Gold Fields Delivers Strong Performance With 20 Per Cent Jump in
Operating Profit JOHANNESBURG, South Africa, May 6
/PRNewswire-FirstCall/ -- Gold Fields Limited (NYSE & JSE: GFI)
today announced March 2004 quarter net earnings of R255 million (51
cents per share) compared with net earnings of R277 million (57
cents per share) in the December 2003 quarter and R805 million (171
cents per share) for the March quarter of 2003. In US dollar terms
the March 2004 quarter net earnings were US$38 million (US$0.07 per
share) compared with US$42 million (US$0.09 per share) in the
December 2003 quarter and US$93 million (US$0.20 per share) for the
March quarter of 2003. Attributable gold production for the March
2004 quarter was 1.033 million ounces compared with 1.045 million
ounces in the December 2003 quarter. March 2004 quarter highlights
included: * Operating profit up 20 per cent to R656 million (US$96
million); * Recovery in operating margin from 19 per cent to 22 per
cent, (South African operations from 7 per cent to 14 per cent); *
Attributable gold production virtually unchanged at 1.033 million
ounces, despite extended Christmas break; * Total cash costs were
flat quarter on quarter at R67,528 per kilogram and US$309 per
ounce; * International growth strategy progressing well with major
growth projects in Ghana, Australia, Peru and Finland on track; *
International operations are debt free; and * Successful conclusion
of the Mvelaphanda transaction leaves Gold Fields in a strong
financial position which will enable growth projects to be funded
internally. Ian Cockerill, Chief Executive Officer of Gold Fields
said: "Despite the tough operating environment during the March
2004 quarter, Gold Fields has produced satisfactory results. The
ongoing repositioning of our South African operations, to improve
grades and reduce costs, has contributed to significant margin
expansion. I fully expect this trend to continue." "These results
reflect our focus on delivering value to shareholders. We continue
to implement our strategy to build a high quality, internationally
diverse, gold company that is optimally managed for sustainable
earnings growth." "Our plans for international growth and
diversification remain on track, rooted in our proven ability to
add value to current and new assets. The organic growth projects at
our Ghana and Australia operations, as well as the planning and
feasibility work for our Arctic Platinum Project in Finland are
progressing to plan. Although certain conditions are still
outstanding on the acquisition of Cerro Corona in Peru, we are
proceeding towards closure. We have also made significant progress
in our exploration programmes in Africa, Asia, China and the
Americas." "In addition, during the quarter, MMC Norilsk acquired a
20 per cent interest in Gold Fields from Anglo American plc. After
preliminary discussions with Norilsk it has been agreed to explore
the potential for co- operation with regards to our respective gold
assets." STOCK DATA Number of shares in issue - at 31 March 2004
491,320,299 - average for the quarter 491,254,653 Free Float 100%
ADR Ratio 1:1 Bloomberg / Reuters GFISJ / GFLJ.J JSE SECURITIES
EXCHANGE SOUTH AFRICA - (GFI) Range - Quarter ZAR77.41 - ZAR102.60
Average Volume - Quarter 1,338,000 shares / day NYSE - (GFI) Range
- Quarter US$11.50 - US$14.91 Average Volume - Quarter 1,447,900
shares / day Salient features SA Rand Nine months to Quarter March
March March Dec March 2003 2004 2003 2003 2004 Gold produced* kg
102,433 96,910 33,340 32,480 32,131 Total cash costs R/kg 61,263
67,360 60,709 66,991 67,528 Tons milled 000 32,063 34,952 10,792
11,640 11,815 Revenue R/kg 100,302 86,630 95,068 84,842 88,887
Operating costs R/ton 216 202 201 202 199 Operating profit Rm 4,023
1,770 1,126 545 656 Net earnings Rm 2,164 953 805 277 255 SA c.p.s.
459 197 171 57 51 Headline earnings Rm 1,899 634 644 249 221 SA
c.p.s. 403 131 136 51 45 Net earnings excluding gains and losses on
financial instruments and foreign debt net of cash and exceptional
items Rm 1,785 485 476 111 238 SA c.p.s. 378 100 101 23 48 Salient
features US Dollars Quarter Nine months to March Dec March March
March 2004 2004 2003 2004 2003 Gold produced* oz (000) 1,033 1,045
1,072 3,116 3,293 Total cash costs $/oz 309 308 225 299 200 Tons
milled 000 11,815 11,640 10,792 34,952 32,063 Revenue $/oz 407 390
353 395 328 Operating costs $/ton 29 30 24 29 23 Operating profit
$m 96 80 135 253 423 Net earnings $m 38 42 93 136 228 US c.p.s. 7 9
20 28 48 Headline earnings $m 33 36 75 91 200 US c.p.s. 7 7 16 19
42 Net earnings excluding gains and losses on financial instruments
and foreign debt net of cash and exceptional items $m 34 17 58 69
188 US c.p.s. 7 3 12 14 40 * Attributable - All companies wholly
owned except for Ghana (71.1%). Overview As anticipated, largely
due to the Christmas break at the South African operations, the
Group's attributable gold production for the March quarter at 1.03
million ounces was 1 per cent below that of the December quarter.
Total cash costs in the March quarter were virtually unchanged at
R67,528 per kilogram despite lower production and the impact of
translating Australia's costs at a stronger Australian dollar.
Total cash costs in US$ terms at $309 per ounce also tracked the
previous quarter, with the rand/dollar exchange rate being stable
at R6.79 compared with R6.76 in the previous quarter. Net earnings
excluding gains and losses on financial instruments and foreign
debt net of cash and exceptional items were slightly more than
double the previous quarter due to the 20 per cent increase in
operating profit. Net earnings were 8 per cent below the December
2003 quarter, at R255 million (US$38 million). This was due to a
reduction in gains from financial instruments and an increase in
finance costs associated with an unrealised exchange loss on Euro's
held offshore. The aggregated effect of these two items more than
offset the 20 per cent increase in operating profit achieved for
the quarter due to the increased gold price and reduced costs.
