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Acquisition by Gold Fields of 100% of Barrick Gold's interests in Granny Smith, Lawlers and Darlot gold mines
Gold Fields Limited
Incorporated in the Republic of South Africa
Registration number 1968/004880/06
Share code: GFI
ISIN – ZAE000018123
Issuer code: GOGOF
ACQUISITION BY GOLD FIELDS LIMITED OF 100% OF BARRICK GOLD CORPORATION’S INTERESTS IN GRANNY
SMITH, LAWLERS AND DARLOT GOLD MINES IN AUSTRALIA
1. INTRODUCTION
Shareholders are advised that Gold Fields Limited (“Gold Fields”), through its wholly owned subsidiaries (the
“Group”), has entered into a binding sale and purchase agreement (the “Agreement”) with wholly owned
subsidiaries of Barrick Gold Corporation (“Barrick”) to acquire Barrick’s interests in the Granny Smith, Lawlers and
Darlot gold mines (collectively “the Yilgarn South Assets”) in Western Australia (collectively the “Acquisition”).
The Yilgarn South Assets are being acquired for a consideration of US$300 million, subject to downward working
capital adjustments to a maximum of US$30 million in accordance with the terms of the Agreement (the
“Consideration”). The Acquisition is subject to the fulfilment of the conditions precedent referred to in paragraph
4 below.
2. NATURE OF THE BUSINESS OF THE YILGARN SOUTH ASSETS
The Granny Smith underground gold mine is located 950 kilometres northeast of Perth and 23 kilometres south of
Laverton in the state of Western Australia. The processing plant consists of a two-stage fresh ore crushing circuit
with closed circuit screening and a single-stage oxide ore crushing circuit, a semi-autogenous grinding mill in closed
circuit with a cone crusher, an agitation leaching and carbon-in-pulp circuit, tailings gravity retreatment plant with
fine grind, a gold recovery plant with carbon reactivation, and a tailing thickener. Proven and probable mineral
reserves as of December 31, 2012, were 31.6Mt at 1.8g/t for 1.9 million ounces of gold.
The Lawlers mine is an underground operation located on the Norseman/Wiluna Greenstone Belt, approximately
660 kilometres northeast of Perth, Western Australia. Sulphide and oxide ores are treated at the on-site mill.
Proven and probable mineral reserves as of December 31, 2012, were 2.7Mt at 4.5g/t for 387,000 ounces of gold.
The Darlot gold mine is an underground operation located on the Yandal Greenstone Belt, approximately 680
kilometres northeast of Perth, Western Australia. Ore is treated by conventional carbon-in-leach at the on-site mill.
Proven and probable mineral reserves as of December 31, 2012, were 2.4Mt at 4.3g/t for 338,000 ounces of gold.
3. RATIONALE FOR THE ACQUISITION
The acquisition provides Gold Fields with:
• an additional 452,000 ounces of annual production, at an All-In Sustaining Cost (AISC) of US$1,137 per
ounce (see Note 1 below);
• 2.6 million reserve ounces at a cost of about US$115 per ounce (see Note 2 below); and
• 1.9 million resource ounces in addition to the reserve ounces. The total resource acquisition cost is below
US$67 per ounce (see Note 3 below).
Upon completion, Australia will represent Gold Fields’ largest regional production centre with 42% of the Group’s
production, with Ghana decreasing to 34% and Peru and South Africa remaining largely unchanged at 13% and
11% respectively.
4. SALIENT TERMS OF THE ACQUISITION
The Consideration may be paid fully in cash or, at the election of Gold Fields, partly in shares issued to Barrick. To
the extent that Gold Fields pays the consideration in cash, it may seek to use cash on hand in Australia, cash from
existing bank facilities, raise funds through the capital markets, or a combination thereof.
The Acquisition is subject to the following customary and regulatory conditions precedent:
a) the South African Reserve Bank approving the Acquisition (which approval Gold Fields has already
obtained);
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b) Australia’s Federal Treasurer approving or becoming precluded from preventing the Acquisition in
accordance with the Foreign Acquisitions and Takeovers Act 1976 (Cth);
c) the Western Australian Minister for Mines approving the transfer of the mining tenements the subject of
the Acquisition in accordance with the Mining Act 1978 (WA); and
d) assignment of various material contracts (which Gold Fields can waive at its discretion).
5. FINANCIAL EFFECTS OF THE ACQUISITION
The table below sets out the unaudited pro forma financial effects of the Acquisition based on Gold Fields’ most
recently published interim financial results for the six month period ended 30 June 2013. The financial effects have
been determined using Barrick’s Yilgarn South Assets unaudited management accounts for the six months ended
30 June 2013, which have been prepared in terms of International Financial Reporting Standards.
The pro forma financial effects have been prepared for illustration purposes only, to provide information about the
impact of the Acquisition and due to their nature, may not fairly present Gold Fields’ results and financial position.
The preparation of the unaudited pro forma financial effects is the responsibility of the board of directors of Gold
Fields.
