Quarter Ended 31 December 2005 JOHANNESBURG, South Africa, Jan. 26
/PRNewswire-FirstCall/ -- Gold Fields Limited (NYSE & JSE: GFI)
today announced December 2005 quarter net earnings of R262 million
compared with R39 million in the September 2005 quarter and
earnings of R67 million for the December quarter of 2004. In US
dollar terms net earnings for the December 2005 quarter equated to
US$40 million compared with US$6 million in the September 2005
quarter and earnings of US$11 million for the December quarter of
2004. Net earnings excluding gains and losses on financial
instruments and foreign debt net of cash and exceptional items were
R275 million (US$42 million) for the December 2005 quarter compared
with R44 million (US$7 million) in the September quarter. December
2005 quarter highlights: -- Attributable gold production increased
5 per cent to 1,040,000 ounces; -- Total cash costs at R71,659 per
kilogram (US$341 per ounce) 2 per cent lower than the September
quarter; -- Total cash costs at R66,007 per kilogram (US$314 per
ounce) when calculated in line with peer group; -- Operating profit
increased by 73 per cent from R554 million (US$85 million) to R958
million (US$147 million); -- Cerro Corona and Bolivar deals keep
international growth strategy on track; -- Interim dividend
declared of 40 SA cents per share payable 20 February 2006. Ian
Cockerill, Chief Executive Officer of Gold Fields said: "As
expected Gold Fields posted a strong December quarter with, in
particular, the South African operations delivering a healthy 8 per
cent improvement in production, while maintaining a strong grip on
costs as evidenced by a 4 per cent decline in total cash costs.
During the quarter Gold Fields made significant progress towards
achieving its international growth objectives with the conclusion
of the Cerro Corona acquisition in Peru, and approval early in
January of the Bolivar acquisition by the shareholders of that
company. Gold Fields is in good shape on all fronts and has started
2006 with renewed energy and commitment to deliver value for
shareholders. The improvement in the gold price provides an
opportunity to secure enhanced value from our operations." Stock
data Number of shares in issue - at end December 2005 493,312,693 -
average for the quarter 492,600,779 Free Float 80% ADR Ratio 1:1
Bloomberg / Reuters GFISJ / GFLJ.J JSE Limited - (GFI) Range -
Quarter ZAR86.60 - ZAR111.89 Average Volume - Quarter 1,800,664
shares / day NYSE - (GFI) Range - Quarter US$12.92 - US$17.90
Average Volume - Quarter 1,395,152 shares / day South African Rand
Six months to Quarter Restated Restated Dec Dec Dec Sept Dec 2004
2005 2004 2005 2005 Salient features Gold produced* kg 63,916
63,234 32,599 30,892 32,342 Total cash costs R/kg 65,700 72,202
64,921 72,768 71,659 Tons milled 000 22,866 23,977 11,823 11,888
12,089 Revenue R/kg 83,381 96,526 84,872 91,669 101,184 Operating
costs R/ton 205 208 198 207 210 Operating profit Rm 1,093 1,512 637
554 958 Operating margin % 19 23 22 18 28 Rm 156 301 67 39 262 Net
earnings SA c.p.s. 31 61 13 8 53 Rm 121 297 32 36 261 Headline
earnings SA c.p.s. 24 60 6 7 53 Rm 69 318 87 44 275 Net earnings
excluding gains and losses on financial instruments and foreign
debt net of cash and exceptional items SA c.p.s. 13 65 17 9 56
United States Dollars Quarter Six months to Restated Restated Dec
Sept Dec Dec Dec 2005 2005 2004 2005 2004 Salient features Gold
produced* (000) oz 1,040 993 1,048 2,033 2,055 Total cash costs
$/oz 341 347 330 344 327 Tons milled 000 12,089 11,888 11,823
23,977 22,866 Revenue $/oz 482 437 431 460 416 Operating costs
$/ton 32 32 32 32 33 Operating profit $m 147 85 103 232 175
Operating margin % 28 18 22 23 19 $m 40 6 11 46 25 Net earnings US
c.p.s. 8 1 2 9 5 $m 40 6 6 46 20 Headline earnings US c.p.s. 8 1 1
9 4 Rm 42 7 14 49 11 Net earnings excluding gains and losses on
financial instruments and foreign debt net of cash and exceptional
items US c.p.s. 9 1 2 10 2 * Attributable - All companies wholly
owned except for Ghana (71.1%). Note - restated figures are due to
the adoption of IFRS 2, share based payments. Health and safety We
regret to report eight fatalities during the December quarter with
six of these accidents due to falls of ground and seismicity. A
conveyor belt accident claimed the life of an employee at Tarkwa in
November 2005. The Australian operations continued being fatality
free this quarter. The remaining fatalities were at the South
African operations. The fatal injury frequency rate was 0.21, which
is lower than the previous quarter's figure of 0.27. The lost day
injury frequency rate improved from 12.59 to 11.94, the serious
injury frequency rate regressed from 5.9 to 7.2 and the days lost
frequency rate also regressed from 348 to 360. These rates are
still unacceptably high and management is continuing to actively
review all current safety initiatives and seeking areas of
improvement through serious incident review processes, so as to
attain the long-term objective of achieving the Ontario safety
standards on all of our mines. Financial review Quarter ended 31
December 2005 compared with quarter ended 30 September 2005 Revenue
Attributable gold production increased by 5 per cent to 1,040,000
ounces in the December 2005 quarter, compared with 993,000 ounces
achieved in the September 2005 quarter. Production at the South
African operations was 698,000 ounces, compared with 647,000 in the
September quarter, an increase of 8 per cent. Attributable
production at the international operations was in line with the
previous quarter at 342,000 ounces. At the South African
operations, Driefontein performed largely as expected with the
slightly lower underground grade offset by improved underground ore
volumes. As predicted in the previous quarter, Kloof and Beatrix
experienced a much improved performance, mainly due to increased
underground volumes. Kloof's underground yield was marginally
higher at 8.8 grams per ton, while the yield at Beatrix was
unchanged at 5.2 grams per ton. At the international operations the
decline in attributable production at Tarkwa and Agnew was mostly
offset by the increase at St Ives and Damang. Tarkwa declined by
6,000 ounces to 118,000 ounces (attributable) mainly due to lower
mill throughput and an increase in gold-in-process at the heap
leach facilities. At Agnew, mining volumes and yields at both
surface (Songvang) and underground (Waroonga complex - Kim and Main
Lode) operations decreased due to the transition from oxide to
primary reef at Songvang and unsustainably high yields experienced
at the Kim mine in the previous quarter. St Ives increased gold
production by 6,000 ounces to 126,000 ounces mainly due to higher
treated volumes. Damang increased production from 41,000 ounces to
43,000 ounces (attributable) due to higher grade feed to the plant
as a result of fresh ore replacing lower grade stockpiles. The US
dollar gold price increased by 10 per cent from US$437 per ounce in
the September quarter to US$482 per ounce in the December quarter.
The rand averaged R6.53 against the US dollar, virtually unchanged
from the September quarter. The resultant rand gold price increased
10 per cent, from R91,669 per kilogram in the September quarter to
R101,184 per kilogram in the December quarter. The increase in
production, together with the increase in the rand gold price
achieved, resulted in revenue increasing from R3,023 million
(US$464 million) to R3,479 million (US$534 million) this quarter.
Operating costs Operating costs for the December 2005 quarter, at
R2,542 million (US$390 million), increased by 3 per cent when
compared with the September quarter's R2,457 million (US$377
million). The majority of this increase was at the South African
operations where costs increased by R61 million (US$10 million)
from R1,672 million (US$256 million) to R1,732 million (US$266
million), when compared with the September quarter. The increase at
the South African operations was due to an increase in mining
volumes, as shifts were lost last quarter as a result of the
industrial action in August at the time of the wage negotiations.
The 8 per cent increase in production at the South African
operations resulted in total unit cash costs at these operations
decreasing by 4 per cent. Costs at the international operations,
including gold-in-process changes, were R789 million (US$121
million), 1 per cent below the R797 million (US$122 million)
incurred in the September quarter. Tarkwa's costs were slightly
lower in line with the lower production. Damang's costs were lower
in the December quarter mainly due to the decrease in the
gold-in-process charge, as fresh ore replaced stockpile feed. At St
Ives operating costs increased in line with the increased
production. Agnew's costs were unchanged, the lower mining volumes
offset by the increased mining costs at Songvang open pit due to
increased ore hardness and mining depth. Exchange rates had no
significant impact when translating from local currencies in
Australia and Ghana, into South African rand - the reporting
currency. Operating margin The net effect of the movements in
revenue and costs, after taking into account gold-in-process
changes, was an operating profit of R958 million (US$147 million).
