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2016Integrated Report
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2 0 1 6 I N T E G R A T E D R E P O R T
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2016Integrated Report
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2 0 1 6 I N T E G R A T E D R E P O R T
Content
1 2Statement of ResponsibilityPage 9
Letter from the Chairman of the BoardPage 11
General Scope of the Integrated ReportPage 16
• Elaboration Process of the Integrated Report
Page 18
• Material Aspects by Stakeholder
Page 20
• Procedure for Stakeholders’ Identification and Monitoring
Page 23
Who we arePage 26
Incorporation of Gold Fields La CimaPage. 27
Vision, Mission and Corporate ValuesPage 28
OperationsPage 31
• Cerro Corona Mining Unit Page 31
• Cerro Corona Production Processes Page 32
• Operative Efficiency Page 36
• Production Results Page 38
• Resources and Reserves Page 39
Gold Fields La Cima in FiguresPage 42
Commercial ManagementPage 43
Gold Fields La Cima Share CapitalPage. 44
Dividend Payment PolicyPage 45
Dividend PaymentPage 46
Shareholding StructurePage 47
HighlightsPage 48
2016 Prizes and AwardsPage 50
Gold Fields La Cima S.A.Gold Fields La Cima S.A. Growth
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3 4 5Code of ConductPage 55
Human Rights PolicyPage 55
Board MembersPage 56
List of Board MembersPage 57
Executive CommitteePage 58
Management CommitteePage 58
Channels for DialoguePage 62
Institutions in which we participatePage 65
Participation in the Main Events of the Mining SectorPage 66
Cultural Events We SupportPage 68
General Approach to Impacts, Risks and Opportunities in Economic, Social and Environmental MattersPage 72
Strategic Goals of Safety, Occupational, Health and Environmental Integrated PolicyPage 74
SYMA Integrated Management SystemPage 75
Good Corporate Governance
Relationship with our Stakeholders
Impacts, Risks and Opportunities
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2 0 1 6 I N T E G R A T E D R E P O R T
76
Out TeamPage 86
• Strategic Goals Page 87
• Commitments of Gold Fields La Cima with its Employees
Page 87
• Workforce Structure Page 88
• Social Benefits Beyond the Law Page 92
• Compensations Page 93
• Work Relations Page 94
• Culture 1500 Program Page 94
• Talent Management Page 94
• Training Management Indexes Page 98
• Performance Management Page 98
• Youth Talent Program Page 99
• Work Environment Page 99
• Health and Social Welfare Page 99
trategic GoalsPage 78
Prevention CulturePage 79
Safety and Occupational Health CommitteePage 81
Safety and Occupational Health Management IndexesPage 82
Social Responsibility Management
Safety and Occupational Health
• Internal Communication Page 100
Our Suppliers and ContractorsPage 103
• Suppliers and Contractors Management
Page 103
• Promotion of Local Employment and Local Companies
Page 105
• 2016 Performance Indexes Page 105
Environmental ManagementPage 106
• Climate Change Vulnerability Study Page 108
• Integrated Environmental Protection Strategy
Page 109
• Strategic Goals Page 109
• Efficient Water Management Page 110
• Energy and Carbon Page 114
• Environmental Control and Monitoring Programs
Page 115
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• Awareness and Preparedness for Emergencies at Local Level Program
(APELL) Page 118
• Environmental Management of Salaverry Port’s Warehouse
Page 120
• Mine Closure Plan Page 121
• Management of Environmental Liabilities
Page 121
• 2016 Environmental Management Indexes
Page 122
• Sectorial GRI Indicators for Mining Page 123
• Internal Audits Page 124
• Environmental Licenses and Permits Page 124
Social ManagementPage 125
• Social Responsibility Management Approach Page 125
• Foreign Corrupt Practices Act (FCPA) Compliance
Page 126
• 2016 Study of Perceptions Page 127
• Line No 1: Strategic Management Page 128
• Line No 2: Social Viability Page 134
• Line No 3: Institutional Positioning Page 139
• Line No 4: Social Development Page 140
• Support to the New Vision for Mining in 2030
Page 148
8Audited Financial Information 2016Page 157
Financial Information
9Gold Fields La Cima Organizational ChartPage 210
Licenses and PermitsPage 212
GRI Table of ContentsPage 218
Annexes
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2 0 1 6 I N T E G R A T E D R E P O R T
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This document contains accurate and sufficient information in relation to Gold Fields La Cima S.A. business development during 2016. Notwithstanding its responsibility to the issuer, the undersigned are responsible for its content in accordance with applicable legal provisions.
Lima, March 2017
Luis Rivera Ruiz German Roberto Polack BelaundeExecutive VP / General Manager Director
Statement of Responsibility
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2 0 1 6 I N T E G R A T E D R E P O R T
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Letter from the Chairman of the Board [G4-1]
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2 0 1 6 I N T E G R A T E D R E P O R T
Dear Shareholders:
In compliance with legal regulations of the State and the Corporation, we submit our 2016 Integrated Report, which includes economic, environmental and social information. As every year, this report has been prepared based on the Global Reporting Initiative methodology, under the Essential option.
The financial statements contained herein have been duly examined and audited by our external auditors, KPMG. In addition, we include information about shareholding, corporate and management structures of Gold Fields La Cima S.A., which owns the mining rights and other assets related to the Cerro Corona mining unit, located in the district and province of Hualgayoc, Cajamarca region, Peru.
First of all I would like to point out that 2016 has been a positive year. Our proposed goals were achieved since the company projected a production volume of 260,638 equivalent ounce, i.e. a final production of 270,212 equivalent ounce, thus representing an increase of 4%. Additionally, our Cerro Corona Operation is still considered the safest of all Gold Fields operations worldwide.
Regarding the economic results, in spite that copper and gold prices dropped, cost reduction goals were achieved, therefore the expected cash flow. This is why our sales reached S/1,091 million, representing a 17% increase compared to 2015. In addition, we significantly reduced our All-in Costs (AIC) from an original budget of US$782/ounce to US$493/ounce. Likewise, the targeted FCF (Free Cash Flow) margin was also surpassed, obtaining US$76.5 million against a budget plan of US$18.6 million.
To operate in accordance with international standards on safety, occupational health and environmental, Cerro Corona Mining Unit completed many internal and external audits required by ISO 14001:2004 and OHSAS 18001:2007. This enabled us to ensure our environmental, safety and health management systems at work, and also renewed our ISO certifications as guarantee of quality of our management systems.
As social management model, Gold Fields Shared Value strategy has allowed us to continue developing a win-win approach with each stakeholder of the company, built on our pillars: the greatest respect for communities, honoring our commitments in every agreement signed, and also promoting initiatives with communities to protect the environment.
It is important to mention that the agreements entered into with communities allowed us to maintain our operations without any interruptions during this year, but more especially, having a social license to execute social investment projects efficiently in poorer areas, following decision-making and implementation processes commonly agreed and consulted with the communities and residents in general.
Thus, executed social projects have been contributing to the development of our nearby communities in infrastructure, education, health, productive development, water and sanitation, mainly. Regarding local employment, "Successful Entrepreneurs” training project, addressed to local businessmen
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Regarding the economic results, in spite that copper and gold prices
dropped, cost reduction goals were achieved, therefore the expected cash
flow. This is why our sales reached S/1,091 million, representing a 17%
increase compared to 2015. In addition, we significantly reduced our
All-in Costs (AIC) from an original budget of US$782/ounce to US$493/ounce.
Likewise, the targeted FCF (Free Cash Flow) margin was also surpassed,
obtaining US$76.5 million against a budget plan of US$18.6 million.
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2 0 1 6 I N T E G R A T E D R E P O R T
Having fulfilled our commitment to provide the
community of Pilancones with a potable water system
for human consumption was another important
milestone during 2016. This allows us to clearly
progress towards the major goal of providing the entire
company’s Area of Direct Influence with water.
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of Gold Fields La Cima area of direct influence has continued for a second year, giving direct support to their competitiveness by implementing improvement plans for each participating company.
Having fulfilled our commitment to provide the community of Pilancones with a potable water system for human consumption was another important milestone during 2016. This allows us to clearly progress towards the major goal of providing the entire company’s Area of Direct Influence with water.
On the other hand, as part of our environmental commitments, it must be pointed out that in coordination with our main office located in Johannesburg, we started to prepare the Climate Change Action Plan by measuring and optimizing the types of energy consumed in our Cerro Corona operations, such as electrical energy and fossil fuel energy. For this purpose, specialized studies were conducted and high technology proposals were implemented such as the use of additives in fuels, schedule of shutdowns in peak hours, initiatives that we know are going to have a direct impact in specific energy consumption in order to reduce our carbon footprint. In this way, we provide necessary global initiatives against increasingly erratic weather conditions we all observe worldwide.
Likewise, we must also mention that the work performed by Gold Fields La Cima in the Driving Group of the mining sector, which has been arranging with the National Association of Mining, Oil and Energy (SNMPE) and the United Nations Development Programme (UNDP) the development of a document which comprises guidelines for the construction of the “New Vision for Mining in 2030”. For this process, other entities such as NGOs and the State have been called to participate apart from companies of the sector, therefore solid foundations will exist. In this manner, we expect mining activities in the country are perceived differently, aligning individual efforts and performance of mining companies to the goals of the United Nations in 2030, recently published during 2015.
Finally, as part of our vision to be leader in sustainable gold mining, we expect to continue working in the following fronts in 2017:
• Create the highest value of our gold resources for our investors, collaborators, authorities and communities in Peru. This must be jointly accomplished with the work implemented to extend Cerro Corona’s mine life with the intention to transform mineral resources in
real minable reserves through improving containments walls of our open pit mine, a greater metallurgical recovery and a better and more efficient disposal or our landfills and tailings.
• Additionally, an improved productivity and real reduction of operational costs shall ensure an efficient production and cash flow budgeted for 2017. All this must be accomplished in a high performance culture with safety which marks our Cerro Corona operations.
• Parallel to our operations, we will continue working in new projects with the communities within the area of direct and indirect influence, seeking together to define
concrete actions for development and wellbeing of people. We also expect to work on projects that address climate change, aiming to reduce vulnerability of people against these severe climate impacts and also be a referent for other economic sectors that impact in the region where we work, specifically, agriculture and livestock farming.
Nicholas John Holland Chairman of the Board
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2 0 1 6 I N T E G R A T E D R E P O R T
General Scope of the Report [G4-17, G4-18, G4-20, G4-21, G4-23,
G4-28, G4-29, G4-30]
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Herein is the edition of our 2016 Integrated Report of Gold Fields La Cima S.A.,
with the overall goal of informing the results reached in the economic, social and
environmental areas.
The Shared Value Strategy has continued to remain the work platform with each
of the company’s stakeholders. Hence, it is expected through this report to inform
specific activities as a response to the needs and expectations of our stakeholders,
who were identified as priority: government, shareholders and investors, employees,
vendors and communities; additionally to the contribution made by Gold Fields La
Cima to local, regional and national development; as well as the next steps to take in
each area of action.
The reported information also includes how the management of each stakeholder
might affect Cerro Corona operations, and that is why we have dialogue channels to
facilitate the exchange of information with each of them.
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2 0 1 6 I N T E G R A T E D R E P O R T
Elaboration Process of the ReportAs every year, the report develops in compliance with Global Reporting Initiative1 methodology. It is important to point out that this document has been prepared according to the following guidelines:
• The presented information
covers the period
between January 1 and
December 31, 2016.
• Publication periodicity is annual.
• For its development, we have
followed the G4 Guidelines
and the protocols of the
Global Reporting Initiative,
and the Sectorial Supplement
for Mining and Metals under
the Essential option.
• Review of the
headquarters’ report.
• During 2016, no limitations
were registered of material
aspects inside and
outside the company.
1
The Global Reporting Initiative is an organization created in 1997 by the United Nations Environmental Program (UNEP) and by the Coalition for Environmentally Responsible Economies (CERES). Its main goal is to provide an international reporting methodology for social responsibility and/or sustainability (www.globalreporting.org).
To define contents, we have worked
according to a process of internal
participation in which the information is
obtained through interviews to the staff
appointed by the main stakeholders. The
process includes reviewing information
about performed activities during the
report period, management results
(performance indexes), identification
of changes, if any, and contribution to
each area according to Gold Fields
La Cima Shared Value Strategy.
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Material aspect prioritized in the survey with respondents
Additionally, we have reviewed the assurance audit results carried out by SGS in 2015, in order to implement improvements in compliance with the scope of the Global Reporting Initiative methodology, especially in regards to GRI Principles: Stakeholders’ Participation and Materiality.
After gathering information, an internal validation process is carried out by all involved managements and vice-presidencies with the purpose of ensuring that the content prioritizes relevant issues related to each stakeholder.
To define materiality, we have done a survey for each interviewed person to identify relevant topics for every stakeholder. They are grouped in three levels of importance: 1: more important;
2: important; 3: relatively important. The survey has also included different aspects relating to the issues faced by the specific stakeholder, especially considering their needs and expectations. It is worth mentioning that this process is dynamic and that might change annually according to the national, regional and local context of those issues. The survey results for each stakeholder are detailed below.
Government Shareholders - Investors
Environmental Employees Community Suppliers
Total value distribution
Relations with the Government
Regulatory compliance
Social and environmental performance
Economic performance
Regulatory compliance
Water management
Energy management and carbon emissions
Environmental aspects management along project life
Workforce
Development of employees (training and education)
Regulatory compliance
Social license to operate
Water
Employment
Procurement practices
Training and education
Evaluation of suppliers' work practices
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2 0 1 6 I N T E G R A T E D R E P O R T
Material Aspects by Stakeholder [G4-19, G4-25, G4-27]
After analyzing the results of the materiality survey among the employees interviewed
for preparing the report, most relevant issues have been identified, as well as
prioritization of topics for each stakeholder. Thus, considering the Category-Material
Aspect of GRI, the following information per stakeholder has been obtained:
GovernmentStakeholder
Category – GRI Material Aspect
Coverage Gold Fields La Cima ActionsIdentified Problem
Corporation – Regulatory Compliance
Internal and external Internal and external audits
Information office in Hualgayoc2
Unexpected operative controls
Participative monitoring programs of water quality
Increasing social pressures and conflicts.
Increasing inspection procedures and sanctions.
Corporation – Claim mechanisms due to social impact
Internal and external Local companies hiring
Competitive local suppliers development program: "Successful Entrepreneurs"
Information office in Hualgayoc
Higher work expectations of the communities
Community claims
2
Located at Jiron San Martin 144, Hualgayoc. Telephone: 076-353541. E-mail: [email protected].
Shareholders and InvestorsStakeholder
Category –GRI Material Aspect
Coverage Gold Fields La Cima ActionsIdentified Problem
Economic – Economic performance
Internal and external Operative efficiency through implementing process optimization projects
Cost reduction programs
Volatility in the price of gold and copper, inflation rate
Economic performance
Corporation – Regulatory Compliance
Internal and external Internal and external audits
Local economic development programs
Social infrastructure focused on water and sanitation
Integrated management system
Regulatory compliance
Social and environmental performance
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Labor practices and decent work – Training and education
External Strengthening of local suppliers 'Successful entrepreneurs' program
Recruitment of workforce from communities and local suppliers
Need to promote the employability of the local workforce
Labor practices and decent work – Health and safety at work
External Safety and occupational health procedures for contractors
Promptness requirement for procedures implementation
Economic – Procurement practices
Internal y external Programs of improvement for validating and verifying suppliers and contractors
Certification system with suppliers
Need to maintain quality standards of required goods and services
Economic – Indirect economic consequences
External Programs of improvement for validating and verifying suppliers and contractors
Evaluation of suppliers’ labor practices
Environmental – Environmental assessment of suppliers
External Monitoring of contractors and suppliers’ environmental management
Demand for greater preparation for the implementation of procedures
EmployeesStakeholder
Category – GRI Material Aspect
Coverage Gold Fields La Cima ActionsIdentified Problem
Labor practices and decent work – Training and education
Internal Gold Fields School
Delta Program
Building Program
Scholarship Program
Team consolidation workshops
Talented Young People Program
Need to develop work skills
Economic – Economic performance
Internal Operative efficiency through implementing process optimization projects
Operative costs reduction
Labor practices and decent work – Employment
Internal and external Social benefit program
Compensations program
Need for attraction and talent retention programs
Wages and salaries
SuppliersStakeholder
Category – GRI Material Aspect
Coverage Gold Fields La Cima ActionsIdentified Problem
[G4-19, G4-25, G4-27]
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2 0 1 6 I N T E G R A T E D R E P O R T
Internal and external audits
Information Office in Hualgayoc
Unexpected operative controls
Participative monitoring programs of water quality
Study of perceptions
Programs of guided visits to the operations
Radio micro programs
Awareness raising workshops at schools
Internal and external audits
Unexpected operative controls
Participative monitoring programs of water quality
Strengthening of local suppliers 'Successful entrepreneurs' program
Recruitment of workforce from communities and local suppliers
Hiring of local suppliers and companies
Local economic and productive development programs
Social infrastructure focused on water and sanitation
Information Office in Hualgayoc
Society – Social impact evaluation
Widespread perception of the harmful effects of mining in relation to water availability and quality.
Environmental – Regulatory compliance
Internal y externalIncreasing social pressure on environmental compliance
Operative efficiency through implementing process optimization projects
Participative monitoring programs of water quality
Environmental – Water
Internal Need to search for more efficient technologies to optimize water consumption
Labor practices and decent work – Employment
ExternalIncreasing pressure on local employment
Society – Claim mechanisms due to social impact
ExternalIncreasing social pressures and conflicts
CommunityStakeholder
Category – GRI Material Aspect
Coverage Gold Fields La Cima ActionsIdentified Problem
External
The following aspects have been identified as non-material as they are distant from the company’s direct operations:
• Involuntary resettlement of communities
• Child labor
• Forced labor
[G4-19, G4-25, G4-27]
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Gold Fields La Cima has specific guidelines set
by its headquarters in relation to identification
and monitoring of stakeholders, which
describe the process as an analysis tool, and
has as its main goal keeping and improving
the company’s social license to operate.
This procedure has allowed prioritizing the work with
every stakeholder, defining strategies, scheduling
visits, setting relationship and communication
plans, particularly with the communities in the area
of the company’s direct and indirect influence.
On the other hand, the company has a
headquarters’ standard on Community Relations
and Stakeholders Engagement to ensure specific
guidelines to the management and commitment of
each of them, and alignment with their objectives
in all regions where Gold Fields Ltd. operates.
Consequently, minimum requirements, strategic
objectives and principles are established to
guide relations with communities, particularly.
It is important to highlight that it is accepted that
regulatory requirements are specific to each
country, so these guidelines do not replace local
regulatory compliance. The process in general
includes stakeholders’ identification and mapping,
strategy and commitment plan development
and implementation, conflict management,
capacities and resources plan, report elaboration
of affected communities, impact assessments,
and perception studies, among others.
Procedure for Stakeholders’ Identification and Monitoring [G4-26]
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2 0 1 6 I N T E G R A T E D R E P O R T
Gold FieldsLa Cima S.A.
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2 0 1 6 I N T E G R A T E D R E P O R T
Who We AreGold Fields La Cima S.A., hereinafter “The Company” belongs to Gold
Fields Ltd. South African economic group a corporation with a century of
experience in the mining sector and recognized as one of the largest gold
producers in the world. It has eight mining operations in four countries in South
Africa (South Deep), Ghana (Tarkwa, Damang), Australia (Agnew Lawlers,
St Ives, Darlot, Granny Smith) and in Peru, its Cerro Corona operation.
Gold Fields Ltd. carries out “near mine” exploration activities in Australia and Ghana.
Moreover, it has “greenfield” exploration projects in Philippines and Chile. Company’s
shares are listed on Johannesburg (JSE) and New York (NYSE) stock exchanges.
Cerro Corona operation began in the middle of 2008. It is one of the five
most recognized gold and copper mining operations in the country.
South Africa South Deep
Chile
PeruCerro Corona Ghana
TarkwaDamang
Salares Norte
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Mining operations
Near mine - exploration activities
Greenfield - exploration projects
Philippines
AustraliaAgnew Lawlers
St. IvesDarlot
Granny Smith
Legend
Far South East
Incorporation of Gold Fields La CimaLa Cima is a company incorporated and existing under the laws of the Republic of Peru, whose corporate purpose is to engage in mining activities as far as the General Mining Law allows, which also includes activities of mineral transportation and sale. The length of the company is undetermined.
It was incorporated by means of public deed dated November 19, 2003, effected afore Mr. Alfredo Paino Scarpati, public notary of Lima. It is registered by electronic entry No. 11606015 in the Record of Corporations of Lima’s Registry Office. Subsequently, by public deed dated July 5, 2006, affected afore Ms. Rosalia Mejia Rosasco, public notary of Lima, its corporate name was changed from Sociedad Minera La Cima S.A. to “Gold Fields La Cima S.A”. As a result of changing its status to an open corporation, by public deed dated August 20, 2010, effected afore Lima’s Public Notary Monica Margot Tambini Avila, La Cima partially changed its statute and its corporate name to “Gold Fields La Cima Sociedad Anonima Abierta” or “Gold Fields La Cima S.A.A.”. Both name changes are duly recorded in the Public Registry.
By means of public deed dated November 5, 2012, effected afore Mr. Eduardo Laos de Lama, public notary of Lima, La Cima adopted the status of Regular Corporation, thus it modified partially its statute, and as a result its name to Gold Fields La Cima S.A., which was recorded in the Public Registry of Lima on December 17, 2012.
Gold Fields La Cima administrative offices are located at Av. El Derby No. 055, Torre 1, Oficina 301, Residencial Lima Polo and Hunt Club, district of Santiago de Surco, Lima, Peru.
The telephone number is (51-1) 706-0400 and its fax number is (51-1) 706-0420.
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2 0 1 6 I N T E G R A T E D R E P O R T
Vision, Mission and Corporate Values [G4-56]
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VisionBe a world leader in sustainable gold mining.
Mission
We are committed to operations optimization, social-environmental best practices and a sustainable and profitable
growth, while developing the best accessible human talent and promoting relationships of trust and mutual benefit with nearby communities to achieve higher returns for investors.
Corporate Values
Interiorizamos y practicamos
constantemente los siguientes
valores:
Safety
If we cannot operate safely, we do not operate.
Compliance
We work together as a team and do wath we say we are going to do.
Responsability
We act in a responsible way and care about the environment
and all our stakeholders, including our employees,
communities and shareholders.
Innovation
We encourage innovation, entrepreneurial spirit and acting as if we werw thw owners.
Respect
We treat each other with trust, respect and dignity.
Honesty
We act with impartiality, integrty, honesty and transparency.
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2 0 1 6 I N T E G R A T E D R E P O R T
Trujillo
Cajamarca
Hualgayoc
Cerro Corona Mining Unit
OceanPacific
South America
Bambamarca
Port of Salaverry
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Operations
Cerro Corona Mining Unit
The Cerro Corona mining unit is located 80 kilometers from the city of Cajamarca, seven kilometers from
the town of Hualgayoc, by road, and 30 kilometers from Bambamarca, on the eastern slopes of the
Western Andean Mountains in Northern Peru, between 3,600 and 4,050 MASL. It is located between the
basins of Tingo-Maygasbamba and Hualgayoc- Arascorgue Rivers, affluent of the Llaucano River.
The company hires the services of a storage warehouse for concentrate in the port of
Salaverry, located in the province of Trujillo, department and region of La Libertad.
Its Area of Direct Influence (ADI) is constituted by the rural community of El Tingo and the
villages of Pilancones, Coymolache, Cuadratura, as well as the urban district of Hualgayoc3.
Moreover, its Area of Indirect Influence (AII) is constituted by the residents of
Bambamarca and basin communities of Tingo-Maygasbamba and Hualgayoc-
Arascorgue Rivers, including users of Manuel Vasquez Diaz water system. It also includes
the villages located near the ore transportation route to the port of Salaverry.
Cerro Corona mining unit produces copper and gold through conventional mining methods of open pit
and sulfide mineral treatment via flotation to extract concentrate, which is later transported by truck for
approximately 380 kilometers up to the port of Salaverry to be sent, by sea, to smelters in Asia and Europe.
3
La Cima defines its Area of Direct Influence as that which, due to the effect of company’s activities, could be impacted while accessing to the natural resources or to its social, economic and cultural structure.
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2 0 1 6 I N T E G R A T E D R E P O R T
Mining
The extraction process begins
with drilling, blasting, loading
and material hauling, and
ends with the operation of
material tramming or handling
to feed the Processing Plant
with a proper blending. Most
of the mining activities are
conducted by a contractor
specialized in mining, under the
supervision and management
of Gold Fields La Cima.
Cerro Corona Production Processes
The general guidelines of our production processes are to extract high quality concentrates at low cost while
preserving the environment, with special attention to the safety and occupational health of our employees
and contractors.
Blasting It is the process in which explosive
charges are used to break the rock into suitable fragments. The type of explosive is determined by the material type, the rock hardness, and the presence of water. Heavy Anfo is used in the operation, and during precut the cartridge emulsion is used.
Drilling The first stage of the mining cycle
is to drill holes in mined progress areas located on the pit banks. In the same, the payload will be located later. Drilling has parameters that depend on the type of material (ore or rubble) and the hardness.
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Handling in rom pad From the area of ore collection
(fingers in Rom Pad) loading is done with CAT 980 H loaders with 4.5 m3 of spoon capacity to feed Lokotrak mobile crusher and/or roller crusher of the plant.
Hauling Hauling of material is done in Volvo -
FMX 440 and Mercedes Actros 444 dump trucks with 32 tons capacity. The destination of materials varies according to their nature. Sulphide ore is intended for grinding and flotation process. Residues are sent to deposits and when materials are suitable for construction, they are destined to the construction of the tailings dam or road maintenance. A smaller amount is projected to continue accumulating ore oxides in the ore deposit (Stockpile).
Loading Subsequent to blasting, the
material is loaded with CAT 374 excavators of 4.6 m 3 capacity.
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Ore crushing The various types of ore obtained in
the mining process are collected in the stock of minerals to then enter to the crushing plant. The purpose is to reduce the ore size and ensure the ore feed to be crushed and get a smaller size (< 6 inches). The retrieved material is transported through strips to the grinding area.
Grinding
The crushing product is transported to a two-stage grinding circuit to continue the size reduction process and achieve the appropriate size for its shipment, in pulp, to the flotation process. Ore enters SAG mill to decrease its size from 4 to 0.1 inch. Then, the mill discharge is pumped to a size classification system in hydro cyclones, where ore of less than 150 microns size is sent to the flotation process, while larger ore is sent to the ball mill for its grinding. The purpose of this stage is to achieve the best ore discharge and classification, with features that ensure an efficient flotation process.
It should be noted, that in the ore crushing process, as well as in the grinding process, there is a permanent noise monitoring.
Flotation and reagents, gravimetric and regrinding
In these stages, the separation of valuable elements (copper and gold) of the non- valuable (iron, clay, bargains) is carried out through reagents addition to allow the flotation of the valuable minerals (copper sulfides and gold associated with them). This free gold is recovered by a gravimetric process. The material that does not fleet is considered as tailings. The overall objective of this stage is to recover the maximum metal content and ensure a marketable product quality.
Processing
The stages of the process used at Cerro Corona are the following:
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Thickening and tailing Two products are obtained from
the flotation stage: ore concentrate and tailings. Tailings are sent to the thickener, which separates solids from liquids and recovers the water. The final concentrate is thickened and goes to the filtering stage before its storage, while the tailings are sent to the tailings dam. At this stage, it is important to maximize water use in the thickening process, thus maximizing concentrate availability and minimizing pollution.
Filtering The concentrate is filtered in order
to extract all the water contained in the ore. Humidity control will prevent losses, either by dripping or volatilization, while transporting the material to the port of Salaverry. The percentage of humidity is around 8%.
Storage and delivery of concentrate
It is the final stage of the production process. Concentrate is stored for its subsequent dispatch to the Salaverry port. During 2016, an average of 168,003.1 WMT (wet metric ton) concentrate per day, as transported from Cerro Corona in 30-ton trucks.
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2 0 1 6 I N T E G R A T E D R E P O R T
Operative Efficiency
Positive production results obtained in 2016 - 6.6% above budgeted for copper and 3.3% for gold would not
have been possible without our employees’ commitment to safety, the company’s first value. This is reflected
in our 2016 outstanding safety performance indexes, figures which were not obtained since 2013.
It is important to highlight the work done in 2015 to promote a permanent culture
towards efficiency and innovation. Thus, in 2016 this methodology has been
maintained to allow integrating operation areas in the execution of process
optimization projects according to a vision of adding value throughout the production
process and subsequent cost reduction.
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For 2017, the great challenge for Operations is, again, to identify necessary activities that extend mine life
and execute projects that will allow continue reducing costs, for example in the tailings dam construction.
Additionally to this, we are still working on having a better understanding of the
mineral’s components, after identifying the option to build a gravimetric plant
that could provide an increase of 2% in the gold recovery process.
Another important project will be to change the Dispatch technology with the assistance
of a local supplier. This change will allow optimizing times in the mine operation, as well as
ore traceability through the use of sensors installed in each equipment, thus metallurgical,
geological and ore grade characteristics will be known in real time in material stocks.
Finally, it must be noted that every area has been working with great commitment in all social
responsibility activities by donating educational material to schools and painting their premises. These
activities constitute part of the Balanced Scorecard of every area and will continue during 2017.
In this way, a good idea has become a shared initiative, defining clear goals with their relevant risk
and economic viability analysis, and then an implementation plan is established for each project.
Other examples are: gravimetric process optimization, P8 control automation in the mill, identification of alternatives for treating oxides and sulphidation time determination.
Shortage of diesel consumption by using an additive to improve efficiency.
Optimization of road maintenance process, decreasing hauling time.
Mine to Mill project, by means of which mineral feeding variability to the mill was reduced. This contributed to better processed tonnage per hour in the concentrator plant.
Quantex Implementation, through the change of explosives, moving towards a technology that enables reducing costs and emissions of contaminant gas into the environment.
Reduction of tonnage variability, through optimizing the dispatch system, allowing a better control of safety indexes, material feeding the process and the historical registration for optimized management. This also allows ensuring the traceability of mineral feeding the plant and disposing material in deposits according to their characteristics.
From the efficiency projects executed during 2016, the following are noted:
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2 0 1 6 I N T E G R A T E D R E P O R T
Current
Budgeted
28,702
28,449
Copper production in tons for 2015 and 2016, in current and budgeted figures, is as follows:
2 0 1 62 0 1 5
30,667
28,774
Current
Budgeted
295,623
286,094
Au-equivalent ounce productionpresented for 2015 and 2016 in current and budgeted, figures is as follows:
2 0 1 62 0 1 5
270,212
260,638
Production Results [G4-9]
Gold Fields Ltd. has an annual production of approximately 2.0 million gold ounces, manages ore reserves
of 50.1 million gold ounces and mineral resources, including growth projects of 121.5 million gold ounces.
Cerro Corona has projected to process 53.1 million tons of material with mineral content until 2023,
with the aim of producing 1.0 million gold ounces and 203 K-ton copper in its concentrator plant
designed to process 19 thousand tons per day, at a rate of 825 tons per hour, with 94.76% availability.
Current
Budgeted
6,710
6,848
Processed ore in thousands of tons for 2015 and 2016, divided into current and budgeted figures, is as follows:
2 0 1 62 0 1 5
6,977
6,925
Current
Budgeted
158,909
150,205
Gold production in ounces for 2015 and 2016, in current and budgeted figures, is as follows:
2 0 1 62 0 1 5
150,210
145,333
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Resources and Reserves
Cerro Corona resources and mineral reserves have been estimated to an appropriate Economic Cut-
Off Grade of Net Smelter Return, with costs, tonnages and grades based on the model of resource
blocks. Likewise, estimates of any material under the Cut-Off Grade of Net Smelter Return that
need to be exploited in order to extract all of the available part of the resource are included.
Statements about mineral reserves include only measured and specified mineral resources,
modified to produce mineral reserves and contents in mine life plan. In addition, mineral reserves
and resources are appraised by the corporate technical group audits throughout the year.
All mineral reserves are quoted in production grades and tonnages directly from the mine, as
delivered to the metallurgical processing plant. Likewise, we perform continuously specialized
technical studies to identify resources and reserves that ensure Cerro Corona operations in the
long term, and consequently monitor growth projections and estimated production levels.
Ore reserves (unaudited)By December 31, 2015 and 2016, approved reserves of Cerro Corona amount to:
Gold equivalents in 000 oz.
Total proven and probable reserves of sulfides
Gold (000 oz)
Copper (M lb)
Copper (converted into gold equivalents in 000 oz.)
Total gold equivalents in 000 oz.
Proven reserves of sulfides
Gold (000 oz)
Copper (M lb)
Copper (converted into gold equivalents in 000 oz.)
Total gold equivalents in 000 oz.
Probable reserves of sulfides:
000 oz = Thousand ounces M lb = Million pounds
3,194 2,775
1,527
527
1,216
2,743
2 0 1 62 0 1 5
1,384
461
1,384
2,447
230
96
221
451
159
73
169
328
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2 0 1 6 I N T E G R A T E D R E P O R T
Gold Fields La Cima S.A. Growth 2
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2 0 1 6 I N T E G R A T E D R E P O R T
(1) Retentions part of employees' salary have been included.
(2) It includes payment on account of income tax, non-domiciled sales tax, dividends income tax, sales tax withholding, Mining Royalties (Law 29788), special mining tax (Law 29789), payments to OEFA and OSINERGMIN.
Gold Fields La Cima in Figures [G4-9] (In thousand soles)
Generated and distribute economic value (G4-EC1)
Direct economic value generated - Total income
• Distributed economic value:
• Payment to employees including social benefits1
• Payment to suppliers
• Dividend payment to shareholders
• Payments to the Government (Taxes)2
Retained economic value:
Investment development and impact on public benefit infrastructure (G4-EC7)
Total investment for the benefit of the communities
1,032,327
1,098,550
92,537
648,397
259,201
98,415
(66,223)
1,178,240
1,092,027
90,235
652,512
225,614
123,666
86,213
2 0 1 62 0 1 52 0 1 4GRI - Economic Indexes
1,099,546
971,136
92,817
652,632
170,228
55,459
128,410
20,248 27,069 29,553
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On the other hand, some events that impeded our sale operations were
also overcome. Due to flooded roads to Salaverry port, there were logistic
complications and transportation route of concentrate was blocked for an
approximate period of 30 days. Given the circumstances, alternative routes,
which due to safety reasons did not allow transporting the amount of concentrate
usually taken through the common route, were employed. Therefore, a greater
number of trips were required to comply with the shipment program.
The second event involved concentrate quality change due to new concentrate
composition, which resulted in re-negotiating sale contract terms. Since quality
was affected, this situation was reported transparently to our customers, so
that a new negotiation could made accepting the product composition4 and
ensuring concentration sale, thereby generating expected flow generation.
Thanks to the solid commercial relationship the company has with its customers,
new concentrate delivery deadlines were agreed and quality changes due to new
ore composition were accepted. In this way, the abovementioned events were
overcome, safeguarding the adequate operation performance of both parties.
It must be noted that for 2017, it is intended to look for new customers, promoting
Cerro Corona ore quality, giving emphasis to our good relationship with
communities, good environmental practices and compliance with international
standards on safety and occupational health. Long-term commercial contracts
with customers in Europe and Asia will be targeted. In addition, sales were
in the sport market, positioning Cerro Corona’s concentrate quality in the
copper concentrate market. The following table shows concentrate sales in
2016, both to companies with long-term contracts and to the sport market:
4 Gold Fields La Cima has not registered fines for failing to comply with regulations relating to its products’ delivery deadlines and/or quality standards [G4-PR9].
Pan Pacific Copper Co. Ltd.
Aurubis AG
Trafigura Pte. Ltd.
