**As filed with the Securities and Exchange Commission on November 24, 2006**

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**Form 20-F**

**(Mark One)**

**o**                                    REGISTRATIONSTATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIESEXCHANGE ACT OF 1934

**or**

**x**                                  ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**For the fiscal year ended June 30, 2006**

**or**

**o**                                    TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**For the transition period from      ** to      

**or**

**o**                                    SHELLCOMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

**Date of event requiring this shell company report**

**For the transition period from      ** to      

**Commission file number: 1-31318**

**Gold FieldsLimited**

(Exact name of registrant as specified in its charter)

**Republic of SouthAfrica**

(Jurisdiction ofincorporation or organization)

**24 St. AndrewsRoad,Parktown, 2193South Africa011-27-11-644-2400**

(Address of principalexecutive offices)

Securities registered or to be registered pursuantto Section 12(b) of the Act:

| **Title of Each Class**                                           |   | **Name of Each Exchange on Which Registered** |
|-------------------------------------------------------------------|--------|-----------------------------------------------|
| Ordinary shares of par value Rand 0.50 each                       |   | New York Stock Exchange*                      |
| American  Depositary Shares, each representing one ordinary share |   | New  York Stock Exchange                      |

 

* Not for trading, but only in connection with the registration of theAmerican Depositary Shares pursuant to the requirements of the Securities andExchange Commission.

Securities registered or tobe registered pursuant to Section 12(g) of the Act:**None**

(Title of Class)

Securities for which there isa reporting obligation pursuant to Section 15(d) of the Act:**None**

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’sclasses of capital or common stock as of the close of the period covered by theAnnual Report:

494,824,723ordinary shares of par value Rand 0.50 each

Indicate by check mark if the registrant is a well-known seasonedissuer, as defined in Rule 405 of the Securities Act: Yes x No o

If this report is an annual or transition report, indicate by checkmark if the registrant is not required to file reports pursuant to Section 13or 15(d) of the Securities Exchange Act of 1934: Yes o  No x

Note—Checking the box above will not relieve any registrant required tofile reports pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed allreports required to be filed by Section 13 or 15(d) of the SecuritiesExchange of 1934 during the preceding 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days: Yes x No o

Indicate by check mark whether the registrant is a large acceleratedfiler, an accelerated filer, or a non-accelerated filer. See definition of“accelerated filer and large accelerated filer” in Rule 12b-2 of theExchange Act. (Check one):

Large accelerated filer x Accelerated filer o Non-accelerated filer o

Indicate by check mark which financial statement item the registranthas elected to follow: Item 17 o Item 18 x

If this is an annual report, indicate by check mark whether theregistrant is a shell company (as defined in Rule 12b-2 of the ExchangeAct): Yes o No x

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURINGTHE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documentsand reports required to be filed by Sections 12, 13 or 15(d) of theSecurities Exchange Act of 1934 subsequent to the distribution of securitiesunder a plan confirmed by a court: Yes o No o

 

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**The Worldwide Locations of Gold Fields’Operations**

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** **

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**Presentation ofFinancial Information**

Gold FieldsLimited, or Gold Fields or the Company, is a South African company and themajority of its operations, based on gold production, are located there.Accordingly, its books of account are maintained in South African Rand and itsannual and interim financial statements are prepared in accordance withInternational Financial Reporting Standards, or IFRS, as prescribed by law.Gold Fields also prepares annual financial statements in accordance with UnitedStates Generally Accepted Accounting Principles, or U.S. GAAP, which aretranslated into U.S. dollars. Except as otherwise noted, the financialinformation included in this annual report has been prepared in accordance withU.S. GAAP and is presented in U.S. dollars, and descriptions of criticalaccounting policies refer to accounting policies under U.S. GAAP.

For Gold Fields’financial statements, unless otherwise stated, balance sheet item amounts aretranslated from Rand to U.S. dollars at the exchange rate prevailing on thedate that it closed its accounts for fiscal 2006 (Rand 7.43 per $1.00 as of June 23,2006), except for specific items included within shareholders’ equity that aretranslated at the rate prevailing on the date the relevant transaction was enteredinto, and statement of operations item amounts are translated from Rand to U.S.dollars at the weighted average exchange rate for each period (Rand 6.40 per$1.00 for the year ended June 30, 2006).

In this annualreport, Gold Fields presents the financial items “total cash costs,” “totalcash costs per ounce,” “total production costs” and “total production costs perounce,” which have been determined using industry standards promulgated by theGold Institute and are not U.S. GAAP measures. The Gold Institute was anon-profit international industry association of miners, refiners, bullionsuppliers and manufacturers of gold products that ceased operation in 2002,which developed a uniform format for reporting production costs on a per ouncebasis. The Gold Institute has now been incorporated into the National MiningAssociation. The guidance was first adopted in 1996 and revised in November 1999.An investor should not consider these items in isolation or as alternatives toproduction costs, net income/(loss), income before tax, operating cash flows orany other measure of financial performance presented in accordance with U.S.GAAP. While the Gold Institute has provided definitions for the calculation oftotal cash costs and total production costs, the calculation of total cashcosts, total cash costs per ounce, total production costs and total productioncosts per ounce may vary significantly among gold mining companies, and bythemselves do not necessarily provide a basis for comparison with other gold miningcompanies. See “Key Information—Selected Historical Consolidated FinancialData,” “Information on the Company—Glossary of Mining Terms—Total cash costsper ounce” and “Information on the Company—Glossary of Mining Terms—Totalproduction costs per ounce.”

**Defined Termsand Conventions**

In this annualreport, all references to “South Africa” are to the Republic of South Africa,all references to “Ghana” are to the Republic of Ghana, all references to “Australia”are to the Commonwealth of Australia, all references to “Venezuela” are to theBolivarian Republic of Venezuela, all references to “Finland” are to theRepublic of Finland and all references to “Peru” are to the Republic of Peru.

This annualreport contains descriptions of gold mining and the gold mining industry,including descriptions of geological formations and mining processes. In orderto facilitate a better understanding of these descriptions, this annual reportcontains a glossary defining a number of technical and geological terms. See “Informationon the Company—Glossary of Mining Terms.”

In this annualreport, “R” and “Rand” refer to the South African Rand and “Rand cents” refersto subunits of the South African Rand, “$,” “US$” and “U.S. dollars” refer toUnited States dollars, “U.S. cents” refers to subunits of the U.S. dollar, “A$”and “Australian dollars” refer to Australian dollars, “C$” refers to Canadiandollars and “VEB” and “Bolivars” refer to Venezuelan bolivars.

In this annualreport, gold production figures are provided in troy ounces, which are referredto as “ounces” or “oz,” and ore grades are provided in grams per metric ton,which are referred to as “grams per ton” or “g/t.” All references to “tons” or “t”in this annual report are to metric tons. See “Information on 

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the Company—Glossaryof Mining Terms” for further information regarding units of measurement used inthis annual report and a table providing rates of conversion between differentunits of measurement.

In this annualreport, except where otherwise noted, all production and operating statisticsare based on Gold Fields’ total operations, which include production from theTarkwa and Damang mines in Ghana which is attributable to the minorityshareholders in those mines.

For theconvenience of the reader, certain information in this annual report presentedin Rand and Australian dollars has been translated into U.S. dollars. Unlessotherwise stated, the conversion rates for these translations are Rand 7.43 per$1.00 and A$1.00 per $0.733, which were the noon buying rates on June 23,2006. For Bolivars, the conversion rate is VEB 2,150 per $1.00, which was therate fixed by the Venezuelan government as of June 30, 2006. By includingconvenience currency translations, Gold Fields is not representing that theRand, Australian dollar or Bolivar amounts actually represent the U.S. dollaramounts shown or that these amounts could be converted into U.S. dollars at therates indicated.

**Information on South Deep and Western Areas**

This annual report contains certaininformation relating to Western Areas Limited, or Western Areas, and the SouthDeep gold mine, or South Deep, including information contained in “RiskFactors”, “Information on the Company,” “Operating and Financial Review andProspects” and “Additional Information.”

Thisinformation has been compiled from information published by Western Areas,including information filed with the JSE Limited, and certain due diligencematerials made available to Gold Fields by Western Areas and Barrick GoldCorporation, or Barrick, and has not been commented on by any representative ofWestern Areas or Barrick. Gold Fields has sought to ensure that the informationpresented has been accurately reproduced from these sources. However, GoldFields is otherwise unable to confirm that the information relating to WesternAreas and South Deep is in accordance with the facts and does not omit anythinglikely to affect the import of the information. See also “Risk Factors—Gold Fields has not independently confirmed the reliability of the SouthDeep or Western Areas information included in this annual report.”

**Forward-looking Statements**

This annualreport contains forward-looking statements with respect to Gold Fields’ financialcondition, results of operations, business strategies, operating efficiencies,competitive position, growth opportunities for existing services, plans andobjectives of management, markets for stock and other matters. Statements inthis annual report that are not historical facts are “forward-lookingstatements.”

These forward-looking statements, including, among others, thoserelating to the future business prospects, revenues and income of Gold Fields,wherever they may occur in this annual report and the exhibits to the annualreport, are necessarily estimates reflecting the best judgment of the seniormanagement of Gold Fields and involve a number of risks and uncertainties thatcould cause actual results to differ materially from those suggested by theforward-looking statements. As a consequence, these forward-looking statementsshould be considered in light of various important factors, including those setforth in this annual report. Important factors that could cause actual resultsto differ materially from estimates or projections contained in theforward-looking statements include, without limitation:

·       overalleconomic and business conditions in South Africa, Ghana, Australia, Venezuelaand elsewhere;

·       theability to achieve anticipated efficiencies and other cost savings inconnection with past and future acquisitions;

·       thesuccess of exploration and development activities;

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·       decreasesin the market price of gold;

·       theoccurrence of hazards associated with underground and surface gold mining;

·       theoccurrence of labor disruptions;

·       availability,terms and deployment of capital;

·       changes inrelevant government regulations, particularly environmental regulations andpotential new legislation affecting mining and mineral rights;

·       fluctuationsin exchange rates, currency devaluations and other macroeconomic monetarypolicies; and

·       politicalinstability in South Africa, Ghana, regionally in Africa or in Venezuela.

Gold Fieldsundertakes no obligation to update publicly or release any revisions to theseforward-looking statements to reflect events or circumstances after the date ofthis annual report or to reflect the occurrence of unanticipated events.

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**Tableof Contents**
| Contents                                                                               | ** ** | ** ** | ** ** | **Page** |
|----------------------------------------------------------------------------------------|------------|------------|------------|----------|
| PART  I                                                                                |       | 5          |       |
| ITEM 1: IDENTITY OF  DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                         |       | 5          |       |
| ITEM 2: OFFER STATISTICS AND  EXPECTED TIMETABLE                                       |       | 5          |       |
| ITEM 3: KEY INFORMATION                                                                |       | 5          |       |
| RISK FACTORS                                                                           |       | 9          |       |
| ITEM 4: INFORMATION ON THE  COMPANY                                                    |       | 32         |       |
| ITEM 4A: UNRESOLVED STAFF  COMMENTS                                                    |       | 125        |       |
| ITEM 5: OPERATING AND  FINANCIAL REVIEW AND PROSPECTS                                  |       | 126        |       |
| ITEM 6: DIRECTORS, SENIOR  MANAGEMENT AND EMPLOYEES                                    |       | 181        |       |
| ITEM 7: MAJOR SHAREHOLDERS  AND RELATED PARTY TRANSACTIONS                             |       | 207        |       |
| ITEM 8: FINANCIAL INFORMATION                                                          |       | 212        |       |
| ITEM 9: THE OFFER AND LISTING                                                          |       | 213        |       |
| ITEM 10: ADDITIONAL INFORMATION                                                        |       | 217        |       |
| ITEM 11: QUANTITATIVE AND  QUALITATIVE DISCLOSURES ABOUT  MARKET RISK                  |       | 238        |       |
| ITEM 12: DESCRIPTION OF  SECURITIES OTHER THAN EQUITY SECURITIES                       |       | 245        |       |
| PART II                                                                           |       | 246        |       |
| ITEM 13: DEFAULTS, DIVIDEND  ARREARAGES AND DELINQUENCIES                              |       | 246        |       |
| ITEM 14: MATERIAL  MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |       | 247        |       |
| ITEM 15: CONTROLS AND PROCEDURES                                                       |       | 248        |       |
| ITEM 16A: AUDIT COMMITTEE  FINANCIAL EXPERT                                            |       | 249        |       |
| ITEM 16B: CODE OF ETHICS                                                               |       | 250        |       |
| ITEM 16C: PRINCIPAL  ACCOUNTANT FEES AND SERVICES                                      |       | 251        |       |
| ITEM 16D: EXEMPTIONS FROM  THE LISTING STANDARDS FOR AUDIT COMMITTEES                  |       | 252        |       |
| ITEM 16E: PURCHASES OF  EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |       | 253        |       |
| PART III                                                                          |       | 254        |       |
| ITEM 17: FINANCIAL STATEMENTS                                                          |       | 254        |       |
| ITEM 18: FINANCIAL STATEMENTS                                                          |       | 255        |       |
| ITEM 19: EXHIBITS                                                                      |       | 256        |       |
| SIGNATURES                                                                             |       | 259        |       |

 

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**PART I**

**ITEM 1:IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not applicable.

**ITEM 2:OFFER STATISTICS AND EXPECTED TIMETABLE**

Not applicable.

**ITEM 3:KEY INFORMATION**

**Selected Historical Consolidated Financial Data**

The selected historicalconsolidated financial data set out below for each of the three years ended June 30,2006, and as of June 30, 2006 and 2005 have been extracted from the moredetailed information, including Gold Fields’ audited consolidated financialstatements for those years and as of those dates and the related notes, whichappear elsewhere in this annual report. The selected historical consolidatedfinancial data for each of the two years ended June 30, 2003, and as of June 30,2004, 2003 and 2002 have been derived from Gold Fields’ audited consolidatedfinancial statements as of that date, which are not included in this annualreport. The selected historical consolidated financial data presented belowhave been derived from financial statements which have been prepared inaccordance with U.S. GAAP.

| ** **                                                     | ** ** | **Year ended June 30,**                                          | ** **   |
|----------------------------------------------------------------|------------|---------------------------------------------------------------------------------|--------------|
| ** **                                                     | ** ** | **2002**                                                                        | ** **   | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| ** **                                                     | ** ** | **(in $ millions, except where otherwise noted)** | *** *** |
| **Statement  of Operations Data**                              | ** ** | ** **                                                                      | ** **   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Revenues(1)                                                    |       | 1,210.0                                                                         |         | 1,538.2 |   | 1,706.2 |   | 1,893.1 |   | 2,282.0 |   |
| Production costs (exclusive of depreciation and  amortization) |       | 710.0                                                                           |         | 1,015.0 |   | 1,355.2 |   | 1,500.6 |   | 1,621.6 |   |
| Depreciation and amortization                                  |       | 113.3                                                                           |         | 188.1 |   | 198.6 |   | 274.5 |   | 269.2 |   |
| Corporate expenditure                                          |       | 12.3                                                                            |         | 16.6 |   | 20.3 |   | 22.5 |   | 21.9 |   |
| Employment termination costs                                   |       | 6.4                                                                             |         | 3.8 |   | 10.5 |   | 13.7 |   | 9.1 |   |
| Exploration expenditure                                        |       | 16.5                                                                            |         | 29.6 |   | 39.9 |   | 46.0 |   | 39.3 |   |
| Impairment of assets                                           |       | —                                                                          |         | 29.6 |   | 72.7 |   | 233.1 |   | — |   |
| Impairment of critical spares                                  |       | —                                                                          |         | — |   | — |   | 2.8 |   | — |   |
| (Decrease)/increase in post-retirement healthcare  provision   |       | 6.6                                                                             |         | (5.0 | ) | (5.1 | ) | (4.2 | ) | (0.5 | ) |
| Accretion expense on  environmental rehabilitation             |       | 4.7                                                                             |         | 5.3 |   | 8.4 |   | 11.5 |   | 8.6 |   |
| Share-based compensation                                       |       | 4.8                                                                             |         | — |   | — |   | 2.1 |   | 11.5 |   |
| Harmony hostile bid costs                                      |       | —                                                                          |         | — |   | — |   | 50.8 |   | — |   |
| IAMGold transaction costs                                      |       | —                                                                          |         | — |   | — |   | 9.3 |   | — |   |
| Settlement costs of Oberholzer irrigation water  dispute       |       | (1.0                                                                            | )            | — |   | — |   | — |   | — |   |
| Interest and dividends                                         |       | 8.9                                                                             |         | (21.3 | ) | 19.4 |   | 29.2 |   | 26.8 |   |
| Finance income/(expense)                                       |       | 8.3                                                                             |         | 4.2 |   | (12.2 | ) | (54.9 | ) | (55.6 | ) |
| Unrealized gain on financial instruments                       |       | 45.9                                                                            |         | 35.7 |   | 39.2 |   | 4.9 |   | 14.6 |   |
| Realized gain/(loss) on financial instruments                  |       | 4.7                                                                             |         | 15.1 |   | (8.7 | ) | 2.1 |   | (9.1 | ) |
| Gain on disposal of St. Helena mine                            |       | —                                                                          |         | 13.4 |   | — |   | — |   | — |   |
| New York Stock Exchange listing and associated costs           |       | (4.3                                                                            | )            | — |   | — |   | — |   | — |   |
| Profit on sale of property, plant and equipment                |       | —                                                                          |         | — |   | 0.3 |   | 0.8 |   | 3.7 |   |
| Profit on disposal of listed investments                       |       | —                                                                          |         | 57.2 |   | 13.9 |   | 8.1 |   | 6.3 |   |
| Profit on disposal of exploration rights                       |       | —                                                                          |         | — |   | — |   | 7.5 |   | — |   |

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| Profit on disposal of mineral rights                                                                     |       | —     |       | —     |       | 27.1       |       | —     |       | —     |       |
|----------------------------------------------------------------------------------------------------------|------------|------------|------------|------------|------------|------------|------------|------------|------------|------------|------------|
| Write-down of investments                                                                                |       | —     |       | —     |       | —     |       | (7.7       | )          | —     |       |
| Write-down of mineral rights                                                                             |       | —     |       | —     |       | (3.6       | )          | —     |       | —     |       |
| Other income/(expenses)                                                                                  |       | 0.5        |       | 3.4        |       | 1.8        |       | (6.0       | )          | (16.5      | )          |
| Income/(loss) before tax, share of equity investees’  losses and minority interests            |       | 398.4      |       | 405.5      |       | 82.9       |       | (285.6     | )          | 271.5      |       |
| Income and mining tax (expense)/benefit                                                                  |       | (147.1     | )          | (133.8     | )          | (11.8      | )          | 100.4      |       | (97.3      | )          |
| Income/(loss) before share of equity investees’  losses and minority interests                      |       | 251.3      |       | 271.7      |       | 71.1       |       | (185.2     | )          | 174.2      |       |
| Share of equity investees’ losses                                                                   |       | —     |       | —     |       | (0.4       | )          | (0.4       | )          | (5.9       | )          |
| Minority interests                                                                                       |       | (12.2      | )          | (14.4      | )          | (21.8      | )          | (20.6      | )          | (29.8      | )          |
| Income/(loss) before cumulative effect of changes in  accounting principles                              |       | 239.1      |       | 258.3      |       | 48.9       |       | (206.2     | )          | 138.5      |       |
| Cumulative effect of changes in accounting  principles, net of tax                                  |       | —     |       | (1.3       | )          | —     |       | —     |       | —     |       |
| Net income/(loss)                                                                                        |       | 239.1      |       | 257.0      |       | 48.9       |       | (206.2     | )          | 138.5      |       |
| **Other Financial and Operating Data**                                                                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Basic (loss)/earnings per share before cumulative  effect of changes in accounting principles ($)   |       | 0.52       |       | 0.55       |       | 0.10       |       | (0.42      | )          | 0.28       |       |
| Diluted (loss)/earnings per share before cumulative  effect of changes in accounting principles ($) |       | 0.51       |       | 0.54       |       | 0.10       |       | (0.42      | )          | 0.28       |       |
| Basic earnings/(loss) per share ($)                                                                      |       | 0.52       |       | 0.54       |       | 0.10       |       | (0.42      | )          | 0.28       |       |
| Diluted earnings/(loss) per share ($)                                                                    |       | 0.51       |       | 0.54       |       | 0.10       |       | (0.42      | )          | 0.28       |       |
| Dividend per share (Rand)                                                                                |       | 1.30       |       | 3.70       |       | 1.40       |       | 0.70       |       | 0.80       |       |
| Dividend per share ($)                                                                                   |       | 0.13       |       | 0.39       |       | 0.19       |       | 0.11       |       | 0.13       |       |
| Total cash costs per ounce of gold produced($/oz)(1)                                                     |       | 170        |       | 212        |       | 302        |       | 331        |       | 366        |       |
| Total production costs per ounce of gold produced  ($/oz)(2)                                             |       | 198        |       | 254        |       | 349        |       | 393        |       | 428        |       |

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Notes:

(1)           Gold Fields has calculated total cash costs per ounceby dividing total cash costs, as determined using guidance provided by the GoldInstitute, by gold ounces sold for all periods presented. The Gold Institutewas a non-profit international industry association of miners, refiners,bullion suppliers and manufacturers of gold products that ceased operation in2002, which developed a uniform format for reporting production costs on a perounce basis. The Gold Institute has now been incorporated into the NationalMining Association. The guidance was first adopted in 1996 and revised inNovember 1999. Total cash costs, as defined in the Gold Institute industryguidance, are production costs as recorded in the statement of operations, lessoffsite (i.e. central) general and administrative expenses (including headoffice costs charged to the mines, central training expenses, industryassociation fees and social development costs), rehabilitation costs, plusroyalties and employee termination costs. Changes in total cash costs per ounceare affected by operational performance, as well as changes in the currencyexchange rate between the Rand, Australian dollar and the Bolivar, comparedwith the U.S. dollar. Management, however, believes that total cash costs perounce provides a measure for comparing Gold Fields’ operational performanceagainst that of its peer group, both for Gold Fields as a whole, and for itsindividual operations. Total cash costs and total cash costs per ounce are notU.S. GAAP measures. An investor should not consider total cash costs and totalcash costs per ounce in isolation or as an alternative to total productioncosts or net income/(loss), income before tax, operating cash flows or anyother measure of financial performance presented in accordance with U.S. GAAP.In particular, depreciation and amortization is included in a measure ofproduction costs under U.S. GAAP, but is not included in total cash costs underthe guidance provided by the Gold Institute. Furthermore, while the GoldInstitute has provided a definition for the calculation of total cash costs,the calculation of total cash costs per ounce may vary significantly among goldmining companies, and by itself does not necessarily provide a basis for comparisonwith other gold mining companies. See “Information on 

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the Company—Glossary ofMining Terms—Total cash costs per ounce.” For a reconciliation of Gold Fields’production costs to its total cash costs for fiscal 2006, 2005 and 2004, see“Operating and Financial Review and Prospects—Results of Operations—Years EndedJune 30, 2006 and 2005” and “Operating and Financial Review andProspects—Results of Operations—Years Ended June 30, 2005 and 2004.”

(2)           Gold Fields has calculated totalproduction costs per ounce by dividing total production costs, as determinedusing the guidance provided by the Gold Institute, by gold ounces sold for allperiods presented. Total production costs, as defined by the Gold Instituteindustry guidance, are total cash costs, as calculated using the Gold Instituteguidance, plus amortization, depreciation and rehabilitation costs. Changes intotal production costs per ounce are affected by operational performance, aswell as changes in the currency exchange rate between the Rand, Australiandollar and the Bolivar, compared with the U.S. dollar. Management, however,believes that total production costs per ounce provides a measure for comparingGold Fields’ operational performance against that of its peer group, both forGold Fields as a whole, and for its individual operations. Total productioncosts per ounce is not a U.S. GAAP measure. An investor should not considertotal production costs per ounce in isolation or as an alternative to totalproduction costs or net income/(loss), income before tax, operating cash flowsor any other measure of financial performance presented in accordance with U.S.GAAP. While the Gold Institute has provided a definition for the calculation oftotal production costs, the calculation of total production costs per ounce mayvary significantly among gold mining companies, and by itself does notnecessarily provide a basis for comparison with other gold mining companies.See “Information on the Company—Glossary of Mining Terms—Total production costsper ounce.” For a reconciliation of Gold Fields’ production costs to its totalproduction costs for fiscal 2006, 2005 and 2004, see “Operating and FinancialReview and Prospects—Results of Operations—Years Ended June 30, 2006 and2005” and “Operating and Financial Review and Prospects—Results ofOperations—Years Ended June 30, 2005 and 2004.”

| ** **                                      | ** ** | **Year ended June 30,**                                          | ** **   |
|-------------------------------------------------|------------|---------------------------------------------------------------------------------|--------------|
| ** **                                      | ** ** | **2002**                                                                        | ** **   | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| ** **                                      | ** ** | **(in $ millions, except where otherwise noted)** | *** *** |
| **Balance Sheet Data**                          | ** ** | ** **                                                                      | ** **   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Cash and cash equivalents                       |       | 195.1                                                                           |         | 133.6 |   | 656.3 |   | 503.7 |   | 217.7 |   |
| Current portion of financial instruments        |       | —                                                                          |         | — |   | 37.0 |   | 46.8 |   | 30.4 |   |
| Receivables                                     |       | 56.2                                                                            |         | 74.9 |   | 116.4 |   | 119.9 |   | 148.7 |   |
| Inventories                                     |       | 68.5                                                                            |         | 76.8 |   | 63.9 |   | 77.4 |   | 111.3 |   |
| Material contained in heap leach pads           |       | 45.0                                                                            |         | 41.8 |   | 42.5 |   | 55.1 |   | 47.7 |   |
| Total current assets                            |       | 364.8                                                                           |         | 327.1 |   | 916.1 |   | 802.9 |   | 555.8 |   |
| Property, plant and equipment, net(1)           |       | 1,726.9                                                                         |         | 2,231.0 |   | 2,805.5 |   | 2,554.1 |   | 3,018.5 |   |
| Non-current portion of financial instruments    |       | 46.2                                                                            |         | 67.7 |   | 70.3 |   | 32.4 |   | — |   |
| Non-current investments                         |       | 73.3                                                                            |         | 101.0 |   | 179.8 |   | 203.5 |   | 396.9 |   |
| Total assets                                    |       | 2,211.2                                                                         |         | 2,726.8 |   | 3,971.7 |   | 3,592.9 |   | 3,971.2 |   |
| Accounts payable and provisions                 |       | 153.3                                                                           |         | 184.7 |   | 273.4 |   | 241.9 |   | 299.9 |   |
| Interests payable                               |       | —                                                                          |         | — |   | 17.2 |   | 32.6 |   | 29.8 |   |
| Income and mining taxes payable                 |       | 44.5                                                                            |         | 52.0 |   | 14.2 |   | 18.0 |   | 46.8 |   |
| Current portion of long-term loans              |       | 37.0                                                                            |         | 20.5 |   | — |   | — |   | 0.3 |   |
| Total current liabilities                       |       | 234.8                                                                           |         | 257.2 |   | 304.8 |   | 292.5 |   | 376.8 |   |
| Long-term loans                                 |       | 145.0                                                                           |         | 21.1 |   | 643.2 |   | 653.1 |   | 737.9 |   |
| Deferred income and mining taxes                |       | 448.2                                                                           |         | 647.3 |   | 769.0 |   | 596.2 |   | 721.8 |   |
| Provision for environmental rehabilitation      |       | 58.8                                                                            |         | 99.2 |   | 116.0 |   | 134.6 |   | 146.4 |   |
| Provision for post-retirement healthcare  costs |       | 44.7                                                                            |         | 23.9 |   | 18.9 |   | 9.0 |   | 7.4 |   |
| Minority interests                              |       | 52.8                                                                            |         | 58.8 |   | 102.7 |   | 118.4 |   | 125.1 |   |
| Share capital                                   |       | 42.1                                                                            |         | 42.2 |   | 43.6 |   | 43.7 |   | 43.9 |   |
| Additional paid-in capital                      |       | 1,560.8                                                                         |         | 1,565.2 |   | 1,792.3 |   | 1,797.9 |   | 1,827.6 |   |
| Retained earnings                               |       | 182.6                                                                           |         | 255.3 |   | 211.6 |   | (49.1 | ) | 27.6 |   |
| Accumulated other comprehensive loss            |       | (556.8                                                                          | )            | (243.4 | ) | (30.4 | ) | (3.4 | ) | (43.3 | ) |
| Total shareholders’ equity                 |       | 1,226.9                                                                         |         | 1,619.3 |   | 2,017.1 |   | 1,789.1 |   | 1,855.8 |   |
| Total liabilities and shareholders’ equity |       | 2,211.2                                                                         |         | 2,726.8 |   | 3,971.7 |   | 3,592.9 |   | 3,971.2 |   |

 

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| ** **                                                                     | ** ** | **Year ended June 30**,                                          | ** ** |
|--------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------|------------|
| ** **                                                                     | ** ** | **2002**                                                                        | ** ** | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| ** **                                                                     | ** ** | **(in $ millions, except where otherwise noted)** | ** ** |
| **Other Data**                                                                 | ** ** | ** **                                                                      | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Number of ordinary shares as adjusted to reflect  changes in capital structure |       | 470,522,224                                                                     |       | 472,364,872 |   | 491,492,520 |   | 492,294,226 |   | 494,824,723 |   |
| Net assets                                                                     |       | 1,226.9                                                                         |       | 1,619.3 |   | 2,017.1 |   | 1,789.1 |   | 1,855.8 |   |

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Note:

(1)           Gold Fields changed its method ofaccounting for mineral and surface use rights during the 2004 fiscal year inaccordance with FASB Staff Position FAS 141-1, which required the balanceof the mineral interests and other intangible assets in 2002 and 2003 to berestated and included as part of Property, plant and equipment, net.

**Exchange Rates**

The following tables setforth, for the periods indicated, the average, high, low and period-end noonbuying rates in New York City for cable transfers in Rand as certified forcustoms purposes by the Federal Reserve Bank of New York, expressed in Rand per$1.00:

| **Year ended June 30,** | ** ** | ** ** | ** ** | **Average(1)** | ** ** | **High** | ** ** | **Low** | ** ** | **Period end** | ** ** |
|----------------------------------------|------------|------------|------------|----------------|------------|----------|------------|---------|------------|---------------------|------------|
| 2002                                   |       |       | 10.20      |           |       | 13.60    |       | 8.01    |       |                | 10.39      |   |   |
| 2003                                   |       |       | 8.87       |           |       | 10.90    |       | 7.18    |       |                | 7.51       |   |   |
| 2004                                   |       |       | 6.78       |           |       | 7.80     |       | 6.17    |       |                | 6.23       |   |   |
| 2005                                   |       |       | 6.20       |           |       | 6.92     |       | 5.62    |       |                | 6.67       |   |   |
| 2006                                   |       |       | 6.42       |           |       | 7.43     |       | 5.99    |       |                | 7.17       |   |   |
| 2007 (through  October 31, 2006)  |       |       | 7.32       |           |       | 7.94     |       | 6.72    |       |                | 7.39       |   |   |

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Note:

(1)           The average of the noon buying rates onthe last day of each full month during the relevant period.

| **Month ended**    | ** ** | ** ** | ** ** | **High** | ** ** | **Low** | ** ** | **Period end** | ** ** |
|-------------------------|------------|------------|------------|----------|------------|---------|------------|---------------------|------------|
| May 31, 2006       |       | 6.71       |       | 6.00     |       |    | 6.71       |                |       |
| June 30, 2006      |       | 7.43       |       | 6.63     |       |    | 7.17       |                |       |
| July 31, 2006      |       | 7.23       |       | 6.83     |       |    | 6.92       |                |       |
| August 31, 2006    |       | 7.20       |       | 6.72     |       |    | 7.20       |                |       |
| September 29, 2006 |       | 7.76       |       | 7.16     |       |    | 7.76       |                |       |
| October 31, 2006   |       | 7.94       |       | 7.39     |       |    | 7.39       |                |       |

 

The noon buying rate for the Rand on November 15,2006 was Rand 7.26 per $1.00. Fluctuations in the exchange rate between theRand and the U.S. dollar will affect the dollar equivalent of the price of theordinary shares on the JSE Limited, which may affect the market price of theAmerican Depositary Shares, or ADSs, on the New York Stock Exchange. Thesefluctuations will also affect the U.S. dollar amounts received by owners ofADSs on the conversion of any dividends paid in Rand on the ordinary shares.

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**RISK FACTORS**

*In addition to the other information included in thisannual report, the considerations listed below could have a material adverseeffect on Gold Fields’ business, financial condition or results of operations,resulting in a decline in the trading price of Gold Fields’ ordinary shares orADSs. The risks set forth below comprise all material risks currently known toGold Fields. However, there may be additional risks that Gold Fields does notcurrently know of or that Gold Fields currently deems immaterial based on theinformation available to it. These factors should be considered carefully,together with the information and financial data set forth in this document.*

***Changes in themarket price for gold, which in the past has fluctuated widely, affect theprofitability of Gold Fields’ operations and the cash flows generated by thoseoperations.***

Substantially allof Gold Fields’ revenues are derived from the sale of gold. Historically, themarket price for gold has fluctuated widely and has been affected by numerousfactors over which Gold Fields has no control, including:

·       thedemand for gold for industrial uses and for use in jewelry;

·       actual,expected or rumored purchases and sales of gold bullion holdings by centralbanks or other large gold bullion holders or dealers;

·       speculativetrading activities in gold;

·       theoverall level of forward sales by other gold producers;

·       theoverall level and cost of production by other gold producers;

·       internationalor regional political and economic events or trends;

·       thestrength of the U.S. dollar (the currency in which gold prices generally arequoted) and of other currencies;

·       financialmarket expectations regarding the rate of inflation; and

·       interestrates.

In addition, the current demand for and supply of goldaffect the price of gold, but not necessarily in the same manner as currentdemand and supply affect the prices of other commodities. Since the potentialsupply of gold is large relative to mine production in any given year, normalvariations in current production will not necessarily have a significant effecton the supply of gold or the gold price. Central banks, financial institutionsand individuals historically have held large amounts of gold as a store ofvalue, and production in any given year historically has constituted a smallportion of the total potential supply of gold. Historically, gold has tended toretain its value in relative terms against basic goods in times of inflationand monetary crisis.

On March 8, 2004, 15 European central banksentered into a new gold sales agreement effective September 27, 2004,pursuant to which they restrict their annual sales of gold to specified limits.This agreement will be reviewed in five years. Although the new agreement callsfor an increase in the amount of gold that can be sold by individual banks to500 tons per year, the effect on the market in terms of total gold sales isunclear.

While the aggregate effectof these factors is impossible for Gold Fields to predict, if gold pricesshould fall below Gold Fields’ cost of production and remain at such levels forany sustained period, Gold Fields may experience losses and may be forced tocurtail or suspend some or all of its operations and/or reduce capitalexpenditure. In addition, Gold Fields might not be able to recover any lossesit may incur during that period.

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***Because Gold Fields does not use commodity orderivative instruments to protect against low gold prices with respect to itsproduction, Gold Fields is exposed to the impact of any significant drop in thegold price.***

Unlike many other goldproducers, as a general rule Gold Fields sells its gold production atmarket prices. Gold Fields generally does not enter into forward sales,derivatives or other hedging arrangements to establish a price in advance forthe sale of its future gold production. In general, hedging reduces the risk ofexposure to volatility in the gold price. Hedging also enables a gold producerto fix a future price for hedged gold that generally is higher than the thencurrent spot price. To the extent that it does not generally use commodity orderivative instruments, Gold Fields will not be protected against decreases inthe gold price, and if the gold price decreases significantly, Gold Fields runsthe risk of reduced revenues in respect of gold production that is not hedged.See “Quantitative and Qualitative Disclosures About Market Risk.”

***Gold Fields’reserves are estimates based on a number of assumptions, any changes to whichmay require Gold Fields to lower its estimated reserves.***

The ore reserves stated inthis annual report represent the amount of gold that Gold Fields calculated, asof December 31, 2005, could be mined, processed and sold at pricessufficient to recover Gold Fields’ estimated future total costs of production,remaining investment and anticipated additional capital expenditures. Orereserves are estimates based on assumptions regarding, among other things, GoldFields’ costs, expenditures, prices and exchange rates, many of which arebeyond Gold Fields’ control. In the event that Gold Fields revises any of theseassumptions in an adverse manner, Gold Fields may need to revise its orereserves downwards. In particular, if Gold Fields’ production costs or capitalexpenditures increase, if gold prices decrease or if the Rand, Australiandollar or Bolivar strengthens against the U.S. dollar, a portion of GoldFields’ ore reserves may become uneconomical to recover, forcing Gold Fieldsto lower its estimated reserves. Gold Fields’ reported attributable gold orereserves were 62.8 million ounces for fiscal 2005 as compared to 63.1million ounces as of December 31, 2005. See “Information on the Company—Reservesof Gold Fields as of December 31, 2005.”

***To the extent thatGold Fields seeks to expand through acquisitions, it may experience problems inexecuting acquisitions or managing and integrating the acquisitions with itsexisting operations.***

In order to expandits operations and reserve base, Gold Fields may seek to make acquisitions ofselected precious metal producing companies or assets. Gold Fields’ success atmaking any acquisitions will depend on a number of factors, including, but notlimited to:

·       negotiatingacceptable terms with the seller of the business to be acquired;

·       obtainingapproval from regulatory authorities in South Africa and the jurisdiction ofthe business to be acquired;

·       assimilatingthe operations of an acquired business in a timely and efficient manner;

·       maintainingGold Fields’ financial and strategic focus while integrating the acquiredbusiness;

·       implementinguniform standards, controls, procedures and policies at the acquired business;and

·       tothe extent that Gold Fields makes an acquisition outside of markets in which ithas previously operated, conducting and managing operations in a new operatingenvironment.

Any problems experiencedby Gold Fields in connection with an acquisition as a result of one or more ofthese factors could have a material adverse effect on Gold Fields’ business,operating results and financial condition.

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***To the extent thatGold Fields seeks to expand through its exploration program, it may experienceproblems associated with mineral exploration or developing mining projects.***

In order to expand its operations and reserve base,Gold Fields may rely on its exploration program for gold and platinum groupmetals and its ability to develop mining projects. Exploration for gold andother precious metals is speculative in nature, involves many risks andfrequently is unsuccessful. Any exploration program entails risks relating tothe location of economic orebodies, the development of appropriatemetallurgical processes, the receipt of necessary governmental permits andregulatory approvals and the construction of mining and processing facilitiesat the mining site. Gold Fields’ exploration efforts may not result in thediscovery of gold or platinum group metal mineralization and any mineralizationdiscovered may not result in an increase of Gold Fields’ reserves. If orebodiesare developed, it can take a number of years and substantial expenditures fromthe initial phases of drilling until production commences, during which timethe economic feasibility of production may change. Gold Fields’exploration program may not result in the replacement of current productionwith new reserves or result in any new commercial mining operations. Also, tothe extent Gold Fields participates in the development of a project through ajoint venture, there could be disagreements or divergent interests or goalsamong the joint venture parties which could jeopardize the success of theproject.

In addition, significantcapital investment is required to achieve commercial production fromexploration efforts. There is no assurance that Gold Fields will have, or beable to raise, the required funds to engage in these activities or to meet itsobligations with respect to the exploration properties in which it has or mayacquire an interest.

***Due to the natureof mining and the type of gold mines it operates, Gold Fields faces a materialrisk of liability, delays and increased production costs from environmental andindustrial accidents and pollution.***

The business ofgold mining by its nature involves significant risks and hazards, includingenvironmental hazards and industrial accidents. In particular, hazardsassociated with Gold Fields’ underground mining operations include:

·       rockbursts;

·       seismicevents, particularly at the Driefontein and Kloof operations;

·       undergroundfires and explosions, including those caused by flammable gas;

·       cave-insor falls of ground;

·       dischargesof gases and toxic substances;

·       releasesof radioactivity;

·       flooding;

·       sinkholeformation and ground subsidence; and

·       otheraccidents and conditions resulting from drilling, blasting and removing and processingmaterial from an underground mine.

Hazards associatedwith Gold Fields’ open pit mining operations include:

·       floodingof the open pit;

·       collapsesof the open pit walls;

·       accidentsassociated with the operation of large open pit mining and rock transportationequipment;

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·       accidentsassociated with the preparation and ignition of large-scale open pit blastingoperations;

·       productiondisruptions due to weather; and

·       hazardsassociated with heap leach processing, such as groundwater and waterway contamination.

Hazardsassociated with Gold Fields’ rock dump and production stockpile mining andtailings disposal include:

·       accidentsassociated with operating a rock dump and production stockpile and rocktransportation equipment;

·       productiondisruptions due to weather;

·       collapsesof tailings dams; and

·       groundand surface water pollution, on and off site.

Gold Fields is at risk ofexperiencing any and all of these environmental or other industrial hazards.The occurrence of any of these hazards could delay production, increaseproduction costs and result in liability for Gold Fields.

***Gold Fields’ insurance coverage may prove inadequateto satisfy potential claims.***

Gold Fields may becomesubject to liability for pollution, occupational illnesses or other hazardsagainst which it has not insured or cannot insure, including those in respect ofpast mining activities. Gold Fields’ existing property and liabilityinsurance contains exclusions and limitations on coverage. In fiscal 2003,in an effort to reduce costs, Gold Fields changed from business interruptioninsurance cover based on gross profit to cover based on fixed operating costsor standing charges only. Should Gold Fields suffer a major loss, futureearnings could be affected. In addition, insurance may not continue to beavailable at economically acceptable premiums. As a result, in the future, GoldFields’ insurance coverage may not cover the extent of claims against GoldFields, including, but not limited to, claims for environmental or industrialaccidents, occupational illnesses or pollution.

***Because most ofGold Fields’ production costs are in Rand, Australian dollars and Bolivars,while gold is generally sold in U.S. dollars, Gold Fields’ operating results orfinancial condition could be materially harmed by an appreciation in the valueof the Rand, Australian dollar or Bolivar.***

Gold is sold throughout the world principally in U.S.dollars, but Gold Fields’ operating costs are incurred principally in Rand andAustralian dollars. As a result, any significant and sustained appreciation ofeither of these currencies against the U.S. dollar may materially increase GoldFields’ costs in U.S. dollar terms.

The Rand and theAustralian dollar each appreciated against the U.S. dollar during calendaryears 2002, 2003 and 2004, with the Rand appreciating by approximately28.5%, 22.2% and 15.6% in 2002, 2003 and 2004. In 2005, the Rand depreciated by12.1% against the U.S. dollar. The Australian dollar appreciated byapproximately 9.8%, 24.5% and 3.7% in 2002, 2003 and 2004, respectively, anddepreciated by 6.2% against the U.S. dollar in 2005. More recently, the Randhas depreciated against the U.S. dollar and may continue to depreciate but theAustralian dollar has experienced a period of appreciation against the U.S.dollar. From January 1, 2006 until October 31, 2006, the Randdepreciated by 16.4%, and the Australian dollar appreciated by 4.6%, againstthe U.S. dollar(1) Although the Bolivar foreign exchange rate is currentlyfixed by the Venezuelan government and has been stable since March 2005 atVEB 2,150 to $1.00, historically the Bolivar usually devalues against the U.S.dollar. An appreciation trend for either 

----

(1)           Source for ZAR/USD and AUD/USD: Datastream

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the Rand, Australiandollar or Bolivar could have a material adverse effect on Gold Fields’operating results or financial condition, as the appreciation would result inan increase to Gold Fields’ costs in U.S. dollar terms. See “Quantitativeand Qualitative Disclosures About Market Risk—Foreign Currency Sensitivity” and“Operating and Financial Review and Prospects—Venezuela—Exchange Rates.”

***Economic orpolitical instability in the countries or regions where Gold Fields’ operatesmay have an adverse effect on Gold Fields’ operations and profits.***

Gold Fields has significant operations in SouthAfrica, Ghana, Australia and Venezuela, and a significant development projectin Peru. As a result, changes or instability to the economic or politicalenvironment in any of these countries or in neighboring countries could affectan investment in Gold Fields.

Several of these countries have, or have had in therecent past, high levels of inflation. Continued or increased inflation in anyof the countries where it operates could increase the prices Gold Fields paysfor products and services, including wages for its employees, which if notoffset by increased gold prices or currency devaluations could have a materialadverse effect on Gold Fields’ financial condition and results of operations.

Recently, South African inflation and unemploymenthave been high by comparison with developed countries, and foreign reserveshave been relatively low. The prime lending rate has also been high in recentyears by comparison with developed countries, although it has decreasedsubstantially since it peaked at approximately 25.5% during 1998 and on October 31,2006 the rate was 12.0%. Consequently, Gold Fields could face a high cost ofcapital should it borrow in South Africa.

In Venezuela, the rate of economic growth, the levelof tax revenue, government spending and government borrowing and the supply offoreign currency are materially affected by oil prices and general conditionsin the international petroleum markets, because of the dominance of thepetroleum industry. Thus, a future downturn in the international petroleummarket may have a material adverse effect on the Venezuelan economy whichcould, in turn, have a material adverse effect on Gold Fields’ financialcondition and results of operations.

Large parts of the South African population do nothave access to adequate education, healthcare, housing and other services,including water and electricity. Although the South African government hasimplemented laws aimed at alleviating and redressing the disadvantages sufferedby citizens under previous governments and Gold Fields believes it is incompliance with its obligations under them and intends to remain so, in thefuture the South African government may implement new laws and policies, whichin turn may have an adverse impact on Gold Fields’ operations and profits. Inrecent years, South Africa has experienced high levels of crime andunemployment. These problems may have impacted fixed inward investment intoSouth Africa and have prompted emigration of skilled workers. As a result, GoldFields may have difficulties attracting and retaining qualified employees.

There has been regional political and economicinstability in the countries surrounding South Africa. Any similar political oreconomic instability in South Africa could have a negative impact on GoldFields’ ability to manage and operate its South African operations.

Ghana has had periods of political instability and maybe subject to instability again in the future. Since the present government cameinto power in 2000, it has passed legislation imposing a tax and import dutywhich has affected the mining industry. The Ghana Chamber of Mines, of whichGold Fields Ghana Limited and Abosso Goldfields Limited, subsidiaries of GoldFields, are members, has expressed its concern to the government that theselegislative measures have eroded the competitiveness of the fiscal regimeaffecting mining companies in Ghana. The current government or a futuregovernment might adopt additional changes to policies in the future, whichcould: (1) modify the regulatory or fiscal regime governing miningcompanies in Ghana, such as increasing the proportion of foreign currencyearnings that 

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mining companies are required to repatriate to Ghanaor (2) otherwise make investments or foreign-owned operations in Ghanaless attractive. Any departure from current policies by the government of Ghanacould have a material adverse effect on Gold Fields’ business, operatingresults and financial condition. See “Operating and Financial Review andProspects—Income and Mining Taxes—Ghana.”

In the past several years, Venezuela has experiencedintense political and social turmoil involving groups that oppose and thosethat support the administration of President Hugo Chávez. Under the presentadministration, there have been several national strikes, which have beenaccompanied by increased capital flight, loss of bank deposits, reduced taxrevenues and, at times, violence. The most recent of the strikes began in December 2002and ended in February 2003, halting a substantial part of the operationsof many Venezuelan state-owned companies, including the state-owned oilcompany, Petróleos de Venezuela, S.A., or PDVSA. The strike also resulted inwork stoppages in the private sector. The strike lasted for two months andhad a significant political, economic and social impact in Venezuela.

Venezuela’s political instability has had seriouseffects on the performance of its economy, with a sharp drop in investment anda general recession in 2002. The work stoppage adversely affected PDVSA’sability to make royalty and tax payments to the Venezuelan government, whichseverely affected the government’s public finances as the petroleum industry iscentral to and dominates the Venezuelan economy. The next presidentialelections are scheduled for December 3, 2006, and the political andeconomic impact of these elections is uncertain. There can be no assurance thatthere will not be further economic or political instability in Venezuela, as aconsequence of the election results or otherwise. Economic or politicalinstability in Venezuela could have a material adverse effect on Gold Fields’financial condition and results of operations.

Presidential electionswere held in Peru in June 2006. The losing candidate has indicated that hewill not cooperate with the new administration and that he and his supporterswill continue to oppose the policies of the government. It is not clear whatform this opposition may take, but any protests against the government couldlead to public strikes, demonstrations and civil disobedience, which could havea material adverse effect on the Peruvian economy and cause material disruptionto Gold Fields activities in Peru. In addition, there has been local oppositionto mine development projects in Peru. Notwithstanding the fact that Gold Fieldsis substantially exceeding commitments it had made to the communities, in mid-October 2006there was an illegal blockade of the access road to the Cerro Corona Projectsite resulting in a temporary suspension of construction activities at the sitefor seven days. The blockade was accompanied by demands for increasedemployment from local communities and increased use of local contractors. Inaddition, the Cerro Corona site is located near the Yanacocha mine which isoperated by another company. The Yanacocha mine has also been the subject oflocal protests, including ones that blocked the road between the Yanacocha minecomplex and the City of Cajamarca, which also affected access to the CerroCorona site, although they did not result in a suspension of constructionactivities. If Gold Fields experiences further opposition in connection withits operations in Peru, or if protests aimed at other mining operations affectoperations at Cerro Corona, it could have a material adverse effect on GoldFields’ financial condition and results of operations.

***Actual andpotential shortages of production inputs may have an adverse effect on GoldFields’ operations and profits.***

Gold Fields’ results of operations may be affected bythe availability and pricing of raw materials and other essential productioninputs, including fuel, steel and cyanide and other reagents. The price of rawmaterials may be substantially affected by changes in global supply and demand,along with weather conditions, governmental controls and other factors. Asustained interruption on the supply of any of these materials would requireGold Fields to find substitute suppliers acceptable to the Company and couldrequire it to pay higher prices for such materials. Any significant increase inthe prices of these materials will increase the Company’s operating costs andaffect production considerations.

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Gold Fields Ghana, among other miningcompanies in Ghana, was asked by its electricity supplier, the Volta RiverAuthority, or VRA, on August 14, 2006 to immediately reduce itselectricity demand by 25%. On August 28, 2006, Gold Fields was askedto reduce its demand by a further 25%. The VRA requested these reductions inelectricity usage largely because of the low water reservoir level of the VRA’sAkosombo generating facility and concerns about its ability to meet futuresupply and demand at present consumption levels. The Ghanaian Chamber of Minesis working closely with the VRA to maximize current power generating capacityand on installing additional capacity. Gold Fields Ghana has agreed to reduceits demand for electricity from the VRA at the Tarkwa and Damang operations andplans to use emergency diesel powered generators situated at both mines to makeup the difference. Gold Fields estimates that its quarterly operating costswill rise by approximately US$4 million as a result of the need to use the dieselgenerators. The VRA has indicated that the requirement for reduced electricitydemand will last until the water levels in the reservoir have reachedappropriate levels. However, there can be no assurance that Gold Fields willnot be asked to further reduce its demand or that there will not be newdisruptions to the electricity supply. Moreover, for as long as Gold Fields hasto use the diesel generators at its Tarkwa and Damang operations, it will havean increased exposure to fluctuations in the price of diesel fuel.

Giant tires, of the typeused by Gold Fields for its large earthmoving equipment and trucks, are inincreasingly short supply, and prices have risen recently and may continue torise in the future. This shortage of tires for earthmoving vehicles is causingmining companies to review operating practices, to seek additional methods ofpreserving tire life and to examine alternative sources of tire supply. To theextent that Gold Fields is unable to procure an adequate supply of these tires,it may have to alter its mining plans, especially at its open pit operations,which could reduce its gold production and have a material adverse effect onGold Fields’ business, operating results and financial condition.

***Gold Fields’ financial flexibility could be materiallyconstrained by South African exchange control regulations.***

South Africa’s exchange control regulations restrictthe export of capital from South Africa, the Republic of Namibia, and theKingdoms of Lesotho and Swaziland, known collectively as the Common MonetaryArea. Transactions between South African residents (including companies) andnon-residents of the Common Monetary Area are subject to exchange controlsenforced by the South African Reserve Bank, or SARB. As a result, Gold Fields’ability to raise and deploy capital outside the Common Monetary Area isrestricted.

Under South Africanexchange control regulations, Gold Fields must obtain approval from the SARBregarding any capital raising involving a currency other than the Rand. Forexample, in connection with its approval, it is possible that the SARB mayimpose conditions on Gold Fields’ use of the proceeds of any such capitalraising, such as limits on Gold Fields’ ability to retain the proceeds of thecapital raising outside South Africa or requirements that Gold Fields seekfurther SARB approval prior to applying any such funds to a specific use. Theserestrictions could hinder Gold Fields’ financial and strategic flexibility,particularly its ability to fund acquisitions, capital expenditures andexploration projects outside South Africa. See “Information on the Company—Regulatoryand Environmental Matters—South Africa—Exchange Controls.”

***An acquisition ofshares in or assets of a South African company by a non-South African purchaserthat is subject to exchange control regulations may not be granted regulatoryapproval.***

In some circumstances,potential acquisitions of shares in or assets of South African companies bynon-South African resident purchasers are subject to review by the SARBpursuant to South African exchange control regulations. In 2000, the SouthAfrican Treasury, or the Treasury, refused to approve an acquisition of GoldFields by Franco-Nevada Mining Corporation Limited, a Canadian mining company.The Treasury may refuse to approve similar proposed acquisitions of Gold Fieldsin the future. As a result, 

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Gold Fields’ managementmay be limited in its ability to consider strategic options and Gold Fields’shareholders may not be able to realize the premium over the current tradingprice of Gold Fields’ ordinary shares which they might otherwise receive uponsuch an acquisition. See “Information on the Company—Regulatory andEnvironmental Matters—South Africa—Exchange Controls.”

***Exchange controlsand devaluation of the VEB in Venezuela could have a material adverse effect onthe financial condition of Gold Fields.***

On January 21, 2003, the Venezuelan governmentsuspended the trading of foreign currencies in Venezuela. On February 5,2003, the Venezuelan government and the Venezuelan Central Bank, or CentralBank, adopted a series of exchange agreements, decrees and regulationsestablishing a new exchange control system. The exchange control systemcentralized the purchase and sale of foreign currencies in the Central Bank.The Ministry of Finance, together with the Central Bank, is in charge ofsetting the official exchange rate with respect to the U.S. dollar and othercurrencies. A commission, referred to as the Comisión de Administración deDivisas, or CADIVI, was created in 2003 for the administration, control andestablishment of the new exchange control system, including Venezuela’sofficial foreign exchange rate system.

Private sector entities must request approval fromCADIVI for, among other things, the purchase of foreign currency for theremittance of dividends, capital gains and interest derived from foreigninvestments and for foreign currency payments derived from service andtechnology agreements, royalties and other payments derived from the use ofindustrial and intellectual property rights. In order to seek the approval, anentity must first be registered with the Registro de Usuarios del Sistema deAdministración de Divisas, or RUSAD, and comply with a series of additionalrequirements. Obtaining approval from CADIVI can take a considerableamount of time, and there is no guarantee that CADIVI will approve anyparticular request. To the extent that Gold Fields does not receive approval ofits requests to acquire foreign currency on a timely basis, or at all, it wouldbe forced to obtain foreign currency in the unofficial market at less favorableexchange rates.

Under the exchange control system, CADIVI will approvethe acquisition of foreign currency at the official exchange rate to repayforeign debt only if the debt is registered pursuant to regulations promulgatedby CADIVI. Currently, there are only regulations for the registration offoreign bank debt. There are no regulations for the registration of foreignnon-bank debt. Therefore, any non-bank debt, including loans from affiliatedcompanies or shareholders, must be repaid using currency acquired at unofficialor parallel market exchange rates. If Gold Fields is not able to meet itsborrowing requirements at its Venezuelan operations through the use of bankdebt eligible for registration, it may be forced to repay any foreign debtusing currency acquired at less favorable unofficial or parallel exchangerates, which could have a material adverse effect on its financial conditionand results of operations.

In addition, under the current exchange control systemin Venezuela, all foreign currency derived from the exports of goods, servicesor technology must be converted to Bolivars via the Central Bank at theofficial exchange rate. Therefore, to the extent Gold Fields exports its goldproduced in Venezuela, all foreign currency derived from those sales must beconverted into Bolivars at the official exchange rate. As a result, Gold Fieldscannot use those revenues to meet payment obligations outside Venezuela unlessit receives approval from CADIVI to re-convert them into foreign currency or itdecides to re-convert them at the less favorable unofficial rate.

Since the establishment of the exchange control systemin early 2003, the Bolivar no longer floats against the U.S. dollar. Instead,the exchange rate is fixed by the Central Bank. Since the initial rate wasfixed, the Central Bank has reset the rate several times to devalue theBolivar. If the devaluation tendency of the Bolivar continues, delays from CADIVIin granting authorizations to purchase U.S. dollars may mean that 

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Gold Fields has to convert Bolivars at lower exchangerates which could have an adverse effect on Gold Fields’ financial position.

Promotora Minera deVenezuela (PMG) S.A., or PMG, the Gold Fields subsidiary which operates theChoco 10 mine, has not historically sold any foreign currency derived from itsgold exports to the Central Bank, as until October 2006 its gold exportswere used only for the direct repayment of foreign debt rather than being sold.These payments have been supported under several agreements entered intobetween PMG and other foreign affiliates of Gold Fields, while they were underthe administration of Bolivar. On May 16, 2006, PMG presented anadministrative opinion request to CADIVI, in order to verify the validity ofthe agreements and PMG’s position that the value of those exports was notsubject to repatriation or conversion under the current foreign exchangecontrol system. A response is expected from the CADIVI in due course. If CADIVIdoes not agree with PMG’s position, it could deny the validity of theagreements and condition PMG’s future exports and access to foreign currency onthe repatriation and conversion of the foreign currency attributable to thoseprior exports. In addition, pursuant to the Law Against Illicit ExchangeTransactions, PMG could also be subject to fines ranging from one to two timesthe amount of the currency that PMG did not sell. See “Information on theCompany—Regulatory and Environmental Matters—Venezuela—Exchange Controls.”

***Gold Fields’operations and financial condition may be adversely affected by labor disputesor changes in South African, Ghanaian, Australian and Venezuelan labor laws.***

As of June 30, 2006, approximately 77% of GoldFields’ employees belonged to unions. Accordingly, Gold Fields is at risk ofhaving its production stopped due to strikes called by unions and other labordisputes. In August 2005, Gold Fields experienced a 48-hourunexpected strike by approximately half the employees of the Tarkwa mine inGhana. In South Africa, Gold Fields also experienced a one-day illegal strikeon March 30, 2005, and a four-day industry-wide gold mining wage strike inAugust 2005. See “Directors, Senior Management and Employees—Employees—LaborRelations—South Africa” and “Directors, Senior Management and Employees—Employees—LaborRelations—Ghana.” In South Africa, in addition to strikes, on occasionGold Fields experiences work stoppages based on national trade union “stayaway” days, regardless of the state of its relations with its workforce.Significant labor disruptions at any of Gold Fields’ operations could have anadverse effect on Gold Fields’ business, operating results and financialcondition.

Gold Fields’ operating environment may also beaffected by certain labor laws. Since 1995, South African laws relating tolabor have changed significantly in ways that affect Gold Fields’ operations.Laws enacted since then impose monetary penalties for non-compliance with theadministrative and the reporting requirements in respect of affirmative actionpolicies, and there may be further changes in labor law in South Africa overthe next few years, which may have an adverse effect on Gold Fields’ business,operating results and financial condition.

Ghanaian law contains broad provisions requiringmining companies to recruit and train Ghanaian personnel and to use theservices of Ghanaian companies. Any expansion of these provisions whichincreases labor costs in Ghana could have a material adverse effect on GoldFields’ mining operations in Ghana and, accordingly, on Gold Fields’ business,operating results and financial condition.

The Venezuelan OrganicLabor Law and related regulations and social benefits laws impose statutoryduties and taxes on companies doing business in Venezuela. Most of theprovisions of these laws establish minimum benefits and in practice mostbenefits are improved by collective bargaining agreements, or CBAs. On February 15,2005, while under the control of Bolivar, PMG entered into a CBA, under whichit provides benefits beyond those required by law for its employees, includingpayment for health and life insurance, a savings scheme and provision oftransport. Gold Fields, as an employer engaged in mining activities, haspotential liability arising from injuries to, or deaths of, workers, includingworkers employed 

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by its contractors. Inrecent years, the Venezuelan government has implemented stricter labor laws andincreased worker rights and there can be no assurance that the Venezuelangovernment will not implement additional labor restrictions or further increaseworker rights in the future. See “Directors, Senior Management and Employees—Employees—LaborRelations—Venezuela.”

***Gold Fields maysuffer adverse consequences as a result of its reliance on outside contractorsto conduct its operations in Ghana and Australia.***

A significantportion of Gold Fields’ operations at the Damang mine in Ghana and in Australiaare currently conducted by outside contractors. As a result, Gold Fields’operations at those sites are subject to a number of risks, some of which areoutside Gold Fields’ control, including:

·       negotiatingagreements with contractors on acceptable terms;

·       theinability to replace a contractor and its operating equipment in the event thateither party terminates the agreement;

·       reducedcontrol over those aspects of operations which are the responsibility of thecontractor;

·       failureof a contractor to perform under its agreement with Gold Fields;

·       interruptionof operations in the event that a contractor ceases its business due toinsolvency or other unforeseen events;

·       failureof a contractor to comply with applicable legal and regulatory requirements, tothe extent it is responsible for such compliance; and

·       problemsof a contractor with managing its workforce, labor unrest or other employmentissues.

In addition, Gold Fieldsmay incur liability to third parties as a result of the actions of itscontractors. The occurrence of one or more of these risks could have a materialadverse effect on Gold Fields’ business, results of operations and financialcondition. See “Directors, Senior Management and Employees—Employees—LaborRelations—Ghana” and “Directors, Senior Management and Employees—Employees—LaborRelations—Australia.”

***Gold Fields’ SouthAfrican operations may be adversely affected by increased labor costs at itsmining operations in South Africa.***

Wages and related laborcosts accounted for approximately 55% of Gold Fields’ total production costs infiscal 2006. Accordingly, Gold Fields’ costs may be materially affected byincreases in wages and related labor costs, particularly with respect to GoldFields’ South African employees, who are unionized. Negotiations with SouthAfrican unions concluded in August 2005 resulted in above inflation wageincreases ranging from 6.0% to 7.0%, depending upon the category of employees.Under the agreement, wage increases for South African employees will be linkedto inflation with a minimum increase of 5.5% or 6.0%, depending upon thecategory of employees. The next round of negotiation with the South Africanunions is expected to take place prior to June 2007, when the currentagreement expires. See “Directors, Senior Management and Employees—Employees—LaborRelations—South Africa.” If Gold Fields is unable to increase production levelsor implement cost cutting measures to offset these increased wages and laborcosts, these costs could have a material adverse effect on Gold Fields’ miningoperations in South Africa and, accordingly, on Gold Fields’ business,operating results and financial condition. See “Directors, Senior Managementand Employees—Employees—Labor Relations—South Africa.”

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***HIV/AIDS poses risks to Gold Fields in terms of lostproductivity and increased costs.***

The prevalence of HIV/AIDSin South Africa, which is forecast to increase over the next decade, posesrisks to Gold Fields in terms of potentially reduced productivity and increasedmedical and other costs. Gold Fields’ current estimate is that the prevalenceof HIV within the Company will peak in approximately 2010 and the prevalence ofAIDS within the Company will peak in approximately 2013. This estimate of thepotential impact of HIV/AIDS on operations and financial condition is based ona variety of existing data and certain assumptions, including the incidence ofHIV infection among its employees, the progressive impact of HIV/AIDS oninfected employees’ health, and the medical and other costs associated with theinfection, most of which involve factors beyond Gold Fields’ control. ShouldGold Fields’ actual experience significantly differ from the assumptions onwhich its current estimate is based, the actual impact of HIV/AIDS on itsbusiness, operating results and financial condition could be significantlyworse than Gold Fields expects. See “Directors, Senior Management and Employees—Employees—Healthand Safety—Health—HIV/AIDS Program.”

***Gold Fields’operations in South Africa are subject to environmental regulations which couldimpose significant costs and burdens.***

Gold Fields’ South African operations are subject tovarious environmental laws and regulations including, for example, thoserelating to waste treatment, emissions and disposal, and must comply withpermits or standards governing, among other things, tailings dams and wastedisposal areas, water consumption, air emissions and water discharges. GoldFields may, in the future, incur significant costs to comply with the SouthAfrican environmental requirements imposed under existing or new legislation,regulations or permit requirements or to comply with changes in existing lawsand regulations or the manner in which they are applied. Also, Gold Fields maybe subject to litigation and other costs as a result of environmental rights grantedto individuals under South Africa’s Constitution or other sources of rights.These costs could have a material adverse effect on Gold Fields’ business,operating results and financial condition.

South African mining companies are required by law toundertake rehabilitation works as part of their ongoing operations. Inaddition, during the operational life of their mines, they must makearrangements to fund the cost of mine closure and post-closure rehabilitationand monitoring once mining operations cease. Gold Fields fully provides forthese environmental rehabilitation costs in its financial statements based onthe present value of future costs and funds these costs by making contributionsinto an environmental trust fund, with amounts approved by the authorities. Asof September 30, 2006, Gold Fields had contributed a total ofapproximately Rand 500.1 million, including accrued interest, to the fund.

On July 3, 2006, newenvironmental impact assessment regulations were promulgated under the NationalEnvironmental Management Act. To the extent that the new regulations arespecifically directed at mining operations, they will only become effective in2007. The new regulations introduce a fundamental change in this area of lawfor the mining sector. Previously the Department of Minerals and Energy hadprimary responsibility for authorizing the environmental impacts of miningoperations, although other departments played a secondary role in approvingcertain aspects of mining-related activities. Under the new regulations, theDepartment of Environmental Affairs will play a greater role in theenvironmental impact assessment decision-making process. The new regulationsintroduce a more complex South African regime for environmental impactassessments that includes a two-tiered assessment process. When the newregulations become effective as to mining operations, they will impact onreconnaissance, exploration, prospecting and mining activities, as currentlydefined in the Minerals and Petroleum Resources Development Act. This willresult in more stringent requirements in obtaining environmental approval fornew mining activities and, potentially, in the case of recommissioning oldoperations, which could increase Gold Fields’ costs for obtaining the approvals.In addition, to the extent that the new regulations may be interpreted ashaving any retroactive effect, Gold Fields may need to implement correctiveactions or may 

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be faced with nominalfines. Other changes in legislation or regulations (or the approach toenforcement of them) or other unforeseen circumstances may materially andadversely affect Gold Fields’ future environmental expenditures or the leveland timing of Gold Fields’ provisioning for these expenditures. See “Informationon the Company—Regulatory and Environmental Matters—South Africa—Environmental.”

***Gold Fields’ operations in South Africa are subject tohealth and safety regulations which could impose significant costs and burdens.***

The present Mine Healthand Safety Act 29 of 1996, or the Mine Health and Safety Act, came into effectin January 1997. The principal objective of the Mine Health and Safety Actis to improve health and safety at South African mines and, to this end, theMine Health and Safety Act imposes various duties on Gold Fields at its mines,and grants the authorities broad powers to, among other things, close unsafemines and order corrective action relating to health and safety matters. See “Informationon the Company—Regulatory and Environmental Matters—South Africa—Health andSafety.”

The Occupational Diseasesin Mines and Works Act 78 of 1973, or the Occupational Diseases Act, governsthe payment of compensation and medical costs related to certain illnessescontracted by persons employed in mines or at sites where activities ancillaryto mining are conducted. Occupational healthcare services are made available byGold Fields to employees from its existing facilities. Pursuant to changes inthe Occupational Diseases Act, Gold Fields may experience an increase in thecost of these services, which could have an adverse effect on Gold Fields’business, operating results and financial condition. This increased cost,should it transpire, is currently indeterminate.

***Gold Fields’ mineral rights in South Africa havebecome subject to new legislation which could impose significant costs andburdens.***

*The New Minerals Act*

The Mineral and PetroleumResources Development Act 2002, or the New Minerals Act, came into effect on May 1,2004. The New Minerals Act contains a provision requiring the Minister ofMinerals and Energy, or the Minister, within six months of the relevantprovision becoming operational, to develop a broad-based socio-economicempowerment charter for effecting entry of historically disadvantaged SouthAfricans, or HDSAs, into the mining industry. The South African governmentappointed a task team which included representatives from mining companies,including Gold Fields, to develop a charter. On October 11, 2002, theMinister and representatives of certain mining companies and the National Unionof Mineworkers signed a charter that reflects the consultation process calledfor by the New Minerals Act. This Mining Charter became effective on May 1,2004.

The Mining Charter’sstated objectives are to:

·       promoteequitable access to South Africa’s mineral resources for all the people ofSouth Africa;

·       substantiallyand meaningfully expand opportunities for HDSAs, including women, to enter themining and minerals industry and to benefit from the exploitation of SouthAfrica’s mineral resources;

·       utilizethe existing skills base for the empowerment of HDSAs;

·       expandthe skills base of HDSAs in order to serve the community;

·       promoteemployment and advance the social and economic welfare of mining communitiesand areas supplying mining labor; and

·       promotebeneficiation of South Africa’s mineral commodities beyond mining andprocessing, including the production of consumer products.

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To achieve these objectives, the Mining Charterrequires that mining companies achieve a 15% HDSA ownership of mining assetswithin five years and a 26% HDSA ownership of mining assets within10 years by each mining company. Under the Mining Charter, the miningindustry as a whole agrees to assist HDSA companies in securing finance to fundparticipation in an amount of Rand 100 billion over the first five years.Beyond the Rand 100 billion commitment, HDSA participation will be increased ona willing seller/willing buyer basis, at fair market value, where the miningcompanies are not at risk. In addition, the Mining Charter requires, amongother things, that mining companies spell out plans for achieving employmentequity at management level with a view to achieving a baseline of 40% HDSAparticipation in management and achieving a baseline of 10% participation bywomen in the mining industry, in each case within five years. When consideringapplications for the renewal of existing licenses, the government will take a “scorecard”approach, evaluating the commitments of stakeholders to the different facets ofpromoting the objectives of the Mining Charter. See “Information on the Company—Regulatoryand Environmental Matters—South Africa—Mineral Rights—The New Minerals Act.”

In order to comply withthe terms of the charter, Gold Fields has adjusted the ownership structure ofits South African mining assets. On March 8, 2004, the shareholders ofGold Fields approved a series of transactions, referred to in this discussionas the Mvelaphanda Transaction, involving the acquisition by MvelaphandaResources Limited of a 15% beneficial interest in the South African gold miningassets of Gold Fields for cash consideration of Rand 4,139 million. See “Operatingand Financial Review and Prospects—Overview—General—Mvelaphanda Transaction.”The Mvelaphanda Transaction is intended to meet the charter’s requirement thatmining companies achieve a 15% HDSA ownership within five years of the chartercoming into effect. See “Information on the Company—Regulatory andEnvironmental Matters—South Africa—Mineral Rights—The New Minerals Act.” Thereis no guarantee, however, that the Mvelaphanda Transaction will not have anegative effect on the value of Gold Fields’ ordinary shares. In addition, anyfurther adjustment to the ownership structure of Gold Fields’ South Africanmining assets in order to meet the mining charter’s 10-year HDSAownership requirement of 26% could have a material adverse effect on the valueof Gold Fields’ ordinary shares and failing to comply with the charter’srequirements could subject Gold Fields to negative consequences, the scope ofwhich has not yet been fully determined. Gold Fields may also incur expenses togive effect to the charter’s other requirements, and may need to incuradditional indebtedness in order to comply with the industry-wide commitment toassist HDSAs in securing Rand 100 billion of financing during the first fiveyears of the mining charter’s effectiveness. Moreover, there is no guaranteethat any steps Gold Fields has already taken or might take in the future willensure the successful renewal of any or all of its existing mining rights orthe granting of further new mining rights or that the terms of any renewals ofits rights would not be significantly less favorable to Gold Fields than theterms of its current rights.

*The Royalty Bill*

On March 20, 2003, the draft Mineral andPetroleum Royalty Bill was released for public comment. After extensiveconsultation, the draft Mineral and Petroleum Bill was revised and this revisedbill, or the Royalty Bill, was published on October 11, 2006, affordingstakeholders a further opportunity to provide comments.

The Royalty Bill proposes to impose a royalty payableto the State which, in the case of gold mining companies, would be 3% inrespect of the gross sales value of unrefined gold and 1.5% in respect of thegross value of refined gold. Gold is regarded as refined once it is processedto at least 99.5% purity and, accordingly, most companies in the South Africanmining sector, including Gold Fields, are likely to pay the refined rate. The RoyaltyBill envisages that the royalty will become payable from May 1, 2009.

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There isuncertainty as to what further amendments will be made to the Royalty Bill. Ifadopted, in either its current or a further revised form, the Royalty Billcould have a negative impact on Gold Fields’ South African operations andtherefore an adverse effect on its business, operating results and financialcondition. See “Information on the Company—Regulatory and Environmental Matters—SouthAfrica—Mineral Rights—The Royalty Bill.”

***GoldFields’ land and mineral rights in South Africa could be subject to landrestitution claims which could impose significant costs and burdens.***

Gold Fields’ privately held land andmineral rights could be subject to land restitution claims under theRestitution of Land Rights Act 1994, or the Land Claims Act. Under this Act,any person who was dispossessed of rights in land in South Africa as a resultof past racially discriminatory laws or practices without payment of just andequitable compensation is granted certain remedies, including the restorationof the land. Under the Land Claims Act, persons entitled to institute a landclaim were required to lodge their claims by December 31, 1998. GoldFields has not been notified of any land claims, but any claims of which it isnotified in the future could have a material adverse effect on Gold Fields’right to the properties to which the claims relate and, as a result, on GoldFields’ business, operating results and financial condition. See “Informationon the Company—Regulatory and Environmental Matters—South Africa—Land Claims.”

The Restitutionof Land Rights Amendment Act, or the Amendment Act, became law on February 4,2004. Under the Land Claims Act, the Minister for Agriculture and Land Affairs,or the Land Minister, may not acquire ownership of land for restitution purposeswithout a court order unless an agreement has been reached between the affectedparties. The Amendment Act, however, entitles the Land Minister to acquireownership of land by way of expropriation in certain limited circumstances.Expropriation would be subject to provisions of legislation and the SouthAfrican Constitution which provides, in general, for just and equitablecompensation. There is, however, no guarantee that any of Gold Fields’privately held land rights could not become subject to acquisition by the statewithout Gold Fields’ agreement, or that Gold Fields would be adequatelycompensated for the loss of its land rights, which could have a negative impacton Gold Fields’ South African operations and therefore an adverse effect on itsbusiness, operating results and financial condition. See “Information on theCompany—Regulatory and Environmental Matters—South Africa—Land Claims.”

***GoldFields’ operations in Ghana are subject to environmental regulations whichcould impose significant costs and burdens.***

Gold Fields’ Ghana operation is subject tovarious environmental laws and regulations. The Ghanaian environmentalprotection laws require, among other things, that Gold Fields register with theGhanaian environmental authorities, and obtain environmental permits andcertificates for the Ghana operation.

Ghanaian miningcompanies are required by law to rehabilitate land disturbed as a result oftheir mining operations pursuant to an environmental reclamation plan agreedwith the Ghanaian environmental authorities. Gold Fields funds theseenvironmental rehabilitation costs in part by posting a reclamation bond tosecure estimated costs of rehabilitation. Changes in the required method ofcalculation for these bonds or an unforeseen circumstance which producesunexpected costs may materially and adversely affect Gold Fields’ futureenvironmental expenditures. See “Information on the Company—Regulatory andEnvironmental Matters—Ghana—Environmental.”

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***GoldFields’ operations in Ghana are subject to health and safety regulations whichcould impose significant costs and burdens.***

The Ghanaian health and safety regulationsimpose statutory duties on an owner of a mine to, among other things, takesteps to ensure that the mine is managed and worked in a manner which providesfor the safety and proper discipline of the mine workers. The regulationsprescribe the measures to be taken to ensure the safety and health of the mineworkers. Additionally, Gold Fields is required under the terms of its miningleases to comply with the reasonable instructions of the relevant authoritiesfor securing the health and safety of persons working in or connected with themine. A violation of the health and safety regulations or a failure to complywith the reasonable instructions of the relevant authorities could lead to,among other things, a temporary shutdown of all or a portion of the mine, aloss of the right to mine or the imposition of costly compliance proceduresand, in the case of a violation of the regulations relating to health andsafety, constitutes an offense under Ghanaian law. If Ghanaian health andsafety authorities require Gold Fields to shut down all or a portion of itsmines or to implement costly compliance measures, whether pursuant to existingor new health and safety laws and regulations, such measures could have amaterial adverse effect on Gold Fields’ business, operating results andfinancial condition. See “Information on the Company—Regulatory andEnvironmental Matters—Ghana—Health and Safety.”

Gold Fields, asthe holder of the mining lease, has potential liability arising from injuriesto, or deaths of, workers, including, in some cases, workers employed by itscontractors. In Ghana, statutory workers’ compensation is not the exclusivemeans for workers to claim compensation. Gold Fields’ insurance for health andsafety claims or the relevant workers’ compensation arrangements may not beadequate to meet the costs which may arise upon any future health and safetyclaims.

***GoldFields’ mineral rights in Ghana are currently subject to regulations, and maybecome subject to new regulations, which could impose significant costs andburdens.***

In Ghana, theownership of land on which there are mineral deposits is separate from theownership of the minerals. All minerals in their natural state in or upon anyland or water are, under Ghanaian law, the property of Ghana and vested in thePresident on behalf of the people of Ghana. Gold Fields’ mining leases for theTarkwa property have not yet been ratified by the Ghanaian Parliament, asrequired by law. To the extent that failure to ratify these leases adverselyaffects their validity, there may be a material adverse effect on Gold Fields’business, operating results and financial condition. In addition, the new Mineralsand Mining Act, 2006 (Act 703), or the Minerals and Mining Act, was passed bythe Ghanaian Parliament in fiscal 2006. The Minerals and Mining Act repealedthe Minerals and Mining Law, 1986 (PNDCL 153) as amended, or the Minerals andMining Law, although, as regards existing mineral rights, the Minerals andMining Law continues to apply unless the minister responsible for minesprovides otherwise by legislative instrument. Even if a mineral right is madesubject to the Minerals and Mining Act, the Minerals and Mining Act providesthat it shall not have the effect of increasing the holder’s costs, orfinancial burden, for a period of five years. However, if in the future newamendments or provisions are passed under the Minerals and Mining Act or new lawsare passed which impose significant new costs or burdens on Gold Fields’abilities to mine in Ghana or to obtain new mining leases for properties onwhich deposits are identified, this could have a material adverse effect onGold Fields’ business, operating results and financial condition. See “Informationon the Company—Regulatory and Environmental Matters—Ghana—Mineral Rights.”

***GoldFields’ operations in Australia are subject to environmental regulations whichcould impose significant costs and burdens.***

Gold Fields’ Australian operations aresubject to various laws and regulations relating to the protection of theenvironment, which are similar in scope to those of South Africa and Ghana.Gold Fields may, in the future, incur significant costs to comply with theAustralian environmental requirements imposed under 

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existing or new legislation, regulations orpermit requirements or to comply with changes in existing laws and regulationsor the manner in which they are applied. These costs may have a materialadverse effect on Gold Fields’ business, operating results and financialcondition.

Australianmining companies are required by law to undertake rehabilitation works as partof their ongoing operation. Gold Fields makes provisions in its accounts for theestimated cost of environmental rehabilitation for its Australian miningproperties. Gold Fields guarantees its environmental obligations by providingthe Western Australian government with unconditional bank-guaranteedperformance bonds to secure the estimated costs. These bonds do not coverremediation for events that were unforeseen at the time the bond was taken.Changes in the required method of calculation for these bond amounts or anunforeseen circumstance which produces unexpected costs may materially andadversely affect future environmental expenditures. See “Information on theCompany—Regulatory and Environmental Matters—Australia—Environmental.”

***GoldFields’ operations in Australia are subject to health and safety regulationswhich could impose significant costs and burdens.***

The WesternAustralian Mines Safety and Inspection Act 1994 (WA), or the Safety andInspection Act, imposes a duty on a mine owner to provide and maintain aworking environment which is safe for mine workers. The regulations prescribespecific measures to be taken and provide for inspectors to review the worksite for hazards and violations of the health and safety laws. The Safety andInspection Act was amended in April 2005 to provide, among other things, anew regime of penalties, broader powers for inspectors and new duties of carefor employers. A violation of the health and safety laws or a failure to complywith the instructions of the relevant health and safety authorities could leadto, among other things, a temporary shutdown of all or a portion of the mine, aloss of the right to mine or the imposition of costly compliance procedures andpenalties (including imprisonment). If health and safety authorities requireGold Fields to shut down all or a portion of the mine or to implement costlycompliance measures, whether pursuant to existing or new health and safety lawsand regulations, such measures could have a material adverse effect on GoldFields’ business, operating results and financial condition. See “Informationon the Company—Regulatory and Environmental Matters—Australia—Health andSafety.”

***GoldFields’ tenements in Australia are subject to native title claims and includeAboriginal heritage sites which could impose significant costs and burdens.***

Certain of Gold Fields’ tenements aresubject to native title claims, and there are Aboriginal heritage sites locatedon certain of Gold Fields’ tenements. Native title and Aboriginal legislationprotect the rights of Aboriginals in relation to the land in certain circumstances.Other tenements may become subject to native title claims if Gold Fields seeksto expand or otherwise change its interest in rights to those tenements. Nativetitle claims could require costly negotiations with the claimants or couldaffect Gold Fields’ access to or use of its tenements, and, as a result,have a material adverse effect on Gold Fields’ business, operating resultsand financial condition.

Aboriginalheritage sites relate to distinct areas of land which have either ongoingethnographic, archaeological or historic significance. Aboriginal heritagesites have been identified with respect to portions of some of Gold Fields’Australian mining tenements. Additional Aboriginal heritage sites may beidentified on the same or additional tenements. Gold Fields may, in the future,incur significant costs as a result of changes in the interpretation of, or newlaws regarding, native title and Aboriginal heritage, which may result in amaterial adverse effect on Gold Fields’ business, operating results andfinancial condition. See “Information on the Company—Regulatory andEnvironmental Matters—Australia—Land Claims.”

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***TheVenezuelan government could take measures related to the conduct of business ingeneral that could affect the Venezuelan economy and Gold Fields’ operations inVenezuela.***

The Venezuelan government has exercised,and continues to exercise, significant influence over many aspects of theVenezuelan economy. For example, private oil companies doing business inVenezuela, as independent operators contracted by PDVSA under operationagreements, are now obligated to operate their same oil fields throughcompanies called “mixed” companies, which are jointly owned by the privatecompanies and PDVSA and over which PDVSA owns a majority interest. There can beno assurance that a similar regime will not be introduced for gold miningcompanies.

The Venezuelan government has alsoemphasized compliance with tax laws by implementing Plan Evasión Cero, or ZeroEvasion Plan, a pro-active plan to review companies’ compliance with taxpayments and formal obligations related to income taxes and value-added taxes.Under these reviews there has been an increase in the number of companies thathave been subject to temporary business closures.

These and otherregulations that have been enacted or may be enacted may have an adverse effecton Gold Fields’ business, operating results and financial condition eitherdirectly, or by adversely affecting the Venezuelan economy.

***GoldFields’ operations in Venezuela are subject to environmental regulations whichcould impose significant costs and burdens.***

Gold Fields’ operations in Venezuela aresubject to various environmental laws and regulations. The Venezuelanenvironmental laws and regulations require, among other things, that GoldFields obtain environmental permits for exploration and exploitation from theMinistry of the Environment and Natural Resources. See “Information on theCompany—Regulatory and Environmental Matters—Venezuela—Environmental.”

Venezuelan environmentalregulations and the lease agreements for Gold Fields’ mining concessionsrequire the posting of a bond issued by a local bank or insurance company, inorder to guarantee the execution of the measures necessary for the restorationof the area and the reduction of the impact of mining activities on theenvironment during the exploration and exploitation phases of a project.Changes in the required method of calculation for these bonds or an unforeseencircumstance which produces unexpected costs may materially and adverselyaffect Gold Fields’ future environmental expenditure. In addition, lack ofcoordination between the Ministry of Mining and the Ministry of the Environmentand Natural Resources has been known to cause undue delays in the granting ofenvironmental permits. Should Gold Fields experience delays in obtainingnecessary permits, it may suffer substantial burdens in undertaking plannedexploration activities or mining operations.

***GoldFields’ operations in Venezuela are subject to health and safety regulationswhich could impose significant costs and burdens.***

A violation of the health and safety lawsor a failure to comply with the instructions of the relevant health and safetyauthorities could lead to, among other things, a temporary shutdown of all or aportion of the mine, a loss of the right to mine and/or the imposition ofcostly compliance procedures and penalties (including onerous fines andcriminal penalties such as imprisonment). If health and safety authoritiesrequire Gold Fields to shut down all or a portion of the mine or to implementcostly compliance measures, whether pursuant to existing or new health andsafety laws and regulations, those measures could have a material adverseeffect on Gold Fields’ business, operating results and financial condition.

In addition, onJuly 26, 2005, an amendment to the Organic Law of Prevention, Conditionsand Work Environment was enacted in Venezuela, with the purpose of establishinginstitutions, rules and guidelines for policies and entities aimed atguaranteeing the safety, health and well-being of workers, regulating 

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conditions forthe promotion of a safe and healthy work environment, preventing work accidentsand occupational diseases and regulating the rights and duties of workers andemployers. This amendment establishes fines for violations of the relevantregulations and provides for incarceration of employers or theirrepresentatives from 8 to 10 years in case of death of a worker as a result ofviolation of regulations related to safety and healthy working conditions. See “Directors,Senior Management and Employees—Employees—Labor Relations—Health and Safety—Safety.”

***GoldFields’ mining rights in Venezuela are currently subject to regulation, andwill become subject to new regulations, which could impose significant costsand restrictions.***

The Venezuelan government traditionally hasplayed a central role in the development of Venezuela’s mining industry.Venezuelan governmental actions have had in the past, and could have in the future,significant effects on the financial condition and results of operations ofcompanies engaged in mining in Venezuela. Pursuant to the Decree Law of Minesof 1999, or the Decree Law of Mines, all mineral deposits are the property ofthe Venezuelan State. The Decree Law of Mines also regulates the assignment ofmining rights, as well as the activities ancillary to mining such as transport,commerce and exports of minerals, requiring authorizations or registration formost of these activities.

Pursuant to regulations of the VenezuelanCentral Bank, companies mining gold are currently allowed to export a maximumof 85% of their production. The remainder may be sold only to the VenezuelanCentral Bank and/or to companies which are registered at the Ministry of Miningas merchants of gold, diamonds or precious metals.

The Venezuelangovernment is promoting a reform of the existing mining law with two statedmain purposes: (i) in the short term, to assume control of inoperativemining concessions and (ii) in the medium term, to assume control ofmining operations. The proposed model is similar to the new guidelines appliedto the oil sector in the case of operational agreements whereby non-Venezuelancompanies operating oil fields under contract to PDVSA have been obligated toconvert their independent operation agreements into “mixed” companies wherePDVSA owns a controlling equity interest. In the future, it is possible thatprivate entities will only be allowed to participate in mining projects throughmixed companies where the government has majority equity participation.Although the current draft law contains a grandfathering provision pursuant towhich concessions that are in good standing will be allowed to continue untiltheir natural expiration, there can be no assurance that the draft law will beenacted in its current form. Any change to the mining law that changes GoldFields’ current rights to own and operate its mining concessions in Venezuelacould have a material adverse effect on its business, operating results andfinancial condition. See “Information on the Company—Regulatory andEnvironmental Matters—Venezuela—Mineral Rights.”

***Gold Fields may not obtain the anticipatedbenefits of its proposed acquisition of the South Deep gold mine.***

Gold Fields currently owns 34.7% of WesternAreas Limited, or Western Areas, a South African company whose principal assetis a 50% interest in the South Deep gold mine, or South Deep. This stakeincludes 27 million Western Areas shares Gold Fields acquired from asubsidiary of JCI Limited, or JCI, on November 16, 2006 pursuant to anagreement entered into on September 11, 2006. Pursuant to the agreement, GoldFields also entered into reciprocal put and call options to acquire additionalWestern Areas shares from subsidiaries of JCI which, if exercised, wouldincrease Gold Fields’ ownership of Western Areas to approximately 41%. OnOctober 30, 2006, Gold Fields commenced an offer, or the Offer, for all theoutstanding shares of Western Areas it did not already own, other than thosethat were the subject of its agreements with JCI. Gold Fields has also agreedto acquire the remaining 50% interest in South Deep from a subsidiary ofBarrick Gold Corporation, or Barrick. See “Information on the Company—RecentDevelopments—Acquisition of South Deep.” Gold Fields isacquiring South Deep because it believes South Deep isone of the most significant developing ore bodies in the world and that it 

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makes commercial and operational sense forGold Fields to own it and, in particular, if possible, to operate it as asingle unit with Gold Fields’ adjacent Kloof operation. Gold Fields believesthat portions of the South Deep orebody could be accessed using the Kloofinfrastructure which could potentially increase the rate at which the SouthDeep orebody is mined, as well as reduce the unit cost of mining at both Kloofand South Deep. As yet, however, no detailed design work has been done andthere can be no assurance that accessing South Deep via Kloof would result intangible benefit. Furthermore South Deep has not yet reached its designproduction capacity and has not completed much of the undergroundinfrastructure necessary for production at that design capacity. There remainssignificant risk that completing this infrastructure could take longer and costmore than is currently estimated, which according to Western Areas as of June2006 was Rand 3.50 billion through the end of 2012, comprising Rand 1.27billion for projects and Rand 2.23 billion for infrastructure. Moreover, thereis no assurance that the planned infrastructure, when completed, will beadequate to support the design production capacity. In addition, one of SouthDeep’s two main shafts has been closed since May 2006 following damage causedby a falling skip and a fire that broke out on August 31, 2006, which hascaused the temporary closure of portions of the mine. There can be no assurancethat Gold Fields will not continue to encounter operational challenges anddifficulties at South Deep that may require significant management time and/orexpenditure to rectify. See “Information on the Company—Recent Developments—Acquisitionof South Deep.”

Following completionof the acquisition of South Deep, Gold Fields intends to assess theimplications of accessing the South Deep orebody utilizing the Kloofinfrastructure and the integration of the two operations. This will involve apre-feasibility study to assess the options available followed by a detailedfeasibility study on the favored option. Gold Fields expects thatimplementation of the favored option, when determined, will be challenging andwill require a significant amount of management time and financial resources.In addition, it may take longer and/or cost more than expected and difficultiesrelating to the implementation which Gold Fields did not anticipate may arise.Any of these events could have an adverse impact on Gold Fields’ business,results of operations and financial condition.

***WesternAreas’ financial situation is hampered by a derivative structure that requiresit to sell a large portion of its share of the gold production of South Deep atprices substantially below recent spot prices for gold.***

In 2001,Western Areas entered into a long-dated derivative structure in respect of goldproduction from South Deep. The derivative structure, which is based on aseries of bought and sold options on Western Areas’ share of South Deep’s goldproduction, took effect in the last quarter of 2001 and expires in mid-2014.According to Western Areas, it will have to deliver approximately 90% of itsshare of the gold production into the derivative structure for 2006 and, atcurrent gold spot prices, some 58% in 2007, thereby reducing the opportunity tocapitalize on the spot gold price. Western Areas also reported that as ofSeptember 30, 2006, the fair value of the instruments constituting thederivatives structure was US$(360,483,116), using a gold spot price of $598.60and an exchange rate of Rand 7.7643 per US$1.00. The premium payable for theoptions purchased by Western Areas as part of the derivative structure wasUS$250 million, payable at various pre-determined dates in the future. WesternAreas reported that at September 30, 2006, the discounted value of the premiumpayable was US$139,630,503. Under the terms of the relevant options, a changeof control of Western Areas without the consent of the option counterpartiesconstitutes an event of default which may entitle the option counterparties toclose out the positions. Therefore, if Gold Fields acquires control of WesternAreas, the option counterparties could require Western Areas to immediately settlethe outstanding options and pay the present value of the premium. In addition,Gold Fields understands that other circumstances may exist that would allow theoption counterparties to close out the options. If the option counterpartieselect to close out the options at a time when Western Areas is a subsidiary ofGold Fields, it could have an adverse effect on Gold Fields’ financialcondition. Even if Western Areas is not required to immediately settle theoutstanding options, it would receive only the option price for a significantportion of the production of South Deep and therefore 

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Gold Fieldswould not benefit from any higher gold spot price. See “Information on theCompany—Recent Developments—Acquisition of South Deep.”

***GoldFields may complete the offer for Western Areas at a level of acceptances whichdoes not allow a compulsory acquisition by Gold Fields of the remaining WesternAreas shares.***

Under SouthAfrican law, if holders of nine-tenths or more of the Western Areas shares GoldFields has offered to acquire under the Offer accept the Offer, Gold Fields isentitled to compulsorily acquire the remaining shares subject to the Offer.Gold Fields has not established a minimum level of acceptances in respect ofWestern Areas shares that must be achieved before it is obligated to acquireany shares in respect of which the Offer has been validly accepted. As aresult, Gold Fields cannot be certain of obtaining in excess of nine-tenths ofthe Western Areas shares it has offered to acquire. If Gold Fields is unable tocompulsorily acquire Western Areas shares in respect of which valid acceptancesare not received, Western Areas may need to remain a separately listed companyon the JSE Limited, or the JSE, subject to the obligations applicable to listedcompanies. In addition, the existence of minority shareholders at Western Areasmay make it more difficult or expensive to raise capital to fund development ofSouth Deep.

***The acquisition of Western Areas and SouthDeep may expose Gold Fields to unknown liabilities and risks.***

Prior toagreeing to acquire Barrick’s 50% interest in South Deep and commencing theOffer, Gold Fields was able to conduct due diligence only on South Deep. Sinceentering into the agreement with Barrick and commencing the Offer, Gold Fieldshas been conducting additional due diligence on both South Deep and WesternAreas, but there can be no assurance that, after completion of the acquisitionof Barrick’s interest in South Deep and consummation of the Offer, Gold Fieldswill not be subject to unknown liabilities of, and risks associated with, SouthDeep or Western Areas, including liabilities and risks that may become evidentonly after Gold Fields becomes involved in the operational management of SouthDeep.

***Gold Fields has not independentlyconfirmed the reliability of the South Deep or Western Areas informationincluded in this annual report.***

In respect ofinformation relating to South Deep or Western Areas presented in this annualreport, Gold Fields relied upon publicly available information, includinginformation publicly filed by Western Areas with the JSE and certain duediligence materials supplied by Western Areas and Barrick. Although Gold Fieldshas no knowledge that would indicate that any statements contained in thisannual report based upon that information and those materials are inaccurate, incompleteor untrue, Gold Fields was not involved in the preparation of the informationand materials and has not had the opportunity to perform due diligence on themand, therefore, cannot verify the accuracy, completeness or truth of theinformation or materials or any failure by Western Areas or Barrick to discloseevents that may have occurred, but that are unknown to Gold Fields, that mayaffect the significance or accuracy of any such information.

***Compliance withinternal controls procedures and evaluations and attestation requirements willrequire significant efforts and resources and may result in the identificationof significant deficiencies or material weaknesses.***

Beginning in the fiscal year ending June 30,2007, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, GoldFields will be required to furnish a report by its management on its internalcontrol over financial reporting. The report will contain, among other matters,an assessment of the effectiveness of Gold Fields’ internal control overfinancial reporting as of the end of the fiscal year, including a statement asto whether or not its internal control over financial reporting is effective.Gold Fields will also be required to have its independent auditors publiclydisclose their conclusions regarding the evaluation. Gold Fields isestablishing procedures in order to comply with Section 404 in thetimeframe permitted and 

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expects that establishing procedures andensuring compliance with these requirements will be a substantial and time-consumingprocess. If Gold Fields fails to complete these procedures and the requiredevaluation in a timely manner, or if its independent auditors cannot attest toits evaluation in a timely manner, Gold Fields could be subject to regulatoryreview and penalties which may result in a loss of public confidence in itsinternal controls. In addition, Gold Fields may uncover significantdeficiencies or material weaknesses in its internal controls. Measures taken toremedy these issues may require significant efforts, dedicated time andexpenses, as well as the commitment of significant managerial resources. Eachof these circumstances may have an impact on Gold Fields’ share price.

***Investorsin the United States may have difficulty bringing actions, and enforcingjudgments, against Gold Fields, its directors and its executive officers basedon the civil liabilities provisions of the federal securities laws or otherlaws of the United States or any state thereof.***

GoldFields is incorporated in South Africa. The majority of Gold Fields’ directorsand executive officers (and certain experts named herein) reside outside of theUnited States. Substantially all of the assets of these persons and substantiallyall of the assets of Gold Fields are located outside the United States. Asa result, it may not be possible for investors to enforce against these personsor Gold Fields a judgment obtained in a United States court predicatedupon the civil liability provisions of the federal securities or other laws ofthe United States or any state thereof. A foreign judgment is not directlyenforceable in South Africa, but constitutes a cause of action which will beenforced by South African courts provided that:

·       the courtwhich pronounced the judgment had jurisdiction to entertain the case accordingto the principles recognized by South African law with reference to thejurisdiction of foreign courts;

·       thejudgment is final and conclusive (that is, it cannot be altered by the courtwhich pronounced it);

·       thejudgment has not lapsed;

·       therecognition and enforcement of the judgment by South African courts would notbe contrary to public policy, including observance of the rules of naturaljustice which require that the documents initiating the United Statesproceeding were properly served on the defendant and that the defendant wasgiven the right to be heard and represented by counsel in a free and fair trialbefore an impartial tribunal;

·       thejudgment was not obtained by fraudulent means;

·       thejudgment does not involve the enforcement of a penal or revenue law; and

·       theenforcement of the judgment is not otherwise precluded by the provisions of theProtection of Businesses Act 99 of 1978, as amended, of the Republic of SouthAfrica.

It is thepolicy of South African courts to award compensation for the loss or damageactually sustained by the person to whom the compensation is awarded. Althoughthe award of punitive damages is generally unknown to the South African legalsystem, that does not mean that such awards are necessarily contrary to publicpolicy. Whether a judgment is contrary to public policy depends on the facts ofeach case. Exorbitant, unconscionable or excessive awards will generally be contraryto public policy. South African courts cannot enter into the merits of aforeign judgment and cannot act as a court of appeal or review over the foreigncourt. South African courts will usually implement their own procedural lawsand, where an action based on an international contract is brought before aSouth African court, the capacity of the parties to the contract will usuallybe determined in accordance with South African law. It is doubtful whether anoriginal action based on United States federal securities laws may be broughtbefore South African courts. A plaintiff who is not resident in South Africamay be required to provide security for costs in the event of proceedings beinginitiated in South Africa. Furthermore, the Rules of the High Court of 

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South Africarequire that documents executed outside South Africa must be authenticated forthe purpose of use in South Africa.

***Investors may face liquidity risk intrading Gold Fields’ ordinary shares on the JSE Limited.***

Historically,trading volumes and liquidity of shares listed on the JSE have been low incomparison with other major markets. The ability of a holder to sell asubstantial number of Gold Fields’ ordinary shares on the JSE in a timelymanner, especially in a large block trade, may be restricted by this limitedliquidity. See “The Offer and Listing—The JSE Limited.”

***Gold Fields may not pay dividends or makesimilar payments to its shareholders in the future.***

Gold Fieldspays cash dividends only if funds are available for that purpose. Whether fundsare available depends on a variety of factors, including the amount of cashavailable and Gold Fields’ capital expenditures and other cash requirementsexisting at the time. Under South African law, Gold Fields will be entitled topay a dividend or similar payment to its shareholders only if it meets thesolvency and liquidity tests set out in the South African Companies Act andGold Fields’ Articles of Association. Cash dividends or other similar paymentsmay not be paid in the future.

***GoldFields’ non-South African shareholders face additional investment risk fromcurrency exchange rate fluctuations since any dividends will be paid in Rand.***

Dividends ordistributions with respect to Gold Fields’ ordinary shares have historicallybeen paid in Rand. The U.S. dollar or other currency equivalent of anydividends or distributions with respect to Gold Fields’ ordinary shareswill be adversely affected by potential future reductions in the value of theRand against the U.S. dollar or other currencies. In the future, it is possiblethat there will be changes in South African exchange control regulations, suchthat dividends paid out of trading profits will no longer be freelytransferable outside South Africa to shareholders who are not residents of theCommon Monetary Area. See “Additional Information—South African ExchangeControl Limitations Affecting Security Holders.”

***GoldFields’ ordinary shares are subject to dilution upon the exercise of GoldFields’ outstanding share options and the Mvela Gold share exchange option.***

As of October 31, 2006, Gold Fieldshad an aggregate of 1,000,000,000 ordinary shares authorized to be issued andas of that date an aggregate of 495,505,475 ordinary shares were issued and outstanding.Gold Fields currently has two securities option plans which are authorized togrant options in an amount of up to an aggregate of 25,071,013 ordinary shares.At their annual general meeting on November 17, 2005, Gold Fields’shareholders approved two new securities option plans which will replace thetwo existing plans. The first allocation of shares under The Gold FieldsLimited 2005 Share Plan was made in March 2006, when 430,500 performancevesting restricted shares were awarded. In November 2005, 33,000 restrictedshares were awarded to the non-executive directors under The Gold FieldsLimited 2005 Non-Executive Share Plan.

Gold Fields’ employees and directors hadoutstanding, as of November 15, 2006, options to purchase a total of6,520,257 ordinary shares at exercise prices of between Rand 20.90 and Rand154.65 that expire between December 24, 2006 and January 3, 2013 underThe GF Management Incentive Scheme and 184,400 ordinary shares at exerciseprices of between Rand 43.70 and Rand 110.03 that expire between February 6,2007 and February 18, 2010 under The GF Non-Executive Director Share Plan.Gold Fields has outstanding, as of November 15, 2006, 952,275 shareappreciation rights at a strike price of Rand 125.28, which expire on March 24,2012, and 412,965 performance vesting restricted shares due to be settled on March 24,2009, under The Gold Fields Limited 2005 Share Plan. As of the same date, GoldFields had outstanding 33,000 restricted shares due to be settled on November 17,2008 and 18,900 

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restricted shares due to be settled in November 2009,under The Gold Fields Limited 2005 Non-Executive Share Plan. Shareholders’equity interests in Gold Fields will be diluted to the extent of futureexercises of these rights and any additional rights. See “Directors, SeniorManagement and Employees—The GF Management Incentive Scheme,” “Directors,Senior Management and Employees—The Gold Fields Limited 2005 Share Plan,” “Directors,Senior Management and Employees—The GF Non-Executive Director Share Plan” and “Directors,Senior Management and Employees—The Gold Fields Limited 2005 Non-ExecutiveShare Plan.”

As part of theMvelaphanda Transaction, Mvela Gold is obliged to subscribe for 15% of theshare capital of GFI Mining South Africa (Proprietary) Ltd, or GFIMSA, a wholly-ownedsubsidiary of Gold Fields, upon repayment of the Mvela Loan. Under theSubscription and Share Exchange Agreement entered into in connection with theMvelaphanda Transaction, for a period of one year after the subscription of theGFIMSA shares each of Gold Fields and Mvela Gold will be entitled to requirethe exchange of Mvela Gold’s GFIMSA shares for ordinary shares of Gold Fieldsof an equivalent value, but numbering not less than 45,000,000 and not morethan 55,000,000 Gold Fields ordinary shares, adjusted as necessary to reflectchanges to Gold Fields’ capital structure and certain corporate activities ofGold Fields. Shareholders’ equity interests in Gold Fields will be dilutedif Gold Fields or Mvela Gold requires the exchange of GFIMSA shares forGold Fields shares. See “Operating and Financial Review and Prospects—Overview—General—MvelaphandaTransaction.”

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**ITEM 4:INFORMATION ON THE COMPANY**

**Introduction**

Gold Fields is a significant producer ofgold and major holder of gold reserves in South Africa, Ghana, Australia,Venezuela and Peru. Gold Fields is primarily involved in underground andsurface gold mining and related activities, including exploration, extraction,processing and smelting. Gold Fields also has strategic interests in platinumgroup metal exploration. Gold Fields is currently the second largest goldproducer in South Africa and one of the largest gold producers in the world, onthe basis of annual production.

The majority of Gold Fields’ operations,based on gold production, are located in South Africa. It also owns the St.Ives and Agnew gold mining operations in Australia and has a 71.1% interest ineach of the Tarkwa gold mine and the Damang gold mine in Ghana. InJanuary 2006, Gold Fields acquired 92% of the voting securities (or 80.7%of the economic interest) of Gold Fields La Cima S.A. (formerly known asSociedad Minera La Cima S.A.), or La Cima, the owner of the Cerro Corona Goldand Copper Project in Peru, or Cerro Corona Project, which it is in the processof developing for mining, and other mineral properties in the Cajamarcadistrict in northern Peru. On November 21, 2005, Gold Fields entered intoa Plan of Arrangement, which became effective on February 28, 2006,whereby it acquired all of the remaining securities it did not already hold ofBolivar Gold Corporation, or Bolivar, which operated (through varioussubsidiaries) the Choco 10 open pit gold mine in the El Callao gold district inthe Bolivar state, Venezuela. Furthermore, Gold Fields also owns 100% ofthe Arctic Platinum Project, or the APP, in northern Finland, which isevaluating the economic potential of deposits of open pittable and undergroundplatinum group metal mineralization. During April 2006, Gold Fieldsfinalized an arrangement with North American Palladium Limited, or NAP,whereby NAP has an option to acquire up to 60% of the APP. In addition, GoldFields has gold and other precious metal exploration activities and interestsin Africa, Australasia, China, Europe, North America and South America. See “—Exploration—GoldFields’ Exploration Projects” and “—Recent Developments.”

On September 11, 2006, Gold Fields enteredinto an agreement with Barrick Gold Corporation, or Barrick, and PDG AureateLimited, a subsidiary of Barrick, to acquire, for a total consideration ofUS$1.525 billion, the entire issued share capital of Barrick Gold South Africa(Proprietary) Limited, which holds a 50% interest in the Barrick Gold—WesternAreas Joint Venture, an unincorporated entity in which Barrick and WesternAreas Limited, or Western Areas, each hold an interest of 50%. The Barrick Gold—WesternAreas Joint Venture owns the developing South Deep gold mine, or South Deep,located in the Witwatersrand basin near Johannesburg. In conjunction with GoldFields’ acquisition of Barrick’s stake in the Barrick Gold—WesternAreas Joint Venture, Gold Fields is making an offer (referred to herein as theOffer) to acquire the entire issued share capital of Western Areas not alreadyowned by Gold Fields. Under the Offer, Western Areas shareholders will receive35 Gold Fields shares for every 100 Western Areas shares validly tenderedinto the Offer. In support of the Offer, Gold Fields, JCI Limited, or JCI, andcertain subsidiaries of JCI entered into an agreement on September 11, 2006,pursuant to which, on November 16, 2006, Gold Fields acquired 27 millionWestern Areas shares from one of the subsidiaries in exchange for the issue toJCI of 9,450,000 Gold Fields shares. In addition, pursuant to the agreement,with effect from November 14, 2006, the JCI subsidiaries have granted GoldFields call options, and Gold Fields granted the JCI subsidiaries put options,over a further 9.96 million Western Areas shares. See “—RecentDevelopments—Acquisition of South Deep” and “Operating and Financial Review andProspects—Recent Developments—Acquisition of South Deep.”

 

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Gold Fields’ operations include:

·       **Driefontein Operation**.   This operationconsists of seven shaft systems and three gold plants in South Africa’sNorthwest Province near Carletonville. Driefontein produced 1.150 millionounces of gold during the year ended June 30, 2006, accounting forapproximately 28.2% of attributable gold production for Gold Fields in fiscal2006. The operation employed approximately 16,700 people as of June 30, 2006,including approximately 1,600 working for outside contractors at the site. TheDriefontein operation includes both underground mining and surface rock dumpprocessing.

·       **Kloof Operation**.   This operationconsists of five shaft systems and two gold plants in South Africa’s GautengProvince, near the towns of Carletonville and Westonaria. Kloof produced 0.914million ounces of gold during the year ended June 30, 2006, accounting forapproximately 22.4% of attributable gold production for Gold Fields in fiscal2006. The operation employed approximately 16,900 people as of June 30,2006, including approximately 2,800 working for outside contractors at thesite. The Kloof operation includes both underground mining and some surfacerock dump processing.

·       **Beatrix Operation**.   This operationconsists of four shaft systems and two gold plants in South Africa’s Free StateProvince near Welkom and Virginia. The Beatrix operation produced 0.596 millionounces of gold during the year ended June 30, 2006, accounting forapproximately 14.6% of attributable gold production for Gold Fields in fiscal2006. The operation employed approximately 11,500 people as of June 30,2006, including approximately 1,300 working for outside contractors at thesite. The Beatrix operation consists of both underground mining and somelimited surface rock dump processing.

·       **Ghana Operations**.   These operationsconsist of: (1) the Tarkwa mine, which comprises several open pitoperations with two heap leach recovery facilities and a SAG mill and CIL plantand (2) the Damang mine, which consists of a number of open pit operationswith a CIL plant. Both mines are located in southwestern Ghana, about 300 and360 kilometers by road west of Accra, respectively. During the year ended June 30,2006, the Ghana operations produced 0.944 million ounces of gold (of whichapproximately 0.671 million ounces of gold were attributable to Gold Fields andthe remainder to minority shareholders in the Ghana operations), accounting forapproximately 16.5% of attributable gold production for Gold Fields in fiscal2006. The operations had approximately 3,900 employees as of June 30,2006, including approximately 2,000 working for outside contractors.

·       **Australia Operations**.   Theseoperations consist of the St. Ives and Agnew mines. Both mines are located inthe state of Western Australia, with St. Ives situated near Kambalda,straddling Lake Lefroy, and Agnew situated near Leinster. These two minestogether produced 0.719 million ounces of gold during the year ended June 30,2006, accounting for approximately 17.6% of attributable gold production forGold Fields in fiscal 2006. St. Ives and Agnew had approximately 1,100employees as of June 30, 2006, including approximately 700 workingfor outside contractors at the sites. St. Ives and Agnew conduct bothunderground and surface operations.

·       **Venezuela Operation**.   This operation consists of theChoco 10 mine, located in the El Callao district of Guayana, Venezuela. Duringthe four-month period ended June 30, 2006 (the period of Gold Fields’ownership in fiscal 2006), the Venezuela operation produced 0.025 million ouncesof gold (of which 0.024 million ounces were attributable to Gold Fields),accounting for approximately 0.6% of attributable gold production for GoldFields in fiscal 2006. The operation employed approximately 600 employees as ofJune 30, 2006, including approximately 150 working for outside contractorsat the site. Choco 10 conducts open pit operations, including surface rock dumpprocessing.

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Based on the figuresreported by Gold Fields’ mining operations, as of December 31, 2005, GoldFields had attributable proven and probable reserves of approximately 63.1million ounces of gold, as compared to the 62.8 million ounces reported as of June 30,2005. In the year ended June 30, 2006, Gold Fields processed 49,366million tons of ore and produced 4.348 million ounces of gold, of which 41,616 milliontons and 4.074 million ounces were attributable to Gold Fields.

**History**

The company that is today Gold Fields was originallyincorporated as East Driefontein Gold Mining Company Limited on May 3,1968, and subsequently changed its name to Driefontein Consolidated Limited.The Gold Fields group holdings in South Africa evolved through a series oftransactions, principally in 1998 and 1999.

With effect from January 1, 1998, a companyformed on November 21, 1997 and referred to in this discussion as OriginalGold Fields, acquired substantially all of the gold mining assets and interestspreviously held by Gencor Limited, Gold Fields of South Africa Limited and NewWits Limited and certain other shareholders in the companies owning the assetsand interests, including:

·       a100% interest in Beatrix Mines Limited, or Beatrix, which in turn owned a 100%interest in Beatrix Mining Company Limited, or BMC, which owned the Beatrixmine;

·       a37.3% interest in Driefontein Consolidated Limited, which owned the Driefonteinoperation;

·       a100% interest in Kloof Gold Mining Company Limited, or Kloof, which owned theKloof operation;

·       a54.2% interest in St. Helena Gold Mines Limited, or St. Helena, which owned theSt. Helena and Oryx mines;

·       a100% interest in Gold Fields Guernsey Limited, or Gold Fields Guernsey (whichwas reincorporated and renamed Gold Fields Holdings Company (BVI) Limited, orGold Fields BVI, in fiscal 2006), which indirectly owned a 70% interest in theTarkwa mine (which was later increased to 71.1% due to the dilution of theother shareholders);

·       a100% interest in Orogen Holding (BVI) Limited, or Orogen;

·       aneffective 95% interest in Promotora Minera de Guayana (PMG) S.A., or PMG, whichowns the Choco 10 mine; and

·       variousexploration and other rights and assets.

The Driefontein, Kloof and Tarkwa interests wereacquired from Gold Fields of South Africa Limited, while the Beatrix and St.Helena interests were originally acquired from Gencor Limited. New WitsLimited provided various mineral rights. Original Gold Fields then owned 100%of Driefontein Consolidated Limited.

With legal effect from January 1, 1999,Driefontein Consolidated Limited acquired Original Gold Fields (which wassubsequently renamed GFL Mining Services Limited) in a merger. For accountingpurposes, Original Gold Fields was fully consolidated with effect from June 1,1999. Although for legal purposes Driefontein Consolidated Limited acquiredOriginal Gold Fields, for accounting purposes Original Gold Fields wasconsidered the acquirer because Original Gold Fields’ shareholders obtained thelarger interest in the enlarged company. Driefontein Consolidated Limited wasrenamed Gold Fields Limited on May 10, 1999, following the merger. Foraccounting purposes, the merger was treated as if it occurred on June 1, 1999.

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In order to achievegreater operational and administrative efficiency within the Gold Fields groupfollowing the merger, the Gold Fields group structure was reorganized witheffect from July 1, 1999 as follows:

·       GFLMining Services Limited transferred its interests in Beatrix, St. Helena, Oryxand Kloof to Gold Fields; and

·       GoldFields transferred the Driefontein mine as a going concern to a shelf companynamed Driefontein Consolidated (Proprietary) Limited, a wholly-owned subsidiaryof Gold Fields.

With effect from July 1,1999, Gold Fields also acquired the remaining 45.8% interest in St. Helena fromSt. Helena’s minority shareholders. Subsequent to this acquisition, St. Helenaacquired the Beatrix mine from BMC.

On November 30, 2001,Gold Fields acquired the St. Ives and Agnew gold mining operations from WMCLimited and WMC Resources Limited (collectively, WMC).

On January 23, 2002,Gold Fields acquired a 71.1% interest in Abosso Goldfields Limited, or Abosso.

On October 30, 2002,Gold Fields sold the St. Helena gold mining operation to Freegold for grossconsideration of Rand 120.0 million and a monthly 1% royalty payment to GoldFields on the net revenues from gold sales from the St. Helena mine for aperiod of four years after closing. Subsequent to the sale, St. Helena wasrenamed Beatrix Mining Ventures Limited and the Free State Operation wasrenamed the Beatrix Operation.

With effect from February 23,2004, as part of an internal reorganization of the Gold Fields group inconnection with the transaction with Mvelaphanda Resources Limited, or MvelaResources, described below, Gold Fields transferred its South African goldmining assets, including the Beatrix operation, the Driefontein operation andthe Kloof operation as going concerns to GFIMSA.

On March 8, 2004, theshareholders of Gold Fields approved a series of transactions, involving theacquisition by Mvela Resources, through a wholly-owned subsidiary, of a 15%beneficial interest in the South African gold mining assets of Gold Fields, forcash consideration of R4,139 million. See “Operating and Financial Review andProspects—Overview—Mvelaphanda Transaction.”

On January 12, 2006,Gold Fields acquired 92% of the voting securities (or 80.7% of the economic interest) of La Cima.La Cima owns the Cerro Corona Project and other mineral properties in theCajamarca district in northern Peru.

On February 28, 2006,Gold Fields’ Plan of Arrangement with Bolivar became effective, whereby GoldFields acquired all of the outstanding securities in Bolivar it did not alreadyhold. Bolivar, through various subsidiaries, owned an effective 95% stake inand operated the Choco 10 open pit gold mine in the El Callao gold district inthe Bolivar State, Venezuela. Bolivar commenced a dissolution process on February 28,2006 and as a result, its subsidiaries and, hence, its effective stake in theChoco 10 operation, was distributed, effective that same day. These distributedsubsidiaries are currently held by Gold Fields Netherlands Services B.V., whichwas formerly named Gold Fields Venezuela Holding B.V., a company incorporatedin the Netherlands.

On March 24, 2006,Gold Fields finalized an arrangement with NAP, whereby Gold Fields granted NAPan option to acquire up to 60% of the APP in northern Finland. The arrangementbecame effective on April 13, 2006. Gold Fields currently owns 100% of theAPP.

Gold Fields is a publiccompany incorporated in South Africa, with a registered office located at 24 St. AndrewsRoad, Parktown 2193, South Africa, telephone number 011-27-11-644-2400.

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**Organizational Structure**

Gold Fields is a holding company with its significantownership interests organized as set forth below.

**Group Structure(1)**

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(1)    Unlessotherwise stated, all subsidiaries are, directly or indirectly, wholly-owned byGold Fields Limited.

(2)    Infiscal 2006, Gold Fields Guernsey Limited and Gold Fields Ghana HoldingsLimited changed their incorporation to the British Virgin Islands and theirnames to Gold Fields Holdings Company (BVI) Limited and Gold Fields Ghana (BVI)Limited, respectively.

(3)    Infiscal 2007, Gold Fields Venezuela Holding B.V. changed its name to Gold FieldsNetherlands Services B.V.

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·       **South Africa**.   Gold Fields’ interestsin the Driefontein, Kloof and Beatrix operations are held through GFIMSA.

·       **Ghana**.   Gold Fields’ interests in theTarkwa and Damang mines, which comprise the Ghana operations, are held throughits 71.1% owned subsidiaries, Gold Fields Ghana Limited, or Gold Fields Ghana,and Abosso, respectively. The remaining interests in Gold Fields Ghana andAbosso are indirectly held by IAMGold Corporation, or IAMGold, which acquiredan 18.9% beneficial interest previously held by Repadre Capital Corporationfollowing a merger between the two companies on January 8, 2003, and theGovernment of Ghana, which holds a 10.0% interest, which the Governmentacquired as a free carried interest for no cost.

·       **Australia**.   Gold Fields’ interests inthe St. Ives and Agnew mines are held through two wholly-owned Australiansubsidiaries, St. Ives Gold Mining Company Pty Ltd. and Agnew Gold MiningCompany Pty Ltd., which, in turn, are wholly-owned through intermediaries byOrogen.

·       **Venezuela**.   Gold Fields’ interest in the Choco 10 mineis held through PMG which is a joint venture between Ferrominera del OrinocoC.A., or FMO, a subsidiary of Corporación Venezolano de Guayana S.A., or CVG,and a Gold Fields’ wholly-owned subsidiary, Promotora Minera de Venezuela S.A.,or Promiven. Gold Fields owns an effective 95% interest in PMG. The remaining5% interest is in the process of being transferred to CVG Minerven, asubsidiary of CVG. See “—Venezuela Operation.”

·       **Exploration Assets**.   Gold Fields’ exploration assets aregenerally held by project companies in the jurisdiction where the explorationassets are located, which are, in turn, held through either Orogen or GoldFields BVI. Orogen holds the APP through intermediaries.

**Strategy**

***General***

Gold Fields is asignificant producer of gold and a major holder of gold reserves in SouthAfrica, Ghana, Australia and South America. Gold Fields also has reported goldand copper reserves at the Cerro Corona Project, a development project in Peruwhich is presently under construction. The gold industry has historically beenhighly fragmented and a trend has been underway to consolidate the industrythrough mergers and acquisitions.

***Global Context***

Gold Fields’ strategy was developed in the context ofa global market characterized by an extended period of low gold prices, reducedglobal expenditure on gold exploration and increasing industry consolidation.This strategy has evolved over time, but despite the recent increase in theprice of gold, Gold Fields has maintained a strategy of general caution withrespect to financial commitments while maintaining full exposure to the effectsof the gold price.

Generally, GoldFields’ strategy consists of the following key elements:

·       operationalexcellence, which is aimed at improving returns through the optimization ofexisting assets. This is achieved in the first instance through improvingproductivity. Secondly, it also implies the reduction of costs through costmanagement initiatives and growing assets through inward investment;

·       growingGold Fields by diversifying geographical, technical and product risk throughacquiring and developing additional long-life assets. Starting in fiscal 2004,Gold Fields set a goal of achieving an additional 1.5 million ounces of annualgold production by the end of calendar 2009; and

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·       securing the future of GoldFields by earning and maintaining what Gold Fields calls its “license tooperate” in those countries and regions in which it operates and by upholdingstrong principles of corporate governance. Gold Fields views its ability toconduct its operations as involving a reciprocal commitment from Gold Fields tothe communities where it is located to deal with issues related to sustainabledevelopment.

***Operational Excellence***

Management believesthat improved profitability at existing operations can be achieved byincreasing mining rates, increasing mining quality and reducing costs.Management believes that significant opportunity exists to do this,specifically through:

·       increasingdevelopment rates at the South African operations to provide for ore reserveand mining flexibility;

·       increasingquality mining through increasing volumes mined above the paylimit and/orcut-offs and ensuring that dilution is minimized. Dilution can be minimizedthrough programs aimed at reducing the quantities of waste mined bothunderground and in the open pits. Quality can be improved through ongoing gradecontrol and optimizing mine call factors;

·       increasingproductivity through skills development programs, aligning incentive schemeswith desired outcomes, removing bottlenecks, improving ventilation and loweringtemperatures at the South African operations, rationalization of infrastructureand plant modernizations;

·       investingin cost reduction through replacement of older equipment with modern and moreefficient equipment;

·       reducingcosts through improving controls over the consumption of materials used in themines, implementing improved procurement practices and exploring opportunitiesfor global and regional supply contracts; and

·       improving efficiencies andcontrols in areas such as people management, planned maintenance, transport andmedical facilities.

***Acquisitions and Exploration***

Gold Fields is one of the largest producers of gold inthe world, based on annual gold production. Gold Fields’ corporate developmentmandate is to grow as a world leader in developing and operating low-cost, longlife precious metal mines. Gold Fields is sensitive to the fact that increasedcompetition for acquisitions and higher gold prices are pushing asset prices tolevels that threaten returns. The impact on returns has been exacerbated byhigher input costs, particularly as significant increases in base metal priceshas led to increased mining of base metals, which uses some of the same inputsas gold mining, and therefore has increased overall demand for those products.

For acquisitions of gold assets or companies outsideSouth Africa, Gold Fields is at somewhat of a disadvantage to certain of itscompetitors, but this also has offsetting strengths. First, South Africanexchange control regulations limit Gold Fields’ ability to provide guaranteesor borrow outside South Africa without express approval from the SouthAfrican Reserve Bank, or the SARB. However, in his speech to Parliament towardsthe end of October 2004, the Minister of Finance outlined the SouthAfrican Treasury’s medium-term budget policy statement and repeated that it wasthe government’s eventual goal to replace all remaining exchange controls withprudential benchmarks. He also announced the abolition of exchange controllimits on new outward foreign direct investments by South African corporationsand the lifting of their obligation to repatriate foreign dividends. There havesubsequently been further indications from the Ministry of Finance that itremains the government’s intention to 

38

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gradually phase out the remaining exchange controlsover time. Second, shares of South African companies tend to be viewed as aless attractive acquisition currency than shares of non-South Africancompanies, despite the relaxation of exchange controls. On the other hand, GoldFields has a strong balance sheet and low debt-to-equity ratio that diminishesthe equity pricing disadvantage, and also has a skilled and effective corporateevaluation and acquisition team, and a sound track record in projectdevelopment.

Gold Fields also maintainsan active global exploration effort for gold and PGMs through explorationoffices worldwide and an exploration philosophy that management believes iswell focused and cost efficient.

***Hedging***

Generally, Gold Fields does not enter into forwardsales, derivatives or other hedging arrangements to establish a price inadvance for future gold production. Gold Fields believes that investors in GoldFields’ shares seek an unlimited exposure to movements in the U.S. dollar goldprice and the resulting effect on Gold Fields’ earnings.

However, commodityhedges are sometimes undertaken on a project-specific basis as follows:

·       toprotect cash flows at times of significant expenditure;

·       forspecific debt servicing requirements; and

·       tosafeguard the viability of higher cost operations.

Gold Fields may from timeto time establish currency and/or interest rate financial instruments toprotect underlying cash flows or to take advantage of potential favorablecurrency movements. In addition, in connection with the acquisition of WesternAreas, Gold Fields will be acquiring the Western Areas hedge book. See “—RecentDevelopments—Acquisition of South Deep.’’

**Reserves of GoldFields as of December 31, 2005**

***Methodology***

While there are some differences between thedefinition of the South African Code for Reporting of Mineral Resources andMineral Reserves, or SAMREC Code, and that of the SEC’s industry guide number7, only reserves at each of Gold Fields’ operations and exploration projects asof December 31, 2005 which qualify as reserves for purposes of the SEC’sindustry guide number 7 are presented in the table below. See “—Glossary of MiningTerms.” In accordance with the requirements imposed by the JSE, Gold Fieldsreports its reserves using the terms and definitions of the SAMREC Code.Mineral or ore reserves, as defined under the SAMREC Code, are divided intocategories of proven and probable reserves and are expressed in terms of tonsto be processed at mill feed head grades, allowing for estimated miningdilution and mine recovery factors.

Gold Fields reports reserves using cut-off grades(mainly for open pit operations) and paylimits to ensure the reservesrealistically reflect both the cost structures and required margins relevant toeach mining operation. Cut-off grade is the grade that distinguishes thematerial within an orebody that is to be extracted and treated from the remainingmaterial. The paylimit is the grade at which an orebody can be mined withoutprofit or loss calculated using an appropriate gold or copper price and workingcosts, plus modifying factors. Modifying factors used to calculate the paylimitgrades include adjustments to mill delivered amounts, due to dilution incurredin the course of mining. Modifying factors applied in estimating reserves areprimarily historical, but commonly incorporate adjustments for plannedoperational improvements such as those described below under “—Description ofMining Business—Productivity Initiatives.” Tonnage and grade includes somemineralization below the selected paylimit and 

39

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cut-off grade to ensure that the reserve comprisesblocks of adequate size and continuity. Reserves also take into account costlevels at each operation and are supported by mine plans.

Although the acquisition of the Choco 10 mine by GoldFields Limited was concluded after the December 31, 2005 reservedeclaration date, the statement for the operation, as declared by externalconsultants as of January 28, 2005, net of mined depletion through December 31,2005, is included for completeness.

The reserve figures are as of December 31, 2005,and reflect a change in Gold Fields’ reserve reporting cycle from June 30to December 31 to fit in with Gold Fields’ strategic and operationalplanning cycle.

The estimation of reserves at the South Africanunderground operations is based on surface drilling, underground drilling,surface three-dimensional reflection seismics, orebody facies, structuralmodeling, underground channel sampling and geostatistical estimation. The reefsare initially explored by drilling from the surface on an approximately 500meter to 2,000 meter grid. Once underground access is available, drilling isundertaken on an approximately 30 meter by 60 meter grid. Underground channelsampling perpendicular to the reef is undertaken at three meter intervals indevelopment areas and five meter intervals at stope faces. For the Tarkwa openpit operation, estimation of reserves is based on a combination of an initial100 or 200 meter grid of diamond drilling and in certain areas a 12.5 meter to25.0 meter grid of reverse circulation drilling. For the Damang open pitoperation, estimation of reserves is based on a 20 meter to 80 meter grid ofdiamond drilling and in certain areas reverse circulation drilling.

At the Australianoperations, the estimation of reserves for both underground and open pitoperations is based on exploration, sampling and testing information gatheredthrough appropriate techniques, primarily from drill holes and minedevelopment. The locations of sample points are spaced closely enough to deduceor confirm geological and grade continuity. Generally, drilling is undertakenon grids, which range between 20 meters by 20 meters to 40 meters by 40meters, although this may vary depending on the continuity of the orebody. Dueto the variety and diversity of resources at St. Ives and Agnew, sample spacingmay also vary depending on each particular ore type. For Choco 10 and the CerroCorona Project, estimation is based on diamond drill and reverse circulationholes. The spacing of holes at Cerro Corona is generally around 50 meters, withsome areas approximating a 25 meter grid. The drill spacing at Choco 10 isvaried, depending on geological and grade continuity, with a general spacing of50 meters by 25 meters to 25 meters by 25 meters.

