Gold Fields Terminates Western Areas Hedge Book
January 25 2007 - 4:58AM
PR Newswire (US)
JOHANNESBURG, January 25 /PRNewswire-FirstCall/ -- Gold Fields
Limited (Gold Fields) (NYSE:GFINYSE:JSE:NYSE:GFINYSE:DIFX:NYSE:GFI)
is pleased to announce that the Western Areas hedge book has been
terminated. The hedge book was terminated at an average spot gold
price of US$622.14/oz and a total cost of US$528 million. Gold
Fields inherited the Western Areas hedge book when it took control
of Western Areas in December 2006. The hedge book had a maturity
profile from December 2006 to December 2014 and consisted of
options, with a delta of 1,005,000 gold ounces, and deferred
premiums. At the end of the last quarter, on 29 December 2006, the
marked to market value of the hedge book was US$383 million, with a
deferred premium of US$ 157 million, for a total of US$540 million.
This compares to the total cost of termination of US$528 referred
to above. Ian Cockerill, Chief Executive Officer of Gold Fields
said: "We terminated the Western Areas hedge book because we
believe in gold. " "The hedge book was significantly under water
and was a crippling liability to the South Deep mine. Now we can
bring the asset to account in a transparent manner." "Gold Fields
is of the view that the price of gold remains firmly in a long-term
upward trend and, with that outlook, it does not make any sense
whatsoever to be hedged." "It also ensures that Gold Fields remains
fully transparent to investors, and that its balance sheet remains
simple to understand." DATASOURCE: Gold Fields Limited CONTACT:
Enquires: South Africa, Willie Jacobsz, Tel: +27-11-644-2460, Fax:
+27-11-484-0639, . Nerina Bodasing, Tel: +27-11-644-2630, Fax:
+27-11-484-0639, . North America: Cheryl A Martin, Tel:
+1-303-796-8683, Fax: +1-303-796-8293,
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