This is 73 per cent above the R554 million (US$85 million) achieved
in the September quarter. The Group margin increased from 18 per
cent last quarter to 28 per cent in the December quarter, while the
margin at the South African operations more than doubled from 9 per
cent to 21 per cent. The margin at the international operations
increased from 33 per cent to 39 per cent quarter on quarter.
Amortisation Amortisation increased from R353 million (US$54
million) in the September quarter to R376 million (US$58 million)
in the December quarter. This increase was mainly due to the
increase in production experienced at the South African and
Australian operations during the quarter. Other Net interest and
investment income after taking into account interest paid,
increased from R1 million (US$- million) in the September quarter
to R17 million (US$3 million) for the December quarter largely due
to enhanced returns on equity linked rehabilitation investments.
The loss on financial instruments of R19 million (US$3 million)
compares with a loss of R9 million (US$1 million) in the September
quarter. Included this quarter is a marked to market gain on US
dollar/rand forward purchase contracts of R18 million (US$3
million), offset by an R8 million loss (US$1 million) on the US
dollar/Australian dollar call options and a loss on unexpired
diesel call options in Ghana of R14 million (US$2 million).
Realised this quarter was a loss of R14 million (US$3 million)
resulting from the maturity on 1 December, and rollover to 5 June
2006, of the US$30 million US dollar/rand forward purchase which
offsets the marked to market gain referred to above. More details
on these financial instruments are given on page 15 of this report.
Exploration expenditure Exploration expenditure decreased from R66
million (US$10 million) in the September quarter to R54 million
(US$8 million) in the December quarter - please refer to the
Exploration and Corporate Development section for more detail.
Taxation Taxation for the quarter amounted to R200 million (US$31
million) compared with R45 million (US$7 million) in the September
quarter. The tax provision includes normal and deferred taxation on
all operations together with royalties at the international
operations. The increase is in line with the increased operating
profit. Earnings Net profit attributable to ordinary shareholders
amounted to R262 million (US$40 million) or 53 SA cents per share
(US$0.08 per share), compared with R39 million (US$6 million) or 8
SA cents per share (US$0.01 per share) in the previous quarter.
Headline earnings i.e. earnings less the after tax effect of asset
sales, impairments and the sale of investments, was R261 million
(US$40 million) or 53 SA cents per share (US$0.08 per share),
compared with earnings of R36 million (US$6 million) or 7 SA cents
per share (US$0.01 per share) last quarter. Earnings excluding
exceptional items as well as net gains and losses on financial
instruments and foreign debt net of cash amounted to R275 million
(US$42 million) or 56 SA cents per share (US$0.09 per share),
compared with earnings of R44 million (US$7 million) or 9 SA cents
per share (US$0.01 per share) reported last quarter. Cash flow Cash
flow from operating activities for the quarter was R557 million
(US$90 million), which was nearly double the operating cash flow
generated in the September quarter of R303 million (US$47 million).
This was mainly due to the increase in production and the higher
gold price received. The increased profit before tax and
exceptional items of R498 million (US$76 million) was partially
offset by an outflow of working capital of R266 million (US$41
million) due to timing of creditors payments. Capital expenditure
amounted to R402 million (US$62 million) compared with R325 million
(US$50 million) in the September quarter. Expenditure at the South
African operations increased R36 million (US$6 million) to R169
million (US$26 million). A significant portion of this expenditure
was directed at the major projects, with R26 million (US$4 million)
at 1 tertiary and 5 shaft at Driefontein, R9 million (US$1 million)
at Kloof 4 shaft, R10 million (US$2 million) at Kloof 1 shaft
pillar extraction and R33 million (US$5 million) at Beatrix 3
shaft. At the Ghanaian operations, capital expenditure amounted to
R104 million (US$18 million) with R24 million (US$4 million) spent
on the new heap leach pads project at Tarkwa and R27 million (US$4
million) on the Damang main pit cutback. This compares with total
expenditure of R72 million (US$11 million) in the September
quarter. The Australian operations incurred capital expenditure of
R119 million (A$24 million) compared with R111 million (A$22
million) in the September quarter. Expenditure at St Ives of R86
million (A$18 million) included development costs at Argo and
Leviathan underground. At Agnew, the majority of the R33 million
(A$7 million) expenditure was spent on development. Included in
capital expenditure was ongoing exploration expenditure at both
operations of R36 million (A$7 million). Major projects are still
forecast to be in line with approved votes. Proceeds on disposal of
various Group wide mining assets amounted to R4 million (US$1
million) for the quarter. Net investments purchased amounted to R27
million (US$4 million) and includes the purchase of 2.5 million
shares in Avoca Resources Limited (R5 million/US$1 million) and
participating in the Western Areas Gold Mining Company Limited
rights issue (R22 million/US$3 million). Financing activities
include loan repayments to minorities of R67 million (US$10
million) arising from distributions from Gold Fields Ghana Limited
and shares issued to the value of R73 million (US$11 million) as a
consequence of take ups under the employee share options plan,
resulting in a net financing inflow of R6 million (US$1 million)
for the quarter. Net cash inflow for the quarter was R134 million
(US$25 million). After accounting for a positive translation
adjustment of R4 million (the translation adjustment in US dollar
was negative $6 million), the cash balance at the end of December
was R2,937 million (US$461 million). The balance at the end of
September was R2,800 million (US$442 million). Detailed and
operational review Group overview Attributable gold production for
the December 2005 quarter increased 5 per cent to 1,040,000 ounces
when compared with the September quarter. Production from the South
African operations at 698,000 ounces accounted for 67 per cent of
the Group's total attributable production, compared with 647,000
ounces or 65 per cent last quarter. At the South African
operations, gold production increased 8 per cent compared with the
previous quarter. Driefontein was unchanged quarter on quarter at
290,000 ounces. Kloof increased significantly from 218,000 ounces
to 253,000 ounces, mainly due to increased underground volumes as
volumes were impacted by the strike in the previous quarter. The
increase at Beatrix of 16,000 ounces returns production to more
historic levels. Operating profit at the South African operations
increased from R170 million (US$26 million) to R460 million (US$71
million), mainly as a consequence of the increased gold production
and higher gold price achieved. Development at the South African
operations will be increased in the March and June quarters in
order to increase mining flexibility. This is to ensure that
current levels of performance are maintained or improved upon where
this is possible. The cost of this development will be in the
region of R30 million (US$5 million) per quarter of which about one
third will be capitalised. The level of flexibility gained over the
next two quarters will be maintained into the future. The Ghanaian
operations showed a 2 per cent decrease in attributable gold
production to 161,000 ounces. Damang was slightly higher than the
previous quarter offset by the decrease at Tarkwa which was due to
lock-up in the North heap leach pads which are on fourth lifts and
a slower than anticipated release at the new Blue Ridge south pads
exacerbated by high rainfall during the quarter. Ghana contributed
operating profit of R280 million (US$43 million), a 35 per cent
increase when compared with the September quarter. Production from
the Australian operations was similar quarter on quarter at 181,000
ounces. The decrease in production at Agnew of 7,000 ounces was due
to lower grades. At St Ives the increase of 6,000 ounces was due to
increased volumes processed through the Lefroy mill as a
consequence of higher underground mining volumes. Operating profit
from the Australian operations increased from R177 million (A$36
million, US$27 million) to R216 million (A$44 million, US$33
million), primarily as a result of the higher gold price which
increased from an average of A$558 per ounce to A$649 per ounce for
the December quarter. The international operations contributed R497
million (US$76 million) or 52 per cent of the total operating
profit of R958 million (US$147 million). This compares with R384
million (US$59 million) or 69 per cent of the total operating
profit of R554 million (US$85 million) last quarter. South African
Operations Project 500 was initiated in September 2003 to increase
revenue and reduce costs through two sub-projects i.e. Project 400
and Project 100. These projects have proved successful and led to
additional projects - Project 100+ and Project Beyond as detailed
below. Project 400 Project 400 was aimed at improving revenue such
that an additional R400 million (US$60 million) per annum could be
generated on a sustainable basis. This was to be achieved through a
basket of productivity initiatives; by eliminating non-contributing
production and replacing low-grade surface material with higher
margin underground material - all aimed at improved quality
volumes. In financial 2005 this resulted in improved yields, in
line with the life of mine grades for each of the South African
operations, as reflected in the following table. Year/Quarter F2004
F2005 Sep 2005 Dec 2005 Driefontein: Life of mine head grade as per
the 2003, 2004 and 2005 annual report 8.7 8.1 8.0 8.0 Life of mine
head grade adjusted for estimated metallurgical recoveries 8.4 7.8
7.8 7.8 Driefontein (underground yields achieved) 8.1 8.3 8.1 7.9
Kloof: Life of mine head grade as per the 2003, 2004 and 2005
annual report 9.8 10.5 9.7 9.7 Life of mine head grade adjusted for
estimated metallurgical recoveries 9.5 10.2 9.4 9.4 Kloof
(underground yields achieved) 9.0 9.1 8.7 8.8 Beatrix: Life of mine
head grade as per the 2003, 2004 and 2005 annual report 5.1 5.5 5.4
5.4 Life of mine head grade adjusted for estimated metallurgical
recoveries 4.9 5.3 5.2 5.2 Beatrix (underground yields achieved)
4.6 5.0 5.2 5.2 Project Beyond and Project 100+ Project Beyond,
initiated in 2004, is a procurement (sourcing) initiative targeting
savings of between R200 million and R300 million (US$33 million to
US$50 million) over three years, i.e. around 10 per cent of the
amount expended on materials, services and capital expenditure at
the South African operations. Total expenditure on these items is
approximately R2.7 billion (US$450 million). The project delivered
R101 million (US$16 million) of contract savings on historic
baseline expenditure during the 2005 financial year through
addressing commodities such as grinding media, foodstuffs, mill
liners, ore transport, support, bearings, engineering repairs, and
lubricants. The savings are realised as these contracts are
utilised by the mining operations i.e. largely during the 2006
financial year. To date a total R1.1 billion (US$180 million) of
spend has been reviewed as part of Project Beyond. Contractual
savings to date are R127 million (US$20 million). R61 million
(US$10 million) has been realised in cost savings, of which R31
million (US$5 million) applies to the 2006 financial year. An
additional R29 million (US$ 5 million) in cost savings are
estimated to impact cash flow before the end of financial 2006.
