Edgar Filing: GOLD FIELDS LTD

Page 1

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of November 2004
Commission File Number 1-31318

Gold Fields Limited

(Translation of registrant's name into English)

24 St. Andrews Rd.

Parktown, 2193

South Africa

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under
cover Form 20-F or Form 40-F.

Form 20-F..x... Form 40-F.....

Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ________

Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ________

Indicate by check mark whether by furnishing the information contained in this Form,
the registrant is also thereby furnishing the information to the Commission pursuant to
Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ..... No ..x...

If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- ________

A N N U A L R E P O R T 2 0 0 5

Gold Fields Limited

the complete gold company

Financial

highlights

page

Message

from the chairman

page

Board

of directors

page

Chief

executive ofﬁcer’s review

page

The Gold Fields strategy

Sound operating performance

Quality mining and cost management

Building a global footprint

Securing our future

Good corporate governance

Creating value for shareholders

Executive

committee

page 22

Gold Fields Limited

and the

South African mining charter

page 24

Review

of operations

• South African operations

page 27

• International operations

page 41

Developing

projects

page 58

Exploration

and new business development

page 61

Mineral

resources and reserves

page 63

Sustainable

development

page 72

Health

and safety

page 74

Community

relations

page 80

Human

resources

page 86

HIV/AIDS

page 90

Environment

page 94

Economic

footprint

page 100

Group

value-added statement

page 102

Risk

management

page 103

Corporate

governance

page 106

Annual

ﬁnancial statements

page 113

Shareholders’

information

page 182

Global

reporting initiative

page 183

Administration

and corporate information

page 184

Glossary

of terms

page 185

Report

content

Registration number: 1986/004880/06
Share code: GFI ISIN - ZAE 000028123

www.goldﬁelds.co.za

/ www.goldﬁeld.com

Vision

To be a leading, globally diversified,
precious metals producer through
the responsible, sustainable and
innovative development of quality
assets.

Mission

Gold Fields is intent on achieving
outstanding returns for investors with
motivated employees committed to
optimising existing operations and
aggressively pursuing and developing
additional world-class deposits,
promoting mutually beneficial
relationships and applying best
practice technology.

Gold Fields Limited Annual Report 2005

United States dollars

South African rand

F2004

F2005

F2004

4,158

4,219

‘000 oz

Gold produced*

131,284

129,329

302

331

$/oz

Total cash costs

R/kg

66,041

67,075

46,028

47,880

‘000

Tons milled/treated

‘000

47,880

46,028

387

422

$/oz

Revenue

R/kg

84,218

85,905

$/t

Operating costs

R/ton

198

204

336

368

Operating profit

2,286

2,315

111

Net earnings

180

768

Core earnings°

452

587

all companies wholly owned except for Ghana (71.1%)

net earnings excluding gains and losses on financial instruments and foreign debt net of cash and exceptional items

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Financial

highlights

90 -

80 -

70 -

60 -

50 -

40 -

30 -

20 -

10 -

0 -

Attributable

gold

reserves

(Moz)

4.4 -
4.3 -
4.2 -
4.1 -
4.0 -
3.9 -
3.8 -
3.7 -
3.6 -
3.5 -
3.4 -

Attributable

gold

production

(Moz)

80,000 -

70,000 -

60,000 -

50,000 -

40,000 -

30,000 -

20,000 -

10,000 -

0 -

Total

cash costs

(R/kg)

350 -

300 -

250 -

200 -

150 -

100 -

50 -

0 -

Total

cash costs

(US$/oz)

160 -

140 -

120 -

100 -

80 -

60 -

40 -

20 -

0 -

Share

price

(SA rand)

16 -

14 -

12 -

10 -

8 -

6 -

4 -

2 -

0 -

Share

price

(US dollars)

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Consistent

performance

“… the company was able to report an increase

in production to 4.22 million ounces, to reduce

total cash costs from R67,075 per kilogram

to R66,041 per kilogram and achieve ﬂ at

operating proﬁ ts …”

Company

growth

“Growth for this company must come

from new discoveries and/or acquisitions

outside South Africa.”

Good

compliance

“The company is in good compliance with the

criteria set by the Mining Charter and we expect its

new order mining rights to be issued in 2006.”

Message

from the chairman

Mining operations

are well-planned and

engineered, accounts

are conservatively struck

and internal controls

are increasingly more

effective. These details

are transparently disclosed

herein.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

The ﬁscal year ended 30 June 2005 was a distracting one

for Gold Fields. The overshadowing events were the

extended hostile but futile bid by Harmony for Gold Fields

and the failed IAMGold transaction, a matter related to the

bid. Together, these two issues took up more than nine

months of management time and were a major distraction

for all concerned.

The fact that the company was able to report an increase

in production to 4.22 million ounces, to reduce total cash

costs from R67,075 per kilogram to R66,041 per kilogram

and achieve ﬂat operating proﬁts is quite remarkable; a

testament to the strength of our management and asset

quality. Net earnings were down 77 per cent to R180 million

largely due to non-operating features including the costs of

the Harmony defence (R316 million), the costs associated

with the proposed IAMGold transaction (R58 million), and

higher amortisation charges.

By contrast, net earnings two years ago were R2,953 million.

This highlights one of the key strategic issues facing Gold

Fields. In 2003, gold hovered around US$400 an ounce, the

rand averaged R9.07 to the US dollar and cost pressures in

South Africa continued to grow. The contribution of the

lower rand revenues and rising costs have a twofold effect

on the company in that they not only reduce earnings but

move gold reserves back out of the reserve classiﬁcation to

resource classiﬁcation as economics are impaired. While

this is not unique to South Africa, it is remarkable that the

rest of the global industry is reporting such mediocre proﬁts

and lack of reserve growth in the face of US$425 per ounce

gold prices. Higher input costs in the form of higher steel

prices, higher cyanide, diesel and reagent costs, together

with deteriorating mine grades, are to blame. This industry,

which survived gold below US$275 an ounce, is strikingly

unprosperous at US$425 an ounce.

This annual report discloses extensive detail about the

operating results of the company and its various mines and

enterprises. There can be no doubt that the day-to-day

operations are professionally and competently managed.

Mining operations are well planned and engineered,

accounts are conservatively struck and internal controls

are increasingly more effective. These details are

transparently disclosed herein. I will conﬁne my comments,

therefore, to the external issues facing the company.

Firstly, the strategic issues remain the same as they have

for some time. Despite substantial inward investment over

the past decade, the South African mines are mature,

getting deeper, and face declining grades and rising costs.

Production growth from new ventures in South Africa is

limited by the lack of new mining opportunities in gold. By

and large, proﬁtable growth in South Africa can only be

achieved through investment in cost reduction and labour

productivity in existing mines. These have their limits.

Growth for this company therefore, must come from new

discoveries and/or acquisitions outside South Africa. Some

critics have attempted to paint this external growth focus

as unpatriotic, however, management is charged and

rewarded to create value for shareholders and grow the

company. Gold Fields’ vision is to be the leading, globally

diversiﬁed precious metals producer. As the South African

assets slowly decline over the next two decades or more,

Gold Fields is bound to become increasingly international,

using its South African base as the platform from which to

grow globally.

Having said that, the South African operations remain the

bedrock on which this company is built. Over the past ﬁve

years, we have invested more than R5 billion in capital

projects at our South African mines, thereby positioning

them for the future. We have built new long-life shafts at

Driefontein, Kloof and Beatrix; we have upgraded our

metallurgical plant facilities to world-class standards; we

continue to improve underground working conditions for

our people through Project 28.5°C; and we have improved

our overall safety performance by more than ﬁfty per cent

through various initiatives. We have invested in our ore

bodies improving our available ore reserves position at our

long-life shafts to more than 18 months, and we continue

to invest in developing the skills and abilities of our people

through extensive education and training programmes,

spending approximately R133 million per year in this ﬁeld.

The second strategic issue for Gold Fields is the difﬁculty

in ﬁnding value-adding growth opportunities elsewhere in

the world. The company has interesting development

projects in inventory in the form of Cerro Corona in Peru,

Essakane in Burkina Faso, plus promising joint venture

prospects within Comaplex Mining on the Meliadine

property in northern Canada and Bolivar Gold in Venezuela.

During the year, the Arctic Platinum Project (APP) was put

on hold. The strengthening trend of the euro against the

US dollar and dramatic increases in steel and construction

costs raised capital costs by 50 per cent from those

anticipated last year which, in the face of low palladium

prices, put the project economics below our investment

hurdles. Inﬂation in capital, operating and transport costs

generally, is affecting the economics of new projects

almost everywhere which, when combined with the social

and political risks of entering countries where gold is being

found, makes growth a challenge.

The third principal strategic issue is meeting the demands

for transformation in South Africa embodied principally in

the Mining Charter and the Black Economic Empowerment

(BEE) movements. The boom in global mining, particularly

base metals, coal and iron ore, is placing intense pressure

on the industry’s already limited human resources and this

will continue for some time. A signiﬁcant challenge for the

next few years will be for Gold Fields to meet the target for

transformational representation in management. The ranks

of historically disadvantaged South Africans (HDSAs) are

not well ﬁlled with management-trained mining people,

unquestionably a result of policy mistakes by past

governments. Training, developing and retaining people

will be a continuing challenge. On the related issue of black

empowerment, the Gold Fields transaction with

Mvelaphanda Resources to sell a 15 per cent equity

interest in the South African gold mining interests of the

company remains a landmark example of a responsible

BEE transaction. During the year, this transaction was

amended slightly to deﬁne the minimum (45 million) and

maximum (55 million) number of shares in Gold Fields that

Mvelaphanda Resources can obtain should it elect to

exchange its equity interest in the South African assets for

Gold Fields shares. Also, Gold Fields has not yet received

its new order mining rights, but is in good compliance with

the criteria set by the Mining Charter. We expect the new

order mining rights to be issued in F2006.

The hostile takeover attempt by Harmony for Gold Fields

should never have happened. Motivated for the wrong

reasons, namely, to revive and perhaps even rescue a failing

Harmony; cloaked in hypocritical patriotism, and buttressed

with gold reserves that did not conform to industry

standards, the bid was unappealing to Gold Fields’

shareholders from the start. Its primary strength was drawn

from its designed appeal to overseas hedge funds and

Harmony’s irrevocable proxy from 20 per cent shareholder

Norilsk Nickel. The fact that the bid was drawn out for an

unheard-of seven months, can be blamed largely on the

inconsistency between the competition laws and takeover

code in South Africa. The entire takeover framework in

South Africa is in need of reform and if any good is to come

from Harmony’s ill-conceived bid it will be to highlight this

need. That aside and viewed in retrospect, the whole affair

had only negative consequences. It was extremely

expensive in legal and advisory costs, R316 million for Gold

Fields and R184 million for Harmony, not to mention

opportunities foregone while the company was under siege.

While Harmony did manage to acquire 11 per cent of Gold

Fields, it has incurred a loss of R372 million on the 6 per

cent sold to date. Both companies endured severe

markdowns in their market capitalisations, Harmony’s

spectacularly so, and neither has yet fully recovered despite

a weakening rand. It has not made Gold Fields any more

efﬁcient than it was, while it has raised enduring questions

about Harmony’s ore reserves and management. Altogether,

it was a value-destroying experience and antagonised most

international shareholders.

The interrelated matter of the failed IAMGold transaction

was also unfortunate. The concept of Gold Fields acquiring

control of a foreign publicly listed company through the

sale of its foreign assets to that company was consistent

with our international growth strategy. IAMGold was the

perfect target, for not only is it our joint venture partner and

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Message

from the chairman

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

owner of 18.9 per cent of Tarkwa and Damang, it has other

attractive interests in Africa, and was also in need of a

transaction of the nature proposed. While by far the

majority of Gold Fields shareholders by number supported

the transaction, three signiﬁcant shareholders, including

20.0 per cent shareholder Norilsk, voted against it. As a

result the transaction was marginally rejected with

51.44 per cent of the votes cast against and 48.23 per cent

in favour of the transaction. Not included were some

institutional votes in favour of the transaction that went

missing and could not be accounted for. The outcome was

a setback for the company, particularly with respect to its

internationalisation strategy. It does not, however, mean a

change in the rationale and the external growth strategy of

the company.

For much of the year, investor attention in the resources

sector has been captured by the effects of growth in

Chinese demand for all mineral resources. Price rises in

base metals and ferrous minerals, along with coal, have

drawn interest away from the gold sector and, relatively,

gold prices have stagnated. Nonetheless, two encouraging

developments have occurred during the year, namely the

signiﬁcant gold recovery in jewellery demand up 17 per

cent in the ﬁrst half of 2005, and the successful launch of

the Gold Equity Traded Funds (ETF’s) on the New York and

other stock exchanges, allowing investors access to

physical gold through more conventional and inexpensive

channels. It is pleasing to note that almost all the increase

in jewellery demand has come from those markets in

which the World Gold Council has been promoting,

conﬁrming convincingly that effective market promotion

does work. The gold ETF’s today have accounted for

248 tons of demand and the NYSE product continues to

grow strongly. It seems surprising, given the surges in

energy costs, the massive twin deﬁcits in the USA, and the

threat of growing global terrorism, that gold has not

responded more vigorously. If gold is to remain true to

form, a strong response must inevitably follow.

Gold Fields is in the process of changing its board

composition. In June 2005, we announced the

appointments to the board of two Norilsk Nickel nominees,

Mr Sergei Stefanovich and Dr Artem Grigorian, and at the

annual general meeting Messrs Bernard van Rooyen and

Gordon Parker will retire. On behalf of the board, I wish to

welcome the new members and to thank Messrs van

Rooyen and Parker for their individual and extensive

contributions to the company. Both have been members

since inception in 1998.

Finally, to management and employees throughout the

company, it has been a disturbing and challenging year

and, on behalf of the board, I wish to extend our heartfelt

appreciation and thanks for your sustained perseverance,

loyalty and commitment throughout this difﬁcult time. At

the same time, we extend our thanks to shareholders for

their support.

Christopher Thompson

Chairman

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

1. Christopher M T Thompson (57)

†

Chairman

BA Rhodes; MSc (Management Studies), Bradford

Mr Thompson has been a director of Gold Fields since May 1998
and chairman of the board since October 1998. He was the chief
executive officer of Gold Fields from October 1998 to 30 June
2002. He has over 36 years of experience in the mining industry.
He is also chairman and member of the executive committee
of the World Gold Council, director of TeckCominco Corporation
and Frontera Copper Corporation and a past director of the South
African Chamber of Mines and of Business against Crime.

2. Alan J Wright (64)°

Deputy Chairman

CA(SA)

Mr Wright has been deputy chairman of Gold Fields since November
1997. Prior to September 1998, he was the chief executive officer
of Gold Fields of South Africa Limited.

EXECUTIVE DIRECTORS

3. Ian D Cockerill (51)*

Chief Executive Officer

BSc (Geology) Hons, London, MSc (Mining), Royal School of Mines

Mr Cockerill has been a director of Gold Fields since October
1999 and became chief executive officer on 1 July 2002. He
was chief operating officer and managing director of Gold Fields
from October 1999 to 30 June 2002. He has over 30 years of
experience in the mining industry. Prior to joining Gold Fields he
was the executive officer for Business Development and African
International Operations for AngloGold Limited.

4. Nicholas J Holland (46)*

Chief Financial Officer

B.Comm, BAcc, Witwatersrand; CA(SA)

Mr Holland has been a director of Gold Fields since February 1998 and
executive director of finance since March 1998. On 15 April 2002 his
title changed to chief financial officer. He has 25 years of experience
in financial management. Prior to joining Gold Fields he was financial
director and senior manager of corporate finance of Gencor Limited. He
is also a director of Rand Refinery Limited, and Teba Bank Limited.

NON-EXECUTIVE DIRECTORS

5. Kofi Ansah (61)°

BSc (Mech. Eng) UST Ghana; MSc (Metallurgy) Georgia Institute of
Technology

Mr Ansah was appointed a director in April 2004. He is a director of
Metropolitan Insurance Company Limited and Aluwoks Limited.

6. Michael J McMahon (58)°

BSc (Mech. Eng), Glasgow

Mr McMahon has been a director of Gold Fields since December
1999. He serves as non-executive director of Impala Platinum
Holdings Limited and Murray & Roberts Holdings Limited.
Previously, he was chairman and an executive director of Gencor
Limited and executive chairman and chief executive officer of
Impala Platinum Holdings Limited.

7. Gordon R Parker (69)°

BS, MS, Montana College of Mineral Science and Technology;
MBA, Cape Town

Mr Parker has been a director of Gold Fields since May 1998.
He is a director of Caterpillar Inc, and Phelps Dodge Corporation.
Previously, he was chairman, president and chief executive officer
of Newmont Mining Corporation.

Board

of directors

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

8. Patrick J Ryan (68)°

PhD (Geology), Witwatersrand

Dr Ryan has been a director of Gold Fields since May 1998. He
is the chairman of Frontera Copper Corporation and Cobre del
Mayo S.A. de CV. He was previously the executive vice president,
mining operations, development and exploration at Phelps Dodge
Corporation.

9. Tokyo M G Sexwale (52)*

Certificate in Business Studies, University of Botswana, Lesotho
and Swaziland

Mr Sexwale has been a director of Gold Fields since January 2001.
He is chairman of Mvelaphanda Resources Limited, Northam
Platinum Limited and Trans Hex Group Limited and a director of a
number of other companies.

10. Bernard R van Rooyen (71)*

BA, LLB, Witwatersrand

Mr van Rooyen has been a director of Gold Fields since May
1998. He is the deputy chairman of Trans Hex Group Limited and
of Mvelaphanda Resources Limited and a director of Northam
Platinum Limited, Banro Corporation, Mvelaphanda Gold (Pty)
Limited and Ndowana Exploration (Pty) Limited.

11. Chris I von Christierson (57)°

BComm, Rhodes; MA, Cambridge

Mr von Christierson has been a director of Gold Fields since
February 1999. He is the chairman of Rio Narcea Gold Mines
Limited and a director of Afri-Can Marine Minerals Corporation
Limited and Southern Prospecting (UK) Limited.

12. Jakes G Gerwel (59)°

D.litt et Phil (magna cum laude) Brussels

Professor Gerwel has been a director of Gold Fields since August
2002. He is chancellor of Rhodes University; Nelson Mandela
Distinguished Professor in the Humanities at the University of the
Western Cape, non-executive chairman of Brimstone Investment
Corporation and South African Airways (Proprietary) Limited and a
director of a number of other companies.

13. Rupert L Pennant-Rea (57)°

BA (Trinity College Dublin); MA (Univ. of Manchester)

Mr Pennant-Rea has been a director of Gold Fields since July 2002. He
is a director of The Stationery Office Holdings Limited and Henderson
Group plc. He is a director of British American Tobacco plc, Sherrit
International Corporation, First Quantum Minerals, Rio Narcea, and
a number of other companies. Previously he was editor of The
Economist and deputy governor of the Bank of England.

14. Artem Grigorian (48)*

PhD in Political Science and History, USSR Academy of Science

Dr Grigorian was appointed a director in June 2005. He is
vice-president and shareholder of Russian Spectra company and
chief executive officer of Russian company RMC.

15. Sergei Stefanovich (35)*

Law and English Studies (cum laude) Odessa State University;
MBA Lausanne, Switzerland

Mr Stefanovich was appointed a director in June 2005. He is a
director, international operations at MMC Norilsk Nickel.

*Non-independent directors °Independent directors

†

Mr Thompson, who could previously not be categorised as independent by virtue
of his employment by the company until 30 June 2002, became an independent
director of Gold Fields with effect from 1 July 2005.

15.

14.

13.

12.

11.

10.

on track and delivering

The Gold Fields

strategy

The 2005 ﬁ nancial year was challenging yet successful, with the Group
delivering a sound operating performance. The ﬂ uctuating rand/US dollar
exchange rate mitigated against optimising our rand income, while the
attempted hostile takeover bid by Harmony was successfully defeated.

•

Focused on operational excellence

•

Positioned for growth

•

Securing our future

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

I would like to pay tribute to

all Gold Fields’ stakeholders

who stood by us during

the Harmony hostile bid,

be they employees or

investors. We undertake

to justify their conﬁ dence

in Gold Fields by improving

the Group’s performance

and strengthening our

shareholders’ investment.

SUMMARY

The 2005 ﬁ nancial year was challenging yet successful,

with the Group delivering a sound operating performance.

The ﬂ uctuating rand/US dollar exchange rate mitigated

against optimising our rand income, while the attempted

hostile takeover bid by Harmony was successfully

defeated. The international expansion projects at Tarkwa

and St Ives were completed ahead of expectation and their

beneﬁ ts are expected to make signiﬁ cant future

contributions to Gold Fields’ bottom line. The South African

mines have been successfully repositioned from the

“Wal-Mart” strategy to the “Saks Fifth Avenue” strategy,

aimed at improving quality volumes, and have recorded an

overall robust cost performance since September 2003.

HEALTH AND SAFETY

The safety and welfare of our people are of primary importance

to the Group and it is with deep regret and sadness that I

record the tragic loss of 26 fellow employees in mining related

incidents over the past year. I sincerely extend the Group’s

condolences to the families and friends of the deceased.

Our safety statistics did, however, show improvement during

F2005. The fatal injury frequency rate improved by 33 per

Chief

executive ofﬁcer’s review

The Gold Fields strategy

page

Sound operating performance

page

Quality mining and cost management

page

Building a global footprint

page

Securing our future

page

Good corporate governance

page

Creating value for shareholders

page

Operational excellence
Sound operating performance

despite a challenging year

We achieved our key objectives of increasing production and reducing costs
despite the challenging operating environment.

Signiﬁcant improvements in safety

Attributable gold production up 2% to
4.2 million oz

Total cash costs down 2% to R66,041/kg

Dividend declared 70 SA cps, 11 US cps

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

cent, the serious injury frequency rate by 7 per cent and the

lost day injury frequency rate by 9 per cent. Gold Fields’

management will continue to pursue its focus on mine safety

towards achieving our vision of zero mining casualties and

ensuring all our mines attain safety rates on par with the

leading global safety benchmark, that is, the Ontario

Underground Mining Standard.

During the year, our Damang, Agnew and St Ives operations

recorded no fatal accidents, while Beatrix mine achieved a

notable three million fatality-free shifts. The health and safety

management system at Tarkwa is in the process of being

certiﬁed Occupational Health and Safety Assessment Series

(OSHSAS) compliant and will receive accreditation at the end

of 2005. Our South African operations have also set the end

of calendar 2005 as their target to become fully compliant.

We completed a number of health initiatives during the

year. A Du Pont peer review was conducted at our South

African operations to identify areas for further improvement

of our health and safety management. The ﬁndings

emphasised the imperative of complete employee

involvement in recognising and reporting unsafe conditions

and avoiding the repetition of events that gave rise to

previous injuries and accidents. A total re-engineering of

hospital care was implemented through the introduction of

the demand-nursing stafﬁng model, thereby converting

ﬁxed costs to variable costs. We also reviewed our codes

of practice for thermal stress, noise and airborne pollutants,

and these levels were audited and reviewed accordingly.

RESULTS

The Group delivered a sound operational performance for

F2005 and I am particularly pleased to report that we

achieved our key objectives of increasing production and

reducing unit costs despite the challenging operating

environment. Attributable gold produced by the Group

amounted to 4.22 million ounces (F2004: 4.16 million

ounces). Operating proﬁt for F2005 was R2.29 billion

(F2004: R2.32 billion) of which R1.55 billion

(F2004: R1.53 billion) was generated from international

assets. Operating costs, including gold in process

movements, were marginally higher at R9.47 billion

Chief executive officer’s review

(continued)

(F2004: R9.46 billion), although they reduced on a unit total

cash cost basis from R67,705 per kilogram to R66,041 per

kilogram. On a tons processed basis, costs improved to

R198 per ton from R204 per ton. Net earnings were

R180 million (F2004: R768 million) and headline earnings

totalled R291 million (F2004: R763 million).

The rand/US dollar exchange rate strengthened from an

average of R6.90 in F2004 to R6.21 in F2005, while the

dollar gold price appreciated from an average of US$387 per

ounce in F2004 to US$422 per ounce. As a result, the rand

gold price received by the South African operations fell by

2 per cent to R84,175 per kilogram (F2004: R85,673 per

kilogram). Accordingly, our South African operations

remained under pressure while the international operations,

taking full advantage of the higher gold price, contributed a

laudable 68 per cent to Group operating proﬁt.

Signiﬁcant gains of R344 million were generated on ﬁnancial

instruments during the year. However, the R316 million cost

of defending the Harmony bid and the R58 million cost of the

failed IAMGold transaction, further diluted earnings for the

period to R180 million (F2004: R768 million). Core earnings,

that is earnings excluding gains and losses on ﬁnancial

instruments and foreign debt and exceptional items, were

R452 million (F2004: R587 million).

The tendentious Harmony takeover bid was successfully

laid to rest when the High Court ruled on 20 May 2005 that

the offer had, in fact, lapsed on 18 December 2004 and

was not capable in law of being revised or reinstated. The

takeover litigation is closed but the repercussions for

business in general, and the mining industry, in particular,

remain to be seen. However, it did bring to light some

positive beneﬁts and served to emphasise Gold Fields’

underlying strength as an investment and an employer.

The scheme to acquire control of the world’s fourth largest

gold mining company was, at best, ill-conceived. I would

like to pay tribute to all Gold Fields’ stakeholders who

stood by us during this episode, be they employees or

investors. We undertake to justify their conﬁdence in Gold

Fields by improving the Group’s performance and

strengthening our shareholders’ investment.

Operational excellence
Quality mining and cost

management

•

SA operations repositioned from “Wal-Mart”

to “Saks Fifth Avenue” strategy

•

Delivery on Project 100 and Project Beyond

•

he South African operations have not only delivered in terms of improved
quality volumes, they have also shown an impressive improvement in cost
performance. Operating costs decreased from R6.68 billion to R6.66 billion
despite higher gold production, above inﬂ ation wage increases and higher
steel and fuel costs during F2005.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

SOUTH AFRICAN OPERATIONS

Management took a view in September 2003 that the rand

would remain stronger for longer than initially anticipated.

It was decided to reposition the South African operations

by converting from the “Wal-Mart” to the “Saks Fifth

Avenue” strategy. To support this strategy, we also

introduced an initiative called Project 500. It consists of

two components: project 400, which was designed to add

a further R400 million of revenue through improving the

quality and quantity of our output, and project 100, a

stores-based consumption project, which focused on

achieving R100 million in cost savings through improved

standards and norms.

I am pleased to report that these strategies are being

successfully implemented. During F2005, the underground

yield for the South African operations increased from

7.1 grams to 7.4 grams per ton and the area mined

increased by 2 per cent to 2.05 million square metres. This

resulted in South African gold production increasing by

1 per cent from 2.80 million ounces in F2004 to 2.82 million

ounces in F2005, included in this was the one hundred

millionth ounce produced by Driefontein.

The South African operations also showed an impressive

improvement in cost performance, with operating costs

decreasing from R6.68 billion to R6.66 billion despite the

higher gold production, above inﬂation wage increases,

and higher steel and fuel costs during F2005. This translated

into a 1 per cent reduction in total cash costs from

R73 ,626 to R72,830 per kilogram. This improvement is

attributable in part to Project 100, which performed beyond

expectations, exceeding our annual savings target of

R100 million by 40 per cent.

Project Beyond, a procurement project entailing improved

supply chain management was launched in May 2004 with

projected annual savings of between R200 million to

R300 million over 18 to 24 months. The project gathered

signiﬁcant momentum during F2005 and delivered savings

of R103 million against historical contract prices. Further

beneﬁts will be realised in the upcoming ﬁnancial year as

Project Beyond is rolled out to the international operations.

We have also established a new project, Project 100+

which is focused on adding ongoing sustainable savings at

the South African operations. As at the end of June 2005

15 projects with potential savings of R200 million per

annum were identiﬁed. The beneﬁts of these projects are

expected to be realised in F2006 and beyond.

INTERNATIONAL OPERATIONS

The international operations delivered a sterling

performance with total gold production up 4 per cent to

1.66 million ounces. One of the most signiﬁcant

achievements for Gold Fields in F2005 was the completion

of both major capital projects: the mill expansion and

owner mining projects at Tarkwa in Ghana and the mill

replacement at St Ives in Western Australia. These

important R1.7 billion growth projects, which will provide

double-digit returns, have positioned the Group to beneﬁt

from further increased production and lower costs going

forward.

Tarkwa delivered a signiﬁcant contribution to Gold Fields

generating an operating proﬁt of R803 million (US$129 million)

in F2005, 35 per cent higher than F2004. With a production

increase of 23 per cent, Tarkwa is now the largest producer

of gold in Ghana.

Damang made a substantial contribution of R221 million

(US$36 million) to the Group’s operating proﬁt during

F2005. The major focus at Damang is the large-scale

cutback of the Damang pit in pursuit of higher grade ores.

We plan to commence this process in F2006 with

signiﬁcant ore volumes being achieved in late F2007.

St Ives had a difﬁcult year due to open pit ore grades being

lower than planned and a slow ramp up in productivity at

the new underground mines. As a result, gold production

was 3 per cent lower than F2004. The replacement of

planned open pit ounces with higher cost underground

ounces resulted in a 7 per cent increase in total cash costs

year-on-year. St Ives nevertheless contributed R282 million

(US$45 million; A$60 million) towards operating proﬁt.

However, we anticipate additional production in the order

of 10 per cent and substantial cost reductions in F2006 as

the new mill reaches planned operational efﬁciency.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Chief executive officer’s review

(continued)

a passion for value

FOCUS ON THE RULE OF TWOS

•

Minimum of 2 million ounces in reserves

•

Production rates of greater than 200,000

ounces per year

•

Cash cost of production less than half the

commodity price

•

Pay-back of capital investment in two years

•

Double digit rate of return

➧

Organic growth projects at Tarkwa & St Ives completed

R3.4 billion “war chest” for growth

Internally funded exploration pipeline

Cerro Corona feasibility to be completed

in early F2006

Signiﬁcant potential opportunity identiﬁed in Burkina

Faso (Essakane Project)

➧

Philosophy

The search for quality assets

Diversifying technical, product & geographical risk

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Agnew increased gold production by 5 per cent to

212,500 ounces with total cash costs of A$310 per ounce

contributing R247 million (US$40 million; A$53 million) to

Group operating proﬁt. The successful commissioning of

the Songvang pit at Agnew will produce a base load of

medium grade ores that, along with the high grade ore

from the Waroonga underground complex, will give the

mine an assured four to ﬁve year life before alternative ore

sources are required.

GROWTH

Our growth strategy remains unchanged, namely to

achieve a 50:50 split between South African and offshore

production by adding 1.5 million ounces of offshore

production to our portfolio by 2009, thereby balancing our

portfolio and reducing risk.

Delays were experienced with the Cerro Corona project in

Peru, the most signiﬁcant being caused by sociopolitical

issues around the mine site and within the region. However,

the feasibility study is expected to be completed in early

F2006 and the mining permit to be issued during November

2005, six months later than anticipated.

The Arctic Platinum Project (APP) has been placed on hold.

The feasibility study was temporarily delayed in October

2004 when we had to review the impact of lower grades in

the Suhanko resource models and the impacts of a signiﬁcant

increase in input costs following the global commodity and

resources boom, coupled with the strong euro/US dollar

exchange rate. Previous capital estimates required to bring

the project into production increased from US$300 million to

in excess of US$500 million. The global shift in the base

metal smelter market and the short-term outlook for the

palladium market, compounded the adverse prospects for

this project. We are completing the APP geological work but

unless a signiﬁcant, smaller high-margin opportunity is

identiﬁed, or the economic drivers return to more favourable

parameters, it will remain on hold.

Our exploration group has identiﬁed a signiﬁcant potential

opportunity in Burkina Faso (Essakane Project) in which

Gold Fields can gain a 70 per cent interest. A pre-feasibility

study was commenced during the year and the results of

this study are expected towards the end of calendar 2005.

Should the outcome be favourable, we will immediately

commence with a feasibility study.

We continue to invest in exploration in selected major gold

areas of the world and are actively managing our investment

in junior companies to gain exposure to developing assets.

These investments are proving cost-effective and the

exploration programme is currently self-funding. In addition,

we seek acquisitions or exploration investments in areas

where we are under-represented, such as certain parts of

Africa, South America, Australasia and Russia.

THE IAMGOLD TRANSACTION

Gold Fields has a strong balance sheet with net cash and

near-cash reserves of approximately R3.4 billion available

to fund growth projects and other opportunities that may

arise. In line with our current strategy for growth, we are

looking more closely at expanding our exposure to

international investments. One such project was the

reverse takeover of the IAMGold Corporation, our partner

in Gold Fields Ghana and Abosso Goldﬁelds Limited. The

proposal was submitted to shareholders who rejected it by

51.44 per cent against, 48.23 per cent in favour and

0.33 per cent abstaining.

It was a disappointing result for management but the

decision of shareholders is paramount and respected.

However, it should be stressed that IAMGold was never a

strategy in itself. Rather, it was a way of accelerating the

achievement of the previously stated goal of an additional

1.5 million annual offshore ounces.

NORILSK NICKEL

As referred to by the Chairman, Norilsk Nickel, which took

a 20.0 per cent stake in Gold Fields on 29 March 2004, has

nominated two representatives to the Gold Fields board. As

previously stated, we have agreed to explore the potential

for co-operation regarding our respective gold assets.

MINING CHARTER

During 2005, we continued to make good progress towards

meeting or exceeding the requirements of the Mining

Charter, and there has been an interactive process to this

end with the Department of Minerals and Energy.

Chief

executive officer’s review

(continued)

Securing our future
A focused strategy…

•

South African mining rights
conversion by F2006

•

Listed on the JSE/SRI index

•

All operations ISO 14001 compliant

•

Supporting the World Gold Council

•

Signiﬁcant investment in local
communities

Sustainable development is a core objective of our business. We remain
focused on continued proﬁ tability while, at the same time, remaining alive
to the realities and needs of the communities within which we operate.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

towards sustainable
development

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

We anticipate that our new order mining rights will be

issued in the course of F2006.

Gold Fields’ participation in the South African Mining Charter

is discussed more fully in the accompanying review.

BLACK EMPOWERMENT EQUITY PARTNER

The terms of our March 2004 transaction with Mvelaphanda

Resources to sell a 15 per cent beneﬁcial interest in the

South African gold mining interests of Gold Fields to

Mvelaphanda within ﬁve years, were amended by mutual

consent to provide greater certainty as to the ultimate

minimum and maximum number of shares Mvelaphanda

Resources may hold in Gold Fields Limited. The transaction

makes provision for both Gold Fields and Mvelaphanda to

have the right to require the exchange of the said 15 per

cent equity interest in return for the issue to Mvelaphanda

of new ordinary shares of an equivalent value in Gold Fields

Limited, based on a formula provided for in the existing

agreements (“the exchange right”). However, the vagaries

of currency markets, and the gold price, made it desirable

to amend the transaction to provide for a minimum and

maximum number of Gold Fields Limited shares that will

be issued following the exercise of the exchange right. In

terms of the amendment, Mvelaphanda will be entitled to

be issued with not less than 45 million and not more than

55 million Gold Fields Limited shares if the exchange right

is exercised. These amended terms provide certainty

regarding Mvelaphanda’s ultimate shareholding in Gold

Fields Limited, thereby securing a sustainable black

economic empowerment partnership, as was intended.

The full legal provisions of the transaction are contained in

the directors’ report on page 134.

SUSTAINABLE DEVELOPMENT

Sustainable development is and always has been, a core

objective of our business and is highlighted throughout this

report. We remain focused on the continued proﬁtability of

our business while, at the same time, remaining alive to the

realities and needs of the societies within which we operate.

We are committed to following the principles of the Global

Reporting Initiative and have indexed our performance

against the key indicators on page 183 of this report.

We participated in the second round of the JSE Social

Responsibility Index on triple bottom line reporting and

were ranked in the top ﬁve of high-impact companies on

the Index. Ranking for this was based on sound social,

economic and environmental performance. High-impact

companies include those with the most potential to cause

damage to the environment and include 22 companies, the

majority of which are mining companies.

ENVIRONMENTAL MANAGEMENT

As a leading international mining company, we are deeply

aware of our responsibility to practise mining in a manner that

will ensure sustainability. The environmental management

systems of our Group mines have been certiﬁed in terms of

ISO 14001 and the South African mines were re-certiﬁed in

2005 in terms of the ISO 14001:2004 guideline.

In the ﬁeld of environmental education and training, we

extended both our environmental awareness training and

task-speciﬁc training. In addition to the education centres

we partner with Rhodes University, we submitted a

proposal to the Department of Minerals and Energy during

F2005 for the introduction of a post-graduate course in

environmental management in mining.

COMMUNITY RELATIONS

Our South African and international community relations

programmes continued during F2005 with a budget

exceeding R34 million. Projects are focused on

communities within which our operations are located or

from which we draw labour, and are identiﬁed and managed

to support the integrated development plans of such

communities and their respective civil administrations.

Greater emphasis is placed on projects that are market-

oriented and will be sustainable in order to make a real

contribution to the economies of the communities within

which they are located. One such project near our Beatrix

mine in the Free State will focus on the growing and extraction

of essential oils for international markets. Sixty-ﬁve hectares

of land will be planted with biomass to produce 800 litres of

extracted oils for beneﬁciation in South Africa as well as

export, generating approximately R5 million per annum in

Chief

executive officer’s review

(continued)

Securing our future
A culture...

....built on good corporate

governance

•

High standards of corporate ethics

•

Balanced approach to risk management

•

Responsibility to all shareholders

Gold Fields is committed to upholding sound principles of corporate
governance in all of its business dealings and in respect of all its
shareholders.

social

environment

economic

CORPORATE

GOVERNANCE &

RISK

MANAGEMENT

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

revenue and creating additional employment opportunities

for the local community. In Ghana, a number of large-scale

agribusiness opportunities were assessed to develop viable

businesses in the Tarkwa area. Oil palm has an excellent

potential due to high Ghanaian and regional demand and

available local expertise, and potential partners are being

sought for such a business venture.

HIV/AIDS

The most recent statistics indicate that just over ﬁve million

people of South Africa’s total population of 46 million were

HIV positive at the end of calendar 2004, representing a

total population prevalence rate of 11 per cent

. Our HIV/

Aids strategy remains based on prevention, care for the

infected and affected, rehabilitation and after-care, and

monitoring and evaluation.

Our Highly Active Anti-retroviral Therapy (HAART)

programme has been extended to our operations in Ghana

where, in conjunction with the International Labour

Organisation (ILO) and the Ghana Mine Workers’ Union, a

joint HIV/Aids programme is being implemented based on

the ILO Code of Practice.

In South Africa, our HAART programme has been approved

as best medical practice by the HIV Clinicians’ Society of

South Africa. Approximately 81 per cent of our South

African employees who started on the HAART programme

still actively attend clinics. Further details of our HIV/Aids

programme appear on page 90 of this report.

HUMAN RESOURCES

F2005 saw the continuation of our strategy to increase the

participation of historically disadvantaged South Africans

(HDSAs) in middle to senior positions throughout the

Group. Ensuring the success of our Group’s employment

equity plan is a key performance target for all of our

managers. We have also developed retention strategies,

particularly as skilled and experienced people become

scarcer throughout the mining industry, to ensure we reach

the targets we have set ourselves.

The percentage of HDSAs employed in the Patterson grading

C upper to F bands and above at our South African operations,

increased from 19 per cent in F2000 to 33 per cent at the end

of F2005. Of this total, 37 per cent were in the C upper band.

RISK MANAGEMENT

Our approach to risk management is laid down in our

Group Risk Policy, which lays the foundation for consistent,

comprehensive and systematic risk assessment and

reporting procedures across the Group. Management

committees at various levels in the company review and

report on the Group’s most signiﬁcant risks, along with

data on the controls and risk mitigation strategies that are

in place to reduce the levels of risk facing the company.

The board, assisted by its nominated committees, is

responsible for the overall system of risk management and

accordingly monitors on an ongoing basis the Group’s key

risks and the internal control environment.

The risk assessment process during the year highlighted

various key risk categories that could affect Gold Fields.

These factors, should they materialise, could materially

affect the Group’s results. The key categories are:

• Political;

• Financial;

• Ore reserves;

• Environmental and social;

• Health; and

• Human resources.

The Group’s risk ﬁnancing philosophy and practices

remained largely unchanged during the year. Provision was

made for increased cover limits for underground and

surface events. Should the Group suffer a major loss,

future earnings could be affected. Risk management is

discussed more fully on page 103.

CORPORATE GOVERNANCE

Gold Fields has, since its inception, been committed to

upholding sound principles of corporate governance in all

of its business dealings and in respect of all its stakeholders.

As the focal point of the company’s corporate governance

system, all board members are expected to discharge their

ﬁduciary duties and responsibilities professionally and in

accordance with Gold Fields’ Code of Ethics, thereby

Chief

executive officer’s review

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Department of Health, National Antenatal Survey 2004.

Creating value for

shareholders

Gold Fields:
the complete gold company

DIVIDEND POLICY:

Gold Fields’ dividend policy is to declare an interim and ﬁnal dividend in respect of each ﬁ nancial
year, based on 50 per cent of the earnings for the year before taking account of investment
opportunities and after tax excluding impairments. Earnings are adjusted to exclude unrealised gains
and losses on ﬁnancial instruments and foreign debt, but adjusted to include cash payments and
receipts in relation to such underlying ﬁnancial instruments.

•

Raise safety performance at all operations to global

benchmark standards

•

Produce 4.3 million attributable ounces of gold

•

Target South African costs at or below R70,000/kg

•

Target Group costs at or below R66,000/kg

•

Improve productivity at the South African operations

•

Replenish depleted ounces through exploration

success or acquisitions

May 98

6 -

5 -

4 -

3 -

2 -

1 -

0 -

Market

capitalisation

($bn)

June 05

May 98

6 -

5 -

4 -

3 -

2 -

1 -

0 -

Production

(Moz)

June 05

Internationally

diversified

shareholder base

20%

16%

30%

33%

South Africa

Russia

North America

Europe

Rest of world

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Our main objectives for F2006 are to:

upholding our core values of integrity, transparency and

enterprise enshrined in this code.

We continue to endorse the principles contained in the

South African Code of Corporate Practices and Conduct as

recommended in the Second King Report and believe that

we comply substantially and materially with its provisions.

Going forward, adherence to sound principles of corporate

governance is and will remain both a board and management

priority.

DIVIDEND

The company declared an interim dividend of 30 South

African cents (5 US cents) on 28 January 2005 and a ﬁnal

dividend of 40 South African cents (6 US cents) on 3 August

2005, making a full year dividend of 70 South African cents

(11 US cents).

OUTLOOK FOR 2006

We expect the rand to remain strong during F2006 given

the robustness of the local economy and the continued

weakness of the US dollar. Input costs will increase as a

result of the higher wage environment and rising energy

costs, particularly petroleum-based products. Costs are

therefore expected to remain under pressure. However,

there are indications that the dollar gold price will remain at

the positive levels recorded at the end of F2005.

Against this background, our main objectives for F2006 are:

• to raise the safety performance of all operations by

a further 10 per cent thus moving towards the global

benchmarking standard in order to eliminate fatalities

and injuries;

• attributable gold production of 4.3 million ounces;

• Group costs targeted at or below R66,000 per kilogram;

• South African costs targeted at or below R70,000 per

kilogram;

• to improve productivity at the South African operations

by 10 per cent to 4.3 square metres per total employee

costed;

• to conclude the feasibility study on Cerro Corona and, if

positive, initiate development on this project; and

• to replenish depleted ounces through exploration

success or through the acquisition of new ounces.

APPRECIATION

Finally, I thank the people of Gold Fields and their families for

their hard work, dedication and loyalty in the challenging year

behind us, and especially to all those who contributed

towards defending our company from the Harmony hostile

bid. The fruits of their efforts will be reaped as we move into

the future. I also thank the Chairman and board of directors

for their valued advice and guidance throughout the year.

Ian Cockerill

Chief Executive Ofﬁcer

Chief

executive officer’s review

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Gold Fields ﬁnalised a two-year wage agreement with
unions and associations on 11 August 2005, effectively
bringing to an end the strike that commenced on
7 August 2005. We reached this settlement as part
of the industry-wide negotiations co-ordinated by the
South African Chamber of Mines. Employees returned
to work on 12 August 2005.

We have a range of cost savings and productivity
initiatives in place across all our operations through
which to mitigate upward cost pressures. Because
labour costs account for approximately 50 per cent of
total costs on the South African operations, the impact
of this salary increase on total production costs will be
approximately 3 per cent.

The settlement for the different categories of employees
ranged between 6 per cent and 7 per cent, the weighted
impact being a 6.5 per cent increase in the salary bill of
the Group’s South African operations for F2006, and
for F2007 CPIX plus 1 per cent or a minimum of 6 per
cent for the lowest paid employees, and CPIX plus 1 per
cent, or a minimum of 5.5 per cent for the rest.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

1. Ian Cockerill (51)

BSc (Geology) Hons, London, MSc (Mining), Royal School of Mines

Chief Executive Ofﬁcer

Mr Cockerill has been a director of Gold Fields since October
1999 and became chief executive ofﬁcer on 1 July 2002. He
was chief operating ofﬁcer and managing director of Gold Fields
from October 1999 to 30 June 2002. He has over 30 years of
experience in the mining industry. Prior to joining Gold Fields he
was the executive ofﬁcer for Business Development and African
International Operations for AngloGold Ashanti Limited.

2. Nick Holland (46)

B.Comm, BAcc, Witwatersrand; CA(SA)

Chief Financial Ofﬁcer

Mr Holland has been a director of Gold Fields since February 1998
and Executive director of ﬁnance since March 1998. On 15 April
2002 his title changed to chief ﬁnancial ofﬁcer. He has 25 years of
experience in ﬁnancial management. Prior to joining Gold Fields
he was ﬁnancial director and senior manager of corporate ﬁnance
of Gencor Limited. He is also a director of Rand Reﬁnery Limited,
and Teba Bank.

3. John Munro (37)

BSc (Chemical Engineering), Cape Town

Executive Vice President and Head of International Operations

On 1 September 2003, Mr Munro was appointed Executive
Vice President and Head of International Operations. Mr Munro
had previously served as Senior Vice President and Head of
International Operations, Senior Manager and General Manager
of Corporate Development for Gold Fields. Prior to that Mr Munro
served as Assistant Manager of the Property Division of Gold
Fields of South Africa Limited.

4. Craig Nelsen (53)

BA (Geology), Montana;MSc (Geology), New Mexico

Executive Vice President, Exploration

President and CEO of Gold Fields Exploration, Inc. Since April 1999,
Mr Nelsen has served as Senior Vice President of Exploration
for Gold Fields and President and Chief Executive Ofﬁcer of Gold
Fields Exploration, Inc. On 15 April 2002, Mr Nelsen’s title changed
to Executive Vice President, Exploration. Mr Nelsen was previously
Chairman and Chief Executive Ofﬁcer of Metallica Resources
Incorporated.

5. Mike Prinsloo (51)

BSc (Mining Engineering), Witwatersrand;AMP, Harvard

Executive Vice President, South African Operations

On 15 April 2002, Mr Prinsloo was appointed Executive Vice
President, South African Operations. Mr Prinsloo had served as
Managing Director of the Driefontein operation since September
2001. Mr Prinsloo was previously Managing Director and Chief
Executive Ofﬁcer of Durban Roodepoort Deep Limited. Prior
to that, Mr Prinsloo was an independent consultant to small
businesses in South Africa and a Senior Manager with AngloGold
Ashanti Limited.

Executive

committee

6. Jimmy Dowsley (47)

BSc (Mining Engineering), Witwatersrand

Senior Vice President, Corporate Development

Mr Dowsley has been General Manager of Corporate Development
at Gold Fields since March 1998. On 15 April 2002, Mr Dowsley’s
title changed to Senior Vice President, Corporate Development. Prior
to his appointment as General Manager of Corporate Development,
Mr Dowsley served as General Manager of New Business,and also
as Manager of the Mineral Economics Division of Gold Fields of
South Africa Ltd.

7. Willie Jacobsz (44)

BA, Rand Afrikaans University

Senior Vice President, Investor Relations and Corporate Affairs

On 15 April 2002, Mr Jacobsz was appointed Senior Vice President,
Investor Relations and Corporate Affairs. Since January 1998,
Mr Jacobsz had served as Manager and Senior Manager of Investor
Relations and Corporate Affairs of Gold Fields. Prior to that Mr
Jacobsz was Programme Manager of the Vulindlela Transformation
Programme for Gold Fields of South Africa Limited and Administrator
of The Gold Fields Foundation.

8. James Nkosi (54)

D.Com (Leadership in Performance and Change),M.Com (Business
Management) Rand Afrikaans University, Masters in Industrial and
Organisational Psychology, University of Cape Town

Senior Vice President, Human Resources and Transformation

On 1 July 2004, Dr Nkosi was appointed Senior Vice President,
Human Resources and Transformation. Since July 2001, Dr Nkosi
had served as Vice President Human Resources, South African
Operations, Gold Fields. Prior to that Dr Nkosi was employed by
Eskom for 12 years as an Executive Manager and at Standard Bank
as Director: Transformation for four years.

9. Terence Goodlace (46)

National Higher Diploma Metalliferous Mining;B.Comm,
Unisa; MBA, Wales

Senior Vice President, Strategic Planning

On 15 April 2002, Mr Goodlace was appointed Senior Vice President,
Strategic Planning. Mr Goodlace had previously served as Senior
Manager of Strategic Planning. During the period between June
1998 and May 2000, Mr Goodlace was the Senior Manager for
Corporate Finance for Gold Fields. Prior to that, Mr Goodlace was a
Manager at various Gencor Limited mines.

10. Paul Pretorius (35)

B Com LLB, Potchefstroom University for CHE;
LLM (Corporate Law) Rand Afrikaans University

Acting Senior Vice President, Legal Counsel

Mr Pretorius joined Gold Fields in April 1999 as Legal Advisor and
was promoted to Senior Legal Advisor on 1 July 2004. Mr. Pretorius
has been acting as Senior Vice President, Legal Counsel since
December 2004. Previously Mr Pretorius worked for the Industrial
Development Corporation for 4 years in the capacity of Legal
Advisor.

11. Cain Farrel (56)

FCIS, MBA, Southern Cross University – Australia

Company Secretary

Mr Farrel was appointed Company Secretary on 1 May 2003.
Mr Farrel is past President of the Southern African Institute of
Chartered Secretaries and Administrators. Previously, Mr Farrel
served as Senior Divisional Secretary of Anglo American Corporation
of South Africa.

11.

10.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

INTRODUCTION

The Mineral and Petroleum Resources Development Act

(Minerals Act) came into effect on 1 May 2004 and vests

the right to prospect and mine in the State. These rights are

to be administered by the government of South Africa in

order, inter alia, to promote equitable access to the nation’s

mineral resources by South Africans, to expand opportunities

for historically disadvantaged persons who wish to

participate in the South African mining industry, and to

advance social and economic development. Gold Fields

supports the objectives of the Mining Charter and the South

African government’s efforts to ensure broad-based black

economic empowerment in South Africa. Gold Fields has

provided that the objectives of the charter are included in

overall business philosophy, and accordingly, anticipates

that our new order mining rights will be issued in 2006. The

progress made on the objectives is summarised below.

GOVERNANCE

The charter sets out nine key performance areas in which

companies are expected to achieve transformation to new

order mining rights, as stipulated by the Mining and

Petroleum Resources Development Act. Gold Fields has

established a Transformation Steering Committee to

ensure the successful implementation of the broader

transformation initiatives and more speciﬁcally the

requirements of the Broad-based Socio-economic

Empowerment Charter. The chairperson is the Senior Vice

President: Head of Human Resources and Transformation.

The committee meets every quarter and its functions

include the development and maintenance of appropriate

policies to guide transformation initiatives, to determine

both qualitative and quantitative goals and objectives for

transformation, and to identify obstacles and hindrances to

effective transformation.

HUMAN RESOURCES DEVELOPMENT

The technical, behavioural and life skills competencies

required of our employees are transferred within our own

Gold Fields Limited

and the

South African mining charter

comprehensive development framework comprising the

Gold Fields Academy, Mine Education, Training and

Development Centres and approved external institutions.

Training programmes include adult basic literacy and

numeracy skills, life skills and technical training. Our

Integrated Manager System ensures that individual

leadership capabilities and the management competency

of talented HDSA candidates are identiﬁed early, and the

necessary development plans are prepared. During F2005,

89 per cent of learnerships and 77 per cent of bursaries

were awarded to HDSAs.

EMPLOYMENT EQUITY

We are also committed to creating an enabling environment

for the empowerment of HDSAs and to increase their

representation in senior management ranks to 40 per cent,

and aim to involve 10 per cent women in mining by 2009.

Since 2000, the HDSA representation has increased from

10.4 per cent to 23.3 per cent, and the percentage of

women in mining is currently 3 per cent.

MIGRANT LABOUR

We are committed to the equal treatment of all employees

and do not discriminate against foreign migrant employees.

Our South African operations employ an estimated

16,700 persons originating from the SADC region. They

enjoy the same wage structure, employee beneﬁts and

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

other conditions of employment as those received by

South African employees. They are also entitled to the same

compensation for occupational injuries and diseases and the

Gold Fields Home-based Care Programme is applicable to

them and they are entitled to the same accommodation

opportunities as their South African counterparts.

MINE COMMUNITY AND RURAL DEVELOPMENT

Through the Gold Fields Foundation, we promote and facilitate

sustainable socio-economic development in communities

where our operations are located and where our employees

and their families live. Community development projects

must support the Integrated Development Plans (IDPs), and

to this end, we have initiated a process to establish formal

structures to engage local stakeholders so as to understand

their IDPs and determine our level of participation in the

implementation of these programmes.

Agricultural development projects, similar to those

implemented in labour source areas of South Africa, are

replicated in adjoining SADC territories that provide migrant

employees on our mines.

HOUSING AND LIVING CONDITIONS

We provide accommodation and daily catering to some

26,000 employees at our South African operations. We

have embarked on a project to upgrade existing single

accommodation on mine property to family units and to

promote home ownership options for employees. We

have allocated R65 million over ﬁve years for the upgrading

of seven hostels involving reducing room densities and

improving ablution facilities. An additional R11 million over

two years has been allocated for the conversion of single

accommodation to family units.

PROCUREMENT

Gold Fields is committed to the procurement of goods and

services from HDSA enterprises. This endeavour is

commercially driven and the consideration of cost, quality,

reliability and health and safety standards will remain

essential requirements to provide the Gold Fields Group

with goods and services. For F2005, 25 per cent of a total

of R2 billion of the Gold Fields working cost and capital

material spend went to HDSA suppliers, who supplied a

cross-spectrum of goods and services including mine

supplies, repairs, on-site services and foodstuffs. Gold

Fields is a member of the South African Mining Preferential

Procurement Forum and through this forum we have been

able to access registered HDSA and SME vendors thus

increasing the HDSA procurement spend through 25% in

F2005.

OWNERSHIP AND JOINT VENTURES

The scorecard to the charter requires HDSA participation in

terms of ownership of equity or attributable units of

production of 15 per cent in HDSA hands within ﬁve years

and 26 per cent within 10 years. Gold Fields believes that it

has complied with the ﬁve year target by completing a

transaction with Mvelaphanda Resources Limited (“Mvela

Resources”) on 15 March 2004. The transaction

arrangements can be summarised as follows:

• as part of an internal restructuring completed on

23 February 2004, GFI Mining South Africa (Proprietary)

Limited (“GFIMSA”), a wholly owned subsidiary of Gold

Fields, acquired all of Gold Fields’ South African gold

mining and ancillary assets and operations, including the

Beatrix, Driefontein and Kloof operations, as going

concerns, from wholly owned subsidiaries of Gold

Fields. In order to fund its acquisition of these assets,

GFIMSA received a loan from Mvelaphanda Gold

(Proprietary) Limited (“Mvela Gold”), a wholly owned

subsidiary of Mvela Resources, for a capital amount of

R4,139 million. The entire R4,139 million loan (“GFIMSA

loan”) was applied by GFIMSA towards partial settlement

of the consideration payable by it for the aforesaid South

African gold mining and ancillary assets and operations

pursuant to the internal restructure;

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

• the GFIMSA loan will be repaid and the proceeds of such

loan repayment must be applied by Mvela Gold in

consideration for the subscription by Mvela Gold of 15 per

cent of the issued share capital of GFIMSA (“GFIMSA

shares”) within a period of ﬁve years following the date on

which the loan was advanced, namely 17 March 2004.

The inevitable consequence of this transaction is that Mvela

Gold will acquire a 15 per cent ownership interest in GFIMSA

by means of a subscription for shares for cash at a

subscription price of R4,139 million on the date upon which

the GFIMSA loan is repaid or, at Mvela Gold’s election, on

the date upon which the GFIMSA loan becomes repayable.

BENEFICIATION

Growth of the South African jewellery manufacturing

industry is currently constrained, inter alia, by the absence

of cost-competitive credit facilities for the affordable and

secure ﬁnancing of gold in process. The high cost and

volatile price of gold does not make it viable for gold

jewellery manufacturers to own the gold used in the

jewellery manufacturing process or tied up in jewellery

stock. Gold Fields, AngloGold Ashanti, SAAB and Standard

Bank of South Africa established a gold advance scheme

in order to facilitate the provision of secure and cost

effective advances of gold to the South African gold

jewellery manufacturing industry. The scheme will initially

cover up to 1,000 kilograms of gold available to be advanced

to participating gold jewellery manufacturers. Gold Fields,

AngloGold Ashanti and SAAB will facilitate the advances of

gold by providing collateral support for such gold advances

in the form of guarantees. The maximum aggregate

amount for which Gold Fields could be liable in respect of

guarantees provided by it under the scheme is R17 million.

The parties have executed the agreements to establish the

scheme in March 2005.

Gold Fields Limited and the

South African mining charter

(continued)

REPORTING

Progress towards achievement of our charter objectives is

reported in annual reports to the Department of Minerals

and Energy, quarterly reports and are posted on our

website goldﬁelds.co.za.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Gold Fields

South African operations

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

2.82 million

ounces

“With area mined increasing by 2 per cent

to 2.05 million square metres, and an overall

improvement in grade, South African gold

production increased from 2.80 million ounces

(F2004) to 2.82 milion ounces (F2005).”

Project 100

completed

“Project 100 yields saving of R140 million,

40 per cent above target. Project 100+ initiated

to achieve ongoing and sustainable cost savings

across South African operations.”

Review of operations

South Africa

The South African
operations delivered
a creditable operating
performance against our
strategy of repositioning
the operations, while at
the same time accelerating
the development of ore
reserves at all key shafts,
and maintaining a strong
focus on cost reduction.

OPERATIONAL PERFORMANCE

F2005 proved a difﬁcult year for our South African mining

operations notwithstanding the appreciable increase in the

average dollar gold price from US$386 per ounce in F2004

to US$422 per ounce in F2005. Unfortunately, much of this

beneﬁt was offset by the rand strengthening against the

US dollar from an average of R6.90 to R6.21 over the same

period. While our US dollar assets (Tarkwa and Damang)

beneﬁted from the gold price increase, our South African

assets earned 2 per cent less in rand terms at R84,175 per

kilogram than in F2004. However, the rand gold price

increased to above R90,000 per kilogram by year-end,

boding well for future increased proﬁtability. Despite this

tough economic environment, the South African operations

delivered a creditable operating performance against our

strategy of repositioning the operations from the

“Wal-Mart” strategy to the “Saks Fifth Avenue” strategy,

while at the same time accelerating the development of

3.5 -

3.0 -

2.5 -

2.0 -

1.5 -

1.0 -

0.5 -

0 -

South Africa

gold production

(Moz)

80,000 -

70,000 -

60,000 -

50,000 -

40,000 -

30,000 -

20,000 -

10,000 -

0 -

South Africa

total cash costs

(R/kg)

ore reserves at all key shafts, and maintaining a strong

focus on cost reduction.

PROJECT 500 DELIVERING RESULTS

Project 500, a project that was introduced to support this

switch in strategy has been successfully implemented.

Project 500 consists of two sub-projects: Project 400 and

Project 100. The beneﬁ ts of these projects are clearly

reﬂ ected in the numbers achieved for the year and we

expect further momentum from them during F2006.

Project 400 is aimed at optimising revenue by generating

an additional R400 million per annum on an ongoing basis.

This is achieved by eliminating non-contributing production

and at the same time reducing low-grade surface outputs

in favour of higher margin underground material. This

strategy has started to deliver with the underground yields

at the South African operations improving year-on-year

from 7.1 to 7.4 grams a ton at similar mining volumes,

while surface tonnage has been managed down to

4.4 million tons, a decrease of over 20 per cent. Area

mined also increased 2 per cent from 2.01 million square

metres to 2.05 million square metres during the year. This,

together with the improvement in grade, resulted in South

African gold production increasing from 2.8 million ounces

in F2004 to 2.82 million ounces in F2005.

One of the most notable achievements of F2005 was the

good cost control exercised at all operations. Operating

costs improved marginally to R6.66 billion despite increased

production , higher steel and fuel costs, and wage increases

exceeding the rate of inﬂ ation. This translated into a 1 per

cent drop in total cash costs of production from R73,626 per

kilogram to R72,830 per kilogram. These cost improvements

are attributable largely to the savings achieved through

Project 100 and improvements in productivity. More details

on all of the cost saving initiatives, including Project 100,

Project 100+ and Project Beyond can be found in the

Management Discussion and Analysis section on

page 119.

PRODUCTIVITY – NEXT MAJOR INITIATIVE

Productivity improvement is the next major focus of the

South African operations. Steady progress was recorded

during F2005 and we have set ourselves a productivity

improvement target of 10 per cent per annum to achieve a

50 per cent improvement by the end of 2009.

The increase in area mined, together with a reduction in

total employee costed, has improved productivity from

3.7 m

/TEC* (square metres per total employee costed) to

3.9 m

/TEC* in F2005. This represents an appreciable

5 per cent improvement over the previous year.