40

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***Reserve Statement***

As of December 31,2005, Gold Fields had aggregate attributable proven and probable gold reservesof approximately 63.1 million ounces as set forth in the following table.

**Gold ore reserve statement as of December 31,2005(1)**

| ** **                          | ** ** | **Tons**      | ** ** | **Proven   reserves  Head  Grade** | ** ** | **Gold**                | ** ** | **Tons**      | ** ** | **Probable  reserves  Head  Grade** | ** ** | **Gold**                | ** ** | **Tons**      | ** ** | **Total  reserves  Head  Grade** | ** ** | **Gold**                | ** ** | **Attributable  gold  production  in the  6 months  ended  December 31,  2005(2)** | ** **   |
|-------------------------------------|------------|---------------|------------|-----------------------------------------|------------|-------------------------|------------|---------------|------------|-------------------------------------|------------|-------------------------|------------|---------------|------------|----------------------------------|------------|-------------------------|------------|---------------------------------------------------------------------------------------------------|--------------|
| ** **                          | ** ** | **(million)** | ** ** | **(g/t)**                               | ** ** | **(‘000 oz)** | ** ** | **(million)** | ** ** | **(g/t)**                           | ** ** | **(‘000 oz)** | ** ** | **(million)** | ** ** | **(g/t)**                        | ** ** | **(‘000 oz)** | ** ** | **(‘000 oz)**                                                                           | *** *** |
| **Underground**                     | ** ** |          | ** ** | ** **                              |       |                    | ** ** | ** **    |       |                                | ** ** | ** **              |       |          | ** ** | ** **                       |       |                    | ** ** | ** **                                                                                        |         |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Driefontein (total)                 |       |          | 27.6       | ** **                              |       |                    | 7.8        | ** **    |       |                                | 6,938      | ** **              |       |          | 59.0       | ** **                       |       |                    | 8.1        | ** **                                                                                        |         |   | 15,400 | ** ** |   |   | 86.6 | ** ** |   |   | 8.0 | ** ** |   |   | 22,338 | ** ** |   |   | 517 |   |   |
| Above infrastructure(3)             |       |          | 27.6       | ** **                              |       |                    | 7.8        | ** **    |       |                                | 6,938      | ** **              |       |          | 28.0       | ** **                       |       |                    | 8.0        | ** **                                                                                        |         |   | 7,181 | ** ** |   |   | 55.6 | ** ** |   |   | 7.9 | ** ** |   |   | 14,119 | ** ** |   |   | 517 |   |   |
| Below infrastructure(3)             |       |          | —     | ** **                              |       |                    | —     | ** **    |       |                                | —     | ** **              |       |          | 31.0       | ** **                       |       |                    | 8.2        | ** **                                                                                        |         |   | 8,219 | ** ** |   |   | 31.0 | ** ** |   |   | 8.2 | ** ** |   |   | 8,219 | ** ** |   |   | — |   |   |
| Kloof (total)                       |       |          | 14.7       | ** **                              |       |                    | 9.7        | ** **    |       |                                | 4,547      | ** **              |       |          | 29.3       | ** **                       |       |                    | 10.1       | ** **                                                                                        |         |   | 9,518 | ** ** |   |   | 44.0 | ** ** |   |   | 10.0 | ** ** |   |   | 14,065 | ** ** |   |   | 463 |   |   |
| Above infrastructure(3)             |       |          | 14.7       | ** **                              |       |                    | 9.7        | ** **    |       |                                | 4,547      | ** **              |       |          | 24.7       | ** **                       |       |                    | 9.7        | ** **                                                                                        |         |   | 7,742 | ** ** |   |   | 39.4 | ** ** |   |   | 9.7 | ** ** |   |   | 12,289 | ** ** |   |   | 463 |   |   |
| Below infrastructure(3)             |       |          | —     | ** **                              |       |                    | —     | ** **    |       |                                | —     | ** **              |       |          | 4.6        | ** **                       |       |                    | 12.0       | ** **                                                                                        |         |   | 1,776 | ** ** |   |   | 4.6 | ** ** |   |   | 12.0 | ** ** |   |   | 1,776 | ** ** |   |   | — |   |   |
| Beatrix (total)                     |       |          | 17.6       | ** **                              |       |                    | 5.0        | ** **    |       |                                | 2,824      | ** **              |       |          | 28.7       | ** **                       |       |                    | 5.9        | ** **                                                                                        |         |   | 5,410 | ** ** |   |   | 46.4 | ** ** |   |   | 5.5 | ** ** |   |   | 8,235 | ** ** |   |   | 294 |   |   |
| Above infrastructure(3)             |       |          | 17.6       | ** **                              |       |                    | 5.0        | ** **    |       |                                | 2,824      | ** **              |       |          | 28.7       | ** **                       |       |                    | 5.9        | ** **                                                                                        |         |   | 5,410 | ** ** |   |   | 46.4 | ** ** |   |   | 5.5 | ** ** |   |   | 8,235 | ** ** |   |   | 294 |   |   |
| **Australia**                       | ** ** |          | ** ** | ** **                              |       |                    | ** ** | ** **    |       |                                | ** ** | ** **              |       |          | ** ** | ** **                       |       |                    | ** ** | ** **                                                                                        |         |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| St. Ives                            |       |          | 0.2        | ** **                              |       |                    | 6.1        | ** **    |       |                                | 38         | ** **              |       |          | 5.7        | ** **                       |       |                    | 5.3        | ** **                                                                                        |         |   | 976 | ** ** |   |   | 5.9 | ** ** |   |   | 5.4 | ** ** |   |   | 1,014 | ** ** |   |   | 124 |   |   |
| Agnew                               |       |          | 0.6        | ** **                              |       |                    | 12.1       | ** **    |       |                                | 237        | ** **              |       |          | 1.1        | ** **                       |       |                    | 8.1        | ** **                                                                                        |         |   | 273 | ** ** |   |   | 1.7 | ** ** |   |   | 9.5 | ** ** |   |   | 510 | ** ** |   |   | 85 |   |   |
| **Total Underground**               |       |          | 60.7       | ** **                              |       |                    | 7.5        | ** **    |       |                                | 14,584     | ** **              |       |          | 123.7      | ** **                       |       |                    | 7.9        | ** **                                                                                        |         |   | 31,577 | ** ** |   |   | 184.6 | ** ** |   |   | 7.8 | ** ** |   |   | 46,162 | ** ** |   |   | 1,483 |   |   |
| **Surface  (Rock Dumps)**           | ** ** |          | ** ** | ** **                              |       |                    | ** ** | ** **    |       |                                | ** ** | ** **              |       |          | ** ** | ** **                       |       |                    | ** ** | ** **                                                                                        |         |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Driefontein                         |       |          | —     | ** **                              |       |                    | —     | ** **    |       |                                | —     | ** **              |       |          | 7.9        | ** **                       |       |                    | 1.1        | ** **                                                                                        |         |   | 278 | ** ** |   |   | 7.9 | ** ** |   |   | 1.1 | ** ** |   |   | 278 | ** ** |   |   | 62 |   |   |
| Kloof                               |       |          | —     | ** **                              |       |                    | —     | ** **    |       |                                | —     | ** **              |       |          | 10.2       | ** **                       |       |                    | 0.7        | ** **                                                                                        |         |   | 224 | ** ** |   |   | 10.2 | ** ** |   |   | 0.7 | ** ** |   |   | 224 | ** ** |   |   | 8 |   |   |
| Beatrix                             |       |          | —     | ** **                              |       |                    | —     | ** **    |       |                                | —     | ** **              |       |          | 0          | ** **                       |       |                    | —     | ** **                                                                                        |         |   | 0 | ** ** |   |   | 0 | ** ** |   |   | — | ** ** |   |   | 0 | ** ** |   |   | — |   |   |
| **Surface  (Production Stockpile)** | ** ** |          | ** ** | ** **                              |       |                    | ** ** | ** **    |       |                                | ** ** | ** **              |       |          | ** ** | ** **                       |       |                    | ** ** | ** **                                                                                        |         |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| **Ghana**                           | ** ** |          | ** ** | ** **                              |       |                    | ** ** | ** **    |       |                                | ** ** | ** **              |       |          | ** ** | ** **                       |       |                    | ** ** | ** **                                                                                        |         |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Tarkwa                              |       |          | 4.1        | ** **                              |       |                    | 0.7        | ** **    |       |                                | 87         | ** **              |       |          | —     | ** **                       |       |                    | —     | ** **                                                                                        |         |   | — | ** ** |   |   | 4.1 | ** ** |   |   | 0.7 | ** ** |   |   | 87 | ** ** |   |   | — |   |   |
| Damang                              |       |          | 6.0        | ** **                              |       |                    | 1.2        | ** **    |       |                                | 232        | ** **              |       |          | —     | ** **                       |       |                    | —     | ** **                                                                                        |         |   | — | ** ** |   |   | 6.0 | ** ** |   |   | 1.2 | ** ** |   |   | 232 | ** ** |   |   | — |   |   |
| **Australia**                       | ** ** |          | ** ** | ** **                              |       |                    | ** ** | ** **    |       |                                | ** ** | ** **              |       |          | ** ** | ** **                       |       |                    | ** ** | ** **                                                                                        |         |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| St. Ives                            |       |          | 6.9        | ** **                              |       |                    | 1.2        | ** **    |       |                                | 255        | ** **              |       |          | —     | ** **                       |       |                    | —     | ** **                                                                                        |         |   | — | ** ** |   |   | 6.9 | ** ** |   |   | 1.2 | ** ** |   |   | 255 | ** ** |   |   | — |   |   |
| Agnew                               |       |          | 0.4        | ** **                              |       |                    | 1.4        | ** **    |       |                                | 19         | ** **              |       |          | —     | ** **                       |       |                    | —     | ** **                                                                                        |         |   | — | ** ** |   |   | 0.4 | ** ** |   |   | 1.4 | ** ** |   |   | 19 | ** ** |   |   | — |   |   |
| **Surface  (Open Pit)**             | ** ** |          | ** ** | ** **                              |       |                    | ** ** | ** **    |       |                                | ** ** | ** **              |       |          | ** ** | ** **                       |       |                    | ** ** | ** **                                                                                        |         |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| **Ghana**                           | ** ** |          | ** ** | ** **                              |       |                    | ** ** | ** **    |       |                                | ** ** | ** **              |       |          | ** ** | ** **                       |       |                    | ** ** | ** **                                                                                        |         |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Tarkwa                              |       |          | 127.1      | ** **                              |       |                    | 1.3        | ** **    |       |                                | 5,411      | ** **              |       |          | 120.2      | ** **                       |       |                    | 1.2        | ** **                                                                                        |         |   | 4,758 | ** ** |   |   | 247.2 | ** ** |   |   | 1.3 | ** ** |   |   | 10,169 | ** ** |   |   | 242 | (4) |   |
| Damang(5)                           |       |          | 3.3        | ** **                              |       |                    | 2.4        | ** **    |       |                                | 249        | ** **              |       |          | 9.4        | ** **                       |       |                    | 1.7        | ** **                                                                                        |         |   | 513 | ** ** |   |   | 12.7 | ** ** |   |   | 1.9 | ** ** |   |   | 761 | ** ** |   |   | 83 | (4) |   |
| **Australia**                       | ** ** |          | ** ** | ** **                              |       |                    | ** ** | ** **    |       |                                | ** ** | ** **              |       |          | ** ** | ** **                       |       |                    | ** ** | ** **                                                                                        |         |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| St. Ives(5)                         |       |          | 1.7        | ** **                              |       |                    | 2.6        | ** **    |       |                                | 145        | ** **              |       |          | 12.9       | ** **                       |       |                    | 1.9        | ** **                                                                                        |         |   | 792 | ** ** |   |   | 14.7 | ** ** |   |   | 2.0 | ** ** |   |   | 938 | ** ** |   |   | 121 | (4) |   |
| Agnew(5)                            |       |          | 0.6        | ** **                              |       |                    | 2.5        | ** **    |       |                                | 47         | ** **              |       |          | 2.0        | ** **                       |       |                    | 3.1        | ** **                                                                                        |         |   | 197 | ** ** |   |   | 2.5 | ** ** |   |   | 3.0 | ** ** |   |   | 243 | ** ** |   |   | 32 | (4) |   |
| **Venezuela**                       | ** ** |          | ** ** | ** **                              |       |                    | ** ** | ** **    |       |                                | ** ** | ** **              |       |          | ** ** | ** **                       |       |                    | ** ** | ** **                                                                                        |         |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Choco 10                            |       |          | 2.0        | ** **                              |       |                    | 3.2        | ** **    |       |                                | 202        | ** **              |       |          | 17.8       | ** **                       |       |                    | 1.7        | ** **                                                                                        |         |   | 972 | ** ** |   |   | 19.8 | ** ** |   |   | 1.8 | ** ** |   |   | 1,175 | ** ** |   |   | — |   |   |
| **Peru**                            | ** ** |          | ** ** | ** **                              |       |                    | ** ** | ** **    |       |                                | ** ** | ** **              |       |          | ** ** | ** **                       |       |                    | ** ** | ** **                                                                                        |         |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Cerro Corona                        |       |          | 22.0       | ** **                              |       |                    | 1.2        | ** **    |       |                                | 816        | ** **              |       |          | 57.0       | ** **                       |       |                    | 1.0        | ** **                                                                                        |         |   | 1,761 | ** ** |   |   | 79.1 | ** ** |   |   | 1.0 | ** ** |   |   | 2,578 | ** ** |   |   | — |   |   |
| **Total Surface**                   |       |          | 174.1      | ** **                              |       |                    | 1.3        | ** **    |       |                                | 7464       | ** **              |       |          | 237.2      | ** **                       |       |                    | 1.2        | ** **                                                                                        |         |   | 9,495 | ** ** |   |   | 411.2 | ** ** |   |   | 1.3 | ** ** |   |   | 16,960 | ** ** |   |   | 550 |   |   |
| **Total**                           |       |          | 234.8      | ** **                              |       |                    | 2.9        | ** **    |       |                                | 22,048     | ** **              |       |          | 361.0      | ** **                       |       |                    | 3.5        | ** **                                                                                        |         |   | 41,072 | ** ** |   |   | 595.9 | ** ** |   |   | 3.3 | ** ** |   |   | 63,122 | ** ** |   |   | 2,033 |   |   |

----

Notes:

(1)           (a)   Quoted asmill delivered tons and Run of Mine, or RoM, grades, inclusive of all miningdilutions and gold losses except mill recovery. Metallurgical recovery factorshave not been applied to the reserve figures. The approximate metallurgicalfactors are as follows: (1) Driefontein 97%; (2) Kloof 97%;(3) Beatrix 96%; (4) Tarkwa 95% for milling, 64% for heap leach;(5) Damang 90.9% to 93.5%; (6) St. Ives 85% to 95% for milling, 55%to 60% for heap leach; and (7) Agnew 93% to 95%. The metallurgicalrecovery is the ratio, expressed as a percentage, of the mass of the specificmineral product actually recovered from ore treated at the plant to its totalspecific mineral content before treatment. The South African operations have a fairlyconsistent metallurgical recovery, while the recoveries on the Internationaloperations vary according to the mix of the source material and method oftreatment.

(b)   For Driefontein, Kloof andBeatrix, a gold price of Rand 92,000 per kilogram ($400 per ounce at anexchange rate of Rand 7.15 per $1.00) was applied in calculating ore reservefigures. For the Tarkwa and Damang 

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operations and the Cerro Corona Project, ore reserve figures are basedon an optimized pit at a gold price of $400 per ounce. For the Australianoperations ore reserve figures are based on a gold price of A$560 per ounce($400 per ounce at an exchange rate of A$1.40 per $1.00). Open pit ore reservesat the Australian operations are similarly based on optimized pits. The goldprice used for reserves is the three-year average, calculated on a monthlybasis, of the London afternoon fixing price of gold.

(c)    For the South Africanoperations, mine dilution relates to the difference between the mill tonnageand the stope face tonnage and includes other sources stoping (which is wastethat is broken on the mining horizon, other than on the stope face),development to mill and tonnage discrepancy (which is the difference betweenthe tonnage expected on the basis of the mine’s measuring methods and thetonnage accounted for by the plant). For the International operations, dilutionrelates to unplanned waste and/or low-grade material being mined and deliveredto the mill. Ranges are given for those operations that have multiple orebody stylesand mining methodologies. The mine dilution factors are as follows:(i) Driefontein 24%; (ii) Kloof 22%; (iii) Beatrix 23%;(iv) Tarkwa 10%; (v) Damang 11% to 15%; (vi) St. Ives 16% to18%; and (vii) Agnew 10% to 20%.

(d)   The mining recovery factor relatesto the proportion or percentage of ore mined from the defined orebody at thegold price used for the declaration of reserves. This percentage will vary frommining area to mining area. This percentage reflects planned and scheduledreserves against total potentially available reserves (at the gold price usedfor the declaration of reserves), with all modifying factors, miningconstraints and pillar discounts applied. The mining recovery factors are asfollows: (i) Driefontein 86.5%; (ii) Kloof 61%; (iii) Beatrix65%; (iv) Tarkwa 95%; (v) Damang 91.6%; (vi) St. Ives 81%; and(vii) Agnew 96%.

(e)   The paylimit (South Africanoperations) and cut-off grade (International operations) vary per shaft, openpit or underground mine, depending on the respective costs, depletion schedule,ore type and dilution. The following are the average or range of values appliedin the planning process: (i) Driefontein 1,520 cm.g/t; (ii) Kloof1,500 cm.g/t; (iii) Beatrix 970 cm.g/t; (iv) Tarkwa 0.33 g/t for heapleach and 0.54 g/t for mill feed; (v) Damang 0.89 g/t for fresh ore and0.59 g/t for oxide ore; (vi) St. Ives 0.8 g/t for heap leach, 1.0 g/t formill feed—open pit, and 2.2—5.1 g/t for mill feed—underground; (vii) Agnew0.71-0.89 g/t for mill feed—open pit, and 3.1—6.1 g/t for mill feed—underground.

(f)    Totals may not sum due torounding. Where this occurs it is not deemed significant.

(2)           Actual gold produced after metallurgical recovery.

(3)           Above infrastructure reserves relate to mineralizationwhich is located at a level at which an operation currently has infrastructuresufficient to allow mining operations to occur. Below infrastructure reservesrelate to mineralization which is located at a level at which an operationcurrently does not have infrastructure sufficient to allow mining operations tooccur, but where the operation has made plans to install additionalinfrastructure in the future which will allow mining to occur at that level.

(4)           Includes some gold produced from stockpile materialwhich cannot be separately measured.

(5)           Excludes inferred material within the pitdesign.

The following table sets forth the proven and probablecopper reserves of the Cerro Corona Project as of December 31, 2005, thatare attributable to Gold Fields.

**Copper ore reservestatement as of December 31, 2005**

| ** **                   | ** ** | **Tons**      | ** ** | **Proven  Reserves  Grade Cu** | ** ** | **Cu**                 | ** ** | **Tons**      | ** ** | **Probable  Reserves  Grade Cu** | ** ** | **Cu**                 | ** ** | **Tons**      | ** ** | **Total  Reserves  Grade Cu** | ** ** | **Cu**                 | ** ** | **Attributable  Copper  production  in the  6 months  ended  December 31,  2005** | ** ** |
|------------------------------|------------|---------------|------------|-------------------------------------|------------|------------------------|------------|---------------|------------|---------------------------------------|------------|------------------------|------------|---------------|------------|------------------------------------|------------|------------------------|------------|--------------------------------------------------------------------------------------------------|------------|
| ** **                   | ** ** | **(million)** | ** ** | **(%)**                             | ** ** | **(million lbs)** | ** ** | **(million)** | ** ** | **(%)**                               | ** ** | **(million lbs)** | ** ** | **(million)** | ** ** | **(%)**                            | ** ** | **(million lbs)** | ** ** | **(million lbs)**                                                                           | ** ** |
| **Surface  (Open Pit) Peru** | ** ** |          | ** ** | ** **                          |       |                   | ** ** | ** **    |       |                                  | ** ** | ** **             |       |          | ** ** | ** **                         |       |                   | ** ** | ** **                                                                                       |       |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Cerro Corona                 |       |          | 20.7       | ** **                          |       |                   | 0.6        | ** **    |       |                                  | 288        | ** **             |       |          | 55.1       | ** **                         |       |                   | 0.5        | ** **                                                                                       |       |   | 591 | ** ** |   |   | 75.8 | ** ** |   |   | 0.5 | ** ** |   |   | 879 | ** ** |   |   | — | ** ** |   |

 

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Theamount of gold mineralization that Gold Fields can economically extract, andtherefore can classify as reserves, is very sensitive to fluctuations in theprice of gold. At gold prices different from the gold price of $400 per ounceused to estimate Gold Fields’ attributable reserves of 63.1 million ounces ofgold as of December 31, 2005 listed above, Gold Fields’ operations wouldhave had significantly different reserves. Based on the same methodology andassumptions as were used to estimate Gold Fields’ reserves as of December 31,2005 listed above, but applying different gold prices that are 10% above andbelow the $400 per ounce gold price used to estimate Gold Fields’ attributablereserves, the attributable gold reserves of Gold Fields’ operations would havebeen as follows:

| ** **     | ** ** | **$360/oz**             | ** **   | **$400/oz** | ** ** | **$440/oz** | ** ** |
|----------------|------------|-------------------------|--------------|-------------|------------|-------------|------------|
| ** **     | ** ** | **(‘000 oz)** | *** *** |
| Driefontein(1) |       | 14,127                  | (2)          | 22,616      |       | 22,723      |       |
| Kloof(1)       |       | 10,629                  | (3)          | 14,289      |       | 15,723      |       |
| Beatrix(1)     |       | 6,709                   |         | 8,235       |       | 9,669       |       |
| Tarkwa         |       | 8,779                   |         | 10,256      |       | 12,816      |       |
| Damang         |       | 880                     |         | 994         |       | 1,050       |       |
| St. Ives       |       | 1,908                   |         | 2,207       |       | 2,386       |       |
| Agnew          |       | 625                     |         | 772         |       | 840         |       |
| Cerro Corona   |       | 2,419                   |         | 2,578       |       | 2,578       | (4)        |
| Total(1)(5)    |       | 46,076                  |         | 61,947      |       | 67,785      |       |

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Notes:

(1)           South African operations’ reserves include rock dumps.

(2)           Excludes Shaft No. 5 below infrastructure materialthat would not be economical to mine, and thus would not be a reserve, at thislower gold price.

(3)           Excludes revised Kloof Extension Area, or KEA, belowinfrastructure material that would not be economical to mine, and thus wouldnot be a reserve, at this lower gold price.

(4)           The tailings management facility, or TMF, has a finitecapacity of 90Mt and the ore reserves therefore cannot change once the TMF hasbeen filled.

(5)           The sensitivity analyses are calculated as 10% aboveand below the base price in the local currency of the respective operation,with Ghana and Cerro Corona in US$, at an exchange rate of Rand 7.15 per $1.00for the South African operations and A$1.40 per $1.00 for the Australianoperation. Choco 10 was acquired by Gold Fields in early 2006, and, because equivalentsensitivities to those declared above were not available, they have beenexcluded from the above table.

The London afternoon fixing price for gold on November 15,2006 was $617.75 per ounce.

Gold Fields’ attributable gold reserves increased from62.8 million ounces at June 30, 2005 to 63.1 million ounces at December 31,2005. This net increase, post-mining depletion, was primarily due to theinclusion of the Choco 10 mine.

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Theamount of copper mineralization that Gold Fields can economically extract, andtherefore can classify as reserves, is sensitive to fluctuations in the priceof copper. At copper prices different from the copper price of $1.00 per poundused to estimate Gold Fields’ attributable copper reserves of 879 millionpounds as of December 31, 2005 listed above, Gold Fields’ operations wouldhave had significantly different copper reserves. Based on the same methodologyand assumptions as were used to estimate Gold Fields’ copper reserves as ofDecember 31, 2005 listed above, but applying different copper prices thatare 10% above and below the copper price of $1.00 per pound used to estimateGold Fields’ attributable copper reserves, the attributable copper reserves ofGold Fields’ operations would have been as follows:

| ** **   | ** ** | **$0.90/lb**                       | ** **   | **$1.00/lb** | ** ** | **$1.10/lb** | ** ** |
|--------------|------------|------------------------------------|--------------|--------------|------------|--------------|------------|
| ** **   | ** ** | **Copper (million lbs)** | *** *** |
| Cerro Corona |       |                               | 861          |         |       |         | 879        |   |   |   | 879 | (1) |   |
|              |            |                                    |              |              |            |              |            |  |  |  |  |  |  |

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Note:

(1)           Under the current tailings dam design at the CerroCorona Project, reserves would not respond to an upward movement of the copperprice because of current capacity constraints at the tailings storage facilityfor the Cerro Corona Project.

GoldFields’ methodology for determining its reserves is subject to change and isbased upon estimates and assumptions made by management regarding a number offactors as noted above under “—Methodology.” Accordingly, thesensitivity analysis of Gold Fields’ reserves provided above should not berelied upon as indicative of what the estimate of Gold Fields’ reserves wouldactually be or have been at the gold or copper prices indicated, or at anyother gold or copper price, nor should it be relied upon as a basis forestimating Gold Fields’ ore reserves based on the current gold or copper priceor what Gold Fields’ reserves will be at any time in the future. See “RiskFactors—Gold Fields’ reserves are estimates based on a number of assumptions,any changes to which may require Gold Fields to lower its estimated reserves.”

***Geology***

The majority of Gold Fields’ gold production isderived from deep-level underground gold mines located along the northern andwestern margins of the Witwatersrand Basin in South Africa. These propertiesinclude the Beatrix operation, the Driefontein operation and the Kloofoperation. These mines are typical of the many Witwatersrand Basin operations,which together have produced over 1.3 billion ounces of gold over a period ofmore than 100 years.

The Witwatersrand Basin comprises a 6,000 metervertical thickness of sedimentary rocks, extending laterally for some 300kilometers northeast to southwest by some 100 kilometers northwest tosoutheast, generally dipping at shallow angles towards the center of the basin.The basin outcrops at its northern extent near Johannesburg but to the west,south and east it is overlaid by up to 4,000 meters of volcanic and sedimentaryrocks. The Witwatersrand Basin is Achaean in age, meaning the sedimentary rocksare of the order of 2.7 to 2.8 billion years old.

Gold mineralization occurs within laterally extensivequartz pebble conglomerate horizons called reefs, which are developed aboveunconformable surfaces near the basin margin. As a result of faulting andprimary controls on mineralization structure, the gold fields are notcontinuous and are characterized by the presence or dominance of different reefunits. The reefs are generally less than two meters in thickness and are widelyconsidered to represent laterally extensive braided fluvial deposits orunconfined flow deposits, which formed along the flanks of alluvial fan systemsaround the edge of an inland sea. Dykes and sills of diabase or doleriticcomposition are developed within the Witwatersrand Basin and are associatedwith several intrusive and extrusive events.

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The gold generally occurs in native form, oftenassociated with pyrite and carbon. Pyrite and gold within the reefs display avariety of forms, some obviously indicative of detrital transport within thedepositional system and others suggesting crystallization within the reefitself.

The most fundamental controls of gold distribution arethe primary sedimentary features such as facies variation and channeldirections. Consequently, the modeling of sedimentary features within the reefsand the correlation of payable grades with certain facies is key to in situreserve estimation as well as effective operational mine planning and gradecontrol.

For a discussion of the geological features present at theTarkwa, Damang, St. Ives, Agnew and Choco 10 mines, see the geology discussioncontained in the description of each of those mines found below under “—GoldFields’ Mining Operations—Tarkwa,” “—Gold Fields’ Mining Operations—Damang,” “—GoldFields’ Mining Operations—St. Ives,” “—Gold Fields’ Mining Operations—Agnew”and “—Gold Fields’ Mining Operations—Choco 10.”

**Description ofMining Business**

The discussion belowprovides a general overview of the mining business as it applies to GoldFields.

**Exploration**

Exploration activities arefocused on the extension of existing orebodies and identification of neworebodies both at existing sites and at undeveloped sites. Once a potentialorebody has been discovered, exploration is extended and intensified in orderto enable clearer definition of the orebody and the potential portions to bemined. Geological techniques are constantly refined to improve the economicviability of prospecting and mining activities.

**Mining**

Gold Fields currentlymines only gold, with silver as a by-product. As and when the Cerro CoronaProject begins production, Gold Fields expects also to have copper as aby-product. The mining process can be divided into two principal activities: (1) developingaccess to the orebody; and (2) extracting the orebody once accessed. Thesetwo processes apply to both surface and underground mines.

**Underground Mining**

***Developing Access to the Orebody***

For Gold Fields’ SouthAfrican underground mines, access to orebodies is provided through vertical,inclined and declined shaft systems. If additional depth is required to fullyexploit the reef, and it is economically feasible, then secondary(sub-vertical) or tertiary shafts are sunk from the underground levels.Horizontal development at various intervals of a shaft, known as levels,extends access to the horizon of the reef to be mined. On-reef development thenprovides specific mining access. South African mine layouts generally follow alinear, crisscross pattern, while Australian mines have more varied layouts andtypically use a spiral-shaped decline layout to descend alongside theorebody.

***Extracting the Orebody***

Once an orebody has beenaccessed, drilling, blasting, supporting and cleaning activities are carriedout on a daily basis and broken ore is scraped into and down gullies to orepasses, where it is channeled to the crosscut below. The ore is then hauled byrail to shaft ore passes, where it is tipped into loading stations for hoistingto the surface. Mining methods employed at Gold Fields’ operations includelongwall mining, closely spaced dip pillar mining and conventional scatteredmining. In Australia, extraction methods are highly mechanized, with mechanizedequipment used within the declines and at the stope for drilling, 

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loading and hauling. SouthAfrican mining methods tend to be more labor intensive than the Australianoperations.

**Open Pit Mining**

***Developing Access to the Orebody***

In open pit mining, accessto the ore is achieved by stripping the overburden in benches of fixed heightto expose the ore below. This is most typically achieved by drilling andblasting an area, loading the broken rock with excavators into dump trucks andhauling the rock and/or soil to dumps.

***Extracting the Orebody***

Extraction of the orebodyin open pit mining involves the same activity as in stripping the overburden.The rock is drilled and blasted, and lines are established demarcating ore fromwaste material. The ore is loaded into dump trucks and hauled to the crusher orstockpile, while the waste is hauled to waste rock dumps.

**Rock Dump andProduction Stockpile Mining**

Gold Fields mines surfacerock dumps and production stockpiles using mechanized earth moving equipment.

**Mine Planning andManagement**

Operational and planning management on the minesreceives support from corporate management and centralized support functions.The current philosophy is one of bottom-up management, with the non-financialoperational objectives at each mine defined by the personnel at the mine basedon parameters, objectives and guidelines provided by Gold Fields’ head office.This is based on the premise that the people on the ground have the bestunderstanding of what is realistically achievable.

Gold Fields has a two-stage mine planning process.Each operation compiles a life of mine, or LoM, plan during the first half ofeach fiscal year and a detailed two-year operational plan during the secondhalf of each fiscal year, based on financial parameters issued to the operationby Gold Fields’ Operating Committee. See “Directors, Senior Management andEmployees—Operating Committee.” The operational plan is presented to GoldFields’ Board before the commencement of each fiscal year. The planning processis sequential and is based upon geological models, evaluation models, depletionschedules and, ultimately, financial analysis. Capital planning is formalizedpursuant to Gold Fields’ capital spending planning process. Projects arecategorized in terms of total expenditure, and all projects involving amountsexceeding Rand 75 million (South Africa), A$15 million (Australia) and US$10million (Ghana/Peru/Venezuela) are submitted to the full Board for approval.

The South Africanoperations have implemented an integrated electronic reserve and resourceinformation system, called IRRIS, to enhance LoM planning capabilities. Thissystem provides a common planning platform to facilitate quicker, more flexibleand more accurate short- and long-term planning and more timely identificationof production shortfalls. Short-term planning on the operations is conductedmonthly and aligned with the operational plan. Financial and economicparameters for the LoM and the operational plan are issued to the operationsfrom the head office and relevant survey and evaluation factors are determinedin accordance with Gold Fields’ guidelines. Significant changes in the LoMplans may occur from year to year as a result of mining experience, new orediscoveries, changes in the ore reserve estimates, changes in mining methodsand rates, process changes, investment in new equipment and technology and goldprices.

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**Processing**

Gold Fields currently has15 gold plants (seven in South Africa, four in Ghana, three in Australia andone in Venezuela) which treat ore to extract gold. A typical gold processingplant circuit includes two phases: comminution and treatment.

***Comminution***

Comminution is the processof breaking up the ore to expose and liberate the gold and make it availablefor treatment. Conventionally, this process occurs in multi-stage crushing andmilling circuits, which include the use of jaw and gyratory crushers and rod,tube, ball and semi-autogenous grinding, or SAG, mills. Most of Gold Fields’milling circuits utilize SAG milling where the ore itself and steel balls areused as the primary grinding media. Through the comminution process, ore isground to a minimum size before proceeding to the treatment phase.

***Treatment***

In all of Gold Fields’ metallurgical plants, gold isextracted into a leach solution by leaching with cyanide in agitated tanks.Gold is then extracted onto activated carbon from the solution using either theCIL or CIP process. The activated carbon is then eluted with gold recovered byelectrowinning.

Gold Fields has three heap leach operations. In theheap leach process, crushed ore is stacked on impervious leach pads and acyanide leaching solution is sprayed on the pile. The solution percolates throughthe heap and dissolves liberated gold. A system of underdrains removes thegold-containing solution, which is then passed through columns containingactivated carbon. The loaded carbon is then eluted and the gold recovered byelectrowinning.

As a final recovery step,gold recovered from the carbon using the above processes is smelted to producerough gold bars. These bars are then transported to the refinery which isresponsible for refining the bars to good delivery status.

**ProductivityInitiatives**

Gold Fields hasundertaken a number of initiatives intended to increase productivity and costefficiencies at its mines. These initiatives form part of the strategicobjective of operational excellence and include:

·       **Project 500**:   This initiative wasintroduced in September 2003 in order to increase revenue and reducecosts. It was comprised of two sub-projects, namely:

·        **Project 400**, which was aimed at optimizingrevenue by generating a further Rand 400 million per annum on a sustainablebasis. This was to be achieved through a number of productivity initiativesfocused on improving quality volumes, by eliminating non-contributingproduction and replacing low-grade surface material with higher marginunderground material. The objective was to increase mining volumes whilemaintaining yields as close as possible to life of mine reserve yields.

·        **Project 100**, which was a******stores-basedconsumption project focused on achieving cost savings through improvedstandards and norms.

These projects haveproved successful and led to additional projects, Project 100+ and ProjectBeyond.

·       **Project 100+**:   This initiative isfocused on adding ongoing and sustainable cost savings at the South Africanoperations. The objectives for 2006 were to improve efficiencies and controlsin labor management, transport and maintenance spending and to improve employeewellness and working 

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conditions. Currentprojects include a labor optimization project, a management project focusing onhot and cold water systems and an initiative to replace diesel operatedlocomotives with battery operated locomotives, all of which are expected toproduce savings and other benefits in fiscal 2007. Additionally, Gold Fieldsexpects the shutdown of pumping at Kloof’s Shaft No. 5 to continue torealize savings in fiscal 2007 and the Company is continuing to installequipment in furtherance of a pump efficiency monitoring initiative that GoldFields plans to roll out in the second quarter of fiscal 2007.

·       **Project Beyond**:   This project, launchedin May 2004, is a procurement supply initiative targeting savings ofbetween R200 and R300 million per annum, over a three-year period. Continuedintegrated supply chain optimization during fiscal 2007 aims to deliver furthervalue so as to offset the impact of general inflation, in spite of prevailingcommodity price pressures, and will include specific focus on total cost ofslurry and mud pumps, salvage reclaim optimization models, underground servicesrisk mitigation models (i.e., selectively reducing higher risk outsourcecontracts), drill steel issue and refurbishment controls and total costoptimization and collaborative capital procurement.

·       **Explosives**:   This initiativeoriginated from Project Beyond, with a focus on optimizing spending onexplosives and increasing productivity through the improvement of blastingefficiencies. However, the scope of the initiative now includes review of themost appropriate and cost effective blasting products and methods. Gold Fieldshas formed strategic relationships with explosives and accessories suppliers toprovide the operations with efficient blasting solutions. Gold Fields expectsto realize benefits of this initiative in fiscal 2007.

·       **Mine Design and Optimization**:   Improvedmine design and configuration focus on removing constraints, improvingventilation and lowering temperatures. In fiscal 2006, this initiative alsofocused on metallurgical plant modernization and obtaining further benefitsfrom new technology systems like IRRIS.

·       **Flexibility**:   Together with improvedmine design and configuration, this initiative to increase development rates atthe South African operations is aimed at providing the cornerstone of greaterore reserve and mining flexibility.

·       **Training**:   Initiatives to improve theability of employees to perform their work include both practical andtheoretical aspects:

·        **Practical**:   Practical traininginitiatives include programs that are focused on improving skills for miningsupervisors and rock drill operators and improving night shift cleaning as wellas initiatives to improve team effectiveness.

·        **Theoretical**:   Theoretical traininginitiatives include implementation of e-learning to assist in the theoretical aspectsof training, with an increased focus going forward on leadership andsupervisory training.

Each operation has aprogram in place to motivate its employees towards the goals of increasedproductivity and operational excellence, which is reinforced by a recognitionand reward program. Gold Fields is committed to encouraging motivation andincreased ability within the workforce to ensure healthy employees committed toGold Fields and productivity improvement.

**Refining andMarketing**

Gold Fields has appointed Rand Refinery Limited, orRand Refinery, to refine all of Gold Fields’ South African produced gold. RandRefinery is a private company in which Gold Fields holds a 33.1% interest, withthe remaining interests held by other South African gold producers.

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On June 1, 2004 Gold Fields exercised its rightunder its agreement with Rand Refinery to sell all of Gold Fields’ goldproduction from its South African operations, with effect from October 1,2004. Prior to that time, Rand Refinery was the exclusive agent to sell GoldFields’ South African produced gold, and Gold Fields’ treasury was appointed byRand Refinery to act as its agent with respect to the sale of 50% of such goldto international customers. Under the new arrangement, Rand Refinery advises GoldFields from time to time on the amount of gold available for sale. Gold Fieldssells the gold at the London afternoon fixing price for the day if it is soadvised. Within two business days after receipt of this advice, Gold Fieldsdeposits an amount in U.S. dollars equal to the value of the gold sold intoRand Refinery’s nominated U.S. dollar account. On the date of the deposit, RandRefinery, in turn, deducts any refining and administrative charges payable byGold Fields relating to such amount of gold, and deposits the balance of themoney into the nominated U.S. dollar account of Gold Fields. Gold Fields paysRand Refinery an amount for administrative services associated with delivery ofthe refined gold of $0.05 per troy ounce of gold and a refining fee of $0.32per troy ounce of gold received by Rand Refinery.

All gold produced by Gold Fields at the Tarkwa andDamang mines is refined by Rand Refinery pursuant to two non-exclusiveagreements entered into in October 2004 between Rand Refinery and Gold FieldsGhana, and between Rand Refinery and Abosso. Under these agreements, RandRefinery collects, refines and sells gold as instructed by Gold Fields Ghanaand Abosso. Rand Refinery assumes responsibility for the gold upon collectionat either the Tarkwa or Damang mine. The gold is then transported to the RandRefinery premises in Johannesburg, South Africa, where it is refined. GoldFields Ghana and Abosso reimburse Rand Refinery for transportation costs. Underthese agreements, Rand Refinery sells the refined gold on behalf of Gold FieldsGhana and Abosso at the London afternoon fixing price for gold on the date ofdelivery. Rand Refinery receives refining fees of $0.33 per ounce of goldreceived, and a realization fee equal to $0.16 per ounce of gold refined. Eachof these agreements continues until either party terminates it upon 90 days’written notice.

In Australia, all gold produced by St. Ives and Agnewis refined by AGR Joint Venture, which is tradenamed Australian GoldRefineries, or AGR Matthey. The AGR Joint Venture is a partnership betweenAustralian Gold Pty Ltd and WA Mint, which is trade named Perth Mint. Under anagreement which became effective on September 1, 2002 and was amended on September 1,2005 among St. Ives Gold Mining Company Pty Ltd, Agnew Gold Mining Company PtyLtd and AGR Matthey, AGR Matthey refines the gold produced by St. Ives andAgnew for a refining fee of A$0.38 per ounce of gold, which is scheduled tofurther increase to A$0.44 per ounce of gold from January 1, 2007, plus atransportation fee. The transportation fee is calculated as A$0.096 per ounceplus fixed fees per shipment. AGR Matthey retains 0.1% of the gold and 1.0% ofany silver it refines to cover losses in the refining process. AGR Mattheycollects the gold from St. Ives and Agnew, refines it and credits the gold tothe relevant metals account held by St. Ives and Agnew with AGR Matthey. St.Ives and Agnew then inform the Gold Fields corporate office in Johannesburg ofthe amount available for sale in Perth, Australia. After confirming therelevant amount with AGR Matthey, Gold Fields either sells the gold directly toAGR Matthey at the London afternoon fixing price less $0.10 per ounce or itswaps the gold into London at a fee of $0.27 per ounce, which means that AGRMatthey provides gold in London for sale by Gold Fields in an amount equal tothe gold from St. Ives and Agnew located in Perth. In the case of a locationswap, AGR Matthey is instructed to credit St. Ives’ or Agnew’s metal accountheld with Deutsche Bank, London. Once the gold is sold to a third party,Deutsche Bank, London is instructed by Gold Fields to deliver the gold to therelevant counterparty bank. This agreement continues indefinitely untilterminated by either party upon 90 days’ written notice.

In Venezuela, a minimum of 15% ofthe gold produced must be sold locally. Currently, Gold Fields sells goldlocally to a small group of local buyers. These buyers pay in advance ofcollection of the gold at a price based on the London afternoon fixing price onthe day the transaction is negotiated. Actual delivery takes placeapproximately four days later, once the proceeds have been deposited in Gold 

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Fields’ bank account. The pricefor the transaction is converted to Bolivars at the official exchange rate of2,150 Bolivars per dollar and payment is made in Bolivars at this rate, less adiscount which is currently a maximum of 3% and which is subject to negotiationwith each purchaser. On June 17, 2005, PMG entered into a Gold SupplyAgreement with International Gold and Silver B.V., or IGSBV, a Dutch GoldFields-related company, for the sale or delivery as payment in kind of all thegold produced in Choco 10, up to a maximum aggregate annual amount of 200,000ounces of gold. Under the Venezuelan exchange control system, proceeds of salesunder this agreement must be repatriated to Venezuela and converted to Bolivarsat the official exchange rate of 2,150 Bolivars per U.S. dollar within six months.See “—Regulatory and Environmental Matters—Venezuela—Exchange Controls.” Inturn, IGSBV entered into a contract as of August 15, 2005, with MKSFinance S.A., or MKS, in Switzerland for the refining and purchase of exportedgold. Under this agreement, Gold Fields is able to sell the gold to MKS, orarrange for it to be sold to a third party. If it sells to MKS, the price isagreed between Gold Fields and MKS as the spot price, the London AM or PMfixing price or any other agreed price on the so-called outturn date, which isnormally the fourth or fifth day after the unrefined gold is delivered to therefinery. Gold Fields has the right to elect to receive a provisional paymentof up to 95% of the estimated value of the gold one working day after receiptof the unrefined gold at the refinery. In that event, MKS is entitled to chargeinterest on the prepayment amount until the outturn date and the final paymentis made based on the spot rate on the outturn date. The refining fee ortreatment charge is either $0.49 per ounce or $0.44 per ounce, depending on thegold content of the material being refined, and Gold Fields may also paytransportation costs depending on where the gold is delivered to MKS. Theagreement expires on September 30, 2007 and will be automatically renewedfor a period of 24 months unless either party gives at least one month’s noticethat it wishes to terminate the agreement on its expiration date.

Gold Fields supports andparticipates in the gold marketing activities of the World Gold Council, orWGC, and contributes $1.75 per ounce of the gold it produces in South Africaand Australia and $1.75 per ounce of its attributable production from Tarkwa tothe WGC in support of its activities.

**Services**

Mining activitiesrequire extensive services, located both on the surface and underground at themines. Services include:

·       mining-relatedservices such as engineering, rock mechanics, ventilation and refrigeration,materials handling, operational performance evaluation and capital planning;

·       safetyand training;

·       housingand health-related services, including hostel and hospital operations;

·       geologicalservices, including mine planning and design;

·       reservesmanagement including sampling and estimation;

·       metallurgy;

·       equipmentmaintenance; and

·       assayservices.

Most of these services areprovided directly by Gold Fields, either at the operation level or through thehead office, although some are provided by third-party contractors.

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**Gold Fields’ MiningOperations**

Gold Fields conductsunderground mining operations at each site except Tarkwa, Damang and Choco 10and conducts some processing of surface rock dump material at Driefontein,Kloof and Beatrix. Tarkwa, Damang and Choco 10 are open pit mines and alsoprocess material from production stockpiles. St. Ives and Agnew togetherinclude underground and open pit operations and also process material fromproduction stockpiles.

***Total Operations***

The following chartdetails the operating and production results for each of fiscal 2004, 2005 and2006 for all operations owned by Gold Fields as of the end of that fiscal year.

| ** **                           | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------|------------|----------------------------------------|------------|
| **Production**                       | ** ** | ** **                             | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| Tons (‘000)                     |       | 46,028                                 |       | 47,880 |   | 49,366 |   |
| Recovered grade (g/t)                |       | 3.0                                    |       | 2.9 |   | 2.7 |   |
| Gold produced (‘000 oz)(1)      |       | 4,406                                  |       | 4,488 |   | 4,348 |   |
| **Results of operations ($million)** |       |                                   |       |   |   |   |   |
| Revenues                             |       | 1,706.2                                |       | 1,893.1 |   | 2,282.0 |   |
| Total production costs(2)            |       | 1,538.3                                |       | 1,764.0 |   | 1,860.6 |   |
| Total cash costs(3)                  |       | 1,332.5                                |       | 1,483.3 |   | 1,590.6 |   |
| Cash profit(4)                       |       | 373.7                                  |       | 409.8 |   | 691.4 |   |
| **Cost per ounce of gold ($)**       |       |                                   |       |   |   |   |   |
| Total production costs               |       | 349                                    |       | 393 |   | 428 |   |
| Total cash costs                     |       | 302                                    |       | 331 |   | 366 |   |
|                                      |            |                                        |            |  |  |  |  |  |  |

----

Notes:

(1)           In fiscal 2004, 4.158 million ounces were attributableto Gold Fields, in fiscal 2005, 4.221 million ounces were attributable to GoldFields and in fiscal 2006, 4.074 million ounces were attributable to GoldFields, with the remainder attributable to minority shareholders in the Ghanaoperation during fiscal 2004 and 2005 and attributable to minority shareholdersin both the Ghana and Venezuela operations in fiscal 2006. 

(2)           For a reconciliation of Gold Fields’ total productioncosts to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

(3)           For a reconciliation of Gold Fields’ total cash coststo production costs, see “Operating and Financial Review and Prospects—Resultsof Operations.”

(4)           Cash profit represents revenues less totalcash costs.

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***Underground Operations***

Thefollowing chart details the operating and production results for fiscal 2004,2005 and 2006 for all operations owned by Gold Fields as of June 30, 2006.The underground operations include all of the mines in the South African operationsand the underground portions of the mines in the Australian operation.

| ** **                                 | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------------|------------|----------------------------------------|------------|
| **Production**                             | ** ** | ** **                             | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| Tons (‘000)                           |       | 13,231                                 |       | 13,807 |   | 12,831 |   |
| Recovered grade  (g/t)                     |       | 7.0                                    |       | 7.1 |   | 7.1 |   |
| Gold produced  (‘000 oz)              |       | 2,982                                  |       | 3,172 |   | 2,915 |   |
| **Results of operations ($ million)** |       |                                   |       |   |   |   |   |
| Revenues                                   |       | 1,153.4                                |       | 1,336.4 |   | 1,526.1 |   |
| Total production  costs(1)                 |       | 1,139.6                                |       | 1,340.3 |   | 1,298.8 |   |
| Total cash costs(2)                        |       | 996.6                                  |       | 1,133.8 |   | 1,117.7 |   |
| Cash profit(3)                             |       | 156.8                                  |       | 202.6 |   | 408.4 |   |
| **Cost per ounce of gold ($)**             |       |                                   |       |   |   |   |   |
| Total production  costs                    |       | 382                                    |       | 423 |   | 446 |   |
| Total cash costs                           |       | 334                                    |       | 357 |   | 383 |   |
|                                            |            |                                        |            |  |  |  |  |  |  |

----

Notes:

(1)           For a reconciliation of Gold Fields’ total productioncosts to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

(2)           For a reconciliation of Gold Fields’ total cash coststo production costs, see “Operating and Financial Review and Prospects—Resultsof Operations.”

(3)           Cash profit represents revenues less total cash costs.

Tons milled from theunderground operations decreased from 13.8 million tons in fiscal 2005 to 12.8million tons in fiscal 2006. At the South African operations, the decrease wasmainly due to the effect of a week long strike in August 2005 and mininginflexibility at Kloof. The majority of the decrease from the rest of theoperations came from St. Ives, which mined only remnants from the previouslyprolific Junction mine in fiscal 2006, due to its depletion. The amount of goldproduced from underground operations decreased from 3.172 million ounces infiscal 2005 to 2.915 ounces in fiscal 2006. The average yield remained constantat 7.1 grams per ton.

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***Surface Operations***

Thefollowing chart details the operating and production results for the fiscalyear for all surface operations owned by Gold Fields as of June 30, 2006.Surface operations include all of the mines in the Ghana and Venezuelaoperations, the open pit portions of the mines in the Australian operation andthe surface rock dump material at the mines in the South African operation.

| ** **                                 | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------------|------------|----------------------------------------|------------|
| **Production**                             | ** ** | ** **                             | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| Tons (‘000)                           |       | 32,797                                 |       | 34,073 |   | 36,535 |   |
| Recovered grade  (g/t)                     |       | 1.4                                    |       | 1.2 |   | 1.2 |   |
| Gold produced  (‘000 oz)(1)           |       | 1,424                                  |       | 1,316 |   | 1,433 |   |
| **Results of operations ($ million)** |       |                                   |       |   |   |   |   |
| Revenues                                   |       | 552.8                                  |       | 556.7 |   | 755.9 |   |
| Total production  costs(2)                 |       | 398.7                                  |       | 424.7 |   | 561.8 |   |
| Total cash costs(3)                        |       | 335.9                                  |       | 349.5 |   | 472.9 |   |
| Cash profit(4)                             |       | 216.9                                  |       | 207.2 |   | 283.0 |   |
| **Cost per ounce of gold ($)**             |       |                                   |       |   |   |   |   |
| Total production  costs                    |       | 280                                    |       | 323 |   | 292 |   |
| Total cash costs                           |       | 236                                    |       | 265 |   | 330 |   |
|                                            |            |                                        |            |  |  |  |  |  |  |

----

Notes:

(1)           In fiscal 2004, 1.176 million ounces were attributableto Gold Fields, in fiscal 2005, 1.049 million ounces were attributable to GoldFields, and in fiscal 2006, 1.162 million ounces were attributable to GoldFields, with the remainder attributable to minority shareholders in the Ghanaoperations during fiscal 2004 and 2005 and attributable to both the Ghana andVenezuela operations in fiscal 2006.

(2)           For a reconciliation of Gold Fields’ total productioncosts to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

(3)           For a reconciliation of Gold Fields’ total cash coststo production costs, see “Operating and Financial Review and Prospects—Resultsof Operations.”

(4)           Cash profit represents revenues less total cash costs.

Tons milled from thesurface operations increased from 34.1 million tons in fiscal 2005 to 36.5million tons in fiscal 2006, primarily because of increased production from theGhana operations and St. Ives, which replaced reduced underground volume withsurface volume, and the tons gained from the newly acquired Choco 10 mine.

***Driefontein Operation***

*Introduction*

The Driefontein gold mineis located in the Northwest Province of South Africa in the Far West Randmining district, some 70 kilometers southwest of Johannesburg. Driefonteinoperates under a mining authorization with a total area of approximately 8,600hectares. It is an underground mine with nominal surface reserves representedby rock dumps that have been accumulated through the operating history of themine. Driefontein has seven operating shaft systems and three metallurgicalplants and operates at depths of between 700 meters and 3,420 meters. TheDriefontein operation has access to the national electricity grid and water,road and rail infrastructure and is located near regional urban centers whereit can routinely obtain needed supplies. In the year ended June 30, 2006,it produced 1.15 million ounces of gold. As of June 30, 2006, Driefonteinhad approximately 16,700 employees, including approximately 1,600 employed byoutside contractors.

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*History*

Driefontein was formedfrom the consolidation in 1981 of the East Driefontein and West Driefonteinmines. Gold mining began at Driefontein in 1952.

*Geology*

Driefontein is located inthe West Wits Line that forms part of the Far West Rand of the WitwatersrandBasin. The operation is divided into an Eastern Section and a WesternSection, separated by a bank anticline and associated faulting. Goldmineralization at Driefontein is contained within three reef horizons. TheCarbon Leader Reef, or Carbon Leader, the Ventersdorp Contact Reef, or VCR, andthe Middelvlei Reef, or MVR, occur at depths of between 500 meters and 4,000meters. Stratigraphically, the Carbon Leader is situated 40 to 70 meters below theVCR and MVR and is a generally high-grade reef comprising different facies anddips to the south at approximately 25 degrees. The Carbon Leader subcropsagainst the VCR in the eastern part of the mine. The west-dipping Bank Faultdefines the eastern limit of both reefs. The VCR is most extensively developedin the east, and subcrops to the west. The MVR is a secondary reef, situatedapproximately 50 meters above the Carbon Leader, and, at present, it is a minorcontributor to reserves and production. The average gold grades vary withlithofacies changes in all of the reefs.

*Mining*

The Driefontein operation is engaged in bothunderground and surface mining, and is thus subject to all of the undergroundand surface mining risks discussed in “Risk Factors.” Due to the operatingdepths and extensive mined out areas, seismicity and the damage caused byseismicity are serious safety and productivity issues at Driefontein. Theserious injury frequency rate for fiscal 2005 and fiscal 2006 remained constantat 7.4 serious injuries for every million hours worked. The serious injury ratefor fiscal 2004 was 7.3 serious injuries for every million hours worked. Infiscal 2006, the fatal injury frequency rate increased to 0.33 fatalities forevery million hours worked, as compared to 0.17 in fiscal 2005. The fatalinjury rate for fiscal 2004 was 0.28 for every million hours worked.

The primary safety challenges facing the Driefonteinunderground operation include falls of ground, seismicity, flammable gas, waterintrusion and rock temperatures. Water intrusion is dealt with throughdrilling, cementation sealing techniques and an extensive water-pumpingnetwork. Also, because rock temperatures tend to increase with depth,Driefontein requires an extensive cooling infrastructure to maintaincomfortable conditions for workers. Driefontein experienced underground firesin fiscal 2004, 2005 and 2006. In fiscal 2006, there were six fires but,although the fires were disruptive because areas affected had to be closedwhile damage was assessed and remedied, they did not have a significant effecton production levels at Driefontein.

During the 2006 fiscal year, Driefontein sufferedseveral seismic events, which resulted in four workers losing their lives.Driefontein also experienced several seismic events in fiscal 2005, whichresulted in a total of five workers losing their lives. Driefontein is seekingto reduce seismicity problems through using a combination of closely spaced dippillar mining techniques, the introduction of centralized blasting in areaswhere the density of mining activities requires a controlled blast and usingplant tailings as backfill support to stabilize the working areas. In addition,pre-conditioning, which alters the stress profile immediately ahead of themining face, is used where required, to reduce the chance of face ejection. Intotal during fiscal 2006, there were 15 fatalities at Driefontein due toseismicity, falls of ground and hauling accidents. In the first quarter offiscal 2007, there were two fatalities at Driefontein, due to a gravity fall ofground and a falling accident. Although some of the areas affected by theseismicity in fiscal 2006 and 2005 and to date in fiscal 2007 were temporarilyclosed, Driefontein did not experience material work stoppages inconnection with the events.

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In fiscal 2006, production was affected by industrialaction at Driefontein due to a national strike in August 2005 and onenational “stay away” day. In addition, production was affected by thedeclaration of a new public holiday, National Election Day, on March 1,2006. See “Directors, Senior Management and Employees—Labor Relations—SouthAfrica.”

Driefontein is currently in the process of aligningvarious initiatives in order to improve operational excellence. Theseinitiatives focus on improving mining efficiencies, including laborefficiencies, through the introduction of advanced technology in the mines suchas electric drilling machines, the optimization of underground transportationand tramming, electricity management and building high performance work teams.

In the northern, older portions of Driefontein, whichinclude Shaft Nos. 2, 6, 7 and 8, production is focused on remnant pillarextraction and accessing and mining the secondary reef horizons. In thesouthern, newer portions of the mine, which include Shaft Nos. 1, 4 and 5, thefocus is on scattered or longwall mining. Newer shafts in this southernportion, particularly those at the deepest levels of the mine, employ the closelyspaced dip pillar mining method. This method provides additional miningflexibility. The scattered mining method is not practiced at depth.

During fiscal 2006, Driefontein produced approximately1.0 million ounces of gold from underground operations, which was slightly lessthan planned. The shortfall was largely due to seismicity and a lack ofmineable face length at Shaft Nos. 4 and 6. For the same period, Driefonteindid not meet its development targets at Shaft Nos. 1 and 4, mainly due toseismicity. Driefontein’s productivity improvement strategies were severelyhampered by unavailable labor and industrial action, which led to lost days, aswell as unexpected levels of worker absence, which caused challenges inmanaging the mining process. In response, Driefontein initiated an intensiveprogram to focus on daily labor absence problems.

Although mining at Shaft No. 10 ceased in fiscal2004, the shaft is still used as a pumping shaft and Gold Fields continues tomonitor market conditions to assess the economic viability of recommencingmining at this shaft. No shafts have been closed at Driefontein since fiscal2004 and in fiscal 2006 no new shafts were opened.

In fiscal 2005, Gold Fields began a drilling program,or Depth Extension Project, to confirm grades and orebody structure of thebelow-infrastructure Carbon Leader reserves at Shaft No. 5. In fiscal2006, drilling proceeded at a rate slower than planned, with delays caused byvarious intersections of flammable gas. In the same period, optimizationstudies on the Depth Extension Project prompted the undertaking and completionof a feasibility study on a deepening project at Shaft No. 9, which isexpected to access the same below-infrastructure Carbon Leader reserves. As aresult of this study, the drilling program was relocated to the Shaft No. 9area, where it will be used to confirm geological structure and grades in theimmediate vicinity of the No. 9 sub-vertical shaft barrel. Drilling in thisarea is expected to be completed in fiscal 2007.

Regarding Driefontein’s surface operations, the plantclean-up operations which were undertaken from fiscal 2004 to 2006 are nowcomplete. Surface operations are now confined exclusively to the processing oflow grade surface material. The biggest risk facing the surface operations isthe decrease in grade of the remaining dumps. In order to manage this risk, thegrade of the rock dumps is monitored on a daily basis and the mining method cancater for screening (upgrading) if the grade drops below the required cut-offgrade. This process reduces the tonnage that will be available for processing.The surface operation safety risks include problems with ground stability,moving machinery and dust generation. Driefontein has a risk management systemin place that guides the mining of the rock dumps to minimize these risks.

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Detailedbelow are the operating and production results at Driefontein for the pastthree fiscal years.

| ** **                                 | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------------|------------|----------------------------------------|------------|
| **Production**                             | ** ** | ** **                             | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| Tons (‘000)                           |       | 6,438                                  |       | 6,694 |   | 6,867 |   |
| Recovered grade  (g/t)                     |       | 5.5                                    |       | 5.4 |   | 5.2 |   |
| Gold produced  (‘000 oz)              |       | 1,141                                  |       | 1,163 |   | 1,150 |   |
| **Results of operations ($ million)** |       |                                   |       |   |   |   |   |
| Revenues                                   |       | 440.4                                  |       | 489.7 |   | 599.9 |   |
| Total production  costs(1)                 |       | 405.6                                  |       | 442.3 |   | 467.6 |   |
| Total cash  costs(2)                       |       | 354.5                                  |       | 383.6 |   | 408.5 |   |
| Cash profit(3)                             |       | 85.9                                   |       | 106.1 |   | 191.4 |   |
| **Cost per ounce of gold ($)**             |       |                                   |       |   |   |   |   |
| Total production  costs                    |       | 355                                    |       | 380 |   | 407 |   |
| Total cash costs                           |       | 311                                    |       | 330 |   | 355 |   |
|                                            |            |                                        |            |  |  |  |  |  |  |

----

Notes:

(1)           For a reconciliation of Gold Fields’ total productioncosts to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

(2)           For a reconciliation of Gold Fields’ total cash coststo production costs, see “Operating and Financial Review and Prospects—Resultsof Operations.”

(3)           Cash profit represents revenues less total cash costs.

The increase in tonnage from fiscal 2005 to 2006 wasprimarily due to an increase in stope width, as a result of which more ore wasmined, and an increase in tons from surface operations. Gold productiondecreased slightly due to a decrease in recovered grade. Gold Fieldsexperienced an increase in total cash costs and total production costs perounce of gold from fiscal 2005 to fiscal 2006 at Driefontein, mainly due to anincrease in labor costs.

The increase in tonnage from fiscal 2004 to fiscal2005 was primarily due to higher surface waste dump rock processing, albeit ata slightly lower grade, together with a marginal increase in undergroundtonnage. The increase in ounces of gold produced occurred principally as aresult of the increase in underground yields in line with the strategy toreduce lower grade mining. Gold Fields experienced an increase in total cashcosts per ounce of gold from fiscal 2004 to fiscal 2005 at Driefontein as aresult of the average appreciation of the Rand against the U.S. dollar whichmore than offset a decrease in total cash costs in Rand terms.

Output quality of the Driefontein orebody decreasedover the course of fiscal 2006 primarily due to lower production levels at thehigh grade Shaft No. 4, while, across the other shafts at Driefontein,output quality remained consistent with the grade qualities in fiscal 2005.Output quality of the Driefontein orebody improved over the course of fiscal2005 largely as a result of the ongoing strategy to switch to mining highergrades.

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Thetotal shaft hoisting capacity of Driefontein is detailed below.

| **Shaft System** | ** ** | ** **       | ** ** | **Hoisting  capacity** | ** ** |
|-----------------------|------------|------------------|------------|------------------------|------------|
| ** **            | ** ** | **(tons/month)** | ** ** |
| No. 8            |       |             | 96,000     |                   |       |
| No. 6            |       |             | 118,000    |                   |       |
| No. 7            |       |             | 190,000    |                   |       |
| No. 1            |       |             | 155,000    |                   |       |
| No. 2            |       |             | 185,000    |                   |       |
| No. 4            |       |             | 180,000    |                   |       |
| No. 5            |       |             | 175,000    |                   |       |
| No. 10           |       |             | 121,000    |                   |       |

 

Assuming that Gold Fieldsdoes not increase or decrease reserve estimates at Driefontein and that thereare no changes to the current mine plan at Driefontein, Driefontein’s December 31,2005 proven and probable reserves of 22.6 million ounces of gold will besufficient to maintain production through approximately fiscal 2033. However,as discussed earlier in “Risk Factors” and “—Mine Planning and Management,”there are numerous factors which can affect reserve estimates and the mineplan, which thus could materially change the life of mine.

*Processing*

Thefollowing table sets forth year commissioned, processing techniques andprocessing capacity per month, as well as average tons milled per month andmetallurgical recovery factor during the fiscal year ended June 30, 2006,for each of the plants at Driefontein:

| **Processing Techniques** | ** ** |
|--------------------------------|------------|
| **Plant**                      | ** ** | ** ** | ** ** | **Year  commissioned(1)** | ** ** | **Comminution  phase** | ** ** | **Treatment  phase** | ** ** | **Capacity(2)** | ** ** | **Average milled  for the year  ended June 30,  2006** | ** ** | **Approximate  recovery factor  for the year  ended June 30,  2006(3)** | ** ** |
| ** **                     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **(tons/month)** | ** ** | **(tons/month)** | ** ** | ** ** | ** ** |
| No. 1 Plant               |       |   | 1972 |   |   | SAG  milling |   | CIP  treatment and  electrowinning |   |   | 240,000 |   |   |   | 230,420 |   |   |   | 97 | % |   |
| No. 2 Plant               |       |   | 1964 |   |   | SAG/ball  milling |   | CIP  treatment(4) |   |   | 240,000 | (5) |   |   | 215,478 |   |   |   | 95 | % |   |
| No. 3 Plant               |       |   | 1998 |   |   | SAG milling |   | CIP treatment(4) |   |   | 115,000 |   |   |   | 126,311 |   |   |   | 93 | % |   |

----

Notes:

(1)           No. 1 Plant was substantially upgraded in fiscal2004, and No. 2 Plant was substantially upgraded in fiscal 2003.No. 3 Plant was originally commissioned as a uranium plant and wasupgraded to a gold plant in 1998. Therefore, No. 3 Plant lists the yearcommissioned as a gold plant.

(2)           Nameplate capacity. Plant/Mill nameplate capacities arebased on a number of operating assumptions, including assumptions regarding theblend of soft and hard ores processed, that can change and which may result inan increased level of throughput over and above the designed nameplate capacity.

(3)           Percentages are rounded to the nearest whole percent.

(4)           After CIP treatment, electrowinning occurs atNo. 1 Plant.

(5)           Capacity was increased from 200,000 tons per month to240,000 tons per month during fiscal 2003.

No. 1 Plant was upgraded in fiscal 2004 with theinstallation of a new comminution circuit and the installation of a CIPtreatment facility. Gold Fields is currently working on an optimization programat this plant to improve throughput. No. 2 Plant was converted to aSAG/ball milling circuit in fiscal 2003.

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In fiscal 2006, theDriefontein plants collectively extracted approximately 96.5% of the goldcontained in ore delivered for processing.

*Capital Expenditure*

Gold Fields spentapproximately Rand 250 million on capital expenditure at the Driefonteinoperation in fiscal 2006, primarily on completion of main pumping and backfillarrangements, together with the commencement of new ore handling arrangementsat Shaft No. 1, the underground cooling plant at Shaft No. 5 and theshaft pillar extraction at Shaft No. 4. Gold Fields has budgetedapproximately Rand 300 million of capital expenditure at Driefontein for fiscal2007, principally for the completion of the Shaft No. 1 pumpinginfrastructure, the completion of the refrigeration remote cooling units at theboundary of Shaft No. 5 and other projects, including technical worksat the plants.

***Kloof Operation***

*Introduction*

Kloof is situatedapproximately 60 kilometers west of Johannesburg, near the towns ofCarletonville and Westonaria in the Gauteng Province of South Africa. The Kloofmine operates under a mining lease covering a total area of approximately20,100 hectares. It is principally an underground operation, with a limitedamount of surface rock dump material being processed. Kloof currently has fiveoperating shaft systems serviced by two metallurgical plants. Kloof is anintermediate and deep-level mine, with operating depths between 1,300meters and 3,500 meters below surface. The Kloof operation has access to thenational electricity grid and water, road and rail infrastructure and islocated near regional urban centers where it can routinely obtain neededsupplies. In the fiscal year ended June 30, 2006, it produced 0.914million ounces of gold. As of June 30, 2006, Kloof had approximately16,900 employees, including approximately 2,800 who were employed by outsidecontractors.

*History*

Kloof’s present scope ofoperations is the result of the consolidation of the Kloof, Libanon, Leeudoornand Venterspost mines. Gold mining began in the area now covered by theseoperations in 1934.

*Geology*

The majority of production at Kloof is from the VCR,which occurs at depths between 1,300 meters and 3,500 meters below surface. TheVCR is a tabular orebody that has a general northeast-southwest strike and dipsto the southeast at between 20 and 45 degrees. The MVR is classified asKloof’s secondary reef and minor production volumes are also delivered from theKloof Reef, or KR, and Libanon Reef, or LR.

Kloof lies between theBank Fault to the west, and the north trending West Rand Fault to the east. Thelatter truncates the VCR along the eastern boundary of the mine, with a 1 to1.5 kilometer up throw to the east. Normal faults are developed sub-parallel tothe westerly dipping West Rand Fault, with sympathetic north-northeast trendingdykes that show little to no apparent offset of the stratigraphy. A conjugateset of faults and dykes occurs on a west-southwest trend, with throws of 1 to15 meters. Structures that offset the VCR increase in frequency towards thesouthern portion of the mine as the Bank Fault is approached.

*Mining*

The Kloof operation is engaged in underground mining,and is thus subject to all of the underground risks discussed in “Risk Factors.”The primary challenge facing the Kloof operation is seismicity, and to a lesserextent flammable gas. Gold Fields seeks to reduce the impact of seismicity atKloof by using the closely spaced dip pillar mining method. Early detection andincreased ventilation of the shafts are being used to 

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minimize the risk of incidents caused by flammablegas. Also, as with Driefontein, Kloof requires extensive cooling infrastructureto maintain comfortable conditions for workers due to the extreme depth of itsoperations. The serious injury frequency rate at Kloof in fiscal 2006, 2005 and2004 was 8.3, 7.9 and 9.9 injuries per million hours worked, respectively. Thefatality frequency rate in fiscal 2006, 2005 and 2004 was 0.37, 0.28 and 0.41fatalities per million hours worked, respectively.

Sixteen workers lost their lives at Kloof in fiscal2006, as compared to the mine’s 12 fatalities in fiscal 2005, primarily due tofalls of ground and seismicity, but also as a result of a mud rush, anunderground fire, falling material and a shaft conveyance accident. In thefirst quarter of fiscal 2007, there were five fatalities at Kloof, four due togravity falls of ground and one due to seismicity. Management has reviewed thisincrease in injury frequency rates during fiscal 2006 and as a consequence hasintensified its campaign on safety at Kloof mine through its safety anddevelopment programs, including the Kloof *Eyethu*teamdevelopment program and the *Snakes*safetycampaign. These are team development programs that focus on the aspectspertaining to employee behavior that will impact positively on the operationalperformance, in terms of safety and productivity. Additionally, Kloof achievedone million fatality-free shifts in the fourth quarter of fiscal 2006 and ShaftNos. 4 and 7 each achieved one million fatality-free shifts as well.

In the first part of the 2006 fiscal year, some ofKloof’s planned production targets faced challenges. For example, in August,employees worked fewer shifts because of wage-related industrial action, andthere was a slow return to standard production levels thereafter. In additionto the national strikes, further work stoppages at Kloof in fiscal 2006were related to the National Election Day on March 1, 2006, two national “stayaway” days and a dispute relating to the Christmas break, which resulted in oneday’s production being lost before Christmas and a slow start up for the weekafter the Christmas break. There were no other interruptions to production dueto operational causes in fiscal 2006, although production was affected by thenew public holiday, National Election Day, on March 1, 2006. See “Directors,Senior Management and Employees—Labor Relations—South Africa.”

The first two quarters’ grades were lower thananticipated because of changes in the topography of the VCR, primarily in theeastern parts of the mine. As a result, grade management is increasinglyfocused on capturing the variability of the VCR model. During fiscal 2006,Kloof processed 61% less surface rock dump material and 7% less undergroundtonnage than in fiscal 2005. The recovered grade improved by 13% as a result ofthe reduced lower grade surface rock dump material. The net effect of the abovewas a decrease of 12% in gold production from fiscal 2005 to fiscal 2006.

The current preferred mining method at Kloof isclosely spaced dip pillar mining, with limited application of longwalling andremnant pillar mining in the mature areas. Shaft Nos. 1, 3, 4 and 7 provide themain centers of current production at Kloof.

Development and shaft infrastructure work for theextraction of the high-grade pillar at Shaft No. 1 commenced in July 2004and is expected to be completed in May 2015. An underground fire at thelower portions of this shaft in the fourth quarter of fiscal 2006 resulted in aloss of 68 kilograms of gold. Shaft No. 3 resorted to selective miningduring the year due to the high grade VCR terrace returned as low grade VCRslope reef. As a result, the overall mining extraction on the VCR horizondecreased and all future mining will be constrained by an ongoing geologicalexploration drilling program. Mining activity at Shaft No. 4, which beganproduction in early 2000, is still in the build up phase and is expected toreach planned sustainable production levels during fiscal 2008. Production atShaft No. 4 was below expectations in fiscal 2006 due to haulage,infrastructure and ventilation constraints, although production levels didincrease slightly at this shaft by fiscal year end. Shaft Nos. 2, 3 and 4principally exploit the VCR, Shaft No. 7 (previously the Leeudoorn Mine)exploits both the VCR and the KR and Shaft No. 1 exploits the secondaryMVR horizon. Future mining at Shaft No. 8 will be concentrated on the VCRhorizon, which should improve the overall grade profile and gold output.

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A feasibility study was completed for the developmentof a tertiary decline infrastructure to access the Kloof Extension Area (KEA),for which a drilling program was completed in fiscal 2005. Final board approvalfor the KEA project was granted in August 2006 and development hascommenced.

In fiscal 2006, a program was implemented at Kloof toaccelerate improvements in infrastructure and services to increase flexibilityand other conditions that are intended to boost production levels. This programincludes additional development, including the installation of an additionalunderground refrigeration plant, upgrading of tracks and the development of anadditional access point to increase ore reserve flexibility.

In line with the Gold Fields productivity initiatives,Kloof continues to focus on optimizing mine design and configuration, whileensuring that the high-productivity drivers of workforce motivation andcompetence are addressed through training and incentive schemes.

Detailedbelow are the operating and production results at Kloof for the past threefiscal years.

| ** **                                  | ** ** | **Year ended June 30,** | ** ** |
|---------------------------------------------|------------|----------------------------------------|------------|
| **Production**                              | ** ** | ** **                             | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| Tons (‘000)                            |       | 4,983                                  |       | 4,655 |   | 3,666 |   |
| Recovered grade  (g/t)                      |       | 6.5                                    |       | 6.9 |   | 7.8 |   |
| Gold produced  (‘000 oz)               |       | 1,038                                  |       | 1,037 |   | 914 |   |
| **Results  of operations ($ million)** | ** ** | ** **                             | ** ** | ** ** | ** ** | ** ** | ** ** |
| Revenues                                    |       | 400.9                                  |       | 436.4 |   | 479.3 |   |
| Total production  costs(1)                  |       | 403.0                                  |       | 464.6 |   | 437.0 |   |
| Total cash  costs(2)                        |       | 353.8                                  |       | 393.2 |   | 384.5 |   |
| Cash profit(3)                              |       | 47.2                                   |       | 43.2 |   | 94.8 |   |
| **Cost  per ounce of gold ($)**             | ** ** | ** **                             | ** ** | ** ** | ** ** | ** ** | ** ** |
| Total production  costs                     |       | 388                                    |       | 448 |   | 478 |   |
| Total cash costs                            |       | 341                                    |       | 379 |   | 421 |   |
|                                             |            |                                        |            |  |  |  |  |  |  |

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Notes:

(1)           For a reconciliation of Gold Fields’ total productioncosts to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

(2)           For a reconciliation of Gold Fields’ total cash coststo production costs, see “Operating and Financial Review and Prospects—Resultsof Operations.”

(3)           Cash profit represents revenues less total cash costs.

Tonnage milled in fiscal 2006 decreased from fiscal2005 due to the closure of No. 3 Plant in March 2005. Gold productionfor fiscal 2006 decreased by 11.9% to 0.914 million ounces from 1.037 millionounces in fiscal 2005, because the first two quarters’ grades were lower due tochanges in the slope/terrace topography of the VCR, primarily in the easternparts of the mine. In fiscal 2006, underground ore grade fell 4.4%, from 9.1g/t in fiscal 2005 to 8.7 g/t. Total cash costs per ounce increased by 11.1% infiscal 2006, mostly attributable to lower production volumes, which similarlyimpacted total production costs per ounce. However, operating margins werepositively impacted due to the higher gold price during the year.

As compared to fiscal 2004, in fiscal 2005 Kloofprocessed 23% less surface rock dump material but processed a similar amount ofadditional underground tonnage. Recovered grade improved by 6% in fiscal 2005,as the mine switched to mining higher grades. Gold produced was unchangedbetween the two fiscal years as the lower production from the surface operationwas replaced with an equivalent increase from the underground operations due toan increase in yields. Kloof experienced an increase in cash costs per ouncefrom fiscal 2004 to fiscal 2005, principally as a result of the appreciation ofthe Rand against the 

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U.S. dollar. The Rand cash costs increased marginallyin fiscal 2005 compared to fiscal 2004, but this increase was below inflationlevels.

Thetotal shaft hoisting capacity of Kloof is detailed below.

| **Shaft System** | ** ** | ** **       | ** ** | **Hoisting capacity** | ** ** |
|-----------------------|------------|------------------|------------|----------------------------|------------|
| ** **            | ** ** | **(tons/month)** | ** ** |
| No. 1            |       |             | 300,000    |                       |       |
| No. 3(1)         |       |             | 150,000    |                       |       |
| No. 4(2)         |       |             | 110,000    |                       |       |
| No. 7            |       |             | 205,000    |                       |       |
| No. 8            |       |             | 75,000     |                       |       |

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Notes:

(1)           This shaft does not hoist material to the surface. Ithas a capacity of 150,000 tons per month for sub-surface hoisting.

(2)           This shaft hoists only waste rock to the surface. Ithas a capacity of 110,000 tons per month for sub-surface hoisting.

Assuming that Gold Fieldsdoes not increase or decrease reserve estimates at Kloof and that there are nochanges to the current mine plan at Kloof, Kloof’s December 31, 2006proven and probable reserves of 14.3 million ounces of gold will be sufficientto maintain production through approximately fiscal 2021. However, as discussedearlier in “Risk Factors” and “—Mine Planning and Management,” there arenumerous factors which can affect reserve estimates and the mine plan, whichcould thus materially change the life of mine.

*Processing*

| **Processing Techniques** | ** ** |
|--------------------------------|------------|
| **Plant**                      | ** ** | ** ** | ** ** | **Year  commissioned** | ** ** | **Comminution  phase** | ** ** | **Treatment  phase** | ** ** | **Capacity(1)** | ** ** | **Average milled  for the year  ended June 30,  2006** | ** ** | **Approximate  recovery factor  for the year  ended June 30,  2006(2)** | ** ** |
| ** **                     | ** ** | ** ** | *** *** | ** ** | *** *** | *** *** | *** *** | **(tons/month)** | *** *** | *** *** | *** *** |
| No. 1 Plant               |       |   | 1968 |   |   | Traditional  crushing and  milling |   | CIP  treatment(3) |   |   | 180,000 |   |   |   | 168,333 |   |   |   | 97.5 | % |   |
| No. 2 Plant               |       |   | 1990 |   |   | SAG milling |   | CIP treatment  and  electrowinning |   |   | 140,000 |   |   |   | 137,083 |   |   |   | 97.6 | % |   |

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Notes:

(1)           Nameplate capacity. Plant/Mill nameplate capacities arebased on a number of operating assumptions, including assumptions regarding theblend of soft and hard ores processed, that can change and which may result inan increased level of throughput over and above the designed nameplatecapacity.

(2)           Percentages are rounded to the nearest whole percent.

(3)           After CIP treatment, electrowinning occurs atNo. 2 Plant.

In fiscal 2006, the Kloofplants collectively extracted approximately 97.5% of gold contained in oredelivered for processing. An outside contractor, Jet Demolition, is currentlyin the process of demolishing and recovering any gold remaining at No. 3Plant, which was closed in March 2005 because the costs of processingwaste surface material, which was this plant’s sole operation, exceeded therevenue generated 

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from that material. Aspart of this process, the contractor will also be rehabilitating the area. Itis expected that the entire project will be complete between the second andthird quarters of fiscal 2007.

*Capital Expenditure*

Gold Fields spentapproximately Rand 208 million on capital expenditures at the Kloof operationin fiscal 2006, primarily on ventilation, refrigeration and generalinfrastructure for the Shaft No. 1 pillar extraction, Shaft No. 3drop-down development and development at Shaft No. 4. Gold Fields expectsto spend approximately Rand 350 million on capital expenditure in fiscal 2007,primarily on development at Shaft No. 4, the Shaft No. 1 pillarextraction, the KEA, housing and hostel accommodation upgrades by the mine’sProperty Division, development at the metallurgical plants and a new surfacerefrigeration plant at Shaft No. 7.

***Beatrix Operation***

*Introduction*

The Beatrix operation is located in the Free StateProvince of South Africa, some 240 kilometers southwest of Johannesburg, nearWelkom and Virginia, and comprises the Beatrix mine. The Beatrix operation wasformerly known as the Free State operation.

Beatrix operates under amining license with a total area of approximately 16,800 hectares. It is onlyan underground operation, with the exception of a nominal amount of surfaceproduction from processing rock dump material. Beatrix has four shaft systems,with two ventilation shafts to provide additional upcast and downcastventilation capacity, which are serviced by two metallurgical plants. It is ashallow to intermediate depth mining operation, at depths between 700 metersand 2,200 meters below surface. The Beatrix mine has access to the nationalelectricity grid and water, road and rail infrastructure and is located nearregional urban centers where it can routinely obtain needed supplies. In thefiscal year ended June 30, 2006, Beatrix produced 0.596 million ounces ofgold. As of June 30, 2006, Beatrix had approximately 11,500 employees,including approximately 1,300 employed by outside contractors.

*History*

Beatrix’s present scope ofoperations is the result of the consolidation with effect from July 1,1999 of two adjacent mines: Beatrix and Oryx. Gold mining commenced at Beatrixin 1985 and at Oryx in 1991.

*Geology*

The Beatrix mine exploits the Beatrix Reef, or BXR, atShaft Nos. 1, 2 and 3, and the Kalkoenkrans Reef, or KKR, at Shaft No. 4(the former Oryx mine). The reefs are developed on the Aandenk erosionalsurface and dip to the north and north-east at between four degrees and ninedegrees.

In general, the BXR occursat depths of between 570 meters and 1,380 meters and the KKR occurs at depths ofbetween 1,800 meters and 2,200 meters. Both the BXR and KKR reefs are markedlychannelized and consist of multi-cycle, upward fining conglomerate beds withsharp erosive basal contacts. A general east-west trending pay-zone, some800 to 1,000 meters wide, has been identified east of Shaft No. 4 and isknown as the main channel Zone 2. In addition, surface exploratory drilling andunderground development has exposed additional reserves to the south of Beatrix’smain channel Zone 5, which now represents the majority of the reserves at theoperation. Ongoing development and underground exploration drilling hascontinued over the past fiscal year so that all facies and structures have beenupdated and layouts and planning adapted. This has been done to take newinformation into account as part of usual mine planning practices.

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*Mining*

In fiscal 2005, Gold Fields implemented arestructuring project at Beatrix to improve operational efficiencies and reducecosts. As a result, Beatrix is now managed as three operational sections: theNorth Section (comprising Shaft No. 3 and the lower levels of Shaft No. 1),the South Section (comprising Shaft No. 2 and the upper levels ofShaft No. 1) and the West Section (comprising Shaft No. 4). Thisoperational structure remained in place for fiscal 2006 and is not expected tochange.

The Beatrix mine is engaged in underground mining, andthus is subject to all of the underground mining risks discussed in “RiskFactors.” The primary safety risks at Beatrix are falls of ground, trammingaccidents and flammable gas explosions. Beatrix uses a telemetric monitoringsystem coupled with an extensive ventilation system to help monitor flammablegas. Although Beatrix achieved five million fatality-free shifts in fiscal2006, there were seven fatalities at its operations due to falls of ground, twotramming accidents and one explosive accident on the surface. In fiscal 2005,there were three fatalities at Beatrix due to accidents during mining. Beatrixexperienced no shaft closures for any length of time in fiscal 2006 or to datein fiscal 2007 due to accidents. In the first quarter of fiscal 2007, there weretwo tramming fatalities. Beatrix does experience seismic events and, while theseismic risk is much lower at Beatrix than it is at Kloof or Driefontein, theoperation manages these events with a seismic network consisting of severalgeophones. The serious injury frequency rate for fiscal 2006, 2005 and 2004 was4.37, 4.72 and 5.64 serious injuries for every million hours worked,respectively, reflecting an improvement in the frequency of serious injuriesover the period. In fiscal 2006, the fatal injury frequency rate increased to0.24 fatalities for every million hours worked, as compared to 0.10 in fiscal2005. The fatal injury rate for fiscal 2004 was 0.16 for every million hoursworked.

Beatrix embarked on a focused training course andawareness campaign on fall of ground accidents in March 2006. Since theintroduction of this campaign, there has been a significant lessening (over 5%)of these types of accidents. This campaign included miner training, hazardawareness, increased supervision and early stope entry examinations. Methanehazard awareness training is ongoing.

There were a total of seven underground fires infiscal 2006, two of which occurred at Beatrix North, one at Beatrix South andfour at Beatrix West. While two of these fires, one at Beatrix North and one atBeatrix West, affected production for a short period of time, mine systems andemergency processes responded effectively and efficiently to minimize theimpact and effects of these fires. As part of the operating requirement forhazardous locations on the mine, all relevant areas are equipped with methane,velocity and/or ventilation door sensors, which are electronic devices thatindicate if a ventilation door is open and if air flow is affected. Thesesensors are connected to the mine’s electronic telemetry system. Furthermore,all critical fans are connected to the telemetry system and, in certaininstances, equipped with localized alarms. These safety systems are monitoredon a 24-hour basis from a central control room from which action is takenin the event of alarm. Since the installation and operation-wide implementationof these safety systems in 2001, Beatrix has experienced no methane fires.

Production was affected for five days due to anational strike in August 2005. In addition, the mine experienced a laborslowdown for approximately two weeks following the national strike. Furtherwork stoppages at Beatrix in fiscal 2006 were related to two national “stayaway” days. There were no other interruptions to production in fiscal 2006 dueto operational causes, although production was affected by the new publicholiday, National Election Day, on March 1, 2006. See “Directors, SeniorManagement and Employees—Labor Relations—South Africa.”

Beatrix requires cooling infrastructure to maintaincomfortable conditions for workers at depth, although not to the degreenecessary at Driefontein and Kloof. The Beatrix West Section has arefrigeration plant installed on its surface, which provides chilled water tobulk air coolers on surface and mid-shaft to the West Section’s primary subvertical shaft, Shaft No. 4. Presently, this cooling system at Shaft No. 4extends into Zone 5, where Gold Fields expects to install further coolinginfrastructure through bulk air coolers 

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during the first quarter of fiscal 2007. The first twoof these new bulk air coolers are currently under construction, and completionof the first bulk air cooler is expected by the end of first quarter 2007. Thesignificant refrigeration project at Shaft No. 3 to provide additionalcooling capacity, which was originally scheduled to be completed in fiscal2004, was postponed and the installation of a bulk air cooler is now planned atthat shaft. Construction is expected to begin in the first quarter of 2007,which will provide the North Section with cooled air using chilled servicewater from the refrigeration plant installed on the surface at Shaft No. 1.All design work on this project has already been completed.

During fiscal 2006, management focused on increasingdevelopment volumes at all shafts to provide future mining flexibility, orebodydefinition and grade management. This emphasis will continue in fiscal 2007.

Overall stoping volumes at each mining sectionremained constant between fiscal 2005 and 2006. Development was slightly lowerin fiscal 2006 due to geological structure delays, adverse ground conditionsand the impacts of smectite swelling on access tunnels at the West Section. Itis anticipated that with the appropriate remedial action initiated at the WestSection, these delays will be eliminated and overall development on all shaftsections is planned to increase in fiscal 2007. No shafts were closed or openedin fiscal 2006.

At the North Section in fiscal 2006, productionbuild-up at Shaft No. 3 continued and development and stoping volumes werein line with expectations.

Stoping volumes in the South Section metexpectations and management continues to focus on the elimination of lowergrade areas at this Section to reposition the shafts and increaseproduction. Where appropriate, localized sections of lower grade material wereextracted on an incremental basis at the South Section, and this will continuein the future.

In the West Section, stoping and development, coupledwith continued underground exploration drilling programs, continued to defineand support the higher grade Zone 5 area model. During fiscal 2006, stopingvalues in the Zone 5 area have exhibited fewer variations and have alsoconfirmed the lateral consistency of the dominant reef type in that area.Stoping and development volumes at the West Section were below expectationin fiscal 2006 for a number of reasons, including the unexpectedly earlyintersection of a large fault in Zone 5, limited development advances and thenecessary modification of development layouts to address the Section’s newlyrevised geological structure. In addition, during the year parts of the West Section wereimpacted by a number of access way tunnel closures, which primarily occurred asa result of sidewall rock and tunnel deformation from water absorption thatcauses ground clay to swell. Procedures to help mitigate the decreased stopingvolumes and rock extraction in these areas were introduced, including theinstallation of additional support, rehabilitation and remediation of theaffected tunnels and development of alternative by-pass tunnels.

In fiscal 2006, ongoing improvementswere made to haulage track upgrades and ventilation conditions, largely throughthe installation of new bulk air coolers. Lower grade and marginal miningactivities were generally curtailed at Beatrix in fiscal 2006, despite theincreasing gold price, as the mine planned to maintain operating margins.

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Based on the higher goldprice received and in anticipation of improving gold prices in the longer term,a number of incremental expansion opportunities are being examined at Beatrix.For example, surface drilling at the West Section, to enhance structural andgrade confidence levels in the southern parts of Zone 5, commenced duringfiscal 2006. Results of this exploration are expected to become availableduring the course of fiscal 2007. Pre-feasibility work is also being done onthe Vlakpan project area, which involves an extension of Beatrix on lowerlevels with access via the infrastructure of Shaft No. 1. Under currentplans, mining of this area would be expected to commence in fiscal 2009.

Mining at Beatrix is basedupon the scattered mining method. Activity at Shaft No. 3 is focused uponhaulage development and initial stoping in order to build up production at theshaft. The power source being used at Shaft No. 3 for a variety ofactivities including drilling is primarily hydropower, as opposed to compressedair, with a majority of the mining equipment being run off a high-pressurewater system. The benefits of the system include improved cooling underground,improved machine efficiency, lower noise levels and less electrical powerusage.

The introduction duringthe year of new schedules of routine activities for mining employees andmethodologies that reduce the amount of water needed to cool the area andminimize dust have led to improved mine call factors and increased goldrecovery at all shafts.

Shaft Nos. 1, 2 and 4 arethe primary sources of production at present, but over time Gold Fields expectsmining concentration to shift to Shaft No. 3 as well as Shaft No. 4.Gold Fields experienced improved performance at Shaft No. 4 in fiscal 2006due to improved ventilation and logistics, higher grade areas being mined inthe Zone 5 area and fewer grade swings at the KKR. The KKR, which washistorically characterized as being a highly erratic reef structure, is tendingto exhibit greater reef consistency in Zone 5.

Detailedbelow are the operating and production results at Beatrix for the past threefiscal years.

| ** **                                 | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------------|------------|----------------------------------------|------------|
| **Production**                             | ** ** | ** **                             | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| Tons (‘000)                           |       | 5,448                                  |       | 4,181 |   | 3,551 |   |
| Recovered grade (g/t)                      |       | 3.6                                    |       | 4.6 |   | 5.2 |   |
| Gold produced (‘000 oz)               |       | 625                                    |       | 624 |   | 596 |   |
| **Results of operations ($ million)** |       |                                   |       |   |   |   |   |
| Revenues                                   |       | 241.4                                  |       | 264.5 |   | 312.9 |   |
| Total production costs(1)                  |       | 234.9                                  |       | 282.4 |   | 264.6 |   |
| Total cash costs(2)                        |       | 222.2                                  |       | 253.4 |   | 243.6 |   |
| Cash profit(3)                             |       | 19.2                                   |       | 11.1 |   | 69.3 |   |
| **Cost per ounce of gold ($)**             |       |                                   |       |   |   |   |   |
| Total production costs                     |       | 376                                    |       | 452 |   | 444 |   |
| Total cash costs                           |       | 356                                    |       | 406 |   | 409 |   |
|                                            |            |                                        |            |  |  |  |  |  |  |

----

Notes:

(1)           For a reconciliation of Gold Fields’ totalproduction costs to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

(2)           For a reconciliation of Gold Fields’ totalcash costs to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

(3)           Cash profit represents revenues less totalcash costs.

Tonnage milled decreased by 15.1% from fiscal 2005 tofiscal 2006, primarily due to the cessation of surface dump treatment, reducedstope widths and reduced shortfall, which means the amount by which reeftonnage hoisted exceeded tonnage broken, was lower in fiscal 2006 than infiscal 2005. Ounces of gold produced were 4.5% lower in fiscal 2006 due tolower stoping volumes, the impact of employee strikes in 

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August 2005 and an overall decrease in the minedgrade. However, the lower mine grade was offset in part by increased productionvolumes from sweepings and vamping, which improved the mine call factor andrecovered grade in fiscal 2006.

At the North Section, grades mined and volumes were inline with expectations, although some of the higher-grade geological facieshave been depleted at Shaft No. 1. At the West Section, the majority ofproduction from Zone 5 indicated consistent and higher than anticipated grades.Orebody in the South Section deteriorated towards the margins of thatSection, in line with the geological model and facies being mined.

The overall recovered grade in fiscal 2006 increasedto 5.2 g/t from 4.6 g/t in fiscal 2005. The primary reason for the higherrecovered grade was a cessation of low grade surface material processing and animprovement in quality factors, such as a slight reduction in stoping width,less dilution from shortfall sources and a mine call factor increase from 81%in fiscal 2005 to 97% in fiscal 2006. In the medium to long term, it isanticipated that the mine call factor will revert to historical levels of about90%.

Although tonnage processed also decreased from fiscal2004 to fiscal 2005, ounces of gold produced was unchanged between those yearsdue to higher average underground grades. The primary reason for the higherrecovered grade in fiscal 2005 as compared to fiscal 2004 was a decrease in lowgrade surface material which was being processed on site and toll milled atHarmony’s Joel mine, adjacent to Beatrix. All surface milling ceased in January 2005,as it was not contributing to overall profitability at price levels in thatfinancial year. Underground grades were also marginally higher during fiscal2005 as compared to fiscal 2004 due to an increase in underground miningvolumes at the higher grade North and West Sections and the mining of highergrade areas generally.

The increase in total cash costs per ounce of gold fromfiscal 2005 to fiscal 2006 at Beatrix was as a result of the reduced goldproduced, partially offset by lower costs which resulted from the depreciationof the Rand against the U.S. dollar. The decrease in total production costs perounce of gold from fiscal 2005 to fiscal 2006 was principally due to a decreasein amortization. The increase in total cash costs per ounce of gold from fiscal2004 to fiscal 2005 at Beatrix was as a result of the appreciation of the Randagainst the U.S. dollar. Rand cash costs increased marginally in fiscal 2005compared to fiscal 2004, but this increase was below inflation levels.

Thetotal shaft hoisting capacities of Beatrix are detailed below.

| **Shaft System** | ** ** | ** **       | ** ** | **Hoisting  capacity** | ** ** |
|-----------------------|------------|------------------|------------|------------------------|------------|
| ** **            | ** ** | **(tons/month)** | ** ** |
| No. 1            |       |             | 170,000    |                   |       |
| No. 2            |       |             | 170,000    |                   |       |
| No. 3            |       |             | 170,000    |                   |       |
| No. 4            |       |             | 160,000    |                   |       |

 

Assuming that Gold Fieldsdoes not increase or decrease reserves estimates at Beatrix and that there areno changes to the current mine plan, Beatrix’s December 31, 2005 provenand probable reserves of 8.2 million ounces of gold will be sufficient tomaintain production through to approximately fiscal 2018. However, as discussedearlier in “Risk Factors” and “—Mine Planning and Management,” there arenumerous factors which can affect reserve estimates and the mine plan, whichcould thus materially change the life of mine.

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*Processing*

Thefollowing table sets forth year commissioned, processing techniques andprocessing capacity per month, as well as average tons milled per month andmetallurgical recovery factor during the fiscal year ended June 30, 2006,for each of the plants at Beatrix:

| **Processing Techniques** | ** ** |
|--------------------------------|------------|
| **Plant**                      | ** ** | ** ** | ** ** | **Year  commissioned** | ** ** | **Comminution  phase** | ** ** | **Treatment  phase** | ** ** | **Capacity(1)** | ** ** | **Average milled  for the year  ended June 30,  2006** | ** ** | **Approximate  recovery factor  for the year  ended June 30,  2006(2)** | ** ** |
| ** **                     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **(tons/month)** | ** ** | ** ** | ** ** |
| No. 1 Plant               |       |   | 1983 |   |   | SAG milling |   | CIL treatment |   |   | 260,000 |   |   |   | 235,000 |   |   |   | 96 | % |   |
| No. 2 Plant               |       |   | 1992 |   |   | SAG milling |   | CIP treatment |   |   | 150,000 |   |   |   | 60,400 |   |   |   | 96 | % |   |

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Notes:

(1)           Nameplate capacity. Plant/Mill nameplate capacities arebased on a number of operating assumptions, including assumptions regarding theblend of soft and hard ores processed, that can change and which may result inan increased level of throughput over and above the designed nameplatecapacity.

(2)           Percentages are rounded to the nearest whole percent.

In fiscal 2006, the Beatrix plants collectivelyextracted approximately 96% of gold contained in ore delivered for processing.Capacity at Plant No. 1 increased in fiscal 2005 as a result of plantoptimization and minor process adjustments. In fiscal 2004, Gold Fieldsinstalled a Knelson concentrator at the No. 1 Plant which removes goldearlier in the metallurgical process. In fiscal 2006, the average tonnagemilled at No. 2 Plant decreased substantially as compared to fiscal 2005because Beatrix operations ceased milling surface rock dump material.

None of the metallurgical plants or facilities wereupgraded or temporarily or permanently closed in fiscal 2006, and normalroutine maintenance and repairs were carried out as part of regular assetmanagement.

A gravity concentratingcircuit is being installed at No. 2 Plant in order to reduce locked upgold in the mills and to improve the overall recovery. The plannedcommissioning date is December 2006. No other major expansion or upgradesare currently planned.

***Capital Expenditure***

Gold Fields spent approximatelyRand 237 million on capital expenditures at the Beatrix operation in fiscal2006, primarily on development at all shafts and infrastructure improvements tothe North and West Sections. Gold Fields expects to spend approximately Rand262 million on capital expenditure at Beatrix in fiscal 2007, primarily oncompletion of the North section infrastructure, capital development, hydropowerequipment and continued work on the refrigeration project at Shaft No. 3.

***Ghana Operations***

The Ghana operations are comprisedof the Tarkwa and Damang mines.

***Tarkwa Mine***

*Introduction*

Gold Fields Ghana, which holds the interest in theTarkwa mine, is owned 71.1% by Gold Fields, 18.9% by IAMGold and 10.0% by thegovernment of Ghana, which acquired the interest as a free carried interest forno cost.

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The Tarkwa mine is locatedin south-western Ghana, about 300 kilometers by road west of Accra. The Tarkwamine consists of several open pit operations on the original Tarkwa propertyand the adjacent southern portion of the property, which was formerly referredto as the Teberebie property and was acquired by Gold Fields in August 2000,together with two heap leach facilities, referred to as the North Plant and theSouth Plant. A new SAG mill and CIL plant commenced continuous operations atthe Tarkwa property in November 2004. The Tarkwa mine operates undermining leases with a total area of approximately 20,800 hectares. It currentlyconducts only surface operations, although it previously had a smallunderground mining operation which it operated through July 1999 underGold Fields’ agreement with the government of Ghana. The Tarkwa mine has accessto the national electricity grid, water, road and railroad infrastructure. Mostsupplies are trucked in from either the nearest seaport, which is approximately140 kilometers away by road in Takoradi, or from Tema near Accra, which isapproximately 300 kilometers away by road. In the fiscal year ended June 30,2006, Tarkwa produced 0.709 million ounces of gold, of which 0.504 million ounceswere attributable to Gold Fields, with the remainder attributable to minorityshareholders in Gold Fields Ghana. As of June 30, 2006, Tarkwa hadapproximately 3,000 employees, including approximately 1,400 employed byoutside contractors.

*History*

Investment in large-scalemining in the Tarkwa area commenced in the last quarter of the nineteenthcentury. In 1993, Gold Fields of South Africa, or GFSA, took over an areapreviously operated by the State Gold Mining Corporation, or SGMC. SGMC had inturn acquired the property from private companies owned by European investors.Following initial drilling, feasibility studies and project development (whichincluded the removal of overburden and the resettlement of approximately 22,000people), mining operations commenced in 1997. Ore processing began at the NorthPlant in March 1998 and at the South Plant in December 2000.

*Geology*

Gold mineralization at Tarkwa is hosted by ProterozoicTarkwaian metasediments, which overlie but do not conform to a Birimian greenstonebelt sequence. Gold mineralization is concentrated in conglomerate reefs andhas some similarities to deposits in the Witwatersrand Basin in South Africa.The deposit comprises a succession of stacked, tabular paleoplacer unitsconsisting of quartz pebble conglomerates. Approximately 10 such separateeconomic units occur in the concession area within a sedimentary packageranging from 40 meters to 110 meters in thickness. Low grade to barrenquartzite units are interlayered between the separate reef units.

The existing surfaceoperation currently exploits narrow auriferous conglomerates from five pits,namely Pepe, Akontansi, Teberebie, Kottraverchy and West Hill. Two additionalpits, Atuabo and Mantraim, which have previously been mined by Gold Fields, aretemporarily inactive, but both are planned to be reactivated within the nextfew years pending the relocation of an electrical sub-station which lies on theedge of the current allowed blast radius and as adjacent active pits areexpanded to join them.

*Mining*

The Tarkwa mine is engaged in open pit and productionstockpile surface mining and is thus subject to all of the surface mining risksdiscussed in “Risk Factors.” Although surface mining generally is lessdangerous than underground mining, serious and even fatal accidents do stilloccasionally occur. Tarkwa had one fatality in fiscal 2006 due to a conveyerbelt accident. There was also one fatality in each of fiscal 2004 and 2005.There were no fatalities in the first quarter of fiscal 2007. The overallsafety record at Tarkwa has improved dramatically during the last three yearsdue to the introduction of the Occupational Health and Safety Assessment Series 18001,which is an international occupational health and safety management system. Theserious injury frequency rate for fiscal 2005 and 2004 was 0.4 and 0.2 serious 

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injuries for every million hours worked, respectively.The serious injury frequency rate for fiscal 2006 was 0.1 injuries per millionman hours worked. The fatal injury frequency rate for each of fiscal 2006, 2005and 2004 was 0.1 fatal injuries for every million hours worked. There were nomaterial work stoppages during fiscal 2006 due to fatalities, but therewere three minor interruptions to production during fiscal 2006 caused,respectively, by a higher than average rainfall during October and November of2005, a power failure and bearing and drive problems with the SAG mill, whichhave since been resolved.

Tarkwa uses the typical open pit mining methods of drilling,blasting, loading and hauling. The progression of blasting in the open pitoccurs in steps of six meters (or in some cases three meters) with the oreloaded into 144-ton dump trucks.

Tarkwa currently presents no unusual challenges beyondthose faced at most open pit and heap leaching mining operations, includingvariations in amenability of ores to leaching. However, harder ores areexpected at Tarkwa which could reduce throughput at the two heap leachfacilities. As yet, throughput has not been affected, but heap leach recoverieshave declined from fiscal 2005. The primary operational challenges includemanaging effective grade control, lowering operating costs, managing the blendof hard and soft material fed to the SAG mill and managing gold-in-processon heap leach pads (that is, gold in the processing circuit that is expected tobe recovered during or after operations).

Gold Fields took over the mining activities previouslyperformed on a contract basis by African Mining Services (Ghana) Pty Ltd, orAMS, in the first quarter of fiscal 2005, having purchased its own mining fleetof equipment during the latter half of fiscal 2004. The transition fromcontractor mining to owner mining went smoothly, with Gold Fields re-engagingthe majority of the AMS operators. Additionally, Gold Fields continued tooperate at Tarkwa under maintenance and repair contracts with its majorequipment suppliers, which were agreed upon in 2004 and have a five-year term.AMS was contracted in fiscal 2006 to provide material for heap leach padexpansion and to assist in providing adequate feed to the plants. Anothercontractor, P.W. Ghana Limited, was hired to commence work on July 1, 2006to accelerate stripping in the Teberebie pit in order to guarantee adequatehard ore for the SAG mill. This contractor is expected to have completed thisphase of the work by the end of December 2006. In early 2007, Gold Fieldsexpects to take over this stripping operation from the contractors, upon thepurchase of new mine equipment which is now on order.

Detailed below are theoperating and production results at Tarkwa for the past three fiscal years.

| ** **                            | ** ** | **Year ended June 30,** | ** ** |
|---------------------------------------|------------|----------------------------------------|------------|
| **Production**                        | ** ** | ** **                             | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| Tons (‘000)                      |       | 16,000                                 |       | 19,633 |   | 21,487 |   |
| Recovered grade  (g/t)                |       | 1.1                                    |       | 1.1 |   | 1.0 |   |
| Gold produced  (‘000 oz)(1)      |       | 550                                    |       | 677 |   | 709 |   |
| **Results  of operations ($million)** | ** ** |                                   |       | ** ** | ** ** | ** ** | ** ** |
| Revenues                              |       | 213.2                                  |       | 287.5 |   | 373.0 |   |
| Total production  costs(2)            |       | 141.7                                  |       | 196.1 |   | 248.2 |   |
| Total cash  costs(3)                  |       | 126.4                                  |       | 156.9 |   | 212.6 |   |
| Cash profit(4)                        |       | 86.8                                   |       | 130.6 |   | 160.4 |   |
| **Cost  per ounce of gold ($)**       | ** ** |                                   |       | ** ** | ** ** | ** ** | ** ** |
| Total production  costs               |       | 258                                    |       | 290 |   | 350 |   |
| Total cash costs                      |       | 230                                    |       | 232 |   | 300 |   |
|                                       |            |                                        |            |  |  |  |  |  |  |

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Notes:

(1)           In fiscal 2004, 2005 and 2006, 0.391 million ounces ofproduction, 0.481 million ounces of production and 0.504 million ounces ofproduction, respectively, were attributable to Gold Fields, with the remainderattributable to minority shareholders in the Ghana operation.

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(2)           For a reconciliation of Gold Fields’ total productioncosts to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

(3)           For a reconciliation of Gold Fields’ total cash coststo production costs, see “Operating and Financial Review and Prospects—Resultsof Operations.”

(4)           Cash profit represents revenues less total cash costs.

In fiscal 2006, overall ore tonnage increased comparedto fiscal 2005 levels as CIL production increased and minor bottlenecks onscreens and pumps were eliminated. Total ore and waste mined increased asadditional equipment was added and two contractors were hired to help theplants meet processing capacity. Furthermore, compared to fiscal 2005 levelsthe ounces of gold produced at Tarkwa increased by 32,000 ounces in fiscal 2006because the CIL plant produced for the full year, as compared to seven monthsin fiscal 2005, andall processing facilities exceeded planned production rates. Total cash costsper ounce of gold increased significantly during fiscal 2006, primarily due torising fuel, cyanide, cement and steel prices, higher fleet maintenance costsand an increase in the level of waste stripping.

From fiscal 2004 to 2005, tonnage treated increased asa result of the commissioning of the new SAG mill and CIL plant and ongoingoptimization in the capacity of the heap leach plants. Ounces of gold producedincreased by 127,000 ounces in fiscal 2005 as a result of the increased tonnageprocessed and higher recoveries at the CIL plant. Cash costs per ounce of goldproduced increased from fiscal 2004 to fiscal 2005, primarily due tosignificantly higher global prices for cyanide, cement and steel and anincrease in the level of waste stripping. Production costs per ounce producedalso increased from fiscal 2004 to fiscal 2005, which largely reflects theadditional depreciation and amortization charge for the new mining fleetacquired in the switch to owner mining and the new CIL plant.

Assuming that Gold Fieldsdoes not increase or decrease reserves estimates at Tarkwa and that there areno changes to the current mine plan at Tarkwa, Tarkwa’s December 31, 2005proven and probable reserves of 14.4 million ounces (10.2 million of which wereattributable to Gold Fields, with the remainder attributable to minorityshareholders in the Ghana operation) will be sufficient to maintain productionthrough approximately fiscal 2025. However, as discussed earlier in “RiskFactors” and “—Mine Planning and Management,” there are numerous factors whichcan affect reserve estimates and the mine plan, which could thus materiallychange the life of mine.

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***Processing***

Tarkwa’sore can be processed either using conventional heap leach techniques withacceptable recoveries or SAG milling with a CIL plant. The current operationincorporates two separate heap leach circuits, the North Plant and the SouthPlant, and a new SAG mill plant which was commissioned in 2004. The followingtable sets forth year commissioned, processing techniques and processingcapacity per month, as well as average tons milled per month and metallurgicalrecovery factors during the fiscal year ended June 30, 2006, for each ofthe plants at Tarkwa:

| **Processing Techniques**   | ** ** |
|----------------------------------|------------|
| **Plant**                        | ** ** | ** ** | ** ** | **Year  commissioned** | ** ** | **Comminution  phase** | ** ** | **Treatment  phase** | ** ** | **Capacity(1)** | ** ** | **Average milled for  the year ended  June 30, 2006** | ** ** | **Approximate  recovery factor  for the year ended  June 30, 2006(2)** | ** ** |
| ** **                       | ** ** | ** ** | *** *** | *** *** | *** *** | *** *** | *** *** | **(tons/month)** | *** *** | *** *** | *** *** |
| CIL Plant                        |       |   | 2004 |   |   | SAG  milling |   | CIL treatment |   |   | 350,000 |   |   |   | 391,000 |   |   |   | 96 | % |   |
| North Plant Heap Leach Facility  |       |   | 1997 |   |   | Multiple stage  crushing and  screening  process and  agglomeration |   | Heap leach(3)  with AD&R  treatment |   |   | 810,000 |   |   |   | 829,000 |   |   |   | 76 | % |   |
| South Plant Heap  Leach Facility |       |   | 1992 |   |   | Multiple stage  crushing and  screening  process and  agglomeration |   | Heap leach(3)  with AD&R  treatment and  electrowinning |   |   | 530,000 |   |   |   | 571,000 |   |   |   | 76 | % |   |

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Notes:

(1)           Nameplate capacity as stated by themanufacturer. Plant/Mill nameplate capacities are based on a number ofoperating assumptions, including assumptions regarding the blend of soft andhard ores processed, that can change and which may result in an increased levelof throughput over and above the designed nameplate capacity.

(2)           Percentages are rounded to the nearestwhole percent.

(3)           Heap leach recoveries are the result of anextended solution application process with full recovery requiring several leachcycles. Full recovery of all recoverable gold for current ores is only achievedover several years. Thus, recoveries must be considered in terms of recovery astime progresses, or a “progressive” recovery. Over time, Gold Fields expectsboth plants to achieve progressive recovery factors of about 64% of containedgold, equivalent to full recovery of all recoverable gold during the life ofmine.

The SAG mill and CIL plantwere commissioned in early fiscal 2005 and consistently exceeded nameplatecapacity during fiscal 2006. Furthermore, during fiscal 2006, the two heapleach crushing plants at Tarkwa remained in use while the heap leach pads wereupgraded. The amount of tonnage treated at the heap leach facilities roseslightly in fiscal 2006 as a result of continuing improvements to both theNorth and South Plants, and the new CIL plant processed 4.7 million metrictons. Expansion of the South Plant heap leach pads was completed in the firstquarter of fiscal 2006, expansion of the North Plant heap leach pad wascompleted in the fourth quarter of fiscal 2006 and de-bottlenecking, by way ofscreen upgrades and pumping improvements, of the CIL plant was completed duringthe year, resulting in a significant improvement in CIL plant capacity. Afeasibility study is currently underway for expansion of the CIL plant’scapacity to one million tons per month. This study is expected to be completedby December 2006. If the project is approved by the Board, constructionwill commence and is scheduled to be completed by mid-2008.

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*Capital Expenditure*

Gold Fields spentapproximately $42 million on capital expenditure at the Tarkwa operation infiscal 2006, primarily on the North Plant heap leach pad, acquisition ofadditional equipment following the transition to owner mining and completion ofStage 1 of the Blue Ridge heap leach pad, which forms part of the South heapleach facilities. Gold Fields has budgeted approximately $86 million forcapital expenditure at Tarkwa for fiscal 2007, principally for the CIL plantexpansion, further expansion of the North Plant heap leach pad and additionalmining equipment.

***Damang Mine***

*Introduction*

Abosso, which owns the interest in the Damang mine, isowned 71.1% by Gold Fields, 18.9% by IAMGold and 10% by the Ghanaiangovernment, which acquired the interest as a free carried interest for no cost,mirroring the shareholding structure of Gold Fields Ghana.

The Damang deposits are located in the Wassa WestDistrict in south-western Ghana approximately 360 kilometers by road west ofAccra and approximately 30 kilometers by road northeast of the Tarkwa mine. TheDamang mine consists of an open pit operation with a SAG mill and CILprocessing plant.

Ore is currently mined from three satellite pits,Kwesie North, Tomento and Amoanda, while Rex and Lima South pits are expectedto be mined in the future. Ore is also mined from the Damang Pit Cutback, orDPCB, for which pre-stripping commenced in July 2005, and the Juno 2 SouthWest pit, or J2SW, which is an extension of the Damang Pit.

Kwesie North, Tomento, Amoanda and Rex are locatedapproximately 3.0 kilometers south, 5.5 kilometers south, 8.0 kilometerssouth and 15.0 kilometers south of the Main Plant, respectively. The DPCB andJ2SW are located within 1 kilometer of the Main Plant. In addition, the LimaSouth project, which is an extension of the existing Kwesie North pit, islocated approximately 5.0 kilometers south of the Main Plant. Abosso’sapplication for the conversion of its prospecting license for Lima South to amining lease was granted by the Ghanaian Minerals Commission in March 2006.Mining at Lima South is scheduled to commence in fiscal 2009.

Damang operates under amining lease with a total area of approximately 8,100 hectares, an increase ascompared to fiscal 2005 due to the addition of Lima South. The Damang mine hasaccess to the national electricity grid and water and road infrastructure. Mostsupplies are trucked in from either the nearest seaport, which is approximately200 kilometers away by road in Takoradi, or from Accra, which is approximately360 kilometers away by road. In the fiscal year ended June 30, 2006, theDamang mine produced 0.235 million ounces of gold, of which 0.167 millionounces were attributable to Gold Fields, with the remainder attributable tominority shareholders in Abosso. As of June 30, 2006, Damang hadapproximately 900 employees, including approximately 600 employed by outsidecontractors.

*History*

Mining on the Abossoconcession began with underground mining in the early twentieth century. In thelate 1980s, Ranger Minerals Ltd. (the previous owner of Abosso) commenced aproject to study the feasibility of surface mining at Damang, which culminatedin an agreement with the government of Ghana to develop and conduct surfacemining at the site. Surface mining at Damang commenced in August 1997, andGold Fields assumed control of operations on January 23, 2002.

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*Geology*

Damang is located on the Damang Anticline, which ismarked by Tarkwaian metasediments on the east and west limbs, around a core ofBirimian metasediments and volcanics. Gold in the Tarkwaian is predominantlyfound in the conglomerates of the Banket Formation and is similar to theWitwatersrand in South Africa; however, at Damang, hydrothermal processes haveenriched much of this paleoplacer mineralization. Within the region, thecontact between the Birimian and Tarkwaian is commonly marked by zones ofintense shearing and is host to a number of significant shear hosted golddeposits including Prestea, Bogoso, and Obuasi.

Paleoplacer mineralizationoccurs on the west limb of the anticline at Abosso, Chida, and Tomento, and onthe east limb of the anticline at Kwesie, Lima, Lima South, Bonsa North andBonsa. Hydrothermal enrichment of the Tarkwaian paleoplacer occurs at Rex,Amoanda, and Nyame on the west limb and Damang and Bonsa on the east limb.

*Mining*

The Damang mine comprisesboth open pit and production stockpile surface mining, and is thus subject toall of the surface mining risks discussed in “Risk Factors.” Although surfacemining generally is less dangerous than underground mining, serious and evenfatal accidents do still occasionally occur. The Damang mine has not had afatal injury since its acquisition by Gold Fields in 2002, including the firstquarter of fiscal 2007. The serious injury frequency rate at Damang for fiscal2006, 2005 and 2004 was 0.0, 0.2 and 0.3 serious injuries for every millionhours worked, respectively, reflecting improvement over the period.

Damang uses the typicalopen pit mining methods of drilling, blasting, loading and hauling. Theprogression of blasting in the open pit occurs in six-meter benches, which arethen combined to form steps of three meters with the ore and waste loaded into100-ton dump trucks. The primary operational challenges include managingeffective grade control, lowering operating costs, managing groundwater andgeotechnical issues at the DPCB and maintaining adequate and timely supply ofappropriate plant feed blend. However, Damang is not faced with any challengesthat are particularly unusual for this type of open pit and ore processingoperation, and the mine experienced no material interruptions to productionduring fiscal 2006.

Following Gold Fields’acquisition of this mine in January 2002, an exploration program was startedto seek alternative sources of ore to replace the Damang pit, by testing bothhydrothermal and conglomerate styles of mineralization across the Damang leasearea. The Rex pit is scheduled to commence mining during fiscal 2008.

The Amoanda and J2SW pitsare currently the high-grade fresh ore feed sources to the plant. The Amoandapit was fully depleted by the end of the first quarter of fiscal 2007. The J2SWpit is the south extension of the DPCB and has advanced approximately 30 metersdeep from the surface elevation. Mining commenced at Tomento during the firstquarter of fiscal 2006. Two of the five Tomento pits are currently the mainoxide ore feed source to the plant. The Kwesie North pit is a back-up pit foroxide ore supply to the plant if Tomento pits are unable to meet the mill oxidefeed requirements.

The development of Damang’sseveral satellite pits has increased the size of the mine extensively,requiring compensation payments and in some cases the resettlement of affectedlandowners. During fiscal 2004 and 2005, the Kwesi-Lima, Amoanda and TomentoNorth resettlement projects were implemented, involving 192 households in thearea. In fiscal 2006, development at Lima South and Tomento involved theresettlement of a further 55 households. The impending commencement of the Rexpit is expected to require resettlement for an additional 37 households in thatarea.

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There was an accelerationof the depletion of the higher grade areas of the main Damang pit in the firsthalf of fiscal 2005, which resulted in a decline in both grade and thus goldproduction in that period compared to previous levels. In March 2005, adiamond and reverse circulation drilling program to test the cutback potentialof the main Damang Pit was completed. Subsequent resource modeling and open pitdesign work confirmed the potential of this area. In May 2005, the Boardgranted approval to commence pre-stripping the DPCB, which began in July 2005.The DPCB consists of a cutback to the west and east walls of the existingDamang pit. In addition, a scoping study to evaluate the underground miningpotential at Abosso Deeps, an area at the southern end of the Damang lease areanear the old Abosso underground mine, has been completed and is currently underreview.

AMS performs a substantialproportion of the operations at Damang. In January 2006, AMS was awarded asix-year contract beginning June 25, 2005, to reflect the increased scopeof works from mining the DPCB and the Damang satellite pits. AMS providesemployees, supplies and equipment for mining at Damang, including drilling,blasting and waste stripping, as well as the haulage of the material producedfrom the mining activities, including both ore and waste. AMS receives feesunder the contract which depend on the type of service being performed and theequipment being used. Under the terms of the contract, AMS is liable for anydamage or loss it causes, including that caused by any subcontractor it hires.AMS is not liable for damage that is the result of work performed in accordancewith the terms of the contract that is unavoidable or that is caused by anynegligent act or omission of employees of Abosso or third parties over whom AMShas no control. AMS is required to take out insurance to cover potential damageand liability. Abosso can terminate its contract at any time without paying anysignificant penalties or having to purchase any of AMS’ equipment, although ithas an option to purchase such equipment if desired.

A different contractor,Engineers & Planners Co. Ltd., performs the ore haulage contract workat Damang, using 30-ton trucks to haul the material from the varioussatellite pits to the Run of Mine, or RoM, pad, which is the ore stockpile dumpclose to the crushing plant.

There were no strikes ormaterial work stoppages at Damang in fiscal 2006.

Detailed below are theoperating and production results at Damang for the past three fiscal years.

| ** **                                 | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------------|------------|----------------------------------------|------------|
| **Production**                             | ** ** | ** **                             | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| Tons (‘000)                           |       | 5,236                                  |       | 5,215 |   | 5,328 |   |
| Recovered grade (g/t)                      |       | 1.8                                    |       | 1.5 |   | 1.4 |   |
| Gold produced (‘000  oz)(1)           |       | 308                                    |       | 248 |   | 235 |   |
| **Results of operations ($ million)** |       |                                   |       |   |   |   |   |
| Revenues                                   |       | 120.0                                  |       | 104.3 |   | 123.1 |   |
| Total production  costs(2)                 |       | 75.5                                   |       | 74.9 |   | 105.0 |   |
| Total cash costs(3)                        |       | 68.5                                   |       | 69.9 |   | 101.5 |   |
| Cash profit(4)                             |       | 51.5                                   |       | 34.4 |   | 21.6 |   |
| **Cost per ounce of gold ($)**             |       |                                   |       |   |   |   |   |
| Total production costs                     |       | 245                                    |       | 302 |   | 447 |   |
| Total cash costs                           |       | 222                                    |       | 282 |   | 432 |   |
|                                            |            |                                        |            |  |  |  |  |  |  |

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Notes:

(1)           In fiscal 2004, 2005 and 2006, 0.219 million ounces,0.176 million ounces and 0.167 million ounces of production, respectively, wereattributable to Gold Fields, with the remainder attributable to minorityshareholders in Abosso.

(2)           For a reconciliation of Gold Fields’ total productioncosts to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

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(3)           For a reconciliation of Gold Fields’ total cash coststo production costs, see “Operating and Financial Review and Prospects—Resultsof Operations.”

(4)           Cash profit represents revenue less total cash costs.

While various satellite pits were brought to productionto offset the Damang pit depletion, the grade and gold production in fiscal2006 decreased primarily due to completion of the relatively high-grade freshmaterial from the J2SE pit, which was adjacent to the Damang pit, andhigh-grade oxide from the Amoanda pit. Total production and cash costsincreased in fiscal 2006 due to increases in mining, haulage, fuel andconsumable costs, together with expenditure incurred on the Damang pit cutback,which amounted to $21.4 million. Optimization of the mill feed blend and plantset up allowed the Damang mine to treat more tonnage in fiscal 2006 than fiscal2005. Mill tonnage increased due to a 1.7% increase in mill utilization and aslight increase in the hourly throughput rate. The Damang pit contains highergrade ore than the new pits and this higher grade pit was the primarycontributor to production in fiscal 2006, before the cutback.

Assuming that Gold Fieldsdoes not increase or decrease reserves estimates at Damang and that there areno changes to the current mine plan at Damang, Damang’s December 31, 2005proven and probable reserves of 1.4 million ounces (1.0 million of which wereattributable to Gold Fields, with the remainder attributable to minorityshareholders in the Ghana operation) will be sufficient to maintain productionthrough approximately fiscal 2012. However, as discussed earlier in “RiskFactors” and “—Mine Planning and Management,” there are numerous factors thatcan affect reserve estimates and the mine plan, which could thus materiallychange the life of mine.

*Processing*

Allprocessing at Damang is provided by a single plant. The following table setsforth the year commissioned, processing techniques and processing capacity permonth, as well as average tons milled per month and metallurgical recoveryfactor during the fiscal year ended June 30, 2006 for the plant:

| ** ** | ** ** | **Processing Techniques** | ** **   |
|------------|------------|--------------------------------|--------------|
| **Plant**  | ** ** | ** **                     | ** **   | **Year  commissioned** | ** ** | **Comminution  phase** | ** ** | **Treatment  phase** | ** ** | **Capacity(1)** | ** ** | **Average milled for  the year ended  June 30, 2006** | ** ** | **Approximate  recovery factor  for the year ended  June 30, 2006(2)** | ** ** |
| ** ** | ** ** | ** **                     | *** *** | *** *** | *** *** | *** *** | *** *** | **(tons/month)** | *** *** | *** *** | *** *** |
| Main Plant |       |                           | 1997         |   |   | Single  stage  crushing with  SAG and ball  milling |   | CIL  treatment |   |   | 383,000 |   |   |   | 443,996 |   |   |   | 93 | % |   |
|            |            |                                |              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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Notes:

(1)           Nameplate capacity as stated by the manufacturer.Plant/Mill nameplate capacities are based on a number of operating assumptions,including assumptions regarding the blend of soft and hard ores processed, thatcan change and which may result in an increased level of throughput over andabove the designed nameplate capacity.

(2)           Percentages are rounded to the nearest whole percent.

Optimization of the Damang mill involves carefulblending of hard and soft ores to maximize use of the milling circuit, whichremains the constraint in this plant. Mining operations continue to focus onmaintaining an appropriate plant feed blend.

Feasibility for the designand installation of a seventh CIL tank was completed in November 2005 andtenders were submitted in April 2006 for final costing.

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*Capital Expenditure*

Gold Fields spentapproximately $5 million on capital expenditures at the Damang mine in fiscal2006, primarily on increasing capacity at a tailings storage facility anddevelopment of the Tomento pits. Gold Fields has budgeted approximately $9million of capital expenditure at Damang for fiscal 2007, primarily forcontinued work on the tailings storage facility, construction of the additionalCIL tank and continued development of the new pits.

***Australia Operations***

On November 30,2001, Gold Fields acquired from WMC Limited and WMC Resources Limited(collectively, WMC), members of an Australian mining group, WMC’s gold miningoperations in Australia, including the St. Ives and Agnew gold miningoperations. As part of the consideration for the acquisition, Gold Fieldsagreed to pay to WMC a royalty based on future gold production at St. Ives andAgnew, calculated according to the following criteria:

·       4%of the net smelter return of the gold production of St. Ives for each quarterto the extent that cumulative production of gold from November 30, 2001exceeds 3.3 million ounces, subject to the spot price of gold exceeding A$400per ounce;

·       4%of the net smelter return of the gold production of Agnew for each quarter tothe extent that cumulative production of gold from November 30, 2001exceeds 0.8 million ounces, subject to the spot price of gold exceeding A$400per ounce; and

·       10%of the difference between the spot gold price and A$600 per ounce of gold inrespect of all gold produced from St. Ives and Agnew each quarter after November 30,2001, subject to the spot price of gold exceeding A$600 per ounce.

The royalties are payablein cash, quarterly in arrears. On June 26, 2002, WMC agreed to give up itsright to receive royalties from the Agnew operation in exchange for a paymentof A$3.6 million ($2.0 million at an exchange rate of A$1.80 to $1.00),which was paid on July 11, 2002. At the same time WMC sold its right toroyalties from the St. Ives operation to Morgan Stanley and the obligation topay these royalties is still in effect. During fiscal 2006, the increase ingold price triggered the royalty payable on gold prices above A$600 per ounceand for the year royalties of A$5.2 million (US$3.8 million) were paid.

***St. Ives***

*Introduction*

St. Ives is located 80 kilometers south of Kalgoorlieand 20 kilometers south of Kambalda, straddling Lake Lefroy in WesternAustralia. It holds mining leases covering a total area of approximately 87,400hectares. St. Ives is both a surface and underground operation, with a numberof open pits, two operating underground mines and two metallurgical plants. TheSt. Ives operation has access to the local electricity supplier and water, railand road infrastructure, and needed supplies are trucked in locally from bothKambalda and Kalgoorlie. In fiscal 2006, St. Ives produced 0.497 million ouncesof gold. St. Ives had a workforce of approximately 700 employees as of June 30,2006, approximately 500 of whom were employed by outside contractors, which wasa significant reduction in the number of employees as compared to fiscal 2005,primarily due to the closure of Junction underground mine.

Gold production takesplace over an extensive area at St. Ives, although it is mainly concentrated ina 30 kilometer corridor extending south-southeast from Kambalda acrossLake Lefroy.

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*History*

Gold mining began in theSt. Ives area in 1897, with WMC commencing gold mining operations at St. Ivesin 1980.

*Geology*

The gold deposits of St.Ives are located at the southern end of the Norseman-Wiluna greenstone belt ofthe West Australian Goldfields Province. In the St. Ives area the belt consistsof Kalgoorlie Group volcanic rocks, Black Flag group felsic volcanic rocks andsediments and a variety of intrusive and overlying post-tectonic sediments. Thearea is structurally complex, with host rocks highly metamorphosed to uppergreenschist and lower amphibolite facies. Gold mineralization discovered todate is best developed in the mafic dominated parts of the sequence, hosted inminor structures including vein arrays, breccia zones and central, quartz richand mylonitic parts of shear zones. Deposit styles and ore controls are varied,but deposits are commonly associated with subsidiary structures which splay offthe regionally extensive Boulder-Lefroy Fault.

