-Reviewed preliminary results-
Restructuring Delivering Results Increased Gold Production and Lower Costs
JOHANNESBURG, South Africa, July 29 /PRNewswire-FirstCall/ -- Gold Fields
Limited (NYSE & JSE: GFI) today announced June 2004 quarter headline earnings
of R129 million (26 cents per share) compared with headline earnings of R221
million (45 cents per share) in the March 2004 quarter and R494 million (104
cents per share) for the June quarter of 2003. The reduction in earnings is
largely gold price and exchange rate related and masks a solid operating
performance. In US dollar terms the June 2004 quarter headline earnings were
US$20 million (US$0.04 per share) compared with US$32 million (US$0.07 per
share) in the March 2004 quarter and US$64 million (US$0.14 per share) for the
June quarter of 2003.
June 2004 quarter salient features:
*Attributable gold production increased to 1,042,000 ounces;
*Total cash costs decreased 2 per cent to R66,218 per kilogram
(US$312 per ounce);
*Operating profit down 17 per cent to R545 million (US$83 million),
exclusively due to a 6 per cent reduction in the rand gold price to
R83,731 per kilogram (US$395 per ounce);
*Organic growth projects on track in Australia and Ghana;
*Write-down of R426 million (US$62 million) at Beatrix 4 shaft.
Year ended June 2004 salient features:
*Attributable gold production of 4,158,000 ounces;
*Total cash costs R67,075 per kilogram (US$302 per ounce) 9 per cent up on
previous year;
*Mvela transaction successfully concluded;
*Sale of Driefontein's block 1C11 to AngloGold for R315 million, yielding
a profit of R240 million net of taxation;
*Strong financial position provides platform for growth;
*Offshore organic growth projects announced.
Final dividend of 40 SA cents per share, giving a total dividend of 80 SA
cents per share for the year.
Ian Cockerill, Chief Executive Officer of Gold Fields said:
"While earnings were affected by the continued strengthening of the South
African currency during the quarter, Gold Fields again had a strong
operational performance overall.
Despite the strategic repositioning of the South African operations over
the past nine months, to counterbalance the strong rand, having had the
desired effect, further interventions are being put in place in anticipation
of a rand per kilogram price of below R80,000 per kilogram.
Overall, Gold Fields is in a good position with significant progress being
made, in particular, with the international growth projects in Ghana,
Australia, Peru and Finland. Furthermore, the exploration programme has during
the quarter delivered promising results with significant improvements in the
prospect of several projects.
During the quarter Gold Fields sent a technical team to Russia to conduct
visits at the Norilsk gold operations with a view to exploring the potential
for co-operation with regards to our respective gold assets. The process of
evaluating the results of this visit are underway, and initial results are
encouraging enough to continue this process."
SA Rand
Salient features Year ended Quarter
June June June March June
2003 2004 2003 2004 2004
Gold produced* kg 134,813 129,329 32,380 32,131 32,419
Total cash costs R/kg 61,766 67,075 63,369 67,528 66,218
Tons milled 000 42,988 46,028 10,925 11,815 11,076
Revenue R/kg 97,060 85,905 86,751 88,887 83,731
Operating costs R/ton 213 204 204 199 213
Operating profit Rm 4,741 2,315 717 656 545
Net earnings Rm 2,953 768 789 255 (186)
SA c.p.s. 626 158 167 51 (39)
Headline earnings Rm 2,393 763 494 221 129
SA c.p.s. 507 157 104 45 26
Net earnings
excluding gains
and losses on
financial
instruments and
foreign debt net
of cash and
exceptional items Rm 2,011 587 226 238 102
SA c.p.s. 426 121 48 48 21
US Dollars
Salient features Quarter Year ended
June March June June June
2004 2004 2003 2004 2003
Gold produced* oz (000) 1,042 1,033 1,041 4,158 4,334
Total cash costs $/oz 312 309 255 302 212
Tons milled 000 11,076 11,815 10,925 46,028 42,988
Revenue $/oz 395 407 349 387 333
Operating costs $/ton 32 29 26 30 23
Operating profit $m 83 96 100 336 523
Net earnings $m (25) 38 98 111 326
US c.p.s. (5) 7 21 23 69
Headline earnings $m 20 33 64 111 264
US c.p.s. 4 7 14 23 56
Net earnings
excluding gains
and losses on
financial
instruments and
foreign debt net
of cash and
exceptional items $m 16 34 34 85 222
US c.p.s. 4 7 8 18 47
*Attributable - All companies wholly owned except for Ghana (71.1%).
STOCK DATA
Number of shares in issue
- at end June 2004 491,480,690
- average for the quarter 491,431,716
Free Float 100%
ADR Ratio 1:1
Bloomberg / Reuters GFISJ / GFLJ.J
JSE SECURITIES EXCHANGE SOUTH AFRICA - (GFI)
Range - Quarter ZAR85.00 - ZAR65.02
Average Volume - Quarter 1,398,900 shares / day
NYSE - (GFI)
Range - Quarter US$13.40 - US$9.77
Average Volume - Quarter 1,188,600 shares / day
INVESTOR RELATIONS
Europe & South Africa
Willie Jacobsz Nerina Bodasing
Tel : +27 11 644-2460 Tel : +27 11 644-2630
Fax: +27 11 484-0639 Fax : +27 11 484-0639
E-mail: investors@goldfields.co.za
North America
Cheryl A. Martin
Tel: +1 303 796-8683
Fax: +1 303 796-8293
E-mail: camartin@gfexpl.com
http://www.goldfields.co.za http://www.gold-fields.com
Health and Safety
During the quarter the lost day injury frequency rate at the operations
improved from 13.8 to 11.9, the serious injury frequency rate improved from
6.5 to 5.9 and the fatal injury frequency rate unfortunately regressed from
0.15 to 0.26. While the improvement in total safety performance is
commendable, the deterioration in the fatal injury frequency rate is a source
of concern. Health and safety of our workforce is the most important aspect of
the business and continued focus will be given to initiatives aimed at
eradicating injuries and fatalities.
Beatrix achieved two million fatality free shifts during the quarter and
Beatrix 1,2 and 3 shafts in aggregate achieved one million underground
fatality free shifts. In addition, Damang and the Australian operations
continue to be fatality free, with Damang having recorded only one lost day
injury in sixteen months.
