Business Context and Reporting Period
This Form 6-K filing by Gold Fields Limited (Gold Fields) is dated February 11, 2013. The report details the successful listing of Sibanye Gold Limited (Sibanye Gold) on the Johannesburg Stock Exchange (JSE) and the commencement of its American Depositary Receipt (ADR) program on the New York Stock Exchange (NYSE). This event finalizes the unbundling of Gold Fields' South African deep-level mining operations, previously announced in November 2012.
Key Financial Metrics and Market Data
- Sibanye Gold Listing: Listed on the JSE at approximately R14 per share, resulting in a market capitalization of approximately R10 billion.
- Gold Fields Market Data: Shares closed at R105.80 on February 8, 2013, and opened at R93 on February 11, 2013, resulting in a market capitalization of approximately R68 billion.
- Production Profile: Gold Fields is an unhedged producer with attributable annualized production of 2.1 million gold equivalent ounces from six operating mines in Australia, Ghana, Peru, and South Africa.
- Reserves and Resources: Total managed gold-equivalent Mineral Reserves stand at 64 million ounces, with Mineral Resources of 155 million ounces.
- Dividend Policy: Management intends to pay out 25-35% of normalized earnings as dividends.
Material Changes
The primary material change is the structural separation of the company. Following the distribution, current Gold Fields shareholders now hold two separate securities: the original Gold Fields share and the newly distributed Sibanye Gold share. Consequently, Gold Fields' future financial results will no longer include the operations of Sibanye Gold. The upcoming Q4 and full-year 2012 financial results, to be released on Thursday, February 14, 2013, will represent the last reporting period to include Sibanye Gold operations.
Guidance, Outlook, and Management Commentary
CEO Nick Holland outlined a strategic shift for Gold Fields post-unbundling:
- Strategic Focus: The company will prioritize cash generation and costs associated with production rather than solely focusing on the volume of ounces produced.
- Investment Criteria: Priority will be given to low-risk, high-return brownfield opportunities. Greenfield projects will only be pursued if they offer superior returns, and M&A will be considered only where clear value regarding production exists.
- South Deep Project: The focus for 2013 is to move the South Deep project from the construction phase to ore body development and build-up.
- Balance Sheet: Management plans to leverage the balance sheet for growth on a per-share basis.
Investor Verification Checklist
- Verify the exact trading price and market capitalization of both Gold Fields and Sibanye Gold on the JSE and NYSE following the listing.
- Review the upcoming Q4 and full-year 2012 financial results to understand the final combined performance before the split.
- Monitor the progress of the South Deep project transition from construction to ore body development.
- Confirm the specific dividend payout ratio in the next earnings release against the stated 25-35% target.
- Assess the updated cost structure and cash flow generation capabilities of Gold Fields excluding the deep-level South African operations.