| Tue 20 May 2008, 8:30 | | GFI - Sino Raises A$136 Million To Close Out Its G |
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GFI
GOGOF
GFI - Sino Raises A$136 Million To Close Out Its Gold Hedge Book, Gold Fields
Agrees To Increase Its Stake To 19.9%, And The Sino And Gold Fields
Exploration Alliance Is Broadened
Gold Fields Limited
Incorporated in the Republic of South Africa
Registration number 1968/004880/06
Share code: GFI
Issuer code: GOGOF
ISIN: ZAE000018123
Joint Press Release
Gold Fields Limited
Sino Gold Mining Limited
Sino raises A$136 million to close out its gold hedge book, Gold Fields
agrees to increase its stake to 19.9%, and the Sino and Gold Fields
Exploration Alliance is broadened
Sydney and Johannesburg, 20 May 2008: Sino Gold Mining Limited (Sino Gold)
(ASX: SGX, HKSE: 1862) and Gold Fields Limited (NYSE, JSE, DIFX: GFI) are
pleased to announce that:
- Sino Gold will undertake a A$136 million capital raising, the proceeds
of which will be used primarily to retire its gold hedge position
securing for its shareholders full exposure to the gold price;
- The existing exploration alliance between Sino Gold and Gold Fields
Australasia BVI Ltd (Gold Fields) a wholly owned subsidiary of Gold
Fields Limited, in China, now the largest gold producing country in the
world, will be broadened to include a greater range of potential
projects; and
- Gold Fields agrees to increase its stake in Sino Gold which, after the
retiring of its hedge position, will be a financially stronger growth
company.
Sino Gold will raise up to approximately A$204 million via a combination of:
1. An accelerated renounceable entitlement offer to existing shareholders
to raise up to approximately A$136m so as to allow the closing out of
Sino Gold`s hedge book and for development, exploration expenditure,
working capital and general corporate purposes. Thereafter, Sino Gold
will become an unhedged gold producer with the potential to increase
gold production controlled by Sino Gold towards 500,000 ounces per annum
over the next two to three years;
2. A placement to Gold Fields of up to approximately A$68m, and thereafter
Gold Fields will also exercise in full its entitlements under the
entitlement offer. As a result of its participation and support, Gold
Fields` shareholding in Sino Gold will increase from 15.5% currently to
19.9% at completion of the capital raising to further consolidate Gold
Fields` position as Sino Gold`s major shareholder.
Accelerated renounceable entitlement offer (AREO)
Sino Gold today announced an accelerated renounceable pro-rata entitlement
offer at A$4.00 per share to eligible shareholders to raise up to
approximately A$136m. Eligible shareholders will be able to subscribe for 2
new Sino Gold shares for every 15 shares held as at the record date.
Sino Gold intends to apply the net proceeds of the entitlement offer
primarily to close out all of the Company`s gold forward sales contracts,
which totalled 278,657 ounces as at 30 April 2008.
Up to approximately 34 million shares are to be issued in the AREO. The AREO
is comprised of an Institutional Offer and a Retail offer. The Institutional
Offer and the Hong Kong component of the Retail Offer are fully underwritten
by Goldman Sachs JBWere Pty Ltd (the Lead Manager).
The Offer price of A$4.00 (HK$29.80) per share represents:
- a discount of 24.8% (24.3%) to the most recent closing price of A$5.32
(HK$39.35) per share; and
- a discount of 22.6% (22.1%) to the theoretical ex-entitlements price of
A$5.16 (HK$38.23) per share.
Entitlements under either the Institutional Offer or the Retail Offer cannot
be traded on ASX, HKSE or any other exchange, or privately transferred.
Gold Fields has confirmed that it will be exercising in full its rights of
participation in the AREO.
Full details of the placement are available in a separate announcement made
by Sino Gold today. This announcement is available on Sino Gold`s website
www.sinogold.com.au
Placement
In parallel with and in addition to the AREO, Gold Fields is supporting the
raising by participating in a placement with Sino Gold to increase its
shareholding to 19.9%, undertaken in two tranches. Gold Fields will acquire
its first tranche at A$5.03 per share, a 4% discount to the five day volume
weighted average price of the Company`s shares traded on ASX ending 16 May
2008, with the second tranche priced in a similar manner post closure of the
Retail Offer component of the AREO. The placement to Gold Fields will
contribute up to approximately A$68m to the raising.
Full details of the placement are available in a separate announcement made
by Sino Gold today. This announcement is available on Sino Gold`s website
www.sinogold.com.au
The Alliance
In November 2006, Gold Fields Limited and Sino Gold announced the formation
of a strategic alliance to explore and develop large scale gold deposits in
China, combining the `in-country` exploration and commercial skills of Sino
Gold with the large scale mine development skills of Gold Fields.
The alliance`s principal focus has been exploring prospective belts in China
for resources hosting at least five million ounces of gold or gold
equivalent, with a production capability of 500,000 ounces per annum (rule of
`fives`). On a technical level the alliance has concentrated its exploration
efforts on porphyry, high-sulphidation epithermal or sediment-hosted
disseminated orogenic style gold mineralisation which were not previously the
focus of Sino Gold`s exploration program in China. Following a thorough
review of 58 mineral belts in China, four belts have been identified as
priority belts with the potential to host these styles of deposits. Work is
ongoing in each of these belts.
