| Tue 30 Nov 2004, 16:16 | | MODIFIED TERMS |
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GOLD FIELDS LIMITED - MODIFIED TERMS
Gold Fields Limited
(Incorporated in the Republic of South Africa)
Registration number: 1968/004880/06
JSE code: GFI ISIN: ZAE000018123
(`Gold Fields`)
MODIFICATION OF THE TERMS OF THE COMBINATION OF GOLD FIELDS` SUBSIDIARIES
INTERNATIONAL ASSETS WITH IAMGOLD CORPORATION
1. INTRODUCTION
Further to the terms announcement dated 30 September 2004, and the subsequent
Circular to Gold Fields shareholders dated 29 October 2004 (which contained a
notice of general meeting) (`the Circular`), regarding the combination of all of
Gold Fields` subsidiaries assets located outside the Southern African
Development Community with IAMGold Corporation (`IAMGold`) (`the Transaction`),
shareholders are advised that Gold Fields and IAMGold have agreed to modify the
terms of the Transaction.
2. RATIONALE
This modification follows extensive canvassing of shareholder opinion that
confirmed continuing strong support for Gold Fields` international growth
strategy underpinning the reverse take-over of IAMGold. However, following the
relaxation of exchange controls (as further discussed hereunder), the launch of
Harmony`s hostile offer and Noril`sk Nickel`s stated intention to vote against
the Transaction, questions were raised by shareholders as to whether the
original terms of the Transaction, which were warmly received at the time of
their original announcement, were still appropriate in the light of the changed
circumstances. The parties have therefore agreed that the cash contribution from
Gold Fields` subsidiaries to Gold Fields International will be reduced by US$200
million, and that the overall ownership and structure of the new vehicle will
remain otherwise unchanged.
On 25 October 2004, the Government of the Republic of South Africa announced a
series of relaxations to the country`s exchange controls. These relaxations,
which were welcomed by Gold Fields, will facilitate the growth strategy, which
was already being pursued through the creation of Gold Fields International and
further emphasise the strategic rationale for, and benefits arising from, the
combination with IAMGold.
In acquiring 70 percent of the shares of IAMGold - to be renamed Gold Fields
International - Gold Fields will create a strong platform for international
growth within the Gold Fields Group. Gold Fields believes that the appeal of the
Transaction in creating a dynamic growth vehicle with a reduced cost of capital,
quality assets and focused management is stronger than ever and has been further
strengthened by the new flexibility allowed by the exchange control
liberalisation. Whilst we welcome the exchange control changes and the
advantages they bring, they do not affect the strategic rationale for the
Transaction: a vehicle with direct access to international equity and debt
markets will be able to compete more effectively on a global stage and deliver
the aggressive growth that Gold Fields plans.
3. THE AMENDMENT
The definitive agreement dated 30 September 2004, as amended and restated as
of 4 November 2004 to incorporate certain non-material conditions and amendments
requested by the Toronto Stock Exchange (`TSX`) provides for the transfer by
Gold Fields` subsidiaries to IAMGold or its subsidiaries of:
* Gold Fields` indirect 100 percent ownership interest in the St. Ives and
Agnew gold mines in Australia;
* Gold Fields` indirect 71.1 percent ownership interest in the Tarkwa and
Damang gold mines in Ghana;
* the Arctic Platinum Project, an advanced development project in Finland in
which Gold Fields has a 100 percent indirect interest;
* Gold Fields` indirect 80.7 percent economic interest and 92 percent voting
interest in the Cerro Corona development project in Peru, the acquisition of
which is subject to completion; and
* a portfolio of other exploration properties, cash and investments.
The modification will result in the reduction of the cash contributed by Gold
Fields` subsidiaries by an aggregate amount of US$200 million. While the net
value of the assets being acquired by IAMGold will be reduced by the cash amount
of US$200 million, the purchase consideration remains the same, being
351,690,218 fully paid and non-assessable common shares of IAMGold ranking pari
passu with the existing common shares in issue. This purchase consideration
remains subject to adjustment based on the total net cash contributed by Gold
Fields to its offshore subsidiaries, full details of which are set out in the
Circular. Following completion of the Transaction, Gold Fields International
will be constituted a listed subsidiary of Gold Fields with a shareholding of
approximately 70 percent.
