| Thu 11 Oct 2007, 15:41 | | GFI - Gold Fields - Sells 60% stake in Essakane Pr |
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GFI
GOGOF
GFI - Gold Fields - Sells 60% stake in Essakane Project for Us$200 million
Gold Fields Limited
(Reg. No. 1968/004880/06)
(Incorporated in the Republic of South Africa)
Share Code: GFI
ISIN Code: ZAE000018123
("Gold Fields" or the "Company")
GOLD FIELDS SELLS 60% STAKE IN ESSAKANE PROJECT FOR US$200 MILLION
Johannesburg, 11 October 2007: Gold Fields Limited ("Gold Fields") (NYSE,
JSE, DIFX: GFI) is pleased to announce that agreement has been reached in
terms of which Gold Fields will sell its current 60% stake in the Essakane
project located in Burkina Faso, West Africa, to its partner in the project,
Orezone Resources Inc. (Orezone) (TSX:OZN), for a minimum total consideration
of US$200 million.
Orezone will pay Gold Fields US$150 million in cash and US$50 million in
Orezone securities or US$200 million in cash at Orezone`s election.
Ian Cockerill, Chief Executive Officer of Gold Fields, said:
"While the Essakane project is expected to make a good return and deserves to
be built, Gold Fields` relatively small stake in the project mitigates
against it becoming a Gold Fields franchise asset. We believe that Orezone is
well positioned to turn this asset to account."
To date Gold Fields has spent a total of US$47million on the project. The
sale price represents a significant return on investment for Gold Fields.
The proceeds from the sale will be reinvested to create value for Gold
Fields` shareholders. Options under consideration include, inter alia, debt
reduction and the funding of Gold Fields` extensive capital investment
portfolio.
Cockerill added that this sale did not detract in any way from Gold Fields`
often stated strategy of international growth: "We have definitely not
changed course and our aspiration to grow our international portfolio with
appropriately sized, value adding assets, remain as strong as ever."
The transaction is subject to a number of conditions, including Orezone
securing net proceeds of at least US$150 million through a public offering of
its securities, and approval of the transaction by the South African Reserve
Bank. Gold Fields and Orezone expect the transaction to close towards the
end of November.
The Essakane Project is the largest gold deposit in Burkina Faso, West
Africa. The Definitive Feasibility study envisions a surface mine and CIL
facility processing an average of 5,400,000 tonnes per annum. The project
has 4.0 million ounces of measured and indicated resources and 1.3 million
ounces of inferred resources at a 0.5 g/t cut-off. Reserves contained within
a US$500 gold price mine plan are 2.65 million ounces. The project will take
18 months to construct at a total capital cost of US$346 million. Once
operational, the mine is expected to produce an average of 292,000 ounces of
gold per annum at cash cost of US$356 per ounce.
Orezone is an explorer and emerging gold producer. The company has a pipeline
of advanced and grassroots projects, all located in politically stable areas
of West Africa which is one of the world`s fastest growing gold producing
regions. Orezone`s mission is to create wealth by discovering and developing
the earth`s resources in an efficient and responsible manner.
Gold Fields Limited is one of the world`s largest unhedged producers of gold
with attributable production of 4.0 million ounces per annum, mineral
reserves of 94 million ounces and mineral resources of 252 million ounces.
The Group employs some 47,000 permanent employees across its operations and
is listed on the JSE Limited South Africa (primary listing), the New York
Stock Exchange (NYSE) as well as the Dubai International Financial Exchange
(DIFX).
-ends-
Enquiries
Willie Jacobsz
Tel +27 11 644-2460
Fax +27 11 484-0639
Mobile +27 82 493 1377
Williej@goldfields.co.za
Date: 11/10/2007 15:41:11 Produced by the JSE SENS Department.
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