Health and safety During the quarter the lost day injury frequency
rate at the operations improved from 15.4 to 13.8, the serious
injury frequency rate improved from 7.9 to 6.5 and the fatal injury
frequency rate improved from 0.37 to 0.15. This is an excellent
achievement. Beatrix achieved a million fatality free shifts during
the quarter with Beatrix 4 shaft achieving one year without a
fatality on 23 January 2004. This achievement is a first for a
senior operations manager in the Group. In addition, Damang mine in
Ghana recorded one year without any lost day injuries, also on 23
January. Financial Review Quarter ended 31 March 2004 compared with
quarter ended 31 December 2003 REVENUE Revenue was 4 per cent
higher than the previous quarter at R3,028 million (US$444
million). It compared with R2,923 million (US$431 million) in the
December quarter. This was due to a higher rand gold price as a
consequence of a 4 per cent increase in the average US dollar gold
price from US$390 per ounce to US$407 per ounce in the March
quarter. The average Rand/US dollar exchange rate remained
virtually unchanged at 6.79. The resultant rand gold price of
R88,887 per kilogram was 5 per cent higher than the R84,842 per
kilogram achieved last quarter. The higher gold price was partly
offset by the lower gold sales of 34,069 kilograms (1,095,300
ounces) compared with 34,451 kilograms (1,107,600 ounces) last
quarter. OPERATING COSTS Operating costs at R2,351 million (US$345
million) for the quarter were marginally lower than the previous
quarter's costs of R2,355 million (US$347 million). At the South
African operations, costs decreased 3 per cent compared with the
previous quarter. This was in line with the slightly lower
production levels at Kloof and Beatrix as a result of the Christmas
break. At Driefontein, costs decreased 2 per cent despite the 6 per
cent increase in production. Last quarter's costs included opening
up of additional areas as a result of the underground fires. The
lower costs at the South African operations also reflect the
positive impact of cost reduction strategies. However, these lower
costs were offset by the increase in costs at the international
operations. This increase was mainly due to translating costs at
the Australian operations at a stronger Australian dollar. Ghana's
costs increased this quarter in line with the higher volumes mined,
associated with accelerated stripping to provide greater
flexibility. OPERATING PROFIT MARGIN The net effect of the higher
revenue and lower costs, was an increase in operating profit from
R545 million (US$80 million) in the December quarter to R656
million (US$96 million) this quarter. The operating margin for the
Group increased to 22 per cent for the current quarter from 19 per
cent in the previous quarter. This was due to an increase in
margins at the South African operations from 7 per cent in the
previous quarter to 14 per cent in the March quarter. The increase
at the South African operations resulted from the higher gold price
and lower costs despite the fact that production was only 90
kilograms lower than the previous quarter. The margin at the
international operations decreased from 38 per cent last quarter to
34 per cent this quarter. The reduction was due to lower production
at St Ives associated with a mill shutdown and less material toll
treated. AMORTISATION Amortisation was slightly lower than the
previous quarter at R298 million (US$44 million), in line with the
decreased production. ACCOUNTING FOR THE MVELA TRANSACTION The net
proceeds of R4,107 million (R4,139 million less R32 million of
costs) from the Mvela loan was accounted for as two components. The
first is the debt component of the Mvela loan of R1,653 million,
which is the present value of the future interest payments
determined at a fixed half yearly rate of 10.56 per cent. The debt
component is shown under long-term and current portion of long-term
loans in the balance sheet. The balance of R2,454 million was
accounted for as the equity component of the Mvela loan. The equity
component is shown under shareholders' equity in the balance sheet.
Due to the difference between the accounting and taxation treatment
of the Mvela loan a deferred taxation asset of R677 million was
recognised with the corresponding credit included with the equity
component of the Mvela loan. The deferred taxation asset will be
charged to earnings as the loan is repaid. FINANCIAL INSTRUMENTS
AND DEBT Exchange losses on foreign debt and cash amounted to R34
million (US$5 million) compared with a gain of R60 million (US$8
million) last quarter. Included in this loss is an amount of R31
million (US$4 million) due to an unrealised exchange loss on Euro
funds held offshore. The Euro's resulted from an offshore share
placement conducted late last year, which realised US$217 million
net of costs. These funds were redenominated into Euro's. The loss
has resulted from the weakening of the Euro against the US dollar
from 1.25 to 1.23 over the quarter. In the December quarter the
gain on these Euro's amounted to R65 million (US$9 million) as the
Euro strengthened against the US dollar from 1.20, being the value
at the date of the original conversion from US dollar into Euro's,
to the December closing rate of 1.25 to the US dollar. The balance
of the loss on foreign debt and cash was a small exchange loss on
the repayment of the Australian debt outstanding at the end of
December of US$11 million. This loss amounted to R3 million (US$1
million), which was similar to last quarter. The gain on the
financial instruments for the quarter amounted to R44 million (US$7
million) compared with R120 million (US$17 million) earned last
quarter. Included in this quarter are gains on the Australian
financial instruments of R98 million (US$15 million), offset by
losses on the Tarkwa forward purchases of R25 million and a marked
to market loss of R29 million (US$4 million) as a result of an
interest rate swap executed in relation to the Mvela loan, all
explained in more detail below. As previously reported, the
Australian operations established currency financial instruments to
protect their underlying cash flows against a possible
strengthening of the Australian dollar against the United States
dollar. Gains on these financial instruments amounted to R98
million (US$15 million) in the current quarter as detailed below,
compared with R143 million (US$20 million) in the previous quarter.
The gain in the previous quarter was a result of the Australian
dollar strengthening against the US dollar, from 68.14 cents at the
end of the September 2003 quarter to 73.41 cents at the end of the
December quarter 2003. The closing rate at the end of the March
quarter was 75.15 US cents to the Australian dollar. On 7 January
2004, Gold Fields Australia closed out the Australian dollar/US
dollar currency financial instruments. The existing forward
purchases of Australian dollars and the put and call options were
closed out by entering into equal and opposite transactions to the
same maturity dates of the original translation. The close out of
the outstanding open position of US$275 million was at an average
spot rate of 0.7670 US$/AU$. These transactions locked in gross
profit amounting to US$116 million and the underlying cash receipts
were deferred to match the maturity dates of the original
transactions. The present value of this gross profit amounted to
US$112 million. An amount of US$103 million had already been
accounted for in the marked to market valuation up until the end of
December 2003. During the quarter the scheduled closure of US$12.5
million of the overall position, thus reducing it to US$275
million, resulted in a profit of US$5 million and this, together
with the crystallisation of the profit above, resulted in a net
gain of US$14 million (R98 million). In order that the Group is
able to participate in further Australian dollar appreciation a
strip of quarterly maturing Australian dollar/US dollar call
options were purchased in respect of an amount of US$275 million of
which the value dates and amounts match those of the remaining
period of the original structure. The Australian dollar call
options resulted in a premium of US$8.3 million based on a strike
price of 0.7670 US$/AU$. The payments were also deferred to match
the maturity dates of the original structure. The options are
valued on a marked to market basis. The gain on the above financial
instruments was partially offset by an unrealised loss of R25
million (US$4 million) on the rand/US dollar forward cover of US$50
million. These forward purchases are to hedge the Group's
commitment in respect of the Tarkwa mill and owner mining projects
approved at US$159 million, to the extent that these projects are
funded from South African sources. In the December quarter the
unrealised loss amounted to R23 million (US$3 million). The
weighted average forward rate in respect of the forward cover is
R8.43 to the US dollar and maturity is on 3 June 2004. The marked
to market value of this forward purchase at the end of the quarter
was a negative R89 million (US$14 million negative). The balance of
negative R29 million (US$4 million) is the marked to market loss as
a result of an interest rate swap in respect of the Mvela loan. The
interest rate exposure on the Mvela loan was converted from a fixed
rate of 10.56 per cent nominal annual compound semi-annually to a
floating rate, being the three month Jibar rate, by concluding an
interest rate swap over the life of the loan. Full details of this
and other financial instruments are given on page 11 of this
report. EXPLORATION AND OTHER Exploration expenditure increased,
from R35 million (US$5 million) in the December quarter to R44
million (US$7 million) in the March quarter, largely as a result of
planned increased activity. The increase in other income of R22
million (US$3 million) relates mainly to shares received in
offshore exploration companies in exchange for joint venture
exploration interests, the market value of which has been included
in income. EXCEPTIONAL ITEMS Profit before taxation and exceptional
items decreased 7 per cent to R345 million (US$51 million) compared
with R370 million (US$54 million) posted in the December 2003
quarter. This was mainly due to the net loss on foreign debt and
cash as well as reduced gains on financial instruments, described
earlier, which more than offset the increase in operating profit.