During the past year general inflation pressures were experienced
on total materials and services expenditure. Project Beyond
successfully mitigated the impact of these increases on costs.
Project Beyond is targeting a further R40 million (US$7 million)
contractual savings per annum at the South African operations
during the 2006 financial period. Most of the savings on these
commodities will be realised post financial 2006. During the past
quarter focus has been on a range of around 20 commodities
including diesel engine repairs, hoppers, ventilations pipes,
labour hire, steel wire ropes, lime, electric motors and
explosives. A proportion of future savings are of the nature of
reduced cost of ownership i.e. they arise out of lower operating
costs over the life of the commodity. These savings, while
enduring, are realised over a more extended period. As attention is
being given to a more global and integrated approach to supply and
sourcing, likely benefits are being identified in the international
operations of Australia, Ghana and the Peruvian Cerro Corona
project. Preliminary indications are that savings of around US$20
million per annum may be achieved. The Project 100+ initiative
continued during the December quarter. Attention was given to
projects focussed on labour optimisation, transport, electricity
demand and pump management. Expected benefits of up to R200 million
(US$33 million) are expected to flow during 2006 and 2007.
Driefontein December 2005 September 2005 Gold produced - 000'ozs
290.1 289.8 Yield - underground - g/t 7.9 8.1 - combined - g/t 5.4
5.6 Total cash costs - R/kg 71,935 69,872 - US$/oz 343 333 Gold
production is in line with the previous quarter at 290,100 ounces.
As forecast, the underground grade decreased from 8.1 grams to 7.9
grams per ton during the December quarter. Area mined increased by
8 per cent quarter on quarter, consequently increasing underground
tons milled from 989,000 to 1,029,000 for the quarter. Surface tons
increased by 5 per cent to 655,000 tons at a slightly lower yield.
Operating costs increased 3 per cent from R656 million (US$101
million) to R675 million (US$104 million) as a result of savings
achieved in the previous quarter on the wage bill due to the strike
and due to a conscious increase in complements during the current
quarter so as to create a platform for increased production levels
in the future. As a result total cash costs increased 3 per cent in
rand terms from R69,872 per kilogram to R71,935 per kilogram. In US
dollar terms, total cash costs increased by 3 per cent from US$333
per ounce to US$343 per ounce. Operating profit increased by 41 per
cent from R168 million (US$26 million) in the September quarter to
R237 million (US$36 million) in the December quarter, mainly as a
result of an improvement in the gold price. Capital expenditure
increased from R47 million (US$7 million) to R61 million (US$9
million) for the December quarter. Largely due to the timing of
expenditure on various projects. Gold production and costs for the
March quarter are expected to be similar to the December quarter.
Kloof December 2005 September 2005 Gold produced - 000'ozs 252.6
218.4 Yield - underground - g/t 8.8 8.7 - combined - g/t 8.3 7.8
Total cash costs - R/kg 79,369 88,295 - US$/oz 378 421 Gold
production at Kloof increased by 16 per cent from 218,400 ounces to
252,600 ounces in the December quarter. This was due to higher
underground tonnage as more shifts were worked compared with the
previous quarter resulting from the impact of the strike in the
previous quarter. Underground yields improved again this quarter as
a result of actions undertaken to address the grade decline
highlighted in the previous quarters. Surface yields improved as a
result of the closure and clean up of No. 3 plant which will
continue in the March quarter. The operating costs at R648 million
(US$99 million) for the quarter increased by 4 per cent compared
with the previous quarter's cost of R625 million (US$96 million).
This was due to increased production in this quarter. However, the
higher gold production and focus on reducing costs resulted in the
total unit cash cost decreasing by 10 per cent to R79,369 per
kilogram, compared with the R88,295 per kilogram in the September
quarter. In US dollar terms total cash costs decreased by 10 per
cent to US$378 per ounce compared with the previous quarter's
US$421 per ounce. Operating profit improved to R145 million (US$22
million) for the quarter compared with a loss of R4 million (US$1
million) in the September quarter. Capital expenditure increased
from R43 million (US$7 million) in the previous quarter to R53
million (US$8 million) in the current quarter. This was mainly due
to increased expenditure at 4 sub vertical shaft and the 1 shaft
pillar project. Gold production is expected to be lower in the
March quarter and as a consequence unit cash costs will be higher.
Beatrix December 2005 September 2005 Gold produced - 000'ozs 154.9
138.6 Yield - underground - g/t 5.2 5.2 Total cash costs - R/kg
81,984 87,152 - US$/oz 391 416 Gold production at Beatrix increased
by 12 per cent from 138,600 ounces in the September quarter to
154,900 ounces in the December quarter. This was due to a 12 per
cent increase in underground volumes from 831,000 tons to 931,000
tons in the December quarter. The overall yield remained constant
at 5.2 grams per ton quarter on quarter. The logistics project at
the West section (4 shaft) to alleviate the access tunnel ground
control problems was completed as planned. The mine reverted to
historic levels of production following the industrial action which
took place during the previous quarter. Operating costs quarter on
quarter increased by 5 per cent from R391 million (US$60 million)
to R409 million (US$63 million) mainly due to the increased
production volumes. Total cash costs per kilogram decreased by 6
per cent from R87,152 per kilogram (US$416 per ounce) in the
September quarter to R81,984 per kilogram (US$390 per ounce) in the
December quarter as a result of the higher gold production. Beatrix
posted an operating profit of R79 million (US$12 million) in the
December quarter compared with R6 million (US$1 million) in the
September quarter. This was mainly due to the increase in gold
output and an increase of 10 per cent in the gold price received.
Capital expenditure at R55 million (US$8 million) was 25 per cent
higher than the September quarter mainly due to a conscious effort
to maintain operational performance at current levels, or better,
for the long-term. Gold production and costs for the March quarter
are forecasted to be in line with the December quarter.
