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GOLD FIELDS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 97/19961/06)
("GOLD FIELDS")
ANGLOGOLD LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/17354/06)
("ANGLOGOLD")
DRIEFONTEIN CONSOLIDATED LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 68/04880/06)
("DRIEFONTEIN")
ANGLO AMERICAN CORPORATION OF SOUTH AFRICA LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 01/05309/06)
("ANGLO AMERICAN")
ANGLO AMERICAN GOLD INVESTMENT COMPANY LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/09084/06)
("AMGOLD")
THE PROPOSED ACQUISITION BY GOLD FIELDS OF ANGLOGOLD'S ENTIRE INTEREST IN
DRIEFONTEIN, THE PROPOSED DISPOSAL BY GOLD FIELDS OF ITS ENTIRE INTEREST IN
ANGLOGOLD TO ANGLO AMERICAN AND AMGOLD IN EXCHANGE FOR GOLD FIELDS SHARES,
WHICH GOLD FIELDS SHARES WILL BE CANCELLED, THE PROPOSED DISTRIBUTION BY GOLD
FIELDS OF ITS RESULTING ENTIRE INTEREST IN DRIEFONTEIN TO ITS SHAREHOLDERS, THE
TERMINATION OF THE JOINT VENTURE AGREEMENT, THE PROPOSED ACQUISITION BY
DRIEFONTEIN OF THE ENTIRE ISSUED SHARE CAPITAL OF GOLD FIELDS AND THE CHANGE OF
THE NAME OF DRIEFONTEIN TO GOLD FIELDS LIMITED.
1. INTRODUCTION
ANGLOGOLD, ANGLO AMERICAN, AMGOLD, DRIEFONTEIN AND GOLD FIELDS ("THE PARTIES")
HAVE ENTERED INTO AN AGREEMENT ("THE AGREEMENT") WHICH, UPON ITS IMPLEMENTATION
SUBJECT TO THE CONDITIONS PRECEDENT, WILL RESULT IN:
* GOLD FIELDS ACQUIRING ANGLOGOLD'S ENTIRE 21,5 PER CENT INTEREST IN
DRIEFONTEIN ("THE DRIEFONTEIN SHARES ACQUISITION");
* GOLD FIELDS CANCELLING 10 828 230 GOLD FIELDS SHARES, BY WAY OF A PARTIAL
REDUCTION OF CAPITAL IN TERMS OF SECTION 84 OF THE COMPANIES ACT, 1973, AS
AMENDED, ("THE COMPANIES ACT"), WHICH GOLD FIELDS SHARES ARE HELD BY ANGLO
AMERICAN AND AMGOLD, IN EXCHANGE FOR THE DISPOSAL OF GOLD FIELDS' ENTIRE
INTEREST IN ANGLOGOLD, BEING 1 968 769 ANGLOGOLD SHARES ("THE GFL/ANGLO SHARE
EXCHANGE");
* GOLD FIELDS DISTRIBUTING ITS RESULTING ENTIRE INTEREST IN DRIEFONTEIN TO ITS
SHAREHOLDERS AS A RETURN OF CAPITAL BY WAY OF AN UNBUNDLING TRANSACTION IN
TERMS OF SECTION 60 OF THE INCOME TAX ACT, NO. 113 OF 1993, AS AMENDED ("THE
UNBUNDLING"); AND
* DRIEFONTEIN ACQUIRING THE ENTIRE ISSUED SHARE CAPITAL OF GOLD FIELDS BY WAY
OF A SCHEME OF ARRANGEMENT IN TERMS OF SECTION 311 OF THE COMPANIES ACT.
THE ABOVE TRANSACTIONS ARE REFERRED TO COLLECTIVELY AS THE COMPOSITE
TRANSACTION.
UPON THE IMPLEMENTATION OF THE SCHEME OF ARRANGEMENT AS REFERRED TO ABOVE, THE
NAME OF DRIEFONTEIN WILL BE CHANGED TO GOLD FIELDS LIMITED. IN THE EVENT OF THE
FAILURE TO IMPLEMENT SUCH SCHEME OF ARRANGEMENT AND SUBJECT TO THE APPROVAL OF
GOLD FIELDS SHAREHOLDERS THEN, AS OUTLINED IN 11 BELOW, THE DRIEFONTEIN SHARES
ACQUISITION AND THE GFL/ANGLO SHARE EXCHANGE WILL, NEVERTHELESS, PROCEED.
2. RATIONALE
2.1 RATIONALE FOR DRIEFONTEIN
ON 9 SEPTEMBER 1998, IN THE 1998 ANNUAL FINANCIAL STATEMENTS OF DRIEFONTEIN,
THE CHAIRMAN HIGHLIGHTED THAT THE ESTIMATED LIFE OF MINE MINERAL RESERVES HAD
DECLINED TO 39 MILLION OUNCES, AND OF THIS, 14 MILLION OUNCES WERE BELOW THE
DEEPEST INFRASTRUCTURE AND ONLY MARGINALLY VIABLE AT A GOLD PRICE OF R58 000
PER KILOGRAM.
ON 21 OCTOBER 1998, SHAREHOLDERS WERE INFORMED THAT AT ITS MEETING OF 23
SEPTEMBER 1998, THE DRIEFONTEIN BOARD HAD APPROVED LIFE OF MINE PLANS
INCORPORATING A REDUCTION IN MILLING RATE WITHIN THE NEXT 3 TO 5 YEARS TO ABOUT
300 000 TONNES PER MONTH OR TO 1 MILLION OUNCES OF GOLD PER ANNUM.
THESE DEVELOPMENTS, COMBINED WITH THE FACT THAT OPERATIONS ARE RAPIDLY MOVING
FROM THE SHALLOW SO-CALLED "NORTH DRIEFONTEIN" AREA TOWARDS THE SOUTHERN,
DEEPER RESERVES, MEAN THAT THE CHARACTERISTICS OF DRIEFONTEIN AS AN INVESTMENT
ARE CHANGING RAPIDLY. IN ORDER FOR DRIEFONTEIN TO RETAIN ITS INVESTMENT
ATTRACTION IT NEEDS TO PURSUE A STRATEGY WHICH WILL CHANNEL ITS FINANCIAL
STRENGTH INTO A DIVERSIFIED EARNINGS BASE WITH GROWTH POTENTIAL.
A COMBINATION OF DRIEFONTEIN AND GOLD FIELDS OFFERS THE FOLLOWING BENEFITS TO
DRIEFONTEIN SHAREHOLDERS :
* THEY ARE UNLOCKED FROM A SINGLE MINING LEASE INVESTMENT DOMINATED BY TWO
MAJOR SHAREHOLDERS IN A STRUCTURE WHICH CANNOT COMPETE INTERNATIONALLY;
* DECLINING PRODUCTION AND EARNINGS IN THE MEDIUM TERM WILL BE BALANCED BY BOTH
ORGANIC AND BUSINESS DEVELOPMENT DRIVEN GROWTH IN GOLD FIELDS;
* THE COMBINED COMPANY'S INCREASED PRODUCTION AND GREATER FINANCIAL MASS WILL
INCREASE ITS ABILITY TO SECURE NEW ORE RESERVES, SKILLS AND CAPITAL; AND
* THE EXPECTED FREE FLOAT OF THE NEW COMPANY AT APPROXIMATELY R6,9 BILLION,
COMPARED TO APPROXIMATELY R2 BILLION IN DRIEFONTEIN, WILL ENHANCE MARKET
LIQUIDITY SIGNIFICANTLY ATTRACTING GREATER INTERNATIONAL INVESTOR INTEREST AND
FACILITATING A RE-RATING.