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Before Adjustment After % change
Earnings per share - continuing operations (127) 13 (115) 10%
Earnings per share - discontinued operations 349 (13) 336 -4%
Headline earnings per share- continuing operations (71) 11 (60) 15%
Headline earnings per share- discontinued operations 67 (2) 65 -3%
Net asset value per share 6 130 (55) 6 075 -1%
Tangible net asset value per share 5 525 (34) 5 491 -1%
Assumptions
1. The above are extracted from the Gold Fields interim financial results for the six months ended 30 June
2013 as released on 22 August 2013.
2. The unaudited and unreviewed pro forma consolidated financial information after the Acquisition is based
on the following assumptions:
a. the Acquisition was implemented with effect from 1 January 2013 for the calculation of the income
statement effects;
b. includes the share of income and expenditure of R229 million relating to the Yilgarn South Assets for
the six months ended 30 June 2013, net of taxes. This share of income and expenditure has been
adjusted to reflect Gold Fields accounting policies;
c. the statement of financial position effects assume the Acquisition was implemented on 30 June 2013
and assumes carrying value of assets of R369 million purchased with no goodwill;
d. includes the estimated transaction costs of a non-recurring nature of R146 million, net of taxes; and
e. the reduction in interest income of R19 million, net of taxes, as a result of cash being utilised to fund
the Acquisition, calculated at the average of the relevant prevailing interest rates.
3. The adjusted number of shares used is based on the period end share price of R53.
4. The pro-forma consolidated financial effects have not been reviewed or reported on by Gold Fields' external
auditors.
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5. The pro-forma consolidated financial effects have assumed that the purchase price of US$270 million will
be funded by means of 50% in Gold Fields shares and 50% in cash. The shares assumed to be issued as a
result of the Acquisition amount to 25.7 million.
6. CATEGORISATION OF THE ACQUISITION
The Acquisition is classified as a Category 2 transaction in terms of the Listings Requirements of JSE Limited.
Johannesburg
22 August 2013
Transaction sponsor to Gold Fields
J.P. Morgan Equities South Africa Proprietary Limited
Notes:
1. These are Barrick’s published results for the 2012 financial year.
2. As per Barrick’s 2012 40-F filing, Barrick has used US$1,500 per ounce and an exchange rate of 1.00
$US/$Aus for the Yilgarn South Assets. Mineral Reserves are 36.7 Mt at 2.2 g/t for 2.6 Moz. This includes
1.1 Moz in the open pit at Granny Smith, which was not modelled by Gold Fields. The cost calculation is
based on an acquisition price of US$300 million, excluding any possible downward working capital
adjustments.
3. Barrick report their Mineral Resources exclusive of Mineral Reserves. Figures as per Barrick’s 2012 Annual
Financial Report and 40-F filing. Mineral Resources are 11.7 Mt at 5.0 g/t for 1.9 Moz. Taking account of
the Barrick reporting protocol, a view on the Resource and Reserve positions of the Yilgarn South Assets
equates to a Resource acquisition price of below US$67 per ounce. Gold Fields report their Mineral
Resources inclusive of Mineral Reserves. The resource cost calculation is based on an acquisition price of
US$300 million, excluding any possible downward working capital adjustments.
Barrick reports tonnage as short tons, this release refers to metric tonnes or Mt (million metric tonnes).
This press release is for information purposes only and does not constitute or form part of an offer to sell or the
solicitation of an offer to buy or subscribe to any securities of Gold Fields. The securities referred to herein have not
been and will not be registered under the United States Securities Act of 1933 (the "Securities Act") or with any
securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold,
resold, transferred or delivered, directly or indirectly, in the United States except pursuant to registration under, or
an exemption from the registration requirements of, the Securities Act. There will be no public offering of securities
in the United States or any other jurisdiction.
FORWARD-LOOKING STATEMENTS
Certain statements included in this announcement, as well as oral statements that may be made by Gold Fields, or
by officers, directors or employees acting on its behalf related to the subject matter hereof, constitute or are based
on forward-looking statements. Forward-looking statements are preceded by, followed by or include the words
“may”, “will”, “should”, “expect”, “envisage”, “intend”, “plan”, “project”, “estimate”, “anticipate”, “believe”,
“hope”, “can”, “is designed to” or similar phrases. These forward-looking statements involve a number of known
and unknown risks, uncertainties and other factors, many of which are difficult to predict and generally beyond the
control of Gold Fields, that could cause Gold Fields' actual results and outcomes to be materially different from
historical results or from any future results expressed or implied by such forward-looking statements. Such risks,
uncertainties and other factors include, among others, Gold Fields’ ability to complete the transaction, Gold Fields’
ability to successfully integrate the acquired assets with its existing operations, Gold Fields’ ability to achieve
anticipated efficiencies and other cost savings in connection with the transaction, changes in relevant
governmental regulations, particularly environmental, tax, health and safety, regulations and potential new
legislation affecting mining rights, Gold Fields’ future financial position and plans, strategies, objectives, capital
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expenditures, and projected costs, the success of exploration and development activities, as well as projected level
of gold price and other risks. Gold Fields 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 announcement or to
reflect any change in Gold Fields’ expectations with regard thereto.
This press release includes Mineral Reserves and Mineral Resources information calculated by Barrick as at 31
December 2012 in accordance with National Instrument 43-101 as required by Canadian securities regulatory
authorities.
Date: 22/08/2013 08:02:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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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,
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