Plans to improve productivity will focus on the following

initiatives:

• Skills development, including the training of rock drill

operators, miners, shift bosses and mine overseers;

• Improving performance management by ensuring high

quality supervision and enhanced teambuilding. Incentive

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Operating

profit split F2005

(Rm)

555

167

Driefontein

Kloof

Beatrix

Gold

production split F2005

(Moz)

1,037

1,163

Beatrix

Driefontein

Kloof

624

Average productivity for the years F2004 and F2005.

schemes will be evaluated to ensure they deliver the

desired results;

• Identiﬁcation and removal of bottlenecks in the system

through the application of the theory of constraints

and through proper lost blast management and corrective

action programmes;

• Footprint reduction through the rationalisation of

metallurgical plant, shaft and other surface and

underground infrastructure; and

• Reduction of major breakdowns, undertaking further

plant modernisation and optimisation, implementation

of appropriate technology and the completion of Project

28.5°C, a major refrigeration and ventilation project to

improve environmental conditions underground.

INFRASTRUCTURE

The optimisation of Driefontein 1 and 2 plants is underway.

To ensure that the objectives of Project 28.5°C are met, all

mines will focus on completing the ventilation and

refrigeration improvements and changeovers by early 2006.

EXPLORATION DRILLING

Exploration and resource deﬁnition diamond drilling is

planned at all the South African operations. Speciﬁc focus

will be placed on improving conﬁdence in the multiple band

Carbon Leader model below 50 level at Driefontein, reﬁning

the Ventersdorp Contact Reef grade trends in the Kloof

Extension Area, and increased resolution in the

Kalkoenkrans Reef and Beatrix.

CAPITAL EXPENDITURE REPRIORITISED

The South African operations have had to curtail and reprioritise

all capital expenditure. ”A” type items/projects (critical capital

expenditure) have been included in the F2006 budget while

others have been deferred until economically justiﬁable. The

same process has been followed with all replacement and

renewal items. Capital expenditure, therefore, is planned at

R740 million for F2006 compared with R636 million during

F2005.

Outlook

/ Overall gold output for F2006 is expected to

remain at current levels. Cost performance will continue to

remain critical with total cash costs targeted at or below

R70,000 per kilogram.

The Driefontein grade will remain a challenge as the

Ventersdorp Contact Reef (VCR) volumes reduce at the older

shafts while, at newer shaft systems, the Carbon Leader

contribution at relatively lower values mined is increased.

Mining mix and the associated build-up at 5 and 1 shafts on

the Carbon Leader reef will be key to Driefontein going

forward. Furthermore, the high-margin surface rock dump

material grades for F2006 are expected to be lower and as

the old gold clean up at the 1 and 2 plants comes to an end.

At Kloof, there has been a continued shift in mined grade

from previous years. Less of the lower grade Kloof and

Middelvlei Reefs have been mined with the focus shifting

to increase VCR pillar mining at higher grades. The build-up

of production in these pillar areas and at 4 shaft, will be a

major focus for Kloof over the next ﬁnancial year.

Development rates will also be increased to improve ore

reserve ﬂexibility.

The mining strategy at Beatrix remains largely unchanged

but with a heightened focus on accelerating the North

section build-up, on improving the South section grades

and improving the quality of mining and the mining mix

across all shafts. Mining will be reduced at the South

section’s marginal areas with these crews moving to the

North and West sections. Layouts are being reviewed at

West Section in order to overcome the issues on stability

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Review

of operations

South Africa

(continued)

of access ways resulting from the presence of smectite

below the reef horizon.

Kloof and Beatrix have largely stopped surface rock dump

treatment with the closure of the Kloof 3 plant and half of

the circuit at the Beatrix West section. Our strategy of

improved quality volume will continue in F2006 and

together with a strong focus on cost containment operating

margins should improve.

The generation of reserves is still crucial to the future of

the South African operations with the long-life shafts

targeting 24 months of mineable ore reserve and other

shafts at least 12 months. Accordingly, increased on-reef

and footwall development is planned.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Driefontein

Gold Mine

OPERATIONAL PERFORMANCE

During a year which presented many challenges,

Driefontein posted a sound performance with a 2 per cent

increase in gold output to 1.16 million ounces. The

improvement was attributed to a 4 per cent increase in

tonnage milled at a marginally lower yield year-on-year.

This was accomplished in an environment of poor local

metal pricing and the large-scale repositioning of the

operations away from lower grade areas. Underground

yields improved from 8.1 to 8.3 grams per ton.

In line with the focus on margins, higher grade mining areas

required re-equipping and opening up before mining could

commence. Notwithstanding these additional expenses, cash

costs were reduced by 4 per cent year-on-year to R65,876 per

kilogram due to both the increased gold production and cost

reduction initiatives. In US dollar terms, cash costs posted for

F2005 amounted to US$330 per ounce.

Performance during F2005 was affected by a number of

factors, the most serious being increased levels of

seismicity. 2 shaft was affected by an event that tragically

claimed the lives of ﬁve of our colleagues for which we

2005:

review

•

Fatality rate decreases by 23 per cent

•

Productivity increased by 10 per cent

•

Underground gold production increased
by 5 per cent

•

Project 500 produced positive effect on
both costs and productivity

•

Seismic activity resulted in regular
production delays

•

Repositioning operations to meet strong
rand environment largely completed

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Review

of operations

South Africa

(continued)

Driefontein established a record by

being the ﬁrst gold mine in the

world to produce one hundred

million ounces of gold. Established

in 1952, Driefontein’s achievement

demonstrates the quality of

Gold Fields’ suite of assets.

1,400 -

1,200 -

1,000 -

800 -

600 -

400 -

200 -

0 -

Driefontein

gold production

(’000oz)

express our deepest regret while 1, 4, 5 and 6 shafts

suffered lost production and infrastructural damage.

5 shaft however, has presented improved production

performances in the latter part of the year. The refrigeration

plants were commissioned during the year, improving

underground temperatures and logistic and ore ﬂows.

1 shaft posted particularly strong performances while the

relatively lower grade 7 shaft produced a spectacular

turnaround, generating an operating proﬁt of R90 million.

4 shaft has started to show encouraging improvements

under new management and is set to return good results

in F2006. 8 shaft also presented strong production and

ﬁnancial results for the year.

6 shaft has not performed to expectation and has required

re-assessment, with improved returns expected within the

ﬁrst half of F2006.

Project 500 initiatives are well-entrenched and delivering

good results. Measures being implemented to improve

productivity include the institution of:

• improved supervisory skills,

• capacity building in operational teams,

• better alignment of incentive schemes.

As planned, capital expenditure for the year was signiﬁcantly

lower than during the previous year at R184.1 million, due

to the lower rand gold price received.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

2005

2004

2003

2002

2001

Main development

27.8

†

30.0

35.7

33.6

38.3

Area mined

’000m

661

626

732

698

750

Productivity

/TEC*

3.2

2.9

3.5

3.2

3.5

Tons milled

Underground

’000

3,794

3,709

3,898

3,770

3,889

Surface

’000

2,900

2,729

2,472

2,817

2,662

Total

’000

6,694

6,438

6,370

6,587

6,551

Yield

Underground

g/t

8.3

8.1

8.4

9.4

Surface

g/t

1.6

2.0

2.3

2.1

Combined

g/t

5.4

5.5

6.0

6.3

6.4

Gold produced

Underground

31,650

30,156

32,886

35,431

36,459

Surface

4,512

5,338

5,630

5,832

5,572

Total

36,162

35,494

38,516

41,263

42,031

Total

’000oz

1,163

1,141

1,238

1,327

1,351

Operating costs

Underground

R/ton

609

639

580

554

494

Surface

R/ton

Total

R/ton

371

397

380

342

309

Gold sold

36,162

35,494

39,238

40,541

42,031

Total cash costs

US$/oz

330

311

202

158

184

R/kg

65,876

68,922

58,841

51,153

45,064

Net earnings

289.7

436.7

725.4

877.5

413.0

US$m

46.7

63.3

80.0

87.2

54.3

Capital expenditure

184.1

238.3

572.8

475.2

456.3

US$m

29.6

34.5

63.2

47.2

60.0

*TEC = total employee costed

†

Marginal Main Reef at West Section stopped

OUTLOOK FOR F2006

Underground ore production is planned to increase by

11 per cent, as the reliance on mineralised surface rock

dumps will be reduced. 2 and 6 shafts have been

repositioned to post stronger performances during F2006.

Gold production should remain ﬂat at 1.18 million ounces

with costs impacted by local inﬂationary pressures.

We will continue to maintain a strong focus on costs during

the new ﬁnancial year. Total cash costs will be limited to

below R68,000 per kilogram.

The Driefontein Depth Extension project to access the

Carbon Leader horizon below 50 level in the 5 sub vertical

shaft area provides positive returns at current rand gold

prices. An underground drilling programme has been

initiated to conﬁrm gold grades and ore body structure.

Capital expenditure is planned at R280 million for F2006.

The major portion of this capital will be spent on: 1 tertiary

shaft pumping infrastructure which will be commissioned

in the third quarter of F2006; the completion of the

refrigeration and reticulation projects at 5 sub vertical shaft;

and the 4 shaft pillar extraction.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Review

of operations

South Africa

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Kloof

Gold Mine

OPERATIONAL PERFORMANCE

Kloof maintained its one million ounces per annum status

and was able to contain costs against the background of a

volatile rand per kilogram price environment during F2005.

All mine safety indicators were much improved. The day

lost frequency rate of 17.35 per million man hours worked

represents a 13 per cent annual improvement and the

serious injury frequency rate of 7.90 per million man hours

worked is a 20 per cent improvement year-on-year. The fatal

injury frequency rate of 0.28, although still unacceptable, is

an improvement of 32 per cent on last year. During the ﬁrst

half of F2005, Kloof achieved one million fatality-free shifts.

Management intervention brought about the

implementation of a number of proactive initiatives to

alleviate the effects of the lower and volatile rand gold

price. A review of the mine management structure resulted

in all underground operations being placed under the

control of one Senior Manager: Operations to facilitate

improvements in productivity and the reduction of the

overhead cost structure.

To secure throughput and improve efﬁciency, a strong

focus was placed on shifting people from support services

2005:

review

•

Signiﬁcant improvement in safety
performance

•

Gold production above 1 million ounces
on the back of improved productivity

•

Earnings impacted by the rand gold price
and operational difﬁculty during second
half of the year

•

Rand per kilogram total cash costs well
contained at R75,693 per kilogram

1,200 -

1,000 -

800 -

600 -

400 -

200 -

0 -

Kloof

gold production

(’000oz)

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

to revenue-generating activities. A comprehensive

team-based training strategy has been initiated to improve

the knowledge and skills base of mining teams, supported

by a balanced performance management system. The

initiative to improve operational efﬁciencies delivered a

6 per cent improvement in square metres per total

employee costed for the year, and the implementation of

the Kloof productivity strategy will further enhance this

drive on an ongoing basis.

The treatment of low-grade surface stockpile material at

3 plant was stopped at the end of the third quarter due to

lower values and the weak rand gold price. Stoping and

development operations in marginal areas at 1 sub-vertical

shaft and 8 shaft were also reduced in line with the focus

on quality volume and primary reef horizons in a lower

price environment.

Gold production was ﬂat year-on-year at 1,037 million

ounces (32,258 kilograms).

Yield was adversely impacted during the last quarter due

to lower mining values resulting from a greater than

forecast change in the slope/terrace topography of the

Ventersdorp Contact Reef (VCR) primarily at 7 shaft and

8 shaft. However, underground yield for the year improved

by 1 per cent to 9.1 grams per ton. Grade management

systems were reviewed to highlight areas of concern and

action taken included focusing on improved quality

volumes; better control on mining mix; better ore body

structure modelling and grade predictions, increasing the

ﬂexibility at 4 shaft, accelerated pillar mining and old gold

recovery, increasing key development on all shafts.

The opening-up of marginal areas was scaled down to

counter the effect of the lower gold price resulting in

2005

2004

2003

2002

2001

Main development

36.1

†

43.9

49.8

44.4

50.5

Area mined

’000m

623

611

655

549

627

Productivity

/TEC*

3.4

3.2

3.0

3.1

Tons milled

Underground

’000

3,471

3,452

3,727

3,222

3,493

Surface

’000

1,184

1,531

1,111

1,435

439

Total

’000

4,655

4,983

4,838

4,657

3,932

Yield

Underground

g/t

9.1

9.0

9.3

10.4

10.7

Surface

g/t

0.7

0.8

0.7

0.6

0.9

Combined

g/t

6.9

6.5

7.3

7.4

9.6

Gold produced

Underground

31,474

31,089

34,634

33,365

37,283

Surface

784

1,184

830

871

375

Total

32,258

32,273

35,464

34,236

37,658

Total

’000oz

1,037

1,038

1,140

1,101

1,211

Operating costs

Underground

R/ton

710

709

606

637

572

Surface

R/ton

Total

R/ton

546

509

482

444

511

Gold sold

32,258

32,273

35,523

34,177

37,658

Total cash costs

US$/oz

379

341

215

179

207

R/kg

75,693

75,645

62,757

57,833

50,702

Net earnings/(loss)

(60.3)

5.8

600.7

601.5

222.5

US$m

(9.7)

0.8

66.2

59.8

29.2

Capital expenditure

230.1

344.4

419.7

337.2

344.2

US$m

37.1

49.9

46.3

33.5

45.2

*TEC = total employee costed

†

The Kloof and Middelvlei Main Reef marginal areas stopped

Review

of operations

South Africa

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

development at 33.9 kilometres being 23 per cent lower

than the previous years. The production build-up at 4 shaft

was below expectation, although volumes improved by

year-end. The surface and underground bulk air-cooling

facilities at 4 shaft were commissioned in the second half

of the year, resulting in improved environmental conditions

at the rock face. General infrastructure improvements

were also implemented at this shaft.

Total cash costs at R75,693 per kilogram (US$379 per

ounce) was ﬂat year-on-year. The reduction of volume from

marginal areas, strict cost controls and the effective

implementation of Project 100 were the key drivers in

containing costs. However, operating margins remained

under presssure due to the lower rand gold price, lower

mining values and consequent yield during the second half

of F2005. Margins for the ﬁrst half of F2005 were at 9 per

cent, reducing to 3 per cent in the second half.

Capital expenditure at R230 million was 33 per cent lower

than the previous year and reﬂects a more appropriate

response to the economic effects of the lower rand gold

price. The major capital expenditure related to ventilation,

refrigeration and general infrastructure at 4 shaft. The

curtailment and deferment of capital expenditure was

rigorously reviewed to ensure it did not impede future

development.

OUTLOOK FOR F2006

Kloof is set to increase production marginally to 1.1 million

ounces at total cash costs of R71,000 per kilogram. The key

focus areas for Kloof will be improving underground volumes

and grade through increasing face advance by 1.0 metre per

month. Increased development is planned to ensure that ore

reserve generation targets are met and that capital

programmes remain on track. The 1 shaft pillar project

development has started and is set to deliver higher grade

face length within two years.

Savings will result from footprint reduction initiatives,

speciﬁcally the closing of the older 5 shaft, 6 shaft and

9 sub-vertical shaft. The implementation of a more effective

and efﬁcient water pumping strategy via 10 shaft will also

contribute to savings. In addition, the feasibility of

optimising metallurgical capacity into a more efﬁcient

processing plant is under investigation. This, coupled with

a migration of mining activities towards the newer shafts,

demonstrates a potential for operating cost reduction over

the next few years.

Capital expenditure for F2006 will remain largely unchanged

at R230 million. The major portion of this expenditure

relates to the 1 shaft pillar development and shaft

infrastructure projects; the 3 shaft Drop Down development,

10 shaft pumping infrastructure and the 4 sub-vertical

shaft project.

The Kloof Extension Area (KEA) surface drilling programme

was completed during F2005 and coupled with the

3D seismic survey carried out in F2004, has resulted in

revised geological and evaluation models. These models

have been used in a complete re-scoping and re-engineering

of the KEA project to a pre-feasibility level. The new mine

design and schedule incorporates a new decline access

system between 43 and 48 levels, to exploit 1.9 million

ounces of gold. It is planned to complete the feasibility

study by the second quarter of F2006.

Similarly, revisions have been made to the Eastern

Boundary Area (EBA) geological and evaluation models.

These revisions were made after the completion of the

EBA surface drilling programme, a comprehensive

3D seismic survey and a thorough analysis of the VCR

palaeomorphology. The surface and sub-vertical shaft

access and mining system planned during the F2004

pre-feasibility study will need to be re-engineered and

costed to determine economic feasibility in the new area

of interest. The pre-feasibility estimate reported for F2004

indicated a capital requirement of R7.1 billion to exploit a

potential 10.9 million ounces in the EBA.

Resource and reserve revisions have been made for both

the above projects and are detailed in the Mineral

Resources and Ore Reserves section on page 63.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Review of operations

South Africa

(continued)

Beatrix Gold Mine

OPERATIONAL PERFORMANCE

Beatrix continued to produce gold at acceptable volumes

yet at elevated costs in an extremely volatile price

environment during F2005.

The mine recorded excellent safety statistics during F2005,

achieving the milestone of three million fatality-free shifts.

In addition, all safety objectives were exceeded and the

mine reported its best safety performance in ﬁve years.

RESTRUCTURING

A number of proactive strategies were implemented to

mitigate the negative impact on revenue caused by the

lower than planned gold price.

In September 2004, the mine completed a restructuring

exercise to improve operational efﬁciencies, and increase and

improve short interval control, coupled with overhead cost

reductions. The mine now has three operational sections:

• North section (comprising 3 shaft and 1 shaft below

16 level)

2005:

review

•

Excellent safety performance during

F2005, achieving the three million fatality-

free shift milestone

•

Rand gold prices and volatility continued

to affect proﬁtability

•

Turnaround in the second half of F2005

resulted in improved quality with overall

gold production remaining constant

•

Investment made to improve logistics at

West Shaft

•

Treatment of low-grade surface material

suspended due to the low rand gold price

received

700 -

600 -

500 -

400 -

300 -

200 -

100 -

0 -

Beatrix

gold production

(’000oz)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

• South section (comprising 2 shaft and 1 shaft above

16 level)

• West section (4 shaft).

This initiative was supported by the centralisation of a

number of ancillary services, ongoing reduction of

overheads, mine footprint and a signiﬁcant reduction in

surface tonnage processing as a result of lower rock dump

grades and the low gold price.

In January 2005, all surface material processing was

stopped. Stoping and development volumes were also

marginally reduced in line with the focus on quality mining

with the reduction of volumes from low-grade areas.

The mine call factor (MCF) which was lower than historic

averages for the ﬁrst half of 2005, showed signiﬁcant

improvement in the last ﬁve months of F2005 as a result

of the implementation of new cycle mining practices

coupled with the introduction of dry sweepings

methodologies.

Overall year-on-year gold production was ﬂat at

624,000 ounces. Overall yield increased from 3.6 grams

per ton in the previous year to 4.6 grams per ton as a result

of an improved MCF in the second half of the year, a 4 per

cent increase in underground mined grades, and a 77 per

cent reduction in surface tonnage processed.

2005

2004

2003

2002

2001

Main development

38.4

†

43.5

46.2

36.0

39.0

Area mined

’000m

763

778

792

740

718

Productivity

/TEC*

5.7

5.7

5.8

5.5

Tons milled

Underground

’000

3,852

4,025

4,053

3,633

3,395

Surface

’000

329

1,423

669

482

276

Total

’000

4,181

5,448

4,722

4,115

3,671

Yield

Underground

g/t

5.0

4.6

4.9

5.5

5.9

Surface

g/t

0.8

0.7

0.9

1.0

0.7

Combined

g/t

4.6

3.6

4.3

4.9

5.5

Gold produced

Underground

19,139

18,451

19,909

19,886

19,937

Surface

279

986

579

481

189

Total

19,418

19,437

20,488

20,367

20,126

Total

’000oz

624

625

659

655

647

Operating costs

Underground

R/ton

421

381

350

325

310

Surface

R/ton

Total

R/ton

390

291

305

290

287

Gold sold

19,418

19,437

20,488

20,367

20,126

Total cash costs

US$/oz

406

356

229

173

207

R/kg

81,023

78,865

66,907

55,894

50,621

Net earnings/(loss)

(149.1)

(353.8)

257.4

697.7

(1,432.5)

US$m

(24.0)

(51.3)

28.4

69.4

(188.2)

Capital expenditure

221.4

295.1

373.7

215.4

148.7

US$m

35.7

42.8

41.2

21.4

19.5

*TEC = total employee costed

†

Marginal development at the South section stopped

F2005 includes an impairment charge of R60 million, F2004 includes an impairment charge of R426 million

Development was 12 per cent down on the previous year

at 38.4 kilometres as non-critical development in the lower

grade areas was either stopped or re-scheduled to offset

the lower gold price.

The production build-up at 3 shaft and the overall

performance of the North section continued to make

progress, while development and stoping volumes were in

line with expectations.

At the South section, stoping volumes were below target

thereby placing pressure on gold production and proﬁtability

at this section. Signiﬁcant focus on the elimination of low-

grade volumes has been effected to reposition this shaft.

The West section continued with its repositioning strategy for

long-term sustainability. Stoping and development, coupled

with underground exploration drilling programmes, continued

to deﬁne and support the higher grade of zone 5 area.

Between August 2004 and June 2005, a detailed logistical

upgrade programme was completed at the West section to

ensure improved logistical support for future zone 5 mining.

This project included the development of inter-level tips and

improved haulage track work and ventilation conditions.

Access haulage layouts and design are being reviewed to

improve the stability of the access ways into the stoping

horizon in the long term. The presence of smectite below the

reef horizon impacted negatively on tunnel stability which

affected the volumes coming out of zone 5.

Total cash costs were contained below inﬂation with a

marginal year-on-year increase of less than 3 per cent to

R81,023 per kilogram (US$406 per ounce) due to strict

cost controls and the effective implementation of the cost-

saving initiatives which formed part of Project 500.

Operating margins were impacted by the lower gold price

received over the period and the low MCF achieved during

the ﬁrst half of the year. The North, South and West

operating sections were, however, well-positioned to

contribute to operating proﬁt by absorbing their direct and

production overhead costs within this low price environment.

Capital expenditure during F2005 reduced by 25 per cent

to R221.4 million during F2005 (F2004: R295 million). This

expenditure reﬂects prudent cash management within a

low gold price regime. The major project expenditure

remained the completion of the North section infrastructure

and ancillary works. All capital investment has been reviewed

and rescheduled to ensure that the capital expenditure

programmes do not impact negatively on future production.

OUTLOOK FOR F2006

Beatrix is expected to increase production slightly at a

total cash cost of R74,000 per kilogram depending on the

volume and grade achieved at the new zone 5 in the West

section. During F2006, the mine will most likely continue

to operate within the volatile revenue and difﬁcult cost

environment experienced during F2005. To achieve these

targets, ongoing attention and focus will be on cost

reductions, improved efﬁciencies and the optimisation of

resources through attention to quality mining.

Development volumes will remain high to ensure stoping

ﬂexibility and sustained grades across all sections.

Improved volumes and grades are anticipated from the

West section as increased volumes are derived from the

zone 5 area. The impact of smectite at the West section is

being mitigated with short-term layout adjustments to

facilitate rock removal and access.

Beatrix’s cost control system has been complemented by

the addition of an area proﬁt optimisation model through

detailed infrastructure mapping, which will enable it to

optimise the cost and revenue basis.

Capital expenditure is expected to remain at similar levels

to F2005 at between R200 million and R250 million for the

next two years while the North section project is being

completed.

Review

of operations

South Africa

(continued)

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Gold Fields

international operations

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Review

of operations

International

The year’s most signiﬁcant

achievements were the

completion of the Tarkwa

expansion project and the

construction of the new

mill at St Ives.

OPERATIONAL REVIEW

Our international operations have delivered a very strong

overall performance with total gold production at

1.66 million ounces, an increase of 4 per cent over F2004.

Total cash costs for the international operations were

US$273 per ounce, 9 per cent above the previous year,

reﬂecting the higher costs at Damang and St Ives.

Apart from making a very signiﬁcant contribution to the

Group’s proﬁts against the background of the strong rand,

the Group’s international division’s, most signiﬁcant

achievement for the year was the successful completion

of the Tarkwa and St Ives expansion projects.

With the exception of St Ives, which was dogged by open

pit grade issues, and slow ramp up in the productivity of its

new underground mines, all other operations produced

1,800 -

1,600 -

1,200 -

1,000 -

800 -

600 -

400 -

200 -

0 -

International

gold production

(’000 ozs)

300 -

250 -

200 -

150 -

100 -

50 -

0 -

International

total cash costs

(US$/oz)

Record gold

production and

operating proﬁt

“Our international operations have delivered

a very strong overall performance with total

gold production at 1.66 million ounces, an

increase of 4 per cent over F2004.”

Good progress

on Cerro

Corona project

“Final feasibility studies are due for completion

in the ﬁrst quarter F2006 and though the

capital bill remains under pressure, a positive

outcome is still anticipated.”

excellent operational and ﬁ nancial performances. Agnew,

our smallest and previously most marginal mine, completed

the turnaround that started last year and in the ﬁ nal quarter

of the year returned operating margins in excess of 100 per

cent. The Damang mine, previously one of the strongest

performers in the international group, exhausted the high

margin Damang pit in the ﬁ rst half of the year, but made a

successful transition to a number of new smaller pits albeit

at lower margins. Tarkwa undoubtedly delivered the best

performance in the company for the year. Apart from the

new mill project and the conversion to owner mining

delivering results in excess of expectation, the heap leach

operations continued the incremental growth seen in

previous years, achieving record throughput.

The effect of the global surge in commodity prices was felt

during the second half of the ﬁ nancial year. Prices of

processing consumables have risen in excess of 20 per

cent while the cost of diesel has increased by over 30 per

cent through the ﬁ nancial year. In Australia, the stronger

Australian dollar (A$) has cushioned these effects, while in

Ghana, the Tarkwa mine has been able to offset the

increased diesel prices through efﬁ ciencies in the new

mining ﬂ eet. In the early stages of these increases, all

operations initiated optimisation exercises aimed at margin

enhancement, focusing particularly on supply chain and

consumption management, and enhanced mining

equipment and human resource productivity.

Not all of these initiatives are expected to provide relief from

cost pressures but are rather intended to secure the supply

of critical commodities, such as haul truck tyres, where a

severe global supply shortage is being experienced.

As diesel fuel constitutes approximately 12 per cent of our

Ghanaian mines operating costs, a decision was taken to

hedge their diesel price exposure for one year. The hedge

was executed in the fourth quarter of F2005 and removes

our direct exposure to global diesel price moves above

US$0.45 per litre which equates to a global oil price of

about US$56 per barrel.

The retention, development and advancement of our

people remained a key imperative at all our international

operations where we can presently boast the strongest

pool of well-trained and experienced professionals and

managers we have ever had. New strategies on retention

are continuously adopted to protect this key asset.

The Australian labour market remains of critical concern, as

the growth of the iron ore and base metal mining industries

aggressively attracts operators and professional skills from

the gold mining industry. Salaries are being ratcheted to

higher levels and in some instances the remuneration of

equipment operators competes with that of senior

managers. Ultimately, this trend risks marginalising

Australia as a mining destination particularly when

commodity prices retrace from the current bull market.

Operating proﬁ t for the international operations was

relatively unchanged year-on-year at US$250 million,

constituting approximately 68 per cent of Gold Fields’ total

operating proﬁ t. The international group incurred total

capital expenditure of US$222 million approximately 40 per

cent of which was expended on the expansion projects at

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

St Ives and Tarkwa with the balance invested in new mine

development at the Australian operations and leach pad

construction at Tarkwa.

Community relationships continued to receive a high level

of attention at all operations and projects around the world.

Of particular signiﬁcance was the progress made in Peru in

generating local community support for the development

of the Cerro Corona project. In Ghana, community

relationships remained strong, in particular the expansion

of the Damang mine outside of its previously limited

footprint was achieved without incident.

On the project development front, F2005 was a challenging

year. The Arctic Platinum Project moved into its ﬁnal phase

of assessment but following negative movement of a

number of key parameters and ﬁnancial drivers it was

concluded that, in the prevailing market, the project would

not be viable. Accordingly, development efforts were

signiﬁcantly scaled back and the options of mothballing

and holding the project or vending some or all of our stake

to a suitably positioned company were being considered at

year-end.

While signiﬁcant delays were experienced in progressing

the Cerro Corona project early in the year, by year-end the

project had made excellent progress on the social, technical

and ﬁnancial feasibility fronts and is positioned for an

investment decision by December 2005. Community

relationships were initially affected by regional unrest

associated with a nearby mining project but disturbances

were also experienced on the Cerro Corona site as well.

Through protracted engagement, strong community

support for the project has been created and the ofﬁcial

permitting-related hearing held in July 2005 was attended

by 2,500 people. The level of community support and

demand for this project is regarded as a critical

counterbalance to the sociopolitical challenges that have

beset the Peruvian mining industry through the the last

12 months. Permitting is due for completion in November

2005. Final feasibility studies are due in the ﬁrst quarter of

F2006 and though the capital bill remains under pressure a

positive outcome is still anticipated.

The exploration efforts at the various international mines

continued with good results at Agnew and Damang but

with a disappointing discovery at St Ives. Damang and

Agnew, which had both faced the most critical need for

discovery, achieved ore reserve growth of 56 per cent and

21 per cent respectively. Minesite exploration spend for

the year was US$16.5 million.

OUTLOOK

Consolidated gold production is planned to increase by

approximately 10 per cent in F2006, reﬂecting a full

year’s contribution from the expansions at St Ives and

Tarkwa. Agnew will also marginally increase production

on the back of greater volumes of ore from the new

Songvang open pit, while Damang production will decline

some 10 per cent on the back of generally lower

grades.

Total cash costs are expected to be stable year-on-year

with gains at St Ives offset by higher costs at Tarkwa and

Damang. Tarkwa’s cost increases are primarily attributable

to anticipated higher maintenance costs on the new ﬂeet,

as well as input cost increases referred to earlier.

F2006 will see a particular focus on operational optimisation

and cost containment. With the major expansions now in

place at Tarkwa and St Ives, it is essential to exploit every

opportunity from our capital investments, while

endeavouring to manage the external cost pressures.

Capital expenditure on operating mines will decline to

about 50 per cent of the level seen in F2005, given the

completion of the expansion projects while sustaining

capital on open pit stripping, underground decline

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Review

of operations

International

(continued)

development and leach pad expansions will continue at the

various mines.

Regarding project development, the focus will move away

from Arctic Platinum to Cerro Corona and Essakane. At

Cerro Corona in Peru, we expect to reach an acquisition

and project go-ahead decision before mid-F2006. At

Essakane, in Burkina Faso, a pre-feasibility study is due by

the end of the ﬁrst half of F2006 as the platform for moving

to a feasibility study thereafter. Assuming all commercial

and logistical aspects remain on track, the timeline

suggests project outcomes by the end of F2006 at the

earliest. Activity at Arctic Platinum will be scaled back to a

holding pattern.

Mine site exploration is planned at US$25 million for F2006,

of which over 90 per cent will be spent in Australia and the

balance at Damang gold mine.

The international group is very well set to continue its

signiﬁcant contribution to the proﬁts of the company and

to continue unlocking the full potential inherent in the high

quality properties we hold. The company remains intent on

growing the international operations by 1.5 million ounces

by 2009 and has already delivered nearly 300,000 ounces

of this growth through the completed expansion projects.

The decline of Arctic Platinum prospects as a serious

near-term growth option was a setback for achieving this

target but a range of alternative opportunities that could

replace Arctic Platinum are in the pipeline. In particular

organic growth, exploration projects and regional

consolidation remain highest on our agenda, while the

search for accretive acquisitions remains a priority.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Tarkwa

Gold Mine

OPERATIONAL PERFORMANCE

Tarkwa delivered an outstanding performance, both

operationally and ﬁnancially, producing 35 per cent of Group

operating proﬁt and 55 per cent of net operating earnings.

Gold production increased by 23 per cent to 676,800 ounces,

making Tarkwa the largest gold producer in Ghana.

The conversion to owner mining was completed at the end of

the ﬁrst quarter of F2005 and proceeded extremely smoothly

in all respects. The services of African Mineral Sources (AMS),

the former contractor miner, which had been retained as

back-up for the ﬁrst quarter, were terminated at the beginning

of the second quarter. The ﬂeet’s operational efﬁciencies

achieved or exceeded all planned criteria resulting in record

tonnages being mined. Much of the growth in diesel and

other mining consumables prices through the year was

absorbed by improvement in the productivity of the ﬂeet as it

was ramped up.

With the commissioning of the new mill demand for ore

increased from 16 million tons per annum to 20 million

tons per annum. This was achieved while still maintaining

a stripping ratio of 3.27, in excess of the planned 2.8,

2005:

review

•

Excellent execution of the US$160 million
expansion project

•

Gold production increased with the CIL
plant coming on stream ahead of schedule

•

Very smooth conversion to owner mining
and out-performance of the ﬂeet

•

Signiﬁcant ﬁnancial contribution to the
Group

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Review

of operations

International

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

(F2004: 2.6). In F2005 the mine moved approximately

82.5 million tons, a 35 per cent increase on the previous

year. Total ore treated was 19.6 million tons at an average

head grade of 1.25 grams per ton.

Heap leach processing operations performed well during the

year, achieving a moderate increase in throughput to

16.4 million tons (F2004: 16 million tons). Compared with

550,000 ounces in F2004, 526,200 ounces were produced

from the pads during F2005, a good performance despite the

head grade to the pads dropping from 1.43 grams per ton in

the previous year to 1.25 grams per ton this year as the higher

grade ores were directed to the CIL plant. The surge in global

commodity prices affected processing operations with the

signiﬁcant increases in the price of cyanide and cement

impacting processing costs, particularly towards the end of

the ﬁnancial year. These commodities have shown 20 to 25

per cent price increases during the year and have added

roughly US$10 per ounce to heap leach processing costs.

The new mill was commissioned two months ahead of

schedule and has performed exceptionally well

metallurgically, with recoveries exceeding 97 per cent and

indicated capacity likely to be approximately 10 to 15 per cent

higher than the 4.2 million tons per annum nameplate.

3.2 million tons of ore were processed through the mill at an

average head grade of 1.7 grams per ton producing

150,600 ounces.

Unit cost management remained a feature of Tarkwa during

F2005, despite the demanding commissioning activities and

high margins. However, increased waste stripping, cyanide

and cement consumption at higher prices, and increased

steel prices, together with planned overall lower grades,

2005

2004

2003

2002

Open pit mining

Waste mined

’000t

63,170

43,987

27,521

28,986

Ore mined

’000t

19,301

17,164

16,067

14,630

Head grade

g/t

1.3

1.4

1.5

1.6

Strip ratio

W:O

3.3

2.6

1.7

2.0

Processing

Tons processed

Milled

’000t

3,189

—

Heap Leach

’000t

16,444

16,000

15,210

14,914

Total

’000t

19,633

16,000

15,210

14,914

Yield

Milled

g/t

1.5

—

Heap Leach

g/t

1.0

1.1

Combined

g/t

1.1

1.1

Gold produced

Milled

4,685

—

Heap Leach

16,366

17,107

16,792

16,920

Total

21,051

17,107

16,792

16,920

Total

’000oz

677

550

540

544

Total cash costs

US$/oz

234

230

194

171

Net attributable earnings

304.0

212.7

223.0

240.5

US$m

48.9

30.8

24.6

23.9

Capital expenditure

469.6

943.4

207.4

80.5

US$m

75.6

136.7

22.9

8.0

offset the beneﬁts of the expansion project and resulted in

total cash costs remaining ﬂat at US$234 per ounce compared

with US$230 per ounce in F2004. With a gold price of

US$425 per ounce received for the year (F2004: US$388 per

ounce) Tarkwa produced an operating proﬁt of US$129 million

in F2005, 49 per cent higher than the previous year.

Capital spend at Tarkwa for F2005 was US$76 million.

US$42 million of this was spent on the completion of the CIL

plant and the owner mining conversion. The expansion

projects were completed within 10 per cent of the planned

US$160 million budget, with the US$10 million foreign

exchange exposure contributing to the bulk of the overrun.

This foreign exchange exposure was in respect of equipment

and services sourced in South African rands and Australian

dollars. This exposure was consciously undertaken as Gold

Fields had a natural hedge to this by funding the capital from

South Africa in terms of the South African foreign exchange

allowances for companies investing in African countries.

OUTLOOK FOR F2006

F2006 is planned as a year of consolidation for Tarkwa,

following seven years of aggressive expansion from a

3.5 million tons per annum ore production rate in 1998 to

over 20 million tons per annum in 2005.

The focus on operational consolidation is essential given

the considerable capital investment in the site over the last

two years. Similarly, the opportunity to optimise operations

must be taken. We believe the mill has an additional 20 per

cent capacity beyond its nameplate, while the mining ﬂeet

continues to offer promising volume opportunities. The

widely reported global boom in input costs, such as diesel,

cyanide and steel remains a concern and operating counter-

strategies initiated in F2005 need to be augmented. These

initiatives range from supply chain and procurement

optimisation to projects to enhance consumption, utilisation

and productivity.

In addition to the cost pressures referred to earlier, most of

the mining ﬂeet is more than a year old and maintenance

costs will increase signiﬁcantly in terms of the outsourced

maintenance and repair contracts with the original

equipment suppliers.

The total tonnage mined and treated will be similar to

F2005, allowing for increased mill run time through the

year. Volumes and margin also should be similar to those

of the second half of F2005.

While these pressures are of concern, Tarkwa is well

positioned to counter them, following the plant and

systems investments of the last three years. The new

mining ﬂeet continues to offer productivity opportunities

while state of the art ﬂeet information and management

systems create a solid platform for realising this. The three

process plants at Tarkwa are simple and efﬁcient, providing

a base for further cost containment and production

growth.

Capital expenditure will reduce by 50 per cent to

US$36 million, with the bulk of the spend allocated to

ongoing leach pad extensions.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Review

of operations

International

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Damang Gold Mine

OPERATIONAL PERFORMANCE

During the ﬁrst half of F2005, Damang continued the

strong operational and ﬁnancial performance achieved in

F2004. Total cash costs over this period were between

US$220 per ounce and US$240 per ounce and the mine

made a signiﬁcant contribution to the Group’s operating

proﬁt. While mining and processing rates exceeded

expectation, they accelerated the depletion of the high

grade and high margin ores in the main Damang pit and the

second half of the year saw a move in total cash costs to

around US$350 per ounce, and a decline in quarterly gold

production of approximately 15 per cent.

The impact of the depletion of the Damang pit had been

recognised some time ago and various alternative ore

sources were identiﬁed over the past two years. As part of

these, the Damang Extension Project was approved at

mid-year, allowing commencement of the new satellite

pits at Amoanda, Rex and Tomento. These pits will be

mined over the next two years and treated along with

stockpiles of low-grade ores.

2005:

review

•

Steady operational performance

•

Mining of satellite pits commenced

•

Damang pit cutback approved at a capital
cost of US$44 million

•

Five-year life secured with the discovery
of nearly 1 Moz

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Signiﬁcant ore production was achieved from Amoanda in

the ﬁnal quarter of the year, while the pre-stripping of

Tomento commenced after year-end. The grades of the

ores treated through the year declined from around

1.6 grams per ton in the ﬁrst half to 1.5 grams per ton in

the second half due to treating lower grade stockpile

material which replaced the higher grade Damang pit ore.

During F2005, Damang mined over 11.5 million tons of ore

and waste, and treated some 5.2 million tons of ore.

Gold production of 248,000 ounces was in line with

expectations, but down from the F2004 high of

308,000 ounces due to mining in the Damang pit

terminating mid-year. While total cash costs for the year

averaged US$282 per ounce, the depletion of the

higher grade ore sources caused total cash costs to

increase to over US$340 per ounce during the second half

of the year. Unit cash costs are expected to remain at this

level for at least the next two years. Operating proﬁt for

the year decreased to US$36 million from US$53 million in

F2004.

Damang has more than exceeded production and proﬁt

expectations since its acquisition and has returned more

than twice the US$42 million acquisition price paid in free

cashﬂow. Damang has made a good start in developing

alternative sources of ore following the depletion of the

current cutback of the Damang pit and will need to continue

doing so. Our company’s experience from both Tarkwa and

the Australian operations is being leveraged to this end.

During the second half of F2005, the new Amoanda

hydrothermal pit was brought into production. While the

opening of alternative ore sources is signiﬁcant from a

discovery and production perspective, the resettlement of

some 255 people affected by the Amoanda pit, and the

development of the associated infrastructure without

incident is testimony to the high quality of our mines’

community relations in Ghana. With operations now

expanding beyond the original mine footprint, community

and mine interactions will remain key focus areas. In total,

these new projects will require the resettlement of some

284 households.

2005

2004

2003

2002*

Open pit mining

Waste mined

’000t

8,193

9,855

13,928

5,437

Ore mined

’000t

3,393

5,439

4,457

2,402

Head grade

g/t

1.62

2.02

2.11

2.34

Strip ratio

W:O

2.4

1.8

3.1

2.3

Processing

Tons milled

’000t

5,215

5,236

4,877

1,951

Yield

g/t

1.5

1.8

1.9

2.3

Gold produced

7,703

9,589

9,305

4,397

’000oz

248

308

299

141

Total cash costs

US$/oz

282

222

243

200

Net attributable earnings

83.0

170.4

91.8

64.3

US$

13.4

24.7

10.1

5.9

Capital expenditure

65.9

22.0

14.4

5.5

US$

10.6

3.2

1.6

0.5

*Results for the five months ended June 2002

Review of operations

International

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Capital expenditure for the year was US$10.6 million.

US$4 million was spent on the development of the satellite

pits, US$2.5 million on the Damang pit drilling and feasibility

study and US$2 million on exploration. During the year,

exploration focused on opening up the new satellite

projects, exploring the extensions at Tomento and

Amoanda, as well as further assessment of the underground

mining opportunity at Abosso Deeps. A pre-feasibility study

on this new opportunity is due early in calendar 2006.

Mining activities in the main Damang pit ended in the

middle of F2005. An extensive drilling programme was

undertaken on both the eastern perimeter and within the

Damang pit, which has proven the continuity of the ore

body down-dip. A subsequent feasibility study indicated

the viability of a cutback to the existing pit on both the

eastern and western walls which will yield some

620,000 additional ounces. The mining of the cutback at a

capital cost of US$44 million, will commence in F2006,

with mining in both F2006 and F2007 focused mainly on

removing the waste overburden.

OUTLOOK FOR F2006

Head grades, gold production and thus proﬁts and unit

costs during F2006 are expected to be similar to those

recorded in the second half of F2005. This reﬂects the

reliance on low-grade sources of ores from the new

Amoanda and Tomento pits and low-grade stockpiles

replacing high-grade ores from the currently depleted

Damang pit. These new ore sources also require substantial

increases in mining volume from 11.5 million tons in F2005

to over 16.7 million tons in F2006, with strip ratios

increasing from 2.4 to over 4.6.

These volumes exclude the commencement of mining of

the new Damang pit cutback where an additional 9.5 million

tons of waste will be moved during F2006 and the costs

thereof capitalised. Mining volumes have already been

increased accordingly and are ramping up well.

Exploration and project development efforts will continue

to focus on optimising and extending the life of Damang,

using the window provided by the exploitation of the

satellite pits and the Damang cutback. Options include:

• Extensions to existing satellite pits (Tomento, Amoanda,

Rex and Lima) and the evaluation of new targets such as

Nyame;

• The feasibility study of Abosso underground to be

completed during the year; and

• Testing new regional targets.

Exploration over the last few years has added in excess of

ﬁve years of life and nearly one million ounces to reserves

of this mine at the satellite pits and the Damang cutback.

The development of the Damang cutback will provide

signiﬁcant time to develop further opportunities in the

lease area and in the region. The mine team is well

equipped and suited to this challenge, leveraging off Gold

Fields’ experience and expertise acquired through its

Australian operations, where the nature of mine discovery

and development is similar.

Capital expenditure at Damang is planned at US$24 million,

with US$20 million being earmarked for the pre-stripping

of waste at the Damang pit cutback, US$2 million for the

continued development of the satellite pits and

US$1.3 million on exploration.

St Ives

Gold Mine

OPERATIONAL PERFORMANCE

F2005 was a challenging year for St Ives. The Mars open

pit, which was the primary source of open pit ore for this

mine, experienced signiﬁcant grade problems and while

new underground operations at Argo and East Repulse

were ramped up to ﬁll the production shortfall, these mines

were slow to achieve planned productivities and margins.

The open pit geological model issues were corrected by

mid-year but they had a signiﬁcant negative impact on

production and unit costs, along with poor margins on the

new underground mines.

Notwithstanding a poor start, underground operations

were turned around during the year, ﬁnishing with a strong

second half. East Repulse ramped up in the ﬁrst half of the

year while the Conqueror development was accelerated in

the second half. Production at Junction was successfully

extended by six months, delivering strong cash ﬂow, and

the Sirius operations were completed by mid-year.

Following a number of mine design changes resulting from

the geological complexity of the ore body, Argo showed

improvement during the third quarter and met projections

for the fourth quarter. As anticipated, the underground

2005:

review

•

New A$125 million Lefroy mill project
completed

•

Leviathan underground commenced
production

•

Underground production of 2.13 million
tons yielding 351,000 ounces

•

Open pit production of 3.74 million tons
yielding 176,000 ounces

•

Operational optimisation realising value

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Review of operations

International

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

mining costs peaked during the year but by year-end were

reducing to sustainable levels for the long-term.

Open pit mine planning was revised during the ﬁrst half of

the year following the underperformance of the Mars pit,

and the newly-discovered extensions to Agamemnon were

opened in the second half. While the pits delivered planned

ore volumes of some 3.7 million tons, the grade at

1.8 grams per ton was 27 per cent behind plan, reﬂecting

ore modelling and grade control issues brought about by

the geology being more complex than originally understood.

Although cost per ton mined was below plan, open pit

mining cost per ounce was signiﬁcantly above plan because

of the grade problems.

The new Lefroy mill was successfully commissioned in

February 2005, within the A$125 million budget. The crushing

and grinding sections of the new plant have performed

exceptionally well thus far, achieving design capacity in the

third quarter and exceeding it in the fourth quarter. Operations

of the gold recovery sections were hampered by materials-

handling problems and deﬁciencies of some construction

materials. Although recovery was below plan for the ﬁrst

several months of operation, improvements to the gravity

and carbon circuits progressed in the fourth quarter with

recoveries improving by year-end.

St Ives’s total gold production was 527,000 ounces, 3 per

cent lower than F2004, due to open pit ore grades being

2005

2004

2003

2002*

Open pit mining
Waste mined

’000t

23,701

11,693

21,040

22,768

Ore mined

’000t

3,738

4,000

4,607

1,753

Head grade

g/t

1.79

2.22

2.91

3.82

Strip ratio

W:O

6.34

5.26

4.94

6.67

Underground mining
Ore mined

’000t

2,134

1,618

541

310

Head grade

g/t

5.52

5.34

8.28

9.29

Processing
Tons processed

Milled

’000t

4,052

4,318

3,344

2,035

Heap Leach

’000t

2,280

2,426

2,142

1,363

Total

’000t

6,332

6,744

5,486

3,398

Yield

Milled

g/t

3.7

3.6

4.3

4.7

Heap Leach

g/t

0.6

0.5

0.7

Combined

g/t

2.6

2.5

2.9

3.1

Gold produced

Milled

15,107

15,570

14,481

9,649

Heap Leach

1,286

1,307

1,485

953

Total

16,393

16,877

15,966

10,602

Total

’000oz

527

543

513

341

Total cash costs

A$/oz

447

416

323

302

US$/oz

336

297

188

160

Net earnings – Total Australia

151.1

304.5

567.3

556.6

US$m

24.3

44.1

62.5

50.2

Capital expenditure

636.0

755.4

464.5

231.3

US$m

102.4

109.5

51.2

20.9

*For the period seven months ended June 2002

As a significant portion of the acquisition price was allocated to tenements of St Ives and Agnew on endowment ounces and also as
these two Australian operations are entitled to transfer and then offset losses from one company to another, it is not meaningful to
split the income statement below operating profit

lower than planned. Total cash costs increased beyond the

F2004’s level by 7 per cent to A$447 per ounce. This

primarily reﬂects the combination of poor open pit grades,

low underground productivities and, to a lesser degree,

high processing costs associated with the ramp down of

the old mill and initial operations of the new Lefroy mill. The

combination of these two factors led to an operating proﬁt

of some A$60 million, a decrease of 12 per cent on F2004.

The underperformance of margin and grade at St Ives

prompted the adoption of a number of ongoing initiatives:

• On-site cost optimisation and manpower rationalisation;

• Underground mining cost controls with maintenance and

productivity initiatives;

• Quality control in ore deposit modelling and mining; and

• A local and global procurement project (Project Bullion).

Capital expenditure for the year was A$137 million of which

A$62 million reﬂects the cost of the new mill, with the balance

being predominantly mine development and exploration.

Exploration efforts during the year were focused on both

expanding existing mining complexes, such as Argo,

Leviathan, Cave Rocks and the Lake pits, and early stage

projects in areas such as Condenser, Intrepid and the

Boulder/Lefroy and Magnetite corridors. Although ore

reserve additions for the total mine were disappointing,

some exciting new early-stage projects emerged that

indicate new resources and reserves. Total ore reserves

declined by 0.55 million ounces, net of 0.63 million ounces

of depletion. This decline primarily reﬂects a reduction in

the reserves at Argo underground mine, where additional

inﬁll exploration and remodelling of the depth extensions

resulted in a revised geological and grade model.

OUTLOOK F2006

Gold production is expected to increase approximately

10 per cent over F2005, while total cash costs are forecast

to improve substantially as a result of the less costly milling

operation, improvements in underground mining costs and

a number of other site-wide optimisation initiatives.

A near term target for total cash costs below A$400 per

ounce has been set for this operation. While this level was

not achieved in the fourth quarter of F2005, underlying

operational and cost performance indicates this is now

achievable. Beyond this, total cash costs in the mid-

A$300 per ounce are still the target for St Ives. This

requires strong control of underground productivities and

the achievement of open pit grades.

Operational performance is based on the premise that

4.9 million tons will be treated through the new mill. Heap

leach operations will be maintained at 2.4 million tons and

fed largely from low-grade stockpiles. Underground ore

production is planned at 1.8 million tons. Volumes are

expected to be slightly lower than F2005, reﬂecting the

closure of the Junction underground mine, stable

operations at Argo and the development of the Conqueror

mine at Leviathan. Open pit operations still present the

greatest risk from a grade perspective, with in excess of

75 per cent of open pit ore production to be sourced from

Mars which will be mining in the higher grade areas.

However, grade reconciliation over the last several months

of F2005 was excellent. Options to develop alternative

open pit ore sources in the event of grade issues arising in

the future are being evaluated.

Capital expenditure will reduce to approximately

A$62 million, or A$104 per ounce. A$25 million is

earmarked for exploration, with the bulk of the balance

being projected for open pit and underground mine

development (Argo and Conqueror underground and

Thunderer open pit).

Exploration will receive greater focus on early stage targets

than in the past three years. A number of key target areas

have been generated out of the F2005 greenﬁelds

programme. Expenditures will be split one-third on early

stage exploration and two-thirds on expansion and

conversion of existing resources.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Review of operations

International

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Agnew

Gold Mine

OPERATIONAL PERFORMANCE

During the year under review, Agnew consolidated the

growth of its current operations and its longer term outlook.

Agnew increased gold production by 5 per cent to

212,500 ounces, with total cash costs of A$310 per ounce

compared to A$317 per ounce in F2004. As a result, the

mine made a contribution of A$53 million in operating

proﬁt to the Group. After two challenging years in F2002

and F2003, and a turnaround in F2004, this ﬁnancial year

consolidates Agnew’s growth proﬁle with the initiation of

two major mines, Songvang and Main Lode.

The most signiﬁcant contribution to Agnew’s performance

came from the Kim underground mine, which produced

ore tonnage 50 per cent above expectation. Ore zones

have tended to be thicker than planned and were

successfully exploited by a continuously improving mining

team. The Main Lode, which is also located within the

Waroonga Complex, commenced production during F2005

and contributed an additional 7,000 ounces.

2005:

review

•

Record production of 212,500 ounces

•

Total cash cost reduction to A$310 per
ounce

•

Two new deposits commenced
production – Songvang and Main Lode

•

Successful exploration programme –
resource growth to over 3 million ounces

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

The Crusader/Deliverer complex ceased mining in

December 2004, yielding some 16,000 ounces, whilst also

developing an exploration decline to a position adjacent to

the Claudius ore body. Diamond drilling has been completed

and an evaluation of the Claudius ore body is under way.

The Songvang open pit commenced production during the

year, three months later than planned with access to its

high grades also being achieved later than planned. Initial

pit operations were severely hampered by shortages of

haul-truck and excavator operators due to the boom in the

iron ore, copper and nickel industries, signiﬁcantly diverting

resources from the gold industry. It is expected that the

overall resultant shortfall will be recovered during F2006.

The commissioning of the Songvang open pit has resulted

in the production of a base load of medium grade ores

which, along with the high grade ores from the Waroonga

underground complex, should provide this mine an assured

four-year life before alternative ore sources are required.

Capital expenditure of A$44 million was incurred in the

year. In addition to mine site exploration, the development

of Kim, Main Zone, and the Songvang open pit were the

major investments.

Innovative exploration around the Redeemer, Waroonga

and Crusader complexes has produced ore grade

intersections that in virtually all cases justify further

exploration. Exploration on Agnew’s regional tenements

has also identiﬁed signiﬁcant targets with encouraging

early drill results. The most signiﬁcant development,

however, was the discovery of extensions to the Kim lode

in an offset and up-thrown position. This will extend Kim’s

life in excess of two years, thereby sustaining this critical

source of high margin production. Agnew’s total reserves

have been increased to 861,000 ounces, the highest level

since its acquisition.

2005

2004

2003

2002*

Open pit mining

Waste mined

’000t

12,217

—

3,937

8,981

Ore mined

’000t

448

1,627

818

Head grade

g/t

2.22

2.92

2.03

2.18

Strip ratio

W:O

27.26

—

2.42

10.98

Underground mining

Ore mined

’000t

486

431

253

175

Head grade

g/t

12.07

12.81

9.94

7.45

Processing

Tons milled

’000t

1,170

1,179

1,268

682

Yield

g/t

5.6

5.3

3.5

3.8

Gold produced

6,609

6,267

4,466

2,569

’000oz

213

202

144

Total cash costs

US$/oz

233

226

255

232

A$/oz

310

317

437

434

Capital expenditure

206.2

120.8

164.9

122.0

US$m

33.2

17.5

18.2

11.0

*For period seven months ended June 2002

Review

of operations

International

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

OUTLOOK FOR F2006

Gold production for F2006 is expected to increase by

approximately 8 per cent with a marginal increase in total

cash costs. This increased production reﬂects the greater

ore volumes from Main Lode underground mine and the

Songvang open pit. The increase in total cash costs is due

to a greater proportion of ore being sourced from the Main

Lode underground mine and the Songvang open pit instead

of Kim underground.

Capital expenditure at Agnew will decrease to A$22 million,

as most of Songvang’s stripping was completed in F2005.

The underground development of the Kim and Main Lodes

will account to A$14 million. Exploration at A$7.5 million

will continue to focus on resource and reserve expansion

but will also have a greenﬁelds component.

A number of ongoing initiatives will be maintained during

F2006 to limit costs and retain the high margins Agnew

generated during F2004 and F2005, notwithstanding

increasing input costs. These initiatives include: striving for

increased quality across the operation, revamping the

business partner’s key performance initiatives, pursuing

innovation-driven savings, embracing breakthrough

concepts, committing to global procurement, and ongoing

focus on major cost and efﬁciency determinants.

While operations in F2006 will focus on the established

complexes at Waroonga and Songvang, opportunities at

deposits such as Claudius underground, the New Woman

open pit, Vivien underground deposit and Rajah

underground Lode, may be brought to production to the

extent they are proven during the year, thereby increasing

ﬂexibility on the mine.

Agnew is no longer mine constrained mainly due to the

production proﬁle of the Songvang open pit, and it is more

ﬂexible because of having multiple ore sources. Both the

Kim and Main Lode declines are expected to reach ore

reserve bottoms during the year. Additional reserves are

likely to be developed down-dip, resulting in the deepening

of both declines.

Because of the resilient ore reserves and pipeline of

projects, together with the mill constraint, work is under

way to assess the options to expand Agnew’s processing

capacity.

An agreement on the Miranda and Vivien tenement

packages has been reached with Breakaway Resources

Limited (BRW), joint venture partner of Gold Fields’ Agnew

mine, whereby Gold Fields and BRW will exchange certain

rights to gold and base metals. The agreement, which is

expected to be ﬁnalised in the ﬁrst quarter of F2006, will

result in Agnew becoming the owner of the Vivien and

most of the Miranda ground, and having 100 per cent

rights to the gold, including the 195,000 ounce Vivien

deposit and a 2 per cent net smelter royalty (NSR) on any

base metal production by BRW on the Miranda tenement.

BRW will retain all base metal rights and become the

registered holder of the four small northern tenements in

the Miranda package. The addition and control of this

extensive exploration ground adjoining the north and south

of the existing Agnew tenements, in addition to the

Vivienne resource, creates further opportunities for Agnew

in the district.

CERRO CORONA

The Cerro Corona deposit lies within the Hualgayoc District,

north of the Yanacocha mine in the Cajamarca Department

of Peru. In December of 2003, Gold Fields obtained the

option to acquire the Cerro Corona gold-copper Porphyry

Project.

Through this last year, Gold Fields has successfully

advanced a number of key Project development activities

relating to this acquisition from Sociedad Minera La Cima

S.A. in Peru. These include geological and resource

modelling, permitting, social engagement, detailed Project

engineering, and surface mine optimisation studies.

The greatest Project challenge and, indeed, success was

experienced on the social front. Community relationships

had been tense through the latter part of F2004 and early

F2005, with discontent around the Project area being

fuelled by signiﬁcant regional unrest related to other mining

operations. Overall, this led to a six-month delay in the

Project schedule. However, extensive interactions with all

the local communities and regional stakeholders,

culminated in an agreement around land access and

alignment on a way forward for the various parties. These

extensive interactions have laid the foundation for a very

strong relationship between the local communities and the

Project, based on trust and mutual cooperation.

The sporadic social unrest that has beset the Peruvian

mining industry is clearly cause for concern. However, the

strength of the relationships created mitigate against this

signiﬁcantly, as local communities are most likely to

determine the course of this Project. The Environmental

Impact Assessment (“EIA”) was presented to the Peruvian

Ministry of Energy and Mines in May 2005. The ofﬁcial

Cerro Corona Project public hearing, required as part of the

permitting process, was held at the end of F2005, in the

town of Hualgayoc, located two kilometres from the Project

site. This important meeting was attended by around

Developing

projects

2,500 people, representing a range of stakeholders from

local communities to regional parties and regulators. The

hearing was peaceful and the overall tone demonstrated a

high level of support for the Project and, indeed, demand

for it to proceed.

In April 2005, Norwest Corporation, Denver, completed an

updated and improved resource model for the deposit. This

estimate has been classiﬁed according to guidelines set out

in the Canadian National Instrument 43-101 (“NI 43-101”).

In early 2005, Gold Fields appointed Hatch Engineering in

Santiago, to generate operating and capital cost estimates

to within 10 per cent accuracy. Based on these operating

cost estimates, and using Norwest’s resource model and

metal prices of US$450 per ounce for gold and US$1.00 per

pound for copper, Gold Fields estimates that the recoverable

sulphide Mineral Resources are 3.58 million ounces gold at

0.9 grams per ton and 1,327 million pounds copper at

0.5 per cent. It is estimated that 4.8 million tons of the

oxide ore is amenable to heap leaching at an in situ grade of

1.6 grams per ton gold. There are ongoing metallurgical

studies and discussions with external parties regarding

processing and the sale of gold from the oxide mineralisation,

which geologically caps the deposit.

Cerro Corona Mineral Resources (including Ore

Reserves) within a US$450 per ounce of gold and

US$1.00 per pound copper pit shell.

—

Resource

(Mt)

(g/t)

(%)

Resource

Gold

(‘000 ozs)

Resource

Copper

(M. lbs)

Total Measured

Oxide

2.0

1.6

—

101

—

Sulphide

27.5

1.1

0.6

943

360

Total Indicated

Oxide

2.8

1.6

—

145

—

Sulphide

93.3

0.9

0.5

2,613

958

Total Measured
and Indicated

Oxide

4.8

1.6

—

245

—

Sulphide

120.8

0.9

0.5

3,555

1,318

Total Inferred

Oxide

—

Sulphide

1.0

0.8

0.4

Combined

Oxide

4.8

1.6

—

245

—

121.9

0.9

0.5

3,582

1,327

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

At metal prices of US$375 per ounce for gold and

US$0.90 per pound for copper, the revised Proved and

Probable Reserves for the Project are 90.6 million tons at

an average grade of 1.0 gram per ton gold and 0.5 per cent

copper, all located within a single surface mine at an average

strip ratio of 0.83:1. Ores will be treated in a conventional

sulphide ﬂotation concentrator producing a high quality

copper concentrate with signiﬁcant gold grades for

treatment at offshore custom smelters.

The Project will deliver a ﬁfteen year mine life at the planned

ore mining and treatment rate of 6.2 million tons per annum,

treating some 2.9 million ounces of gold and 1,068 million

pounds of copper over this period, or 5.5 million ounces of

gold equivalent. Production rates will achieve steady state

at approximately 350,000 to 400,000 ounces of gold

equivalent per year. Life of mine average total cash costs

are estimated at US$250 per ounce on a gold equivalent

basis. All gold equivalent ﬁgures are calculated using the

reserve prices mentioned above.

