| Thu 5 Aug 2010, 8:05 | | GFI - Gold Fields Limited - Gold Fields South Deep new order mining right |
|
GFI
GOGOF
GFI - Gold Fields Limited - Gold Fields South Deep new order mining right
executed and BEE Transactions approved
Gold Fields Limited
Incorporated in the Republic of South Africa
Registration number 1968/004880/06
Share code: GFI
Issuer code: GOGOF
ISIN - ZAE 000018123
MEDIA RELEASE
GOLD FIELDS SOUTH DEEP NEW ORDER MINING RIGHT EXECUTED AND BEE TRANSACTIONS
APPROVED
Johannesburg, 5 August 2010. Following on its 10 May 2010 media release, Gold
Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) is pleased to
announce that the Department of Mineral Resources (DMR) of South Africa has
executed the new order mining right for its South Deep gold mine.
The cumulative effect of this execution, together with the previous conversions
for Driefontein, Kloof and Beatrix granted in 2006, is all of Gold Fields` South
African operations have now been granted their new order mining right.
The South Deep license has also been extended by the DMR to include a contiguous
property, called Uncle Harry`s, which contains a mineral resource of about 14.5
million ounces of gold.
On 10 May 2010 we also stated that to meet its 2014 Black Economic Empowerment
equity ownership requirements, Gold Fields would be developing a number of
empowerment transactions. The terms of these transactions have now been
finalised and approved by the DMR.
"Once concluded, these three transactions will enable Gold Fields to meet its
2014 BEE ownership commitments," says Gold Fields Chief Executive Officer Nick
Holland.
Gold Fields aims to complete the following three transactions before the end of
2010:
Transaction 1
Gold Fields will facilitate the establishment of an Employee Share Option Scheme
(Esop) in respect of an effective 10.75% stake in GFIMSA (the holding company
which controls Gold Fields` South African assets). The Esop will be housed and
administered through the Thusano Share Trust. The holding in GFIMSA is
equivalent to about 13.5 million unencumbered Gold Fields Limited shares with
full voting rights, which will be issued to and held by the Trust at par value
of R0.50 which represents a 99.5% discount to the 30 days VWAP price at 30 July
2010. This represents approximately 1.91% of the current Gold Fields shares in
issue. At the Gold Fields closing share price on 30 July 2010 of R98.35, the
approximate accounting cost of this deal to shareholders would be about R1
billion.
Transaction 2
The issue to a broad-based BEE consortium as described below (BEECO) of about
600,000 Gold Fields Limited shares at par value of R0.50 which represents a
99.5% discount to the 30 days VWAP price at 30 July 2010, valued at
approximately R60 million. This represents about 0.08% of the current Gold
Fields shares in issue. These shares will carry no restrictions.
Transaction 3
BEECO will also subscribe for a 10% holding with full voting rights directly in
South Deep with a phased in participation over 20 years. Transaction 3 is below
the JSE transaction threshold of 5% and is not with related parties as defined
as per the JSE Limited Listings Requirements and is therefore included for
information purposes only.
"These deals are central to our commitment to make every current employee at the
company an owner. At the same time we are expanding opportunities for
historically disadvantaged persons to benefit from the exploitation of the
country`s mineral resources by promoting broad-based ownership, employment, and
the advancement of social and economic welfare generally," Holland added.
In terms of JSE Listing Requirements a circular giving full details of the
transaction will be distributed to shareholders in due course. The transactions
are subject to certain suspensive conditions, including shareholder approval for
Transactions 1 and 2. The detailed pro-forma effect of Transactions 1 and 2 are
outlined below.
Details of the ESOP scheme
- About 47,100 GFIMSA employees in the Paterson Grade A to C categories will
be granted approximately 13.5 million unencumbered new Gold Fields Limited
shares through the Thusano Trust.
- About 12.6 million of the shares will be allocated to HDSA employees, an
effective 10% stake in GFIMSA.
- The approximate 13.5 million Gold Fields Limited shares in the ESOP scheme
will be held by the Gold Fields Thusano Share Trust for 15 years.
- The Thusano Trust will have 14 trustees comprising 10 trade union
representatives, 2 Gold Fields trustees and two independent trustees, of
whom one will be the chairperson.
- The Thusano Trust will exercise full voting rights on behalf of the
employees.
- The share allocation to employees will be based on an employee`s length of
service with Gold Fields, ranging from 100 shares for one year service to
480 shares for 20 years service.
- The shares are allocated free of charge but have to be held for 15 years.
The employees will receive dividend payments during those 15 years. Based
on historical dividend yields the dividend payments will total about R20
million a year.
Details of the BEE consortium (BEECO)
- The newly formed BEECO will comprise:
(i) a Broad-Based Education Trust, to facilitate and promote education,
youth and skills development for the mining industry. The majority of
the Trustees will be independent and the Trust will hold a 54%
beneficial interest in BEECO;
(ii) a selected number of black business and community leaders, who will
not be related parties as defined by the JSE Listings Requirements and
will hold a combined 36% beneficial interest in BEECO; and
(iii)a Broad-Based Community Trust. The majority of the Trustees will
be independent and the Trust will hold a 10% beneficial interest in
BEECO;
- The acquisition of the BEECO`s 10% stake in South Deep will be
facilitated through a unique vendor financed phased participation
scheme that will see the shareholding acquired at no cost to the
BEECO.
- The BEECO will hold 10% of South Deep in the form of B-class Shares
with full ownership and voting rights. As holders of the B-class
Shares the BEECO will be entitled to a cumulative preferential
dividend of R20 million per annum for the first 10 years, R13.3
million per annum for the next five years and R6.7 million for the
next five years (R2.00 per B-class Share) payable out of profits of
South Deep. After 20 years the preferential dividend ceases.
