**As filed with the Securities and Exchange Commissionon December 22, 2005**

 

 

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

 

**Washington, D.C. 20549**

 

**Form 20-F**

 

**(Mark One)**

 

| **o**      | ** ** | **REGISTRATION  STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE  ACT OF 1934** |
|------------|------------|----------------------------------------------------------------------------------------------------------------|
|       |       | **    or**                                                                                 |
| **ý** | ** ** | **ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF  1934**                |
|       |       | **For the  fiscal year ended June 30, 2005**                                                              |
|       |       | **    or**                                                                                 |
| **o**      | ** ** | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF  1934**            |
|       |       | **For the  transition period from    to   **                                     |

 

**Commission file number: 1-31318**

 

**Gold Fields Limited**

(Exact name of registrant as specified inits charter)

 

**Republic of South Africa**

(Jurisdiction of incorporation ororganization)

 

**24 St Andrews Road,**

**Parktown, 2193**

**South Africa**

**011-27-11-644-2400**

(Address of principal executive offices)

 

Securities registered or to be registered pursuant to Section 12(b) ofthe Act:

 

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

New York  Stock Exchange |

 

* Not for trading, but onlyin connection with the registration of the American Depositary Shares pursuantto the requirements of the Securities and Exchange Commission.

 

Securities registered or to be registered pursuant to Section 12(g) ofthe Act:

**None**

(Title of Class)

 

Securities for which there is a reporting obligation pursuant to Section 15(d) ofthe Act:

**None**

(Title of Class)

 

Indicate the number ofoutstanding shares of each of the issuer’s classes of capital or common stockas of the close of the period covered by the Annual Report:

 

Ordinary shares of par value Rand 0.50 each 492,294,226

 

Indicate by check mark whetherthe registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange of 1934 during the preceding12 months (or for such shorter period that the registrant was required tofile such reports), and (2) has been subject to such filing requirementsfor the past 90 days:  Yes  ý  No  o

 

Indicate by check mark whichfinancial statement item the registrant has elected to follow:Item 17  o  Item 18  ý

 

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ii

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**Presentation of Financial Information**

 

Gold Fields is a SouthAfrican company and the majority of its operations, based on gold production,are located there. Accordingly, its books of account are maintained in SouthAfrican Rand and its annual and interim financial statements are prepared inaccordance with International Financial Reporting Standards, or IFRS, asprescribed by law. Gold Fields also prepares annual financial statements inaccordance with United States Generally Accepted Accounting Principles, or U.S.GAAP, which are translated into U.S. dollars. Except as otherwise noted, thefinancial information included in this annual report has been prepared inaccordance with U.S. GAAP and is presented in U.S. dollars, and descriptions ofsignificant accounting policies refer to accounting policies under U.S. GAAP.

 

For Gold Fields’ financialstatements, unless otherwise stated, balance sheet item amounts are translatedfrom Rand to U.S. dollars at the exchange rate prevailing on the date of thebalance sheet (Rand 6.67 per $1.00 as of June 30, 2005), except forspecific items included within shareholders’ equity that are translated at therate prevailing on the date the relevant transaction was entered into, andstatement of operations item amounts are translated from Rand to U.S. dollarsat the weighted average exchange rate for each period (Rand 6.20 per $1.00 forthe year ended June 30, 2005).

 

In this annual report, GoldFields presents the financial items “total cash costs,” “total cash costs perounce,” “total production costs” and “total production costs per ounce,” whichhave been determined using industry standards promulgated by the Gold Instituteand are not U.S. GAAP measures. An investor should not consider these items inisolation or as alternatives to production costs, net income/(loss), incomebefore tax, operating cash flows or any other measure of financial performancepresented in accordance with U.S. GAAP. While the Gold Institute has provideddefinitions for the calculation of total cash costs and total production costs,the calculation of total cash costs, total cash costs per ounce, totalproduction costs and total production costs per ounce may vary significantlyamong gold mining companies, and by themselves do not necessarily provide abasis for comparison with other gold mining companies. See “Key Information —Selected Historical Consolidated Financial Data,” “Information on the Company —Glossary of Mining Terms — Total cash costs per ounce” and “Information on theCompany — Glossary of Mining Terms — Total production costs per ounce.”

 

**Defined Terms and Conventions**

 

In this annual report, allreferences to “South Africa” are to the Republic of South Africa, allreferences to “Ghana” are to the Republic of Ghana, all references to “Australia”are to the Commonwealth of Australia, all references to “Finland” are to theRepublic of Finland and all references to “Peru” are to the Republic of Peru.

 

This annual report containsdescriptions of gold mining and the gold mining industry, includingdescriptions of geological formations and mining processes. In order tofacilitate 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 annual report, “R”and “Rand” refer to the South African Rand, “cents” and “Rand cents” refer tosubunits of the South African Rand, “GHC” and “Cedi” refer to Ghanaian Cedi, “$”and “U.S. dollars” refer to United States dollars, “U.S. cents” refers tosubunits of the U.S. dollar, “A$” and “Australian dollars” refer to Australiandollars and “C$” refers to Canadian dollars.

 

In this annual report, goldproduction figures are provided in troy ounces, which are referred to as “ounces,”or “oz,” and ore grades are provided in grams per metric tonne, which arereferred to as “grams per tonne” or “g/t.” All references to “tonnes” or “t” inthis annual report are to metric tonnes. See “Information on the Company —Glossary of Mining Terms” for further information regarding units ofmeasurement used in this annual report and a table providing rates ofconversion between different units of measurement.

 

In this annual report,except where otherwise noted, all production and operating statistics are basedon Gold Fields’ total operations, which include production from the Tarkwa andDamang mines in Ghana which is attributable to the minority shareholders inthose mines.

 

For the convenience of thereader, certain information in this annual report presented in Rand andAustralian dollars has been translated into U.S. dollars. Unless otherwisestated, the conversion rates for these translations are Rand 6.46 per $1.00 andA$1.00 per $0.74 , which were the noon buying rates on November 30, 2005.By including convenience currency translations, Gold Fields is not representingthat the Rand and Australian dollar amounts actually represent the U.S. dollaramounts shown or that these amounts could be converted into U.S. dollars at therates indicated.

 

**Forward-Looking Statements**

 

This annual report containsforward-looking statements with respect to Gold Fields’ financial condition,results of operations, business strategies, operating efficiencies, competitiveposition, growth opportunities for existing services, plans and objectives ofmanagement, markets for stock and other matters. Statements in this annualreport that are not historical facts are “forward-looking statements.”

 

These forward-lookingstatements, including, among others, those relating to the future businessprospects, revenues and income of Gold Fields, wherever they may occur in thisannual report and the exhibits to the annual report, are necessarily estimatesreflecting the best judgment of the senior management of Gold Fields andinvolve a number of risks and uncertainties that could cause actual results todiffer materially from those suggested by the forward-looking statements. As aconsequence, these forward-looking statements should be considered

 

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in light of variousimportant factors, including those set forth in this annual report. Importantfactors that could cause actual results to differ materially from estimates orprojections contained in the forward-looking statements include, withoutlimitation:

 

•    overall economic and business conditions inSouth Africa, Ghana, Australia and elsewhere; 

•    the ability to achieve anticipatedefficiencies and other cost savings in connection with past and futureacquisitions; 

•    the success of exploration and developmentactivities; 

•    decreases in the market price of gold; 

•    the occurrence of hazards associated withunderground and surface gold mining; 

•    the occurrence of labor disruptions; 

•    availability, terms and deployment ofcapital; 

•    changes in relevant government regulations,particularly environmental regulations and potential new legislation affectingmining and mineral rights; 

•    fluctuations in exchange rates, currencydevaluations and other macroeconomic monetary policies; and 

•    political instability in South Africa, Ghanaand regionally. 

 

Gold Fields undertakes noobligation to update publicly or release any revisions to these forward-lookingstatements to reflect events or circumstances after the date of this annualreport or to reflect the occurrence of unanticipated events.

 

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**TABLE OF CONTENTS**

 
| 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                                                     | 19  |
| Item 5: OPERATING AND FINANCIAL REVIEW  AND PROSPECTS                                  | 73  |
| Item 6: DIRECTORS, SENIOR MANAGEMENT  AND EMPLOYEES                                    | 107 |
| Item 7: MAJOR SHAREHOLDERS AND RELATED  PARTY TRANSACTIONS                             | 125 |
| Item 8: FINANCIAL INFORMATION                                                          | 129 |
| Item 9: THE OFFER AND LISTING                                                          | 130 |
| Item 10: ADDITIONAL INFORMATION                                                        | 133 |
| Item 11: QUANTITATIVE AND QUALITATIVE  DISCLOSURE ABOUT MARKET RISK                    | 147 |
| Item 12: DESCRIPTION OF SECURITIES  OTHER THAN EQUITY SECURITIES                       | 153 |
| Part II                                                                                | 154 |
| Item 13: DEFAULTS, DIVIDEND ARREARAGES  AND DELINQUENCIES                              | 154 |
| Item 14: MATERIAL MODIFICATIONS TO THE  RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 155 |
| Item 15: CONTROLS AND PROCEDURES                                                       | 156 |
| Item 16A: AUDIT COMMITTEE FINANCIAL EXPERT                                             | 157 |
| Item 16B: CODE OF ETHICS                                                               | 158 |
| Item 16C: PRINCIPAL ACCOUNTANT FEES  AND SERVICES                                      | 159 |
| Item 16D: EXEMPTIONS FROM THE LISTING  STANDARDS FOR AUDIT COMMITTEES                  | 160 |
| Item 16E: PURCHASES OF EQUITY  SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS      | 161 |
| Part III                                                                               | 162 |
| Item 17: FINANCIAL STATEMENTS                                                          | 162 |
| Item 18: FINANCIAL STATEMENTS                                                          | 163 |
| Item 19: EXHIBITS                                                                      | 164 |
| SIGNATURES                                                                                  | 166 |

 

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**Part I**

 

**Item 1: IDENTITY OF DIRECTORS, SENIOR MANAGEMENT ANDADVISERS**

 

Not applicable.

 

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

 

Not applicable.

 

**Item 3:KEY INFORMATION**

 

**SelectedHistorical Consolidated Financial Data**

 

The selected historicalconsolidated financial data set out below for the three years ended June 30,2005, and as of June 30, 2005, 2004 and 2003 have been extracted from themore detailed information, including Gold Fields’ audited consolidatedfinancial statements for those years and as of those dates and the relatednotes, which appear elsewhere in this annual report. The selected historicalconsolidated financial data for the two years ended June 30, 2002, and asof June 30, 2002 and 2001 have been derived from Gold Fields’ auditedconsolidated financial statements as of that date, which are not included inthis annual report. The selected historical consolidated financial datapresented below have been prepared in accordance with U.S. GAAP.

 
| ** **                                                     | ** ** | **Year ended June 30,**                       | ** ** |
|----------------------------------------------------------------|------------|----------------------------------------------------|------------|
| ** **                                                     | ** ** | **2001**                                           | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** |
| ** **                                                     | ** ** | **(in $millions, except where  otherwise noted )** | ** ** |
| **Statement  of Operations Data**                              | ** ** | ** **                                         |       |   |   |   |   |   |   |   |   |
| Revenues(1)                                                    |       | 1,006.6                                            |       | 1,210.0 |   | 1,538.2 |   | 1,706.2 |   | 1,893.1 |   |
|                                                           |       |                                               |       |   |   |   |   |   |   |   |   |
| Production  costs (exclusive of depreciation and amortization) |       | 743.4                                              |       | 710.0 |   | 1,015.0 |   | 1,355.2 |   | 1,500.6 |   |
| Depreciation  and amortization                                 |       | 99.8                                               |       | 113.3 |   | 188.1 |   | 198.6 |   | 274.5 |   |
| Corporate  expenditure                                         |       | 16.0                                               |       | 12.3 |   | 16.6 |   | 20.3 |   | 22.5 |   |
| Employment  termination costs                                  |       | 5.0                                                |       | 6.4 |   | 3.8 |   | 10.5 |   | 13.7 |   |
| Exploration  expenditure                                       |       | 17.7                                               |       | 16.5 |   | 29.6 |   | 39.9 |   | 46.0 |   |
| Impairment  of assets                                          |       | 112.1                                              |       | — |   | 29.6 |   | 72.7 |   | 233.1 |   |
| Impairment  of critical spares                                 |       | —                                             |       | — |   | — |   | — |   | 2.8 |   |
| (Decrease)/increase  in post-retirement healthcare provision   |       | 8.8                                                |       | 6.6 |   | (5.0 | ) | (5.1 | ) | (4.2 | ) |
| Accretion  expense on environmental rehabilitation             |       | 12.2                                               |       | 4.7 |   | 5.3 |   | 8.4 |   | 11.5 |   |
| Share-based compensation                                       |       | —                                             |       | 4.8 |   | — |   | — |   | 2.1 |   |
| Harmony  hostile bid costs                                     |       | —                                             |       | — |   | — |   | — |   | 50.8 |   |
| IAMGold  transaction costs                                     |       | —                                             |       | — |   | — |   | — |   | 9.3 |   |
| Franco-Nevada  merger costs                                    |       | 2.5                                                |       | — |   | — |   | — |   | — |   |
| Settlement  costs of Oberholzer irrigation water dispute       |       | 1.2                                                |       | 1.0 |   | — |   | — |   | — |   |
|                                                           |       |                                               |       |   |   |   |   |   |   |   |   |
| Interest and  dividends                                        |       | (9.0                                               | )          | (8.9 | ) | 21.3 |   | (19.4 | ) | (29.2 | ) |
| Finance  (income)/expense                                      |       | 1.9                                                |       | (8.3 | ) | (4.2 | ) | 12.2 |   | 54.9 |   |
| Unrealized  gain on financial instruments                      |       | (0.8                                               | )          | (45.9 | ) | (35.7 | ) | (39.2 | ) | (4.9 | ) |
| Realized  (gain)/loss on financial instruments                 |       | (7.4                                               | )          | (4.7 | ) | (15.1 | ) | 8.7 |   | (2.1 | ) |
| Gain on  disposal of St. Helena mine                           |       | —                                             |       | — |   | (13.4 | ) | — |   | — |   |
| New York  Stock Exchange listing and associated costs          |       | —                                             |       | 4.3 |   | — |   | — |   | — |   |
| Profit on  disposal of listed investments                      |       | —                                             |       | — |   | (57.2 | ) | (13.9 | ) | (8.1 | ) |
| Profit on  disposal of exploration rights                      |       | —                                             |       | — |   | — |   | — |   | (7.5 | ) |
| Profit on  disposal of mineral rights                          |       | —                                             |       | — |   | — |   | (27.1 | ) | — |   |

 

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| ** **                                                                                                                                                | ** ** | **Year ended June 30,**                       | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------|------------|
| ** **                                                                                                                                                | ** ** | **2001**                                           | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** |
| ** **                                                                                                                                                | ** ** | **(in $millions, except where  otherwise noted )** | ** ** |
| **Statement  of Operations Data**                                                                                                                         | ** ** | ** **                                         | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Write-down  of investments                                                                                                                                |       | 2.0                                                |       | — |   | — |   | — |   | 7.7 |   |
| Write-down  of mineral rights                                                                                                                             |       | —                                             |       | — |   | — |   | 3.6 |   | — |   |
| Other  expenses/(income)                                                                                                                                  |       | (11.8                                              | )          | (0.5 | ) | (3.4 | ) | (2.1 | ) | 5.2 |   |
|                                                                                                                                                      |       |                                               |       |   |   |   |   |   |   |   |   |
| (Loss)/income  before tax, share of equity investees’ (losses) profits, minority interests  and cumulative effect of change in accounting principles |       | 13.0                                               |       | 398.4 |   | 405.5 |   | 82.9 |   | (285.6 | ) |
| Income and  mining tax benefit/(expense)                                                                                                                  |       | (21.6                                              | )          | (147.1 | ) | (133.8 | ) | (11.8 | ) | 100.4 |   |
| (Loss)/income  before, share of equity investees’ (losses) profits, minority interests and  cumulative effect of change in accounting principles     |       | (8.6                                               | )          | 251.3 |   | 271.7 |   | 71.1 |   | (185.2 | ) |
| Share of  equity investee’s (loss)/profits after taxation                                                                                            |       | —                                             |       | — |   | — |   | 1.0 |   | (0.4 | ) |
| Minority  interests                                                                                                                                       |       | (8.8                                               | )          | (12.2 | ) | (14.4 | ) | (21.8 | ) | (20.6 | ) |
|                                                                                                                                                      |       |                                               |       |   |   |   |   |   |   |   |   |
| (Loss)/income  before cumulative effect of changes in accounting principles                                                                               |       | (17.4                                              | )          | 239.1 |   | 258.3 |   | 48.9 |   | (206.2 | ) |
| Cumulative  effect of changes in accounting                                                                                                               |       |                                               |       |   |   |   |   |   |   |   |   |
| principles,  net of tax                                                                                                                                   |       | (0.6                                               | )          | — |   | (1.3 | ) | — |   | — |   |
|                                                                                                                                                      |       |                                               |       |   |   |   |   |   |   |   |   |
| Net  (loss)/income                                                                                                                                        |       | (18.0                                              | )          | 239.1 |   | 257.0 |   | 48.9 |   | (206.2 | ) |
|                                                                                                                                                      |       |                                               |       |   |   |   |   |   |   |   |   |
| **Other  Financial and Operating Data**                                                                                                                   |       |                                               |       |   |   |   |   |   |   |   |   |
| Basic  (loss)/earnings per share before cumulative effect of changes in accounting  principles ($)                                                        |       | (0.04                                              | )          | 0.52 |   | 0.55 |   | 0.10 |   | (0.42 | ) |
| Diluted  (loss)/earnings per share before cumulative effect of changes in accounting  principles ($)                                                      |       | (0.04                                              | )          | 0.51 |   | 0.54 |   | 0.10 |   | (0.42 | ) |
| Basic  (loss)/earnings per share ($)                                                                                                                      |       | (0.04                                              | )          | 0.52 |   | 0.54 |   | 0.10 |   | (0.42 | ) |
| Diluted  (loss)/earnings per share ($)                                                                                                                    |       | (0.04                                              | )          | 0.51 |   | 0.54 |   | 0.10 |   | (0.42 | ) |
| Dividend per  share (Rand)                                                                                                                                |       | 1.05                                               |       | 1.30 |   | 3.70 |   | 1.40 |   | 0.70 |   |
| Dividend per  share ($)                                                                                                                                   |       | 0.13                                               |       | 0.13 |   | 0.39 |   | 0.19 |   | 0.11 |   |
| Total cash  costs per ounce of gold produced($/oz)(2)                                                                                                     |       | 194                                                |       | 170 |   | 212 |   | 302 |   | 331 |   |
| Total  production costs per ounce of gold produced ($/oz)(3)                                                                                              |       | 224                                                |       | 198 |   | 254 |   | 349 |   | 393 |   |

 

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Notes: 

(1)          Revenues comprise only product (gold) sales.See note 2(w) to Gold Fields’ audited consolidated financial statements whichappear elsewhere in this annual report.

(2)          Gold Fields has calculated total cash costsper ounce by dividing total cash costs, as determined using guidance providedby the Gold Institute, by gold ounces sold for all periods presented. The GoldInstitute was a non-profit international industry association of miners,refiners, bullion suppliers and manufacturers of gold products, that ceasedoperation in 2002, which developed a uniform format for reporting productioncosts on a per ounce basis. The Gold Institute has now been incorporated intothe National Mining Association. The guidance was first adopted in 1996 andrevised in November 1999. Total cash costs, as defined in the GoldInstitute industry guidance, are production costs as recorded in the statementof operations, less offsite (i.e., central) general and administrative expenses(including head office costs charged to the mines, central training expenses,industry association fees and social development costs), rehabilitation costs,plus royalties and employee termination costs. Changes in total cash costs perounce are affected by operational performance, as well as changes in thecurrency exchange rate between the Rand and Australian dollar  and 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 net income/(loss), income before tax, operating cash flows orany 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

 

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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 —Glossary of Mining Terms — Total cash costs per ounce.” For a reconciliation ofGold Fields’ production costs to its total cash costs for fiscal 2005, 2004 and2003, see “Operating and Financial Review and Prospects — Results of Operations— Years Ended June 30, 2004 and 2005” and “ — Years Ended June 30,2003 and 2004.” 

(3)          Gold Fields has calculated total productioncosts per ounce by dividing total production costs, as determined using theguidance provided by the Gold Institute, by gold ounces sold for all periodspresented. Total production costs, as defined by the Gold Institute industryguidance, 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 and Australiandollar and the U.S. dollar. Management, however, believes that total productioncosts per ounce provides a measure for comparing Gold Fields’ operationalperformance against that of its peer group, both for Gold Fields as a whole,and for its individual operations. Total production costs per ounce is not aU.S. GAAP measure. An investor should not consider total production costs perounce in isolation or as an alternative to net income/(loss), income beforetax, operating cash flows or any other measure of financial performancepresented in accordance with U.S. GAAP. While the Gold Institute has provided adefinition for the calculation of total production costs, the calculation oftotal production 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 production costs per ounce.” For a reconciliation of GoldFields’ production costs to its total production costs for fiscal 2005, 2004and 2003, see “Operational and Financial Review and Prospects — Results ofOperations — Years Ended June 30, 2004 and 2005” and “ — Years Ended June 30,2003 and 2004.” 

 
| ** **                                       | ** ** | **Year ended June 30,**                       | ** ** |
|--------------------------------------------------|------------|----------------------------------------------------|------------|
| ** **                                       | ** ** | **2001**                                           | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** |
| ** **                                       | ** ** | **(in $millions, except where  otherwise noted )** | ** ** |
| **Balance  Sheet Data**                          | ** ** | ** **                                         |       |   |   |   |   |   |   |   |   |
| Cash and  cash equivalents                       |       | 23.6                                               |       | 195.1 |   | 133.6 |   | 656.3 |   | 503.7 |   |
| Financial  instruments                           |       | —                                             |       | — |   | — |   | 37.0 |   | 46.8 |   |
| Receivables                                      |       | 50.5                                               |       | 56.2 |   | 74.9 |   | 116.4 |   | 119.9 |   |
| Inventories                                      |       | 21.1                                               |       | 68.5 |   | 76.8 |   | 63.9 |   | 77.4 |   |
| Material  contained on heap leach pads           |       | 31.3                                               |       | 45.0 |   | 41.8 |   | 42.5 |   | 55.1 |   |
|                                             |       |                                               |       |   |   |   |   |   |   |   |   |
| Total  current assets                            |       | 126.5                                              |       | 364.8 |   | 327.1 |   | 916.1 |   | 802.9 |   |
|                                             |       |                                               |       |   |   |   |   |   |   |   |   |
| Property,  plant and equipment, net (1)          |       | 1,798.7                                            |       | 1,726.9 |   | 2,231.0 |   | 2,805.5 |   | 2,554.1 |   |
| Financial  instruments                           |       | —                                             |       | 46.2 |   | 67.7 |   | 70.3 |   | 32.4 |   |
| Non-current  investments                         |       | 42.2                                               |       | 73.3 |   | 101.0 |   | 179.8 |   | 203.5 |   |
|                                             |       |                                               |       |   |   |   |   |   |   |   |   |
| Total assets                                     |       | 1,967.4                                            |       | 2,211.2 |   | 2,726.8 |   | 3,971.7 |   | 3,592.9 |   |
|                                             |       |                                               |       |   |   |   |   |   |   |   |   |
| Accounts  payable and provisions                 |       | 127.4                                              |       | 153.3 |   | 184.7 |   | 290.6 |   | 274.5 |   |
| Income and  mining taxes payable                 |       | 1.2                                                |       | 44.5 |   | 52.0 |   | 14.2 |   | 18.0 |   |
| Current  portion of long-term loans              |       | —                                             |       | 37.0 |   | 20.5 |   | — |   | — |   |
|                                             |       |                                               |       |   |   |   |   |   |   |   |   |
| Total  current liabilities                       |       | 128.6                                              |       | 234.8 |   | 257.2 |   | 304.8 |   | 292.5 |   |
|                                             |       |                                               |       |   |   |   |   |   |   |   |   |
| Long term  loans                                 |       | —                                             |       | 145.0 |   | 21.1 |   | 643.2 |   | 653.1 |   |
| Deferred  income and mining taxes                |       | 506.9                                              |       | 448.2 |   | 647.3 |   | 769.0 |   | 596.2 |   |
| Provision  for environmental rehabilitation      |       | 47.5                                               |       | 58.8 |   | 99.2 |   | 116.0 |   | 134.6 |   |
| Provision  for post-retirement health care costs |       | 51.0                                               |       | 44.7 |   | 23.9 |   | 18.9 |   | 9.0 |   |
|                                             |       |                                               |       |   |   |   |   |   |   |   |   |
| Minority  interests                              |       | 39.0                                               |       | 52.8 |   | 58.8 |   | 102.7 |   | 118.4 |   |
|                                             |       |                                               |       |   |   |   |   |   |   |   |   |
| Share  capital                                   |       | 41.3                                               |       | 42.1 |   | 42.2 |   | 43.6 |   | 43.7 |   |
| Additional  paid-in capital                      |       | 1,498.1                                            |       | 1,560.8 |   | 1,565.2 |   | 1,792.3 |   | 1,797.9 |   |
| Retained  earnings                               |       | 2.7                                                |       | 182.6 |   | 255.3 |   | 211.6 |   | (49.1 | ) |
| Accumulated  other comprehensive loss            |       | (347.7                                             | )          | (556.8 | ) | (243.4 | ) | (30.4 | ) | (3.4 | ) |

 

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| Total  shareholders’ equity                                               |   | 1,194.4     |   | 1,226.9     |   | 1,619.3     |   | 2,017.1     |   | 1,789.1     |   |
|--------------------------------------------------------------------------------|--------|-------------|--------|-------------|--------|-------------|--------|-------------|--------|-------------|--------|
|                                                                           |   |        |   |        |   |        |   |        |   |        |   |
| Total  liabilities and shareholders’ equity                               |   | 1,967.4     |   | 2,211.2     |   | 2,726.8     |   | 3,971.7     |   | 3,592.9     |   |
| **Other  Data**                                                                |   |        |   |        |   |        |   |        |   |        |   |
| Number of  ordinary shares as adjusted to reflect changes in capital structure |   | 455,836,608 |   | 470,522,224 |   | 472,364,872 |   | 491,492,520 |   | 492,294,226 |   |
| Net assets                                                                     |   | 1,194.4     |   | 1,226.9     |   | 1,619.3     |   | 2,017.1     |   | 1,789.1     |   |

 

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Note: 

(1)          As discussed in Note 2 to the auditedconsolidated financial statements which appear elsewhere in this annual report,Gold Fields changed its method of accounting for mineral and surface use rightsduring the 2004 fiscal year in accordance with FASB Staff Position FAS 141-1,which required the balance of the mineral interests and other intangible assetsin 2002 and 2003 to be restated and included as part of Property, plant andequipment, net. 

 

**ExchangeRates**

 

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** | ** ** |
| 2001                                   |       | 7.64                         |       | 8.16 |   | 6.79 |   | 8.05 |   |
| 2002                                   |       | 10.20                        |       | 13.60 |   | 8.01 |   | 10.39 |   |
| 2003                                   |       | 9.12                         |       | 10.90 |   | 7.18 |   | 7.51 |   |
| 2004                                   |       | 6.82                         |       | 7.80 |   | 6.17 |   | 6.23 |   |
| 2005                                   |       | 6.20                         |       | 6.92 |   | 5.62 |   | 6.67 |   |
| 2006  (through November 30, 2005) |       | 6.50                         |       | 6.90 |   | 6.35 |   | 6.46 |   |

 

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Note: 

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

 

| ** **               | ** ** | **Month ended** | ** ** |
|--------------------------|------------|-----------------|------------|
| ** **               | ** ** | **High**        | ** ** | **Low** | ** ** | **Period end** | ** ** |
| June 30,  2005      |       | 6.92            |       | 6.63 |   | 6.67 |   |
| July 31,  2005      |       | 6.90            |       | 6.53 |   | 6.56 |   |
| August 31,  2005    |       | 6.55            |       | 6.35 |   | 6.40 |   |
| September 30,  2005 |       | 6.45            |       | 6.26 |   | 6.35 |   |
| October 31,  2005   |       | 6.72            |       | 6.44 |   | 6.71 |   |
| November 30,  2005  |       | 6.79            |       | 6.46 |   | 6.46 |   |

 

The noon buying rate for theRand on November 30, 2005 was Rand 6.46 per $1.00. Fluctuations in theexchange rate between the Rand and the U.S. dollar will affect the dollarequivalent of the price of the ordinary shares on JSE, which may affect themarket price of the ADSs on the New York Stock Exchange. These fluctuationswill also affect the dollar amounts received by owners of ADSs on theconversion of any dividends paid in Rand on the ordinary shares.

