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GFI
GOGOF
Gold Fields Limited - Quarter Ended 30 September 2006
Gold Fields Limited
Incorporated in the Republic of South Africa
Registration number 1968/004880/06
Share code: GFI
Issuer code: GOGOF
ISIN - ZAE000018123
QUARTER ENDED 30 SEPTEMBER 2006
News release
Q1 F2007 results
- Unaudited -
we deliver
Pre-Published 3
R2 billion (US$280 million) operating profit and R698 million (US$98 million)
net earnings generated for the quarter
JOHANNESBURG. 26 October 2006 - Gold Fields Limited (NYSE & JSE: GFI) today
announced net earnings for the September 2006 quarter of R698 million compared
with R618 million in the June 2006 quarter and R64 million for the September
quarter of 2005. In US dollar terms net earnings for the September 2006 quarter
were US$98 million compared with US$97 million in the June 2006 quarter and
US$10 million for the September quarter of 2005. Net earnings excluding gains
and losses on financial instruments and foreign debt net of cash and
exceptional items were R702 million (US$99 million) for the September 2006
quarter compared with R550 million (US$86 million) for the June 2006 quarter,
an increase of 28 per cent.
September 2006 quarter highlights:
* Attributable gold production decreased marginally to just over one million
ounces;
* Ore Reserve Development (ORD) costs, previously included in operating costs
at the South African operations, are now being capitalised and amortised;
* Total cash costs US$350 per ounce (June quarter - US$345 per ounce
restated);
* Net earnings of R698 million (US$98 million), increase for the fifth
consecutive
quarter;
* National power shortages in Ghana being managed at Tarkwa and Damang;
* Growth projects at Driefontein (9 shaft extension) and Kloof (KEA) commence;
* Gold Fields to acquire 50 per cent of South Deep from Barrick, increase
Western Areas" stake to 34.7 per cent with an option to go to 41 per cent, and
make a general offer to Western Areas" shareholders.
Ian Cockerill, Chief Executive Officer of Gold Fields, said:
"Gold Fields has delivered another strong performance for the first quarter of
fiscal 2007, with net earnings increasing 13 per cent from R618 million to R698
million. Despite the slight drop in production revenues increased to R4.7
billion from R4.4 billion as the rand gold price received improved 10 per cent
to R142,035 per kilogram.
Operating profit increased a further 6 per cent to R2.0 billion while group
margins remained buoyant at 42 per cent. Cost pressures continue to remain a
challenge in the current commodity cycle and we will have to be vigilant to
ensure that current gold prices, as far as possible, report to the bottom line.
We continue with our focus on inward investment and optimisation of our ore
bodies. We are investing R25 billion in South Africa, through the depth
extension projects at Kloof and Driefontein and our bid for the South Deep
asset. These investments will provide Gold Fields with a solid foundation from
which to pursue our commitment to international growth."
Stock data
Number of shares in issue
- at end September 2006 495,505,475
- average for the quarter 495,449,657
Free Float 100%
ADR Ratio 1:1
Bloomberg / Reuters GFISJ / GFLJ.J
JSE Limited - (GFI)
Range - Quarter ZAR126.11 - ZAR173.80
Average Volume - Quarter 1,875,952 shares / day
NYSE - (GFI)
Range - Quarter US$17.23 - US$24.48
Average Volume - Quarter 1,479,627 shares / day
Salient features
South African Rand
Quarter
Restated
Restated
September June September
2005 2006 2006
Gold produced* 30,892 31,669 31,262 kg
Total cash costs 67,212 70,908 79,862 R/kg
Tons milled 11,888 12,651 12,858 000
Revenue 91,669 128,974 142,035 R/kg
Operating costs 191 199 215 R/ton
Operating profit 738 1,873 1,987 Rm
Operating margin 24 43 42 %
64 618 698 Rm
Net earnings
13 125 141 SA c.p.s.
61 607 692 Rm
Headline earnings
12 123 140 SA c.p.s.
Net earnings excluding gains
and losses on financial 69 550 702 Rm
instruments and foreign debt
net of cash and 14 111 142 SA c.p.s.
exceptional items
United States Dollars
Quarter
Restated
Restated
September June September
2006 2006 2005
Gold produced* oz (000) 1,005 1,018 993
Total cash costs $/oz 350 345 321
Tons milled 000 12,858 12,651 11,888
Revenue $/oz 622 628 437
Operating costs $/ton 30 31 29
Operating profit $m 280 293 113
Operating margin % 42 43 24
$m 98 97 10
Net earnings
US c.p.s. 20 20 2
$m 98 95 9
Headline earnings
US c.p.s. 20 19 2
Net earnings excluding gains
and losses on financial $m 99 86 11
instruments and foreign debt
net of cash and US c.p.s. 20 17 2
exceptional items
* Attributable - All companies wholly owned except for Ghana (71.1%)
and Choco 10 (95%).
Change in accounting policy - Ore Reserve Development (ORD) costs are
capitalised and amortised.
Health and safety
We regret to report nine fatal injuries during the September quarter with six
of these accidents the result of falls of ground and seismicity. All of the
fatalities occurred at the South African operations. The fatal injury frequency
rate was 0.25 per million man hours worked, an improvement on the previous
quarter"s figure of 0.44. The lost day injury frequency rate regressed from
11.75 to 13.15, the serious injury frequency rate regressed from 6.6 to 7.1 and
the days lost frequency rate regressed from 378 to 414 per million man hours
worked.
Management is concerned about the increase in the severity of the accidents
during the quarter and is actively seeking improvements that meet the Ontario
safety standards on all of our mines. The behavioural interventions at Bombodi
at Beatrix, Laphuma Ilanga at Driefontein and Eyethu at Kloof will continued
during the quarter.
Financial review
Quarter ended 30 Sept ember 2006 compared to quarter ended 30 June 2006
Revenue
Attributable gold production decreased by 1 per cent from 1,018,000 ounces in
the June 2006 quarter to 1,005,000 ounces in the September quarter. Production
at the South African operations decreased 3 per cent to 649,000 ounces,
compared with 669,000 ounces in the June quarter.
Attributable production at the international operations increased 2 per cent
from 349,000 ounces to 356,000 ounces.
At the South African operations, the increase in gold production at Kloof and
Beatrix was more than offset by a 10 per cent decrease at Driefontein due to
lower underground grades. The decrease in grade resulted from depletion of high
grade panels at 4 shaft and lower grades being mined at 6, 7 and 8 shafts. This
was exacerbated by increased seismicity, especially at 4 shaft. The increases
at Kloof and Beatrix resulted from an increase in underground ore processed.
The international operations had an overall increase in production with
increased gold output from the Australia operations offset by lower gold output
at the Ghana and Venezuela operations. Gold production at Tarkwa was marginally
lower than the June quarter due to lower grades offset by additional volumes
treated.Damang gold production reduced by 13 per cent on the back of lower
grades due to having depleted the high grade Amoanda pit as forecast
previously. Production at Damang will return to more historic levels only in
the March 2007 quarter once ore from the Damang cutback comes on line together
with increased volumes from the Juno 2 South West (J2SW) pit.
Choco 10 had a disappointing quarter primarily due to the failure of the ball
mill clutch which affected 29 days of mill throughput. At St Ives the increase
in gold production came from increased throughput from the Lefroy mill, which
had a five day maintenance shutdown in the June quarter. At Agnew, gold
production increased 20 per cent, mainly due to increased underground grades
and tonnages from the Waroonga complex.
The average quarterly US dollar gold price decreased from US$628 per ounce in
the June quarter to US$622 per ounce this quarter, a 1 per cent decrease. The
average rand/US dollar exchange rate weakened by 11 per cent quarter on
quarter, averaging R7.10, compared with R6.39 in the June quarter. As a result
of the weaker rand the rand gold price increased from R128,974 per kilogram to
R142,035 per kilogram, a 10 per cent improvement.
The increase in the rand gold price achieved resulted in revenue increasing
from R4,369 million (US$683 million) to R4,732 million (US$667 million) quarter
on quarter.
Operating costs
Over the past year we have provided a pro-forma total cash cost for the South
African operations in addition to the actual disclosed cash cost. This
pro-forma cash cost was calculated on the basis that Ore Reserve Development
(ORD) was, like our peers, capitalised to the Balance Sheet.
As from 1 July 2006 the Group accounting policy has changed; ORD will be
capitalised retrospectively, with the resultant assets being amortised on a
units of production basis - see page 10 for further details. As a result, all
prior year and quarterly results have been restated in line with this policy.
Operating costs for September 2006, amounted to R2,764 million (US$389 million)
compared with R2,519 million (US$394 million) in the June quarter, an increase
of 10 per cent. The increase at the South African operations amounted to 5 per
cent, from R1,563 million (US$244 million) to R1,644 million (US$232 million).
This was due to the 6 per cent annual wage increase, increased stoping at
Beatrix, additional development across all operations and normal inflationary
increases. Savings from the cost saving initiatives, as detailed under Project
500 on page 3, assisted in offsetting a portion of these cost increases.
Costs at the international operations, including gold-in-process movements,
amounted to R1,101 million (US$155 million), 18 per cent more than the
R933 million (US$146 million) incurred in the June quarter. Eleven per cent
of this increase was due to the weakening of the rand.
Costs at Tarkwa and Damang increased due mainly to the cost of on-mine power
generation in line with the national load shedding requirements as a
consequence of previously reported power shortages. Costs at Tarkwa were also
impacted by an increase in fleet maintenance costs as forecast. Operating costs
at Choco 10 increased as a result of higher processing costs and general and
administration costs (G&A). Processing costs increased as a result of buying in
process water and as a result of increased reagent and contractor costs. G&A
increased primarily as a result of the full inclusion of their share of Gold
Fields overheads. At St Ives, operating costs increased by 9 per cent
reflecting the increase in mining volume and input costs, primarily power and
fuel. Increased waste normalisation charges were the main driver for the
increased St Ives costs with a total of A$7 million being added as a result of
the shortening of the lives of Mars and West Revenge open pits. In Australian
dollar terms Agnew reported a decrease of 21 per cent or A$4 million in costs
quarter on quarter despite a significant increase in production. The prime
driver for this reduction was a change in estimate related to the waste
normalisation for the Songvang open pit.
Effect of capitalising Ore Reserve Development (ORD) on unit costs.
Ore Reserve Development has been capitalised in this quarter"s results and
retrospectively in the comparative results in and included throughout this
report. This brings the its accounting treatment in line with our peers and is
the preferred methodology for accounting for ORD in the industry. The impact of
the capitalisation is given in the tables at the bottom of page 16 (impact on
total cash costs) and page 21 (impact on cost per ton milled).
Operating margin
The net effect of the changes in revenue and costs, after taking into account
gold-in-process movements, was an operating profit of R1,987 million (US$280
million). This is 6 per cent higher than the R1,873 million (US$293 million)
achieved in the June quarter. The Group operating margin was virtually
unchanged at 42 per cent. The margin at the South African operations increased
from 42 per cent to 43 per cent, while the margin at the international
operations decreased from 45 to 41 per cent in line with the increase in costs.
Amortisation
Amortisation increased from R617 million (US$97 million) in the June quarter to
R681 million (US$96 million) in the September quarter. Amortisation at the
Australian operations increased by R76 million (A$12 million) split more or
less evenly between St Ives and Agnew. At St Ives the increase was mainly due
to an increase in mined ounces and an increase in rates due to a decline in
reserve. At Agnew, the increase was due to an increase in the Songvang
amortisation rate due to the capitalisation of pre- strip development.
Amortisation includes ORD at the South African operations.
Other
Net interest and investment income increased from a net paid of R5 million
(US$1 million) for the June quarter to an income of R17 million (US$2 million)
in the September quarter and reflects interest received of R60 million (US$8
million) partially offset by the interest cost on the Mvela loan of R27 million
(US$4 million) and interest on offshore debt raised to partly finance the
acquisition of Bolivar of R16 million (US$2 million). The out performance of
certain of the Group"s investments contributed to the increase in net interest.
The loss on foreign debt, net of cash, of R3 million (US$1 million), compares
with a gain of R40 million (US$7 million) in the June quarter. The June
quarter"s gain consists largely of a currency conversion adjustment arising
from a change in the functional currency from US dollars to rands of one of the
Group"s offshore subsidiary companies in terms of IAS 21 (revised) - Effects of
changes in foreign exchange rates.
The loss on financial instruments of R9 million (US$1 million) compares with a
gain of R24 million (US$4 million) in the June quarter. This quarter"s loss
comprises mainly marked to market losses on a new diesel hedge taken out in
Ghana partially offset by a marked to market gain on rand/US dollar forward
cover. More details on these financial instruments are given on page 15 of this
report.
Exploration
Exploration expenditure decreased from R94 million (US$15 million) in the June
quarter to R66 million (US$9 million) in the September quarter. Please refer to
the Exploration and Corporate Development section for more detail.
Taxation
Taxation for the quarter amounted to R464 million (US$65 million) compared with
R475 million (US$74 million) in the June quarter. The tax provision includes
normal and deferred taxation on all operations together with government
royalties at the international operations. The decrease was partially due to
the decrease in the effective tax rate in Ghana from 26.5 per cent to 25 per
cent with effect from 1 July 2006.
Earnings
Net profit attributable to ordinary shareholders amounted to R698 million
(US$98 million) or 141 SA cents per share (US$0.20 per share), compared with
R618 million (US$97 million) or 125 SA cents per share (US$0.20 per share) in
the previous quarter and represents an increase of 13 per cent.
Headline earnings i.e. earnings less the after tax effect of asset sales,
impairments and the sale of investments, was R692 million (US$98 million) or
140 SA cents per share (US$0.20 per share), compared with earnings of R607
million (US$95 million) or 123 SA cents per share (US$0.19 per share) last
quarter.
Earnings excluding exceptional items as well as net gains and losses on
financial instruments and foreign debt net of cash amounted to R702 million
(US$99 million) or 142 SA cents per share (US$0.20 per share), compared with
earnings of R550 million (US$86 million) or 111 SA cents per share (US$0.17 per
share) reported last quarter.
Cash flow
Cash flow from operating activities for the quarter was R1,609 million (US$227
million), which is 8 per cent lower than the operating cash flow generated in
the June quarter of R1,742 million (US$267 million). This decrease in cash flow
reflects the increased tax payments relating to the fiscal 2006 year end but
processed in the September quarter, which more than offsets the increase in
operating profit.