Completion of the feasibility study is at an advanced stage and

results are due for release at the end of ﬁrst quarter F2006.

Discussion with a number of smelters have also progressed

well. Regulatory permitting may be concluded by November

2005, followed thereafter with a ﬁnal Project commitment

being made before the end of the 2005 calendar year.

Cerro Corona Ore Reserves at US$375 per ounce and

US$0.90 per pound

Sulphide only

Reserve

(Mt)

Au*

(g/t)

Cu*

(%)

Reserve

Gold

(‘000oz)

Reserve

Copper

(M.lbs)

Proved

23.7

1.1

0.6

871

332

Probable

66.9

1.0

0.5

2,057

737

Grand total

90.6

1.0

0.5

2,928

1,068

Diluted average head grade

Cerro Corona has now reached a stage where Gold Fields has

included, for the ﬁrst time, the Reserve numbers to the total

Ore Reserves declared for F2005. Copper has been included

in the totals as gold equivalent ounces.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Developing

projects

(continued)

ARCTIC PLATINUM

The Arctic Platinum Project (APP) is located in Northern

Finland. The Suhanko Project is located approximately

60 kilometres south of the town of Rovaniemi, on the Arctic

Circle in northern Finland. The feasibility study for the

Suhanko Project was completed during the F2005 March

quarter and, owing to a combination of unfavourable factors,

Gold Fields decided at the end of the quarter that it would

postpone the proposed large-scale open pit mine, but would

continue looking at smaller scale, high-margin projects and

offers from third parties. Factors which contributed to this

decision included:

• A revision in the expected head grade to below 1.9 grams

per ton 2PGE+Au, against previous estimates in excess

of 2.0 grams per ton.

• A signiﬁcant increase in the capital expenditure required

to bring this project to production. The increase reﬂects

strengthening of the euro and also a dramatic increase in

input costs associated with commodities such as steel,

copper and the core services associated with mining

projects.

• The shift in global base metal concentrate markets in

favour of smelters.

• The negative medium term outlook for the Palladium

market.

During the year the environmental permit application was

submitted to the Northern Oulu Permitting Authority and

several site meetings were held with representatives of the

authority and the public. The area to be covered by the

mining lease application has been ﬁnalised and the

application submitted to the Ministry of Trade and Industry.

Exploration drilling to evaluate near vertical high-grade

structures at Konttijarvi and Ahmavaara continued to mid-

April 2005. These structures were previously poorly identiﬁed

by diamond drilling, which was oriented sub-parallel to these

structures. At Konttijarvi, geological modelling of the new

data in the study area increased the grade from 2.25 grams

per ton to 2.55 grams per ton 2PGE+Au, an overall grade

enhancement of 13 per cent. The drilling programme clearly

identiﬁed steep geological structures averaging 3.0 grams

per ton 2PGE+Au with associated elevated Cu grades. PGE

and Cu enriched mineralised structures were also identiﬁed

at Ahmavaara but the overall grade enhancement in this area

is smaller than that observed at Konttijarvi.

A decision regarding mothballing and holding this project or

vending some or all of our 100 per cent interest to a suitably

positioned company will be made early in F2006.

The total Mineral Resource as at 31 December 2004 is

presented in the table below. There was no further work on

the SK Reef and the Mineral Resources remain unchanged

from June 2004 pending the completion of ongoing resource

deﬁnition work and resolution on the district potential.

Tons

(Mt)

Grade

2PGE + Au (g/t)

Metal

2PGE + Au (’000 oz)

Measured

38.6

2.34

2,907

Indicated

54.0

2.03

3,522

Inferred

75.7

2.54

6,173

Total APP

168.3

2.33

12,601

Snowden Mining Industry Consultants undertook the F2004 Mineral Resource estimation study in conjunction with Arctic Platinum and the estimate is classiﬁed in accordance with the JORC code. SRK (Johannesburg) undertook the estimation for part of the SK Reef Resources.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

It is a strategic objective of Gold Fields to add 1.5 million

ounces per annum to its international production proﬁle by

the end of 2009. This would have a twofold effect: growing

Gold Fields Reserve and production proﬁle, and balancing its

international risk proﬁle. Gold Fields still remain aggressively

committed to this strategy and have progressed well

towards this objective with completed expansion projects at

Tarkwa and St Ives and the possible development of Cerro

Corona expected to deliver approximately 500,000 additional

ounces per annum. The second major development project,

APP, was put on hold due to increased capital and operating

costs, and currency effects.

The Exploration Division has responded to the robust

market conditions by disposing of assets and equity

positions that do not match our investment criteria. This

resulted in net proceeds to Gold Fields during F2005 of

over US$25 million, allowing us to realise gains and

rebalance our portfolio. Some of the larger dispositions

included the sale of the Angelina joint venture in Chile to

our partner Meridian Gold Corporation; a market-based

sale of our equity interest in Fujian Mining Company; and

an agreement to allow Committee Bay Resources to spend

the next $10 million in exploration expenditures allowing

Gold Fields the option of converting its joint venture

interest into an equity position. We are also currently

considering allowing a partner to invest in the Kisenge

project in the southern Democratic Republic of the Congo

following encouraging initial drilling results.

Our strategic objectives in the short term are focused on

acquisitions of either advanced projects or development

stage companies. However, ﬁnding such investments that

ﬁt our value criteria could prove to be a difﬁcult task in the

current gold market. This could entail moves into politically

risky countries where the market currently undervalues

assets, or recognising further exploration potential on

existing projects. We remain fully committed to aggressive

brownﬁelds investment near our operating assets, value-

adding acquisitions and greenﬁelds exploration either

through junior company equity alliances, or on independent

projects in selected gold belts around the world. During

the year, we invested approximately US$65 million in

exploration projects and drilled in excess of 250,000 metres.

OTHER PROJECTS

The exploration strategy of funding junior exploration

companies via equity with the concomitant right to joint

venture key projects, has again proved extremely beneﬁcial

during F2005. Acquiring stock in a rising gold market has

proved an effective way to fund costs associated with

exploration deals. This strategy also helps to mitigate the

start-up costs in new countries. Updates on the most

signiﬁcant of these projects are presented below.

ESSAKANE PROJECT

The Essakane gold project is situated in Burkina Faso, West

Africa, 330 kilometres north east of Ouagadougou. Gold

Fields, through its subsidiary, Orogen Holding (BVI), acquired

50 per cent of the Project in June 2005 by reaching an

aggregate exploration expenditure of US$8 million at Essakane.

In terms of the Option Agreement with Orezone Resources

Inc., Gold Fields now has the right to acquire a 60 per cent

share of the joint venture by completing a bankable feasibility

study. As a precursor to this study, Gold Fields is currently

undertaking a pre-feasibility study (“PFS”) for the development

of a surface mine and a CIL plant at Essakane. This study is

based on an interim Resource update of the Essakane Main

Zone (“EMZ”), which was completed in May 2005. This

interim model, based on a US$450 pit shell, returns a Resource

of 45 million tons at an average diluted grade of 1.75 grams

per ton, containing 2.5 million ounces of gold. Gold Fields will

ﬁnalise a new and extended PFS resource model encompassing

all assay results up to September 2005 by the end of 2005.

The JORC classiﬁed EMZ Mineral Resource at a 1 gram per

ton cut off is 2.2 million ounces from 34.9 million tons at an

Exploration

and

new business development

average 2 grams per ton gold and is classiﬁed as per the
table below.

ESSAKANE MINERAL RESOURCES

Classiﬁcation

Tons

(Mt)

Grade

(g/t)

Gold

(‘000oz)

Measured

—

Indicated

30.5

2.0

1,910

Inferred

4.4

2.0

290

Total

34.9

2.0

2,200

The current project development focus is on mine, plant,

and infrastructure engineering, as well as social,

environmental and water supply issues. The ﬁnal PFS

study will contain overall costs and project economics to

an accuracy of approximately 25 per cent and is scheduled

to be completed by mid F2006.

The EMZ is hosted by veined and altered Birimian

metasediments in a north-west trending anticline which

subcrops below shallow laterite and alluvial cover for a

lateral distance of 10,000 metres. Gold is typically

associated with quartz-carbonate veining in a distinctive

lithology called the Main Arenite Unit. The EMZ is located

in the central part of the Essakane deposit and extends for

2,000 metres on strike. Exploration drilling to the south of

the EMZ is currently in progress and is due for completion

by September 2005. Test drilling north of the EMZ is

scheduled to start after the current wet season.

Further drilling and evaluation of the Sokadie, Falangountou,

Takabangou and Gossey gold prospects on the Essakane

permit, which covers over 1,400 square kilometres, was

postponed in the second half of F2005 to focus efforts on

the EMZ extensions.

Improvement in the understanding of the orientation and

geometry of the higher grade zones has highlighted the

potential for signiﬁcantly extending Resources down dip

and on similar targets along strike on the EMZ. This has

provided the primary focus for an accelerated drilling

campaign.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Exploration and
new business development (continued)

COMAPLEX MINING CORPORATION, NUNAVUT

CANADA (CMF: TSX LISTED)

In December 2004, Gold Fields announced the purchase of

11.4 per cent interest in Comaplex in an open market

transaction. Subsequent to this, in March 2005, the parties

entered into a further private placement transaction that

resulted in Gold Fields increasing its overall ownership to

19.8 per cent. The companies also entered into a technical

assistance programme whereby Gold Fields will second

geological staff and provide engineering consultation on

the Meliadine Project located near the village of Rankin

Inlet, Nunavut to Comaplex. The Meliadine Project contains

stated Resources of 1.4 million ounces at an average grade

of 11.5 grams per ton gold. Comaplex hopes to advance

this project to a preliminary feasibility study after completion

of the present ﬁeld programme.

BOLIVAR GOLD CORPORATION, VENEZUELA

(BGC: TSX LISTED)

Gold Fields owns approximately 11.4 per cent of Bolivar

Gold Corporation and has entered into a joint venture

agreement relating to several concessions surrounding a

development project Bolivar Gold are completing on the

Choco 10 property.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

OVERVIEW

Gold Fields continues to recognise the need for increased

transparency and materiality in the disclosure of its Mineral

Resource and Ore Reserve information. In support of this

core deliverable, the Annual Report F2005 is supported by

a Mineral Resource and Ore Reserve Supplement, which

outlines in detail the status and changes at each mining

property. Consistency in reporting among the operating

mines and compliance with public regulatory and internal

codes of practice are paramount and the processes utilised

by the Group continue to improve year on year through

enhanced competent persons reporting. The Mineral

Resource and Ore Reserve ﬁgures for Gold Fields are

derived from a rigorous strategic and operational planning

process that is embedded at each of its operating mines.

Reserve estimates are based on many factors (modifying

factors) including estimates of future production costs,

future commodity prices, and notably in South Africa, the

exchange rate between the rand and the US dollar.

Gold Fields reports its Mineral Resources and Ore Reserves

in accordance with the South African Code for the Reporting

of Mineral Resources and Ore Reserves (“SAMREC”),

which sets out minimum standards, recommendations and

guidelines for Public Reporting of Exploration Results,

Mineral Resources, and Ore Reserves in South Africa.

Mineral Resources are inclusive of the Ore Reserve

component.

It is with great satisfaction that Gold Fields again received

the annual SAMREC/IASSA award from the Investment

Analysts Society of Southern Africa (“IASSA”), for the best

reporting of Mineral Resources and Ore Reserves according

to the SAMREC code for the F2004 declaration. This

award, now won three years running, is a testimony to the

quality, transparency and competency shown by Gold

Fields in its SAMREC compliant reporting.

As part of Gold Fields’ Sarbanes-Oxley Section 404 (“SOX”)

compliance project, all seven mining operations have been

subjected to detailed mineral resource management

process mapping that has been captured in an electronic

based management system. Core beneﬁts to Gold Fields

resulting from SOX compliance in mineral resource

management are improved effectiveness, efﬁciency and

auditability of the internal control process, better

information and improved conﬁdence for auditors and

investors and risk mitigation.

SRK Consulting, acting as independent auditors, have

reviewed the mineral resource management process maps

and consider that the system, as presently established and

post certain remedial actions, to be suitable to ensure

compliance with the intent of SOX.

Within the last 12 months, Gold Fields has subjected all of

its mining operations to two separate Mineral Resource

and Ore Reserve audits by two globally leading industry

consultants. In F2004, SRK Consulting conﬁrmed Gold

Fields’ material compliance in respect of the requirements

of the SAMREC reporting code. The F2005 Mineral

Mineral Resources and Ore Reserves

2005: review

•

Attributable gold equivalent Resources and Reserves,
including the growth projects, stand at 174.5 and
64.8 million ounces respectively.

•

Independent auditors conﬁrm the F2005 Resource
and Reserve declaration fully SAMREC compliant

•

At Kloof, the recently completed exploration and
resource deﬁnition campaign has resulted in the
generation of an improved VCR ore body model for
the prospective ground below infrastructure

•

The new resource model at Kloof has initiated
re-scoping and re-engineering of the EBA Project,
while the revised KEA Project feasibility is already at
an advanced stage.

•

Agnew and Damang continue to perform well with
strong project pipelines

•

Mineral Resource Management is well-positioned for
Sarbanes-Oxley compliance

Resource and Ore Reserve statement was submitted to

Snowden Mining Industry Consultants for review and they

conducted extensive on-site audits at all mining operations

in South Africa, Ghana and Australia. At the request of Gold

Fields, Snowden also updated the resource estimates for

the Suhanko feasibility as part of the Arctic Platinum

Project, where they have also assisted with the estimation

study for part of the SK Reef.

At Essakane, in Burkina Faso, the Mineral Resource estimate

has been generated in conjunction with SRK Consulting and

in accordance with the guidelines set out in the Canadian

National Instrument 43-101 (“NI 43-101”). Gold Fields is

currently undertaking a pre-feasibility study (“PFS”) for an

open pit mine and Carbon in Leach (“CIL”) plant at Essakane.

This study is based on an interim Resource update of the

Essakane Main Zone (“EMZ”), which Gold Fields completed

in May 2005. A new and extended PFS resource model,

containing all assay results up to September 2005, will be

ﬁnalised by Gold Fields by the end of 2005.

The resource estimate for the Cerro Corona Gold-Copper

Porphyry Project in Peru, has been prepared by Norwest

Corporation and is based on JORC and NI 43-101. As per

the guidelines set out in NI 43-101, both Snowden and

Norwest Corporation have acted as independent

consultants as deﬁned therein. The Cerro Corona Ore

Reserves have been independently reviewed by WLR

Consulting Inc., Colorado, USA.

Gold Fields will continue to pursue a strategy of growth in

its Reserve base through exploration, acquisition and

optimisation of current operations. A sustainable Reserve

position for the Group is reliant on a robust project pipeline

delivering quality mineable ounces at a margin and this

area will remain a key focus. On-going investment in mine

site resource deﬁnition programmes, together with brown-

ﬁeld and greenﬁeld exploration campaigns, ensures a

balanced project pipeline is maintained and managed by a

disciplined and motivated team. Reserve replacement

projects are ranked on quality, size, delivery times and

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Mineral Resources and Ore Reserves

value creation, and are developed through the project

pipeline to come on-stream when they can provide

maximum growth and returns to the shareholder.

The following price assumptions were used as a basis for

estimation in this declaration

F2005

Resource price

assumption

Reserve price*

assumption

South Africa

R105,000/kg

R92,000/kg

Ghana

US$450/oz

US$375/oz

Australia

A$650/oz

A$560/oz

F2004
South Africa

R115,000/kg

R90,000/kg

Ghana

US$400/oz

US$350/oz

Australia

A$650/oz

A$580/oz

* Assumed gold prices are in accordance with the US Securities

and Exchange Commission (“SEC”) and approximate to historical
three year average commodity prices and exchange rates

Salient highlights

As at the end of June 2005 Gold Fields has attributable

precious metal (and gold equivalent) Mineral Resources of

174.5 million ounces (F2004: 190.6 million ounces)

and

gold equivalent attributable Reserves of 64.8 million ounces

(F2004: 75.6 million ounces)

, net of an annual attributable

depletion of 5.0 and 4.5 million ounces respectively.

The single largest reduction in the Mineral Resource

(9.7 million ounces) and Ore Reserve (10.9 million ounces)

occurred at Kloof as a result of the below infrastructure

Eastern Boundary Area (“EBA”) Project being subjected to

new geological and resource models, based on new

information. The EBA Project does not currently show

reasonable economic potential given the present mine

design, capital requirements and current costs. The EBA

Project accounts for 42 per cent of the Group’s year-on-year

decline in managed gold Mineral Resource ounces and

71 per cent of the reduction in managed gold Reserve

ounces. Re-engineering and right-sizing this project will

provide for a re-assessment of its economic viability based

on the new footprint.

F2004 excluded Cerro Corona and Essakane growth projects.

F2004 excluded Cerro Corona.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

The contribution per operating region to Gold Fields’

attributable Reserves remained stable year-on-year with

only minor changes reﬂected by South Africa decreasing

from 80 per cent to 77 per cent and Ghana and Australia

both increasing by one per cent to 17 per cent and 6 per

cent respectively.

South African operations

• Exploration programmes excluding prospect development,

continued with expenditures for F2005 of R23 million

(US$3.0 million at R7.63:US$) at Kloof, Beatrix and

Driefontein. Exploration is multi-disciplined and is a

combination of surface and underground diamond drilling,

seismic re-modelling and sedimentological studies to test

future mining extensions, secondary reef mining potential

and structural complexity.

Exploration expenditure – South African Operations

(F2005)

(R million)

(metres drilled)

Driefontein

5.9

23,195

Kloof

13.2

20,512

Beatrix*

3.9

16,464

Total

23.0

60,171

Inclusive of 3.5 per cent cover drilling utilised for geological
deﬁnition

This exploration campaign has provided signiﬁcant

material improvements to the quality of the resource

modelling at all three South African mines and has

continued to improve on the geological and evaluation

conﬁdence of the below infrastructure projects.

• Focus on strategic and operational re-planning at all three

South African mines has taken place to ensure continued

delivery on core Projects 400 and 100 plus, together

aimed at controlling rising costs, improving efﬁciencies

and increasing quality volume delivery at the operations.

• The primary issue impacting both the South African and

the Group’s Reserve position has been the signiﬁcant

changes impacting the two key below infrastructure

projects at Kloof, EBA and KEA (“Kloof Extension Area”).

The completion of phased surface drilling programmes

and 3D seismic modelling, in conjunction with an

enhanced understanding of regional and local scale

sedimentological trends and facies geometry, has further

evolved the orebody model for the Ventersdorp Contact

Reef (“VCR”) below Kloofs’ current mine infrastructure.

In response, the KEA project has been completely re-scoped

and re-engineered to optimise extraction of the orebody. The

new pre-feasibility study indicates a signiﬁcant improvement

in value compared to the original KEA project reported in the

F2004 declaration. It is planned to complete the feasibility

study incorporating a new decline access system by the

second quarter of F2006.

The eleven EBA surface boreholes drilled in three phases

for a total of 84 valid VCR intersections were completed at

the end of F2004. The re-modelled 1994 3D seismic survey

has been merged with the 2004 survey to produce one

holistic 3D structural model of the strategically important

areas below infrastructure at Kloof. This information has

been key in constraining a six-month long phase of ore

body modelling, designed to honour all the data control

points and take cognisance of the latest sedimentological

and facies trends interpreted within the VCR. A new VCR

model was generated in May 2005 that reﬂects improved

VCR facies deﬁnition and therefore improved constraints

on gold value distribution.

In response, a new estimate for the EBA Project Mineral

Resource has been generated showing a 31 per cent

decline in mineable Resource ounces year-on-year.

The result is a signiﬁcantly reduced target footprint for EBA

that continues to represent an attractive option for organic

growth. However, the surface and sub-vertical shaft access

and mining system planned for the F2004 pre-feasibility

study will need to be re-engineered and costed to determine

economic feasibility in the new area of interest.In compliance

with the SAMREC code, and Industry Guide 7 (SEC), we are

not presently able to convert EBA Resource ounces to

Reserve and the 10.9 million Reserve ounces declared in

F2004 for EBA cannot be replaced in this declaration. A

dedicated team focused on re-engineering this project will

evaluate the project in the context of the revised resource

model.

Additional notable highlights are summarised below:

• At Kloof, 1.7 million ounces of Resource has been removed

below 27 level in line with the re-conﬁgured 9 shaft-

pumping project, which is aimed at reducing the

infrastructural footprint and lowering ﬁxed costs at the

mine.

• At Driefontein, the Depth Extension (“DE”) Project to

access and mine 8.3 million ounces of gold from the

Carbon Leader horizon below 50 level in the 5 sub

vertical shaft area still provides positive returns at current

rand gold prices and an underground drilling programme

has been initiated to conﬁrm gold grades and structure.

It is planned to complete the drilling programme over

the coming year.

• At Beatrix the marginal Vlakpan (down to 20L) Project (South

Section) remains viable at the prevailing pay limit, mine cost

structure and gold price but has reduced by 0.7 million Reserve

ounces year-on-year. Margin squeeze is tightening at Beatrix

as pay limits approach the average grade of the orebodies at

North and South Sections. Increased secondary development

and the scheduling of higher grade pillars will provide for

improved selective mining.

• The South African operations have designed and implemented

more robust and functional economic models to enhance the

Integrated Resource and Reserve Information System

(“IRRIS”). The introduction of Mine-2-4D (mine design and

scheduling software) to compliment Cadsmine

now provides

for more effective longer-term scenario and project planning.

A new IRRIS data warehouse project has also been initiated

to ensure information standardisation, consistency, security

and integrity.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Mineral Resources and Ore Reserves (continued)

• In terms of the provisions of the Mineral and Petroleum

Resources Development Act, 2002 (“MPRDA”), the

holder of an old order mining right has the right, for a

period of ﬁve years ending on 30 April 2009, to convert

such old order right to a mining right in terms of the

MPRDA. The South African operations are at an advanced

stage regarding the preparation and submission of the

necessary applications to convert their old order mining

rights to mining rights. Driefontein’s submission has

already been lodged and the authorised conversion is in

process. Kloof and Beatrix will follow soon after.

INTERNATIONAL OPERATIONS

• The Tarkwa Plant was completed during F2005, along

with the conversion to owner mining. The cost beneﬁts

from the change to owner mining at Tarkwa and the

improved recoveries from the new milling infrastructure

have been partly offset by cost increases across the

commodity basket and cut-off grades have consequently

remained under pressure. Despite this, and an annual

depletion of 0.9 million ounces, the reportable Reserve

has only decreased by 9 per cent year-on-year to 13.4 million

ounces. Going forward, drilling will concentrate on

improving the conﬁdence in the evaluation, structural

interpretation and geotechnical data at Tarkwa.

• The construction of the new plant at St Ives was

completed in F2005 but the positive impact of reduced

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

processing costs and improved recoveries on lowering

cut-off grades to generate additional mining

opportunities are still not fully realised as plant

optimisation continues.

Exploration expenditure – International operations

(F2005)

(US$ million)

(metres drilled)

Tarkwa

1.1

9,725

Damang

3.7

47,459

St Ives

8.8

193,000

Agnew

2.9

94,458

Total

16.5

344,642

(Exchange rate US$0.67:A$)

• Exploration momentum at St Ives was maintained

through expenditure of US$8.8 million to create medium

to long term mining ﬂexibility. In F2006 a re-focused and

re-energised exploration and resource development

campaign testing twenty prime targets will be a key

thrust for the Reserve replacement strategy.

In F2005 the exploration strategy at St Ives continued to

focus on the Central Corridor of tenements and is

approaching extensional drill out limits so Reserve growth

will be focused on leverage from reduced cut-offs and new

discovery. St Ives was hindered by a lack of discovery and

a low conversion to Resource last year, with drilling shifting

some metal back into inventory. The main driver behind

the reduction in the Resource was the Greater Victory area

(–1.4 Moz) mainly due to the Leviathan pit, now subjected

to a revised pit shell and a new resource model,

compounded by geological re-modelling at Conqueror and

East Repulse. Open pit Reserves at St Ives grew by 39 per

cent (tons), but the underground position dropped 34 per

cent on metal.

• The approval for the Damang Pit Cutback (“DPCB”) is a

signiﬁcant development and provides a window of

opportunity for the Damang Extension Project (“DEP”)

to continue to explore attractive targets within the mine

lease and increase the mines’ footprint. Successes to

date for the DEP are the Amoanda and Tomento pits.

The DPCB will mine 0.6 million ounces of gold at

2.5 grams per ton and comprises 48 per cent of

Damang’s total gold Reserves. Regional targeting and an

underground feasibility at Abosso Deeps are aimed at

unlocking district potential.

• The Agnew Mineral Resources and Ore Reserves

increased year on year with additions derived from

expansions to existing mineralised lodes and new

projects resulting from vigorous and focused exploration

activities supported by remodelling and re-evaluation.

Agnew currently produces from Kim, Main Lode and

Songvang but enjoys a robust pre-feasibility and concept

project pipeline, with Claudius, Vivien, Rajah and the

Songvang extension all in feasibility.

Sensitivity of the Reserves to potential ﬂuctuations in the

gold price at the South African, Ghanaian and Australian

operations is shown in the accompanying charts at

increments within 10 per cent of the base gold price. The

South African sensitivities speciﬁcally exclude the surface

low-grade stockpile Reserves.

A summary year-on-year reconciliation of the Mineral

Resource and Ore Reserve statement is shown in the Mineral

Resource and Ore Reserve Supplement to this report.

COMPETENT PERSONS

Competent persons, designated in terms of the SAMREC

Code and taking responsibility for the reporting of Gold

Fields’ Mineral Resources and Ore Reserves are:

• Craig Nelsen – Executive Vice President: Exploration

(BA Geology, MSc.), 29 years experience.

• Terence Goodlace – Senior Vice President: Strategic

Planning (NHD Mining, BCom., MBA), 25 years

experience.

• Tim Rowland – Senior Consultant: Mineral Resources

and Mine Planning (BSc. Hons Geology, MSc. Mineral

Exploration, GDE Mining Engineering, Registered

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Mineral Resources and Ore Reserves (continued)

Natural Scientist (Reg. No. 400122/00), MGSSA,

FSAIMM, 19 years experience.

The named staff are permanent employees of Gold Fields.

Additional information summarising the composition of the

competent persons teams involved with the compilation of

the Mineral Resource and Ore Reserve declaration per

operation is included in the supplement to this report.

Note

A comprehensive review of the Group’s Mineral Resources

and Ore Reserves for F2005, together with locality and

mine infrastructure plans of the operations is available in a

supplementary document that accompanies the annual

report, or may be downloaded from the Gold Fields website

(www.goldﬁelds.co.za/www.gold-ﬁelds.com) as a pdf ﬁle

using Adobe Acrobat Reader. Rounding of ﬁgures in this

report and in the supplementary documents may result in

minor computational discrepancies.

ORE RESERVE SENSITIVITY

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

GOLD FIELDS CLASSIFIED MINERAL RESOURCE AND ORE RESERVE STATEMENT
AS AT 30 JUNE 2005

SOUTH AFRICAN OPERATIONS

Resources

Reserves

F2005

F2004

F2005

F2004

Block

Tons

(Mt)

Grade

(g/t)

Gold

(Moz)

Gold

(Moz)

Mill

Tons

(Mt)

Grade

(g/t)

Gold

(Moz)

Gold

(Moz)

Driefontein

Measured

40.1

13.1

16.94

17.76 Proved

30.1

7.9

7.62

Indicated AI

23.7

13.7

10.40

10.42 Probable AI

27.4

8.0

7.05

7.15

Total Above Infrastructure

63.8

13.3

27.34

28.18

Total AI

57.5

7.9

14.66

14.77

Indicated BI*

42.7

12.2

16.72

16.73 Probable BI

31.9

8.1

8.31

8.34

Total underground

106.5

12.9

44.06

44.90

Total underground

89.4

8.0

22.97

23.11

Indicated surface

10.6

1.2

0.40

0.51 Probable surface

10.6

1.2

0.40

0.51

Grand Total
surface and underground

117.1

11.8

44.47

45.41

Grand Total
surface and underground

100.0

7.3

23.38

23.62

Kloof

Measured

45.5

14.0

20.48

26.66 Proved

13.6

10.2

4.46

5.79

Indicated AI

62.2

10.3

20.51

18.09 Probable AI

29.0

9.0

8.41

6.89

Total Above Infrastructure

107.7

11.8

40.99

44.76

Total AI

42.6

9.4

12.87

12.67

Indicated BI**

59.5

14.9

28.43

39.35 Probable BI

5.0

11.9

1.90

14.25

Total underground

167.2

12.9

69.42

84.10

Total underground

47.6

9.7

14.77

26.92

Indicated surface

29.3

0.6

0.57

0.55 Probable surface

8.7

0.7

0.19

0.34

Grand Total
surface and underground

196.5

11.1

69.99

84.65

Grand Total
surface and underground

56.3

8.3

14.95

27.27

Beatrix

Measured

17.0

7.5

4.10

5.28 Proved

14.4

5.5

2.53

3.20

Indicated AI

36.4

7.9

9.20

11.76 Probable AI

32.8

5.4

5.68

6.19

Total Above Infrastructure

53.4

7.7

13.30

17.03

Total AI

47.2

5.4

8.21

9.38

Indicated BI

†

15.9

6.9

3.51

4.78 Probable BI

0.0

—

0.0

0.36

Total underground

69.3

7.5

16.80

21.81

Total underground

47.2

5.4

8.21

9.75

Indicated surface

13.3

0.4

0.17

0.17 Probable surface

0.0

—

0.0

0.06

Grand Total
surface and underground

82.6

6.4

16.97

21.98

Grand Total
surface and underground

47.2

5.4

8.21

9.80

Total SA

Grand Total
surface and underground

396.2

10.3 131.43 152.04

Grand Total
surface and underground

203.5

7.1

46.54

60.69

Note:

Managed unless otherwise stated

AI = Above Infrastructure
BI = Below Infrastructure
*Driefontein Below Infrastructure refers to material below 50 level (3,420 metre below surface)
**Kloof Below Infrastructure refers to material below 45 level (3,352 metre below surface)
†Beatrix Below Infrastructure refers to material below 26 level (1,341 metre below surface)

GOLD FIELDS CLASSIFIED MINERAL RESOURCE AND ORE RESERVE STATEMENT
AS AT 30 JUNE 2005

INTERNATIONAL OPERATIONS

Resources

Reserves

F2005

F2004

F2005

F2004

Block

Tons

(Mt)

Grade

(g/t)

Gold

(Moz)

Gold

(Moz)

Mill

Tons

(Mt)

Grade

(g/t)

Gold

(Moz)

Gold

(Moz)

TARKWA

Measured

190.1

1.5

8.95

9.61 Proved

184.5

1.3

7.89

8.56

Indicated

189.6

1.3

7.82

8.21 Probable

134.3

1.2

5.38

6.05

Inferred

24.2

3.4

2.63

2.23

Total

403.9

1.5

19.40

20.04

Total

318.8

1.3

13.27

14.62

Measured low grade stockpiles

5.5

0.8

0.14

0.12 Proved low grade stockpiles

5.2

0.8

0.13

0.12

Grand Total

409.5

1.5

19.54

20.16

Grand Total

324.1

1.3

13.41

14.73

DAMANG

Measured

6.5

2.3

0.48

0.31 Proved*

4.5

2.4

0.35

0.09

Indicated

18.7

1.8

1.07

0.82 Probable*

11.4

1.8

0.67

0.38

Inferred

2.2

2.1

0.15

0.30

Total

27.5

1.9

1.71

1.43

Total

15.9

2.0

1.02

0.46

Measured low grade stockpiles

9.6

1.2

0.38

0.40 Proved low grade stockpiles

7.6

1.3

0.33

0.40

Grand Total

37.1

1.8

2.09

1.83

Grand Total

23.5

1.8

1.34

0.86

ST IVES

Measured

1.0

3.6

0.12

0.24 Proved

0.9

3.3

0.09

0.20

Indicated

37.4

3.1

3.69

4.53 Probable

22.4

3.0

2.15

2.60

Inferred

8.9

3.7

1.06

2.65

Total

47.3

3.2

4.87

7.42

Total

23.2

3.0

2.25

2.80

Measured low grade stockpiles

7.0

1.2

0.27

0.27 Proved low grade stockpiles

7.0

1.2

0.27

Grand Total

54.3

2.9

5.14

7.68

Grand Total

30.3

2.6

2.52

3.07

AGNEW

Measured

1.0

11.4

0.36

0.30 Proved

0.5

10.8

0.18

Indicated

9.9

5.2

1.67

1.37 Probable

4.0

5.2

0.66

0.51

Inferred

6.5

5.1

1.06

0.98

Total

17.5

5.5

3.10

2.65

Total

4.5

5.8

0.84

0.69

Measured low grade stockpiles

0.4

1.6

0.02

0.02 Proved low grade stockpiles

0.4

1.6

0.02

Grand Total

17.8

5.4

3.12

2.68

Grand Total

4.9

5.5

0.86

0.71

INTERNATIONAL OPERATIONS
Grand total surface and
underground

518.7

1.8

29.89

32.34

382.8

1.5

18.13

19.37

The Damang reserve conta)

table material at

US$375/oz inside this shell has been reported.

GFL (Managed)
Above Infrastructure

796.7

4.4 112.66 123.53

549.4

3.1

54.45

57.11

Below Infrastructure

118.1

12.8

48.66

60.85

36.9

8.6

10.22

22.95

Total GFL (Managed)

914.9

5.5 161.32 184.39

586.3

3.4

64.66

80.06

Total attributable to Gold Fields

785.8

6.1

155.1

178.0

485.8

3.9

60.4

75.6

Managed unless otherwise stated

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Mineral Resources and Ore Reserves (continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

PLATINUM AND GROWTH PROJECTS

Resources

Reserves

F2005

F2004

F2005

F2004

PLATINUM
GROUP ELEMENTS

Block

Tons

(Mt)

2PGE

+ Au

Grade

(g/t)

2PGE

+ Au

(Moz)

2PGE

+ Au

(Moz)

Mill

Tons

(Mt)

2PGE

+ Au

Grade

(g/t)

2PGE

+ Au

(Moz)

2PGE

+ Au

(Moz)

Arctic Platinum project

168.3

2.3

12.60

—

Resources

Reserves

F2005

F2004

F2005

F2004

GOLD

Block

Tons

(Mt)

Grade

(g/t)

Gold

(Moz)

Gold

(Moz)

Mill

Tons

(Mt)

Grade

(g/t)

Gold

(Moz)

Gold

(Moz)

Essakane

34.9

2.0

2.20

—

Cerro Corona

2,3,4,5

126.6

0.9

3.83

4.62

90.6

1.0

2.93

2.39

Total Gold (Projects)

161.5

1.2

6.03

6.82

90.6

1.0

2.93

2.39

Block

Tons

(Mt)

Grade

Au (g/t)

–Cu(%)

equiva-

lent

(Moz)

equiva-

lent

(Moz)

Block

Tons

(Mt)

Grade

Au (g/t)

–Cu(%)

equiva-

lent

(Moz)

equiva-

lent

(Moz)

Cerro Corona (Gold equivalent)

126.6

0.9 g/t

– 0.5 %

6.79

8.72

90.6

1.0 g/t

– 0.5%

5.49

4.64

Total Precious Metals equivalent

329.8

21.6

23.5

90.6

5.5

4.6

Attributable Precious Metals
equivalents

291.4

19.4

21.0

73.1

4.4

3.74

Total attributable to Gold Fields

1,077.2

174.5

199.0

558.9

64.8

79.3

@ 1.0 g/t cut off

Resources within 450 US$/oz (Au) – 1.00 US$/oz (Cu) Pit Shell

Excludes Copper Resources of 121.9 Mt @ 0.5% Cu contained 1,327 M lbs Copper

Reserves within 375 US$/oz (Au) – 0.9 US$/lb (Cu) Pit Shell

Excludes Copper Reserves of 90.6 Mt @ 0.5% Cu containing 1,068 M lbs Copper

Managed, unless otherwise stated

Includes both gold (as reported above) and copper equivalent ounces (copper revenue converted to gold equivalent ounces)

Gold Fields

Sustainable development

Sustainable

INTRODUCTION

This year we remained focused on the continued

proﬁtability of our business while, at the same time,

addressing the needs and values of the society within

which we operate.

During 2005, we focused on developing the level of

understanding and trust between our operations and

stakeholders. In August 2004, we held our ﬁrst Sustainable

Mining Workshop in partnership with the International

Finance Corporation. It was attended by 53 managers from

across the Group including health and safety, mining

engineering, training and development, environment and

community relations. The workshop aimed at building

capacity and gaining a better understanding of sustainable

development in the mining environment.

We again participated in the JSE’s Socially Responsible

Investment Index and were ranked in the top 20 per cent

of high environmental impact companies that qualiﬁed for

the Index. It is important to us that this Index remains a

signiﬁcant contributor to the corporate citizenship debate

in South Africa.

Our environmental performance is monitored through the

ISO 14001 audits on an ongoing basis and we are pleased

to report that all Gold Fields’ sites in South Africa were re-

certiﬁed against the new ISO 14001:2004 guidelines while

the international operations have retained their ISO 14001

certiﬁcations. Gold Fields Exploration Division has been

recommended for ISO certiﬁcation.

We have developed open and honest communication with

all our stakeholders. During Harmony’s hostile bid, we

received welcome support from the communities in which

we operate, and from our suppliers, contractors and local

administrative structures.

The Gold Fields South Africa Foundation contributed

R24 million to community projects around our mining

operations and in areas from which we draw labour. The

Gold Fields Ghana Foundation contributed R10 million and

The Gold Fields Australia Foundation a further R700,000

towards community development projects. During F2006

the focus will be on investing in sustainable community

projects that contribute to education and skills development,

poverty alleviation and sustainable livelihoods, the health

and well being of our communities in all operating regions.

One such project is a job creation project in Westonaria,

the Paragon Project, that employs disabled former

employees from the operations. It specialises in the

manufacture of safety equipment, backﬁll bags, clothing

and other items for use on our mines. At present the

factory employs 22 people on a sustainable basis and

additional outlets for its products are envisaged with the

prospect of additional job opportunities.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Sustainable development

The Group’s various operations manage their health and

safety to ensure the wellness of their employees and the

sustainability of its operations. The control and eventual

elimination of all hazards in the workplace require a team

effort involving the active participation of all stakeholders.

There was an overall improvement in safety performance

during F2005. Damang mine was awarded the Ghana

Chamber of Mines Safety Shield as the safest mine in

Ghana. Beatrix mine achieved a three million fatality-free

shifts which is a ﬁrst for any of the Group’s operations.

The Full Compliance Health and Safety programme is the

primary vehicle for delivering best practices in health and

safety management at the Group’s South African

operations. As part of this programme, a Du Pont peer

review was conducted at all the Group’s operations to

identify areas for further improvement of health and safety

management. The ﬁndings emphasised the imperative of

complete employee involvement in recognising and

reporting unsafe conditions and avoiding a repetition of

events that gave rise to previous injuries and accidents.

The Group’s Australian operations continued to promote a

site-wide culture of improving safety performance by fully

integrating safety and health management into normal

business practice. These operations established a risk-

based approach to health and safety management

reinforced by the implementation of AS4801 and Critical

Hazard Standards. They concentrate on the continuous

improvement of the system through ongoing simpliﬁcation

and developing a more sustainable approach.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Health and safety

The health and safety management system at Tarkwa is in

the process of being certiﬁed OHSAS 18001.

GROUP SAFETY PERFORMANCE

Fatal injury frequency rate

In F2005, 26 employees (F2004: 37 employees) lost their

lives in mining-related accidents. This constitutes a fatal

injury frequency rate of 0.18 per million hours worked

(0.27 in F2004), which is the lowest rate recorded by the

Group. One employee lost his life at Tarkwa mine, the rest

occurring at the Group’s South African operations. The

Australian operations and Damang have maintained their

record of zero fatalities since being acquired by Gold Fields.

Falls of ground caused 60 per cent of the fatalities at the

South African operations. Thirty-two per cent of these

fatalities were gravity related and the other 28 per cent due

to seismic events. Systems are in place to identify root

causes and remedial actions are implemented accordingly.

Days lost frequency rate

Days lost resulting from accidents in the Group was

reduced by 7 per cent from 410 to 382 per million hours

worked. Improved performance can also be attributed to

post-injury management involving intensive rehabilitation

exercises to ensure that when individuals return to the

workplace after an injury they are physically ﬁt to continue

their particular work function.

Lost day injury frequency rate

The lost day injury frequency rate (LDIFR) for the Group

improved from 14 to 13 per million hours worked. A

signiﬁcant improvement in LDIFR was recorded at Agnew,

Beatrix and Damang mines. Tarkwa’s safety record saw a

remarkable improvement during F2005 with total lost day

injuries reducing to 7 from 12 in the previous year. Various

interventions such as Stop, Fix and Continue as well as

Take Time – Take Charge are integral to normal day-to-day

management of safety.

OCCUPATIONAL HEALTH

The past year has seen the integration of the Occupational

Medicine discipline with Occupational Hygiene and

Occupational Safety in order to promote a more holistic

approach to Occupational Health in the Group. This is in

keeping with international best practice allowing for more

informed recommendations by the occupational health

discipline to Group management regarding occupational

health matters.

Medical surveillance for the Group’s South African

operations is conducted at appropriately equipped

occupational health centres at the Kloof and Driefontein

mines in the West Witwatersrand region, as well as at the

St Helena occupational health centre in the Free State.

Well qualiﬁed occupational health nurses and doctors at

each of these centres carry out this function.

At the Group’s Australian operations, a range of routine

medical assessments, focusing mostly on hearing and health

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

(continued)

PROJECT 28.5°C

During F2001, a decision was taken to improve the

underground working environment at the Group’s

South African operations from a heat stress point of

view and to this end a design target was set at a reject

wet bulb temperature of 28.5°C. This has improved

both health and safety performance as well as

productivity. The following improvements were made

during F2005.

• Beatrix

A major change in the Beatrix 2 shaft was introduced

resulting in reduced equipment and energy

requirements and improved working conditions. At

Beatrix 4 shaft, a conventional ventilation system

replaced the recirculation system with resultant

improved working conditions and reduced energy

costs. At Beatrix 1 shaft, the installation of booster

fans has improved face conditions and continues to

reduce auxiliary fan requirements.

• Driefontein

At Driefontein 5 shaft, the installation of a surface

bulk air cooler was completed and a system of

underground refrigeration plants, together with a

closed loop cooling arrangement are being

commissioned. An ammonia plant was

commissioned at Driefontein 1 shaft and the total

water reticulation of the cooling system will come

into effect on the completion of pumping

arrangements.

• Kloof

At Kloof 4 shaft, ammonia refrigeration machines

were installed to super-cool the chilled service

water to 1.0°C and a surface bulk air cooler with

additional ammonia plants were commissioned. A

number of innovative hydropower cooling devices

were introduced doubling the effective hydro

cooling power availability.

functions, monitors the impact of operational health hazards

on employee health in line with legislative requirements.

The mainstay of the Group’s occupational medicine

discipline remains medical surveillance aimed at health

screening, appropriate work placement, early detection

and the prompt referral of occupational diseases. A total of

60,749 examinations were performed on mine employees

and contractors at the Group’s three local occupational

health centres (OHCs) during the past ﬁnancial year. These

comprised 10,450 initial, 42,800 periodical and 7,499 exit

examinations.

The medical surveillance programme is improved

continuously through ongoing training and professional

development of occupational health staff, the reﬁnement

of the integrated hygiene, safety and medicine information

system (Palladium) for the Group’s South African

operations, and the implementation of modern technologies

such as the latest audiometric and digital radiography

systems. These enable improved early and accurate

detection of abnormalities, and safe and conﬁdential

storage of medical records.

The implementation of a standardised, sensitive, gender

neutral and objective rehabilitation and functional work

capacity test battery at the Group’s South African

operations will allow for more conﬁdent placement of

employees on a basis which marries health, safety and

medical considerations with worker ability and the

inherent requirements of an individual’s job. This will also

improve the rehabilitation prospects of ill and injured

employees, reduce convalescence time and increase

ﬁtness of employees on re-entry to the work

environment.

Health and safety

The submission of compensation claims arising

from occupational diseases is done in accordance with

applicable legislation, while reporting on occupational

diseases and disease trends assists in adjusting strategies

and interventions aimed at reducing and preventing these,

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

ESCAPE AND RESCUE

Underground ﬁ re protection is of vital importance in

mining operations around the world and South African

mines play a leading role in this respect. A total of

21 ﬁ re incidents was reported in F2005 of which

14 occurred at our South African operations with the

remainder at the international operations. Six of these

were classiﬁ ed as major incidents necessitating the

implementation of pre-planned emergency procedures.

There are some 722 equipped underground refuge

chambers in the Group. In addition, all underground

workers at Gold Fields’ operations are equipped with

self-contained self-rescuers and key personnel carry

portable gas monitors to provide early warning of the

presence of harmful gases. Practice escape drills are

conducted on a regular basis during simulated

conditions and 1,215 employees successfully escaped

to refuge chambers during actual ﬁ re emergencies

without any serious injury or deaths.

where possible. The most prevalent occupational diseases

in the gold mining industry are Cardio Respiratory

Tuberculosis (TB), Noise-induced Hearing Loss (NIHL),

Silicosis and Chronic Obstructive Airways Disease (COAD).

The following graph demonstrates the percentage of each

of these conditions as a proportion of the total diagnosed.

Tuberculosis

The incidence of TB remains relatively constant. This is

largely attributable to the effects of HIV infection on the

workforce.

Efforts to control TB remain a priority for the Group, with

emphasis on active and passive case ﬁ nding, Directly

Observed Therapy (DOT) and the use of internationally and

nationally approved treatment regimes. These interventions

are aimed at detecting infection as early as possible,

improving adherence to treatment, increasing cure rates

and interrupting the spread of infection.

Silicosis and COAD

The graph below demonstrates the relative stability of

Silicosis and COAD rates over recent years. In the South

African operations, the respirable silica dust concentration

is on average 65 per cent below the occupational exposure

limit set by the Department of Minerals and Energy. The

Group’s South African operations have been actively

involved in developing and implementing strategies to

eliminate Silicosis and COAD. In this regard, the South

African mining industry has agreed certain occupational

health and safety milestones with the South African Mine,

Health and Safety Council.

In Australia, the Department of Industry and Resources

sets a quota of annual samples to monitor airborne

contaminants at the Group’s Australian operations. These

operations comply fully with all departmental requirements

and additional monitoring of other pollutants is also

undertaken.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Health and safety (continued)

EMERGENCY

PREPAREDNESS

AND RESPONSE

• Ghana

Tarkwa has a full-time medical response team with

employees also providing ﬁrst aid training to the

standards of the St John Ambulance. The mine has

taken delivery of self-contained breathing apparatus

and ﬁre suits. It has also trained employees of the

Ghana Civil Aviation Rescue Fire-ﬁghting School.

Fire drills and evacuation exercises were conducted

at both mines.

• Australia

Agnew Gold is well positioned to respond effectively

to all emergencies as it is located close to other

external mining operations and the local township

provides access to good supporting emergency

resources such as ﬁre, ambulance and medical

facilities. Fully equipped and trained mine rescue

teams are available to undertake ﬁre-ﬁghting,

search and rescue, ﬁrst aid, vertical rope rescue,

and they are also equipped with long-duration

underground breathing apparatus.

It should be borne in mind that Silicosis and COAD are

diseases with very long latency periods and that the

success of interventions aimed at reducing occurrences is

only evident after some years have elapsed.

Noise-induced Hearing Loss

At the Group’s South African operations NIHL rates have

shown a decrease over recent years. This is partly due to

”normalisation” after a change in the legislative criteria for

diagnosis of NIHL in 2003, and partly due to the Group’s

hearing conservation programmes in place at these

operations. The identiﬁcation of noise sources and the

demarcation of noise zones are ongoing.

Award

Mine operation

Best safety performance for surface

operations

Beatrix

Best improvement in shift loss

frequency rate

Driefontein

Lowest lost time injury frequency rate

– including underground and surface

workplaces

Beatrix

Lowest fatal injury frequency rate –

including underground and surface

workplaces

Beatrix

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Further, the Group continues to support and is actively

involved in research initiatives aimed at understanding and

reducing the burden of occupational diseases.

Achievements and awards

The following operations achieved a million or more

fatality-free shifts during the year:

• Beatrix North and South achieved three million

underground fatality-free shifts on 5 June 2005;

• Beatrix North and South achieved three million total

mine fatality-free shifts on 4 February 2005; and

• Damang achieved 2.5 million fatality-free shifts and has

not had a fatal accident since being acquired by Gold

Fields.

Furthermore, all Australian operations have been

fatality-free since 2002.

The Beatrix Division won the prestigious Chairman’s Award

in 2005, for improvements to and the renewed vigour

displayed with their safety and health initiatives at the

operations.

Our policy of investing in the communities in and around

our operations and in labour source areas, is part of the

Gold Fields tradition and has been extended to communities

at our operations in Ghana and Australia.

DEVELOPING COMMUNITIES IN SOUTH AFRICA

The communities where our operations are located form part

of local or district administrations entrusted with their

development having their own Integrated Development Plans

(IDPs). Gold Fields proactively engages with these

communities to generate beneﬁts such as employment

opportunities, skills development and poverty alleviation. To

this end, we have initiated formal structures to engage local

stakeholders in order to understand their IDPs and determine

our level of participation in these programmes.

During F2005, our efforts on the West Rand and in the Free

State were focused on building relations with the local

councils and municipalities. This resulted in the establishment

of joint working committees each consisting of mine

Community Social Investment Committee members and

local council members. Project plans are being ﬁnalised by

the project champions drawn from the two stakeholder

parties for implementation during F2006.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Community

relations

’

Some of the projects to which The Gold Fields South Africa Foundation has contributed this year are listed below.

Province/country

Town/village

Service provider

Project description

Investment

(R)

Eastern Cape
Province

Grahamstown

Rhodes University

Environmental education and
sustainable development
projects

1 050 000

Eastern Cape
Province

Ukhahlamba

TEBA Development

Agricultural project crop and
animal farming skills
improvement programme

2 000 000

Gauteng

Carletonville
Merafong

Gold Field’s Nursing
college

Training professional nurses
and healthcare workers in host
and sending communities

1 245 000

Gauteng

Carletonville
Merafong

Nursing college

START programme: training
equipment small part of
training

60 000

Gauteng

Vanderbijlpark

Vaal Triangle
Technikon

Library refurbishment

1 000 000

Gauteng

Westonaria and
Merafong

National Business
Institute

Education quality improvement
programme skills improvement
for teachers

899 190

KwaZulu-Natal

Nkandla

Mnyakanya
Secondary School

Additional classrooms, science
lab, multi-purpose hall,
administration block

6 000 000

Limpopo

Polokwane

Doasho Secondary
School

Additional classrooms,
lab and administration block

549 560
494 478

Western Cape

Hermanus

Enlighten Edu Trust

Additional classroom

50 000

National

Merafong,
Westonaria,
Masilonyana
Matjhabeng

Edumap Edu Trust

Academic enrichment
programme post-matric
bridging programme

380 000

PAST Paleo-
anthropological
Scientiﬁc Trust

Funding research on the origins
of humankind

150 000

Lesotho

Mafeteng and
Mohales Hoek

TEBA Development

Mafeteng Agric Dev
Programme

2 000 000

Mozambique

National

TEBA Development

Home-based care programme
for terminally ill

2 000 000

TOTAL ABOVE
PROJECTS

17 878 228

TOTAL
GOLD FIELDS
FOUNDATION
PROJECTS

23 972 430

FUNDING

Community development projects are funded through The Gold Fields South Africa Foundation according to a formula

based on 0.5 per cent of pre-tax proﬁts and R1.00/US$1.00/A$1.00 for every ounce of gold produced in South Africa,

Ghana and Australia respectively. During F2005, we invested R24 million in southern Africa, US$1.6 million in Ghana and

A$150,000 in Australia. Over the past ten years, this has totalled in excess of R150 million.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Community

relations

(continued)

LIVING GOLD

Gold Fields’ Living Gold project was initiated at the end

of calendar 2002 with an initial R75 million investment

in the South African cut-ﬂower industry. The business

plan envisaged an export-oriented operation with sales

predominately targeting Western European markets.

The rationale was to establish a job-creating,

economically sustainable community investment

project in the Carletonville area in which Gold Fields’

Driefontein mine operates. Living Gold operates in

partnership with the Industrial Development Corporation

which owns 40 per cent of the company.

The initial facility comprises a 10 hectare rose production

and propagation facility, providing 320 direct jobs while

generating further down-stream employment

opportunities. Its ﬁrst roses were exported at the end of calendar 2003 and full production has now been reached with

the export of 23 million stems generating an annual turnover of approximately R44 million. It will be the largest

producer of cut-ﬂowers in South Africa supplying approximately 12 per cent of the local market.

During F2005, Living Gold adjusted its export marketing focus away from the overtraded Western European market

based in the Netherlands, to the more lucrative yet demanding markets of the United States, Japan, Australia and

Eastern Europe. The strengthening of the rand also saw tighter international competition and lower margins overseas,

which necessitated the successful entry into the domestic market. Living Gold products have acquired an international

reputation for their consistent quality and quantity, supplying world-class product throughout the year.

The project, located between Carletonville and Khutsong, supports the Integrated Development Plan of the West

Rand District Municipality and forms the nucleus of a future agricultural hub in the district.

A former hydroponics project, Golden Produce, also in the Merafong area is currently being re-aligned to the cultivation

of ﬁller plants which will serve as the basis for bouquet lines, providing added value to Living Gold’s roses. This project

currently employs 30 people, many with Gold Fields afﬁliations, and is expected to reach full production by the end of

calendar 2005.

In addition, the Living Gold project has provided a stimulus for local service providers such as transport, the manufacture

of potpourri from waste petals, and compost from off-cut material. A local brickmaking enterprise is currently

researching the opportunity of utilising the plant’s boiler ash.

During F2005, the Living Gold operation contributed to the local community as follows:

Direct wages and salaries

R12,739,282

Paid to informal service providers

R 4,654,546

Paid for municipal services

R 2,504,670

The sustainability of Living Gold, in contrast to many other purely philanthropic community investment projects, lies
in the fact that it has proved itself to be market-oriented and commercially viable.

Living Gold outlook

During F2006, the expansion of the facility from 10 hectares to 23.5 hectares is anticipated. This will be achieved by

attracting third party investment to ﬁnance the expansion. This will increase capacity to approximately 4.5 million

stems per month or 54 million per annum. Employment will increase from 320 to 500 direct employees.

The longer term plan is to increase production to 100 hectares employing 1,500 employees of whom approximately

65 per cent will be female. Living Gold is proving its potential of providing the foundation for a future West Rand

agribusiness hub that will form a growth point for the district and its communities.

Gold Fields has taken the concept of creating commercially viable agribusiness projects one step further by forming

Agrihold, to provide the beneﬁts associated with sustainable development.

Agrihold has been formed to create an investment vehicle to address the needs of the industry and other sectors of

the economy in terms of charter obligations and more general socio-economic upliftment initiatives, but with a speciﬁc

commercial intent to ensure true economic sustainability into the future.

It is proposed that Gold Fields will reverse its shareholdings, with a value of approximately R100 million, in its existing suite

of agribusinesses into Agrihold thus forming the cornerstone of the new holding company and enable other companies to

capitalise on the existing management capacity, and also diversify on a geographic and product basis.

Building communities in Ghana

In Ghana, support for community development continued

during F2005 with funding for infrastructure to address

needs of communities around our operations in the areas

of health, water and sanitation, education, and livelihood

training for family income enhancement. We are exploring

potential partnerships with organisations possessing

complementary expertise and/or resources to assist with

programmes to address pressing community development

needs. Relationships have been formalised with the World

Health Organisation (WHO), USAID, Department for

International Development DFID), Opportunities

Industrialisation Centres International, and TechnoServe.

Established programmes for frequent consultation with

stakeholders at the community, district, and government

level continued.

Working through the Ghana Chamber of Mines, Gold Fields

initiated the establishment of a Sustainable Development

Forum to facilitate improved dialogue between industry,

government, donor agencies, NGOs and community

leaders, and improved co-ordination of development

activities in mining areas.

Mining operations in Ghana have a predicted lifespan of

over 20 years. However, when these operations are ﬁnally

closed, alternative business activities will be needed to

sustain the present economic viability of the district. During

F2005, a range of potential large-scale agribusiness

opportunities were assessed in a formal study and

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

MAKING PREGNANCY

SAFER INITIATIVE

The Millennium Development Goals formulated at the
UN’s Millennium Summit in 2000 identiﬁed reduction
of child mortality and the improvement of maternal
health as critical actions necessary for social and
economic development. The WHO has identiﬁed the
Wassa West District in Ghana, where both the Tarkwa
and Damang mines are located, as one of the areas
with a pressing need for improvement in health care
delivery and outreach to pregnant mothers and
mothers with children.

The WHO’s Making Pregnancy Safer initiative was
launched in 2002 to meet these needs, with the goal of
reducing the maternal mortality ratio per 100,000 in the
district from 540 to 200. The Gold Fields Ghana
Foundation has been the leading sponsor of this initiative,
making major contributions towards critically needed
infrastructure for the project. Gold Fields has constructed
two rural clinics with maternity blocks, and in 2004
constructed a further maternity block for the Tarkwa
District Hospital. It also ﬁnanced the construction of a
maternity block for an existing rural clinic, and provided
medical supplies and equipment to rural clinics.

The District Hospital was built in 1881 and the historic
maternity block was extremely congested having
inadequate bed space, lack of privacy for women in
labour, and poor sanitary conditions. Gold Fields
constructed a modern 0.2 acre facility and partnered
the Ghana Health Service in supplying equipment. The
new facility has two operating theatres, two delivery
rooms, 40 beds, a labour room, three wards and
doctors’ and nurses’ ofﬁces. The Gold Fields Ghana
Foundation, through donations from local business
partners, funded training programmes presented by
the WHO in 2004 for health providers in rural
communities designed to reduce unwanted
pregnancies by improving access to family planning
services. In total, Gold Fields has also constructed
94 wells and boreholes and 29 stand pipes in rural
communities, including a further 28 in F2005, to ensure
that safe potable water is available to mothers and
children. Diarrhoea and other water-borne diseases are
a major cause of death among children in the district.
Gold Fields’ support of Making Pregnancy Safer and
other health initiatives has contributed signiﬁcantly
towards ensuring a healthier future for women and
children in the Wassa West District.

screening process to identify the most commercially viable

business for the Tarkwa area. It emerged from this study

that oil palm has an excellent potential to ﬁll the economic

void after the mine’s closure due to high Ghanaian and

regional demand, its proven agriclimatic suitability, the

availability of local knowledge, its suitable employment

characteristics, and other salient factors. Technical

feasibility studies were commissioned to facilitate the

further evaluation of oil palm as a long-term agribusiness

opportunity, which will include the identiﬁcation of potential

partners in such a business venture.

RESETTLEMENT

Resettlement in Damang

The mine plan at Damang continues to undergo updates

and changes with modiﬁcations to the processing plant,

the opening of new open pit mining areas, and an increase

in the rate at which ore is processed to extend the life of

the operation, thereby yielding longer term beneﬁts for all

stakeholders including government and the local

communities. Subsistence farming, based on small villages

and settlements, is the historic form of land use in many

areas of the mining lease. In some cases, the development

of open pit mining areas results in the need to resettle

persons living in such communities. The developments at

the Kwesi/Lima, Amoanda, Tomento and Lima South open

pits have had such effects, with affected persons choosing

to be relocated to other nearby towns and villages.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Community

relations

(continued)

The overriding objective of Gold Fields’ resettlement

process at the Damang mine in Ghana is to ensure that the

development of the mine will have little or no negative

socio-economic or environmental impact on the lives of

the people affected by the mine.

Gold Fields Ghana’s resettlement programmes are guided

by the following principles:

• Fair and transparent negotiations designed to ensure the

maximum participation of affected people, traditional

authorities, regulatory and local government institutions;

• Adherence to the laws of Ghana with emphasis on human

rights as well as, mining, environmental, and settlement

planning;

• Replacement structures should represent visible and

material improvement over old structures;

• Opportunities must be provided for resettled communities

to continue their economic activities with minimal

interruption and with the potential improvement of the

living standards of those affected; and

• Facilitate safe and timely project implementation with

minimal environmental and socio-economic disruption.

Resettlement programmes are planned and managed by

the Local Affairs Department at Damang. The department

utilises the expertise of local government institutions and

consultants, whenever required. A key component of the

resettlement process is the establishment of a steering

committee for each project, consisting of:

• Persons proposed for resettlement;

• Damang mine ofﬁcials;

• Traditional authorities of the area;

• The Wassa West District Assembly, including the

assemblyman of the local area;

• District and/or Regional Environmental Protection Agency;

and

• The Mines Department.

Artisanal mining

In F2005, Gold Fields partnered with DFID to design and

implement a pilot scale programme aimed at addressing

environmental, health, safety and economic sustainability

issues associated with artisanal mining activities in Ghana.

Estimates indicate that this sector provides a livelihood for

as many as 300,000 Ghanaians including those from areas

adjacent to our mining operations. Mercury usage and

child labour are but a few of the problems that this pilot

programme aims to address.

Contributing to the communities in Australia

The Gold Fields Foundation in Australia has the objective of

contributing to the long-term sustainability of communities

in Australia where Gold Fields operates. The Gold Fields

Foundation has made a signiﬁcant contribution to these

communities and continues to foster mutually beneﬁcial

relationships with them. At each of its operations, it

welcomes and encourages community representatives to

discuss issues of mutual interest. These include matters

such as environmental management, employment

opportunities, land access and development.

Both the Agnew and St Ives operations have established

links with local schools and provide opportunities for students

nearing the end of their secondary schooling to gain work

experience through day release or similar programmes. The

Foundation is also a major sponsor of the Curtin University

programme aimed at encouraging students to consider

careers in the mining and mineral processing industries

through site visits and contact with industry professionals.