 

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**RISKFACTORS**

 

*Inaddition to the other information included in this annual report, theconsiderations listed below could have a material adverse effect on Gold Fields’business, financial condition or results of operations, resulting in a declinein the trading price of Gold Fields’ ordinary shares or ADSs. The risks setforth below comprise all material risks currently known to Gold Fields.However, there may be additional risks that Gold Fields does not currently knowof or that Gold Fields currently deems immaterial based on the informationavailable to it. These factors should be considered carefully, together withthe information and financial data set forth in this document.*

 

***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.***

 

Substantially all of GoldFields’ revenues are derived from the sale of gold. Historically, the marketprice for gold has fluctuated widely and has been affected by numerous factorsover which Gold Fields has no control, including:

 

•    the demand for gold for industrial uses andfor use in jewelry; 

•    actual, expected or rumored purchases andsales of gold bullion holdings by central banks or other large gold bullionholders or dealers; 

•    speculative trading activities in gold; 

•    the overall level of forward sales by othergold producers; 

•    the overall level and cost of production byother gold producers; 

•    international or regional political andeconomic events or trends; 

•    the strength of the U.S. dollar (the currencyin which gold prices generally are quoted) and of other currencies; 

•    financial market expectations regarding therate of inflation; and 

•    interest rates. 

 

In addition, the currentdemand for and supply of gold affects the price of gold, but not necessarily inthe same manner as current demand and supply affect the prices of othercommodities. Since the potential supply of gold is large relative to mineproduction in any given year, normal variations in current production will notnecessarily have a significant effect on the supply of gold or the gold price.Central banks, financial institutions and individuals historically have heldlarge amounts of gold as a store of value and production in any given yearhistorically has constituted a small portion of the total potential supply ofgold. Historically, gold has tended to retain its value in relative termsagainst basic goods in times of inflation and monetary crisis.

 

On March 8, 2004,fifteen European central banks entered into a new gold sales agreementeffective September 27, 2004, pursuant to which they restrict their annualsales of gold to specified limits. This agreement will be reviewed in fiveyears. Although the new agreement calls for an increase in the amount of goldthat can be sold by individual banks to 500 tonnes per year, the effect on themarket in terms of total gold sales is unclear.

 

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. In addition, Gold Fieldsmight not be able to recover any losses it may incur during that period.

 

***Because Gold Fields does not use commodity or derivative instruments toprotect against low gold prices with respect to its production, Gold Fields isexposed to the impact of any significant drop in the gold 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 which may 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 June 30, 2005, could be mined, processed and sold at prices sufficientto recover Gold Fields’ estimated future total costs of production, remaininginvestment and anticipated additional capital expenditures. Ore reserves areestimates based on assumptions regarding, among other things, Gold Fields’costs, expenditures, prices and exchange rates, many of which are beyond GoldFields’ control. In the event that Gold Fields revises any of these assumptionsin an adverse manner, Gold Fields may need to revise its ore reservesdownwards. In particular, if Gold Fields’ production costs or capitalexpenditures increase or if gold prices decrease or the Rand or Australiandollar strengthens against the U.S. dollar, a portion of Gold Fields’ orereserves may become uneconomical to recover, forcing Gold Fields to lower itsestimated reserves. Gold Fields’ reported attributable gold ore reserves were75.6 million ounces for fiscal 2004 as compared to 62.8 million ounces forfiscal 2005 (including 2.4 million ounces of proven and probable gold reservesfor the Cerro Corona Project that will be attributable to Gold Fields uponcompletion of its acquisition of an 80.7% economic interest in the Cerro CoronaProject; see “Information on the Company — Exploration  — Gold Fields’

 

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Exploration Projects — CerroCorona Project”), a decrease of 12.8 million ounces, resulting primarily from adecrease in below infrastructure reserves at Kloof where new geologicalmodeling indicated that the ore body is more challenging than originallyanticipated. See “Information on the Company — Reserves at Gold Fields as of June 30,2005” and “Information on the Company — Exploration — Gold Fields’ ExplorationProjects — Cerro Corona Project.”

 

***To the extent that Gold Fields seeks to expand through acquisitions, itmay experience problems in executing acquisitions or managing and integratingthe acquisitions with its existing operations.***

 

In order to expand itsoperations 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:

 

•    negotiating acceptable terms with the sellerof the business to be acquired; 

•    obtaining approval from regulatoryauthorities in South Africa and the jurisdiction of the business to beacquired; 

•    assimilating the operations of an acquiredbusiness in a timely and efficient manner; 

•    maintaining Gold Fields’ financial andstrategic focus while integrating the acquired business; 

•    implementing uniform standards, controls,procedures and policies at the acquired business; and 

•    to the extent that Gold Fields makes anacquisition outside of markets in which it has previously operated, conductingand managing operations in a new operating environment. 

 

Any problems experienced byGold 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.

 

***To the extent that Gold Fields seeks to expand through its explorationprogram, it may experience problems associated with mineral exploration ordeveloping mining projects.***

 

In order to expand itsoperations and reserve base, Gold Fields may rely on its exploration programfor gold and platinum group metals and its ability to develop mining projects.Exploration for gold and other precious metals is speculative in nature,involves many risks and frequently is unsuccessful. Any exploration programentails risks relating to the location of economic orebodies, the developmentof appropriate metallurgical processes, the receipt of necessary governmentalpermits and regulatory approvals and the construction of mining and processingfacilities at the mining site. Gold Fields’ exploration efforts may not resultin the discovery of gold or platinum group metal mineralization and anymineralization discovered may not result in an increase of Gold Fields’ reserves.If orebodies are developed, it can take a number of years and substantialexpenditures from the initial phases of drilling until production commences,during which time the economic feasibility of production may change. GoldFields’ exploration program may not result in the replacement of currentproduction with new reserves or result in any new commercial mining operations.Also, to the extent Gold Fields participates in the development of a projectthrough a joint venture there could be disagreements or divergent interests orgoals among the joint venture parties, which could jeopardize the success ofthe project.

 

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 nature of mining and the type of gold mines it operates,Gold Fields faces a material risk of liability, delays and increased productioncosts from environmental and industrial accidents and pollution.

 

The business of gold miningby its nature involves significant risks and hazards, including environmentalhazards and industrial accidents. In particular, hazards associated with GoldFields’ underground mining operations include:

 

•    rock bursts; 

•    seismic events, particularly at theDriefontein and Kloof operations; 

•    underground fires and explosions, includingthose caused by flammable gas; 

•    cave-ins or falls of ground; 

•    discharges of gases and toxic substances; 

•    releases of radioactivity; 

•    flooding; 

•    sinkhole formation and ground subsidence; and

•    other accidents and conditions resulting fromdrilling, blasting and removing and processing material from an undergroundmine. 

 

Hazards associated with GoldFields’ open pit mining operations include:

 

•    flooding of the open pit; 

•    collapses of the open pit walls; 

•    accidents associated with the operation oflarge open pit mining and rock transportation equipment; 

•    accidents associated with the preparation andignition of large scale open pit blasting operations; 

•    production disruptions due to weather; and 

•    hazards associated with heap leachprocessing, such as groundwater and waterway contamination. 

 

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Hazards associated with GoldFields’ rock dump and production stockpile mining and tailings disposalinclude:

 

•    accidents associated with operating a rockdump and production stockpile and rock transportation; 

•    production disruptions due to weather; 

•    collapses of tailings dams; and 

•    ground and surface water pollution, on andoff 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 inadequate to satisfypotential claims.***

 

Gold Fields may becomesubject to liability for pollution or other hazards against which it has notinsured or cannot insure, including those in respect of past mining activities.Gold Fields’ existing property and liability insurance contains exclusions andlimitations on coverage. In fiscal 2003, in an effort to reduce costs, GoldFields changed from business interruption insurance cover based on gross profitto cover based on fixed operating costs or standing charges only. Should GoldFields suffer a major loss, future earnings could be affected. In addition,insurance may not continue to be available at economically acceptable premiums.As a result, in the future Gold Fields’ insurance coverage may not cover theextent of claims against Gold Fields, including, but not limited to, claims forenvironmental or industrial accidents or pollution.

 

***Because most of Gold Fields’ production costs are in Rand andAustralian dollars, while gold is generally sold in U.S. dollars, Gold Fields’operating results or financial condition could be materially harmed by anappreciation in the value of the Rand or the Australian dollar.***

 

Gold is sold throughout theworld principally in U.S. dollars, but Gold Fields’ operating costs areincurred principally in Rand and Australian dollars. As a result, anysignificant and sustained appreciation of either of these currencies againstthe U.S. dollar may materially increase Gold Fields’ costs and reduce its netrevenue.

 

The Rand and the Australiandollar each appreciated against the U.S. dollar during calendar years 2002,2003 and 2004, with the Rand appreciating by approximately 28.4%, 22.9% and17.0% in 2002, 2003 and 2004, respectively, and the Australian dollarappreciating by approximately 10.0%, 24.6% and 4.1% in 2002, 2003 and 2004,respectively. More recently however, the Rand and the Australian dollar haveexperienced a period of depreciation against the U.S. dollar. As of November 30,2005, the Rand had depreciated by 12.5%, and the Australian dollar haddepreciated by 4.7%, against the U.S. dollar since January 1, 2005. Anappreciation trend for either of these currencies could have a material adverseeffect on Gold Fields’ operating results or financial condition as theappreciation results in an increase to Gold Fields’ costs in U.S. dollar terms.See “Quantitative and Qualitative Disclosures About Market Risk — ForeignCurrency Sensitivity.”

 

***Political or economic instability in South Africa or regionally mayhave an adverse effect on Gold Fields’ operations and profits.***

 

Gold Fields is incorporatedand owns significant operations in South Africa. As a result, political andeconomic risks relating to South Africa could affect an investment in GoldFields. Large parts of the South African population do not have access toadequate education, health care, housing and other services, including waterand electricity. Government policies aimed at alleviating and redressing thedisadvantages suffered by the majority of citizens under previous governmentsmay have an adverse impact on Gold Fields’ operations and profits. In recentyears, South Africa has experienced high levels of crime and unemployment.These problems have impeded fixed inward investment into South Africa and haveprompted emigration of skilled workers. As a result, Gold Fields may havedifficulties attracting and retaining qualified employees.

 

Recently, the South Africaneconomy has been growing at a relatively slow rate, inflation and unemploymenthave been high by comparison with developed countries and foreign reserves havebeen relatively low. GDP (based on 1990 prices given by Statistics SouthAfrica) growth was 3.4% for 2000, 2.7% for 2001, 3.6% for 2002, 1.9% for 2003and 3.4% for 2004. Corresponding inflation rates (as given by reference to theconsumer price index used by the South African government) were 5.3% in 2000,5.7% in 2001, 9.2% in 2002, 5.8% in 2003 and 1.4% in 2004, while correspondingunemployment rates were 26.7%, 26.9%, 30.5%, 28.4% and 26.5% as of December 31,2000, 2001, 2002, 2003 and 2004, respectively. Gross foreign exchange reservesstood at approximately $20.1 billion as of November 30, 2005. Thedepreciation of the Rand in 1997 and 1998 resulted in an increase in the SouthAfrican prime lending rate, which peaked at approximately 25.5% during 1998,although rates have since decreased substantially. On November 30, 2005,the rate was 10.5%. Consequently, Gold Fields could face a high cost of capitalshould it need to borrow in South Africa.

 

In the late 1980s and early1990s, inflation in South Africa reached record highs. This increase ininflation resulted in considerable year over year increases in operationalcosts. In recent years, the inflation rate has decreased to single-digitfigures. A return to significant inflation in South Africa, without aconcurrent devaluation of the Rand or an increase in the price of gold, couldhave a material adverse effect on Gold Fields’ operating results and financialcondition.

 

There has been regionalpolitical and economic instability in the countries surrounding South Africa.Any similar political or economic instability in South Africa could have anegative impact on Gold Fields’ ability to manage and operate its South Africanoperations.

 

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***Political or economic instability in Ghana may have an adverse effecton Gold Fields’ operations and profits.***

 

A significant portion ofGold Fields’ production takes place in Ghana at the Tarkwa and Damang mines. Asa result, political and economic risks relating to Ghana could affect aninvestment in Gold Fields.

 

Ghana has had periods ofpolitical instability, and could be subject to instability again in the future.Presidential and parliamentary elections were conducted under the presentGhanaian constitution in 1992, 1996, 2000 and 2004. The 2000 elections resultedin the principal opposition party winning the elections and forming the presentgovernment, which was re-elected in 2004. Since the present government cameinto power it has passed legislation imposing a tax and import duty which haveaffected the mining industry. The Ghana Chamber of Mines, of which Gold FieldsGhana Limited and Abosso Goldfields Limited, subsidiaries of Gold Fields, aremembers, has expressed its concern to the government that these legislativemeasures have eroded the competitiveness of the fiscal regime affecting miningcompanies in Ghana. The current government or a future government might adoptadditional changes to policies in the future, which could: (1) modify theregulatory or fiscal regime governing mining companies in Ghana, such asincreasing the proportion of foreign currency earnings that mining companiesare required to repatriate to Ghana or (2) otherwise make investments orforeign-owned operations in Ghana less attractive. Any departure from currentpolicies by the government of Ghana could have a material adverse effect onGold Fields’ business, operating results and financial condition.

 

In addition, it is possiblethat in the future Ghana will experience adverse economic conditions ordisruptions which may negatively impact Gold Fields’ Ghana operations.

 

***Gold Fields’ financial flexibility could be materially constrained bySouth African exchange control regulations.***

 

South Africa’s exchangecontrol regulations restrict the export of capital from South Africa, theRepublic of Namibia, and the Kingdoms of Lesotho and Swaziland, knowncollectively as the Common Monetary Area. Transactions between South Africanresidents (including companies) and non-residents of the Common Monetary Areaare subject to exchange controls enforced by the South African Reserve Bank, orSARB. As a result, Gold Fields’ ability to raise and deploy capital outside theCommon Monetary Area is restricted.

 

Under South African exchangecontrol regulations, Gold Fields must obtain approval from the SARB regardingany capital raising involving a currency other than the Rand. For example, inconnection with its approval, it is possible that the SARB may impose conditionson Gold Fields’ use of the proceeds of any such capital raising, such as limitson Gold Fields’ ability to retain the proceeds of the capital raising outsideSouth Africa or requirements that Gold Fields seek further SARB approval priorto applying any such funds to a specific use. These restrictions could hinderGold Fields’ financial and strategic flexibility, particularly its ability tofund acquisitions, capital expenditures and exploration projects outside SouthAfrica. See “Information on the Company — Regulatory and Environmental Matters— South Africa — Exchange Controls.”

 

***An acquisition of shares in or assets of a South African company by anon-South African purchaser that is subject to exchange control regulations maynot be granted regulatory approval.***

 

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, Gold Fields’ management may be limited in itsability to consider strategic options and Gold Fields’ shareholders may not beable to realize the premium over the current trading price of Gold Fields’ordinary shares which they might otherwise receive upon such an acquisition.See “Information on the Company — Regulatory and Environmental Matters — SouthAfrica — Exchange Controls.”

 

***Gold Fields’ operations and financial condition may be adverselyaffected by labor disputes or changes in South African, Ghanaian or Australianlabor laws.***

 

As of June 30, 2005,approximately 79% of Gold Fields’ employees belonged to unions. Accordingly,Gold Fields is at risk of having its production stopped for sustained periodsdue to strikes called by unions and other labor disputes. In August 2005,Gold Fields experienced a 48-hour unexpected strike by approximately half theemployees of the Tarkwa mine in Ghana. In South Africa, Gold Fields alsoexperienced a one day illegal strike on March 30, 2005, and an industrywide gold mining labor strike in August 2005. See “Directors, SeniorManagement and Employees — Labor Relations — South Africa” and “— Ghana.” InSouth Africa, in addition to strikes, on occasion Gold Fields experiences workstoppages based on national trade union “stay away” days regardless of thestate of its relations with its workforce. Significant labor disruptions at anyof Gold Fields’ operations could have a material adverse effect on Gold Fields’business, operating results and financial condition.

 

Gold Fields’ production mayalso be materially affected by relatively new labor laws. Since 1995, SouthAfrican laws relating to labor have changed significantly in ways that affectGold Fields’ operations. In particular, laws enacted since then that imposelarge monetary penalties for non-compliance with the administrative and thereporting requirements in respect of affirmative action policies could resultin significant costs to Gold Fields. There may continue to be significant andadverse changes in labor law in South Africa over the next several years.

 

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Ghanaian law contains broadprovisions requiring mining companies to recruit and train Ghanaian personneland to use the services of Ghanaian companies. Any expansion of theseprovisions or new labor legislation which increases labor costs in Ghana couldhave a material adverse effect on Gold Fields’ mining operations in Ghana and,accordingly, on Gold Fields’ business, operating results and financialcondition.

 

The Labor Relations ReformAct of Western Australia was passed by Parliament in July 2002. This lawreduces the availability of state workplace agreements and is designed topromote collective bargaining and union access to the workplace. This law couldstrengthen the role of unions in Western Australia’s mining industry, whichcould have a material adverse effect on labor costs at Gold Fields’ miningoperations in Australia and, accordingly, on Gold Fields’ business, operatingresults and financial condition. See “Directors, Senior Management andEmployees — Employees — Labor Relations — Australia.”

 

***Gold Fields may suffer adverse consequences as a result of its relianceon outside contractors to conduct its operations in Ghana and Australia.***

 

A significant portion ofGold Fields’ operations at the Damang mine in Ghana and in Australia arecurrently 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:

 

• negotiating agreements with contractors onacceptable terms;

•the inability to replace a contractor and its operating equipment in the eventthat either party terminates the agreement; 

•reduced control over those aspects of operations which are the responsibilityof the contractor;

•failure of a contractor to perform under its agreement with Gold Fields; 

•interruption of operations in the event that a contractor ceases its businessdue to insolvency or other unforeseen events; 

•failure of a contractor to comply with applicable legal and regulatoryrequirements, to the extent it is responsible for such compliance; and 

•problems of a contractor with managing its workforce, labor unrest or otheremployment issues. 

 

In addition, Gold Fields mayincur liability to third parties as a result of the actions of its contractors.The occurrence of one or more of these risks could have a material adverseeffect on Gold Fields’ business, results of operations and financial condition.See “Directors, Senior Management and Employees — Labor Relations — Ghana” and “— Australia.”

 

***Gold Fields’ South African operations may be adversely affected byincreased labor costs at its mining operations in South Africa.***

 

Wages and related laborcosts accounted for approximately 50% of Gold Fields’ total production costs infiscal 2005. 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% to 7%, 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 — LaborRelations — South Africa.” If Gold Fields is unable to increase productionlevels or implement cost cutting measures to offset these increased wages andlabor costs, these costs could have a material adverse effect on Gold Fields’mining operations in South Africa and, accordingly, on Gold Fields’ business,operating results and financial condition. See “Directors, Senior Managementand Employees — Employees — Labor Relations — South Africa.”

 

***HIV/AIDS poses risks to Gold Fields in terms of lost productivity andincreased costs.***

 

The incidence of HIV/AIDS inSouth Africa, which is forecast to increase over the next decade, poses risksto Gold Fields in terms of potentially reduced productivity and increasedmedical and other costs. Gold Fields’ current estimate of the potential impactof HIV/AIDS on its operations and financial condition is based on a variety ofexisting data and certain assumptions, including the incidence of HIV infectionamong its employees, the progressive impact of HIV/AIDS on infected employees’health, and the medical and other costs associated with the infection, most ofwhich involve factors beyond Gold Fields’ control. Should Gold Fields’ actualexperience significantly differ from the assumptions on which its currentestimate is based, the actual impact of HIV/AIDS on its business, operatingresults and financial condition could be significantly worse than Gold Fieldsexpects. See “Directors, Senior Management and Employees — Employees — Healthand Safety — HIV/AIDS Program.”

 

***Gold Fields’ operations in South Africa are subject to environmentalregulations which could impose significant costs and burdens.***

 

Gold Fields’ South Africanoperations are subject to various environmental laws and regulations including,for example, those relating to waste treatment, emissions and disposal, andmust comply with permits or standards governing, among other things, tailingsdams and waste disposal areas, water consumption, air emissions and waterdischarges. Gold Fields may, in the future, incur significant costs to complywith theSouth Africanenvironmental 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 rightsgranted to individuals under South Africa’s Constitution or other sources ofrights. These costs could have a material adverse effect on Gold Fields’business, operating results and financial condition.

 

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South African miningcompanies are required by law to undertake rehabilitation works as part oftheir ongoing operations. In addition, during the operational life of theirmines, they must make arrangements to fund the cost of mine closure andpost-closure rehabilitation and monitoring once mining operations cease.  Gold Fields fully provides for theseenvironmental rehabilitation costs in its financial statements based on thepresent value of future costs and funds these costs by making contributionsinto an environmental trust fund, with amounts approved by the authorities. Asof September 30, 2005, Gold Fields had contributed a total ofapproximately Rand 401.2 million, including accrued interest, to the fund.Changes in legislation or regulations (or the approach to enforcement of them)or other unforeseen circumstances may materially and adversely affect GoldFields’ future environmental expenditures or the level and timing of GoldFields’ provisioning for these expenditures. See “Information on the Company —Regulatory and Environmental Matters — South Africa — Environmental.”

 

***Gold Fields’ operations in South Africa are subject to health andsafety regulations which could impose significant costs and burdens.***

 

The present Mine Health andSafety Act 29 of 1996, or the Mine Health and Safety Act, came into effect in January 1997.The principal objective of the Mine Health and Safety Act is to improve healthand safety at South African mines and, to this end, the Mine Health and SafetyAct imposes various duties on Gold Fields at its mines, and grants theauthorities broad powers to, among other things, close unsafe mines and ordercorrective action relating to health and safety matters.

 

The Occupational Diseases inMines and Works Act 78 of 1973, or the Occupational Diseases Act, governs thepayment of compensation and medical costs related to certain illnessescontracted by persons employed in mines or at sites where activities ancillaryto mining are conducted. Occupational health care services are made availableby Gold Fields to employees from its existing facilities. Pursuant to changesin the 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. See “Information on theCompany — Regulatory and Environmental Matters — South Africa — Health andSafety.”

 

***Gold Fields’ mineral rights in South Africa have become subject to newlegislation which could impose significant costs and burdens.***

 

*The NewMinerals Act*

 

The Mineral and PetroleumResources Development Act 2002, or the New Minerals Act, came into effect on May 1,2004.

 

Among other things, the NewMinerals Act: (1) vests the right to prospect and mine in the statewithout the automatic payment of compensation, (2) makes provision for atransitional period for the phasing out of privately held mineral rights,prospecting permits and mining authorizations held under the old regime and (3) requiresthat new applications be made in respect of those rights and new rights to begranted pursuant to the New Minerals Act. Consistent with internationalpractice, the New Minerals Act provides that a mining or prospecting rightgranted under the New Minerals Act could be cancelled if the mineral to whichthe right relates is not mined at an “optimal” rate. There is no guarantee thatGold Fields will be able to successfully apply for any or all of its existingmining rights under the New Minerals Act or that the terms on which they willbe granted will not be significantly less favorable to Gold Fields than thecurrent terms. The requirements of the New Minerals Act could have a materialadverse effect on Gold Fields’ mining and exploration activities in SouthAfrica and, as a result, on Gold Fields’ business, operating results andfinancial condition. See “Information on the Company — Regulatory andEnvironmental Matters — South Africa — Mineral Rights — The New Minerals Act.”

 

The Mining TitlesRegistration Amendment Act, or the Mining Titles Act, came into force on May 1,2004. The Mining Titles Act provides for the registration of rights grantedunder the New Minerals Act. The Mining Titles Act repeals certain sections ofthe former legislation dealing with the registration of mineral rights, subjectto the transitional provisions of the New Minerals Act. Until rights held underthe previous regime are converted to rights under the New Minerals Act, rightsheld under the previous regime that become subject to a change in ownershipduring the transition period will not be able to be registered under the nameof the new owner.

 

The New Minerals Actcontains a provision requiring the Minister of Minerals and Energy, or theMinister, within six months of the relevant provision becoming operational, to developa broad-based socio-economic empowerment charter for effecting entry ofhistorically disadvantaged South Africans, or HDSAs, into the mining industry.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’s statedobjectives are to:

 

•    promote equitable access to South Africa’smineral resources for all the people of South Africa;

•    substantially and meaningfully expandopportunities for HDSAs, including women, to enter the mining and mineralsindustry and to benefit from the exploitation of South Africa’s mineralresources;

•    utilize the existing skills base for theempowerment of HDSAs;

•    expand the skills base of HDSAs in order to servethe community;

•    promote employment and advance the social andeconomic welfare of mining communities and areas supplying mining labor; and

•    promote beneficiation of South Africa’smineral commodities beyond mining and processing, including the production ofconsumer products.

 

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To achieve these objectives,the charter requires that mining companies achieve a 15% HDSA ownership ofmining assets within five years and a 26% HDSA ownership of mining assetswithin 10 years by each mining company. Under the 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 beincreased on a willing seller-willing buyer basis, at fair market value, wherethe mining companies are not at risk. In addition, the 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 conversion of existing licenses, the government will takea “scorecard” approach, evaluating the commitments of stakeholders to thedifferent facets of promoting the objectives of the charter. See “Informationon the Company — Regulatory and Environmental Matters — South Africa — MineralRights — The New Minerals Act.”

 

In order to comply with theterms of the charter, Gold Fields has adjusted the ownership structure of itsSouth African mining assets. On March 8, 2004, the shareholders of GoldFields approved a series of transactions, referred to in this discussion as theMvelaphanda Transaction, involving the acquisition by Mvelaphanda ResourcesLimited of a 15% beneficial interest in the South African gold mining assets ofGold Fields for cash consideration of R4,139 million. See “Operating andFinancial 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.”There is no guarantee, however, that the Mvelaphanda Transaction will not havea negative effect on the value of Gold Fields’ ordinary shares. In addition,any further adjustment to the ownership structure of Gold Fields’ South Africanmining assets in order to meet the mining charter’s 10 year HDSA ownershiprequirement of 26% could have a material adverse effect on the value of GoldFields’ ordinary shares and failing to comply with the charter’s requirementscould subject Gold Fields to negative consequences, the scope of which has notyet been fully determined. Gold Fields may also incur expenses to give effectto the charter’s other requirements, and may need to incur additionalindebtedness in order to comply with the industry-wide commitment to assistHDSAs 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 conversion of any or all of its existing mining rights orfor the grant of new mining rights or that the terms of any conversion or grantwould not be significantly less favorable to Gold Fields than the terms of itscurrent rights.

 

*TheRoyalty Bill*

 

On March 20, 2003 thedraft Mineral and Petroleum Royalty Bill, or the Royalty Bill, was released forpublic comment. The South African National Treasury subsequently missed an August 1,2003 deadline for submitting a revised draft to the South African Parliamentand, as yet, no revised draft has been submitted or published.

 

The Royalty Bill proposes toimpose a 3% revenue based royalty on the South African gold mining sectorpayable to the South African government. Under the terms of the proposedRoyalty Bill, the royalty is to take effect when companies convert to new ordermining rights in accordance with the New Minerals Act, although the Ministerhas indicated that the royalty is not expected to take effect until thetransitional period for the conversion of mining rights under the New MineralsAct expires. The Minister of Finance in his Budget Speech in February 2004indicated that the royalty will be based on revenues and will take effect in2009. The Royalty Bill is in the process of being redrafted and is expected tocontain a royalty consisting of a percentage of gross sales. There is uncertaintyas to what further amendments will be made to the Royalty Bill. If adopted, ineither its current or a revised form, the Royalty Bill could have a negativeimpact on Gold Fields’ South African operations and therefore an adverse effecton its business, operating results and financial condition. See “Information onthe Company — Regulatory and Environmental Matters — South Africa — MineralRights — The Royalty Bill.”