International Operations Ghana Tarkwa December September 2005 2005
Gold produced - 000'ozs 166.6 174.2 Yield - Heap leach - g/t 0.9
0.9 Yield - CIL plant - g/t 1.6 1.5 Total cash costs - US$/oz 282
277 Tarkwa processed a total of 5.2 million tons at an average
yield of 1.0 gram per ton, producing 166,600 ounces of gold in the
December quarter. The 4 per cent quarterly reduction in gold output
was due mainly to changes in gold- in-process at the heap leach
facilities and lower volumes mined and processed partially offset
by increased output at the CIL plant. The heap leach process
contributed 111,000 ounces and the CIL plant 55,600 ounces. This
compares with 119,600 ounces and 54,600 ounces respectively in the
previous quarter. Mining volumes decreased by 2 million tons to 22
million tons as a result of rain interruptions and additional tons
mined in the previous quarter to advance the early completion of
the heap leach pad expansions at the northern facility. The strip
ratio was virtually unchanged at 3.36 and reflects the current push
backs at the Teberebie and Kotraverchy pits. Mining costs were
US$0.96 per total ton mined for the quarter compared with US$0.88
per total ton mined last quarter and reflects the increase in fleet
maintenance costs due to the increasing number of hours the units
have been operating and the increased cost of diesel. The CIL plant
continues to perform in line with expectation and the quarterly
throughput was consistent at 1.1 million tons at an average yield
of 1.55 grams per ton. The difficulties reported previously with
regard to the blending of soft higher grade and hard medium grade
ore has largely been resolved. Head grades have been lower than
planned with waste dilution from the Teberebie pit being the
primary contributor. Plans are in place to minimise this dilution
through a major cutback programme, thereby allowing for optimal
digging on the 28 degrees to 35 degrees dipping reef horizons. A
total of 4.1 million tons at a head grade of 1.21 grams per ton was
stacked on the heap leach pads during the December quarter. The
decrease in gold produced from the heap leach pads of 8,600 ounces
compared with the previous quarter is mainly due to a lock-up of
6,400 ounces in GIP, compared with a net GIP release of 1,400
ounces in the September quarter. This increase in GIP is largely
attributable to commencement of stacking on the fourth lift at the
North heap leach facility and a slower than anticipated release of
the south pads, exacerbated by the high rainfall during the
quarter. Operating costs at US$49 million (R322 million), including
gold-in-process adjustments, were US$0.6 million higher than that
reported in the September quarter, reflecting the increase in
mining costs. Operating cost per ton treated excluding GIP charges
was US$9.57 per ton as against US$9.25 per ton in the September
quarter. Total cash costs at US$282 per ounce compare with the
September quarter's US$277 per ounce. Operating profit at US$34
million (R220 million) increased by US$6 million (R38 million) with
the lower gold production being more than offset by the increase in
the average US$ gold price. Capital expenditure increased from US$7
million (R47 million) in the September quarter to US$11 million
(R69 million) in the December quarter. The main areas of capital
expenditure are the construction of leach pads at the North and the
purchasing of mining equipment. Gold production for the March
quarter is expected to improve as stacking will commence in
February 2006 on the first lift of the newly constructed Phase 4
pads at the North heap leach facility and will continue on the
first lift at the new Blue Ridge pads at the South heap leach
facility. Good progress has been made during January in addressing
the ore dilution in the Teberebie pit and a slight increase in mill
grade is expected. Cost pressure will continue as higher stripping
ratios are being planned to ensure mining flexibility. Damang
December September 2005 2005 Gold produced - 000'ozs 60.2 57.2
Yield - g/t 1.4 1.3 Total cash costs - US$/oz 330 375 Gold
production increased from 57,200 ounces during the September
quarter to 60,200 ounces in the December quarter. This increase is
mainly attributable to the higher grade ore to the plant, which
increased from 1.46 grams per ton to 1.52 grams per ton. The
increase in grade resulted mainly from an increase in the
higher-grade oxide ore tonnages mined from the Tomento pit, which
displaced the lower grade stockpiled oxide tonnages fed to the
plant during the previous quarter. The fresh ore tonnages mined
from the Amoanda pit, previously an oxide ore source, replaced the
higher-grade fresh ore tonnages mined from the Juno 2SE pit, which
reached its final depth in the December quarter. Mill throughput
for the quarter at 1.3 million tons was similar to the September
quarter. Total tons mined increased from 3.7 million tons to 3.9
million tons. Ore mined for the quarter at 642,000 tons was lower
than the previous quarter's 742,000 tons. This was as a result of
an increase in the stripping ratio to 5.05 from 4.02. The Tomento
pits will remain the main sources of oxide feed to the plant in the
near future and the Amoanda pit remains the main fresh ore source
to the plant. The Juno 2SW pit, which is a southern extension to
the Damang pit cutback, is being developed and will be brought into
production during this financial year. Operating costs, including
gold-in-process adjustments, reduced to US$20 million (R128
million) from US$21 million (R138 million) in the previous quarter.
This was as a result of a lower gold-in-process charge, it being
US$2 million lower than the previous quarter. Cost per ton milled
decreased slightly from US$14.34 to US$14.28. Total cash costs
decreased from US$375 per ounce to US$330 per ounce, reflecting the
increase in ounces produced and the decrease for the quarter in the
gold-in-process charge. Operating profit increased from US$4
million (R26 million) to US$9 million (R61 million), due to
increases in both gold production and the US$ gold price. Capital
expenditure incurred during the quarter amounted to US$5 million
(R35 million). The majority of this expenditure was incurred in
mining the Damang pit cutback. During the quarter mining at the
Damang pit cutback commenced on the east wall utilising a second
mining fleet as mining continued on the west wall. Production to
date is 12 per cent ahead of the plan, however the small quantity
of ore that was originally planned to be mined has not yet been
realised due to delaying the start on the east side of the pit to
better fit the annual tailings dam construction programme. The
first ore is now scheduled to be mined during the coming quarter.
Gold production is expected to decrease slightly in the March
quarter as a result of the depletion of the higher grade fresh ore
B4 surface stockpile. The African Mining Services Contract for
mining at Damang over the next five years is currently being
finalised. Australia St Ives December September 2005 2005 Gold
produced - 000'ozs 125.9 119.8 Yield - Heap leach - g/t 0.5 0.5
Yield - Milling - g/t 3.2 3.1 Total cash costs - A$/oz 431 415 -
US$/oz 322 316 Gold production for the quarter was 125,900 ounces,
5 per cent up from last quarter's 119,800 ounces. This increase was
due to higher treatment volumes through the Lefroy mill and higher
grade ore from the open pit and underground operations. The Lefroy
mill produced 117,600 ounces for the quarter and the heap leach
plant 8,300 ounces, compared with 111,200 ounces and 8,600 ounces
respectively in the previous quarter. Total tons processed during
the quarter amounted to 1.71 million, an increase of 4 per cent
over the September quarter. The Lefroy plant processed 1.15 million
tons, an increase of 3 per cent against the previous quarter as a
result of ongoing plant optimisation. Tonnage treated through the
heap leach plant increased from 522,000 tons to 562,700 tons as a
result of improved plant availability following purchase of the
crushing plant from the contractor, Henry Walker Eltin. The
combined head grade processed for both the Lefroy mill and the heap
leach pads at 2.6 grams per ton was up slightly against the
September quarter's 2.5 grams per ton. Improved performance of the
underground mines led to an increase in volume of high grade ore to
the Lefroy mill and an increase in yield to 3.2 grams per ton from
3.1 grams per ton in the previous quarter. Open pit mining
operations produced 1.07 million tons of ore during the quarter,
down 11 per cent from 1.20 million tons the previous quarter. Open
pit ore grade increased to 1.75 grams per ton from 1.64 grams per
ton the previous quarter as higher grade ores were accessed in the
Mars and Agamemnon open pits. Waste movement increased as a result
of the cutback on the Agamemnon pit to access recently discovered
extensions to the high grade ore zones. During the quarter 1.74
million BCM's mined of open pit ore and waste were mined at an
average strip ratio of 3.51, compared with 1.43 million BCM's at an
average strip ratio of 2.64 in the September quarter. Operating
performance of the underground operations improved over the
previous quarter producing 441,500 tons of ore at 4.8 grams per ton
compared with 427,600 tons of ore at 4.5 grams per ton in the
September quarter. At the Leviathan underground mine both volume
and grade improved over the previous quarter as stoping on the
Conqueror deposit continued to ramp up. In addition, the stability
issues around the relatively higher grade East Repulse stopes that
impaired the previous quarter results were better managed in the
December quarter. Argo underground mine production was consistent
quarter on quarter. Operating costs increased from A$49 million
(R244 million) to A$55 million (R267 million) reflecting higher
open pit mining waste volumes and higher ore tons processed, as
well as an additional A$0.8 million (R4 million) due to unbudgeted
maintenance and repair costs during the plant shutdown in December,
which was extended by 10 hours to complete these repairs. In
addition, the lower September quarter operating costs included an
A$3 million (R15 million) credit for power charges, reflecting
settlement of a long running claim. Royalties calculated at 10 per
cent on the average quarterly gold price above A$600 per ounce was
payable during the quarter and amounted to R3 million (A$0.6
million). Total cash costs increased from A$415 per ounce (US$316
million per ounce) in the September quarter to A$431 per ounce
(US$322 million per ounce). Operating profit at A$28 million (R137
million) was up on the A$19 million (R94 million) achieved in the
September quarter. This was due to higher revenues resulting from
higher gold production and a higher gold price in Australian dollar
terms. Capital expenditure for the December quarter amounted to
A$18 million (R86 million) up slightly from A$16 million (R81
million) the previous quarter. The increase in capital expenditure
reflects an increase in waste stripping for open pit mining plus
additional exploration expenses. Capital expenditure will increase
slightly in the coming quarters in line with increased waste
stripping activity in the open pits. Gold production and cash costs
in the March quarter are expected to at least match the December
quarter. Agnew December September 2005 2005 Gold produced - 000'ozs
55.1 62.0 Yield - g/t 5.2 5.9 Total cash costs - A$/oz 351 303 -
US$/oz 262 230 Gold production at Agnew decreased 11 per cent to
55,100 ounces in the December quarter compared with 62,000 ounces
in the September quarter. This was driven by a 9 per cent reduction
in ore grade from Kim lode at the Waroonga underground mine. In
addition, open pit head grade decreased to 1.96 grams from 2.50
grams per ton as a result of mining in lower grade zones. Ore
production from the Waroonga underground complex (Kim and Main
Lodes) decreased 9 per cent to 107,500 tons at a grade of 11.8
grams per ton from 117,300 tons at a grade of 12.9 grams per ton in
the September quarter. This resulted in gold production decreasing
to 40,000 ounces from 45,000 ounces in the September quarter.