Financial Review
Quarter ended 30 June 2004 compared with quarter ended 31 March 2004
REVENUE
Attributable gold production increased marginally to 1.042 million ounces
for the June 2004 quarter compared with 1.033 million ounces achieved in the
March 2004 quarter. However, notwithstanding the higher production in the June
quarter, revenue at R2,869 million (US$434 million) was 5 per cent lower than
the March quarter's R3,028 million (US$444 million). This decrease was due to
a 6 per cent lower rand gold price. The gold price achieved for the June
quarter was R83,731 per kilogram (US$395 per ounce), compared with R88,887 per
kilogram (US$407 per ounce) in the March quarter. Apart from the impact of a
lower dollar gold price, the rand gold price was also affected by a
strengthening of the rand against the US dollar from an average of R6.79 to
R6.60 quarter on quarter.
OPERATING COSTS
Operating costs for the June quarter at R2,364 million (US$357 million)
increased 0.5 per cent compared with the March quarter's R2,351 million
(US$345 million) evidencing continued good cost control. Although costs at the
international operations of R711 million were virtually unchanged from the
R707 million reported in the March quarter, a cost increase at St Ives
associated with additional mining volume was offset by the impact of
translating costs at the international operations into South African rand at a
stronger local exchange rate. The increased mining volume at St Ives is
reflected in a credit to gold in process of R40 million (US$6 million)
compared with a gold in process charge in the March quarter of R22 million
(US$3 million), which was due to a gold in process release at the Australian
operations in the previous quarter.
OPERATING PROFIT MARGIN
The net effect of the lower revenue, despite lower costs after taking
account of gold in process movements, was an operating profit of R545 million
(US$83 million), 17 per cent lower than the R656 million (US$96 million)
achieved in the March quarter. The Group margin decreased to 19 per cent from
22 per cent in the March quarter and the South African margin decreased from
14 per cent to 9 per cent. This reduction in margin was virtually all due to
the lower price achieved. The margin at the international operations increased
to 36 per cent from 34 per cent in the March quarter.
AMORTISATION
Amortisation for the June quarter at R332 million (US$50 million) was 12
per cent higher than the March quarter's R298 million (US$44 million). This
increase was due to increased mining volumes at the international operations,
which carries a higher rate of amortisation than the local operations.
Amortisation at the South African operations was virtually unchanged.
OTHER INCOME
Net interest and investment income at R28 million (US$4 million) increased
from negative R4 million (US$1 million negative) quarter on quarter. This was
due to interest earned on the net Mvela cash receipts of R3.8 billion received
on 17 March, partly offset by the interest payable on the Mvela debt arising
from this transaction. Gains on foreign debt and cash amounted to R76 million
(US$11 million), compared with a loss of R34 million (US$5 million negative)
in the March quarter. Included in this income is an accounting exchange gain
of R86 million (US$12 million) on the settlement of an offshore inter-company
loan with no attendant cash flow implications, partly offset by an exchange
loss on offshore funds held in euros of R10 million (US$1 million). Euro 176
million is currently held offshore and arises from the capital raising
undertaken in November 2003. The loss on the euros is due to the strengthening
of the US dollar from 1.2270 euros to the US dollar at the start of the
quarter to 1.2175 at the end of June.
A loss on financial instruments of R71 million (US$10 million) was
incurred, which includes a loss on rand/US dollar forward cover of R19
million, and a marked to market loss on an interest rate swap of R52 million
(US$8 million). The interest rate swap was established in relation to the loan
from Mvela Gold, a wholly owned subsidiary of Mvela Resources and converted a
fixed interest rate exposure to a floating rate. This instrument was
established as short-term rates are significantly lower than long-term rates
and the resultant upward sloping yield curve is expected to prevail for some
time. Despite the marked to market loss associated with a change in the
profile of the five year yield curve, this strategy is yielding positive
results with an R18 million cash benefit in the period to end June 2004 and a
R12 million cash benefit locked in for the three month period to September
2004. More detail on these financial instruments is given on page 11 of this
report.
Other income reduced from a positive R26 million (US$4 million) to a
negative R31 million (US$4 million negative) in the June quarter. This change
was mainly due to gains realised on the exchange of exploration joint venture
interests for equity in the previous quarter along with positive adjustments
to the Group's post-retirement health care provisions in that period, together
with costs incurred during the current quarter associated with projects aimed
at optimising stores consumption and procurement practices in the Group and
restructuring costs in the Group's Shared Services division. To this end, an
e-auction on conveyor belting used as a pilot study has already resulted in an
annual saving of R10 million, which translates to a reduction of some 40 per
cent.
Exploration expenditure increased from R44 million (US$7 million) to R62
million (US$9 million) in the June quarter in line with the planned increase
in activity, mainly in West Africa and Latin America.
The exceptional loss of R432 million (US$62 million) is primarily as a
result of the impairment at Beatrix 4 shaft (formerly Oryx) of R426 million
(US$62 million) being R315 million (US$45 million) after the associated
taxation effect. The post write-down carrying value of Beatrix 4 shaft is R75
million. Last quarter's exceptional gain amounted to R21 million (US$3
million) and included profit on the sale of the remaining shares in Harmony
and Committee Bay, partly offset by the write-off of certain mineral rights.
TAXATION
A taxation credit of R124 million (US$18 million) was realised in the June
quarter compared with a charge of R64 million (US$9 million) in the March
quarter. This is mainly due to a deferred tax credit on the impairment at
Beatrix of R111 million (US$17 million) and a tax credit of R26 million on the
loss on financial instruments. Further deferred tax credits of R76 million
were generated due to increases in unredeemed capital expenditure balances at
all of the South African operations. This was partially offset by a R30
million (US$5 million) deferred tax charge as a consequence of the Mvela
transaction.
EARNINGS
After accounting for minority interests, a loss of R186 million (US$25
million) was incurred or negative 39 SA cents per share (US$0.05 per share
negative), compared with earnings of R255 million (US$38 million) or 51 SA
cents per share (US$0.07 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, amounted to R129 million (US$20
million) or 26 SA cents per share (US$0.04 per share) compared with R221
million (US$32 million) or 45 SA cents per share (US$0.07 per share) last
quarter. The main reason for this decrease was the fall in net operating
profit associated with lower achieved prices received in the June quarter.
Earnings, excluding exceptional items as well as net gains on financial
instruments and foreign debt net of cash after taxation, amounted to R102
million (US$16 million) or 21 SA cents per share (US$0.04 per share) compared
with R238 million (US$34 million) or 48 SA cents per share (US$0.07 per share)
achieved last quarter.
CASH FLOW
Cash flow from operating activities for the quarter was R436 million
(US$66 million), compared with operating cash flow in the March quarter of
R528 million (US$77 million). The decrease reflects the decline in operating
profit.