 

***Gold Fields’ land and mineral rights in South Africa could be subjectto land restitution claims which could impose significant costs and burdens.***

 

Gold Fields’ privately heldland and mineral 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 — LandClaims.”

 

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 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.”

 

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***Gold Fields’ operations in Ghana are subject to environmentalregulations which could impose significant costs and burdens.***

 

Gold Fields’ Ghana operationis subject to extensive environmental laws and regulations. The Ghanaianenvironmental protection laws require, among other things, that Gold Fieldsregister with the Ghanaian environmental authorities, and obtain environmentalpermits and certificates for the Ghana operation.

 

Ghanaian mining companiesare required by law to rehabilitate land disturbed as a result of their miningoperations pursuant to an environmental reclamation plan agreed with theGhanaian environmental authorities. Gold Fields funds these environmentalrehabilitation costs in part by posting a reclamation bond to secure estimatedcosts of rehabilitation. Changes in the required method of calculation forthese bonds or an unforeseen circumstance which produces unexpected costs maymaterially and adversely affect Gold Fields’ future environmental expenditures.See “Information on the Company — Regulatory and Environmental Matters — Ghana— Environmental.”

 

***Gold Fields’ operations in Ghana are subject to health and safetyregulations which could impose significant costs and burdens.***

 

The Ghanaian health andsafety regulations impose statutory duties on an owner of a mine to, amongother things, take steps to ensure that the mine is managed and worked in amanner which provides for the safety and proper discipline of the mine workers.The regulations prescribe the measures to be taken to ensure the safety andhealth of the mine workers. Additionally, Gold Fields is required under theterms of its mining leases to comply with the reasonable instructions of therelevant authorities for securing the health and safety of persons working inor connected with the mine. A violation of the health and safety regulations ora failure to comply with the reasonable instructions of the relevantauthorities could lead to, among other things, a temporary shut down of all ora portion of the mine, a loss of the right to mine or the imposition of costlycompliance procedures and, in the case of a violation of the regulationsrelating to health and safety, constitutes an offense under Ghanaian law. IfGhanaian health and safety authorities require Gold Fields to shut down all ora portion of its mines or to implement costly compliance measures, whetherpursuant to existing or new health and safety laws and regulations, suchmeasures could have a material adverse effect on Gold Fields’ business,operating results and financial condition. See “Information on the Company —Regulatory and Environmental Matters — Ghana — Health and Safety.”

 

Gold Fields, as the holderof the mining lease, has potential liability arising from injuries to, ordeaths 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.

 

***Gold Fields’ mineral rights in Ghana are currently subject toregulations, and will become subject to new regulations, which could imposesignificant costs and burdens.***

 

In Ghana, the ownership ofland on which there are mineral deposits is separate from the ownership of theminerals. All minerals in their natural state in or upon any land or water are,under Ghanaian law, the property of Ghana and vested in the President on behalfof the people of Ghana. Gold Fields’ mining leases for the Tarkwa property havenot yet been ratified by the Ghanaian Parliament, as required by law. To theextent that failure to ratify these leases adversely affects their validity,there may be a material adverse effect on Gold Fields’ business, operatingresults and financial condition. In addition, a new Minerals and Mining Bill,or the Minerals Bill, was laid before the Ghanaian Parliament in fiscal 2005.If the Minerals Bill is passed it will repeal the current Minerals and MiningLaw in Ghana. Although the current draft of the Minerals Bill would not appearto have a substantial effect on Gold Fields’ Ghana operations as currently run,Gold Fields cannot be certain what provisions will be included in the MineralsBill when approved into law. If, when passed, the Minerals Bill imposessignificant new costs or burdens on Gold Fields’ abilities to mine in Ghana orto obtain new mining leases for properties on which deposits are identified, itcould have a material adverse effect on Gold Fields’ business operating resultsand financial condition. See “Information on the Company — Regulatory andEnvironmental Matters — Ghana — Mineral Rights.”

 

***Gold Fields’ operations in Australia are subject to environmentalregulations which could impose significant costs and burdens.***

 

Gold Fields’ Australianoperations are subject to various laws and regulations relating to theprotection of the environment, which are similar in scope to those of SouthAfrica and Ghana. Gold Fields may, in the future, incur significant costs tocomply with the Australian environmental requirements imposed under existing ornew legislation, regulations or permit requirements or to comply with changesin existing laws and regulations or the manner in which they are applied. Thesecosts may have a material adverse effect on Gold Fields’ business, operatingresults and financial condition.

 

Australian mining companiesare required by law to undertake rehabilitation works as part of their ongoingoperation. Gold Fields makes provisions in its accounts for the estimated costof environmental rehabilitation for its Australian mining properties. GoldFields guarantees its environmental obligations by providing the WesternAustralian government with unconditional bank-guaranteed performance bonds tosecure the estimated costs. These bonds do not cover remediation for eventsthat were unforeseen at the time the bond was taken. Changes in the requiredmethod of calculation for these bond amounts or an unforeseen circumstance whichproduces unexpected costs may materially and adversely affect futureenvironmental expenditures. See “Information on the Company — Regulatory andEnvironmental Matters — Australia — Environmental.”

 

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***Gold Fields’ operations in Australia are subject to health and safetyregulations which could impose significant costs and burdens.***

 

The Western Australian MinesSafety and Inspection Act 1994 (WA), or the Safety and Inspection Act, imposesa duty on a mine owner to provide and maintain a working environment which issafe for mine workers. The regulations prescribe specific measures to be takenand provide for inspectors to review the work site for hazards and violationsof the health and safety laws. The Safety and Inspection Act was amended in April 2005to provide, among other things, a new regime of penalties, broader powers forinspectors and new duties of care for employers. A violation of the health andsafety laws or a failure to comply with the instructions of the relevant healthand safety authorities could lead to, among other things, a temporary shutdownof all or a portion of the mine, a loss of the right to mine or the impositionof costly compliance procedures and penalties (including imprisonment). Ifhealth and safety authorities require Gold Fields to shut down all or a portionof the mine or to implement costly compliance measures, whether pursuant toexisting or new health and safety laws and regulations, such measures couldhave a material adverse effect on Gold Fields’ business, operating results andfinancial condition.

 

***Gold Fields’ tenements in Australia are subject to native title claimsand include Aboriginal heritage sites which could impose significant costs andburdens.***

 

Certain of Gold Fields’tenements are subject to native title claims, and there are Aboriginal heritagesites located on certain of Gold Fields’ tenements. Native title and Aboriginallegislation protects the rights of Aboriginals in relation to the land incertain circumstances. Other tenements may become subject to native titleclaims if Gold Fields seeks to expand or otherwise change its interest inrights to those tenements. Native title claims could require costlynegotiations with the claimants or could affect Gold Fields’ access to or useof its tenements, and, as a result, have a material adverse effect on GoldFields’ business, operating results and financial condition.

 

Aboriginal heritage sitesrelate to distinct areas of land which have either ongoing ethnographic,archaeological or historic significance. Aboriginal heritage sites have beenidentified with respect to portions of some of Gold Fields Australian miningtenements. Additional Aboriginal heritage sites may be identified on the sameor additional tenements. Gold Fields may, in the future, incur significantcosts as a result of changes in the interpretation of, or new laws regarding,native title and Aboriginal heritage, which may result in a material adverseeffect on Gold Fields’ business, operating results and financial conditions.See “Information on the Company — Regulatory and Environmental Matters —Australia — Land Claims.”

 

***Investors in the United States may have difficulty bringing actions,and enforcing judgments, against Gold Fields, its directors and its executiveofficers based on the civil liabilities provisions of the federal securitieslaws or other laws of the United States or any state thereof.***

 

Gold Fields is incorporatedin South Africa. The majority of Gold Fields’ directors and executive officers(and certain experts named herein) reside outside of the United States.Substantially all of the assets of these persons and substantially all of theassets of Gold Fields are located outside the United States. As a result, itmay not be possible for investors to enforce against these persons or GoldFields a judgment obtained in a United States court predicated upon the civilliability provisions of the federal securities or other laws of the UnitedStates or any state thereof. A foreign judgment is not directly enforceable inSouth Africa, but constitutes a cause of action which will be enforced by SouthAfrican courts provided that:

 

•   the court which pronounced the judgment hadjurisdiction to entertain the case according to the principles recognized bySouth African law with reference to the jurisdiction of foreign courts; 

•   the judgment is final and conclusive (thatis, it cannot be altered by the court which pronounced it);

•   the judgment has not lapsed;

•   the recognition and enforcement of thejudgment by South African courts would not be contrary to public policy,including observance of the rules of natural justice which require thatthe documents initiating the United States proceeding were properly served onthe defendant and that the defendant was given the right to be heard andrepresented by counsel in a free and fair trial before an impartial tribunal;

•   the judgment was not obtained by fraudulentmeans;

•   the judgment does not involve the enforcementof a penal or revenue law; and 

•   the enforcement of the judgment is nototherwise precluded by the provisions of the Protection of Businesses Act 99 of1978, as amended, of the Republic of South Africa.    

 

It is the policy of SouthAfrican courts to award compensation for the loss or damage actually sustainedby the person to whom the compensation is awarded. Although the award ofpunitive damages is generally unknown to the South African legal system, thatdoes not mean that such awards are necessarily contrary to public policy. Whethera judgment is contrary to public policy depends on the facts of each case.Exorbitant, unconscionable, or excessive awards will generally be contrary topublic policy. South African courts cannot enter into the merits of a foreignjudgment and cannot act as a court of appeal or review over the foreign court.South African courts will usually implement their own procedural laws and,where an action based on an international contract is brought before a SouthAfrican court, the capacity of the parties to the contract will usually bedetermined 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 ofSouth Africa require that documents executed outside South Africa must beauthenticated for the purpose of use in South Africa.

 

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***Because the principal trading market for Gold Fields’ ordinary sharesis the JSE Securities Exchange South Africa, investors face liquidity risk inthe market for Gold Fields’ ordinary shares.***

 

Theprincipal trading market for Gold Fields’ ordinary shares is the JSE SecuritiesExchange South Africa, or the JSE. Historically, trading volumes and liquidityof shares listed on the JSE have been low in comparison with other major markets.The ability of a holder to sell a substantial number of Gold Fields’ ordinaryshares on the JSE in a timely manner, especially in a large block trade, may berestricted by this limited liquidity. See “The Offer and Listing — The JSESecurities Exchange South Africa.”

 

***Gold Fields may not pay dividends or make similar payments to itsshareholders in the future.***

 

Gold Fields pays cashdividends only if funds are available for that purpose. Whether funds areavailable 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.

 

***Gold Fields’ non-South African shareholders face additional investmentrisk from currency exchange rate fluctuations since any dividends will be paidin Rand.***

 

Dividends or distributionswith respect to Gold Fields’ ordinary shares have historically been paid inRand. The U.S. dollar or other currency equivalent of any dividends ordistributions with respect to Gold Fields’ ordinary shares will be adverselyaffected by potential future reductions in the value of the Rand against theU.S. dollar or other currencies. In the future, it is possible that there willbe changes in South African exchange control regulations, such that dividendspaid out of trading profits will no longer be freely transferable outside SouthAfrica to shareholders who are not residents of the Common Monetary Area. See “AdditionalInformation — South African Exchange Control Limitations Affecting SecurityHolders.”

 

***Gold Fields’ ordinary shares are subject to dilution upon the exerciseof Gold Fields’ outstanding options and the Mvela Gold share exchange option.***

 

As of November 30,2005, Gold Fields had an aggregate of 1,000,000,000 ordinary shares authorizedto be issued and as of that date an aggregate of 492,114,739 ordinary shareswere issued and outstanding. Gold Fields currently has two securities optionplans which are authorized to grant options in an amount of up to an aggregateof 25,071,013 ordinary shares. At their annual general meeting on November 17,2005, Gold Fields’ shareholders approved two new securities option plans whichwill replace the outstanding plans. However, these plans have not yet beenimplemented. Gold Fields had outstanding as of November 30, 2005, optionsto purchase a total of 10,002,222 ordinary shares at exercise prices of betweenRand 13.55 and Rand 154.65 that expire between June 30, 2006 and November 1,2012 under the GF Management Incentive Scheme and 335,400 ordinary shares atexercise prices of between Rand 43.70 and 110.03 that expire between October 31,2006 and February 18, 2010 under the GF Non-Executive Director Share Plan.Shareholders’ equity interests in Gold Fields will be diluted to the extent offuture exercises of these options and any additional options. See “Directors,Senior Management and Employees — The GF Management Incentive Scheme,” and “Directors,Senior Management and Employees — The GF Non-Executive Director Share Plan.”

 

As part of the MvelaphandaTransaction, Mvela Gold is obliged to subscribe for 15% of the share capital ofGFI Mining South Africa (Proprietary) Ltd, or GFIMSA, a wholly owned subsidiaryof Gold Fields, upon repayment of the Mvela Loan. Under the Subscription andShare Exchange Agreement entered into in connection with the MvelaphandaTransaction, 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 diluted ifGold Fields or Mvela Gold requires the exchange of GFIMSA shares for GoldFields’ shares. See “Operating and Financial Review and Prospects — Overview—General — Mvelaphanda Transaction.”

 

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**Item 4: INFORMATION ON THE COMPANY**

 

**Introduction**

 

Gold Fields is a significantproducer of gold and major holder of gold reserves in South Africa, Ghana andAustralia. Gold Fields is primarily involved in underground and surface goldmining and related activities, including exploration, extraction, processingand smelting, and also has strategic interests in platinum group metalsexploration. 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.

 

The majority of Gold Fields’operations, based on gold production, are located in South Africa. It also ownsthe St. Ives and Agnew gold mining operations in Australia and has a 71.1%interest in each of the Tarkwa gold mine and the Damang gold mine in Ghana. Inaddition, Gold Fields has gold and other precious metal exploration activitiesand interests in Africa, Australasia, China, Europe, North America and SouthAmerica. Gold Fields owns 100% of the Arctic Platinum Project, or APP, innorthern Finland, which is evaluating the economic potential of deposits ofopen pittable and underground platinum group metal mineralization, although itis in the process of finalizing an arrangement with North American PalladiumLtd., or NAP, whereby NAP may acquire up to 60% of APP. Gold Fields is in theprocess of acquiring 92% of the voting shares (which is effectively 80.7% ofthe economic interest) of Sociedad Minera La Cima S.A., the owner of the CerroCorona Project in Peru which is evaluating the economic potential of depositsof open pittable gold and copper mineralization, and has entered into an agreementproviding for Gold Fields to acquire all of the outstanding securities notcurrently held by Gold Fields of Bolivar Gold Corp., which operates the Choco10 open pit gold mine in the El Callao gold district in the Bolivar State,Venezuela. See “— Exploration — Gold Fields’ Exploration Projects — CerroCorona Project” and “— Recent Developments — Acquisition of Bolivar Gold Corp.”

 

Gold Fields’ operationsinclude:

 

•   **Driefontein Operation**. This operation consists of seven shaftsystems and three gold plants in South Africa’s Gauteng Province nearCarletonville. Driefontein produced 1.2 million ounces of gold during theyear ended June 30, 2005, accounting for approximately 29% of attributablegold production for Gold Fields in fiscal 2005. The operation employedapproximately 17,200 people as of June 30, 2005 including a limited numberworking for outside contractors at the site. The Driefontein operation includesboth underground mining and surface rock dump processing.

•   **Kloof Operation**. This operation consists of five shaftsystems and two gold plants in South Africa’s Gauteng Province nearCarletonville. Kloof produced 1.0 million ounces of gold during the yearended June 30, 2005, accounting for approximately 24% of attributable goldproduction for Gold Fields in fiscal 2005. The operation employed approximately15,400 people as of June 30, 2005 including a limited number working foroutside contractors at the site. The Kloof operation includes both undergroundmining and some surface rock dump processing.

•   **Beatrix Operation**. This operation consists of four shaftsystems and two gold plants in South Africa’s Free State Province near Welkomand Virginia. The Beatrix operation produced 0.6 million ounces of goldduring the year ended June 30, 2005, accounting for approximately 15% ofattributable gold production for Gold Fields in fiscal 2005. The operationemployed approximately 12,300 people as of June 30, 2005 including alimited number working for outside contractors at the site. The Beatrixoperation consists of both underground mining and some limited surface rockdump processing.

•   **Ghana Operation**. This operation consists of: (1) theTarkwa mine, which comprises several open pit operations with two heap leachrecovery facilities and a SAG mill and CIL plant and (2) the Damang mine,which consists of a number of open pit operations with a CIL plant. Both minesare located in southwestern Ghana, about 300 and 360 kilometers by road west ofAccra, respectively. During the year ended June 30, 2005, the Ghanaoperation produced 0.9 million ounces of gold (of which 0.6 millionounces of gold were attributable to Gold Fields and the remainder to minorityshareholders in the Ghana operation), accounting for approximately 15% ofattributable gold production for Gold Fields in fiscal 2005. The operation hadapproximately 4,200 employees as of June 30, 2005, including those workingfor the outside contractor at Damang.                                                 

•   **Australia Operation**. This operation consists of the St. Ives andAgnew mines. Both mines are located in the state of Western Australia, with St.Ives situated near Kambalda, straddling Lake Lefroy, and Agnew situated nearLeinster. These two mines together produced 0.7 million ounces of goldduring the year ended June 30, 2005, accounting for approximately 17% ofattributable gold production for Gold Fields in fiscal 2005. St. Ives and Agnewhad approximately 1,400 employees as of June 30, 2005, including thoseworking for outside contractors at the sites. St. Ives and Agnew conduct bothunderground and surface operations.   

 

Based on the figuresreported by Gold Fields’ mining operations, as of June 30, 2005, GoldFields reported attributable proven and probable reserves of approximately62.8 million ounces of gold (including 2.4 million ounces of proven andprobable gold reserves for the Cerro Corona Project that will be attributableto Gold Fields upon completion of its acquisition of an 80.7% economic interestin the Cerro Corona Project; see “— Exploration — Gold Fields’ ExplorationProjects — Cerro Corona Project”). In the year ended June 30, 2005, GoldFields processed 47.9 million tonnes of ore and produced 4.5 millionounces of gold, of which 4.2 million ounces were attributable to GoldFields.

 

**History**

 

The company that is todayGold Fields was originally incorporated as East Driefontein Gold Mining CompanyLimited on May 3, 1968, and subsequently changed its name to DriefonteinConsolidated Limited. The Gold Fields group holdings evolved through a seriesof transactions, principally in 1998 and 1999.

 

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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 Gencor Limited, Gold Fields ofSouth Africa Limited and New Wits Limited and certain other shareholders in thecompanies owning the assets and interests including:

 

•   a 100% interest in Beatrix Mines Limited, orBeatrix, which in turn owned a 100% interest in Beatrix Mining Company Limited,or BMC, BMC owned the Beatrix mine;

•   a 37.3% interest in Driefontein ConsolidatedLimited, which owned the Driefontein operation;

•   a 100% interest in Kloof Gold Mining CompanyLimited, or Kloof, which owned the Kloof operation;

•   a 54.2% interest in St. Helena Gold MinesLimited, or St. Helena, which owned the St. Helena and Oryx mines;

•   a 100% interest in Gold Fields GuernseyLimited, or Gold Fields Guernsey, which indirectly owned a 70% interest in theTarkwa mine (which was later increased to 71.1% due to the dilution of theother shareholders);

•   a 100% interest in Orogen Holding(BVI) Limited, or Orogen; and

•   various exploration and other rights andassets.

 

The Driefontein, Kloof andTarkwa interests were acquired from Gold Fields of South Africa Limited, whilethe Beatrix and St. Helena interests were originally acquired from GencorLimited. New Wits Limited provided various mineral rights. Original Gold Fieldsthen 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 acquiror 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.

 

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

 

•   GFL Mining Services Limited transferred itsinterests in Beatrix, St. Helena, Oryx and Kloof to Gold Fields; and

•   Gold Fields transferred the Driefontein mineas a going concern to a shelf company named Driefontein Consolidated(Proprietary) Limited, a wholly-owned subsidiary of 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 toGold Fields 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 Reviewand Prospects — Overview — Mvelaphanda Transaction.”

 

Gold Fields is a publiccompany incorporated in South Africa, with a registered office located at 24St. Andrews Road, Parktown 2193, South Africa, telephone number011-27-11-644-2400.

 

**OrganizationalStructure**

 

Gold Fields is a holdingcompany with its ownership interests organized as set forth below.

 

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**Group Structure(1)**

 

 

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Notes:

(1)               Unless otherwise stated, all subsidiariesare, directly or indirectly, wholly owned by Gold Fields Limited.

(2)               Gold Fields is in the process of acquiringthis interest. 

(3)               In fiscal 2006, Gold Fields Guernsey Limitedand Gold Fields Ghana Holdings Limited changed their incorporation to theBritish Virgin Islands and their names to Gold Fields Holding Company BVILimited and Gold Fields Ghana BVI Limited, respectively.

 

21

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•   **South Africa**. Gold Fields’ interests in the Driefontein,Kloof and Beatrix operations are held through GFIMSA.

•   **Ghana**. Gold Fields’ interests in the Tarkwa andDamang mines, which comprise the Ghana operation, are held through its 71.1%owned subsidiaries, Gold Fields Ghana Limited, or Gold Fields Ghana, and AbossoGoldfields Limited, or Abosso, respectively. The remaining interests in GoldFields Ghana and Abosso are indirectly held by IAMGold Corporation, or IAMGold,which acquired an 18.9% beneficial interest previously held by Repadre CapitalCorporation following a merger between the two companies on January 8,2003, and the Government of Ghana, which holds a 10.0% interest, which theGovernment acquired as a free carried interest for no cost.

•   **Australia**. Gold Fields’ interests in the St. Ives andAgnew mines are held through two wholly-owned Australian subsidiaries, St. IvesGold Mining Company Pty Ltd. and Agnew Gold Mining Company Pty Ltd., which, inturn, are wholly owned through intermediaries by Orogen.

•   **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 Guernsey. Orogen holds APP through intermediaries.

 

**Strategy**

 

***General***

 

Gold Fields is a significantproducer of gold and major holder of gold reserves in South Africa, Ghana andAustralia. Gold Fields also has reported gold and copper reserves at the CerroCorona Project, a development project in Peru. The gold industry hashistorically been highly fragmented and a trend has been underway toconsolidate the industry through mergers and acquisitions.

 

***Global Context***

 

Gold Fields’ strategy wasdeveloped in the context of a global market characterized by an extended periodof low gold prices, reduced global expenditure on gold exploration andincreasing industry consolidation. This strategy has evolved over time, butdespite the recent increase in the price of gold, Gold Fields has maintained astrategy of general caution with respect to financial commitments whilemaintaining full exposure to the effects of the gold price.

 

Generally, Gold Fields’strategy consists of the following key elements:

 

•   Operational excellence, which is aimed atimproving returns through the optimization of existing assets. This is achievedin the first instance through improving productivity. Secondly, it also impliesthe reduction of costs through cost management initiatives and growing assetsthrough inward investment;

•    Growing Gold Fields by diversifyinggeographical, technical and product risk through acquiring and developingadditional long-life assets. Starting in fiscal 2004, Gold Fields set a goal ofachieving an additional 1.5 million ounces of annual gold production by the endof calendar 2009;

•    Securing the future of Gold Fields by earningand maintaining what Gold Fields calls its “license to operate” in thosecountries and regions in which it operates and upholding strong principles ofcorporate governance. Gold Fields views its ability to conduct its operationsas involving a reciprocal commitment from Gold Fields to the communities whereit is located to deal with issues related to sustainable development.

 

***Operational Excellence***

 

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

 

•   Increasing development rates at the SouthAfrican operations to provide for ore reserve and mining flexibility

•   Increasing quality mining through increasingvolumes mined above the paylimit and/or cut-offs and ensuring that dilution isminimized. Dilution can be minimized through programs aimed at reducing thequantities of waste mined both underground and in the open pits. Quality can beimproved through ongoing grade control and optimizing mine call factors;

•   Increasing productivity through skillsdevelopment programs, aligning incentive schemes with desired outcomes,removing bottlenecks, improving ventilation and lowering temperatures at theSouth African operations, rationalization of infrastructure and plantmodernizations;

•   Investing in cost reduction through replacementof older equipment with modern and more efficient equipment;

•   Reducing costs through improving controlsover the consumption of materials used on the mines, implementing improvedprocurement practices and exploring opportunities for global and regionalsupply contracts; and

•   Improving efficiencies and controls in areassuch as people management, planned maintenance, transport and medicalfacilities. 

 

***Acquisitions and Exploration***

 

Gold Fields is one of thelargest producers of gold in the world based on annual gold production. GoldFields’ corporate development mandate is to grow as a world leader indeveloping and operating low-cost, long life precious metal mines. Gold Fieldsis sensitive to the fact that increased competition for acquisitions and highergold prices are pushing asset prices to levels that threaten returns. Theimpact on returns has

 

22

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been exacerbated by higherinput costs, particularly as significant increases in base metal prices has ledto increased mining of base metals, which uses some of the same inputs as goldmining, and therefore increased overall demand for those products.

 

For acquisitions of goldassets or companies outside South Africa, Gold Fields is at somewhat of adisadvantage to certain of its competitors, but this also has offsettingstrengths. First, South African exchange control regulations limit Gold Fields’ability to provide guarantees or borrow outside South Africa without expressapproval from the South African Reserve Bank, or the SARB. However, in hisspeech to Parliament towards at the end of October 2004, the Minister ofFinance outlined the South African Treasury’s medium term budget policystatement and repeated that it was the government’s eventual goal to replaceall remaining exchange controls with prudential benchmarks. He also announcedthe abolition of exchange control limits on new outward foreign directinvestments by South African corporations and the lifting of their obligationto repatriate foreign dividends. Second, shares of South African companies tendto be viewed as less attractive acquisition currency than shares of non-SouthAfrican companies, despite the relaxation of exchange controls. On the otherhand, Gold Fields has a strong balance sheet and low debt-to-equity ratio thatdiminishes the equity pricing disadvantage, and also has a skilled andeffective corporate evaluation and acquisition team, and a sound track recordin project development.

 

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 doesnot enter into forward sales, derivatives or other hedging arrangements toestablish a price in advance for future gold production. Gold Fields believesthat investors in Gold Fields’ shares seek an unlimited exposure to movementsin the U.S. dollar gold price and the resulting effect on Gold Fields’earnings.

 

However, commodity hedgesare sometimes undertaken on a project specific basis as follows:

 

•   to protect cash flows at times of significantexpenditure;

•   for specific debt servicing requirements; and

•   to safeguard the viability of higher costoperations.

 

Gold Fields may from time totime establish currency and/or interest rate financial instruments to protectunderlying cash flows or to take advantage of potential favorable currencymovements.

 

**Reserves ofGold Fields as of June 30, 2005**

 

***Methodology***

 

While there are somedifferences between the definition of the South African Code for Reporting ofMineral Resources and Mineral Reserves, or SAMREC Code, and that of the SEC’sindustry guide number 7, only reserves at each of Gold Fields’ operations andexploration projects as of June 30, 2005 which qualify as reserves forpurposes of the SEC’s industry guide number 7 are presented in the table below.See “ — Glossary of Mining Terms.”****In accordancewith the requirements imposed by the JSE, Gold Fields reports its reservesusing the terms and definitions of the SAMREC Code. Mineral reserves, asdefined under the SAMREC Code, are divided into categories of proved andprobable reserves and are expressed in terms of tonnes to be processed at millfeed head grades, allowing for estimated mining dilution and mine recoveryfactors.

 

Gold Fields reports reservesusing cut-off grades (mainly for open pit operations) and pay limits to ensurethe reserves realistically reflect both the cost structures and requiredmargins relevant to each mining operation. Cut-off grade is the grade whichdistinguishes the material within an orebody that is to be extracted andtreated, from the remaining material. The pay limit is the grade at which anorebody can be mined without profit or loss calculated using an appropriategold or copper price and working costs, plus modifying factors. Modifyingfactors used to calculate the pay limit grades include adjustments to milldelivered amounts, due to dilution incurred in the course of mining. Modifyingfactors applied in estimating reserves are primarily historical, but commonlyincorporate adjustments for planned operational improvements such as thosedescribed below under “ — Description of Mining Business — Productivity Initiatives.”Tonnage and grade includes some mineralization below the selected pay limit andcut-off grade to ensure that the reserve comprises blocks of adequate size andcontinuity. Reserves also take into account cost levels at each operation andare supported by mine plans.