Exceptional items amounted to R21 million (US$3 million) and
includes the sale of the remaining shares of 1,003,000 in Harmony
Gold Mining Company Limited and the remaining 485,000 shares held
in Committee Bay Resources Limited, resulting in a profit of R47
million (US$7 million). This was partly offset by the write off of
mineral rights amounting to R25 million (US$4 million). This write
off arises from the introduction of the Mineral and Petroleum
Resources and Development Act, 2002 (Act No. 28 of 2002), which was
declared effective on 1 May 2004. TAXATION Taxation at R64 million
(US$9 million) compared with R84 million (US$12 million) for the
previous quarter. This was mainly due to reduced gains on the
financial instruments. EARNINGS As a result of the above, net
earnings, after accounting for minority interests, were R255
million (US$38 million) or 51 SA cents per share (US$0.07 per
share), compared with R277 million (US$42 million) or 57 SA cents
per share (US$0.09 per share) in the previous quarter. Headline
earnings i.e. net earnings less the net after tax effect of asset
sales and the sale of investments, amounted to R221 million (US$32
million) or 45 SA cents per share (US$0.07) compared with R249
million (US$36 million) or 51 SA cents per share (US$0.07) last
quarter. The main reason for this decrease was the exchange loss on
foreign debt and cash together with the lower gains on financial
instruments. Earnings, excluding exceptional items as well as the
net gains on financial instruments and foreign debt net of cash
after taxation, amounted to R238 million (US$34 million) or 48 SA
cents per share (US$0.07 per share) as compared with R110 million
(US$17 million) or 23 SA cents per share (US$0.03 per share)
achieved last quarter. This improvement reflects the 20 per cent
increase in operating profit. CASH FLOW Operating cash flow for the
quarter was R528 million (US$77 million), compared with operating
cash flow in the December quarter of R677 million (US$96 million).
The decrease is mainly due to an increase in taxation paid of R68
million (US$9 million). An interim dividend of R197 million (US$29
million) was paid during the quarter. No dividend was paid in the
previous quarter. Capital expenditure was R749 million (US$109
million) as compared with R662 million (US$97 million) in the
December 2003 quarter. The increase is mainly due to increased
expenditure on growth projects in Ghana and Australia. R153 million
(US$28 million) was expended at the South African operations. This
is a decrease of R99 million (US$11 million) when compared with the
previous quarter due to the deferral/cut back of non-essential
capital expenditure without negatively impacting on key capital
projects. The Australian operations incurred capital expenditure of
R269 million (A$57 million), the majority on development of
existing projects and exploration to increase the ore reserve base
at those operations. The mill project at St Ives commenced this
quarter and accounted for R91 million (A$19 million) of this
expenditure. At the Ghanaian operations, capital expenditure
amounted to R282 million (US$46 million), the majority at Tarkwa on
the mill and owner mining projects, which amounted to R263 million
(US$43 million) as compared with R153 million (US$23 million) the
previous quarter. Expenditure to date on these projects amounts to
R475 million (US$73 million), leaving a balance of US$86 million to
completion. Major projects are still forecast to be in line with
approved votes except for a possible small over expenditure on the
mill project at Tarkwa, which will depend on currency moves over
the next few months. During the quarter the proceeds from the sale
of Driefontein's 1C11 block amounting to R315 million (US$45
million) was received. Cash flows from financing activities include
the proceeds from the Mvela transaction of R3.8 billion (US$543
million). This receipt is net of the Mvela shares subscribed for of
R100 million (US$15 million) and the redeemable preference shares
of R200 million (US$29 million) and transaction costs of R32
million (US$ 5 million). Outstanding foreign debt of US$14 million
(R100 million) was repaid during the quarter and the offshore
operations are now debt free. Net cash inflow for the quarter
including the above was R3,684 million (US$527 million). The cash
balance at the end of the March 2004 quarter was R4,701 million
(US$721 million) as compared with R1,104 million (US$161 million)
at the end of the December 2003 quarter. Quarter ended 31 March
2004 compared with quarter ended 31 March 2003 Attributable gold
production decreased by 4 per cent to 1,033,000 ounces in the March
2004 quarter compared with 1,072,000 ounces in the March 2003
quarter. The decrease in production was due to lower underground
and surface yields at the South African operations. This was partly
offset by the excellent results achieved at the international
operations, where attributable production year on year is up 10 per
cent from 308,000 ounces to 338,000 ounces. Revenue decreased 10
per cent in rand terms (increased 12 per cent in US dollar terms)
from R3,352 million (US$397 million) to R3,028 million (US$444
million). This was due to a reduction in the rand gold price
achieved from R95,068 per kilogram (US$353 per ounce) in the March
2003 quarter to R88,887 per kilogram (US$407 per ounce) in the
March 2004 quarter and the lower production. Group operating costs
in rand terms increased by 8 per cent or R179 million (US$89
million). At the South African operations operating costs increased
by 6 per cent or R89 million (US$60 million) slightly lower than
the wage increases. The increase at the international operations
amounted to 15 per cent, from R617 million (US$74 million) to R707
million (US$104 million). This increase results from the increased
levels of production in Australia and the increase in waste mined
to improve mining flexibility at Tarkwa. Added to this is the
effect of translating costs at the Australian operations at a 5 per
cent weaker Rand, which weakened from an average of 4.95 to 5.19
Rand to the Australian dollar in comparative periods. This was
offset partially by translating costs at Ghana into South African
rand at a 19 per cent stronger Rand/US dollar exchange rate than
the corresponding quarter in the previous year. The average
exchange rate strengthened from R8.38 to the US dollar in the March
2003 quarter to R6.79 in the current quarter. Operating profit at
R656 million (US$96 million) for the March 2004 quarter compares to
R1,126 million (US$135 million) for the March 2003 quarter as a
result of the above. Profit before tax amounted to R365 million
(US$54 million) compared with R1,214 million (US$141 million) in
the March 2003 quarter. The decrease in the profit was due to the
lower operating profit described above as well as the following
items. The gain on financial instruments reduced from R185 million
(US$19 million) to R44 million (US$7 million); net interest and
investment income was negative R4 million (US$1 million) in the
current quarter compared with a positive R41 million (US$5 million)
in the March 2003 quarter; exchange gains and losses reduced from a
R55 million (US$6 million) gain to a loss of R34 million (US$5
million) in the current quarter and exceptional items reduced from
R177 million (US$19 million) to R21 million (US$3 million) this
quarter, due to lower profit on the sale of shares, offset
partially by the lower amortisation of R298 million (US$44 million)
in line with the lower production. Earnings decreased from R805
million (US$93 million) in the March 2003 quarter to R255 million
(US$38 million) in the March 2004 quarter. Nine months ended 31
March 2004 compared with nine months ended 31 March 2003
Attributable gold production decreased 5 per cent from 3,293,000
ounces to 3,116,000 as a result of lower grades at the South
African operations and the sale of St Helena. St Helena accounted
for 43,700 of these ounces. Gold output from Kloof and Driefontein
decreased by 100,000 ounces each. This was partly offset by the
increased production of 9 per cent from the international
operations. Revenue decreased by 18 per cent in rand terms
(increased 11 per cent in US dollar terms) from R10,922 million
(US$1,149 million) to R8,904 million (US$1,272 million) due to the
decrease in production and the decrease in the gold price from
R100,302 per kilogram (US$328 per ounce) to R86,630 per kilogram
(US$385 per ounce) for the nine months ended 31 March 2004.