Glencore Peru S.A.C.
Aurubis Bulgaria AD
Louis Dreyfus Commodities Metals Trading S.A.C.
LS Nikko Copper Inc.
Total
43,040
39,835
30,985
15,113
10,149
9,158
5,196
153,477
46,437
42,811
33,633
16,379
10,918
10,005
5,521
165,704
Japan
Germany
Singapore
Peru
Bulgaria
Peru
South Korea
Sales %ConcentratesDMT
Concentrates WMTCountryCompany
28.0%
26.0%
20.2%
9.8%
6.6%
6.0%
3.4%
100%
Commercial ManagementThe drop of copper prices at the end of 2015 had a great impact on Gold Fields La Cima commercial strategy
during 2016. Above all, its financial performance was affected, therefore an exhaustive cost reduction plan was
implemented; for example, marine freight costs. Its commercial performance per se was also affected, hence
maximization of revenues was required through contract negotiation with customers. At the end of 2016, prices
increased and the operation’s profitability maximized, exceeding projected income expectations.
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2 0 1 6 I N T E G R A T E D R E P O R T
Gold Fields La Cima S.A. Social Capital
T o December 31, 2016, Gold Fields La Cima S.A. registered share capital is
S/1,135,227,383.29 (one thousand one hundred thirty five million, two
hundred twenty seven thousand, three hundred eighty
three 29/100 Soles), fully subscribed and paid.
The share capital of the company is made entirely by common
shares with a nominal value of S/.0.91 (91/100 Soles) each,
fully subscribed and paid, all with equal rights and privileges.
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Dividend Payment PolicyBy Mandatory Annual Shareholders Meeting, held on March 30, 2011, the following Dividend Policy was approved:
a) Distribution of dividends will be done according to the capital stock participation of each stakeholder, and only to the extent there are profits available for distribution.
b) At least 50% of the profits available for distribution in each fiscal year will be given out as dividends, after subtracting the legal reserve, subject in any case to the conditions and financial needs of the corporation. The non-distributed earnings balance will remain freely available on a profits account.
The General Shareholders Meeting or, in case of delegation, the Board will have the decision to fix the annual profits amount and/or proportion to be distributed as dividends, as well as the date or dates to announce this payment; there must be taken into account, in any case, liquidity, debt, investment plans, projected cash flow and other relevant factors of the Corporation.
c) The right to distribute dividends on account based on the result of the current period may be delegated to the Board. It may determine the amount and/or the quantity of dividends on account to be distributed, as well as the date or dates in which the payment will be announced, taking into account the factors referred to in literal b) above.
d) This policy shall apply from the date of approval and will remain in effect as long as it is not reviewed or amended by the General Shareholders Meeting.
By mandatory Annual Shareholders Meeting dated March 31, 2015, shareholders approved to delegate the Board with the approval faculty of dividend distribution with charge to company’s accumulated earnings, including the authority to determine amounts, opportunities and other terms and conditions to implement such distribution.
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2 0 1 6 I N T E G R A T E D R E P O R T
Dividend Payment Pursuant to the delegations made by the General Shareholders Meeting
held on September 27, 2010 and the Mandatory Annual Shareholders
Meeting dated March 31, 2015 as well as the Company’s Dividend
Policy approved on the Mandatory Annual Shareholders Meeting on
March 30, 2011, the Board decided to distribute dividends for the
amount of S/170,228,186.40 on account to 2010 and 2011 accumulated
profits (earlier fiscal years) distributed by the Company in favor of
common and investment shareholders, according to the following:
Board Meeting
15.09.2016 S/170,228,186.40 20.10.2016On account to 2010 and 2011 accumulated profits (earlier fiscal years)
Corporate Body
Date of agreement Concept Distributed
amountDividend Payment Date
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Shareholding structureCommon shareholders owning more than 5% of share capital by December 31, 2016:
Gold Fields Corona (BVI) Limited
British Virgin Islands
1,244,715,908 99.7766%Gold Fields
Shareholder Origin Economic Group Total Percentage
Shareholders entitled to vote:
Less than 1%
Between 1 and 5%
Between 5 and 10%
Greater than 10%
Total
113
0
0
1
114
0.22%
0.00%
0.00%
99.78%
100%
Shareholding Number of shareholders
Percentage share
Investment shareholders:
1,812
0
0
1
1,813
2.23%
0.00%
0.00%
97.77%
100%
Shareholding Number of holders
Percentage share
Other shareholders’ participationGold Fields La Cima owns 99.9% of Hualgayoc Holding S.A.C. shares.
Less than 1%
Between 1 and 5%
Between 5 and 10%
Greater than 10%
Total
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2 0 1 6 I N T E G R A T E D R E P O R T
Important Events
2 0 1 2
We obtained the re-certification of our integrated management system.
The sixth stage of the tailings dam construction ended with an approximate investment of S/.196.65 million, which guarantees an outstanding integrated water management in our operations, through a closed circuit and environmental control systems.
2 0 1 3
In 2013, the construction of the tailings dam continued, which guaranteed an outstanding integrated water management in our operations.
We completed the exclusion of all company’s common and investment shares from the Lima Stock Exchange Registry and from the Stock Market Public Registry, as well.
2 0 0 3
Gold Fields Ltd. signed a purchase option agreement with Sociedad Minera Corona S.A. for the Cerro Corona site.
2 0 0 42 0 0 5
Gold Fields Ltd. completed the land acquisition, engineering works, project design, Environmental Impact Assessment (EIA), and mineral resources and reserves estimates.
2 0 0 6
The purchase of the Cerro Corona Project was finalized and the construction of the mine began.
2 0 0 7
The construction of Las Gordas tailings dam and the exploitation of the quarry Riolita began.
2 0 0 8
July 27: The start-up of the ore processing plant took place (anniversary).
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2 0 1 5
By General Shareholders Meeting dated October 26, 2015 was agreed to reduce the share capital to S/1,135,227,383.29 (one thousand one hundred thirty and five million two hundred twenty seven thousand three hundred eighty-three 29/100 Soles), as well as to reduce the investment stock account to S/.155,669,696.91 (one hundred fifty five million six hundred sixty nine thousand six hundred ninety-six and 91/100 Soles) by returning to the shareholders the amortized par value, in accordance with paragraph 1 of article 216 of the General Corporations Law. Return of contributions was done according to the legal deadline, on December 22, 2015. This capital reduction has been registered in the Public Records of Lima on January 11, 2016.
Under the mechanism of works by taxes, the central market of Bambamarca was built. It is one of the most modern in the country and the largest in the northern region. With this work, traders in the area have been able to sell their products with the essential safety and health conditions.
In September 2015 Hulagayoc’s Health Center was open. The work was built entirely by Gold Fields, which channeled the support through Hulagayoc’s Table of Dialogue and Coordination. This Center has attended primary health problems.
2 0 1 4
Electromechanical assembly of El Tingo and Coymolache electrification, as well as the installation of measurers was finalized, which means that the electrification process concluded for the entire Cerro Corona’s area of direct influence.
2 0 1 0 2 0 1 1
The environmental management system was integrated to the Safety and Occupational Health System, according to ISO 14001:2004 and OHSAS 18001, respectively.
Regarding infrastructure investment, in 2011 the third stage of the tailings dam construction was completed and the fourth stage began according to the Area of Operations requirements.
2 0 0 9
ISO 14001:2004 re-certification and OHSAS 18001:2007 certification were obtained.
The first year of operation finalized and the plant reached its maximum design capacity.
ISO 14001:2004 certification was obtained.
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2 0 1 6 I N T E G R A T E D R E P O R T
2 0 1 6
During 2016, we continued working on social projects through the Hualgayoc’s Table of Dialogue, a very important platform for the social license of the operation and future expansions. The projects executed in agreement with the communities involved areas such as education, productive development as well as water and sewage infrastructure; highlighting the construction of three water systems benefiting 307 households.
In relation to local employment, as of December 2016, 64 local suppliers were incorporated to “Successful Entrepreneurs” program, obtaining their diagnosis and plans. Other 46 suppliers are in the process of implementing their plans, with a 70% progress.
A local supplier management system (directed by the procurement area) was implemented, collecting the feedback about the suppliers’ performance in order to ease the follow-up and control process.
Regarding health care, we continued financing “For the Children of Hualgayoc” nutrition project for under five-year-old children, which is directed by Caritas del Peru NGO and started in October 2014. As of December 2016, 883 children from 28 communities benefited from this program. The reduction of child anemia from 74% to 31% and malnutrition from 50 to 30% as from October 2016, in both cases, were outstanding results of this program. The project will continue until the end of 2018.
Prices and Awards 2016
Gold Fields La Cima was recognized for the fifth consecutive year as a socially responsible company (ESR), awarded by Peru 2021 Association in alliance with the Mexican Center for Philanthropy (CEMEFI). To obtain this award, good economic, social and environmental practices are evaluated, towards several stakeholders, such as employees, suppliers, communities and society in general.
In 2016, Gold Fields La Cima is still registered in the Good Environmental Practices Record, which is managed by the Agency for Environmental Assessment and Enforcement, thanks to its good environmental performance since there was no infringement found by the environmental regulation agency during supervisions conducted regularly since 2014.
Gold Fields La Cima’s stand won first place at the Expo organized by the 3rd Community Relations International Congress.
Cerro Corona mining unit among the safest operations in Gold Fields Ltd. Business Group, for the first and third quarter of 2016.
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2 0 1 6 I N T E G R A T E D R E P O R T
Good Corporate Government
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3
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2 0 1 6 I N T E G R A T E D R E P O R T
Since Gold Fields Ltd. shares are listed on the New York Stock Exchange (NYSE), and
registered in the U.S Securities and Exchange Commission (SEC), the company is subject
to its regulations in corporate governance and information disclosure matters in order to
be sufficient, fair, accurate, and timely. Likewise, the corporation’s shares are listed on the
Johannesburg Stock Exchange (JSE), thus compliance with the King II reports is mandatory.
In that sense, we are committed to incorporating Good Corporate Governance practices in our policies,
processes and procedures as key foundations of our business model. For that purpose, formal and widely
spread mechanisms were implemented to ensure corporate values guide our employees’ daily work.
Furthermore, we have specific policies to promote a transparent management,
such as according fair and equitable treatment of shareholders’ rights
relating to voting and representation, rejecting anti-competitive practices and
avoiding interest conflicts through mechanisms expressly established in the
Statutes, the Transparency in Third Party Relationships Policy, the Anti-Fraud
Policy, and the Code of Conduct in alignment with our headquarters.
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Code of ConductThe Code of Conduct was approved by the Corporation Board, governing all Gold Fields La Cima S.A. employees, directors, executives, contractors, suppliers and customers.
It aims to strengthening the organizational culture and corporate values by incorporating non-sectarian, non-political, social and environmentally responsible policies and practices in its business model.
This code formalizes aspects such as saying what you think, acting fairly and ethically, etc. It also sets specific guidelines for conflict of interest, use of information, acceptance of gifts, dinners and courtesies, in addition to prevent and discard bribery and/or corruption events.
The code of conduct is continuously disseminated through annual trainings and internal communication. Likewise, we have a free Ethics Hotline to be used by any person, whether or not he/she is an employee of the company, to report unethical behaviors.
Every year, all our employees sign a Conflict of Interests Affidavit, in which they must declare any conflict they may have with the company.
Human Rights Policy This policy reaffirms the company’s commitment on rights, dignity and liberty of every person; thus, it directly supports the United Nations’ Universal Declaration of Human Rights5.
Gold Fields Ltd. respects personal dignity, privacy and personal rights of every employee, and we are commitment to maintaining a workplace free from all discrimination and harassment. Employees should not discriminate on the basis of origin, nationality, religion, race, gender, age or sexual orientation, or engage in any kind of verbal or physical harassment. Consequently, the Human Rights Policy of Gold Fields Ltd. seeks to protect the right to:
5
During 2016 no incidents of discrimination related to human rights have been reported [G4-HR3].
• Human dignity.
• Fair treatment (subject to consideration of affirming previously disadvantaged groups.
• Freedom and security of person.
• Not being subject to slavery or forced labor.
• Freedom of conscience, thought, religion, belief and opinion.
• Not being subject to harassment on the basis of sex, sexual orientation, gender or gender orientation.
• Freedom of expression, subject to considerations of confidentiality and prohibition of hate speech and incitement to cause harm to others.
• Peaceful assemble.
• Freedom of movement.
• Fair labor practices.
• Not employing minors.
• Not being arbitrarily deprived of a property or possessions.
• Freely participate in any kind of cultural lifestyle.
• Lawful, reasonable and fair action.
• Not being subject to arbitrary arrest or detention.
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2 0 1 6 I N T E G R A T E D R E P O R T
Board [G4-34]
Nicholas John Holland, English. He holds a BCom and BAcc from the University of Witwatersrand, South Africa. He serves as Chief Execute Officer of Gold Fields Ltd., since 2008.
Mr. Holland was Executive Director in 1997 and became Chief Executive Officer on May 1, 2008. Before that, he worked as Chief Financial Officer in Gold Fields Ltd. Mr. Holland has worked in financial management for more than 37 years, 27 years of which for the mining industry. Prior to joining Gold Fields, he served as Financial Director and Senior Manager of Corporate Finance of Gencor Ltd.
Richard W. Graeme, Peruvian. He holds a Bachelor’s Degree in Geological Engineering from the University of Arizona, United States. He retired in May 2015 and currently serves as Advisor to some mining companies. He has been Director of the company since 2006.
Mr. Graeme worked for Phelps Dogde Corp. in several positions during 20 years. He was Vice President of Alaskan Gold Division for Sharon Steel and then Vice President of Operations. In addition, he was Vice President of Operations for Golden Queen Mining Co. from 1996 to 1999. For Gold Fields Group, he served as Vice President and Country Manager in Ghana (1999 – 2003), Vice President and General Manager in Peru (2003 – 2007), Vice President and Country Manager in Venezuela (2007 – 2008), and Vice President and General Manager of Lumina Copper S.A.C. (2008- 2015).
German Roberto Polack Belaunde, Peruvian. He holds a Bachelor’s Degree in Law from Pontificia Universidad Catolica del Peru (1982). He is Director of the company since 2006.
Mr. Polack is member of the Vidal, Quino & Polack Law Firm and the Advisory Committee of Lima’s Lawyers Association. He is also Director of BrightLife English S.A., Acme Analytical Laboratories Peru S.A. and Harsco Metals Peru S.A. He is legal representative of Amec Foster Wheeler Peru S.A., Aluma Systems Peru S.A. and Bloomberg Finance L.P.
Chairman of the Board Director Director
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Lino Abram Caballerino, Peruvian. He holds a Bachelor’s Degree of Chemical Engineer from Universidad Nacional de San Marcos. He has also a Master’s Degree in Business Administration from ESAN. He has served as Senior Manager, CEO and Director in various companies such as Cementos Pacasmayo and subsidiaries, Minera Pativilca, Minera Tintaya, Grupo Hochschild, Corporacion Financiera de Desarrollo (Cofide), Minero Peru Comercial and Siderurgica del Peru (Siderperu).
Mr. Abram has been also Director of Sociedad Nacional de Mineria and Asociacion de Productores de Cemento.
He is titular member of the Peruvian Academy of Engineering and, since June 2014, he is Director of Gold Fields La Cima S.A.
Ernesto Balarezo Valdez, Peruvian. He holds a Bachelor’s Degree and Master’s Degree in Industrial Engineering from Texas A&M University, as well as management studies at Wharton School of Business and Harvard University
Mr. Balarezo has a professional experience of 25 years in companies of the mining sector, focusing in the financial and operational areas. Previously, he served as Vice President of Operations of Holchschild Mining Plc. since 2010, being responsible for six silver and gold operations in Peru, Argentina, Mexico and Chile, as well as for the growth and development projects of the mentioned company.
He was General Manager in 2007 for Hochschild Mining Plc. in Mexico, and then he was promoted to General Manager for Peru in 2008. Previously, he worked in subsidiaries of Hochschild Group since 1997 and was Deputy General Manager of Cementos Pacasmayo, among other companies.
He served as Director, Executive Vice President and General Manager of Gold Fields La Cima until June 30, 2016.
Luis Alberto Rivera Ruiz, Mr. Rivera, aged 51, was appointed as the Executive Vice- President of the Americas Region for Gold Fields La Cima on October 2016.
Prior to joining Gold Fields, Mr Rivera was, since 2014, the Vice-President of Operations for Las Bambas and before that, on 2013 was the General Manager Copper Operations for Glencore Peru and Executive General Manager for all Xstrata Copper Operations in Peru since 2012. His career also includes 5 years as General Manager of the large Copper Tintaya and Antapaccay operations, as well as 11 year experience in the Xstrata Copper Operations of Minera Alumbrera, a large gold – copper operation in North Argentina, where he became Tech Services Manager after servicing as Chief Engineer and Senior Geologist.
Mr. Rivera has over 28 years’ experience in the copper and gold mining industry, in large open pit copper project and operations in Peru and Argentina, including his direct involvement and leadership in the merge & acquisition of Falconbridge Inc. and BHP Tintaya S.A. by Xstrata Copper as well as the sale of Las Bambas Project by Glencore.
Mr. Rivera has a bachelor degree in geology, the title of Geological Engineer, both by the Universidad de San Marcos and MBA studies at the Universidad Politecnica de Madrid, Spain.
Director Director, Executive Vice-President, General Manger
(*) Independent Directors are those not linked to the management of the company or to major shareholders. In Gold Fields La Cima, there is no relationship of association, consanguinity or affinity among shareholders, directors and/or managers of the company.
Dependent Directors
Independent Directors (*)
Total Directors
2
3
5
Board Structure
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Executive Committee [G4-34]
Veronica Valderrama Garibaldi, Peruvian. She holds a Bachelor’s Degree in Psychology and Humanities from Universidad Femenina del Sagrado Corazon, with a diploma in High Management and Human Resources Administration from Pontificia Universidad Catolica del Peru.
She has worked as Human Resources Manager for important companies, including LAN Airlines, during eight and a half years, and TACA Airlines, where she was in charge of the South America’s offices staff during 10 years. Currently, she serves as Vice President Human Resources
of Gold Fields La Cima S.A.
Juan Jose Granda Paseta, Peruvian. He holds a Bachelor’s Degree in Law from Universidad de Lima and a Master’s Degree in Commercial Law from Universidad de Salamanca (Spain), as well as a diploma in Mining and Environmental Law from Universidad de Ciencias Aplicadas. Mr. Granda graduated from the Management Program for Lawyers at Yale School of Management, Yale University (United States).
He has been Legal and Institutional Relations Manager in Gold Fields La Cima S.A. since 2009. Currently, he serves as Vice-President Legal
and Compliance, since 2015.
Jorge Redhead Byrne, Peruvian. He holds a Bachelor’s Degree in Economics from University of Indiana, United States, and an MBA specialized in finance from University of Notre Dame, United States. He has also graduated from the General Management Program of Harvard University.
Mr. Redhead has previously worked at companies such as Procter & Gamble, Telefonica del Peru, LAN and Nextel Peru. He serves as Vice President of Finance in Gold Fields La Cima S.A. since February 2014.
Vice-President of
Human Resources
Vice-President of Legal
and Compliance
Vice-President of
Finance (Chief Financial Officer)
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Victor Manuel Diaz Yosa, Peruvian. He is a metallurgical engineer graduated from Universidad Nacional de San Agustin de Arequipa, Peru. He holds a Master’s Degree from Colorado School of Mines (Strategic Project Evaluation) and from Berkeley University (Costs), United States. He also graduated from Universidad de Piura, Peru (Top Management Program – PAD, and Operations Management Program – PDO).
Mr. Diaz held the position of Country Manager of Newmont Mining in Mexico, Manager of Processes and Production of Minera Yanacocha S.R.L. and in several positions in Minas Buenaventura.
Mr. Diaz has served as General Manager of Cerro Corona since 2006, and as Vice- President of Operations from July 2014 to October 31, 2016.
Alberto Cardenas Rodriguez, Peruvian. He holds a Bachelor’s Degree in Civil Engineer from Universidad Catolica del Peru and a Master’s Degree in Strategic Business Administration from Escuela de Negocios of Pontificia Universidad Catolica del Peru. He graduated from the General Management Program of Harvard University. In 2014, he carried out studies in Mergers and Acquisition at London Business School.
He worked for Minera Yanacocha S.R.L., where he held several positions in areas such as Projects, Process Optimization and Mine.
Mr. Cardenas was Mine Manager of Gold Fields La Cima S.A. from 2007 to 2008, Operations Manager in 2009 and Strategic Planning Manager in 2011. He has served as Vice-President of Corporate Development from 2012 to December 2016. Since January 1, 2017 he serves as Vice-President of Operations.
Miguel Inchaustegui Zevallos, Peruvian. He is lawyer from Universidad de Lima, Peru, with an MBA from Universidad San Ignacio de Loyola and California State University, Fullerton.
Mr. Inchaustegui has more than 22 years of experience in the mining sector. He worked for important mining companies such as Minera Barrick Misquichilca, Volcan Compania Minera, Minera Lumina Copper and Gold Fields La Cima. He has also been member of the Prime Minister’s Advisors Cabinet in 2002, and Professor of Real Rights at Universidad Femenina del Sagrado Corazon (UNIFE).
Currently, he serves as Vice-President of Corporate Affairs and Sustainable Development, and also as Secretary of Gold Fields Board of Directors, being responsible for the areas of Community Relations, Sustainable Development, Communications and Institutional Relations.
Vice-President
of Operations
Vice-President of
Corporate Development
Vice-President of
Corporate Affairs &
Secretary of the Board
Management Committees [G4-34]
Committee of Account
Evaluation and ApprovalIts goal is to approve the intermediate individual
financial statements of the corporation.
Communications CommitteeIts goal is to ensure that information distributed on behalf of
the company is aligned to the established values, plans and
policies. For this purpose, we have identified and trained
spokespersons who can deliver messages to help in our
relationship with communities and/or any other stakeholder.
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Relationship with our Stakeholders
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Dialogue Channels [G4-24]
In 2016, the company has continued working on generating mechanisms in order to strategically,
continuously, respectfully relate with each of its stakeholders. Consequently, it establishes communication
platforms that inform and raise awareness about the company’s roles and powers in the promotion of
regional and local development, above all, in order to work with consensus with each one of its stakeholders.
Established dialogue channels are detailed as follows:
6
Hotline to report any unethical conduct, breach or violation of the Code of Conduct (Peru: 0-800-54-760).
GovernmentStakeholders
Communication channelsCommunication frequency
Main expectations identified
Periodic information briefings with elected authorities about commitments entered by the company and regulations compliance.
Financial report
Integrated report
Web page: www.goldfields.com.pe
Information Office in Hualgayoc, which eases administration of claims.
Direct ethics hotline6
Permanent
Annual
Annual
Permanent
Permanent
Permanent
• Increasing social pressures and conflicts
• Increasing inspections and sanctions procedures
• Complaints from communities
• Higher work expectations from communities
Shareholders and investorsStakeholders
Communication channelsCommunication frequency
Main expectations identified
Financial report
Integrated report
Web page: www.goldfields.com.pe
Direct ethics hotline6
Annual
Annual
Permanent
Permanent
• Gold and copper price volatility, inflation rate
• Economic performance
• Increasing social pressures and conflicts
• Regulatory compliance
• Social and environmental performance
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The web portal for Gold Fields La Cima suppliers is used to send requests for quotations and submit technical and economic quotations of registered suppliers.
Communication channelsCommunication frequency
Main expectations identified
Employee performance evaluation
Integrated report
Extended participation committees
Work climate committee
Breakfasts and lunches with High Management
Informative bulletins
Zero Point bulletin boards in all sites
GF Announces e-mails
Gold Fields Comunica
Meeting of leaders
Web page: www.goldfields.com.pe
Suggestions mailbox
Fellowship meetings
Direct ethics hotline
Intranet “Soy Gold Fields” (I am GF)
Gold Fields TV
Magazine “We are America”
Annual
Annual
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Annual
Permanent
Permanent
Permanent
Quarterly
• Need to develop employability skills
• Need for talent attraction and retention programs
• Training and education
• Wages and salaries
• Operative cost reduction
EmployeesStakeholders
Suppliers and ContractorsStakeholders
Communication channelsCommunication frequency
Main expectations identified
Integrated report
Portal on web page7
Aquiles Platform Portal
Operational coordination and management meetings
Technical and commercial visits
Unannounced operational controls
Ethics hotline
Annual
Permanent
Permanent
Permanent
Annual
Annual
Permanent
• Need to promote local employability skills
• Evaluation of supplier’s labor practices
• Requirement of greater readiness for procedures implementation
• Need to maintain the standards of quality of required goods and services
[G4-24]
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Communities: Area of Direct InfluenceStakeholders
Communication channelsCommunication frequency
Main expectations identified
Information office in Hualgayoc that facilitates documentation receipt, complaints procedure administration and citizen participation plan implementation as part of Cerro Corona’s Environmental Impact Assessment (EIA).
Monitoring unit of commitments made to communities.
Meetings for review and renegotiation of commitments.
Communal assemblies for land purchase and coordination of social development programs.
Awareness and communication workshops in the Area of Direct Influence in relation to the company’s environmental and social issues.
System of guided visits to Cerro Corona to learn about environmental management, production process and social projects.
Radio micro programs on cultural, environmental, health and safety topics.
Radio micro program “Know to win” addressed to high school students of 3o, 4o y 5o from El Tingo and Hualgayoc.
Specific information and diffusion campaigns.
Liaison with authorities, opinion leaders, media, non- governmental organizations and institutions in the area of direct influence.
Contact at the mine with representatives of the Community Relations Area.
Monitoring of environmental- social programs within Cerro Corona’s Environmental Impact Assessment (EIA).
Record of social incidents, in charge of the Community Relations Area.
Direct ethics hotline
Active participation in religious and cultural activities
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Permanent
Annual
Biannual
• Widespread perception of the harmful effects of mining in water availability and quality.
• Increasing pressure for local employment
• Increasing social pressure on environmental compliance
• Increasing social pressures and conflicts
[G4-24]
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In 2016, Gold Fields La Cima has formed part of the following institutions [G4-15]:
• National Association of Mining, Oil and Energy (SNMPE)
• Mining and Sustainable Development Dialogue Group8
• Chamber of Commerce and Production of Cajamarca
• Peru 2021 Association
• European Copper Institute – ECI, IMO Group9
• International Council of Mining and Metals - ICMM, through our headquarters
• Global Compact, through our headquarters
Institutions in which we participate
8
It is an inter-institutional initiative that brings together different actors involved in the mining industry to promote spaces and agendas on mining and its relationship to responsible environmental management. Among the leaders, there are mining companies, NGOs, consultants, communities, universities, local authorities, OSINERGMIN, the People’s Advocacy Office and the Ministry of Energy and Mines.
9
Gold Fields belongs to the "International Maritime Organization-IMO" group, which is responsible for ensuring copper producers to comply environment protection rules. Failure to comply with IMO rules can ban ore transporting by sea.
Communities: Area of Indirect InfluenceStakeholders
Communication channelsCommunication frequency
Main expectations identified
Continuous relationship with authorities, opinion leaders, media, non-governmental organizations and organizations in the area of indirect influence.
System of guided visits to Cerro Corona to learn about environmental management, production process and social projects.
Radio micro programs on cultural, environmental, health and safety topics.
Direct ethics hotline
Active participation in religious and cultural activities
Permanent
Permanent
Permanent
Permanent
Permanent
• Widespread perception of the harmful effects of mining in water availability and quality.
• Increasing pressure for local employment
• Increasing social pressures and conflicts
[G4-24]
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Participation in the Main Events of the Mining Sector
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XII International Gold and Silver SymposiumThis event, which is organized by the National Association of Mining, Oil and Energy, aims to promote awareness in the potential of natural resources, particularly gold and silver, and to foster new investment and business opportunities.
This symposium addressed topics such as trends and perspectives in these minerals, their impact in the world economy, and the role mining activities play in the development of many countries, especially in Peru. The event was held from May 17 to 18, 2016, and included Gold Fields La Cima representatives.
III Community Relations International Congress
and Entrepreneur Communities ExpoFrom August 17 to 19, 2016 Gold Fields La Cima participated in this social management event which is the most important in the Peruvian extractive sector. It is organized by the Peruvian Institute of Mining Engineers and was held in the campus of Universidad Nacional Agraria La Molina. It aims to share experiences and proposals on consultation mechanisms with residents related to mining projects. For this purpose, the event addressed four main topics:
• Consultation mechanisms
• Space for reaching multi-actor consensus
• Social development in extractive industries
• Tearing down myths
Our Vice-President of Corporate Affairs and Sustainable Development, Miguel Inchaustegui, participated as speaker in the round table “Transforming errors in learned lessons” and was appointed as the next chairperson of the event’s organizing committee.
On the other hand, the Entrepreneur Communities Expo was held in this congress, where several extractive companies showed their main development projects and programs executed in their corresponding areas of influence. Gold Fields La Cima presented the project “Promotion of entrepreneur networks and citizen participation - REDyPAC”, which was executed with the support of Cedepas Norte and NGO Lutheran World Relief.
The project has directly and indirectly benefited 510 families such as small stockbreeders, artisan cheese makers and milk suppliers by increasing their income and strengthening their business capacities. Gold Fields La Cima’s stand won first place at this Expo.
XVIII Peruvian
Geological CongressRepresentatives of the Geology and Exploration Area were in charge of presenting the “Intrusion Phases in Cerro Corona deposit” study. They also participated in a round table about geometallurgy during the “Detailed Mineralogical Characterization in Cerro Corona’s Cu-Au deposit, an essential key for the geometallurgy and process optimization” conference.
This event, held from October 16 to 19, 2016, is organized by the Peruvian Geological Society and included many representatives from the mining sector, consulting companies and academic entities.
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Carnival of HualgayocHualgayoc’s Carnival is celebrated between the months of February and March of each year, and it is one of the most important festivals for Hualgayoquinos. Gold Fields La Cima sponsored S/.20,000 given to the Organizing Committee.
Cultural events we supportWe believe that our participation
in cultural events contributes
to strengthening relations with
the communities and shows
respect to their traditions. In
addition, our brand presence
in printed material and radio
contributes to reinforce Gold
Fields’ corporate and institutional
image. In 2016, we participated
in the following events:
Carnival of CajamarcaCajamarca’s Carnival is celebrated between the months of February and March of each year, and it is considered to be the most important Carnival held in Peru. The company sponsored S/15,000, amount used to pay services suppliers of the election and crowning of the Junior Queen and Miss Carnival 2016.
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Hualgayoc’s Virgin of El
Carmen Patronal HolidayThis holiday is held at the end of August to the beginning of September, every year, in honor to Virgin of El Carmen. It is considered one of the most important religious festivity in the province of Hualgayoc, which includes several religious, artistic, sporting, cultural and social activities, among others.
An important activity during this celebration is the “nine nights of tribute to the Virgin” (Ninth), in charge of districts and organizations of the city and surrounding hamlets.
As every year, officials of the company, along with the hamlet of Coymolache, offered the Second Night of the Ninth, showing empathy, commitment and respect for Hualgayoc’s culture and traditions.
Company’s contribution was S/210,000, amount used to organize various activities, including: albazo, Ninth prayer, painting contest, soccer championship, ninth mass, hiring of musical groups for social dance and fireworks.
Mother’s Day in HualgayocThis activity was held on May 5 at Hualgayoc’s Joaquin Bernal Coliseum with the participation of approximately 500 people. This event was organized in coordination with the District Municipality of Hualgayoc. The company donated S/12,497.89 in provisions for the baskets delivered to attending mothers. We also sponsored a raffle of home appliances.
Agricultural and
Craft Fair of El Tingo
Rural CommunityIt is one of the most important events of El Tingo community, where several competitions seek to promote culture and tradition of the area. This event is organized by the members of the community with the support of communal and private companies. As every year, Gold Fields La Cima sponsored the event.
Company’s contribution was S/31,125.57 and US$ 450.17, amounts used in the purchase of “porongo” containers, stainless steel buckets, musical groups, scepters and crowns for the queens, computers, Brown Swiss calves and the rental of 20 stands.
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Impacts, Risks and Opportunities 5
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General Approach to Economic, Social and Environmental Impacts, Challenges and Opportunities [G4-2, G4-14]
During 2016, the company continued working in our processes according to
a risk prevention model. To this end, we have a committed multidisciplinary
team who meets standards and procedures, implements required actions to
achieve planned results and identifies opportunities for continuous improvement
of these processes. Below we detail the risks identified in the economic,
social and environmental areas, according to their critical level by severity and
probability of occurrence, and the actions taken for their mitigation in 2016.
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The principle of risk prevention also applies to processes carried out by third parties, who have the responsibility to be aligned with our requirements; for this reason, controls and audits are carried out to ensure compliance.
Risk DescriptionNo
Increased social pressures, conflicts and community expectations
2
Government / Political instability 7
GFLC Union - labour conflicts3
Water management (on site and for communities) / Low Level in Tailings
5
Potential blasting restrictions - Regalado Family
6
Restriction to raise tailings above the Tomas Spring level
1
Increase in regulatory scrutiny / sanctioning procedures & inspections
4
Maintaining throughput8
Houses in very serious conditions 10
Erosion of Free Cash Flow (price volatility/cost inflation)
Risk Mitigating Action
• Close follow up to committments
• Strong engagement with local authorities
• Anticipate potential conflicts / Contingency plan
• Implement contingency plan for police support.
• Lobby / Dialogue with authorities.
• Active participation at SNMPE and Chambers of Commerce
• HR to negotiate with Union.
• GF to follow up & support negotiating process.
• Operational continuity plan by GF.
• Work closely with community and government authorities
• Work closely with Regalado family.
• Trabajar cercanamente con la comunidad y las autoridades
• Relacionamiento cercano con la familia Regalado
• Handle MVA and key Directives expectations
• Re-engineering of the blanket construction process
• Secure potable water to Cerro Jesus.
• Adding channels to TSF.
• Complete optimization grinding area
• Debottle Ball Mill
• Continue repairing houses in high risk of collapse
• Ensure delivery of Production Plan
• Strict cost containment/reduction measures
Risk
22
14
22
18
18
23
17
13
5
89
1
5
5
4
3
2
1
9
4
8
2.3
5.6
7
0 1 2 3 4
Same position
Moved up Moved
down
Pro
ba
bili
ty
Severity
10
Top 10 Operational Risks
Cerro Corona
Dec '16 Quarterly Review| Jan 18th, 2016
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Integrated Policy on Strategic Goals related to Safety, Occupational Health and Environment
• Incorporate safety, occupational health and environmental management in operational and administrative processes developed within our mining activity.
• Count with an integrated system of safety, occupational health and environmental management based on the continuous identification of hazards and environmental issues, risk assessment and evaluation of environmental aspects in order to prioritize controls for high risk activities and significant environmental aspects.
• Optimize the use of consumable resources; equally, and wherever possible, promote waste reduction, reuse and recycling.
• Train Gold Fields La Cima S.A. personnel and contractors in safety, occupational health and environment to comply with their obligations and responsibilities.
• Uphold a process of continuous performance improvement of the integrated safety, occupational health and environmental management systems with the participation of staff and contractors.
• Prevent injuries and occupational illnesses of Gold Fields La Cima S.A. personnel, contractors and visitors who have access to our operations and administrative activities, especially in occupational exposure to dust and noise.
• Avoid pollution by executing procedures, practices, techniques, materials, products, services or energies to avoid, reduce or control generation, emission or discharge of any kind of contaminant or residue, in order to diminish environmental impacts.
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Integrated Management System (SSYMA)The implementation of SSYMA is a shared responsibility among
the General Management, who leads its application, supervisors
and employees in general, who implement standards in their
daily work. In 2016 the internal audit process of the Integrated
Management System SSYMA was satisfactorily carried out.
