Goldmansachsongold130913 PDF

September 12, 2013
Europe, Middle East & Africa: Metals & Mining: Gold

Equity Research
Leveraged names bounce on gold price move but valuations look stretched
Gold up 20% off lows on speculation,
physical buying and heightened risk
Gold has rallied 20% to trade above $1,400/oz off
lows, before receding back to $1,350/oz. The
recent uptick is a result, in our view, of investors
speculating on a slower exit to QE, higher
inflation and potential intervention in Syria.
resulting in a justifiable rally in more

leveraged names in our coverage
As the gold price rallied, fourth quartile leveraged
stocks have rallied (ABG +77%, ANG +15% and
HAR +20% from lows in May and June) on greater
operating leverage. As the gold price declines, we
believe that the stocks will de-rate.
After the rally leveraged names stretched on

valuation: ABG off CL-Sell, remains Sell, HAR
down to Sell; reiterate Sell on ANG
Since the gold price rally post July, the gold
names have been among the top performing
stocks vs. our broader coverage. Following this
rally, our gold names are trading on average
2013/14E P/Es of 29x/61x far above the historical
range.
Sibanye provides a compelling valuation

opportunity; catalysts ahead; upgrade to Buy
Sibanye is trading on 2013/14E P/Es of 3.2x/7.1x.
Given it has the highest dividend yield (2013/14E
7.5%/3.5% vs. sector 1.7%/1.1%) with a strong FCF
yield, we believe this discount is unwarranted.
Eugene King
+44(20)7774-2447 eugene.king@gs.com Goldman Sachs International
Abhinandan Agarwal
(212) 934-5057 abhinandan.agarwal@gs.com Goldman Sachs India SPL
Fletcher Tully, CFA
+44(20)7552-9935 fletcher.tully@gs.com Goldman Sachs International
Christophor Jost
+44(20)7774-0014 christophor.jost@gs.com Goldman Sachs International
The Goldman Sachs Group, Inc.
Rating
New
Randgold Resources
Old
Last
close
4614 p
Price target
New
Old
Upside/
Downside
African Barrick Gold
S*
170 p
110 p
100 p
-35%
AngloGold Ashanti
R 134
R 120
R 115
-11%
Gold Fields
R 50
R 55
R 58
9%
Sibanye Gold
R 12
R 15
R 10
30%
Harmony Gold
R 39
R 30
R 40
-23%
FY13E
5700 p
5650 p
FY14E
24%
New
Old
New
Old
Year
end
Randgold Resources
$ 3.24
$ 3.31
$ 2.62
$ 3.71
Dec
$ 0.06
$ 0.06
$ 0.02
$ 0.06
Dec
AngloGold Ashanti
$ 1.26
$ 0.87
-$ 0.21
$ 0.81
Dec
Gold Fields
R 2.33
R 1.80
R 1.26
R 1.73
Dec
Sibanye Gold
R 3.59
R 2.40
R 1.61
-R 0.07
Dec
Harmony Gold
R 1.29
R 4.62
-R 0.49
R 0.35
June
EPS (US$/sh and ZAR/sh)
* denotes Conviction List membership

Source: Goldman Sachs Global Investment Research.
COVERAGE VIEWS:
Europe-Mining NEUTRAL
EMEA Mining Cautious
We forecast gold to decline from here

We expect gold to fall on improvement in US
economic activity and less accommodative
monetary policy (supported by our benign outlook
for inflation). We also expect ETF holdings to
continue to fall and central bank and physical
buying to be insufficient to offset price declines.
We believe this process has started.
12-MONTH PRICE TARGETS AND RATINGS
Another round of above CPI wage increases

in South Africa is disappointing
After much trepidation, the wage talks in SA are
coming to an end with the likely outcome of 8%10% wage increases as well as a 1-2 week strike.
While there is still risk of further disruption, the
more disappointing aspect is continued above CPI
wage hikes impacting costs.
Goldman Sachs does and seeks to do business with companies
covered in its research reports. As a result, investors should be aware
that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a
single factor in making their investment decision. For Reg AC
certification and other important disclosures, see the Disclosure
Appendix, or go to www.gs.com/research/hedge.html. Analysts
employed by non-US affiliates are not registered/qualified as research
analysts with FINRA in the U.S.
Global Investment Research
September 12, 2013
Table of contents
Leveraged names bounce on gold price move but we remain negative on the commodity and valuations look stretched
Stocks in review Sibanye to Buy, Harmony to Sell, reiterate Sell on African Barrick and AngloGold
We raise our 2H 2013 gold price forecast; bearish medium/long-term outlook unchanged
Supply-demand model has reshaped; we expect 2H13 to replicate 1H changes
15
Even after recent rally in gold prices and self-help many mines still not generating cash
16
Balance sheets for senior golds are safe for now; 2014/15 to be crucial for ANG and GFI
22
Randgold Resources (RRS.L): The high quality gold miner; catalysts ahead; Neutral on valuation
24
African Barrick Gold (ABGL.L): Turnaround plans stabilises, but reiterate Sell on valuation
26
AngloGold Ashanti (ANGJ.J): Balance sheet shored up but portfolio restructuring ahead, strikes a risk; Sell
30
Gold Fields (GFIJ.J): South Deep delays impact investment case but Australia acquisition a positive; Neutral
32
Sibanye Gold (SGLJ.J): Up to Buy on valuation, Cooke acquisition and dividend catalysts
38
Harmony (HARJ.J): Wafi-Golpu pushed out; many sub-scale SA assets; down to Sell
41
Appendix 1: Refreshing our industry positioning framework
44
Appendix 2: Demand by country
50
Disclosure Appendix
51
RELATED RESEARCH
A weaker rand can help, but SA golds remain under pressure; Sell AngloGold, June 5, 2013
Europe, Middle East & Africa: Metals & Mining: Gold: Survival of the fittest as lower gold price puts high-cost mines in jeopardy; CL Sell ABG, May 3, 2013
The prices in the body of this report are based on the market close of September 11, 2013, unless otherwise stated.
Goldman Sachs Global Investment Research
September 12, 2013
Leveraged names bounce on gold price move but we remain negative on the commodity
and valuations look stretched
After reaching a multi-year low in July the gold price has rallied 20% (primarily on uncertainties surrounding QE tapering
and the Syrian crisis) to trade range bound between US$1,380/oz and US$1,425/oz. With this rally off lows of US$1,175/oz,
the higher cost, more leveraged gold and silver names have rallied (ABG 93%, ANG 18% and HAR 16% from their lows in
May and June) which we believe is justified as operating leverage increased. However, our ECS colleagues continue to
believe that gold prices will fall post this rally on continued improvement in economic activity in the US (leading to higher
bond yields) and less accommodative monetary policy (our Economists expect that the decision to begin tapering by
September end will be taken with the September 18 FOMC meeting). This process has already started with gold trading
under US$1,350/oz.
Gold has rallied but we believe a US recovery, higher yields and end of QE will see gold lower
The gold price has rallied more than 20% after reaching a multi-year low of US$1,175/oz in July this year. This rally in our view is a
result of uncertainty surrounding timing of QE tapering and more recently the Syrian crisis. We mark-to-market 3Q13 to US$1,400/oz
which results in an increase of 7% to our 2H13 forecasts: now US$1,388/oz (previously US$1,300/oz). However, we expect gold to fall
on continued improvement in economic activity in the US and less accommodative monetary policy (our Economists believes that
tapering will begin by September end). We expect ETF holdings to continue to fall and that continued central bank buying will not
be sufficient to offset this decline in prices. Further, we expect this decline in prices to coincide with rising jewellery/retail demand
(given the upcoming wedding/festival seasons in India/China), which we view as price responsive and not price setting.
Justified rally in more leveraged names has led to stretched valuations; we expect stocks to derate as gold price declines
With the rally in the gold price our fourth quartile leveraged stocks have rallied from their lows in May and June of this year. Most of
these stocks have total cash costs in the range US$1,200-1,300/oz and a small uptick in the gold price affords these names a high
operating leverage. Post this rally all these stocks are trading at significant premiums to both the sector and their historical valuation
range. We believe that as the gold price declines these stocks will de-rate sharply.
SA miners avoid big disruptions but 8%-10% wage rises continue to drive costs
The relatively minor one- to two-week disruptions felt by the majority of the gold mining industry in South Africa were not as bad as
many had forecast. But this outcome needs to be balanced against the decade-long cycle of above-CPI wage rises in the industry
and the companies objective of a less than CPI agreement. Most of the major producers have agreed c.8% yoy wage increases and
have taken minor one- to two-week disruptions. Overall, while not earnings destructive in 2013, the inability of the industry (and
government) to stop the trend above-CPI wage increases is disappointing.
September 12, 2013
Stocks in review Sibanye to Buy, Harmony to Sell, reiterate Sell on African Barrick and
AngloGold
African Barrick: Turnaround plan stabilises, but reiterate Sell on valuation
We downgraded ABG to Sell with a thesis that as one of the highest total cash cost producers at peak capex levels it would be under
severe pressure in a declining gold price environment. The stock declined to under 100p (June 28) as gold declined to under
US$1,200/oz. Since then the company has announced its turnaround plan with 1H13 results, gold has rallied to above US$1,400/oz
(retreating since to back under US$1,350)and the stock is up c.90% from lows. We can understand investors buying into the most
leveraged name but we believe the stock will again come under pressure as gold declines towards our target of US$1,144/oz in 2014
(-16% from todays spot) and the valuation for the stock is 43x/129x P/E on 2013/14E (and 42x/12x P/E on spot). After taking into
account the turnaround plan, we still do not forecast that ABG will generate free cash after capex and dividend in 2013, 2014 or 2015.
Our investment case remains that ABG has a portfolio of high cost mines, does not generate cash and is trading at a significant
premium to our coverage. It remains cheap on price-to-book and could screen strongly as a value stock but we believe that the book
value is over stated on our gold price assumption. We reiterate our Sell rating but remove ABG from the Conviction List as the risk
that investors continue to play the most leveraged names remains and the impact on the gold price of tension in Syria reduces our
conviction. Our 12-month price target is 110p, implying 35% downside.
AngloGold: Reiterate Sell on valuation; balance sheet actions positive but portfolio challenges ahead
New CEO, Venkat (former CFO), has aggressively managed the balance sheet with a new US$1.25 bn high-yield bond and the
relaxation of the debt covenants for 2014 to an upper limit of 4.5x net debt/EBITDA. This has reduced the immediate balance sheet
pressure given the >3x on our 2014 estimates and the upcoming May 2014 US$725 mn convertible. The challenge, however,
remains the portfolio, which has many high-cost mines that are producing well below capacity and will need either a) time to
address sub-capacity production performance (e.g., Obuasi, Geita); b) to take costs out of high cost mines, particularly in South
Africa; or c) to sell/close end-of-life assets. If gold goes to sub US$1,200/oz, as we forecast, then restructuring the portfolio is likely to
occupy management for the next 12-18 months. This challenging outlook is balanced with the low-cost, volume increase coming
from the Tropicana and Kibali projects in 2014. We remove AngloGold from the CEEMEA Focus List after underperformance.
Sibanye Gold: Upgrade to Buy on valuation, Cooke acquisition and dividend catalysts
Our primary investment thesis for Sibanye is that it is undervalued relative to peers trading on P/Es of 3.2x/7.1x on 2013/14E vs.
29x/61x for our broader coverage. With no significant growth projects and hence spending only sustaining capex, Sibanye is
generating cash at low gold prices at the corporate level. The company has announced (September 12) a maiden interim dividend of
37 rand cents (15% on underlying earnings) but is targeting a 35% payout for FY13 which would translate into DPS of c.R1 or up to a
8% dividend yield, making it the highest dividend yield in our mining coverage. Finally, Sibanye has announced the expected
acquisition of the Cooke operations from Gold One including the surface retreatment operations which could deliver c.220koz in
2014 rising to c.400koz in 2016 on our estimates at an average cost of c.US$1,200/oz, with the surface ounces planned to come in at
c.US$928/oz. We add Sibanye to the CEEMEA Focus List.
September 12, 2013
Harmony Gold: Downgrade to Sell on expected de-rating and over optimistic production guidance
We downgrade Harmony to Sell as we believe that with a relatively high-cost portfolio of mines and our view of a declining gold
price Harmonys earnings are most challenged into 2014. We also believe that its FY14 production guidance is too optimistic given
the climate in South Africa. We expect Harmony to guide lower in 1Q and 2Q14 results further reducing FY14 earnings.
Randgold Resources: The high quality miner; catalysts ahead; Neutral on weak outlook for gold
Randgold remains the best-positioned name with the strongest balance sheet and strong cash flow from operations on our
estimates. After the capex is complete at Kibali we estimate that the companys total cash cost (TCC) will be under US$800/oz. We
expect production to grow to 1,200koz by 2015 from an estimated 845koz in 2013 The company, on our estimates, has a strong 2014
FCF yield of 2.6% growing to 7.3% by 2015. The company has no development project in the pipeline post Kibali and we expect the
company to start ramping up its dividend. But given our weak outlook for gold and that Randgold is trading at 22.5x 2013E P/E, we
remain Neutral.
Gold Fields: South Deep delays impact investment case but Yilgarn acquisition positive; Neutral
The two most important announcements with the 2Q13 results were the delay in ramp-up schedule of South Deep (which will now
not hit the targeted 700koz annual run-rate in 2016) and the acquisition of Yilgarn South assets (for a total consideration of
US$300 mn) from Barrick Gold which could add c.450koz of gold to GFIs production profile. This acquisition improves the sovereign
risk profile of the company (Australia will account for 42% of production) but the impact of yet another setback for the South Deep
project will negatively impact sentiment towards the stock.
GDX index reweighting; positive for Sibanye and African Barrick

The rebalancing of the NYSE ACRA gold miners index scheduled for September 20, 2013, and the implied flows for the GDX ETF
will be a positive catalyst for Sibanye Gold US and ABG LN. The NYSE ACRA gold miners index is looking to increase the weights
of Sibanye Gold (US listing) and African Barrick Gold (ABGL.L).
For Sibanye the rebalancing will involve 26 days of buying which represents c.US$24.6 mn of additional buying, assuming daily
average volume of 0.23 mn shares at a share price of US$4.13 (as of September 2, 2013 close). For ABG rebalancing will need 14
days of buying which represents US$73.2 mn of additional buying, assuming daily average volume of 1.81mn shares at a share
price of 185.4p (as of September 3, 2013 close).
This rebalancing scheduled for September 2013 lends a small technical upside to the stocks.
September 12, 2013
Price and ratings summary

Exhibit 1: Our gold coverage summary of price targets and ratings
Prices as of the close of September 11 ,2013
P/E (x)
GS
Price
Last
Target
Rating
Ccy
Price
Price
Period
$mn
Randgold Resources
Neutral
GBp
4,614
5,700
12 months
Sell
GBp
170
110
12 months
Company
Target Price Mkt Cap
EV
Upside
(%)
2013E
6,727
24%
1,102
-35%
Unrisked
M&I
P&P
Resource Reserve
NAV
Last Close
EV/Resource EV/Reserve
2014E
2015E
($mn)
($mn)
(mn oz)
(mn oz)
(US$/oz)
(US$/oz)
22.5
27.9
18.9
6,890
3,931
21.8
16.3
316
43.4
129.2
17.7
991
700
25.5
18.5
39
At Price Target
P/NAV
EV/Resource EV/Reserve
P/NAV
(x)
(US$/oz)
(US$/oz)
423
1.71
389
520
2.04
54
1.58
24
33
1.02
(x)
Gold - Senior producers
AngloGold Ashanti
Gold Fields
Sibanye Gold
Sell
ZAR
134
120
12 months
5,233
-11%
10.8
60.6
8,985
2,021
165.9
71.4
54
126
2.59
51
118
2.38
Neutral
ZAR
50
55
12 months
3,749
9%
21.6
40.0
17.5
5,930
3,113
114.2
59.5
52
100
1.20
55
105
1.17
Buy
ZAR
11.5
15.0
12 months
852
30%
3.2
7.1
6.6
919
1,435
1,752
1,783
Harmony Gold
Sell
ZAR
39
30
12 months
3,100
-23%
70.7
100.0
44.4
Gold - Senior producers
28.7
60.8
27.6
(1) All the values and multiples are calendarised; (2) Resources and reserves are in Gold equiv. mn oz; (3) *Conviction List member; (4) "nm" denotes not meaningful
74.1
13.5
12
68
0.59
16
87
0.74
150.2
52.9
12
81
33
134
1.74
1.57
16
92
46
152
0.82
1.36
Valuation methodology summary

Exhibit 2: Our senior gold coverage valuation methodology summary
Prices as of the close of September 11, 2013
Rating
Price Ccy
Price
target
Time
frame
Share
price
Implied upside/
(downside)
Methodology
Neutral
GBp
5,700
12m
4,614
24%
50/50 blend of P/E on '15 and 1x NAV
Sell
Sell*
GBp
110
12m
170
-35%
Sell
Sell
ZAR
120
12m
134
-11%
Neutral
Neutral
ZAR
55
12m
50
9%
Sibanye Gold
Buy
Neutral
ZAR
15
12m
11.5
30%
Harmony Gold
Sell
Neutral
ZAR
30
12m
39
-23%
Company
New
Old
Randgold Resources
Neutral

AngloGold Ashanti
Gold - Seniors
Gold Fields
* denotes Conviction List membership

September 12, 2013
We raise our 2H 2013 gold price forecast; bearish medium/long-term outlook unchanged
We mark-to-market 3Q13 to US$1,400/oz and raise our 4Q13 price estimate to US$1,375/oz (from US$1,300/oz) which raises our 2013
price forecast to US$1,456/oz (from US$1,413/oz) given geopolitical tensions and upcoming seasonal buying in India where we
expect stronger bar and coin demand. Despite these changes we continue to have a bearish view on the gold price in the medium
and longer term:
We believe that with the 18 September FOMC meeting the Fed will take a final decision on QE tapering. Our Economists believe
that tapering will start by September end.
We expect ETF holdings to continue to fall. Furthermore, we expect continued central bank gold buying will not be sufficient to
offset this decline in prices. We also expect the decline in prices to coincide with rising jewellery/retail demand (given the
upcoming wedding/festival seasons in India/China), which we view as price responsive and not price setting.
Finally, while this forecast implies that the unwind of physical gold investments will push gold prices below the marginal cost of
production, we expect mined output to decline which will maintain prices over the longer term near US$1,200/oz (our forecast
for 2015 and beyond).
Exhibit 3: We raise our 2H13 gold price estimates but maintain our price outlook for 2014/15/16E
GS gold price forecasts
Commodity
Gold
Silver
US$/oz
US$/oz
Spot
1,363
22.91
New
1,400
22.58
3Q13
Old
1,300
21.67
%
8%
4%
New
1,375
22.18
4Q13
Old
1,300
22.41
%
6%
1%
New
1,456
24.57
2013E
Old
1,413
24.40
%
3%
1%
New
1,144
19.06
2014E
Old
1,144
20.60
%
0%
7%
New
1,200
21.05
2015E
Old
1,200
21.82
%
0%
4%
New
1,200
21.05
2016E
Old
1,200
21.82
%
0%
4%
New
1,200
21.82
Longterm
Old
%
1,200
0%
22.64
4%
September 12, 2013
Recent rally helped by Syrian uncertainty

Historically in times of war gold prices have shot up as demand for safe-haven assets jump. Gold and oil have had a positive
correlation (Exhibit 4) historically. A higher oil price typically slows economic growth which tends to be supportive of a higher gold
price. This has further added to demand for bullion pushing prices above US$1,400/oz.
With tensions relating to Syria having increased in the last couple of months (Exhibit 5), geo-political tensions have helped drive the
gold price up. We believe continuing geo-political tensions could act as a short-term catalyst for bullion but note that historically,
any risk premium has tended to come out of the metal once tensions subside.
Exhibit 4: Oil and gold prices have shot up in times of geopolitical tension
Exhibit 5: Syrian uncertainty has been a positive catalyst for gold prices
Brent and gold prices 1999 -current
Brent and Gold prices last two months
2,000
160
1,450
120
1,800
118
140
1,400
116
1,600
120
114
1,400
1,350
Syrian crisis
unfolds
1,200
80
US$/oz
1,000
US$/bbl
US$/oz
Syrian crisis
112
110
1,300
US$/bbl
100
108
800
60
1,250
600
9/11
106
2nd Iraq war

