| Tue 16 Nov 2004, 15:00 | | Annual General Meeting |
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Gold Fields Annual General Meeting: Chief Executive Officer Adresses Hostile Bidby HarmonyGold Fields LimitedJSE share code: GFIISIN: ZAE000018123MEDIA RELEASEGold Fields Annual General Meeting:Chief Executive Officer AdressesHostile Bid by HarmonyJohannesburg, 16 November 2004: Gold Fields Limited today released the speechdelivered by Ian Cockerill, Chief Executive Officer of Gold Fields Limited atthe company`s Annual General Meeting held at the Company`s premises at 24 StAndrews Road, Parktown in Johannesburg. The text of the speech follows:This is an important meeting for all of us who as shareholders care deeply aboutthe future of Gold Fields. Given the current situation, I think it isappropriate if I depart from the usual format and say a few words about thehostile offer your company faces from Harmony. I also want to tell you what weare doing to protect the value that this management team has worked hard toprovide to you; and why we believe that Harmony`s hostile, coercive, two-stageoffer undervalues your company. I will conclude this discussion with why webelieve strongly that you should not tender your shares into their earlysettlement offer.During the past few weeks, we have personally contacted many of you and nearlyall of Gold Fields institutional shareholders. I myself have visitedshareholders in Europe, North America and here in South Africa and, almostwithout exception, they find the Harmony offer unattractive. Our strongimpressions are that this view is widely and firmly held by most Gold Fieldsshareholders.One of the reasons that we have seen such support is the hard work that we as acompany have done to create and sustain value. This management team hasdelivered a return to you, our shareholders, of 200% in both capital anddividends since 1998, which is a compound annual growth rate of 25%. We have arecord of creating value, delivering value and protecting value. We stand onthat record.During the past 6 weeks, you have been bombarded with selective and incompleteinformation from Harmony. I would like to take a few moments to specificallyrefute some of the most blatant of these claims.Harmony has said that Gold Fields is looking to desert South Africa. This couldnot be further from the truth. Gold Fields is a true South African champion. Wehave great assets here in South Africa. The company`s global operations are runfrom South Africa. We have invested billions of rands to ensure that our SouthAfrican operations have a long term and profitable future. We have a R 10billion pipeline of potential projects here only awaiting marginallymore favourable economics to get the `go ahead`. As I said, Gold Fields is atrue South African champion.Harmony accuses us of hiding behind lawsuits. This is nonsense. On each claim wehave undertaken, the Board has received specific legal advice that shareholderrights were threatened by the coercive nature of Harmony`s hostile two-stageoffer. We have pursued these actions in the interests of good corporategovernance and to ensure our shareholders` rights were fully protected.Rather, I would caution you not to be distracted from the central issue -Harmony`s offer undervalues Gold Fields. It consists of overvalued Harmonypaper, no cash and a too low a premium. Their increasingly aggressive campaignto try to- discredit our advisers- to attempt to entrap our staff into wrongdoing; and- to harass our Directors and Officers will not succeed and must not divertattention from the value arguments.Harmony has provided incomplete disclosure in respect of its reserves. Harmonyclaims its reserves are 62 million ounces whereas their independent reserveauditors say the true figure is about 40 million. The difference, Harmony says,is largely due to the inclusion of inferred reserves, which is in clearviolation of SAMREC - the established South African mining industry code.Independent analysts have also come to the same conclusion. I find it quitecynical on Harmony`s part that they are unable to provide properly auditednumbers until December - that is, after the November 26 close of their earlysettlement offer.Harmony has provided misleading financial information to our US shareholders. Wehave seen a letter from Harmony to our shareholders stating that the SEC hasadvised Harmony that their `Preliminary Prospectus` is in breach of the USSecurities Act and the SEC have therefore required that Harmony remove thesections entitled:- `Selected Unaudited Pro Forma Condensed Combined Financial Information`;- `Summary Selected Comparative Historical and Pro Forma Per Share Data`; and- `Unaudited Pro Forma Consolidated Financial Statements` - amounting to some 10 pages of financial information.How can Gold Fields shareholders be asked to make informed decisions withouthaving all of the facts in front of them?I want to address one other Harmony myth - Gold Fields had no plans to closeEvander. Documents published at the time by Gold Fields made it clear that webelieved that there was scope for a further 10 years of production there. TheGold Fields Board (remember that this was prior to my appointment) chose toaccept Harmony`s offer for Evander because they believed that it was the rightthing to do in the interests of creating value for Gold Fields` shareholders.The re-investment of the Evander sale proceeds into capital growth projectsaround the group has delivered and will continue to deliver positive financialreturns for you, the shareholders.What is indisputable is the destruction of value Harmony has brought upon theshareholders of both companies. More than $900 million has been lost from thevalue of both companies since Harmony`s hostile offer was launched. In addition,if you look at how the North American gold majors, including Newmont andBarrick, have traded during this time, the value destruction is double thatnumber - approaching $2 billion.As a result of this value destruction, Harmony`s offer to Gold Fieldsshareholders today is now worth less than R83-50 per Gold Fields share.Harmony`s offer is worth much less today than the price your shares were tradingat before this hostile offer was launched - 92 Rand. And this at a time whenthe gold price is moving strongly ahead in a bull run.We are firmly committed to not only resisting this hostile bid but to continueto build shareholder value for you. I want to re-iterate my position to Harmonythat rational discussions around possible co-operation can only take place in amore conducive atmosphere. Should the coercive two-stage offer be dropped, thatwould go a long way towards creating such an environment.The core issue in this debate is that Harmony`s bid does not offer fair valuefor your shares in this great South African company. I urge you to rejectHarmony`s hostile offer and not to tender your shares to them.We are heartened by the support that we have received from many of you in thepast weeks. We know that you care about the future of Gold Fields as much as wedo. We are on the right path. We have great plans in place to continue tocreate and sustain shareholder value. We urge you reject the Harmony offer. Donot tender your shares.endsIn the United States, Gold Fields Limited (`Gold Fields`) has filed aSolicitation/Recommendation Statement with the US Securities and ExchangeCommission (the `SEC`) on Schedule 14D-9 and holders of the Gold Fields OrdinaryShares and American Depositary Shares are advised to read it as it containsimportant information. Copies of the Schedule 14D-9 and other related documentsfiled by Gold Fields are available free of charge on the SEC`s website athttp://www.sec.gov. Any documents filed by Harmony Gold Mining Company Limited,including any registration statement on Form F-4 (including any prospectuscontained therein) and related exchange offer materials as well as its TenderOffer Statement on Schedule TO, will also be available free of charge on theSEC`s website.The directors of Gold Fields accept responsibility for the information containedin this document. To the best of their knowledge and belief (having taken allreasonable care to ensure that such is the case) the information contained inthis document is in accordance with the facts and does not omit anything likelyto affect the import of such information.Copies of this document are not being made available, and must not be mailed,forwarded, transmitted or otherwise distributed or sent in or into Australia,Canada, Japan, the Republic of Ireland or any other jurisdiction in which it isillegal to make this document available and persons receiving this document(including custodians, nominees and trustees) must not distribute, forward,mail, transmit or send it in or into or from Australia, Canada, Japan, theRepublic of Ireland or any such other jurisdiction.