Dividends paid amounted to R556 million (US$78 million) of which R11 million
(US$2 million) was paid to outside shareholders in Ghana compared with R46
million (US$7 million) last quarter.
Capital expenditure amounted to R1,188 million (US$167 million) compared with
R876 million (US$137 million) in the June quarter, an increase of R312 million.
Of this increase R237 million relates to amounts spent on the construction of
the Cerro Corona mine in Peru, which increased from R124 million (US$19
million) in the June quarter to R361 million (US$51 million) in the September
quarter. The balance of the increase was at the Australian operations and at
Choco 10.
Choco 10 increased expenditure by R50 million (US$7 million) to R77 million
(US$11 million) as the mine increased exploration drilling and the plant
upgrade nears completion.
The Australian operations incurred capital expenditure of R174 million (A$32
million), compared with R122 million (A$26 million) in the June quarter.
Expenditure at St Ives of R116 million (A$22 million) increased by over R16
million (A$3 million) due to increased exploration R8 million (A$2 million) and
additional development costs R7 million (A$1 million). At Agnew, the increase
of R26 million (A$4 million) was as a result of capitalised pre-strip
development at Songvang.
At the Ghanaian operations, capital expenditure was similar to the June quarter
at R138 million (US$20 million). The majority of this expenditure was incurred
on the Damang and Teberebie (Tarkwa) cutbacks, which amounted to R43 million
(US$6 million) and R26 million (US$4 million) respectively. Tarkwa incurred R31
million (US$4 million) on additional owner mining equipment to improve
productivity.
At the South African operations, capital expenditure was similar to the
September quarter at R433 million (US$61 million).
Spending on investments amounted to R121 million (US$17 million) the majority
of which was the purchase of an additional 3 million shares in Western Areas on
12 July 2006. Please refer to the Corporate section for more detail.
The cash outflow from financing activities amounted to R169 million (US$24
million), which included the half yearly loan repayment on the Mvela loan and a
loan repayment to the outside shareholders of Tarkwa.
Net cash outflow for the quarter was R423 million (US$60 million). After
accounting for a translation adjustment of R29 million (US$3 million), the cash
balance at the end of September was R1,224 million (US$161 million). The cash
balance at the end of June was R1,618 million (US$218 million).
Detailed and operational review
South African Operations
Project 500
Project 500 was initiated in September 2003 to increase revenue and reduce
costs through two sub-projects i.e. Project 400 and Project 100. These
projects have proved successful and led to additional projects, Project 100+
and Project Beyond as detailed below.
Project 400
Project 400 was aimed at improving revenue such that an additional R400 million
(US$60 million) per annum could be generated on a sustainable basis. This was
to be achieved through a basket of productivity initiatives; by eliminating
non-contributing production and replacing low-grade surface material with
higher margin underground material - all aimed at improved quality volumes. The
objective is to increase mining volumes whilst maintaining yields as close as
possible to life of mine reserve yields.
Quarter ended F2005 F2006* Sep
2006*
Driefontein:
Life of mine head grade as per published
declarations 8.1 8.0 8.0
Life of mine head grade adjusted for
estimated metallurgical recoveries 7.8 7.8 7.8
Driefontein (underground yields achieved) 8.3 8.1 7.5
Kloof:
Life of mine head grade as per published
declarations 10.5 10.0 10.0
Life of mine head grade adjusted for
estimated metallurgical recoveries** 10.2 9.7 9.7
Kloof (underground yields achieved) 9.1 8.7 8.7
Beatrix:
Life of mine head grade as per published
declarations 5.5 5.5 5.5
Life of mine head grade adjusted for
estimated metallurgical recoveries 5.3 5.3 5.3
Beatrix (underground yields achieved) 5.0 5.2 4.7
* Based on reserve statement at 31 December 2005.
** Kloof"s life of mine head grade as adjusted for estimated metallurgical
recoveries is higher than that currently achieved due to the high grade
main shaft pillar, mining of which only commences in the F2007 year.
Project 100+
The success of Project 100+ over the last year continued in the first quarter
of the 2007 financial year with new initiatives planned for later in the year.
Current projects include a labour optimisation project with the long term
objective of improving productivity by way of a healthier work force.
The Eskom demand side management project focusing on managing hot and cold
water systems is expected to realise R15 million per annum. Further projects
awaiting Eskom approval include the roll-out of successful water control as
well as thermal ice storage, compressed air and ventilation fan control. The
initiative to replace diesel operated locomotives with battery operated
locomotives has experienced steady progress. Replacement locomotives are
expected to be delivered during the second half of financial 2007. The closure
of pumping from Kloof 5 shaft, part of the Footprint Reduction Project, which
allows the 5 shaft water to flow to 10 shaft for pumping continues to deliver
monthly savings.
The savings for financial 2007 are expected to be around R14 million. Further
to this The installation of equipment for the Pump Efficiency Monitoring
initiative is at an advanced phase of implementation, with the efficiency
monitoring commencing in the December quarter and anticipated savings of up to
R9 million anticipated in financial 2008.
Project Beyond
Project Beyond started out as a procurement transformation and strategic
sourcing value delivery initiative that was initiated in 2004. The target was
to deliver benefits to Gold Fields of between R200 to R300 million per annum
over a 3 year period. Contracted savings were delivered on historical baseline
during financial 2005 and financial 2006 of around R159 million, together with
an estimated R18 million additional value on performance based contracts
relating to explosives at pilot shafts and R50 million inflationary cost
avoidance. Total value delivery has effectively exceeded the R200 million low
range target within a two-year period.
Continued integrated supply chain optimisation during financial 2007 aims to
stretch total value delivery to the upper range of the target, in spite of
prevailing commodity price pressures. However, the impact of the world wide
resources boom should not be under estimated.
South Africa is currently operating under extreme inflationary cost pressures
with PPI rising to 9.2 per cent per annum (year on year to 31 August 2006).
This level of inflationary increase has a significant input cost impact on
suppliers of the mining industry with mining companies often absorbing a major
portion of costs increases to ensure sustainability of supply. Commodities
experiencing continued and significant global and local increases in prices are
steel, copper, nickel, meat and fuel to mention a few. Global crude-oil prices
as a lead indicator for fuel recently did show some signs of softening, but
only after having had a major cost impact over the last quarter on baseline
fuel and transport related costs and is still subject to global political
uncertainties and sensitivities. Labour related cost increase implications have
also been concerning and rate of exchange implications should also not be under
estimated.
Continued integrated supply chain initiatives this past quarter delivered
additional planned and contracted annualised total cost benefits estimated at
around R27 million. This resulted mainly from a rail upgrade tender process (in
final adjudication, estimated around R18 million), and scrap sales
re-negotiated contracts of around R7 million.
December quarter will include specific focus on total cost of slurry and mud
pumps, salvage reclaim optimisation models, underground services risk
mitigation models (i.e. selectively reducing higher risk outsource contracts),
drill steel issue and refurbishment controls and total cost optimisation and
collaborative capital procurement.
Global / International Supply Chain and Strategic
Sourcing Optimisation
During financial 2006 development was focused on understanding global synergies
and the need for better improved regional information and value delivery.
Although more value was probably delivered, specific quantified value delivery
during financial 2006 indicated over US$13 million (R80 million) in total cost
benefits through integrated supply chain initiatives across Gold Fields
International operations. These initial quantified benefits were mainly as a
result of a focused cost optimisation project in Australia. Furthermore,
benefits were also derived from an aggregated diesel contract between Australia
and Ghana, as well as changing the Peru capital project diesel purchasing
arrangement from a spot-buy to a longer term fixed contract arrangement.
The strategy going forward will be focused on decentralised regional
enablement, together with centrally supported global standards and knowledge
sharing, procurement intelligence leverage, as well as prioritised key contract
and co-ordinated project synergies across all regions.
For financial 2007, quantified first quarter estimated benefits added over US$3
million (R20 million). These benefits were derived largely through the
Australian cost optimisation project, together with newly negotiated multi-year
contracts in Australia of US$2 million (R14 million).
Strategic and non-quantified key initiatives currently in progress, with a
continued focus into quarter two, involves a possible Ghanaian earthmoving tyre
re-treading project to mitigate the risk of potential shortages and a local
central warehousing project for storage and distribution of imported product.
In Venezuela, initiatives include optimisation of plant reagent usage, global
tyre supply strategies, global dry-cyanide strategic partnering model
development, group logistics and shipping optimisation.
These initiatives are focused on total cost savings, as well as guarantee of
supply to ensure sustainability of operations. Due to the continued global
commodity price pressures and supply risk, a continued focus will be on longer
term strategic partnering together with total cost optimisation.
Driefontein
Restated
September June
2006 2006
Gold produced - kg 8,009 8,869
- 000"ozs 257.5 285.1
Yield - underground - g/t 7.5 8.7
- combined - g/t 4.7 5.1
Total cash costs - R/kg 77,163 67,200
- US$/oz 338 327
Gold production at 257,500 ounces decreased by 10 per cent from 285,100 ounces
when compared with the June quarter. The drop in production is attributable to
the underground grade which decreased from 8.7 to 7.5 grams per ton for the
quarter. This decrease in grade was due to the depletion of high grade panels
at 4 shaft, a reduction quarter on quarter in mining the high grade shaft
pillar where mining was stopped due to instability at 4 shaft and lower grades
being mined at 6, 7 and 8 shaft.
Underground tonnage increased from 924,000 tons in the June quarter to 964,000
tons in the September quarter as a result of a strong focus on underground
mining. This increase is required to compensate for the depletion in surface
mining resources. Surface tons declined from 814,000 tons to 738,000 tons
partially offset by the surface yield which improved from 1.0 to 1.1 grams per
ton.
Operating costs increased by 5 percent from R622 million (US$97 million) to
R650 million (US$92 million) as a result of the annual salary increase, above
inflation increases on timber and increased expenditure on secondary support
due to the increased seismicity. As a result of the increase in costs and lower
production, total cash costs increased 15 per cent in rand terms from R67,200
to R77,163 per kilogram. In US dollar terms, total cash costs increased from
US$327 per ounce to US$338 per ounce.
Operating profit decreased by 7 per cent from R522 million (US$82 million) in
the June quarter to R487 million (US$69 million) in the September quarter as a
consequence of the lower gold production and increase in costs, which was only
partially offset by the higher rand gold price.
Capital expenditure decreased from R169 million (US$26 million) to R144 million
(US$20 million) for the September quarter. The major portion of this
expenditure was spent on the 1 and 5 shaft projects, the 4 shaft pillar
extraction and ore reserve development.
The instability experienced at 4 shaft pillar during the quarter has
necessitated a redesign of the shaft pillar extraction, which will enable
Driefontein to extract the pillar from other shafts. This will require the
development of additional footwall infrastructure, and whilst this is taking
place the pillar extraction will be delayed. This will result in gold
production for the next two quarters reducing to approximately 7.5 tons per
quarter, increasing to about 7.8 tons in the June 2007 quarter.
Kloof
Restated
September June
2006 2006
Gold produced - kg 7,549 7,340
- 000"ozs 242.7 236.0
Yield - underground - g/t 8.7 8.7
- combined - g/t 7.6 7.4
Total cash costs - R/kg 78,077 77,534
- US$/oz 342 377
Gold production at Kloof increased by 3 per cent, from 236,000 ounces to
242,700 ounces in the September quarter. This was due to an increase in
underground tonnage compared with the previous quarter due to the continued
effort to restore volumes by way of increased development. Surface tons milled
decreased by 15 per cent from 166,000 tons to 141,000 tons, as a result of
being displaced by underground tonnage.
The operating costs at R616 million (US$87 million) increased 4 per cent
compared with the previous quarter"s cost of R592 million (US$93 million). This
increase was mainly due to the increased underground production, the increase
in development and the impact of the annual wage increase. This resulted in a 1
per cent increase in the total cash costs to R78,077 per kilogram, compared
with the restated R77,534 per kilogram in the June quarter. In US dollar terms
total cash costs decreased by 9 per cent to US$342 per ounce. Operating profit
improved from R358 million (US$56 million) for the previous quarter to R455
million (US$64 million) for the September quarter due to the increase in gold
output and the higher gold price.
Capital expenditure increased from R141 million (US$22 million) to R184 million
(US$26 million) for the current quarter mainly due to increased expenditure at
4 sub vertical shaft and additional ore reserve development.
Gold production for the December quarter is forecast to be similar to the
September quarter.
Beatrix
Restated
September June
2006 2006
Gold produced - kg 4,636 4,594
- 000"ozs 149.1 147.7
Yield - underground - g/t 4.7 5.2
Total cash costs - R/kg 77,330 73,313
- US$/oz 339 357
Gold production at Beatrix increased by 1 per cent from 147,100 ounces in the
June quarter to 149,050 ounces in the September quarter. This increase is
attributed to a 6 per cent higher stoping volume and a resultant increase in
tons milled, from 884,000 to 984,000. This was partially off-set by lower
grades mined. The overall yield decreased by 10 per cent from 5.2 grams per ton
to 4.7 grams per ton, mainly due to lower grade areas being mined during the
quarter at South and West shafts.
Operating costs quarter on quarter increased by 8 per cent from R350 million
(US$55 million) to R379 million (US$53 million). This was mainly due to the
increase in area mined, additional development and the annual wage increases.
Total cash costs increased from R73,313 per kilogram (US$357 per ounce) in the
June quarter to R77,330 per kilogram (US$339 per ounce) in the September
quarter.
Beatrix posted an operating profit of R284 million (US$40 million) in the
quarter compared with R244 million (US$38 million) in the June quarter due to
the increased gold price.
Capital expenditure at R105 million (US$15 million) decreased from R132 million
(US$20 million) in the June quarter. Capital development volumes increased by
20 per cent quarter on quarter to 2,248 metres, predominantly at the North and
West sections.
Gold production is forecast to be marginally higher in the December quarter as
production increases at the West section. Capital expenditure will show an
increase as capital ore reserve development continues.
International Operations
Ghana
Tarkwa
Restated
September June
2006 2006
Gold produced - 000"ozs 173.6 176.0
Yield - Heap leach - g/t 0.8 0.9
Yield - CIL plant - g/t 1.5 1.6
Yield - Combined - g/t 1.0 1.0
Total cash costs - US$/oz 344 321
For the quarter Tarkwa processed 5.51 million tons and produced 173,600 ounces
of gold at an average yield of 1.0 gram per ton. This compares to 5.38 million
tons processed producing 176,000 ounces in the June quarter. The combined yield
was similar to last quarter as a greater proportion of ore was treated through
the higher yielding CIL plant.
