeful with that intervention, we'll start seeing a recovery on that number. In terms of seasonality, I think we should see, given the portfolio effect, while some of the assets have a little bit of a second half weighting that probably would be within 5% of the kind of variation by quarter. So I don't think we're going to see a huge variation across the year. And 1 of the things we're working really hard to do is to eliminate that hockey stick effect that we've had in years gone by, where we've had a lot of production weighted to the second half, which is really a function of the fact that we weren't having high degrees of mine plan compliance, which we're really working back into our system to deliver more predictable outcomes.

Thanks, Mike. I'll hand back to you for closing comments because we are over time.

Great. Yes. Thanks very much, Jongisa, and thanks so much for all the great questions that have come up. Thank you very much for the interest in Gold Fields I think we've made very good progress on our strategy last year, and we'll continue to deliver more of the same. That's our objective for this year. So thanks all for listening and look forward to engaging you in the coming weeks.