Gold Fields South Deep New Order Mining Right Executed and Bee Transactions

JOHANNESBURG, Aug. 5 /CNW/ - Following on its 10 May 2010 media release, Gold Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) is pleased to announce that the Department of Mineral Resources (DMR) of South Africa has executed the new order mining right for its South Deep gold mine.

The cumulative effect of this execution, together with the previous conversions for Driefontein, Kloof and Beatrix granted in 2006, is all of Gold Fields' South African operations have now been granted their new order mining right.

The South Deep license has also been extended by the DMR to include a contiguous property, called Uncle Harry's, which contains a mineral resource of about 14.5 million ounces of gold.

On 10 May 2010 we also stated that to meet its 2014 Black Economic Empowerment equity ownership requirements, Gold Fields would be developing a number of empowerment transactions. The terms of these transactions have now been finalised and approved by the DMR.

"Once concluded, these three transactions will enable Gold Fields to meet its 2014 BEE ownership commitments," says Gold Fields Chief Executive Officer Nick Holland.

Gold Fields aims to complete the following three transactions before the end of 2010:

Transaction 1

Gold Fields will facilitate the establishment of an Employee Share Option Scheme (Esop) in respect of an effective 10.75% stake in GFIMSA (the holding company which controls Gold Fields' South African assets). The Esop will be housed and administered through the Thusano Share Trust. The holding in GFIMSA is equivalent to about 13.5 million unencumbered Gold Fields Limited shares with full voting rights, which will be issued to and held by the Trust at par value of R0.50 which represents a 99.5% discount to the 30 days VWAP price at 30 July 2010. This represents approximately 1.91% of the current Gold Fields shares in issue. At the Gold Fields closing share price on 30 July 2010 of R98.35, the approximate accounting cost of this deal to shareholders would be about R1 billion.

Transaction 2

The issue to a broad-based BEE consortium as described below (BEECO) of about 600,000 Gold Fields Limited shares at par value of R0.50 which represents a 99.5% discount to the 30 days VWAP price at 30 July 2010, valued at approximately R60 million. This represents about 0.08% of the current Gold Fields shares in issue. These shares will carry no restrictions.

Transaction 3

BEECO will also subscribe for a 10% holding with full voting rights directly in South Deep with a phased in participation over 20 years. Transaction 3 is below the JSE transaction threshold of 5% and is not with related parties as defined as per the JSE Limited Listings Requirements and is therefore included for information purposes only.

"These deals are central to our commitment to make every current employee at the company an owner. At the same time we are expanding opportunities for historically disadvantaged persons to benefit from the exploitation of the country's mineral resources by promoting broad-based ownership, employment, and the advancement of social and economic welfare generally," Holland added.

In terms of JSE Listing Requirements a circular giving full details of the transaction will be distributed to shareholders in due course. The transactions are subject to certain suspensive conditions, including shareholder approval for Transactions 1 and 2. The detailed pro-forma effect of Transactions 1 and 2 are outlined below.

Details of the ESOP scheme

    -   About 47,100 GFIMSA employees in the Paterson Grade A to C categories
        will be granted approximately 13.5 million unencumbered new Gold
        Fields Limited shares through the Thusano Trust.
    -   About 12.6 million of the shares will be allocated to HDSA employees,
        an effective 10% stake in GFIMSA.
    -   The approximate 13.5 million Gold Fields Limited shares in the ESOP
        scheme will be held by the Gold Fields Thusano Share Trust for 15
    -   The Thusano Trust will have 14 trustees comprising 10 trade union
        representatives, 2 Gold Fields trustees and two independent trustees,
        of whom one will be the chairperson.
    -   The Thusano Trust will exercise full voting rights on behalf of the
    -   The share allocation to employees will be based on an employee's
        length of service with Gold Fields, ranging from 100 shares for one
        year service to 480 shares for 20 years service.
    -   The shares are allocated free of charge but have to be held for 15
        years. The employees will receive dividend payments during those 15
        years. Based on historical dividend yields the dividend payments will
        total about R20 million a year.

Details of the BEE consortium (BEECO)

    -   The newly formed BEECO will comprise:

    (i) a Broad-Based Education Trust, to facilitate and promote education,
    youth and skills development for the mining industry. The majority of the
    Trustees will be independent and the Trust will hold a 54% beneficial
    interest in BEECO;

    (ii) a selected number of black business and community leaders, who will
    not be related parties as defined by the JSE Listings Requirements and
    will hold a combined 36% beneficial interest in BEECO; and

    (iii) a Broad-Based Community Trust. The majority of the Trustees will be
    independent and the Trust will hold a 10% beneficial interest in BEECO;