*Mining*

St. Ives is engaged in underground mining and in bothopen pit and production stockpile surface mining, and is thus subject to all ofthe underground and surface mining risks discussed in “Risk Factors.”Seismicity is the primary safety risk with mining increasingly occurring atdepths below 500 meters. The risk is addressed through the use of backfillingand by mining different parts of the orebody in controlled steps to improvestability, which is called stope sequencing. No fatalities were recorded infiscal 2004, 2005, 2006 or in the first quarter of fiscal 2007. The seriousinjury frequency rate for fiscal 2006, 2005 and 2004 was zero, 0.4 and 0.9serious injuries per million hours worked, respectively.

All underground mining activities are completed undera contract with Carlowen Proprietary Ltd, which trades as GBF UndergroundMining, or GBF. A five-year agreement with GBF commenced in April 2004,and it operates under a cost reimbursable model. GBF provides all theemployees, equipment and consumables necessary to complete the undergrounddevelopment and stoping. Under the terms of the contract, Gold Fields approvesall expenditures incurred and guarantees to reimburse 95% of these costs, withthe remaining 5% plus any profit earned contingent on GBF achieving certain keyperformance indicators. Under the terms of the contract, GBF is liable forclaims arising from its performance or non-performance, and any loss, damage,injury or death related to the presence of its employees onsite. GBF is notliable for liabilities or losses that are the result of negligence or a breachof a statutory duty of the mine owner. GBF is required to ensure that it andany subcontractors have adequate insurance.

Leighton Contractors Proprietary Limited, or Leighton,performs the surface mining at St. Ives, under an alliance contract which wasextended in January 2004 for a five-year period. Leighton providesemployees, consumables and equipment for mining ore and waste disposal. Thecontract is structured so that Leighton carries all the risk on plant andpersonnel with Gold Fields carrying the risk on costs through reimbursement.Leighton is reimbursed 100% of its costs and is given an additional amount foroverhead costs. Payments above costs are contingent upon Leighton achievingcertain key performance indicators. Under the terms of the contract, Leightonis liable for claims arising from its performance or non-performance or anyloss, damage, injury or death related to the presence of its employees on thesites. Leighton is not liable for claims or loss resulting from the mine owner’snegligence. Leighton is required to ensure that it and any subcontractors haveadequate insurance.

St. Ives sources production from a variety ofunderground and surface operations, and has a heap leach operation which treatslow and marginal grade ore. The principal production sources in fiscal 2006included the Leviathan and Argo underground mines together with the Mars andAgamemnon open pits. Gold Fields’ management expects the principal undergroundproduction sources in fiscal 2007 to be similar 

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to fiscal 2006, with the Cave Rocks underground minecontributing as a small additional production source during its developmentphase, provided the feasibility study on this mine returns successful outcomes.The primary open pit production sources are expected to shift in fiscal 2007 asit is anticipated that the Mars and Agamemnon open pits will be fully depletedduring the year and replaced by new open pits at Thunderer, Bahama and DeltaNorth. As many of the operations at St. Ives involve mining deposits on orunder Lake Lefroy (which is a shallow salt pan that has water in it onlyintermittently), extracting ore requires construction of berms and otherearthworks to prevent water intrusion. Open pit operations use 180- to 250-tonexcavators loading 150-ton trucks. Waste dumps are formed adjacent to thepits or, if practicable, waste is dumped in previously exhausted pits.

*ArgoComplex.**  *Stopingactivities at the Argo mine commenced in November 2003. The Argounderground mine operated at near capacity during fiscal 2006, with some delaysresulting from a review of the decline design that was completed in fiscal2005. Margins were below expectations during fiscal 2006. However, plannedaccess to higher grade areas during fiscal 2007 is expected to result insignificant improvements.

*GreaterRevenge Complex.*   Mining at the Greater RevengeArea commenced in 1989. Mining operations at the Greater Revenge Area duringfiscal 2006 consisted primarily of the Agamemnon and Mars open pit mines, whichare located in Lake Lefroy. The mines apply typical open pit and lake sedimentmining methods. Further exploration and mine design updates resulted in extensionsto the Agamemnon open pit during fiscal 2006. It is expected that both the Marsand Agamemnon pits will be fully depleted during fiscal 2007.

*LeviathanUnderground Complex.*   The Leviathan complexconsists of three distinct underground areas: Sirius (fully depleted in fiscal2005); East Repulse; and Conqueror. East Repulse commenced stoping operationsin fiscal 2004 and mining continued throughout fiscal 2006 with delineation ofadditional production areas, enabling the mine life to be extended to the endof fiscal 2006. Development of the Conqueror area began in late fiscal 2004with water drainage and rehabilitation of old access areas. Development wasfurther accelerated in fiscal 2005 and the area achieved targeted productionlevels during the course of fiscal 2006. Production from Conqueror is expectedto remain strong throughout fiscal 2007. Gold Fields is continuing to exploreopportunities for further extensions of mining operations within the Leviathancomplex.

*ThundererOpen Pit.*   Waste removal at the Thunderer openpit commenced in fiscal 2006 and is planned to continue through the first halfof fiscal 2007. It is expected that ore production will commence in the secondhalf of fiscal 2007, commensurate with the cessation of mining at the Agamemnonand Mars open pits. The mine applies typical open pit and lake sediment miningmethods. The deposit is located straddling the southern shore of Lake Lefroy tothe east of the new Lefroy processing plant. The deposit is hosted underneathmoderate depths of lake sediment and dunal sand cover.

*BahamaOpen Pit.*   Mining commenced at the Bahama openpit in the first quarter of fiscal 2007 with waste removal. This deposit islocated in the middle of Lake Lefroy and to the immediate north east of theSanta Ana open pit, mined by WMC in the mid-1990s. The mine will alsoapply typical open pit and lake sediment mining methods. The deposit is hostedunderneath shallow lake sediment cover.

*DeltaNorth Open Pit.*   Mining, in the form of wasteremoval, commenced at the Delta North open pit in the first quarter of fiscal2007. This deposit is located near the shoreline of Lake Lefroy, adjacent tothe current Agamemnon open pit. The mine will also apply typical open pit andlake sediment mining methods. The deposit is hosted underneath shallow lakesediment cover.

*CaveRocks Prospect.**  *CaveRocks is a prospect located approximately five kilometers to the west of theKambalda West township that was previously an open pit mine in the mid-1980sfor WMC. Gold Fields is finalizing feasibility studies at Cave Rocks for anunderground mining operation that would utilize uphole 

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open stoping methods with access to the orebodythrough a decline tunnel which accommodates workers, materials and equipment.If the feasibility study returns successful outcomes, mine development isexpected to commence at the end of calendar 2006, with minor ore productionbeing available during the latter part of fiscal 2007.

*LeviathanOpen Pit Prospect.**  *TheLeviathan open pit prospect envisions the potential expansion of pre-existingopen pit mining directly above the Leviathan underground complex The prospectis characterized by bulk tonnages at relatively low grades that may be amenableto treatment through a modified heap leach circuit involving the introductionof different crushing technology. In addition the prospect contains some of theup dip zones currently and previously mined from underground, which would besuitable for treatment in the conventional CIL circuit. Gold Fields completed apre-feasibility study on the prospect during fiscal 2006 and will beundertaking feasibility studies during fiscal 2007. If the feasibility studiesreturn successful outcomes, Gold Fields is likely to commence infrastructureconstruction and mine development during the latter half of fiscal 2007. Ifdeveloped, the mine will utilize conventional shovel and truck miningpractices; however, as it is located on land that has bulk mining zones,opportunity exists for the use of larger equipment.

St. Ives focused carefully on exploration activitiesduring fiscal 2006. As a result, a “whole of lease” geological studyincorporating shallow aircore drilling and deep stratigraphic diamond drillingwas undertaken. During fiscal 2007, this program will continue and incorporatefollow-up exploration on identified targets. In addition, during fiscal 2006exploration was advanced on a number of near mine extensions and new mineopportunities.

The complexity of the orebodies at St. Ives presentedparticular challenges to production levels and recovered grades in fiscal 2006.Refinement of the open pit and underground geological models was ongoing duringfiscal 2006 as a result of increased emphasis on exploration drilling and geologicalinterpretation at St. Ives. The delays experienced after the re-design of theArgo underground decline further delayed St. Ives in its plans to reach some ofthe higher grade portions of the orebody, which will now be accessed duringfiscal 2007. Increased mining dilution was experienced in parts of the Mars andAgamemnon open pits due to accessibility issues, as some working areas becamequite restricted.

The St. Ives production schedule requires that newopen pit mining sources are progressively accessed. The Thunderer open pitbegan waste stripping during fiscal 2006 and it is expected that the Bahama andDelta North open pits will commence production during fiscal 2007. In addition,feasibility work for a new underground mine at Cave Rocks is being finalizedand, subject to those final results, Gold Fields intends to commencepre-development activities necessary to bring that production source on lineduring fiscal 2007.

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Detailedbelow are the operating and production results at St. Ives for the past threefiscal years.

| ** **                                 | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------------|------------|----------------------------------------|------------|
| ** **                                 | ** ** | **2004**                               | ** ** | **2005** | ** ** | **2006** | ** ** |
| **Production**                             | ** ** | ** **                             | ** ** | ** ** | ** ** | ** ** | ** ** |
| Tons (‘000)                           |       | 6,744                                  |       | 6,332 |   | 6,690 |   |
| Recovered grade  (g/t)                     |       | 2.5                                    |       | 2.6 |   | 2.3 |   |
| Gold produced  (‘000 oz)              |       | 543                                    |       | 527 |   | 497 |   |
| **Results of operations ($ million)** | ** ** | ** **                             | ** ** | ** ** | ** ** | ** ** | ** ** |
| Revenues                                   |       | 211.8                                  |       | 221.4 |   | 260.8 |   |
| Total production  costs(1)(2)              |       | 204.7                                  |       | 231.6 |   | 242.2 |   |
| Total cash costs(3)                        |       | 162.6                                  |       | 176.9 |   | 171.9 |   |
| Cash profit(4)                             |       | 49.2                                   |       | 44.5 |   | 88.9 |   |
| **Cost  per ounce of gold ($)**            | ** ** | ** **                             | ** ** | ** ** | ** ** | ** ** | ** ** |
| Total production  costs                    |       | 377                                    |       | 439 |   | 488 |   |
| Total cash costs                           |       | 300                                    |       | 336 |   | 346 |   |

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Notes:

(1)           For purposes of allocating production costs between St.Ives and Agnew, the consideration paid for the Australian operations in excessof the book value of the underlying net assets was allocated pro rata to thevalue of the underlying assets. 

(2)           For a reconciliation of Gold Fields’ total productioncosts to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

(3)           For a reconciliation of Gold Fields’ total cash coststo production costs, see “Operating and Financial Review and Prospects—Resultsof Operations.”

(4)           Cash profit represents revenues less total cash costs.

From fiscal 2005 to fiscal 2006, there was an increasein tonnage at St. Ives as a result of a full year of production from the newLefroy Plant which achieved slightly better than nameplate capacity. Tonnagetreated through the heap leach circuit declined slightly in fiscal 2006 due towork undertaken to upgrade the plant after St. Ives acquired the crushingcircuit from the previous contractor in fiscal 2005. Gold production declinedfrom fiscal 2005 to fiscal 2006 primarily due to the depletion of the highergrade Junction underground mine during fiscal 2005, which was effectivelyreplaced by lower grade open pit ore during fiscal 2006. In addition, the EastRepulse area within the Leviathan underground complex moved into the lowergrade areas of its reserves as mining neared completion. Total cash costs infiscal 2006 increased slightly as compared to fiscal 2005 due to reduced goldproduction and rising input costs.

From fiscal 2004 to fiscal 2005, there was a decreasein both tonnage and gold produced at St. Ives as a significant transitionoccurred in the processing plants. During fiscal 2005, milling activities atthe St. Ives Plant were terminated and replaced by the new Lefroy Plant. In thepast, Gold Fields has used other mills in the area to supplement productioncapabilities at St. Ives. In fiscal 2005, Gold Fields did not use otherprocessing facilities and reduced the amount of tonnage processed in fiscal2005 while the new Lefroy Plant came online. Total cash costs increased ascompared to fiscal 2004 levels primarily as a result of poor open pit grades,low underground productivities and, to a lesser extent, costs associated withthe winding down of the old plant and initial operations at the new LefroyPlant.

Assuming that Gold Fieldsdoes not increase or decrease reserves estimates at St. Ives and that there areno changes to the current mine plan at St. Ives, St. Ives’ December 31,2005 proven and probable reserves of 2.2 million ounces will be sufficientto maintain production through approximately fiscal 2010. However, as discussedearlier in “Risk Factors” and “—Mine Planning and Management,” there arenumerous 

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factors which can affectreserve estimates and the mine plan, which could thus materially change thelife of mine.

*Processing*

The table below sets forthyear commissioned, processing techniques and processing capacity per month, aswell as average tons milled per month and metallurgical recovery factors duringfiscal 2006, for each of the plants at St. Ives. The Heap Leach Plant operationtreats low and marginal grade ore from St. Ives. The crushing and stackingfor this plant was previously conducted by a contractor, Henry Walker EltinProprietary Ltd, or Henry Walker Eltin. Gold Fields bought Henry Walter Eltin’scrushing equipment, which forms part of the Heap Leach Plant, in fiscal 2005and now does its own crushing and stacking.

**Processing Techniques**

| **Processing Techniques** | ** ** |
|--------------------------------|------------|
| **Plant**                      | ** ** | ** ** | ** ** | **Year   commissioned** | ** ** | **Comminution   phase** | ** ** | **Treatment   phase** | ** ** | **Capacity(1)** | ** ** | **Average   milled for the   year ended   June 30, 2006** | ** ** | **Approximate   recovery   factor for the   year ended  June 30,   2006(2)** | ** ** |
| ** **                     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **(tons/month)** | ** ** | ** ** | ** ** |
| Lefroy Plant                   |       |   | 2005 |   |   | Single  stage   crushing and   SAG milling |   | CIP |   |   | 375,000 |   |   |   | 381,000 |   |   |   | 94 | % |   |
| Heap Leach  Plant(3)           |       |   | 2000 |   |   | Multiple stage   crushing and   screening   process |   | Carbon   absorption |   |   | 167,000 |   |   |   | 177,000 |   |   |   | 53 | % |   |

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Notes:

(1)           Nameplate capacity as stated by the manufacturer.Plant/Mill nameplate capacities are based on a number of operating assumptions,including assumptions regarding the blend of soft and hard ores processed, thatcan change and which may result in an increased level of throughput over andabove the designed nameplate capacity.

(2)           Percentages are rounded to the nearest whole percent.

(3)           Heap leach recoveries are the result of an extendedsolution application process with full recovery requiring several leach cycles.Full recovery of all recoverable gold (about 60% of the contained gold) forcurrent ores is only achieved over several years. Thus, recoveries must beconsidered in terms of recovery as time progresses, or a “progressive”recovery. Over time, Gold Fields expects the plant to achieve progressiverecovery factors of about 60% of contained gold, equivalent to full recovery ofall recoverable gold.

The Lefroy Plant was fully commissioned in February 2005and is located on the south shore of Lake Lefroy, approximately 12 kilometerssouth of the township of Kambalda. The plant consistently achieved nameplatecapacity throughout fiscal 2006 and optimization continued throughout the yearto realize incremental improvements in throughput, costs and recovery.

During fiscal 2006, anumber of improvements were made on the heap leach circuit after it waspurchased from Henry Walker Eltin in fiscal 2005. In addition, a feasibilitystudy was completed and approval obtained for the installation of anagglomeration drum which should improve leaching performance of low grade oxideores. The agglomeration drum will be installed and is expected to beginoperation in the third quarter of fiscal 2007. The feasibility study into theLeviathan open pit prospect, expected to be completed during the second quarterof fiscal 2007, incorporates investigation of opportunities to increaserecoveries and throughput through introduction of different crushing technologywithin the heap leach circuit.

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*Capital Expenditure*

Gold Fields spentapproximately A$61 million on capital expenditures at St. Ives in fiscal 2006,primarily on exploration, on-going development of underground operations at theArgo and Leviathan complex and waste removal at the Thunderer open pit. GoldFields has budgeted approximately A$101 million for capital expenditure at St.Ives for fiscal 2007, which includes approximately A$22 million forinfrastructure associated with modifying the crushing circuit of the heap leachfacility should the Leviathan open pit feasibility study prove successful. Thebalance of the budget for fiscal 2007 capital expenditure is principallyearmarked for exploration and mine development. Development expenditures areexpected to focus on the ongoing development of the Argo underground mine,commencement of development of the Cave Rocks underground mine, completion ofinitial waste removal at the Thunderer open pit and commencement of wasteremoval from the Bahama open pit. For financial reporting purposes, expenditureon exploration is expensed as incurred.

***Agnew***

*Introduction*

Agnew is located 23kilometers southwest of Leinster, approximately 375 kilometers north ofKalgoorlie in Western Australia. It holds mining leases covering a total areaof approximately 61,602 hectares. Agnew is a surface and undergroundoperation, with one open pit, one underground mine, and one metallurgicalplant. Agnew has access to the local electricity supplier and roadinfrastructure. Water is supplied from local wells, and needed supplies aregenerally trucked in from Kalgoorlie. In fiscal 2006, it produced 0.222 millionounces of gold. As of June 30, 2006, Agnew had approximately 400 employees,including approximately 200 employed by outside contractors.

*History*

Gold was discovered atAgnew in 1895 and has been produced there since then. WMC acquired theoperation in the early 1980s and commenced open pit mining operations in 1987.

*Geology*

The Agnew deposits arelocated within the northwest portion of the Norseman-Wiluna greenstone belt ofthe West Australian Goldfields. In the Agnew area the greenstone belt consistsof an older sequence of ultramafic flows, gabbros, basalts, felsic volcanicsand related sedimentary rocks. The rocks are folded about the large, moderatelynorth plunging Lawlers Anticline. The Agnew deposits are located on the westernlimb of this anticline, and major deposits discovered to date lie at or nearthe sheared contact with the overlying sequence of sedimentary rocks. Theanticline is cut by north-northeast trending faults such as the Waroonga andEast Murchison Unit shear zones.

*Mining*

Agnew is engaged in underground mining and in open pitand production stockpile surface mining and is thus subject to all of theunderground and surface mining risks discussed in “Risk Factors.” The primarysafety risk at Agnew is falls of ground at the underground operations, which isaddressed through the use of ground support, backfilling of open voids andsequencing of mine operations to improve overall stability of the ground. Therewere no fatalities at Agnew in fiscal 2004, 2005, 2006 or in the first quarterof fiscal 2007. The serious injury frequency rate for fiscal 2006, 2005 and2004 was zero, 2.2 and 3.7 serious injuries per million hours worked, respectively.In fiscal 2006, the Agnew mine was awarded the Australian Mining Prospect Awardfor 2005 for excellence in Mine Occupational Health and Safety.

Leighton Contractors Proprietary Limited, or Leighton,performs the surface mining at Agnew, under an alliance-style contract whichcommenced in August 2004 for a 35-month period. Leighton provides 

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employees, consumables and equipment for mining oreand waste disposal. The contract is structured so that Leighton carries all therisk on plant and personnel, with Gold Fields carrying the risk on coststhrough reimbursement. Leighton is reimbursed 100% of its costs and is given anopportunity to earn a bonus. Bonus payments are contingent upon Leightonachieving certain key performance indicators. Under the terms of the contract,Leighton is liable for claims arising from its performance or non-performance andany loss, damage, injury or death related to the presence of its employees onthe sites. Leighton is not liable for claims or loss resulting from the mineowner’s negligence. Leighton is required to ensure that it and anysubcontractors have adequate insurance.

Most underground mining labor at the underground minesis currently provided by Byrnecut Mining Limited, or Byrnencut. Byrnecutprovides employees, supplies and equipment for underground mining activitiesincluding drilling, blasting and haulage of the material produced from themining activities, including both ore and waste. Byrnecut receives fees underthe contracts which depend on the type of service being performed and theequipment being used, with adjustments for performance. Under the terms of theagreement, Byrnecut is liable for claims arising from its performance ornon-performance and any loss, damage, injury or death related to the presenceof its employees on the sites. Byrnecut is not liable for claims or loss due tothe mine owner’s negligence. Byrnecut is required to ensure that it and anysubcontractors have adequate insurance. The current agreement was extended to May 23,2007 during fiscal 2006 and negotiations have begun on a further extension andscope increase.

The principal production sources in fiscal 2006 atAgnew were the Waroonga underground mining complex that comprises the Kim andMain Lodes together with the Songvang open pit. Gold Fields expects theprincipal production sources in fiscal 2007 to be similar, with potentialdevelopment of smaller underground operations at Claudius and Vivien currentlysubject to feasibility studies and targeted for production in fiscal 2008 and2009, respectively.

*WaroongaComplex.**  *TheWaroonga Complex currently includes underground mining of the Kim and Main Lodedeposits. Underground mining currently involves open stoping methods withcemented aggregate or paste fill placed in mined out voids to improve groundstability and minimize waste dilution. Access to the orebody is through adecline tunnel which accommodates workers, materials and equipment. All miningis currently conducted by Byrnecut. Fiscal 2006 ore production from the highgrade Kim deposit exceeded planned expectations and offset a slower ramp up ofthe new lower grade Main Lode deposit caused by a review of trial miningresults undertaken in late fiscal 2005 and early fiscal 2006. In fiscal 2006,exploration continued to extend the life of the Kim deposit. In fiscal 2007,Gold Fields expects the Kim deposit to produce at consistent levels and it isanticipated that Main Lode production will increase to levels sufficient tosupplement the higher grade Kim production.

*SongvangOpen Pit.**  *TheSongvang open pit, located 16 kilometers south of the Agnew metallurgicalplant, commenced production during fiscal 2005. Mining during fiscal 2006 fellbehind planned expectations due to the continuation of industry wide shortagesin skilled workforce during the current resources boom and harder than expectedground conditions, which impacted equipment productivity. During fiscal 2006,the various cutback stages of the pit were synchronized and the mine will nowbe developed in one single stage until expected completion in fiscal 2008.Improved mining practices are being implemented to counter the harder groundconditions with commensurate improvements in productivity. It is expected thatby the third quarter of fiscal 2007 the mine will be producing from the corezone of the orebody, with improved ore volumes and grade.

*ClaudiusUnderground Prospect.**  *TheClaudius underground prospect consists of a parallel extension to Agnew’sformer Crusader and Deliverer underground mines. The infrastructure associatedwith the previous mining enabled the establishment, in fiscal 2005, of anexploration decline to the Claudius Prospect. Gold Fields has continued itsevaluation of the Claudius Prospect during fiscal 2006 but deferred making adevelopment decision on the project until fiscal 2007, due to the performanceof the Kim underground deposit within the Waroonga complex, which has exceededexpectations.

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*VivienUnderground Prospect.**  *TheVivien underground prospect is located approximately six kilometers north-eastof the Agnew metallurgical plant. During fiscal 2006, exploration wasundertaken to improve management’s understanding of geological controls andtest for repeat zones of mineralization. Gold Fields expects to completeevaluation of the project during fiscal 2007 and make a decision on developmentand/or further exploration requirements during the course of the year.

In fiscal 2006, Gold Fields executed an agreement withBMV Properties Pty Ltd, a subsidiary of Breakaway Resources Limited, orBreakaway. The previous joint venture agreements between the partiesencompassing the Vivien deposit and the Miranda tenement package were replacedby an agreement in which Gold Fields is to be the registered tenement holder ofall of the Vivien ground and the majority of the Miranda ground with all goldrights going to Gold Fields and all base metals rights going to Breakaway.Breakaway’s base metal rights are subject to Gold Fields’ right to a 2% royaltyon future base metal production on the Miranda tenement. Although the agreementwas executed in fiscal 2006, final settlement was dependent on the satisfactionof several outstanding conditions precedent, the principal one being the releaseof a third-party mortgage held over the tenements for gold and base metalroyalties. By the end of fiscal 2006, the agreement of the third-party mortgageholder had been confirmed, but other third-party consents (principallypertaining to access rights) were yet to be obtained. Final settlement isexpected to take place in the second quarter of fiscal 2007. In the interimperiod, Gold Fields and Breakaway have operated under a covering agreementstating that both parties will act in accordance with the terms and conditionsas set forth in the new agreement.

Fiscal 2007 exploration at Agnew will be focused onearly stage prospects within the regional tenements, including the Mirandatenement package, while continuing to look at reserve extensions at existingmine operations and feasibility projects, in particular at the Kim deposit.

Detailed below are theoperating and production results at Agnew for the past three fiscal years.

| ** **                                 | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------------|------------|----------------------------------------|------------|
| ** **                                 | ** ** | **2004**                               | ** ** | **2005** | ** ** | **2006** | ** ** |
| **Production**                             |       |                                   |       |   |   |   |   |
| Tons (‘000)                           |       | 1,179                                  |       | 1,170 |   | 1,323 |   |
| Recovered grade (g/t)                      |       | 5.3                                    |       | 5.6 |   | 5.2 |   |
| Gold produced (‘000 oz)               |       | 202                                    |       | 212 |   | 222 |   |
| **Results of operations ($ million)** |       |                                   |       |   |   |   |   |
| Revenues                                   |       | 78.5                                   |       | 89.3 |   | 116.1 |   |
| Total production  costs(1)(2)              |       | 61.1                                   |       | 69.1 |   | 72.4 |   |
| Total cash costs(3)                        |       | 44.5                                   |       | 49.4 |   | 59.7 |   |
| Cash profit(4)                             |       | 34.0                                   |       | 39.9 |   | 56.4 |   |
| **Cost per ounce of gold ($)**             |       |                                   |       |   |   |   |   |
| Total production costs                     |       | 303                                    |       | 325 |   | 326 |   |
| Total cash costs                           |       | 221                                    |       | 233 |   | 268 |   |

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Notes:

(1)           For purposes of allocating production costs between St.Ives and Agnew, the consideration paid for the Australian operations in excessof the book value of the underlying net assets was allocated pro rata to thevalue of the underlying assets.

(2)           For a reconciliation of Gold Fields’ total productioncosts to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

(3)           For a reconciliation of Gold Fields’ total cash coststo production costs see “Operating and Financial Review and Prospects—Resultsof Operations.”

(4)           Cash profit represents revenues less total cash costs.

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In fiscal 2006, 1.3 million tons of ore were processedand 0.2 million ounces of gold were produced. Tons processed and goldproduction were higher than fiscal 2005 due to improved productivity throughthe processing plant from systematic de-bottlenecking studies and actions,while maintaining ore grades at previous levels. The cessation of mining fromthe Crusader underground mine during fiscal 2005 was offset in fiscal 2006 byincreased production from the Waroonga underground complex and improved gradesfrom the Songvang open pit. Total cash costs increased during fiscal 2006, asthe contribution from the higher cost Songvang open pit increased and open pitmining costs increased as the mine progressed into deeper and harder portions ofthe deposit.

In fiscal 2005, 1.2 million tons of ore were processedand 0.2 million ounces of gold were produced. Tons processed were similar tothe results from fiscal 2004, and gold production increased slightly due inlarge part to a higher proportion of ore coming from the Kim underground mine,which generally has a higher grade than other ore sources at Agnew. Total cashcosts increased as the Australian dollar continued to appreciate against theU.S. dollar, even though the costs actually decreased marginally when stated inAustralian dollars per ounce, the functional currency of this mine.

Assuming that Gold Fieldsdoes not increase or decrease reserves estimates at Agnew and that there are nochanges to the current mine plan at Agnew, Agnew’s December 31, 2005proven and probable reserves of 0.8 million ounces will be sufficient tomaintain production through approximately fiscal 2010. However, as discussedearlier in “Risk Factors” and “—Mine Planning and Management,” there arenumerous factors which can affect reserve estimates and the mine plan, whichcould thus materially change the life of mine.

*Processing*

All processing at Agnew isprovided by a single plant. The following table sets forth year commissioned,processing techniques and processing capacity per month, as well as averagetons milled per month and the metallurgical recovery factor during the fiscalyear ended June 30, 2006 for the plant:

**Processing Techniques**

| **Processing Techniques** | ** ** |
|--------------------------------|------------|
| **Plant**                      | ** ** | ** ** | ** ** | **Year  commissioned** | ** ** | **Comminution  phase** | ** ** | **Treatment  phase** | ** ** | **Capacity(1)** | ** ** | **Average milled  for the year  ended June 30,  2006** | ** ** | **Approximate  recovery factor  for the year  ended June 30,  2006(2)** | ** ** |
| ** **                     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **(tons/month)** | ** ** | **(tons/month)** | ** ** | ** ** | ** ** |
| Main Plant                     |       |   | 1986 |   |   | SAG milling |   | CIP  treatment |   |   | 100,000 |   |   |   | 110,000 |   |   |   | 94 | % |   |
|                                |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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Notes:

(1)           Nameplate capacity as stated by themanufacturer. Plant/Mill nameplate capacities are based on a number ofoperating assumptions, including assumptions regarding the blend of soft andhard ores processed, that can change and which may result in an increased levelof throughput over and above the designed nameplate capacity.

(2)           Percentages are rounded to the nearestwhole percent.

In fiscal 2006,refurbishment of the three leach tanks was completed by November 2005 anda continued focus on systematic de-bottlenecking and minor capital expendituresenabled an improvement in plant throughput.

*Capital Expenditure*

Gold Fields spentapproximately A$23 million on capital expenditures at Agnew in fiscal 2006,primarily on mine site exploration and ongoing development of the Kim and MainLode underground mines. Gold Fields has budgeted approximately A$33 million forcapital expenditure at Agnew for fiscal 2007, primarily 

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for exploration, furtherdevelopment of the Kim and Main Lode underground mines, development of newunderground mines at Vivien and Claudius and expansion of accommodationfacilities in the Leinster township. For financial reporting purposes,expenditure on exploration is expensed as incurred.

***Venezuela Operation***

Gold Fields acquired aneffective 95% interest in the Choco 10 gold mine and surrounding explorationtenements in the El Callao district of Guayana, Venezuela, through the purchaseof Bolivar. This transaction was announced on November 21, 2005, for atotal cash consideration of US$330 million, and became effective on February 28,2006.

Gold Fields owns itsinterest in the Choco 10 mine through its holding in Promotora Minera deGuayana (PMG) S.A., or PMG. PMG is a joint venture between Promotora Minera deVenezuela, S.A., or Promiven (a wholly-owned subsidiary of Gold Fields which itacquired from Bolivar), and a subsidiary of Corporación Venezolana de Guayana,or CVG, a governmental development entity for the Guayana region. Gold Fieldsassumed operation of PMG on March 1, 2006. The remaining interest in PMGis not subject to dilution and is in the process of being transferred to adifferent subsidiary of CVG that is in charge of mining activities in theregion. This transfer is being made as a result of a settlement agreement enteredinto with the mediation of the Ministry of Basic Industries and Mines inconnection with a shareholding dispute regarding the share capital of PMG thatarose prior to Gold Fields’ acquisition of Bolivar. As a consequence of thesettlement agreement, Gold Fields’ legal ownership interest in PMG will reflectthe 95% effective interest it acquired from Bolivar. As part of the settlement,Bolivar and Gold Fields have agreed to make payments totaling US$6 million(of which US$5 million has been paid) to a subsidiary of CVG that originallyheld the remaining interest in PMG.

The properties heldthrough PMG, including Choco 10, Choco 4, Bochinche B1 and B2 and BochincheZero, are owned 95%. Other exploration properties, which include Choco 1, 2, 9,12, and 13, are wholly-owned by Gold Fields and are held through various otherVenezuelan subsidiaries. Gold Fields holds an option to acquire two otherexploration properties, Increible 16 and Choco 6.

When it acquired PMG in2003, Bolivar agreed to pay to the prior owner of PMG (Cemex Venezuela C.A., orCemex) a royalty on gold production from Choco 10 and/or Choco 4. The royaltybecomes payable once gold production attributable to Cemex’s interest in PMG exceeds700,000 ounces of gold produced. Cemex held 70% of PMG, so the amount ofproduction attributable to Cemex’s interest is 70% of total gold production. Once this level of production is reached,the amount of the royalty will be calculated monthly using the average LondonPM fixing price of gold during the calendar month, but will be payablequarterly in arrears. The royalty is US$10 per ounce, but increases to US$15per ounce, if the average price of gold for the relevant calendar month reachesUS$315 or more and US$20 per ounce, if the average price of gold for therelevant calendar month reaches US$400 or more. If Cemex wants to sell itsright to receive the royalty to a third party, it must first offer it to GoldFields on the same terms.

In addition, pursuant to the Choco 4 and Choco 10 leaseagreements between CVG and PMG, PMG must pay a monthly production royalty toCVG and CVG Técnica Minera C.A. (a CVG subsidiary). The royalty is paid monthlyin arrears in Bolivars, at the official exchange rate in place (or in gold atthe request of CVG), within the first 10 days of each calendar month, based onthe production of the immediately preceding calendar month. It is calculated monthly,is based on the number of ounces of gold produced and ranges between 1.0% and3.5%, depending on the average price of gold in the New York market for therelevant month, as determined by CVG. This royalty amount is subject to valueadded tax at a rate of 14%.

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***Choco 10***

*Introduction*

The Choco 10 mine islocated in the south-eastern part of Venezuela in the Bolivar state,approximately 15 kilometers west of the town of El Callao. The mine is locatedon an exploitation project which amalgamates the Choco 10 and Choco 4Concessions. Choco 10 operates under a mining lease which is approximately2,100 hectares. The major industrial city of Puerto Ordaz is located 190kilometers northwest of El Callao and is linked to the mine by paved road.Venezuela has a good road infrastructure, although close to the mine area road conditionshave been deteriorating during the last 15 years. Under the terms of itsexploitation certificate Gold Fields is obligated to maintain a portion of theaccess road for the Choco 10 mine.

Most of Gold Fields’mining rights in Venezuela (including the Choco 10 mine) are concessionsgranted to CVG, which have been leased by CVG to different subsidiaries of GoldFields. The Choco 10 mine commenced production in August 2005. Currentoperations consist of open pit mining and a processing plant comprisingconventional comminution and carbon-in-pulp processing. The Choco 10 mine usestypical open pit mining methods of drilling, blasting, loading and hauling.Gold Fields is currently operating two pits within the Choco 10 concession,Pisolita and Rosika-Coacia. The pits are located two to three kilometers fromthe main plant.

The Choco 10 mine isconnected to the main electricity grid that transmits energy from Venezuela toBrazil. A rain-dependent reservoir supplies water for use at the mine, which issupplemented through a well field that is being developed and commissioned. Inaddition, Gold Fields plans to extract water from the Yurari River locatedapproximately 5 kilometers from the mine. For the four-month period endedJune 30, 2006, the Choco 10 mine produced approximately 0.025 millionounces of gold, of which approximately 0.024 million ounces were attributableto Gold Fields. As of June 30, 2006, Choco 10 had approximately 600employees, including 150 employed by outside contractors.

*History*

Mining in the area of theChoco 10 Concession dates back to 1897, when a British company operated thehistoric Concordia mine located 2 kilometers from the current Choco 10operation. Modern exploration commenced with Promiven’s 1992 concession forChoco 10. The mine was commissioned in April 2005 and operations startedin August of the same year.

*Geology*

Gold mineralization istypical of Archaean-Proterozoic orogenic gold deposits. The deposit is hostedin the Early Proterozoic sequence of the Pastora Greenstone Belt of the GuianaShield. The stratigraphy comprises a tholeiitic to calc-alkaline volcanicpackage, overlain by volcaniclastic and epiclastic rocks intruded by gabbroicsills. The rock package has been subjected to intense tropical weathering.Mineralization is hosted in a series of structurally controlled quartz-veinshear lodes which dominantly strike north-south and northeast-southwest.High-grade gold mineralization occurs with pyrite, carbonate, strongsilicification and quartz-veining in low-strain zones of deformation typicallyassociated with folding and chaotic foliations.

*Mining*

Choco 10 engages in open pit and production stockpilesurface mining and is thus subject to all of the surface mining risks discussedin “Risk Factors.” Although surface mining generally is less dangerous thanunderground mining, serious and even fatal accidents do still occasionallyoccur. Choco 10 did not have any fatal injuries in fiscal 2006 or in the firstquarter of fiscal 2007. Because Gold Fields took over operation of the minelate in fiscal 2006, the Company was not able to generate fiscal year accidentfrequency rates on a basis comparable to those provided for Gold Fields’ otheroperations.

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Choco 10 currently presents no unusual challengesbeyond those faced at most open pit mining operations. However, harder ores areexpected to be produced as the mine depth increases into fresh rock, which isexpected to reduce the processing plant’s capacity in line with previousfeasibility studies. The principal operational challenges include improving theprocessing plant availability and throughput. Measures intended to addressthese challenges include upgrading the crusher circuit to handle fresh rock,securing alternative water sources for processing plant usage and improving theavailability of the mining fleet which is currently unacceptably low.

Gold Fields owns its own fleet of mining equipmentwhich it acquired as part of the Bolivar transaction. The fleet is presentlyexperiencing low mechanical availability due mainly to the lack of criticalspares parts and the long lead time associated with procurement. Recently,several consignment contracts have been put in place and consequentlyavailabilities are expected to rise in the future.

Detailedbelow are the operating and production results at Choco 10 for the four-monthperiod from March 1, 2006 to June 30, 2006 (the period of Gold Fields’ownership of the mine in fiscal 2006).

| ** **                                  | ** ** | **Four months ended  June 30, 2006** | ** ** |
|---------------------------------------------|------------|----------------------------------------------------------|------------|
| **Production**                              | ** ** |                                                     | ** ** | ** ** |   |
| Tons (‘000)                            |       |                                                     | 454        | ** ** |   |
| Recovered grade  (g/t)                      |       |                                                     | 1.7        | ** ** |   |
| Gold produced  (‘000 oz)(1)            |       |                                                     | 25         | ** ** |   |
| **Results  of operations ($ million)** | ** ** |                                                     | ** ** | ** ** |   |
| Revenues                                    |       |                                                     | 16.9       | ** ** |   |
| Total production  costs(2)                  |       |                                                     | 11.3       | ** ** |   |
| Total cash  costs(3)                        |       |                                                     | 8.3        | ** ** |   |
| Cash profit(4)                              |       |                                                     | 8.6        | ** ** |   |
| **Cost  per ounce of gold ($)(5)**          | ** ** |                                                     | ** ** | ** ** |   |
| Total production  costs                     |       |                                                     | 399        | ** ** |   |
| Total cash costs                            |       |                                                     | 293        | ** ** |   |

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Notes:

(1)           In fiscal 2006, production is reported fromMarch 1, 2006, the date on which Gold Fields acquired the mine, and forthis period 0.024 million ounces of gold were attributable to Gold Fields, withthe remainder attributable to minority shareholders in the Venezuelanoperation.

(2)           For a reconciliation of Gold Fields’ total productioncosts to production costs, see “Operating and Financial Review andProspects—Results of Operations.”

(3)           For a reconciliation of Gold Fields’ total cash coststo production costs see “Operating and Financial Review and Prospects—Resultsof Operations.”

(4)           Cash profit represents revenues less total cash costs.

(5)           Calculated based on ounces of gold sold.

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*Processing*

Allprocessing at Choco 10 is provided by a single plant. The following table setsforth year commissioned, processing techniques and processing capacity permonth, as well as average tons milled per month and metallurgical recoveryfactor during the fiscal year ended June 30, 2006 for the plant:

**Processing Techniques**

| **Processing Techniques** | ** ** |
|--------------------------------|------------|
| **Plant**                      | ** ** | ** ** | ** ** | **Year  commissioned** | ** ** | **Comminution  phase** | ** ** | **Treatment  phase** | ** ** | **Capacity(1)** | ** ** | **Average milled  for the year  ended June 30,  2006** | ** ** | **Approximate  recovery factor  for the year  ended June 30,  2006(2)** | ** ** |
| ** **                     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **(tons/month)** | ** ** | **(tons/month)** | ** ** | ** ** | ** ** |
| Choco 10 Plant                 |       |   | 2005 |   |   | Single stage  crushing with  SAG and ball  milling |   | CIP treatment |   |   | 160,000 |   |   |   | 113,500 |   |   |   | 92 | % |   |
|                                |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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Notes:

(1)           Nameplate capacity as stated by the manufacturer.Plant/Mill nameplate capacities are based on a number of operating assumptions,including assumptions regarding the blend of soft and hard ores processed, thatcan change and which may result in an increased level of throughput over andabove the designed nameplate capacity.

(2)           Percentages are rounded to the nearest whole percent.

Choco 10 ore is processedusing a conventional SAG-ball milling system and CIP circuit plant. The plantwas commissioned in 2005. During the period of ownership by Gold Fields it hasbecome apparent that modifications and improvements will be required to raisethe current throughput to the nameplate throughput consistently and safely.These improvements are in progress and are expected to be completed in thefirst half of fiscal 2007. Production is expected to ramp up from currentlevels through to the end of calendar 2006, with nameplate capacity of 5,400tons per day being consistently and safely achieved as from the beginning ofcalendar 2007.

*Capital Expenditure*

Post-acquisition, GoldFields spent approximately $5 million on capital expenditure at the Choco 10operation in fiscal 2006, primarily on exploration and to complete Bolivar’spartial installations in the mine, mill and CIP plant. Gold Fields has budgetedapproximately $26 million for capital expenditure at Choco 10 for fiscal 2007,principally to reach plant nameplate capacity and for on-mine exploration. Forfinancial reporting purposes, expenditure on exploration is expensed asincurred.

**Exploration**

Gold Fields holds a diverse portfolio of active goldand platinum group metal exploration projects and assets in Africa, Europe, theAmericas and Australasia, which are primarily held through project companiesincorporated in the jurisdiction where the exploration projects or assets arelocated. In addition, Gold Fields has in place a number of exploration projectsin connection with mineral rights it holds which are adjacent to its activemining operations and advanced exploration projects in South Africa, Ghana,Peru, Venezuela and Australia. Gold Fields’ exploration program isheadquartered in Denver, Colorado, which also acts as the regional office forthe Americas, with regional offices in Oxford, England (responsible for Europe,the former Soviet Union and Africa), Perth, Australia (responsible forAustralasia) and Santiago, Chile (responsible for South America). As of June 30,2006, Gold Fields’ exploration team included 22 geologists, along with supportstaff.

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Gold Fields’ exploration strategy is based on abalanced approach to projects, which permits it to consider a project at anystage of development, from greenfield projects through the feasibility studyphase. Gold Fields focuses its exploration activities on finding qualitymineral assets with potential for low-cost extraction of gold or platinum groupmetals. When determining whether it will proceed with a project, Gold Fieldsweighs a variety of cost factors, including the cost of acquiring the project,expected cash operating costs, costs of capital and overhead costs, against thelikely returns for the project and the project’s strategic importance in termsof geographic diversification and production profiles. With respect toexploration projects which are adjacent to Gold Fields’ existing miningoperations, Gold Fields also considers possible operating synergies which canbe realized, for example, by sharing processing plants and otherinfrastructure.

Gold Fields has expanded its exploration activities incountries and regions where it has limited experience by means of equityinvestments in, and strategic alliances with, junior mining partners that arealready operating in the relevant region with the requisite mining permits andapprovals. Gold Fields has applied this strategy to exploration projects inCanada, Venezuela, Burkina Faso, China, and Sardinia, among others.

Generally, Gold Fields budgets to spend up to $10 perounce of gold it produces on generative exploration, provided the opportunitiesoffered warrant such expenditure. At high acquisition prices for goldprospects, the universe of gold prospects that may offer positive returns islimited and exploration efforts are carefully selected with strict economiccriteria in mind.

In order to be considered by Gold Fields, generally anexploration project must have the potential to meet the majority of certainminimum target criteria, which Gold Fields refers to as the “Rule of Twos.”The Rule of Twos criteria require that a project has potential for a minimumof 2,000,000 ounces of reserves, production rates of greater than 200,000ounces per year, cash cost of production of less than half the commodity priceand a double-digit rate of return. If these criteria are met and the projectfits within Gold Fields’ strategic development goals, Gold Fields will considertaking on the project. While the Rule of Twos represents a minimum targetsize for Gold Fields, the Company feels that any projects it chooses toundertake are likely to yield even greater targets through additionalexploration and development.

Gold Fields’ goal in its search for quality assets isto have a breakeven cost defined as the sum of acquisition costs, total cashoperating costs, capital costs and general and administrative costs of less than75% of the estimated long-term gold price.

Gold Fields divides thedifferent phases of a project’s development into what it refers to as the “resourcetriangle.” The resource triangle provides for the progression of an explorationproject in five steps: (1) greenfield exploration, (2) initialdrilling, (3) resource definition, (4) pre-feasibility study and (5) feasibilitystudy. Greenfield exploration is generated by reviewing and ranking the mostprospective terrains across the world and exploration areas are selected afterconsidering country risk and strategic fit. In fiscal 2006, the Companyestablished a specific Generative Exploration team to conduct prospective goldevaluations and develop new targets for exploration. Each regional explorationoffice continuously monitors and reviews projects in its region and targetsprojects at all stages of development. Once a project reaches the feasibilitystage, a team from Gold Fields’ corporate development office evaluates theproject with feedback regarding the project’s strategic implications.

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***Gold Fields’ Exploration Projects***

Thetable below provides a breakdown of the number of projects in Gold Fields’three exploration regions for each of the five phases of the resource triangleas of June 30, 2006. The table does not include exploration projects onsites adjacent to Gold Fields’ existing operations in South Africa, Ghana orAustralia. 

| **Phase**            | ** ** | ** ** | ** ** | **Europe and  Africa** | ** ** | **Australasia** | ** ** | **The Americas** | ** ** |
|----------------------|------------|------------|------------|-----------------------------|------------|-----------------|------------|-----------------------|------------|
| Feasibility          |       |       | 1          |                        |       |            | —     |                  |       |   | — |   |   |
| Pre-feasibility      |       |       | 1          |                        |       |            | —     |                  |       |   | — |   |   |
| Resource  definition |       |       | 1          |                        |       |            | 1          |                  |       |   | 1 |   |   |
| Initial drilling     |       |       | 1          |                        |       |            | 1          |                  |       |   | 3 |   |   |
| Greenfield           |       |       | 2          |                        |       |            | 3          |                  |       |   | 2 |   |   |

 

Gold Fields spent $36.5 million on explorationprojects not adjacent to its mining operations and $27.0 million on equityinvestments in exploration-related, third-party companies during fiscal 2006.Gold Fields’ total exploration budget for projects not adjacent to its miningoperations for fiscal 2007 is approximately $45.0 million, including for equityinvestments, which will be evaluated as identified throughout the year. Inaddition, Gold Fields spent $37.0 million on exploration at sites adjacent toits existing mining operations in fiscal 2006 and has budgeted approximately$28.4 million for fiscal 2007.

On July 10, 2002,Gold Fields announced that it had granted Mvelaphanda Resources Limitedparticipation rights of up to 15% in Gold Fields’ precious metals explorationprojects in Africa, after March 1, 2002. See “Major Shareholders andRelated Party Transactions.”

*Cerro CoronaProject*

The Cerro Corona Project forms part of a porphyrycopper-gold deposit situated within the Hualgayoc Mining District in northernPeru. It is located in the highest part of the Western Cordillera of the Andes,in northern Peru, close to the headwaters of the Atlantic continental basin. Itlies approximately 90 kilometers by road north of the Department of Cajamarca’scapital city and near the village of Hualgayoc. Access to the Cerro CoronaProject from Cajamarca is by means of two roads, one from Cajamarca to theYanacocha Mine (45 kilometers), and then from Yanacocha to the village ofHualgayoc and the town of Bambamarca (45 kilometers).

In December 2003, Gold Fields, through asubsidiary, signed a definitive agreement to purchase an 80.72% economic and92% voting interest in the Cerro Corona Project from a Peruvian family-ownedcompany, Sociedad Minera Corona S.A., or SMC. The agreement called for areorganization whereby the assets of the Cerro Corona Project were transferredto a Peruvian company named Gold Fields La Cima S.A. (formerly known as SociedadMinera La Cima S.A.), or La Cima, in July 2004. The environmental impactassessment for the project was submitted to the Peruvian Ministry of Energy andMines, or MEM, in May 2005. Following public consultation and comment, theMEM approved the environmental impact assessment on December 2, 2005. GoldFields subsequently completed the purchase of a 92% voting interest (80.7%economic interest) in the Cerro Corona Project in January 2006, for atotal consideration of $40.5 million. Gold Fields has now acquired allrequisite additional permits to construct the mine and construction commencedin May 2006.

Following seating of a new Peruvian nationalgovernment in July 2006 and regional and local elections in November 2006,communities in the Cajamarca Department have pressed existing operations, aswell as La Cima, for greater involvement in the economic benefits of naturalresource development. La Cima has accommodated these wishes through skillstraining and employment commitments, as well as utilization of 

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local contractors and equipment. Although communityissues may arise from time to time, La Cima remains committed to these programsto successfully build and operate the Cerro Corona mine.

The current scheduleanticipates completion of the flotation mill and the commencement of commercialproduction in the second quarter of fiscal 2008. Gold Fields spent US$39million in capital expenditure for Cerro Corona in fiscal 2006 and has budgetedan additional US$221 million of capital expenditure for fiscal 2007.

On November 14,2006, La Cima entered into a US$150 million project finance facility agreement.See “Operating and Financial Review and Prospects—Recent Developments—CerroCorona Facility.’’

*Arctic PlatinumProject*

The Arctic Platinum Project, or the APP, is locatedapproximately 60 kilometers south of the city of Rovaniemi in northern Finland.The APP was set up in 2000 as a joint venture to develop potential platinumgroup metal deposits through surface and underground operations. Gold Fieldsheld 51% of the APP during fiscal 2003, with the remainder owned by OutokumpuOy, or Outokumpu, a Finnish industrial conglomerate with over 50 years’experience designing and supplying technology for the mining and metallurgicalindustries. On September 11, 2003, Gold Fields exercised its pre-emptiveright to acquire Outokumpu’s 49% interest in the APP, for consideration of $31million, comprising $23 million in cash and Gold Fields ordinary shares worth $8million.

On October 18, 2005, Gold Fields announced thatit had entered into a letter of intent with North American Palladium Limited,or NAP, a Canadian platinum metals group producer, to form a joint venture tofurther explore mining properties and develop a mine at the APP.

On March 24, 2006, an Acquisition and FrameworkAgreement, or Acquisition Agreement, was entered into between NAP, Gold FieldsExploration BV, Gold Fields Finland Oy and North American Palladium Finland Oy.The Acquisition Agreement took effect from April 13, 2006 and, inaccordance with the terms and conditions of the Acquisition Agreement, aService Agreement was also entered into between Gold Fields Arctic Platinum Oy,NAP and North American Palladium Arctic Services Oy on March 24, 2006,pursuant to which NAP will provide services to the APP.

The APP’s location and geology are similar to that ofNAP’s other properties and it is expected that NAP will be able to utilize itsoperating and development experience in the design and construction of a mineat the APP. The Acquisition Agreement provides that NAP will be granted anoption to acquire up to a 60% undivided interest in the APP, including theSuhanko, SJ Reef and SK Reef mining properties and claims located south ofRovaniemi, Finland. NAP’s option to acquire its interest in the APP will vestupon NAP satisfying the following conditions on or before June 30, 2008: (i) completinga $7.5 million re-scoping study and exploration program; (ii) completing a$5.0 million feasibility study; and (iii) making a decision to develop amine at the APP. In consideration for the acquisition of the 60% interest in theAPP, NAP shall issue NAP common shares to Gold Fields with a value ofapproximately $45 million, based on the weighted average trading price on theAmerican Stock Exchange for the 11 trading days commencing on October 11, 2005.The relevant share price was $4.88, meaning that NAP will issue 9,227,033 NAPcommon shares. Additionally, Gold Fields has an option to maintain its interestat 50%, by taking receipt of only 80% of the consideration shares, or 7,381,626NAP common shares. During the option period NAP is the operator with theresponsibility to manage and fund the project.

Upon NAP’s acquisition of an interest in the APP, a jointventure will be formed, with NAP holding a 60% interest and Gold Fields holdinga 40% interest. The parties will enter into a Shareholders’ Agreement whichwill govern their respective interests in the APP. Gold Fields will have aback-in right to acquire an additional 10% interest in the joint venture, to bepaid for by reducing the number of NAP common shares 

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issued to Gold Fields by 20%. NAP will remain operatorof the joint venture, which will be managed under a joint venture arrangement.

The APP is assessing two potential surface mineabledeposits called Konttijarvi and Ahmavaara, which are referred to as the SuhankoProject. The Konttijarvi and Ahmavaara deposits are found in the Konttijarvi-SuhankoIntrusion, which forms part of the Portimo mafic layered complex situated innorthern Finland. The feasibility study for the Suhanko Project was completedin the third quarter of fiscal 2005. Based on the results of the study,including a lower than expected mine head grade, prevailing metal market conditionsand significant euro currency strengthening, Gold Fields decided to postponethe creation of a large-scale surface mining complex and to continueinvestigations into smaller scale, high-margin projects as well as offers fromthird parties. Exploration drilling at Konttijarvi and Ahmavaara continueduntil mid-August 2005.

On October 31, 2006, NAP announced the results ofthe first phase of drilling on the Narkaus (SK) Project, which is part of theAPP and comprises three target areas: (i) Kuohunki, (ii) Nutturalampiand (iii) Siika Kama. These areas are being evaluated for their accretivepotential and positive impact on the main project at Suhanko. The SuhankoProject is located within 20 kilometers of these deposits and is the subject ofongoing pre-feasibility work.

The US$6 million Phase One program, which began inFebruary 2006, comprised a total of 49 diamond drill holes for 8,717meters. These latest results are being modeled and it is expected that anupdated mineral resource estimate will be completed and incorporated into thelarger APP scoping study currently scheduled for completion in early to mid-2007.

During the next stage of work, NAP is expected tomanage the exploration, engineering and evaluation activity on the APP. Thiswork is to be divided into two phases: Phase I, a re-scoping study, which beganon June 19, 2006, and Phase II, a feasibility study, the start of which isconditional on the outcome of the re-scoping study. NAP has contracted AkerKvaerner ASA to complete the APP re-scoping study and P&E MiningConsultants Inc. to conduct the surface mine designs and optimization.Metallurgical test work is being conducted by SGS Lakefield Research to examinedifferent processing options in an attempt to improve metal recoveries and reduceoperating costs. The proposed exploration program will focus on the APP’s SKReef and SJ Reef projects. The feasibility study is expected to generate areport with sufficient engineering detail and cost estimates in order for theAPP to be considered for project financing or other suitable financingalternatives. The re-scoping and feasibility studies, once underway, areexpected to take approximately 30 months to complete.

See also “AdditionalInformation—Material Contracts—Arctic Platinum Project.”

*Essakane JointVenture*

The Essakane JointVenture, or EJV, is located 330 kilometers northeast of Burkina Faso’s capitalcity of Ouagadougou, adjacent to the artisanal miner village of Essakane. GoldFields acquired 50% of the EJV from Orezone Resources Inc. in the last quarterof fiscal 2005, after reaching an aggregate project expenditure of US$8million. In January 2006, Gold Fields also took over the management of theproject and exploration program as provided by the EJV option agreement. TheEssakane Main Zone deposit, or EMZ, is a near surface gold mineralized zonehosted within a volcano-sedimentary sequence in a greenstone belt. Fiscal2006 expenditures were focused on drilling out and proving up the EMZ. Aninitial geologic block model of the EMZ was developed in May 2005, whichGold Fields used as the basis for a preliminary feasibility study on the EMZ.The study was completed in December 2005 and showed project viability indeveloping a surface mine and related facilities at Essakane. The completion ofa new geological resource model has been delayed to the second quarter offiscal 2007, pending confirmation of the geological model and resolution ofsampling quality assurance. Gold Fields has the opportunity to 

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obtain an additional 10%interest in the project by completing a bankable feasibility study, which beganin early November and is expected to complete during fiscal 2007 if theproject proceeds.

**Living Gold**

At the end of calendar2002, Gold Fields initiated the Living Gold project, an export-orientedbusiness which produces roses as part of the South African cut-flower industry.The rationale was to establish a job-creating, economically sustainablecommunity investment project in the Carletonville area in which Gold Fields’Driefontein mine operates. Living Gold involves a partnership with theIndustrial Development Corporation, which owns 35% of the company. In fiscal2006, Living Gold produced approximately 16.7 million stems and had revenue ofapproximately R16.8 million ($2.6 million). A program to expand the rose farmto 16 hectares of production was approved in fiscal 2006 and financing optionsare currently being assessed, with the goal of positioning the business toachieve long-term commercial viability and secure new contracts into thefuture.

**Recent Developments**

***Acquisition of South Deep***

On September 11, 2006, Gold Fields entered intoan agreement with Barrick and PDG Aureate Limited, a subsidiary of Barrick, toacquire, for a total consideration of US$1.525 billion, the entire issued sharecapital of Barrick Gold South Africa (Proprietary) Limited, or BGSA, whichholds a 50% interest in the Barrick Gold—Western Areas Joint Venture, anunincorporated entity in which Barrick and Western Areas Limited, or WesternAreas, each hold an interest of 50%. The Barrick Gold—Western Areas JointVenture owns the developing South Deep, located in the Witwatersrand basin nearJohannesburg. At Gold Fields’ option, the total consideration can be paid incash, or US$1.2 billion can be paid in cash******with theremaining US$325 million payable through the issue to Barrick of such number ofGold Fields ordinary shares as is obtained by dividing the US$325 millionconsideration by the volume weighted average price of Gold Fields’ ADRs on theNew York Stock Exchange for the five trading days preceding the closing of thetransaction. Following receipt of the requisite approval from the competition authoritiesin South Africa on November 22, 2006, this transaction is scheduled toclose on November 30, 2006.

In conjunction with Gold Fields’ acquisition ofBarrick’s stake in the Barrick Gold—Western Areas Joint Venture and afterconsultation with the Board of Directors of Western Areas, Gold Fieldsundertook to make an offer (referred to herein as the Offer) to acquire theentire issued share capital of Western Areas not already owned by Gold Fields.Western Areas’ principal asset is its 50% interest in South Deep. It also holdssome mineral rights adjacent, or in close proximity, to South Deep and thehedge book described below. At the time it entered into the agreement withBarrick, Gold Fields owned 18% of the issued share capital of Western Areas andhad entered into an agreement with JCI and certain of its subsidiariesregarding the acquisition of certain Western Areas shares owned by thosesubsidiaries, as described below. The Western Areas shares owned by JCI’ssubsidiaries do not form part of the Offer. Under the Offer, which Gold Fields commencedon October 30, 2006, Western Areas shareholders will receive 35 GoldFields shares for every 100 Western Areas shares validly tendered into theOffer. This consideration is based on the amount payable by Gold Fields forBGSA’s 50% interest in South Deep, adjusted for the additional assets andliabilities of Western Areas. Gold Fields has not established a minimumacceptance threshold for the Offer and, accordingly, will be obligated toacquire any Western Areas shares validly tendered in the Offer. If Gold Fieldsacquires at least nine-tenths of the Western Areas shares that are the subjectof the Offer, it may, pursuant to South African law, elect to compulsorilyacquire the remaining Western Areas shares that are the subject of the Offer.Following receipt of the requisite approval from the competition authorities inSouth Africa on November 22, 2006, the Offer is now unconditional. The Offerwill close on a date to be announced by Gold Fields.

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In support of the Offer, Gold Fields, JCI,and certain subsidiaries of JCI entered into an agreement on September 11,2006, pursuant to which, on November 16, 2006, Gold Fields acquired 27million Western Areas shares from one of the subsidiaries (referred to hereinas the JCI Transaction) in exchange for the issue to JCI of 9,450,000 GoldFields shares (a ratio of 35 Gold Fields shares for every 100 WesternAreas shares). This acquisition increased Gold Fields’ stake in Western Areasfrom 18% to 34.7%. JCI has agreed that it will hold the Gold Fields shares it receiveduntil the date upon which Western Areas shareholders are entitled to receiveGold Fields shares pursuant to the Offer. In addition, pursuant to theagreement, and with effect from November 14, 2006, the JCI subsidiaries grantedGold Fields call options and Gold Fields granted the JCI subsidiaries putoptions, subject to certain restrictions and conditions, in respect of thebalance of a further 9.96 million Western Areas shares held by the JCI subsidiaries.In the case of both the put and the call options, the holder of the option isentitled to give notice to the granter of the option within 90 days afterimplementation of the JCI Transaction, which occurred on November 14, 2006,that it is considering exercising its option. The option must be exercised nomore than 90 days from the date of the notice, although the JCI subsidiariesare not entitled to exercise their options during the first 60 days aftergiving the notice. Gold Fields gave notice of its intention of exercising itsoption on November 15, 2006. Should the call options be exercised by GoldFields, Gold Fields’ interest in Western Areas would increase by 9.96 millionshares to approximately 41% of the issued share capital of Western Areas. Nooption premiums are payable in respect of the call or put options. Theagreement with JCI and its subsidiaries provides that, if at any time prior tothe date that is three months after the effective date of the granting of theput and call options, Gold Fields acquires any Western Areas shares forconsideration per Western Areas share greater than is payable to JCI or itssubsidiaries under the agreement, Gold Fields must pay JCI and its subsidiariesthe difference in respect of the Western Areas shares acquired from JCI and itssubsidiaries.

In connectionwith the acquisition of BGSA and the proposed acquisition of Western Areas,GFIMSA entered into a US$1.8 billion credit facility with Citibank, N.A. LondonBranch, J.P. Morgan Plc, J.P. Morgan Europe Limited and otherfinancial institutions, as set out in the agreement, on November 24, 2006.See “Operating and Financial Review and Prospects—RecentDevelopments—Acquisition of South Deep.’’

*Thefollowing information concerning South Deep and Western Areas is known to GoldFields only based on publicly available information (primarily filings by WesternAreas with the JSE Limited) and certain due diligence materials made availableto Gold Fields by Western Areas and Barrick. Publicly available informationconcerning South Deep and Western Areas may contain errors. Gold Fields hassought to ensure that this information has been accurately reproduced and hasno knowledge that would indicate that any statement relating to South Deep orWestern Areas contained in this annual report is inaccurate or incomplete.However, Gold Fields was not involved in the preparation of those statementsand cannot verify them. See “Risk Factors—Gold Fields has not verified the reliability of the South Deep or WesternAreas information included in this annual report.”*

*South Deep is situatedadjacent to Kloof, in the Gauteng Province of South Africa. It is engaged inunderground mining and comprises two shaft systems, the South Shaft Complex andthe South Deep Twin Shaft Complex. The South Shaft Complex includes a mainshaft and three sub-vertical shafts, one of which is used to hoist rock with asecond being used to move personnel and materials, while the South Deep TwinShaft Complex consists of a main shaft and adjoining ventilation shaft. Miningbegan at South Deep in 2002.*

*Production at South Deepcurrently is from the VCR, as well as the Upper Elsburgs (the Massives and theIndividuals). The VCR occurs in the western extremity of the miningauthorization. The Upper Elsburgs occur to the east of a north-northeaststriking subcrop with the overlaying VCR and form part of an easterly divergentclastic wedge. In general terms, the Upper Elsburg succession represents aneasterly*

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*prograding sedimentarysequence, with the Massives containing higher gold grades and showing moreproximal sedimentological attributes in the eastern sector of the miningauthorization than the underlying Individuals.*

*The VCR is mined byconventional longwall mining methods, whereas the Upper Elsburgs are mined by avariety of methods ranging from conventional narrow reef stoping to mechanizedmining (drift-and-fill and drift-and-benching). South Deep’s workings are at depth,and therefore require significant cooling infrastructure.*

*South Deep has a singleplant with a nameplate capacity of 220,000 tons per month. The comminutionphase involves SAG milling and ball milling while the treatment phase involvesCIP treatment.*

*In May 2006, a loadedskip fell in the main shaft of the Twin Shaft Complex, causing significantdamage and requiring the shaft to be closed while repairs are carried out. As aresult, production has been significantly reduced as ore must be moved throughthe South Shaft Complex. Western Areas has reported that the main shaft of theTwin Shaft Complex is expected to be recommissioned in January 2007. Productionhas also been adversely affected as a result of a fire that broke out on August31, 2006, which has caused the temporary closure of a portion of the mine.*

*In 2001, Western Areasentered into a long-dated derivative structure in respect of gold productionfrom South Deep. The derivative structure, which is based on a series of boughtand sold options on Western Areas’ share of South Deep’s gold production, tookeffect in the last quarter of 2001 and expires in mid-2014. According toWestern Areas, it will have to deliver approximately 90% of its share of thegold production into the derivative structure for 2006 and, at current spotrates, some 58% in 2007, thereby reducing the opportunity to capitalize on thespot gold price. Western Areas also reported that as of September 30, 2006, thefair value of the instruments constituting the derivatives structure wasUS$(360,483,116), using a gold spot price of US$598.60 and an exchange rate ofRand 7.7643 per US$1.00. The premium payable for the options purchased byWestern Areas as part of the derivative structure was US$250 million, payableat various pre-determined dates in the future. Western Areas reported that atSeptember 30, 2006, the discounted value of the premium payable wasUS$139,630,503. Under the terms of the relevant options, a change of control ofWestern Areas without the consent of the option counterparties constitutes anevent of default which may entitle the option counterparties to close out the positions.Therefore, if Gold Fields acquires control of Western Areas, the optioncounterparties could require Western Areas to immediately settle theoutstanding options and pay the present value of the premium. In addition, GoldFields understands that other circumstances may exist that would allow theoption counterparties to close out the options. If the option counterpartieselect to close out the options at a time when Western Areas is a subsidiary ofGold Fields, it could have an adverse effect on Gold Fields’ financialcondition. Even if Western Areas is not required to immediately settle theoutstanding options, it would receive only the option price for a significantportion of the production of South Deep and therefore Gold Fields would notbenefit from any higher gold spot price.*

Gold Fields believes that portions of theSouth Deep orebody could be accessed using the Kloof infrastructure. This couldhave the potential of increasing the rate at which the South Deep orebody ismined, as well reducing the unit cost of mining at both Kloof and South Deep. Inaddition Gold Fields intends to seek to identify other operational synergiesbetween the two operations, which could include the provision of technical andfinancial services, the utilization of surface infrastructure such as workshopsand offices, the procurement of consumables and supply chain management.

**Insurance**

Gold Fieldsholds insurance policies providing coverage for general liability, accidentalloss or damage to its property, business interruption in the form of fixedoperating costs or standing charges, material damage and other losses, some ofwhich are insured, through a captive insurance company domiciled in 

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Gibraltar. GoldFields’ insurance program does not insure all potential losses associated withits operations as some insurance premiums might be considered to beeconomically unacceptable, or the risk considered too remote to insure. Shouldan event occur for which there is no or limited insurance cover, this couldaffect Gold Fields’ cash flows and profitability.

Managementbelieves that the scope and amounts of coverage of its insurance policies areadequate, taking into account the probability and potential severity of eachidentified risk, and in accordance with customary practice for a gold miningcompany of its size with multinational operations. Gold Fields’ insuranceprogram does not insure all potential losses associated with its operations, assome insurance premiums may be economically unacceptable or the risk of anoccurrence may be considered too remote to warrant insurance. See “Risk Factors—Gold Fields’ insurance coverage may prove inadequate to satisfy potentialclaims.”

**Regulatory and Environmental Matters**

***SouthAfrica***

*Environmental*

Gold Fields’South African operations are subject to various laws relating to the protectionof the environment. South Africa’s Constitution grants the people of SouthAfrica the right to an environment that is not harmful to human health orwell-being and to protection of that environment for the benefit of present andfuture generations through reasonable legislative and other measures. TheConstitution and the National Environmental Management Act 107 of 1988 grantlegal standing to a wide range of people and interest groups to bring legalproceedings to enforce their environmental rights, which are enforceableagainst private entities as well as the South African government.

Environmentallegislation in South Africa has become increasingly more onerous whileenforcement of environmental requirements in South Africa is now more rigorousthan in the past. Specific environmental rules pertaining to prospectingand mining are set out in the Mineral and Petroleum Resources Development Act28 of 2002, or the New Minerals Act, and its regulations. The environmentalobligations imposed by the New Minerals Act are significantly more stringentthan the provisions of the former legislation. In particular, the New MineralsAct makes express provision for directors’ liability in circumstances whenenvironmental harm arises pursuant to mining operations. See “—Mineral Rights.”

South Africanenvironmental legislation commonly requires businesses whose operations mayhave an impact on the environment to obtain permits and authorizations forthose operations. The applicable environmental legislation also imposes generalcompliance requirements and incorporates the “polluter pays” principle. Underthe terms of the New Minerals Act, all prospecting and mining operations are tobe conducted according to an environmental management plan which must beapproved by the Department of Minerals and Energy.

South Africanmining companies are required by law to undertake rehabilitation works as partof their ongoing operations in accordance with an approved environmentalmanagement plan. In addition, during the operational life of the mine they mustprovide for the cost of mine closure and post-closure rehabilitation andmonitoring once mining operations cease. Gold Fields funds these environmentalrehabilitation costs by making contributions into an environmental trust fund.The trust fund system enables payments to be made in a tax-efficient way, whileproviding comfort to the regulators that the operator has the means to restoreany mine after operations have ceased. As of September 30, 2006, GoldFields had contributed a total of approximately Rand 500.1 million, includingaccrued interest, to the fund. Gold Fields has implemented environmentalmanagement systems in compliance with ISO 14001 throughout its operations inSouth Africa, and has received full certification under ISO 14000 for allsurface portions of its South African operations. Gold Fields’ non-South Africanoperations received full ISO 14001 certification in fiscal 2003.

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In addition,Gold Fields became a signatory to the International Cyanide Management Code, orCyanide Code, on November 3, 2005, along with nine gold companies and fivecyanide manufacturers. All of Gold Fields’ operations, including the SouthAfrican operations, are committed to complying with the Cyanide Code. Theimplementation structure of the Cyanide Code allows the operations up to threeyears to have independent, third-party audits conducted to evaluate compliancestatus.

The NationalWater Act was implemented in 1998 and introduced a fundamental shift in the lawgoverning South Africa’s water resources. All water in the hydrological cyclebecame the property of the State held in trust for the people of South Africa.The result of which is that all water users are required to re-register theirwater uses in terms of the legislation. In addition, the National WaterAct governs waste water and waste discharge into water resources. Gold Fieldsis lawfully removing water from its South African mines and, while there hasbeen a delay in processing the water license application at Driefontein, whichwas submitted within the time limits, in respect of the Driefontein mine GoldFields has engaged the relevant authority, the Department of Water Affairs andForestry, or DWAF, to address this issue. While there is some uncertaintyregarding the water quality parameters applicable to the removed water, GoldFields is engaging the DWAF in order to obtain clarity.

In September 2005,certain sections of the National Environmental Management Air Quality Act cameinto force. In the past, certain air polluting activities were allowed to becarried on provided that the operator registered the activity and was grantedpermission from the authority with responsibility for air quality in theregion. However, the Air Quality Act sets more onerous specific standards whichcompanies will be required to achieve. It is envisaged that the Air Quality Actwill be fully phased in over the next few years. The sections relating to dustemissions and odor became operational in 2006.

On July 3,2006, new environmental impact assessment regulations were promulgated underthe National Environmental Management Act. To the extent that the newregulations are specifically directed at mining operations, they will onlybecome effective in 2007. The new regulations introduce a fundamental change inthis area of the law for the mining sector. Previously, the Department ofMinerals and Energy had primary responsibility for authorizing theenvironmental impacts of mining operations, although other departments played asecondary role in approving certain aspect of mining-related activities. Underthe new regulations the Department of Environmental Affairs, will play agreater role in the environmental impact assessment decision-making process.The new regulations introduce a more complex regime for environmental impactassessments that includes a two-tiered assessment process. When the newregulations become effective as to mining operations, they will impact onreconnaissance, exploration, prospecting and mining activities, as currentlydefined in the Minerals and Petroleum Resources Development Act. This willresult in more stringent requirements in obtaining environmental approval fornew mining activities and, potentially, in the case of recommissioning oldoperations, which could increase Gold Fields’ costs for obtaining theapprovals. In addition, Gold Fields is taking steps to comply with the newregulations. To the extent that the new regulations may be interpreted ashaving any retroactive effect, Gold Fields may need to implement correctiveactions or may be faced with nominal fines.

*Health and Safety*

The principalobjective of the Mine Health and Safety Act No. 29 of 1996, or the MineHealth and Safety Act, is to protect the health and safety of persons at mines.The Mine Health and Safety Act requires that employers and others ensure theiroperating and non-operating mines provide a safe and healthy workingenvironment, determines penalties and a system of administrative fines fornon-compliance and gives the Minister of Minerals and Energy the right torestrict or stop work at any mine and require an employer to take steps to minimizehealth and safety risks at any mine. The Mine Health and Safety Act furtherprovides for employee participation through the establishment of health andsafety committees and by requiring the appointment of health and safetyrepresentatives. It also gives employees the right to refuse 

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dangerous work.Finally, it describes the powers and functions of a mine health and safetyinspectorate and the process of enforcement.

Under the MineHealth and Safety Act, an employer is obligated, among other things, to ensure,as far as reasonably practicable, that its mines are designed, constructed andequipped to provide conditions for safe operation and a healthy workingenvironment and the mines are commissioned, operated, maintained anddecommissioned in such a way that employees can perform their work withoutendangering their health and safety or that of any other person. Every employermust ensure, as far as reasonably practicable, that persons who are notemployees, but who may be directly affected by the activities at a mine, arenot exposed to any hazards to their health and safety.

The Mine Healthand Safety Act requires employers, among other things, to establish health andsafety policies, to provide employees with health and safety training, assessand respond to risk and establish a system of medical surveillance.

TheOccupational Diseases in Mines and Works Act 78 of 1973, or the OccupationalDiseases Act, governs compensation and medical costs related to certainillnesses contracted by persons employed in mines or at sites where activitiesancillary to mining are conducted. Occupational healthcare services are madeavailable by Gold Fields to employees from its existing facilities. Pursuant tochanges in the Occupational Diseases Act, Gold Fields may experience anincrease in the cost of these services. See “Risk Factors—Gold Fields’operations in South Africa are subject to health and safety regulations whichcould impose significant costs and burdens.” This increased cost, should ittranspire, is currently indeterminate.

*Mineral Rights*

*The NewMinerals Act.**  *The New Minerals Act came into effect on May 1, 2004. The NewMinerals Act vests the right to prospect and mine in the state (which includesthe rights to grant prospecting and mining rights on behalf of the nation) tobe administered by the government of South Africa in order to, among otherthings, promote equitable access to the nation’s mineral resources by SouthAfricans, expand opportunities for historically disadvantaged persons who wishto participate in the South African mining industry, advance social andeconomic development, and create an internationally competitive and efficientadministrative and regulatory regime, based on the universally acceptedprinciple, and consistent with common international practice, that mineralresources are part of a nation’s patrimony.

Under theformer regulatory regime, mineral rights (which encompassed the right toprospect and mine) in South Africa were held either privately or by thegovernment of South Africa. Ownership of private mineral rights was held throughtitle deeds and constituted real rights in land, which were enforceable againstany third party.

Under the NewMinerals Act, prospecting rights are initially granted for a maximum period offive years and can be renewed once upon application for a further period notexceeding three years. Mining rights are valid for a maximum period of 30years, and can be renewed upon application for further periods each of whichmay not exceed 30 years. Provision is made for the grant of retention permits,which would have a maximum term of three years and could be renewed once uponapplication for a further two years. A wide range of factors and principles,including proposals relating to black economic empowerment and socialresponsibility, will be considered by the Minister of Minerals and Energy, orthe Minister, when exercising her discretion whether to grant theseapplications including, for example, evidence of an applicant’s ability toconduct mining operations optimally. In November 2006, the South AfricanDepartment of Minerals and Energy approved the conversion of Gold Fields’mining licenses under the old regulatory regime at Driefontein, Kloof andBeatrix into licenses under the new regime.

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The provisions of the New Minerals Act provide that amining or prospecting right granted under the New Minerals Act could becancelled if the mineral to which such mining right relates is not mined at an“optimal” rate. Furthermore, royalties not payable under the old legislationmay become payable to the State. See “—The Royalty Bill.”

The New Minerals Act contains a provision requiringthe Minister, within six months of the relevant provision becoming operational,to develop a broad-based socio-economic empowerment charter for effecting entryof historically disadvantaged South Africans, or HDSAs, into the miningindustry. The South African government appointed a task team which includedrepresentatives from mining companies, including Gold Fields, to develop acharter. On October 11, 2002, the Minister and representatives of certainmining companies and the National Union of Mineworkers signed a charter thatreflects the consultation process called for by the New Minerals Act. TheMining Charter became effective on May 1, 2004.

The charter’sstated objectives are to:

·       promoteequitable access to South Africa’s mineral resources for all the people ofSouth Africa;

·       substantiallyand meaningfully expand opportunities for HDSAs, including women, to enter themining and minerals industry and to benefit from the exploitation of SouthAfrica’s mineral resources;

·       utilizethe existing skills base for the empowerment of HDSAs;

·       expandthe skills base of HDSAs in order to serve the community;

·       promoteemployment and advance the social and economic welfare of mining communitiesand areas supplying mining labor; and

·       promotebeneficiation of South Africa’s mineral commodities beyond mining andprocessing, including the production of consumer products.

The charter clarifies that it is not the government’sintention to nationalize the mining industry.

To achieve theseobjectives, the charter requires that, within five years of its May 1,2004 effective date, each mining company achieves a 15% HDSA ownership of miningassets and, within 10 years of that date, a 26% HDSA ownership of miningassets. Ownership can comprise active involvement, through HDSA-controlledcompanies (where HDSAs own at least 50% plus one share of the company and havemanagement control), strategic joint ventures or partnerships (where HDSAs ownat least 25% plus one vote of the joint venture or partnership interest andthere is joint management and control) or collective investment vehicles, themajority ownership of which is HDSA based, or passive involvement, particularlythrough broad-based vehicles such as employee stock option plans. The charterenvisages measuring progress on transformation of ownership by:

·       takinginto account, among other things, attributable units of production controlledby HDSAs;

·       allowingflexibility by credits or offsets, so that, for example, where HDSAparticipation exceeds any set target in a particular operation, the excess maybe offset against shortfalls in another operation;

·       takinginto account previous empowerment deals in determining credits and offsets; and

·       consideringspecial incentives to encourage the retention by HDSAs of newly acquired equityfor a reasonable period.

It is envisaged that transactions will take place in atransparent manner and for fair market value with stakeholders meeting afterfive years to review progress in achieving the 26% target. Under the charter,the mining industry as a whole agrees to assist HDSA companies in securingfinance to fund participation in an 

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amount of Rand 100 billion over the first five years.Beyond the Rand 100 billion commitment, HDSA participation will be increased ona willing seller-willing buyer basis, at fair market value, where the miningcompanies are not at risk.

In addition, thecharter requires, among other things, that mining companies:

·       offerevery employee the opportunity to become functionally literate and numerate bythe year 2005;

·       spellout plans for achieving employment equity at management level with a view toachieving a baseline of 40% HDSA participation in management and achieving abaseline of 10% participation by women in the mining industry, in each casewithin five years;

·       giveHDSAs preferred supplier status, where possible, in the procurement of capitalgoods, services and consumables; and

·       identifycurrent levels of beneficiation and indicate opportunities for growth.

When consideringapplications for the conversion of existing licenses, the government will takea “scorecard” approach to the different facets of promoting the objectives ofthe charter. In February 2003, the Department of Minerals and Energy, orDME, published the scorecard, which is intended to facilitate the applicationof the charter and measure compliance with the empowerment requirements of theNew Minerals Act for the purpose of determining whether an application forconversion of old order rights to new order rights should be granted. Thescorecard sets out the requirements of the charter in tabular form which allowsthe DME to “tick off” areas where a mining company is in compliance. Thescorecard covers the following areas:

·       humanresource development;

·       employmentequity;

·       migrantlabor;

·       minecommunity and rural development;

·       housingand living conditions;

·       ownershipand joint ventures;

·       beneficiation;and

·       reporting.

The scorecard does not indicate the relativesignificance of each item, nor does it provide a particular score which anapplicant must achieve in order to be in compliance with the charter and begranted new order rights. The charter, together with the scorecard, provides asystem of “credits” or “offsets” with respect to measuring compliance with HDSAownership targets. Offsets may be claimed for beneficiation activitiesundertaken or supported by a company above a predetermined “base state,” whichhas not yet been established for each mineral. Offsets may also be claimed forcontinuing effects of previous empowerment transactions.

The charter also requires mining companies to submitannual, audited reports on progress towards their commitments, as part of anongoing review process.

On March 8, 2004, the shareholders of Gold Fieldsapproved a series of transactions, referred to in this discussion as the MvelaTransaction, involving the acquisition by Mvela Resources of a 15% beneficial interestin the South Africa gold mining assets of Gold Fields for cash consideration ofR4,139 million. See “Operating and Financial Review and Prospects—Overview—MvelaphandaTransaction.” The 

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Mvela Transaction is intended to meet the charter’srequirement that mining companies achieve a 15% HDSA ownership within fiveyears of the mining charter coming into effect. There is no guarantee, however,that the Mvela Transaction will not have a negative effect on the value of GoldFields’ ordinary shares. In addition, any further adjustment to the ownershipstructure of Gold Fields’ South African mining assets in order to meet themining charter’s 10 year HDSA ownership requirement of 26% could have amaterial adverse effect on the value of Gold Fields’ ordinary shares andfailing to comply with the charter’s requirements could subject Gold Fields tonegative consequences, the scope of which has not yet been fully determined.Gold Fields may also incur expenses to give effect to the mining charter’sother requirements, and may need to incur additional indebtedness in order tocomply with the industry-wide commitment to assist HDSAs in securing Rand 100billion of financing during the first five years of the mining charter’seffectiveness. See “Risk Factors—Gold Fields’ mineral rights in South Africahave become subject to new legislation which could impose significant costs andburdens—The New Minerals Act.” Management believes that Gold Fields is wellpositioned to meet the requirements of the mining charter within the prescribedperiods.

*TheRoyalty Bill.**  *On March 20,2003, the draft Mineral and Petroleum Royalty Bill was released for publiccomment. After extensive consultation, the draft Mineral and Petroleum RoyaltyBill was revised and this revised bill, or the Royalty Bill, was published on October 11,2006, affording stakeholders a further opportunity to provide comments.

The Royalty Bill proposes to impose a royalty payableto the State which, in the case of gold mining companies, would be 3% inrespect of the gross sales value of unrefined gold and 1.5% in respect of thegross value of refined gold. Gold is regarded as refined once it is processedto at least 99.5% purity and, accordingly, most companies in the South Africanmining sector, including Gold Fields, are likely to pay the refined rate. TheRoyalty Bill envisages that the royalty will become payable from May 1,2009.

If adopted, in either itscurrent or a further revised form, the Royalty Bill could have an adverseeffect on Gold Fields’ South African operations and therefore an adverse effecton its business, operating results and financial condition. See “Risk Factors—GoldFields’ mineral rights in South Africa have become subject to new legislationwhich could impose significant costs and burdens—The Royalty Bill.”

*Land Claims*

Gold Fields’privately held land and mineral rights could be subject to land restitutionclaims under the Restitution of Land Rights Act 1994, or the Land Claims Act.Under this Act, any person who was dispossessed of rights in land in SouthAfrica as a result of past racially discriminatory laws or practices withoutthe payment of just and equitable compensation is granted certain remediesincluding, but not limited to:

·       restorationof the land claimed with or without compensation to the holder;

·       grantingof an appropriate right in alternative state-owned land to the claimant; or

·       paymentof compensation by the state to the claimant.

If land is restored without fair compensation it ispossible that a constitutional challenge to the restoration could besuccessful. Once a notice of a land claim has been published in the GovernmentGazette the rights of any person in respect of such land are restricted in thathe may not perform certain actions, including, but not limited to, selling,leasing or developing such land, unless the Regional Land Claims Commissionerhas been given one month’s written notice. The Commission is obligated tonotify the owner of land in respect of which a claim has been lodged or anyother party which might have an interest in a claim. All claims were requiredto be lodged with the Commission by December 31, 1998. Although this wasthe final date for filing claims, many claims lodged before the deadline arestill being reviewed and not all parties who are subject to claims have yetbeen notified. However, new land claims may only be 

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instituted after December 31, 1998, if anoriginal claim was filed incorrectly. Gold Fields has not been notified underthe Land Claims Act of any land claims against it but it may be notified ofclaims in the future. If Gold Fields is notified of land claims in the future,these claims could have a material adverse effect on Gold Fields’ right to theproperties to which the land claims relate. See “Risk Factors—Gold Fields’ landand mineral rights in South Africa could be subject to land restitution claimswhich could impose significant costs and burdens.”

The Restitution of LandRights Amendment Act, or the Amendment Act, became law on February 4,2004. Under the Land Claims Act, the Minister for Agriculture and Land Affairs,or the Land Minister, may not acquire ownership of land for restitutionpurposes without a court order unless an agreement has been reached between theaffected parties. The Amendment Act, however, entitles the Land Minister toacquire ownership of land by way of expropriation either for claimants who donot qualify for restitution or, in respect of land as to which no claim hasbeen lodged but the acquisition of which is directly related to or affected bya claim, the acquisition of which promotes restitution to those entitled orwould encourage alternative relief to those not entitled. See “Risk Factors—GoldFields’ land and mineral rights in South Africa could be subject to landrestitution claims which could impose significant costs and burdens.”

*Exchange Controls*

South African law provides for exchange controlregulations, which restrict the export of capital from the Common MonetaryArea, comprising South Africa, the Kingdoms of Lesotho and Swaziland and theRepublic of Namibia. The exchange control regulations, which are administeredby the SARB, are applied throughout the Common Monetary Area and regulatetransactions involving South African residents, including companies. The basicpurpose of exchange controls is to mitigate the decline of foreign capitalreserves in South Africa and the devaluation of the Rand against othercurrencies, in particular the U.S. dollar. It is anticipated that SouthAfrican exchange controls will continue to operate for the foreseeable future.The South African government has, however, committed itself to graduallyrelaxing exchange controls and a significant relaxation has occurred in recentyears. It is the stated objective of the authorities to achieve equality oftreatment between residents and non-residents in relation to inflows andoutflows of capital. The gradual approach to the abolition of exchange controlsadopted by the South African government is designed to allow the economyto adjust more smoothly to the removal of controls that have been in place fora considerable period of time.

SARB approval is required for Gold Fields and itsSouth African subsidiaries to receive loans from and repay loans tonon-residents of the Common Monetary Area. Repayment of principal and intereston such loans will usually be approved where the payment is limited to theamount borrowed and a market-related rate of interest.

Funds raised outside of the Common Monetary Area byGold Fields’ non-South African resident subsidiaries (whether through debt orequity) can be used for overseas expansion, subject to any conditions imposedby the SARB. Gold Fields and its South African subsidiaries would, however,require SARB approval in order to provide guarantees for the obligations of anyof Gold Fields’ subsidiaries with regard to funds obtained from non-residentsof the Common Monetary Area. Debt raised outside the Common Monetary Area byGold Fields’ non-South African subsidiaries must be repaid or serviced by thoseforeign subsidiaries. Absent SARB approval, income earned in South Africa byGold Fields and its South African subsidiaries cannot be used to repay orservice such foreign debts. Also, absent specific SARB approval, income earnedby one of Gold Fields’ foreign subsidiaries cannot be used to finance theoperations of another foreign subsidiary.

Transfers of funds from South Africa for the purchaseof shares in existing offshore entities or for the expansion of existingbusiness ventures offshore require Exchange Control approval. Under theexchange control regulations, Gold Fields and its South African subsidiariescan invest overseas only if the 

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investment meets certain tests, including one of “nationalinterest,” as determined by the SARB. However, consideration will be given toapplications submitted to the SARB to transfer funds from South Africa for thepurpose of initial foreign expansion and expansion of existing projects.

South African companies are allowed to retain outsideSouth Africa foreign dividends declared after October 26, 2004. Foreigndividends repatriated to South Africa after that date may be retransferredabroad at any time and be used for any purpose.

A listing by a South African company on any stockexchange other than the JSE in connection with raising capital needs permissionfrom the SARB. Any such listing which would result in a South African companybeing redomiciled also needs approval from the Minister of Finance.

Under South African exchange control regulations, GoldFields must obtain approval from the SARB regarding any capital raising involvinga currency other than the Rand. In connection with its approval, it is possiblethat the SARB may impose conditions on Gold Fields’ use of the proceeds of anysuch capital raising, such as limits on Gold Fields’ ability to retain theproceeds of the capital raising outside South Africa or requirements thatGold Fields seeks further SARB approval prior to applying any such funds to aspecific use. Any limitations imposed by the SARB on Gold Fields’ use of theproceeds of a capital raising could adversely affect Gold Fields’ financial andstrategic flexibility. See “Risk Factors—Gold Fields’ financial flexibilitycould be materially constrained by South African exchange control regulations.”

In his speech toParliament towards at the end of October 2004, the Minister of Financeoutlined the South African Treasury’s medium-term budget policy statement andrepeated that it was the government’s eventual goal to replace all remainingexchange controls with prudential benchmarks. He also announced the abolition ofexchange control limits on new outward foreign direct investments by SouthAfrican corporations and the lifting of their obligation to repatriate foreigndividends. There have subsequently been further indications from the Ministryof Finance that it remains the government’s intention to gradually phase outthe remaining exchange controls over time.

***Ghana***

*Environmental*

The laws and regulations relating to the environmentin Ghana have their roots in the 1992 Constitution which charges both the stateand individuals with a duty to take appropriate measures to protect andsafeguard the natural environment. Mining companies are also required under theMinerals and Mining Act, 2006 (Act 703), or the Minerals and Mining Act, toobtain all necessary approvals from the Environmental Protection Agency and theForestry Commission before undertaking mining operations. The Minerals andMining Act also requires mines to comply with all laws for the protection ofthe environment.

The principal legislation regulating activities whichaffect the environment is the Environmental Protection Act, 1994 (Act 490), andthe Environmental Assessment Regulations (LI 1652) and related guidelines.Mining operations are required by these laws to undergo an environmental impactassessment process, to obtain approval for an environmental permit prior tocommencing operations and subsequently, after a period of operation, to submitan environmental management plan for the operations to obtain an environmentalcertificate. The laws also require mining operations to rehabilitate landdisturbed as a result of mining operations pursuant to an environmentalreclamation plan agreed with the Ghanaian environmental authorities. Thisobligation is included in a reclamation security agreement signed by the miningcompany and negotiated with the Environmental Protection Agency, or EPA, and issecured by posting reclamation bonds and a cash deposit, which serve as asecurity deposit against default.

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In Ghana, environmental management plans are submittedevery three years and include details regarding the likely impact of theoperation on the environment, including local communities, as well as acomprehensive plan and timetable for actions to lessen and remediate adverseimpacts. Updated reclamation plans are submitted to the EPA every two yearswith readjustment of the calculated bond. Gold Fields Ghana has posted areclamation bond of $7.4 million representing 50% of the liability estimated tohave occurred by December 2005. Estimated rehabilitation costs totaling$17.8 million and $3.1 million are forecast over each of Tarkwa and Damang’slife of mine, respectively. Reclamation bonds are assessed based on 50% of theagreed estimated rehabilitation costs for the two-year period after the date ofthe last reclamation plan. Gold Fields Ghana was required to submit updatedreclamation plans for a revision of its existing reclamation bond in early2006. However, with the proposed expansion at the Tarkwa mine, Gold FieldsGhana has been advised by the EPA that a new reclamation security bond must beentered into. Gold Fields has been asked to submit an updated reclamation planafter the approval of its new environmental impact statement.

Gold Fields Ghana has an environmental permit for theTarkwa property. Gold Fields Ghana has been issued an environmental certificatedated October 27, 2003 which expired on October 26, 2006. The EPA hasadvised Gold Fields Ghana that given the proposed expansion of its CIL and heapleach facilities, Gold Fields Ghana should undertake a new environmental impactstatement, or EIS, and prepare a new environmental management plan, or EMP.Once the EIS and EMP are approved, it is expected that the EPA will issue a newenvironmental permit which will replace the existing environmental certificate.Pending the submission and approval of the new EIS and EMP, Gold FieldsGhana expects to be able to continue to operate Tarkwa.

Gold Fields has implemented environmental managementsystems in compliance with ISO 14001 throughout its operations in Ghana. GoldFields’ operations in Ghana received full certification under ISO 14001:1996in fiscal 2003, and the operations were re-certified under ISO 14001:2004 in May 2006for a further three years.

Following Gold Fields becoming a signatory to theCyanide Code on November 3, 2005, all its operations, including theGhanaian operations, are committed to complying with the code. Theimplementation structure of the code allows the Ghanaian operations up to threeyears to have independent, third-party audits conducted to evaluate compliancestatus.

Abosso has submitted the required environmentalmanagement plans and reclamation plans and is in compliance with all permit,certificate and reclamation requirements. An environmental certificate for theDamang mine was issued on October 9, 2003 for a two-year period to October 8,2005. Following submission of Damang’s Environmental Management Plan 2005 to2008 in August 2005, on January 23, 2006 this certificate was renewedfor a further three years.

Abosso was the firstmining company in Ghana to sign a reclamation security agreement, in May 2001.This agreement was re-negotiated to include rehabilitation cost estimates inrespect of additional expansion areas of the mine and to take account of areduction in its reclamation liability after achieving certain prescribedreclamation criteria for a portion of the mining area covered by its lease. Anamended and restated reclamation security agreement for Damang was signed in March 2003.In October 2005, Abosso submitted a new costed reclamation plan for theDamang gold mine to the EPA in support of amending the existing bondingarrangements. In April 2006, Abosso provided the EPA with a revised draftreclamation security agreement. The draft reclamation security agreement isbased on calculated rehabilitation costs totaling $5.8 million forecast overthe life of mine. Abosso has posted a reclamation bond (in the form of anirrevocable letter of credit) of $2.0 million and deposited $200,000 cash tosecure the existing agreement.

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*Health and Safety*

A mine owner is statutorily obligated to, among otherthings, take steps to ensure that the mine is managed and worked in accordancewith the provisions of the Mining Regulations, 1970 L.I. 665, which provide forthe safety and proper discipline of the mine workers. The regulations prescribethe measures to be taken at every mining operation to ensure the safety andhealth of mine workers. Additionally, Gold Fields is required under the termsof its mining leases to comply with the reasonable instructions of the ChiefInspector of Mines regarding health and safety in the mine. A violation of theprovisions of the health and safety regulations or failure to comply with thereasonable instructions of the Chief Inspector of Mines could lead to, amongother things, a shutdown of all or a portion of the mine or the imposition ofcostly compliance procedures, and, in the case of a violation of theregulations relating to health and safety, constitutes an offense. Gold Fields,as the holder of the mining lease, has potential liability arising frominjuries to, or deaths of, workers, including, in some cases, workers employedby its contractors. Although Ghanaian law provides statutory workers’compensation for injuries or fatalities to workers, it is not the exclusivemeans for workers to claim compensation. Gold Fields’ insurance for health andsafety claims or the relevant workers’ compensation may not be adequate to meetthe costs which may arise upon any future health and safety claims. As aresult, Gold Fields may suffer adverse consequences. See “Risk Factors—GoldFields’ operations in Ghana are subject to health and safety regulations whichcould impose significant costs and burdens.”

On September 12,2003, the National Health Insurance Act, 2003 (Act 650) came into effect. Theact requires every person resident in Ghana to belong to either a public orprivate health insurance scheme. To fund the National Health Insurance Fund,the act imposes a levy of 2.5% on goods and services produced or provided in,or imported into, Ghana. By the National Health Insurance (Commencement ofLevy) Instrument, 2004 (L.I. 1973), the imposition of the levy came into forceon August 1, 2004. Certain types of machinery used in mining, as well aswater and certain types of fuel, are exempt from the levy. Employers whoestablish or contribute to a private health insurance scheme are not exemptfrom payment of the levy. As a result, the imposition of the levy couldincrease Gold Fields’ costs with respect to goods and services utilized inGhana, including labor costs. See “Risk Factors—Gold Fields’ operations inGhana are subject to health and safety regulations which could imposesignificant costs and burdens.”

*Mineral Rights*

Gold Fields Ghana holds five mining leases in respectof its operations at the Tarkwa property, each dated April 18, 1997,and two mining leases dated February 2, 1988 and June 18, 1992,respectively, for its operations at the former Teberebie property. The Tarkwaproperty mining leases all expire in 2027 and the Teberebie property miningleases both expire in 2018. Under the provisions of the Minerals and Mining Law,1986 (PNDCL 153), or the Minerals and Mining Law, and the terms of the miningleases, all of the Tarkwa property and Teberebie property mining leases arerenewable by agreement between Gold Fields Ghana and the government ofGhana.

Abosso holds a mining lease in respect of the Damangmine dated April 19, 1995, as amended by an agreement dated April 4,1996. This lease expires in 2025. Abosso also holds a mining lease in respectof Lima South, dated March 22, 2006, which expires in 2017. As with theTarkwa and Teberebie mining leases, these leases are renewable under theirterms and the provisions of the Minerals and Mining Law by agreement betweenAbosso and the government of Ghana.

In addition, under Ghanaian law, the Tarkwa propertymining leases are subject to the ratification of Parliament. The MineralsCommission, the statutory corporation overseeing the mining operations onbehalf of the government of Ghana, has submitted the Tarkwa property leases forparliamentary ratification, but they have not yet been ratified. See “RiskFactors—Gold Fields’ mineral rights in Ghana 

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are currently subject to regulations, and will becomesubject to new regulations, which could impose significant costs and burdens.”

A license is required for the export, sale or otherdisposal of minerals and the permission of the Chief Inspector of Mines isrequired to remove minerals obtained by the holder of a mineral right. UnderGhanaian law, the government has the right to compel the sale to it of allmineral rights obtained in Ghana and all products derived from the refining ortreatment of minerals. However, the current project development agreementbetween, among others, Gold Fields Guernsey Limited (now Gold Fields BVI) andthe government of Ghana, entitles Gold Fields to export and sell its entireproduction of gold and by-products. In respect of Abosso, the government hasagreed pursuant to a deed of warranty dated April 26, 1996 not to exercisethese pre-emption rights for as long as Abosso follows such procedure formarketing its products as may be approved by the Bank of Ghana acting on theadvice of the Minerals Commission.

Under the provisions of the Minerals and Mining Law,the size of an area in respect of which a mining lease may be granted cannotexceed 50 square kilometers for any single grant or 150 square kilometers inthe aggregate for any company. Gold Fields Ghana’s mining leases coverapproximately 207 square kilometers and Abosso’s mining lease coversapproximately 52 square kilometers. Gold Fields Ghana is currently discussing adevelopment agreement with the Ghanaian government which would permit it tohold all its current land.

The Minerals and Mining Act, which amends Ghana’sminerals and mining laws, has been passed by the Ghanaian Parliament and, on March 22,2006, was assented to by the President, making it law. On March 31, 2006,the Minerals and Mining Act was published in the Ghana Gazette, bringing itinto force. Although the Minerals and Mining Act repealed the Minerals andMining Law, and the amendments to it, the Minerals and Mining Act provides thatleases, permits and licenses granted or issued under the repealed laws willcontinue under those laws unless the Minister responsible for minerals providesotherwise by regulation. Therefore, unless and until such regulations arepassed in respect of Gold Fields’ mineral rights, the Minerals and Mining Lawwill continue to apply to Gold Fields’ current operations in Ghana.

The majorprovisions of the Minerals and Mining Act are as follows:

·       thegovernment of Ghana’s right to a 10% free carried interest in mineraloperations is restricted to mining leases. The government may participatefurther in mineral operations upon agreement with the holder;

·       mineralrights in land over which mineral rights have been granted may not be grantedto any other person in respect of the same minerals;

·       introductionof a new system for demarcating the land, referred to as the cadastral system,whereby land is demarcated in blocks. Under the new system, a mining lease areamay not be less than one block or more than 300 contiguous blocks. A block isdefined as 21 hectares;

·       miningcompanies which have invested or intend to invest at least $500 million maybenefit from stability and development agreements, relating to both existingand new operations, which will serve to protect holders of current and futuremining leases for a period not exceeding 15 years against changes in laws andregulations generally and in particular relating to customs and other duties,levels of payment of taxes, royalties and exchange control provisions, transferof capital and dividend remittances. A development agreement may containfurther provisions relating to the mineral operations and environmental issues.Each stability and development agreement is subject to the ratification ofParliament;

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·       provisionsrequiring the renewal of a mining lease for a further period of up to 30 yearsonce the holder has made an application for renewal pursuant to terms of thelease if the holder is in material compliance with its obligations under lawand under the lease;

·       provisionsrestricting royalty rates to not more than 6% or less than 3% of the totalrevenue of minerals; and

·       changesto the definition of a “mining company.” Under the Minerals and Mining Law, amining company is defined as a company which or whose subsidiary is the holderof a mining lease. The Minerals and Mining Act defines a mining company as “acompany which or whose subsidiary is the holder of a mineral right” (holders ofmineral rights include prospecting and reconnaissance license holders) andexcludes companies listed on a stock exchange and companies whose holding inmining companies or whose subsidiary’s assets are less than 50% of the marketvalue of their total assets. The effect of this re-definition is that personsseeking to become controllers of prospecting or reconnaissance license holdersas well as mining lease holders are required to seek the approval of theMinister responsible for mines. Further, mineral rights holders are required tonotify the Minister of changes in control. Additionally, similar to its rightscurrently in respect of companies holding mining leases, the government ofGhana is entitled to a “special share” in prospecting or reconnaissance licenseholders. See “—Government Option to Acquire Shares of Mining Companies.”

Under the Minerals andMining Act, neither a landowner nor any other person may search for minerals ormine on any land without having been granted a mineral right by the Ministerresponsible for mines. Additionally, even if a mineral right granted under theMinerals and Mining Law is made subject to the Minerals and Mining Act, the Actprovides that this shall not have the effect of increasing the holder’s costs,or financial burden, for a period of five years.

*Recent FiscalMeasures*

The Ghanaian elections of 2000 resulted in theprincipal opposition party winning and therefore forming the present governmentwhich was re-elected in 2004. Since this government came into power it haspassed legislation imposing a national reconstruction levy for the calendaryears 2001 and 2002, which in the case of mining companies is 2.5% of operatingprofit. This levy was extended for the calendar years 2003, 2004 and 2005.Additionally, the current government of Ghana has introduced measures imposinglevies on mining equipment previously exempt from customs duty.

On March 1, 2006, theIncome Tax Rates (Amendment) Regulations, 2006 (L.I. 1820) reduced thecorporate tax rate from 28% to 25% and the national reconstruction levy hasbeen eliminated in respect of certain companies, including Gold Fields Ghanaand Abosso.

*Government Optionto Acquire Shares of Mining Companies*

Under Ghanaian law, the government is entitled to a10% interest in any Ghanaian company which holds a mining lease in Ghanawithout the payment of compensation. The government of Ghana has alreadyreceived this 10% interest in each of Gold Fields Ghana and Abosso. Thegovernment also has the option, under the Minerals and Mining Law, of acquiringan additional 20% interest in the share capital of mining companies whoserights were granted under the Minerals and Mining Law at a price agreed upon bythe parties, at the fair market value at the time the option is exercised, oras may be determined by international arbitration. The government of Ghanaexercised this option in respect of Gold Fields Ghana and subsequentlytransferred the interest, which now forms part of the IAMGold interest in GoldFields Ghana. The Government of Ghana retains this option to purchase anadditional 20% of the share capital of Abosso. As far as management is aware,the government of Ghana has not exercised this option for any other gold miningcompany in the past.

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Under the Minerals andMining Law, which continues to apply to Gold Fields Ghana’s operations, andunder the Minerals and Mining Act, the government has a further option to acquirea “special share” in a mining company for no consideration or in exchange forsuch consideration as the government and that company shall agree. Thisinterest, when acquired, constitutes a special share which gives the governmentthe right to attend and speak at any general meeting of shareholders, but doesnot entitle the government to any voting rights. The special share does notentitle the government to distributions of profits of the company which issuesit to the government. The written consent of the government is required to makeany amendment to a company’s articles of incorporation relating to thegovernment’s option to acquire a special share. Although the government ofGhana has agreed not to exercise this option in respect of Gold Fields Ghana,it has retained this option for Abosso.

*Exchange Controls*

Ghana’s exchange control laws require permission fromthe Ghanaian authorities for transactions involving foreign currency. Under aforeign exchange retention account agreement with the government of Ghana, GoldFields Ghana is required to repatriate 20% of its revenues derived from theTarkwa mine to Ghana and use the repatriated revenues in Ghana or maintain themin a Ghanaian bank account. Abosso is currently obligated to repatriate 25% ofits revenue to Ghana, although the level of repatriation under the deed ofwarranty between Abosso and the government of Ghana is subject to renegotiationevery two years. The most recent negotiations were concluded in February 2003.While management has no reason to believe that the repatriation level willincrease as a result of the next set of negotiations, there is no agreedceiling on the repatriation level, and it could be increased. Any increasecould adversely affect Gold Fields’ ability to use the cash flow from theDamang mine outside Ghana, including to fund working costs and capitalexpenditures at other operations, to provide funds for acquisitions and torepay principal and interest on indebtedness.

During the first half of2000, the central bank, or the Bank of Ghana, requested mining companies,including Gold Fields Ghana and Abosso, to repatriate an additional 25% oftheir revenues to foreign currency accounts with local banks. Gold Fields Ghanaand Abosso were specifically asked to do so by letter from the then Minister ofFinance. Gold Fields Ghana responded that it was at the time repatriating morethan its required percentage of revenues to Ghana and expected to continue to,although it could not guarantee that it would, do so for the foreseeablefuture. Neither Gold Fields Ghana nor Abosso has heard anything further fromeither the Bank of Ghana or the Minister of Finance. Because of its need tofund operating costs for the Ghana operation, Gold Fields currently repatriatesapproximately 40% of revenues from the Ghana operation to Ghana. The Bank ofGhana or the Ministry of Finance may in the future request or direct GoldFields to repatriate higher amounts to Ghana. Management believes that GoldFields Ghana is entitled to rely on the provisions of the foreign exchangeretention account agreement for the duration of the Tarkwa mining leases.

***Australia***

*Environmental*

While Australia’s national government retains thepower to regulate activities which impact upon matters of national environmentalsignificance, the Constitution vests the power to legislate environmentalmatters principally in the states. Gold Fields’ gold operations in Australiaare primarily subject to the environmental laws and regulations of the State ofWestern Australia. The Western Australia Environmental Protection Act 1986 andMining Act require, among other things, that Gold Fields obtains environmentallicenses, work approvals and mining licenses to begin mining operations.

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During the operational life of its mines, Gold Fieldsis required by law to make provisions for the ongoing rehabilitation of itsmines and to provide for the cost of post-closure rehabilitation and monitoringonce mining operations cease. Gold Fields guarantees its environmentalobligations by providing the Western Australian government with unconditionalbank-guaranteed performance bonds. However, these bonds would not cover anyenvironmental events requiring remediation that were unforeseen at the time thebonds were issued or which occur as a result of a breach of Gold Fields’environmental licensing conditions.

The Contaminated Site Act 2003 is expected to comeinto effect in late 2006. This legislation will require Gold Fields to reportknown or suspected contaminated sites. Gold Fields may also be required toremediate an affected site if there is contamination that is likely to causeharm to human health or the environment. The government of Western Australiarecently amended the Environmental Protection Act 1986 to create new offensesin relation to environmental harm (some of which provide for strict liability)and other obligations with which Gold Fields must comply. One of the purposesof these amendments is to broaden the Department of Environment andConservation’s power to prosecute for environmental harms. As a result, GoldFields’ exposure to prosecution for environmental harms may be increased.Further, as a result of these changes, Gold Fields’ environmental duties andresponsibilities will be increased, which could impose significant costs andburdens. See “Risk Factors—Gold Fields’ operations in Australia are subject toenvironmental regulations which could impose significant costs and burdens.”

Following Gold Fieldsbecoming a signatory to the Cyanide Code on November 3, 2005, all itsoperations, including its Australian operations, are committed to complyingwith the code. The implementation structure of the code allows operations up tothree years to have independent, third-party audits conducted to evaluatecompliance status.

*Health and Safety*

The Western Australia Mines Safety and Inspection Act1994 (WA), or the Safety and Inspection Act, regulates the duties of employersand employees in the mining industry with regard to occupational health andsafety and outlines offenses and penalties for breach. The regulationsprescribe specific measures and provide for inspectors to review the work sitefor hazards and violations of the health and safety requirements. A violationof the health and safety laws or failure to comply with the instructions of therelevant health and safety authorities could lead to, among other things, atemporary shutdown of all or a portion of the mine, a loss of the right to mineor the imposition of costly compliance procedures. However, mine ownerliability for contractors’ employees and labor hire employees under the Safetyand Inspection Act extends only to matters over which the employer has thecapacity to exercise control. See “Risk Factors—Gold Fields’ operations inAustralia are subject to health and safety regulations which could imposesignificant costs and burdens.”

The Safety andInspection Act was amended in April 2005 and the changes include:

·       anew regime of penalties characterized by significant increases (particularly inrelation to companies), higher penalties for repeat offenses, and new offensesof causing death or serious harm through “gross negligence,” which attract highpenalties including the option of imprisonment;

·       broaderpowers for inspectors to impose improvements or prohibition notices onmachinery and work practices; and

·       anew duty of care imposed on employers with respect to residential accommodationsupplied in connection with employment.

The effect of theamendments is that Gold Fields’ exposure to prosecution has increased, as hasthe cost of health and safety compliance of Gold Fields’ mining operations inAustralia.

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*Mineral Rights*

In Australia, the ownership of land is separate fromthe ownership of most minerals, which are the property of the states and arethus regulated by the state governments. The Western Australian Mining Act 1978(WA), or the Mining Act, is the principal piece of legislation governingexploration and mining on land in Western Australia. Licenses and leases for,among other things, prospecting, exploration and mining must be obtainedpursuant to the requirements of the Mining Act before the relevant activity canbegin. Application fees and rental payments are payable in respect of eachmining tenement.

Prospecting licenses, exploration licenses and miningleases are subject to prescribed minimum annual expenditure commitments.Royalties are payable to the state based on the amount of ore produced orobtained from a mining tenement. A monthly production report must be filed androyalties are calculated accordingly.

Ministerial consent isrequired with respect to assignment or sale of a mining lease and certain otherleases and tenements. Gold Fields has obtained ministerial consent for thetransfer of all material mining leases and other tenements acquired from WMC.

*Land Claims*

In 1992, the High Court of Australia recognized a formof native title which protects the rights of indigenous people in relation toland in certain circumstances. As a result of this decision, the Native TitleAct 1993 (Cth), or Native Title Act, was enacted to recognize and protectexisting native title by providing a mechanism for the determination of nativetitle claims and a statutory right for Aboriginal groups or persons to negotiate,object, and/or be consulted when, among other things, there is an expansion of,or change to, the rights and interests in the land which affects native titleand constitutes a “future act” under the Native Title Act. The existence ofthese claims does not necessarily prevent continued mining under existingtenements. Certain of Gold Fields’ tenements are currently subject to nativetitle claims.

Mining leases do not necessarily extinguish all nativetitle, but do extinguish the native title rights with which they conflict. Theright of native title holders to control access to land is extinguished by amining lease in Western Australia. However, mining leases may not extinguishother native title rights. Therefore, some native title rights may co-exist withthe rights granted under a mining lease. Compensation could be payable forrights lost by native title holders on the grant of a mining lease. Inaddition, negotiations with native title applicants are generally necessarybefore a new mining lease will be granted by the state and these can be timeconsuming and costly.

It is possible that land comprised in seven of GoldFields’ existing tenements could be at risk due to native title claims, becausethose particular tenements may have been granted by the State of WesternAustralia in a manner contrary to the Native Title Act. Although the validityof those seven tenements is in question, Gold Fields’ management does notbelieve those tenements are material to its Australian operation.

The Aboriginal heritagelaws protect sites of significance to Aboriginal people which have ongoingethnographic, archaeological or historic significance. Gold Fields is aware ofseveral Aboriginal heritage sites on its tenements. However, it does notbelieve that the protected status of these sites will materially affect itscurrent operations in Australia. See “Risk Factors—Gold Fields’ tenements inAustralia are subject to native title claims and Aboriginal heritage siteswhich could impose significant costs and burdens.”

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***Venezuela***

*Environmental*

Pursuant to article 19 of the Organic EnvironmentalLaw, enacted in 1976, or the Environmental Law, activities that threaten todegrade the environment, or Threatening Activities, are subject to the controlof the Ministry of Environment and Natural Resources, or the Ministry of theEnvironment. Various decrees established regulations, standards and proceduresapplicable to individuals and corporations carrying out Threatening Activities.The most important of these regulations include: (i) regulations foractivities that may provoke changes in streams, obstruction of channels andsedimentation problems; (ii) regulations for the control of toxicresidues; (iii) regulations for the control and management of non-toxicsolid residues; (iv) regulations for the control of gas or particleemissions; and (v) regulations for the control of liquid effluents. Thesetechnical regulations must be considered in the development of mining projectsand non-compliance with the above listed regulations may result in criminal,civil and administrative liabilities, pursuant to the Criminal EnvironmentalLaw, enacted in 1992.

In order for miningcompanies, including Gold Fields, to conduct exploration/exploitationactivities in Venezuela, the following permits are required:

·       *Authorization for Occupation ofTerritory, or Occupation Permit:  *This permit authorizes acompany’s presence at a location, but not the undertaking of any activity.Regulations published under the Decree Law of Mines of 1999, or the Decree Lawof Mines, in 2001, require that an Occupation Permit be approved before the grantingof mining concessions.

·       *Authorization for Usage ofNatural Resources for Exploration, or Exploration Permit:  *Afterthe occupation permit is granted, a mining company must file an application foran exploration permit with the Ministry of the Environment. The explorationpermit must include a brief description of the proposed project, measures forpreventing, mitigating and correcting environmental impact and the conditionsand recommendations for the exploration phase. Exploration permits must contain,among others things, the following information: (i) the explorationprogram; (ii) the quantity of natural resources to be affected by theexploration phase; (iii) identification of impact to the areas to beaffected by the exploration; and (iv) a mitigation and recovery plan whichmust contain plans for the treatment of solid toxic and non-toxic residues,recovery measures for affected ground, topography and drainage, a reforestationplan and an estimated annual cost. An Environmental Supervision Plan, orSupervision Plan, must be filed as part of the Exploration Permit application(in practice, Supervision Plans are filed after the issuance of the ExplorationPermit). The Supervision Plan sets forth the manner in which the execution ofthe project will be evaluated and controlled.

·       *Authorization for Usage of Natural Resources for Exploitation, orExploitation Permit:  *An application for an Exploitation Permitmust be filed with the Ministry of the Environment prior to the commencement ofexploitation activities. The Exploitation Permit must include: (i) a briefdescription of the proposed project; (ii) a description of plans toprevent, mitigate and correct the environmental impact of the project; and (iii) andthe conditions under which the environment may be affected or impacted. A bondissued by a local bank or insurance company must be posted in order toguarantee the execution of the measures necessary for the reclamation of thearea and the reduction of the impact of mining activities on the environmentduring the exploitation phase.

*Health and Safety*

In general, employees working in Venezuela are subjectto Venezuelan labor laws as set forth in the Organic Labor Law, or the LaborLaw, even if they are employed by a foreign corporation. Under the Labor Law,an employer is liable to employees or their relatives, as the case may be, forwork-related 

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accidents and occupational illnesses suffered by them,unless such accidents: (i) occur due to *forcemajeure* events; (ii) derive from the intentional will of theemployee; (iii) occur while an individual is performing an occasionalservice for the employer which is not related to the company’s business; or (iv) occurin the course of work undertaken by the employee working from his own domicile.The Labor Law provides for indemnification payments of up to two years’ salary,but not in excess of 25 times the applicable monthly minimum salary. As of June 30,2006, the minimum monthly salary was VEB 465,750 (US$216.63 at the officialrate). The payment of indemnification is triggered when the accident derivesfrom the service or is directly related to it, whether or not there is fault ornegligence of the employer or the employee. Furthermore, as an employer engagedin mining activities, Gold Fields faces potential liability arising frominjuries to, or deaths of, workers, including workers employed by itscontractors.

Venezuela’s Organic Law of Work Conditions, or theOrganic Law, imposes on employers the obligation to maintain a work environmentwhere employees are safeguarded against work-related accidents and illnesses.The Organic Law imposes certain obligations on employers which can be onerous,such as the implementation and maintenance of medical services and the creationof employer-employee committees in charge of coordinating policies related towork and safety procedures, conditions and precautions. In case ofinfringement, the Organic Law provides for penalties, including criminalliability where an employee’s injury results from the negligence of his or heremployer or the employer’s non-compliance with legal requirements.

For further discussionregarding Venezuela’s labor laws, see “Directors, Senior Management andEmployees—Employees—Labor Relations—Venezuela.”

*Mineral Rights*

Under the Mining Law of 1945, in Venezuela miningrights were claimed freely by virtue of the conduct of prospecting, explorationor exploitation activities, subject to special “reserved” areas held by theState. In February 1976, the Venezuelan government declared as “reserved”all minerals and all type of deposits in the country, thus eliminating the freeprospecting and claim system, and the grant of discretionary concessions becamethe only system available for the private development of exploration and miningactivities. Pressure for improved procedures for granting mining rightsprompted the government to issue new decrees in 1990, under which the Ministryof Energy and Mines (now known as the Ministry of Basic Industries and Mining)or the Ministry of Mining, was instructed to assign its direct mining rights onalluvial and vein bauxite, gold and diamonds in the Guayana region toCorporación Venezolana de Guayana S.A., or CVG, a governmental developmententity. The decrees authorized CVG to grant mining rights to private investorsby way of contracts.

Conflicts over the power to assign mining rightsbetween the Ministry of Mining and CVG provoked the amendment in 1993, and therevocation in 1994, of CVG’s right to assign mining rights. However, all miningcontracts granted by CVG to individuals and corporations under the revokedright remain in full force and effect.

Pursuant to the Decree Law of Mines, which was enactedin 1999 and reflects current Venezuelan law governing mining rights, allmineral deposits are the property of the Venezuelan State. The Decree Law ofMines regulates the assignment of mining rights, as well as the activitiesancillary to mining such as transport, commerce and exports of minerals,requiring authorizations or registration for most of these activities.Furthermore, the Decree Law of Mines includes procedures for guaranteeingmining concession and contract holders the rights to use the land necessary fortheir activities, through rights of way, temporary occupation of land and evenexpropriation. The Decree Law of Mines includes provisions on reversion ofassets at the end of the concession term, a system of penalties and terminationof concessions and limitations restricting certain individuals from directly orindirectly owning mining rights (e.g., public servants and their families andforeign governments).

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When the Decree Law of Mines was enacted, it containeda transitional provision, valid for the 12-month period followingenactment, which allowed the holders of mining contracts awarded by CVG toconvert such contracts into concessions issued by the Ministry of Mining, inorder to enhance the nature of the mining rights derived from such CVGcontracts. The transitional provisions allowed, but did not require, theholders of mining contracts to request the conversion of their contracts intoconcessions, subject to several conditions. Approximately 340 contract holdersapplied for conversion during this transitional period, but only a fewconversions were issued.

In September 2003, the authority to overseecompliance of the contracts granted by CVG was transferred to the Ministry ofMining. The withdrawal of the authority of CVG to issue mining rights in theGuayana region and the long delays and refusals of the Ministry of theEnvironment to issue environmental permits has stalled many ongoing miningprojects and prevented the start of new ones.

In general, theDecree Law of Mines provides for three forms of holding mining rights in aparticular area:

·       *Direct exploitation:*   Direct exploitation rights may beawarded by a simple resolution of the Ministry of Mining, to whomever it seesfit, and there are no limits on the area size or duration of such rights.

·       *Exploration and subsequent exploitation concessions:  *Explorationand subsequent exploitation concessions are granted to individuals orcorporations, foreign or national, through a procedure set forth in the DecreeLaw of Mines, which is substantially similar to the one established in theMining Law of 1945 for discretionary concessions; it includes the approval bythe Ministry of Mining of the technical and financial capacity of the applicantas well as an opposition period for claims by third parties. Concessions aregranted only to mine the minerals described in the mining title. If a depositof a different mineral is found, the concession holder has to give notice tothe Ministry of Mining, which may decide to mine it directly (usually throughan “agreement” with the concession holder) or to award it by way of aconcession, for which the concession holder will have a preferential right.

The Decree Law of Mines instructed the Ministry ofMining to create a “mining grid” covering all the territory of the country.This grid created “units” with a surface of between 493 and 513 hectares (onedegree north-south by one and a half degrees east-west) depending on thelocation of the units (nearness to the equator). Areas of concessions aremeasured by these units and also by “lots,” which are equal to the size of 12units (5,196 to 6,156 hectares). One concession holder cannot hold more thantwo lots, or 24 units, at the same time. Once a lot has been explored, theconcession holder can only keep a maximum of six adjacent units for mining. Theremaining units have to be returned to the Ministry of Mining.

Concessions are granted for an initial explorationperiod of three years, which can be extended for one additional year. Withinthe exploration period the concession holder must carry out an explorationplan, select the units for exploitation (which cannot exceed 50% of the totalconcession area) and complete a feasibility study. The selection of units forexploitation together with the feasibility study must be presented to theMinistry of Mining for approval. Once approved, a Certificate of Exploitationis granted over the selected units, which grants the right to exploit theactual concessions. After a Certificate of Exploitation is granted, theconcession term may not exceed 20 years, plus possible discretionary extensionsthat cannot exceed 10 years each and 20 years in aggregate. Concessions must bebrought into production within seven years from the date of publication of theCertificate of Exploitation and, once begun, exploitation cannot be suspendedfor more than a year, save in the case of *force majeure*events with the approval of the Ministry of Mining.

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Assignments ofconcessions, sales of any assets used in the concession and major agreements,including concession leases, have to be approved by the Ministry of Mining. Atthe end of the term of the concession, all concession-holder’s assets used inthe concession and any land acquired for the purpose of the concession revertto the State at no cost.

·       *Authorizations for small miners:*   Small mining islimited to Venezuelan individuals or corporations. Although there are noparameters to define small-scale mining, the Decree Law of Mines establishesthat authorizations for small-scale mining will not exceed an area of 10hectares, with a term no longer than 10 years and to be worked by not more than30 miners/workers. Small miners can form communities or co-operatives toimprove the efficiency of their mining operations.

Notwithstanding the foregoing, the Venezuelangovernment is currently discussing a reform to the Decree Law of Mines with theNational Assembly. It appears that the goals of this reform are to immediatelyassume control of inoperative mining concessions and then, in the longer term,assume control of mining operations. The proposed model follows the newguidelines applied to Venezuela’s oil sector in the case of operationalagreements. Although there are several versions of the proposed law, if thereform is accepted, it is likely that private investors will be allowed to participatein mining projects only through mixed companies where the government hasmajority equity participation.

The current draft law,however, contains a grandfathering provision, pursuant to which concessions,such as the ones leased to the relevant Gold Fields subsidiaries in Venezuela,which are in good standing will be allowed to continue until their naturalexpiration. Gold Fields expects that this grandfathering provision would ensureits mining rights over most of the areas under its control in Venezuela, atleast until expiration of the natural terms of the concessions. However, thedraft of this proposed mining law reform is still subject to change and thereare no indications as to how concessions which have not obtained theirCertificate of Exploitation will be treated. Additionally, the draft lawcontains a provision which orders the Ministry of Mining to proceed with thetermination of CVG contracts which were not converted into mining concessionsduring the 12 month transitional period provided for under the Decree Law ofMines.

*Exchange Controls*

On January 21, 2003 the Venezuelan governmentauthorized the Ministry of Finance to agree with the Venezuelan Central Bank,or the Central Bank on certain temporary measures, which limit the free conversionof Bolivars into foreign currency and the transfer of funds outside Venezuela.

On February 5, 2003, the Ministry of Finance andthe Central Bank entered into Exchange Agreement No. 1 and ExchangeAgreement No. 2. Exchange Agreement No. 1 has been amended severaltimes and currently sets the framework of the exchange control system whichestablishes limitations on the free conversion of Bolivars into foreigncurrency and the transfer of funds outside Venezuela. Exchange Agreement No. 2,as amended, currently sets the official exchange rate at VEB 2,150 per U.S.dollar.

Exchange Agreement No. 1 establishes that theacquisition of foreign currency by individuals and companies for transfers,remittances and payments for imports of goods and services and principal andinterest on duly registered private debt, will be limited and subject to therequirements and conditions to be determined by the Comisión de Administraciónde Divisas (Currency Administration Commission, or CADIVI), the entityresponsible for administering the exchange control system. Although in theorythe acquisition of foreign currency for dividend payments on direct foreigninvestment, capital repatriation, payments in respect of service contracts,technology licenses, royalties and similar payments is guaranteed, pursuant toexisting exchange control regulations it is also necessary to apply to CADIVIto acquire foreign currency at the official exchange rate for these purposes.To obtain CADIVI’s authorization for the acquisition of foreign currency forany purpose, individuals and companies must be registered at the Registro deUsuarios del Sistema de Administración de Divisas and comply with a series ofadditional requirements.

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Exchange Agreement No. 1 additionally providesthat companies must also be registered at the Superintendency of ForeignInvestments in order to obtain authorization from CADIVI for the purchase offoreign currency for remittance of dividends, capital gains and interestderived from foreign investments and for foreign currency payments derived fromservice and technology agreements, royalties and other payments derived fromthe use of industrial and intellectual property rights.

In addition to theabove general framework, CADIVI has issued several administrative provisionsregulating other areas that could materially affect the activities of thesubsidiaries of Gold Fields in Venezuela. These include:

·       mandatorysale to the Central Bank of all foreign currency derived from exports (save fora maximum of 10% to cover export-related expenses);

·       limitedacquisition of foreign currency necessary for imports;

·       acquisitionof foreign currency for the payment of foreign bank debt; and

·       acquisitionof foreign currency for technical assistance, royalties, patents and trademarkspayments.

As a result of these regulations, (i) all foreigncurrency derived from exports and (ii) foreign currency entering thecountry derived from other sources must be sold to the Central Bank. Pursuantto Exchange Agreement No. 1, all foreign currency originated from exportsof goods and services, must be sold to the Central Bank, within five workingdays from the date of the availability of the foreign currency. Exporters areallowed to retain up to 10% of the export proceeds to cover export-relatedexpenses. In this case, they must present support for such expenses. CADIVI mayexceptionally authorize individuals and companies to retain more than 10% ofthe export proceeds in foreign currency. With the exception of those amountswhich are required to be converted at the official exchange rate, such asproceeds of exports or other foreign currency entering the country, individualsand entities may purchase or sell foreign currency through other, unofficialchannels, involving transactions in the capital markets. However, the exchangerates available through these channels are less favorable than the officialrate.

The Law Against IllicitExchange Transactions came into effect on October 14, 2005. This lawdescribes the actions that constitute illegal exchange acts, including, amongothers, purchase, sale, export or import of foreign currency in excess ofUS$10,000 in a given year, fraudulent acquisition of foreign currency throughCADIVI, failure to declare export proceeds, failure to repatriate and convertexport proceeds and use of legally acquired foreign currency for purposesdifferent than those authorized. Penalties for violations of the law includefines, ranging from one to two times the amount of the illegal transaction(which can be doubled in the case of repeated offenses), and imprisonment,ranging from two to seven years, depending on the type of illicit act. The lawapplies to both individuals and companies that, acting either in their own nameor as administrators, representatives, verifiers, recipients or beneficiaries,contravene the law’s provisions or the provisions established by the ExchangeAgreements.

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**Property**

GoldFields’ operations as of June 30, 2006 comprised the following:

**Gold Fields’ operative mining areas as of June 30, 2006**

| **Operation**    | ** ** | ** **      | ** ** | **Size** | ** ** |
|------------------|------------|-----------------|------------|----------|------------|
| **South Africa** | ** ** | ** **      | ** ** |
| Driefontein      |       | 8,561 hectares  |       |
| Kloof            |       | 20,087 hectares |       |
| Beatrix          |       | 16,821 hectares |       |
| **Ghana**        | ** ** | ** **      | ** ** |
| Tarkwa           |       | 20,825 hectares |       |
| Damang           |       | 8,111 hectares  |       |
| **Australia**    | ** ** | ** **      | ** ** |
| St. Ives         |       | 87,363 hectares |       |
| Agnew            |       | 61,602 hectares |       |
| **Venezuela**    | ** ** | ** **      | ** ** |
| Choco 10         |       | 2,124 hectares  |       |

 

Gold Fields leases its corporate headquarters inJohannesburg.