2.2 RATIONALE FOR GOLD FIELDS
THE COMBINATION OF DRIEFONTEIN AND GOLD FIELDS SECURES THE FOLLOWING BENEFITS
FOR GOLD FIELDS:
* ESTABLISHES GREATER CRITICAL MASS WHICH WILL FACILITATE INTERNATIONALISATION,
ACCESS TO CAPITAL MARKETS AND ACCESS TO OTHER RESOURCES NECESSARY FOR EFFECTIVE
GROWTH;
* REMOVES INVESTOR UNCERTAINTY ABOUT CONTROL AND MANAGEMENT OF DRIEFONTEIN;
* REDUCES THE INFLUENCE OF A MAJOR COMPETITOR IN THE GROUP'S AFFAIRS;
* CREATES A NEW COMPANY CAPABLE OF BEING GLOBALLY COST EFFECTIVE WITH A STRONG
BALANCE SHEET AND STRONG CASH FLOWS; AND
* THE EXPECTED FREE FLOAT OF THE NEW COMPANY AT APPROXIMATELY R6,9 BILLION,
COMPARED TO THE APPROXIMATELY R3,7 BILLION IN GOLD FIELDS, WILL SIGNIFICANTLY
ENHANCE MARKET LIQUIDITY, ATTRACTING GREATER INTERNATIONAL INVESTOR INTEREST
AND FACILITATING A RE-RATING.
2.3 RATIONALE FOR ANGLOGOLD
ANGLOGOLD'S STRATEGY IS TO ACTIVELY MANAGE ITS PORTFOLIO OF ASSETS. THIS WAS
ILLUSTRATED BY THE DISPOSAL OF A NUMBER OF SHAFTS DURING 1998 AND THE
ACQUISITION OF GOLD INTERESTS IN NORTH AND SOUTH AMERICA FROM MINORCO. AS PART
OF THIS STRATEGY AND IN THE LIGHT OF THE ADJUSTMENT IN THE DRIEFONTEIN LIFE OF
MINE PLAN REFERRED TO IN 2.1 ABOVE, ANGLOGOLD HAS DECIDED TO DIVEST ITS ENTIRE
21,5 PER CENT SHAREHOLDING IN DRIEFONTEIN AND HOLD THE FUNDS FOR ALTERNATIVE
INVESTMENT OPPORTUNITIES SHOULD THEY ARISE. THIS FOLLOWS THE MUTUALLY
BENEFICIAL RATIONALISATION OF THE MINE BOUNDARY BETWEEN WESTERN DEEP LEVELS
LIMITED ("WESTERN DEEPS") AND DRIEFONTEIN DURING 1998. GOLD FIELDS AND
DRIEFONTEIN HAVE ALSO UNDERTAKEN TO CONSIDER ANY PROPOSAL MADE TO THEM BY
ANGLOGOLD RELATING TO DRIEFONTEIN AND INVOLVING WESTERN DEEPS FOR THE
EXPLORATION AND EXPLOITATION OF THE MINERAL RIGHTS HELD BY WESTERN ULTRA DEEP
LEVELS LIMITED ("WUDLS"). ANGLOGOLD HAS DEVELOPED A PATTERN OF CO-OPERATION
WITH GOLD FIELDS' MANAGEMENT IN DRIEFONTEIN AND BELIEVES IT DOES NOT NEED TO BE
A SHAREHOLDER IN DRIEFONTEIN IN ORDER TO SECURE THE PROSPECT OF CO-OPERATION
AROUND THE WUDLS OREBODY.
IN ADDITION, ANGLOGOLD BELIEVES THAT LOCATING DRIEFONTEIN IN A 21ST CENTURY
CORPORATE STRUCTURE IS IN THE INTERESTS OF DRIEFONTEIN SHAREHOLDERS AND THAT IT
IS NOT IN ANGLOGOLD'S STRATEGIC INTEREST TO BE A MINORITY SHAREHOLDER IN SUCH A
STRUCTURE.
2.4 PRO FORMA NEW GOLD FIELDS
PROVEN AND PROBABLE RESERVES(1) 96,0 MILLION OUNCES
ATTRIBUTABLE ANNUAL PRODUCTION(2) 4,0 MILLION OUNCES
TOTAL CASH COSTS (2) US$201/OUNCE
CASH FLOW FROM OPERATING ACTIVITIES(2)(3) R1,5 BILLION (US$0,25 BILLION)
MARKET CAPITALISATION(3)(4) R12,1 BILLION (US$2,0 BILLION)
FREE FLOAT(3) R6,9 BILLION (US$1,1 BILLION)
NOTES:
(1) PRO FORMA AS AT 30 JUNE 1998.
(2) PRO FORMA ANNUALISED DERIVED FROM THE PUBLISHED UNAUDITED INTERIM RESULTS
OF GOLD FIELDS AND DRIEFONTEIN FOR THE SIX MONTHS ENDED 31 DECEMBER 1998.
(3) THE US$ EQUIVALENT FIGURES ABOVE HAVE BEEN CALCULATED USING AN EXCHANGE
RATE OF R6,12 : US$1.
(4) CALCULATED USING 30 DAY WEIGHTED AVERAGE DRIEFONTEIN SHARE PRICE OF R27,08
PER SHARE AND 447 MILLION DRIEFONTEIN SHARES, BEING THE APPROXIMATE NUMBER OF
SHARES IN ISSUE ON COMPLETION OF THE COMPOSITE TRANSACTION.
3. THE COMPOSITE TRANSACTION
THE SECURITIES REGULATION PANEL ("THE SRP") AND THE JOHANNESBURG STOCK EXCHANGE
("THE JSE") HAVE APPROVED ALL THE STEPS OF THE COMPOSITE TRANSACTION OUTLINED
BELOW. IN ADDITION, THE SRP HAS RULED THAT THE DRIEFONTEIN SHARES ACQUISITION
WILL NOT REQUIRE AN OFFER TO BE EXTENDED TO THE OTHER SHAREHOLDERS OF
DRIEFONTEIN. THE COMPOSITE TRANSACTION IS CONDITIONAL ON THESE APPROVALS AND
SUCH RULINGS NOT BEING RESCINDED, REVOKED OR OTHERWISE SET ASIDE.
THE COMPOSITE TRANSACTION WILL BE EFFECTIVE FROM 1 JANUARY 1999.
NOTWITHSTANDING THIS EFFECTIVE DATE, EXISTING DRIEFONTEIN, GOLD FIELDS AND
ANGLOGOLD SHAREHOLDERS WILL RECEIVE THEIR RELEVANT DIVIDENDS DECLARED IN
RESPECT OF EARNINGS FOR THE PERIOD ENDED 31 DECEMBER 1998.
3.1 THE DRIEFONTEIN SHARES ACQUISITION
GOLD FIELDS WILL ACQUIRE 43 809 572 SHARES OF 50 CENTS EACH IN THE ISSUED SHARE
CAPITAL OF DRIEFONTEIN ("DRIEFONTEIN SHARES") HELD BY ANGLOGOLD FOR A
CONSIDERATION OF R30 PER DRIEFONTEIN SHARE, TO BE SETTLED BY WAY OF R714 287
160 IN CASH AND A LOAN, ON COMMERCIAL TERMS, AMOUNTING TO R600 000 000 TO BE
EXTENDED BY ANGLOGOLD TO GOLD FIELDS. THIS LOAN WILL BE REPAYABLE IN FULL
WITHIN 9 MONTHS OF THE DATE UPON WHICH THE DRIEFONTEIN SHARES ACQUISITION IS
APPROVED BY GOLD FIELDS SHAREHOLDERS.
UPON IMPLEMENTATION OF THE DRIEFONTEIN SHARES ACQUISITION, THE JOINT VENTURE
AGREEMENT, AS DESCRIBED IN THE CAUTIONARY ANNOUNCEMENT ISSUED BY THE PARTIES
AND GOLD FIELDS OF SOUTH AFRICA LIMITED ON 15 MAY 1998, WILL BE TERMINATED.
3.2 THE GFL/ANGLO SHARE EXCHANGE
GOLD FIELDS WILL CANCEL, BY WAY OF A PARTIAL REDUCTION OF CAPITAL IN TERMS OF
SECTION 84 OF THE COMPANIES ACT, 10 828 230 ORDINARY SHARES OF 1 CENT EACH IN
THE ISSUED SHARE CAPITAL OF GOLD FIELDS ("GOLD FIELDS SHARES") HELD BY ANGLO
AMERICAN AND AMGOLD, IN THE RATIO OF 5 185 123 GOLD FIELDS SHARES HELD BY ANGLO
AMERICAN AND 5 643 107 GOLD FIELDS SHARES HELD BY AMGOLD ("THE CANCELLATION").