- The B-class Shares` right to participate in other distributions over
and above the preferred dividend will initially be suspended. The
suspension will be lifted on a phased-in basis, resulting in the B-
class Shares having the same rights as the A-class Shares, as follows:
- After 10 years, in respect of one-third of the B-class Shares;
- After 15 years, in respect of another one-third of the B-class
Shares; and
- After 20 years, in respect of the remaining one-third of the B-
class Shares.
- The BEECO must retain ownership of South Deep for 30 years which is
the term of the new order mining right granted to South Deep.
Pro-forma Impact
The unaudited pro forma financial effects of Transaction 1 and Transaction 2 are
set out below. The unaudited pro forma financial effects have been prepared for
illustrative purposes only to provide information on how the proposed
Transactions might have affected the reported historical financial information
of Gold Fields. The cost of both transactions will be expensed immediately to
the income statement with no subsequent mark to market adjustments. Because of
its nature, the unaudited pro forma financial effects may not fairly present
Gold Fields financial position, changes in comprehensive income, changes in
equity, and results of operations or cash flows after the Transactions. The
unaudited pro forma financial effects are the responsibility of the Directors.
The table below sets out the unaudited pro forma financial effects on Gold
Fields of Transactions 1 and 2 based on published financial results of Gold
Fields for the financial year ended 30 June 2010. The pro forma earnings "After
Transactions 1 and 2" include an upfront International Financial Reporting
Standards (IFRS 2), Share-based payments charge in respect of Transactions 1 and
2 which are non-recurring.
Pro forma financial effects for the financial year ended 30 June 2010
Before After
Transact Transact Percenta
ions Transact Transact ions ge
1 and 2 ion 1 ion 2 1 and 2 change
Earnings per 515 (149) (8) 358 -30.6%
share
Diluted earnings 508 (146) (9) 353 -30.5%
per share
Headline earnings 449 (148) (8) 293 -34.7%
per share
Diluted headline 443 (145) (9) 289 -34.8%
earnings per
share
Net asset value 6,438 (121) (5) 6,312 -2.0%
per share
Net tangible 5,807 (109) (5) 5,693 -2.0%
asset value per
share
Weighted average
number of 705,364, 719,505, 2.0%
ordinary shares 200 946
Diluted weighted
average number of 714,549, 728,691, 2.0%
ordinary shares 842 588
Actual number of
ordinary shares 705,903, 720,045, 2.0%
511 257
Notes:
1. Earnings per share (EPS), Diluted earnings per share (DEPS), Headline
earnings per share (HEPS), Diluted headline earnings per share (DHEPS), Net
asset value (NAV) per share "Before Transaction 1 and 2" are based on the
published financial results of Gold Fields for the financial year ended 30
June 2010.
2. EPS, DEPS, HEPS and DHEPS "After Transaction 1 and 2" are based on the
assumption that the Transaction was implemented on 1 July 2009.
3. NAV per share "After Transaction 1 and 2" is based on the assumption that
the Transaction was implemented on 1 July 2009.
4. Earnings "After Transaction 1 and 2" have been reduced by a non-recurring
charge of R1,058 million in respect of IFRS 2, Share-based payments. In
terms of IFRS 2, the difference between the fair value of the issued shares
under Transaction 1 and 2 and the subscription price is an expense which is
charged through the Statement of Operations (income statement) of Gold
Fields. For purposes of preparation of the pro forma financial effects, the
difference is assumed to be R1,058 million.
5. In determining the charge of R1,058 million, the closing share price on
Friday, 30 July 2010 of R98.35 per share was used to determine the fair
value of shares granted. In the case of Transaction 1, which has
restrictions on trading of the shares, a liquidity discount was applied.
6. Transaction 3 has not been included in the financial effects as it is not
required in terms of this announcement.
Notes to editors
About Gold Fields
Gold Fields is one of the world`s largest unhedged producers of gold with
attributable production of 3.6 million ounces* per annum from nine operating
mines in South Africa, Ghana, Australia and Peru. Gold Fields also has an
extensive growth pipeline with both greenfields and near mine exploration
projects at various stages of development. Gold Fields has total attributable
Mineral Reserves of 81 million ounces and Mineral Resources of 271 million
ounces. Gold Fields is listed on JSE Limited (primary listing), the New York
Stock Exchange (NYSE), the Dubai International Financial Exchange (DIFX), the
Euronext in Brussels (NYX) and the Swiss Exchange (SWX). For more information
please visit the Gold Fields website at www.goldfields.co.za
Gold Fields Limited
150 Helen Road
Sandown, Sandton
2196
Postnet Suite 252
Private Bag X30500
Houghton, 2041
South Africa
Tel: +27 11 562 9700
Fax: +27 11 562 9838
www.goldfields.co.za
Enquiries
Investor Enquiries
Willie Jacobsz
Tel: +508 839 1188
Mobile: +857 241 7127
Email: willie.jacobsz@gfexpl.com
Nikki Catrakilis-Wagner
Tel: +27 11 562 9706
Mobile: +27 (0)83 309 6720
Email: nikki.catrakilis-wagner@goldfields.co.za
Media Enquiries
Sven Lunsche
Tel: +27 11 562 9763
Mobile: +27 (0)83 260 9279
Email: sven.lunsche@goldfields.co.za
Sponsor:
J.P. Morgan Equities limited
Date: 05/08/2010 08:05:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
