Gold Fields Ltd (GFI) 2015 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the Gold Fields third-quarter results conference call. (Operator Instructions). Please note that this conference is being recorded. At this time, I would like to hand the conference over to Nick Holland. Please go ahead.

Thank you, Ari. Good afternoon or good morning, ladies and gentlemen, depending on where you are in the world today. Thanks for joining us to discuss Gold Fields' results for quarter three of the 2015 financial year.

On the call with me today I've got Paul Schmidt, our Chief Financial Officer, and Avishkar Nagaser from investor relations, Head of Investor Relations.

We're pleased to report a solid set of results for the quarter, with the Group generating $75m in net cash flow from operations despite the lower US gold price. Just to remind you, that's after all costs have been factored in.

Operational and financial highlights for the quarter include, number one, Group attributable equivalent gold production increased by 4% to 557,000 ounces, with most operations producing more gold in the September quarter.

Two, our ongoing efforts to improve safety allowed us to achieve a fatality free quarter.

Three, all-in costs decreased by 8% to $948 per ounce. That's all-in sustaining costs. And total all-in costs decreased by 9% to $961 per ounce.

Four, the Group realized a free cash flow margin of 11% at a gold price of $1,103 per ounce in quarter three 2015, compared with 9% at a gold price of $1,174 per ounce in the June quarter.

Five, on the back of strong cash generation we reduced our net debt balance by a further $50m and took that down to $1.427b. The net debt to EBITDA ratio at the end of the quarter, and that's the key measure that gets looked at, was 1.41 times, and that continues to come down.

We have a long-term objective by the end of 2016 to try and get that down to a 1-to-1 ratio. As we continue to make cash, I'm sure that we'll continue to improve on that ratio.

Some general comments. As the gold price continues to languish, we constantly review our portfolio. While the weaker currencies offer some respite in most regions, Ghana is fully exposed to further declines in the US dollar gold price.

In particular, Damang is challenged in the current environment and, as such, we are considering various options for Damang, which include a recapitalization of the mine to expose the higher grade ore that sits in and around and under the original Damang pit that was very successfully mined and made good money for Gold Fields over a period of 10 years. The alternative strategy would be to preserve the inherent value of Damang until gold prices recover.

Now, we're getting an independent review of all of the tactical and commercial aspects of these different options, and we should be in a position to make a decision on this in early 2016.

Turning to South Deep, that delivered a much improved quarter in quarter three 2015, with gold production up 42% to 55,000 ounces. That's driven by a 30% increase in tonnes milled and a 13% increase in underground yield.

Progress was made on a number of important activities at the mine during quarter three 2015, including a 57% increase in destress mining. And if you'll recall, we've often said that destress is very important to open up the orebody and provide flexibility for increased mining volume in the future.

The conversion from low profile to high profile destress mining commenced in the quarter, and is expected to simplify and de-risk the mining process. Essentially, we'll be opening up these cavities once, supporting them once, and the lead time between opening up these cavities and mining the associated longhole open stopes should be quicker, and that I think will be a good risk mitigation for deformation in particular.

The transition to high profile destress is expected to continue until early 2017. So, in essence, we think to get the entire four corridors across the 1.2 kilometer strike length is probably going to take us around about 18 months from where we are now, but it will happen over the entire frame of that strike length but will happen proportionately over time.

Production for the full year is expected to be between 5.9 tonnes of gold and 6 tonnes of gold, 190,000 to 193,000 ounces, and that would mean that the second half of 2015 will be around 50% higher than the first half of 2015. So, given the fact that we're almost halfway through quarter four, we have reasonable resolution on these numbers.

So, 2016, we're in the planning process, but what I can tell you is that as we also expect quarter four for South Deep to be better than quarter three, notwithstanding the 42% increase in quarter three, we think we're going to do better again in quarter four, and also we expect to do better again in 2016. Remember the target we've given of getting the mine to a cash breakeven by the end of 2016. I think we're making reasonable progress towards that goal.