Total tons mined including capital stripping, increased from
23.4 million tons in the previous quarter to 24.4 million tons for the current
quarter. Ore tons moved for the September quarter were 3 per cent higher
at 5.2 million tons at a mined grade of 1.33 grams per ton compared with a
mined grade of 1.36 grams per ton in the June quarter. The overall strip
ratio for the quarter was 3.16, slightly lower than the 3.36 in the June
quarter.
Total feed to the heap leach sections was 4.2 million tons at a head grade of
1.12 grams per ton compared with 4.3 million tons at a head grade of 1.21 grams
per ton for the June quarter. There was a net gold-in-process release of 1,524
ounces. Overall, the heap leach sections produced 110,100 ounces for the
quarter compared with the 119,500 ounces achieved in June.
The total feed to the CIL plant was 19 per cent higher than the previous
quarter at a record 1.32 million tons. The increase in plant throughput was
driven primarily by an improvement in the ability to blend ore to the SAG mill.
The CIL plant produced 63,500 ounces in the September quarter compared with
56,500 ounces in the previous quarter.
Operating costs, including gold-in-process adjustments, at US$60 million (R424
million) were US$4 million (R63 million) higher than the previous quarter. Half
of this increase was due to the cost of on-site power generation in line with
national load shedding requirements and an increase in earthmoving machine
maintenance and repair costs. Added to this was an increase in fuel costs, the
increase in tonnage treated and an increase in labour costs as an outcome of
the wage settlement. A diesel hedge was put into place early in the quarter to
cap the diesel fuel cost during the financial year - refer page 15 for more
detail.
Operating cost per ton processed was US$10.95 as against US$10.75 in the June
quarter. A recent increase in the cost of cyanide negatively influenced the
process costs of the heaps and CIL. Total cash costs at US$344 per ounce
compared with the June quarter"s US$321 per ounce, an increase of 7 per cent.
This increase was caused primarily by the impact of the cost drivers mentioned
above.
Operating profit at US$49 million (R344 million) decreased by US$5 million
compared with the June quarter due to the combination of a slightly lower gold
price, higher costs and marginally less gold produced.
Capital expenditure remained at around US$13 million (R90 million) for the
quarter. The main areas of capital expenditure were the purchase of secondary
mining fleet, capital waste mining (Teberebie cutback) and a down payment on a
new ball mill. The Tarkwa expansion project feasibility continued to be
advanced during the quarter and a decision on whether and how to proceed should
be made by calendar year end.
Gold production for the December quarter is expected to be similar to the
current quarter and in line with an annualised throughput of around 700,000
ounces per annum. Unit costs are expected to remain under pressure on the back
of the continued cost of on-mine power generation. The purchase of primary and
secondary mining equipment totalling US$25 million (R186 million) will increase
mining flexibility and help maintain unit costs at similar levels.
Damang
Restated
September June
2006 2006
Gold produced - 000"ozs 48.5 55.7
Yield - g/t 1.1 1.3
Total cash - US$/oz 438 315
Gold production decreased 13 per cent from 55,700 ounces during the June
quarter to 48,500 ounces in the September quarter. This decrease is
attributable to the lower feed grade to the plant, from 1.5 grams per ton to
1.2 grams per ton in the September quarter. The lower feed grade was due to the
depletion of the Amoanda pit, previously a source of high-grade fresh ore, and
a higher percentage of lower grade stockpiled material being treated.
Furthermore, the B4 fresh ore surface stockpile was virtually depleted and
replaced by the lower grade B3 surface stockpile.
The mill throughput for the quarter at 1,317,000 tons was marginally higher
than the 1,302,000 tons processed in the June quarter and was not affected by
the load shedding in Ghana.
Total tons mined increased from 4.3 million tons to 5.1 million tons. Ore mined
for the quarter was 7 per cent lower at 818,000 tons and reflects the lower
fresh ore tonnages from the Amoanda pit. Additional oxide ore tonnages were
mined from the Tomento pits, which are now fully into production. The above
initiatives and the continued development of the Damang cutback as well as the
J2SW and Tomento pits, resulted in an increase in the strip ratio from 3.8 in
the June quarter to 5.2 in the September quarter. The Tomento pits will remain
the main source of oxide feed to the plant in the near future, while increasing
volumes of fresh ore will be mined from the Damang pit cutback and J2SW pits,
offsetting lower grade fresh ore B3 surface stockpile material.
Operating costs, including gold-in-process adjustments, increased to US$21
million (R150 million) from US$19 million (R122 million) last quarter. This
increase was due to on-site power generation in the later part of the quarter
(in line with national load shedding requirements) and a gold-in- process (GIP)
inventory charge of US$1 million (R8 million) for the quarter compared with a
credit adjustment of US$1 million (R4 million) in June quarter. The cost per
ton milled increased slightly from US$15.05 to US$15.23. Total cash costs
increased from US$315 per ounce to US$438 per ounce reflecting the lower gold
production and higher operating costs. A diesel hedge was put into place at the
start of the quarter to cap the diesel fuel cost during financial 2007 - refer
page 15 for more detail.
Operating profit decreased from US$16 million (R102 million) to US$9 million
(R64 million).
Capital expenditure was similar to the June quarter at US$7 million (R48
million), the majority of which was incurred in mining the Damang pit cutback.
The installation of an additional leach tank at a cost of US$3 million to
increase recovery was approved during the quarter. In addition, approval was
given for the mine to raise the tailings facilities at a cost of US$7 million.
Gold production in the December quarter should be similar to the September
quarter. In the second half of the financial year gold output is expected to
increase as a greater proportion of lower grade fresh ore stockpile is replaced
by fresh ore. The fresh ore will be sourced from the Damang cutback and J2SW
open pit as these pits are brought into production. Unit costs are expected to
remain under pressure on the back of the continued cost of on-mine power
generation.
Venezuela
Choco 10 Restated
September June
2006 2006
Gold sold - 000"ozs 17.2 22.8
Gold produced - 000"ozs 16.2 19.9
Yield - g/t 1.7 1.8
Total cash - US$/oz 458 293
Gold production for the quarter decreased 19 per cent from 19,900 ounces to
16,200 ounces. During July and August production was affected by failure of the
ball mill drive train which restricted plant throughput capacity for a total of
29 days and affected recoveries by coarsening the grind. This was compounded by
the need to deliver fine material from the low grade Pisolita pit when
operating with the SAG mill only. As a result total mill throughput for the
quarter was 306,000 tons compared with 348,000 tons last quarter.
Yield was slightly lower at 1.7 grams per ton.
Mining continued in the Pisolita and Rosika pits, and a cutback at the Coacia
pit is underway. Mined quantities increased month on month during the quarter,
but remained lower than planned, mainly as a result of equipment availability
issues. The grade mined at 1.87 grams per ton includes low grade material that
was stockpiled separately, allowing an achieved processed head grade of 1.98
grams per ton.
Water levels in the reservoir supplying the mine remain low following lower
than normal seasonal rainfall. A bore-field is being developed to provide a
long term reliable water source. In addition to this a permit application has
been filed for the withdrawal of water from the nearby Yuruari River and
discussions are underway with underground mines in the area for the supply of
their excess water to Choco 10.
Operating costs, including gold in process movements, increased from US$7
million (R44 million) to US$9 million (R66 million) as a result of higher
processing costs and general and administration costs (G&A). Processing costs
increased as a result of buying in process water and as a result of increased
reagent and contractor costs incurred to repair the mill. G&A increased
primarily as a result of the full inclusion of Gold Fields overheads. Total
cash costs as a result of the lower production and increased costs amounted to
US$458 per ounce compared with US$293 per ounce in the June quarter. Operating
profit decreased to US$1 million (R8 million) for the quarter, compared with
US$7 million (R46 million) in the June quarter due to the above factors and the
slightly lower gold price.
The recapitalization of the process plant is progressing well, with some US$1
million in capital expenditure included for the quarter. The exploration
programme advanced on schedule with the completion of 19,700 metres of diamond
drilling and 13,400 metres of RC drilling. Drilling was primarily focused on
the down-dip extension of the VBK mineralization. High-grade mineralization has
been defined over 600 meter strike and remains open both along strike and
down-dip. An additional diamond drill programme has commenced which aims to
define the high-grade mineralization over 1.5 kilometer strike by the end of
the year. Total capital expenditure amounted to R77 million (US$11 million)
compared with R27 million (US$4 million) the previous quarter.
The mine is currently processing an average of more than 5,000 tons per day and
maintenance work to fully repair the ball mill is scheduled for the December
quarter. This will require a mill shutdown of approximately four days. Gold
production for the December quarter is expected to improve on current levels on
the back of higher mining grades and mill throughput. Unit costs, as a result
will reduce in the coming quarter. Capital expenditure, including exploration,
is forecast to increase in the December quarter.
Australia
St Ives
Restated
September June
2006 2006
Gold produced - 000"ozs 123.4 116.4
Yield - Heap leach - g/t 0.4 0.4
Yield - Milling - g/t 3.0 3.1
Yield - Combined - g/t 2.3 2.2
Total cash costs - A$/oz 564 522
- US$/oz 429 389
Gold production for the quarter was 123,400 ounces, 6 per cent up on the last
quarter"s 116,400 ounces. This increase was largely due to the Lefroy mill
achieving higher throughput, as last quarter included a five day maintenance
shutdown. Gold production from the Lefroy mill was 116,200 ounces compared with
108,700 ounces achieved in the June quarter. Gold produced from heap leach
amounted to 7,200 ounces compared with 7,700 ounces in the June quarter, the
decrease resulting from slow leaching of Mars ore.
Total open pit movements increased whilst strip ratios decreased during the
quarter, as the Thunderer open pit produced its first ore. During the quarter
3.2 million bank cubic metres (BCM"s) of ore and waste were mined compared with
2.8 million BCM"s in the previous quarter. The average strip ratio decreased
from 7.6 to 6.3. Open pit operations produced 1.2 million tons of ore for
the quarter compared with 1.0 million tons the previous quarter, while mine
head grade increased to 2.3 grams per ton from 2.0 grams per ton. This was
largely due to the use of a smaller excavator in the Agamemnon open pit
and better control over the mining of ore blocks which minimised dilution.
Underground operations produced 381,500 tons of ore at a mined head grade of
4.8 grams per ton for the quarter compared with 455,800 tons at 4.3 grams per
ton in the previous quarter. At the Leviathan complex all production came from
the Conqueror zone as planned due to the completion of East Repulse underground
operation. Total tonnage was well down as a result and only partially offset by
higher grade, resulting in lower contributed ounces quarter on quarter. Argo
underground also produced lower tonnage but at an increased grade.
Operating costs, including gold-in-process movements, increased to A$69 million
(R372 million) from A$65 million (R307 million) in the June quarter, reflecting
the 5 per cent increase in volumes mined mainly from the open pits as described
above and the increase in processing at the Lefroy mill. Increases in input
costs, principally power and fuel and accelerated waste charges added to the
cost increase quarter on quarter. Waste costs are brought to account over the
life of each pit and adjustments where required for changes in reserve
estimates. The price participation royalty calculated at 10 per cent of the
average quarterly gold price above A$600 per ounce, amounted to A$3 million
(R14 million), similar to last quarter. Total cash costs increased to A$564 per
ounce for the quarter from A$522 in the previous quarter due to the higher
input costs.
Operating profit at A$32 million (R172 million) was marginally below the
previous quarter"s A$33 million (R159 million) due to the lower average gold
price and higher operating costs which were only partially offset by the
increase in production.
Capital expenditure for the September quarter was A$22 million (R116 million)
compared with A$19 million (R90 million) in the June quarter. Mine development
capital was higher than the previous quarter at A$13 million (R69 million)
compared with A$11 million (R58 million) last quarter. The majority of this
expenditure was incurred at Argo underground, Thunderer and Delta North
pre-strip and the number 3 heap leach pad. Capitalised exploration expenditure
amounted to A$8 million (R41 million) for the quarter, compared with A$6
million (R29 million) in the June quarter.
Gold production and unit cost for the December quarter are expected to be
similar to the September quarter.
Agnew
Restated
September June
2006 2006
Gold produced - 000"ozs 59.2 49.3
Yield - g/t 5.4 4.7
Total cash costs - A$/oz 276 400
- US$/oz 209 298
Gold production for the quarter was 59,200 ounces, 20 per cent higher than the
previous quarter"s 49,300 ounces. This increase was due to increased mill
throughput combined with an increase in grade. The head grade for the quarter
was 5.9 grams per ton compared with 5.2 grams per ton during the previous
quarter. This was mainly due to a higher grade and tonnage from Waroonga (Kim
and Main Lodes).
Open pit mining at Songvang produced 213,300 tons of ore for the quarter, an
increase on the 168,100 tons produced during the preceding quarter. However,
this was at a slightly lower grade of 1.96 grams per ton compared with
2.14 grams per ton in the June quarter. The total volume of ore and waste mined
from the pit was 1.3 million bank cubic metres (BCM"s) versus 1.2 million
BCM"s during the previous quarter. The average strip ratio decreased from
19.8 to 17.0 during the quarter. This is set to reduce significantly over the
next six months as we reach the main ore body.
The underground operations at Waroonga produced
118,600 tons of ore at 13.2 grams per ton during the quarter compared with
114,800 tons at 11.5 grams per ton in the preceding quarter.
Operating costs, including gold-in-process movements, were A$16 million (R89
million) for the September quarter compared with A$21 million (R100 million)
for the June quarter. Total cash costs decreased to A$276 per ounce for the
quarter compared with A$400 per ounce in the preceding quarter. A$88 per ounce
of this decrease was due to a change in the method of charging for waste in the
Songvang open pit.
Operating profit amounted to A$32 million (R173 million) compared with A$21
million (R98 million) in the June quarter as a result of the above.
Capital expenditure for the September quarter was A$11 million (R57 million),
compared with A$7 million (R32 million) in the June quarter. Songvang pre-strip
and ongoing development of the Waroonga underground complex accounted for the
majority of this expenditure. Capitalised exploration expenditure amounted to
A$3 million (R14 million) compared with A$2 million (R10 million) in the
previous quarter.
Gold produced during the December quarter is expected to remain in line with
the September quarter, with cash costs expected to rise as the impact of the
completion of the pre- strip waste at Songvang is felt. Capital expenditure is
expected to increase with the commencement of the extension to the Leinster
village.