As discussed earlier, the New Minerals Act came intooperation on May 1, 2004 and vests the right to prospect and mine in theSouth African State with administration by the government of South Africa. The transitionalprovisions of the New Minerals Act phase out existing rights to prospect andmine granted under the old legislation. Gold Fields owned substantiallyall of the mineral rights under the previous regime for which it had miningauthorizations under that regime. In November 2006, the South AfricanDepartment of Minerals and Energy approved the conversion of Gold Fields’mining licenses under the former regulatory regime at Driefontein, Kloof andBeatrix into licenses under the new regime. See “—Regulatory and EnvironmentalMatters—South Africa—Mineral Rights.”

Gold Fields also owns most of the surface rights withrespect to its South African mining properties. Where Gold Fields conductssurface operations on land the surface rights of which it does not own, it doesso in accordance with applicable mining and property laws. In addition, GoldFields owns various mineral rights, under the previous regime, and surfacerights contiguous to its operations in South Africa. As required under the NewMinerals Act, Gold Field has submitted its surface rights utilized for miningpurposes for registration. Gold Fields has received mining rights on propertieswhich it has identified as being able to contribute, now or in the future, toits business and will similarly seek to convert those mining rights to miningrights under the New Minerals Act. See “—Regulatory and Environmental Matters—SouthAfrica—Mineral Rights.”

Gold Fields Ghana obtained the mining rights for theTarkwa property from the government of Ghana in 1993. In August 2000, withthe consent of the government of Ghana, Gold Fields Ghana was assigned themining rights for the northern portion of the Teberebie property. The Tarkwarights expire in 2027, while the Teberebie rights expire in 2018. Abosso holdsthe right to mine at the Damang property under a mining lease from thegovernment of Ghana which expires in 2025. Gold Fields may exploit all surfaceand underground gold at all three sites until the rights expire, provided thatGold Fields pays the government of Ghana a royalty which is calculated on thebasis of a formula which ranges from 3% to 12% of revenues derived from miningat the sites. For fiscal 2005, this formula resulted in Gold Fields Ghanapaying royalties equivalent to approximately 3% of the revenues from goldproduced at the Tarkwa and Teberebie properties, and Abosso payingapproximately 3% of the revenues from gold produced at the Damang property.

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In Australia, mining rights and property are leased fromthe state. Australian mining leases have an initial term of 21 years with oneautomatic 21-year renewal period and thereafter an indefinite number of 21-yearrenewals with government approval. Gold Fields pays a royalty to the state of2.5% of revenues from gold produced at St. Ives and Agnew.

In Venezuela, all mineral deposits are the property ofthe state. Mining rights are usually granted to individuals or corporationsthrough exploration and subsequent exploitation concessions. Most of GoldFields’ mining rights (including Choco 10) are concessions granted to CVG,which have been leased by CVG to different subsidiaries of Gold Fields.

In Peru, exploration and extraction activities canonly be performed in duly authorized areas. Authorization is granted when amining concession is issued. Mining concessions are for an indefinite termprovided the titleholder complies with the timely payment of annual concessionfees and applicable fines.

Once the claimed area is subject to a miningconcession, the titleholder must register its title with the Registro deDerechos Mineros, or Mining Registry, administered by the SuperintendenciaNacional de Registros Públicos, or SUNARP, where all the agreements,resolutions and acts thereto must also be registered.

To maintain mining concessions in good standing, thetitleholder must pay a concession fee, which currently amounts to US$3.00 perhectare per year. Failure to pay the concession fee for two consecutive yearscould lead to the cancellation of the mining concession.

Holders of mining concessions are also required tomeet minimum annual production targets prescribed by law. This target iscurrently US$100.00 per hectare per year. Titleholders are entitled toaggregate multiple concessions for these purposes provided certain conditionsare met. If the titleholder has not met the minimum annual production targetwithin seven years of the concession having been granted, the titleholder isrequired to pay a penalty equal to US$6.00 per year per hectare for the eighthto eleventh year following the granting of the concession. The penaltyincreases to US$20.00 per year per hectare if the minimum production target isnot met within 12 years of the concession having been granted. Failure to paythis penalty for two consecutive years may lead to the cancellation of themining concession, although titleholders may be able to avoid paying thepenalty if they can prove to the mining authorities that they have invested anamount equivalent to at least ten times the amount of the penalty in the localarea.

Gold Fields La CimaS.A.’s mining areas at the Cerra Corona Project consist of the following:

·       Allthe existing mining rights owned by Gold Fields La Cima S.A. cover an area of4,011.6386 hectares.

·       Thearea covered by the mining rights related to the Cerro Corona Project which isowned by Gold Fields La Cima S.A. is 1,961.0251 hectares.

·       Thearea covered by the mining rights outside the Cerro Corona Project which isowned by Gold Fields La Cima S.A. is 2,050.6135 hectares.

·       Thearea covered by the surface rights related to the Cerro Corona Project which isowned by Gold Fields La Cima S.A. is 766.1553 hectares and 10,000 sq meters.

Gold Fields La Cima S.A. leases its corporateheadquarters in Lima, Peru.

Gold Fields also holds exploration tenements coveringa total of approximately 21.6 million hectares in various countries, includingthe Dominican Republic, Venezuela, Peru, Chile, Brazil, Indonesia, Finland,South Africa, Ghana, Guinea, Burkina Faso, the Democratic Republic of Congo,Mali and Australia. Gold Fields’ ownership interests in these sites vary withits participation interests in the relevant exploration projects. See “—Exploration.”

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Gold Fields holds title tonumerous non-mining properties in South Africa, including buildings, shops,farmland and hospitals. In addition, Gold Fields controls, directly orindirectly, approximately 66,000 hectares of land in the West Wits region,including, among other things, a nature reserve, wetlands and a golf course.

**Research and Development**

Gold Fields undertakes various research anddevelopment projects relating to gold production technology and potential usesof gold. In particular, Gold Fields has developed a patented technology calledBiox® through its wholly-owned Swiss subsidiaryBiomin Technologies S.A. Biox® involves a process by which bacteria releasegold from sulfide bearing gold ore to permit more economical recovery of thegold. During fiscal 2004, Gold Fields re-evaluated the potential future incomearising from existing and possible new contracts for Biox®, and as a result reduced the carryingvalue of the patent. See “Operating and Financial Review and Prospects—Yearsended June 30, 2005 and 2004—Impairment of assets.”

Gold Fields participatesin a collaborative research and development project, together with AngloGoldAshanti Limited, Harmony Gold Mining Company Limited and Mintek, which isfocused on investigating potential new industrial uses for gold. Gold Fields’primary contribution to the project is aimed at researching goldnanotechnology.

**Legal Proceedings**

Gold Fields is not a partyto any material legal or arbitration proceedings, nor is any of its propertythe subject of pending material legal proceedings.

**Glossary of MiningTerms**

The following explanations are not intended astechnical definitions, but rather are intended to assist the reader inunderstanding some of the terms used in this annual report.

**Absorption,desorption and recovery (AD&R):**   a treatmentprocess involving the extraction of gold in solution using activated carbon,followed by removal of the gold from the carbon.

**Agglomeration:**   amethod of concentrating gold based on its adhesive characteristics.

**Backfill:**   material,generally sourced from tailings or waste rock, used to refill mined-out areasto increase the long-term stability of mines and mitigate the effects ofseismicity.

**Calloption:**   a contract which provides the owner withthe right, but not the obligation, to purchase an asset at a specified price onor before a specified date.

**Carbonabsorption:**   a treatment process which usesactivated carbon to remove gold in solution.

**Carbonin leach (CIL):**   a process similar to CIP(described below) except that the ore slurries are not leached with cyanideprior to carbon loading. Instead, the leaching and carbon loading occursimultaneously.

**Carbonin pulp,****or CIP****:**   a common process used to extract gold from cyanideleach slurries. The process consists of carbon granules suspended in the slurryand flowing counter-current to the process slurry in multiple-staged agitatedtanks. The process slurry, which has been leached with cyanide prior to the CIPprocess, contains soluble gold. The soluble gold is absorbed onto the carbongranules which are subsequently separated from the slurry by screening. The goldis then recovered from the carbon by electrowinning onto steel wool cathodes orby a similar process.

**Cleaning:**   theprocess of removing broken rock from a mine.

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**Closelyspaced dip pillar mining method:**   a mining methodwhere support pillars are left in place at relatively close intervals toincrease the stability of the mine. Mining is conducted using conventionaldrilling and blasting techniques.

**Comminution:**   thebreaking, crushing or grinding of ore by mechanical means.

**Crosscut:**   amine working driven horizontally and at right angles to a level.

**Cut-offgrade:**   the grade which distinguishes thematerial within the orebody that is to be extracted and treated from theremainder.

**De-bottlenecking:**   decreasing production constraints (e.g.,removing mechanical deficiencies so that processed tonnage may be increased).

**Declineor incline:**   a sloping underground opening formachine access from the surface to an underground mine or from level to levelin a mine. Declines and inclines are often driven in a spiral to accessdifferent elevations in the mine.

**Depletion:**   thedecrease in quantity of ore in a deposit or property resulting from extractionor production.

**Development:**   activities(including shaft sinking and on-reef and off-reef tunneling) required toprepare for mining activities and maintain a planned production level and thosecosts incurred to enable the conversion of mineralization to reserves.

**Dilution:**   themixing of waste rock with ore, resulting in a decrease in the overall grade.

**Dissolution:**   theprocess whereby a metal is dissolved and becomes amenable to separation fromthe gangue material.

**Electrowinning:**   theprocess of removing gold from solution by the action of electric currents.

**Elution:**   removalof the gold from the activated carbon.

**Exploration:**   activitiesassociated with ascertaining the existence, location, extent or quality ofmineralization, including economic and technical evaluations of mineralization.

**Flotation:**   theprocess whereby certain chemicals are added to the material fed to the leachcircuit in order to float the desired minerals to produce a concentrate of themineral to be processed. This process can be carried out in column floatationcells.

**Forwardsale contract:**   the sale of a specified quantityof an asset at a future specified date at a fixed price.

**Gangue:**   commerciallyvalueless material remaining after ore extraction from rock.

**Goldin process:**   gold in the processing circuit thatis expected to be recovered during or after operations.

**Goldreserves:**   the gold contained within proven andprobable reserves on the basis of recoverable material (reported as milldelivered tons and head grade).

**Grade:**   thequantity of metal per unit mass of ore expressed as a percentage or, for gold,as grams of gold per ton of ore.

**Greenfield:**   apotential mining site of unknown quality.

**Grinding:**   reducingrock to the consistency of fine sand by crushing and abrading in a rotatingsteel grinding mill.

**Headgrade:**   the grade of the ore as delivered to themetallurgical plant.

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**Heapleaching:**   a relatively low cost technique forextracting metals from ore by percolating leaching solutions through heaps ofore placed on impervious pads. Generally used on low-grade ores.

**Insitu:**   within unbroken rock or still in theground.

**Jumbocut and mullock fill mining method:**   a miningmethod using a Jumbo multi-head drilling rig and waste rock, or mullock, asopposed to tailings, as backfill.

**Leaching:**   dissolutionof gold from the crushed and milled material, including reclaimed slime, forabsorption and concentration onto the activated carbon.

**Level:**   theworkings or tunnels of an underground mine which are on the same horizontalplane.

**Lifeof mine, or LoM:**   the expected remaining years ofproduction, based on production rates and ore reserves.

**Londonafternoon fixing price:**   the afternoon sessionopen fixing of the gold price which takes place daily in London and is set by aboard comprising five financial institutions.

**Londonmorning fixing price:**   the morning session openfixing of the gold price which takes place daily in London and is set by aboard comprising five financial institutions.

**Longwallmining method:**   a mining method involving miningover large continuous spans without the use of pillars.

**Mark-to-market:**   thecurrent fair value of a derivative based on current market prices, or tocalculate the current fair value of a derivative based on current marketprices, as the case may be.

**Measures:**   conversionfactors from metric units to U.S. units are provided below.

| **Metric unit** | ** ** | ** ** | ** ** | ** **                       | ** ** | ** ** | **U.S. equivalent** | ** ** | ** ** |
|----------------------|------------|------------|------------|----------------------------------|------------|------------|--------------------------|------------|------------|
| 1 ton                |       | = 1  t     |       | =  1.10231 short tons            |       |
| 1 gram               |       | = 1  g     |       | =  0.03215 ounces                |       |
| 1 gram per ton       |       | = 1  g/t   |       | =  0.02917 ounces per short ton  |       |
| 1 kilogram per  ton  |       | = 1  kg/t  |       | =  29.16642 ounces per short ton |       |
| 1 kilometer          |       | = 1  km    |       | =  0.62137 miles                 |       |
| 1 meter              |       | = 1  m     |       | =  3.28084 feet                  |       |
| 1 centimeter         |       | = 1  cm    |       | =  0.39370 inches                |       |
| 1 millimeter         |       | = 1  mm    |       | =  0.03937 inches                |       |
| 1 hectare            |       | = 1 ha     |       | = 2.47104 acres                  |       |

** **

**Metallurgicalplant:**   a processing plant used to treat ore andextract the contained gold.

**Metallurgicalrecovery factor:**   the proportion of metal in theore delivered to the mill, that is recovered by the metallurgical process orprocesses.

**Metallurgy:**   inthe context of this document, the science of extracting metals from ores andpreparing them for sale.

**Milldelivered tons:**   a quantity, expressed in tons,of ore delivered to the metallurgical plant.

**Milling/mill:**   thecomminution of the ore, although the term has come to cover the broad range ofmachinery inside the treatment plant where the gold is separated from the ore.

**Minecall factor:**   the ratio, expressed as apercentage, of the specific product recovered at the mill (plus residue) to thespecific product contained in an orebody calculated based on an operation’smeasuring and valuation methods.

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**Mineralization:**   thepresence of a target mineral in a mass of host rock.

**Netsmelter return:**   the volume of refined gold soldduring the relevant period multiplied by the average spot gold price and theaverage exchange rate for the period, less refining, transport and insurancecosts.

**Openpit:**   mining in which the ore is extracted from apit. The geometry of the pit may vary with the characteristics of the orebody.

**Ore:**   amixture of material containing minerals from which at least one of the mineralscan be mined and processed at an economic profit.

**Orebody:**   awell defined mass of material of sufficient mineral content to make extractioneconomically viable.

**Oregrade:**   the average amount of gold contained in aton of gold bearing ore expressed in grams per ton.

**Orereserves or reserves:**   that part of a mineraldeposit which could be economically and legally extracted or produced at thetime of the reserve determination.

**Ounce:**   oneTroy ounce, which equals 31.1035 grams.

**Overburden:**   thesoil and rock that must be removed in order to expose an ore deposit.

**Paylimit:**   thevalue at which the orebody can be mined without profit or loss, calculatedusing an appropriate gold price, production costs and recovery factors.

**Paytrend:**   anore zone which occurs in a specific direction and which has a concentration ofminerals that is above the average concentration of minerals in the orebody.

**Probablereserves:**   reserves for which quantity and gradeand/or quality are computed from information similar to that used for provenreserves, but the sites for inspection, sampling, and measurement are fartherapart or are otherwise less adequately spaced. The degree of assurance,although lower than that for proven reserves, is high enough to assumecontinuity between points of observation.

**Productionstockpile:**   the selective accumulation of lowgrade material which is actively managed as part of the current miningoperations.

**Prospect:**   toinvestigate a site with insufficient data available on mineralization todetermine if minerals are economically recoverable.

**Prospectingpermit or right:**   permission to explore an areafor minerals.

**Provenreserves:**   reserves for which: (1) quantityis computed from dimensions revealed in outcrops, trenches, workings or drillholes; grade and/or quality are computed from the results of detailed sampling;and (2) the sites for inspection, sampling and measurement are spaced soclosely and the geologic character is so well defined that size, shape, depthand mineral content of reserves are well-established.

**Reef:**   agold-bearing sedimentary horizon, normally a conglomerate band, that maycontain economic levels of gold.

**Refining:**   thefinal stage of metal production in which final impurities are removed from themolten metal by introducing air and fluxes. The impurities are removed as gasesor slag.

**Rehabilitation:**   theprocess of restoring mined land to a condition approximating its originalstate.

**Remnantpillar mining:**   the removal of blocks of groundpreviously left behind for various reasons during the normal course of mining.

**Rockburst:**   an event caused by seismicity whichresults in damage to underground workings and/or loss of life and equipment.

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**Rockdump:**   the historical accumulation of low gradematerial derived in the course of mining which is processed in order to takeadvantage of spare processing capacity.

**Runof Mine,****or RoM****:**   a loose term to describe ore of average grade.

**Sampling:**   takingsmall pieces of rock at intervals along exposed mineralization for assay (todetermine the mineral content).

**Scatteredmining method:**   conventional mining which isapplied in a non-systematic configuration.

**Seismicity:**   asudden movement within a given volume of rock that radiates detectable seismicwaves. The amplitude and frequency of seismic waves radiated from such a sourcedepend, in general, on the strength and state of stress of the rock, the sizeof the source of seismic radiation, and the magnitude and the rate at which therock moves during the fracturing process. Rock bursts, as defined above,involve seismicity.

**Semi-autogenousgrinding, or SAG, mill:**   a piece of machineryused to crush and grind ore which uses a mixture of steel balls and the oreitself to achieve comminution. The mill is shaped like a cylinder causing thegrinding media and the ore itself to impact upon the ore.

**Shaft:**   ashaft provides principal access to the underground workings for transportingpersonnel, equipment, supplies, ore and waste. A shaft is also used forventilation and as an auxiliary exit. It may be equipped with a surface hoistsystem that lowers and raises conveyances for men, materials and ore in theshaft. A shaft generally has more than one conveyancing compartment.

**Shortfall:**   theratio of actual reef tonnage hoisted compared to monthly reef tonnage broken.

**Slimes:**   thefiner fraction of tailings discharged from a processing plant after thevaluable minerals have been recovered.

**Slurry:**   afluid comprising fine solids suspended in a solution (generally watercontaining additives).

**Smelting:**   thermalprocessing whereby molten metal is liberated from beneficiated ore orconcentrate with impurities separating as lighter slag.

**Spotprice:**   the current price of a metal forimmediate delivery.

**Stockpile:**   astore of unprocessed ore.

**Stope:**   theunderground excavation within the orebody where the main gold production takesplace.

**Stripping:**   theprocess of removing overburden to mine ore.

**Strippingratio:**   the number of units of overburden whichmust be removed in order to mine one unit of ore.

**Sulfide:**   amineral characterized by the linkages of sulfur with a metal or semi-metal,such as pyrite (iron sulfide). Also a zone in which sulfide minerals occur.

**Tailings:**   finelyground rock from which valuable minerals have been extracted by milling.

**Tailingsdam/slimes dam:**   dams or dumps created fromtailings or slimes.

**Ton:**   oneton is equal to 1,000 kilograms (also known as a “metric” ton).

**Tonnage:**   quantitieswhere the ton or tonne is an appropriate unit of measure. Typically used tomeasure reserves of gold-bearing material in situ or quantities of ore andwaste material mined, transported or milled.

**Totalcash costs per ounce:**   a measure of the averagecost of producing an ounce of gold, calculated by dividing the total cash costsin a period by the total gold production over the same period. Total cash costs

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represent production costs as recorded in thestatement of operations less offsite (i.e., central) general and administrativeexpenses (including head office costs charged to the mines, central trainingexpenses, industry association fees, refinery charges and social developmentcosts) and rehabilitation costs, plus royalties and employee termination costs.In determining the total cash cost of different elements of the operations,production overheads are allocated pro rata.

**Totalproduction costs per ounce:**   a measure of theaverage cost of producing an ounce of gold, calculated by dividing the totalproduction costs in a period by the total gold production over the same period.Total production costs represent total cash costs, plus amortization,depreciation and rehabilitation costs.

**Upholebench and fill mining method:**   a mining methodwhere a section of ore is drilled from the level below the section to the levelabove the section, blasted and removed. The void is then filled with waste rockor tailings to form a working platform for removing the next section of ore.

**Upholeopen stoping mining method:**   a mining methodwhere a section of ore is drilled from the level below the section to the levelabove the section. Then, vertical “slices” of the section are blasted andremoved in succession. The void is not filled at the production stage, but maybe filled with waste rock or tailings once production has ceased.

**Waste:**   rockmined with an insufficient gold content to justify processing.

**Yield:**   theactual grade of ore realized after the mining and treatment process.

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**ITEM 4A:UNRESOLVED STAFF COMMENTS**

Not applicable.

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**ITEM 5:OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

*You should read the following discussion and analysistogether with Gold Fields’ consolidated financial statements including thenotes, appearing elsewhere in this annual report. Certain information containedin the discussion and analysis set forth below and elsewhere in this annualreport includes forward-looking statements that involve risks anduncertainties. See “Forward-looking Statements” and “Risk Factors” for adiscussion of important factors that could cause actual results to differmaterially from the results described in or implied by the forward-lookingstatements contained in this annual report.*

**Overview**

***General***

Gold Fields is a significant producer of gold andmajor holder of gold reserves in South Africa, Ghana, Australia, Venezuela andPeru. Gold Fields is primarily involved in underground and surface gold miningand related activities, including exploration, extraction, processing andsmelting. Gold Fields is currently the second largest gold producer in SouthAfrica, and one of the largest gold producers in the world, on the basis ofannual production. Gold Fields is also currently engaged in explorationactivities for platinum group metals primarily in Finland. In the year ended June 30,2006, Gold Fields produced 4.35 million ounces of gold, 4.07 million ounces ofwhich were attributable to Gold Fields, and the remainder of which wereattributable to minority shareholders in Gold Fields Ghana Limited, or GoldFields Ghana, Abosso Goldfields Limited, or Abosso, and Promotora Minera deGuayana (PMG) S.A., or PMG. Gold Fields reported attributable gold reserves of63.1 million ounces as of December 31, 2005.

The Gold Fields group holdings evolved through aseries of transactions, principally in 1998 and 1999. With effect from January 1,1998, a company formed on November 21, 1997 and referred to in thisdiscussion as Original Gold Fields acquired substantially all of the goldmining assets and interests previously held by Gold Fields of South AfricaLimited, or GFSA, Gencor Limited, New Wits Limited and certain othershareholders in the companies owning the assets and interests. These assets andinterests included all of the Beatrix, Oryx and Kloof mines, a 70.0% interestin the Tarkwa mine (which was increased to 71.1% through dilution of some ofthe other shareholders in 1999), a 54.2% interest in the St. Helena mineand a 37.3% interest in the Driefontein mine. The transaction involved apurchase of the assets and interests held by the three selling companies, aswell as offers to the minority shareholders of the three companies holding theBeatrix, Oryx and Kloof mines to acquire their shares in exchange for OriginalGold Fields shares. Original Gold Fields accounted for the transaction as apurchase. Because Original Gold Fields was formed as a subsidiary of GFSA, theassets acquired from GFSA were accounted for at the value they had been carriedat on GFSA’s books. The assets acquired from Gencor Limited, New WitsLimited and the minority shareholders were accounted for at fair value.

With legal effect from January 1, 1999, OriginalGold Fields was acquired by the company that is today Gold Fields. Foraccounting purposes, Original Gold Fields was fully consolidated with effectfrom June 1, 1999. Although for legal purposes Gold Fields acquiredOriginal Gold Fields, for accounting purposes, Original Gold Fields wasconsidered the acquirer because the Original Gold Fields shareholders obtainedthe majority interest in the enlarged company. As part of this transaction, theremaining interest in the Driefontein mine came into the Gold Fields group.

With effect from July 1,1999, Gold Fields acquired the remaining interest in the St. Helena mine andreorganized the group to simplify its holding structure. For further details ofthe evolution of the Gold Fields group structure, see “Information on theCompany—History.” Total gold production was 4.406 million ounces in fiscal 2004(4.158 million ounces of which were attributable to Gold Fields with theremainder attributable to minority shareholders in Gold Fields Ghana andAbosso). In fiscal 2005, total gold production increased to 4.488 millionounces (4.219 million ounces of which were attributable to Gold 

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Fields with the remainderattributable to minority shareholders in Gold Fields Ghana and Abosso). Thisincrease was mainly due to the increase in underground yields at the SouthAfrican operations, in line with the strategy to reduce marginal mining, andincreased production at Tarkwa, in Ghana, following commissioning of a new millin October 2004. In fiscal 2006 total gold production decreased to 4.351million ounces (4.074 million ounces of which were attributable to Gold Fieldswith the remainder attributable to minority shareholders in Gold Fields Ghana,Abosso and PMG). This decrease was mainly due to lower production at the SouthAfrican operations as a result of a strike in August 2005 and mininginflexibility at Kloof, offset in part by the addition of production from theChoco 10 mine in Venezuela from its acquisition on February 28, 2006.

*Driefontein MiningArea Disposal*

On September 18,2003, Gold Fields and AngloGold Limited, or AngloGold, announced that anagreement has been reached on the sale of a portion of the Driefontein miningarea to AngloGold for cash consideration of Rand 315 million. The transactionrelated to the mining area Block 1C11, which covers an area of 280,000 squaremeters and is located on the western boundary of the Driefontein mine. Themining area can be accessed from the adjacent TauTona mining operation ofAngloGold. The sale, which was conditional upon approval by the South AfricanCompetition Commission, was finalized in January 2004.

*MvelaphandaTransaction*

On March 8, 2004, the shareholders of Gold Fieldsapproved a series of transactions, referred to in this discussion as the MvelaTransaction, involving the acquisition by Mvelaphanda Resources Limited, orMvela Resources, of a 15% beneficial interest in the South African gold miningassets of Gold Fields for cash consideration of Rand 4,139 million.

The Mvela Transaction was preceded by an internalrestructuring of Gold Fields, whereby each of the Driefontein, Kloof andBeatrix mining operations, as well as certain ancillary assets and operations,were transferred to a new, wholly-owned subsidiary of Gold Fields, GFI MiningSouth Africa (Proprietary) Limited, or GFIMSA.

On November 26, 2003, Gold Fields, MvelaResources, Mvelaphanda Gold (Proprietary) Limited, or Mvela Gold, a whollyowned subsidiary of Mvela Resources, and GFIMSA entered into a covenantsagreement, or the Covenants Agreement, regulating their rights and obligationswith respect to GFIMSA. This agreement became effective following the advanceby Mvela Gold of the loan to GFIMSA described below, which is referred to inthis discussion as the Mvela Loan, and, among other things, provides for MvelaGold to nominate two members of GFIMSA’s board of directors and two members ofeach of GFIMSA’s Operations Committee and Transformation Committee, the latterof which has been established to monitor compliance with the mining charterpromulgated under the Mineral and Petroleum Resources Development Act 2002. See“Information on the Company—Regulatory and Environmental Matters—South Africa—MineralRights.” Under the Covenants Agreement, GFIMSA cannot dispose of any materialassets, enter into, cancel or alter any material transaction between GFIMSA andany related party or make any material amendment to its constitutive documentswithout the prior written consent of Mvela Gold. In addition, if Gold Fields orGFIMSA wants to increase the interest of black empowerment entities in GFIMSAor in any business or assets of GFIMSA, other than pursuant to an employeeshare incentive scheme, Gold Fields must offer to Mvela Gold the opportunity toincrease its interest in GFIMSA. By its terms, the Covenants Agreement remainsin force for so long as Gold Fields remains a shareholder in GFIMSA and MvelaGold holds its empowerment interest in or is a shareholder of GFIMSA and MvelaGold holds the right to subscribe for 15% of the share interest in GFIMSA,provided that it terminates if the shares of GFIMSA are listed on the JSELimited

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On December 11, 2003, Gold Fields, GFIMSA, andMvela Gold entered into a subscription and share exchange agreement, or theSubscription and Share Exchange Agreement, pursuant to which, upon repayment ofthe Mvela Loan, Mvela Gold must subscribe for shares equal to 15% of GFIMSA’soutstanding share capital, including the newly issued shares, for considerationof Rand 4,139 million. In addition, for a period of one year after thesubscription by Mvela Gold of the GFIMSA shares, each of Gold Fields and MvelaGold will be entitled to require the exchange of Mvela Gold’s GFIMSA shares forordinary shares of Gold Fields of an equivalent value based on an exchangeratio equal to 15% of a discounted cash flow calculation as applied to GFIMSA’soperations divided by the same calculation as applied to Gold Fields’operations, with certain adjustments. In the event that the parties do notagree on the number of Gold Fields ordinary shares to be issued to Mvela Goldin such exchange, then the exchange ratio will be determined by an independentmerchant bank or investment bank appointed by the parties. Mvela Gold has cededits rights under the Subscription and Share Exchange Agreement to secure itsobligations under certain mezzanine financing it incurred to fund, in part, theMvela Loan. Mvela Gold is entitled to dispose of the GFIMSA shares and any GoldFields ordinary shares it may hold only in accordance with the terms of apre-emptive rights agreement entered into by the parties whereby if Mvela Goldreceives an offer for, or otherwise wishes to sell, any GFIMSA or Gold Fieldsshares, it must first offer to sell them to Gold Fields. The Subscription andShare Exchange Agreement became unconditional following the advance of theMvela Loan to GFIMSA on March 17, 2004.

On December 11,2003, Gold Fields, GFIMSA, Mvela Gold, First Rand Bank Limited, Gold FieldsAustralia Pty Limited, or Gold Fields Australia, and Gold Fields GuernseyLimited (now Gold Fields Holdings Company (BVI) Limited, or Gold FieldsHoldings), entered into a loan agreement, or the Mvela Loan Agreement, pursuantto which Mvela Gold advanced a loan of Rand 4,139 million, or the Mvela Loan,to GFIMSA on March 17, 2004. GFIMSA applied the loan toward funding itsacquisition of Gold Fields’ South African mining operations and certainancillary assets and operations as part of the internal restructuring of GoldFields. The Mvela Loan has a term of five years, bears interest at a rate of10.57% per annum and is guaranteed by Gold Fields, Gold Fields Australia andGold Fields Holdings. GFIMSA may elect to repay the Mvela Loan, together withthe present value of the then outstanding interest payment obligations and thetax payable by Mvela Gold as a result of such repayment, at any time starting12 months after the Mvela Loan was advanced. While the Mvela Loan isoutstanding, Gold Fields and any of its material subsidiaries, which is definedas any subsidiary whose gross turnover in the most recently ended financialyear represents more than 5% of the consolidated gross turnover of Gold Fieldsand its subsidiaries, may not, subject to certain exceptions, (i) sell,lease, transfer or otherwise dispose of any assets, (ii) enter into anymerger or similar transaction, or (iii) encumber its assets. The MvelaLoan will become immediately due and payable upon the occurrence of any eventof default, which includes, among other things:

·       failureto make payments of interest or principal;

·       breachof the covenants in the agreement or of any material provision of the documentsrelating to the Mvelaphanda Transaction;

·       anyrepresentation or statement of GFIMSA or any guarantor in the documentsrelating to the Mvela Loan being incorrect or misleading in a material andadverse way;

·       defaultunder other indebtedness of Gold Fields or any of its material subsidiaries inexcess of Rand 75 million;

·       insolvencyof Gold Fields or any of its material subsidiaries;

·       failureof Gold Fields or any of its material subsidiaries to pay any judgment inexcess of Rand 75 million within five days of it becoming due;

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·       governmentexpropriation of Gold Fields or any of its material subsidiaries or theirrespective material assets;

·       achange in the business, condition or prospects of any guarantor or Gold Fieldsand its subsidiaries taken as a whole that is reasonably likely to have amaterial adverse effect on the ability of GFIMSA or of any guarantor to performits obligations or on the validity or enforceability of any document relatingto the Mvela Loan;

·       anylitigation, arbitration, administrative proceedings or governmental orregulatory investigations or proceedings against Gold Fields or any of itsmaterial subsidiaries that is reasonably likely to be adversely determined andif so determined, could reasonably be expected to have a material adverseeffect on the ability of GFIMSA or any guarantor to perform its obligations oron the validity or enforceability of any document relating to the Mvela Loan;

·       anychange in control of Gold Fields that occurs without the written consent of theagent of the providers of the commercial bank debt that funded, in part, theMvela Loan, or the Senior Agent, where the change in control could reasonablybe expected to have a material adverse effect on the ability of any guarantorto perform its obligations or on the validity or enforceability of any documentrelating to the Mvela Loan; and

·       GFIMSAceasing to be a wholly owned subsidiary of Gold Fields.

The Mvela Loan was funded by way of commercial bankdebt of approximately Rand 1,300 million and mezzanine finance of approximatelyRand 1,100 million, with the balance of approximately Rand 1,700 million beingraised by way of an international private placement of shares of MvelaResources. In connection with the mezzanine finance, Gold Fields subscribed forpreference shares in an amount of Rand 200 million in Micawber 325(Proprietary) Limited, or Micawber, a special purpose entity established by themezzanine lenders. Further, Gold Fields subscribed for Rand 100 million of theshares issued by Mvela Resources in the private placement. In addition,pursuant to an agreement entered into on February 13, 2004, or the PICAgreement, Gold Fields has effectively guaranteed a loan of Rand 150 millionmade by the PIC to Micawber, or the PIC Loan. Interest on the PIC Loan accruesat the rate of 14.25%, is compounded semi-annually and is payable in one lumpsum at the end of the term of the loan. Under the terms of the PIC Agreement,the PIC has the right to require Gold Fields to assume all its rights andobligations under the PIC Loan, together with its underlying security, whichconsists of the PIC’s proportionate share of Mvela Gold’s rights under theSubscription and Share Exchange Agreement and a guarantee of Rand 200 millionfrom Mvela Resources, at a price equal to the value of the principal andinterest of the PIC Loan, net of a guarantee fee equal to 3.75% per annum ofthe value of the principal and interest of the loan, if, at the time the PICLoan is due for repayment, Micawber does not repay the loan in full. Whether ornot the PIC requires Gold Fields to assume its rights and obligations under thePIC Loan, the PIC is obligated to pay the guarantee fee to Gold Fields on thedate on which the PIC Loan is repaid to the PIC. See “—Liquidity and CapitalResources—Cash Resources—Investing” and “—Credit Facilities—Mvela Loan.”

On February 13, 2004, the Mvela Loan Agreementwas amended, principally in order to add and clarify certain definitions.

On November 17, 2004, GFL Mining ServicesLimited, or GFLMSL, Gold Fields, Mvela Gold, Mvela Resources and GFIMSA enteredinto an agreement, referred to in this discussion as the Amendment Agreement,amending the existing agreements relating to the Mvelaphanda Transaction,including the Subscription and Share Exchange Agreement and the CovenantsAgreement. Pursuant to the Amendment Agreement, among other things, (i) GFIMSAagrees not to repay any debt owing, as at the date on which the Mvela Loan wasadvanced, to Gold Fields or any subsidiary of Gold Fields that is not asubsidiary of GFIMSA prior to the time Mvela Gold may exchange its shares inGFIMSA for Gold Fields ordinary 

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shares, pursuant to the Subscription and ShareExchange Agreement, (ii) GFIMSA must utilize 50% of its free cash flow topay certain intra-group indebtedness and (iii) Mvela Gold will be entitledto not less than 45,000,000 or not more than 55,000,000 Gold Fields ordinaryshares in the event that GFIMSA shares are exchanged for Gold Fields sharespursuant to the Subscription and Share Exchange Agreement. These minimum andmaximum numbers of ordinary shares are subject to adjustment to take account ofchanges to Gold Fields’ capital structure and certain corporate activities ofGold Fields. The amendments were approved by the Senior Agent and by thelenders who provided the commercial bank debt and mezzanine finance to MvelaGold to fund, in part, the Mvela Loan.

Mvela Holdings (Proprietary)Limited, or Mvela Holdings, the parent company of Mvela Resources, recentlyentered into various agreements in terms of which the status quo regarding theshareholding in Mvela Resources as of the date of the Mvelaphanda Transactionwas restored by Mvela Holdings once again having a direct interest in theissued share capital of Mvela Resources. On July 17, 2006, Gold Fields,Mvela Gold, Mvela Resources, Mvela Holdings, GFIMSA, GFLMSL and others enteredinto an agreement further amending the existing agreements relating to theMvelaphanda Transaction, including, among others, the Covenants Agreement andthe Sponsor Support, Guarantee and Retention Agreement. In accordance with therevised agreements, Mvela Holdings undertook to remain an HDSA company, toretain beneficial ownership of no less than 26% of the issued equity sharecapital of Mvela Resources, to have board control of Mvela Resources (togetherwith other HDSAs) and to retain management control of Mvela Resources pursuantto a written management agreement.

*Acquisition ofChoco 10*

In a transaction announced on November 21, 2005,and which became effective on February 28, 2006, Gold Fields acquired a95% interest in the Choco 10 gold mine and surrounding exploration tenements inthe El Callao district of Guayana, Venezuela, through the purchase of BolivarGold Corp., or Bolivar, for total cash consideration of approximately US$330million.

Gold Fields owns itsinterest in the Choco 10 mine through its 95% holding in PMG. PMG is a jointventure between Promotora Minera de Venezuela, S.A., or Promiven (awholly-owned subsidiary of Gold Fields which it acquired from Bolivar), and asubsidiary of Corporacion Venezolana de Guayana, or CVG, a governmentaldevelopment entity for the Guayana region. Gold Fields assumed operation of PMGon March 1, 2006. See “Information on the Company—Gold Fields’ MiningOperations—Venezuela Operation.”

*Acquisition of LaCima*

On January 11, 2006,Gold Fields acquired an 80.72% economic and 92% voting interest in SociedadMinera La Cima S.A., now known as Gold Fields La Cima S.A., or La Cima, for atotal consideration of US$40.5 million. La Cima is the holding company for theCerro Corona Project. See “Information on the Company—Recent Developments—CerroCorona Project” and “—Recent Developments—Cerro Corona Facility’’.

*Acquisition ofSouth Deep*

On September 11, 2006,Gold Fields entered into an agreement with Barrick Gold Corporation, orBarrick, and PDG Aureate Limited, a subsidiary of Barrick, to acquire, for atotal consideration of US$1.525 billion, the entire issued share capital ofBarrick Gold South Africa (Proprietary) Limited, or BGSA, which holds a 50%interest in the Barrick Gold—Western Areas Joint Venture, an unincorporated entity in whichBarrick and Western Areas Limited, or Western Areas, each hold an interest of50%. The Barrick Gold—WesternAreas Joint Venture owns the developing South Deep gold mine, or South Deep,located in the Witwatersrand basin near Johannesburg. In conjunction with GoldFields’ acquisition of 

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Barrick’s stake in theBarrick Gold—WesternAreas Joint Venture, Gold Fields is making an offer (referred to herein as theOffer) to acquire the entire issued share capital of Western Areas not alreadyowned by Gold Fields. Under the Offer, which Gold Fields commenced on October30, 2006, Western Areas shareholders will receive 35 Gold Fields shares forevery 100 Western Areas shares validly tendered into the Offer. In support ofthe Offer, Gold Fields, JCI Limited, or JCI, and certain subsidiaries of JCIentered into an agreement on September 11, 2006, pursuant to which, on November16, 2006, Gold Fields acquired 27 million Western Areas shares from one of thesubsidiaries in exchange for the issue to JCI of 9,450,000 Gold Fields shares.In addition, pursuant to the agreement with effect from November 14, 2006, the JCIsubsidiaries granted Gold Fields call options, and Gold Fields granted thesubsidiaries put options, over a further 9.96 million Western Areas shares. See“Information on the Company—Recent Developments—Acquisition of South Deep” and “—RecentDevelopments—Acquisition of South Deep”.

**Strategy**

***General***

Gold Fields is asignificant producer of gold and major holder of gold reserves in South Africa,Ghana and Australia. Gold Fields also has recently acquired an operating minein Venezuela and has reported gold and copper reserves at the Cerro CoronaProject, a development project in Peru. The gold industry has historically beenhighly fragmented and a trend has been underway to consolidate the industrythrough mergers and acquisitions.

***Global Context***

Gold Fields’ strategy was developed in the context ofa global market characterized by an extended period of low gold prices, reducedglobal expenditure on gold exploration and increasing industry consolidation.This strategy has evolved over time, but despite the recent increase in theprice of gold, Gold Fields has maintained a strategy of general caution withrespect to financial commitments while maintaining full exposure to the effectsof the gold price.

Generally, Gold Fields’ strategy consists of thefollowing key elements:

·       Operationalexcellence which is aimed at improving returns through the optimization ofexisting assets. This is achieved in the first instance through improvingproductivity. Secondly, it also implies the reduction of costs through costmanagement initiatives and growing assets through inward investment;

·       GrowingGold Fields by diversifying geographical, technical and product risk throughacquiring and developing additional long-life assets. Starting in fiscal 2004,Gold Fields set a goal of achieving an additional 1.5 million ounces of annualgold production by the end of calendar 2009;

·       Securing the future of GoldFields by earning and maintaining what Gold Fields calls its “license tooperate” in those countries and regions in which it operates and upholdingstrong principles of corporate governance. Gold Fields views its ability toconduct its operations as involving a reciprocal commitment from Gold Fields tothe communities where it is located to deal with issues related to sustainabledevelopment.

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***Operational Excellence***

Managementbelieves that improved profitability at existing operations can be achieved byincreasing mining rates, increasing mining quality and reducing costs.Management believes that significant opportunity exists to do this, specificallythrough:

·       Increasingdevelopment rates at the South African operations to provide for ore reserveand mining flexibility

·       Increasingquality mining through increasing volumes mined above the paylimit and/orcut-offs and ensuring that dilution is minimized. Dilution can be minimizedthrough programs aimed at reducing the quantities of waste mined in theunderground and open pits. Quality can be improved through ongoing gradecontrol and optimizing mine call factors;

·       Increasingproductivity through skills development programs, aligning incentive schemeswith desired outcomes, removing bottlenecks, improving ventilation and loweringtemperatures at the South African operations, rationalization of infrastructureand plant modernizations;

·       Investingin cost reduction through replacement of older equipment with modern and moreefficient equipment;

·       Reducingcosts through improving controls over the consumption of materials used on themines, implementing improved procurement practices and exploring opportunitiesfor global and regional supply contracts; and

·       Improving efficiencies and controls in areas such as peoplemanagement, planned maintenance, transport and medical facilities.

***Acquisitions and Exploration***

Gold Fields is one of the largest producersof gold in the world based on annual gold production. Gold Fields’ corporatedevelopment mandate is to grow as a world leader in developing and operatinglow-cost, long life precious metal mines. Gold Fields is sensitive to the factthat increased competition for acquisitions and higher gold prices are pushingasset prices to levels that threaten returns. The impact on returns has beenexacerbated by higher input costs, particularly as significant increases inbase metal prices has led to increased mining of base metals, which uses someof the same inputs as gold, and therefore increased overall demand for thoseproducts.

For acquisitions of gold assets orcompanies outside South Africa, Gold Fields is at somewhat of a disadvantage tocertain of its competitors, but this also has offsetting strengths. First,South African exchange control regulations limit Gold Fields’ ability toprovide guarantees or borrow outside South Africa without express approvalfrom the South African Reserve Bank, or the SARB. However, in his speech toParliament towards at the end of October 2004, the Minister of Financeoutlined the South African Treasury’s medium term budget policy statementand repeated that it was the government’s eventual goal to replace allremaining exchange controls with prudential benchmarks. He also announced theabolition of exchange control limits on new outward foreign direct investmentsby South African corporations and the lifting of their obligation to repatriateforeign dividends. Second, shares of South African companies tend to beviewed as less attractive acquisition currency than shares of non-South Africancompanies, despite the relaxation of exchange controls. On the other hand, GoldFields has a strong balance sheet and low debt-to-equity ratio that diminishesthe equity pricing disadvantage, and also has a skilled and effective corporateevaluation and acquisition team, and a sound track record in projectdevelopment.

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Gold Fieldsalso maintains an active global exploration effort for gold and PGMs throughexploration offices worldwide and an exploration philosophy that managementbelieves is well focused and cost efficient.

***Hedging***

Generally, Gold Fields does not enter intoforward sales, derivatives or other hedging arrangements to establish a pricein advance for future gold production. Gold Fields believes that investors inGold Fields’ shares seek an unlimited exposure to movements in the U.S. dollargold price and the resulting effect on Gold Fields’ earnings.

However,commodity hedges are sometimes undertaken on a project specific basis asfollows: 

·       to protectcash flows at times of significant expenditure; 

·       forspecific debt servicing requirements; and 

·       tosafeguard the viability of higher cost operations.

Gold Fields mayfrom time to time establish currency and/or interest rate financial instrumentsto protect underlying cash flows or to take advantage of potential favorablecurrency movements. In addition, in connection with the acquisition of WesternAreas, Gold Fields will be acquiring the Western Areas hedge book. See“Information on the Company—Recent Developments—Acquisition of South Deep.’’

**Revenues**

Substantially all of Gold Fields’ revenues are derived from the sale ofgold. As a result, Gold Fields’ revenues are directly related to the price ofgold. Historically, the price of gold has fluctuated widely. The gold price isaffected by numerous factors over which Gold Fields does not have control. See “RiskFactors—Changes in the market price for gold, which in the past has fluctuatedwidely, affect the profitability of Gold Fields’ operations, and the cash flowsgenerated by those operations.” The volatility of gold prices is illustrated inthe following table, which shows the annual high, low and average of the Londonafternoon fixing price of gold in U.S. dollars for the past 12 calendar yearsand to date in calendar year 2006: 

| ** **                            | ** ** | **Price per ounce** | ** ** |
|---------------------------------------|------------|-------------------------------|------------|
| ** **                            | ** ** | **High**                      | ** ** | **Low** | ** ** | **Average** | ** ** |
| ** **                            | ** ** | **($)**                       | ** ** |
| 1994                                  |       |                          | 396        |   |   | 370 |   |   | 384 |   |   |
| 1995                                  |       |                          | 396        |   |   | 372 |   |   | 384 |   |   |
| 1996                                  |       |                          | 415        |   |   | 367 |   |   | 388 |   |   |
| 1997                                  |       |                          | 367        |   |   | 283 |   |   | 331 |   |   |
| 1998                                  |       |                          | 313        |   |   | 273 |   |   | 294 |   |   |
| 1999                                  |       |                          | 326        |   |   | 253 |   |   | 279 |   |   |
| 2000                                  |       |                          | 313        |   |   | 264 |   |   | 282 |   |   |
| 2001                                  |       |                          | 293        |   |   | 256 |   |   | 270 |   |   |
| 2002                                  |       |                          | 349        |   |   | 278 |   |   | 310 |   |   |
| 2003                                  |       |                          | 416        |   |   | 320 |   |   | 363 |   |   |
| 2004                                  |       |                          | 454        |   |   | 375 |   |   | 409 |   |   |
| 2005                                  |       |                          | 537        |   |   | 411 |   |   | 445 |   |   |
| 2006 (through  October 31, 2006) |       |                          | 725        |   |   | 513 |   |   | 599 |   |   |

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Source: Bloomberg

On November 15, 2006, the Londonafternoon fixing price of gold was $617.75 per ounce.

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As a general rule, Gold Fields sells thegold it produces at market prices to obtain the maximum benefit from prevailinggold prices and does not enter into hedging arrangements such as forward salesor derivatives which establish a price in advance for the sale of its futuregold production. However, hedges are sometimes undertaken on a project specificbasis as follows: to protect cashflows at times of significant expenditure; forspecific debt servicing requirements; and to safeguard the viability of highercost operations. See “Quantitative and Qualitative Disclosure About Market Risk—CommodityPrice Sensitivity—Commodity Hedging Policy.” Significant changes in the priceof gold over a sustained period of time may lead Gold Fields to increase ordecrease its production in the near-term, which could have a material impact onGold Fields’ revenues.

Gold Fields’realized gold price The following table sets out the average, the high and thelow London afternoon fixing price of gold and Gold Fields’ average U.S. dollarrealized gold price during the past three fiscal years: 

| ** **                                        | ** ** | **Year ended June 30** | ** ** |
|---------------------------------------------------|------------|---------------------------------------|------------|
| ** **                                        | ** ** | **2004**                              | ** ** | **2005** | ** ** | **2006** | ** ** |
| ** **                                        | ** ** | **($/oz)**                            | ** ** |
| Average                                           |       |                                  | 396        |   |   |   | 422 |   |   |   | 525 |   |   |
| High                                              |       |                                  | 427        |   |   |   | 454 |   |   |   | 725 |   |   |
| Low                                               |       |                                  | 342        |   |   |   | 387 |   |   |   | 418 |   |   |
| Gold Fields’  average realized gold price(1) |       |                                  | 387        |   |   |   | 422 |   |   |   | 524 |   |   |

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Note:

(1)           Gold Fields’ average realized gold price may differfrom the average gold price due to the timing of its sales of gold within eachyear.

**Costs**

Over the last three fiscal years, GoldFields’ total cash costs have typically made up approximately 80% of totalcosts and consist primarily of labor and, where applicable, contractor costs,and consumable stores, which include explosives, timber and other consumables,including diesel fuel and other petroleum products.

Gold Fields’ South African operations arelabor intensive due to the use of deep level underground mining methods. As aresult, over the last three fiscal years labor has represented on averageapproximately 49% of total cash costs at the South African operations. At theSouth African operations, power and water made up on average approximately 11%of total cash costs over the last three fiscal years. At the Ghana operations,mining operations at Damang are conducted by an outside contractor, whilestarting in fiscal 2005, Tarkwa began engaging in owner mining, havingpurchased its own mining equipment which was fully commissioned by September2004 and therefore significantly reducing its use of outside contractors.Contractor costs represented on average 33% of total cash costs at Tarkwa overthe last three fiscal years, and 26% of total cash costs during fiscal 2006.Over the last three fiscal years contractor costs represented on average 45% oftotal cash costs at Damang. Direct labor costs represent on average a further11% of total cash costs at Tarkwa and 11% in fiscal 2006. Over the last threefiscal years direct labor costs represented on average 8% at Damang. At theAustralian operations, mining operations are conducted by outside contractors.Over the last three fiscal years, total contractor costs represented on average37% at Agnew and 48% at St. Ives of total cash costs and direct labor costsrepresented on average a further 16% at Agnew and 9% at St. Ives of total cashcosts. For open-pit operations, such as those at the Ghana and Australiaoperations, cash costs tend to vary over the life of the open pit. Initially,cash costs are relatively high because the proportion of waste rock to ore, orstripping ratio, is higher when operations first commence. As an open pitevolves, the stripping ratio and cash cost per ounce tend to decrease.Stripping ratios can however increase over the life of an operation. GoldFields’ operations in Ghana consume large 

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quantities of diesel fuel for the runningof its mining fleet. The cost of diesel fuel is directly related to the oilprice and any movement in the oil price will have an impact on the cost ofdiesel fuel and therefore the cost of running the mining fleet. Over the lastthree fiscal years, fuel costs have represented approximately 12% of total cashcosts at the Ghana operations. Fuel use is proportionately higher at the Ghanaoperations than at the South African or Australian operations because open pitmining in general requires more fuel usage than underground mining and becauseof the configuration of the Ghana operations, including the scale of certain ofthe open pits and the distances between the pits and the plants. In order to provide some protection against futurerises in oil prices, and therefore in diesel fuel prices, on July 3, 2006, GoldFields Ghana and Abosso purchased an Asian-style International PetroleumExchange, or IPE, Gasoil call option for one year, expiring June 30, 2007, fora total of 58.8 million liters at a strike price of US$0.5716 per liter.Approximately two thirds of this hedge is for Tarkwa and one third is forDamang. See “Quantitative and Qualitative Disclosures About MarketRisk—Commodity Price Sensitivity,” “—Commodity Hedging Policy—Oil,” “—CommodityHedging Experience—Oil” and “—Commodity Price Contract Position—Oil.”

The remainderof Gold Fields’ total costs consist primarily of amortization and depreciation,exploration costs and selling, administration and general and corporatecharges.

**Incomeand Mining Taxes**

***South Africa***

Gold Fields pays taxes on its taxableincome generated by its mining and non-mining tax entities. Under South Africanlaw, gold mining companies and non-gold mining companies are taxed at differentrates. For tax purposes, GFIMSA is considered a gold mining company whereasGold Fields itself and its other South African subsidiaries are non-gold miningcompanies. All non-gold mining companies pay tax at the statutory rate of 29%which was reduced from 30% for tax years ending on or after April 1, 2005,whereas gold mining companies pay tax at a rate which is calculated in terms ofa formula which is explained below. In addition, non-gold mining companies areliable for Secondary Tax on Companies, or STC, which is currently charged at arate o f 12.5%.

Gold mining companies are subject to tax atdifferent rates on their mining and non-mining income. Mining Income is taxedon a formula basis, in terms of which the tax rate rises as the ratio oftaxable income to gross mining revenue increases. The formula takes the form ofy = a-ab/x, where y = the tax rate, a = the marginal tax rate, b = the quantumof revenue that is free of tax (which is a form of depletion allowance and iscalculated as a percentage of mining revenue, with the currently applicablerate being effectively 5%) and x = the ratio of profit to revenue (expressed asa percentage).

Gold mining companies can elect to beexempt from STC and different formulae are used to calculate tax on miningrevenue depending on whether an election has been made. If the election hasbeen made, the current relevant values are a = 45 and b = 225. If the electionhas not been made, the current relevant values are a = 35 and b = 175. Thesevalues have been effective for tax years ending on or after April 1, 2005.The previous relevant values were a = 46 and b = 230 where the election hadbeen made and a = 37 and b = 185 where the election had not been made. For taxyears ending on or after April 1, 2005, the rate applicable to non-miningincome for gold mining companies who have made the election is 37%, whereas therate applicable gold mining companies who have not made the election is 29%.The previous rates were 38% and 30%, respectively.

As a result ofthe consolidation of the South African assets into GFIMSA in 2004, the minesare no longer separate tax entities but are treated as a single tax entity.However, unredeemed capital expenditure is still ring fenced between thedivisions of GFIMSA, so that capital expenditure at one mine cannot be used toreduce taxable income from another mine. GFIMSA has elected to be exempt fromSTC. However, Gold Fields itself, as a holding company not conducting any goldmining operations, as well as its other non- 

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mining SouthAfrican subsidiaries are not eligible to be exempt from STC. To the extentGold Fields receives dividends from GFIMSA, such received dividends areoffset against the amount of dividends paid by Gold Fields for purposes ofcalculating the net amount subject to the 12.5% STC.

***Ghana***

Ghanaian resident companies are subject totax on the basis of income derived from, accruing in or brought into Ghana. Thestandard corporate income tax rate is currently 25% having been reduced from 28%with effect from January 1, 2006. As a result, an average rate of 26.5%was applied to fiscal 2006 taxable income. The Tarkwa and Damang operations arealso subject to a 3% gold royalty, calculated on the basis of a formula whichcame into effect from July 4, 1986, because the mineral rights are ownedby the state. This royalty is included in Gold Fields’ income and mining taxbenefit/(expense) line item in Gold Fields’ consolidated statements ofoperations. A reconstruction and development levy of 2.5% on operating profitthat was introduced on January 1, 2001 was abolished from January 1,2006.

Taxdepreciation of capital equipment operates under a capital allowance regime.The capital allowances consist of an initial allowance of 80% of the cost ofthe asset and the balance is depreciated at a rate of 50% per year on adeclining balance basis. For the purposes of computing depreciation for theyear following its acquisition, 5% of the cost of the asset is included in thebalance. Under the project development agreement entered into between theGhanaian government and Gold Fields Ghana and the deed of warranty entered intobetween the Ghanaian government and Abosso, the government has agreed that nowithholding tax shall be payable on any dividend or capital repayment declaredby Gold Fields Ghana or Abosso which is due and payable to any shareholder notnormally resident in Ghana. Gold Fields Ghana does not currently incur taxliabilities due to capital allowances carried forward.

***Australia***

Generally, Australia will impose tax on theworldwide income (including capital gains) of all of Gold Fields’Australian incorporated and tax resident entities. The current income tax ratefor companies is 30%. Exploration costs are deductible in full as incurred andother capital expenditure is deductible over the lives of the assets acquired.In addition, other expenditures, such as export market development, mineclosure costs and the defense of native title claims, may be deducted fromincome. The St. Ives and Agnew operations are also subject to a 2.5% goldroyalty, which came into effect from July 1, 1998, because the mineralrights are owned by the state. This royalty is included in Gold Fields’ incomeand mining tax benefit/(expense) line item in Gold Fields’ consolidatedstatements of operations.

Witheffect from July 1, 2001 the Australian legislature introduced a UniformCapital Allowance, which allows tax deductions for:

·       depreciationattributable to assets; and

·       certainother capital expenditures.

Under current Australian tax law, certaingrouping concessions are available to companies with the same ultimate headentities. These concessions include the ability to group losses and obtain capitalgains tax roll over relief from the transfer of assets. Gold Fields’subsidiaries in Australia will therefore also qualify to transfer losses fromone entity to another in the event that a loss is made in any one entity and aprofit is generated in another.

The Australian tax legislation makesprovision for companies that consolidate for tax purposes to recalculate theirtax values based on a market value calculation. This gross up calculation wasperformed in fiscal 2005 by Gold Fields’ subsidiaries in Australia and GoldFields recorded a net gross up of $26.8 million. This gross-up has beenincluded in the income and mining tax benefit for fiscal 2005.

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Withholding taxis payable on dividends, interest and royalties paid by Australian residents tonon-residents. In the case of dividend payments to non-residents, withholdingtax at a rate of 30% will apply. However, where the recipient of the dividendis a resident of a country with which Australia has concluded a double taxationagreement, the rate of withholding tax is generally limited to 15% (or 10%where the dividend is paid to a company’s parent company). Where dividends arepaid out of profits that have been subject to Australian corporate tax there isno withholding tax, regardless of whether a double taxation agreement is inplace.

**Venezuela**

Venezuela taxes resident individuals anddomiciled corporations on their worldwide income. Taxable income is thereforedefined to include territorial income, income resulting from activitiesperformed or deemed to be performed outside of Venezuela, assets located ordeemed to be located outside of Venezuela, and income resulting from inflationadjustment. Conversely, certain extraterritorial expenses are allowed asdeductible expenses.

While the Venezuelan corporate tax rate isdetermined with reference to a progressive tax scale, in practice, theeffective corporate tax rate applicable to foreign and domestic corporations is34%.

Tax losses may be carried forward bycorporations for a period of three tax years.

Venezuelan corporate income tax lawprovides for inflation adjustment in terms of which Venezuelan corporations arerequired to adjust their non-monetary assets and liabilities (including debt inforeign currency) for inflation on a yearly basis. Inflation adjustmentsusually generate phantom losses which affect taxable income. These types ofadjustments also generate differences between the net taxable income andaccounting income and which has an effect on tax on dividends, as discussedbelow.

Venezuela levies withholding tax oninterest payments on loans granted to Venezuelan companies to be used inVenezuela at a rate of 5% if the beneficiary is a Venezuelan domiciled companyand according to a progressive tax scale up to 34% if the beneficiary is a non-Venezuelandomiciled company. Notwithstanding the foregoing, withholding tax on interestderived from loans granted by foreign banks or financial institutions notdomiciled in Venezuela is only 4.95%.

Dividends paid by Venezuelan companies aretaxable at 34% to the extent that they arise from profits that have not beensubject to tax at the level of the declaring company. The tax is calculated onthat portion of the dividends that is paid out of corporate profits in excessof net taxable income. Tax on dividends is withheld at source by the declaringcompany.

Withholding tax is also levied ontechnical/technological assistance at an effective rate of 10.2% (technicalassistance) or 17% (technological services).

Payments made to foreign parties protectedby double tax treaties concluded with Venezuela will be subject to the relevantrelief on the above withholding taxes made from Venezuela as applicable.

Capital allowances on tangible andnon-tangible goods situated in Venezuela are generally allowed to be writtenoff for income tax purposes. The applicable depreciation method, write-offperiods and other relevant factors vary from asset to asset. Accelerateddepreciation on capital assets is possible with notification to the local taxauthorities.

Taxpayers engaged in mining activities mayamortize capitalized costs relating to the acquisition of mining assets,exploration costs, geological surveys and development costs once the miningproduction of a particular concession commences.

Capitalized mining exploration expenses maygenerally be written off on a straight-line basis over five years once miningproduction has commenced.

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Extracted goldfrom the Choco 10 mine is subject to an exploitation tax of 3%, calculated onthe average commercial value of the gold in the city of Caracas for the monthin which the gold was produced by PMG, as determined by the Ministry of Basic Industriesand Mines.

***Exchange Rates***

Gold Fields’ South African revenues andcosts are very sensitive to the Rand/U.S. dollar exchange rate because revenuesare generated using a gold price denominated in U.S. dollars, while the costsof the South African operations are incurred principally in Rand. Depreciationof the Rand against the U.S. dollar reduces Gold Fields’ average costswhen they are translated into U.S. dollars, thereby increasing the operatingmargin of the South African operations. Conversely, appreciation of the Randresults in South African operating costs being translated into U.S. dollars ata lower Rand/U.S. dollar exchange rate, resulting in lower operating margins.The impact on profitability of any change in the value of the Rand against theU.S. dollar can be substantial. Furthermore, the exchange rates obtained whenconverting U.S. dollars to Rand are set by foreign exchange markets, over whichGold Fields has no control. For more information regarding fluctuations in thevalue of the Rand against the U.S. dollar, see “Key Information—Exchange Rates.”With respect to its operations in Ghana, a substantial portion of Gold Fields’operating costs (including wages) are either directly incurred in U.S. dollarsor are determined according to a formula by which costs are indexed to the U.S.dollar. Accordingly, fluctuations in the Cedi do not materially impactoperating results for the Ghana operation.

With respect to the Australian operations,Gold Fields expects that the effect of fluctuations in the value of theAustralian dollar against the U.S. dollar will be similar to that for the Rand,with weakness in the Australian dollar resulting in improved earnings for GoldFields and strength in the Australian dollar producing the opposite result.Gold Fields agreed with the lenders providing the loans for the acquisition ofSt. Ives and Agnew to manage its exposure to fluctuations in the value of theAustralian dollar against the U.S. dollar by entering into financialinstruments that fix the exchange rates for a portion of the expected futurerevenues from the operations. These financial instruments were closed out on January 7,2004. However, in order for the Group to participate in any future Australiandollar appreciation, a strip of quarterly maturing Australian dollar/U.S.dollar call options were purchased of which the value dates and amounts matchedthose of the original structure. See “Quantitative and Qualitative DisclosuresAbout Market Risk—Foreign Currency Hedging Experience—St. Ives and AgnewAustralian Dollar Instruments.” Gold Fields accounts for these financialinstruments on a mark-to-market basis, using exchange rates prevailing at theend of the relevant accounting period. See “Quantitative and QualitativeDisclosures About Market Risk—Foreign Currency Hedging Experience—ForeignCurrency Sensitivity Analysis—St. Ives and Agnew Dollar Instruments.”

In Venezuela asystem of exchange controls is in place and the Central Bank sets a fixedexchange rate for the Bolivar against the U.S. dollar. The rate is currentlyVEB 2,150 per $1.00 although that rate may be adjusted from time to time, andtypically the Bolivar has been devalued against the U.S. dollar. To the extentthe Bolivar depreciates against the U.S. dollar, Gold Fields should obtainhigher earnings to the extent it sells its gold produced in Venezuela outsideVenezuela. However, Gold Fields is obligated to repatriate to Venezuela andconvert to Bolivars at the official exchange rate all amounts generated fromexports. See “Information on the Company—Regulatory and Environmental Matters—Venezuela—ExchangeControls.”

**Inflation**

It is possiblethat a period of significant inflation in South Africa could adversely affectGold Fields’ results and financial condition. However, because the majority ofGold Fields’ costs at the South African operations are in Rand while itsrevenues from gold sales are in U.S. dollars, the extent to which the Randdevalues against the U.S. dollar will offset the impact of South Africaninflation. In Ghana, Gold Fields’ 

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operations arenot significantly impacted by Ghanaian inflation because a substantial portionof Gold Fields’ costs are either incurred directly in U.S. dollars or aredetermined according to a formula by which U.S. dollar amounts are convertedinto Cedi. Gold Fields expects that the impact of Australian inflation will besimilar to that of South Africa as will Venezuelan inflation.

**SouthAfrican, Ghanaian and Venezuelan Economic and Political Environment**

Gold Fields is a South African company anda substantial portion of its operations, based on gold production, are in SouthAfrica. As a result, Gold Fields is subject to various economic, fiscal,monetary and political policies and factors that generally affect South Africancompanies. See “Risk Factors—Economic or political instability in the countriesor regions where Gold Fields operates may have an adverse effect on Gold Fields’operations and profits.”

South African companies, including GoldFields, are subject to exchange control restrictions which require companies torepatriate some or all of its offshore profits. While exchange controls havebeen relaxed in recent years, South African companies remain subject to restrictionson their ability to deploy capital outside of the Southern African CommonMonetary Area. In particular, in his speech to Parliament towards at the end ofOctober 2004, the Minister of Finance outlined the South African Treasury’smedium term budget policy statement and repeated that it was the government’seventual goal to replace all remaining exchange controls with prudentialbenchmarks. The Department of Finance has reaffirmed its continuing intentionto further liberalize the exchange control regulations. An exchange controlcircular from the South African Reserve Bank detailing and regulating the aboverelaxations is expected shortly. See “Information on the Company—Regulatory andEnvironmental Matters—South Africa—Exchange Controls.”

Gold Fields also has significant operationsin Ghana and is therefore subject to various economic, fiscal, monetary andpolitical policies and factors that affect companies operating in Ghana. See “RiskFactors—Economic or political instability in the countires or regions whereGold Fields operates may have an adverse effect on Gold Fields’ operations andprofits.” In addition, pursuant to an agreement which it has entered into withthe Ghanaian government with respect to the Tarkwa mine, Gold Fields isrequired to repatriate at least 20% of the revenues derived from the Tarkwamine to Ghana and either use such amounts in Ghana or maintain them in aGhanaian bank account. Abosso is currently obligated to repatriate 25% of itsrevenue to Ghana, although the level of repatriation under the deed of warrantybetween Abosso and the government of Ghana is subject to renegotiation everytwo years. See “Information on the Company—Regulatory and Environmental Matters—Ghana—MineralRights.” Although it has been more than two years since the last set ofnegotiations with the Bank of Ghana regarding the Damang mine’s level ofrepatriation, the next set of negotiations has not been scheduled pending theexecution of a new development agreement with the government of Ghana. GoldFields currently repatriates approximately 40% of revenues from the Ghanaoperation to Ghana. While management has no reason to believe that therepatriation level will increase as a result of the next set of negotiations,there is no agreed ceiling on the repatriation level, and it could beincreased. Any increase could adversely affect Gold Fields’ ability to use thecash flow from the Damang mine outside Ghana, including to fund working costsand capital expenditures at other operations, to provide funds for acquisitionsand to repay principal and interest on indebtedness.

Gold Fields’operations in Venezuela mean it is also subject to various economic, fiscal,monetary and political policies and factors that affect companies operating inVenezuela. See “Risk Factors—Economic or political instability in the countiresor regions where Gold Fields operates may have an adverse effect on Gold Fields’operations and profits.” In addition, companies operating in Venezuela,including Gold Fields, are subject to exchange control restrictions whichimpose restrictions and conditions on their ability to purchase foreigncurrency and require them, to convert foreign currency derived from the exportof goods, services or technologies to Bolivars via the Venezuelan Central Bankat the official exchange rate. 

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See “Informationon the Company—Regulatory and Environmental Matters—Venezuela—ExchangeControls.”

**Capitalizationof Costs Relating to Ore Reserve Development at the South African Operations**

On July 1, 2006, Gold Fields changedits accounting policy on ore reserve development, or ORD, costs. As from July 1,2006 these costs will be capitalized and amortized over the period Gold Fieldsexpects to consume the economic benefits relating to the relevant ORD.Previously, ORD costs were expensed. As part of this change in accountingpolicy, Gold Fields increased property, plant and equipment and deferred taxliabilities.

ORD is alloff-reef development that allows access to reserves that are economicallyrecoverable in the future. ORD includes, but is not limited to, crosscuts,footwalls, return airways and box holes. The cost of developing access ways andother infrastructure creates for Gold Fields probable economic benefits that,in combination with other assets at its mining operations, are expected tocontribute directly to Gold Fields’ future cash inflows. Gold Fields believesthe change in accounting policy will allow for improved financial reporting andwill align Gold Fields’ policy with those of its global industry peers.

**CriticalAccounting Policies and Estimates**

Gold Fields’ significant accountingpolicies are more fully described in note 2 to its audited consolidatedfinancial statements included elsewhere in this annual report. Some of GoldFields’ accounting policies require the application of significant judgment andestimates by management that can affect the amounts reported in the financialstatements. By their nature, these judgments are subject to a degree ofuncertainty and are based on Gold Fields’ historical experience, terms ofexisting contracts, management’s view on trends in the gold mining industry,information from outside sources and other assumptions that Gold Fieldsconsiders to be reasonable under the circumstances. Actual results could differfrom these estimates under different assumptions or conditions.

Gold Fields’significant accounting policies that are subject to significant judgments,estimates and assumptions are summarized below.

***Business combinations***

Managementaccounts for its business acquisitions under the purchase method of accounting.The total value of consideration paid for acquisitions is allocated to theunderlying net assets acquired, based on their respective estimated fair valuesdetermined by using internal or external valuations. Management uses a numberof valuation methods to determine the fair value of assets and liabilitiesacquired including discounted cash flows, external market values, valuations onrecent transactions or a combination thereof and others and believes that ituses the most appropriate measure or a combination of measures to value eachasset or liability. In addition, management believes that it uses the mostappropriate valuation assumptions underlying each of those valuation methodsbased on current information available including discounted rates, market riskrates, entity risk rates, cash flow assumptions and others. The accountingpolicy for valuation of business acquisitions is considered critical becausejudgments made in determining the estimated fair value and expected usefullives assigned to each class of assets and liabilities acquired cansignificantly impact the value of the asset or liability, including the impacton deferred taxes, the respective amortization periods and ultimately netprofit. Therefore the use of other valuation methods, as well as otherassumptions underlying these valuation methods, could significantly impact thedetermination of financial position and the results of operations.

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***Amortization of mining assets***

Amortizationcharges are calculated using the units of production method and are based onGold Fields’ current gold production as a percentage of total expectedgold production over the lives of Gold Fields’ mines. An item isconsidered to be produced at the time it is removed from the mine. The lives ofthe mines are estimated by Gold Fields’ geology department usinginterpretations of mineral reserves, as determined in accordance with the SEC’sindustry guide number 7. The estimate of the total expected future lives ofGold Fields’ mines could be materially different from the actual amount of goldmined in the future and the actual lives of the mines due to changes in thefactors used in determining Gold Fields’ mineral reserves, such as the goldprice and foreign currency exchange rates. Any change in management’s estimateof the total expected future lives of Gold Fields’ mines would impact theamortization charge recorded in Gold Fields’ consolidated financial statements.

***Impairment of long-lived assets***

Gold Fields reviews and tests the carryingamounts of assets when events or changes in circumstances suggest that thecarrying amount may not be recoverable. Assets are grouped at the lowest levelfor which identifiable cash flows are largely independent of the cash flows of otherassets and liabilities. The lowest level at which such cash flows are generatedare generally at an individual operating mine, even if the individual operatingmine is included in a larger mine complex.

If thereare indications that an impairment may have occurred, Gold Fields preparesestimates of expected future cash flows for each group of assets. Expectedfuture cash flows are based on a probability-weighted approach applied topotential outcomes and reflect:

·       Estimatedsales proceeds from the production and sale of recoverable ounces of goldcontained in proven and probable reserves;

·       Expectedfuture commodity prices and currency exchange rates (considering historical andcurrent prices, price trends and related factors). In impairment assessmentsconducted in fiscal 2006, the Group used an expected future market gold priceof $500 per ounce, and expected future market exchange rates of R6.22 to $1.00and A$1.40 to $1.00;

·       Expectedfuture operating costs and capital expenditures to produce proven and probablegold reserves based on mine plans that assume current plant capacity, butexclude the impact of inflation; and

·       Expectedcash flows associated with value beyond proven and probable reserves, whichincludes the expected cash outflows required to develop and extract the valuebeyond proven and probable reserves.

Gold Fields records a reduction of a groupof assets to fair value as a charge to earnings if expected future cash flowsare less than the carrying amount. Gold Fields estimates fair value bydiscounting the expected future cash flows using a discount factor thatreflects the risk-free rate of interest for a term consistent with the periodof expected cash flows.

Expected future cash flows are inherentlyuncertain, and could materially change over time. They are significantlyaffected by reserve estimates, together with economic factors such as goldprices, and currency exchange rates, estimates of costs to produce reserves andfuture sustaining capital.

Because of the significant capitalinvestment that is required at many mines, if an impairment occurs, it couldmaterially impact earnings. Due to the long-life nature of many mines, thedifference between total estimated undiscounted net cash flows and fair valuecan be substantial. An impairment is only recorded when the carrying amount ofa long-lived asset exceeds the total estimated undiscounted net cash flows.Therefore, although the value of a mine may decline gradually over multiplereporting periods, the 

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application of impairment accounting rules couldlead to recognition of the full amount of the decline in value in one period.Due to the highly uncertain nature of future cash flows, the determination ofwhen to record an impairment charge can be very subjective. Management makes thisdetermination using available evidence taking into account current expectationsfor each mining property.

For acquiredexploration-stage properties, the purchase price is capitalized, butpost-acquisition exploration expenditures are expensed. The future economicviability of exploration stage properties largely depends upon the outcome ofexploration activity, which can take a number of years to complete for largeproperties. Management monitors the results of exploration activity over timeto assess whether an impairment may have occurred. The measurement of anyimpairment is made more difficult because there is not an active market forexploration properties, and because it is not possible to use discounted cashflow techniques due to the very limited information that is available toaccurately model future cash flows. In general, if an impairment occurs at anexploration stage property, it would probably have minimal value and most ofthe acquisition cost may have to be written down.

Gold Fieldsrecorded no impairment charges on its long-lived assets during fiscal 2006, butrecorded impairment charges amounting to $233.1 million in fiscal 2005 and$72.7 million in fiscal 2004.

***Deferredtaxation***

Whendetermining deferred taxation, management makes estimates as to the futurerecoverability of deferred tax assets. If management determines that a deferredtax asset will not be realized, a valuation allowance is recorded for thatportion of the deferred tax asset which is not considered more likely than notrecoverable. These determinations are based on the projected taxable income andrealization of tax allowances and tax losses. In the event that these taxassets are not realized, an adjustment to the valuation allowance would berequired, which would be charged to income in the period that the determinationwas made. Likewise, should management determine that Gold Fields would be ableto realize tax assets in the future in excess of the recorded amount, anadjustment to reduce the valuation allowance would be recorded generally as acredit to income in the period that the determination is made.

Gold Fields isperiodically required to estimate the tax basis of assets and liabilities.Where tax laws and regulations are either unclear or subject to varying interpretations,it is possible that changes in these estimates could occur that materiallyaffect the amounts of deferred income tax assets and liabilities recorded inthe consolidated financial statements. Changes in deferred tax assets andliabilities generally have a direct impact on earnings in the period ofchanges. The most significant estimate is the tax basis of certain Australianassets following elections in 2005 under new tax regimes in Australia. Theseelections resulted in the revaluation of certain assets in Australia for incometax purposes. Part of the revalued tax basis of these assets was estimatedbased on a valuation completed for tax purposes. This valuation is under reviewby the Australian Tax Office, or ATO, and the amount finally accepted by theATO may differ from the assumption used to measure deferred tax balances at theend of fiscal 2005. See note 6 to the audited consolidated financial statementswhich appear elsewhere in this annual report.

***Derivativefinancial instruments***

The determinationof the fair value of derivative financial instruments, when marked-to-market,takes into account estimates such as interest rates and foreign currencyexchange rates under prevailing market conditions, depending on the nature ofthe financial derivatives. These estimates may differ materially from actualinterest rates and foreign currency exchange rates prevailing at the maturitydates of the financial derivatives and, therefore, may materially influence thevalues assigned to the financial derivatives, which may result in a charge toor an increase in Gold Fields’ earnings through maturity of the financialderivatives.

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***Environmentalrehabilitation costs***

Gold Fieldsmakes provision for environmental rehabilitation costs and related liabilitieswhen incurred based on management’s interpretations of current environmentaland regulatory requirements. The provisions are recorded by discounting theexpected cash flows associated with the environmental rehabilitation using adiscount factor that reflects the risk-free rate of interest. The principalfactors that can cause expected cash flows to change are: the construction ofnew processing facilities; changes in the quantities of material in reservesand a corresponding change in the life of mine plan; changing orecharacteristics that ultimately impact the environment; changes in waterquality that impact the extent of water treatment required; and changes in lawsand regulations governing the protection of the environment. In general, as theend of the mine life becomes nearer, the reliability of expected cash flowsincreases, but earlier in the mine life, the estimation of rehabilitationliabilities is inherently more subjective. Significant judgments and estimatesare made when estimating the fair value of rehabilitation liabilities. Inaddition, expected cash flows relating to rehabilitation liabilities couldoccur over periods up to the planned life of mine at the time the estimate ismade and the assessment of the extent of environmental remediation work ishighly subjective. While management believes that the environmentalrehabilitation provisions made are adequate and that the interpretationsapplied are appropriate, the amounts estimated for the future liabilities may,when considering the factors discussed above, differ materially from the coststhat will actually be incurred to rehabilitate Gold Fields’ mine sites in thefuture.

***Employee benefits***

Management’sdetermination of Gold Fields’ obligation and expense for pension and providentfunds, as well as post-retirement health care liabilities, depends on theselection of certain assumptions used by actuaries to calculate the amounts.These assumptions are described in notes 16 and 17 to Gold Fields’ consolidatedfinancial statements and include, among others, the discount rate, health careinflation costs and rates of increase in compensation costs. Actual resultsthat differ from management’s assumptions are accumulated and charged overfuture periods, which will generally affect Gold Fields’ recognized expense andrecorded obligation in future periods. While management believes that theseassumptions are appropriate, significant changes in the assumptions maymaterially affect Gold Fields’ pension and other post retirement obligations aswell as future expenses, which will result in an impact on earnings in theperiods that the changes in the assumptions occur.

***Stockpiles, gold-in-process and productinventories***

Costs that are incurred in or benefit theproductive process are accumulated as stockpiles, gold-in-process, ore on leachpads and product inventories. Net realizable value tests are performed at leastannually and represent the estimated future sales price of the product based onprevailing and long-term metals prices, less estimated costs to completeproduction and bring the product to sale.

Stockpiles are measured by estimating thenumber of tons added and removed from the stockpile, the number of containedgold ounces based on assay data, and the estimated recovery percentage based onthe expected processing method. Stockpile tonnages are verified by periodicsurveys.

Although thequantities of recoverable metal are reconciled by comparing the grades of oreto the quantities of gold actually recovered (metallurgical balancing), thenature of the process inherently limits the ability to precisely monitorrecoverability levels. As a result, the metallurgical balancing process isconstantly monitored and the engineering estimates are refined based on actualresults over time.

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***Share-based compensation***

Effective July 1,2005, the Company adopted Statement of Financial Accounting StandardsNo. 123(R), Share-Based Payment, or SFAS 123(R), for all share optiongrants subsequent to that date. SFAS 123(R) requires the Company to determinethe fair value of share options as of the date of the grant, which is thenamortized as share-based compensation expense in the income statement over thevesting period of the option grant. Gold Fields has determined the fair valueof all its options grants (a) prior to, but not yet vested as ofJuly 1, 2005, based on the grant-date fair value estimated in accordancewith the original provisions of SFAS 123(R), and (b) subsequent toJuly 1, 2005 based on the grant-date fair value estimated in accordancewith SFAS 123(R), using the Black-Scholes valuation model, which requires theCompany to make assumptions regarding the estimated term of the option, shareprice volatility, expected forfeiture rates and the Company’s expected dividendyield. While Gold Fields’ management believes that these assumptions areappropriate, the use of different assumptions could have a material impact onthe fair value of the option grant and the related recognition of share-basedcompensation expense in the consolidated income statement. The Company’soptions have characteristics significantly different from those of tradedoptions and therefore fair values may also differ.

**Recent AccountingPronouncements**

In June 2006, the Financial Accounting StandardsBoard or FASB, issued FASB Interpretation No. 48, Accounting forUncertainty in Income Taxes, or FIN 48, which is an interpretation of FASBStatement No. 109, Accounting for Income Taxes. FIN 48 prescribes arecognition threshold and measurement attribute for the financial statementrecognition and measurement of a tax position taken or expected to be taken ina tax return. FIN 48 requires that Gold Fields recognize in its financialstatements, the impact of a tax position, if that position is more likely thannot to be sustained on audit, based on the technical merits of the position.FIN 48 also provides guidance on derecognition, classification, interest andpenalties, accounting in interim periods and disclosure. The provisions of FIN48 are effective beginning July 1, 2007 with the cumulative effect of thechange in accounting principle recorded as an adjustment to the opening balanceof retained earnings. Gold Fields is currently evaluating the impact ofadopting FIN 48 on its financial statements.

In September 2006, the FASB issued SFAS No. 157“Fair Value Measurements,” or SFAS 57. SFAS 57 defines fair value,establishes a framework for measuring fair value and expands disclosures aboutfair value measurements. SFAS 57 does not require any new fair valuemeasurements, it emphasizes that fair value is a market-based measurement, notan entity-specific measurement. Therefore, a fair value measurement should bedetermined based on the assumptions that market participants would use inpricing the asset or liability. SFAS 157 expands disclosures about the use offair value to measure assets and liabilities in interim and annual periodssubsequent to initial recognition. This statement applies for derivatives andother financial instruments measured at fair value under SFAS No. 133, “DerivativeFinancial Instruments” at initial recognition and in all subsequent periods.Gold Fields will be required to adopt SFAS 157 on July 1, 2008, and iscurrently evaluating the impact of SFAS 157 on its financial position andresults of operations.

In September 2006, FASB issued SFAS No. 158,“Employers’ Accounting for Defined Benefit Pension and Other PostretirementPlans,” or SFAS 158, an amendment of FASB Statements No. 87, 88, 106 and132(R). SFAS 158 improves financial reporting by requiring an employer torecognize the overfunded or underfunded status of a defined benefitpostretirement plan (other than a multiemployer plan) as an asset or liabilityin its statement of financial position and to recognize changes in that fundedstatus in the year in which the changes occur through comprehensive income.SFAS 158 requires an employer to measure the funded status of a plan as of thedate of its year-end statement of financial position, with limited exceptions.The provisions of SFAS 158 will be applicable for the Company as of the yearending June 30, 

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2007. Gold Fields is in the process of evaluating thepotential impact the adoption of this standard will have on its financialposition and results of operations.

In September 2006,the Securities and Exchange Commission, or the SEC, issued Staff AccountingBulletin No. 108, or SAB 108. The interpretations in SAB 108 express theviews of the staff of the SEC regarding the process of quantifying financialstatement misstatements. The staff believes registrants must consider theimpact of correcting all misstatements, including the effect of misstatementsthat were not corrected at the end of the prior year. These prior yearmisstatements should be considered in quantifying misstatements in current yearfinancial statements. Thus, a registrant’s financial statements would requireadjustment when the assessment in the current year or in prior years’ resultsin qualifying a misstatement that is material, after considering all relevantquantitative and qualitative factors. Gold Fields will be required to adopt SAB108 on July 1, 2007, and is currently evaluating the impact of SAB 108 onits financial position and results of operations.

**Results of Operations**

***Years Ended June 30,2006 and 2005***

*Revenues*

Product sales increased by$388.9 million, or 20.5%, from $1,893.1 million in fiscal 2005 to$2,282.0 million in fiscal 2006. The increase in product sales was due toan increase in the average realized gold price of 24.2% from $422 per ounce infiscal 2005 to $524 per ounce in fiscal 2006, partially offset by a decrease ofapproximately 0.137 million ounces, or 3.1%, of total gold sold from 4.488million ounces in fiscal 2005 to 4.351 million ounces in fiscal 2006. Thedecrease in ounces sold resulted from lower production from the South Africanoperations, partially offset by the production from the newly acquired Choco 10mine in Venezuela.

The decrease in ouncessold from the South African operations from 2.824 million ounces in fiscal 2005to 2.660 million ounces in fiscal 2006, resulted primarily from the loss ofover a week’s production due to a wage related strike in August 2005 atall the South African operations together with poor performance at Kloof, dueto mining inflexibility and a labor dispute in January 2006 which resultedin slowdowns in production. Gold output from Kloof decreased 11.9% or 0.123million ounces in fiscal 2006 when compared with fiscal 2005. At Beatrix therewas a decrease in gold output of 4.5% or 0.028 million ounces due to lowerstoping volumes, the impact of the strike in August 2005 and an overalldecrease in the grade of mined ore, offset in part by increased volumes ofsweepings and vamping, which improved the mine call factor and gold recovery infiscal 2006. Production at Driefontein was only marginally lower in fiscal2006. Production at the international operations increased by 1.6% from 1.664million ounces in fiscal 2005 to 1.691 million ounces in fiscal 2006. All ofthis increase was due to the production from the newly acquired Choco 10 mine,as a net decrease in production from Australia was offset by the net increasein production in Ghana. See “Information on the Company—Gold Fields’ MiningOperations.”

Total gold sold and totalgold produced are the same at all the operations with the exception of Choco10, where there may be differences due to timing of sales.

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*Costs and Expenses*

Thefollowing table sets out Gold Fields’ total ounces sold and weighted averagetotal cash costs and total production costs per ounce for fiscal 2005 andfiscal 2006.

| ** **       | ** ** | **Gold Sold**   | ** ** | **Total cash  costs(1)** | ** ** | **Total   production   costs(2)** | ** ** | **Gold Sold** | ** **   | **Total cash   costs(1)** | ** **   | **Total   production   costs(2)** | ** ** | **Percentage   increase/   (decrease)   in unit total  cash costs** | ** ** | **Percentage   increase/  (decrease)   in unit total   Production   costs** | ** ** |
|------------------|------------|----------------------|------------|-------------------------------|------------|---------------------------------------------|------------|--------------------|--------------|-------------------------------------|--------------|---------------------------------------------|------------|---------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------|------------|
| ** **       | ** ** | **Fiscal 2005** | ** ** | **Fiscal 2006**          | ** ** | ** **                                  | ** ** | ** **         | ** **   |
| ** **       | ** ** | **(‘000oz)**    | ** ** | **($/oz)**                    | ** ** | **(‘000oz)**                           | ** ** | **($/oz)**         | *** *** | **(%)**                             | *** *** |
| South Africa     |       |                 |       |                          |       |                                        |       |               |         |                                |         |                                        |       |                                                                                              |       |                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Driefontein      |       |                 | 1,163      |                          |       |                                        | 330        |               |         |                                | 380          |                                        |       |                                                                                              | 1,150      |                                                                                                      |       |   | 355 |   |   |   | 407 |   |   |   | 7.6 |   |   |   | 7.1 |   |   |
| Kloof            |       |                 | 1,037      |                          |       |                                        | 379        |               |         |                                | 448          |                                        |       |                                                                                              | 914        |                                                                                                      |       |   | 421 |   |   |   | 478 |   |   |   | 11.1 |   |   |   | 6.7 |   |   |
| Beatrix          |       |                 | 624        |                          |       |                                        | 406        |               |         |                                | 452          |                                        |       |                                                                                              | 596        |                                                                                                      |       |   | 409 |   |   |   | 444 |   |   |   | 0.7 |   |   |   | (1.8 | ) |   |
| Ghana            |       |                 |       |                          |       |                                        |       |               |         |                                |         |                                        |       |                                                                                              |       |                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tarkwa(3)        |       |                 | 677        |                          |       |                                        | 234        |               |         |                                | 290          |                                        |       |                                                                                              | 709        |                                                                                                      |       |   | 300 |   |   |   | 350 |   |   |   | 28.2 |   |   |   | 20.7 |   |   |
| Damang(4)        |       |                 | 248        |                          |       |                                        | 282        |               |         |                                | 302          |                                        |       |                                                                                              | 235        |                                                                                                      |       |   | 432 |   |   |   | 447 |   |   |   | 53.2 |   |   |   | 48.0 |   |   |
| Venezuela        |       |                 |       |                          |       |                                        |       |               |         |                                |         |                                        |       |                                                                                              |       |                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Choco 10(5)      |       |                 | —     |                          |       |                                        | —     |               |         |                                |         |                                        |       |                                                                                              | —     |                                                                                                      |       |   | 28 |   |   |   | 293 |   |   |   | 399 |   |   |   | n/a |   |   |
| Australia(6)     |       |                 |       |                          |       |                                        |       |               |         |                                |         |                                        |       |                                                                                              |       |                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| St. Ives         |       |                 | 527        |                          |       |                                        | 336        |               |         |                                | 439          |                                        |       |                                                                                              | 497        |                                                                                                      |       |   | 346 |   |   |   | 488 |   |   |   | 3.0 |   |   |   | 11.2 |   |   |
| Agnew            |       |                 | 212        |                          |       |                                        | 232        |               |         |                                | 325          |                                        |       |                                                                                              | 222        |                                                                                                      |       |   | 268 |   |   |   | 326 |   |   |   | 15.5 |   |   |   | 0.3 |   |   |
| Total(7)(8)      |       |                 | 4,488      |                          |       |                                        | —     |               |         |                                | —       |                                        |       |                                                                                              | 4,351      |                                                                                                      |       |   | — |   |   |   | — |   |   |   |   |   |   |   |   |   |   |
| Weighted average |       |                 | —     |                          |       |                                        | 331        |               |         |                                | 393          |                                        |       |                                                                                              |       |                                                                                                      |       |   | 366 |   |   |   | 428 |   |   |   | 10.6 |   |   |   | 8.9 |   |   |

----

Notes:

(1)           Gold Fields has calculated total cash costs per ounceby dividing total cash costs, as determined using guidance provided by the GoldInstitute, by gold ounces sold for all periods presented. The Gold Institutewas a non-profit international industry association of miners, refiners,bullion suppliers and manufacturers of gold products that ceased operation in2002, which developed a uniform format for reporting production costs on a perounce basis. The Gold Institute has now been incorporated into the NationalMining Association. The guidance was first adopted in 1996 and revised inNovember 1999. Total cash costs, as defined in the Gold Institute industryguidance, are production costs as recorded in the statement of operations, lessoffsite (i.e. central) general and administrative expenses (including headoffice costs charged to the mines, central training expenses, industryassociation fees and social development costs), rehabilitation costs, plusroyalties and employee termination costs. Changes in total cash costs per ounceare affected by operational performance, as well as changes in the currencyexchange rate between the Rand, Australian dollar and the Bolivar, comparedwith the U.S. dollar. Management, however, believes that total cash costs perounce provides a measure for comparing Gold Fields’ operational performanceagainst that of its peer group, both for Gold Fields as a whole, and for itsindividual operations. Total cash costs and total cash costs per ounce are notU.S. GAAP measures. An investor should not consider total cash costs andtotal cash costs per ounce in isolation or as an alternative to totalproduction costs or net income/(loss), income before tax, operating cash flowsor any other measure of financial performance presented in accordance with U.S.GAAP. In particular, depreciation and amortization is included in a measure ofproduction costs under U.S. GAAP, but is not included in total cash costs underthe guidance provided by the Gold Institute. Furthermore, while the GoldInstitute has provided a definition for the calculation of total cash costs,the calculation of total cash costs per ounce may vary significantly among goldmining companies, and by itself does not necessarily provide a basis forcomparison with other gold mining companies. See “Information on the Company—Glossaryof Mining Terms—Total cash costs per ounce.”

(2)           Gold Fields has calculated totalproduction costs per ounce by dividing total production costs, as determinedusing the guidance provided by the Gold Institute, by gold ounces sold for allperiods presented. Total production costs, as defined by the Gold Instituteindustry guidance, are total cash costs, as calculated using the Gold Instituteguidance, plus amortization, depreciation and rehabilitation costs. Changes intotal production costs per ounce are affected by operational performance, aswell as changes in the currency exchange rate between the Rand, Australiandollar and the Bolivar, compared with the U.S. dollar. Management,however, believes that total production costs per ounce provides a measure forcomparing Gold Fields’ operational performance against that of its peergroup, both for Gold Fields as a whole, and for its individual operations.Total production costs per ounce is not a U.S. GAAP measure. An investor shouldnot consider total production costs per ounce in 

146

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isolation or as analternative to total production costs or net income/(loss), income before tax,operating cash flows or any other measure of financial performance presented inaccordance with U.S. GAAP. While the Gold Institute has provided a definitionfor the calculation of total production costs, the calculation of totalproduction costs per ounce may vary significantly among gold mining companies,and by itself does not necessarily provide a basis for comparison with othergold mining companies. See “Information on the Company—Glossary of MiningTerms—Total production costs per ounce.”

(3)           In fiscal 2005 and 2006, 0.481 millionounces and 0.504 million ounces of sales, respectively, were attributable toGold Fields, with the remainder attributable to minority shareholders in theTarkwa operation.

(4)           In fiscal 2005 and 2006, 0.176 millionounces and 0.167 million ounces of sales, respectively, were attributable toGold Fields, with the remainder attributable to minority shareholders in theDamang operation.

(5)           In fiscal 2006, 0.027 million ounces ofsales were attributable to Gold Fields, with the remainder attributable tominority shareholders in the Choco 10 operation.

(6)           The consideration paid for the Australianoperations in excess of the book value of the underlying net assets wasallocated pro rata to the value of the underlying assets, which affected theallocation of amortization between St. Ives and Agnew.

(7)           In fiscal 2005 and 2006, 4.219 millionounces and 4.074 million ounces of sales, respectively, were attributable toGold Fields, with the remainder attributable to minority shareholders in theGhana and Venezuela operations.

(8)           The total may not reflect the sum of theline items due to rounding.

Thefollowing tables set out a reconciliation of Gold Fields’ production costs toits total cash costs and total production costs for fiscal 2006 and fiscal2005.

| ** **                                        | ** ** | **For the year ended June 30, 2006**             | ** ** |
|---------------------------------------------------|------------|--------------------------------------------------------------------------------|------------|
| ** **                                        | ** ** | **Driefontein**                                                                | ** ** | **Kloof** | ** ** | **Beatrix** | ** ** | **Tarkwa** | ** ** | **Damang** | ** ** | **Choco 10** | ** ** | **St. Ives** | ** ** | **Agnew** | ** ** | **Corporate** | ** ** | **Group** | ** ** |
| ** **                                        | ** ** | **(in $ millions except as otherwise noted)(1)** | ** ** |
| **Production  Costs**                             |       |                                                                           | 411.3      |   |   |   | 386.3 |   |   |   | 245.0 |   |   |   | 211.7 |   |   |   | 101.7 |   |   |   | 8.4 |   |   |   | 176.3 |   |   |   | 80.9 |   |   |   | — |   |   | 1,621.6 |   |
| Less:                                             |       |                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| G&A other than  corporate costs          |       |                                                                           | 5.2        |   |   |   | 4.8 |   |   |   | 3.5 |   |   |   | 11.5 |   |   |   | 1.9 |   |   |   | 0.6 |   |   |   | 4.2 |   |   |   | 3.4 |   |   |   | — |   |   | 35.1 |   |
| GIP adjustment                                    |       |                                                                           | —     |   |   |   | — |   |   |   | — |   |   |   | (1.2 | ) |   |   | — |   |   |   | — |   |   |   | (1.9 | ) |   |   | (0.2 | ) |   |   | — |   |   | (3.3 | ) |
| Exploration                                       |       |                                                                           | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 2.0 |   |   |   | — |   |   |   | 9.4 |   |   |   | 21.4 |   |   |   | — |   |   | 32.8 |   |
| Plus:                                             |       |                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employment  termination cost                 |       |                                                                           | 2.4        |   |   |   | 3.0 |   |   |   | 2.1 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 0.8 |   |   |   | 0.5 |   |   |   | — |   |   | 8.8 |   |
| Royalty                                           |       |                                                                           | —     |   |   |   | — |   |   |   | — |   |   |   | 11.2 |   |   |   | 3.7 |   |   |   | 0.5 |   |   |   | 6.5 |   |   |   | 2.9 |   |   |   | — |   |   | 24.8 |   |
| **Total  cash costs**                             |       |                                                                           | 408.5      |   |   |   | 384.5 |   |   |   | 243.6 |   |   |   | 212.6 |   |   |   | 101.5 |   |   |   | 8.3 |   |   |   | 171.9 |   |   |   | 59.7 |   |   |   | — |   |   | 1,590.6 |   |
| Plus:                                             |       |                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization(2)                                   |       |                                                                           | 57.3       |   |   |   | 49.9 |   |   |   | 19.4 |   |   |   | 36.5 |   |   |   | 3.5 |   |   |   | 3.0 |   |   |   | 71.3 |   |   |   | 12.9 |   |   |   | 12.3 |   |   | 266.1 |   |
| GIP adjustments(2)                                |       |                                                                           | —     |   |   |   | — |   |   |   | — |   |   |   | (1.2 | ) |   |   | — |   |   |   | — |   |   |   | (1.9 | ) |   |   | (0.2 | ) |   |   | — |   |   | (3.3 | ) |
| Rehabilitation                                    |       |                                                                           | 1.8        |   |   |   | 2.6 |   |   |   | 1.6 |   |   |   | 0.3 |   |   |   | — |   |   |   | — |   |   |   | 0.9 |   |   |   | — |   |   |   | — |   |   | 7.2 |   |
| **Total  production costs**                       |       |                                                                           | 467.6      |   |   |   | 437.0 |   |   |   | 264.6 |   |   |   | 248.2 |   |   |   | 105.0 |   |   |   | 11.3 |   |   |   | 242.2 |   |   |   | 72.4 |   |   |   | 12.3 |   |   | 1,860.6 |   |
| Gold produced   (‘000 oz)(3)                 |       |                                                                           | 1,149.5    |   |   |   | 914.0 |   |   |   | 596.1 |   |   |   | 709.2 |   |   |   | 235.1 |   |   |   | 25.3 |   |   |   | 496.4 |   |   |   | 222.4 |   |   |   | — |   |   | 4,348.1 |   |
| **Gold  sold per production cost (‘000 oz)** |       |                                                                           | 1,149.5    |   |   |   | 914.0 |   |   |   | 596.1 |   |   |   | 709.2 |   |   |   | 235.1 |   |   |   | 25.3 |   |   |   | 496.4 |   |   |   | 222.4 |   |   |   | — |   |   | 4,348.1 |   |
| **Total  cash costs   ($/oz)(4)**                 |       |                                                                           | 355        |   |   |   | 421 |   |   |   | 409 |   |   |   | 300 |   |   |   | 432 |   |   |   | 293 |   |   |   | 346 |   |   |   | 268 |   |   |   | — |   |   | 366 |   |
| **Total  production   costs ($/oz)(5)**           |       |                                                                           | 407        |   |   |   | 478 |   |   |   | 444 |   |   |   | 350 |   |   |   | 447 |   |   |   | 399 |   |   |   | 488 |   |   |   | 326 |   |   |   | — |   |   | 428 |   |

----

Notes:

(1)           Calculated using an exchange rate of R6.40per $1.00.

(2)           Non-cash portion of GIP adjustments shownseparately. Gold in process, or GIP, represents gold in the processing circuit,which is expected to be recovered.

(3)           In fiscal 2006, 4.074 million ounces ofproduction were attributable to Gold Fields, with the remainder attributable tominority shareholders in the Ghana and Choco 10 operations.

(4)           Gold Fields has calculated total cashcosts per ounce by dividing total cash costs, as determined using guidanceprovided by the Gold Institute, by gold ounces sold for all periods presented.Total cash costs, as defined in the 

147

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Gold Instituteindustry guidance, are production costs as recorded in the statement ofoperations, less offsite (i.e. central) general and administrativeexpenses (including head office costs charged to the mines, central trainingexpenses, industry association fees and social development costs),rehabilitation costs, plus royalties and employee termination costs. Changes intotal cash costs per ounce are affected by operational performance, as well aschanges in the currency exchange rate between the Rand, Australian dollar andthe Bolivar, compared with the U.S. dollar. Management, however, believes thattotal cash costs per ounce provides a measure for comparing Gold Fields’operational performance against that of its peer group, both for Gold Fields asa whole, and for its individual operations. Total cash costs and total cashcosts per ounce are not U.S. GAAP measures. An investor should not considertotal cash costs and total cash costs per ounce in isolation or as analternative to total production costs or net income/(loss), income before tax,operating cash flows or any other measure of financial performance presented inaccordance with U.S. GAAP. In particular, depreciation and amortization isincluded in a measure of production costs under U.S. GAAP, but is notincluded in total cash costs under the guidance provided by the Gold Institute.Furthermore, while the Gold Institute has provided a definition for thecalculation of total cash costs, the calculation of total cash costs per ouncemay vary significantly among gold mining companies, and by itself does notnecessarily provide a basis for comparison with other gold mining companies.See “Information on the Company—Glossary of Mining Terms—Total cash costs perounce.” 

(5)           Gold Fields has calculated totalproduction costs per ounce by dividing total production costs, as determinedusing the guidance provided by the Gold Institute, by gold ounces sold for allperiods presented. Total production costs, as defined by the Gold Instituteindustry guidance, are total cash costs, as calculated using the Gold Instituteguidance, plus amortization, depreciation and rehabilitation costs. Changes intotal production costs per ounce are affected by operational performance, aswell as changes in the currency exchange rate between the Rand, Australiandollar and the Bolivar, compared with the U.S. dollar. Management,however, believes that total production costs per ounce provides a measure forcomparing Gold Fields’ operational performance against that of its peergroup, both for Gold Fields as a whole, and for its individual operations.Total production costs per ounce is not a U.S. GAAP measure. An investor shouldnot consider total production costs per ounce in isolation or as an alternativeto total production costs or net income/(loss), income before tax, operatingcash flows or any other measure of financial performance presented inaccordance with U.S. GAAP. While the Gold Institute has provided a definitionfor the calculation of total production costs, the calculation of totalproduction costs per ounce may vary significantly among gold mining companies,and by itself does not necessarily provide a basis for comparison with othergold mining companies. See “Information on the Company—Glossary of Mining Terms—Totalproduction costs per ounce.” 

| ** **                                             | ** ** | **For the year ended June 30, 2005**                   | ** ** |
|--------------------------------------------------------|------------|--------------------------------------------------------------------------------------|------------|
| ** **                                             | ** ** | **Driefontein**                                                                      | ** ** | **Kloof** | ** ** | **Beatrix** | ** ** | **Tarkwa** | ** ** | **Damang** | ** ** | **St. Ives** | ** ** | **Agnew** | ** ** | **Corporate** | ** ** | **Group** | ** ** |
| ** **                                             | ** ** | **(in $ millions except as otherwise noted) (1)** | ** ** |
| **Production  Costs**                                  |       |                                                                                 | 386.4      |   |   | 393.6 |   |   | 252.9 |   |   |   | 158.2 |   |   |   | 68.6 |   |   |   | 184.5 |   |   |   | 56.4 |   |   |   | — |   |   | 1,500.6 |   |
| Less:                                                  |       |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| G&A other than  corporate costs                    |       |                                                                                 | (6.5       | ) |   | (5.4 | ) |   | (3.8 | ) |   |   | (8.9 | ) |   |   | (1.8 | ) |   |   | (4.7 | ) |   |   | (1.5 | ) |   |   | — |   |   | (32.6 | ) |
| GIP adjustment                                         |       |                                                                                 | —     |   |   | — |   |   | — |   |   |   | 0.2 |   |   |   | — |   |   |   | 2.1 |   |   |   | (0.1 | ) |   |   | — |   |   | 2.2 |   |
| Exploration                                            |       |                                                                                 | —     |   |   | — |   |   | — |   |   |   | (1.2 | ) |   |   | — |   |   |   | (10.7 | ) |   |   | (7.5 | ) |   |   | — |   |   | (19.4 | ) |
| Plus:                                                  |       |                                                                                 | —     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employment  termination   costs                        |       |                                                                                 | 3.7        |   |   | 5.0 |   |   | 4.3 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 0.7 |   |   | 13.7 |   |
| Royalty                                                |       |                                                                                 | —     |   |   | — |   |   | — |   |   |   | 8.6 |   |   |   | 3.1 |   |   |   | 5.7 |   |   |   | 2.1 |   |   |   | — |   |   | 19.5 |   |
| **Total  cash costs**                                  |       |                                                                                 | 383.6      |   |   | 393.2 |   |   | 253.4 |   |   |   | 156.9 |   |   |   | 69.9 |   |   |   | 176.9 |   |   |   | 49.4 |   |   |   | 0.7 |   |   | 1,484.0 |   |
| Plus:                                                  |       |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization(2)                                        |       |                                                                                 | 56.9       |   |   | 67.9 |   |   | 28.0 |   |   |   | 38.1 |   |   |   | 4.8 |   |   |   | 56.5 |   |   |   | 19.3 |   |   |   | 3.0 |   |   | 274.5 |   |
| GIP adjustments(2)                                     |       |                                                                                 | —     |   |   | — |   |   | — |   |   |   | (0.2 | ) |   |   | — |   |   |   | (2.1 | ) |   |   | 0.1 |   |   |   | — |   |   | (2.2 | ) |
| Rehabilitation                                         |       |                                                                                 | 1.8        |   |   | 3.5 |   |   | 1.0 |   |   |   | 1.3 |   |   |   | 0.2 |   |   |   | 0.3 |   |   |   | 0.3 |   |   |   | — |   |   | 8.4 |   |
| **Total  production costs**                            |       |                                                                                 | 442.3      |   |   | 464.6 |   |   | 282.4 |   |   |   | 196.1 |   |   |   | 74.9 |   |   |   | 231.6 |   |   |   | 69.1 |   |   |   | 3.7 |   |   | 1,764.7 |   |
| Gold produced  (‘000 oz)(3)                       |       |                                                                                 | 1,162.6    |   |   | 1,037.1 |   |   | 624.3 |   |   |   | 676.8 |   |   |   | 247.7 |   |   |   | 527.0 |   |   |   | 212.5 |   |   |   | — |   |   | 4,488.0 |   |
| **Gold  sold per production cost (‘000 oz)** |       |                                                                                 | 1,162.6    |   |   | 1,037.1 |   |   | 624.3 |   |   |   | 676.8 |   |   |   | 247.7 |   |   |   | 527.0 |   |   |   | 212.5 |   |   |   | — |   |   | 4,488.0 |   |
| **Total  cash costs ($/oz)(4)**                        |       |                                                                                 | 330        |   |   | 379 |   |   | 406 |   |   |   | 232 |   |   |   | 282 |   |   |   | 336 |   |   |   | 232 |   |   |   | — |   |   | 331 |   |
| **Total  production costs  ($/oz)(5)**                 |       |                                                                                 | 380        |   |   | 448 |   |   | 452 |   |   |   | 290 |   |   |   | 302 |   |   |   | 439 |   |   |   | 325 |   |   |   | — |   |   | 393 |   |

----

Notes:

(1)           Calculated using an exchange rate of R6.21 per $1.00.

148

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(2)           Non-cash portion of GIP adjustments shown separately. Goldin process, or GIP, represents gold in the processing circuit, which isexpected to be recovered.

(3)           In fiscal 2005, 4.219 million ounces of production wereattributable to Gold Fields, with the remainder attributable to minorityshareholders in the Tarkwa and Damang operations.

(4)           Gold Fields has calculated total cash costs per ounceby dividing total cash costs, as determined using guidance provided by the GoldInstitute, by gold ounces sold for all periods presented. Total cash costs, asdefined in the Gold Institute industry guidance, are production costs asrecorded in the statement of operations, less offsite (i.e. central)general and administrative expenses (including head office costs charged to themines, central training expenses, industry association fees and socialdevelopment costs), rehabilitation costs, plus royalties and employeetermination costs. Changes in total cash costs per ounce are affected byoperational performance, as well as changes in the currency exchange ratebetween the Rand, Australian dollar and the Bolivar, compared with the U.S.dollar. Management, however, believes that total cash costs per ounce providesa measure for comparing Gold Fields’ operational performance against that ofits peer group, both for Gold Fields as a whole, and for its individualoperations. Total cash costs and total cash costs per ounce are not U.S. GAAPmeasures. An investor should not consider total cash costs and total cash costsper ounce in isolation or as an alternative to total production costs or netincome/(loss), income before tax, operating cash flows or any other measure offinancial performance presented in accordance with U.S. GAAP. In particular,depreciation and amortization is included in a measure of production costs underU.S. GAAP, but is not included in total cash costs under the guidanceprovided by the Gold Institute. Furthermore, while the Gold Institute hasprovided a definition for the calculation of total cash costs, the calculationof total cash costs per ounce may vary significantly among gold miningcompanies, and by itself does not necessarily provide a basis for comparisonwith other gold mining companies. See “Information on the Company—Glossary ofMining Terms—Total cash costs per ounce.”

(5)           Gold Fields has calculated total production costs perounce by dividing total production costs, as determined using the guidanceprovided by the Gold Institute, by gold ounces sold for all periods presented.Total production costs, as defined by the Gold Institute industry guidance,are total cash costs, as calculated using the Gold Institute guidance, plusamortization, depreciation and rehabilitation costs. Changes in totalproduction costs per ounce are affected by operational performance, as well aschanges in the currency exchange rate between the Rand, Australian dollar andthe Bolivar, compared with the U.S. dollar. Management, however, believesthat total production costs per ounce provides a measure for comparingGold Fields’ operational performance against that of its peer group, bothfor Gold Fields as a whole, and for its individual operations. Total productioncosts per ounce is not a U.S. GAAP measure. An investor should not considertotal production costs per ounce in isolation or as an alternative to totalproduction costs or net income/(loss), income before tax, operating cash flowsor any other measure of financial performance presented in accordance with U.S.GAAP. While the Gold Institute has provided a definition for the calculation oftotal production costs, the calculation of total production costs per ounce mayvary significantly among gold mining companies, and by itself does notnecessarily provide a basis for comparison with other gold mining companies.See “Information on the Company—Glossary of Mining Terms—Total production costsper ounce.”

Gold Fields’ weightedaverage total cash costs per ounce increased by $35 per ounce, or 10.6%, from$331 per ounce in fiscal 2005 to $366 per ounce in fiscal 2006. Thestrengthening of the Rand against the U.S. dollar, had a 3.1% negative impacton the costs converted from the South African operations. In Rand terms,weighted average cash costs per ounce increased at the South African operationsprincipally as a result of the impact of the strike in August 2005 and thepoorer performance at Kloof during fiscal 2006 as compared to fiscal 2005.Weighted average total cash costs per ounce at the international operationsincreased significantly in fiscal 2006 mainly due to the pre-stripping of theTeberebie pit at Tarkwa and at the Damang main pit cutback as well as increasedproduction from the higher cost Songvang open pit at Agnew and the replacementof high grade Damang main pit material with lower grade stockpile ore. Weightedaverage total cash costs per ounce at St. Ives increased more modestly as theoperation benefited from the introduction of the new, more efficient Lefroymill which completed its first full year of production. In addition, there wasa significant increase in input costs, especially fuel, steel and cyanide andother reagents, and in wages, especially at the South African operations.

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*Production costs*

Production costs increasedby $121.0 million, or 8.1%, from $1,500.6 million in fiscal 2005 to $1,621.6 millionin fiscal 2006. This was primarily due to the increased production from Tarkwaand the added cost of waste removal at the Teberebie cutback at Tarkwa and theDamang main pit cutback. The increase at Agnew was due to the increasedactivity at Songvang open pit. Production costs from Choco 10 wereincluded from March 2006. In South Africa costs were slightly higher, withthe increase at Driefontein partially offset by lower costs at Kloof andBeatrix, mainly due to the lower production. Added to this was a significantincrease in input costs, especially fuel, steel and cyanide and other reagents,wage increases above inflation and the weakening of the South African randwhich depreciated on average by 3.1% against the U.S. dollar during fiscal 2006compared with fiscal 2005, resulting in increased costs in U.S. dollar terms.The Australian dollar was virtually unchanged against the U.S. dollar.

*Depreciation andamortization*

Depreciation and amortization charges decreased $5.3million, or 1.9%, from $274.5 million in fiscal 2005 to $269.2 million in fiscal2006. Depreciation and amortization is calculated on the units of productionmethod and is based on current gold production as a percentage of totalexpected gold production over the lives of the different mines. The principalreason for this decrease was the decrease in production at Kloof offset in partby additional amortization and depreciation of the new mill at St. Ives.

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The table below depictsthe changes from June 30, 2004 to June 30, 2005 for proven andprobable reserves above current infrastructure and for the life of mine foreach operation, and the resulting impact on the amortization charge in fiscal2005 and 2006, respectively. The life of mine numbers below are taken from theoperations’ strategic plans, adjusted for proven and probable reserve balances.In basic terms, amortization is calculated using the life of mine for eachoperation, which is based on: (1) the proven and probable reserves aboveinfrastructure for the operation at the start of the relevant year (which aretaken to be the same as at the end of the prior fiscal year and using onlyabove infrastructure reserves) and (2) the amount of gold produced by theoperation during the year. However, during fiscal 2006 Gold Fields decided toalign determination of its reserves with its planning cycle and as a result areserve statement as at December 31, 2005 was issued. This ore reservestatement became effective for amortization calculations as from April 1,2006.

| ** **                        | ** ** | **Proven and probable   reserves as of** | ** ** | **Life of min(7) as of** | ** ** | **Amortization as of** | ** ** |
|-----------------------------------|------------|-------------------------------------------------------------------|------------|----------------------------------------------|------------|----------------------------------|------------|
| ** **                        | ** ** | **30 June   2004**                                      | ** ** | **30 June   2005**                 | ** ** | **31 December   2006** | ** ** | **30 June   2004** | ** ** | **30 June   2005** | ** ** | **31 December   2006** | ** ** | **30 June   2005** | ** ** | **30 June   2006** | ** ** |
| Driefontein                       |       |                                                              | 15,300     |                                         |       |                             | 15,100     |   |   |   | 14,400 |   |   |   | 16 |   |   |   | 16 |   |   |   | 18 |   |   |   | 56.9 |   |   |   | 57.4 |   |   |
| Kloof(1)                          |       |                                                              | 13,000     |                                         |       |                             | 13,000     |   |   |   | 13,000 |   |   |   | 15 |   |   |   | 15 |   |   |   |   |   |   |   | 67.9 |   |   |   | 49.9 |   |   |
| Beatrix                           |       |                                                              | 9,400      |                                         |       |                             | 8,200      |   |   |   | 8,200 |   |   |   | 20 |   |   |   | 14 |   |   |   | 14 |   |   |   | 28.0 |   |   |   | 19.5 |   |   |
| Ghana                             |       |                                                              |       |                                         |       |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tarkwa(2)                         |       |                                                              | 14,700     |                                         |       |                             | 13,400     |   |   |   | 13,400 |   |   |   | 11 |   |   |   | 21 |   |   |   | 23 |   |   |   | 38.1 |   |   |   | 37.5 |   |   |
| Damang(3)                         |       |                                                              | 900        |                                         |       |                             | 1,300      |   |   |   | 1,300 |   |   |   | 5 |   |   |   | 5 |   |   |   | 6 |   |   |   | 4.8 |   |   |   | 3.5 |   |   |
| Venezuela                         |       |                                                              |       |                                         |       |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Choco 10                          |       |                                                              | n/a        |                                         |       |                             | —     |   |   |   | 1,200 |   |   |   | n/a |   |   |   | 8 |   |   |   | 8 |   |   |   |   |   |   |   |   |   |   |
| Australia(4)                      |       |                                                              |       |                                         |       |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| St. Ives                          |       |                                                              | 3,100      |                                         |       |                             | 2,500      |   |   |   | 2,200 |   |   |   | 5 |   |   |   | 5 |   |   |   | 5 |   |   |   | 56.5 |   |   |   | 75.1 |   |   |
| Agnew                             |       |                                                              | 700        |                                         |       |                             | 900        |   |   |   | 800 |   |   |   | 3 |   |   |   | 4 |   |   |   | 3 |   |   |   | 19.3 |   |   |   | 13.4 |   |   |
| Corporate and other               |       |                                                              | —     |                                         |       |                             |       |   |   |   |   |   |   |   | — |   |   |   |   |   |   |   |   |   |   |   | 3.0 |   |   |   | 9.9 |   |   |
| Total                             |       |                                                              | 57,100     |                                         |       |                             | 54,400     |   |   |   | 54,500 |   |   |   | — |   |   |   |   |   |   |   |   |   |   |   | 274.5 |   |   |   | 269.2 |   |   |
| Reserves below  infrastructure(5) |       |                                                              | 23,000     |                                         |       |                             | 10,200     |   |   |   | 10,000 |   |   |   | — |   |   |   |   |   |   |   |   |   |   |   | — |   |   |   |   |   |   |
| Total reserves(6)                 |       |                                                              | 80,100     |                                         |       |                             | 64,600     |   |   |   | 64,500 |   |   |   | — |   |   |   |   |   |   |   |   |   |   |   | — |   |   |   |   |   |   |

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Notes:

(1)           Although total reserves remained the same at Kloof,amortization decreased due primarily to changes in the sources of production asamortization is calculated based on the reserves at each shaft.

(2)           As of June 30, 2004 and 2005 andDecember 2005, reserves of 10.450 million ounces, 9.500 million ounces and9.500 million ounces of gold, respectively, were attributable to Gold Fields,with the remainder attributable to minority shareholders in the Tarkwaoperation.

(3)           As of June 30, 2004 and 2005 andDecember 2005, reserves of 0.640 million ounces, 0.920 million ounces and0.920 million ounces were attributable to Gold Fields, with the remainderattributable to minority shareholders in the Damang operation.

(4)           The consideration paid for the Australian operations inexcess of the book value of the underlying net assets was allocated pro rata tothe value of the underlying assets, which affected the allocation ofamortization between St. Ives and Agnew.

(5)           Below infrastructure reserves relate to mineralizationwhich is located at a level at which an operation currently does not haveinfrastructure sufficient to allow mining operations to occur, but where theoperation has made plans to install additional infrastructure in the futurewhich will allow mining to occur at that level.

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(6)           As of June 30, 2004 and 2005 and December 31,2005, reserves of 75.600 million ounces, 60.400 million ounces and 60.300million ounces of gold, respectively, were attributable to Gold Fields, withthe remainder attributable to minority shareholders in the Ghanaian andVenezuelan operation.

(7)           The life of mine for each operation shownin the above table differs from that shown in “Information on the Company—GoldFields’ Mining Operations.” The life of mine in the above table is based on theabove infrastructure proven and probable reserves at December 31, 2005whereas the life of mine information in “Information on the Company—GoldFields’ Mining Operations.” is based on both above and below infrastructureproven and probable reserves at December 31, 2005.

*Corporateexpenditure*

Corporate expenditure was$21.9 million in fiscal 2006 compared to $22.5 million in fiscal 2005, adecrease of 2.7%. Corporate expenditure consists primarily of general corporateoverhead and corporate service department costs, primarily in the areas oftechnical services, human resources and finance, which are used by theoperations. Corporate expenditure also includes business development costs.This decrease was due to the depreciation of the Rand against the U.S. dollaras Rand costs remained constant at R140.0 million in both fiscal 2006 and2005.

*Employmenttermination costs*

In fiscal 2006, GoldFields incurred employment termination costs of $9.1 million as compared to$13.7 million in fiscal 2005. The decrease in employee terminations costsresulted principally from lower retrenchments during fiscal 2006.

*Explorationexpenditure*

Exploration expenditurewas $39.3 million in fiscal 2006, a decrease of 14.6% from $46.0 millionin fiscal 2005. Gold exploration increased from $31.7 million in fiscal 2005 to$38.7 million in fiscal 2006 as a result of a deliberate effort to step upexploration activities. However, this increase was more than offset by thedecrease in exploration expenditure incurred at the Arctic Platinum Project, orthe APP, which decreased from $14.3 million in fiscal 2005 to $0.6 million infiscal 2006 as Gold Fields determined how to proceed with the APP. See “Informationon the Company—Exploration.”

*Impairment ofassets*

For fiscal 2006, Gold Fields had no asset impairmentsas compared to asset impairments of $233.1 million in fiscal 2005. Duringfiscal 2005, there was an impairment charge of $211.1 million relating toBeatrix North and South sections (formerly Beatrix Shaft Nos. 1, 2 and 3).Beatrix is a low grade mine and therefore very sensitive to changes in its costprofile. Changes in the cost profile affect the pay limits, which in turnaffects the reserves. During fiscal 2005, there were cost increases at Beatrix,which resulted in an increase in the pay limit. Due to the increase in the paylimit, certain reserves at Shaft No. 2 (now part of the South section) andVlakpan included in fiscal 2004 became uneconomical to mine and were thereforeexcluded from the 2005 life of mine profile. In addition, due to therestructuring at the South section, certain areas were closed which furtherimpacted the life of mine plan.

During fiscal 2005,closures resulted in the following additional asset impairments:

·       atDriefontein, Shaft No. 10 shaft was closed, resulting in an impairment of$2.0 million;

·       atKloof, the No. 3 metallurgical plant was closed, resulting in animpairment of $1.8 million; and

·       atSt. Ives, the old mill was closed, resulting in an impairment of $9.8 million.

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Also during fiscal 2005,an impairment charge was incurred at Living Gold, the rose project atDriefontein. See “Information on the Company—Living Gold.” As Living Gold isnot a gold asset, its valuation was based on its business plan using a longterm exchange rate of R8.51 to the euro, the currency in the markets where itanticipated making most of its sales, and a discounted cash flow valuationusing a real discount rate of 10%. This resulted in an impairment of $8.4million. The main reason for the impairment is that the original plan forecasta higher exchange rate of R9.87 to the euro and thus higher earnings.

*Impairment ofcritical spares*

With the closure of theold St. Ives mill during fiscal 2005, $2.8 million worth of critical spareskept for the maintenance of the old plant were impaired as they had becomeredundant.

*Decrease inprovision for post-retirement health care costs*

In South Africa, Gold Fields provides medical benefitsto employees in its operations through the Medisense Medical Scheme.

Under the medical planwhich covers certain of its former employees, Gold Fields remains liable for50% of the employees’ medical contribution to the medical schemes after theirretirement. During fiscal 2005, 21%, of these former employees and dependants werebought out of the scheme at a 15% premium. No former employees were bought outduring fiscal 2006. At June 30, 2006, approximately 226 (fiscal 2005: 243)former employees were covered under this plan, which is not available tomembers of the scheme formerly available to employees of the former Free Stateoperation (which is now the Beatrix operation) who retired after August 31,1997 and members of the Medisense medical scheme who retired after January 31,1999. See “Directors, Senior Management and Employees-Employees-Benefits.” Infiscal 2006 an amount of $0.5 million was credited to earnings, compared to$4.2 million in fiscal 2005, in respect of Gold Fields’ obligations under thismedical plan, representing a 12% decrease. The $0.5 million credit in fiscal2006 was the result of a reversal of $0.5 million relating to the release ofthe cross subsidization liability and a $0.7 million release as a result ofbenefits forfeited offset in part by the annual interest and service charge of$0.7 million. In fiscal 2005, the credit was the result of a reversal of $4.5million relating to the release of the cross subsidization liability as aresult of the buyout and a $2.2 million release as a result of benefitsforfeited, offset in part by the annual interest and service charge of $1.7million and a $0.8 million charge relating to the 15% premium mentioned above.The post-retirement health care provision is updated annually based onactuarial calculations, with any increase in the provision reflected in the statementof operations.

*Accretion expenseon environmental rehabilitation*

At all its operations Gold Fields makes full provisionfor environmental rehabilitation based on the net present value of theestimated cost of restoring the environmental disturbance that has occurred upto the balance sheet date. The rehabilitation charge for fiscal 2006 was $8.6million compared to $11.5 million in fiscal 2005. The decrease in the charge infiscal 2006 was due to lower inflation and interest rates applicable to the fiscal2006 layer added as well as the effects of converting at a weaker Rand/USdollar exchange rate.

For its South Africanoperations, Gold Fields contributes to environmental trust funds it hasestablished to provide for any environmental rehabilitation obligations andexpected closure costs relating to its mining operations. The amounts investedin the trust funds are classified as non-current assets and any income earnedon these assets is accounted for as interest income. For the Ghana, Australiaand Venezuela operations Gold Fields does not contribute to a trust fund.

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*Share compensationcost*

Effective July 1, 2005, the Company adopted SFAS No. 123(R).Prior to July 1, 2005, the Company had elected to follow AccountingPolicies Board Opinion No. 25 “Accounting for Stock Issued to Employees,”or APB No. 25, and its related interpretations in accounting for its shareoption schemes. The Company adopted SFAS 123(R) using the modifiedprospective transition method. Under this method, compensation cost recognizedin fiscal 2006 included: (a) compensation cost for all share-basedpayments granted prior to, but not yet vested as of July 1, 2005, based onthe grant-date fair value estimated in accordance with the original provisionsof SFAS 123(R), and (b) compensation cost for all share-based paymentsgranted subsequent to July 1, 2005 based on the grant date fair valueestimated in accordance with the provisions of SFAS 123(R). The results forprior periods have not been restated. As a result of adopting SFAS 123(R),$11.5 million of stock compensation charges was recognized in fiscal 2006.

Prior to fiscal 2006 GoldFields had elected to follow APB No. 25 and its related interpretations inaccounting for its share option schemes. Under APB No. 25, because the exerciseprice of Gold Fields and its subsidiaries’ employee share options equaled themarket price of the underlying share on the date of the grant, no compensationexpense had historically been recognized in the consolidated financialstatements, other than on occasions where the terms of share option vestingschedules are modified or accelerated. During fiscal 2005 however, as a resultof the inability by participants to exercise their share options during theperiod of the attempted Harmony hostile bid, Gold Fields extended the life ofoptions for certain employees whose options would otherwise have expired by June 25,2005. The Company accounted for the modification of the intrinsic value with anew measurement date and, since the options were fully vested on themodification date, recorded the incremental compensation cost of $2.1 millionas an expense.

*Harmony hostile bidcosts*

On October 18, 2004,Harmony Gold Mining Company Limited, or Harmony, announced an unsolicited andhostile tender offer to acquire the entire issued share capital of Gold Fields.Gold Fields mounted a vigorous defense to the offer, which continued duringmuch of the remainder of fiscal year 2005. The offer came to a conclusion on May 20,2005 when the High Court of South Africa ruled that the tender offer had, infact, lapsed on December 18, 2004 and was not capable of being revised orreinstated. Gold Fields incurred costs of $50.8 million in defending againstthe Harmony offer which was expensed.

*IAMGold transactioncosts*

On September 30,2004, Gold Fields, Gold Fields Ghana Holdings Limited, Gold Fields Holdings andIAMGold Corporation, or IAMGold, signed a definitive agreement which would haveresulted in Gold Fields combining its assets situated outside the SouthernAfrican Development Community with those of IAMGold by means of a reversetakeover. On December 7, 2004 this proposed transaction did not receivethe required majority approval by shareholders and it was therefore notcompleted. Gold Fields incurred costs of $9.3 million relating to the failedIAMGold deal during fiscal 2005 which was expensed.

*Interest anddividends*

Interest and dividendsdecreased by $2.4 million or 8.2%, from $29.2 million in fiscal 2005 to $26.8million in fiscal 2006. Interest received on cash and cash equivalents was$24.4 million in fiscal 2006 as compared to $26.4 million in fiscal 2005,primarily due to lower average cash balances during fiscal 2006 compared tofiscal 2005. Dividends received were $2.4 million in fiscal 2006 as compared to$2.8 million in fiscal 2005.

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*Finance expense*

Gold Fields recognized netfinance expense of $55.6 million in fiscal 2006 as compared to $54.9 million infiscal 2005. Net finance expense in fiscal 2006 consisted of interest paymentsof $74.4 million, comprising $69.3 million on the Mvelaphanda loan and $5.1million of other interest payments. This was offset in part by realizedexchange gains of $18.8 million.

Other interest payments comprise $2.5 million interestpaid on the $158.0 million borrowed on March 9, 2006 under a US$250.0million credit facility entered into by Orogen Holdings (BVI) Limited, orOrogen, to partly finance the Bolivar acquisition, $1.5 million interest paidon a bridging loan related thereto incurred using Gold Fields’ uncommittedborrowing facilities pending the availability of the US$250.0 millioncredit facility and $1.1 million of miscellaneous interest payments. See “-Liquidity and Capital Resources—Credit Facilities.” The realized exchange gainsconsists of a $10.3 million currency translation gain on funds held to meetcommitments in respect of the Bolivar acquisition and an $8.5 million currencyconversion gain arising from a change in the functional currency from U.S.dollars to Rand of one of the Group’s offshore subsidiary companies, GoldFields Holdings.