Productivity during the quarter was impacted by increased support
requirements as the deeper elevations of the mine are developed. A
mining method and support regime modification is planned at Kim
South for the March quarter and is expected to optimise
productivity going forward. Volume moved at the Songvang open pit
was down compared with the previous quarter. Total BCM movement for
the December quarter was 1,405,800, a reduction of 9 per cent on
the September quarter figure of 1,555,800 BCM. This was driven by
reduced waste movement reflected by the strip ratio dropping to
14.8 from 16.1. Ore mined from the pit totalled 250,500 tons at a
head grade of 2.0 grams per ton compared with the September
quarter's 248,900 tons at a head grade of 2.5 grams per ton.
Operating costs decreased slightly from A$20 million (R99 million)
in the September quarter to A$19.8 million (R97 million) in the
December quarter reflecting the lower production but offset
somewhat by increased unit mining costs at the Songvang open pit
due to increased ore hardness and mining depth. Total cash costs
increased from A$303 per ounce (US$230 per ounce) in the September
quarter to A$351 per ounce (US$262 per ounce) in the December
quarter. The increase was as a result of the decrease in gold
production coupled with an increase in processing costs and unit
mining costs at Songvang as the pit deepens and harder ores are
encountered. Agnew's operating profit decreased from A$17 million
(R83 million) in the September quarter to A$16 million (R79
million) in the December quarter, reflecting the decrease in
production. Capital expenditure increased from A$6 million (R30
million) to A$7 million (R33 million) in the December quarter due
to an increase in the development costs at the Waroonga underground
mine. Gold production is expected to decrease slightly and cash
costs increase in the March quarter as the high grade ore body at
Kim is supplemented with lower grade Main Lode ore. Quarter ended
31 December 2005 compared with quarter ended 31 December 2004
restated Attributable gold production in the December 2005 quarter
was similar at 1,040,000 ounces when compared with 1,048,000 ounces
in the December 2004 quarter. Production at the South African
operations decreased from 726,000 ounces to 698,000 ounces produced
mainly at Kloof due to lower underground grades and volumes. At the
international operations, gold production increased from 322,000
ounces to 342,000 ounces, the majority of this increase is due to
the commissioning of the new Lefroy mill at St Ives late December
2004 when comparing the two quarters. Revenue increased 18 per cent
in rand terms (increased 11 per cent in US dollar terms) from
R2,945 million (US$480 million) to R3,479 million (US$534 million).
This increase in revenue was due to the increase in the average
gold price which increased 19 per cent from R84,872 per kilogram
(US$431 per ounce) in the December 2004 quarter to R101,184 per
kilogram (US$482 per ounce) in the December 2005 quarter. Group
operating costs in rand terms increased 9 per cent to R2,542
million (US$390 million). At the South African operations operating
costs increased 3 per cent from R1,687 million (US$275 million) to
R1,732 million (US$266 million) with cost reduction initiatives
partially offsetting the 6.5 per cent wage increase during the
year. The increase in operating costs at the international
operations amounted to 7 per cent, to R786 million (US$121
million). The main reason for this increase was the increased
production at St Ives due to the commissioning of the new mill,
significant increases in diesel, steel and reagents over the past
year and increased cost of maintaining the owner mining fleet at
Tarkwa, as well as normal inflationary pressures. Operating profit
at R958 million (US$147 million) for the December 2005 quarter
compares with R637 million (US$103 million) for the December 2004
quarter. Profit before tax amounted to R500 million (US$77 million)
compared with R239 million (US$39 million) in the December 2004
quarter. This increase was mainly due to the increase in operating
profit. Earnings increased from R67 million (US$11 million) in the
December 2004 quarter to R262 million (US$40 million) in the
December 2005 quarter. Earnings excluding gains on financial
instruments, foreign debt and exceptional items increased from R87
million (US$14 million) in the December 2004 quarter to R275
million (US$42 million) this quarter. Capital and development
projects Bolivar On 12 January 2006, both the shareholders and
warrant/option holders of Bolivar Gold Corp. voted overwhelmingly
in favour of the plan of arrangement through which Gold Fields
proposes to acquire Bolivar. 76.7 per cent of shares and 82.1 per
cent of warrants/options represented and voting at the meeting were
voted in favour of the transaction, with the only significant
dissenting shareholder being Scion Capital LLC, which owns
approximately 19.9 per cent of the shares of Bolivar. 96.1 per cent
of all outstanding shares and 81.0 per cent of all outstanding
warrants were represented at the meeting. The next step in the plan
of arrangement process is for the Supreme Court of the Yukon
Territory of Canada to consider the fairness of the transaction,
which initial hearing was scheduled for 19 January 2006. However,
due to the fact that Scion has filed an oppression claim against
Bolivar, its senior officers and non-independent directors, as well
as Gold Fields, the court stated that the fairness hearing and
oppression claim should be heard together, such hearing to be heard
from 7 to 10 February 2006, If court approval is obtained, the
transaction is expected to close shortly thereafter. In addition,
Scion has filed an application with the Ontario Superior Court of
Justice alleging that Gold Fields has contravened certain
provisions of the Ontario securities Act. Gold Fields will
vigorously defend such application, which is due to be heard on 2
February 2006. Cerro Corona During December 2005 the Environmental
Impact Assessment for the Cerro Corona Project was approved by the
Peruvian Government. Pursuant to this approval, the acquisition was
completed in the middle of January 2006. Completion of this
acquisition means that Gold Fields now owns 92 per cent of the
voting interest (80.72 per cent of the economic interest) for a
consideration of US$40.36 million in Sociedad Minera La Cima, which
owns the Cerro Corona Project and other mineral properties in the
Cajamarca district. The Project involves the development of a 91
million tons gold / copper porphyry deposit at a capital cost of
US$277 million. The project is expected to produce approximately
2.3 million ounces of gold and 412,000 tons of copper over its 15
year life, averaging some 300,000 ounces per year of gold
equivalent. Life of mine total cash costs, on a gold equivalent
basis, are estimated at some US$250 per ounce. Construction of the
Project is expected to commence in February 2006, leading to first
production towards the end of calendar 2007. On site activities
during the quarter were largely focused on infrastructure
development including water wells and the construction camp. Local
community based contractors continue to provide a wide range of
services to the project, most significantly the construction of the
project site perimeter wall. Hatch, the EP contractor continues to
advance the process plant and detailed engineering work, while
Knight Piesold is finalizing the tailings/mine overburden disposal
facility design. Hatch has also placed orders for the crushing and
process plant equipment with long-lead times to assure timely
deliveries of critical path items, while parts of the mining fleet
were shipped from the United States in December. Exploration and
corporate development Gold Fields continued its exploration
programme with drilling on seven projects during the quarter. In
addition, one project was relinquished and an agreement was reached
with North American Palladium (TSE: "PDL") on an option agreement
on the Arctic Platinum Project in northern Finland. At the Essakan
project in Burkina Faso, Gold Fields, together with joint venture
partner Orezone Resources Inc. (TSX: "ORZ"), continues to drill the
Essakan Main Zone ("EMZ") and completed the majority of the
pre-feasibility study during the quarter. While the pre-feasibility
work confirmed that developing a mine in this environment was
viable from an operational, infrastructural and social perspective,
reportable economic evaluations could not be finalised due to the
delay in completion of the final resource model. In September it
was reported that completion of the resource model had been delayed
pending resolution of certain geological and assay quality issues
associated with coarse particulate gold. A number of initiatives
are underway to optimize the economics of the project including
continued drilling to add resources in the EMZ, development
scenarios to reduce capital costs, and alternative assaying
techniques to more accurately measure coarse particulate gold which
may be underestimated by the current methodology. At this stage it
appears that resolution of the latter issue, the most critical in
producing a bankable resource model, may require re-assaying of a
large number of drillhole intersections which is only expected to
be completed in the first quarter of financial 2007. Gold Fields is
managing the ongoing feasibility study while Orezone will manage
the exploration of a number of regional targets around the EMZ.
