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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (6336)	2/3/2000 5:38:00 AM
From: re3	Read Replies (1) \| Respond to of 42523

GOLD results (from goldeagle): COMMENTARY Financial Earnings before exceptional items for the quarter were R212.5 million compared with R20.5 million in the previous quarter, a tenfold increase. The significant improvement is attributable to a higher gold price achieved during the quarter, a turnaround at Driefontein and lower working costs despite a five and a half per cent increase in total development metres advanced over the previous quarter. Earnings after exceptional items were R192.4 million compared with a loss of R88.0 million in the previous quarter, the results of which were distorted by the cost effects of the hedge repurchase and retrenchments. Exceptional items net of tax amount to R20.1 million and comprise mainly retrenchment costs. Revenue was higher than the previous quarter due to a realised gold price of R58 337 per kilogram (US$296 per ounce) compared with a realised gold price of R52 674 per kilogram (US$269 per ounce) achieved in the previous quarter. The decision in the previous quarter to close out all hedge positions, with the exception of approximately 200 000 ounces of forward sales commitments at Tarkwa and some call options held by Beatrix, has enabled the Group to take advantage of the higher gold price that prevailed during the quarter with the average spot price for the period being R58 249 per kilogram (US$296 per ounce). The realised gold price achieved for the quarter closely correlates with the average realised gold price that would have been achieved had the hedge positions not been bought back in the previous quarter. Despite higher production volumes, operating costs for the quarter declined by R25 million with most of the effect of this occurring at Kloof Company due to the impact of the Libanon downsizing in the previous quarter and a general cost saving drive across the Group. The tax charge for the quarter increased in line with higher earnings but was cushioned by the impact of the ruling from the South African Revenue Services that it would regard Oryx and Beatrix as one mine for income tax purposes as from 1 July 1999, the effective date of the merger of these operations. As a consequence, tax for the quarter was reduced by some R20 million. Another aspect of the ruling is that as from 1 July 1999, St Helena is regarded as a separate mine for income tax purposes. Operations Attributable gold produced in the December quarter was 990 000 ounces compared with 963 000 ounces in the previous quarter. Driefontein demonstrated a significant turnaround from the previous quarter by increasing its output by 1 162 kilograms without any increase in its working costs. The higher production arose from an increase in the underground grade from 10.1 grams per ton to 11.5 grams per ton due to improved mining efficiencies. Partially offsetting the improvement at Driefontein was a reduction of 662 kilograms at Leeudoorn due to a decline in both tons and grade. Kloof Division had a steady performance despite a small reduction in grade, whilst Libanon?s operating loss, at R7.3 million, was significantly lower than the previous quarter. Oryx?s production, although marginally higher than the previous quarter, is not yet at cash break-even levels due to a lack of available pay face. Tarkwa continues to show improvement and increased its production by eight per cent during the quarter. Outlook Key objectives for the following quarters are to improve productivity, mining flexibility and increase production volumes, particularly at the Group?s most significant operations, Kloof and Driefontein. In addition, efforts aimed at further reducing operating costs will be vigorously pursued. Initiatives have already commenced to identify areas for enhanced cost performance, as well as higher development metres to improve the ore reserve situation and improve environmental conditions. The Oryx mine, which is performing at unsatisfactory levels, is currently the subject of an intensive review to ascertain the best options to maximise value from this orebody. The results of this analysis will be concluded by the end of this quarter. Free State Reconstruction During the December quarter, the reconstruction of the Free State assets was completed whereby the remaining 45.8 per cent minority interest in St Helena was acquired in return for the issue of 4.4 million Gold Fields shares. This acquisition was deemed effective 1 July 1999. As a consequence of the restructuring, all the Group?s Free State assets are held in one legal entity, with St Helena having acquired the Beatrix mine and associated mineral rights as well as the Oryx mineral rights. New Business Eldorado Gold Corporation, a Toronto listed gold junior, in which the Group has a 39.6 per cent interest, recently completed an equity raising of C$8.55 million to be used for exploration and development of existing properties, particularly in Turkey, to fund capital expenditures at operations and for general corporate purposes. Gold Fields contributed C$1.44 million to such financing, and now owns approximately 37 per cent of Eldorado. Dividend The directors have declared an interim dividend of 20 cents per share, payable to shareholders registered at the close of business on 18 February 2000. Payments from the United Kingdom will be made in Sterling at the rate of exchange ruling on 10 March 2000. Dividend cheques will be posted on 24 March 2000. General The results for the quarter have been prepared on the international accounting standards basis. The detailed financial, operational and development results for the December 1999 quarter are submitted in this report. Chris Thompson Chairman and Chief Executive Officer Johannesburg 3 February 2000