Operating costs increased 2 per cent compared with the prior year
period at R7,047 million (US$1,007 million). However, due to the
lower production, the unit cost increased 11 per cent to R67,528
per kilogram as compared with R60,709 per kilogram in the prior
period. The increase at the South African operations of 9 per cent
was offset by the lower costs at the International operations, as a
result of translating the Ghanaian operations at a 26 per cent
stronger rand, which strengthened from an average of R9.51 to R7.00
to the US dollar over this period. The stronger rand when compared
with the Australian dollar had a similar effect when translating
the Australian operations, though smaller at 7 per cent,
strengthening from an average of 5.36 to 4.97 rand to the
Australian dollar. Operating profit at R1,770 million (US$253
million) compared with R4,023 million (US$423 million) achieved in
the nine months to March 2003. Profit before tax amounted to R1,257
million (US$180 million) compared with R3,476 million (US$366
million) for the same period last year due to the lower operating
profit described above and the effect of the items listed below.
Gains on financial instruments of R200 million (US$29 million)
compared with R150 million (US$16 million) for the nine months to
March 2003. Finance income of R28 million (US$4 million) compared
with R145 million (US$15 million) in the prior period. The
exceptional gains were R300 million (US$32 million) compared with
the current year to date income of R257 million (US$37 million).
Net earnings reduced from R2,164 million (US$228 million) in the
nine months to March 2003 to R953 million (US$136 million) for the
current nine months to March 2004. Detailed and Operational Review
Group overview Attributable gold production for the March 2004
quarter decreased marginally to 1,033,000 ounces when compared with
the December 2003 quarter. Approximately one third of this
production is attributable to the international operations.
Production from the Australian operations decreased 3 per cent to
184,600 ounces this quarter due to lower volumes at St Ives.
Operating profit from the Australian operations decreased 28 per
cent to R119 million (A$23 million, US$18 million) for the quarter,
primarily as a result of the lower production and increased unit
costs at St Ives. The Australian dollar strengthened this quarter
form an average of 4.80 to 5.19 to the rand in the current quarter.
The Ghanaian operations showed a 2 per cent decrease in
attributable gold production to 153,200 ounces partly due to
accelerated waste mining in order to increase mining flexibility at
Tarkwa. Ghana contributed operating profit of R263 million (US$39
million), an 8 per cent increase on the previous quarter's
operating profit. The improvement in operating profit is due to the
higher gold price achieved. The international operations
contributed, R382 million (US$56 million) of the total operating
profit of R656 million (US$96 million) or 58 per cent compared with
R408 million (US$60 million) last quarter of the total operating
profit of R545 million (US$80 million) or 75 per cent. At the South
African operations, production was virtually unchanged at 695,200
ounces. The decrease of approximately 5 per cent in gold production
at both Beatrix and Kloof related to the Christmas break, which was
offset by a 6 per cent increase in output at Driefontein due to the
diminished effect of the fires in the high grade areas this quarter
and gold from plant clean up. Operating profit at the South African
operations increased from R137 million (US$21 million) to R274
million (US$40 million) mainly as a consequence of the higher gold
price and significantly reduced costs. Group ore milled increased
from 11.64 million tons to 11.82 million tons due to an increase in
surface tons mainly at Tarkwa and Driefontein. The overall yield of
2.9 grams per ton was in line with the December quarter. Total cash
costs in rand terms increased to R67,528 per kilogram from R66,991
per kilogram achieved last quarter mainly as a result of the lower
production and increased costs at St Ives. In US dollar terms,
total cash costs were virtually unchanged at US$309 per ounce
compared with US$308 per ounce. Operating cost per ton at R199
improved from R202 last quarter, the increase in tons milled being
offset by reduced operating costs. South African Operations
DRIEFONTEIN March 2004 December 2003 Gold produced - 000'ozs 289.6
272.3 Total cash costs - R/kg 67,607 73,126 - US$/oz 310 336
Production at Driefontein increased 6 per cent to 289,600 ounces as
a result of an increased underground yield compared with the
previous quarter and clean-up from the old no. 1 and no. 2 mill
processing plants. This is now almost complete. Underground tonnage
decreased mainly due to the Christmas break and the closure of 5W
shaft. In addition, gold production at the West shafts was
optimised by stopping all the low-grade mining, which was not
making a contribution. This resulted in lower underground tonnage
at an increased grade of 8.6 grams per ton compared to 7.5 grams
per ton last quarter. Underground tonnage decreased by 12 per cent
to 838,000 tons from 950,000 tons, while overall tonnage increased
by 6 per cent from 1,558,000 tons in the December quarter to
1,655,000 tons achieved in the current quarter. Although additional
surface material was treated during the Christmas break, the
combined yield remained the same as the previous quarter at 5.4
grams per ton, as a result of the increase in underground yield.