Field work commenced at the 85 per cent Telikan in Guinea and the
option on the 68 per cent Mansounia projects was relinquished to
the vendor Afminex. The agreement with Glencar Mining plc (AIM:
"GCM") on their 85 per cent Sankarani project in south-western Mali
nears completion with field work scheduled to begin shortly. At the
80 per cent owned Kisenge project in the southern DRC, positive
drilling results were received on the 50 hole, 3,000 meter RC drill
program. These include; 37m @ 2.2 grams per ton, 55m @ 2.31 grams
per ton, 42m @ 2.63 grams per ton, 14m @ 1.69 grams per ton, 10m @
1.49 grams per ton and 20m @ 1.09 grams per ton. Considering that
the programme comprised drilling on wide spaced sections over 3
kilometres of strike, the results are considered to be very
encouraging and will be followed up with additional drilling. At
the Central Victoria project in Australia, drilling was completed
on the 3.2 kilometre mineralized horizon on Gold Fields 100 per
cent-owned Lockington tenement. Aircore and follow-up diamond
drilling was completed during the quarter and continues into the
March quarter. Our joint venture with Geoinformatics Exploration
Inc. (TSX-V: "GXL") in New South Wales continued during the quarter
with prospect ranking and the relinquishment of several tenements.
In China, field work continues on the Fujian JV with partners Zijin
Mining (HKSE: "2899") including geologic mapping and stream
sediment sampling of the Fujian epithermal belt and in the
Heilongjiang province with local state owned partners SMEI.
Comaplex Minerals Corp (TSX: "CMF"), a Canadian company that is
developing the Meliadine West project in the Nunavut Territory in
which Gold Fields owns a 19.8 per cent interest, completed 15,800
metre drilling program. Gold Fields provided technical assistance
to Comaplex during this program. GoldQuest Mining Corporation (TSX
Venture: "GQC") in which Gold Fields has a 9.75 per cent interest
has reported encouraging trench results from its Las Tres Palmas
prospect in Dominican Republic and completed and reported on a
drill program at its Cerro Dorado prospect. During the quarter,
Committee Bay Resources (TSX: "CBR") completed field work on the
Committee Bay project. They have expended approximately $9.0
million toward their $10 million spending requirement before GFI
makes its election to participate in this project or sell its 55
per cent interest for 7.0 million shares in CBR. This decision will
be made during the March quarter. CMQ Resources Inc. (TSX Venture:
"CMQ") in which Gold Fields has a 9.7 per cent interest, has
completed an 8,092 metre drilling project on their Nevada
properties without encountering any meaningful gold grades. In a
joint venture with Peruvian miner Buenaventura (NYSE: "BVN")
surrounding the 80 pe r cent Cerro Corona prospect, drilling
continued during the quarter. Gold Fields is very positive on the
exploration potential of the greater Cerro Corona district and is
looking forward to further developments with BVN in this region.
Implications of adopting IFRS 2, share-based payments IFRS 2,
Share-based payments becomes effective for Gold Fields for the
financial year ending 30 June 2006. In terms of the IFRS, Gold
Fields now recognises the cost of share options (share-based
payments) from 1 July 2005. IFRS 2 requires that all options
granted after 7 November 2002, but not vested by 1 July 2005 be
accounted for. Gold Fields' has adopted an appropriate valuation
model to fair value the employee share options. The value of the
share options has been determined as of the grant date of the
options and has been expensed on a straight line basis over the
vesting period. Based on this model, the following costs for the
financial years ending after 7 November 2002 have been accounted
for as follows: F2003 R5.2 million (US$0.8 million) (against
opening retained earnings) F2004 R32.6 million (US$5.2 million)
(against opening retained earnings) F2005 R52.0 million (US$8.4
million) (restatement of F2005 comparatives) F2006 R31.2 million
(US$4.8 million) (current year - September 2005 and December
quarters only) The corresponding entry for the above adjustments
was shareholders' equity within the share-based payment reserve.
The effect on opening shareholders' equity is nil. The financial
2005 annual net earnings of R180 million (US$29 million) have been
restated to R128 million (US$21 million), the difference being the
share based costs for that year. This cost of R52 million (US$8
million) has been spread equally over the relevant quarters in
financial 2005 (June 2005 quarter: R13 million (US$2 million) and
September 2004 quarter: R13 million (US$2 million)). These costs
are included in other expenses. Earnings per share, headline
earnings, headline earnings per share and diluted earnings per
share have also been restated. Dividend In line with the Company's
policy of paying out 50 per cent of its earnings, subject to
investment opportunities, an interim dividend has been declared
payable to shareholders as follows: -- Interim dividend number 64:
40 SA cents per share -- Last date to trade cum-dividend: Friday,
10 February 2006 -- Sterling & US dollar conversion date:
Monday, 13 February 2006 -- Trading commences ex-dividend: Monday,
13 February 2006 -- Record date: Friday, 17 February 2006 --
Payment date: Monday, 20 February 2006 Share certificates may not
be dematerialised or rematerialised between Monday, 13 February
2006 and Friday, 17 February 2006, both dates inclusive. Restated
total cash costs - Peer comparison In order to compare total cash
costs with our peer reporting gold companies, a schedule is
included below our normal Total cash cost calculation on page 16 to
show the effect of capitalising ore reserve development costs. Off
reef development costs and a portion of direct shaft overheads are
capitalised in this pro-forma calculation. Users of this
calculation should bear in mind that this methodology would, should
it be adopted, result in higher capital expenditure and
amortisation. Outlook In the March quarter gold production at the
South African operations will decrease, mainly at Kloof due to
lower volumes, but this should be offset by an increase at the
international operations. Gold production for the Group in the
March quarter is thus expected to be similar to the current
quarter. Cash costs should therefore also be similar. Basis of
accounting The unaudited results for the quarter and six months
have been prepared on the International Financial Reporting
Standards (IFRS) basis. The detailed financial, operational and
development results for the December 2005 quarter are submitted in
this report. These consolidated quarterly statements are prepared
in accordance with IAS 34, Interim Financial Reporting. The
accounting policies used in the preparation of this report are
consistent with those applied in the previous year-end, except for
the adoption of IFRS 2 - share based payments and the adoption of
the revised international accounting standards forthcoming from the
IAS improvements project and new IFRS issued by the International
Accounting Standards Board. I.D. Cockerill Chief Executive Officer
26 January 2006 Income statement International Financial Reporting
Standards Basis Figures are in millions unless otherwise stated
South African Rand Quarter Six months to Restated Restated December
September December December December 2005 2005 2004 2005 2004
Revenue 3,478.8 3,022.5 2,945.5 6,501.3 5,650.3 Operating costs
2,541.7 2,457.3 2,341.2 4,999.0 4,677.1 Gold inventory change
(20.6) 10.9 (32.5) (9.7) (119.6) Operating profit 957.7 554.3 636.8
1,512.0 1,092.8 Amortisation and depreciation 375.6 353.4 379.1
729.0 749.8 Net operating profit 582.1 200.9 257.7 783.0 343.0
Finance income/ (cost) 17.8 (0.1) 20.4 17.7 52.7 -Net interest
received 16.8 0.8 15.5 17.6 31.8 -Gain/(loss) on foreign debt, net
of cash 1.0 (0.9) 4.9 0.1 20.9 (Loss)/gain on financial instruments
(18.8) (8.8) 146.7 (27.6) 298.4 Other expenses (29.0) (18.8) (36.9)