• Comply with the requirements of safety and occupational health regulations set forth by the Mining Sector, national legal regulations, internal rules and other requirements in force and applicable to safety, occupational health and environmental management.
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Safety and Occupational Health 6
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During 2016, safety and occupational health at Cerro Corona have been reinforced through initiatives
that were aimed at improving awareness in relation to the importance of working safely, proper
management of risks by our employees and contractor companies, targeting continuous follow-up from
functional line supervisors. For this purpose, company’s High Management support has been received.
Safety is the main value to reach excellence of operations in Cerro
Corona mining unit. To this end, we continue working taking into account
the premise “If we cannot operate safely, we do not operate".It must be noted that the different initiatives are accompanied by effective communication between supervisors and their teams, permanent training programs and organizational alignment with the main goal to make safety be recognized as everybody’s responsibility and commitment.
Strategic Goals
Count with a Safety and Occupational Health Management
System based on the identification of hazards and risk control.
Incorporate safety and occupational health management in
all operational, commercial and administrative processes.
Train all employees and contractors appropriately so that
they can comply with their obligations and responsibilities
regarding safety and occupational health.
Maintain a continuous improvement process
with the commitment of all employees.
1.2.3.4.
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Prevention Culture
As every year, the company work under a
prevention culture, so there are initiatives
permanently implemented in order to
prevent and control conditions or factors
that may affect employees, contractors
and/or visitors. Initiatives implemented in
2016, include:
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a. Visible leadership:Focusedonstrengtheningleaders,whoshouldactasrolemodels of safe behavior, communicating the company’s values; likewise, promoting safe and healthy work environments; being active and visible in the field to interact with employees in a positive manner; strengthening safe behaviors and providing coaching to develop safe performance in a constructive manner; and specially, encouraging the staff so that they assume a good safety behavior. The following activities were the most relevant of 2016:
For 2017, we are committed to strengthening this program with the
participation of contractors in the Culture 1500 program.
Passionforsafety
In2016,asix-hourcoursewasofferedtoinvolveandbuild awareness in the functional line (194 Gold Fields La Cima supervisors and contractors) about the commitments with the safety and occupational health legislation. This training was in charge of a multidisciplinary team made up of the Legal, Human Resources, and Safety and Occupational Health managements.
Zero Incidents Agreement
This agreement is signed by all employees and contractors and it aims to formalize the commitment of each employee with safety and health. The agreement includes information about the main safety regulations of safety and is part of the company’s induction program.
Safety exhibitions
The World Day for Safety and Health at Work is celebrated every 28 April. In such context, a safety exhibition was organized with the participation of the company and contractors. It included the benefits of the Hand Protection Program through a theatrical performance, and some recreational activities to disseminate basic safety concepts, with the intention of encouraging awareness of the importance of safety.
b. Safety Basedon Behavior (SBB) ProgramAfterthepreparationstage,theprogram enters the maturity stage, involving 164 observers and 26 leaders from the operative and support areas of Cerro Corona and contractors, in order to change risky behaviors for safe work habits in our employees and contractors based on explicit, objective, positive and frequent feedback.
c. Risk managementFrom exploration to closure, the company’s facilities, procedures and plans are subject to changes and continuous improvements for business success. These changes may introduce new hazards and risks, which should be promptly identified, evaluated and controlled through an effective change management to prevent incidents.
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d. Contractor managementIn Cerro Corona contractors are hired to perform operative and support activities; thus, it is important to ensure they have effective management systems that provide and maintain safe and healthy work environments with the responsibility of complying with the company’s minimum standards.
alf Yearly Program of Recognition of the Model Employee with a Safe Behavior
This initiative aims to recognize safety efforts by Gold Fields La Cima staff and contractors. Thus, each area manager proposes a candidate, taking into account that he/she represents a safety example; then, the candidates are evaluated by the Cerro Corona Direction Team, so that the winners finally receive public recognition.
Committee on Safety and Health at Work [G4-LA5]
Pursuant to the Law 29783 regulating Safety and Health at Work, and the Safety and Occupational Health in Mining Regulation, S.D. 024-2016-EM, the parity structure of the Committee has remained the same. It is constituted by equal number of company’s officials and employees. Committee members are elected by vote, representing 3% of the total number of employees and it is formed as follows:
• Operations Manager
• Process Manager
• Mine Manager
• Safety and Occupational Health Manager
• Head of Occupational Health
• 5 safety representatives of workers
It is important to highlight that in 2016 the Committee agreed to review the safety procedures through a joint work with supervisors, and above all, maintain ongoing communication with employees in the search of opportunities for improvement to the benefit of all parties.
On the other hand, the company continued participating in the Industrial Safety Committee of the National Society of Mining, Petroleum and Energy, which aims to be a space for dialogue, advice and exchange of best practices on mining sector safety. Likewise, the Emergency Response service is still active, and in strategic positions there is specialized personnel trained for this purpose (paramedics and rescue workers with proven experience).
In addition, the company is associated to SARCC (Coordinating Center for Search and Rescue) of the National Society of Mining, Oil and Energy 10.
10
SARCC was created to coordinate timely and effective resources nationally available through contacts with different support agencies. This initiative has the aim to meet staff emergency situations of companies that are in remote areas and require support through operations of search, rescue, medical evacuation, etc.
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It shall be noted that regulations changed with the publication of S. D. 024-2016-EM: Safety and Occupational Health in Mining Regulation with an initial deadline for adjustment of 30 days which was subsequently extended to 120 days.
Safety and Occupational Health Management Indexes
(1) Includes personnel of Gold Fields La Cima and contractors.
(2)Occupational health diseases have not been diagnosed.
(3) Correspond to lost days of a contractor worker disabled by an accident in Cerro Corona operation.
(4) Rate requested by national legislation.
(5) 1,000,000 rates according to Peruvian law.
Programs of General Inductions [G4-LA9]
Number of training hours per year
Number of participants per year
Average training hours per employee per year
Training in Occupational Health and Safety Programs
Number of training hours per year
Number of participants per year(1)
Average training hours per employee per year
Defensive Driving Training Programs
Number of training hours per year
Number of participants per year
Average training hours per employee per year
Type and rate of injuries, occupational diseases(2), lost
days, absenteeism and number of work-related fatalities
Number of work-related fatalities
Number of lost days(3) [G4-LA6]
Injury rate with lost days (IFN)(4)
Rate of lost days(5)
61,552
3,847
16
135,526
7,444
55
8,812
2,202
4
2 0 1 62 0 1 5
37,710
2,391
16
129,964
5,921
56
7,804
1,899
4
0
171
0.17
29.46
0
185
0.16
28.89
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Next stepsFor 2017, our commitment is to strengthening the Visible Leadership and Safety Based on Behavior (SBB) programs with employees and contractors as part of the Culture 1500 program, by means of IT tools in a virtual platform which will allow to create real time reports, and improve investigations of incidents. To this end, an eight-hour course is being designed and will be delivered to supervisors.
In order to keep working on awareness-raising programs about the importance of safety, two safety exhibitions will be scheduled with topics related to the SBB program and breathing protection. This exhibition includes parades, games, theatrical plays, in order to promote a safe behavior. These activities are expected to strengthen the commitment of the team with regards to safety issues.
Total worked days
Men
Women
Total
138,960
1,330
619
1,949
1.74
0.25
1.99
135,000
2,351
341
2,692
Rate(*)2 0 1 62 0 1 5 Rate(*)Absenteeism rate by gender[G4-LA6]
0.96
0.45
1.40
(*) 12 months of 30 days were considered as total worked days.
Total worked days
Cajamarca-Ciudad
Cerro Corona
Puerto Salaverry
Santiago de Surco
Total
138,960
23
1,724
11
191
1,949
0.0%
1.8%
0.0%
0.2%
1.99%
135,000
38
2,418
10
226
2,692
Rate(*)2 0 1 62 0 1 5 Rate(*)Absenteeism rate by region[G4-LA6]
0.0%
1.2%
0.0%
0.1%
1.40%
(*) 12 months of 30 days were considered as total worked days.
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2 0 1 6 I N T E G R A T E D R E P O R T
Social Responsibility Management
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7
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2 0 1 6 I N T E G R A T E D R E P O R T
Our Team
2016 has been a year of great challenges with regards to human resources due to
the change of the company’s leaders. To this end, we tried to maintain confidence
in the stability of the organization at all levels, paying particular attention to ensure
that vice- presidents and managers keep proper communication with their respective
teams. Thus, each executed program has supported this process of change in
a friendly manner since the preservation of work climate remains essential.
Apart from this organizational situation, training programs are still designed to allow individual professional development of each employee, considering additionally that most programs have been executed by themselves.
On the other hand, recruitment of personnel, talent attraction and retention, strengthening of initiatives for personal-work balance have also been important work issues in 2016.
7.1
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Strategic GoalsGold Fields La Cima overall strategy regarding its employees is based on seven lines of work:
1 2 3 4 5
Be a company that you can be proud of
Treat you with respect and work with you to ensure your health and safety
Celebrate achievements
Provide you with adequate development and support so that you achieve success
With your help, make Gold Fields La Cima the "best place to work"
Attract and Retain
Talent and Leadership
Learning and Development
Change Management and Communication
Compensation
Structure
Information System
1
2
3
4
5
6
7
Create an attractive value proposition for current and potential employees.
Develop a transparent talent management strategy, based on competencie s and development plans
Design and implement a comprehensiv e learning and development strategy for all employees.
Implement and effective internal communication strategy that helps reaching goals of human resources management.
Develop a remuneration strategy aligned with performance evaluations.
Ensure that the organizatio nal structure has the necessary capability to implement a successful human resources strategy.
Design and implement an information system that will support the human resources strategy in the long term.
Gold Fields La Cima’s commitment to its employees
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2 0 1 6 I N T E G R A T E D R E P O R T
Men
Women
Total
57
11
68
82
18
100
56
12
68
%2 0 1 62 0 1 5 %Officials by Gender
84
16
100
Men
Women
Total
261
57
318
82
18
100
253
54
307
%2 0 1 62 0 1 5 %Employees by Gender
82
18
100
Workforce Structure [G4-10]
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(*) Specialized contractor personnel are not included.
Contrato Indefinido
Men
Women
Total
Temporary contract
Men
Women
Total
291
62
353
27
6
33
80
20
100
91
9
100
247
60
307
62
6
68
%2 0 1 62 0 1 5 %By type of contract(*)
82
18
100
82
18
100
Coymolache Village
El Tingo Peasant Community
City of Hualgayoc
La Jalca-Pilancones Extension
Total
77
85
248
85
495
6
17
68
9
100
26
78
310
41
455
%2 0 1 62 0 1 5 %Personnel assigned to the Area of Direct Influence according to the Community *
16
17
50
17
100
(*) Gold Fields La Cima and contractors are included.
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Personnel by Region of Origin
La Libertad
Men
Women
Total
22
4
26
84
16
100
21
4
25
85
15
100
Lima y Callao
Men
Women
Total
80
35
115
70
30
100
80
35
115
70
30
100
Arequipa
Men
Women
Total
Cajamarca
Men
Women
Total
Junin
Men
Women
Total
18
6
24
131
15
146
15
2
17
81
19
100
89
11
100
88
12
100
17
4
21
128
16
144
15
2
17
%2 0 1 62 0 1 5 %
75
25
100
90
10
100
88
12
100
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%2 0 1 62 0 1 5 %Personnel by Region of Origin
Other Regions
Men
Women
Total
51
5
56
92
8
100
46
5
51
91
9
100
International
Men
Women
Total
Total
1
1
2
386
67
33
100
2
1
3
375
50
50
100
Average rotation of men
Average rotation of women
4.1%
8.8%
10%
12%
2 0 1 62 0 1 5Other Indexes [G4-LA1]
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Social Benefits Beyond the Law [G4-LA2]
Social benefits assigned by the company to its employees have continued to support the strengthening of a balance between work and personal life, since life qualify of employees and their families is essential to achieve goals and an environment, where everyone can perform their duties properly. During 2016, social benefits granted by the company were:
Health
• Health Plan (EPS) for employees and their dependents, covered 100% by the company
• Cancer insurance for all employees and their dependents
• Life Insurance (Seguro de Vida Ley) from the first day of work
• Business travel and holidays insurance for certain employees and their families (30 days).
• Annual preventive health checkups in all specialties for all employees.
• Healthy lifestyle program “Vida Sana, Vida Gold Fields”.
• Serious diseases policy for area heads and managers.
• Health campaigns for employees (gynecological and Health gastrointestinal diseases).
• Health talks for employees and spouses.
In 2016, the “Vida Saludable” (healthy life) program included:
• Thursdays of fruit
• Stretching sessions (Active Breaks)
• Nutritionist assessment in dining room
• Wellbeing lecture with external guests
Education
• School tuition: School tuition: the company provides between 80 and 90% of registration payment and school tuition for employees’ children between ages 3 and 18.
Financial
• Loans in case of health problems or death: The company provides the equivalent to the amount of remuneration to those employees with over six months working for Gold Fields La Cima in case of unforeseen health needs or death of their dependents.
• Salary advance: Two continuous times, at free request of the employee.
• Financial assistance for relocation and transfer of those employees who due to work reasons should be transferred to a city different of their habitual residence place.
• Annual and long-term bonuses for officers and efficiency bonus for staff, paid quarterly, based on the achievement of goals and policies of the company.
• Discounts and corporate rates in vehicle insurance policies and hotel accommodations.
S/
Sports
• Organization of annual sports championships to integrate employees and contractors.
• Sports program in Lima: Zumba lessons and calisthenics at work.
Festivities
• Labor Day, Mother’s Day, Father’s Day, Miner’s Day and New Year’s Eve.
• Christmas for Children (Lima and Cajamarca).
• Integration Gincana in Lima (September) and Cajamarca (October).
• Halloween celebration (Lima and Cajamarca).
• “Unsha” celebration (Cajamarca).
• End of the year party in Cajamarca with the participation of all employees
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Work-personal life balance
• Roster for administrative staff at the mine is 4 days on and 3 days off.
• Christmas bonus.
• Christmas presents for employees’ children.
• Flexible and summer schedule for Lima and Cajamarca employees.
• Workshops and lectures about wellbeing for employees and spouses/partners. For example: spiritual intelligence, how to understand Y and Z generations, among others.
• Paid leave for death of parents, spouse or children up to 7days.
• Paid leave for studies: when employee started a course related to his/her work, and being approved by the company, the company grants a paid license for purposes of study and exams.
• Unpaid leave due to sick relatives (wife, children, parents, siblings) of up to 8 consecutive days.
In 2016, the "Tesoro Gold Fields" (GF Treasure) program included:
• Gift Card (“sweeten the day of those you love most with a cake”).
• Paid leave for civil marriage: Three days
• 2 days of rest
• Paid paternity leave: five days (an additional day to Work-personal life balance law provides).
• Contest questions to get a double ticket to any destination of Peru. Participating in raffle organized by the Human Resources gives employees a closer look at key information of the company.
• Camp Services
• Accommodation in modules adapted to the weather conditions.
• Laundry service.
• Recreation area with games (billiards, pool, table football, table tennis) karaoke and cinema room.
• Internet access in the rooms.
• Cable TV
• “Corona grill” where there are barbecue grills, ovens and cylinder stoves.
• Internal transportation of staff and transportation between Cajamarca - Cerro Corona, and vice versa.
• Proper infrastructure for a dining room with a high standard catering service.
• Nutritional monitoring.
• Indoor multipurpose Court (football, basketball and volleyball).
• “Corona Activo gym” where there are machines for cardio exercises and free weights with the support of specialized instructors.
• Maintenance of green areas adjacent to accommodation modules and offices.
In 2016 the company continued with an attractive compensation policy, applying
efficiency bonuses for the staff in reference to company’s goal fulfillment; and considering
indexes such as cost savings, safety and production levels, among others.
Likewise, executive officials receive a for long term monetary bonus, which is assigned annually
and paid after a period of three years through its shares. This incentive seeks to recognize
performance and individual commitment of our leaders to the results of the Corporation.
Compensations
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Culture 1500 Program
This program aims to integrate all Cerro Corona’s
employees and the main contractor companies
(Newrest, San Martin and Liderman) as a
great family by means of different activities.
For instance, in 2016, cultural events have been organized and
publications have been issued, such as the quarterly internal
magazine We are America, in order to strengthen the scope
of work with contractors. Finally, contractor companies were
invited to participate in the ¡We are worth gold! Program.
The program deployment also included health and recreation
initiatives for employees, contractor companies and direct
relatives, in order to promote family and cohesive spirit
that allows a balance between work and personal life.
This program is expected to be one of the most
important foundations to manage the most value
resource of the company: its people.
Labor Relations [G4-11]
In 2016, negotiations with the
company’s union were started
to maintain a well-being work
environment for all employees.
The latest agreement was
effective until June 2016 and we
expect to sign a new agreement
during the first quarter of 2017.
The company’s union is formed
mainly by employees from
communities and represents
17% of the total workforce.
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Talent Management
n 2016, Talent Management area has helped leaders in the processes of change
taking place in the company; therefore, the recruitment of executive personnel in
accordance with the needs of the business has been implemented. Also, training
programs have been organized with efficiency and the corresponding cost reduction.
Training programs were developed with company’s employees, such as internal instructors,
chiefs, managers and vice-presidents, resulting in very positive results, This situation is
reflected on satisfaction indexes of participants. On their side, instructors have developed
communication abilities and strengthened work safety in their corresponding teams.
It is important to highlight that Talent Management’s work starts with the organization of workshops
for the company’s strategic planning, which facilitates the process to define corporate goals. This
process includes organizing exhibitions with experts in order to enrich planning with relevant
information, as in the case of lectures on economic analysis of the country and the mining sector.
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Development and
Training Programs [G4-LA10]
During 2016, Talent
Management has continued to
obtain maximum performance
of employees with ad hoc
training programs addressed
to individual career lines for
administrative, technical and
operating staff. Main developed
programs are detailed as
follows:
During 2016, the Gold Fields School brand was re-launched with an important internal communication campaign, in order to strengthen this platform as a comprehensive mechanism for the professional-individual development of each employee. This re-launching was aimed at positioning the platform as a strategic ally of the business, and was expected to closely help in the execution of the company’s goals.
In this context, a new curricular map was designed to cover the company’s needs; for instance, along with the cost reduction strategy an innovation course was included. The experience of internal instructors who delivered training programs was also taken into account, and in some cases, the participation of external advisors for specialized themes.
The courses taught during 2016 were: Influence, Orientation to Results, Innovation, Development of Others, Efficient Management of Time, Enrollment in the Feedback Model, Feedback Model, Abilities to Strengthen Commitment, Negotiation, Knowledge of the Business, Finances, Costs and Budgets.
In order to strengthen and help developing employees’ abilities, this program works on creating individual development plans for each employee, and defining the career path of every member of the technical and operative personnel.
Thus, after one-year training, in 2016, an evaluation was made to know the individual career development achieved by employees. Thus, we supported the design of ad hoc analysis tools according to the company’s needs through a joint work with Tecsup, which is a reference national technical institute. The evaluation process included Tecsup’s personnel and the supervisor of each employee, hence supervisors and evaluators were both trained.
This program included 126 employees from different areas of the operations. For 2017, we planned to update the training plan to help employees continue growing.
Gold Fields School Building Program
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During 2016, this program enabled to continue identifying strengths, areas to improve and development potential for professional growth of officers. So, through an evaluation, we determine their starting point to later design an individual professional development plan for each of them.
The program includes a coach and meetings between the evaluated participant, an expert consultant and his/her head office, allowing to direct the development plan and the evaluation feedback better. Likewise, it includes progress meetings so employees continue involving their immediate chief and receive necessary support.
During 2016, eight employees gained access to co-financed university careers,
specialization and technical courses by Gold Fields La Cima.
As every year, applications are evaluated by a committee which analyzes the employee’s performance and achievements, relevance of the elected study program and its impact on their functions and the goals of the area where they work. It must be noted that the applicant should propose a project to be carried out in the company applying the knowledge acquired in these studies.
To support decision making related to the courses to follow, exhibitions were held to present universities from Cajamarca, Lima as well as technical institutions which provided physical and digital information to the operation’s personnel about the specific scopes of their courses and careers.
On the other hand, to enable effective communication with headquarters, English courses were also financed through a permanent teacher for the operations personnel. For those employees who cannot attend classes, the Open English program was acquired.
Workshops are held to strengthen team work in Cerro Corona. During 2016, they were intended to support change management process in the organization. For this, dynamics helped to review topics relating to communication, trust, analysis of results and commitments.
Delta Program Scholarship Program Team Consolidation Workshops
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Training Management Indexes
Training Programs* [G4-LA9]
Number of training hours per year – Men
Average training hours per employee per year – Men
Number of training hours per year – Women
Average training hours per employee per year – Women
32,970
96
5,521
91
2 0 1 62 0 1 5
33,775
103
4,709
65
* It Includes technical courses, defensive driving courses and safety induction, training at Gold Fields School and safety programs.
Men
Women
Total
328
73
401
323
76
399
2 0 1 62 0 1 5Participants per Year and Gender
Performance Management [G4-LA11]
In 2016, this process was incorporated into the Success Factors platform which enables a more integrated performance management, facilitating online access for employees using their computers and cell phones.
The platform includes training modules and allows to issue individual action plans for each employee according to their intermediate and final performance evaluation results. In this way, decisions can be made relating to salary, access to training programs, promotions and career growth in the company.
The Performance Management, through the Balanced Scorecard methodology, allows us to focus the goals of the organization, area and individuals in terms of quantity and quality.
Every year, 100% employees can define strategic and operational goals according to their roles, allowing to measure goal achievement along a period of time (from January to December). The process includes a mid-year intermediate evaluation of each employee to promote impartial, positive and horizontal feedback about their progress.
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Health and Social WelfareGold Fields La Cima has an area in charge of ensuring the company’s presence among employees and their families when they need it; for example, in case of illness, death, etc., providing the employee with permanent support at the camp or their family through in- home visits in topics such as social benefits, coverage of insurance policies, social cases, both related to their relatives and/or work. The purpose is to strengthen the sense of belonging to the company.
During 2016, many activities were carried out such as workshops about the importance of happiness in different aspects of work, family and individual life, such as “Spiritual intelligence”, “Designing a Happier Life", "Don't Give Up: Manage Adversity", which have been organized with the support of specialized consultants.
There were also health campaigns such as: anti-stress massages, prevention of musculoskeletal, respiratory, gastrointestinal, ophthalmologic and cervical cancer diseases.
The most relevant integration activities include: Worker’s Day, Mother’s Day, Father's day, Halloween Party for Kids, Christmas for Kids, End of the Year Party, Births’ Contest, and, finally, the first solidarity volunteer work, Cold Wave Campaign, took place benefiting children from distant communities and Christmas Campaign for children of the Pediatric Area of the Regional Hospital of Cajamarca.
Youth Talent ProgramThis program aims to attract and train young graduated professionals or those enrolled in the last semester of several universities in the country, who have potential to be future leaders in Gold Fields La Cima and society, in general.
The program lasts one year, allowing participants to go through a learning process across the different areas of the company. As part of the program, each participant has a tutor that will accompany him/her throughout the year and design a project to be subsequently presented to the company’s leaders.
In 2016, the fifth Young Talent class began with the participation of ten participants.
Work EnvironmentThere was not a work environment survey in 2016, however initiatives to maintain the highest satisfaction ratings from our employees were developed. Work environment action plans of each area are a clear example, since results were analyzed with their corresponding leaders in workshops. Thanks to this, it was intended to reinforce the idea that the work environment goal is not only a duty of Human Resources unit but everyone’s. To monitor the execution of action plans, a work environment head was assigned by each management.
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Internal Communication
In 2016, we have developed various initiatives with the
aim to integrate and sustain communication channels
addressed to employees. Among them, are:
• It seeks to contribute to a cultural shift in the way people work in order to gain greater connection and agility through a simple, useful and accessible web portal (intranet) that allows:
• Communicate: News, institutional information and benefits.
• Integrate: Accesstoinformation,tools,strengtheningofrelations.
• Facilitate: Exchange of information, identification with the company, organizational alignment.
From January to December 2016, 85,012 sessions have been registered with an average income of visits of 7084 per month, 1771 per week and 233 per day, including weekends (Source: Google Analytics).
It is worth mentioning that the platform includes different areas to promote the interrelationship among employees, such as:
News Express
It is a section of briefing notes relating to the company, accompanied with photographs or videos galleries.
¡We Are Worth Gold!
Section where colleagues can nominate other colleagues to participate in the recognition program "We Are Worth Gold", which distinguishes publicly employees who live day to day Gold Fields values.
The Boutique
Space to buy and sell products.
Calendar of Events
Calendar of events for mass participation as celebrations, anniversaries, etc. In the same way, it includes dates of health campaigns or other event requiring the convening and participation of several sites employees.
I am Gold Fields Intranet
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This project established a communication cascading methodology from leaders to employees. It intends to establish processes to develop key messages, with the support of an external coach, allowing to define guidelines for internal communications under adequate form, environment and conditions. Hence, a guide of questions and answers is prepared, so the communication process is standardized according to the case. The company’s Balance Scorecard is an example of this communication methodology.
During 2016, the project was complemented with a new line of employees in the communication cascading methodology, called Niagara Spokespersons, who became strategic communication allies. Leaders and spokespersons were also trained in an external and internal workshop, respectively.
“On Board” Induction Program - Gold Route
We Are Gold Worth! Recognition Program
Its main objective is to reward Gold Fields La Cima employees who demonstrate maximum commitment to corporate values. Candidates may be nominated by their pairs, chiefs and even employees from other areas. During 2016, the nomination protocol was reviewed and updated to adjust the frequency and the effect of massive recognition.
Niagara Project
It is the process of induction and re-induction to Gold Fields, for which a special presentation of the approach to the company has been made, both for new and current employees.
Also, a welcome kit is handed, which includes a folder with information from different areas of the company and merchandising.
As of December 2016, more than 50% of employees were evaluated through this process by the end of year. The objective is to reach 100% of employees in 2017.
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Gold Fields TV
It aims to inform employees from the different sites through a closed circuit TV system, disseminating useful information permanently.
Suggestion boxes
Located in all sites, these boxes work as an open communication window between employees and the company. It is a useful channel to receive comments and ideas for improvement for all the areas. A digital version of this system is available in the Soy Gold Fields intranet.
Punto Cero Walls
They are communication spaces developed to promote collective reading in common spaces, and are aimed at areas with a significant amount of operative personnel who have little access to their email account.
Our Heroes Recognition Program
As part of Culture 1500, this recognition program highlights extraordinary conducts. All employees, including partner companies from all sites, may be nominated. The employee is recognized through a mass communication video. As of December 2016, five success cases were published.
Mass communication of the 4 Key Foundations of Gold Fields La Cima
The 4 Strategic Foundations of Gold Fields La Cima were presented: Image of Mining, Shared Purpose, Free Cash Flow and Culture 1500.
Launching of “We are America” Quarterly Internal Magazine
With a regional scope, “We are America” contains information about corporate news, social events, entertainment, and photos. It is part of the inclusive initiative Culture 1500. In December 2016, a second edition was published.
A perception survey on the magazine was conducted, showing the magazine was qualified as excellent by 57%, and that it reinforced the Culture 1500 program by 60% (102 respondents).
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Next steps
In 2017, we expect to continue supporting
the strategy to search the company’s
efficiency, not only to achieve operative
goals but follow the organization’s growth,
when required. Trainings led by instructing
employees will also continue since they
allowed an approach of leaders to employees
regardless of cost reduction when executing
programs. Alternatively, we expect to continue
working on identifying abilities to strengthen
individual competencies of each employee.
In relation to health and welfare, we will
support the organization of volunteer activities.
In- home visits will be improved in Cajamarca,
Hualgayoc, Trujillo, port of Salaverry and Lima.
Health preventive programs will also continue.
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7.2
Our Suppliers and Contractors [G4-12]
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Supplier and Contractor Management
In 2016, we still worked on initiatives to improve supplier and contractor management.
Hence, new tools were implemented under two approaches: to validate and verify
potential suppliers’ background, using a tool provided by our headquarters and a
locally developed tool; and for managing suppliers that already provide services.
Regarding the first approach, an Aquiles’ specialized platform was incorporated, including a portal with a data base where suppliers and contractors are directly verified in terms of experience, compliance of legal, labor, tax, risk profile requirements, etc. This database allows classifying suppliers by business activity, enabling the company to identify potential pre-qualified suppliers according to a homogeneous standard for bidding processes. It must be noted that this portal also includes other mining sector companies, allowing them to identify and access to suppliers who may meet specific requirements of the sector.
With regards to existing supplier management, in 2016, at internal level, there was a great progress in the evaluation of suppliers and contractors through online data systematization. So we could standardize, among other aspects, evaluation criteria, validate information directly with users, and facilitate reports to administer suppliers and contractors’ evolution. Consequently, internal users can include information of incidents, hence information beyond aspects related to quality and prices of contracted goods and/or services will be available.
This portal was initially used with 300 suppliers related to critical and/or usual aspects. This tool has incorporated specific requirements of Gold Fields La Cima; for instance, company’s code of conduct compliance, specific environmental and safety aspects to inform about suppliers. It also facilitated a standardized communication with suppliers.
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In regard to the constant search for efficiency and cost reduction, procurement
management allowed to identify opportunities to implement contracts and
framework agreements, where task concentration and service extended
duration result in saving important amounts in fees and logistic costs.
Therefore, important benefits were obtained in plant maintenance services,
grinding system, humid circuit, and goods provision, such as plant and
bombing spare parts, electric materials, hardware items, among others.
Besides, these initiatives concede investing more time in the company’s strategic issues and following great projects to have more efficient operative processes and cost reduction.
Therefore, in 2017, we expect to reinforce employment of local companies together with HR, Community Relations, and the company’s contractors. Training and development of local suppliers and contractors will continue to be shared value management model aspects to work, which primary focus is to meet the business requirements with a positive social impact of growth and profitability.
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Promotion of Local Employment and BusinessSince the beginning of its operations, Gold Fields La Cima has worked on providing ADI community residents and local companies with job opportunities, thereby creating relations of trust to achieve a positive social environment in the area.
Consequently, around 600 residents are contracted as non-qualified workforce per year, mainly for construction works (e.g. in the tailings dam). Hiring local companies as contractors is also encouraged. In both cases, we seek to maintain a criterion of equity in contracting processes so that every ADI community is benefited. It must be noted that the company’s Community Relations area has a database to monitor the type of works performed by local companies. Before any specific requirement, companies that may be part of the bidding process are easily identified. In average, 85 local companies are contracted during the year.
Another important point to highlight is that, in order to obtain a better preparation of local personnel, a technical training was organized in the city of Lima. Ergo, in 2016, a program for heavy machinery operators was organized in coordination with Tecsup, which was 100% financed by Gold Fields La Cima. The course lasted 20 days, and it included transport and accommodation of participants.
Total number of suppliers, contractors and sub- contractors(1)
Number of local suppliers and contractors(2)
Percentage of local suppliers and contractors [G4-EC9]
Amount of Purchases from Area of Direct Influence
Amount of Purchases from other areas of influence (Area of Indirect Influence and Trujillo)
1,014
21%
US$25.1 million
US$14.2 million
213
1,028
19%
US$24.5 million
US$17.5 million
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2 0 1 62 0 1 5Indexes
2016 Management Indexes
(1) Supplier and/or contractor and/or subcontractors: company that provides a service or good to Gold Fields La Cima.
(2) Supplier, contractor and/or subcontractor: companies that belong to the Area of Direct Influence (ADI), which include Coymolache Alto y Bajo, El Tingo, Hualgayoc, Cuadratura and Pilancones, as well as Area of Indirect Influence (AII) including Bambamarca, Cajamarca and Salaverry. Trujillo is also included.
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7.3
Environmental Management
In relation to regulatory changes, it must be pointed out that the National Service for Environmental Certification for Sustainable Investments (SENACE) of the Ministry of Environment started to operate in 2016. Therefore, the sixth Supporting Technical Report of Cerro Corona was submitted to such entity and approved in November. This supporting technical report included several operative improvements in Cerro Corona. Likewise, the process for the eighth Environmental Impact Assessment amendment of Cerro Corona was started with SENACE, which purpose is to extend useful mine life.
On the other hand, other environmental management documents were submitted to the Ministry of Energy and Mining (MEM) as per the regulations governing the environmental quality standards of soils. Likewise, MEM was contacted to initiate the update of the Cerro Corona Integrated Plan to adapt to Allowable Maximum Limits for effluents and Environmental Quality Standards for Water in compliance with the regulations in force.
Regarding actions before the Water National Authority, in 2016, the authorization to discharge for the flocculation-sedimentation system into Mesa de Plata stream was renewed. Furthermore, Cerro Corona team takes part of the water participative monitoring led by the Water National Authority. It should be mentioned that after accepting its invitation, the environmental management team participated in two events to disseminate the company’s good practices in 2016.
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A major achievement was to maintain of the Register
of Good Environmental Practices of the Agency for
Environmental Assessment and Enforcement (OEFA)
of the company nationwide, as a consequence of
the good results obtained in the regular supervisions
carried out by this entity in Cerro Corona, where
no findings were encountered. This achievement
is based on the reinforcement of the procedures
Cerro Corona has implemented for the environmental
supervision on site, which has allowed maintaining
the vision of prevention and the adequate
management of risks in environmental issues.
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Climate Change Vulnerability Study
In line with our headquarters, each operation of
the corporation must make a Climate Change Risk
Assessment. In this manner, it is expected relevant
analysis is performed in the operations and surrounding
communities as a consequence of changeable
climate conditions. For this purpose, we identified
the need to contract a specialized consultant firm to
conduct a study for adequate risks assessment.
Based on the findings resulting from the study, a water supply low risk was established for communities and Cerro Corona’s operations. Yet, works will continue to implement initiatives that allow reducing water consumption and/or storing water, especially in rainfall season.
This situation is not the same in the transport route of concentrate and materials, where there might be a moderate risk, since due to increasing rainfalls, landslides can occur affecting its use. This situation already happened in 2016, but it could repeat more frequently in a near future. Before this, we started to prepare an action plan, which includes specific guidelines to be followed by the company on this issue.
For conducting this study, we employed a predictive tool prepared by the International Council of Mining and Metals (ICMM), named MiCA (Mining Climate Assessment data tool). This tool uses several variables and mathematical models to predict weather conditions.
Gold Fields La Cima is one of the first mining companies that employed this tool, which provides fluctuation prediction data of future weather variables, thus enabling an evaluation of climate change impacts on the
business, operations and value chain.
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Integrated Environmental Protection StrategyCompany’s strategy for environmental management is based on the Environmental Management System’s continuous improvement, incorporating specific policies and procedures to minimize and adequately manage potential environmental impacts of its activities. This means we seek to go beyond legal obligations. In alignment to
our headquarters, the following aspects were considered in 2016:
Strategic Goals• Evaluate and comply with the industry’s best practices
regarding environmental management.
• Implement, maintain and integrate internationally recognized environmental management systems that ensure continuous improvement of environmental performance and pollution prevention.
• Meet applicable legal requirements related to environmental aspects.
• Make efficient use of resources and manage waste flows with responsibility.
• Contribute to preserving biodiversity and apply integrated approaches regarding mine closure planning and land use after completing mining operations.
• Establish adequate level of awareness and training among employees who are in charge of environmental issues.
Communication and trust: Environmental
management results
must be used to
strengthen trust and
relations between
Gold Fields La Cima
and its stakeholders.
Water: Ensure good
management of
water resources
in Cerro Corona
development,
water availability
for operations and
communities in the
area of influence.
Energy and carbon: Optimize energy
consumption and
reduce greenhouse
gas emissions.
Mine closure: Continue to
optimize mine
closure plans
applying best
practices
and available
technologies.
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Efficient Water Management
This situation is evidenced through the good tailings dam management, water balance results –especially controlled by the water treatment plant of the tailings dam- and above all, in work synergies between different areas.