Net finance expense infiscal 2005 consisted of interest payments of $57.6 million, comprising $56.9million on the Mvelaphanda loan and $0.7 million miscellaneous interestpayments. This was offset in part by a $2.7 million realized exchange gain oncertain offshore funds held in Euros.

*Unrealized gain onfinancial instruments*

Gold Fields recognized an unrealized gain of $14.6million in fiscal 2006 compared to an unrealized gain of $4.9 million in fiscal2005 relating to financial instruments.

The unrealized gain of$14.6 million in fiscal 2006 consisted of a $12.8 million unrealizedmark-to-market gain on various warrants and options held in respect ofunderlying share investments, primarily related to the Mvela Transaction, andan unrealized gain of $3.8 million on the $30.0 million U.S. Dollar/Randcurrency financial instruments Gold Fields holds to cover U.S. dollarcommitments payable from South Africa. This was partly offset by an unrealizedloss of $1.6 million on the Australian Dollar/US dollar currency financialinstruments Gold Fields holds to allow it to participate in appreciation of theAustralian dollar against the U.S. dollar and an unrealized loss of $0.4million on the international Petroleum Exchange Gasoil call options Gold Fieldsentered into during fiscal 2005. See “Quantitative and Qualitative DisclosuresAbout Market Risk—Foreign Currency Sensitivity—Foreign Currency HedgingExperience” and “—Commodity Price Sensitivity—Commodity Price HedgingExperience—Oil.” The unrealized gain of $4.9 million in fiscal 2005 consistedof a $5.3 million unrealized gain on the Australian dollar/US dollar currencyfinancial instruments Gold Fields holds to allow it to participate inappreciation of the Australian dollar against the U.S. dollar and a $0.3million unrealized gain on the International Petroleum Exchange Gasoil calloptions Gold Fields entered into during fiscal 2005, offset in part by a$0.7 million negative mark-to-market valuation as at June 30, 2005 inrespect of the $30.0 million U.S. dollar/Rand currency financialinstruments Gold Fields holds to cover any U.S. dollar commitments payable fromSouth Africa.

*Realized(loss)/gain on financial instruments*

Gold Fields recognized a realized loss of $9.1 millionin fiscal 2006 compared to a realized gain of $2.1 million in fiscal 2005relating to financial instruments.

Of the $9.1 million realized loss in fiscal 2006,there was a $15.2 million loss on treasury trading activities, a $1.9 millionrealized loss on a Rand/US dollar swap relating to the financing of the Bolivaracquisition and a $1.2 million net realized loss on the settlement of the $30.0million U.S. Dollar/Rand currency financial instruments. This was partly offsetby a $9.2 million gain related to an interest rate swap Gold Fields had 

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entered into in connection with the Mvela Loan. Thisswap was closed out on June 3, 2005 resulting in a realized gain of $36.2million. This gain is being accounted for in the income statement over theremaining period of the underlying loan. $9.2 million was accounted for in theincome statement in fiscal 2006. The balance of $26.2 million will be accountedfor in fiscal 2007 to fiscal 2009. See “Quantitative and QualitativeDisclosures About Market Risk—Interest Rate Sensitivity—General—Interest RateHedging Experience.”

Of the $2.1 millionrealized gain in fiscal 2005, a $1.3 million gain was realized on thesettlement of the $50.0 million U.S. dollar/Rand currency financial instrumentsand $0.8 million related to an interest rate swap Gold Fields had entered intoin connection with the Mvela Loan.

*Profit on disposalof listed investments*

During fiscal 2006,Gold Fields continued to liquidate certain non-current investments. The profiton the sale of these investments amounted to $6.3 million resulting from thefollowing sales:

·       $4.7million from the sale of Gold Fields 55% interest in the Committee Bay JointVenture. In exchange for its 55% interest Gold Fields received 7,000,000 sharesin Committee Bay Resources Limited valued at $4.7 million. As the interest hada nil cost, the $4.7 million value of the shares received was also the profit;

·       $0.5million from the sale of 0.4 million shares in TEBA Limited and the repaymentof a loan previously written off;

·       $0.3million from the sale of 3.6 million shares in African Eagle Resources Plc;

·       $0.2million from the sale of 0.4 million shares in Sanu Resources Limited; and

·       $0.6million from the sale of various other shares.

During fiscal 2005,Gold Fields liquidated certain non-current investments. The profit on the saleof these investments amounted to $8.1 million resulting from the followingsales:

·       $6.2million from the sale of 36.0 million shares in Zijin Mining Group CompanyLimited;

·       $1.6million from the sale of 8.5 million shares in African Eagle Resources Plc; and

·       $0.3 million from the saleof 1.3 million shares in Radius Gold Incorporated.

*Profit on disposalof exploration rights*

During fiscal 2005 GoldFields sold its interest in the Angelina Project in Chile to its joint venturepartner Meridian for $7.5 million plus a 2% net smelter royalty on the majorityof land within the joint venture. As the interest had a nil cost, the proceedsof $7.5 million was also the profit. No exploration rights were disposed of in fiscal2006.

*Profit on disposalof property, plant and equipment*

During fiscal 2006,Gold Fields continued to dispose of certain surplus property, plant andequipment. The net profit on the sale of this property, plant and equipmentamounted to $3.7 million comprising:

·       $2.3million profit from the sale of a winder by Kloof and

·       $1.7million profit from the sale of mine houses by Beatrix, offset in part by a

·       $0.3million loss from miscellaneous asset sales by the operating mines of theGroup.

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During fiscal 2005, GoldFields realized a net profit of $0.8 million on the sale of surplus property,plant and equipment by the operating mines of the Group.

*Write-down ofinvestments.*

During fiscal 2005 investments whose market value waslower than their original costs for a period of longer than 12 months werewritten-down by $7.7 million.

The $7.7 millioncomprised:

·       $5.4million on Mvelaphanda Resources Limited;

·       $0.4million on Conquest Mining Limited;

·       $0.3million on Oil Quest Resources Plc;

·       $0.7million on Lakota Resources; and

·       $0.9million on Ridge Mining Plc.

During fiscal 2006 nowrite down was required as there were no investments whose market value waslower than their original costs for a period of longer than 12 months.

*Other(expenses)/income*

Other (expenses)/income represents miscellaneousrevenue items such as scrap sales and rental income, net of miscellaneouscorporate expenditure not allocated to the operations and therefore notincluded in the corporate expenditure line item. Other expenses increased by$10.5 million, from $6.0 million in fiscal 2005 to $16.5 million in fiscal2006.

Other expenses infiscal 2006 consisted of miscellaneous cost items totaling $17.5 million whichincluded:

·       Corporatesocial investment costs which prior to fiscal 2006 were included in productioncosts;

·       Onetime professional fees related to corporate advice and costs in relation to theexpanding international portfolio as well as increased staffing related to GoldFields’ expanding international portfolio;

·       Auditors’fees and other costs relating to Gold Fields becoming compliant with therequirements of the Sarbanes-Oxley Act of 2002; and

·       costsrelated to marketing Biox®.

These amounts were offset in part by $1.0 million inother income, comprised primarily of rent.

Other expenses infiscal 2005 consisted of $2.9 million in other income, comprised principally ofmineral right sales and rent, which was more than offset by miscellaneous costitems totaling $8.9 million which included:

·       auditors’fees and other costs relating to Gold Fields becoming compliant with therequirements of the Sarbanes-Oxley Act of 2002;

·       costsrelated to marketing Biox®,which prior to fiscal 2005 were accounted for under exploration expense;

·       thecost of cash rewards given to all Gold Fields’ employees for the successfuldefense of the Harmony hostile bid; and

·       additional sundryprofessional fees.

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***Incomeand mining tax (expense)/benefit***

The table below sets forth Gold Fields’ effective taxrate for fiscal 2005 and fiscal 2006, including normal and deferred tax.

| ** **                            | ** ** | **Year ended June 30,**       | ** ** |
|---------------------------------------|------------|----------------------------------------------|------------|
| ** **                            | ** ** | **   2006   ** | ** ** | **   2005   ** | ** ** |
| Effective tax  (expense)/benefit rate |       |                                         | (34.4      | )% |   |   | 35.1 | % |   |
|                                       |            |                                              |            |  |  |  |  |  |  |

 

In fiscal 2006, the effective tax expense rate of34.4% differed from the maximum mining statutory tax rate of 45% for GoldFields and its subsidiaries as a whole, primarily due to the effect of themining tax formula of $13.5 million (representing the tax-free status of thefirst 5% of mining revenue) on the South African mining operations’taxable income, $8.4 million due to the reduction during fiscal 2006 of theGhanaian tax rates from 28.0% to 25.0% and $55.3 million due to certain of GoldFields subsidiary companies having statutory tax rates that are lower than themaximum mining statutory tax rate of 45%. The effect of these items was offsetby an amount of $22.3 million relating to the non-deductibility of certainexploration costs and share-based payment costs and by an amount of $24.9million relating to foreign levies and royalties, which is included in the taxcharge.

In fiscal 2005, theeffective tax benefit rate of 35.1% differed from the maximum mining statutorytax rate of 45% for Gold Fields and its subsidiaries as a whole, primarily dueto the effect of the mining tax formula of $11.5 million (representing thetax-free status of the first 5% of mining revenue) on the South Africanmining operations’ taxable income, a $26.8 million credit due to an increase inthe tax values of the Australian operations following the consolidation of St.Ives and Agnew for tax purposes and $8.4 million due to the reduction in fiscal2005 of the Ghanaian tax rates from 32.5% to 28.0%. The Australian taxlegislation makes provision for companies that consolidate for tax purposes torecalculate their tax values based on a market value calculation. The effect ofthese items was offset by an amount of $40.0 million relating to thenon-deductibility of certain exceptional items, namely the Harmony hostile bidcosts, the IAMGold transaction costs and exploration costs and by an amount of$21.8 million relating to foreign levies and royalties, which is included inthe tax charge.

*Share of equity investee’slosses*

Share of equity investee’slosses increased to $5.9 million in fiscal 2006 from $0.4 million in fiscal 2005.The $5.9 million loss relates to the recording of the equity losses related toBolivar following Gold Fields’ acquisition of the remaining interest in Bolivarit did not previously own effective February 28, 2006. Gold Fields did notrecord losses related to Bolivar prior to Gold Fields acquiring the remaininginterest in Bolivar that it did not already own. Prior to this acquisition itheld approximately 14% of Bolivar and accounted for this investment as anavailable for sale investment.

*Minority interests*

Minority interestsrepresented an expense of $29.8 million in fiscal 2006, compared to an expenseof $20.6 million in fiscal 2005. These amounts reflect the portion of the netincome of Gold Fields Ghana, Abosso, Choco 10 and Living Gold attributable totheir minority shareholders. The minority shareholders’ interest was 28.9% inGold Fields Ghana and Abosso in fiscal 2006 and 2005, 5% in Choco 10 in fiscal2006 and 40% in Living Gold in fiscal 2006 and 2005. The amounts due tominority shareholders were higher in fiscal 2006 due to increased net income atGold Fields Ghana and Abosso in fiscal 2006. Also the minority shareholders ofChoco 10 were included for the first time in fiscal 2006.

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*Net income/(loss)*

As a result of the factorsdiscussed above, Gold Fields’ net income was $138.5 million in fiscal 2006compared with net loss of $206.2 million in fiscal 2005.

***Years EndedJune 30, 2005 and 2004***

*Revenues*

Product sales increased by$186.9 million, or 11.0%, from $1,706.2 million in fiscal 2004 to $1,893.1million in fiscal 2005. The increase in product sales was due to an increase inthe average realized gold price of 9.0% from $387 per ounce in fiscal 2004 to$422 per ounce in fiscal 2005 together with an increase of approximately 0.082million ounces, or 1.9%, of total gold sold from 4.406 million ounces in fiscal2004 to 4.488 million ounces in fiscal 2005. The increase in ounces soldresulted from an overall increase in production at both the international andat the South African operations.

The increase in ouncessold from the South African operations from 2.804 million ounces in fiscal 2004to 2.824 million ounces in fiscal 2005 resulted from an increase in undergroundyields from 7.1 to 7.4 grams per tonne. This was as a result of the reductionin production from marginal areas and processing of low grade surface material,coupled with some increased production from higher grade areas, in line withthe change from a high-volume low-grade production strategy to a lower-volumehigher-grade production strategy to increase margins. Gold output fromDriefontein increased by 21,000 ounces while production at Kloof and Beatrixwas unchanged in fiscal 2005 when compared with fiscal 2004. Production at theinternational operations increased by 3.7% from 1.603 million ounces in fiscal2004 to 1.664 million ounces in fiscal 2005. A significant increase inproduction at Tarkwa resulting from the commissioning of the mill during October 2004and a smaller increase in production at Agnew more than offset decreases inproduction at Damang and St. Ives. See “Information on the Company—Gold Fields’Mining Operations.”

Differences between totalgold sold and total gold produced are due to timing differences between goldproduction and gold sales.

*Costs and Expenses*

Thefollowing table sets out Gold Fields’ total ounces produced and weightedaverage total cash costs and total production costs per ounce for fiscal 2004and fiscal 2005.

| ** **       | ** ** | ** **           | ** ** | ** **           | ** ** | ** **        | ** ** | ** **             | ** ** | ** **   | ** ** | ** **     | ** ** | ** **                    | ** ** | **Percentage**      | ** ** |
|------------------|------------|----------------------|------------|----------------------|------------|-------------------|------------|------------------------|------------|--------------|------------|----------------|------------|-------------------------------|------------|---------------------|------------|
| ** **       | ** ** | ** **           | ** ** | ** **           | ** ** | ** **        | ** ** | ** **             | ** ** | ** **   | ** ** | ** **     | ** ** | **Percentage**                | ** ** | **increase/**       | ** ** |
| ** **       | ** ** | **Fiscal 2004** | ** ** | **Fiscal 2005** | ** ** | **increase/**     | ** ** | **(decrease) in** | ** ** |
| ** **       | ** ** | ** **           | ** ** | ** **           | ** ** | **Total**         | ** ** | ** **             | ** ** | ** **   | ** ** | **Total**      | ** ** | **(decrease) in**        | ** ** | **unit total** | ** ** |
| ** **       | ** ** | **Gold**             | ** ** | **Total cash**  | ** ** | **production**    | ** ** | **Gold**               | ** ** | ** **   | ** ** | **production** | ** ** | **unit total cash** | ** ** | **production**      | ** ** |
| ** **       | ** ** | **Production**       | ** ** | **costs(1)**         | ** ** | **costs(2)**      | ** ** | **Production**         | ** ** | **costs(1)** | ** ** | **costs(2)**   | ** ** | **costs**                     | ** ** | **costs**           | ** ** |
| ** **       | ** ** | **(‘000oz)**    | ** ** | **($/oz)**           | ** ** | **(‘000oz)** | ** ** | **($/oz)**             | ** ** | **(%)**      | ** ** |
| South Africa     |       |                 |       |                 |       |              |       |                   |       |         |       |           |       |                          |       |                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Driefontein      |       |                 | 1,141      |                 |       |              | 311        |                   |       |         | 355        |           |       |                          | 1,163      |                |       |   | 330 |   |   |   | 380 |   |   |   | 6.1 |   |   |   | 7.0 |   |   |
| Kloof            |       |                 | 1,038      |                 |       |              | 341        |                   |       |         | 388        |           |       |                          | 1,037      |                |       |   | 379 |   |   |   | 448 |   |   |   | 11.1 |   |   |   | 15.5 |   |   |
| Beatrix          |       |                 | 625        |                 |       |              | 356        |                   |       |         | 393        |           |       |                          | 624        |                |       |   | 406 |   |   |   | 452 |   |   |   | 14.0 |   |   |   | 15.0 |   |   |
| Ghana            |       |                 |       |                 |       |              |       |                   |       |         |       |           |       |                          |       |                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tarkwa(3)        |       |                 | 550        |                 |       |              | 230        |                   |       |         | 258        |           |       |                          | 677        |                |       |   | 234 |   |   |   | 290 |   |   |   | 1.7 |   |   |   | 12.4 |   |   |
| Darnang(4)       |       |                 | 308        |                 |       |              | 222        |                   |       |         | 245        |           |       |                          | 248        |                |       |   | 282 |   |   |   | 302 |   |   |   | 27.0 |   |   |   | 23.3 |   |   |
| Australia(5)     |       |                 |       |                 |       |              |       |                   |       |         |       |           |       |                          |       |                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| St. Ives         |       |                 | 543        |                 |       |              | 300        |                   |       |         | 377        |           |       |                          | 527        |                |       |   | 336 |   |   |   | 439 |   |   |   | 12.0 |   |   |   | 16.5 |   |   |
| Agnew            |       |                 | 202        |                 |       |              | 221        |                   |       |         | 303        |           |       |                          | 212        |                |       |   | 232 |   |   |   | 325 |   |   |   | 5.0 |   |   |   | 7.3 |   |   |
| Total(6)(7)      |       |                 | 4,406      |                 |       |              | —     |                   |       |         | —     |           |       |                          | 4,488      |                |       |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| Weighted average |       |                 | —     |                 |       |              | 302        |                   |       |         | 349        |           |       |                          | —     |                |       |   | 331 |   |   |   | 393 |   |   |   | 9.6 |   |   |   | 12.6 |   |   |

----

Notes:

(1)           Gold Fields has calculated total cash costs per ounceby dividing total cash costs, as determined using guidance provided by the GoldInstitute, by gold ounces sold for all periods presented. Total cash costs, asdefined in the 

159

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Gold Institute industryguidance, are production costs as recorded in the statement of operations, lessoffsite (i.e. central) general and administrative expenses (including headoffice costs charged to the mines, central training expenses, industryassociation fees and social development costs), rehabilitation costs, plusroyalties and employee termination costs. Changes in total cash costs per ounceare affected by operational performance, as well as changes in the currencyexchange rate between the Rand, Australian dollar and the Bolivar, comparedwith the U.S. dollar. Management, however, believes that total cash costs perounce provides a measure for comparing Gold Fields’ operational performanceagainst that of its peer group, both for Gold Fields as a whole, and for itsindividual operations. Total cash costs and total cash costs per ounce are notU.S. GAAP measures. An investor should not consider total cash costs and totalcash costs per ounce in isolation or as an alternative to total productioncosts or net income/(loss), income before tax, operating cash flows or anyother measure of financial performance presented in accordance with U.S. GAAP.In particular, depreciation and amortization is included in a measure ofproduction costs under U.S. GAAP, but is not included in total cash costs underthe guidance provided by the Gold Institute. Furthermore, while the GoldInstitute has provided a definition for the calculation of total cash costs,the calculation of total cash costs per ounce may vary significantly among goldmining companies, and by itself does not necessarily provide a basis forcomparison with other gold mining companies. See “Information on the Company—Glossaryof Mining Terms—Total cash costs per ounce.”

(2)           Gold Fields has calculated total production costs perounce by dividing total production costs, as determined using the guidanceprovided by the Gold Institute, by gold ounces sold for all periods presented.Total production costs, as defined by the Gold Institute industry guidance, aretotal cash costs, as calculated using the Gold Institute guidance, plusamortization, depreciation and rehabilitation costs. Changes in totalproduction costs per ounce are affected by operational performance, as well aschanges in the currency exchange rate between the Rand, Australian dollar andthe Bolivar, compared with the U.S. dollar. Management, however, believes thattotal production costs per ounce provides a measure for comparing Gold Fields’operational performance against that of its peer group, both for Gold Fields asa whole, and for its individual operations. Total production costs per ounce isnot a U.S. GAAP measure. An investor should not consider total production costsper ounce in isolation or as an alternative to total production costs or netincome/(loss), income before tax, operating cash flows or any other measure offinancial performance presented in accordance with U.S. GAAP. While the GoldInstitute has provided a definition for the calculation of total productioncosts, the calculation of total production costs per ounce may varysignificantly among gold mining companies, and by itself does not necessarilyprovide a basis for comparison with other gold mining companies. See“Information on the Company—Glossary of Mining Terms—Total production costs perounce.”

(3)           In fiscal 2004 and 2005, 0.391 million ounces and 0.481million ounces of production, respectively, were attributable to Gold Fields,with the remainder attributable to minority shareholders in the Tarkwaoperation.

(4)           In fiscal 2004 and 2005, 0.219 million ounces and 0.176million ounces of production, respectively, were attributable to Gold Fields,with the remainder attributable to minority shareholders in the Damangoperation.

(5)           The consideration paid for the Australian operations inexcess of the book value of the underlying net assets was allocated pro rata tothe value of the underlying assets, which affected the allocation ofamortization between St. Ives and Agnew.

(6)           In fiscal 2004, and 2005, 4.158 million ounces and4.219 million ounces of production, respectively, were attributable to GoldFields, with the remainder attributable to minority shareholders in the Ghanaoperations.

(7)           The total may not reflect the sum of the line items dueto rounding.

160

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Thefollowing tables set out a reconciliation of Gold Fields’ production costs toits total cash costs and total production costs for fiscal 2005 and fiscal2004.

| ** **                                       | ** ** | **For the year ended June 30, 2005**             | ** ** |
|--------------------------------------------------|------------|--------------------------------------------------------------------------------|------------|
| ** **                                       | ** ** | **Driefontein**                                                                | ** ** | **Kloof** | ** ** | **Beatrix** | ** ** | **Tarkwa** | ** ** | **Damang** | ** ** | **St. Ives** | ** ** | **Agnew** | ** ** | **Corporate** | ** ** | **Group** | ** ** |
| ** **                                       | ** ** | **(in $ millions except as otherwise noted)(1)** | ** ** |
| **Production Costs**                             |       |                                                                           | 386.4      |   |   | 393.6 |   |   | 252.9 |   |   |   | 158.2 |   |   |   | 68.6 |   |   |   | 184.5 |   |   |   | 56.4 |   |   |   | — |   |   | 1,500.6 |   |
| Less:                                            |       |                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| G&A other than corporate costs               |       |                                                                           | (6.5       | ) |   | (5.4 | ) |   | (3.8 | ) |   |   | (8.9 | ) |   |   | (1.8 | ) |   |   | (4.7 | ) |   |   | (1.5 | ) |   |   | — |   |   | (32.6 | ) |
| GIP adjustment                                   |       |                                                                           | —     |   |   | — |   |   | — |   |   |   | 0.2 |   |   |   | — |   |   |   | 2.1 |   |   |   | (0.1 | ) |   |   | — |   |   | 2.2 |   |
| Exploration                                      |       |                                                                           | —     |   |   | — |   |   | — |   |   |   | (1.2 | ) |   |   | — |   |   |   | (10.7 | ) |   |   | (7.5 | ) |   |   | — |   |   | (19.4 | ) |
| Plus:                                            |       |                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employment termination cost                      |       |                                                                           | 3.7        |   |   | 5.0 |   |   | 4.3 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 0.7 |   |   | 13.7 |   |
| Royalty                                          |       |                                                                           | —     |   |   | — |   |   | — |   |   |   | 8.6 |   |   |   | 3.1 |   |   |   | 5.7 |   |   |   | 2.1 |   |   |   | — |   |   | 19.5 |   |
| **Total cash costs**                             |       |                                                                           | 383.6      |   |   | 393.2 |   |   | 253.4 |   |   |   | 156.9 |   |   |   | 69.9 |   |   |   | 176.9 |   |   |   | 49.4 |   |   |   | 0.7 |   |   | 1,484.0 |   |
| Plus:                                            |       |                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization(2)                                  |       |                                                                           | 56.9       |   |   | 67.9 |   |   | 28.0 |   |   |   | 38.1 |   |   |   | 4.8 |   |   |   | 56.5 |   |   |   | 19.3 |   |   |   | 3.0 |   |   | 274.5 |   |
| GIP adjustments(2)                               |       |                                                                           | —     |   |   | — |   |   | — |   |   |   | (0.2 | ) |   |   | — |   |   |   | (2.1 | ) |   |   | 0.1 |   |   |   | — |   |   | (2.2 | ) |
| Rehabilitation                                   |       |                                                                           | 1.8        |   |   | 3.5 |   |   | 1.0 |   |   |   | 1.3 |   |   |   | 0.2 |   |   |   | 0.3 |   |   |   | 0.3 |   |   |   | — |   |   | 8.4 |   |
| **Total production costs**                       |       |                                                                           | 442.3      |   |   | 464.6 |   |   | 282.4 |   |   |   | 196.1 |   |   |   | 74.9 |   |   |   | 231.6 |   |   |   | 69.1 |   |   |   | 3.7 |   |   | 1,764.7 |   |
| Gold produced (‘000 oz)(3)                  |       |                                                                           | 1,162.6    |   |   | 1,037.1 |   |   | 624.3 |   |   |   | 676.8 |   |   |   | 247.7 |   |   |   | 527.0 |   |   |   | 212.5 |   |   |   | — |   |   | 4,488.0 |   |
| **Gold sold per production cost (‘000 oz)** |       |                                                                           | 1,162.6    |   |   | 1,037.1 |   |   | 624.3 |   |   |   | 676.8 |   |   |   | 247.7 |   |   |   | 527.0 |   |   |   | 212.5 |   |   |   | — |   |   | 4,488.0 |   |
| **Total cash costs ($/oz)(4)**                   |       |                                                                           | 330        |   |   | 379 |   |   | 406 |   |   |   | 232 |   |   |   | 282 |   |   |   | 336 |   |   |   | 232 |   |   |   | — |   |   | 331 |   |
| **Total  production costs ($/oz)(5)**            |       |                                                                           | 380        |   |   | 448 |   |   | 452 |   |   |   | 290 |   |   |   | 302 |   |   |   | 439 |   |   |   | 325 |   |   |   | — |   |   | 393 |   |

----

Notes:

(1)           Calculated using an exchange rate of R6.21 per $1.00.

(2)           Non-cash portion of GIP adjustments shown separately.Gold in process, or GIP, represents gold in the processing circuit, which isexpected to be recovered.

(3)           In fiscal 2005, 4.219 million ounces of production,were attributable to Gold Fields, with the remainder attributable to minorityshareholders in the Ghana operations.

(4)           Gold Fields has calculated total cash costs per ounceby dividing total cash costs, as determined using guidance provided by the GoldInstitute, by gold ounces sold for all periods presented. Total cash costs, asdefined in the Gold Institute industry guidance, are production costs as recordedin the statement of operations, less offsite (i.e. central) general andadministrative expenses (including head office costs charged to the mines,central training expenses, industry association fees and social developmentcosts), rehabilitation costs, plus royalties and employee termination costs.Changes in total cash costs per ounce are affected by operational performance,as well as changes in the currency exchange rate between the Rand, Australiandollar and the Bolivar, compared with the U.S. dollar. Management, however,believes that total cash costs per ounce provides a measure for comparing GoldFields’ operational performance against that of its peer group, both for GoldFields as a whole, and for its individual operations. Total cash costs andtotal cash costs per ounce are not U.S. GAAP measures. An investor should notconsider total cash costs and total cash costs per ounce in isolation or as analternative to total production costs or net income/(loss), income before tax,operating cash flows or any other measure of financial performance presented inaccordance with U.S. GAAP. In particular, depreciation and amortization isincluded in a measure of production costs under U.S. GAAP, but is not includedin total cash costs under the guidance provided by the Gold Institute.Furthermore, while the Gold Institute has provided a definition for thecalculation of total cash costs, the calculation of total cash costs per ouncemay vary significantly among gold mining companies, and by itself does notnecessarily provide a basis for comparison with other gold mining companies.See “Information on the Company—Glossary of Mining Terms—Total cash costs perounce.”

(5)           Gold Fields has calculated totalproduction costs per ounce by dividing total production costs, as determinedusing the guidance provided by the Gold Institute, by gold ounces sold for allperiods presented. Total production costs, as defined by the Gold Instituteindustry guidance, are total cash costs, as calculated using the Gold Instituteguidance, plus amortization, depreciation and rehabilitation costs. Changes intotal production costs per ounce are affected by operational performance, aswell as changes in the currency exchange rate between the Rand, Australiandollar and the Bolivar, compared with the U.S. dollar. Management, however,believes that total production costs per ounce provides a measure for comparingGold Fields’ operational performance against that of its peer group, both forGold Fields as a whole, and for its individual operations. Total productioncosts 

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per ounce is not aU.S. GAAP measure. An investor should not consider total production costs perounce in isolation or as an alternative to total production costs or netincome/(loss), income before tax, operating cash flows or any other measure offinancial performance presented in accordance with U.S. GAAP. While the GoldInstitute has provided a definition for the calculation of total productioncosts, the calculation of total production costs per ounce may vary significantlyamong gold mining companies, and by itself does not necessarily provide a basisfor comparison with other gold mining companies. See “Information on theCompany—Glossary of Mining Terms—Total production costs per ounce.”

| ** **                                       | ** ** | **For the year ended June 30, 2004**             | ** ** |      |
|--------------------------------------------------|------------|--------------------------------------------------------------------------------|------------|-----------|
| ** **                                       | ** ** | **Driefontein**                                                                | ** ** | **Kloof** | ** ** | **Beatrix** | ** ** | **Tarkwa** | ** ** | **Damang** | ** ** | **St. Ives** | ** ** | **Agnew** | ** ** | **Corporate** | ** ** | **Group** | ** ** |   |
| ** **                                       | ** ** | **(in $ millions except as otherwise noted)(1)** | ** ** |      |
| **Production Costs**                             |       |                                                                           | 356.1      |      |   | 354.7 |   |   | 223.7 |   |   |   | 126.5 |   |   |   | 66.7 |   |   |   | 182.2 |   |   |   | 45.3 |   |   |   | — |   |   | 1,355.2 |   |
| Less:                                            |       |                                                                           |       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| G&A other than corporate costs               |       |                                                                           | (5.6       | )         |   | (4.8 | ) |   | (4.0 | ) |   |   | (6.5 | ) |   |   | (1.8 | ) |   |   | (4.9 | ) |   |   | (0.6 | ) |   |   | — |   |   | (28.2 | ) |
| GIP adjustment                                   |       |                                                                           | —     |      |   | — |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (1.2 | ) |   |   | — |   |   | (1.2 | ) |
| Exploration                                      |       |                                                                           | —     |      |   | — |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (19.9 | ) |   |   | (1.0 | ) |   |   | — |   |   | (20.9 | ) |
| Plus:                                            |       |                                                                           |       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employment termination cost                      |       |                                                                           | 4.0        |      |   | 3.9 |   |   | 2.5 |   |   |   | — |   |   |   | — |   |   |   | 0.1 |   |   |   | — |   |   |   | — |   |   | 10.5 |   |
| Royalty                                          |       |                                                                           | —     |      |   | — |   |   | — |   |   |   | 6.4 |   |   |   | 3.6 |   |   |   | 5.1 |   |   |   | 2.0 |   |   |   | — |   |   | 17.1 |   |
| **Total cash costs**                             |       |                                                                           | 354.5      |      |   | 353.8 |   |   | 222.2 |   |   |   | 126.4 |   |   |   | 68.5 |   |   |   | 162.6 |   |   |   | 44.5 |   |   |   | — |   |   | 1,332.5 |   |
| Plus:                                            |       |                                                                           |       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization(2)                                  |       |                                                                           | 49.5       |      |   | 46.0 |   |   | 22.8 |   |   |   | 15.2 |   |   |   | 6.8 |   |   |   | 41.8 |   |   |   | 15.3 |   |   |   | 1.2 |   |   | 198.6 |   |
| GIP adjustments(2)                               |       |                                                                           | —     |      |   | — |   |   | — |   |   |   | — | ) |   |   | — |   |   |   | — |   |   |   | 1.2 |   |   |   | — |   |   | 1.2 |   |
| Rehabilitation                                   |       |                                                                           | 1.6        |      |   | 3.2 |   |   | 0.5 |   |   |   | 0.1 |   |   |   | 0.2 |   |   |   | 0.3 |   |   |   | 0.1 |   |   |   | — |   |   | 6.0 |   |
| **Total production costs**                       |       |                                                                           | 405.6      |      |   | 403.0 |   |   | 245.5 |   |   |   | 141.7 |   |   |   | 75.5 |   |   |   | 204.7 |   |   |   | 61.1 |   |   |   | 1.2 |   |   | 1,538.3 |   |
| Gold produced (‘000 oz)(3)                  |       |                                                                           | 1,141.2    |      |   | 1,037.6 |   |   | 624.9 |   |   |   | 550.0 |   |   |   | 308.3 |   |   |   | 542.6 |   |   |   | 201.5 |   |   |   | — |   |   | 4,406.1 |   |
| **Gold sold per production cost (‘000 oz)** |       |                                                                           | 1,141.2    |      |   | 1,037.6 |   |   | 624.9 |   |   |   | 550.0 |   |   |   | 308.3 |   |   |   | 542.6 |   |   |   | 201.5 |   |   |   | — |   |   | 4,406.1 |   |
| **Total cash costs ($/oz)(4)**                   |       |                                                                           | 311        |      |   | 341 |   |   | 356 |   |   |   | 230 |   |   |   | 222 |   |   |   | 300 |   |   |   | 221 |   |   |   | — |   |   | 302 |   |
| **Total  production costs ($/oz)(5)**            |       |                                                                           | 355        |      |   | 388 |   |   | 393 |   |   |   | 258 |   |   |   | 245 |   |   |   | 377 |   |   |   | 303 |   |   |   | — |   |   | 349 |   |

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Note:

(1)           Calculated using an exchange rate of R6.90 per $1.00.

(2)           Non-cash portion of GIP adjustments shown separately.Gold in process, or GIP, represents gold in the processing circuit, which isexpected to be recovered.

(3)           In fiscal 2004, 4.158 million ounces of production wereattributable to Gold Fields, with the remainder attributable to minorityshareholders in the Ghana operations.

(4)           Gold Fields has calculated total cash costs per ounceby dividing total cash costs, as determined using guidance provided by the GoldInstitute, by gold ounces sold for all periods presented. Total cash costs, asdefined in the Gold Institute industry guidance, are production costs asrecorded in the statement of operations, less offsite (i.e. central) general and administrativeexpenses (including head office costs charged to the mines, central trainingexpenses, industry association fees and social development costs),rehabilitation costs, plus royalties and employee termination costs. Changes intotal cash costs per ounce are affected by operational performance, as well aschanges in the currency exchange rate between the Rand, Australian dollar andthe Bolivar, compared with the U.S. dollar. Management, however, believes thattotal cash costs per ounce provides a measure for comparing Gold Fields’operational performance against that of its peer group, both for Gold Fields asa whole, and for its individual operations. Total cash costs and total cashcosts per ounce are not U.S. GAAP measures. An investor should not considertotal cash costs and total cash costs per ounce in isolation or as analternative to total production costs or net income/(loss), income before tax,operating cash flows or any other measure of financial performance presented inaccordance with U.S. GAAP. In particular, depreciation and amortization isincluded in a measure of production costs under U.S. GAAP, but is not includedin total cash costs under the guidance provided by the Gold Institute. Furthermore,while the Gold Institute has provided a definition for the calculation of totalcash costs, the calculation of total cash costs per ounce may varysignificantly among gold mining companies, and by itself does not necessarilyprovide a basis for comparison with other gold mining companies. See“Information on the Company—Glossary of Mining Terms—Total cash costs perounce.”

(5)           Gold Fields has calculated total production costs perounce by dividing total production costs, as determined using the guidanceprovided by the Gold Institute, by gold ounces sold for all periods presented.Total production costs, as defined by the Gold Institute industry guidance, aretotal cash costs, as calculated using the Gold 

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Institute guidance, plusamortization, depreciation and rehabilitation costs. Changes in totalproduction costs per ounce are affected by operational performance, as well aschanges in the currency exchange rate between the Rand, Australian dollar andthe Bolivar, compared with the U.S. dollar. Management, however, believes thattotal production costs per ounce provides a measure for comparing Gold Fields’operational performance against that of its peer group, both for Gold Fields asa whole, and for its individual operations. Total production costs per ounce isnot a U.S. GAAP measure. An investor should not consider total production costsper ounce in isolation or as an alternative to total production costs or netincome/(loss), income before tax, operating cash flows or any other measure offinancial performance presented in accordance with U.S. GAAP. While the GoldInstitute has provided a definition for the calculation of total productioncosts, the calculation of total production costs per ounce may varysignificantly among gold mining companies, and by itself does not necessarilyprovide a basis for comparison with other gold mining companies. See“Information on the Company—Glossary of Mining Terms—Total production costs perounce.”

See “Information on the Company—Glossary of MiningTerms—Total production costs per ounce.”

Gold Fields’ weightedaverage total cash costs per ounce increased by $29 per ounce, or 9.6%, from$302 per ounce in fiscal 2004 to $331 per ounce in fiscal 2005. The principalreason was the strengthening of the Rand against the U.S. dollar, which had a10.0% negative impact on the costs converted from the South African operations.In Rand terms, weighted average total cash costs per ounce declined at theSouth African operations. Cash costs at the South Africa operations wereaffected by an increase in gold production as a result of the increase inunderground yields during fiscal 2005, as compared to fiscal 2004, as well ascost saving initiatives, partially offset by above inflation increases in wagesand prices of certain consumable store, including fuel, steel and cyanide andother reagents, and normal inflationary increases in prices of other consumablestores. Total cash costs per ounce in Rand terms at the internationaloperations decreased slightly in fiscal 2005 with lower unit costs at Agnew andTarkwa more than offsetting increases at St. Ives and Damang as theappreciation of the Rand against the U.S. dollar contributed to the lower totalcash costs per ounce in Rand terms.

*Production costs*

Production costs increasedby $145.4 million, or 10.7%, from $1,355.2 million in fiscal 2004 to $1,500.6million in fiscal 2005. This was primarily due to the increased production fromTarkwa, which was offset in part by slightly decreased production in SouthAfrica and St. Ives, as well as significant increases in input costs,especially fuel, steel and cyanide and other reagents, wage increases aboveinflation at the South African operations, and the appreciation of the SouthAfrican rand and the Australian dollar against the U.S. dollar. The Randappreciated on average by 10.1% and the Australian dollar appreciated 5.4%against the U.S. dollar during fiscal 2005 compared to fiscal 2004, resultingin increased costs in U.S. dollar terms.

*Depreciation andamortization*

Depreciation and amortization charges increased $75.9million, or 38.2%, from $198.6 million in fiscal 2004 to $274.5 million infiscal 2005. The principal reason for this increase was the increase inproduction compounded by the appreciation of the Rand and Australian dollaragainst the U.S. dollar. In addition, the decrease in reserves at Kloof Shaft No. 7,the additional amortization and depreciation of the new mills at Tarkwa and St.Ives and the owner mining fleet at Tarkwa contributed to the increase.

Thetable below depicts the changes from June 30, 2003 to June 30, 2004for proven and probable reserves above current infrastructure and for the lifeof mine for each operation, and the resulting impact on the amortization chargein fiscal 2004 and 2005, respectively. The life of mine numbers below are takenfrom the operations’ strategic plans, adjusted for proven and probable reservebalances. In basic terms, amortization is calculated using the life of mine foreach operation, which is based on: (1) the proven and probable reservesabove infrastructure for the operation at the start of the relevant year (whichare taken 

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to bethe same as at the end of the prior fiscal year and using only aboveinfrastructure reserves) and (2) the amount of gold produced by the operationduring the year.

| ** **                        | ** ** | **Proven and probable  reserves as of June 30,**                           | ** ** | **Life of mine(6) as of June 30,**                                         | ** ** | **Amortization as of June 30,**                                                      | ** ** |
|-----------------------------------|------------|----------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------|------------|
| ** **                        | ** ** | **        2003        ** | ** ** | **        2004        ** | ** ** | **        2003        ** | ** ** | **        2004        ** | ** ** | **        2004        ** | ** ** | **        2005        ** | ** ** |
| ** **                        | ** ** | **(‘000 oz)**                                                                                  | ** ** | **(years)**                                                                                              | ** ** | **($m)**                                                                                                 | ** ** |
| Driefontein                       |       |                                                                                                     | 16,000     |                                                                                                     |       |                                                                                                     | 15,300     |   |   |   | 17 |   |   |   | 16 |   |   |   | 49.5 |   |   |   | 56.9 |   |   |
| Kloof(1)                          |       |                                                                                                     | 15,900     |                                                                                                     |       |                                                                                                     | 13,000     |   |   |   | 18 |   |   |   | 15 |   |   |   | 46.0 |   |   |   | 67.9 |   |   |
| Beatrix(2)(3)                     |       |                                                                                                     | 11,800     |                                                                                                     |       |                                                                                                     | 9.400      |   |   |   | 20 |   |   |   | 20 |   |   |   | 22.8 |   |   |   | 28.0 |   |   |
| Ghana                             |       |                                                                                                     |       |                                                                                                     |       |                                                                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tarkwa(4)                         |       |                                                                                                     | 9,800      |                                                                                                     |       |                                                                                                     | 14,700     |   |   |   | 14 |   |   |   | 11 |   |   |   | 15.2 |   |   |   | 38.1 |   |   |
| Damang(5)                         |       |                                                                                                     | 900        |                                                                                                     |       |                                                                                                     | 900        |   |   |   | 3 |   |   |   | 5 |   |   |   | 6.8 |   |   |   | 4.8 |   |   |
| Australia(7)                      |       |                                                                                                     |       |                                                                                                     |       |                                                                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| St. Ives(8)                       |       |                                                                                                     | 3,000      |                                                                                                     |       |                                                                                                     | 3,100      |   |   |   | 5 |   |   |   | 5 |   |   |   | 41.8 |   |   |   | 56.5 |   |   |
| Agnew                             |       |                                                                                                     | 500        |                                                                                                     |       |                                                                                                     | 700        |   |   |   | 4 |   |   |   | 3 |   |   |   | 15.3 |   |   |   | 19.3 |   |   |
| Corporate and other               |       |                                                                                                     | —     |                                                                                                     |       |                                                                                                     | —     |   |   |   | — |   |   |   | — |   |   |   | 1.2 |   |   |   | 3.0 |   |   |
| Total                             |       |                                                                                                     | 57,900     |                                                                                                     |       |                                                                                                     | 57,100     |   |   |   | — |   |   |   | — |   |   |   | 198.6 |   |   |   | 274.5 |   |   |
| Reserves below  infrastructure(9) |       |                                                                                                     | 26,600     |                                                                                                     |       |                                                                                                     | 23,000     |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| Total reserves(10)                |       |                                                                                                     | 84,500     |                                                                                                     |       |                                                                                                     | 80,100     |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |

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Notes:

        (1) At Kloof,reserves previously planned to be mined through the shaft decline at Shaft No.7will now be mined from current infrastructure at Shaft No. 4. Thisreclassification of reserves from Shaft No. 7 to Shaft No. 4 reducedthe reserves at Shaft No. 7, resulting in the cost base at that shaftbeing amortized over a shorter life than previously planned.

        (2) The Beatrixoperation, formerly called the Free State operation, was renamed following thesale of the St. Helena mine to Freegold on October 30, 2002. The increasein amortization at Beatrix in fiscal 2005 is due to a decrease in proven andprobable reserves.

        (3) Includes theformer Oryx mine, designated as Beatrix Shaft No. 4 or the West section.

        (4) As ofJune 30, 2003 and 2004, reserves of 6.970 million ounces and 10.450million ounces of gold, respectively, were attributable to Gold Fields, withthe remainder attributable to minority shareholders in the Tarkwa operation.The increase in amortization at Tarkwa in fiscal 2005 is due to thedepreciation of the new owner mining fleet and the new SAG mill commissionedduring the year.

        (5) As ofJune 30, 2003 and 2004, reserves of 0.640 million ounces and 0.640 millionounces were attributable to Gold Fields, with the remainder attributable tominority shareholders in the Damang operation.

        (6) The life ofmine for each operation shown in the above table differs from that shown in“Information on the Company—Gold Fields’ Mining Operations.” The information inthe above table is based on the above infrastructure proven and probablereserves at June 30, 2004 for fiscal 2004 whereas the life of mineinformation in Item 4 is based on both above and below infrastructure provenand probable reserves at June 30, 2005.

        (7) Theconsideration paid for the Australian operations in excess of the book value ofthe underlying net assets was allocated pro rata to the value of the underlyingassets, which affected the allocation of amortization between St. Ives andAgnew.

        (8) Amortizationincreased at St. Ives and Agnew due to an increase in ounces mined.

        (9) Belowinfrastructure reserves relate to mineralization which is located at a level atwhich an operation currently does not have infrastructure sufficient to allowmining operations to occur, but where the operation has made plans to installadditional infrastructure in the future which will allow mining to occur atthat level.

  (10) As ofJune 30, 2003 and 2004, reserves of 81.500 million ounces and 75.600million ounces of gold, respectively, were attributable to Gold Fields, withthe remainder attributable to minority shareholders in the Ghana operation.

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*Corporate expenditure*

Corporate expenditure was$22.5 million in fiscal 2005 compared to $20.3 million in fiscal 2004, anincrease of 10.8%. This increase was primarily due to the appreciation of theRand against the U.S. dollar. Rand costs remained constant at R140.0 million infiscal 2005.

*Employment termination costs*

In fiscal 2005, GoldFields incurred employment termination costs of $13.7 million as compared to$10.5 million in fiscal 2004. The increase in employee terminations costsresulted principally from higher retrenchments during fiscal 2005.

*Exploration expenditure*

Exploration expenditurewas $46.0 million in fiscal 2005, an increase of 15.3% from $39.9 million infiscal 2004. The increase was as a result of a deliberate effort to step upexploration activities, with $11.5 million spent in Africa in fiscal 2005,compared to $5.7 million in fiscal 2004. Exploration expenditure in fiscal 2005also included $14.3 million incurred at the APP, compared to $11.4 million infiscal 2004. See “Information on the Company—Exploration.” In addition, infiscal 2005 the costs associated with marketing the Biox® process wereaccounted for as Other (costs)/income, whereas in fiscal 2004 they wereincluded within exploration expenditure. See “Information on the Company—Researchand Development.”

*Impairment of assets*

For fiscal 2005, GoldFields had asset impairments of $233.1 million, as compared to assetimpairments of $72.7 million in fiscal 2004. During fiscal 2005, there was animpairment charge of $211.1 million relating to Beatrix North and Southsections (formerly Beatrix Shaft Nos. 1, 2 and 3). Beatrix is a low grade mineand therefore very sensitive to changes in its cost profile. Changes in thecost profile affect the pay limits, which in turn affects the reserves. Duringfiscal 2005, there were cost increases at Beatrix, which resulted in anincrease in the pay limit. Due to the increase in the pay limit, certainreserves at Shaft No. 2 (now part of the South section) and Vlakpanincluded in fiscal 2004 became uneconomical to mine and were therefore excludedfrom the 2005 life of mine profile. In addition, due to the restructuring atthe South section, certain areas were closed which further impacted the life ofmine plan.

Duringfiscal 2005, closures resulted in the following additional asset impairments:

·       atDriefontein, Shaft No. 10 shaft was closed, resulting in an impairment of$2.0 million;

·       atKloof, the No. 3 metallurgical plant was closed, resulting in animpairment of $1.8 million; and

·       atSt. Ives, the old mill was closed, resulting in an impairment of $9.8 million.

Also during fiscal 2005,an impairment charge was incurred at Living Gold, the rose project atDriefontein. See “Information on the Company—Living Gold.” As Living Gold isnot a gold asset, its valuation was based on its business plan using a longterm exchange rate of R8.51 to the euro, the currency in the markets where itanticipated making most of its sales, and a discounted cash flow valuationusing a real discount rate of 10%. This resulted in an impairment of $8.4million. The main reason for the impairment is that the original plan forecasta higher exchange rate of R9.87 to the euro and thus higher earnings.

During fiscal 2004,following a geological study at the Beatrix West Section and an associatedrevision of the ore reserve, the latest life-of-mine plans indicated thatfuture production of gold should be based on 2.0 million ounces as opposed to2.8 million ounces as previously estimated. At this level of extraction and ata gold price of $350 per ounce, the life-of-mine plans did not support thecarrying value of the shaft on an undiscounted cash flow basis. Accordingly, anasset impairment of $61.8 million was charged against income, which reduced thecarrying value of the Beatrix West Section to $11.9 million.

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During fiscal 2004, thepotential future income arising from existing and possible new contracts forBiox® was reevaluated. See “Information on the Company—Research andDevelopment.” This revised plan did not support the carrying value andaccordingly, an impairment write-down of $5.0 million was recorded, to reflectthe fair value of the Biox® patent of $15.0 million.

During fiscal 2004, newregulations were enacted in South Africa that will result in mining companiesforfeiting those mineral rights not likely to be mined or explored. GFL MiningServices held certain mineral rights to which this new regulation applies.Accordingly, an impairment write-off of $5.9 million was recorded for thoseminerals that would be forfeited as a result of this new regulation.

*Impairment of critical spares*

With the closure of theold St. Ives mill during fiscal 2005, $2.8 million worth of critical spareskept for the maintenance of the old plant were impaired as they had becomeredundant.

*Decrease in provision for post-retirement health carecosts*

Under the medical planwhich covers certain of its former employees, Gold Fields remains liable for50% of the employees’ medical contribution to the medical schemes after theirretirement. During fiscal 2005 and fiscal 2004, 21% and 6%, respectively, ofthese former employees and dependants were bought out of the scheme at a 15%premium. At June 30, 2005, approximately 243 (fiscal 2004: 510) formeremployees were covered under this plan.

In fiscal 2005 an amountof $4.2 million was credited to earnings, compared to $5.1 million in fiscal2004, in respect of Gold Fields’ obligations under this medical plan,representing an 18% decrease. The $4.2 million credit was the result of areversal of $4.5 million relating to the release of the cross subsidizationliability as a result of the buyout and a $2.2 million release as a result ofbenefits forfeited offset in part by the annual interest and service charge of$1.7 million and a $0.8 million charge relating to the 15% premium mentionedabove. In fiscal 2004, the credit was the result of a reversal of $6.2 millionrelating to the release of the cross subsidization liability as a result of thebuyout and a $2.6 million release as a result of benefits forfeited, offset inpart by the annual interest and service charge of $3.0 million and a $0.7million charge relating to the 15% premium.

*Accretion expense on environmental rehabilitation*

The rehabilitation chargefor fiscal 2005 was $11.5 million compared to $8.4 million in fiscal 2004. Theincrease was due primarily to the strengthening of the Rand against the U.S.dollar and decreases in the life of mines in South Africa.

*Share compensation cost*

During fiscal 2005 andfiscal 2004, Gold Fields had elected to follow APB No. 25 and its relatedinterpretations in accounting for its share option schemes. Under APB No. 25,because the exercise price of Gold Fields and its subsidiaries’ employee shareoptions equaled the market price of the underlying share on the date of thegrant, no compensation expense has historically been recognized in theconsolidated financial statements, other than on occasions where the terms ofshare option vesting schedules are modified or accelerated. During fiscal 2005however, as a result of the inability by participants to exercise their shareoptions during the period of the attempted Harmony hostile bid, Gold Fieldsextended the life of options for certain employees whose options wouldotherwise have expired by June 25, 2005. The Company accounted for themodification of the intrinsic value with a new measurement date and, since theoptions were fully vested on the modification date, recorded the incrementalcompensation cost of $2.1 million as an expense.

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*Harmony hostile bid costs*

On October 18, 2004,Harmony announced an unsolicited and hostile tender offer to acquire the entireissued share capital of Gold Fields. Gold Fields mounted a vigorous defense tothe offer, which continued during much of the remainder of fiscal year 2005.Gold Fields incurred costs of $50.8 million in defending against the Harmonyoffer which was expensed.

*IAMGold transaction costs*

On September 30,2004, Gold Fields, Gold Fields Ghana Holdings Limited, Gold Fields Guernsey andIAMGold, signed a definitive agreement which would have resulted in Gold Fieldscombining its assets situated outside the Southern African DevelopmentCommunity with those of IAMGold by means of a reverse takeover. On December 7,2004 this proposed transaction did not receive the required majority approvalby shareholders and it was therefore not completed. Gold Fields incurred costsof $9.3 million relating to the failed IAMGold deal during fiscal 2005 whichwas expensed.

*Interest and dividends*

Interest and dividendsincreased by $9.8 million or 50.5%, from $19.4 million in fiscal 2004 to $29.2million in fiscal 2005. Interest received on cash and cash equivalents was$26.4 million in fiscal 2005 as compared to $17.1 million in fiscal 2004,primarily due to higher average cash balances during fiscal 2005 compared tofiscal 2004. Dividends received were $2.8 million in fiscal 2005 as compared to$2.3 million in fiscal 2004.

*Finance (expense)/income*

Gold Fields recognized netfinance expense of $54.9 million in fiscal 2005 as compared to $12.2 million infiscal 2004. The main reason for the increase in fiscal 2005 was due to theMvela Loan being in place for the entire period of fiscal 2005, whereas infiscal 2004 it was only in place for three months. Net finance expense infiscal 2005 consisted of interest payments of $57.6 million, comprising $56.9million on the Mvela Loan and $0.7 million of miscellaneous interest payments.This was offset in part by a $2.7 million realized exchange gain on funds heldin Euros.

Net finance expense infiscal 2004 consisted of interest payments of $27.2 million, comprising $18.2million on the Mvela Loan and $9.0 million on the loans used to acquire St.Ives, Agnew and Damang, offset in part by a $3.6 million unrealized exchangegain on certain offshore funds held in Euros and a $11.4 million realizedexchange gain on the Australian loan.

*Unrealized gain on financial instruments*

Gold Fields recognized anunrealized gain of $4.9 million in fiscal 2005 compared to an unrealized gainof $39.2 million in fiscal 2004 relating to financial instruments.

The unrealized gain of$4.9 million in fiscal 2005 consisted of a $5.3 million unrealized gain on theAustralian dollar/US dollar currency financial instruments Gold Fields holds toallow it to participate in appreciation of the Australian dollar against theU.S. dollar and a $0.3 million unrealized gain on the International PetroleumExchange Gasoil call options Gold Fields entered into during fiscal 2005,offset in part by a $0.7 million negative mark-to-market valuation as at June 30,2005 in respect of the $30.0 million U.S. dollar/Rand currency financialinstruments Gold Fields holds to cover any U.S. dollar commitments payable fromSouth Africa. See “Quantitative and Qualitative Disclosures About Market Risk—ForeignCurrency Sensitivity—Foreign Currency Hedging Experience.”

Of the $39.2 millionunrealized gain in fiscal 2004, $40.2 million related to an unrealized gain onthe Australian dollar/U.S. dollar currency financial instruments, offset by a$1.0 million negative mark-to-market valuation as at June 30, 2004 of the$50.0 million U.S. dollar/Rand currency financial instruments 

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held at that time whichwere purchased to protect the Group’s commitment in respect of the Tarkwa millproject and the shift to owner mining projects of $159.0 million.

*Realized gain on financial instruments*

Gold Fields recognized arealized gain of $2.1 million in fiscal 2005 compared to a realized loss of$8.7 million in fiscal 2004 relating to financial instruments.

Of the $2.1 millionrealized gain in fiscal 2005, a $1.3 million gain was realized on thesettlement of the $50.0 million U.S. dollar/Rand currency financial instrumentsand $0.8 million related to the interest rate swap Gold Fields had entered intoin connection with the Mvela Loan.

Of the $8.7 millionrealized loss in fiscal 2004, a loss of $13.0 million was realized on the settlementof the U.S. dollar/Rand forward purchases offset by a $4.3 million gain on theU.S. dollar/Australian dollar financial instruments.

*Profit on disposal of listed investments*

Duringfiscal 2005, Gold Fields continued to liquidate certain non-current investments.The profit on the sale of these investments amounted to $8.1 million resultingfrom the following sales:

·       $6.2million from the sale of 36.0 million shares in Zijin Mining Group CompanyLimited;

·       $1.6million from the sale of 8.5 million shares in African Eagle Resources Plc; and

·       $0.3million from the sale of 1.3 million shares in Radius Gold Incorporated.

Duringfiscal 2004, Gold Fields liquidated certain non-current investments in order tofund foreign debt repayments. The profit on the sale of these investmentsamounted to $13.9 million resulting from the following sales:

·       $7.7million from the sale of 1.2 million shares in Harmony Gold Mining CompanyLimited/African Rainbow Minerals Limited;

·       $2.1million from the sale of 0.9 million shares in Chesapeake Gold Corporation;

·       $1.0million from the sale of 0.1 million shares in Glamis Gold Limited;

·       $1.5million from the sale of 2.5 million shares in Orozone Resources Inc.; and

·       $1.6 million from the saleof 1.3 million shares in Committee Bay.

*Profit on disposal of exploration rights*

During fiscal 2005 GoldFields sold its interest in the Angelina Project in Chile to its joint venturepartner Meridian for $7.5 million plus a 2% net smelter royalty on the majorityof land within the joint venture. As the interest had a nil cost, the proceedsof $7.5 million was also the profit.

*Profit on disposal of property, plant and equipment*

During fiscal 2005, GoldFields realised a net profit of $0.8 million profit from sales of surplusproperty, plant and equipment by the operating mines of the Group.

During fiscal 2004, GoldFields disposed of certain property, plant and equipment. The profit on thesale of this property, plant and equipment amounted to $0.3 million. Thiscomprises $0.3 million profit from miscellaneous asset sales by the operatingmines of the Group.

 

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*Profit on disposal of mineral rights*

During fiscal2004, mineral rights and associated assets relating to Driefontein’s block 1C11were sold for $45.7 million to AngloGold Ashanti, realizing a profit of $27.1million.

*Write-down of investments*

During fiscal2005 investments whose market value was lower than their original costs for aperiod of longer than 12 months were written-down by $7.7 million.

The $7.7 million comprised:

·       $5.4million on Mvelaphanda Resources Limited;

·       $0.4million on Conquest Mining Limited;

·       $0.3million on Oil Quest Resources Plc;

·       $0.7million on Lakota Resources; and 

·       $0.9million on Ridge Mining Plc.

During fiscal2004 no write down was required as there were no investments whose market valuewas lower than their original costs for a period of longer than 12 months.

*Write-down of mineral rights*

During fiscal2004, mineral rights held as trading stock to the value of $3.6 million werewritten-off. This was in line with new regulations in South Africa that willresult in mining companies forfeiting those mineral rights not likely to bemined or explored.

*Other (expenses)/income*

Other (expenses)/income decreased by $7.8 million, from $1.8 millionother income in fiscal 2004 to $6.0 million other expenses in fiscal 2005.Other income in fiscal 2005 consisted of $2.9 million in revenues, comprisedprincipally of mineral right sales and rent, which was more than offset bymiscellaneous cost items totaling $8.9 million which included:

·       auditorsfees and other costs relating to Gold Fields becoming compliant with therequirements of the Sarbanes-Oxley Act of 2002;

·       costsrelated to marketing Biox®, which prior to fiscal 2005 were accounted for underexploration expense;

·       the costof cash rewards given to all Gold Fields’ employees for the successful defenseof the Harmony hostile bid; and

·       additionalsundry professional fees incurred.

Other income infiscal 2004 consisted of $6.8 million in revenues, comprised principally ofmineral right sales, rent and a rebate received from JP Morgan net of $4.7million in other expenses comprised principally of payments to The BusinessTrust, an initiative involving a large number of companies in South Africaundertaking targeted job creation and capacity building programs, and sundryprofessional fees. There were no stock compensation charges in fiscal 2004.

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*Income and mining tax benefit/(expense)*

The table below sets forth Gold Fields’ effective tax rate for fiscal2004 and fiscal 2005, including normal and deferred tax.

| ** **                            | ** ** | **Year ended June 20,** | ** ** |
|---------------------------------------|------------|----------------------------------------|------------|
| ** **                            | ** ** | ** **                             | ** ** | **  2005  ** | ** ** | **  2004  ** | ** ** |
| Effective  tax benefit/(expense) rate |       |                                   | 35.1       | % |   |   | (14.3 | )% |   |
|                                       |            |                                        |            |  |  |  |  |  |  |  |  |

 

In fiscal 2005,the effective tax benefit rate of 35.1% differed from the maximum miningstatutory tax rate of 45% for Gold Fields and its subsidiaries as a whole,primarily due to the effect of the mining tax formula of $11.5 million(representing the tax-free status of the first 5% of mining revenue) on theSouth African mining operations’ taxable income, a $26.8 million creditdue to an increase in the tax values of the Australian operations following theconsolidation of St. Ives and Agnew for tax purposes and $8.4 million dueto the reduction in fiscal 2005 of the Ghanaian tax rates from 32.5% to 28.0%.The Australian tax legislation makes provision for companies that consolidatefor tax purposes to recalculate their tax values based on a market valuecalculation. The effect of these items was offset by an amount of $40.0 millionrelating to the non-deductibility of certain exceptional items, namely theHarmony hostile bid costs, the IAMGold transaction costs and exploration costsand by an amount of $21.8 million relating to foreign levies and royalties,which is included in the tax charge.

*Minority interests*

Minority interestsrepresented an expense of $20.6 million in fiscal 2005, compared to an expenseof $21.8 million in fiscal 2004. These amounts reflect the portion of the netincome of Gold Fields Ghana, Abosso and Living Gold attributable to theirminority shareholders. The minority shareholders’ interest was 28.9% in GoldFields Ghana and Abosso in fiscal 2005 and 2004, and 40% in Living Gold infiscal 2005 and 2004. Higher amounts due to the minority shareholders of GoldFields Ghana and Abosso were more than offset by the minority shareholders’share of the higher net loss of Living Gold in fiscal 2005 compared to fiscal2004.

*Net (loss)/income*

As a result ofthe factors discussed above, Gold Fields’ net loss was $206.2 million in fiscal2005 compared with net income of $48.9 million in fiscal 2004.

**Liquidity and Capital Resources**

***Cashresources***

*Operations*

Net cashprovided by operations in fiscal 2006 was $465.4 million compared to $181.9million in fiscal 2005. In fiscal 2006, Gold Fields’ realized gold priceincreased to an average of $524 per ounce compared to $422 per ounce in fiscal2005. The increase in the realized price more than offset the decline in ouncesof gold sold and resulted in revenues from product sales increasing by $388.9million from $1,893.1 million in fiscal 2005 to $2,282.0 million in fiscal2006.

The increasedrevenues were offset in part by a $121.0 million increase in production costs,which increased from $1,500.6 million in fiscal 2005 to $1,621.6 million infiscal 2006. Also, in fiscal 2005, Gold Fields incurred costs of $50.8 millionand $9.3 million on the Harmony hostile bid and the IAMGold transaction,respectively which did not recur in fiscal 2006. The net effect was a $361.9million increase in cash flow provided by operations before taxation andworking capital changes. This increase in cash 

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provided byoperations was partly offset by an increase in taxes paid of $16.4 million anda decrease in working capital changes of $35.5 million.

Net cashprovided by operations in fiscal 2005 was $181.9 million compared to $198.4million in fiscal 2004. In fiscal 2005, Gold Fields’ realized gold priceincreased to an average of $422 per ounce compared to $387 per ounce in fiscal2004. In addition, sales in fiscal 2005 increased by 0.082 million ounces,which together with the increase in the realized price, resulted in revenuesfrom product sales increasing by $186.9 million from $1,706.2 million in fiscal2004 to $1,893.1 million in fiscal 2005.

The increasedrevenues were offset in part by a $145.4 million increase in production costs,which increased from $1,355.2 million in fiscal 2004 to $1,500.6 million infiscal 2005. In addition Gold Fields incurred costs of $50.8 million and $9.3million on the Harmony hostile bid and the IAMGold transaction, respectively.The net effect of this was a $12.0 million increase in cash flow provided byoperations before taxation and working capital changes. The decrease in taxespaid of $37.3 million was largely offset by the $29.6 million increase inworking capital changes.

Althoughrevenues from Gold Fields’ South African operations are denominated in U.S.dollars, Gold Fields receives them in Rand, which are then subject to SouthAfrican exchange control limitations. See “Information on the Company—Regulatoryand Environmental Matters—South Africa—Exchange Controls.” As a result, thoserevenues are generally not available to service Gold Fields’ non-Rand debtobligations or to make investments outside South Africa without the approval ofthe South African Reserve Bank.

Revenues fromGold Fields’ Ghanaian and Australian operations are also denominated in U.S. dollars,but unlike in South Africa, Gold Fields receives them in U.S. dollars or isfreely able to convert them into U.S. dollars. These U.S. dollar amounts can beused by Gold Fields to service its U.S. dollar-denominated debt and tomake investments in its non-South African operations.

Gold Fieldsreceives revenues from its Venezuelan operations either in Bolivars, or U.S. dollars,depending on whether the sales are made locally or exported. To the extent GoldFields receives U.S. dollars, it must repatriate them to Venezuela andconvert them to Bolivars at the official exchange rate. In certaincircumstances, Gold Fields may be able to convert, or reconvert, as the casemay be, Bolivars to U.S. dollars, but there are restrictions on the uses forwhich such funds may be applied and any conversion at the official exchangerate is subject to approval by the relevant authorities. See “Information onthe Company—Regulatory and Environmental Matters—Venezuela—Exchange Controls.”

*Investing*

Net cashutilized in investing activities was $836.4 million in fiscal 2006 compared to$318.3 million in fiscal 2005. The increase in net cash utilized of $518.1million was primarily due to an increase in acquisition of subsidiaries of$415.6 million and an increase in purchase of listed investments of $133.1million, offset in part by a decrease in capital expenditure of $37.3 million.

Net cashutilized in investing activities was $318.3 million in fiscal 2005 compared to$400.2 million in fiscal 2004. The decrease in net cash utilized of $81.9million was primarily due to a decrease in capital expenditure of $60.2 millionand a decrease in purchases of investments of $49.0 million. In addition,proceeds on disposal of property, plant and equipment were lower by $46.6million in fiscal 2005 and $23.0 million was spent on the acquisition ofsubsidiaries in fiscal 2004.

Capitalexpenditure decreased by $62.3 million to $255.4 million in fiscal 2006compared to $317.7 million in fiscal 2005. Capital expenditure was $377.9million in fiscal 2004. In Rand terms, capital expenditure decreased toR1,794.8 million in fiscal 2006 from R1,973.6 million in fiscal 2005 and R2,607.6million in fiscal 2004. The decrease in capital expenditure was mainly due tothe lower spending on growth projects at 

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Tarkwa in Ghanaand St. Ives in Australia due to most of these projects having been completedin fiscal 2005.

Expenditure on Gold Fields’ major capital projects in fiscal 2006included:

·       $17.5million on the Beatrix Shaft No. 3 expansion project, as compared to $21.7million in fiscal 2005 and $24.7 million in fiscal 2004;

·       $16.9million on the Shaft No. 1 and Shaft No. 5 projects at Driefontein,as compared to $19.1 million in fiscal 2005 and $20.1 million in fiscal2004;

·       $6.6million on the Shaft No. 4 project at Kloof as compared to $16.9 millionin fiscal 2005 and $25.0 million in fiscal 2004;

·       $6.3million on the Kloof Shaft No. 1 pillar extraction, as compared to $1.7million in fiscal 2005 and $nil in fiscal 2004;

·       $14.1million on the new heap leach pads at Tarkwa, as compared to $10.9 million infiscal 2005 and $4.4 in fiscal 2004; and

·       $0.4million on the Songvang open pit at Agnew, as compared to $11.8 million infiscal 2005 and $nil in fiscal 2004.

There was noexpenditure on the St Ives mill expansion project (compared to $46.6 million infiscal 2005 and $45.7 million in fiscal 2004), the Tarkwa CIL processplant (as compared to $25.7 million in fiscal 2005 and $75.9 million in fiscal2004) or the Tarkwa owner mining project (as compared to $16.1 million infiscal 2005 and $55.3 million in fiscal 2004) as each of these projects wascompleted during fiscal 2005.

Proceeds on thedisposal of property, plant and equipment decreased from $10.2 million infiscal 2005 to $6.3 million in fiscal 2006. In both years this related to thedisposal of various mining assets by the South African and Australianmining operations. Proceeds on the disposal of property, plant and equipmentwas $56.8 million in fiscal 2004, consisting primarily of $45.7 millionreceived from the sale of Driefontein Block 1C11 to AngloGold.

Purchase oflisted investments increased from $30.4 million in fiscal 2005 to $163.5million in fiscal 2006.

The $163.5 million spent on the purchase of listed investments infiscal 2006 was made up of:

·       $133.5million invested in Western Areas Gold Mining Company Limited;

·       $24.5million invested in Sino Gold Limited;

·       $3.0million invested in Medoro Resources Limited;

·       $0.5million invested in Avoca Resources Limited;

·       $0.5million invested in Golden Star Resources Limited; and

·       $1.5million advanced to GBF, the open pit mining contractor at St Ives, in terms ofthe alliance agreement between St Ives and GBF to fund the purchase of miningequipment used on site.

Purchase oflisted investments decreased from $79.4 million in fiscal 2004 to $30.4 millionin fiscal 2005.

The $30.4 million spent on the purchase of listed investments in fiscal2005 was made up of:

·       $18.7million invested in Comaplex Corporation:

·       $1.5million invested in Avoca Resources Limited;

·       $1.5million invested in African Eagle Resources Plc on the exercising of warrantsheld;

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·       $6.8million lent to GBF, in terms of the alliance agreement between St. Ives andGBF to fund the purchase of mining equipment used on site; and

·       $1.9million on other investments.

Proceeds from the sale of listed investments decreased from $18.6million in fiscal 2005 to $2.8 million in fiscal 2006. The investment disposalscomprising the $2.8 million in fiscal 2006 were:

·       $1.5million from the sale of African Eagle Resources Plc shares;

·       $1.0million from the sale of TEBA Limited shares and the repayment of a loan previouslyadvanced to TEBA Limited; and

·       $0.3million from the sale of Sanu Resources Limited shares.

Proceeds from the sale of listed investments decreased from $29.3million in fiscal 2004 to $18.6 million in fiscal 2005. The investmentdisposals comprising the $18.6 million in fiscal 2005 were:

·       $13.9million from the sale pf Zijin Mining Group Company Limited shares

·       $3.2million from the sale of African Eagle Resources Plc shares; and

·       $1.5million from the sale of Radius Gold Incorporated shares.

During fiscal2005 Gold Fields received $7.5 million from the disposal of its interest in theAngelina exploration project in Chile to its joint venture partner MeridianGold Incorporated. The consideration for the sale also includes a 2% netsmelter royalty on the majority of land within the joint venture.

During fiscal 2006, Gold Fields acquired two new subsidiaries for atotal of $415.6 million.

·       On January 11,2006, Gold Fields acquired an 80.72% interest in La Cima for $40.5 million. La Cimais the holding company for the Cerro Corona Project.

·       Duringfiscal 2006, Gold Fields acquired the remaining shares it did not already ownto give it a 100% interest in Bolivar Gold Corporation. During fiscal 2004,Gold Fields acquired a 10.17% interest in Bolivar for $11.9 million. During November andDecember 2005, Gold Fields acquired another 4.28% interest in Bolivar for$13.2 million. On February 28, 2006, Gold Fields acquired the remaininginterest of 85.55% in Bolivar for $289.5 million ($295.4 million paid less cashacquired of $5.9 million). On that date, Gold Fields also made a loan of $72.4million to Bolivar which was part of the purchase consideration and wassubsequently capitalized. The total cash outflow, net of cash acquired, duringfiscal 2006 relating to the acquisition of Bolivar was $375.1 million

During fiscal2004, Gold Fields spent $23.0 million on the acquisition of the minorityinterest in the Arctic Platinum Project.

For its SouthAfrican operations, Gold Fields contributes to an environmental trust fund ithas established to provide for any environmental rehabilitation obligations andexpected closure costs relating to its mining operations. The amounts investedin the trust funds are classified as non-current assets and any income earnedon these assets is accounted for as interest income. The amount required to becontributed each year is calculated pursuant to a statutory formula, and canvary depending on how the fund’s investments performed, the lives of mine ofthe different South African operations and various other factors. During fiscal2006 Gold Fields South African operations contributed $11.0 million to theenvironmental trust fund compared to $6.5 million in fiscal 2005 and $6.0million in fiscal 2004. For the Ghana, Australia and Venezuela operations GoldFields does not contribute to a trust fund.

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*Financing*

Net cashprovided by financing activities was $78.6 million in fiscal 2006 as comparedto net cash utilized by financing activities of $11.4 million in fiscal 2005.The main reason for this movement was that fiscal 2006 included the proceeds ofthe $158.0 million loan raised in connection with the Bolivar acquisition. Thiswas partly offset by a decrease in minority funding of $40.9 million as aresult of minority shareholder loans of $23.0 million at Tarkwa being repaid infiscal 2006 as compared to loans of $17.9 million being received in fiscal2005.

During fiscal2005, $36.2 million was received on the close out of the interest rate swapentered into in connection with the Mvela loan.

Dividends paidamounted to $61.8 million in fiscal 2006 compared to $54.5 million in fiscal2005. The amount of dividends paid was higher than in fiscal 2005 principallydue to the higher net income on which the dividend is calculated. Dividend paymentsin fiscal 2006 amounted to Rand 394.5 million or 80 SA cents perordinary share as compared to Rand 344.5 million or 70 SA cents per ordinaryshare in fiscal 2005. During fiscal 2006, Tarkwa and Damang each paid dividendsand the minority shareholders’ share of these payments was $13.0 millioncompared to $17.3 million in fiscal 2005.

In fiscal 2006,$30.1 million was received as a result of share options exercised as opposed to$3.6 million in fiscal 2005. This increase was partly offset by the $11.7 millionrepurchase and cancellation of ordinary shares in fiscal 2006.

Net cashutilized in financing activities was $11.4 million in fiscal 2005 as comparedto net cash provided by financing activities of $682.2 million in fiscal 2004.The main reason for the movement was that fiscal 2004 included the proceeds ofthe $586.7 million loan ($591.3 million less costs of $4.6 million) raised as aresult of the Mvelaphanda transaction. See “—Overview—Mvelaphanda Transaction.”In addition, in fiscal 2004 Gold Fields raised $215.9 million in aninternational private placement of Gold Fields shares.

Dividends paidamounted to $54.5 million in fiscal 2005 compared to $92.6 million in fiscal2004. The amount of dividends paid was lower than in fiscal 2004 principallydue to the lower net income on which the dividend is calculated, partly offsetby the stronger Rand/US dollar exchange rate. Dividend payments in fiscal 2005amounted to Rand 344.5 million or 70 SA cents per ordinary share as compared toRand 669.1 million or 140 SA cents per ordinary share in fiscal 2004.During fiscal 2005, Tarkwa and Damang each paid dividends and the minorityshareholders’ share of these payments was $17.3 million.

In fiscal 2005,$3.6 million was received as a result of share options exercised, as comparedto $3.8 million in fiscal 2004. In fiscal 2004, Gold Fields repaid theremaining balances of $40.7 million of borrowings related to the acquisitionsof St. Ives, Agnew and Abosso.

**Credit Facilities**

As of the dateof this annual report, Gold Fields had committed unutilized banking facilities of$92.0 million available under the facility entered into in connection withthe acquisition of Bolivar, as discussed below, $150 million under theproject finance facility entered into to fund capital costs in connection withthe Cerro Corona Project and $1.8 billion available under the facilityentered into in connection with the proposed acquisition of South Deep. See “—RecentDevelopments.’’ Substantial contractual arrangements for uncommitted borrowingfacilities are maintained with several banking counterparties to meet GoldFields’ normal contingency funding requirements.

Gold Fields mayin the future undertake further acquisitions of mining assets. In the eventthat Gold Fields does undertake any such acquisition, it may need to incurfurther debt or arrange other financing to fund any costs of the acquisition,which could have an adverse effect on Gold Fields’ liquidity, includingincreasing its level of debt.

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***BolivarAcquisition***

During fiscal2006, Gold Fields acquired the remaining shares it did not already own to giveit a 100% interest in Bolivar Gold Corporation. During fiscal 2004, Gold Fieldshad acquired a 10.17% interest in Bolivar for $11.9 million. During November andDecember 2005, Gold Fields acquired another 4.28% interest in Bolivar for$13.2 million. On February 28, 2006, Gold Fields acquired the remaininginterest of 85.55% in Bolivar for $289.5 million ($295.4 million paid less cashacquired of $5.9 million). On that date, Gold Fields also made a loan of $72.4million to Bolivar which was part of the purchase consideration and wassubsequently capitalized.

On March 3,2006, Orogen a wholly-owned subsidiary of Gold Fields, entered into a US$250.0million syndicated loan term facility, or the Orogen Facility, with leadlenders Barclays Bank Plc and JP Morgan Europe Limited. The purpose of thefacility was to partly finance the acquisition of Bolivar Gold Corporation andto provide funding lines for general corporate purposes. Borrowings under thefacility are guaranteed by Gold Fields, GFIMSA and Gold Fields Holdings Company(BVI) Limited. In terms of the facility agreement, Gold Fields must maintain aconsolidated EBITDA to consolidated net finance charge ratio of at least 5 to 1and a consolidated net borrowing to consolidated EBITDA ratio of no more than2.5 to 1. There are also restrictions on the ability of Gold Fields andcertain of its subsidiaries to encumber their assets, dispose of assets orenter into a merger or corporate reconstruction. In connection with thisfacility Gold Fields paid an arrangement fee of $0.9 million and pays aquarterly commitment fee of 0.105% of any undrawn amounts and an agency fee ofUS$15,000 per annum. On March 9, 2006, Orogen drew down US$158.0 million.The loan bears interest at LIBOR plus a margin of 0.35% and is repayable on March 9,2009. In terms of the facility agreement, Gold Fields has the option to repaythe loan in whole or part by giving 10 days’ prior notice. The loan may not,however, be repaid prior to March 3, 2007. The $92.0 million remainingunder the facility is available for borrowing until March 9, 2009.

***MvelaLoan***

On March 17,2004, as part of the transaction involving the acquisition by Mvela Resourcesof a 15% beneficial interest in the South African gold mining assets ofGold Fields, Mvela Gold advanced Rand 4,139 million, or the Mvela Loan, toGFIMSA. The Mvela Loan has a term of five years, bears interest at a rate of10.57% per annum and is guaranteed by Gold Fields, Gold Fields Australia andGold Fields Company BVI. GFIMSA may elect to repay the Mvela Loan (togetherwith the present value of the then outstanding interest payment obligations andthe tax payable by Mvela Gold as a result of such repayment) at any timestarting 12 months after the Mvela Loan was advanced. While the Mvela Loan isoutstanding, Gold Fields and any of its material subsidiaries, which is definedas any subsidiary whose gross turnover in the most recently ended financialyear represents more than 5% of the consolidated gross turnover of Gold Fieldsand its subsidiaries may not, subject to certain exceptions, (i) sell,lease, transfer or otherwise dispose of any assets, (ii) enter into anymerger or similar transaction, or (iii) encumber its assets. The MvelaLoan will become immediately due and payable upon the occurrence of an event ofdefault. See “—Overview—Mvelaphanda Transaction.”

The Mvela Loanwas funded by way of commercial bank debt of approximately Rand 1,300 millionand mezzanine finance of approximately Rand 1,100 million, with the balance ofapproximately Rand 1,700 million being raised by way of aninternational private placement of shares of Mvela Resources. In connectionwith the mezzanine finance, Gold Fields subscribed for preference shares in anamount of Rand 200 million in Micawber. Further, Gold Fields subscribed forRand 100 million of the shares issued by Mvela Resources in the privateplacement. In addition, pursuant to the PIC Agreement, Gold Fields has effectivelyguaranteed the PIC Loan. Interest on the PIC loan accrues at the rate of14.25%, is compounded semi-annually and is payable in one lump sum at the endof the term of the loan. Under the terms of the PIC Agreement, the PIC has theright to require Gold Fields to assume all its rights and obligations under thePIC Loan, together with its underlying security, which consists of the PIC’s 

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proportionateshare of Mvela Gold’s rights under the Subscription and Share ExchangeAgreement and a guarantee of Rand 200 million from Mvela Resources, at a priceequal to the value of the principal and interest of the PIC Loan, if, at thetime the PIC Loan is due for repayment, Micawber does not repay the loan infull. Whether or not the PIC requires Gold Fields to assume its rights andobligations under the PIC loan, the PIC is obligated to pay a guarantee fee toGold Fields equal to 3.75% per annum of the value of the principal and interestpayable under the PIC Loan on the date on which the PIC Loan is repaid to thePIC.

GFIMSA appliedthe net proceeds of the Mvela Loan of $586.7 million (R4,139 million less R32 millionof costs at an exchange rate of R7.00 to $1.00) toward funding its acquisitionof Gold Fields’ South African mining operations and certain ancillaryassets and operations as part of an internal restructuring of Gold Fields. Inconnection with the Mvela Loan, GFIMSA entered into two interest rate swaps,both of which were designated as fair value hedges and which were accounted foras a single swap. The fixed rate receivable on the interest rate swap was equalto the interest rate payable on the loan from Mvela Gold and the floating ratepayable was the three month Johannesburg Inter-Bank Acceptance Rate, or JIBAR,plus a margin of 1.025%. The interest rate swap was closed out on June 3,2005 with the loan reverting to the fixed interest rate mentioned above. GoldFields realized mark-to-market gains on the swap of $36.2 million and interestrate credits of $14.8 million, giving a total gain of $51.0 million. Of the$36.2 million realized mark-to-market gain, $0.8 million was accounted for infiscal 2005 and $9.2 million in fiscal 2006 with the balance of $26.2 millionto be accounted for in fiscal 2007 to fiscal 2009. Of the $14.8 millioninterest credits, $12.9 million was accounted for in fiscal 2005 and thebalance of $1.9 million was accounted for in fiscal 2004. See “Quantitative andQualitative Disclosures about Market Risk—Interest Rate Sensitivity—InterestRate Hedging Experience.”

***LivingGold Facility***

On May 28,2004, Living Gold (Pty) Limited, or Living Gold, a subsidiary of GFIMSA,entered into a R16.6 million ($2.5 million at an exchange rate of R6.5150, thenoon buying rate on May 28, 2004) loan facility with the IndustrialDevelopment Corporation of South Africa, or the IDC. On November 24, 2004,Living Gold drew down the full amount of the facility. The facility bearsinterest at the prime overdraft rate of First National Bank of Southern AfricaLimited. On June 30, 2006, that rate was 11.0%. The loan is repayable in96 monthly installments beginning on July 1, 2006.

***AustraliaAcquisitions***

On November 26,2001, Gold Fields and several of its subsidiaries, including twonewly-established Australian subsidiaries, entered into a $250.0 millionsyndicated credit facility. Barclays Capital, the investment banking divisionof Barclays Bank plc, or Barclays, and Citibank, NA., or Citibank, acted asarrangers of the facility. The credit facility was used to fund Gold Fields’acquisition of St. Ives and Agnew from WMC with the balance to be used forgeneral corporate purposes. The facility bore interest at LIBOR plus 1.15% peryear and was subject to a commitment fee equal to 0.575% per year payablequarterly on all undrawn amounts under the facility.

The terms ofthe credit facility also required Gold Fields to maintain a foreign exchangehedging strategy over the life of the loan to reduce the impact of fluctuationsin the Australian dollar/U.S. dollar exchange rate on the cash flow from St.Ives and Agnew. See “Quantitative and Qualitative Disclosure About Market Risk—ForeignCurrency Sensitivity.” The facility consisted of a $160.0 million term loanfacility and a $90.0 million revolving credit facility. The principal of theterm loan facility was repayable in ten equal semi-annual installments overfive years, with the first repayment of $16.0 million paid in May 2002.During fiscal 2003, Gold Fields repaid $114.5 million of the $160.0 millionterm loan facility and repaid the full $5.0 million drawn down on the revolvingcredit facility. The repayments of $114.5 million included prepayments of $82.5million, which was funded in part from the proceeds on the sale of non-currentinvestments and dividends received from the Ghana operation. In January 2004,Gold Fields repaid the 

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balance owingon the term loan facility. The $90 million revolving credit facility wascancelled with effect from October 20, 2004.

***DamangAcquisition***

On January 23,2002, in connection with the purchase of Abosso, Gold Fields utilized the fullamount of $35.0 million available under a bilateral two-year term loan andletter of credit facility dated December 31, 2001 between Gold Fields andseveral of its subsidiaries and Barclays and Barclays Capital. During fiscal2003, Gold Fields made prepayments of $20.9 million on the $33.0 millionbilateral two-year term loan and the balance of $12.1 million was fully repaidby December 31, 2003.

**Capital expenditure**

Capitalexpenditure was $280.4 million in fiscal 2006, compared to $317.7 million in fiscal2005. See “—Liquidity and Capital Resources—Cash Resources—Investing.”Gold Fields expects to incur approximately Rand 4.3 billion ($685.7 million) incapital expenditure in fiscal 2007, which it expects to finance from internalsources and, to the extent required, credit facilities. Details regarding thespecific capital expenditure for each operation are found in the individualoperation sections under “Information on the Company—Gold Fields’ MiningOperations.”

**Contractual obligations and commitments asat June 30, 2006**

| ** **                                                     | ** ** | **Payments due by period** | ** ** |
|----------------------------------------------------------------|------------|-------------------------------------------|------------|
| ** **                                                     | ** ** | **Total**                                 | ** ** | **Less   12 months** | ** ** | **12-36  months** | ** ** | **36-60  months** | ** ** | **After 60  months** | ** ** |
| ** **                                                     | ** ** | **($ millions)**                     | ** ** |
| **Long-term debt(1)**                                          | ** ** | ** **                                | ** ** |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Mvelaphanda Gold (Proprietary) Limited(2)                      |       |                                      |       |   |   | ** ** |   |   |   | ** ** |   |   |   | ** ** |   |   |   | ** ** |   |
| Capital                                                        |       | 578.8                                     |       |   | — | ** ** |   |   | 578.8 | ** ** |   |   | — | ** ** |   |   | — | ** ** |   |
| Interest                                                       |       | 188.9                                     |       |   | 58.9 | ** ** |   |   | 130.0 | ** ** |   |   | — | ** ** |   |   | — | ** ** |   |
| Industrial Development Corporation of South Africa  Limited(3) |       |                                      |       |   |   | ** ** |   |   |   | ** ** |   |   |   | ** ** |   |   |   | ** ** |   |
| Capital                                                        |       | 2.4                                       |       |   | 0.3 | ** ** |   |   | 0.6 | ** ** |   |   | 0.6 | ** ** |   |   | 0.9 | ** ** |   |
| Interest                                                       |       | 1.2                                       |       |   | 0.3 | ** ** |   |   | 0.4 | ** ** |   |   | 0.3 | ** ** |   |   | 0.2 | ** ** |   |
| Syndicated term loan(4)                                        |       |                                      |       |   |   | ** ** |   |   |   | ** ** |   |   |   | ** ** |   |   |   | ** ** |   |
| Capital                                                        |       | 158.0                                     |       |   | — | ** ** |   |   | 158.0 | ** ** |   |   |   | ** ** |   |   |   | ** ** |   |
| Interest                                                       |       | 22.5                                      |       |   | 7.5 | ** ** |   |   | 19.0 | ** ** |   |   |   | ** ** |   |   |   | ** ** |   |
| Capital lease  obligations—building                       |       | 2.5                                       |       |   | 0.7 | ** ** |   |   | 1.4 | ** ** |   |   | 0.5 | ** ** |   |   | — | ** ** |   |
| **Other long-term obligations**                                | ** ** | ** **                                | ** ** |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Post-retirement  healthcare(5)                                 |       | 7.4                                       |       |   | 0.3 | ** ** |   |   | 0.6 | ** ** |   |   | 0.6 | ** ** |   |   | 5.9 | ** ** |   |
| Environmental  obligations(6)                                  |       | 146.4                                     |       |   | 3.5 | ** ** |   |   | 7.0 | ** ** |   |   | 7.0 | ** ** |   |   | 128.9 | ** ** |   |
| Total contractual cash obligations                             |       | 1,108.1                                   |       |   | 71.5 | ** ** |   |   | 895.8 | ** ** |   |   | 9.0 | ** ** |   |   | 135.9 | ** ** |   |

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Notes:

(1)           Gold Fields is party to certainlong-term credit facilities, entered into in connection with the Mvelaphandatransaction and the Bolivar acquisition, and by Living Gold (Pty) Limited withthe Industrial Development Corporation of South Africa Limited. See “—Liquidityand Capital Resources—Credit Facilities.”

(2)           On March 17, 2004,Mvelaphanda Gold advanced an amount of $591.3 million to GFIMSA. The loanamount is repayable five years from the date of advance and interest is payablesemi-annually. Pursuant to the Subscription and Share Exchange Agreement, uponrepayment of the Mvela Loan, Mvela Gold must subscribe for shares equal to 15%of GFIMSA’s outstanding share capital, including the newly issued shares. Inaddition, for a period of one year after the subscription by Mvela Gold of theGFIMSA shares, each of Gold Fields and Mvela Gold will be entitled to requirethe exchange of Mvela Gold’s GFIMSA shares for ordinary shares of Gold Fieldsof an equivalent value based on an exchange ratio equal to 15% of a discountedcash flow calculation as applied to 

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GFIMSA’soperations divided by the same calculation as applied to Gold Fields’operations, with certain adjustments. See “—Overview—General—MvelaphandaTransaction.”

(3)           On May 28, 2004 LivingGold entered into an agreement with the Industrial Development Corporation ofSouth Africa Limited in terms of which it would provide a $2.5 million loanfacility to Living Gold (Pty) Limited. The loan is repayable in 96 equalmonthly installments commencing on July 1, 2006.

(4)           On March 9, 2006, Orogenborrowed $158.0 million under a $250.0 million syndicated loan term facility.The loan is repayable on March 9, 2009.

(5)           Gold Fields’ provision forpost-retirement healthcare obligations increases annually based on the expectedincreases in the level of individual contributions in order to settle itsobligations to its former employees, set off by payments made on behalf ofcertain pensioners and dependants of former employees on a pay-as-you-go-basis.

(6)           Gold Fields makes full provision for all environmentalobligations based on the net present value of the estimated cost of restoringthe environmental disturbance that has occurred up to the balance sheetdate. This provision increases annually based on expected inflation. Managementbelieves that the provisions made for environmental obligations are adequate todirect the expected volume of such obligations. See “—Significant AccountingPolicies—Environmental rehabilitation costs.”

| ** **                       | ** ** | **Amounts of commitments expiring by period** | ** ** |
|----------------------------------|------------|------------------------------------------------------------------------|------------|
| ** **                       | ** ** | **Total**                                                              | ** ** | **Less than  12 months** | ** ** | **12-36  months** | ** ** | **36-60  months** | ** ** | **After 60  months** | ** ** |
| ** **                       | ** ** | **($ millions)**                                                  | ** ** |
| **Other commercial commitments** |       |                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Guarantees(1)                    |       | 29.2                                                                   |       |   | — |   |   |   | 27.7 |   |   |   | — |   |   |   | 1.5 |   |   |
| Capital  expenditure(2)          |       | 254.3                                                                  |       |   | 254.3 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| Funding  commitments(3)          |       | 4.5                                                                    |       |   | — |   |   |   | — |   |   |   | — |   |   |   | 4.5 |   |   |
| Total  commercial commitments    |       | 288.0                                                                  |       |   | 254.3 |   |   |   | 27.7 |   |   |   | — |   |   |   | 6.0 |   |   |

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Notes:

(1)           Guarantees consist of $27.7million to the Public Investment Commissioners with regard to the Mvela Loanand $1.5 million for numerous other obligations. Guarantees consisting of $27.6million committed to guarantee Gold Fields’ environmental obligations withrespect to its Ghanaian and Australian operations are fully provided for underthe provision for environmental rehabilitation and are not included in theamount above.

(2)           Capital expenditure consistsonly of amounts committed to external suppliers, although as of June 30,2006 an amount of $665.2 million in respect of capital expenditure had beenapproved by Gold Fields’ Board.

(3)           Funding commitments consist of a $4.5 millioncommitment to the New Africa Mining Fund, or NAMF. NAMF is a private equityfund incorporated in South Africa for the purpose of investing in junior miningopportunities in South Africa and the broader Africa continent. Gold Fields hascommitted R50 million ($6.7 million) of which $2.2 million has been funded todate.

**Workingcapital**

Managementbelieves that Gold Fields’ working capital resources, by way of internalsources and banking facilities, are sufficient to fund Gold Fields’ currentlyforeseeable future business requirements.

**Offbalance sheet items**

AtJune 30, 2006 Gold Fields had no off balance sheet items.

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**RecentDevelopments**

***Cerro Corona Facility***

***On November 14, 2006, Gold Fields La Cima S.A.entered into a US$150 million project finance facility agreement, or the CerroCorona Facility, with The Royal Bank of Scotland plc, Citigroup Global MarketsInc., The Bank of Nova Scotia, The Bank of Nova Scotia Trust Company of NewYork, Scotiabank Peru S.A.A. and other financial institutions, as set out inthe agreement. The terms of the Cerro Corona Facility are an upfrontarrangement fee of 1.2% and a margin over LIBOR of 0.45% during thepre-completion phase and between 1.25% and 1.75% thereafter. Scheduledprincipal repayments shall be made in 16 semi-annual installments of variousamounts ranging from 4.75% to 6.75% of the principal amount, beginning onJune 30, 2009. The final installment is due on the tenth anniversary ofthe signing date. The Cerro Corona Facility is secured by, among other things,pledges of and mortgages over the assets and properties of La Cima. La Cima canelect to make optional prepayments and must make prepayments in certaincircumstances, including with the proceeds of any bond issuances up to amaximum of US$100 million. See “Information on the Company—Exploration—GoldFields’ Exploration Projects—Cerro Corona Project.’’ Gold Fields expects La Cimato begin borrowing under this facility during the second quarter of fiscal 2007.***

***Acquisition of South Deep***

On September 11, 2006, Gold Fieldsentered into an agreement with Barrick and PDG Aureate Limited, a subsidiary ofBarrick, to acquire, for a total consideration of US$1.525 billion, the entireissued share capital of BGSA, which holds a 50% interest in the Barrick Gold—WesternAreas Joint Venture, an unincorporated entity which owns South Deep and inwhich Barrick and Western Areas Limited, or Western Areas, each hold aninterest of 50%. At Gold Fields’ option, the total consideration can be paid incash, or US$1.2 billion can be paid in cash******with theremaining US$325 million payable through the issue to Barrick of such number ofGold Fields ordinary shares as is obtained by dividing the US$325 millionconsideration by the volume weighted average price of Gold Fields’ ADRs on theNew York Stock Exchange for the five trading days preceding the closing of thetransaction. Following receipt of the requisite approval from the competitionauthorities in South Africa on November 22, 2006, this transaction is scheduledto close on November 30, 2006.

In conjunction with Gold Fields’acquisition of Barrick’s stake in the Barrick Gold—Western Areas Joint Ventureand after consultation with the Board of Directors of Western Areas, GoldFields undertook to make an offer (referred to herein as the Offer) to acquirethe entire issued share capital of Western Areas not already owned by GoldFields. Under the Offer, which Gold Fields commenced on October 30, 2006,Western Areas shareholders will receive 35 Gold Fields shares for every 100Western Areas shares validly tendered into the Offer. The Offer will close on adate to be announced by Gold Fields.

In support of the Offer, Gold Fields, JCIand certain subsidiaries of JCI entered into an agreement on September 11,2006, pursuant to which, on November 16, 2006 Gold Fields acquired 27 millionWestern Areas shares from one of the subsidiaries (referred to herein as theJCI Transaction) in exchange for the issue to JCI of 9,450,000 Gold Fieldsshares (a ratio of 35 Gold Fields shares for every 100 Western Areas shares). Inaddition, pursuant to the agreement and with effect from November 14,2006, the JCI subsidiaries granted Gold Fields call options and Gold Fieldsgranted the JCI subsidiaries put options, subject to certain restrictions andconditions, in respect of the balance of a further 9.96 million Western Areasshares held by the JCI subsidiaries. In addition, in connection with theacquisition of Western Areas, Gold Fields will be acquiring the Western Areashedge book. See “Information on the Company—Recent Developments—Acquisition ofSouth Deep.’’

In connectionwith the acquisition of BGSA and the proposed acquisition of Western Areas,GFIMSA entered into a US$1.8 billion credit facility, or the GFIMSA Facility,with Citibank, N.A. London Branch, 

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J.P. MorganPlc, J.P. Morgan Europe Limited and other financial institutions, as setout in the agreement, on November 24, 2006. Borrowings under the GFIMSAFacility are to be used in connection with the acquisition of BGSA or forgeneral working capital requirements in connection with or arising from theacquisition of BGSA and/or the acquisition of Western Areas shares pursuant tothe JCI Transaction and the Offer. Borrowings under the GFIMSA Facility areguaranteed by Gold Fields, Gold Fields Holdings Company (BVI) Limited andOrogen. Under the GFIMSA Facility, Gold Fields has made covenants, includingfinancial covenants, and is subject to restrictions and limitations which are substantiallysimilar to those in the Orogen Facility. Under the GFIMSA Facility, Gold Fieldsmust pay a commitment fee of 0.15% until three months from the date of theagreement, then 0.20% until six months from the date of the agreement and 0.25%thereafter on any undrawn amounts. Gold Fields is obligated to pay an upfrontarrangement fee of 0.15% and further arrangement fees of 0.10% of the unborrowedamount as of the first day of each of the fourth and seventh months from thedate of the agreement, as well as an agency fee of US$5,000 per annum. Amountsborrowed under the GFIMSA Facility bear interest at LIBOR plus a margin of0.40% until three months from the date of the agreement, 0.50% until sixthmonths from the date of the agreement and 0.60% thereafter. All amountsborrowed must be repaid by November 22, 2007. Gold Fields is obligated toapply the proceeds of any equity issue (other than the issue of shares pursuantto its employee and non-executive director share incentive schemes), debtcapital markets issue or loan markets financing to the prepayment of borrowingsunder the facility. See “Information on the Company—Recent Developments.”

**Trendand Outlook**

During the first quarter of fiscal 2007,Gold Fields’ operating profit and net earnings were lower than that achieved inthe fourth quarter of fiscal 2006. The lower operating profit and net earningswere primarily due to the lower gold price and slightly lower production.

Gold productionis expected to be similar at the Gold Fields operations in the second quarterof fiscal 2007 compared with the first quarter. Operating margins, including atthe South African operations, are expected to remain fairly constant.

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**ITEM 6:DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

**Directors**

GoldFields’ directors and their ages and positions are:

| **Name**                   | ** ** | ** ** | ** ** | **Age** | ** ** | **Position**                                    | ** ** | **Term Expires(1)** | ** ** |
|----------------------------|------------|------------|------------|---------|------------|-------------------------------------------------|------------|--------------------------|------------|
| Alan J. Wright             |       |       | 65         |    |       | Non-executive  Chairman                         |       | November, 2008           |       |
| Ian D. Cockerill           |       |       | 52         |    |       | Executive  Director and Chief Executive Officer |       | November, 2009           |       |
| Nicholas J.  Holland       |       |       | 48         |    |       | Executive  Director and Chief Financial Officer |       | November, 2009           |       |
| Rupert L.  Pennant-Rea     |       |       | 58         |    |       | Non-executive  Director                         |       | November, 2009           |       |
| Chris I. von  Christierson |       |       | 59         |    |       | Non-executive  Director                         |       | November, 2008           |       |
| J. Michael  McMahon        |       |       | 60         |    |       | Non-executive  Director                         |       | November, 2007           |       |
| Patrick J. Ryan            |       |       | 69         |    |       | Non-executive  Director                         |       | November, 2007           |       |
| Tokyo M. G.  Sexwale       |       |       | 53         |    |       | Non-executive  Director                         |       | November, 2007           |       |
| Kofi Ansah                 |       |       | 62         |    |       | Non-executive  Director                         |       | November, 2007           |       |
| Artem Grigorian            |       |       | 49         |    |       | Non-executive  Director                         |       | November, 2008           |       |
| John G. Hopwood(2)         |       |       | 58         |    |       | Non-executive  Director                         |       | November, 2009           |       |
| Donald M. J. Ncube(2)      |       |       | 59         |    |       | Non-executive Director                          |       | November, 2009           |       |

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Notes:     

(1)    Termsexpire on the date of the annual general meeting in that year.

(2)    John G.Hopwood and Donald M. J. Ncube joined the Board on February 15, 2006 asnon-executive directors.

Christopher M. T.Thompson, Bernard R. van Rooyen and Gordon R. Parker retired as directors atGold Fields’ annual general meeting on November 17, 2005. SergeiStefanovich resigned as a director on March 16, 2006. Jakes G. Gerwelresigned as a director at Gold Fields’ annual general meeting on November 10,2006. Michael Sosnovski was appointed as a director in November 2005 andresigned on March 16, 2006. Mr. Stefanovich and Mr. Sosnovskihad been appointed as representatives of OJSC MMC Norilsk Nickel, which wasGold Fields’ largest shareholder until March 3, 2006, when the disposal ofits shares was completed.

**Directors andExecutive Officers**

The Articles of Association of Gold Fields providethat the Board must consist of no less than four and no more than 15 directorsat any time. The Board currently consists of 12 directors.

The Articles of Association of Gold Fields providethat the longest serving one-third of directors must retire from office at eachannual general meeting of Gold Fields. Retiring directors normally makethemselves available for re-election and are re-elected at the annual generalmeeting at which they retire. Executive directors may be appointed by contractwith Gold Fields for a maximum period of five years at any one time and aresubject to retirement by rotation. The number of directors serving under thesecontracts must at all times be less than one-half of the total number ofdirectors in office. None of Gold Fields’ current executive directors isappointed to his position as director by contract.

According to theArticles of Association, the Board may meet as it sees fit and set its ownpolicies for adjourning and otherwise regulating meetings. Any director maycall for a meeting at any time by requesting the company secretary to convene ameeting. The Articles of Association further provide for the following:

·       nodirector may vote on any contract or arrangement in which the director isinterested. If the director votes on a transaction in which the director isinterested, the director’s vote will not be 

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counted. An interesteddirector, with certain exceptions, will not be counted for the purpose ofdetermining a quorum for a meeting in which the Board is voting on a resolutionin which the director is interested. However, a director who owns ordinaryshares may vote his ordinary shares at a general meeting of shareholders in atransaction in which the director is interested;

·       adirector may not vote as a director to determine his own compensation. Theshareholders in a general meeting determine the fees for directors from time totime. Any additional compensation, including compensation for additionalservices performed by the director for Gold Fields’ business or for otherpositions in Gold Fields or its subsidiaries, must be determined by a quorum ofdirectors whose compensation would not be affected by the decision; and

·       thedirectors are not required to hold shares in Gold Fields, although ashareholding qualification may be imposed at any meeting of the shareholders.

The Articles of Association do not provide for amandatory retirement age for directors. However, Gold Fields’ Board charterspecifies the retirement age to be 72 years of age.

Some of the executive officers and all of theexecutive directors are members of the boards of directors of varioussubsidiaries of Gold Fields.

The business address ofall the directors and executive officers of Gold Fields is 24 St. Andrews Road,Parktown 2193, South Africa, the address of Gold Fields’ head office.

**Executive Directors**

*IanD. Cockerill*BSc Geology Hons, London; MSc Mining,Royal School of Mines. Executive Director and Chief Executive Officer. Mr. Cockerillhas been a Director of Gold Fields since October 1999 and became ChiefExecutive Officer on July 1, 2002. Mr. Cockerill was Chief OperatingOfficer and Managing Director of Gold Fields from October 1999 to June 30,2002. Mr. Cockerill has over 31 years’ experience in the mining industry.Prior to joining Gold Fields he was the Executive Officer for BusinessDevelopment and African International Operations for AngloGold Ashanti Limited.

*Nicholas J. Holland*BComm,BAcc, Witwatersrand; CA (SA). Executive Director and Chief Financial Officer. Mr. Hollandhas been a Director of Gold Fields since February 1998 and ExecutiveDirector of Finance since March 1998. On April 15, 2002, Mr. Holland’stitle changed to Chief Financial Officer. Mr. Holland has 26 years’experience in financial management. Mr. Holland is a director of Teba BankLimited and Teba Controlling Company Ltd. Prior to joining Gold Fields he wasFinancial Director and Senior Manager of Corporate Finance of Gencor Limited. Mr. Hollandis also a director of Rand Refinery Limited.

**Non-ExecutiveDirectors**

*AlanJ. Wright*CA (SA). Chairman of the Board of Directors.Mr. Wright was unanimously elected to succeed Mr. Thompson asNon-executive Chairman of the Board upon Mr. Thompson’s retirement on November 17,2005. Prior to that, Mr. Wright had been Deputy Chairman of Gold Fieldssince November 1997. Prior to September 1998, Mr. Wright was theChief Executive Officer of Gold Fields of South Africa Limited. Mr. Wrightis currently retired and is not a Director of any other company.

*RupertL. Pennant-Rea*BA, Trinity College, Dublin; MA,University of Manchester. Non-executive Director. Mr. Pennant-Rea wasappointed as a Director of Gold Fields on July 1, 2002. Mr. Pennant-Reais a Chairman of Henderson Group plc and is also a Director of British AmericanTobacco plc, Sherritt International Corporation, Rio Narcea Gold Mines Limited,First Quantum Minerals Ltd. and a number of other companies. Previously, Mr. Pennant-Reawas editor of *The Economist* and Deputy Governorof the Bank of England.

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*ChrisI. von Christierson*BComm, Rhodes; MA, Cambridge.Non-executive Director. Mr. von Christierson has been a Director of GoldFields since February 1999. Mr. von Christierson is the Chairman ofRio Narcea Gold Mines Limited and a Director of Southern Prospecting (UK)Limited. Mr. von Christierson was previously Chairman of Golden ShamrockMines Limited and Managing Director of East Daggafontein Mines Limited.

*J.Michael McMahon*BSc (Mechanical Engineering), Glasgow.Non-executive Director. Mr. McMahon has been a Director of Gold Fieldssince December 1999. Mr. McMahon serves as Non-executive Director ofImpala Platinum Holdings Limited and Murray & Roberts HoldingsLimited. Previously, Mr. McMahon was Chairman and an Executive Director ofGencor Limited and Executive Chairman and Chief Executive Officer of ImpalaPlatinum Holdings Limited.

*PatrickJ. Ryan*PhD (Geology), Witwatersrand. Non-executiveDirector. Dr. Ryan has been a Director of Gold Fields since May 1998.Dr. Ryan is the Chairman of Frontera Copper Corporation. Dr. Ryan wasalso previously the Executive Vice President, Mining Operations, Developmentand Exploration at Phelps Dodge Corporation.

*TokyoM. G. Sexwale*Certificate of Business Studies,University of Botswana, Lesotho and Swaziland. Non-executive Director. Mr. Sexwalehas been a Director of Gold Fields since January 2001. Mr. Sexwale isExecutive Chairman of Mvelaphanda Holdings (Proprietary) Limited and ofMvelaphanda Resources Ltd. Mr. Sexwale is also Chairman of Global VillageNetwork Technologies (Proprietary) Limited and Chairman of Trans Hex GroupLimited. In addition, Mr. Sexwale is a Director of several of MvelaphandaHoldings (Proprietary) Limited’s subsidiaries, ABSA Bank Limited, NorthamPlatinum Limited, The Rand Mutual Assurance Company Limited, Arcus Gibb(Proprietary) Limited, ABSA Group Limited, African Maritime Logistics(Proprietary) Limited, Dunrose Investments 29 (Proprietary) Limited, GemDiamond Mining Corporation Limited, Global Village Network (Proprietary)Limited, Kas Maine Mining (Proprietary) Limited, Mvelamasefield (Proprietary)Limited, Mocoh Services South Africa (Proprietary) Limited, Power Matla(Proprietary) Limited, RMA Life Assurance Company Limited, Tepco Petroleum(Proprietary) Limited, Ecobank (Ghana) Limited and Voltex Holdings Limited.

*KofiAnsah*BSc (Mechanical Engineering) UST Ghana, Msc(Metallurgy) Georgia Institute of Technology. Non-executive Director. Mr. Ansahwas appointed a Director of Gold Fields in April 2004. Previously, Mr. Ansahwas a Director of Ecobank (Togo) Limited. He is a Director of MetropolitanInsurance Company and Aluworks Limited.

*ArtemGrigorian*PhD Political Science and History, USSRAcademy of Science. Non-executive Director. Dr. Grigorian was appointed aDirector in June 2005. He is vice-president and shareholder of RussianSpectra Company and chief executive officer of RMC.

*JohnGavin Hopwood* B.Com (Natal) C.A., S.A. Non-executiveDirector. Mr. Hopwood was appointed a Director of Gold Fields in February 2006.Previously, he was Director and head of the Mergers and Acquisitions divisionat Ernst & Young Corporate Finance. Mr. Hopwood is a formerExecutive Director of Corporate Finance and Non-Technical services for GoldFields of South Africa Limited (1995 to 1998) and he was previously a Directorat Axon Corporate Services (Pty) Ltd (“Axon”) from February 1999 to August 2001.

*Donald M. J. Ncube*BAEconomics and Political Science, Fort Hare University, Post Graduate Diploma inLabor Relations, Strathclyde University, Scotland, Graduate MSc ManpowerStudies, University of Manchester, Diploma in Financial Management.Non-executive Director. Mr. Ncube was appointed a Director of Gold Fieldsin February 2006. Previously, he was an alternate director of AngloAmerican Industrial Corporation Limited and Anglo American Corporation of SouthAfrica Limited, a director of AngloGold Ashanti Limited as well asNon-Executive Chairman of South African Airways. He is currently 

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chairman of Rare Pipe andFittings, executive chairman of Cincinnati Mining S.A. and a director of OctoMining and Badimo Gas.

***Retired Non-executive Director***

The following former director retired at Gold Fields’annual general meeting held on November 10, 2006.

*Jakes G. Gerwel*BAHons, Western Cape; Licentiate (Germanic Philology) D HumSc (hc), Missouri;D.litt et Phil (magna cum laude), Brussels. Non-executive Director. ProfessorGerwel was appointed a Director of Gold Fields on August 21, 2002.Professor Gerwel is the Chancellor of Rhodes University and Nelson MandelaDistinguished Professor in the Humanities at the University of Western Cape.Professor Gerwel is Non-executive Chairman and a Director of BrimstoneInvestment Corporation Limited, South African Airways (Proprietary) Limited andAfricon Engineering International. Professor Gerwel is also a Director ofEducor, Naspers, Media 24, Old Mutual Life Holdings (SA) Limited and a numberof other companies. Previously, Professor Gerwel served in the Office of thePresident of South Africa as Director-General and Cabinet Secretary, and asHead of the South African President’s Office and the South African CabinetOffice.

**Executive Officers**

*JamesT. Nkosi*(55), D.Com (Leadership in Performance andChange), M.Com (Business Management), Rand Afrikaans University; Masters inIndustrial and Organizational Psychology, University of Cape Town. Senior VicePresident, Head of Human Resources and Transformation. On July 1, 2004, Dr. Nkosiwas appointed Senior Vice President, Human Resources and Transformation. Since July 2002,Dr. Nkosi had served as Vice President Human Resources, South AfricanOperations, Gold Fields. Prior to that Dr. Nkosi was an Executive Managerat Eskom for 12 years and a Transformation Director at Standard Bank for fouryears.

*JamesW. D. Dowsley*(48), BSc (Mining Engineering),Witwatersrand. Senior Vice President, Corporate Development. Mr. Dowsleyhas been General Manager of Corporate Development at Gold Fields since March 1998.On April 15, 2002, Mr. Dowsley’s title changed to Senior VicePresident, Corporate Development. Prior to his appointment as General Managerof Corporate Development, Mr. Dowsley served as General Manager of NewBusiness, and also as Manager of the Mineral Economics Division of Gold Fieldsof South Africa Limited.

*CraigJ. Nelsen*(54), BA (Geology), Montana; MSc (Geology),New Mexico. Executive Vice President, Head of Exploration. President and CEO ofGold Fields Exploration, Inc. Since April 1999, Mr. Nelsen hasserved as Senior Vice President of Exploration for Gold Fields and Presidentand Chief Executive Officer of Gold Fields Exploration, Inc. On April 15,2002, Mr. Nelsen’s title changed to Executive Vice President, Exploration.Mr. Nelsen was previously Chairman and Chief Executive Officer ofMetallica Resources Incorporated.

*BrendanI. Walker*(47) BSc (Mining Engineering),Witwatersrand. Executive Vice President, Head of South African Operations. Mr. Walkerwas appointed as Executive Vice President and Head of South African Operationswith effect from March 1, 2006. Previously, Mr. Walker held theposition of Managing Director and Head of Operations at Gold Fields Ghana. Hisprevious experience in the mining industry extends over 20 years, serving in anumber of positions at Gold Fields, including mine manager at GreensideColliery, West Driefontein and Beatrix.

*NerinaBodasing*(31), BSc (Natal), Hons (UDW), Post graduatediploma Business Management (Natal). Vice President, Head of InvestorRelations. With effect from November 1, 2006, Ms. Bodasing has heldthe position of Vice President and Head of Investor Relations. Prior to thisappointment, Ms. Bodasing held the position of Investor Relations VicePresident. Ms. Bodasing joined Gold Fields in May 2003 as 

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Manager, Investor Relations. Her previous experienceincludes working at UBS in equity sales and strategy research.

*JanW. Jacobsz*(45), BA, Rand Afrikaans University. SeniorVice President, Head of Corporate Affairs. On April 15, 2002, Mr. Jacobszwas appointed Senior Vice President and Head of Investor Relations andCorporate Affairs. Currently, he is Senior Vice President and Head of CorporateAffairs, to which position he was appointed on November 1, 2006. Since January 1998,Mr. Jacobsz had served as Manager and Senior Manager of Investor Relationsand Corporate Affairs of Gold Fields. Prior to that Mr. Jacobsz wasProgram Manager of the Vulindlela Transformation Program for Gold Fields ofSouth Africa Limited and Administrator of The Gold Fields Foundation.

*JohnA. Munro*(38), BSc (Chemical Engineering), Cape Town.Executive Vice President, Head of Corporate Development. Mr. Munro wasappointed to his current position as Executive Vice President and Head ofCorporate Development on November 17, 2005. Prior to this appointment, Mr. Munroheld the position as Head of International Operations. Previously, he alsoserved as Senior Vice President and Head of International Operations, SeniorManager and General Manager of Corporate Development for Gold Fields andAssistant Manager of the Property Division of Gold Fields of South AfricaLimited.

*TerenceP. Goodlace*(47), National Higher DiplomaMetalliferous Mining; BComm, Unisa; MBA, Wales. Executive Vice President, Headof International Operations. Mr. Goodlace was appointed Executive VicePresident and Head of International Operations on November 17, 2005.Previously, Mr. Goodlace served as Senior Vice President of StrategicPlanning and Senior Manager for Corporate Finance for Gold Fields.Additionally, Mr. Goodlace was the Manager of various Gencor Limitedmines.

*Michael D. Fleischer*(45),BProc, University of Witwatersrand, Advanced Taxation Certificate, Universityof South Africa. Executive Vice President, General Counsel. Mr. Fleischerwas appointed to his current position of Executive Vice President and GeneralCounsel, with effect from November 1, 2006. Previously, he acted asPartner in the Corporate Services Department at Webber Wentzel Bowens.

**Company Secretary**

*Cain Farrel*(56),FCIS, MBA, Southern Cross University, Australia. Mr. Farrel was appointedCompany Secretary on May 1, 2003. Mr. Farrel is past President of theSouthern African Institute of Chartered Secretaries and Administrators.Previously, Mr. Farrel served as Senior Divisional Secretary ofAngloAmerican Corporation of South Africa.

**Board of DirectorsCommittees**

In order to ensure good corporate governance, theBoard has formed an Audit Committee, a Compensation Committee, a Nominating andGovernance Committee and a Safety, Health, Environment and Community Committee.All the committees are comprised exclusively of non-executive Directors. Allcommittees are chaired by an independent non-executive director. Theremuneration of non-executive directors for their service on the variouscommittees has been approved by the shareholders. Following the retirement ofChristopher M. T. Thompson, Alan J. Wright succeeded Mr. Thompson asChairman of the Board.

The Audit Committee monitors and reviews Gold Fields’accounting controls and procedures, including the effectiveness of the Group’sinformation systems and other systems of internal control; the effectiveness ofthe internal audit function; reports of both external and internal auditors;quarterly reports, the annual report and the annual financial statements; theaccounting policies of the Group and any proposed revisions thereto; externalaudit findings, reports and fees, and the approval thereof; and compliance withapplicable legislation and requirements of regulatory authorities and GoldFields’ Code of Ethics. Membership of the Audit Committee is as follows:

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John G. Hopwood (chairman)J. Michael McMahonRupert L. Pennant-ReaKofi Ansah

Effective May 2006, John G. Hopwood replaced J.Michael McMahon as chairman of the Audit Committee. Prior to Jakes G. Gerwel’sretirement in November 2006, he was a member of the Audit Committee.

The Compensation Committee establishes thecompensation philosophy of Gold Fields and the terms and conditions ofemployment of executive directors and other executive officers. Membership ofthe Compensation Committee is as follows:

Chris I. von Christierson (chairman)J. Michael McMahonAlan J. WrightTokyo M. G. SexwaleDonald M. J. Ncube

Prior to Sergei Stefanovich’s resignation in March 2006,he was a member of the Compensation Committee. Effective from May 2006,Donald M. J. Ncube joined the Compensation Committee as a member.

The Safety, Health, Environment and CommunityCommittee reviews adherence to occupational health, safety and environmentalstandards by Gold Fields. The Committee seeks to minimize mining-relatedaccidents, to ensure that the Company’s operations are in compliance with allenvironmental regulations and to establish policy in respect of HIV/AIDS andhealth matters. Membership of the Safety, Health, Environment and CommunityCommittee is as follows:

Patrick J. Ryan (chairman)Kofi AnsahArtem GrigorianJohn G. HopwoodDonald M. J. Ncube

Prior to his resignation in March 2006, MichaelSosnovski was a member of the Safety, Health, Environment and CommunityCommittee. As a result of the reconstitution of this Committee in November 2005and following various retirements, Artem Grigorian, John G. Hopwood and DonaldM. J. Ncube joined the Safety, Health, Environment and Community Committee asnew members during the course of fiscal 2006.

The Nominating and Governance Committee develops andimplements policy on corporate governance issues, develops the policy andprocess for evaluating nominations to the Board of Directors, identifies successorsto the Chairman and Chief Executive Officer and considers selection androtation of the Board committee members. Membership of the Nominating andGovernance Committee is as follows:

Alan J. Wright (chairman)Patrick J. RyanRupert L. Pennant-ReaArtem Grigorian

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**Executive Committee**

GoldFields’ Executive Committee meets on a regular basis to discuss and makedecisions on strategic issues facing Gold Fields. The composition of theExecutive Committee (with areas of responsibility indicated) is as follows:
| Ian D. Cockerill      | Chairman                           |
|-----------------------|------------------------------------|
| Nicholas J.  Holland  | Finance and Commercial Services    |
| James T. Nkosi        | Human Resources and Transformation |
| James W. D.  Dowsley  | Corporate Development              |
| Craig J. Nelsen       | Exploration                        |
| Brendan I. Walker     | South African Operations           |
| Nerina Bodasing       | Investor Relations                 |
| Jan W. Jacobsz        | Corporate Affairs                  |
| John A. Munro         | Corporate Development              |
| Terence P.  Goodlace  | International Operations           |
| Michael D.  Fleischer | General Counsel                    |
| Cain Farrel           | Company Secretary                  |

 

As a consequence ofexecutive management changes made during fiscal 2006, Brendan I. Walker assumedresponsibility for South African Operations, replacing Michael J. Prinsloo, whowas appointed CEO of the Gold Fields Business and Leadership Academy. TerenceP. Goodlace replaced John A. Munro as Head of International Operations and Mr. Munrowas appointed Executive Vice President and Head of Corporate Development.Additionally, on October 25, 2006, Gold Fields announced the appointmentof Nerina Bodasing to the Executive Committee, as Vice President and Head ofInvestor Relations, with effect from November 1, 2006. This portfolio waspreviously held by Jan W. Jacobsz, but he will remain on the committee asSenior Vice President and Head of Corporate Affairs. With effect from November 1,2006, Michael D. Fleischer joined the Executive Committee as Executive VicePresident and General Counsel.

**OperatingCommittees**

Gold Fields’ Operating Committees meet on a regularbasis to discuss and make decisions on high level operational issues facingGold Fields’ operations. The Operating Committee was restructured in July 2006,as a result of the increased spread of operations and to cater for differingtime zones.

South African OperatingCommittee composition:
| Brendan I. Walker     | Chairman of the Operating Committee and Executive  Vice President and Head of South Africa Operations |
|-----------------------|-------------------------------------------------------------------------------------------------------|
| Charl Keyter          | Commercial Manager                                                                                    |
| Vishnu Pillay         | Vice President and Head of Operations—Driefontein                                                |
| Philip A. Schoeman    | Vice President and Head of Operations—Beatrix                                                    |
| Peter L. Turner       | Vice President and Head of Operations—Kloof                                                      |
| Dana Roets            | Vice President—Technical Services                                                                |
| Cornelus W. Du Toit   | Senior Manager—Human Resources                                                                   |
| Moya Hayhurst         | Assistant Company Secretary                                                                           |
| Petrus C. Pienaar     | Mvelaphanda Representative                                                                            |
| Bernard R. van Rooyen | Mvelaphanda Representative                                                                            |

 

187

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InternationalOperating Committee composition:
| Terence P. Goodlace | Chairman of the Operating Committee and Executive  Vice President and Head of International Operations |
|---------------------|--------------------------------------------------------------------------------------------------------|
| Peter McArdle       | Vice President Technical Services and Strategic  Planning—International Operations                |
| Wian Kriel          | Senior Manager—Human Resources International  Operations and Projects                             |
| Alan Ashworth       | Vice President of Ghanaian Operations                                                                  |
| Howard Stevenson    | Vice President of Venezuelan Operation                                                                 |
| Neville Bergin      | Vice President of Australian Operations                                                                |

 

**Compensation ofDirectors and Officers**

During the fiscal year ended June 30, 2006, theaggregate compensation paid or payable to directors and executive officers ofGold Fields as a group was approximately Rand 38 million, including allsalaries, fees, bonuses and contributions during such period to providepension, retirement or similar benefits for directors and executive officers ofGold Fields, of which Rand 3 million was due to pension scheme contributionsand life insurance, and Rand 11 million was due to bonus andperformance-related payments.

188

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Thefollowing table presents information regarding the compensation paid by GoldFields for the year ended June 30, 2006 to its directors:

| ** **                    | ** ** | **Board fees** | ** ** | **Committee  fees** | ** ** | **Travel  allowance(1)** | ** ** | **Salary** | ** ** | **Bonuses and  performance  related  payments(2)** | ** ** | **Pension  scheme  contributions** | ** ** | **Total**  | ** ** |
|-------------------------------|------------|---------------------|------------|---------------------|------------|--------------------------|------------|------------|------------|---------------------------------------------------------|------------|------------------------------------|------------|------------|------------|
| ** **                    | ** ** | **(in Rand)**  | ** ** |
| **Executive Directors**       | ** ** |                | ** ** | ** **          |       |                     | ** ** | ** ** |       |                                                    | ** ** | ** **                         |       | ** ** | ** ** |   | ** ** | ** ** |   |   | ** ** | ** ** |   | ** ** | ** ** |
| Ian D. Cockerill              |       |                | —     | ** **          |       |                     | —     | ** ** |       |                                                    |       | ** **                         |       | 4,130,031  | (3)        |   | 2,600,000 | ** ** |   |   | 634,616 | ** ** |   | 7,364,647 |   |
| Nicholas J. Holland           |       |                | —     | ** **          |       |                     | —     | ** ** |       |                                                    |       | ** **                         |       | 2,408,736  | (3)        |   | 2,300,000 | ** ** |   |   | 384,912 | ** ** |   | 5,093,648 |   |
| **Non-executive Directors**   | ** ** |                | ** ** | ** **          |       |                     | ** ** | ** ** |       |                                                    | ** ** | ** **                         |       | ** ** | ** ** |   | ** ** | ** ** |   |   | ** ** | ** ** |   | ** ** | ** ** |
| Alan J. Wright                |       |                | 703,125    | ** **          |       |                     | 83,500     | ** ** |       |                                                    | 48,000     | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 834,625 |   |
| Kofi Ansah                    |       |                | 181,250    | ** **          |       |                     | 67,500     | ** ** |       |                                                    | 225,600    | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 474,350 |   |
| J. Michael McMahon            |       |                | 181,250    | ** **          |       |                     | 155,416    | ** ** |       |                                                    | 48,000     | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 384,666 |   |
| Patrick J. Ryan               |       |                | 181,250    | ** **          |       |                     | 139,000    | ** ** |       |                                                    | 201,600    | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 521,850 |   |
| Tokyo M. G. Sexwale           |       |                | 181,250    | ** **          |       |                     | 94,125     | ** ** |       |                                                    | 48,000     | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 323,375 |   |
| Chris I. von Christierson     |       |                | 173,125    | ** **          |       |                     | 136,750    | ** ** |       |                                                    | 177,600    | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 487,475 |   |
| Rupert L. Pennant-Rea         |       |                | 181,250    | ** **          |       |                     | 110,125    | ** ** |       |                                                    | 153,600    | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 444,975 |   |
| Jakes G. Gerwel(4)            |       |                | 148,750    | ** **          |       |                     | 65,750     | ** ** |       |                                                    | 48,000     | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 262,500 |   |
| Artem Grigorian               |       |                | 181,250    | ** **          |       |                     | 49,625     | ** ** |       |                                                    | 24,000     | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 254,875 |   |
| John J. Hopwood(5)            |       |                | 45,625     | ** **          |       |                     | 40,208     | ** ** |       |                                                    | —     | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 85,833 |   |
| Donald M. J. Ncube(5)         |       |                | 45,625     | ** **          |       |                     | 34,625     | ** ** |       |                                                    | —     | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 80,250 |   |
| Christopher M. T. Thompson(6) |       |                | 380,556    | ** **          |       |                     | —     | ** ** |       |                                                    | 168,000    | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 548,556 |   |
| Bernard R. van Rooyen(6)      |       |                | 78,125     | ** **          |       |                     | 72,375     | ** ** |       |                                                    | 48,000     | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 198,500 |   |
| Gordon R. Parker(6)           |       |                | 78,125     | ** **          |       |                     | 59,500     | ** ** |       |                                                    | 168,000    | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 305,625 |   |
| Sergei Stefanovich(7)         |       |                | 143,958    | ** **          |       |                     | 13,208     | ** ** |       |                                                    | 100,800    | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 257,967 |   |
| Michael Sosnovski(7)          |       |                | 65,833     | ** **          |       |                     | 13,208     | ** ** |       |                                                    | 28,800     | ** **                         |       | —     |       |   | — | ** ** |   |   | — | ** ** |   | 107,842 |   |
| Total                         |       |                | 2,950,347  | ** **          |       |                     | 1,134,916  | ** ** |       |                                                    | 1,488,000  | ** **                         |       | 6,538,767  |       |   | 4,900,000 | ** ** |   |   | 1,019,528 | ** ** |   | 18,031,558 |   |

----

Notes:

(1)           A travel allowance was introduced for non-executivedirectors, with effect from January 1, 2005, and was approved at the AGMheld on November 16, 2004. The payments shown are for an 18-monthperiod, from January 1, 2005 through June 30, 2006, to reflect thefull period for which travel allowance payments were made in fiscal 2006.

(2)           Reflects bonuses for performance in fiscal year 2005,which were paid in fiscal year 2006.

(3)           Mr. Cockerill’s and Mr. Holland’s employmentagreements provide for a portion of their total remuneration to be determinedin U.S. dollars. Under these employment agreements, Mr. Cockerill’s andMr. Holland’s salaries are included as a component of their gross annualremuneration package which also includes pension contributions and other items.See “—Executive Directors’ Terms of Employment.”

(4)           Retired from the Board in November 2006.

(5)           Appointed to the Board in February 2006.

(6)           Retired from the Board in November 2005.

(7)           Resigned from the Board in March 2006.