Capital expenditure was R938 million (US$139 million) compared with R749
million (US$109 million) in the March quarter. The increase is mainly due to
increased expenditure on organic growth projects in Ghana and Australia. R185
million (US$33 million) was expended at the South African operations. This is
an increase of R32 million (US$5 million) over the previous quarter, the
majority at Kloof 4 shaft. The Australian operations incurred capital
expenditure of R308 million (A$83 million). The mill project at St Ives
accounted for R224 million (A$45 million) of this expenditure as compared to
R91 million (A$19 million) in the March quarter. The balance on this project,
the majority of which will be spent during the September quarter, amounts to
A$61 million. At the Ghanaian operations, capital expenditure amounted to R401
million (US$67 million). R361 million (US$58 million) was spent on the new
mill and on the project to convert from contract mining to owner mining. This
compares with R263 million (US$43 million) in the previous quarter. The
balance on these projects, the majority of which will be spent in the next two
quarters, amounts to US$30 million. 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
quarter.
Net cash outflow for the quarter was R497 million (US$74 million). The
cash balance at the end of the June quarter was R4,135 million (US$656
million) compared with R4,701 million (US$721 million) at the end of the March
quarter.
Detailed and Operational Review
Group Overview
Attributable gold production for the June 2004 quarter increased
marginally to 1,042,000 ounces when compared with the March quarter.
Attributable production from the international operations was virtually
unchanged at 342,000 ounces, which is approximately one third of the Group's
total attributable production.
Production from the Australian operations increased 6 per cent to 196,300
ounces this quarter due to increased volumes from St Ives. Operating profit
from the Australian operations increased 34 per cent to R159 million (A$33
million, US$24 million) for the quarter, primarily as a result of the
increased production and increased gold price. The gold price in Australian
dollars increased 4 per cent from A$536 per ounce to A$556 per ounce quarter
on quarter. The Ghanaian operations showed a 5 per cent decrease in
attributable gold production to 146,200 ounces, partly due to reduced ore
volumes associated with lack of flexibility in the pits exacerbated by poor
equipment availability. Ghana contributed operating profit of R224 million
(US$34 million), a 15 per cent decrease on the previous quarter's operating
profit. The reduced operating profit is due to the decrease in gold production
and the cost of accelerated stripping at Tarkwa.
The international operations contributed R383 million (US$58 million) of
the total operating profit of R545 million (US$83 million) or 70 per cent,
compared with R382 million (US$56 million) of the total operating profit of
R656 million (US$96 million) or 58 per cent last quarter.
At the South African operations, production was 699,700 ounces, similar to
the previous quarter. The decrease at Beatrix related to lost days due to the
elections and the Easter break, was offset by a 3 per cent increase in output
at Kloof due to an increase in underground tonnage. Operating profit at the
South African operations decreased from R274 million (US$40 million) to R163
million (US$25 million) mainly as a consequence of the lower gold price.
Group ore milled decreased from 11.82 million tons to 11.08 million tons
due to an 11 per cent decrease in surface tons, mainly at Beatrix, Tarkwa and
St Ives. The overall yield increased from 2.9 grams per ton in the March
quarter to 3.1 grams per ton in the current quarter. Total cash costs in rand
terms decreased from R67,528 per kilogram to R66,218 per kilogram quarter on
quarter mainly as a result of the increased production. In US dollar terms,
total cash costs were virtually unchanged at US$312 per ounce compared with
US$309 per ounce. Operating cost per ton at R213 increased from R199 last
quarter due to the lower surface tonnage.
South African Operations
During the September 2003 quarter management took a view that the South
African currency would remain stronger for longer. As a result it was decided
to reposition the South African operations. This was presented as reverting
from the "Wal-Mart" strategy (more volume at lower grade) to the "SAKS 5th
Avenue" strategy (less volume at higher grade).
To support this switch in strategy, management introduced an initiative
called Project 500, which, in turn, was split into two sub-projects called:
Project 400 and Project 100.
Project 400 aims to optimise revenue such that an additional R400 million
is generated per annum. The aim is to improve the quality and quantity of our
outputs by replacing surface tonnage to the plant with increased tonnage from
underground and ensuring output of a better quality, by mining the higher
grades at marginally reduced volume.
This strategy has started to deliver results as was evidenced in the March
quarter at Kloof and Driefontein, which both reported increased underground
grades, and has continued into this quarter.
It should be emphasised that the operations are producing in line with the
proven reserve grades for life of mine. Naturally, paylimits have to change to
reflect current earnings and despite some ill-informed market commentary, Gold
Fields continues to prudently manage its ore reserves and is not high grading
as the table below clearly shows.
Quarter ended Sep Dec Mar Jun
2003 2003 2004 2004
Driefontein:
Life of mine head grade
as per the 2003
annual report 8.7 8.7 8.7 8.7
Life of mine head grade
adjusted for estimated
metallurgical recoveries 8.4 8.4 8.4 8.4
Driefontein (underground
yields achieved) 8.1 7.5 8.6 8.5
Kloof:
Life of mine head grade
as per the 2003
annual report 9.8 9.8 9.8 9.8
Life of mine head grade
adjusted for estimated
metallurgical recoveries 9.5 9.5 9.5 9.5
Kloof (underground yields
achieved) 8.1 8.6 10.0 9.5
Beatrix:
Life of mine head grade
as per the 2003
annual report 5.1 5.1 5.1 5.1
Life of mine head grade
adjusted for estimated
metallurgical recoveries 4.9 4.9 4.9 4.9
Beatrix (underground
yields achieved) 4.4 4.7 4.5 4.7
Project 100 is designed to save a minimum of R100 million a year from
improved standards and norms by reducing wastage and making sure that the
mines use only what is required for a successful blast.
Having carefully examined the prospects for Project 100 it soon became
clear that initial estimates of R100 million savings were conservative.
Consequently, the bar has been raised and Gold Fields is also aiming to
achieve R200 million to R300 million in savings per annum from improved
procurement practices in the medium term. The group spends in excess of R3
billion on materials and services, of which R1.5 billion is spent on materials
used on the mines and more than R1.4 billion is spent on total services
provided. The aim is to reduce procurement spend by 7 to 10 per cent by
improving efficiencies, leveraging off Group buying power and adopting
strategic sourcing techniques. Forming business partnerships with suppliers,
entering into risk reward type sharing arrangements, increasing supply
coverage, as well as rationalising vendors without compromising on quality,
would be some of the aspects considered in this regard.
