News Release Q4 F2005 and Year F2005 Results JOHANNESBURG, South
Africa, Aug. 4 /PRNewswire-FirstCall/ -- Gold Fields Limited (NYSE
& JSE: GFI) today announced June 2005 quarter headline earnings
of R135 million compared with R9 million in the March 2005 quarter
and R129 million for the June quarter of 2004. In US dollar terms
headline earnings for the June 2005 quarter equated to US$21
million compared with US$2 million in the March 2005 quarter and
US$20 million for the June quarter of 2004. Net earnings excluding
gains and losses on financial instruments and foreign debt net of
cash and exceptional items were R230 million (US$37 million) for
the June 2005 quarter compared to R128 million (US$21 million) in
the March quarter. June 2005 quarter salient features: --
Attributable gold production maintained at 1.08 million ounces; --
Total cash costs R67,773 per kilogram (US$330 per ounce); --
Operating profit up 22 per cent to R656 million (US$103 million),
inclusive of a 35 per cent increase at the South African
operations; -- Mvela interest rate swap closed-out, resulting in a
net cash inflow of R264 million. Year ended June 2005 salient
features: -- Attributable gold production increased 2 per cent to
4.22 million ounces; -- Total cash costs R66,041 per kilogram
(US$331 per ounce), a 2 per cent improvement on the previous year;
-- Harmony hostile bid successfully defended; -- Earnings decreased
from R768 million (US$111 million) to R180 million (US$29 million)
year on year; -- Group cash R3.4 billion, providing a strong
financial platform for growth; -- Offshore organic growth projects
successfully completed and delivering results; -- Samrec/IASA award
for best reporting of Mineral Reserves for the third year in
succession. Final dividend of 40 SA cents per share, giving a total
dividend of 70 SA cents per share for the year. Ian Cockerill,
Chief Executive Officer of Gold Fields said: "Gold Fields has
delivered another solid operating performance for the June quarter
2005. At the South African operations Driefontein and Beatrix
posted good performances with gold production increasing by 2 per
cent and 6 per cent respectively. Kloof had a disappointing quarter
due to lower grades mined. Costs have remained well controlled and
this, together with higher prices achieved, has contributed to a
pleasing 35 per cent improvement in operating profit from the South
African operations. The international operations have had another
excellent quarter increasing production by 4 per cent, as the
benefits of the completed expansion projects were realised. Tarkwa
has increased production by a further 8 per cent quarter on
quarter. The completion of the new mill and the closure of the old
mill at St Ives in the June quarter means that it is now well
positioned to produce at lower costs. Damang and Agnew continue to
deliver on the upside with Agnew increasing production by 23 per
cent and Damang increasing production by 8 per cent. While
financial 2005 has been a particularly challenging one for Gold
Fields given the Harmony hostile bid and the strength of the rand,
I am pleased to note that Gold Fields has remained focused on
delivering against its stated objectives. Group production for the
year has increased by 2 per cent and costs have been well
controlled with an improvement of 2 percent year on year. At the
South Africa operations production was marginally higher at 2.82
million ounces and costs were marginally lower despite wage
increases at the commencement of the year that were above
inflation. Cost performance has been excellent with Project 100
delivering 40 per cent above targeted savings and Project Beyond
delivering R103 million of contractual savings on historic baseline
expenditure in its first year. The latter savings will be realised
in costs in the next financial year. Our offshore organic growth
projects have been well executed on time and on budget and are now
delivering results. The group cash balance remains strong at R3.4
billion, providing us with an excellent platform for future growth.
These results underpin our focus on delivering value to
shareholders. Our growth strategy of adding 1.5 million ounces of
offshore production to our portfolio by 2009 remains unchanged, and
we continue to focus on building a strong internationally
diversified portfolio of high quality, long life assets." Stock
data JSE Securities Exchange South Africa- (GFI) Number of shares
in issue Range - Quarter ZAR58.15 - ZAR77.90 - at end June 2005
492,294,226 Average Volume - Quarter 1,600,339 shares/day - average
for the NYSE - (GFI) quarter 492,294,226 Range - Quarter US$9.40 -
US$11.70 Free Float 100% Average Volume - ADR Ratio 1:1 Quarter
1,522,032 shares/day Bloomberg/Reuters GFISJ / GFLJ.J Salient
Features SA Rand Year ended Quarter June June June March June 2004
2005 2004 2005 2005 Gold produced* kg 129,329 131,284 32,419 33,845
33,523 Total cash costs R/kg 67,075 66,041 66,218 64,957 67,773
Tons milled/treated 000 46,028 47,880 11,076 12,789 12,225 Revenue
R/kg 85,905 84,218 83,731 81,952 88,076 Operating costs R/ton 204
198 213 184 202 Operating profit Rm 2,315 2,286 545 537 656
Operating margin % 20 19 19 18 21 Net earnings Rm 768 180 (186) 11
(14) SA c.p.s. 158 37 (39) 2 (3) Headline earnings Rm 763 291 129 9
135 SA c.p.s. 157 59 26 2 27 Net earnings excluding gains and
losses on Rm 587 452 102 128 230 financial instruments and foreign
debt net of cash and exceptional items SA c.p.s. 121 92 21 26 47 US
Dollars Quarter Year ended June March June June June 2005 2005 2004
2005 2004 Gold produced* (000) oz 1,078 1,088 1,042 4,219 4,158
Total cash costs $/oz 330 340 312 331 302 Tons milled/treated 000
12,225 12,789 11,076 47,880 46,028 Revenue $/oz 429 428 395 422 387
Operating costs $/ton 32 31 32 32 30 Operating profit $m 103 90 83
368 336 Operating margin % 21 18 19 19 20 Net earnings $m (3) 2
(25) 29 111 US c.p.s. - - (5) 6 23 Headline earnings $m 21 2 20 47
111 US c.p.s. 5 - 4 10 23 Net earnings excluding gains and losses
on $m 37 21 16 73 85 financial instruments and foreign debt net of
cash and exceptional items US c.p.s. 8 4 4 15 18 * Attributable -
All companies wholly owned except for Ghana (71.1%). Health and
Safety We regret the 10 fatalities which occurred during the June
quarter. As previously reported, a seismic event at Driefontein 2
shaft claimed five lives on 10 May 2005. The fatal injury frequency
rate regressed as a result of the above from 0.14 to 0.28 for the
June quarter. This quarter has seen an increase in seismic events
at the West Wits operations, Driefontein and Kloof, which has
resulted in an increase in fall of ground accidents. As a result
the lost day injury frequency rate regressed from 12.2 to 14.1, and
the serious injury frequency rate regressed from 5.8 to 7.0 quarter
on quarter. Beatrix North and South achieved 3 million underground
fatality free shifts. Beatrix North shaft recorded 1.9 million,
Driefontein 8 shaft 1.4 million and Kloof 8 shaft 0.9 million
fatality free shifts. The international operations continued their
good safety performance, with all four operations achieving year on
year reductions in lost time injuries. Financial Review Quarter
ended 30 June 2005 compared with quarter ended 31 March 2005
Revenue Attributable gold production decreased by 1 per cent to
1,078,000 ounces in the June 2005 quarter, compared with 1,088,000
ounces achieved in the March 2005 quarter. Production at the South
African operations was 687,000 ounces, which was 3 per cent lower
than the previous quarter. Attributable production at the
international operations increased 4 per cent to 391,000 ounces. At
the South African operations, Driefontein and Beatrix increased
production but this was more than offset by the poor performance of
Kloof, resulting from the lower grades mined during the quarter.