The Australia region had another good quarter, generating net cash of $64m. Gold production increased by 6% to 249,000 ounces, with all-in costs in US dollar terms 15% lower at $859 per ounce, and that puts Australia firmly in the lowest quartile of gold producers in terms of costs.

Attributable gold production at the West Africa operations decreased, as anticipated, by 2% to 174,000 ounces, driven by lower production at Tarkwa due to lower grades mined. Despite the lower production, the region reported a 7% decrease in all-in costs to $962 an ounce, with net cash flow for the quarter of $32m.

Attributable gold production at Cerro Corona, that's equivalent gold production, decreased by 5%, as expected, to 79,000 ounces, mainly due to lower gold and copper head grades. Consequently, all-in costs per equivalent ounce increased by 10% to $731 per ounce, and the mine generated net cash flow of $16m for the quarter.

And I think if we look at the international operations in totality, recognizing the fact that South Deep is a mine in buildup, international ops came in at all-in costs of around about $900 an ounce for the quarter. And, again, I would just reiterate that that places the international regions of Gold Fields, the three regions in Australia, West Africa and South America, in the lowest cost quartile in the gold industry.

Looking ahead, we expect our 2015 final year production then, including quarter four, to be within 1% to 2% of our guidance that we gave at the beginning of the year. However, costs are expected to be better than previously guided, and I think we've given some indication in the book.

So I think, with that, we're now going to take some questions from you which either myself, Paul or Avishkar will attempt to deal with. Thank you very much, Ari.

(Operator Instructions). Kane Slutzkin, UBS.

Good afternoon, guys. Just two questions, please. If we could just touch on the grades in Australia, particularly at Granny Smith, you shot over 7 grams a tonne there. I know you've spoken in the past that you certainly saw upside relative to Barrick's old plant. Maybe if you could just comment whether you think that grade is sustainable and how we should be thinking about it into 2016.

And then just on South Deep, obviously there's been some improvement there. I was just wondering, is there a possibility you can mine some of the VCR conventionally in the interim, and in that way generate a bit of cash to further stem the burn or get to breakeven at a quicker rate? I don't know if that's a possibility or if it's economic to do so. Yes, that's it.

Okay, Kane. Thanks. Let me deal with the second question first. So the VCR at South Deep does contain -- if you look at the resource and reserve statement, it contains about 5m ounces at about 10 grams a tonne, I think was the declaration last year. If you can recall, we stopped mining the VCR in 2008, when we decided we were going to concentrate on the Elsburg package, given the fact that that was the heart of the orebody.

That said, though, we have started to look at the VCR again, to see what is the viability of us looking at bringing that back. I can't tell you at this stage what the numbers look like, because we're commissioning a study of that and whether or not that would need to be mined on a conventional basis or not. But the one thing that is clear is that looking at the geological interpretation, it looks very much like an analogue of the VCR that you find at Kloof 4 shaft, which is four kilometers away, and that's been a very successful orebody as well over the years.

So there's definitely something there. We need to do more work. I don't know what the development costs would be to get back into it. We've not mined it, as I said, for seven years. So it's very, very early and preliminary views at this stage but, yes, there's potential. Is it viable? What sort of cost would it cost us to get in, what sort of expenditure, investments to get in there? We're going to do some work on it. I'm not too sure when that work's going to be finished, but if we think there's an opportunity to fill spare hoisting capacity and plant capacity, which clearly we do have right now, we'll certainly give thought to that.

What I would say on Granny Smith, look, we're not going to give guidance for 2016 at this stage. We only give that in February, Kane. But I think if you look at where we're mining at the moment, we're starting to get into the Zone 100 orebody. If you can recall, that was the deepest of the different horizontal loads that we're mining and we're getting into Zone 100. That is going to become the center of gravity, particularly as we finish Zones 80 and 90 over the next year or so.

And the grades are reasonable. I think if you go and look at the reserve statement, you'll get a good view of that. And Granny Smith has been kind to us in giving us good reconciliations against our ore reserve declarations. That's not to say it will continue into the future, but so far it's worked out quite well, both in terms of tonnes and grade.

