Gold Fields gets a boost from S&P rating

March 20, 2009

Commodity Online
JOHANNESBURG: At a time when all the gold mining companies are reaping rich dividends from the gold rush witnessed across the globe, one company which attracts the attention of the whole world is Gold Fields Limited.

Gold Fields Limited is one of the world’s largest unhedged producers of gold with attributable production of 3,64 million ounces per annum from eight operating mines in South Africa, Ghana and Australia.

A ninth mine, Cerro Corona Gold/Copper mine in Peru, commenced production in August 2008 at an initial rate of approximately 375,000 gold equivalent ounces per annum.

The company has total attributable ore reserves of 83 million ounces and mineral resources of 251 million ounces. Gold Fields is listed on JSE Limited (primary listing), the New York Stock Exchange (NYSE) and the Dubai International Financial Exchange (DIFX), the New Euronext in Brussels (NYX) and Swiss Exchange (SWX).

So, investors are looking at this company as a good destination to put their money at the times of recession.

According to the company’s website, Gold Fields is intent on achieving outstanding returns for investors with motivated employees committed to optimising existing operations and aggressively pursuing and developing additional world-class deposits.

The company plans to become a leading, globally diversified, precious metals producer.

Even as the company strives to achieve its goals, this week, Gold Fields confirmed that Mvelaphanda Resources had taken receipt of its 15 per cent shareholding in Gold Fields’ SA operations, GFI Mining South Africa.

This follows the maturing of Gold Fields’ R4.1-billion black economic empowerment transaction with Mvela’s wholly owned subsidiary Mvelaphanda Gold.

Mvela Gold now owns about 7 per cent of the listed shares of Gold Fields Ltd while Gold Fields again owns 100 per cent of GFIMSA.

Gold Fields said the company is pleased that the transaction, which was based on fair value at a firm market price, has proven to be economically sensible and sustainable for existing Gold Fields shareholders, while creating significant real value for Mvela Resources shareholders, thus advancing black economic empowerment in South Africa.

This week, Standard and Poor's Ratings Services assigned Gold Fields with a 'BBB-/ A-3' long-term and short-term global corporate credit rating and 'zaA/zaA-1' long-term and short-term South Africa national scale corporate credit rating.

The long-term ratings reflect Gold Fields' satisfactory business risk and intermediate financial risk profiles while the short-term ratings reflect Gold Fields’ adequate liquidity.

The satisfactory business risk profile reflects Gold Fields' market position as the world`s fourth largest gold producer, an industry-leading long reserve life of over 20 years, healthy profitability underpinned by persistently strong gold prices.

The stable outlook reflects the expectation that Gold Fields will continue to report healthy cash flow generation, supported by ongoing strong gold prices and a weak exchange rate.

Paul Schmidt, Chief Financial Officer of Gold Fields, said: "The credit rating is an independent endorsement of Gold Fields as an investment grade company with a stable outlook. The rating further confirms aspects such as Gold Fields` sound corporate governance and risk management while aligning it with global best practice and its peers. Although the intention is to reduce debt over the next 18 months, an official credit rating will allow flexibility to efficiently structure long-term debt as well as new debt, should the need arise."

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