The 4 per cent increase at the international operations was due to
increased output at all the operations except St Ives, which was
lower as the old and new mill operated in parallel for the whole of
the previous quarter, with the old mill decommissioned at the end
of the previous quarter. The US dollar gold price was virtually
unchanged at US$429 per ounce compared with the March quarter.
However, the weakening of the rand against the US dollar, from an
average of R5.95 to R6.39, resulted in the rand gold price
increasing 7 per cent, from R81,952 per kilogram in the March
quarter to R88,076 per kilogram in the June quarter. The decrease
in production was more than offset by the increase in the rand gold
price achieved resulting in revenue increasing from R2,950 million
(US$495 million) to R3,156 million (US$492 million) this quarter.
Operating costs Operating costs for the June quarter, at R2,474
million (US$386 million), increased by 5 per cent when compared
with the March quarter's R2,351 million (US$395 million). Costs at
the South African operations increased by R11 million to R1,660
million (US$258 million), which was less than 1 per cent higher
than operating costs in the previous quarter of R1,649 million
(US$277 million) evidencing continued good cost control. Costs at
the international operations, including gold-in-process changes,
were R840 million (US$132 million), 10 per cent higher than the
R764 million (US$128 million) reported in the March quarter. The
increase in costs at the international operations were mainly at
Tarkwa due to increased costs associated with the owner mining
maintenance contract and increases in the cost of consumables,
together with the effect of translating costs at a weaker rand. The
7 per cent weaker rand compared with the US dollar as detailed
above and the 6 per cent weakening of the rand against the
Australian dollar, from R4.62 to R4.91, resulted in an increase in
costs of R56 million. Operating profit margin The net effect of the
movements in revenue and costs, after taking into account
gold-in-process changes, was an operating profit of R656 million
(US$103 million). This is 22 per cent higher than the R537 million
(US$90 million) achieved in the March quarter. The Group margin
increased from 18 per cent last quarter to 21 per cent in the June
quarter, while the margin at the South African operations increased
from 9 per cent to 12 per cent. The margin at the international
operations increased to 34 per cent compared with 33 per cent in
the previous quarter. Amortisation Amortisation of R391 million
(US$61 million) for the June quarter increased 5 per cent when
compared with the March quarter's R371 million (US$62 million).
This increase arose largely at the Australian operations due to an
increase in mining volumes, and the weakening of the rand against
the US dollar. Amortisation at the South African operations was
constant at R168 million. Other income Net interest and investment
income after taking into account interest paid decreased from R34
million (US$6 million) in the March quarter to R15 million (US$2
million) for the June quarter. This decrease in net interest is due
to gains on the Mvela interest rate swap of R33 million included in
earnings in the previous quarter compared with R23 million included
this quarter, with the balance of R9 million being our 33 per cent
share of losses incurred at Rand Refinery, which is equity
accounted. The gain on financial instruments of R100 million (US$16
million) compares with a loss of R55 million (US$8 million) in the
March quarter and represents largely realised gains on these
instruments. Included in the quarter is a realised gain on the
Mvela interest rate swap of R91 million (US$14 million), a gain on
the Tarkwa rand/US dollar forward cover of R13 million (US$2
million) and a gain on diesel call options in Ghana of R2 million,
partially offset by a R6 million (US$1 million) loss 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 yielded
positive results producing net cash inflows on closure of R264
million (US$41 million) for the quarter and R317 million (US$51
million) of positive cash flow from inception of the swap. More
details on these financial instruments are given on page 15 of this
report. Exploration expenditure Exploration expenditure increased
from R43 million (US$7 million) to R61 million (US$10 million) in
the June quarter - please refer the Exploration and Corporate
Development section for more detail. Exceptional Items The
exceptional loss this quarter of R359 million (US$58 million)
includes the following impairments: -- Beatrix North and South
sections were impaired by R124 million (US$20 million) during the
quarter, with the after tax value amounting to R100 million (US$16
million). The impairment was due to the effect of restructuring at
Beatrix South which is the old 2 shaft section of the mine. The
impairment was based on a calculated net present value, using a
gold price of R92,000 per kilogram at a real discount rate of 5 per
cent before tax and applying a 1.5 times multiple i.e. a one and a
half times multiple of market price to net present value. The
carrying value of the Beatrix North and South sections after the
write-down is R1,967 million; -- At Driefontein an impairment of
R12 million (US$2 million), equal to R7 million (US$1 million)
after taxation due to the closure of 10 shaft; -- At Kloof an
impairment of R11 million (US$2 million), equal to R7 million (US$1
million) after taxation due to the closure of no. 3 metallurgical
plant; -- At St Ives the write-off of the old mill, amounting to
R61 million (A$13 million); and -- At Living Gold (the rose project
at Driefontein) a write down of R52 million (US$8 million), which
had no tax effect. Also included in exceptional items are the final
cost and provisions for defending the Harmony hostile bid of R145
million (US$23 million), bringing the total cost to R316 million
(US$51 million). Added to this is a write-off of critical spares
relating to the old mill at St Ives of R17 million (A$4 million).
The above were partially offset by gains on the sale of exploration
rights in Chile of R47 million (US$8 million) and the profit on the
sale of shares in African Eagle Resources Limited of R10 million
(US$2 million). The exceptional loss in the March quarter of R86
million (US$14 million) was mainly related to costs incurred in
defending the Harmony hostile bid. Taxation A taxation credit of
R57 million (US$9 million) in the March quarter compares with a
credit of R62 million (US$10 million) in the June quarter. The main
reason for the credit this quarter is a deferred tax credit of A$36
million (R167 million) in Australia. This credit was due to a step
up in tax values of assets in Australia resulting from the
consolidation of the Australian operations for tax purposes as from
1 July 2003. Added to this is the tax credit on the Beatrix
impairment, which amounted to R24 million. These were partially
offset by the increase in taxable income due to the increased
profits for the quarter. The credit last quarter was mainly
deferred tax credits of R65 million (US$11 million) at Tarkwa and
R6 million (US$1 million) at Damang as a result of a decrease in
the tax rate in Ghana from 32.5 per cent to 28 per cent. Earnings
After accounting for minority interests, a loss of R14 million
(US$3 million) was incurred or negative 3 SA cents per share
(US$0.00 per share), compared with earnings of R11 million (US$2
million) or 2 SA cents per share (US$0.00 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 R135 million (US$21 million) or 27 SA cents per share (US$0.05
per share) compared with R9 million (US$2 million) or 2 SA cents
per share (US$0.00 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 R230 million
(US$37 million) or 47 SA cents per share (US$0.08 per share)
compared with R128 million (US$21 million) or 26 SA cents per share
(US$0.04 per share) reported last quarter. Cash flow Cash flow from
operating activities for the quarter was R708 million (US$110
million), which was 9 per cent above the operating cash flow in the
March quarter of R653 million (US$106 million). This is due to the
increase in operating profit and the closure of the Mvela interest
rate swap, which resulted in a net inflow of R264 million (US$41
million), offset by the cost of the Harmony defence and the
increase in exploration and sundry costs. No dividends other than
those paid to Ghanaian minorities of R48 million (US$7 million)
were paid during the quarter. Last quarter R147 million (US$25
million) was paid in dividends. Capital expenditure amounted to
R442 million (US$68 million) compared with R440 million (US$75
million) in the March quarter. Expenditure at the South African
operations was R24 million higher at R175 million (US$27 million).
