Investment spend ramping up as expected    Gold Fields reported solid 1H17 results; considering the flat gold priceenvironment. Normalised earnings declined 25% year-on-year to US$77m /USc10ps on flat production and flat all-in sustaining costs but higher y-onydepreciation weighed on results. An SAc40ps dividend was declared (DBeSAc37ps). All-in costs increased 8% year-on-year to US$1,103/oz as a result ofincreased project capital expenditure. Cash outflows totalled US$(160)m (DBe;Gold Fields reported US$(102)m outflow excluding the purchase cost of US$60min Gold Road shares) as compared to 1H16s positive US$60m. Net debt increasedto R1,365m or 1.12x net debt to EBITDA (from R1.2bn at 0.95x end FY16).    Lots on the go: projects in Australia, Ghana, Chile and South Africa    After generating strong cash flows in 2016 of Gold Fields is spending projectcapital to maintain its production profile for "the next 8-10 years". It is still inthe early stages of this c.US$500m (excl. South Deep) program with Gold Fieldshaving spent c.US$118m or 24% of total project capex. Project capex of US$53mwas spent at Damang (Ghana) in 1H17 (project specs: US$230m project over 2years for 200-225kozpa at AIC US$950/oz for 8 years). Gold Fields is expectingto deliver 44Mt mined in FY17 vs. 33Mt in the project schedule after a good1H17. Project capex of US$37m was spent at Gruyere (50% JV in Australia) in1H17 (project specs 100% basis: US$407m over 3 years for 270kozpa at AIC ofA$945/US$720 per ounce for 13 years) and the project is in line with schedule.Exploration expenditure of US$28m at Salares Norte (Chile) with the goal ofproducing a feasibility study by mid-2018 (US$64m expenditure for FY17).Theoutcome of these projects will be crucial to the Gold Fields investment case, in ourview. These projects will consume all existing assets' cash flows and more overthe next 18 months. At current valuation, we believe it prudent to retain a Holdon the shares until project outcomes are clearer, project capex is rolling away andcash flows can be assessed in the context of updated gold price and FX.

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