Wallaby is a great underground mine and certainly is one of the jewels in the crown. So, yes, good to see, but hopefully we can maintain somewhere within 6 to 7 grams a tonne range going forward. That's as specific as I can be at this point in time, Kane.

All right. Thanks, Nick.

Adrian Hammond, Standard Bank.

Hi, Nick. Well done on a good improved performance there from South Deep. I have a few questions on South Deep, just to clear up my understanding. So correct me if I'm wrong, you're now rolling out a new high-profile 5 by 5 destress method?

Yes. It's 5 meters vertically, 4.5 meters width; 5 by 4.5.

5 by 4.5. And has this been tested?

Yes. We've done some pilot work that we started earlier in the year. We've done a few areas and it looks like it's okay. We've got our geotechnical review board. These are the experts that we brought in from different parts of the world to come and assist, including South Africa. They're at the mine at the moment and they're reviewing all the work we're doing.

So, yes, we've done limited tests on a pilot basis, but a lot of the design work is based on numerical modeling of what they think is the right size, the crush pillars that will be needed, the mining spans, etc. So, we've got some pilot work, but I wouldn't say we've got a lot. But nevertheless, we've got enough confidence, we believe, to move the entire mine onto the high profile basis, based on the work that they've done.

And how is it going so far?

Well, it's early days. It's I think progressing reasonably well. The (technical difficulty) we're getting is quite positive from the team, but there's a lot of work still to do. We've got 12 to 18 months of (multiple speakers) to do.

Initially, I think it was 4 by 4, and it was highlighted that there were concerns around rock mechanics at 3.5 meters. How is this now possible at 5?

Well, they've got crush pillars. They've increased the size of the crush pillars, the localized crush pillars. Under the previous destress methodology, we had 2.5 meter crush pillars. Now we're on to 4.5 meter crush pillars. The other thing is we have reduced the mining span across the four corridors. We were at 240 meters. We're now down to 180 meters. So we've got a much stiffer system throughout the mine.

As I say, they've put this into all of their black boxes that they run, and they've come out with these numbers that they feel quite comfortable with. And as I say, they've been underground, looking at the early work that we've done, and so far we're not getting any red lights.

We're going to get these guys, Adrian, to be with us through this whole journey. We're not going to bring them in right at the end and say 'How does it look?' They're going to be coming out on a regular basis. They'll be here again in January, to see what the progress is.

And what we're going to do is, some of the low profile destress cuts that are very mature, that are nearly done, we're going to continue doing low profile. It doesn't make sense to convert those. But the cuts that are fairly immature, early stage cuts, we'll convert those as well. So I think Nico's quite comfortable that based on the pilot work done so far, that we can make the conversion.

And the other thing is we're not doing this whole scale upfront. We're doing it in a staged process. So if we see anything we don't like or some modifications we need to put in, we can obviously do that.

And then, thanks, just on the workshop, has there been progress on that and the congestion issues? Has that complemented the performance in the last quarter in any way?

No, I don't think so. But the workshop is being commissioned, so it's almost fully commissioned at this stage. I think the thing that's helped us in the last quarter is we got a lot of new gear in. Remember, we bought 27 pieces of category one equipment, drill rigs, trucks, loaders. The bulk of that is now commissioned, and of course new fleet always has good availability to start with.

I wouldn't say that we've cracked the code on the maintenance. It's far too early to claim victory there. That is an area that's going to require quite a lot of work still. But on the new equipment that's come in, that's certainly improved the availabilities and helped us.

I think the other thing that has made a difference is we've concentrated on making sure that the daily and weekly plans are honored and that we properly resource, I think particularly the open stopes. The open stopes are the meat and potatoes of this particular operation. So the team has spent quite a lot of time making sure that we're manning up the open stopes, we're executing properly, we're not under breaking, we're not over breaking, and we're mining on line, on grade. That's been a big focus for us, and it comes through in the grade when you do things correctly.

Great. Thank you very much.

Welcome.

Andrew Byrne, Barclays.