A significant portion of this expenditure was directed at the major
projects, with R36 million at 1 tertiary and 5 shaft at
Driefontein, R10 million at Kloof 4 shaft and R28 million at
Beatrix 3 shaft. The Australian operations incurred capital
expenditure of R122 million (A$24 million) compared with R151
million (A$32 million) in the March quarter. Expenditure at St Ives
included development costs at Argo and Leviathan underground, and
Mars open pit. At Agnew, the majority of the expenditure was spent
on development, exploration and upgrading of the metallurgical
plant. At the Ghanaian operations, capital expenditure amounted to
R117 million (US$18 million) mainly on the new heap leach projects
at the North and South sections. This compares with R77 million
(US$13 million) in the previous quarter. Major projects are still
forecast to be in line with approved votes. Proceeds on disposal of
various Group wide mining assets amounted to R24 million (US$4
million) for the quarter. Purchase of investments amounted to R17
million (US$3 million). R7 million (US$1 million) of this included
equipment financing at St Ives, with the balance being the purchase
of additional shares in African Eagle Resources amounting to R10
million. Subsequently, the majority of our holding (8.5 million
shares) held in African Eagle Resources was sold and proceeds
amounted to R19 million (US$3 million). The balance of the proceeds
on investments sold amounted to R47 million (US$7 million) and
arose from the sale of the Angelina project in Chile. Net cash
inflow for the quarter was R257 million (US$42 million). After
accounting for a positive translation adjustment for the quarter of
R188 million (US$13 million negative) the cash balance at the end
of the June quarter was R3,375 million (US$504 million), which has
increased from R2,931 million (US$474 million) at the end of March
2005. Detailed and Operational Review Group overview Attributable
gold production for the June 2005 quarter decreased marginally to
1,078,000 ounces when compared with the March quarter. Production
from the South African operations at 687,000 ounces accounted for
64 per cent of the Group's total attributable production, compared
with 711,000 ounces or 65 per cent last quarter. At the South
African operations, gold production decreased 3 per cent compared
with the previous quarter. At Kloof, the decrease of 38,900 ounces
was mainly due to a reduction of recovered yield during the
quarter. The decline at Kloof was partially offset by an increase
at Driefontein of 4,400 ounces due to increased underground
volumes, and an increase at Beatrix of 9,700 ounces as a result of
the redeployment of crews to more productive areas, particularly 4
shaft. Operating profit at the South African operations increased
from R166 million (US$28 million) to R224 million (US$35 million),
mainly as a consequence of the higher gold price, allied with
continued good cost control. Production from the Australian
operations was 1 per cent higher quarter on quarter at 208,200
ounces. The increased production from the Songvang open pit at
Agnew together with an excellent performance from Kim underground,
offset the decrease at St Ives, which benefited from running both
the old and new mills last quarter. Operating profit from the
Australian operations increased quarter on quarter in rand terms
from R120 million (A$26 million, US$20 million) to R159 million
(A$33 million, US$25 million), primarily as a result of the
increased production at Agnew. The Ghanaian operations showed an 8
per cent increase in attributable gold production to 183,000
ounces. Tarkwa and Damang both increased gold production by
approximately 8 per cent. At Tarkwa the increase was due to
slightly increased yield and volume, and at Damang the increase was
due to increased feed grade. Ghana contributed operating profit of
R274 million (US$43 million), a 9 per cent increase when compared
with the March quarter. The international operations contributed
R433 million (US$68 million) or 66 per cent of the total operating
profit of R656 million (US$103 million). This compares with R371
million (US$62 million) or 69 per cent of the total operating
profit of R537 million (US$90 million) last quarter. Group ore
processed decreased from 12.79 million tons to 12.23 million tons,
while overall yields increased 4 per cent to 2.9 grams per ton.
Total cash costs in rand terms increased 4 per cent to R67,773 per
kilogram, compared with R64,957 per kilogram in the March quarter.
In US dollar terms, total cash costs decreased 3 per cent to US$330
per ounce, compared with US$340 per ounce last quarter, due to the
weaker rand. Operating cost per ton at R202 was 10 per cent above
last quarter due to the decrease in surface tons across the Group.
At the South African operations surface tons reduced at all the
operations, which are in the process of replacing surface tonnage
with higher grade underground tons. At the international operations
the decrease in surface tons was mainly at St Ives due to the
decommissioning of the old mill. South African operations During
the September 2003 quarter management took the 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 grades more in line with Life of
Mine ore reserve values). To support this switch in strategy in
September 2003, management introduced an initiative called Project
500, which, in turn, was split into two sub-projects called:
Project 400 and Project 100. Project 400 was aimed at optimising
revenue such that an additional R400 million would be generated per
annum on an ongoing basis. This was to be achieved by eliminating
non-contributing production and at the same time reducing low grade
surface outputs with higher margin underground material. This
strategy has proven successful and Beatrix returned a credible
operating profit for the first time this year as surface material
was eliminated completely from the mix. At the South African
operations this strategy has led to an increase in underground
yields year on year from 7.1 to 7.4 grams per ton at similar mining
volumes, while surface tonnage in South Africa has been managed
down to 4.4 million tons, a decrease of over 20 per cent. The life
of mine grades are given in the table below. Quarter ended Jun Sep
Dec Mar Jun 2004 2004 2004 2005 2005 Driefontein: Life of mine head
grade as per the 2003 and 2004 annual report 8.7 8.1 8.1 8.1 8.1
Life of mine head grade adjusted for estimated metallurgical
recoveries 8.4 7.8 7.8 7.8 7.8 Driefontein (underground yields
achieved) 8.5 8.1 8.1 8.9 8.3 Kloof: Life of mine head grade as per
the 2003 and 2004 annual report 9.8 10.5 10.5 10.5 10.5 Life of
mine head grade adjusted for estimated metallurgical recoveries 9.5
10.2 10.2 10.2 10.2 Kloof (underground yields achieved) 9.5 9.1 9.2
9.7 8.3 Beatrix: Life of mine head grade as per the 2003 and 2004
annual report 5.1 5.5 5.5 5.5 5.5 Life of mine head grade adjusted
for estimated metallurgical recoveries 4.9 5.3 5.3 5.3 5.3 Beatrix
(underground yields achieved) 4.7 4.4 4.7 5.2 5.6 Project 100 and
Project 100+ Following the successful completion of Project 100
during December 2004, Gold Fields established a new project,
Project 100+, utilising the capabilities and skills developed
during Project 100. Project 100+ is focused on achieving ongoing
and sustainable cost savings across the South African operations.
It is an evergreen project management structure that maintains a
pipeline of value-adding projects, ensuring their progress from
concept stage to final realisation. At the end of June 2005,
Project 100+ had identified more than fifteen projects with
potential savings of R200 million per annum. Many of the projects
are in the design phase with benefit realisation expected during
the 2006 financial period and beyond. Three projects, which are
expected to deliver annual savings from financial 2006 of R30
million, are complete. Project Beyond, initiated in early 2004, is
a procurement initiative targeting annual savings of between R200
million and R300 million per annum over three years, i.e. around 10
per cent of the amount expended on materials, services and capital
expenditure at the South African operations. During the past
financial year, the project targeted to deliver R100 million in
contractual savings. Three distinct blocks of strategic sourcing
initiatives were completed, focusing on overall procurement
expenditure of almost R900 million, with roughly R200 million of
spend still in progress. The project delivered R103 million of
contract savings (12.3 per cent) on historic baseline expenditure.