Over the past 15 months Gold Fields has reduced total stores inventory by
some 30 per cent. This was achieved by combining all the stores into one on
the West Wits. This rationalisation of stores has resulted in a reduction in
line items from 16,000 to 3,000. Vendor price increases have been controlled
at between one and two percent below PPI and there has been a marked reduction
in vendors, from 3,000 to the current 870.
Project 500 will reinstate more respectable margins at current prices and
aims to achieve the following at Driefontein, Kloof and Beatrix:
Driefontein
* Mine in a range of between 1,900 and 2,100 centimetre grams per ton
("cmg/t"). This translates to an estimated underground recovered yield
of above 8.0 grams per ton.
* Implement restructuring and cost saving measures of R2.0 million per
month.
* Maintain the production profile at + 1 million ounces per annum.
Kloof
* Mine in a range of between 2,200 and 2,350 cmg/t. This translates to
an estimated underground recovered yield of above 9.0 grams per ton.
* Implement restructuring and cost saving measures of R2.0 million per
month.
* Maintain the production profile at + 1 million ounces per annum.
Beatrix
* Mine in a range of between 1,000 and 1,100 cmg/t at number 1, 2 and 3
shafts and in a range of between 1,400 and 1,500 cmg/t at number 4
shaft. This translates to an estimated combined underground recovered
yield of 4.8 grams per ton.
* Implement restructuring and cost saving measures of R1.5 million per
month.
* Maintain the production profile of +600 thousand ounces per annum.
A full explanation of project 500 can also be found on the Gold Fields
website - http://www.goldfields.co.za
General
The South African operations have, over the past 48 months undergone
extensive restructuring and renewal to reposition for the future. On each of
our operations, we have invested significantly in the construction and
development of new long life shafts. At Driefontein, capital has been invested
into 5 east and 1 tertiary shafts; at Kloof the new 4 shaft; and Beatrix the
new 3 shaft. In addition, our metallurgical plants have been upgraded.
Environmental conditions at all shafts have and are being improved through the
on going lowering of temperatures, and infrastructure bottlenecks are being
resolved. Over this period Gold Fields has also invested significantly in the
development of its ore bodies, with all the key long life shafts now having an
average of 20 months of mineable developed ore reserves in place.
Occupational health care services are made available by Gold Fields
employees from its existing facilities. There is a risk that the cost of
providing such services could increase in the future depending upon changes in
the nature of underlying legislation and the profile of employees. This
increased cost, should it transpire, is currently indeterminate. The Group is
monitoring developments in this regard.
DRIEFONTEIN
June March
2004 2004
Gold produced - 000'ozs 290.3 289.6
Yield - underground - g/t 8.5 8.6
- overall - g/t 5.6 5.4
Total cash costs - R/kg 67,372 67,607
- US$/oz 317 310
Production at Driefontein at 290,300 ounces was similar to the previous
quarter. Underground tonnage increased 11 per cent from 838,000 tons to
927,000 tons. This was due to the impact of the Christmas break last quarter.
The underground yield achieved was 8.5 grams per ton, which was in line with
the previous quarter. Surface tonnage was 15 per cent lower at 695,000 tons
due to lower volumes from surface clean up, in line with our forecast. Surface
yields decreased from 2.2 grams per ton to 1.7 grams per ton for the quarter
following the conclusion of processing of high grade material and plant clean
up.
Operating costs were virtually unchanged at R637 million (US$96 million)
despite the increase in underground volumes. Total cash costs in rand terms
were marginally below the March quarter at R67,372 per kilogram and increased
2 per cent in US dollar terms to US$317 per ounce due to the stronger rand.
Operating profit was down from R158 million (US$23 million) in the March
quarter to R121 million (US$18 million) in the June quarter as a result of the
lower gold price received.
Capital expenditure amounted to R40 million (US$7 million) compared with
R29 million (US$6 million) in the March quarter. As a result of the lower gold
price and reduced earnings, capital expenditure continues to be reprioritised
and non crucial items deferred.
Gold output in the September quarter is expected to be marginally lower
than the June quarter. This is due to increased seismicity in July at 5 east
shaft, lower flexibility resulting from the stoppage of marginal areas and the
conclusion of plant clean up. Improvements to ventilation will enable
increased face length going forward, resulting in improved flexibility. This
should result in a steady production performance over the remainder of the
year. Costs will increase by some 3 per cent due to the annual wage increase,
effective from July.
KLOOF
June March
2004 2004
Gold produced - 000'ozs 259.2 250.9
Yield - underground - g/t 9.5 10.0
- overall - g/t 6.6 6.4
Total cash costs - R/kg 74,191 75,920
- US$/oz 350 348
Gold production at Kloof increased 3 per cent to 259,200 ounces in the
June quarter from 250,900 ounces in the March quarter. Underground tonnage
increased 10 per cent to 818,000 tons this quarter from 744,000 tons in the
March quarter, which was negatively affected by the extended Christmas break.
Surface tons decreased from 483,000 tons to 407,000 tons as a result of the
increased underground volumes. The underground yield has as planned
decreased from 10.0 grams per ton last quarter to 9.5 grams per ton this
quarter, with the combined yield increasing from 6.4 grams per ton to 6.6
grams per ton, due to the improved mix from the higher grade underground
tonnage.
Operating costs at R621 million (US$94 million) for the quarter were
virtually unchanged when compared with the previous quarter's costs of R617
million (US$91 million). Total cash costs at R74,191 per kilogram were 2 per
cent lower than the previous quarter's R75,920 per kilogram. In US dollar
terms total cash costs were virtually unchanged at US$350 per ounce. Operating
profit decreased by one third to R49 million (US$7 million) compared to R75
million (US$11 million) the previous quarter due to the lower gold price
received this quarter.
Capital expenditure increased from R57 million (US$10 million) in the
March quarter to R76 million (US$14 million) in the June quarter. The majority
of this expenditure was on reprioritising and accelerating the capital at 4
shaft.
The gold production outlook for the September quarter is expected to be
slightly up on the June quarter, with operating costs forecast to increase
some 3 per cent due to the annual wage increases.