40
104
400
1,200
20
102
200
R2: 81%
0
Gold (US$/oz)
Source: Datastream.
100
1,150
Brent (US$/bbl)
Gold (US$/oz)
Brent (US$/bbl)
Source: Datastream.
September 12, 2013
Long interest in gold has recently increased on Syria tension and uncertainty on QE timing
Exhibit 6 shows the historical relationship between gold long and short positions. The market has generally been net long, with long
positions outweighing the shorts. However, post the sharp fall in gold price on April 15 the shorts rose sharply before reaching their
max in July. Since then the gold price has stabilized and has been trading between US$1,380/oz and US$1,425/oz.
The shorts since August (Exhibit 7) have fallen steadily, and the long positions have started to show some signs of recovery, after an
extended period of decline. We believe this is a direct result of the uncertainty surrounding the timing of QE tapering coupled with
Syrian tensions.
Exhibit 6: Short interest in gold has fallen substantially after rising sharply
since May
Exhibit 7: Long interest in gold has shown positive activity which we believe
is largely on Syria concerns and timing of QE tapering
Gold long shorts 2008 - current
Gold long and shorts - YTD
450,000
200,000
400,000
180,000
300,000
200,000
180,000
250,000
160,000
160,000
140,000
100,000
200,000
80,000
150,000
60,000
200,000
Contracts of 100 troy oz
120,000
250,000
140,000
300,000
120,000
150,000
100,000
80,000
350,000
100,000
60,000
100,000
40,000
40,000
50,000
50,000
20,000
20,000
0
GOLD CFTC Long
Source: CFTC.
GOLD CFTC Short (right)
CFTC Long (LHS)
CFTC Short (RHS)
Source: CFTC.
September 12, 2013
ETFs: Daily outflows have slowed, moving to a net neutral since mid-July
The gold price has rebounded from a low of US$1,215/oz to a range around US$1,380/oz and US$1,425/oz which in our view is a
direct result of strong physical buying of bar and coins and the heightened risk relating to Syria.
ETF inflows and outflows have been strongly correlated to the gold price, and on occasions have even driven changes in the gold
price (Exhibit 8).
Since the gold price has been rebounding outflows have slowed (Exhibit 9) even moving to net neutral over the past month with
some days of additions.
It is hard to say if ETF outflows are reflecting the higher gold price or the slowdown in outflows is driving the gold price but in our
view as the gold price declines to US$1,200/oz we will see more outflows.
Exhibit 9: Since February 2013 a cumulative 24.5moz has been sold off by
ETFs and outflows have continued despite gold price recovering somewhat
Exhibit 8: ETF inflows and outflows have followed the gold price
Daily ETF flows vs. gold price 2008-current
Daily ETF flows, February 1, 2013-current

400
1,800
400
1,600
200
200
1,400
0
1,000
-400
800
-600
600
Daily inflows/Outflows (Koz)
1,200
-200
Gold - US$/oz
Daily ETF inflows/ (outflows) - Koz
-200
-400
-600
-800
-800
400
-1,000
200
-1,200
Daily Flow (Koz)
5 day moving average of inflows/outflows
Source: Datastream, Bloomberg.
-1,000
-1,200
Gold (US$/oz) - RHS
Daily Flow (Koz)
10
September 12, 2013
We still expect total ETF outflows of 880 tonnes by year end

ETF holdings remained relatively stable while the gold price declined from US$1,800/oz to US$1,600/oz (December 2012-February
2013). However, since late-February, over 660 tonnes (c.21.2 mn oz) have been liquidated from global ETFs, valued at c.US$29 bn (at
US$1,400/oz).
ETFs reflect predominantly institutional holdings, in our view because products such as gold can be owned by many equity funds as
well as by multi-asset funds, and are therefore a good guide to institutional sentiment towards gold.
At the beginning of 2013, global gold ETF holdings were c.84.6moz (2,398 tonnes), but have declined to c.62.7moz as of September
10 (1,786 tonnes). ETFs have been a relatively consistent source of demand for gold over the past few years (adding between 200
and 600 tonnes in the past four years). With outflows of c.580 tonnes year-to-date this has led to a reversal of c.800-900 tonnes in
2013.
Exhibit 10: ETFs have added 200-300 tonnes per year historically; in FY13 we
expect outflows of c.880 tonnes
Exhibit 11: The pace of outflows has decreased over the past month; but we
expect outflows to continue grossing 880 tonnes by FY13 end
Total physical gold in ETFs, 2008-current
Total physical gold in ETFs, last 12 months
3,000
2,000
2,800
1,800
2,600
1,900
1,800
2,500
1,600
2,400
1,700
1,400
800
Au oz in ETFs (tonnes)
1,000
1,500
Au price (US$ / oz)
Au oz in ETFs (tonnes)
1,200
1,600
2,000
1,800
1,500
Au price (US$ / oz)
2,200
2,000
1,600
1,000
600
1,400
1,400
400
500
1,300
200
GOLD ETFs
1,200
1,000
Gold ($/oz)
1,200
GOLD ETFs
Gold ($/oz)
11
September 12, 2013
India gold demand strong despite RBI measures but SGE premiums indicate China demand
softening
India currently has a 5% current account deficit and gold is the second major driver behind oil. The government has sought to curb
gold imports by: 1) raising import taxes to 10%; 2) restricting supply to domestic users other than against full payment; and 3)
banning sale of gold coins, medallions and dores without a license from the foreign trade office. However, this has only had a
limited impact on the apparently insatiable appetite for gold in India which imported US$2.9 bn worth of gold in July even as prices
hit an all time high as the local currency devalued (INR has depreciated 22% YTD against USD). With the upcoming wedding and
festival season, we expect gold demand to remain strong.
China (where demand, according to the World Gold Council, is set to overtake India) has shown demand softening with premiums
having fallen from a high of c.US$96.oz achieved in April this year just after the gold price collapsed (premium is a reflection of how
much the local market is willing to pay over the global gold price). Another reason why we believe demand in China is softening is
the muted response to the first gold ETFs launched in China. Huaan Asset Management and Guotai Asset Management attracted
just US$195 mn (vs. an expected US$400 mn) and US$66.7 mn respectively.
Exhibit 12: Gold demand has remained strong in India even as the gold price
in India has reached record highs on currency devaluation
Exhibit 13: SGE premiums have declined from their highs in April/May
indicating softening demand
INR and USD gold price
SGE premium (US$/oz)
35,000
1,800
120.00
1,600
100.00
1,400
80.00
33,000
27,000
1,200
25,000
US$/oz
Gold INR/10 grams
29,000
Gold (US$/oz)
31,000
60.00
1,000
40.00
800
20.00
600
0.00
23,000
21,000
19,000
17,000
15,000
1/1/2013
2/1/2013
3/1/2013
4/1/2013
5/1/2013
Gold (INR/oz)
Source: Datastream.
6/1/2013
7/1/2013
8/1/2013
400
9/1/2013
-20.00
04-Jan-13
04-Feb-13
Gold (US$/oz)
04-Mar-13
04-Apr-13
04-May-13
04-Jun-13
04-Jul-13
04-Aug-13
04-Sep-13
SGE Premium (US$)
Source: Datastream.
12
September 12, 2013
Longer term indicators still support our bearish stance: Gold has decoupled from US treasury
rates which indicates downside risks
Our Economists forecast 10-year US treasury yields to reach 2.5% by year end 2013 and 3% by year end 2014, however, the current
10-year US treasury yields are nearing 3%. A recent phenomenon we have observed is the decoupling of the gold price from 10-year
US treasury rates. This, in our view, is a reflection of risk related to timing of QE tapering, the geopolitical tensions in Syria and
rotation out of EM markets into safe haven assets, a move from which gold has benefitted.
In our view, the gold price will in time align to 10-year yields, i.e., US$1,200/oz. We continue to believe that this is the key long-term
driver of the gold price and therefore retain our bearish stance on the commodity.
Exhibit 14: USD is weakening while rates rise
Exhibit 15: Gold is rising even as US rates have increased
DXY and US 10 year treasury yields
Gold price and US 10 year rates
85
3.50%
84
3.00%
83
2.50%
82
2.00%
3.50%
1,800
1,700
3.00%
1.50%
80
Gold (US$/oz)
1,500
2.00%
1,400
1.50%
1,300
1.00%
US 10 year treasury yield (%)
81
2.50%
US 10 year treasury yield (%)
USD (DXY Index)
1,600
1.00%
1,200
79
78
08-Jan-13
0.50%
08-Feb-13
08-Mar-13
08-Apr-13
08-May-13
DXY
Source: Datastream.
08-Jun-13
08-Jul-13
08-Aug-13
0.00%
08-Sep-13
0.50%
1,100
1,000
08-Jan-13
08-Feb-13
US 10 year treasury yields
08-Mar-13
08-Apr-13
Gold( US$/oz)
08-May-13
08-Jun-13
08-Jul-13
08-Aug-13
0.00%
08-Sep-13
US 10 year treasury yields
Source: Datastream.
13
September 12, 2013
Other drivers: Production response unlikely to have a material impact in the short term, but
weaker pricing will eventually bring support from elsewhere
In our note Survival of the fittest as lower gold price puts high-cost mines in jeopardy, May 3, 2013, we argued that miners needed
to cut higher-cost production by at least 10% to lower their total cash costs/oz. With 1H13 results we have not seen any tangible
action by companies on making production cuts except a few announcements by companies about their intention to sell off some
assets. The total mine supply in 1H13 was 1,409 tonnes. We now forecast full year production of c.2,850 tonnes. In our view, the
rationale for not cutting production is based on companies views that the gold price will reach historical highs of US$1,800/oz. But
with the gold price now settling in a range of US$1,380-US$1,425/oz we believe that the companies will start to sell/shutter down
loss-making mines to stem the cash burn.
We continue to believe that mined output will need to adjust to offset the oversupply we forecast, and we expect high-cost mines
that cannot be turned around through high-grading or cost reduction to be put on care and maintenance if the lower price
environment persists. It is not an easy decision for the mining companies to take, and we would expect it to take a couple of
quarters of low prices to drive a response. However, we expect this to happen eventually, as it did in 2000-2002.
Mine production: As we believe that there is no cost support in gold mining, when the price settles we would expect the
miners with high-cost mines to reduce unit costs through high-grading (where possible), or by cutting operating costs and
capex to stay in business. If this cannot be done, then we would expect these mines to be put on care and maintenance.
Consistent with our published view, we believe that c.280 tonnes (c.10%) of mining capacity will have total cash costs above our
gold price forecast, and hence to be under threat of closure.
Producer hedging: Although hedging was still negative in the first half of the year, we expect the trend to change in the second
half as companies acknowledge the reality of a lower gold price. Australias Norton Gold and Evolution Mining have already
hedged a major portion of their output.
Recycling/scrap: We expect recycling to fall 13% yoy reflecting lower gold prices. Electrical and industrial scrap is unlikely to be
impacted, in our view.
Jewellery: Jewellery demand was strong in 1H13 and we expect the trend to continue into 2H13 with the upcoming wedding
and festival season in India and China.
Bar and coin demand: Following the sharp fall in gold price the bar and coin demand for 1H13 was at 914 tonnes (c.70% of
2012 demand). We expect the trend to continue into 2H13 with total demand of c.1,900 tonnes, up 52% yoy.
Central banks to be net buyers: Contrary to our belief that central banks would be large scale buyers of bullion, the total
demand for 1H13 was c.180 tonnes and for the full year we expect total purchases to be c.338 tonnes (down 38% yoy).
14
September 12, 2013
Supply-demand model has reshaped; we expect 2H13 to replicate 1H changes

In Exhibit 16 we discuss the impact of the lower gold price on the supply-demand balance. As expected the lower gold price led to a
fall in supply from recycling in 1H13 as investors hoarded bullion. As we move into the second half of 2013 we expect the following
notable changes from 1H13: 1) investment outflow to ease and recycling to pick up as the gold price stabilises; 2) with the upcoming
wedding/festival season in India, we expect jewellery demand to stay strong in 2H13 despite the slew of measures taken by the RBI
to curb demand; and 3) bar and coin demand to remain strong as we believe retail investors will continue to take advantage of the
low gold price.
Exhibit 16: Lower gold price shook up the S-D balance in 2013; we expect trend to continue albeit at a slower pace
Our supply-demand balance forecast assuming an average gold price of US$1,456 for 2013
2009
2010
2011
2012
2012vs
2011(%
diff.)
Mineproduction
2,611
2,739
2,836
2,848
0%
NetProducerhedging
Totalminesupply
236
2,375
108
2,631
11
2,847
20
2,828
1%
Recycledgold
1,735
1,719
1,669
1,626
3%
Totalsupply
Demand
4,110
4,350
4,515
4,454
1%
Jewelleryfabrication
1,814
2,017
1,972
1,908
3%
Technology
Subtotalabovefabrication
410
2,224
466
2,483
453
2,425
428
2,336
5%
4%
Totalbarandcoindemand
786
1,201
1,515
1,256
17%
ETFsandsimilar
617
382
185
279
51%
516
4,143
208
4,274
67
4,059
48
3,919
3%
Summaryof2013outlook
1H2013
actual
2013E
2013Evs
2012(%
diff.)
1,409
2,849
0%
Supply
OTCinvestmentandstockflows
Totaldemand
Officialsectorpurchases
Totaldemand(incofficialsector)
Balance
LondonPMfix(US$/oz)
34
77
457
535
17%
4,109
1
972
4,351
1
1,225
4,515
0
1,572
4,453
0
1,669
1%
6%
MiningproductionwillbecuttowhatisrequiredtobalancethemarketonceoutflowsfromETFshave
beenmetbyphysicaldemandorincreasesinjewellery/fabricationdemand.Weexpectc.10%of
miningproductiontobeshutteredin.
Wearelikelytoseeanincreaseinproducerhedgingaspricesfall.Debtholderswillforcejunior
producerstohedgepartoftheirproductiontosecureloans(e.g.ShantaGold).
Supplyfromscrapwilllikelyseeamaterialdeclinegivenscraptendsto"shake"outofthemarketon
fastmovingspikes;weexpecta12%declineinthegoldpriceyoyandhencescraplevelstofallin2013,
especiallyfrom"cashforgold"schemes.Scrapfromindustrial/electronicsourcesisunlikelytobe
affected.Ifscrapdoesnotpullbackmeaningfully,thenminingmayhavetotakefurtherreductions.
Weexpectstrongerjewellerydemandin2013onlowergoldprices,particularlyinIndiaandChina(the
largestconsumersofgoldjewellery)duringtheirupcomingweddingseasons.
Wehaveseenastrongjumpinbar&coindemandfromretailinvestorsfollowingthesharpdownward
moveinthegoldprice,particularlyinAsia.Thiscouldcontinuedepsitethelowergoldpricebutour
hypothesisisthatthisis"bargainhunting"andcouldrunoutofsteamifthegoldpriceeitherdoesn't
recoverorcontinuestodeclineoninstituionalselling.
Alowergoldpriceover2013islikelytoseeanexodusfromgoldETFs.Sofarin2013ETFholdingshave
outflowedc.300tonnes(c.10mnoz).AnextendedperiodofthegoldpricebelowUS$1,500/ozwillseea
significantnumberofETFholderssittingonanegativereturn.Anyfurthermoveslowerwilllikelysee
moreselling.
OTCflowstypicallyfollowETFflows.
Centralbankbuyingislikelytoremainrelativelyconsistent.ChinaandGCCstates,asbigUSDholders,
havebeenthemainbuyersinrecentyears.SmallerbuyerslikeRussiaandemergingEUcountrieslike
theCzechRepublichavebeenbuyersalso,butChinaandGCCstateswilldrivetheofficalsector
purchasesin2013.
26
14
1,383
2,863
1%
672
1,422
13%
2,055
4,285
4%
1,116
2,226
17%
207
1,322
407
2,632
5%
13%
913
1,903
52%
579
879
217
1,874
297
3,954
1%
181
331
38%
2,055
0
1,525
4,285
0
1,456
4%
13%
Source: World Gold Council actual 2010-2012; Goldman Sachs Global Investment Research for 2013.
15
September 12, 2013
Even after recent rally in gold prices and self-help many mines still not generating cash
The recent results calls were all about cost cuts and measures being taken by companies to adjust to the new reality which is a
lower gold price. As published in A weaker Rand can help, but SA golds remain under pressure, June 5, 2013 (in that note we used a
gold price of US$1,400/oz), we continue to believe that more than 50% of the mines are not making cash.
In Exhibit 17 we show the total cash costs for mines in our coverage for 2013 and 2014. Even after the recent wave of self help,
c.50% of mines (especially legacy mines in South Africa) are still burning cash at the current gold price (despite the cost optimization
plans companies have implemented) and in our view closures is the only viable option.
Exhibit 17: c.50% of mines in our coverage have a total cash cost above the spot gold price; the situation improves in 2014 but cash
burn continues on our gold price
Total cash cost/gold eq. oz by mine, 2013/2014E
3,500
3,000
2,500
TCC (US$/oz)
2,000
Gold price $1,400/oz
1,500
1,000
500
0
San Jose
Pallancata
Arcata
Noche Buena
Soledad-Dipolos
Cienega
Herradura
Saucito
Fresnillo
Beatrix
Kloof
Driefontein
Phoenix
Kalgold
Virginia - Unisel
Tshepong
Target 3
Target 1
Phakisa
Masimong
Joel
Kusasalethu
Doornkop
Steyn 2
Bambanani
Hidden valley
Agnew
St Ives
Cerro Corona
Damang
Tarkwa
South Deep
Cripple Creek & Victor
Serra Grande
Brasil Mineracao
Cerro Vanguardie
Tropicana
Sunrise Dam
Geita
Navachab
Sadiola
Siguiri
Obuasi
Iduapriem
Surface Ops
Tau Tona
Mponeng
Moab Khotsong
Kopanang
Great Noligwa
North Mara
Buzwagi
Bulyanhulu
Morila
Tongon
Loulo
RRS
ABG
ANGJ
TCC (US$/oz) - 2013
GFI
TCC (US$/oz) - 2014
HARJ
SGLJ
FRES
HOCM
Gold price
Note: Excludes expansionary capex for new projects (e.g. Randgolds Kibali
16
September 12, 2013
At a company level the reduction in capex in 14 and 15 gets coverage under US$1,200/oz
Many companies in our senior gold and silver coverage have a total cash cost per ounce above our current 2013/14 gold price
forecast (Exhibit 18). In many cases, this reflects expansionary capex which should fall through 2014 and 2015 (Exhibit 19). However,
in many cases it is a result of low grades and high cost inflation and cannot be easily rectified (e.g. African Barrick Gold). Exhibit 18
reflects the capex cuts announced by the companies with their results. Most of the cuts, we believe, have been from budgeted
expansionary capex with only slight cuts made to sustaining capex. We believe that companies have very little headroom left to
bring their costs down in case of further gold price falls.
One option is high-grading the mines, increasing the mined grade and thus lowering the tonnes moved and the unit cost per
ounce. This can only be done if the geology or the mine allows mining in higher-grade zones without first having to mine lowergrade ores. ABG and AngloGold have both mined at their reserve grades in 2012, while Harmony, Randgold and Sibanye all mined
well below their reserve grade and have the potential to lower unit costs by focusing on higher-grade ores.
Exhibit 18: Many gold companies in our gold coverage have total cash costs
above the gold price in 2013/14
Total cash cost/gold oz eq., 2013-15E
Exhibit 19: Companies have cut capex to stem the cash burn but post these
cuts we believe they have very less headroom left in case gold price fell
further
Old vs. revised capex 2013-2016E
2,500
1,900
1,800
1,700
1,600
1,500
2013: $1,456
2,000
1,400
1,300
2015: $1,200
1,200
1,500
2014: $1,144
US$ mn
Total cash cost / oz
1,100
1,000
900
1,000
800
700
600
500
500
400
300
200
100
FY2015E
SGLJ.J
GFIJ.J
HARJ.J
ANGJ.J
RRS.L
ABGL.L
SGLJ.J
GFIJ.J
2015E
HARJ.J
ANGJ.J
New
RRS.L
Old
2014E
ABGL.L
GFIJ.J
ANGJ.J
RRS.L
SGLJ.J
FY2014E
HARJ.J
2013E
FY2013E
ABGL.L
SGLJ.J
AngloGold Ashanti
GFIJ.J
Sibanye Gold
HARJ.J
Gold Fields
ANGJ.J
RRS.L
Randgold Resources
ABGL.L
2016E
17
September 12, 2013
Self-help in full swing: Capex and exploration first to be cutoperating costs harder
The recent quarterly/half yearly production/financial results show all gold producers grappling with the reality of a sustained lower
gold price. They have cut down on exploration budgets, both greenfield and near mine, and are focusing on making their operations
leaner by reducing costs.
Exploration spend is easy to cut. It does not impact short-term production and is material to free cash flow. Capex is harder but can
be flattened out over a longer time period or renegotiated or finally, projects can be deferred. Again this is good for short-term cash
flow and does not impact operations. Head office and support costs are usually next which typically have a smaller impact on total
costs but do not impact operations. Cutting operating costs is significantly tougher and this is where most of the costs are.
Reducing costs is hard: It is no surprise that taking costs out of a mine is very tough. There are three main areas: 1) people, 2)
energy (electricity and diesel), and 3) consumables (e.g., explosives, steel). Reducing employees is hard as a result of
unionization (as is clear from the threat by unions to strike should Amplats go ahead with the proposed 6,000 job cuts which
finally had to water down the job cuts to 3,300 and then only c.2,000 in the final announcement). Reducing workers pay is just
as tough and can also impact productivity. Energy costs are usually set by the government or the global oil price, and typically
efficiency initiatives take time to pay off. Finally, in the case of consumables, the costs of explosives and steel are almost always
linked to the price of the commodity the miner is producing and selling: they only tend to fall in price is when the commodity
price also falls.
Production matters more than costs: It is a truism that in mining units produced matter more than gross costs when
considering unit costs. Mines are effectively fixed cost operations, and producing more output has the dual benefit of lowering
the unit cost (more units on virtually the same costs) and producing extra revenue. If one thinks of the additional revenue as
offset against costs, then the benefits are significant. For example, if a mine produced 100koz gold at US$1,000/oz, gross total
costs would be US$100 mn. Cutting costs by 10% would see the unit cost fall to US$900/oz. Producing 10% more would see unit
costs fall 9%, and if the additional 10koz were counted against costs at US$1,470/oz (US$14.7 mn) then the unit cost would fall
to US$775/oz, or 25% below the original. In many cases, targeting cost reduction in the traditional sense is bad for business, as
spending more to expand production (if possible) almost always is of greater value. High-grading is the main way that a mining
company can increase its output.
In extractive industries such as mining, costs always tend to go up: The start-up of a new mine is always planned to
maximize the first 3-5 years of production, to maximize the NPV of the project. Each subsequent year of production sees the
mines pit (or shaft depth) get bigger (deeper). Consequently, travel times, haul trip times, air ventilation expense (and virtually
every other cost) rises each year. As a practical example: In Year 1 of an open pit mine, the haul truck travel time from loading
to tipping takes 30 minutes. In Year 2 because the pit is wider and deeper, the trip time is 35 minutes. To maintain the same
tonnes/hour output from the mine, management must insert an extra truck into the fleet which needs an extra drive/shift. The
new truck will burn fuel, need maintenance and consume tyres.
18
September 12, 2013
For structurally high-cost mines care & maintenance is a tough choice, but often the only choice
With the sharp fall in gold price companies have taken steps to cut capex. AngloGold put its Mongbwalu project in Africa on ice
with the 1Q13 results. Harmony recently put its attractive Wafi-Golpu project in PNG on hold citing unattractive returns at the
current gold price. This is a step forward in the right direction but in our view investors need to see more tangible action. Closures
of loss-making mines especially in South Africa in our view could turn the dial for the companies but as the recent developments in
South Africa (Amplats was forced by the SA government to water down its proposed job cuts from 14,000 to 6,000 and keep its
Khusulekha mine operational) have shown this is not straightforward. The Government (upcoming elections in South Africa in 2014)
together with the unions (both NUM and AMCU fighting for dominance) is strictly against any job cuts. The draft mining bill
currently in parliament which proposes tax increases on mining companies in a bid to increase revenues will also hit the companies
already battling the falling gold price.
Exhibit 20: Companies have undertaken cost cutting initiatives but we think they are insufficient
Cost cutting measures undertaken by gold cos.
Capital Reduction Exploration budget
RandGold Resources
Renegotiation of
contracts
Sale of assets/
Suspension of project
Organization
Restructuring
Targeted Savings
Realization
US$ 70mn
FY2013
Comments
1. Capex at Kibali reduced by $50mn