IN EXCHANGE, GOLD FIELDS WILL DISPOSE OF 1 968 769 SHARES OF 50 CENTS EACH IN
THE ISSUED SHARE CAPITAL OF ANGLOGOLD ("ANGLOGOLD SHARES") TO ANGLO AMERICAN
AND AMGOLD, IN THE RATIO OF 942 750 ANGLOGOLD SHARES TO ANGLO AMERICAN AND 1
026 019 ANGLOGOLD SHARES TO AMGOLD.
3.3 THE UNBUNDLING
GOLD FIELDS WILL DISTRIBUTE ITS RESULTING ENTIRE 59,3 PER CENT INTEREST IN
DRIEFONTEIN, REPRESENTED BY 120 909 182 DRIEFONTEIN SHARES INCLUDING THE
DRIEFONTEIN SHARES ACQUIRED BY GOLD FIELDS IN TERMS OF THE DRIEFONTEIN SHARES
ACQUISITION, TO ITS SHAREHOLDERS IN THE RATIO OF 51,412127 (ASSUMING THE
CANCELLATION IS IMPLEMENTED) DRIEFONTEIN SHARES PER 100 ORDINARY GOLD FIELDS
SHARES HELD ("THE UNBUNDLING CONSIDERATION"). THE UNBUNDLING CONSIDERATION
REPRESENTS THE RATIO WHICH THE 120 909 182 DRIEFONTEIN SHARES REPRESENTS TO THE
TOTAL NUMBER OF GOLD FIELDS SHARES IN ISSUE FOLLOWING THE IMPLEMENTATION OF THE
CANCELLATION.
3.4 THE REDUCTION OF CAPITAL IN GOLD FIELDS
IN ORDER TO IMPLEMENT THE UNBUNDLING, GOLD FIELDS WILL BE REQUIRED TO REDUCE
ITS SHARE PREMIUM ACCOUNT BY WAY OF A PARTIAL REDUCTION OF CAPITAL IN TERMS OF
SECTION 84 OF THE COMPANIES ACT.
3.5 THE SCHEME
DRIEFONTEIN WILL PROPOSE A SCHEME OF ARRANGEMENT IN TERMS OF SECTION 311 OF THE
COMPANIES ACT BETWEEN GOLD FIELDS AND ITS SHAREHOLDERS ("THE SCHEME"). UPON THE
IMPLEMENTATION OF THE SCHEME, GOLD FIELDS WILL BECOME A WHOLLY OWNED SUBSIDIARY
OF DRIEFONTEIN. IN TERMS OF THE SCHEME, DRIEFONTEIN WILL OFFER TO ACQUIRE ALL
THE GOLD FIELDS SHARES HELD BY GOLD FIELDS SHAREHOLDERS FOR A CONSIDERATION,
ASSUMING THE CANCELLATION IS IMPLEMENTED, OF 103,587873 DRIEFONTEIN SHARES PER
100 GOLD FIELDS SHARES HELD ("THE SCHEME CONSIDERATION").
3.6 AN ALTERNATIVE SCHEME AND THE REDUCTION OF CAPITAL IN DRIEFONTEIN
IF THE UNBUNDLING IS NOT APPROVED, DRIEFONTEIN WILL PROPOSE AN ALTERNATIVE
SCHEME BETWEEN GOLD FIELDS AND ITS SHAREHOLDERS ("AN ALTERNATIVE SCHEME") IN
TERMS OF WHICH DRIEFONTEIN WILL OFFER TO ACQUIRE ALL THE GOLD FIELDS SHARES
HELD BY GOLD FIELDS SHAREHOLDERS FOR A CONSIDERATION OF 155 DRIEFONTEIN SHARES
PER 100 GOLD FIELDS SHARES HELD ("THE ALTERNATIVE SCHEME CONSIDERATION"). IN
THIS EVENT, GOLD FIELDS WILL BECOME A WHOLLY OWNED SUBSIDIARY OF DRIEFONTEIN.
THE ALTERNATIVE SCHEME CONSIDERATION IS IDENTICAL TO THE SUM OF THE UNBUNDLING
CONSIDERATION AND THE SCHEME CONSIDERATION.
UPON THE IMPLEMENTATION OF THE DRIEFONTEIN SHARES ACQUISITION AND IF THE
UNBUNDLING IS NOT APPROVED, GOLD FIELDS WILL OWN 120 909 182 DRIEFONTEIN
SHARES. IN ORDER TO ELIMINATE THE CROSS HOLDING WHICH WILL ARISE UPON THE
IMPLEMENTATION OF AN ALTERNATIVE SCHEME, IT IS PROPOSED TO CANCEL THE 120 909
182 DRIEFONTEIN SHARES OWNED BY GOLD FIELDS ("THE REDUCTION OF CAPITAL IN
DRIEFONTEIN").
IRRESPECTIVE OF WHETHER THE SCHEME OR AN ALTERNATIVE SCHEME IS IMPLEMENTED, THE
NET EFFECT ON SHAREHOLDERS IS THE SAME.
3.7 THE INCREASE IN SHARE CAPITAL
IN ORDER TO IMPLEMENT THE SCHEME OR, IF APPLICABLE, AN ALTERNATIVE SCHEME
DRIEFONTEIN WILL BE REQUIRED TO INCREASE ITS AUTHORISED SHARE CAPITAL. IT IS
PROPOSED TO INCREASE THE AUTHORISED SHARE CAPITAL OF DRIEFONTEIN FROM R110 000
000 DIVIDED INTO 220 000 000 DRIEFONTEIN SHARES TO R500 000 000 DIVIDED INTO 1
000 000 000 DRIEFONTEIN SHARES.
4. THE CHANGE OF NAME
IT IS PROPOSED, SUBJECT TO THE IMPLEMENTATION OF THE SCHEME OR AN ALTERNATIVE
SCHEME, TO CHANGE THE NAME OF DRIEFONTEIN TO GOLD FIELDS LIMITED.
5. RELATED PARTY TRANSACTIONS AND UNDERTAKINGS REGARDING VOTING IN RESPECT
THEREOF
THE DRIEFONTEIN SHARES ACQUISITION AND THE RESOLUTION APPROVING THE DISPOSAL BY
GOLD FIELDS OF THE 1 968 769 ANGLOGOLD SHARES TO ANGLO AMERICAN AND AMGOLD IN
TERMS OF THE GFL/ANGLO SHARE EXCHANGE ARE RELATED PARTY TRANSACTIONS IN GOLD
FIELDS IN TERMS OF THE LISTINGS REQUIREMENTS OF THE JSE. THE PROPOSAL OF THE
SCHEME OR, IF APPLICABLE, AN ALTERNATIVE SCHEME ARE RELATED PARTY TRANSACTIONS
IN DRIEFONTEIN IN TERMS OF THE LISTINGS REQUIREMENTS OF THE JSE.
ANGLO AMERICAN AND AMGOLD HAVE UNDERTAKEN NOT TO VOTE THEIR INTERESTS IN GOLD
FIELDS IN TERMS OF THE RESOLUTIONS, TO BE PROPOSED AT THE MEETING OF GOLD
FIELDS SHAREHOLDERS, TO APPROVE THE DRIEFONTEIN SHARES ACQUISITION AND THE
DISPOSAL BY GOLD FIELDS OF THE 1 968 769 ANGLOGOLD SHARES TO ANGLO AMERICAN AND
AMGOLD IN TERMS OF THE GFL/ANGLO SHARE EXCHANGE.
THE LISTINGS COMMITTEE OF THE JSE HAS NOT PRECLUDED ANGLOGOLD FROM VOTING ITS
INTEREST IN DRIEFONTEIN IN TERMS OF THE RESOLUTIONS, TO BE PROPOSED AT THE
MEETING OF DRIEFONTEIN SHAREHOLDERS, TO APPROVE THE PROPOSAL OF THE SCHEME OR,
IF APPLICABLE, AN ALTERNATIVE SCHEME. ANGLOGOLD, NEVERTHELESS, AND GOLD FIELDS
HAVE ELECTED AND UNDERTAKEN NOT TO VOTE THEIR INTERESTS IN DRIEFONTEIN IN TERMS
OF THESE RESOLUTIONS.