Quarter ended 30 September 2006
compared with quarter ended 30 September 2005
Attributable gold production increased 1 per cent from 993,000 ounces for the
quarter ended 30 September 2005 to 1,005,000 ounces produced in the quarter
ended 30 September 2006. This increase was mainly due to the production from
Choco 10, attributable 15,400 ounces, with the balance of the international
operations similar to that achieved in the September 2005 quarter.
The South African operations produced 649,000 ounces virtually unchanged when
compared with the 647,000 ounces produced in the September 2005 quarter. The
decrease of 32,300 ounces at Driefontein being offset by Kloof and Beatrix.
Revenue increased by 57 per cent in rand terms (increased 44 per cent in US
dollar terms) from R3,023 million (US$464 million) to R4,732 million (US$667
million). The higher gold price of R142,035 per kilogram (US$622 per ounce)
compared with R91,669 per kilogram (US$437 per ounce) achieved in F2005,
contributed significantly to this increase.
Operating costs, including gold-in-process movements, increased from R2,285
million (US$351 million) to R2,745 million (US$387 million), an increase of 20
per cent. The weaker rand when translating costs at the international
operations into South African rand accounted for approximately half of this
increase, amounting to R224 million (US$35 million). Exchange rates weakened
from an average of US$1 = R6.52 to US$1 = R7.10, or 9 per cent and from A$1 =
R4.96 to A$1 = R5.38, or 8 per cent quarter on quarter. Total cash costs for
the Group in rand terms, increased 19 per cent from R67,212 per kilogram
(US$321 per ounce) to R79,862 per kilogram (US$350 per ounce) due to the above
factors.
At the South African operations operating costs increased by 10 per cent to
R1,644 million for the year compared with R1,488 million the previous year.
This was due to above inflation wage increases, an increase in square metres
mined of 14 per cent to offset the lower grades mined, and the increase in reef
development of over 20 per cent. Unit cash costs increased from R70,689 to
R77,543 per kilogram due to the increase in costs. At the international
operations unit cash costs increased by 24 per cent from US$295 per ounce to
US$365 per ounce, mainly due to the combined effect of higher stripping ratios
and lower grades, added to the increased cost of inputs driven by the
commodities boom and increased fleet maintenance costs at Tarkwa.
Operating profit at R1,987 million (US$280 million), compared with R738 million
(US$113 million) in the previous year, with the group benefiting from the
higher gold price in all currencies.
Net earnings were R698 million (US$98 million) compared with R64 million (US$10
million) in the September 2005 quarter. The increase in earnings was largely
due to the nearly three-fold increase in operating profit.
Earnings excluding gains and losses on financial instruments and foreign debt
and exceptional items amounted to R702 million (US$99 million) this quarter
compared with R69 million (US$11 million) in the September 2005 quarter.
Capital and development projects
Cerro Corona
During the quarter community relationships around this project remained strong.
The company continues to work closely with the several communities located near
the Cerro Corona project site as well as reaching out to several more distant
communities. This outreach is typically one of cooperative, sustainable
development efforts with a particular focus on education and hygiene.
The bulk of the community relations effort remains focussed on ensuring direct
benefit to local communities through employment and the use of local
contractors in the construction of the project. In all, more than 600 local
residents are at work on the Cerro Corona project, either through employment by
the company itself or through various contractors. The company is in the
process of selecting locals for intensive, offsite training to become mill
operators when the plant becomes operational in late 2007.
More than 40 local, small contractors have been involved in the many
construction activities required to build the project. This effort by the
company continues to build goodwill in the communities. It is believed that
several well qualified, community based contracting firms will result from
this effort, further strengthening ties between the community and the company.
In the light of this, it is disappointing to report that in mid October an
illegal blockade of the Project site commenced. At the time of writing this had
been underway for some 10 days and resolution of the stand off had been
escalated to national level. On site activities were suspended last week to
ensure the health and safety of employees. The blockade appears to be motivated
by local political activity ahead of the November mayoral elections. Demands
regarding increased employment from local communities and increased use of
local contractors have been made, notwithstanding the fact that the company is
substantially exceeding commitments it had made to the communities in both
these regards. It is clear that this action is not supported by the majority of
residents living near the project, who are feeling the negative effects of the
suspension of project employment, and it appears the blockade is being enforced
by people from outside the project area. While efforts are underway to enforce
an interdict to remove the blockade, it remains the highest priority of both
the company and the authorities to achieve this peacefully.
During the quarter mining operations ramped up satisfactorily and
by the end of September mining rates were close to the level
required for full scale operations of 1 million tons per month.
The majority of the on site construction activities involved bulk earthworks in
the process plant, runoff control systems and the permanent man-camp areas,
along with rehabilitation of roads. Temporary camp facilities are now complete
and these can accommodate and service more than 1,000 workers at the project
site. There are currently in excess of 600 workers engaged on site of
which some 165 are employed directly by the company.
By quarter end the engineering contractor, was in the final stages of detailed
engineering for the process plant and facilities, with more than 95 per cent
of this work now complete. Procurement is similarly advanced and delivery of
all major equipment remains on track. Final design packages for alternate
tailing and mine overburden storage facilities have been received.
Subject to rapid resolution of the blockade, the process plant is still
expected to be completed in time for commissioning before the end of F2007. At
this stage the tailings storage facility remains the most critical item from a
schedule point of view and progress during coming months will determine the
final completion date.
Project expenditure to date amounts to US$115 million (R812 million) of which
US$51 million (R361 million) was spent in the September quarter.
It is anticipated that total development costs for this project will
amount to approximately US$340 million.
Exploration and corporate development
Gold Fields completed drilling on five projects during the quarter on its
greenfield exploration sites. Its partner North American Palladium (TSX, Amex:
"PDL") also completed drilling on the Arctic Platinum Project in Finland as
part of their option agreement.
At the Essakane project in Burkina Faso (50 per cent interest) delays in the
extensive re-assay programme have been experienced and the completion of this
programme is expected at the end of October. As previously reported these
delays were caused by the inability of in-country laboratories to provide
assaying services of a suitable quality. Once all assays have been received and
verified to comply with QA-QC standards, the resource model to be used in the
bankable feasibility study will be updated. This is expected just after
calendar year end and completion of the feasibility study is expected after mid
calendar 2007.
On the 85 per cent owned Telikan in Guinea results of the 5,700 meter RAB
drilling programme were received. Gold Fields has decided that the project does
not fit with its short term strategic requirements and will be looking for a
third party to continue with the projects development. With partner Glencar
Mining plc (AIM: "GEX") on their 85 per cent Sankarani project in south-western
Mali, with a potential earn-in of net 60 per cent on the total project,
approximate results have been received from the initial drilling programme and
further work is being planned on the project. At the 80 per cent owned Kisenge
project in the southern DRC a limited 4,200 meter aircore programme and a 900
meter diamond drill programme were completed during the quarter. Samples
collected from these programme are being transported to laboratories for
analysis.
At the Central Victoria project in Australia, aircore drilling continued to
define the newly discovered parallel trend located to the east of Lockington
trend. Follow-up diamond drilling will begin during the upcoming quarter.
Initial aircore and RC drilling was completed on two targets within our New
South Wales generative programme with a subsidiary company owned by
GeoInformatics Exploration Inc (TSX Venture: "GXL"). In China, field work
continues on the Fujian JV with partners Zijin Mining (HKSE: "2899") including
geologic mapping and stream sediment sampling of the Fujian epithermal belt and
in the Heilongjiang province with local state owned partners SMEI.
In the El Callao District in Venezuela, regional exploration continued
surrounding Gold Fields 95 per cent owned Choco 10 mine and field work has
begun on the recently acquired Choco 6 concession. An extensive resource
drilling programme is in progress at Choco 10 that will lead to the issuance of
Gold Fields first resource and reserve statement on that property. Drilling has
just recently begun on the Choco 6 concessions.
A new equity investment and joint venture option was concluded with Lero Gold
Corp (TSX Venture: "LER") regarding their Taldybulak prospect in Kyrgyzstan.
The proceeds of this C$2.5 million placement will be directed towards the next
phase of exploration on the prospect and concluding that, Gold Fields will have
the right to enter into an earn-in arrangement on the project.
Corporate
Acquisition of South Deep
On 11 September 2006 Gold Fields Limited announced three separate transactions,
collectively worth approximately US$2.5 billion, which will significantly
increase Gold Fields" interest in the South Deep Gold Mine in South Africa.
South Deep is one of the most important developing gold mines in the world,
with reserves of 29.3 million ounces contained in a resource of 67 million
ounces.
South Deep is currently owned and operated through the Barrick Gold - Western
Areas Joint Venture, an unincorporated entity in which Barrick and Western
Areas each hold an interest of 50 per cent.
The salient features of the three separate transactions, which are not
interdependent, are as follows:
Gold Fields and Barrick Gold Corporation (Barrick) have reached agreement
for Gold Fields to acquire the 50 per cent stake owned by Barrick in the
developing South Deep gold mine;
Gold Fields and JCI Limited (JCI) have reached agreement for Gold Fields to
acquire 27 million Western Areas shares from JCI, which will increase the
Gold Fields stake in Western Areas to 34.7 per cent. The parties have
further agreed to a reciprocal call and put option that could see Gold
Fields increase its stake in Western Areas further to 41 per cent.
Gold Fields has undertaken to make a general offer to Western Areas Limited
(Western Areas) shareholders to acquire all of the outstanding shares in
Western Areas which Gold Fields does not yet own. Western Areas" largest
asset is its 50 per cent interest in South Deep and;
R4.7 billion investment in Driefontein and Kloof
On 7 September 2006 Gold Fields Limited announced that it will invest R4.7
billion in the deepening of the Driefontein and Kloof gold mines in South
Africa, the Company"s flagship operations. These projects will access an
additional 10.8 million ounces of gold below the current infrastructure of the
two mines.
These investments will extend the South African production profile to at least
2035, strengthening further the solid foundation from which Gold Fields will
continue to pursue its existing commitment to international growth. These
investments will be funded from internal sources and to the extent required,
from external debt.
Driefontein 9 sub-vertical shaft depth extension project
The company aims to invest R3.3 billion to deepen the existing 9 sub-vertical
shaft system making it the deepest mine in the world.
This will enable Driefontein to mine an additional 8.8 million ounces of
reserves, contained in a resource of 13.9 million ounces and will extend the
life of the mine by at least 13 years to approximately 2035.
The project was planned using a long-term gold price of R100,000 per kilogram,
with a break even gold price of R85,360 per kilogram. The life of mine
incremental cash costs for the project are anticipated to be R65,977 per
kilogram, with average working costs of R543 per ton. The planned capital
investment per reserve ounce is US$51 and the project is forecast to deliver a
return of 8 per cent at R100,000 per kilogram.
Shaft sinking will commence in October 2007 and is expected to be completed
late in calendar year 2011, after which it will take a further 12 months to
equip the proposed 200,000 ton per month shaft.
Horizontal development to intersect reef on all seven planned production levels
will be completed by the middle of calendar year 2014. Planned full production
of 170,000 reef tons hoisted per month will be achieved during 2019.
Kloof Extension Area (KEA) decline shaft project Gold Fields plans to invest
R1.4 billion in the development of a decline shaft system to provide access to
the KEA. The KEA, which is down dip from the existing 3 sub vertical shaft and
north of the existing 4 sub vertical shaft, will be the second deepest mine in
the world.
This project will enable Kloof to mine an additional 2.0 million ounces of
reserves, contained in a resource of 4.5 million ounces, and will add
incremental gold production to Kloof"s production profile from 2011 to 2021.
The project was planned using a long-term gold price of R100,000 per kilogram
with a break even gold price of R83,137 per kilogram. The life of mine cash
costs for the project are anticipated to be R58,244 per kilogram, with average
working costs of R864 per ton. The planned capital investment per reserve ounce
is US$95 and the project is forecast to deliver a return of 15 per cent.
The sinking of the decline shaft will commence in July 2007 with the five
planned production levels coming into production over a nine year period. The
first reef intersection on 44 Level is expected in the second half of 2009,
when the first gold will be produced from this project.
Planned full production of 60,000 reef tons per month will be reached during
2018.
The project is being designed to accommodate a possible extension to below 48
level, where the potential exist for additional reserves.
Employment Equity
Gold Fields wishes to correct a statement issued by the Minister of Labour on
12 September 2006, listing Gold Fields amongst 1,296 companies who have failed
to submit employment equity reports for 2005 to the South African Department of
Labour.
These reports are entirely incorrect.
Gold Fields has completed all regulatory filings required by the Department of
Labour and takes pride in its full and ongoing compliance with the Department"s
requirements.
Gold Fields has letters from the Department of Labour confirming receipt of all
of its employment equity reports by the Department.
Change in accounting policy
Capitalisation of costs relating to Ore Reserve
Development (ORD)
On 1 July 2006, the Group changed its accounting policy on Ore Reserve
Development ("ORD") costs. These costs are now capitalised and amortised over
the period the Group expects to consume the economic benefits relating to ORD.
Previously, ORD costs were expensed. The change in accounting policy has been
applied retrospectively for the earliest comparative period presented in terms
of IAS8 Accounting policies, changes in accounting estimates and errors.
ORD is all off-reef development that allows access to reserves that are
economically recoverable in the future.
ORD include, but is not limited to, crosscuts, footwalls, return airways and
box holes. The cost of developing access ways and other infrastructure creates
for the Group probable economic benefits that, in combination with other assets
at its mining operations, contribute directly to the future cash inflows of the
Group. The change in accounting policy will therefore allow for improved
financial reporting and will align the Group"s policy with those of its global
industry peers.
The effect of the change in accounting policy for the last 3
years is an after tax credit to earnings of:
F2006 - R81.5 million
F2005 - R117.1 million
F2004 - R363.9 million
The impact of the change in accounting policy for the first quarter of
financial 2007 is a credit to earnings of R49.7 million. For the June 2006
quarter the impact is a credit to earnings of R13.5 million and for the
September 2005 quarter a credit to earnings of R25.1 million.
The corresponding entry for the above adjustments was to increase property,
plant and equipment and deferred tax liabilities.
Earnings for F2006 have been restated to R1,470.1 million from R1,388.6
million. As a result, earnings per share and headline earnings per share have
been restated for the comparative year increasing from 281 to 298 cents per
share and from 270 to 287 cents per share respectively.