2. Capex reduced at Loulo-Gounkoto by US$20mn
1. $50mn reduction in sustaining capital
2. $25mn reduction in exploration spend
3. $15mn savings in corporate overheads
4. Targeted reduction in labour costs by 20%
5. Suspended Buly Upper East project
1. Asset sales (Navachab and Sadiola to IAMGOLD)
2. Mongbwalu project suspended
3. Exp. budget reduced by $40mn, capex by $100$150mn, corporate costs by $51mn & $140mn for
13/14 respectively
US$185mn
FY 2013
AngloGold Ashanti
Upwards of $150mn
2H2013 - 1H2014
Harmony Gold
US$ 201mn
FY2014
1. Capex cuts of $45mn in South Africa

2. $111mn capex cut in PNG
3. 45mn in other costs (corporate)
4. Pushed out Wafi Golpu development
Gold Fields
c. US$250mn
FY2013
1. Exploration budget cuts by US$80mn.

2. Capex reduced by US$180mn.
Sibanye Gold
Undeclared
Next 2 years
1. New management operating model

2. Operational focus
3. Suspension of Beatrix West
Source: Company data, Goldman Sachs Global Investment Research.
19
September 12, 2013
Weaker currency: A tailwind but comes with risks

Recent currency depreciation in EM (South African rand (ZAR) has depreciated 21% YTD against USD) and Australia (AUD has
depreciated 17% against USD) has helped the companies on the cost front as a major portion of a mining companys costs are in the
local currency. Our Strategists are forecasting even weaker mining currencies going forward.
In our view, with the S&P performing and enough green shoots to indicate a US recovery, investors do not need exposure to EM
markets to get returns. We have seen a rotation out of the ZAR back to the US$. Add to this the impact of the markets heightened
view of country risk and the currency sell-off seems logical. The depreciating currency is clearly a tailwind for those resource stocks
for which the US$ commodity price is set by global markets, as gold is, but the companies book the revenues in ZAR, as the South
African gold miners do.
On the face of it, a weakening local currency is a strong reason to buy stocks and the bounce in the shares would indicate that the
market agrees, but we highlight two risks: (1) one of the main reasons for the currency sell-off (particularly the rand) in our view has
been the instability in the mining sector; mathematically, earnings increase on a weaker rand but clearly the risk to delivery is higher
owing to strikes; and (2) a weaker rand also creates opportunities for unions to push for bigger pay rises (the NUM has negotiated
above CPI wage negotiations from SA golds). In a sense, investors cannot have their cake and eat it on the issue of the rand. The
problems in the sector have weakened the currency and these problems are just as likely to impact company performance.
Exhibit 21: AUD strengthens going into 2014 but ZAR depreciation to continue
Our currency forecasts
ForiegnExchange
$/
AUD/USD
ZAR/USD
PEN/USD
Spot
1.57
0.93
9.98
2.79
New
1.53
0.90
10.10
2.75
3Q13
Old
1.53
0.92
9.80
2.63
%
0%
2%
3%
4%
New
1.53
0.88
10.20
2.75
4Q13
Old
1.53
0.90
10.00
2.63
%
0%
2%
2%
4%
New
1.54
0.96
9.63
2.68
2013E
Old
1.54
0.97
9.50
2.62
%
0%
1%
1%
2%
New
1.53
0.85
10.68
2.78
2014E
Old
1.53
0.85
10.50
2.63
%
0%
0%
2%
5%
New
1.53
0.85
11.00
2.80
2015E
old
1.53
0.85
11.00
2.64
%
0%
0%
0%
6%
New
1.52
0.84
11.50
2.95
2016E
old
1.52
0.84
11.50
2.66
%
0%
0%
0%
11%
New
1.51
0.84
11.50
3.30
Longterm
old
1.51
0.84
11.50
2.67
%
0%
0%
0%
24%
20
September 12, 2013
ANG has the greatest need to turn around cash flow; ABG could muddle through
Exhibit 22 shows the total cash costs (Y-axis) and balance sheet position (X-axis) of our coverage. Stocks such as Randgold (RRS.L),
Sibanye (SGLJ.J) generate cash at our lower gold price forecast and have net cash/improving cash positions. Even in a much lower
gold and silver price environment, both these companies are compelling equity investments in our view. Conversely, companies at
the bottom left of the chart (ANGJ.J) have high costs and deteriorating net debt positions, and will, in our view, come under
increasing pressure unless radical (and speedy) restructuring can be delivered. African Barrick on our estimates is net cash but this
could change rapidly if the gold price was to decline (as we forecast) and/or if the cost optimization savings do not come through.
Exhibit 22: Companies in the bottom left corner are poorly positioned as they
have higher total cash costs and leverage
Exhibit 23: Companies in the bottom left corner are poorly positioned as they
have higher total cash costs and leverage
Total cash costs (average FY13-16E) vs. net debt 2013 / EBITDA 2014 for our gold
and silver coverage
Total cash costs (average FY13-16E) vs. net debt 2014 / EBITDA 2015 for our gold
and silver coverage
2014
Low cost / high debt
Low cost / net cash
Improving balance
sheet on lower costs
and production
Low cost / net cash
RRS.L
800
GFIJ.J
900
SGLJ.J
1,000
1,100
Gold: US$1,144/oz
ANGJ.J
1,200
1,300
Deteriorating balance
sheets unless costs
can be reined in
1,400
HARJ.J
ABGL.L
Improving balance
sheet on lower costs
and production
700
Total cash costs, average '13-16E ($US / oz)
700
Total cash costs, average '13-16E ($US / oz)
2015
Low cost / high debt

600
600
RRS.L
800
GFIJ.J
900
SGLJ.J
1,000
1,100
ANGJ.J
1,200
Gold: US$1,200/oz
1,300
Deteriorating balance
sheets unless costs
can be reined in
1,400
HARJ.J
ABGL.L
High cost / net cash
High cost / net cash
High cost / high debt
High cost / high debt
1,500
1,500
3.5
3.0
2.5
2.0
1.5
Debt
Note: 1) We use calendar year values for net debt and EBITDA.
2) Harmony is June year end.
1.0
0.5
Net debt / EBITDA

2013 Net Debt /2014 EBITDA
0.0
-0.5
-1.0
-1.5
Net cash
3.5
3.0
2.5
2.0
Debt
Note: 1) We use calendar year values for net debt and EBITDA.
2) Harmony is June year end.
1.5
1.0
0.5
Net debt / EBITDA
0.0
-0.5
-1.0
-1.5
Net cash
2014 Net Debt /2015 EBITDA
21
September 12, 2013
Balance sheets for senior golds are safe for now; 2014/15 to be crucial for ANG and GFI
Exhibit 24 shows the net debt and the available debt facilities for the senior gold companies in our coverage. Randgold, Harmony
and Sibanye are relatively secure with net cash/low debt on their balance sheets hence will not require any refinancing, in our view.
The most at risk are AngloGold and Gold Fields which have rising net debt and limited available headroom related to available
financing. Both AngloGold and Gold Fields would have to refinance in 2H2014/1H2015, in our view.
African Barrick is secure for now but if the gold prices were to decline from here (as we forecast) the company could face financing
issues.
Exhibit 24: All companies in our senior gold coverage have headroom in case the gold price turns downward, but most will need
some additional facilities or refinancing in 2015
Net debt and available financing facilities
1,000
US$mn
1,000
2,000
3,000
4,000
5,000
2013
2014
RRS.L
2015
2013
2014
2015
2013
ABGL.L
2014
ANGJ.J
2015
2013
2014
GFIJ.J
2015
2013
2014
HARJ.J
2015
2013
2014
2015
SGLJ.J
22
September 12, 2013
Summary estimate changes

Exhibit 25: We make significant cut to our estimates
Summary of estimate changes
Gold - Seniors
Revenue (US$ mn)
Randgold Resources
2015E
2013E
2014E
2015E
2013E
2014E
2015E
2013E
2014E
2015E
FY2013A
FY2014E
FY2015E
New
$ 1,138
$ 1,201
$ 1,399
$ 897
$ 734
$ 802
$ 5,406
$ 4,800
$ 5,477
R 26,440
R 24,669
R 28,298
R 18,867
R 17,278
R 16,843
R 15,902
R 16,495
R 17,345
Old
$ 1,148
$ 1,325
$ 1,500
$ 916
$ 916
$ 943
$ 5,367
$ 5,635
$ 5,849
R 26,118
R 26,814
R 31,637
R 16,991
R 16,366
R 16,273
R 16,405
R 18,634
R 17,592
-1%
-9%
-7%
-2%
-20%
-15%
1%
-15%
-6%
1%
-8%
-11%
11%
6%
4%
-3%
-11%
-1%
New
$ 497
$ 464
$ 641
$ 189
$ 139
$ 220
$ 1,606
$ 1,096
$ 1,477
R 11,215
R 8,631
R 10,917
R 6,817
R 4,425
R 4,369
R 2,851
R 2,727
R 2,226
Old
$ 496
$ 527
$ 700
$ 189
$ 170
$ 154
$ 1,617
$ 1,571
$ 1,521
R 10,622
R 10,018
R 13,817
R 5,128
R 2,776
R 4,723
R 3,537
R 4,385
R 2,163
0%
-12%
-8%
0%
-18%
43%
-1%
-30%
-3%
6%
-14%
-21%
33%
59%
-8%
-19%
-38%
3%
New
$ 3.24
$ 2.62
$ 3.86
$ 0.06
$ 0.02
$ 0.15
$ 1.26
-$ 0.21
$ 0.22
R 2.33
R 1.26
R 2.88
R 3.59
R 1.61
R 1.74
-R 0.19
R 1.29
-R 0.49
Old
$ 3.31
$ 3.71
$ 5.01
$ 0.06
$ 0.06
$ 0.03
$ 0.87
$ 0.81
$ 0.69
R 1.80
R 1.73
R 4.86
R 2.40
-R 0.07
R 2.37
R 2.02
R 4.62
R 0.35
-2%
-29%
-23%
-1%
-63%
418%
44%
-126%
-68%
29%
-27%
-41%
49%
-2407%
-27%
-110%
-72%
-240%
New
$ 0.49
$ 0.26
$ 0.71
$ 0.02
$ 0.02
$ 0.03
$ 0.05
$ 0.00
$ 0.20
R 0.30
R 0.32
R 0.87
R 0.87
R 0.40
R 0.61
R 0.50
R 0.18
R 0.00
Old
$ 0.50
$ 0.51
$ 0.38
$ 0.07
$ 0.07
$ 0.06
$ 0.20
$ 0.20
$ 0.20
R 0.54
R 0.52
R 1.45
R 0.75
R 0.04
R 0.83
R 1.01
R 0.80
R 0.86
-2%
-48%
85%
-71%
-71%
-50%
-75%
-100%
0%
-45%
-39%
-40%
16%
982%
-27%
-50%
-78%
-100%
New
-$ 744
-$ 374
-$ 144
-$ 427
-$ 210
-$ 165
-$ 2,015
-$ 1,360
-$ 1,000
-R 7,506
-R 5,964
-R 4,230
-R 2,895
-R 2,664
-R 2,028
-R 3,605
-R 3,007
-R 2,858
Old
-$ 744
-$ 339
-$ 109
-$ 461
-$ 335
-$ 205
-$ 2,075
-$ 1,360
-$ 1,000
-R 8,169
-R 6,451
-R 4,709
-R 3,008
-R 2,846
-R 2,226
-R 3,917
-R 3,727
-R 3,792
0%
10%
32%
-7%
-37%
-20%
-3%
0%
0%
-8%
-8%
-10%
-4%
-6%
-9%
-8%
-19%
-25%
New
15.8%
12.4%
15.7%
4.8%
3.3%
5.0%
5.7%
5.2%
6.3%
3.9%
4.1%
5.0%
14.0%
8.2%
7.6%
5.1%
4.1%
3.1%
Old
15.3%
13.4%
16.2%
4.7%
3.9%
3.3%
7.0%
6.6%
6.8%
4.9%
4.9%
6.4%
9.8%
5.5%
8.0%
6.1%
6.2%
3.3%
3%
-7%
-3%
2%
-15%
52%
-20%
-21%
-7%
-21%
-16%
-21%
43%
49%
-5%
-16%
-34%
-5%
% change
CROCI (%)
Harmony Gold
2014E
% change
Capex (US$ mn)
Sibanye Gold
2013E
% change
DPS (US$)
Gold Fields
2015E
% change
EPS (US$)
AngloGold Ashanti
2014E
% change
EBITDA (US$ mn)
2013E
% change
23
September 12, 2013
Randgold Resources (RRS.L): The high quality gold miner; catalysts ahead; Neutral on
valuation
Investment Profile
Whats changed
Low
High
Growth
Growth
Returns *
Returns *
Multiple
Multiple
Volatility
Volatility
20th
Percentile
40th
60th
80th
100th
We update our estimates for our new gold price estimates and we now forecast Kibali reaching commercial
production in 4Q13 (we previously forecast first gold pour in 1Q13). Randgold announced with its 1Q13 results a
capex cut of US$50 mn at Kibali without affecting the schedule of the project. The company had also trimmed
capex at the Loulo-Gounkoto complex by US$20 mn.
Our 2013/14/15E EPS move -2%/-29%/-23% as we adjust our production, cost and metal price assumptions.
Randgold Resources (RRS.L)

Europe Mining Peer Group Average
* Returns = Return on Capital
For a complete description of the investment

profile measures please refer to the
disclosure section of this document.
Key data
Current
Price (p)
12 month price target (p)
Upside/(downside) (%)
Market cap ( mn)
Enterprise value ($ mn)
4,614
5,700
24
4,254.2
6,890.1
12/15E
1,399.2
(6.7)
441.3
(23.2)
3.86
5.01
9.9
18.9
1.0
7.3
15.7
Revenue ($ mn) New

Revenue revision (%)
EBIT ($ mn) New
EBIT revision (%)
EPS ($) New
EPS ($) Old
EV/EBITDA (X)
P/E (X)
Dividend yield (%)
FCF yield (%)
CROCI (%)
12/12
1,328.6
0.0
567.4
0.0
4.69
4.69
13.1
21.7
0.4
(3.7)
19.9
12/13E
1,137.6
(0.9)
345.6
(1.9)
3.24
3.31
13.9
22.5
0.7
(5.3)
15.8
12/14E
1,201.3
(9.3)
283.6
(29.5)
2.62
3.71
14.7
27.9
0.4
2.6
12.4
Price performance chart

8,000
430
7,500
420
7,000
410
6,500
400
6,000
390
5,500
380
5,000
370
4,500
360
4,000
3,500
Sep-12
350
340
Dec-12
Randgold Resources (L)
Share price performance (%)