Through our local community donations programmes, The

Foundation contributes to the development of social, sporting,

educational and entertainment facilities. Major institutions,

including the Princess Margaret Children’s Hospital, receive

ﬁnancial support from The Foundation and through fund-

raising efforts by our staff. Charitable organisations, including

the Australian Red Cross and Lifeline have also beneﬁted

from its efforts.

Numerous local sporting groups are provided with ﬁnancial

support to cover the cost of outﬁts, coaching, equipment

and travel. The Foundation has also made signiﬁcant

contributions to the upgrading of sporting facilities and has

committed itself as a major contributor to the new Kambalda

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Recreation Centre. When completed, local residents will

enjoy a ﬁrst class sporting and entertainment facility located

centrally within the community.

The Gold Fields Australia Foundation has sponsored a

number of student scholarships at the Western Australia

School of Mines and also offers them vacation and post-

graduation employment opportunities. Funding is also

provided to the Graham ‘Polly’ Farmer Foundation that

assists aboriginal students with educational programmes

and work experience to help them successfully complete

secondary school.

A major project aimed at utilising solar technology in rural

areas of Australia is also supported through the Gold Fields

Australia Foundation. The successful development of this

technology holds wide-ranging beneﬁts for the environment

and the people living and working in these regions.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Gold Fields’ human resources philosophy is aimed at

attracting and retaining key talent, thereby developing a

pipeline of fully performing individuals and teams at all

levels from the underground stope face, to the Executive.

Employee competence and motivation, sound employee

and community relations, and strong leadership are the

primary determinants of full performance.

Gold Fields employs more than 41,500 permanent

employees in South Africa, 321 in Australia, 2,000 in Ghana,

36 in Peru and a further 85 are active in exploration and

project development activities across the world. We comply

with the legal requirements of the countries within which

we operate, and adhere to Gold Fields’ policies and the

Value Charter to provide guidance and direction regarding

human rights and ethical codes of conduct.

At our South African operations, there is a signiﬁcant

congruence between the employment initiatives within

Gold Fields on the one hand, and the related requirements

of the Mining Charter on the other, with the charter

providing a sociopolitical context for these initiatives. The

Mining Charter and our agreements with organised labour

set speciﬁc goals in the areas of human resource

development, employment equity, migrant labour, and

housing and living conditions of employees. We are

conﬁdent that we will achieve these goals within the time

frame stipulated by the charter.

DEVELOPING INDIVIDUALS AND TEAMS

The technical, behavioural and life skills required of Group

employees, are provided within Gold Fields’ own

comprehensive development framework comprising the

Gold Fields Academy (GFA), the mine Education, Training

Human

resources

and Development (ETD) Centres, and approved external

institutions. The academy has been fully accredited by the

Mining Qualiﬁcations Authority (MQA), and has achieved

ISO9001:2000 status. The mine ETD Centres operate

under the umbrella of the accreditation of the GFA. During

F2005, the South African operations spent a total of

R133,4 million on employee training and development

programmes; the Ghana operations an estimated US$865,000;

and, the Australian operations approximately A$1.06 million.

Highlights of human resource development for the year

include the successful introduction of instruction by

e-learning, the inclusion of management and supervisory

skills as mandatory elements in technical certiﬁcation, the

transition from the traditional apprenticeship model to the

new learnership model, and the achievement of the MQA

accreditation and ISO status.

There is a growing recognition by the mining industry and

government, of the high quality of GFA programmes. The

GFA is becoming a preferred provider of technical training

to the mining and related industries. The intention is to

transform the GFA to address the education and training

needs of both Gold Fields and the industry at large while

deriving strong revenue ﬂow from its external activities.

OPERATIONAL EXCELLENCE MODEL

Gold Fields recognises that labour productivity is a key

factor in improving the economic performance. The catalyst

for this developing culture is the Group’s Operational

Excellence Model, which emphasises high performance

by committed individuals and teams in conducive work

environments.

The major drivers for improved labour productivity are

improved literacy levels for lower grade employees, the

quality of technical, managerial and leadership skills, and

employee motivation. We have also identiﬁed the signiﬁcant

effect of logistics and physical workplace factors on the

ability of employees to perform effectively and seek to

address these issues through the theory of constraints and

improved occupational health management focus.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

MANAGING AND DEVELOPING LEADERSHIP

Gold Fields is well advanced by having well-integrated

systems to manage leadership performance and to ensure

that management competency shows continuous

improvement.

The Integrated Manager System (TIMS) ensures that

individual objectives set for managers closely support the

Group’s business objectives, and that regular dialogue and

evaluation of the performance of individuals will receive

fair management acknowledgement and reward.

The management review system, which draws upon TIMS

for information regarding the developmental needs of

managers, has become a well-entrenched tool for building

leadership capacity and ensuring that the talent pipeline for

succession is identiﬁed and nurtured.

EMPLOYEE RELATIONS

Gold Fields has maintained constructive relations with all

representative unions over the past ﬁscal year. Some

78 per cent of the permanent employees at our South

African operations are members of registered unions. The

majority of these unionised members is represented by

the National Union of Mineworkers. In Ghana

1,377 employees are represented by the Ghana Mine

Workers Union.

The level of industrial action in the Group remained low

during F2005 with only one day lost to strike action in South

Africa. The COSATU political protest action (one-day national

work stoppage) that took place on Monday, 27 June 2005

was supported by approximately 30 per cent of our

workforce. In Ghana, the move to owner mining was

achieved without any employee-related incidents.

For some time, we have been engaged in an interactive

process with all organised labour parties in order to ensure

a continuation of a stable labour relations climate. Efforts

to reduce the impact of individual labour disputes in South

Africa are showing results and our programme to improve

on this will intensify over the next year.

Various agreements with organised labour have been

concluded, and it is envisaged that further improvements in

the employee relation’s environment will emerge through

more regular interaction with our union representatives

during workshops and joint issue-based forums.

During F2005 a total of 224 (F2004: 201) claims related to

wrongful termination and other alleged unfair labour

practices were referred to the Commission for Conciliation,

Mediation and Arbitration, and the Labour Court. In 91.5 per

cent of cases, judgements were awarded in Gold Fields’

favour. Grievance procedures exist at all operations backed

by disciplinary codes and procedures. When internal

grievance channels are exhausted and a grievance remains

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Human

resources

(continued)

unresolved, the individual can refer the matter to the

statutory external dispute resolution mechanism.

WORKPLACE EQUITY AND DIVERSITY

Percentage targets for HDSAs in South Africa

Occupational category

June

2003

Actual

June

2004

Actual

June

2005

Actual

June

2005

Target

June

2008

Target

Senior management

Professionals

Technicians and associated
professionals

Clerks

Service and sales

Craft and related trades

Plant and machine operators

100

We have made steady progress in promoting diversity in

the workplace, with the aim of ensuring that our operations

are representative of the communities in which we

operate. This is especially relevant at our South African

operations as we address the inequalities of the past and

strive to create a transformed Gold Fields reﬂecting South

African demographics.

Our employment equity strategy in South Africa is to

identify HDSAs with the required potential and to

consciously prepare them for appointment to management

positions through structured individual development

programmes. At the South African operations, signiﬁcant

HDSA representation in the C-band augurs well for

progressing such candidates to the next level. During

F2005, 89 per cent of learnerships and 77 per cent of

bursaries were awarded to HDSAs.

Champions allocated to each aspect of the Mining Charter

drive our Mining Charter strategies as discussed with

unions and associations in June 2004. The Transformation

Manager assists these champions when and where

necessary. The Vice President and senior managers of

each South African operation or service organisation report

progress on transformation to the Transformation Steering

Committee on a quarterly basis.

The promulgation of the Minerals and Petroleum Resources

Development Act on 1 May 2004 gave rise to an increased

impetus to the representation of women in the Group.

Each operation has developed and continues to reﬁne

plans to eliminate conditions mitigating against the

employment of women in core mining positions.

All our operations are committed to developing local

management. In Ghana, the localisation programme has

been accelerated, using the opportunity offered by the

work changes at Tarkwa to add 37 Ghanaians (F2004:

14 Ghanaians) to management positions.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

ACCOMMODATION AND NUTRITION

In South Africa, Gold Fields provides single accommodation

and catering to some 26,000 employees, the majority of

whom are migrant workers. Following a survey of employee

requirements, Gold Fields is upgrading existing single

accommodation on mine property, is converting certain

single accommodation to family units, and is promoting

home ownership options for employees. Financial provision

has been made to extend the current phase of the initiative

over the next ﬁve years.

We have also implemented a comprehensive plan to

improve the previous catering dispensation for employees

in single accommodation by inter alia improving food

menus, increasing kitchen staff competencies and tightly

negotiating procurement contracts.

REMUNERATION

A gross remuneration model was implemented for senior

ofﬁcials and corporate ofﬁce staff which will be extended

to lower level ofﬁcials through negotiation with the

recognised unions and associations to miners and artisans

at the South African operations and service organisations.

An alternative medical scheme designed for lower grade

South African employees and their dependants is being

developed in conjunction with organised labour to provide

more balanced conditions of employment.

The new SolitGold Payroll and Human Resource system has

been implemented at all South African operations, service

organisations and ofﬁces, except for the Gold Fields’ hospitals

and the corporate ofﬁce. Full implementation of the system

will allow human resource professionals to concentrate on

the development of our people, the generation of reports and

monitoring of trends, and will promote better management of

the deployment and costs of labour.

700 -

600 -

500 -

400 -

300 -

200 -

100 -

0 -

Management

profile by race

in South Africa

■

White

■

Black

700 -

600 -

500 -

400 -

300 -

200 -

100 -

0 -

Management

profile by gender

in South Africa

■

Male

■

Female

During F2005, we continued to implement our vision of

limiting the impact of HIV/Aids on our employees, their

families and communities in order to sustain our operations

and safeguard the welfare of the communities in which we

operate.

The current prevalence rates for South Africa indicate that

just over ﬁve million people of the 46 million South Africans

were HIV positive in 2004, translating to a total prevalence

rate of 11 per cent

. The Aids pandemic in South Africa and

neighbouring countries remains a serious threat to the

economically active population.

Gold Fields has a comprehensive strategy against HIV and Aids. The Gold Fields strategy is based on three main pillars:

1. Prevention of new infections;

2. Support and treatment of HIV infected employees;

and

3. Rehabilitation and support, including home based

care, for those infected individuals who are no longer able to work.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

HIV/Aids

��

PREVENTING AN INCREASE IN WORKPLACE AND

COMMUNITY PREVALENCE

Prevention remains the cornerstone of Gold Fields’

anti-HIV/Aids strategy. All our employees are made aware

of the dangers of HIV/Aids through annual induction

training, the efforts of our 800 peer educators, awareness

events and through a new e-learning initiative piloted at

Kloof during F2005. A person-to-person education and

training strategy was adopted in April 2005 coinciding with

the national initiative to communicate with employees on a

more personal basis. The use of condoms outside faithful

relationships remains the most effective method of

preventing infection, with 1.2 million condoms having been

distributed to employees and communities in F2005.

Education and training also includes universal precautions,

post-exposure prophylaxis for occupational injuries and

rape, and the prevention of mother to child transmission

for HIV-positive women. In addition, our awareness and

education strategy includes the daily safety and toolbox

meetings that includes discussions on HIV/Aids awareness

and education.

MANAGING SEXUALLY TRANSMITTED INFECTIONS

We provide a 24-hour service for the management of

sexually transmitted infections (STIs) through our

healthcare network of primary health care clinics and

hospitals located in and around our operations. This is

augmented in all our host communities by the extensive

education, training, screening, treatment and preventative

therapy regarding STIs among people at high risk. We

undertake this in partnership with other mining companies,

spheres of government, the National Health Laboratory

Services, USAID and NGOs. Reducing the STI load on our

employees concomitantly reduces the risk of HIV infection

by up to tenfold. We managed to reduce the incidence of

STIs from 193 per 1000 employees per year in 1986 to

96 per 1000 employees in F2005.

SUPPORTING HIV POSITIVE EMPLOYEES

Gold Fields employees are encouraged to know their HIV

status. Informed, consented, voluntary counselling and

testing (ICVCT) is provided on-site at the mine-based

medical stations and our hospitals in South Africa.

From the total number of 43,942 employees currently

employed 6,578 have volunteered for testing and know

their HIV status.

Employees who test HIV positive are encouraged to enroll

in the Wellness programme. Here extensive education

takes place on “Living Positively”. They receive education

on condoms and prevention of re-infection, nutrition and

healthy lifestyle. At the Wellness clinic they are helped

with the psychological issues of facing a life with HIV and

encouraged to disclose to their partners and to get their

partners tested. At Wellness, HIV positive employees are

also monitored and screened at each visit for eligibility for

Anti-retroviral therapy and provided with prophylactic

treatment to prevent opportunistic infections and TB

where indicated. In Ghana, we are exploring a partnership

to establish a voluntary counselling and testing centre for

the Wassa West District near our Tarkwa mine in

co-operation with other mines and the National Health

Service. To date, 1,934 people have beneﬁted from our

HIV/Aids education activities in and around our operations

at Tarkwa and Damang.

THE ANTI-RETROVIRAL PROGRAMME

On 5 January 2004, we commenced treatment of the ﬁrst

patients on our Highly Active Anti-Retroviral Therapy

(HAART). In June 2004, Gold Fields Ghana followed suit

and, although Gold Fields Ghana’s prevalence remains

below 5 per cent, was deemed necessary to put in place

proactive measures to limit the spread of the pandemic. We

signed a Memorandum of Co-operation with the International

Labour Organisation on 17 November 2004 for the joint

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

implementation of their HIV/Aids programme based on the

ILO Code of Practice. Gold Fields is the ﬁrst mining company

in Ghana to jointly develop a HIV/Aids Policy with the Ghana

Mine Workers Union signed in July 2005.

Employees who qualify for anti-retroviral therapy are

counselled extensively by the dedicated and passionate

staff at the HAART clinics. Positive employees can, once

given all the facts about anti-retroviral therapy, elect to

enroll on the anti-retroviral therapy programme. Counselling

focuses on adherence to treatment and ongoing CD4 and

Viral load monitoring takes place. Positive reinforcement

and counselling takes place on each visit. Positive

employees are also encouraged to bring their spouses

along for counselling.

Approximately 81 per cent of the employees who started

on HAART since January 2004 have been retained on the

company programme, are still actively attending the clinic

and remain in our employ. Adherence statistics for Gold

Fields’ anti-retroviral programme are excellent. The six-

week adherence rate, based on a 1 log drop in viral load or

a viral load of <50, is 93.5 per cent. The one-year adherence

for those employees still following up at the HAART clinic

at this time, based on viral load suppression, is as follows:

• Viral load suppression to <400 copies per millilitre –

96 per cent.

• Viral load suppression to <50 copies per millilitre –

91 per cent.

The average CD4 count increase at three months on

treatment is 76 and the majority of employees tolerated

treatment well, with minimal side effects or toxicities,

good weight gain and showed an overall improvement in

health with decreased incidence of opportunistic infections.

From the total number of payroll 2 employees (as at June

2005), 6,578 know their HIV infection status and about

3,000 have enrolled in the Wellness programme of whom

2,284 regularly attend and are being screened for HAART

eligibility. Of those screened, 541 elected to take HAART

and 440 are still doing well and are back at work. Gold

Fields Ghana has two employees and their spouses doing

well on HAART and are awaiting the accreditation of the

ABA Hospital as an ART service provider.

The summary statistics for the ﬁrst 18 months of HAART

in Gold Fields in South Africa are:

Reasons for leaving:

Promoted and now accessing medical
scheme beneﬁts

Voluntary Ill health retirement

Voluntary retrenchment

Non-adherence to treatment

Left programme for other reasons

Treatment failure

Deaths

All Gold Fields Health doctors and HAART clinic nurses

have been trained in the advanced management of HIV

and anti-retroviral therapy and are sent on annual refresher

courses. With the ongoing support of the South African

HIV Clinician’s Society, Gold Fields HIV/Aids health care

provision remains in line with best global practice.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

HIV/Aids

(continued)

7,000 -

6,000 -

5,000 -

4,000 -

3,000 -

2,000 -

1,000 -

0 -

ICVCT

and Wellness and HAART

cumulative numbers

■

ICVCT

■

Started Wellness

■

Still on Wellness

■

Started HAART

■

Doing well on HAART

■

Drop outs from HAART

January 2004 to June 2005

NTOMBEKA FRANCINA KHETSHANA

Ntombeka is one of our valued Gold Fields employees

who is on anti-retroviral therapy and has openly

disclosed her status to management and her fellow

employees. She hopes that in so doing she will

encourage other employees to test for HIV and receive

the necessary help as well as help destigmatise HIV in

her work place.

IMPACT ON BUSINESS

Over the past ﬁve years we have been developing an

actuarial model in collaboration with the Risk Monitor Group

to quantify the HIV impact on Gold Fields in monetary terms.

This model is generally regarded as the most comprehensive

in the industry and produced robust ﬁgures, which were

pivotal in our strategic planning. We estimate that the total

cost of HIV to Gold Fields will peak in 2017 at US$5.85 per

ounce. The current cost is US$4.35 per ounce. Health care

and HIV programme costs (including HAART) will remain the

largest components of total HIV costs.

Gold Fields’ prevention programmes for neighbouring

communities have been developed through a portfolio of

public and private partnerships that include other mining

companies, spheres of government, the National Health

Laboratory Services, USAID and NGOs. Local partnerships

target high-risk groups to strive for behavioural change,

provide access to counselling, assist in the syndromic

management of STIs, and provide periodic presumptive

therapy and the promotion and distribution of condoms.

Rehabilitation and home based care

Gold Fields employees who are no longer able to work

due to their illness are offered ill health retirement

beneﬁts. As Gold Fields in South Africa uses the same anti-

retroviral therapy drug regimes as the South African

Department of Health, there is very little disruption in

treatment when an employee is transferred to a treating

facility at home.

The Hlalupilille Home Based Care (HBC) Project is further

testimony to the effectiveness of our partnership’s

network. Approximately 28,000 of our employees are

assured of quality HBC in their home areas.

ANNUAL EXTERNAL AUDIT

An annual external audit was conducted at end of F2005 to

evaluate existing STI, HIV and Aids programmes at Gold

Fields’ operations. The audit team consisted of three

independent experts from different professional ﬁelds of

HIV/Aids management. The methodology included interviews,

observations and focus group discussions. The audit

reported overall compliance with the requirements of a

workplace HIV/Aids programme while, meeting all the

criteria of the draft HIV/Aids Guide for the Mining Sector

for pilot testing. The audit team rated the Gold Fields HIV/

Aids programme a Blue Chip response with ﬁve red ribbons

– the highest rating.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Gold Fields strives to undertake its activities in a manner

that minimises or eliminates negative impacts and

maximises positive impacts of an environmental or socio-

economic nature. In Gold Fields, environmentally

responsible mining is the integration of environmental

management into all production operations and all staff

adopting the principles and practice of environmental

excellence. Guidance, coordination and leadership are

provided by environmentally qualiﬁed staff at each

operation and corporate ofﬁce.

Gold Fields subscribes to a philosophy where

environmentally responsible management starts with

designing and implementing good environmental

management systems and continues with the promotion

of a good environment and adequate controls. Although it

never ends, adequate planning and provision must be

made for closure. In the new ﬁnancial year, the provisioning

numbers will be revised and audited at all operations.

SPECIAL ACHIEVEMENTS

• The South African operations were re-certiﬁed in terms

of the revised ISO14001:2004 guidelines.

• At the Ghana 2005 World Environmental Day Celebration

held at Ho, in the Volta Region of Ghana on 6 June 2005,

the EPA awarded a shield entitled “Environmental

Committed Company Award for 2004 (Mining Sector)”

to Abosso Goldﬁelds Limited in recognition of high

commitment towards sustainable development and being

the ﬁrst mine in Ghana to post full a reclamation Bond.

• Damang and Tarkwa mines were identiﬁed by the Ghana

EPA as the two best performing mines in Ghana in terms

of environmental compliance and management in

conjunction with the EPA’s “environmental performance

disclosure programme.”

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Environment

• The international operations have retained their

ISO14001 certiﬁcation

• The exploration activities have been recommended for

ISO14001:2004 certiﬁcation and the certiﬁcates will be

issued in the new ﬁnancial year.

POLICY AND GOVERNANCE

An environmental policy statement ratiﬁed by the Health,

Safety and Environment Committee which is a

subcommittee of the board of directors, provides overall

direction and guidance for the site environmental

management. The Health, Safety and Environment

Committee meets on a quarterly basis and reports from

the various operations including management information

such as number and type of incidents, consumption of

resources, status of rehabilitation, water discharges and

consumption and general environmental management are

submitted to the committee prior to its quarterly meeting.

The Health, Safety and Environment Committee provides

feedback to the board. The environmental policy statement

was ratiﬁed during F2005.

A report on sustainable development and environmental

issues is compiled and submitted to the Operations

Committee on a weekly basis. It contains summarised

management information on the status of sustainable

development and environmental management, inclusive of

any environmental incidents that occurred during the week.

As part of its environmental management systems, the

company has implemented an incident classiﬁcation scheme

which classiﬁes incidents from level 1 to level 5 as follows:

• Level 1 – Incidents of minor non-compliance that result

in no or negligible adverse environmental impact.

• Level 2 – Incidents that result in short term, limited and

non-ongoing adverse environmental impact.

• Level 3 – Incidents that result in ongoing, but limited

environmental impact.

• Level 4 – Incidents that result in medium-term

environmental impact.

• Level 5 – Incidents that result in long-term environmental

impact.

ANNUAL INCIDENT STATISTIC TABLE

Level

F2002

F2003

F2004

F2005

112

565

1,222

1,174

144

208

129

With the implementation of certiﬁed environmental

management systems and the resultant incident reporting

protocol, an obviously high number of lower level incidents

are reported which indicates the protocol’s effectiveness.

The level 3 incidents relate to air quality and spills of

hydrocarbon and water.

All operations are staffed with suitably qualiﬁed, registered

professionals in accordance with the site needs. The staff

provide critical guidance to line personnel to ensure that

management system requirements are adhered to and

promoted and that environmental issues are integrated

into daily management of the site. The departments also

provide expert assistance regarding the various sectors of

environmental management.

In terms of the South African National Water Act, the South

African operations must apply for water licences when

directed to do so. Driefontein and Kloof have submitted

applications, but have not yet received their licences. The

previous authorisation of Driefontein has in the mean time

expired. Beatrix has entered the application process and in

agreement the Department of Water Affairs and Forestry

(DWAF) will soon submit their application.

During the year, St Ives amended its permits to allow the

discharge of up to 20 gigalitres of mine water per annum

to the Lake Lefroy salt lake from its lake-based and land-

based open cut and underground mining operations.

MANAGEMENT SYSTEMS

The original ISO14001 standard published in 1996 was

revised in 2004. It is envisaged that these will strengthen

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

the requirements and enhance the value that such systems

can add to our operations. During F2005, our Driefontein,

Kloof and Beatrix mines were re-certiﬁed in terms of the

ISO14001:2004 standard. The remaining operations have

retained their certiﬁcations and their re-certiﬁcations will

follow in F2006.

In addition, environmental management systems in

accordance with the ISO14001:2004 standard have been

implemented for our exploration ofﬁces and, following a

recent successful audit, have been recommended for

certiﬁcation.

A further initiative introduced during F2005 at the South

African operations to enhance environmental management

performance is a league system. This has been

implemented to identify and recognise examples of

environmental excellence and serves to gauge compliance

with management system requirements. It has led to

renewed enthusiasm for environmental performance

amongst employees.

ENVIRONMENTAL EDUCATION AND TRAINING

We believe that one of the fundamental pillars in achieving

solid environmental commitment and performance is the

education and competence of our people. Training is

provided in two different dimensions; ﬁrstly, that of

environmental awareness training through the induction

processes and, secondly, that of competence training,

which is task-speciﬁc, and trains individuals whose work,

based on a training needs analysis, could have an impact

on the environment.

In addition, we have been involved in setting up a number of

environmental education centres across South Africa. In

partnership with Rhodes University, The Gold Fields

Foundation has set up a trust fund to support post-graduate

PhD student research. During F2005, we developed a proposal

for a post-graduate course in environmental management in

mining. The proposal has been discussed with the Department

of Minerals and Energy.

BIODIVERSITY

The Driefontein and Kloof operations are situated on the

dolomitic formations of the West Rand which have

numerous cave systems that are of ecological and social

importance. Gold Fields founded the Karst Management

Committee speciﬁcally for the purpose of ensuring their

protection and proper management. The possibility of bat

populations resident inside the cave systems is most

important from an ecological point of view and the proper

management of these systems and habitats could hold

immense beneﬁts from a biodiversity point of view.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Environment

(continued)

ENERGY

Mining is by nature energy intensive. We are speciﬁcally

addressing the consumption of resources, which are

managed by site-speciﬁc management plans. In the past,

we focused on the complete implementation and integration

of environmental management systems, but our strategy in

F2005, signalled a shift towards environmental performance

by targeting consumption of resources such as electricity,

water, timber, caustic, et cetera. This process has started

with the compilation of information contained in the GRI

reports and the normalisation of the data reported.

WATER MANAGEMENT

In order to mine safely, water has to be removed from the

mine workings. This water is recycled and re-used on the

mine as far as possible. Excess water of good quality is

discharged with or without treatment, or used as a potable

water supply to preclude the need for importing water into

catchments. At Beatrix and St Ives, the natural quality of

the water prohibits disposal into streams or rivers and the

water is evaporated either in evaporation dams or natural

salt lakes.

In most instances, the water that is used in mining and

processing is obtained by pumping for re-use from the

mining operation, or is natural rainfall and runoff on the

mine area.

All Gold Fields’ operations operate in environments where

there are regulatory standards for water quality in natural

watercourses. Although there were minor incidents

resulting in regulatory values being exceeded for brief

periods, they did not pose any threat to the biosphere nor

have any other long-term impact.

WASTE MANAGEMENT

There are two main types of waste produced at the

operations. The ﬁrst type is process waste, which includes

tailings consisting of processing residues and waste rock.

The other type is refuse and recyclable materials such as

metals, plastic, timber, et cetera.

Tailings and waste rock are stored in specially designed

facilities approved and licensed by the regulatory

authorities. The quantities of these wastes are in direct

relation to the ore body mined and cannot be reduced,

but are managed to reduce environmental impact.

The amount of waste rock will vary from operation to

operation in terms of the gold grade encountered. Typically,

the South African operations being deep underground,

higher-grade mines, generate less waste rock than found

at the international open cast operations.

Refuse and waste materials are managed through the

ISO14001 certiﬁed environmental management systems

to optimise recycling or, failing that, by disposal at approved

facilities. The data indicate that signiﬁcant improvements

have been achieved in recycling waste products, mainly

attributable to the implementation of procedures governing

the disposal of waste, including protocols regarding the

separation of different waste types. The operations have

also implemented protocols relating to hazardous materials

types such as hydrocarbons, ﬂuorescent tubes and

chemical containers. Although there is a cost associated

with the correct disposal of hazardous wastes, these are

often offset by revenues generated from the recycling of

various materials.

RESOURCE CONSUMPTION

The main products consumed at the mines are cyanide,

timber, blasting agents, acids, steel, diesel, caustic soda

and lime.

There are signiﬁcant differences in cyanide consumption

between the various operations as a result of different

process routes and of the ore body mineralogy requiring

more cyanide to extract gold at some operations than

others. Cyanide consumption is related to production rates

with higher production meaning higher cyanide

consumption.

Timber is used primarily at the South African operations to

support the underground workings. Timber consumption is

also largely a factor of production although technological

advances have seen reduced timber usage.

Similarly, blasting agent consumption is directly linked to

productivity.

LAND MANAGEMENT

Almost 12,000 hectares of land have been disturbed by

Gold Fields’ operations to date. The South African

operations are predominantly underground and the rate at

which new land is disturbed is lower than at open cast

operations.

To date about 850 hectares have been rehabilitated and

about 1,300 hectares have been vegetated. This year about

462 hectares were disturbed, 37 rehabilitated and

133 hectares vegetated. Where necessary, ﬁnancial

provision is made for rehabilitation at mine closure.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

CLOSURE PLANNING

All operations regularly review their closure plans and the

ﬁnancial provisions for rehabilitation. The processes for the

reviewing and provisioning are also being upgraded, in

collaboration with the relevant regulatory bodies. Through

the sustainable development process, the local

communities are also involved in the closure process.

ENVIRONMENTAL DATA

Quantitative environmental information is included in

operational data systems and often dispersed through

different sets of information at the operations. The collation

of quantitative information that is amenable to environmental

interpretation and application has proved a tedious task.

The Global Reporting Initiative (GRI) provides valuable

guidelines for reporting standards and all Gold Fields

operations are working toward aligning themselves with

these guidelines. The procedure associated with the

reporting of greenhouse gas emission has proven

particularly challenging. To address this, the various data

are being quantiﬁed either through direct measurement or

through indirect calculations based on empirical data.

Accompanying environmental data is found on page 99.

CYANIDE MANAGEMENT

All Gold Fields’ operations have reviewed their cyanide

management processes and found them substantially aligned

with the International Cyanide Management Code (ICMC).

CONCLUSION

Gold Fields does not regard environmental management as

mere compliance with regulations. We are proactive and

responsible in our application of environmental management

and in bringing about improvement to those standards.

During 2005, progress was made in the practical application

of management measures and in inculcating an awareness

of environmental responsibility in employees at all levels.

Our ongoing commitment to responsible mining is evident

through innovative improvements at our operations and the

various certiﬁcations in terms of ISO14001:2004.

TOTAL MATERIALS USED, OTHER THAN WATER,
BY TYPE*

F2004

F2005

Cyanide (tons)

Driefontein

1,200

1,540

Kloof

1,100

1,380

Beatrix

1,050

1,100

Tarkwa

7,200

10,300

Damang

2,200

2,030

St Ives

2,900

2,890

Agnew

3,200

600

Timber (tons)

Driefontein

63,200

45,100

Kloof

71,600

39,900

Beatrix

46,200

46,100

Tarkwa

Damang

St Ives

Agnew

Blasting agents

Driefontein

3,100

1,400

(tons)

Kloof

1,900

1,300

Beatrix

5,600

4,600

Tarkwa

14,700

23,000

Damang

2,100

1,300

St Ives

3,300

4,000

Agnew

500

1,700

HCl (tons)

Driefontein

640

2,690

Kloof

1,010

790

Beatrix

780

840

Tarkwa

600

1,100

Damang

190

200

St Ives

320

370

Agnew

460

150

Lime (tons)

Driefontein

4,000

7,600

Kloof

6,400

9,100

Beatrix

3,700

3,900

Tarkwa

2,500

Damang

3,000

3,500

St Ives

16,200

18,300

Agnew

100

2,400

Cement (tons)

Driefontein

700

900

Kloof

4,156

4,200

Beatrix

1,400

1,100

Tarkwa Excl
Contractors

63,400

72,100

Damang Excl
Contractors

St Ives

11,500

Agnew

1,600

2,400

Caustic Soda

Driefontein

410

650

(tons)

Kloof

390

510

Beatrix

490

530

Tarkwa

300

Damang

350

330

St Ives

270

370

Agnew

270

280

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Environment

(continued)

DIRECT ENERGY USED SEGMENT
BY PRIMARY SOURCE*

F2004

F2005

Electricity (MWh)

Driefontein

1,895,000

1,874,000

Kloof

1,929,000

1,766,000

Beatrix

970,000

953,000

Tarkwa

80,000

163,000

Damang

113,000

108,000

St Ives

157,000

148,000

Agnew

48,000

46,000

Electricity (TJ)

Driefontein

6,820

6,740

Kloof

6,950

6,360

Beatrix

3,490

3,430

Tarkwa

290

590

Damang

410

380

St Ives

560

530

Agnew

170

160

Diesel (TJ)

Driefontein

Kloof

149

113

Beatrix

Tarkwa

1,168

1,300

Damang

398

370

St Ives

919

825

Agnew

114

271

Petrol (TJ)

Driefontein

9.9

10.2

Kloof

13.0

4.8

Beatrix

9.0

7.3

Tarkwa

0.7

0.7

Damang

0.0

0.0

St Ives

4.3

3.6

Agnew

0.5

0.3

LPG (TJ)

Driefontein

3.5

4.2

Kloof

3.9

3.2

Beatrix

4.6

0.0

Tarkwa

4.8

6.1

Damang

75.5

80.3

St Ives

42.0

39.1

Agnew

11.2

21.7

TOTAL WATER USE*

F2004

F2205

Total water
withdrawal (m

)

Driefontein

13,600,000

18,200,000

Kloof

23,000,000

25,500,000

Beatrix

14,400,000

15,100,000

Tarkwa

4,600,000

5,200,000

Damang

700,000

800,000

St Ives

10,800,000

3,600,000

Agnew

1,600,000

2,100,000

GREENHOUSE GAS EMISSIONS*

F2004

F2005

CO2 (tons)

Driefontein

not reported

not reported

Kloof

not reported

not reported

Beatrix

6,000

18,000

Tarkwa

87,000

96,000

Damang

35,000

33,000

St Ives

194,000

160,000

Agnew

42,000

64,000

, SO

AND OTHER SIGNIFICANT AIR EMISSIONS*

F2004

F2005

(tons)

Driefontein

Kloof

Beatrix

Tarkwa

376

1,237

Damang

307

290

St Ives

718

Agnew

(tons)

Driefontein

2.0

Kloof

2.9

Beatrix

1.5

Tarkwa

20.7

171.7

Damang

56.6

52.6

St Ives

152.1

137.7

Agnew

2.2

58.8

TOTAL AMOUNT OF WASTE BY TYPE AND
DESTINATION*

F2004

F2005

Tailings to dams
(tons)

Driefontein

5,129,000

6,534,000

Kloof

4,930,000

5,128,000

Beatrix

4,566,000

4,118,000

Tarkwa

3,190,000

Damang

5,236,000

5,215,000

St Ives

3,118,000

3,753,000

Agnew

1,179,000.00

1,170,000

Waste rock to
dumps

Driefontein

613,000

385,000

Kloof

545,000

625,000

Beatrix

811,000

722,000

Tarkwa

45,572,000

61,666,000

Damang

9,855,000

9,050,000

St Ives

20,054,000

20,360,000

Agnew

2,060,000

*Note: Unaudited figures. This is the ﬁrst analysis ofenvironmental impact data and we aim to reﬂect more comprehensive audited data in future reports.

TJ = Tetrajoules

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

South

Africa

Ghana

Australia

Net sales (Rm)

7,394

2,433

1,929

Total employees*

41,500

2,000

321

Cost of materials
purchased (Rm)

1,524

2,000

321

Total payroll and
beneﬁts (Rm)

3,321

155

109

Community
donations (Rm)

10.0

0.7

Taxes paid (Rm)

121

Investment in capital
expenditure (Rm)

636

536

842

Excludes employees in exploration and development, and in Peru.

As the world’s fourth largest gold producer, we are proud of

the numerous socio-economic beneﬁts we have generated

in the course of conducting our domestic and international

businesses. This economic footprint represents the total

impact we have had in our dealings with stakeholders.

We can measure this economic impact directly and indirectly.

Direct beneﬁts focus on the traditional ﬁnancial indicators

and measure monetary ﬂows between Gold Fields and its

key stakeholders. Indirect beneﬁts refer to the intangible

beneﬁts that do not appear in ﬁnancial statements.

DIRECT IMPACTS

Employment

Gold Fields employed 43,942 people globally in F2005 and

their earnings contribute directly to their local economies.

Our total wage and salary bill, including all wage-related

costs such as pension and medical contributions, housing

allowances and other employee beneﬁts paid by the Group,

amounted to R3 billion.

100

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Economic

footprint

Procurement

Our South African and international mining activities have

helped create and support a number of downstream

businesses. In F2005, approximately 42* per cent of total

costs was attributable to procurement of supplies and

services. R1.92 billion was spent in South Africa and

R2.11 billion internationally.

As part of our commitment to increase the participation of

HDSAs in the South African economy, we increasingly do

business with small and medium size enterprises on a

competitive basis. Procurement from such companies

increased from 18 per cent in F2004 to 25 per cent in F2005.

Providers of capital

In F2005, Gold Fields paid out R86.8 million in interest to

the providers of debt capital. Our shareholders, who are

based throughout the world, received R345 million in

dividends. Gold Fields has maintained a dividend policy of

paying 50 per cent of earnings for the year, before taking

into account investment opportunities. Since 1998, Gold

Fields has paid out R4.5 billion in dividends to our

shareholders.

Supporting public sector initiatives

Because of the long-term nature of our commitment to the

businesses in the countries where we operate, we

constitute a reliable source of revenue thereby enabling

governments to develop and maintain various public sector

initiatives and sustainable development programmes. In

F2005, Gold Fields paid a total of R262 million in taxes –

R63 million in South Africa, R121 million in Ghana and

R109 million in Australia.

Refers to cost of goods and materials and services purchased,
including costs of contractors and excluding capital expenditure.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

101

INDIRECT IMPACTS

Progressing empowerment

We support the imperative of economic realignment in

South Africa and encourage the broad-based participation

of HDSAs in the economy. This is reﬂected in the conclusion

of our empowerment transaction with Mvelaphanda

Resources enabling them to acquire a 15 per cent equity

interest in the South African gold mining assets of Gold

Fields within a ﬁve-year period for a cash consideration of

R4.1 billion.

We support the South African government’s initiatives on

the New Partnership for Africa Development (NEPAD) and

its commitment to the development of the African

continent. We are a member of the NEPAD business

initiative and a signatory of the initiative’s business

covenant on corporate governance; its business declaration

on corporate responsibility; the business covenant on the

elimination of corruption and bribery; as well as the

business declaration on accounting and audit practices.

In addition, we focus strongly on Africa in our exploration

activities.

DIRECT INVESTMENT

Local direct investment

Gold Fields has invested approximately R5 billion in our

South African operations over the past ﬁve years. This

includes the spend on building new long-life shafts at

Driefontein, Kloof and Beatrix; the upgrading of our

metallurgical plant facilities; and the improvement of

underground working conditions. We have also invested in

our ore bodies by improving our available ore reserves

position at our long-life shafts to more than 18 months.

We continue to invest in developing the skills of our people

through education and training programmes.

Foreign direct investment (FDI)

Gold Fields will continue to be a source of FDI to Ghana

and Australia. FDI not only creates employment and adds

to the economic health of a nation, but also stimulates

support industries while creating a platform from which

the transfer of knowledge, skills (human capital), technology

and best practice can be pursued. We have successfully

concluded a US$160 million capital investment project

involving conversion to owner mining and a mill expansion

at our Tarkwa (Ghana) mine and have also completed a

A$125 million mill expansion programme at our St Ives

mine in Australia.

Community development

During F2005, we invested R35 million in uplifting

communities in which we operate or from which we draw

labour through numerous development projects. Many of

the communities suffer from poverty, poor infrastructure

and low literacy levels and our projects largely aim at

improving these conditions and creating better community

relations.

Beneﬁciation

Gold Fields, AngloGold Ashanti, SAAB and Standard Bank

of South Africa established a gold advance scheme in order

to facilitate the provision of secure and cost effective

advances of gold to the South African gold jewellery

manufacturing industry. Details of this gold advance

scheme appear on page 26 of this annual report.

2005

2004

VALUE ADDED

Turnover

11,756.3

11,772.8

Cost of materials and services

6,167.0

6,026.8

Value added by operations

90.4

5,589.3

91.8

5,746.0

Realised and unrealised gains on
ﬁnancial instruments

5.6

344.0

2.1

129.0

Proﬁt on sale of investments

0.8

50.3

1.5

95.6

Proﬁt on sale of exploration rights

0.7

46.6

—

Proﬁt on sale of mineral rights

—

3.0

187.2

Other income

2.5

152.4

1.6

98.5

100.0

6,182.6

100.0

6,256.3

Employees
Salaries, wages and other beneﬁts

63.1

3,901.0

57.4

3,589.0

Providers of capital

7.2

443.4

11.1

695.9

Dividends paid to shareholders

5.6

344.5

10.7

669.1

Finance cost

1.6

98.9

0.4

26.8

Government
Taxation

4.2

262.1

3.3

206.6

Re-invested in the group

25.5

1,576.1

28.2

1,764.8

Amortisation and depreciation

24.4

1,512.1

19.7

1,236.3

Impairment of assets

4.2

260.9

6.8

426.2

Deferred taxation

(2.6)

(160.6)

(2.3)

(146.1)

Minority shareholders’ interest

2.1

128.5

2.4

149.9

Retained earnings for the year

(2.7)

(164.8)

1.6

98.5

100.0

6,182.6

100.0

6,256.3

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Group

value-added statement

for the year ended 30 June 2005

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

103

RISK MANAGEMENT OBJECTIVES

Gold Fields seeks to create enduring shareholder value in

the pursuit of its mission to be a leading, value adding,

globally diversiﬁed precious metals producer, through the

responsible, sustainable and innovative development of

quality assets. Inherent in any process of shareholder value

creation is the acceptance of reasonable levels of risk, in

order to achieve commensurate ﬁnancial reward. To this

end, the Group remains committed to upholding sound

corporate governance practices in its quest to ensure that

the wide range of risks associated with the Group’s global

operations is effectively managed through a holistic

approach to risk management.

RISK MANAGEMENT STRUCTURES

The Gold Fields approach to risk management is articulated

in its Group Risk Policy, which lays the foundation for

consistent, comprehensive and systematic risk assessment

and reporting procedures across the Group. Management

committees at various levels in the organisation review

and report on the Group’s most signiﬁcant risks, along with

data on the controls and risk mitigation strategies that are

in place to reduce the levels of risk facing the company.

Each management committee bears responsibility for

assessing the effectiveness of internal controls for the

material risks related to their spheres of governance. These

responsibilities include documented and tested business

continuity plans that ensure the continuance of business

critical activities as a result of unforeseen circumstances.

The board, assisted by its nominated committees, is

responsible for the overall system of risk management and

accordingly monitors the Group’s key risks and the internal

control environment on an ongoing basis, ensuring that

internal controls provide reasonable assurance that business

objectives will be met. These risk management structures

and processes have been in place for the period under

review and up to and including the date of approval of this

annual report and ﬁnancial statements.

RISK MITIGATION RESPONSES

The risk assessment process during the year under review

highlighted various key risk categories that could affect

Gold Fields. There may be additional risks unknown to

Gold Fields at this time, and other risks that are currently

believed to be immaterial, that could turn out to be material.

These factors, should they materialise, could materially

affect the Group’s results. All risk information contained in

this section, should be considered in conjunction with any

forward looking statements in this document.

Risk

management

RISK MANAGEMENT STRUCTURE

POLITICAL

The global mining sector is subject to unexpected changes

in regulatory requirements, potentially resulting in ﬁnancial

demands being made against the company. These changes

could include but are not limited to, beneﬁciation provisions,

royalties, health levies and other taxes and licences. These

uncertainties can have a signiﬁcant effect on overall

proﬁtability and the attractiveness of operating in certain

geographical regions. In addition, there is ongoing activism

against mining activities in many countries, resulting in

both impracticable demands on the industry and shrinkage

in attractive mining locales. Gold Fields is particularly

conscious of these dynamics in the global arena and

ensures that in each country of operation there is ongoing

dialogue and relationship building with both governmental

and non-governmental stakeholders. Sectoral lobbying and

stakeholder expectation management is further handled

via industry bodies.

FINANCIAL

As a producer of gold, Gold Fields is subject to sharp

market ﬂuctuations in both commodity prices and exchange

rates. These ﬂuctuations could have an adverse impact on

the Group’s asset values, earnings and cash ﬂows. In

particular, the proﬁtability of marginal operations is severely

impacted by these ﬂuctuations, as is long-term decision

making on mine-deepening projects in South Africa. Rising

commodity input costs, driven by strong global demand for

diesel, steel and certain chemicals, have also impacted on

production costs. Gold Fields’ response to these volatilities

has been the introduction of various projects, such as

Project 400, Project 100, Project 100+ and Project Beyond.

Project 400 is focused on increasing reserve through

quality mining while Project 100, 100+ and Beyond aims to

reduce costs generally and therefore the impact of these

rising commodity costs.

There is also a strong focus on various productivity

improvement initiatives in order to reduce the pressure on

margins and contain costs. Increasing the demand for gold

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management

(continued)

and thus encouraging an improved gold price is an issue

that is addressed on a world-wide basis through

representation on the World Gold Council.

ORE RESERVES

Gold Fields’ operations face various uncertainties when

estimating ore reserves and delivering on forecast grades,

due to the inherently risky nature of mining. Reserve

estimates may change signiﬁcantly over time when new

information becomes available and product price or

currency ﬂuctuations may cause lower grade reserves to

become uneconomic, resulting in a restatement of reserves.

Any signiﬁcant change in the ore reserve may impact on

the company’s cash ﬂow and proﬁtability. Gold Fields

operates a world-class minerals and resource management

programme in an effort to reduce exposure to this risk, with

highly experienced staff constantly monitoring pertinent

geological assumption changes.

ENVIRONMENTAL AND SOCIAL

A key constraint impacting on the mining sector today is the

extensive number of environmental laws and regulations and

high community expectations, which set limits on conditions

of operation in various jurisdictions. Compliance with changing

regulatory standards and community expectations holds the

potential for increased costs and/or possible litigation that

would impact negatively on cash ﬂow and earnings. Gold

Fields’ approach has been to establish a track record of

constructive community engagement and consultation in

order to build sound relationships with all stakeholders affected

by mining operations. Gold Fields seeks compliance with

applicable environmental legislation and focuses rigorously on

meeting changes to environmental legislation. Gold Fields

aspires to ensure the sustainability of its operations and as a

consequence, reports on a triple bottom line basis in

accordance with the Global Reporting Initiative requirements.

HEALTH

The occupational illnesses associated with mining

operations are those caused by inter alia, excessive

exposure to heat, dust, noise, radiation, vibration and

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Gold Fields Limited Annual Report 2005

105

gasses. Consequently, the mining industry is subject to

stringent health and safety laws and regulations that are

subject to change from time to time. The Group’s

various operations comply fully with these laws and

regulations, for example in the Group’s South African

operations, the respirable silica dust concentration is on

average 65 per cent below the occupational exposure limit

set by the Department of Minerals and Energy. In the

event of changes to health and safety legislation the

Group’s various operations may incur additional costs in

order to comply with any new laws and regulation. In

addition, the industry as a whole is experiencing the effects

of medical pandemics such as HIV/Aids and TB. These

medical conditions adversely affect productivity, medical

costs to the industry and absenteeism. The Group’s various

operations seek to comply fully with applicable health and

safety legislation and to ensure that all their employees

adhere to their safety standards. HIV/Aids and TB have

been aggressively targeted with a strong focus on

prevention through education initiatives and community

involvement as well as an employee Wellness programme

for those that are affected.

HUMAN RESOURCES

On a global basis the mining industry is currently facing a

contraction in the availability of required skills that could

have a negative impact on both productivity and

employment costs. Gold Fields pursues a broad based

strategy with regard to attracting and retaining appropriate

skills, encompassing highly competitive compensation

models, attractive career development opportunities and

skills development programmes. In addition, South African

operations are subject to the Mining Charter and Scorecard,

which inter alia seeks to:

• promote equitable access to South Africa’s mineral

resources for all people in South Africa;

• substantially and meaningfully expand opportunities for

historically disadvantaged South Africans (HDSAs),

including women, to enter the mining and minerals

industry and to beneﬁt from the exploration of South

Africa’s mineral resources;

• utilise the existing skills base for the empowerment of

HDSAs;

• expand the skills base of HDSAs in order to serve the

community;

• promote employment and advance the social and

economic welfare of mining communities and areas

supplying mining labour; and

• promote beneﬁciation of South Africa’s mineral

commodities beyond mining and processing, including

the production of consumer products.

Whilst Gold Fields believes that it has made signiﬁcant

progress towards meeting the charter requirements, any

regulatory changes to these, or failure to meet existing

requirements, could adversely affect Gold Fields’ ability to

convert its old to new order mining rights in South Africa.

RISK FINANCING

The Group’s risk ﬁnancing philosophy and practices were

largely unchanged during the year under review. Overall

insurance policy limits for the period ending 30 June 2005

remained unchanged at US$100 million per event for

an underground loss and US$300 million per event for

a surface loss. However, revised estimates for the period

commencing 1 July 2005, indicate that the maximum

foreseeable loss per event for an underground loss has

increased to US$83 million and a surface loss, to

US$67.5 million. As a result, the Group has increased the

insurance policy limit to US$125 million for an underground

loss and to US$400 million for a surface loss. The Group

continues to insure on a standing charges only (ﬁxed cost)

basis of business interruption cover in an effort to contain

costs. Should the Group suffer a major loss, future earnings

could be affected.

INTRODUCTION

Gold Fields has, since its inception, been committed to

upholding sound principles of corporate governance in all of

its business dealings and in respect of all of its stakeholders.

As the focal point of the company’s corporate governance

system, all board members are expected to discharge their

ﬁduciary duties and responsibilities professionally and in

accordance with the company’s code of ethics, thereby

upholding the company’s core values of integrity,

transparency and enterprise enshrined in this code.

Gold Fields continues to endorse the principles contained in

the South African Code of Corporate Practices and Conduct

as recommended in the Second King Report (“the 2002

King Report”) and believes that it complies substantially

and materially with its provisions. Going forward, adherence

to sound principles of corporate governance is and will

remain both a board and a management priority.

The company’s shares are listed on the JSE Securities

Exchange, South Africa (“the JSE”). As such the company

is required to comply with the listings requirements of the

JSE, including those recommendations of the 2002 King

Report that have been codiﬁed in the listings requirements

(“the JSE Listings Requirements”). The shares of the

company also trade in the United States of America

(“USA”) on the New York Stock Exchange (“NYSE”) and

are registered with the United States Securities and

Exchange Commission (“SEC”). As such, the company is

subject to the disclosure, corporate governance and other

requirements of the NYSE, in so far as same relate to

foreign private issuers such as Gold Fields, as well as with

those provisions of the Sarbanes-Oxley Act of 2002 which

are applicable to foreign private issuers.

A list of differences between the corporate governance

practices to which Gold Fields is subject in South Africa

and those followed by US listed companies under the

NYSE Listed Company Manual Rules has been prepared

and is available on the Gold Fields web site

(www.goldﬁelds.co.za).

BOARD OF DIRECTORS

Gold Fields is governed by a unitary board which may not,

in terms of its articles of association, comprise less than

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Gold Fields Limited Annual Report 2005

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Corporate

governance

four nor more than 15 directors. In accordance with the

company’s articles of association and following an invitation

from Gold Fields to Norilsk Nickel to nominate two

members to the Gold Fields board, Dr A Grigorian and

Mr S Stefanovich were appointed as non-executive

directors of the company by the board with effect from

21 June 2005. The credentials of both new board members

were reviewed by the board prior to their respective

appointments and both have received induction material

and information relevant to their obligations as directors as

well as the company’s history, activities, and business. As

such, the board currently comprises two executive

directors and, with the recent appointments of Dr A Grigorian

and Mr S Stefanovich, 13 non-executive directors.

The ofﬁces of the chairman and that of the chief executive

ofﬁcer are separate from one another and are currently

ﬁlled by an independent non-executive director

(Mr C M T Thompson) and an executive director

(Mr I D Cockerill) respectively.

In keeping with the recommendations of the 2002 King

Report, the Gold Fields board comprises a signiﬁcant

majority of non-executive directors of whom sufﬁcient are

independent of management so that shareowner interests

(including minority interests) can be protected. These non-

executive directors, each of whom is an experienced

professional, make a signiﬁcant contribution towards the

board’s deliberations and decisions. Non-executive

directors do not receive any remuneration from the

company for their services as directors other than the fees

and the share options detailed in the Directors’ Report on

page 136 of this annual report.

The board reviews the status of its members on an ongoing

basis and, based on its deliberations, currently considers at

least nine of the current complement of 13 non-executive

directors to be independent, as deﬁned in the JSE Listings

Requirements. Mr Thompson, who could previously not be

categorised as independent by virtue of his employment

by the company until 30 June 2002, became an independent

non-executive director of Gold Fields in accordance with

the JSE Listings Requirements with effect from 1 July 2005.

The board therefore comprises a majority of non-executive

directors who are also independent.

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Gold Fields Limited Annual Report 2005

107

In its deliberations, the board determined that Dr Grigorian

and Mr Stefanovich could not be categorised as independent

by virtue of them being representatives of Norilsk Nickel, a

signiﬁcant shareowner of the company. The board also

considered that the contractual arrangements in place

between Gold Fields Group members and Mvelaphanda

Resources Limited (of which Messrs Sexwale and van

Rooyen are both executive directors) might, in certain

circumstances, be signiﬁcant enough to interfere with the

categorisation of these non-executive directors as

independent.

Details of the directors and their status as executive,

non-executive or independent appear on page 6 of this

annual report.

The board regularly monitors and appraises its performance.

However, as a result of the time constraints placed on the

board by the unsolicited and hostile bid for control of

the company by Harmony Gold Mining Company Limited,

the board did not monitor and appraise its performance

during the period of the bid.

BOARD CHARTER

Gold Fields’ mission is to be a leading, value adding,

globally diversiﬁed, precious metals producer through the

responsible, sustainable and innovative development of

quality assets.

The board of directors seeks to promote the pursuit of this

mission while upholding sound principles of corporate

governance, the interests of communities that it affects,

responsible citizenship and the best interests of its

shareholders. Ultimately, the board seeks to create enduring

shareholder value in a responsible and ethical manner.

It seeks to pursue this mission in accordance with a formal

board charter. The charter, which is available on the Gold

Fields web site (www.goldﬁelds.co.za), articulates clearly

and concisely, the objectives and responsibilities of the

board. It recognises the desirability of having a board

composed of a majority of independent directors with the

requisite skill mix and geographic background to meet the

company’s evolving needs in a collective way, ensuring a

balance of power and authority, such that no one individual

has unfettered powers of decision-making.

As set out in its charter, the board’s responsibilities include:

• determining the company’s code of ethics and conducting

its own affairs in a professional manner, upholding the

core values of integrity, transparency and enterprise;

• evaluating, determining and ensuring the implementation

of corporate strategy and policy;

• monitoring the performance of the company, including

operational performance and management performance

against the company’s strategic plans;

• the overall system of risk management and monitoring

risk exposures and controls;

• developing and setting disclosure and reporting practices

to best serve the needs of its shareholders;

• regularly monitoring and appraising its own performance;

• seeking to ensure ethical behaviour and compliance

with relevant laws, regulations, audit and accounting

principles/practices, the company’s own governing

documents and code of ethics; and

• providing counsel and advice to the CEO and his team

on all critical and sensitive matters.

As the focal point of the company’s corporate governance

system, the board has put in place structures and processes

designed to support it in the fulﬁllment of its function,

which structures and processes are monitored and

reviewed for effectiveness on an ongoing basis.

Each of the directors has unrestricted access to the advice

and services of the company secretary, to management

and company information, and is entitled to seek

independent professional advice at the company’s

expense, in discharging his duties as a director.

STAGGERED ROTATION OF DIRECTORS

One-third of directors must retire from ofﬁce at each

annual general meeting of the company, with the ﬁrst to

retire being those appointed as additional members of the

board during the year, followed by the longest serving

members. Retiring directors are free to make themselves

available for re-election and may, as such, be re-elected at

the annual general meeting at which they retire.

BOARD MEETINGS AND ATTENDANCE

The board is required to meet at least four times a year and

regularly without its executive members. However, the

announcement on 18 October 2004 by Harmony Gold

Mining Company Limited of an unsolicited and hostile offer

to acquire control of Gold Fields required the board to meet

on many more occasions during the year under review.

The board met on 27 occasions during the year under

review. The record of attendance by members of the board

at such meetings is contained in the table below.

Director name

No of meetings attended

C M T Thompson

I D Cockerill

N J Holland

A J Wright

G J Gerwel

J M McMahon

G R Parker

R L Pennant-Rea

P J Ryan

T M G Sexwale

B R van Rooyen

C I von Christierson

K Ansah

BOARD COMMITTEES

In accordance with its charter and in order to assist in the

discharge of its duties, the board has established a number

of standing committees composed entirely of non-executive

directors. These committees comprise the Nominating and

Governance Committee, the Audit Committee, the

Compensation Committee and the Health, Safety and

Environment Committee, all of which operate in accordance

with written terms of reference, which terms of reference

were approved by the board and are available on the

company’s web site (www.goldﬁelds.co.za) or from the

company’s secretarial ofﬁce, on request.

In response to the announcement on 18 October 2004 by

Harmony Gold Mining Company Limited of an unsolicited

and hostile bid for control of the company, the board

established an ad hoc Defence Committee, which committee

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governance

(continued)

assisted the board in its formulation and direction, at a

strategic level, of the company’s response to such bid.

With the exception of the Nominating and Governance

Committee, each of the standing board committees is

chaired by an independent, non-executive director. As set

out above, Mr Thompson, who chaired the Nomination

and Governance Committee for the period under

review, only became an indpendent director with effect

from 1 July 2005. Each such committee is required to

evaluate its own effectiveness and performance from time

to time, with the Nominating and Governance Committee

monitoring and reporting to the board periodically on such

performance and effectiveness. However, as a result of

the time constraints placed on the board and its committees

by the unsolicited and hostile bid for control of the company

by Harmony Gold Mining Company Limited, the committees

did not monitor and appraise their respective performances

during the period of the bid.

In view of the responsibilities of members of these

committees beyond their functions as directors, each

member is paid remuneration in addition to the annual fee

payable to directors, which remuneration is recommended

by the board and requires approval in advance by the

shareholders of the company in general meeting.

NOMINATING AND GOVERNANCE COMMITTEE

As recommended by the 2002 King Report, the Nominating

and Governance Committee is chaired by the chairman of

the company, Mr C M T Thompson. Messrs P J Ryan,

T M G Sexwale and B R van Rooyen are the other members

of this committee. Inter-alia, its written terms of reference

require this committee to:

• develop the approach of the company to matters of

corporate governance and make recommendations to

the board with respect to all such matters;

• identify a successor to the chairperson and chief

executive ofﬁcer and make recommendations in this

regard to the board as a whole;

• consider the mandates of board committees, the

selection and rotation of committee members and

chairpersons as well as the performance and effectiveness

of each board committee on an ongoing basis;

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Gold Fields Limited Annual Report 2005

109

• evaluate the effectiveness of the board and its

committees and management as a whole and report

thereon to the board.

The JSE Listings Requirements stipulate that all members

of this committee must be non-executive directors, of

whom the majority must be independent. While all of the

members of this committee are non-executive directors,

the chairperson of the board, required in terms of the JSE

Listings Requirements to be the chairperson of this

committee, only ceased to be an executive director of the

company on 30 June 2002 and was, as such, considered

not to be independent until 1 July 2005. The board has also

determined that Messrs Sexwale and van Rooyen may, in

certain circumstances, not be considered independent in

light of the contractual arrangements existing between

members of the Gold Fields Group and Mvelaphanda

Resources, of which both are executive directors.

Nonetheless, the board is satisﬁed that these considerations

do not detract from the ability of these directors to play a

value-adding role on this board committee.

During the period of the unsolicited and hostile bid for

control of the company by Harmony Gold Mining Company

Limited, commencing on 18 October 2004, the full board

assumed the responsibilities of the Nominating and

Governance Committee. As a result, the Nominating and

Governance Committee met on only one occasion during

the year under review. The record of attendance by

members at such meeting is contained in the table below.

Member name

Meeting attended

P J Ryan

T M G Sexwale

B R van Rooyen

C M T Thompson

AUDIT COMMITTEE

The Audit Committee, which comprises A J Wright

(Chairman), G J Gerwel, R L Pennant-Rea, B R van Rooyen

and C I von Christierson, is required to meet at least

quarterly every year and to, monitor and review:

• the effectiveness of the Group’s information systems

and other systems of internal control;

• the effectiveness of the internal audit function;

• the reports of both the external and internal auditors;

• the quarterly and annual reports and speciﬁcally the

annual ﬁnancial statements;

• the annual report on Form 20-F ﬁled with the SEC;

• the accounting policies of the Group and any proposed

revisions thereto;

• the external audit ﬁndings, reports and fees and the

approval thereof; and

• the compliance with applicable legislation, requirements

of regulatory authorities and the company’s code of

ethics.

All members of the Audit Committee are non-executive

directors. The majority is also considered to be independent

as deﬁned in the 2002 King Report. In addition, the majority

of members is ﬁnancially literate and has had sufﬁcient

ﬁnancial experience to discharge their duties.

The internal and external auditors have unrestricted access

to the Audit Committee and its chairman, ensuring that

their independence is in no way impaired.

The Group internal audit function is headed by the senior

manager, internal audit. The Audit Committee monitors,

supervises and evaluates the effectiveness of the internal

audit function, which function reports to the chief executive

ofﬁcer but has access to both the board chairperson and the

chairperson of the Audit Committee. The Audit Committee

determines the purpose, authority and responsibility of the

internal audit function in an Internal Audit Charter, which

charter has been approved by the Audit Committee. The

Audit Committee has the authority to appoint and dismiss

the head of the Group internal audit function.

The Audit Committee is required to approve all signiﬁcant

non-audit relationships with the company’s independent

auditor. For the period under review, the Audit Committee

has approved, and the company’s independent auditor has

performed, the following non-audit services: Sarbanes-

Oxley Section 404 implementation assistance, reporting

accounts reports on the IAMGold transaction, accounting

advice and taxation services. In consideration for

rendering these services, the company has paid the

independent auditor an amount of R5.6 million.

In addition, the Audit Committee is responsible for the

oversight of the work of the independent auditor, and the

independent auditor reports directly to the Audit Committee.