Outlook
Gold production and total cash costs for the December quarter should be similar
to the September quarter.
Basis of accounting
The unaudited results for the quarters have been prepared on the International
Financial Reporting Standards (IFRS) basis. The detailed financial, operational
and development results for the September 2006 quarter are submitted in this
report.
These consolidated quarterly statements are prepared in accordance with IAS 34,
Interim Financial Reporting. The accounting policies used in the preparation of
this report are consistent with those applied in the previous financial year
other than the change in accounting policy referred to.
I.D. Cockerill
Chief Executive Officer
26 October 2006
Income statement
International Financial Reporting Standards Basis
Figures are in millions unless otherwise stated
South African Rand Quarter
Restated Restated
September June September
2006 2006 2005
Revenue 4,731.9 4,369.0 3,022.5
Operating costs 2,763.6 2,518.8 2,274.0
Gold inventory change (18.3) (22.7) 10.9
Operating profit 1,986.6 1,872.9 737.6
Amortisation and depreciation 680.7 617.1 498.8
Net operating profit 1,305.9 1,255.8 238.8
Finance income/(cost) 13.8 35.0 (0.1)
- Net interest received 16.7 (5.0) 0.8
- (Loss)/gain on foreign debt,
net of cash (2.9) 40.0 (0.9)
(Loss)/gain on financial instruments (9.4) 23.8 (8.8)
Other expense (28.7) (55.6) (18.8)
Exploration (65.6) (94.0) (66.2)
Profit before tax
and exceptional items 1,216.0 1,165.0 144.9
Exceptional gain 8.7 6.2 2.7
Profit before taxation 1,224.7 1,171.2 147.6
Mining and income taxation 464.2 474.6 57.8
- Normal taxation 251.7 227.0 74.0
- Deferred taxation 212.5 247.6 (16.2)
Net profit 760.5 696.6 89.8
Attributable to:
- Ordinary shareholders 697.8 617.9 64.3
- Minority shareholders 62.7 78.7 25.5
Exceptional items:
Profit on sale of investments 0.4 10.0 1.8
Profit/(loss) on sale/(disposal) of assets 8.3 (0.9) -
Other - (2.9) 0.9
Total exceptional items 8.7 6.2 2.7
Taxation (3.1) 2.8 (0.6)
Net exceptional items after tax and
minorities 5.6 9.0 2.1
Net earnings 697.8 617.9 64.3
Net earnings per share (cents) 141 125 13
Headline earnings 692.2 607.3 61.3
Headline earnings per share (cents) 140 123 12
Diluted earnings per share (cents) 141 124 13
Net earnings excluding gains and
losses on financial instruments and
foreign debt, net of 701.7 549.5 68.8
cash and exceptional items
Net earnings per share excluding gains
and losses on financial instruments
and foreign 142 111 14
debt, net of cash and exceptional
items (cents)
Gold sold - managed kg 33,315 33,875 32,972
Gold price received R/kg 142,035 128,974 91,669
Total cash costs R/kg 79,862 70,908 67,212
Income statement
International Financial Reporting Standards Basis
Figures are in millions unless otherwise stated
United States Dollars Quarter
Restated Restated
September June September
2006 2006 2005
Revenue 666.5 682.7 463.6
Operating costs 389.2 393.6 348.8
Gold inventory change (2.6) (3.6) 1.7
Operating profit 279.9 292.7 113.1
Amortisation and depreciation 95.9 96.5 76.5
Net operating profit 184.0 196.2 36.6
Finance income/(cost) 2.0 5.7 -
- Net interest received 2.4 (0.8) 0.1
- (Loss)/gain on foreign debt, net of
cash (0.4) 6.5 (0.1)
(Loss)/gain on financial instruments (1.3) 3.5 (1.3)
Other expense (4.1) (8.7) (2.9)
Exploration (9.3) (14.7) (10.2)
Profit before tax and exceptional items 171.3 182.0 22.2
Exceptional gain 1.2 1.0 0.4
Profit before taxation 172.5 183.0 22.6
Mining and income taxation 65.4 74.2 8.8
- Normal taxation 35.5 35.5 11.3
- Deferred taxation 29.9 38.7 (2.5)
Net profit 107.1 108.8 13.8
Attributable to:
- Ordinary shareholders 98.3 96.6 9.9
- Minority shareholders 8.8 12.2 3.9
Exceptional items:
Profit on sale of investments - 1.6 0.3
Profit/(loss) on sale/(disposal) of assets 1.2 (0.1) -
Other - (0.5) 0.1
Total exceptional items 1.2 1.0 0.4
Taxation (0.4) 0.4 (0.1)
Net exceptional items after tax and
minorities 0.8 1.4 0.3
Net earnings 98.3 96.6 9.9
Net earnings per share (cents) 20 20 2
Headline earnings 97.5 94.9 9.4
Headline earnings per share (cents) 20 19 2
Diluted earnings per share (cents) 20 19 2
Net earnings excluding gains and
losses on financial instruments and
foreign debt, net of 98.8 85.8 10.6
cash and exceptional items
Net earnings per share excluding gains
and losses on financial instruments
and foreign 20 17 2
debt, net of cash and exceptional
items (cents)
South African rand/United States
dollar conversion rate 7.10 6.39 6.52
South African rand/Australian dollar
conversion rate 5.38 4.77 4.96
Gold sold - managed ozs (000) 1,071 1,089 1,060
Gold price received $/oz 622 628 437
Total cash costs $/oz 350 345 321
Balance sheet
International Financial Reporting Standards Basis
Figures are in millions unless otherwise stated
South African Rand United States Dollars
Restated Restated
September June September June
2006 2006 2006 2006
Property, plant and equipment 25,234.0 24,069.5 3,320.3 3,239.5
Non-current assets 500.1 484.0 65.8 65.1
Investments 2,875.2 2,483.9 378.3 334.3
Current assets 3,782.7 4,351.2 497.7 585.6
- Other current assets 2,558.8 2,733.7 336.7 367.9
- Cash and deposits 1,223.9 1,617.5 161.0 217.7
Total assets 32,392.0 31,388.6 4,262.1 4,224.5
Shareholders" equity 20,673.7 19,851.5 2,720.2 2,671.8
Deferred taxation 5,737.0 5,454.7 754.9 734.2
Long-term loans 1,877.4 2,021.6 247.0 272.1
Environmental rehabilitation
provisions 1,105.7 1,079.3 145.5 145.3
Post-retirement health care
provisions 17.7 18.0 2.3 2.4
Current liabilities 2,980.5 2,963.5 392.2 398.7
- Other current liabilities 2,643.5 2,641.8 347.9 355.4
- Current portion of
long-term loans 337.0 321.7 44.3 43.3
Total equity and liabilities 32,392.0 31,388.6 4,262.1 4,224.5
South African rand/US dollar
conversion rate 7.60 7.43
South African rand/Australian
dollar conversion rate 5.74 5.44
Condensed statement of changes in equity
International Financial Reporting Standards Basis
Figures are in millions unless otherwise stated
South African Rand United States Dollars
Restated Restated
September September September September
2006 2005 2006 2005
Balance at the beginning of
the financial year 19,851.5 16,534.1 2,671.8 2,467.8
Effect of change in
accounting policy -
capitalisation of ore reserve
development costs - 464.6 - 69.3
19,851.5 16,998.7 2,671.8 2,537.1
Issue/(cancellation) of share
capital 0.4 (0.3) 0.1 -
Increase/(decreases) in share
premium 31.8 (66.3) 4.5 (10.2)
Marked to market valuation of
listed investments 242.8 51.5 34.2 7.9
Dividends paid (545.4) (196.8) (76.8) (29.4)
Increase in share-based
payment reserve 19.1 15.6 2.7 2.5
Profit attributable to
ordinary shareholders 697.8 64.3 98.3 9.9
Profit attributable to
minority shareholders 62.7 25.5 8.8 3.9
(Decrease)/Increase in
minority interests (50.7) - (7.1) -
Currency translation
adjustment and other 363.7 (516.2) (16.3) 65.1
Balance as at the end of
September 20,673.7 16,376.0 2,720.2 2,586.8
Reconciliation of quarterly headline earnings with net earnings
International Financial Reporting Standards Basis
Figures are in millions unless otherwise stated
South African Rand
Restated Restated
September June September
2006 2006 2005
Net earnings 697.8 617.9 64.3
Profit on sale of investments (0.4) (10.0) (1.8)
Taxation effect of profit on sale of
investments - - 0.3
Profit on sale of assets (8.3) - -
Taxation effect on profit on sale of
assets 3.1 - -
Other after tax adjustments - (0.6) (1.5)
Headline earnings 692.2 607.3 61.3
Headline earnings per share - cents 140 123 12
Based on headline earnings as given
above divided by
495,449,657 (June 2006 - 494,628,373 and
September 2005 -
491,515,569) being the weighted average
number of ordinary
shares in issue
United States Dollars
Restated Restated
September June September
2006 2006 2005
Net earnings 98.3 96.6 9.9
Profit on sale of investments - (1.6) (0.3)
Taxation effect of profit on sale of
investments - - -
Profit on sale of assets (1.2) - -
Taxation effect on profit on sale of
assets 0.4 - -
Other after tax adjustments - (0.1) (0.2)
Headline earnings 97.5 94.9 9.4
Headline earnings per share - cents 20 19 2
Based on headline earnings as given above
divided by
495,449,657 (June 2006 - 494,628,373 and
September 2005 -
491,515,569) being the weighted average
number of ordinary
shares in issue
Cash flow statement
International Financial Reporting Standards Basis
Figures are in millions unless otherwise stated
South African Rand Quarter
Restated Restated
September June September
2006 2006 2005
Cash flows from operating activities 1,609.3 1,742.0 486.1
Profit before tax and exceptional
items 1,216.0 1,165.0 144.9
Exceptional items 8.7 6.2 2.7
Amortisation and depreciation 680.7 617.1 498.8
Change in working capital 9.9 134.3 (120.4)
Taxation paid (314.8) (81.3) (77.7)
Other non-cash items 8.8 (99.3) 37.8
Dividends paid (555.9) (45.9) (196.8)
Ordinary shareholders (545.4) - (196.8)
Minority shareholders in subsidiaries (10.5) (45.9) -
Cash flows from investing activities (1,307.2) (1,794.7) (513.9)
Capital expenditure - additions (1,188.0) (875.5) (508.5)
Capital expenditure - proceeds on
disposal 8.4 10.3 4.2
Purchase of subsidiaries - (21.7) -
Purchase of investments (121.4) (851.2) (12.1)
Proceeds on the disposal of
investments 2.2 1.6 8.4
Environmental and post-retirement
health care payments (8.4) (58.2) (5.9)
Cash flows from financing activities (168.9) 37.4 (206.6)
Loans received - - -
Loans repaid (155.6) - (140.0)
Minority shareholders loans received (45.5) (33.6) -
Shares issued/(repurchased) 32.2 71.0 (66.6)
Net cash outflow (422.7) (61.2) (431.2)
Translation adjustment 29.1 177.2 (144.2)
Cash at beginning of period 1,617.5 1,501.5 3,375.0
Cash at end of period 1,223.9 1,617.5 2,799.6
United States Dollars Quarter
Restated Restated
September June September
2006 2006 2005
Cash flows from operating activities 226.7 267.8 75.1
Profit before tax and exceptional
items 171.3 182.0 22.2
Exceptional items 1.2 1.0 0.4
Amortisation and depreciation 95.9 96.5 76.5
Change in working capital 1.4 21.0 (18.5)
Taxation paid (44.3) (17.1) (11.3)
Other non-cash items 1.2 (15.6) 5.8
Dividends paid (78.3) (7.2) (29.4)
Ordinary shareholders (76.8) - (29.4)
Minority shareholders in subsidiaries (1.5) (7.2) -
Cash flows from investing activities (184.1) (280.6) (78.9)
Capital expenditure - additions (167.3) (136.9) (78.0)
Capital expenditure - proceeds on
disposal 1.2 1.7 0.6
Purchase of investments - (3.5) (1.9)
Proceeds on the disposal of
investments (17.1) (133.0) 1.3
Proceeds on the disposal of
exploration rights 0.3 0.2 -
Environmental and post-retirement
health care payments (1.2) (9.1) (0.9)
Cash flows from financing activities (23.8) 9.7 (31.7)
Loans received - 3.8 -
Loans repaid (21.9) - (21.5)
Minority shareholders loans received (6.4) (5.2) -
Shares issued/(repurchased) 4.5 11.1 (10.2)
Net cash outflow (59.5) (10.3) (64.9)
Translation adjustment 2.8 (11.1) 3.5
Cash at beginning of period 217.7 239.1 503.7
Cash at end of period 161.0 217.7 442.3
Hedging / Derivatives
Policy
The Group"s policy is to remain unhedged to the gold price. However, hedges are
sometimes undertaken on a project specific basis as follows:
to protect cash flows at times of significant expenditure,
for specific debt servicing requirements, and
to safeguard the viability of higher cost operations.
Gold Fields may from time to time establish currency financial instruments to
protect underlying cash flows.
Gold Fields has various currency financial instruments - those remaining are
described in the schedule. It has been decided not to account for these
instruments under the hedge accounting rules of IAS 39 and accordingly the
positions have been marked to market.
Position at end of September 2006
On 7 January 2004, Gold Fields Australia closed out its Australian
dollar/United States dollar currency financial instruments. The existing
forward purchases of Australian dollars and the put and call options were
closed out by entering into equal and opposite transactions. The close out of
the outstanding open position of US$275 million was at an average spot rate of
0.7670 US$/A$. These transactions locked in gross profit amounting to
US$115.7 million and the underlying cash receipts were deferred to match the
maturity dates of the original transactions. An amount of US$102.8 million had
already been accounted for up until the end of December 2003. In addition, in
order that the Group was able to participate in further Australian dollar
appreciation, a strip of quarterly maturing Australian dollar/US dollar call
options were purchased in respect of an amount of US$275 million of which the
value dates and amounts match those of the original structure. The Australian
dollar call options resulted in a premium of US$8.3 million. The payment of the
premium will be effected so as to match the maturity dates of the original
structure. The average strike price of the options is 0.7670 US$/A$.