Absolute
Rel. to FTSE World Europe (GBP)
Mar-13
Jun-13
FTSE World Europe (GBP) (R)
3 month
(6.3)
(10.6)
6 month
(15.4)
(16.0)
Implications
Randgold remains the best-positioned name with the strongest balance sheet and strong cash flow from
operations on our estimates. After the capex is complete at Kibali, we estimate that the companys total cash
cost (TCC) will be under US$800/oz. We expect production to grow to 1,200koz by 2015 from an estimated
845koz in 2013. The company has a strong 2014/15E FCF yield of 2.6% and 7.3% respectively. Post the
completion of Kibali we expect the company to start ramping up its dividend.
In our view investors with a positive view on the gold price would view Randgold as one of the better
opportunities since it is well protected on the downside with low-cost assets and operates in three countries
across four mines. But given our expectation for a weak outlook for gold, we believe the broader market will
continue to have a muted interest in the stock.
Valuation
We value Randgold using a 50/50 blend of our P/E valuation (a target multiple of 20x based on our GS SUSTAIN
framework (see Appendix 1) applied to our 2015 (previously 2014) earnings estimate) and our NAV estimate.
This results in our new 12-month price target of 5,700p (from 5,650p), implying 24% upside. We are Neutral
rated on the stock.
Key risks
Randgold operates in Mali (Loulo, Gounkoto, Morila), Cote dIvoire (Tongon) and the DRC (Kibali). All three
countries have experienced political instability in recent years. However, this has abated somewhat more
recently, though it remains a risk. The diversity of Randgolds operations across multiple countries helps, but we
believe country-specific risk impacting production or costs in the future are significant. Additional risks include a
weaker/stronger gold price and execution success/failure at Kibali.
12 month
(33.6)
(44.1)
Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 9/11/2013 close.
Source: Company data, Goldman Sachs Global Investment Research, FactSet.
24
September 12, 2013
Exhibit 26: Randgold Resources financial and operating data, 2011-15E

per-share data in US cents
Decyearend
Profitmodel($mn)
2011
Totalrevenue
1,131
1,329
1,138
1,201
1,399
562
629
641
738
758
Operatingcosts
2012
2013E
2014E
2015E
EBITDA
570
699
497
464
641
Depreciation&amortisation
EBIT
82
488
132
567
151
346
180
284
200
441
Netfinancecost
ShareofprofitsofequityaccountedJVs
UnderlyingPretaxprofit
Incometax
Taxrate(%)
2011
2014E
2015E
Pricetarget(12months,GBp)
5,700 EV($USm)/resource(Moz)
316
4,614 EV($USm/reserves(Moz)
562
Upside(downside)
24% NAV($USm)
Recommendation
Consolidatedproductionsummary(koz)
3,931
Neutral
11
Loulo
346
503
516
633
54
48
75
Morila
99
81
64
43
24
485
568
401
336
527
Tongon
250
210
239
246
260
52
58
49
50
105
Kibali
11%
10%
12%
15%
20%
Totalgoldproduction
56
79
53
44
65
1,200
376
432
299
242
356
1,000
UnderlyingpreexceptionalEPS
412
469
324
262
386
Netprofit(inc.Extraordinaries)
367
429
298
242
356
EPS
402
466
323
262
386
91
92
92
92
92
GoldProduction(Koz)
Minorities
Weightedsharesoutstanding(mn)
2013E
Lastclose
Underlyingpreexceptionalprofit
TotalExtraordinaries
2012
Salientmetrics
642
11
131
239
696
794
831
1,053
1,166
800
600
400
200
40
50
49
26
71
10%
11%
15%
10%
18%
123.1%
247%
17.4%
23%
14.4%
29%
5.6%
7%
16.5%
38%
EBITgrowth
258%
16%
39%
18%
56%
Loulo
264
462
297
224
EPSgrowth
253%
16%
31%
19%
65%
Morila
79
72
43
17
11
DPSgrowth
100%
25%
2%
46%
99%
Tongon
274
190
123
67
93
DPS(UScents)
Dividendpayoutratio(%)
Growth&margins(%)
Revenuegrowth
EBITDAgrowth
0
2011
Morila
2013E
Tongon
Kibali
2014E
2015E
DivisionalEBITDA
EBITDAmargin
50%
53%
44%
39%
46%
Kibali
EBITmargin
Cashflowstatement($mn)
Netincome
43%
43%
30%
24%
32%
EBITDAfromMining
368
429
298
242
356
Assumptions
Strippingtransfer
2012
Loulo
294
39
127
617
723
464
348
525
11.00
R/$
7.25
8.21
9.63
10.68
Minorities
56
79
53
44
65
$/
1.60
1.58
1.54
1.53
1.53
DD&A
Other
82
64
132
146
151
8
180
0
200
0
Gold($/oz)
NAVsummary
1,570
$USmn
1,669
1,456
1,144
1200
570
494
510
466
621
Loulo
2,709
Tongon
1,086
448
677
744
374
144
Morilla
Dividends
18
37
46
45
24
Kibali
345
Netcashflowfromoperations
Netdebt(2013)
(32)
4,614
Cashflowfromoperations
PerShare
Capitalexpenditures
103
220
279
47
453
Nonrecurringitems
Minorities&otherliabs
Acquisitions
GroupNAV
Divestments
Workingcapitalmovements
14
255
3,931
GroupNAV(mn)
2,556
34
171
132
87
36
NAV/share(GBp)
2,798
Pricetarget(12month,GBp)
5,700
Other
16
277
73
Surplus/deficit
Balancesheet($mn)
122
114
338
134
489
P/NAVatpricetarget
Valuation(x)
2.04
Cash&Cashequivalents
488
387
35
169
658
Shareprice(Avg,GBp)
5,696
6,407
4,614
4,614
Stocks
219
292
368
302
275
MarketCap(Avg,mn)
5,203
5,898
4,254
4,254
4,254
Debtors
131
285
258
212
193
EV(US$mn)
7,954
9,148
6,890
6,801
6,377
4.6
Othercurrentassets
7.0
6.9
6.1
5.7
Totalcurrentassets
845
968
663
684
1,126
EV/EBITDA
14.0
13.1
13.9
14.7
9.9
Netfixedassets
1,279
1,742
1,530
1,724
1,668
P/E
22.1
21.7
22.5
27.9
18.9
Netintangibles
406
406
1,109
1,109
1,109
EquityMethodinvestments
Otherlongtermassets
11
2,533
3,127
3,304
3,519
3,905
159
216
122
100
Shorttermdebt
Othercurrentliabilities
0
19
0
20
0
21
Totalcurrentliabilities
178
236
3
58
Totalassets
Accountspayable
Longtermdebt
Otherlongtermliabilities
Totalliabilities
Totalcommonequity
Minorityinterest
Totalliabilities&equity
EV/sales
Dividendyield
FCFyield
0%
0%
1%
0%
1.0%
1.8%
3.7%
5.3%
2.6%
7.3%
EV/GCI
3.8
3.2
1.9
1.8
1.6
EV/capitalemployed
3.5
3.3
2.2
2.0
1.7
91
Price/book
3.6
3.4
2.2
2.0
1.8
0
17
0
16
Ratios
143
117
107
CROCI
30%
20%
16%
12%
16%
17
3.9
2.6
2.0
1.6
2.0
89
76
76
76
26%
24%
14%
11%
15%
238
342
222
197
186
2,184
2,619
2,886
3,083
3,415
110
166
195
239
304
2,533
3,127
3,304
3,519
3,905
Workingcapital
362
443
448
461
467
Netdebt/(cash)
485
371
32
166
655
Capitalemployed
2,297
2,802
3,085
3,325
3,722
CROCI/WACC
ROIC
ROIC/WACC
3.4
3.1
1.8
1.5
1.9
ROA
17%
15%
9%
7%
10%
Netdebt/equity
22%
14%
1%
5%
19%
Netdebt/EBITDA
85%
53%
6%
36%
102%
0.3
0.2
0.0
0.1
0.2
8%
8%
8%
8%
8%
189
668
203
57
40
Gearing
WACC
EBITinterestcover
25
September 12, 2013
African Barrick Gold (ABGL.L): Turnaround plans stabilises, but reiterate Sell on valuation
Investment Profile
What happened
Low
High
Growth
Growth
Returns *
Returns *
Multiple
Multiple
Volatility
Volatility
20th
Percentile
40th
60th
80th
100th
African Barrick Gold (ABGL.L)


ABGs shares are up 77% since hitting a low of 96p on June 28 this year. In our view the outperformance has
been driven by: 1) the increase in the gold price (+20% off lows); 2) the markets response to ABGs turnaround
plan; and 3) Barricks intention to sell the company. Investors have logically sought a leveraged producer in a
rising gold price environment.
We remove African Barrick from our Pan-Europe Conviction Sell List. Since being added to the Conviction Sell
List on May 3, 2013, the shares are up 11.3% vs. FTSE World Europe +2.5%. Over the last 12 months, the shares
are down 63.6% vs. FTSE World Europe up 18.8%.
Current view
Key data
Current
Price (p)
12 month price target (p)
Market cap ( mn)
Revenue ($ mn) New

EBIT ($ mn) New
EBIT revision (%)
EPS ($) New
EPS ($) Old
EV/EBITDA (X)
P/E (X)
Dividend yield (%)
FCF yield (%)
CROCI (%)
12/12
1,087.3
0.0
172.0
0.0
0.15
0.15
7.1
46.0
2.4
(4.3)
7.5
12/13E
896.6
(2.1)
33.4
(14.2)
0.06
0.06
5.3
43.4
0.7
(15.8)
4.8
12/14E
734.1
(19.9)
20.5
(54.7)
0.02
0.06
7.6
129.2
0.7
(5.3)
3.3
170
110
(35)
697.2
991.2
12/15E
801.6
(15.0)
101.1
254.8
0.15
0.03
4.8
17.7
1.1
1.9
5.0
We remain bearish on ABG given its constrained capacity to make cash at both current and our forecast gold
prices. The cost optimization plan via which the company plans to save US$185 mn (US$100 mn in 2013 15%
in operating costs and 30% in corporate overheads) is insufficient and on our estimates ABG continues to burn
cash through to 2015E. Management is doing the right things but we believe gold will decline into 2014 and
further restructuring will thus be required.
Consistent with our note Survival of the fittest as lower gold price puts high-cost mines in jeopardy, May 3,
2013, we continue to believe that even with the cost optimization plan in place ABGs total operating cost is still
above our 2014/15 gold price estimates of US$1,144/oz and US$1,200/oz. And this we believe cannot easily be
remedied as the already-high sustaining capex is largely related to overburden stripping (i.e. required to prepare
for mining) in 2013 and 2014, or to delivering lower cost growth ounces at Buly. As such, reducing capex is not
likely to be straightforward. In addition, ABG is mining close to its reserve grade based on current reserves, so it
is likely that the company does not have the flexibility to high-grade the mines.

500
430
450
420
400
410
350
400
300
390
250
380
200
370
150
360
350
100
50
Sep-12
340
Dec-12
African Barrick Gold (L)

Absolute
Mar-13
Jun-13
3 month
33.4
27.3
6 month
(28.2)
(28.7)
12 month
(63.6)
(69.3)
Also, given the uncertainty surrounding the operations following the resignation of the COO (new CEO Brad
Gordon will take responsibility for all operations until a replacement is found) we highlight that the company
may not be able to get to the higher end of guidance of 540-600koz (1H13 production was 311koz).
We value ABG using a 50/50 blend of our P/E valuation (applying a target multiple of 7x based on our GS
SUSTAIN framework (see Appendix 1) to our 2015 earnings estimate previously 2014) and our NAV estimate.
This results in our new 12-month price target of 110p (was 100p), implying 35% downside. We reiterate our Sell
rating on the stock. The stock is overly expensive in our view trading at 2013/14E P/Es of 43.4x/129x vs. coverage
average of 29x/61x.
The key upside risks come from a higher gold price than we anticipate and better-than-forecast production. A
faster execution of portfolio review would be a positive catalyst. At current reduced valuation levels it is possible
that another M&A offer may emerge as Barrick Gold (ABX), the owner of 75% of the shares, seeks to rationalise
its portfolio.
26
September 12, 2013
Exhibit 27: Share price performance of African Barrick Gold vs. per group
Share prices as of the close of September 11, 2013
Company
Ticker
Primary analyst
ABGL.L
AMIq.L
AAL.L
ANTO.L
AQP.L
AUE.L
BAA.TO
BLT.L
BOL.ST
CEY.L
EDV.TO
FQM.L
FRES.L
GEMD.L
GLEN.L
HOCM.L
KAZ.L
KIOJ.J
LOND.L
LMI.L
LUN.TO
NHY.OL
NYR.BR
PDL.L
PTM.TO
RRS.L
RIO.L
SMF.TO
VED.L
Eugene King
Fawzi Hanano
Eugene King
Fawzi Hanano
Eugene King
Eugene King
Eugene King
Michele della Vigna, CFA
Eugene King
Eugene King
Eugene King
Fawzi Hanano
Eugene King
Eugene King
Eugene King
Eugene King
Fawzi Hanano
Fawzi Hanano
Fawzi Hanano
Eugene King
Fawzi Hanano
Eugene King
Eugene King
Eugene King
Eugene King
Eugene King
Michele della Vigna, CFA
Eugene King
Fawzi Hanano
Price
currency
Price as of Sep
11, 2013
Price performance
since May 3, 2013
3 month price
performance
6 month price
performance
12 month price
performance
170.00
167.00
1609.50
886.00
50.75
38.00
0.72
1932.50
104.80
46.20
0.77
1154.00
1218.00
165.25
339.00
278.00
309.20
482.00
122.00
348.10
4.88
25.36
3.86
123.40
1.15
4614.00
3207.00
2.00
1194.00
11.3%
-26.0%
-1.6%
-5.1%
21.6%
-6.7%
-33.3%
4.6%
1.7%
7.0%
-22.2%
-1.6%
1.3%
28.6%
-1.4%
8.5%
-17.0%
0.7%
10.2%
21.6%
17.9%
-7.4%
2.4%
16.4%
0.0%
-9.6%
6.1%
0.5%
-5.4%
33.4%
-21.9%
17.4%
0.2%
21.6%
15.6%
-35.1%
8.7%
14.0%
28.3%
-2.5%
4.2%
13.2%
32.2%
12.1%
27.7%
2.8%
2.0%
15.1%
24.0%
21.1%
-1.7%
4.3%
4.3%
6.5%
-6.3%
18.7%
3.6%
0.4%
-28.2%
-34.6%
-13.5%
-14.8%
-3.3%
3.4%
-63.6%
-9.1%
-4.6%
-11.9%
-51.6%
-13.7%
-18.3%
1.4%
-12.8%
-21.5%
-40.6%
-13.0%
-20.5%
4.9%
0.2%
-0.9%
-7.6%
3.4%
-18.4%
-15.4%
-6.7%
-21.3%
0.6%
-63.6%
-43.2%
-17.7%
-23.9%
33.1%
-40.6%
-84.3%
0.7%
-2.2%
-45.7%
-63.5%
-17.3%
-28.6%
-6.7%
-7.0%
-38.4%
-54.4%
-3.0%
-21.0%
7.1%
-0.4%
-6.3%
-18.8%
24.9%
0.0%
-33.6%
4.5%
-49.2%
22.0%
418.35
2.5%
4.8%
0.7%
18.8%
Europe Mining Peer Group

African Minerals
Anglo American plc
Antofagasta plc
Aquarius Platinum
Aureus Mining
Banro Corporation
BHP Billiton Plc
Boliden
Centamin Plc
Endeavour Mining
First Quantum Minerals
Fresnillo PLC
Gem Diamonds
Glencore Xstrata plc
Hochschild Mining Plc
Kazakhmys
Kumba Iron Ore
London Mining
Lonmin
Lundin Mining Corporation
Norsk Hydro
Nyrstar
Petra Diamonds
Platinum Group Metals Ltd.
Randgold Resources
Rio Tinto plc
Semafo, Inc.
Vedanta Resources
FTSE World Europe (GBP)
p
p
p
p
p
p
C$
p
Skr
p
C$
p
p
p
p
p
p
R
p
p
C$
Nkr
p
C$
p
p
C$
p
Note: Prices as of most recent available close, which could vary from the price date indicated above
This table shows movement in absolute share price and not total shareholder return. Results presented should not and cannot be viewed as an indicator of future performance.
Source: FactSet, Goldman Sachs Global Investment Research.
27
September 12, 2013
African Barrick: Our thesis in charts

Exhibit 28: Production is rising but costs are not relenting
Exhibit 29: On our 2014E gold price, ABGs mines do not generate cash
ABG production and total cash costs (US$/oz)
ABG total cash cost mine-wise
800
1,400
700
1,200
TCC ($US/oz)
2,000
600
1,000
500
800
400
600
300
US$/oz
Au(Koz)
2,500
200
100
0
Gold:1,144/oz
1,000
400
200
Gold:1,456/oz
1,500
500
0
2011
2012
2013E
Production
2014E
2015E
2016E
Bulyanhulu
TCC(US$/oz)
Buzwagi
FY2013E
North Mara
FY2014E
Exhibit 30: Cash burn continues into 2014; barely making cash into 2015/16
Exhibit 31: Net cash position deteriorates into 2014
CGO, capex, dividends, total cash flow
Net cash position of ABG
600
400
200
US$mn
US$mn
200
0
400
600
200
400
800
CFO
600
2011
Capex
2012
Dividends
2013E
2014E
TotalCashflow
2015E
2016E
2011
2012
2013E
2014E
2015E
2016E
NetDebt
28
September 12, 2013
Exhibit 32: African Barrick Gold financial and operating data, 2011-15E
per-share data in US cents (priced at close of September 11)
Decyearend
Profitmodel($mn)
2011
Totalrevenue
1,218
1,087
897
734
802
674
756
708
596
581
Operatingcosts
EBITDA
EBIT
Netfinancialincome/(expense)
Pretaxprofits
2012
2013E
2014E
2015E
2011
2012
2013E
2014E
2015E
Salientmetrics
544
331
189
139
220
134
410
159
172
155
33
118
21
119
101
110 EV($USm)/resource(Moz)
39
Lastclose(GBp)
170 EV($USm)/reserves(Moz)
54
Upside(downside)
35% NAV($USm)
700
Recommendation
Sell
NorthMara
171
193
221
182
182
403
164
26
12
92
Bulyanhulu
262
236
198
240
276
190
Incometax
118
71
13
28
Buzwagi
197
166
162
168
Taxrate(%)
29%
43%
50%
27%
30%
Tulawka
59
31
Minorities
10
11
12
688
626
585
590
648
Underlyingpreexceptionalprofit
275
104
25
62
800
67
25
15
700
45
729
275
59
704
62
67
15
172
15
UnderlyingEPS(US$)
0.67
0.25
0.06
0.02
0.15
410
410
410
410
410
DPSdeclared(US$cents)
16.30
16.30
2.00
2.00
5.00
Growth&margins(%)
24.3%
112.4%
1.2%
96.1%
33.0%
CompanyExtraordinaries
Netincome(postexceptionals)
PostExceptionalsEPS(cents)
Goldproduction(koz)
UnderlyingEPS(US$cents)
Goldproduction(koz)
600
500
400
300
200
100
0
2011
2012
NorthMara
2013E
Tulawka
2014E
Bulyanhulu
2015E
Buzwagi
Revenuegrowth
EBITDAgrowth
25%
30%
11%
39%
18%
43%
18%
27%
9%
59%
EBITgrowth
32%
58%
81%
39%
393%
NorthMara
810
965
810
908
EPSgrowth
26%
62%
76%
101%
629%
Tulawaka
727
1,269
DPSgrowth
208%
0%
88%
0%
150%
Bulyanhulu
610
803
997
757
686
Cashoperatingcost/oz(US$/oz)
858
EBITDAmargin
45%
30%
21%
19%
27%
Buzwagi
691
1,087
1,077
1,016
839
EBITmargin
Cashflowstatement($mn)
34%
16%
4%
3%
13%
Groupaverage
DivisionalEBITDA($mn)
693
956
970
846
739
Netincome
129
118
132
36
55
68
16
(14)
257
204
74
88
136
275
59
704
62
NorthMara
Addbacktaxshield
71
13
28
Tulawka
Strippingtransfer
Minorities
Bulyanhulu
10
11
12
Buzwagi
166
86
86
38
49
DD&A
Other
134
83
159
20
155
728
118
0
119
0
EBITDAfrommining
Assumptions
619
424
278
162
240
502
258
181
130
211
$/
1.60
1.58
1.54
1.53
1.53
/$
0.72
0.78
0.76
0.77
0.77
338
343
427
210
165
1,570
1,669
1,456
1,144
1,200
Pershare($)
Capitalexpenditures
Gold($/oz)
Dividends
28
70
55
12
Silver(USc/oz)
35.23
31.09
24.57
19.06
21.05
Nonrecurringitems
136
0
156
0
301
0
88
0
34
0
Copper($/t)
NAVsummary
8,823
$USmn
7,950
7,216
6,600
6,875
Acquisitions
NorthMara
Divestments
Tulawaka
13
33
71
21
26
Other
Surplus/deficit
Balancesheet($mn)
33
50
183
2011
183
2012
280
2013
67
2014
9
2015
Buly
Buzwagi
73
0
619
55
Netdebt(2013)
Minorities&otherliabs
122
169
700
584
401
261
228
228
GroupNAV($USmn)
Stocks
317
335
224
199
230
GroupNAV(mn)
442
30
44
30
26
30
NAV/share(GBp)
108
110
P/NAVatpricetarget
1.0
Receivables
Othercurrentassets
37
47
80
71
82
TotalCurrentassets
968
828
596
525
570
Grossfixedassets
AccumulatedDD&A
2,597
774
2,925
962
3,341
1,893
3,551
2,011
3,716
2,130
Netfixedassets
1,823
1,964
1,449
1,541
1,586
475
509
509
509
509
216
230
297
297
297
259
278
211
211
211
244
259
254
254
254
3,294
3,329
2,509
2,530
2,621
162
170
136
121
140
Shorttermdebt
Othershorttermliabilities
10
10
1
170
1
178
11
157
11
141
11
161
Grossintangibles
Accumulatedamortisation
Netintangibles
Totalinvestments
Otherlongtermassets
Totalassets
Accountspayable
Provisions
Longtermdebt
ADAPTPRICE
Valuation
Shareprice(Avg,GBp)
514
421
175
176
176
MarketCap(Avg,GBPmn)
3,382
2,735
1,102
1,102
1,102
EV($USmn)
2,835
2,356
991
1,059
1,052
EV/sales
2.3
2.2
1.1
1.4
1.3
EV/EBITDA
5.2
7.1
5.3
7.6
4.8
P/E
12.3
26.3
43.4
129.2
17.7
Dividendyield
1.9%
2.0%
2.4%
0.7%
0.7%
FCFyield
5%
4%
16%
5%
2%
EV/GCI
0.9
0.6
0.2
0.3
0.2
EV/capitalemployed
Price/book
Ratios
140
173
165
CROCI
326
375
205
205
205
CROCI/WACC
Totallongtermliabilities
326
375
344
378
369
ROIC
Totalliabilities
496
554
501
519
530
ROIC/WACC
2,761
2,752
1,997
2,001
2,078
37
23
10
11
13
Totalcommonequity
Minorityinterest
FY1
ROA
Netdebt/equity
1.0
0.8
0.5
0.5
0.5
76.4
62.7
35.9
36.0
34.6
16.3%
7.5%
4.8%
3.3%
5.0%
2.0
0.9
0.6
0.4
0.6
11%
5%
5%
1%
4%
1.4
0.6
(0.7)
0.1
0.4
9%
2%
24%
0%
2%
21%
15%
6%
3%
3%
10.2
3,294
3,329
2,509
2,530
2,621
5.1
8.4
11.4
15.8
Workingcapital
215
248
177
156
182
Gearing
27%
17%
6%
3%
3%
Netdebt/(cash)
584
401
122
54
63
WACC
8.0%
8.0%
8.0%
8.0%
8.0%
Capitalemployed
2,799
2,775
2,147
2,185
2,256
EBITinterestcover
56.6
21.0
4.7
2.4
11.3
Netdebt/EBITDA
29
September 12, 2013
AngloGold Ashanti (ANGJ.J): Balance sheet shored up but portfolio restructuring ahead,
strikes a risk; Sell
Investment Profile
Whats changed
Low
High
Growth
Growth
Returns *
Returns *
Multiple
Multiple
Volatility
Volatility
20th
Percentile
40th
60th
80th
100th
AngloGold Ashanti (ANGJ.J)