6. IRREVOCABLE UNDERTAKINGS
6.1 DRIEFONTEIN SHARES ACQUISITION, AND GFL/ANGLO SHARE EXCHANGE
GFSA HOLDINGS LIMITED AND GENCOR LIMITED, COLLECTIVELY HOLDING 35,2 PER CENT OF
THE ISSUED SHARE CAPITAL OF GOLD FIELDS (43,5 PER CENT OF THE ELIGIBLE VOTES)
HAVE UNDERTAKEN TO VOTE IN FAVOUR OF THE RESOLUTIONS, TO BE PROPOSED AT THE
GENERAL MEETING OF GOLD FIELDS SHAREHOLDERS, TO APPROVE THE DRIEFONTEIN SHARES
ACQUISITION AND THE GFL/ANGLO SHARE EXCHANGE.
6.2 THE UNBUNDLING AND THE REDUCTION OF CAPITAL IN GOLD FIELDS
GFSA HOLDINGS LIMITED, GENCOR LIMITED, ANGLO AMERICAN, AMGOLD AND DE BEERS
HOLDINGS (PROPRIETARY) LIMITED ("DEBHOLD"), COLLECTIVELY HOLDING 54,3 PER CENT
OF THE ISSUED SHARE CAPITAL OF GOLD FIELDS (54,3 PER CENT OF THE ELIGIBLE
VOTES) HAVE UNDERTAKEN TO VOTE IN FAVOUR OF THE RESOLUTIONS, TO BE PROPOSED AT
THE GENERAL MEETING OF GOLD FIELDS SHAREHOLDERS, TO APPROVE THE UNBUNDLING AND
THE REDUCTION OF CAPITAL IN GOLD FIELDS.
6.3 SCHEME MEETING AND ALTERNATIVE SCHEME MEETING
GFSA HOLDINGS LIMITED, GENCOR LIMITED, ANGLO AMERICAN, AMGOLD AND DEBHOLD
COLLECTIVELY HOLDING 54,3 PER CENT OF THE ISSUED SHARE CAPITAL OF GOLD FIELDS
(54,3 PER CENT OF THE ELIGIBLE VOTES), HAVE UNDERTAKEN TO VOTE IN FAVOUR OF THE
SCHEME AND THE ALTERNATIVE SCHEME AT THE MEETINGS OF GOLD FIELDS SHAREHOLDERS
CONVENED TO CONSIDER SUCH SCHEMES.
6.4 THE INCREASE IN SHARE CAPITAL
ANGLOGOLD AND GOLD FIELDS, COLLECTIVELY HOLDING 59,3 PER CENT OF THE ISSUED
SHARE CAPITAL OF DRIEFONTEIN (59,3 PER CENT OF THE ELIGIBLE VOTES) HAVE
UNDERTAKEN TO VOTE IN FAVOUR OF THE RESOLUTION, TO BE PROPOSED AT THE MEETING
OF DRIEFONTEIN SHAREHOLDERS, TO APPROVE THE INCREASE IN SHARE CAPITAL.
6.5 THE REDUCTION OF CAPITAL IN DRIEFONTEIN
GOLD FIELDS, HOLDING 37,8 PER CENT OF THE ISSUED SHARE CAPITAL OF DRIEFONTEIN
(37,8 PER CENT OF THE ELIGIBLE VOTES) HAS UNDERTAKEN TO VOTE IN FAVOUR OF THE
RESOLUTION TO BE PROPOSED AT THE MEETING OF DRIEFONTEIN SHAREHOLDERS, TO
APPROVE THE REDUCTION OF CAPITAL IN DRIEFONTEIN.
7. CONDITIONS PRECEDENT
7.1 THE DRIEFONTEIN SHARES ACQUISITION IS SUBJECT TO THE PASSING BY GOLD FIELDS
SHAREHOLDERS, OTHER THAN ANGLO AMERICAN AND AMGOLD, IN ACCORDANCE WITH THE
REQUIREMENTS OF THE COMPANIES ACT AND THE LISTINGS REQUIREMENTS OF THE JSE, AT
A GENERAL MEETING OF GOLD FIELDS SHAREHOLDERS, OF THE RESOLUTION NECESSARY TO
IMPLEMENT THE DRIEFONTEIN SHARES ACQUISITION. IF THE DRIEFONTEIN SHARES
ACQUISITION IS NOT IMPLEMENTED, THE COMPOSITE TRANSACTION IN ITS ENTIRETY WILL
FAIL.
7.2 THE GFL/ANGLO SHARE EXCHANGE IS SUBJECT TO THE IMPLEMENTATION OF THE
DRIEFONTEIN SHARES ACQUISITION AND THE PASSING BY GOLD FIELDS SHAREHOLDERS IN
ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT AND THE LISTINGS
REQUIREMENTS OF THE JSE, AT A GENERAL MEETING OF GOLD FIELDS SHAREHOLDERS, OF
THE RESOLUTIONS NECESSARY TO IMPLEMENT THE GFL/ANGLO SHARE EXCHANGE. ANGLO
AMERICAN AND AMGOLD, AS OUTLINED IN 6.1 ABOVE, HAVE UNDERTAKEN NOT TO VOTE IN
FAVOUR OF THE RESOLUTION APPROVING THE DISPOSAL BY GOLD FIELDS OF THE 1 968 769
ANGLOGOLD SHARES TO ANGLO AMERICAN AND AMGOLD IN TERMS OF THE GFL/ANGLO SHARES
EXCHANGE.
7.3 THE UNBUNDLING AND THE REDUCTION OF CAPITAL IN GOLD FIELDS ARE SUBJECT TO
THE IMPLEMENTATION OF THE DRIEFONTEIN SHARES ACQUISITION AND THE PASSING BY
GOLD FIELDS SHAREHOLDERS, IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES
ACT AND THE LISTINGS REQUIREMENTS OF THE JSE, AT A GENERAL MEETING OF GOLD
FIELDS SHAREHOLDERS, OF THE RESOLUTIONS NECESSARY TO IMPLEMENT THE UNBUNDLING
AND THE REDUCTION OF CAPITAL IN GOLD FIELDS. IN ADDITION, THE UNBUNDLING IS
SUBJECT TO THE IMPLEMENTATION OF THE SCHEME. THE REDUCTION OF CAPITAL IN GOLD
FIELDS IS FURTHER SUBJECT TO THE HIGH COURT OF SOUTH AFRICA (WITWATERSRAND
LOCAL DIVISION) ("THE COURT") SANCTIONING THE REDUCTION OF CAPITAL IN GOLD
FIELDS AND THE REGISTRAR OF COMPANIES IN SOUTH AFRICA ("THE REGISTRAR")
REGISTERING THE RESOLUTION AND COURT ORDER NECESSARY TO IMPLEMENT THE REDUCTION
OF CAPITAL IN GOLD FIELDS.
7.4 THE IMPLEMENTATION OF THE SCHEME IS SUBJECT TO:
* THE IMPLEMENTATION OF THE DRIEFONTEIN SHARES ACQUISITION;
* THE IMPLEMENTATION OF THE UNBUNDLING;
* THE IMPLEMENTATION OF THE INCREASE IN SHARE CAPITAL;
* THE PASSING BY DRIEFONTEIN SHAREHOLDERS, OTHER THAN ANGLOGOLD AND GOLD
FIELDS, IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT AND THE
LISTINGS REQUIREMENTS OF THE JSE, AT A GENERAL MEETING OF DRIEFONTEIN
SHAREHOLDERS, OF THE RESOLUTION NECESSARY TO PROPOSE THE SCHEME;
* THE SCHEME BEING AGREED TO BY A MAJORITY OF NOT LESS THAN THREE QUARTERS (75
PER CENT) OF THE VOTES EXERCISABLE BY THE GOLD FIELDS SHAREHOLDERS PRESENT AND
VOTING IN PERSON OR BY PROXY AT THE MEETING OF GOLD FIELDS SHAREHOLDERS
CONVENED TO CONSIDER THE SCHEME; AND
* THE COURT SANCTIONING THE SCHEME AND THE RELEVANT COURT ORDER BEING
REGISTERED BY THE REGISTRAR.