Operating costs decreased from R648 million to R638 million for the
quarter as last quarter included additional opening up costs due to
the fires. Total cash costs decreased by 8 per cent in rand terms
to R67,607 per kilogram from R73,126 per kilogram last quarter as a
result of the increased production. In US dollar terms the total
cash cost decreased by 8 per cent from US$336 per ounce to US$310
per ounce quarter on quarter. Operating profit more than doubled,
from R68 million (US$11 million) in the December quarter to R158
million (US$23 million) in the current quarter. Capital expenditure
decreased to R29 million (US$6 million) for the quarter partially
due to timing but also because of a deliberate decision to defer
projects where possible that would not affect production, given the
current margin squeeze. This compared with R82 million (US$13
million) in the previous quarter. Production volumes for the June
quarter will be affected by the Easter break, an additional public
holiday declared in order to vote in the recent elections and lower
gold volumes from surface gold clean-up at no.1 and no. 2 plants in
line with the operational plan. Improved volumes from underground
should offset this. The expected gold output, should, however
remain fairly constant when compared with the March quarter's gold
production. KLOOF March 2004 December 2003 Gold produced - 000'ozs
250.9 265.1 Total cash costs - R/kg 75,920 75,849 - US$/oz 348 349
Gold production at Kloof decreased 5 per cent to 250,900 ounces in
the March quarter. This was due to the reef tons milled from
underground being affected negatively by the extended Christmas
break and the slower than expected production build-up after this
break. Underground tonnage decreased to 744,000 tons this quarter
from 921,000 tons last quarter, while surface tons increased 33 per
cent from 363,000 tons to 483,000 tons, largely in response to the
lower underground tons milled. The initiative during the last two
quarters of mothballing the marginal 9 shaft, accessing VCR pillars
and relocating crews from low grade areas to higher grade panels
has resulted in the underground yield increasing from 8.6 grams per
ton last quarter to 10.0 grams per ton this quarter. The combined
yield remained at 6.4 grams per ton due to increased treatment from
surface sources during the Christmas break. Operating costs for the
quarter at R617 million (US$91 million) were 5 per cent lower than
the previous quarter's costs of R652 million (US$96 million) in
line with the lower production and the results of good cost control
initiatives. Total cash costs at R75,920 per kilogram were almost
unchanged from the previous quarter of R75,849 per kilogram. In US
dollar terms, total cash costs decreased slightly from US$349 per
ounce to US$348 per ounce quarter on quarter. Operating profit
increased 50 per cent to R75 million (US$11 million) compared with
R50 million (US$7 million) the previous quarter. Capital
expenditure decreased from R87 million (US$14 million) to R57
million (US$10 million) this quarter. This level of expenditure is
expected to be maintained in the June quarter. The emphasis remains
on repositioning the mines to higher grade areas in order to combat
the strength of the rand's impact on margins. Pillar mining
opportunities and old gold initiatives are receiving attention,
while the focus on increased volumes from underground remains. Gold
production for the June quarter should show an improvement despite
the number of public holidays in the June quarter. BEATRIX March
2004 December 2003 Gold produced - 000'ozs 154.7 160.8 Total cash
costs - R/kg 78,143 77,005 - US$/oz 358 354 Gold production at
Beatrix decreased 4 per cent to 154,700 ounces from the 160,800
ounces achieved in the previous quarter. This decrease was mainly
due to lower underground yields. Underground ore milled remained
constant at 1,003,000 tons this quarter compared with 1,000,000
tons last quarter, while surface tons increased 15 per cent from
390,000 tons to 450,000 tons. Toll processing at Joel accounted for
304,000 of these tons, an increase of 96,000 tons when compared
with the December quarter. Lower underground and surface yields,
together with increased surface tonnage resulted in a decrease in
the combined yield from 3.6 grams per ton to 3.3 grams per ton in
the March quarter. Detailed and focused action plans have restored
mining mixes at the various shafts as reported in the previous
quarter. The holing of a number of raise lines, resolution of
logistical and ventilation bottlenecks continue to be addressed in
order to improve tonnage throughput. At 2 shaft, grades have
recovered to planned levels although volumes are still slightly
below plan. At 3 shaft exploration drilling from surface and
underground has confirmed the extension of the current facies to
the north. Beatrix 4 shaft incurred operating losses of R18 million
(US$3 million) during the quarter. Discussions with the unions to
reduce labour and mine additional shifts, including holidays and
Sundays at 4 shaft, have been successfully completed. This should
allow greater flexibility with an increase in volumes and a
decrease in costs in the next quarter. Total cash costs increased 1
percent in rand terms to R78,143 per kilogram and increased to
US$358 per ounce from US$354 per ounce last quarter. Operating
profit increased from R18 million (US$3 million) to R40 million
(US$6 million) quarter on quarter mainly due to the higher gold
price received. Capital expenditure decreased from R83 million
(US$13 million) last quarter to R67 million (US$12 million) this
quarter. Production in the June 2004 quarter should improve
marginally compared with the March 2004 quarter. International
Operations Ghana TARKWA March 2004 December 2003 Gold produced -
000'ozs 137.4 141.8 Total cash costs - US$/oz 237 227 Gold produced
for the quarter decreased to 137,400 ounces compared with 141,800
ounces in the December quarter. The decrease in gold production is
primarily as a result of a build up of gold in process on the heaps
of 4,500 ounces this quarter compared with a release of 10,400
ounces in the previous quarter. The gold in process move reflects
the move to stacking on higher lifts on the leach pads this
quarter, and the associated slower gold recovery rates from higher
lifts. With the lag time from gold stacking on the heaps to gold
production being at least three months, this gold in process
reversal also reflects lower volumes of recoverable gold stacked in
the December quarter. While ore tonnage treated only increased by
some 6 per cent, total volumes mined increased by some 23 per cent,
reflecting an increase in waste movement. The stripping ratio
increased to 2.7 compared with 2.2 in the December quarter. The
increase in stripping ratio reflects a previously reported drive to
increase mining flexibility, particularly ahead of the conversion
to owner mining in the new fiscal year. Operating costs increased
from US$30 million to US$34 million in line with the increase in
volumes mined. Unit costs increased from US$7.76 per ton treated to
US$8.06 per ton, reflecting the increase in stripping ratio. The
increase in operating expenditure, coupled with the slightly lower
gold production, led to a 4 per cent increase in total cash costs
to US$237 per ounce. Tarkwa contributed US$23 million to operating
profit, which is in line with the previous quarter. The increase in
capital expenditure this quarter from US$28 million to US$45
million reflects expenditure on the mining fleet, which amounted to
US$16 million for the quarter compared with US$3 million last
quarter and further expenditure on the mill construction project of
US$27 million as compared with US$20 million last quarter. The mill
construction project remains on track for commissioning in the
quarter ended December 2004. The balance of capital expenditure on
this project amounts to US$31 million. The conversion to owner
mining should be finalised by the end of the September 2004
quarter. The balance of capital expenditure on this project amounts
to US$55 million, with the majority of this expenditure due in the
June 2004 quarter. Gold production is expected to be similar to the
levels achieved in the last two quarters, subject to gold in
process movements, which remains difficult to predict. Operating
costs in the June quarter will be similar to the current levels as
the mine continues to focus on maintaining the current strip