189

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Shareoptions and restricted shares outstanding and held by directors, formerdirectors and current executive officers as of November 15, 2006 were, tothe knowledge of Gold Fields’ management, as follows:

| Name                        | ** ** | ** ** | ** ** | **Options to   purchase   ordinary   shares** | ** ** | **Share   appreciation   rights   (SARS)** | ** ** | **Restricted   shares** | ** ** | **Option/   SARS   exercise   price (in   Rand)** | ** ** | **Expiration/   settlement date** | ** ** |
|-----------------------------|------------|------------|------------|----------------------------------------------------|------------|--------------------------------------------|------------|-------------------------|------------|--------------------------------------------------------|------------|----------------------------------------|------------|
| **Executive Directors**     | ** ** | ** ** |       |                                               | ** ** | ** **                                 |       | ** **              |       |                                                   | ** ** | ** **                             |       | ** ** | ** ** |
| Ian D. Cockerill            |       | 77,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 20.90      |                                   |       | December 24, 2006 |   |
|                             |       | 50,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 46.23      |                                   |       | December 12, 2008 |   |
|                             |       | 91,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 125.37     |                                   |       | July 2, 2009 |   |
|                             |       | 41,200     |       |                                               | —     |                                       |       | —                  |       |                                                   | 84.17      |                                   |       | March 17, 2010 |   |
|                             |       | 36,700     |       |                                               | —     |                                       |       | —                  |       |                                                   | 93.49      |                                   |       | August 19, 2010 |   |
|                             |       | 37,500     |       |                                               | —     |                                       |       | —                  |       |                                                   | 83.18      |                                   |       | March 3, 2011 |   |
|                             |       | 37,500     |       |                                               | —     |                                       |       | —                  |       |                                                   | 76.75      |                                   |       | October 22, 2011 |   |
|                             |       | 37,500     |       |                                               | —     |                                       |       | —                  |       |                                                   | 67.93      |                                   |       | February 25, 2012 |   |
|                             |       | 75,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 63.65      |                                   |       | May 23, 2012 |   |
|                             |       | —     |       |                                               | 19,500     |                                       |       | —                  |       |                                                   | 125.28     |                                   |       | March 24, 2012 |   |
|                             |       | —     |       |                                               | —     |                                       |       | 17,900                  |       |                                                   | —     |                                   |       | March 24, 2009 |   |
| Nicholas J.  Holland        |       | 40,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 46.23      |                                   |       | December 12,  2008 |   |
|                        |       | 23,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 125.37     |                                   |       | July 2, 2009 |   |
|                        |       | 17,700     |       |                                               | —     |                                       |       | —                  |       |                                                   | 84.17      |                                   |       | March 17, 2010 |   |
|                        |       | 15,800     |       |                                               | —     |                                       |       | —                  |       |                                                   | 93.49      |                                   |       | August 19, 2010 |   |
|                        |       | 19,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 83.18      |                                   |       | March 3, 2011 |   |
|                        |       | 19,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 76.75      |                                   |       | October 22, 2011 |   |
|                        |       | 19,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 67.93      |                                   |       | February 25, 2012 |   |
|                        |       | 38,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 63.65      |                                   |       | May 23, 2012 |   |
|                        |       | —     |       |                                               | 11,550     |                                       |       | —                  |       |                                                   | 125.28     |                                   |       | March 24, 2012 |   |
|                        |       | —     |       |                                               | —     |                                       |       | 9,600                   |       |                                                   | —     |                                   |       | March 24, 2009 |   |
| **Non-Executive Directors** | ** ** | ** ** |       |                                               | ** ** | ** **                                 |       | ** **              |       |                                                   | ** ** | ** **                             |       | ** ** | ** ** |
| Alan J. Wright              |       | 25,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 43.70      |                                   |       | February 6, 2007 |   |
|                             |       | 10,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 110.03     |                                   |       | December 12, 2007 |   |
|                             |       | 10,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 88.38      |                                   |       | November 27, 2008 |   |
|                             |       | 10,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 68.59      |                                   |       | February 18, 2010 |   |
|                             |       | —     |       |                                               | —     |                                       |       | 3,000                   |       |                                                   | —     |                                   |       | November 17, 2008 |   |
|                             |       | —     |       |                                               | —     |                                       |       | 2,800                   |       |                                                   | —     |                                   |       | November 10, 2009 |   |
| J. Michael  McMahon         |       | 10,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 110.03     |                                   |       | December 12,  2007 |   |
|                        |       | 10,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 88.38      |                                   |       | November 27, 2008 |   |
|                        |       | 10,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 68.59      |                                   |       | February 18, 2010 |   |
|                        |       | —     |       |                                               | —     |                                       |       | 3,000                   |       |                                                   | —     |                                   |       | November 17, 2008 |   |
|                        |       | —     |       |                                               | —     |                                       |       | 1,900                   |       |                                                   | —     |                                   |       | November 17, 2009 |   |
| Gordon R. Parker            |       | —     |       |                                               | —     |                                       |       | 3,000                   |       |                                                   | —     |                                   |       | November 17,  2008 |   |
| Patrick J. Ryan             |       | 10,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 110.03     |                                   |       | December 12,  2007 |   |
|                             |       | 10,000     |       |                                               | —     |                                       |       | —                  |       |                                                   | 88.38      |                                   |       | November 27, 2008 |   |
|                             |       | —     |       |                                               | —     |                                       |       | 3,000                   |       |                                                   | —     |                                   |       | November 17, 2008 |   |
|                             |       | —     |       |                                               | —     |                                       |       | 1,900                   |       |                                                   | —     |                                   |       | November 17, 2009 |   |

190

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| Tokyo M. G. Sexwale        |       | 5,000      |       |   | —     |       |   | —     |   |   | 43.70      |       |   | February 6,  2007  |       |
|----------------------------|------------|------------|------------|--------|------------|------------|--------|------------|--------|--------|------------|------------|--------|-------------------------|------------|
|                       |       | 7,000      |       |   | —     |       |   | —     |   |   | 110.03     |       |   | December 12, 2007  |       |
|                       |       | 10,000     |       |   | —     |       |   | —     |   |   | 88.38      |       |   | November 27, 2008  |       |
|                       |       | 5,700      |       |   | —     |       |   | —     |   |   | 68.59      |       |   | February 18, 2010  |       |
|                       |       | —     |       |   | —     |       |   | 3,000      |   |   | —     |       |   | November 17, 2008  |       |
|                       |       | —     |       |   | —     |       |   | 1,900      |   |   | —     |       |   | November 17, 2009  |       |
| Bernard R. van Rooyen      |       | —     |       |   | —     |       |   | 3,000      |   |   | —     |       |   | November 17,  2008 |       |
| Chris I. von Christierson  |       | 10,000     |       |   | —     |       |   | —     |   |   | 110.03     |       |   | December 12,  2007 |       |
|                            |       | 10,000     |       |   | —     |       |   | —     |   |   | 88.38      |       |   | November 27, 2008  |       |
|                            |       | —     |       |   | —     |       |   | 3,000      |   |   | —     |       |   | November 17, 2008  |       |
|                            |       | —     |       |   | —     |       |   | 1,900      |   |   | —     |       |   | November 17, 2009  |       |
| Rupert L.  Pennant-Rea     |       | 5,000      |       |   | —     |       |   | —     |   |   | 110.03     |       |   | December 12,  2007 |       |
|                       |       | 10,000     |       |   | —     |       |   | —     |   |   | 88.38      |       |   | November 27, 2008  |       |
|                       |       | 10,000     |       |   | —     |       |   | —     |   |   | 68.59      |       |   | February 18, 2010  |       |
|                       |       | —     |       |   | —     |       |   | 3,000      |   |   | —     |       |   | November 17, 2008  |       |
|                       |       | —     |       |   | —     |       |   | 1,900      |   |   | —     |       |   | November 17, 2009  |       |
| Jakes G. Gerwel(1)         |       | —     |       |   | —     |       |   | 3,000      |   |   | —     |       |   | November 17,  2008 |       |
|                            |       | —     |       |   | —     |       |   | 1,200      |   |   | —     |       |   | November 17, 2009  |       |
| Kofi Ansah                 |       | 6,700      |       |   | —     |       |   | —     |   |   | 68.59      |       |   | February 18,  2010 |       |
|                       |       | —     |       |   | —     |       |   | 3,000      |   |   | —     |       |   | November 17, 2008  |       |
|                       |       | —     |       |   | —     |       |   | 1,900      |   |   | —     |       |   | November 17, 2009  |       |
| Christopher M. T. Thompson |       | —     |       |   | —     |       |   | 3,000      |   |   | —     |       |   | November 17,  2008 |       |
| Donald M. J Ncube          |       | —     |       |   | —     |       |   | 800        |   |   | —     |       |   | November 10,  2009 |       |
| John G. Hopwood            |       | —     |       |   | —     |       |   | 800        |   |   | —     |       |   | November 10,  2009 |       |
| Artem Grigorian            |       | —     |       |   | —     |       |   | 1,900      |   |   | —     |       |   | November 10,  2009 |       |
| **Executive Officers**     | ** ** | ** ** | ** ** |   | ** ** | ** ** |   | ** ** |   |   | ** ** | ** ** |   | ** **              | ** ** |
| James W. D. Dowsley        |       | 14,700     |       |   | —     |       |   | —     |   |   | 46.23      |       |   | December 12, 2008  |       |
|                            |       | 7,700      |       |   | —     |       |   | —     |   |   | 84.17      |       |   | March 17, 2010     |       |
|                            |       | 6,900      |       |   | —     |       |   | —     |   |   | 93.49      |       |   | August 19, 2010    |       |
|                            |       | 7,500      |       |   | —     |       |   | —     |   |   | 83.18      |       |   | March 3, 2011      |       |
|                            |       | 7,500      |       |   | —     |       |   | —     |   |   | 76.75      |       |   | October 22, 2011   |       |
|                            |       | 7,500      |       |   | —     |       |   | —     |   |   | 67.93      |       |   | February 25, 2012  |       |
|                            |       | 15,000     |       |   | —     |       |   | —     |   |   | 63.65      |       |   | May 23, 2012       |       |
|                            |       | —     |       |   | 5,925      |       |   | —     |   |   | 125.28     |       |   | March 24, 2012     |       |
|                            |       | —     |       |   | —     |       |   | 4,100      |   |   | —     |       |   | March 24, 2009     |       |
| Craig J. Nelsen            |       | 22,800     |       |   | —     |       |   | —     |   |   | 154.65     |       |   | May 24, 2009       |       |
|                       |       | 17,000     |       |   | —     |       |   | —     |   |   | 84.17      |       |   | March 17, 2010     |       |
|                       |       | 33,200     |       |   | —     |       |   | —     |   |   | 73.80      |       |   | May 1, 2010        |       |
|                       |       | 15,900     |       |   | —     |       |   | —     |   |   | 93.49      |       |   | August 19, 2010    |       |
|                       |       | 15,000     |       |   | —     |       |   | —     |   |   | 83.18      |       |   | March 3, 2011      |       |
|                       |       | 15,000     |       |   | —     |       |   | —     |   |   | 76.75      |       |   | October 22, 2011   |       |
|                       |       | 15,000     |       |   | —     |       |   | —     |   |   | 67.93      |       |   | February 25, 2012  |       |
|                       |       | 30,000     |       |   | —     |       |   | —     |   |   | 63.65      |       |   | May 23, 2012       |       |
|                       |       | —     |       |   | 9,075      |       |   | —     |   |   | 125.28     |       |   | March 24, 2012     |       |

191

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|                     |   | — |   |   | — |   |   | 6,800  |   |   | — |   |   | March 24, 2009     |   |
|---------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-------------------------|--------|
| Brendan I. Walker   |   | 7,400  |   |   | — |   |   | — |   |   | 84.17  |   |   | March 17, 2010     |   |
|                     |   | 22,000 |   |   | — |   |   | — |   |   | 46.23  |   |   | December 12, 2008  |   |
|                     |   | 14,700 |   |   | — |   |   | — |   |   | 93.49  |   |   | August 19, 2010    |   |
|                     |   | 7,500  |   |   | — |   |   | — |   |   | 83.18  |   |   | March 3, 2011      |   |
|                     |   | 7,500  |   |   | — |   |   | — |   |   | 76.75  |   |   | October 22, 2011   |   |
|                     |   | 7,500  |   |   | — |   |   | — |   |   | 67.93  |   |   | February 25, 2012  |   |
|                     |   | 15,000 |   |   | — |   |   | — |   |   | 63.65  |   |   | May 23, 2012       |   |
|                     |   | 30,000 |   |   | — |   |   | — |   |   | 111.66 |   |   | January 3, 2013    |   |
|                     |   | — |   |   | 9,075  |   |   | — |   |   | 125.28 |   |   | March 24, 2012     |   |
|                     |   | — |   |   | — |   |   | 6,800  |   |   | — |   |   | March 24, 2009     |   |
| Nerina Bodasing     |   | 2,600  |   |   | — |   |   | — |   |   | 68.40  |   |   | February 1,  2012  |   |
|                |   | 2,600  |   |   | — |   |   | — |   |   | 63.65  |   |   | May 23, 2012       |   |
|                |   | — |   |   | 3,300  |   |   | — |   |   | 125.28 |   |   | March 24, 2012     |   |
|                |   | — |   |   | — |   |   | 1,200  |   |   | — |   |   | March 24, 2009     |   |
| Jan W. Jacobsz      |   | 8,500  |   |   | — |   |   | — |   |   | 46.23  |   |   | December 12,  2008 |   |
|                     |   | 11,900 |   |   | — |   |   | — |   |   | 154.65 |   |   | May 24, 2009       |   |
|                     |   | 5,500  |   |   | — |   |   | — |   |   | 84.17  |   |   | March 17, 2010     |   |
|                     |   | 5,000  |   |   | — |   |   | — |   |   | 93.49  |   |   | August 19, 2010    |   |
|                     |   | 7,500  |   |   | — |   |   | — |   |   | 83.18  |   |   | March 3, 2011      |   |
|                     |   | 7,500  |   |   | — |   |   | — |   |   | 76.75  |   |   | October 22, 2011   |   |
|                     |   | 7,500  |   |   | — |   |   | — |   |   | 67.93  |   |   | February 25, 2012  |   |
|                     |   | 15,000 |   |   | — |   |   | — |   |   | 63.65  |   |   | May 23, 2012       |   |
|                     |   | — |   |   | 3,950  |   |   | — |   |   | 125.28 |   |   | March 24, 2012     |   |
|                     |   | — |   |   | — |   |   | 4,100  |   |   | — |   |   | March 24, 2009     |   |
| John A. Munro       |   | 12,000 |   |   | — |   |   | — |   |   | 46.23  |   |   | December 12,  2008 |   |
|                |   | 18,500 |   |   | — |   |   | — |   |   | 92.95  |   |   | February 27, 2009  |   |
|                |   | 7,500  |   |   | — |   |   | — |   |   | 84.17  |   |   | March 17, 2010     |   |
|                |   | 34,800 |   |   | — |   |   | — |   |   | 93.49  |   |   | August 19, 2010    |   |
|                |   | 15,000 |   |   | — |   |   | — |   |   | 83.18  |   |   | March 3, 2011      |   |
|                |   | 15,000 |   |   | — |   |   | — |   |   | 76.75  |   |   | October 22, 2011   |   |
|                |   | 15,000 |   |   | — |   |   | — |   |   | 67.93  |   |   | February 25, 2012  |   |
|                |   | 30,000 |   |   | — |   |   | — |   |   | 63.65  |   |   | May 23, 2012       |   |
|                |   | — |   |   | 9,075  |   |   | — |   |   | 125.28 |   |   | March 24, 2012     |   |
|                |   | — |   |   | — |   |   | 6,800  |   |   | — |   |   | March 24, 2009     |   |
| Terence P. Goodlace |   | 9,500  |   |   | — |   |   | — |   |   | 154.65 |   |   | May 24, 2009       |   |
|                     |   | 6,600  |   |   | — |   |   | — |   |   | 84.17  |   |   | March 17, 2010     |   |
|                     |   | 5,900  |   |   | — |   |   | — |   |   | 93.49  |   |   | August 19, 2010    |   |
|                     |   | 7,500  |   |   | — |   |   | — |   |   | 83.18  |   |   | March 3, 2011      |   |
|                     |   | 7,500  |   |   | — |   |   | — |   |   | 76.75  |   |   | October 22, 2011   |   |
|                     |   | 7,500  |   |   | — |   |   | — |   |   | 67.93  |   |   | February 25, 2012  |   |
|                     |   | 15,000 |   |   | — |   |   | — |   |   | 63.65  |   |   | May 23, 2012       |   |
|                     |   | 30,000 |   |   | — |   |   | — |   |   | 111.66 |   |   | January 3, 2013    |   |
|                     |   | — |   |   | 9,075  |   |   | — |   |   | 125.28 |   |   | March 24, 2012     |   |
|                     |   | — |   |   | — |   |   | 6,800  |   |   | — |   |   | March 24, 2009     |   |

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| James T. Nkosi                              |   | 17,600    |   |   | — |   |   | —  |   |   | 116.85 |   |   | August 22, 2009   |   |
|---------------------------------------------|--------|-----------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|------------------------|--------|
|                                        |   | 16,000    |   |   | — |   |   | —  |   |   | 119.90 |   |   | January 2, 2010   |   |
|                                        |   | 4,900     |   |   | — |   |   | —  |   |   | 93.49  |   |   | August 19, 2010   |   |
|                                        |   | 7,500     |   |   | — |   |   | —  |   |   | 83.18  |   |   | March 3, 2011     |   |
|                                        |   | 7,500     |   |   | — |   |   | —  |   |   | 62.25  |   |   | July 2, 2011      |   |
|                                        |   | 7,500     |   |   | — |   |   | —  |   |   | 67.93  |   |   | February 25, 2012 |   |
|                                        |   | 15,000    |   |   | — |   |   | —  |   |   | 63.65  |   |   | May 23, 2012      |   |
|                                        |   | —    |   |   | 1,975  |   |   | —  |   |   | 125.28 |   |   | March 24, 2012    |   |
|                                        |   | —    |   |   | — |   |   | 4,100   |   |   | — |   |   | March 24, 2009    |   |
| Total issued in fiscal 2006(2)              |   | 60,000    |   |   | 82,500 |   |   | 101,200 |   |   | — |   |   | —                 |   |
| Total outstanding at November 15, 2006 |   | 1,588,500 |   |   | 82,500 |   |   | 120,100 |   |   | — |   |   | —                 |   |

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Notes:

(1)           Jakes G. Gerwel retired from the Board atthe Gold Fields’ annual general meeting on November 10, 2006.

(2)           Issued in fiscal 2006, pursuant to TheGold Fields Limited 2005 Share Plan, The Gold Fields Limited 2005 Non-ExecutiveShare Plan or the GF Management Incentive Scheme as part of the compensationpaid to directors and officers in fiscal 2006.

**Share Ownership of Directors and Executive Officers**

Thefollowing sets forth, to the knowledge of Gold Fields’ management, the totalamount of ordinary shares directly or indirectly owned by the directors andexecutive officers of Gold Fields as of November 15, 2006: 

| **Holder**                                               | ** ** | ** ** | ** ** | **Ordinary  shares** | ** ** | **Percentage** | ** ** |
|----------------------------------------------------------|------------|------------|------------|----------------------|------------|----------------|------------|
| Ian D. Cockerill                                         |       | 62,000     |       |                 | 0.01       | %              |       |
| Alan J. Wright                                           |       | 135,690    |       |                 | 0.03       | %              |       |
| John G. Hopwood                                          |       | 15,000     |       |                 | 0.00       | %              |       |
| Total Directors (12  persons)                            |       | 212,690    |       |                 | 0.04       | %              |       |
| Total Non-Director  Executive Officers (9  persons) |       | —     |       |                 | —     |           |       |
| Total Directors and Executive Officers (21 persons)      |       | 212,690    |       |                 | 0.04       | %              |       |

 

**The Gold Fields Limited 2005 Share Plan**

At Gold Fields’ annualgeneral meeting held on November 17, 2005, the shareholders approved TheGold Fields Limited 2005 Share Plan, or The 2005 Plan, under which employees,including executive directors, will be compensated going forward.

The 2005 Plan provides fortwo types of awards: performance vesting restricted shares and performanceallocated share appreciation rights, or SARS. The performance vestingrestricted shares will only be released to participants three years after thedate of the award of such shares, and the release is subject, in whole and inpart, to Gold Fields meeting certain performance criteria set by the Board ofDirectors. The SARS are similarly not available to participants until threeyears after their award; however, availability is not subject to Gold Fields’performance. The size of the initial allocation of SARS is dependent on theperformance of the participant at the time of allocation. The first allocationsunder The 2005 Plan were made in March 2006, when 1,000,150 SARS wereallocated and 430,500 performance vesting restricted shares were awarded. GoldFields had outstanding as of November 15, 2006, 952,275 SARS at a strikeprice of R125.28, which expire on March 24, 2012, and 412,965 performancevesting restricted shares due to be settled on March 24, 2009, under The2005 Plan.

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**The GF ManagementIncentive Scheme**

Prior to approval of The 2005 Plan, share options wereavailable to executive officers and other employees, as determined by the Boardof Directors under The GF Management Incentive Scheme. Options to purchase atotal of 6,520,257ordinary shares were outstanding under The GF ManagementIncentive Scheme as of November 15, 2006, of which options to purchase674,900 ordinary shares at a weighted average price of Rand 74.08 were held bythe executive directors of Gold Fields. The exercise prices of all outstandingoptions range between Rand 20.90 and Rand 154.65 per ordinary share and theyexpire between December 24, 2006 and January 3, 2013. The exerciseprice of each ordinary share which is the subject of an option is the weightedaverage price of the ordinary shares on the JSE on the day immediatelypreceding the date on which the Board of Directors resolved to grant theoption.

Each option may normally only be exercised by aparticipant on the following bases: (1) after two years have elapsed fromthe date on which the option was accepted by the participant, in respect of notmore than one-third of the ordinary shares which are the subject of thatoption; (2) after three years have elapsed from the date on which theoption was accepted by the participant, in respect of not more than a furtherone-third (representing two-thirds cumulatively) of the ordinary shares whichare the subject of that option; and (3) after four years have elapsed fromthe date on which the option was accepted by the participant, in respect of allthe ordinary shares which are the subject of that option, subject to revisionby the Board of Directors. For so long as a person continues to work for GoldFields, options lapse seven years after the date of acceptance of the option bythe participant. Options vest as soon as they are exercisable, and employeeswho leave Gold Fields have one year following their departure to exerciseoptions which have vested. Options which are not yet exercisable are forfeited uponleaving employment, subject to exceptions relating to changes in control ofGold Fields and no fault termination of service as part of organizationalrestructuring.

The share option scheme may be amended from time totime by the Board of Directors and the trustees of the scheme in any respect(except in relation to amendments affecting: (1) the eligibility ofparticipants under the scheme; (2) the formula for calculating the totalnumber of ordinary shares which may be issued under the scheme; (3) the maximumnumber of options which may be acquired by any participant; (4) the optionprice formula; and (5) the voting, dividend and transfer rights attachingto options, which may only be amended through approval in a general meeting),provided that no such amendment shall operate to affect the vested rights ofany participant.

As the first allocations were made under The 2005 Planin March 2006, no further allocations will be made under The GF ManagementIncentive Scheme from that date.

A total of 5% of theCompany’s issued ordinary share capital, being 24,770,007.6 shares as of September 30,2006, is reserved for issuance under all the prevailing share schemes describedabove. This percentage may only be amended with the approval of shareholders ingeneral meeting and the JSE.

**The Gold FieldsLimited 2005 Non-Executive Share Plan**

At Gold Fields’ annualgeneral meeting held on November 17, 2005, the shareholders approved TheGold Fields Limited 2005 Non-Executive Share Plan, or The 2005 Non-ExecutivePlan. Participants in The 2005 Non-Executive Plan will be non-executivedirectors of Gold Fields who are not members of the Non-ExecutiveDirectors Remuneration Committee, which is a committee comprising the ChiefExecutive Officer and two representatives of shareholders of Gold Fieldsnominated by the Chief Executive Officer under The GF Non-Executive DirectorShare Plan. The Plan provides for the release of restricted shares awarded tothe non-executive directors three years after the date of the award, provided thatthe non-executive director is not removed, disqualified or forced to resignfrom the Board of Directors during that period. No consideration is payable forthe grant of an award of restricted shares. Awards in respect of 18,900 shareswere authorized at Gold Fields’ annual general meeting on November 10,2006.

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**The GFNon-Executive Director Share Plan**

Prior to the approval of The 2005 Non-Executive Plan,share options were available to non-executive directors selected by the Non-ExecutiveDirectors Remuneration Committee. No member of the Non-ExecutiveDirectors Remuneration Committee could be a participant in The GF Non-ExecutiveDirector Share Plan. The GF Non-Executive Director Share Plan was adopted atthe annual general meeting of shareholders on October 31, 2001. Theexercise price of each ordinary share which is the subject of an option is theweighted average price of the ordinary shares on the JSE on the day immediatelypreceding the date on which the Non-Executive Directors Remuneration Committeeresolves to grant the option.

Under The GF Non-Executive Director Share Plan, alloptions granted may only be exercised no less than 12 months and no more thanfive years after the date on which the option was accepted by the participant.

If an option holder ceases to hold office for anyreason, he will be entitled within 30 days to exercise share options which hewas entitled to exercise immediately prior to his ceasing to hold office,failing which the options shall automatically lapse. The share option plan maybe amended from time to time by the Non-Executive Directors RemunerationCommittee in any respect, except in relation to: (1) the eligibility ofparticipants under the plan; (2) the formula for calculating the totalnumber of ordinary shares which may be acquired pursuant to the plan; (3) themaximum number of options which may be acquired by any participant; (4) theprice payable by participants; and (5) the voting, dividend and transferrights attaching to options, which may only be amended through approval by theshareholders in a general meeting and by the JSE.

Options to purchase a total of 184,400 ordinary shareswere held by the non-executive directors of Gold Fields under the plan as of November 15,2006. The exercise prices of all outstanding options granted under this planrange between Rand 43.70 and Rand 110.03 per ordinary share, and they expirebetween February 6, 2007 and February 18, 2010.

Following the approval ofThe 2005 Non-Executive Plan at the Annual General Meeting held on November 17,2005 and the approval of the first allocations under that Plan at that meeting,no further allocations will be made under The GF Non-Executive Director SharePlan.

**Executive Directors’Terms of Employment**

Each of Ian D. Cockerill (Executive Director and ChiefExecutive Officer of Gold Fields) and Nicholas J. Holland (Executive Directorand Chief Financial Officer of Gold Fields) has entered into service agreementswith subsidiaries of Gold Fields. One agreement, or the GFL Contract, is withGFL Mining Services Ltd., or GFLMSL. The other agreement, or the OffshoreContract, is with Gold Fields offshore subsidiaries in respect of workperformed offshore for such subsidiaries. The terms and conditions ofemployment for each executive director are substantially similar, except whereotherwise indicated below.

The annual grossremuneration package, or GRP, payable to each of Mr. Cockerill and Mr. Hollandwas determined by the Compensation Committee, effective July 1, 2006 asfollows:

·       Mr. Cockerill          R4,055,000 plus US$242,000

·       Mr. Holland            R2,800,000 plus US$100,000

The split between thecontracts for these amounts payable to the executive directors is determined onthe basis of the amount of time spent by that executive director in respect ofeach contract.

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***The GFL Contracts***

Under the GFL Contracts, the employment of Mr. Cockerilland Mr. Holland will continue until terminated upon (i) six months’notice by either relevant party or the relevant executive director or (ii) retirementof the relevant executive director (currently provided for at age 63 in thecontract). Gold Fields can also terminate the executive director’s employmentsummarily for any reason recognized by law as justifying summary termination.

The value of the GRPpayable in terms of the GFL Contract is to be allocated among the followingbenefits: (i) salary; (ii) compulsory retirement fund contribution(with contributions set at 20% of “Pensionable Emoluments,” which are set at arate between 50% and 100% of the GRP as elected by the executive director); (iii) voluntaryparticipation in a vehicle scheme; (iv) compulsory medical coverage; and (v) compulsoryGroup Personal Accident Policy coverage. In addition, it is compulsory for eachof Mr. Cockerill and Mr. Holland to contribute 1% of his GRP to theUnemployment Insurance Fund, subject to any legislated contribution maximum atthe time.

***The Offshore Contracts***

Under the OffshoreContracts, each of Mr. Cockerill and Mr. Holland are paid offshore,in an appropriate currency, that portion of the GRP relating to the amount oftime spent performing duties offshore for the relevant offshore companies. Inthe interest of simplicity, no benefits other than annual leave accrue to eachexecutive director under the Offshore Contract and their remuneration is whollypaid in salary.

***Other Remuneration***

In addition to the gross guaranteed remunerationpayable, each of Mr. Cockerill and Mr. Holland is entitled, amongother things, to the following benefits under their employment contracts: (i) participationin the GF Management Incentive Scheme and The Gold Fields Limited 2005 SharePlan; and (ii) consideration for an annual (financial year) incentivebonus based upon the fulfillment of certain targets set by the Board ofDirectors.

The amount and manner of any bonus payment isdetermined by the Compensation Committee of the Board. See “—Board of DirectorsCommittees.” The annual bonus is set at a target of 50% of the value of theGRP, assuming fulfillment of all targets, with scope to award a lesser bonus iftargets are not met, or a greater bonus, up to a further 50% of the GRP, iftargets are exceeded.

The employment contracts also provide that in theevent of the relevant executive director’s employment being terminated solelyas a result of a “change of control” as defined below, and within 12 monthsof the change of control, the director is entitled to: (i) payment of anamount equal to twice his GRP; (ii) payment of an amount equal to theaverage of the incentive bonuses paid to the executive director during theprevious two completed financial years; (iii) any other payments and/orbenefits due under the contracts; (iv) payment of any annual incentivebonus he has earned during the financial year notwithstanding that thefinancial year is incomplete; (v) an entitlement, for two years after thedate of termination, subject to the relevant rules of the GF ManagementIncentive Scheme then in force, to retain and to exercise all share optionsallocated to him including those which may not have vested at the date of suchtermination; and (vi) an entitlement to be settled with the SARS andRestricted Shares allocated and awarded to him, subject to the rules ofThe Gold Fields Limited 2005 Share Plan then in force, and in the case of theSARS will have a further period of one year in which to exercise such SARS. Theemployment contracts further provide that these payments cover any compensationor damages the executive director may have under any applicable employmentlegislation.

A “change of control” for the above is defined as theacquisition by a third party or concert parties of 30% or more of Gold Fields’ordinary shares.

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In the event of theconsummation of an acquisition, merger, consolidation, scheme of arrangement orother reorganization, whether or not there is a change of control, if theexecutive director’s services are terminated the “change of control” provisionssummarized above also apply.

**Non-ExecutiveDirector Fees**

The non-executive directors are entitled to fees asagreed at Gold Fields’ annual general meeting from time to time, reimbursementof out-of-pocket expenses incurred on Gold Fields’ behalf and remuneration forother services, such as serving on committees. A travel allowance is payable tocompensate non-executive directors for international travel to attend Boardmeetings. Board fees are as follows: the chairman of the Board receives anannual fee of Rand 1.0 million ($134,590); the attendance fee for each Boardmember, excluding the Chairman, for each Board meeting is Rand 8,125 ($1,094)per meeting; the annual fee for each chairman of a Board committee, other thanthe Audit Committee chairman, is Rand 80,000 ($10,767); the annual fee for thechairman of the Audit Committee is Rand 112,000 ($15,074); the attendance feefor each Board committee member for each Board committee meeting is Rand 4,875($656) per meeting; the annual fee for members of each Board committee, otherthan the Audit Committee, is Rand 40,000 ($5,384); the annual fee for eachmember of the Audit Committee, excluding the chairman, is Rand 56,000 ($7,537);and the shareholder-approved travel allowance payable to directors who travelinternationally to attend meetings is $4,000 per international trip. At theAnnual General Meeting which took place on November 10, 2006, theshareholders increased the annual fee for each Board member, excluding thechairman, from Rand 100,000 ($13,459) to Rand 110,000 ($14,805), effective January 1,2007.

Gold Fields has no servicecontracts with its non-executive directors.

**Employees**

Thegold mining industry, particularly in South Africa, is labor-intensive. Thetotal number of employees, including employees of outside contractors, as ofthe end of the last three fiscal years at each of the operations owned by GoldFields as of those dates was:

| ** **        | ** ** | **As of June 30,** | ** ** |
|-------------------|------------|-----------------------------------|------------|
| ** **        | ** ** | **2004(1)**                       | ** ** | **2005(1)** | ** ** | **2006(1)** | ** ** |
| **South  Africa** |       |                              |       |   |   |   |   |
| Driefontein       |       | 17,900                            |       | 17,200 |   | 16,700 |   |
| Kloof             |       | 16,600                            |       | 15,400 |   | 16,900 |   |
| Beatrix           |       | 12,200                            |       | 12,300 |   | 11,500 |   |
| **Ghana**         |       |                              |       |   |   |   |   |
| Tarkwa            |       | 3,300                             |       | 3,300 |   | 3,000 |   |
| Damang            |       | 900                               |       | 900 |   | 900 |   |
| **Australia**     |       |                              |       |   |   |   |   |
| St. Ives          |       | 900                               |       | 1,000 |   | 700 |   |
| Agnew             |       | 300                               |       | 400 |   | 400 |   |
| **Venezuela**     |       |                              |       |   |   |   |   |
| Choco 10          |       | —                            |       | — |   | 600 |   |
| Total             |       | 52,100                            |       | 50,500 |   | 50,700 | (2) |

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Notes:

(1)           Rounded to the nearest hundred.

(2)           As of June 30, 2006, approximately83% of these employees were laborers and semi-skilled employees.

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***Labor Relations***

*South Africa*

Since 1995, theSouth African legislature has enacted various labor laws that enhance therights of employees. For example, these laws:

·       confirmthe right of employees to belong to trade unions and the right of unions tohave access to the workplace;

·       guaranteeemployees the right to strike, picket and participate in secondary strikes incertain prescribed circumstances;

·       providefor mandatory severance pay in the event of termination of employment foroperational reasons;

·       reduceand limit the maximum ordinary hours of work;

·       increasethe rate of pay for overtime;

·       requirelarge employers such as Gold Fields to implement affirmative action policies tobenefit historically disadvantaged groups, and impose significant monetarypenalties for non-compliance with the administrative and reporting requirementsof the legislation;

·       providefor the financing of training programs by means of a levy grant system and aNational Skills Fund; and

·       grantemployees the right to strike if a company employing over 500 employeesterminates over 50 employees at one time for operational reasons.

Approximately 79% of the labor force at Gold Fields’South African operations is unionized, with the major portion of its SouthAfrican workforce being members of the National Union of Mineworkers, or theNUM. As a result of its highly unionized labor force in South Africa and thefact that labor costs constitute approximately 50% of production costs, GoldFields has attempted to balance union demands with the need to contain andreduce total cash costs in order to ensure the long-term viability of itsoperations.

Wage increases and changes to terms and conditions ofemployment are negotiated with the unions every two years, and on August 23,2005, Gold Fields reached a two-year wage agreement with the United Associationof South Africa, or UASA, Solidarity Trade Union, or Solidarity, and the NUM.This agreement provided for wage increases of between 6% and 7%, dependingupon the category of employee, implemented with effect from July 2005. Theapproximate impact of this increase was a 3% increase on the total Randproduction costs for the South African operations for fiscal 2006. A furtherinflation-linked increase of 5.5% to 6%, depending on the category of employee,was implemented on July 1, 2006. The agreement further provides for anincrease in contributions to the Mine Workers Provident Fund (a retirementfund) of 0.5% in July 2005 and 0.5% in July 2006, as well as anincrease in the living out allowance from R706 to R1,000 by September 1,2006. Currently, only 14% of Gold Fields’ South African labor force receivesliving out allowances. The next round of negotiations with the unions in SouthAfrica is expected to commence in May 2007, as the current agreementexpires in June of that year.

Work week and shift arrangements are negotiated on ashaft-by-shaft basis and vary in accordance with staffing needs and uniondemands at each shaft. South African legislation provides for a 45-hourwork week, although the government has stated its intention to move toward a 40-hourwork week.

Gold Fields experienced a four-day industry-widestrike in August 2005, which was resolved by conclusion of the two-yearwage agreement (referred to above) on August 23, 2005 with the unions, aspart of the industry-wide negotiations coordinated by the South African Chamberof Mines. Further work 

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stoppages affecting South African operations infiscal 2006 were related to the National Election Day on March 1, 2006,which is a newly declared public holiday, and two national “stay away” days.

In addition, Gold Fieldsexperienced two days of political protest action on October 10, 2005 and May 18,2006. The protests were organized by COSATU, a trade union federation withwhich the NUM is affiliated, the purpose of which was to draw governmentattention to retrenchments which had taken place in various sectors of theeconomy as a consequence of declining exports, due to the strength of the SouthAfrican Rand. Approximately 30% of Gold Fields’ employees participated in theseprotests by staying away from work on those days.

*Ghana*

In Ghana, there arevarious constitutional and legislative provisions relating to labor which,among other things:

·       entitleworkers to join trade unions and give those unions the power to negotiate ontheir behalf with regard to their conditions of employment;

·       prohibitdiscrimination against union members;

·       entitleworkers to strike in certain prescribed circumstances;

·       regulatethe hours of work, termination notice, severance pay and minimum length ofannual leave for workers;

·       providefor social security for workers and workers’ compensation; and

·       providefor arbitration in trade disputes.

On October 8, 2003, the Ghanaian Parliamentpassed the Labor Act, 2003 (Act 651), or the Labor Act. Regulations under theLabor Act have been published for comment by stakeholders. The Labor Act givesemployees greater freedom to form and to join trade unions, among other rights.

Of the Ghanaian employees at Tarkwa, the majority aremembers of the Ghana Mineworkers Union, or GMU, whose employment is governed bya collective bargaining agreement originally concluded in 1996 and revised in2000, 2003 and 2004. Wages are revised annually by negotiation with the GMU. InJuly 2004, Gold Fields Ghana concluded a two-year agreement with the GMUcovering both the Tarkwa and Damang mines. The agreement provides for a 2%increase in basic rates of pay effective January 1, 2004. The increaseeffective January 1, 2005 was 3%. The agreement further provided for profit-sharingarrangements under which employees shared in the profits made at the Tarkwa andDamang mines in fiscal 2004 and fiscal 2005. The payment for fiscal 2005 wasagreed at $750 per employee in service for the full fiscal year.

GMU and Gold Fields have re-negotiated the terms oftheir collective bargaining agreement, which the parties signed on August 24,2006. Among the terms agreed is a 12% increase in basic rates of pay, effectiveJanuary 1, 2006. Additionally, as a profit-sharing arrangement, GoldFields agreed to pay a lump sum amount of US$1,000 to each employee in GoldFields’ service during the period from July 1, 2005 to June 30, 2006.Gold Fields intends to negotiate a new employee gain-sharing model with theunion for implementation in subsequent years.

Senior staff terms of employment are also governed bythe Labor Act. Under the Labor Act, employees considered to be in “policy-making”positions are prohibited from joining unions. As a result, some members ofsenior staff who are not in “policy-making” positions could be eligible to joinunions which would then negotiate terms of employment on their behalf. However,the current practice of using the conditions contained in collective agreementswith unions as the minimum basis for negotiating senior staff conditions ofemployment is expected to continue.

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Neither Gold Fields nor AMS experienced any strikes atTarkwa in fiscal 2004 or 2005. However, in August 2005, Gold Fieldsexperienced an unexpected 48-hour strike at the Tarkwa mine. The strikecentered on unhappiness with existing union representation and, as a result ofsteps taken by Gold Fields in conjunction with the union, an interim managementcommittee was elected until January 2007, when substantive elections arescheduled to be held to appoint new union representatives.

As part of a project undertaken by Gold Fields toexpand operations at Tarkwa, or the Tarkwa Expansion Project, Gold Fields hascompleted shifting operations at the mine from contractor mining to ownermining. The conversion to owner mining at Tarkwa was completed in fiscal 2005without any labor incidents.

As with Tarkwa,substantially all of the local employees at the Damang mine are unionized,including those employed by AMS. Damang did not experience any work stoppages infiscal 2004, 2005 or 2006. The terms of employment of unionized employees atDamang are governed by a collective bargaining agreement negotiated in June 2003and revised in July 2004. The terms of this agreement are identical tothose of the collective bargaining agreement covering unionized employees atTarkwa. Damang was party to the two-year agreement concluded in July 2004on wages and other conditions of employment referred to above, for which thesame terms apply to the Damang operations. These terms were recentlyre-negotiated as described above.

*Australia*

In Western Australia, where Gold Fields’ Australianoperations are located, labor is now primarily regulated by the WorkplaceRelations Act 1996 (Cth), or the Workplace Relations Act, and the federalindustrial relations system created thereby. Prior to March 27, 2006, GoldFields was subject to Western Australia’s state-based system. Amendments to theWorkplace Relations Act were passed in March 2006 which have curtailedboth the rights of unions to access workplaces and the collective bargainingrights of employees.

The WorkplaceRelations Act prescribes, among other things:

·       minimumwages;

·       maximumordinary hours of work;

·       formsof leave (other than long-service leave);

·       conditionsregarding termination of an employee for redundancy;

·       rightsof unions to enter a workplace; and

·       collectivebargaining rights for employees.

With the exception of a range of state statuteslimited to health and safety, long-service leave, discrimination and workers’compensation, Gold Fields and its employees are no longer subject to stateindustrial or employment laws.

All of Gold Fields’ Australian employees and theemployees of the contractors at the St. Ives and Agnew mines are employedpursuant to individually negotiated federal workplace agreements. The effect offederal workplace agreements is generally to exclude collective bargaining andunion access to the workplace, other than for occupational health and safetypurposes.

Historically, Australian unionshave had a significant role in negotiating collective agreements for pay andworking conditions. However, as a result of the amendments to the WorkplaceRelations Act, together with the fact that relevant unions currently havelittle presence in Western Australia’s mining industry, there is minimal scopefor union interference at Gold Fields’ mining operations in Australia.

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*Venezuela*

In general,employees working in Venezuela are subject to Venezuelan labor laws as setforth in the Organic Labor Law, or Labor Law. In recent years, the Venezuelangovernment has implemented stricter labor laws and increased worker rights. TheLabor Law, its regulations and related social benefits laws impose statutoryduties and taxes on companies doing business in Venezuela. Most of theprovisions of these laws govern minimum benefits and they regulate, among otherthings:

·       paymentof salaries, which includes workday duration and overtime, payment ofprofit-sharing, vacation enjoyment and social benefit payments;

·       employmenttermination;

·       work-relatedaccidents, occupational illnesses and Venezuela’s Organic Law of WorkConditions, which imposes on employers the obligation of maintaining a workenvironment where employees are safeguarded against work-related accidents andillnesses;

·       socialsecurity law;

·       mandatedemployer contributions to the National Education Cooperation Institute;

·       mandatoryhousing policy funds;

·       unemployment;and

·       collectivebargaining rights of employees.

In April 2006, theGovernment extended for the fourth consecutive year a firing freeze for privateand public sector workers governed by the Organic Labor Law, effective through September 30,2006. In September 2006, the firing freeze was extended again, effectivethrough March 31, 2007. Under the decree, workers may not be fired,demoted or transferred without just cause.In Venezuela, most of the labor andsocial benefits awarded by law are improved by collective bargainingagreements, or CBAs. These improved benefits once granted may never bedecreased. On February 15, 2005, PMG, while under the control of Bolivar,entered into a CBA with the PMG labor union (SINTRA PMG, S.A.), under which itprovides benefits beyond those required by law for its employees, includingpayment for health and life insurance, a savings scheme and transport. In July 2006,the workers formed a new union (UNTRAMIGUA GOLD FIELDS) which, following alabor referendum, was identified as the most representative union in the mine...

***Benefits***

Gold Fields provides benefits to its employees,generally including pension, medical and accommodation benefits. Employees arealso entitled to a severance package if they are laid off. At Damang, medicalbenefits only are provided by the contractor, AMS, while the costs of such benefitsare paid by Gold Fields under the terms of the contract between Gold Fields andAMS. Gold Fields’ own employees are generally provided with medical andretirement benefits. In Australia, benefits for contractors’ employees are theresponsibility of each contractor and Gold Fields’ own employees are generallyresponsible for their own medical costs and other benefits, except that GoldFields contributes to a third-party pension plan. In Venezuela, in addition tothe social and labor benefits awarded by law, Gold Fields, under the CBA,provides other benefits for the employees including health and life insurance,a savings scheme and transport. There is no statutory workers compensationscheme in Venezuela, but there is a social security system and both employersand employees must contribute.

Gold Fields provides 50%of the premiums under a medical plan for certain former employees in SouthAfrica. As of June 30, 2006, 89% of these former employees and dependantshad been bought out of the scheme at a 15% premium. As of June 30, 2006,approximately 226 former employees were still covered 

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under this plan followingthe buyout. As of June 30, 2005, Gold Fields had accrued a provision ofRand 16.7 million for these obligations. The provision is adjusted annually inaccordance with updated actuarial tables. Gold Fields is not obligated to makethese contributions for members of the former Aumed Medical Scheme (which wasin place at the Free State operation and was combined with the Medisensemedical scheme during fiscal 2003) who retired after August 31, 1997 andmembers of the Medisense Medical Scheme who retired after January 31,1999.

***Bonus Schemes***

Gold Fields has extensivebonus schemes for workers at all levels. The focus of Gold Fields’ bonusschemes is based on specific production and safety targets as the primarydrivers, with quality factors being secondary drivers at management levels.

***Social Development***

Gold Fields has anestablished social development program in South Africa, which it conductsthrough the Gold Fields Foundation, or the Foundation. The Foundation wasfounded by Gold Fields of South Africa Limited more than 20 years ago and hasas its mission the promotion and facilitation of sustainable social andeconomic development in the communities affected by Gold Fields’ operations inSouth Africa, Ghana and Australia. Gold Fields provides annual funding for theFoundation in an aggregate amount of R3.00 per ounce of gold produced from itsSouth African operations each year plus 0.5% of annual pre-tax profits of itsSouth African operations. Ghana has a similar program in place and funds anaggregate amount of $1 per ounce of gold produced plus 0.5% of annual pre-taxprofits at the Ghana operations. In Australia, contributions are made to theGold Fields Australian Foundation at a rate of A$0.80 per ounce of gold sold.Gold Fields is in the process of implementing a similar program in Venezuela.The funds provided by the operations are applied to development projects wherethe relevant operation is located. Currently, the Foundation focuses on fourprimary areas:

·       **Education**. The Foundation has initiativesinvolving all levels of education from pre-schools to universities. In SouthAfrica, the focus has been on developing educational infrastructure, includingproviding classrooms, laboratories and libraries. In addition, the Foundationprovides for professional training and education, such as AIDS-related trainingfor healthcare workers.

·       **Healthcare**. The Foundation has fundedhealthcare projects involving a number of issues, in particular, HIV and AIDS,women’s health issues, tuberculosis and healthcare infrastructure development.The Foundation is also involved with various primary care issues.

·       **Community Development**. The Foundationoperates a number of programs which focus on improving community life,especially in rural areas. This includes programs dedicated to education,training, welfare, small business development and job creation, among others.

·       **Environmental Education and Conservation**.The Foundation supports various initiatives which work to encourage andfacilitate community participation in natural resource management and promotean integrated and sustainable approach to the environment.

In Venezuela, Gold Fieldshas an obligation to contribute at least US$250,000 per year in socialcontributions for the development of the mining area after the commencement ofcommercial production. In addition, Gold Fields and the Ministry of BasicIndustries and Mines have agreed to compensate a group of approximately 111small miners claiming compensation for allegedly being evicted from the Choco10 mining area.

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***Employment Equity***

Under the South AfricanEmployment Equity Act, Gold Fields has a responsibility to: (1) promoteequal opportunity and fair treatment in employment by eliminating unfairdiscrimination; and (2) implement affirmative action measures to redressthe disadvantages in employment experienced by certain groups, in order toensure their equitable representation in all occupational categories and levelsin the workforce. As required by the Act, Gold Fields has a formal employmentequity plan, which has been approved by its unions and submitted as part of itsreport to South African regulatory officials. The plan includes numericaltargets to be achieved over a five-year period, with regular meetings ofemployment equity forums involving management and employee representatives tomonitor progress against the plan. Management believes that Gold Fields iscurrently making adequate progress towards the targets under its plan and is incompliance with legal and regulatory requirements regarding employment equity.

***Training***

Gold Fields spent approximately Rand 122.7 million,$1.1, A$1.2 and $0.1 million on employee training and development in fiscal2006 at its South African, Ghanaian, Australian and Venezuelan operations,respectively. Particular emphasis is placed on literacy as Gold Fieldsestimates that approximately 43% of its South African employees arefunctionally illiterate.

Gold Fields continues to provide comprehensivetraining to its employees, in full compliance with the regulatory requirementsat the sites at which it operates. The training provided in South Africa isaligned with South Africa’s National Qualifications Framework, and is carriedout within the ambit of Gold Fields’ education, training and development, orETD, establishment, which is fully accredited with the relevant SectoralEducation and Training Authority, or SETA, which for Gold Fields is the MiningQualifications Authority, or MQA. Gold Fields’ ETD establishment has securedaccreditation and program approvals from a number of SETAs outside of themining industry, and is fully certificated in terms of the ISO 9001/2000 andISO 14000 quality management standards. In order to secure optimal workplacesafety and productive work performance, Gold Fields exposes its employees to ETDinterventions which significantly exceed compliance to minimum standards, inthe form of additional mining and safety skills training, team-based behavioraltraining, and non-mining related life and social skills training.

In addition, Gold Fields continues to focussystematically on managerial, leadership, and professional development thoughits Leadership Pipeline program, known as Management Review, as integrated withits performance management system.

All of Gold Fields’ employee training activities inSouth Africa are cognizant of the human resources development requirements ofthe Mining Charter, and are fully described in the Social and Labor Plansubmitted by Gold Fields to the Department of Minerals and Energy. See“Information on the Company—Regulatory and Environmental Matters—South Africa—MineralRights.”

A salient development inthe training environment within Gold Fields has been the establishment of theGold Fields Business and Leadership Academy, or GFBLA. GFBLA comprises all fiveof the formerly discrete training establishments operating within Gold Fields’South African operations. These various training establishments have, witheffect from July 2006, been consolidated into the single Gold Fields’subsidiary, GFBLA, under a single management structure and under a unifiedStrategic and Business Plan. Gold Fields’ executives have been assignedleadership of GFBLA, with a principal mandate to optimize training in order tosecure enhanced workforce performance for Gold Fields. A secondary mission forGFBLA is to provide commercial training services to a client base external toGold Fields, and to support the South African government’s strategy to improvethe technical skills base in the national economy. This strategy is describedin the document outlining the Joint Initiative on Priority Skills Acquisition,which is an important element of the Government’s Accelerated and Shared GrowthInitiative for South Africa program.

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***Health and Safety***

*Health*

The principal health risks associated with Gold Fields’mining operations in South Africa arise from occupational exposure to dust,noise, heat, noxious fumes and chemicals. The most significant occupationaldiseases affecting Gold Fields’ workforce include lung diseases (particularlysilicosis, tuberculosis and a combination of the two), noise-induced hearingloss and heat exhaustion. In South Africa, the incidence of tuberculosis inmine workers is aggravated by exposure to crystalline silica dust and bycompromised immunity due to HIV infection. Gold Fields is working to increasethe level of ventilation at its underground operations in order to try to lowerthe risk of lung disease for its workers. To reduce the incidence of noise-inducedhearing loss, Gold Fields implements engineering controls where practicableand, if it is not possible, Gold Fields trains its workers to use adequate earprotection and provides appropriate equipment. Gold Fields has embarked onsignificant initiatives to address HIV infection and AIDS among its workforce.

In Ghana and Australia, the primary health risksinclude dust and noise-induced hearing loss. Malaria is also a significanthealth risk in Ghana. To combat these risks, Gold Fields provides workers withappropriate protective gear and regular training and screening tests.

In Venezuela, the primary health risks include dust,noise-induced hearing loss and back injuries. To combat these risks, GoldFields provides workers with appropriate protective gear and regular trainingand screening tests.

Gold Fields provides free healthcare to a substantialportion of its South African and Ghanaian employees while they are employed byGold Fields. This includes the operation of hospitals and clinics to providetreatment as needed. Workers in Australia are responsible for their ownhealthcare.

*HIV/AIDS Program.  *On December 12, 2001, Gold Fields entered intoan agreement with the principal labor unions representing its employees, underwhich Gold Fields and the unions agreed to implement various initiatives aimedat reducing the spread of HIV/AIDS among Gold Fields’ workforce and providingfor the treatment and care of employees who are HIV positive or suffering fromAIDS. These initiatives include, among others, improving awareness andeducation among employees regarding HIV/AIDS, promoting condom usage among employees,managing sexually transmitted infections and collectively supporting a wellnessmanagement program for employees who are HIV positive. In April 2003, theGold Fields HIV/AIDS program was recognized as one of the nine best programs inthe world by the Global Business Coalition Against AIDS.

Gold Fields’ SouthAfrican workforce has a similar level of HIV prevalence to that present ingroups of males of the same mix of age groups in South Africa generally.Accordingly, Gold Fields has developed and implemented a significant HIV/AIDSprogram with the goals of reducing the rate of HIV infection among itsworkforce and minimizing the potential financial impact of AIDS on itsoperations. This program involves a multi-faceted approach, including thefollowing components:

·       HIV/AIDSawareness campaigns;

·       peereducation and training, involving more than 800 peer educators;

·       voluntarycounseling and testing;

·       condompromotion and distribution, with a stated goal of three condoms per employeeper week;

·       treatmentof sexually transmitted diseases, including treatment of infected prostitutesand “periodic presumptive therapy” which involves giving a broad spectrum ofantibiotics to asymptomatic prostitutes at high risk of contracting sexuallytransmitted diseases;

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·       careand support for workers with HIV/AIDS. This includes wellness management, illhealth retirement for workers with AIDS (with workers encouraged to return hometo their families) and home-based care for such workers following retirement.In January 2004, Gold Fields announced that it had extended the program toinclude the delivery of Highly Active Antiretroviral Therapy, or HAART, as atreatment option for employees living with AIDS; and

·       collaborationwith international initiatives such as the Global Health Initiative, WorldEconomic Forum, World Health Organization and USAID.

In February 2006, management estimated thatapproximately 30% of Gold Fields’ workforce in South Africa was infectedwith HIV and the Company infection rate will peak at 31.6%, in approximately2010. Additionally, Gold Fields expects the Company prevalence of AIDSinfection to peak in approximately 2013. Based on this level of prevalence,other existing data and various other assumptions, many of which involvefactors beyond Gold Fields’ control, management estimates that withoutappropriate interventions the ultimate impact of HIV/AIDS on its operatingcosts could be as high as $10.00 per ounce of gold produced at its SouthAfrican operations, two to five years after the projected peak of HIVprevalence, between approximately 2012 and 2017, when the largest number ofemployees on HAART will be reached. The cost in fiscal 2006 was estimated atless than $4.00 per ounce in the South African operations. Gold Fields hopes tolimit the impact of HIV/AIDS on its operating costs through its HIV/AIDSprogram. Management estimates that, depending on the success of its HIV/AIDSprogram, the maximum expected impact of AIDS on operating costs at its SouthAfrican operations could be reduced from the $10.00 per ounce estimate to aslow as $6.00 per ounce of gold produced, at the peak of employee utilization ofHAART. However, the ultimate impact of HIV/AIDS on Gold Fields’ operating costscould vary significantly depending on any of these factors.

See “Risk Factors—HIV/AIDS poses risks to Gold Fieldsin terms of lost productivity and increased costs.”

HIV/AIDS prevalence is notsignificant in Gold Fields’ Ghanaian, Australian or Venezuelan workforces. GoldFields has also introduced its HIV/AIDS program in Ghana.

*Safety*

Operating mines, particularly underground mines,involves significant safety hazards. Gold Fields has undertaken a number ofsafety initiatives intended to lower the rate of injuries and fatalitiesincurred by employees in connection with its operations. A number of theseinitiatives involve ensuring that employees receive adequate training regardingsafe workplace practices. In addition, Gold Fields takes steps to addressparticular safety issues which are present at its operations. Specific safetyissues are explained in further detail in connection with the description ofeach of Gold Fields’ operations above.

Gold Fieldsintroduced a new health and safety compliance program in fiscal 2001 at itsSouth African operations, with the goal of improving compliance with the MinesHealth and Safety Act and other rules, standards, regulations and generallyaccepted principles relating to health and safety. The Full Compliance SafetyManagement Initiative, as it is called, has been implemented at all of GoldFields’ operations and aims to:

·       eliminatefatal accidents at Gold Fields’ mines;

·       continueto reduce accident rates; and

·       maintaina safe and healthy working environment with quality training, good practice andfull employee commitment.

Gold Fields’ operations in Australia and Ghana arecertified under Occupational Health and Safety Assessment Series 18000, anoccupational health and safety management specification system. The South 

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African operations are presently completing the processof applying for certification. More specifically, Beatrix’s internal audit wascompleted during May 2006 and internal audits are scheduled forDriefontein and Kloof from August to September 2006.

The South African operations have subscribed to the milestonesset for accidents, elimination of silicosis and noise-induced hearing lossissued by the Mine Health and Safety Council of South Africa, which is alegislative body set up under the Mine Health and Safety Act to advise theMinister of Minerals and Energy on mine safety standards. Action plans havebeen developed and the Vice President and Head of the South African operationsreports to the Board’s Safety, Health, Environment and Community Committee on aquarterly basis.

On July 26, 2005, anamendment to the Organic Law of Prevention, Conditions and Work Environment wasenacted in Venezuela, with the purpose of establishing institutions, rules andguidelines for policies and entities aimed at guaranteeing the safety, healthand well-being of workers, regulating conditions for the promotion of a safeand healthy work environment, preventing work accidents and occupationaldiseases and regulating the rights and duties of workers and employers. GoldFields’ operations in Venezuela are subject to regular inspections from theNational Institute for Labor Prevention, Health and Security, which depends onthe Ministry of Labor in order to verify compliance with the obligation tomaintain a work environment where employees are safeguarded against work-relatedaccidents and illnesses. Gold Fields must comply with several obligationsderived from the Organic Law of Work Conditions, including setting up andmaintaining medical services, establishing safe sanitary, sound, light, air andventilation work conditions, supplying security equipment for the workers,maintaining adequate hazard signs and instructions, emergency equipment andevacuation guidelines, and providing manuals for internal safety andappropriate instructions for the workers, among others. The law mandates thecreation of a committee formed from employees and employer representatives tooversee internal compliance and improvements. In the case of infringement, thislaw provides penalties, including criminal liability, in the case of anaccident of an employee resulting from Gold Fields’ negligence or failure tocomply with the requirements set by the law.

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**ITEM 7:MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

**Major Shareholders**

To the knowledge of management: (1) Gold Fieldsis not directly or indirectly owned or controlled (a) by anothercorporation or (b) by any foreign government and (2) there are noarrangements the operation of which may at a subsequent date result in a changein control of Gold Fields. To the knowledge of Gold Fields’ management, thereis no controlling shareholder of Gold Fields.

As of October 31, 2006, the issued share capitalof Gold Fields consisted of 495,505,475 ordinary shares.

A listof the individuals and organizations holding, to the knowledge of management,directly or indirectly, 5% or more of its issued share capital as of September 29,2006 is set forth below.

| **Beneficial owner**           | ** ** | ** ** | ** ** | **Ordinary  shares** | ** ** | **Percentage** | ** ** |
|-------------------------------------|------------|------------|------------|----------------------|------------|----------------|------------|
| Public Investment  Commission(1)    |       | 49,502,464 |       |                 | 10.0       | %              |       |
| Capital Research  and Management(2) |       | 48,399,773 |       |                 | 9.8        | %              |       |
| Old Mutual plc(3)                   |       | 43,482,105 |       |                 | 8.8        | %              |       |
| BlackRock Investment  Management    |       | 37,757,040 |       |                 | 7.6        | %              |       |

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Notes:

(1)           The Public Investment Commission holds a portion of itsshares directly and a portion of its shares through Stanlib Asset Management,Sanlam Investment Managers, Old Mutual Asset Managers, Future Growth and RMBAsset Management.

(2)           Capital Research and Management holds its sharesthrough JPMorgan Chase Bank and State Street Bank & Trust Company.

(3)           Old Mutual plc holds its shares through Old Mutual LifeAssurance Company of South Africa Limited and various subsidiaries. Jakes G.Gerwel, a non-executive director of Gold Fields who retired from the Board onNovember 10, 2006, is also a director of Old Mutual Life Assurance Companyof South Africa Limited.

To the knowledge ofmanagement, none of the above shareholders holds voting rights which aredifferent from those held by Gold Fields’ other shareholders.

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The table below shows thesignificant changes of the percentage of ownership by Gold Fields’ majorshareholders, to the knowledge of Gold Fields’ management, during the pastthree fiscal years.

| ** **                          | ** ** | **Beneficial ownership**     | ** ** |
|-------------------------------------|------------|-----------------------------------|------------|
| ** **                          | ** ** | **As of June 30,** | ** ** | **As of  September 29,** | ** ** |
| ** **                          | ** ** | **2004**                          | ** ** | **2005** | ** ** | **2006** | ** ** | **2006** | ** ** |
| ** **                          | ** ** | **(%)**                           | ** ** |
| **Beneficial owner**                | ** ** | ** **                        |       | ** ** | ** ** | ** ** |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| OJSC MMC Norilsk Nickel             |       | 20.0                              |       |   | 20.0 |   |   | — | (1) |   |   | — | (1) |   |
| Public Investment  Commission(2)    |       | 4.9                               |       |   | 4.9 |   |   | 9.3 |   |   |   | 10.0 |   |   |
| Capital Research and  Management(3) |       | 2.2                               |       |   | 4.9 |   |   | 9.2 |   |   |   | 9.8 |   |   |
| Old Mutual plc(4)                   |       | 5.8                               |       |   | 4.6 |   |   | 7.1 |   |   |   | 8.8 |   |   |
| Harmony Gold Mining  Company Ltd.   |       | —                            | (1)        |   | 5.4 |   |   | — | (1) |   |   | — | (1) |   |
| BlackRock Investment  Management(5) |       | 2.7                               |       |   | 3.6 |   |   | 7.6 |   |   |   | 7.6 |   |   |

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Notes:

(1)           To the knowledge of Gold Fields’ management, theentities did not own Gold Fields’ ordinary shares on the dates specified.

(2)           The Public Investment Commission holds a portion of itsshares directly and a portion of its shares through Stanlib Asset Management,Sanlam Investment Managers and RMB Asset Management.

(3)           Capital Research and Management holds its sharesthrough JPMorgan Chase Bank and State Street Bank & Trust Company.

(4)           Old Mutual plc holds its shares through Old Mutual LifeAssurance Company of South Africa Limited and various subsidiaries.

(5)           BlackRock Investment Management, previously known asMerrill Lynch Investment Management, was established in October 2006 withthe merger of Merrill Lynch’s asset management business and BlackRock’s assetmanagement business.

As of June 30, 2006,15,724 record holders of Gold Fields’ ordinary shares, holding an aggregate of171,378,981 ordinary shares (34.5%), were listed as having addresses in SouthAfrica. As of June 30, 2006, 172 record holders of Gold Fields’ordinary shares, holding an aggregate of 107,030,367 ordinary shares (21.6%),were listed as having addresses in the United States.

**Related PartyTransactions**

None of the directors,officers or major shareholders of Gold Fields or, to the knowledge of GoldFields’ management, their families, had any interest, direct or indirect, inany transaction during the last three fiscal years or in any proposedtransaction which has affected or will materially affect Gold Fields or itsinvestment interests or subsidiaries, other than as stated below.

***Pro-Drilling***

Michael J. Prinsloo, whowas previously Executive Vice President, South African Operations and whoduring fiscal 2006 became Chief Executive Officer of the Gold Fields Businessand Leadership Academy, sits on the Board of and owns 50% of Pro-Drilling &Mining (Proprietary) Limited, or Pro-Drilling, a privately held drillingcompany. Pro-Drilling has a contract with GFI Mining South Africa(Proprietary) Limited to provide labor, equipment and materials for diamonddrilling and core recovery at the Driefontein operation. The contract is validuntil terminated upon one month’s written notice by either party. Gold Fieldsemployed Pro-Drilling prior to Mr. Prinsloo’s joining Gold Fields. Duringfiscal 2006, Gold Fields paid Pro-Drilling a total of approximately Rand 3.7million (approximately US$500,000). Gold Fields expects to continue its contractwith Pro-Drilling during fiscal 2007 on similar terms.

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***Mvelaphanda***

Tokyo M. G. Sexwale, a non-executive director of GoldFields, is the Chairman of the Board of Mvelaphanda Resources Limited, or MvelaResources, an African mining and exploration company and sits on the Boards ofcertain of its subsidiaries. Bernard R. van Rooyen, who retired as anon-executive director of Gold Fields on November 17, 2005, is the DeputyChairman of Mvela Resources. Both Mr. Sexwale and Mr. van Rooyen arealso significant shareholders of Mvela Resources.

On July 10, 2002, Gold Fields announced that ithad granted Mvela Resources the right to acquire a beneficial ownershipinterest of between 5% and 15% in, and a corresponding share of Gold Fields’obligations and liabilities with respect to, the development, financing orconstruction of any precious metals mine which is developed in Africa,beginning March 1, 2002. In consideration for the transaction, referred toin this discussion as the Exploration Arrangement, Mvela Resources is obligatedto issue to Gold Fields options to subscribe in tranches for linked units inMvela Resources, consisting of one ordinary share and one unsecured debentureissued by Mvela Resources, at a 10% premium to the five-day weighted average tradingprice listed on the JSE Limited. Mvela Resources issued to Gold Fields 380,102options to subscribe for linked units pursuant to this arrangement on September 26,2002. Thereafter, each year Mvela Resources was obligated to issue to GoldFields options to subscribe for linked units with a value equal to half of theamount spent by Gold Fields on the precious metals exploration projects coveredby the agreement between the parties during that year. On May 5, 2003,Mvela Resources issued to Gold Fields further options to subscribe for 373,435linked units. In November 2003, Mvela Resources implemented a Scheme ofArrangement and a consolidation of its share capital, which are describedbelow. As a result of these actions, Gold Fields’ right to receive options tosubscribe for linked units has been converted into a right to receive optionsto subscribe for ordinary shares of Mvela Resources. On May 30, 2004,Mvela Resources issued to Gold Fields options to subscribe for 521,812 ordinaryshares of Mvela Resources. The options granted under the ExplorationArrangement were originally exercisable for a period of two years from the dateof issuance, but as of September 16, 2004, this period was extended tofive years. As of September 30, 2004, the aggregate value of theoptions to subscribe for ordinary shares issued by Mvela Resources to GoldFields was approximately Rand 1.3 million. The term of the agreement is fiveyears.

On March 8, 2004, the shareholders of Gold Fieldsapproved a series of transactions, referred to in this discussion as theMvelaphanda Transaction, involving the acquisition by Mvela Resources of a 15%beneficial interest in the South African gold mining assets of Gold Fields for acash consideration of Rand 4,139 million.

The Mvelaphanda Transaction was preceded by aninternal restructuring of Gold Fields, whereby each of the Driefontein, Kloofand Beatrix mining operations, as well as certain ancillary assets andoperations, was transferred to a new, wholly-owned subsidiary of Gold Fields, GFIMining South Africa (Proprietary) Limited, or GFIMSA.

On November 26, 2003, Gold Fields, MvelaResources, Mvelaphanda Gold (Proprietary) Limited, or Mvela Gold, awholly-owned subsidiary of Mvela Resources, and GFIMSA entered into a covenantsagreement, or the Covenants Agreement, regulating their rights and obligationswith respect to GFIMSA. This agreement became effective following the advanceby Mvela Gold of the loan to GFIMSA described below, which is referred to inthis discussion as the Mvela Loan, and, among other things, provides for MvelaGold to nominate two members of GFIMSA’s Board of Directors and two members ofeach of GFIMSA’s Operations Committee and Transformation Committee, the latterof which has been established to monitor compliance with the mining charterpromulgated under the Mineral and Petroleum Resources Development Act 2002.Under the Covenants Agreement, GFIMSA cannot dispose of any material assets,enter into, cancel or alter any material transaction between GFIMSA and any relatedparty or make any material amendment to its constitutive documents without theprior written consent of Mvela 

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Gold. In addition, if Gold Fields or GFIMSA wants toincrease the interest of black empowerment entities in GFIMSA or in anybusiness or assets of GFIMSA, other than pursuant to an employee shareincentive scheme, Gold Fields must offer to Mvela Gold the opportunity toincrease its interest in GFIMSA. By its terms, the Covenants Agreement remainsin force for so long as Gold Fields remains a shareholder in GFIMSA and MvelaGold holds its empowerment interest in or is a shareholder of GFIMSA and MvelaGold holds the right to subscribe for 15% of the share interest in GFIMSA,provided that it terminates if the shares of GFIMSA are listed on the JSELimited.

On December 11, 2003, Gold Fields, GFIMSA, andMvela Gold entered into a subscription and share exchange agreement, or theSubscription and Share Exchange Agreement, pursuant to which, upon repayment ofthe Mvela Loan, Mvela Gold must subscribe for shares equal to 15% of GFIMSA’soutstanding share capital, including the newly issued shares, for considerationof Rand 4,139 million. In addition, for a period of one year after thesubscription by Mvela Gold of the GFIMSA shares, each of Gold Fields and MvelaGold will be entitled to require the exchange of Mvela Gold’s GFIMSA shares forordinary shares of Gold Fields of an equivalent value based on an exchangeratio equal to 15% of a discounted cash flow calculation as applied to GFIMSA’soperations divided by the same calculation as applied to Gold Fields’operations, with certain adjustments. Mvela Gold is entitled to dispose of theGFIMSA shares and any Gold Fields ordinary shares it may hold only inaccordance with the terms of a pre-emptive rights agreement entered into by theparties, whereby if Mvela Gold receives an offer for, or otherwise wishes tosell, any GFIMSA or Gold Fields shares, it must first offer to sell them toGold Fields. The Subscription and Share Exchange Agreement became unconditionalfollowing the advance of the Mvela Loan to GFIMSA on March 17, 2004.

On December 11, 2003, Gold Fields, GFIMSA, MvelaGold, First Rand Bank Limited, Gold Fields Australia Pty Limited, or GoldFields Australia, and Gold Fields Guernsey Limited, or Gold Fields Guernsey(which was reincorporated and renamed during fiscal 2006 as Gold FieldsHoldings Company (BVI) Limited), entered into a loan agreement, or the MvelaLoan Agreement, pursuant to which Mvela Gold advanced a loan of Rand 4,139million, or the Mvela Loan, to GFIMSA on March 17, 2004. GFIMSA appliedthe loan toward funding its acquisition of Gold Fields’ South African miningoperations and certain ancillary assets and operations as part of the internalrestructuring of Gold Fields.

The Mvela Loan was funded by way of commercial bankdebt of approximately Rand 1,300 million and mezzanine finance of approximatelyRand 1,100 million, with the balance of approximately Rand 1,700 million beingraised by way of an international private placement of shares of MvelaResources. In connection with the mezzanine finance, Gold Fields subscribed forpreference shares in an amount of Rand 200 million in Micawber 325(Proprietary) Limited, or Micawber, a special-purpose entity established by themezzanine lenders. Further, Gold Fields subscribed for 4,350,000 ordinaryshares of Mvela Resources which were issued by Mvela Resources in the privateplacements for consideration of Rand 100 million. In order to facilitate theprivate placement, Mvela Resources proposed a scheme of arrangement, or theScheme, between itself and the holders of its linked units. The effect of theScheme, which became operative on November 24, 2003, was that eachlinked unit holder received two ordinary shares of Mvela Resources for eachlinked unit held. In order to maintain the same number of listed instruments inissue after the implementation of the Scheme, Mvela Resources consolidated itsordinary share capital on a two for one basis. As a result, the net effect ofthe Scheme and the share consolidation is that Gold Fields has 1,275,349options to acquire the same number of ordinary shares of Mvela Resources issuedin connection with the Exploration Arrangement. In addition, pursuant to anagreement entered into on February 13, 2004, or the PIC Agreement, GoldFields has effectively guaranteed a loan of Rand 150 million. See “Operatingand Financial Review and Prospects—Liquidity and Capital Resources—CashResources—Investing” and “—Credit Facilities—Mvela Loan.”

On February 13, 2004, the Mvela Loan Agreementwas amended, principally in order to add and clarify certain definitions.

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On November 17, 2004, GFL Mining ServicesLimited, or GFLMSL, Gold Fields, Mvela Gold, Mvela Resources and GFIMSA enteredinto an agreement, referred to in this discussion as the Amendment Agreement,amending the existing agreements relating to the Mvelaphanda Transaction,including, among others, the Subscription and Exchange Agreement and theCovenants Agreement. The agreements were amended to provide, among otherthings, that Mvela Resources may acquire a minimum of 45,000,000 and a maximumof 55,000,000 Gold Fields shares should it elect to exchange its equityinterest in the South African assets for Gold Fields’ shares.

Mvela Holdings (Proprietary) Limited, or MvelaHoldings, the parent company of Mvela Resources, recently entered into variousagreements in terms of which the status quo regarding the shareholding in MvelaResources as of the date of the Mvelaphanda Transaction was restored by MvelaHoldings once again having a direct interest in the issued share capital ofMvela Resources. On July 17, 2006, Gold Fields, Mvela Gold, MvelaResources, Mvela Holdings, GFIMSA, GFLMSL and others entered into an agreementfurther amending the existing agreements relating to the MvelaphandaTransaction, including, among others, the Covenants Agreement and the SponsorSupport, Guarantee and Retention Agreement. In accordance with the revisedagreements, Mvela Holdings undertook to remain an HDSA company, to retain beneficialownership of no less than 26% of the issued equity share capital of MvelaResources, to have board control of Mvela Resources (together with other HDSAs)and to retain management control of Mvela Resources pursuant to a writtenmanagement agreement.

See “Operating andFinancial Review and Prospects—Overview—General—Mvelaphanda Transaction.”

***Rand Refinery***

GFL Mining Services Limited, or GFLMSL, as agent forGFIMSA, has an agreement with Rand Refinery Limited, or Rand Refinery, in whichGold Fields holds a 33.1% interest, providing for the refining of substantiallyall of Gold Fields’ South African gold production by Rand Refinery. Prior to October 1,2004, GFLMSL acted as agent for Rand Refinery to sell up to 50% of Gold Fields’South African production. However, since October 1, 2004, Gold Fieldshas sold the gold produced from its South African operations itself. GoldFields Ghana Limited, or Gold Fields Ghana, and Abosso Goldfields Limited, orAbosso, are each party to agreements with Rand Refinery to transport, refineand sell substantially all of the gold production from the Tarkwa and Damangmines entered into in June 2003. Nicholas J. Holland, who is the ChiefFinancial Officer and a Director of Gold Fields, has been a Director of RandRefinery since July 12, 2000. As a Director of GFLMSL, which is awholly-owned subsidiary of Gold Fields, Mr. Holland has declared hisinterest in the contract between Rand Refinery and GFLMSL, pursuant to SouthAfrican requirements, and has not participated in the decision of Rand Refineryto enter into the agreement with GFLMSL, Gold Fields Ghana or Abosso. Mr. Hollandsigned the agreement with Rand Refinery on behalf of GFLMSL. See “Informationon the Company—Description of Mining Business—Refining and Marketing” forfurther details regarding these arrangements.

Gold Fields believes that the above transactions withrelated parties have been conducted on terms at least as favorable to it as arm’slength terms.

None of the directors or officers of Gold Fields orany associate of such director or officer is currently or has been at any timeduring the past three fiscal years materially indebted to Gold Fields.

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**ITEM 8:FINANCIAL INFORMATION**

Reference is made to Item18 for a list of all financial statements filed as part of this annual report.For information on legal proceedings please refer to “Information on theCompany” above.

**Dividends andDividend Policy**

Thefollowing table sets forth the dividends announced and paid per share inrespect of Gold Fields’ ordinary shares for the periods indicated:

| ** **                       | ** ** | **Year ended June 30,** | ** ** |
|----------------------------------|------------|----------------------------------------|------------|
| ** **                       | ** ** | **2002**                               | ** ** | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** | **2007** | ** ** |
| ** **                       | ** ** | **($)**                                | ** ** | **(R)** | ** ** | **($)** | ** ** | **(R)** | ** ** | **($)** | ** ** | **(R)** | ** ** | **($)** | ** ** | **(R)** | ** ** | **($)** | ** ** | **(R)** | ** ** | **($)** | ** ** | **(R)** | *** *** |
| Prior year’s final dividend |       | 0.05                                   |       | 0.40 |   | 0.40 |   | 2.20 |   | 0.13 |   | 1.00 |   | 0.06 |   | 0.40 |   | 0.06 |   | 0.40 |   | 0.15 | (1) | 1.10 | (1) |
| Interim dividend                 |       | 0.08                                   |       | 0.90 |   | 0.90 |   | 1.50 |   | 0.06 |   | 0.40 |   | 0.05 |   | 0.30 |   | 0.07 |   | 0.40 |   | — |   | — |   |
| Total dividend                   |       | 0.13                                   |       | 1.30 |   | 1.30 |   | 3.70 |   | 0.19 |   | 1.40 |   | 0.11 |   | 0.70 |   | 0.13 |   | 0.80 |   | — |   | — |   |

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Note:

(1)           This final dividend was announced on August 3,2006 and paid on August 28, 2006.

Gold Fields’ dividendpolicy is to declare an interim and final dividend in respect of each financialyear based on 50% of the earnings for the year before taking account ofinvestment opportunities. Earnings are adjusted to exclude unrealized gains andlosses on financial instruments and foreign debt, but actual cash flows onmaturity of financial instruments are included in the determination of adjustedearnings.

**Significant Changes**

Please refer to “Operatingand Financial Review and Prospects—Recent Developments.”

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**ITEM 9:THE OFFER AND LISTING**

**Listing Details**

The principal non-United States trading market for theordinary shares of Gold Fields is the JSE Limited, or JSE, on which theytrade under the symbol “GFI.” The ordinary shares of Gold Fields are alsolisted on the Official List of the UK Listing Authority and traded on theLondon Stock Exchange, and are listed on the Premier Marché of Euronext Parisand the SWX Swiss Exchange. Gold Fields’ International Depositary Shares arelisted on Euronext Brussels. As of June 30, 2006, 6,475 record holders ofGold Fields’ ordinary shares, holding an aggregate of 185,869,889 ordinary shares(37.7%), were listed as having addresses in South Africa. As of June 30,2006, 21,400 record holders of Gold Fields’ ordinary shares, holding anaggregate of 175,667,071 ordinary shares (35.6%), were listed as havingaddresses in the United States.

Gold Fields’ AmericanDepositary Shares, or ADSs, currently trade in the United States on The New YorkStock Exchange under the symbol “GFI.” The American Depositary Receipts, orADRs, representing the ADSs are issued by The Bank of New York, as Depositary. EachADR represents one ADS. Each ADS represents one ordinary share. On October 31,2006, Gold Fields listed its ADRs on the Dubai International FinancialExchange.

**JSE Trading History**

The tables below show the high and low closing pricesin Rand and the average daily volume of trading activity on the JSE for GoldFields’ ordinary shares for the last five fiscal years.

Thefollowing table sets out ordinary share trading information on a yearly basisfor the last five fiscal years, as reported by I-Net Bridge (Proprietary)Limited, or I-Net Bridge, a South African financial information service:

| ** **                             | ** ** | **Ordinary share price**           | ** ** | **Average daily  trading volume  (number of**                     | ** ** |
|----------------------------------------|------------|----------------------------------------------|------------|----------------------------------------------------------------------------------|------------|
| **Year ended June 30,** | ** ** | ** **                                   | ** ** | **      High      ** | ** ** | **      Low      ** | ** ** | **ordinary shares)** | ** ** |
| ** **                             | ** ** | **(Rand per ordinary share)** | ** ** | ** **                                                                       | ** ** |
| 2002                                   |       |                                         | 168.00     |                                                                             |       |   | 32.50 |   |   |   | 1,642,279 |   |   |
| 2003                                   |       |                                         | 150.63     |                                                                             |       |   | 71.40 |   |   |   | 1,671,998 |   |   |
| 2004                                   |       |                                         | 110.40     |                                                                             |       |   | 65.02 |   |   |   | 1,787,830 |   |   |
| 2005                                   |       |                                         | 94.02      |                                                                             |       |   | 55.09 |   |   |   | 1,485,099 |   |   |
| 2006                                   |       |                                         | 162.00     |                                                                             |       |   | 69.01 |   |   |   | 2,067,115 |   |   |
| 2007 (through  October 31, 2006)  |       |                                         | 173.80     |                                                                             |       |   | 122.00 |   |   |   | 2,056,634 |   |   |
|                                        |            |                                              |            |                                                                                  |            |  |  |  |  |  |  |  |  |  |  |

 

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Thefollowing table sets out ordinary share trading information on a quarterlybasis for the periods indicated, as reported by I-Net Bridge:

| ** **               | ** ** | **Ordinary share price**           | ** ** | **Average daily  trading volume  (number of**                     | ** ** |
|--------------------------|------------|----------------------------------------------|------------|----------------------------------------------------------------------------------|------------|
| **Quarter ended**   | ** ** | ** **                                   | ** ** | **      High      ** | ** ** | **      Low      ** | ** ** | **ordinary shares)** | ** ** |
| ** **               | ** ** | **(Rand per ordinary share)** | ** ** | ** **                                                                       | ** ** |
| September 30,  2004 |       |                                         | 87.50      |                                                                             |       |   | 55.09 |   |   |   | 1,643,839 |   |   |
| December 31,  2004  |       |                                         | 94.02      |                                                                             |       |   | 69.10 |   |   |   | 1,827,766 |   |   |
| March 31,  2005     |       |                                         | 81.41      |                                                                             |       |   | 66.02 |   |   |   | 785,345 |   |   |
| June 30,  2005      |       |                                         | 77.90      |                                                                             |       |   | 57.95 |   |   |   | 1,655,983 |   |   |
| September 30,  2005 |       |                                         | 95.32      |                                                                             |       |   | 69.01 |   |   |   | 1,397,954 |   |   |
| December 31,  2005  |       |                                         | 111.89     |                                                                             |       |   | 86.60 |   |   |   | 1,800,664 |   |   |
| March 31,  2006     |       |                                         | 146.80     |                                                                             |       |   | 111.80 |   |   |   | 2,244,707 |   |   |
| June 30,  2006      |       |                                         | 162.00     |                                                                             |       |   | 110.81 |   |   |   | 2,711,795 |   |   |
| September 30, 2006  |       |                                         | 173.80     |                                                                             |       |   | 126.11 |   |   |   | 1,875,952 |   |   |
|                          |            |                                              |            |                                                                                  |            |  |  |  |  |  |  |  |  |  |  |

 

Thefollowing table sets out ordinary share trading information on a monthly basisfor each of the last six months, as reported by I-Net Bridge:

| ** **               | ** ** | **Ordinary share price**           | ** **   | **Average daily  trading volume  (number of**                     | ** **   |
|--------------------------|------------|----------------------------------------------|--------------|----------------------------------------------------------------------------------|--------------|
| **Month ended**     | ** ** | ** **                                   | ** **   | **      High      ** | ** **   | **      Low      ** | ** ** | **ordinary shares)** | ** ** |
| ** **               | ** ** | **(Rand per ordinary share)** | *** *** | *** ***                                                                     | *** *** |
| May 31, 2006        |       |                                         | 159.94       |                                                                             |         |   | 130.51 |   |   |   | 3,097,434 |   |   |
| June 30,  2006      |       |                                         | 162.00       |                                                                             |         |   | 110.81 |   |   |   | 2,700,250 |   |   |
| July 31,  2006      |       |                                         | 173.80       |                                                                             |         |   | 142.00 |   |   |   | 1,874,738 |   |   |
| August 31,  2006    |       |                                         | 153.05       |                                                                             |         |   | 131.25 |   |   |   | 1,857,151 |   |   |
| September 29,  2006 |       |                                         | 159.26       |                                                                             |         |   | 126.11 |   |   |   | 1,897,909 |   |   |
| October 31, 2006    |       |                                         | 143.25       |                                                                             |         |   | 122.00 |   |   |   | 2,574,039 |   |   |
|                          |            |                                              |              |                                                                                  |              |  |  |  |  |  |  |  |  |  |  |

 

On November 15, 2006,the closing price of the ordinary shares on the JSE was R125.13.

**New York StockExchange and Nasdaq SmallCap Market Trading History**

The tables below show the high and low closing pricesin U.S. dollars and the average daily volume of trading activity on The NasdaqSmallCap Market for Gold Fields’ ADSs from July 1, 2001 until May 8,2002 and on The New York Stock Exchange since May 9, 2002.

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The following table setsout ordinary share trading information on a yearly basis for the last fivefiscal years, as reported by Bloomberg:

| ** **                             | ** ** | **ADS price**        | ** **   | **Average daily  trading volume  (number of** | ** **   |
|----------------------------------------|------------|---------------------------|--------------|--------------------------------------------------------------|--------------|
| **Year ended June 30,** | ** ** | ** **                | ** **   | **High**                                                     | ** **   | **Low** | ** ** | **ADSs)** | ** ** |
| ** **                             | ** ** | **($ per ADS)** | *** *** | *** ***                                                 | *** *** |
| 2002(1)                                |       | 16.36                     |         | 3.86                                                         |         |   | 1,587,110 |   |   |
| 2003                                   |       | 15.25                     |         | 9.00                                                         |         |   | 2,376,579 |   |   |
| 2004                                   |       | 15.12                     |         | 9.93                                                         |         |   | 1,887,030 |   |   |
| 2005                                   |       | 14.94                     |         | 9.25                                                         |         |   | 1,557,127 |   |   |
| 2006                                   |       | 16.16                     |         | 10.69                                                        |         |   | 1,649,516 |   |   |
| 2007 (through  October 31, 2006)  |       | 24.10                     |         | 16.50                                                        |         |   | 2,385,219 |   |   |
|                                        |            |                           |              |                                                              |              |  |  |  |  |  |  |

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Note:

(1)           Gold Fields delisted its ADSs from The Nasdaq SmallCapMarket on May 8, 2002 and listed its ADSs on The New York Stock Exchangeon May 9, 2002.

Thefollowing table sets out ADS trading information on a quarterly basis for the periodsindicated, as reported by Bloomberg:

| ** **               | ** ** | **ADS price**        | ** **   | **Average daily  trading volume  (number of** | ** **   |
|--------------------------|------------|---------------------------|--------------|--------------------------------------------------------------|--------------|
| **Quarter ended**   | ** ** | ** **                | ** **   | **High**                                                     | ** **   | **Low** | ** ** | **ADSs)** | ** ** |
| ** **               | ** ** | **($ per ADS)** | *** *** | *** ***                                                 | *** *** |
| September 30,  2004 |       | 13.65                     |         | 9.25                                                         |         |   | 1,330,780 |   |   |
| December 31,  2004  |       | 14.94                     |         | 12.27                                                        |         |   | 2,225,906 |   |   |
| March 31,  2005     |       | 13.20                     |         | 10.87                                                        |         |   | 1,119,374 |   |   |
| June 30,  2005      |       | 11.50                     |         | 9.57                                                         |         |   | 1,531,927 |   |   |
| September 30,  2005 |       | 14.66                     |         | 10.69                                                        |         |   | 1,645,808 |   |   |
| December 31,  2005  |       | 17.79                     |         | 13.05                                                        |         |   | 1,743,427 |   |   |
| March 31,  2006     |       | 24.02                     |         | 18.58                                                        |         |   | 2,527,905 |   |   |
| June 30,  2006      |       | 26.33                     |         | 16.46                                                        |         |   | 3,253,106 |   |   |
| September 30, 2006  |       | 24.10                     |         | 17.32                                                        |         |   | 2,158,352 |   |   |
|                          |            |                           |              |                                                              |              |  |  |  |  |  |  |

 

Thefollowing table sets out ADS trading information on a monthly basis for each ofthe last six months, as reported by Bloomberg:

| ** **               | ** ** | **ADS price**        | ** **   | **Average daily  trading volume  (number of** | ** **   |
|--------------------------|------------|---------------------------|--------------|--------------------------------------------------------------|--------------|
| **Month ended**     | ** ** | ** **                | ** **   | **High**                                                     | ** **   | **Low** | ** ** | **ADSs)** | ** ** |
| ** **               | ** ** | **($ per ADS)** | *** *** | *** ***                                                 | *** *** |
| May 31, 2006        |       | 26.33                     |         | 19.82                                                        |         |   | 3,615,700 |   |   |
| June 30,  2006      |       | 22.90                     |         | 16.46                                                        |         |   | 3,255,441 |   |   |
| July 31,  2006      |       | 24.10                     |         | 20.45                                                        |         |   | 2,287,080 |   |   |
| August 31,  2006    |       | 22.81                     |         | 19.33                                                        |         |   | 1,782,517 |   |   |
| September 29,  2006 |       | 21.96                     |         | 17.32                                                        |         |   | 2,461,835 |   |   |
| October 31, 2006    |       | 18.52                     |         | 16.50                                                        |         |   | 3,034,882 |   |   |
|                          |            |                           |              |                                                              |              |  |  |  |  |  |  |

 

On November 15, 2006,the closing price of Gold Fields’ ADSs quoted on The New York Stock Exchangewas $17.51.

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**The JSE Limited**

The JSE was formed in 1887. The JSE providesfacilities for the buying and selling of a wide range of securities, includingequity and corporate debt securities and warrants in respect of securities, aswell as Krugerrands.

The JSE is a self-regulating organization operatingunder the ultimate supervision of the Ministry of Finance, through theFinancial Services Board and its representative, the Registrar of StockExchanges. Following the introduction of the Stock Exchanges Control AmendmentAct No. 54 of 1995, or the Stock Exchange Act, which provides thestatutory framework for the deregulation of the JSE, the JSE’s rules wereamended with effect from November 8, 1995. These amendments removed therestrictions on corporate membership and allowed stockbrokers to form limitedliability corporate entities. Members were, for the first time, also requiredto keep client funds in trust accounts separate from members’ own funds.Further rules to complete the deregulation of the JSE, as envisaged by theStock Exchange Act, were promulgated during 1996 to permit members of the JSE totrade either as agents or as principals in any transaction in equities and toallow members to negotiate freely the brokerage commissions payable on agencytransactions in equities. With effect from 1996, screen trading commenced onthe JSE.

The market capitalization of companies listed on theJSE was approximately Rand 4.6 trillion as of September 29, 2006. Theactual float available for public trading is significantly smaller than theaggregate market capitalization because of the large number of long-termholdings by listed holding companies in listed subsidiaries and associates, theexistence of listed pyramid companies and cross-holdings between listedcompanies. Liquidity on the JSE (measured by reference to the total marketvalue of securities traded as a percentage of the total market capitalization)was 35.5% for 2005. Trading is concentrated in a small, but growing, number ofcompanies. As of September 29, 2006, there were 383 listed companies onthe JSE.

South Africa was included in the Morgan StanleyCapital International Emerging Markets Free Index and the International FinanceCorporation Investable Index in March and April 1995, respectively.South Africa has a significant representation in these emerging marketindices.

The four main indices charting the performance of theJSE as a whole and of composite sectors are the All Share Index, the Financial15 Index, the Industrial 25 Index and the Resource 20 Index. As of September 6,2006, the All Share Index, Financial 15 Index, Industrial 25 Index and theResource 20 Index accounted for 100.0%, 20.6%, 27.4% and 42.8%, respectively,of the market capitalization of the JSE.

The JSE has established aproject named Share Transactions Totally Electronic, or STRATE, which hasinvolved the dematerialization of share certificates in a central securitiesdepositary and the introduction of contractual, rolling, electronic settlementin order to increase the speed, certainty and efficiency of settlement and tofall into line with international practice. Gold Fields joined STRATE on October 1,2001. Investors are given the choice of either holding their securities indematerialized form in the central securities depositary or retaining theirshare certificates. Shareholders who elect to retain their share certificatesare not able to trade their shares on the JSE, although they may trade theirshares off-market. Settlement of dematerialized shares traded electronically onthe JSE is made five days after each trade (T+5).

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**ITEM10: ADDITIONAL INFORMATION**

**General**

Gold Fields is a publiccompany registered in South Africa under the Companies Act No. 61 of 1973,or the Companies Act, which limits the liability of its shareholders, and isgoverned by its Memorandum of Association and Articles of Association and the provisionsof the Companies Act. Gold Fields’ registration number is 1968/004880/06. Section 3of Gold Fields’ Memorandum of Association provides that its objectives are,among other things: (1) to purchase, lease or otherwise acquire mines,mineral and other properties, lands, farms and hereditaments, (2) to buy,sell, refine and deal in bullion, specie, coin and precious metals and (3) tocarry on any mining and metallurgical operation which may seem conducive to anyof Gold Fields’ objectives.

**Share Capital**

The authorized sharecapital of Gold Fields consists of 1,000,000,000 ordinary shares with a parvalue of Rand 0.50 each. The aggregate number of issued shares of Gold Fieldson October 31, 2006 was 495,505,475 ordinary shares of Rand 0.50 each. Allof the issued ordinary shares rank equally with one another and are fully paidand are not subject to calls for additional payments of any kind.

More than 10% of GoldFields’ current issued share capital has been paid for in assets other thancash. Gold Fields ordinary shares were exchanged for shares in GFL MiningServices Ltd. during the merger with Gold Fields in 1999 and for the minorityshares in St. Helena Gold Mines Limited when Gold Fields acquired totalownership. See “Information on the Company—History.” On November 30, 2001,12,000,000 ordinary shares were issued to WMC Resources Ltd as part of theconsideration for the acquisition of St. Ives and Agnew mining operations fromWMC Limited and WMC Resources Ltd. See “Information on the Company—Gold Fields’Mining Operations—Ghana Operations—Damang Mine.” In addition, on September 11,2003, Gold Fields issued 564,841 ordinary shares to Outokumpu Oy, or Outokumpu,as part of the consideration for the acquisition of Outokumpu’s 49% interest inthe Arctic Platinum Project, or the APP. See “Information on the Company—Exploration—GoldFields’ Exploration Projects—Arctic Platinum Project.”

At a general meeting heldon November 10, 2006, Gold Fields’ shareholders approved a resolutionauthorizing the Gold Fields Board to allot and issue additional ordinary sharesfor cash up to a maximum of 10% of the issued ordinary shares in any onefinancial year, subject to the JSE Rules. Under the JSE Rules, any such issue,together with any other shares issued in that financial year, in the aggregatecannot exceed 15% of the number of shares in Gold Fields’ issued share capitalon the date an application is made to the JSE in respect of that issuance, lessany other shares issued in that financial year. This general authority is validuntil Gold Fields’ next annual general meeting or 15 months from the date onwhich the resolution was passed, whichever is earlier.

Thefollowing table sets forth changes in Gold Fields’ issued share capital for theperiods indicated:

| **As of**             | ** ** | ** **  | ** ** | **Total issued  ordinary  shares** | ** ** | **Total  authorized  ordinary  shares** | ** ** |
|----------------------------|------------|-------------|------------|-----------------------------------------|------------|-----------------------------------------|------------|
| June 30, 2004(1)      |       | 491,492,520 |       | 1,000,000,000                           |       |
| June 30, 2005(2)      |       | 492,294,226 |       | 1,000,000,000                           |       |
| June 30, 2006(3)      |       | 494,824,723 |       | 1,000,000,000                           |       |
| September 30, 2006(4) |       | 495,443,345 |       | 1,000,000,000                           |       |

----

Notes:

(1)           Reflects the issuance of 19,127,648ordinary shares, of which 564,841 shares were issued to Outokumpu as part ofthe consideration for Gold Fields’ purchase of Outokumpu’s 49% stake in theArctic Platinum Project, 17,250,000 

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shares were issuedin an international private placement, 1,300,977 shares were issued under theGF Management Incentive Scheme and the GF Non-Executive Director Share Plan and11,830 shares were issued to others.

(2)           Reflects the issuance of 801,706 ordinary shares issuedunder the GF Management Incentive Scheme and the GF Non-Executive Share Plan.

(3)           Reflects the repurchase by the Company of 1,000,000 ofits ordinary shares at a weighted average price of Rand 74.89, which werede-listed and cancelled on August 17, 2005, the issuance of 333,681ordinary shares issued under the GF Management Incentive Scheme and the GFNon-Executive Director Share Plan and the issuance of 2,530,497 ordinary sharesissued under the GF Management Incentive Scheme and the GF Non-Executive SharePlan.

(4)           Reflects the issuance of 618,622 ordinaryshares issued under the GF Management Incentive Scheme.

**Dividends andPayments to Shareholders**

Gold Fields maymake payments (including the payment of dividends) to its shareholders fromtime to time in accordance with provisions of the Companies Act and therequirements of the JSE and Gold Fields’ Articles of Association. The CompaniesAct prohibits a payment (including the payment of any dividend) to a company’sshareholders if there are reasonable grounds for believing that:

·       thecompany is, or would be after the payment, unable to pay its debts as theybecome due; or

·       theconsolidated assets of the company fairly valued would, after the payment, beless than the consolidated liabilities of the company.

Subject to the above requirements, the shareholders ofGold Fields in a general meeting or the directors may from time to time declarea dividend or any other payment to be paid to shareholders and to the holdersof share warrants (if any) in proportion to the number of shares held by them.

All unclaimed dividends orother payments to shareholders may be invested or otherwise be made use of bythe directors for the benefit of Gold Fields until claimed, provided that anydividend or bonus or other payment to shareholders remaining unclaimed for aperiod of not less than three years from the date on which it became payablemay be forfeited by resolution of the directors for the benefit of Gold Fields.

**Voting Rights**

Every shareholder of Gold Fields, or representative ofa shareholder, who is present at a shareholders’ meeting has one vote on a showof hands, regardless of the number of shares he holds or represents or numberof shareholders he represents, unless a poll is demanded. Every Gold Fields’shareholder is, on a poll, entitled to one vote per ordinary share held. A pollmay be demanded by any person entitled to vote at the meeting. Neither theCompanies Act nor Gold Fields’ Articles of Association provide for cumulative voting.

A shareholder is entitledto appoint a proxy to attend, speak and vote at any meeting on his or herbehalf. The proxy need not be a shareholder.

**Issue of AdditionalShares and Pre-emptive Rights**

Shareholder approval is required for any issuance ofadditional shares. Shareholders may either convey a general or specificauthority to directors to issue shares. A general authority is valid until thenext annual general meeting.

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The JSE and GoldFields’ Articles of Association require that any new issue of equity shares byGold Fields must first be offered to existing shareholders in proportion totheir shareholding in the company unless, among other things, the issuance tonew shareholders is:

·       pursuantto a shareholder approved employee share incentive scheme;

·       forthe acquisition of an asset, provided that, if the issue is more than 30% ofthe company’s issued share capital, a simple majority of shareholders must votein favor of the acquisition;

·       toraise cash through a general issuance in the discretion of the directors to thegeneral public (but not to related parties) of up to 15% of the issued sharecapital in any one fiscal year at an issue price with a discount not exceeding10% of the 30 business day weighted average trading price prior to the date theapplication is made to the JSE to list the shares provided that a 75% majorityof votes cast by shareholders at a general meeting must approve the granting ofsuch authority to the directors; or

·       to raise cash through aspecific issuance of shares for cash, provided that a 75% majority ofshareholders, other than controlling shareholders, votes in favor of theresolution to issue the shares at a general meeting.

**Transfer of Shares**

The transfer of any GoldFields certificated share will be implemented in accordance with the provisionsof the Companies Act using the then common form of transfer. Dematerializedshares which have been traded on the JSE are transferred on the STRATE systemand delivered five business days after each trade. The transferor of any shareis deemed to remain the holder of that share until the name of the transfereeis entered in Gold Fields’ register for that share. Since Gold Fields sharesare traded through STRATE, only shares which have been dematerialized may betraded on the JSE. Accordingly, Gold Fields shareholders who hold shares incertificated form will need to dematerialize their shares in order to trade onthe JSE.

**Disclosure ofInterest in Shares**

Under South African law, aregistered holder of Gold Fields shares who is not the beneficial owner of suchshares is required to disclose every three months to Gold Fields the identityof the beneficial owner and the number and class of securities held on behalfof the beneficial owner. Moreover, Gold Fields may, by notice in writing,require a person who is a registered shareholder, or whom Gold Fields knows orhas reasonable cause to believe has a beneficial interest in Gold Fieldsordinary shares, to confirm or deny whether or not such person holds theordinary shares or beneficial interest and, if the ordinary shares are held foranother person, to disclose to Gold Fields the identity of the person on whosebehalf the ordinary shares are held. Gold Fields may also require the person togive particulars of the extent of the beneficial interest held during the threeyears preceding the date of the notice. Gold Fields is obligated to establishand maintain a register of the disclosures described above and to publish inits annual financial statements a list of the persons who hold beneficialinterest equal to or in excess of 5% of the total number of ordinary sharesissued by Gold Fields together with the extent of those beneficial interests.

**General Meetings ofShareholders**

The directors may convene general meetings of GoldFields shareholders and a general meeting may also be convened on a requisitionby shareholders made pursuant to the Companies Act. Gold Fields is obligated tohold an annual general meeting for each fiscal year within nine months of theend of each fiscal year and prior to 15 months after the date of the lastannual general meeting.

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Annual general meetings and meetings calling for thepassage of a special resolution require 21 days’ notice in writing of theplace, day and time of the meeting to shareholders. Any other general meetingof Gold Fields shareholders requires at least 14 days’ notice in writing toshareholders.

Business may be transacted at any meeting ofshareholders only while a quorum of shareholders is present. Three shareholderspresent personally or by representative and entitled to vote constitutes aquorum for a general meeting and an annual general meeting.

The annual generalmeeting deals with and disposes of all matters prescribed by Gold Fields’Articles of Association and by the Companies Act, including:

·       theconsideration of the audited financial statements and report of the independentaccountants; and

·       the election of directors.

**Annual Report andAccounts**

Gold Fields is required to keep the accounting recordsand books of accounts as are necessary to present the state of affairs of thecompany and to explain the financial position of the company as prescribed bythe Companies Act. No shareholder (who is not a director of Gold Fields) hasthe right to inspect any account or book or document of Gold Fields, except asconferred by the Companies Act or authorized by the directors or by aresolution of Gold Fields in general meeting.

The directors of GoldFields will cause to be prepared annual financial statements and an annualreport as required by the Companies Act and the JSE Listing Requirements. GoldFields will send by mail to the registered address of every shareholder a copyof the annual report and annual financial statements. Not later than threemonths after the first six months of its financial year, Gold Fields will mailto every shareholder an interim report for the previous six-month period.

**Changes in Capitalor Objects and Powers of Gold Fields**

The Gold Fieldsshareholders may, by the passing of a special resolution in accordance with theprovisions of the Companies Act:

·       increaseGold Fields’ authorized share capital;

·       divideall or any part of Gold Fields’ share capital into shares of larger amount thanGold Fields’ existing shares or consolidate and reduce the number of the issuedno par value shares, if any;

·       subdivideall or any portion of Gold Fields’ shares into shares of a smaller amount thanis fixed by Gold Fields’ Memorandum of Association;

·       convertall of Gold Fields’ ordinary or preference share capital from having a parvalue into shares of no par value;

·       reduceGold Fields’ authorized share capital and, if required by law, its issued sharecapital, stated capital and any capital redemption reserve fund or any sharepremium account;

·       alterthe provisions of Gold Fields’ Memorandum of Association with respect to theobjects and powers of the company;

·       subjectto the provisions of the Companies Act or any other South African law governingcompanies and the requirements of the JSE and any other stock exchange uponwhich the shares of Gold Fields may be quoted or listed from time to time,allow Gold Fields to acquire shares issued by itself or by its holding companyor in any subsidiary of its holding company from time to time, and providedthat:

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·       thedirectors may resolve that any return of capital made to all or anyshareholders whose registered addresses are outside South Africa will, subjectto any exchange control regulations then in force, be paid in such othercurrencies as may be stipulated by the directors. The directors may alsostipulate the date for converting Rand to those currencies and the provisionalrate of exchange, provided that the date for conversion must be within a periodof 30 days prior to the date of payment; and

·       all unclaimed amounts dueas a result of a reduction of capital or any consolidation or subdivision ofcapital may be invested or otherwise made use of by the directors for thebenefit of Gold Fields until claimed.

**Variation of Rights**

All or any of the rights,privileges or conditions attached to Gold Fields’ ordinary shares may be variedby a special resolution of Gold Fields passed in accordance with the provisionsof the Companies Act.

**Distribution ofAssets on Liquidation**

In the event of avoluntary or compulsory liquidation, dissolution or winding-up, the assetsremaining after payment of all the debts and liabilities of Gold Fields,including the costs of liquidation, shall be dealt with by a liquidator whomay, with the sanction of a special resolution, among other things, divideamong the shareholders any part of the assets of Gold Fields, and may vest anypart of the assets of Gold Fields as the liquidator deems fit in trustees forthe benefit of shareholders. The division of assets is not required to be donein accordance with the legal rights of shareholders of Gold Fields. Inparticular, any class may be given preferential or special rights or may bepartly or fully excluded.

**Purchase of Shares**

The Companies Act permits the establishment of shareincentive trusts for the purpose of purchasing shares of a company for thebenefit of its employees, including salaried directors. These share incentivetrusts are permitted to extend loans to company employees, other thannon-salaried directors, for the purpose of purchasing or subscribing for sharesof the company.

Gold Fields may, ifauthorized by special resolution, acquire its own shares; provided that thereare no reasonable grounds for believing that Gold Fields is or would be, afterthe payment, unable to pay its debts or that Gold Fields’ consolidated assetswould, after the payment, be less than its consolidated liabilities. Theprocedure for acquisition of shares by Gold Fields is regulated by its Articlesof Association, the Companies Act and the Listings Requirements of the JSE.

**Borrowing Powers**

The directors may exerciseall the powers of Gold Fields to borrow money and to give all or any part ofits property as security and to issue debentures or debenture stock (whethersecured or unsecured) and other securities (with such special privileges, ifany, as to allotment of shares or stock, attending and voting at generalmeetings, appointment of directors or otherwise as may be sanctioned by ageneral meeting) whether outright or as security for any debt, liability or obligationof Gold Fields or of any third party. Gold Fields has unlimited borrowingpowers.

**Non-South AfricanShareholders**

There are no limitations imposed by South African lawor by the Articles of Association of Gold Fields on the rights of non-SouthAfrican shareholders to hold or vote Gold Fields’ ordinary shares.

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**Rights of MinorityShareholders and Directors’ Duties**

Majority shareholders of South African companies haveno fiduciary obligations under South African common law to minorityshareholders. However, under the Companies Act, a shareholder may, undercertain circumstances, seek relief from the court if he has been unfairlyprejudiced by the company. There may also be common law personal actionsavailable to a shareholder of a company.

In South Africa, thecommon law imposes on directors duties to, among other things, act with care,skill and diligence and to conduct the company’s affairs honestly and in thebest interests of the company.

**Material Contracts**

***Mvelaphanda Transaction***

On March 8,2004, the shareholders of Gold Fields approved a series of transactions,referred to in this discussion as the Mvelaphanda Transaction, involving theacquisition by Mvelaphanda Resources Limited, or Mvela Resources, of a 15%beneficial interest in the South African gold mining assets of Gold Fields forcash consideration of Rand 4,139 million. In connection with the MvelaphandaTransaction:

·       onJuly 25, 2003, Beatrix Mining Ventures Limited, or Beatrix, DriefonteinConsolidated (Proprietary) Limited, or Driefontein, Kloof Gold Mining CompanyLimited, or Kloof, GFL Mining Services Limited, or GFLMSL, Gold Fields andNewshelf 706 Limited, or GFIMSA, entered into a reorganization agreement, orthe Reorganization Agreement, pursuant to which each of the Driefontein, Kloofand Beatrix mining operations was transferred to a new, wholly-owned subsidiaryof Gold Fields;

·       onNovember 26, 2003, Gold Fields, Mvela Resources, Mvelaphanda Gold(Proprietary) Limited, or Mvela Gold, a wholly owned subsidiary of MvelaResources, and GFI Mining South Africa (Proprietary) Limited, or GFIMSA, enteredinto a covenants agreement, or the Covenants Agreement, regulating their rightsand obligations with respect to GFIMSA;

·       onDecember 11, 2003, Gold Fields, GFIMSA, Mvela Gold, First Rand BankLimited, Gold Fields Australia Pty Limited and Gold Fields Guernsey enteredinto a loan agreement, or the Mvela Loan Agreement, pursuant to which MvelaGold advanced a loan of Rand 4,139 million, or the Mvela Loan, to GFIMSA on March 17,2004;

·       onDecember 11, 2003, Gold Fields, GFIMSA, and Mvela Gold entered into asubscription and share exchange agreement, or the Subscription and ShareExchange Agreement, pursuant to which, upon repayment of the Mvela Loan, MvelaGold must subscribe for shares equal to 15% of GFIMSA’s outstanding sharecapital, including newly issued shares, for consideration of Rand 4,139 million;

·       onFebruary 12, 2004, Beatrix, Kloof, Driefontein, GFLMSL, Gold Fields andGFIMSA entered into Addendum Number 1 to the Reorganization Agreement;

·       onFebruary 13, 2004 Gold Fields, GFIMSA, Mvela Gold, First Rand BankLimited, Gold Fields Australia Pty Limited and Gold Fields Guernsey enteredinto an addendum to the Mvela Loan Agreement, principally in order to add andclarify certain definitions;

·       onFebruary 13, 2004, Gold Fields, GFLMSL and the Public InvestmentCorporation, or the PIC, entered into a put option agreement pursuant to whichGold Fields has effectively guaranteed a loan of Rand 150 million from the PICto a special-purpose entity established by the mezzanine lenders that funded, inpart, the Mvela Loan;

·       onNovember 17, 2004, Gold Fields, GFLMSL, Mvela Gold, Mvela Resources andGFIMSA entered into an agreement amending the existing agreements relating tothe Mvelaphanda 

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Transaction, including,among others, the Subscription and Share Exchange Agreement and the CovenantsAgreement;

·       onNovember 17, 2004, Gold Fields, GFLMSL, Mvela Gold, Gold Fields Australia,Gold Fields Guernsey, First Rand Bank Limited and GFIMSA entered into a secondaddendum to the Mvela Loan Agreement; and

·       onJuly 17, 2006, Gold Fields, Mvela Gold, Mvela Resources, Mvela Holdings,GFIMSA, GFLMSL and others entered into an agreement further amending theexisting agreements relating to the Mvelaphanda Transaction, including, amongothers, the Covenants Agreement and the Sponsor Support, Guarantee andRetention Agreement.

See “Operating andFinancial Review and Prospects—Overview—Mvelaphanda Transaction.”

***Acquisition of Bolivar Gold Corporation***

On November 21, 2005, Gold Fields and BolivarGold Corporation, or Bolivar, jointly announced that they had entered into anagreement providing for Gold Fields to purchase, through a court approved planof arrangement, all of the securities of Bolivar for a total cash considerationof approximately $330 million. Bolivar shareholders were initially offeredC$3.00 per Bolivar common share and C$1.90, C$1.25 and C$0.40 per Bolivarwarrant expiring on March 17, 2008, August 25, 2008 and December 22,2009, respectively. The consideration for the warrants was calculated based onthe greater of (i) the amount of consideration per common share minus thewarrant strike price and (ii) a premium equal to the premium payable tocommon shareholders based on the closing price on November 18, 2005.Furthermore, in accordance with a trust indenture, the transaction triggeredthe redemption of a convertible debenture at C$1,095.25 in cash per C$1,000principal amount for a total amount of $24.1 million, included in the totalpurchase consideration referred to above. Definitive agreement documentationwas executed on December 1, 2005.

On January 11, 2006, Gold Fields and Bolivarannounced an increase in the consideration to be paid to Bolivar shareholders.Under the revised terms, holders of Bolivar common shares were offered C$3.20per Bolivar common share and holders of Bolivar warrants expiring on March 17,2008, August 25, 2008 and December 22, 2009 were offered C$2.20,C$1.65 and C$1.00 per warrant, respectively. At a Special Meeting of Bolivarshareholders held on January 12, 2006, 77% of the Bolivar shares and 82%of the Bolivar warrants were voted in favor of the arrangement. The SupremeCourt of the Yukon Territory in Canada approved the plan of arrangement, whichbecame effective on February 28, 2006, and Gold Fields acquired all outstandingsecurities of Bolivar.

On March 3, 2006,Orogen Holding (BVI) Limited (as borrower), or Orogen, Gold Fields, GFIMSA andGold Fields Holdings Company (BVI) Limited (as guarantors), Barclays Capitaland J.P. Morgan PLC (as arrangers), Financial Institutions (original lenders,as defined in the Facility) and J.P. Morgan Europe Limited (as agent) enteredinto a $250,000,000 Dual Currency Term Facility Agreement, or the OrogenFacility. The purpose of the Orogen Facility was to fund in part the Bolivar acquisitionand for general corporate purposes. As of June 30, 2006 an amount ofapproximately $158,000,000 hadbeen advanced to Orogen Holding (BVI) Limited under the Orogen Facility forpurposes of the Bolivar acquisition. The terms of the Orogen Facility are anupfront arrangement fee of 35 basis points and a margin over LIBOR of 35 basispoints. The Orogen Facility must be repaid in full on March 3, 2009 by wayof a bullet payment.

***Arctic Platinum Project***

On October 18, 2005, Gold Fields announced that ithad entered into a letter of intent with North American Palladium Limited, orNAP, a Canadian platinum metals group producer, to form a joint venture tofurther explore mining properties and develop a mine at the APP.

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On March 24, 2006, an Acquisition and FrameworkAgreement, or Acquisition Agreement, was entered into between NAP, Gold FieldsExploration BV, Gold Fields Finland Oy and North American Palladium Finland Oy.The Acquisition Agreement took effect from April 13, 2006 and, inaccordance with the terms and conditions of the Acquisition Agreement, aService Agreement was also entered into between Gold Fields Arctic Platinum Oy,NAP and North American Palladium Arctic Services Oy on March 24, 2006,pursuant to which NAP will provide services to the APP.

The Acquisition Agreement provides that NAP will begranted an option to acquire up to a 60% undivided interest in the APP,including the Suhanko, SJ Reef and SK Reef mining properties and claims locatedsouth of Rovaniemi, Finland. NAP’s option to acquire its interest in the APPwill vest upon NAP satisfying the following conditions on or before June 30,2008: (i) completing a $7.5 million re-scoping study and explorationprogram; (ii) completing a $5.0 million feasibility study; and (iii) makinga decision to develop a mine at the APP. In consideration for the acquisitionof the 60% interest in the APP, NAP shall issue NAP common shares to GoldFields with a value of approximately $45 million, based on the weighted averagetrading price on the American Stock Exchange for the 11 trading days commencingon October 11, 2005. The relevant share price was $4.88, meaning that NAPwill issue 9,227,033 NAP common shares. Additionally, Gold Fields has an optionto maintain its interest at 50%, by taking receipt of only 80% of theconsideration shares, or 7,381,626 NAP common shares. During the option periodNAP is the operator with the responsibility to manage and fund the project.

Upon NAP’s acquisition of an interest in the APP, a jointventure will be formed with NAP holding a 60% interest and Gold Fields holdinga 40% interest. The parties will enter into a Shareholders’ Agreement whichwill govern their respective interests in the APP. Gold Fields will have aback-in right to acquire an additional 10% interest in the joint venture, to bepaid for by reducing the number of NAP common shares issued to Gold Fields by20%. NAP will remain operator of the joint venture, which will be managed undera joint venture arrangement.

See “Information on theCompany—Exploration—Gold Fields’ Exploration Projects—Arctic Platinum Project.”

***Barrick Agreement***

On September 11, 2006, Gold Fields entered intoan agreement with Barrick Gold Corporation, or Barrick, to acquire, for a totalconsideration of US$1.525 billion, the entire issued share capital of BarrickGold South Africa (Proprietary) Limited, or BGSA, which holds a 50% interest inthe Barrick Gold—Western Areas Joint Venture, an unincorporated entity in whichBarrick and Western Areas Limited, or Western Areas, each hold an interest of50%.

See “Information on theCompany—Recent Developments—Acquisition of South Deep” and “Operating andFinancial Review and Prospects—Recent Developments—Acquisition of South Deep.”

***JCI Agreement***

In support of Gold Fields undertaking to make an offerto acquire the entire issued share capital of Western Areas not already ownedby Gold Fields, Gold Fields, JCI Limited, or JCI, and certain subsidiaries ofJCI entered into an agreement on September 11, 2006, pursuant to whichGold Fields will acquire 27 million Western Areas shares, which will increasethe Gold Fields’ stake in Western Areas from 18% to 34.7%. In addition, the JCIsubsidiaries have granted Gold Fields a call option and the JCI subsidiarieshave been granted a put option, subject to certain restrictions and conditions,in respect of the balance of a further 9.96 million Western Areas shares heldby JCI or its subsidiaries.

See “Information on theCompany—Recent Developments—Acquisition of South Deep” and “Operating andFinancial Review and Prospects—Recent Developments—Acquisition of South Deep.”

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***Cerro Corona Facility***

On November 14, 2006, Gold Fields La Cima S.A.(formerly known as Sociedad Minera La Cima S.A.), or La Cima, entered into aUS$150 million project finance facility agreement with The Royal Bank ofScotland plc, Citigroup Global Markets Inc., The Bank of Nova Scotia, The Bankof Nova Scotia Trust Company of New York, Scotiabank Peru S.A.A and otherfinancial institutions, as set out in the agreement.

See “Information on theCompany—Recent Developments—Cerro Corona Project” and “Operating and FinancialReview and Prospects—Recent Developments—Cerro Corona Facility.”

***GFIMSA Facility***

In connection with the acquisition of BGSA and theproposed acquisition of Western Areas, GFIMSA entered into a US$1.8 billioncredit facility with Citibank, N.A. London Branch, J.P. Morgan Plc,J.P. Morgan Europe Limited and other financial institutions as set out inthe agreement, on November 24, 2006. Borrowings under the facility areguaranteed by Gold Fields, Gold Fields Holdings and Orogen.

See “Information on theCompany—Recent Developments—Acquisition of South Deep” and “Operating andFinancial Review and Prospects—Recent Developments—Acquisition of South Deep.”

***Management and Other Compensatory Plans andArrangements***

Gold Fields’ share plan, the Gold Fields Limited 2005Share Plan, was approved by the shareholders on November 17, 2005 and isavailable to its executive officers and other employees. See “Directors, SeniorManagement and Employees—The Gold Fields Limited 2005 Share Plan.”

Gold Fields shareholders also approved on November 17,2005 a new share plan available to its non-executive directors. See “Directors,Senior Management and Employees—The Gold Fields Limited 2005 Non-ExecutiveShare Plan.”

Gold Fields’ share option scheme, the GF ManagementIncentive Scheme, was adopted on November 10, 1999 and is available to itsexecutive officers and other employees. See “Directors, Senior Management andEmployees—The GF Management Incentive Scheme.”

Gold Fields also has a share option plan available toits non-executive directors. See “Directors, Senior Management and Employees—TheGF Non-Executive Director Share Plan.”

Ian D. Cockerill, Gold Fields’ Chief Executive Officerand an executive director of Gold Fields, is party to two employmentagreements: one with Gold Fields Guernsey, which is now named Gold FieldsHoldings Company (BVI) Limited, following its change of incorporation to theBritish Virgin Islands, and the other with GFL Mining Services Ltd., or GFLMSL.See “Directors, Senior Management and Employees—Executive Directors’ Terms ofEmployment.”

Nicholas J. Holland, GoldFields’ Chief Financial Officer and an executive director of Gold Fields, isparty to two employment agreements: one with Gold Fields Guernsey, which is nownamed Gold Fields Holdings Company (BVI) Limited, following its change ofincorporation to the British Virgin Islands, and the other with GFLMSL. See “Directors,Senior Management and Employees—Executive Directors’ Terms of Employment.”

**Deposit Agreement**

Gold Fields has an American Depositary Receiptfacility. In connection with this facility, Gold Fields is party to a DepositAgreement, dated as of February 2, 1998, as amended and restated as of May 21,2002 

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among Gold Fields, The Bank of New York, asDepositary, and all owners and holders from time to time of American DepositaryReceipts issued thereunder.

This summary is subject toand qualified in its entirety by reference to the Deposit Agreement, includingthe form of ADRs attached thereto. Terms used in this section and not otherwisedefined will have the meanings set forth in the Deposit Agreement. Copies ofthe Deposit Agreement are available for inspection at the Corporate TrustOffice of the Depositary, located at 101 Barclay Street, New York, New York10286. The Depositary’s principal executive office is located at One WallStreet, New York, New York 10286.

**American DepositaryReceipts**

Each Gold Fields ADS represents ownership interests inone Gold Fields ordinary share and the rights attributable to one Gold Fieldsordinary share that Gold Fields will deposit with one of the custodians, whichcurrently are Standard Bank of South Africa, ABSA Bank Limited, French Bank ofSouth Africa, First National Bank of South Africa and Nedcor Bank Limited. EachGold Fields ADR also represents securities, cash or other property depositedwith The Bank of New York but not distributed to holders of Gold Fields ADRs.

As The Bank of New York will actually be the holder ofthe underlying ordinary shares, Gold Fields will not treat you as one of itsshareholders. As a holder of ADSs, you will have ADR holder rights. A DepositAgreement among Gold Fields, The Bank of New York and you, as a Gold Fields ADRholder, sets out the ADR holders’ rights and obligations of The Bank of NewYork, as depositary. New York state law governs the Deposit Agreement and theADRs evidencing the Gold Fields ADSs.

You may hold ADRs eitherdirectly or indirectly through your broker or financial institution. If youhold ADRs directly, you are an ADR holder. This description assumes you holdyour ADRs directly. If you hold the ADRs indirectly, you must rely on theprocedures of your broker or financial institution to assert the rights of ADRholders described in this section. You should consult with your broker orfinancial institution to find out what those procedures are.

***Share Dividends and Other Distributions***

*How will youreceive dividends and other distributions on the ordinary shares?*

The Bank of New York willpay to you the cash dividends or other distributions it or the custodianreceives on the ordinary shares or other deposited securities, after deductingits fees and expenses. You will receive these distributions in proportion tothe number of ordinary shares your Gold Fields ADSs represent.

**Cash:**

The Bank of New York will convert any cash dividend ordistribution Gold Fields pays on the ordinary shares, other than any dividendor distribution paid in U.S. dollars, into U.S. dollars. If that is notpossible on a reasonable basis, or if any approval from any government isneeded and cannot be obtained, the Deposit Agreement allows The Bank of NewYork to distribute the foreign currency only to those ADS holders to whom it ispossible to do so or to hold the foreign currency it cannot convert for theaccount of the ADS holders who have not been paid. It will not invest theforeign currency and it will not be liable for any interest.

Before making adistribution, The Bank of New York will deduct any withholding taxes that mustbe paid under applicable laws. It will distribute only whole U.S. dollars andU.S. cents and will round any fractional amounts to the nearest whole cent. Ifthe exchange rates fluctuate during a time when The Bank of New Yorkcannot convert the foreign currency, you may lose some or all of the value ofthe distribution.

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**Ordinary shares:**

The Bank of New York willdistribute new ADRs representing any ordinary shares Gold Fields distributes asa dividend or free distribution, if Gold Fields requests that The Bank of NewYork make this distribution and if Gold Fields furnishes The Bank of New Yorkpromptly with satisfactory evidence that it is legal to do so. The Bank of NewYork will only distribute whole ADRs. It will sell ordinary shares which wouldrequire it to issue a fractional ADS and distribute the net proceeds to theholders entitled to those ordinary shares. If The Bank of New York does notdistribute additional cash or ADSs, each ADS will also represent the newordinary shares.

Right to purchase additional ordinary shares:

If Gold Fields offers holders of securities anyrights, including rights to subscribe for additional ordinary shares, The Bankof New York may take actions necessary to make these rights available to you.Gold Fields must first instruct The Bank of New York to do so and furnish itwith satisfactory evidence that it is legal to do so. If Gold Fields does notfurnish this evidence and/or give these instructions, and The Bank of New Yorkdetermines that it is practical to sell the rights, The Bank of New York maysell the rights and allocate the net proceeds to holders’ accounts. The Bank ofNew York may allow rights that are not distributed or sold to lapse. In thatcase, you will receive no value for them.

If The Bank of New Yorkmakes rights available to you, upon instruction from you it will exercise therights and purchase the ordinary shares on your behalf. The Bank of New Yorkwill then deposit the ordinary shares and deliver ADSs to you. It will onlyexercise rights if you pay The Bank of New York the exercise price and anycharges the rights require you to pay. U.S. securities laws may restrict thesale, deposit, cancellation and transfer of the ADSs issued after exercise ofrights. In this case, The Bank of New York may deliver the ADSs under aseparate restricted deposit agreement, which will contain the same provisionsas the Deposit Agreement, except for changes needed to put the restrictions inplace. The Bank of New York will not offer you rights unless those rights andthe securities to which the rights relate are either exempt from registrationor have been registered under the Securities Act of 1933 with respect to adistribution to you.

**Other distributions:**

The Bank of New York will send to you anything elseGold Fields distributes on deposited securities by any means The Bank of NewYork thinks is legal, fair and practical. If it cannot make the distribution inthat way, The Bank of New York may decide to sell what Gold Fields distributed—forexample by public or private sale—and distribute the net proceeds, in the sameway as it does with cash, or it may decide to hold what Gold Fieldsdistributed, in which case the ADRs will also represent the newly distributedproperty.

The Bank of New York isnot responsible if it decides that it is unlawful or impractical to make adistribution available to any ADR holder. Gold Fields will have no obligationto take any other action to permit the distribution of ADSs, ordinary shares,rights or anything else to ADS holders. This means that you may not receive thedistribution Gold Fields makes on its ordinary shares or any value for them ifit is illegal or impractical for Gold Fields to make them available to you.

***Deposit, Withdrawal and Cancellation***

*How does theDepositary issue ADSs?*

The Bank of New York willdeliver the ADSs that you are entitled to receive in the offer against depositof the underlying ordinary shares. The Bank of New York will deliver additionalADSs if you or your broker deposit ordinary shares with the custodian. You mustalso deliver evidence satisfactory to The Bank of New York of any necessaryapprovals of the governmental agency in South Africa, if any, which is 

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responsible for regulatingcurrency exchange at that time. If required by The Bank of New York, you mustin addition deliver an agreement transferring your rights as a shareholder toreceive dividends or other property. Upon payment of its fees and of any taxesor charges, The Bank of New York will register the appropriate number of ADSsin the names you request and will deliver the ADRs at its Corporate TrustOffice to the persons you request.

*How do ADS holderscancel an ADS and obtain ordinary shares?*

You may submit a writtenrequest to withdraw ordinary shares and turn in your ADRs evidencing your ADSsat the Corporate Trust Office of The Bank of New York. Upon payment of its feesand of any taxes or charges, such as stamp taxes or stock transfer taxes, TheBank of New York will deliver the deposited securities underlying the ADSs toan account designated by you at the office of the custodian. At your request,risk and expense, The Bank of New York may deliver at its Corporate TrustOffice any dividends or distributions with respect to the deposited securitiesrepresented by the ADSs, or any proceeds from the sale of any dividends,distributions or rights, which may be held by The Bank of New York.

***Record Dates***

Whenever any distributionof cash or rights, change in the number of ordinary shares represented by ADSsor notice of a meeting of holders of ordinary shares or ADSs is made, The Bankof New York will fix a record date for the determination of the owners entitledto receive the benefits, rights or notice.

***Voting of Deposited Securities***

*How do you vote?*

If you are an ADS holder on a record date fixed by TheBank of New York, you may exercise the voting rights of the same class ofsecurities as the ordinary shares represented by your ADSs, but only if GoldFields asks The Bank of New York to ask for your instructions. Otherwise, youwill not be able to exercise your right to vote unless you withdraw theordinary shares.

However, you may not know about the meeting enough inadvance to withdraw the ordinary shares. If Gold Fields asks for yourinstructions, The Bank of New York will notify you of the upcoming meeting andarrange to deliver certain materials to you. The materials will: (1) includeall information included with the meeting notice sent by Gold Fields to TheBank of New York, (2) explain how you may instruct The Bank of New York tovote the ordinary shares or other deposited securities underlying your ADSs asyou direct if you vote by mail or by proxy and (3) include a votinginstruction card and any other information required under South African lawthat Gold Fields and The Bank of New York will prepare. For instructions to bevalid, The Bank of New York must receive them on or before the date specifiedin the instructions. The Bank of New York will try, to the extent practical,subject to applicable law and the provisions of the by-laws of Gold Fields, tovote or have its agents vote the underlying shares as you instruct. The Bank ofNew York will only vote, or attempt to vote, as you instruct. However, ifThe Bank of New York does not receive your voting instructions, it will give aproxy to vote your ordinary shares to a designated representative of GoldFields, unless Gold Fields informs The Bank of New York that either: (1) itdoes not want the proxy issued, (2) substantial opposition exists or (3) thematter materially and adversely affects the rights of holders of ordinaryshares.

