Gold Fields Limited: Q2 F2005 Results - Unaudited Quarter Ended 31
December 2004 JOHANNESBURG, South Africa, Jan. 31
/PRNewswire-FirstCall/ -- Stock data Number of shares in issue - at
end December 2004 492,025,801 - average for the quarter 491,907,010
Free Float 100% ADR Ratio 1:1 Bloomberg/Reuters GFISJ/GFLJ.J JSE
Securities Exchange South Africa-(GFI) Range - Quarter ZAR69.10 -
ZAR94.02 Average Volume - Quarter 1,827,766 shares/day NYSE - (GFI)
Range - Quarter US$12.27 - US$15.24 Average Volume - Quarter
1,765,881 shares/day Gold Fields Limited (NYSE & JSE: GFI)
today announced December 2004 quarter operating profit of R637
million compared with R456 million in the September 2004 quarter
and R545 million for the December quarter of 2003. In US dollar
terms the December 2004 quarter operating profit was US$103 million
compared with US$72 million in the September 2004 quarter and US$80
million for the December quarter of 2003. Net earnings excluding
gains and losses on financial instruments and foreign debt net of
cash and exceptional items was R101 million, significantly up on
the previous quarter: December 2004 quarter salient features: --
Attributable gold production increased 4 per cent to 1,048,000
ounces, with Tarkwa increasing by 34 per cent; -- Costs were again
well controlled, with total cash costs down over 2 per cent to
R64,921 per kilogram (US$330 per ounce); -- Costs at the South
African operations were down 2 per cent to R71,949 per kilogram; --
Operating profit of R637 million (US$103 million) achieved, 40 per
cent higher than last quarter and 86 per cent higher at the South
African operations; -- St Ives and Tarkwa mills were commissioned
during the quarter and work on Arctic Platinum Project in Finland
and Cerro Corona Project in Peru is continuing. SA Rand Salient
features Six months to Dec Dec 2003 2004 Gold produced* 64,779
63,916 kg Total cash costs 67,277 65,700 R/kg Tons milled 23,137
22,866 000 Revenue 85,511 83,381 R/kg Operating costs 203 205 R/ton
Operating profit 1,114 1,093 Rm Operating margin 19 19 % Net
earnings 699 182 Rm 146 37 SA c.p.s. Headline earnings 413 147 Rm
86 30 SA c.p.s. Net earnings 247 95 Rm excluding gains and losses
on financial instruments and foreign debt net of 52 19 SA c.p.s.
cash and exceptional items Salient features Quarter Dec Sept Dec
2003 2004 2004 Gold produced* 32,480 31,317 32,599 kg Total cash
costs 66,991 66,516 64,921 R/kg Tons milled 11,640 11,043 11,823
000 Revenue 84,842 81,815 84,872 R/kg Operating costs 202 212 198
R/ton Operating profit 545 456 637 Rm Operating margin 19 17 22 %
Net earnings 277 102 80 Rm 57 21 16 SA c.p.s. Headline earnings 249
102 45 51 21 9 SA c.p.s. Net earnings 111 (6) 101 Rm excluding
gains and losses on financial instruments and foreign debt net of
23 (1) 20 SA c.p.s. cash and exceptional items Salient features US
Dollars Quarter Dec Sept Dec 2004 2004 2003 Gold produced* (000) oz
1,048 1,007 1,045 Total cash costs $/oz 330 325 308 Tons milled 000
11,823 11,043 11,640 Revenue $/oz 431 400 390 Operating costs $/ton
32 33 30 Operating profit $m 103 72 80 Operating margin % 22 17 19
Net earnings $m 13 16 42 US c.p.s. 3 3 9 Headline earnings $m 8 16
36 US c.p.s. 2 3 7 Net earnings $m 16 (1) 17 excluding gains and
losses on financial instruments and foreign debt net of US c.p.s. 3
- 3 cash and exceptional items Salient features Six months to Dec
Dec 2004 2003 Gold produced* (000) oz 2,055 2,083 Total cash cost
$/oz 327 295 Tons milled 000 22,866 23,137 Revenue $/oz 416 375
Operating costs $/ton 33 29 Operating profit $m 175 157 Operating
margin % 19 19 Net earnings $m 29 98 US c.p.s. 6 21 Headline
earnings $m 24 58 US c.p.s. 5 12 Net earnings $m 15 35 excluding
gains and losses on financial instruments and foreign debt net of
US c.p.s. 3 7 cash and exceptional items *Attributable - All
companies wholly owned except for Ghana (71.1%). Ian Cockerill,
Chief Executive Officer of Gold Fields said: "Despite the
distraction of Harmony's hostile bid Gold Fields again delivered a
solid operational performance, consistent with guidance provided
for the second quarter. As forecast, operating profit for the
December 2004 quarter increased by 40 per cent. This was largely as
a result of the flow-through of benefits from sustainable revenue
enhancement and cost reduction projects implemented specifically at
the South African operations over the past year together with an
excellent performance from Tarkwa. The performance at Tarkwa stems
from the implementation of the two major projects -- owner mining
and the new CIL plant -- which have successfully been brought on
line over the past 2 quarters. Total attributable gold production
increased by 4 per cent, as did the production at the South African
operations. Rand per kilogram unit costs again declined and total
rand per ton costs declined by more than 5 per cent, despite
continuing inflation pressures. The Group margin increased from 17
per cent to more than 20 per cent, while the margin for the South
African operations was restored to double digits. It is
particularly pleasing to note that the South African operations
operating costs for the December 2004 quarter have reduced by more
than 2 per cent when compared with the December 2003 quarter. This
is despite the increase in gold production and a 7 per cent wage
increase in June 2004. Gold Fields is in excellent shape with all
operations delivering to Expectations. Performance for the third
quarter, traditionally a difficult period as it includes the
effects of the Christmas break, is expected to improve yet again."
Commentary Health and Safety During the quarter the fatal injury
frequency rate regressed from 0.13 to 0.16, the lost day injury
frequency rate regressed from 12.5 to 13.2, while the serious
injury frequency rate improved from 6.7 to 6.1. While the
improvement in the serious injury frequency rate is commendable,
the deterioration in the fatal and lost day injury frequency rates
is a source of concern. Management attention is focused on these
metrics. The Du Pont Health and Safety Review report, which focused
on industry best practice at both the South African and
International operations, was submitted to management, and the
recommendations from this report are being reviewed for
implementation by the operations. Beatrix continued its good
performance into the December quarter by achieving one million
fatality free shifts for the whole mine. Kloof also achieved a
million fatality free shifts during this quarter. Financial Review
Quarter ended 31 December 2004 compared with quarter ended 30
September 2004 Revenue Attributable gold production increased by 4
per cent to 1.048 million ounces in the December 2004 quarter as
forecast, from 1.007 million ounces achieved during the September
2004 quarter. The contribution from the South African operations
increased 4 per cent to 726,000 ounces. The international
operations increased 5 per cent to 322,000 ounces. However, while
all the South African operations were similar to forecast, the
international operations exceeded forecast as a result of a higher
than planned increase at Tarkwa due to the early commissioning of
the new mill, partially offset by the lower production from St Ives
due to lower availability of the old mill. The higher US dollar
gold price achieved for the December quarter (US$431 per ounce,
compared with US$400 per ounce in the September quarter) was
partially offset by the strengthening of the rand against the US
dollar, from an average of R6.36 to R6.12 quarter on quarter. As a
result, the rand gold price increased 4 per cent, from R81,815 per
kilogram in the September quarter to R84,872 per kilogram in the
December quarter. The higher production, combined with the higher
rand gold price achieved, resulted in revenue increasing from
R2,705 million (US$425 million) to R2,946 million (US$480 million)
this quarter. Operating costs Operating costs for the December
quarter, at R2,341 million (US$382 million), were virtually
unchanged when compared with the September quarter's R2,336 million
(US$367 million). This was despite an increase in tons processed.