ratios. DAMANG March 2004 December 2003 Gold produced - 000'ozs
78.1 77.5 Total cash costs - US$/oz 219 236 Gold produced for the
quarter increased to 78,100 ounces compared with 77,500 ounces in
the December quarter. A slight reduction in ore tonnages treated,
due to a planned mill shutdown, was offset by an increase in yield
from 1.8 gram per ton to 1.9 gram per ton, due to the availability
of larger volumes of high grades ore from the Damang pit. The tons
mined increased by 8 per cent to 4 million tons with the stripping
ratio reducing from 1.88 to 1.82. The increase in volume of ores
from the Damang pit, as well as the Kwesie and Lima pits, reduced
the amount of stockpile tonnages treated this quarter in comparison
with the previous quarter. Operating costs increased marginally to
US$17 million in line with the increase in volumes mined. Total
cash costs however reduced from US$236 to US$219 quarter on
quarter, largely reflecting limited gold in process charges in this
quarter against some US$15/oz in the December quarter, in line with
the reduction in stockpile consumption in the current quarter
referred to earlier. Unit costs per ton treated remained virtually
unchanged. The net result was an increase in operating profit to
US$15 million from US$13 million in the previous quarter. Gold
production is expected to be slightly lower in the June quarter
reflecting a reduction in the availability of higher grade ores in
the Damang pit. Total cash costs will increase to levels seen in
the December quarter reflecting the lower grades and further
consumption of stockpiles and the associated gold in process
charges. Australia ST IVES March 2003 December 2003 Gold produced -
000'ozs 131.8 140.1 Total cash costs - A$/oz 442 395 - US$/oz 338
280 Gold production at St Ives was 131,800 ounces, a decrease of 6
per cent when compared with the December quarter's production of
140,100 ounces. This decrease was due to a decline in volumes
treated largely due to a maintenance shutdown of the mill and a
reduction in the volume of toll treatment, with the termination of
tolling at the South Hannan's mill, interruptions due to heavy rain
and a slight decline in head grades. Ore production from
underground increased by some 30 per cent with ongoing build up
from the Argo and Leviathan mines. This increase in the
availability of high grade ores was offset by grade recovery
problems in the Mars pit during the quarter, leading to lower
grades from this key source of ore. As a result gold production was
not maintained as had been expected. Operating costs at A$56
million (R287 million, US$42 million) were similar to the previous
quarter. Total cash costs were A$442 per ounce (US$338 per ounce)
for the March quarter compared with A$395 per ounce (US$280 per
ounce) in the December quarter. The increase in cash costs reflects
the lower volume of gold produced, the cost of the mill shutdown, a
A$5 million gold in process charge associated with consumption of
stockpiles and the impact of continued build-up at the underground
mines. St Ives contributed A$11 million (R58 million, US$9 million)
to operating profit compared with A$21 million (R104 million, US$15
million) in the previous quarter. The gold price achieved of A$538
per ounce was 2 per cent below the December quarter. Capital
expenditure increased to A$50 million (R239 million, US$38 million)
in the March quarter from A$21 million (R107 million, US$16
million) in the December quarter mainly due to expenditure on the
mill optimisation project, which commenced this quarter and
amounted to A$19 million (R91 million, US$ 14 million). In the June
quarter it is anticipated that an amount of A$56 million (R274
million, US$42 million) will be spent. Gold production and total
cash costs should return to levels seen in the December quarter.
AGNEW March 2004 December 2003 Gold produced - 000'ozs 52.8 50.1
Total cash costs - A$/oz 304 296 - US$/oz 233 210 Gold production
at Agnew increased 5 per cent to 52,800 ounces for the quarter.
This reflected an increase in the volume of high grade ores treated
from underground, primarily from the Kim mine, which displaced
lower grade stockpiled ores. The mine reported a marginal increase
in total cash costs in Australian dollars from A$296 per ounce
(US$210 per ounce) last quarter, to this quarter's A$304 per ounce
(US$233 per ounce) as a result of increased underground mining
volumes. The contribution to operating profit from Agnew was A$12
million (R61 million, US$9 million) compared with A$13 million (R61
million, US$9 million) last quarter. Capital expenditure was the
same as last quarter at A$7 million (R30 million, US$5 million) as
exploration and development of the underground operations at
Waroonga continued. Agnew performed above expectations once again
and it is unlikely that this level of production and profitability
can be maintained. As a result of the anticipated closure during
the June quarter of the Crusader/Deliverer underground operation,
production in the next quarter is expected to be some 10 to 20 per
cent lower than the last two quarters, with a concomitant effect on
margins. Capital and development projects ST IVES EXPANSION PROJECT
During the quarter construction of the new 4.5 million ton per
annum mill CIP process plant at St Ives made good progress,
following site mobilisation at the end of the December quarter. In
the March quarter, site levelling, construction of the ROM pad and
casting of the SAG mill and crusher foundations were well advanced,
while the SAG mill and ancillary equipment was delivered to site.
By quarter end some 75 per cent of engineering works had been
completed while commitments in respect of 50 per cent of the total
capital expenditure had been made. The project remains on track for
commissioning in the December 2004 quarter at a total cost of A$125
million. TARKWA EXPANSION PROJECT CIL Process Plant The new 4.2
million ton per annum mill project advanced satisfactorily during
the quarter and remains on track for commissioning in the quarter
ended December 2004. All major site civil and concrete work has
been completed with delivery and erection of steel work in full
swing, while construction of the tailings dam continued. The
fabrication of the mill, which has been on the critical path, was
completed on schedule and the mill is currently being shipped to
Ghana. Noting that contingency in the budget has been largely
exhausted, the project remains within the US$85 million budgeted,
save for possible currency exposure on the A$ and ZAR, representing
a possible US$5 million overrun, which will depend on currency
moves over the next few months. Conversion to owner mining The
first deliveries of the new mining fleet were made to Tarkwa during
the quarter. By quarter end nine of the eventual twenty four 785C
haul trucks had been delivered. Various graders and dozers have
been delivered, commissioned and are already in service. During the
coming quarter the remainder of the haul trucks and six of the
ultimate eight excavators will be delivered. Screening and
recruitment of operators and technical staff, sourced primarily
from the current contract workforce, has commenced, while
finalisation of the majority of the consumable supply contracts is
underway. It is anticipated that the build up of the operations
with the new fleet will occur in the first quarter of F2005 and
that by the end of that period the overlap with the contract mining
operator will cease. ARCTIC PLATINUM PROJECT Activity at APP
continued to focus on the two large tonnage open pittable deposits
at Suhanko, namely Kontijarvi and Ahmavaara. During the March 2004
quarter exploration focused on detailed in-fill drilling at the two
deposits, with particular emphasis on grade control drilling in the
areas targeted for the bulk samples. Towards the end of the quarter
blast hole drilling and sampling at Kontijarvi and overburden
stripping in the trial mine area at Ahmavaara were completed. A
bulk sample of 5,300 tons will be mined from the two deposits
during the fourth quarter and processing at the pilot plant will
commence. The pilot plant is intended to verify process parameters
at this scale and to produce concentrate for downstream processing
testwork. The trial mine, pilot scale concentrator campaign and the
subsequent downstream treatment testwork is the critical path to
completion of the feasibility study on this project. It is planned
to reach an investment decision by the end of this calendar year.