Gold Fields cannot assurethat you will receive the voting materials in time to ensure that you caninstruct The Bank of New York to vote your ordinary shares. In addition, TheBank of New York and its agents are not responsible for failing to carry outvoting instructions or for the manner of carrying out voting instructions. Thismeans that you may not be able to exercise your right to vote and there may benothing you can do if your ordinary shares are not voted as you requested.

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***Inspection of Transfer Books***

The Bank of New York willkeep books for the registration and transfer of ADRs. These books will be openat all reasonable times for inspection by you, provided that you are inspectingthe books for a purpose related to Gold Fields or the Deposit Agreement or theADRs.

***Reports and Other Communications***

The Bank of New York willmake available for your inspection at its Corporate Trust Office any reports orcommunications, including any proxy material, received from Gold Fields, aslong as these materials are received by The Bank of New York as the holder ofthe deposited securities and generally available to Gold Fields shareholders.At Gold Fields’ written request, The Bank of New York will also send copies ofreports, notices and communications to you.

***Fees and Expenses***

TheBank of New York, as Depositary, will charge any party depositing orwithdrawing ordinary shares or any party surrendering ADRs or to whom ADRs areissued:

| **For:**                                                                                                                                                                                                      | ** ** | ** **                                                                                                                                                                                                              | ** ** | **Gold Fields ADS holders must pay:** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------|
| ·  each issuance of a Gold Fields ADS,  including as a result of a distribution of ordinary shares or rights or other  property or upon exercise of a warrant to purchase an ADS                    |       | ·  $5.00 or less per 100 Gold Fields ADSs or  portion thereof                                                                                                                                                 |
| ·  each distribution of securities distributed  to holders of Gold Fields’ ordinary shares which are distributed by The Bank  of New York to Gold Fields’ ADR holders                     |       | ·  any fees that would be payable if the  securities had been ordinary shares and those ordinary shares had been  deposited for the issuance of ADSs                                                          |
| ·  each cancellation of a Gold Fields ADS,  including if the Deposit Agreement terminates                                                                                                           |       | ·  $5.00 or less per 100 Gold Fields ADSs or  portion thereof                                                                                                                                                 |
| ·  each cash distribution pursuant to the  Deposit Agreement                                                                                                                                        |       | ·  not more than $0.02 per ADS (or portion  thereof)                                                                                                                                                          |
| ·  annual depositary services                                                                                                                                                                       |       | ·  not more than $0.02 per ADS (or portion  thereof) paid annually, provided that this fee will not be charged if the  $0.02 fee for cash distributions described above was charged during the  calendar year |
| ·  transfer and registration of ordinary shares  on the Gold Fields’ share register from your name to the name The Bank of New  York or its agent when you deposit or withdraw ordinary shares |       | ·  registration or transfer fees                                                                                                                                                                              |
| ·  conversion of foreign currency to U.S.  dollars                                                                                                                                                  |       | ·  expenses of The Bank of New York                                                                                                                                                                           |
| ·  cable, telex and facsimile transmission  expenses, if expressly provided in the Deposit Agreement                                                                                                |       | ·  expenses of The Bank of New York                                                                                                                                                                           |
| ·  as necessary                                                                                                                                                                                     |       | ·  certain taxes and governmental charges The  Bank of New York or the custodian has to pay on any Gold Fields ADS or  ordinary share underlying a Gold Fields ADS                                            |

 

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***Payment of Taxes***

You will be responsiblefor any taxes or other governmental charges payable on your ADRs or on thedeposited securities underlying your ADRs. The Bank of New York may deduct theamount of any taxes owed from any payments to you. It may also restrict orrefuse the transfer of your Gold Fields ADSs or restrict or refuse thewithdrawal of your underlying deposited securities until you pay any taxes owedon your Gold Fields ADSs or underlying securities. It may also sell depositedsecurities to pay any taxes owed. You will remain liable if the proceeds of thesale are not enough to pay the taxes. If The Bank of New York sellsdeposited securities, it will, if appropriate, reduce the number of Gold FieldsADSs held by you to reflect the sale and pay to you any proceeds, or send toyou any property, remaining after it has paid the taxes.

***Reclassifications, Recapitalizations and Mergers***

If Gold Fields:

·       changesthe par value of any of the Gold Fields ordinary shares;

·       reclassifies,splits or consolidates any of the Gold Fields ordinary shares;

·       distributessecurities on any of the Gold Fields ordinary shares that are not distributedto you; or

·       recapitalizes,reorganizes, merges, consolidates, sells its assets, or takes any similaraction, then:

the cash, ordinary sharesor other securities received by The Bank of New York will become new depositedsecurities under the Deposit Agreement, and each Gold Fields ADS willautomatically represent the right to receive a proportional interest in the newdeposited securities; and The Bank of New York may and will, if Gold Fieldsasks it to, distribute some or all of the cash, ordinary shares or othersecurities it received. It may also issue new Gold Fields ADSs or ask you tosurrender your outstanding Gold Fields ADSs in exchange for new Gold FieldsADSs identifying the new deposited securities.

***Amendment and Termination of the Deposit Agreement***

*How may the DepositAgreement be amended?*

Gold Fields may agree withThe Bank of New York to amend the Deposit Agreement and the Gold Fields ADRswithout your consent for any reason. If the amendment adds or increases fees orcharges, except for taxes and governmental charges, or prejudices an importantright of Gold Fields ADS holders, it will only become effective 30 days afterThe Bank of New York notifies you of the amendment. At the time an amendmentbecomes effective, you are considered, by continuing to hold your ADSs, toagree to the amendment and to be bound by the agreement as amended. However, noamendment will impair your right to receive the deposited securities inexchange for your Gold Fields ADSs.

*How may the DepositAgreement be terminated?*

The Bank of New York will terminate the DepositAgreement if Gold Fields asks it to do so, in which case it must notify you atleast 30 days before termination. The Bank of New York may also terminate theagreement after notifying you if The Bank of New York informs Gold Fields thatit would like to resign and Gold Fields does not appoint a new depositary bankwithin 90 days.

If any Gold FieldsADSs remain outstanding after termination, The Bank of New York will stopregistering the transfer of Gold Fields ADSs, will stop distributing dividendsto Gold Fields ADS holders, and will not give any further notices or do anythingelse under the Deposit Agreement other than:

·       collectdividends and distributions on the deposited securities;

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·       sellrights and other property offered to holders of deposited securities; and

·       deliverordinary shares and other deposited securities upon cancellation of Gold FieldsADSs.

At any time after one yearafter termination of the Deposit Agreement, The Bank of New York may sell anyremaining deposited securities by public or private sale. After that, The Bankof New York will hold the money it received on the sale, as well as any cash itis holding under the Deposit Agreement, for the pro rata benefit of the GoldFields ADS holders that have not surrendered their Gold Fields ADSs. It willnot invest the money and has no liability for interest. The Bank of New York’sonly obligations will be to account for the money and cash. After termination,Gold Fields’ only obligations will be with respect to indemnification of, andto pay specified amounts to, The Bank of New York.

***Your Right to Receive the Ordinary Shares UnderlyingYour Gold Fields ADSs***

You have the rightto cancel your Gold Fields ADSs and withdraw the underlying ordinary shares atany time except:

·       dueto temporary delays caused by The Bank of New York or Gold Fields closing itstransfer books, the transfer of ordinary shares being blocked in connectionwith voting at a shareholders’ meeting, or Gold Fields paying dividends;

·       whenyou or other ADR holders seeking to withdraw ordinary shares owe money to payfees, taxes and similar charges; or

·       whenit is necessary to prohibit withdrawals in order to comply with any laws orgovernmental regulations that apply to Gold Fields ADSs or to the withdrawal ofordinary shares or other deposited securities.

This right of withdrawalmay not be limited by any provision of the Deposit Agreement.

***Limitations on Obligations and Liability to GoldFields ADS Holders***

The DepositAgreement expressly limits the obligations of Gold Fields and The Bank of NewYork. It also limits the liability of Gold Fields and The Bank of New York. GoldFields and The Bank of New York:

·       areonly obligated to take the actions specifically set forth in the DepositAgreement without negligence or bad faith;

·       arenot liable if either of them is prevented or delayed by law, any provision ofthe Gold Fields by-laws or circumstances beyond their control, from performingtheir obligations under the agreement;

·       arenot liable if either of them exercises, or fails to exercise, discretionpermitted under the agreement;

·       haveno obligation to become involved in a lawsuit or proceeding related to the ADSsor the Deposit Agreement on your behalf or on behalf of any other party unlessthey are indemnified to their satisfaction; and

·       mayrely upon any advice of or information from any legal counsel, accountants, anyperson depositing ordinary shares, any Gold Fields ADS holder or any otherperson whom they believe in good faith is competent to give them that advice orinformation.

In the Deposit Agreement,Gold Fields and The Bank of New York agree to indemnify each other underspecified circumstances.

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***Requirements for Depositary Actions***

Before The Bank ofNew York will deliver or register the transfer of a Gold Fields ADS, make adistribution on a Gold Fields ADS, or permit withdrawal of ordinary shares, TheBank of New York may require:

·       paymentof taxes, including stock transfer taxes or other governmental charges, andtransfer or registration fees charged by third parties for the transfer of anyordinary shares or other deposited securities, as well as the fees and expensesof The Bank of New York;

·       productionof satisfactory proof of the identity of the person presenting ordinary sharesfor deposit or Gold Fields ADSs upon withdrawal, and of the genuineness of anysignature; and

·       compliancewith regulations The Bank of New York may establish consistent with the DepositAgreement, including presentation of transfer documents.

The Bank of New York mayrefuse to deliver, transfer, or register transfer of Gold Fields ADSs generallywhen the transfer books of The Bank of New York are closed or at any time ifThe Bank of New York or Gold Fields thinks it advisable to do so.

***Pre-Release of Gold Fields ADSs***

In certaincircumstances, subject to the provisions of the Deposit Agreement, The Bank ofNew York may deliver Gold Fields ADSs before deposit of the underlying ordinaryshares. This is called a pre-release of Gold Fields ADSs. The Bank of New Yorkmay also deliver ordinary shares prior to the receipt and cancellation ofpre-released Gold Fields ADSs (even if those Gold Fields ADSs are cancelledbefore the pre-release transaction has been closed out). A pre-release isclosed out as soon as the underlying ordinary shares are delivered to The Bankof New York. The Bank of New York may receive Gold Fields ADSs instead of theordinary shares to close out a pre-release. The Bank of New York maypre-release Gold Fields ADSs only under the following conditions:

·       beforeor at the time of the pre-release, the person to whom the pre-release is being mademust represent to The Bank of New York in writing that it or its customer, asthe case may be, owns the ordinary shares or Gold Fields ADSs to be deposited;

·       thepre-release must be fully collateralized with cash or collateral that The Bankof New York considers appropriate; and

·       TheBank of New York must be able to close out the pre-release on not more thanfive business days’ notice.

The pre-release will besubject to whatever indemnities and credit regulations The Bank of New Yorkconsiders appropriate. In addition, The Bank of New York will limit the numberof Gold Fields ADSs that may be outstanding at any time as a result ofpre-release.

***Governing Law***

The Deposit Agreement isgoverned by the law of the State of New York.

**South AfricanExchange Control Limitations Affecting Security Holders**

*The discussionbelow relates to exchange controls in force as of the date of this annualreport. These controls are subject to change at any time without notice. It isnot possible to predict whether existing exchange controls will be abolished,continued or amended by the South African government in the future. Investorsare urged to consult a professional adviser as to the exchange controlimplications of their particular investments.*

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Acquisitions of shares or assets of South Africancompanies by non-South African purchasers solely for cash consideration willgenerally be permitted by the SARB pursuant to South African exchange controlregulations. An acquisition of shares or assets of a South African company by anon-South African purchaser may be refused by SARB in other circumstances, suchas if the consideration for the acquisition is shares in a non-South Africancompany or if the acquisition is financed by a loan from a South Africanlender. Denial of SARB approval for an acquisition of shares or assets of aSouth African company may result in the transaction not being completed.Subject to this limitation, there are no restrictions on equity investments inSouth African companies and a foreign investor may invest freely in theordinary shares and ADSs of Gold Fields.

There are no exchange control restrictions on theremittance in full of dividends declared out of trading profits tonon-residents of the Common Monetary Area (comprising South Africa, the Kingdomsof Lesotho and Swaziland and the Republic of Namibia) by Gold Fields.

Under South Africanexchange control regulations, the ordinary shares and ADSs of Gold Fields arefreely transferable outside South Africa between persons who are not residentsof the Common Monetary Area. Additionally, where ordinary shares are sold onthe JSE on behalf of shareholders of Gold Fields who are not residents of theCommon Monetary Area, the proceeds of such sales will be freely exchangeableinto foreign currency and remittable to them. Any share certificates held bynon-resident Gold Fields shareholders will be endorsed with the words “non-resident.”The same endorsement, however, will not be applicable to ADSs of Gold Fieldsheld by non-resident shareholders.

**Taxation**

***Certain South African Tax Considerations***

The discussion in this section sets forth the materialSouth African tax consequences of the purchase, ownership and disposition ofGold Fields’ ordinary shares or ADSs under current South African law. Changesin the law may alter the tax treatment of Gold Fields’ ordinary shares or ADSs,possibly on a retroactive basis.

The following summary isnot a comprehensive description of all of the tax considerations that may berelevant to a decision to purchase, own or dispose of Gold Fields’ ordinaryshares or ADSs and does not cover tax consequences that depend upon yourparticular tax circumstances. In particular, the following summary addressestax consequences for holders of ordinary shares or ADSs who are not residentsof, or who do not carry on business in, South Africa and who hold ordinaryshares or ADSs as capital assets (that is, for investment purposes). For thepurposes of the income tax treaty between South Africa and the United States,and South African tax law, a United States resident that owns Gold Fields ADSswill be treated as the owner of the Gold Fields ordinary shares represented bysuch ADSs. Gold Fields recommends that you consult your own tax adviser aboutthe consequences of holding Gold Fields’ ordinary shares or ADSs, asapplicable, in your particular situation.

*Withholding tax ondividends*

Under South African law,no withholding tax applies to, and no other tax is payable by, shareholders orADS holders on dividends paid to non-resident shareholders or non-resident ADSholders. It should be noted that any future decision to re-impose a withholdingtax on dividends declared by South African resident companies to non-residentshareholders or non-resident ADS holders is generally permissible under theterms of a reciprocal tax treaty entered into between South Africa and theUnited States, or the Treaty; provided that the Treaty generally limits thewithholding tax to 5% of the gross amount of the dividends if the beneficialowner of the shares is a company holding directly at least 10% of the votingstock of the company paying the dividends and to 15% of the gross amount of thedividends in all other cases. South Africa imposes a corporate tax known as asecondary tax on companies, or STC, at a rate of 

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12.5% on the distributionof earnings in the form of dividends on the company declaring the dividend. STCis a recognized form of tax in terms of the double taxation convention betweenSouth Africa and the United States, but does not constitute a withholding taxon dividends.

*Income tax andcapital gains tax*

Non-resident holders ofordinary shares or ADSs will not be subject to income or capital gains tax inSouth Africa, with respect to the disposal of those ordinary shares or ADSs,unless the non-resident carried on business through a permanent establishmentin South Africa, and the profits are realized in the ordinary course of thatbusiness.

*Stamp duty anduncertificated securities tax*

No stamp duty or uncertificated securities tax ispayable in South Africa by the company in respect of the issue of certificatedor dematerialized shares.

On a subsequent registration of transfer of shares,stamp duty is generally payable for off-market transactions (that is, sharesnot sold through the JSE) and uncertificated securities tax, or UST, isgenerally payable for on-market transactions (that is, shares soldthrough the JSE in a dematerialized form), each at 0.25% of the market value ofthe shares concerned. Stamp duty is payable in South Africa regardless of whetherthe transfer is executed within or outside South Africa. A transfer of adematerialized share can only occur in South Africa.

There are certainexceptions to the payment of stamp duty where, for example, the instrument oftransfer is executed outside South Africa and registration of transfer iseffected in any branch register kept by the relevant company, subject tocertain provisions set forth in the South African Stamp Duties Act of 1968.Although technically under the terms of current legislation it could beinterpreted that transfers of ADSs between non-residents of South Africa couldattract either stamp duty or UST, such transfers have not to date attractedeither stamp duty or UST. However, if securities are withdrawn from the depositfacility or the relevant deposit agreement is terminated, either stamp duty orUST will be payable on the subsequent transfer of the shares. An acquisition ofshares from the depositary in exchange for ADSs representing the relevantunderlying securities will also render an investor liable to pay South Africanstamp duty or UST in South Africa at the same rate as stamp duty or UST on asubsequent transfer of shares, upon the registration of the investor as theholder of the applicable shares on the company’s register.

***U.S. Federal Income Tax Considerations***

TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR230, HOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAXISSUES IN THIS DOCUMENT IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, ANDCANNOT BE RELIED UPON, BY HOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BEIMPOSED ON HOLDERS UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION ISINCLUDED HEREIN BY GOLD FIELDS IN CONNECTION WITH THE PROMOTION OR MARKETING(WITHIN THE MEANING OF CIRCULAR 230) BY GOLD FIELDS OF THE TRANSACTIONS ORMATTERS ADDRESSED HEREIN; AND (C) HOLDERS SHOULD SEEK ADVICE BASED ONTHEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISER.

The followingdiscussion summarizes the material U.S. federal income tax consequences of theacquisition, ownership and disposition of ordinary shares and ADSs. Thissummary applies to you only if you are a beneficial owner of ordinary shares orADSs and you are, for U.S. federal income tax purposes:

·       acitizen or resident of the United States;

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·       acorporation created or organized under the laws of the United States or anyState within the United States; or

·       otherwisesubject to U.S. federal income tax on a net income basis in respect of theordinary shares or ADSs.

The U.S. federal income tax treatment of a partner ina partnership that holds ordinary shares or ADSs will depend upon the status ofthe partner and the activities of the partnership. If you are a partnership,you should consult your tax adviser concerning the U.S. federal income taxconsequences to your partners of the acquisition, ownership and disposition ofordinary shares or ADSs by you.

This summary onlyapplies to holders that hold ordinary shares or ADSs as capital assets. Thissummary is based upon:

·       thecurrent tax laws of the United States, including the Internal Revenue Code of1986;

·       currentU.S. Internal Revenue Service practice and applicable U.S. court decisions; and

·       theincome tax treaty between the United States and South Africa.

This summary assumes that the obligations of theDepositary under the Deposit Agreement and any related agreements will beperformed in accordance with their terms.

The followingsummary is of a general nature and does not address all U.S. federal income taxconsequences that may be relevant to you in light of your particular situation.For example, this summary does not apply to:

·       investorsthat own (directly or indirectly) 10% or more of Gold Fields’ voting stock;

·       financialinstitutions;

·       insurancecompanies;

·       investorsliable for the alternative minimum tax;

·       individualretirement accounts and other tax-deferred accounts;

·       tax-exemptorganizations;

·       dealersin securities or currencies;

·       investorsthat hold ordinary shares or ADSs as part of straddles, hedging transactions orconversion transactions for U.S. federal income tax purposes; or

·       investorswhose functional currency is not the U.S. dollar.

This summary assumes that Gold Fields is not, and willnot become, a passive foreign investment company, or PFIC, for U.S. federalincome tax purposes, which it believes to be the case. Gold Fields’ possiblestatus as a PFIC must be determined annually and therefore may be subject tochange. However, based on Gold Fields’ current assets and income, and assumingthat Gold Fields will continue to operate its business in the same manner as ithas in the past, management believes that there is no material risk that GoldFields will become a PFIC in the future. If Gold Fields were to be a PFIC inany year in which you held Gold Fields’ ordinary shares or ADSs, materiallyadverse consequences would result for you.

**The summary of U.S. federal income tax consequencesset out below is for general information only. You are urged to consult yourtax advisers as to the particular tax consequences to you of acquiring, owningand disposing of the ordinary shares or ADSs, including the applicability andeffect of state, local, foreign and other tax laws and possible changes in taxlaw.**

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*U.S. Holders ofADSs*

For U.S. federal incometax purposes, an owner of ADSs will be treated as the owner of thecorresponding number of underlying ordinary shares held by the depositary forthe ADSs, and references to ordinary shares in the following discussion referalso to ADSs representing the ordinary shares.

*Taxation ofDividends*

Distributions paid out of Gold Fields’ current oraccumulated earnings and profits (as determined for U.S. federal income taxpurposes) will generally be taxable to you as foreign source dividend income,and will not be eligible for the dividends received deduction allowed tocorporations. Distributions that exceed Gold Fields’ current and accumulatedearnings and profits will be treated as a non-taxable return of capital to theextent of your basis in the ordinary shares and thereafter as capital gain.However, we do not maintain calculations of our earnings and profits inaccordance with U.S. federal income tax accounting principles. You shouldtherefore assume that any distribution by us with respect to the shares willconstitute ordinary dividend income. You should consult your own tax adviserswith respect to the appropriate U.S. federal income tax treatment of anydistribution received from us. For purposes of determining limitations on anyforeign tax credits, dividends paid by Gold Fields will generally constitute “passiveincome.”

For taxable years that begin before 2011, dividendspaid by Gold Fields will be taxable to shareholders that are individuals at thespecial reduced rate normally applicable to capital gains, provided that eitherGold Fields qualifies for the benefits of the income tax treaty between theUnited States and South Africa, or the ADSs are considered to be “readilytradable” on the NYSE. You will be eligible for this reduced rate only if youare an individual, and have held the ordinary shares for more than 60 daysduring the 121-day period beginning 60 days before the ex-dividend date.

For U.S. federal incometax purposes, the amount of any dividend paid in Rand will be included inincome in a U.S. dollar amount calculated by reference to the exchange rate ineffect on the date the dividends are received by you or the depositary (in thecase of ADSs). If you or the depositary, as the case may be, convert dividendsreceived in Rand into U.S. dollars on the day they are received, you generallywill not be required to recognize foreign currency gain or loss in respect ofthis dividend income.

*Taxation of a Saleor other Disposition*

Your tax basis in an ordinary share will generally beits U.S. dollar cost. The U.S. dollar cost of an ordinary share purchased withforeign currency will generally be the U.S. dollar value of the purchase priceon the date of purchase or, in the case of ordinary shares traded on anestablished securities market, as defined in the applicable TreasuryRegulations, that are purchased by a cash basis taxpayer (or an accrual basistaxpayer that so elects), on the settlement date for the purchase. Such anelection by an accrual basis taxpayer must be applied consistently from year toyear and cannot be revoked without the consent of the IRS.

Upon a sale or other disposition of ordinary shares orADSs, other than an exchange of ADSs for ordinary shares and vice versa, youwill generally recognize capital gain or loss for U.S. federal income tax purposesequal to the difference between the amount realized and your adjusted tax basisin the ordinary shares or ADSs. This capital gain or loss will be long-termcapital gain or loss if your holding period in the ordinary shares or ADSsexceeds one year. However, regardless of your actual holding period, any lossmay be treated as long-term capital loss to the extent you receive a dividendthat qualifies for the reduced rate described above under “Taxation ofDividends” and also exceeds 10% of your basis in the ordinary shares. Any gainor loss will generally be U.S. source.

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The amount realized on a sale or other disposition ofordinary shares for an amount in foreign currency will be the U.S. dollar valueof this amount on the date of sale or disposition. On the settlement date, youwill recognize U.S. source foreign currency gain or loss (taxable as ordinaryincome or loss) equal to the difference (if any) between the U.S. dollar valueof the amount received based on the exchange rates in effect on the date ofsale or other disposition and the settlement date. However, in the case ofordinary shares traded on an established securities market that are sold by acash basis taxpayer (or an accrual basis taxpayer that so elects), the amountrealized will be based on the exchange rate in effect on the settlement datefor the sale, and no exchange gain or loss will be recognized at that time.

Foreign currency received on the sale or otherdisposition of an ordinary share will have a tax basis equal to its U.S. dollarvalue on the settlement date. Foreign currency that is purchased will generallyhave a tax basis equal to the U.S. dollar value of the foreign currency on thedate of purchase. Any gain or loss recognized on a sale or other disposition ofa foreign currency (including its use to purchase ordinary shares or uponexchange for U.S. dollars) will be U.S. source ordinary income or loss.

Deposits and withdrawals of ordinary shares by U.S.holders in exchange for ADSs will not result in the realization of gain or lossfor U.S. federal income tax purposes. Your tax basis in withdrawn ordinaryshares will be the same as your tax basis in the ADSs surrendered, and yourholding period for the ordinary shares will include the holding period of theADSs.

To the extent you incurSouth African stamp duty or uncertified securities tax in connection with atransfer or withdrawal of ordinary shares as described under “—Certain SouthAfrican Tax Considerations—Stamp duty and uncertificated securities tax” above,such stamp duty or uncertified securities tax will not be a creditable tax forU.S. foreign tax credit purposes.

*Backup Withholdingand Information Reporting*

Payments of dividends andother proceeds with respect to ordinary shares or ADSs by U.S. persons will bereported to you and to the IRS as may be required under applicable regulations.Backup withholding may apply to these payments if you fail to provide anaccurate taxpayer identification number or certification of exempt status orfail to report all interest and dividends required to be shown on your U.S.federal income tax returns. Some holders (such as corporations) are not subjectto backup withholding. You should consult your tax adviser as to yourqualification for an exemption from backup withholding and the procedure forobtaining an exemption.

**Documents onDisplay**

Gold Fields files annual and special reports and otherinformation with the Securities and Exchange Commission, or SEC. You may readand copy any reports or other information on file at the SEC’s public referenceroom at the following location:

100 F Street, N.E.Washington, D.C. 20549

Please call the SEC at 1-800-SEC-0330for further information on the public reference room. The SEC filings are alsoavailable to the public from commercial document retrieval services. GoldFields’ SEC filings may also be obtained electronically via the EDGAR system onthe website maintained by the SEC at http://www.sec.gov.

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**ITEM 11:QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Gold Fields is exposed to market risks, includingforeign currency, commodity price and interest rate risk associated withunderlying assets, liabilities and anticipated transactions. Following periodicevaluation of these exposures, Gold Fields may enter into derivative financialinstruments to manage some of these exposures. As part of its strategy,however, Gold Fields does not generally hedge against the risk of changes inthe price of gold. See “—Commodity Price Sensitivity—Commodity Price HedgingPolicy.”

Gold Fields has policiesin areas such as counterparty exposure, hedging practices and prudential limitswhich have been approved by Gold Fields’ Board of Directors. Management offinancial risk is centralized at Gold Fields’ treasury department, which actsas the interface between Gold Fields’ operations and counterparty banks. Thetreasury department manages financial risk in accordance with the policies andprocedures established by the Gold Fields Board of Directors and ExecutiveCommittee. Gold Fields’ Audit Committee has approved dealing limits for moneymarket, foreign exchange and commodity transactions, which Gold Fields’treasury is required to adhere to. Among other restrictions, these limitsdescribe which instruments may be traded and demarcate open position limits foreach category as well as indicating counterparty credit-related limits. Thedealing exposure and limits are checked and controlled each day and reported tothe Chief Financial Officer.

**Foreign CurrencySensitivity**

***General***

In the ordinary course ofbusiness, Gold Fields enters into transactions, such as gold sales, denominatedin foreign currencies, primarily U.S. dollars. In addition, Gold Fields hasinvestments and indebtedness in U.S. and Australian dollars. Although thisexposes Gold Fields to transaction and translation exposure from fluctuationsin foreign currency exchange rates, Gold Fields does not generally hedge thisexposure, although it may do so in specific circumstances, such as financingprojects or acquisitions. Also, Gold Fields on occasion undertakes currencyhedging to take advantage of favorable short-term fluctuations in exchangerates when management believes exchange rates are at unsustainably high levels.

***Foreign Currency Hedging Experience***

Gold Fields currentlyholds various hedging instruments to protect its exposure to adverse movementsin foreign currency exchange rates, which are described below.

*St. Ives and AgnewAustralian Dollar Instruments*

Gold Fields was requiredunder the $250.0 million syndicated credit facility which it entered into inconnection with the acquisition of St. Ives and Agnew from WMC to establish andmaintain a hedging strategy to reduce its exposure to increases in the value ofthe Australian dollar against the U.S. dollar. Accordingly, Gold Fields enteredinto various hedging arrangements in early October 2001 with Barclays andCitibank, the arrangers for the credit facility covering, in total, $500.0million over a five-year period. This facility was fully repaid in January 2004,and Gold Fields has effectively closed out these arrangements. These hedgingarrangements are described in detail below.

*St. Ives and AgnewForward Sale Contracts*

Gold Fields Australia PtyLimited, or Gold Fields Australia, entered into two series of forward salecontracts, each covering an aggregate amount of $125.0 million, with Barclaysand Citibank. Each series of contracts required Gold Fields Australia to sell$6.25 million for Australian dollars at a fixed exchange rate in20 quarterly installments beginning on March 31, 2002 and ending on December 31,2006. The fixed 

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exchange rate for theBarclays contracts was $0.49577 per A$1.00, while the fixed exchange rate forthe Citibank contracts was $0.49100 per A$1.00. Gold Fields paid no fees orother consideration to enter into the forward sale arrangements with Barclaysand Citibank.

*St. Ives and AgnewZero Cost Collars*

In addition, Gold Fields Australia entered into twoseries of specialized option contracts called “zero cost collars,” eachcovering an aggregate amount of $125.0 million, with Barclays and Citibank.Each series of contracts provided for the exchange of $6.25 million forAustralian dollars at fixed exchange rates in 20 quarterly installmentsbeginning on March 31, 2002 and ending on December 31, 2006. WhetherGold Fields Australia or the counterparty (Barclays or Citibank) would havebeen obligated to sell U.S. dollars or Australian dollars, respectively,depended on the U.S. dollar/Australian dollar exchange rate in effect duringand at the end of each quarter.

Specifically, forthe Citibank zero cost collars:

·       ifthe U.S. dollar/Australian dollar exchange rate was $0.51820 per A$1.00 or moreat the end of the relevant quarter, Citibank was obligated to sell Australiandollars to Gold Fields Australia for U.S. dollars at an exchange rate of$0.51820 per A$1.00;

·       ifthe exchange rate at the end of the relevant quarter was less than $0.51820 perA$1.00 and greater than $0.42820 per A$1.00, neither party was obligated tosell its respective currency; and

·       ifthe exchange rate was $0.42820 or less per A$1.00 at any time during therelevant quarter, Gold Fields Australia was obligated to sell U.S. dollars toCitibank for Australian dollars at an exchange rate of $0.50320 per A$1.00regardless of the exchange rate at the end of the relevant quarter. This wasreferred to as a “knock-in” feature.

For the Barclayszero cost collars:

·       ifthe U.S. dollar/Australian dollar exchange rate was $0.51990 per A$1.00 or moreat the end of the relevant quarter, Barclays was obligated to sell Australiandollars to Gold Fields Australia for U.S. dollars at an exchange rate of$0.51990 per A$1.00;

·       ifthe exchange rate at the end of the relevant quarter was less than $0.51990 perA$1.00 and greater than $0.42950 per A$1.00, neither party was obligated tosell its respective currency; and

·       ifthe exchange rate was $0.42950 per A$1.00 or less at any time during therelevant quarter, Gold Fields Australia was obligated to sell U.S. dollars toBarclays for Australian dollars at an exchange rate of $0.50490 per A$1.00regardless of the exchange rate at the end of the relevant quarter.

Gold Fields paid no fees or other consideration toenter into the zero cost collar arrangements with Barclays and Citibank.

On January 7, 2004, Gold Fields Australiaeffectively closed out the Australian dollar/United States dollar currencyforward sale contracts and zero cost dollars by entering into equal andopposite transactions. The close out of the outstanding open position of $275.0million was at an average spot rate of $0.7670 per A$1.00. These transactionslocked in gross profit amounting to $115.7 million of which $102.8 million hadalready been accounted for through the end of December 2003 via scheduledmaturities of the instruments from the time they were first purchased in 2001.The remaining underlying cash receipts were deferred to match the maturitydates of the original transactions. In addition, to allow Gold Fields toparticipate in further Australian dollar appreciation, a series of quarterlymaturing Australian dollar/U.S. dollar call options were purchased on January 7,2004, in respect of an amount of $275.0 million, with value dates and amountsmatching those of the original instruments. These new Australian dollar calloptions required Gold Fields to pay a premium of $8.3 million. The paymentdates are scheduled to match the maturity 

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dates of, and the amount of the premium is offsetagainst the amounts due under, the original instruments. The average strikeprice of the options is $0.7670 per A$1.00.

Subsequently, on May 7, 2004, the future U.S.dollar values that were to be received in respect of the original instrumentswere fixed in Australian dollars so as to take advantage of the weakenedAustralian dollar against the U.S. dollar at that time. The original value ofthe future cash flows was $107.4 million or A$140.0 million at $0.7670 perA$1.00, the rate at the time the call options were purchased. The value fixedin Australian dollars amounts to A$147 million, based on a spot rate of $0.7158per A$1.00.

Thefollowing table presents the cash flows as of June 30, 2006, net of thepremium on the call options related to the profit resulting from the close outof the original Australian dollar/U.S. dollar instruments.

| **Payment value dates** | ** ** | ** **               | ** ** | **Net future cash flows** | ** ** |
|-----------------------------------|------------|--------------------------|------------|------------------------------------------|------------|
| ** **                        | ** ** | **(US$ ’000)** | ** ** | **(A$ ’000)**                  | ** ** |
| June 30,  2006               |       |                     | 8,720      |                                     |       |   | 12,899 |   |   |
| September 29,  2006(1)       |       |                     | 8,460      |                                     |       |   | 12,561 |   |   |
| December 29,  2006(1)        |       |                     | 8,245      |                                     |       |   | 12,281 |   |   |
| **Total**                         |       |                     | 25,425     |                                     |       |   | 37,741 |   |   |

----

Note:

(1)    Cash flow due on September 29, 2006 andDecember 29, 2006 was accelerated at the end of fiscal 2006, with anamount of A$24.5 million being received on July 3, 2006.

*South African RandInstruments*

During May and June 2003, Gold Fieldsentered into a number of forward purchase contracts with several financialinstitutions providing for the purchase by Gold Fields of an aggregate amountof $36.0 million at a fixed exchange rate of Rand 8.7318 per $1.00 on June 3,2004. This was done to protect the Group’s commitment in respect of the Tarkwamill and owner mining projects of $159 million. At the beginning of fiscal 2004this amount was increased to $50.0 million at an average exchange rate ofR8.4264 per $1.00.

The forward purchase of $50.0 million matured on June 3,2004, resulting in a cash outflow of $16.0 million. This amount was extended atan exchange rate of Rand 6.6368 per $1.00 to mature on December 31, 2004.The $50.0 million matured on December 31, 2004, resulting in a cashoutflow of $4.1 million. The spot rate on this date was R5.8215 per $1.00.

On December 31, 2004, an amount of $30.0 millionwas extended at a new rate of R5.9611 per $1.00 to mature on June 3, 2005.The $30.0 million matured on June 3, 2005, resulting in a cash inflow of$3.8 million. The spot rate on this date was R6.8198 per $1.00. On June 3,2005, the $30.0 million was extended at a rate of R6.9402 per $1.00, to matureon December 5, 2005. The $30.0 million matured on December 5, 2005,resulting in a cash outflow of $2.2 million.

On December 5, 2005, the $30.0 million wasextended at an average rate of R6.2522 per $1.00 to mature on June 5,2006. On June 5, 2006, the $30.0 million matured, resulting in a cashinflow of $0.9 million. One June 5, 2006, $30.0 million was extended at anaverage rate of R6.7598 per $1.00 to mature on December 5, 2006. The $30.0million forward cover was purchased to cover any U.S. dollar commitmentspayable from South Africa.

Realized gains onfinancial instruments are disclosed in detail under the Results of Operationssection, under the sub-heading “Realized gains on financial instruments.”

240

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***Foreign Currency Contract Position***

As of June 30,2006, Gold Fields’ foreign currency contract position was as follows:

| ** **                          | ** ** | **2006**   | ** ** | **2007**   | ** ** | **Total**  | ** ** |
|-------------------------------------|------------|------------|------------|------------|------------|------------|------------|
| **A$/US$call options:**             | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Volume ($ million)             |       | 25.0       |       | 50.0       |       | 75.0       |       |
| $per A$1.00(1)                      |       | 0.7670     |       | 0.7670     |       | 0.7670     |       |
| **$/R forward exchange contracts:** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Volume ($ million)             |       | 30.0       |       | —     |       | 30.0       |       |
| $per R1.00                          |       | 0.1479     |       | —     |       | 0.1479     |       |

----

Note:

(1)    Weighted average rate of all contracts in the relevantperiods.

***Foreign Currency Sensitivity Analysis***

Gold Fields’ revenues and costs are very sensitive tothe Rand/U.S. dollar exchange rate because revenues are generated using a goldprice denominated in U.S. dollars, while costs of the South African operationsare incurred principally in Rand. Depreciation of the Rand against the U.S. dollarreduces Gold Fields’ average costs when they are translated into U.S. dollars,thereby increasing the operating margin of the South African operations.Conversely, appreciation of the Rand results in South African operating costsbeing translated into U.S. dollars at a higher Rand/U.S. dollar exchange rate,resulting in lower operating margins. The impact on profitability of changes inthe value of the Rand against the U.S. dollar can be substantial.

A sensitivity analysis ofthe mark-to-market valuations of Gold Fields’ foreign currency contracts as of June 30,2006 is set forth below.

*Australian DollarInstruments*

| ** **                                      | ** ** | **US$/A$ exchange rate as of June 30, 2006** | ** ** |
|-------------------------------------------------|------------|---------------------------------------------------------------------------------|------------|
| ** **                                      | ** ** | **(A$)**                                                                        | ** ** |
| **Sensitivity  to US$/A$(1)****exchange rates** | ** ** | -10.0                                                                           | %          | -7.5 | % | -5.0 | % | Spot | (2) | +5.0 | % | +7.5 | % | +10.0 | % |
| Mark-to-market options  ($ million)        |       | 0.0                                                                             |       | 0.0 |   | 0.1 |   | 0.4 |   | 2.5 |   | 3.8 |   | 5.3 |   |

----

Notes:

(1)    “+” and“-” designate the strengthening and weakening of theAustralian dollar against the U.S. dollar.

(2)    Spot rate: $0.7327 = A$1.00.

| ** **                                     | ** ** | **Weighted average U.S. dollar interest rate as of June 30, 2006** | ** **   |
|------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------|--------------|
| ** **                                     | ** ** | **(A$)**                                                                                                             | *** *** |
| **Sensitivity to U.S. dollar  interest rates** |       | (1.5                                                                                                                 | )%           | (1.0 | )% | (0.5 | )% | Spot | (1) | +0.5 | % | +1.0 | % | +1.5 | % |
| Mark-to-market options  ($ million)       |       | 0.3                                                                                                                  |         | 0.3 |   | 0.3 |   | 0.4 |   | 0.4 |   | 0.4 |   | 0.4 |   |

----

Note:

(1)    Spot U.S. dollar interest rate: 5.50%.

241

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| ** **                                           | ** ** | **Weighted average Australian dollar interest rate as of June 30, 2006** | ** ** |
|------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------|------------|
| **Sensitivity to Australian  dollar interest rates** |       |  (1.5                                                                                                                 | )%         |  (1.0 | )% |  (0.5 | )% |  Spot | (1) |  +0.5 | % |  +1.0 | % |  +1.5 | % |
| Mark-to-market options  ($ million)             |       | 0.4                                                                                                                        |       | 0.4 |   | 0.4 |   | 0.4 |   | 0.3 |   | 0.3 |   | 0.3 |   |

----

Note:

(1)    Spot Australian dollar interest rate: 5.34%.

***South African Rand Instruments***

| ** **                                           | ** ** | **US$/R(1) exchange rate as of June 30, 2006** | ** **   |
|------------------------------------------------------|------------|-----------------------------------------------------------------------------------|--------------|
| ** **                                           | ** ** | **(R)**                                                                           | *** *** |
| **Sensitivity  to US$/R**(1)** exchange rates** |       | -10.0                                                                             | %            | -7.5 | % | -5.0 | % | Spot | (2) |  +5.0 | % | +7.5 | % | +10.0 | % |
| Mark-to-market forwards  ($ million)            |       | 5.82                                                                              |         | 5.07 |   | 4.32 |   | 2.82 |   | 1.32 |   | 0.57 |   | (0.18 | ) |

----

Notes:

(1)    “+” and“-” designate the strengthening and weakening of the Randagainst the U.S. dollar.

(2)    Spot rate: $0.1346 = R1.00.

| ** **                                | ** ** | **Weighted average Rand interest rate as of June 30, 2006** | ** ** |
|-------------------------------------------|------------|----------------------------------------------------------------------------------------------------------|------------|
| **Sensitivity  to Rand interest rates**   |       | (1.5                                                                                                     | )%         | (1.0 | )% | (0.5 | )% | Spot | (1) | +0.5 | % | +1.0 | % | +1.5 | % |
| Mark-to-market forwards  ($ million) |       | 2.73                                                                                                     |       | 2.76 |   | 2.79 |   | 2.81 |   | 2.85 |   | 2.88 |   | 2.91 |   |

----

Note:

(1)    Spot Rand interest rate: 8.20%.

| ** **                                     | ** ** | **Weighted average U.S. dollar interest rate as of June 30, 2006** | ** ** |
|------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------|------------|
| **Sensitivity  to U.S. dollar interest rates** |       | (1.5                                                                                                                 | )%         | (1.0 | )% | (0.5 | )% | Spot | (1) | +0.5 | % | +1.0 | % | +1.5 | % |
| Mark-to-market forwards  ($ million)      |       | 2.91                                                                                                                 |       | 2.88 |   | 2.85 |   | 2.81 |   | 2.79 |   | 2.76 |   | 2.73 |   |

----

Note:

(1)    Spot U.S. dollar interest rate: 5.50%.

**Commodity PriceSensitivity**

***General***

*Gold*

The market price of goldhas a significant effect on the results of operations of Gold Fields, theability of Gold Fields to pay dividends and undertake capital expenditures, andthe market price of Gold Fields’ ordinary shares. Gold prices have historicallyfluctuated widely and are affected by numerous industry factors over which GoldFields does not have any control. See “Risk Factors—Changes in the market pricefor gold, which in the past has fluctuated widely, affect the profitability ofGold Fields’ operations and the cash flows generated by those operations” and “Operatingand Financial Review and Prospects—Revenues.” The aggregate effect of thesefactors on the gold price, all of which are beyond the control of Gold Fields,is impossible for Gold Fields to predict.

242

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*Oil*

The market price of oilhas a significant effect on the results of the offshore operations of GoldFields. The offshore operations consume large quantities of diesel in therunning of their mining fleets. Oil prices have historically fluctuated widelyand are affected by numerous factors over which Gold Fields does not have anycontrol.

***Commodity Price Hedging Policy***

*Gold*

Generally, GoldFields does not enter into forward sales, derivatives or other hedgingarrangements to establish a price in advance for future gold production. On anexceptional basis, Gold Fields may consider gold hedging arrangements in one ormore of the following circumstances:

·       toprotect cash flows at times of significant expenditure;

·       forspecific debt servicing requirements; and

·       to safeguard the viabilityof higher cost operations.

See “Information on the Company—Strategy—Hedging”

To the extent that itenters into commodity hedging arrangements, Gold Fields seeks to use differentcounterparty banks consisting of local and international banks to spread risk.None of the counterparties is affiliated with, or related parties of, GoldFields.

*Oil*

Generally Gold Fields doesnot enter into derivatives or other hedging arrangements to establish a pricein advance for future oil consumption. However, where oil prices are expectedto increase in the short to medium term, Gold Fields may consider hedging theoil price in order to protect itself against the adverse cost effects of amaterial increase in the oil price.

***Commodity Price Hedging Experience***

*Oil*

On June 8, 2005 GoldFields Ghana Limited, or Gold Fields Ghana, and Abosso Goldfields Limited, orAbosso, purchased an Asian-style IPE Gasoil call option for one year (June 8,2005—May 31, 2006) at a strike price of US$0.45 per liter for a total of51.6 million liters, of which two thirds was for Gold Fields Ghana andone-third was for Abosso. The call option resulted in a premium of $1.16million, paid upfront, at a swap price of $0.46 per liter.

***Commodity Price Contract Position***

As of June 30, 2006, Gold Fields did not have anycommodity price hedging contracts outstanding.

Subsequent to the financial year end, Gold FieldsGhana and Abosso purchased an Asian-style IPE Gasoil call option for one year (July 3,2006 to June 30, 2007) at a strike price of US$0.5716 per liter for atotal of 58.8 million liters, of which 42.0 million liters is for Gold FieldsGhana and 16.8 million is for Abosso. The call option resulted in apremium of $1.49 million, paid upfront, at a swap price of $0.5731 per liter.

In connection with theacquisition of Western Areas, Gold Fields will be acquiring the Western Areashedge book. See “Information on the Company—Recent Developments—Acquisition ofSouth Deep.”

243

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**Interest RateSensitivity**

***General***

As of June 30, 2006,Gold Fields’ long-term indebtedness amounted to $650.6 million. Gold Fieldsgenerally does not undertake any specific action to cover its exposure tointerest rate risk, although it may do so in specific circumstances as in thecase of the Mvelaphanda Transaction. Under the Mvela Loan, South African (Pty)Limited, or GFIMSA, pays Mvela Gold interest, semi-annually and at a fixed rateof 10.56% per annum, on $591.3 million (Rand 4,139.0 million). In March 2006,Gold Fields secured a $250 million three-year corporate facility of which $158million was drawn down to fund the Bolivar Gold acquisition. At June 30,2006, the amount outstanding under the facility was US$158 million. Interest onthis loan is LIBOR plus 35 basis points. See “Operating and Financial Reviewand Prospects—Liquidity and Capital Resources—Credit Facilities—Mvela Loan.”

***Interest Rate Hedging Experience***

In connection with theMvela Loan, GFIMSA entered into two interest rate swaps. These swaps wereclosed out on June 30, 2005 so that Gold Fields currently pays interest onthe Mvela Loan at the fixed rate set forth above. Gold Fields realizedmark-to-market gain on the swap of $36.2 million and interest rate credits of$14.8 million, giving a total gain of $51.0 million. Of the $36.2 millionrealized mark-to-market gain, $0.8 million was accounted for in fiscal 2005,$9.2 million was recognized in fiscal 2006 and the balance of $26.2 millionwill be accounted for in fiscal 2007 to fiscal 2009. Of the $14.8 million ininterest rate credits, $12.9 million was accounted for in fiscal 2005 and thebalance of $1.9 million was accounted for in fiscal 2004.

244

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**ITEM 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

Not applicable.

245

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**PART II**

**ITEM 13: DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

Not applicable.

246

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**ITEM 14: MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITYHOLDERS AND USE OF PROCEEDS**

Not applicable.

247

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**ITEM 15: CONTROLS AND PROCEDURES**

(a)           Gold Fields has carriedout an evaluation, under the supervision and with the participation ofmanagement, including the Chief Executive Officer and Chief Financial Officerof Gold Fields, of the effectiveness of the design and operation of Gold Fields’disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e))as of the end of the period covered by this annual report. Based upon thatevaluation, Gold Fields’ Chief Executive Officer and Chief Financial Officerconcluded that, as of June 30, 2006, Gold Fields’ disclosure controls andprocedures were effective to ensure that information required to be disclosedby Gold Fields in reports that it files or submits under the Exchange Act isrecorded, processed, summarized and reported within the time periods specifiedin Securities and Exchange Commission rules and forms.

(b)          Not applicable for thisannual report, which covers a fiscal year ended prior to July 15, 2006.

(c)           Not applicable for thisannual report, which covers a fiscal year ended prior to July 15, 2006.

(d)          Therehas been no change in Gold Fields’ internal control over financial reportingthat occurred during fiscal 2006 that has materially affected, or is reasonablylikely to materially affect, Gold Fields’ internal control over financialreporting.

248

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**ITEM 16A: AUDIT COMMITTEE FINANCIAL EXPERT**

The Board of Directors hasdetermined that Gold Fields’ Audit Committee does not have an “audit committeefinancial expert,” as defined in rules promulgated by the Securities andExchange Commission. Although a person with such qualifications does not serveon the Audit Committee, the Board of Directors believes that the members of theAudit Committee collectively possess the knowledge and experience to overseeand assess the performance of Gold Fields’ management and auditors, the qualityof Gold Fields’ disclosure controls, the preparation and evaluation of GoldFields’ financial statements and Gold Fields’ financial reporting. Gold Fields’Board of Directors also believes that the members of the Audit Committeecollectively possess the understanding of audit committee functions necessaryto diligently execute their responsibilities. For biographical information oneach member of the Audit Committee, see “Directors, Senior Management andEmployees—Non-executive Directors.”

249

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**ITEM 16B: CODE OF ETHICS**

Gold Fields has adopted aCompany Code of Ethics, or the Code, which applies to all directors andemployees, the text of which can be accessed on Gold Fields’ website atwww.goldfields.co.za. The Code was revised in fiscal 2007 and the revisions arein the process of being implemented. The revised Code updates the disclosurerequirements and allocates responsibility for managing the Code to differentlevels of management.

250

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**ITEM 16C: PRINCIPAL ACCOUNTANT FEES AND SERVICES**

PricewaterhouseCoopersInc., or PwC, has served as Gold Fields’ principal accountant for the fiscalyears ended June 30, 2005 and 2006. Set forth below are the fees for auditand other services rendered by PwC for the fiscal years ended June 30,2005 and 2006.

| ** **          | ** ** | **Year ended  June 30,  2005** | ** **   | **Year ended  June 30,  2006** | ** ** |
|---------------------|------------|------------------------------------------|--------------|------------------------------------------|------------|
| ** **          | ** ** | **(R millions)**                    | *** *** |
| Audit fees          |       |                                     | 6.3          |                                     |       |   | 9.1 |   |   |
| Audit-related  fees |       |                                     | 5.4          |                                     |       |   | 3.6 |   |   |
| Tax fees            |       |                                     | 0.1          |                                     |       |   | 0.4 |   |   |
| All other fees      |       |                                     | 0.1          |                                     |       |   | 0.7 |   |   |
| Total               |       |                                     | 11.9         |                                     |       |   | 13.8 |   |   |

 

Audit fees include fees billed for audit servicesrendered for Gold Fields’ annual consolidated financial statements filed withregulatory organizations.

Audit-related fees relate mainly to advice inconnection with the implementation of Section 404 of the Sarbanes-OxleyAct of 2002, audit of companies acquired and accounting advice.

Tax fees include fees billed for tax compliance, taxadvice, tax planning and other tax-related services.

All other fees consist of fees for all other servicesnot included in any of the other categories noted above.

All of the above fees werepre-approved by the Audit Committee.

**Audit Committee’sPolicies and Procedures**

In accordance with the Securities and ExchangeCommission rules regarding auditor independence, the Audit Committee hasestablished Policies and Procedures for Audit and Non-Audit Services Providedby an Independent Auditor. The rules apply to Gold Fields and itsconsolidated subsidiaries engaging any accounting firms for audit services andthe auditor who audits the accounts filed with the Securities and ExchangeCommission, or the external auditor, for permissible non-audit services.

When engaging the externalauditor for permissible non-audit services (audit-related services, taxservices, and all other services), pre-approval is obtained prior to thecommencement of the services.

251

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**ITEM 16D: EXEMPTIONS FROM THE LISTING STANDARDSFOR AUDIT COMMITTEES**

Not applicable.

252

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**ITEM 16E: PURCHASES OF EQUITY SECURITIES BY THE ISSUERAND AFFILIATED PURCHASERS**

In August 2005, Gold Fields purchased 1,000,000of its ordinary shares in the open market at a weighted average price of Rand74.89. Those ordinary shares were then cancelled on August 17, 2005.

253

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**PART III**

**ITEM 17: FINANCIAL STATEMENTS**

Gold Fields has respondedto Item 18 in lieu of responding to this item.

254

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**ITEM 18: FINANCIAL STATEMENTS**

The following financialstatements of Gold Fields Limited are filed as part of this annual report.

**INDEXTO FINANCIAL STATEMENTS**

|                                                                                                                        | ** ** | **Page** | ** ** |
|------------------------------------------------------------------------------------------------------------------------|------------|----------|------------|
| **Gold Fields Limited**                                                                                                | ** ** |     | ** ** | ** ** |   |
| Report of the Independent  Registered Public Accounting Firm                                                           |       |     | F-1        | ** ** |   |
| Consolidated Statements of  Operations for the Years Ended June 30, 2006, 2005 and 2004                           |       |     | F-2        | ** ** |   |
| Consolidated Balance Sheets as of  June 30, 2006 and 2005                                                         |       |     | F-3        | ** ** |   |
| Consolidated Statements of Changes  in Shareholders’ Equity for the Years Ended June 30, 2006, 2005 and 2004 |       |     | F-4        | ** ** |   |
| Consolidated Statements of  Cash Flows for the Years Ended June 30, 2006, 2005 and 2004                           |       |     | F-5        | ** ** |   |
| Consolidated Statements of  Comprehensive Income for the Years Ended June 30, 2006, 2005  and 2004           |       |     | F-6        | ** ** |   |
| Notes to the Consolidated Financial  Statements                                                                        |       |     | F-7        | ** ** |   |
| **Schedules to Gold Fields  Limited’s Financial Statements**                                                      | ** ** |     | ** ** | ** ** |   |
| Report of the Independent  Registered Public Accounting Firm                                                           |       |     | S-1        | ** ** |   |
| Schedule 1—Valuation  and Qualifying Accounts                                                                |       |     | S-2        | ** ** |   |

 

255

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**ITEM 19: EXHIBITS**

Thefollowing instruments and documents are included as Exhibits to this annualreport.

| No.                            | ** ** | ** **                                                                                                                                                                                                                                                                                                             | ** ** | **Exhibit** |
|--------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|
| 1.1(†)                    |       | Memorandum of  Association of Gold Fields                                                                                                                                                                                                                                                                              |
| 1.2(†)                    |       | Articles of  Association of Gold Fields                                                                                                                                                                                                                                                                                |
| 2.1(†)                    |       | Memorandum of  Association of Gold Fields (included in Exhibit 1.1)                                                                                                                                                                                                                                               |
| 2.2(†)                    |       | Articles of  Association of Gold Fields (included in Exhibit 1.2)                                                                                                                                                                                                                                                 |
| 2.3(††)              |       | Deposit Agreement  among Gold Fields, Gold Fields Limited (f/k/a/Driefontein Consolidated  Limited), The Bank of New York, as depositary, and the owners and beneficial  owners from time to time of American Depositary Receipts, dated as of  February 2, 1998, as amended and restated as of May 21, 2002 |
| 2.4(††)              |       | Form of  American Depositary Receipt (included in Exhibit 2.3)                                                                                                                                                                                                                                               |
| 2.5(†)                    |       | Excerpts of  relevant provisions of the South African Companies Act                                                                                                                                                                                                                                                    |
| 2.6(†)                    |       | Excerpts of  relevant provisions of the JSE Limited listing requirements                                                                                                                                                                                                                                               |
| 4.1(†)                    |       | The GF  Non-Executive Director Share Plan, adopted October 31, 2001                                                                                                                                                                                                                                               |
| 4.2(†)                    |       | The GF Management  Incentive Scheme, adopted November 10, 1999                                                                                                                                                                                                                                                    |
| 4.3(††††)  |       | Deed of Amendment  to the GF Non-Executive Share Plan, adopted December 6, 2002                                                                                                                                                                                                                                   |
| 4.4(††††)  |       | Deed of Amendment  to the GF Management Incentive Scheme between Gold Fields Limited and Tokyo  Mosima Gabriel Sexwale and Gordon Rae Parker, both in their capacity as  trustees for The GF Management Incentive Trust, adopted May 4, 2001                                                                      |
| 4.5(††††)  |       | Deed of Amendment  to the GF Management Incentive Scheme between Gold Fields Limited and Tokyo  Mosima Gabriel Sexwale and Gordon Rae Parker, both in their capacity as  trustees for The GF Management Incentive Trust, adopted October 31, 2001                                                                 |
| 4.6(††††)  |       | Exploration  Incentive Plan, adopted on May 25, 1999, as amended on August 22,  2000                                                                                                                                                                                                                         |
| 4.7(††††)  |       | Agreement between  Ian D. Cockerill and Gold Fields Guernsey Limited, effective March 1,  2004                                                                                                                                                                                                                    |
| 4.8(††††)  |       | Service Agreement  between Ian D. Cockerill and GFL Mining Services Ltd., effective  March 1, 2004                                                                                                                                                                                                                |
| 4.9(††††)  |       | Service Agreement  between Nicholas J. Holland and GFL Mining Services Ltd., effective  March 1, 2004                                                                                                                                                                                                             |
| 4.10(††††) |       | Agreement between  Nicholas J. Holland and Gold Fields Guernsey Limited, effective March 1,  2004                                                                                                                                                                                                                 |
| 4.11(††††) |       | Memorandum of  Agreement between Anglogold Limited and Driefontein Consolidated  (Proprietary) Limited, dated September 18, 2003                                                                                                                                                                                  |
| 4.12(††††) |       | First Addendum of  Agreement between Anglogold Limited and Driefontein Consolidated  (Proprietary) Limited, dated January 27, 2004                                                                                                                                                                                |
| 4.13(†††)       |       | Purchase  Agreement between Outokumpu Nickel B.V., Outokumpu Mining Oy, Gold Fields  Exploration B.V. and Gold Fields Finland Oy, dated September 4, 2003                                                                                                                                                         |

256

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| 4.14(†††)             |   | Reorganization Agreement  between Beatrix Mining Ventures Limited, Driefontein Consolidated  (Proprietary) Limited, Kloof Gold Mining Company Limited, GFL Mining Services  Limited, Gold Fields Limited and Newshelf 706 Limited, dated July 25,  2003                                                                                |
|--------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.15(††††)       |   | Addendum Number 1  to the Reorganization Agreement between Beatrix Mining Ventures Limited,  Driefontein Consolidated (Proprietary) Limited, Kloof Gold Mining Company  Limited, GFL Mining Services Limited, Gold Fields Limited and Newshelf 706  Limited, dated February 12, 2004                                                   |
| 4.16(†††)             |   | Covenants  Agreement between Gold Fields Limited, Mvelaphanda Resources Limited,  Lexshell 579 Investments (Proprietary) Limited and Newshelf 706 Limited,  dated November 26, 2003                                                                                                                                                    |
| 4.17(†††)             |   | Subscription and  Share Exchange Agreement amongst Lexshell 579 Investments (Proprietary)  Limited, GFL Mining South Africa Limited and Gold Fields Limited dated  December 11, 2003                                                                                                                                                   |
| 4.18(†††)             |   | GFI-SA Loan  Agreement amongst Lexshell 579 Investments (Proprietary) Limited, First Rand  Bank Limited, GFI Mining South Africa Limited, Gold Fields Limited, Gold  Fields Australia Proprietary Limited and Gold Fields Guernsey Limited dated  December 11, 2003                                                                    |
| 4.19(††††)       |   | Addendum to  GFI-SA Loan Agreement among Gold Fields, Mvela Gold, Gold Fields Australia,  Gold Fields Guernsey Limited and GFI-SA, dated February 13, 2004                                                                                                                                                                             |
| 4.20(††††)       |   | PIC Put Option  Agreement between Public Investment Corporation, GFL Mining Services Limited  and Gold Fields Limited dated February 13, 2004                                                                                                                                                                                          |
| 4.21(††††)       |   | Agreement between  Gold Fields Limited, GFL Mining Services Limited, Mvelaphanda Resources  Limited, GFI Mining South Africa Limited, and Mvelaphanda Gold (Proprietary)  Limited, dated November 17, 2004                                                                                                                             |
| 4.22(††††)       |   | Second Addendum  to GFI-SA Loan Agreement among Mvelaphanda Gold (Proprietary) Limited, First  Rand Bank Limited (acting through its Rand Merchant Bank Division), GFI  Mining South Africa (Proprietary) Limited, Gold Fields Limited, Gold Fields  Australia Pty Limited, and Gold Fields Guernsey Limited, dated  November 17, 2004 |
| 4.23(†††††) |   | The Gold Fields  Limited and Bolivar Gold Corporation Arrangement Agreement, dated  December 1, 2005                                                                                                                                                                                                                                   |
| 4.24(†††††) |   | The Gold Fields  Limited 2005 Non-Executive Share Plan, adopted November 17, 2005                                                                                                                                                                                                                                                      |
| 4.25(†††††) |   | The Gold Fields  Limited 2005 Share Plan, adopted November 17, 2005                                                                                                                                                                                                                                                                    |
| 4.26                                 |   | Agreement between  Gold Fields Limited, GFL Mining Services Limited, Mvelaphanda Resources  Limited, GFI Mining South Africa Limited, and Mvelaphanda Gold (Proprietary)  Limited, dated July 17, 2006                                                                                                                                 |
| 4.27                                 |   | Acquisition and  Framework Agreement between North American Palladium Limited, Gold Fields  Exploration BV, Gold Fields Finland Oy and North American Palladium Finland  Oy, dated March 24, 2006, as amended on May 12, 2006                                                                                                     |
| 4.28                                 |   | Service Agreement  between Gold Fields Arctic Platinum Oy, North American Palladium Limited and  North American Palladium Arctic Services Oy, dated March 24, 2006                                                                                                                                                                     |

257

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| 4.29 |   | US$250,000,000 Facility  Agreement between Orogen Holding (BVI) Limited, Gold Fields Limited, GFI  Mining South Africa (Proprietary) Limited, Gold Fields Holdings Company (BVI)  Limited, Barclays Capital, J.P. Morgan Plc, Financial Institutions (as  defined in the Facility) and J.P. Morgan Europe Limited, dated March 3,  2006 |
|------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.30 |   | Share Purchase Agreement between PDG  Aureate Limited, Barrick Gold Corporation and Gold Fields Limited, dated  September 11, 2006                                                                                                                                                                                                      |
| 4.31 |   | Agreement between Gold Fields Limited,  JCI Limited, JCI Investment Finance (Proprietary) Limited and JCI Gold  Limited, dated September 11, 2006                                                                                                                                                                                       |
| 4.32 |   | US$150,000,000  Facility Agreement between Gold Fields La Cima S.A., The Royal Bank of  Scotland plc, Citigroup Global Markets Inc., The Bank of Nova Scotia, The  Bank of Nova Scotia Trust Company of New York, Scotiabank Peru S.A.A and  Financial Institutions (as defined in the Facility), dated November 14,  2006              |
| 4.33 |   | US$1,800,000,000  Facility Agreement between GFI Mining South Africa (Proprietary)  Limited, The Subsidiaries (as defined in the Facility), Citibank, N.A.  London Branch, J.P. Morgan Plc, Financial Institutions (as defined  in the Facility) and J.P. Morgan Europe Limited, dated November 24, 2006  |
| 8.1  |   | Amended list of  subsidiaries of the registrant                                                                                                                                                                                                                                                                                              |
| 12.1 |   | Certification of  Chief Executive Officer                                                                                                                                                                                                                                                                                                    |
| 12.2 |   | Certification of  Chief Financial Officer                                                                                                                                                                                                                                                                                                    |
| 13.1 |   | Certification of  Chief Executive Officer                                                                                                                                                                                                                                                                                                    |
| 13.2 |   | Certification of  Chief Financial Officer                                                                                                                                                                                                                                                                                                    |

----

| (†)                         |   | Incorporated by reference to the registration  statement on Form 20-F (File No. 1-31318), filed by  Gold Fields with the Securities and Exchange Commission on May 6, 2002. |
|----------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (††)                   |   | Incorporated by  reference to the annual report on Form 20-F (File No. 1-31318),  filed by Gold Fields with the Securities and Exchange Commission on  October 24, 2002.    |
| (†††)             |   | Incorporated by  reference to the annual report on Form 20-F (File No. 1-31318),  filed by Gold Fields with the Securities and Exchange Commission on  December 29, 2003.   |
| (††††)       |   | Incorporated by  reference to the annual report on Form 20-F (File No. 1-31318),  filed by Gold Fields with the Securities and Exchange Commission on  November 26, 2004.   |
| (†††††) |   | Incorporated by  reference to the annual report on Form 20-F (File No. 1-31318),  filed by Gold Fields with the Securities and Exchange Commission on  December 22, 2005.   |

 

 

258

----

**SIGNATURES**

Theregistrant hereby certifies that it meets all of the requirements for filing onForm 20-F and that it has duly caused and authorized the undersignedto sign this annual report on its behalf.
| GOLD FIELDS LIMITED             |
|---------------------------------|
| /s/ NICHOLAS J. HOLLAND         |   |
| Name: Nicholas J. Holland       |
| Title:*Chief Financial Officer* |
| Date: November 24, 2006    |

 

259

----

**Report of theIndependent Registered Public Accounting Firm**

**To the Board ofDirectors and Shareholders of Gold Fields Limited**

We have audited the accompanying consolidated balancesheets of Gold Fields Limited and its subsidiaries as of June 30, 2006 and2005, and the related consolidated statements of operations, comprehensiveincome, cash flows and of changes in shareholders’ equity for each of the threeyears in the period ended June 30, 2006. These financial statements arethe responsibility of the Company’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

We conducted our audits in accordance with thestandards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statementsreferred to above present fairly, in all material respects, the financialposition of Gold Fields Limited and its subsidiaries at June 30, 2006 and2005 and the results of their operations and their cash flows for each of thethree years in the period ended June 30, 2006, in conformity withaccounting principles generally accepted in the United States of America.

As discussed in note 2(p) tothe consolidated financial statements, the Company changed its method ofaccounting for share-based compensation.

**PricewaterhouseCoopers Inc**

Johannesburg, Republic of South AfricaNovember 24, 2006

F-1

----

**Gold Fields LimitedConsolidated Statements of OperationsFor the years ended June 30,($ in millions unless otherwise noted)**

| ** **                                                                                          | ** ** | **2006**     | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|-----------------------------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                                                                          | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **REVENUES**                                                                                        | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Product sales                                                                                       |       | 2,282.0      |       | 1,893.1      |       | 1,706.2      |       |
| **COSTS AND EXPENSES**                                                                              | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Production  costs (exclusive of depreciation and amortization)                                      |       | 1,621.6      |       | 1,500.6      |       | 1,355.2      |       |
| Depreciation  and amortization                                                                      |       | 269.2        |       | 274.5        |       | 198.6        |       |
| Corporate  expenditure                                                                              |       | 21.9         |       | 22.5         |       | 20.3         |       |
| Employment  termination costs                                                                       |       | 9.1          |       | 13.7         |       | 10.5         |       |
| Exploration  expenditure                                                                            |       | 39.3         |       | 46.0         |       | 39.9         |       |
| Impairment of  assets                                                                               |       | —       |       | 233.1        |       | 72.7         |       |
| Impairment of  critical spares                                                                      |       | —       |       | 2.8          |       | —       |       |
| Decrease in  provision for post-retirement health care costs                                        |       | (0.5         | )          | (4.2         | )          | (5.1         | )          |
| Accretion  expense on environmental rehabilitation                                                  |       | 8.6          |       | 11.5         |       | 8.4          |       |
| Share-based  compensation                                                                           |       | 11.5         |       | 2.1          |       | —       |       |
| Harmony  hostile bid costs                                                                          |       | —       |       | 50.8         |       | —       |       |
| IAMGold  transaction costs                                                                          |       | —       |       | 9.3          |       | —       |       |
|                                                                                                |       | 1,980.7      |       | 2,162.7      |       | 1,700.5      |       |
| **OTHER (EXPENSES)/INCOME**                                                                         | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Interest and  dividends                                                                             |       | 26.8         |       | 29.2         |       | 19.4         |       |
| Finance  expense                                                                                    |       | (55.6        | )          | (54.9        | )          | (12.2        | )          |
| Unrealized  gain on financial instruments                                                           |       | 14.6         |       | 4.9          |       | 39.2         |       |
| Realized  (loss)/gain on financial instruments                                                      |       | (9.1         | )          | 2.1          |       | (8.7         | )          |
| Profit on  disposal of property, plant and equipment                                                |       | 3.7          |       | 0.8          |       | 0.3          |       |
| Profit on  disposal of listed investments                                                           |       | 6.3          |       | 8.1          |       | 13.9         |       |
| Profit on  disposal of exploration rights                                                           |       | —       |       | 7.5          |       | —       |       |
| Profit on  disposal of mineral rights                                                               |       | —       |       | —       |       | 27.1         |       |
| Write-down of  investments                                                                          |       | —       |       | (7.7         | )          | —       |       |
| Write-down of  mineral rights                                                                       |       | —       |       | —       |       | (3.6         | )          |
| Other  (expenses)/income                                                                            |       | (16.5        | )          | (6.0         | )          | 1.8          |       |
|                                                                                                |       | (29.8        | )          | (16.0        | )          | 77.2         |       |
| **INCOME/(LOSS) BEFORE TAX,  SHARE OF EQUITY INVESTEES’ LOSSES AND MINORITY INTERESTS**        |       | 271.5        |       | (285.6       | )          | 82.9         |       |
| Income and  mining tax (expense)/benefit                                                            |       | (97.3        | )          | 100.4        |       | (11.8        | )          |
| **INCOME/(LOSS) BEFORE  SHARE OF EQUITY INVESTEES’ LOSSES AND MINORITY INTERESTS**             |       | 174.2        |       | (185.2       | )          | 71.1         |       |
| Share of  equity investees’ losses                                                             |       | (5.9         | )          | (0.4         | )          | (0.4         | )          |
| Minority  interests                                                                                 |       | (29.8        | )          | (20.6        | )          | (21.8        | )          |
| **NET INCOME/(LOSS)**                                                                               |       | 138.5        |       | (206.2       | )          | 48.9         |       |
| **BASIC EARNINGS/(LOSS) PER  SHARE ($)**                                                            |       | 0.28         |       | (0.42        | )          | 0.10         |       |
| **DILUTED EARNINGS/(LOSS)  PER SHARE ($)**                                                          |       | 0.28         |       | (0.42        | )          | 0.10         |       |
| **WEIGHTED AVERAGE NUMBER  OF SHARES USED IN THE COMPUTATION OF BASIC EARNINGS/(LOSS) PER SHARE**   |       | 492,922,941  |       | 491,987,508  |       | 485,020,966  |       |
| **WEIGHTED AVERAGE NUMBER  OF SHARES USED IN THE COMPUTATION OF DILUTED EARNINGS/(LOSS) PER SHARE** |       | 496,240,970  |       | 493,690,893  |       | 487,698,431  |       |
| **DIVIDEND PER SHARE ($)**                                                                          |       | 0.13         |       | 0.11         |       | 0.19         |       |

 

The accompanying notes are an integral part of these consolidated financial statements

F-2

----

**Gold Fields LimitedConsolidated Balance SheetsAs of June 30,($ in millions unless otherwise noted)**

| ** **                                                                                                                                                             | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                                                                                                                             | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **ASSETS**                                                                                                                                                             | ** ** | ** **   | ** ** | ** **   | ** ** |
| **CURRENT ASSETS**                                                                                                                                                     | ** ** | ** **   | ** ** | ** **   | ** ** |
| Cash and cash  equivalents                                                                                                                                             |       | 217.7        |       | 503.7        |       |
| Current portion  of financial instruments                                                                                                                              |       | 30.4         |       | 46.8         |       |
| Receivables                                                                                                                                                            |       | 148.7        |       | 119.9        |       |
| Inventories                                                                                                                                                            |       | 111.3        |       | 77.4         |       |
| Materials  contained in heap leach pads                                                                                                                                |       | 47.7         |       | 55.1         |       |
| **Total current assets**                                                                                                                                               |       | 555.8        |       | 802.9        |       |
| Property, plant and equipment, net                                                                                                                                     |       | 3,018.5      |       | 2,554.1      |       |
| Non-current  portion of financial instruments                                                                                                                          |       | —       |       | 32.4         |       |
| Non-current  investments                                                                                                                                               |       | 396.9        |       | 203.5        |       |
| **TOTAL ASSETS**                                                                                                                                                       |       | 3,971.2      |       | 3,592.9      |       |
| **LIABILITIES  AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES**                                                                                                     | ** ** | ** **   | ** ** | ** **   | ** ** |
| Accounts payable  and provisions                                                                                                                                       |       | 299.9        |       | 241.9        |       |
| Interest payable                                                                                                                                                       |       | 29.8         |       | 32.6         |       |
| Income and mining  taxes payable                                                                                                                                       |       | 46.8         |       | 18.0         |       |
| Current portion  of long-term loans                                                                                                                                    |       | 0.3          |       | —       |       |
| **Total current liabilities**                                                                                                                                          |       | 376.8        |       | 292.5        |       |
| Long-term loans                                                                                                                                                        |       | 737.9        |       | 653.1        |       |
| Deferred income  and mining taxes                                                                                                                                      |       | 721.8        |       | 596.2        |       |
| Provision for  environmental rehabilitation                                                                                                                            |       | 146.4        |       | 134.6        |       |
| Provision for  post-retirement health care costs                                                                                                                       |       | 7.4          |       | 9.0          |       |
| **Total liabilities**                                                                                                                                                  |       | 1,990.3      |       | 1,685.4      |       |
| **COMMITMENTS  AND CONTINGENCIES—see notes 19 and 20**                                                                                                            | ** ** | ** **   | ** ** | ** **   | ** ** |
| Minority  interests’                                                                                                                                              |       | 125.1        |       | 118.4        |       |
| **SHAREHOLDERS’ EQUITY**                                                                                                                                          | ** ** | ** **   | ** ** | ** **   | ** ** |
| Share  capital—1,000,000,000 (2005: 1,000,000,000) authorized ordinary shares of 50  South African cents each. Shares issued—494 824 723 (2005: 492 294 226) |       | 43.9         |       | 43.7         |       |
| Additional  paid-in capital                                                                                                                                            |       | 1,827.6      |       | 1,797.9      |       |
| Retained  earnings/(deficit)                                                                                                                                           |       | 27.6         |       | (49.1        | )          |
| Accumulated other  comprehensive loss                                                                                                                                  |       | (43.3        | )          | (3.4         | )          |
| **Total shareholders’ equity**                                                                                                                                    |       | 1,855.8      |       | 1,789.1      |       |
| **TOTAL  LIABILITIES AND SHAREHOLDERS’ EQUITY**                                                                                                                   |       | 3,971.2      |       | 3,592.9      |       |

 

The accompanying notes are an integral part of these consolidated financial statements

F-3

----

**Gold Fields LimitedConsolidated Statements of Changes in Shareholders’ EquityFor the years ended June 30,($ in millions unless otherwise noted)**

| ** **                                                       | ** ** | **Number of  ordinary shares  issued** | ** **  | **Share capital** | ** ** | **Additional  paid-in capital** | ** ** | **Retained  earnings/  (deficit)** | ** ** | **Accumulated  other  comprehensive  loss** | ** ** | **Total**    | ** ** |
|------------------------------------------------------------------|------------|--------------------------------------------------|-------------|------------------------|------------|--------------------------------------|------------|------------------------------------|------------|---------------------------------------------|------------|--------------|------------|
| ** **                                                       | ** ** | ** **                                       | ** **  | **$ ‘m**     | ** ** | **$’m**                         | ** ** | **$’m**                       | ** ** | **$’m**                                | ** ** | **$’m** | ** ** |
| **BALANCE—JUNE 30,  2003**                             |       |                                             | 472,364,872 |                   |       |                                 | 42.2       |                               |       |                                        | 1,565.2    |         |       |   | 255.3 |   |   |   | (243.4 | ) |   | 1,619.3 |   |
| Net income                                                       |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | 48.9 |   |   |   | — |   |   | 48.9 |   |
| Dividends declared                                               |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | (92.6 | ) |   |   | — |   |   | (92.6 | ) |
| Employee share  plans and exercise of employee equity securities |       |                                             | 1,300,977   |                   |       |                                 | 0.1        |                               |       |                                        | 3.7        |         |       |   | — |   |   |   | — |   |   | 3.8 |   |
| Proceeds from  private capital raising                           |       |                                             | 17,250,000  |                   |       |                                 | 1.3        |                               |       |                                        | 214.6      |         |       |   | — |   |   |   | — |   |   | 215.9 |   |
| Shares issued  relating to the acquisition of APP                |       |                                             | 564,841     |                   |       |                                 | —     |                               |       |                                        | 8.7        |         |       |   | — |   |   |   | — |   |   | 8.7 |   |
| Mark-to-market of  listed investments                            |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | — |   |   |   | (5.1 | ) |   | (5.1 | ) |
| Realized gain on  disposal of listed investments            |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | — |   |   |   | (12.3 | ) |   | (12.3 | ) |
| Other                                                            |       |                                             | 11,830      |                   |       |                                 | —     |                               |       |                                        | 0.1        |         |       |   | — |   |   |   | — |   |   | 0.1 |   |
| Foreign exchange  translation                                    |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | — |   |   |   | 230.4 |   |   | 230.4 |   |
| **BALANCE—JUNE 30,  2004**                             |       |                                             | 491,492,520 |                   |       |                                 | 43.6       |                               |       |                                        | 1,792.3    |         |       |   | 211.6 |   |   |   | (30.4 | ) |   | 2,017.1 |   |
| Net loss                                                         |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | (206.2 | ) |   |   | — |   |   | (206.2 | ) |
| Dividends declared                                               |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | (54.5 | ) |   |   | — |   |   | (54.5 | ) |
| Exercise of  employee equity securities                          |       |                                             | 801,706     |                   |       |                                 | 0.1        |                               |       |                                        | 5.6        |         |       |   | — |   |   |   | — |   |   | 5.7 |   |
| Write down of  investments                                       |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | — |   |   |   | 7.7 |   |   | 7.7 |   |
| Mark-to-market of  listed investments                            |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | — |   |   |   | 9.0 |   |   | 9.0 |   |
| Realized loss on  disposal of listed investments            |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | — |   |   |   | 1.5 |   |   | 1.5 |   |
| Foreign exchange  translation                                    |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | — |   |   |   | 8.8 |   |   | 8.8 |   |
| **BALANCE—JUNE 30,  2005**                             |       |                                             | 492,294,226 |                   |       |                                 | 43.7       |                               |       |                                        | 1,797.9    |         |       |   | (49.1 | ) |   |   | (3.4 | ) |   | 1,789.1 |   |
| Net income                                                       |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | 138.5 |   |   |   | — |   |   | 138.5 |   |
| Dividends declared                                               |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | (61.8 | ) |   |   | — |   |   | (61.8 | ) |
| Shares repurchased  and  cancelled                               |       |                                             | (1,000,000  | )                      |       |                                 | (0.1       | )                                  |       |                                        | (11.6      | )            |       |   | — |   |   |   | — |   |   | (11.7 | ) |
| Employee share  plans and exercise of employee equity securities |       |                                             | 3,530,497   |                   |       |                                 | 0.3        |                               |       |                                        | 41.3       |         |       |   | — |   |   |   | — |   |   | 41.6 |   |
| Mark-to-market of  listed investments                            |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | — |   |   |   | 67.9 |   |   | 67.9 |   |
| Realized gain on  disposal of listed investments            |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | — |   |   |   | (0.5 | ) |   | (0.5 | ) |
| Foreign exchange  translation                                    |       |                                             | —      |                   |       |                                 | —     |                               |       |                                        | —     |         |       |   | — |   |   |   | (107.3 | ) |   | (107.3 | ) |
| **BALANCE—JUNE 30,  2006**                             |       |                                             | 494,824,723 |                   |       |                                 | 43.9       |                               |       |                                        | 1,827.6    |         |       |   | 27.6 |   |   |   | (43.3 | ) |   | 1,855.8 |   |

 

The accompanying notes are an integral part of these consolidated financial statements

F-4

----

**Gold Fields LimitedConsolidated Statements of Cash FlowsFor the years ended June 30,($ in millions unless otherwise noted)**

| ** **                                                          | ** ** | **2006**     | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|---------------------------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                                          | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **CASH FLOWS FROM OPERATIONS**                                      | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Net income/(loss)                                                   |       | 138.5        |       | (206.2       | )          | 48.9         |       |
| Reconciled to net cash provided by operations:                      |       |         |       |         |       |         |       |
| Minority interests                                                  |       | 29.8         |       | 20.6         |       | 21.8         |       |
| Share of equity  investees’ losses                             |       | 5.9          |       | 0.4          |       | 0.4          |       |
| Income and mining  tax expense                                      |       | 97.3         |       | (100.4       | )          | 11.8         |       |
| Impairment of  assets                                               |       | —       |       | 233.1        |       | 72.7         |       |
| Profit on sale of  listed investments                               |       | (6.3         | )          | (8.1         | )          | (13.9        | )          |
| Depreciation and  amortization                                      |       | 269.2        |       | 274.5        |       | 198.6        |       |
| Write-down of  mineral rights                                       |       | —       |       | —       |       | 3.6          |       |
| Write-down of  investments                                          |       | —       |       | 7.7          |       | —       |       |
| Impairment of  critical spares                                      |       | —       |       | 2.8          |       | —       |       |
| Profit on sale of  mineral rights                                   |       | —       |       | —       |       | (27.1        | )          |
| Profit on sale of  property, plant and equipment                    |       | (3.7         | )          | (0.8         | )          | (0.3         | )          |
| Profit on disposal  of exploration rights                           |       | —       |       | (7.5         | )          | —       |       |
| Exchange rate  difference                                           |       | —       |       | —       |       | (35.5        | )          |
| Share-based  compensation                                           |       | 11.5         |       | 2.1          |       | —       |       |
| Unrealized gains  on loans                                          |       | —       |       | —       |       | (3.6         | )          |
| Unrealized gains  on financial instruments                          |       | (14.6        | )          | (4.9         | )          | (39.2        | )          |
| Accretion expense  on environmental rehabilitation                  |       | 8.6          |       | 11.5         |       | 8.4          |       |
| Decrease in  provision for post-retirement health care costs        |       | (0.5         | )          | (4.2         | )          | (5.2         | )          |
| Payment against  post-retirement health care provision              |       | (0.3         | )          | (5.3         | )          | (4.5         | )          |
| Other                                                               |       | 7.9          |       | (7.4         | )          | (4.8         | )          |
| Effect of changes in operating working capital items:               |       |         |       |         |       |         |       |
| Receivables                                                         |       | (60.6        | )          | 30.7         |       | (25.6        |       |
| Inventories and  heap leach pads                                    |       | (24.1        | )          | (26.5        | )          | 10.7         | )          |
| Accounts payable  and provisions                                    |       | 61.6         |       | 8.2          |       | 56.9         |       |
| Income and mining  taxes paid                                       |       | (54.8        | )          | (38.4        | )          | (75.7        | )          |
| **NET CASH  PROVIDED BY OPERATIONS**                                |       | 465.4        |       | 181.9        |       | 198.4        |       |
| **CASH FLOWS FROM INVESTING ACTIVITIES**                            | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Additions to  property, plant and equipment                         |       | (255.4       | )          | (317.7       | )          | (377.9       | )          |
| Proceeds on  disposal of property, plant and equipment              |       | 6.3          |       | 10.2         |       | 56.8         |       |
| Proceeds on sale  of listed investments                             |       | 2.8          |       | 18.6         |       | 29.3         |       |
| Proceeds on  disposal of exploration rights                         |       | —       |       | 7.5          |       | —       |       |
| Acquisition of  subsidiaries                                        |       | (415.6       | )          | —       |       | (23.0        | )          |
| Purchase of  investments                                            |       | (163.5       | )          | (30.4        | )          | (79.4        | )          |
| Investment in  environmental trust fund                             |       | (11.0        | )          | (6.5         | )          | (6.0         | )          |
| **NET CASH  UTILIZED IN INVESTING ACTIVITIES**                      |       | (836.4       | )          | (318.3       | )          | (400.2       | )          |
| **CASH FLOWS FROM FINANCING ACTIVITIES**                            | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Long and  short-term loans raised                                   |       | 158.0        |       | 2.7          |       | 586.7        |       |
| Long and  short-term loans repaid                                   |       | —       |       | —       |       | (40.7        | )          |
| Proceeds on close  out of interest rate swap                        |       | —       |       | 36.2         |       | —       |       |
| Decrease/(increase)  in minority funding                            |       | (23.0        | )          | 17.9         |       | 9.1          |       |
| Dividends paid to  Company shareholders                             |       | (61.8        | )          | (54.5        | )          | (92.6        | )          |
| Dividends paid to  minority shareholders                            |       | (13.0        | )          | (17.3        | )          | —       |       |
| Ordinary shares  repurchased and cancelled                          |       | (11.7        | )          | —       |       | —       |       |
| Ordinary shares  issued                                             |       | 30.1         |       | 3.6          |       | 219.7        |       |
| **NET CASH  PROVIDED BY/(UTILIZED IN) FINANCING ACTIVITIES**        |       | 78.6         |       | (11.4        | )          | 682.2        |       |
| **EFFECT OF  EXCHANGE RATE MOVEMENTS ON CASH AND CASH EQUIVALENTS** |       | 6.4          |       | (4.8         | )          | 42.3         |       |
| **NET  (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS**           |       | (286.0       | )          | (152.6       | )          | 522.7        |       |
| **CASH AND  CASH EQUIVALENTS—JULY 1**                     |       | 503.7        |       | 656.3        |       | 133.6        |       |
| **CASH AND  CASH EQUIVALENTS—JUNE 30**                    |       | 217.7        |       | 503.7        |       | 656.3        |       |

 

The principal non-cash transactions are the issue ofshares as consideration for business acquisitions and the mark-to-market ofcertain listed investments. See notes 3 and 11.

The accompanying notes are an integral part of these consolidated financial statements

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**Gold Fields LimitedConsolidated Statements of Comprehensive IncomeFor the years ended June 30,($ in millions unless otherwise noted)**

| ** **                                               | ** ** | **2006**     | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|----------------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                               | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **Net  income/(loss)**                                   |       | 138.5        |       | (206.2       | )          | 48.9         |       |
| **Other  comprehensive (loss)/income**                   |       |         |       |         |       |         |       |
| Write down of  investments                               |       | —       |       | 7.7          |       | —       |       |
| Unrealized  holding gains/(losses) on listed investments |       | 67.9         |       | 9.0          |       | (5.1         | )          |
| Realized (gain)/loss  on disposal of listed investments  |       | (0.5         | )          | 1.5          |       | (12.3        | )          |
| Foreign currency  translation adjustment                 |       | (107.3       | )          | 8.8          |       | 230.4        |       |
| **Other  comprehensive (loss)/income**                   |       | (39.9        | )          | 27.0         |       | 213.0        |       |
| **Comprehensive income/(loss)**                          |       | 98.6         |       | (179.2       | )          | 261.9        |       |

 

The accompanying notes are an integral part of these consolidated financial statements

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**Gold Fields LimitedNotes to the Consolidated Financial Statements($ in millions unless otherwise noted)**

**1       GENERAL**

Gold Fields Limited(formerly Driefontein Consolidated Limited (“Driefontein”), the “Company” orthe “Group”) was originally incorporated in South Africa and listed on the JSESecurities Exchange S.A. (“JSE”) during 1968 as East Driefontein Gold MiningCompany Limited. Following a merger with West Driefontein Gold Mining CompanyLimited, it was renamed Driefontein on June 15, 1981. On May 10, 1999,Driefontein completed a business combination, with another South Africancompany listed on the JSE, Gold Fields Limited (“Old Gold Fields”). Old GoldFields evolved through a series of transactions in 1998, whereby it acquiredsubstantially all of the gold mining assets and interests previously held byGold Fields of South Africa Limited, Gencor Limited, New Wits Limited andcertain other shareholders in the companies owning the assets and interests.These assets and interests included publicly traded gold mining companies,mineral rights and service agreements. Driefontein, the surviving entity, wasrenamed Gold Fields Limited, and Old Gold Fields was renamed GFL MiningServices Limited, effective from that date. The Company is engaged in goldmining and related activities, including exploration, extraction, processingand smelting. Gold bullion, the Company’s principal product, is currentlyproduced in South Africa, Ghana, Australia and in Venezuela from fiscal 2006and sold in South Africa (primarily to the Rand Refinery) and internationally.

**2       SIGNIFICANT ACCOUNTING POLICIES**

(a)**   USE OF ESTIMATES:****  **Thepreparation of the consolidated financial statements in conformity with UnitedStates generally accepted accounting principles (“US GAAP”) requires the Company’smanagement to make estimates and assumptions about current and future eventsthat affect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financial statements, andthe reported amounts of revenues and expenses during the reporting period.Future events and their effects cannot be determined with absolute certainty.Therefore, the determination of estimates requires the exercise of judgmentbased on various assumptions and other factors such as historical experience,current and expected economic conditions, and in some cases actuarialtechniques. Actual results ultimately may differ from those estimates.

The more significant areas requiring the use ofmanagement estimates and assumptions relate to mineral reserves that are thebasis of future cash flow estimates and unit-of-production depreciation,depletion and amortization calculations; environmental, reclamation and closureobligations; estimates of recoverable gold and other materials in heap leachpads; asset impairments (including impairments of goodwill, long-lived assets,and investments); write-downs of inventory to net realizable value; postemployment, post retirement and other employee benefit liabilities (includingvaluation of share-based compensation); valuation allowances for deferred taxassets; reserves for contingencies and litigation; and the fair value andaccounting treatment of financial instruments.

The following are accounting policies used by theCompany which, except as described in note 2 (p) (iii) below, havebeen consistently applied for all periods presented:

(b)**   CONSOLIDATION:**   The Group’s financial statementsinclude the financial statements of the Company, and its subsidiaries, and itsinvestments in associates. A company in which the Group has, directly orindirectly, through subsidiary undertakings, a controlling interest isclassified as a subsidiary undertaking. In addition, the Company reviews itsrelationships with other entities to assess if the 

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Company is the primary beneficiary of a variableinterest entity. If the determination is made that the Company is the primarybeneficiary, then that entity is consolidated from the date that the Companywas deemed to have become the primary beneficiary. The results of subsidiariesacquired or disposed of are included in the Group statements from the effectivedates of acquisition or excluded from such statements as from the effectivedates of disposal. Investments in companies, which the Company does notcontrol, but has the ability to exercise significant influence over theiroperating and financial policies, are accounted for by the equity method.

Any excess between the purchase price and the fairvalue of the attributable net assets of subsidiaries and associates at the dateof acquisition is capitalized as goodwill and not amortized; however it issubject to an annual assessment for impairment.

Inter—company transactions and balances are eliminatedon consolidation.

(c)**   (i)  **FOREIGNCURRENCY TRANSACTIONS:**  **Foreigncurrency transactions are recorded at the prevailing exchange rate at the dateof the transaction. Monetary assets and liabilities designated in foreigncurrencies are translated at the exchange rate ruling at year-end. Gains andlosses arising from these translations are recognized in earnings.

(ii)   **FOREIGN ENTITIES:  **The Group’s foreignentities are regarded as those entities that are considered to beself-sustaining. The balance sheet and statements of operations of foreignsubsidiaries are translated on the following basis:

Assets and liabilities are translated at theprevailing exchange rate at year-end. Statement of operations items aretranslated at the average exchange rate for the year. Exchange differences ontranslation are accounted for in shareholders’ equity. These differences willbe recognized in earnings upon realization of the underlying foreign entity.

(iii)   **FUNCTIONAL CURRENCY:  **The functionalcurrencies of the Group’s South African operations are the South African Rand,Australian operations, the Australian dollar, the Ghanaian operations and theCerro Corona project in Peru, the U.S. dollar and the Venezuelan operation,Venezuelan Bolivars. The translation differences arising as a result ofconverting the South African Rand and the Australian dollar to U.S. dollars(reporting currency) using the current exchange rate method are included as aseparate component of shareholders’ equity.

(d)**   PROPERTY, PLANT AND EQUIPMENT**

(i)   **MINING ASSETS:****  **Mining assets, including minedevelopment costs and mine plant facilities, are recorded at cost.

Once an economically feasible orebody with proven andprobable ore reserves has been established, expenditure incurred to furtherdevelop the orebody, to further define mineralization in the orebody, and toestablish or expand productive capacity, are capitalized until more than deminimus saleable minerals are extracted from the mine , at which time the costsare amortized as set out below. Development of orebodies includes thedevelopment of shaft systems and waste rock removal. These costs arecapitalized until the reef horizons are intersected and more than de minimussaleable minerals are extracted from the mine . Access to the individualorebodies exploited by the Company is limited to the time span of the Company’srespective mining leases. Mine development costs in the ordinary course tomaintain production are expensed as incurred.

Borrowing costs incurred in respect of assetsrequiring a substantial period of time to prepare for their intended future useare capitalized to the date on which the assets are substantially completed andready for their intended use.

(ii)   **LAND:****  **Land is shown at cost and is notdepreciated.

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(iii)   **MINERALINTERESTS:****  **Mineralinterests represent mineral and surface use rights for parcels of land owned bythe Company. Mineral interests and other tangible assets include acquiredmineral use rights in production, development and exploration stage properties.The amount capitalized related to mineral interests represents its fair valueat the time it was acquired, either as an individual asset purchase or as partof a business combination.

*Productionstage*mineral interests represents mineral interestsin operating properties that contain proven and probable reserves. *Development stage*mineral interestsrepresent interests in properties under development that contain proven andprobable reserves. *Exploration stage*mineralinterests represent interests in properties that are believed to potentiallycontain (i) *other mineralized material*suchas inferred material within pits, measured, indicated and inferred materialwith insufficient drill spacing to qualify as proven and probable reserves; andinferred material in close proximity to proven and probable reserves; (ii) *around-mine exploration potential*such asinferred material not immediately adjacent to existing reserves andmineralization but located within the immediate mine infrastructure; (iii) *other mine-related exploration*potentialthat is not part of measured, indicated or inferred material and is comprisedmainly of material outside of the immediate mine area; or (iv) *greenfield exploration potential*that isnot associated with any other *production,development or exploration stage*property as described above. TheCompany’s mineral use rights are enforceable regardless of whether proven orprobable reserves have been established. In certain limited situations, thenature of a use right changes from an exploration right to mining right uponthe establishment of proven and probable reserves. The Company has the abilityand intent to renew mineral use rights where the existing term is not sufficientto recover all identified and valued proven and probable reserves and /orundeveloped mineral interests.

On April 30, 2004 the Financial AccountingStandard Board (“FASB”) amended Statements of Financial Accounting Standards (“SFAS”)No. 141, “Business combinations” (“SFAS” No. 141”) and SFAS No. 142,“Goodwill and other Intangible Assets” (“SFAS No. 142”) to provide thatcertain mineral use rights are considered tangible assets and that mineral userights should be accounted for based on their substance.

(iv)   **AMORTIZATION ANDDEPRECIATION OF MINING ASSETS:****  **Miningassets, mine development and evaluation costs, and mine plant facilities areamortized over the life of mine using the units-of-production method, based onestimated above infrastructure proven and probable ore reserves. Proven andprobable ore reserves reflect estimated quantities of economically recoverablereserves, which can be recovered in future from known mineral deposits.

(v)   **AMORTIZATION OF MINERAL INTERESTS:****  **Mineral interests associated withproduction stage mineral interests are amortized over the life-of-mine usingthe units-of-production method in order to match the amortization with theexpected underlying future cash flows. Mineral interests associated withdevelopment and exploration stage mineral interests are not amortized untilsuch time as the underlying property is converted to the production stage.

(vi)   **DEPRECIATION OFNON-MINING ASSETS:****  **Othernon-mining assets are recorded at cost and depreciated on a straight-line basisover their expected useful lives as follows:

| Vehicles                |   | - |   | 20.0 | % |
|-------------------------|--------|---|--------|------|---|
| Computers               |   | - |   | 33.3 | % |
| Furniture and Equipment |   | - |   | 10.0 | % |

 

(vii)   **MININGEXPLORATION:****  **Expenditureon exploration activities incurred prior to the completion of a finalfeasibility study to establish proven and probable reserves is charged againstincome.

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(viii)   **IMPAIRMENT:**   TheGroup reviews and tests the carrying amounts of long-lived assets, whichinclude development costs, when events or changes in circumstances suggest thatthe carrying amount may not be recoverable. For impairment purposes, assets aregrouped at the lowest level for which identifiable cash flows are largelyindependent of the cash flows of other assets and liabilities. The lowest levelat which such cash flows are generated are generally at an individual operatingmine, even if the individual operating mine is included in a larger minecomplex.

If there areindications that an impairment may have occurred, the Group prepares estimatesof expected future cash flows for each group of assets. Expected future cashflows are based on a probability-weighted approach applied to potentialoutcomes and reflect:

·  Estimated sales proceeds from the productionand sale of recoverable ounces of gold contained in proven and probablereserves;

·  Expected gold prices and currency exchangerates (considering historical and current prices, price trends and relatedfactors). In impairment assessments conducted in 2005, the Group used anexpected future market gold price of $420 per ounce, and expected future marketexchange rates of R7.50 to $1.00 and A$1.510 to $1.00;

·  Expected future operating costs and capitalexpenditures to produce proven and probable gold reserves based on approvedlife-of-mine plans that assume current plant capacity, but exclude the impactof inflation; and

·  Expected cash flows associated with valuebeyond proven and probable reserves, which includes the expected cash outflowsrequired to develop and extract the value beyond proven and probable reserves.

The Group records a reduction of a group of assets tofair value as a charge to earnings if expected future cash flows are less thanthe carrying amount. The Group estimates fair value by discounting the expectedfuture cash flows using a discount factor that reflects the risk-free rate ofinterest for a term consistent with the period of expected cash flows.

Management’s estimate of future cash flows is subjectto risk and uncertainties. It is therefore reasonably possible that changescould occur which may affect the recoverability of the Group’s mining assets.

(ix)**   LEASES:****  **Operating leases are charged againstincome as incurred.

(e)**   DEFERRED TAXATION:****  **Deferredtaxation is calculated on the comprehensive basis using the balance sheetapproach. Deferred tax liabilities and assets are recognized by applyingexpected tax rates to the temporary differences existing at each balance sheetdate between the tax values and their carrying amounts. These temporarydifferences are expected to result in taxable or deductible amounts indetermining taxable profits for future periods when the carrying amount of theasset is recovered or the liability is settled. The effect on deferred tax ofany changes in tax rates is recognized in the income statement during theperiod in which the change occurs.

The principal temporary differences arise fromdepreciation on property, plant and equipment, provisions and tax losses carriedforward. A valuation allowance is recorded to reduce the carrying amounts ofdeferred tax assets if it is more likely than not that such assets will not berealized.

(f)**   NON-CURRENT INVESTMENTS:****  **Non-current investments comprise (i) investmentsin listed companies which are classified as available-for-sale and areaccounted for at fair value, with unrealized holding gains and losses excludedfrom earnings and reported as a separate component of shareholders’ equity; and(ii) investments in unlisted companies for which a fair value is notreadily determinable, and are accounted for at cost. Realized gains and lossesare included in the determination of net income or loss.

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Unrealized losses are included in the determination ofnet income or loss where it is determined that a decline, other than atemporary decline, in the value of the investment has occurred.

(g)**   MATERIALS CONTAINED IN HEAP LEACH PADS:****  **The recovery of gold from certainoxide ores is best achieved through the heap leaching process. Under thismethod, ore is placed on leach pads where it is permeated with a chemicalsolution, which dissolves the gold contained in the ore. The resulting “pregnant”solution is further processed in a leach plant where the gold in solution isrecovered. For accounting purposes, value is added to leach pads based oncurrent mining costs, including applicable depreciation and amortizationrelating to mining operations. Value is removed from the leach pad as ouncesare recovered in circuit at the leach plant based on the average cost perrecoverable ounce of gold on the leach pad.

The engineering estimates of recoverable gold on theheap leach pads are calculated from quantities of ore placed on the pads(measured tonnes added to the leach pads), the grade of ore placed on the leachpads (based on assay data) and a recovery percentage (based on the leachprocess and the ore type). In general, the leach pad production cycles projectrecoveries of approximately 50% to 70% of the placed recoverable ounces in thefirst year of leaching, declining each year thereafter until the leachingprocess is completed.

Although the quantities of recoverable gold placed onthe leach pads are reconciled by comparing the grades of ore placed on the padsto the quantities of gold actually recovered (metallurgical balancing), thenature of the leaching process inherently limits the ability to preciselymonitor inventory levels. As a result, the metallurgical balancing process isconstantly monitored and engineering estimates are refined based on actualresults over time. Variations between actual and estimated quantities resultingfrom changes in assumptions and estimates that do not result in write-downs tonet realizable value are accounted for on a prospective basis. The ultimaterecovery of gold from the pad will not be known until the leaching process isterminated.

The current portion of leach pad inventories isdetermined based on engineering estimates of the quantities of gold at thebalance sheet date that are expected to be recovered during the next twelvemonths.

(h)**   INVENTORIES****:  **Inventories are valued atthe lower of cost or net realizable value. The Company’s inventories compriseconsumable stores, gold-in-process, gold bullion, ore stockpiles and mineralrights and are accounted for as follows:

**Consumablestores:****  **Consumablestores are valued at average cost, after appropriate provision for surplus andslow moving items.

**Goldin process:****  **Goldin-process inventories represent materials that are currently in the process ofbeing converted to a saleable product. Conversion processes vary depending onthe nature of the ore and the specific mining operation, but include millin-circuit, leach in-circuit, flotation and column cells, and carbon in-pulpinventories. In-process material is measured based on assays of the materialfed to process and the projected recoveries of the respective plants.In-process inventories are valued at the average cost of the material fed toprocess attributable to the source material coming from the mine, stockpile orleach pad plus the in-process conversion costs, including applicabledepreciation relating to the process facility, incurred to that point in theprocess.

**Goldbullion:****  **Goldbullion inventories represent saleable gold ore or gold bullion and are valuedat the average cost of the respective in-process inventories incurred prior tothe refining process, plus refining costs.

**Stockpiles:****  **Stockpiles represent coarse ore thathas been extracted from the mine that is available for further processing. Stockpilesare measured by estimating the number of tonnes (via truck counts 

F-11

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and/or in-pit surveys of the ore before stockpiling)added and removed from the stockpile, the number of contained ounces (based onassay data) and the recovery percentage (based on the process for which the oreis destined). Stockpile tonnages are verified by periodic surveys. Stockpilesare valued based on mining costs incurred up to the point of stockpiling theore, including applicable depreciation and amortization relating to miningoperations. Value is added to a stockpile based on the current mining cost pertonnes plus applicable depreciation and amortization and removed at the averagecost per recoverable ounce of gold in the stockpile.

**Mineralrights:****  **Mineralrights not linked to any specific operation are valued at the lower of cost andnet realizable value.

(i)**   FINANCIAL INSTRUMENTS:****  **Financial instruments carried on the balance sheetinclude cash and cash equivalents, investments, receivables, derivativefinancial instruments, accounts payable and accrued liabilities. The particularrecognition method for each financial instrument item is disclosed in itsrespective significant accounting policy description.

(j)**   HEDGING:**   The Company account for its hedgingactivities in accordance with SFAS No. 133, Accounting for DerivativeInstruments and Hedging Activities, (“SFAS No. 133”), as amended byStatements of Financial Accounting Standards 137, 138 and 149.

Under SFAS No. 133, all derivatives arerecognized on the balance sheet at their fair value, unless they meet thecriteria for the normal purchases normal sale exemption. On the date aderivative contract is entered into, the Company designates the derivative as (1) ahedge of the fair value of a recognized asset or liability (fair value hedge), (2) ahedge of a forecasted transaction (cash flow hedge), or (3) a hedge of anet investment in a foreign entity. Certain derivative transactions, whileproviding effective economic hedges under the Company’s risk managementpolicies, do not qualify for hedge accounting. Hedging activities are conductedin accordance with guidelines established by the Audit Committee which allowfor the use of various hedging instruments.

Changes in the fair value of a derivative that ishighly effective, and that is designated and qualifies as a fair value hedge,are recorded in earnings, along with the change in the fair value of the hedgedasset or liability that is attributable to the hedged risk.

Changes in the fair value of a derivative that is highlyeffective, and that is designated and qualifies as a cash flow hedge, arerecognized directly in shareholders’ equity. Amounts deferred in shareholders’equity are included in earnings in the same periods during which the hedgedfirm commitment or forecasted transaction affects earnings.

Recognition of derivatives which meet the criteria forthe normal purchases normal sales exception under SFAS No. 133 is deferreduntil settlement. Under these contracts, the Group must deliver a specifiedquantity of gold at a future date at a specified price to the contractedcounter-party.

Hedges of net investment in foreign entities areaccounted for similarly to cash flow hedges.

Changes in the fair value of derivatives that do notqualify for hedge accounting are recognized in the statement of operations,under the caption entitled gains and losses on financial instruments. The fairvalue recognized on the balance sheet is included under the caption financialinstruments.

The Group formally documents all relationships betweenhedging instruments and hedged items, as well as its risk management objectiveand strategy for undertaking various hedge transactions. This process includeslinking derivatives designed as hedges to specific assets and liabilities or tospecific firm commitments or forecasted transactions. The Group also formallyassesses, both at the hedge inception date and on an ongoing basis, whether thederivatives that are used in hedging transactions are highly effective inoffsetting changes in fair values or cash flows of hedged items.

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(k)**   CASH AND CASH EQUIVALENTS:****  **Cash and cash equivalents comprise cash on hand, demanddeposits and investments in money market instruments. These are all highlyliquid investments with a maturity of three months or less at the date ofpurchase.

The carrying amount of cash and cash equivalents isstated at cost which approximates fair value.

(l)**   TRADE RECEIVABLES:****  **Tradereceivables are carried at anticipated realizable value. Estimates are made fordoubtful debts based on a review of all outstanding amounts at year-end.Irrecoverable amounts are written off during the year in which they areidentified.

(m)**   PROVISIONS:****  **Provisionsare recognized when information is available prior to the issuance of thefinancial statements which indicates that it is probable that an asset has beenimpaired or a liability had been incurred at the date of the financialstatements and the amount can be reasonably estimated.

(n)**   REHABILITATION COSTS:****  **SFAS No. 143, Accounting for asset retirementobligations (“SFAS No. 143”) applies to legal obligations associated withthe retirement of a long-lived asset that result from the acquisition,construction, development and/or the normal operation of a long-lived asset.Under SFAS No. 143 the Company records the fair value of a liability foran asset retirement obligation in the period in which it is incurred. When theliability is initially recorded, the Company correspondingly capitalizes thecost by increasing the carrying value of the related long-lived asset. Overtime, the liability is increased (accretion) to reflect an interestelement considered in its initial measurement at fair value, and thecapitalized cost is amortized over the useful life of the related asset. Uponsettlement of the liability, the Company will record a gain or loss if theactual cost incurred differs from the liability recorded.

Environmental liabilities, other than rehabilitationcosts which relate to liabilities from specific events, are expensed asincurred.

(o)**   ENVIRONMENTAL TRUST FUNDS:****  **Contributions are made to the Group’s trust funds,created in accordance with statutory requirements, to fund the estimated costof pollution control, rehabilitation and mine closure at the end of the life ofthe Group’s South African mines. Contributions are determined on the basis ofthe estimated environmental obligation over the life of the mine. Income earnedon monies paid to environmental trust funds is accounted for as investmentincome. The funds contributed to the trusts plus growth in the trust funds areincluded under investments on the balance sheet.

(p)**   EMPLOYEE BENEFITS**

(i)**   PENSIONAND PROVIDENT FUNDS:****  **TheGroup operates a defined benefit pension plan and defined contributionretirement plan and contributes to a number of industry-based definedcontribution retirement plans. The retirement plans are funded by payments fromemployees and the Company.

The expected costs of the defined benefit pension planare assessed in accordance with the advice of independent actuaries. The costof experience adjustments or planned amendments is expensed to operations overthe expected average remaining service lives of the relevant employees. Anyshortfalls are funded either immediately or as increased employer contributionsto ensure the ongoing soundness of the fund.

Contributions to defined contribution funds are expensedto operations as incurred.

These funds are governed by the Pension Fund Act of1956 (as amended).

(ii)**   POST-RETIREMENTHEALTH CARE COSTS:****  **Medicalcoverage is provided through a number of schemes.

Post-retirement health care in respect of existing employeesis recognized as an expense over the remaining service lives of the relevantemployees.

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The Company has an obligation to provide medicalbenefits to certain of its pensioners and dependents of ex-employees. Theseliabilities are unfunded and have been provided in full, calculated on anactuarial basis. A significant portion of the pensioners and dependents wererecently bought out of the scheme.

Valuation of these obligations is carried out annuallyby independent actuaries using appropriate mortality tables, long-termestimates of increases in medical costs and appropriate discount rates.

(iii)**   SHARE-BASEDCOMPENSATION PLANS:****  **OnJuly 1, 2005, the Company adopted the fair value recognition provisions ofSFAS No. 123(R), Share-Based Payment (“FAS 123(R)”). Prior to July 1,2005, The Company had elected to follow Accounting Policies Board Opinion No. 25“Accounting for Stock Issued to Employees” (APB No. 25”) and its relatedinterpretations in accounting for its share option schemes. Under APB No. 25,because the exercise price of the Company’s and subsidiary’s employee stockoptions equaled the market price of the underlying share on the date of thegrant, no compensation expense was recognized in the Company’s financialstatements, other than on occasions where the terms of share option vestingschedules are modified or accelerated. In particular, during the year ended June 30,2005, as a result of the inability by participants to exercise their shareoptions during the period of the attempted Harmony hostile takeover bid, theCompany extended the exercise period of allocation options for certainemployees whose options would otherwise have expired by June 25, 2005. TheCompany accounted for the modification under the intrinsic value method with anew measurement date and, since the options were fully vested on themodification date, recorded the incremental compensation cost of $2.1 millionas an expense.

The Company adopted FAS 123(R) using the modifiedprospective transition method. Under this method, compensation cost recognizedin fiscal year ended June 30, 2006 includes: a) compensation cost for allshare-based payments granted prior to, but not yet vested as of July 1,2005, based on the grant-date fair value estimated in accordance with theoriginal provisions of FAS 123, and b) compensation cost for all share-basedpayments granted subsequent to June 30, 2005, based on the grant-date fairvalue estimated in accordance with the provisions of FAS 123(R). The resultsfor prior periods have not been restated.

As a result of adopting FAS 123(R), the Company’sIncome from continuing operations and Net income for fiscal 2006 is $11.5million lower ($0.02 per share, basic and diluted) than if we had continued toaccount for share-based compensation under APB 25 as we did in the comparableprior year periods.

Proforma information regarding net income and earnings per share is required bySFAS No. 123 “Accounting for Stock-Based Compensation.” This informationis required to be determined as if the Company had accounted for its employeestock options granted subsequent to December 31, 1995 under the fair valuemethod of that statement. The fair value of the options granted during 2005 and2004 reported below has been estimated at the date of grant using a Black-Scholesoption pricing model with the following weighted average assumptions:

| ** **                | ** ** | **2006** | ** ** | **2005**       | ** ** | **2004** | ** ** |
|---------------------------|------------|----------|------------|----------------|------------|----------|------------|
| Expected life (in  years) |       | 2.8 -5.6 |       | 3.0 – 6.0 |       | 6.0      |       |
| Risk free interest rate   |       | 7.32     | %          | 8.4            | %          | 8.4      | %          |
| Volatility                |       | 41.9     | %          | 35.0           | %          | 53.0     | %          |
| Dividend yield            |       | 1.5      | %          | 1.5            | %          | 2.4      | %          |

 

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The Black-Scholes option valuation model was developedfor use in estimating the fair value of traded options that have no vestingrestrictions and are fully transferable. In addition, option valuation modelsrequire the input of highly subjective assumptions, including the expectedstock price volatility and estimated forfeitures. The weighted averageestimated fair value of employee stock options granted during fiscal 2005, 2004and 2003 under the employee share option scheme was R25.66, R44.18 and R61.89per share, respectively.

For purposes of pro formadisclosure, the estimated fair value of the options is recognized as an expenseover the options’ vesting period. The Company’s pro forma information follows(millions except for per share information):

| ** **                                                        | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|-------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                        | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| (Loss)/income                                                     |       | (206.2       | )          | 48.9         |       |
| Add back:  Share-based compensation expense under APB No. 25 |       | 2.1          |       | —       |       |
| Less: Share-based  compensation expense under SFAS No. 123   |       | (15.4        | )          | (10.8        | )          |
| Pro forma  (loss)/income                                          |       | (219.5       | )          | 38.1         |       |
| Pro forma basic (loss)/earnings per share ($)                     |       | (0.45        | )          | 0.08         |       |
| Pro forma fully diluted  (loss)/earnings per share ($)            |       | (0.45        | )          | 0.08         |       |

 

The impact on pro forma net (loss)/income, pro formabasic (loss)/earnings per share and pro forma fully diluted (loss)/earnings pershare in the table above which shows the effect of recognizing share-basedcompensation expense using the fair value method rather than the intrinsicmethod, may not be indicative of the effect in future years. The Companycontinues to grant share options to certain employees. This policy may or maynot continue.

(q)**   REVENUE RECOGNITION:****  **Revenuearising from gold and by-product sales is recognized when the risks and rewardsof ownership and title pass to the buyer under the terms of the applicablecontract and the pricing is fixed and determinable. Sales revenue excludesvalue-added tax but includes the net profit and losses arising from hedgingtransactions from matched gold sales contracts, which are designated as normalsales contracts.

(r)**   DIVIDEND INCOME:****  **Dividendsare recognized when the right to receive payment is established.

(s)**   INTEREST INCOME:****  **Interestis recognized on a time proportion basis taking account of the principaloutstanding and the effective rate to maturity on the accrual basis.

(t)**   DIVIDENDS DECLARED:****  **Dividendsproposed and the related taxation thereon are recognized only when thedividends are declared. Dividends are payable in South African Rand.

(u)**   SEGMENT REPORTING:****  **TheGroup is a gold mining company operating geographically in South Africa, Ghana,Australia and Venezuela. The business segments comprise geographical operationsbased on locations and operating units.

(v)**   EARNINGS/(LOSS) PER SHARE**is calculated based on thenet income/(loss) divided by the weighted average number of common shares inissue during the year. Diluted earnings per share is presented when theinclusion of potential ordinary shares has a dilutive effect on earnings pershare.

F-15

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(w)**   RECENT ACCOUNTING PRONOUNCEMENTS:**

In June 2006, the Financial Accounting StandardsBoard (“FASB”) issued FASB Interpretation No. 48, “Accounting forUncertainty in Income Taxes,” (“FIN 48”) an interpretation of FASB Statement No. 109,“Accounting for Income Taxes.” FIN 48 prescribes a recognition threshold andmeasurement attribute for the financial statement recognition and measurementof a tax position taken or expected to be taken in a tax return. TheInterpretation requires that the Company recognize in the financial statements,the impact of a tax position, if that position is more likely than not of beingsustained on audit, based on the technical merits of the position. FIN 48 alsoprovides guidance on derecognition, classification, interest and penalties, anddisclosure. The provisions of FIN 48 are effective beginning July 1, 2007with the cumulative effect of the change in accounting principle recorded as anadjustment to the opening balance of retained earnings. The Company iscurrently evaluating the impact of adopting FIN 48 on its financial positionand results of operations.

In September 2006, the FASB issued FASB No. 157“Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value,establishes a framework for measuring fair value and expands disclosures aboutfair value measurements. SFAS 157 does not require any new fair valuemeasurements, it emphasizes that fair value is a market-based measurement (i.e.fair value should be based on the assumptions market participants would usewhen pricing the asset or liability, not an entity specific measurement). Insupport of this principle, the standard establishes a fair value hierarchy thatprioritizes the information used to develop those assumptions. The fair valuehierarchy gives the highest priority to quoted prices in active markets and thelowest priority to unobservable data, for example, the reporting entity’s owndata. SFAS applies for derivatives and other financial instruments measured atfair value under SFAS No. 133, “Derivative Financial Instruments” atinitial recognition and all subsequent periods. This statement is effective forthe Group from July 1, 2008. Management is currently evaluating the impactof SFAS 157 on the Group’s financial position and results of operations.

In September 2006, FASB issued SFAS No.158, “Employers’Accounting for Defined Benefit Pension and Other Postretirement Plans, anamendment of FASB Statements No. 87, 88, 106 and 132 (R)” (“SFAS 158”).Specifically, SFAS 158 requires an employer to: recognize in its statement offinancial position an asset for a plan’s overfunded status or a liability for aplan’s underfunded status; measure a plan’s assets and its obligations thatdetermine its funded status as of the end of the employer’s fiscal year (withlimited exceptions); and recognize changes in the funded status of a definedbenefit postretirement plan in the year in which the changes occur. Thosechanges will be reported in comprehensive income. The requirement to recognizethe funded status of a benefit plan and the disclosure requirements areeffective as of the end of the fiscal year ending after June 30, 2007. TheCompany has determined that the impact of adoption of SFAS 158 will not besignificant as its only defined benefit plan has an unfunded balance of $7.4million at June 30, 2006.

F-16

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In September 2006,FASB issued Staff Accounting Bulletin No. 108 (“SAB 108”). Theinterpretations in SAB 108 express the staff’s views regarding the process ofquantifying financial statement misstatements. The staff believes registrantsmust consider the impact of correcting all misstatements, including the effectof misstatements that were not corrected at the end of the prior year. Theseprior year misstatements should be considered in quantifying misstatements inthe current year financial statements. Thus, a registrant’s financialstatements would require adjustment when the assessment in the current year orin prior years’ results in qualifying a misstatement that is material, afterconsidering all relevant quantitative and qualitative factors. The Company willbe required to adopt SAB 108 on July 1, 2007, and is currently evaluatingthe impact of SAB 108 on its financial position and results of operations.

**3       ACQUISITION OF BUSINESSES**

(a)   **Acquisition of Bolivar Gold Corporation Inc.**

On February 28,2006, Gold Fields increased its voting interest in Bolivar Gold Corp.(“Bolivar”)to 100.0% by paying cash for this interest. The only substantial component ofBolivar’s underlying net asset value is its 95.0% ownership in Promotora Minerade Guayana (“PMG”). Bolivar owns the Choco 10 open pit gold mine in the ElCallao gold district of Bolivar state, Venezuela. As part of this acquisition,Gold Fields also acquired an option to acquire two other exploration propertiesin the region, Incredible 16 and Choco 6. The acquired business contributedrevenues of $16.9 million and net income of $3.2 million for the fiscal yearended June 30, 2006.

| ** **                                                  | ** ** | **2006**     | ** ** |
|-------------------------------------------------------------|------------|--------------|------------|
| ** **                                                  | ** ** | **$’m** | ** ** |
| Details of the net  assets acquired are as follows:         |       |         |       |
| Purchase  consideration                                     |       |         |       |
| —consideration  given                                  |       | 312.1        |       |
| —direct costs  relating to the acquisition             |       | 4.6          |       |
| —cash paid in  prior year for initial interest         |       | 11.9         |       |
| Total purchase  consideration                               |       | 328.6        |       |
| The fair value of  the assets and liabilities acquired are: |       |         |       |
| Property, plant  and equipment                              |       | 584.1        |       |
| Inventory                                                   |       | 5.3          |       |
| Trade and other  receivables                                |       | 9.0          |       |
| Cash and cash  equivalents                                  |       | 5.9          |       |
| Trade and other  payables                                   |       | (9.1         | )          |
| Deferred taxation                                           |       | (169.9       | )          |
| Long-term loans                                             |       | (74.2        | )          |
| Long-term  provisions                                       |       | (3.6         | )          |
| Net assets                                                  |       | 347.5        |       |
| Minority  shareholders’ interest (5.0%)                |       | (18.9        | )          |
| Fair value of the net  assets acquired                      |       | 328.6        |       |

 

Pursuant to an agreement reached on July 15, 2005between Bolivar Gold Corp (Bolivar), the previous holder of the interest in theChoco 10 concession, and CVG Ferrominera del Orinoco, C.A. (CVG), Bolivarincreased its interest in the Choco 10 mine from 70 per cent to 95 per cent. Inconsideration for such increased shareholding, Bolivar agreed to pay an amountof US$6 million to CVG payable in instalments. The Venezuelan Ministry of BasicIndustries and Mines (MIBAM), who was intimately involved in the negotiationand sign-off of the agreement, has not formally executed such agreement. Thisis mainly due to the fact that there have been several management changeswithin the MIBAM which have 

F-17

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delayed the process. Nevertheless, Gold Fields’counsel has indicated that from a legal perspective, the parties do not requirefurther authorisations from MIBAM and that Gold Fields validly owns a 95 percent interest in the Choco 10 mine. Certain procedural steps, including theformal transfer of shares to Gold Fields evidencing such ownership, areexpected to be commenced subsequent to June 30,2006.

(c)   **Acquisition of Sociedad Minera La Cima SA.**

On January 11,2006, the Group acquired 92% of the voting interest (80.7% of the economicinterest) in Sociedad Minera La Cima SA, which owns the Cerro Corona Projectand other mineral properties in the Cajamarca district in Northern Peru. Theacquisition is a project and therefore did not contribute revenue or net incometo the Group since its acquisition.

| ** **                                                  | ** ** | **2006**     | ** ** |
|-------------------------------------------------------------|------------|--------------|------------|
| ** **                                                  | ** ** | **$’m** | ** ** |
| Details of the net assets acquired are as follows:          | ** ** | ** **   | ** ** |
| Purchase consideration                                      |       | 40.5         |       |
| The fair value of the assets and liabilities  acquired are: |       |         |       |
| Property, plant  and equipment                              |       | 47.7         |       |
| Trade and other  receivables                                |       | 0.2          |       |
| Trade and other  payables                                   |       | (2.5         | )          |
| Cash and cash  equivalents                                  |       | (1.5         | )          |
| Net assets                                                  |       | 43.9         |       |
| Minority  shareholders’ interest (5.0%)                |       | (3.4         | )          |
| Fair value of the net  assets acquired                      |       | 40.5         |       |

 

(c)   **Acquisition of remaining 49% stake in Arctic Platinum Project**

The Company’sinvestment in the Arctic Platinum Project was achieved through an earn-inagreement with Outokumpu Mining Oy. The Arctic Platinum Project is anexploration project for platinum group metals and as such all contributions bythe Company to the project to date have been classified as explorationexpenditure and expensed as incurred. On September 11, 2003, the Companyexercised its rights of first refusal to acquire the remaining 49% stake in theArctic Platinum Project it did not already own for $31.7 million,consisting of $23 million in cash and Gold Fields ordinary shares worth$8.7 million. These costs have been capitalized as part of mineralinterests within property, plant and equipment.

(d)   **North American Palladium Limited**

On March 24, 2006,Gold Fields finalized an arrangement with North American Palladium Limited (“NAP”),whereby Gold Fields has granted an option to NAP to acquire up to 60% of theAPP in northern Finland. The arrangement became effective on April 13,2006. Gold Fields currently owns 100% of APP.

F-18

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**4       IMPAIRMENTOF ASSETS**

| ** **                                 | ** ** | **2006**     | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|--------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                 | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Beatrix North and  South sections          |       |         | —     |         |       | 211.1        |       | — |   |
| Beatrix West  section                      |       |         | —     |         |       | —       |       | 61.8 |   |
| Living Gold                                |       |         | —     |         |       | 8.4          |       | — |   |
| St Ives—old mill                      |       |         | —     |         |       | 9.8          |       | — |   |
| Driefontein—10  shaft                 |       |         | —     |         |       | 2.0          |       | — |   |
| Kloof—No. 3  metallurgical plant |       |         | —     |         |       | 1.8          |       | — |   |
| Intangible  asset—Biox technology     |       |         | —     |         |       | —       |       | 5.0 |   |
| Mineral rights                             |       |         | —     |         |       | —       |       | 5.9 |   |
|                                       |       |         | —     |         |       | 233.1        |       | 72.7 |   |

 

**Beatrix North andSouth sections**

Beatrix is a relatively low grade mine and thereforeis very sensitive to changes in its cost profile. Changes in the cost profileaffect the pay-limit, which in turn affects the quantum of reserves.

During fiscal 2005, therewere cost increases at Beatrix which resulted in an increase in the pay-limit.Due to the increase in the pay-limit, certain reserves at No. 2 shaft andVlakpan included in fiscal 2004 became uneconomical to mine and were thereforeexcluded from the 2005 reserve calculation. In addition, due to the restructuringat No. 2 shaft, certain sections were closed which resulted in a furtherdecrease in reserves from fiscal 2004. The reduction in reserves in fiscal 2005as a result of these two factors was the main reason that led to recording theimpairment charge of $211.1 million, which represents the amount by which thecarrying amount of the asset group exceeded its estimated fair value. The fairvalue of the asset group was estimated using the method described in note 2 (d) (viii).

**Living Gold**

An impairment charge wasincurred at Living Gold, the rose project at Driefontein. As Living Gold is nota gold asset, its valuation was based on its business plan using a long-termexchange rate of R8.51 to the euro and a discounted cash flow valuation at areal discount rate of 10 per cent. This resulted in an impairment charge of$8.4 million.

**Driefontein 10shaft, Kloof No 3 Metallurgical plant and St Ives Old Mill**

Due to the closureof certain infrastructure in the Group, additional assets were impaired:

·  at Driefontein, the No 10 shaft was closed,resulting in an impairment charge of $2.0 million;

·  at Kloof, the No. 3 Metallurgical plantwas closed, resulting in an impairment charge of $1.8 million; and

·  at StIves, the old mill was closed, resulting in an impairment charge of $9.8million.

**Beatrix Westsection**

During fiscal 2004,following a geological study at the Beatrix West section and an associatedrevision of the ore reserve, the latest life-of-mine plans indicated thatfuture production of gold should be based on 2.9 million ounces as opposed to6.9 million ounces as previously estimated. At this level of extraction and ata gold price of $350 per ounce, the life-of-mine plans did not support thecarrying value of the shaft on an undiscounted cash flow basis. Accordingly, anasset impairment of $61.8 million was charged against income, which reduced thecarrying value of the Beatrix West section to $11.9 million.

F-19

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**Intangibleasset-Biox technology**

During 2004, an assetimpairment charge of $5.0 million was required to adjust the carryingvalue of the Biox technology to its recoverable amount of $15.0 million.

**Mineral rights**

New regulations in SouthAfrica will result in mining companies forfeiting certain mineral rights notlikely to be mined or explored. Accordingly, an asset impairment of$5.9 million was charged against income.

**5       FINANCEEXPENSE /(INCOME)**

| ** **                                  | ** ** | **2006**     | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|---------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                  | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Interest  paid—Mvelaphanda loan        |       | 69.3         |       | 56.9         |       | 18.2         |       |
| Interest  paid—other                   |       | 5.1          |       | 0.7          |       | 9.0          |       |
| Realized gain on  foreign debt, net of cash |       | (18.8        | )          | (2.7         | )          | (15.0        | )          |
|                                        |       | 55.6         |       | 54.9         |       | 12.2         |       |

 

**6       INCOMEAND MINING TAX (EXPENSE)/BENEFIT**

| ** **                                     | ** ** | **2006**     | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                     | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| South Africa                                   |       | (43.7        | )          | (15.2        | )          | (10.1        | )          |
| Ghana                                          |       | (34.3        | )          | (19.2        | )          | (12.7        | )          |
| Australia                                      |       | (9.3         | )          | (7.8         | )          | (7.1         | )          |
| Venezuela                                      |       | (3.1         | )          | —       |       | —       |       |
| Current income and mining taxes                |       | (90.4        | )          | (42.2        | )          | (29.9        | )          |
| South Africa                                   |       | 2.7          |       | 127.9        |       | 53.9         |       |
| Ghana                                          |       | (3.6         | )          | (17.4        | )          | (26.8        | )          |
| Australia                                      |       | (6.0         | )          | 32.1         |       | (9.0         | )          |
| Deferred income and mining taxes               |       | (6.9         | )          | 142.6        |       | 18.1         |       |
| Total income and mining  tax (expense)/benefit |       | (97.3        | )          | 100.4        |       | (11.8        | )          |

 

TheCompany’s pre-tax income/(loss) before minority interests comprise:

| ** **   | ** ** | **2006**     | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|--------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **   | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| South Africa |       | 91.8         |       | (393.8       | )          | (83.7        | )          |
| Ghana        |       | 143.2        |       | 123.8        |       | 118.3        |       |
| Australia    |       | 30.2         |       | (15.6        | )          | 48.3         |       |
| Venezuela    |       | 6.3          |       | —       |       | —       |       |
|         |       | 271.5        |       | (285.6       | )          | 82.9         |       |

 

South African mining taxon mining income is determined on a formula basis which takes into account theprofit and revenue from mining operations during the year. Non-mining income istaxed at a standard rate.