Key data
Current
Price (R)
12 month price target (R)
Market cap (R mn)
134.45
120.00
(11)
51,846.4
8,984.6
12/15E
5,477.4
(6.4)
388.3
(41.9)
0.22
0.69
6.3
60.6
1.5
(2.5)
6.3
Revenue ($ mn) New

EBIT ($ mn) New
EBIT revision (%)
EPS ($) New
EPS ($) Old
EV/EBITDA (X)
P/E (X)
Dividend yield (%)
FCF yield (%)
CROCI (%)
12/12
6,353.0
0.0
1,589.0
0.0
4.08
2.15
7.0
8.8
1.0
(3.4)
10.4
12/13E
5,406.1
0.7
665.0
(23.7)
1.26
0.87
5.6
10.8
0.4
(18.4)
5.7
12/14E
4,799.9
(14.8)
104.3
(86.9)
(0.21)
0.81
8.4
NM
0.0
(3.3)
5.2

350
440
300
420
250
400
200
380
150
360
100
Sep-12
340
Dec-12
AngloGold Ashanti (L)

Absolute
Mar-13
Jun-13
3 month
(19.8)
(23.5)
6 month
(40.6)
(41.0)
12 month
(52.2)
(59.8)
We update our estimates for the 2Q13 results and our revised gold price estimates. Production came in at 935koz
at a total cash cost (TCC) of US$898/oz. The company reiterated full year guidance of 4-4.1moz at a TCC of
US$815-845/oz. The company, like others in our coverage, focused on increased capital discipline by reducing
capex by c.US$100-150 mn, exploration expenditure by US$40 mn to US$377 mn. Corporate costs for FY13/14
were reduced by US$51 mn and c.US$130 mn respectively. We remove AngloGold from our CEEMEA Focus List
following recent underperformance.
Implications
Our 2013/14/15 underlying EPS moves to $1.26/-0.21/0.22. On our estimates, AngloGold is burning cash through
to 2015. The above-CPI wage hikes offered to workers (7%-8%) and the constant threat of strikes (platinum sector
wage negotiations up next) could further intensify the cash burn. Also we believe that the guidance for 2013 is
overly optimistic given that production for 1H was 1.8moz at a TCC of 895/oz. On our estimates (even after taking
the planned start-up of Kibali in 4Q) ANG will produce c. 3.8moz (vs. 4moz+ guidance) at a C1 cash cost of
US$848/oz. The new CEO (Venkat, previously CFO) has acted decisively to shore up the balance sheet. The newly
issued US$1.25 bn bond will both replace the May 2014 convertible (c.US$725 mn) and provide some additional
headroom. The new bonds coupon is 8.5% (compared to 3.5% for the convertible) implying an additional
US$40 mn interest costs. Additionally, the relaxation of the 3x net debt to EBITDA covenant to 4.5x for the next
two periods (FY14 and 1H2014) means that there is no imminent risk of the company breaching debt covenants
but on our estimates it could face this issue at end 2014. The net debt to EBITDA for FY2014 on our estimates is
3.21x. With most of the work on the balance sheet done, attention is now likely to turn to improving the
portfolio. ANG has multiple mines which are high cost (even after the cost reduction effort) and have short lives.
The company in our view needs to cut costs quickly and sell loss-making assets. Many of these assets are in
South Africa which 1) makes significant labour reductions hard to achieve (cf. the recent Anglo Plat attempt) and
2) asset sales hard to realize; in addition 3) recurring strike action and work stoppages could further impact cash
flow.
Valuation
We value AngloGold using a 50/50 blend of our P/E valuation (a target multiple of 9x based on our GS SUSTAIN
framework (see Appendix 1) applied to our 2015 earnings, previously 2014) and our NAV estimate. This results
in a 12-month price target of R120 (from R115), implying 11% downside. We reiterate our Sell rating.
Key risks
A higher gold price and no significant work stoppages owing to strike action by unions are the key risks to our
view and price target.
30
September 12, 2013
Exhibit 33: AngloGold Ashanti operating and financial metrics 2011-15E

Per share data in USD
Dec year end
Profit model ($ mn)
Total revenue
2011
2012
2013E
2014E
2015E
6,570
6,353
5,406
4,800
5,477
-3,721
-3,554
-3,800
-3,704
-4,000
EBITDA
2,849
2,799
1,606
1,096
1,477
Depreciation & amortisation

EBIT
-778
2,071
-808
1,991
-941
665
-992
104
-1,089
388
Operating costs
2011
2012
2013E
2014E
2015E
Salient metrics
Price target (12 months, ZAR)
120
EV ($USm) / resource
58
Last close
134
EV ($USm) / reserves
122
Upside (downside)
-11%
Recommendation
Consolidated production summary (koz)
NAV ($USm)
2,021
Sell
Net Financial Income
44
64
91
-223
-263
South Africa
1,622
1,213
1,284
1,290
1,298
Share of equity a/c'd investments
74
-28
-190
Continental Africa
1,570
1,525
1,330
1,540
1,683
Exchange gain
-1
Australia
246
258
248
504
654
Pretax profits
2,350
2,000
667
-118
125
Americas
888
942
949
1,011
1,100
Total gold production
4,325
3,937
3,811
4,345
4,734
Income tax
Tax rate (%)
-403
-191
34
-36
-20%
-29%
-29%
-29%
5,000
-46
-19
-9
-2
4,500
1,629
1,578
468
-86
91
4,000
-116
321
2,290
3,500
Adjusted net income
1,629
1,616
485
-82
86
Adjusted EPS (cents)
422
418
126
-21
22
2,500
Reported EPS (cents)
453
325
-469
-21
22
2,000
Weighted shares outstanding (mn)
386
387
385
385
385
1,500
DPS ($)
0.50
0.37
0.05
0.00
0.20
1,000
Dividend payout ratio (%)

Growth & margins (%)
11%
11%
-1%
0%
89%
500
Revenue growth
30%
-3%
-15%
-11%
14%
EBITDA growth
EBIT growth
50%
73%
-2%
-4%
-43%
-67%
-32%
-84%
35%
272%
EPS growth
-56%
-1%
-70%
-117%
-206%
DPS growth
400%
-26%
-86%
-100%
na
EBITDA margin
43%
44%
30%
23%
27%
EBIT margin
Cash flow statement ($ mn)
Net income
32%
31%
12%
2%
7%
1,629
1,616
485
-82
86
19
South Africa
1,412
991
681
346
399
Continental Africa
1,111
1,129
833
558
650
111
100
Australia
115
98
303
415
46
19
-9
-2
Americas
739
955
684
327
427
770
-18
798
-785
941
-295
992
0
1,089
0
3,271
3,190
2,297
1,534
1,891
2,557
1,748
1,122
908
1,178
A/$
0.97
0.97
1.05
1.18
1.18
R/$
7.25
8.21
9.63
10.68
11.00
-1,527
-1,851
-2,015
-1,360
-1,000
$/
-169
861
-236
-339
-53
-946
0
-452
-58
120
500
South Africa
442
-172
-497
Cont. Africa
1,739
1,686
Underlying profit (excl. extraordinaries)

Post tax extraordinaries (for QP)
Stripping transfer
Derivatives cash flow
Dividend/Income received from assoc.
Minorities
DD&A
Other
Cash flow from operations
Per share (USD)
Capital expenditures
Dividends
Net cash flow from operations
Non recurring items
Acquisitions
Divestments
Koz
Minorities
-675
-29%
3,000
0
2011
2012
2013E
2014E
SouthAfrica
ContinentalAfrica
Australia
Americas
Cash Costs per oz produced

South Africa
758
939
937
911
930
Continental Africa
787
939
903
834
862
1,350
1,212
1,165
575
590
719
752
911
883
1,026
894
1,017
815
1,068
823
Australia
Americas
Group Average
Divisional EBITDA
EBITDA from Mining

Assumptions
Gold ($/oz)
NAV summary
1.60
1.58
1.54
1.53
1.53
1,570
$US mn
1,669
1,456
1,144
1,200
2015
110
91
Australia
-220
-318
-66
278
-311
Americas
Other
188
-246
41
Net debt (2013)
(3,598)
Surplus/deficit
Balance sheet ($ mn)
767
-1,309
-471
-174
-191
Minorities
Other BS items
11
(164)
Working capital movements
Cash & Cash equivalents
1,170
956
589
589
589
Stocks
1,064
1,287
1,175
962
1,200
350
470
495
405
506
0
2,584
0
2,713
0
2,259
0
1,956
0
2,294
Debtors
Derivatives
Other current assets
Total current assets
2015E
1,905
Group NAV ($US mn)
2,021
Group NAV (ZAR mn)
19,464
NAV / share (ZAR)

Price target (12-month, ZAR)
ADAPTPRICE
50
120
P/NAV at price target
2.38
Valuation
2011
Gross fixed assets
13,322
15,242
17,257
18,617
19,617
2012
2013
2014
Accumulated DD&A
-6,797
-7,594
-12,150
-13,142
-14,231
Share price (US$, Avg)
45
36
14
14
14
6,525
7,648
5,107
5,475
5,386
Market Cap (US$, Avg)
16,402
11,959
5,233
5,233
5,233
Gross intangibles
270
357
357
357
357
EV (US$ mn)
18,052
14,829
8,985
9,156
9,349
Accumulated amortisation
-60
-42
-76
-76
-76
EV/sales
2.7
2.3
1.7
1.9
1.7
Net intangibles
210
315
281
281
281
EV/EBITDA
6.3
5.3
5.6
8.4
Total investments
888
1,227
1,257
1,257
1,257
P/E
10.7
8.6
10.8
Dividend yield
1.1%
1.0%
0.4%
0.0%
1.5%
FCF yield
4.7%
-3.0%
-18.3%
-3.3%
-2.5%
Net fixed assets
Other long-term assets

Total assets
Accounts payable
Short-term debt
Other current liabilities
Total current liabilities
6.3
60.6
595
792
1,377
1,252
1,391
10,802
12,695
10,280
10,220
10,609
751
979
824
674
841
EV/GCI
1.2
0.8
0.5
0.4
0.4
32
859
1,281
1,281
1,281
EV/capital employed
2.4
1.6
1.2
1.2
1.2
0
783
0
1,838
0
2,105
0
1,955
0
2,122
Price/book
Ratios
Long-term debt
2,456
2,724
2,906
3,079
3,270
CROCI
Other long-term liabilities
2,397
2,664
1,954
1,954
1,954
CROCI / WACC
Total long-term liabilities
4,853
5,388
4,860
5,033
5,224
ROIC
3.5
2.5
1.6
1.6
1.6
17%
10%
6%
5%
6%
2.3
1.4
0.8
0.7
0.8
24%
23%
7%
1%
4%
Total liabilities
5,636
7,226
6,964
6,988
7,346
ROIC / WACC
3.2
3.0
0.9
0.2
0.6
Total common equity
5,029
5,447
3,326
3,245
3,273
ROA
16%
13%
4%
-1%
1%
Net debt / equity
26%
48%
108%
116%
121%
Net debt / EBITDA
46%
94%
224%
344%
268%
Minority interest
137
22
-11
-13
-10
10,802
12,695
10,280
10,220
10,609
Working capital
1,149
1,467
1,533
1,255
1,566
Gearing
21%
33%
52%
54%
55%
Net debt / (cash)
1,318
2,627
3,598
3,772
3,963
WACC
8%
8%
8%
8%
8%
Capital employed
7,654
9,052
7,502
7,592
7,814
EBIT interest cover
-47.1
-31.1
-7.3
0.5
1.5
Total liabilities & equity
31
September 12, 2013
Gold Fields (GFIJ.J): South Deep delays impact investment case but Australia acquisition
a positive; Neutral
Investment Profile
Whats changed
Low
High
Growth
Growth
Returns *
Returns *
Multiple
Multiple
Volatility
Volatility
20th
Percentile
40th
60th
80th
100th
Gold Fields (GFIJ.J)


Key data
Current
Price (R)
Market cap (R mn)
Enterprise value (R mn)
50.40
55.00
9
36,662.9
58,708.1
12/15E
28,297.7
(10.6)
6,195.0
(27.1)
2.88
4.86
5.3
17.5
1.7
5.6
5.0
Revenue (R mn) New

EBIT (R mn) New
EBIT revision (%)
EPS (R) New
EPS (R) Old
EV/EBITDA (X)
P/E (X)
Dividend yield (%)
FCF yield (%)
CROCI (%)
12/12
45,468.8
0.0
14,681.3
0.0
8.59
8.74
4.0
11.1
2.5
(11.0)
11.4
12/13E
26,440.5
1.2
6,366.2
8.7
2.33
1.80
5.2
21.6
0.6
10.5
3.9
12/14E
24,669.5
(8.0)
4,288.5
(13.7)
1.26
1.73
6.9
40.0
0.6
(0.8)
4.1
We update our estimates for the 2Q13 results and revised guidance. Production results were in line with our
estimates but financials were skewed by the impairment charges the company took at its Ghana operations
(US$127 mn). GFI reiterated its production guidance at 1.82-1.9moz at a reduced cash cost of US$830/oz
(previously US$860/oz). It also announced stoppage of the Tarkwa heap-leach operations which on our
estimates will have a production impact of c.100-125koz. In common with the rest of the industry, the company
has implemented a cost cutting programme by cutting staff, reducing capex (FY13 guidance is now US$790 mn
vs. US$970 mn) and exploration budget (reduced to US$80 mn from US$130 mn).
The two most significant announcements were: 1) the ramp-up of South Deep is running behind schedule and
the company is unlikely to be able to hit the targeted 700koz annual run-rate in 2016; and 2) GFI will acquire
three Australian mines from Barrick Gold (NYSE:ABX) which delivered c.420koz in 2012 for c.US$300 mn,
pending regulatory approval.
Implications
We update our model for 2Q13 results including lower production from South Deep in 2013-16, but not for the
acquisition as it has yet to close. We provide pro-forma analysis of the acquisition for comparison. Our
2013/14/15 EPS estimates move +29%/-27%/-41% on lower costs in the near term but lower production in 2015,
which lowers earnings. The immediate negative reaction of the shares post the results reflects the
disappointment from yet another delay to the South Deep project. Cuts to the ramp-up of South Deep impact the
investment case for GFI as the mine was planned to add c.450koz production at c.US$750/oz costs by 2016 with
the capital largely spent.
The acquisition of Barricks Australian assets for US$300 mn for c.400-450k oz annual production appears
relatively cheap compared to recent deal comps. The assets have a relatively short life of c.6 years (c.2.6moz
reserves) but the deposit types have relatively short reserve lives that are typically extended as mining expands
into new areas.
100
460
90
440
80
420
70
400
60
380
Valuation
50
360
40
Sep-12
340
We value GFI using a 50/50 blend of our P/E valuation (a target multiple of 8x based on our GS SUSTAIN
framework (see Appendix 1) applied to our 2015 earnings, previously 2014) and our NAV estimate. This results
in a 12-month price target of R55 (was R58), implying 9% upside. We stay Neutral on valuation but look for news
on the South Deep production profile and the deal closure.
Dec-12
Gold Fields (L)

Absolute
Mar-13
Jun-13
3 month
(16.4)
(20.2)
6 month
(30.6)
(31.1)
12 month
(45.3)
(54.0)
Key risks
Higher/lower gold price and/or a weaker/stronger rand, outcome from wage negotiations, and execution
success/failure at South Deep are key risks to our view and price target.
32
September 12, 2013
Exhibit 34: Gold Fields financial and operating data, 2011-15E

per-share data in ZAR
Dec year end
Profit model (ZAR mn)
2011
2012
2013E
2014E
2015E
41,877
45,469
26,440
24,669
28,298
-20,765
-24,493
-15,225
-16,039
-17,381
EBITDA
21,112
20,976
11,215
8,631
10,917
Upside (downside)
-5,656
-6,294
-4,849
-4,342
-4,722
Recommendation
EBIT
15,456
14,681
6,366
4,289
6,195
-61
-304
-486
-535
-535
1,100
935
Beatrix
347
289
32
-3
-37
South Deep
273
270
302
395
480
540
Total revenue
Operating costs
Net financial income

Unrealised gain on financial instruments
Realised (loss)gain on financial instruments
Gain (loss) on FX
2011
2012
2013E
2014E
2015E
Salient metrics
55
EV ($USm) / resource
53
Last close (ZAR)
50
EV ($USm) / reserve
102
9%
NAV (US$ mn)
2,942
Neutral
Consolidated production summary (koz)

KDC
66
-113
115
Tarkwa
717
719
579
514
Other costs/income
-237
-255
-281
-240
-240
Damang
218
166
142
163
177
Share-based payments
-479
-636
-434
-200
-200
Australia
659
626
602
640
625
Exploration expense
-958
-1,414
-1,201
-800
-800
Cerro Corona
29
-314
-231
-200
-200
Total gold production
Associates
Profit from disposals
4,000
Royalties
-1,081
-1,238
-832
-757
-856
3,500
Underlying pre-tax profits
12,766
10,404
2,979
1,556
3,364
342
293
328
336
3,347
1,918
2,040
2,159
3,000
-36%
-36%
-36%
-36%
-36%
-4,508
-3,879
-1,171
-498
-1,076
-780
-273
-92
-129
-164
Underlying profit
7,478
6,252
1,716
929
2,124
1,500
Underlying EPS
10.34
8.59
2.33
1.26
2.88
1,000
-310
-552
-1,087
Reported net profit
7,168
5,700
629
929
2,124
EPS (basic, reported)
9.91
7.84
0.85
1.26
2.88
723
727
737
737
737
DPS declared (ZAR cents)
330
235
30
32
87
32%
27%
13%
25%
30%
Notional Cash Expenditure Margin (NCE)

KDC
23%
16%
0%
0%
0%
-16%
9%
-42%
-7%
15%
Beatrix
25%
18%
0%
0%
0%
Income tax
Minorities
Post tax extraordinaries