Another aspect to highlight includes the use of new tools with new water balance mathematical models that allow to issue reports and make better decisions about processes, for example, discharges and water control.
Compared to 2016, it must be noted that we strengthened
and integrated employees in terms of procedures to
follow; for example, efficiency, risk prevention and safety
culture has been internalized, among other aspects.
1 2
Rio Tingo
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Innovation did not go unnoticed in the search of a more efficient water use in the operations, as it is the case of the water treatment plant to treat tailings dam water through neutralization using CO
2. Gold Fields La Cima was
one of the first companies to employ it. Also state-of-the-art technology is used for turning on and shutting down water production wells remotely.
Another clear example of innovation and permanent investigation of best practices and technologies was the process to identify the most adequate technology to treat tailings dam water, as additional process, in compliance with new environmental quality standards applicable to water (ECAS). Technologies defined for the economic evaluation’s final stage are filtration (osmosis) and evaporation.
On the other hand, increased pit depth requires a better pumping system planning –since limits may not be exceeded with current equipment- and gives us an opportunity to review new and more efficient equipment for pumping and planning intermediate wells to continue using existing resources.
4 53
Additionally, during 2016, we highlight the following activities:
We are still delivering a liter per second (l/s) of water for human intake, from the well supplying Cerro Corona’s camp to continue supporting drinking water deficit suffered by the city of Hualgayoc.
With a capacity of up to 5 l/s, we continued with water compensation to communities in Coymolache by treating water from the pit through ultrafiltration plant and reserve osmosis. We also maintained compensation to El Tingo River with a capacity of 10 l/s in dry season. It must be noted that compensation to the river is made with water from the treatment plant by CO
2 neutralization.
Waters from sanitary facilities and dining rooms located in the operation continued being treated in three compact sludge treatment plants activated in Cerro Corona. Then, water is discharged in full to Cerro Corona’s tailings deposit.
6 7 8
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Innovation did not go unnoticed in the search of a more efficient
water use in the operations, as it is the case of the water treatment
plant to treat tailings dam water through neutralization using
CO2. Gold Fields La Cima was one of the first companies to
employ it. Also state-of-the-art technology is used for turning
on and shutting down water production wells remotely.
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Energy and CarbonIn alignment with our headquarters, Gold Fields La Cima’s business model accepts climate change is a fact requiring global and local actions. Therefore, from the beginning of our operations, we committed to design and implement initiatives that enable reduced energy consumption and improved equipment energy efficiency, trying to use technologies with lower greenhouse gas emissions whenever feasible. All this was settled as part of the cost reduction and efficiency strategy executed by the company.
In this context, an achievement to highlight in
2016 is the elaboration of the Energy
Management Plan, which guidelines were defined by our
headquarters. To such end, it was required to conduct energy
efficiency studies that allowed defining lines of work for electrical
energy consumption. Hence, regarding electrical energy consumption,
we identified the plant’s design, equipment’s distribution in the plant
and the own equipment’s performance were adequate as an efficient
use of energy was registered. In respect to diesel consumption,
initiatives will be implemented to reduce its use during 2017.
Initiatives to be implemented include TPx fuel additive use, which improves diesel combustion, consequently equipment’s performance; and the change of conventional lighting towers for led lighting towers. According to the analysis, these initiatives are estimated to allow reducing diesel consumption in 5%, representing some 150 thousand gallons less per year.
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Monitoring and Environmental Control ProgramsDuring 2016, we continued executing programs to prevent, mitigate and control environmental impacts that could be caused by Cerro Corona operations. These programs allow complying with applicable environmental legislation and the commitments assumed in the Environmental Impact Assessment and the guidelines of our headquarters. The general scope of the main monitoring and environmental control programs are detailed below:
Monitoring and Control of Air Quality
In compliance with current legislation, this program aims to reduce particulate material and gas emissions (CO, CO
2, NO
X, H
2S,
SOX), taking control measures for
not affecting air quality according to regulatory commitments. During 2016, environmental standards for air quality, set forth by national regulations, were complied. Air quality is monitored from different stations and its results are presented to the ADI authorities and communities.
Noise and Vibration Control and Monitoring
This program seeks to reduce potential noise or vibration impacts caused by Cerro Corona operations. Measures taken include to control the equipment and heavy machinery mechanical conditions, restrict night schedules for blasting, control speed limits in the traffic and loading, disposal and discharge of materials, among others.
It must be noted there is a preventive monitoring (technical review) of vehicles to control not only emissions but noise and vibration. There is additionally environmental noise and vibration monitoring in Cerro Corona area of influence in many stages. Nevertheless, it must be highlighted there are exogenous factors, such as traffic of external vehicles and/or other activities, which are not controlled by the company, thus environmental noise levels might be affected compared to the respective environmental quality standards.
Erosion and Sediment Control
This program is carried out in order to minimize erosion processes and reduce sediment delivery to water bodies through runoff, which might affect the stability of slopes and damage civil works. Consequently, it also supports useful life of mine structures. To such end, the company manages runoff by implementing drainage systems (canals and water diversion), constructs permeable fabric barriers, stabilize slopes, containment walls, levels slopes, and employs settling tanks, among others.
These measures contribute to minimizing potential impact in water quality due to sediment delivery to water bodies located in the watershed of Hualgayoc and El Tingo River, especially in rainy seasons.
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Monitoring and Management of Biodiversity [G4-EN11]
As every year, biotic monitoring took place, one during wet season and another during dry seasons on the amount and type of species in Cerro Corona area of influence, with the purpose of taking necessary actions when any deviation is detected that may alter diversity of biological species in the area. Monitoring was made in Cerro Corona’s area of influence by a specialized company, which results are reported to the Ministry of Energy and Mining. [G4- MM2].
Additionally, during 2016 the endemic flora and fauna management program continued in conservation categories according to national and international rules (CITES, IUCN). Evaluations made in areas, where mining components will be deposited, identified the following species:
As a result of this, necessary relocation and/or rescue activities aimed to the subsistence of these species were conducted.
Pristimantis simonsii
Stenocercus stigmosus*
Petracola ventrimaculatus*
Valeriana cumbemayensis
1
2
3
1
D.S. 004-2014-MINAGRI
D.S. 004-2014-MINAGRI
D.S. 004-2014-MINAGRI
D.S. 043-2006-AG
Conservation Category
Conservation Category
Flora Species
Flora Species
No
No
(*) Endemic species not included in conservation categories.
Top Soil Protection (organic soil)
It consists of removing organic soil from ground surface before performing any construction work. The removed material is stored then in deposits designed and built for this purpose, so they can be used in the closure phase. Additionally, when the reservoir reaches its maximum storage capacity, a vegetal cover is placed to protect it from rain and wind erosion.
The program is applied in all Cerro Corona mining unit; thus, any activity involving earth moving and organic soil handling have to comply with it, such as: mine operations, tailings dam construction, among others.
For 2016, it is important to highlight that the stored material of Deposit No 9 was moved to Deposit N° 2 taking into consideration engineering measures to ensure physical stability of Deposit No 2 to prevent landslides and organic soil loss, centralize the storage, optimize available space use and lower transportation costs. The area where the organic soil No 9 was deposited will be used to store waste rock according to the amendments approved by the competent authority.
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Solid Waste Management
In 2016, a practical training program was conducted to raise awareness of all Cerro Corona employees about proper waste separation according to their origin. It is noted that organic waste can be used to prepare compost which will be later used in revegetation activities as well as to improve organic soil.
Additionally, environmental management training programs were conducted as required by law. These programs include employees, contractors and community members.
Geochemical and Hydrogeological Tests
Geochemical tests allow a permanent research from the beginning of the construction phase, to optimize acid rock drainage prevention and, in the closure phase, have the best choice of chemical stability for all Cerro Corona mining unit’s components. Alternatively, hydrogeological studies allow us have information to implement forecast measures in groundwater management.
It is important to highlight that geochemical test results are used for geochemical modeling, supporting the process of decision-making directly in view of different conditions, for example, for environmental management programs to follow during closure phase.
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Program of Awareness and Preparedness
for Emergencies at Local Level (APELL)
The program was launched in 2010, under the guidelines
established by the United Nations about safety in hazardous
materials transportation (APELL). It aims to develop capabilities
in response to emergencies caused by transportation of
hazardous materials on the route; in addition, including
situations of natural or technological disasters.
Main activities performed in 2016 are detailed below:A continuacion,
se detallan las principales actividades realizadas en el 2016:
To achieve this, first risk management terms are conceptualized, then with people participation, different hazards are identified and estimated where communities live. This process was conducted using dynamic activities to raise awareness in participants in order to ensure hazards will be totally identified.
Raise awareness of authorities and population about the hazards and risks they are vulnerable to, giving emphasis to the importance of risk management in their communities
1
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This campaign consists of a dynamic called “Segurilandia” (safetyland), which allowed to learn and recognize recommendations and warnings about traffic education in a funny way. This dynamic helps children learn through play.
It intends to strengthen all capacities acquired by the Emergency Response Community Brigades, which are constituted by residents committed to voluntarily receive training.
This activity aims to gain massive participation so that people adequately respond to a real emergency. It is a way of measuring performance and organization of brigades and Civil Defense Platform’s members, who were trained throughout the program.
A previous diagnosis is made in each community to know their social, economic, environmental and political reality, among other aspects, to define the best work methodology for the APELL software implementation.
It consists of projecting a movie containing messages about the importance of environmental care. As a result, there is a great number of attendees, encouraging a moment of sharing with family for learning.
Workshops aim to activate a civil defense platform immediately after an emergency or disaster to know the damage suffered by the community. In this manner, participating communities are able to face contingencies properly.
Train students attending schools from each community to prevent car accidents
Form, train, recognize and equip Emergency Response Community Brigades in the civil defense platform in each community
Conduct a general evacuation and emergency drill in each community
Make a participatory risk diagnosis for communities
Promote the importance of environmental care through a CinemAPELL massive campaign
Train and activate civil defense platform in each community
In 2016, we continued performing maintenance and strengthening activities in the areas of Cobro Negro, Quebrada Honda, Choten, San Juan and La Monica. 1208 people participated.
2
5
3
6
4
7
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Environmental Management of
Salaverry Port WarehouseEnvironmental protection and creating a positive social impact during concentrate transportation from Cerro Corona to Salaverry port for storage and shipment are key aspect for Gold Fields La Cima. For the development of activities there is an Environmental Impact Assessment Amendment (MEIA) for storage, transport and shipment of mineral at the Salaverry port, duly approved by the Ministry of Energy and Mines.
The MEIA identified and evaluated activities that could have a potential environmental and social impact, resulting in a minimal negative relevance. It must be pointed out that storage and shipment activities are carried out according to the highest environmental standards. For example, there is a shiploader for concrete shipment with rubber curtains and dust control equipment, whereupon the dispersion of particulate matter to the atmosphere is significantly minimized. Likewise, the concentrate is stored within closed buildings and the warehouse perimeter has mesh windbreak. Both measures aim to avoid outflow
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Mine Closure Plan
Gold Fields La Cima has a Mine Closure Plan (PCM) and four PCM updates duly approved by the Ministry of
Energy and Mines.
Correspondingly, in compliance with the environmental applicable legislation
and the approved Mine Closure Plan, the company is implementing established
progressive closure activities. Also, annually, the company constitutes financial
guarantees through guarantee letters to the name of the Ministry of Energy and
Mines, with the purpose of covering Cerro Corona’s final closure cost. Additionally,
the best closure alternatives are explored and evaluated to optimize closure and
post closure criteria and their costs, especially with regards to water management.
Management of Environmental LiabilitiesIn 2006, Gold Fields La Cima, as new holder of the mining rights transferred by Sociedad Minera Corona S.A., undertook the remediation of seven environmental liabilities located in the area of Cerro Corona. Assumed liabilities are: Past melting concentrator plant Bella Union, La Jalca tailing, tailings 1 and 2, Bella Union camp, offices and warehouses, fuel tanks and its facilities, and power house.
The company has included these liabilities in its Mine Closure Plan, approved by MINEM. Since the start of operations, it implemented measures with the purpose of avoiding negative impact to the environment employing best practices and/or available technologies.
The main implemented activities include the three assumed tailings; they were covered using adequate hydraulic containment mechanisms with Cerro Corona’s tailings dam. The company has also dismantled and cleaned the camp, offices and other facilities with proper final waste disposal.
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2016 Environmental Management Indexes
(1) It includes explosives, caustic soda and lime.
(2) For 2016, it includes gasoline of the company and contractors.
(3) It includes the consumption of diesel, LPG and gasoline. The calculation is done through the use of total consumption to
(4) It includes the consumption of electricity. The calculation is done through the use of total consumption to which an emission factor is applied to which an emission factor is applied.
(5) Effluents under consideration include treated surface runoff and excessive treated water stored in the tailings dam. In 2016 there was less rainfall than in 2015 (34% at least, approximately, according to Cerro Corona's weather station records). This has directly influenced on the total amount of treated weater to pour since pouring is mainly comprised of runoff; while in the case of tailings deposit, rainwater stored in the deposit impacts the amont of excess water to discharge.
(6) Gold Fields La Cima defines 5 categories of spill: being 1 the lowest category and 5 the highest.
(7) It includes activities of pollution prevention, environmental impact studies, audits, monitoring activities, geophysical and hydrogeological studies. There is a variation compared to last year because construction expenses of tailings dam and hydraulic containment measures are not included as stated by our headquarters.
Environmental IndexesGRI Code 2 0 1 62 0 1 5
Area: Materials
Area: Energy
Area: Biodiversity
Area: Emissions
Area: Effluents and waste
Area: Regulatory Compliance
Area: General
24,555 24,284Materials by weight: (in metric t-tons)1G4-EN1
2,632 275.57Water discharge by quality and destination - total poured amount (Ml)5G4-EN22
21,656,977 2,317,154Breakdown of costs and environmental investment (in US $)7G4-EN31
0 2Number and volume of significant spills (in liters)6G4-EN24
Total weight of waste by type and weight (in t) and method of treatmentG4-EN23
External energy consumption: electricity consumption of operations and administrative offices - Non renewable sourceG4-EN4
13,455 12,713Diesel (in klt)
102 89Liquefied petroleum gas (in kg)
5 4Liquefied petroleum gas (in TJ )
Total water catchment according to the source - (in Ml) 4,677 2,568
145,361 153,379In MWh
6,564,763 153,379Tailings to dam
991 459Recycled metals
28 41Recycled paper and cardboard
0.03 0.31Gasoline (in TJ)
523 552In Terajoules
5,220,430 552Waste
59 75Recycled plastic
1,104 979Disposal in landfill
484 458Diesel (in TJ)
Internal energy consumption: by type of source and volumeG4-EN3
0.80 9.32Gasoline (in klt)2
Area: WaterG4-EN8
Own operational facilities, which are adjacent, contained, or located in protected and non-protected areas by great diversity valueG4-EN11 Pag. 102
Direct greenhouse gas emissions by weight (in metric t-tons) (scope 1)3G4-EN15 36,309 35,023
Indirect greenhouse gas emissions by weight (in metric t-tons) (scope 1)4G4-EN16 41,573 45,554
Monetary value for significant fines and number of sanctions due to environmental legislation non-compliance.G4-EN29 - -
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Sectorial GRI Indexes for Mining
DescriptionGRI 2 0 1 62 0 1 5
Not registered Not registeredMM4 Number of strikes and lockouts that exceed a week.
Does not apply Does not applyMM9 Locations where residents resettlement has been conducted
Not registered Not registeredMM6 Number and description of significant disputes related to land and rights use of indigenous and local communities and complaint mechanisms to resolve conflicts.
Does not apply Does not applyMM5 Operations in or adjacent to the territories of indigenous people (*) and number and percentage of operations with agreements with indigenous communities.
Cerro Corona has a Mine Closure Plan and four updates duly approved by the competent authority.
MM10 Number and percentage of operations with closure plans
We have a Monitoring and Management of Complaints Procedure, which is applied as part of our integrated management system for all employees and communities in the area of indirect influence.
MM7 Indicate how the complaint mechanisms were used to resolve conflicts related to land-use and the custom rights of indigenous and local communities as well as their results.
(*) The International Finance Corporation defines as indigenous communities those social groups with different identities of the dominant groups. They are often found in marginalized and vulnerable population segments. The economic, social and legal status of these people often limits their ability to participate of progress and enjoy the benefits. In the areas of direct and indirect influence of La Cima there are no indigenous communities.
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Environmental licenses and permits
In 2016 the eighth amendment of Cerro Corona’s
Environmental Impact Assessment (EIA), including
new components and updates that will help us
continue with our operations, was submitted.
Annex No 2 include all licenses and permits
obtained by Gold Fields La Cima.
Internal Audits
As every year, the company’s environmental
management goes through two internal audits.
These audits were conducted by IF Consulting
S.A.C. in March 2016, and Seratec Hurtado
E.I.R.L. in July 2016. In both cases, the company
has successfully passed the process.
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Next Steps
In 2017, we expect the Integrated Plan is
approved by the competent authority in
order to adapt to new environmental quality
standards for water (ECAs). Furthermore,
engineering will be designed to build the
water treatment plant, which estimated
construction period is two years. Likewise,
the investment and technology economic
evaluation to use therein is in the final stage.
Additionally, we will continue working
on optimizing processes and identifying
initiatives for cost reduction, ensuring strict
compliance with environmental standards.
On the other hand, the company will continue
to carry out campaigns with its employees
to internalize an environmental culture to
reduce resources, especially energy, separate
solid waste properly, among others, since
we recognize it is a permanent work to do.
Finally, it must be noted that our main challenge
will continue to be the design of the Mine
Closure Plan, which aims to ensure long term
physical and chemical stability of each Cerro
Corona component. Hence, we intend to use
technical criteria permanently to ensure all areas
and components are restored, maintaining
their physical and chemical properties stable
in their environment, minimizing negative
socioeconomic impacts in the communities.
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7.4
Social Management
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Social Responsibility Management Approach
Shared Value Strategy:
Improve company’s competitiveness and, at the same time, improve economic and social conditions of the communities in which Gold Fields La Cima operates.
The Shared Value Strategy is worked taking into account the following objectives:
Execute projects maintaining permanent dialogue with local
authorities and leaders, by providing technical and operative support and, especially, promoting public
and private collaboration with great respect for benefited communities.
Formulate investment, social and productive development projects to take advantage of identified
opportunities, aiming to benefit all stakeholders according to common
goals and work lines.
Identify opportunities to create common benefits for the
communities and the company, pursuing a “win-win” strategy.
In 2016 we had a significant accomplishment as we met our commitment to provide Pilancones community with a drinking water system for human consumption. This work is an important step towards our main goal: supply water service to all our ADI.
In relation to 2016, it should be highlighted that a positive
relation was developed with all our ADI and AII communities.
Consequently, our operations were not interrupted due to
social conflicts. This could not be possible without close work
with communities, with each community’s individual event
organization to inform the company’s work, and the delivery of
specific information to each of them.
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Foreign Corrupt Practices Act (FCPA) Compliance
Since Gold Fields Ltd.’s shares are listed on the New York Stock
Exchange, the company adheres to the Foreign Corrupt Practices
Act (FCPA)11. This meant, for instance, the inclusion of a specific
clause in every agreement with the communities for carrying
out any Gold Fields La Cima social investment projects and/
or donations. Besides, payments shall not be made in cash, but
directly to suppliers involved in the projects and/or donations.
As a general matter, the FCPA provisions require to maintain books
and records properly, prohibit sponsorship or political favoritism,
prevent bribery of government officers and define measures to
manage accurate registers and adequate internal controls.
11 Foreign Corrupt Practices Act (FCPA) is the main anticorruption act issued in the United States of America, which is aimed at preventing bribery of non US government officers. It was approved in 1977 and modified in 1998
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Said results confirm that the social
management strategy and action fields
the company is currently working are
correct, for example, participative
monitoring programs of water quality
and quantity, construction of drinking
water systems and strengthening
of local suppliers “Successful
Entrepreneurs” program, among others.
In relation to Gold Fields La Cima’s main contributions, we have education improvement, local employment generation and agriculture optimization program development. On this matter, we have an opportunity to continue giving support to implement irrigation channels, mainly.
Consequently, a lot of work must be done to create a new vision of modern mining, and Gold Fields La Cima has the goal of leading this process. Use of mass media will be key to change perceptions. 82% respondents consider information should be through the radio.
Said results also show that 52% respondents are strongly concerned about the impact mining companies may cause on the environment and the effect they may have on water quality and availability for communities: 83% agree water is the most important resource. Situation can be worse, considering that 62% believe modern mining pollutes more than artisan mining. Pursuant to this survey, mining holds fourth place in a list of relevance as economic activity in the zone, below farming, stockbreeding and trading. Additionally, it should be highlighted that 63% identify the District Municipality of Hualgayoc and Central Government as the entities in charge of resolving their concerns.
For this study, surveys were carried out with community residents of the city of Hualgayoc, El Tingo, Coymolache (Alto and Bajo), Cuadratura and Pilancones, the city of Bambamarca and some communities from indirect area of influence.
Below, we detail the scopes of the activities undertaken during 2016:
2016 Perception Study
With the objective of knowing the expectations and needs of our ADI and AII communities,
every two years a perception study is carried out, which results identified that community’s
major concerns are environmental pollution, drinking water shortage, and unemployment.
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Line No 1:
Strategic Management
The goal is to preserve the communities’ support
as well as the social and political harmony in the
surroundings of Cerro Corona Operations. To this
end, every year we implement initiatives that allow
Gold Fields be recognized as a close, proactive
mining company that generates trust and has an
active role in the economic development of its
influence area.
For this purpose, during 2016 we continued
working on six specific areas [G4-SO1]:
Improve efficient use of natural resources:
Since climate change negative effects are becoming a reality, the need of managing water resources technically becomes more and more important, not only for potable water supply for human consumption but for agriculture and livestock
The company then focused on a plan for 2014-2017 period, looking for improving water and sanitation systems in the city of Hualgayoc and construction of hydraulic works: water reservoirs, family reservoirs, forestation works, among others.
In 2016, planned works were executed, so drinking water systems were completed through fountains in Coymolache Alto and Pilancones as well as phase II of the drinking water system for Cuadratura community.
Likewise, by executing “Adapting together to climate change” project, Gold Fields develops, with the participation of residents, climate change adaptation practices or measures, such as water harvesting projects, construction of reservoirs, technical sprinkler irrigation systems, infiltration trenches. It also strengthens water governability with the Climate Change District Plan, currently under validation, as well as the establishment of two Climate Change Adaptation Committees (CODACC) in Tingo-Maygasbamba and Hualgayoc-Arascorgue watersheds, having a Watershed Management Plans (MIC).
1
Line No 1:
Strategic Management
The goal is to preserve the communities’ support
as well as the social and political harmony in the
surroundings of Cerro Corona Operations. To this
end, every year we implement initiatives that allow
Gold Fields be recognized as a close, proactive
mining company that generates trust and has an
active role in the economic development of its
influence area.
For this purpose, during 2016 we continued
working on six specific areas [G4-SO1]:
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Technical training for young people
This program grants scholarships for technical or college careers, and training for occupations with high employment demand in Cerro Corona area of influence. Scholarship are awarded to the best students in their last high school year from the district of Hualgayoc –class first and second places and/or students with outstanding performance. To date, 43 students have been awarded with these scholarships; i.e., an average of 10 scholarships per year.
Development of competitive local suppliers
This program is developed by the Swiss Foundation for Technical Development Cooperation (Swisscontact). It was addressed to suppliers of heavy machinery, light transportation, general services, food and lime from the areas of direct influence (Hualgayoc, Coymolache, El Tingo and Pilancones) and indirect influence (Bambamarca), with the purpose of improving their competitiveness.
A contract including these companies’ participation was subscribed in July 2014 and valid for 24 months. The results and milestones defined in its design were achieved, increased sales and profits around 58% and 61%, respectively, was remarkable as well as the generation of greater business opportunities with two new clients in average per company.
The program was executed considering six stages: i) awareness raising campaign and invitation to tender; ii) preparation of diagnosis and business improvement plans; iii) group training; iv) customized technical assistance; v) incorporation to new markets; vi) Local Supplier Management System design and implementation.
In the awareness raising campaign and invitation to tender, 74 companies enrolled. This process was carried out through visits to each community and a public launch event to encourage motivation and implement improvements in the companies.
When establishing diagnosis and business improvement plans, 64 companies participated. Information about their situation and their main improvement aspects to be implemented were collected.
In group trainings, 32 workshops were organized (28 in Cajamarca and 4 in Hualgayoc) with the participation of around 31 companies. Training topics were aligned to the improvement plan implementation.
Regarding customized technical assistance, 46 companies signed an advisory agreement to implement their improvement plans based on business and management tools. It should be mentioned that 61% (26) of the companies, which received advisory, implemented more than 70% of their improvement plans.
In the incorporation to new markets, 37% of companies (22) identified new business opportunities and 33% (20) signed contracts with new markets, different from Gold Fields La Cima and its contractors.
Finally, as to the Local Supplier Management System (SIGEPROL) design and implementation, its preliminary version is available, enabling to evaluate and monitor Gold Fields La Cima local supplier companies’ performance. As a result, we designed a tool to directly support the supplier evaluation process through an online data processing system, allowing users to validate data, thereby facilitating reports for supplier performance administration purposes.
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Local economic development
It promotes traditional activities of the area and cost-effective production chains (milk, cheese, quinoa, smaller animals, etc.). Training is also delivered to the Local Government to improve resources management.
It must be pointed out that cattle-breeding activities in the area still requires hard work, through projects relating to improved pastures, improved milk production chain and marketing of dairy products. In spite of this, for 2008-2016 period, there was a milk production increase in the intervened communities and the following results were obtained:
4
Pilancones
El Tingo
Coymolache
Coymolache Alto
Cuadratura
7.20
7.92
7.40
6.34
6.90
11.26
11.92
10.29
10.30
10.55
2016 Global Productivity
2008 Global Productivity
Community
Artisanal textile is another promoted activity employing callhua technique in the area. Textile weavers were trained during three years and they are expected to increase their family budgets with the sale of their works. For 2017, we plan to install a store for them to sale their products.
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Early Childhood Development
Through the “For Children of Hualgayoc” program, Gold Fields contributes to reducing child malnutrition and anemia in children younger than five, and improving early childhood comprehensive development in the district.
This program is developed with Caritas del Peru NGO, and it benefited 730 mothers, 77 pregnant women and 883 children, 451 of who are younger than 3 years old.
Every year, results are evaluated to identify child malnutrition reduction in 28 localities and 45 sectors of the district of Hualgayoc. Thus, we obtained a reduction from 74% to 31% of 3-year-old children with anemia. Moreover, we expect to reduce this rate to 20%. Children, who were treated, improved their nutritional condition, but there is still 38%, mostly with a low anemia level.
Main results obtained during 2014-2016 period are detailed as follows:
Chronic malnutrition reduction
Anemia reduction
50%
74%
41%
53%
38%
31%
Initial Level (2013)
Goal (2016)
Achieved(2016)
Goals
Malnutrition and Anemia in Children younger than 5 Years assisted by the Project
Source: Caritas del Peru.
It must be noted that as part of this program, the following activities were performed:
• Training and accompaniment to 45 community teachers regarding nutrition.
• Workshops to teach how to prepare nutritional food for pregnant women and children according to their age (214 participants in average).
• Visits to families, house-to-house, to provide families with information about care, attention and feeding of their children (743 visits).
• Training to families about implementing gardens to produce food for their consumption.
• Implementation of family gardens with vegetables (510 garden).
• Maintenance of improved stoves (510 stoves) and advisory regarding healthy home management.
• Inauguration of the First Center for Promotion and Community Surveillance of Integrated Care of Women and Children in Apan Alto Community.
• Promotion of the constitution and working of the Inter-institutional Committee for the Education and Nutrition of Children in the district of Hualgayoc, with the participation of the Health Sector, local government and other social programs of the State, such as Cuna Mas, Juntos, Qali Warma.
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It should be highlighted we helped local government of Hualgayoc to include information and priorities relating to climate change adaptation in its local policies. In 2016, residents from two micro-basins already implemented measures, thereby improving water safety in the district of Hualgayoc. In this way, we helped authorities, municipal officers, technicians and residents from the district of Cajamarca to improve their abilities to design public investment projects relating to water resources conservation.Activities developed by the program for the participative formulation of management instruments for climate change adaptation are:
• Climate change vulnerability
• Climate tendencies (temperature and rainfall)
• Micro-basin water balance
Conducting Studies
• Management of El Tingo, Maygasbamba and Hualgayoc basins
• Climate Change Adaptation District Plan
Preparing Plans
• Agreed territory environmental management through the Municipal Environmental Commission
• Implementation of Climate change adaptation projects
Establishing Policies
Social Infrastructure
It seeks to build works that improve communities living conditions in the areas of direct (ADI) and indirect (AII) influence of the company. If there is no proper management of resources, infrastructure is not sufficient.
“Adapting Together” Program
In view of climate condition extreme variations, this program aims to support governability process for public policy development regarding climate change adaptation. This will involve water resource management, including irrigation capacity development and adequate infrastructure construction: irrigation systems based on efficient water use and its increasing availability through water use techniques. Development of water harvesting water techniques and reforestation activities are included.
General goals of the program:
• Improving local skills in environmental governability for climate change adaptation in the city of Hualgayoc.
• Promoting an adequate water resource management in the city of Hualgayoc.
The program is executed with the support of Lutheran World Relief NGO, USAID Peru and Cedepas Norte. We worked with the District Municipality of Hualgayoc and irrigation committees in order to assist in reducing conflicts related to water use.
The program benefits 16,849 residents from five micro-basins of Maygasbamba (El Tingo) and Arascorgue (Hualgayoc) community.
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In the framework of the “Adapting Together” program, 8 irrigation systems including construction of a reservoir and sprinkler irrigation system were implemented.
Installed Irrigation Systems
By implementing these water harvesting works, beneficiary families have irrigation water available in dry seasons, ensuring fodder for dairy cattle and, in other cases, production of local food to guarantee food safety.
Water harvesting works are a key part of water storage strategy, allowing to extend irrigated areas. In this process, permanent recharges were made for each system based on irrigation water use, so 74,652 m3 of water was stored and used on pastures and temporary crops managed by beneficiary families.
Alternatively, water harvesting also complements with other works, such as the infiltration trenches, slow-formation terraces, hedges, as well as some mechanisms to facilitate aquifer recharge.
Moran Alto
Moran Alto
Apan Alto
Apan Alto
Coymolache
Cuadratura
Muya
Ojos Corral
Total
Las Cuevas
Tunarangra
Don Pedrito
La Calera
La Paccha
Pascal Munoz
Cerro Azul
Querorco
8
7
5
7
8
5
37
5
82
12.56
4.84
2.58
5.00
6.08
2.20
13.00
2.00
48.26
1,037.96
698.02
76.08
346.81
760.59
1,000.05
1,000.00
300.00
5,219.51
Number of benefited families
Irrigated area (ha)
Reservoir Volume (m3)
Name of the community
Work name
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Line No 2:
Social Viability
Its goal is to consolidate the community-company
relationship to ensure Cerro Corona’s operation
development and promote a participatory
monitoring of communities and a greater
awareness in the valuation of natural resources.
In general terms, both lines of Strategic
Management and Social Viability are looking to
consolidate the community- company liaison,
whereas developing four concrete actions:
1. Ensure operational alignment of the project
with the shared value corporate strategy.
2. Handle and manage the impacts
generated by Cerro Corona.
3. Strengthen the human capital of
the Corporate Affairs Area.
4. Build trust among the population
based on verifiable objectives and
through a continued dialogue.
To achieve this goal, during 2016 the
following initiatives were developed:
Multi Sectorial Committee
Technical reports carried out have confirmed that Gold Fields La Cima has no liability in the structural damages of the houses in the district of Hualgayoc, as stated by OSINERGMIN, INDECI, and the Prosecutor’s Office for Crime Prevention of Cajamarca. These reports determined that the main factors causing structural damage are wetlands where these houses were built, as well as the lack of urban planning parameters and professional technical supervision during the construction of the same.
However, Gold Fields La Cima sought to be part of this problem solution, and during an assembly held on October 25, 2012, a consensus was reached with national and local authorities to form a multi-sectorial technical Committee in order to address the housing problems in Hualgayoc.
This Committee is formed, among others, by representatives of the municipality of Hualgayoc, Ministry of Energy and Mines, Ministry of Environment & Housing, Construction and Sanitation, Geophysical Institute of Peru and the company. In addition, it includes a representative of the affected residents and another one representing the Ministers Council Presidency, who acts as Committee’s facilitator and director.
Ergo, in August 2013, a damage assessment (census) was conducted and completed in 2014. The company prepared an action plan which allowed to identify and classify nine houses with serious structural damage, five with moderate damage and eight with slight damage. In 2016 the reconstruction of the first nine homes with serious structural damage was completed.
In the middle of 2016 a complementary census was carried out, which included the total number of houses in the city Hualgayoc, allowing to identify nine houses with serious structural damage, five with moderate damage, eight houses with slight damage. In 2017, the Multi Sectorial Committee, of which Gold Fields is member, will continue necessary actions to find a solution for this problem.
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Dialogue and Consultation Table
This organization is a work platform led by Hualgayoc’s District Mayor so the residents, through their representatives, participate in project planning to be implemented in order of benefitting the community; its premise is that these projects must bring tangible benefits.
The Dialogue and Consultation Table is composed of delegates from 3 towns and 39 hamlets, a representative of Hualgayoc city, a representative of the district municipality and a representative of the company.
In 2016, we supported the presentation and financing of a set of projects. The District Municipality of Hualgayoc with the support of Gold Fields La Cima and Minera Coymolache presented a set of projects.
In relation to technical office of the Ministry of Agriculture and Irrigation, according to the following:
• Improve Los Angeles irrigation channel in the Nuevo San Juan Bajo village, district of Hualgayoc (S/537,417.56). Concluded work which was executed by AgroRural, through direct administration.
• Improve the Tamplan Colpa channel, Moran Pata section, district of Hualgayoc (S/843,917.43). This work is currently executed by AgroRural, through direct administration.
• Improve the Ojo de Agua Sangal channel, Pujupe Alto section, district of Hualgayoc (S/1, 264,337).
In relation to the Ministry of Housing, Construction and Sanitation technical office according to the following details:
• Improving vehicle design for pedestrian protection on streets of the locality of Hualgayoc, district of Hualgayoc (S/4,749,671.26).
• Extension and improvement of potable water and sanitary latrines in the Anexo Chilon hamlet, district of Hualgayoc (S/3,123,792.79).
• Extension and improvement of potable water and rural sanitation in the Tumbacucho hamlet, district of Hualgayoc (S/2,563,927.05).el caserio de Tumbacucho, distrito de Hualgayoc (S/2,563,927.05).
The last two directly funded Minera Coymolache.
Currently, Gold Fields La Cima gives support to the municipality of Hualgayoc in following-up some 10 projects, not only in their administration but also in correcting some observations found therein.
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Projects Developed with the Communities through the Dialogue and Consultation Table
General informationProjects Status
Nuevo San Juan Preschool
2 Construction of preschool facility containing three rooms: two classrooms with bathrooms including and a principal’s office.
Completed
Potable water in Apan Alto
3 Construction of potable water system benefiting 35 families.
Completed
Livestock development in Yerba Santa Alta
4 Projects aim to increase family budgets, improving 64.5 hectares of pastures, artificial insemination, introduction of 86 calves, training and practice in silage for 86 families.
Completed
Ojos Corral - First Stage
6 Integrated livestock development project including artificial insemination activities, improving 84 hectares of pasture, introduction of 168 calves, training of livestock developers, training in proper management of dairy livestock.
Under execution
Maraycucho5 Livestock development project, improving 15.5 hectares of pastures, training in adequate management of dairy cattle, introduction of 61 heifers.