7.5 THE IMPLEMENTATION OF AN ALTERNATIVE SCHEME, IF APPLICABLE, IS SUBJECT TO:
* THE IMPLEMENTATION OF THE DRIEFONTEIN SHARES ACQUISITION;
* THE FAILURE TO IMPLEMENT THE UNBUNDLING;
* THE IMPLEMENTATION OF THE INCREASE IN SHARE CAPITAL;
* THE PASSING BY DRIEFONTEIN SHAREHOLDERS, OTHER THAN ANGLOGOLD AND GOLD
FIELDS, IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT AND THE
LISTINGS REQUIREMENTS OF THE JSE, AT A GENERAL MEETING OF DRIEFONTEIN
SHAREHOLDERS, OF THE RESOLUTION NECESSARY TO PROPOSE AN ALTERNATIVE SCHEME;
* AN ALTERNATIVE SCHEME BEING AGREED TO BY A MAJORITY OF NOT LESS THAN THREE
QUARTERS (75 PER CENT) OF THE VOTES EXERCISABLE BY THE GOLD FIELDS SHAREHOLDERS
PRESENT AND VOTING IN PERSON OR BY PROXY AT THE MEETING OF GOLD FIELDS
SHAREHOLDERS CONVENED TO CONSIDER AN ALTERNATIVE SCHEME; AND
* THE COURT SANCTIONING AN ALTERNATIVE SCHEME AND THE RELEVANT COURT ORDER
BEING REGISTERED BY THE REGISTRAR.
7.6 THE INCREASE IN SHARE CAPITAL IS SUBJECT TO THE IMPLEMENTATION OF THE
DRIEFONTEIN SHARES ACQUISITION AND THE PASSING BY DRIEFONTEIN SHAREHOLDERS, IN
ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT AND THE LISTINGS
REQUIREMENTS OF THE JSE, AT A GENERAL MEETING OF DRIEFONTEIN SHAREHOLDERS, OF
THE RESOLUTION NECESSARY TO IMPLEMENT THE INCREASE IN SHARE CAPITAL.
7.7 THE REDUCTION OF CAPITAL IN DRIEFONTEIN IS SUBJECT TO THE IMPLEMENTATION OF
AN ALTERNATIVE SCHEME, THE PASSING BY DRIEFONTEIN SHAREHOLDERS, IN ACCORDANCE
WITH THE REQUIREMENT OF THE COMPANIES ACT AND THE LISTINGS REQUIREMENTS OF THE
JSE, AT A GENERAL MEETING OF DRIEFONTEIN SHAREHOLDERS, OF THE RESOLUTION
NECESSARY TO IMPLEMENT THE REDUCTION OF CAPITAL IN DRIEFONTEIN, THE COURT
SANCTIONING SUCH REDUCTION OF CAPITAL AND THE REGISTRAR REGISTERING THE
RESOLUTION AND THE COURT ORDER NECESSARY TO IMPLEMENT THE REDUCTION OF CAPITAL
IN DRIEFONTEIN.
8. FINANCIAL EFFECTS
THE FINANCIAL CALCULATIONS ARE BASED UPON THE UNAUDITED RESULTS FOR DRIEFONTEIN
AND GOLD FIELDS FOR THE SIX MONTHS ENDED 31 DECEMBER 1998, FOR ANGLOGOLD THE
AUDITED RESULTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 1998 AND FOR AMGOLD
THE UNAUDITED RESULTS FOR THE 6 MONTHS ENDED 30 SEPTEMBER 1998.
IN THE CASE OF DRIEFONTEIN AND GOLD FIELDS FOR THE PURPOSE OF EARNINGS PER
SHARE ("EPS") CALCULATIONS IT IS ASSUMED THAT THE COMPOSITE TRANSACTION HAD
BEEN EFFECTED ON 1 JULY 1998. SUCH CALCULATIONS, IN THE CASE OF DRIEFONTEIN,
GOLD FIELDS AND ANGLOGOLD, ARE BASED UPON EARNINGS DETERMINED ASSUMING AN
APPROPRIATION BASIS OF ACCOUNTING. FOR ANGLOGOLD ALL RELEVANT ASSUMPTIONS ARE
BASED UPON THE COMPOSITE TRANSACTION BEING EFFECTIVE FROM 1 JANUARY 1998. FOR
AMGOLD, ALL RELEVANT ASSUMPTIONS ARE BASED UPON THE COMPOSITE TRANSACTION BEING
EFFECTIVE FROM 1 APRIL 1998.
FOR THE PURPOSE OF NET ASSET VALUE PER SHARE ("NAV") CALCULATIONS, FOR ALL
COMPANIES OTHER THAN AMGOLD, IT IS ASSUMED THAT THE COMPOSITE TRANSACTION WAS
IMPLEMENTED ON 31 DECEMBER 1998 AND SUCH CALCULATIONS ARE BASED UPON UNAUDITED
BALANCE SHEETS AND, IN THE CASE OF DRIEFONTEIN, GOLD FIELDS AND ANGLOGOLD,
PREPARED ON AN APPROPRIATION BASIS. IN THE CASE OF AMGOLD, FOR THE PURPOSE OF
NAV CALCULATIONS, IT IS ASSUMED THAT THE COMPOSITE TRANSACTION WAS IMPLEMENTED
ON 30 SEPTEMBER 1998.
THE FINANCIAL EFFECTS OF THE COMPOSITE TRANSACTION INCLUDING THE SCHEME AND THE
UNBUNDLING OR, IF APPLICABLE, AN ALTERNATIVE SCHEME AND THE REDUCTION OF
CAPITAL IN DRIEFONTEIN, ARE IDENTICAL.
FINANCIAL EFFECTS ON A DRIEFONTEIN SHAREHOLDER
UNAUDITED POST IMPLEMENTATION
OF THE COMPOSITE TRANSACTION
6 MONTHS PRO FORMA CHANGE
(31/12/98) 6 MONTHS
(31/12/98) (%)
HEADLINE EPS (CENTS) 131,0 125,5 (4,2)
NAV (RANDS) 28,35 35,20 24,2
FINANCIAL EFFECTS ON A GOLD FIELDS SHAREHOLDER
UNAUDITED POST IMPLEMENTATION POST IMPLEMENTATION
6 MONTHS OF THE DRIEFONTEIN OF THE COMPOSITE
SHARES ACQUISITION TRANSACTION
(31/12/98) AND THE GFL/ANGLO
SHARE
PRO FORMA CHANGE PRO FORMA CHANGE
6 MONTHS 6 MONTHS
(31/12/98) (%) (31/12/98) (%)
HEADLINE EPS (CENTS) 179,0 192,4 7,5 194,5 8,7
NAV (RANDS) 56,16 56,97 1,4 54,55 (2,9)
MARKET VALUE EFFECTS ON A GOLD FIELDS SHAREHOLDER
PRIOR TO THE POST
COMPOSITE TRANSACTION IMPLEMENTATION CHANGE
OF THE COMPOSITE (%)
TRANSACTION
MARKET VALUE (RANDS)(1)35,58 41,94 17,9
NOTE (1): BASED UPON A WEIGHTED AVERAGE OF THE CLOSING PRICES FOR DRIEFONTEIN
SHARES AND GOLD FIELDS SHARES ON THE JSE FOR 30 TRADING DAYS UP TO AND
INCLUDING 16 FEBRUARY 1999.
FINANCIAL EFFECTS ON AN ANGLOGOLD SHAREHOLDER
AUDITED POST IMPLEMENTATION OF THE
12 MONTHS DRIEFONTEIN SHARES ACQUISITION
(31/12/98)
PRO FORMA CHANGE
12 MONTHS
(31/12/98) (%)
HEADLINE EPS (CENTS) 1 697 1 769 4,2
NAV (RANDS) 221,64 228,30 3,0
FINANCIAL EFFECTS ON AN AMGOLD SHAREHOLDER
UNAUDITED POST IMPLEMENTATION OF THE
6 MONTHS COMPOSITE TRANSACTION
(30/9/98)
PRO FORMA CHANGE
6 MONTHS
(30/9/98) (%)
HEADLINE EPS (CENTS) 723 813 12,5
NAV (RANDS) 321,41 328,39 2,2
THE COMPOSITE TRANSACTION HAS NO MATERIAL FINANCIAL EFFECT UPON ANGLO AMERICAN.
