| Mon 3 Oct 2005, 12:09 | | Gold Fields - Releases F2005 Annual Report & Reser |
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Gold Fields - Releases F2005 Annual Report & Reserves and Resources Statement
Gold Fields Limited
(Reg. No. 1968/004880/06)
(Incorporated in the Republic of South Africa)
Share Code: GFI
ISIN Code: ZAE000018123
MEDIA RELEASE
Gold Fields - The Complete Gold Company - Releases F2005 Annual Report &
Reserves and Resources Statement
Johannesburg, 3 October 2005. Gold Fields Limited (GFI: JSE, NYSE) today
launched its Annual Report for the 2005 Financial Year together with the updated
Mineral Resource and Ore Reserve Statement under the banner `Gold Fields - the
complete gold company". The report was mailed to shareholders on Thursday, 29
September 2005.
Chairman"s Message
In his message to shareholders contained in the Annual Report, Chairman Chris
Thompson stated, "Despite the distractions of the year, the company"s
performance was remarkable; a testament to the strength of our management and
asset quality. There can be no doubt that Gold Fields" operations are
professionally and competently managed. Mining operations are well planned and
engineered, accounts are conservatively struck and internal controls
increasingly more effective."
He went on to identify the three principal strategic issues facing the Group,
"First, despite substantial inward investment over the past decade, the South
African mines are mature, getting deeper and face declining grades and rising
costs. Gold Fields is bound to become increasingly international, using its
South African base as the platform from which to grow globally."
"The second strategic issue for Gold Fields is the difficulty in finding value-
adding growth opportunities elsewhere in the world. Inflation in capital,
operating and transport costs generally is affecting the economics of new
projects almost everywhere which, when combined with the social and political
risks of entering countries where gold is found, makes growth a challenge."
"Third is meeting the demands for transformation in South Africa embodied
principally in the Mining Charter and BEE movements. The transaction with
Mvelaphanda remains a landmark example of a responsible BEE transaction. A
significant challenge for the next few years will be for Gold Fields to meet the
target for transformational representation in management. Also, although Gold
Fields has not yet received its new order mining rights, it is in good
compliance with the criteria set by the Mining Charter and anticipates that the
new order mining rights will be issued in F2006."
Chief Executive"s Review
Summarising the 2005 financial year, Chief Executive Officer Ian Cockerill
described it as "Challenging but successful, with the Group delivering a sound
operating performance. The fluctuating rand/US dollar exchange rate mitigated
against optimising our rand income, while the attempted hostile takeover bid by
Harmony was successfully defeated. The international expansion projects at
Tarkwa and St Ives were completed ahead of expectation and their benefits are
expected to make a significant contribution to Gold Fields" bottom line. The
South African mines have been successfully repositioned with a strategy aimed at
improving quality volumes and have recorded an overall robust cost performance
since September 2003."
He continued, "I would like to pay tribute to all Gold Fields" stakeholders who
stood by us during the Harmony hostile bid, be they employees or investors. We
undertake to justify their confidence in Gold Fields by improving the Group"s
performance and strengthening our shareholders" investment."
Reserves and Resources
The annual attributable reserve depletion by Gold Fields was 4.5 million ounces
of gold during F2005 and the Group remains intent on realising an additional 1.5
million ounces per annum of production from its international operations by the
end of 2009.
As at the end of June 2005, Gold Fields had attributable Reserves of 64.8
million ounces, which is 14.2 million ounces less than in the previous year. The
reduction of 14.2 million ounces includes the 10.9 million ounces associated
with the Eastern Boundary Area (EBA), which was reclassified to resource status
pending re-engineering, as well as the total mining depletion of 4.5 million
referred to above.
The reclassification of the EBA from reserve to resource was as a result of new
geological information acquired during the year.
Outlook
Looking forward to F2006, Ian Cockerill noted, "We expect the rand to remain
strong during F2006 given the robustness of the local economy and the continued
weakness of the US dollar. Input costs will increase as a result of the higher
wage environment and rising energy costs, particularly petroleum based products.
Costs are therefore expected to remain under pressure. However, there are
indications that the dollar gold price will continue its secular upward trend."
Objectives
Finally, Ian Cockerill set out the Group"s main objectives for F2006:
Raising safety performance by a further 10% towards the global standard
benchmark
Increasing gold production beyond 4.3 million ounces
Group costs targeted at or below R66,000 per kilogram
South African costs targeted at or below R70,000 per kilogram
Productivity improvements of 10% in the South African operations to reach 4.3
square metres per total employee costed
Completion of the Cerro Corona feasibility study and, if positive, commencing
development
The replenishment of depleted ounces through exploration success or the
acquisition of new ounces.
ends
Date: 03/10/2005 12:09:10 PM Produced by the JSE SENS Department