Completed
Corralpampa7 Construction project of sheds for Guinea pig breeding for 64 families and installation of 16 hectares of pasture.
Completed
Muya8 Construction project of 170 sheds for Guinea pig breeding and installation 42.5 hectares.
Completed
Tumbacucho9 Construction project of sheds for Guinea pig breeding for 64 families and installation of 16 hectares of pasture, introduction of 66 calves, training of promoters, training in proper management of dairy cattle.
Under execution
Hiring of teachers1 Donation given to the District Municipality of Hualgayoc to hire teachers. With this measure, deficit of teachers is covered in coordination with the district’s education promotion office.
Completed
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Concerted Development Plan
Gold Fields La Cima, with the support of Cedepas Norte NGO, contributed to the creation of the Concerted Development Plan for the District of Hualgayoc through a participatory process with workshops. This process includes 6 areas and the 39 villages comprising them. The workshops helped to define which projects should be prioritized, taking as a basis the main needs demanded by the population, and the use of own resources of the municipality and those which may be accessed through the Central Government.
During 2016, the plan was approved and we worked mainly in its awareness in the district of Hualgayoc, in all its villages and communities. The “Concerted Development Plan Leadership School” was also implemented, enabling the development of leaders in every community to conduct a citizen surveillance process and ensure compliance and monitoring of projects in the plan, especially to avoid the use of funds in projects which were not established a priority.
Cajamarca’s Regional Government Process of Ecological & Economic Zoning and Land Use (ZEE-OT)
It is an instrument to guide decision making on the use of natural resources and the proper employment of the territory, agreeing population needs and development opportunities in harmony with the environment. It is also a participatory and concerted, process that seeks to identify the possibilities of sustainable use that has a certain territory; in other words, a geographical region that may have potential for various economic activities. Consequently, those score levels that could present restrictions in the territory are not limiting the exploitation of its potential, as they are managed properly and avoid negative impacts in terms of economic, social and environmental development.
Currently, the Regional Government of Cajamarca, as part of the ZEE-OT, implements the proposal of the Draft Organic Law on Land Use Planning for Sustainable Development, which aims to establish the regulatory framework to identify, order, and regulate human activities in the territory and its interaction with natural and anthropic systems according to criteria and priorities relating to sustainable and decentralized development. Thus, it is expected to contribute to improve life quality of people and environmental management of natural resources and biodiversity, in accordance with the rational use and occupation of territory.
Furthermore, Regional Government of Cajamarca, through the Regional Environmental Commission, which is a multi-sectorial organ in charge to coordinate and arrange the regional environmental policy, is promoting the implementation of the Regional Strategy on Biological Diversity, the Environmental Information Technical Group, the Regional Environmental Education Policy, the Environmental Participative Monitoring, the Environmental Emergency Declaration of the Upper Part of the Micro basins of Tingo-Maygasbamba, Hualgayoc-Arascorgue and Perlamayo Rivers in the Province of Hualgayoc, Department of Cajamarca, as well as the Regional Strategy Against Climate Change, among others which contribute to an efficient environmental management.
In this context, Cajamarca’ Mining Sector, integrated by Gold Fields La Cima and other mining companies like Rio Tinto, Yanacocha, La Zanja, Lumina Cooper and Coymolache that participate in the different regional platforms such as CAR and ZEE- OT actively, has promoted concerted actions in favor of sustainable development, such as:
• Pursue that Cajamarca’ Mining Sector is acknowledged as a group of companies which presents sectorial and technical proposals regarding social, economic and environmental issues.
• Have adequate technical organization and documentation of environmental information obtained in work commissions.
• Propose environmental management tools that support their existence in the active participation of the State, company and community.
• Provide technical support in clarifying negative perceptions regarding extractive activities, especially those relating to water quality impact, ecosystems, biodiversity, basis, head of water basin, among others. Broadcast the main
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Social-environmental Team
The Community Relations area has a team which aims to facilitate understanding of environmental management plans in friendly terms. In this way, the Social- environmental T eam in coordination with the Environmental Area support communication between authorities and community leaders about environmental information of Cerro Corona’s operations.
Work Team and Local Business
We have a policy that promotes local businesses and generation of local labor, which includes a specific procedure for the operational managers to promote local employment, and establish the necessary mechanisms to provide jobs, first of all, to the residents of the communities in the company’s areas of direct and indirect influence.
achievements and challenges of the SMC about environmental and land management.
• Deliver information about the projects that will guide adequate management of climate change to reduce the risk associated to hydro-climate phenomena.
• Broadcast social-environmental practices and economic supports generated by mining companies, thus contributing to sustainable development of communities in which we operate.
Finally, it must be noted that Gold Fields La Cima was appointed by the mining sector as SMC titular representative in the Regional T echnical Commission of the Cajamarca’s Regional Government Process of Ecological & Economic Zoning Land Use, for 2016 and on.
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Line No 3:
Corporate Positioning
It pursues that the company is acknowledged as a strategic ally for Cajamarca region development. To do so, we work on building direct communication bridges with our stakeholders. To achieve this goal, during 2016, the following initiatives continued being supported:
Radio Programs
Micro radio programs such as “Did you know that?” continued, which informs about the benefits of mining locally, regionally and in the country, as well as those projects executed by the company in favor of education, health, social infrastructure and production development. Furthermore, they give advice about activities such as agriculture, cattle raising, environmental care, among others. According to a survey, 70% think the broadcasted information is useful.
Another important initiative was the contest radio program named “Know to Win”, with the participation of students of third, fourth and fifth grade of high school of El Tingo community and other districts of Hualgayoc. For this initiative, a set of questions and answers approved by the education authority of the area was developed. This set of questions included topics relating to culture, history, environmental, civil education, Gold Fields contributions to development, among others.
This contest was prepared thanks to a joint work of students, principals, teachers and parents of each school and the company’s representatives.
Plan of guided visits to operations
As every year, there are visits to the operations with the purpose that its social and environmental management tool is understood. During 2016 students (85%), teachers (7.5%) and community residents (7.5%), visited the mine. In total they were around 220 people.
Awareness-raising workshops at schools
In order that several interest groups of the company understand the company’s management, especially its social and environmental management, workshops with 206 students were conducted. These workshops took place as part of the World’s Biodiversity Day and World’s Earth’s Day.
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Line No 4:
Social Development
2016 Social Development Programs
Main Scope [G4-SO1]
Field of Action
Climate Change and Environmental
“Adapting together”: Improving local capacity to climate change adaptation in the high andean ecosystems of Hualgayoc
Duration: 2 years, 8 months2016 Investment: S/462,000
General goals
Improving local capacity for environmental governance and natural resource management for climate change adaptation in the district of Hualgayoc.
Specific goals
• Hualgayoc’s municipality officers have capacities to execute measures against climate change –through successful policies, planning and proposals, as well as public investment programs (including public investment projects) attracting decentralized financial resources to the district.
• District inventory of water resources and climate projection surveys containing information for developing water resource management policies.
• District’s Climate Change Adaptation Advisory Plan (PCDACC) approved and under implementation.
• Two established and strengthened watershed committees.
• Two developed and implemented micro- basin management plans.
• Construction of small infrastructures for supporting agriculturalnproduction.
• Gathering andbdocumentation of successful testimonies in Cajamarca.
• Authorities, officials, technicians and teachers of Cajamarca become more aware and informed about successful testimonies in water harvesting and climate change adaptation measures.
• Through an alliance between Universidad Nacional de Cajamarca and the Provincial Municipality of Cajamarca, public investment projects were designed and managed as part of the climate change adaptation measures.
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Background
The project was designed to address the following issues:
• Poor local governance and lack of local government policies for climate change adaptation plans and programs; and
• Poor community organization to implement climate change adaptation measures as part of an integrated management
Thus, the project is focused on generating capacities in authorities, officers and community leaders for planning and management in two levels: at district’s level and at micro basins management level, giving emphasis to the management of water resources.
Moreover, water harvesting pilot systems will be implemented through a number of adaptation measures so that they can be copied by families and as public investment proposals.
Beneficiaries
• Authorities and officials of the District Municipality of Hualgayoc relating to environmental management.
• Authorities and officials who are members of the Municipal Environmental Commission
• Community leaders who are members of the Development Committees for Climate Change Adaptation Management, corresponding to the Tingo- Maygasbamba and Hualgayoc Arascorge micro-basins.
• Families who are beneficiaries of the water harvesting systems and members of the system’s administrative organizations.
• Authorities, officials of Cajamarca’s Provincial Municipality and Cajamarca National University.
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Field of Action
Productive Development
Enterprise Networks Promotion and Citizen Participation Project to improve peasants’ income in Hualgayoc with the support of Lutheran World Relief (LWR) and Cedepas Norte as executing party.
Duration: Stage III: April 2016 - March 2018 2016 Investment: S/242,653
General goal
Increase net income of 510 local producers (480 milk producers and 30 cheese producers), i.e. who are part of the dairy products food chain in the District of Hualgayoc.
Specific goals
Improve their competencies and organizations in business management.
• Producers have basic management instruments (production and sale records)
• Six established business networks apply management instruments (production and sale records)•
Standardize quality and increase milk supply to produce cheese.
• Increase milk production from 6.4 to 8.8 liters per cow per day. Producers implement techniques to improve quality of milk.
• Ten stockbreeding promoters are trained in animal health and artificial insemination.
• Installation of 100 sprinkler irrigation systems which are currently working.
• 240 hectares of improved reseeding pastures.
• 100 metric tons of ensilage
Sustainable improvement of cheese production and quality
• 30 cheese plants produce two new types of cheese.
• 30 plants have adequate infrastructure and facilities to produce cheese.
• There are twelve food safety registries.
Strengthening of trading competencies of cheese producers.
• Eight new customers with in the lowest areas.
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Background
Gold Fields La Cima made a monetary donation with the aim of providing financial support to LWR to execute the project.
Hualgayoc province farming families are low-income because the majority possesses less than three land hectares, which have low yields in fodder production to feed livestock that produces on average five liters of milk per cow.
Under these circumstances, REDyPAC project supported the capitalization of small producers with cultivation and irrigation of pastures, artificial insemination with breeding animals of best genetic quality, advice of good breeding & livestock management practices, and the regular supervision of a veterinarian.
The project is being implemented in 20 (of the 39) hamlets located in the district of Hualgayoc, province of Hualgayoc, region of Cajamarca. This district, which is between Tingo and Hualgayoc Rivers, has a wild geography mostly covered by forest, rocks, hills with limited vegetation, natural pastures in the highest areas, and dry agricultural areas in the lowest areas.
Both economies are sustained by small farms (93% of farms are smaller than five hectares). Produced milk is sold at the local cheese production artisanal centers. In average each family has three dairy cows (Holstein x Brown Swiss crosses), which produce between 6 and 7 liters per cow per day. This rate may be reduced to 5 liters per cow per day during dry seasons.
On the other hand, most cheese plants are still part of the house, which facilities include cement floors, plastered walls and basic equipment.
Beneficiaries
• Increase net income of producers in 48.33% for the sale of milk, and 80% for the sale of cheese.
• Producers have better skills to manage their productive units which enable them to make business, developing a proper productive articulation and insertion to the market.
• Producers know and apply basic management instruments:
- Production records
- Sale records
This will allow them make better decisions to improve and grow their productive units.
• Established business networks for cooperation develop their business (cheese sale) by implementing management tools.
• Improve productivity of pastures, allowing producers increase their income for quality milk sale.
• There is an increase of milk production of 33.3% per cow per day, from 6.4 to 7.2 liter per cow per day.
• 100% reduction of bacterial load in milk. Currently, we are within the limits permitted by the Ministry of Health.
• Stockbreeding developers with strengthened capacities are providing services in sanitation and artificial insemination in their communities and neighbor communities.
• 55 irrigation systems were installed and are currently working. Each system is irrigating 3/4 of hectare per producer.
• 240 hectares of improved pastures were installed (1/4 of hectare per producer) with adequate seeds for the area.
• Producers are trained in pasture management and conservation which is plentiful in rainy season, apart from making pasture installations on an annual basis for conservation purposes (silage).
• 15 cheese producers with better skills are now producing two types of cheese (pasteurized fresh cheese and Swiss cheese).
• 30 cheese plants have adequate infrastructure and facilities.
• There are 7 food safety registries.
• There are 8 contracts with more demanding markets at better prices.
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Field of Action
Productive Development
Installation of permanent pasture in the Area of Direct Influence (ADI) of Cerro Corona
Duration: November- 2016 – February 2017 2016 Investment: S/858,463
General Goal
Improve ADI residents’ income by increasing the production and quality of farmers’ pastures in the rural communities of El Tingo, Pilancones, Coymolache Alto and Cuadratura.
Each community submits the list of beneficiaries for each period to the company.
2016 has been hit due to dry conditions, thus lands were prepared for sowing between January and February 2017
Background
This activity aims to strengthen livestock, which is one of the main economic activities of ADI’s residents. As a result of the program, preparation of land allows sowing an improved pasture hectare.
For new areas planting with improved pastures, a diagnosis of parcels is carried out to verify that they meet the requirements of moisture, topography, soil depth; then proceeds to prepare the ground with agricultural machinery; and, finally, proceed with seeding, using certified seeds.
The company promotes a joint work and therefore financed inputs such as lime, seeds, fertilizer and technical assistance. Meanwhile, community brings the unskilled labor, thus strengthening the integration of the company and the local communities.
Beneficiaries
• 200 beneficiary families from El Tingo hamlet (150 has of improved pastures and 17 has of sown silage), Pilancones (70 has) and Alto Coymolache (60 has).
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Field of Action
Productive Development
Bovine artificial insemination program and health care.
Duration: January - December 20162016 Investment: S/386,112
General Goal
Provide the service of artificial insemination, advice and technical assistance, as well as sanitary treatment of the cattle in the ADI and dosage campaigns.
Specific goals
Health treatment to 1200 cattle during the year.
• Inseminate 620 cattle during 2016 campaign.
• Provision of 4,000 dosages in 2 campaigns of 2,000 cattle each.
Background
The overall purpose of the artificial insemination program is to know and promote the best animals evaluated according to records, and genetic improvement raw material.
Genetic evaluation combines the genealogical, productive information, available productive conditions, and estimated breeding values expressed in terms of expected progeny difference (EPD or DEP) for each trait of interest (birth weight, weaning weight, dairy skill, rib eye area, ease of birth delivery, etc.).
From these values, breeders decide about the selection process of the livestock, according to production objectives.
Provision of 4,000 cattle per campaign in the Rural Community of El Tingo, the hamlets of Pilancones, Alto Coymolache, Coymolache and Cuadratura with high quality products against common liver fluke, pulmonary and gastrointestinal parasites.
Reduce parasite load in animals according to parasitological analysis.
Beneficiaries
• 70 peasants assessed technically.
• 600 inseminated cattle obtained an average of 55% offspring.
• 1,354 cattle with health care.
• Veterinarians in the area were trained to provide health care to farmers’ cattle. Also, under a joint approach, the company covers the fees of veterinarians and beneficiaries cover the costs of medicines.
• In 2016 four agricultural veterinarian promoters of El Tingo community have been trained in CEFOP Cajamarca. These promoters accompany the work of veterinarians in the ADI.
• The company has assigned a veterinarian by community, which allowed a 365 days service a year.
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Field of Action
Education
Support with the hiring of teachers for schools in Cerro Corona’s Area of Direct Influence.
Duration: March - December 2016 2016 Investment: S/428,760
General goal
Support the improvement process of education quality through the recruitment of teachers in the three educational levels (initial, primary and secondary).
Specific goals
• Contribute to the increase of education quality through visits that teachers make to students’ homes and to the parents’ school.
• Support appropriate treatment of students by teachers.
Background
Given the educational problems in the country and in the area (one teacher for the whole school), the company sought to complement pedagogical areas required by the sector carrying out the following activities:
• Constant accompaniment to teachers of a psychologist and a specialist in education in the ADI.
• Hired teachers perform a personalized follow-up to students with learning disabilities.
• Visiting the families of the students.
• School for parents.
• Psycho-pedagogical lectures to parents.
Beneficiaries
• 820 students from the hamlets of El Tingo, Pilancones, Coymolache Alto and city of Hualgayoc.
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Field of Action
Education
School transportation for students of schools located in the Area of direct influence (ADI)-Cerro Corona.
Duration: March- December 2016 2016 Investment: S/624,209
General goal
Offer transport to students in order to prevent respiratory illnesses and support their school performance.
Specific goals
• Contribute to improving education quality in the ADI, offering the service of school transportation.
• Offer transportation to initial,
• primary and secondary students of El Tingo to schools of this community. Students from Anexo Predio La Jalca Pilancones and Coymolache that commute to the city of Hualgayoc.
• Reduce dropout in educational institutions benefited.
Background
ADI students living in scattered areas are exposed to respiratory diseases due to low temperatures and long walks to their schools. Therefore, they need transportation to attend on time their schools; in this way, health risks are avoided and also the physical wear that influences low school performance, especially in the rainy and frosty seasons.
In Anexo Predio La Jalca Pilancones and Coymolache there are no secondary level school, by which students are moved to Hualgayoc city for being closer than El Tingo rural community.
Beneficiaries
350 students
Campo de accion
Educacion
University scholarship program
Duration: 2016 2016 Investment: S/72,603
General goal
Grant scholarships to outstanding students who graduated from high school in the Hualgayoc district.
Specific goals
• Strengthen the human capital of young fellows, prompting the development of Hualgayoc district.
• Develop leadership skills amongst the fellows and generate a dynamic effect in local young people.
• Encourage young people to be makers of change through a proactive attitude.
Background
This program seeks to support outstanding high school students by a grant that covers 50% of University tuition for their career. The other 50% is covered by Universidad Privada Antonio Guillermo Urrelo of Cajamarca. Gold Fields la Cima has an agreement with the mentioned university.
Beneficiaries
• 7 scholarships awarded.
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Field of Action
Education
Teach, Peru Program
Duration: March - December 2016 2016 Investment: S/243,630
Field of Action
Health
Integrated Health Campaign in the city of Hualgayoc, El Tingo, Pilancones and Coymolache Alto, and El Cobro
Length: Two campaigns take place twice a year with the goal of reaching 100% of the population. 2016 Investment: S/128,996
General goal
Contribute to quality education improvement in the Area of direct influence (ADI) to expand opportunities for children and young people of the involved educational institutions.
Specific goals
• Implement an educational program on N° 82680 Joaquin Bernal primary school and Kindergarten N° 414, city of Hualgayoc.
Background
The program enables experience exchange among young professional leaders from the leading universities of the country.
The agreement with Ensena Peru NGO has already achieved the improvement in the teaching and learning of Hualgayoc’s children and young people.
Beneficiaries
• 120 students.
General goal
Contribute to improving health care quality of people receiving specialized medical care and apply appropriate sanitary habits.
Specific goals
• Provide comprehensive, preventive and recuperative health care to residents of benefited communities.
• Educational activities for health prevention.
Background
In Cerro Corona’s areas of direct and indirect influence there is prevalence of infectious diseases such as IRAS (acute respiratory infections), EDAS (acute diarrheal diseases), intestinal parasitizes, acaroid and others. Therefore, it is necessary to support the Hualgayoc Health Center to offer preventive medical campaigns.
Attention in these campaigns is done by physicians in a personalized way.
Beneficiaries
• ADI (Area of direct influence) and transportation route of concentrate (El Cobro hamlet).
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2 0 1 6 I N T E G R A T E D R E P O R T
Towards a New Vision for Mining in 2030According to the United Nations, 2030 is the year to meet the Sustainable
Development Goals outlined in the document, “Transforming our world: the 2030
Agenda for Sustainable Development”, adopted in September 2015.
We expect this document promotes dialogue between government, civil society and
mining industry in general, with the main purpose of reducing the level of social
conflicts regarding mining, increasing contribution of mining to Peru’s sustainable
development, and above all, helping improve the long term feasibility of this industry.
The document was prepared by the Working Group, which is comprised by high executives of mining
companies and representatives of the Oficina Nacional de Dialogo y Sostenibilidad of the Council of
Ministers. Technical assistance for the elaboration of this document was provided by the UN Development
Programme and the Sustainable Minerals Institute of the University of Queensland (Australia).
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Next StepsFor 2017, we expect our role in social management gives direct support to the already initiated mine expansion process, which will involve joint work with the company’s ADI communities. Consequently, we will reach a diagnosis to know their needs and expectations, making their concerns heard and respecting their decisions strictly. In this way, we expect to build confidence that would subsequently allow us sign agreements for the execution of shared value projects.
Communication action plans will be maintained although they will focus on young people, especially by supporting education; therefore, we expect to increase the number of guided visits to Cerro Corona, setting as a target that all young residents of Hualgayoc know the mine. Awareness raising workshops will be held through theatre plays, including students so they can develop learning through living.
Regarding institutional positioning, we expect to derive most of our support to the final version of the guidelines that will allow create the New Vision for Mining in 2030. To such end, we will take part in a participative process with NGOs, authorities and the State. Gold Fields La Cima expects to be a key actor in this process, especially in Cajamarca region.
Having clear that the radio is an essential information tool that enable us to continue informing the company’s social and environmental management, we expect to continue designing initiatives to get a positive mining perception in the different social and political stakeholders at local, district, provincial, regional and national level, and especially, to make the company be acknowledged as a leader and strategic partner in favor of the development of Cajamarca region.
In this context, the contest radio program “Know to Win” will remain with the participation of a school from Tranca de Pujupe community.
We also planned to continue being part of business management contests so that Gold Fields La Cima is recognized as a leader company in social and environmental management.
With regards to social investment projects, further work will be made on implementing water harvesting systems (construction of reservoirs), reconstruction of high-risk houses and start-up of the “Successful Entrepreneurs” local supplier strengthening program second phase. Through the program “For Children of Hualgayoc”, special emphasis will be granted to strengthen the Multi Sectorial Committee for the Health, Nutrition and Education of families in the district of Hualgayoc.
Finally, potable water projects planned to be executed in 2017 include the connection of the potable water supply system of Hualgayoc with Cuadratura dike.
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8
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GOLD FIELDS LA CIMA S.A.
Separate Financial Statements
December 31, 2016 and 2015
Contents Page
Separate Financial Statements
Separate Statement of Financial Position 1
Separate Statement of Income and Other Comprehensive Income 2
Separate Statement of Changes in Equity 3
Separate Statement of Cash Flows 4
Notes to the Separate Financial Statements 5- 46
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(Tra
nsla
tion
of F
inan
cial
Sta
tem
ents
orig
inal
ly is
sued
in S
pani
sh)
GO
LD F
IELD
S L
A C
IMA
S.A
. S
epar
ate
Sta
tem
ent
of F
inan
cial
Pos
ition
A
s of
Dec
embe
r 31
, 201
6 an
d 20
15
1 In
tho
usan
ds o
f sol
es
No
te
2016
20
15
In
tho
usan
ds o
f sol
es
No
te
2016
20
15
Cu
rren
t as
sets
C
urr
ent
liab
iliti
es
C
ash
5
251,
788
14,9
55
Tr
ade
acco
unts
pay
able
13
10
8,91
7 15
3,75
6 Tr
ade
acco
unts
rec
eiva
ble
6
34,8
52
20,9
39
O
ther
acc
ount
s pa
yabl
e 14
10
5,57
6 52
,243
O
ther
acc
ount
s re
ceiv
able
8
47,4
99
77,0
23
O
ther
fin
anci
al li
abili
ties
15
279,
624
145,
603
Inve
ntor
ies
9 83
,810
76
,234
To
tal c
urr
ent
liab
iliti
es
49
4,11
7 35
1,60
2
Pre
paid
exp
ense
s
7,11
1 7,
921
To
tal c
urr
ent
asse
ts
42
5,06
1 19
7,07
2
No
n-c
urr
ent
liab
iliti
es
O
ther
fin
anci
al li
abili
ties
15
5,21
8 6,
076
No
n-c
urr
ent
asse
ts
Pro
visi
ons
16
19
0,16
2 17
4,56
4 In
vent
orie
s
9 10
7,57
3 10
8,40
0
Def
erre
d ta
x lia
bilit
ies
17
242,
234
316,
102
Inve
stm
ents
10
-
23,9
00
Pro
pert
y, p
lant
and
equ
ipm
ent
11
1,
599,
776
1,87
7,30
1
To
tal n
on
-cu
rren
t lia
bili
ties
437,
614
496,
742
Inta
ngib
le a
sset
s
12
331,
497
436,
378
T
ota
l lia
bili
ties
931,
731
848,
344
To
tal n
on
-cu
rren
t as
sets
2,03
8,84
6 2,
445,
979
E
qu
ity
Issu
ed c
apita
l 18
1,
138,
278
1,13
8,27
8
Inve
stm
ent s
hare
s 19
15
6,09
6 15
6,09
6
Oth
er c
apita
l res
erve
s 20
22
7,65
6 22
7,65
6
Oth
er e
quity
res
erve
s 21
46
,034
39
,138
Ret
aine
d ea
rnin
gs
22
(35,
888)
23
3,53
9
T
ota
l eq
uit
y
1,53
2,17
6 1,
794,
707
To
tal a
sset
s
2,46
3,90
7 2,
643,
051
T
ota
l lia
bili
ties
an
d e
qu
ity
2,46
3,90
7 2,
643,
051
The
acco
mpa
nyin
g no
tes
on p
ages
5 t
o 46
are
an
inte
gral
par
t of
thes
e se
para
te f
inan
cial
sta
tem
ents
.
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(Translation of Financial Statements originally issued in Spanish) GOLD FIELDS LA CIMA S.A. Separate Statement of Income and other Comprehensive Income For the years ended December 31, 2016 and 2015
2
In thousands of soles Note 2016 2015
Revenue 25 1,091,002 933,912 Cost of sales 26 (763,533) (703,311)
Gross profit 327,469 230,601
Selling expenses 27 (39,676) (40,532) Administrative expenses 28 (26,401) (12,969) Other operating expenses 29 (297,876) (128,847) Other operating income 29 32,581 48,843
Operating profit (3,903) 97,096
Finance income (expenses): Finance income 30 286 568 Finance cost 30 (17,011) (16,816) Exchange difference, net 30 (2,938) (7,641)
(19,663) (23,889)
Profit or loss before income tax (23,567) 73,207 Income tax 24 (75,632) (365,776)
Loss for the year (99,199) (292,569)
Other comprehensive income - -
Total comprehensive income (99,199) (292,569)
The accompanying notes on pages 5 to 46 are an integral part of these separate financial statements.
164
2 0 1 6 I N T E G R A T E D R E P O R T
(Tra
nsla
tion
of F
inan
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ents
orig
inal
ly is
sued
in S
pani
sh)
GO
LD F
IELD
S L
A C
IMA
S.A
. S
epar
ate
Sta
tem
ent
of C
hang
es in
Equ
ity
For
the
year
s en
ded
Dec
embe
r 31
, 201
6 an
d 20
15
3
N
um
ber
of
shar
es
Issu
ed c
apit
al
Inve
stm
ent
shar
es
Oth
er c
apit
al
rese
rves
Oth
er e
qu
ity
rese
rves
Acc
um
ula
ted
resu
lts
To
tal
In t
hous
ands
of s
oles
C
om
mo
n
Inve
stm
ent
(no
te 1
8)
(no
te 1
9)
(no
te 2
0)
(no
te 2
1)
(no
te 2
2)
equ
ity
Bal
ance
as
of
Dec
emb
er 3
1, 2
014
1,24
7,50
3 17
1,06
6 1,
250,
553
171,
492
230,
499
37,4
97
785,
309
2,47
5,35
0
Loss
for
the
yea
r and
oth
er
com
preh
ensi
ve in
com
e
-
- -
-
(292
,569
) (2
92,5
69)
Co
mp
reh
ensi
ve in
com
e fo
r th
e
year
-
- -
- -
- (2
92,5
69)
(292
,569
)
Cap
ital r
educ
tion
- -
(112
,275
) (1
5,39
6)
- -
(1
27,6
71)
Div
iden
ds
- -
- -
- -
(259
,201
) (2
59,2
01)
Sha
re-b
ased
pay
men
t -
- -
(1,2
02)
- (1
,202
) Le
gal r
eser
ve
- -
- -
(2,8
43)
2,84
3 -
-
To
tal t
ran
sact
ion
s w
ith
Co
mp
any'
s
ow
ner
s -
- (1
12,2
75)
(15,
396)
(2
,843
) 1,
641
(259
,201
) (3
88,0
74)
Bal
ance
as
of
Dec
emb
er 3
1, 2
015
1,24
7,50
3 17
1,06
6 1,
138,
278
156,
096
227,
656
39,1
38
233,
539
1,79
4,70
7
Loss
for
the
yea
r and
oth
er
com
preh
ensi
ve in
com
e
- -
- -
- -
(99,
199)
(9
9,19
9)
Co
mp
reh
ensi
ve in
com
e fo
r th
e
year
-
- -
- -
- (9
9,19
9)
(99,
199)
Div
iden
ds
- -
- -
- -
(170
,228
) (1
70,2
28)
Sha
re-b
ased
pay
men
t -
- -
- -
6,89
6 -
6,89
6
To
tal t
ran
sact
ion
s w
ith
Co
mp
any'
s
ow
ner
s -
- -
- -
6,89
6 (1
70,2
28)
(163
,332
)
Bal
ance
as
of
Dec
emb
er 3
1, 2
016
1,24
7,50
3 17
1,06
6 1,
138,
278
156,
096
227,
656
46,0
34
(35,
888)
1,
532,
176
The
acco
mpa
nyin
g no
tes
on p
ages
5 t
o 46
are
an
inte
gral
par
t of
thes
e se
para
te f
inan
cial
sta
tem
ents
.
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(Translation of Financial Statements originally issued in Spanish) GOLD FIELDS LA CIMA S.A. Separate Statement of Cash Flows For the years ended December 31, 2016 and 2015
5
In thousands of soles Note 2016 2015
Cash flows from operating activities: Net loss for the year (99,199) (292,569) Debit (credit) in profit or loss that do not represent cash
flow:
Deferred tax (73,867) 259,671 Depreciation and amortization 336,720 267,363 Impairment loss of property, plant, and equipment 11 191,821 - Impairment loss of investment in subsidiary 10 23,900 184 Embedded derivative (21,654) 25,841 Other adjustments 24,632 72,479 Increase (decrease) in cash flows from operating
activities for net changes in assets and liabilities:
Trade accounts receivable 7,741 20,121 Other accounts receivable 57,381 15,091 Inventories (6,479) (11,974) Prepaid expenses 810 (613) Trade accounts payable (44,839) 37,616 Other accounts payable 53,333 (14,763) Cash flows from operating activities:
Interest paid (6,273) (2,889) Paid taxes (27,857) (44,229)
Net cash from operating activities 415,899 331,145
Cash flows from investing activities: Acquisition of property, plant, equipment and intangible asset
(148,463) (220,068)
Acquisition of investments - (13)
Net cash used in investing activities (148,463) (220,081)
Cash flows from financing activities: Capital reduction - (127,671) Loans and amortization related to financing activities, net 139,439 28,088 Dividends paid (170,230) (259,201)
Net cash used in financing activities: (30,792) (358,784)
Net increase (decrease) in cash and cash equivalents 5 236,644 (247,720) Effect of variations on exchange difference on cash held 189 935 Cash and cash equivalents at the beginning of year 5 14,955 261,740
Cash and cash equivalents at the end of year 251,788 14,955
The accompanying notes on pages 5 to 46 are an integral part of these separate financial statements.
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(Translation of Financial Statements originally issued in Spanish) GOLD FIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
5
1. Reporting Entity A. Background Gold Fields La Cima S.A. (hereinafter the Company) is an indirect subsidiary of Gold Fields Limited (South Africa) through Gold Fields Corona (BVI) Limited - British Virgin Islands, which owns 99.7766% of its capital stock. The Company’s registered office is Av. El Derby No. 055, Torre 1, Of. 301, Urb. Lima Polo & Hunt Club; Santiago de Surco, Lima, Peru.
The Company was incorporated on November 19, 2003, as result of the simple reorganization of Sociedad Minera Corona S.A. which spun off and transferred an equity block for approximately S/ 64 millions of the assets related to Cerro Corona project, mainly composed by concessions, mining rights, exploration and pre-operating expenses. Subsequently, in June 2007, Minera Gold Fields S.A. through a simple reorganization transferred to the Company an equity block at its carrying amount for approximately S/ 317 million which included expenses, investments and liabilities related to pre-operation and development phases of Cerro Corona project. B. Business activity The Company is engaged in the production and trading of gold-copper concentrate. Cerro Corona mining operation is located in the district of Hualgayoc, province of Hualgayoc, Department of Cajamarca. C. Management plans The Company's financial statements as of December 31, 2016 show a negative working capital position of S/ 69,056 thousand, due to the reclassification of the syndicated loan with The Bank of Nova Scotia to current debt of US$ 82 million, because it will mature in December 2017. Management plans to renew or refinance the loan during 2017, which has a very competitive interest rate compared with the market. Concerning the accumulated losses, the loss generated during 2016 is mainly due to the impairment of assets, with a net effect on profit or loss of S/ 135 million and the divestment in its subsidiary for S/ 23.9 millions. Management evaluated different alternatives to extend the life of the mine by converting resources to reserves, most of them linked to reducing the construction costs of the tailing dam, the main limiting factor for growth. D. Legal Stability Agreement with PROINVERSION On October 3, 2007, the Company entered into a Legal Stability Agreement with Private Investment Promotion Agency (PROINVERSION); granting the Company stability on tax systems related to Income Tax, the systems for contracting workers and export promotion systems for a 10-year period. In return, the Company has mainly undertaken to issue shares representative of capital stock in favor of Gold Fields Corona (BVI) Limited for approximately US$ 244.7 million against the receipt of contribution that this Company shall make within a term not exceeding 2 years beginning on the date such agreement is signed. The Company complied with this commitment in 2008 through the capitalization of obligations in favor of Gold Fields Corona (BVI) Limited.
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Translation of Financial Statements originally issued in Spanish GOLD FIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
6
E. Approval of the separate financial statements The separate financial statements as of December 31, 2016 were approved by management on February 23, 2017 and will be presented to the Board of Directors for their approval and issuance and then submitted for consideration of the General Stockholders’ Meeting to be held within the period prescribed by law, for final approval. In management's opinion, the accompanying financial statements as of December 31, 2016 will be approved by the Board of Directors and the General Stockholders’ Meeting without amendments. 2. Basis for Preparation of the Separate Financial Statements A. Basis of accounting The Company's separate financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB), in force as of December 31, 2016. B. Information responsibility The information included in these financial statements is the responsibility of the Company’s Board of Directors that expressly states that all the principles and criteria included in the IFRS issued by the IASB have been applied. C. Basis of measurement The separate financial statements have been prepared based on an historical cost basis, from the accounting records maintained by the Company, except for the following items measured at fair value. Financial instruments are measured at fair value. Liabilities from cash-settled share-based payments are measured at fair value. D. Functional and presentation currency The items included in the separate financial statements are measured in the currency of the primary economic environment in which the Company operates. These separate financial statements are stated in soles (S/), which is the Company’s functional and presentation currency. E. Changes in accounting policies The Company has consistently applied accounting policies, stated in this note, to all periods presented in these consolidated financial statements. The Company has adopted new standards and modifications to existing standards at the date of initial application on January 1, 2016 which did not have a significant impact on the Company's financial statements. F. Use of estimates and judgments The preparation of the financial statements in accordance with IFRS requires the Company's management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Review of accounting estimates are recognized in the period where estimates have been reviewed and in any future affected periods.
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Translation of Financial Statements originally issued in Spanish GOLD FIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
7
Information about significant judgments in applying accounting policies that have the most significant effect on the amounts recognized in these financial statements are as follows:
i. Temporary adjustments to sales prices of gold-copper concentrates are determined
according to sale contracts after the delivery date. Sales of the Company's concentrates are based on trade agreements whose provisional value is allocated to sales that shall be adjusted at a final future price.