Revenue growth
EBITDA growth
2,500
Koz
Tax rate (%)
388
3,701
2,000
500
0
2011
KDC
Beatrix
2012
South Deep
2013E
Tarkwa
2014E
Damang
Australia
2015E
Cerro Corona
2%
-1%
-47%
-23%
26%
South Deep
-33%
-37%
-29%
-6%
20%
EBIT growth
18%
-5%
-57%
-33%
44%
Tarkwa
42%
37%
23%
11%
18%
EPS growth
-15%
-17%
-73%
-46%
129%
Damang
33%
44%
8%
2%
7%
DPS growth
74%
-29%
-87%
6%
174%
Australia
23%
11%
25%
15%
31%
EBITDA margin
50%
46%
42%
35%
39%
Cerro Corona
60%
52%
43%
46%
50%
EBIT margin
37%
32%
24%
17%
22%
Total Group
25%
19%
15%
11%
24%
Cash flow statement

Net income
Assumptions
7,478
6,252
2,459
929
2,124
780
273
92
129
164
DD&A
-5,656
-6,294
-4,849
-4,342
-4,722
Other
1,832
1,199
-2,394
15,746
14,018
5,006
5,400
7,009
22
19
10
-9,988
-13,063
-7,506
-5,964
-4,230
Dividends
-1,531
-2,943
-558
-390
-374
Tarkwa
4,227
-1,988
-3,058
-954
2,406
Damang
St Ives-Agnew
8,018
Acquisitions
-7,884
Cerro Corona
11,264
Divestments
Net debt (2013)
17,361
-755
-9,091
6,834
244
-449
Other
-1,074
9,720
-10,317
Surplus/deficit
-5,486
-1,360
-6,541
-710
1,957
Total NAV (ZAR mn)
6,049
5,196
4,129
3,419
5,376
55
P/NAV (at PT)
1.4
8,027
9,776
7,860
7,142
8,464
18,241
Share price (Avg)
101
96
50
50
50
Current assets
14,076
33,213
11,989
10,561
13,840
Market Cap (Avg)
72,951
69,647
37,123
37,123
37,123
Net fixed assets
62,683
53,789
60,241
61,863
61,371
EV (ZAR mn)
86,271
84,600
58,708
59,547
57,753
Net intangibles
4,459
4,459
4,459
4,459
4,459
EV/sales
2.1
1.9
2.2
2.4
2.0
821
2,318
2,821
2,821
2,821
EV/EBITDA
4.1
4.0
5.2
6.9
5.3
2,244
1,267
1,557
1,557
1,557
P/E
9.8
11.1
21.6
40.0
17.5
Minorities

Per share (Rand)

Non recurring items
Balance sheet
Stocks
Debtors
Total investments
Total assets
ZAR/$
7.25
8.21
9.63
10.68
11.00
$/
1.60
1.58
1.54
1.53
1.53
$/AUD
0.97
0.97
1.05
1.18
1.18
Gold ($/oz)
1,570
1,669
1,456
1,144
1,200
Copper (USD/t)
8,823
7,950
7,216
6,600
6,875
NPV
ZAR mn
South Deep
29,258
3,570
316
Minorities
4,225
Other BS items
2,516
28,324
Shares outstanding (mn)
737
Valuation
84,282
95,046
81,068
81,261
84,048
Dividend yield
3.3%
2.5%
0.6%
0.6%
1.7%
Accounts payable
7,617
8,002
5,192
4,718
5,591
FCF yield
6.9%
-11.7%
11.7%
-0.9%
6.3%
Short-term debt
4,447
343
1,474
1,474
1,474
EV/GCI
0.8
0.6
0.4
0.4
0.4
10,513
EV/capital employed
1.4
1.2
0.9
0.9
0.8
12,064
18,858
6,666
6,192
7,065
Price/book
1.5
1.3
0.8
0.8
0.8
Long-term debt
11,062
15,673
20,016
20,016
20,016
Ratios
CROCI
15.1%
11.4%
3.9%
4.1%
5.0%
1.82
1.36
0.47
0.49
0.61
19.3%
16.5%
7.1%
4.8%
6.8%
Other current liabilities
13,095
7,357
8,272
8,272
8,272
24,157
23,030
28,288
28,288
28,288
CROCI / WACC (x)
Total liabilities
36,221
41,888
34,954
34,479
35,353
ROIC
Total common equity
44,202
49,024
41,889
42,429
44,179
3,860
4,133
4,225
4,353
4,517
Minority interest
Preference
Working capital
Net debt / (cash)
Capital employed
ROIC / WACC (x)
2.3
2.0
0.8
0.6
0.8
9.2%
6.4%
0.7%
1.1%
2.6%
Net debt / equity
0.21
0.22
0.41
0.43
0.36
Net debt / EBITDA
0.45
0.52
1.55
2.09
1.48
ROA
84,282
95,046
81,068
81,261
84,048
411
9,502
2,668
2,424
2,873
Gearing
0.18
0.18
0.29
0.30
0.27
9,460
10,820
17,361
18,071
16,113
WACC
8.3%
8.3%
8.3%
8.3%
8.3%
63,571
69,173
67,603
68,272
70,185
EBIT interest cover
253.4
48.3
13.1
8.0
11.6
33
September 12, 2013
South Deep delays impact investment case but Australia acquisition a positive; Neutral
Gold Fields 2Q13 production results were in-line with our estimates with financials skewed owing to an impairment charge
at the Ghana operations (US$127 mn). The outlook for production from existing projects is however weak with Tarkwa
heap-leach operations being suspended (an impact of c.100-125koz) and South Deep ramp-up delayed owing to a slower
material build-up. The company announced the acquisition of Yilgarn South mines from Barrick Gold in Australia for a total
consideration of US$300 mn. This acquisition mitigates the SA risk (Australia now forms biggest portion of GFI production
profile at 42%).
South Deep delay a concern; Tarkwa heap-leach suspension takes off c.100-125koz
Gold Fields announced that owing to slower production build-up and delay in destress mining South Deep would not reach peak
production in 2016. We previously forecast South Deep reaching peak production of 700koz by 2016 but now believe that this will be
delayed till at least 2017. GFI also announced suspension of the Tarkwa heap-leach operations in view of the lower gold prices. The
net effect of this is c.140koz and c.170koz of lower production in 2014 and 2015 respectively.
Exhibit 35: New production profile is c.150koz less than original plan (owing
to late ramp up of South Deep and stoppage of heap leach operations at
Tarkwa)
Exhibit 36: The original production profile had full production from Tarkwa
and South Deep ramping up in 2016
GFI original production and cash cost estimates
GFI new production and cash cost estimates
1,000
1,000
3,000
900
900
2,500
800
700
Au (Koz)
600
500
1,500
400
1,000
300
200
500
700
2,000
US$/oz
2,000
800
600
Au (Koz)
2,500
500
1,500
400
1,000
300
200
500
100
100
0
0
2011
South Deep
Australia
2012
2013E
2014E
Tarkwa
Cerro Corona
2015E
2016E
Damang
Cash costs (US$/oz)
US$/oz
3,000
0
2011
South Deep
Australia
2012
2013E
2014E
Tarkwa
Cerro Corona
2015E
2016E
Damang
Cash costs (US$/oz)
34
September 12, 2013
Pro-forma analysis for Yilgarn South acquisition

Exhibit 37 shows the pro-forma analysis for Gold Fields post the announced Yilgarn South acquisition. The transaction is accretive
to Gold Fields on our estimates but we highlight that FY12 production was c.450koz compared to c.198koz in 1H2013. We forecast
total production of c.420koz for FY14 and ramp up the mine to full capacity c.450koz by 2015.
Exhibit 37: On our estimates the transaction is accretive to Gold Fields
Pro-forma analysis for Yilgarn South acquisition by Gold Fields
Gold Fields pro-forma

analysis
Gold price (US$/oz)
Pro-forma operational metrics
Production (Au Koz)
Unit costs (US$/oz)
Pro-forma financials
Revenue (Rmn)
EBITDA (Rmn)
EPS (Rand)
Ratios
FCF yield
CROCI
Net debt/ EBITDA
Valuation metrics
EV/EBITDA
PE
Pre-Deal
2014
Post Deal
Cash+
All cash
Equity
1,144
Pre-Deal
2015
Post Deal
Cash+
All cash
Equity
1,200
Pre-Deal
2016
Post Deal
Cash+
All cash
Equity
1,200
2,040
756
2,503
729
2,503
729
2,159
762
2,654
719
2,654
719
2,308
750
2,796
704
2,796
704
24,669
8,631
1.26
29,775
11,174
1.50
29,775
11,174
1.26
28,298
10,917
2.88
34,806
14,684
4.23
34,806
14,684
3.90
31,635
12,828
4.59
38,338
16,984
6.01
38,338
16,984
5.63
-0.9%
4.1%
2.0 x
0.0%
5.4%
1.6 x
0.2%
5.4%
1.6 x
6.3%
5.0%
1.7 x
10.4%
6.6%
1.4 x
10.3%
6.7%
1.3 x
10.8%
5.7%
1.3 x
16.1%
7.4%
1.0 x
15.8%
7.5%
0.9 x
6.9 x
40.0 x
5.7 x
34.9 x
5.5 x
41.5 x
5.3 x
17.5 x
4.1 x
12.4 x
4.0 x
13.4 x
4.3 x
11.0 x
3.3 x
8.7 x
3.2 x
9.3 x
Yilgarn south acquisition creates new opportunities

With the 2Q13 results the company announced the acquisition of Yilgarn South mines in Australia from Barrick Gold for a total
consideration of US$300 mn less c.US$30 mn working capital adjustment. As of 2012 the Yilgarn assets (Granny Smith, Darlot and
Lawlers) had a reserve base of 2.6moz and a resource base of 1.9moz. This analysis had been done at a gold price of US$1500/oz.
With the gold price now lower, we expect the final reserve and resource numbers to be lower, once integrated into GFIs resource
model.
The acquisition is positive for the company in our view as it improves its sovereign risk profile. Post the acquisition the company
will have c.42% production from Australia compared to 29% pre-deal (West Africa operations previously accounted for 42% of
production but this will fall to c.33% post acquisition).
35
September 12, 2013
Exhibit 38: Map showing Yilgarn south assets
Exhibit 39: Yilgarn south assets add c.420koz in 2014E and c.450koz from
2015
GFI production taking into account production from Yilgarn South from 2014
3,500
3,000
Au (Koz)
2,500
2,000
1,500
1,000
500
0
2011E
2012E
2013E
2014E
2015E
GFI production - existing asets
2016E
2017E
2018E
Yilgarn South
Source: Company data.
Exhibit 40: West Africa formed a major portion of GFI production profile
which increased its sovereign risk profile
Exhibit 41: Australia will now form the major portion of GFIs production
profile reducing sovereign risk
GFI production split pre-acquisition
GFI production split post acquisition
16%
13%
13%
29%
12%
33%
42%
42%
South Africa
Australia
West Africa
South America
South Africa
Australia
West Africa
South America
36
September 12, 2013
Currency tailwinds a short-term catalyst

Gold Fields operates in Australia, South Africa and Peru. All the currencies AUD, ZAR and Peruvian Sol have depreciated 18.5%,
13.6% and 9.3% respectively. We forecast further weakening of the currencies and this creates a short-term tailwind for the company
as a major portion of the costs are based in the local currency.
Exhibit 43: We forecast a further weakening in ZAR and PEN but a
strengthening AUD
Exhibit 42: ZAR, AUD and PEN have all depreciated YTD
ZAR, AUD, PEN performance rebased as of 1/1/2013
GS forecasts for ZAR, AUD and PEN
Currency movement (rebased 1/1/2013)
125
ZAR/$
AUD/$
PEN/$
120
2012
8.21
0.97
2.64
3Q2013
10.10
0.90
2.75
4Q2013
10.20
0.88
2.75
2013E
9.63
0.95
2.68
2014E
10.68
0.85
2.78
2015E
11.00
0.85
2.80
2016E
11.50
0.84
2.95
2017E
11.50
0.84
3.15
115
110
105
100
Jan-13
Feb-13
Mar-13
Apr-13
ZAR
Source: Datastream.
May-13
AUD
Jun-13
Jul-13
Aug-13
PEN
37
September 12, 2013
Sibanye Gold (SGLJ.J): Up to Buy on valuation, Cooke acquisition and dividend catalysts
Investment Profile
Source of opportunity
Low
High
Growth
Growth
Returns *
Returns *
Multiple
Multiple
Volatility
Volatility
20th
Percentile
40th
60th
80th
100th
Sibanye Gold (SGLJ.J)


Key data
Current
Price (R)
Market cap (R mn)
11.50
15.00
30
8,436.4
9,101.7
12/15E
16,842.7
3.5
2,182.5
(19.0)
1.74
2.37
1.9
6.6
5.3
17.5
7.6
Revenue (R mn) New

EBIT (R mn) New
EBIT revision (%)
EPS (R) New
EPS (R) Old
EV/EBITDA (X)
P/E (X)
Dividend yield (%)
FCF yield (%)
CROCI (%)
12/12
16,553.5
0.0
3,317.1
0.0
4.26
4.26
-NM
NM
-19.6
12/13E
18,867.1
11.0
4,168.4
50.1
3.59
2.40
1.3
3.2
7.5
55.2
14.0
12/14E
17,278.4
5.6
2,060.8
653.9
1.61
(0.07)
2.1
7.1
3.5
7.1
8.2

18
440
16
420
14
400
12
380
10
360
340
6
Sep-12
320
Dec-12
Sibanye Gold (L)

Absolute
Rel. to FTSE World Europe (EUR)
Mar-13
Jun-13
FTSE World Europe (EUR) (R)
3 month
17.7
11.0
6 month
(16.7)
(20.3)
12 month
---
We upgrade Sibanye to Buy with a new 12-month price target of R15 (up from R9.6) implying 30% potential
upside. Our primary investment thesis is that Sibanye is undervalued relative to peers trading on 3.2x/7.1x on
2013/14E vs. 29x/61x for our large-cap coverage. With no significant growth projects and hence spending only
sustaining capex Sibanye is generating cash at low gold prices at the corporate level. As expected following the
conclusion of a two-year wage agreement, the company announced an interim dividend of 37 rand cents as a
maiden interim dividend, equivalent to 15% on underlying earnings. Sibanye is targeting a 35% payout on
underlying earnings which on our estimates would translate into a FY13 DPS of c.R1 or c.8% dividend yield, the
highest dividend yield in our mining coverage. Finally, Sibanye announced the expected acquisition of the
Cooke operations from Gold One (JSE: GDOJ.J) including the surface retreatment operations much discussed by
Sibanye management as the potential 4th mine. Sibanye will distribute 150 mn new SGL shares (c.R1.5 bn,
US$150 mn) for the Cooke operations which we estimate can deliver c.220koz in 2014E rising to c.400koz in
2016E at an average cost of c.US$1,200/oz with the surface ounces planned to cost c.US$928/oz.
We update our estimates for the 1H13 results and our new gold price and FX forecasts. The company posted a
solid set of results with production of 656koz at total cash costs (TCC) of $983/oz. The company reiterated its
2013 guidance at 1.35moz at a NCE of R 360,000/kg (c.US$1,125/oz) at 10:1 ZAR: USD.
Catalyst
We see the following potential catalysts for Sibanye: 1) Successful completion of the cost cutting program
(currently underway) which would further reduce TCC and could offset the wage hikes to some degree. 2)
Consensus DPS estimates are currently R0.51, we forecast R1.0. 3) Sibanye has the highest FCF yield (2014E is
11.3% vs. sector average of 1.4%) and dividend yield (2013E is 10.3% vs. sector average of 2.3%) among our gold
and silver stocks and we believe that this is currently being under appreciated by the market as it is trading on
3.2x/7.1x 2013/14E. 4) The announced Cooke acquisition on our estimates is accretive to Sibanye. The Cooke
optimization plan (currently underway) could add c.34koz of gold production and reduce R/tonne costs c.40%.
Valuation
We value Sibanye Gold using a 50/50 blend of our P/E valuation (a target multiple of 6x based on our GS
SUSTAIN framework (see Appendix 1) applied to our 2015E earnings estimates (previously 2014) and 1x our
NAV. This results in a 12-month price target of R15 (previously R9.6) implying 30% upside potential. We upgrade
Sibanye to Buy from Neutral and add it to the CEEMEA Focus List.
Key risks
Key risks to our view and price target are a lower gold price than we expect, and a stronger rand; the above CPI
wage hikes and the continued threat of strike action and/or an extended period of strikes are further risks.
38
September 12, 2013
Sibanye Gold: Our thesis in charts

Exhibit 44: Cooke adds c.260koz of gold
Exhibit 45: Sibanye has the best cost profile

among SA golds
Sibanye production and cost with and w/o Cooke
Exhibit 46: Sibanye has a strong FCF yield

FCF yield of SA golds
1,700
1,600
40%
1,500
1,200
1,800
2013: $1,456
30%
1,300
1,600
1,000
1,400
1,200
600
800
600
US$/oz
1,000
Total cash cost / oz
1,100
800
1,200
Au(Koz)
1,400
400
2015: $1,200
20%
2014: $1,144
1,000
10%
900
800
0%
700
2013E
600
400
200
200
0
2011
2012
Production(Koz)
Unitcosts(US$/oz)
2013E
2014E
2015E
2016E
2017E
400
20%
300
2014E
10%
500
200
2015E
2016E
2017E
ProductionCooke(Koz)
Unitcostsincl.Cooke(US$/oz)
30%
100
SGLJ.J
0
Sibanye Gold
Gold Fields
FY2013E
FY2014E
AngloGold Ashanti
FY2015E
Harmony Gold
ANGJ.J
GFIJ.J
HARJ.J
Exhibit 47: Sibanye has the highest dividend yield
Exhibit 48: Trading at a discount to peers
Exhibit 49: We are significantly higher vs. cons.
Dividend yield of SA gold stocks
P/E of SA golds
GS vs. consensus estimates
120.0
Rand mn
GS estimates
Consensus
GS vs. Cons
8%
100.0
7%
6%
Revenue
18,867
17,258
9%
FY13
EBITDA
EPS
6,817
3.59
5,089
1.69
34%
112%
DPS
0.87
0.48
81%
Revenue
17,278
16,411
5%
FY14
EBITDA
4,425
4,390
1%
EPS
1.61
1.57
3%
DPS
0.40
0.45
-10%
80.0
5%
4%
60.0
3%
40.0
2%
1%
20.0
0%
2011
2012
2013E
2014E
2015E
2016E
0.0
SGLJ.J
ANGJ.J
GFIJ.J
HARJ.J
Randgold Resources
AngloGold Ashanti
Gold Fields
2013 P/E
Sibanye Gold
Harmony Gold
Gold - Seniors
2014P/E
Source: Goldman Sachs Global Investment Research, Bloomberg.
39
September 12, 2013
Exhibit 50: Sibanye Gold financial and operating data, 2011-15E

