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Mvela Resources - Agreement Reached Between Gold Fields And Mvela Resources
Mvelaphanda Resources Limited
Registration number: 1980/001395/06
ISIN: ZAE000050266 JSE Code: MVL
(`Mvela Resources`)
AGREEMENT REACHED BETWEEN GOLD FIELDS AND MVELA RESOURCES
INTRODUCTION
Shareholders of Gold Fields and Mvela Resources (`Shareholders`) are referred tothe joint announcement published by Mvela Resources and Gold Fields during March
2004, in terms of which Shareholders were advised of the fulfilment of all
material conditions precedent to the transaction in terms of which:
* Mvelaphanda Gold (Proprietary) Limited (`Mvela Gold`), a whollyowned
subsidiary of Mvela Resources, advanced a loan in the amount of R4 139
million to GFI-SA, the purpose of which was to discharge, in part, the
amount payable by GFI-SA for the South African gold mining assets and
business operations acquired by it from wholly-owned subsidiaries of Gold
Fields (the `GFI-SA Loan`);
* Mvela Gold will acquire a 15 per cent interest in GFI-SA (the `GFI-SA
Shares`) by means of a subscription for shares for cash at a subscription
price of R4 139 million on the date upon which the GFI-SA Loan is repaid
or, at Mvela Gold`s election, on the date upon which the GFI-SA Loan
becomes repayable;
* Each of Mvela Gold or Gold Fields have the right to require the exchange of
the GFI-SA Shares in return for the issue to Mvela Gold of new ordinary
shares in Gold Fields,
In terms of the Transaction it was agreed that if either of Mvela Gold or Gold
Fields exercised the right to require the exchange of the GFI-SA Shares for
ordinary shares of an equivalent value in Gold Fields, such exchange would be on
a basis consistent with the valuation method applied when the terms of the
Transaction were first agreed and announced (the `Right of Exchange`).
Shareholders are advised that the minimum and maximum number of Gold Fields
shares that will be issued by Gold Fields following the exercise of the Right of
Exchange have been agreed between inter alia, Mvela Resources, Gold Fields,
Mvela Gold and GFI-SA (the `Exchange Agreement`).
In terms of the Exchange Agreement, Mvela Gold will be entitled to be issued
with not less than 45 million and not more than 55 million Gold Fields Shares,
currently comprising 8,38% and 10,05% of the issued share capital of Gold Fields
on a fully diluted basis respectively, if the Right of Exchange is exercised.
If during the period prior to the date upon which the Right of Exchange is
exercised:
* the share capital structure of Gold Fields is significantly changed in any
way; or
* Gold Fields undertakes certain corporate activities or effects payments or
distributions to Gold Fields shareholders outside the normal, ordinary and
regular course of business,
* the number of Gold Fields shares to be issued by Gold Fields will be
adjusted accordingly on a pro rata basis to ensure that the value of the
Gold Fields shares to be issued to Mvela Gold is unaffected by any such
change in share capital, corporate activity or distributions. Any dispute
between the parties as to any adjustment of the number of Gold Fields
shares to be issued will be resolved by an independent merchant or
investment banker selected on the basis set out more fully in the Exchange
Agreement.
The terms of the Right of Exchange did not provide any certainty to Mvela
Resources regarding the minimum shareholding it would receive in Gold Fields at
the time the Right of Exchange was exercised. By fixing the minimum number of
Gold Fields shares that Mvela Gold will receive when the Right of Exchange is
exercised, the Exchange Agreement provides certainty regarding Mvela Resources`
ultimate shareholding in Gold Fields thereby securing a sustainable black
economic empowerment partnership as was intended. In exchange for providing
certainty to Mvela Resources with respect to the minimum number of Gold Fields
shares to be issued to Mvela Gold it was also agreed to set a cap on the maximum
number of Gold Fields shares to be issued to Mvela Gold following the exercise
of the Right of Exchange.
Johannesburg
31 January 2005
Sponsor to Gold Fields
JPMorgan
Merchant Bank to Mvela Resources
RMB
Sponsor to Mvela Resources
PriceWaterhouseCoopers Corporate Finance (Pty) Ltd
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