Hi. Good afternoon, guys. The first one, I know you haven't finalized the full plan for next year and I know you don't want to give out guidance too early, but just kind of big picture, given that some of the pushback is around the sustainability of CapEx levels, not particularly at Gold Fields but across the industry as a whole, I just wonder if you could highlight if there's any major Capex programs that need to take place anywhere next year that would be a big delta.

And then secondly, I was wondering how the exploration program in Australia is going, given the spend that you've got there.

Yes. Look, we're not in a position to talk numbers for 2016, Andrew, as you can imagine. I'm not sure that I would say there's anything really significant at this stage, other than if we decide to press ahead with Damang. I think if we decided to do the Damang pushback and go under the original pit and expand around the pit into the saddle, as well as the Damang pit cutback too, clearly there will be significant expenditure to do all of the waste stripping. But as I've mentioned earlier, we're doing a study, so that will dictate whether or not that goes ahead.

So that would be the one item that I think is in flux at the moment. But other than that, I think it's pretty much a sustaining capital that will continue into the future. I don't really see --

Paul, anything from you that you want to highlight?

No, not really.

No big ticket items we can think of at this stage, Andrew, but obviously in February we will give you chapter and verse.

So I think the exploration in Australia has gone well. We've drilled out a lot of meters. I think between all of the four mines, we estimate that we'll drill about 450,000 meters, which is an all-time record. So we're still collating now most of the results. So the trick now is we've got to get everything assayed; then we've got to populate all of the geological models and then see where we pan out.

So I wouldn't really want to say too much, except to say that at all of the mines there are some very interesting things coming out. But I know that it's a big issue for investors and analysts, and I suspect what we'll do is when we give the yearend results and the guidance for 2016, we'll give a more comprehensive exploration update once we've collated all the results populated from models. But certainly there's some interesting stuff coming out which I think looks good for the future. Sorry I can't be more specific at this point.

No, no, that's fine. And there's just a final question from me. Obviously, the cost environment varies from region to region and you've got cost benefits in Western Australia. Ghana is kind of as you were, if you like, with the exception of electricity. But one of the big deltas is obviously around oil price. You were hedged through much of 2009. Could you maybe give an indication of what you expect your fuel bill to go down, 2016 versus 2015, on a global basis?

Andrew, again, we haven't completed the plan for next year. It's going to be difficult. Obviously we're expecting a reduction, but it's a small reduction. As we said before, Ghana and Peru, these are regulated markets by the government and it's not very easy to try and calculate how much they will release. We have seen a release, especially in Ghana, but not to the full expect of the oil price because, as we said, when the oil price went up we didn't feel the full price either and now it's payback time to the governments, where they fill their coffers again to try and build up their subsidies that they'll use in future.

So maybe when we give the ops plan in February, we'll try and give you more indication of what the impact of the lower oil price is.

Okay. Great. Thank you very much.

(Operator Instructions). Patrick Mann, Deutsche Bank.

Hi there, guys. Good afternoon. Just following on from the earlier question around the rock mechanics and managing to do the high profile distress, you were mentioning the pillars -- the crushed pillars increasing quite significantly in size. Is this going to -- getting the long haul stoking to work in the destress mining, is this going to reduce the total volume over the life of mine that you can take out? I'm just trying to reconcile what happens if you have these larger crush pillars and it feels like a smaller tonnage that you can extract using this method. Yes.

Yes, look, what it will do, Patrick, it will allow you to advance quicker, having bigger crush pillars, and the key here is to get a greater advance going forward so you can access the open stoping horizon. That's one of the benefits.

And the other thing is all of this gets mined anyway. We're all on strike here. It's a question of sequence. Remember that the way the mine is mined, we have primaries and secondaries. We mine the primaries and we have a secondary next to it. Once we finish mining the primaries, we backfill, and then we come back and mine the secondaries.

So it all gets mined over the life, except obviously for the stability pillars between the corridors. That will also propagate mine, but that will be mined much later, but the crushed pillars will get mined down the road. So it's really a function of trying to advance quicker.