2011
2012
2013E
2014E
2015E
Totalrevenue
16,613
16,554
18,867
17,278
16,843
Operatingcosts
9,861
10,874
12,050
12,853
12,474
EBITDA
6,752
5,680
6,817
4,425
4,369
2,193
2,363
2,648
2,364
EBIT
Netfinancialincome
4,559
61
3,317
21
4,168
241
2,061
111
Realised(loss)gainonfinancialinstruments
15
13
Kloof
523
578
440
Gain(loss)onFX
21
Driefontein
541
504
563
18
121
60
Beatrix
238
264
230
150
200
Othercosts/income
Sharebasedpayments
Explorationexpense
Associates
Profitfromdisposals
11.5
EV($USm)/reserves
Upside(downside)
30%
NAV(US$mn)
2,186
Recommendation
Buy
2,182
87
35
93
74
80
80
3,745
1,880
1,975
290
282
331
301
277
Taxrate(%)
33%
14%
24%
25%
25%
Incometax
1,359
377
784
395
425
Underlyingprofit
UnderlyingEPS
Posttaxextraordinaries
2014E
Lastclose(ZAR)
3,021
Minorities
2013E
EV($USm)/resource
Royalties
2012
15.00
4,403
Underlyingpretaxprofits
2011
2015E
Salientmetrics
2,754
3,115
2,630
1,185
1,275
3.81
4.26
3.59
1.61
1.74
Pricetarget(12months,ZAR)
Totalgoldproduction
3.5
43
1,435
347
289
278
335
273
1,447
289
1,342
1,416
1,276
1,600
1,400
1,200
Goldproduction(koz)
Decyearend
Profitmodel(ZARmn)
1,000
800
600
400
190
135
925
Reportednetprofit
2,564
2,980
1,705
1,185
1,275
EPS(basic,reported)
3.55
4.07
2.32
1.61
1.74
723
732
734
734
734
DPSdeclared(ZAR)
3.4
1.6
0.9
0.4
0.6
88%
38%
24%
25%
35%
Revenuegrowth
22%
0%
14%
8%
3%
KDC
EBITDAgrowth
1%
16%
20%
35%
1%
Kloof
16%
13%
23%
EBITgrowth
24%
27%
26%
51%
6%
Driefontein
16%
13%
23%
5%
EPSgrowth
47%
12%
16%
55%
8%
Beatrix
25%
16%
12%
22%
28%
DPSgrowth
EBITDAmargin
19%
41%
52%
34%
46%
36%
53%
26%
51%
26%
TotalGroup
Assumptions
23%
16%
21%
10%
14%
11.00
1.53
Growth&margins(%)
EBITmargin
Cashflowstatement
200
0
2011
2012
KDC
2013E
Kloof
2014E
Driefontein
2015E
Beatrix
NotionalCashExpenditureMargin(NCE)
23%
7%
27%
20%
22%
12%
13%
ZAR/$
$/
7.25
1.60
8.21
1.58
9.63
1.54
10.68
1.53
2,564
2,980
2,630
1,185
1,275
$/AUD
0.97
0.97
1.05
1.18
1.18
Gold($/oz)
1,570
1,669
1,456
1,144
1,200
DD&A
2,193
2,363
2,648
2,364
2,186
Copper(USD/t)
8,823
7,950
7,216
6,600
6,875
Other
1,787
6,543
170
5,514
382
5,659
0
3,548
0
3,460
936
1,123
Capitalexpenditures
2,923
3,107
2,895
2,664
2,028
Dividends
2,423
731
271
846
308
1,197
1,675
2,493
38
1,125
Nonrecurringitems
Acquisitions
0
2,923
0
3,107
0
0
0
0
0
0
Netincome
Minorities
Pershare(Rand)
Divestments
Unitcosts(US$/oz)
KDC
Driefontein
na
na
959
950
866
Kloof
na
na
839
834
1,015
953
1,112
1,087
732
732
940
ZARmn
1,120
938
851
889
Beatrix
AverageUnitcost(US$/oz)
NPV
16
1,288
21,870
1,885
282
39
2,324
19,143
1,260
673
4,153
3,118
244
1,163
363
430
2,957
2,713
3,876
OtherBSitems
Stocks
252
536
1,357
1,157
1,184
TotalNAV(ZARmn)
Debtors
486
858
500
426
436
Othercurrentassets
648
61
36
30
31
Other
Surplus/deficit
Balancesheet
Currentassets
Grossfixedassets
AccumulatedDD&A
Netfixedassets
Fixedassetinvestment
Investmentinsecurities
Totalinvestments
Otherlongtermassets
Totalassets
Accountspayable
Shorttermdebt
Kloof
718
Driefontein
9,741
Beatrix
5,826
Netdebt(2013)
Minorities
Sharesoutstanding(mn)
672
7
1,803
13,816
732
Pricetarget(12months,ZAR)
15
P/NAV(atPT)
Valuation
0.8
1,748
37,988
1,885
41,362
4,850
44,257
4,326
46,921
5,528
48,949
22,629
24,986
28,457
30,821
33,008
Shareprice(Avg)
11.5
11.5
11.5
15,359
16,376
15,801
16,100
15,941
MarketCap(Avg)
8,436
8,436
8,436
128
219
254
254
254
EV(ZARmn)
130
220
254
254
254
1,255
1,354
1,726
1,726
1,726
18,492
19,836
22,630
22,406
23,449
836
1,287
750
640
655
FCFyield
9,102
9,345
8,181
EV/sales
0.5
0.5
0.5
EV/EBITDA
1.3
2.1
1.9
P/E
3.2
7.1
6.6
Dividendyield
8%
4%
5%
55%
7%
17%
0.2
500
129
129
129
EV/GCI
0.2
0.2
Othercurrentliabilities
23,177
813
3,052
2,601
2,663
EV/capitalemployed
0.7
0.7
0.6
Longtermdebt
24,013
0
2,600
3,720
3,931
3,500
3,369
3,500
3,446
3,500
Price/book
Ratios
0.9
0.9
0.8
6,454
5,942
5,868
5,868
5,868
CROCI
Totallongtermliabilities
6,454
9,662
9,368
9,368
9,368
CROCI/WACC(x)
Totalliabilities
30,467
12,263
13,299
12,738
12,814
ROIC
Totalcommonequity
11,970
7,579
9,338
9,677
10,643
ROIC/WACC(x)
18,492
19,836
22,630
22,406
Workingcapital
21,894
24
1,909
1,627
363
3,790
672
916
247
11,976
11,793
12,960
13,298
14,264
Minorityinterest
Preference
Netdebt/(cash)
Capitalemployed
14%
8%
8%
1.6
0.9
0.8
26%
12%
12%
2.9
1.3
1.3
ROA
8%
5%
6%
Netdebt/equity
7%
9%
2%
23,449
Netdebt/EBITDA
10%
21%
6%
1,666
Gearing
7%
9%
2%
WACC
9%
9%
9%
17.3
18.6
25.0
EBITinterestcover
40
September 12, 2013
Harmony (HARJ.J): Wafi-Golpu pushed out; many sub-scale SA assets; down to Sell
Source of opportunity
Investment Profile
Low
High
Growth
Growth
Returns *
Returns *
Multiple
Multiple
Volatility
Volatility
20th
Percentile
40th
60th
80th
100th
Harmony Gold (HARJ.J)


Key data
Current
Price (R)
Market cap (R mn)
39.07
30.00
(23)
16,831.4
17,681.1
6/16E
19,531.7
12.2
1,653.0
NM
2.24
(3.19)
5.1
17.5
0.4
1.6
5.0
Revenue (R mn) New

EBIT (R mn) New
EBIT revision (%)
EPS (R) New
EPS (R) Old
EV/EBITDA (X)
P/E (X)
Dividend yield (%)
FCF yield (%)
CROCI (%)
6/13
15,901.9
(3.1)
908.9
(47.1)
(0.19)
2.02
9.6
NM
0.8
(2.4)
5.1
6/14E
16,494.6
(11.5)
996.1
(63.6)
1.29
4.62
6.5
30.3
0.5
(3.1)
4.1
6/15E
17,344.9
(1.4)
278.3
(29.6)
(0.49)
0.35
8.5
NM
0.0
(6.9)
3.1

80
440
75
430
70
420
65
410
60
400
55
390
50
380
45
370
40
360
35
350
30
Sep-12
340
Dec-12
Harmony Gold (L)

Absolute
Mar-13
Jun-13
We downgrade Harmony to Sell with a reduced 12-month price target of R30 (was R40) implying 23% downside.
Our thesis is that Harmony has 14 South African mines which delivered 1,139koz in FY13 (just reported) at an allin total cash cost of US$1,156/oz vs. our gold price forecast of US$1,094/oz for Harmonys FY14 (June year-end),
and we forecast Harmony will have a free cash flow yield of 0.6% and -3.4% in FY14 and FY15 respectively. The
company has guided to 2014 production of 1.3-1.4moz at a total cash cost of US$1,070-1,180/oz. Harmony also
reduced corporate expenditure and capex by R450 mn and R2.1 bn (mainly on account of lower capex at WafiGolpu) respectively.
The continued cash burn leads to Harmonys net debt rising to R926 mn in 2015E from R450 mn in 2013. The
2014 production guidance of 1.3-1.4moz is overly optimistic in our view. On our estimates the company will
produce 1.29moz for FY14 and this does not take into account work stoppages. We see continued threat of
strikes (although the NUM has accepted the 7%-8% wage hikes, AMCU has rejected the offer and it is the
majority union at Harmonys Kusasalethu mine).
Catalyst
We see several catalysts for Harmony: 1) We expect the gold price, which has recently increased to over
$1,400/oz on multiple uncertainty factors, to decline to $1,144/oz in calendar 2014 and given Harmonys total
cash cost position we believe it is negatively geared to a decline in the gold price. 3) Harmonys production
guidance is too optimistic given the climate in South Africa; we expect it to guide lower in 1Q and 2Q14 results.
3) Harmony is expensive vs. peers relative to its competitive position trading on a P/E of 30.3x FY14 and making
a loss in FY15E vs. 10.8x for ANG, 21.6x for GFI and only 3.2x for SGL (all in 2013E).
Valuation
We value Harmony using a 50/50 blend of our P/E valuation (a target multiple of 9x based on our GS SUSTAIN
framework (see Appendix 1) applied to our FY15 earnings (from FY14 previously). This results in a 12 month
price target of R30 which implies a 23% downside.
Key risks
A higher gold price could see HAR shares increase in value as investors seek the leveraged play to a rising gold
price. A potential sale of Harmonys 50% of the Wafi-Golpu project would be a significant upside risk.
3 month
(1.1)
(5.6)
6 month
(33.7)
(34.2)
12 month
(44.6)
(53.4)
Source: Company data, Goldman Sachs Research estimates, FactSet.
41
September 12, 2013
Harmony Gold: Our thesis in charts

Exhibit 51: Production is flattish as SA portfolio ages
Exhibit 52: 75% of mines do not generate cash in FY14/15
Production and unit costs for Harmony Gold
All mine total cash cost (US$/oz) for Harmony Gold
1,600
1,400
1,400
1,200
2,000
Gold: $1,261 (FY14),

$1,141 (FY15)
1,800
TCC ($US/oz)
1,000
1,000
800
800
600
600
US$/oz
Au (Koz)
1,200
1,600
1,200
1,000
800
600
400
200
400
400
1,400
200
200
0
2011
2012
2013
2014E
Production
2015E
2016E
FY2014E
Cash costs (US$/oz)
FY2015E
Exhibit 53: leading to continued cash burn till FY15
Exhibit 54: Harmony is trading at a premium relative to sector
CFO, capex, dividend and total cash flow
P/E for our senior gold coverage (calendarised)
6,000
800
4,000
100.0
600
400
200
80.0
R mn
2,000
R mn
120.0
1,000
60.0
-200
-2,000
-400
-4,000
40.0
-600
-800
-6,000
2011
CFO
2012
2013
Capex
2014E
Dividends
2015E
20.0
2016E
Total cash flow
0.0
Randgold Resources
AngloGold Ashanti
Gold Fields
2013 P/E
Sibanye Gold
Harmony Gold
Gold - Seniors
2014P/E
42
September 12, 2013
Exhibit 55: Harmony Gold financial and operating data, FY12-16E

June year end
2012
2013
2014E
2015E
2016E
P&L (ZAR mn)

Total revenue
15,169
15,902
16,495
Operating costs
-9,911
-11,400
-12,842
SG&A and other costs

EBITDA
EBIT
Net financial income / (expense)
Net Associates
17,345
19,532
-14,418 -15,154
2014E
2015E
2016E
30
EV (US$) / resource
Last close (ZAR)
39
EV (US$) / reserves
32
-955
-1,651
-925
-700
-700
Upside (downside)
2,851
2,727
2,226
3,678
Recommendation
-1,982
-1,942
-1,731
-1,948
-2,025
2,321
909
996
278
1,653
-103
102
-26
-147
-162
Hidden valley
89
85
91
103
112
56
Bambanani
34
52
90
98
129
Steyn 2
11
15
13
Doornkop
99
117
122
144
165
Kusasalethu
181
88
130
181
181
Evander
102
44
86
104
93
93
91
-144
-88
Other
-378
-350
-200
-200
-200
1,752
573
770
-68
1,291
Income tax
123
-656
-213
-144
-323
Tax rate (%)
7%
-115%
-28%
211%
-25%
Minorities
2013
4,303
Adjustments to investments
Pretax profits
2012
Salient metrics
-23%
NAV (US$ mn)
1,522
Sell
Gold Production (k oz)
Joel
104
116
130
162
176
1,875
-83
557
-212
968
Phakisa
82
78
92
122
127
Underlying EPS (ZAR cents)
435
-19
129
-49
224
Target 1
117
128
126
129
129
Extraordinaries post tax
375
-2,280
Target 3
36
52
55
55
55
2,250
-2,363
557
-212
968
Tshepong
170
134
136
155
155
Adjusted EPS (cents)
522
-547
129
-49
224
Virginia - Unisel
51
58
57
62
62
431
432
433
433
433
Kalgold
33
43
42
41
41
90
50
18
14
Phoenix (Saiplaas)
26
27
24
24
24
21%
-260%
14%
0%
6%
Other Surface
52
43
38
17
1,272
1,183
1,237
1,392
1,446
Net income (pre-exceptionals)
Net income (post exceptionals)
DPS declared (ZAR cents)

Masimong
Total Gold Production (k oz)
Revenue growth
22%
5%
4%
5%
13%
EBITDA growth
73%
-34%
-4%
-18%
65%
1,600
EBIT growth
228%
-61%
10%
-72%
494%
1,400
EPS growth
-19%
-104%
-770%
-138%
-557%
1,200
DPS growth
50%
-44%
-65%
-100%
EBITDA margin
28%
18%
17%
13%
19%
EBIT margin
15%
6%
6%
2%
8%
2,250
-2,363
557
-212
968
Cash flow statement (ZAR mn)

Net income
Stripping transfer
Minorities
1,982
1,942
1,731
1,948
2,025
DD&A
Other
Koz
1,000
800
600
400
200
0
-19
3,276
4,213
2,855
2,289
1,736
2,993
10
-3,747
-3,605
-3,007
-2,858
-2,670
-431
-435
-7
35
-1,185
-718
-1,122
316
Non recurring items
R/$
7.78
8.79
10.33
10.93
Acquisitions
-1,047
$/
1.58
1.57
1.53
1.53
1.53
Divestments
261
1,325
Gold ($ / oz)
1,672
1,605
1,297
1,141
1,200
3,313
2,898
2,124
1,954
2,105

Per share (Rand)
Dividends
-403
98
194
-52
-50
Other
930
403
Surplus/deficit
823
-406
-524
-1,173
266
Balance sheet (ZAR mn)

Stocks
Receivables
Total Current assets
2012
Hidden valley
Kusasalethu
Target 1
2014E
2015E
Steyn 2
Masimong
Tshepong
2016E
Doornkop
Phakisa
Virginia - Unisel
Assumptions
Silver (US cents / oz)

NAV summary
16,505
Hidden Valley
-4,583
1,773
2,089
1,827
1,827
1,827
Wafi-Golpu (50% share, est)
996
1,425
1,570
1,767
1,957
Net debt (2013)
1,245
1,162
1,366
1,537
1,702
Minorities
239
132
45
50
56
Other BS items
4,253
4,808
4,807
5,180
5,541
Group NAV (ZAR mn)
32,853
32,820
34,096
35,005
35,651
P/NAV(at target price)
Gross intangibles
2,373
2,373
2,373
2,373
2,373
11.25
NAV (ZAR mn)
South Africa mines
Net fixed assets

Accumulated Amortisation
2013
Bambanani
Joel
Target 3
6,489
449
0
2,246
15,716
1.1
Valuation (x)
-177
-182
-182
-182
-182
93
63
39
39
39
Net intangibles
2,196
2,191
2,191
2,191
2,191
Market Cap (avg, ZAR mn)
40,118
27,038
16,902
16,902
16,902
Fixed asset investments
1,878
2,244
2,244
2,244
2,244
EV (ZAR mn)
Investments in securities
146
Total investments
2,024
2,244
2,244
2,244
2,244
1,967
161
161
161
161
43,293
42,224
43,499
44,782
45,788
1,747
2,109
2,479
2,789
3,089
313
286
286
286
286
90
101
112
2,061
2,399
2,854
3,176
3,487
Price/book
Total assets
Accounts payable
Short-term debt
Other short term liabilities
Share price (avg, ZAR)
39,955
27,293
17,681
18,855
18,588
EV/sales
2.6
1.7
1.1
1.1
1.0
EV/EBITDA
9.3
9.6
6.5
8.5
P/E
21.4
30.3
5.1
17.5
Dividend yield
1.1%
1.6%
0.0%
0.0%
0.0%
FCF yield
0.2%
-2.4%
-3.1%
-6.9%
1.6%
EV/GCI
0.7
0.5
0.3
0.3
0.3
EV/capital employed
1.1
0.8
0.5
0.5
0.5
1.2
0.8
0.5
0.5
0.5
Long-term debt
1,503
2,252
2,514
3,688
3,422
Ratios
5,707
5,267
5,267
5,267
5,267
ROIC
6%
2%
2%
1%
7,210
7,519
7,781
8,955
8,689
ROIC / WACC
0.6
0.2
0.3
0.1
0.4
Total liabilities
9,271
9,918
10,636
12,131
12,175
ROA
5%
-6%
1%
0%
2%
34,022
32,306
32,863
32,651
33,613
Net debt / equity
0%
1%
3%
7%
6%
Net debt / EBITDA
2%
18%
23%
75%
69%
43,293
42,224
43,499
44,782
45,788
732
606
412
464
514
Total common equity

Minority interest
Working capital
Net debt / (cash)
Capital employed
43
449
973
2,147
1,881
35,838
34,844
35,664
36,625
37,320
2016
4%
Gearing
0%
1%
3%
6%
5%
WACC
9%
9%
9%
9%
9%
22.5
-8.9
38.9
1.9
10.2
EBIT interest cover
43
September 12, 2013
Appendix 1: Refreshing our industry positioning framework

Focus on best commodities, volume growth and best positioned assets
We use an industry positioning framework to identify and analyse the factors that we believe will shape returns beyond our forecast
period. Exhibit 56 shows the factors we use for our industry positioning analysis, from which we derive our P/E based price targets.
Change in portfolio quality is driven, in our view, by the following key components:
Average cash costs: Companies which have low cost assets are best positioned in our view in a falling gold price scenario and
therefore deserve a premium versus the sector.
Mining growth: Key to increasing earnings is delivering growth. We believe companies with more growth deserve a premium
versus the sector, whereas those with no growth should trade at a discount.
Asset quality: Long life, low-cost assets which are less complex provide companies with superior positioning and, in our view,
deserve a premium versus other companies in the sector. Conversely, companies with lower-quality assets should trade at a
discount.
Fiscal and sovereign risk: Operating in less risky environments, with more certain fiscal regimes should warrant a premium in
our view. Conversely, those operating in higher-risk environments will likely face bureaucratic and fiscal changes and should
trade at a discount.
Exhibit 56: Our GS SUSTAIN framework positions companies within the sector
GS SUSTAIN framework
Industrypositioning
Industrypositioning
Portfolioquality
Risk
IPScoring
Cashcosts
Mininggrowth
AssetQuality
Fiscalandsovereignrisk
Averagecashcost2012
2015E
Productiongrowth
AssetQuality
%exposuretocountrieswith
highfiscalriskandnationalrisk
2012,2015&2020
USD/oz
Quartile
Quartile
Quartile
Quartile
Quartile
44
September 12, 2013
Deriving our target multiples through industry positioning

Below we show how our GS SUSTAIN-based industry positioning framework is key to PE valuation multiples which we use to
derive our price targets.
Exhibit 57: Identifying winners and losers through GS SUSTAIN based industry positioning
GS SUSTAIN industry positioning framework and summary target multiples
Industrypositioning
Industrypositioning
Portfolioquality
Risk
Returns
IPScoring
Cashcosts
Mininggrowth
AssetQuality
Cashflowgeneration
CROCI
Averagecashcost2012
2015E
Productiongrowth
AssetQuality
%exposuretocountrieswith
highfiscalriskandnationalrisk
2012,2015&2020
AverageFCFyield201315E
AverageCROCI201315E
USD/oz
Quartile
Quartile
Quartile
Quartile
Quartile
Quartile
Quartile
Q1
GoldSeniors
RandgoldResources
726
Q1
15%
Q1
100%
Q2
77%
Q3
69%
Q2
2%
Q2
15%
AfricanBarrickGold
1,027
Q4
1%
Q4
33%
Q4
70%
Q2
29%
Q4
7%
Q4
4%
Q4
AngloGoldAshanti
947
Q3
6%
Q3
44%
Q3
63%
Q1
50%
Q3
7%
Q4
6%
Q3
GoldFields
914
Q3
6%
Q3
22%
Q4
63%
Q2
40%
Q4
7%
Q1
5%
Q4
SibanyeGold
934
Q3
5%
Q4
100%
Q2
80%
Q4
40%
Q4
31%
Q1
10%
Q2
HarmonyGold
1,128
Q4
10%
Q2
100%
Q2
80%
Q4
40%
Q4
7%
Q1
5%
Q4
Final
Old
Multipleadjustments
Cashcosts
LTMultiple
Mininggrowth
AssetQuality
GoldSeniors
RandgoldResources
19.25x
0.50x
Q1
0.50x
Q1
0.25x
Q2
0.50x
Q3
20.00x
20.00x
AfricanBarrickGold
8.50x
0.50x
Q4
1.00x
Q4
0.25x
Q4
0.25x
Q2
7.00x
7.00x
AngloGoldAshanti
9.00x
0.25x
Q3
0.25x
Q3
0.00x
Q3
0.50x
Q1
9.00x
9.00x
GoldFields
8.50x
0.25x
Q3
0.25x
Q3
0.25x
Q4
0.25x
Q2
8.00x
8.00x
SibanyeGold
8.00x
0.25x
Q3
1.00x
Q4
0.25x
Q2
1.00x
Q4
6.00x
5.00x
HarmonyGold
10.00x
0.50x
Q4
0.25x
Q2
0.25x
Q2
1.00x
Q4
9.00x
9.00x
Note: We assume a long term multiple for Sibanye since no trading history is available for the stock (listed in Feb. 2013)
45
September 12, 2013
Cash costs: Key in falling gold price environment