 

The estimation of reservesat the South African underground operations is based on surface drilling,underground drilling, surface three-dimensional reflection seismics, orebodyfacies, structural modeling, underground channel sampling and geostatisticalestimation. The reefs are initially explored by drilling from the surface on anapproximately 500 meter to 2,000 meter grid. Once underground access isavailable, drilling is undertaken on an approximate 30 meter by 60 meter grid. Undergroundchannel sampling perpendicular to the reef is undertaken at three meterintervals in development areas and five meter intervals at stope faces. For theTarkwa open pit operation, estimation of reserves is based on a combination ofan initial 100 or 200 meter grid of diamond drilling and in certain areas a12.5 meter to 25.0 meter grid of reverse circulation drilling. For the Damangopen pit operation, estimation of reserves is based on a 20 meter to 80 metergrid of diamond drilling and in certain areas reverse circulation drilling.

 

23

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At the Australian operationsthe estimation of reserves for both underground and open-pit operations isbased on exploration, sampling and testing information gathered throughappropriate techniques, primarily from drill holes and mine development. Thelocations of sample points are spaced closely enough to deduce or confirmgeological and grade continuity. Generally, drilling is undertaken on gridswhich range between 20 meters by 20 meters to 40 meters by 40 meters, althoughthis may vary depending on the continuity of the orebody. Due to the varietyand diversity of resources at St. Ives and Agnew, sample spacing may also varydepending on each particular ore type. For the Cerro Corona Project, estimationis based on diamond drill and reverse circulation holes. The spacing of holesis generally around 50 meters, with some areas approximating a 25 meter grid.

 

***Reserve Statement***

 

Asof June 30, 2005, Gold Fields had aggregate attributable proven andprobable gold reserves of approximately 60.4 million ounces as set forthin the following table. In addition, the table reflects 2.4 million ounces ofproven and probable gold reserves representing that portion of the proven andprobable gold reserves of the Cerro Corona Project as of June 30, 2005that will be attributable to Gold Fields upon completion of Gold Fields’acquisition of the 80.7% economic interest in the Cerro Corona Project it is inthe process of acquiring. See “— Exploration — Gold Fields’ ExplorationProjects — Cerro Corona Project.”

 

**Gold Ore Reserve statement as of June 30, 2005(1)**

 
| ** **                         | ** ** | **Tonnes**    | ** ** | **Proven reserves  Head  Grade** | ** ** | **Gold**           | ** ** | **Tonnes**    | ** ** | **Probable reserves  Head  Grade** | ** ** | **Gold**           | ** ** | **Tonnes**    | ** ** | **Total reserves  Head  Grade** | ** ** | **Gold**           | ** ** | **Attributable gold  production in the  year ended  June 30,  2005(2)** | ** ** |
|------------------------------------|------------|---------------|------------|----------------------------------|------------|--------------------|------------|---------------|------------|------------------------------------|------------|--------------------|------------|---------------|------------|---------------------------------|------------|--------------------|------------|------------------------------------------------------------------------------|------------|
| ** **                         | ** ** | **(million)** | ** ** | **(g/t)**                        | ** ** | **(‘000 oz)** | ** ** | **(million)** | ** ** | **(g/t)**                          | ** ** | **(‘000 oz)** | ** ** | **(million)** | ** ** | **(g/t)**                       | ** ** | **(‘000 oz)** | ** ** | **(‘000 oz)**                                                           | ** ** |
| **Underground**                    |       |          |       |                             |       |               |       |          |       |                               |       |               |       |          |       |                            |       |               |       |                                                                         |       |
| Driefontein (total)                |       | 30.1          |       | 7.9                              |       | 7,615              |       | 59.3          |       | 8.1                                |       | 15,359             |       | 89.4          |       | 8.0                             |       | 22,973             |       | 1,018                                                                        |       |
| Above infrastructure (3)           |       | 30.1          |       | 7.9                              |       | 7,615              |       | 27.4          |       | 8.0                                |       | 7,047              |       | 57.5          |       | 7.9                             |       | 14,661             |       | —                                                                       |       |
| Below infrastructure (3)           |       | —        |       | —                           |       | —             |       | 31.9          |       | 8.1                                |       | 8,312              |       | 31.9          |       | 8.1                             |       | 8,312              |       | —                                                                       |       |
| Kloof (total)                      |       | 13.6          |       | 10.2                             |       | 4,460              |       | 34.0          |       | 9.4                                |       | 10,309             |       | 47.6          |       | 9.7                             |       | 14,769             |       | 1,012                                                                        |       |
| Above infrastructure (3)           |       | 13.6          |       | 10.2                             |       | 4,460              |       | 29.0          |       | 9.0                                |       | 8,406              |       | 42.6          |       | 9.4                             |       | 12,866             |       | —                                                                       |       |
| Below infrastructure (3)           |       | —        |       | —                           |       | —             |       | 5.0           |       | 11.9                               |       | 1,903              |       | 5.0           |       | 11.9                            |       | 1,903              |       | —                                                                       |       |
| Beatrix (total)                    |       | 14.4          |       | 5.5                              |       | 2,531              |       | 32.8          |       | 5.4                                |       | 5,676              |       | 47.2          |       | 5.4                             |       | 8,206              |       | 615                                                                          |       |
| Above infrastructure (3)           |       | 14.4          |       | 5.5                              |       | 2,531              |       | 32.8          |       | 5.4                                |       | 5,676              |       | 47.2          |       | 5.4                             |       | 8,206              |       | —                                                                       |       |
| Below infrastructure (3)           |       | —        |       | —                           |       | —             |       | 0.0           |       | —                             |       | 0.0                |       | 0.0           |       | —                          |       | 0.0                |       | —                                                                       |       |
| **Australia**                      |       |          |       |                             |       |               |       |          |       |                               |       |               |       |          |       |                            |       |               |       |                                                                         |       |
| St. Ives                           |       | 0.2           |       | 6.5                              |       | 42                 |       | 7.6           |       | 5.0                                |       | 1,213              |       | 7.8           |       | 5.0                             |       | 1,255              |       | 351                                                                          |       |
| Agnew                              |       | 0.4           |       | 13.1                             |       | 174                |       | 1.2           |       | 9.9                                |       | 372                |       | 1.6           |       | 10.7                            |       | 546                |       | 176                                                                          |       |
| **Total Underground**              |       | 58.7          |       | 7.9                              |       | 14,821             |       | 134.9         |       | 7.6                                |       | 32,928             |       | 193.6         |       | 7.7                             |       | 47,749             |       | 3,172                                                                        |       |
| **Surface (Rock Dumps)**           |       |          |       |                             |       |               |       |          |       |                               |       |               |       |          |       |                            |       |               |       |                                                                         |       |
| Driefontein                        |       | —        |       | —                           |       | —             |       | 10.6          |       | 1.2                                |       | 403                |       | 10.6          |       | 1.2                             |       | 403                |       | 145                                                                          |       |
| Kloof                              |       | —        |       | —                           |       | —             |       | 8.7           |       | 0.7                                |       | 185                |       | 8.7           |       | 0.7                             |       | 185                |       | 25                                                                           |       |
| Beatrix                            |       | —        |       | —                           |       | —             |       | 0             |       | —                             |       | 0                  |       | 0             |       | —                          |       | 0                  |       | 9                                                                            |       |
| **Surface (Production Stockpile)** |       |          |       |                             |       |               |       |          |       |                               |       |               |       |          |       |                            |       |               |       |                                                                         |       |
| **Ghana**                          |       |          |       |                             |       |               |       |          |       |                               |       |               |       |          |       |                            |       |               |       |                                                                         |       |
| Tarkwa                             |       | 3.7           |       | 0.8                              |       | 95                 |       | —        |       | —                             |       | —             |       | 3.7           |       | 0.8                             |       | 95                 |       | —                                                                       |       |
| Damang                             |       | 5.4           |       | 1.3                              |       | 231                |       | —        |       | —                             |       | —             |       | 5.4           |       | 1.3                             |       | 231                |       | —                                                                       |       |
| **Australia**                      |       |          |       |                             |       |               |       |          |       |                               |       |               |       |          |       |                            |       |               |       |                                                                         |       |
| St. Ives                           |       | 7.0           |       | 1.2                              |       | 268                |       | —        |       | —                             |       | —             |       | 7.0           |       | 1.2                             |       | 268                |       | —                                                                       |       |
| Agnew                              |       | 0.4           |       | 1.6                              |       | 18                 |       | —        |       | —                             |       | —             |       | 0.4           |       | 1.6                             |       | 18                 |       | —                                                                       |       |
| **Surface (Open Pit)**             |       |          |       |                             |       |               |       |          |       |                               |       |               |       |          |       |                            |       |               |       |                                                                         |       |
| **Ghana**                          |       |          |       |                             |       |               |       |          |       |                               |       |               |       |          |       |                            |       |               |       |                                                                         |       |
| Tarkwa                             |       | 131.2         |       | 1.3                              |       | 5,611              |       | 95.5          |       | 1.2                                |       | 3,825              |       | 226.7         |       | 1.3                             |       | 9,436              |       | 481                                                                          | (4)        |
| Damang (5) (6)                |       | 3.2           |       | 2.4                              |       | 246                |       | 8.1           |       | 1.8                                |       | 478                |       | 11.3          |       | 2.0                             |       | 724                |       | 176                                                                          | (4)        |
| **Australia**                      |       |          |       |                             |       |               |       |          |       |                               |       |               |       |          |       |                            |       |               |       |                                                                         |       |
| St. Ives (5)                       |       | 0.7           |       | 2.4                              |       | 52                 |       | 14.8          |       | 2.0                                |       | 941                |       | 15.5          |       | 2.0                             |       | 993                |       | 176                                                                          | (4)        |
| Agnew  (5)                    |       | 0.1           |       | 2.4                              |       | 9                  |       | 2.8           |       | 3.2                                |       | 289                |       | 2.9           |       | 3.2                             |       | 297                |       | 36                                                                           | (4)        |
| **Peru**                           |       |          |       |                             |       |               |       |          |       |                               |       |               |       |          |       |                            |       |               |       |                                                                         |       |
| Cerro Corona(7)                    |       | 19.1          |       | 1.1                              |       | 703                |       | 54.0          |       | 1.0                                |       | 1,660              |       | 73.1          |       | 1.0                             |       | 2,363              |       | —                                                                       |       |
| **Total Surface**                  |       | 170.8         |       | 1.3                              |       | 7,233              |       | 194.5         |       | 1.2                                |       | 7,781              |       | 365.3         |       | 1.3                             |       | 15,013             |       | 1,048                                                                        |       |
| **Total**                          |       | 229.5         |       | 3.0                              |       | 22,054             |       | 329.4         |       | 3.8                                |       | 40,709             |       | 558.9         |       | 3.5                             |       | 62,762             |       | 4,221                                                                        | (8)        |

 

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Notes:

(1)               Quoted as mill delivered tonnes and run ofmine grades, inclusive of all mining dilutions and gold losses except millrecovery. Metallurgical recovery factors have not been applied to the reservefigures. The approximate metallurgical factors are as follows: (1) Driefontein97%; (2) Kloof 97%; (3) Beatrix 96%; (4) Tarkwa 95% for milling,67% for heap leach; (5) Damang 89%-93%; (6) St. Ives 85%-95% formilling, 60% for heap leach and (7) Agnew 93%-95%. For Driefontein, Kloofand Beatrix, a gold price of Rand 92,000 per kilogram ($375 per ounce at anexchange rate of Rand 7.63 per $1.00) was applied in calculating ore reservefigures. For the Tarkwa and Damang operations and the Cerro Corona Project, orereserve figures are based on an optimized pit at a gold price of $375 perounce. For the Australian operations ore reserve figures are based on a goldprice of A$560 per ounce ($375 per ounce at an exchange rate of A$1.49 per$1.00). Open pit ore reserves at the Australian operations are similarly basedon optimized pits. The gold price used for reserves is the three year average,calculated on a monthly basis, of the London afternoon fixing price of gold.

(2)               Actual gold produced after metallurgicalrecovery.

(3)               Above infrastructure reserves relate tomineralization which is located at a level at which an operation currently hasinfrastructure sufficient to allow mining operations to occur. 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.

(4)               Includes some gold produced from stockpilematerial which cannot be separately measured.

(5)               Excludes inferred material within the pitdesign.

(6)               Includes 33,000 oz for Lima South, for whichan application for conversion from a prospecting license to mining license hasbeen lodged. The application for the conversion to a mining lease requires thegrant of an environmental permit from the Ghanaian Environmental ProtectionAgency. Gold Fields is not aware of any significant impediment to the grant ofthat permit.         

(7)               The Cerro Corona Project is an explorationproject in Peru for which applications for environmental and mining permitshave been lodged. Gold Fields is not aware of any significant impediment to thegrant of the permits. Gold Fields has an agreement to acquire 80.7% of theeconomic interest in the Cerro Corona Project and thus the above chart reflectsthe 80.7% of the reserves that will be attributable to Gold Fields oncompletion of the acquisition of the interest. See “— Exploration — Gold Fields’Exploration Projects — Cerro Corona Project.”

(8)               The total does not reflect the sum of theline items due to rounding.

 

Thefollowing table sets forth the proven and probable copper reserves of the CerroCorona Project as of June 30, 2005 that will be attributable to GoldFields upon completion of Gold Fields’ acquisition of the 80.7% economicinterest in the Cerro Corona Project it is in the process of acquiring. See “—Exploration — Gold Fields’ Exploration Projects — Cerro Corona Project.”

 

 

**Copper Ore Reserve statement as of June 30, 2005**

 
| ** **             | ** ** | **Tonnes**    | ** ** | **Proved Reserves  Cu** | ** ** | **Cu**            | ** ** | **Tonnes**    | ** ** | **Probable Reserves  Cu** | ** ** | **Cu**            | ** ** | **Tonnes**    | ** ** | **Total Reserves  Cu** | ** ** | **Cu**            | ** ** | **Attributable Cu production  in the year ended  June 30, 2005** | ** ** |
|------------------------|------------|---------------|------------|-------------------------|------------|-------------------|------------|---------------|------------|---------------------------|------------|-------------------|------------|---------------|------------|------------------------|------------|-------------------|------------|-----------------------------------------------------------------------|------------|
| ** **             | ** ** | **(million)** | ** ** | **(%)**                 | ** ** | **(million lbs)** | ** ** | **(million)** | ** ** | **(%)**                   | ** ** | **(million lbs)** | ** ** | **(million)** | ** ** | **(%)**                | ** ** | **(million lbs)** | ** ** | **(million lbs)**                                                     | ** ** |
| **Surface (Open Pit)** |       |          |       |                    |       |              |       |          |       |                      |       |              |       |          |       |                   |       |              |       |                                                                  |       |
| Peru Cerro Corona(1)   |       | 19.1          |       | 0.6                     |       | 268               |       | 54.0          |       | 0.5                       |       | 595               |       | 73.1          |       | 0.5                    |       | 862               |       | —                                                                |       |

 

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Note:

(1)               The Cerro Corona Project is an explorationproject in Peru for which applications for environmental and mining permitshave been lodged. Gold Fields is not aware of any significant impediment to thegrant of the permits. Gold Fields has an agreement to acquire 80.7% of theeconomic interest in the Cerro Corona Project and thus the above chart reflectsthe 80.7% of the reserves that will be attributable to Gold Fields oncompletion of the acquisition of the interest. See “— Exploration — Gold Fields’Exploration Projects — Cerro Corona Project.”

 

25

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The amount of goldmineralization which Gold Fields can economically extract, and therefore canclassify as reserves, is very sensitive to fluctuations in the price of gold.At gold prices different from the gold price of $375 per ounce used to estimateGold Fields’ attributable reserves of 62.8 million ounces of gold as of June 30,2005 listed above, Gold Fields’ operations would have had significantlydifferent reserves. Based on the same methodology and assumptions as were usedto estimate Gold Fields’ reserves as of June 30, 2005 listed above, butapplying different gold prices that are 10% above and below the $375 per ouncegold price used to estimate Gold Fields’ attributable reserves, theattributable gold reserves of Gold Fields’ operations would have been asfollows:

 

| ** **        | ** ** | **$ 338/oz**  | ** ** | **$ 375/oz**  | ** ** | **$ 413/oz**  | ** ** |
|-------------------|------------|--------------------|------------|--------------------|------------|--------------------|------------|
| ** **        | ** ** | **(‘000 oz)** | ** ** | **(‘000 oz)** | ** ** | **(‘000 oz)** | ** ** |
| Driefontein(1)    |       | 14,316             | (2)        | 22,973             |       | 23,647             |       |
| Kloof (1)         |       | 10,403             |       | 14,769             |       | 18,630             |       |
| Beatrix(1)        |       | 5,786              |       | 8,206              |       | 10,197             |       |
| Tarkwa            |       | 8,204              |       | 9,532              |       | 11,369             |       |
| Damang            |       | 766                |       | 956                |       | 1,189              |       |
| St. Ives          |       | 2,306              |       | 2,516              |       | 2,699              |       |
| Agnew             |       | 840                |       | 861                |       | 890                |       |
| Cerro Corona      |       | 2,081              |       | 2,363              |       | 2,363              | (3)        |
| Total(1) (4) |       | 44,702             |       | 62,176             |       | 70,984             |       |

 

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Notes:

(1)               South African operations’ reserves excluderock dumps.

(2)               Excludes Shaft No. 5 belowinfrastructure material which would not be economical to mine, and thus wouldnot be a reserve, at this lower gold price.

(3)               Under the current tailings dam design at theCerro Corona Project, reserves would not respond to an upward movement of thegold or copper prices because of current capacity constraints at the tailingsstorage facility for the Cerro Corona Project.

(4)               The sensitivity analyses are calculated as10% above and below the base price in the local currency of the respectiveoperation at an exchange rate of Rand 7.63 per $1.00 for the South Africanoperations and A$1.49 per $1.00 for the Australian operation.

 

The London afternoon fixingprice for gold on November 30, 2005 was $495.65 per ounce.

 

Gold Fields’ attributablegold reserves decreased from 75.6 million ounces at June 30, 2004 to 62.8million ounces at June 30, 2005 (including 2.4 million ounces of provenand probable gold reserves for the Cerro Corona Project that will beattributable to Gold Fields upon completion of its acquisition of an 80.7%economic interest in the Cerro Corona Project; see “ — Exploration — GoldFields’ Exploration Projects — Cerro Corona Project”). This decrease wasprimarily due to removal of the below infrastructure reserves at the EasternBoundary Area for Kloof and removal of a portion of the Kloof Extension Area asa result of new geological and resource models based on new information as tothe geological ore body at the site and, to a lesser extent, gold mining forfiscal 2005. The new models gave a more precise view of the ore bodies in theseareas and indicated that the ore body is more challenging than originally anticipatedand indicated. Accordingly, the Eastern Boundary Area and a portion of theKloof Extension Area need to be re-engineered and costed before amounts forthese areas can be included as reserves.

 

The amount of coppermineralization which Gold Fields can economically extract, and therefore canclassify as reserves, is sensitive to fluctuations in the price of copper. Atcopper prices different from the copper price of $0.90 per pound used toestimate Gold Fields’ attributable copper reserves of 862 million pounds as of June 30,2005 listed above, Gold Fields’ operations would have had significantlydifferent copper reserves. Based on the same methodology and assumptions aswere used to estimate Gold Fields’ copper reserves as of June 30, 2005listed above, but applying different copper prices that are 10% above and belowthe copper price of $0.90 per pound used to estimate Gold Fields’ attributablecopper reserves, the attributable copper reserves of Gold Fields’ operationswould have been as follows:

 

| ** **      | ** ** | **$ 0.81/lb** | ** ** | **$ 0.90/lb** | ** ** | **$ 0.99/lb** | ** ** |
|-----------------|------------|--------------------|------------|--------------------|------------|--------------------|------------|
| ** **      | ** ** | **(million lbs)**  | ** ** | **(million lbs)**  | ** ** | **(million lbs)**  | ** ** |
| Cerro Corona(1) |       | 766                |       | 862                |       | 862                |       |

 

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Note:

(1)               Under the current tailings dam design at theCerro Corona Project, reserves would not respond to an upward movement of thegold or copper prices because of current capacity constraints at the tailingsstorage facility for the Cerro Corona Project.

 

Gold Fields’ methodology fordetermining its reserves is subject to change and is based upon estimates andassumptions made by management regarding a number of factors as noted aboveunder “ — Methodology.” Accordingly, the sensitivity analysis of Gold Fields’reserves provided above should not be relied upon as indicative of what theestimate of Gold Fields’ reserves would actually be or have been at the gold orcopper prices indicated, or at any other gold or copper price, nor should it berelied upon as a basis for estimating Gold Fields’ ore reserves based on thecurrent gold or copper price or what Gold Fields’ reserves will be at any timein the future. See “Key Information — Risk Factors — Gold Fields’ reserves areestimates based on a number of assumptions, any changes to which may requireGold Fields to lower its estimated reserves.”

 

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***Geology***

 

The majority of Gold Fields’gold production is derived from deep-level underground gold mines located alongthe northern and western margins of the Witwatersrand Basin in South Africa.These properties include the Beatrix operation, the Driefontein operation andthe Kloof operation. These mines are typical of the many Witwatersrand Basinoperations which together have produced over 1.3 billion ounces of goldover a period of more than 100 years.

 

The Witwatersrand Basincomprises a 6,000 meter vertical thickness of sedimentary rocks, extendinglaterally for some 300 kilometers northeast to southwest by some 100 kilometersnorthwest to southeast, generally dipping at shallow angles towards the centerof the basin. The basin outcrops at its northern extent near Johannesburg butto the west, south and east it is overlain by up to 4,000 meters of volcanicand sedimentary rocks. The Witwatersrand Basin is Achaean in age, meaning thesedimentary rocks are of the order of 2.7 to 2.8 billion years old.

 

Gold mineralization occurswithin laterally extensive quartz pebble conglomerate horizons called reefswhich are developed above unconformable surfaces near the basin margin. As aresult of faulting and primary controls on mineralization structure, the goldfields are not continuous and are characterized by the presence or dominance ofdifferent reef units. The reefs are generally less than two meters in thicknessand are widely considered to represent laterally extensive braided fluvialdeposits or unconfined flow deposits which formed along the flanks of alluvialfan systems around the edge of an inland sea. Dykes and sills of diabase ordoleritic composition are developed within the Witwatersrand Basin and areassociated with several intrusive and extrusive events.

 

The gold generally occurs innative form, often associated with pyrite and carbon. Pyrite and gold withinthe reefs display a variety of forms, some obviously indicative of detritaltransport within the depositional system and others suggesting crystallizationwithin the reef itself.

 

The most fundamentalcontrols of gold distribution are the primary sedimentary features such asfacies variation and channel directions. Consequently, the modeling ofsedimentary features within the reefs and the correlation of payable gradeswith certain facies is key to in situ reserve estimation as well as effectiveoperational mine planning and grade control.

 

For a discussion of thegeological features present at the Tarkwa, Damang, St. Ives and Agnew mines,see the geology discussion contained in the description of each of those minesfound below under “ — Gold Fields’ Mining Operations — Ghana Operation —Tarkwa,” “ — Gold Fields’ Mining Operations — Ghana Operation — Damang,” “ —Gold Fields’ Mining Operations — Australia Operation — St. Ives,” and “ — GoldFields’ Mining Operations — Australia Operation — Agnew.”

 

**Descriptionof Mining 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 currently minesonly gold, with silver as a by-product. The mining process can be divided intotwo principal activities: (1) developing access to the orebody; and (2) extractingthe orebody once accessed. These two processes apply to both surface andunderground mines.

 

**UndergroundMining**

 

***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 the orebody.

 

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***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 surface. Mining methods employed at Gold Fields’ operations include longwallmining, closely spaced dip pillar mining and conventional scattered mining. InAustralia, extraction methods are highly mechanized, with mechanized equipmentused within the declines and at the stope for drilling, loading and hauling.South African mining methods tend to be more labor intensive than theAustralian operations.

 

**Open PitMining**

 

***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 orebody inopen pit mining involves the same activity as in stripping the overburden. Therock 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 Dumpand Production Stockpile Mining**

 

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

 

**MinePlanning and Management**

 

Operational and planningmanagement on the mines receives support from corporate management andcentralized support functions. The current philosophy is one of bottom-upmanagement, with the non-financial operational objectives at each mine definedby the personnel at the mine based on parameters, objectives and guidelinesprovided by Gold Fields’ head office. This is based on the premise that thepeople on the ground have the best understanding of what is realisticallyachievable.

 

Gold Fields has a two-stagemine planning process. Each operation compiles a life of mine, or LoM, planduring the first half of each fiscal year and a detailed two year operationalplan during the second half of each fiscal year, based on financial parametersissued to the operation by Gold Fields’ Operating Committee. See “Directors,Senior Management and Employees — Operating Committee.” The operational plan ispresented to Gold Fields’ Board before the commencement of each fiscal year.The planning process is sequential and is based upon geological models,evaluation models, depletion schedules and, ultimately, financial analysis.Capital planning is formalized pursuant to Gold Fields’ capital spendingplanning process. Projects are categorized in terms of total expenditure, andall projects involving amounts exceeding Rand 50.0 million($7.7 million) are submitted to the full Board for approval.

 

The South African operationshave implemented an integrated electronic reserve and resource informationsystem, called IRRIS, to enhance LoM planning capabilities. This systemprovides a common planning platform to facilitate quicker, more flexible and moreaccurate short- and long-term planning and more timely identification ofproduction shortfalls. Short term planning on the operations is conductedmonthly and aligned with the operational plan. Financial and economicparameters for the LoM and operational plan are issued to the operations fromthe head office and relevant survey and evaluation factors are determined inaccordance with Gold Fields’ guidelines. Significant changes in the LoM plansmay 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.

 

**Processing**

 

Gold Fields currently has 14gold plants (seven in South Africa, four in Ghana and three in Australia) whichtreat ore to extract gold. A typical gold processing plant circuit includes twophases: 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’ millingcircuits utilize SAG milling where the ore itself and steel balls are used asthe primary grinding medium. Through the comminution process, ore is ground toa minimum size before proceeding to the treatment phase.

 

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***Treatment***

 

In all of Gold Fields’metallurgical plants, gold is extracted into a leach solution by leaching withcyanide in agitated tanks. Gold is then extracted onto activated carbon fromthe solution using either the CIL or CIP process. The activated carbon is theneluted with gold recovered by electrowinning.

 

Gold Fields has three heapleach operations. In the heap leach process, crushed ore is stacked onimpervious leach pads and a cyanide leaching solution is sprayed on the pile.The solution percolates through the heap and dissolves liberated gold. A systemof underdrains removes the gold-containing solution, which is then passedthrough columns containing activated carbon using the AD&R process. Theloaded carbon is then eluted and the gold recovered by electrowinning.

 

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 is currentlyundertaking a number of initiatives intended to increase efficiency and reduceproduction costs at its mines. These initiatives form part of the strategicobjective of operational excellence and include:

 

•                                          **Project 500:** This initiative, which was introduced following a strategic decision toreposition the South African operations for a “stronger for longer” randenvironment in September 2003, comprises two sub-projects, namely

 

•                  **Project 400**, which was designed to add a further R400 million of revenue throughimproving the quality and quantity of Gold Field’s output, through increasingvolumes mined above the paylimit, and ensuring that dilution is minimized.Dilution can be minimized through programs aimed at reducing the quantities ofwaste mined both underground and in the open pits. Quality can be improvedthrough ongoing grade control and optimizing mine call factors

 

•                  **Project 100**, which is a stores-based consumption project, focused on achieving R100million in cost savings through improved standards and norms.

 

These strategiesand associated projects are being successfully implemented, with benefitsalready being accrued.

 

•                                          **Project 100+:**This initiative is focused on adding ongoing sustainable savings at theSouth African operations. It involves reducing costs through improving controlsover the consumption of materials used on the mines, and investing in costreduction through replacement of older equipment with modern and more efficientalternatives. Other initiatives include improved efficiencies and controls inareas such as people management, planned maintenance, transport and medicalfacilities.

 

•                                          **Project Beyond:** This is a procurement initiative entailing improved supply chainmanagement and was launched in May 2004. The Project has already deliveredsayings against historical contract prices, and further benefits are expectedas it is rolled out to the International Operations.