9. OPINIONS AND RECOMMENDATIONS
STEFFEN, ROBERTSON AND KIRSTEN (SOUTH AFRICA) (PTY) LIMITED ("SRK") IS OF THE
OPINION THAT THE TECHNICAL DATA AS INCLUDED IN THE COMPETENT PERSONS' REPORT
WHICH IT HAS PREPARED REGARDING BOTH GOLD FIELDS AND DRIEFONTEIN AND WHICH WILL
BE INCLUDED IN THE DOCUMENTATION REFERRED TO IN 12 BELOW, IS VALID AND ACCURATE
AND HAS ADVISED THE BOARDS OF DIRECTORS OF GOLD FIELDS, DRIEFONTEIN, ANGLOGOLD,
DEUTSCHE MORGAN GRENFELL (SA) (PROPRIETARY) LIMITED ("DEUTSCHE MORGAN
GRENFELL") AND STANDARD CORPORATE AND MERCHANT BANK ("SCMB") ACCORDINGLY. THIS
COMPETENT PERSONS' REPORT AND THE LIFE OF MINE PLANS FOR DRIEFONTEIN AND THE
OTHER OPERATIONS OF GOLD FIELDS HAVE BEEN USED AS THE BASIS FOR THE VALUATIONS
AND ANALYSES PERFORMED BY DEUTSCHE MORGAN GRENFELL AND SCMB.
DEUTSCHE MORGAN GRENFELL, THE FINANCIAL ADVISER TO GOLD FIELDS, IS OF THE
OPINION THAT THE GFL/ANGLO SHARE EXCHANGE AND THE DRIEFONTEIN SHARES
ACQUISITION ARE FAIR AND REASONABLE TO GOLD FIELDS SHAREHOLDERS.
DEUTSCHE MORGAN GRENFELL HAS CONSIDERED THE TERMS AND CONDITIONS OF THE SCHEME
AND AN ALTERNATIVE SCHEME IN SO FAR AS SUCH TRANSACTIONS PERTAIN TO GOLD FIELDS
SHAREHOLDERS. DEUTSCHE MORGAN GRENFELL IS OF THE OPINION THAT THE TERMS AND
CONDITIONS OF THE SCHEME AND AN ALTERNATIVE SCHEME, INCLUDING THE SCHEME
CONSIDERATION AND THE ALTERNATIVE SCHEME CONSIDERATION, ARE FAIR AND REASONABLE
TO GOLD FIELDS SHAREHOLDERS.
SCMB, THE MERCHANT BANK AND CORPORATE ADVISER TO DRIEFONTEIN, HAS CONSIDERED
THE TERMS AND CONDITIONS OF THE COMPOSITE TRANSACTION INCLUDING THE SCHEME OR,
IF APPLICABLE, AN ALTERNATIVE SCHEME AND THE REDUCTION OF CAPITAL IN
DRIEFONTEIN, IN SO FAR AS SUCH TRANSACTION PERTAINS TO DRIEFONTEIN
SHAREHOLDERS. SCMB IS OF THE OPINION THAT THE TERMS AND CONDITIONS OF THE
COMPOSITE TRANSACTION, THE SCHEME INCLUDING THE SCHEME CONSIDERATION AND, IF
APPLICABLE, AN ALTERNATIVE SCHEME INCLUDING THE ALTERNATIVE SCHEME
CONSIDERATION, ARE FAIR AND REASONABLE TO DRIEFONTEIN SHAREHOLDERS.
THE BOARD OF DRIEFONTEIN WHICH WAS APPROACHED BY GOLD FIELDS TO PROPOSE THE
SCHEME OR, IF APPLICABLE, AN ALTERNATIVE SCHEME, CONSIDERS THAT THE COMPOSITE
TRANSACTION INCLUDING THE SCHEME OR, IF APPLICABLE, AN ALTERNATIVE SCHEME AND
THE REDUCTION OF CAPITAL IN DRIEFONTEIN, PRESENT AN OPPORTUNITY WHICH IS WORTHY
OF CONSIDERATION BY SHAREHOLDERS AND THEREFORE WISH TO AFFORD THIS OPPORTUNITY
TO SHAREHOLDERS. HOWEVER, DUE TO THEIR VARIOUS POTENTIAL CONFLICTS OF INTEREST,
THE BOARD OF DRIEFONTEIN DO NOT CONSIDER IT APPROPRIATE TO MAKE A
RECOMMENDATION AS TO HOW SHAREHOLDERS SHOULD VOTE.
ACCORDINGLY A PANEL OF INDEPENDENT PERSONS ("THE INDEPENDENT PANEL") HAS BEEN
APPOINTED BY THE BOARD OF DRIEFONTEIN TO PROVIDE AN INDEPENDENT OPINION AND
RECOMMENDATION TO THE SHAREHOLDERS OF DRIEFONTEIN. THE INDEPENDENT PANEL,
COMPRISING MESSRS D BRINK, R F KNIGHT AND R P MENELL, HAVING BEEN ADVISED BY
SCMB AND SRK, HAS CONSIDERED THE TERMS AND CONDITIONS OF THE COMPOSITE
TRANSACTION INCLUDING THE SCHEME OR, IF APPLICABLE, AN ALTERNATIVE SCHEME AND
THE REDUCTION OF CAPITAL IN DRIEFONTEIN, IN SO FAR AS SUCH TRANSACTION PERTAINS
TO DRIEFONTEIN SHAREHOLDERS. THE INDEPENDENT PANEL IS OF THE OPINION THAT THE
TERMS AND CONDITIONS OF THE COMPOSITE TRANSACTION, THE SCHEME INCLUDING THE
SCHEME CONSIDERATION, AND, IF APPLICABLE, AN ALTERNATIVE SCHEME INCLUDING THE
ALTERNATIVE SCHEME CONSIDERATION, ARE FAIR AND REASONABLE TO DRIEFONTEIN
SHAREHOLDERS.
THE BOARD OF GOLD FIELDS IS OF THE OPINION THAT THE COMPOSITE TRANSACTION
INCLUDING THE SCHEME, OR IF APPLICABLE, AN ALTERNATIVE SCHEME AND THE REDUCTION
OF CAPITAL IN DRIEFONTEIN ARE IN THE BEST INTERESTS OF GOLD FIELDS AND
ACCORDINGLY RECOMMENDS THAT GOLD FIELDS SHAREHOLDERS VOTE IN FAVOUR OF THE
RESOLUTIONS NECESSARY TO IMPLEMENT THE COMPOSITE TRANSACTION.
THE BOARD OF ANGLOGOLD IS OF THE OPINION THAT THE DRIEFONTEIN SHARES
ACQUISITION AND THE TERMINATION OF THE JOINT VENTURE AGREEMENT IS IN THE BEST
INTERESTS OF ANGLOGOLD.
10. STOCK EXCHANGE LISTINGS
PURSUANT TO THE IMPLEMENTATION OF THE SCHEME OR AN ALTERNATIVE SCHEME, GOLD
FIELDS WILL BECOME A WHOLLY OWNED SUBSIDIARY OF DRIEFONTEIN WHICH IS TO BE
RENAMED GOLD FIELDS LIMITED. ACCORDINGLY, APPLICATIONS WILL BE MADE TO THE JSE
AND THE LONDON STOCK EXCHANGE ("THE LSE") FOR THE TERMINATION OF THE LISTINGS
OF EXISTING GOLD FIELDS SHARES. APPLICATIONS WILL BE MADE TO THE JSE, THE LSE
AND OTHER RELEVANT STOCK EXCHANGES AND BOURSES FOR THE LISTING OF NEW
DRIEFONTEIN SHARES ISSUED PURSUANT TO THE SCHEME OR, IF APPLICABLE, AN
ALTERNATIVE SCHEME.
11. ALTERNATIVE TRANSACTIONS IN THE EVENT OF THE FAILURE TO IMPLEMENT THE
COMPOSITE TRANSACTION
IN THE EVENT OF THE FAILURE TO IMPLEMENT THE COMPOSITE TRANSACTION, OR SOME
OTHER TRANSACTION TO ACHIEVE THE SAME OBJECTIVES, WITHIN A PERIOD OF THREE
MONTHS FROM THE DATE OF SIGNATURE OF THE AGREEMENT, THEN, SUBJECT TO THE
APPROVAL OF GOLD FIELDS SHAREHOLDERS AND, WHERE REQUIRED, COURT SANCTION, THE
DRIEFONTEIN SHARES ACQUISITION AND THE GFL/ANGLO SHARE EXCHANGE WILL,
NEVERTHELESS, PROCEED.