Savings were achieved on commodities such as grinding media,
foodstuffs, mill liners, ore transport, roof and timber support,
bearings, engineering repairs, and lubricants. Savings are realised
as new contracts come into force and are being utilised by the
mining operations. As a consequence these savings will largely be
realised in the 2006 financial year. Gold Fields will continue with
procurement savings initiatives in support of its cost leadership
strategy and is targeting a further R75 million to R100 million
savings per annum at the local operations during the 2006 financial
period. Relationships with suppliers have not been compromised as a
consequence of these initiatives. It is noteworthy that, despite
the achievement of major contractual savings in procurement,
expenditure with BEE companies increased to over 28 per cent during
the quarter. Further, Gold Fields benchmarked its BEE procurement
outcomes with those of other South African major mining groups and
confirmed its leading position. The scope of Project Beyond is
being extended to include the Australian and Ghanaian operations,
as well as the Peruvian Cerro Corona project. Preliminary
indications are that savings of more than US$20 million per annum
may be achieved. Driefontein June 2005 March 2005 Gold produced -
000'ozs 297.9 293.5 Yield - underground - g/t 8.3 8.9 - combined -
g/t 5.3 5.2 Total cash costs - R/kg 64,548 64,520 - US$/oz 314 337
Driefontein posted another encouraging set of results, with an
increase in gold production from 293,500 ounces to 297,900 ounces
quarter on quarter. The underground grade reduced from 8.9 grams to
8.3 grams per ton for the quarter as the higher gold price allowed
more mining from some of the marginal areas on the western boundary
of the operations. The combined yield from surface and underground
increased from 5.2 grams per ton in the March quarter to 5.3 grams
per ton due to improved underground volumes and mining mix this
quarter. Underground tonnage increased 7 per cent from 914,000 to
978,000 tons, while surface mineralised waste tonnage reduced from
846,000 tons to 765,000 tons quarter on quarter. The increase in
underground ore tonnage had a 2 per cent impact on operating costs,
which increased from R614 million (US$103 million) in the March
quarter to R625 million (US$97 million) in the June quarter. Total
cash costs remained flat in rand terms at R64,548 per kilogram. In
US dollar terms, total cash costs decreased by 7 per cent from
US$337 per ounce to US$314 per ounce as a result of the weaker
rand. Operating profit increased by 41 per cent from R133 million
(US$22 million) in the March quarter to R188 million (US$30
million) in the June quarter, as a result of the increase in the
rand gold price and the increase in gold output. Capital
expenditure increased to R75 million (US$12 million) for the June
quarter from R37 million (US$6 million) in the March quarter, in
line with our policy to defer capital costs in a low rand gold
price environment as was the case in the March quarter. Gold
forecast for the September quarter is slightly lower than in the
June quarter. This is due to a further reduction in the surface
grade and the last of the gold clean-up from No 1 plant. This could
be further influenced by the outcome of the wage negotiations and
calls from Cosatu for stay-aways. The cost profile for the
September quarter will be affected by the wage increases
implemented as from 1 July 2005. Kloof June 2005 March 2005 Gold
produced - 000'ozs 225.5 264.4 Yield - underground - g/t 8.3 9.7 -
combined - g/t 7.8 6.7 Total cash costs - R/kg 85,445 73,915 -
US$/oz 416 386 Gold production at Kloof decreased 15 per cent from
264,400 ounces in the March quarter to 225,500 ounces in the June
quarter. This was largely due to a 16 per cent decrease in broken
grade attributable to high grade panels lost due to seismicity in
the 3 shaft pillar and the 8 shaft complex. Number 3, 4 and 7
shafts experienced grade drop-offs due to more slope mining during
the quarter and a concomitant reduction in terrace mining. Slope
mining is generally associated with lower grades. The stopping of
low grade surface stockpile operations at number 3 metallurgical
plant resulted in a decrease of 4,800 ounces quarter on quarter.
Despite the public holidays and industrial action underground
tonnage increased from 826,000 tons in the March quarter to 832,000
tons in the June quarter. Unfortunately underground yields declined
from 9.7 to 8.3 grams per ton as a result of the issues previously
mentioned. Surface tonnage decreased significantly due to the
closure of number 3 metallurgical plant. Further surface treatment
will depend on the economics of the low grade surface stockpile.
Despite the increase in underground tons milled for the quarter,
operating costs at R624 million (US$97 million) for the quarter
decreased by 1 per cent compared with the previous quarter's cost
of R634 million (US$107 million). This resulted in an underground
cost of R741 per ton, which was similar to the previous quarter.
However, total cash costs increased by 16 per cent to R85,445 per
kilogram (US$416 per ounce) compared with the previous quarter of
R73,915 per kilogram (US$386 per ounce) in line with the lower gold
production. Operating profit decreased from R41 million (US$7
million) to a loss of R4 million (US$1 million) in the June quarter
due to the decrease in gold production. Capital expenditure
decreased by 21 per cent to R48 million (US$7 million) for the
quarter mainly due to lower expenditure at 4 sub-vertical shaft.
Initiatives implemented to increase the mining grade are showing
positive results and gold production for the September quarter is
forecast to improve before returning to more historic levels in the
December quarter. As a result cash costs should improve but will be
dependent on the outcome of the wage negotiations. Beatrix June
2005 March 2005 Gold produced - 000'ozs 163.2 153.5 Yield -
underground - g/t 5.6 5.2 - combined - g/t 5.6 4.8 Total cash costs
- R/kg 78,010 81,064 - US$/oz 380 424 Gold production at Beatrix
increased by 6 per cent from 153,500 ounces in the March quarter to
163,200 ounces in the June quarter. Underground ore volumes
increased slightly from 897,000 tons in the March quarter to
910,000 tons in the June quarter, mainly due to increased sweepings
during the quarter. The overall yield increased by 17 per cent
quarter on quarter from 4.8 to 5.6 grams per ton. This increase in
yield was due to improved quality mining at 1, 2 and 3 shafts
(North and South sections) and more volume from the higher grade
zone 5 area at 4 shaft (West section). Also, no surface rock dump
material was milled in the June quarter due to the decision to stop
treatment of low grade surface dumps. Increased sweepings volumes
and the introduction of new mining cycles to facilitate dry
sweepings resulted in increased recovery rates. Continued focus on
quality issues such as reduced water usage, stope width control and
increasing sweepings volumes from old gold and backlog areas
continue. The logistics project at West shaft made further progress
during the June quarter with only one level still to be completed.
However, ground control problems are being experienced at 20 level.
Operating costs increased 2 per cent to R411 million (US$64
million) in line with the increase in underground volumes. However,
total cash costs decreased by 4 per cent to R78,010 per kilogram
(US$380 per ounce) from R81,064 per kilogram (US$424 per ounce) in
the March quarter due to the increased production and the continued
strict control on overall costs. The higher rand gold price,
together with the above mentioned factors, resulted in Beatrix
recording an operating profit of R39 million (US$6 million) in the
June quarter, compared with a loss of R8 million (US$1 million)
last quarter. Capital expenditure was virtually unchanged quarter
on quarter at R52 million (US$8 million). The majority of this
expenditure was spent on underground development to increase
flexibility and hydropower at 3 shaft. Gold production for the
September quarter should be lower than the June quarter as haulage
access problems at 20 level, 4 shaft are being encountered.