Subsequent to this, on 7 May 2004, the future US dollar values were fixed in
Australian dollars to take advantage of the weakened Australian dollar against
the US dollar at that time. The original value of the future cash flows was
US$107.4 million or A$140.0 million at 0.7670 US$/A$, the rate at the time of
the original transaction. The value fixed in Australian dollars amounted to
A$147 million, based on the spot rate on 7 May 2004 of 0.7158 US$/A$. The
balance at the end of the June quarter was A$37.8 million. This position was
closed out and a cash inflow of A$38.2 million was received early in July 2006.
As this financial instrument has been closed out, there will be no further cash
flows, however, the unmatured Australian dollar call options are detailed
below:
The balance of the unmatured call options purchased at a total cost of
US$8.3 million, are detailed below:
US Dollars / Australian Dollars call options
Year ended 30 June 2007
Australian dollar call options:
Amount (US dollars) - 000"s 50,000
Average strike price - (US$/A$) 0.7670
The marked to market value of all transactions making up the positions in the
above table was a positive US$0.2 million. This was based on an exchange rate
of A$/US$ 0.7554. The value was based on the prevailing interest rates and
volatilities at the time.
US Dollars / Rand forward purchases
Year ended 30 June 2007
Forward purchases:
Amount (US Dollars) - 000"s 30,000
Average rate - (ZAR/US$) 6.8319
The marked to market value of all transactions making up the positions in the
above table was a positive R25.1 million (US$3.5 million). The value was based
on an exchange rate of ZAR/US$7.60 and the prevailing interest rates and
volatilities at the time. The forward purchases of US$30 million will mature on
5 December 2006.
Diesel Hedge
On 3 July 2006, Gold Fields Ghana purchased a one year Asian style (average
monthly price) call option in respect of 58.8 million litres of diesel, settled
monthly, to protect against adverse energy price movements. The call option
resulted in a premium of US$2.5 million, paid upfront, at a strike price of
US$0.5716 per litre (US$676.20 per metric ton).
This equates to US$73.89 per barrel brent crude and US$0.5371 cents per litre
IPE barrel Gasoil. The price of at the end of September was US$60.95 per barrel
and US$ 0.4504 cents per litre respectively. The balance of the unexpired
options are given below:
Year ended 30 June 2007
Forward purchases:
Amount (litres) - 000"s 49,000
Strike price - US$/litre 0,5716
Conversion factor from US dollar per metric ton to US dollar cents per
litre = 1,183
The marked to market value of all transactions making up the position above was
a positive US$0.4 million. The value was based on an IPE Gasoil price of
US$0.4818 per litre (US$569.97 per metric ton). The value was based on the
prevailing interest rates and volatilities at the time.
Total cash costs
Gold Institute Industry Standard
All figures are in Rand millions unless otherwise stated
Total Mine
Operations
Operating costs (1)
September 2006 2,763.6
June 2006 2,518.8
Gold-in-process and
inventory change*
September 2006 (13.3)
June 2006 (17.5)
Less:
Rehabilitation costs
September 2006 8.7
June 2006 9.9
Production taxes
September 2006 7.2
June 2006 7.9
General and admin
September 2006 123.1
June 2006 95.9
Exploration costs
September 2006 8.8
June 2006 40.0
Cash operating costs
September 2006 2,602.5
June 2006 2,347.6
Plus:
Production taxes
September 2006 7.2
June 2006 7.9
Royalties
September 2006 50.9
June 2006 46.5
TOTAL CASH
COSTS(2)
September 2006 2,660.6
June 2006 2,402.0
Plus:
Amortisation*
September 2006 643.8
June 2006 581.9
Rehabilitation
September 2006 8.7
June 2006 9.9
TOTAL
PRODUCTION
COSTS (3)
September 2006 3,313.1
June 2006 2,993.8
Gold sold
- thousand ounces
September 2006 1,071.1
June 2006 1,089.1
TOTAL CASH COSTS
- US$/oz
September 2006 350
June 2006 345
TOTAL CASH COSTS
- R/kg
September 2006 79,862
June 2006 70,908
TOTAL
PRODUCTION COSTS
- US$/oz
September 2006 436
June 2006 430
South African Operations
Total Driefontein Kloof Beatrix
Operating costs (1)
September 2006 1,644.0 650.0 615.5 378.5
June 2006 1,563.1 621.5 591.7 349.9
Gold-in-process and
inventory change*
September 2006 - - - -
June 2006 - - - -
Less:
Rehabilitation costs
September 2006 6.4 3.0 2.0 1.4
June 2006 9.5 2.8 4.1 2.6
Production taxes
September 2006 7.2 3.3 2.5 1.4
June 2006 7.9 3.7 3.5 0.7
General and admin
September 2006 71.7 29.0 24.1 18.6
June 2006 51.7 22.7 18.5 10.5
Exploration costs
September 2006 - - - -
June 2006 - - - -
Cash operating costs
September 2006 1,558.7 614.7 586.9 357.1
June 2006 1,494.0 592.3 565.6 336.1
Plus:
Production taxes
September 2006 7.2 3.3 2.5 1.4
June 2006 7.9 3.7 3.5 0.7
Royalties
September 2006 - - - -
June 2006 - - - -
TOTAL CASH
COSTS(2)
September 2006 1,565.9 618.0 589.4 358.5
June 2006 1,501.9 596.0 569.1 336.8
Plus:
Amortisation*
September 2006 342.8 119.8 139.5 83.5
June 2006 367.2 129.0 124.8 113.4
Rehabilitation
September 2006 6.4 3.0 2.0 1.4
June 2006 9.5 2.8 4.1 2.6
TOTAL
PRODUCTION
COSTS (3)
September 2006 1,915.1 740.8 730.9 443.4
June 2006 1,878.6 727.8 698.0 452.8
Gold sold
- thousand ounces
September 2006 649.3 257.5 242.7 149.1
June 2006 668.8 285.1 236.0 147.7
TOTAL CASH COSTS
- US$/oz
September 2006 340 338 342 339
June 2006 351 327 377 357
TOTAL CASH COSTS
- R/kg
September 2006 77,543 77,163 78,077 77,330
June 2006 72,196 67,200 77,534 73,313
TOTAL
PRODUCTION COSTS
- US$/oz
September 2006 415 405 424 419
June 2006 440 399 463 480
International Operations
Total Ghana Venezuela
Tarkwa Damang Choco 10
Operating costs (1)
September 2006 1,119.6 428.5 142.4 69.6
June 2006 955.7 370.1 125.6 41.1
Gold-in-process and
inventory change*
September 2006 (13.3) (3.2) 7.8 (4.1)
June 2006 (17.5) (7.7) (3.9) 2.9
Less:
Rehabilitation costs
September 2006 2.3 0.7 - -
June 2006 0.4 0.4 - -
Production taxes
September 2006 - - - -
June 2006 - - - -
General and admin
September 2006 51.4 23.4 3.7 11.6
June 2006 44.2 21.6 3.2 3.7
Exploration costs
September 2006 8.8 - 2.1 -
June 2006 40.0 - 13.1 -
Cash operating costs
September 2006 1,043.9 401.2 144.4 53.9
June 2006 853.6 340.4 105.4 40.3
Plus:
Production taxes
September 2006 - - - -
June 2006 - - - -
Royalties
September 2006 50.9 23.1 6.4 2.1
June 2006 46.5 21.2 6.7 2.5
TOTAL CASH
COSTS(2)
September 2006 1,094.7 424.3 150.8 56.0
June 2006 900.1 361.6 112.1 42.8
Plus:
Amortisation*
September 2006 301.0 66.5 7.1 12.7
June 2006 214.7 56.2 6.0 13.0
Rehabilitation
September 2006 2.3 0.7 - -
June 2006 0.4 0.4 - -
TOTAL
PRODUCTION
COSTS (3)
September 2006 1,398.0 491.5 157.9 68.7
June 2006 1,115.2 418.2 118.1 55.8
Gold sold
- thousand ounces
September 2006 421.8 173.6 48.5 17.2
June 2006 420.3 176.0 55.7 22.8
TOTAL CASH COSTS
- US$/oz
September 2006 365 344 438 458
June 2006 335 321 315 293
TOTAL CASH COSTS
- R/kg
September 2006 83,431 78,589 100,000 104,478
June 2006 68,857 66,046 64,686 60,282
TOTAL
PRODUCTION COSTS
- US$/oz
September 2006 467 399 459 561
June 2006 415 372 332 383
Australia #
St Ives Agnew
Operating costs (1)
September 2006 392.0 87.1
June 2006 316.8 102.1
Gold-in-process and
inventory change*
September 2006 (12.4) (1.4)
June 2006 (6.9) (1.9)
Less:
Rehabilitation costs
September 2006 1.6 -
June 2006 - -
Production taxes
September 2006 - -
June 2006 - -
General and admin
September 2006 9.9 2.8
June 2006 9.0 6.7
Exploration costs
September 2006 6.1 0.6
June 2006 22.6 4.3
Cash operating costs
September 2006 362.0 82.3
June 2006 278.3 89.2
Plus:
Production taxes
September 2006 - -
June 2006 - -
Royalties
September 2006 13.8 5.5
June 2006 11.4 4.7
TOTAL CASH
COSTS(2)
September 2006 375.8 87.8
June 2006 289.7 93.9
Plus:
Amortisation*
September 2006 214.7
June 2006 139.5
Rehabilitation
September 2006 1.6
June 2006 -
TOTAL
PRODUCTION
COSTS (3)
September 2006 679.9
June 2006 523.1
Gold sold
- thousand ounces
September 2006 123.4 59.2
June 2006 116.4 49.3
TOTAL CASH COSTS
- US$/oz
September 2006 429 209
June 2006 389 298
TOTAL CASH COSTS
- R/kg
September 2006 97,941 47,691
June 2006 79,983 61,292
TOTAL
PRODUCTION COSTS
- US$/oz
September 2006 525
June 2006 494
DEFINITIONS
Total cash costs and Total production costs are calculated in accordance with
the Gold Institute Industry standard.
(1) Operating costs - All gold mining related costs before
amortisation/depreciation, changes in gold inventory, taxation and
exceptional items.
(2) Total cash costs - Operating costs less off-mine costs, including general
and administration costs, as detailed in the table above.
(3) Total production costs - Total cash costs plus amortisation/depreciation
and rehabilitation provisions, as detailed in the table above.
* Adjusted for amortisation/depreciation (non-cash item) excluded from
gold-in-process change.
Average exchange rates are US$1 = R7.10 and US$1 = R6.39 for the September
and June 2006 quarters respectively.
# As a significant portion of the acquisition price was allocated to
tenements of St Ives and Agnew based on endowment ounces and also as these
two Australian operations are entitled to transfer and then off-set tax
losses from one company to another, it is not meaningful to split the
income statement below operating profit.
Restated total cash cost on the assumption that Ore Reserve Development
(ORD) is fully expensed
Total Mine
Operations
Total cash
costs as above
(ORD capitalised)
September 2006 2,660.6
June 2006 2,402.0
Add back ORD
September 2006 233.1
June 2006 212.7
Restated total
cash costs#
September 2006 2,893.7
June 2006 2,614.7
Restated total
cash costs
- US$ per ounce
September 2006 381
June 2006 376
Restated total
cash costs
- Rand per kilogram
September 2006 86,859
June 2006 77,187
South African Operations
Total Driefontein Kloof Beatrix
Total cash
costs as above
(ORD capitalised)
September 2006 1,565.9 618.0 589.4 358.5
June 2006 1,501.9 596.0 569.1 336.8
Add back ORD
September 2006 233.1 85.4 87.9 59.8
June 2006 212.7 81.8 75.0 55.9
Restated total
cash costs#
September 2006 1,799.0 703.4 677.3 418.3
June 2006 1,714.6 677.8 644.1 392.7
Restated total
cash costs
- US$ per ounce
September 2006 390 385 393 395
June 2006 401 372 427 416
Restated total
cash costs
- Rand per kilogram
September 2006 89,086 87,826 89,720 90,229
June 2006 82,421 76,423 87,752 85,481
International
Operations
Total
Total cash
costs as above
(ORD capitalised)
September 2006 1,094.7
June 2006 900.1
Add back ORD
September 2006
June 2006
Restated total
cash costs#
September 2006 1,094.7
June 2006 900.1
Restated total
cash costs
- US$ per ounce
September 2006 365
June 2006 335
Restated total
cash costs
- Rand per kilogram
September 2006 83,431
June 2006 68,857
#Restated total cash costs relates to total cash costs prior to the change
in accounting policy.