Costs at the South African operations were R1,687 million (US$275
million), which was 1 per cent higher than reported costs in the
previous quarter of R1,664 million (US$262 million) in line with
the increase in tons milled. Underground unit costs remained
constant at R557 per ton. At the international operations, costs
were R654 million (US$107 million), which was 3 per cent lower than
the R672 million (US$106 million) reported in the September
quarter. However, if gold in process adjustments are taken into
account costs were slightly higher, in line with the increased gold
production. The net gold inventory credit to costs for the December
quarter amounted to R33 million (US$6 million) compared with a
credit to costs of R87 million (US$14 million) the previous
quarter. The release of gold in process at Tarkwa and Agnew, was
more than offset by a build up of stockpile at St Ives to feed the
new mill. The release at Tarkwa was due to a release of gold from
the heap leach pads. Operating profit margin The net effect of the
increased revenue and higher costs, after taking account of gold in
process movements, was an operating profit of R637 million (US$103
million). This is 40 per cent higher than the R456 million (US$72
million) achieved in the September quarter. The Group margin
increased to 22 per cent from 17 per cent in the September quarter
and the South African margin increased from 7 per cent to 12 per
cent. The margin at the international operations was 40 per cent
compared to 36 per cent in the previous quarter. Amortisation
Amortisation of R379 million (US$62 million) for the December
quarter is virtually unchanged when compared with the September
quarter's R371 million (US$58 million). Amortisation at the South
African operations increased by R6 million (US$1 million) mainly
due to the increased production at Kloof. At the international
operations amortisation at Tarkwa increased by 52 per cent R 64
million (US $ 10 million) primarily due to the full implementation
of the new mining fleet and the increased volumes. Amortisation at
St Ives decreased 22 per cent to R80 million(US$13 million) due to
the lower mining volumes which peaked last quarter. Other income
Net interest and investment income after taking account of interest
paid was constant at R16 million (US$3 million) for the quarter.
Gains on foreign debt and cash amounted to R5 million (US$1
million). This compares to R16 million (US$3 million) in the
September quarter. Both these amounts were due to exchange gains on
164 million held offshore arising from an international private
placement undertaken in November 2003. These funds are now held in
US dollar, in an offshore account. The gain on financial
instruments of R147 million (US$24 million) compared to a similar
gain of R152 million (US$24 million) in the September quarter and
included a marked to market gain on the Mvela interest rate swap of
R140 million (US$23 million), a loss on the Tarkwa rand/US dollar
forward cover of R23 million (US$4 million) and a R30 million (US$5
million) gain on the Australian dollar/US dollar call options. The
interest rate swap was established in relation to the loan from
Mvela Gold, and converted a fixed interest rate exposure to a
floating rate. This instrument was established as short-term rates
were significantly lower than long-term rates and the resultant
upward sloping yield curve was expected to prevail for some time.
This strategy is yielding positive results as the marked to market
value of the swap at the end of December 2004 was a positive R259
million. Of this, R206 million was accounted for in the income
statement and the balance of R53 million has been hedge accounted
and credited to that portion of the loan that is regarded as debt
for accounting purposes. There has been a positive movement on the
interest rate swap for the year to date of R287 million of which
R147 million was accounted for in the September quarter, leaving a
balance of R140 million which was accounted for in the December
quarter. In addition, the settlement gain on the swap for the
December quarter (i.e. the gain realised during the quarter) was
R23 million. The settlement gain for the year to date amounts to
R54 million. A further settlement gain of R22 million has been
locked in for the three-month period to March 2005. More details on
these financial instruments are given on page 11 of this report.
Exploration expenditure decreased from R55 million (US$9 million)
to R39 million (US$7 million) in the December quarter. This was due
to timing of expenditure which should return to prior levels next
quarter. The exceptional loss this quarter of R109 million (US$18
million) was primarily as a result of costs relating to the failed
IAMGold deal of R65 million (US$10 million), the cost of defending
the Harmony hostile bid of R83 million (US$13 million), which was
partially offset by a profit on the sale of investments of R39
million (US$6 million). Costs for the hostile bid include those
billed to the end of December plus an estimate of costs not yet
billed. For the September quarter there were no exceptional items.
Taxation A taxation charge of R135 million (US$22 million) in the
December quarter compared with R86 million (US$14 million) in the
September quarter. This increase is in line with the higher
operating profits. Earnings After accounting for minority
interests, earnings amounted to R80 million (US$13 million) or 16
SA cents per share (US$0.03 per share), compared with R102 million
(US$16 million) or 21 SA cents per share (US$0.03 per share) in the
previous quarter. The main reason for this decrease was the cost of
the failed IAMGold transaction and the cost relating to the defence
of the Harmony hostile bid, partially offset by the increase in
operating profit. Headline earnings i.e. earnings less the after
tax effect of asset sales, impairments and the sale of investments,
amounted to R45 million (US$8 million) or 9 SA cents per share
(US$0.02 per share) compared with R102 million (US$16 million) or
21 SA cents per share (US$0.03 per share) last quarter. The
difference between net earnings and headline earnings is due to the
after tax profit from the sale of investments amounting to R35
million (US$6 million). Earnings, excluding exceptional items as
well as net gains on financial instruments and foreign debt net of
cash amounted to R101 million (US$16 million) or 20 SA cents per
share (US$0.03 per share) compared with a loss of R6 million (US$1
million) or negative 1 SA cent per share (US$0.00 per
share)reported last quarter. Cash flow Cash flow from operating
activities for the quarter was R233 million (US$40 million),
compared with operating cash flow in the September quarter of R198
million (US$31 million). The increase in cash flow reflects the
higher revenue, offset by an increase in working capital associated
with reduced amounts payable due to the timing of salary payments
as well as payments associated with the St Ives mill. Capital
expenditure amounted to R528 million (US$87 million) compared with
R755 million (US$119 million) in the September quarter. The
decrease is mainly due to the completion of the owner mining
project in Tarkwa and the commissioning of the mills at St Ives and
Tarkwa in December and of October 2004 respectively. Expenditure at
the South African operations was R163 million (US$27 million). A
significant portion of this expenditure was directed at the major
projects with R31 million at 1 tertiary and 5 shaft at Driefontein,
R24 million at Kloof 4 shaft and R34 million at Beatrix 3 shaft.