Smectite swelling has resulted in the closure of the haulage
preventing access to the stoping horizon. The actions that have
been put in place to open up the haulage will restrict mining from
these stoping areas for approximately eight weeks. The threat of
stay-aways and the outcome of wage negotiations could also affect
production levels and costs in the September quarter. International
operations Ghana Tarkwa June 2005 March 2005 Gold produced -
000'ozs 199.1 185.0 Yield - Heap Leach - g/t 1.0 0.9 Yield - CIL
Plant - g/t 1.7 1.6 Total cash costs - US$/oz 240 226 Tarkwa's gold
production increased by 8 per cent from 185,000 ounces in the March
quarter to 199,100 ounces in the June quarter, slightly above
forecast due to out performance from the heap leach plant. The heap
leach operation contributed 135,700 ounces, up 10,000 ounces from
the previous quarter and the CIL plant contributed some 63,400
ounces, an increase of 4,100 ounces on the previous quarter,
reflecting the second full quarter of CIL plant production. A total
of 5.4 million tons of ore was processed during the quarter. The
CIL plant processed 1.2 million tons at a yield of 1.72 grams per
ton, while ore stacked on the leach pads was 4.2 million tons at a
head grade of 1.29 grams per ton, compared with 1.16 grams per ton
in the March quarter. The increase in grade was in line with
expectation; with March's grade being below expectation due to
mining constraints in the higher grade pits. The increase in heap
leach gold production versus the previous quarter reflects the
larger amount of recoverable gold placed on the heaps during the
quarter due to the increase in grade, the slight increase of
154,000 tons placed on the heaps and metallurgical adjustments
undertaken earlier in the year. Gold-in-process release during the
period at 6,000 ounces was similar to the March quarter. The tons
mined increased by 0.75 million tons for the quarter to 21.9
million tons breaking the previous quarter's record, reflecting
ongoing optimisation of the new mining fleet. The stripping ratio
decreased from 3.3 to 3.2 but is still being kept above the planned
2.8 for the year in order to increase mining flexibility. Mining
costs were US$0.81 per ton for the quarter compared with US$0.73
per ton last quarter reflecting the increase in the maintenance
cost of the fleet as stipulated in the MARC (Maintenance and Repair
Contracts) due to the number of hours the units have been
operating, and the increasing cost of consumables such as diesel. A
diesel hedge has been put in place at Tarkwa and Damang to cap the
diesel fuel cost for the next twelve months and provides a cap on
global diesel prices beyond US$0.45/litre, which approximates a
Brent crude oil price of around US$56 per barrel (bbl). A US$10/bbl
increase in global oil prices would result in a US$4 per ounce
increase in total cash costs at the Ghanaian operations. Operating
costs at US$48 million (R306 million), including gold-in-process
adjustments, were US$6 million higher than the previous quarter,
reflecting the increased mining and process volumes, increases in
the price of consumables such as cyanide, diesel, crusher and mill
steel liners and the maintenance costs of the fleet. Operating cost
per ton treated was US$8.73 per ton as against US$7.90 per ton in
the March quarter, reflecting these increased costs. Total cash
costs at US$240 per ounce compare with the March quarter's US$226
per ounce. This level reflects the increase in commodity prices and
the fleet maintenance cost. Operating profit at US$37 million (R239
million) was the same as in the previous quarter, with the
increased gold production offsetting the increase in costs. The
average gold price received was US$428 per ounce, US$2 per ounce
below the previous quarter. Net earnings for the quarter decreased
from US$28 million (R171 million) to US$18 million (R116 million)
as a result of the one- off US$11 million deferred tax release in
the March quarter, which resulted from a reduction in the Ghanaian
company tax rate. The surge in global commodity prices and its
impact on input costs remains a concern at this operation
particularly. The increasing productivity of the new mining fleet
has been key in offsetting many of the increased diesel, tyre and
steel consumable price impacts to date. Initiatives that have been
reported previously continue to be expanded to seek both supply
chain and consumption optimisation. Capital expenditure increased
from US$10 million (R57 million) in the previous quarter to US$16
million (R101 million) in the June quarter. The majority of
expenditure was spent on the construction of heap leach pads at
both the North and South facilities. Gold production and unit costs
for the September quarter are expected to be similar to that of the
June quarter, subject to gold-in-process movements which remain
difficult to predict. Damang June 2005 March 2005 Gold produced -
000'ozs 58.2 53.9 Yield - g/t 1.4 1.3 Total cash costs - US$/oz 340
346 Gold production increased from 53,900 ounces during the March
quarter to 58,200 ounces in the June quarter. This is directly
attributable to the increase in feed grade to the plant from 1.44
grams per ton in the previous quarter to 1.54 grams per ton this
quarter. The increase in grade resulted from the increase in ore
mining in the new pits against treatment of lower grade stockpiles.
Mill throughput for the quarter was steady at 1,262,000 tons
compared with 1,257,000 in the March quarter. Total tons mined
increased from 3.12 million tons to 3.81 million tons as planned,
at a strip ratio of 3.44. Mining operations continued in the
Amoanda and Juno 2SE pits, with ore tonnages mined increasing from
459,000 tons in the previous quarter to 858,000 tons in the June
quarter, at an average grade of 1.63 grams per ton compared with
1.43 grams per ton in March. These pits are the main source of
oxide feed to the plant, although towards the end of the quarter
the Juno 2SE pit was moving into the deeper fresh ore zone. The
permitting process for the Tomento pit has been completed and this
pit will provide an additional source of oxide feed in the new
quarter. Operating costs, including gold-in-process adjustments,
increased to US$20 million (R125 million) from US$18 [L1] million
(R109 million) in the March quarter reflecting higher tonnages
mined, an increase in contract mining costs and haulage costs
associated with the increased distance between the Amoanda pit and
the plant. Cost per ton milled increased from US$13.27 to US$15.52.
Total cash costs reduced slightly to US$340 per ounce. A diesel
hedge has been put in place to cap the diesel fuel cost for the
next twelve months. Operating profit increased marginally to US$5
million (from R27 million to R35 million), the increased revenue
being offset largely by the increase in operating costs. The
average gold price received increased quarter on quarter from
US$425 per ounce to US$431 per ounce. Capital expenditure incurred
during the quarter amounted to US$3 million (R17 million). The
majority of this expenditure was incurred in the raising of the
tailings dam, the resettlement and compensation associated with the
establishment of the Tomento pit, the Damang pit cutback
feasibility study and the Abosso Deeps feasibility study. Gold
production and costs are expected to be similar for the September
quarter. Australia St Ives June 2005 March 2005 Gold produced -
000'ozs 143.1 154.1 Yield - Heap Leach - g/t 0.5 0.6 Yield -
Milling - g/t 3.5 3.4 Total cash costs - A$/oz 450 451 - US$/oz 348
350 Gold production for the quarter was 143,100 ounces, 7 per cent
down from last quarter's 154,100 ounces. This decrease largely
reflects the closure of the old mill before commencement of the
quarter. The Lefroy mill ramped up to full production and achieved
design throughput for the quarter, producing 121,000 ounces, though
a breakdown in the gold elution system at quarter end actually
resulted in a further 7,000 ounces being accumulated in this
system. The contribution from the heap leach operation was similar
to the March quarter at 10,000 ounces. Clean-up around the old mill
accounted for the remaining gold production. Total tons processed
during the quarter amounted to 1.70 million, a decrease of 16 per
cent from the March quarter due to the closure of the old mill.