The board of directors has determined that Gold Fields’

Audit Committee does not have an “audit committee

ﬁnancial expert”, as deﬁned in rules promulgated by the

SEC. Although a person with such qualiﬁcations does not

serve on the Audit Committee, the board of directors

believes that the members of the Audit Committee

collectively possess the knowledge and experience to

oversee and assess the performance of Gold Fields’

management and auditors, the quality of Gold Fields’

disclosure controls, the preparation and evaluation of Gold

Fields’ ﬁnancial statements and Gold Fields’ ﬁnancial

reporting. Gold Fields’ board of directors also believes that

the members of the Audit Committee collectively possess

the understanding of audit committee functions necessary

to diligently execute their responsibilities.

The Audit Committee has adopted formal, written terms of

reference that were approved by the board. Save in respect

of the requirement to have at least one member who is an

“audit committee ﬁnancial expert”, as deﬁned in the rules

of the SEC, the Audit Committee is of the opinion that it

has satisﬁed its responsibilities for the past ﬁnancial year in

compliance with such terms of reference.

The Audit Committee met on six occasions during the year

under review. The record of attendance by members at

such meetings is contained in the table below.

Member name

No of meetings attended

A J Wright

G J Gerwel

R L Pennant-Rea

B R van Rooyen

C I von Christierson

COMPENSATION COMMITTEE

The Compensation Committee comprises P J Ryan

(Chairman), J M McMahon, G R Parker, C M T Thompson

and A J Wright and is required to meet at least twice a

year. As recommended in the 2002 King Report, the

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(continued)

committee comprises a majority of independent,

non executive directors and is chaired by an independent,

non-executive director. This committee, which has adopted

its own formal terms of reference, has established and

reviews, on an ongoing basis, the Group’s compensation

philosophy, the terms and conditions of employment of

executive directors and other executives, including a

short-term performance-linked bonus scheme and a

long-term share incentive scheme.

The terms and conditions of employment of both executive

directors are contained in written contracts of employment.

The remuneration particulars of each contract are contained

on page 136 of this annual report, with the Group’s

maximum exposure being limited to two years’

remuneration in the event either such executive director’s

services are terminated as a result of a take-over or

merger.

The Compensation Committee met on six occasions during

the year under review. The record of attendance by

members at such meetings is contained in the table

below.

Member name

No of meetings attended

P J Ryan

J M McMahon

G R Parker

C M T Thompson

A J Wright

HEALTH, SAFETY AND ENVIRONMENT COMMITTEE

The company is committed to the achievement and

maintenance of world-class standards in the management

of the health and safety of its employees and the

environment. As such, the Health, Safety and Environment

Committee plays a pivotal role in assisting the board in its

oversight of the effectiveness of the company’s

environmental, health and safety programmes and to keep

the board informed in regard to the company’s objectives,

compliance with and maintenance of standards in these

areas. The committee seeks also to minimise health,

safety and mining-related accidents within the Group, to

ensure that the Group’s operations are in compliance with

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Gold Fields Limited Annual Report 2005

111

all environmental regulations and has established a company

policy in respect of HIV/Aids and health matters. This

Committee has adopted formal terms of reference and is

required, in terms thereof, to meet at least twice a year. The

committee, which comprises J M McMahon (Chairman),

G R Parker, T M G Sexwale and C I von Christierson, is made

up of a majority of independent, non-executive directors, as

recommended by the 2002 King Report.

The Health, Safety and Environment Committee met on

three occasions during the year under review. The record

of attendance by members at such meetings is contained

in the table below.

Member name

No of meetings attended

J M McMahon

G R Parker

T M G Sexwale

C I von Christierson

DEFENCE COMMITTEE

A special, ad hoc, Defence Committee was established by

the board during the year under review to assist the board

in determining and directing the company’s response, at a

strategic level, to the announcement on 18 October 2004

by Harmony Gold Mining Company Limited of its hostile

and unsolicited bid to acquire control of Gold Fields. This

committee, which was comprised of a majority of

independent directors, namely Messrs J M McMahon,

G J Gerwel, C I von Christierson, I D Cockerill, N J Holland

and A J Wright (Chairman), played a signiﬁcant role in

successfully defending the company against Harmony’s

actions.

The Defence Committee met on nine occasions during its

existence. The record of attendance by members at such

meetings is contained in the table below.

Member name

No of meetings attended

J M McMahon

G J Gerwel

C I von Christierson

A J Wright

I D Cockerill

N J Holland

EXECUTIVE COMMITTEE

The Gold Fields Executive Committee comprises two

executive directors and eight executive ofﬁcers. The two

executive directors are the Chief Executive Ofﬁcer (Mr I D

Cockerill) who chairs this committee, and the Chief

Financial Ofﬁcer (Mr N J Holland).

This committee is not a committee of the board, but is

primarily responsible for implementing the board’s

directives, meets regularly to review Group performance

and develop Group strategy and policy proposals for

consideration by the board.

In addition, and in support of the company’s commitment

to a policy of fair, accurate and timeous disclosure of

information to its stakeholders, the investment community

and the public, the Executive Committee of Gold Fields has

been mandated by the board to assist in the execution of

the group’s disclosure obligations. To this end, the executive

committee has formulated a series of guidelines on

disclosure, which have been disseminated throughout the

Group. “Disclosure” is an agenda item at each Executive

Committee meeting and, in order to facilitate the fulﬁllment

by the committee of this function, a disclosure co-ordinator

has been appointed at each operation and in respect of

each core discipline throughout the Group.

The Executive Committee is supported in the execution of

its functions, by a number of executive and operating

committees that have been established in respect of each

of the Group’s operations as well as by a New Business

Development Committee.

In addition, each operating subsidiary of the company has

established board and management committee structures

in place designed to ensure that the company’s commitment

to sound practices and standards of corporate governance

are maintained on a Group-wide basis. At least one of the

company’s executive directors serves on the board of each

operating subsidiary of the company.

Details of the members of the Executive Committee

appear on page 22 of this annual report.

INTERNAL CONTROL

The board has established and maintains internal controls

and procedures, which are reviewed regularly for

effectiveness. These controls and procedures are designed

to manage, rather than eliminate, the risk of failure, and

provide reasonable, but not absolute, assurance that there

is an adequate system of internal control in place.

Internal control is implemented through the proper

delegation of responsibility within a clearly deﬁned approval

framework, through accounting procedures and also the

adequate segregation of duties. The Group’s internal

accounting controls and systems are designed to provide

reasonable assurance as to the integrity of the company’s

ﬁnancial statements and to safeguard, verify and maintain

accountability for its assets. These controls and systems

are complemented by processes to access the integrity of

prospective new appointees and promotion candidates.

Internal auditors monitor the operation of the internal control

systems and report their ﬁndings and recommendations to

the Audit Committee, the directors and management.

Corrective action is taken to address any deﬁciencies as and

when they are identiﬁed. Nothing has come to the attention

of the directors to indicate that any material breakdown in

the functioning of these controls, procedures and systems

has occurred during the year under review.

COMPANY CODE OF ETHICS

Directors and employees alike are bound to uphold the core

values of honesty, transparency and integrity that underpin

the Gold Fields Code of Ethics. Above all, this code requires

all directors and employees maintain the ethical standards

set by the company, inter alia, that its representatives

conduct themselves with integrity, in accordance with all

applicable law and, generally, in a manner which is beyond

reproach. The code of ethics also articulates the company’s

policy with respect to conﬂicts of interest, conﬁdentiality,

fair dealing, the protection and proper use of company

assets. The code of ethics is available on the company’s

web site (www.goldﬁelds.co.za) and has been

communicated throughout the Group. The code of ethics is

also communicated to all new employees.

112

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Corporate

governance

(continued)

The board is committed to ensuring the consistent

application of the code of ethics and is assisted in its

responsibility for overseeing compliance therewith by the

Audit Committee.

Only this committee is empowered to waive the application

of the principles espoused in the code of ethics in respect

of directors or executive committee members and the

code itself requires that any such waiver will promptly be

publicly disclosed.

Gold Fields has contracted the services of “Tip-off

Anonymous”, an independent hotline service provider, to

facilitate the conﬁdential reporting of code violations, fraud

and other inappropriate behaviour. Employees found guilty

of ethical breaches are disciplined in accordance with the

Group’s disciplinary code and, should the breach also be a

criminal act, it is the Group’s policy to pursue prosecution

of the employee concerned.

Feedback to date suggests that the ethical standards

espoused in the code are, in general, being upheld across

the Group.

INSIDER TRADING

The Group operates a closed period prior to the publication

of its quarterly and year-end ﬁnancial results during which

period employees, directors and ofﬁcers of the Group may

not deal in the shares of the company. This is also extended

to any period when the company is trading under a

cautionary announcement. The company secretary keeps

members of the board and employees across the Group

informed of all such periods.

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Gold Fields Limited Annual Report 2005

113

Annual

financial statements

114

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Annual

financial statements

Report

content

Statement of responsibility by the board of directors

page 115

Report of the independent auditors

page 116

Corporate secretary’s conﬁrmation

page 116

Management’s discussion and analysis of the ﬁnancial statements

page 117

Directors’ report

page 131

Accounting policies

page 139

Group income statement

page 146

Group balance sheet

page 147

Group statement of changes in shareholders’ equity

page 148

Group cash ﬂow statement

page 149

Notes to ﬁnancial statements

page 150

Company income statement

page 170

Company balance sheet

page 171

Company statement of changes in shareholders’ equity

page 172

Company cash ﬂow statement

page 173

Company notes to ﬁnancial statements

page 174

Major group investments – direct and indirect

page 176

Segment report

page 178

Operating and ﬁnancial information by mine

page 180

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Gold Fields Limited Annual Report 2005

115

Statement

of responsibility by the board of directors

The directors are responsible for the preparation, integrity and fair presentation of the ﬁnancial statements of the company and of

the Group. The ﬁnancial statements presented on pages 113 to 181 have been prepared in accordance with Statements of Generally

Accepted Accounting Practice (GAAP) in South Africa and International Financial Reporting Standards and include amounts based on

judgements and estimates made by management.

The directors consider that, in preparing the ﬁnancial statements, they have used the most appropriate accounting policies, consistently

applied and supported by reasonable and prudent judgements and estimates, and that all Statements of GAAP that they consider to be

applicable have been followed. The directors are satisﬁed that the information contained in the ﬁnancial statements fairly presents the

results of operations for the year and the ﬁnancial position of the Group at year-end. The directors also prepared the other information

included in the annual report and are responsible for both its accuracy and its consistency with the ﬁnancial statements.

The directors have responsibility for ensuring that accounting records are kept. The accounting records should disclose with reasonable

accuracy the ﬁnancial position of the companies to enable the directors to ensure that the ﬁnancial statements comply with the relevant

legislation.

The company and the Group operated in a well-established controlled environment, which is well documented and regularly reviewed. This

incorporates risk management and internal control procedures, which are designed to provide reasonable, but not absolute, assurance

that assets are safeguarded and the risks facing the business are being controlled.

The going-concern basis has been adopted in preparing the ﬁnancial statements. The directors have no reason to believe that the group

or any company within the Group will not be going concerns in the foreseeable future, based on forecasts and available cash resources.

These ﬁnancial statements support the viability of the company and the Group.

Gold Fields has adopted a Code of Ethics which code is available on the Gold Fields website and which is adhered to by the company.

The Group’s external auditors, PricewaterhouseCoopers Incorporated, audited the ﬁnancial statements, and their report is presented on

page 116.

The ﬁnancial statements were approved by the board of directors on 13 September 2005 and are signed on its behalf by:

N J Holland

I D Cockerill

Chief Financial Ofﬁcer

Chief Executive Ofﬁcer

13 September 2005

116

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Report of the independent auditors

To the members of Gold Fields Limited

We have audited the annual ﬁ nancial statements and Group annual ﬁ nancial statements set out on pages 131 to 179 for the year ended
30 June 2005. These ﬁ nancial statements are the responsibility of the directors of the company. Our responsibility is to express an
opinion on these ﬁ nancial statements based on our audit.

Scope

We conducted our audit in accordance with Statements of South African Auditing Standards and in accordance with International
Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance that the ﬁ nancial
statements are free of material misstatement.

An audit includes:
• Examining, on a test basis, evidence supporting the amounts and disclosures in the ﬁ nancial statements.
• Assessing the accounting principles used and signiﬁ cant estimates made by management.
• Evaluating the overall ﬁ nancial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

Audit opinion

In our opinion, the ﬁ nancial statements fairly present, in all material aspects, the ﬁ nancial position of the company and the Group at
30 June 2005, the results of their operations and cash ﬂ ows for the year then ended in accordance with South African Statements of
Generally Accepted Accounting Practice, International Financial Reporting Standards and in the manner required by the South African
Companies Act.

PricewaterhouseCoopers Inc
Chartered Accountants (SA)
Registered Accountants and Auditors

Johannesburg

13 September 2005

Corporate

secretary’s confirmation

In terms of section 268G(d) of the Companies Act, 1973, as amended, I certify that the company has lodged with the Registrar of
Companies all such returns as are required to be lodged by a public company in terms of the Companies Act, and that all such returns
are true, correct and up to date.

C Farrel
Corporate Secretary

13 September 2005

Report

of the independent auditors

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Gold Fields Limited Annual Report 2005

117

(The following management’s discussion and analysis of the ﬁnancial statements should be read together with the Gold Fields’
consolidated ﬁnancial statements, including the notes appearing with these ﬁnancial statements.)

The ﬁnancial results have been prepared in accordance with International Financial Reporting Standards (IFRS) and South African
Statements of Generally Accepted Accounting Practice, which is consistent with the previous year.

RESULTS FOR THE YEAR

Net earnings for ﬁscal 2005 were R180 million (or 37 cents per share), compared with R768 million (or 158 cents per share) achieved for
the previous ﬁnancial year. The reasons for this decline are discussed below.

Headline earnings exclude the after tax effect of asset impairments, proﬁts on the sale of investments and ﬁxed assets, and amounted
to R291 million or 59 cents per share for ﬁscal 2005, compared with headline earnings for the previous year of R763 million or 157 cents
per share.

These results are analysed as follows:
REVENUE

Revenue decreased marginally from R11,773 million in ﬁscal 2004 to R11,756 million in ﬁscal 2005. The decrease in revenue of
R17 million was due to the decrease in the rand gold price from R85,905 per kilogram to R84,218 per kilogram, partially offset by an
increase in gold production. This decrease in the rand gold price occurred despite a 9 per cent increase in the US dollar gold price from
an average of US$387 per ounce to US$422 per ounce year on year, with the higher gold price being offset by a stronger rand which
moved from an average of 6.90 to 6.21 to the US dollar, a change of 10 per cent.

Gold production increased 1 per cent from 4,406,100 ounces to 4,488,100 ounces in ﬁscal 2005. The South African operations increased
production from 2,803,700 ounces to 2,824,100 ounces while the international operations increased production from 1,602,400 ounces
to 1,664,000 ounces.

The increase in production at the South African operations was due to an increase in underground yields from 7.1 grams per ton to
7.4 grams per ton, while underground volumes remained almost constant at 11,117,000 tons milled. This increase in yield came about as
a result of a change in strategy implemented to counter the low rand gold price of below R85,000 per kilogram experienced in mid-2003
and the assumption that the rand would remain below R6.50 to the US dollar for a protracted period. In order to counter the low rand gold
price due to the strengthening of the rand, the South African operations changed from mining more volume at lower grade (the “Wal-Mart”
strategy) to less volume at grades more in line with Life of Mine ore reserve values (the “Saks 5th Avenue” strategy). In line with this
strategy marginal and non-contributing ore from surface was reduced from 5,683,000 tons to 4,413,000 tons or 22 per cent.

At the international operations a signiﬁcant increase was seen at Tarkwa, from 550,000 ounces to 676,800 ounces. This was as a result
of the new mill which was commissioned at the end of October 2004 and the new owner mining ﬂeet introduced at the start of the ﬁscal
year. Agnew posted another excellent year increasing production from 201,500 ounces to 212,500 ounces, the low grade stockpiles
being replaced by delivery of the Songvang open pit project and Kim underground continuing to deliver excellent results. Production at
St Ives decreased marginally from 542,600 ounces to 527,000 ounces. The new mill at St Ives was commissioned during December
2004 in order to reduce costs and increase production levels. Damang reduced production from 308,300 ounces to 247,700 ounces as
the high grade ore from the Damang pit was depleted as the current cutback reached the end of its economic life. This ore was replaced
by lower grade ore from the Amoanda and Juno 2SE pits.

Management’s

discussion and analysis of the financial statements

118

Gold Fields Limited Annual Report 2005

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Management’s

discussion and analysis of the financial statements

(continued)

COST OF SALES

Cost of sales, which consists of operating costs, changes in gold inventories and amortisation and depreciation, increased from
R10,694 million in ﬁscal 2004 to R10,983 million in ﬁscal 2005.

The table below presents the analysis of cost of sales:

F2005

F2004

Analysis of cost of sales

Total cash costs

9,219

9,192

Add:

General and administration

342

335

Rehabilitation

Gold inventory change – cash portion

(39)

Royalties

(121)

(118)

Operating costs

9,502

9,411

Add:

Gold inventory change

(31)

Amortisation and depreciation

1,512

1,236

Cost of sales

10,983

10,694

The analysis that follows provides a more detailed comparison of costs year on year taking into account changes in production levels.

Operating costs

The following table sets out for each operation and the Group total ounces produced, total cash costs and total production costs for the
years ended 30 June 2005 and 2004.

Year ended 30 June 2005

Year ended 30 June 2004

Total

Gold

cash production

Gold

cash production

cash

production

costs

production

costs

’000 oz

US$/oz

R/kg

’000 oz

US$/oz

R/kg

South Africa
Driefontein

1,162.6

330

366

65,876

72,974

1,141.2

311

342

68,922

75,802

Kloof

1,037.1

379

436

75,693

87,023

1,037.6

341

379

75,645

84,015

Beatrix

624.3

406

430

81,023

85,864

624.9

356

376

78,865

83,398

Total South African operations

2,824.1

365

406

72,830

80,983

2,803.7

332

363

73,626

80,534

Ghana
Tarkwa

676.8

234

290

46,649

57,826

550.0

230

257

51,032

56,936

Damang

247.7

282

306

56,329

61,119

308.3

222

249

49,265

55,261

Australia

404

80,710

361

80,016

St Ives

527.0

336

67,029

542.6

297

65,865

Agnew

212.5

233

46,437

201.5

226

50,215

Total international operations

1,664.0

273

343

54,517

68,487

1,602.4

251

304

55,612

67,331

Total

4,488.1

4,406.1

Weighted average

331

382

66,041

76,350

302

341

67,075

75,733

Notes:
(1) In ﬁscal 2005 and 2004, 481,200 ounces and 391,100 ounces respectively were attributable to Gold Fields.
(2) In ﬁscal 2005 and 2004, 176,100 ounces and 219,200 ounces respectively were attributable to Gold Fields.
(3) Total production costs for the Australian operations are not split between the two operations.
(4) Total cash costs and total production costs are calculated in accordance with the Gold Institute industry standard.

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Gold Fields Limited Annual Report 2005

119

The weighted average total cash cost per kilogram decreased by 2 per cent from R67,075 per kilogram (US$302 per ounce) in ﬁscal 2004,
to R66,041 per kilogram (US$331 per ounce) in ﬁscal 2005.

The weighted average total cash costs at the South African operations in rand terms decreased 1 per cent from R73,626 per kilogram
in ﬁscal 2004 to R72,830 per kilogram in ﬁscal 2005 despite normal inﬂationary pressures and wage increases at the commencement
of the ﬁscal year that were above inﬂation. The reduction in unit cost was achieved as a consequence of the excellent cost performance
achieved from the cost savings initiatives, namely Project 100 and Project Beyond and the increase in production described earlier.

Project 100 was established with the aim of reducing costs at the South African operations by R100 million per annum. The savings
were to be achieved from improved standards and norms, thereby improving control over the consumption of materials, together with
more rigorous engineering cost benchmarking. Savings for ﬁscal 2005 amounted to R140 million, 40 per cent above target. Savings
were mainly achieved on explosives, underground support, drill steel and logistics i.e. underground and surface engineering. The focus
is now on maintaining these savings going forward.

A new project, Project 100+, has been established utilising the capabilities and the skills developed during Project 100, which is focused
on achieving ongoing and sustainable cost savings across the South African operations. To date ﬁfteen projects have been identiﬁed
with potential savings of R200 million per annum. These projects are focusing on improving efﬁciencies and controls on areas such as
labour management and productivity, planned maintenance, transport and medical facilities to name but a few. Three completed projects
in the Shared Services, Gold Fields Academy and Gold Fields Protection Services areas are expected to deliver annual savings of
R30 million. Many of the projects are in the design phase with beneﬁt realisation expected during the 2006 ﬁnancial period and
beyond.

Another project, Project Beyond, initiated in early 2004, is a procurement initiative targeting annual savings of between R200 million and
R300 million per annum over three years, i.e. around 10 per cent of the amount expended on materials, services and capital expenditure
at the South African operations. During the past ﬁscal year, the project targeted delivery of R94 million in contractual savings, focusing
on overall procurement expenditure of almost R900 million.

The project delivered R103 million of savings against underlying contracts being 12.3 per cent on historic baseline expenditure. Savings
were achieved on commodities such as grinding media, foodstuffs, mill liners, ore transport, roof and timber support, bearings,
engineering repairs, and lubricants. Savings are realised as new contracts come into force and once these materials are utilised by the
mining operations. As a consequence the R103 million savings should largely be realised in the 2006 ﬁscal.

Gold Fields will continue with procurement savings initiatives in support of its cost leadership strategy and is targeting a further
R75 million to R100 million savings per annum at the local operations during ﬁscal 2006 focusing on expenditure of some R980 million.
Relationships with suppliers have not been compromised as a consequence of these initiatives.

It is noteworthy that, despite the achievement of major contractual savings in procurement, expenditure with BEE companies increased
from 18 per cent in ﬁscal 2004 to 25 per cent for ﬁscal 2005. Gold Fields classify BEE companies as “Black Owned” (>50 per cent HDSA
ownership interest), “Black Empowered” (>25 per cent and <50 per cent HDSA ownership interest) and “Black Inﬂuenced” (>5 per
cent and <25 per cent HDSA ownership interest). Gold Fields now make use of 268 of these vendors as compared with 158 at the start
of the year. For purposes of determining the quantum of qualifying expenditure in respect of BEE companies, Black Owned and Black
Empowered companies are weighted 100 per cent, while Black Inﬂuenced companies are weighted as per the relevant percentage
HDSA ownership interest.

The scope of Project Beyond is being extended to include the Australian and Ghanaian operations, as well as the Peruvian Cerro Corona
project where common items are procured across the operations. The vision is to move to a global procurement contract. Preliminary
indications are that savings of more than US$20 million per annum may be achieved.

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Gold Fields Limited Annual Report 2005

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Management’s discussion and analysis of the financial statements

(continued)

At the international operations unit cash costs increased from US$251 per ounce to US$273 per ounce, mainly due to lower production
at Damang and St Ives. Damang lost high grade ore as the main pit was depleted while St Ives’ open pit grades were lower than
planned.

Operating costs increased by less than 1 per cent from R9,411 million in ﬁscal 2004 to R9,502 million in ﬁscal 2005. At the South African
operations costs were marginally lower at R6,660 million compared with R6,683 million the previous year. This was despite similar
volumes, wage increases that were above inﬂation as well as the impact of higher input costs and administered price increases. The
effects of these cost increases were more than offset by the cost saving initiatives implemented during the year. At the international
operations, costs increased from R2,728 million in ﬁscal 2004 to R2,842 million in ﬁscal 2005, an increase of 4 per cent. In the respective
reporting currencies the increase in operating costs at the Australian operations was 9 per cent and in Ghana, which is US dollar based,
the increase was 16 per cent. The increase in Ghana was mainly due to the 23 per cent increase in production at Tarkwa together with
increases in consumables, which affected all the international operating mines.

GENERAL AND ADMINISTRATION (G&A) COSTS

Net general and administration costs, which are included in operating costs were R342 million in ﬁscal 2005, virtually unchanged from
the R355 million in ﬁscal 2004.

Costs falling under the deﬁnition of general and administration costs included the following:
• Corporate administration expenditure of R140 million, which remained unchanged in ﬁscal 2005;
• World Gold Council fees of R46 million in ﬁscal 2005, charged at US$1.75 per ounce of gold produced. The ﬁscal 2004 charge was

similar at R42 million;

• offsite training amounted to R48 million in ﬁscal 2005 compared with R45 million in ﬁscal 2004; and
• other costs which include Chamber of Mines, social development and special technical projects make up the balance.

GOLD INVENTORY CHANGE

The movement in gold in process (GIP) for ﬁscal 2005 was R78 million, from a charge in ﬁscal 2004 of R47 million to a credit to costs in
ﬁscal 2005 of R31 million. The majority of this movement was at the Australian operations. At St Ives there was a positive movement
of R46 million resulting from a charge to costs of R2 million in ﬁscal 2004 compared to a credit to costs in ﬁscal 2005 of R44 million. The
credit to costs in ﬁscal 2005 was due to a build-up of stockpile earlier in the year to feed the new mill. These stocks are in the process
of being depleted. In ﬁscal 2004 production and sales were virtually matched.

At Agnew, there was a positive movement of R38 million resulting from the charge to costs decreasing from R43 million in ﬁscal 2004
to R5 million in ﬁscal 2005. The high charge to costs in ﬁscal 2004 was due to the mine drawing down heavily on the Waroonga
stockpile. The balance of this stockpile was milled in ﬁscal 2005.

At Tarkwa, there was a positive movement of R7 million resulting from a R7 million credit to costs in ﬁscal 2005 compared with
Rnil million in ﬁscal 2004. The R7 million credit to costs represents the build-up of stockpiles to provide sufﬁcient feed stock for the new
mill commissioned in October 2004. These stocks are in the process of being depleted. The Rnil million movement in ﬁscal 2004 was
as a result of the GIP at the end of the year being similar to that at the beginning of the year.

At Damang, there was a negative movement of R13 million resulting from the charge to costs increasing from R2 million in ﬁscal 2004
to R15 million in ﬁscal 2005. The reason for the higher charge in ﬁscal 2005 is due to more ore being drawn from the stockpile in ﬁscal
2005 compared with ﬁscal 2004. This is because the fresh ore from the main pit was depleted during ﬁscal 2005.

AMORTISATION AND DEPRECIATION

Amortisation and depreciation increased 22 per cent from R1,236 million in ﬁscal 2004 to R1,512 million in ﬁscal 2005. This was mainly
as a result of a reclassiﬁcation of reserves at Kloof and depreciation of the new mining ﬂeet and mill at Tarkwa. Reserves at Kloof
previously planned to be mined through a decline at 7 shaft will now be mined from the current infrastructure above 45 level at 4 shaft.

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Gold Fields Limited Annual Report 2005

121

The resultant increase in amortisation year on year at Kloof of R96 million was caused by the asset base at 7 shaft being amortised over
a reduced number of ounces, following the reclassiﬁcation of reserves ounces to 4 shaft. The depreciation of the new mining ﬂeet at
Tarkwa, together with the new mill, results in additional depreciation for the year of R135 million.

OPERATING PROFIT

As a consequence of the aforegoing, operating proﬁt decreased from R1,079 million in ﬁscal 2004 to R774 million in ﬁscal 2005, with
the higher amortisation and depreciation being the main reason for the decline.

INVESTMENT INCOME

Income from investments increased from R134 million in ﬁscal 2004 to R181 million in ﬁscal 2005. The increase is mainly due to higher
interest received as a consequence of higher average cash resources, both locally and offshore.

FINANCE EXPENSE

Finance expense increased from R27 million in ﬁscal 2004 to R99 million in ﬁscal 2005. The R99 million ﬁnance expense in ﬁscal 2005
comprises of R85 million net interest paid on the Mvela loan, R4 million in respect of other interest paid, R19 million environmental
rehabilitation interest charge and R8 million post-retirement health care interest charge. This was partially offset by net exchange gains
on foreign debt, net of cash of R17 million.

The R27 million ﬁnance expense in ﬁscal 2004 comprised of R40 million net interest paid on the Mvela loan, R62 million in respect of
other interest paid, R16 million environmental rehabilitation interest charge and R12 million post-retirement health care interest charge.
This was offset by net exchange gains on foreign debt, net of cash of R103 million.

The net interest paid on the Mvela loan increased from R40 million in ﬁscal 2004 to R85 million in ﬁscal 2005 due to the loan only being
in place for the last three months of ﬁscal 2004. The R85 million in ﬁscal 2005 comprises gross interest paid of R165 million, partially
offset by R80 million interest credit received as a result of the interest rate swap discussed under the ﬁnancial instruments section. The
R40 million in ﬁscal 2004 comprised of R52 million gross interest paid, partially offset by R12 million interest credit received.

Other interest paid decreased from R62 million in ﬁscal 2004 to R4 million in ﬁscal 2005. The main reason for the decrease was that the
South African operations had an external debt position for a portion of ﬁscal 2004 which resulted in interest on this debt of R59 million.

The net exchange gains on foreign debt net of cash for ﬁscal 2005 was R17 million (R17 million realised gain and Rnil million unrealised
gain) compared to R103 million in ﬁscal 2004 (R79 million realised gain and R24 million unrealised gain). Fiscal 2005 includes a R17 million
translation gain made on offshore funds held in euros.

Fiscal 2004 included an accounting exchange gain of R86 million on the settlement of an offshore inter-company loan and a R25 million
exchange gain was made on offshore funds held in euros. These funds related to the proceeds from the US capital raising, which were
invested in euro denominated bank accounts. This was partially offset by a loss of R7 million on foreign debt relating to the syndicated
credit facility in Australia which was settled on 31 January 2004.

FINANCIAL INSTRUMENTS
US dollar/Australian dollar call options

In conjunction with the acquisition of St Ives and Agnew, the Group implemented a hedging strategy to protect the cash ﬂows of these
operations against an appreciation of the Australian dollar, as a signiﬁcant portion of the purchase price was ﬁnanced with debt allied
with the high degree of sensitivity of the cash ﬂows to changes in the US dollar/Australian dollar exchange rate. In addition, it was a
requirement of the lenders that a hedging strategy in relation to changes in the Australian dollar be established and maintained.
Accordingly, Gold Fields entered into various currency ﬁnancial instruments covering a total of US$500 million over a ﬁve year period to
December 2006.

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Management’s discussion and analysis of the financial statements

(continued)

The instruments consisted of the following:
• A series of forward sales contracts covering an aggregate amount of US$250 million. The contracts required Gold Fields Australia to

sell United States dollars 12.5 million for Australian dollars in quarterly instalments commencing in the quarter ended 31 March 2002
and ending in the quarter ended 31 December 2006. The average forward exchange rate was US$0.4934 per Australian dollar.

• US$250 million of zero cost collars in quarterly amounts of US$12.5 million commencing in quarter ended 31 March 2002 and ending

in the quarter ended 31 December 2006. The average downside protection level in each quarter was US$0.5191 per Australian dollar
with average upside participation down to US$0.4289 per Australian dollar. However, should the exchange rate at any time in any
quarter be below the average rate of US$0.4289, the rate achieved for that quarter will be on average A$0.5040.

On 7 January 2004, Gold Fields Australia closed out the remaining Australian dollar/United States dollar currency ﬁnancial instruments
of US$275 million. The existing forward purchases of Australian dollars and the put and call options were closed out by entering into
equal and opposite transactions. The close out of the outstanding open position of US$275 million was at an average spot rate of
0.7670 US$/A$. These transactions locked in gross proﬁt amounting to US$115.7 million and the underlying cash receipts were deferred
to match the maturity dates of the original transactions.

In addition, in order that the Group is able to participate in any future Australian dollar appreciation, a strip of quarterly maturing Australian
dollar/US dollar call options were purchased in respect of an amount of US$275 million of which the value dates and amounts match
those of the original structure. The Australian dollar call options resulted in a premium of US$8.3 million. The payment of the premium
is scheduled to match the maturity dates of the original structure. The average strike price of the options is 0.7670 US$/A$.

Subsequent to this, the future US dollar values in respect of the above two transactions were ﬁxed in Australian dollars to take advantage
of the weakened Australian dollar against the US dollar at that time. The value of the future cash ﬂows at that date net of the premium
above was US$107.4 million or A$140.0 million prior to ﬁxing based on 0.7670 US$/A$, the rate at the time of the original transaction.
The value ﬁxed in Australian dollar amounts to A$147 million, based on a spot rate of 0.7158 US$/A$, the average rate achieved on ﬁxing
in May 2004.

US dollar/rand forward purchasing

During ﬁscal 2003 forward cover on US$36 million, at an average rate of R8.73/US$, was purchased to hedge the Group’s offshore
commitments. At the beginning of ﬁscal 2004 this amount was increased to US$50 million at an average rate of R8.4264/US$. The full
forward purchase of US$50 million matured on 3 June 2004. The spot rate on this date was R6.4055/US$. This amount was extended
at a new rate of R6.6368/US$, to mature on 3 December 2004, resulting in a cash outﬂow of R100 million. The spot rate on 3 December
2004 was R5,8215/US$ resulting in a cash outﬂow of R24 million. US$30 million was extended at a new rate of R5.9611/US$ to mature
on 3 June 2005. The spot rate on 3 June 2005 was R6.8198/US$ resulting in a cash inﬂow of R26 million. This amount was extended at
a new rate of R6.9402/US$ to mature on 5 December 2005.

Interest rate swap

In terms of the Mvela loan, GFI Mining SA pays Mvela Gold interest on R4,139 million at a ﬁxed interest rate, semi-annually. The interest
rate was ﬁxed with reference to the ﬁve year ZAR swap rate, at 9.6179 per cent plus a margin of 0.95 per cent. GFI Mining SA
simultaneously entered into an interest rate swap agreement converting the ﬁxed interest rate exposure to a ﬂoating rate. In terms of
the swap, GFI Mining SA was exposed to the three month JIBAR rate plus a margin of 1.025 per cent. The interest rate swap was
effected to take advantage of the relatively steep yield curve. This swap was closed out on 3 June 2005. The loan now reverts to the
ﬁxed interest rate as mentioned above.

Since the inception of this swap up until its close out, Gold Fields has realised marked to market gains on the swap of R225 million and
interest rate credits of R92 million, giving a total realised gain of R317 million. Of the R225 million realised marked to market gain,
R306 million was accounted for in ﬁscal 2005, offset by a R81 million loss in ﬁscal 2004. Of the R92 million interest credit, R80 million
credit was accounted for in earnings in ﬁscal 2005 compared to a R12 million credit in ﬁscal 2004.

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International petroleum exchange gasoil call option

During ﬁscal 2005 Gold Fields Ghana purchased a one year Asian style call option settled monthly in respect of 51.6 million litres of
diesel at a strike price of US$0.45 per litre, which approximates at a Brent crude oil price of US$56 per barrel. This call was taken out to
protect the Ghanaian operations against adverse energy price movements. The market price of diesel on the day of setting up this
structure was US$0.42 per litre. A US$10 per barrel increase in global oil prices would result in a US$4 per ounce in total cash costs at
the Ghanaian operations. An Asian style option is one where the monthly average of the daily close out prices is compared with the
strike price. The 51,6 million litres of diesel represents 100 per cent of the forecasted diesel consumption in ﬁscal 2006 for the Tarkwa
and Damang mines. The call option resulted in a premium of US$1.66 million paid upfront. The value of this option at 24 June 2005 was
US$1,93 million.

UNREALISED GAIN ON FINANCIAL INSTRUMENTS

The unrealised gain on ﬁnancial instruments of R30 million in ﬁscal 2005 compares with an unrealised gain of R189 million in ﬁscal 2004.
The ﬁscal 2005 unrealised gain of R30 million comprises a gain of R33 million on the US dollar/Australian dollar call options and a gain of
R1 million on the international petroleum exchange gasoil call options offset by a loss of R4 million on the US dollar/rand forward
purchases.

The ﬁscal 2004 unrealised gain of R189 million comprised a gain of R277 million on the original US dollar/Australian dollar structure
(consisting of forward sales contracts and zero cost contracts) offset by a R81 million loss on the interest rate swap and a R7 million loss
on the US dollar/rand forward purchases.

REALISED GAIN/(LOSS) ON FINANCIAL INSTRUMENTS

The realised gain on ﬁnancial instruments of R314 million in ﬁscal 2005 compares with a realised loss of R60 million in ﬁscal 2004. The
ﬁscal 2005 realised gain of R314 million comprises a R306 million gain on the interest rate swap plus a net gain of R8 million on the US
dollar/rand forward purchases. The R306 million gain on the interest rate swap includes R41 million previously hedge accounted for, but
now included in income due to the close out of the swap.

The ﬁscal 2004 realised loss of R60 million comprised a R90 million loss on the US dollar/rand forward purchases offset by a R30 million
gain on the US dollar/Australian dollar call options.

OTHER OPERATING (COSTS)/INCOME

Other operating costs in ﬁscal 2005 were R27 million compared to other operating income of R38 million in ﬁscal 2004. The main
reasons for the movement are:
•   ﬁscal 2005 includes rewards given to all Gold Fields’ employees for the successful defence of the Harmony hostile bid;
•   the medical aid rebate as a result of the actuarial revaluation of the CAWMS liability decreased from ﬁscal 2004;
•   costs relating to Gold Fields becoming compliant with the requirements of Sarbanes-Oxley were incurred in ﬁscal 2005;
•   Biox costs are included in other operating costs in ﬁscal 2005, previously they were accounted for under exploration expense;
•   ﬁscal 2005 includes corporate retrenchment costs, which were not present in ﬁscal 2004; and
•   additional sundry professional fees were incurred in ﬁscal 2005.

EXPLORATION EXPENSE

Gold Fields spent R197 million (US$32 million) on exploration in ﬁscal 2005 compared to R197 million (US$29 million) in ﬁscal 2004. The
bulk of the expenditure has been incurred on a diversiﬁed pipeline of early stage projects in Africa, Australia, China and North, South and
Central America. Subject to continued exploration success, and our ability to ﬁnance, expenditure is expected to range between
US$30 million and US$40 million in ﬁscal 2006.

SHARE OF RESULTS OF ASSOCIATES AFTER TAX

Gold Fields’ 33 per cent share of after tax losses in Rand Reﬁnery Limited increased from R3 million in ﬁscal 2004 to R11 million in
ﬁscal 2005.

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Management’s discussion and analysis of the financial statements

(continued)

EXCEPTIONAL ITEMS
Impairment of assets

Impairment of assets decreased from R426 million in ﬁscal 2004 to R261 million in ﬁscal 2005.

The Group continuously reassesses the carrying value and recoverability of its mining assets. The carrying value is compared to the
higher of “value in use” or “fair value less cost to sell”. “Value in use” is a valuation based on the cash ﬂows over the life of the asset
and discounted to a present value at an appropriate rate. “Fair value” is the present market value of the asset.

The following estimates and assumptions were used by management when reviewing the long-term assets for impairments:
• a gold price of R92,000 per kilogram for the South African operations, US$420 per ounce for the Ghanaian operations and A$560 per

ounce for the Australian operations,

• the extraction of proved and probable reserves as per the most recent life of mine plan at the South African and Ghanaian operations.

The Australian operations included the likely recoverable gold over and above proved and probable reserves based on current
exploration information taking cognisance of the probability of conversion to reserves. The reason for the inclusion of recoverable gold
in addition to proven and probable reserves at the Australian operations is due to the fundamental difference in the nature of the
mineralisation at these operations, which makes upfront deﬁnition of the reserve potential impractical. This is an internal estimate of
the recoverable gold of the lease area over and above the proved and probable reserves; and

• operating costs and capital expenditure estimates as per the most recent life of mine plan.

A fundamental pre-tax discounted cash ﬂow valuation at a discount rate of 5 per cent real is done for each mine using our latest strategic
plans. This is consistent with previous years. From June 2005 we now apply a derived pre-tax market multiple that is determined on a
group basis by reference to the market price of Gold Fields and is then multiplied by the discounted cash ﬂow valuation of each asset
determined on a pre-tax basis. The reason for the change in methodology from last year is that IAS 36 (revised) has provided more
guidance regarding impairment testing.

The application of the above estimates and assumptions resulted in an impairment charge of R124 million to the income statement
relating to Beatrix North and South sections (formerly the old Beatrix mine) in the Free State.

Beatrix is a low grade mine and therefore very sensitive to changes in its cost proﬁle. Changes in the cost proﬁle affects the pay-limits,
which in turn affects the reserves. During ﬁscal 2005, there were normal cost increases at Beatrix, which resulted in an increase in the
pay-limit. Due to the increase in the pay-limit, certain reserves at 2 shaft and Vlakpan included in ﬁscal 2004 became uneconomical to
mine and were therefore excluded from the 2005 life of mine proﬁle. In addition, due to the restructuring at 2 shaft, certain sections
were closed which further impacted the life of mine plan.

The assessment for ﬁscal 2004 resulted in an impairment charge of R426 million relating to Beatrix West section (formerly Oryx mine)
in the Free State.

An impairment charge was incurred at Living Gold, the rose project at Driefontein. As Living Gold is not a gold asset, its valuation was
based on its business plan using a long term exchange rate of R8.51 to the euro and a discounted cash ﬂow valuation using a real
discount rate of 10 per cent. This has resulted in an impairment of R52 million. The main reason for the impairment is that the original
plan forecast a higher exchange rate of R9.87 to the euro and thus higher earnings.

Due to the closure of certain infrastructures in the Group, additional assets were impaired:
• at Driefontein, the No 10 shaft was closed, resulting in an impairment of R12 million,
• at Kloof, the No 3 metallurgical plant was closed, resulting in an impairment of R11 million, and
• at St Ives, the old mill was closed, resulting in an impairment of R61 million.

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Proﬁt on the sale of investments

Proﬁt on the sale of investments decreased from R96 million in ﬁscal 2004 to R50 million in ﬁscal 2005. The R50 million proﬁt in ﬁscal
2005 comprises:
• R38 million from the sale of 36.0 million shares in Zijin Mining Group Company Limited;
• R10 million from the sale of 8.5 million shares in African Eagle Resources Plc; and
• R2 million from the sale of 1.3 million shares in Radius Gold Incorporated.

The major disposals comprising the R96 million proﬁt in ﬁscal 2004 were:
• R53 million from the sale of 1.2 million shares in Harmony/ARM;
• R14 million from the sale of 0.9 million shares in Chesapeake Gold Corporation;
• R7 million from the sale of 0.1 million share in Glamis Gold Limited;
• R10 million from the sale of 2.5 million shares in Orezone Resources Inc; and
• R11 million from the sale of 1.3 million shares in Committee Bay Resources Limited.

Proﬁt on disposal of exploration rights

During ﬁscal 2005 Gold Fields sold its interest in the Angelina Project in Chile to its joint venture partner Meridian for R47 million plus a
2 per cent net smelter royalty on the majority of land within the joint venture. As the interest had a nil cost, the proceeds of R47 million
was also the proﬁt.

Harmony hostile bid costs

Gold Fields incurred costs of R316 million in ﬁscal 2005 relating to the Harmony hostile bid.

IAMGold transaction costs

Costs of R58 million relating to the failed IAMGold deal were incurred during ﬁscal 2005. This deal would have resulted in Gold Fields
combining its assets situated outside the Southern African Development Community with those of IAMGold by means of a reverse
takeover. On 7 December 2004 this proposed transaction did not receive the required majority approval by shareholders and was
therefore not completed.

Proﬁt on disposal of mineral rights

During ﬁscal 2004 mineral rights and associated assets relating to Driefontein’s Block 1C11 were sold for R315 million to AngloGold,
realising a proﬁt of R187 million. No mineral rights were sold during ﬁscal 2005.

Impairment of critical spares

With the closure of the old St Ives mill during ﬁscal 2005, R17 million worth of critical spares kept for the maintenance of the old plant
were impaired as they had now become redundant.

Premium on retirement of post-retirement health care obligations

In order to reduce the post-retirement health care obligation to fund 50 per cent of members contributions, approximately 21 per cent
(F2004 6 per cent) of pensioners and dependants were bought out of the scheme at a 15 per cent premium. The premium was charged
to the income statement and amounted to R5 million for both ﬁscal 2005 and ﬁscal 2004.

Write-off of mineral rights

Mineral rights held as trading stock to the value of R25 million were written off in F2004. This was in line with new legislation that
resulted in mining companies forfeiting those mineral rights not likely to be mined or explored. No mineral rights were written off during
ﬁscal 2005.

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Management’s discussion and analysis of the financial statements

(continued)

Other income/(costs)

Other income/costs moved from a cost of R3 million in ﬁscal 2004 to an income of R5 million in ﬁscal 2005. The income of R5 million in
ﬁscal 2005 related to proﬁt on the disposal of miscellaneous property, plant and equipment. The other cost of R3 million in ﬁscal 2004
comprised of R6 million provided for a deﬁcit on the Gold Fields Limited Corporate Pension Fund, offset by R3 million proﬁt on the
disposal of miscellaneous property, plant and equipment.

MINING AND INCOME TAX

The table below indicates Gold Fields’ effective tax expense rate for ﬁscal 2005 and ﬁscal 2004.

Year ended 30 June

Income and mining tax

2005

2004

Effective tax expense rate (%)

24.8

6.2

In ﬁscal 2005, the effective tax expense rate of 25 per cent differed from the maximum South African mining statutory tax rate of 45 per
cent, due to a reduction of R195 million arising from non-South African mining income taxed at lower rates, R71 million reduction relating
to the South African mining tax formula, R53 million decrease due to the reduction of the Ghanaian tax from 32.5 per cent in ﬁscal 2004
to 28.0 per cent in ﬁscal 2005 and R167 million reduction due to an increase in tax values in Australia following the consolidation of St
Ives and Agnew for tax purposes. The Australian tax legislation makes provision for companies that consolidate for tax purposes to
recalculate their tax values based on a market value calculation.

The reduction from the maximum South African mining statutory tax rate to the actual achieved rate of 25 per cent as described above,
was partly offset by the Group incurring R135 million in charges relating to levies and royalties in Ghana and Australia and a further
R214 million increase in net non-taxable and non-deductable income, mainly due to the non deductibility exceptional items.

In ﬁscal 2004, the effective tax expense rate of 6 per cent differed from the maximum South African mining statutory tax rate of 46 per
cent, due to a reduction of R277 million arising from non-South African mining income taxed at lower rates, R48 million reduction relating
to the South African mining tax formula, R159 million reduction on net non-taxable and non-deductable income, mainly the realised gain
on the foreign debt and exploration expenditure not deductible. This was partly offset by the Group incurring R137 million in charges
relating to taxes and royalties in Ghana and Australia.

Minority shareholder’s interest

Minority interests represent attributable earnings of R129 million in ﬁscal 2005, compared to earnings of R150 million in ﬁscal 2004.
These amounts reﬂect the portion of the net income of Gold Fields Ghana, Abosso Goldﬁelds and Living Gold attributable to its minority
shareholders.

Net earnings

Because of the factors discussed above, Gold Fields posted earnings of R180 million in ﬁscal 2005 as compared with R768 million in
ﬁscal 2004.

Earnings for the year to June 2005, excluding the effect of gains and losses on ﬁnancial instruments and foreign debt and exceptional
items, which include, inter alia, impairment of assets and proﬁts on disposal of investments and exploration rights, was R452 million as
compared with R587 million in ﬁscal 2004.

LIQUIDITY AND CAPITAL RESOURCES
Cash resources
Cash ﬂows from operating activities

Cash ﬂows from operating activities increased from R1,003 million in ﬁscal 2004 to R1,336 million in ﬁscal 2005. The increase of
R333 million was as a result of R213 million less dividends paid, R292 million less tax paid and R46 million more investment and interest

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income received. This was partially offset by R40 million less cash generated by the operations and an increase in working capital of
R191 million. The main reason for the R191 million change was due to increases in inventories around the Group, mainly consumable
stores, especially at Tarkwa and St Ives relating to the new mills.

Cash ﬂows from investing activities

Cash ﬂows from investing activities decreased from R3,066 million in ﬁscal 2004 to R2,199 in ﬁscal 2005. The items comprising these
numbers are discussed below.

Additions to property, plant and equipment
Capital expenditure decreased from R2,880 million in ﬁscal 2004 to R2,164 million in ﬁscal 2005. Capital expenditure at the South African
operations decreased from R878 million in ﬁscal 2004 to R636 million in ﬁscal 2005. This decrease of R242 million was due to the
deferral of lower priority capital items in line with the lower rand gold price.

Capital expenditure at the offshore operations decreased from R1,842 million in ﬁscal 2004 to R1,378 million in ﬁscal 2005. Capital
expenditure at Tarkwa decreased from R943 million in ﬁscal 2004 to R470 million in ﬁscal 2005. This was mainly due to the capital
expenditure on the conversion to owner mining and the new mill decreasing from R837 million in ﬁscal 2004 to R261 million in ﬁscal
2005. Another reason for the decrease in capital expenditure at the international operations was the stronger rand, which saw the
average rand/US dollar exchange rate decrease from R6.90/US$ in ﬁscal 2004 to R6.21/US$ in ﬁscal 2005. The average rand/Australian
dollar exchange rate strengthened from R4.92/A$ in ﬁscal 2004 to R4.66/A$ in ﬁscal 2005.

Proceeds on the disposal of property, plant and equipment
Proceeds on the disposal of property, plant and equipment decreased from R392 million in ﬁscal 2004 to R64 million in ﬁscal 2005. The
main reason for this decrease of R328 million was that the ﬁscal 2004 number included R315 million from the sale of Driefontein Block
1C11 to AngloGold.

Purchase of investments
Investment purchases decreased from R707 million in ﬁscal 2004 to R189 million in ﬁscal 2005.

The major investment purchases comprising the R189 million spent in ﬁscal 2005 were:
• R116 million invested in Comaplex Mineral Corporation;
• R9 million invested in Avoca Resources Limited; and
• R9 million invested in African Eagle Resources Plc on the exercising of warrants held.
• R42 million lent to GBF, the open pit mining contractor at St Ives, in terms of the alliance agreement between St Ives and GBF to

fund the purchase of mining equipment used on site.

The major investment purchases comprising the R707 million spent in ﬁscal 2004 were:
• R100 million invested in Mvelaphanda Resources Limited;
• R200 million of redeemable preference shares subscribed for in Micawber (Pty) Limited relating to the Mvela transaction;
• R88 million invested in Bolivar Gold Corporation;
• R53 million invested in Zijin Mining Group Company Limited;
• R19 million invested in CMQ Resources Incorporated; and
• R180 million as part payment for the acquisition of the minorities interest in Arctic Platinum.

Proceeds on the disposal of investments
Proceeds on the disposal of investments decreased from R202 million in ﬁscal 2004 to R116 million in ﬁscal 2005.

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The major investment disposals comprising the R116 million in ﬁscal 2005 were:
• R86 million for the sale of Zijin Mining Group Company Limited shares;
• R20 million from the sale of African Eagle Resources Plc shares; and
• R10 million from the sale of Radius Gold Incorporated shares;

The major investment disposals comprising the R202 million in ﬁscal 2004 were:
• R135 million from the sale of Harmony/ARMgold shares;
• R14 million from the sale of Chesapeake Gold Corporation shares;
• R14 million from the sale of Committee Bay Resources Limited shares;
• R13 million from the sale of Orezone Resources Limited shares; and
• R8 million from the sale of Glamis Gold Limited shares.

Proceeds on the disposal of exploration rights
During ﬁscal 2005 Gold Fields disposed of its interest in the Angelina project in Chile to its joint venture partner Meridian Gold Incorporated
for R47 million plus a 2 per cent net smelter royalty on the majority of land within the joint venture. No disposals took place in
ﬁscal 2004.

Environmental trust fund and rehabilitation payments
During ﬁscal 2005 Gold Fields paid over R30 million to its environmental trust fund and spent R10 million on ongoing rehabilitation costs
resulting in a total cash outﬂow of R40 million for the year. In ﬁscal 2004 Gold Fields paid over R30 million to its environmental trust fund
and spent R11 million on ongoing rehabilitation costs resulting in a total cash outﬂow of R41 million for the year.

Post-retirement health care payments
R33 million was spent on post-retirement health care payments in ﬁscal 2005 compared to R32 million in ﬁscal 2004. The R33 million in
ﬁscal 2005 comprises R30 million incurred on the buyout of pensioners and dependants and R3 million on ongoing payments. The
R32 million in ﬁscal 2004 comprised R27 million incurred on the buyout of pensioners and dependants and R5 million on ongoing
payments.

Cash ﬂows from ﬁnancing activities

Net cash utilised by ﬁnancing activities was R57 million in ﬁscal 2005 as compared to net cash generated of R5,418 million in ﬁscal 2004.
The items comprising these numbers are discussed below.

Equity and debt portion of Mvela loan
In ﬁscal 2004 R4,107 million (R4,139 million less R32 million costs) was received as a result of the Mvela transaction.

Increase in minority funding
Minority funding increased from R89 million in ﬁscal 2004 to R111 in ﬁscal 2005. The R111 million received in ﬁscal 2005 relates to the
amount due by IAMGold for their share of the balance of the funding due for the owner mining and new mill projects at Tarkwa.

The R89 million received in ﬁscal 2004 comprised of R81 million received from IAMGold for their share of the Tarkwa project funding
and R27 million from The Industrial Development Corporation for their purchase of a 40 per cent shareholding in Living Gold. This was
offset by a R19 million repayment of minority shareholder loans by Abosso to IAMGold.

Long term loans raised
In ﬁscal 2005 Living Gold (the rose project at Driefontein) received a commercial loan of R17 million from its 40 per cent shareholder,
The Industrial Development Corporation.

Management’s discussion and analysis of the financial statements

(continued)

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129

Long and short-term loans repaid
Long and short-term loans repaid decreased from R294 million in ﬁscal 2004 to R207 million in ﬁscal 2005. The R207 million repayment
in ﬁscal 2005 comprises the ﬁrst two payments totalling R207 million made to Mvelaphanda Resources in terms of the Mvela loan.

The R294 million repayment in ﬁscal 2004 comprised R209 million for the settlement of the Australian loan used to ﬁnance the acquisition
of the St Ives and Agnew mines in Australia and R85 million for the settlement of the Abosso loan used to ﬁnance the acquisition of the
Abosso (Damang) mine in Ghana.

Shares issued
Shares issued decreased from R1,516 million in ﬁscal 2004 to R22 million in ﬁscal 2005. Fiscal 2004 included R1,511 million received
from an international private placement of Gold Fields shares and R5 million received from shares issued in terms of the Group employee
share scheme. Fiscal 2005 included only R22 million received from shares issued in terms of the Group’s employee share scheme.

Net cash (utilised)/generated

Net cash utilised for ﬁscal 2005 amounted to R920 million, compared to net cash generated of R3,355 million in ﬁscal 2004. The
decrease was primarily due to the proceeds from the Mvela transaction and the capital raising, which took place in ﬁscal 2004, offset by
decreased capital expenditure and investment purchases and higher operating cash ﬂows in ﬁscal 2005. Total Group cash and cash
equivalents amounted to R3,375 million at 30 June 2005, as compared to R4,135 million at the end of ﬁscal 2004.

Long-term provisions

Long-term provisions at the end of ﬁscal 2005 were R930 million as compared to R773 million in ﬁscal 2004 and includes a provision for
post-retirement health care costs of R24 million (F2004: R58 million) and a provision for environmental rehabilitation costs of R906 million
(F2004: R715 million).

Provision for post-retirement health care costs
The Group medical scheme, Medisense, provides beneﬁts to employees and certain of its former employees. The Group remains liable
for 50 per cent of the employees’ medical contributions to the medical schemes after retirement. During the year 21 per cent of these
members were bought-out of the scheme for an amount of R30 million. Included in the R30 million is a premium of R5 million. In ﬁscal
2004 6 per cent of these members were bought out of the scheme for an amount of R27 million. Included in the R27 million was a
premium of R5 million to the actuarial valuation at the time of the buy-out. The advantage for the Group in effecting a buy-out is to cap
and retire these liabilities.

Provision for environmental rehabilitation costs
The amount provided for environmental rehabilitation costs increased from R715 million in ﬁscal 2004 to R906 million in ﬁscal 2005. The
provision represents the present value of closure, rehabilitation and other environmental obligations incurred up to 30 June 2005.
The provision is updated annually to take account of inﬂation, the time value of money and any new environmental obligations incurred.
The discount rate applied in ﬁscal 2005 remained unchanged from the previous year at 11 per cent for the South African operations,
5.5 per cent for Ghana and 5 per cent for Australia. The rates of inﬂation used in ﬁscal 2005 are 7.5 per cent for South Africa and 3 per
cent in Ghana and Australia. The inﬂation adjustment for the year was R44 million compared with R42 million in ﬁscal 2004 and the
interest adjustment was R19 million compared with R17 million in ﬁscal 2004. During ﬁscal 2005 additional provisions of R98 million
were raised for new disturbances at Tarkwa of R2 million, St Ives of R91 million and Agnew of R5 million.

The South African operations contribute to a dedicated environmental trust fund to provide ﬁnancing for ﬁnal closure and rehabilitation
costs. The amount invested in the fund is shown as a non-current asset in the ﬁnancial statements and increased from R331 million in
ﬁscal 2004 to R389 million in ﬁscal 2005. The increase consists of contributions of R31 million and interest income of R27 million. The
South African operations will continue to contribute annually to the trust fund over the remaining lives of the mines, which should ensure
that sufﬁcient funds will be available to discharge commitments for future rehabilitation costs.

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OTHER INITIATIVES
Shared Services

Gold Fields Shared Services (GFSS) has been in operation for the last 29 months providing support services to the South African
operations. GFSS has been structured according to the following processes:
• Sourcing to settlement;
• Recording to reporting;
• Employee services; and
• Engineering repair support.

During the past year, continuous business improvement at GFSS resulted in increased productivity, improved compliance with service
level agreements and realisation of targeted savings through projects like Project Beyond and the roll out of the new payroll system.

The focus for the following year is to further improve levels of service, deliver targeted savings and to reduce own costs through
implementation of best practices, best technology enablement and increased productivity.

GOLD FIELDS REPLACES LEGACY INFORMATION TECHNOLOGY SYSTEM GG025 WITH MYSAP ERP

In December 2004 the Gold Fields Executive took the decision to convert its ageing commercial systems software, GG025 used by the
South African operations, to mySAP ERP the Enterprise Resource Planning (ERP) ﬂagship product from the software house SAP.

As with most mining organisations, Gold Fields had spent the last few years continually upgrading an in-house developed technology
system. Sweating that asset eventually became counter-productive in terms of development, maintenance and management costs.
Also, the skills needed to develop and maintain GG025 were becoming more difﬁcult to retain.

More importantly, the company was focusing on improving overall operational performance and had created a Shared Services centre
to help streamline processes and reduce operating costs. The GG025 legacy system could not facilitate the full exploitation of the
desired Shared Services beneﬁts due to lack of functionality.

Project Breakthrough was launched in January 2005 with the brief to implement the Financial, Costing, Materials Management and Data
Warehouse modules of mySAP ERP by the end of the year, at an implementation cost of approximately R35 million.

Project Breakthrough is on track to deliver the strategic and tactical capability that will keep Gold Fields at the forefront of gold mining
technology.

SARBANES OXLEY

Gold Fields has completed the documentation of internal control systems in terms of the Sarbanes Oxley requirements and the review of
internal control design effectiveness. The majority of the remediation requirements were implemented by the end of ﬁscal 2005. The remaining
remediation requirements will be completed during ﬁscal 2006 as there are system amendments to be made early in ﬁscal 2006 (SAP).

Upon completion of the documentation, review and remediation steps described above the Group will test its internal controls for
operating effectiveness and rectify deﬁciencies where applicable. This should be completed by the end of ﬁscal 2006. This should enable
the Group to comply with the requirements of Sarbanes Oxley for ﬁscal 2007, the ﬁrst year that Gold Fields is subject to compliance.

Nicholas J Holland
13 September 2005

Management’s discussion and analysis of the financial statements

(continued)

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Gold Fields Limited Annual Report 2005

131

The directors have pleasure in submitting their report and the annual ﬁnancial statements of the company and the group for the year
ended 30 June 2005.

Proﬁle

Business of the company
Gold Fields Limited is one of the world’s largest producers of precious metals, with mining operations in Australia, Ghana and South
Africa. In addition, it prospects for gold and other precious metals worldwide.

Financial results
The ﬁnancial statements set out fully the ﬁnancial results of the company and the group. A synopsis of the ﬁnancial results for the year
is set out in the management’s discussion and analysis of the ﬁnancial results on pages 117 to 130.

Reporting Standards
The Gold Fields Group’s annual ﬁnancial statements comply with International Financial Reporting Standards and South African Statements
of Generally Accepted Accounting Practice.

Reporting in US dollars
To assist international investors, the Group’s annual ﬁnancial statements have also been translated into US dollars.

Share capital

Authorised
The company’s authorised share capital of 1,000,000,000 shares of 50 cents remained unchanged during the year.

Issued
A total of 801,706 shares were issued during the year in terms of the GF Management Incentive Scheme. This resulted in the total issued
ordinary shares at 30 June 2005 increasing to 492,294,226 (2004: 491,492,520) ordinary shares of 50 cents each.

The unissued ordinary shares, after setting aside as many shares as may be required to be alloted and issued by the company in terms of
the two incentive schemes, namely the GF Management Incentive Scheme and the GF Non-Executive Director Share Plan, are under the
control of the directors until the forthcoming annual general meeting where shareholders will be asked to renew this authority. In addition
shareholders will be requested to authorise the directors to issue up to 10 per cent of the unissued shares of the company for cash, other
than by means of a rights offer. These resolutions are both subject to compliance with the rules of JSE Limited. The proposed resolutions
are set out in the notice convening the annual general meeting.

Repurchase of shares
In terms of the Companies Act, No 61 of 1973, it is possible for a company or its subsidiaries to acquire its own shares and for subsidiaries
to acquire shares of its holding company. To provide ﬂexibility, your directors recommended that resolutions permitting such acquisitions
be passed at the forthcoming annual general meeting.

Shareholding in the company
The issued capital of the company is held by public and non-public entities as follows:

Number of shares

’000

Public

393,394

Non-public*

98,900

Total

492,294

100

Included in the non-public number is MMC Norilsk Nickel holding 98,467,758 shares (20%) and directors holding 411,986 shares (0.08%). The other
signiﬁcant shareholders in the Group are listed on page 182.