4. CONDITIONS PRECEDENT
The Transaction remains subject to, inter alia, the following principal
conditions precedent:
* the approval by a majority of shareholders of Gold Fields (voting in person
or by proxy) at the general meeting to be held to approve the Transaction;
* the approval by a majority of shareholders of IAMGold (voting in person or by
proxy) at the special meeting of shareholders to be held to approve the
Transaction; and
* the listing of the consideration shares of IAMGold on the TSX and the New
York Stock Exchange (`NYSE`) (or, failing the NYSE, the American Stock Exchange
(`AMEX`)).
5. PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION ON GOLD FIELDS
The pro forma financial effects of the Transaction including the modification
thereto on Gold Fields set out below are based on Gold Fields` audited results
for the year ended 30 June 2004.
The pro forma financial effects have been prepared for illustrative purposes
only to provide information on how the Transaction might have impacted on the
results and financial position of Gold Fields had the Transaction occurred at
the beginning of the year ended 30 June 2004. Because of their nature, the pro
forma financial effects may not give a fair reflection of Gold Fields` financial
position at 30 June 2004, after the Transaction, or the effect on future
earnings.
Prior to modification Post modification
Prior to modification Post modification
Percen- Percen-
Before1 After2 tage After7 tage
SA cents SA cents change3 SA cents change8
Headline earnings
per share4,5 157 139 (11,5) 140 (10,8)
Earnings
per share4,5 158 139 (12,0) 140 (11,4)
Net asset value
per share6 3 042 3 500 15,1 3 577 17,6
Tangible net asset
value per share6 3 042 2 903 (4,6) 2 980 (2,0)
Notes:
1. Based on the audited consolidated financial statements of Gold Fields for
the year ended 30 June 2004.
2. Represents pro forma financial effects after the Transaction, prior to the
modification as disclosed in the Circular.
3. Represents the percentage change in the financial effects compared to Gold
Fields before the Transaction, prior to the modification as disclosed in the
Circular.
4. In relation to the pro forma earnings and headline earnings it is assumed
that:
(a) The Transaction was effective on 1 July 2003.
(b) IAMGold`s results were included for the 12 months ended 30 June 2004.
(c) The consideration for the Transaction was based on the market value of
IAMGold at a share price of C$7.86.
(d) Fair value adjustments to IAMGold`s assets are amortised over the relevant
operation`s economic life (as a consequence of the Transaction effectively
resulting in the reverse acquisition of IAMGold by Gold Fields, the IAMGold
assets are required to be fair valued).
5. IFRS requires that the Transaction be accounted for under the provisions of
IFRS 3, which requires that Goodwill should not be amortised but tested for
impairment. Earnings per share are therefore shown on this basis. Under Gold
Fields` previous policies (i.e. before the adoption of IFRS 3), pro forma
earnings per share would have been 107 SA cents.
6. In relation to pro forma net asset value and tangible net asset value it is
assumed that:
(a) The Transaction was effective on 30 June 2004.
(b) The business combination arising from the Transaction will be accounted for
by Gold Fields using the purchase method, resulting in IAMGold`s assets being
restated to fair value.
(c) IAMGold`s financial position was included as at 30 June 2004.
(d) The consideration for the Transaction was based on the market value of
IAMGold at a share price of C$7.86.
(e) Transaction costs estimated at R110 million are included in the purchase
consideration.
(f) Fair value adjustments to IAMGold`s listed investments and of gold bullion
inventory are reflected in market prices as at 31 August 2004.
7. Represents the pro forma financial effects after the Transaction, post the
modification. The modification represents the impact on minority shareholders`
interest of after tax interest earned on US$200 million cash and the impact on
minority shareholders` interest of US$200 million less cash contributed to the
Transaction.
8. Represents the percentage change in the financial effects compared to Gold
Fields before the Transaction, post the modification.
9. No adjustment has been included for the potential additional shares to be
issued by IAMGold in connection with the total net cash contributed by Gold
Fields to the Acquired Companies from 24 June 2004 through to the completion
date.
6. OPINION
The Special Committee and the directors of IAMGold have received an opinion
from RBC Capital Markets, as independent financial adviser, in a form and
substance satisfactory to the Special Committee and the directors of IAMGold
that, as of the date hereof, the consideration under the Transaction including
the modification thereto remains fair, from a financial point of view, to
IAMGold.