The Australian operations incurred capital expenditure of R198
million (A$43 million). The mill project at St. Ives accounted for
R60 million (A$13 million) of this expenditure as compared to R186
million (A$41 million) in the September quarter. The remaining
expenditure on this project, which will be spent during the March
quarter, amounts to A$7 million. At Agnew R28 million (A$6 million)
was spent on the Songvang project - refer to the Agnew commentary
for more detail. At the Ghanaian operations, capital expenditure
amounted to R138 million (US$23 million). R78 million (US$13
million) was spent on the new mill and on the project to convert
from contract mining to owner mining at Tarkwa. This compares with
R165 million (US$26 million) in the previous quarter. Major
projects are still forecast to be in line with approved votes.
Proceeds from the sale of assets amounted to R37 million (US$6
million), R20 million (US$3 million) from the sale of tenements in
Australia and the balance of R17 million from the sale of a winder
at Driefontein. Proceeds on the sale of our investment in Zijin
Mining Group Company Limited amounted to R88 million (US$14
million) and a R17 million (US$3 million) loan was received from
our partner (IDC) in the social development project "Living Gold" -
the rose growing project. Net cash outflow for the quarter was R167
million (US$26 million). The cash balance at the end of the
December quarter was R2,978 million (US$522 million) which has
declined from R3,409 million (US$524 million) at the end of
September. Detailed and Operational Review Group overview
Attributable gold production for the December 2004 quarter
increased 4 per cent to 1,048,000 ounces when compared with the
September quarter. Attributable production from the South African
operations at 726,000 ounces accounts for 69 per cent of the
Group's total attributable production. At the South African
operations, there was a 4 per cent increase on the previous
quarter. The increase at Driefontein of 4,200 ounces was due to
increased surface tonnage. At Kloof, the increase of 14,000 ounces
was due to increased underground tonnage at a slightly higher yield
and at Beatrix the increase of 7,500 ounces was due to the improved
underground yield from 4.4 to 4.7 grams per ton. Operating profit
at the South African operations almost doubled from R120 million
(US$19 million) to R224 million (US$36 million), as a consequence
of the increased production at lower unit costs and the higher rand
gold price. Production from the Australian operations decreased 8
per cent to 155,600 ounces mainly due to lower volumes processed at
the old St Ives mill. Operating profit from the Australian
operations decreased quarter on quarter in rand terms from R143
million (A$32 million, US$22 million) to R108 million (A$24
million, US$18 million), primarily as a result of the decreased
production at St Ives and a lower GIP credit. The Ghanaian
operations showed a 21 per cent increase in attributable gold
production to 166,600 ounces due to the commissioning of the new
mill at Tarkwa and increased production from the heaps. Tarkwa
increased gold production by 34 per cent while Damang was
marginally lower as forecast, due to a reduction in the high grade
ore from the main pit. Ghana contributed operating profit of R305
million (US$50 million), 56 per cent up on the previous quarter's
operating profit. This is in line with the increase in gold
production and the 8 per cent increase in the gold price from
US$400 per ounce to US$434 per ounce this quarter. The
international operations contributed R413 million (US$67 million)
or 65 per cent of the total operating profit of R637 million
(US$104 million). This compares with R336 million (US$53 million)
or 74 per cent of the total operating profit of R456 million (US$72
million) last quarter. Group ore processed increased from 11.04
million tons to 11.82 million tons as surface tons increased 9 per
cent. This increase was mainly at Tarkwa and was in line with a
build up of production to provide feed to the new mill. The overall
yield decreased from 3.0 grams per ton in the September quarter to
2.9 grams per ton in the current quarter due to the increase in the
lower yielding surface tonnage. Total cash costs in rand terms
reduced by over 2 per cent from R66,516 per kilogram to R64,921 per
kilogram. In US dollar terms, total cash costs increased 2 per cent
to US$330 per ounce, compared with US$325 per ounce last quarter,
due to the stronger rand. Operating cost per ton at R198 was 7 per
cent below last quarter due to the increase in the surface tons at
Tarkwa at a lower average cost. South African operations During the
September 2003 quarter management took a view that the South
African currency would remain stronger for longer. As a result it
was decided to reposition the South African operations. As
previously reported this was presented as reverting from the
"Wal-Mart" strategy (more volume at lower grade) to the "SAKS 5th
Avenue" strategy (less volume at higher grade). To support this
switch in strategy, management introduced an initiative called
Project 500, which, in turn, was split into two sub-projects
called: Project 100 and Project 400. During December 2004, the
first phase of Project 100 was successfully completed. The project
focused on reducing the consumption of stoping, development and
engineering material via improved benchmarks and standards.
Cumulative benefits against the baseline for the period February
2004 to December 2004 are R100 million. The baseline is the average
monthly unit stores costs over the period May 2003 to October 2003.
Of this R100 million, R30 million was realised in the previous
financial year and the balance of R70 million was realised in the
first six months of F2005. Extrapolating this R70 million saving
for the full 12 months of F2005, a saving of R140 million is
forecast. This is 40 per cent above targeted savings. The costs
have not been normalised for inflation, which based on the basket
of prices for the six month period to December 2004 is 6 per cent.
These savings have significantly contributed to the 1 per cent
reduction in operating costs at the South African operations based
on a comparison of the December 2004 quarter against the
comparative quarter in the prior financial year. These savings have
been achieved notwithstanding the above-inflation wage increases.
Project Beyond was established to ensure that supply chain
management was in line with international best practice at Gold
Fields Shared Services (GFSS). Savings of up to 10 per cent are
targeted on stores spend of around R3 billion per annum. In order
to achieve these savings stores items have been placed into several
blocks. The analysis of block one, which addressed R345 million of
the R3 billion spend, was completed by December 2004, with
contractual savings of R41 million per annum achieved. These cost
savings are expected to be realised over the next 12 months.
Targeting of the second block of identified commodities started in
January 2005 and will address a further R438 million of the R3
billion spend. Based on early estimates the potential annual
savings against contract appears to be in the region of an
additional R43 million. This block is expected to be completed by
March 2005 with actual benefits realised in the next financial
year. The methodologies employed to achieve these savings include:
-- Larger numbers of suppliers included in the bid process; -- The
use of electronic reverse auction technologies; -- Extensive
research into supplier markets; -- Long-term contracts and
partnering arrangements; -- Larger lot sizes. None of these
methodologies impact negatively on suppliers. The approach is based
on partnership, benefit sharing and continuous improvement. Similar
projects for the Australian and Ghanaian operations are in a
planning phase. Other projects include the growth of Black-owned
businesses within the supplier base, which is a key objective of
Gold Fields. In December 2004, 29 per cent of procurement spend was
directed at BEE companies, well in excess of the targets set by
most mining groups in South Africa. Furthermore, currently 70 per
cent of Gold Fields' top ten suppliers are BEE companies. In
addition, Gold Fields has demonstrated its commitment to the use of
local suppliers: 82 per cent of BEE suppliers are located in the
same municipal or provincial area as the Gold Fields operation.
Gold Fields' proficiency in procurement is widely recognized within
the mining industry. During October 2004, GFSS received a Gold
Award for Logistics Excellence from a forum of SA logistics
professional societies. No other mining company has received such
an award. Project 400 aims to optimise revenue such that an
additional R400 million is generated per annum. The aim is to
improve the quality and quantity of our outputs by replacing
surface tonnage to the plant with increased tonnage from
underground and ensuring output of a better quality. This strategy
is delivering results. Underground grades have moved closer to life
of mine averages and where practical surface tonnage at all South
African operations has been replaced by underground tonnage.