Directors’

report

132

Gold Fields Limited Annual Report 2005

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Directors’

report

(continued)

The GF Management Incentive Scheme

At the annual general meeting on 10 November 1999, shareholders approved the adoption of the GF Management Incentive Scheme to
substitute the scheme in place prior to the reverse takeover of Driefontein by Gold Fields in 1999. This scheme was introduced to provide
an incentive for certain ofﬁcers and employees of the Group to acquire shares in the company.

Details of the scheme are as follows:

Number

of shares

Average option

price (cps)

Outstanding at 1 July 2004

8,693,839

6,352

Granted during the year

3,968,800

6,819

Exercised and released

801,706

2,674

Forfeited

720,482

7,778

Outstanding at 30 June 2005

11,140,451

6,691

The executive directors’ participation is included in the above ﬁgures

1,151,900

5,210

The directors are authorised to issue, allot and grant options to acquire up to a maximum of 22,791,830 ordinary shares in the unissued
share capital of the company in terms of the incentive scheme. At 30 June 2005 this represented 4.63 per cent of shares in issue. The
unexercised options under the scheme represented 2.27 per cent of shares in issue as at 30 June 2005.

The salient features of the scheme are that:
• A third of the total share option grant vests upon the second anniversary of the grant date and a further third of the total option grant

vests annually on future anniversaries of the grant date; and

• Share options expire no later than seven years from the grant date.

The GF Non-Executive Director Share Plan

At the annual general meeting on 31 October 2001, shareholders approved a resolution to proceed with the allocation of options to non-
executive directors. As a result each non-executive director has been allocated the options detailed on page 138.

The salient features of the scheme are as follows:
• Share options vest one year after allocation;
• 10,000 share options will be issued annually to non-executive directors provided there is 75 per cent attendance at meetings; and
• Share options will be forfeited 30 days after directors leave the board.

Financial affairs

Dividend policy
The company’s dividend policy is to declare an interim and ﬁnal dividend in respect of each ﬁnancial year, based on 50 per cent of the
earnings for the year before taking account of investment opportunities and after excluding impairments. Earnings are adjusted to exclude
unrealised gains and losses on ﬁnancial instruments and foreign debt, but adjusted to include cash payments and receipts in relation to
such underlying ﬁnancial instruments.

Dividends for the year ended 30 June 2005
The company declared an interim dividend of 30 SA cents per share on 28 January 2005. The dividend was paid on 28 February 2005.

A ﬁnal dividend of 40 cents per share was declared on 3 August 2005. The dividend was declared in the currency of the Republic of South
Africa. The dividend was paid on 29 August 2005.

The dividend resulted in a payout of 192 per cent for the year based on net earnings.

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Gold Fields Limited Annual Report 2005

133

Borrowing powers
In terms of the provisions of Article 12.1 of the articles of association, the borrowing powers of the company are unlimited.

Fixed assets

Capital expenditure
Capital expenditure for the year amounted to R2,164 million (2004: R2,880 million). Estimated capital expenditure for the 2006 ﬁnancial
year is R2,220 million and will be funded from internal sources and, to the extent necessary, borrowings.

Investments

Disposals
During the year under review the company disposed of its entire holdings in Zijin Mining Group Company Limited and some of its holdings
in African Eagle Resources plc and Radius Gold Inc, resulting in a proﬁt of R50 million.

Acquisitions
R189 million of investments were made during the year which included investments in Comaplex Minerals Corporation, Avoca Resources
Limited and GBF Equipment.

Going concern

The ﬁnancial statements have been prepared using appropriate accounting policies, supported by reasonable judgements and estimates.
The directors have reasonable belief that the company and the group have adequate resources to continue as a going concern for the
foreseeable future.

Property

The register of property and mineral rights is available for inspection at the registered ofﬁce of the company during normal business hours.

Post-balance sheet event

Acquisition of company’s own shares
On 17 August 2005 JSE Limited approved the de-listing of 1,000,000 ordinary shares of the company arising out of a repurchase by the
company of its own shares. The shares repurchased represented 0.20 per cent of the total issued share capital before the repurchase was
effected. The shares have been cancelled. The price paid for the repurchase was not greater than 10 per cent of the weighted average
market price for the securities for the ﬁve business days immediately preceding the date on which the transaction was effected.

Occupational health care services

As previously reported, occupational health care services are made available by the Group’s various operations to their employees from
existing facilities. There is a risk that the cost of providing such services could increase in the future depending upon changes in the
nature of underlying legislation and the proﬁle of employees. This increased cost, should it transpire, is currently indeterminate. The
Group is monitoring developments in this regard.

Environmental obligations

The Group has made provision in the ﬁnancial statements for environmental rehabilitation costs amounting to R906 million
(2004: R715 million). Cash contributions of R30 million (2004: R31 million) have been paid during the year to a dedicated trust fund
created to fund these provisions with the total amounts invested at the year-end amounting to R389 million (2004: R331 million).

Special resolution

A special resolution, requiring disclosure in terms of the Listings Requirements of JSE Limited, was passed at the annual general meeting
of shareholders held on 16 November 2004 in regard to a general authority to enable the company to acquire its own shares and shares
in any holding company of the company and for any of the company’s subsidiaries to acquire shares in the company.

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Gold Fields Limited Annual Report 2005

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Directors’

report

(continued)

Agreement reached between Gold Fields and Mvelaphanda Resources

Shareholders of Gold Fields are referred to the joint announcement published by Mvelaphanda Resources and Gold Fields during March 2004,
in terms of which shareholders were advised of the fulﬁllment of all material conditions precedent to the transaction in terms of which:

• Mvela Gold (Proprietary) Limited (“Mvela Gold”), a wholly owned subsidiary of Mvelaphanda Resources, advanced a loan in the amount

of R4,139 million to GFI-Mining South Africa (Pty) Limited (“GFIMSA”), the purpose of which was to discharge, in part, the amount
payable by GFIMSA for the South African gold mining assets and business operations acquired by it from wholly owned subsidiaries
of Gold Fields (the “GFIMSA Loan”);

• Mvela Gold will acquire a 15 per cent interest in GFIMSA (the “GFIMSA shares”) by means of a subscription for shares for cash at a

subscription price of R4,139 million on the date upon which the GFIMSA loan is repaid or, at Mvela Gold’s election, on the date upon
which the GFIMSA loan becomes repayable;

• Each of Mvela Gold and Gold Fields have the right, starting one year after the subscription by Mvela Gold for the GFIMSA shares, to

require the exchange of the GFIMSA shares in return for the issue to Mvela Gold of new ordinary shares in Gold Fields.

In terms of the transaction it was agreed that if either of Mvela Gold or Gold Fields exercised the right to require the exchange of the
GFIMSA shares for ordinary shares of an equivalent value in Gold Fields, such exchange would be on a basis consistent with the valuation
method applied when the terms of the transaction were ﬁrst agreed and announced (the “right of exchange”).

Shareholders are advised that the minimum and maximum number of Gold Fields shares that will be issued by Gold Fields following the
exercise of the right of exchange have been agreed between inter alia, Mvelaphanda Resources, Gold Fields, Mvela Gold and GFIMSA
(the “exchange agreement”).

In term of the exchange agreement, Mvela Gold will be entitled to be issued with not less than 45 million and not more than 55 million
Gold Fields shares, currently comprising 9.14 per cent and 11.17 per cent of the issued share capital of Gold Fields on a fully diluted basis
respectively, if the right of exchange is exercised. If during the period prior to the date upon which the right of exchange is exercised:

• the share capital structure of Gold Fields is signiﬁcantly changed in any way; or
• Gold Fields undertakes certain corporate activities or effects payments or distributions to Gold Fields shareholders outside the normal,

ordinary and regular course of business,

the number of Gold Fields shares to be issued by Gold Fields will be adjusted accordingly on a pro rata basis to ensure that the value of the
Gold Fields shares to be issued to Mvela Gold is unaffected by any such change in share capital, corporate activity or distributions. Any
dispute between the parties as to any adjustment of the number of Gold Fields shares to be issued will be resolved by an independent
merchant or investment banker selected on the basis set out more fully in the exchange agreement.

The terms of the right of exchange did not provide any certainty to Mvelaphanda Resources regarding the minimum shareholding it would receive
in Gold Fields at the time the right of exchange was exercised. By ﬁxing the minimum number of Gold Fields shares that Mvela Gold will receive
when the right of exchange is exercised, the exchange agreement provides certainty regarding Mvelaphanda Resources’ ultimate shareholding
in Gold Fields thereby securing a sustainable black economic empowerment partnership as was intended. In exchange for providing certainty to
Mvelaphanda Resources with respect to the minimum number of Gold Fields shares to be issued to Mvela Gold it was also agreed to set a cap
on the maximum number of Gold Fields shares to be issued to Mvela Gold following the exercise of the right of exchange.

Harmony hostile offer defeated

On 20 May 2005 the High Court of South Africa (Witwatersrand Local Division) handed down a judgment, the effect of which is that:
• Harmony’s offer lapsed on 18 December 2004;
• Gold Fields has not, subsequent to 18 December 2004, been subject to the provisions of the Securities Regulation Panel Code or any

Code Rules affecting a target company or an offeree company;

• the Harmony offer was not capable in law of being revised or reinstated after it lapsed on 18 December 2004 and is not capable in law

of being revised or reinstated at the current time; and

• Harmony is precluded from making any further offer for the shares of Gold Fields for a period of 12 months from 18 December 2004.

Of the 11.5 per cent of the Gold Fields shares acquired by Harmony, 30 million or approximately 6 per cent were sold during the second
week in June to institutions through merchant broker HSBC.

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Gold Fields Limited Annual Report 2005

135

Legal

As reported in the annual report last year, a class action lawsuit was ﬁled by Zalumzi Singleton Mtwesi against Gold Fields Limited in
the State of New York on 6 May 2003. A separate lawsuit was ﬁled in a federal district court in New York by six individuals against Gold
Fields and a number of other defendants on 9 July 2004. These lawsuits allege human rights violations and other wrongful acts among
other allegations.

In both cases, the plaintiffs have failed to effect service of the complaints within the normal prescribed periods. However, in the event
that the complaints are served, Gold Fields will vigorously defend itself and anticipates moving to dismiss the complaints on numerous
grounds.

Community development projects

Gold Fields has an extensive programme of community interaction and development in communities where employees and their families
live.

During the past 11 years Gold Fields has invested more than R162 million into education, community development, healthcare,
employment and physical infrastructure projects in such communities, through The Gold Fields Foundation.

Directorate

Composition of the board
The directors of the company at the date of this report are shown on pages 6 and 7.

The directors retiring in terms of the company’s articles of association are Messrs J M McMahon, S Stefanovich, B R van Rooyen, C I von
Christierson, A J Wright and Dr A Grigorian. All of those directors, except for Mr van Rooyen, are eligible and offer themselves for re-
election. At the forthcoming annual general meeting, members will be requested to consider the necessary resolutions. A brief summary
of their curricula vitae appears on page 6.

The articles of association do not provide for a mandatory retirement age for directors. However, in terms of the board charter of the
company the retirement age is 72 years. Mr van Rooyen, who will turn 72 in September 2005, will therefore not be eligible for re-election
at the annual general meeting.

The directors are not required to hold shares in Gold Fields, although a shareholding qualiﬁcation may be imposed at any meeting of the
shareholders.

The board of directors of various subsidiaries of Gold Fields comprise some of the executive ofﬁcers and one or both of the executive
directors, where appropriate.

The business address of all the directors and executive ofﬁcers of Gold Fields is 24 St Andrews Road, Parktown, 2193, South Africa, the
address of Gold Fields’ head ofﬁce.

Interest of directors
The interests of directors in the shares of the company were as follows and did not individually exceed 1 per cent of the issued share
capital or voting control of the company.

30 June 2005

2004

Beneﬁcial

290,710

349,986

Non-beneﬁcial

121,276

62,000

The company has not entered into any contracts of service, other than the service contracts, with the executive directors of the company.

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Gold Fields Limited Annual Report 2005

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Directors’ fees

In terms of the articles of association the fees for services as non-executive directors are determined by the company in general meeting.

Directors’ emoluments

The following table records the emoluments paid to each director during the year.

Bonuses*

and

performance

Pension

Board

†

Committee

scheme

Once off

Total**

Total

fees

Salary

payments contributions payments#

2005

2004

(R)

(R)

(R)

Executive directors
I D Cockerill

3,892,812

1,684,765

602,508

6,180,085

6,132,298

(Chief Executive Ofﬁcer)

N J Holland

2,245,965

1,425,547

361,592

99,127

4,132,231

3,033,384

(Chief Financial Ofﬁcer)
Non-executive directors

2005

2004

C M T Thompson

1,200,000

1,200,000

649,100

(Chairman)
A J Wright

272,625

217,675

490,300

243,100

(Deputy Chairman)
K Ansah

272,625

—

272,625

22,750

G J Gerwel

272,625

105,350

377,975

156,000

J M McMahon

272,625

173,600

446,225

211,900

G R Parker

266,125

102,075

368,200

213,200

P J Ryan

253,125

149,225

402,350

235,300

R L Pennant-Rea

258,000

66,350

324,350

149,500

T M G Sexwale

175,125

66,000

241,125

202,800

B R van Rooyen

258,000

122,750

380,750

213,200

C I von Christierson

245,000

138,350

383,350

206,700

Total

3,745,875

1,141,375

6,138,777

3,110,312

964,100

99,127

15,199,566 11,669,232

* Bonuses for F2004 performance, paid in 2005
# Encashed leave pay
** As the executive directors’ emoluments are payable partly in US dollars in terms of an agreement with one of the company’s

subsidiaries, the directors’ emoluments in rand will be affected by ﬂuctuations in the exchange rate.

†

The increase in board fees is due to the increase of directors’ fees with effect from 1 January 2005 and a considerable increase in the

number of board meetings held during the ﬁnancial year.

The company’s remuneration policy is determined by the Compensation Committee, which over the past year has utilised the services
of Deloitte as independent advisers to the committee.

Gold Fields’ remuneration philosophy is aimed at attracting and retaining motivated high calibre executives aligned with the interests of
shareholders. Such alignment is achieved through an appropriate mix of ﬁxed and performance-based remuneration. The company aims
to set ﬁxed remuneration around the mean of the markets in which we operate and to reward high performing executives through short
and long-term incentives based on both company and personal performance.

Executives are paid gross remuneration packages, which the committee’s advisers conﬁrmed during the year are aligned with the
markets within which the company operates. All ﬁxed elements of remuneration, with the exception of a standard 24 working days
leave per annum, are included in the package, with the company having no contingent retirement or medical liabilities. A portion of
the ﬁxed remuneration of executives with international responsibilities is paid in US dollars. Increases are determined annually by the
Compensation Committee informed by remuneration surveys to which the company subscribes.

Directors’

report

(continued)

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Gold Fields Limited Annual Report 2005

137

The short-term incentive is an annual incentive bonus in terms of which the executive directors are able to earn bonuses of 50 per cent
of their GRPs for on target performance. Incentive bonuses are based on targets approved in advance by the Compensation Committee,
comprising corporate, operational and personal objectives. In the case of the chief executive, 70 per cent of his incentive is based on
corporate objectives. In other cases corporate and operational objectives (where applicable) comprise 40 per cent to 70 per cent of
the incentive with personal objectives making up the balance. In F2005 the weighted average incentive bonus paid to members of the
executive team (excluding executive directors, details of which are shown above) was 23 per cent of GRP.

The corporate objectives comprise three elements. 45 per cent of the corporate objective relates to the relative performance of the
Gold Fields share price against the average performance of the AngloGold Ashanti and Harmony share prices over the year in question.
The remaining corporate objectives, as measured against the operational plan approved by the board, relate to cash costs per kilogram
produced (30 per cent) and total gold produced (25 per cent).

Operational objectives are measured against the operational plans approved by the board and cover safety, production, costs and progress
in developing long-term ore reserves. Personal objectives are developed each year for each executive based on key performance areas
and are approved at the beginning of each year by the Compensation Committee. Performance against these objectives is measured
quarterly and the ﬁnal outcome approved by the Compensation Committee at the end of the year.

Long-term incentives are catered for in the GF Management Incentive Scheme, a pure option scheme. Options have a life of seven years
and vest as to a third of each grant, on the second, third and fourth anniversary of the grant. Awards are made by the Compensation
Committee twice a year to ensure cost averaging. The standard allocations at each management level were ﬁxed during the last year
following a review by Deloitte with the committee having the right to vary individual allocations on performance grounds.

The fees for non-executive directors were increased effective 1 January 2005, as approved at last year’s annual general meeting, following
a review to take account of the increased responsibilities of the board as well as the international nature of the company’s operations
and projects. Seven of the 13 current non-executive directors are based offshore and bring speciﬁc expertise to the board calling on their
international experience. It is not intended to increase the fees effective January 2006, save to correct the fee payable to the Chairman of
the Audit Committee, as set out in the notice of annual general meeting. The non-executive directors also participate in a non-executive
share scheme that provides for the annual allocation of options to non-executive directors. As detailed below, in line with developing best
international practice, it is intended to replace this scheme with a new plan in terms of which the non-executive directors are awarded
restricted shares which vest after three years.

Adoption of new incentive plans

International best practice, accounting and other considerations have prompted a review by the Compensation Committee and the
Non-Executive Directors Remuneration Committee established in terms of the current GF Non-Executive Director Share Plan (“the
Non-Exec Plan”) of the company’s long term remuneration strategy. Such review was conducted in the context of the company’s overall
remuneration strategy, which strategy aims to attract, reward and retain high calibre individuals on a basis which seeks to differentiate
and reward top performers. This process has revealed that both the current GF Management Incentive Scheme (“the Management
scheme”) and the Non-Exec Plan no longer conform to best practice and has resulted in the formulation of two new plans, to be
known as the Gold Fields Limited 2005 Share Plan (“the 2005 Plan”) and the Gold Fields Limited 2005 Non-Executive Share Plan (“the
2005 Non-Exec Plan”) respectively. The 2005 Plan provides for two methods of participation, namely the Performance Allocated Share
Appreciation Method and the Performance Vesting Restricted Share Method. The 2005 Plan seeks to attract, retain, motivate and reward
participating employees on a basis which seeks to align the interests of such employees with those of the company’s shareowners. The
salient features of the 2005 Plan are annexed to the Notice of General Meeting which accompanies this annual report. It is proposed to
run the 2005 Plan independently of the Management scheme, which scheme was originally approved by the company in general meeting
on 10 November 1999, on the basis that no new options will be awarded to eligible participants under the Management scheme with
effect from the date on which the ﬁrst allocations and/or awards are made under the 2005 Plan. As such the Management scheme will
terminate seven years after the date on which the last options granted thereunder may be exercised or will terminate.

The 2005 Non-Exec Plan provides for the award of restricted shares to non-executive directors that ordinarily vest after a period of three
years from the award thereof. The 2005 Non-Exec Plan seeks to provide non-executive directors of the company with the opportunity
to acquire an interest in the equity of the company on a basis which aligns their interests with those of the company’s shareowners,
thereby providing such non-executive directors with a further incentive to advance the company’s interests. The salient features of the

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Directors’

report

(continued)

2005 Non-Exec Plan are annexed to the Notice of General Meeting which accompanies this annual report. It is proposed to run the 2005
Non-Exec Plan independently of the Non-Exec Plan, which plan was originally approved by the company in general meeting on 31 October
2001, on the basis that no new options will be awarded to eligible applicants under the Non-Exec Plan with effect from the date on which
the ﬁrst awards are made under the 2005 Non-Exec Plan. As such the Non-Exec Plan will terminate ﬁve years after the date on which the
Non-Executive Directors Remuneration Committee accepted the last application for options thereunder.

The board has considered the terms of the 2005 Plan and believes it to be in the best interests of the company that it be adopted.
Accordingly, the board recommends that shareholders vote in favour of the appropriate resolutions to be proposed at the annual general
meeting. The Non-Executive Directors Remuneration Committee has considered the terms of the 2005 Non–Exec Plan and believes
it to be in the best interests of the company that it be adopted. Accordingly, the Non-Executive Directors Remuneration Committee
recommends that shareholders vote in favour of the appropriate resolutions to be proposed at the annual general meeting.

Directors’ options

The following table records details of the share options of the executive and non-executive directors during the year.

Average

Pre-tax

Average

exercise

gain at

Options

exercise

Options

exercise

Options

price per Exercised

date of

Lapsed

issued price per held as at

price per

held as at

share during the

exercise

during

30 June

Executive directors

1 July 2004

year

the year

2005

I D Cockerill

603,400

51.36

—

150,000

68.00

753,400

54.67

N J Holland

327,500

41.90

5,000

7,650

—

76,000

68.00

398,500

47.23

Total

930,900

48.03

5,000

7,650

—

226,000

68.00 1,151,900

52.10

Non-Executive directors

K Ansah

—

6,700

68.59

6,700

68.59

G J Gerwel

15,000

95.60

—

10,000

68.59

25,000

84.79

J M McMahon

41,000

70.78

—

10,000

68.59

51,000

70.35

G R Parker

45,000

68.37

—

10,000

68.59

55,000

68.41

R L Pennant-Rea

15,000

95.60

—

10,000

68.59

25,000

84.79

P J Ryan

35,000

75.42

—

10,000

68.59

45,000

73.90

T M G Sexwale

22,000

85.11

—

5,700

68.59

27,700

81.71

C M T Thompson*

300,000

48.22

—

10,000

68.59

310,000

48.87

B R van Rooyen

45,000

68.37

—

10,000

68.59

55,000

68.41

C I von Christierson

20,000

99.03

—

10,000

68.59

30,000

89.00

A J Wright

45,000

68.37

—

10,000

68.59

55,000

68.41

Total

583,000

61.37

—

102,400

68.59

685,400

62.45

*280,000 relates to options held in the GF Management Share Incentive Scheme

Administration

Mr C Farrel is corporate secretary of Gold Fields Limited. GFL Mining Services Limited continues to act as administrative, ﬁnancial and
technical advisers to the company.

Mr N J Holland acted as public ofﬁcer for the year under review.

Computershare Investor Services 2004 (Proprietary) Limited is the company’s South African transfer secretaries and Capita Registrars is
the United Kingdom registrars of the company.

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Gold Fields Limited Annual Report 2005

139

The principal accounting policies applied in the preparation of these consolidated ﬁnancial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.

1. Basis of preparation

The consolidated ﬁnancial statements of the Group have been prepared in accordance with International Financial Reporting
Standards (IFRS), South African Statements of Generally Accepted Accounting Practice and the South African Companies Act. The
consolidated ﬁnancial statements have been prepared under the historical cost convention, as modiﬁed by available-for-sale ﬁnancial
assets, and ﬁnancial assets and liabilities (including derivative instruments), which have been brought to account at fair value through
proﬁt or loss or through the fair value adjustment reserve under shareholders’ equity.

Change in accounting policy

During the ﬁnancial year, the Group adopted the provisions of IFRS 3, Business Combinations, which became effective for the
Group on 1 July 2004. Previously, goodwill (positive and negative) was recognised on the balance sheet and amortised using the
straight-line method over its estimated useful life. The adoption of IFRS 3 resulted in goodwill not being amortised, but instead
tested for impairment annually. Negative goodwill is now accounted for in earnings, immediately. This resulted in negative goodwill
previously accounted for under property, plant and equipment and investment in associate being written back to retained earnings
at the beginning of ﬁscal 2005. The effect of the change was as follows:

Restatement of opening retained income

Gross

52.6

Taxation

—

Net

52.6

Refer to note 10, property, plant and equipment and note 11, investment in associate.

2. Consolidation

2.1. Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the ﬁnancial and
operating policies generally accompanying a shareholding of more than one half of the voting rights.

The Group ﬁnancial statements consolidate the activities, assets and liabilities of the company and its subsidiaries. Operating
results of subsidiaries acquired or disposed of are included in the Group statements from the effective dates on which control
is obtained or excluded from such statements as from the date on which control ceases.

The formation of the Group was accounted for using the pooling-of-interests method. Subsequent to the formation of the
Group, the purchase method of accounting is used to account for the acquisition of subsidiaries by the Group.

The cost of an acquisition is measured as the fair value of assets given up, shares issued or liabilities undertaken at the date of
acquisition plus costs directly attributable to the acquisition.

Any excess or shortfall between the cost of acquisition and the fair value of the attributable net assets of subsidiaries at the date
of acquisition is recorded as goodwill or negative goodwill. Goodwill is not amortised, but is tested for impairment on an annual
basis. Negative goodwill is immediately accounted for in earnings.

Inter-company transactions comprising unrealised gains and losses between Group companies are eliminated, unless such
losses cannot be recovered. Inter-company balances are eliminated.

2.2. Associates

The equity method of accounting is used for an investment over which the Group exercises signiﬁcant inﬂuence, but not
control, and normally owns between 20 per cent and 50 per cent of the voting equity. Associates are equity accounted from the
effective dates of acquisition to the effective dates of disposal.

Results of associates are equity accounted from their most recent audited annual ﬁnancial statements or unaudited interim
ﬁnancial statements. Any losses of associates are brought to account in the consolidated ﬁnancial statements until the
investment in such associates is written down to a nominal amount. Thereafter, losses are accounted for only insofar as the
Group is committed to providing ﬁnancial support to such associates.

Accounting

policies

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3. Foreign currencies

Foreign currency transactions are translated into the reporting currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of
monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement.

3.1. Foreign entities

Foreign entities are regarded as those entities that are considered to be self-sustaining. The balance sheets and income
statements are translated on the following bases:

Assets and liabilities are translated at the exchange rate ruling at year-end. Income statement items are translated at the average
exchange rate for the year. Exchange differences on translation are accounted for in shareholders’ equity. These differences will
be recognised in earnings upon realisation of the underlying operation.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign
entity and are translated at transaction date, and thereafter, revalued at the year-end rate.

4. Property, plant and equipment

4.1. Mine development and infrastructure

Mining assets, including mine development and infrastructure costs and mine plant facilities, are recorded at cost of
acquisition.

Expenditure incurred to evaluate and develop new orebodies, to deﬁne mineralisation in existing orebodies, to establish or
expand productive capacity, is capitalised until commercial levels of production are achieved, at which times the costs are
amortised as set out below.

Development of orebodies includes the development of shaft systems and waste rock removal. These costs are capitalised
until the reef horisons are intersected and commercial levels of production can be realised on a sustainable basis. Subsequent
to this, costs are capitalised if the criteria for recognition as an asset are met. Access to individual orebodies exploited by the
Group is limited to the time span of the Group’s respective mining leases.

Borrowing costs incurred in respect of assets requiring a substantial period of time to prepare for their intended future use are
capitalised to the date that the assets are substantially completed.

4.2. Mineral and surface rights

Mineral and surface rights are recorded at cost of acquisition. When there is little likelihood of a mineral right being exploited,
or the value of mineral rights have diminished below cost, a write-down is effected against income in the period that such
determination is made.

4.3. Land

Land is shown at cost and is not depreciated.

4.4. Non-mining assets

Non-mining assets are recorded at cost of acquisition. These assets include the assets of the mining operations not included in
the previous categories and all the assets of the non-mining operations.

4.5. Amortisation and depreciation of mining assets

Amortisation is determined to give a fair and systematic charge in the income statement taking into account the nature of a
particular ore body and the method of mining that ore body. To achieve this the following calculation methods are used:
• mining assets, including mine development and infrastructure costs, mine plant facilities and evaluation costs, are amortised

over the lives of the mines using the units-of-production method, based on estimated proved and probable ore reserves
above infrastructure.

Accounting

policies

(continued)

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Gold Fields Limited Annual Report 2005

141

• where it is anticipated that the mine life will signiﬁcantly exceed the proved and probable reserves, the mine life is estimated

using a methodology that takes account of current exploration information to assess the likely recoverable gold from a
particular area. Such estimates are adjusted for the level of conﬁdence in the assessment and the probability of conversion to
reserves. The probability of conversion is based on historical experience of similar mining and geological conditions.

• at certain of the Group’s operations, the calculation of amortisation takes into account future costs which will be incurred to

develop all the proved and probable ore reserves.

Proved and probable ore reserves reﬂect estimated quantities of economically recoverable reserves, which can be recovered
in future from known mineral deposits.

Certain mining plant and equipment included in mine development and infrastructure is depreciated on a straight-line basis over
their estimated useful lives.

4.6. Depreciation of non-mining assets

Other non-mining assets are recorded at cost and depreciated on a straight-line basis over their expected useful lives as
follows:
• Vehicles, 20 per cent
• Computers, 33.3 per cent
• Furniture and equipment, 10 per cent

4.7. Mining exploration

Expenditure on advances to companies solely for exploration activities, prior to evaluation, is charged against income until
the viability of the mining venture has been proven. Expenditure incurred on exploration “farm-in” projects is written off until
an ownership interest has vested. Exploration expenditure to deﬁne mineralisation at existing ore bodies is considered mine
development costs and is capitalised until commercial levels of production are achieved.

Exploration activities at the Group’s Australian operations are broken down into deﬁned areas within the mining lease boundaries.
These areas are generally deﬁned by structural and geological continuity. Exploration costs in these areas are capitalised to the
extent that speciﬁc exploration programs have yielded targets and/or results that warrant further exploration in future years.

Where exploration results at a particular deﬁned area do not suggest a reasonable likelihood of an exploitable deposit that
warrants further exploration, such exploration costs are expensed.

4.8. Impairment

Recoverability of the carrying value of the long-term mining assets of the Group, is reviewed whenever events or changes
in circumstances indicate that such carrying amount may not be recoverable, and annually at the end of the ﬁscal year. To
determine whether a long-term mining asset may be impaired, the higher of “value in use” or “fair value less cost to sell” is
compared to carrying value to determine whether a long term mining asset may be impaired.

An area-of-interest is deﬁned by the Group as its lowest level of identiﬁable cash ﬂows, generally an individual operating mine,
including mines which are included in a larger mine complex. The costs attributable to individual shafts of a mine are written
off if the shaft is closed. When infrastructure is closed down during a year, the remaining carrying value attributable to that
infrastructure is written-off.

Exploration targets in respect of which costs have been capitalised at the Group’s Australian operations are evaluated on an annual
basis to ensure that these targets continue to support capitalisation of the underlying costs. Those that do not are written off.

Management’s estimate of future cash ﬂows is subject to risk and uncertainties. It is therefore reasonably possible that changes
could occur which may affect the recoverability of the Group’s mining assets.

4.9. Leases

Operating leases are charged against income as incurred.

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5. Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net assets of the acquired
subsidiary/associate at the date of acquisition. At each balance sheet date, the Group assesses whether there is any indication of
impairment to goodwill. A write-down is made if the carrying amount exceeds the recoverable amount. Previously goodwill was
amortised using the straight-line method over its estimated useful life. Refer note 1, change in accounting policy.

6. Waste normalisation or deferred stripping

At the Group’s Australian open pit operations, waste removal costs are accounted for in the income statement using the waste
normalisation method. The objective of this method is to provide that every ounce mined from the relevant pit bears its equal pro-rata
share of the total in-pit waste removal cost, expected to be incurred over the life of the pit. In-pit waste removal costs are expensed
to the income statement by applying the ratio of ounces mined in each period pro-rata to total proved and probable reserve ounces
expected to be recovered from the pit to the total expected in-pit waste removal costs to be incurred over the life of the pit. The
resultant asset or liability created by the timing difference between costs incurred and costs expensed is recorded in the balance
sheet as a current asset or liability.

7. Deferred taxation

Deferred taxation is provided in full, using the liability method, on temporary differences existing at each balance sheet date between
the tax values of assets and liabilities and their carrying amounts. Future anticipated effective tax rates are used in the determination
of deferred taxation.

These temporary differences are expected to result in taxable or deductible amounts in determining taxable proﬁts for future periods
when the carrying amount of the asset is recovered or the liability is settled. The principal temporary differences arise from depreciation
on property, plant and equipment, provisions, unutilised capital allowances, tax losses carried forward and loans.

Deferred tax assets relating to the carry forward of unused tax losses and/or unutilised capital allowances are recognised to the
extent it is probable that future taxable proﬁt will be available against which the unused tax losses and/or unutilised capital allowances
can be recovered.

No provision is made for any potential taxation liability on the distribution of retained earnings by Group companies.

8. Inventories

Inventories are valued at the lower of cost and net realisable value. Gold on hand represents production on hand after the smelting
process. Due to the different nature of the Group’s international operations, gold-in-process for such operations represents either
production in broken ore form or production from the time of placement on heap leach pads. Mineral rights represent those rights
not linked to any speciﬁc operation.

Cost is determined on the following basis:
• Gold on hand and gold-in-process is valued using the weighted average cost. Cost includes production, amortisation and related

administration costs.

• Consumable stores are valued at weighted average cost, after appropriate provision for redundant and slow-moving items.
• Mineral rights are valued at the lower of cost and net realisable value.

Net realisable value is determined with reference to current market prices.

9. Financial instruments

Financial instruments recognised in the balance sheet include cash and cash equivalents, investments, trade and other receivables,
borrowings, trade and other payables and derivative ﬁnancial instruments. The particular recognition methods adopted are disclosed
in the individual policy statements associated with each item.

9.1. Investments

Investments comprise (i) investments in listed companies which are classiﬁed as available-for-sale and are accounted for at fair
value, with unrealised holding gains and losses excluded from earnings and reported as a separate component of shareholders’
equity and are released to the income statement when the investments are sold; (ii) investments in unlisted companies which
are accounted for at cost since fair value cannot be measured reliably and are adjusted for write-downs where appropriate.

Accounting

policies

(continued)

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Gold Fields Limited Annual Report 2005

143

Purchases and sales of investments are recognised on the trade date, which is the date that the Group commits to purchase or
sell the asset. Cost of purchase includes transaction costs. The fair value of listed investments is based on quoted bid prices.

Realised gains and losses are included in determining net income or loss. Unrealised losses are included in determining net
income or loss where a signiﬁcant decline in the value of the investment, other than temporary, has occurred.

Investments in subsidiaries are recognised at cost less accumulated impairment losses.

9.2. Derivative ﬁnancial instruments

The Group’s general policy with regards to its exposure to the dollar gold price is to remain unhedged. However, hedges are
sometimes undertaken on a project speciﬁc basis as follows:
•   to protect cash ﬂows at times of signiﬁcant expenditure,
•   for speciﬁc debt servicing requirements, and
•   to safeguard the viability of higher cost operations.

The Group may from time to time establish currency and/or interest rate and/or commodity ﬁnancial instruments to protect
underlying cash ﬂows.

On the date a derivative contract is entered into, the Group designates the derivative as (1) a hedge of the fair value of a recognised
asset or liability (fair value hedge), (2) a hedge of a forecasted transaction (cash ﬂow hedge), (3) a hedge of a net investment in a
foreign entity, or (4) should the derivative not fall into one of the three categories above it is not regarded as a hedge.

Derivative ﬁnancial instruments are initially recognised in the balance sheet at cost and subsequently at their fair value, unless
they meet the criteria for the normal purchases normal sales exemption. A normal purchase or sale is a purchase or sale of
a ﬁnancial asset under a contract whose terms require delivery of the asset within the time frame established generally by
regulation or convention in the market place concerned.

Changes in fair value of a derivative that is highly effective, and that is designated and qualiﬁes as a fair value hedge, are recorded
in earnings, along with the change in the fair value of the hedged asset or liability that is attributable to the hedged risk.

Changes in fair value of a derivative that is highly effective, and that is designated as a cash ﬂow hedge, are recognised directly
in shareholders’ equity. Where the forecasted transaction or ﬁrm commitment results in the recognition of a non ﬁnancial asset
or liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement
of the cost of the asset or liability. Amounts deferred in shareholders’ equity are included in earnings in the same periods
during which the hedged ﬁrm commitment or forecasted transaction affects earnings, or when the related derivative ﬁnancial
instrument is closed-out.

Hedges of net investments in foreign entities are accounted for similarly to cash ﬂow hedges.

Certain derivative transactions, while providing effective economic hedges under the Group’s risk management policies, do not
qualify for hedge accounting. Changes in the fair value of derivatives that are not designated as hedges or that do not qualify for
hedge accounting are recognised immediately in the income statement.

Recognition of derivatives which meet the criteria for the normal purchases normal sales exemption under IAS 39 is deferred
until settlement.

9.3. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and investments in money market instruments with an
original maturity of less than three months.

The carrying amount of cash and cash equivalents is stated at cost, which approximates fair value.

Bank overdrafts are included within current liabilities in the balance sheet.

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9.4. Trade receivables

Trade receivables are carried at anticipated realisable value that is, original invoice amount less provision for impairment of
these receivables. Estimates are made for impairments based on a review of all outstanding amounts at year-end. Irrecoverable
amounts are written off during the year in which they are identiﬁed.

10. Provisions

Provisions are recognised when the Group has a present obligation, legal or constructive resulting from past events and it is probable
that an outﬂow of resources embodying economic beneﬁts will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation.

11. Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred, where applicable. Borrowings are subsequently
stated at amortised cost.

Interest payable on borrowings is recognised in the income statement over the term of the borrowings using the effective interest
method. The debt component of the Mvela loan was determined using a market related cost of debt. This amount is recorded
as a liability and is amortised against actual payments made over the life of the loan. The balance of the Mvela loan is included in
shareholders’ equity, net of income tax effects.

Borrowings are classiﬁed as current liabilities unless the Group has an unconditional right to defer settlement on the liability for at
least 12 months after the balance sheet date.

12. Environmental obligations

Long-term environmental obligations are based on the Group’s environmental management plans, in compliance with current
environmental and regulatory requirements.

Full provision is made based on the net present value of the estimated cost of restoring the environmental disturbance that has
occurred up to the balance sheet date. Increases due to additional environmental disturbances are capitalised and amortised over
the remaining lives of the mines. These increases are accounted for on a net present value basis.

Annual increases in the provision relating to the change in the net present value of the provision and inﬂationary increases are
accounted for in earnings.

The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation, technology or other
circumstances. Cost estimates are not reduced by the potential proceeds from the sale of assets or from plant clean-up at closure.

For the South African operations annual contributions are made to a dedicated rehabilitation trust fund to fund the estimated cost of
rehabilitation during and at the end of the life of the relevant mine. These annual contributions are calculated by dividing the unfunded
rehabilitation liability by the remaining lives of the mines and such contributions are subject to prior approval by the Department of
Minerals and Energy. The amounts contributed to this trust fund are included under non-current assets. Interest earned on monies
paid to rehabilitation trust funds is accrued on a time proportion basis and is recorded as interest income.

13. Employee beneﬁts

13.1. Pension and provident funds

The Group operates a deﬁned contribution retirement plan and contributes to a number of industry based deﬁned contribution
retirement plans. The retirement plans are funded by payments from employees and Group companies.

Contributions to deﬁned contribution funds are charged against income as incurred.

These funds are governed by the Pension Fund Act of 1956, as amended.

13.2. Post-retirement health care costs

Medical cover is provided through a number of different schemes. Post-retirement health care in respect of qualifying employees
is recognised as an expense over the expected remaining service lives of the relevant employees. The Group has an obligation to
provide medical beneﬁts to certain of its pensioners and dependents of ex-employees. These liabilities have been provided in full,
calculated on an actuarial basis. These liabilities are unfunded. Periodic valuation of these obligations is carried out by independent
actuaries using appropriate mortality tables, long-term estimates of increases in medical costs and appropriate discount rates.

Accounting

policies

(continued)

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Gold Fields Limited Annual Report 2005

145

14. Share capital

Ordinary shares are classiﬁed as equity.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
Incremental costs directly attributable to the issue of new shares for the acquisition of a business are included in the cost of
acquisition as part of the purchase consideration.

15. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic beneﬁts will ﬂow to the Group and the amount of revenue
can be reliably measured.

Revenue comprises the value of gold sold.

15.1

Revenue arising from gold and silver sales is recognised when the title, risks and rewards of ownership pass to the buyer. The

price of gold and silver is determined by market forces.

15.2

Revenue from services is recognised over the period the services are rendered and is accrued in the ﬁnancial statements.

15.3

Dividends, which include capitalisation dividends, are recognised when the right to receive payment is established.

15.4

Interest income is recognised on a time proportion basis taking account of the principal outstanding and the effective rate over

the period to maturity.

16. Dividends declared

Dividends and the related taxation thereon are recognised only when such dividends are declared.

17. Earnings/(loss) per share

Earnings/(loss) per share is calculated based on the net income/(loss) divided by the weighted average number of ordinary shares in
issue during the year. Diluted earnings per share is presented when the inclusion of ordinary shares that may be issued in the future
has a dilutive effect on earnings per share.

18. Segmental reporting

The Group has only one business segment, that of gold mining. Segment analysis is based on individual mining operations.

19. Comparatives

Where necessary, comparatives are adjusted to conform to changes in presentation. No comparatives were adjusted in the current
year.

20. Additional US Dollar ﬁnancial information

The translation of the ﬁnancial statements into US Dollars is based on the average exchange rate for the year for the income
statement and cash ﬂow statement and the year-end closing exchange rate for balance sheet items. Exchange differences on
translation are accounted for in shareholders’ equity.

This information is provided as supplementary information for convenience purposes only.

Figures in millions unless otherwise stated

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1,706.2

1,893.1

Revenue

11,756.3

11,772.8

1,549.9

1,768.5

Cost of sales

10,982.7

10,694.0

156.3

124.6

Operating proﬁt

773.6

1,078.8

19.4

29.1

Investment income

181.1

133.7

(3.9)

(15.9)

Finance expense

(98.9)

(26.8)

27.4

4.9

Unrealised gain on ﬁnancial instruments

30.4

189.0

(8.7)

50.5

Realised gain/(loss) on ﬁnancial instruments

313.6

(60.0)

5.6

(4.3)

Other operating (costs)/income

(26.6)

38.4

(28.5)

(31.8)

Exploration expense

(197.4)

(196.5)

(0.4)

(1.8)

Share of results of associate after tax

(11.4)

(2.9)

(61.8)

(42.0)

Impairment of assets

(260.9)

(426.2)

13.9

8.1

Proﬁt on disposal of investments

50.3

95.6

—

7.5

Proﬁt on disposal of exploration rights

46.6

—

(50.8)

Harmony hostile bid costs

(315.5)

—

(9.3)

IAMGold transaction costs

(57.9)

—

27.1

—

Proﬁt on disposal of mineral rights

—

187.2

—

(2.8)

Impairment of critical spares – St Ives

(17.2)

—

(0.7)

(0.8)

Premium on retirement of health care obligations

(4.8)

(5.0)

(3.6)

—

Write-off of mineral rights

—

(24.8)

(0.4)

0.8

Other income/(costs)

4.7

(2.5)

141.7

66.0

Proﬁt before taxation

409.7

978.0

(8.7)

(16.3)

Mining and income tax

(101.5)

(60.5)

133.0

49.7

Proﬁt after taxation

308.2

917.5

(21.7)

(20.7)

Minority shareholders’ interest

(128.5)

(149.9)

111.3

29.0

Net earnings

179.7

767.6

Headline earnings per share – cents

8.1

157

Basic earnings per share – cents

8.2

158

Diluted headline earnings per share – cents

8.3

156

Diluted basic earnings per share – cents

8.4

157

Dividends per share – cents

140

The accompanying notes form an integral part of these ﬁnancial statements

Group income

statement

for the year ended 30 June 2005

United States Dollars

South African Rand

2004

2005

2004

Figures in millions unless otherwise stated

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Gold Fields Limited Annual Report 2005

147

Group balance

sheet

at 30 June 2005

ASSETS

2,762.6

2,770.0

Non-current assets

18,558.7

17,403.7

2,512.5

2,531.3

Property, plant and equipment

16,959.5

15,828.5

0.4

2.8

Investment in associate

18.8

2.5

126.8

145.4

Investments

974.0

798.7

52.6

58.1

Environmental trust fund

389.0

331.4

70.3

32.4

Non-current portion of ﬁnancial instruments

217.4

442.6

920.5

811.8

Current assets

5,438.7

5,799.3

106.7

130.3

Inventories

872.9

672.2

111.3

116.3

Accounts receivable

779.5

700.9

9.2

14.7

Deferred stripping costs

97.5

58.2

37.0

46.8

Current portion of ﬁnancial instruments

313.8

233.5

656.3

503.7

Cash and cash equivalents

3,375.0

4,134.5

3,683.1

3,581.8

Total assets

23,997.4

23,203.0

EQUITY AND LIABILITIES

2,372.9

2,347.0

Shareholders’ equity per statement

15,724.6

14,949.3

105.2

120.8

Minority interests

809.5

662.9

879.1

799.3

Non-current liabilities

5,355.7

5,538.2

529.5

485.0

Deferred taxation

3,249.8

3,336.1

226.8

175.5

Long-term liabilities

1,176.0

1,428.6

122.8

138.8

Long-term provisions

929.9

773.5

325.9

314.7

Current liabilities

2,107.6

2,052.6

278.9

253.8

Accounts payable

1,699.3

1,756.6

14.2

18.0

Taxation

120.8

89.3

32.8

42.9

Current portion of long-term liabilities

287.5

206.7

3,683.1

3,581.8

Total equity and liabilities

23,997.4

23,203.0

The accompanying notes form an integral part of these ﬁnancial statements

United States Dollars

South African Rand

2004

2005

Notes

2005

2004

Figures in millions unless otherwise stated

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Group statement

of changes in shareholders’ equity

for the year ended 30 June 2005

Equity

Foreign

Number of

Ordinary

portion of

currency

Fair value

Total

ordinary

Mvela

translation

adjustment

Retained shareholders’

shares issued

capital

premium

loan

adjustment

reserve

earnings

equity

South African rand
Balance at 30 June 2003

472,364,872

236.2

7,736.3

—

39.9

192.8

3,090.3

11,295.5

Net income

—

767.6

Dividends

—

(669.1)

Exercise of employee share options

1,300,977

0.6

25.6

—

26.2

Proceeds from private capital raising

17,250,000

8.6

1,480.5

—

1,489.1

Shares issued relating to acquisition
of APP

564,841

0.3

60.1

—

60.4

Equity portion of Mvela loan

—

2,453.6

—

2,453.6

Mvela loan deferred taxation effect

—

676.6

—

676.6

Mark-to-market loss on listed investments

—

(35.1)

—

(35.1)

Realised gain on disposal of listed
investments

—

(84.7)

—

(84.7)

Other

11,830

—

0.9

—

0.9

Foreign exchange translation

—

(1,031.7)

—

(1,031.7)

Balance at 30 June 2004

491,492,520

245.7

9,303.4

3,130.2

(991.8)

73.0

3,188.8

14,949.3

Effect of adopting IFRS3 – release
of negative goodwill (note 1)

—

52.6

Balance at 30 June 2004 – restated 491,492,520

245.7

9,303.4

3,130.2

(991.8)

73.0

3,241.4

15,001.9

Net income

—

179.7

Dividends

—

(344.5)

Exercise of employee share options

801,706

0.4

21.7

—

22.1

Mark-to-market loss on listed investments

—

55.8

—

55.8

Realised gain on disposal of listed
investments

—

9.6

—

9.6

Foreign exchange translation

—

800.0

—

800.0

Balance at 30 June 2005

492,294,226

246.1

9,325.1

3,130.2

(191.8)

138.4

3,076.6

15,724.6

United States Dollars
Balance at 30 June 2003

472,364,872

38.5

1,254.0

—

(280.5)

16.9

421.1

1,450.0

Net income

—

111.3

Dividends

—

(92.6)

Exercise of employee share options

1,300,977

0.1

3.7

—

3.8

Proceeds from private capital raising

17,250,000

1.3

214.6

—

215.9

Shares issued relating to acquisition
of APP

564,841

—

8.7

—

8.7

Equity portion of Mvela loan

—

355.6

—

355.6

Mvela loan deferred taxation effect

—

98.1

—

98.1

Mark-to-market loss on listed investments

—

(5.1)

—

(5.1)

Realised gain on disposal of listed
investments

—

(12.3)

—

(12.3)

Other

11,830

—

0.1

—

0.1

Foreign exchange translation

—

239.4

—

239.4

Balance at 30 June 2004

491,492,520

39.9

1,481.1

453.7

(41.1)

(0.5)

439.8

2,372.9

Effect of adopting IFRS3 – release
of negative goodwill (note 1)

—

8.5

Balance at 30 June 2004 – restated 491,492,520

39.9

1,481.1

453.7

(41.1)

(0.5)

448.3

2,381.4

Net income

—

29.0

Dividends

—

(54.5)

Exercise of employee share options

801,706

0.1

3.5

—

3.6

Mark-to-market loss on listed investments

—

9.0

—

9.0

Realised gain on disposal of listed
investments

—

1.5

—

1.5

Foreign exchange translation

—

(23.0)

—

(23.0)

Balance at 30 June 2005

492,294,226

40.0

1,484.6

453.7

(64.1)

10.0

422.8

2,347.0

The accompanying notes form an integral part of these ﬁnancial statements

Figures in millions unless otherwise stated

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

149

Group cash

flow statement

for the year ended 30 June 2005

149.8

215.6

Cash ﬂows from operating activities

1,336.4

1,003.2

291.2

317.1

Cash generated by operations

1,969.2

2,009.2

15.6

24.8

Investment and interest income

153.8

107.8

26.0

(1.8)

Change in working capital

(11.2)

179.6

332.8

340.1

Cash generated by operating activities

2,111.8

2,296.6

(14.7)

(14.3)

Interest paid

(89.1)

(101.7)

(75.7)

(38.4)

Tax paid

(230.6)

(522.6)

242.4

287.4

Net cash from operations

1,792.1

1,672.3

(92.6)

(71.8)

Dividends paid

(455.7)

(669.1)

(444.2)

(354.3)

Cash ﬂows from investing activities

(2,199.4)

(3,066.0)

(417.4)

(348.4)

Additions to property, plant and equipment

(2,163.8)

(2,880.1)

Proceeds on disposal of property, plant

56.8

10.2

and equipment

63.6

391.7

(102.4)

(30.4)

Purchase of investments

(188.5)

(706.9)

29.3

18.6

Proceeds on disposal of investments

115.7

201.9

—

7.5

Proceeds on disposal of exploration rights

46.6

—

(6.0)

(6.5)

Environmental trust fund and rehabilitation payments

(40.3)

(41.1)

(4.5)

(5.3)

Post-retirement health care payments

(32.7)

(31.5)

774.8

(9.1)

Cash ﬂows from ﬁnancing activities

(56.9)

5,417.8

350.5

—

Equity portion of Mvela loan

—

2,453.6

236.2

—

Debt portion of Mvela loan

—

1,653.4

9.1

17.9

Increase in minority funding

110.9

88.6

2.7

Long-term loans raised

16.9

—

(40.7)

(33.3)

Long-term and short-term loans repaid

(206.8)

(294.0)

219.7

3.6

Shares issued

22.1

1,516.2

480.4

(147.8)

Net cash (utilised)/generated

(919.9)

3,355.0

42.3

(4.8)

Translation adjustment

160.4

(261.3)

133.6

656.3

Cash and cash equivalents at beginning of the year

4,134.5

1,040.8

656.3

503.7

Cash and cash equivalents at end of the year

3,375.0

4,134.5

The accompanying notes form an integral part of these ﬁnancial statements

United States Dollars

South African Rand

2004

2005

Notes

2005

2004

Figures in millions unless otherwise stated

150

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Notes

to financial statements

for the year ended 30 June 2005

1. Revenue

Revenue from mining operations

1,706.2

1,893.1

– Spot sales

11,756.3

11,772.8

1,706.2

1,893.1

Total revenue

11,756.3

11,772.8

2. Cost of sales

1,343.6

1,507.6

Working costs

9,362.0

9,270.8

20.3

22.5

Corporate administration expenditure

140.0

140.0

1,363.9

1,530.1

Operating costs

9,502.0

9,410.8

6.8

(5.1)

Gold inventory change

(31.4)

46.9

179.2

243.5

Amortisation and depreciation

1,512.1

1,236.3

1,549.9

1,768.5

Total cost of sales

10,982.7

10,694.0

3. Investment income

2.3

2.8

Dividends received

17.6

15.7

3.8

4.4

Interest received – environmental rehabilitation trust fund

27.3

25.9

13.3

21.9

Interest received – other

136.2

92.1

19.4

29.1

Total investment income

181.1

133.7

4. Finance expense

(5.8)

(13.6)

Net interest paid – Mvela loan

(84.5)

(40.0)

(9.0)

(0.7)

Interest paid – other

(4.6)

(61.7)

11.4

2.7

Realised exchange gain on foreign debt, net of cash

16.9

78.6

3.6

—

Unrealised exchange gain on foreign debt, net of cash

—

24.6

(2.4)

(3.1)

Environmental rehabilitation interest charge

(19.1)

(16.5)

(1.7)

(1.2)

Post-retirement health care interest charge

(7.6)

(11.8)

(3.9)

(15.9)

Total ﬁnance expense

(98.9)

(26.8)

United States Dollars

South African Rand

2004

2005

2004

Figures in millions unless otherwise stated

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

151

United States Dollars

South African Rand

2004

2005

Notes

2005

2004

5. Impairment of assets

—

20.0

Beatrix – North and South sections

124.0

—

8.4

Living Gold

52.3

—

61.8

—

Beatrix – West section

—

426.2

—

2.0

Driefontein – 10 shaft

12.3

—

1.8

Kloof – No. 3 Metallurgical plant

11.4

—

9.8

St Ives – Old mill

60.9

—

61.8

42.0

Total impairment

260.9

426.2

The Group continuously reassesses the carrying value and
recoverability of its mining assets. The carrying value is compared to
the higher of “value in use” or “fair value less cost to sell”.

The following estimates and assumptions were used by management
when reviewing the long-term assets for impairments:

– a gold price of R92,000 per kilogram for the South African

operations, US$420 per ounce for the Ghanaian operations and
AU$560 per ounce for the Australian operations;

– the extraction of proved and probable reserves as per the most

recent life of mine plan at the South African and Ghanaian
operations. The Australian operations included the likely
recoverable gold over and above proved and probable reserves
based on current exploration information taking cognisance of the
probability of conversion to reserves, and

– operating costs and capital expenditure estimates as per the most

recent life of mine plan.

The fair value of the asset is determined by applying a derived pre-tax
market multiple that is determined with reference to the market price
of Gold Fields. This multiple, which is expressed as a factor, is then
multiplied by the discounted cash ﬂow valuation of each asset, on a
pre-tax basis, expressed in rand million. The discounted cash ﬂow is
determined at a real discount rate of 5 per cent.

Figures in millions unless otherwise stated

152

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

United States Dollars

South African Rand

2004

2005

Notes

2005

2004

5. Impairment of assets

(continued)

Beatrix North and South sections
Based on the assumptions and estimates above, the recoverable
amount of R1,967 million at Beatrix, based on fair value less cost
to sell, resulted in an impairment charge of R 124 million. Of the
R124 million impairment charge, R60 million is included within the
Beatrix segment and R64 million in the Corporate and other segment.

Beatrix is a relatively low grade mine and therefore is very sensitive
to changes in its cost proﬁle. Changes in the cost proﬁle affects the
pay-limit, which in turn affects the quantum of reserves.

During ﬁscal 2005, there were cost increases at Beatrix which
resulted in an increase in the pay-limit. Due to the increase in the pay-
limit, certain reserves at 2 shaft and Vlakpan included in ﬁscal 2004
became uneconomical to mine and were therefore excluded from
the 2005 reserve calculation. In addition, due to the restructuring
at 2 shaft, certain sections were closed which resulted in a further
decrease in reserves from ﬁscal 2004. The reduction in reserves in
ﬁscal 2005 as a result of these two factors was the main reason for
the loss in value and therefore the impairment charge.

Living Gold
An impairment charge was incurred at Living Gold, the Rose project
at Driefontein. As Living Gold is not a gold asset, its valuation was
based on its business plan using a long-term exchange rate of
R8.51 to the euro and a discounted cash ﬂow valuation at a real
discount rate of 10 per cent. This resulted in an impairment charge
of R52.3 million which is included within the Corporate and other
segment.

Other
Due to the closure of certain infrastructure in the group, additional
assets were impaired:
– at Driefontein, the No. 10 shaft was closed, resulting in an

impairment of R12.3 million;

– at Kloof, the No. 3 Metallurgical plant was closed, resulting in an

impairment of R11.4 million; and

– at St Ives, the old mill was closed, resulting in an impairment of

R60.9 million.

6. Included in Proﬁt before taxation are the following:

Expenses
Auditors’ remuneration

0.7

1.0

– audit fee

6.3

4.9

0.2

0.9

– other

5.6

1.5

6.0

7.2

Environmental rehabilitation inﬂation adjustment

44.6

41.6

0.9

0.9

Operating lease charge – corporate ofﬁce

5.5

5.9

Notes

to financial statements

(continued)

for the year ended 30 June 2005

Figures in millions unless otherwise stated

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

153

United States Dollars

South African Rand

2004

2005

2004

7. Mining and income tax

The components of mining and income tax are the following:
South African taxation

(1.7)

(0.1)

– mining tax

(0.4)

(11.7)

(2.2)

(0.1)

– non-mining tax

(0.5)

(15.3)

(4.7)

(12.4)

– company and capital gains tax

(77.6)

(33.0)

—

(0.8)

– prior year adjustment – current tax

(5.0)

—

59.8

18.5

– deferred

115.0

412.7

Foreign taxation

(4.1)

(6.9)

– current

(43.3)

(9.5)

(17.2)

(21.8)

– foreign levies and royalties

(135.3)

(137.1)

(38.6)

7.3

– deferred

45.6

(266.6)

(8.7)

(16.3)

Total mining and income tax

(101.5)

(60.5)

South African mining tax on mining income is determined on a formula
basis which takes into account the proﬁt and revenue from mining
operations during the year. Non-mining income is taxed at a standard
rate of 37.0% (2004: 38.0%). Deferred tax is provided at the estimated
effective mining tax rate on temporary differences. Major items causing
the group’s income tax provision to differ from the maximum statutory
mining tax rate of 45.0% (2004: 46.0%) were:

Tax on proﬁt before taxation at maximum South African

(184.3)

(449.9)

mining statutory tax rate
Rate adjustment to reﬂect the company tax rate in South Africa
of 29.0%, (2004: 30.0%) tax rate in Ghana of 30.25%
(2004: 32.5%) and tax rate in Australia of 30.0% (2004: 30.0%)

194.6

277.2

South African mining tax formula rate adjustment

71.2

48.0

Ghanaian tax rate adjustment

53.1

—

Net non-taxable income and non-deductible expenditure

(214.3)

146.8

Foreign levies and royalties

(135.3)

(137.1)

Australian tax beneﬁt arising from tax consolidation

166.3

—

Deferred tax asset not recognised

(33.2)

—

Other

(19.6)

54.5

Income and mining tax expense

(101.5)

(60.5)

154

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Notes

to financial statements (continued)

for the year ended 30 June 2005

7. Mining and income tax (continued)

7.1 South African mining tax on mining income is determined according to a formula which takes into account the proﬁt and

revenue from mining operations.

South African mining taxable income is determined after the deduction of all mining capital expenditure, with the proviso that
this cannot result in an assessed loss. Capital expenditure amounts not deducted are carried forward as unredeemed capital
expenditure to be deducted from future mining income. Depreciation is ignored for the purpose of calculating South African
mining taxation.

The formula for determining South African mining tax is:

Y = 45 – 225/X (2004: Y = 46 – 230/X)

where Y is the percentage rate of tax payable and X is the ratio of mining proﬁt, after the deduction of redeemable capital
expenditure, to mining revenue expressed as a percentage.

7.2 Non-mining income of South African mining operations consists primarily of interest received and is taxed at a rate of 37.0%

(2004: 38.0%).

7.3 South African company tax, for non-mining companies in the group, is determined at a rate of 29.0% (2004: 30.0%).

7.4 Company tax at Gold Fields Ghana Limited and Abosso Gold Fields Limited is determined at a rate of 28.0% (2004: 32.5%).

However, as the tax rate change was effective 1 January 2005, an average of 30.25% was applied in ﬁscal 2005.

7.5 Company tax at St Ives (Pty) Limited and Agnew (Pty) Limited is determined at a rate of 30.0% (2004: 30.0%).

7.6 Deferred tax is provided at the expected future rate for mining operations arising from temporary differences between the

book values and tax values of assets and liabilities.

7.7 At 30 June 2005 the group had the following amounts available for set-off against future income:

– unredeemed capital expenditure at GFI Mining South Africa (Pty) Limited of R2,258.6 million (2004: R1,977.6 million).

This comprises R Nil (2004: R11.9 million) at the Driefontein operation, R417.9 million (2004: R233.2 million) at the Kloof
operation and R1,840.7 million (2004: R1,732.5 million) at the Beatrix operation.

– estimated and assessed losses at GFI Mining South Africa (Pty) Limited of R49.4 million (2004: R52.7 million). This

comprises R1.3 million (2004: R Nil) at the Kloof operation and R48.1 million (2004: R52.7 million) at the Beatrix operation.

These deductions are available to be utilised against income generated by the relevant tax entity and do not expire unless
the tax entity concerned ceases to commercially mine for a period of longer than one year. Under South African mining tax
ring-fencing legislation, each tax entity is treated separately and as such these deductions can only be utilised by the tax
entities in which the deductions have been generated.

– estimated tax losses at Gold Fields Shared Services (Pty) Limited of R44.5 million (2004: R15.1 million).

– estimated tax losses at Orogen Investment SA (Luxembourg) of US$120.2 million (2004:US$ 121.8 million). No deferred

tax asset is recognised in the balance sheet for this amount. In terms of current Luxembourg taxation legislation, losses
incurred in accounting periods subsequent to 31 December 1990, can be carried forward indeﬁnitely. All losses incurred by
Orogen Investment SA (Luxembourg) were incurred subsequent to 31 December 1990.

