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GFI - Gold Fields Limited - Acquisition of IAMGOLD`S minority interests in

Release Date: 15/04/2011 13:00
Code(s): GFI
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GFI - Gold Fields Limited - Acquisition of IAMGOLD`S minority interests in Tarkwa and Damang Gold Fields Limited (Reg. No. 1968/004880/06) (Incorporated in the Republic of South Africa) ("Gold Fields" or "the Company") JSE, NYSE, DIFX Share Code: GFI ISIN Code: ZAE000018123 ANNOUNCEMENT REGARDING THE PROPOSED INDIRECT ACQUISITION BY GOLD FIELDS THROUGH GOLD FIELDS GHANA HOLDINGS (BVI) LIMITED ("GFGH") ITS WHOLLY OWNED SUBSIDIARY OF 18.9% OF THE ORDINARY SHARES OF GOLD FIELDS GHANA LIMITED ("GFGL") AND ABOSSO GOLDFIELDS LIMITED ("AGFL") FROM REPADRE CAPITAL (BVI) INC, A WHOLLY OWNED SUBSIDIARY OF IAMGOLD CORPORATION("IAMGOLD") 1. Introduction Shareholders are advised that Gold Fields has entered into a binding agreement to purchase through GFGH an indirect 18.9% interest in each of the Tarkwa and Damang gold mines in Ghana, from IAMGOLD for an aggregate consideration of US$667 million payable in cash (the "Proposed Acquisition"). Upon completion of the Proposed Acquisition, Gold Fields will have increased its interest in each of the Tarkwa and Damang gold mines from 71.1% to 90%, the remaining 10% interest being held by the Government of Ghana. The completion of the Proposed Acquisition will occur on the second business day after all the conditions precedent have been met which is expected to be no later than 31 July 2011. 2. Rationale for the Proposed Acquisition The Proposed Acquisition is expected to increase attributable production from the West Africa region, by approximately 181,000 ounces per annum, attributable gold resources by 3.3 million ounces and attributable reserves by 2.1 million ounces. Conceptual mining studies indicate considerable potential for further cut- back opportunities for the Damang open pit and the Proposed Acquisition increases Gold Fields exposure to this potential. Gold Fields knows and understands the Tarkwa and Damang gold mines and has a good understanding of the Ghanaian operating environment. As such the Proposed Acquisition is regarded as a relatively low risk transaction that should increase the company`s international production and lower its overall cost of producing gold. The Proposed Acquisition is expected to be accretive to Gold Fields earnings and EBITDA per share. 3. Tarkwa and Damang The Tarkwa gold mine is located in south-western Ghana, about 300 kilometres west of Accra, the capital of Ghana. The mine is situated some four kilometres west of the town of Tarkwa, which has good access roads, an established infrastructure and is served by a main road connecting to the port of Takoradi some 60 kilometres away at the Atlantic coast. The infrastructure of the mine consists of six open pits, two heap leach facilities, and a Carbon In Leach ("CIL") plant. The ore body consists of a series of sedimentary banket quartz reef units (conglomerates) of the Tarkwain System, that are similar to those mined in the Witwatersrand Basin of South Africa. The operation is currently mining multiple-reef horizons from open pits and there is potential for underground mining in the future. Tarkwa has a mineral resource of 12.6 million gold ounces and a mineral reserve of 9.3 million ounces. Tarkwa produced 734,800 ounces of gold in calendar year 2010 at a cash cost of US$573 per ounce and a Notional cash expenditure ("NCE") of US$831 per ounce. The outlook for 2011 is to produce between 720,000 and 760,000 ounces at a total cash cost of US$590 per ounce and NCE of US$900 per ounce. The Damang gold mine is also located in south-western Ghana, about 300 kilometres by road, west of Accra, the capital of Ghana and 30 kilometres north of the neighbouring Tarkwa gold mine, and is served by a main road connecting to the port of Takoradi, some 90 kilometres to the south-east. The mine infrastructure consists of multiple open pits, surface stockpile sources and a CIL plant. The Damang gold mine exploits oxide and fresh hydrothermal mineralisation in addition to Witwatersrand style, palaeoplacer mineralisation, similar to that of the Tarkwa gold mine. Damang has a mineral resource of 4.6 million gold ounces and a mineral reserve of 2.1 million ounces. Damang produced 227,500 ounces in 2010 at a total cash cost of US$660 per ounce and a NCE of US$973 per ounce. The outlook for 2011 is to produce between 220,000 and 250,000 ounces of gold at a total cash cost of US$700 per ounce and NCE of US$950 per ounce. 4. Conditions precedent to the Proposed Acquisition The Proposed Acquisition will be subject to customary terms and conditions including the fulfilment of certain conditions precedent which will include: - all required approvals, including the approval of the Proposed Acquisition by Gold Fields shareholders in general meeting, have been obtained; - the Gold Fields Board shall not have: * failed to recommend that Gold Fields` shareholders vote their Gold Fields shares in favour of the Proposed Acquisition; or
* withdrawn, withheld, amended, modified or qualified, or proposed publicly to withdraw, withhold, amend, modify or qualify, in each case in a manner adverse to IAMGOLD, its recommendation that Gold Fields` shareholders vote their Gold Fields shares in favour of