(47.8) (54.4) Exploration (54.1) (66.2) (39.1) (120.3) (94.0)
Profit before tax and exceptional items 498.0 107.0 348.8 605.0
545.7 Exceptional gain/ (loss) 1.8 2.7 (109.4) 4.5 (109.4) Profit
before taxation 499.8 109.7 239.4 609.5 436.3 Mining and income
taxation 200.2 45.0 134.5 245.2 220.4 - Normal taxation 121.2 74.0
78.4 195.2 141.7 - Deferred taxation 79.0 (29.0) 56.1 50.0 78.7 Net
profit 299.6 64.7 104.9 364.3 215.9 Attributable to: - Ordinary
shareholders 262.0 39.2 67.3 301.2 156.4 - Minority shareholders
37.6 25.5 37.6 63.1 59.5 Exceptional items: Profit on sale of
investments - 1.8 38.9 1.8 38.9 Harmony hostile bid costs - -
(82.9) - (82.9) IAMGold transaction costs - - (64.8) - (64.8) Other
1.8 0.9 (0.6) 2.7 (0.6) Total exceptional items 1.8 2.7 (109.4) 4.5
(109.4) Taxation (0.6) (0.6) (3.8) (1.2) (3.8) Net exceptional
items after tax and minorities 1.2 2.1 (113.2) 3.3 (113.2) Net
earnings 262.0 39.2 67.3 301.2 156.4 Net earnings per share (cents)
53 8 13 61 31 Diluted earnings per share (cents) 53 8 13 61 30
Headline earnings 260.7 36.2 32.2 296.9 121.3 Headline earnings per
share (cents) 53 7 6 60 24 Net earnings excluding gains and losses
on financial instruments and foreign debt, net of cash and
exceptional items 274.7 43.7 87.3 318.4 68.8 Net earnings per share
excluding gains and losses on financial instruments and foreign
debt, net of cash and exceptional items (cents) 56 9 17 65 13 Gold
sold - managed kg 34,381 32,972 34,705 67,353 67,765 Gold price
received R/kg 101,184 91,669 84,872 96,526 83,381 Total cash costs
R/kg 71,659 72,768 64,921 72,202 65,700 Income statement
International Financial Reporting Standards Basis Figures are in
millions unless otherwise stated United States Dollars Quarter Six
months to Restated Restated December September December December
December 2005 2005 2004 2005 2004 Revenue 533.5 463.6 480.2 997.1
905.5 Operating costs 389.8 376.9 382.2 766.7 749.5 Gold inventory
change (3.2) 1.7 (5.5) (1.5) (19.2) Operating profit 146.9 85.0
103.5 231.9 175.2 Amortisation and depreciation 57.6 54.2 61.9
111.8 120.2 Net operating profit 89.3 30.8 41.6 120.1 55.0 Finance
income/ (cost) 2.7 - 3.3 2.7 8.4 - Net interest received 2.6 0.1
2.5 2.7 5.1 - Gain/(loss) on foreign debt, net of cash 0.1 (0.1)
0.8 - 3.3 (Loss)/gain on financial instruments (2.9) (1.3) 23.9
(4.2) 47.8 Other expenses (4.4) (2.9) (5.9) (7.3) (8.8) Exploration
(8.3) (10.2) (6.5) (18.5) (15.1) Profit before tax and exceptional
items 76.4 16.4 56.4 92.8 87.3 Exceptional gain/ (loss) 0.3 0.4
(17.5) 0.7 (17.5) Profit before taxation 76.7 16.8 38.9 93.5 69.8
Mining and income taxation 30.7 6.9 21.7 37.6 35.3 - Normal
taxation 18.6 11.3 12.7 29.9 22.7 - Deferred taxation 12.1 (4.4)
9.0 7.7 12.6 Net profit 46.0 9.9 17.2 55.9 34.5 Attributable to: -
Ordinary shareholders 40.2 6.0 11.1 46.2 25.0 - Minority
shareholders 5.8 3.9 6.1 9.7 9.5 Exceptional items: Profit on sale
of investments - 0.3 6.2 0.3 6.2 Harmony hostile bid costs - -
(13.3) - (13.3) IAMGold transaction costs - - (10.4) - (10.4) Other
0.3 0.1 - 0.4 - Total exceptional items 0.3 0.4 (17.5) 0.7 (17.5)
Taxation (0.1) (0.1) (0.6) (0.2) (0.6) Net exceptional items after
tax and minorities 0.2 0.3 (18.1) 0.5 (18.1) Net earnings 40.2 6.0
11.1 46.2 25.0 Net earnings per share (cents) 8 1 2 9 5 Diluted
earnings per share (cents) 8 1 2 9 5 Headline earnings 39.9 5.6 5.5
45.5 19.4 Headline earnings per share (cents) 8 1 1 9 4 Net
earnings excluding gains and losses on financial instruments and
foreign debt, net of cash and exceptional items 42.1 6.7 14.1 48.8
11.0 Net earnings per share excluding gains and losses on financial
instruments and foreign debt, net of cash and exceptional items
(cents) 9 1 2 10 2 South African rand/ United States dollar
conversion rate 6.53 6.52 6.12 6.52 6.24 South African rand/
Australian dollar conversion rate 4.88 4.96 4.60 4.92 4.55 Gold
sold - managed ozs (000) 1,105 1,060 1,116 2,165 2,179 Gold price
received $/oz 482 437 431 460 416 Total cash costs $/oz 341 347 330
344 327 Balance sheet International Financial Reporting Standards
Basis Figures are in millions otherwise stated South African Rand
United States Dollars Restated Restated December June December June
2005 2005 2005 2005 Property, plant and equipment 16,495.3 16,959.5
2,589.5 2,531.3 Non-current assets 409.7 389.0 64.3 58.1
Investments 1,350.1 992.8 211.9 148.2 Current assets 5,226.2
5,656.1 820.4 844.2 - Other current assets 2,289.0 2,281.1 359.3
340.5 - Cash and deposits 2,937.2 3,375.0 461.1 503.7 Total assets
23,481.3 23,997.4 3,686.1 3,581.8 Shareholders' equity 16,299.2
16,534.1 2,558.7 2,467.8 Deferred taxation 3,249.8 3,249.8 510.2
485.0 Long-term loans 1,020.4 1,176.0 160.2 175.5 Environmental
rehabilitation provisions 894.4 905.8 140.4 135.2 Post-retirement
health care provisions 23.2 24.1 3.6 3.6 Current liabilities
1,994.3 2,107.6 313.0 314.7 - Other current liabilities 1,691.2
1,820.1 265.4 271.8 - Current portion of long-term loans 303.1
287.5 47.6 42.9 Total equity and liabilities 23,481.3 23,997.4
3,686.1 3,581.8 South African rand/ US dollar conversion rate 6.37
6.70 South African rand/ Australian dollar conversion rate 4.36
5.15 Condensed statement of changes in equity International
Financial Reporting Standards Basis Figures are in millions
otherwise stated South African Rand United States Dollars Restated
Restated December December December December 2005 2004 2005 2004
Balance as at the beginning of the financial year 16,534.1 14,949.3
2,467.8 2,372.9 Minority shareholders interest now reflected in
shareholders equity - 662.9 - 105.2 Restated balance at the
beginning of the financial year 16,534.1 15,612.2 2,467.8 2,478.1
Currency translation adjustment and other (607.6) (457.6) 33.1
173.5 Issue of share capital 0.6 0.3 0.1 - Increase of share
premium 5.8 15.0 0.9 2.4 Marked to market valuation of listed
investments and instruments 234.2 (11.2) 35.9 (1.8) Dividends
(196.8) (196.7) (29.4) (29.4) Increase in share based payment
reserve 31.2 26.0 4.9 4.2 Net profit attributable to ordinary
shareholders 301.2 156.4 46.2 25.0 Net profit attributable to
minority shareholders 63.1 59.5 9.7 9.5 (Decrease)/increase in
minorities (66.6) 47.8 (10.5) 14.2 Balance as at the end of
December 16,299.2 15,251.7 2,558.7 2,675.7 Reconciliation of
headline earnings with net earnings Figures are in millions
otherwise stated South African Rand United States Dollars December
September December December September December 2005 2005 2004 2005
2005 2004 Net earnings 262.0 39.2 67.3 40.2 6.0 11.1 Profit on sale
of investments - (1.8) (38.9) - (0.3) (6.4) Taxation effect of
profit on sale of investments - 0.3 4.0 - - 0.8 Asset sales and
other after tax adjustments (1.3) (1.5) (0.2) (0.3) (0.1) -
Headline earnings 260.7 36.2 32.2 39.9 5.6 5.5 Headline earnings
per share - cents 53 7 6 8 1 1 Based on headline earnings as given
above divided by 492,600,779 (September 2005 - 491,515,569 and
December 2004 - 491,907,010) being the weighted average number of
ordinary shares in issue Cash flow statement International
Financial Reporting Standards Basis Figures are in millions unless
otherwise stated South African Rand Quarter Six months to Restated
Restated December September December December December 2005 2005
2004 2005 2004 Cash flow from operating activities 556.5 302.8
233.4 859.3 431.0 Profit before tax and exceptional items 498.0
107.0 348.8 605.0 545.7 Exceptional items 1.8 2.7 (109.4) 4.5
(109.4) Amortisation and depreciation 375.6 353.4 379.1 729.0 749.8
Change in working capital (266.4) (120.4) (162.4) (386.8) (345.3)
Taxation paid (57.1) (77.7) (69.3) (134.8) (120.7) Other non-cash
items 4.6 37.8 (153.4) 42.4 (289.1) Dividends paid - (196.8) -
(196.8) (261.0) Ordinary shareholders - (196.8) - (196.8) (196.7)
Minority shareholders in subsidiaries - - - - (64.3) Cash utilised
in investing activities (429.4) (330.6) (425.4) (760.0) (1,201.3)
Capital expenditure - additions (401.6) (325.2) (527.6) (726.8)
(1,282.3) Capital expenditure - proceeds on disposal 3.6 4.2 37.1