7. NOTICE OF GENERAL MEETING
The notice of general meeting of Gold Fields shareholders which is set out in
the Circular provides for the resolutions to be passed with or without
modification and, unless otherwise agreed by the parties to the Transaction, the
vote on the modified resolutions set forth below must occur on 7 December 2004.
Shareholders` attention is drawn to the proposed modification of the resolution
to take account of the change in the composition of assets being disposed of to
IAMGold.
Ordinary resolution number 1 will now read as follows:
`Resolved that the transfer to the IAMGold Group of the Acquired Interests,
representing substantially all of Gold Fields` subsidiaries assets located
outside the Southern African Development Community, in terms of the Transaction,
as modified by the announcement to shareholders on November 30, 2004, details of
which are reflected in the Circular and the announcement, be and is hereby
approved.`
8. SALIENT DATES
Salient dates and times for the general meeting:
Last day to lodge forms of proxy Friday, 3 December 2004
General meeting at 09:00 Tuesday, 7 December 2004
The above dates and times are subject to change and any such change will be
released on the Securities Exchange News Service and published in the press.
9. DOCUMENTATION
The following documentation will be available for inspection during normal
business hours at the registered office of Gold Fields (24 St. Andrews Road,
Parktown, 2193) from the date of this announcement until the date of the general
meeting, copies of which will be despatched to Gold Fields` shareholders and be
available on Gold Fields` website (www.goldfields.co.za):
* this announcement;
* pro forma condensed consolidated income statement and balance sheet of Gold
Fields for the financial year ended 30 June 2004;
* pro forma condensed consolidated income statement and balance sheet of Gold
Fields International for the financial year ended 30 June 2004; and
* the compilation reports of PricewaterhouseCoopers Inc. in respect of the
preparation of the abovementioned pro forma financial information.
In addition, a copy of the amending agreement will be available for inspection
at the address and during the times specified above.
Johannesburg
30 November 2004
Lead financial adviser
and transaction sponsor
Rothschild
Co-financial advisers
Goldman Sachs
JP Morgan
Attorneys
Edward Nathan & Friedland
Corporate Law Advisers & Consultants
Edward Nathan & Friedland (Pty) Ltd
(Registration number 1999/026464/07)
McCarthy Tetrault
Sponsor
JP Morgan
Cautionary Statements
Safe Harbor Statement under the United States Private Securities Litigation
Reform Act of 1995: Certain statements in this document constitute `forward
looking statements` within the meaning of Section 27A of the US Securities Act
of 1933 and Section 21E of the US Securities Exchange Act of 1934. Such forward-
looking statements, including but not limited to those with respect to the price
of gold, the timing and amount of estimated future production, costs of
production, estimated operating results, reserve determination and reserve
conversion rates, involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievement of
IAMGold or Gold Fields to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such risks, uncertainties and other factors include, among others,
risks related to the integration of acquisitions, increased production costs,
risks related to international operations, risks related to joint venture
operations, the actual results of current exploration activities, actual results
of current reclamation activities, conclusions of economic evaluations, changes
in project parameters as plans continue to be refined, future prices of gold,
currency devaluations, labour disruptions; changes in government regulations,
particularly environmental regulations, changes in exchange rates, inflation and
other macro-economic factors, as well as those factors discussed in the section
entitled `Risk Factors` in the Form 40-F for IAMGold and the Form 20-F for Gold
Fields as on file with the U.S. Securities and Exchange Commission in
Washington, D.C. Although IAMGold and Gold Fields have attempted to identify
important factors that could cause actual results to differ materially, there
may be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove to be
accurate as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. These forward-looking statements speak
only as of the date of this document.
Investors are advised that National Policy 43-101 of the Canadian Securities
Administrators requires that each category of mineral reserves and mineral
resources be reported separately. Investors and securities holders should refer
to the annual information form of IAMGold for the year ended December 31, 2003,
and material change reports filed by IAMGold since January 1, 2003 available at
www.sedar.com, for this detailed information with respect to IAMGold, which is
subject to the qualifications and notes set forth therein. United States
investors are advised that while the terms `measured` and `indicated` resources
are recognized and required by Canadian regulations, the SEC does not recognize
them. Investors are cautioned not to assume that all or any part of mineral
deposits in these categories will ever be converted into reserves.
Date: 30/11/2004 04:10:25 PM
Produced by the JSE SENS Department