We forecast gold to average US$1,144 in 2014 and US$1,200 in 2015. In the falling gold price environment we believe that managing
cash costs will be key. Randgold has the lowest cash cost mines hence gets a premium relative to the sector while African Barrick
Gold and Harmony Gold have fourth quartile costs hence attract a discount to the sector.
Exhibit 58: Managing cash costs will be key to stemming cash burn in a falling gold price environment
Total cash costs for senior gold and silver companies
UnitCost
Ticker
Unitcost/oz
Company
2011
2012
Ave.
2013E
2014E
2015E
2016E
201215E
Quartile
Multiple
Adjustment
GoldSeniors
RRS.L
RandgoldResources
779
791
758
702
650
614
725
Q1
0.50x
ABGL.L
AfricanBarrickGold
868
1,161
1,150
928
870
817
1,027
Q4
0.50x
ANGJ.J
AngloGoldAshanti
850
1,039
1,024
883
876
886
955
Q3
0.25x
GFIJ.J
GoldFields
778
1,469
841
705
682
658
924
Q3
0.25x
SGLJ.J
SibanyeGold
932
1,097
930
851
889
848
942
Q3
0.25x
HARJ.J
HarmonyGold
1,099
1,198
1,317
1,082
994
974
1,148
Q4
0.50x
46
September 12, 2013
Production growth: Key to stemming cash burn

We remain positive on near-term (2012-2015E) growth for the miners, and believe that the ability to grow the portfolio is a critical
factor in increasing near-term returns. While holding a portfolio of assets in pre-feasibility stages (a growth pipeline) is essential to
longer-dated growth, we see near-term growth as of greater importance as:
Near-dated growth delivery dictates the ability to increase cash flows (in falling/flat gold price environment);
Near-term prices are easier to forecast, therefore allowing greater certainty on cash inflows;
Capex for near-term growth is mostly spent and there is greater certainty on the cash outlay required, thereby allowing more
accurate cash flow assumptions.
Exhibit 59: Production growth profile of senior golds and silver

Volume growth in Au equivalent terms
Ticker
Au equivalent production growth

Gold equivalent production (Koz)
Company
2011
CAGR
2012
2013E
2014E
2015E
2016E
2017E
2012-15E
Quartile
Multiple
Adjustment
Gold Seniors
RRS.L
Randgold Resources
721
796
845
1,050
1,166
1,171
1,219
14%
Q1
0.50x
ABGL.L
776
651
616
642
668
743
655
1%
Q4
-1.00x
ANGJ.J
AngloGold Ashanti
4,186
3,806
3,712
4,197
4,564
4,891
4,937
6%
Q3
-0.25x
GFIJ.J
Gold Fields
3,701
2,030
1,880
2,183
2,430
2,705
2,846
6%
Q3
-0.25x
SGLJ.J
Sibanye Gold
1,458
1,208
1,372
1,526
1,418
1,353
1,104
5%
Q4
-1.00x
HARJ.J
Harmony Gold
1,294
1,165
1,120
1,271
1,536
1,644
1,711
10%
Q2
0.25x
47
September 12, 2013
Asset Quality: Sustainably low-cost position assets key to a premium valuation

We build a composite score for asset quality based on two factors: (1) Grade; and (2) relative complexity. Both are scored from 1 to 3.
We use reserve life for grade and our teams judgement for a qualitative score for complexity. We then use the composite score to
adjust our target multiple.
Exhibit 60: Asset quality a key differentiator in industry positioning
Asset quality assessment
Ticker
Company
AssetQuality
Grade
Complexity(3
mostsimple)
Total
Quartile
Multiple
Adj.
GoldSeniors
RRS.L
RandgoldResources
100%
Q2
0.25x
ABGL.L
AfricanBarrickGold
33%
Q4
0.25x
ANGJ.J
AngloGoldAshanti
44%
Q3
0.00x
GFIJ.J
GoldFields
22%
Q4
0.25x
SGLJ.J
SibanyeGold
100%
Q2
0.25x
HARJ.J
HarmonyGold
100%
Q2
0.25x
48
September 12, 2013
Risk: Who, what and where?

Fiscal risk
We assess the risk of operating in countries using the Fraser Institutes global mining survey (2011/2012), from which we derive the
lower risk (e.g. Sweden, Australia, US) and higher risk (DRC, Zambia) definitions. Based on exposure at the EBITDA level to these
countries, we adjust the target multiples to reflect lower / higher country risk.
Exhibit 61: Gold Fields, AngloGold Ashanti and the silver names operate in less risky environments
Summary exposure of EBITDA by country
RandgoldResources
Argentina
Australia
Brazil
BurkinaFaso
China
Cted'Ivoire
DemocraticRepublicofCongo
Egypt
Ghana
Greece
Guinea
Mali
Liberia
Mexico
Namibia
Niger
Peru
Philippines
PapuaNewGuinea
SierraLeone
SouthAfrica
Tanzania
Turkey
UnitedStates
2012
26%
0%
74%
7.5
Multipleadjustment
2015E
13%
18%
69%
7.7
0.5x
2020E
17%
23%
60%
7.8
AfricanBarrickGold
2012
100%
7.0
2015E
100%
7.0
0.3x
2020E
100%
7.0
AnglogoldAshanti
2012
7%
4%
14%
0%
7%
5%
4%
2%
32%
18%
8%
6.7
2015E
8%
22%
12%
7%
3%
5%
1%
0%
24%
22%
2%
6.3
0.5x
2020E
6%
21%
30%
6%
4%
4%
1%
1%
18%
17%
1%
5.9
GoldFields
2012
18%
33%
15%
33%
6.4
2015E
27%
30%
23%
21%
5.9
0.3x
SibanyeGold
2020E
13%
22%
23%
42%
6.6
2012
100%
8.0
2015E
100%
8.0
1.0x
HarmonyGold
2020E
100%
8.0
2012
6%
94%
7.9
2015E
2%
102%
8.0
1.0x
2020E
2%
102%
8.0
49
September 12, 2013
Appendix 2: Demand by country

Exhibit 62: Annual gold demand by country and demand category
Country
2004
Investment
Demand
517
101
261
12
224
10
16
1
21
1
35
67
84
5
39
3
38
12
26
39
344
19
136
5
73
1
89
9
45
5
186
49
0
0
351
19
18
-18
77
0
70
0
38
-26
27
5
-2
2
44
1
1,896
309
720
45
2,616
354
Jewellery
India
Greater China
China
Hong Kong
Taiwan
Japan
Indonesia
South Korea
Thailand
Vietnam
Middle East
Saudi Arabia
Egypt
UAE
Other Gulf
Turkey
Russia
USA
Europe ex CIS
Italy
UK
France
Germany
Switzerland
Other Europe
Total above
Other
World total
2005
Investment
Demand
574
136
280
17
241
13
16
1
22
4
34
40
78
3
38
2
41
28
27
34
366
25
147
7
75
1
96
12
47
4
195
53
0
0
349
26
-2
2
71
0
59
0
35
-25
25
15
-9
9
53
3
1,978
366
741
32
2,719
398
Jewellery
2006
Investment
Demand
516
196
277
20
245
14
15
0
17
5
33
-45
58
-1
30
1
26
16
22
70
298
20
106
8
60
1
92
9
40
3
165
60
0
0
306
32
-15
15
65
0
53
0
31
-25
23
28
-11
11
50
1
1,717
383
583
34
2,300
417
Jewellery
2007
Investment
Demand
558
213
335
36
302
26
18
1
15
9
32
-56
55
0
30
1
20
5
21
56
330
21
122
9
68
1
100
9
40
3
188
61
0
0
258
17
-36
36
57
0
50
0
29
-22
21
36
-13
13
49
9
1,791
391
632
46
2,423
438
Jewellery
2008
Investment
Demand
600
223
370
73
341
67
17
1
12
5
31
-39
56
3
24
0
16
43
20
96
320
30
111
14
74
2
100
11
35
3
153
57
0
0
188
83
-238
238
49
0
37
0
26
-3
20
115
-89
89
118
37
1,540
808
764
66
2,304
875
Jewellery
2009
Investment
Demand
471
171
401
103
376
112
16
1
8
-10
22
-30
41
-6
19
-8
7
-10
15
58
238
21
82
11
57
2
75
8
25
1
75
32
0
0
150
114
-293
293
41
0
32
0
24
1
17
134
-97
97
116
61
1,147
739
669
52
1,816
791
Jewellery
2010
Investment
Demand
658
349
480
191
452
190
21
1
8
0
21
-40
33
15
16
1
6
63
14
67
217
28
72
15
53
2
70
9
22
2
67
40
0
0
129
106
-299
299
35
0
27
0
20
1
14
127
-93
93
105
78
1,342
1,120
678
98
2,020
1,218
Jewellery
2011
Investment
Demand
618
368
550
272
515
263
28
2
7
7
17
-47
30
25
13
3
4
104
13
88
167
33
56
17
34
2
58
11
19
3
70
73
0
0
115
84
-376
376
28
0
23
0
18
7
12
159
-116
116
127
94
1,220
1,379
755
140
1,975
1,519
Jewellery
2012
Investment
Demand
552
312
552
258
519
249
26
2
7
7
17
-10
31
22
10
3
3
78
11
65
153
31
47
16
40
2
50
10
17
3
62
48
0
0
108
53
-276
276
22
0
21
0
14
3
11
110
-81
81
90
83
1,224
1,137
672
119
1,896
1,256
Jewellery
1H 2013
Investment
Demand
348
220
361
242
337
234
19
2
5
6
9
2
19
14
6
2
3
62
8
34
103
19
31
9
25
1
37
6
10
3
43
69
0
0
38
44
-136
136
7
0
6
0
0
1
0
61
-35
35
35
39
800
844
326
69
1,127
913
Jewellery
Source: World Gold Council, Datastream.
Exhibit 63: Quarterly gold demand by country and demand category

Country
India
Greater China
China
Hong Kong
Taiwan
Japan
Indonesia
South Korea
Thailand
Vietnam
Middle East
Saudi Arabia
Egypt
UAE
Other Gulf
Turkey
Russia
USA
Europe ex CIS
Italy
UK
France
Germany
Switzerland
Other Europe
Total above
Other
World total
Q1 2010
Investment
Demand
190
79
126
41
118
40
6
0
2
0
5
-12
10
3
5
1
3
16
5
14
62
7
17
4
18
1
21
2
6
1
17
9
0
0
23
17
-48
48
5
0
4
0
4
0
3
19
-14
14
17
15
397
223
130
29
528
252
Jewellery
Q2 2010
Investment
Demand
117
61
95
35
88
38
5
0
2
-3
5
-8
6
3
3
-1
1
20
3
13
58
6
26
2
9
1
18
2
5
0
16
7
0
0
24
33
-115
115
7
0
5
0
4
0
3
50
-36
36
39
30
214
283
201
24
415
307
Jewellery
Q3 2010
Investment
Demand
165
96
123
51
116
50
5
0
2
1
4
-10
11
4
3
1
1
20
3
19
57
8
18
5
16
1
16
2
7
1
27
16
0
0
35
25
-56
56
5
0
5
0
3
0
2
24
-17
17
20
15
374
286
140
27
514
313
Jewellery
Q4 2010
Investment
Demand
185
113
136
64
129
63
5
0
2
1
7
-11
6
6
4
-1
1
8
3
21
40
7
10
4
11
1
14
2
5
0
7
8
0
0
47
32
-80
80
18
0
14
0
10
0
7
35
-26
26
30
19
357
328
207
18
564
346
Jewellery
Q1 2011
Investment
Demand
199
103
154
88
145
86
7
0
2
2
4
-6
10
5
5
1
2
29
5
14
49
8
14
4
9
0
22
3
5
1
19
17
0
0
19
21
-85
85
4
0
3
0
4
1
2
38
-28
28
30
18
382
366
173
34
555
401
Jewellery
Q2 2011
Investment
Demand
180
115
112
56
103
54
7
0
2
1
4
-9
5
6
2
1
1
18
3
14
49
7
20
4
8
0
17
2
5
1
22
15
0
0
21
21
-64
64
6
0
4
0
4
1
2
23
-21
21
23
21
335
307
156
32
491
339
Jewellery
Q3 2011
Investment
Demand
127
78
139
62
131
60
6
1
1
2
4
-20
9
6
2
0
1
34
2
34
37
9
13
5
9
1
10
3
5
1
22
24
0
0
32
22
-133
133
4
0
4
0
2
4
2
59
-37
37
39
33
242
383
215
39
457
422
Jewellery
Q4 2011
Investment
Demand
114
72
145
66
136
63
7
0
2
2
4
-12
6
7
3
1
1
23
2
26
31
9
9
5
9
1
9
3
4
1
7
17
0
0
42
20
-94
94
14
0
11
0
8
2
7
40
-31
31
34
22
260
323
212
35
472
358
Jewellery
Q1 2012
Investment
Demand
138
64
164
92
155
90
6
1
2
2
4
-3
11
9
4
1
2
31
5
17
42
8
11
4
9
0
17
3
4
1
15
15
0
0
18
14
-66
66
3
0
3
0
3
1
2
21
-27
27
29
17
336
314
155
30
491
345
Jewellery
Q2 2012
Investment
Demand
125
57
109
50
100
48
7
1
2
2
5
2
6
5
2
1
1
16
3
16
42
7
15
4
8
0
14
2
4
1
19
18
0
0
20
12
-76
76
5
0
4
0
3
1
2
34
-17
17
20
24
254
260
167
26
421
286
Jewellery
Q3 2012
Investment
Demand
136
83
134
52
127
50
6
1
1
1
5
-5
8
4
2
1
0
15
2
16
35
7
11
4
10
1
9
2
4
1
21
8
0
0
31
10
-68
68
3
0
4
0
2
1
1
29
-17
17
19
21
306
258
156
30
462
288
Jewellery
Q4 2012
Investment
Demand
153
109
146
64
137
62
7
0
2
2
4
-4
7
5
2
1
0
15
2
16
34
9
9
5
12
1
9
3
4
1
7
7
0
0
40
16
-67
67
11
0
11
0
7
1
6
26
-19
19
22
21
327
305
195
33
522
337
Jewellery
Q1 2013
Investment
Demand
160
98
194
114
185
111
7
1
2
3
4
-3
11
6
4
1
2
36
4
14
47
8
12
4
13
1
18
2
4
1
17
31
0
0
18
20
-50
50
3
0
3
0
0
0
0
21
-14
14
14
15
410
375
141
30
551
406
Jewellery
Q2 2013
Investment
Demand
188
122
167
127
153
123
12
1
2
3
5
5
8
9
2
1
1
26
3
20
56
12
19
5
13
1
19
4
6
2
26
38
0
0
20
24
-86
86
4
0
3
0
0
0
0
41
-20
20
20
24
390
469
185
39
576
508
Jewellery
Source: World Gold Council, Datastream.
50
September 12, 2013
Disclosure Appendix
Reg AC
We, Eugene King, Abhinandan Agarwal, Fletcher Tully, CFA and Christophor Jost, hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject
company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed
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Disclosures
Coverage group(s) of stocks by primary analyst(s)
Eugene King: EMEA Mining, Europe-Mining.
EMEA Mining: Anglo American Platinum, AngloGold Ashanti, ENRC, Ferrexpo Plc, Gold Fields, Harmony Gold, IRC Ltd, Impala Platinum Holdings Ltd., Israel Chemicals, Jastrzebska Spolka Weglowa
S.A., KGHM Polska Miedz S.A., Kenmare Resources, Koza Gold, Mechel, Mechel (Pref), New World Resources Plc, Norilsk Nickel, Petropavlovsk PLC, Polymetal International Plc, Polyus Gold
International, Raspadskaya, Sibanye Gold, Sierra Rutile, United Company Rusal, Uralkali.
Europe-Mining: African Barrick Gold, African Minerals, Anglo American plc, Antofagasta plc, Aquarius Platinum, Aureus Mining, BHP Billiton Plc, Banro Corporation, Boliden, Centamin Plc, Endeavour
Mining, First Quantum Minerals, Fresnillo PLC, Gem Diamonds, Glencore Xstrata plc, Hochschild Mining Plc, Kazakhmys, Kumba Iron Ore, London Mining, Lonmin, Lundin Mining Corporation, Norsk
Hydro, Nyrstar, Petra Diamonds, Platinum Group Metals Ltd., Randgold Resources, Rio Tinto plc, Semafo, Inc., Vedanta Resources.
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Buy
Hold
Investment Banking Relationships
Sell
Buy
Hold
Sell
Global
31%
54%
15%
49%
41%
38%
As of July 1, 2013, Goldman Sachs Global Investment Research had investment ratings on 3,535 equity securities. Goldman Sachs assigns stocks as Buys and Sells on various regional Investment
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51
September 12, 2013
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September 12, 2013
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September 12, 2013

Europe, Middle East & Africa: Metals & Mining: Gold

resulting in a justifiable rally in more

After the rally leveraged names stretched on

Sibanye provides a compelling valuation

The Goldman Sachs Group, Inc.

African Barrick Gold

African Barrick Gold

EPS (US$/sh and ZAR/sh)

* denotes Conviction List membership

We forecast gold to decline from here

12-MONTH PRICE TARGETS AND RATINGS

Another round of above CPI wage increases

September 12, 2013

Europe, Middle East & Africa: Metals & Mining: Gold

Supply-demand model has reshaped; we expect 2H13 to replicate 1H changes

Appendix 1: Refreshing our industry positioning framework

Appendix 2: Demand by country

Goldman Sachs Global Investment Research

September 12, 2013

Europe, Middle East & Africa: Metals & Mining: Gold

Goldman Sachs Global Investment Research

September 12, 2013

Europe, Middle East & Africa: Metals & Mining: Gold

Goldman Sachs Global Investment Research

September 12, 2013

Europe, Middle East & Africa: Metals & Mining: Gold

GDX index reweighting; positive for Sibanye and African Barrick

Goldman Sachs Global Investment Research

September 12, 2013

Europe, Middle East & Africa: Metals & Mining: Gold

Price and ratings summary

African Barrick Gold

Target Price Mkt Cap

Gold - Senior producers

Source: Goldman Sachs Global Investment Research.

Valuation methodology summary

50/50 blend of P/E on '15 and 1x NAV

50/50 blend of P/E on '15 and 1x NAV

50/50 blend of P/E on '15 and 1x NAV

50/50 blend of P/E on '15 and 1x NAV

50/50 blend of P/E on '15 and 1x NAV

50/50 blend of P/E on '15 and 1x NAV

African Barrick Gold

* denotes Conviction List membership

Goldman Sachs Global Investment Research

September 12, 2013

Europe, Middle East & Africa: Metals & Mining: Gold

Source: Goldman Sachs Global Investment Research.

Goldman Sachs Global Investment Research

September 12, 2013

Europe, Middle East & Africa: Metals & Mining: Gold

Recent rally helped by Syrian uncertainty

Brent and gold prices 1999 -current

Brent and Gold prices last two months

2nd Iraq war

Goldman Sachs Global Investment Research

September 12, 2013

Europe, Middle East & Africa: Metals & Mining: Gold

Gold long shorts 2008 - current

Gold long and shorts - YTD

Contracts of 100 troy oz

Contracts of 100 troy oz