7.8 40.1 Purchase of investments (26.8) (12.1) (20.7) (38.9) (41.5)
Proceeds on the disposal of investments - 8.4 88.4 8.4 90.6
Environmental and post-retirement health care payments (4.6) (5.9)
(2.6) (10.5) (8.2) Cash flow from financing activities 6.4 (206.6)
24.9 (200.2) 69.0 Loans received - - 16.8 - 16.8 Loans repaid -
(140.0) - (140.0) (74.0) Minority shareholder's loan received
(66.6) - - (66.6) 110.9 Shares issued 73.0 (66.6) 8.1 6.4 15.3 Net
cash inflow/ (outflow) 133.5 (431.2) (167.1) (297.7) (962.3)
Translation adjustment 4.1 (144.2) (264.1) (140.1) (194.7) Cash at
beginning of period 2,799.6 3,375.0 3,408.7 3,375.0 4,134.5 Cash at
end of period 2,937.2 2,799.6 2,977.5 2,937.2 2,977.5 United States
Dollars Quarter Six months to Restated Restated December September
December December December 2005 2005 2004 2005 2004 Cash flow from
operating activities 89.8 47.0 40.4 136.8 71.0 Profit before tax
and exceptional items 76.4 16.4 56.4 92.8 87.3 Exceptional items
0.3 0.4 (17.5) 0.7 (17.5) Amortisation and depreciation 57.6 54.2
61.9 111.8 120.2 Change in working capital (40.8) (18.5) (26.5)
(59.3) (55.3) Taxation paid (4.4) (11.3) (8.9) (15.7) (17.5) Other
non-cash items 0.7 5.8 (25.0) 6.5 (46.2) Dividends paid - (29.4) -
(29.4) (39.5) Ordinary shareholders - (29.4) - (29.4) (29.4)
Minority shareholders in subsidiaries - - - - (10.1) Cash utilised
in investing activities (65.8) (50.8) (70.5) (116.6) (192.6)
Capital expenditure - additions (61.6) (49.9) (86.8) (111.5)
(205.5) Capital expenditure - proceeds on disposal 0.6 0.6 5.9 1.2
6.4 Purchase of investments (4.1) (1.9) (3.4) (6.0) (6.7) Proceeds
on the disposal of investments - 1.3 14.2 1.3 14.5 Environmental
and post-retirement health care payments (0.7) (0.9) (0.4) (1.6)
(1.3) Cash flow from financing activities 0.7 (31.7) 4.1 (31.0)
10.7 Loans received - - 2.7 - 2.7 Loans repaid - (21.5) - (21.5)
(11.6) Minority shareholder's loan received (10.5) - - (10.5) 17.1
Shares issued 11.2 (10.2) 1.4 1.0 2.5 Net cash inflow/ (outflow)
24.7 (64.9) (26.0) (40.2) (150.4) Translation adjustment (5.9) 3.5
24.0 (2.4) 16.5 Cash at beginning of period 442.3 503.7 524.4 503.7
656.3 Cash at end of period 461.1 442.3 522.4 461.1 522.4 Hedging /
Derivatives Policy The Group's policy is to remain unhedged to the
gold price. However, hedges are sometimes undertaken on a project
specific basis as follows: -- to protect cash flows at times of
significant expenditure, -- for specific debt servicing
requirements, and -- to safeguard the viability of higher cost
operations. Gold Fields may from time to time establish currency
financial instruments to protect underlying cash flows. Gold Fields
has various currency and interest rate financial instruments -
those remaining are described in the schedule. It has been decided
not to account for these instruments under the hedge accounting
rules of IAS 39 and accordingly the positions have been marked to
market. Position at end of December 2005 On 7 January 2004, Gold
Fields Australia closed out its Australian dollar/United States
dollar currency financial instruments. The existing forward
purchases of Australian dollars and the put and call options were
closed out by entering into equal and opposite transactions. The
close out of the outstanding open position of US$275 million was at
an average spot rate of 0.7670 US$/A$. These transactions locked in
gross profit amounting to US$115.7 million and the underlying cash
receipts were deferred to match the maturity dates of the original
transactions. An amount of US$102.8 million had already been
accounted for up until the end of December 2003. In addition, in
order that the Group was able to participate in further Australian
dollar appreciation, a strip of quarterly maturing Australian
dollar/US dollar call options were purchased in respect of an
amount of US$275 million of which the value dates and amounts match
those of the original structure. The Australian dollar call options
resulted in a premium of US$8.3 million. The payment of the premium
will be effected so as to match the maturity dates of the original
structure. The average strike price of the options is 0.7670
US$/A$. Subsequent to this, on 7 May 2004, the future US dollar
values were fixed in Australian dollars to take advantage of the
weakened Australian dollar against the US dollar at that time. The
original value of the future cash flows was US$107.4 million or
A$140.0 million at 0.7670 US$/A$, the rate at the time of the
original transaction. The value fixed in Australian dollars
amounted to A$147 million, based on the spot rate on 7 May 2004 of
0.7158 US$/A$. The balance of A$64.7 million not yet realised in
cash is detailed below: Payment value dates Future cash flows - A$
million 30 December 2005 13.6 31 March 2006 13.3 30 June 2006 12.9
29 September 2006 12.6 29 December 2006 12.3 TOTAL 64.7 The balance
of the unmatured call options purchased at a total cost of US$8.3
million, are detailed below: US Dollars / Australian Dollars call
options Year ended 30 June 2006 2007 TOTAL Australian dollar call
options: Amount (US dollars) - 000's 50,000 75,000 125,000 Average
strike price - (US$/A$) 0.7670 0.7670 0.7670 The marked to market
value of all transactions making up the positions in the above
table was a positive US$0.9 million. This was based on an exchange
rate of A$/US$ 0.7331. The value was based on the prevailing
interest rates and volatilities at the time. US Dollars / Rand
forward purchases Year ended 30 June 2006 2007 TOTAL Forward
purchases: Amount (US Dollars) - 000's 30,000 - 30,000 Average rate
- (ZAR/US$) 6.5522 - 6.5522 The marked to market value of all
transactions making up the positions in the above table was a
negative R2.7 million (US$0.5 million). The value was based on an
exchange rate of ZAR/US$6.37 and the prevailing interest rates and
volatilities at the time. Rand forward purchases of US$30 million
matured on 1 December 2005 and was extended to mature on 5 June
2006 resulting in a cash outflow of R14.3 million. International
Petroleum Exchange (IPE) Gasoil call options Gold Fields Ghana
purchased a one year Asian style (average monthly price) call
option at the spot price ruling on that day of US$0.42 per litre
(approximately US$500 per metric ton) in respect of 51.6 million
litres of diesel, settled monthly, to protect against adverse
energy price movements. The call option resulted in a premium of
US$1.66 million, paid upfront, at a strike price of US$0.45 per
litre. During the quarter options expired resulting in a cash
inflow of US$0.5 million. The balance of the unexpired options are
given below. Year ended 30 June 2006 2007 TOTAL Forward purchases:
Amount (litres) - 000's 25,800 - 25,800 Strike price - US$/litre
0.45 - 0.45 Conversion factor from US dollar per metric ton to US
dollar cents per litre = 1,185 i.e. US$/litre 0.45 equates to
US$533 per metric ton. The marked to market value of all
transactions making up the position above was a positive US$0.7
million. The value was based on an IPE Gasoil price of US$0.4327
per litre (US$513 per metric ton). The value was based on the
prevailing interest rates and volatilities at the time. FIRST AND
FINAL ADD -- TABULAR MATERIAL -- TO FOLLOW DATASOURCE: Gold Fields
Limited CONTACT: Corporate Secretary: Cain Farrel, +27-11-644-2525,
Fax, +27-11-484-0626, , Gold Fields Limited, Johannesburg,
+27-11-644-2400, Fax, +27-11-484-0626, LONDON: +44-20-7499-3916,
Fax, +44-20-7491-1989, American Depository Receipts Transfer Agent,
Bank of New York, 1-888-269-2377, , Investor Relations, South
Africa: Willie Jacobsz, +27-11-644 2460, Fax, +27-11-484-0639, ,
Nerina Bodasing, +27-11-644-2630, Fax, +27-11-484-0639, , North
America: Cheryl A Martin, +1-303-796-8683, Fax, +1-303-796-8293, ;
TRANSFER SECRETARIES: South Africa, Computershare Investor Services
2004 (Proprietary) Limited, +27-11-370-5000, Fax, +27-11-370-5271,
United Kingdom: Capita Registrars, +44-20-8639-2000, Fax,
+44-20-8658-3430
Copyright