JOHANNESBURG, August 22, 2013 /PRNewswire/ --
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.
Enquiries
Investors
Willie Jacobsz
Tel: +27-11-562-9775
Mobile: +27-82-971-9238
Email: Willie.Jacobsz@goldfields.co.za
Media
Sven Lunsche
Tel: +27-11-562-9763
Mobile: +27-83-260-9279
Email: Sven.Lunsche@goldfields.co.za