Adjustment to sales is considered as an embedded derivative that shall be separated from the contract. The trade agreement is related to the sale of concentrates at market prices in the London Metal Exchange (LME) and the Bullion Market Association (BMA) for copper and gold, respectively. The embedded derivative does not qualify as hedging instrument; therefore, changes in the fair value are recorded in the statement of comprehensive income. ii. Production-unit method Reserves are used when determining depreciation and amortization of assets specific to the mine. This results in charges for depreciation and/or amortization proportional to the deterioration of the anticipated remaining life of mine production. Every useful life is evaluated based on i) physical limitation of asset, and ii) new evaluations of economically feasible reserves. These calculations require the use of estimates and assumptions which include the amount of estimated reserves and estimates of future capital disbursements.
iii. Determination of reserves and mineral resources Annually, the Company calculates its ore reserves based on the guidelines of the South African standard- SAMREC Code (South African Mineral Resource Committee), which establishes the standards and geological, technical and economic recommendations. The process to estimate the amounts of reserves is complex and requires taking subjective decisions when evaluating all available geological, geophysical, engineering and economic information. Reviews of reserve estimates may occur due to review of data or geological assumptions, changes in assumed prices, production costs and results of exploration activities, among others. Changes in reserve estimates may affect mainly depreciation of fixed assets directly related to mining activity, mine closure provision, evaluation of deferred assets recoverability and amortization period of pre-operating, development and intangible assets costs. At present, Company’s management uses international experts to validate reserves inventory. iv. Provision for mine closure The Company calculates a provision for mine closure on an annual basis, and to determine such provision, significant estimates and assumptions are made as there are several factors affecting the final liability for this obligation. Factors include estimates of scope and costs of closure activities, technological changes, changes in regulations, costs increase compared to inflation rates and changes in discount rates.
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Such estimates and/or assumptions may result in actual expenses in the future that differ from recorded amounts when establishing the provision. The provision as of reporting date represents the best estimate of Company’s management of the present value of future costs related to mining unit’s closure under current operating conditions. The Company records a provision for its mining unit closure which represents its legal obligation to restore the environment at the end of operations. On the date of initial recognition of the liability that arises from this obligation, which is shown as discounted at fair value, the same amount is charged to the property, plant and equipment account in the statement of financial position. Subsequently, liability is adjusted in each period to reflect the finance cost considered in the initial measurement, and in addition, the capitalized cost is depreciated over useful life of related asset. The Company will recognize any resulting gain or loss upon provision settlement. Changes in total provision amount or useful life of related assets arising from initial estimates review are recorded in respective assets and liabilities. v. Provision for impairment of accounts receivable The amount of the provision for impairment of trade accounts receivable is determined when there is objective evidence that the Company will not collect all the amounts overdue according to terms originally established of the selling transaction. vi. Provision for administrative and work processes Due to its nature, contingencies will only be solved when one or more future events arise. The determination of contingencies inherently involves the exercise of judgments and assumptions on future event results. vii. Share-based compensation plan The Company calculates officers‘ share-based compensation plan cost at the fair value of the call option on the date the option is granted, using appropriate valuation technique. To determine the fair value of the option, the yield of the share on the Philadelphia Stock Exchange (Philadelphia XAU index) is taken into account as a referential market price. Other variables are included to estimate the number of options to grant. viii. Impairment of long-lived assets The Company estimates that the value of permanent assets will be recovered in the normal course of operations. The estimate of impairment amount is based on assumptions on international metal prices traded at world production levels and estimates of proved and probable reserves of the Company. As of the date of the financial statements, available projections of these variables have resulted in an impairment adjustment to long-lived assets. ix. Fair value hierarchy Fair value of financial assets and liabilities recorded in the statement of financial position cannot be derivatives from active markets. Fair value is determined using valuation techniques that include the discounted cash flow models. Inputs of these models area taken from observable markets, if possible, but when it is not feasible, a degree of judgment is required when determining the fair value. Judgments include considerations of liquidity, credit and volatility risks. Changes in assumptions concerning these factors may affect fair values of recorded financial instruments.
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3. Significant Accounting Policies Significant accounting policies applied to prepare the financial statements are detailed below. The accounting policies set out below have been applied consistently to all periods presented, unless otherwise indicated. A. Cash Cash comprises cash on hand and demand deposits in banks, with no significant risk of changes in their fair value. B. Trade accounts receivable Trade accounts receivable are initially recognized at their fair value and are subsequently valued at the future price according to each contract. The provision for impairment of trade accounts receivable is determined when there is objective evidence that the Company will not collect all the amounts overdue according to the terms originally established of the selling transactions and considering the judgment and experience of management. C. Non-derivative financial instruments Non-derivative financial instrument is any contract that gives rise to both a financial asset in one entity and a financial liability, or equity instrument in another. In the case of the Company, financial instruments correspond to primary instruments such as accounts receivable and accounts payable. Non-derivative financial instruments are classified as asset, liability, or equity according to the contract that gave rise to the financial instrument. The interest, dividends, gains, and losses generated by a financial instrument, and classified as liability, are recorded as income or expense in the statement of comprehensive income. The payment to holders of financial instruments classified as equity is recorded directly against stockholders’ equity. The financial instruments shall be offset when the Company has the legally enforceable right to set off, and management intends either to settle on a net basis, to realize the asset, and settle the liability simultaneously. Non-derivative financial instruments shall be recognized in the financial statements at fair value. Fair value is the amount for which an asset could be exchanged between knowledgeable willing parties, or a liability settled between a debtor and a creditor in an arm’s length transaction. It is the opinion of management that the carrying amount of the financial instruments as of December 31, 2016 and 2015 are substantially similar to their fair values due to their short periods of realization and/or maturity. The recognition and valuation criteria of those accounts are disclosed in the notes to the financial statements on accounting policies. D. Financial assets The Company classifies its financial assets into the following categories: financial assets at fair value through profit or loss, and loans and accounts receivable. The classification depends on the purpose for which financial assets were acquired. Management determines the classification of their financial assets as of the date of their initial recognition and reassesses this classification at each closing date.
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Financial assets at fair value through profit or loss A financial asset is classified in this category if it was mainly acquired in order to be sold in the short-term or if it is so designated by Management. Derivative financial instruments are also classified as marketable unless they are designated as hedges. Assets under this category are classified as current assets if they are held as marketable or they are expected to be realized within 12 months as from the date of the statement of financial position. The Company has not had these financial assets as of December 31, 2016 and 2015. Loans and accounts receivable Loans and accounts receivable are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Company provides with money, goods or services directly to a debtor, with no intention to trading the account receivable. They are included in current assets, except for maturities exceeding 12 months after the date of the statement of financial position. The latter are classified as non-current assets. Loans and accounts receivable are included in trade accounts receivable, accounts receivable from related parties, and other accounts receivable in the statement of financial position. The Company evaluates at each closing date of the period whether there is objective evidence of the impairment of a financial asset or group of financial assets. E. Inventories Inventories are valued at cost or net realizable value, the lower. Cost is determined using the weighted average method; the cost of inventories in transit is determined using the specific cost method. Cost of finished products and work-in-progress comprise cost of mineral extraction, direct labor, direct costs, and general expenses, and excludes finance expenses and exchange difference. The net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. For the reductions of the carrying amount of inventories at net fair value, a provision for inventory obsolescence is recorded to profit or loss for the year when those reductions occur. Long-term inventories correspond to porphyry mineral, which will be processed at the end of the mine useful life. The Company, at each closing date of the period, conducts an impairment testing as of December 31, 2016 and 2015. The management considers that such inventories do not require an estimate for impairment. F. Investment in subsidiary The subsidiaries are the entities on which the Company is able to manage its financial and operative policies as owner of more than half of the voting shares. The Company also assesses the control where they do not have more than 50% of the right to vote, but are able to manage operative finance and policies by virtue of facto control. Investment in subsidiaries are shown in the financial statements at cost. Cash dividends received from subsidiaries are credited to income statement when its distribution is approved. Dividends received in subsidiaries' shares are not recognized in the financial statements. At 2016 year-end, the Company recorded the investment in Hualgayoc Holding in profit or loss.
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G. Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation. The cost of an item of property, plant and equipment comprises its purchase price or cost of construction, including disbursements directly attributable to the acquisition or manufacturing of these items. The purchase price or the cost of construction correspond to the total amount paid and the fair value of any other compensation delivered in the asset acquisition. Subsequent costs attributable to the goods of fixed assets are included in the carrying amount or recognized as separate asset, as applicable, only when it is probable that future economic benefits associated to the asset will flow to the Company, and their cost can be reliably measured, otherwise are charged to costs of production or to expenses, as appropriate. Maintenance and repair expenses are charged to production costs or to expenses, as appropriate, in the period when they are incurred. The expenses incurred to replace an item of property, plant and equipment are capitalized separately, and the carrying amount of the replaced asset is written-off. In the case that the replaced component has not been considered as a separate component of assets, the replacement value of the new component is charged to cost. Assets under construction are capitalized as a separate component. When they are finished, their cost is transferred to a definitive category. Work-in-progress is not depreciated. Property, plant and equipment items are derecognized when they are sold or when no future economic benefits are expected from its use or subsequent sale. Gains and losses for sale of assets correspond to the difference between the income from the transaction and the asset carrying amount. They are recognized in the statement of comprehensive income. The residual value, the economic useful life of an asset and applied depreciation methods are reviewed and adjusted, as needed, at each date of the statement of financial position. Any change in these estimates are prospectively adjusted. Land is not depreciated. Rate used for the annual depreciation of vehicles is 20%; furniture and fixtures is 10%; IT equipment and various equipment are 33%. Depreciation is calculated using the straight-line method, as follows:
Depreciation rate Years
Vehicles 20% 5 Furniture and fixtures 10% 10 IT equipment 33% 3 Various equipment 33% 3
Estimated useful life of remaining assets is based on estimated useful life of the mine, calculated according to the volume of proven reserves based on processed tons of mineral. The carrying amount of an asset is written off immediately at its recoverable amount when the carrying amount of the asset exceeds its estimated recoverable value.
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H. Intangible assets Mining rights Mining rights are recorded at acquisition cost and at the cost of transfer of the assets received by spin off of the equity block and by simple reorganization. Such costs are amortized as of the beginning of the mineral commercialization stage, based on the estimated useful life of the deposit calculated according to the volume of proven reserves and based on the tons of processed ore. Mine exploration, development and preparation costs The Company has adopted IFRS 6 for the recognition of its exploration and evaluation expenditures. The standard mandates that mining entities must establish an accounting policy that specifies which exploration and evaluation activities cost will be recognized as assets and, subsequently, apply this policy consistently. In this context, the Company has maintained its accounting policy to recognize as assets the expenses incurred in exploration and evaluation activities. Exploration, evaluation and development expenses are presented at cost. The cost of these assets includes the expenses incurred in the incorporation of the Company and the investments made in the exploration of its mineral deposits such as: acquisition of exploration rights, topographic, geological, geochemical and geophysical studies, diamond drilling, tests and those related to evaluation activities on the technical feasibility and economic viability of extraction of mineral resources. Such costs are amortized as of the beginning of the mineral commercialization stage, based on the estimated useful life of the deposit calculated according to the volume of proven reserves and based on the tons of processed ore. Likewise, those disbursements that increase significantly the level of reserves of mining units under exploitation are capitalized. Development costs necessary to maintain production levels are charged to production costs in the period they occur. Pre-operating expenses The Company’s policy also establishes that the pre-operating expenses directly related to exploration and mining development activities shall be recognized as assets. Pre-operating expenses related to the Cerro Corona mining project development were capitalized and amortized from the beginning of the commercial stage, based on the estimated useful life of the mineral deposit, calculated according to the volume of proven reserves and the tons of ore processed. Deferred stripping costs Deferred stripping costs comprise the removal of overburden and other waste products from the mine which were capitalized during the development stage of Cerro Corona project and are amortized from the beginning of commercial stage, based on estimated useful life of the mineral deposit, calculated according to the volume of proven reserves and the tons of ore processed. Research and projects expenses These assets are recorded at cost and mainly comprise the disbursements incurred to improve the capacity of the tailing dam. Amortization will begin as from the date it begins to operate and will be amortized during the estimated useful life of the mineral deposit, calculated according to the volume of proven reserves and tons of ore processed
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I. Other financial liabilities In accordance with IAS 39, financial liabilities are classified as: i) financial liabilities at fair value through profit or loss, and ii) other financial liabilities. The Company determines the classification of its financial liabilities at initial recognition date. The Company's financial liabilities include trade accounts payable, accounts payable to related parties and other accounts payable. All financial liabilities are initially recognized at their fair value and are subsequently valued at amortized cost. Amortized costs include costs directly attributable to the transaction. J. Financial lease Leases where the Company substantially assumes all risks and rewards related to ownership are classified as finance assets. Upon initial recognition, leased asset is recognized at amounts equivalent to the fair value of the leased assets. These assets are depreciated using the straight-line method based on their estimated useful life for similar own goods. Annual depreciation is recognized as expenses. Other leases are considered as operating leases and are recognized as expense using the straight-line method through the lease term. K. Income tax and deferred tax Income tax expenses of the period comprise current and deferred taxes. Taxes are recognized in the statement of comprehensive income. Current tax is calculated based on tax laws enacted or substantially enacted as of the date of the statement of financial position. Management periodically evaluates its position in income tax returns regarding situations in which tax laws are subject to interpretations. Deferred income tax is determined using the liability method based on temporary differences derived from tax basis of assets and liabilities, and their balances in financial statements. Deferred income tax is determined using tax rates (and legislation) enacted as of the date of the tax stability agreement signed by the Company that are expected to be applied when the deferred income tax asset is realized or the income tax liability is paid. A deferred tax asset is only recognized to the extent that it is probable that future taxable profits will be available, against which temporary differences can be utilized. L. Provisions General Provisions are recognized when the Company has a present obligation (legal or constructive), as a result of past events, and when it is probable that an outflow of resources will be required to settle the obligation, and it is possible to reliably estimate its amount. When the effect of the time value of money is material, the value of the provision is the present value of the expenditure required to settle the provision. When the Company estimates that a provision is reimbursable, for example, in cases covered by insurance contracts, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain.
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Provision for environmental remediation The Company records a provision for environmental remediation whose main component relates to the decommissioning works. The methodology for calculating the liability represents the present value of the future expenditure required in the above-mentioned tasks, based on studies conducted by independent experts and presented to the Ministry of Energy and Mines. Such liability is shown under 'provisions' in the statement of financial position. M. Impairment loss When events or circumstantial economic changes indicate that the value of long-lived asset might not be recoverable, management reviews the carrying amount of these assets. If after this analysis, carrying amount exceeds its recoverable amount, an impairment loss is recognized in the comprehensive income. Recoverable amounts are estimated for each asset or, if it is not possible, for each cash-generating unit. The recoverable amount of a long-lived asset or a cash-generating unit is the higher of its fair value less cost of sales and its value in use. Fair value less cost to sell of a long-lived asset or cash-generating unit, is the amount resulting from an arm’s length sale transaction, between knowledgeable parties, less corresponding selling costs. Value in use is the present value of the future cash flows expected to arise from an asset or a cash-generating unit. N. Revenue recognition Revenues are recognized when all the risks and rewards of ownership of the delivered asset are transferred; and it is probable that the economic benefits associated to the transaction will flow to the Company; and finally amount can be reliably measured. The following specific criteria shall be met in order to recognize a revenue: Sale of concentrates In the case of export of gold-copper concentrates, sales are recognized when shipments are made; in the case of local sales, on the date when the concentrate is delivered in the authorized warehouse; in this moment all associated risks and rewards are transferred to the ownership of concentrates. Initially, sales of concentrates are recorded at estimated value, according to temporary settlements at shipment date and subsequently they are adjusted on a monthly basis and/or when final settlements are received. The higher or lower impact is recorded in the period it occurs when final settlement of concentrates is different from temporary settlements used to book revenue. Embedded derivative Concerning the measurement of revenues, on the date of sales recognition, the Company recognizes the income from sale of concentrates based on the temporary sales of value as per international metal prices on such date. The final price is subject to a future settlement according to trade agreements signed by clients that normally ranges from 90 to 180 days after delivering the concentrate to the client; the final adjustments is based on market prices established in the trade agreement. Exposure to change in the price of metals generates an embedded derivative that is separated from the trade agreement. At the closing of each period, the temporary sales value is adjusted at the fair value of the aforementioned agreement, considering the estimated price for the period stipulated in the agreement.
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The sale price for the quotation period can be reliably measured since it is based on metal prices (copper and gold) that compose of the concentrate, which are actively traded in international markets. The temporary adjustment of sales value is recorded as an increase or decrease of net sales. O. Cost and expense recognition The cost of sales that corresponds to the production cost of concentrates commercialized by the Company is recorded when goods are delivered at the same time that revenue from such sale is recognized. Other costs and expenses are recognized as they accrue, regardless of the moment when they are incurred, and are recorded in the periods to which they relate. P. Finance costs Finance costs incurred in the construction of any qualifying asset are capitalized during the period required to complete and prepare the asset for its intended use. Other finance costs are recognized in the statement of comprehensive income. Q. Contingencies Contingent liabilities are not recognized in financial statements. They are disclosed in notes to financial statements unless their occurrence is remote. Contingent assets are disclosed in notes to the financial statements, when an inflow of economic benefits is probable. R. Capital and investment shares Common and investment shares are classified as equity and are recognized at their face value. S. Finance income and cost Finance income and costs are recorded in the statement of comprehensive income of the year to which they relate, and they are recognized when accrued, regardless of the moment of their collection or payment. T. Foreign currency transactions and balances Foreign currency transactions are those transactions carried out in a currency other than the functional currency. Foreign currency transactions are translated into functional currency at the exchange rates at the dates of the transactions. Gains or losses on exchange difference resulting from the payment of such transactions and from the translation of monetary assets and liabilities stated in foreign currency at exchange rates ruling at period-end closing are recognized in the statement of comprehensive income. U. New accounting pronouncements There are standards and amendments to standards and interpretations that are mandatory for the first time for periods beginning on or after January 1, 2016. The following new standards, amendments and interpretations have been issued but are effective for annual periods beginning on or after January 1, 2017, and the Company has not adopted them in preparing these financial statements. Those that might be relevant to the Company are detailed below. The Company does not plan to adopt these standards early.
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New IFRS Date of mandatory application IFRS 9 Financial Instruments. For annual periods beginning on or after January
1, 2018. Earlier adoption is permitted.
IFRS 15 Revenue from Contracts with Customers For annual periods beginning on or after January 1, 2018. Earlier adoption is permitted.
IFRS 16: Leases For annual periods beginning on or after January 1, 2019. Earlier adoption is permitted.
Amendments to IFRS
IAS 7: Disclosure Initiative, amendments to IAS 7 For annual periods beginning on or after January 1, 2017. Earlier adoption is permitted.
IAS 12 – Income Taxes – Recognition of deferred tax assets for unrealized losses (amendments to IAS 12).
For annual periods beginning on or after January 1, 2017. Earlier adoption is permitted.
IFRS 2 Share-based Payment: Clarifying the accounting for certain types of share-based payment arrangements.
For annual periods beginning on or after January 1, 2018. Earlier adoption is permitted.
IFRS 10 — Consolidated Financial Statements and IAS 28 —Investments in Associates and Joint Ventures: Sales or contributions of assets between an investor and its associate/joint venture.
Effective date was indefinitely deferred.
IFRS 15 Revenue from Contracts with Customers: Amendment clarifying requirements and providing additional transitional relief for companies that are implementing the new standard.
For annual periods beginning on or after January 1, 2018. Earlier adoption is permitted.
The Company’s management is evaluating the impact, if any, of the adoption of these amendments and new IFRS issued but not yet effective as of the date of the financial statements.
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4. Financial Risk Management The Company has exposure to the following risks arising from its activities: market risks (including currency risk, interest rate risk and price risk), credit risk, liquidity risk and capital management. The Company’s program of financial risk management seeks to minimize potential adverse effects to its financial performance. Major aspects in risk management are the following: A. Currency risk Main foreign currency transactions are carried out in U.S. dollars and relates to accounts payable/receivable and the Company’s financing activities, which determine the assets and liabilities in such currency. The Company is exposed to the risk that the exchange rate of the U.S. dollar fluctuates significantly compared to the Peruvian sol. Management has decided to assume the foreign exchange risk of this position; therefore, it has not carried out transactions with hedging derivative instruments. Balances in foreign currency as of December 31 are summarized as follows: In thousands of U.S. dollars 2016 2015
Assets: Cash 73,642 2,694 Trade accounts receivable and other accounts receivable 12,100 17,040
85,742 19,734
Liabilities: Trade accounts payable (25,200) (38,684) Accounts payable to related parties (226) (77) Provisions (56,596) (53,800) Other financial liabilities (84,775) (44,481)
(166,797) (137,042)
Net (liability) asset position (81,055) (117,308)
As of December 31, 2016, the exchange rates used by the Company to record balances in foreign currency, published by the Banking, Insurance and Private Pension Plan Agency - SBS, were S/ 3.352 and S/ 3.360 per US$ 1 for assets and liabilities, respectively (2015: S/ 3.407 and S/ 3.410 per US$ 1 for assets and liabilities, respectively). As of December 31, 2016, the Company recorded a net exchange gain of S/ 2,938 thousand (2015: net exchange loss of S/ 7,641 thousand). In case of devaluation or revaluation of U.S. dollar compared to the sol as of December 31, 2016 and 2015, with all other variables remaining constant, net profit before income tax had increased or decreased as follows:
Increase/decrease in Effects in profit or loss before taxes In thousands of soles US$ exchange rate
2016 +10% 2,188 -10% (2,188) 2015 +10% 1,191 -10% (1,191)
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B. Interest rate risk Since the Company does not have significant interest-bearing assets, its income and operating cash flows are substantially independent from the changes in the market interest rates. The Company’s interest rate risk arises from its long-term debts. Variable debt rates exposes the Company to the cash flow interest rate risk. Fixed-rate debts expose the Company to interest rate risk on liabilities fair value. The Company does not have a formal policy to determine how much exposure should be at fixed or variable rate. However, when assuming new loans or indebtedness, Management exercises its judgment to decide whether a fixed or variable rate would be more favorable to the Company during expected period until its maturity. As of December 31, 2016 and 2015, fixed-term and variable instruments held by the Company are the following: In thousands of soles 2016 2015
Fixed rate instruments Finance lease (8,413) (8,459) Variable rate instruments Other financial liabilities (276,429) (143,220)
If as of December 31, 2016 and 2015 unhedged variable interest rates would have been 0.5% higher/lower, and other variables would have remained constant, at the close of the year, the profit or loss before taxes would be as follows:
Increase/decrease Effects in profit or loss before taxes In thousands of soles in interest rate
2016 +0.5% 34,440 -0.5% (34,440) 2015 +0.5% 17,918 -0.5% (17,918)
C. Price risk The Company is exposed to the risk of fluctuations in the price of copper and gold. The sales flows of its concentrates are exposed to the fluctuation of market prices of such metals. Fluctuation effects of market prices of metals increase the risk of potential capital requirements to stockholders to cover the need of cash from operations. If, as of December 31, 2016 and 2015, the concentrate price had been 5% higher/lower and the remaining variables had remained constant, the results for the year before taxes would have been affected as follows:
Increase/decrease Effects in profit or loss before taxes In thousands of soles in prices
2016 +5% 52,846 -5% (52,846) 2015 +5% 46,696 -5% (46,696)
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D. Credit risk The Company’s credit risk arises from the debtors’ inability to meet obligations upon maturity. The Company’s management considers there is no significant credit risk since its clients have short-term credit periods according to contract terms and that no bad debt issues have occurred. Finally, the Company places its liquidity surplus in prestigious financial entities, establishes conservative credit policies, and constantly evaluates conditions existing in the market where it operates. Consequently, the Company does not foresee any significant loss arising from this risk. Further information on credit risk is explained in note 6 herein. E. Liquidity risk Prudent liquidity risk management implies holding enough cash and cash equivalent, and financing available through a proper number of credit sources. Due to the dynamic nature of operating and investing activities, the Company seeks to maintain flexibility in its finances through the availability of committed credit lines. The analysis of the Company’s financial liabilities classified according to its maturity, considering the remaining period until reaching the maturity as of the closing date of the period is as follows:
In thousands of soles Carrying amount
Contractual cash flow
2 months or less
2 – 12 months 1 – 2 years
Over 2 years
2016
Other financial liabilities
(note 15) 284,842 (284,842) - (279,624) (5,218) -
Other accounts payable
(note 14) (*) 954 (954) (954) - - -
Provisions (note 16) 190,162 (190,162) - - - (190,162)
Trade accounts
payable (note 13) 108,917 (108,917) (108,917) - - -
584,875 (584,875) (109,871) (279,624) (5,218) (190,162)
2015
Other financial liabilities
(note 15) 151,679 (151,679) - (145,603) (6,076) -
Other accounts payable
(note 14) (*) 863 (863) (863) - - -
Trade accounts
payable (note 13) 153,756 (153,756) (153,756) - - -
306,298 (306,298) (154,619) (145,603) (6,076) -
(*) It does not include statutory assets nor social benefits Management monitors the risk associated with each of the above mentioned categories, which include maintaining good relationships with financial entities in order to assure sufficient credit lines at all times, as well as covering working capital with cash flows coming from operating activities. As of December 31, 2016, the Company has cash amounting to S/ 251,788 thousand (2015: S/ 14,955 thousand), also available credit lines amounting to S/ 1,037,108 thousand (2015: S/ 949,236 thousand). In opinion of management, there is no significant liquidity risk as of December 31, 2016 and 2015.
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F. Capital management The Company’s objective in managing capital is to safeguard the capacity to continue as a going concern and provide the expected return to stockholders and respective benefits to stakeholders, as well as maintaining an optimum structure to reduce capital cost. The Company may adjust the amount of dividends paid to stockholders; issue new shares; or sell assets to reduce debt to maintain or adjust the capital structure. The Company monitors its capital based on the total debt-to-capital ratio. This ratio is determined by dividing the net debt by the total capital. The net debt is calculated as the total indebtedness of the Company less cash and cash equivalents. Total capital corresponds to net equity as shown in the statement of financial position. Currently, the Company holds very low debt levels, however, the strategy is taking advantage of the low cost to access to an additional lease to finance its growth and sustainability projects of the mining unit in good times. Debt-to-capital ratios as of December 31, were as follows:
In thousands of soles 2016 2015
Total liabilities 584,875 769,964 Less: cash 251,788 14,955 Net debt 333,087 755,099
Total net equity 1,532,176 1,794,707
Debt-to-capital ratio 0.22 0.42
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Sta
tem
ents
orig
inal
ly is
sued
in S
pani
sh)
GO
LD F
IELD
S L
A C
IMA
S.A
. N
otes
to th
e Se
para
te F
inan
cial
Sta
tem
ents
D
ecem
ber
31, 2
016
and
2015
21
G.
Acc
ou
nti
ng
cla
ssif
icat
ion
an
d f
air
valu
e
The
follo
win
g ta
ble
show
s th
e ca
rryi
ng a
mou
nts
and
fair
valu
es o
f fin
anci
al a
sset
s an
d lia
bilit
ies,
incl
udin
g th
eir
leve
ls in
the
fai
r va
lue
hier
arch
y.
(a)
It d
oes
not
incl
ude
tax
bene
fits
nor
rest
ricte
d fu
nds.
(b)
It d
oes
not
incl
ude
adva
nces
, sta
tuto
ry li
abili
ties
nor
soci
al b
enef
its.
The
follo
win
g ta
ble
show
s th
e ca
rryi
ng a
mou
nts
and
fair
valu
es o
f fin
anci
al a
sset
s an
d lia
bilit
ies,
incl
udin
g th
eir
leve
ls in
the
fai
r va
lue
hier
arch
y.
Car
ryin
g a
mo
un
t Fa
ir v
alu
e
In t
hous
ands
of
sole
s
Ad
just
men
t
pri
ces
at f
air
valu
e
Loan
s an
d
acco
un
ts
rece
ivab
le
Oth
er
fin
anci
al
liab
iliti
es
To
tal
Leve
l 1
Leve
l 2
To
tal
As
of
Dec
emb
er 3
1, 2
016:
Fin
anci
al a
sset
s m
easu
red
at
fair
val
ue
E
mbe
dded
der
ivat
ive
(not
e 6)
(4
,187
) -
- (4
,187
) (4
,187
) -
(4,1
87)
(4
,187
) -
- (4
,187
) (4
,187
) -
(4,1
87)
Fin
anci
al a
sset
s n
ot
mea
sure
d a
t fa
ir v
alu
e
Def
erre
d (n
ote
5)
- 25
1,78
8 -
251,
788
- -
- Tr
ade
acco
unts
rec
eiva
ble
(not
e 6)
-
39,0
39
- 39
,039
-
- -
Oth
er a
ccou
nts
rece
ivab
le (n
ote
8) (a
) -
38,4
80
- 38
,480
-
- -
-
329,
307
- 32
9,30
7 -
- -
Fin
anci
al li
abili
ties
no
t m
easu
red
at
fair
val
ue
O
ther
fin
anci
al li
abili
ties
(not
e 15
) -
- 28
4,84
2 28
4,84
2 -
284,
842
284,
842
Trad
e ac
coun
ts p
ayab
le (n
ote
13)
- -
108,
917
108,
917
- -
- P
rovi
sion
s (n
ote
16)
- -
190,
162
190,
162
- -
- O
ther
acc
ount
s pa
yabl
e (n
ote
14) (
b)
- -
954
954
- -
-
-
- 58
4,87
5 58
4,87
5 -
284,
842
284,
842
183
Go
ld
Fie
lds
L
a
Cim
a
S.
A.
(Tra
nsla
tion
of F
inan
cial
Sta
tem
ents
orig
inal
ly is
sued
in S
pani
sh)
GO
LD F
IELD
S L
A C
IMA
S.A
. N
otes
to th
e Se
para
te F
inan
cial
Sta
tem
ents
D
ecem
ber
31, 2
016
and
2015
22
C
arry
ing
am
ou
nt
Fa
ir v
alu
e
In t
hous
ands
of
sole
s
Ad
just
men
t
pri
ces
at f
air
valu
e
Loan
s an
d
acco
un
ts
rece
ivab
le
Oth
er
fin
anci
al
liab
iliti
es
To
tal
Leve
l 1
To
tal
Leve
l 2
As
of
Dec
emb
er 3
1, 2
015:
Fin
anci
al a
sset
s m
easu
red
at
fair
val
ue
E
mbe
dded
der
ivat
ive
(not
e 6)
(2
5,84
1)
- -
(25,
841)
(2
5,84
1)
- (2
5,84
1)
(2
5,84
1)
- -
(25,
841)
(2
5,84
1)
- (2
5,84
1)
Fin
anci
al a
sset
s n
ot
mea
sure
d a
t fa
ir v
alu
e
Cas
h (n
ote
5)
- 14
,955
-
14,9
55
- -
- Tr
ade
acco
unts
rec
eiva
ble
(not
e 6)
-
46,7
80
- 46
,780
-
- -
Oth
er a
ccou
nts
rece
ivab
le (n
ote
8) (a
) -
44,9
33
- 44
,933
-
- -
-
106,
668
- 10
6,66
8 -
- -
Fin
anci
al li
abili
ties
no
t m
easu
red
at
fair
val
ue
O
ther
fin
anci
al li
abili
ties
(not
e 15
) -
- 15
1,67
9 15
1,67
9 -
151,
679
151,
679
Trad
e ac
coun
ts p
ayab
le (n
ote
13)
- -
153,
756
153,
756
- -
- O
ther
acc
ount
s pa
yabl
e (n
ote
14) (
b)
- -
51,5
70
51,5
70
- -
-
-
- 35
7,00
5 35
7,00
5 -
151,
679
151,
679
(a)
It d
oes
not
incl
ude
tax
bene
fits
nor
rest
ricte
d fu
nds.
(b
) It
doe
s no
t in
clud
e ad
vanc
es, s
tatu
tory
liab
ilitie
s no
r so
cial
ben
efits
. Fi
nan
cial
inst
rum
ents
mea
sure
d a
t fa
ir v
alu
e Th
e ta
ble
belo
w e
xpla
ins
the
mea
sure
men
t of
the
Com
pany
’s f
inan
cial
inst
rum
ents
and
fin
anci
al li
abili
ties.
Fai
r va
lues
mea
sure
men
ts a
re c
ateg
oriz
ed in
to
diffe
rent
leve
ls in
a fa
ir va
lue
hier
arch
y ba
sed
on t
he in
puts
use
d in
the
val
uatio
n te
chni
ques
as
follo
ws:
The
diff
eren
t le
vels
are
def
ined
as
follo
ws:
Leve
l 1: Q
uote
d pr
ices
(una
djus
ted)
in a
ctiv
e m
arke
ts fo
r id
entic
al a
sset
s or
liab
ilitie
s.
Le
vel 2
: Lev
el 2
: inp
uts
othe
r th
an q
uote
d pr
ices
incl
uded
in L
evel
1 t
hat
are
obse
rvab
le fo
r th
e as
set
or li
abili
ty, e
ither
dire
ctly
or
indi
rect
ly.
Le
vel 3
: Inp
uts
are
unob
serv
able
inpu
ts fo
r th
e as
set
or li
abili
ty.
184
2 0 1 6 I N T E G R A T E D R E P O R T
(Translation of Financial Statements originally issued in Spanish) GOLD FIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
23
5. Cash As of December 31, this caption comprises the following: In thousands of soles 2016 2015
Imprest fund 16 16
Bank balances 251,772 14,939
251,788 14,955
As of December 31, 2016, the Company holds checking accounts at high-quality local and foreign financial institutions in local and foreign currency for approximately S/ 4,923 thousand and US$ 73,642 thousand, respectively (2015: S/ 5,759 thousand and US$ 2,694 thousand, respectively). Such funds have free withdrawal option and bear interest at market rates. According to the information provided by Apoyo & Asociados Internacionales S.A.C. and Fitch Ratings, the quality of the financial institutions in which the Company deposits its cash is rate as follows: In thousands of soles 2016 2015 Bank deposits AA - rating 228,658 628 A + rating 22,740 11,197 A rating 374 3,114
251,772 14,939
6. Trade Accounts Receivable As of December 31, this caption comprises the following: In thousands of soles 2016 2015 Accounts receivable: Pan Pacific Copper Co. Ltd. (Japan) 23,385 7,187 Aurubis AG (Germany) 8,098 6,235 Glencore Peru SAC 3,926 9,543 Trafigura Pte Ltd 3,630 7,697 LS-Nikko Copper Inc. (Korea) - 8,073 Aurubis Bulgaria - 8,045
39,039 46,780
Embedded derivative (4,187) (25,841)
Total trade accounts receivable 34,852 20,939
A. Trade accounts receivable and other accounts receivable have current maturity, do not have
specific guarantees, and do not bear interest. B. As per management’s analysis, an account receivable is considered as impaired when it has
been classified as uncollectible and has, therefore, been presented in the provision for doubtful accounts.
As of December 31, 2016 and 2015, the Company’s management considers that there are no uncollectible accounts since its main clients have a recognized prestige in the international market and do not present financial problems at closing period. Also, although it holds trade accounts receivable aged over 120 days, it is because of the contractual conditions that the Company maintains with its clients.
185
Go
ld
Fie
lds
L
a
Cim
a
S.
A.
