August 1, 2008
Gold Fields Improves Operational Performance Due to Stabilization of Power Supplies in South Africa
JOHANNESBURG, August 1 /PRNewswire-FirstCall/ -- Gold Fields Limited (NYSE & JSE: GFI) today announced net earnings for the June 2008 quarter of R843 million, compared with earnings of R1,248 million and R528 million for the March 2008 and the June 2007 quarters respectively. In US dollar terms net earnings for the June 2008 quarter were US$105 million, compared with earnings of US$167 million and US$74 million for the March 2008 and the June 2007 quarters respectively.
June 2008 quarter salient features: - Attributable gold production increased by 5 per cent to 865,000 ounces; - Total cash costs steady at R125,359 per kilogram (US$502 per ounce); - Notional Cash Expenditure (operating cost plus capital expenditure) at R217,065 per kilogram (US$869 per ounce) due to high inward investment in growth projects; - Operating profit increased 6 per cent to R2.72 billion and normalised earnings of R911 million generated; - Commissioning underway at Cerro Corona and Tarkwa's CIL expansion due for completion in the December quarter. Financial year salient features: - Attributable gold production of 3.64 million ounces compared with 3.97 million ounces in the previous year; - Total cash costs increased from R86,623 per kilogram (US$374 per ounce) to R111,315 per kilogram (US$476 per ounce) due to the lower production and cost pressures driven by the resource boom; - Essakane and Venezuelan assets sold in the December quarter 2007, releasing R4.2 billion (US$615 million) in value; - US$438 million invested in growth projects in Peru and Ghana; - US$121 million invested in increasing our ownership in Sino Gold and Conquest Mining to 19.9 per cent and 19.1 per cent respectively.
Final dividend number 69 of 120 SA cents per share is payable on 25 August 2008, giving a total dividend for financial 2008 of 185 SA cents per share.
"After a particularly difficult start to the quarter, with the accident at the South Deep Gold Mine in which nine of our colleagues tragically lost their lives, the people of Gold Fields rallied together to show their mettle. Galvanized by my statement that 'we will not mine if we cannot mine safely', they took control of the safety situation on all of our mines, where a new safety culture is rapidly taking root.
"Against this backdrop, Gold Fields staged a welcome recovery with production increasing by 5 per cent from Q3 which was negatively impacted by power interruptions, while maintaining a tight control on costs, despite the continued inflationary pressures world-wide. Notional Cash Expenditure (operating cost and capital expenditure) for the quarter increased from US$843 per ounce in Q3 to US$869 per ounce, largely on the back of increased capital expenditure at the international operations. The Group's NCE is expected to decline significantly early in calendar 2009 as capital expenditure on the Cerro Corona project is completed and the mine becomes operational along with the Tarkwa expansion.
"A comprehensive review of infrastructure across our operations, following from the heightened safety awareness across the Group since my appointment, has resulted in urgent rehabilitation being necessary at the Main shaft infrastructure at Kloof and in particular replacement of a significant portion of the steelwork below 17 level. As a consequence, the operation of this shaft is to be suspended for approximately six months while the necessary maintenance is carried out. Kloof's production over this period is expected to reduce by between 25 and 35 per cent. Operations will continue at this shaft on a 1 day a week basis to maintain integrity of faces and ore passes. Driefontein's production will also decline in the September quarter by approximately 400 kilograms due to a need to catch up safety critical secondary support and South Deep is already in the process of reinstalling primary support at its 95 2 West and 95 3 West ramps. Production at Driefontein and South Deep should return to approximately 6,800 kilograms per quarter and 1,500 kilograms per quarter respectively by the December quarter and Kloof's production should be restored to 2,000 kilograms per month by February 2009.
"Notwithstanding the short-term safety-related actions to be initiated in South Africa as referred to in the preceding paragraph, long awaited growth projects will be commenced and brought to full production over the next two quarters. In particular, the completion of the new Cave Rocks and Belleisle underground mines at St Ives; the addition of Cerro Corona and the completion of the Tarkwa CIL plant expansion during Q2, position Gold Fields well to achieve its short term target of a production rate of approximately 4 million ounces of gold per annum at an NCE of US$700 per ounce to US$725 per ounce at R/US$8.00, early in calendar 2009."
The full results are available on the Gold Fields website: http://www.goldfields.co.za/
About Gold Fields
Gold Fields Limited is one of the world's largest unhedged producers of gold with attributable production of more than four million ounces per annum from eight operating mines in South Africa, Ghana and Australia.
A ninth mine, the Cerro Corona Gold/Copper mine in Peru, is expected to commence production by mid 2008 at an initial rate of approximately 400,000 gold equivalent ounces per annum.
The company has total attributable ore reserves of 92 million ounces and mineral resources of 252 million ounces.
Gold Fields employs some 53,000 permanent employees across its operations and is listed on the JSE Limited South Africa (primary listing), the New York Stock Exchange (NYSE) and the Dubai International Financial Exchange (DIFX). All of Gold Fields' operations are ISO14001 certified. For more information please visit the Gold Fields website at http://www.goldfields.co.za/.
Gold Fields Limited
CONTACT: Enquiries: Willie Jacobsz, Tel: +508-358-0188, Mobile:+857-241-7127, Gold Fields Limited, 24 St Andrews Road, Parktown, 2193,Postnet Suite 252, Privte Bag X30500, Houghton, 2041, South Africa,+27-11-644-2400, Fax +27-11-484-0639