Operating and financial results
South African Operations
Total Mine
South Operations Total Driefontein Kloof Beatrix
African Rand
Operating Results
Ore milled/treated
(000 tons)
September 2006 12,858 3,679 1,703 992 984
June 2006 12,651 3,614 1,738 992 884
Yield
(grams per ton)
September 2006 2.6 5.5 4.7 7.6 4.7
June 2006 2.7 5.8 5.1 7.4 5.2
Gold produced
(kilograms)
September 2006 33,283 20,194 8,009 7,549 4,636
June 2006 33,783 20,803 8,869 7,340 4,594
Gold sold
(kilograms)
September 2006 33,315 20,194 8,009 7,549 4,636
June 2006 33,875 20,803 8,869 7,340 4,594
Gold price received
(Rand per kilogram)
September 2006 142,035 142,121 141,978 141,820 142,860
June 2006 128,974 129,164 128,932 129,360 129,299
Total cash costs
(Rand per kilogram)
September 2006 79,862 77,543 77,163 78,077 77,330
June 2006 70,908 72,196 67,200 77,534 73,313
Total
production costs
(Rand per kilogram)
September 2006 99,448 94,835 92,496 96,821 95,643
June 2006 88,378 90,304 82,061 95,095 98,563
Operating costs
(Rand per ton)
September 2006 215 447 382 620 385
June 2006 199 433 358 596 396
Financial Results
(Rand million)
Revenue
September 2006 4,731.9 2,870.0 1,137.1 1,070.6 662.3
June 2006 4,369.0 2,687.0 1,143.5 949.5 594.0
Operating costs
September 2006 2,763.6 1,644.0 650.0 615.5 378.5
June 2006 2,518.8 1,563.1 621.5 591.7 349.9
Gold inventory
change
September 2006 (18.3) - - - -
June 2006 (22.7) - - - -
Operating profit
September 2006 1,986.6 1,226.0 487.1 455.1 283.8
June 2006 1,872.9 1,123.9 522.0 357.8 244.1
Amortisation
of mining assets
September 2006 648.8 342.8 119.8 139.5 83.5
June 2006 587.2 367.2 129.0 124.8 113.4
Net
operating profit
September 2006 1,337.8 883.2 367.3 315.6 200.3
June 2006 1,285.7 756.7 393.0 233.0 130.7
Other
income/(expense)
September 2006 (16.8) (26.7) (8.8) (7.3) (10.6)
June 2006 (20.1) (37.0) (11.8) (10.6) (14.6)
Profit
before taxation
September 2006 1,321.0 856.5 358.5 308.3 189.7
June 2006 1,265.6 719.7 381.2 222.4 116.1
Mining
and income taxation
September 2006 476.9 302.8 122.8 106.9 73.1
June 2006 429.9 258.5 129.3 80.8 48.4
- Normal taxation
September 2006 246.3 112.9 112.8 0.1 -
June 2006 204.5 88.0 87.8 - 0.2
- Deferred taxation
September 2006 230.6 189.9 10.0 106.8 73.1
June 2006 225.4 170.5 41.5 80.8 48.2
Profit before
exceptional items
September 2006 844.1 553.7 235.7 201.4 116.6
June 2006 835.7 461.2 251.9 141.6 67.7
Exceptional items
September 2006 8.3 8.2 4.5 - 3.7
June 2006 0.6 4.8 0.1 0.1 4.6
Net profit
September 2006 852.4 561.9 240.2 201.4 120.3
June 2006 836.3 466.0 252.0 141.7 72.3
Net profit
excluding gains
and losses on
financial
instruments
and foreign
debt and
exceptional
items
September 2006 859.3 556.6 237.3 201.3 118.0
June 2006 810.6 463.2 252.0 141.7 69.5
Capital expenditure
September 2006 821.7 432.7 143.7 183.7 105.3
June 2006 726.5 440.4 168.9 141.1 130.4
Planned for next
six months
to March 2007 2,141.6 858.8 248.2 364.8 245.8
Operating and financial results
International Operations
South African Rand
Ghana
Total Tarkwa Damang
Operating Results
Ore milled/treated
(000 tons)
September 2006 9,179 5,514 1,317
June 2006 9,037 5,381 1,302
Yield
(grams per ton)
September 2006 1.4 1.0 1.1
June 2006 1.4 1.0 1.3
Gold produced
(kilograms)
September 2006 13,089 5,399 1,508
June 2006 12,980 5,475 1,733
Gold sold
(kilograms)
September 2006 13,121 5,399 1,508
June 2006 13,072 5,475 1,733
Gold price received
(Rand per kilogram)
September 2006 141,902 142,323 141,976
June 2006 128,672 128,858 129,140
Total cash costs
(Rand per kilogram)
September 2006 83,431 78,589 100,000
June 2006 68,857 66,046 64,686
Total production
costs
(Rand per kilogram)
September 2006 106,547 91,035 104,708
June 2006 85,312 76,384 68,148
Operating
costs (Rand per ton)
September 2006 122 78 108
June 2006 106 69 96
Financial
Results (Rand million)
Revenue
September 2006 1,861.9 768.4 214.1
June 2006 1,682.0 705.5 223.8
Operating costs
September 2006 1,119.6 428.5 142.4
June 2006 955.7 370.1 125.6
Gold
inventory change
September 2006 (18.3) (4.5) 7.9
June 2006 (22.7) (9.5) (3.9)
Operating profit
September 2006 760.6 344.4 63.8
June 2006 749.0 344.9 102.1
Amortisation
of mining assets
September 2006 306.0 67.8 7.0
June 2006 220.0 58.0 6.0
Net
operating profit
September 2006 454.6 276.6 56.8
June 2006 529.0 286.9 96.1
Other
income/(expense)
September 2006 9.9 (7.4) 0.2
June 2006 16.9 1.4 5.0
Profit
before taxation
September 2006 464.5 269.2 57.0
June 2006 545.9 288.3 101.1
Mining and
income taxation
September 2006 174.1 86.2 19.2
June 2006 171.4 84.2 28.8
- Normal taxation
September 2006 133.4 91.1 8.9
June 2006 116.5 65.0 19.3
- Deferred taxation
September 2006 40.7 (4.9) 10.3
June 2006 54.9 19.2 9.5
Profit before
exceptional items
September 2006 290.4 183.0 37.8
June 2006 374.5 204.1 72.3
Exceptional items
September 2006 0.1 - -
June 2006 (4.2) - -
Net profit
September 2006 290.5 183.0 37.8
June 2006 370.3 204.1 72.3
Net profit
excluding gains
and losses on
financial
instruments
and foreign
debt and
exceptional
items
September 2006 302.7 191.0 40.6
June 2006 347.4 199.7 70.1
Capital expenditure
September 2006 389.0 90.2 48.1
June 2006 286.1 84.1 53.4
Planned for next
six months
to March 2007 1,282.8 557.8 120.8
International Operations
South African Rand
Venezuela Australia #
Choco 10 St Ives Agnew
Operating Results
Ore milled/treated
(000 tons)
September 2006 306 1,698 344
June 2006 348 1,682 324
Yield
(grams per ton)
September 2006 1.7 2.3 5.4
June 2006 1.8 2.2 4.7
Gold produced
(kilograms)
September 2006 504 3,837 1,841
June 2006 618 3,622 1,532
Gold sold
(kilograms)
September 2006 536 3,837 1,841
June 2006 710 3,622 1,532
Gold price received
(Rand per kilogram)
September 2006 136,940 141,725 142,423
June 2006 126,056 128,548 128,982
Total cash costs
(Rand per kilogram)
September 2006 104,478 97,941 47,691
June 2006 60,282 79,983 61,292
Total production
costs
(Rand per kilogram)
September 2006 128,172 119,743
June 2006 78,592 101,494
Operating
costs (Rand per ton)
September 2006 228 231 253
June 2006 118 188 315
Financial
Results (Rand million)
Revenue
September 2006 73.4 543.8 262.2
June 2006 89.5 465.6 197.6
Operating costs
September 2006 69.6 392.0 87.1
June 2006 41.1 316.8 102.1
Gold
inventory change
September 2006 (4.1) (19.8) 2.2
June 2006 2.9 (9.7) (2.5)
Operating profit
September 2006 7.9 171.6 172.9
June 2006 45.5 158.5 98.0
Amortisation
of mining assets
September 2006 12.7 218.5
June 2006 13.0 143.0
Net
operating profit
September 2006 (4.8) 126.0
June 2006 32.5 113.5
Other
income/(expense)
September 2006 6.1 11.0
June 2006 0.3 10.2
Profit
before taxation
September 2006 1.3 137.0
June 2006 32.8 123.7
Mining and
income taxation
September 2006 14.1 54.6
June 2006 16.1 42.3
- Normal taxation
September 2006 14.1 19.3
June 2006 16.1 16.1
- Deferred taxation
September 2006 - 35.3
June 2006 - 26.2
Profit before
exceptional items
September 2006 (12.8) 82.4
June 2006 16.7 81.4
Exceptional items
September 2006 - 0.1
June 2006 - (4.2)
Net profit
September 2006 (12.8) 82.5
June 2006 16.7 77.2
Net profit
excluding gains
and losses on
financial
instruments
and foreign
debt and
exceptional
items
September 2006 (12.8) 83.9
June 2006 16.7 60.9
Capital expenditure
September 2006 77.2 116.3 57.2
June 2006 26.8 90.2 31.6
Planned for next
six months
to March 2007 158.8 322.0 123.4
Average exchange rates are US$1 = R7.10 and US$1 = R6.39 for the September 2006
and June 2006 quarters respectively.
Figures may not add as they are rounded independently.
Operating and financial results
South African Operations
Total Mine
United States Dollars Operations Total Drie- Kloof Beatrix
fontein
Operating Results
Ore milled/treated
(000 tons)
September 2006 12,858 3,679 1,703 992 984
June 2006 12,651 3,614 1,738 992 884
Yield (ounces per ton)
September 2006 0.083 0.176 0.151 0.245 0.151
June 2006 0.086 0.185 0.164 0.238 0.167
Gold produced (000 ounces)
September 2006 1,071.2 649.3 257.5 242.7 149.1
June 2006 1,086.1 668.8 285.1 236.0 147.7
Gold sold (000 ounces)
September 2006 1,071.1 649.3 257.5 242.7 149.1
June 2006 1,089.1 668.8 285.1 236.0 147.7
Gold price received
(dollars per ounce)
September 2006 622 623 622 621 626
June 2006 628 629 628 630 629
Total cash costs
(dollars per ounce)
September 2006 350 340 338 342 339
June 2006 345 351 327 377 357
Total production costs
(dollars per ounce)
September 2006 436 415 405 424 419
June 2006 430 440 399 463 480
Operating costs
(dollars per ton)
September 2006 30 63 54 88 54
June 2006 31 68 56 94 62
Financial Results
($ million)
Revenue
September 2006 666.5 404.2 160.2 150.8 93.3
June 2006 682.7 419.8 178.7 148.4 92.8
Operating costs
September 2006 389.2 231.5 91.5 86.7 53.
June 2006 393.6 244.2 97.1 92.5 54.7
Gold inventory change
September 2006 (2.6) - - - -
June 2006 (3.6) - - - -
Operating profit
September 2006 279.9 172.7 68.7 64.1 40.0
June 2006 292.7 175.7 81.6 55.9 38.1
Amortisation
of mining assets
September 2006 91.4 48.3 16.9 19.6 11.9
June 2006 91.8 57.4 20.2 19.5 17.7
Net operating profit
September 2006 188.5 124.4 51.8 44.5 28.1
June 2006 200.9 118.3 61.4 36.4 20.4
Other income/(expenses)
September 2006 (2.4) (3.8) (1.2) (1.0) (1.5)
June 2006 (3.2) (5.8) (1.8) (1.7) (2.3)
Profit before
taxation
September 2006 186.1 120.7 50.5 43.5 26.6
June 2006 197.7 112.5 59.6 34.7 18.1
Mining and
income taxation
September 2006 67.2 42.7 17.3 15.1 10.3
June 2006 67.2 40.3 20.2 12.6 7.5
- Normal taxation
September 2006 34.7 15.9 15.9 - -
June 2006 32.1 13.7 13.7 - -
- Deferred taxation
September 2006 32.5 26.8 1.4 15.1 10.3
June 2006 35.2 26.7 6.6 12.5 7.6
Profit before
exceptional items
September 2006 119.0 78.1 33.2 28.4 16.4
June 2006 130.5 72.1 39.4 22.1 10.6
Exceptional items
September 2006 1.1 1.1 0.6 - 0.5
June 2006 0.1 0.8 - - 0.7
Net profit
September 2006 120.1 79.2 33.9 28.4 16.9
June 2006 130.6 72.9 39.4 22.1 11.3
Net profit
excluding gains
and losses on
financial instruments
and foreign debt and
exceptional items
September 2006 121.9 79.2 33.9 28.4 16.9
June 2006 126.5 72.3 39.3 22.1 10.9
Capital expenditure
($ million)
September 2006 115.7 60.9 20.2 25.9 14.8
June 2006 113.6 68.9 26.4 22.1 20.4
Planned for next
six months to March 2007 290.0 121.0 35.0 51.4 34.6
Average exchange rates are US$1 = R7.10 and US$1 = R6.39 for the September 2006
and June 2006 quarters respectively. The Australian Dollar exchange rates were
AUS$1 = R5.38 and AUS$1 = R4.77 for the September 2006 and June 2006 quarters
respectively.
# As a significant portion of the acquisition price was allocated to tenements
of St Ives and Agnew on endowment ounces and also as these two Australian
operations are entitled to transfer and then off-set tax losses from one
company to another, it is not meaningful to split the income statement below
operating profit.
Figures may not add as they are rounded independently.