BEATRIX
June March
2004 2004
Gold produced - 000'ozs 150.2 154.7
Yield - underground - g/t 4.7 4.5
- overall - g/t 3.8 3.3
Total cash costs - R/kg 81,978 78,143
- US$/oz 386 358
Gold production at Beatrix decreased 3 per cent from 154,700 ounces in the
March quarter to 150,200 ounces in the June quarter. Underground ore was down
3 per cent from 1,003,000 tons to 968,000 tons due mainly to the impact of the
public holidays over Easter, the election break and a one day work stoppage
because of the implementation of an internal restructuring programme to reduce
costs. Underground yields increased marginally to 4.7 grams per ton. In
particular, 2 shaft and 4 shaft have seen positive volume and grade
improvements and are well positioned for the coming quarter. The stoping and
development build up at 3 shaft, as well as accompanying exploration drilling
is progressing well and results are in line with forecast. Beatrix experienced
lower mine call factors (MCF) during the past two quarters and specific focus
has been applied towards improved quality of sweepings, water usage and
fragmentation. Surface tons decreased significantly from 450,000 tons to
254,000 tons as last quarter included surface tons milled over the Christmas
break. The surface yield remained at the March quarter level of 0.6 grams per
ton and this is the forecast going forward.
Operating costs increased from R390 million (US$57 million) to R395
million (US$60 million) and total cash costs increased 5 per cent from R78,143
per kilogram (US$358 per ounce) to R81,978 per kilogram (US$386 per ounce) due
to the lower gold production. An operating loss of R7 million (US$1 million)
was incurred due to the lower production and the previously discussed lower
gold price, as compared with a profit of R40 million (US$6 million) in the
March quarter.
Beatrix 4 shaft (formerly Oryx) was impaired R426 million (US$62 million)
during the quarter, with the after tax effect amounting to R315 million (US$45
million). The impairment was based on a calculated net present value, using a
gold price of R90,000 per kilogram at a real discount rate of 5 per cent. The
carrying value of Beatrix 4 shaft after the write-down is R75 million.
Capital expenditure amounted to R69 million (US$12 million), similar to
the March quarter. The majority of this expenditure was spent on development
at 3 shaft and the Sand River block adjacent to 4 shaft.
Gold production will be flat for the September quarter due to cessation of
toll milling at Joel, who have given notice that they will stop our toll
treatment at the end of July 2004. Costs will be affected by the July wage
increase which has an impact of approximately 3 per cent on total working
costs.
International Operations
Ghana
TARKWA
June March
2004 2004
Gold produced - 000'ozs 123.1 137.4
Total cash costs - US$/oz 251 237
Tarkwa's June quarter gold production was disappointing at 123,100 ounces,
down 10 per cent on the previous quarter, contrary to expectations reported
previously. This drop in gold production was primarily due to a reduction in
ore mining volumes and thus recoverable ounces that were stacked on the leach
pads, particularly in the April and May months. Mined grade was stable quarter
on quarter at 1.44 gram per ton. The drop in ore mining rate was caused by a
lack of flexibility in the open pits, in particular the availability of ores
in the high grade pits, compounded by mining equipment availability. The
former problem is being resolved with additional waste stripping that was
pursued during the quarter. The strip ratio in the June quarter was 3.4
against 2.7 in the March quarter. The equipment availability will clearly be
addressed by the conversion to owner mining and the associated commissioning
of a new mining fleet that was largely complete by month end (refer later in
this report for details of the Owner Mining Project). By quarter end the
mining operations had improved significantly and have continued to do so to
the time of reporting. The increased flexibility and build up in volumes from
the new mining fleet resulted in increased tonnage through the crushing plants
towards the end of the quarter at higher grades, but too late to recover the
gold from the heaps by quarter end. This resulted in an increase in gold in
process of 8,255 ounces.
Operating costs at US$31 million (R219 million), including gold in process
adjustments, were slightly lower than the previous quarter despite total
mining volumes being some 2.3 million tons ahead of that mined in the previous
quarter, at 18.5 million tons. Operating costs were US$8.63 per ton against
US$8.06 per ton in the March quarter, primarily reflecting the increase in
stripping ratio. With the head grade stable, the higher strip ratio and lower
gold volumes translated into a 6 per cent increase in total cash costs to
US$251 per ounce. The net result was a drop in operating profit from US$23
million (R159 million) to US$18 million (R116 million).
The majority of the increase in capital expenditure, from US$45 million
(R281 million) to US$65 million (R392 million) in the June quarter reflects
expenditure on the major projects i.e. the mill construction and owner mining
projects. Refer to Tarkwa Expansion Project commentary.
Gold production is expected to increase in the September quarter, closer
to levels seen in the March quarter, subject to gold in process movements,
which remain difficult to predict. Operating costs in the September quarter
are expected to be lower than the current period as a result of the transition
to owner mining, reaching completion in this period
DAMANG
June March
2004 2004
Gold produced - 000'ozs 82.5 78.1
Total cash costs - US$/oz 205 219
Gold production for the quarter increased to 82,500 ounces compared to
78,100 ounces in the March quarter. This reflects a 7 per cent increase in
mill throughput to 1,391,000 tons this quarter, a record performance, with the
head grade stable at 2.1 grams per ton. The March quarter included a
maintenance shut down. The tons mined decreased by 9 per cent to 3.6 million
tons, with the stripping ratio reducing from 1.82 to 1.71.
Operating costs quarter on quarter including gold in process adjustments
were flat at US$17 million (R113 million), with the reduction in mining
volumes and costs offset by the increase in milling volumes and costs. Unit
costs per ton treated therefore decreased to US$12.24 per ton from US$13.05
per ton in the March quarter. Total cash costs however reduced from US$219 per
ounce to US$205 per ounce quarter on quarter, as a result of the increase in
gold production. The net result was an increase in operating profit to US$16
million (R107 million) from US$15 million (R104 million) in the previous
quarter.
Capital expenditure of US$1.5 million (R9 million) was spent during the
quarter, mainly on drilling at Abosso Deeps and the Damang Extension Project.
Refer Damang Extension Project commentary.
Gold production is expected to be considerably lower in the September
quarter with the expected reduction in high grade sources of ore at Damang,
particularly the Damang pit, which was due for depletion in the middle of the
F2005 year. There will be a concomitant effect on unit costs.
Australia
ST IVES
June March
2004 2004
Gold produced - 000'ozs 143.6 131.8
Total cash costs - A$/oz 422 442
- US$/oz 304 338
Gold production for the quarter increased 9 per cent to 143,600 ounces
when compared to 131,800 ounces produced in the March quarter. This increase
largely reflects a substantial improvement in head grades to the St Ives mill
and toll treatment facility. (The March quarter included a maintenance
shutdown at the mill). The improvement in grade reflects resolution of the
grade recovery problems reported in the March quarter in the Mars open pit but
also the ongoing increase in the volume of high grade ores from the new
underground mines, particularly the Argo mine, while the Junction mine also
performed well. Toll treatment delivered some 33,000 ounces, from 325,000 tons
treated for the quarter, against 26,000 ounces in the March quarter. The
decrease in ore volumes treated from 1.72 million tons to 1.49 million tons,
is largely due to a reduction in tonnage at the heap leach plant, as that
plant's crusher had to be used to augment volumes through the St Ives mill
crusher, due to problems with the mantle and bowl in that unit. This was
resolved by quarter end.
