| Wed 11 Aug 2004, 15:10 | | Combination Of Gold Fields' International Assets |
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Gold Fields - Combination Of Gold Fields` International Assets (Outside Of SADC)
With IAMGOLD Corporation And Cautionary Announcement
Gold Fields Limited
(Incorporated in the Republic of South Africa)
(Registration number:1968/004880/06)
ISIN: ZAE000018123
JSE Code: GFI
(`Gold Fields`)
COMBINATION OF GOLD FIELDS` INTERNATIONAL ASSETS WITH IAMGOLD CORPORATION AND
CAUTIONARY ANNOUNCEMENT
1. Introduction
Gold Fields and IAMGOLD Corporation (`IAMGOLD`) have agreed, subject to the
fulfilment of conditions precedent, that they will combine all of Gold
Fields` mining assets located outside the Southern African Development
Community (`SADC`) (`the Acquired Interests`) with IAMGOLD in exchange for
Gold Fields receiving IAMGOLD shares. Following the transaction, Gold
Fields will own approximately 70 percent of the fully diluted equity of the
enlarged company.
IAMGOLD is currently the subject of an unsolicited offer from Golden Star
Resources Ltd (the `unsolicited offer`) and the IAMGOLD Board of Directors
appointed a Special Committee of independent directors, advised by RBC
Capital Markets, to pursue alternative transactions to maximise value for
IAMGOLD shareholders. As part of this process Gold Fields submitted a
proposal to IAMGOLD in the form of a letter of intent. The Board of
Directors of IAMGOLD has informed Gold Fields that it considers the Gold
Fields proposal to be superior to the unsolicited offer and other proposals
it has received and that RBC Capital Markets has provided an opinion to the
IAMGOLD board that, as at the date hereof, the consideration under the
transaction is fair from a financial point of view to IAMGOLD. Accordingly
the board of IAMGOLD has accepted the terms of the Gold Fields proposal,
and both Gold Fields and IAMGOLD have signed and executed a binding letter
of intent.
2. The transaction
The agreement provides for the sale by Gold Fields to IAMGOLD of the
Acquired Interests comprising principally:
- the St. Ives and Agnew gold mines in Australia;
- the 71.1 percent shareholding in the Tarkwa and Damang gold mines
in West Africa, and Gold Fields` claim on loan account against
Tarkwa;
- the Arctic Platinum Project (`APP`), an advanced development
project in Finland;
- Gold Fields` interest in the Cerro Corona development project in
Peru, acquisition of which is subject to completion; and
- a portfolio of other exploration properties, cash and
investments.
The purchase consideration will consist of 351,690,218 fully paid common
shares of IAMGOLD ranking pari passu with the existing common shares in
issue. Based on IAMGOLD`s volume weighted share price over the 20 trading
days to 10 August 2004, these shares have a market value of approximately
US$2,1 billion. The number of shares to be issued will be subject to
adjustment based on the total cash contributed by Gold Fields to the
ongoing capital expenditure programmes of the Acquired Interests from and
after 24 June 2004 through to completion of the transaction. This
adjustment will be made based on the 20-day average trading price of
IAMGOLD shares prior to closing and is capped at US$ 50 million. Following
completion of the transaction, IAMGOLD will become a listed subsidiary of
Gold Fields.
In addition, at completion, IAMGOLD shareholders, registered as such on a
record date prior to completion, will receive a special cash dividend of
Canadian 50 cents per IAMGOLD share.
3. Change of name
Upon completion of the transaction, IAMGOLD will be renamed `GOLD FIELDS
INTERNATIONAL LIMITED` (`GOLD FIELDS INTERNATIONAL`) and will become the
international growth vehicle (outside of the SADC region) for Gold Fields.
4. Stock exchange listings
Immediately following completion of the transaction, the common shares of
GOLD FIELDS INTERNATIONAL will continue to be listed on the Toronto Stock
Exchange and the American Stock Exchange.
Gold Fields will retain its existing primary listing in South Africa on the
JSE Securities Exchange South Africa, its listing on the New York Stock
Exchange and its secondary listings on other international exchanges.
5 Rationale
Gold Fields has established a significant portfolio of non-SADC assets,
which produced approximately 1.4 million gold equivalent ounces on an
attributable basis for the financial year ended 30 June 2004. As at 30
June 2003, the attributable proven and probable reserves for these assets
totalled approximately 11.2 million ounces of gold and the attributable
mineral resources represented approximately 26.4 million ounces of gold.
