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Business News Fri, 31 Jan 2003

Gold Fields earnings rise 51%

Gold Fields, which reported net profit up 51% in the quarter ended December 31, expects to complete its feasibility study into what it called a "reconfiguration" of its Ghanaian Tarkwa gold project this quarter, with an investment decision expected to be made in March.

The company plans to rethink the long-term strategy for the development of the Tarkwa mine.

"At Tarkwa they will be looking at the feasibility of changing mainly the metallurgical process to accommodate any increase in tons, and improve metallurgical efficiency," said David Davis, a gold analyst at SCMB Securities.

Nick Holland, Gold Fields' chief financial officer, said changes to SA foreign exchange policy which allow SA companies to take R2bn out of SA for investment in new or existing operations anywhere in Africa without having to get the approval of the SA Reserve Bank were positive for the company.

As well as its organic growth projects across the group, Gold Fields is continuing with its exploration programme in Ghana and other areas.

"In Ghana we are at fairly advanced stages on our exploration projects and are exploring in several places around the world," said Ian Cockerill, Gold Fields' CEO. Gold Fields' organic growth programme continues and the company has R6,2bn worth of development underway focusing on its SA Beatrix, Driefontein and Kloof mines.

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Cockerill said the company was waiting to see the "scorecard", which would help determine how the SA government will measure empowerment participation in the SA mining sector, before the company entered into any major black empowerment transactions.

He said he was confident the projects the company was developing would be suitable for black economic empowerment.

"One could speculate a similar transaction to the one Harmony has entered into with Africa Vanguard Resources on the Doornkop project could be a considered at Gold Fields' Driefontein number 9 and 10 shafts," Davis said .

The company's net profit for the quarter ended December rose to R817m, or R1,73 a share, from R542m, or R1,15 a share. Revenue in the three months slipped to R3,6bn from R3,9bn in the quarter to the end of September as the stronger rand kicked in.

The higher earnings came as the world's fourth-largest gold producer made unrealised gains on currency positions lifted by the stronger Australian dollar.

Source: Business Day
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