Operating costs, including gold in process adjustments, were marginally
lower at A$59 million (R281 million; US$43 million) compared with the March
quarter's A$60 million (R310 million; US$45 million). Total cash costs
decreased from A$442 per ounce (US$338 per ounce) to A$422 per ounce (US$304
per ounce), reflecting the increase in gold production.
Operating profit from St Ives amounted to A$21 million (R99 million; US$15
million) compared to A$11 million (R58 million; US$9 million) achieved in the
March quarter, reflecting the increase in sales volumes and a 3 per cent
increase in received price to A$556 per ounce.
Capital expenditure for the June quarter amounted to A$75 million (R284
million; US$48 million) compared with A$50 million (R239 million; US$39
million) in the March quarter. The majority of this expenditure was incurred
on the mill optimisation project (see below for more detail) and expenditure
at Mars pit to bring it to full production.
St Ives completed the toll treatment programme according to plan at the
end of the June quarter. Consequently, gold production from this mine will be
lower in the September quarter, though not to the extent of the full tolling
volumes. The tolling program was undertaken in F2004 to augment cash flows and
support gold production given the ramp up in production from the new
underground sources and the uncertainties on the Junction mine. However, the
cost of toll treatment is more than twice that of treating ore through the new
St Ives mill. With that plant due for commissioning by the end of the December
Quarter, further tolling was considered imprudent from a value point of view.
The surface mining fleet, which had produced the majority of ore for toll
treatment will continue to operate at full capacity of 800,000 to 900,000
bcm's per month, with the stripping of the Mars and Pluton pits consuming the
additional mining capacity. Total cash costs should continue to improve
incrementally in the coming quarter with the ongoing improvement in the new
underground mines. The full benefits of the mill will only be seen in the
middle of F2005.
AGNEW
June March
2004 2004
Gold produced - 000'ozs 52.7 52.8
Total cash costs - A$/oz 306 304
- US$/oz 221 233
Gold produced at Agnew for the quarter was constant at 52,700 ounces,
contrary to previous forecasts. These forecasts had assumed a significant
reduction in the volume of mining from the Crusader/Deliverer underground
mine, This mine, which mined 10,000 ounces in the quarter against 14,000
ounces in the March quarter, remains in a scale down mode and operations are
now largely focused on remnant recovery which is difficult to predict. The Kim
underground mine performed exceptionally well, producing some 37,000 ounces,
offsetting the reduction at Crusader. The low grade stockpiles contributed a
stable 10,000 ounces to the mill feed.
Operating costs, including gold in process charges, were unchanged at A$16
million (R79 million; US$12 million). Total cash costs increased marginally to
A$306 per ounce, while decreasing 5 per cent in US dollar terms to $221 per
ounce due to the weaker Australian dollar.
Agnew's contribution to operating profit was A$13 million (R61 million;
US$9 million), similar to the March quarter.
Capital expenditure increased to A$8 million (R24 million; US$4 million)
from A$7 million (R30 million; US$5 million) the previous quarter. Expenditure
was incurred on pre-production development at Main Lode underground and
metallurgical upgrades.
Gold production in the September quarter is expected to be lower than the
June quarter as production from the Crusader/Deliverer declines. Unit costs
will be affected accordingly.
Quarter ended 30 June 2004 compared with quarter ended 30 June 2003
Attributable gold production was unchanged at 1,042,000 ounces in the June
2004 quarter compared with the June 2003 quarter. Slightly lower production at
the South African operations was offset by an increase at the international
operations.
Revenue decreased 3 per cent in rand terms (increased 13 per cent in US
dollar terms) from R2,971 million (US$383 million) to R2,869 million (US$434
million).
This was due to a reduction in the rand gold price achieved from R86,751
per kilogram (US$349 per ounce) in the June 2003 quarter to R83,731 per
kilogram (US$395 per ounce) in the June 2004 quarter. Group operating costs in
rand terms increased by 6 per cent or R140 million (US$77 million) to R2,364
million (US$357 million). At the South African operations operating costs
increased by only 5 per cent or R83 million (US$53 million) despite an
effective 13 per cent wage increase from 1 July 2003. The increase at the
international operations amounted to 9 per cent, from R654 million (US$83
million) to R711 million (US$107 million). This increase resulted from
increased volumes mined in Australia and an increase in waste mined at Tarkwa
to improve mining flexibility. Partially offsetting this is the effect of
translating costs at Ghana into South African rand at a 15 per cent stronger
rand/US dollar exchange rate than the corresponding quarter in the previous
year. The average exchange rate strengthened from R7.74 to the US dollar in
the June 2003 quarter to R6.60 in the current quarter. The effect of
translating costs at the Australian operations was small, with the average
exchange rate strengthening from ZAR4.89 to ZAR4.75 rand to the Australian
dollar in comparative periods.
Operating profit at R545 million (US$83 million) for the June 2004 quarter
compares to R717 million (US$100 million) for the June 2003 quarter as a
result of the above factors.
Loss before tax amounted to R279 million (US$38 million) compared with a
pre- tax profit of R968 million (US$124 million) in the June 2003 quarter.
This decrease was due to the lower operating profit described above as well as
a loss on financial instruments of R71 million (US$10 million) compared to a
gain in the June 2003 quarter of R311 million (US$35 million) and an
exceptional loss of R432 million (US$62 million) compared to an exceptional
gain of R272 million (US$31 million) in the June 2003 quarter.
Earnings decreased from R789 million (US$98 million) in the June 2003
quarter to a loss of R186 million (US$25 million) in the June 2004 quarter.
Year ended 30 June 2004 compared with year ended 30 June 2003
Attributable gold production decreased 4 per cent from 4,334,000 ounces to
4,158,000 ounces due to a reduction at the South African operations from
3,081,000 ounces to 2,804,000 ounces. Production at the international
operations increased by 8 per cent from 1,253,000 ounces to 1,354,000 ounces
year on year. The decline at the South African operations is due to lower
grades and the sale of St Helena. St Helena accounted for 43,700 of these
ounces. Gold output from Kloof and Driefontein decreased by 120,000 ounces and
105,000 ounces respectively. International operations performed well during
the period with Agnew having a spectacular year.