During the March quarter the old mill and the new Lefroy mill ran
concurrently during the commissioning of the latter. For the
quarter, 1,101,000 tons were processed through the Lefroy mill,
compared with 840,000 tons last quarter. Heap leach operations
treated 597,000 tons of ore, up 7 per cent from last quarter. The
average head grade processed at 2.9 grams per ton was marginally
above the March quarter's 2.7 grams per ton. Yield at the heap
leach operation was 0.5 grams per ton compared with 0.6 grams per
ton last quarter, while the yield at the Lefroy mill at 3.5 grams
per ton was higher than the 2.7 grams per ton in the previous
quarter. The initial stages of commissioning of Lefroy in the March
quarter involved processing of low grade ores. While the Lefroy
mill achieved design capacity during the quarter, operations have
been interrupted and recovery affected by some shortcomings in the
plant piping and materials handling systems. These problems are
typical of a new plant and rectification of these issues was
largely completed during the quarter, with benefits seen towards
the end of the period. Continued emphasis on the gravity and carbon
circuits in the September quarter is expected to result in
additional recovery improvements. Mining operations produced 1.64
million tons of ore during the quarter as planned, an increase of
27 per cent on the previous quarter's 1.29 million tons. Open pit
head grade improved from 1.51 to 1.64 grams per ton quarter on
quarter as planned. Waste movement was reduced and will reduce
somewhat further in the September quarter, as the target ore zones
become exposed, particularly in the Mars open pit. During the
quarter, 4.5 million tons of open pit ore and waste were mined at
an average strip ratio of 3.1 (March quarter: 5.6 million tons at a
strip ratio of 6.1). Overall the underground mining operations
performed to expectation, producing 538,000 tons of ore at 5.6
grams per ton (March 501,000 tons at 5.5 grams per ton). A
reduction in ore volumes from Junction, at which mining was
completed in May, was offset by increased output from Argo and the
Leviathan complex. Leviathan continued to exceed expectations,
while improvements at Argo resulted in its best quarter to date.
Operating costs, including gold-in-process adjustments, decreased
from A$72 million (R331 million) to A$67 million (R327 million),
reflecting the lower volumes milled but also improvements in unit
costs, particularly on the underground mines. Total cash costs at
A$450 per ounce (US$348 per ounce) were unchanged quarter on
quarter and remained considerably beyond our target of below A$400
per ounce. This was primarily due to the milling of high cost
stockpiles (GIP charges contributed A$31 per ounce), some costs
associated with the ramp up of the Lefroy mill and a further A$24
per ounce due to the write-down of stockpile carrying values and
the costs associated with selling the old mill. By quarter end
underlying cost performance of the mining operations were on near
term target. Operating profit at A$13 million (R65 million) in the
June quarter equalled that of the March quarter despite the
decrease in gold production. This was due to the closure of the
high-cost old mill at the end of last quarter, plus an improved
performance from the underground mines, and despite the additional
charges referred to above. Capital expenditure for the June quarter
amounted to A$16 million (R86 million) compared with A$15 million
(R72 million) in the March quarter. This increase was driven by an
increase in development mainly at Leviathan and the final costs for
the Lefroy mill. As a result of a slow start up in July, production
for the September quarter is expected to be slightly lower than the
June quarter. Costs are expected to trend downwards over the
September quarter as the operation reaches steady state. Agnew June
2005 March 2005 Gold produced - 000'ozs 65.1 52.8 Yield - g/t 6.4
5.6 Total cash costs - A$/oz 265 300 - US$/oz 205 233 Gold produced
at Agnew increased from 52,800 ounces in the March quarter to
65,100 ounces in the June quarter, well above forecast. This was
primarily due to a 7 per cent increase in mill throughput to
315,000 tons and an 18 per cent increase in head grade due to an
excellent performance from the Kim underground mine. Underground
mining from the Waroonga underground complex (Kim and Main Lodes)
increased 26 per cent to 122,000 tons of ore resulting in gold
production increasing to 52,000 ounces, against 42,000 ounces in
the March quarter, reflecting ongoing increases in productivity in
the Kim mine and the ramp up of the new Main Zone mine. Limited
stope production at Kim South, referred to in the March report,
indicated its similarity to the main Kim ore body. Open pit mining
at Songvang continued at the planned rate. Although this phase of
mining is predominantly waste stripping, ore production from this
mine now exceeds mill capacity and of the 237,000 tons of ore mined
only 198,000 tons was treated, accounting for 13,000 ounces of the
quarter's gold production. Ore stockpiling is now underway at the
Agnew mill. Operating costs, including gold-in-process adjustments,
increased in line with the increase in production from A$16 million
(R74 million) in the March quarter to A$17 million (R82 million) in
the June quarter. Total cash costs decreased from A$300 per ounce
(US$233 per ounce) in the March quarter to A$265 per ounce (US$205
per ounce) in the June quarter. This decrease was a result of the
increase in gold production, from the increased tons and grade
mined at the Waroonga complex. Agnew's operating profit increased
from A$13 million (R60 million) to A$20 million (R94 million) in
the June quarter, reflecting the increase in mining activity.
Capital expenditure decreased from A$17 million (R80 million) to
A$7 million (R36 million) in the June quarter. This decrease is
predominantly a result of decreased waste stripping at the Songvang
open pit. Gold production for the September quarter is expected to
be lower than the June quarter due to lower grade ore to the mill,
as projection of the Kim out performance is not warranted. This
also reflects a planned decrease in the Waroonga underground ore
grade as stoping commences in the lower-grade Main Lode. Cash costs
are expected to increase with the drop in mill feed grade. Year
ended 30 June 2005 compared with year ended 30 June 2004 Safety
performance Financial 2005 saw an improvement in all safety
statistics when compared with the previous year. The fatal injury
frequency rate (FIFR) improved 33 per cent from 0.27 to 0.18 per
million hours worked, a record for Gold Fields. The days lost
frequency rate improved 8 per cent from 384 to 353 per million
hours worked, while the serious injury and the lost day injury
frequency rates improved 6 and 9 per cent respectively. Beatrix and
the international operations achieved the Canadian benchmark of
0.10 FIFR, with Beatrix North and South achieving more than 3
million fatality free shifts. Financial and operational performance
Attributable gold production increased 2 per cent from 4.16 million
ounces for the year ended June 2004 to 4.22 million ounces produced
in financial 2005. At the South African operations production
increased marginally from 2.80 million ounces to 2.82 million
ounces, mainly due to an increase in underground yields from 7.1 to
7.4 grams per ton. This was as a result of the reduction in
marginal areas and low grade surface material, as we changed from
the high-volume low-grade "Wal-Mart" strategy to the lower-volume
higher-grade "Saks 5th Avenue" strategy. At the international
operations production increased 3 per cent from 1.35 million ounces
to 1.40 million ounces. This was mainly due to the increase
achieved at Tarkwa from the commissioning of the new growth
projects during the year. Revenue decreased marginally in rand
terms (increased 11 per cent in US dollar terms) from R11,773
million (US$1,706 million) to R11,756 million (US$1,893 million).
This was due to a reduction in the rand gold price achieved, from
R85,905 per kilogram (US$387 per ounce) in financial 2004 to
R84,218 per kilogram (US$422 per ounce) in financial 2005.
