1st Quarter Results

RNS Number:1086T
Gold Fields Ld
26 October 2000


Gold Fields Limited
  Incorporated in the Republic of South Africa
  Registration number 05/04181/06

Results for the quarter ended September 2000
www.goldfields.co.za

Highlights
* Gold production up 6 per cent.
* Operating profit up to R428 million despite annual wage increases.
* Cash costs down to US$206 per ounce.
* Disappointing results from Oryx and St Helena.

South African Rands                                      United States Dollars
                          Salient features
   Quarter                                                Quarter
June    Sept.                                           Sept.  June
2000    2000                                            2000   2000
28,623  30,256  kg        Gold production*   oz(000)    973    920
45,718  46,407  R/kg      Cash costs         $/oz       206    207
5,815   5,985   000       Tons milled        000        5,985  5,815
62,093  62,160  R/kg      Revenue            $/oz       277    281
239     252     R/ton     Operating costs    $/ton      36     35
418     428     Rm        Operating profit   $m         61     61
                          Earnings before    
370     206     Rm        exceptional items  $m         29     54
82      45      SA c.p.s. - net of taxation  US c.p.s.  7      12
314     201     Rm        Net earnings       $m         29     46
69      44      SA c.p.s.                    US c.p.s.  6      10
* Attributable - All companies wholly-owned except for Tarkwa (71.1%).

                            Income Statements
International Accounting Standards Basis Figures are in millions unless stated
          Quarter                                           Quarter 
September June      September                     September June     
September
1999      2000      2000                          2000      2000      1999
1,648.8   1,804.3   1,930.2 Revenue               276.1     262.6     270.7
1,572.6   1,804.3   1,930.2 Spot sales            276.1     262.6     258.2
76.2      -         -       Hedging profit        -         -         12.5
1,444.1   1,386.3   1,502.1 Operating cost        214.9     201.8     237.1
204.7     418.0     428.1   Operating profit      61.2      60.8      33.6
(13.2)    (27.4)    8.9     Gold inventory change 1.3       (4.0)     (2.2)
171.1     143.8     156.3   Amortisation and      22.4      20.9      28.1
                            depreciation
46.8      301.6     262.9   Net operating profit  37.5      43.9      7.7
15.4      47.1      17.3    Other income          2.5       6.9       2.5
(13.1)    (27.9)    (14.0)  Business development  (2.0)     (4.1)     (2.2)
                            Profit before tax and 
49.1      320.8     266.2   exceptional items     38.0      46.7      8.0
(131.0)   (108.0)   (8.0)   Exceptional           (1.1)     (15.7)    (21.5)
                            gain/(loss)
(81.9)    212.8     258.2   Profit/(loss)         36.9      31.0      (13.5)
                            before taxation
45.0      (108.4)   43.4    Mining and            6.2       (15.8)    7.4
                            income taxation
48.2      93.5      22.1    - Normal taxation     3.2       13.6      7.9
(3.2)     (201.9)   21.3    - Deferred taxation   3.0       (29.4)    (0.5)
(126.9)   321.2     214.8   Profit/(loss)         30.7      46.8      (20.9)
                            after taxation
(38.9)    6.8       14.3    Minority interest     2.0       1.0       (6.4)
(88.0)    314.4     200.5   Net earnings/(loss)   28.7      45.8      (14.5)
                            Exceptional items
(66.2)    (7.4)     (8.0)   Retrenchment costs    (1.1)     (1.1)     (10.9)
-         (100.0)   -       Impairment of assets  -         (14.6)    -
(64.8)    -         -       Hedge buy-back costs  -         -         (10.6)
-         (0.6)     -       Other                 -         -         -
(131.0)   (108.0)   (8.0)   Total exceptional     (1.1)     (15.7)    (21.5)
                            items
(17.0)    51.8      2.5     Taxation              0.4       7.5       (2.8)
39.7      0.4       0.1     Minorities share of   -         0.1        6.5
                            exceptional items
                            Net exceptional items
(108.3)   (55.8)    (5.4)   after tax and         (0.7)     (8.1)     (17.8)
                            minorities
                            Net earnings/(loss)
(20)      69        44      per share (cents)     6         10        (3)
                            Earnings (Rm) before  
                            exceptional items,    
20.3      370.2     205.9   net of taxation       29.4      53.9      3.3
                            Earnings per share 
                            (cents) before
5         82        45      exceptional items,    7         12        1
                            net of tax
SA Rand/US$ conversion rate                       6.99      6.87      6.09