(Translation of Financial Statements originally issued in Spanish) GOLD FIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
24
In thousands of soles 2016 2015
Aging of accounts receivable: Up to 60 days 23,692 16,730 60 - 120 days 7,231 16,118 Over 120 days 8,116 13,932
39,039 46,780
Classification of debtors: Group 1 - 17,589 Group 2 39,039 29,191
39,039 46,780
Group 1: new clients (less than 6 months as clients). Group 2: existing clients (more than 6 months) with no payment failures in the past. 7. Accounts Receivable and Payable to Related Parties As of December 31, this caption comprises the following: In thousands of soles 2016 2015 Other accounts receivable (note 8) Compañía Transmisora Nor Peruana S.R.L. 22,520 25,211 Minera Gold Fields Salares Norte 22 - Gold Fields Ghana Limited 13 13
22,555 25,224 Other accounts payable (note 14) Compañía Transmisora Nor Peruana S.R.L. 492 - GFL Group Services Pty Ltd. 453 268 Gold Fields Exploration 9 8
954 276
Gold Fields Ghana Limited Accounts payable correspond mainly to reimbursements of costs and expenses incurred on behalf of the Company for personnel training. Minera Gold Fields Salares Norte Accounts payable correspond to reimbursement of costs and advisories. Compañía Transmisora Nor Peruana S.R.L. Accounts payable correspond to advances and loans provided for the constructions of the Electricity Transmission Line. GFL Group Services (Pty) Ltd. Accounts payable correspond to reimbursements of costs and expenses incurred on behalf of the Company to provide logistics and administrative support for the Cerro Corona Mining Project. Gold Fields Exploration Accounts payable correspond to reimbursement of personnel insurance expenses incurred on behalf of the Company. Balances of these accounts have current maturity, do not accrue interest and do not have specific guarantees. Members of the Board and Key Management Salaries paid to members of the Board and key management during 2016 and 2015 amounted to S/ 28,848 thousand and S/ 25,907 thousand, respectively. As of December 31, 2016 and 2015, there are no other related party transactions.
186
2 0 1 6 I N T E G R A T E D R E P O R T
(Translation of Financial Statements originally issued in Spanish) GOLD FIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
25
8. Other Accounts Receivable As of December 31, this caption comprises the following: In thousands of soles 2016 2015
Investment Certificates (a) 9,847 9,847 Tax credit (b) 9,019 14,652 Sale of fuel 3,956 4,201 Advances from suppliers 1,696 4,608 Various 426 1,053 Advance payments and ITAN - 17,438
24,944 51,799
Related parties (note 7) 22,555 25,224
47,499 77,023
(a) According to Law 29230 - Law that Promotes Regional and Local Public Investment with the
participation of the Private Sector, the Company has approved valuations that entitle to Certificates of Regional and Local Public Investment (CIPRL, for their Spanish acronym) that are enforceable in favor of the Company for the amount of S/ 9,847 thousand and coming from the construction of Bambamarca market completed on December 2014.
(b) It corresponds to sales tax for accumulated purchase as of December 31, 2016, to be offset in
the following months. 9. Inventory As of December 31, this caption comprises the following: In thousands of soles 2016 2015
Finished products 33,694 30,098 Concentrated work-in-progress 3,008 2,366 Various supplies (a) 46,809 43,157 Inventory in transit 299 613 Long-term work-in-process (b) 107,573 108,400
Total inventories 191,383 184,634
Current: (83,810) (76,234)
Total non-current 107,573 108,400
(a) During 2016, the Company has evaluated the impairment of supplies derecognizing the items
completely impaired. As of December 31, 2016, the Company considers that no provision for impairment is required. The effect on the results for the years 2016 and 2015 amounts to S/ 1,252 thousand and S/ 2,143 thousand, respectively.
187
Go
ld
Fie
lds
L
a
Cim
a
S.
A.
(Translation of Financial Statements originally issued in Spanish) GOLD FIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
26
As of December 31, 2016 and 2015, the impairment of supplies mainly comprises the following:
In thousands of soles 2016 2015 Mechanical parts and instrumentation 1,012 1,473 Spare parts - Conveyor belt 94 95 Various supplies 91 158 Electric and electronic parts 20 96 Headers - 116 Others 35 205
Total 1,252 2,143
(b) During 2016, the Company assessed the long-term work-in-progress and considers that no
estimate for impairment is required. As of December 31, 2016, there is a stock of 3,823 tons (000) in the long term (2015: 3,853 tons (000)).
10. Investments As of December 31, 2016, the investment in Hualgayoc Holding S.A.C. subsidiary was recognized in profit or loss amounting to S/ 23,900 thousand as expense for the year, which was approved at Board of Directors' Meeting held on December 12, 2016. The General Stockholders’ Meeting, held on December 19, 2016, approved the beginning of the dissolution and liquidation of Hualgayoc Holding S.A. As of December 31, this caption comprises:
Type of Interest Equity 2016 2015 In thousands of soles Relation interest
Hualgayoc Holding S.A.C. Subsidiary Common
shares 99.99% 2,994 - 23,900
- 23,900
188
2 0 1 6 I N T E G R A T E D R E P O R T
(Tra
nsla
tion
of F
inan
cial
Sta
tem
ents
orig
inal
ly is
sued
in S
pani
sh)
GO
LD F
IELD
S L
A C
IMA
S.A
. N
otes
to th
e Se
para
te F
inan
cial
Sta
tem
ents
D
ecem
ber
31, 2
016
and
2015
27
11.
Pro
per
ty, P
lan
t an
d E
qu
ipm
ent
The
mov
emen
t in
cos
t an
d co
rres
pond
ing
accu
mul
ated
dep
reci
atio
n of
pro
pert
y, p
lant
and
equ
ipm
ent
for
the
year
s en
ded
Dec
embe
r 31
is a
s fo
llow
s:
In t
hous
ands
of
sole
s La
nd
Bu
ildin
gs,
co
nst
ruct
ion
s an
d p
rem
ises
P
lan
t an
d
equ
ipm
ent
Veh
icle
s V
ehic
les
– Le
asin
g
Furn
itu
re
and
fix
ture
s IT
eq
uip
men
t V
ario
us
equ
ipm
ent
Fin
anci
ng
co
sts
Wo
rks-
in-
pro
gre
ss
Fin
al
bal
ance
Yea
r 20
16
C
ost
:
Ope
ning
bal
ance
35
,091
1,
744,
451
732,
774
2,93
3 7,
654
5,62
1 3,
249
66,5
16
175,
291
72,5
43
2,84
6,12
3 A
dditi
ons
- -
- -
2,97
3 -
- -
- 14
4,54
7 14
7,52
0 D
ispo
sals
-
(45,
440)
(5
64)
(602
) (1
66)
- -
(1,6
64)
- (8
09)
(49,
245)
Tr
ansf
ers
- 12
4,38
1 3,
803
287
- -
438
12,6
39
- (1
33,2
76)
8,27
2 Im
pairm
ent
of a
sset
s (3
,401
) -
- -
- -
- -
- -
(3,4
01)
As
of
Dec
emb
er 3
1, 2
016
31,6
90
1,82
3,39
2 73
6,01
3 2,
618
10,4
61
5,62
1 3,
687
77,4
91
175,
291
83,0
05
2,94
9,26
9
Dep
reci
atio
n
O
peni
ng b
alan
ce
- 55
1,47
4 30
9,14
5 2,
604
989
4,06
4 1,
938
20,5
30
78,0
78
- 96
8,82
2 A
dditi
ons
- 18
6,71
0 61
,813
13
1 2,
551
565
641
9,21
9 13
,777
-
275,
407
Dis
posa
ls
- (4
5,44
0)
(288
) (4
80)
(45)
-
- (1
,573
) -
- (4
7,82
6)
Impa
irmen
t of
ass
ets
- 10
9,59
1 35
,412
-
- -
- -
8,08
7 -
153,
090
As
of
Dec
emb
er 3
1, 2
016
- 80
2,33
5 40
6,08
2 2,
255
3,49
5 4,
629
2,57
9 28
,176
99
,942
-
1,34
9,49
3
Net
car
ryin
g a
mo
un
t 31
,690
1,
021,
057
329,
931
363
6,96
6 99
2 1,
108
49,3
15
75,3
49
83,0
05
1,59
9,77
6
Ope
ning
bal
ance
35
,091
1,
462,
496
725,
800
3,08
8 94
5,
621
7,47
8 40
,312
17
5,29
1 15
9,31
2 2,
614,
583
Add
ition
s -
- -
- 7,
560
- -
- -
211,
461
219,
021
Dis
posa
ls
- (8
,305
) (3
0,92
8)
(457
) -
- (5
,197
) (8
) -
(6,3
42)
(51,
237)
Tr
ansf
ers
- 29
0,26
0 37
,902
30
2 -
- 96
8 26
,212
-
(291
,888
) 63
,756
As
of
Dec
emb
er 3
1, 2
015
35,0
91
1,74
4,45
1 73
2,77
4 2,
933
7,65
4 5,
621
3,24
9 66
,516
17
5,29
1 72
,543
2,
846,
123
Dep
reci
atio
n
O
peni
ng b
alan
ce
- 40
1,15
8 26
3,31
5 2,
959
57
3,49
9 6,
644
12,9
76
65,9
46
- 75
6,55
4 A
dditi
ons
- 15
0,31
6 56
,818
10
2 93
2 56
5 49
1 7,
557
12,1
32
- 22
8,91
3 D
ispo
sals
-
- (1
0,98
8)
(457
) -
- (5
,197
) (3
) -
- (1
6,64
5)
As
of
Dec
emb
er 3
1, 2
015
- 55
1,47
4 30
9,14
5 2,
604
989
4,06
4 1,
938
20,5
30
78,0
78
- 96
8,82
2
Net
car
ryin
g a
mo
un
t 35
,091
1,
192,
977
423,
629
329
6,66
5 1,
557
1,31
1 45
,986
97
,213
72
,543
1,
877,
301
189
Go
ld
Fie
lds
L
a
Cim
a
S.
A.
(Translation of Financial Statements originally issued in Spanish) GOLD FIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
28
As of December 31, 2016 and 2015, works-in-progress mainly comprise the following: In thousands of soles 2016 2015
Construction of dam 22,556 22,307 Construction of waste storage 40,916 2,867 Water plant for dam 5,573 4,797 System for management of mining fleet 2,104 169 IT and communication equipment 1,970 182 Equipment for the process area 1,536 6,704 Gas station 1,682 11,687 Lubricant warehouse 973 856 Office cabin - 5,412 Water well drilling - 3,237 Others 5,695 -14,325
83,005 72,543
During 2016, fixed assets settled as work-in-progress were capitalized, including: Tailing dam for S/ 88,870 thousand, gas station for S/ 10,054 thousand, camp modules for S/ 8,200, among others. As of December 31, 2016, the Company does not hold guarantee assets. The depreciation expense for years ended December 31, 2016 and 2015 has been fully charged to the cost of production. The expense for impairment of assets for 2016 amounts to S/ 156,491 thousand. Impairment Loss During 2016 as a result of the decrease in the price level, the Company recognized impairment loss on assets of S/ 191,821, with a deferred tax benefit of S/ 56,587 having a net effect on profit or loss for the year of S/ 135,234. The calculation of impairment was determined based on the value in use, and was calculated by the cash generating unit - Cerro Corona Mining Unit. The cash flow projections included specific estimates for the remaining 7-years of life of the mine, the most relevant are: The copper price for US$ 2.8 per lb, and the gold price for US$ 1,300 per oz. Reduction of investment in sustainable capital. The pre-tax discount rate used was 4.8%. An impairment loss on property, plant and equipment for S/ 156,491, and on intangible asset for S/ 35,330, were recognized as follows:
In thousands of soles 2016 Land 3,401 Building and other constructions 109,591 Plant and equipment 35,412 Financing costs 8,087 Mining rights 350 Pre-operative and development expenses 24,625 Remediation and mine closure assets 6,358 Deferred stripping costs 3,982 Other intangible 15
191,821
190
2 0 1 6 I N T E G R A T E D R E P O R T
(Tra
nsla
tion
of F
inan
cial
Sta
tem
ents
orig
inal
ly is
sued
in S
pani
sh)
GO
LD F
IELD
S L
A C
IMA
S.A
. N
otes
to th
e Se
para
te F
inan
cial
Sta
tem
ents
D
ecem
ber
31, 2
016
and
2015
29
12.
Inta
ng
ible
Ass
ets
Cos
t an
d co
rres
pond
ing
accu
mul
ated
am
ortiz
atio
n ac
tivity
of
inta
ngib
le a
sset
s fo
r th
e ye
ars
ende
d D
ecem
ber
31, i
s th
e fo
llow
ing:
In
tho
usan
ds o
f so
les
Min
ing
rig
hts
Pre
-op
erat
ive
and
d
evel
op
men
t
exp
ense
s
Rem
edia
tio
n a
nd
m
ine
clo
sure
as
sets
S
oft
war
e D
efer
red
st
rip
pin
g c
ost
s
Res
earc
h a
nd
p
roje
cts
exp
ense
s
Yan
aco
cha
Ag
reem
ent-
3N
ro
ad
Oth
er
inta
ng
ible
Fi
nal
bal
ance
Yea
r 20
16
C
ost
:
Ope
ning
bal
ance
7,
010
499,
012
113,
543
10,8
92
86,2
70
10,5
47
26,4
67
325
754,
066
Add
ition
s -
- -
- -
943
- -
943
Dis
posa
ls
- (1
36)
- -
- (8
40)
- -
(976
) Tr
ansf
ers
- -
- 80
7 -
(9,0
79)
- -
(8,2
72)
Impa
irmen
t of
ass
ets
- -
- -
- -
- -
-
As
of
Dec
emb
er 3
1, 2
016
7,01
0 49
8,87
6 11
3,54
3 11
,699
86
,270
1,
571
26,4
67
325
745,
761
Dep
reci
atio
n:
O
peni
ng b
alan
ce
2,84
0 22
0,13
9 36
,804
10
,099
38
,406
-
9,25
5 14
5 31
7,68
8 A
dditi
ons
564
39,5
20
11,1
44
840
6,78
3 -
2,43
9 25
61
,315
D
ispo
sals
-
(69)
-
- -
- -
- (6
9)
Impa
irmen
t of
ass
ets
350
24,6
25
6,35
8 -
3,98
2 -
- 15
35
,330
As
of
Dec
emb
er 3
1, 2
016
3,75
4 28
4,21
5 54
,306
10
,939
49
,171
-
11,6
94
185
414,
264
Net
car
ryin
g a
mo
un
t 3,
256
214,
661
59,2
37
760
37,0
99
1,57
1 14
,773
14
0 33
1,49
7
Ope
ning
bal
ance
7,
036
484,
692
113,
543
10,2
50
86,2
70
88,2
18
26,4
67
325
816,
801
Add
ition
s -
- -
- -
1,04
7 -
- 1,
047
Dis
posa
ls
(26)
-
- -
- -
- -
(26)
Tr
ansf
ers
- 14
,320
-
642
- (7
8,71
8)
- -
(63,
756)
As
of
Dec
emb
er 3
1, 2
015
7,01
0 49
9,01
2 11
3,54
3 10
,892
86
,270
10
,547
26
,467
32
5 75
4,06
6
Dep
reci
atio
n
O
peni
ng b
alan
ce
2,35
0 18
3,60
6 27
,478
9,
496
32,4
33
- 7,
107
123
262,
593
Add
ition
s 49
6 36
,533
9,
326
603
5,97
3 -
2,14
8 22
55
,101
D
ispo
sals
(6
) -
- -
- -
- -
(6)
As
of
Dec
emb
er 3
1, 2
015
2,84
0 22
0,13
9 36
,804
10
,099
38
,406
-
9,25
5 14
5 31
7,68
8
Net
car
ryin
g a
mo
un
t 4,
170
278,
873
76,7
39
793
47,8
64
10,5
47
17,2
12
180
436,
378
191
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ld
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lds
L
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a
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A.
(Translation of Financial Statements originally issued in Spanish) GOLD FIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
30
Amortization expense for the years ended December 31, 2016 and 2015 has been fully allocated to cost of production. During 2016, the studies and advisories related to the construction of tailings dam and waste storage facility were transferred to property, plant and equipment item, amounting to S/ 8,272 thousand. The expense for impairment of intangible assets for the year 2016 amounts to S/ 35,330 thousand (note 11 - impairment loss). 13. Trade Accounts Payable As of December 31, this caption comprises the following: In thousands of soles 2016 2015
Invoices payable 106,422 152,207 Others 2,495 1,549
108,917 153,756
The trade accounts payable result mainly from the rendering of services related to the Company's operating activity, as well as the process of expansion of the mine. Such accounts payable are expressed in local and foreign currency, have current maturities, do not accrue interest and no guarantees have been given for these obligations. Bills payable include provisions for documents that have not yet physically arrived but have the support for their registration. As of December 31, 2016, they amount to S/ 78,802 thousand (2015: S/ 110,557 thousand). The carrying amount of trade accounts payable due to their maturity is similar to their fair value. 14. Other Accounts Payable As of December 31, this caption comprises the following:
In thousands of soles 2016 2015
Salaries, legal bonuses, vacations and taxes payable (a)
57,112 42,245
Income tax payable (b) 33,921 - Royalties, special tax on mining and Osinergmin 8,069 4,406 Complementary fund 2,273 1,776 Income tax withholding 1,510 1,237 Other taxes 1,041 1,043 Various accounts payable to related companies (note 7) 954 276 Fringe benefits provisions 695 673 Various 1 587
105,576 52,243
(a) The increase corresponds mainly to S/9 million for employees' profit sharing and S/6 million
for Bonuses payable.
192
2 0 1 6 I N T E G R A T E D R E P O R T
(Translation of Financial Statements originally issued in Spanish) GOLD FIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
31
(b) Tax payable is composed of the following:
In thousands of soles 2016 2015
Tax profit 463,181 353,683 Income tax payable (30%) 138,954 106,105 Payments on account (105,033) (123,543)
33,921 (17,438)
193
Go
ld
Fie
lds
L
a
Cim
a
S.
A.
(Tra
nsla
tion
of F
inan
cial
Sta
tem
ents
orig
inal
ly is
sued
in S
pani
sh)
GO
LD F
IELD
S L
A C
IMA
S.A
. N
otes
to
the
Sep
arat
e Fi
nanc
ial S
tate
men
ts
Dec
embe
r 31
, 201
6 an
d 20
15
32
15.
Oth
er F
inan
cial
Lia
bili
ties
D
urin
g D
ecem
ber
2014
, the
Com
pany
sig
ned
a lo
an f
rom
The
Ban
k of
Nov
a S
cotia
, whi
ch h
old
valid
as
of t
he c
lose
of
year
201
6. T
his
loan
is b
acke
d w
ith
flow
s of
sal
es o
f co
pper
con
cent
rate
and
has
a li
ne o
f cr
edit
guar
ante
ed f
or u
p to
US
$ 20
0 m
illio
n. A
s of
Dec
embe
r 31
, 201
6, t
he C
ompa
ny h
as u
sed
US
$ 82
m
illio
n of
the
line
of
cred
it, o
f w
hich
US
$ 40
mill
ion
wer
e di
sbur
sed
in J
anua
ry 2
016.
Li
kew
ise,
in 2
016
the
Com
pany
sig
ned
a le
asin
g ag
reem
ent
with
Ren
ting
S.A
., w
hich
is c
lass
ified
as
a fin
ance
leas
e.
The
bala
nce
and
stru
ctur
e of
the
loan
tha
t, a
s of
Dec
embe
r 31
, 201
6, a
mou
nts
to U
S$
82 m
illio
n an
d ot
her
finan
cial
obl
igat
ions
com
pris
e:
In t
hous
ands
of s
oles
C
lass
of
In
tere
st
T
ota
l C
apit
al
Inte
rest
Cre
dit
or
Ob
ligat
ion
C
urr
ency
ra
te
Mat
uri
ty
2016
20
15
2016
20
15
2016
20
15
Loan
Lo
an
US
$ LI
BO
R
+1.
625%
D
ec 2
017
276,
429
143,
220
275,
520
143,
220
909
-
Ren
ting
S.A
. Fi
nanc
e le
ase
U
S$
7.92
%
Sep
201
9 8,
413
8,44
0 7,
615
7,36
5 79
8 1,
075
Ban
co d
e C
rédi
to d
el P
erú
Fina
nce
leas
e U
S$
4.54
%
Jul 2
016
- 19
-
19
- -
28
4,84
2 15
1,67
9 28
3,13
5 15
0,60
4 1,
707
1,07
5
Less
: Cur
rent
por
tion
(279
,624
) (1
45,6
03)
No
n-C
urr
ent
5,21
8 6,
076
As
part
of
the
cont
ract
sig
ned,
the
Com
pany
sha
ll co
mpl
y w
ith f
inan
cial
com
mitm
ents
, whi
ch a
re m
easu
red
quar
terly
. Fai
lure
to
com
ply
with
the
m g
ener
ates
a
situ
atio
n of
dis
cret
iona
ry e
nfor
ceab
ility
by
the
lend
er.
Add
ition
ally
, as
indi
cate
d in
the
tabl
e ab
ove,
the
bank
loan
with
The
Ban
k of
Nov
a S
cotia
mat
ures
in D
ecem
ber 2
017;
how
ever
, as
part
of
a co
rpor
ate
stra
tegy
, th
e C
ompa
ny in
tend
s to
ren
ew t
he lo
cal l
oan
whi
ch h
as a
ver
y co
mpe
titiv
e in
tere
st r
ate
com
pare
d to
the
mar
ket.
194
2 0 1 6 I N T E G R A T E D R E P O R T
Translation of Financial Statements originally issued in Spanish GOLDFIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
33
Finance commitments are the following: i. To maintain a consolidated EBITDA ratio in relation with the consolidated net finance charges
not exceeding a 5 to 1 ratio. ii. The ratio of loans related to consolidated EBITDA should not exceed a 3 to 1 ratio. iii. The value of the consolidated tangible net equity shall be equal or higher than
S/ 1,100,000.000. As of December 31, 2016, the Company has satisfactorily fulfilled all the ratios afore mentioned. The present value of finance leases payments is as follows:
In thousands of soles
Future minimum
lease payments Interest
Present value of
minimum lease payments
2016 2015 2016 2015 2016 2015
Less than one year 3,195 2,383 471 499 2,724 1,884 1 - 5 years 5,218 6,076 327 576 4,891 5,500
8,413 8,459 798 1,075 7,615 7,384
Fair value of financial liabilities is as follows: In thousands of soles 2016 2015
Less than one year 279,624 145,603 1 - 5 years 5,218 6,076
284,842 151,679
16. Provisions As of December 31, this caption comprises the following:
In thousands of soles
Provision for environmental
remediation Share-based
payment Long-term
incentive plan Total Balance as of January 1, 2015 145,071 5,823 3,665 154,559 Updating of the Mine Closure Plan Additions (deductions) during the period - (5,306) 3,160 (2,146) Finance cost 22,151 - - 22,151
Balance as of December 31, 2015 167,222 517 6,825 174,564
Updating of the Mine Closure Plan Additions (deductions) during the period - (490) 6,034 15,598
Finance cost 10,055 - - -
Balance as of December 31, 2016 177,277 27 12,859 190,162
195
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Translation of Financial Statements originally issued in Spanish GOLDFIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
34
A. Provision for environmental remediation On October 14, 2004, Law 28090 became effective to regulate obligations and procedures that holders of mining activities must comply regarding the preparation, presentation, and implementation of the Mine Closure Plan as well as implementation of the corresponding environmental guarantees. This Law and its amendments established that holders of operating mining units shall present to competent authorities the Mine Closure Plan within a maximum term of one year beginning on the effective date of the Law. Supreme Decree 033-2005-EM, dated August 15, 2005, approved the Regulation for Mine Closure Plan. In conformity with this obligation, the Company submitted to the Ministry of Energy and Mines the Environmental Impact Study of Mina Cerro Corona, on December 4, 2006, which was approved on June 4, 2008 by means of RD 131-2008-MEM/AAM. In compliance with this regulation, the Company has submitted to the Ministry of Energy and Mines standby letters of credit since year 2008, and guarantees that have been updated and renewed every year. In January 2016, the standby letters of credit of US$ 31.5 million issued by Banco de Crédito del Perú with maturity in January 2017 was renewed. In order to fulfill the requirements of the Implementation rules, as of December 31, 2016, the Company has determined that the provision for mine closure of the mining unit amounts to S/ 177,277 thousand (2015: S/ 167,222 thousand). B. Long-term incentive plan In 2014, the Parent Company implemented a variable long-term compensation plan based on the results of Gold Fields Limited (GFL) for certain officers of the corporation. The plan seeks to attract, retain, motivate and reward participating employees with outstanding performance and that contribute to sustainable long-term financial results, to boost stockholder value. Major features of such Plan are the following: The period to evaluate is 3 years; Two corporate performance conditions for the period to be evaluated must be complied: Cash
Flow Margin and Total Return to Stockholders; The long-term incentive will be offered to employees once a year, in March, and will be paid
according to the performance of these indicators; The incentive is calculated based on a percentage of annual salary, position level and individual
performance; The incentive is allocated and paid in local currency. The long-term plan replaced the previous share -based scheme during the years 2014 and 2015 remaining a balance payable during the years 2017 and 2018. The aforementioned scheme was in force for the years 2014 and 2015, since in 2016 the Company returned to the share-based compensation plan.
196
2 0 1 6 I N T E G R A T E D R E P O R T
Translation of Financial Statements originally issued in Spanish GOLDFIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
35
17. Deferred Income Tax, Liability The composition and activity of this caption for the years 2016 and 2015 is as follows:
In thousands of soles
As of December 31,
2015
Credit (debit) to the
statement of income
Adjustment from change
in rate
As of December 31,
2016
Deferred assets Depreciation of property, plant, and equipment 389,168 40,826 (2,139) 427,855 Share-based compensation plan 4,663 (429) - 4,234 Amortization of intangibles (b) 94,110 (78,960) 514 15,664 Unpaid mining royalties with provisions 4,875 3,194 - 8,069 Other temporary items 869 78 - 947
Total deferred assets 493,685 (35,291) (1,625) 456,769
Deferred liabilities Provision for environmental remediation (a) 69,285 (145,799) 296 (76,218) Amortization of development and pre-operating expenses
(163,297) 59,225 1,343 (102,729)
Pre-operative and development expenses (214,872) (53,778) - (268,650) Properties, plant and equipment (1,202,994) 364,319 4,173 (834,502) Embedded derivative (35,480) 39,677 - 4,197
Total deferred liabilities (1,547,358) 263,644 5,812 (1,277,902)
Taxable base (1,053,673) (821,133)
Deferred income tax liability (30%)/(29.5%) (316,102) (242,234)
(a) Provision for environmental remediation adjustment whose main component relates to the
decommissioning works. These works will be executed, for the most part, when the Company is no longer performing productive operations; therefore management has considered that the expenses will not be deducted for the income tax purposes.
(b) It corresponds to intangible assets mainly made up of pre-operating expenses that were
amortized for tax purposes until year 2015 (8 years). Credit to results for deferred income tax for year ended December 31 was as follows: In thousands of soles 2016 2015
Total at end of year 242,235 316,102 Total at beginning of year (316,102) (56,431)
(Expense) income of the year (73,867) 259,671
197
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Translation of Financial Statements originally issued in Spanish GOLDFIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
36
18. Issued Capital As of December 31, 2016 and 2011, authorized, subscribed and paid-in capital, according to the Company’s bylaws and amendments is represented by 1,247,502,619 common shares with a par value of S/ 0.91 each. Balance of this item includes S/ 3,050 thousand, related to the capital modification at constant currency. At General Stockholders' Meeting held on October 26, 2015, it was agreed to reduce the capital stock of the Company by S/ 112,275 thousand through the refund to the shareholders of the amortized par value, in accordance with article 216.1 of the Companies Act; thus the capital stock decreased from S/ 1,247,503 thousand to S/ 1,135,227 thousand, represented by 1,247,502,619 common shares. As of December 31, 2016, the shareholding structure of the Company is as follows:
Percentage of individual interest in capital
Number of stockholders
Total percentage of interest
Up to 0.02 113 0.22 0.03 to 0.4774 - 0.00 0.4775 to 99.0334 1 99.78
114 100.00
19. Investment Shares As of December 31, 2016, this caption comprises 171,065,601 investment shares with a par value of S/ 0.91 (91/100 soles) per share. Balance of this item includes S/ 426 thousand, related to the capital modification at constant currency. At General Stockholders' Meeting held on October 26, 2015, it was agreed to reduce the investment shares by S/ 15,396 thousand through the refund to the shareholders of the amortized par value, in accordance with article 216.1 of the Companies Act; thus the capital stock decreases from S/ 171,066 thousand to S/ 155,670 thousand, represented by 171,065,601 common shares. Holders of investment shares are entitled to profit as provided in the Company’s by-laws and Law 27028 Law replacing labor shares by investment shares. In accordance with applicable legislation, investment shares grant their holders the power to participate in dividend distribution, make contributions in order to maintain their existing proportion in the investment share account in case of capital increase by means of new contributions, increase the investment share account by means of capitalization of equity accounts, redeem their shares in any of the cases foreseen by the law, and participate in the distribution of the equity balance in the event of the Company’s liquidation. Investment shares do not confer access to the Board of Directors or the General Stockholders’ Meeting. As of December 31, 2016, the shareholding structure in the investment portfolio is the following:
Percentage of individual Number of Total Interest in capital stockholders percentage of interest
Up to 0.02 1,812 2.23% 0.03 to 0.9694 - 0.00% 0.9695 to 97.77 1 97.77%
1,813 100.00%
198
2 0 1 6 I N T E G R A T E D R E P O R T
Translation of Financial Statements originally issued in Spanish GOLDFIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
37
20. Other Capital Reserves Pursuant to the Companies Act, the Company is required to allocate 10% of its net annual income to a legal reserve, after deducting accumulated losses. This allocation is required until the reserve equals the fifth part of paid-in capital. The legal reserve must be used to compensate losses in the absence of non-distributed earnings or non-restricted reserves, and must be restored with future earnings. Legal reserve may also be capitalized, but it shall be subsequently restored. As result of the capital reduction in 2015, the legal reserve reached the limit of the fifth part of the capital in accordance to the above mentioned Companies Act, transferring S/ 2,843 thousand to other additional reserve, thus the accumulated legal reserve amounts to S/ 227,656 thousand. 21. Other Equity Reserves Share premium The debtor's balance of this caption represents a higher value paid in the acquisition of the Company's shares with relation to the par value, as shown below;
In soles No. of shares Repurchase
price Total Common (note 18) 9,362,360 2.48 23,219 Investment (note 19) 4,720,977 2.48 11,709 34,928
Less: face value 14,083
Share premium 20,845
Additional reserve As result of the capital reduction in 2015 mentioned in note 20, S/ 2,843 thousand was transferred to additional reserves. Share-based compensation payments As of December 31, 2016, this balance includes benefits to the Company’s workers such as share-based payments for S/ 64,036 thousand. In 2016, the Parent Company returned to 2012 share-based plan of Gold Fields Limited (GFL) for certain Company's officers with certain modifications (Gold Fields Limited 2012 Share Plan: ( Gold Fields Limited 2012 Share Plan: 2016 Conditional Performance Share Award”). The plan seeks to attract, retain, motivate and reward these employees aligning their interests with those of the holders of the Parent Company’s shares. Major features of such Plan are the following:
The period to evaluate is 3 years; The participation options in the shares of GFL will be offered to the employees once a year,
during March; The option may be exercised in the third year of assignment provided that three performance
conditions be met at the corporate level for the period to evaluate: Cash Flow Margin, Total Return to Stockholders, and Total Return to Stockholders Alternate.
These scheme replaces the previous scheme: "Long-term incentive plan".
199
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Translation of Financial Statements originally issued in Spanish GOLDFIELDS LA CIMA S.A. Notes to the Separate Financial Statements December 31, 2016 and 2015
38
22. Accumulated Results As per delegation conferred by the General Stockholders' Meeting on September 27, 2010, the delegation conferred by the Annual Mandatory Stockholders' Meeting, held on March 31, 2015, and the Policy for Distribution of Dividends of the Company approved by the Annual Mandatory Stockholders’ Meeting dated March 30, 2011, the Board of Directors was fully empowered to agree on the distribution of dividends with charge to accumulated profits in favor of holders of common and investment shares. In this regard, on September 15, 2016, the Board of Directors agreed to approve the distribution of dividends in the amount of S/ 170,228,186.40, charged to the Company's distributed accumulated profits corresponding to oldest fiscal years, according to the following detail:
Corporate
body
Date of
agreement Definition
Distributed
amount
Date of
dividend
payment
Board of Directors
15.09.2016 On account of the accumulated profit of prior periods
S/ 170,228,186.40 10-20-2016
23. Workers’ Profit Sharing In line with current legislation, the Company’s workers are entitled to a profit sharing plan to be computed at 8% of net income. This profit sharing is considered as deductible expenses for income-tax calculation purposes. In year 2016, the Company determined current workers' profit sharing of S/ 40,277 thousand (2015: S/ 30,755 thousand) which was recorded in the following items:
In thousands of soles 2016 2015
Cost of sales (note 26) 29,561 22,319 Administrative expenses (note 28) 1,563 1,193 Selling expenses (note 27) 544 357 Inventory 6,849 5,616 Properties, plant and equipment 1,760 1,270
40,277 30,755
As of December 31, 2016, the workers' profit sharing payable amounts to S/ 40,200 thousand (2015: S/ 30,741 thousand) which is included in 'remunerations and profit sharing payable'. The difference of S/ 77 thousand corresponds to advances for worker's participation paid from August to December.
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24. Tax Matters Tax rates A. The Company is subject to Peruvian tax regime. As of December 31, 2016 and 2015,
corporate income tax is calculated on the basis of the net taxable income determined by the Company at a rate of 30%.
By means of Legislative Decree 1261, published on December 10, 2016 and effective January 1, 2017, the rate applicable to corporate income was modified to 29.5%. Thus, the rates applicable to Corporate Income Tax for the last taxable years are as follows: Until year 2014 30.0% For years 2015 - 2016 30.0% For year 2017 onwards 29.5% The Decree also established the modification of the income tax rate applicable to dividend distribution and any other form of profit distribution to 5%, in the case of profits generated and distributed since January 1, 2017. Accordingly, the Company has reestimated the deferred tax considering the period of reversal of the temporary differences, according to the new rates of corporate income tax above described. This has generated a decrease in deferred tax liability of S/ 4,187 thousand; an amount that was debited to the profit or loss of 2016. For years 2016 and 2015, the income tax rate for dividend distribution and any other form of profit distribution applicable to legal persons not domiciled in Peru and natural persons is 6.8%. In summary, the rates applicable to income tax on dividends for the last taxable years are as follows: Until year 2014 4.1% For years 2015 - 2016 6.8% For year 2017 onwards 5.0% B. In accordance with current Peruvian tax legislation, non-domiciled individuals only pay taxes
for its Peruvian source income. Thus, in general terms, revenues obtained by non-domiciled individuals from the services rendered in the country shall be subject to a 30% income tax on gross income, provided that no double tax treaties are applicable. Concerning the technical assistance or digital services rendered by non-domiciled individuals to domiciled individuals, regardless of the place where the service is rendered, they shall be subject to a 15% and 30% income tax rate on gross income, respectively. Technical assistance will be subject to a 15% rate, provided that Income Tax Law requirements are met.