Paylimits are also in line with project parameters. Gold Fields
continues to prudently manage its ore reserves and is not high
grading as the table below clearly shows. Dec Mar Jun Sep Dec
Quarter ended 2003 2004 2004 2004 2004 Driefontein: Life of mine
head grade as per the 2003 and 2004 annual report 8.7 8.7 8.7 8.1
8.1 Life of mine head grade adjusted for estimated metallurgical
recoveries 8.4 8.4 8.4 7.8 7.8 Driefontein (underground yields
achieved) 7.5 8.6 8.5 8.1 8.1 Kloof: Life of mine head grade as per
the 2003 and 2004 annual report 9.8 9.8 9.8 10.5 10.5 Life of mine
head grade adjusted for estimated metallurgical recoveries 9.5 9.5
9.5 10.2 10.2 Kloof (underground yields achieved) 8.6 10.0 9.5 9.1
9.2 Beatrix: Life of mine head grade as per the 2003 and 2004
annual report 5.1 5.1 5.1 5.5 5.5 Life of mine head grade adjusted
for estimated metallurgical recoveries 4.9 4.9 4.9 5.3 5.3 Beatrix
(underground yields achieved) 4.7 4.5 4.7 4.4 4.7 Project 400 will
reinstate more respectable margins at current prices and aims to
achieve the following at Driefontein, Kloof and Beatrix:
Driefontein -- Mine in a range of between 1,900 and 2,100
centimetre grams per ton ("cmg/t"). This translates to an estimated
underground recovered yield of above 8.0 grams per ton. -- Maintain
the production profile at + 1 million ounces per annum. Kloof --
Mine in a range of between 2,200 and 2,350 cmg/t. This translates
to an estimated underground recovered yield of above 9.0 grams per
ton. -- Maintain the production profile at + 1 million ounces per
annum. Beatrix -- Mine in a range of between 1,000 and 1,100 cmg/t
at the north and south operations and in a range of between 1,400
and 1,500 cmg/t at number 4 shaft. This translates to an estimated
combined underground recovered yield of 4.8 grams per ton. --
Maintain the production profile of +600 thousand ounces per annum.
R78,000 per kilogram plan As a result of the decrease in the rand
gold price to below R80,000 per kilogram in July 2004 a new mining
plan was drawn up at a gold price of R78,000 per kilogram. Due to
the volatility in the gold price and exchange rates, which saw the
gold price once again below R80,000 per kilogram late in December
2004, this plan continues to be the template for current and future
production in conjunction with project 500. The plan includes
capital reassessment, sourcing higher grade material to replace
surface material, contractor reduction and mine restructuring,
amongst others. General The South African operations have, over the
past 4 years undergone extensive restructuring and renewal to
reposition for the future. On each of our operations, we have
invested significantly in the construction and development of new
long life shafts. At Driefontein, capital has been invested into 5
east and 1 tertiary shafts; at Kloof the new 4 shaft; and at
Beatrix the new 3 shaft. In addition, our metallurgical plants have
been upgraded. Environmental conditions at all shafts have and are
being improved through the ongoing lowering of temperatures, and
infrastructure bottlenecks are being resolved. Over this period
Gold Fields has also invested significantly in the development of
its ore bodies, with all the key long life shafts now having an
average of 20 months of mineable developed ore reserves in place.
All these measures should further improve the profitability and
strengthen the margins across each operation. During January 2005
an additional R24 million of Continuation and Widow Members (CAWMS)
were bought out of the scheme at a premium of 15 per cent to the
actuarial valuation. The residual liability is now only R21 million
compared to an amount in excess of R200 million prior to the
commencement of the buy-back. During the quarter additional shifts
were again worked-in so that stockpiles could be built up to ensure
continuous milling over the Christmas period. Over 100,000 tons of
underground ore were stockpiled at the South African operations and
subsequently processed over the Christmas break. Driefontein
December 2004 September 2004 Gold produced - 000'ozs 287.7 283.5
Yield - underground - g/t 8.1 8.1 - combined - g/t 5.4 5.7 Total
cash costs - R/kg 67,114 67,419 - US$/oz 341 330 Gold production at
Driefontein increased by 2 per cent to 287,700 ounces quarter on
quarter. This improvement was attributable to an increase in
surface tons treated as the number 1 plant mills operate closer to
design capacity. Although underground tons did improve marginally,
the underground mining mix was negatively influenced by an increase
in seismic activity at 5 shaft complex and 1 shaft complex. Ore
milled increased by 103,000 tons or 7 per cent to 1,647,000 tons
when compared with the September quarter. Underground and surface
yields remained constant quarter on quarter at 8.1 and 1.8 grams
per ton respectively. Metallurgical plant modifications at number 1
SAG mill at one plant, scheduled in the December quarter, have been
successfully completed. Modifications to the number 2 SAG mill have
been scheduled for the March quarter and should not present a risk
to the forecast performance. Operating costs increased marginally
to R625 million (US$102 million) from R622 million (US$98 million)
in the September quarter due to the increase in surface tons
processed. Underground rand per ton decreased 3 per cent to R602
per ton, while surface unit costs increased from R58 to R75 per ton
quarter on quarter due to increased screening of material. Total
cash costs reduced to R67,114 per kilogram from R67,419 per
kilogram and in US dollar terms, increased by 3 per cent from
US$330 per ounce to US$341 per ounce. The increase in dollar terms
is in line with a strengthening rand. Operating profit increased
from R99 million (US$16 million) to R135 million (US$22 million) in
the current quarter. The two main contributors were the 4 per cent
increase in the rand gold price and the higher gold production.
Capital expenditure increased from R31 million (US$5 million) in
the previous quarter to R42 million (US$7 million) this quarter.
Gold output and costs for the March quarter are likely to be
similar to that achieved in the December quarter, in spite of the
Christmas break. Seismic activity at 5 shaft complex remains a
concern. Mining sequencing and the on-time delivery of the
refrigeration plant and backfill infrastructure, are expected to
improve productivity levels at the complex. Kloof December 2004
September 2004 Gold produced - 000'ozs 280.6 266.6 Yield -
underground - g/t 9.2 9.1 - combined - g/t 6.8 6.6 Total cash costs
- R/kg 71,628 73,484 - US$/oz 364 359 Gold production at Kloof
increased by 5 per cent to 280,600 ounces in the December quarter,
primarily due to an increase in tons milled. Underground tons
increased 4 per cent to 923,000 tons in the December quarter from
890,000 tons in the September quarter. This replaced surface tons,
which decreased from 369,000 tons to 352,000 tons. The underground
yield increased slightly from 9.1 grams per ton last quarter to 9.2
grams per ton this quarter. The combined yield increased from 6.6
to 6.8 grams per ton. Operating costs at R649 million (US$106
million) for the quarter increased by 2 per cent compared with the
previous quarter's costs of R636 million (US$100 million), mainly
as a result of the increased underground tonnage. Underground cost
per ton declined from R687 to R678. Total cash costs at R71,628 per
kilogram were 3 per cent less than the previous quarter's R73,484
per kilogram. In US dollar terms, total cash costs increased from
US$359 per ounce to US$364 per ounce. Operating profit increased
from R42 million (US$7 million) to R88 million (US$14 million) in
the current quarter. This was due to the higher gold price received
this quarter and the increase in gold output. Capital expenditure
was virtually unchanged at R63 million (US$10 million). The March
outlook for gold production is similar to the December quarter,
despite the Christmas break and the possible closure of number 3
plant, while costs should remain flat due to continued cost
initiatives. If the current rand gold price levels continue number
3 plant, which treats surface rock dump material, may have to cease
operations, as the treatment of this material is uneconomical.