    -   The acquisition of the BEECO's 10% stake in South Deep will be
        facilitated through a unique vendor financed phased participation
        scheme that will see the shareholding acquired at no cost to the
    -   The BEECO will hold 10% of South Deep in the form of B-class Shares
        with full ownership and voting rights. As holders of the B-class
        Shares the BEECO will be entitled to a cumulative preferential
        dividend of R20 million per annum for the first 10 years, R13.3
        million per annum for the next five years and R6.7 million for the
        next five years (R2.00 per B-class Share) payable out of profits of
        South Deep. After 20 years the preferential dividend ceases.
    -   The B-class Shares' right to participate in other distributions over
        and above the preferred dividend will initially be suspended. The
        suspension will be lifted on a phased-in basis, resulting in the B-
        class Shares having the same rights as the A-class Shares, as
    -   After 10 years, in respect of one-third of the B-class Shares;
    -   After 15 years, in respect of another one-third of the B-class
        Shares; and
    -   After 20 years, in respect of the remaining one-third of the B-class
    -   The BEECO must retain ownership of South Deep for 30 years which is
        the term of the new order mining right granted to South Deep.

Pro-forma Impact

The unaudited pro forma financial effects of Transaction 1 and Transaction 2 are set out below. The unaudited pro forma financial effects have been prepared for illustrative purposes only to provide information on how the proposed Transactions might have affected the reported historical financial information of Gold Fields. The cost of both transactions will be expensed immediately to the income statement with no subsequent mark to market adjustments. Because of its nature, the unaudited pro forma financial effects may not fairly present Gold Fields financial position, changes in comprehensive income, changes in equity, and results of operations or cash flows after the Transactions. The unaudited pro forma financial effects are the responsibility of the Directors.

The table below sets out the unaudited pro forma financial effects on Gold Fields of Transactions 1 and 2 based on published financial results of Gold Fields for the financial year ended 30 June 2010. The pro forma earnings "After Transactions 1 and 2" include an upfront International Financial Reporting Standards (IFRS 2), Share-based payments charge in respect of Transactions 1 and 2 which are non-recurring.

    Pro forma financial effects for the financial year ended 30 June 2010

               Before                                  After
            Transactions  Transaction  Transaction  Transactions  Percentage
               1 and 2         1            2         1 and 2       change

    per share        515         (149)          (8)         358       -30.6%

    per share        508         (146)          (9)         353       -30.5%

    per share        449         (148)          (8)         293       -34.7%

    per share        443         (145)          (9)         289       -34.8%

    Net asset
    per share      6,438         (121)          (5)       6,312        -2.0%

    per share      5,807         (109)          (5)       5,693        -2.0%

    number of
    shares   705,364,200                            719,505,946         2.0%

    number of
    shares   714,549,842                            728,691,588         2.0%

    number of
    shares   705,903,511                            720,045,257         2.0%


1. Earnings per share (EPS), Diluted earnings per share (DEPS), Headline earnings per share (HEPS), Diluted headline earnings per share (DHEPS), Net asset value (NAV) per share "Before Transaction 1 and 2" are based on the published financial results of Gold Fields for the financial year ended 30 June 2010.

2. EPS, DEPS, HEPS and DHEPS "After Transaction 1 and 2" are based on the assumption that the Transaction was implemented on 1 July 2009.

3. NAV per share "After Transaction 1 and 2" is based on the assumption that the Transaction was implemented on 1 July 2009.

4. Earnings "After Transaction 1 and 2" have been reduced by a non-recurring charge of R1,058 million in respect of IFRS 2, Share-based payments. In terms of IFRS 2, the difference between the fair value of the issued shares under Transaction 1 and 2 and the subscription price is an expense which is charged through the Statement of Operations (income statement) of Gold Fields. For purposes of preparation of the pro forma financial effects, the difference is assumed to be R1,058 million.

5. In determining the charge of R1,058 million, the closing share price on Friday, 30 July 2010 of R98.35 per share was used to determine the fair value of shares granted. In the case of Transaction 1, which has restrictions on trading of the shares, a liquidity discount was applied.

6. Transaction 3 has not been included in the financial effects as it is not required in terms of this announcement.

Notes to editors

About Gold Fields

Gold Fields is one of the world's largest unhedged producers of gold with attributable production of 3.6 million ounces* per annum from nine operating mines in South Africa, Ghana, Australia and Peru. Gold Fields also has an extensive growth pipeline with both greenfields and near mine exploration projects at various stages of development. Gold Fields has total attributable Mineral Reserves of 81 million ounces and Mineral Resources of 271 million ounces. Gold Fields is listed on JSE Limited (primary listing), the New York Stock Exchange (NYSE), the Dubai International Financial Exchange (DIFX), the Euronext in Brussels (NYX) and the Swiss Exchange (SWX).

For more information please visit the Gold Fields website at

Sponsor: J.P. Morgan Equities limited

SOURCE Gold Fields Limited

For further information: For further information: Enquiries - Investor Enquiries: Willie Jacobsz, Tel +508-839-1188, Mobile +857-241-7127, email; Nikki Catrakilis-Wagner, Tel +27-11-562-9706, Mobile +27(0)83-309-6720, email; Media Enquiries: Sven Lunsche, Tel +27-11-562-9763, Mobile +27-(0)83-260-9279, email

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