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C. Royalties and special tax on mining On September 29, 2011, the Peruvian government amended the mining royalty system, effective since October 1, 2011. According to this amendment, mining royalties for metallic and non-metallic mining activities of holders or assignees of mining concessions shall be quarterly settle. It shall be determined using the higher of: (i) the amount obtained by applying a calculation ladder of the marginal rates to be applied on the quarterly operating profit for certain items established in the regulation; and (ii) 1% of net sale of the quarter. These mining royalty payments are deductible for income tax determination purposes of the year in which payments are made. D. Additional retirement fund for miners Supreme Decree 006-2012-TR issued on July 9, 2011, and Law 29741 created the Additional Retirement Fund for Mining, Metallurgic and Steel industry (FCJMMS, for its Spanish acronym) to grant a supplementary and additional payment for retirement, disability and survival costs to mining, metallurgic and steel industry workers. Under this law, covered workers and companies shall make a contribution of 0.5% of the Company's annual income before income tax. As of December 31, 2016, the Company has calculated contributions to the Additional Retirement Fund for Miners amounting to S/ 2,273 thousand (2015: S/ 1,776 thousand). E. Income tax determination The Company computed its taxable base for the years ended December 31, 2016 and 2015, and determined current income tax of S/ 138,954 thousand and S/ 106,105, respectively. Income tax expense comprises: In thousands of soles 2016 2015
Current 138,954 106,105 Tax Authorities assessment (a) 10,545 - Deferred (note 17) (73,867) 259,671
75,632 365,776
(a) In exercising its powers, the Tax Authorities reviewed in previous years the income tax return
for the taxable years 2009, 2010 and 2011. The total amount resulting from these assessments was S/ 10,545 and was reclassified in 2016 to the Income Tax account.
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F. The reconciliation of the tax rate and the effective tax rate is as follows:
In thousands of soles 2016 2015
(Loss) profit before income tax (23,567) 100.00% 73,207 100.00% Income tax (theoretical rate) (7,070) 30.00% 21,962 30.00% Tax effect on additions and deductions: - 28.50% - 251.52% Permanent difference: Impairment of assets 57,546 - 265,711 - Present value of provision for closure of mine 1,708 - 1,774 - Other assumed expenses 2,009 - 6,314 - Share-based payment - provision 3,856 - 1,833 - Social development project 4,564 - 4,594 - Other non- deductible expenses 656 842 Nondeductible VAT 288 - 988 - Derecognition of equipment - - 14,248 - Others 12,075 - 47,510 -
75,632 58.50% 365,776 281.52%
The variation of the effective rate with respect to the previous year is due to the increase in earnings before income tax. As a result, income tax has risen by 129% compared to fiscal year 2015. Temporary tax on net assets The Company is subject to temporary tax on net assets whose taxable base is composed of the prior period adjusted net asset value less depreciations, amortizations, legal cash reserve, and specific provisions for credit risk. The tax rate is 0.4% for years 2016 and 2015 and is applied to the amount of net assets exceeding S/ 1 million. It may be paid in cash or in nine consecutive monthly installments. The paid amount can be used as a credit against payments on account of Income Tax General Regime for taxable periods from March to December of the fiscal period for which the tax was paid until maturity date of each of the payments on account, and as a credit for regularization payments of income tax of corresponding taxable period. In the event a remaining balance is not applied, its refund could be requested. The Company calculated the ITAN for year 2016 for S/ 11,359 thousand (2015: S/ 12,093 thousand).
Tax on financial transactions Tax on Financial Transactions (ITF) for fiscal periods 2016 and 2015 was fixed at the rate of 0.005%. This tax is applied on charges and credits in bank accounts or movements of funds made through the financial system, unless the account is tax-exempt. Transfer pricing For income tax purposes, transfer pricing for transactions carried out with economically-related parties, and with companies domiciled in territories with low or null taxation, shall be supported with documentation and information about the valuation methods used, and the criteria considered, for the pricing. Until fiscal year 2016, the formal obligations of Transfer Pricing were the presentation of a Transfer Pricing Sworn Statement and Technical Study.
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By means of Legislative Decree 1312, published on December 31, 2016 and effective January 1, 2017, the following formal obligations were established to replace the former ones: (i) presentation of a Local File (if accrued income exceeds 2,300 tax units (UIT, for its Spanish acronym), (ii) presentation of a Master File (if accrued income of the group exceeds 20,000 UIT) and (iii) presentation of a Country-by-Country Reporting. The presentation of the Master File and the Country-by-country reporting will become obligatory in year 2018. Likewise, the Decree also established that intra-group services with low added value shall not have a margin greater than 5% of their costs. Concerning the services rendered between related parties, taxpayers must comply with the benefit test and provide the documentation and information under specific conditions for the deduction of costs or expenses. Legislative Decree 1116 established that Transfer Pricing Standards are not applicable to Sales Tax (IGV, for its Spanish acronym). Tax assessment The tax authorities are entitled to audit and, if applicable, to correct the income tax calculated by the Company within the four years following the year of the tax return filing. The Company's income and sales tax returns for the years 2013 through 2016 are open for review by the Peruvian tax authority. Income tax and sales returns for years 2010 and 2012 were reviewed by the tax authorities and returns for year 2011 is under review. Due to the possible varied interpretations of the current legal regulations by the tax authorities, it is not possible to determine, to date, whether a future tax audit will result or not in liabilities for the Company; therefore, any major tax or surcharge that might arise from eventual tax audits would be applied to profit or loss of the period in which it is determined. However, it is the opinion of the Company’s management and its legal advisors that, any possible additional settlement of taxes would not be significant for the financial statements as of December 31, 2016 and 2015. Tax regime applicable to sales tax Legislative Decree 1347, published on January 7, 2017, and effective July 1, 2017, established the reduction of one percentage point in the Sales Tax, provided that the goal of annual sales tax collection as of May 31, 2017 is reached, net of internal refunds of 7.2% of GDP. In other words, if the aforementioned is met, the Sales Tax rate (including the municipal tax) will be reduced from 18% to 17%.
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25. Income from Ordinary Activities As of December 31, this caption comprises the following:
In thousands of soles 2016 2015 Sale of concentrates: In the country 160,181 25,478 Aboard 896,739 993,216
1,056,920 1,018,694
Price adjustment (*) 34,082 (84,782)
1,091,002 933,912
(*) Increase in price adjustment is basically generated by the increase of the price during the period, compared to previous year:
2016 2015 Gold (US$ / oz) 1,146 1,064 Copper (US$ / tn) 5,501 4,702
26. Cost of Sales As of December 31, this caption comprises the following:
In thousands of soles 2016 2015
Opening inventory of work-in-process 110,766 114,070 Opening inventory of finished products 30,098 18,470 Production cost (*) 766,944 711,635 Final inventory of work-in-process (110,581) (110,766) Final inventory of finished products (note 9) (33,694) (30,098)
763,533 703,311
(*) Production cost mainly comprises the following: In thousands of soles 2016 2015
Extraction and processing costs 284,418 277,634 Depreciation (note 11) 275,407 228,913 Amortization (note 12) 61,315 49,128 Costs for safety, environment and community affairs 41,764 44,531 Workers’ profit sharing (note 23) 29,561 22,319 IT & Communications 10,516 9,133 Camp expenses 9,713 9,737 Other (**) 54,250 70,240
766,944 711,635
(**) Mainly includes logistics costs, storage, operating support areas and sundry provisions. The cost of production includes the cost of personnel for year 2016 in the amount of S/ 87,124 thousand (2015: S/ 78,584 thousand), which is distributed in this item.
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27. Selling Expenses As of December 31, this caption comprises the following:
In thousands of soles 2016 2015
Third party services 37,360 38,429
Personnel expenses 1,154 1,261 Workers’ profit sharing (note 23) 544 357 Taxes 84 160 Various charges for operations 283 101 Others 251 224
39,676 40,532
(*) Third party services include mainly the following:
In thousands of soles 2016 2015
Concentrate transportation (from mine to Salaverry port) 20,252 17,230 Concentrate export freight 11,401 14,847 Sample analysis service 1,512 1,108 Other (**) 4,195 5,244
37,360 38,429
(**) Mainly include shipping expenses. 28. Administrative Expenses As of December 31, this caption comprises the following: In thousands of soles 2016 2015
Third party services 13,688 6,764
Personnel expenses 10,339 4,692 Workers’ profit sharing (note 23) 1,563 1,193 Taxes 540 137 Others 271 183
26,401 12,969
(*) It includes mainly the provision for the long-term compensation plan. In 2016, it amounts to S/ 12,854 thousand (2015: S/ 6,109 thousand).
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29. Other Operating (Expenses) Income As of December 31, this caption comprises the following: In thousands of soles 2016 2015
Other operative expenses: Acquisition of fuel (29,165) (30,858) Royalties and special tax on mining (16,460) (17,294) Socio-environmental management (29,553) (27,069) Net cost allocated to property, plant and equipment and investments (a)
(26,283) (47,386)
Contributions for mining sector regulation (3,000) (3,512) Impairment of inventories (note 11) (191,821) - Other expenses (1,594) (2,728)
(297,876) (128,847)
Other operating income Sale of fuel 29,420 30,590 Sale of fixed and intangible assets 196 14,365 Other income 2,965 3,888
32,581 48,843
(265,295) (80,004)
(a) In 2016, investments in Hualgayoc Holding were recorded in profit or loss for S/ 23,900
thousand and the investments in Consorcio Transportadora Salaverry for S/ 184 thousand. Additionally, unviable projects for S/ 1,649 thousand were written off.
30. Financial Income (Cost) As of December 31, this caption comprises the following:
In thousands of soles 2016 2015 Interest income 286 568 286 568
Loan interest and expenses (10,662) (6,861) Other finance charges (6,349) (9,955)
(17,011) (16,816)
Gain on exchange difference 9,810 53,585 Loss on exchange difference (12,748) (61,226)
(2,938) (7,641)
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31. Derivative Financial Instruments A. Embedded derivative for price variations in concentrate sales contracts as explained in note 3,
risk exposure for gold and copper prices variation is considered as an embedded derivative and is separated from the commercial agreement.
Metal Quantity Unit Quotations period 2016
Quotations in thousands US$ S/
Provisional Future Fair
value 2016 Copper 6,269 Mts Jan. - April 29,403 28,987 (18,757) Gold 34,696 Oz Jan. - April 40,009 38,101 14,570
(4,187)
2015 Copper 4,045 Mts Jan. - April 20,723 20,310 (19,600) Gold 23,377 Oz Jan. - April 27,425 27,232 (6,241)
(25,841)
32. Subsequent Events After December 31, 2016, no significant subsequent events arose affecting the financial statements or requiring disclosure. 33. Mineral Reserves (Unaudited) As of December 31, this caption comprises the following:
2016 2015
Proven sulphide ore reserve: Copper (M lbs) 461 527 Copper (converted to gold equivalent in 000 oz) 1,064 1,216 Gold (000 oz) 1,384 1,527 Total gold equivalent in 000 oz 2,447 2,743 Probable sulphide ore reserve: Copper (M lbs) 73 96 Copper (converted to gold equivalent in 000 oz) 169 221 Gold (000 oz) 159 230 Total gold equivalent in 000 oz 328 451 Total proven and probable sulphide ore reserve:
Gold equivalent in 000 oz 2,775 3,194
000 oz = thousands of ounces M lbs = millions of pounds
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Annexes• Gold Fields La Cima Organizational Chart
• Licenses and Permits
• GRI Table of Contents 9G
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Gold Fields La Cima 2016 Organizational Chart
Occupational Health & Safety Manager
Luis Apaza
Environmental Corp. Manager
Luis Alberto Sánchez
Mineral Resources Manager
Eddie García
Security Sub Manager
Jorge Zapata
Corporate Affairs & Sustainable Develop. VP
Miguel Incháustegui
Sustainable Develop. Corp. Manager
Jaime Gálvez
Community Relations Manager
Jorge Luis Montero
Communication & PR Corp. Manager
Rafael Sáenz
Corporate
Development VP
Alberto Cárdenas
Legal VP
Juan José Granda
Legal Sub-manager
Patricia Kosa
Strategic
Planning Chief
Carsten Wong
Legal Sub-manager of Regulatory and
Compliance
Inés Nuñovero
Legal & Land
Sub-manager
Ernesto Reyes
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Executive Vice President,
General Manager
Luis
Rivera
Operations VP
Manuel Díaz
Operations Manager
Ronald Diaz
Process Manager
Pedro Páucar
Compensations & HR Manager
Susana Carlín
Contracts & Purchasing Manager
Jorge García
Accounting & Finance Manager
Rafael Caballero
Mine Manager
Enrique Paredes
Compensations & HR Manager
Paul Schmidt
Warehouse Manager
Ernesto Silva
Internal Controller
Cecilia Vásquez
Geology & Exploration Manager
Paul Gómez
Talent Sub Manager
Daniela Martínez
Operation Manager-Salaverry
Jorge Balanda
IT Sub Manager
Renzo Cobos
Projects Manager Operations
Alan Angles
Tailings & Water Resources Manager
Javier Gutiérrez
Human Resources VP
Verónica Valderrama
Finance VP
Jorge Redhead
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A. Environmental Impact Assessment and its amendments
• Environmental Impact Assessment (EIA) approval awarded
by the Ministry of Energy and Mines by Resolution No.
514-2005-MEM/AAM dated December 2, 2005.
• Amendment approval of EIA granted by the Ministry
of Energy and Mines by Resolution No. 276-
2007-MEM/AAM dated September 5, 2007.
• Second Amendment approval of EIA by the
Ministry of Energy and Mines by Resolution No.
142-2008-MEM/AAM dated June 13, 2008.
• Third amendment approval of EIA granted by the
Ministry of Energy and Mines by Resolution No.
021-2010-MEM/AAM dated January 20, 2010.
• Fourth amendment approval of EIA granted by the
Ministry of Energy and Mines by Resolution N ° 287-
2011-MEM/AAM dated September 16, 2011.
• Fifth Amendment approval of EIA granted by the
Ministry of Energy and Mines by Resolution No.
075-2012-MEM-AAM dated March 12, 2012.
• Sixth amendment approval of EIA granted by the
Ministry of Energy and Mines by Resolution N °
313-2013-MEM-AAM dated August 13, 2013.
• Approval of the technical supporting report for "Crushing,
Grinding, Ore Hauling and Blasting Processes Optimization
of Cerro Corona’s Environmental Impact Assessment"
granted by the Ministry of Energy and Mines by Resolution
N ° 149-2014-MEM-DGAAM dated March 26, 2014.
• Approval of the technical supporting report for "Components
Optimization and Operational Changes" granted by
the Ministry of Energy and Mines by Resolution N °
627-2014-MEM-DGAAM dated December 29, 2014.
• Approval of the technical supporting report of the
"Optimization management of organic soil and pebbles
crusher replacement" project, approved by Directorial
Resolution N° 256-2015-MEM-DGAAM dated June 24, 2015.
• Approval of the technical supporting report of the
“Modification and relocation of auxiliary facilities”
project, approved by Directorial Resolution No. 479-
2015- MEM-AAM dated December 14, 2015.
Licenses and PermitsGold Fields La Cima ensures compliance with Peruvian regulations, corporate standards and commitments in its Environmental Impact Assessment (EIA).
Therefore, La Cima has processed and obtained licenses and permits to run the construction and operation of the Cerro Corona mining unit. Licenses and most relevant permissions obtained by La Cima up to December 31, 2016 are the following:
• Approval of the technical supporting report of
the “Contingency measures for the temporary
storage of concentrate and organic soil”
project, approved by Directorial Resolution N°
077-2016-MEM-DGAAM dated March 14, 2016.
• Seventh Amendment approval of EIA granted by
the Ministry of Energy and Mine by Resolution N°
093-2016-MEM-DGAAM dated March 30, 2016.
• Approval of the technical supporting report of the
“Technological improvements in Cerro Corona Mining
Unit” project, approved by Directorial Resolution N°
0112-2016-SENACE/DCA dated November 15, 2016.
B. Mine Closure Plan
• Mine closure plan approval of Cerro Corona Mining
Project granted by the Ministry of Energy and Mines by
Resolution No. 131-2008-MEM/AAM dated June 4, 2008.
• Frist amendment approval of the Mine Closure
Plan of Cerro Corona Mining Project granted by
the Ministry of Energy and Mines by Resolution
200-2010- MEM/AAM dated June 9, 2010.
• Second amendment approval of the Mine Closure
Plan of Cerro Corona Mining Project granted by
the Ministry of Energy and Mines by Resolution No.
184- 2011-MEM-AAM dated June 16, 2011.
• Third amendment approval of the Mine Closure
Plan of Cerro Corona Mining Project granted by
the Ministry of Energy and Mines by Resolution N°
061- 2013-MEM-AAM dated February 26, 2013.
• Fourth amendment approval of the Mine Closure
Plan of Cerro Corona Mining Operation granted by
the Ministry of Energy and Mines by Resolution N°
522- 2014-MEM/DGAAM dated October 14, 2014.
C. Processing Plant
• Permit for the processing plant and tailings dam construction
issued by the Ministry of Energy and Mines by resolution
No. 116-2006-MEM-DGM/V dated January 31, 2006.
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• Concession approval and plant operation in favor of Cerro
Corona, authorization by 18,600 tons per day, by Resolution
No. 1005-2008-MEM/DGM dated August 26, 2008.
• Modification approval of Cerro Corona’s installed capacity
of benefit plant to expand the installed capacity from
18,600 MT/day to 22.320 MT/day and authorizing the
element of 11 additional components, by Resolution
No. 0239- 2015-MEM-DGM/V dated June 10, 2015.
• Approval of construction and operation verification
of dam 3,720 MASL elevation of the tailings deposit
from Cerro Corona’s processing plant, by Resolution
No. 278-2010-MEM-DGM/V dated July 13, 2010.
• Approval of construction and operation verification
of 3.740 MASL elevation of tailings deposit boot dam
from Cerro Corona’s processing plant, by Resolution
No. 246-2011-MEM-DGM/V dated July 19, 2011.
• Approval of construction and operation verification
of 3,746 MASL from boot dam of tailings deposit of
Cerro Corona’s processing plant, by Resolution No.
367-2011-MEM-DGM/V dated October 7, 2011.
• New timetable approval for the tailings dam
construction of Cerro Corona by Resolution No 367-
2011-MEM.DGM/V dated October 7, 2011.
• Approval of construction and operation verification of dam
3,747.5 MASL elevation from boot dam of tailings deposit
of Cerro Corona’s processing plant, by Resolution No
196-2012-MEM-DGM/V dated June 13, 2012, and the report
No. 204-2012-MEM-DGM-DTM/PB from the same date.
• Approval of construction and operation verification of 3,750
MASL height from boot dam of Cerro Corona’s tailings
deposit processing plant, by Resolution No 311-2012-MEM-
DGM/V dated September 24, 2012, and the report No.
324- 2012-MEM-DGM-DTM/PB dated September 21, 2012.
• Approval of construction and operation verification
of 3,755 MASL height from boot dam of Cerro
Corona’s tailings deposit of processing plant, by
Resolution N° 071-2013-MEM-DGM/V dated September
19, 2013, and the report N ° 048- 2013-MEM-
DGM-DTM/PB dated February 18, 2013.
• Approval of construction and operation verification
of 3,758 MASL height from boot dam of Cerro
Corona’s tailings deposit of processing plant, by
Resolution N° 423-2013-MEM-DGM/V dated November
11, 2013, and the report N° 348- 2013-MEM-
DGM-DTM/PB dated November 11, 2013.
• Approval of construction completion verification of the
tailings dam to 3.761 MASL height and auxiliary facilities
of Cerro Corona’s processing plant, by Resolution
No. 0132-2014-MEM-DGM/V dated April 11, 2014.
• Approval of construction completion verification
of the tailings dam to 3.764 MASL height of Cerro
Corona’s processing plant, by Resolution No. 0518-
2014- MEM-DGM/V dated November 12, 2014.
• Verification approval of construction completion
of the tailings dam to 3,766 MASL of Cerro Corona
concession and operation, by Resolution N° 057-
2015- MEM-DGM/V dated February 5, 2015.
• Verification approval of construction completion of
the tailings dam to 3,768 MASL of Cerro Corona’s
concession and operation, by Resolution N° 0557-
2015-MEM-DGM/V dated November 16, 2015.
• Approval of the open pit plan mining of "Cantera de
Cuadratura" and its respective organic soil deposit N ° 9 (top
soil deposit) processing plant of Cerro Corona by Resolution
N ° 0579-2014-MEM-DGM/V dated December 23, 2014.
• Reduction approval of the area granted to Cerro Corona
in 11,30 hectares and its enlargement in two areas called
North Zone with 54,29 hectares and South Zone with
149,66 hectares, as well as the extraction in “Cantera de
Cuadratura” and operation of organic soil deposit No.
2 and (top soil deposit), through Directorial Resolution
N° 058-2015-MEM/DGM dated March 10, 2015.
• Operating license of Las Gordas waste deposit
/ UEA Carolina No. 1 facilities, up to the highest
filling peak of 3,910 MASL, by Resolution N° 0593-
2015- MEM-DGM/V, dated December 14, 2015.
• Verification approval of construction completion of
the tailings dam to 3,771 MASL of Cerro Corona’s
concession and operation, by Resolution N° 089-
2016-MEM-DGM/V dated March 16, 2016.
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• Construction license of the enlargement of Las Gordas/
Facilidades/ Mecheros waste deposit, by Resolution
N° 0250-2016-MEM-DGM/V dated May 13, 2016.
• Enlargement approval of the Cerro Corona pit and
auxiliary facilities by Resolution N° 0565-2016-MEM-
DGM/V dated September 19, 2016.
D. Mining Operation Certificate
• Mining operation certificate No. 058-2012-C, granted by
the Ministry of Energy and Mines on December 13, 2011.
• Mining operation certificate No. 058A-2012, granted by
the Ministry of Energy and Mines on May 9, 2012.
• Mining operation certificate No. 058B-2012, granted by
the Ministry of Energy and Mines on October 11, 2012.
• Mining operation certificate No 039C-2013-C, granted by
the Ministry of energy and Mines on December 3, 2012.
• Mining operation certificate No. 001-2014-C, granted by
the Ministry of Energy and Mines on October 14, 2013.
• Mining operation certificate N° 005-2015-C, granted by
the Ministry of Energy and Mines on October 23, 2014.
• Mining operation certificate N° 005-2016-C, granted by
the Ministry of Energy and Mines on October 23, 2015.
• Mining operation certificate N° 003-2017-C, granted by
the Ministry of Energy and Mines on October 20, 2016.
E. Licenses for water use granted by the Hydrological Resources Office of the National Institute of Natural Resources (INRENA) by means of the following resolutions:
• Council Resolution No 751-2008-INRENA-
IRH dated August 20, 2008.
• Council Resolution No 800-2008-INRENA-
IRH dated September 03, 2008.
• Council Resolution No 944-2008-INRENA-
IRH dated November 05, 2008.
F. License for underground water use with mining purposes, granted by the National Water Authority
• Head Office Resolution No 0004-2011-
ANA dated January 10, 2011.
G. Certificates of Archeological Vestiges Nonexistence, granted by the National
• Institute of Culture by means of the following resolutions:
• CIRA-2004-176 dated August 5, 2004
• CIRA-2005-244 dated October 25, 2005
• CIRA-2006-500 dated May 8, 2006
• CIRA-2007-176 dated June 7, 2007
• CIRA-2007-375 dated October 3, 2007
• CIRA 2008-113 dated April 21, 2008
• CIRA 2008-149 dated May 23, 2008
• CIRA 2012-108 dated October 15, 2012
• CIRA 2012-109 dated October 15, 2012
• CIRA 2012-110 dated October 15, 2012
• CIRA 2012-111 dated October 15, 2012
• CIRA 2012-112 dated October 15, 2012
• CIRA 2012-113 dated October 15, 2012
• CIRA 2012-114 dated October 15, 2012
• CIRA 2012-116 dated October 15, 2012
• CIRA 2012-117 dated October 15, 2012
• CIRA 2012-118 dated October 15, 2012
• CIRA 2012-119 dated October 15, 2012
• CIRA 2012-107 dated October 30, 2012
• CIRA 2012-115 dated October 30, 2012
• CIRA 2012-120 dated October 30, 2012
• CIRA 2012-121 dated October 30, 2012
• CIRA 2012-122 dated October 30, 2012
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• CIRA 2012-123 dated October 30, 2012
• CIRA 2012-124 dated October 30, 2012
• CIRA 2012-125 dated October 30, 2012
• CIRA 2012-126 dated October 30, 2012
• CIRA 2012-127 dated October 30, 2012
• CIRA 2012-128 dated October 30, 2012
• CIRA 2012-129 dated October 30, 2012
• CIRA 2012-130 dated October 30, 2012
• CIRA 2012-131 dated October 30, 2012
• CIRA 2012-132 dated October 30, 2012
• CIRA 2015-100 dated June 18, 2015.
• CIRA 2015-281 dated October 21, 2015.
• CIRA 2015-282 dated October 21, 2015.
• CIRA 2015-283 dated October 21, 2015.
• CIRA 2016-0085 dated March 21, 2016
• CIRA 2016-0183 dated April 21, 2016
H. Chemical Supplies and Regulated Products (IQPF)
• User certificate of Regulated Chemical Products,
granted by the National Police of Peru Narcotics
Department, updated by means of Certificate No.
20507828915-DIVICIQ dated September 17, 2011.
• The record in the National Registry for Control or Regulated
Goods was granted by the National Superintendence
of Customs and Tax Administration by means of Council
resolution N° 3111190000903, renewed by record N°
6C2000-2015-R-0000954 dated August 28, 2015.
I. Global Authorization for Explosives
Use and Operations Licenses
• Operation license for one (01) “Special” Type Ammunition
Dump (Silo) No. 2 for storage of matrix emulsion, located
at Cerro Candela, district and province of Hualgayoc,
Department of Cajamarca; granted by the Superintendence
for Security Services Control of Weapons, Ammunition
and Explosives (SUCAMEC), by Resolution No.
1151-2013-SUCAMEC-GEPP dated September 2, 2013.
• Operation license renewal for one (01) “Special” Type
Ammunition Dump (Silo) granted by the Superintendence
for Security Services Control of Weapons, Ammunition
and Explosives (SUCAMEC) by Resolution N ° 2209 -
2013- SUCAMEC-GEPP dated November 21, 2013.
• Operation license renewal for three (03) “Special” Type Ammunition Dumps (Containers) N° 1, 2 and 3 for the
storage of explosives and blasting accessories, located
at Cerro Candela, district and province of Hualgayoc,
Department of Cajamarca; granted by the Superintendence
for Security Services Control of Weapons, Ammunition
and Explosives (SUCAMEC) by Resolution N ° 2386 -
2013-SUCAMEC-GEPP dated December 5, 2013.
• Operation license renewal for three (03) “Special”
Type Ammunition Dumps (Containers) N° 4, 5
and 6 for the storage of explosives and blasting
accessories, located at Cerro Candela, district and
province of Hualgayoc, Department of Cajamarca;
granted by the Superintendence for Security
• Services Control of Weapons, Ammunition and
Explosives (SUCAMEC) by Resolution N ° 2386 -
2013-SUCAMEC-GEPP dated December 5, 2013.
• Operation license for one (01) warehouse of ammonium
nitrate, and located at Cerro Candela, district and
province of Hualgayoc, Department of Cajamarca;
granted by the Superintendence for Security Services
Control of Weapons, Ammunition and Explosives
(SUCAMEC) by Resolution N° 2562 - 2013-
• SUCAMEC-GEPP dated December 17, 2013.
• Global authorization for the purchase and use of explosives
or related materials during the first half of 2013, granted by
the Office for Management of Explosives and Pyrotechnic
Products of Civil Use (SUCAMEC), by Resolution N °
131-2013-SUCAMEC-GEPP dated January 11, 2013.
• Global authorization for the purchase and use of explosives
or related materials during the second half of 2013, granted
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by the Office for Management of Explosives and Pyrotechnic
Products of Civil Use (SUCAMEC), by Resolution No.
507-2013-SUCAMEC-GEPP dated July 5, 2013.
• Global authorization for the purchase and use
of explosives or related materials during the first
half of 2014, granted by the Superintendence for
Security Services Control of Weapons, Ammunition
and Explosives (SUCAMEC) by Resolution N° 2652 - 2013-SUCAMEC-GEPP dated December 23, 2013.
• Global authorization for the purchase and use of
explosives or related materials during the second
half of 2014 granted by the Superintendence of
Security Services Control of Weapons, Ammunition
and Explosives for civil use by Resolution N°
1900-2014-SUCAMEC-GEPP dated June 30, 2014.
• Global authorization for the purchase and use
of explosives or related materials during the first
half of 2015, granted by the Superintendence for
Security Services Control of Weapons, Ammunition
and Explosives (SUCAMEC) by Resolution No.
3764-2014-SUCAMEC-GEPP dated December 23, 2014.
• Global authorization for the purchase and use of
explosives or related materials during the second
half of 2015 granted by the Superintendence of
Security Services Control of Weapons, Ammunition
and Explosives (SUCAMEC) by Resolution N°
1069-2015-SUCAMEC-GEPP dated May 27, 2015.
• Global authorization for the purchase and use of
explosives or related materials during the first half
of 2016 granted by the Superintendence of Security
Services Control of Weapons, Ammunition and
Explosives (SUCAMEC) by Resolution No. 2738 -
2015-SUCAMEC-GEPP dated December 15, 2015.
• Global authorization for the purchase and use of
explosives or related materials during the second
half 2016 granted by the Superintendence of
Security Services Control of Weapons, Ammunition
and Explosives (SUCAMEC) by Resolution No. N°
1137-2016-SUCAMEC-GEPP dated June 2, 2016.
• Authorization for the purchase and use of explosives
and related materials during 2017 granted by the
Superintendence of Security Services Control of Weapons,
Ammunition and Explosives (SUCAMEC) by Resolution No.
02884- 2016-SUCAMEC-GEPP dated November 29, 2016.
J. Direct consumer of fuels and Liquefied Petroleum Gas (GLP)
• Permits for installations of diesel and LPG granted
by the Regional Bureau for Energy and Mining
of Cajamarca under the following records:
• Record No 0001-CDGL-06-2008 dated February 1, 2008 o
Record No 0002-CDGL-06-2008 dated February 1, 2008
o Record No 0001-CDFJ-06-2004 dated April 4, 2008
• Record No 0012-CDMV-06-2008 dated April 18, 2008
• Record No 0001-CDGL-06-2009 dated January 8, 2009 o
Record No 88527-704-2010 dated September 3, 2010
• Record N° 15387-112-220113 dated January 22, 2013
• Record N° 15387-112-301115 dated November 30, 2015
• RecordN°119476-051-280116datedFebruary12,2016
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G4-6
G4-13
G4-8
G4-12
G4-14
G4-16
G4-15
G4-10
G4-4
71 - 73G4-2 Description of the main impacts, risks and opportunities
G4-3 Name of the Organization I
IIG4-5 Location of Organization's headquarters
IIICountries in which it operates
IVSignificant changes during the period covered by the report
27G4-7 Nature of ownership and legal figure
43Markets, including geographical areas, sectors and customer types
42G4-9 Dimension of the Organization
94G4-11 Percentage of employees covered by a collective agreement
106Description of Organization's value chain
71 - 73Description of how the Organization has adopted an approach or precautionary principle
65Memberships in associations and/or national and international promotion organizations
29, 55Enumerating the principles or other external initiatives of economic, social or environmental nature that the Organization subscribes or has taken
88 - 91Breakdown of employees by type of employment, contract and gender
43Major brands, products and services
Basic General Content
Strategy and Analysis
Profile of the Organization
GRICode ObservationsPages
11 - 15G4-1 Statement of the Chief Officer on relevance of sustainability to the company and its strategy
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2 0 1 6 I N T E G R A T E D R E P O R T
GRI Table of Contents
Gold Fields La Cima S.A.
(II)
Main Office: Av. El Derby 055, Torre I, Oficinas 1001-1002, Residencial Lima Polo and Hunt Club, Surco.
(III
Gold Fields La Cima S.A. only has operations nationwide.
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16G4-17 Coverage of the report
62- 65G4-24 Relationship of stakeholders included by the Organization
16G4-28 Period covered by the report
16G4-29 Date of the last report
16G4-30 Cycle presentation of the report
223G4-31 Point of contact
218 - 222G4-32 GRI Content Index Location for Essential Level
23G4-26 Approaches adopted for the inclusion of stakeholders
20 - 22G4-19 Identified material aspects
16G4-18 Definition process of report's content
20 - 22G4-25 Basis for identification and selection of participating stakeholders
18G4-20 Limitations of the material issues identified within the Organization
18G4-21 Limitations of the material aspects identified outside the Organization
Basic General Content
Material Aspects and Coverage
Stakeholders' Participation
56 - 59G4-34 Corporate governance structure
29G4-35 Company's values, principles, standards and rules of behavior
Government
Ethics and integrity
Profile of the Report
GRICode ObservationsPages
IVG4-22 Effect explanation of any change in the
information informed in previous reports
18G4-23 Significant changes in the scope and coverage of the aspects covered on previous reports
20 - 22G4-27 Major concerns and issues of interest that have arisen through the participation of stakeholders
(IV)
There have not been any significant changes in Gold Fields La Cima S.A. ownership nature nor in its operations.
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42G4-EC1 Direct economic value generated and distributed
42G4-EC7 Development and impact of investment in infrastructure and services
107G4-EC9 Expenditure percentage in locations with significant operations corresponding to local suppliers
91G4-LA1 Number and rate of employees' recruitment and rotation, broken down by age, gender and region
82, 98G4-LA9 Average hours of training per year, per employee, divided by gender and category
81G4-LA5 Percentage of employees represented in joint safety and health committees to assist, monitor and advise on occupational health and safety programs
92 - 93G4-LA2 Social benefits for the full-time employees, not offered to temporary employees
82 - 83G4-LA6 Type and rates of injuries, occupational diseases, lost days, absenteeism, and number of mortal fatalities related to work location and gender
96 -97G4-LA10 Management programs of skills and training to promote employability of workers and help them manage the conclusion of their careers
98G4-LA11 Percentage of employees receiving regular assessments on performance and professional development, divided by gender and category
Basic General Content
Financial Indexes
Indexes of employment practices and ethics at work
Area: Economic performance
Area: Employment
Area: Training and education
Area Health and safety at work
Area: Indirect economic consequences
Area: Procurement practices
GRICode ObservationsPages
It has not been broken down by age
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Basic General Content
124G4-EN8 Total water catchment according to the source - (in Ml)
124G4-EN15 Direct GHG emissions by weight (in t) (scope 1)
124G4-EN16 Indirect GHG emissions by weight (in t) (scope 2)
118G4-EN11 Own operational facilities, which are adjacent, contained or located in protected and non-protected areas of great diversity value
124G4-EN29 Monetary value of significant fines and number of non-monetary sanctions due to non-compliance with legislation and environmental regulations.
124G4-EN3 Internal energy consumption: by type of source and volume
124G4-EN22 Water discharge by quality and destination - total poured amount
124G4-EN31 Breakdown of expenses and environmental investment (in millions of US $)
124G4-EN4 External energy consumption: by type of source and volume
124G4-EN23 Total weight of waste by type and weight (in T) and treatment method
124G4-EN24 Number and volume of significant spills (in liters)
Area: Water
Area: Emissions
Area: Biodiversity
Area: Regulatory compliance
Area: Energy
Area: Effluents and waste
Area: General
GRICode ObservationsPages
124G4-EN1 Materials by weight (in MT)
Environmental indexes
Area: Materials
It includes only non renewable materials
222
2 0 1 6 I N T E G R A T E D R E P O R T
Basic General Content
Indexes of product liability
Human rights indexes
Social indexes
Area: Regulatory compliance
Area: Non-discrimination
Area: Local communities
GRICode ObservationsPages
43G4-PR9 Cost of significant fines for non-compliance with regulations and legislation relating to the provision and use of products and servicesos
55G4-HR3 Number of discrimination cases and measures taken
144 -153G4-SO1 Percentage of operations where programs of development, impact assessment and participation of the local community have been implemented
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Contact
Av. El Derby 055, Torre 1, Office Number 301, Residencial Lima and Polo Hunt Club, Santiago de Surco, Lima, Peru.Phone: (51-1) 706-0400Fax (51-1) 706-0420
This report is available at: www.goldfields.com.pe
Comments and suggestions on the content of this report can be addressed to the Vice President of Corporate Affairs.Email: [email protected]
Content and GRI Methodology application: Ana Lucia Pinto
Graphic Design: Milagros Bouroncle
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