the Proposed Acquisition; - the Reorganisation, which comprises a number of transactions involving IAMGOLD, certain of its subsidiaries and certain third parties, to be completed; and - there has been no event, circumstance, effect, change, condition or state of facts that has or could reasonably be expected to have a material adverse effect in respect of the wholly-owned subsidiaries of IAMGOLD that own the 18.9% of the shares of GFGL or AGFL since 31 December 2010. 5. Related party transaction In terms of Section 10.4 of the Listings Requirements, where a listed company enters into a transaction with a shareholder who is, or within the 12 months preceding the date of the transaction was, entitled to exercise or control the exercise of 10% or more of the votes able to be cast on all or substantially all matters at general meetings of the listed company or its subsidiary or holding company or fellow subsidiary of its holding company ("Related Party"), which exceeds 5% of the company`s market capitalisation (at the date of transaction), certain requirements are required to be fulfilled before completing the transaction, including but not limited to: - obtaining shareholder approval from the shareholders of the listed company; and - the board of Directors confirming that the Proposed Acquisition is fair insofar as the shareholders of the listed company are concerned and that the Board has been so advised by an opinion from an independent professional expert acceptable to the JSE. As IAMGOLD is a material shareholder (18.9%) of GFGL and AGFL (both being subsidiaries of Gold Fields), IAMGOLD is regarded as a Related Party, and the Proposed Acquisition is regarded as a Related Party transaction, as defined in the Listing Requirements. The Proposed Acquisition represents 5.16% of Gold Fields` market capitalisation on 15 April 2011 being the date on which the Proposed Acquisition was announced on the SENS, and accordingly approval of Gold Fields` shareholders is required in terms of the Listing Requirements. 6. Unaudited pro forma financials effects of the Proposed Acquisition The unaudited pro forma financial effects of the Proposed Acquisition are set out below. The unaudited pro forma financial effects have been prepared for illustrative purposes only to provide information on how the Proposed Acquisition might have affected the reported historical financial information of Gold Fields assuming that the Proposed Acquisition was implemented on 1 July 2010 for purposes of the pro forma income statement and 31 December 2010 for purposes of the pro forma statement of financial position. 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 Proposed Acquisition. It does not purport to be indicative of what the financial results would have been had the Proposed Acquisition been implemented on a different date. The Directors are solely responsible for the preparation of the unaudited pro forma financial effects. The table below sets out the unaudited pro forma financial effects on Gold Fields of the Proposed Acquisition based on audited financial results of Gold Fields for the six months ended 31 December 2010 and financial position at 31 December 2010. Six month period ended 31 December 2010 Before the The After the Percen Proposed Proposed Proposed tage
Acquisition Acquisition Acquisition change (1) (2)(3) (Loss)/earnings (11) 29 19 272.7% per share - cents Diluted (loss)/ (11) 29 18 263.6% earnings per share - cents
Headline (loss)/ (11) 29 18 263.6% earnings per share - cents Diluted headline (11) 29 18 263.6% (loss)/earnings per share - cents Net asset value 6,468 (625) 5,844 (9.7%) per share - cents Net tangible value 5,850 (625) 5,225 (10.7%) per share - cents
Weighted average 711,011,673 - 711,011,673 - number of ordinary shares Diluted weighted 719,689,050 - 719,689,050 - average number of ordinary shares Shares in issue 720,796,887 - 720,796,887 - Notes: 1. (Loss)/earnings per share (EPS), diluted (loss)/ earnings per share (DEPS), headline earnings/(loss) per share (HEPS), diluted headline earnings/(loss) per share (DHEPS), net asset value (NAV) per share, Net Tangible asset value (NTAV) per share "Before the Proposed Acquisition" are based on the audited financial results of Gold Fields for the six months ended 31 December 2010 and financial position at 31 December 2010. 2. EPS, DEPS, HEPS and DHEPS "After the Proposed Acquisition" are based on the assumption that the Proposed Acquisition was implemented on 1 July 2010. 3. NAV and NTAV "After the Proposed Acquisition" are based on the assumption that the Proposed Acquisition was implemented on 31 December 2010. 4. EPS, DEPS, HEPS and DHEPS "After the Proposed Acquisition" have been reduced by interest payments on borrowings used for the Proposed Acquisition and increased by its share of profits for the six months ended 31 December 2010. The Proposed Acquisition constitutes a transaction with shareholders in terms of International Financial Reporting Standards (IFRS). As a result, the difference between the carrying value of the non-controlling interests and the fair value of the consideration paid is not reflected in earnings but rather as a movement within shareholders` equity, between Gold Fields shareholders and non-controlling interests. This accounting adjustment is non-recurring. It has been assumed that the purchase price paid to acquire the non- controlling interests of R4,502.3 million (US$667 million) would have been funded by long-term borrowings at LIBOR plus an average margin of 0.66%. For the six months ended 31 December 2010, this would have resulted in additional interest charges of R27.9 million. 7. Circular A circular in respect of the Proposed Acquisition will be sent to Gold Fields shareholders in due course. # Technical information has been prepared by competent person Markus Brewster (BSc (Geology), MSc MCSM (Mining Geology), MSc MCSM (Mining Engineering), MAusIMM (membership number 226310)), who is an employee of Gold Fields (15 April) 2011 Sponsor J.P. Morgan Equities Limited Date: 15/04/2011 13:00:07 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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