DAMANG EXPANSION PROJECT During the March quarter, a dedicated
project team was mobilised to evaluate the various options for the
Damang operation arising from the exploration programmes undertaken
through to the end of the December 2003 quarter. These exploration
programmes, which are largely completed, have assessed both
conglomerate as well as hydrothermal styles of mineralisation on
the Damang lease. The project team is now evaluating options that
include exploiting new sources of high grade hydrothermal
mineralisation at Rex and Amoanda as well as a further cut back on
the Damang pit, along with incremental sources of soft low grade
feed ores from Tomento and the Lima area. These options are
focussed on near term production, while longer term options of
developing an underground mine below the Damang pit and at the
Abosso Deeps area between Tarkwa and Damang, are also being
examined. The Project team is expected to complete its work by the
end of the June 2004 quarter. Exploration and Corporate Development
CERRO CORONA IN PERU During the last quarter, we announced the
conclusion of a transaction to acquire the Cerro Corona gold and
copper development project located in northern Peru. During this
quarter the Company successfully completed the first condition to
closing of the acquisition, that is the completion of due
diligence. The transaction remains subject to completion of the
acquisition of all surface rights required to develop the project
and successful permitting. During the quarter good progress was
made with the former aspect while a full time project team has been
established in Peru to advance all elements of the project
development, including the required permitting, which is expected
to be completed in the first half of the 2005 calendar year.
FURTHER CHINA VENTURES Gold Fields further emphasised the
importance of the China region by establishing a regional
representative office in Beijing during the quarter. Dr. Guocheng
Pan, who has consulted extensively for Gold Fields over the past
five years, is managing this office. This office will be
responsible for overseeing the exploration joint ventures with Sino
Mining in the Shandong province and with Fujian Zijin Mining
Industry ("Zijin") in the Fujian province. The Sino Gold Fields
Joint Venture ("SGF") is an exploration alliance and project joint
venture agreement with Shandong provincial Bureau of Geo-Mineral
Exploration and Development. The co-operative joint venture is held
70 per cent by SGF of which Gold Fields has a 50 per cent share.
The joint venture with Zijin, of which Gold Fields share 60 per
cent, is to explore and develop gold properties in China's Fujian
province. We are currently active in several other regions of China
and it is hoped that Dr. Pan's extensive contacts in the country
will produce results during the coming months. OTHER PROJECTS Gold
Fields has been very active during the quarter on its extensive
inventory of exploration projects. Drilling was completed on the
Tanaso, Mampehia and Bomaa prospects within our 100 per cent owned
Bibiani project in Ghana. Over the last two years Gold Fields has
discovered extensive surface indications on this project that is
immediately adjacent to Newmont's Ahafo project. Based upon results
seen to date, it is hoped an initial resource statement at Mampehia
will be presented during the first quarter of F2005. Elsewhere in
Africa, a third phase of drilling was approved and is nearing
completion at the Essakane project in Burkina Faso. This joint
venture project would allow Gold Fields to earn up to a 60 per cent
interest from Orezone Resources. In South America, drill programmes
were completed at the Ca�icapa prospect in Ecuador as part of the
Condor joint venture with IAMGold. Drilling was also completed at
the Incapacha prospect that is a part of the Puquio joint venture
with Buenaventura. In North America, mobilisation of a new winter
camp and supplies has been completed at the Committee Bay joint
venture in Nunavut. A major drill programme will be completed over
the next two quarters on this attractive gold prospect. Corporate
matters BLACK ECONOMIC EMPOWERMENT TRANSACTION On 8 March 2004,
shareholders of both Gold Fields Limited ("Gold Fields") and
Mvelaphanda Resources Limited ("Mvela Resources") voted decisively
in favour of all shareholder resolutions necessary to implement the
transaction in terms of which Mvelaphanda Gold (Proprietary)
Limited ("Mvela Gold"), a wholly-owned subsidiary of Mvela
Resources, will acquire a 15 per cent beneficial interest in the
South African gold mining assets of Gold Fields, including the
world-class Beatrix, Driefontein and Kloof mines for a cash
consideration of R4,139 million. All conditions precedent to the
transaction were fulfilled following the completion by Mvela
Resources of a domestic and international private placement on 15
March 2004. Following completion of the private placement Mvela
Gold advanced a loan of R4,139 million ("the GFI-SA Loan") to GFI
Mining South Africa (Proprietary) Limited ("GFI-SA"), a wholly
owned subsidiary of Gold Fields, on 17 March 2004. This loan was
financed by way of commercial bank debt of approximately R1,349
million, mezzanine finance of R1,100 million (which includes R200
million from Gold Fields) and the balance of approximately R1,690
million raised by the Mvela Resources private placement, (which
includes R100 million of equity subscribed for by Gold Fields at
the book-build price). At the end of five years, the GFI-SA loan
will be repaid and Mvela Gold will subscribe for 15 per cent of the
share capital of GFI-SA. The proceeds of the GFI-SA Loan have been
applied towards settling R4.1 billion of the R4.7 billion payable
by GFI-SA to Beatrix Mining Ventures Limited, Driefontein
Consolidated (Pty) Limited and Kloof Gold Mining Company Limited
following implementation of the internal reorganisation pursuant to
which GFI-SA has acquired the gold mining assets of these companies
as well as ancillary assets. The net proceeds will be applied to
growth projects within South Africa and internationally. This will
include the growth projects in Ghana and Australia of R1.6 billion
(US$240 million), the Arctic Platinum project which requires
capital expenditure of approximately US$260 million (R1.8 billion)
where a decision is due by the end of the calendar year, as well as
the Cerro Corona project which requires US$125 million (R0.9
billion) for its development. The drop down projects in South
Africa, which access reserves below current infrastructure, could
also be part funded from these proceeds. Gold Fields believes that
this transaction satisfies the 15 per cent Historically
Disadvantaged South African ownership requirements of the scorecard
attached to the Broad Based Socio-Economic Mining Scorecard for the
South African mining industry and looks forward, following
implementation of this landmark BEE transaction, to working with
Mvela Resources to satisfy the other requirements of the scorecard.
