Gold Fields Limited Results for the Quarter Ended September 30 1998.HOUGHTON--(BUSINESS WIRE)--Oct. 29, 1998-- BECOMING THE BEST - CORE CASH COSTS US$181/OZ - COSTS INCLUDING CAPEX US$222/OZ - ROBUST MARGINS - HEADLINE EARNINGS Headline Earnings A basis for measuring earnings per share implemented by the Institute of Investment Management and Research. This method accounts for all the profits and losses from operational, trading, and interest activities, that have been discontinued or acquired at any UP 400% TO R252 MILLION SUMMARY The cost benefits of the corporate, portfolio and operational restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). implemented since Gold Fields Gold Fields Limited is one of the world’s largest unhedged producers of gold, providing investors with maximum leverage to the gold price. The company was formed in 1998 with the amalgamation of the gold assets of Gold Fields of South Africa Limited and Gencor Limited. was formed on 1 January this year, powered the company ahead of the local pack towards global competitiveness during the September quarter. Attributable gold output, including Tarkwa for the first time, was up 10% compared to the June quarter, to almost 750 000 ounces. Cash costs at the company's core operations of Beatrix, Driefontein and the Kloof kloof n. South African A deep ravine. [Afrikaans, from Middle Dutch clove, cleft, ravine; see gleubh- in Indo-European roots. Division declined to US$181 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. . "More important than cash costs, however, total costs, which include capex, were US$228 per ounce and US$222 per ounce respectively for attributable and core output," said Tom Dale Tom Dale is a fictional Liverpool bingo caller created and played by Peter Kay. He appears in the 'Eyes Down' episode of That Peter Kay Thing. Having no ambitions beyond the bingo hall, Tom is loved by his elderly clientelle (many of whom would love to go home to , Managing Director of Gold Fields. "With total costs based on the local appropriation The designation by the government or an individual of the use to which a fund of money is to be applied. The selection and setting apart of privately owned land by the government for public use, such as a military reservation or public building. accounting system, what you see is what you get (jargon) What You See Is What You Get - (WYSIWYG) /wiz'ee-wig/ Describes a user interface for a document preparation system under which changes are represented by displaying a more-or-less accurate image of the way the document will finally appear, e.g. when printed. , and you don't need a forensic Belonging to courts of justice. forensic 1) adj. from Latin forensis for "belonging to the forum," ancient Rome's site for public debate, and currently meaning pertaining to the courts. accountant to work out profit margins". Headline earnings at R252 million were more than five times the level of the June quarter and although this was due in great measure to the increase in the Rand Rand See Witwatersrand. rand 1 n. See Table at currency. [Afrikaans, after(Witwaters)rand. gold price received, Dale paid tribute to the people in the Group who had contained Rand denominated costs, despite wage increases in July, and controlled capital expenditure. "Some market observers believe that cost inflation will erode Erode (ĕrōd`), city (1991 urban agglomeration pop. 361,755), Tamil Nadu state, S India, on the Kaveri River. The city is located in a cotton-growing region, and its industries include cotton ginning and the manufacture of transport equipment. the position that South African producers have re-established for themselves in world markets", said Dale. "At Gold Fields, however, our vision for higher productivity in future is firmly based on the education, training and qualification of our people, combined with organisational re-design and this foundation provides the opportunity for sustainable ongoing improvements". OPERATIONS Kloof The Kloof Company, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Gold Fields, staked its claim as the flagship of the group and regained its position as a premier mine in the country, with all three divisions (Kloof, Libanon and Leeudoorn) showing further significant improvements during the quarter. Gold output for the Kloof Company as a whole increased by 10% to 11 540 kg with the Kloof Division improving its output by 7% to 6 769kg, Libanon by 8% to 2 627kg and Leeudoorn by 25% to 2 144kg. Despite a 9% wage increase, total operating costs operating costs npl → gastos mpl operacionales for the Kloof Company was reduced from R464.2 million to R462.1 million. The Kloof Division achieved the lowest unit cost in the Group by reducing cash costs by 23% to US$176/oz and total operating costs by 2% to R246 million. Leeudoorn continued to make a powerful case for inclusion in the core portfolio by reducing unit production costs by 17% to R43 494/kg (US$217/oz). Libanon reduced unit production costs by 8% to R46 839/kg (US$234/oz) while total operating costs remained virtually unchanged at R123 million. Distributable income for the Kloof Company as a whole increased from R25.9 million to R176.1 million. The Kloof Division reported a 132% increase in operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. to R141.0 million, Leeudoorn an operating income of R30.8 million compared to a loss of R4.5 during the June quarter and Libanon reported a similar turn around from a loss of R3.2 million to a profit of R28.5 million. Beatrix Beatrix, another wholly owned subsidiary of Gold Fields, produced 3 767kg of gold from 696 000 tons (619 000 tons) of ore milled during the September quarter. However, this sharp increase in stoping