Gold Fields believes that the transaction presents an opportunity to add
further high quality production of approximately 0,4 million ounces per
annum through the consolidation of IAMGOLD`s and Gold Fields` holdings in
Tarkwa and Damang and through the addition of IAMGOLD`s holdings in Sadiola
and Yatela.
Furthermore, the transaction creates an entity that can compete with
international gold companies on a level playing field. Direct access to the
international capital and debt markets should enable the company to develop
the APP and (subject to completion of its acquisition) Cerro Corona
projects in an optimal manner, and to react more swiftly to acquisition
opportunities as they arise.
The injection of Gold Fields` non-SADC assets into a separately listed,
financially independent company should present an opportunity for further
value creation as the market benchmarks the assets of GOLD FIELDS
INTERNATIONAL against those of its international peer group.
6. Conditions precedent
The transaction is subject to the finalisation of definitive agreements and
the approval of the shareholders of Gold Fields and IAMGOLD, along with the
necessary regulatory and third party approvals.
The shareholders` meetings are anticipated to take place in November 2004,
with the transaction scheduled to close this calendar year.
7. South African Exchange Control Approval
Gold Fields has received approval for the transaction from the South
African Reserve Bank (`SARB`) on the basis that:-
7.1 At all times Gold Fields maintains a shareholding of at least 50,1
percent in GOLD FIELDS INTERNATIONAL;
7.2 Gold Fields, in order to maintain a shareholding of at least 50,1
percent in GOLD FIELDS INTERNATIONAL, will be permitted, subject to
the approval of the SARB on a case-by-case basis, to follow its rights
in any equity capital market fund raising by GOLD FIELDS INTERNATIONAL
by using funds sourced from within South Africa, provided that:
(i) funds sourced from within South Africa are to be applied
towards capital expenditure on a specific project or towards
the funding of any corporate acquisition of GOLD FIELDS
INTERNATIONAL;
(ii) the requirements as set out in 7.3 below are complied with;
and
(iii) the financing of the following of such rights must be done
within the foreign direct investment limits or other
exchange control policy parameters prevailing at such time;
7.3 GOLD FIELDS INTERNATIONAL will be permitted to pursue subsequent
corporate acquisitions or projects without seeking prior approval from
the SARB on the following terms:
(i) the acquisition or project should be in the same line of
business that IAMGOLD is currently pursuing - i.e. gold
mining as well as platinum group metals. However, in some
cases copper and other base metals could be byproduct
revenue to the main process of mining for gold and platinum
group metals;
(ii) any acquisition or project that is pursued would also be
subject to GOLD FIELDS INTERNATIONAL maintaining an
ownership interest of at least 50.1 percent therein;
(iii) any financing arrangements relating to such acquisitions
must be without recourse to South Africa;
(iv) any acquisition or project pursued by GOLD FIELDS
INTERNATIONAL should result in a benefit to South Africa
over the longer term. Over and above the normal benefits in
terms of added value through such acquisitions or projects,
Gold Fields has agreed to use its reasonable commercial
endeavours to source technical skills from South Africa in
developing any acquisitions, consider procurement
opportunities from South Africa and investigate the
possibility of providing employment opportunities in areas
where specific expertise is required and is available; and
(v) Gold Fields is required to report back to the SARB after any
acquisition, giving full details of the acquisition and the
financing mechanisms and details of the specific benefits
accruing to South Africa.
The SARB has agreed to allow the annual earnings of GOLD FIELDS
INTERNATIONAL to be retained offshore to the extent required for working
capital, funds for expansion programmes and projects, corporate
acquisitions and debt servicing. In this regard Gold Fields is required to
report annually to SARB on GOLD FIELDS INTERNATIONAL`s requirements.
8. Cautionary announcement
A further announcement will be published as soon as the parties have
entered into definitive documentation and pro forma statements summarising
the financial effects of the transaction have been finalised. Accordingly,
shareholders of Gold Fields are advised to exercise caution in dealing in
their Gold Fields shares until a further announcement is made.
Johannesburg
11 August 2004
Lead Financial Adviser and Rothschild
Transaction Sponsor
Co- Financial Advisers Goldman Sachs International, JP Morgan
Legal Advisers Edward Nathan
Sponsor JP Morgan
Date: 11/08/2004 02:45:08 PM
Produced by the JSE SENS Department
