GFI

Business Context and Reporting Period

Company: Gold Fields Limited (GFI)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Quarter and Year Ended 30 June 2007
Business Overview: Global gold mining company with operations in South Africa, Ghana, Australia, and Venezuela. The period included the consolidation of the South Deep acquisition and significant capital projects at Tarkwa, Driefontein, and Kloof.

Key Financial Metrics

Material Changes vs. Prior Period

• Profitability Surge: Full-year net earnings increased 53% (R2,363 million vs. R1,544 million) driven by a 51% increase in operating profit, despite a 1% decline in total gold production.
• Revenue Growth: Full-year revenue rose 35% in Rand terms, primarily due to a higher average gold price (US$638/oz vs. US$524/oz in 2006) which offset lower production volumes.
• Cost Inflation: Total cash costs increased 14% year-over-year to US$376/oz due to significant commodity price increases (fuel, steel, cyanide) and labor cost pressures.
• Quarterly Performance: Q2 2007 net earnings (R528 million) were significantly higher than Q1 2007 (R370 million), aided by a 3% production increase and improved gold prices.
• Accounting Policy Change: The company adopted a new policy capitalizing Ore Reserve Development (ORD) costs, resulting in a net credit to earnings of R39 million for the quarter.

Guidance, Outlook, and Risks

Management Commentary & Outlook

• Production Forecast: Gold production for the September 2007 quarter is forecast to be similar to the June quarter.
• Cost Outlook: Unit costs for the upcoming quarter depend on the outcome of wage negotiations at South African operations.
• Strategic Focus: Financial 2008 is designated as a year of consolidation, focusing on the South Deep transaction, bringing the Cerro Corona project into production, and addressing investments in Venezuela.
• Project Status: Cerro Corona (Peru) is on schedule for first concentrate shipment in March 2008. Growth projects at Tarkwa, Driefontein, and Kloof are underway.

Risks and Contingencies

• Safety Incidents: The June quarter recorded 11 fatal injuries (up from 6 in March), with Driefontein accounting for six. The fatality rate regressed to 0.26 per million man hours.
• Operational Disruptions: Choco 10 (Venezuela) faced production declines due to water shortages and a strike; Damang (Ghana) suffered mill downtime due to crusher failure.
• Input Costs: Ongoing pressure from rising global commodity prices and inflation (South African PPI up >11% YoY).
• Regulatory/Political: Risks associated with government regulations, particularly in Venezuela and South Africa, and potential social discontent at Cerro Corona as construction employment declines.

Investor Verification Checklist

• Wage Negotiations: Verify the outcome of South African wage negotiations, as this is a primary driver for future cost guidance.
• Safety Metrics: Monitor the effectiveness of the re-training and communication efforts at Driefontein to reverse the trend of fatal injuries.
• Cerro Corona Timeline: Confirm the project remains on schedule for the March 2008 concentrate shipment, noting the risk of tailings embankment delays.
• Choco 10 Water Permit: Track the status of the water extraction permit from the Yuruari River, which is critical for production recovery in Venezuela.
• South Deep Integration: Assess the realization of synergies and cost savings from the integration of the South Deep mine.