Operating costs, including gold-in-process movements, increased
from R9,458 million to R9,471 million, a minimal increase
considering the increased production, above inflation wage
increases in South Africa and the significant price increase of
important inputs -- namely fuel, steel and cyanide to mention but a
few. The minimal increase was due to cost saving initiatives and
the impact of translating costs at the international operations
into South African rand at a stronger rand US and Australian dollar
exchange rate than the corresponding year. The rates strengthened
from an average of US$1 = R6.90 to US$1 = R6.21, a 10 per cent
increase and from A$1 = R4.92 to A$1 = R4.66, a 6 per cent increase
year on year. Total cash costs in rand terms, year on year, were
actually down 2 per cent from R67,075 per kilogram (US$302 per
pounce) to R66,041 per kilogram (US$331 per ounce) due to the above
factors. At the South African operations costs were marginally
lower at R6,660 million for the year compared with R6,683 million
the previous year. This was despite above inflation wage increases
and the slightly higher production referred to above, as this was
offset by the cost saving initiatives implemented over the year. At
the international operations unit cash costs increased from US$251
per ounce to US$273 per ounce, mainly due to lower production at
Damang and St Ives. Damang lost high grade ore as the main pit was
depleted while St Ives closed its high grade Junction mine.
Operating profit at R2,286 million (US$368 million), compared with
R2,315 million (US$336 million) in the previous year. Earnings
excluding gains and losses on financial instruments and foreign
debt and exceptional items amounted to R452 million (US$73 million)
this year compared with R587 million (US$85 million) in financial
2004. Net earnings were R180 million (US$29 million) compared with
R768 million (US$111 million) in the previous year. The reduction
in earnings was due to the cost of defending the Harmony hostile
bid and the cost of the failed IAMGold transaction at R316 million
(US$51 million) and R58 million (US$9 million) respectively. Added
to this was the increase in amortisation of R276 million (US$64
million), mainly at Tarkwa due to the commissioning of the new mill
and owner mining projects and due to the impact of a
reclassification of ore reserves from 7 shaft to 4 shaft, at Kloof.
Capital and development projects Damang pit cutback project During
the quarter, the decision was taken to proceed with the large scale
cutback of the Damang pit at the Damang mine in Ghana. This pit had
previously been the source of high grade ores for this mine but the
original pit had reached the end of its life in the March quarter.
The cutback will be undertaken largely on the east and west walls
and initial mining is underway. The cutback will involve the mining
of some 51 million tons of waste and 9 million tons of ore over a 5
year period, delivering some 710,000 ounces of gold to the Damang
mill. The total capital investment will be US$44 million.
Significant ore production from this source will only commence in
the latter part of financial 2007. The execution of this project
will secure a life for this mine through to 2010, creating further
opportunities for unlocking other deposits in the Damang lease
area. Exploration drilling is continuing on this mine with current
focus on the expansion of the Amoanda, Rex and Tomento reserves,
resource drilling at Abosso Deeps along with early stage testing of
various other anomalies on the lease. Cerro Corona in Peru During
the past quarter, the final Environmental Impact Study was
submitted to the Peruvian Ministry of Energy and Mines (MEM) for
review, comment and approval. In addition to this, a voluntary
round of public information workshops were held in the project's
area of influence to keep the local populace up to date on the
project status and site activities. Local support for the project
remains very strong in spite of the difficulties the mining
industry is experiencing in Peru at this time. During the September
quarter, a third round of official workshops will be held in six
communities with the assistance of MEM. The public hearing for the
project, which will be directed by MEM is to be held in the nearby
community of Hualgayoc and permit approval is still expected in
late October 2005. Site work during the period was largely focused
on geotechnical activities in support of the ongoing design
engineering work being developed by Hatch, the EPC contractor.
Additionally, a number of monitoring wells and a primary pumping
well for future pit dewatering were largely completed. The detailed
engineering design work for the plant and tailings facility are on
schedule with 40 per cent of the drawings and the generation of a
+/-10 per cent capital and operating cost estimate due in the
September quarter. As a result of these two timelines a project
decision is expected in the last quarter of the calendar year.
Arctic platinum project At the end of the March quarter we
announced that the feasibility study had been completed and it had
been determined that we would not be proceeding with the
development of the large scale Suhanko Project, which was the basis
of the feasibility study. Accordingly, staff numbers were reduced
during the quarter to a bare minimum to reduce holding costs.
Discussions are continuing with a number of companies that have
expressed an interest in participating in the development of this
project. Exploration and corporate development Gold Fields
continued its exploration programme with drilling on five projects
during the quarter. 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 as part of a
planned pre-feasibility study expected to be completed during
calendar 2005. The project continues to deliver results suggesting
potential resource upgrades. On the 100 per cent owned Bibiani
project in Ghana, an agreement in principle has been reached with
Newmont for sale of the asset subject to Ghanaian government
approval. At the 100 per cent Telikan project in Guinea, field work
consisting of geochemical sampling and geologic mapping is ongoing.
At the 80 per cent owned Kisenge project in the southern DRC,
mechanised auger sampling of the extensive termite geochemical
anomalies continues. A formal process of marketing the prospect to
a potential partner has begun. Initial core drilling at the Central
Victoria project in Australia has confirmed a mineralised horizon
in two holes within a 3.2 kilometre gold-in- bedrock anomaly on
Gold Fields 100 per cent owned Lockington tenement. Follow- up work
on this target will take place during the first quarter of the new
fiscal year. In China, initial core drilling was completed on the
Heishan joint venture (JV) in Shandong province, part of the
Shandong JV with Sino Gold. Field work continues on the Fujian JV
with partners Zijin Mining (HKSE: "2899"). Our 8.4 per cent equity
holding in Sino Gold (ASX: "SGX") continues to deliver interesting
results with the granting of their mining licence at Jinfeng and
interesting drill results at their White Mountain prospect.
Comaplex Minerals Corp (TSX: "CMF"), a Canadian company that is
developing the Meliadine project in the Nunavut province in which
Gold Fields owns a 19.8 per cent interest, has begun drilling
during the summer season. Gold Fields is providing technical
assistance to Comaplex during this program. GoldQuest Mining
Corporation (TSX Venture: "GQC") in which Gold Fields has a 9.2 per
cent interest has reported encouraging drill results from its Cerro
Dorado prospect in Dominican Republic. During the quarter, Gold
Fields and 4.5 per cent owned Committee Bay Resources (TSX: "CBR")
reached a letter agreement whereby CBR would spend the next C$10
million in exploration on the Committee Bay JV after which Gold
Fields would have an option to spend the next C$15 million, thereby
retaining its 55 per cent interest, or sell its interest for 7
million shares in CBR. Drilling has commenced on the project with
encouraging results reported by CBR at the Raven prospect. Drilling
has also commenced in Nevada on property controlled by CMQ
Resources Inc. (TSX Venture: "CMQ") in which Gold Fields has a 9.7
per cent interest. Corporate Norilsk Nickel joins Gold Fields board
Following an invitation from Gold Fields to Norilsk Nickel to
nominate two members to the Gold Fields board, Mr. Sergei
Stefanovich and Dr. Artem Grigorian were officially appointed as
non-executive directors of Gold Fields Limited on 21 June 2005.
