Gold
Fields
Limited
Company Profile and History
Gold
Fields
Limited
is
one
of
the
world’s
largest
unhedged
producers
of
gold
from
eight
operating
mines
in
South
Africa,
Ghana
and
Australia.
Gold
Fields
is
a
public
company
incorporated
in
South
Africa
and
currently
has
16
gold
processing
facilities
(8
in
South
Africa,
4
in
Ghana,
3
in
Australia
and
1
in
Peru)
which
treat
ore
to
extract
gold
and,
in
the
case
of
Peru,
copper.
It
has
attributable
production
of
3,
64
million
oz
per
annum
and
total
attributable
ore
reserves
of
83
million
oz
and
mineral
resources
of
251
million
oz.
Gold
Fields
of
South
Africa
was
formed
in
1887
by
Cecil
Rhodes
and
Charles
Rudd
to
hold
properties
they
had
acquired
on
the
Transvaal's
Witwatersrand
gold
fields.
Reorganized
as
Consolidated
Gold
Fields
of
South
Africa
(Consgold)
in
1892,
it
was
plagued
by
uncertainties
and
found
itself
on
a
really
firm
footing
only
in
the
1930s,
when
it
took
the
lead
in
opening
up
the
Western
Randin
conjunction
with,
among
others,
the
Anglo
American
Corporation.
West
Witwatersrand
Areas
Ltd.
was
formed
in
1932
to
work
the
new
field.
In
1959,
as
part
of
a
major
restructuring
exercise,
the
name
"Gold
Fields
of
South
Africa"
was
revived
for
a
South
African
rather
than
a
British
domiciled
company,
a
wholly
owned
subsidiary
to
take
over
the
management
of
the
parent
company's
southern
African
assets.
In
1971,
West
Wits
took
over
all
of
Gold
Fields
of
South
Africa's
assets
as
well
as
its
name.
In
the
1990’s
Gold
Fields
and
Gencor
(the
product
of
a
1980
merger
between
General
Mining
and
Finance
Corporation
and
Union
Corporation)
merged.
The
deal
created
Gold
Fields
Ltd.,
the
country's
second-largest
gold
concern
and
one
of
the
largest
in
the
world.
In
1999,
it
bought
the
remaining
shares
of
St.
Helena
Gold
Mines
Ltd.
that
it
did
not
already
own.
In
November
2001,
St.
Ives
and
Agnew
Gold
Mines
were
added
to
the
company's
holdings.
Abosso
Goldfields
Ltd.
was
acquired
the
following
year.
Gold
Fields
Ghana
obtained
the
mining
rights
for
the
Tarkwa
property
from
the
government
of
Ghana
in
1993.
In
August
2000,
with
the
consent
of
the
government
Gold
Fields
Ghana
was
assigned
the
mining
rights
for
the
northern
portion
of
the
Teberebie
property.
The
Tarkwa
rights
expire
in
2027,
while
the
Teberebie
rights
expire
in
2018.
A
new
SAG
mill
and
CIL
plant
commenced
continuous
operations
at
the
Tarkwa
property
in
November
2004.
The
Tarkwa
mine
has
access
to
the
national
electricity
grid,
water,
road
and
railroad
infrastructure.
Most
supplies
are
trucked
in
from
either
the
nearest
seaport,
which
is
approximately
140
kilometres
away
by
road
in
Takoradi,
or
from
Tema
near
Accra,
which
is
approximately
300
kilometres
away
by
road.
Surface
mining
at
Damang
commenced
in
August
1997
and
Gold
Fields
assumed
control
of
operations
on
January
23,
2002.
Historically,
the
underground
mine
was
in
operation
from
1878
until
1956
until
closure
due
to
an
extended
strike
and
lack
of
cash
flow.
The
Damang
mine
has
access
to
the
national
electricity
grid
and
water
and
road
infrastructure.
Most
supplies
are
trucked
in
from
either
the
nearest
seaport,
which
is
approximately
200
kilometres
away
by
road
in
Takoradi,
or
from
Accra,
which
is
approximately
360
kilometres
away
by
road.
Abosso
holds
the
right
to
mine
at
the
Damang
property
under
a
mining
lease
from
the
government
which
expires
in
2025.
In Country Location
The
Tarkwa
gold
mine
is
located
in
south-western
Ghana,
about
300
km
by
road
west
of
Accra,
the
capital,
at
latitude
5°15’
N
and
longitude
2°00’
W.