activity, combined with a higher development rate caused ore handling problems which reduced the Mine Call Factor and hence the recovery grade. Total working costs were up from R126.3 million to R 141.9 million due to increased mining activity but, assisted by the weakness of the Rand, the Rand, the: see Witwatersrand. cash cost decreased from US$205/oz to US$185/oz. Operating income decreased from R86.6 million to R76.1million and a total of R43.3 million was spent on capital expenditure. The number three shaft shaft (shaft) a long slender part, such as the diaphysis of a long bone. shaft n. 1. An elongated rodlike structure, such as the midsection of a long bone. 2. is due to be commissioned in December 1999. Driefontein Consolidated Limited Driefontein reported a solid set of results for the September quarter with gold output up by 7% to 11 524kg on the back of an increase in gold yield from 8.4 g/t to 8.6 g/t. At the presentation of the Driefontein results on 21 October, Wayne Robinson Wayne L. Robinson (born January 14, 1930 in Minneapolis, Minnesota) is a former professional American football linebacker who played for the Philadelphia Eagles from 1952 through 1956. At 6'2", 225-lb. , Managing Director of Driefontein, said that the Driefontein team was responsible for the turn around since December 1997, and he looked forward to the impact of the joint venture between the major shareholders in future. While total operating costs increased by 4% to R442.5 million, mainly due to a 9% increase in labour costs, unit production costs declined by 3% to R38 398/kg (US$192/oz) and cash costs from US$231/oz to US$185/oz. Profit after tax improved from R141.7 million to R243.5 million and distributable income, increased from R8.5 million in the previous quarter to R138.6 million during the current quarter. Oryx oryx (ôr`ĭks), name for several small, horselike antelopes, genus Oryx, found in deserts and arid scrublands of Africa and Arabia. They feed on grasses and scrub and can go without water for long periods. At the developing Oryx mine, gold output for the September quarter increased by 24% to 1 744kg, largely as a result of a 14% increase in ore milled to 308 000 tons and a 10% improvement in gold yield to 5.7g/t. Oryx is presently milling about 100 000 tons per month, which puts it within striking distance of the targeted capacity of 120 000 tons per month. With quarterly reef development well ahead of plan and values sampled holding up well, it is expected that Oryx will break even in February 1999. Tarkwa The September quarter saw the first quarter of full production from the new surface operation and, as a result, combined gold output from the underground (418kg) and the surface operation (1 040kg) increased to 1 458 kg. Cash costs, which include royalties, were up from US$248/oz to US$252/oz. Phase 2 of the project, which has commenced and is expected to be completed during the second half of calendar 1999, will double capacity and increase gold output to approximately 250 000 ounces per annum Per annum Yearly. . Cash costs are expected to decline towards US$200/oz. St. Helena Output was down from 1 843kg to 1 299 kg, mainly as a result of mill lock-up which decreased gold yields from 5.7g/t to 4.0g/t. The mill lock-up appears to have reached saturation point saturation point n. 1. Chemistry The point at which a substance will receive no more of another substance in solution. 2. The point at which no more can be absorbed or assimilated. during the month of September 1998 and, accordingly, the yield and gold production are expected to improve in the December quarter. Total operating costs increased from R73.9 million to R78.0 million due to wage increases. OUTLOOK The new Gold Fields is being shaped to secure sustainable jobs - and improve prospects - for the maximum sustainable number of employees, consistent with a competitive cost profile. Further consolidation of operational restructuring is expected to counter inflationary in·fla·tion·ar·y adj. Of, associated with, or tending to cause inflation: inflationary prices; inflationary policies. Adj. 1. cost pressures and Tarkwa and Oryx continue to make progress towards full production and cost targets. Now that the ore resource/reserve base and life of mine plans of Driefontein have been finalised and made public, its major shareholders are in a position to evaluate the potential benefits of an offer to the minority shareholders. An announcement in this regard will be made in due course. The Company is almost fully exposed to the spot Rand gold price, and hence the dollar gold price and rand/dollar exchange rate will impact significantly on earnings and dollar denominated costs.
September 1998
Quarterly Results
Headline earnings up 400%
Cost profiles secure robust margins
%
September June change
Gold output - 000 ounces
- managed 1,007 920 9
- attributable 744 674 10
- core 479 454 6
Gold Price Received - Rand per kilogram 57,546 50,974 13
Operating income - Rand million 355 207 71
Headline earnings - Rand million 252 47 436
Headline earnings per share - cents 102 19 436
Cash costs (IAS accounting)
- attributable - US$ per ounce 197 241 (18)
- core - US$ per ounce 181 223 (19)
Operating costs (appropriation accounting)
- attributable - Rand per kilogram 40,847 41,153 (1)
- attributable - US$ per ounce 204 250 (18)
- core - Rand per kilogram 37,273 38,098 (2)
- core - US$ per ounce 186 231 (19)
Total costs, including capital expendutire
- attributable - US$ per ounce 228 288 (21)
- core - US$ per ounce 222 282 (21)
(Core: 38% of Driefontein, 100% of Kloof Division and Beatrix)
Full results available on the Website http://www.goldfields.co.za
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