Beatrix December 2004 September 2004 Gold produced - 000'ozs 157.6
150.1 Yield - underground - g/t 4.7 4.4 - combined - g/t 4.5 4.0
Total cash costs - R/kg 81,351 83,912 - US$/oz 413 410 Gold
production at Beatrix increased by 5 per cent from 150,100 ounces
in the September quarter to 157,600 ounces in the December quarter.
Underground ore volumes decreased by 1 per cent from 1,029,000 tons
to 1,016,000 tons mainly due to improved quality mining during the
quarter. The overall yield increased by 13 per cent quarter on
quarter, from 4.0 grams per ton to 4.5 grams per ton. This increase
in yield was partially due to reduced surface tonnages, which
reduced from 147,000 tons in the September quarter to 75,000 tons
in the December quarter as a result of the dicontinued tons being
uneconomical at the current gold price. Surface yields increased
from 0.8 grams per ton to 1.3 grams per ton due to localised dump
grade variations. Underground yields increased by 7 per cent from
4.4 grams per ton in the September quarter to 4.7 grams per ton in
the December quarter. At the Beatrix North and South operations
underground yields increased from an average of 4.2 grams per ton
to 4.5 grams per ton, whilst at 4 shaft the underground yield
increased from 5.6 grams per ton to 5.8 grams per ton. Stoping
volumes at 4 shaft were 8 per cent lower quarter on quarter as a
logistical and remedial work programme was initiated to position
the mine for future volume increases from the new zone 5 area. This
project has made satisfactory progress during the quarter -
repairing rail work, improving ventilation infrastructure and
upgrading tunnel support. It is anticipated that this project will
be completed during the financial year, which will allow 4 shaft
more flexibility to mine in zone 5. The stoping and development
build up at 3 shaft continues in line with forecast. Operating
costs increased from R406 million (US$64 million) to R413 million
(US$67 million) due to restructuring costs incurred during the
quarter. However, total cash costs decreased by 3 per cent to
R81,351 per kilogram (US$413 per ounce) from R83,912 per kilogram
(US$410 per ounce) in the September quarter, as a result of strict
controls on overall costs and the higher gold production. At the
operating level, Beatrix returned to profit (R1 million and
US$nil), as compared with a loss in the September quarter of R20
million (US$3 million). Capital expenditure remained constant at
R58 million (US$10 million). The majority of this expenditure was
spent on development at 3 shaft and the 4 shaft haulage and
infrastructure upgrades. Costs for the March quarter are forecast
at the same level as the December quarter. Gold production will be
slightly lower for the March quarter, as marginal areas at 2 shaft
and surface rock treatment at number 2 plant will be stopped as
they are not making a contribution at the current rand gold price.
The above, together with any loss of production from the Christmas
break will be partially replaced with the planned build up in
production at 4 shaft. It is expected that once crews are
redeployed production should return to production levels
historically achieved of approximately 5,000 kilograms (160,000
ounces) per quarter. International operations Ghana Tarkwa December
2004 September 2004 Gold produced - 000'ozs 167.9 124.8 Yield - g/t
1.1 0.9 Total cash costs - US$/oz 224 248 Tarkwa's December quarter
gold production increased by 43,100 ounces quarter on quarter, to
167,900 ounces. Of this increase, 15,200 ounces came from heap
leach operations and 27,900 ounces from the new CIL plant. The
commissioning of the new CIL plant was completed at the end of
October, approximately two months ahead of schedule. During the
quarter, the plant treated 846,000 tons at an average head grade of
1.45 grams per ton. The head grade continues to trend towards the
target of 1.8 grams per ton. Recovery averaged 97 per cent for
November and December against a design recovery of 96 per cent.
Total gold in process at the mill is estimated at about 10,000
ounces. During the month of December the plant was off-line for ten
days for repairs to the mill discharge hopper and to complete other
structural modifications. Ore stacked on the leach pads was stable
at 4.1 million tons at a grade of 1.21 grams per ton compared with
1.33 grams per ton last quarter. This planned decrease in grade
reflects the diversion of higher grade ores to the mill and lower
grade ores to the heaps. Gold production from the heaps for the
quarter was 140,000 ounces. The increase over the previous quarter
largely reflects a release of gold in process at the heaps of
11,500 ounces. The total tons mined decreased by 2 million tons to
18.7 million tons and the stripping ratio decreased from 3.87 to
2.84. As previously reported the former mining contractor operated
in parallel with the new owner mining fleet for a portion of the
September quarter, accounting for the quarter on quarter decline.
In the September quarter the contractor focussed on waste removal
resulting in the high strip ratio of 3.87, which has now returned
to typical levels of 2.95. The performance of the owner mining
fleet remains within expectation. Mining costs were US$0.69 per ton
for the quarter compared with US$0.83 per ton last quarter,
reflecting the final demobilisation of the mining contractor in the
previous quarter. Operating costs at US$37 million (R230 million),
including gold in process adjustments, were US$6 million higher
than the previous quarter, reflecting the costs of operating the
new mill and a US$0.5 million GIP charge against a US$3.1 million
credit in the previous period. Operating costs per ton treated were
US$7.51 per ton against US$8.36 per ton in the September quarter,
reflecting both the lower strip ratio and the impact of higher
volumes treated. Total cash costs decreased from US$248 per ounce
to US$224 per ounce for the quarter, reflecting the increase in
gold production and the lower strip ratio. The net result was that
operating profit increased from US$19 million (R121 million) in the
previous quarter to US$35 million (R219 million) in the current
quarter. This increase was assisted by the average gold price
received for the quarter, which increased from US$401 per ounce to
US$437 per ounce. Capital expenditure decreased from US$30 million
(R194 million) in the previous quarter to US$20 million (R118
million) in the current quarter as a result of the progress in
closing out the mining fleet acquisition and the reduction in
construction work on the CIL plant. Gold production is expected to
increase by at least a further 10 per cent in the March quarter,
with some two thirds of total production coming from the heaps and
the balance from the mill. With the third lift stacking now
underway at the North and South heaps, gold produced from the heap
leach operation is expected to reduce somewhat in the upcoming
quarter due to anticipated gold in process movements. Total cash
costs are expected to approach US$200 per ounce in the March
quarter as the full benefits of the expansion start to be realised.
Damang December 2004 September 2004 Gold produced - 000'ozs 66.5
69.1 Yield - g/t 1.5 1.6 Total cash costs - US$/oz 226 238 Gold
production for the quarter declined slightly to 66,500 ounces as
forecast, from 69,100 ounces produced during the September quarter.