Revenue decreased by 15 per cent in rand terms (increased 11 per cent in
US dollar terms) from R13,893 million (US$1,532 million) to R11,773 million
(US$1,706 million). This was due to the decrease in production and a decrease
in the gold price, from R97,060 per kilogram (US$333 per ounce) to R85,905 per
kilogram (US$387 per ounce) for the year ended 30 June 2004.
Operating costs increased 3 per cent from R9,142 million (US$1,008
million) to R9,411 million (US$1,364 million). However, due to the lower
production, total cash costs increased 9 per cent to R67,075 per kilogram from
R61,766 per kilogram in the prior period. The increase in operating costs at
the South African operations of 6 per cent was offset by the lower costs at
the International operations, as a result of translating the Ghanaian
operations at a 24 per cent stronger rand, which strengthened from an average
of R9.07 to R6.90 to the US dollar year on year. The 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
5.29 to 4.92 rand to the Australian dollar.
Operating profit was R2,315 million (US$336 million), which decreased from
R4,741 million (US$523 million) for the year to 30 June 2003. Profit before
tax amounted to R978 million (US$142 million) down from R4,445 million (US$490
million) for the same period last year due to the lower operating profit
described above and the effect of the following items. Gains on financial
instruments of R129 million (US$19 million) decreased 72 per cent from R461
million (US$51 million) for the year to June 2003. Finance income of R29
million (US$4 million) decreased from R158 million (US$18 million) in the
prior period. The exceptional gains last year were R572 million (US$63
million) compared with the current year's loss of R176 million (US$26
million).
Net earnings were reduced from R2,953 million (US$326 million) to R768
million (US$111 million) for the current year to 30 June 2004.
Capital and development projects
ST IVES EXPANSION PROJECT
All aspects of the St Ives new mill project progressed satisfactorily
during the quarter with the overall project schedule and budget remaining on
target. Of significant note during the quarter were the completion of all the
large civil foundations and the installation of the 36 foot diameter SAG mill.
Installation of the gearless drive and electrical motor components commenced
in July 2004. Civil construction and earthworks are largely complete while
leach tank and thickener construction reached some 80 per cent in the quarter.
Equipment procurement is now complete with attention focussing on
expediting the ordered items. While delivery of the gyratory crusher remains
on the critical path, commissioning is still expected by the end of the second
quarter of F2005.
Capital expenditure and commitment on the project at the end of the June
quarter totalled A$65 million and A$95 million respectively against the
overall approved budget of A$125 million. Actual expenditure for the June
quarter was A$45 million.
TARKWA EXPANSION PROJECT
CIL Process Plant
During the quarter, this project continued to track ahead of schedule. In
particular, the new crusher was commissioned and brought on line to crush ore
for the north leach plant, while that plant's crusher has been taken off line
for upgrading. Further, erection of the leach tanks was completed while the
SAG mill shell was assembled, and by quarter end was ready for drive and liner
installation. Other key focus areas included mechanical and piping
installation reaching some 66 per cent and 33 per cent respectively, and
electrical and instrumentation at some 28 per cent complete. The tailings
storage facility construction continues to advance satisfactorily with the
majority of the embankment at final height.
At this stage cold commissioning is expected during the September quarter
and mill commissioning on ore due in the December quarter. The project is
still forecast to completion within the Feasibility capital costs of US$85
million, excluding some US$6 million of foreign exchange exposures on the
Project. To date US$78million has been spent.
Conversion to owner mining
A smooth transition from contract mining to owner mining took place on 25
June. At this time all operating and support staff have been transferred from
the contractor to Tarkwa's employment while 17 haul trucks, 5 excavators and 5
drill rigs have been brought into operation. The build up of the remaining
fleet will occur in the coming quarter. The contractor has been retained to
provide back- up mining volumes to Tarkwa's new mining fleet during the
September quarter.
During the June quarter expenditure on this project more than doubled to
US$36 million, and outstanding expenditure on this project is some
US$17million, due in the coming quarter. This project has been successfully
executed, both within budget and on schedule, reflecting the commitment and
planning of the mine team but also that of the workforce, (AMS) - the current
contract miner, and the new equipment vendors and service suppliers.
ARCTIC PLATINUM PROJECT
Activity at APP continued to focus on the two large tonnage open pittable
deposits at Suhanko, namely Konttijarvi and Ahmavaara. The Environmental
Permit Application for the Suhanko project was submitted to the Northern
Permitting Authority in Oulu in mid June. Exploration work was focused on
interpretation and modelling of the year's drilling results. Resource models
based on the new information are scheduled for completion at the end of July.
A bulk sample of 5,300 tons was mined from the two deposits during the
June quarter. The sample was transported to the pilot plant and processing at
the pilot scale commenced. The pilot plant has so far successfully
demonstrated continuity of the process at this scale and has produced batches
of bulk concentrate for downstream processing test work. The pilot scale
concentrator campaign and the subsequent downstream treatment test work remain
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
with permitting expected to be completed in the first half of 2005.
DAMANG EXPANSION PROJECT
As previously reported, a dedicated project team was mobilised earlier
this year to evaluate the various options for the Damang operation arising
from the exploration programmes undertaken through to the end of December
2003. This evaluation has indicated that ores from the Rex, Amoanda and
Tomento orebodies could add an additional year of life to this mine. While
this aspect is disappointing, the most important outcome of this project has
been the definition of additional high grade ore in a possible cut back of the
Damang pit, which has the potential to add a further 300,000 to 400,000 ounces
to mineable inventory at Damang. Detailed drilling of this option is still
underway.
Exploration drilling of the Abosso Deeps also commenced during this
quarter. This target comprises a narrow reef conglomerate target located in
the southern end of the Damang lease area, on strike from the old Abosso
underground mine.
While permitting and community negotiations regarding exploitation of the
Rex and Amoanda orebodies has progressed well it is unlikely either of them
will be brought to production in the second half of the financial year.
Similarly, the lead time on detailed drilling of the Damang pit cut back is
unlikely to be undertaken in the next two quarters and so the benefits of
these options will only be seen in the second half of F2005.
Exploration and Corporate Development
CERRO CORONA IN PERU
Following the successful completion of due diligence review of the Cerro
Corona project in the March Quarter, project development activities have moved
into full swing. The critical path to a decision on this project is the
environmental permitting, and during the quarter the baseline environmental
study was updated while community relationship building exercises were
advanced. In parallel, the feasibility study of this project is being
revisited, and all aspects of the study were mobilised in this period.