IN THIS EVENT THE PARTIES HAVE AGREED THAT THE CONSIDERATION PAYABLE IN TERMS
OF THE DRIEFONTEIN SHARES ACQUISITION AND THE COMPOSITION THEREOF WILL REMAIN
UNCHANGED, EXCEPT THAT THE LOAN EXTENDED BY ANGLOGOLD TO GOLD FIELDS WILL
BECOME PAYABLE IN THREE EQUAL INSTALLMENTS AT PERIODS OF 6, 12 AND 18 MONTHS
AFTER THE DATE UPON WHICH THE DRIEFONTEIN SHARES ACQUISITION IS APPROVED BY
GOLD FIELDS SHAREHOLDERS OR EARLIER AT THE ELECTION OF GOLD FIELDS. THE TERMS
AND CONDITIONS OF THE GFL/ANGLO SHARE EXCHANGE WILL REMAIN IDENTICAL TO THOSE
OUTLINED IN 3.2 ABOVE.
12. DOCUMENTATION
SUBJECT TO THE APPROVAL OF THE JSE AND THE SRP, CIRCULARS CONTAINING FULL
DETAILS OF THE COMPOSITE TRANSACTION, INCORPORATING THE FINANCIAL EFFECTS
THEREOF, NOTICES CONVENING GENERAL MEETINGS OF SHAREHOLDERS IN GOLD FIELDS AND
DRIEFONTEIN, AS WELL AS THE MEETING OF GOLD FIELDS SHAREHOLDERS TO CONSIDER THE
SCHEME AND, IF APPLICABLE, AN ALTERNATIVE SCHEME, AS WELL AS LISTING
PARTICULARS PREPARED IN ACCORDANCE WITH THE LISTINGS REQUIREMENTS OF THE JSE TO
BE INCLUDED IN THE CIRCULAR TO DRIEFONTEIN SHAREHOLDERS, WILL BE POSTED TO
DRIEFONTEIN SHAREHOLDERS AND GOLD FIELDS SHAREHOLDERS AS SOON AS PRACTICABLE.
JOHANNESBURG
18 FEBRUARY 1999
FINANCIAL ADVISER TO GOLD FIELDS
DEUTSCHE MORGAN GRENFELL (SA) (PROPRIETARY) LIMITED
(REGISTRATION NUMBER 95/11798/07)
MERCHANT BANK AND CORPORATE ADVISER
SCMB
STANDARD CORPORATE AND MERCHANT BANK
(A DIVISION OF THE STANDARD BANK OF SOUTH AFRICA LIMITED)
(REGISTRATION NUMBER 62/00738/06)
CORPORATE ADVISER TO ANGLOGOLD
WARBURG DILLON READ
(INVESTMENT BANKING DIVISION OF UBS AG)
REGULATED BY THE SECURITIES AND FUTURES AUTHORITY LIMITED
INDEPENDENT TECHNICAL ADVISER
STEFFEN, ROBERTSON & KIRSTEN CONSULTING (SOUTH AFRICA) (PTY) LIMITED
LEGAL ADVISER TO GOLD FIELDS
EDWARD NATHAN & FRIEDLAND INC.
(REGISTRATION NUMBER 77/00525/21)
LEGAL ADVISER TO DRIEFONTEIN
BOWMAN GILFILLAN INC.
REGISTRATION NUMBER 98/21409/21
LEGAL ADVISER TO ANGLOGOLD
WEBBER WENTZEL BOWENS
REPORTING ACCOUNTANTS
ERNST & YOUNG
CHARTERED ACCOUNTANTS (SA)
(REGISTERED ACCOUNTANTS AND AUDITORS)
REGISTERED CHARTERED ACCOUNTANTS (SA)
JOINT SPONSORING BROKERS TO GOLD FIELDS
DEUTSCHE MORGAN GRENFELL (PROPRIETARY) LIMITED
REGISTRATION NUMBER 73/06709/07)
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
BOE SECURITIES (PTY) LIMITED
REGISTRATION NUMBER 96/15589/07
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
SPONSORING BROKER TO DRIEFONTEIN
STANDARD EQUITIES
(REGISTRATION NUMBER 72/08305/07)
(MEMBER OF THE JOHANNESBURG STOCK EXCHANGE)
JOINT SPONSORING BROKERS TO ANGLOGOLD
WARBURG DILLON READ SECURITIES (SOUTH AFRICA) (PTY) LTD
(REGISTRATION NUMBER 95/11140/07)
SUBSIDIARY OF UBS AG
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
MERRILL LYNCH SOUTH AFRICA (PTY) LTD.
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
REGISTRATION NUMBER 95/01805/07
JOINT PRESS RELEASE - GOLDFIELDS, ANGLOGOLD, AAC, DRIEFONTEIN, AMGOLD
JOHANNESBURG, 18 FEBRUARY 1999: DRIEFONTEIN CONSOLIDATED LIMITED (DRIEFONTEIN),
GOLD FIELDS LIMITED (GOLD FIELDS), ANGLOGOLD LIMITED (ANGLOGOLD), ANGLO
AMERICAN CORPORATION OF SOUTH AFRICA LIMITED (ANGLO AMERICAN) AND ANGLO
AMERICAN GOLD INVESTMENT COMPANY LIMITED (AMGOLD), TODAY ANNOUNCED FAR-REACHING
TRANSACTIONS WHICH WILL FURTHER IMPROVE THE COMPETITIVE POSITION OF THE SOUTH
AFRICAN GOLD MINING INDUSTRY AND COMPLETE THE RESTRUCTURING OF ONE OF THE
INDUSTRY'S MOST IMPORTANT GOLD ASSETS.
EFFECTIVELY THREE TRANSACTIONS HAVE BEEN ANNOUNCED.
THE FIRST IS THE ACQUISITION BY GOLD FIELDS OF ANGLOGOLD'S ENTIRE INTEREST OF
21.5 PER CENT (ALMOST 44 MILLION SHARES) IN DRIEFONTEIN, AT A PRICE OF R30 PER
SHARE. THIS WILL BE FUNDED BY R714 MILLION CASH FROM GOLD FIELDS' INTERNAL
RESOURCES AND A R600 MILLION LOAN FROM ANGLOGOLD. THE LOAN WILL BE REPAYABLE
WITHIN NINE MONTHS AND WILL BE ADVANCED ON COMMERCIAL TERMS.
BOBBY GODSELL, CHIEF EXECUTIVE OFFICER OF ANGLOGOLD, SAID THE AGREEMENT LAST
YEAR WITH GOLD FIELDS TO JOINTLY MANAGE DRIEFONTEIN HAD LED TO A "PATTERN OF
CO-OPERATION". "THIS HAS CONVINCED US THAT WE DO NOT NEED TO BE SHAREHOLDERS IN
DRIEFONTEIN TO SECURE THE PROSPECT OF CO-OPERATION AROUND THE WESTERN ULTRA
DEEP LEVELS ORE BODY, A PRIMARY REASON FOR OUR ENTERING INTO THE AGREEMENT."
ANGLOGOLD WOULD USE THE PROCEEDS FROM THE SALE OF ITS STAKE IN DRIEFONTEIN TO
BUILD ITS OWN GOLD INTERESTS "IN A WAY THAT SHOULD CREATE WEALTH FOR ANGLOGOLD
SHAREHOLDERS," GODSELL SAID.
CHRIS THOMPSON, CHAIRMAN OF GOLD FIELDS, WAS ENTHUSIASTIC ABOUT THE FINAL
RESOLUTION OF THE ISSUE OF CONTROL OF DRIEFONTEIN. "THIS TRANSACTION IS FURTHER
EVIDENCE OF THE MATURE BUSINESS DECISIONS BEING MADE TO SECURE THE FUTURE OF
THIS INDUSTRY," HE SAID.