The one thing that I think sticks out from this is moving to a 5 meter by 4.5 meter destress cut. It's all on strike, right? So it's on reef. So the other benefit you might get of having a bigger destress is not that we avoid mining it three times, which is what we're currently doing. We mine it once and support it once. But also, you should be getting more tonnes per meter advanced, because the cavity is bigger, and that's on reef. So that's one of the other benefits which could offset some of the lag effects of leaving some crushed pillars behind until later.

But look, to be frank, we don't have a strong resolution yet on what the likely steady state profile is going to be. Hence the reason we've said we're not going to give you a new long-term plan until early 2017. Until this whole transition is rolled out, it's going to be difficult to estimate the full impact of this.

So you can imagine, in 2016 it's a transition year. We're going to be moving stopes across to high profile. The teams are going to have to get used to it. But those are some of the benefits of moving to it, is we'll move quicker with bigger crush pillars, and of course we'll mine once instead of having to come back, mine out the hanging wall, re-support and make the whole cavity bigger before you can access the open stopes. All of that now goes. We have one cavity, we do it once.

So I think when we do the February results, we'll spend a bit more time on this, because I think by then we'll have a better idea of how the transition is going.

Great. Thanks. And then one more, if I may. I thought the plan at Damang was to bring in contract miners and use the cash inflow from the fleet to fund the capital expenditure and fund some of the stripping. The option to move to contractor mining, is that falling away completely, or would that still form part of the potential recapitalization plan and potentially help fund it?

Yes. It's all part of the same package of work we have to do. So it's not off the table, but we need to understand the economics of moving quite a lot of waste before we can access the ore at depth. And then on top of that, if it makes sense from a financial perspective, moving to contractor mining might enable us to partly fund some of that upfront expenditure. So it's all part of the package.

Great. Thank you.

Sure.

Justin Chan, GMP.

Hi, gentlemen. So touching on Damang again, understanding that a feasibility study hasn't been done yet, do you guys have a sense of timeline regarding how long it might take to access the higher grade, such as the orebody, should you decide to recapitalize?

No. We don't have that information with any degree of certainty. So until the study is done, I'm going to kick for touch on that, because until we get resolution it would be difficult to estimate. But we're not talking years. It's a question of whether it's -- well, let me give you a range. I suppose I can give you a range. Maybe it's somewhere between 12 to 24 months, somewhere within that range. But again, I'm just saying, that's a high level estimate. It might change. So don't hold us to that, please.

Yes, absolutely. No, that's very much appreciated. A secondary question would be, so right now you're going through a very high grade section of Granny Smith. Going into next year, is that expected to continue, or is the scheduling now moving on to a different part of the orebody? And likewise, at St. Ives, what are your expectations on grade going into next year?

Yes. Look, we're not going to get specific on 2016 until we give a guidance on that. But as I mentioned earlier, we had a question on this earlier, I said the Granny Smith would probably be somewhere between 6 and 7 grams a tonne. That's all over the Wallaby underground.

On St. Ives, I'm not going to be specific, because we are changing the mining mix there, with Athena coming out, Invincible picking up, Neptune stage two to five coming in. So it's going to be a different profile, so I'm not in a position to talk about 2016's grade for St. Ives.

Okay. And my last question, so this quarter we've seen CapEx come down from the two quarters previous, and notwithstanding any capital projects going forward which we've discussed, should we expect that -- is that reflecting current market conditions and that would be a new space run rate going forward? Or is that just -- was that part of the original plan, and going forward we should see something maybe more similar to previous quarters?

Well, all I will do is reiterate that on an all-in cost basis, which includes capital, we're within the guidance we previously gave. We're lower than guidance. Paul, do you want to answer that?

So we did guide around $650m of capital for the year. That's still on track. What we're going to do next year, I can't tell you now. That we'll tell you in February. But yes, we're still on track for around $650m. We'll --

For 2015.

Okay. Thanks, guys.

Tanya Jakusconek, Scotia Capital.

Yes. Good afternoon, gentlemen. I have a question back on Damang. Did I hear you correctly, Nick, that one of the options could be to put the operation on care and maintenance if the economics don't pan out on the other front?