Mill throughput for the quarter was maintained at 1.35 million tons
at a head grade of 1.67 grams per ton, compared with a head grade
of 1.78 grams per ton in the September quarter. The decrease in the
head grade is a result of lower high grade tons from the Damang
pit, which is reaching the end of the life of its current cutback,
and the plant was supplemented with lower grade stockpile material
feed. Ore tons mined decreased to 796,000 tons from 1,257,000 tons
in the previous quarter, primarily due to expected mining
constraints with the ramp down of the Damang pit together with
unseasonal rainfall. Total tons mined decreased to 1.9 million tons
from 2.7 million tons. The stripping ratio for the quarter
increased from 1.18 to 1.38. Operating costs, including gold in
process adjustments, decreased to US$15 million (R89 million) from
US$16 million (R103 million) quarter on quarter, with operating
costs per ton milled improving to US$10.99 from US$11.36 the
previous quarter. Operating costs also benefited from the recovery
of some 577,000 tons of low grade ore not previously included in
the stockpile inventory. Total cash costs for the quarter reduced
to US$226 per ounce compared with US$238 last quarter. With the
average gold price increasing from US$399 per ounce to US$433 per
ounce, revenue increased from US$28 million (R175 million) to US$29
million (176 million) for the quarter and operating profit
increased from US$11 million (R73 million) to US$14 million (R86
million). Capital expenditure incurred during the quarter amounted
to US$3 million (R19 million). The majority of this expenditure was
on the Damang cutback pre-feasibility and the Damang extension
projects. While mill throughput for the March quarter is projected
to be maintained at 1.35 million tons, gold production is expected
to decline slightly as the mine focuses on treating lower grade
stockpiled ores, while ore mining in the new Amoanda pit and Juno
pits is ramped up, following removal of overburden. Total cash
costs will increase on the back of the lower gold production and a
substantial increase in mining volumes with the operations in
Amoanda and Juno pits. Australia St Ives December 2004 September
2004 Gold produced - 000'ozs 106.6 123.2 Yield - g/t 2.6 2.8 Total
cash costs - A$/oz 463 420 - US$/oz 348 297 Gold production for the
quarter decreased 13 per cent to 106,600 ounces when compared with
123,200 ounces produced in the September quarter. This decrease
reflects a significant reduction in volume through the old St Ives
mill, with tons treated declining from 790,000 tons in the
September quarter to 662,000 tons in the December quarter, while
head grade was stable at 4.7 grams per ton. The drop in volume is
largely due to a 5 day shutdown along with numerous mechanical
breakdowns, reflecting the age of this plant and its ramp down as
the new mill is commissioned. Total mining operations produced 1.18
million tons of ore during the quarter, reflecting a planned
reduction from 1.76 million tons mined in the September quarter.
This reduction reflects the focus on waste movement in the December
quarter in the open pits along with the increased activity in the
September quarter with the need to build ore stock piles ahead of
the commissioning of the new Lefroy mill in December 2004. During
the quarter, open pit mining operations performed well, mining a
total of 8.2 million tons of ore and waste, at an average strip
ratio of 11.5 (September: 7.7 million tons at a strip ratio of
6.4). The underground operations also performed to expectation. A
reduction in ore volumes from Junction, in line with its expected
decline, was partially offset by increased output from the
Leviathan complex. Total cash costs, which include a gold in
process inventory adjustment, increased from A$420 per ounce
(US$297 per ounce) to A$463 per ounce (US$348 per ounce). This
increase reflects primarily the significantly lower volume of gold
produced but is also affected by the cost of the mill shutdown, the
cost of mill commissioning and the increase in strip ratio that is
expensed. Operating profit at St. Ives of A$13 million (R59
million) decreased 41 per cent when compared with the A$22 million
(R98 million) for the September quarter, which reflects the lower
gold production. Capital expenditure for the December quarter
amounted to A$32 million (R148 million) compared with A$73 million
(R330 million) in the September quarter. The majority of this
expenditure was incurred on the mill optimisation project (see St
Ives Expansion Project for more detail) and continuing expenditure
at Mars open pit on stripping, together with development works at
East Repulse and Argo underground mines. With the commissioning of
the new Lefroy mill in December, and ramp up through January,
production for the March quarter is expected to be significantly
higher than the December quarter. Operating costs are expected to
improve through the quarter as the new mill reaches full production
although the benefit will not be that significant during the coming
quarter, as the old mill is likely to be run in parallel with the
new mill for the first half of the March quarter. Total cash costs
will also include significant GIP charges as high cost ounces mined
in previous periods are consumed during the new mill ramp up in the
March quarter. Agnew December 2004 September 2004 Gold produced -
000'ozs 49.0 45.7 Yield - g/t 5.4 5.1 Total cash costs - A$/oz 351
338 - US$/oz 264 239 Gold produced at Agnew increased from 45,700
ounces in the September quarter to 49,000 ounces in the December
quarter, in line with the previous forecast. This was mainly due to
a 2 per cent increase in tons milled to 282,000 tons, together with
a 6 per cent increase in the average feed grade to the mill.
Remnant mining at the Crusader / Deliverer complex was completed in
December, yielding 8,600 ounces, which was 33 per cent more gold
production than the September quarter. In addition, gold production
at the Kim underground mine increased by 10 per cent to 34,800
ounces, as mined volumes increased some 30 per cent to 94,000 tons.
The new Songvang open pit and the low grade stockpiles contributed
a further 5,600 ounces. Total cash costs, which include a small
gold in process inventory adjustment, increased from A$338 per
ounce (US$239 per ounce) in the September quarter to A$351 per
ounce (US$264 per ounce) in the December quarter. This increase was
mainly due to the commencement of the Songvang open pit operation.
Unit operating costs remained under control. Agnew's operating
profit was marginally higher at A$11 million (R49 million),
compared with the A$10 million (R44 million) profit achieved in the
September quarter. This was mainly due to the higher gold price,
which averaged A$571 per ounce compared to A$561 per ounce in the
September quarter. Capital expenditure increased to A$11 million
(R50 million) from A$9 million (R40 million) the previous quarter.
The main areas of expenditure included development at Kim
underground, development of the new Main Lode access,
rehabilitation of the adsorption tanks at the mill and prestrip of
the new Songvang open pit. Gold production for the March quarter is
forecast to be similar to the December quarter. Songvang ore is
expected to replace the loss of Crusader / Deliverer remnant
production plus the low grade stockpile. Cash costs should remain
stable. Quarter ended 31 December 2004 compared with quarter ended
31 December 2003 Attributable gold production at 1,048,000 ounces
in the December 2004 quarter was similar to the 1,045,000 ounces in
the December 2003 quarter. Production at the South African
operations at 726,000 ounces was 4 per cent above the 698,000
ounces produced in the December 2003 quarter. At the international
operations, gold production decreased 7 per cent from 347,000
ounces to 322,000 ounces mainly due to lower recoveries at St Ives.
