HSBC-Gold Fields Hold The rising cost of gold mining-20251201

Gold Fields’ CMD highlighted rising cost and capex insustaining operations. Adjusting for this reduces valuations

New cash flow-linked dividend policy results in a higherimplied payout ratio on our estimates

Maintain Hold, cut TP to ZAR715 (from ZAR855)

Rising cost of mining: The Gold Fields CMD (Nov 2025) has reminded us of priormining cycles where costs and capex have risen one or two years after a rally inmetals. This has historically resulted in market sentiment around the sector changingand cash flow risks rising. A key question is therefore whether Gold Fields is theoutlier in raising its cost and capex guidance or whether it is just ahead of its peers.Some of the increased amount comes from higher than expected capex for Windfall.The mine is also taking longer to build than we had previously thought and hence wenow see a gap in Gold Fields’ growth profile. Nonetheless, we see the improveddividend payout as a positive, with potential for special dividends in the near termshould gold prices remain elevated. We maintain our Hold rating but lower our TP toZAR715 (from ZAR855) on the back of higher capex and a slower Windfall ramp up.