                              BALANCE SHEETS
International Accounting Standards Basis Figures are in millions unless stated
June      September                                         September June 
2000      2000                                              2000      2000
12,326.8  12,462.3  Mining and mineral assets               1,721.3   1,820.8
128.3     132.1     Non-current assets                      18.2      19.0
244.1     245.4     Investments                             33.9      36.1
1,079.7   1,204.6   Current assets                          166.3     159.5
514.9     677.3     - Cash and deposits                     93.5      76.1
564.8     527.3     - Other current assets                  72.8      83.4
13,778.9  14,044.4  Net assets                              1,939.7   2,035.4
                    Represented by:
8,214.4   8,483.7   Shareholders' equity                    1,171.8   1,213.4
203.2     238.4     Outside shareholders' interest          32.9      30.0
3,535.3   3,556.5   Deferred taxation                       491.2     522.2
135.4     126.7     Long-term loans                         17.5      20.0
319.5     329.8     Environmental rehabilitation provisions 45.6      47.2
224.8     220.6     Post-retirement health care provisions  30.5      33.2
1,146.3   1,088.7   Current liabilities                     150.2     169.4
1,078.6   1,016.3   - Other current liabilities             140.2     159.4
                    - Current portion
67.7      72.4      of long-term loans                      10.0      10.0
13,778.9  14,044.4                                          1,939.7   2,035.4
-         -         SA Rand/US$ conversion rate             7.24      6.77

CASH FLOW STATEMENTS
International Accounting Standards Basis Figures are in millions unless stated
          Quarter                                                 Quarter
June      September                                         September June
2000      2000                                              2000      2000
369.9     385.9     Cash flow from operating activities     55.3      53.8
320.8     266.2     Profit before tax and exceptional items 38.0      46.7
(108.0)   (8.0)     Exceptional gain                        (1.1)     (15.7)
143.8     156.3     Amortisation and depreciation           22.4      20.9
(39.7)    (41.1)    Change in working capital               (5.7)     (6.0)
(55.8)    (5.8)     Taxation paid                           (0.8)     (8.2)
108.8     18.3      Other non cash items                    2.5       16.1
(226.6)   (220.5)   Cash utilised in investing activities   (30.5)    (39.3)
(151.2)   (215.0)   Cash expenditure - net                  (29.7)    (22.3)
(65.7)    (1.3)     (Purchase)/Disposal of investments -net (0.2)     (9.7)
49.7      (4.2)     Investments in trust funds and          (0.6)     (7.3)
                    medical payments
11.3      (3.0)     Cash flow from financing activities     (0.4)     1.7
114.6     162.4     Net cash inflow                         24.4      16.2
                    Translation adjustment                  (7.0)     (1.2)
400.3     514.9     Cash at beginning of period             76.1      61.1 
514.9     677.3     Cash at end of period                   93.5      76.1

COMMENTARY

HEALTH AND SAFETY
Management and the Board of Gold Fields are deeply saddened by the accident at
Kloof Mine during the quarter, where four employees lost their lives in a
multiple seismic event.  This accident, the worst at Kloof for many years,
happened on 22 September at Kloof Main shaft when a succession of seismic
events, measuring up to 2.9 on the Richter scale, shook the mine approximately
2.7 kilometres below the surface. Regrettably, less than a week later, a
further seismic event affected Driefontein, resulting in the death of a
further two miners. Our thoughts go out to all the family and friends of our
departed colleagues and our commitment to safety continues at the highest
level. On the positive side, Driefontein (before the incident) and Oryx,
achieved one million fatality free shifts during the quarter. 

FINANCIAL
Despite a flat rand gold price, a nine per cent increase in labour costs,
increased development and an increase in tons milled, operating profit in the
September quarter improved marginally to R428 million compared to R418 million
in the previous quarter. Net earnings for the September quarter amounted to
R201 million, compared to R314 million in the June quarter which was, however,
distorted by an abnormal tax credit of R162 million and the after tax effect
of the write-down of Libanon which amounted to R54 million. Normalised
earnings for the June quarter, excluding these once-off items, amounted to
R206 million.
Revenue, at R1,930 million, was R126 million higher than the previous quarter,
largely due to a six per cent increase in attributable production from 920,000
ounces in the June quarter to 973,000 ounces in the September quarter. Total
managed production for the September quarter was 1,003,000 ounces. The effects
of the lower gold price of US$277 per ounce, as compared to the price achieved
in the previous quarter of US$281 per ounce, was offset by a further weakening
in the rand/dollar exchange rate from R6.87 to R6.99 quarter on quarter. The
resultant realised price for the September quarter was R62,160 per kilogram,
virtually unchanged from R62,093 per kilogram in the June quarter.
Although operating costs increased by eight per cent to R1,502 million in the
September quarter, this must be viewed in the context of the labour increases
mentioned earlier, the six per cent increase in production and the planned 12
per cent increase in development that occurred across all the operations. This
is emphasised by the fact that cash costs in rand terms have increased by less
than two per cent quarter on quarter and, in US$ terms, improved to US$206 per
ounce compared to US$207 per ounce achieved in the previous quarter. The
operating margin, at 22 per cent, is virtually unchanged from the previous
quarter. As mentioned in the past, the Group's objective is to maintain an
operating margin of at least 25 per cent.
Other income in the June quarter was unusually high because of extraordinary
receipts from Biox and Rand Refinery.
Net earnings for the quarter amounted to R201 million after accounting for R8
million exceptional items (retrenchments) and a tax provision of R43 million.
Net earnings of R314 million in the previous quarter included the deferred tax
reversal at Beatrix/Oryx of R162 million and was partly offset by the
impairment at Libanon, which amounted to R54 million after tax. 
Capital expenditure increased to R215 million in the September quarter from
R151 million in the previous quarter mainly due to increased activity
associated with the group's key capital programmes being the 1 and 5 shaft
complex at Driefontein and the 4 sub-vertical shaft at Kloof. Notwithstanding
the increased capital expenditure during the quarter, the group's financial
position continued to be sound with cash increasing by R162 million to R677
million at the end of September. The Gold Fields Ghana project debt reduced by
US$2.5 million during the quarter to US$27.5 million as repayment of this loan
commenced. Repayment of the loan will continue at this rate until it is fully
repaid at the end of F2003.