It
is
situated
some
4
km
west
of
the
town
of
Tarkwa.
Damang
is
located
in
south-western
Ghana,
approximately
300
km
by
road,
west
of
Accra,
the
capital,
at
a
latitude
5°11’N
and
longitude
1°57’W.
It
is
situated
some
30
km
north
of
the
town
of
Tarkwa.
Services and Products
Gold
Fields
is
primarily
involved
in
underground
and
surface
gold
mining
and
related
activities,
including
exploration,
extraction,
processing
and
smelting.
Gold
Fields
also
has
an
interest
in
a
platinum
group
metal
exploration
project.
Number of Employees
As
of
June
30,
2008,
Tarkwa
had
approximately
4,700
employees,
including
approximately
2,900
employed
by
outside
contractors.
As
of
June
30,
2008,
Damang
had
approximately
1,600
employees,
including
approximately
1,350
employed
by
outside
contractors.
Financial Information
In
the
fiscal
year
ended
June
30,
2008,
Tarkwa
produced
0.65
million
ounces
of
gold,
of
which
0.46
million
ounces
were
attributable
to
Gold
Fields,
with
the
remainder
attributable
to
minority
shareholders
in
Gold
Fields
Ghana.
Damang
mine
produced
0.194
million
ounces
of
gold,
of
which
0.138
million
ounces
were
attributable
to
Gold
Fields,
with
the
remainder
attributable
to
minority
shareholders
in
Abosso.
The
following
table
sets
out
Gold
Fields’
total
ounces
sold
and
weighted
average
total
cash
costs
and
total
production
costs
per
ounce
for
fiscal
2007
and
fiscal
2008.
Detailed below are the operating and production results at Tarkwa for the past three fiscal years.
Detailed below are the operating and production results at Damang for the past three fiscal years
Market Share
Ghana's gold output increased by 4 percent in 2008 to 2.6 million ounces. As a result of the rising price for gold, mining revenues increased to $2.3 billion. In the fiscal year ended June 30, 2008, Tarkwa produced 0.65 million ounces of gold, of which 0.46 million ounces were attributable to Gold Fields. Damang produced 0.194 million ounces of gold, of which 0.138 million ounces were attributable to Gold Fields. The market share of Gold Fields was 23% in 2008.
Business Objective
To
be
the
global
leader
in
sustainable
gold
mining
and
to
produce
five
million
quality
gold
ounces
within
five
years
Business Model
Gold
Fields’
strategy
is
premised
on
the
following
three
basic
pillars:
operational
excellence,
which
is
aimed
at
improving
returns
through
the
optimization
of
existing
assets.
This
is
achieved
in
the
first
instance
through
improving
productivity.
It
also
implies
the
reduction
of
costs
through
cost
management
initiatives
and
growing
assets
through
inward
investment;
growing
Gold
Fields
by
diversifying
geographical,
technical
and
product
risk
through
acquiring
and
developing
additional
long-life
assets;
and
securing
the
future
of
Gold
Fields
by
earning
and
maintaining
what
Gold
Fields
calls
its
“license
to
operate”
in
those
countries
and
regions
in
which
it
operates
and
by
upholding
strong
principles
of
corporate
governance.
Gold
Fields
views
itself
as
a
truly
global
mining
company,
but
believes
that
in
some
circles
it
is
perceived
as
predominantly
a
South
African
company
with
a
few
international
operations.
In
order
to
change
this
perception
and
be
recognized
as
a
global
diversified
company,
Gold
Fields
has
begun
the
process
of
restructuring
its
operations
into
four
regions
that
will
operate
with
more
autonomy
than
under
Gold
Fields’
current
structure:
South
Africa;
West
Africa;
South
America;
and
Australasia.
Each
of
these
regions
will
be
led
by
a
strong
management
team,
tasked
with
running
the
mines
safely
and
efficiently,
as
well
as
driving
and
being
significantly
involved
in
the
growth
of
the
business
within
the
region.
Apart
from
the
search
for
countries
and
provinces
that
have
the
geological
potential
to
host
Gold
Fields
calibre
mines,
considerable
effort
is
also
being
expended
by
the
exploration
and
corporate
development
groups
on
assessing
which
countries
are
likely
to
be
amenable
to
large-scale
future
mining.
Against
the
background
of
rapidly
declining
gold
reserves,
the
Group’s
approach
is
one
of
managing
and
pricing
in
risk
rather
than
general
risk
aversion.
