Gold Fields Sells 60% Stake in Essakane Project for US$200 Million
October 11 2007 - 9:45AM
PR Newswire (US)
JOHANNESBURG, South Africa, October 11 /PRNewswire-FirstCall/ --
Gold Fields Limited ("Gold Fields") (NYSE, JSE, DIFX: GFI) is
pleased to announce that agreement has been reached in terms of
which Gold Fields will sell its current 60% stake in the Essakane
project located in Burkina Faso, West Africa, to its partner in the
project, Orezone Resources Inc. (Orezone) (TSX:OZN), for a minimum
total consideration of US$200 million. Orezone will pay Gold Fields
US$150 million in cash and US$50 million in Orezone securities or
US$200 million in cash at Orezone's election. Ian Cockerill, Chief
Executive Officer of Gold Fields, said: "While the Essakane project
is expected to make a good return and deserves to be built, Gold
Fields' relatively small stake in the project mitigates against it
becoming a Gold Fields franchise asset. We believe that Orezone is
well positioned to turn this asset to account." To date Gold Fields
has spent a total of US$47million on the project. The sale price
represents a significant return on investment for Gold Fields. The
proceeds from the sale will be reinvested to create value for Gold
Fields' shareholders. Options under consideration include, inter
alia, debt reduction and the funding of Gold Fields' extensive
capital investment portfolio. Cockerill added that this sale did
not detract in any way from Gold Fields' often stated strategy of
international growth: "We have definitely not changed course and
our aspiration to grow our international portfolio with
appropriately sized, value adding assets, remain as strong as
ever." The transaction is subject to a number of conditions,
including Orezone securing net proceeds of at least US$150 million
through a public offering of its securities, and approval of the
transaction by the South African Reserve Bank. Gold Fields and
Orezone expect the transaction to close towards the end of
November. The Essakane Project is the largest gold deposit in
Burkina Faso, West Africa. The Definitive Feasibility study
envisions a surface mine and CIL facility processing an average of
5,400,000 tonnes per annum. The project has 4.0 million ounces of
measured and indicated resources and 1.3 million ounces of inferred
resources at a 0.5 g/t cut-off. Reserves contained within a US$500
gold price mine plan are 2.65 million ounces. The project will take
18 months to construct at a total capital cost of US$346 million.
Once operational, the mine is expected to produce an average of
292,000 ounces of gold per annum at cash cost of US$356 per ounce.
Orezone is an explorer and emerging gold producer. The company has
a pipeline of advanced and grassroots projects, all located in
politically stable areas of West Africa which is one of the world's
fastest growing gold producing regions. Orezone's mission is to
create wealth by discovering and developing the earth's resources
in an efficient and responsible manner. Gold Fields Limited is one
of the world's largest unhedged producers of gold with attributable
production of 4.0 million ounces per annum, mineral reserves of 94
million ounces and mineral resources of 252 million ounces. The
Group employs some 47,000 permanent employees across its operations
and is listed on the JSE Limited South Africa (primary listing),
the New York Stock Exchange (NYSE) as well as the Dubai
International Financial Exchange (DIFX). DATASOURCE: Gold Fields
Limited CONTACT: Enquiries: Willie Jacobsz, Tel +27-11-644-2460,
Fax +27-11-484-0639, Mobile +27-82-493-1377,
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