Revenue increased 1 per cent in rand terms from R2,923 million
(US$431 million) to R2,946 million (US$480 million). This was due
to the increased gold production as the rand gold price achieved
was virtually unchanged at R84,872 per kilogram (US$431 per ounce)
in the December 2004 quarter. Group operating costs in rand terms
decreased marginally from R2,355 million (US$347 million) to R2,341
million (US$382 million). At the South African operations operating
costs were R1,687 million (US$275 million) which is 1 per cent
below the December 2003 quarter's R1,700 million (US$250 million).
This is an excellent performance considering gold production was
higher and taking into account the above average wage increases, as
well as normal inflationary increases seen over the past year.
Costs at the international operations amounted to R654 million
(US$107 million) virtually unchanged year on year. If gold in
process changes are taken into account, as well as the stronger
rand, costs in US dollars terms were also virtually unchanged at
US$101 million. The average rand/US dollar exchange rate
strengthened from R6.76 in the December 2003 quarter to R6.12 in
the current quarter, a 9 per cent change. The average
rand/Australian dollar exchange rate strengthened from R4.80 in the
December 2003 quarter to R4.60 in the current quarter, a 4 per cent
change. In rand terms total operating costs at the international
operations, including GIP charge, thus decreased from R678 million
to R621 million in the December 2004 quarter. Operating profit at
R637 million (US$104 million) for the December 2004 quarter
compares with R545 million (US$80 million) for the December 2003
quarter. The main reason for the increase is a gold in process
credit in the December 2004 quarter associated with St Ives. Profit
before tax amounted to R253 million (US$41 million) compared with
R401 million (US$60 million) in the December 2003 quarter. This
decrease was mainly due to a R72 million (US$17 million) increase
in amortisation and an exceptional profit of R31 million (US$6
million) last year from the sale of investments compared to a loss
of R109 million (US$18 million) in the current quarter due to the
funding of the IAMGold transaction and the cost to defend the
hostile Harmony bid. Earnings decreased from R277 million (US$42
million) in the December 2003 quarter to R80 million (US$13
million) in the December 2004 quarter. Capital and development
projects St Ives expansion project The end of the December quarter
saw the St Ives new mill project well underway in the Commissioning
phase. Construction activity at 99 per cent complete was
effectively finished. The gearless drive motor was commissioned in
November 2004, with load testing being undertaken on 8 December. By
quarter end 20,000 tons of ore had been milled and all parts of the
plant were in full or partial operation. First gold bullion from
the new plant (850 ounces) was produced on 31 December 2004.
Cumulative capital expenditure and commitments as at the end of the
December quarter totalled A$118 million and A$125 million
respectively. The overall project is expected to be completed
within the approved budget of A$125 million. Tarkwa expansion
project CIL process plant Commissioning of the single stage SAG
mill was completed on 6 October 2004, and total plant commissioning
was achieved by the end of October. The CIL plant was officially
opened on 3 November by His Excellency, The President of Ghana.
During the month of November the plant achieved desired
metallurgical specifications. During December, the mill discharge
hopper failed and the plant was off line for ten days for repairs
and to complete other structural upgrade modifications. The current
forecast cost at completion is some US$91 million, excluding US$7
million currency losses. This compares to a budget of US$87
million, which includes an additional US$2 million to link the
north heap leach crusher to the new mill. Conversion to owner
mining This project is now complete except for some minor
infrastructure. The new fleet continues to meet or exceed
efficiency and cost expectations. The project will be completed
within its authorised budget of US$74 million. Cerro Coronain Peru
Activities during the second quarter were focussed on resolution of
the land access and title issues in the project area. In
particular, negotiations with the surrounding communities were
completed in respect of acquisitions of the surface rights to the
project area, following completion of agreements with private land
owners. As part of these settlements, access to the site was
regained in full, and mobilisation of a small man camp and other
equipment for the remaining on-site feasibility work also
commenced. With access restored, we expect to submit the
environmental permit application within the third quarter of F2005.
During the quarter work continued on selection of a contractor to
advance the engineering of the project. With site visits completed
and revised proposals due early in the new year we expected to
appoint a new contractor in early February to advance the project
to feasibility by the end of the fourth quarter of F2005. Arctic
platinum project Activity at APP continued to focus on completing
the feasibility study for the two large open pittable deposits at
Suhanko, namely Konttijarvi and Ahmavaara. The permitting process
continued to advance with public comments received at the end of
November. The company submitted its responses to the public
comments at the end of the quarter. Public meetings were held in
Ranua and Tervola to disseminate information regarding the project.
Negotiations continued with the owners of the freehold in the
mining lease area. An agreement was concluded with the reindeer
herder's association regarding compensation for land use loss, as
well as procedures for management of reindeer on the future mine
site. The methods used and results obtained in determining the
resource estimates for the feasibility study were audited by an
independent expert during the quarter. The audit confirmed that the
methods used are appropriate for the style of mineralisation and
have been properly applied. Infill directional drilling continued
at both Suhanko deposits. Results from this infill drilling will be
used to continually reassess and refine the resource models for the
feasibility study. Drilling has recommenced at Kuohunki in the SK
Reef area. The mid feasibility review referred to in previous
reports, which is reviewing the scope, scale and timing of the
project is under way. It is expected that this will be completed
during the March quarter. Damang expansion project Commencement of
mining the Amoanda deposit is scheduled for January 2005. The
latest reserve model indicates higher stripping ratios with higher
ore grades. The Damang pit cutback resource model was completed in
December 2004. A feasibility study on this development is expected
in the June quarter. Data compilation of the historical Abosso
underground mine, leading to a geological model and resource
estimation and engineering review, continues. Exploration and
corporate development China Activity in China continued with
several properties under review. In Shandong, the Sino Gold - Gold
Fields Shandong Joint Venture completed a ground geophysical survey
on the Heishan JV tenements (70 per cent Sino: GFI JV and 30 per
cent Shandong BGMR) and submitted the agreement to option an
interest in the Sandi JV (80 per cent Sino: GFI JV and 20 per cent
Shandong MMI) to the Federal MOFTEC for final approval. In Fujian,
the 60 per cent Gold Fields and 40 per cent Zijin Mining
Corporation JV Agreement was submitted for approval. Other projects
Gold Fields continued its very active exploration programme with
drilling on ten projects during the quarter. At the Essakan project
in Burkina Faso, Gold Fields, together with joint venture partner
Orezone Resources Inc. continues to drill the Essakan Main Zone as
part of a planned pre-feasibility study expected to be completed
during 2005. Additional drilling was also completed on outlying
targets at Falagountou, Sokadie and Gossey. Work continued during
the quarter at the Mampehia prospect on the 100 per cent Gold
Fields owned Bibiani project in Ghana, towards the definition of an
initial resource estimate. About 5,000 meter reverse circulation
drilling was completed at the 80 per cent owned Kisenge prospect in
the southern DRC. This programme is planned to test bedrock
underlying four anomalies defined by auger drilling during the
September quarter. Auger drilling continues to define other
identified termite anomalies. Drilling at the Tembo project in
Tanzania was completed and Gold Fields will analyse the results
prior to making its decision to exercise its joint venture options
on the project. Drill results were received from the 2,000 meters
programme completed at the Monte Ollestedu project in Sardinia.
