| Thu 12 May 2005, 13:56 | | Harmony"s mineral reserves are 33.7 million ounces |
|
Gold Fields Limited - Gold Fields believes that Harmony`s mineral reserves are
33.7 million ounces if SAMREC guidelines are correctly applied
Gold Fields Limited
Registration number: 1968/004880/06
ISIN: ZAE000018123 JSE Code: GFI
(`Gold Fields` or the `company`)
Gold Fields believes that Harmony`s mineral reserves are 33.7 million ounces if
SAMREC guidelines are correctly applied
Johannesburg 11 May 2005: Shareholders of Gold Fields Limited (GFI: JSE and
NYSE) (Gold Fields) are advised that in Gold Fields` view, Harmony has 33.7
million ounces of SAMREC compliant mineral reserves and not 62.26 million ounces
as stated in the Harmony Gold Mining Company (Harmony) offer document sent to
Gold Fields shareholders on 20 October 2004, or 55.65 million ounces as stated
in Harmony`s press release issued on 10 May 2005.
Ian Cockerill, Chief Executive Officer of Gold Fields said, `We note that, given
Harmony`s repeated promises to deliver its CPR, and the fact that it has taken
seven months for such a vital document to be produced, it has finally been made
available to our shareholders barely two weeks before the close of Harmony`s
offer. In Harmony`s all-paper bid, the true quantity of economically mineable
mineral reserves is the single most important measure required to value
Harmony`s offer. From the outset of this hostile bid, we have maintained that
Harmony`s shares were overvalued on the premise of its ever-changing mineral
reserve declarations.`
The key to understanding Gold Fields` concerns about Harmony`s reserve
declarations is the SAMREC Code. Gold Fields, as a member of the South African
mining industry abides by the definitions of the SAMREC Code. On pg. 17 of the
SAMREC Code, Reporting of Mineral Reserves (paragraph 5.5.1) it is stated that
`A `mineral reserve` is the economically mineable material derived from a
measured and or indicated mineral resource. The term `economic` implies that
extraction of the mineral reserve has been demonstrated to be viable and
justifiable under reasonable financial assumptions`
In an unusual departure from convention, Steffen, Robertson and Kirsten (South
Africa) (SRK) presents three broad Options in the CPR (refer to table below),
each with five sub-options, from which shareholders are required to derive a
mineral reserve number for Harmony. Significantly and in all Options, the
numbers presented are lower than the 62.26 million ounces stated in Harmony`s
offer document refered to above.
Option 52.2 million Includes Evander Rolspruit and Poplar
A ounces projects, as well as other entities
with a negative NPV
Option 42.3 million Excludes Evander Rolspruit and Poplar
B ounces projects but includes other entities
with a negative NPV
Option 33.7 million Includes only ounces that can be
C ounces economically mined at a gold price of
R 92,000/kg
Option A
All of the sub-options presented under Option A include the Life of Mine (LOM)
Plans of Harmony`s assets, irrespective of economic viability at R92, 000/kg,
the price at which Harmony`s CPR calculates its mineral reserves. For this
reason none of the sub-options presented under Option A qualifies as a reserve
as per the SAMREC definition.
Option B
All of the sub-options presented under Option B are exactly the same as for
Option A, with the exception that the Evander projects that are not economically
viable are excluded. These are Rolspruit and Poplar, which require a gold price
of R179, 792/kg and R98, 426/kg respectively (at an indicative 15% nominal
discount rate) to be economically viable. However, despite the exclusion of the
projects, Option B still includes 8.6 million ounces at other entities which are
not economically viable at a gold price of R92, 000/kg.
As both Option A (52.2 million ounces) and Option B (42.3 million ounces)
include negative NPV entities and projects that are uneconomic, Gold Fields
contends that Option A and B do not conform to the definitions of Mineral
Reserves as described in the SAMREC Code, which defines a Mineral Reserve as the
economic mineable material derived from a measured or indicated resource.
Option C
Scenarios 4 and 5 under Option C exclude all projects as well as other reserve
ounces, which are not economically viable at R92, 000/kg. Therefore, Gold Fields
believes that of the fifteen sub-options presented in Harmony`s CPR, only two
are approaching compliance with SAMREC definitions for a mineral reserve, as the
Options correctly comprise only those ounces that are economically viable and
justifiable under reasonable economic circumstances.