 

•                                          **Mine Design and Optimization:**Improved mine design and configuration focuses on removing constraints,improving ventilation and lowering temperatures. Other areas of optimizationinclude metallurgical plant modernizations, decreasing the frequency of lostblasts and obtaining further benefits from new information technology systemslike SAP and IRRIS.

 

•                                          **Flexibility:** Together with suitable mine design and layouts, an initiative to increasedevelopment rates at the South African operations is aimed at providing thecornerstone of greater ore reserve and mining flexibility.

 

•                                          **Training:** Initiatives to improve the ability of employees to perform their workinclude both practicable and theoretical aspects:

 

•                  **Practical:**Practical training initiatives include trading programs that are focusedon improving skills for mining supervisors and rock drill operators andimproving night shift cleaning.

 

•                  **Theoretical:** Theoretical training initiatives include implementation of e-learning toassist in the theoretical aspects of training.

 

Each operation has a programin place to motivate employees towards the goal of operational excellence andto create a sense of belonging, which is reinforced by a recognition and rewardprogram, and the Proudly Gold Fields campaign, which encourages support forGold Fields and its strategies. Leadership and capacity to change initiatives existat all the operations. Gold Fields has a separate recognition and rewardprogram for employees which aims at motivation and ability that forms anintegral part of the retention process.

 

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**Refiningand Marketing**

 

Gold Fields has appointedRand Refinery Limited, or Rand Refinery, to refine all of Gold Fields’ SouthAfrican produced gold. Rand Refinery is a private company in which Gold Fieldsholds a 33.1% interest, with the remaining interests held by other SouthAfrican gold producers.

 

On June 1, 2004 GoldFields exercised its right under its agreement with Rand Refinery to sell allof Gold Fields’ gold production from its South African operations, with effectfrom October 1, 2004. Prior to that time, Rand Refinery was the exclusiveagent to sell Gold Fields’ South African produced gold, and Gold Fields’treasury was appointed by Rand Refinery to act as its agent with respect to thesale of 50% of such gold to international customers. Under the new arrangement,Rand Refinery advises Gold Fields from time to time on the amount of goldavailable for sale. Gold Fields sells the gold at the London afternoon fixingprice for the day if it is so advised. Within two business days after receiptof this advice Gold Fields deposits an amount in U.S. dollars equal to thevalue of the gold sold into Rand Refinery’s nominated U.S. dollar account. Onthe date of the deposit, Rand Refinery, in turn, deducts any refining andadministrative charges payable by Gold Fields relating to such amount of gold,and deposits the balance of the money into the nominated U.S. dollar account ofGold Fields. Gold Fields pays Rand Refinery an amount for administrativeservices associated with delivery of the refined gold of $0.05 per troy ounceof gold and a refining fee of $32 per troy ounce of gold received by RandRefinery.

 

All gold produced by GoldFields at the Tarkwa and Damang mines is refined by Rand Refinery pursuant to twonon-exclusive agreements entered into in October 2004 between RandRefinery and Gold Fields Ghana, and between Rand Refinery and Abosso. Underthese agreements, Rand Refinery collects, refines and sells gold as instructedby Gold Fields Ghana and Abosso. Rand Refinery assumes responsibility for thegold upon collection at either the Tarkwa or Damang mine. The gold is thentransported to the Rand Refinery premises in Johannesburg, South Africa, whereit is refined. Gold Fields Ghana and Abosso reimburse Rand Refinery fortransportation costs. Under these agreements, Rand Refinery sells the refinedgold on behalf of Gold Fields Ghana and Abosso at the London afternoon fixingprice for gold on the date of delivery. Rand Refinery receives refining fees of$0.33 per ounce of gold received, and a realization fee equal to $0.16 perounce of gold refined. These agreements continue until either party terminatesit upon 90 days’ written notice.

 

In Australia, all goldproduced by St. Ives and Agnew is refined by AGR Joint Venture, which is tradenamed Australian Gold Refineries, or AGR Matthey. The AGR Joint Venture is apartnership between Australian Gold Pty Ltd and WA Mint, which is trade namedPerth Mint. Under an agreement which became effective on September 1, 2002and was amended on September 1, 2005 among St. Ives Gold Mining CompanyPty Ltd, Agnew Gold Mining Company Pty Ltd and AGR Matthey, AGR Matthey refinesthe gold produced by St. Ives and Agnew for a refining fee of A$0.36 per ounceof gold plus a transportation fee. The transportation fee is calculated asA$0.096 per ounce plus fixed

fees per shipment. Therefining fee is scheduled to increase by two cents per ounce in January 2006.AGR Matthey retains 0.1% of the gold and 1.0% of any silver it refines to coverlosses in the refining process. AGR Matthey collects the gold from St. Ives andAgnew, refines it and credits the gold to the relevant metals account held bySt. Ives and Agnew with AGR Matthey. St. Ives and Agnew then inform the GoldFields corporate office in Johannesburg of the amount available for sale inPerth, Australia. After confirming the relevant amount with AGR Matthey, GoldFields either sells the gold directly to AGR Matthey at the London afternoonfixing price less $0.10 per ounce or it swaps the gold into London at a fee of$0.27 per ounce, which means that AGR Matthey provides gold in London for saleby Gold Fields in an amount equal to the gold from St. Ives and Agnew locatedin Perth. In the case of a location swap, AGR Matthey is instructed to creditSt. Ives’ or Agnew’s metal account held with Deutsche Bank, London. Once thegold is sold to a third party, Deutsche Bank, London is instructed by GoldFields to deliver the gold to the relevant counterparty bank. This agreementcontinues indefinitely until terminated by either party upon 90 days writtennotice.

 

Gold Fields supports andparticipates in the gold marketing activities of the World Gold Council, orWGC, and contributes $1.75 per ounce of gold it produces in South Africa andAustralia and $1.75 per ounce of its attributable production from Tarkwa to theWGC in support of its activities.

 

**Services**

 

Mining activities requireextensive services, located both on the surface and underground at the mines.Services include:

 

•   mining-related services such as engineering,rock mechanics, ventilation and refrigeration, materials handling, operationalperformance evaluation and capital planning;

•   safety and training;

•   housing and health-related services,including hostel and hospital operations;

•   geological services, including mine planningand design;

•   reserves management including sampling andestimation;

•   metallurgy;

•   equipment maintenance; and

•   assay services.

 

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’Mining Operations**

 

Gold Fields conductsunderground mining operations at each site except Tarkwa and Damang andconducts some processing of surface rock dump material at Driefontein, Kloofand Beatrix. Tarkwa and Damang are open pit mines and also process materialfrom production stockpiles. St. Ives and Agnew together include underground andopen pit operations and also process material from production stockpiles.

 

**TotalOperations**

 

The following chart detailsthe operating and production results for fiscal 2003, 2004 and 2005 for alloperations owned by Gold Fields as of June 30, 2005, plus the operatingand production results of the St. Helena mine through the first four months offiscal 2003 prior to the sale of the mine to Freegold.

 
| ** **                           | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------|------------|------------------------------|------------|
| **Production**                       | ** ** | **2003**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| Tonnes (‘000)                   |       | 42,988                       |       | 46,028 |   | 47,880 |   |
| Recovered grade (g/t)                |       | 3.3                          |       | 3.0 |   | 2.9 |   |
| Gold produced (‘000 oz)(1)      |       | 4,577                        |       | 4,406 |   | 4,488 |   |
| **Results of operations ($million)** |       |                         |       |   |   |   |   |
| Revenues                             |       | 1,538.2                      |       | 1,706.2 |   | 1,893.1 |   |
| Total production costs(2)            |       | 1,168.3                      |       | 1,538.3 |   | 1,764.0 |   |
| Total cash costs(3)                  |       | 974.9                        |       | 1,332.5 |   | 1,483.3 |   |
| Cash profit(4)                       |       | 563.3                        |       | 373.7 |   | 409.8 |   |
| **Cost per ounce of gold ($)**       |       |                         |       |   |   |   |   |
| Total production costs               |       | 254                          |       | 349 |   | 393 |   |
| Total cash costs                     |       | 212                          |       | 302 |   | 331 |   |

 

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Notes:

(1)             In fiscal 2003, 4.334 million ounceswere attributable to Gold Fields, in fiscal 2004, 4.158 million ounceswere attributable to Gold Fields and in fiscal 2005, 4.221 million ounces wereattributable to Gold Fields with the remainder attributable to minorityshareholders in the Ghana operation.

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

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

(4)             Cash profit represents revenues less totalcash costs.

 

**UndergroundOperations**

 

The following chart detailsthe operating and production results for fiscal 2003, 2004 and 2005 for alloperations owned by Gold Fields as of June 30, 2005, plus the operatingand production results of the St. Helena mine through the first four months offiscal 2003 prior to the sale of the mine to Freegold. The undergroundoperations include all of the mines in the South African operations and theunderground portions of the mines in the Australian operation.

 
| ** **                           | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------|------------|------------------------------|------------|
| **Production**                       | ** ** | **2003**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| Tonnes (‘000)                   |       | 11,895                       |       | 13,231 |   | 13,807 |   |
| Recovered grade (g/t)                |       | 7.5                          |       | 7.0 |   | 7.1 |   |
| Gold produced (‘000 oz)         |       | 2,855                        |       | 2,982 |   | 3,172 |   |
| **Results of operations ($million)** |       |                         |       |   |   |   |   |
| Revenues                             |       | 958.5                        |       | 1,153.4 |   | 1,336.4 |   |
| Total production costs(1)            |       | 729.9                        |       | 1,139.6 |   | 1,340.3 |   |
| Total cash costs(2)                  |       | 636.8                        |       | 996.6 |   | 1,133.8 |   |
| Cash profit(3)                       |       | 321.7                        |       | 156.8 |   | 202.6 |   |
| **Cost per ounce of gold ($)**       |       |                         |       |   |   |   |   |
| Total production costs               |       | 252                          |       | 382 |   | 423 |   |
| Total cash costs                     |       | 221                          |       | 334 |   | 357 |   |

 

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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.”

 

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(3)            Cash profit represents revenues less totalcash costs.

 

Tonnes milled from theunderground operations increased from 13.2 million tonnes in fiscal 2004 to13.8 million tonnes in fiscal 2005. At the South African operations thedecrease at Beatrix, due to the planned reduction of lower grade mining, wasalmost offset by marginal increases at both Driefontein and Kloof. However, themajority of the increase came from St. Ives due to the commissioning of the newmill in December 2004 and running the new and old mills in parallel untilthe end of March 2005. The amount of gold produced from undergroundoperations increased from 2.982 million ounces in fiscal 2004 to 3.172 millionounces in fiscal 2005. The primary reason for this increase was the higherunderground grades achieved at the South African operations in line with thestrategy to reduce lower grade mining, together with increased production atSt. Ives due to the commissioning of the new mill.

 

**SurfaceOperations**

 

The following chart detailsthe operating and production results for the fiscal year for all surfaceoperations owned by Gold Fields as of June 30, 2005. All operations at St.Ives and Agnew were considered surface operations prior to June 30, 2003for purposes of reporting production data. Starting in fiscal 2004, productiondata for the Australian operations has been split between underground andsurface operations. Surface operationsinclude all of the mines in the Ghana operation, the open pit portions of themines in the Australian operation and the surface rock dump material at themines in the South African operation.

 
| ** **                           | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------|------------|------------------------------|------------|
| **Production**                       | ** ** | **2003**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| Tonnes (‘000)                   |       | 31,093                       |       | 32,797 |   | 34,073 |   |
| Recovered grade (g/t)                |       | 1.7                          |       | 1.4 |   | 1.2 |   |
| Gold produced (‘000 oz) (1)     |       | 1,722                        |       | 1,424 |   | 1,316 |   |
| **Results of operations ($million)** |       |                         |       |   |   |   |   |
| Revenues                             |       | 579.7                        |       | 552.8 |   | 556.7 |   |
| Total production costs (2)           |       | 438.4                        |       | 398.7 |   | 424.7 |   |
| Total cash costs (3)                 |       | 338.1                        |       | 335.9 |   | 349.5 |   |
| Cash profit (4)                      |       | 241.6                        |       | 216.9 |   | 207.2 |   |
| **Cost per ounce of gold ($)**       |       |                         |       |   |   |   |   |
| Total production costs               |       | 255                          |       | 280 |   | 323 |   |
| Total cash costs                     |       | 196                          |       | 236 |   | 256 |   |

 

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Notes:

(1)             In fiscal 2003, 1.480 million ounces ofproduction were attributable to Gold Fields, in fiscal 2004, 1.176 millionounces of production were attributable to Gold Fields and in fiscal 2005, 1.049million ounces of production were attributable to Gold Fields, with theremainder attributable to minority shareholders in the Ghana operations.

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

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

(4)             Cash profit represents revenues less totalcash costs.

 

Tonnes milled from thesurface operations increased from 32.8 million tonnes in fiscal 2004 to 34.1million tonnes in fiscal 2005 primarily because of increased production fromthe Ghana operations and Agnew.

 

**DriefonteinOperation**

 

***Introduction***

 

The Driefontein gold mine islocated in the Gauteng Province of South Africa in the Far West Rand miningdistrict, some 70 kilometers southwest of Johannesburg. Driefontein operatesunder a mining authorization with a total area of 8,561 hectares. It is anunderground mine with nominal surface reserves represented by rock dumps thathave been accumulated through the operating history of the mine. Driefonteinhas seven operating shaft systems and three metallurgical plants and operatesat depths between 800 meters and 3,400 meters. In the year ended June 30,2005, it produced 1.2 million ounces of gold. Driefontein hadapproximately 17,200 employees, including a limited number employed by outsidecontractors as of June 30, 2005.

 

***History***

 

Driefontein was formed fromthe consolidation in 1981 of the East Driefontein and West Driefontein mines.Gold mining began at Driefontein in 1952.

 

***Geology***

 

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Gold mineralization at Driefonteinis contained within three reef horizons. The Carbon Leader Reef, or CarbonLeader, and the Ventersdorp Contact Reef, or VCR, occur at depths between 500meters and 3,400 meters. The Middelvlei Reef is the third reef and is a minorcontributor to reserves and production.

 

The stratigraphically lowerCarbon Leader is a generally high-grade reef comprising different facies typesand dips 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 average gold grades vary withlithofacies changes in the reef, with sub-economic grades developed on theeastern boundary and a higher grade north-trending zone developed to the west.

 

***Mining***

 

The Driefontein operation isengaged in both underground and surface mining, and is thus subject to all ofthe underground and surface mining risks discussed in the Risk Factors section.Due to the operating depths and extensive mined out areas, seismicity and thedamage caused by seismicity are serious safety and productivity issues atDriefontein. To address this, among other things, Gold Fields seeks to use closelyspaced dip pillar mining techniques in its deep level operations, as well asusing plant tailings as backfill support to stabilize the working areas.Regarding the safety record at the Driefontein operation during fiscal 2005,  the serious injury frequency rate was in linewith the South African industry average for the same period, while the fatalinjury frequency rate was better for the same period.

 

The primary challengesfacing the Driefontein underground operation include seismicity, flammable gas,water intrusion and rock temperatures. As noted above, Gold Fields is seekingto reduce seismicity problems at Driefontein through using a combination ofclosely spaced dip pillar mining techniques and backfill methods. Waterintrusion is dealt with through drilling and cementation sealing techniques andan extensive water pumping network. Also, because rock temperatures tend toincrease with depth, Driefontein requires extensive cooling infrastructure tomaintain comfortable conditions for workers. Driefontein experiencedunderground fires in fiscal 2003, 2004 and 2005. Although the fires weredisruptive because areas affected had to be closed while damage was assessedand remedied, they did not have a significant effect on production levels atDriefontein.

 

During the 2005 fiscal year,Driefontein suffered several seismic events, one of which resulted in 5 workerslosing their lives and infrastructure damage at Shaft No. 2. A largeseismic event in May 2005 at Shaft No. 4 delayed production for sixweeks while infrastructure damage in the affected work areas was assessed andrepaired. Although work at one pillar in the shaft ceased as a result of theevent, the majority of the shaft remained open without disruption. Additionalseismic events during the year caused minor infrastructure damage at Shaft Nos.1, 4 and 5 which required remedial work in and around the areas affected. Therewas no damage at Shaft Nos. 1, 4 and 5 to the hoisting infrastructure.Driefontein also experienced several seismic events in fiscal 2004 whichresulted in a total of 5 workers losing their lives. To date in fiscal 2006,there have been 8 fatalities at Driefontein due to seismicity, falls of groundand two hauling accidents. Although the areas affected by the seismicity infiscal 2005 and 2004 and to date in fiscal 2006 were temporarily closed,Driefontein did not experience material work stoppages in connection withthe events.

With respect to undergroundoperations, in the western, older portions of Driefontein the focus is on remnantpillar mining. In the eastern, newer portions of the mine the focus is also onmining through scattered mining or longwall methods. Newer shafts in theeastern portion, particularly those at the deepest levels of the mine, employthe closely spaced dip pillar mining method. This method provides additionalmining flexibility. The scattered mining method is not practiced at depth.

 

Gold Fields has accelerateddevelopment at Shaft Nos. 1 and 5 to increase mineable ore reserves andassociated production build up. In addition to these shafts, Shaft No. 4continues to be a primary center of production and new development to open upreserves in the shaft pillar area. Gold Fields has a depth expansion project atShaft No. 5 to access the Carbon Leader at lower depths and has initiatedan underground drilling program to confirm grades and ore body structure. Theother shafts at the operation are mature, with production focused on remnantpillar extraction and accessing and mining the secondary reef horizons. ShaftNos. 2 and 8 are being used to provide hoisting and services support to theactive shafts. Although mining at Shaft No. 10 ceased in fiscal 2004, theshaft is still used as a pumping shaft and Gold Fields continues to monitormarket conditions to assess the economic viability of recommencing mining atthis shaft.Gold Fieldshas completed a feasibility study for the drop down project at Driefontein toaccess below infrastructure reserves at that mine. A further undergrounddrilling program has been initiated to confirm localized gold grades andstructure and is scheduled for completion during fiscal 2006.

 

The Driefontein operationcontinues to focus on identifying previously worked areas which can offeropportunities for further production under current economic conditions.

 

Driefontein’s surfaceoperations are confined exclusively to the processing of rock dump material.

 

The Driefontein operationhas access to the national electricity grid and water, road and railinfrastructure and is located near regional urban centers where it canroutinely obtain needed supplies. Driefontein also has a water treatment plantto supply water to the Driefontein operation.

 

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

 

33

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| ** **                           | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------|------------|------------------------------|------------|
| **Production**                       | ** ** | **2003**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| Tonnes (‘000)                   |       | 6,370                        |       | 6,438 |   | 6,694 |   |
| Recovered grade (g/t)                |       | 6.0                          |       | 5.5 |   | 5.4 |   |
| Gold produced (‘000 oz)         |       | 1,238                        |       | 1,141 |   | 1,163 |   |
| **Results of operations ($million)** |       |                         |       |   |   |   |   |
| Revenues                             |       | 420.2                        |       | 440.4 |   | 489.7 |   |
| Total production costs(1)            |       | 293.7                        |       | 405.6 |   | 442.3 |   |
| Total cash costs(2)                  |       | 254.7                        |       | 354.5 |   | 383.6 |   |
| Cash profit(3)                       |       | 165.5                        |       | 85.9 |   | 106.1 |   |
| **Cost per ounce of gold ($)**       |       |                         |       |   |   |   |   |
| Total production costs               |       | 233                          |       | 355 |   | 380 |   |
| Total cash costs                     |       | 202                          |       | 311 |   | 330 |   |

 

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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.

 

The increase in tonnage fromfiscal 2004 to fiscal 2005 was primarily due to higher surface waste dump rockprocessing, albeit at a slightly lower grade, together with a marginal increasein underground tonnage. The increase in ounces of gold produced occurredprincipally as a result of the increase in underground yields in line with thestrategy to reduce lower grade mining. Gold Fields experienced an increase intotal cash costs per ounce of gold from fiscal 2004 to fiscal 2005 atDriefontein as a result of the average appreciation of the Rand against the U.S.dollar which more than offset a decrease in total cash costs in Rand terms.

 

The increase in tonnage fromfiscal 2003 to fiscal 2004 was primarily due to higher surface waste dump rockand plant clean up processing, offset partially by a decrease in undergroundtonnage as a result of reduced mining in lower grade areas. The strength of theRand resulted in a deliberate move to mining higher grade areas and thecurtailment of mining in areas deemed not to be economically viable. Inaddition, Shaft Nos. 4 and 5 did not deliver in line with plan, primarilybecause of increased geological faulting and production bottlenecks. The fallin ounces of gold produced occurred principally as a result of the lowertonnage processed and a reduction in underground yields. Driefonteinexperienced an increase in total cash costs per ounce of gold from fiscal 2003to fiscal 2004, principally as a result of the appreciation of the Rand againstthe U.S. dollar as well as higher Rand cash costs. Total cash costs in Randterms increased due primarily to a decrease in gold production from output inShaft Nos. 4 and 5, above inflation wage increases and increases in other costsgenerally in line with inflation.

 

Output quality of theDriefontein orebody improved over the course of fiscal 2005 as a result of theongoing strategy to switch to mining higher grades.****ShaftNo. 6 had less than planned output due to the closure of marginal gradeareas. Mining at Shaft No. 10 was halted during fiscal 2004 and less thanplanned output was achieved at Shaft No. 5 due to seismic activity andventilation constraints. A new refrigeration plant and cooling infrastructurewas commissioned at Shaft No. 5 in fiscal 2005 to improve undergroundtemperatures.

 

The total shaft hoistingcapacity of Driefontein is detailed below.

 

| **Shaft System** | ** ** | **Hoisting capacity  (tonnes/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                               |       |

 

Assumingthat Gold Fields does not increase or decrease reserve estimates at Driefonteinand that there are no changes to the current mine plan at Driefontein,Driefontein’s June 30, 2005 proven and probable reserves of 23.4 millionounces of gold will be sufficient to maintain production through approximatelyfiscal 2033. However, as discussed earlier in the Risk Factors and theDescription of Mining Business – Mine Planning and Management sections, thereare a numerous factors which can affect reserve estimates and the mine planwhich thus could materially change the life of mine.

 

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***Processing***

 

The following table setsforth year commissioned, processing techniques and processing capacity permonth, as well as average tonnes milled per month and metallurgical recoveryfactor during the fiscal year ended June 30, 2005, for each of the plantsat Driefontein:

 
| **Processing Techniques** | ** ** |
|---------------------------|------------|
| **Plant**                 | ** ** | **Year  Commissioned(1)** | ** ** | **Comminution Phase** | ** ** | **Treatment phase** | ** ** | **Capacity(2)  (tonnes/month)** | ** ** | **Average milled for   the year ended********June 30, 2005********(tonnes/month)** | ** ** | **Approximate********recovery factor for********the year ended********June 30, 2005****(3)** | ** ** |
|                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| No. 1 Plant          |       | 1972 |   |  SAG  milling |   | CIP treatment and electrowinning |   |  240,000 |   | 220,191 |   |  97 | % |
|                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| No. 2 Plant          |       | 1964 |   | SAG/ball milling |   |  CIP  treatment | (4) |  240,000 | (5) | 218,711 |   |  95 | % |
|                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| No. 3 Plant          |       | 1998 |   |  SAG  milling |   |  CIP  treatment | (4) |  115,000 |   | 119,574 |   |  91 | % |

 

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Notes:

(1)            No. 1 Plant was substantially upgradedin fiscal 2004, 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 nameplatecapacities are based on a number of operating assumptions, includingassumptions regarding the blend of soft and hard ores processed, that canchange and which may result in an increased level of throughput over and abovethe designed nameplate capacity.

(3)            Percentages are rounded to the nearest wholepercent.

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

(5)            Capacity was increased from 200,000 tonnesper month to 240,000 tonnes per month during fiscal 2003.

 

PlantNo. 1 was upgraded in fiscal 2004 with the installation of a newcomminution circuit and the installation of a CIP treatment facility. GoldFields is currently working on an optimization program at this plant to improvethroughput. Plant No. 2 was converted to a SAG/ball milling circuit infiscal 2003.

 

In fiscal 2005, theDriefontein plants collectively extracted approximately 96.5% of the goldcontained in ore delivered for processing.

 

***Capital Expenditure***

 

Gold Fields spentapproximately Rand 184 million on capital expenditure at the Driefonteinoperation in fiscal 2005, primarily on commissioning the shaft bottom pumpstation at Shaft No. 1 tertiary level and the underground cooling plant atShaft No. 5. Gold Fields has budgeted approximately Rand 280 millionof capital expenditure at Driefontein for fiscal 2006, principally for thecompletion of Shaft No. 1 tertiary level pumping infrastructure, thecompletion of the refrigeration remote cooling units at the boundary of Shaft No. 5and the shaft pillar extraction at Shaft No. 4.

 

**KloofOperation**

 

***Introduction***

 

The Kloof operation islocated in the Gauteng Province of South Africa, near Westonaria, and comprisesthe former Kloof, Libanon and Leeudoorn mines. Kloof operates under a miningauthorization with a total area of 20,086 hectares. It is principally anunderground operation, with a limited amount of processing of surface rock dumpmaterial. Kloof has five operating shaft systems currently serviced by twometallurgical plants. A third metallurgical plant at Kloof, No. 3 Plant,was closed in March 2005. Like Driefontein, Kloof is a deep-level mine,with operating depths between 1,000 meters and 3,500 meters. In the fiscal yearended June 30, 2005, it produced 1.0 million ounces of gold. As of June 30,2005, Kloof had approximately 15,400 employees, including a limited numberemployed by outside contractors.

 

***History***

 

Kloof’s present scope ofoperations is the result of the consolidation in fiscal 2000 of three adjacentmines: Kloof, Libanon and Leeudoorn. Gold mining began in the area now coveredby these operations in 1934.

 

35

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***Geology***

 

The majority of productionat Kloof is from the VCR, which occurs at depths between approximately 1,000meters and 3,500 meters. The VCR has a general northeast strike and dips to thesoutheast at between 20 degrees and 45 degrees. The Middelvlei Reef contributesto production, while minor production volumes are planned from the Kloof andLibanon Reefs.

 

Kloof lies between the BankFault to the west, and the north trending West Rand Fault to the east, thelatter truncating the VCR along the eastern boundary of the mine. Normal faultsare developed sub-parallel to the westerly dipping West Rand Fault, withsympathetic north-northeast trending dykes that show little to no apparentoffset of the stratigraphy. Structures that offset the VCR increase infrequency towards the southern portion of the mine as the Bank Fault isapproached.

 

***Mining***

 

The Kloof operation isengaged in underground mining, and is thus subject to all of the undergroundrisks discussed in the Risk Factors section. Like Driefontein, Kloofexperiences seismicity due to the extreme depth of operations and alsoexperiences flammable gas. Newer development is based on the closely spaced dippillar mining method to reduce the impact of seismicity at Kloof. Earlydetection and increased ventilation of the shafts are being used to minimizethe risk of incidents caused by flammable gas. In fiscal 2005, the seriousinjury frequency rate and the fatal injury frequency rate at Kloof were betterthan the South African industry average for the same period.

 

The primary challengesfacing the Kloof operation are seismicity and flammable gas. As noted above,Gold Fields seeks to reduce the impact of seismicity at Kloof by using theclosely spaced dip pillar mining method. As noted above, early detection andincreased ventilation of the shafts are being used to minimize the risk ofincidents caused by flammable gas. Also, as with Driefontein, Kloof requiresextensive cooling infrastructure to maintain comfortable conditions for workersdue to the extreme depth of its operations. Fifteen workers lost their lives atKloof in fiscal 2005 due to a variety of causes such as falls of ground andequipment caused by seismicity, mudfalls and a flammable gas explosion. Therehave been 6 fatalities to date in fiscal 2006, due to falls of ground, oneunderground fire and one mud rush.