Gold Fields is earning a 60 per cent project interest from Bolivar
Gold. These results were anomalous and a ground geophysics
programme was completed as a follow-up. Air core drilling at the
Central Victoria project in Australia has outlined a 3.2 kilometre
gold-in-bedrock anomaly on the Gold Fields 100 per cent owned
Lockington tenement. Work is ongoing on this and adjacent joint
venture projects with Range River Gold and Pacrim Energy. Committee
Bay completed a block model and ID2 (inverse distance square)
resource estimate for Three Bluffs. At a minimum cut-off grade of 1
gram per ton Au, the inferred resource totals 5.1 million tons @
4.0 gram per ton Au (657,000 ounces), including a high grade core
of 1.3 million tons @ 10.2 gram per ton Au (417,000 ounces) using a
cut-off grade of 4.0 gram per ton Au. Gold Fields also completed
the purchase of a 14.4 per cent interest in Comaplex Minerals Corp
(TSX: "CMF"), a Canadian company that is developing the Meliadine
project in the Nunavut province. At the Angelina project in Chile,
joint venture partner Meridian continued drilling the newly
discovered high grade Fortuna vein in the south-east corner of the
property. Meridian is earning up to an 80 per cent interest in the
joint venture. At the El Callao project, a 50:50 joint venture with
Bolivar Gold in Venezuela, RC (reverse circulation) drilling
commenced during November and continued through the Christmas
break. Gold Fields shareholders do not approve IAMGold transaction
On 7 December 2004 the proposed reverse takeover of IAMGold
Corporation did not receive the required majority approval by
shareholders. The proposed transaction will therefore not be
completed. The failure of this transaction in no way impairs Gold
Fields' strategy for growth and internationalisation. Legal A
lawsuit was filed by Zalumzi Singleton Mtwesi against Gold Fields
Limited in the State of New York on 6 May 2003. Mr. Mtwesi alleges,
inter alia, that during the apartheid era, he was subjected to
human rights violations. Mr. Mtwesi filed the lawsuit on behalf of
himself and as representative of all other victims and all other
persons similarly situated. In summary, Mr. Mtwesi and the
plaintiffs' class demand an order certifying the plaintiffs' class
and compensatory damages from Gold Fields Limited. A complaint has
not been served on Gold Fields Limited. If and when service of the
complaint takes place it will be vigorously contested. On July 9,
2004, a lawsuit was filed in a federal district court in New York
by six individuals against Gold Fields and a number of other
defendants including IBM Corporation, Anglo American PLC, UBS AG,
Union Bank of Switzerland, Fluor Corporation, Strategic Minerals
Corporation, the Republic of South Africa and President Thabo
Mbeki. The lawsuit alleges, among other things, that one of the
plaintiffs was a victim of apartheid, including by virtue of acts
committed at facilities in Randfontein, South Africa, allegedly
owned by one or more predecessors of Gold Fields, and that Gold
Fields is liable for various wrongful acts and property
expropriation, as well as violations of international law,
allegedly committed during the apartheid era in South Africa. The
plaintiffs are seeking, on each of two counts, unspecified
compensatory damages, punitive damages and interest and costs and
seeks those penalties against the various defendants jointly and
severally. A complaint has not been served on Gold Fields. If and
when service of the complaint takes place it will be vigorously
contested. 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 62: 30 SA cents per share --
Last date to trade cum-dividend: Friday, 18 February 2005 --
Sterling & US dollar conversion date: Monday, 21 February 2005
-- Trading commences ex-dividend: Monday, 21 February 2005 --
Record date: Friday, 25 February 2005 -- Payment date: Monday, 28
February 2005 Share certificates may not be dematerialised or
rematerialised between Monday, 21 February 2005 and Friday, 25
February 2005, both dates inclusive. Harmony's hostile offer The
Board believes that the Harmony offer does not represent a fair
value for Gold Fields; takes no account of the high quality of Gold
Fields' asset base; does not reflect the benefits that successful
international diversification has brought to Gold Fields'
shareholders; and does not reflect the troubled financial and
operational condition of Harmony, nor the positive operating trend
that Gold Fields is experiencing. Shareholders are advised that the
Board of Gold Fields continues to oppose Harmony's hostile offer
vigorously, as the Board believes: -- The hostile offer grossly
undervalues Gold Fields; consists of only Harmony's over-valued
shares with no cash element; and offers no control premium to Gold
Fields' shareholders; -- Harmony's management model, the so-called
"Harmony Way", is flawed and unsuited for the challenges presented
by Gold Fields' complex, long- life and deep level South African
mining operations; -- Harmony does not have the vision, management
depth, or skills and capabilities to manage a global mining
company, as they have effectively demonstrated through their poor
track record of international expansion over the past decade; --
Harmony's financial position is increasingly troubled, as is
evidenced by its interest costs exceeding the cash flow generated
by its operations. The Gold Fields Board believes that this is
seriously impairing Harmony's balance sheet and will threaten the
viability of any combined entity. At the current rand gold price
nearly half of Harmony's production is making operating losses; --
Despite Harmony's aggressive marketing and reporting practices, its
business model has failed both in South Africa and internationally.
The latest Harmony assertion that CONOPS is the panacea that will
save Harmony, is now being exposed with the breakdown over the
Christmas period of CONOPS at the Free State operations,
potentially resulting in significant lost production; and -- An
independent Gold Fields offers shareholders a solid and transparent
investment vehicle with more exciting growth prospects than the
combination proposed by Harmony. The Board recommends that Gold
Fields' shareholders and ADR holders should continue to reject the
Harmony offer, should not tender their shares or ADRs, and should
continue to reap the benefits of a well managed, performance
focussed, internationally diversified South African champion - Gold
Fields. The directors of Gold Fields accept responsibility for the
information contained in the paragraphs above headed "Harmony's
hostile offer" and state that to the best of their knowledge and
belief (having taken all reasonable care to ensure that such is the
case) the information contained therein is in accordance with the
facts and does not omit anything likely to affect the import of
such information. FIRST ADD -- OUTLOOK AND TABLES -- TO FOLLOW
DATASOURCE: Gold Fields Limited CONTACT: Corporate Secretary, Cain
Farrel, Tel +27-11-644-2525, Fax +27-11-484-0626, e-mail: or
Registered offices, Johannesburg, Gold Fields Limited, Tel:
+27-11-644-2400, Fax: +27-11-484-0626 or London, St James 's
Corporate Services Limited, Tel +44-20-7499-3916, Fax
+44-20-7491-1989 or American Depository Receipts Transfer Agent,
Bank of New York Shareholder Relations, US toll-free tel
+1-888-269-2377, e-mail or Investor relations, South Africa, Willie
Jacobsz, Tel +27-11-644-2460, Fax +27-11-484-0639, e-mail: or
Nerina Bodasing, Tel +27-11-644-2630, Fax +27-11-484-0639, e-mail:
or North America, Cheryl A Martin, Tel +1-303-796-8683, Fax
+1-303-796-8293, e-mail: or Transfer Secretaries, South Africa,
Computershare Investor Services 2004 (Proprietary) Limited, Tel
+27-11-370-5000, Fax +27-11-370-5271 or United Kingdom, Capital
Registrars, Tel +44-20-8639- 2000, Fax +44-20-8658-3430
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