You heard correctly, Tanya. That's exactly one of the options.

Okay. And if we were to go on care and maintenance, what would be involved at that site?

Well, obviously, there will be people who are affected. We have 1,000 employees. We have 1,000 contractors. Now, one of the thoughts we have had is to continue to process the low grade stockpiles on the mine through the plant and keep the plant going. We'd also obviously continue with administration and security arrangements on the site. I think we'd continue some low level geological work.

And in terms of the rest of the people, we'd have to sit down and have a proper discussion with all the stakeholders. We started that debate already. So all of the stakeholders have been informed, including the government, the trade unions. They are all appraised of the current financial position and the prospects. So that whole process would gather momentum, if we decided to elect to go the care and maintenance route.

Is it mainly -- would it be safe to assume that this would be something that would be decided -- clearly, if we went under $1,000 gold, it would be quite a stress on the system.

Yes. I think under $1,000 gold, the gold industry will be looking at itself quite closely. Even at current prices, Tanya, the question is, we've got a good orebody at depth. It's good grades. We're seeing very similar grades to what we mined at Damang over the last 12 years, up until when the pit was closed. The question is can we absorb the upfront cost.

Yes, no, exactly. Yes.

Pushback. I think once we're in it, I think we'll make money at lower prices. The question is can we get a return on the strip at these prices. And I'm not too concerned about preserving the optionality of this for higher prices. It's a good orebody, but it may not work at these prices. And we'll obviously do our best to limit the impact on all of the different stakeholders.

Okay. We'll wait for I guess your studies early next year. Maybe just on Q3, can you let us know what the impact of currency and fuel was on your cost structure versus your guidance or your budget for the quarter?

I can't tell you what the fuel impact was, but the impact of currency on the all-in costs, of the decrease quarter on quarter of $98, $28 was because of currency. The balance was because of increased production and lower costs globally.

Okay. And just coming back to South Deep, so that I understood correctly, Nick, the 1.2 kilometer strike length that you were talking about, you think you will have all of these destress blocks opened up in 18 months, so some time into 2017?

Yes. What we will have by then is we will have converted the mine to high profile. So in other words, across the entire strike length, there will no longer be any low profile destress. There will only be high profile destress.

Okay. Thank you.

Thank you.

Leroy Mnguni, RMB Morgan Stanley.

Good afternoon, guys. Just two questions from my side is, obviously in Ghana, where you don't get the relief of the currency, you'd be watching your costs quite carefully. With that, what are you expecting for labor increases, because I know that that was something that was being negotiated about a few months ago?

And then secondly, just on Cerro Corona, it seems like your increase is attributable to weaker grades. How long would that cycle be expected to continue? And are you expecting those grades to go back up to the previous quarter's levels?

Okay. On the first question, Ghana wages are still being negotiated, so we don't have an answer for you at this point in time.

On the second question, I think on Cerro Corona you have to look at the reserve grades. And we've often said, although we've had a positive reconciliation against the reserve grades for seven years of operation, ultimately we'll start migrating back closer to the reserve grades, and I think that's what you've seen this particular quarter. That said, I still think the next two or three years will be pretty good, and we may be able to do a little bit better than that.

This is a function of where we are in the pit. Remember, we have to take out the pit in a sequence. We have to take out all of the pit to a certain level. And depending on where you are in the pit, you get higher or lower grades. There's a barren core in the middle, and typically, when you get more volume, it's closer to the barren core. For example, the grades can decline. Sometimes, when you're mining on the periphery of the orebody, the grades can decline. So you should look at that in relation to where you're mining, but ultimately I would guide you back to the reserve grades that we've published in the report.

Perfect. Thank you.

Leon Esterhuizen, CIBC.

Hi, guys. Just a quick one. On the changes at South Deep, you had quite a nice jump this quarter, but I see only being like 130,000 tonnes a month anyway, and I just want to check with you. Is the mine at this stage fully built to handle 300,000 tonnes a month? Is that the capacity, number one?