 

The current preferred miningmethod at Kloof is closely spaced dip pillar mining, with limited applicationof longwalling and remnant pillar mining in the mature areas. Shaft Nos. 1, 3,4 and 7 provide the main centers of current production at Kloof. Miningactivity at Shaft No. 4, which began production in early 2000, is still inthe build up phase and is expected to reach planned sustainable productionlevels during fiscal 2007. Production at Shaft No. 4 was belowexpectations in fiscal 2005 due to haulage and ventilation constraints ,although production levels did increase slightly at this shaft by fiscal yearend. A development program with an associated exploration program to drill andto endeavor to establish additional proven reserves and improved grades in theShaft No. 3D area was implemented in fiscal 2002 and development hascommenced into certain areas of the VCR. Treatment of surface stockpilematerial was halted at No. 3 Plant at the end of March 2005 and theplant was closed. Development of marginal areas of Shaft Nos. 1 and 8 wasreduced in fiscal 2005 as these areas were not economical to continuedevelopment. In addition to its own production, Shaft No. 1 providesadditional hoisting capacity for Shaft Nos. 3 and 4. As a response to thestrength of the Rand against the U.S. dollar, Gold Fields decided to shift itsfocus at its South African operations to mining in higher grade areas. As aresult, Kloof reduced its production from the Middelvlei Reef and stoppedproduction at Shaft No. 9 in the second quarter of fiscal 2004. GoldFields expects Shaft Nos. 3, 4 and 7 to be the primary sources of futureproduction at Kloof.

 

Surface and underground bulkair cooling facilities at Shaft No. 4 were commissioned during the secondhalf of fiscal 2005. The Kloof Extension Area, or the KEA, drilling program wascompleted in fiscal 2005 and resulted in revised geological and evaluationmodels which have been used to create a new mine design and schedule, bringingthe project to a pre-feasibility level. The feasibility study on this projectis planned to be completed in the third quarter of fiscal 2006. Revisions weremade in fiscal 2005 to the Eastern Boundary Area, or EBA, geological andevaluation models after completion of the surface drilling program, surveys andanalysis. The shaft access and mine plans will need to be revised and potentialcosts reassessed to determine the economic feasibility of the EBA and a portionof the KEA. Ounces from the EBA and KEA were removed from the reserve statementfor fiscal 2005 pending the outcome of a re-planning and re-engineeringexercise.

 

In line with the Gold Fieldsproductivity initiatives, Kloof continues to focus on optimizing minedesign and configuration, while ensuring that the high-productivitydrivers of workforce motivation and competence are addressed throughtraining and incentive schemes.

 

Shaft No. 3 has to be selectively mined due tothe higher proportion of low-grade VCR slope facies, compared tohigher-grade terrace areas. As a result, the overall miningextraction of this area will be more constrained, with geological investigationsongoing.

 

The Kloof operation hasaccess to the national electricity grid and water, road and rail infrastructureand is located near regional urban centers where it can routinely obtain neededsupplies.

 

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

 
| ** **                           | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------|------------|------------------------------|------------|
| **Production**                       | ** ** | **2003**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| Tonnes (‘000)                   |       | 4,838                        |       | 4,983 |   | 4,655 |   |
| Recovered grade (g/t)                |       | 7.3                          |       | 6.5 |   | 6.9 |   |
| Gold produced (‘000 oz)         |       | 1,140                        |       | 1,038 |   | 1,037 |   |
| **Results of operations ($million)** |       |                         |       |   |   |   |   |
| Revenues                             |       | 380.1                        |       | 400.9 |   | 436.4 |   |
| Total production costs(1)            |       | 281.4                        |       | 403.0 |   | 464.6 |   |
| Total cash costs(2)                  |       | 245.9                        |       | 353.8 |   | 393.2 |   |
| Cash profit(3)                       |       | 134.2                        |       | 47.2 |   | 43.2 |   |
| **Cost per ounce of gold ($)**       |       |                         |       |   |   |   |   |
| Total production costs               |       | 246                          |       | 388 |   | 448 |   |
| Total cash costs                     |       | 215                          |       | 341 |   | 379 |   |

 

36

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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. 

 

In line with its continuingstrategy to reduce lower grade mining in light of the strength of the Randagainst the U.S. dollar, Kloof processed 23% less surface rock dump material infiscal 2005 than in fiscal 2004 but processed a similar amount of additionalunderground tonnage. Recovered grade improved by 6% as the mine switched tomining higher grades. Gold produced wasunchanged between the two fiscal years as the lower production from the surfaceoperation was replaced with an equivalent increase from the underground operationsdue to an increase in yields. Kloof experienced an increase in cashcosts per ounce from fiscal 2004 to fiscal 2005, principally as a result of theappreciation of the Rand against the U.S. dollar. The Rand cash costs increased marginally in fiscal 2005 compared tofiscal 2004 but this increase was below inflation levels.

 

From fiscal 2003 to fiscal2004, there was a significant increase in processing of surface rock dumpmaterial and a decrease in processing of underground tonnage. The decrease ingold produced was principally a result of the decrease in underground tonnage.Gold Fields experienced an increase in total cash costs per ounce of gold fromfiscal 2003 to fiscal 2004 at Kloof, principally as a result of theappreciation of the Rand against the U.S. dollar as well as higher Rand cashcosts. Gold production in fiscal 2004 was below that achieved in fiscal 2003,largely because of the closure of the low grade areas at Shaft No. 9 andless than planned output at Shaft No. 4, where  areas below the paylimit and miningconstraints affected production in the first half of fiscal 2004.

 

The total shaft hoistingcapacity of Kloof is detailed below.

 

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

 

----

Notes:

(1)            This shaft does not hoist material to thesurface. It has a capacity of 150,000 tonnes per month for sub-surfacehoisting.

(2)            This shaft hoists only waste rock to thesurface. It has a capacity of 110,000 tonnes per month for sub-surfacehoisting.

 

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 June 30, 2005 provenand probable reserves of 15.0 million ounces of gold will be sufficient tomaintain production through approximately fiscal 2020. However, as discussedearlier in the Risk Factors and the Description of Mining Business – MinePlanning and Management sections, there are a numerous factors which can affectreserve estimates and the mine plan which could thus materially change the lifeof mine.

 

***Processing***

 

The following table setsforth year commissioned, processing techniques and processing capacity permonth, as well as average tonnes milled per month and metallurgical recoveryfactor during the fiscal year ended June 30, 2005, for each of the plantsat Kloof:

 

37

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| **Processing Techniques** | ** ** |
|---------------------------|------------|
| **Plant**                 | ** ** | **Year commissioned** | ** ** | **Comminution Phase** | ** ** | **Treatment phase** | ** ** | **Capacity  (tonnes/  month)** | ** ** | **Average milled for   the year ended  June 30, 2005  (tonnes/month)** | ** ** | **Approximate  recovery factor for  the year ended  June 30, 2005(2)** | ** ** |
| No. 1 Plant          |       | 1968 |   | Traditional  crushing and milling |   | CIP  treatment | (3) | 180,000 |   | 177,725 |   | 97.6 | % |
|                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| No. 2 Plant          |       | 1990 |   | SAG milling |   | CIP  treatment and electrowinning |   | 140,000 |   | 125,533 |   | 97.1 | % |
|                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| No. 3 Plant(4)       |       | 1948 | (5) | Traditional  crushing and milling |   | CIP  treatment | (3) | 120,000 |   | 84,650 |   | 91.3 | % |

 

----

Notes:

(1)             Nameplate capacity. Plant/Mill nameplatecapacities are based on a number of operating assumptions, includingassumptions regarding the blend of soft and hard ores processed, that canchange and which may result in an increased level of throughput over and abovethe designed nameplate capacity.

(2)             Percentages are rounded to the nearest wholepercent.

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

(4)             No. 3 Plant was closed in March 2005.

(5)             No. 3 Plant was substantially upgradedin 1990.

 

In fiscal 2005, the Kloofplants collectively extracted approximately 97.3% of gold contained in oredelivered for processing. No. 3 Plant, which only processed surfacematerial, was closed in March 2005 as costs of processing waste rock surfacematerial exceeded the revenue brought in from that material. The plant is beingcleaned and Gold Fields has contracted with a contractor, Jet Demolition, todemolish the plant, recover any gold remaining in the plant and rehabilitatethe area around the plant by the end of fiscal 2006.

 

***Capital Expenditure***

 

Gold Fields spentapproximately Rand 230 million on capital expenditures at the Kloofoperation in fiscal 2005, primarily on ventilation, refrigeration and generalinfrastructure at Shaft No. 4. Gold Fields has budgeted approximately Rand230 million of capital expenditure at Kloof for fiscal 2006, principally forpillar development and shaft infrastructure projects at Shaft No. 1,dropdown development at Shaft No. 3, pumping infrastructure at Shaft No. 10,a pumping shaft which is not used to mine or haul,****anda general infrastructure upgrade at the subvertical shaft project at Shaft No. 4.Total capital expenditure for fiscal 2006 may be reduced should Rand goldprices fall.

 

**BeatrixOperation**

 

***Introduction***

 

The Beatrix operation islocated in the Free State Province of South Africa, near Welkom and Virginia,and comprises the Beatrix mine. The Beatrix operation was formerly known as theFree State operation.

 

The Beatrix mine is locatedin the southern Free State of South Africa some 240 kilometers southwest ofJohannesburg. Beatrix operates under a mining license with a total area of16,821 hectares. It is only an underground operation, with the exception of anominal amount of surface production from processing rock dump material.Beatrix has four shaft systems serviced by two metallurgical plants. It hasshallow to intermediate depth operations, at depths between 700 meters and2,200 meters. In the fiscal year ended June 30, 2005, Beatrix produced0.6 million ounces of gold. As of June 30, 2005, Beatrix hadapproximately 12,300 employees, including a limited number employed by outsidecontractors.

 

***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 exploitsthe Beatrix Reef, or BXR, at Shaft Nos. 1, 2 and 3, and the Kalkoenkrans Reef,or KKR, at Shaft No. 4 (the former Oryx mine). The reefs dip to the northand northeast at between 4 degrees and 9 degrees and are developed on theAandenk erosional surface.

 

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 bands withsharp erosive basal contacts. A general east-west paytrend some 800 to 1,000meters wide has been identified east of Shaft No. 4 and is known as Zone5. In addition, surface exploratory drilling and underground development hasexposed additional reserves to the south of the main channel of Zone 5 whichnow represent the majority of the reserves at the operation.

 

38

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***Mining***

 

The Beatrix mine is engagedin underground mining, and thus is subject to all of the underground miningrisks discussed in the Risk Factors section. The primary safety risks at Beatrixare falls of ground and flammable gas explosions. Beatrix uses a telemetricmonitoring system coupled with an extensive ventilation system to help monitorflammable gas. The safety record at the Beatrix operation during fiscal 2005,in terms of serious injury frequency rate and fatal injury frequency rate, wasbetter than the South African industry average for the same period. AlthoughBeatrix achieved three million fatality free shifts in fiscal 2005, there were4 fatalities at Beatrix during the fiscal year due to accidents during mining.No shaft closures for any length of time occurred in fiscal 2005 or to date infiscal 2006. In fiscal 2006 to date, there have been 3 fatalities due to fallsof ground and an accident during the hauling of ore from the shafts. In fiscal2004, there were five fatalities at Beatrix due to falls of ground (includingrock bursts) and a tramming accident.

 

Beatrix requires coolinginfrastructure to maintain comfortable conditions for workers at depth,although not to the degree necessary at Driefontein and Kloof. A refrigerationproject at Shaft No. 3 to provide additional cooling capacity, which wasoriginally scheduled to be completed in fiscal 2004, was postponed until fiscal2006.

 

In fiscal 2005, Gold Fieldsimplemented a restructuring project at Beatrix to improve operationalefficiencies and reduce costs. As a result, Beatrix is now managed as threeoperational sections: the North section (comprising Shaft No. 3 andthe lower levels of Shaft No. 1), the South section (comprising ShaftNo. 2 and the upper levels of Shaft No. 1) and the West section (comprisingShaft No. 4). At the North section in fiscal 2005, production buildupof Shaft No. 3 continued and development and stoping volumes were in linewith expectations. Stoping volumes in the South section were belowexpectations, and there has been a resulting focus on the elimination of lowergrade areas at this section to reposition the shafts and increaseproduction. In the West section, stoping and development, coupled withunderground exploration drilling programs, continued to define and support thehigher grade Zone 5 area. Between August 2004 and June 2005, adetailed logistical upgrade program was completed at the West section toimprove logistical structures for future mining in Zone 5, includingimprovements to haulage track and ventilation conditions. Lower grade andmarginal mining activities were curtailed at Beatrix and crews redeployed tohigher grade areas as they became available for mining in fiscal 2005.

 

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 of activitiesincluding drilling is primarily hydropower, as opposed to compressed air, witha majority of the mining equipment being run off a high pressure water system.The benefits of the system include improved cooling underground, improvedmachine efficiency, lower noise levels and less power wastage. The introductionduring the 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 Shaft Nos. 1, 2, and 3.

 

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 2005due 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. In fiscal 2005, Gold Fieldscompleted a number of internal projects to improve ventilation and rock removalsystems at Shaft No. 4. These projects have reduced underground temperaturesand have contributed to improved rock transport and removal. This has alsopositively contributed to an improved mine call factor at Shaft No. 4.Some delays due to tunnel instability problems due to swelling clays wereexperienced at Shaft No. 4 during the 2005 fiscal year but significantprogress towards redesign of access ways, alternative routes and rehabilitationof these tunnels has been made. Ongoing development and underground drillingand stoping operations are continuing to expose and confirm the opportunitiesof the Zone 5 area as a reserve base. Work is also being done on the Vlakpanproject area which involves an extension of Beatrix on lower levels with accessvia the infrastructure of Shaft No. 1. Under current plans, mining of thisarea would commence in fiscal 2009.

 

A new ventilation shaft atShaft No. 2 was completed in fiscal 2004 which has improved undergroundenvironmental conditions at Shaft No. 2.

 

The Beatrix mine has accessto the national electricity grid and water, road and rail infrastructure and islocated near regional urban centers where it can routinely obtain neededsupplies.

 

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

 
| ** **                           | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------|------------|------------------------------|------------|
| **Production**                       | ** ** | **2003**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| Tonnes (‘000)                   |       | 4,722                        |       | 5,448 |   | 4,181 |   |
| Recovered grade (g/t)                |       | 4.3                          |       | 3.6 |   | 4.6 |   |
| Gold produced (‘000 oz)         |       | 659                          |       | 625 |   | 624 |   |
| **Results of operations ($million)** |       |                         |       |   |   |   |   |
| Revenues                             |       | 217.6                        |       | 241.4 |   | 264.5 |   |
| Total production costs(1)            |       | 171.5                        |       | 245.5 |   | 282.4 |   |
| Total cash costs(2)                  |       | 151.1                        |       | 222.2 |   | 253.4 |   |
| Cash profit(3)                       |       | 66.5                         |       | 19.2 |   | 11.1 |   |
| **Cost per ounce of gold ($)**       |       |                         |       |   |   |   |   |
| Total production costs               |       | 260                          |       | 393 |   | 452 |   |
| Total cash costs                     |       | 229                          |       | 356 |   | 406 |   |

 

39

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----

Notes:

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

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

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

 

Although tonnage processed decreased significantlyfrom fiscal 2004 to fiscal 2005, ounces of gold produced was unchanged due tohigher average underground grades. The primary reason for the higher recoveredgrade was a decrease in low grade surface material which was being processed onsite and toll milled at Harmony’s Joel mine, adjacent to Beatrix. All surfacemilling ceased in January 2005 as it was not contributing to overallprofitability at current price levels. Underground grades were also marginallyhigher during 2005 due to an increase in underground mining volumes at thehigher grade North and West Sections and the mining of higher grade areasgenerally. The increase in total cash costs per ounce of gold from fiscal 2004to 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.

 

Although tonnage increasedfrom fiscal 2003 to fiscal 2004, ounces of gold produced decreased due to loweraverage grades as the tonnage increase came primarily from an increase in lowergrade surface material processed on site. Underground grades were alsomarginally lower during 2004. The increase in total cash costs per ounce ofgold from fiscal 2003 to fiscal 2004 at Beatrix was as a result of the lowerproduction and recovered grade and the appreciation of the Rand against theU.S. dollar.

 

The total shaft hoistingcapacities of Beatrix are detailed below.

 

| **Shaft System** | ** ** | **Hoisting capacity  (tonnes/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 at Beatrix, Beatrix’s June 30, 2005proven and probable reserves of 8.2 million ounces of gold will be sufficientto maintain production through approximately fiscal 2019. However, as discussedearlier in the Risk Factors and the Description of Mining Business – MinePlanning and Management sections, there are a numerous factors which can affectreserve estimates and the mine plan which could thus materially change the lifeof mine.

 

***Processing***

 

The following table setsforth year commissioned, processing techniques and processing capacity permonth, as well as average tonnes milled per month and metallurgical recoveryfactor during the fiscal year ended June 30, 2005, for each of the plantsat Beatrix:

 
| **Processing Techniques** | ** ** |
|---------------------------|------------|
| **Plant**                 | ** ** | **Year commissioned** | ** ** | **Comminution Phase** | ** ** | **Treatment phase** | ** ** | **Capacity(1)  (tonnes/month)** | ** ** | **Average milled for   the year ended  June 30, 2005  (tonnes/month)** | ** ** | **Approximate  recovery factor for  the year ended  June 30, 2005(2)** | ** ** |
| No. 1 Plant          |       | 1983 |   | SAG milling |   | CIP  treatment |   | 260,000 |   | 267,000 |   | 96 | % |
|                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| No. 2 Plant          |       | 1992 |   | SAG milling |   | CIP  treatment |   | 150,000 |   | 112,000 |   | 95.8 | % |

 

----

Notes:

(1)           Nameplate capacity. Plant/Mill nameplate capacities are based on anumber of operating assumptions, including assumptions regarding the blend ofsoft and hard ores processed, that can change and which may result in anincreased level of throughput over and above the designed nameplate capacity.

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

 

40

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In fiscal 2005, the Beatrixplants collectively extracted approximately 96% of gold contained in oredelivered for processing. Capacity at Plant No. 1 increased in fiscal 2005as a result of plant optimization and minor process adjustments. In August 2004,arrangements for the toll milling of low grade surface material at the Joelmine, which is adjacent to Beatrix, were terminated and, in January 2005,all surface material processing was stopped in an effort to focus moreresources on higher grade material. In fiscal 2004, Gold Fields installed aKnelson concentrator at the No. 1 Plant which removes gold earlier in themetallurgical process.

 

***Capital Expenditure***

 

Gold Fields spentapproximately Rand 295 million on capital expenditures at the Beatrixoperation in fiscal 2005, primarily on development and improvements to the newNorth section, previously called the Shaft No. 3 Complex. Capital spendingwas curtailed during the year due to low profitability****resultingmainly from the lower Rand gold price received because of the stronger Rand.Gold Fields expects to spend approximately Rand 233 million on capitalexpenditure at Beatrix in fiscal 2006 primarily on completion of the North section infrastructure,capital development, hydropower equipment and continued work on therefrigeration project at Shaft No. 3. Total capital expenditure for fiscal2006 may be reduced should Rand gold prices fall.

 

**GhanaOperation**

 

The Ghana operation iscomprised of the Tarkwa and Damang mines.

 

**Tarkwa Mine**

 

***Introduction***

 

Gold Fields Ghana, whichholds the interest in the Tarkwa mine, is owned 71.1% by Gold Fields, 18.9% byIAMGold and 10.0% by the government of Ghana, which acquired the interest as afree carried interest for no cost.

 

The Tarkwa mine is locatedin southwestern Ghana, about 300 kilometers by road west of Accra. The Tarkwamine consists of several open pit operations on the original Tarkwa propertyand the adjacent northern 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 2005. The Tarkwa mine operates undermining leases with a total area of approximately 20,700 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. In the fiscal year ended June 30,2005, Tarkwa produced 0.7 million ounces of gold, of which 0.5 millionounces were attributable to Gold Fields, with the remainder attributable tominority shareholders in Gold Fields Ghana. As of June 30, 2005, Tarkwahad approximately 3,300 employees, including a limited number 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 atTarkwa is hosted by Proterozoic Tarkwaian metasediments, which unconformablyoverlie a Birimian greenstone belt sequence. Gold mineralization isconcentrated in conglomerate reefs and has some similarities to deposits in theWitwatersrand Basin in South Africa. The deposit comprises a succession ofstacked, tabular palaeoplacer units consisting of quartz pebble conglomerates.Approximately 10 such separate economic units occur in the concession areawithin a sedimentary package ranging from 40 meters to 110 meters in thickness.Low grade to barren quartzite units are interlayered between the separate reefunits.

 

Five separate productionareas are centered on the Pepe Anticline, a gently north plunging foldstructure that outcrops as a whaleback hill. The sedimentary sequence andinterlayered waste zones between the areas of mineralization thicken to thewest.

 

***Mining***

 

The Tarkwa mine is engagedin both open pit and production stockpile surface mining and is thus subject toall of the surface mining risks discussed in the Risk Factors section. Althoughsurface mining generally is less dangerous than underground mining, serious andeven fatal accidents do still occasionally occur. While there is no reliableindustry benchmark for safety at Ghanaian surface mining operations, the losttime injury frequency rate at Tarkwa was approximately 0.8 per million manhours worked in fiscal 2005. There was one fatality in each of fiscal 2003,2004 and 2005. Tarkwa had one fatality in fiscal 2006 due to a conveyer beltaccident.

 

41

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Tarkwa uses the typical openpit mining methods of drilling, blasting, loading and hauling. The progressionof blasting in the open pit occurs in steps of six meters (or in some casesthree meters) with the ore loaded into 150 tonne dump trucks.

 

Tarkwa currently presents nounusual challenges beyond those faced at most open pits and heap leachingmining operations, including variations in amenability of ores to leaching.However, harder ores are expected at Tarkwa which could reduce throughput atthe North Plant Heap Leach facility and at the South Plant Heap Leach facility.The primary operational challenges include managing effective grade control,lowering operating costs, managing the blend of hard and soft material fed tothe SAG mill and managing gold-in-process on heap leach pads (that is, gold inthe processing circuit that is expected to be recovered during or afteroperations).

 

Gold Fields took over themining activities previously performed on a contract basis by African MiningServices (Ghana) Pty Ltd, or AMS, in the first quarter of fiscal 2005, havingpurchased its own mining fleet of equipment during the latter half of fiscal2004. The transition from contractor mining to owner mining has gone smoothly,with Gold Fields re-engaging the majority of the AMS operators and AMS beingtotally phased out during August 2004. Maintenance and repair contractshave been entered into with all the suppliers of the major equipment.

 

The Tarkwa mine has accessto the national electricity grid, water and road infrastructure. Most suppliesare trucked in from either the nearest seaport, which is approximately 140kilometers away by road in Takoradi, or from Tema near Accra, which isapproximately 300 kilometers away by road.

 

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

 
| ** **                           | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------|------------|------------------------------|------------|
| **Production**                       | ** ** | **2003**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| Tonnes (‘000)                   |       | 15,210                       |       | 16,000 |   | 19,633 |   |
| Recovered grade (g/t)                |       | 1.1                          |       | 1.1 |   | 1.1 |   |
| Gold produced (‘000 oz)(1)      |       | 540                          |       | 550 |   | 677 |   |
| **Results of operations ($million)** |       |                         |       |   |   |   |   |
| Revenues                             |       | 179.4                        |       | 213.2 |   | 287.5 |   |
| Total production costs(2)            |       | 121.5                        |       | 141.7 |   | 196.1 |   |
| Total cash costs(3)                  |       | 105.0                        |       | 126.4 |   | 156.9 |   |
| Cash profit(4)                       |       | 74.4                         |       | 86.8 |   | 130.6 |   |
| **Cost per ounce of gold ($)**       |       |                         |       |   |   |   |   |
| Total production costs               |       | 225                          |       | 258 |   | 290 |   |
| Total cash costs                     |       | 195                          |       | 230 |   | 234 |   |

 

----

Notes:

(1)            In fiscal 2003, 2004 and 2005, 0.384 millionounces of production, 0.391 million ounces of production and 0.481 millionounces of production, respectively, were attributable to Gold Fields, with theremainder attributable to minority shareholders in the Ghana operation.

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

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

(4)            Cash profit represents revenues less totalcash costs.

 

In fiscal 2005, tonnagetreated increased compared to the previous year as a result of thecommissioning of the new SAG mill and CIL plant and ongoing optimization in thecapacity of the heap leach plants. Ounces of gold produced increased by 127,000ounces in fiscal 2005 as a result of the increased tonnage processed and higherrecoveries at the CIL Plant. Cash cost per ounce of gold produced increased infiscal 2005 primarily due to significantly higher global commodity prices forcyanide, cement and steel, which resulted in increased heap leach processingcosts and an increase in the level of waste stripping to produce the increasedtonnage for processing. Production costs per ounce produced also increased,which largely reflects the additional depreciation and amortization charge forthe new mining fleet acquired in the switch to owner mining and the new CILPlant.

 

From fiscal 2003 to fiscal2004, tonnage treated rose due to continued improvements to both the North andSouth Plants. Ounces of gold produced increased less, proportionally, thantonnage due to decreasing recovery from the heap leach pads. At the same time,total cash and production costs have increased mainly due to increased wastetonnage.

 

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 June 30, 2005proven and probable reserves of 13.4 million ounces (9.5 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 the RiskFactors and the Description of Mining Business – Mine Planning and Managementsections, there are a numerous factors which can affect reserve estimates andthe mine plan which could thus materially change the life of mine.

 

42

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***Processing***

 

Tarkwa’s ore can beprocessed either using conventional heap leach techniques with acceptablerecoveries or SAG milling with a CIL Plant. The current operation incorporatestwo separate heap leach circuits, the North Plant and the South Plant, and anew SAG mill plant which was commissioned in 2004. The following table setsforth year commissioned, processing techniques and processing capacity permonth, as well as average tonnes milled per month and metallurgical recoveryfactors during the fiscal year ended June 30, 2005, for each of the plantsat Tarkwa:

 
| **Processing Techniques**       | ** ** |
|---------------------------------|------------|
| **Plant**                       | ** ** | **Year  commissioned** | ** ** | **Comminution Phase** | ** ** | **Treatment  phase** | ** ** | **Capacity(1)  (tonnes/month)** | ** ** | **Average milled for  the year ended  June 30, 2005 (tonnes/month)** | ** ** | **Approximate  recovery factor for  the year ended  June 30, 2005(2)** | ** ** |
|                            |       |   |   |   |   |   |   |   |   |   |   |   |   |
| CIL Plant                       |       | 2004 |   | SAG milling |   | CIL  treatment |   | 350,000 |   | 354,000 | (3) | 97 | % |
|                            |       |   |   |   |   |   |   |   |   |   |   |   |   |
| North Plant Heap Leach Facility |       | 1997 |   | Multiple  stage crushing and screening process and agglomeration |   | Heap leach(4) with  AD&R treatment |   | 810,000 |   | 828,000 |   | 81 | % |
|                            |       |   |   |   |   |   |   |   |   |   |   |   |   |
| South Plant Heap Leach Facility |       | 1992 |   | Multiple  stage crushing and screening process and agglomeration |   | Heap leach(4) with  AD&R treatment and electrowinning |   | 530,000 |   | 542,000 |   | 79 | % |

 

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 nearest wholepercent.

(3)            Based on throughput for October 2004(wet commissioning commenced in September 2004) to June 2005.

(4)            Heap leach recoveries are the result of anextended solution application process with full recovery requiring severalleach cycles. Full recovery of all recoverable gold for current ores is onlyachieved over several years. Thus, recoveries must be considered in terms ofrecovery as time progresses, or a “progressive” recovery. Over time, GoldFields expects both plants to achieve progressive recovery factors of around67% of contained gold, equivalent to full recovery of all recoverable goldduring the life of mine.

 

Anew SAG mill and CIL plant was commissioned in early fiscal 2005, two monthsahead of schedule, to add to the processing capabilities at Tarkwa. Duringfiscal 2004, the two crushing plants at Tarkwa remained in use while the heapleach pads were upgraded. The amount of tonnage treated at the heap leachfacilities rose slightly in fiscal 2005 as a result of continuing improvementsto both the North and South Plants, and the new CIL Plant processed 3.2 millionmetric tonnes since commissioning in October 2004.****Infiscal 2004, Gold Fields took steps to address the expected impact of harderores on the South Plant Heap Leach facility and moved crushing equipment fromthe old Teberebie plant to the South Plant to offset any reduction inthroughput due to harder ores and to provide increased screening capacity.Additional solution delivery and handling capabilities were added to the SouthPlant Heap Leach facility as well in fiscal 2004.