Gold Fields continues to emphasise to its shareholders that it believes that
only those 33.7 million reserve ounces encompassed in Option C should be
considered when attempting to make an informed decision on the merits of
Harmony`s hostile bid. In comparison and as published in its 2004 Annual Report,
Gold Fields has 75.6 million attributable ounces of independently audited
mineral reserves that are economically viable at a gold price of R90, 000/kg.
Shareholders are advised to continue to reject the Harmony offer.
-ends-
Sponsor
JPMorgan
In the United States, Gold Fields Limited (`Gold Fields`) has filed a
Solicitation/Recommendation Statement with the Securities and Exchange
Commission (the `SEC`) on Schedule 14D-9 and holders of the Gold Fields Ordinary
Shares and American Depositary Shares are advised to read it as it contains
important information. Copies of the Schedule 14D-9 and other related documents
filed by Gold Fields are available free of charge on the SEC`s website at
http://www.sec.gov. Any documents filed by Harmony Gold Mining Company Limited,
including any registration statement on Form F-4 (including any prospectus
contained therein) and related exchange offer materials as well as its Tender
Offer Statement on Schedule TO, will also be available free of charge on the
SEC`s website.
The directors of Gold Fields accept responsibility for the information contained
in this document. To the best of their knowledge and belief (having taken all
reasonable care to ensure that such is the case) the information contained in
this document is in accordance with the facts and does not omit anything likely
to 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 is
illegal 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, the
Republic of Ireland or any such other jurisdiction.
This document contains `forward-looking statements` with respect to Gold Fields`
financial condition, results of operations, business strategies, operating
efficiencies, competitive position, growth opportunities for existing services,
plans and objectives of management, markets for stock and other matters.
Statements in this document that are not historical facts are `forward-looking
statements`.
These forward-looking statements, including, among others, those relating to the
future business prospects, revenues and income of Gold Fields, wherever they may
occur in this presentation, are necessarily estimates reflecting the best
judgment of the senior management of Gold Fields and involve a number of risks
and uncertainties that could cause actual results to differ materially from
those suggested by the forward-looking statements. As a consequence, these
forward-looking statements should be considered in light of various important
factors, including those set forth materials filed with or furnished to the SEC
from time to time, including Gold Fields` most recent Annual Report on Form 20-
F.
Important factors that could cause actual results to differ materially from
estimates or projections contained in the forward-looking statements include,
without limitation: overall economic and business conditions in South Africa,
Ghana, Australia and elsewhere; the ability to achieve anticipated efficiencies
and other cost savings in connection with past and future acquisitions; the
success of exploration and development activities; decreases in the market price
of gold; the occurrence of hazards associated with underground and surface gold
mining; the occurrence of labor disruptions; availability, terms and deployment
of capital; changes in relevant government regulations, particularly
environmental regulations and potential new legislation affecting mining and
mineral rights; fluctuations in exchange rates, currency devaluations and other
macroeconomic monetary policies; and political instability in South Africa,
Ghana and regionally.
Gold Fields undertakes no obligation to update publicly or release any revisions
to these forward-looking statements to reflect events or circumstances after the
date of this document or to reflect the occurrence of unanticipated events.
Information included in this document relating to Harmony and its business has
been derived solely from publicly available sources. While Gold Fields has
included information in this document regarding Harmony that is known to Gold
Fields based on publicly available information, Gold Fields has not had access
to non-public information regarding Harmony and could not use such information
for the purpose of preparing this document. Although Gold Fields is not aware of
anything that would indicate that statements relating to Harmony contained in
this document are inaccurate or incomplete, Gold Fields is not in a position to
verify information concerning Harmony. Gold Fields and its directors and
officers are not aware of any errors in such information. Subject to the
foregoing and to the maximum extent permitted by law, Gold Fields and its
directors and officers disclaim all liability for information concerning Harmony
included in this document.
Date: 12/05/2005 01:39:53 PM
Produced by the JSE SENS Department