At this stage permitting is expected to be completed in the 4th quarter of
2005, facilitating an investment decision then.
FURTHER CHINA VENTURES
Activities continued in China during the quarter with government approvals
being received for the formation of the Heishan joint venture (70 per cent
Sino GFI joint venture and 30 per cent Shandong Bureau of Geology and Mineral
Resources) and the agreement to option an interest in the Sandi joint venture
(80 per cent Sino GFI joint venture and 20 per cent Shandong MMI), both a
result of activities generated by the Sino Gold - Gold Fields Shandong joint
venture. In Fujian province, an agreement was reached with Fujian Zijin Mining
Corporation for further cooperation on gold exploration in that province.
OTHER PROJECTS
During the quarter Gold Fields completed drilling on eight of its
extensive inventory of exploration projects.
Gold Fields continues to be very active in the African exploration region.
A 25,000 metre drilling programme continued on the Mampehia prospect 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, we are hopeful of presenting an initial resource statement at Mampehia
during the first quarter of F2005. Elsewhere in Africa, a third phase of
drilling was approved and nearly completed at the Essakane project in Burkina
Faso and significant results were reported by our joint venture partner
Orezone Resources Inc. This joint venture project would allow Gold Fields to
earn up to 60 per cent interest from Orezone Resources. A drill programme was
also completed and a second phase programme initiated on the Mansounia
prospect in Guinea, a joint venture with Afminex Limited. Drilling was also
completed at the 80 per cent owned Kisenge prospect in the southern DRC and
initiated at the Tembo joint venture in Tanzania. An option agreement was
signed with the DRC parastatal OKIMO on a portion of concession C38 in the
historic Moto region.
In South America, drill programmes were completed at the CaAffticapa
prospect in Ecuador as part of the Condor joint venture with IAMGold. Results
did not meet GFI's expectations and it has subsequently relinquished its
rights under that agreement. Drilling was also completed at the Chucapaca
prospect in southern Peru. GFI converted its joint venture interest in the
Tireo joint venture in the Dominican Republic with MinMet plc, for stock in a
newly formed Canadian company, GoldQuest, in which we also participated in the
IPO. Gold Fields retains a back-in right on prospects within the original
Tireo joint venture area.
In North America, an abbreviated winter drilling programme was completed
at the Three Bluffs prospect. Our joint venture partner, Committee Bay
Resources has released results of this program and the summer season drilling
has just commenced on this attractive project.
NORILSK
During the June quarter, a technical team visited the Russian gold assets
of Norilsk. This is consistent with the previously stated approach to explore
the potential for co-operation with regards to our respective gold assets.
The process of evaluating the results of this visit are underway, and
initial results are encouraging enough to continue this process.
We have been advised by Norilsk Nickel that all necessary approvals, with
respect to the acquisition of the 20 per cent Gold Fields share block
purchased from Anglo American on 29 March 2004, have been received. Norilsk
have also stated that it is their clear intent to use this block to create a
common strategy with regard to our respective gold assets.
Corporate matters
LEGAL
A lawsuit was filed by Zalumzi Singleton Mtwesi against Gold Fields
Limited in the State of New York on 6 May 2003. Mr. Mtwesi alleges, inter
alia, that during the apartheid era, he was subjected to human rights
violations. Mr. Mtwesi filed the lawsuit on behalf of himself and as
representative of all other victims and all other persons similarly situated.
In summary, Mr. Mtwesi and the plaintiffs' class demand an order certifying
the plaintiffs' class and compensatory damages from Gold Fields Limited. A
complaint has not been served on Gold Fields Limited. If and when service of
the complaint takes place it will be vigorously contested.
On July 9, 2004, a lawsuit was filed in a federal district court in New
York by six individuals against Gold Fields and a number of other defendants
including IBM Corporation, Anglo American PLC, UBS AG, Union Bank of
Switzerland, Fluor Corporation, Strategic Minerals Corporation, the Republic
of South Africa and President Thabo Mbeki. The lawsuit alleges, among other
things, that one of the plaintiffs was a victim of apartheid, including by
virtue of acts committed at Gold Fields' facilities in Randfontein, South
Africa, and that Gold Fields is liable for various wrongful acts and property
expropriation, as well as violations of international law, allegedly committed
during the apartheid era in South Africa. The plaintiffs are seeking, on each
of two counts, unspecified compensatory damages, punitive damages and interest
and costs and seeks those penalties against the various defendants jointly and
severally. A complaint has not been served on Gold Fields. If and when service
of the complaint takes place it will be vigorously contested.
DIVIDEND
In line with the company's policy of paying out 50 per cent of its
earnings, subject to investment opportunities and excluding impairments, a
final dividend has been declared payable to all shareholders as follows:
- final dividend number 61: 40 SA cents per share
- last date to trade cum-dividend: Friday 13 August 2004
- sterling and US dollar conversion date: Monday 16 August 2004
- trading commences ex-dividend: Monday 16 August 2004
- record date: Friday 20 August 2004
- payment date: Monday 23 August 2004
Share certificates may not be dematerialised or rematerialised between
Monday, 16 August 2004 and Friday, 20 August 2004, both dates inclusive.
Outlook for September 2004 quarter
Shareholders are advised that the expected net earnings for the quarter
ending 30 September 2004 will be lower than those achieved for the quarter
ended 30 June 2004 excluding the impact of the impairment, net of tax, at
Beatrix 4 shaft of R315 million (US$45 million). This is mainly due to:
* a reduction in the gold price in rand terms from R83,731 per kilogram
in the June quarter to below R80,000 per kilogram in the September
quarter based on the price level prevailing at the time of issuing
this report;
* an increase in operating costs, mainly due to above inflation wage
increase in South Africa effective from 1 July;
* a small reduction in gold produced, mainly from the international
operations.
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 2004 quarter and
financial 2004 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.
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 form the Company Secretary and on the web site.
I.D. Cockerill
Chief Executive Officer
29 July 2004
SOURCE Gold Fields Limited
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http://www.goldfields.co.za
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CONTACT:
Investor Relations - Willie Jacobsz,
+27-11-644-2460, or Europe & South Africa - Nerina Bodasing,
+27-11-644-2630, fax: +27-11-484-0639,
investors@goldfields.co.za, or North America - Cheryl A. Martin,
+1-303-796-8683, fax: +1-303-796-8293, camartin@gfexpl.com, all
of Gold Fields
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