Norilsk Nickel is Gold Fields' largest shareholder with an interest
of 20 per cent in the company. Harmony hostile offer defeated On 20
May 2005 the High Court of South Africa (Witwatersrand Local
Division) handed down a judgement, the effect of which is that: --
Harmony's offer lapsed on 18 December 2004; -- Gold Fields has not,
subsequent to 18 December 2004, been subject to the provisions of
the Securities Regulation Panel Code or any Code Rules affecting a
target company or an offeree company; -- the Harmony offer was not
capable in law of being revised or reinstated after it lapsed on 18
December 2004 and is not capable in law of being revised or
reinstated at the current time; and -- Harmony is precluded from
making any further offer for the shares of Gold Fields for a period
of 12 months from 18 December 2004. Reflecting on the seven-month
hostile bid, Gold Fields Chief Executive Ian Cockerill said: "It
has been a long, drawn-out and costly process, but here at Gold
Fields we have already put it firmly behind us. We are looking
ahead and focusing entirely on our Company's operations and our
future. We did not want this hostile bid, but during the offer
period, I believe we proved beyond doubt that Gold Fields is a
strong and competitive gold player, with the assets, the people,
the strength and the strategy to deliver superior value for our
shareholders. Now our sole aim is to concentrate on further
improving our performance and on growth." Of the 11.5 per cent of
the Gold Fields shares acquired by Harmony, approximately 30
million or 6 per cent were sold to institutions during the second
week in June. Legal A purported class action lawsuit was filed
against Gold Fields Limited in the New York State Supreme Court on
6 May 2003. On 9 July 2004, a separate lawsuit was filed in the New
York federal district court by six individuals against Gold Fields
and a number of other defendants. These lawsuits allege purported
human rights violations and other wrongful acts among other
allegations. Plaintiffs in either action have not effected service
of the complaints within the normal prescribed periods. However, in
the event the complaints are served, Gold Fields will vigorously
defend itself and anticipates moving to dismiss the claims on
numerous grounds. Social Responsible Investment Index In the second
round of the JSE Social Responsibility Investment Index, Gold
Fields has been ranked in the top 20 per cent of high impact
companies. Ranking is based on positive social and economic
investment, corporate governance and environmental performance.
High impact companies include those with the most potential to
cause damage to the environment and include 22 companies, the
majority of which are mining companies. Gold Fields corporate
citizenship initiatives include: -- An extensive corporate social
investment programme benefiting many communities in far-flung and
remote rural parts of Southern Africa; -- An innovative venture
capital programme aimed at establishing new businesses in mining
communities, which can grow into industries to eventually replace
mining as the main source of economic activity in these
communities. The Living Gold cut rose facility in Merafong, which
has more than 300 employees, is an example of such a non-mining
alternative livelihood project; -- Gold Fields has been a leader in
the field of HIV/Aids in South Africa with a comprehensive
programme encompassing all facets of prevention and treatment. An
estimated 1,600 employees are enrolled in the Company's HIV/Aids
Wellness programme; and -- Gold Fields has over the past two
decades been a pioneer in the support and promotion of
environmental education throughout Southern Africa and has been
instrumental in establishing more than 20 environmental education
facilities and programmes throughout the SADC region. One such
example is the Gold Fields Participatory Course in Environmental
Education run by the Gold Fields Environmental Education and
Sustainability Unit at Rhodes University, which has been attended
by thousands of students over the past ten years. Awards ISO 14000,
achieved at all the South African operations three years ago came
up for review during the quarter. All the South African operations
once again achieved the upgraded ISO 14001 : 2004 certificate. The
international operations come up for review next year. Gold Fields
was among the most honoured companies at the recent annual awards
in Johannesburg hosted by the Investment Analysts Society of
Southern Africa (IASA). Gold Fields picked up Squirrel awards for
"best reporting and communication" in the resources, diamonds,
precious metals and minerals category for the 2004 calendar year.
The group also received the Samrec/IASA award for the best
reporting of mineral reserves according to the Samrec code. This is
the third year in succession that Gold Fields has received both
awards. Dividend The company's policy is to pay out 50 per cent of
its earnings, subject to investment opportunities and after
excluding impairments. Earnings are adjusted to exclude unrealised
gains and losses on financial instruments and foreign debt, but are
adjusted to include cash payments and receipts in relation to such
underlying financial instruments. A final dividend has been
declared payable to all shareholders as follows: -- final dividend
number 63: 40 SA cents per share -- last date to trade
cum-dividend: Friday 19 August 2005 -- sterling and US dollar
conversion date: Monday 22 August 2005 -- trading commences
ex-dividend: Monday 22 August 2005 -- record date: Friday 26 August
2005 -- payment date: Monday 29 August 2005 Share certificates may
not be dematerialised or rematerialised between Monday, 22 August
2005 and Friday, 26 August 2005, both dates inclusive. Outlook for
September 2005 quarter Gold production for the September quarter is
forecast to be slightly lower than the June quarter and could also
be impacted by industrial action at the South African operations.
Operating costs should increase due to the wage increases effective
from 1 July at the South African operations. Added to this is the
effect of converting the US dollar based operations in Ghana at a
weaker rand. Basis of accounting The unaudited quarter and year-end
results have been prepared on the International Financial Reporting
Standards (IFRS) basis. The detailed financial, operational and
development results for the June 2005 quarter and financial 2005
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 at the
previous year-end. Audit review The year-end results have been
reviewed in terms of Rule 3.23 of the listing requirements of the
JSE Securities Exchange SA by the Company's auditors,
PricewaterhouseCoopers Inc. This unqualified review opinion is
available upon request from the Company Secretary and on the web
site. I.D. Cockerill Chief Executive Officer 4 August 2005 FIRST
ADD -- TABULAR MATERIAL I -- TO FOLLOW DATASOURCE: Gold Fields
Limited CONTACT: Investor relations: South Africa: Willie Jacobsz,
Telephone: +27-11-644-2460, Facsimile: +27-11-484-0639, e-mail: ;
Nerina Bodasing, Telephone: +27-11-644-2630, Facsimile:
+27-11-484-0639, e- mail: ; North America: Cheryl A Martin,
Telephone: +1-303-796-8683, Facsimile: +1-303-796-8293, e-mail: ;
Transfer Secretaries: South Africa: Computershare Investor Services
2004 (Proprietary) Limited, Ground Floor, 70 Marshall Street,
Johannesburg, 2001, P O Box 61051, Marshalltown, 2107, Telephone:
+27- 11-370-5000, Facsimile: +27-11-370-5271; United Kingdom:
Capital Registrars, Bourne House, 34 Beckenham Road, Beckenham,
Kent BR3 4TU , England , Telephone: +44-20-8639-2000, Facsimile:
+44-20-8658-3430; Corporate Secretary Cain Farrel, Telephone:
+27-11-644-2525, Facsimile: +27-11-484-0626, e-mail: ; Registered
offices: Johannesburg: Gold Fields Limited, 24 St Andrews Road,
Parktown, Johannesburg, 2193, Postnet Suite 252 , Private Bag x
30500, Houghton 2041, Tel: +27-11-644-2400, Fax: +27-11-484- 0626;
London: St James 's Corporate Services Limited, 6 St James 's
Place, London SW1A 1NP, United Kingdom, Telephone:
+44-20-7499-3916, Facsimile: +44- 20-7491-1989: American Depository
Receipts Transfer Agent: Bank of New York, Shareholder Relations, P
O Box 11258, New York, NY20286 -1258,US toll-free telephone:
+1-888-269-2377, e-mail: Web site: http://www.goldfields.co.za/
http://www.gold-fields.com/
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