 

***Capital Expenditure***

 

GoldFields spent approximately $76 million on capital expenditures at theTarkwa operation in fiscal 2005, primarily on the completion of the SAG milland CIL plant and the conversion to owner mining. Gold Fields has budgetedapproximately $36 million for capital expenditure at Tarkwa for fiscal 2006,principally for heap leach pad extensions.

 

**Damang Mine**

 

***Introduction***

 

Abosso, which owns theinterest in the Damang mine, is owned 71.1% by Gold Fields, 18.9% by IAMGoldand 10% by the Ghanaian government, which acquired the interest as a freecarried interest for no cost, mirroring the shareholding structure of Gold FieldsGhana.

 

The Damang deposits arelocated in the Wassa West District in southwestern Ghana approximately 360kilometers by road west of Accra and approximately 30 kilometers by roadnortheast of the Tarkwa mine. It consists of an open pit operation with a SAGmill and CIL processing plant.

 

43

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Ore iscurrently mined from three satellite pits, Kwesie-Lima, Tomento and Amoanda,while Rex, a potential pit, is expected to be mined in the future. Mining atthe main Damang pit terminated in the middle of fiscal 2005, but pre-strippingon a cutback to the pit started in July 2005.

 

Kwesie-Lima, Tomento,Amoanda and Rex are located approximately 4.0 kilometers south, 5.5 kilometerssouth, 8.0 kilometers south and 15.0 kilometers south of the Main Plant,respectively. In addition, the Lima South project, which is an extension of theexisting Kwesie-Lima pit, is located approximately 5.0 kilometers south of theMain Plant at Damang. Abosso has submitted an application to the GhanaianMinerals Commission to convert its prospecting license for Lima South to amining lease.

 

Damang operates under amining lease with a total area of approximately 5,239 hectares. In the fiscalyear ended June 30, 2005, the Damang mine produced 0.2 million ounces ofgold, of which 0.176 million ounces were attributable to Gold Fields, withthe remainder attributable to minority shareholders in Abosso. As of June 30,2005, Damang had approximately 900 employees, including those employed by outsidecontractors.

 

***History***

 

Mining on the Abossoconcession began with underground mining in the early twentieth century. In thelate 1980s, Ranger commenced a project to study the feasibility of surfacemining at Damang, which culminated in an agreement with the government of Ghanato develop and conduct surface mining at the site. Surface mining at Damangcommenced in August 1997, and Gold Fields assumed control of theoperations on January 23, 2002.

 

***Geology***

 

The geology of the Damangmine deposit occurs at the hinge of a regional anticline as hydrothermalmineralization associated with dominantly east dipping thrusts andsub-horizontal quartz veins. Gold mineralization also occurs in theconglomerates of the Tarkwaian Formation to the south of the hinge formation.

 

***Mining***

 

The Damang mine comprisesboth open pit and production stockpile surface mining, and is thus subject toall of the surface mining risks discussed in the Risk Factors section. Althoughsurface mining generally is less dangerous than underground mining, serious andeven fatal accidents do still occasionally occur. While there is no reliableindustry benchmark for safety at Ghanaian surface mining operations, the Damangmine had a total injury frequency rate of approximately 0.22 per million manhours worked, down from 0.58 per million man hours worked in fiscal 2004. TheDamang mine has not had a fatal injury since its acquisition by Gold Fields in2002.

 

Damang uses the typical openpit mining methods of drilling, blasting, loading and hauling. The progressionof blasting in the open pit occurs in six meter flitches, which are thencombined to form steps of three meters with the ore and waste loaded into 100tonne dump trucks. Other than the unusual hardness of the rock at the site,Damang presents no unusual challenges beyond those faced at most open pits andore processing operations, including variation in ore grades.

 

Following the acquisition ofthis mine in January 2002, an exploration program was started to seekalternative sources of ore to replace the Damang pit, by testing bothhydrothermal and conglomerate styles of mineralization across the Damang leasearea. Following completion of the bulk of drilling by the middle of fiscal2003, a full time evaluation project, the Damang Extension Project (DEP), waslaunched to turn this exploration to account. The DEP resulted in theestablishment of the Amoanda and Tomento pits, and the extension of an old pitat Kwesie-Lima. Production from these new pits will be treated along withstockpiles of low grade, low oxide harder ores, or fresh ores at the MainPlant. Ore production commenced from Amoanda in the fourth quarter of fiscal2005. Mining at the Tomento pit commenced during July 2005. The Rex pit isscheduled to commence mining during fiscal 2007. Resource drilling is currentlyunderway to assess the potential expansion of the current pit design of the Rexpit. The development of the Amoanda and Tomento pits required the resettlementof 284 Ghanaian households in the areas. The establishment of the Rex pit isexpected to require additional resettlements.

 

Therewas an acceleration of the depletion of the higher grade areas of the mainDamang pit in the first half of fiscal 2005 which resulted in a decline in bothgrade and thus gold production in that period compared to previous levels.Extensive drilling along the western and eastern perimeter of the main Damangpit indicated a viable cutback to the existing pit and mining of the cutback(focusing mainly on removing the waste overburden) has commenced. Drilling tothe north and south of the Damang pit has indicated additional potential orewhich is currently being evaluated. In addition, a scoping study to evaluate the underground mining potential atAbosso Deeps, an area at the southern end of the Damang lease area near the oldAbosso underground mine has been completed and is currently under review.

 

A substantial proportion ofthe operations at Damang is performed by a mining contractor, AMS. Pursuant toa contract with Abosso, AMS provides employees, supplies and equipment formining at Damang, including drilling, blasting and waste stripping, as well asthe haulage of the material produced from the mining activities, including bothore and waste. AMS receives fees under the contract which depend on the type ofservice being performed and the equipment being used. Under the terms of thecontract, AMS is liable for any damage or loss it causes, including that causedby any subcontractor it hires. AMS is not liable for damage that is the resultof work performed, in accordance with the terms of the contract, which isunavoidable or which is caused by any negligent act or omission of employees ofAbosso or third parties over 

 

44

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whom AMS has no control. AMSis required to take out insurance to cover potential damage and liability.Abosso can terminate its contract at any time without paying any significantpenalties or having to purchase any of AMS’s equipment. Abosso is currently inthe process of re-negotiating the contractual terms with AMS to reflect theincreased current and potential work from mining the Damang cut-back andsatellite pits.

 

The Damang mine has accessto the national electricity grid, water and road infrastructure. Most suppliesare trucked in from either the nearest seaport, which is approximately 200kilometers away by road in Takoradi, or from Accra, which is approximately 360kilometers away by road.

 

Detailed below are theoperating and production results at Damang for the fiscal years ended June 30,2003, 2004 and 2005.

 
| ** **                           | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------|------------|------------------------------|------------|
| **Production**                       | ** ** | **2003**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| Tonnes (‘000)                   |       | 4,877                        |       | 5,236 |   | 5,215 |   |
| Recovered grade (g/t)                |       | 1.9                          |       | 1.8 |   | 1.5 |   |
| Gold produced (‘000 oz)(1)      |       | 299                          |       | 308 |   | 248 |   |
| **Results of operations ($million)** |       |                         |       |   |   |   |   |
| Revenues                             |       | 99.5                         |       | 120.0 |   | 104.3 |   |
| Total production costs(2)            |       | 77.9                         |       | 75.5 |   | 74.9 |   |
| Total cash costs(3)                  |       | 72.6                         |       | 68.5 |   | 69.9 |   |
| Cash profit(4)                       |       | 26.9                         |       | 51.5 |   | 34.4 |   |
| **Cost per ounce of gold ($)**       |       |                         |       |   |   |   |   |
| Total production costs               |       | 260                          |       | 245 |   | 302 |   |
| Total cash costs                     |       | 243                          |       | 222 |   | 282 |   |

 

----

Notes:

(1)            In fiscal 2003, 2004 and 2005,0.213 million ounces, 0.219 million ounces and 0.176 million ouncesof production, respectively, were attributable to Gold Fields, with theremainder attributable to minority shareholders in Abosso.

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

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

(4)            Cash profit represents revenue less totalcash costs.

 

While various satellite pitswere brought to production to offset the Damang pit depletion, the grade andgold production in fiscal 2005 decreased primarily due to the depletion of themain Damang pit during the second half of the year. Damang pit contains highergrade ore than the new pits and this higher grade pit was the only contributorto production in fiscal 2004. Total production and cash costs increased infiscal 2005 due to increases in the stripping ratio, as the main Damang pitneared the end of its mine life, and increases in fuel and consumable costs.Optimization of the mill feed blend and plant set up allowed Gold Fields totreat more tonnage in fiscal 2004 than fiscal 2003. Total production and cashcosts decreased in fiscal 2004 due to reductions in the stripping ratio as theDamang open pit neared the end of its life of mine.

 

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 June 30, 2005proven and probable reserves of 1.3 million ounces (0.9 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 2010. However, as discussed earlier in the RiskFactors and the Description of Mining Business – Mine Planning and Managementsections, there are a numerous factors which can affect reserve estimates andthe mine plan which could thus materially change the life of mine.

 

***Processing***

 

All processing at Damang isprovided by a single plant. The following table sets forth the yearcommissioned, processing techniques and processing capacity per month, as wellas average tonnes milled per month and metallurgical recovery factor during thefiscal year ended June 30, 2005 for the plant:

 
| **Processing Techniques** | ** ** |
|---------------------------|------------|
| **Plant**                 | ** ** | **Year commissioned** | ** ** | **Comminution Phase** | ** ** | **Treatment phase** | ** ** | **Capacity(1)  (tonnes/month)** | ** ** | **Average milled for   the year ended  June 30, 2005  (tonnes/month)** | ** ** | **Approximate  recovery factor for  the year ended  June 30, 2005(2)** | ** ** |
| Main Plant                |       | 1997 |   | Single stage  crushing with SAG and ball milling |   | CIL  treatment |   | 383,000 |   | 435,000 |   | 91 | % |

 

45

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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 nearest wholepercent.

 

Optimization of the Damangmill involves careful blending of hard and soft ores to maximize use of themilling circuit, which remains the constraint in this plant. Mining operationscontinue to focus on maintaining an appropriate plant feed blend.

 

***Capital Expenditure***

 

Gold Fields spentapproximately $11 million on capital expenditures at the Damang mine in fiscal2005, primarily on the development of the new pits, the drilling andfeasibility study for the Damang cutback and exploration. Gold Fields hasbudgeted approximately $24 million of capital expenditure at Damang for fiscal2006, primarily for pre-stripping of waste in the new cutback area of the mainDamang pit and continued development of the new pits and exploration.

 

**AustraliaOperations**

 

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 mining operations inAustralia, including the St. Ives and Agnew gold mining operations. As part ofthe consideration for the acquisition, Gold Fields agreed to pay to WMC aroyalty based on future gold production at St. Ives and Agnew, calculatedaccording to the following criteria:

 
| • |   | 4% of the net smelter  return of the gold production of St. Ives for each quarter to the extent that  cumulative production of gold from November 30, 2001 exceeds  3.3 million ounces, subject to the spot price of gold exceeding A$400  per ounce;  |   |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| • |   | 4% of the net smelter  return of the gold production of Agnew for each quarter to the extent that  cumulative production of gold from November 30, 2001 exceeds  0.8 million ounces, subject to the spot price of gold exceeding A$400  per ounce; and |   |
| • |   | 10% of the difference  between the spot gold price and A$600 per ounce of gold in respect 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 payable incash, 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. The obligation to pay royaltiesin respect of St. Ives is still in effect. To date, no royalty payments havebeen required to be paid by Gold Fields under this agreement.

 

**St. Ives**

 

***Introduction***

 

St. Ives is located 80kilometers south of Kalgoorlie and 20 kilometers south of Kambalda, straddlingLake Lefroy in Western Australia. It holds mining leases covering a total areaof approximately 91,078 hectares. St. Ives is both a surface and undergroundoperation, with a number of open pits, two operating underground mines and twometallurgical plants. In fiscal 2005, St. Ives produced 0.5 million ouncesof gold. St. Ives had a work force of approximately 1,000 employees as of June 30,2005, approximately 700 of whom were employed by outside contractors.

 

Gold production takes placeover an extensive area at St. Ives, although it is mainly concentrated in a 30kilometer corridor extending south-southeast from Kambalda across Lake Lefroy.

 

***History***

 

Gold mining began in the St.Ives area in 1897, with WMC commencing gold mining operations at St. Ives in1980.

 

***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.

 

46

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***Mining***

 

St. Ives is engaged inunderground mining and in both open pit and production stockpile surfacemining, and is thus subject to all of the underground and surface mining risksdiscussed in the Risk Factors section. Seismicity is the primary safety riskwith mining, increasingly occurring at depths below 500 meters. The risk isaddressed through the use of backfilling and by mining different parts of theorebody in controlled steps to improve stability, which is called stopesequencing. The safety record at St. Ives during fiscal 2005, in terms of losttime injury frequency rate, was better than the Australian industry average forthe same period. No fatalities were recorded in fiscal 2003, 2004 or 2005 or todate in fiscal 2006.

 

St. Ives sources productionfrom a variety of underground and surface operations, and has a heap leachoperation which treats low and marginal grade ore. The principal productionsources in fiscal 2005 included the Leviathan, Junction and Argo undergroundmines together with the Mars and Agamemnon open pits. Gold Fields expects theprincipal production sources in fiscal 2006 to be similar to fiscal 2005 exceptJunction is expected to contribute only residual material sourced from theunderground remnant pillars. As many of the operations at St. Ives involvemining deposits on or under Lake Lefroy (which is a shallow salt pan that haswater in it only intermittently), extracting ore requires construction of bermsand other earthworks to prevent water intrusion. Open pit operations use 180 to250 tonne excavators loading 150 tonne trucks. Waste dumps are formed adjacentto the pits or, if practicable, waste is dumped in previously exhausted pits.

 

All underground miningactivities are completed under a contract with Carlowen Proprietary Ltd, whichtrades as GBF Underground Mining, or GBF. A five year agreement with GBFcommenced in April 2004, and it operates under a cost reimbursable model.GBF provides all the employees, equipment and consumables necessary to completethe underground development and stoping. Under the terms of the contract GoldFields approves all expenditures incurred and guarantees to reimburse 95% ofthese costs, with the remaining 5% plus any profit earned contingent on GBFachieving certain key performance indicators. Under the terms of the contract,GBF is liable for claims arising from its performance or non-performance, andany loss, damage, injury or death related to the presence of its employeesonsite. GBF is not liable for liabilities or losses that are the result ofnegligence or a breach of a statutory duty of the mine owner. GBF is requiredto ensure that it and any subcontractors have adequate insurance.

 

Leighton ContractorsProprietary Limited, or Leighton, performs the surface mining at St. Ives, underan alliance contract which was extended in January 2004 for a five yearperiod. Leighton provides 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 costs throughreimbursement. Leighton is reimbursed 100% of its costs and is given anadditional amount for overhead. Payments above costs are contingent uponLeighton achieving certain key performance indicators. Under the terms of thecontract, Leighton is liable for claims arising from its performance ornon-performance or any loss, damage, injury or death related to the presence ofits employees on the sites. Leighton is not liable for claims or loss due to themine owner’s negligence. Leighton is required to ensure that it and anysubcontractors have adequate insurance.

 

*JunctionUnderground Mine*

 

The Junction mine used acombination of uphole open stoping and uphole bench and fill mining methods,with the mix depending on development and production needs. Backfilling using aslurry consisting of tailings and cement, a specifically designed dynamicground support system as well as stope sequencing, were all used to addressseismicity issues. Access to the orebody was through a decline tunnel whichaccommodates workers, materials and equipment. The maximum depth at present isapproximately 700 meters. Regular production is now complete at Junctionfollowing cessation of ongoing operations in May 2005. Remnant materialleft behind in pillars will continue to be accessed in the first half of fiscal2006.

 

*ArgoComplex*

 

Development of the Argounderground reserves commenced in fiscal 2003 in line with Gold Fields’strategy to reduce reliance on the Junction mine as a source of high grade ore.Stoping activities at the Argo mine commenced in November 2003. The Argounderground mine was slow to achieve expected productivity and margins infiscal 2005 but finally achieved expected productivity and margins in thefourth quarter. Open pit operations at Argo ceased in fiscal 2004.

 

*GreaterRevenge Complex*

 

Mining at the GreaterRevenge Area commenced in 1989. Mining operations at the Greater Revenge Areaduring fiscal 2005 consisted primarily of the Agamemnon and Mars open pitmines, which are located in Lake Lefroy. The mines apply typical open pit andlake sediment mining methods. The mine plans for Mars and Agamemnon wererevised in the first half of fiscal 2005 due to the geology of the ore bodiesbeing more complex than originally expected, and newly discovered extensions tothe Agamemnon open pit were opened in the second half of fiscal 2005.Additional extensions to the Agamemnon open pit were delineated in the firstquarter of fiscal 2006, and mining commenced during the second quarter.

 

47

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*LeviathanUnderground Complex*

 

The Leviathan complexconsists of three distinct underground areas: Sirius, which is now depleted;East Repulse, which is in production; and Conqueror, which commenceddevelopment in late fiscal 2004. Sirius consisted primarily of two large stopeswhich were depleted in the middle of fiscal 2005. East Repulse commencedstoping operations in fiscal 2004. Mining at East Repulse was accelerated infiscal 2005 but productivity and margin were below expectations. Development ofthe Conqueror area began in late fiscal 2004 with water drainage andrehabilitation of old access areas and was further accelerated in fiscal 2005.Production from long hole open stopes is scheduled to commence in fiscal 2006and build up to full production is expected by the end of fiscal 2006.****In addition, Gold Fields is continuing toexplore opportunities for further extensions of mining operations within theLeviathan complex.

 

*ThundererProspect*

 

Mining, in the form of wasteremoval, is due to commence at the Thunderer open pit in fiscal 2006. The minewill apply typical open pit and lake sediment mining methods. The deposit islocated straddling the southern shore of Lake Lefroy to the east of the newLefroy processing plant. The deposit is hosted underneath moderate depths oflake sediment and dunal sand cover.

 

*BahamaProspect*

 

Mining is expected tocommence at the Bahama Prospect in fiscal 2007 with waste removal. This depositis located 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 also applytypical open pit and lake sediment mining methods. The deposit is hostedunderneath shallow lake sediment cover.

 

*Cave RocksProspect*

 

CaveRocks is a prospect located approximately 5 kilometers to the west of theKambalda West township that was previously an open pit mine in the mid 1980sfor WMC. Gold Fields is currently conducting feasibility studies at Cave Rocksto look into a possible underground mining operation that would utilize upholeopen stoping methods with access to the ore body through a decline tunnel whichaccommodates workers, materials and equipment. If the feasibility studyreturns successful outcomes, mining is expected to commence in early fiscal2007.

 

The complexity of the orebodies at St. Ives presented particular challenges to production levels andrecovered grades in fiscal 2005. The open pit geological models at the GreaterRevenge Complex and the mine design of Argo underground mine had to bere-examined and revised in fiscal 2005. In addition, the Mars open pit, whichhad previously been the primary source for open pit ore at St. Ives,experienced problems in attaining high enough grade to meet productionexpectations.

 

The St. Ives production schedule requiresthat new open pit mining sources are progressively accessed. Extensions to thecomplex Agamemnon ore position are expected to be delineated and new open pitmines are expected to be commenced at Bahama and Thunderer, both located underlake sediments on Lake Lefroy in fiscal 2006. In addition, feasibility work fora new underground mine at Cave Rocks is scheduled in fiscal 2006. If thefeasibility study results are positive, Gold Fields intends to commencepre-development activities necessary to bring that production source on lineduring fiscal 2007.

 

The St. Ives operation hasaccess to the local electricity supplier and water, rail and roadinfrastructure, and needed supplies are trucked in locally from both Kambaldaand Kalgoorlie.

 

Detailed below are theoperating and production results at St. Ives for fiscal 2003, 2004 and 2005.

 

| ** **                           | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------|------------|------------------------------|------------|
| ** **                           | ** ** | **2003**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| **Production**                       | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** | ** ** |
| Tonnes (‘000)                   |       | 5,486                        |       | 6,744 |   | 6,332 |   |
| Recovered grade (g/t)                |       | 2.9                          |       | 2.5 |   | 2.6 |   |
| Gold produced (‘000 oz)         |       | 513                          |       | 543 |   | 527 |   |
| **Results of operations ($million)** |       |                         |       |   |   |   |   |
| Revenues                             |       | 176.2                        | (3)        | 211.8 |   | 221.4 |   |
| Total production costs(1)(2)         |       | 151.3                        |       | 204.7 |   | 231.6 |   |
| Total cash costs(4)                  |       | 101.5                        |       | 162.6 |   | 176.9 |   |
| Cash profit(5)                       |       | 74.7                         |       | 49.2 |   | 44.5 |   |
| **Cost per ounce of gold ($)**       |       |                         |       |   |   |   |   |
| Total production costs(1)            |       | 295                          |       | 377 |   | 439 |   |
| Total cash costs(1)                  |       | 198                          |       | 300 |   | 336 |   |

 

----

Notes:

(1)            For purposes of allocating production costsbetween St. Ives and Agnew, the consideration paid for the Australianoperations 

 

48

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in excess of the book value of the underlying net assets was allocatedpro rata to the value of the underlying assets.”

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

(3)            For management reporting purposes, prior tofiscal 2003, revenue was recognized prior to title passing to the buyer. UnderU.S. GAAP, revenue is recognized when title passes to the buyer, all othersales conditions are satisfied under the terms of the applicable contract andthe pricing is fixed and determinable. In the preparation of Gold Fields’ U.S.GAAP accounts for fiscal 2003, an adjustment of $6.4 million to revenues wasmade. See Note 24 to Gold Fields’ audited consolidated financial statementswhich appear elsewhere in this annual report. $5 million of this amount hasbeen allocated to St. Ives, which represents that portion of revenuesrecognized at St. Ives prior to title passing to the buyer.

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

(5)            Cash profit represents revenues less totalcash costs.

 

From fiscal 2004 to fiscal2005, there was a decrease in both tonnage and gold produced at St. Ives as asignificant transition occurred in the processing plants. During fiscal 2005,milling activities at the St. Ives Plant were terminated and replaced by thenew Lefroy Plant. In the past, Gold Fields has used other mills in the area tosupplement production capabilities at St. Ives. In fiscal 2005, Gold Fields didnot use other processing facilities and reduced the amount of tonnage processedin fiscal 2005 while the new Lefroy Plant came online. Total cash costsincreased as compared to fiscal 2004 levels primarily as a result of poor openpit grades, low underground productivities and, to a lesser extent, costsassociated with the ramping down of the old plant and initial operations at thenew Lefroy Plant.

 

From fiscal 2003 to fiscal2004, there was a significant increase in tonnage but gold produced increasedonly marginally due to lower recovered grades. Total cash costs increasedprimarily due to the commissioning of the underground mines and theappreciation of the Australian dollar against the U.S. dollar. These factors,when taken together with the lower recovery grades, resulted in higher totalcash costs per ounce of gold. Total open pit volumes mined decreased fromfiscal 2003 levels, evidencing a reduction in ore mining volumes in line withthe planned build up in underground mining and an increase in open pitstripping ratios.

 

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’s June 30, 2005proven and probable reserves of 2.5 million ounces will be sufficient tomaintain production through approximately fiscal 2010. However, as discussedearlier in the Risk Factors and the Description of Mining Business – MinePlanning and Management sections, there are a numerous factors which can affectreserve estimates and the mine plan which could thus materially change the lifeof mine.

 

***Processing***

 

The table below sets forthyear commissioned, processing techniques and processing capacity per month, aswell as average tonnes milled per month and metallurgical recovery factorsduring fiscal 2005, for each of the plants at St. Ives. The Heap Leach Plantoperation treats low and marginal grade ore from St. Ives. The crushing andstacking for this Plant was previously conducted by a contractor, Henry WalkerEltin Proprietary Ltd, or Henry Walker Eltin. Gold Fields bought Henry WalterEltin’s crushing equipment, which forms part of the Heap Leach Plant, in fiscal2005 and now does its own crushing and stacking.

 

**Processing Techniques**

 
| **Plant**            | ** ** | **Year commissioned** | ** ** | **Comminution Phase**                         | ** ** | **Treatment phase**               | ** ** | **Capacity(1)  (tonnes/month)** | ** ** | **Average milled for  the year ended  June 30, 2005  (tonnes/month)** |   | **Approximate  recovery  factor for the  year ended  June 30,  2005(2)** |   |
|----------------------|------------|-----------------------|------------|-----------------------------------------------|------------|-----------------------------------|------------|---------------------------------|------------|----------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|
| Lefroy Plant         |       | 2005                  |       | Single stage crushing and SAG milling         |       | Pump cell with electrowinning     |       | 375,000                         |       | 323,000(3                                                                  | )      | 93                                                                            | %      |
|                 |       |                  |       |                                          |       |                              |       |                            |       |                                                                       |   | ** **                                                                    |   |
| St. Ives Plant(4)    |       | 1988                  |       | Single stage crushing and SAG milling         |       | CIP treatment with electrowinning |       | 258,000                         |       | 228,000                                                                    |   | 95                                                                            | %      |
|                 |       |                  |       |                                          |       |                              |       |                            |       |                                                                       |   |                                                                          |   |
| Heap Leach  Plant(5) |       | 2000                  |       | Multiple stage crushing and screening process |       | Carbon absorption                 |       | 167,000                         |       | 190,000                                                                    |   | 62                                                                            | %      |

 

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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.

 

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(2)            Percentages are rounded to the nearest wholepercent.

(3)            Based on throughput for January 2005(during ramp up to February full commissioning) to June 2005.

(4)            The St. Ives Plant was closed in fiscal 2005.Average milled amounts are based on throughput for July 2004 to March 2005,the month of closing.

(5)            Heap leach recoveries are the result of anextended solution application process with full recovery requiring severalleach cycles. Full recovery of all recoverable gold (about 60% of the containedgold) for current ores is only achieved over several years. Thus, recoveriesmust be considered in terms of recovery as time progresses, or a “progressive”recovery. Over time, Gold Fields expects the plant to achieve progressiverecovery factors of around 60% of contained gold, equivalent to full recoveryof all recoverable gold.

 

The new Lefroy mill wasfully commissioned in February 2005. The new mill is located on the southshore of Lake Lefroy, approximately 12 kilometers south of the township ofKambalda. Although the comminution phase performed well in fiscal 2005, thetreatment phase was hampered by materials handling and piping designdeficiencies. These issues have since been substantially resolved.

 

Early in fiscal 2004, GoldFields initiated a substantial toll treatment program using two other mills inthe area. However, Gold Fields did not use these other mills in the area totreat its ore in fiscal 2005.

 

***Capital Expenditure***

 

Gold Fields spentapproximately A$137 million on capital expenditures at St. Ives in fiscal2005, primarily on the Lefroy Plant and mine development and exploration. GoldFields has budgeted approximately A$62 million for capital expenditure atSt. Ives for fiscal 2006, principally for exploration and mine development.Development expenditures are expected to focus on the Argo and Conqueror undergroundmines and the Thunderer open pit during fiscal 2006.

 

**Agnew**

 

***Introduction***

 

Agnew is located 23kilometers southwest of Leinster, approximately 375 kilometers north ofKalgoorlie in Western Australia. It holds mining leases covering a total area ofapproximately 58,868 hectares. Agnew is both a surface and undergroundoperation, with one open pit, one underground mine, and one metallurgicalplant. In fiscal 2005, it produced 0.2 million ounces of gold. Agnew had aworkforce of approximately 400 employees as of June 30, 2005, includingoutside contractors.

 

***History***

 

Gold was discovered at Agnewin 1895, with gold being produced there since then. WMC acquired the operationin 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 iscomprised of 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 inunderground mining and in open pit and production stockpile surface mining andis thus subject to all of the underground and surface mining risks discussed inthe Risk Factors section. The primary safety risk at Agnew is falls of groundat the underground operations, which is addressed through the use of groundsupport. The safety record at Agnew during fiscal 2005, in terms of lost injurytime frequency rate, was better than the Australian industry average for thesame period. There were no fatalities at Agnew in fiscal 2003, 2004 or 2005 orto date in fiscal 2006.

 

The principal productionsources in fiscal 2005 at Agnew were the Waroonga underground miningcomplex that comprises the Kim and Main Lodes together with the Songvangopen pit and depletion from pre-existing surface stockpile material. GoldFields expects the principal production sources in fiscal 2006 tobe similar, with the exception of the pre-existing surface stockpilematerial.