– estimated tax losses at Gold Fields Australia (Pty) Limited of A$239.3 million (2004: A$75.0 million). These estimated tax

losses do not have an expiration date.

– estimated capital allowances at Gold Fields Ghana Limited of US$73.3 million (2004: US$116.2 million) and Abosso

Goldﬁelds Limited of US$ Nil (2004: US$8.4 million), respectively. These estimated capital allowances do not have an
expiration date.

Figures in millions unless otherwise stated

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

155

8. Earnings per share

8.1 Headline earnings per share – cents

157

Headline earnings per share is calculated on the basis of adjusted net
earnings attributable to ordinary shareholders of R291.3 million
(2004: R763.2 million) and 491,987,508 (2004: 485,020,966) shares
being the weighted average number of ordinary shares in issue
during the year.

Net earnings is reconciled to headline earnings as follows:

111.3

28.9

Net earnings

179.7

767.6

61.8

42.0

Impairment of assets

260.9

426.2

(16.1)

(8.3)

Taxation effect of impairment of assets

(51.7)

(111.3)

(27.1)

—

Proﬁt on disposal of mineral rights

—

(187.2)

(7.7)

—

Taxation effect of disposal of mineral rights

—

(53.0)

(13.9)

(8.1)

Proﬁt on disposal of investments

(50.3)

(95.6)

2.8

0.5

Taxation effect of proﬁt on disposal of investments

3.1

19.2

—

(7.5)

Proﬁt on disposal of exploration assets

(46.6)

—

(0.5)

(0.6)

Asset sales after tax adjustments

(3.8)

(2.7)

110.6

46.9

Headline earnings

291.3

763.2

8.2 Basic earnings per share – cents

158

Basic earnings per share is calculated on the basis of net earnings
attributable to ordinary shareholders of R179.7 million
(2004: R767.6 million) and 491,987,508 (2004: 485,020,966) shares
being the weighted average number of ordinary shares in issue
during the year.

8.3 Diluted headline earnings per share – cents

156

Diluted headline earnings per share is calculated on the basis of headline
earnings attributable to ordinary shareholders of R291.3 million
(2004: R763.2 million) and 493,690,893 (2004: 487,698,431) shares
being the diluted number of ordinary shares in issue during the year.

The weighted average number of shares has been adjusted by the
following to arrive at the diluted number of ordinary shares:

Weighted average number of shares

491,987,508 485,020,966

Share options in issue

1,703,385

2,677,465

Diluted number of ordinary shares

493,690,893 487,698,431

8.4 Diluted basic earnings per share – cents

157

Diluted basic earnings per share is calculated on the basis of
net earnings attributable to ordinary shareholders of R179.7 million
(2004: R767.6 million) and 493,690,893 (2004: 487,698,431) shares
being the diluted number of ordinary shares in issue during the year.

9. Dividends

2004 Final dividend of 40 cents per share (2003: 100 cents)

63.2

29.5

declared on 13 August 2004 and paid on 23 August 2004.

196.8

472.4

2005 Interim dividend of 30 cents per share (2004: 40 cents)

29.4

25.0

declared on 18 February 2005 and paid on 28 February 2005

147.7

196.7

92.6

54.5

Total dividends

344.5

669.1

United States Dollars

South African Rand

2004

2005

2004

Figures in millions unless otherwise stated

156

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

United States Dollars

South African Rand

Land, mineral

Mine

Land, mineral

rights and

development

rights and

rehabilitation

and

rehabilitation

assets

infrastructure

Total

infrastructure

assets

10. Property, plant and equipment

30 June 2005
Cost

401.0

3,840.5

4,241.5

Balance at beginning of the year

26,721.7

24,195.6

2,526.1

(3.5)

185.4

181.9

Reclassiﬁcation

1,129.8

1,151.5

(21.7)

14.8

333.6

348.4

Additions

2,163.8

2,071.9

91.9

(4.5)

(16.2)

(20.7)

Disposals

(128.9)

(100.7)

(28.2)

15.8

—

15.8

Additions to rehabilitation assets

98.0

—

98.0

Effect of adopting IFRS 3 – release

—

4.0

of negative goodwill

24.9

—

7.1

Deferred stripping costs reclassiﬁed

44.1

—

19.7

(176.7)

(157.0)

Translation adjustment

907.6

603.6

304.0

443.3

4,177.7

4,621.0

Balance at end of the year

30,961.0

27,990.9

2,970.1

Accumulated depreciation

158.8

1,570.2

1,729.0

Balance at beginning of the year

10,893.2

9,893.0

1,000.2

—

181.9

Reclassiﬁcation

1,129.8

—

17.6

225.9

243.5

Charge for the year

1,512.1

1,402.8

109.3

(0.1)

(11.3)

(11.4)

Disposals

(70.9)

(70.1)

(0.8)

0.9

41.1

42.0

Impairment

260.9

255.1

5.8

1.6

(96.9)

(95.3)

Translation adjustment

276.4

192.6

83.8

178.8

1,910.9

2,089.7

Balance at end of the year

14,001.5

12,803.2

1,198.3

264.5

2,266.8

2,531.3

Carrying value at end of the year

16,959.5

15,187.7

1,771.8

30 June 2004

401.0

3,840.5

4,241.5

Cost

26,721.7

24,195.6

2,526.1

158.8

1,570.2

1,729.0

Accumulated depreciation

10,893.2

9,893.0

1,000.2

242.2

2,270.3

2,512.5

Carrying value at end of the year

15,828.5

14,302.6

1,525.9

Notes

to financial statements (continued)

for the year ended 30 June 2005

Figures in millions unless otherwise stated

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

157

11. Investment in associate

The group has a 33.1% interest in Rand Reﬁnery Limited, a company
incorporated in the Republic of South Africa, which is involved in the
reﬁning of bullion and by-products which are sourced from inter alia
South Africa and foreign gold producing mining companies. The
investment has been equity accounted as from 1 July 2002.

Investment in associate consists of:

1.9

2.9

Unlisted shares at cost

19.4

19.4

—

4.1

Effect of adopting IFRS3 – release of negative goodwill

27.7

—

(0.9)

(2.1)

Share of accumulated losses brought forward

(16.9)

(8.3)

(0.4)

(1.8)

Loss after taxation

(11.4)

(2.9)

(0.8)

—

Dividends

—

(5.7)

0.6

(0.3)

Translation adjustments

—

0.4

2.8

Total investment in associate

18.8

2.5

The group‘s effective share of balance sheet items in its associate
is as follows:

8.9

8.7

Non-current assets

58.3

55.9

4.3

2.1

Current assets

14.4

27.0

13.2

10.8

Total assets

72.7

82.9

0.8

0.4

Non-current liabilities

2.8

4.6

1.7

2.1

Current liabilities

13.8

10.8

2.5

2.5

Total equity and liabilities

16.6

15.4

10.7

8.3

Net assets

56.1

67.5

Reconciliation of the total investment in associate with net assets:

10.7

8.4

Net assets

56.1

67.5

—

(5.6)

Fair value adjustment*

(37.3)

(37.3)

(10.3)

—

Negative goodwill

—

(27.7)

0.4

2.8

Carrying value

18.8

2.5

* The investment in associate was fair valued at 1 July 2002, the date when

signiﬁcant inﬂuence was obtained.

12. Investments

Listed

81.9

87.4

Cost less permanent write-downs

585.3

515.7

11.5

20.7

Net unrealised gain on revaluation

138.4

73.0

93.4

108.1

Book value

723.7

588.7

93.4

108.1

Market value

723.7

588.7

Unlisted

32.3

30.3

Book value and directors’ valuation

203.3

203.5

125.7

138.4

Total listed and unlisted investments

927.0

792.2

1.1

7.0

Loans advanced

47.0

6.5

126.8

145.4

Total investments

974.0

798.7

All investments are classiﬁed as available for sale. Details of major
investments are given on pages 176 and 177

United States Dollars

South African Rand

2004

2005

2004

Figures in millions unless otherwise stated

158

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

13. Environmental trust fund

Gold Fields Mining Environmental Trust Fund

35.3

52.6

Balance at beginning of the year

331.4

275.0

4.4

4.9

Contributions made during the year

30.3

30.5

3.8

4.4

Interest earned during the year

27.3

25.9

9.1

(3.8)

Translation adjustment

—

52.6

58.1

Balance at end of the year

389.0

331.4

The proceeds from this fund are intended to fund environmental
rehabilitation obligations of the group’s South African mines and they
are not available for the general purposes of the group. All income from
this asset is reinvested or spent to meet these obligations. These
obligations are included in environmental rehabilitation costs under
long-term provisions (refer note 21.2)

14. Financial instruments

107.3

79.2

Gross amount

531.2

676.1

(37.0)

(46.8)

Current portion included in current assets

(313.8)

(233.5)

Total non-current portion of amount owing on close-out of

70.3

32.4

ﬁnancial instruments

217.4

442.6

The amount owing on the close-out of ﬁnancial instruments relates
to the close-out of the Australian dollar/United States dollar ﬁnancial
instruments on 7 January 2004. The close-out of the outstanding
open positions of US$275.0 million was executed at an average
rate of 0.7670 US$/A$. These transactions locked in a gross proﬁt
amounting to US$115.7 million and the underlying cash receipts were
deferred to match the maturity dates of the original transactions.

On 7 May 2004, the future US dollar values were ﬁxed in Australian
dollars to take advantage of a weakening in the Australian dollar
against the US dollar since the close-out of these ﬁnancial
instruments. The net balance on the original value of the future cash
ﬂows was US$107.4 million (US$115.7 million less US$8.3 million
premium on the call option) or A$140.0 million at 0.7670 US$/A$,
the rate at the time of the original transaction. The value ﬁxed in
Australian dollars amounted to A$147.0 million, based on a spot rate
of 0.7158 US$/A$. Payments against this settlement are receivable
on a quarterly basis with the last payment due on 29 December 2006.

15. Inventories

74.1

80.3

Gold-in-process

537.6

466.9

32.0

49.3

Consumable stores

330.4

201.4

0.6

0.7

Mineral rights

4.9

3.9

106.7

130.3

Total inventories

872.9

672.2

United States Dollars

South African Rand

2004

2005

2004

Notes

to financial statements (continued)

for the year ended 30 June 2005

Figures in millions unless otherwise stated

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

159

16. Accounts receivable

31.4

43.8

Gold sale trade receivables

293.3

198.1

14.0

11.6

Other trade receivables

77.5

88.3

2.0

2.0

Deposits

13.6

12.6

1.6

0.4

Interest receivable

3.0

9.8

36.4

18.0

Value added tax

120.6

228.9

3.2

4.9

Payroll debtors

33.0

20.4

6.9

11.0

Pre-paid expenses

74.0

43.6

—

1.3

Financial instrument debtors

8.9

—

12.0

Capitalised project costs to be transferred to investments

80.1

—

2.6

Rand Mutual Assurance refund

17.5

—

15.8

8.7

Other

58.0

99.2

111.3

116.3

Total accounts receivable

779.5

700.9

17. Cash and cash equivalents

4.8

7.4

Cash at bank and on hand

49.9

30.3

651.5

496.3

Short-term deposits

3,325.1

4,104.2

656.3

503.7

3,375.0

4,134.5

18. Minority interests

85.8

98.9

Balance at beginning of the year

662.9

668.2

21.7

20.7

Share of proﬁt after taxation

128.5

149.9

—

(17.9)

Dividends paid

(111.2)

—

(29.1)

—

Arising on acquisition of minorities in Arctic Platinum

—

(200.8)

(2.7)

(2.2)

Loans repaid during the year

(13.9)

(18.8)

15.6

20.1

Loans advanced during the year

124.8

107.4

13.9

1.2

Translation adjustment

18.4

(43.0)

105.2

120.8

Balance at end of the year

809.5

662.9

19. Deferred taxation

The detailed components of the net deferred taxation liability which
results from the differences between the amounts of assets and
liabilities recognised for ﬁnancial reporting and taxation purposes in
different accounting periods are:
Deferred taxation liabilities

833.1

780.0

– Mining assets

5,226.1

5,248.7

21.7

23.2

– Investment in environmental trust fund

155.6

136.8

23.1

21.9

– Financial instruments

146.7

145.6

2.8

6.4

– Inventories

43.1

17.4

5.9

9.3

– Other

62.6

37.2

886.6

840.8

Gross deferred taxation liabilities

5,634.1

5,585.7

Deferred taxation assets

(65.3)

(58.6)

– Provisions

(392.3)

(411.2)

(101.4)

(76.9)

– Loans

(515.5)

(638.9)

(23.7)

(65.0)

– Tax losses

(435.5)

(149.5)

(166.7)

(155.3)

– Unredeemed capital expenditure

(1,041.0)

(1,050.0)

529.5

485.0

Net deferred taxation liabilities

3,249.8

3,336.1

549.4

529.5

Balance at beginning of the year

3,336.1

4,279.6

(98.1)

—

Deferred tax effect of the Mvela transaction recorded in equity

—

(676.6)

(21.2)

(25.9)

Transferred through the income statement

(160.6)

(146.1)

99.4

(18.6)

Translation adjustment

74.3

(120.8)

529.5

485.0

Balance at end of the year

3,249.8

3,336.1

United States Dollars

South African Rand

2004

2005

2004

Figures in millions unless otherwise stated

160

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

20. Long-term liabilities

– Debt component of Mvela loan
On 17 March 2004, Mvelaphanda Gold (Pty) Limited, a wholly owned
subsidiary of Mvelaphanda Resources Limited, advanced an amount
of R4,139.0 million to GFI Mining South Africa (Pty) Limited. The loan
bears interest at a ﬁxed rate of 10.57% nominal annual compouded
semi-annually. Interest is payable semi-annually and the loan amount
is repayable ﬁve years from the date of advance on 17 March 2009.
All payments under this loan have been guaranteed by Gold Fields
Limited and two of its offshore subsidiaries.

On the date the loan is repaid, Mvelaphanda Gold (Pty) Limited will
subscribe for new shares in GFI Mining South Africa (Pty) Limited
such that after the subscription it will own 15 percent of the enlarged
equity of GFI Mining South Africa (Pty) Limited.

The net proceeds of the loan of R4,107.0 million (R4,139.0 million
less R32.0 million of costs) was accounted for in two components,
a debt component and an equity component.

The debt component on initial recognition, included in long-term
liabilities, is the present value of the future interest payments
discounted using a market related cost of debt. The residual amount,
representing the value of the equity component, is included in
shareholders’ equity.

The debt component of the Mvela loan is amortised against
payments of interest on the loan of R4,139.0 million with a
proportionate amount of such payments recognised as interest on
the debt component of the Mvela loan.

During 2004, GFI Mining South Africa (Pty) Limited entered into
two interest rate swaps, an amortising and an accreting swap.
The amortising swap for R1,653.0 million reﬂects the proﬁle of the
debt component of the Mvela loan and was designated as a fair
value hedge. The accreting swap for R2,486.0 million accretes to
R4,139.0 million over ﬁve years and is regarded as a derivative and
is thus marked to market. The ﬁxed rate receivable on these interest
rate swaps was equal to the interest rate payable on the loan from
Mvelaphanda Gold (Pty) Limited and the ﬂoating rate payable was the
three month JIBAR rate plus a margin of 1.025%. (Refer note 33)

On 3 June 2005, the interest rate swap was closed-out resulting in a
gain of R317.0 million since inception. GFI Mining South Africa (Pty)
Limited now reverts to the ﬁxed interest rates referred to above. Of
the R317.0 million, R225.0 million was accounted for as a gain on
ﬁnancial instruments and the balance of R92.0 million was accounted
for as a credit to interest paid on the Mvela loan.

United States Dollars

South African Rand

2004

2005

2004

Notes

to financial statements (continued)

for the year ended 30 June 2005

Figures in millions unless otherwise stated

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

161

20. Long-term liabilities (continued)

– Debt component of Mvela loan (continued)

595.2

595.2

Loan advanced

4,107.0

4,107.0

(355.6)

(355.6)

Equity component

(2,453.6)

(2,453.6)

239.6

239.6

Debt component on initial recognition

1,653.4

1,653.4

(2.6)

(2.6)

Fair value adjustment in relation to amortising interest rate swap

(18.1)

(18.1)

Fair value adjustment in relation to amortising interst rate swap

—

2.7

reversed to earnings on close-out of interest rate swap

18.1

—

(30.9)

Loan repayments during the year

(206.8)

—

22.6

(7.1)

Translation adjustment

—

259.6

215.9

Fair value of debt component at end of year

1,446.6

1,635.3

The fair value adjustment in relation to the amortising interest rate
swap was calculated using cash ﬂows over the remaining period of
the debt discounted at the ﬁve year forward curve of the three-month
JIBAR rate plus a margin of 1.025%.

– Industrial Development Corporation loan

—

2.5

Loan advanced

16.9

—

On 28 May 2004, Living Gold (Pty) Limited (“Living Gold”), a
subsidiary of GFI Mining South Africa (Pty) Limited entered into an
agreement with the Industrial Development Corporation of South
Africa Limited (“IDC”) in terms of which IDC agreed to provide a loan
facility of R 16.6 million. On 24 November 2004, Living Gold drew
down the full amount of the facility.

In terms of the loan agreement, interest accrues on the facility based
on the First National Bank of Southern Africa Limited prime overdraft
rate. The prime overdraft rate at 30 June 2005 was 10.5%. The loan
is repayable in 96 equal monthly instalments beginning 1 July 2006.

259.6

218.4

Gross long-term liabilities

1,463.5

1,635.3

(32.8)

(42.9)

Current portion included in current liabilities

(287.5)

(206.7)

226.8

175.5

Total long-term liabilities

1,176.0

1,428.6

United States Dollars

South African Rand

2004

2005

2004

Figures in millions unless otherwise stated

162

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

21. Long-term provisions

9.2

3.6

21.1 Post-retirement health care costs

24.1

58.1

The Group has certain liabilities to subsidise the contributions payable
by certain pensioners and dependants of ex-employees on a
pay-as-you-go basis. During ﬁnancial 2005 approximately 21 percent
(2004: 6 percent) of these pensioners and dependants were bought
out of the scheme at a 15 percent premium to the latest actuarial
valuation. The remaining obligation was actuarially valued at 30 June
2005 and the outstanding contributions will be funded over the
lifetime of these pensioners and dependants.
The following table sets forth the funded status and amounts
recognised by the group for post-retirement health care costs:

8.6

2.8

Actuarial present value

18.8

54.4

—

Plan assets at fair value

—

8.6

2.8

Accumulated beneﬁt obligation in excess of plan assets

18.8

54.4

—

Unrecognised prior service costs

—

Unrecognised actuarial (gains)/losses

—

8.6

2.8

Post-retirement health care liability

18.8

54.4

Beneﬁt obligation reconciliation

11.6

9.2

Balance at beginning of the year

58.1

90.7

1.7

1.2

Interest charge

7.6

11.8

(0.6)

(0.4)

Payments during the year

(2.5)

(4.4)

(2.6)

(2.2)

Beneﬁts forfeited

(13.7)

(17.9)

0.7

0.8

Premium on buy-out of pensioners and dependants

4.8

5.0

(3.9)

(4.9)

Buy-out of pensioners and dependants

(30.2)

(27.1)

2.3

(0.1)

Translation adjustments

—

9.2

3.6

Balance at end of the year

24.1

58.1

The obligation has been valued using the projected unit credit funding
method on past service liabilities. The valuation assumes a health
care cost inﬂation rate of 7% per annum (2004: 11%) and a discount
rate of 9% per annum (2004: 13%). Assumed health care cost trend
rates have a signiﬁcant impact on the amounts reported for the health
care plans.

A one percentage point increase in assumed health care trend
rates would have increased interest cost for 2005 by R0.7 million
(9.4%) (2004: R1.3 million (10.8%). The effect of this change on the
accumulated post-retirement health care beneﬁt obligation at
30 June 2005 would have been an increase of R2.3 million (9.6%)
(2004: R5.4 million (9.3%)).

A one percentage point decrease in assumed health care trend
rates would have decreased interest cost for 2005 by R0.6 million
(8.1%) (2004: R1.4 million (11.7%)). The effect of this change on the
accumulated post-retirement health care beneﬁt obligation at
30 June 2005 would have been a decrease of R2.2 million (9.0%)
(2004: R4.7 million (8.1%)).

Notes

to financial statements (continued)

for the year ended 30 June 2005

United States Dollars

South African Rand

2004

2005

2004

Figures in millions unless otherwise stated

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

163

21. Long-term provisions (continued)
21.2 Environmental rehabilitation costs

91.8

113.6

Balance at beginning of the year

715.4

715.3

—

15.8

Additional provision due to new disturbances

98,0

—

6.0

7.2

Inﬂation charge

44.6

41.6

2.4

3.1

Interest charge

19.1

16.5

(1.6)

(1.6)

Payments against provision

(10.0)

(10.6)

15.0

(2.9)

Translation adjustments

38.7

(47.4)

113.6

135.2

Balance at end of the year

905.8

715.4

The group’s South African operations contribute to a dedicated
environmental rehabilitation trust fund to provide for the estimated
cost of rehabilitation at the end of the mines’ lives. At 30 June 2005
the balance in this fund was R389.0 million (2004: R331.4 million).
Refer note 13.

The expected timing of the cash outﬂows in respect of the provision
is on the closure of the various mining operations. However, certain
current rehabilitation costs are charged to this provision as and when
incurred.

122.8

138.8

Total long-term provisions

929.9

773.5

22. Accounts payable

82.1

64.3

Trade payables

430.6

516.9

127.5

138.7

Accruals and other payables

928.8

803.3

38.5

39.0

Leave pay accrual

261.1

242.4

5.4

11.8

Net interest payable on debt component of Mvela loan

78.8

34.3

25.4

—

Financial instrument creditor

—

159.7

278.9

253.8

Total accounts payable

1,699.3

1,756.6

23. Cash generated by operations

111.3

28.9

Net earnings

179.7

767.6

8.7

16.3

Taxation

101.5

60.5

14.7

14.3

Interest paid

89.1

101.7

(15.6)

(24.7)

Investment income

(153.8)

(107.8)

2.3

2.8

Dividends received

17.6

15.7

13.3

21.9

Interest received

136.2

92.1

21.7

20.7

Minority interest

128.5

149.9

Earnings before tax, interest, investment income and

140.8

55.5

minority interest

345.0

971.9

150.4

261.6

Non-cash items:

1,624.2

1,037.3

179.2

243.5

Amortisation and depreciation

1,512.1

1,236.3

(28.2)

—

Exchange rate difference

—

(195.1)

61.8

42.0

Impairment of assets

260.9

426.2

2.8

Impairment of critical spares – St Ives

17.2

—

1.7

1.2

Interest adjustment to post-retirement health care liability

7.6

11.8

6.0

7.2

Inﬂation adjustment to rehabilitation liability

44.6

41.6

2.4

3.1

Interest adjustment to rehabilitation liability

19.1

16.5

3.6

—

Write off of mineral rights

—

24.8

—

(7.5)

Proﬁt on disposal of exploration rights

(46.6)

—

(27.1)

—

Proﬁt on disposal of mineral rights

—

(187.2)

(13.9)

(8.1)

Proﬁt on disposal of investments

(50.3)

(95.6)

0.7

0.8

Retirement of health care obligations

4.8

5.0

—

(14.1)

Non-cash portion of realised gain on ﬁnancial instruments

(87.4)

—

(27.4)

(4.9)

Unrealised exchange gain on ﬁnancial instruments

(30.4)

(189.0)

(3.6)

—

Unrealised exchange gain on foreign debt, net of cash

—

(24.6)

(4.8)

(4.4)

Other

(27.4)

(33.4)

291.2

317.1

Total cash generated by operations

1,969.2

2,009.2

United States Dollars

South African Rand

2004

2005

2004

Figures in millions unless otherwise stated

164

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

24. Change in working capital

5.4

(23.7)

Inventories

(147.3)

37.1

(25.6)

24.3

Accounts receivable

151.1

(176.3)

46.2

(2.4)

Accounts payable

(15.0)

318.8

26.0

(1.8)

Total change in working capital

(11.2)

179.6

25. Tax paid

(52.0)

(14.2)

Amount owing at beginning of the year

(89.3)

(405.3)

(29.9)

(42.2)

SA and foreign current taxation

(262.1)

(206.6)

14.2

18.0

Amount owing at end of the year

120.8

89.3

(8.0)

—

Translation

—

(75.7)

(38.4)

Total tax paid

(230.6)

(522.6)

26. Dividends paid

(92.6)

(54.5)

Dividends per statement of shareholders’ equity

(344.5)

(669.1)

—

(17.3)

Dividends paid to minority shareholders

(111.2)

—

(92.6)

(71.8)

Total dividends paid

(455.7)

(669.1)

27. Additional cash ﬂow information

Acquisition of minority shareholders’ interest in Arctic Platinum

29.1

—

Minority shareholders’ interest

—

200.8

(8.7)

—

Paid for by issue of share capital

—

(60.4)

20.4

—

Paid for by cash

—

(140.4)

The R140.4 million paid for in cash is included in the purchase of
investments line item in the cash ﬂow statement

28. Retirement beneﬁts

All employees are members of various deﬁned contribution
retirement schemes.

Contributions to the various retirement schemes are fully expensed
during the year in which they are incurred. The cost of providing
retirement beneﬁts for the year amounted to R291.1 million
(2004: R266.8 million).

29. Commitments

Capital expenditure

520.7

454.6

– authorised

3,045.8

3,280.1

57.5

23.8

– contracted for

159.8

362.1

Operating lease

0.9

0.7

– within one year

4.7

5.5

3.5

2.6

– thereafter

17.6

22.3

44.0

51.3

Other guarantees

344.0

276.9

Commitments will be funded from internal sources and to the extent
necessary from borrowings.

30. Contingent liabilities

No material claims have been ﬁled against the group.

World Gold Council
Gold Fields is a member of the World Gold Council. In terms of the
membership agreement, all members are responsible for certain
costs, including core costs on a three year rolling basis, winding
up costs, if applicable, and various other contingent liabilities.
Apportionment of liabilities to individual members, should they arise,
is done proportionate to the member’s production relative to the total
production of all members. To date, no claims have been made on
Gold Fields.

31. Lines of credit

The Group has unutilised lines of credit of R2.6 billion
at 30 June 2005.

United States Dollars

South African Rand

2004

2005

2004

Notes

to financial statements (continued)

for the year ended 30 June 2005

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

165

32. Risk management activities

In the normal course of its operations, the group is exposed to commodity price, currency, interest rate, liquidity and credit risk.
In order to manage these risks, the group has developed a comprehensive risk management process to facilitate control and
monitoring of these risks.

Concentration of credit risk
The group’s ﬁnancial instruments do not represent a concentration of credit risk as the group deals with a number of major banks.
Accounts receivable are regularly monitored and assessed and where necessary an adequate level of provision is maintained.

A formal process of allocating counterparty exposure and prudential limits is approved by the audit committee and is applied
under the supervision of the group’s executive committee. No marginal facilities are engaged.

Foreign currency and commodity price risk
In the normal course of business the group enters into transactions for the sale of its gold, denominated in US dollars. In addition,
the group has assets and liabilities in a number of different currencies (primarily US dollars and Australian dollars). As a result, the
group is subject to transaction and translation exposure from ﬂuctuations in foreign currency exchange rates.

Due to the fact that US$165.0 million of debt was drawn down to acquire the St Ives and Agnew operations, it was deemed
prudent to establish Australian dollar/United States dollar instruments to protect the cash ﬂows of the operations in the event
of the strengthening of the Australian dollar. In line with this decision US$500.0 million of United States dollar/Australian dollar
currency ﬁnancial instruments were established over ﬁve years in respect of the St Ives and Agnew operations. The instruments
are a combination of outright forwards and options and provide protection at exchange rates ranging between 49 and 52 US cents.

On 7 January 2004, the remaining instruments were closed out. The existing forward purchases of dollars and the put and call options
were closed out by entering into equal and opposite transactions. The close out of the outstanding portion of US$275.0 million was at
an average spot rate of 0.7670 US$/A$. Subsequent to this, on 7 May 2004, the future US dollar values were ﬁxed in Australian dollars
at a spot rate of 0.715 US$/A$, to take advantage of the weakened Australian dollar against the US dollar at that time.

In order to participate in any further Australian dollar appreciation, a strip of quarterly maturing Australian dollar/United States
dollar call options were purchased in respect of an amount of US$275 million of which the value dates and amounts match the
dates of the original structure.The average strike price of these options is 0.7670 US$/A$. US$175.0 million of these instruments
remain at 30 June 2005 (2004: US$262.5 million).

In so far as South African rand/United States dollar exposures are concerned, the group does not have a general policy of hedging
these exposures, but will from time to time establish positions on an opportunistic basis. In line with this policy, forward cover of
US$ 30.0 million (2004: US$ 50.0 million) was purchased to cover any US dollar commitments payable from South Africa.

Gold Fields Ghana purchased a one year Asian style (average monthly price) call option in respect of 51.6 million litres of diesel,
settled monthly, to protect against adverse energy price movements.

At present the group does not hedge its exposure to gold price ﬂuctuation risk and sells at market spot prices (refer Accounting
Policies).

Interest rate and liquidity risk
Fluctuations in interest rates impact on the value of short-term investment and ﬁnancing activities, giving rise to interest rate risk.

In the ordinary course of business, the group receives cash proceeds from its operations and is required to fund working capital
and capital expenditure requirements. The cash is managed to ensure surplus funds are invested to maximise returns whilst
ensuring that capital is safeguarded to the maximum extent possible by investing only with top ﬁnancial institutions.

The group entered into an interest rate swap in connection with the Mvela transaction. This position has subsequently been closed
out. Full details of the interest rate swaps are provided in note 33.

Uncommitted borrowing facilities are maintained with several banking counterparties to meet the group’s normal and contingency
funding requirements.

166

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33. Fair value of ﬁnancial instruments

The fair value of a ﬁnancial instrument is deﬁned as the amount at which the instrument could be exchanged in an arm’s length
transaction between willing parties. The estimated values of the group’s ﬁnancial instruments are:

30 June 2005

30 June 2004

R million

R million

Carrying

Fair

Carrying

Fair

amount

value

amount

value

Financial assets
Cash and cash equivalents

3,375.0

4,134.5

Investment in associate

18.8

2.5

Current portion of ﬁnancial instruments

313.8

233.5

Accounts receivable

779.5

700.9

Non-current portion of ﬁnancial instruments

217.4

442.6

Environmental trust fund

389.0

331.4

Investments

974.0

798.7

Financial liabilities
Accounts payable

1,699.3

1,756.6

Current portion of long-term liabilities

287.5

206.7

Long-term liabilities

1,176.0

1,241.0

1,428.6

30 June 2005

30 June 2004

US$ million

US$ million

Carrying

Fair

Carrying

Fair

amount

value

amount

value

Financial assets
Cash and cash equivalents

503.7

656.3

Investment in associate

2.8

0.4

Non-current portion of ﬁnancial instruments

46.8

37.0

Accounts receivable

116.3

111.3

Long-term portion of ﬁnancial instruments

32.4

70.3

Environmental trust fund

58.1

52.6

Investments

145.4

126.8

Financial liabilities
Accounts payable

253.6

278.9

Current portion of long-term liabilities

42.9

32.8

Long-term liabilities

175.5

185.2

226.8

The following methods and assumptions were used to estimate the fair value of each class of ﬁnancial instrument.

Accounts receivable, accounts payable and cash and cash equivalents
The carrying amounts approximate fair values due to the short maturity of these instruments.

Investments, environmental trust fund and long and short-term liabilities
The fair value of publically traded instruments is based on quoted market values. The environmental trust fund is stated at fair
value based on the nature of the fund’s investments. Refer to note 20, for a discussion on the fair value of long and short-term
liabilities.

Financial instruments
A discussion on the fair value of currency ﬁnancial instruments and the interest rate swap continues in note 33.

Notes

to financial statements (continued)

for the year ended 30 June 2005

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Gold Fields Limited Annual Report 2005

167

33. Fair value of ﬁnancial instruments (continued)

Currency ﬁnancial instruments
Currency ﬁnancial instruments remaining at year-end are described in the schedule below. It has been decided not to account for
these instruments under the hedge accounting rules of International Accounting Standard 39 and accordingly the positions have
been marked-to-market through earnings.

Year ended 30 June

2006

2007

Total

Australian dollar/US dollar

Call options:
Amount (US dollars) – 000s

100,000

75,000

175,000

Average strike price (US$/A$)

0.7670

The marked-to-market value of the positions in the above table was a gain of R27.5 million (US$4.1 million) at 30 June 2005. The
value was based on exchange rates of R/US$6.70 and US$/A$0.7684 and the prevailing interest rates and volatilities at the time.
This gain has been accounted for in the income statement as an unrealised gain on ﬁnancial instruments.

Year ended 30 June

2006

Total

US dollar/rand

Forward exchange contracts:
Amount (US dollars) – 000s

30,000

Average strike price (R/US$)

6.9402

The outstanding forward purchase of US$50 million at 30 June 2004, after utilising US$20 million, matured on 3 December
2004 resulting in a cash outﬂow of R24.5 million (US$4.2 million). This amount was extended to mature on 3 June 2005. On
maturity, the forward purchase of US$30.0 million was further extended to mature on 5 December 2005, resulting in a cash
inﬂow of R25.7 million (US$3.8 million). The mark-to-market value of the position in the above table was a loss of R4.1 million
(US$0.6 million) at 30 June 2005. The value was based on an exchange rate of R/US$6.70 and the prevailing interest rates and
volatilities at the time. This loss of R4.1 million has been accounted for in the income statement as an unrealised loss on ﬁnancial
instruments.

Year ended 30 June

2006

Total

International Petroleum Exchange (IPE) Gasoil options

Amount (litres) – 000s

51,600

Strike price (US$/litre)

0.4500

Gold Fields Ghana purchased a one year Asian style (average monthly price) call option in respect of 51.6 million litres of diesel,
settled monthly, to protect against adverse energy price movements. The call option resulted in a premium of R11.1 million
(US$1.66 million), paid upfront, at a strike of US$0.45 per litre.

The marked to market value of the transactions making up the position above was a gain R12.9 million (US$1.93 million). The
value was based on an exchange rate of R/US$6.70, an IPE Gasoil price of US$0.4498 and on prevailing interest rates and
volatilities at the time.

168

Gold Fields Limited Annual Report 2005

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33. Fair value of ﬁnancial instruments (continued)

Interest rate swap
In terms of the Mvela loan, GFI Mining South Africa (Pty) Limited (“GFIMSA”) pays Mvelaphanda Gold (Pty) Limited interest on
the R4,139 million loan at a ﬁxed rate, semi-annually. The interest rate was ﬁxed with reference to the ﬁve year ZAR swap rate,
at 9.6179% plus a margin of 0.95%. GFIMSA simultaneously entered into an interest rate swap agreement converting the ﬁxed
interest rate exposure to a ﬂoating rate. In terms of the swap, GFIMSA was exposed to the three month JIBAR rate plus a margin
of 1.025%. The interest rate swap was effected to take advantage of the relatively steep yield curve. This swap was closed on
3 June 2005. The loan now reverts to the ﬁxed interest rates.

Since inception of this swap up until its close out, Gold Fields has realised mark to market gains on the swap of R225 million and
the interest rate credits of R92 million, giving a total realised gain of R317 million. Of the R225 million realised mark to market
gain, R306 million was accounted for in earnings in ﬁscal 2005, offset by a R81 million loss in ﬁscal 2004. Of the R92 million
interest credit, R80 million was accounted for in earnings in ﬁscal 2005 compared to a R12 million credit in ﬁscal 2004.

34. Related party transactions

None of the directors, ofﬁcers or major shareholders of Gold Fields or, to the knowledge of Gold Fields, their families, had any
interest, direct or indirect, in any transaction during the last two ﬁscal years or in any proposed transaction which has affected or
will materially affect Gold Fields or its investment interests or subsidiaries, other than as stated below.

Mvelaphanda transaction

On 8 March 2004, shareholders of both Gold Fields Limited (“Gold Fields”) and Mvelaphanda Resources Limited (“Mvela
Resources”) voted decisively in favour of all shareholder resolutions necessary to implement the transaction in terms of which
Mvelaphanda Gold (Proprietary) Limited (“Mvela Gold”), a wholly owned subsidiary of Mvela Resources, will acquire a 15 per cent
beneﬁcial interest in the South African gold mining assets of Gold Fields, including the world-class Beatrix, Driefontein and Kloof
mines for a cash consideration of R4,139 million. All conditions precedent to the transaction were fulﬁlled following the completion
by Mvela Resources of a domestic and international private placement on 15 March 2004.

In terms of the right of exchange, Mvela Gold and Gold Fields have the right to require the exchange of the GFIMSA shares in
return for the issue to Mvela Gold of new ordinary shares in Gold Fields. The minimum and maximum number of Gold Fields shares
that will be issued by Gold Fields following the exercise of the right of exchange is 45 million and 55 million respectively.

Following completion of the private placement Mvela Gold advanced a loan of R4,139 million (“the GFI-SA Loan”) to GFI Mining
South Africa (Pty) Limited (“GFI-SA”), a wholly owned subsidiary of Gold Fields, on 17 March 2004. This loan was ﬁnanced by
way of commercial bank debt of approximately R1,349 million, mezzanine ﬁnance of R1,100 million (which includes R200 million
of redeemable preference shares in Micawber 325 (Pty) Limited subscribed for by Gold Fields) and the balance of approximately
R1,690 million raised by the Mvela Resources private placement, (which includes R100 million of equity in Mvelaphanda Resources
Limited subscribed for by Gold Fields as part of the above private placement). At the end of ﬁve years, the GFI-SA loan will be
repaid and Mvela Gold will subscribe for 15 per cent of the share capital of GFI-SA.

The proceeds of the GFI-SA Loan have been applied towards settling R4.1 billion of the R4.7 billion payable by GFI-SA to
Beatrix Mining Ventures Limited, Driefontein Consolidated (Pty) Limited and Kloof Gold Mining Company Limited following
implementation of the internal reorganisation pursuant to which GFI-SA has acquired the gold mining assets of these companies
as well as ancillary assets.

Gold Fields believes that this transaction satisﬁes the 15 per cent Historically Disadvantaged South African ownership
requirements of the scorecard attached to the Broad Based Socio-Economic Mining Scorecard for the South African mining
industry and looks forward, following implementation of this landmark BEE transaction, to working with Mvela Resources to
satisfy the other requirements of the scorecard.

In terms of the transaction, and in furthering its empowerment objectives, Mvela Gold appointed two nominees out of a
maximum of seven to the GFI-SA board, and has appointed two members to each of GFI-SA’s Operations Committee and
Transformation Committee, which latter committee will be established to monitor compliance with the Mining Charter and other
transformation objectives.

Notes

to financial statements (continued)

For the year ended 30 June 2005

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

169

34. Related party transactions

Pro-Drilling and Mining (Pty) Limited

Michael J. Prinsloo, Executive Vice President, South African Operations sits on the board of and owns 50% of Pro-Drilling and
Mining (Pty) Limited, or Pro-Drilling, a privately held drilling company. Pro-Drilling has a contract with GFI Mining South Africa
(Pty) Limited to provide labour, equipment and materials for diamond drilling and core recovery at the Driefontein operation.
The contract is valid until terminated upon one month’s written notice by either party. Gold Fields employed Pro-Drilling
prior to Mr Prinsloo joining Gold Fields. During ﬁscal 2005 Gold Fields paid Pro-Drilling a total of approximately R11.0 million
(2004: R2.0 million).

Mvelaphanda Resources Limited

Tokyo M.G. Sexwale and Bernard R. van Rooyen, non-executive directors of Gold Fields, are, respectively, the Chairman of the
Board and a director of Mvelaphanda Resources Limited, or Mvela Resources. On 10 July 2002, Gold Fields announced that it
had granted Mvela Resources participation rights of a minimum of 5% and a maximum of 15% in any new Gold Fields’ precious
metals exploration projects in Africa, beginning 1 March 2002. In consideration for the transaction Mvela Resources will issue to
Gold Fields options to subscribe in tranches for ordinary shares, consisting of one ordinary share and one unsecured debenture
issued by Mvela Resources, in Mvela Resources at a 10% premium to the ﬁve day weighted average trading price on the JSE
Securities Exchange South Africa.

Mvela Resources initially issued Gold Fields options to subscribe for ordinary shares with a value of R10.0 million. Thereafter,
each year Mvela Resources will issue to Gold Fields options to subscribe for ordinary shares with a value equal to half of the
amount spent by Gold Fields on the precious metals exploration projects covered by the agreement between the parties during
that year. In 2005 Gold Fields was issued with 1,375,584 options (2004: 521,812).

The term of the agreement is ﬁve years. This transaction was approved by Mvela Resources shareholders on 21 August 2002.
In addition Mvela Resources will be obligated to pay for its proportional share of the costs of any exploration project it elects to
participate in.

Rand Reﬁnery Limited

GFL Mining Services Limited has an agreement with Rand Reﬁnery Limited, (“Rand Reﬁnery”), in which Gold Fields holds a
33.1% interest, providing for the reﬁning of substantially all of Gold Fields’ South African gold production by Rand Reﬁnery.
On 21 November 2000, GFL Mining Services Limited (“GFLMS”) entered into an agreement with Rand Reﬁnery in terms of
which GFLMS acts as agent for Rand Reﬁnery with regard to the sale of a maximum of 50% of Gold Fields’ South African gold
production. On 1 June 2004, GFLMS has exercised its right, by giving notice to Rand Reﬁnery, to sell all of Gold Fields’ South
African gold production with effect from 1 October 2004. Gold Fields Ghana Limited and Abosso Goldﬁelds Limited also have
an agreement with Rand Reﬁnery since March 2002 to transport, reﬁne and sell substantially all of the gold production from the
Tarkwa and Damang mines.

Nicholas J. Holland, who is the Chief Financial Ofﬁcer and a Director of Gold Fields, has been a director of Rand Reﬁnery since
12 July 2000. As a director of GFL Mining Services Limited, which is a wholly owned subsidiary of Gold Fields, Mr Holland
has declared his interest in the contract between Rand Reﬁnery and GFL Mining Services Limited, pursuant to South African
requirements, and has not participated in the decision of Rand Reﬁnery to enter into the agreement with either of GFL Mining
Services Limited, Gold Fields Ghana Limited or Abosso Goldﬁelds Limited. Mr Holland signed the agreement with Rand Reﬁnery
on behalf of GFL Mining Services Limited.

Gold Fields believes that the above transactions with related parties have been conducted on terms at least as favourable to it as
arm’s length terms.

None of the directors or ofﬁcers of Gold Fields or any associate of such director or ofﬁcer is currently or has been at any time
during the past two ﬁscal years materially indebted to Gold Fields.

35. Segment reporting

The segment information is shown under the ﬁnancial summary in the segment report on page 178.

Figures in millions unless otherwise stated

170

Gold Fields Limited Annual Report 2005

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Company income statement

For the year ended 30 June 2005

South African Rand

Notes

2005

2004

Investment income

—

4 ,101.0

Other (expense)/income

(1.7)

3.5

Proﬁt on sale of investments

—

52.8

Harmony hostile bid costs

(315.5)

—

Write-down of investments

—

(2,802.0)

Proﬁt before taxation

(317.2)

1,355.3

Taxation

(17.9)

(8.2)

Net (loss)/earnings

(335.1)

1,347.1

The accompanying notes form an integral part of these ﬁnancial statements

Figures in millions unless otherwise stated

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

171

Company balance sheet

at 30 June 2005

South African Rand

Notes

2005

2004

ASSETS
Non-current asset

Investments

9,809.4

10,465.2

Current asset

Accounts receivable

1.6

2.2

Total assets

9,811.0

10,467.4

EQUITY AND LIABILITIES
Capital and reserves

Shareholders’ equity per statement

9,801.1

10,458.5

Current liabilities

9.9

8.9

Accounts payable

4.8

2.5

Taxation

5.1

6.4

Total equity and liabilities

9,811.0

10,467.4

The accompanying notes form an integral part of these ﬁnancial statements

Figures in millions unless otherwise stated

172

Gold Fields Limited Annual Report 2005

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Company statement of changes in shareholders’ equity

For the year ended 30 June 2005

Number of

ordinary

shares issued

Ordinary

capital

premium

Fair value

adjustment

reserve

(Accumu-
lated loss)/

Retained

earnings

Total

shareholders’

equity

South African Rand
Balance at 30 June 2003

472,364,872

236.2

8,034.4

56.4

(66.8)

8,260.2

Net income

—

1,347.1

Dividends

—

(669.1)

Exercise of employee share options

1,300,977

0.6

25.6

—

26.2

Proceeds from US capital raising

17,250,000

8.6

1,480.5

—

1,489.1

Shares issued relating to the acquisition of APP

564,841

0.3

60.1

—

60.4

Realised gain on disposal of listed investments

—

(56.3)

—

(56.3)

Other

11,830

—

0.9

—

0.9

Balance at 30 June 2004

491,492,520

245.7

9,601.5

0.1

611.2

10,458.5

Net loss

—

(335.1)

Dividends

—

(344.5)

Exercise of employee share options

801,706

0.4

21.7

—

22.1

Mark-to-market gain on listed investments

—

0.1

—

0.1

Balance at 30 June 2005

492,294,226

246.1

9,623.2

0.2

(68.4)

9,801.1

The accompanying notes form an integral part of these ﬁnancial statements

Figures in millions unless otherwise stated

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Gold Fields Limited Annual Report 2005

173

Company cash

flow statement

For the year ended 30 June 2005

Cash ﬂows from operating activities

(678.0)

3,459.7

Cash (utilised in)/generated by operations

(317.2)

3.5

Investment income

—

4,101.0

Change in working capital

2.9

24.3

Cash (utilised in)/generated by operating activities

(314.3)

4,128.8

Tax paid

(19.2)

—

Net cash (utilised in)/generated by operations

(333.5)

4,128.8

Dividends paid

(344.5)

(669.1)

Cash ﬂows from investing activities

—

143.2

Proceeds on sale of investments

—

143.2

Cash ﬂows from ﬁnancing activities

678.0

(3,602.9)

Long-term loans received/(advanced)

655.9

(5,119.1)

Shares issued

22.1

1,516.2

Net cash outﬂow

—

Cash and cash equivalents at beginning of the year

—

Cash and cash equivalents at end of the year

—

The accompanying notes form an integral part of these ﬁnancial statements

South African Rand

Notes

2005

2004

Figures in millions unless otherwise stated

174

Gold Fields Limited Annual Report 2005

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Company notes to financial statements

For the year ended 30 June 2005

South African Rand

Notes

2005

2004

Investment income
Dividends received – unlisted subsidiaries

—

4,101.0

Total investment income

—

4,101.0

Taxation
South African taxation
– company tax

(3.2)

(8.2)

– prior year adjustment – current tax

(14.7)

—

– company tax

(17.9)

(8.2)

Dividends
2004 Final dividend of 40 cents per share (2003: 100 cents) declared on 13 August 2004
and paid on 23 August 2004.

196.8

472.4

2005 Interim dividend of 30 cents per share (2004: 40 cents) declared on 18 February 2005
and paid on 28 February 2005.

147.7

196.7

Total dividends

344.5

669.1

Investments
Listed
Cost

0.3

0.3

Net unrealised gain on revaluation

0.2

0.1

Book value

0.5

0.4

Market value

0.5

0.4

Unlisted
Book value

8,269.7

8,269.7

Total listed and unlisted investments

8,270.2

8,270.1

Loans

1,539.2

2,195.1

Total investments

9,809.4

10,465.2

Details of major investments are given on pages 176 and 177.

Cash (utilised in)/generated by operations
Net (loss)/earnings

(335.1)

1,347.1

Taxation

17.9

8.2

Investment income
– Dividends received

—

(4,101.0)

Loss before tax and investment income

(317.2)

(2,745.7)

Non-cash items:
Proﬁt on disposal of investments

—

(52.8)

Write-down of investments

—

2,802.0

Total cash (utilised in)/generated by operations

(317.2)

3.5

Figures in millions unless otherwise stated

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

175

South African Rand

Notes

2005

2004

6. Change in working capital

Accounts receivable

0.6

25.5

Accounts payable

2.3

(1.2)

Total change in working capital

2.9

24.3

7. Tax paid

Amount (owing)/due at beginning of the year

(6.4)

1.8

SA current taxation

(17.9)

(8.2)

Amount owing at end of the year

5.1

6.4

Total tax paid

(19.2)

—

8. Dividends paid

Dividends per statement of shareholders’ equity

(344.5)

(669.1)

Total dividends paid

(344.5)

(669.1)

176

Gold Fields Limited Annual Report 2005

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Major group

investments – direct and indirect

Group

Book value in holding company

Shares held

beneﬁcial interest

Loans

2005

2004

2005

2004

2005

2004

2005

2004

Notes

per cent

per cent

R m

R m

R m

R m

Principal subsidiaries

Unlisted

Abosso Goldﬁelds Limited

- Class”A” shares

38,394,000 38,394,000

71.1

71.1

—

- Class “B” shares

4,266,000

4,266,000

71.1

71.1

—

Agnew Gold Mining Company (Pty)

Limited

54,924,757 54,924,757

100

100

—

Beatrix Mines Limited

96,549,020 96,549,020

100

100

206.8

206.8

—

Beatrix Mining Ventures Limited

9,625,001

9,625,001

100

100

120.4

120.4

(136.8)

(136.8)

Driefontein Consolidated (Pty) Limited

1,000

1,000

100

100

—

(13.1)

(13.1)

GFL Mining Services Limited

235,676,386 235,676,386

100

100

7,331.7

7,331.7

2,307.3

2,963.2

Gold Fields Guernsey Limited

4,020

4,012

100

100

—

Gold Fields Ghana Limited

711

711

71.1

71.1

—

GFI Mining South Africa (Pty) Limited

850

850

100

100

—

Kloof Gold Mining Company Limited

138,600,000 138,600,000

100

100

602.8

602.8

(610.2)

(610.2)

Orogen Holdings (BVI) Limited

164

150

100

100

—

Oryx Gold Holdings Limited

244,311,285 244,311,285

100

100

—

St Ives Gold Mining Company(Pty)Limited 5

281,051,039 212,497,547

100

100

—

Total

8,261.7

8,261.7

1,547.2

2,203.1

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

177

Group

Shares held

beneﬁcial interest

2005

2004

2005

2004

Notes

per cent

per cent

Other investments
Listed
African Eagle Resources plc

3,678,703

6,903,703

3.5

9.0

Avoca Resources Limited

17,349,861

7,500,000

14.8

8.8

Bolivar Gold Corporation
- shares

12,344,444 12,344,444

11.2

13.8

- warrants

6,172,222

6,172,222

n/a

n/a

CMQ Resources Inc.

5,000,000

5,000,000

9.7

9.7

Comaplex Minerals Corporation

7,628,571

—

19.8

n/a

Committee Bay Resources Limited

1,333,333

1,333,333

4.5

5.1

Medoro Resources

12,692,307

—

10.2

n/a

Mvelaphanda Resources Limited
- shares

4,350,000 4,350,000

2.6

2.6

- options

2,650,933

1,275,349

n/a

n/a

Radius Gold Inc.

3,631,124

4,883,524

6.8

9.7

Sino Gold Limited
- shares

10,800,000 10,800,000

8.4

8.4

- options

1,350,000

1,350,000

n/a

n/a

Sub Nigel Gold Mining

12,500,000

12,500,00

17.0

18.7

TLC Ventures Corporation

1,775,000

1,775,000

9.1

9.3

Western Areas Gold Mining
Company Limited

4,212,137

4,212,137

4.0

4.0

Zijin Mining Group Company Limited

— 18,000,000

n/a

2.3

Notes
1 - Incorporated in the Republic of South Africa

4 - Incorporated in the British Virgin Islands

2 - Incorporated in Guernsey

5 - Incorporated in Australia

3 - Incorporated in Ghana

The interest of Gold Fields Limited in the aggregate amount of the after-taxation proﬁts of its subsidiaries is R514.8 million (2004: R719.5 million)

Note: Only major investments are listed individually.

178

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Segment

report

Financial summary –rand million

South Africa

Ghana

Australia

Group

St Ives/ Corporate

Consoli-

Driefontein

Kloof

Beatrix

Tarkwa

Damang

Agnew and other

dation

Income statement for the year
ended 30 June 2005
Revenue

3,041.1

2,710.0

1,642.7

1,785.4

647.9

1,929.2

—

11,756.3

Operating costs

2,486.3

2,543.3

1,630.7

990.5

412.1

1,439.1

—

9,502.0

Gold inventory change

—

(7.6)

14.6

(38.4)

—

(31.4)

Operating proﬁt

554.8

166.7

12.0

802.5

221.2

528.5

—

2,285.7

Amortisation and depreciation

245.5

343.9

87.6

236.0

35.7

459.7

103.7

1,512.1

Net operating proﬁt

309.3

(177.2)

(75.6)

566.5

188.5

185.5

(103.7)

773.6

Other income/(expenditure)

31.6

32.4

(8.6)

14.4

5.6

33.2

82.2

190.8

Normal taxation

(39.6)

—

36.8

(64.1)

(55.4)

(48.4)

(91.4)

(262.1)

Deferred taxation

1.6

97.1

(43.3)

(88.6)

(19.0)

172.7

40.1

160.6

Impairment of assets

(12.3)

(11.4)

(60.0)

—

(60.9)

(116.3)

(260.9)

Exceptional items

(0.9)

(1.2)

1.6

(0.7)

—

(14.3)

(278.3)

(293.8)

Proﬁt/(loss) after taxation

289.7

(60.3)

(149.1)

427.5

116.7

151.1

(467.4)

308.2

Minority shareholders’ interest

—

(123.5)

(33.7)

—

28.7

(128.5)

Net earnings/(loss)

289.7

(60.3)

(149.1)

304.0

83.0

151.1

(438.7)

179.7

Balance sheet as at 30 June 2005
Total assets

3,294.7

3,064.4

1,158.2

2,082.2

509.8

4,070.2

9,817.9

23,997.4

Total liabilities (excluding deferred
taxation and outside shareholders)

935.2

1,145.1

748.5

245.6

107.1

564.6

467.4

4,213.5

– deferred taxation

1,074.2

920.8

(175.7)

508.5

21.8

248.6

651.6

3,249.8

Capital expenditure

184.1

230.1

221.4

469.6

65.9

842.2

150.5

2,163.8

The above is a geographical analysis presented by location of assets

Income statement for the year
ended 30 June 2004
Revenue

3,038.6

2,766.7

1,665.7

1,470.8

827.9

2,003.1

—

11,772.8

Operating costs

2,558.5

2,538.0

1,586.1

873.6

460.0

1,394.6

—

9,410.8

Gold inventory change

—

(0.2)

1.5

45.6

—

46.9

Operating proﬁt

480.1

228.7

79.6

597.4

366.4

562.9

—

2,315.1

Amortisation and depreciation

233.0

248.3

84.6

100.9

56.0

414.5

99.0

1,236.3

Net operating proﬁt

247.1

(19.6)

(5.0)

496.5

310.4

148.4

(99.0)

1,078.8

Other income/(expenditure)

(73.2)

(58.8)

(59.5)

5.4

(0.1)

299.2

(38.1)

74.9

Normal taxation

(14.3)

(4.8)

(4.9)

(55.7)

(32.2)

(49.2)

(45.5)

(206.6)

Deferred taxation

91.8

90.9

141.7

(147.0)

(38.5)

(97.4)

104.6

146.1

Impairment – Beatrix 4 shaft

—

(426.2)

—

(426.2)

Exceptional items

185.3

(1.9)

0.1

—

3.5

63.5

250.5

Proﬁt/(loss) after taxation

436.7

5.8

(353.8)

299.2

239.6

304.5

(14.5)

917.5

Minority shareholders’ interest

—

(86.5)

(69.2)

—

5.8

(149.9)

Net earnings/(loss)

436.7

5.8

(353.8)

212.7

170.4

304.5

(8.7)

767.6

Balance sheet as at 30 June 2004
Total assets

3,165.0

3,274.4

1,308.0

1,543.7

497.5

3,167.5

10,246.9

23,203.0

Total liabilities (excluding deferred
taxation and outside shareholders)

1,093.5

1,197.7

792.6

227.7

99.0

521.5

322.7

4,254.7

– deferred taxation

1,075.9

1,018.0

(219.1)

388.3

1.2

376.3

695.5

3,336.1

Capital expenditure

238.3

344.4

295.1

943.4

22.0

876.2

160.7

2,880.1

The above is a geographical analysis presented by location of assets

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

179

Segment

report

(continued)

Financial summary – US dollar million

South Africa

Ghana

Australia

Group

St Ives/ Corporate

Consoli-

Driefontein

Kloof

Beatrix

Tarkwa

Damang

Agnew and other

dation

Income statement for the year
ended 30 June 2005
Revenue

489.7

436.4

264.5

287.5

104.3

310.7

—

1,893.1

Operating costs

400.4

409.5

262.6

159.5

66.4

231.7

—

1,530.1

Gold inventory change

—

(1.2)

2.3

(6.2)

—

(5.1)

Operating proﬁt

89.3

26.9

1.9

129.2

35.6

85.2

—

368.1

Amortisation and depreciation

39.5

55.4

14.1

38.0

5.7

74.0

16.8

243.5

Net operating proﬁt

49.8

(28.5)

(12.2)

91.2

29.9

11.2

(16.8)

124.6

Other income/(expenditure)

5.1

5.2

(1.4)

2.3

0.9

5.3

13.2

30.6

Normal taxation

(6.4)

—

5.9

(10.3)

(8.9)

(7.8)

(14.7)

(42.2)

Deferred taxation

0.3

15.6

(7.0)

(14.3)

(3.1)

27.8

6.6

25.9

Impairment of assets

(2.0)

(1.8)

(9.7)

—

(9.8)

(18.7)

(42.0)

Exceptional items

(0.1)

(0.2)

0.3

(0.1)

—

(2.3)

(44.8)

(47.2)

Proﬁt/(loss) after taxation

46.7

(9.7)

(24.1)

68.8

18.8

24.4

(75.2)

49.7

Minority shareholders’ interest

—

(19.9)

(5.4)

—

4.6

(20.7)

Net earnings/(loss)

46.7

(9.7)

(24.1)

48.9

13.4

24.4

(70.6)

29.0

Balance sheet as at 30 June 2005
Total assets

485.0

457.4

172.9

310.8

76.1

607.5

1,472.1

3,581.8

Total liabilities (excluding deferred
taxation and outside shareholders)

139.6

170.9

111.7

36.7

16.0

84.3

69.8

629.0

– deferred taxation

160.3

137.4

(26.2)

75.9

3.3

37.1

97.2

485.0

Capital expenditure

29.6

37.1

35.7

75.6

10.6

135.6

24.2

348.4

The above is a geographical analysis presented by location of assets
US DOLLAR FIGURES MAY NOT ADD AS THEY ARE ROUNDED INDEPENDENTLY
Exchange rates applied: Average for the year: US$1 = R6.21 Rate at year end: US$1 = R6.70

Income statement for the year
ended 30 June 2004
Revenue

440.4

400.9

241.4

213.2

120.0

290.3

—

1,706.2

Operating costs

370.8

367.8

229.9

126.6

66.7

202.1

—

1,363.9

Gold inventory change

—

0.2

6.6

—

6.8

Operating proﬁt

69.6

33.1

11.5

86.6

53.1

81.6

—

335.5

Amortisation and depreciation

33.8

36.0

12.3

14.6

8.1

60.1

14.3

179.2

Net operating proﬁt

35.8

(2.9)

(0.8)

72.0

45.0

21.5

(14.3)

156.3

Other income/(expenditure)

(10.6)

(8.5)

(8.6)

0.8

—

43.4

(5.6)

10.9

Normal taxation

(2.1)

(0.7)

(8.1)

(4.7)

(7.1)

(6.5)

(29.9)

Deferred taxation

13.3

13.2

20.5

(21.3)

(5.6)

(14.1)

15.2

21.2

Impairment – Beatrix 4 shaft

—

(61.8)

—

(61.8)

Exceptional items

26.9

(0.3)

—

0.5

9.2

36.3

Proﬁt/(loss) after taxation

63.3

0.8

(51.4)

43.4

34.7

44.2

(2.0)

133.0

Minority shareholders’ interest

—

(12.5)

(10.0)

—

0.8

(21.7)

Net earnings/(loss)

63.3

0.8

(51.4)

30.9

24.7

44.2

(1.2)

111.3

Balance sheet as at 30 June 2004
Total assets

502.4

519.7

207.6

245.0

79.0

502.8

1,626.6

3,683.1

Total liabilities (excluding deferred
taxation and outside shareholders)

173.6

190.1

125.8

36.1

15.7

82.8

51.4

675.5

– deferred taxation

170.8

161.6

(34.8)

61.6

0.2

59.7

110.4

529.5

Capital expenditure

34.5

49.9

42.8

136.7

3.2

127.0

23.3

417.4

180

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Operating

and financial information by mine

South African operations

Driefontein

Tons

Yield*

Gold produced

Cash cost

Net earnings

Year to 30 June

Milled

g/ton

Kilograms

000’ounces

US$/oz SA Rand Mil.

US$ Mil.

1952-2000

182,757,000

16.2

2,957,488

95,086

n/a

2001

6,551,000

6.4

42,031

1,351

184

413.0

54.3

2002

6,587,000

6.3

41,263

1,327

158

877.5

87.2

2003

6,370,000

6.0

38,516

1,238

202

725.4

80.0

2004

6,438,000

5.5

35,494

1,141

311

436.7

63.3

2005

6,694,000

5.4

36,162

1,163

330

289.7

46.7

Total

†

215,397,000

14.6

3,150,954

101,306

*Combined surface undergound yield

†

Includes West Driefontein from 1952 and East Driefontein from 1972

Kloof

Tons

Yield*

Gold produced

Cash cost

Net earnings

Year to 30 June

Milled

g/ton

Kilogram

000’ounces

US$/oz SA Rand Mil.

US$ Mil.