Operating and financial results
United States
Dollars
Total
Operating Results
Ore
milled/treated
(000 tons)
September 2006 9,179
June 2006 9,037
Yield
(ounces per ton)
September 2006 0.046
June 2006 0.046
Gold produced
(000 ounces)
September 2006 420.8
June 2006 417.3
Gold sold
(000 ounces)
September 2006 421.8
June 2006 420.3
Gold price
received
(dollars
per ounce)
September 2006 622
June 2006 626
Total cash costs
(dollars
per ounce)
September 2006 365
June 2006 335
Total
production costs
(dollars
per ounce)
September 2006 467
June 2006 415
Operating costs
(dollars per ton)
September 2006 17
June 2006 17
Financial
Results
($ million)
Revenue
September 2006 262.3
June 2006 263.0
Operating costs
September 2006 157.7
June 2006 149.3
Gold
inventory change
September 2006 (2.6)
June 2006 (3.5)
Operating profit
September 2006 107.1
June 2006 117.1
Amortisation
of mining assets
September 2006 43.1
June 2006 34.4
Net
operating
profit
September 2006 64.0
June 2006 82.7
Other
income/(expenses)
September 2006 1.4
June 2006 2.5
Profit
before taxation
September 2006 65.4
June 2006 85.2
Mining and
income taxation
September 2006 24.5
June 2006 26.9
- Normal
taxation
September 2006 18.8
June 2006 18.2
- Deferred
taxation
September 2006 5.7
June 2006 8.6
Profit before
exceptional
items
September 2006 40.9
June 2006 58.4
Exceptional items
September 2006 -
June 2006 (0.7)
Net profit
September 2006 40.9
June 2006 57.8
Net profit
excluding
gains and
losses on
financial
instruments
and foreign
debt, and
exceptional
items
September 2006 42.7
June 2006 54.2
Capital
expenditure
September 2006 54.8
June 2006 44.7
Planned
for next
six months
to March 2007 168.8
International Operations
United States
Dollars Ghana Venezuela Australia #
Tarkwa Damang Choco 10 St Ives Agnew
Operating Results
Ore
milled/treated
(000 tons)
September 2006 5,514 1,317 306 1,698 344
June 2006 5,381 1,302 348 1,682 324
Yield
(ounces per ton)
September 2006 0.031 0.037 0.053 0.073 0.172
June 2006 0.033 0.043 0.057 0.069 0.152
Gold produced
(000 ounces)
September 2006 173.6 48.5 16.2 123.4 59.2
June 2006 176.0 55.7 19.9 116.4 49.3
Gold sold
(000 ounces)
September 2006 173.6 48.5 17.2 123.4 59.2
June 2006 176.0 55.7 22.8 116.4 49.3
Gold price
received
(dollars
per ounce)
September 2006 623 622 600 621 624
June 2006 627 629 614 626 628
Total cash costs
(dollars
per ounce)
September 2006 344 438 458 429 209
June 2006 321 315 293 389 298
Total
production costs
(dollars
per ounce)
September 2006 399 459 561 525
June 2006 372 332 383 494
Operating costs
(dollars per ton)
September 2006 11 15 32 33 36
June 2006 11 15 18 29 49
Financial
Results
($ million)
Revenue
September 2006 108.2 30.2 10.3 76.6 36.9
June 2006 110.2 35.0 14.0 72.8 31.0
Operating costs
September 2006 60.4 20.1 9.8 55.2 12.3
June 2006 57.8 19.6 6.4 49.5 16.0
Gold
inventory change
September 2006 (0.6) 1.1 (0.6) (2.8) 0.3
June 2006 (1.5) (0.6) 0.5 (1.5) (0.4)
Operating profit
September 2006 48.5 9.0 1.1 24.2 24.4
June 2006 53.9 16.0 7.1 24.8 15.3
Amortisation
of mining assets
September 2006 9.5 1.0 1.8 30.8
June 2006 9.1 0.9 2.0 22.3
Net
operating
profit
September 2006 39.0 8.0 (0.7) 17.7
June 2006 44.8 15.0 5.1 17.7
Other
income/(expenses)
September 2006 (1.0) - 0.9 1.5
June 2006 0.2 0.8 0.1 1.5
Profit
before taxation
September 2006 37.9 8.0 0.2 19.3
June 2006 45.0 15.8 5.1 19.2
Mining and
income taxation
September 2006 12.1 2.7 2.0 7.7
June 2006 13.2 4.5 2.6 6.6
- Normal
taxation
September 2006 12.8 1.3 2.0 2.7
June 2006 10.2 3.0 2.5 2.5
- Deferred
taxation
September 2006 (0.7) 1.5 - 5.0
June 2006 3.0 1.5 - 4.1
Profit before
exceptional
items
September 2006 25.8 5.3 (1.8) 11.6
June 2006 31.9 11.3 2.6 12.6
Exceptional items
September 2006 - - - -
June 2006 - - - (0.7)
Net profit
September 2006 25.8 5.3 (1.8) 11.6
June 2006 31.9 11.3 2.6 12.0
Net profit
excluding
gains and
losses on
financial
instruments
and foreign
debt, and
exceptional
items
September 2006 25.8 5.3 - 11.6
June 2006 31.2 11.0 2.6 9.4
Capital
expenditure
September 2006 12.7 6.8 10.9 16.4 8.1
June 2006 13.1 8.3 4.2 14.1 4.9
Planned
for next
six months
to March 2007 73.4 15.9 20.9 42.4 16.2
Australian Dollars
United States
Dollars Australia #
St Ives Agnew
Operating Results
Ore
milled/treated
(000 tons)
September 2006 1,698 344
June 2006 1,682 324
Yield
(ounces per ton)
September 2006 0.073 0.172
June 2006 0.069 0.152
Gold produced
(000 ounces)
September 2006 123.4 59.2
June 2006 116.4 49.3
Gold sold
(000 ounces)
September 2006 123.4 59.2
June 2006 116.4 49.3
Gold price
received
(dollars
per ounce)
September 2006 820 823
June 2006 838 841
Total cash costs
(dollars
per ounce)
September 2006 564 276
June 2006 522 400
Total
production costs
(dollars
per ounce)
September 2006 693
June 2006 662
Operating costs
(dollars per ton)
September 2006 43 47
June 2006 39 66
Financial
Results
($ million)
Revenue
September 2006 101.1 48.7
June 2006 97.7 41.5
Operating costs
September 2006 72.9 16.2
June 2006 66.5 21.4
Gold
inventory change
September 2006 (4.1) 0.4
June 2006 (2.0) (0.5)
Operating profit
September 2006 32.3 32.1
June 2006 33.3 20.6
Amortisation
of mining assets
September 2006 41.8
June 2006 30.0
Net
operating
profit
September 2006 22.6
June 2006 23.8
Other
income/(expenses)
September 2006 2.0
June 2006 2.1
Profit
before taxation
September 2006 24.6
June 2006 26.0
Mining and
income taxation
September 2006 9.9
June 2006 8.9
- Normal
taxation
September 2006 3.6
June 2006 3.4
- Deferred
taxation
September 2006 6.3
June 2006 5.5
Profit before
exceptional
items
September 2006 14.7
June 2006 17.1
Exceptional items
September 2006 -
June 2006 (0.9)
Net profit
September 2006 14.8
June 2006 16.2
Net profit
excluding
gains and
losses on
financial
instruments
and foreign
debt, and
exceptional
items
September 2006 14.8
June 2006 12.8
Capital
expenditure
September 2006 21.6 10.6
June 2006 18.9 6.6
Planned
for next
six months
to March 2007 56.1 21.5
Underground and surface
South African Rand and Metric Units
South African Operations
Operating Results Total Mine
Operations Total Drie- Kloof Beatrix
fontein
Ore milled /
treated (000 ton)
- underground
September 2006 3,316 2,800 964 852 984
June 2006 3,204 2,634 924 826 884
- surface
September 2006 9,542 879 739 140 -
June 2006 9,447 980 814 166 -
- total
September 2006 12,858 3,679 1,703 992 984
June 2006 12,651 3,614 1,738 992 884
Yield
(grams per ton)
- underground
September 2006 6.8 6.9 7.5 8.7 4.7
June 2006 7.1 7.5 8.7 8.7 5.2
- surface
September 2006 1.1 1.0 1.1 0.9 -
June 2006 1.2 1.0 1.0 0.9 -
- combined
September 2006 2.6 5.5 4.7 7.6 4.7
June 2006 2.7 5.8 5.1 7.4 5.2
Gold produced
(kilograms)
- underground
September 2006 22,449 19,287 7,228 7,423 4,636
June 2006 22,718 19,825 8,044 7,187 4,594
- surface
September 2006 10,834 907 781 126 -
June 2006 11,065 978 825 153 -
- total
September 2006 33,283 20,194 8,009 7,549 4,636
June 2006 33,783 20,803 8,869 7,340 4,594
Operating costs
(Rand per ton)
- underground
September 2006 543 567 626 711 385
June 2006 528 574 622 712 396
- surface
September 2006 101 64 63 72 -
June 2006 87 52 58 24 -
- total
September 2006 215 447 382 620 385
June 2006 199 433 358 596 396
International Operations
Operating Results Ghana Venezuela Australia
Total Tarkwa Damang Choco 10 St Ives Agnew
Ore milled /
treated (000 ton)
- underground
September 2006 516 - - - 396 120
June 2006 570 - - - 458 112
- surface
September 2006 8,663 5,514 1,317 306 1,302 224
June 2006 8,467 5,381 1,302 348 1,224 212
- total
September 2006 9,179 5,514 1,317 306 1,698 344
June 2006 9,037 5,381 1,302 348 1,682 324
Yield
(grams per ton)
- underground
September 2006 6.1 - - - 4.4 12.0
June 2006 5.1 - - - 3.7 10.6
- surface
September 2006 1.2 1.0 1.1 1.8 1.6 1.8
June 2006 1.2 1.0 1.3 1.8 1.6 1.6
- combined
September 2006 1.4 1.0 1.1 1.8 2.3 5.4
June 2006 1.4 1.0 1.3 1.8 2.2 4.7
Gold produced
(kilograms)
- underground
September 2006 3,162 - - - 1,725 1,437
June 2006 2,893 - - - 1,702 1,191
- surface
September 2006 9,927 5,399 1,508 504 2,112 404
June 2006 10,087 5,475 1,733 618 1,920 341
- total
September 2006 13,089 5,399 1,508 504 3,837 1,841
June 2006 12,980 5,475 1,733 618 3,622 1,532
Operating costs
(Rand per ton)
- underground
September 2006 414 - - - 398 466
June 2006 316 - - - 300 379
- surface
September 2006 105 78 108 228 180 139
June 2006 92 69 96 118 146 282
- total
September 2006 122 78 108 228 231 253
June 2006 106 69 96 118 188 315
Restated operating cost per ton on the assumption that the Ore Reserve
Development (ORD) is fully expensed
Total Mine Operations
- underground
September 2006 612
June 2006 595
- surface
September 2006 101
June 2006 87
- total
September 2006 233
June 2006 216
South African Operations
Total Driefontein Kloof Beatrix
- underground
September 2006 650 715 814 445
June 2006 655 710 802 459
- surface
September 2006 64 63 72 0
June 2006 52 58 24 0
- total
September 2006 510 432 709 445
June 2006 491 405 672 459
International
Operations
Total
- underground
September 2006 414
June 2006 316
- surface
September 2006 105
June 2006 92
- total
September 2006 122
June 2006 106
The above comparison is calculated on the basis that ORD is expensed.
Surface unit costs are unchanged.
Development results
Development values represent the actual results of sampling and no allowance
has been made for any adjustments which may be necessary when estimating ore
reserves. All figures below exclude shaft sinking metres
Driefontein September 2006 quarter
Carbon
Reef Leader Main VCR
Advanced (m) 4,376 824 1,839
Advanced on reef (m) 993 163 246
Sampled (m) 942 141 252
Channel width (cm) 60 44 77
Average value - (g/t) 19.7 11.3 13.4
- (cm.g/t) 1,1859(1) 502 1,028(2)
Driefontein June 2006 quarter
Carbon
Reef Leader Main VCR
Advanced (m) 4,796 713 1,595
Advanced on reef (m) 887 243 121
Sampled (m) 768 240 168
Channel width (cm) 55 57 27
Average value - (g/t) 35.6 5.3 23.1
- (cm.g/t) 1,965 299 625
Kloof September 2006 quarter
Reef Libanon Kloof Main VCR
Advanced (m) 12 312 1,587 6,719
Advanced on reef (m) - 54 440 1,320
Sampled (m) - 57 438 979
Channel width (cm) - 85 100 78
Average value - (g/t) - 6.0 9.6 19.5
- (cm.g/t) - 506 954 1,522(3)
Kloof June 2006 quarter
Reef Libanon Kloof Main VCR
Advanced (m) 18 207 1,258 6,718
Advanced on reef (m) 18 121 404 1,503
Sampled (m) 9 126 318 1,318
Channel width (cm) 248 142 145 80
Average value - (g/t) - 4.4 7.5 23.1
- (cm.g/t) - 619 1,091 1,852
Beatrix September 2006 quarter June 2006 quarter
Reef Beatrix Kalkoen- Beatrix Kalkoen-
krans krans
Advanced (m) 8,366 2,629 7,737 2,304
Advanced on reef (m) 1,516 56 1,224 94
Sampled (m) 1,470 63 1,182 114
Channel width (cm) 77 137 90 131
Average value - (g/t) 12.2 19.7 11.2 9.9
- (cm.g/t) 932 2,698 1,007 1,294
1) Low values were intersected developing to the east on 1 and 5 shafts in
the single band Carbon Leader. At 5 shaft the low grades are monthly
mostly associated with a faulted zone associated with the syncline axis.
2) VCR values at 4 shaft were high, but low grades at 2 and 6 shafts reduced
the overall value.
3) The off-reef development is focused on accessing the higher grade VCR
between 3 and 4 shafts.
Administration and corporate information
Corporate Secretary
CAIN FARREL
Telephone: (+27)(11) 644 2525
Facsimile: (+27)(11) 484 0626
e-mail: cain.farrel@goldfields.co.za
Registered offices
JOHANNESBURG
Gold Fields Limited
24 St Andrews Road
Parktown
Johannesburg
2193
Postnet Suite 252
Private Bag x 30500
Houghton 2041
Tel: (+27)(11) 644-2400
Fax: (+27)(11) 484-0626
LONDON
St James"s Corporate Services Limited
6 St James"s Place
London SW1A 1NP
United Kingdom
Telephone:(+44)(20) 7499 3916
Facsimile: (+44)(20) 7491 1989
American Depository
Receipts Transfer Agent
Bank of New York
Shareholder Relations
P O Box 11258
New York, NY20286 -1258
US toll-free telephone: (1)(888) 269 2377
e-mail: shareowner-svcs@mail.bony.com
Gold Fields Limited
Incorporated in the Republic of South Africa
Registration number 1968/004880/06
Share code: GFI
Issuer code: GOGOF
ISIN - ZAE 000018123
Investor relations
South Africa
WILLIE JACOBSZ
Telephone: (+27)(11) 644 2460
Facsimile: (+27)(11) 484 0639
e-mail: williej@goldfields.co.za
NERINA BODASING
Telephone: (+27)(11) 644 2630
Facsimile: (+27)(11) 484 0639
e-mail: nerina.bodasing@goldfields.co.za
North America
CHERYL A MARTIN
Telephone: (+1)(303) 796 8683
Facsimile: (+1)(303) 796 8293
e-mail: camartin@gfexpl.com
Transfer Secretaries
South Africa
Computershare Investor Services 2004
(Proprietary) Limited
Ground Floor
70 Marshall Street
Johannesburg, 2001
P O Box 61051
Marshalltown, 2107
Telephone: (+27)(11) 370 5000
Facsimile: (+27)(11) 370 5271
United Kingdom
Capita Registrars
Bourne House
34 Beckenham Road
Beckenham
Kent BR3 4TU
England
Telephone: (+44)(20) 8639 2000
Facsimile: (+44)(20) 8658 3430
WEBSITE
http://www.goldfields.co.za
http://www.gold-fields.com
Forward Looking Statements
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 involve known and unknown risks, uncertainties
and other important factors that could cause the actual results, performance or
achievements of the company to be materially different from the future results,
performance or achievements expressed or implied by such forward looking
statements.
Such risks, uncertainties and other important factors include among others:
economic, business and political conditions in South Africa; decreases in the
market price of gold; hazards associated with underground and surface gold
mining; labour disruptions; changes in government regulations, particularly
environmental regulations; changes in exchange rates; currency devaluations;
inflation and other macro-economic factors; and the impact of the AIDS crisis
in South Africa. These forward looking statements speak only as of the date of
this document.
The company 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.
Directors
A J Wright (Chairman)
I D Cockerill * (Chief Executive Officer)
N J Holland * (Chief Financial Officer)
K Ansah#
G J Gerwel
A Grigorian
J G Hopwood
J M McMahon *
D M J Ncube
R L Pennant-Rea *
P J Ryan
T M G Sexwale
C I von Christierson
* British
# Ghanaian
Russian
Date: 26/10/2006 08:02:13 AM Produced by the JSE SENS Department
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