And number two, just judging by the numbers you reported this quarter, it looks like if you go from 130,000 to 160,000 tonnes a month, you'd be at breakeven. So I'm trying to get a handle on the volume growth out of South Deep. How many more of these bulk stopes are coming online? How fast do they come online? And it just looks like you're going to get to breakeven a hell of a lot quicker than I think you were guiding to before. So just those, if you can address that, please.

Sure. Hi, Leon. So I think in terms of the infrastructure, the infrastructure is certainly geared to do 330,000 tonnes, as it has been for a while. Now, I think on the hoisting side there's a few minor modifications we need to do, which we haven't done because the volume was always going to come a bit later, but that's not going to take a lot of time and money.

But the area that is not ready to go to 330,000 is obviously we need to open up the orebody to get to and sustain that level of production, and we're some years away from that. And part of our message to you, as analysts, and of course to shareholders, is that we're going to try and give you a better long-term feel by the end of next year as to what we see the volumes being like when we build up, what we get to, etc., and whether or not we can actually fill the capacity of the mine and the plant, and I don't know the answer to that question now.

And I think the conversion, as well, to high profile does complicate the issue, because we're going to be going through another year of transition, whilst at the same time trying to get some sort of resolution on what the long term is.

So a few moving parts around here but, that said, we do want to continue the momentum. We're focusing heavily on making sure that the high grade open stopes, mined spatially correctly, of course, are brought online as soon as possible. And there are a number coming through this quarter we're in and obviously into next year as well.

And as I've said before, we want to continue the momentum into quarter four. We think we will. We think quarter four will be better than quarter three. And we expect 2016 again to be better than 2015, and who knows? Let's see what happens, whether or not we can get to the breakeven at or earlier than the end of next year. We'll see what happens. Thank you.

Thanks, Nick. Thanks.

Allan Cooke, JPMorgan.

Hi, Nick. Hi, Paul. Just two quick questions, please. On that Damang pushback, when you're looking at it, is there any opportunity to look at or negotiate a stability agreement with the government? I know you guys have been trying to do that in Ghana for some time, but is that something that will improve the returns on the pushback at Damang, and is it something that's possible?

Yes. Look, we've continued -- as you know, the discussions with government have been going on for a long time on stability agreement. They continue to go on. And of course, any kind of more preferential tax and royalty arrangements, similar to what other companies in Ghana are getting, would be beneficial, for sure. There's no doubt about it.

We have been in discussions for a long time. It's hard to predict whether or not we'd be successful. Clearly, we think it's important. We've made that point to government, but we don't control the process. All we can do is keep talking and see where we end up. But I know this is a debate that is going on with other companies, so let's see where we go.

Okay. Thanks, Nick. And then just the last one, on the fleet composition and the mix in South Deep, it seems like there's going to be some changes there again as you move from low profile to high profile. Are we going to see more CapEx for the high profile fleet, and what might the cost be on an estimate basis? And does that mean we'll see more scrapping to come through on that low profile fleet, as you take that out over the next 18 months, please?

Allan, capital at South Deep will be similar year on year. That's what I can tell you. Circa around probably, say about a billion rand, yes.

Okay. So we shouldn't be thinking of additional CapEx over and above?

No, no. There's no major CapEx, no. Don't worry, no. (Multiple speakers) probably see.

That's fair enough. Thank you very much. Thanks.

Ladies and gentlemen, we have come to the end of the allotted time for questions and answers. Mr. Holland, back to you, sir, for closing comments.

Well, I just want to thank everyone for dialing in. We've had a good attendance today, looking at the list. Thanks for your time. Thanks for your interest.

It is a difficult time for the gold market, and we're not too sure where the gold price is going to go over the rest of the year, particularly with the risk of a rate increase in the US. I think the view that Paul and I have got is the sooner we get certainty on that, the better. But I just want to wish all of you a festive time over Christmas, a safe time with your families, and if you're on the roads, please be careful.

Thank you very much, and bye-bye.

Thank you. On behalf of Gold Fields, that concludes today's call. Thank you for joining us. You may now disconnect your lines.