JOHANNESBURG, Aug. 22, 2013 /CNW/ - Gold Fields Limited (Gold
Fields) (JSE, NYSE, NASDAQ Dubai: GFI) today announced that it has
entered into a binding sale and purchase agreement with Barrick
Gold Corporation (Barrick) to acquire its interests in the Granny
Smith, Lawlers and Darlot gold mines (collectively the Yilgarn
South Assets) in Western
Australia, for a consideration of US$300 million, subject to downward working
capital adjustments to a maximum of US$30
million.
Nick Holland, Chief Executive
Officer of Gold Fields, said:
"This is an attractive, opportunistic, and conservatively
financed acquisition which is consistent with Gold Fields' strategy
and focus. We see a clear path to value and, once fully integrated,
these assets are expected to have a positive impact on Gold Fields'
production, free cash flow and global credit rating."
The acquisition provides Gold Fields with:
- an additional 452,000 ounces of annual production, at an All-in
sustaining cost (AISC) of US$1,137
per ounce[1];
- 2.6 million reserve ounces at a cost of about US$115 per ounce[2];
- 1.9 million resource ounces in addition to the reserve ounces;
the total resource ounce acquisition cost is below US$67 per ounce[3].
Upon completion, Australia will
represent Gold Fields' largest regional production centre with 42%
of the Group's production, with Ghana decreasing to 34% and Peru and South
Africa remaining largely unchanged at 13% and 11%
respectively.
Holland added:
"Gold Fields can add value to the Yilgarn South Assets
through the application of its proven low cost, free cash flow
focussed operating model, which has been successful in
repositioning Gold Fields' Australian operations
competitively on the cost curve.
"In particular, we see considerable opportunity for cost
synergies between Lawlers and the adjacent Agnew, one of the lowest
cost producers in Australia. We
plan to immediately consolidate these two operations and
rationalise its processing infrastructure and on-site general &
administrative expenses as well as capital. In addition to
realising the obvious short-term operating synergies between these
assets, we believe the consolidation of the Lawlers/Agnew
operations within the Yilgarn belt will provide significant
long-term benefits allowing for the considerable potential of this
gold district to be maximised under one owner. As such, most of the
consideration valuation is imputed to the Lawlers/Agnew
camp.
"In addition to the underlying modelled value, we expect the
assets to benefit from our proven understanding of and track record
with orogenic systems in the Yilgarn belt and our ability to
discover new ore bodies. We have demonstrated this through the
addition of 7.8 million ounces to St Ives' and Agnew's reserves
over the past 12 years. From a geological perspective, the
acquisition will consolidate ownership within a significant gold
system.
"The acquired assets are located in a preferred jurisdiction
that we know well and where we have significant operational and
management experience and infrastructure to maximise the value of
the acquired assets. This acquisition further repositions Gold
Fields as an international gold producer with a well-balanced
global footprint, which should enhance our risk profile and global
credit rating.
"Our first priority after closing the deal is to determine
the most appropriate way forward for each asset in our endeavour to
maximise cash flow. We expect that it will take between 6 and 12
months to realise the full benefits of the acquisition."
The consideration may be paid fully in cash or, at the election
of Gold Fields, partly in shares issued to Barrick. To the
extent that Gold Fields pays the consideration in cash, it may seek
to use cash on hand in Australia,
cash from existing bank facilities, raise funds through the capital
markets, or a combination thereof.
Completion of the proposed acquisition is subject to certain
customary and regulatory conditions precedent.
Advisors
CIBC World Markets Inc. acted as co-financial advisor to Gold
Fields in connection with the transaction.
JP Morgan acted as co-financial adviser to Gold Fields in
connection with the transaction.
Footnotes
[1] These are Barrick
Gold's published results for the 2012 financial year.