OPERATIONS
Increases in tons milled and improved yields resulted in a six per cent
increase in gold output from 920,000 attributable ounces in the June quarter
to 973,000 ounces this quarter.
Cash costs, assisted by a slight weakening of the rand, improved to US$206 per
ounce and, in Rand terms, amounted to R46,407 per kilogram, an increase of
less than two per cent quarter on quarter.
In Ghana, the Tarkwa operation again achieved record production levels with
gold produced increasing 30 per cent to 105,000 ounces despite only a nominal
contribution from Teberebie of just over one 1,000 ounces. Management has
further improved grade control, resulting in an average yield of 1.4 g/t for
the quarter, well above the 1.1 g/t achieved in the previous quarter. It is
anticipated that cash costs, at US$165 per ounce for the quarter, will be
maintained despite the full impact of increased oil prices beginning to take
effect.
At Driefontein, despite the difficulty in maintaining yields due to declining
face grades, gold output increased nine per cent to 358,000 ounces due to
higher volume mined. The surface operations again contributed 41,000 ounces,
at a cost of approximately US$70 per ounce. Despite increases in volume mined
and development, cash costs in rand terms reduced by two per cent to R43,162
per kilogram and in dollar terms were lower at US$192 per ounce.
Kloof showed a small but steady improvement quarter on quarter, with gold
produced at 337,000 ounces, a four per cent increase, and cash costs at
R47,434 per kilogram (US$ 211 per ounce) remaining virtually unchanged, this
despite a 19 per cent increase in development and increased stoping. As
mentioned in the previous quarter, a decision has been taken to downscale
operations at Libanon to reduce the drain on profits. The mine is currently
redeploying a significant number of staff elsewhere within Gold Fields but the
benefits of this restructuring will only be realised in the quarters ahead.
The downscaled operation is settling down well.
In the Free State, Beatrix had a record production month in September and
produced 127,000 ounces during the quarter at a cash cost of US$183 per ounce.
Despite improved development at Oryx and St Helena, these operations produced
disappointing results for the quarter, with operating losses of R26 million
and R19 million respectively. The principal cause of these losses is a lack of
pay face resulting from limited mining flexibility. Clearly, the losses at
these operations cannot be sustained and the group is actively investigating
ways of ameliorating them. In the interim, the focus will continue to be on
improving flexibility through increased development and a reduction in unpay
stoping.

OUTLOOK
With the Gold Fields commitment to preventing fatalities, a full compliance
safety programme was launched during the quarter. This includes the education
and training of all employees in respect of safety regulations as well as
correct safety principles. 
The group's key value drivers are safety, productivity and cost performance.
Increased production provides the most leverage for the group due to the
labour intensive nature of the group's operations. To this end, the group is
actively investigating ways of removing barriers to improved safety and higher
production, including enhanced mining flexibility through increased
development, improved environmental conditions, education and training and a
gradual move away from longwall to sequential grid mining.
The metallurgical feasibility study at Driefontein is expected to be completed
early in 2001 and a decision on whether to commit to the project should be
made by mid 2001. The additional capacity of a new plant would provide scope
for treatment of the significant amount of waste rock on the property.
At Tarkwa, the feasibility for phase III continued and is expected to be
completed by early next year. Should positive results emanate, an expansion
decision will be made.
The Arctic Platinum project in Finland, which offers Gold Fields a 51 per cent
optional earn-in after investing US$13 million over the next six years. The
major reefs appear continuous over the 23 km of mineral concessions. The
economic benefits of this project, as well as other exploration ventures, are
continually monitored. A further 12 target zones were delineated within the
Arctic Platinum Project's area of interest and will be investigated over the
next 12 months.

GENERAL
The unaudited results for the quarter have been prepared on the International
Accounting Standards basis. The detailed financial, operational and
developmental results for the September 2000 quarter are submitted in this
report. These consolidated quarterly condensed financial statements are
prepared in accordance with IAS 34, Interim Financial Reporting. The Kloof
Division is now reported as a single entity, since the Kloof, Leeudoorn and
Libanon Mines have been combined, with the smaller Leeudoorn and Libanon now
being managed as individual shafts of the Kloof Division.

Chris Thompson
Chairman and Chief Executive Officer


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