1939-2000

219,861,900

9.1

2,009,013

64,591

n/a

2001

3,932,000

9.6

37,658

1,211

207

*222.5

29.2

2002

4,657,000

7.4

34,236

1,101

179

601.5

59.8

2003

4,838,000

7.3

35,464

1,140

215

600.7

66.2

2004

4,983,000

6.5

32,273

1,038

341

5.8

0.8

2005

4,655,000

6.9

32,258

1,037

379

(60.3)

(9.7)

Total

†

242,926,900

9.0

2,180,902

70,118

*Combined surface undergound yield

†

Includes Venterspost from 1939, Libanon from 1949, Kloof from 1968 and Leeudoorn from 1991

Includes impairment write-down of R73 million (US$9.6 million).

Beatrix (includes Oryx as from F2000)

Tons

Yield*

Gold produced

Cash cost

Net earnings

Year to 30 June

Milled

g/ton

Kilogram

000’ounces

US$/oz SA Rand Mil.

US$ Mil.

1985-2000

35,027,000

6.0

211,681

6,806

n/a

2001

3,671,000

5.5

20,126

647

207

(1,432.5)

(188.2)

2002

4,115,000

4.9

20,367

655

173

697.7

69.4

2003

4,722,000

4.3

20,488

659

229

257.4

28.4

2004

5,448,000

3.6

19,437

625

356

**(353.8)

**(51.3)

2005

4,181,000

4.6

19,418

624

406

†

(149.1)

†

(24.0)

Total

57,164,000

5.4

311,517

10.016

Beatrix and Oryx became one tax entity as from F2000.
*Combined surface underground yield.

Includes impairment write-down of R1,558 million (US$205 million).

†

Includes impairment write-down of R60 million (US$10 million).

Oryx Mine (changed name to Beatrix 4 shaft, known as West shaft from F2005)

Tons

Yield*

Gold produced

Cash cost

Net earnings

Year to 30 June

Milled

g/ton

Kilogram

000’ounces

US$/oz SA Rand Mil.

US$ Mil.

1985-1994

2,995,000

1.5

4,421

142

n/a

1995

105,000

2.0

212

n/a

1996

4,000

2.3

—

n/a

0.9

0.2

1997

573,000

3.2

1,808

n/a

36.2

8.0

1998

908,000

5.4

4,934

159

n/a

34.5

7.1

1999

1,071,000

6.3

6,798

219

n/a

(839.6)

(138.8)

1985-1999

5,656,000

3.2

18,182

585

n/a

(768.0)

(123.5)

Included in Beatrix from F2000.
*Combined surface underground yield.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

181

International operations

Ghana
Tarkwa

Net earnings

Tons

Yield

Gold produced

Cash cost

(excluding minorities)

Year to 30 June

Milled

g/ton

Kilograms

000’ounces

US$/oz SA Rand Mil.

US$ Mil.

1994-2000

14,188,559

1.6

22,996

739

n/a

2001

11,667,000

1.2

13,680

440

155

232.0

30.5

2002

14,914,000

1.1

16,920

544

171

338.2

33.6

2003

15,210,000

1.1

16,792

540

194

313.6

34.6

2004

16,000,000

1.1

17,107

550

230

299.2

43.4

2005

19,633,000

1.1

21,051

677

234

427.5

68.8

Total

91,612,559

1.2

108,546

3,490

Surface operation from F1999

Damang

Tons

Yield

Gold produced

Cash cost

Net earnings

Year to 30 June

Milled

g/ton

Kilograms

000’ounces

US$/oz SA Rand Mil.

US$ Mil.

2002

1,951,000

2.3

4,397

141

200

90.4

8.3

2003

4,877,000

1.9

9,305

299

243

129.1

14.2

2004

5,236,000

1.8

9,589

308

222

239.6

34.7

2005

5,215,000

1.5

7,703

248

282

116.7

18.8

Total

17,279,000

1.8

30,994

996

For the 5 months ended 30 June, since acquisition

Australia
St Ives

Yield

Gold produced

Cash cost

Year to 30 June

Tons treated

g/ton

kilograms

000’ ounces

US$/oz

A$/oz

2002

3,398,000

3.1

10,602

341

160

302

2003

5,486,000

2.9

15,966

513

188

323

2004

6,744,000

2.5

16,877

543

297

416

2005

6,332,000

2.6

16,393

527

336

447

Total

21,960,000

2.7

59,838

1,924

For the 7 months ended 30 June, since acquisition

Agnew

Yield

Gold produced

Cash cost

Year to 30 June

Tons treated

g/ton

kilograms

000’ ounces

US$/oz

A$/oz

2002

682,000

3.8

2,569

232

434

2003

1,268,000

3.5

4,466

144

255

437

2004

1,179,000

5.3

6,267

201

226

317

2005

1,170,000

5.6

6,609

212

233

310

Total

4,299,000

4.6

19,911

640

For the 7 months ended 30 June, since acquisition

St Ives/Agnew

Net earnings

Year to 30 June

SA Rand Mil.

US$ Mil.

A$ Mil.

2002

556.6

50.2

94.7

2003

567.3

62.5

107.2

2004

304.5

44.1

61.9

2005

151.1

24.3

32.4

For the 7 months ended 30 June, since acquisition

182

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Shareholders’

information

Analysis of shareholders’ information at 30 June 2005

Number of

% of total

Number of

% of shares

Size of holding

shareholders

shares

issued

1 – 10 000

18,952

96.95

10,421,259

2.12

10 001 – 100 000

440

2.25

13,946,638

2.83

100 001 – 1 000 000

115

0.59

29,533,446

6.00

1 000 001 +

0.21

438,392,883

89.05

Total

19,548

100.00

492,294,226

100.00

Diary

Financial year-end

30 June

Annual general meeting

15 November 2005

Quarterly reports

January, May, August, October

Interim dividend paid

28 February 2005

Final dividend paid

29 August 2005

Shareholder spread and beneﬁcial ownership as at 30 June 2005

To the best knowledge of the directors and after reasonable enquiry, the spread of shareholders and those shareholders

beneﬁcially holding, directly or indirectly, in excess of 3 per cent of the issued shares was as follows:

Number of shares

Percentage holding

OJSC MMC Norilsk Nickel

98,467,758

20.0

Harmony Gold Mining Company Limited

26,591,018

5.4

Capital research and management

24,225,873

4.9

Old Mutual Asset Managers

22,590,258

4.6

Merrill Lynch Investment Managers

17,915,150

3.6

RMB Asset Management

17,309,330

3.5

Sanlam Investment Management

17,055,267

3.5

Other shareholders

267,727,586

54.4

Directors

411,986

0.1

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

183

Global

reporting initiative

Indicator

Page

reference

Economic
EC1. Net sales

100

EC3. Cost of all materials purchased

100 and 102

EC5. Total payroll and benefits

100

EC6. Distributions to providers of capital

102 and 148

EC7. Increase/decrease in retained earnings

148

EC8. Total sum of taxes paid broken down by country

100

EC10. Community donations

100

EC18. Indirect economic impacts

101

Environmental
EN1. Total materials use

EN3. Direct energy use

EN5. Total water use

EN8. Greenhouse gas emissions

EN10. NO

and other air emissions

EN11. Total amount of waste by type and destinatiion

EN13. Significant spills

EN16. Incidents of fines of non-compliance

none recorded

Social
LA1. Breakdown of workforce

100

LA3. Employees represented by independent labour unions and associations

LA4. Consultation policy/procedures

LA5. Recording occupational accidents and diseases

LA7. Lost day injuries and work related fatalities

LA8. Policies/programmes on HIV/Aids

LA10. Equal opportunity policies/programmes

LA11. Composition of senior management

LA12. Employee benefits

LA13. Formal worker representation

LA17. Programmes for skills management

SO1 Policies to manage impacts on communties

SO2 Compliance mechanisms addressing bribery and corruption

112

184

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Administration

and corporate information

Corporate Secretary

Cain Farrel
Telephone:

(+27)(11) 644 2525

Facsimile:

(+27)(11) 484 0626

e-mail:

cain.farrel@goldfields.co.za

Registered ofﬁces

Johannesburg

24 St Andrews Road
Parktown, 2193
Postnet Suite 252
Private Bag X30500
Houghton, 2041
South Africa
Telephone:

(+27)(11) 644 2400

Facsimile:

(+27)(11) 644 0626

London

St James’s Corporate Services Limited
6 St James’s Place
London SW1A 1NP
United Kingdom
Telephone:

(+44)(20) 7499 3916

Facsimile:

(+44)(20) 7491 1989

American Depository Receipts Transfer Agent

Bank of New York
Shareholder Relations
P O Box 11258
New York, NY20286 – 1258

US toll-free telephone: (1)(888) 269 2377
e-mail: shareowner-svcs@mail.bony.com

Gold Fields Limited

Incorporated in the Republic of South Africa
Registration number 1968/004880/06
Share code: GFI
Issuer code: GOGOF
ISIN – ZAE 000018123

Investor relations

South Africa
Willie Jacobsz
Telephone:

(+27)(11) 644 2460

Facsimile:

(+27)(11) 484 0639

e-mail:

williej@goldfields.co.za

Nerina Bodasing
Telephone:

(+27)(11) 644 2630

Facsimile:

(+27)(11) 484 0639

e-mail:

nerina.bodasing@goldfields.co.za

North America
Cheryl A Martin
Telephone:

(+1)(303) 796 8683

Facsimile:

(+1)(303) 796 8293

e-mail:

camartin@gfexpl.com

Transfer Secretaries

South Africa

Computershare Investor Services 2004 (Proprietary)
Limited
Ground Floor
70 Marshall Street
Johannesburg, 2001
P O Box 61051
Marshalltown, 2107
Telephone:

(+27)(11) 370 5000

Facsimile:

(+27)(11) 370 5271

United Kingdom

Capital Registrars
Bourne House
34 Beckenham Road
Beckenham
Kent BR3 4TU
England
Telephone:

(+44)(20) 8639 2000

Facsimile:

(+44)(20) 8658 3430

Website
http://www.goldfields.co.za
http://www.gold-fields.com

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

185

Glossary

of terms

ABET
Adult basic education and training

AS/NZ 4801
Refers to the international occupational health and safety management

Backﬁll
Material generally sourced from mine residues and utilised for the ﬁlling of mined voids, to ensure long-term stability of excavations and minimise the effects of seismic activity

BEE
Black Economic Empowerment. Black Economic Empowerment seeks to ensure that black persons within South Africa gain a signiﬁcant degree of control in the economy through the possession of equity stakes and the holding of management positions within an institution

Box hole
A short raise or opening drive above a drift for the pupose of drawing ore from a stope, or to permit access

Blasthole
A drill hole in a mine that is ﬁlled with explosives in order to blast loose a quantity of rock

Breast mining
A mining method whereby the direction of mining is in the direction of strike

Bulk mining
Any large-scale, mechanised method of mining involving many thousands of tonnes of ore being brought to surface each day

BVQI
Bureau Veritas Qualite International is a worldwide leading and independent certiﬁcation body to ISO 9000 and ISO 14000

Carbon-in-Leach
The recovery process in which gold is leached from gold ore pulp by cyanide and simultaneously adsorbed onto activated carbon granules in the same vessel. The loaded carbon is then separated from the pulp for subsequent gold removal by elution. The process is typically employed where there is a naturally occurring gold adsorbent in the ore

Decline
A surface or sub-surface excavation in the form of a tunnel which is developed from the uppermost point downwards

Depletion
An accounting device, recognising the consumption of an ore deposit, a mine’s principal asset

Development
Underground work carried out for the purpose of opening up a mineral deposit, includes shaft sinking, crosscutting, drifting and raising

Diamond drill
A rotary type of rock drill that cuts a core of rock that is recovered in long cylindrical sections

Dilution
Waste which is unavoidably mined with ore

Dip
Angle of inclination of a geological feature/rock from the horizontal

Drill-hole
Method of sampling rock that has not been exposed

Dyke
Thin, tabular, vertical or near vertical body of igneous rock formed by the injection of magma into planar zones of weakness

Elution
The chemical process of desorbing gold from activated carbon

Face
The end of a drift, crosscut or stope at which work is taking place

Facies
A rock unit deﬁned by its composition, internal geometry and formation environment

Fatality rate
Number of deaths per million man hours worked

Fault
The surface of a fracture along which movement has occurred

Carbon-in-Pulp
The recovery process in which gold is ﬁrst leached from gold ore pulp by cyanide and then adsorbed onto activated carbon granules in separate vessels. The loaded carbon is then separated from the pulp for subsequent gold removal by elution

Capital expenditure
Speciﬁc project or ongoing expenditure for replacement or additional equipment, materials or infrastructure

Cash costs
Namely direct mining costs, direct processing costs, direct general and administration costs, consulting fees, management fees, bullion transport and reﬁning charges

Channel
Watercourse, also in this sense sedimentary material course

Collective Bargaining Agreement
Collective Bargaining Agreement means a written agreement concerning terms and conditions of employment or any other matter of mutual interest concluded by a trade union(s) and the company

Comminution
The term used to describe the process by which ore is reduced in size in order to liberate the desired mineral from the gangue material in preparation for further processing

Concentrate
A metal-rich product resulting from a mineral enrichment process such as gravity concentration or ﬂotation, in which most of the desired mineral has been separated from the waste material in the ore

Conglomerate
Detrital sedimentary rock

Crosscut
A horizontal underground drive developed
perpendicular to the strike direction of the stratigraphy

Cut-off-grade
The grade of mineralised rock which determines as to whether or not it is economic to recover its gold content by further concentration

186

Gold Fields Limited Annual Report 2005

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Glossary

of terms

(continued)

Filtration
Process of separating usually valuable
solid material from a liquid

Flotation
The process by which the surface chemistry of
the desired mineral particles is chemically
modiﬁed such that they preferentially attach
themselves to bubbles and ﬂoat to the pulp
surface in specially designed machines.
The gangue or waste minerals are chemically
depressed and do not ﬂoat, thus
allowing the valuable minerals to be
concentrated and separated from the
undesired material

Footwall
The underlying side of an orebody or stope

Grade
The measure of concentration of gold within
mineralised rock

Hangingwall
The overlying side of an orebody or slope

Haulage
A horizontal underground excavation which
is used to transport mined ore

Head grade
The average grade of ore fed to a mill/plant

Hedging
Taking a buy or sell position in futures market
opposite to a position held in the cash/spot
market to minimise the risk of ﬁnancial
loss from an adverse price change

Hydrothermal
Process of injection of hot, aqueous, generally
mineral-rich solutions into existing rocks
or features

ICVCT
Informed Consented Voluntary Counselling and
Testing

Indicated Mineral Resource
That part of a Mineral Resource for which
tonnage,densities, shape, physical
characteristics, grade and mineral content can
be estimated with a reasonable
level of conﬁdence. It is based on exploration,
sampling and testing information gathered
through appropriate techniques from
locations such as outcrops, trenches, pits,
workings and drill-holes. The

from a well constrained and portrayed geological
model. Mineral Resources are sub-divided in order
of increasing conﬁdence, in respect of geoscientiﬁc
evidence, into Inferred, Indicated and Measured
categories

Mineral Reserve

The economically mineable material derived from
a Measured and/or Indicated Mineral Resource.
It is inclusive of diluting materials and allows for
losses that may occur when the material is mined.
Appropriate assessments, which may include
feasibility studies, have been carried out, including
consideration of and modiﬁcation by, realistically
assumed mining, metallurgical, economic, marketing,
legal, environmental, social and governmental
factors. These assessments demonstrate at the
time of reporting that extraction is reasonably
justiﬁed. Mineral Reserves are sub-divided in order of
increasing conﬁdence into Probable Mineral Reserves
and Proved Mineral Reserve

Mineralised
Rock in which minerals have been introduced to the
point of a potential ore deposit

Minerals Act
The Minerals Act 50 of 1999

Normal fault
Fault in which the hangingwall moves downward
relative to the footwall

Nugget effect
A measure of the randomness of the grade
distribution within a mineralised zone

NUM
National Union of Mine Workers

On-going capital
Capital estimates of a routine nature which are
necessary for sustaining operations such as
replacement or additional equipment, materials or
infrastructure

OHSAS
Management systems standards, developed in order
to facilitate the integration of quality, environmental
and occupational health and safety management
systems by organisations, should they wish to do so

locations are too widely or inappropriately
spaced to conﬁrm geological and/or grade
continuity but are spaced closely enough
for continuity to be assumed

Inferred Mineral Resource
That part of a Mineral Resource for which
tonnage,grade and mineral content can be
estimated with a low level of conﬁdence.
It is inferred from geological evidence and
assumed but not veriﬁed geological
and/or grade continuity. It is based on
information gathered through appropriate
techniques from locations such as outcrops,
trenches, pits, workings and drill-holes
which may be limited or of uncertain
quality and reliability

LDIFR
Number of lost day injuries expressed in
million man hours worked

Lock-up gold
Gold locked as a temporary inventory within a
processing plant, or sections thereof,
typically milling circuits

Measured Mineral Resource
That part of a mineral resource for which
tonnage,densities, shape, physical
characteristics, grade and mineral content
can be estimated with a high level of
conﬁdence. It is based on detailed and
reliable exploration, sampling and testing
information gathered through appropriate
techniques from locations such as outcrops,
trenches, pits, workings and drill-holes.
The locations are spaced closely
enough to conﬁrm geological and grade
continuity

Milling
A general term used to describe the process
in which the ore is crushed and ground
and subjected to physical or chemical
treatment to extract the valuable
metals to a concentrate or ﬁnished product

Mine Health and Safety Act
Mine Health and Safety Act No. 29 of 1996

Mineral Resource
A concentration [or occurrence] of material of
economic interest in or on the earth’s crust
in such form, quality and quantity that there
are reasonable and realistic prospects for
eventual economic extraction. The location,
quantity, grade, continuity and other
geological characteristics of a Mineral
Resource are known, estimated from speciﬁc
geological evidence and knowledge,
or interpreted

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Gold Fields Limited Annual Report 2005

187

Payshoot
Linear to sub-linear zone within a reef for which
gold grades or accumulations are
predominantly above the cut-off-grade

Pillar
Rock left behind to help support the
excavations in an underground mine

Probable Mineral Reserve
The economically mineable material derived
from a Measured and/or Indicated Mineral
Resource.
It is estimated with a lower level of conﬁdence
than a Proved Mineral Reserve. It is inclusive of
diluting materials and allows for losses that may
occur when the material is mined. Appropriate
assessments, which may include feasibility
studies,have been carried out and including
consideration of and modiﬁcation by,
realistically assumed mining, metallurgical,
economic, marketing, legal, environmental,
social and governmental factors.
These assessments demonstrate at the time of
reporting that extraction is reasonably justiﬁed

Project capital
Capital expenditure which is associated with
speciﬁc projects of a non-routine nature

Proved Mineral Reserve
The economically mineable material derived
from a Measured Mineral Resource. It is
estimated with a high level of conﬁdence.
It is inclusive of diluting materials and allows
for losses that may occur when the material
is mined. Appropriate assessments, which
may include feasibility studies, have been
carried out, including consideration of and
modiﬁcation by realistically assumed mining,
metallurgical, economic, marketing, legal,
environmental, social and governmental
factors. These assessments demonstrate
at the time of reporting that extraction is
reasonably justiﬁed

Reef
Gold bearing sedimentary horizon in the
Witwatersrand Basin

SADC
Southern African Development Community

SAMREC Code
South African Code for reporting of Mineral
Resources and Mineral Reserves

TEBA
The Employment Bureau of Africa

Trade Union
An association of employees: whose principal
purpose is to regulate relations between employees
and the company, which has been registered; whose
ofﬁcials have been elected to represent the interests
of employees within the workplace; and which is
recognised for collective bargaining by the company

Total cash costs
All total cash costs are based on public quoted
nominal production costs, include retrenchment
costs, rehabilitation costs, corporate costs,
by-product credits for silver, sundry revenues
and exclude amortisation costs and inventory changes

Vamping
A mining method used to recover higher grade ore
left in mined stopes

Feasibility study
A comprehensive study undertaken to determine the
economic feasibility of a project; the conclusion will
determine if a production decision can be made and is
used for ﬁnancing arrangements

Gold equivalent
Gold plus silver or another metal expressed in
equivalent ounces of gold using a conversion ratio
dependent on prevailing gold and silver prices

ISO 14000
International standards for organisations to implement
sound environments management systems

Stope
The working area from which ore is extracted in an
underground mine

Stripping
The process of removing overburden or waste rock
to expose ore

Stripping ratio
The ratio of the amount of waste rock removed per
tonne of ore mined

Seismic
Earthquake or earth vibration including those
artiﬁcially induced

Sequential Grid Mining
Mining method incorporating dip pillars and
mined on a grid system

Shaft
An opening cut downwards from the surface for
transporting personnel, equipment, supplies,
ore and waste

Shear
A deformation resulting from stresses that
cause contiguous parts of a body to slide
relative to each other in a direction parallel
to their plane of contact

SLFR
Shifts lost frequency rate. Number of accidents
where 14 days or more off work is lost and
expressed in million man hours worked

Stope
Underground void created by mining

Stratigraphy
The science of rock strata

Strike
Direction of line formed by the intersection of
strata surfaces with the horizontal plane, always
perpendicular to the dip direction

Sub-vertical shaft
An opening cut below the surface downwards
from an established surface shaft

Surface sources
Ore sources, usually dumps, tailings dams and
stockpiles, located at the surface

Tertiary shaft
An opening cut below the surface downwards
from an established sub-vertical shaft

The Base Case
The Base Case as established as part of the
|Financial Models

The Mine Health and Safety Act

The Mine Health and Safety Act No. 29 of 1996

188

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Abbreviations and units

ABET

Adult Basic Education and Training

ADS

American Depository Shares

CIL

Carbon-in-leach

CIP

Carbon-in-pulp

CIS

Carbon-in solution

DCF

Discounted Cash Flow

LoM plan

Life-of-Mine plan

LTIFR

Lost Time Injury Frequency Rate, quoted

in Mmhrs

NYSE

New York Stock Exchange

MCF

Mine Call Factor

PPI

Purchase Price Index

SAMREC

South African code for Reporting of

Mineral Resources and Mineral Reserves

SEC

United States Securities Exchange

Commission

TEC

Total Employees Costed

centimetre

grammes

g/t

grammes per metric tonne – gold

concentration

a hectare

a kilogram

a kilometre

koz

a thousand ounces

a thousand metric tonnes

ktpa

a thousand metric tonnes per annum

ktpm

a thousand tonnes per month

a square metre

Moz

a million ounces

a ﬁne troy ounce equalling 31.10348

grammes

a metric tonne

US$

United States dollar

US$m

million United States dollar

US$/oz

United States dollar per ounce

South African rand

R/kg

South African rand per kilogram

million South African rand

R/t

South African rand per metric tonne

Glossary

of terms (continued)

Gold Fields Limited

the complete gold company

G O L D F I E L D S L I M I T E D

N O T I C E O F A N N U A L G E N E R A L M E E T I N G

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Gold Fields Limited

(Registration No 1968/004880/06)
Share Code: GFI
Issuer Code: GOGOF
ISIN: ZAE000018123

Notice is hereby given that the annual general meeting of shareholders of Gold Fields Limited will be held at 24 St Andrews Road,
Parktown, Johannesburg, on Thursday, 17 November 2005 at 09:00, to consider and, if deemed ﬁt, to pass, with or without modiﬁcation,
the following ordinary and special resolutions in the manner required by the Companies Act, 61 of 1973, as amended, and subject to the
Listings Requirements of JSE Limited and other stock exchanges on which the company’s ordinary shares are listed.

ORDINARY RESOLUTION NUMBER 1

Adoption of ﬁnancial statements
“Resolved that the consolidated audited annual ﬁnancial statements of the company and its subsidiaries, incorporating the auditors’ and
directors’ reports for the year ended 30 June 2005 be received and adopted.”

ORDINARY RESOLUTION NUMBER 2

Re-election of director
“Resolved that Dr A Grigorian who was appointed to the board on 21 June 2005 and who retires in terms of the Articles of Association,
and who is eligible and available for re-election, is hereby re-elected as a director of the company.”

ORDINARY RESOLUTION NUMBER 3

Re-election of director
“Resolved that Mr S Stefanovich who was appointed to the board on 21 June 2005 and who retires in terms of the Articles of Association,
and who is eligible and available for re-election, is hereby re-elected as a director of the company.”

ORDINARY RESOLUTION NUMBER 4

Re-election of director
“Resolved that Mr J M McMahon who retires in terms of the Articles of Association, and who is eligible and available for re-election, is
hereby re-elected as a director of the company.”

ORDINARY RESOLUTION NUMBER 5

Re-election of director
“Resolved that Mr C I von Christierson who retires in terms of the Articles of Association, and who is eligible and available for re-election,
is hereby re-elected as a director of the company.”

ORDINARY RESOLUTION NUMBER 6

Re-election of director
“Resolved that Mr A J Wright who retires in terms of the Articles of Association, and who is eligible and available for re-election, is hereby
re-elected as a director of the company.”

ORDINARY RESOLUTION NUMBER 7

Placement of shares under the control of the directors
“Resolved that, the entire authorised but unissued ordinary share capital of the company from time to time (after setting aside so many
shares as may be required to be allotted and issued by the company in terms of any share plan or scheme for the beneﬁt of employees

Notice

of annual general meeting

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

and/or directors (whether executive or non-executive)) be and is hereby placed under the control of the directors of the company until the
next annual general meeting, on the basis that such directors be and are hereby authorised in terms of section 221(2) of the Companies
Act 61 of 1973, as amended (“Companies Act”), to allot and issue all or part thereof in their discretion, subject to the provisions of the
Companies Act and the Listings Requirements of JSE Limited.”

ORDINARY RESOLUTION NUMBER 8

Issuing shares for cash
“Resolved that, pursuant to the Articles of Association of the company, the directors of the company be and are hereby authorised until
the forthcoming annual general meeting of the company (whereupon this authority shall lapse unless it is renewed at the aforementioned
annual general meeting, provided that it shall not extend beyond 15 (ﬁfteen) months of the date of this meeting), to allot and issue
ordinary shares for cash subject to the Listings Requirements of JSE Limited (“JSE”) and subject to the Companies Act, 61 of 1973, as
amended on the following basis:
(a) the allotment and issue of ordinary shares for cash shall be made only to persons qualifying as public shareholders as deﬁned in the

Listings Requirements of JSE and not to related parties;

(b) the number of ordinary shares issued for cash from time to time shall not in the aggregate in any one ﬁnancial year of the company

exceed 10 per cent (ten per cent) of the company’s issued ordinary shares. The number of ordinary shares which may be issued
for cash shall be based on the number of ordinary shares in issue at the date of the application, less any ordinary shares issued by
the company during the current ﬁnancial year, provided that any ordinary shares to be issued for cash pursuant to a rights issue
(announced and irrevocable and underwritten) or acquisition (concluded up to the date of application) may be included as though they
were shares in issue at the date of application;

(c) the maximum discount at which ordinary shares may be issued for cash is 10 per cent (ten per cent) of the weighted average traded

price on the JSE of those ordinary shares over the 30 (thirty) days prior to the date that the price of the issue is determined or agreed
by the directors of the company;

(d) after the company has issued shares for cash which represent, on a cumulative basis within a ﬁnancial year, 5 per cent (ﬁve per cent)

or more of the number of shares in issue prior to that issue, the company shall publish an announcement containing full details of the
issue, including the effect of the issue on the net asset value and earnings per share of the company; and

(e) the equity securities which are the subject of the issue for cash are of a class already in issue.”

In terms of the listings requirements of the JSE, a 75% majority is required of votes cast by the shareholders present or represented by
proxy at the general meeting convened to approve the above resolution regarding the waiver of pre-emptive rights.

ORDINARY RESOLUTION NUMBER 9

Adoption of The Gold Fields Limited 2005 Share Plan
“Resolved that the deed embodying The Gold Fields Limited 2005 Share Plan, a copy of which has been signed by the Chairman for
identiﬁcation purposes and tabled at the annual general meeting convened to consider, inter alia, this resolution, be and is hereby
adopted.”

ORDINARY RESOLUTION NUMBER 10

Placement of unissued shares under the control of directors for the purpose of The Gold Fields 2005 Share Plan
“Resolved that, subject to the passing of ordinary resolution number 9 proposed at the annual general meeting at which this ordinary
resolution is to be considered, so many of the total unissued ordinary shares in the capital of the company as do not, together with those
placed under the control of the directors pursuant to ordinary resolution number 11 and ordinary resolution number 12, exceed 5% of the
total unissued ordinary shares in the capital of the company, be and are hereby placed under the control of the directors of the company
who are speciﬁcally authorised in terms of section 221(2) of the Companies Act 61 of 1973, as amended, to allot and issue all or any of
such shares, in accordance with the terms and conditions of The Gold Fields Limited 2005 Share Plan, as same may be amended from
time to time.”

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Notice

of annual general meeting

(continued)

ORDINARY RESOLUTION NUMBER 11

Placement of unissued shares under the control of directors for the purpose of The GF Management Incentive Scheme, approved at the annual general meeting of shareholders of the company on 10 November 1999
“Resolved that, so many of the total unissued ordinary shares in the capital of the company as do not, together with those placed
under the control of the directors pursuant to ordinary resolution number 10 and ordinary resolution number 12, exceed 5% of the total
unissued ordinary shares in the capital of the company, be and are hereby placed under the control of the directors of the company who
are speciﬁcally authorised in terms of section 221(2) of the Companies Act 61 of 1973, as amended, to allot and issue all and any of such
shares in accordance with the terms and conditions of The GF Management Incentive Scheme, as same has been or may be amended
from time to time.”

ORDINARY RESOLUTION NUMBER 12

Award of rights to non-executive directors under The Gold Fields 2005 Non-Executive Share Plan
“Resolved that, subject to the passing of special resolution number 2, proposed at the annual general meeting at which this ordinary
resolution is to be considered:
(a) the following current and retiring non-executive directors are awarded rights to the following numbers of shares in terms of The Gold

Fields Limited 2005 Non-Executive Share Plan:

(i) AJ Wright – 3 000;

(ii) GJ Gerwel – 3 000;

(iii) JM McMahon – 3 000;

(iv) RL Pennant-Rea – 3 000;

(v) PJ Ryan – 3 000;

(vi) TMG Sexwale – 3 000;

(vii) CI von Christierson – 3 000;

(viii) K Ansah – 3 000;

(ix) CMT Thompson – 3 000;

(x) BR van Rooyen – 3 000;

(xi) GR Parker – 3 000; and

(b) so many unissued ordinary shares in the capital of the company as are necessary to allot and issue the shares in respect of which

rights have been awarded to current and retiring non-executive directors under this ordinary resolution number 12, be and are hereby
placed under the control of the directors of the company who are speciﬁcally authorised in terms of section 221(2) of the Companies
Act 61 of 1973, as amended, to allot and issue all and any of such shares, in accordance with the terms and conditions of The Gold
Fields Limited 2005 Non-Executive Share Plan, as same may be amended from time to time.”

EXPLANATORY NOTE ON RESOLUTIONS NUMBERS 9, 10, 11 AND 12

The reasons for and effect of ordinary resolutions numbers 9, 10, 11 and 12 are set out in the directors’ report which forms part of the
annual ﬁnancial statements of the company, which accompany this notice of annual general meeting. These resolutions relate to the
current GF Management Incentive Scheme (“current scheme”), The Gold Fields Limited 2005 Share Plan and The Gold Fields Limited
2005 Non-Executive Share Plan. The salient features of The Gold Fields Limited 2005 Share Plan and The Gold Fields Limited 2005
Non-Executive Share Plan are annexed hereto. Copies of the current scheme, The Gold Fields Limited 2005 Share Plan and The Gold
Fields Limited 2005 Non-Executive Share Plan will be available for inspection at the registered ofﬁce of the company from 8:00 to 17:00
until the date of the annual general meeting.

ORDINARY RESOLUTION NUMBER 13

Increase of Directors’ Fees
“Resolved that the annual retainer for the chairman of the Audit Committee be increased from R80 000 to R112 000 with effect from
1 January 2005.”

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

EXPLANATORY NOTE ON RESOLUTION NUMBER 13

While the company increased the retainer for the members of the Audit Committee, effective 1 January 2005 to take account of
increased workload of that Committee, the annual retainer for the chairman of the Audit Committee was not similarly adjusted. This
resolution seeks to correct that omission.

SPECIAL RESOLUTION NUMBER 1

Acquisition of company’s own shares
“That the company or any subsidiary of the company is hereby authorised by way of general approval, to from time to time acquire
ordinary shares in the share capital of the company in accordance with the Companies Act, 61 of 1973 and the JSE Listings Requirements
provided that:
(i) the number of ordinary shares acquired in any one ﬁnancial year shall not exceed 20% of the ordinary shares in issue at the date on

which this resolution is passed;

(ii) this authority shall lapse on the earlier of the date of the next annual general meeting of the company or the date 15 months after

the date on which this resolution is passed;

(iii) the repurchase must be effected through the order book operated by the JSE trading system and done without any prior

understanding or arrangement between the company and the counter party;

(iv) the company only appoints one agent to effect any repurchase (s) on its behalf;
(v) the price paid per ordinary share may not be greater than 10% above the weighted average of the market value of the ordinary

shares for the ﬁve business days immediately preceding the date on which a purchase is made;

(vi) the number of shares purchased by subsidiaries of the company shall not exceed 10% in the aggregate of the number of issued

shares in the company at the relevant times;

(vii) the repurchase of shares by the company or its subsidiaries may not be effected during a prohibited period, as deﬁned in the JSE

Listing Requirements;

(viii) after a repurchase the company will continue to comply with all the JSE Listings Requirements concerning shareholder spread

requirements;

(ix) an announcement containing full details of such acquisitions of shares will be published as soon as the company and/or its

subsidiaries have acquired shares constituting, on a cumulative basis 3% of the number of shares in issue at the date of the general
meeting at which this special resolution is considered and if approved, passed, and for each 3% in aggregate of the initial number
acquired thereafter.”

EXPLANATORY NOTE ON SPECIAL RESOLUTION NUMBER 1

The reason for and effect of this special resolution is to allow the company and/or its subsidiaries by way of a general authority to acquire
its own issued shares, thereby reducing the total number of ordinary shares of the company in issue.

At the present time the directors have no speciﬁc intention with regard to the utilisation of this authority which will only be used if the
circumstances are appropriate. Any decision by the directors, after considering the effect of a repurchase of up to 20% of the company’s
issued ordinary shares, to use the general authority to repurchase shares of the company or group will be with regard to the prevailing
market conditions and other factors and provided that, after such acquisition, the directors are of the opinion that:
(i) the company and its subsidiaries will be able to pay their debts in the ordinary course of business for a period of 12 months after

the date of this notice;

(ii) recognised and measured in accordance with the accounting policies used in the latest audited annual group ﬁnancial statements,

the assets of the company and its subsidiaries will exceed the liabilities of the company and its subsidiaries for a period of 12 months
after the date of this notice;

(iii) the ordinary capital and reserves of the company and its subsidiaries will be adequate for the purposes of the business of the

company and its subsidiaries for the period of 12 months after the date of this notice; and

(iv) the working capital of the company and its subsidiaries will be adequate for the purposes of the business of the company and its

subsidiaries for the period of 12 months after the date of this notice.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Notice

of annual general meeting

(continued)

The company will ensure that its sponsor will provide the necessary letter on the adequacy of the working capital in terms of the JSE
Listings Requirements, prior to the commencement of any purchase of the company’s shares on the open market.

The JSE Listings Requirements require, in terms of Section 11.26, the following disclosure requirements, which appear in the annual
report of which this notice will be a part:

•

Directors and management – refer to pages 6, 7, 22 and 23 of the annual report

•

Major beneﬁcial shareholders – refer to page 182 of the annual ﬁnancial report

•

Directors’ interests in ordinary shares – refer to page 135 of the annual ﬁnancial report

•

Share capital of the company – refer to page 131 of the annual ﬁnancial report

The directors of the company are not aware of any legal or arbitration proceedings, including proceedings that are pending or threatened,
that may have or have had in the recent past, being at least the previous 12 months, a material effect on the group’s ﬁnancial position.

The directors jointly and severally accept full responsibility for the accuracy of information pertaining to the special resolution and certify
that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or
misleading, and that all reasonable enquiries to ascertain such facts have been made and that the resolution contains all information
required by the JSE Listings Requirements.

Other than the facts and developments reported on in the annual report, there have been no material changes in the affairs or ﬁnancial
position of the company and its subsidiaries between the date of signature of the audit report and the date of this notice.

SPECIAL RESOLUTION NUMBER 2

Award of Rights in terms of The Gold Fields Limited 2005 Non-Executive Share Plan
“Resolved that, (a) the document embodying The Gold Fields Limited 2005 Non-Executive Share Plan (“the Non-Exec Plan”), a copy of which has been signed by the Chairman for identiﬁcation purposes and tabled at the annual general meeting convened to consider, inter alia, this resolution be and is hereby adopted and (b) the rights to acquire shares given to the non-executive directors of the company in accordance with the provisions of the Non-Exec Plan be and are hereby authorised in terms of section 223 of the Companies Act 61 of 1973, as amended.”

EXPLANATORY NOTE ON SPECIAL RESOLUTION NUMBER 2

Special resolution number 2 is proposed in order to authorise the award of unissued ordinary shares in the company to the non-executive
directors of the company in accordance with the provisions of The Gold Fields Limited 2005 Non-Executive Share Plan.

The effect of this special resolution will be that the non-executive directors of the company may then be awarded shares in the company on the basis set out in The Gold Fields Limited 2005 Non-Executive Share Plan. The salient features of The Gold Fields Limited 2005 Non-Executive Share Plan, are annexed to this document, being the notice of annual general meeting. Copies of The Gold Fields Limited 2005 Non-Executive Share Plan will be available for inspection at the registered ofﬁce of the company from 8:00 to 17:00 until the date of the annual general meeting.

A shareholder entitled to attend and vote at the meeting may appoint a proxy or proxies to attend, speak and vote in his/her stead. A proxy
need not be a shareholder of the company. Proxy forms must reach the registered ofﬁce, or the London secretaries, or the Johannesburg
or London transfer ofﬁce of the company at least 24 hours before the time of the meeting.

By order of the directors

C Farrel
Corporate Secretary

Johannesburg
13 September 2005

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Gold Fields Limited Annual Report 2005

SALIENT FEATURES OF THE GOLD FIELDS LIMITED 2005 SHARE PLAN (“2005 Plan”)

1 NUMBER OF SHARES MADE AVAILABLE FOR THE SCHEME

1.1 The aggregate number of ordinary shares in the capital of the Company (“shares”) which may be acquired by participants under

the 2005 Plan together with shares which may be acquired by participants under any other share plan in force which provides

for the acquisition of shares (collectively “Any Other Plan”) shall not exceed 5% of the Company’s issued share capital, being

24 564 711 shares as at 19 August 2005.

1.2 The aggregate number of shares which may be acquired by any one participant under the 2005 Plan and Any Other Plan shall not

exceed 0,5% of the Company’s issued share capital, being 2 456 471 shares as at 19 August 2005.

1.3 The aggregates above shall not be exceeded without the prior authority of the Company in general meeting and the approval (to

the extent necessary) of every stock exchange on which the shares are, at the time, listed.

2 THE GOLD FIELDS LIMITED 2005 SHARE TRUST

The Gold Fields Limited 2005 Share Trust (“the trust”) will be established to administer the 2005 Plan. The board of directors of the

Company (“the board”) shall be entitled to appoint and remove the trustees of the trust. There shall at all times be a minimum of two

trustees. The ﬁrst trustees (“trustees”) are to be Messrs A J Wright and T M G Sexwale. The trustees may not participate in the 2005

Plan. The Trust shall recover from a participant’s employer within the Gold Fields Limited group of companies (“Group”) all such costs

as may be attributable to such participant’s participation in the 2005 Plan.

3 PURPOSE, PARTICIPANTS AND MANNER OF PARTICIPATION

3.1 The purpose of the 2005 Plan is to attract, motivate, retain and reward employees, including executive directors of the Group who

are able to inﬂuence Group performance on a basis which aligns the interests of such participants with those of the Company’s

shareowners.

3.2 Participants in the 2005 Plan will be executive directors and other senior employees of the Group, as selected by the board from

time to time (collectively “participants”).

3.3 The 2005 Plan empowers the board to offer participants a conditional right, from time to time, to receive performance vesting

restricted shares (each a “PS”) and/or performance allocated share appreciation rights (each a “SAR”) on the terms and conditions

described more fully below.

Notice

of annual general meeting – Annexure I

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Notice

of annual general meeting – Annexure I

(continued)

4 PERFORMANCE VESTING RESTRICTED SHARES

The salient features of the 2005 Plan relating to the award of PSs are set out hereunder.

4.1 A participant is (if the board so resolves) offered the conditional right to receive up to a maximum number of PSs for which

no consideration is payable. The initial maximum awards are expected to range from 17% to 90% of the gross remuneration

packages of participants.

4.2 A PS shall, subject to 4.3, be released to a participant on the date (“release date”) which falls three years after the date (“the

award date”) on which the PS was awarded to the participant; provided that such three year period will be extended if and to the

extent applicable law or Company policy in force from time to time prevents the Company from releasing or the participant from

receiving or otherwise dealing in PSs or shares on the release date.

4.3 The release of PSs is dependent upon the meeting by the Company of performance criteria determined by the board at or prior

to the award date (“the performance criteria”) on the basis that the maximum number of PSs to be released on the release date

will be adjusted if and to the extent the performance criteria are not satisﬁed over the three year period (whether in whole or

in part). The initial performance criteria determined by the board entails a comparison between the appreciation of the price of

the Company’s shares against the growth in the Philadelphia XAU index (which is an index of international metal companies,

predominantly in the gold sector) over a three year period. On this basis, it is envisaged that the maximum number of PSs awarded

shall be released to a participant if the appreciation in the price of shares equals or exceeds the performance of the companies

in the upper quartile of the Philadelphia XAU index. Less than the maximum number of PSs, determined on a sliding scale, shall

be released if the appreciation in the price of shares does not equal or exceed the performance of the companies in the upper

quartile of the Philadelphia XAU index, on the basis that no PSs shall be released if the appreciation of the price of shares equals

or is lower than the performance of the companies in the lower quartile of the Philadelphia XAU index. The board is entitled, in

exceptional circumstances and without prejudicing or disadvantaging participants, to waive fulﬁlment of the performance criteria

or to amend same should they become inapplicable or inappropriate as a measure of performance.

4.4 The extent to which the performance criteria have been met will be assessed by the board prior to the release date.

4.5 If a participant’s employment with the Group terminates:

4.5.1 by reason of:

4.5.1.1 death, injury, disability or ill-health;

4.5.1.2 dismissal for operational reasons;

4.5.1.3 retirement on or after his retirement date;

4.5.1.4 the company by which he is employed ceasing to be a member of the Group; or

4.5.1.5 the undertaking in which he is employed being transferred to a transferee which is not a member of the Group,

such participant (or his estate in the event of his death) shall, unless the board determines otherwise, be entitled to receive

that number of PSs awarded to him on the applicable award date, adjusted on a basis which is pro-rated with reference to

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

the total number of calendar months which have elapsed between such award date and the date of such termination and

which assumes that the performance criteria have been met as if the Company has performed as targeted over the period

between the award date and the release date. Based on the initial performance criteria, this will necessitate a 50% vesting

of PSs on the release date;

4.5.2 for any reason other than one of those contemplated in 4.5.1, his award shall cease to be effective unless the board

determines otherwise, in which event such participant shall be entitled, to receive that number of shares which is

determined mutatis mutandis on the basis detailed in 4.5.1.

4.6 Provision is made for the Company to settle its obligation to settle PSs to a participant on the relevant release date, by (a) way

of allotment and issue; or (b) the Company or the Trust procuring the transfer of such shares to the participant; provided that, as

opposed to settling PSs in equity, the participant may, at the Company’s election, be paid a cash bonus equal to the Fair Market

Value of each share to which the participant becomes entitled. For the purposes of the 2005 Plan, “Fair Market Value”, in relation

to a share on any particular day, means the volume weighted average price of a share on the JSE Limited (“JSE”) over the 20 (or

lesser, if the board so decides) trading days immediately prior to the day in question.

5 PERFORMANCE ALLOCATED SHARE APPRECIATION RIGHTS

The salient features of the 2005 Plan relating to performance allocated share appreciation rights (each a “SAR”) are set out

hereunder:

5.1 A participant is, if the board so resolves, offered the right to receive a number of SARs upon the terms summarised below,

for which no consideration is payable. In determining the number of SARs to be granted, the Board shall take into account the

performance of the individual participants. The initial award for a fully performing participant at all levels is expected to be SARs

with a face value equivalent to 30% of the gross remuneration package applicable to that participant’s level in the Company. SARs

with a face value of up to a maximum of 60% of an individual’s gross remuneration package may, however, be awarded to attract

or retain an exceptional performer.

5.2 SARs may not be exercised by a participant until the date (“the release date”) which falls three years after that date on which the

SARs are allocated to the participant (“the allocation date”); provided that such three year period will be extended by the board if

and to the extent, applicable law or Company policy in force from time to time prevents the Company from settling SARs or the

participant from dealing in shares on the release date.

5.3 A participant’s entitlement to receive SARs is not conditional upon the attainment of any Company performance criteria since the

award of SARs is subject to the performance of the individual participants.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Notice

of annual general meeting – Annexure I

(continued)

5.4 If a participant’s employment with the Group terminates:

5.4.1 by reason of:

5.4.1.1 death, injury, disability or ill-health;

5.4.1.2 dismissal for operational reasons;

5.4.1.3 retirement;

5.4.1.4 the company by which he is employed ceasing to be a member of the Group; or

5.4.1.5 the undertaking in which he is employed being transferred to a transferee which is not a member of the Group,

such participant (or the trustees of his estate in the event of his death) shall, unless the board determines otherwise,

be entitled, within a period of 12 months after such termination, to exercise that number of SARs awarded to him on

the applicable allocation date, adjusted downwards on a basis which is pro-rated with reference to the total number of

calendar months which have elapsed between such allocation date and the date of such termination. Any SAR which has

not been exercised at the end of such 12 month period will no longer be effective;

5.4.2 for any reason other than one of those contemplated in 5.4.1, his award shall no longer be effective unless the board

determines otherwise in which event such participant shall be entitled, for a period of 12 months following such termination,

to exercise that number of SARs awarded to him on the applicable allocation date, adjusted downwards mutatis mutandis

on the basis speciﬁed in 5.4.1.

5.5 A participant is entitled, on or after the applicable release date to exercise one or more SARs on the basis that such Participant shall,

in respect of each SAR so exercised, receive such number of shares as is calculated in accordance with the following formula:

A = (B – C) ÷ B

where:

A = the number of shares to which a Participant is entitled in respect of each SAR which has been exercised or is deemed to

have been exercised;

B = the Fair Market Value of a share on the date on which such SAR is exercised or is deemed to have been exercised;

C = the price attributable to a SAR on the allocation date, being the Fair Market Value of a share on such date (the

“Allocation Price”).

5.6 The Company may discharge its obligation to settle a SAR, at its election by (a) way of allotment and issue; or (b) the Company

or the Trust procuring the transfer of such shares to the participant; provided that, as opposed to settling SARs in equity, the

participant may, at the Company’s election, be paid a cash bonus equal to the Fair Market Value of the shares to which the

participant becomes entitled on the exercise of his SARs.

5.7 All SARs which vest in a participant and are not exercised by a participant will cease to be effective if and to the extent they

have not been exercised by a participant upon expiry of the period commencing on the allocation date and terminating on the 6th

anniversary thereafter; provided that such six year period:

5.7.1 will be extended by the board if and to the extent that applicable law or Company policy in force from time to time

prevents the Company from settling a participant’s entitlement to shares or a participant from receiving or otherwise

dealing in shares on expiry of such period;

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Gold Fields Limited Annual Report 2005

5.7.2 may be extended by the board, in its discretion, if and to the extent that any category of participant has, in any 12 month

period preceding the expiry of such period, been precluded from receiving or otherwise dealing in shares for ﬁve or more

months in the aggregate.

6 GENERAL PROVISIONS

6.1 Provision is made for appropriate adjustments in the event of alterations to the Company’s capital including by way of special

distributions, rights offers, corporate reorganisations, sub-divisions and consolidations. Furthermore, provision is made for the

appropriate treatment of participants in the event of certain reconstructions of the Company including by way of certain merger

and take-over events.

6.2 Subject to 6.3, if the Company undergoes a change of control after an award date and/or allocation date, then:

6.2.1 the release date in respect of all PSs and all unvested SARs previously awarded to participants, adjusted downwards on

a basis which is pro-rated with reference to the total number of calendar months which have elapsed since the relevant

award date and allocation date, shall be deemed to fall on the date on which such change of control becomes effective

(“implementation date”);

6.2.2 all SARs which are or then become vested in a participant shall be deemed to have been exercised on the implementation

date,

on the basis that the Company must discharge its settlement obligation to participants pursuant to such acceleration of the

release date of PSs and/or the deemed exercise of SARs by either:

6.2.3 paying to participants an amount equal to the Fair Market Value of the shares which would have been settled to participants

on the implementation date, in respect of SARs, after applying the formula in 5.5; or

6.2.4 the delivery of the applicable number of shares to such participant.

In the case of PSs, it shall be assumed that the Company has performed as targeted over the period between the award date and

the release date. Based on the initial performance criteria, this will necessitate a 50% vesting of PSs on the release date.

6.3 Notwithstanding 6.2, if the Company undergoes a change of control pursuant to a transaction which makes provision

for participants’ rights under the 2005 Plan to be substituted for other rights or to be otherwise accommodated, on a basis

determined by an independent merchant bank to be fair and reasonable to participants, participants shall not be entitled to the

rights articulated in 6.2; provided that if such participant’s employment within the Group is terminated for any reason whatsoever

(including his resignation) within a period of 12 months following the implementation date, he shall be entitled to be settled on

the same basis that would have applied had the provisions of 6.2 been applicable, the effective date of such determination being

the implementation date.

6.4 The Company shall apply for a listing on the JSE of all shares issued to a participant under the 2005 Plan as soon as possible after

the issue (if applicable) thereof.

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

Notice

of annual general meeting – Annexure I

(continued)

6.5 A participant may not cede any of his rights or delegate any of his obligations under the plan except, on terms acceptable to the

Board, to a family trust or family company.

6.6 The board and the trustees may amend the 2005 Plan, with the approval (if required), of every stock exchange on which shares

are, at the relevant time, listed. In addition, no amendments affecting any of the following matters shall be competent unless

sanctioned by the Company in general meeting:

6.6.1 the eligibility of participants;

6.6.2 the deﬁnition of Allocation Price;

6.6.3 the deﬁnition of Fair Market Value;

6.6.4 the maximum number of shares subject to the 2005 Plan and the maximum number of shares which may be acquired by

a single participant.

6.7 On the winding-up of the trust, any surplus shall be paid to the Company and any deﬁcit arising will be borne by the Company.

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

SALIENT FEATURES OF THE GOLD FIELDS LIMITED 2005 NON-EXECUTIVE SHARE PLAN
(“2005 Non-Exec Plan”)

1 NUMBER OF SHARES MADE AVAILABLE FOR THE SCHEME

1.1 The aggregate number of ordinary shares in the capital of the Company (“shares”) which may be acquired by participants under

the 2005 Non-Exec Plan, together with shares which may be acquired by participants under any other share plan in force which

provides for the acquisition of shares (collectively “Any Other Plan”) shall not exceed 5% of the Company’s issued share capital,

being 24 564 711 shares as at 19 August 2005.

1.2 The aggregate number of shares w hich may be acquired by any one participant under the 2005 Non-Exec Plan together with

Any Other Plan shall not exceed 0,2% of the Company’s issued share capital, being 982 588 shares as at 19 August 2005.

1.3 The aggregates above shall not be exceeded without the prior authority of the Company in general meeting and the approval (to

the extent necessary) of every stock exchange on which the shares are, at the time, listed.

2 PURPOSE, PARTICIPANTS AND MANNER OF PARTICIPATION

2.1 The purpose of the 2005 Non-Exec Plan is to provide non-executive directors of the Company with the opportunity to acquire

an interest in the equity of the Company so as to align their own interests with those of the Company’s shareowners, thereby

providing such non-executive directors with a further incentive to advance the Company’s interests.

2.2 Participants in the 2005 Non-Exec Plan will be non-executive directors of the Company, who are not members of the Non-Executive

Directors Remuneration Committee (“Exco”) (collectively “participants”). Exco will comprise the Chief Executive Ofﬁcer of the

Company and two nominees appointed by the Chief Executive Ofﬁcer from time to time.

2.3 The 2005 Non-Exec Plan entitles Exco, with the prior approval of the shareholders of the Company in general meeting, to make

awards of restricted shares to participants on the terms and conditions described more fully below.

2.4 No consideration is payable for the grant of an award of restricted shares.

2.5 In order to align the interests of each participant more closely with the long-term interests of the Company, restricted shares

awarded shall be settled to a participant on the date (“release date”) which falls three years after the date (“the award date”) on

which the restricted shares were awarded to the participant; provided that such three year period will be extended if and to the

extent applicable law or Company policy in force from time to time prevents the Company from releasing or the participant from

receiving or otherwise dealing in shares on the release date.

2.6 If a participant ceases to be a non-executive director of the Company by reason of death, the restricted shares awarded to him

on the award date shall be settled, as soon as reasonably practicable following his death, to his heirs, executor, trustees or other

representative. If a participant ceases to be a non-executive director as a result of his:

Notice

of annual general meeting – Annexure II

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

2.6.1 removal from ofﬁce by way of a resolution of shareholders of the company pursuant to this proven dishonest, fraudulent,

grossly negligent or other misconduct;

2.6.2 becoming disqualiﬁed from holding appointment as a director of the company;

2.6.3 resignation at the request of a majority of the board of directors in circumstances of the nature contemplated in 2.6.1,

his award will cease to be effective. If a participant ceases to hold ofﬁce for any other reason, the restricted shares awarded to

him shall, nonetheless, be released to him on the relevant release date.

2.7 Provision is made for the Company to settle its obligation to settle restricted shares to a participant on the relevant release date,

by (a) way of allotment and issue; or (b) the Company procuring the transfer of such shares to the participant; provided that, as

opposed to settling restricted shares in equity, the participant may, at Exco’s election, be paid a cash bonus equal to the Fair

Market Value of each share to which the participant becomes entitled. For the purposes of the 2005 Non-Exec Plan, “Fair Market

Value”, in relation to a share on any particular day, means the volume weighted average price of a share on the JSE Limited

(“JSE”) over the 20 (or lesser, if Exco so decides) trading days immediately prior to the day in question.

2.8 Provision is made for appropriate adjustments in the event of alterations to the Company’s capital including by way of special

distributions, rights offers, corporate reorganisations, sub-divisions and consolidations. Furthermore, provision is made for the

appropriate treatment of participants in the event of certain reconstructions of the Company including by way of certain merger

and take-over events. In particular, if the Company undergoes a change of control after an award date, the release date in

respect of all restricted shares previously awarded to participants shall be deemed to fall on the date on which such change of

control becomes effective (“implementation date”), on the basis that the Company must discharge its settlement obligation to

participants pursuant to such acceleration of the release date of restricted shares by either (at the election of the participant):

2.8.1 paying to participants an amount equal to the Fair Market Value of the shares granted under the award; or

2.8.2 the delivery of shares to such participant.

2.9 The Company shall apply for a listing on the JSE of all shares issued to a participant under the 2005 Non-Exec Plan as soon as

possible after the issue (if applicable) thereof.

2.10 A participant may not cede any of his rights or delegate any of his obligations under the 2005 Non-Exec Plan except, on terms

acceptable to Exco, to a family trust or family company.

2.11 Exco may amend the 2005 Non-Exec Plan, with the approval (if required, of every stock exchange on which shares are, at the

relevant time, listed). However, no amendments affecting any of the following matters shall be competent unless sanctioned by

the Company in general meeting:

2.11.1 the eligibility of participants;

2.11.2 the deﬁnition of Fair Market Value;

2.11.3 the maximum number of shares subject to the 2005 Non-Exec Plan and the maximum number of shares which may be

acquired by a single participant.

Notice

of annual general meeting – Annexure II

(continued)

www.goldﬁelds.co.za

Gold Fields Limited Annual Report 2005

Gold Fields Limited

(Registration No 1968/004880/06)

Share Code: GFI

Issuer Code: GOGOF

ISIN: ZAE000018123

I/we (Name in block letters)
of (Address in block letters)
being a shareholder(s) of Gold Fields Limited
hereby appoint

or, failing him/her

or, failing him/her, the chairman of the meeting as my/our proxy to attend, speak and, on a poll vote on my/our behalf at the annual general meeting of shareholders of Gold Fields Limited to be held on Thursday, 17 November, 2005 at 09:00, and at any adjournment thereof, and to vote or abstain from voting as follows on the resolutions to be proposed at such meeting:

For

Against

Abstain

Ordinary resolution number 1

Adoption of ﬁnancial statements
Ordinary resolution number 2

Re-election of Dr A Grigorian as a director
Ordinary resolution number 3

Re-election of Mr S Stefanovich as a director
Ordinary resolution number 4

Re-election of Mr J M McMahon as a director
Ordinary resolution number 5

Re-election of Mr C I von Christierson as a director
Ordinary resolution number 6

Re-election of Mr A J Wright as a director
Ordinary resolution number 7

Placement of shares under the control of the directors
Ordinary resolution number 8

Issuing shares for cash
Ordinary resolution number 9

Adoption of the Gold Fields Limited 2005 Share Plan
Ordinary resolution number 10

Placement of unissued shares under the control of the directors for the purpose

of The Gold Fields 2005 Share Plan
Ordinary resolution number 11

Placement of unissued shares under the control of directors for the purpose of

The GF Management Incentive Scheme, approved at the annual general meeting

of shareholders of the company on 10 November 1999
Ordinary resolution number 12

Award of rights to non-executive directors under The Gold Fields 2005

Non-Executive Share Plan
Ordinary resolution number 13

Increase of directors’ fees
Special resolution number 1

Acquisition of company’s own shares
Special resolution number 2

Award of Rights in terms of The Gold Fields Limited 2005 Non-Executive Share Plan

A shareholder entitled to attend and vote at the meeting may appoint a proxy or proxies to attend, speak and on a poll, vote in his/her stead. A proxy need not be a shareholder of the company.
Every person present and entitled to vote at the annual general meeting as a shareholder or as a representative of a body corporate shall on a show of hands have one vote only, irrespective of the number of shares such person holds or represents, but in the event of a poll, every share shall have one vote.
Please indicate with an “X” in the appropriate spaces above how you wish your votes to be cast.
If you return this form duly signed without any speciﬁc directions, the proxy will vote or abstain at his/her discretion.
Signed at

2005

Name in block letters

Signature

Assisted by me (where applicable)

This proxy form is not for use by holder of American Depositary Receipts issued by the Bank of New York

Proxy

form

Gold Fields Limited Annual Report 2005

www.goldﬁelds.co.za

NOTES

1. A form of proxy is only to be completed by those

shareholders who are:

– holding shares in certiﬁed form; or

– recorded on sub-register electronic form in “own

name”.

2. All other beneﬁcial owners who have dematerialised

their shares through a Central Securities Depository
Participant (“CSDP”) or broker and wish to attend
the annual general meeting, must provide the CSDP
or broker with their voting instructions in terms of the
relevant custody agreement entered into between
them and the CSDP or broker.

3. A signatory/ies to the Proxy Form may insert the

name of a proxy or the name of an alternative proxy
in the blank spaces provided with or without deleting
“the chairman of the meeting”, but any such deletion
must be initialled by the signatory/ies. Any insertion
or deletion not complying with the aforegoing will be
deemed not to have been validly effected. The person
at the meeting whose name appears ﬁrst on the list of
names above, shall be the validly appointed proxy for
the shareholder at the meeting.

4. A shareholders’ instructions to the proxy must

be indicated in the appropriate blocks provided. A
shareholder or the proxy is not obliged to use all the
votes exercisable by the shareholder or by the proxy or
to cast all those votes in the same way, but the total of
that shareholders’ votes cast and in respect whereof
abstention is directed, may not exceed the total of
the votes exercisable by the shareholder or the proxy.
Failure to comply with the above or to provide voting
instructions or the giving of contradictory instructions
will be deemed to authorise the proxy to vote or abstain
from voting at the meeting as such proxy deems ﬁt in
respect of all that shareholders’ votes exercisable at
that meeting.

5. Any alteration or correction made to this Proxy Form

must be initialled by the signatory/ies.

Proxy

form

(continued)

6. Documentary evidence establishing the authority

of a person signing this Proxy Form in a responsible
capacity must be attached to this Proxy Form unless
previously recorded by the company.

7. When there are joint holders of shares, any one holder

may sign the Proxy Form.

8. A married woman still subject to her husband’s marital

power must be assisted by him (if applicable).

9. The completion and lodging of this Proxy Form will

not preclude the shareholder who grants this proxy
from attending the meeting and speaking and voting in
person thereat to the exclusion of any proxy appointed
in terms hereof should such member wish to do so.

10. Completed Proxy Forms should be returned to the

registered ofﬁces in Johannesburg or in London or
one of the transfer ofﬁces of the company at either
of the addresses given below by no later than 09:00
local time (in the country concerned) on Tuesday,
15 November 2005.

Transfer ofﬁces
South Africa
Computershare Investor Services 2004 (Proprietary) Limited
Ground Floor
70 Marshall Street
Johannesburg, 2001
P O Box 61051
Marshalltown, 2107
Tel: (+27)(11) 370-5000
Fax: (+27)(11) 370-5271

United Kingdom
Capita Registrars
Bourne House
34 Beckenham Road
Beckenham
Kent BR3 4TU
England
Tel: +44 20 8639 2000
Fax: +44 20 8658 3430

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

Date: 6 October 2005

GOLD FIELDS LIMITED

By:

Name: Mr W J Jacobsz
Title: Senior Vice President: Investor
Relations and Corporate Affairs