ACCOMPANYING THIS ACQUISITION, BUT AS A SEPARATE AND INDEPENDENT PROCESS, WILL
BE THE CANCELLATION BY GOLD FIELDS OF ALMOST 11 MILLION OF ITS OWN SHARES OWNED
BY ANGLO AMERICAN AND AMGOLD, WHO, IN EXCHANGE, WILL RECEIVE ALMOST TWO MILLION
ANGLOGOLD SHARES OWNED BY GOLD FIELDS.
MIKE KING, DEPUTY CHAIRMAN OF ANGLO AMERICAN SAID, "ANGLO AMERICAN AND AMGOLD
SUPPORT ANGLOGOLD'S DECISION TO SELL ITS INTEREST IN DRIEFONTEIN. ANGLO
AMERICAN AND AMGOLD ALSO WELCOME THE OPPORTUNITY TO EXCHANGE SHARES IN GOLD
FIELDS FOR SHARES IN ANGLOGOLD, THE EFFECT OF WHICH IS TO INCREASE THOSE
COMPANIES' AGGREGATE HOLDING IN ANGLOGOLD TO 53,7 PER CENT."
THE THIRD TRANSACTION INVOLVES THE PROPOSED ACQUISITION OF GOLD FIELDS BY
DRIEFONTEIN, WHICH WILL EFFECTIVELY CREATE AN ENLARGED, FINANCIALLY ROBUST NEW
GOLD FIELDS WITH SIGNIFICANTLY INCREASED MARKET LIQUIDITY, WHICH SHOULD
FACILITATE A RE-RATING. THE NEW GOLD FIELDS WILL WHOLLY-OWN, AS ITS CORE
ASSETS, THREE OF THE HIGHEST QUALITY GOLD MINES IN SOUTH AFRICA, I.E. BEATRIX,
DRIEFONTEIN AND KLOOF, AS WELL AS 100 PER CENT OF LEEUDOORN, ORYX AND LIBANON,
70 PER CENT OF THE TARKWA GOLD MINE IN GHANA AND 54 PER CENT OF ST HELENA.
PRIOR TO THE DRIEFONTEIN OFFER FOR GOLD FIELDS, GOLD FIELDS' EXISTING
DRIEFONTEIN SHARES, INCLUDING THOSE PURCHASED FROM ANGLOGOLD, WILL BE UNBUNDLED
TO SHAREHOLDERS IN THE RATIO OF 51.41 DRIEFONTEIN SHARES PER 100 GOLD FIELDS
SHARES. AFTER THE UNBUNDLING OF THE DRIEFONTEIN SHARES, THE EXCHANGE RATIO IS
103.59 DRIEFONTEIN SHARES FOR 100 GOLD FIELDS SHARES. THE NET EFFECT, AFTER THE
UNBUNDLING AND THE OFFER, IS THAT GOLD FIELDS' SHAREHOLDERS WILL RECEIVE 155
DRIEFONTEIN SHARES FOR EVERY 100 GOLD FIELDS SHARES. THIS RATIO REFLECTS THE
INHERENT VALUES OF BOTH COMPANIES CALCULATED BY INDEPENDENT ADVISORS ACTING FOR
THE DRIEFONTEIN MINORITY SHAREHOLDERS AND THE GOLD FIELDS SHAREHOLDERS.
IN PURSUIT OF THE HIGHEST STANDARDS OF CORPORATE GOVERNANCE, A PANEL OF
INDEPENDENT EXPERTS WAS ASKED TO ADVISE SPECIFICALLY THE DRIEFONTEIN MINORITIES
AS TO THE FAIRNESS OF THE PROPOSED RATIO AND THEY HAVE RECOMMENDED THAT THE
DRIEFONTEIN MINORITIES SUPPORT THE TRANSACTION.
THE PANEL OF INDEPENDENT EXPERTS COMPRISED MR. DAVE BRINK, EXECUTIVE CHAIRMAN
OF MURRAY AND ROBERTS, DR. RORY KNIGHT, DEAN OF THE BUSINESS SCHOOL OF
TEMPLETON COLLEGE, OXFORD UNIVERSITY, AND MR. RICK MENELL, EXECUTIVE DIRECTOR
OF AVMIN AND EXECUTIVE CHAIRMAN OF AVGOLD.
THE NEW GOLD FIELDS WILL BE THE THIRD LARGEST GOLD PRODUCER IN THE WORLD WITH
ANNUAL PRODUCTION OF ABOUT 4 MILLION OUNCES AND TOTAL RESERVES OF 96 MILLION
OUNCES OF GOLD. TOTAL OPERATING COSTS ARE EXPECTED TO BE AROUND US$190 PER
OUNCE.
THE NEW GOLD FIELDS SHOULD HAVE A MARKET VALUE IN EXCESS OF R12 BILLION AND A
SIGNIFICANTLY IMPROVED TRADABLE FREE FLOAT. IT IS CURRENTLY LISTED ON THE
JOHANNESBURG, LONDON, PARIS, BRUSSELS AND NASDAQ STOCK EXCHANGES AND WILL BE
SEEKING APPROVAL TO LIST ON SOME OR ALL OF THESE EXCHANGES.
TOM DALE, CHAIRMAN OF DRIEFONTEIN, ENCOURAGED SHAREHOLDERS TO EVALUATE
OBJECTIVELY THE STANDARDS OF CORPORATE GOVERNANCE AND THE COMMERCIAL TERMS
OFFERED IN THIS TRANSACTION. "THIS DEAL WOULD ENABLE THE NEW GOLD FIELDS TO
"LEAPFROG" ITS COMPETITORS AND WILL UNLOCK SUBSTANTIAL VALUE FROM THE
COMPLEMENTARY FEATURES BROUGHT TO THE TABLE BY EACH COMPANY," HE SAID.
DALE EMPHASISED THAT THE BOARD OF DRIEFONTEIN HAD CAREFULLY CONSIDERED
POTENTIAL CONFLICTS OF INTEREST AND GIVEN THE PROPOSAL CONCEPTUAL SUPPORT BY
PROVIDING INFORMATION AND A RECOMMENDATION BY A PANEL OF INDEPENDENT EXPERTS TO
THE DRIEFONTEIN MINORITY SHAREHOLDERS. "SINCE THESE MINORITY SHAREHOLDERS ARE
THE ONLY SHAREHOLDERS WHO WILL VOTE ON THE DEAL, THEY WILL DECIDE WHETHER OR
NOT THE TERMS ARE ACCEPTABLE," SAID DALE.
CHRIS THOMPSON STATED THAT THERE WERE MANY COMPELLING REASONS WHY THE
TRANSACTION SHOULD GO AHEAD. "THE NEW COMPANY THAT RESULTS FROM THE MERGER
SHOULD ADD VALUE FOR BOTH GROUPS OF SHAREHOLDERS AND WOULD HAVE THE POTENTIAL
TO BECOME ONE OF THE MOST SUCCESSFUL GOLD MINING COMPANIES IN THE WORLD," HE
SAID.
ENDS
QUERIES
GOLD FIELDS / DRIEFONTEIN
WWW.GOLDFIELDS.CO.ZA
WILLIE JACOBSZ
PHONE: +27 11 644 2460
FAX: +27 11 782-5935
MOBILE: +27 82 655-6109
E-MAIL: INVESTORS@GOLDFIELDS.CO.ZA
GOLD FIELDS / DRIEFONTEIN: NORTH AMERICA
CHERYL MARTIN
PHONE: 303 298-0762
FAX: 303 298-7073
E-MAIL: GOLDFIELDS@GTE.NET
GOLD FIELDS / DRIEFONTEIN: UK & EUROPE
KEITH IRONS
PHONE: 171 220-7477
FAX: 171 220-7211
ANGLOGOLD, SOUTH AFRICA
WWW.ANGLOGOLD.COM
JAMES DUNCAN
(011) 637 6147 (B)
(011) 849 4161 (H)
082 892 8052 (MOBILE)
ANGLOGOLD, NORTH AMERICA
CHARLES CARTER
1 303 834 9255 (B)
1 303 888 7412 (MOBILE)
ANGLO AMERICAN CORPORATION
WWW.ANGLO.CO.ZA
JO BEESON
(011) 638 2920 (B)
082 896 0306 (MOBILE)
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