F-20

----

 

| ** **                                                                                                                                                                                                                                                | ** ** | **2006**     | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                                                                                                                                                                                                                                | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Tax  (expense)/benefit on income/(loss) at South African maximum mining statutory  rate                                                                                                                                                                   |       | (121.7       | )          | 128.6        |       | (38.0        | )          |
| Rate adjustment  to reflect estimated effective mining tax rate in South Africa of 39% (2005  and 2004: 40%) and tax rate in Ghana of 26.5% (2005 and 2004: 32.5%), tax  rate in Australia of 30% (2005 and 2004: 30%) and tax rate in Venezuela of  34%. |       | 55.3         |       | (4.6         | )          | 17.6         |       |
| South African  mining tax formula rate adjustment                                                                                                                                                                                                         |       | 13.5         |       | 11.5         |       | 7.0          |       |
| Non-taxable income/additional  deductions                                                                                                                                                                                                                 |       | (22.3        | )          | (40.0        | )          | 15.1         |       |
| Valuation  allowance against deferred tax asset                                                                                                                                                                                                           |       | (4.7         | )          | (1.5         | )          | —       |       |
| Prior year  adjustment                                                                                                                                                                                                                                    |       | —       |       | —       |       | (1.0         | )          |
| Ghanaian tax rate  adjustment                                                                                                                                                                                                                             |       | 8.4          |       | 8.4          |       | —       |       |
| Australian tax  benefit from tax consolidations                                                                                                                                                                                                           |       | —       |       | 26.8         |       | —       |       |
| South African  capital gains tax                                                                                                                                                                                                                          |       | —       |       | —       |       | (1.7         | )          |
| Foreign levies  and royalties                                                                                                                                                                                                                             |       | (24.9        | )          | (21.8        | )          | (19.8        | )          |
| Other                                                                                                                                                                                                                                                     |       | (0.9         | )          | (7.0         | )          | 9.0          |       |
| Income and mining tax  benefit/(expense)                                                                                                                                                                                                                  |       | (97.3        | )          | 100.4        |       | (11.8        | )          |

 

Deferred income and mining tax liabilities and assetson the balance sheet of June 30, 2006 and 2005, relate to the following:

Deferredtax is provided at the estimated effective mining tax rate on temporarydifferences. Major items causing the Group’s income tax provision to differfrom the South African maximum mining statutory rate of 45% (2005 and 2004:46%) were:

| ** **                                                       | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                       | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **Deferred  income and mining tax liabilities:**                 | ** ** | ** **   | ** ** | ** **   | ** ** |
| Mining assets                                                    |       | 891.3        |       | 822.1        |       |
| Financial  instruments                                           |       | 25.4         |       | 35.0         |       |
| Investment in  environmental trust fund                          |       | 2.9          |       | 23.2         |       |
| Other                                                            |       | 13.5         |       | 0.5          |       |
| Total deferred income and mining tax liabilities                 |       | 933.1        |       | 880.8        |       |
| **Deferred  income and mining tax assets:**                      | ** ** | ** **   | ** ** | ** **   | ** ** |
| Provisions,  including rehabilitation accruals                   |       | 62.8         |       | 64.2         |       |
| Tax losses                                                       |       | 65.6         |       | 101.2        |       |
| Financial  instruments                                           |       | 0.2          |       | —       |       |
| Unredeemed  capital expenditure                                  |       | 126.1        |       | 155.4        |       |
| Total deferred income and mining tax assets                      |       | 254.7        |       | 320.8        |       |
| Valuation  allowance for deferred tax assets                     |       | (43.4        | )          | (36.2        | )          |
| Total deferred income and mining tax assets                      |       | 211.3        |       | 284.6        |       |
| Net deferred income and mining tax liabilities                   |       | 721.8        |       | 596.2        |       |
| **Net deferred income and mining tax liabilities  comprise of:** | ** ** | ** **   | ** ** | ** **   | ** ** |
| Current deferred  income and mining tax liabilities              |       | —       |       | —       |       |
| Non-current  deferred income and mining tax liabilities          |       | 721.8        |       | 596.2        |       |
| Net deferred income and  mining tax liabilities                  |       | 721.8        |       | 596.2        |       |

 

F-21

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The classification of deferred income and mining taxliabilities or assets is based on the related liability or asset creating thedeferred tax. Deferred taxes not related to a specific liability or asset areclassified based on the estimated period of reversal.

The Company has established a valuation allowance forcertain deferred tax assets which management believe will not be realized basedon projections as of June 30, 2006 and 2005. The valuation allowancerelates primarily to a full valuation allowance against certain foreign netdeferred tax assets of $38.1 million (2005: $34.8 million), raised on theexploration costs incurred in Orogen investments SA (Luxembourg), $2.8 million(2005:$Nil million) raised on losses incurred at GFL Mining Services Limited,$0.8 million (2005:$nil million) raised on losses incurred at Gold FieldsProtection Services Limited $ 1.7 million (2005:$1.4 million) raised on lossesincurred at Living Gold (Pty) Limited.

As at June 30,2006 and 2005 the Group has unredeemed capital expenditure and tax loss carryforwards available for deduction against future mining income at its SouthAfrican mining operations as follows:

·  unredeemed capital expenditure at GFI MiiningSouth Africa (Pty) Limited of $298.7 million (2005: $337.1 million).Thiscomprises $43.5 million (2005: $62.4 million) at the Kloof operation and $255.2million (2005: $274.7 million) at the Beatrix operation.

·  estimated and assessed tax losses at GFI MiningSouth Africa (Pty) Limited of $Nil million (2005: $7.4 million). The 2005 taxlosses comprised $0.2 million at the Kloof operation and $7.2 million at theBeatrix operation.

These futuredeductions are utilizable against income generated by the individual tax entityconcerned and do not expire unless the tax entity ceases to commercially minefor a period longer than one year. Under South African mining tax ring-fencinglegislation, each tax entity is treated separately and as such these deductionscan only be utilized by the tax entities in which the deductions have beengenerated.

·  estimated assessed losses at GoldFields Shared Services (Pty) Limited of $5.6 million (2005: $6.7 million).

·  estimated assessed losses at GFL MiningServices Limited of $13.0 million (2005: $Nil million).

·  estimated assessed losses at GoldFields Protection Services Limited of $2.9 million (2005: $Nil million).

The Group has estimated capital allowances to beoffset against future income of $27.9 million (2005: $73.3 million) and $7.0million (2005: $2.5 million) at Gold Fields Ghana Limited and Abosso GoldfieldsLimited, respectively. The estimated capital allowances do not have anexpiration date. In terms of current Ghanaian taxation legislation, tax lossesnot utilized by Gold Fields Ghana Limited and Abosso Goldfields Limited areforfeited after 5 years. Gold Fields Ghana Limited and Abosso GoldfieldsLimited currently have no tax losses available for utilization against futureprofits.

The Group has tax losses available of $126.7 million(2005: $120.2 million) at Orogen Investments SA (Luxembourg), which can only beused to offset future interest income generated by Orogen Investments SA(Luxembourg). In terms of current Luxembourg taxation legislation, lossesincurred in accounting periods subsequent to December 31, 1990, can becarried forward indefinitely. Losses incurred prior to this date could only becarried forward for 5 years. All losses incurred by Orogen Investments SA(Luxembourg) were incurred subsequent to December 31, 1990.

The Australian tax legislation makes provision forcompanies that consolidate for tax purposes to recalculate their tax valuesbased on a market value calculation. This gross up calculation was performed infiscal 2005 by Gold Fields’ subsidiaries in Australia and Gold Fields recordeda net deferred tax benefit of $26.8 million.

F-22

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The Group has estimatedcapital allowances to be offset against future income of $68.0 million (2005:$183.9 million) at Gold Fields Australia (Pty) Limited. The estimated capitalallowances do not have an expiration date. In terms of current Australiantaxation legislation, tax losses incurred by Gold Fields Australia (Pty)Limited are carried forward indefinitely. Gold Fields Australia (Pty) Limitedcurrently has no tax losses available for utilization against future profits.

**7       EARNINGS/(LOSS)PER SHARE**

| ** **                                                | ** ** | **For the year ended June 30, 2006** | ** ** |
|-----------------------------------------------------------|------------|--------------------------------------------------------------------|------------|
| ** **                                                | ** ** | **Income  Numerator**                                              | ** ** | **Shares  Denominator** | ** ** | **Per-share  Amount** | ** ** |
| ** **                                                | ** ** | **$’m**                                                       | ** ** | ** ** | ** ** | **cents** | ** ** |
| **Basic  earnings per share**                             | ** ** |                                                               | ** ** | ** ** |   | ** ** | ** ** |   | ** ** | ** ** |   |
| Shares outstanding  July 1, 2005                     |       |                                                               |       | ** ** |   | 492,294,226 |   |   |   | ** ** |   |
| Weighted average  number of shares issued during the year |       |                                                               |       | ** ** |   | 628,715 |   |   |   | ** ** |   |
| Income available  to common stockholders                  |       |                                                               | 138.5      | ** ** |   | 492,922,941 |   |   | 0.28 | ** ** |   |
| **Fully  diluted earnings per share**                     | ** ** |                                                               | ** ** | ** ** |   | ** ** | ** ** |   | ** ** | ** ** |   |
| Effect of dilutive  share options(1)                      |       |                                                               |       | ** ** |   | 3,318,029 |   |   |   | ** ** |   |
| Income available to  common stockholders                  |       |                                                               | 138.5      | ** ** |   | 496,240,970 |   |   | 0.28 | ** ** |   |

----

(1)   The conversion of Mvela’s debt to equity isanti-dilutive and has been excluded from the calculation.

| ** **                                                | ** ** | **For the year ended June 30, 2005** | ** ** |
|-----------------------------------------------------------|------------|--------------------------------------------------------------------|------------|
| ** **                                                | ** ** | **Loss  Numerator**                                                | ** ** | **Shares  Denominator** | ** ** | **Per-share  Amount** | ** ** |
| ** **                                                | ** ** | **$’m**                                                       | ** ** | ** ** | ** ** | **cents** | ** ** |
| **Basic  loss per share**                                 |       |                                                               |       |   |   |   |   |   |   |   |   |
| Shares  outstanding July 1, 2004                     |       |                                                               |       |   |   | 491,492,520 |   |   |   |   |   |
| Weighted average  number of shares issued during the year |       |                                                               |       |   |   | 494,988 |   |   |   |   |   |
| Loss available to  common stockholders                    |       |                                                               | (206.2     | ) |   | 491,987,508 |   |   | (0.42 | ) |   |
| **Fully  diluted loss per share**                         |       |                                                               |       |   |   |   |   |   |   |   |   |
| Effect of  dilutive share options(1)                      |       |                                                               |       |   |   | 1,703,385 |   |   |   |   |   |
| Loss available to common  stockholders                    |       |                                                               | (206.2     | ) |   | 493,690,893 |   |   | (0.42 | ) |   |

----

(1)   The conversion of Mvela’s debt to equity isanti-dilutive and has been excluded from the calculation.

| ** **                                                | ** ** | **For the year ended June 30, 2004** | ** ** |
|-----------------------------------------------------------|------------|--------------------------------------------------------------------|------------|
| ** **                                                | ** ** | **Income  Numerator**                                              | ** ** | **Shares  Denominator** | ** ** | **Per-share  Amount** | ** ** |
| ** **                                                | ** ** | **$’m**                                                       | ** ** | ** ** | ** ** | **cents** | ** ** |
| **Basic  earnings per share**                             |       |                                                               |       |   |   |   |   |   |   |   |   |
| Shares outstanding  July 1, 2003                     |       |                                                               |       |   |   | 472,364,872 |   |   |   |   |   |
| Weighted average  number of shares issued during the year |       |                                                               |       |   |   | 12,656,094 |   |   |   |   |   |
| Income available  to common stockholders                  |       |                                                               | 48.9       |   |   | 485,020,966 |   |   | 0.10 |   |   |
| **Fully  diluted earnings per share**                     |       |                                                               |       |   |   |   |   |   |   |   |   |
| Effect of  dilutive share options(1)                      |       |                                                               |       |   |   | 2,677,465 |   |   |   |   |   |
| Income available to  common stockholders                  |       |                                                               | 48.9       |   |   | 487,698,431 |   |   | 0.10 |   |   |

----

(1)   The conversion of Mvela’s debt to equity is anti-dilutive and hasbeen excluded from the calculation.

F-23

----

**8       RECEIVABLES**

| ** **                                                              | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|-------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                              | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Gold sale trade  receivables                                            |       | 47.6         |       | 43.8         |       |
| Other trade  receivables                                                |       | 13.0         |       | 14.1         |       |
| Deposits                                                                |       | 0.1          |       | 2.0          |       |
| Value added tax                                                         |       | 32.2         |       | 18.0         |       |
| Interest  receivable                                                    |       | 0.4          |       | 0.4          |       |
| Payroll  receivables                                                    |       | 5.4          |       | 4.9          |       |
| Prepayments                                                             |       | 18.1         |       | 11.0         |       |
| Diesel rebate                                                           |       | 2.7          | ** ** | —       | ** ** |
| Capitalized  project acquisition costs to be transferred to investments |       | —       |       | 12.0         |       |
| Rand Mutual  Assurance refund                                           |       | 2.0          |       | 2.6          |       |
| Financial  instrument receivables                                       |       | 2.7          |       | 1.3          |       |
| Debt issuance  costs                                                    |       | 2.4          |       | 3.6          |       |
| Cash in transit                                                         |       | 6.6          |       | —       |       |
| Advances to New  Africa Mining Fund                                     |       | 2.6          |       | 2.5          |       |
| Other                                                                   |       | 12.9         |       | 3.7          |       |
|                                                                    |       | 148.7        |       | 119.9        |       |

 

**9       INVENTORIES**

| ** **        | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|-------------------|------------|--------------|------------|--------------|------------|
| ** **        | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Ore stockpiles    |       | 6.1          |       | 10.5         |       |
| Gold-in-process   |       | 34.7         |       | 16.9         |       |
| Consumable stores |       | 69.1         |       | 49.3         |       |
| Mineral rights    |       | 1.4          |       | 0.7          |       |
|              |       | 111.3        |       | 77.4         |       |

 

**10    PROPERTY,PLANT AND EQUIPMENT**

| ** **                                                           | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|----------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                           | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Cost                                                                 |       | 5,108.5      |       | 4,570.5      |       |
| Accumulated  depreciation and amortization                           |       | (2,090.0     | )          | (2,016.4     | )          |
|                                                                 |       | 3,018.5      |       | 2,554.1      |       |
| Mining properties, mine development costs and mine  plant facilities |       | 2,822.0      |       | 2,324.9      |       |
| Asset retirement  cost                                               |       | 34.6         |       | 24.7         |       |
| Other non-mining  assets                                             |       | 161.9        |       | 204.5        |       |
|                                                                 |       | 3,018.5      |       | 2,554.1      |       |

 

Included in property, plant and equipment iscumulative capitalized interest relating to the Tarkwa mine amounting to $ 1.7million (2005: $ 1.7 million).

Depreciation of property,plant and equipment amounted to $269.2 million (2005: $274.5 million and 2004:$198.6 million).

F-24

----

**11   **NON-CURRENT INVESTMENTS

| ** **                                          | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|-----------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                          | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Listed  investments(a)                              |       | 297.1        |       | 108.1        |       |
| Unlisted  investments(b)                            |       | 27.2         |       | 30.3         |       |
| Amounts  contributed to environmental trust fund(c) |       | 65.1         |       | 58.1         |       |
| Equity  investees(d)                                |       | —       |       | —       |       |
| Other investments                                   |       | 7.5          |       | 7.0          |       |
|                                                |       | 396.9        |       | 203.5        |       |

----

(a)    Listedinvestments mainly consist of 26,164,098 shares in Western Areas Gold MiningCompany Limited valued at $5.36 per share (2005: 4,212,137 shares at $3.02 pershare), 21,208,020 shares in Sino Gold Limited valued at $3.36 per share (2005:10,800,000 shares at $1.42 per share), 4,350,000 shares in MvelaphandaResources Limited valued at $4.31 per share (2005: 4 350,000 at $2.28 pershare), Nil shares in Bolivar Gold Corporation (2005: 12,344,444 at $2.11 pershare), 7,628,571 shares in Comaplex Minerals Corporation valued at $3.11 pershare (2005: 7,628,571 at $2.11 per share), 19,849,861 shares in Avoca ResourcesLimited valued at $0.51 per share (2005: 19,849,861 at $0.24 per share) and8,333,333 shares in Committee Bay resources Inc. valued at $0.51 per share(2005: 1,333,333 at $0.69 per share).

The fair value of listed investments at June 30,2006 of $297.1 million (2005: $108.1 million) comprises a cost of $202.8million (2005: $87.4 million) and a net unrealized gain of $94.3 million (2005:$20.7 million). The net unrealized gain comprises a gross unrealized gain of$99.9 million (2005: $34.1 million) partly offset by a gross unrealized loss of$5.6 million (2005: $13.4 million). The gross unrealized loss of $5.6 million(2005: $13.4 million) comprises 13 equity investments (2005: 17) in listedentities. None of the 13 equity investments have been in a continuousunrealized loss position for more than 12 months.

(b)   Unlistedinvestments comprise investments in various unlisted companies in South Africafor which a fair value is not readily determinable. The directors of theCompany perform independent valuations of the investments on an annual basis toensure that no other-than temporary decrease in the value of the investmentshas occurred. Unlisted investments mainly consist of preference shares inMvelaphanda Resources Limited with a cost of $26.9 million (2005: $29.9million). The company has estimated that the fair value of the Mvelaphandapreference shares are approximately $26.9 million.

(c)    Theenvironmental trust funds are irrevocable trusts under the Group’s control. Themonies in the trusts are invested primarily in interest bearing short-terminvestments. The future realization of this asset is intended to fundenvironmental rehabilitation obligations of the Group’s South African mines.Whilst the asset is under the Company’s control, it is not available for thegeneral purposes of the Company. All income from this asset is reinvested orspent to meet these obligations. These obligations are described in note 14, “Provisionfor Environmental Rehabilitation”.

(d)   Equity in investee comprises the following:

| ** **             | ** ** | ** **                                | ** ** | **Ownership %** | ** **                            | **Market value** | ** ** |
|------------------------|------------|-------------------------------------------|------------|----------------------|---------------------------------------|-----------------------|------------|
| **Investments**        | ** ** | ** **                                | ** ** | ** **           | **Description of business** | ** **            | ** ** | **2006** | ** ** | **2005** | ** ** | **2006** | ** ** | **2005** | ** ** |
| ** **             | ** ** | ** **                                | ** ** | ** **           | ** **                            | ** **            | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Rand Refinery  Limited |       | Refining  of gold bullion and by-products |       | 33.1                 |                                  | 33.1                  |       |   | — |   |   |   | — |   |   |
|                        |            |                                           |            |                      |                                       |                       |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

F-25

----

The carrying value of the equity investment in RandRefinery Limited (“Rand Refinery”) has been reduced to nil because Gold Fields’share of the losses exceeds its carrying value in Rand Refinery. Gold Fields’obligation to make good its share of the losses in the investee is limited tothe carrying value of the investment.

Rand Refinery acts as asale agent on behalf of the Company’s African operations. The market value ofthe Company’s investment in Rand Refinery is not readily determinable. Duringthe years ended June 30, 2006, 2005 and 2004, the Company receiveddividends from Rand Refinery of $Nil million, $Nil million and $0.8 million,respectively. At June 30, 2006 an amount of $27.9 million was owing fromRand Refinery (2005: $35.1 million).

**12   **ACCOUNTS PAYABLE ANDPROVISIONS

| ** **                      | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|---------------------------------|------------|--------------|------------|--------------|------------|
| ** **                      | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Trade payables                  |       | 135.1        |       | 86.5         |       |
| Accruals                        |       | 95.2         |       | 82.0         |       |
| Payroll and other  compensation |       | 26.2         |       | 22.2         |       |
| Leave pay accrual               |       | 39.0         |       | 39.0         |       |
| Financial  instruments payable  |       | 2.8          |       | 6.3          |       |
| Foreign levies  payable         |       | 0.2          |       | 0.2          |       |
| Other                           |       | 1.4          |       | 5.7          |       |
|                            |       | 299.9        |       | 241.9        |       |

 

**13   **LONG—TERM LOANS

| ** **                                  | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|---------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                  | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **Secured**                                 | ** ** | ** **   | ** ** | ** **   | ** ** |
| Mvelaphanda loan  agreement(a)              |       | 578.8        |       | 650.6        |       |
| Syndicated  loan(b)                         |       | 157.1        |       | —       |       |
| **Unsecured**                               | ** ** | ** **   | ** ** | ** **   | ** ** |
| Industrial  Development Corporation loan(c) |       | 2.1          |       | 2.5          |       |
| Total long-term  loans                      |       | 738.2        |       | 653.1        |       |
| Industrial  Development Corporation loan(c) |       | (0.3         | )          | —       |       |
| Total long-term loans                       |       | 737.9        |       | 653.1        |       |

 

----

(a)    **Mvelaphanda loan agreement**

On March 17, 2004, Mvelaphanda Gold (Proprietary)Limited (“Mvela Gold”), a wholly owned subsidiary of Mvelaphanda ResourcesLimited, advanced an amount of $591.3 million to GFI Mining South Africa (Pty)Limited (“GFIMSA”), (the “Mvela Loan”). The loan bears interest at a fixed rateof 10.57% nominal annual compounded semi-annually and is guaranteed by GoldFields, Gold Fields Australia and Gold Fields Holding Company (BVI) Limited(formerly Gold Fields Guernsey). Interest is payable semi-annually and the loanamount is repayable five years from the date of advance. While the Mvela Loan isoutstanding, Gold Fields and any of its material subsidiaries, which is definedas any subsidiary whose gross revenue in the most recently ended financial yearrepresents more than 5% of the consolidated gross revenue of Gold Fields andits subsidiaries, may not, subject to certain exceptions, (i) sell, lease,transfer or otherwise dispose of any assets, (ii) enter into any merger orsimilar transaction, or (iii) encumber its assets. The Mvela Loan willbecome immediately due and payable upon the occurrence of any event of default,identified in the contract.

F-26

----

In terms of the facility agreement, Gold Fields mustmaintain a consolidated earnings before interest, tax and depreciation andamortization (“EBITDA”) to consolidated net finance charge ratio of at least 6to 1, consolidated EBITDA to net debt service charge at least 3.5, consolidatednet borrowings to consolidated EBITDA of at least 2 to 1 and a consolidated nettangible worth of at least $650.0 million

On the date the loan is repaid, Mvela Gold is obligatedto use the entire proceeds of the loan repayment to subscribe for new shares inGFIMSA such that after the subscription it will own 15% of the enlarged equityof GFIMSA.

In addition, starting one year after the subscriptionby Mvela Gold of the GFIMSA shares, each of Gold Fields and Mvela Gold will beentitled to require the exchange of Mvela Gold’s GFIMSA shares for ordinaryshares of Gold Fields of an equivalent value based on an exchange ratio equalto 15% of a discounted cash flow calculation as applied to GFIMSA’s operationsdivided by the same calculation as applied to Gold Fields’ operations, withcertain adjustments. In the event that the parties do not agree on the numberof Gold Fields ordinary shares to be issued to Mvela Gold in such exchange,then the exchange ratio will be determined by an independent merchant bank orinvestment bank appointed by the parties. Mvela Gold is entitled to dispose ofthe GFIMSA shares and any Gold Fields ordinary shares it may hold only inaccordance with the terms of a pre-emptive rights agreement entered into by theparties.

In connection with the Mvela loan, GFIMSA entered intotwo interest rate swaps, an amortizing and an accreting swap. The amortizingswap for $236.2 million and the accreting swap of $355.1 millionreflect the profile of the Mvela loan and have been designated as a fair valuehedge. The fixed rate receivable on these interest rate swaps is equal to theinterest rate payable on the loan from Mvelaphanda Gold (Proprietary) Limitedand the floating rate payable is the three month Johannesburg Interbank AgreedRate, or JIBAR rate plus a margin of 1.025%. On June 3, 2005, the interestrate swap was closed-out resulting in a gain of $36.2 million. Of the $36.2million, $9.2 million was accounted for in the income statement as a gain onfinancial instruments in fiscal 2006 (2005:$0.8 million). The balance of $26.2million will be accounted for in the income statement as a gain on financialinstruments in the income statements of fiscal years 2007 to 2009.

Interms of the Subscription and Share Exchange Agreement, Mvela Gold and GoldFields have the right to require the exchange of the GFIMSA shares in returnfor the issue to Mvela Gold of new ordinary shares in Gold Fields. The minimumand maximum number of Gold Fields shares that will be issued by Gold Fieldsfollowing the exercise of the Subscription and Share Exchange Agreement is45,000,000 and 55,000,000 respectively. The maximum and minimum number ofshares were out-of-the-money on June 30, 2006 and 2005.

| ** **                                                                                    | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|-----------------------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                                                    | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Loan advanced                                                                                 |       | 591.3        |       | 591.3        |       |
| Fair value  adjustment in relation to interest rate swap (2005: up to close-out of swap) |       | 36.2         |       | 36.2         |       |
| Amortization of  fair value adjustment following close-out of interest rate  swap             |       | (10.0        | )          | (0.8         | )          |
| Translation                                                                                   |       | (38.7        | )          | 23.9         |       |
| Fair value of loan at  end of year                                                            |       | 578.8        |       | 650.6        |       |

 

F-27

----

Thefair value adjustment in relation to the interest rate swaps is calculatedusing cash flows over the remaining period of the debt discounted at the five yearforward curve of the three month JIBAR rate plus a margin of 1.025%.

**Long-term debtrepayment schedule**

TheMvela loan is repayable in full on March 17, 2009.

(b)   **Syndicated loan**

On March 3,2006, Orogen Holdings (BVI) Limited, or Orogen, a wholly-owned subsidiary ofGold Fields, entered into a US$250.0 million syndicated loan term facility withlead lenders Barclays Bank Plc and JP Morgan Europe Limited. The purpose of thefacility was to partly finance the acquisition of Bolivar Gold Corporation and toprovide funding lines for general corporate purposes. Borrowings under thefacility are guaranteed by Gold Fields, GFIMSA and Gold Fields Holdings Company(BVI) Limited. In terms of the facility agreement, Gold Fields must maintain aconsolidated EBITDA to consolidated net finance charge ratio of at least 5 to 1and a consolidated net borrowings to consolidated EBITDA ratio of no more than2.5 to 1. There are also restrictions on the ability of Gold Fields and certainof its subsidiaries to encumber their assets, dispose of assets or enter into amerger or corporate reconstruction.

On March 3,2006, Orogen drew down US$158.0 million. The loan bears interest at three-monthLIBOR plus a margin of 0.35 per cent and is repayable on March 3, 2009. Interms of the facility agreement, Gold Fields has the option to repay the loanin whole or part by giving 10 days’ prior notice. The loan may not, however, berepaid prior to March 3, 2007.

| ** **                               | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                               | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Loan advanced,  net of transaction costs |       | 157.1        |       |         | —     |   |   |
|                                          |            |              |            |              |            |  |  |

 

(c)    **Industrial Development Corporation loan**

On May 28, 2004, Living Gold (Pty) Limited (“LivingGold”), a subsidiary of GFIMSA entered into an agreement with the IndustrialDevelopment Corporation of South Africa Limited (“IDC”) in terms of which theIDC agreed to provide a loan facility of R16.9 million ($2.5 million). On November 24,2004, Living Gold drew down the full amount of the facility.

In terms of the loanagreement, interest accrues on the facility based on the First National Bank ofSouthern Africa Limited prime overdraft rate. The prime overdraft rate at June 30,2006 was 11.0% (2005: 10.5%). The loan is repayable in 96 equal monthlyinstalments commencing July 1, 2006.

F-28

----

**14    PROVISIONFOR ENVIRONMENTAL REHABILITATION**

TheCompany has made, and expects to make in the future, expenditures to complywith environmental laws and regulations, but cannot predict the full amount ofsuch future expenditures. Estimated future reclamation costs are basedprincipally on legal and regulatory requirements. The following is areconciliation of the total liability for environmental rehabilitation:

| ** **                               | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                               | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **Asset retirement obligations**         |       |         |       |         |       |
| Balance at July 1                   |       | 134.6        |       | 116.0        |       |
| Acquisition of  subsidiaries             |       | 3.4          |       | (1.6         | )          |
| Additions to  liabilities                |       | 14.8         |       | 11.6         |       |
| Liabilities  settled                     |       | (3.5         | )          | (1.6         | )          |
| Accretion of  liability                  |       | 9.6          |       | 11.5         |       |
| Foreign currency  translation adjustment |       | (12.5        | )          | (2.9         | )          |
| Balance at June 30                  |       | 146.4        |       | 134.6        |       |

 

The Company intends tofinance the ultimate rehabilitation costs of the South African operations fromthe monies invested with the environmental trust fund, ongoing contributions,as well as the proceeds of the sale of assets and gold from plant clean-up atthe time of mine closure. The Company will finance the ultimate rehabilitationcosts of the non-South African operations from funds to be set aside for thatpurpose.

**15    PROVISION FOR POST-RETIREMENT HEALTH CARECOSTS**

| ** **                                 | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|--------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                 | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Accrued  post-retirement health care costs |       |         | 7.4        |         |       |   | 9.0 |   |   |
|                                            |            |              |            |              |            |  |  |  |  |

 

The Group has certain liabilities to subsidize thecontributions payable by certain pensioners and dependants of ex-employees on apay-as-you-go basis. The Group’s contributions to these schemes on behalf ofcurrent and retired employees amounted to $0.3 million in fiscal 2006(2005: $0.4 million and 2004: $2.6 million). The obligation has beenactuarially valued and the outstanding contributions will be funded over thelifetime of these pensioners and dependants. During fiscal 2005 approximately21% of these pensioners and dependants were bought out of the scheme at apremium of 15%.

Thefollowing table sets forth the funded status and amounts recognized in theCompany’s consolidated financial statements for the post-retirement health carecosts:

| ** **                                               | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|----------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                               | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Actuarial present  value                                 |       |         | 7.4        |         |       | 9.0 |   |
| Plan assets at  fair value                               |       |         | —     |         |       | — |   |
| Accumulated  benefit obligation in excess of plan assets |       |         | 7.4        |         |       | 9.0 |   |
| Prior service  costs                                     |       |         | —     |         |       | — |   |
| Unrecognized net  (gain)/loss                            |       |         | —     |         |       | — |   |
| Post-retirement health care  liability                   |       |         | 7.4        |         |       | 9.0 |   |

 

F-29

----

Thefollowing is a reconciliation of the benefit obligation:

| ** **                                            | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|-------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                            | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Benefit  obligation at beginning of year              |       | 9.0          |       | 18.9         |       |
| Service cost                                          |       | 0.7          |       | 0.5          |       |
| Interest cost                                         |       | —       |       | 1.2          |       |
| Benefits paid                                         |       | (0.3         | )          | (0.4         | )          |
| Benefits  forfeited                                   |       | (0.7         | )          | (2.2         | )          |
| Buy out of  pensioners and dependants                 |       | —       |       | (4.9         | )          |
| Premium on buy  out of pensioners and dependents      |       | —       |       | 0.8          |       |
| Release of cross  subsidy liability following buy out |       | (0.5         | )          | (4.5         | )          |
| Foreign currency  translation adjustment              |       | (0.8         | )          | (0.4         | )          |
| Balance at end of year                                |       | 7.4          |       | 9.0          |       |

 

The obligation has been valued using the projectedunit credit funding method on past service liabilities. The valuation assumes ahealth care cost inflation rate of 7% per annum (2005: 7%) and a discount rateof 9% per annum (2005: 9%).

Thenet periodic benefit cost is explained as follows:

| ** **                 | ** ** | **2006**     | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|----------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                 | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Service cost               |       |         | 0.7        |         |       |         | 0.5        |   |   |   | 1.3 |   |   |
| Interest cost              |       |         | —     |         |       |         | 1.2        |   |   |   | 1.7 |   |   |
| Net periodic benefit  cost |       |         | 0.7        |         |       |         | 1.7        |   |   |   | 3.0 |   |   |

 

Assumed health care costtrend rates have a significant effect on the amounts reported for the healthcare plans. A one percentage point increase in assumed health care cost trendrates would have increased the aggregate of service and interest cost for 2006by $0.1million (2005: $0.2 million). The effect of this change on theaccumulated post-retirement health care benefit obligation at fiscal year-end2006 would be an increase of $0.7million (2005: $0.9 million). A onepercentage point decrease in assumed health care cost trend rates would havedecreased the aggregate of service and interest cost for 2006 by $0.1 million(2005: $0.1 million). The effect of this change on the accumulatedpost-retirement health care benefit obligation at fiscal year-end 2006 would bea decrease of $0.6 million (2005: $1.5 million).

**16    EMPLOYEEBENEFIT PLANS**

**RETIREMENTBENEFITS:**   The Gold Fields Limited CorporatePension Fund, a defined benefit scheme, with 14 active members, transferred allpensioner members to a retirement scheme of their choice by June 30, 2005.The scheme was valued at intervals of not less than three years using theprojected unit credit method. The last actuarial valuation was carried out at June 30,2004 and showed the fund was under-funded by approximately $0.4 million,which was fully provided for. This was the only defined benefit scheme in theGroup.

Contributions to the various retirement schemes arefully expensed during the year in which they are funded. The cost of providingretirement benefits for the Company’s defined contribution plans for the yearamounted to $51.1 million (2005: $46.9 million and 2004:$38.7 million).

**SHAREOPTION SCHEMES:****  **TheCompany currently maintains the Gold Fields Limited 2005 Share Plan and theGold Fields Limited 2005 Non-Executive Share Plan. The Company also maintainsprior stock plans (the GF Management Incentive Scheme and the GF Non-ExecutiveDirector Share Plan), but no longer grants awards under these plans. Thedetails of these Plans are discussed below.

F-30

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**TheGold Fields 2005 Limited Share Plan:****  **At Gold Fields’ annual general meeting held on November 17,2005, the shareholders approved the Gold Fields Limited 2005 Share Plan (the “2005Plan”), and this plan is the new plan under which employees, includingexecutive directors, will be compensated. A total of 24,564,711 ordinary sharesis reserved for issuance under the 2005 Plan.

The 2005 Plan provides for two types of awards:performance vesting restricted shares (“PVRS”) and performance allocated shareappreciation rights (“SARS”). The PVRS will only be released to participantsthree years after the date of the award of such shares, and the release issubject, in whole and in part, to Gold Fields meeting certain performancecriteria set by the Board of Directors. The performance allocated shareappreciation rights are similarly not available to participants until threeyears after their award. However, availability is not subject to Gold Fields’performance. The size of the initial allocation of SARS is dependent on theperformance of the participant at the time of allocation.

Detailsof the PVRS and SARS granted under this Plan are as follows:

| ** **                            | ** ** | **Number of** | ** ** | **Number of** | ** ** | **Average price** | ** ** |
|---------------------------------------|------------|--------------------|------------|--------------------|------------|------------------------|------------|
| ** **                            | ** ** | **PVRS**           | ** ** | **SARS**           | ** ** | **Rand**               | ** ** | **$ ** | ** ** |
| Outstanding as of  July 1, 2005  |       |               | —     |               |       | —                 |       | — |   | — |   |
| Granted during  the year              |       |               | 420,500    |               |       | 1,000,150              |       | 125.28 |   | 19.58 |   |
| Exercised and  released               |       |               | (99        | )                  |       | (437                   | )          | 125.28 |   | 19.58 |   |
| Forfeited                             |       |               | (6,701     | )                  |       | (20,463                | )          | 125.28 |   | 19.58 |   |
| Outstanding as of  June 30, 2006 |       |               | 413,700    |               |       | 979,250                |       | 125.28 |   | 19.58 |   |

 

In terms of the 2005 Plan rules, PVRS are granted forno consideration, vest after three years from grant date and do not expire.None of the PVRS granted during the year were exercisable on June 30,2006.

In terms of the 2005 Plan rules, SARS currently expireno later than six years from the grant date and vest three years after grantdate. None of the SARS were exercisable on June 30, 2006. The exerciseprice for SARS outstanding at June 30, 2006 was R125.28.

**GFManagement Incentive Scheme:****  **At the annual general meeting held on November 10,1999 shareholders approved the adoption of the GF Management Incentive Scheme (“GFManagement Scheme”) to replace the scheme (“Old Scheme”) in place prior to thedown stream merger with Driefontein by the Company on June 1, 1999. As aresult of introducing the GF Management Scheme consequent upon the compositetransaction, participants transferred to the GF Management Scheme on terms noless favorable to them than those applicable to them in terms of the OldScheme. The fair value of the awards granted to members of the Old Scheme wasincluded in the determination of the purchase consideration as part of thecomposite transaction. The GF Management Scheme was introduced to provide anincentive for certain officers and employees of the Group to acquire shares inthe Company. In terms of the GF Management Scheme’s rules, up to a maximum of3% of the Company’s authorized issued ordinary shares, being13,451,600 shares, was available to be offered to eligible Companyemployees. The exercise price of each ordinary share which is the subject ofthe option is the weighted average of the middle market price at which theordinary shares traded on the JSE on the trading day immediately preceding thedate on which the Board of Directors granted the options.

At the annual general meeting held on October 31,2001, the shareholders approved an increase in the maximum number of shares to5% of the Company’s issued ordinary shares, as at June 30, 2001 being22,791,830 shares. For the convenience of the reader, the Rand amounts havebeen converted to U.S. dollars at the balance sheet rates for therespective fiscal years.

F-31

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Detailsof the options granted under the GF Management Scheme are as follows:

| ** **                            | ** ** | **Number of  Share** | ** ** | **Weighted Average option  price**                                                 | ** ** |
|---------------------------------------|------------|---------------------------|------------|----------------------------------------------------------------------------------------------|------------|
| ** **                            | ** ** | **options**               | ** ** | **       Rand       ** | ** ** | **       $       ** | ** ** |
| Outstanding as of  July 1, 2003  |       | 7,824,164                 |       |                                                                                         | 56.58      |   |   |   | 7.26 |   |   |
| Granted during  the year              |       | 2,910,900                 |       |                                                                                         | 88.25      |   |   |   | 14.01 |   |   |
| Exercised and  released               |       | (1,300,977                | )          |                                                                                         | 20.83      |   |   |   | 3.31 |   |   |
| Forfeited                             |       | (740,248                  | )          |                                                                                         | 74.21      |   |   |   | 11.78 |   |   |
| Outstanding as of  June 30, 2004 |       | 8,693,839                 |       |                                                                                         | 63.52      |   |   |   | 10.08 |   |   |
| Granted during  the year              |       | 3,968,800                 |       |                                                                                         | 68.19      |   |   |   | 10.98 |   |   |
| Exercised and  released               |       | (801,706                  | )          |                                                                                         | 26.74      |   |   |   | 4.31 |   |   |
| Forfeited                             |       | (720,482                  | )          |                                                                                         | 77.78      |   |   |   | 12.52 |   |   |
| Outstanding as of  June 30, 2005 |       | 11,140,451                |       |                                                                                         | 66.91      |   |   |   | 9.99 |   |   |
| Granted during  the year              |       | 360,500                   |       |                                                                                         | 102.30     |   |   |   | 15.98 |   |   |
| Exercised and  released               |       | (3,530,497                | )          |                                                                                         | 52.96      |   |   |   | 8.28 |   |   |
| Forfeited                             |       | (1,021,894                | )          |                                                                                         | 76.43      |   |   |   | 11.94 |   |   |
| Outstanding as of  June 30, 2006 |       | 6,948,560                 |       |                                                                                         | 75.81      |   |   |   | 10.20 |   |   |

 

In terms of the GF Management Scheme rules, optionscurrently expire no later than seven years from the grant date and vest asfollows. Upon the second anniversary of the grant date, a third of the totaloption grant vests, and then annually upon future anniversaries of the grantdate, a further third of the total option grant vests. Proceeds received by theCompany from the exercise of options are credited to common stock andadditional paid-in capital. The options exercisable on June 30, 2006, 2005and 2004 were 2,148,016, 3,839,551 and 3,376,816, respectively. The range ofexercise prices for options outstanding at June 30, 2006 was R14.19 toR154.65. The range of exercise prices for options is wide primarily due to thefluctuation of the price of the Company’s stock over the period of the grants.

On May 23, 2005, the contract life of optionsgranted to certain employees at prices between R13.55 and R14.19 was extendedby one year. These options would have otherwise expired by June 25, 2005.The incremental cost of the modification to these options, calculated as thedifference between the intrinsic value at modification date (May 23, 2005)and intrinsic value at grant date of $2.1 million, has been recognized inearnings as share-based compensation expense.

The following tablessummarize information relating to the options outstanding under the GFManagement Scheme as of June 30, 2006: (Tables are denominated in SouthAfrican Rand where applicable).

| ** **      | ** ** | ** **    | ** ** | ** **    | ** ** | **Outstanding options** | ** ** |
|-----------------|------------|---------------|------------|---------------|------------|------------------------------|------------|
| ** **      | ** ** | ** **    | ** ** | ** **    | ** ** | **Number of**           | ** ** | **Contractual life** | ** ** | **Weighted average  Exercise price** | ** ** |
| **Rand**        | ** ** | ** **    | ** ** | ** **    | ** ** | **$**                        | ** ** | **Options** | ** ** | **(in years)** | ** ** | **Rand** | ** ** | **$** | ** ** |
| Range of prices |       | 13.55-14.19   |       | 1.85 - 1.91   |       | 800                          |       |   | 0.43 |   |   | 14.19 |   | 1.91 |   |
|            |       | 19.47-23.60   |       | 2.62 - 3.18   |       | 121 900                      |       |   | 1.28 |   |   | 21.78 |   | 2.93 |   |
|            |       | 25.67-29.45   |       | 3.45 - 3.96   |       | 230 048                      |       |   | 0.51 |   |   | 25.95 |   | 3.49 |   |
|            |       | 36.07-57.50   |       | 4.85 - 7.74   |       | 413 934                      |       |   | 2.43 |   |   | 46.30 |   | 6.23 |   |
|            |       | 57.51-73.29   |       | 7.74 - 9.86   |       | 2 661 100                    |       |   | 5.75 |   |   | 65.36 |   | 8.80 |   |
|            |       | 73.80-84.17   |       | 9.93 - 11.33  |       | 2 161 381                    |       |   | 4.47 |   |   | 81.24 |   | 10.93 |   |
|            |       | 84.59-119.90  |       | 11.33 - 16.14 |       | 1 056 097                    |       |   | 4.65 |   |   | 96.93 |   | 13.05 |   |
|            |       | 125.37-154.65 |       | 16.87 - 20.81 |       | 303 300                      |       |   | 3.52 |   |   | 140.64 |   | 18.93 |   |
| Total           |       |          |       |          |       | 6 948 560                    |       |   | 4.64 |   |   | 75.81 |   | 10.20 |   |
|                 |            |               |            |               |            |                              |            |  |  |  |  |  |  |  |  |  |  |

 

F-32

----

 

| ** **      | ** ** | ** **    | ** ** | ** **    | ** ** | ** **         | ** ** | **Exercisable options** | ** ** |
|-----------------|------------|---------------|------------|---------------|------------|--------------------|------------|------------------------------|------------|
| ** **      | ** ** | ** **    | ** ** | ** **    | ** ** | ** **         | ** ** | **Weighted  average**        | ** ** | **Weighted  average** | ** ** |
| ** **      | ** ** | ** **    | ** ** | ** **    | ** ** | **Number of** | ** ** | **exercise price**      | ** ** | **exercise price** | ** ** |
| **Rand**        | ** ** | ** **    | ** ** | ** **    | ** ** | **$**              | ** ** | **options**                  | ** ** | **Rand** | ** ** | **$** | ** ** |
| Range of prices |       | 13.55-14.19   |       | 1.85 - 1.91   |       | 800                |       |                         | 14.19      |   |   |   | 1.91 |   |   |
|            |       | 19.47-23.60   |       | 2.62 - 3.18   |       | 121 900            |       |                         | 21.78      |   |   |   | 2.93 |   |   |
|            |       | 25.67-29.45   |       | 3.45 - 3.96   |       | 230 048            |       |                         | 25.95      |   |   |   | 3.49 |   |   |
|            |       | 36.07-57.50   |       | 4.85 - 7.74   |       | 413 934            |       |                         | 46.30      |   |   |   | 6.23 |   |   |
|            |       | 57.51-73.29   |       | 7.74 - 9.86   |       | 49 800             |       |                         | 61.70      |   |   |   | 8.30 |   |   |
|            |       | 73.80-84.17   |       | 9.93 - 11.33  |       | 808 276            |       |                         | 83.32      |   |   |   | 11.21 |   |   |
|            |       | 84.59-119.90  |       | 11.33 - 16.14 |       | 306 924            |       |                         | 97.11      |   |   |   | 13.07 |   |   |
|            |       | 125.37-154.65 |       | 16.87 - 20.81 |       | 216 334            |       |                         | 143.48     |   |   |   | 19.31 |   |   |
| Total           |       |          |       |          |       | 2 148 016          |       |                         | 74.05      |   |   |   | 9.97 |   |   |
|                 |            |               |            |               |            |                    |            |                              |            |  |  |  |  |  |  |  |  |

 

These options will expire if not exercised at specificdates ranging from October 1, 2006 to February 20, 2013. Marketprices of shares for which options were exercised during the fiscal years endedJune 30, 2006 and 2005 ranged from R69.80 to R163.00.

**The Gold Fields Limited2005 Non-Executive Director Share Plan:****  **At Gold Fields’ annual generalmeeting held on November 17, 2005, the shareholders approved the GoldFields Limited 2005 Non-Executive Share Plan (the “2005 Non-Executive DirectorShare Plan”), and this plan is the new plan under which non-executive directorswill receive share awards in the form of restricted shares. Participants in the2005 Non-Executive Director Share Plan will be non-executive directors of GoldFields who are not members of the Remuneration Committee. The 2005Non-Executive Share Plan provides for the release of restricted shares, up to atotal of 24,564,711 ordinary shares (including shares which may be acquired byparticipants under any other share plan in force) awarded to the non-executivedirectors three years after the date of the award, provided that thenon-executive director is not removed, disqualified or forced to resign fromthe Board of Directors during that period. No consideration is payable for thegrant of an award of restricted shares. Awards in respect of 33,000 shares wereauthorized at Gold Fields’ annual general meeting on November 17, 2005.

| ** **                            | ** ** | **Number of  restricted shares** | ** ** |
|---------------------------------------|------------|--------------------------------------------|------------|
| Outstanding as of  July 1, 2005  |       |                                       | —     |   |   |
| Granted during  the year              |       |                                       | 33,000     |   |   |
| Exercised and  released               |       |                                       | —     |   |   |
| Forfeited                             |       |                                       | —     |   |   |
| Outstanding as of June 30,  2006 |       |                                       | 33,000     |   |   |

 

**TheGF Non-Executive Director Share Plan:****  **At the annual general meeting heldon October 31, 2001, shareholders approved the adoption of the GFNon-Executive Director Share Plan (the “Plan”). The Plan was introduced toprovide an incentive for non-executive directors of the Company to acquireshares in the Company. In terms of the Plan’s rules, up to a maximum of 0.5% ofthe Company’s authorized issued ordinary shares as at June 30, 2001, being2,279,183 shares were available to be offered to non-executive directors.

Under the Plan, the aggregate number of ordinaryshares acquired by any one participant cannot exceed 0.1% of the issued sharecapital from time to time without the approval of the shareholders in a generalmeeting and the JSE. The exercise price of each ordinary share which is thesubject of an option is the weighted average price of the ordinary shares onthe JSE on the day immediately preceding the date on which the Non-ExecutiveDirectors Remuneration Committee resolves to grant the option.

F-33

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Under the Plan, all options granted may only beexercised no less than twelve months and no more than five years after the dateon which the option was accepted by the participant. Should a participant ceaseto hold office for any reason, he will be entitled within thirty days toexercise those share options which he was entitled to exercise immediatelyprior to his ceasing to hold office, failing which the options shallautomatically lapse. For the convenience of the reader, Rand amounts have beenconverted to U.S. dollars at the balance sheet rate as of June 30,2006

The following tablesummarizes information relating to share options outstanding at June 30:

| ** **                            | ** ** | **Number of  options** | ** ** | **Weighted Average option  price**                                                 | ** ** |
|---------------------------------------|------------|-----------------------------|------------|----------------------------------------------------------------------------------------------|------------|
| ** **                            | ** ** | **granted**                 | ** ** | **       Rand       ** | ** ** | **       $       ** | ** ** |
| Outstanding as of  July 1, 2003  |       |                        | 222,000    |                                                                                         |       |   | 43.70 |   |   |   | 5.61 |   |   |
| Granted during  the year              |       |                        | 100,000    |                                                                                         |       |   | 88.38 |   |   |   | 14.12 |   |   |
| Exercised and  released               |       |                        | (19,000    | )                                                                                            |       |   | 100.00 |   |   |   | 5.61 |   |   |
| Outstanding as of  June 30, 2004 |       |                        | 303,000    |                                                                                         |       |   | 69.69 |   |   |   | 8.95 |   |   |
| Granted during  the year              |       |                        | 102,400    |                                                                                         |       |   | 68.59 |   |   |   | 11.05 |   |   |
| Exercised and  released               |       |                        | —     |                                                                                         |       |   | — |   |   |   | — |   |   |
| Outstanding as of  June 30, 2005 |       |                        | 405,400    |                                                                                         |       |   | 54.92 |   |   |   | 8.84 |   |   |
| Granted during  the year              |       |                        | —     |                                                                                         |       |   | — |   |   |   | — |   |   |
| Exercised and  released               |       |                        | (221,000   | )                                                                                            |       |   | — |   |   |   | — |   |   |
| Outstanding as of  June 30, 2006 |       |                        | 184,400    |                                                                                         |       |   | 82.66 |   |   |   | 11.13 |   |   |

 

Thefollowing tables summarize information relating to options outstanding underthe Plan as of June 30, 2006. (Tables are denoted in South African Randwhere applicable.)

| ** **      | ** ** | ** **   | ** ** | ** **  | ** ** | **Outstanding options** | ** ** |
|-----------------|------------|--------------|------------|-------------|------------|------------------------------|------------|
| ** **      | ** ** | ** **   | ** ** | ** **  | ** ** | **Number of**           | ** ** | **Contractual  life** | ** ** | **Weighted average  Exercise price** | ** ** |
| **Rand**        | ** ** | ** **   | ** ** | ** **  | ** ** | **$**                        | ** ** | **options** | ** ** | **(in years)** | ** ** | **Rand** | ** ** | **$** | ** ** |
| Range of prices |       | 43.70-65.55  |       | 6.52-9.78   |       |                         | 30,000     | ** ** |   |   | 0.39 | ** ** |   |   | 43.70 | ** ** |   | 5.88 |   |
|            |       | 65.56-88.37  |       | 9.79-13.19  |       |                         | 42,400     | ** ** |   |   | 3.66 | ** ** |   |   | 68.59 | ** ** |   | 9.23 |   |
|            |       | 88.38-110.03 |       | 13.19-16.42 |       |                         | 112,000    | ** ** |   |   | 1.97 | ** ** |   |   | 98.45 | ** ** |   | 13.25 |   |
| Total           |       |         |       |        |       |                         | 184,400    | ** ** |   |   | 2.10 | ** ** |   |   | 82.66 | ** ** |   | 11.13 |   |
|                 |            |              |            |             |            |                              |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

| ** **      | ** ** | ** **   | ** ** | ** **       | ** ** | **Outstanding options** | ** ** |
|-----------------|------------|--------------|------------|------------------|------------|------------------------------|------------|
| ** **      | ** ** | ** **   | ** ** | ** **       | ** ** | **Number of**           | ** ** | **Contractual  life** | ** ** | **Weighted average  Exercise price** | ** ** |
| **Rand**        | ** ** | ** **   | ** ** | ** **       | ** ** | **$**                        | ** ** | **options** | ** ** | **(in years)** | ** ** | **Rand** | ** ** | **$** | ** ** |
| Range of prices |       | 43.70-65.55  |       | 7.04-10.56       |       |                         | 30,000     |   |   |   | 0.39 |   |   |   | 43.70 |   |   | 5.88 |   |
|            |       | 65.56-88.37  |       | 10.56–14.23 |       |                         | 42,400     |   |   |   | 3.66 |   |   |   | 68.59 |   |   | 9.23 |   |
|            |       | 88.38-110.03 |       | 14.23-17.72      |       |                         | 112,000    |   |   |   | 1.97 |   |   |   | 98.45 |   |   | 13.25 |   |
| Total           |       |         |       |             |       |                         | 184,400    |   |   |   | 2.10 |   |   |   | 82.66 |   |   | 11.13 |   |
|                 |            |              |            |                  |            |                              |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

These options will expire if not exercised at specificdates ranging from November 13, 2006 to November 18, 2010. Marketprices of shares for which options were exercised during the fiscal years endedJune 30, 2006 and 2004 ranged from R68.95 to R154.00.

F-34

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**17    DERIVATIVE FINANCIAL INSTRUMENTS AND FAIRVALUE AND CREDIT RISK OF FINANCIAL INSTRUMENTS**

**Risk managementactivities**

In the normal course ofits operations, the group is exposed to commodity price, currency, interestrate, liquidity and credit risk. In order to manage these risks, the group hasdeveloped a comprehensive risk management process to facilitate control andmonitoring of these risks. General corporate hedging unrelated to any specificproject is not routinely undertaken. The Group does not hedge its exposure togold price fluctuation risk and sells at market spot prices, except whenspecifically required by financing arrangements, to protect cash flows on aproject specific basis and to safeguard the viability of higher costoperations.

**Concentration ofcredit risk**

The Group’s financial instruments do not represent aconcentration of credit risk as the Group deals with a number of major banks.Accounts receivable are regularly monitored and assessed and where necessary anadequate level of provision is maintained.

A formal process of allocating counterparty exposureand prudential limits is applied under the supervision of the Group’s executivecommittee.

No margin facilities areengaged.

**Foreign currencyand commodity price risk**

In the normal course of business the Group enters intotransactions for the sale of its gold, denominated in U.S. dollars. Inaddition, the Group has assets and liabilities denominated in a number ofdifferent currencies (primarily South African rand and Australian dollars). Asa result, the Group is subject to transaction and translation exposure fromfluctuations in foreign currency exchange rates.

Prior to fiscal 2002 theGroup did not hedge its exposure to foreign currency exchange rates. Duringfiscal 2002, this policy was amended and the Group entered into foreigncurrency forward sales and zero cost collars relating to its Australian andSouth African operations. During fiscal 2003, the Group entered into Rand/U.S.dollar purchase contracts to hedge the Group’s commitment in respect of theTarkwa mill and owner mining projects. This contract matured on June 3,2004 and was rolled forward to December 3, 2004. On January 7, 2004,the Australian instruments were closed in U.S. dollars and subsequent to thison May 7, 2004, the future U.S. dollar values were fixed in Australiandollars. On January 7, 2004 a strip of Australian dollar/U.S. dollar calloptions were purchased in order to participate in any further Australian dollarappreciation. These instruments were not designated as hedges and accordingly,gains and losses are recognized in earnings.

**Interest rate andliquidity risk**

Fluctuations in interest rates impact on the value ofinvestments and financing activities, giving rise to interest rate risk. TheGroup does not currently hedge its exposure to interest rate risk.

In the ordinary course of business, the Group receivescash proceeds from its operations and is required to fund working capital andcapital expenditure requirements. The cash is managed to ensure surplus fundsare invested to maximize returns while ensuring that capital is safeguarded tothe maximum extent possible by investing only with top financial institutions.

Substantial contractualarrangements for uncommitted borrowing facilities are maintained with severalbanking counterparties to meet the Group’s normal contingency fundingrequirements.

F-35

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**Fair value**

The fair value of a financial instrument is defined asthe amount at which the instrument could be exchanged in a current transactionbetween willing parties, other than in a forced or liquidation sale. Thecarrying amounts of receivables, accounts payable and cash and cash equivalentsare a reasonable estimate of their fair values due to the short-term maturityof such instruments. The investments in the environmental trust fundapproximate fair value, as the monies are invested in short-term maturityinvestments. Listed investments are carried at market value. Long-term loans,except for the Mvela loan which is at a fixed interest rate, approximate fairvalue as they are subject to market based floating rates. On June 30, 2006and 2005, the Mvela loan was fair valued based on applicable market rates.

Theestimated fair values of the Group’s financial instruments are:

| ** **                       | ** ** | **June 30, 2006** | ** ** | **June 30, 2005** | ** ** |
|----------------------------------|------------|-----------------------------|------------|-----------------------------|------------|
| ** **                       | ** ** | **Carrying  value**         | ** ** | **Fair value**         | ** ** | **Carrying  value** | ** ** | **Fair value** | ** ** |
| ** **                       | ** ** | **$’ m**          | ** ** | **$’ m**          | ** ** | **$’ m** | ** ** | **$’ m** | ** ** |
| **Financial  assets**            |       |                        |       |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash  equivalents       |       |                        | 217.7      |                        |       |   | 217.7 |   |   |   | 503.7 |   |   |   | 503.7 |   |   |
| Financial  instruments           |       |                        | 30.4       |                        |       |   | 30.4 |   |   |   | 46.8 |   |   |   | 46.8 |   |   |
| Receivables                      |       |                        | 148.7      |                        |       |   | 148.7 |   |   |   | 119.9 |   |   |   | 119.9 |   |   |
| Non-current  investments         |       |                        | 396.9      |                        |       |   | 396.9 |   |   |   | 203.5 |   |   |   | 203.5 |   |   |
| **Financial liabilities**        | ** ** |                        |       |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term loans                  |       |                        | 737.9      |                        |       |   | 762.9 |   |   |   | 653.1 |   |   |   | 702.0 |   |   |
| Accounts payable  and provisions |       |                        | 299.9      |                        |       |   | 299.9 |   |   |   | 241.9 |   |   |   | 241.9 |   |   |
| Interest payable                 |       |                        | 29.8       |                        |       |   | 29.8 |   |   |   | 32.6 |   |   |   | 32.6 |   |   |

 

**Derivativecontracts as at June 30, 2006**

**Foreign currencycontracts**

Thefollowing tables summarize the foreign currency contracts held by the Companyas at June 30, 2006:

**(a)   A$/$ currency contracts**

| ** **                                                                  | ** ** | **Call options** | ** ** |
|-----------------------------------------------------------------------------|------------|-----------------------|------------|
| **Various maturity dates  in fiscal years ending** | ** ** | ** **            | ** ** | **$m  Notional** | ** ** | **A$1=$   Strike price** | ** ** |
| June 30,  2007                                                         |       |                  | 75.0       |   |   |   | 0.7670 |   |   |
|                                                                             |            |                       |            |  |  |  |  |  |  |  |  |

 

Themark-to-market value of these contracts amounted to a gain of $0.3 millionat June 30, 2006, which value is based on the prevailing interest ratesand volatility at the time.

**(b)   $/ZAR currency contracts**

| ** **             | ** ** | **Forward sales** | ** ** |
|------------------------|------------|------------------------|------------|
| **Maturity date** | ** ** | ** **             | ** ** | **$m  Notional** | ** ** | **ZAR1 = $   Strike price** | ** ** |
| December 5,  2006 |       |                   | 30.0       |   |   |   | 0.14637 |   |   |
|                        |            |                        |            |  |  |  |  |  |  |  |  |

 

The mark-to-market valueof these contracts amounted to a loss of $2.7 million at June 30,2006, which value is based on the prevailing interest rates and volatility atthe time.

F-36

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**(c)**   Mvelatransaction—Right of Exchange

In terms of the Right ofExchange, Mvela Gold and Gold Fields have the right to require the exchange ofthe GFIMSA shares in return for the issue to Mvela Gold of new ordinary sharesin Gold Fields. The minimum and maximum number of Gold Fields shares that willbe issued by Gold Fields following the exercise of the Right of Exchange is 45million and 55 million respectively. This right of exchange was out of themoney on June 30, 2006 and 2005.

**Derivativecontracts as at June 30, 2005**

**Foreign currencyand commodity contracts**

Thefollowing tables summarize the foreign currency and commodity contracts held bythe Company as at June 30, 2005:

**(a)   A$/$ currency contracts**

| ** **                                                                  | ** ** | **Call options** | ** ** |
|-----------------------------------------------------------------------------|------------|-----------------------|------------|
| **Various maturity dates  in fiscal years ending** | ** ** | ** **            | ** ** | **$m  Notional** | ** ** | **A$1=$  Strike price** | ** ** |
| June 30,  2006                                                         |       |                  | 100.0      |   |   |   | 0.7670 |   |   |
| June 30,  2007                                                         |       |                  | 75.0       |   |   |   | 0.7670 |   |   |
|                                                                        |       |                  | 175.0      |   |   |   | 0.7670 |   |   |
|                                                                             |            |                       |            |  |  |  |  |  |  |  |  |

 

The mark-to-market valueof these contracts amounted to a gain of $4.1 million at June 30,2005, which value is based on the prevailing interest rates and volatility atthe time.

**(b)   $/ZAR currency contracts**

| ** **             | ** ** | **Forward sales** | ** ** |
|------------------------|------------|------------------------|------------|
| **Maturity date** | ** ** | ** **             | ** ** | **$m  Notional** | ** ** | **ZAR1 = $  Strike price** | ** ** |
| December 5,  2005 |       |                   | 30.0       |   |   |   | 0.14409 |   |   |
|                        |            |                        |            |  |  |  |  |  |  |  |  |

 

The mark-to-market valueof these contracts amounted to a loss of $0.6 million at June 30,2005, which value is based on the prevailing interest rates and volatility atthe time.

**(c)   Commodity contract—International PetroleumExchange (IPE) Gasoil options**

| ** **             | ** ** | **Forward sales** | ** ** |
|------------------------|------------|------------------------|------------|
| **Maturity date** | ** ** | ** **             | ** ** | **Liters** | ** ** | **US$/liter** | ** ** |
| June 8, 2005      |       | 51,600                 |       | 0.45000 |   |
|                        |            |                        |            |  |  |  |  |

 

The mark-to-market valueof these contracts amounted to a gain of $1.9 million at June 30, 2005,which value is based on the prevailing interest rates and volatility at thetime.

**18    ADDITIONAL CASH FLOW INFORMATION**

**(a)   Supplemental cash flow disclosures**

The income and mining taxes paid in the statement ofcash flow represents actual cash paid.

F-37

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Thefollowing amounts of interest paid were included in net cash provided byoperating activities:

| ** ** | ** ** | ** **                                                                                                                              | ** ** | **Years ended June 30,** | ** ** |
|------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------|------------|
| ** ** | ** ** | ** **                                                                                                                              | ** ** | **2006**                                | ** ** | **2005** | ** ** | **2004** | ** ** |
| ** ** | ** ** | ** **                                                                                                                              | ** ** | **$ ‘m**                      | ** ** | **$ ‘m** | ** ** | **$ ‘m** | ** ** |
|       |       | Interest paid                                                                                                                           |       | 74.4                                    |       | 57.6 |   | 27.2 |   |
| **(b)**    | ** ** | **Non  cash-items**                                                                                                                     | ** ** | ** **                              | ** ** | ** ** | ** ** | ** ** | ** ** |
|       |       | Excluded from the  statements of cash flows are the following:                                                                          |       |                                    |       |   |   |   |   |
| ** ** | **(i)**    | **For the  year ended June 30, 2006**                                                                                              | ** ** | ** **                              | ** ** | ** ** | ** ** | ** ** | ** ** |
|       |       | The $67.6 million  gain on market-to-market of listed investments                                                                       |       |                                    |       |   |   |   |   |
| ** ** | **(ii)**   | **For the  year ended June 30, 2005**                                                                                              | ** ** | ** **                              | ** ** | ** ** | ** ** | ** ** | ** ** |
|       |       | The  $9.0 million gain on mark-to-market of listed investments.                                                                    |       |                                    |       |   |   |   |   |
| ** ** | **(iii)**  | **For the  year ended June 30, 2004**                                                                                              | ** ** | ** **                              | ** ** | ** ** | ** ** | ** ** | ** ** |
|       |       | The  $17.4 million gain on mark-to-market of listed investments                                                                    |       |                                    |       |   |   |   |   |
| **(c)**    | ** ** | **Acquisitions of subsidiaries**                                                                                                        | ** ** | ** **                              | ** ** | ** ** | ** ** | ** ** | ** ** |
|       | (i)        | **Acquisition of Bolivar Gold Corporation Inc.**                                                                                        |       |                                    |       |   |   |   |   |
|       |       | The following  information reflects the cash flow impacts of the acquisition of Bolivar Gold  Corporation Inc. See note 3(a). |       |                                    |       |   |   |   |   |
|       |       | Total purchase  consideration                                                                                                           |       | 328.6                                   |       | — |   | — |   |
|       |       | Exchange gain on  funds held for acquisition of Bolivar                                                                                 |       | (8.1                                    | )          | — |   | — |   |
|       |       | Purchase of  shares in prior years                                                                                                      |       | (11.9                                   | )          | — |   | — |   |
|       |       | Long-term loans                                                                                                                         |       | 72.4                                    |       | — |   | — |   |
| ** ** | ** ** | **Net  liabilities disposed of**                                                                                                        |       | 381.0                                   |       | — |   | — |   |
|       |       | Cash and cash  equivalents in subsidiary acquired                                                                                       |       | (5.9                                    | )          | — |   | — |   |
| ** ** | ** ** | **Cash  outflow on acquisition**                                                                                                        |       | 375.1                                   |       | — |   | — |   |
|       |       | The $375.1  million net cash paid is included in acquisition of subsidiaries on the cash  flow statement.                               |       |                                    |       |   |   |   |   |
| ** ** | **(ii)**   | **Acquisition of Sociedad Minera La Cima SA**                                                                                           | ** ** | ** **                              | ** ** | ** ** | ** ** | ** ** | ** ** |
|       |       | The following  information reflects the cash flow impacts of the acquisition of Sociedad  Minera La Cima SA. See note 3 (b)             |       |                                    |       |   |   |   |   |
|       |       | Total purchase consideration                                                                                                            |       | 40.5                                    |       | — |   | — |   |
|       |       | Cash and cash  equivalents in subsidiary acquired                                                                                       |       | —                                  |       | — |   | — |   |
| ** ** | ** ** | **Cash  outflow on acquisition**                                                                                                        |       | 40.5                                    |       | — |   | — |   |
|       |       | The $40.5 million  net cash paid is included in acquisition of subsidiaries on the cash flow  statement.                                |       |                                    |       |   |   |   |   |
| ** ** | **(iii)**  | **Minority shareholders’ interest in Arctic  Platinum**                                                                            | ** ** | ** **                              | ** ** | ** ** | ** ** | ** ** | ** ** |
|       |       | With effect from  September 4, 2003, the Group acquired the minority shareholders’  interest in Artic Platinum.               |       | —                                  |       | — |   | 31.7 |   |
|       |       | Minority  shareholders’ interest                                                                                                   |       | —                                  |       | — |   | (8.7 | ) |
|       |       | Paid for by issue of  share capital                                                                                                     |       | —                                  |       | — |   | 23.0 |   |

 

F-38

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**19    COMMITMENTS**

| ** **              | ** ** | **2006**     | ** ** | **2005**     | ** ** |
|-------------------------|------------|--------------|------------|--------------|------------|
| ** **              | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **Capital expenditure** | ** ** | ** **   | ** ** | ** **   | ** ** |
| Authorized              |       | 665.2        |       | 454.6        |       |
| Contracted for          |       | 254.3        |       | 23.8         |       |
| Other guarantees        |       | 33.7         |       | 51.3         |       |

 

Guarantees consist of (a) $27.7 million(comprising a loan of $20.2 million and interest of $7.5 million) to the PublicInvestment Commissioners (PIC) with regard to the Mvela loan (b) $4.5million to New Africa Mining Fund (“NAMF”) and (c) $1.5 million fornumerous other obligations. NAMF is a private equity fund incorporated in SouthAfrica for the purpose of investing in junior mining opportunities in SouthAfrica and the broader Africa continent. The Group also provides environmentalobligation guarantees with respect to its Ghanaian and Australian operations.These guarantees, amounting to $27.6 million at June 30, 2006, have notbeen included in the amount of guarantees of $33.7 million because they arefully provided for under the asset retirement obligation.

Under the PIC agreement, the Company has effectivelyguaranteed a loan of R150 million ($20.2 million) made by the PIC tocertain lenders to Mvela, at an interest rate of 14.25%. Under the terms of theagreement, the PIC has the right to require the Company to assume all itsrights and obligations under this loan together with its underlying security.The PIC is obliged to pay the Company a guarantee fee equal to 3.75% perannum on the date the loan is repaid.

Commitments will be fundedfrom internal cash resources and borrowings as necessary.

**20    CONTINGENT LIABILITIES**

**World Gold Council**

Gold Fields is a member ofthe World Gold Council. In terms of the membership agreement, all members areresponsible for certain costs, including core costs on a three year rollingbasis, winding up costs, if applicable, and various other contingentliabilities. Apportionment of liabilities, should they arise, is doneproportionate to the member’s production relative to the total production ofall members. To date, no claims have been made on Gold Fields.

**Occupational healthcare services**

The Group providesoccupational health care services to its employees through its existingfacilities at the various operations. There is a risk that the cost ofproviding such services could increase in the future depending upon changes inthe nature of underlying legislation and the profile of employees. Thisincreased cost, should it transpire, is currently indeterminate. The Group ismonitoring developments in this regard.

**21    LINES OF CREDIT**

The Group had unused linesof credit available amounting to $498.0 million (R3.7 billion) at June 30,2006 (2005: $388.0 million).

**22   **RELATED PARTY TRANSACTIONS

**Pro-Drilling &Milling (Pty) Limited**

One of the Company’sexecutive committee members sits on the board of and owns 50% of Pro-Drilling &Mining (Pty) Limited (“Pro-Drilling”), a privately owned drilling company.Pro-Drilling provides diamond 

F-39

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drilling and core recoveryservices at the Driefontein operation of GFIMSA pursuant to a contract which isvalid until terminated by either party with one month’s written notice. TheCompany paid Pro-Drilling $0.6 million, $1.8 million and $0.3 million for theyears ended June 30, 2006, 2005 and 2004 respectively.

**MvelaphandaResources Limited**

One of the Company’s non-executive directors at June 30,2006, Tokyo Sexwale is the executive chairman of Mvelaphanda Resources Limited(“Mvela”). Mvela is a broad based black economic empowerment consortium.

On July 10, 2002, the Company announced that it hadgranted Mvela participation rights, varying between a minimum of 5% and amaximum of 15% in any new Gold Fields precious metals exploration projects inAfrica, beginning March 1, 2002. In consideration for the transactionMvela will issue the Company with options to subscribe in tranches for ordinaryshares, consisting of one ordinary share and one unsecured debenture issued byMvela, in Mvela at a 10% premium to the five day weighted average trading priceon the JSE. Mvela initially issued the Company with options to subscribe forordinary shares with a value of Rand 10 million ($1 million). As at June 30,2006 Mvela had issued the Company options to subscribe for ordinary shares witha value of R55.4 million ($7.5 million), of which the Company is yet tosubscribe for any Mvela ordinary shares.

The transaction with Mvelato acquire a 15% beneficial interest in the Company’s South African miningoperations for a total cash consideration of R4.1 billion($591.3 million) became effective on March 15, 2004. The Company hasprovided Mvela with vendor financing of R300 million ($47.6 million)comprising R200 million of preference shares and R100 million ofordinary shares on commercial terms in connection with the transaction.

**Rand Refinery**

Rand Refinery, in which the Company holds a 33.1%interest, has an agreement with the Company whereby it refines all the Company’sSouth African and Ghanaian operations gold production. The Company’s chieffinancial officer is currently a director of Rand Refinery and has held hisdirectorship of Rand Refinery since July 10, 2000. The Company paid RandRefinery $1.6 million, $2.6 million and $3.4 million in refining fees for theyears ended June 30, 2006, 2005 and 2004, respectively. Refer to footnote 12—Non-currentInvestments for amounts owing by Rand Refinery to the Company as at June 30,2006 and 2005, and the dividends received from Rand Refinery for the yearsended June 30, 2006, 2005 and 2004 respectively.

On November 21, 2000,GFL Mining Services Limited (“GFLMS”) entered into an agreement with RandRefinery in terms of which GFLMS acts as an agent for Rand Refinery with regardto the sale of a maximum of 50% of Gold Fields’ South African gold production.In June 1, 2004, GFLMS exercised its right, by giving notice to RandRefinery, to sell all of Gold Fields’ South African gold production with effectfrom October 1, 2004. Gold Fields Ghana Limited and Abosso GoldfieldsLimited also have had agreements with Rand Refinery since March 2002 totransport, refine and sell substantially all of the gold production from theTarkwa and Damang mines.

**Transactions withdirectors**

During fiscal year ended June 30,2006,GFL Mining Services Limited, a subsidiary of Gold Fields Limited, acquired avehicle from the Chief Executive Officer of the Company, Ian D Cockerill, forR420,000 ($65,625). The transaction was carried out at arms-length.

F-40

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**23    SUBSEQUENT EVENTS**

***Acquisition of South Deep***

On September 11, 2006, Gold Fields entered intoan agreement with Barrick Gold Corporation (“Barrick”) and PDG Aureate Limited,a subsidiary of Barrick, to acquire, for a total consideration of US$1.525billion, the entire issued share capital of Barrick Gold South Africa(Proprietary) Limited (“BGSA’’), which holds a 50% interest in the Barrick Gold—WesternAreas Joint Venture, an unincorporated entity in which Barrick and WesternAreas Limited (“Western Areas”), each hold an interest of 50%. The Barrick Gold—WesternAreas Joint Venture owns the developing South Deep, located in theWitwatersrand basin near Johannesburg. At Gold Fields’ option, the totalconsideration can be paid in cash, or US$1.2 billion can be paid in cash******with the remaining US$325 millionpayable through the issue to Barrick of such number of Gold Fields ordinaryshares as is obtained by dividing the US$325 million consideration by thevolume weighted average price of Gold Fields’ ADRs on the New York StockExchange for the five trading days preceding the closing of the transaction.Following receipt of the requisite approval from the competition authorities inSouth Africa on November 22, 2006, this transaction is scheduled to closeon November 30, 2006.

In conjunction with Gold Fields’ acquisition ofBarrick’s stake in the Barrick Gold—Western Areas Joint Venture and afterconsultation with the Board of Directors of Western Areas, Gold Fieldsundertook to make an offer (referred to herein as the Offer) to acquire theentire issued share capital of Western Areas not already owned by Gold Fields.Western Areas’ principal asset is its 50% interest in South Deep. It also holdssome mineral rights adjacent, or in close proximity, to South Deep and thehedge book described below. At the time it entered into the agreement withBarrick, Gold Fields owned 18% of the issued share capital of Western Areas andhad entered into an agreement with JCI Limited (“JCI”) and certain of itssubsidiaries regarding the acquisition of certain Western Areas shares owned bythose subsidiaries, as described below. The Western Areas shares owned by JCI’ssubsidiaries do not form part of the Offer. Under the Offer, which Gold Fields commencedon October 30, 2006, Western Areas shareholders will receive 35 GoldFields shares for every 100 Western Areas shares validly tendered into theOffer. This consideration is based on the amount payable by Gold Fields forBGSA’s 50% interest in South Deep, adjusted for the additional assets andliabilities of Western Areas. Gold Fields has not established a minimumacceptance threshold for the Offer and, accordingly, will be obligated toacquire any Western Areas shares validly tendered in the Offer. If Gold Fieldsacquires at least nine-tenths of the Western Areas shares that are the subjectof the Offer, it may, pursuant to South African law, elect to compulsorilyacquire the remaining Western Areas shares that are the subject of the Offer.Following receipt of the requisite approval from the competition authorities inSouth Africa on November 22, 2006, the Offer is now unconditional. The Offerwill close on a date to be announced by Gold Fields.

In support of the Offer, Gold Fields, JCI, and certainsubsidiaries of JCI entered into an agreement on September 11, 2006,pursuant to which, on November 16, 2006, Gold Fields acquired 27 millionWestern Areas shares from one of the subsidiaries (referred to herein as theJCI Transaction) in exchange for the issue to JCI of 9,450,000 Gold Fieldsshares (a ratio of 35 Gold Fields shares for every 100 Western Areasshares). This acquisition increased Gold Fields’ stake in Western Areas from18% to 34.7%. JCI has agreed that it will hold the Gold Fields shares itreceived until the date upon which Western Areas shareholders are entitled toreceive Gold Fields shares pursuant to the Offer. In addition, pursuant to theagreement, and with effect from November 14, 2006, the JCI subsidiariesgranted Gold Fields call options and Gold Fields granted the JCI subsidiariesput options, subject to certain restrictions and conditions, in respect of thebalance of a further 9.96 million Western Areas shares held by the JCIsubsidiaries. In the case of both the put and the call options, the holder ofthe option is entitled to give notice to the granter of the option within 90days after implementation of the JCI Transaction, which occurred onNovember 14, 2006, that it is considering exercising its option. Theoption must be exercised no more than 90 days from the date of the notice,although the JCI subsidiaries are not entitled to exercise their options duringthe 

F-41

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first 60 days after giving the notice. Gold Fieldsgave notice of its intention of exercising its option on November 15, 2006.Should the call options be exercised by Gold Fields, Gold Fields’ interest inWestern Areas would increase by 9.96 million shares to approximately 41% of theissued share capital of Western Areas. No option premiums are payable inrespect of the call or put options. The agreement with JCI and its subsidiariesprovides that, if at any time prior to the date that is three months after the effectivedate of the granting of the put and call options, Gold Fields acquires anyWestern Areas shares for consideration per Western Areas share greater than ispayable to JCI or its subsidiaries under the agreement, Gold Fields must payJCI and its subsidiaries the difference in respect of the Western Areas sharesacquired from JCI and its subsidiaries.

In connection with the acquisition of BGSA and theproposed acquisition of Western Areas, GFIMSA entered into a US$1.8 billioncredit facility with Citibank, N.A. London Branch, J.P. Morgan Plc,J.P. Morgan Europe Limited and other financial institutions, as set out in theagreement, on November 24, 2006. 

*In 2001, Western Areas entered intoa long-dated derivative structure in respect of gold production from SouthDeep. The derivative structure, which is based on a series of bought and soldoptions on Western Areas’ share of South Deep’s gold production, took effect inthe last quarter of 2001 and expires in mid-2014. According to Western Areas,it will have to deliver approximately 90% of its share of the gold productioninto the derivative structure for 2006 and, at current spot rates, approximately58% in 2007. Western Areas also reported that as of September 30, 2006, thefair value of the instruments constituting the derivatives structure wasUS$(360,483,116), using a gold spot price of US$598.60 and an exchange rate ofRand 7.7643 per US$1.00. The premium payable for the options purchased byWestern Areas as part of the derivative structure was US$250 million, payableat various pre-determined dates in the future. Western Areas reported that atSeptember 30, 2006, the discounted value of the premium payable wasUS$139,630,503. Under the terms of the relevant options, a change of control ofWestern Areas without the consent of the option counterparties constitutes anevent of default which may entitle the option counterparties to close out the positions.Therefore, if Gold Fields acquires control of Western Areas, the optioncounterparties could require Western Areas to immediately settle theoutstanding options and pay the present value of the premium. In addition, GoldFields understands that other circumstances may exist that would allow theoption counterparties to close out the options. If the option counterpartieselect to close out the options at a time when Western Areas is a subsidiary ofGold Fields, it could have an adverse effect on Gold Fields’ financialcondition. Even if Western Areas is not required to immediately settle theoutstanding options, it would receive only the option price for a significantportion of the production of South Deep and therefore Gold Fields would notbenefit from any higher gold spot price.*

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**24    GEOGRAHICAL AND SEGMENT INFORMATION**

Gold Fields is primarily involved in gold mining,exploration and related activities. Activities are conducted and investmentsheld both inside and outside of South Africa.

Thesegment results have been prepared and presented based on management’sreporting format. Management prepares its financial records in accordance  with International Financial ReportingStandards (“IFRS”) and reconciled IFRS information is what the Company’s chiefoperating decision maker reviews in allocating resources and making investmentdecisions. The Company’s gold mining operations are managed and internallyreported based upon the following geographic areas: the Driefontein division,the Kloof Division and the Free State Beatrix, in Ghana the Tarkwa and Damangmines, Australia and Venezuela. The Group also has exploration interests whichare included in the Corporate and other segment. Corporate costs are allocatedbetween segments based upon the time spent on each segment by members of theexecutive team.

| ** **                                              | ** ** | **Fiscal year ended June 30, 2006** | ** ** |
|---------------------------------------------------------|------------|--------------------------------------------------------------|------------|
| ** **                                              | ** ** | **Driefontein  South  Africa**                               | ** ** | **Kloof  South  Africa** | ** ** | **Beatrix  South  Africa** | ** ** | **Tarkwa  Ghana** | ** ** | **Damang  Ghana** | ** ** | **Australia** | ** ** | **Choco 10  Venezuela** | ** ** | **Corporate  and other** | ** ** | **Reconciling  items** | ** ** | **Group  consolidated** | ** ** |
| **Statement of operations**                             |       |                                                         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                                                 |       |                                                         | 599.9      |   |   |   | 479.3 |   |   |   | 312.9 |   |   |   | 373.0 |   |   |   | 123.1 |   |   |   | 377.0 |   |   |   | 16.8 |   |   |   | — |   |   |   | — |   |   |   | 2,282.0 |   |   |
| Operating costs(1)                                      |       |                                                         | (424.1     | ) |   |   | (399.3 | ) |   |   | (252.3 | ) |   |   | (211.7 | ) |   |   | (77.6 | ) |   |   | (236.3 | ) |   |   | (8.8 | ) |   |   | — |   |   |   | (57.4 | ) |   |   | (1,667.5 | ) |   |
| Gold inventory change(2)                                |       |                                                         | —     |   |   |   | — |   |   |   | — |   |   |   | 5.1 |   |   |   | (2.7 | ) |   |   | 6.4 |   |   |   | 0.4 |   |   |   | — |   |   |   | (0.4 | ) |   |   | 8.8 |   |   |
| **Operating profit**                                    |       |                                                         | 175.8      |   |   |   | 80.0 |   |   |   | 60.6 |   |   |   | 166.4 |   |   |   | 42.8 |   |   |   | 147.1 |   |   |   | 8.4 |   |   |   | — |   |   |   | (57.8 | ) |   |   | 623.3 |   |   |
| Amortization and depreciation                           |       |                                                         | (40.5      | ) |   |   | (40.0 | ) |   |   | (17.5 | ) |   |   | (37.5 | ) |   |   | (3.9 | ) |   |   | (82.0 | ) |   |   | (2.1 | ) |   |   | (16.5 | ) |   |   | (29.2 | ) |   |   | (269.2 | ) |   |
| **Net operating profit/(loss)**                         |       |                                                         | 135.3      |   |   |   | 40.0 |   |   |   | 43.1 |   |   |   | 128.9 |   |   |   | 38.9 |   |   |   | 65.1 |   |   |   | 6.3 |   |   |   | (16.5 | ) |   |   | (87.0 | ) |   |   | 354.1 |   |   |
| Exploration expenditure                                 |       |                                                         | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (38.7 | ) |   |   | (0.6 | ) |   |   | (39.3 | ) |   |
| Other items as detailed in the statement of  operations |       |                                                         | (6.6       | ) |   |   | (3.6 | ) |   |   | (6.5 | ) |   |   | 0.7 |   |   |   | 0.9 |   |   |   | 1.4 |   |   |   | — |   |   |   | 10.6 |   |   |   | (40.2 | ) |   |   | (43.3 | ) |   |
| Current taxation                                        |       |                                                         | (31.5      | ) |   |   | — |   |   |   | — |   |   |   | (26.0 | ) |   |   | (8.3 | ) |   |   | (9.3 | ) |   |   | (3.0 | ) |   |   | (12.2 | ) |   |   | — |   |   |   | (90.3 | ) |   |
| Deferred taxation                                       |       |                                                         | (6.6       | ) |   |   | (10.4 | ) |   |   | (14.9 | ) |   |   | (5.8 | ) |   |   | (4.3 | ) |   |   | (17.9 | ) |   |   | — |   |   |   | 3.4 |   |   |   | 49.5 |   |   |   | (7.0 | ) |   |
| **Profit/(loss)  after taxation**                       |       |                                                         | 90.6       |   |   |   | 26.0 |   |   |   | 21.7 |   |   |   | 97.8 |   |   |   | 27.2 |   |   |   | 39.3 |   |   |   | 3.3 |   |   |   | (53.4 | ) |   |   | (78.3 | ) |   |   | 174.2 |   |   |

 

| ** **                                                                                | ** ** | **Fiscal year ended June 30, 2006** | ** ** |
|-------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------|------------|
| ** **                                                                                | ** ** | **Driefontein**                                              | ** ** | **Kloof** | ** ** | **Free State** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                | ** ** | **Division**                                                 | ** ** | **Division** | ** ** | **Beatrix** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                | ** ** | **South**                                                    | ** ** | **South** | ** ** | **South** | ** ** | **Tarkwa** | ** ** | **Damang** | ** ** | ** ** | ** ** | ** ** | ** ** | **Corporate** | ** ** | **Reconciling** | ** ** | **Group** | ** ** |
| ** **                                                                                | ** ** | **Africa**                                                   | ** ** | **Africa** | ** ** | **Africa** | ** ** | **Ghana** | ** ** | **Ghana** | ** ** | **Australia** | ** ** | **Venezuela** | ** ** | **and other** | ** ** | **items** | ** ** | **consolidated** | ** ** |
| **Balance sheet**                                                                         |       |                                                         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                                              |       |                                                         | 472.9      |   |   |   | 363.9 |   |   |   | 144.1 |   |   |   | 387.8 |   |   |   | 84.5 |   |   |   | 635.4 |   |   |   | 111.4 |   |   |   | 1,904.1 |   |   |   | (132.9 | ) |   |   | 3,971.2 |   |   |
| Total liabilities (excluding deferred taxation and  minority shareholders’ interest) |       |                                                         | 173.2      |   |   |   | 152.5 |   |   |   | 80.3 |   |   |   | 53.1 |   |   |   | 17.9 |   |   |   | 77.1 |   |   |   | 22.3 |   |   |   | 242.2 |   |   |   | 449.9 |   |   |   | 1,268.5 |   |   |
| Deferred tax liability/(asset)                                                            |       |                                                         | 150.2      |   |   |   | 132.9 |   |   |   | (10.8 | ) |   |   | 81.7 |   |   |   | 7.5 |   |   |   | 52.8 |   |   |   | — |   |   |   | 272.9 |   |   |   | 34.6 |   |   |   | 721.8 |   |   |
| Capital expenditure                                                                       |       |                                                         | 38.9       |   |   |   | 32.5 |   |   |   | 37.1 |   |   |   | 46.8 |   |   |   | 25.6 |   |   |   | 71.0 |   |   |   | 5.3 |   |   |   | 34.0 |   |   |   | (35.8 | ) |   |   | 255.4 |   |   |

----

(1)         Operating costs for managementreporting purposes includes: Corporate expenditure—$21.9 million, Environmentalrehabilitation—$8.6 million and Employment termination costs—$9.1 million,which are not included in production costs under US GAAP. In addition, goldinventory change is included in production costs under US GAAP.

(2)         Reflects the change in quantity andvalue of broken ore and ore on the heap leach pad during the financial year.

| ** **                                              | ** ** | **Fiscal year ended June 30, 2005** | ** ** |
|---------------------------------------------------------|------------|------------------------------------------|------------|
| ** **                                              | ** ** | **Driefontein**                          | ** ** | **Kloof** | ** ** | **Beatrix** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                              | ** ** | **South**                                | ** ** | **South** | ** ** | **South** | ** ** | **Tarkwa** | ** ** | **Damang** | ** ** | ** ** | ** ** | **Corporate** | ** ** | **Reconciling** | ** ** | **Group** | ** ** |
| ** **                                              | ** ** | **Africa**                               | ** ** | **Africa** | ** ** | **Africa** | ** ** | **Ghana** | ** ** | **Ghana** | ** ** | **Australia** | ** ** | **and other** | ** ** | **items** | ** ** | **consolidated** | ** ** |
| **Statement of operations**                             |       |                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                                                 |       |                                     | 489.7      |   |   |   | 436.4 |   |   |   | 264.5 |   |   |   | 287.5 |   |   |   | 104.3 |   |   |   | 310.7 |   |   |   | — |   |   |   | — |   |   |   | 1,893.1 |   |   |
| Operating costs(1)                                      |       |                                     | (400.4     | ) |   |   | (409.5 | ) |   |   | (262.6 | ) |   |   | (159.5 | ) |   |   | (66.4 | ) |   |   | (231.7 | ) |   |   | — |   |   |   | (22.0 | ) |   |   | (1,552.1 | ) |   |
| Gold inventory change(2)                                |       |                                     | —     |   |   |   | — |   |   |   | — |   |   |   | 1.2 |   |   |   | (2.3 | ) |   |   | 6.2 |   |   |   | — |   |   |   | 2.5 |   |   |   | 7.6 |   |   |
| **Operating profit**                                    |       |                                     | 89.3       |   |   |   | 26.9 |   |   |   | 1.9 |   |   |   | 129.2 |   |   |   | 35.6 |   |   |   | 85.2 |   |   |   | — |   |   |   | (19.5 | ) |   |   | 348.6 |   |   |
| Amortization and depreciation                           |       |                                     | (39.5      | ) |   |   | (55.4 | ) |   |   | (14.1 | ) |   |   | (38.0 | ) |   |   | (5.7 | ) |   |   | (74.0 | ) |   |   | (16.8 | ) |   |   | (31.0 | ) |   |   | (274.5 | ) |   |
| **Net operating profit/(loss)**                         |       |                                     | 49.8       |   |   |   | (28.5 | ) |   |   | (12.2 | ) |   |   | 91.2 |   |   |   | 29.9 |   |   |   | 11.2 |   |   |   | (16.8 | ) |   |   | (50.5 | ) |   |   | 74.1 |   |   |
| Exploration expenditure                                 |       |                                     | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (31.8 | ) |   |   | (14.2 | ) |   |   | (46.0 | ) |   |
| Impairment of assets                                    |       |                                     | (2.0       | ) |   |   | (1.8 | ) |   |   | (9.7 | ) |   |   | — |   |   |   | — |   |   |   | (9.8 | ) |   |   | (18.7 | ) |   |   | (191.1 | ) |   |   | (233.1 | ) |   |
| Other items as detailed in the statement of  operations |       |                                     | 5.0        |   |   |   | 5.0 |   |   |   | (1.1 | ) |   |   | 2.2 |   |   |   | 0.9 |   |   |   | 3.0 |   |   |   | 0.2 |   |   |   | (95.8 | ) |   |   | (80.6 | ) |   |
| Current taxation                                        |       |                                     | (6.4       | ) |   |   | — |   |   |   | 5.9 |   |   |   | (10.3 | ) |   |   | (8.9 | ) |   |   | (7.8 | ) |   |   | (14.7 | ) |   |   | — |   |   |   | (42.2 | ) |   |
| Deferred taxation                                       |       |                                     | 0.3        |   |   |   | 15.6 |   |   |   | (7.0 | ) |   |   | (14.3 | ) |   |   | (3.1 | ) |   |   | 27.8 |   |   |   | 6.6 |   |   |   | 116.7 |   |   |   | 142.6 |   |   |
| **Profit/(loss)  after taxation**                       |       |                                     | 46.7       |   |   |   | (9.7 | ) |   |   | (24.1 | ) |   |   | 68.8 |   |   |   | 18.8 |   |   |   | 24.4 |   |   |   | (75.2 | ) |   |   | (234.9 | ) |   |   | (185.2 | ) |   |

 

F-43

----

 

| ** **                                                                                | ** ** | **Fiscal year ended June 30, 2005** | ** ** |
|-------------------------------------------------------------------------------------------|------------|------------------------------------------|------------|
| ** **                                                                                | ** ** | **Driefontein**                          | ** ** | **Kloof** | ** ** | **Free State** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                | ** ** | **Division**                             | ** ** | **Division** | ** ** | **Beatrix** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                | ** ** | **South**                                | ** ** | **South** | ** ** | **South** | ** ** | **Tarkwa** | ** ** | **Damang** | ** ** | ** ** | ** ** | **Corporate** | ** ** | **Reconciling** | ** ** | **Group** | ** ** |
| ** **                                                                                | ** ** | **Africa**                               | ** ** | **Africa** | ** ** | **Africa** | ** ** | **Ghana** | ** ** | **Ghana** | ** ** | **Australia** | ** ** | **and other** | ** ** | **items** | ** ** | **consolidated** | ** ** |
| **Balance sheet**                                                                         |       |                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                                              |       |                                     | 485.0      |   |   |   | 457.4 |   |   |   | 172.9 |   |   |   | 310.8 |   |   |   | 76.1 |   |   |   | 607.5 |   |   |   | 1,472.1 |   |   |   | 11.1 |   |   |   | 3,592.9 |   |   |
| Total liabilities (excluding deferred taxation and  minority shareholders’ interest) |       |                                     | 139.6      |   |   |   | 170.9 |   |   |   | 111.7 |   |   |   | 36.7 |   |   |   | 16.0 |   |   |   | 84.3 |   |   |   | 69.8 |   |   |   | 460.2 |   |   |   | 1,089.2 |   |   |
| Deferred tax liability/(asset)                                                            |       |                                     | 160.3      |   |   |   | 137.4 |   |   |   | (26.2 | ) |   |   | 75.9 |   |   |   | 3.3 |   |   |   | 37.1 |   |   |   | 97.2 |   |   |   | 111.2 |   |   |   | 596.2 |   |   |
| Capital  expenditure                                                                      |       |                                     | 29.6       |   |   |   | 37.1 |   |   |   | 35.7 |   |   |   | 75.6 |   |   |   | 10.6 |   |   |   | 135.6 |   |   |   | 24.2 |   |   |   | (30.7 | ) |   |   | 317.7 |   |   |

----

(1)         Operating costs for managementreporting purposes: Corporate expenditure—$22.5 million, Environmentalrehabilitation—$11.5 million and Employment termination costs—$13.7 million, whichare not included in production costs under US GAAP. In addition, gold inventorychange is included in production costs under US GAAP.

(2)         Reflects the change in quantity andvalue of broken ore and ore on the heap leach pad during the financial year.

| ** **                                              | ** ** | **Fiscal year ended June 30, 2004** | ** ** |
|---------------------------------------------------------|------------|------------------------------------------|------------|
| ** **                                              | ** ** | **Driefontein**                          | ** ** | **Kloof** | ** ** | **Beatrix** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                              | ** ** | **South**                                | ** ** | **South** | ** ** | **South** | ** ** | **Tarkwa** | ** ** | **Damang** | ** ** | ** ** | ** ** | **Corporate** | ** ** | **Reconciling** | ** ** | **Group** | ** ** |
| ** **                                              | ** ** | **Africa**                               | ** ** | **Africa** | ** ** | **Africa** | ** ** | **Ghana** | ** ** | **Ghana** | ** ** | **Australia** | ** ** | **and other** | ** ** | **items** | ** ** | **consolidated** | ** ** |
| **Statement of operations**                             |       |                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                                                 |       |                                     | 440.4      |   |   |   | 400.9 |   |   |   | 241.4 |   |   |   | 213.2 |   |   |   | 120.0 |   |   |   | 290.3 |   |   |   | — |   |   |   | — |   |   |   | 1,706.2 |   |   |
| Operating costs(1)                                      |       |                                     | (370.8     | ) |   |   | (367.8 | ) |   |   | (229.9 | ) |   |   | (126.6 | ) |   |   | (66.7 | ) |   |   | (202.1 | ) |   |   | — |   |   |   | (20.9 | ) |   |   | (1,384.8 | ) |   |
| Gold inventory change(2)                                |       |                                     | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (0.2 | ) |   |   | (6.6 | ) |   |   | — |   |   |   | (0.3 | ) |   |   | (7.1 | ) |   |
| **Operating profit**                                    | ** ** | ** **                               | **69.6**   |   | ** ** | ** ** | **33.1** | ** ** | ** ** | ** ** | **11.5** | ** ** | ** ** | ** ** | **86.6** |   | ** ** | ** ** | **53.1** |   | ** ** | ** ** | **81.6** |   | ** ** | ** ** | **—** | ** ** | ** ** | ** ** | **(21.2** | **)** | ** ** | ** ** | **314.3** |   |   |
| Amortization and depreciation                           |       |                                     | (33.8      | ) |   |   | (36.0 | ) |   |   | (12.3 | ) |   |   | (14.6 | ) |   |   | (8.1 | ) |   |   | (60.1 | ) |   |   | (14.3 | ) |   |   | (19.4 | ) |   |   | (198.6 | ) |   |
| **Net operating profit/(loss)**                         | ** ** | ** **                               | **35.8**   |   | ** ** | ** ** | **(2.9** | **)** | ** ** | ** ** | **(0.8** | **)** | ** ** | ** ** | **72.0** |   | ** ** | ** ** | **45.0** |   | ** ** | ** ** | **21.5** |   | ** ** | ** ** | **(14.3** | **)** | ** ** | ** ** | **(40.6** | **)** | ** ** | ** ** | **115.7** |   |   |
| Exploration expenditure                                 |       |                                     | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (28.5 | ) |   |   | (11.4 | ) |   |   | (39.9 | ) |   |
| Impairment—Beatrix Shaft No. 4                |       |                                     | —     |   |   |   | — |   |   |   | (61.8 | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (10.9 | ) |   |   | (72.7 | ) |   |
| Other items as detailed in the statement of  operations |       |                                     | 16.3       |   |   |   | (8.8 | ) |   |   | (8.6 | ) |   |   | 0.8 |   |   |   | — |   |   |   | 43.9 |   |   |   | 32.4 |   |   |   | 3.8 |   |   |   | 79.8 |   |   |
| Current taxation                                        |       |                                     | (2.1       | ) |   |   | (0.7 | ) |   |   | (0.7 | ) |   |   | (8.1 | ) |   |   | (4.7 | ) |   |   | (7.1 | ) |   |   | (6.5 | ) |   |   | — |   |   |   | (29.9 | ) |   |
| Deferred taxation                                       |       |                                     | 13.3       |   |   |   | 13.2 |   |   |   | 20.5 |   |   |   | (21.3 | ) |   |   | (5.6 | ) |   |   | (14.1 | ) |   |   | 15.2 |   |   |   | (3.1 | ) |   |   | 18.1 |   |   |
| **Profit/(loss)  after taxation**                       | ** ** | ** **                               | **63.3**   |   | ** ** | ** ** | **0.8** | ** ** | ** ** | ** ** | **(51.4** | **)** | ** ** | ** ** | **43.4** |   | ** ** | ** ** | **34.7** |   | ** ** | ** ** | **44.2** |   | ** ** | ** ** | **(1.7** | **)** | ** ** | ** ** | **(62.2** | **)** | ** ** | ** ** | **71.1** |   |   |

 

| ** **                                                                                | ** ** | **Fiscal year ended June 30, 2004** | ** ** |
|-------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------|------------|
| ** **                                                                                | ** ** | **Driefontein**                                              | ** ** | **Kloof** | ** ** | **Free State** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                | ** ** | **Division**                                                 | ** ** | **Division** | ** ** | **Beatrix** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                | ** ** | **South**                                                    | ** ** | **South** | ** ** | **South** | ** ** | **Tarkwa** | ** ** | **Damang** | ** ** | ** ** | ** ** | **Corporate** | ** ** | **Reconciling** | ** ** | **Group** | ** ** |
| ** **                                                                                | ** ** | **Africa**                                                   | ** ** | **Africa** | ** ** | **Africa** | ** ** | **Ghana** | ** ** | **Ghana** | ** ** | **Australia** | ** ** | **and other** | ** ** | **items** | ** ** | **consolidated** | ** ** |
| **Balance sheet**                                                                         |       |                                                         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                                              |       |                                                         | 502.4      |   |   |   | 519.7 |   |   |   | 207.6 |   |   |   | 245.0 |   |   |   | 79.0 |   |   |   | 502.8 |   |   |   | 1,626.6 |   |   |   | 288.6 |   |   |   | 3,971.7 |   |   |
| Total liabilities (excluding deferred taxation and minority  shareholders’ interest) |       |                                                         | 173.6      |   |   |   | 190.1 |   |   |   | 125.8 |   |   |   | 36.1 |   |   |   | 15.7 |   |   |   | 82.8 |   |   |   | 51.4 |   |   |   | 407.4 |   |   |   | 1,082.9 |   |   |
| Deferred tax liability/(asset)                                                            |       |                                                         | 170.8      |   |   |   | 161.6 |   |   |   | (34.8 | ) |   |   | 61.6 |   |   |   | 0.2 |   |   |   | 59.7 |   |   |   | 110.4 |   |   |   | 239.5 |   |   |   | 769.0 |   |   |
| Capital  expenditure                                                                      |       |                                                         | 34.5       |   |   |   | 49.9 |   |   |   | 42.8 |   |   |   | 136.7 |   |   |   | 3.2 |   |   |   | 127.0 |   |   |   | 23.3 |   |   |   | (39.5 | ) |   |   | 377.9 |   |   |

----

(1)         Operating costs for managementreporting purposes includes: Corporate expenditure—$20.3 million, Environmentalrehabilitation—$8.4 million and Employment termination costs—$10.5 million,which are not included in production costs under US GAAP. In addition, goldinventory change is included in production costs under US GAAP.

(2)         Reflectsthe change in quantity and value of broken ore and ore on the heap leach padduring the financial year.

F-44

----

Thefollowing provides a breakdown of the reconciling items for each line itempresented.

| ** **                                                                                                             | ** ** | **2006**     | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|------------------------------------------------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                                                                                             | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **Operating costs**                                                                                                    | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| On-mine exploration(k)                                                                                                 |       | (8.2         | )          | (9.3         | )          | (14.6        | )          |
| Provision for  rehabilitation(m)                                                                                       |       | (1.0         | )          | (1.3         | )          | —       |       |
| Ghana cut backs(j)                                                                                                     |       | (26.8        | )          | —       |       | —       |       |
| Deferred stripping(p)                                                                                                  |       | (21.4        | )          | (11.4        | )          | (6.3         | )          |
| ** **                                                                                                             | ** ** | **(57.4**    | **)**      | **(22.0**    | **)**      | **(20.9**    | **)**      |
| **Gold inventory**                                                                                                     | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Inventory(r)                                                                                                           |       | (0.4         | )          | 2.5          |       | (0.3         | )          |
| ** **                                                                                                             | ** ** | **(0.4**     | **)**      | **2.5**      | ** ** | **(0.3**     | **)**      |
| **Amortization and depreciation**                                                                                      | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Business  combination—formation of Original Gold Fields(a)                                                        |       | (22.3        | )          | (27.0        | )          | (20.3        | )          |
| Business  combination—formation of Gold Fields(b)                                                                 |       | (3.9         | )          | (4.0         | )          | (3.6         | )          |
| Business  combination—purchase of St. Ives and Agnew(c)                                                           |       | 1.9          |       | 2.3          |       | 2.6          |       |
| Business  combination—purchase of Abosso(d)                                                                       |       | 0.4          |       | 1.0          |       | 0.4          |       |
| Amortization of  reserves(h)(r)(p)                                                                                     |       | (13.0        | )          | (3.1         | )          | (3.3         | )          |
| Ghana cut-backs(j)                                                                                                     |       | 0.2          |       | —       |       | —       |       |
| Amortization—inclusion  of future costs(i)                                                                        |       | 6.5          |       | (0.2         | )          | 6.3          |       |
| Provision for  rehabilitation(m)                                                                                       |       | 1.0          |       | —       |       | (1.5         | )          |
| ** **                                                                                                             | ** ** | **(29.2**    | **)**      | **(31.0**    | **)**      | **(19.4**    | **)**      |
| **Exploration expenditure**                                                                                            | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Exploration costs(k)                                                                                                   |       | (0.6         | )          | (14.2        | )          | (11.4        | )          |
| ** **                                                                                                             | ** ** | **(0.6**     | **)**      | **(14.2**    | **)**      | **(11.4**    | **)**      |
| **Impairment**                                                                                                         | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Impairment of assets(g)                                                                                                |       | —       |       | (191.1       | )          | (10.9        | )          |
|                                                                                                                   |       | —       |       | (191.1       | )          | (10.9        | )          |
| **Other items as detailed in the statement of  operations**                                                            |       |         |       |         |       |         |       |
| Post-retirement medical  benefits(o)                                                                                   |       | (0.1         | )          | 4.0          |       | 4.5          |       |
| Share-based  compensation(l)                                                                                           |       | (0.9         | )          | (2.1         | )          | —       |       |
| Investments in  affiliates(n)                                                                                          |       | (0.1         | )          | 1.4          |       | —       |       |
| Write-down of  investments(q)                                                                                          |       | —       |       | (7.7         | )          | —       |       |
| Mvelaphanda  transaction—interest paid(t)                                                                         |       | (47.4        | )          | (43.2        | )          | (12.4        | )          |
| Mvelaphanda  transaction—debt issuance costs(t)                                                                   |       | (0.9         | )          | 0.8          |       |         |       |
| Mvelaphanda  transaction—fair value hedge accounting(t)                                                           |       | —       |       | —       |       | 11.7         |       |
| Mvelaphanda  transaction—profit on close out of hedge(t)                                                          |       | 9.2          |       | (49.0        | )          | —       |       |
| ** **                                                                                                             | ** ** | **(40.2**    | **)**      | **(95.8**    | **)**      | **3.8**      | ** ** |
| **Total liabilities excluding deferred income and  mining taxes, minority interests and shareholders’ interests** | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Provision for  rehabilitation(m)                                                                                       |       | 1.1          |       | (0.6         | )          | 2.4          |       |
| Post-retirement medical  benefits(o)                                                                                   |       | 5.0          |       | 5.4          |       | 9.7          |       |
| Mvelaphanda  transaction—debt issuance cost(t)                                                                    |       | 4.3          |       | 4.8          |       | 5.1          |       |
| Mvelaphanda  transaction—fair value hedge accounting(t)                                                           |       | 21.7         |       | 32.8         |       | (11.0        | )          |
| Mvelaphanda  transaction—classification of instrument(t)                                                          |       | 330.3        |       | 366.2        |       | 389.5        |       |
| Mvelaphanda  transaction—interest paid(t)                                                                         |       | 87.5         |       | 51.6         |       | 11.7         |       |
| ** **                                                                                                             | ** ** | **449.9**    | ** ** | **460.2**    | ** ** | **407.4**    | ** ** |
| **Total assets**                                                                                                       | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** |
| Business  combination—formation of Original Gold Fields(a)                                                        |       | 6.0          |       | 27.1         |       | 55.9         |       |

F-45

----

 

| Business  combination—formation of Gold Fields(b)       |       | 52.7       |   | 61.9     |       | 69.8      |       |
|--------------------------------------------------------------|------------|------------|--------|----------|------------|-----------|------------|
| Business  combination—purchase of St. Ives and Agnew(c) |       | (6.2       | )      | (8.7     | )          | (11.5     | )          |
| Business  combination—purchase of Abosso(d)             |       | (2.0       | )      | (2.4     | )          | (0.6      | )          |
| Business combination—purchase  of Bolivar(e)            |       | (52.0      | )      | —   |       | —    |       |
| Business  combination—acquired tax losses(f)            |       | —     |   | —   |       | (10.5     | )          |
| Mvelaphanda  transaction—debt issuance costs(t)         |       | 2.4        |   | 3.6      |       | 5.1       |       |
| Ghana cut-backs(j)                                           |       | (26.6      | )      | —   |       | —    |       |
| Impairment of assets(g)                                      |       | 124.3      |   | 137.8    |       | 345.2     |       |
| Amortization of  reserves(h)                                 |       | (55.2      | )      | (44.8    | )          | (38.5     | )          |
| Amortization—inclusion  of future costs(i)              |       | 14.6       |   | 8.7      |       | 8.1       |       |
| Exploration costs(k)                                         |       | (104.8     | )      | (101.8   | )          | (78.2     | )          |
| Provision for rehabilitation(m)                              |       | (6.5       | )      | (8.9     | )          | (11.8     | )          |
| Investments in  affiliates(n)                                |       | (2.6       | )      | (2.8     | )          | —    |       |
| Deferred  stripping(p)(h)(i)(j)                              |       | (41.7      | )      | (21.9    | )          | (9.2      | )          |
| Inventory(r)                                                 |       | 1.8        |   | 2.3      |       | 0.3       |       |
| Impairment of Agnew(s)                                       |       | (37.1      | )      | (39.0    | )          | (35.5     | )          |
| ** **                                                   | ** ** | **(132.9** | **)**  | **11.1** | ** ** | **288.6** | ** ** |

 

**Notes tothe reconciliation of segment information to the historical financialstatements**

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(a)    Businesscombination—formation of Original Gold Fields

For management reportingpurposes, the formation of Original Gold Fields was accounted for as auniting-of-interests. Under US GAAP, the Company accounted for the assets andliabilities acquired from Gold Fields of South Africa Limited at historicalcost, and the assets and liabilities acquired from Gencor and outsideshareholders as a purchase.

(b)   Business combination—formationof Gold Fields

For management reportingpurposes, the difference between the purchase price and net asset value ofacquired assets that arose on this transaction was set-off againstshareholders’ equity. Under US GAAP, the excess purchase price wascapitalized to property, plant and equipment and is being amortized over itsuseful life.

(c)    Businesscombination—purchase of St. Ives and Agnew

For management reportingpurposes, traded equity securities issued as consideration in a businesscombination are valued on the date they are issued. Under US GAAP, tradedequity securities issued as consideration in a business combination are valueda few days before and after the terms of the transaction are announced.

(d)   Businesscombination—purchase of Abosso 

For management reporting purposes, traded equitysecurities issued as consideration in a business combination are valued on thedate they are issued. Under US GAAP, traded equity securities issued asconsideration in a business combination are valued a few days before and afterthe terms of the transaction are announced.

F-46

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(e)    Business combination—purchase of Bolivar

For management reportingpurposes, the entire interest acquired in Bolivar was fair valued upon gaininga controlling interest. Under US GAAP, only the additional interestacquired was fair valued.

(f)    Businesscombination—acquired tax losses

For management reportingpurposes, for tax losses acquired which result subsequently in deferred taxassets being recognized, the benefit is recorded in income. Under US GAAP,when tax losses which have been acquired for which deferred tax assets havebeen recognized, and against which a valuation allowance has been recordedwhich is subsequently released, the release of the valuation allowance recordedagainst deferred tax assets is first charged against goodwill and any otherintangible assets, with the remaining balance of the valuation allowancerelease recognized in income.

(g)    Impairmentof assets 

For management reportingpurposes, higher impairment charges were recognized in fiscal 2005 and 2004based upon the higher values assigned to the assets acquired as part of theOriginal Gold Fields formation, than that which was recognized under US GAAP.In addition, prior to fiscal 2003, impairment charges were recorded formanagement purposes based on discounted cash flows, but not recorded under USGAAP, since the undiscounted cash flows exceeded the carrying amounts of theassets under US GAAP.

(h)   Amortizationof reserves 

For management reportingpurposes, a portion of ore resources at the Australian operations, based on thephilosophy of “endowment”, is used for calculating depreciation andamortization. Under US GAAP, depreciation and amortization is calculatedbased upon existing proven and probable reserves.

(i)    Amortization—inclusionof future costs 

For management reportingpurposes, future mine development costs are included in mining assets incalculating depreciation and amortization. Under US GAAP, future developmentcosts are not included in the calculation of depreciation and amortization.

(j)     Ghanacut-backs 

For management reportingpurposes, waste laybacks at surface operations are capitalized as minedevelopment costs. Under U.S. GAAP, once the production phase of a mine has commenced,waste laybacks are considered variable production costs that should be includedas a component of inventory to be recognized in ‘Production costs exclusive ofdepreciation and amortization’ in the same period as the revenue from the saleof inventory. As a result, capitalization of waste laybacks is appropriate onlyto the extent product inventory exists at the end of a reporting period.

(k)   Explorationcosts 

For management reporting purposes, exploration costsare capitalized from the date the drilling program confirms sufficient evidenceof mineralization to proceed with a feasibility study. Under US GAAP,exploration costs are capitalized from the date a bankable feasibility study iscompleted.

F-47

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(l)    Share-basedcompensation 

For management reportingpurposes, share-based compensation expense is recognized on a fair value basisfor all grants subsequent to November 7, 2002 but that were unvested onJuly 1, 2005. Under US GAAP, subsequent to June 30, 2005 thecompany recognized share-based compensation expense for the fair value ofoptions granted subsequent to June 30, 2005. Prior to July 1,2005,the Company recognized share-based compensation expense based upon thedifference between the option grant price and the market price at the date ofgrant or modification.                

(m)  Provisionfor rehabilitation 

(i)    Amortization of rehabilitation asset 

The rehabilitation asset’s carrying value formanagement reporting purposes is different to that under US GAAP, which resultsin a different amortization charge.

(ii)   Revisions to the asset retirement obligation

The current discount rateis applied to measure the retirement obligation for management reportingpurposes. Under US GAAP any decreases in the asset retirement obligation as aresult of downward revisions in cash flow estimates should be treated as amodification of an existing asset retirement obligation, and should be measuredat the historical discount rate used to measure the initial asset retirementobligation.

(n)   Investmentsin affiliates

For management reportingpurposes an equity investment exceeding a 20% shareholding was treated as anavailable-for-sale investment prior to fiscal 2003. Under US GAAP thisinvestment was accounted for under the equity method since acquisition.

(o)   Post-retirementmedical benefits

For management reportingpurposes, only the employer’s contribution liability is accounted for. Under USGAAP, the liability includes certain employees’ cross subsidy liabilities.

(p)   Deferredstripping

For management reportingpurposes, the Company defers the waste stripping costs in excess of theexpected average pitlife stripping ratio. Under US GAAP waste stripping costsare considered costs of the extracted minerals and recognized as a component ofinventory to be recognized in costs applicable to sales in the same period asthe revenue from the sale of inventory.

(q)   Write-downof investments

Under US GAAP, were thefair value of available for sale investments are lower than their original costfor a continuous period of longer than 12 months, the unrealized loss isrecognized in the consolidated statements of operations. For managementreporting purposes, the unrealized losses on these investments have remained inother comprehensive income.

(r)    Inventory

Under US GAAP additionalamortization and waste normalization are included in the cost of inventoryproduced. No such absorption of costs occurred for management reportingpurposes. Additionally, for management reporting purposes, no adjustment isrequired to record inventory at 

F-48

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net realizable value.Under US GAAP, due to the impact of the amortization adjustments on theinventory valuation, an adjustment is required to record inventory at netrealizable value.

(s)    Impairmentof Agnew

For management reportingpurposes, the Agnew mine was not determined to be impaired in fiscal 2003.Under US GAAP, the Agnew mine was determined to be impaired and animpairment charge was recognized.

(t)    Mvelaphanda transaction

·  classification of instrument

For management reporting purposes the Mvela loan issplit between a debt component and an equity component. Under US GAAP the Mvelaloan is classified as debt.

·  interest paid

Due to the classification of the Mvela loan as debtunder US GAAP, additional interest is charged to the income statement.

·  debt issuance cost

For management reporting purposes debt issuance costis set off against debt. Under US GAAP debt issuance cost is recorded as adeferred cost within accounts receivable.

·  fair value hedge accounting

For management reporting purposes only the amortizingswap is treated as a fair value hedge in relation to the debt component of theMvela loan. Under US GAAP both the amortizing and accreting swap are treated asa fair value hedge as the entire loan is classified as debt.

·  Profit on close out of hedge

For management reporting purposes the profit onclose-out of the interest rate swaps was accounted for in earnings at the timethe swaps were closed out. Under US GAAP the profit is deferred and amortizedto earnings over the life of the hedged item.

F-49

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**Report of theIndependent Registered Public Accounting Firm**

**To the Board of Directors and Shareholders of GoldFields Limited**

We have audited the consolidated balance sheets ofGold Fields Limited and its subsidiaries as of June 30, 2006 and 2005, andthe related consolidated statements of operations, comprehensive income, cashflows and changes in shareholders’ equity for each of the three years in theperiod ended June 30, 2006 and have issued our report thereon dated November 24,2006, included elsewhere in this Annual Report on Form 20-F. Ouraudits also included the financial statement schedule listed in Item 18 of thisAnnual Report on Form 20-F. This financial statement schedule is theresponsibility of the Company’s management. Our responsibility is to express asopinion on the financial statement schedule.

In ouropinion, the financial statement schedule present fairly, in all materialrespects, the information set forth therein when read in conjunction with therelated consolidated financial statements.
| **PricewaterhouseCoopers Inc**         |
|----------------------------------------|
| Johannesburg, Republic of South Africa |
| November 24, 2006                 |

 

S-1

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**Schedule 1—Valuation and Qualifying Accounts**

| ** **                        | ** ** | **Balance at  beginning  of period** | ** ** | **Charged  to costs  and  expenses** | ** ** | **Foreign  currency  translation  adjustment** | ** ** | **Deduction** | ** ** | **Balance  at end of  period** | ** ** |
|-----------------------------------|------------|------------------------------------------------|------------|-------------------------------------------|------------|------------------------------------------------|------------|---------------|------------|------------------------------------------|------------|
| **Year ended June 30, 2006** | ** ** |                                           | ** ** | ** **                                |       |                                           | ** ** | ** **    |       |                                     | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Valuation  allowance              |       |                                           | 36.2       | ** **                                |       |                                           | 4.7        | ** **    |       |                                     | 2.5        |   |   |   | — | ** ** |   |   | 43.4 | ** ** |   |
| **Year ended June 30, 2005** | ** ** |                                           | ** ** | ** **                                |       |                                           | ** ** | ** **    |       |                                     | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Valuation  allowance              |       |                                           | 37.0       | ** **                                |       |                                           | 1.4        | ** **    |       |                                     | (2.2       | ) |   |   | — | ** ** |   |   | 36.2 | ** ** |   |
| **Year ended June 30, 2004** | ** ** |                                           | ** ** | ** **                                |       |                                           | ** ** | ** **    |       |                                     | ** ** | ** ** |   |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| Valuation allowance               |       |                                           | 34.2       | ** **                                |       |                                           | —     | ** **    |       |                                     | 2.8        |   |   |   | — | ** ** |   |   | 37.0 | ** ** |   |

S-2

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**Exhibits**

Thefollowing instruments and documents are included as Exhibits to this annualreport.

| No.                            | ** ** | ** **                                                                                                                                                                                                                                                                                                             | ** ** | **Exhibit** |
|--------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|
| 1.1(†)                    |       | Memorandum of  Association of Gold Fields                                                                                                                                                                                                                                                                              |
| 1.2(†)                    |       | Articles of  Association of Gold Fields                                                                                                                                                                                                                                                                                |
| 2.1(†)                    |       | Memorandum of  Association of Gold Fields (included in Exhibit 1.1)                                                                                                                                                                                                                                               |
| 2.2(†)                    |       | Articles of  Association of Gold Fields (included in Exhibit 1.2)                                                                                                                                                                                                                                                 |
| 2.3(††)              |       | Deposit Agreement  among Gold Fields, Gold Fields Limited (f/k/a/Driefontein Consolidated  Limited), The Bank of New York, as depositary, and the owners and beneficial  owners from time to time of American Depositary Receipts, dated as of  February 2, 1998, as amended and restated as of May 21, 2002 |
| 2.4(††)              |       | Form of  American Depositary Receipt (included in Exhibit 2.3)                                                                                                                                                                                                                                               |
| 2.5(†)                    |       | Excerpts of  relevant provisions of the South African Companies Act                                                                                                                                                                                                                                                    |
| 2.6(†)                    |       | Excerpts of  relevant provisions of the JSE Limited listing requirements                                                                                                                                                                                                                                               |
| 4.1(†)                    |       | The GF  Non-Executive Director Share Plan, adopted October 31, 2001                                                                                                                                                                                                                                               |
| 4.2(†)                    |       | The GF Management  Incentive Scheme, adopted November 10, 1999                                                                                                                                                                                                                                                    |
| 4.3(††††)  |       | Deed of Amendment  to the GF Non-Executive Share Plan, adopted December 6, 2002                                                                                                                                                                                                                                   |
| 4.4(††††)  |       | Deed of Amendment  to the GF Management Incentive Scheme between Gold Fields Limited and Tokyo  Mosima Gabriel Sexwale and Gordon Rae Parker, both in their capacity as  trustees for The GF Management Incentive Trust, adopted May 4, 2001                                                                      |
| 4.5(††††)  |       | Deed of Amendment  to the GF Management Incentive Scheme between Gold Fields Limited and Tokyo  Mosima Gabriel Sexwale and Gordon Rae Parker, both in their capacity as  trustees for The GF Management Incentive Trust, adopted October 31, 2001                                                                 |
| 4.6(††††)  |       | Exploration  Incentive Plan, adopted on May 25, 1999, as amended on August 22,  2000                                                                                                                                                                                                                         |
| 4.7(††††)  |       | Agreement between  Ian D. Cockerill and Gold Fields Guernsey Limited, effective March 1,  2004                                                                                                                                                                                                                    |
| 4.8(††††)  |       | Service Agreement  between Ian D. Cockerill and GFL Mining Services Ltd., effective  March 1, 2004                                                                                                                                                                                                                |
| 4.9(††††)  |       | Service Agreement  between Nicholas J. Holland and GFL Mining Services Ltd., effective  March 1, 2004                                                                                                                                                                                                             |
| 4.10(††††) |       | Agreement between  Nicholas J. Holland and Gold Fields Guernsey Limited, effective March 1,  2004                                                                                                                                                                                                                 |
| 4.11(††††) |       | Memorandum of  Agreement between Anglogold Limited and Driefontein Consolidated  (Proprietary) Limited, dated September 18, 2003                                                                                                                                                                                  |
| 4.12(††††) |       | First Addendum of  Agreement between Anglogold Limited and Driefontein Consolidated  (Proprietary) Limited, dated January 27, 2004.                                                                                                                                                                               |
| 4.13(†††)       |       | Purchase  Agreement between Outokumpu Nickel B.V., Outokumpu Mining Oy, Gold Fields Exploration  B.V. and Gold Fields Finland Oy, dated September 4, 2003                                                                                                                                                         |
| 4.14(†††)       |       | Reorganization  Agreement between Beatrix Mining Ventures Limited, Driefontein Consolidated  (Proprietary) Limited, Kloof Gold Mining Company Limited, GFL Mining Services  Limited, Gold Fields Limited and Newshelf 706 Limited, dated July 25,  2003                                                           |

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| 4.15(††††)       |   | Addendum Number 1 to the  Reorganization Agreement between Beatrix Mining Ventures Limited, Driefontein  Consolidated (Proprietary) Limited, Kloof Gold Mining Company Limited, GFL  Mining Services Limited, Gold Fields Limited and Newshelf 706 Limited, dated  February 12, 2004                                                    |
|--------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.16(†††)             |   | Covenants  Agreement between Gold Fields Limited, Mvelaphanda Resources Limited,  Lexshell 579 Investments (Proprietary) Limited and Newshelf 706 Limited,  dated November 26, 2003                                                                                                                                                     |
| 4.17(†††)             |   | Subscription and  Share Exchange Agreement amongst Lexshell 579 Investments (Proprietary)  Limited, GFL Mining South Africa Limited and Gold Fields Limited dated  December 11, 2003                                                                                                                                                    |
| 4.18(†††)             |   | GFI-SA Loan  Agreement amongst Lexshell 579 Investments (Proprietary) Limited, First Rand  Bank Limited, GFI Mining South Africa Limited, Gold Fields Limited, Gold  Fields Australia Proprietary Limited and Gold Fields Guernsey Limited dated  December 11, 2003                                                                     |
| 4.19(††††)       |   | Addendum to GFI-SA  Loan Agreement among Gold Fields, Mvela Gold, Gold Fields Australia, Gold  Fields Guernsey Limited and GFI-SA, dated February 13, 2004                                                                                                                                                                              |
| 4.20(††††)       |   | PIC Put Option  Agreement between Public Investment Corporation, GFL Mining Services Limited  and Gold Fields Limited dated February 13, 2004                                                                                                                                                                                           |
| 4.21(††††)       |   | Agreement between  Gold Fields Limited, GFL Mining Services Limited, Mvelaphanda Resources  Limited, GFI Mining South Africa Limited, and Mvelaphanda Gold (Proprietary)  Limited, dated November 17, 2004                                                                                                                              |
| 4.22(††††)       |   | Second Addendum  to GFI-SA Loan Agreement among Mvelaphanda Gold (Proprietary) Limited, First  Rand Bank Limited (acting through its Rand Merchant Bank Division), GFI  Mining South Africa (Proprietary) Limited, Gold Fields Limited, Gold Fields  Australia Pty Limited, and Gold Fields Guernsey Limited, dated  November 17, 2004  |
| 4.23(†††††) |   | The Gold Fields  Limited and Bolivar Gold Corporation Arrangement Agreement, dated  December 1, 2005                                                                                                                                                                                                                                    |
| 4.24(†††††) |   | The Gold Fields  Limited 2005 Non-Executive Share Plan, adopted November 17, 2005                                                                                                                                                                                                                                                       |
| 4.25(†††††) |   | The Gold Fields  Limited 2005 Share Plan, adopted November 17, 2005                                                                                                                                                                                                                                                                     |
| 4.26                                 |   | Agreement between  Gold Fields Limited, GFL Mining Services Limited, Mvelaphanda Resources  Limited, GFI Mining South Africa Limited, and Mvelaphanda Gold (Proprietary)  Limited, dated July 17, 2006                                                                                                                                  |
| 4.27                                 |   | Acquisition and  Framework Agreement between North American Palladium Limited, Gold Fields  Exploration BV, Gold Fields Finland Oy and North American Palladium Finland  Oy, dated March 24, 2006, as amended on May 12, 2006                                                                                                      |
| 4.28                                 |   | Service Agreement  between Gold Fields Arctic Platinum Oy, North American Palladium Limited and  North American Palladium Arctic Services Oy, dated March 24, 2006                                                                                                                                                                      |
| 4.29                                 |   | US$250,000,000  Facility Agreement between Orogen Holding (BVI) Limited, Gold Fields Limited,  GFI Mining South Africa (Proprietary) Limited, Gold Fields Holdings Company  (BVI) Limited, Barclays Capital, J.P. Morgan Plc, Financial Institutions (as  defined in the Facility) and J.P. Morgan Europe Limited, dated March 3,  2006 |
| 4.30                                 |   | Share Purchase Agreement between PDG  Aureate Limited, Barrick Gold Corporation and Gold Fields Limited, dated  September 11, 2006                                                                                                                                                                                                      |

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| 4.31 |   | Agreement between Gold Fields Limited,  JCI Limited, JCI Investment Finance (Proprietary) Limited and JCI Gold  Limited, dated September 11, 2006                                                                                                                                                                                      |
|------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.32 |   | US$150,000,000  Facility Agreement between Gold Fields La Cima S.A., The Royal Bank of  Scotland plc, Citigroup Global Markets Inc., The Bank of Nova Scotia, The  Bank of Nova Scotia Trust Company of New York, Scotiabank Peru S.A.A and  Financial Institutions (as defined in the Facility), dated November 14,  2006             |
| 4.33 |   | US$1,800,000,000  Facility Agreement between GFI Mining South Africa (Proprietary)  Limited, The Subsidiaries (as defined in the Facility), Citibank, N.A.  London Branch, J.P. Morgan Plc, Financial Institutions (as defined  in the Facility) and J.P. Morgan Europe Limited, dated November 24, 2006 |
| 8.1  |   | Amended list of  subsidiaries of the registrant                                                                                                                                                                                                                                                                                             |
| 12.1 |   | Certification of  Chief Executive Officer                                                                                                                                                                                                                                                                                                   |
| 12.2 |   | Certification of  Chief Financial Officer                                                                                                                                                                                                                                                                                                   |
| 13.1 |   | Certification of  Chief Executive Officer                                                                                                                                                                                                                                                                                                   |
| 13.2 |   | Certification of  Chief Financial Officer                                                                                                                                                                                                                                                                                                   |

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(†)          Incorporated by reference to the registration statement onForm 20-F (File No. 1-31318), filed by Gold Fields withthe Securities and Exchange Commission on May 6, 2002.

(††)        Incorporated by reference to the annualreport on Form 20-F (File No. 1-31318), filed by GoldFields with the Securities and Exchange Commission on October 24, 2002.

(†††)     Incorporated by reference to the annualreport on Form 20-F (File No. 1-31318), filed by GoldFields with the Securities and Exchange Commission on December 29, 2003.

(††††)   Incorporated by reference to the annualreport on Form 20-F (File No. 1-31318), filed by GoldFields with the Securities and Exchange Commission on November 26, 2004.

(†††††) Incorporated by reference to the annual reporton Form 20-F (File No. 1-31318), filed by Gold Fieldswith the Securities and Exchange Commission on December 22, 2005.

 

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