In terms of the transaction, and in furthering its empowerment
objectives, Mvela Gold appointed two nominees out of a maximum of
seven to the GFI-SA board, and has appointed two members to each of
GFI-SA's Operations Committee and Transformation Committee, which
latter committee will be established to monitor compliance with the
Mining Charter and other transformation objectives. NORILSK BUYS
ANGLO AMERICAN'S 20 PER CENT STAKE IN GOLD FIELDS On 29 March 2004
Anglo American plc released details of the sale of its 20 per cent
stake in Gold Fields to MMC Norilsk. The purchase was effected
through Norilsk's wholly owned subsidiary Norimet Limited
("Norilsk"). Headquartered and listed in Moscow, as well as via ADR
programmes in New York, London and Berlin, Norilsk is a producer of
base and precious metals, with its main products being Nickel and
Palladium. After preliminary discussions with Norilsk it has been
agreed to explore the potential for co-operation with regards to
our respective gold assets. SALE OF DRIEFONTEIN'S 1C11 BLOCK As
previously reported in the September quarter, Gold Fields concluded
a transaction whereby Driefontein sold a block of ground, referred
to as block 1C11, to AngloGold for a consideration of R315 million.
Notwithstanding the fact that Competition Commission approval for
the sale had not been received, this being the only remaining
condition precedent, this transaction was included in the September
2003 quarterly results. Competition Commission approval was
subsequently obtained on 21 January 2004 and the transaction
completed on 20 February 2004 when payment was received. During a
review of our six monthly results the auditors highlighted the fact
that all conditions precedent relating to a transaction should be
fulfilled before a transaction can be accounted for, even despite
the fact that the Competition Commission approval for a transaction
of this nature was considered to be highly likely. Described in the
paragraph below is the impact on net earnings and net earnings per
share for the September 2003 quarter, the December 2003 half year
and the March 2004 quarter had the transaction been accounted for
in the March 2004 quarter as opposed to the September 2003 quarter.
The timing of the recording of the transaction had no impact on
headline earnings per share in any quarterly period nor on the
year-to-date results to March 2004. Net earnings and net earnings
per share, as reported in the September 2003 quarter, amounted to
R421.2 million and 89 cents respectively as compared with R181.0
million and 38 cents respectively had the sale been excluded. For
the six months ended 31 December 2003 the net earnings and earnings
per share were reported at R698.6 million and 146 cents
respectively as compared with R458.4 million and 95 cents
respectively had the sale been excluded. For the March quarter, net
earnings of R254.5 million would have increased to R494.7 million
and earnings per share would have increased from 51 cents per share
to 102 cents per share. If the sale was included in the March 2004
quarter instead of the September 2003 quarter, net earnings and net
earnings per share would have been unchanged for the nine months
year-to-date as at the end of March 2004. SCHOOL FUNDED BY GOLD
FIELDS OPENED BY NELSON MANDELA Gold Fields has an extensive
programme of community interaction and development in communities
where employees and their families live. Mnyakanya, a school in
Kwa-Zulu Natal, which was suffering from an acute lack of
facilities and amenities for both scholars and teachers, has been
given a R6 million extension by Gold Fields. This project is an
example of how Gold Fields is working with these communities to
build the future. Education is perhaps the greatest need of young
people in South Africa today and we, in Gold fields, are playing
our part in ensuring that as many as possible receive that
opportunity in conditions that are conducive to learning. During
the past two years Gold Fields has invested more than R100 million
into education, community development, healthcare, employment and
physical infrastructure projects in such communities. LEGAL There
have been no further developments to our earlier report in respect
of the law suit filed by Zalumzi Singleton Mtwesi ("Mtwesi")
against Gold Fields Limited in the Supreme Court of the State of
New York County of New York on 6 May 2003. In summary, Mtwesi and
the plaintiffs' class demand an order certifying the plaintiffs'
class and compensatory damages from Gold Fields Limited. The suit
has not been served on Gold Fields Limited. If and when service of
the suit takes place, it will be vigorously contested. Gold Fields
Limited will keep shareholders apprised of any future developments
in this matter. Outlook Gold production is expected to be slightly
higher in the June 2004 quarter due to increased production at both
the South African and International operations. Trading Statement
(for the year ending 30 June 2004 versus the year ended 30 June
2003) Shareholders are advised that the expected net earnings for
the financial year ending 30 June 2004 will be substantially lower
than the previous financial year mainly due to: * a reduction in
the gold price in rand terms from R97,060 per kilogram in the prior
year to R86,642 per kilogram in the current year based on the price
level prevailing at time of issuing this report; * an increase in
operating costs mainly due to above inflation wage increase in
South Africa and the effect of administered price increases; * a
reduction in gains on financial instruments and foreign debt and
cash as well as exceptional items, due to significant gains made in
the previous year; allied with a small reduction in gold produced.
The word "substantially" is defined by the JSE Securities Exchange
South Africa Listings Requirements as meaning a difference equal to
or greater than 30 per cent, "materially" means a difference
between 10 per cent and 30 percent and "significantly" means a
difference less than 10 per cent. The financial information on
which this trading statement is based has not been reviewed or
reported on by the company's auditors and shareholders are
therefore advised to exercise caution in trading in their Gold
Fields shares until the release of the results for the financial
year, which is expected during July 2004. Basis of accounting The
unaudited results for the quarter have been prepared on the
International Financial Reporting Standards (IFRS) basis except for
the sale of Driefontein 1C11 block detailed above. Year to date
figures are however in accordance with IFRS. The detailed
financial, operational and development results for the March 2004
quarter and nine months are submitted in this report. These
consolidated quarterly statements are prepared in accordance with
IFRS 34, Interim Financial Reporting. The accounting policies are
consistent with those applied at the previous year-end. FIRST ADD
-- SUPPLEMENTAL INFORMATION -- TO FOLLOW DATASOURCE: Gold Fields
Limited CONTACT: Investor Relations, Willie Jacobsz,
+27-11-644-2460, or Europe & South Africa, Nerina Bodasing,
+27-11-644-2630 or Fax, +27-11-484-0639, or , or North America,
Cheryl A. Martin, +1-303-796-8683, or Fax, +1 303 796-8293, , all
of Gold Fields Web site: http://www.goldfields.co.za/
http://www.gold-fields.com/
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