In
the
light
of
the
current
market
conditions
and
the
need
to
facilitate
entry
points
into
new
countries,
Gold
Fields
has
continued
to
seek
out
value-adding
opportunities
through
strategic
partnerships
to
access
regions
viewed
to
be
of
long-term
strategic
significance.
Ownership of Business
Gold
Fields
Ghana,
which
holds
the
interest
in
the
Tarkwa
mine,
is
owned
71.1%
by
Gold
Fields,
18.9%
by
IAMGold
and
10.0%
by
the
government
of
Ghana.
Abosso,
which
owns
the
interest
in
the
Damang
mine,
is
owned
71.1%
by
Gold
Fields,
18.9%
by
IAMGold
and
10%
by
the
Ghanaian
government,
mirroring
the
shareholding
structure
of
Gold
Fields
Ghana.
Benefits Offered and Relations with Government
The
new
Minerals
and
Mining
Act
came
into
force
on
March
31,
2006.
Although
the
Minerals
and
Mining
Act
repealed
the
Minerals
and
Mining
Law,
and
the
amendments
to
it,
the
Minerals
and
Mining
Act
provides
that
leases,
permits
and
licenses
granted
or
issued
under
the
repealed
laws
will
continue
under
those
laws
unless
the
Minister
responsible
for
minerals
provides
otherwise
by
regulation.
ferred
to
as
the
cadastral
system,
whereby
land
is
demarcated
in
blocks.
Under
the
new
system,
a
mining
lease
area
may
not
be
less
than
one
block
or
more
than
300
contiguous
blocks;
mining
companies
which
have
invested
or
intend
to
invest
at
least
$500
million
may
benefit
from
stability
and
development
agreements,
relating
to
both
existing
and
new
operations,
which
will
serve
to
protect
holders
of
current
and
future
mining
leases
for
a
period
not
exceeding
15
years
against
changes
in
laws
and
regulations
generally
and
in
particular
relating
to
customs
and
other
duties,
levels
of
payment
of
taxes,
royalties
and
exchange
control
provisions,
transfer
of
capital
and
dividend
remittances;
provisions
requiring
the
renewal
of
a
mining
lease
for
a
further
period
of
up
to
30
years
once
the
holder
has
made
an
application
for
renewal
pursuant
to
the
terms
of
the
lease
if
the
holder
is
in
material
compliance
with
its
obligations
under
law
and
under
the
lease;
and
provisions
restricting
royalty
rates
to
not
more
than
6%
or
less
than
3%
of
the
total
revenue
of
minerals.
Under
Ghanaian
law,
the
government
is
entitled
to
a
10%
interest
in
any
Ghanaian
company
which
holds
a
mining
lease
in
Ghana,
without
the
payment
of
compensation.
The
government
of
Ghana
has
already
received
this
10%
interest
in
each
of
Gold
Fields
Ghana
and
Abosso.
Under
the
Minerals
and
Mining
Law,
which
continues
to
apply
to
Gold
Fields
Ghana’s
operations,
and
under
the
Minerals
and
Mining
Act,
the
government
has
a
further
option
to
acquire
a
“special
share”
in
a
mining
company
for
no
consideration
or
in
exchange
for
such
consideration
as
the
government
and
that
company
shall
agree.
Although
the
government
of
Ghana
has
agreed
not
to
exercise
this
option
in
respect
of
Gold
Fields
Ghana,
it
has
retained
this
option
for
Abosso.
Under
Ghana’s
mining
laws,
the
Bank
of
Ghana
or
the
Minister
for
Finance
may
permit
the
holder
of
a
mining
lease
to
retain
a
percentage
of
its
foreign
exchange
earnings
for
certain
expenses
in
bank
accounts
in
Ghana.
Under
a
foreign
exchange
retention
account
agreement
with
the
government,
Gold
Fields
Ghana
is
required
to
repatriate
20%
of
its
revenues
derived
from
the
Tarkwa
mine
to
Ghana
and
use
the
repatriated
revenues
in
Ghana
or
maintain
them
in
a
Ghanaian
bank
account.
Abosso
is
currently
obligated
to
repatriate
25%
of
its
revenue
to
Ghana,
although
the
level
of
repatriation
under
the
deed
of
warranty
between
Abosso
and
the
government
of
Ghana
is
subject
to
renegotiation
every
two
years.
Gold
Fields
currently
repatriates
approximately
40%
of
revenues
from
the
Ghana
operations
to
Ghana.
The
standard
corporate
income
tax
rate
is
currently
25%
having
been
reduced
from
28%
with
effect
from
January
1,
2006.