Outside a 50km buffer around Sino Gold`s existing operations (White Mountain,
Jinfeng, Eastern Dragon, Sanjianfang, and Beyinhar), the parties have agreed
to decrease the threshold for new investments to include gold deposits with
resources hosting at least three million ounces, and with annual production
capability of 300,000 ounces per annum.
There is no change to the funding agreements that each party contribute
equally to the activities of the alliance. For an asset to stay in the
alliance, the two companies must equally fund its exploration and
development. These changes therefore broaden and increase Sino Gold`s
financial capacity to explore in new belts outside of its four development
projects.
Nick Holland, newly appointed chief executive officer of Gold Fields Limited,
said:
"The alliance is of strong strategic importance to Gold Fields which has long
recognised China and the Australasian region as highly prospective. Gold
Fields views Sino Gold as the best partner, in China, to help us unlock that
value for our shareholders. Increasing our shareholding in Sino Gold
naturally strengthens our commitment to Sino Gold, but further strengthens
our commitment to the alliance and our exposure to the Australasian region."
Jake Klein, chief executive officer of Sino Gold, said:
"This is an important step for Sino Gold. We are delighted to have received
such significant support from our major shareholder, Gold Fields, through its
commitment to purchase shares at a premium to the entitlement issue and
increase its holding in Sino Gold to 19.9%.
"With the close out of our forward sales, Sino Gold`s shareholders will now
have the opportunity to fully participate in the value created by our growing
gold production in a rising gold price environment."
-ends-
About Gold Fields Limited Group
Gold Fields Limited Group is one of the world`s largest unhedged producers of
gold with attributable production of more than four million ounces per annum
from eight operating mines in South Africa, Ghana and Australia. A ninth
mine, the Cerro Corona Gold/Copper mine in Peru, is expected to commence
production by mid 2008 at an initial rate of approximately 400,000 gold
equivalent ounces per annum. The company has total attributable ore reserves
of 92 million ounces and mineral resources of 252 million ounces. Gold Fields
Limited 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) and the Dubai International Financial Exchange (DIFX).
All of Gold Fields` operations are ISO14001 certified. For more information
please visit the Gold Fields website at www.goldfields.co.za.
About Sino Gold
Sino Gold has been active in China since 1996 and owns 82% of the Jinfeng
gold mine in Guizhou Province, southern China, which has Mineral Resources
containing 4.6 million ounces and Ore Reserves containing 3.2 million ounces.
Jinfeng will be one of the largest gold mines in China when the project
achieves planned initial production of 180,000 ounces per annum. Sino Gold
aims to increase Jinfeng`s gold production to optimal levels as quickly as
possible. The White Mountain project in Jilin Province, northeast China, is
now being developed into Sino Gold`s second mine. In December 2007, Sino Gold
completed the takeover of Golden China Resources Corporation and announced
the Eastern Dragon acquisition. Sino Gold now has projects that provide a
clear pathway for the Company to produce 500,000 ounces of low-cost gold
annually by 2010 Sino Gold is a producing gold company actively pursuing a
discovery and acquisition strategy in China. With a "first mover" advantage,
it holds a strong competitive position in China.
Sino Gold is listed on the Australian Securities Exchange (ASX Code: SGX) and
the Stock Exchange of Hong Kong (SEHK Code: 1862).
For further details, please contact:
Gold Fields:
Investor Enquiries: Willie Jacobsz
+857 241 7127, wjacobsz@gfexpl.com
Media Enquiries: Andrew Davidson
+27 11 644 2638 or +27 82 667 7203
Sino Gold:
Investor Enquiries Jake Klein, CEO or Roger Howe, Investor Relations
+61 2 8259 7000, info@sinogold.com.au
Media Enquiries Kate Kerrison
+61 2 6746 3221, kate@katekerrison.com.au
This market announcement does not constitute an offer to sell or the
solicitation of an offer to buy any securities in the United States or any
other jurisdiction. Neither the entitlements nor the Sino Gold ordinary
shares have been or will be registered under the U.S. Securities Act of 1933,
as amended, and may not be offered or sold in the United States or to, or for
the account or benefit of, U.S. persons absent registration or an applicable
exemption from registration. This announcement contains "forward-looking"
statements. Forward-looking statements involve known and unknown risks,
uncertainties and other factors that are in some cases beyond Sino Gold`s
control. These risks, uncertainties and factors may cause actual results,
performance or achievements to differ materially from those expressed or
implied by the forward-looking statements and from past results, performance
or achievements. Sino Gold cannot give any assurance that the assumptions
upon which management based its forward-looking statements will prove to be
correct, or that Sino Gold`s business and operations will not be affected by
other factors not currently foreseeable by management or beyond its control.
Date: 20/05/2008 08:30:12 Produced by the JSE SENS Department.
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