[2] As per Barrick's 2012 40-F filing. Barrick have
used US$1,500 per ounce and an
exchange rate of 1.00 $US/$Aus for
their Yilgarn Reserves. Mineral Reserves are 36.7 Mt at 2.2 g/t for
2.6 Moz. This includes 1.1 Moz in the open pit at Granny Smith,
which was not modelled by Gold Fields. The cost calculation is
based on an acquisition price of US$300
million, excluding any possible downward working capital
adjustments.
[3] Barrick report their Mineral Resources exclusive
of Mineral Reserves. Figures as per Barrick's 2012 Annual Financial
Report and 40-F filing. Mineral Resources are 11.7 Mt at 5.0 g/t
for 1.9 Moz. Taking account of the Barrick reporting protocol, a
view on the Resource and Reserve positions of the Yilgarn assets
equates to a Resource acquisition price of below US$67 per ounce. Gold Fields report their Mineral
Resources inclusive of Mineral Reserves. The resource cost
calculation is based on an acquisition price of US$300 million, excluding any possible downward
working capital adjustments.
Barrick report tonnage as short tons, this release refers to
metric tonnes or Mt (million metric tonnes)
Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
Notes to editors
About Gold Fields
Gold Fields is a significant unhedged producer of gold with
attributable annualised production of approximately 2 million
gold-equivalent ounces from six operating mines in Australia, Ghana, Peru
and South Africa. Gold Fields has
total managed gold-equivalent Mineral Reserves of 64 million ounces
and Mineral Resources of 155 million ounces. Gold Fields is listed
on the JSE Limited (primary listing), the New York Stock Exchange
(NYSE), NASDAQ Dubai Limited, Euronext in Brussels (NYX) and the Swiss Exchange (SWX).
In February 2013, Gold Fields
unbundled its KDC and Beatrix mines in South Africa into an independent and
separately listed company, Sibanye Gold.
This press release is for information purposes only and does
not constitute or form part of an offer to sell or the solicitation
of an offer to buy or subscribe to any securities of Gold Fields.
The securities referred to herein have not been and will not be
registered under the United States Securities Act of 1933 (the
"Securities Act") or with any securities regulatory authority of
any state or other jurisdiction of the
United States and may not be offered, sold, resold,
transferred or delivered, directly or indirectly, in the United States except pursuant to
registration under, or an exemption from the registration
requirements of, the Securities Act. There will be no public
offering of securities in the United
States or any other jurisdiction.
FORWARD-LOOKING STATEMENTS
Certain statements included in this announcement, as well as
oral statements that may be made by Gold Fields, or by officers,
directors or employees acting on its behalf related to the subject
matter hereof, constitute or are based on forward-looking
statements. Forward-looking statements are preceded by, followed by
or include the words "may", "will", "should", "expect", "envisage",
"intend", "plan", "project", "estimate", "anticipate", "believe",
"hope", "can", "is designed to" or similar phrases. These
forward-looking statements involve a number of known and unknown
risks, uncertainties and other factors, many of which are difficult
to predict and generally beyond the control of Gold Fields, that
could cause Gold Fields' actual results and outcomes to be
materially different from historical results or from any future
results expressed or implied by such forward-looking statements.
Such risks, uncertainties and other factors include, among others,
Gold Fields' ability to complete the transaction, Gold Fields'
ability to successfully integrate the acquired assets with its
existing operations, Gold Fields' ability to achieve anticipated
efficiencies and other cost savings in connection with the
transaction, changes in relevant governmental regulations,
particularly environmental, tax, health and safety, regulations and
potential new legislation affecting mining rights, Gold Fields'
future financial position and plans, strategies, objectives,
capital expenditures, and projected costs, the success of
exploration and development activities, as well as projected level
of gold price and other risks. Gold Fields undertakes no obligation
to update publicly or release any revisions to these
forward-looking statements to reflect events or circumstances after
the date of this announcement or to reflect any change in Gold
Fields' expectations with regard thereto. This
press release includes Mineral Reserves and Mineral Resources
information calculated by Barrick as at 31
December 2012 in accordance with National Instrument 43-101
as required by Canadian securities regulatory authorities.
SOURCE Gold Fields Limited