Tax
depreciation
of
capital
equipment
operates
under
a
capital
allowance
regime.
The
capital
allowances
consist
of
an
initial
allowance
of
80%
of
the
cost
of
the
asset
and
the
balance
is
added
to
the
balance
carried
forward
and
depreciated
at
a
rate
of
50%
per
year
on
a
declining
balance
basis.
Under
the
project
development
agreement
entered
into
between
the
government
and
Gold
Fields
Ghana
and
the
deed
of
warranty
entered
into
between
the
Ghanaian
government
and
Abosso,
the
government
has
agreed
that
no
withholding
tax
shall
be
payable
on
any
dividend
or
capital
repayment
declared
by
Gold
Fields
Ghana
or
Abosso
which
is
due
and
payable
to
any
shareholder
not
normally
resident
in
Ghana.
Gold
Fields
may
exploit
all
surface
and
underground
gold
at
all
three
sites
until
the
rights
expire,
provided
that
Gold
Fields
pays
the
government
of
Ghana
a
quarterly
royalty
which
is
calculated
on
the
basis
of
a
formula
which
ranges
from
3%
to
12%
of
revenues
derived
from
mining
at
the
sites.
For
fiscal
2008,
this
formula
resulted
in
Gold
Fields
Ghana
paying
royalties
equivalent
to
approximately
3%
of
the
revenues
from
gold
produced
at
the
Tarkwa
and
Teberebie
properties,
and
Abosso
paying
approximately
3%
of
the
revenues
from
gold
produced
at
the
Damang
property.
Product Development
Gold
Fields
spent
approximately
$170
million
on
capital
expenditures
at
the
Tarkwa
operation
in
fiscal
2008,
primarily
on
construction
of
the
North
Plant
heap
leach
pad,
CIL
plant
expansion,
replacement
and
expansion
of
mining
equipment
and
capital
waste
mining.
Gold
Fields
has
budgeted
approximately
$146
million
for
capital
expenditures
at
Tarkwa
for
fiscal
2009,
principally
for
the
CIL
plant
expansion,
further
expansion
of
the
North
Plant
heap
leach
pad,
additional
mining
equipment
and
capital
waste
mining.
Damang
increased
gold
production
year
on
year
due
to
higher
grade
ore
from
the
Damang
Pit
Cutback
(DPCB)
and
improved
efficiencies
due
to
construction
and
early
commissioning
of
a
seventh
leach
tank.
The
DPCB
is
scheduled
to
be
completed
in
F2013
when
the
final
pit
limits
are
mined.
Following
Gold
Fields’
acquisition
of
Damang
in
January
2002,
an
exploration
program
was
started
to
seek
alternative
sources
of
ore
to
replace
the
Damang
pit,
by
testing
both
hydrothermal
and
conglomerate
styles
of
mineralization
across
the
Damang
lease
area.
The
Rex
pit
is
a
new
pit
located
on
southern
extent
of
the
Damang
Mining
Lease.
The
Rex
Exploration
program
was
conducted
in
fiscal
2006
and
the
pit
was
originally
planned
to
be
mined
in
fiscal
2010.
In
light
of
the
occurrence
of
illegal
mining
activities
in
the
Rex
Project
area,
management
decided
to
accelerate
the
mining
of
the
Rex
pit
to
fiscal
2009.
Negotiations
between
the
mine
and
the
illegal
miners
resulted
in
the
removal
of
the
miners
over
several
months
without
incident.
The
illegal
miners
mined
some
of
the
ore
body
but
they
were
removed
before
the
mining
plan
was
significantly
affected.
In
August
2009
Gold
Fields
announced
the
elevation
of
its
operations
in
Ghana
to
be
the
hub
for
growth
in
the
West
African
Region.
As
a
consequence,
the
Vice
President
and
the
Managing
Director
of
the
Ghana
Division,
Peter
Turner,
has
been
promoted
to
the
position
of
Executive
Vice
President
and
Head
of
the
West
Africa
Region,
effective
August
1,
2009.
The
Mine
Reserve
Power
(MRP)
project
was
completed
in
the
second
quarter
of
2008
as
a
joint
venture
between
the
four
major
mining
operators
in
Ghana
to
generate
supplemented
power
to
the
national
grid
in
mitigation
of
national
load
shedding
that
occurred
in
times
of
drought.
The
MRP
mitigates
approximately
25
per
cent
of
the
Gold
Fields
generator
needs