 

Most underground mininglabor at the underground mines is currently provided by Byrnecut. 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 

 

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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 is scheduled tobe completed in May 2006.

 

Leighton ContractorsProprietary Limited, or Leighton, performs the surface mining at Agnew, underan alliance contract which commenced in June 2005 for a two year period.Leighton provides employees, consumables and equipment for mining ore and wastedisposal. The contract is structured so that Leighton carries all the risk onplant and personnel with Gold Fields carrying the risk on costs throughreimbursement. Leighton is reimbursed 100% of its costs and is given anadditional amount for overhead. Payments above costs are contingent uponLeighton achieving certain key performance indicators. Under the terms of thecontract, Leighton is liable for claims arising from its performance ornon-performance or any loss, damage, injury or death related to the presence ofits employees on the sites. Leighton is not liable for claims or loss due tothe mine owner’s negligence. Leighton is required to ensure that it and anysubcontractors have adequate insurance.

 

*WaroongaComplex*

 

The Waroonga Complexcurrently includes the Kim underground mine and the Main Lode deposit. TheWaroonga open pit mine was completed and operations ceased in the third quarterof fiscal 2003 and the low grade stockpile from this source was depleted infiscal 2005. The Kim underground mine currently uses uphole open stopingmethods with access to the orebody through a decline tunnel which accommodatesworkers, materials and equipment. All mining is currently conducted byByrnecut. Ore production achieved full sustainable levels in the first half offiscal 2004. Production from the Kim underground mine in fiscal 2005 exceededexpectations. In fiscal 2005, exploration found an extension to the Kimunderground mine ore body which is expected to extend the life of the mine byapproximately two years. The Kim underground mine was a significant contributorto production in fiscal 2005. The ore grades have generally been aboveexpectation while the ore zones have generally been more continuous thanoriginal drilling had predicted.

 

Trial mining of the MainLode deposit commenced in fiscal 2005. Further development of this lode will besubject to the results of investigations being carried out in fiscal 2006,particularly delineation of the mineralization and completion of the trialmining.

 

*Crusader/DelivererUnderground Mine and Claudius Prospect*

 

The Crusader Prospect wasdiscovered in 1987, with mining commencing in 1989, initially via an open pitmine. As previously anticipated, the Crusader/Deliverer underground mine ceasedproduction in December 2004. However, the infrastructure provided anexploration decline to a position next to the Claudius Prospect. Gold Fieldscontinued exploration and evaluation of the Claudius Prospect**duringfiscal 2005 and is expecting to make a development decision based on theoutcome of delineation drill programs to be completed during fiscal 2006.

 

*SongvangOpen Pit*

 

A significant development atAgnew during fiscal 2004 was the proving of the Songvang open pit. Afeasibility study for the Songvang deposit, located eight miles south of theCrusader mine, was completed during the first half of fiscal 2004 and the openpit was approved for development late in fiscal 2004. The Songvang open pitcommenced production during fiscal 2005. However, initial operations at the pitwere hampered by employee shortages resulting from a robust resources sector inWestern Australia. This open pit produces a base load of medium grade oresthat, along with the high grade ores from the Waroonga underground complex haveextended the expected mine life of Agnew and therefore provided for a moresystematic approach to ore reserve replacement.

 

Exploration around theRedeemer, Waroonga and Crusader complexes has produced ore grade intersectionsat the New Woman Prospect, which is an open pit prospect located immediatelysouth of the Waroonga Complex, and the Royal Prospect, which is located withinthe Waroonga Complex near the Waroonga open pit mine. Exploration potential inthe Agnew area was enhanced through the completion of an agreement whichfurther consolidates Gold Fields’ land position in the area. In early fiscal2006, Gold Fields completed an agreement with BMV Properties Pty Ltd, asubsidiary of Breakaway Resources Limited, or Breakaway. The previous jointventure agreements between the parties encompassing the Vivien deposit, whichis located in the northeast of Agnew’s tenement package, and the Mirandatenement package were replaced by an agreement in which Gold Fields is theregistered tenement holder of all of the Vivien ground and the majority of theMiranda ground with all gold rights going to Gold Fields and all base metalsrights going to Breakaway. Breakaway’s base metal rights are subject to GoldFields’ right to a two percent royalty on future base metal production on theMiranda tenement.

 

Further exploration ofdeposits at the Claudius, Vivien, Rajah and the New Woman Prospects is plannedfor fiscal 2006. Additional exploration programs in fiscal 2006 are planned to assessopportunities to establish new reserves in extensions to the current operatingareas at Agnew.

 

Agnew has access to thelocal electricity supplier and road infrastructure. Water is supplied fromlocal wells, and needed supplies are generally trucked in from Kalgoorlie.

 

Detailed below are theoperating and production results at Agnew for fiscal 2003, 2004 and 2005.

 

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| ** **                           | ** ** | **Year ended June 30,** | ** ** |
|--------------------------------------|------------|------------------------------|------------|
| ** **                           | ** ** | **2003**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| **Production**                       | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** | ** ** |
| Tonnes (‘000)                   |       | 1,268                        |       | 1,179 |   | 1,170 |   |
| Recovered grade (g/t)                |       | 3.5                          |       | 5.3 |   | 5.6 |   |
| Gold produced (‘000 oz)         |       | 144                          |       | 202 |   | 212 |   |
| **Results of operations ($million)** |       |                         |       |   |   |   |   |
| Revenues                             |       | 49.2                         | (3)        | 78.5 |   | 89.3 |   |
| Total production costs(1) (2)   |       | 56.9                         |       | 61.1 |   | 69.1 |   |
| Total cash costs(4)                  |       | 31.5                         |       | 44.5 |   | 49.4 |   |
| Cash profit(5)                       |       | 17.8                         |       | 34.0 |   | 39.9 |   |
| **Cost per ounce of gold ($)**       |       |                         |       |   |   |   |   |
| Total production costs(1)            |       | 396                          |       | 303 |   | 325 |   |
| Total cash costs                     |       | 219                          |       | 221 |   | 233 |   |

 

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Notes:

(1)               For purposes of allocating production costsbetween St. Ives and Agnew, 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.

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

(3)               For management reporting purposes, prior tofiscal 2003, revenue was recognized prior to title passing to the buyer. UnderU.S. GAAP, revenue is recognized when title passes to the buyer, all othersales conditions are satisfied under the terms of the applicable contract andthe pricing is fixed and determinable. In the preparation of Gold Fields’ U.S.GAAP accounts for fiscal 2003, an adjustment of $6.4 million to revenues wasmade. See Note 24 to Gold Fields’ audited consolidated financial statementswhich appear elsewhere in this annual report. $1.4 million of this amount hasbeen allocated to Agnew, which represents that portion of revenuesrecognized at Agnew prior to title passing to the buyer.

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

(5)               Cash profit represents revenues less totalcash costs.

 

In fiscal 2005, 1.2 milliontonnes of ore were processed and 0.2 million ounces of gold were produced.Tonnes processed were similar to the results from fiscal 2004, and goldproduction increased slightly due in large part to a higher proportion of orecoming from the Kim underground mine which generally has a higher grade thanother ore sources at Agnew. Total cash costs increased as the Australian dollarcontinued to appreciate against the U.S. dollar, even though the costs actuallydecreased marginally when measured in Australian dollars per ounce, thefunctional currency of this mine.

 

In fiscal 2004, tonnageprocessed and ounces of gold produced were 1.2 million and 0.2 millionounces, respectively. While tonnes processed decreased from fiscal 2003, gold productionincreased due in large part to increased yields resulting from improvedunderground mine performance plus an increase in overall gold recovery. Inaddition, the Waroonga open pit mine had been producing grades belowexpectations prior to its closure during fiscal 2003. Total cash costsincreased principally because of the appreciation of the Australian dollaragainst the U.S. dollar and a substantial increase in underground tonnageproduced. Total production costs per ounce decreased due to lower depreciationas a result of the lower capital base following the impairment recorded infiscal 2003. See “Operating and Financial Review and Prospects — Results ofOperations — Years Ended June 30, 2004 and 2003 — Impairment of assets.”On a per ounce basis, total cash costs increased only slightly as the impact ofthe appreciation in the Australian dollar was almost entirely offset by theincrease in recovered grade in fiscal 2004.

 

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 June 30, 2005 provenand probable reserves of 0.9 million ounces will be sufficient to maintainproduction through approximately fiscal 2009. However, as discussed earlier inthe Risk Factors and the Description of Mining Business – Mine Planning andManagement sections, there are a numerous factors which can affect reserveestimates and the mine plan which could thus materially change the life ofmine.

 

***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 averagetonnes milled per month and metallurgical recovery factor during the fiscalyear ended June 30, 2005 for the plant:

 

**Processing Techniques**

 
| **Plant**  | ** ** | **Year  commissioned** | ** ** | **Comminution Phase** | ** ** | **Treatment phase** | ** ** | **Capacity(1)  (tonnes/month)** | ** ** | **Average milled for   the year ended  June 30, 2005  (tonnes/month)** | ** ** | **Approximate  recovery  factor for the  year ended  June 30,  2005(2)** | ** ** |
|------------|------------|------------------------|------------|-----------------------|------------|---------------------|------------|---------------------------------|------------|-----------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------|------------|
| Main Plant |       | 1986                   |       | SAG milling           |       | CIP treatment       |       | 100,000                         |       | 97,000                                                                      |       | 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 nearest wholepercent.

 

Because of the possible additional ore reserves onthe Agnew site and possible capacity constraints at the mill, Gold Fields isassessing options to expand Agnew’s processing capacity.

 

***Capital Expenditure***

 

Gold Fields spentapproximately A$44 million on capital expenditures at Agnew in fiscal2005, primarily on mine site exploration and development of the Kim and MainLode underground mines and the Songvang open pit. Gold Fields has budgetedapproximately A$22 million for capital expenditure at Agnew for fiscal2006, primarily for further development of the Kim and Main Lode undergroundmines and exploration.

 

**Exploration**

 

Gold Fields holds a diverseportfolio of active gold and platinum group metal exploration projects andassets in Africa, Europe, North America, South America, China and Australasia,which are primarily held through project companies incorporated in thejurisdiction where the exploration projects or assets are located. In addition,Gold Fields has in place a number of exploration projects in connection withmineral rights it holds which are adjacent to its active mining operations inSouth Africa, Ghana and Australia. Gold Fields’ exploration program isheadquartered in Denver, Colorado, which also acts as the regional office forNorth and Central America, with regional offices in Oxford, England(responsible for Europe, the former Soviet Union and Africa), Perth, Australia(responsible for Australasia) and Santiago, Chile (responsible for SouthAmerica). Gold Fields’ exploration team includes 22 geologists, along withsupport staff.

 

Gold Fields’ explorationstrategy is based on a balanced approach to projects, which permits it toconsider a project at any stage of development, from greenfield projects throughthe feasibility study phase. Gold Fields focuses its exploration activities onfinding quality mineral assets with potential for low-cost extraction of goldor platinum group metals. When determining whether it will proceed with aproject, Gold Fields weighs a variety of cost factors, including the cost ofacquiring the project, expected cash operating costs, costs of capital andoverhead costs, against the likely returns for the project and the project’sstrategic importance in terms of geographic diversification and productionprofiles. With respect to exploration projects which are adjacent to GoldFields’ existing mining operations, Gold Fields also considers possibleoperating synergies which can be realized, for example, by sharing processingplants and other infrastructure.

 

Gold Fields has expanded itsexploration activities in countries and regions where it has limited experienceby means of equity investments in, and strategic alliances with, junior miningpartners that are already operating in the relevant region with the requisitemining permits and approvals. Gold Fields has applied this strategy toexploration projects in Canada, Venezuela, Burkina Faso, Guinea, China, andSardinia, among others.

 

Generally, Gold Fieldsbudgets to spend up to $10 per ounce of gold it produces on exploration,provided the opportunities offered warrant such expenditure. At highacquisition price for gold prospects, the universe of gold prospects that mayoffer positive returns is limited and exploration efforts are carefullyselected with strict economic criteria in mind.

 

In order to be considered byGold Fields, generally an exploration project must have the potential to meetthe majority of certain minimum target criteria, which Gold Fields refers to asthe “Rule of Twos.” The Rule of Twos criteria require that a projecthas potential for a minimum of 2,000,000 ounces of reserves, production ratesof greater than 200,000 ounces per year, cash cost of production of less thanhalf the commodity price and a double digit rate of return. If these criteriaare met and the project fits within Gold Fields’ strategic development goalsand is not located in a region which Gold Fields considers high-risk, GoldFields will consider taking on the project.

 

Gold Fields’ goal in itssearch for quality assets is to have a breakeven cost defined as the sum ofacquisition costs, total cash operating costs, capital costs and general andadministrative costs of less than 75% 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) targetdelineation, (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. Each regional exploration officecontinuously monitors and reviews projects in its region and targets projectsat all stages of development. Once a project reaches the feasibility stage, ateam evaluates the project with feedback regarding the project’s strategicimplications from Gold Fields’ corporate development office.

 

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***GoldFields’ Exploration Projects***

 

The table below provides abreakdown of the number of projects in Gold Fields’ four exploration regionsfor each of the five phases of the resource triangle as of September 30,2005. The table does not include exploration projects on sites adjacent to GoldFields’ existing operations in South Africa, Ghana or Australia.

 

| **Phase**           | ** ** | **North and Central  America** | ** ** | **Europe and Africa** | ** ** | **Australasia** | ** ** | **South America** | ** ** |
|---------------------|------------|--------------------------------|------------|-----------------------|------------|-----------------|------------|-------------------|------------|
| Feasibility         |       | —                         |       | 1                     |       | —          |       | 1                 |       |
| Pre-feasibility     |       | —                         |       | 1                     |       | —          |       | —            |       |
| Resource definition |       | —                         |       | —                |       | 1               |       | 1                 |       |
| Initial drilling    |       | —                         |       | 1                     |       | 2               |       | 2                 |       |
| Greenfield          |       | —                         |       | 2                     |       | 3               |       | 2                 |       |

 

Gold Fields spent $28.3million on exploration projects not adjacent to its mining operations in fiscal2005. Gold Fields’ total exploration budget for projects not adjacent to itsmining operations for fiscal 2006 is approximately $40.0 million. In addition,Gold Fields spent $33.0 million on exploration at sites adjacent to itsexisting mining operations in fiscal 2005 and has budgeted approximately $28.4million for fiscal 2006. Equity investments and capitalized explorationexpenditures at APP and Cerro Corona totaled approximately $52.5 million duringfiscal 2005.

 

On July 10, 2002, GoldFields 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 Corona Project*

 

In December 2003, GoldFields, through a subsidiary, signed a definitive agreement to purchase an80.7% economic and 92% voting interest in the Cerro Corona Project from aPeruvian family-owned company, Sociedad Minera Corona S.A., or SMC. Theagreement called for a reorganization whereby the assets of the Cerro CoronaProject were transferred to a Peruvian company named Sociedad Minera La CimaS.A., or La Cima, in July 2004.****Theenvironmental impact assessment for the project was submitted to the PeruvianMinistry of Energy and Mines, or MEM, in May 2005. Following publicconsultation and comment, the MEM approved the environmental impact assessmenton December 2, 2005. Gold Fields has now commenced steps to complete thepurchase for a total consideration of $40 million. Additional permits arerequired to construct the mine and are being processed now that theenvironmental impact assessment has been approved. Gold Fields expects thesepermits to be issued by the end of the third quarter of fiscal 2006.

 

The Cerro Corona Projectforms part of a porphyry copper-gold deposit located within Hualgayoc MiningDistrict approximately 40 kilometers northwest of the Yanacocha Gold Mine inthe Department of Cajamarca, northern Peru. At the time the definitive purchaseagreement was signed, SMC already owned 141.7 hectares, comprising the surfacerights over much of the Cerro Corona deposit, the Mina Carolina plant andcampsite, and about half of the valley that would be used for tailing storage.The remaining parcels needed for the Cerro Corona Project, which total 382.06hectares, have been acquired or options have been agreed to acquire such land.

 

The Cerro Corona Project islocated in the highest part of the Western Cordillera of the Andes in NorthernPeru, close to the headwaters of the Atlantic continental basin. It liesapproximately 90 kilometers by road north of the departmental capital ofCajamarca (population approximately 100,000) and near the village of Hualgayoc.Access from Cajamarca is by means of an all-weather road to the Yanacocha Mine(45 kilometers), followed by approximately 45 kilometers of gravel road thatcontinues on to the village of Hualgayoc and the town of Bambamarca.

 

The Cerro Corona Project hasbeen the subject of extensive exploration and several feasibility studies overthe last 10 years. Together with La Cima, Gold Fields’ recent efforts have beenfocused on community relations, further environmental baseline data gatheringand completion of an updated environmental impact study. However, in fiscal2005, the Peruvian mining industry experienced sporadic social unrest resultingin a six-month delay to the envisioned project timetable. During the fiscalyear, Gold Fields completed an updated geologic resource model for the depositas well as numerous other enhancements related to mining and processingoptimizations. Although the regulatory permitting process is not yet complete,for the first time, Gold Fields has included reserve numbers for Cerro Coronain its ore reserves as of June 30, 2005. At mid-fiscal year, Gold Fieldscommissioned detailed engineering studies to generate +/-10% accuracy estimatesof project operating and capital costs. The feasibility study is now complete. Thecurrent schedule anticipates commencement of initial earthworks early inthe third quarter of fiscal 2006 with production scheduled to commence in thethird quarter of calendar 2007. An additional $100 million of capitalexpenditure for fiscal 2006 at Cerro Corona was approved by the Gold Fields’Board of Directors in November 2005.

 

*Arctic Platinum Project*

 

The Arctic Platinum Project,or APP, is located near the city of Rovaniemi in northern Finland. APP was setup in 2000 as a joint venture to develop potential platinum group metaldeposits through surface and underground operations. Gold Fields held 51% ofAPP during fiscal 2003, with the remainder owned by Outokumpu Oy, or Outokumpu,a Finnish industrial conglomerate with over 50 years’ experience designing and 

 

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supplying technology for themining and metallurgical industries. On September 11, 2003, Gold Fieldsexercised its pre-emptive right to acquire Outokumpu’s 49% interest in APP, forconsideration of $31 million, comprising $23 million in cash and Gold Fieldsordinary shares worth $8 million.

 

APP was assessing twopotential surface mineable deposits called Konttijarvi and Ahmavaara, which arereferred to as the Suhanko Project. The Konttijarvi and Ahmavaara deposits arefound in the Konttijarvi-Suhanko Intrusion, which forms part of the Portimomafic layered complex situated in northern Finland. The feasibility study forthe Suhanko Project was completed in the third quarter of fiscal 2005. Based onthe results of the study, including a lower than expected mine head grade,prevailing metal market conditions and significant euro currency strengthening,Gold Fields decided to postpone the creation of a large-scale surface miningcomplex and to continue investigations into smaller scale, high-margin projectsas well as offers from third parties. Exploration drilling at Konttijarvi andAhmavaara continued until mid-August 2005. On October 18, 2005, GoldFields announced that it had entered into a letter of intent with NorthAmerican Palladium, or NAP, a Canadian platinum metals group producer, to forma joint venture to further explore mining properties and develop a mine at theAPP. See “—Recent Developments.”

 

*Essakane Joint Venture*

 

The Essakane Joint Venture,or EJV, is located 330 kilometers northeast of Burkina Faso’s capital city ofOuagadougou, adjacent to the artisinal miner village of Essakane. EJV is a50%/50% venture between Gold Fields and Orezone Resources and Orezone iscurrently the operating partner. The Essakane Main Zone, or EMZ, deposit is awide, near surface oxide mineralized zone hosted within a volcano-sedimentarysequence in a greenstone belt. Gold Fields’ 50% interest vested in the lastquarter of fiscal 2005 when Gold Fields had expended $8 million on explorationand development since entering the joint venture. Fiscal 2005 expenditures werefocused on drilling out and proving up the EMZ. An initial geologic block modelof the EMZ was developed in May 2005. Simultaneously Gold Fields began apreliminary feasibility study on the EMZ. The completion of a new geologicalresource model has been delayed to the third quarter of fiscal 2006, pendingconfirmation of the geological model and resolution of sampling qualityassurance. Gold Fields has the opportunity to obtain an additional 10% interestin the project by completing a bankable feasibility study which would bescheduled to begin in September 2006 if the project proceeds.

 

**Living Gold**

 

At the end of calendar 2002,Gold Fields initiated the Living Gold project, an export-oriented businesswhich produces roses as part of the South African cut-flower industry. Therationale was to establish a job-creating, economically sustainable communityinvestment project in the Carletonville area in which Gold Fields’ Driefonteinmine operates. Living Gold involves a partnership with the IndustrialDevelopment Corporation, which owns 40% of the company. In fiscal 2005, LivingGold produced approximately 23 million stems and had revenue of approximatelyR44 million ($6.8 million). Although it originally targeted markets in WesternEurope, as a result of the strengthening of the Rand against the Euro duringfiscal 2005, Living Gold adjusted its export marketing focus more towards theUnited States, Japan, Australia and Eastern Europe and also began selling rosesin the South African domestic market. Gold Fields anticipates that Living Goldwill increase its area under production during fiscal 2006 through the use ofthird party financing.

 

**Recent Developments**

 

***Cerro CoronaProject***

 

Followingapproval of the environmental impact assessment for the Cerro Corona Project bythe Peruvian Ministry of Energy and Mines on December 2, 2005, Gold Fields hasnow commenced steps to complete the purchase of an 80.7% economic interest and92% voting interest in the Cerro Corona Project.  See “— Exploration — Gold Fields’ ExplorationProjects — Cerro Corona Project.”

 

***Acquisitionof Bolivar Gold Corp.***

 

OnNovember 21, 2005, Gold Fields and Bolivar Gold Corp., or Bolivar, jointlyannounced that they had entered into an agreement providing for Gold Fields toacquire, through a court approved plan of arrangement, all of the outstandingsecurities of Bolivar not currently held by Gold Fields for total cashconsideration of approximately $330 million. Holders of Bolivar common shareswill be offered C$3.00 per Bolivar common share and holders of Bolivar warrantsexpiring on March 17, 2008, August 25, 2008 and December 22,2009 will be offered C$1.90, C$1.25 and C$0.90 per warrant, respectively. Theconsideration for the warrants expiring on March 17, 2008, and August 25,2008, is calculated based on the amount of consideration per common share minusthe warrant strike price and the consideration for the warrants expiring on December 22,2009, is calculated based on a premium equal to the premium payable to commonshareholders based on the closing price of the common shares on November 18,2005. Furthermore, the transaction will trigger the redemption of C$26 millionprincipal amount of convertible debentures of Bolivar at a redemption price ofC$1,905.25 in cash per C$1,000 principal amount of debentures for a totalamount of $24.1 million, which is included in the total purchase considerationreferred to above.

 

GoldFields currently holds approximately 15.5% of the common shares and 32% of thewarrants expiring on August 25, 2008, which is approximately 16% of thetotal warrants outstanding. Definitive agreement documentation was executed on December 1,2005, and the SARB has approved the proposed transaction.

 

Eachof Gold Fields’ and Bolivar’s Boards of Directors have voted to approve thetransaction and it is anticipated that the transaction will close in January 2006,subject to, among other things, satisfaction of the following principalconditions precedent:

 

•        court approval of the plan of arrangement;

•        approval by two-thirds of the holders ofcommon shares of Bolivar present in person or by proxy at an extraordinarygeneral meeting of Bolivar to be held to approve the transaction;

 

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•        approval by two-thirds of the holders ofwarrants of Bolivar, voting together as a single class, present in person or byproxy at an extraordinary general meeting of Bolivar to be held to approve thetransaction;

•        no more than 10% of holders of Bolivar commonshares exercising dissent rights; and

•        approval, to the extent necessary, of anyregulatory authorities having jurisdiction over the transaction.

 

Bolivaris listed on the Toronto Stock Exchange and operates the Choco 10 open pit goldmine in the El Callao gold district in the Bolivar State, Venezuela.

 

***Arctic Platinum JointVenture with North American Palladium***

 

On October 18, 2005,Gold Fields announced that it had entered into a letter of intent with NorthAmerican Palladium, or NAP, a Canadian platinum metals group producer, to forma joint venture to further explore mining properties and develop a mine at APP.APP’s location and geology are similar to that of NAP’s other properties and itis expected that NAP will be able to utilize its operating and developmentexperience in the design and construction of a mine at APP. The letter ofintent provides that NAP will be granted an option to acquire up to a 60%undivided interest in APP including the Suhanko, SJ Reef and SK Reef miningproperties and claims located south of Rovaniemi, Finland. NAP’s option toacquire its interest in APP will vest upon NAP satisfying the followingconditions on or before June 30, 2008: (i) completing a $7.5 millionre-scoping study and exploration program and $5.0 million feasibility study; (ii) makinga decision to develop a mine at APP; and (iii) paying Gold Fields up to$45.0 million through the issuance of NAP common shares. The price per sharewill be $4.88, which is the weighted average trading price of NAP’s commonstock on the American Stock Exchange for 11 trading days commencing October 11,2005. During the next stage of work, NAP is expected to manage the exploration,engineering and evaluation activity on APP. This work is to be divided into twophases, Phase I, a re-scoping study, and Phase II, a feasibility study. Theproposed exploration program will focus on APP’s SK Reef and SJ Reef projects.The feasibility study is expected generate a report with sufficient engineeringdetail and cost estimates in order for the APP****tobe considered for project financing or other suitable financing alternatives.

 

The re-scoping andfeasibility studies are expected to commence in the first quarter of 2006 andtake approximately 30 months to complete. It is expected that a joint venturewill be formed with NAP holding a 60% interest and Gold Fields holding a 40%interest. Gold Fields would have a back-in right to acquire an additional 10%interest in the joint venture to be paid for by reducing the number of NAPcommon shares issued to Gold Fields by 20%. NAP would remain operator of thejoint venture which would be managed under a joint venture arrangement.Completion of the transaction is subject to a number of conditions including,among other things, negotiating and executing a formal option and joint ventureagreement and receipt of all required regulatory and third party approvals andconsents, including certain regulatory approvals, such as the South AfricanReserve Bank.

 

**Insurance**

 

Gold Fields holds insurancepolicies providing coverage for accidental loss or damage, businessinterruption in the form of fixed operating costs or standing charges, publicliability, material damage and other losses which it holds through a captiveinsurance company domiciled in Gibraltar. Gold Fields’ insurance policiescovering material damage and business interruption based on fixed operatingcosts or standing charges provide coverage in amounts up to $125 millionper event occurring underground and up to $400 million per event occurringon the surface. Gold Fields is self insured up to $8.5 million per event. Infiscal 2003, Gold Fields changed from business interruption cover based ongross profit to cover based on fixed operating costs or standing charges onlyin an effort to reduce costs.

 

Management believes that thescope and amounts of coverage of its insurance policies are adequate and inaccordance with customary practice for a gold mining company of its size withmultinational operations.

 

**Regulatoryand Environmental Matters**

 

***South Africa***

 

*Environmental*

 

Gold Fields’ South Africanoperations are subject to various laws relating to the protection of theenvironment. South Africa’s Constitution grants the people of South Africa theright to an environment that is not harmful to human health or well-being andto protection of that environment for the benefit of present and futuregenerations through reasonable legislative and other measures. The Constitutionand the National Environmental Management Act 107 of 1988 grant legal standingto a wide range of people and interest groups to bring legal proceedings toenforce their environmental rights, which are enforceable against privateentities as well as the South African government.

 

Environmental legislation inSouth Africa has become increasingly more onerous while enforcement ofenvironmental requirements in South Africa is now more rigorous than in thepast. Specific environmental rules pertaining to prospecting and miningare set out in the Mineral and Petroleum Resources Development Act 28 of 2002,or the New Minerals Act, and its regulations. The environmental obligationsimposed by 

 

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the New Minerals Act are significantlymore stringent than the provisions of the former legislation. In particular,the New Minerals Act makes express provision for directors’ liability incircumstances when environmental harm arises pursuant to mining operations. See“— Mineral Rights.”

 

South African environmentallegislation commonly requires businesses whose operations may have an impact onthe environment to obtain permits and authorizations for those operations. Theapplicable environmental legislation also imposes general compliancerequirements and incorporates the “polluter pays” principle. All prospectingand mining operations required by the New Minerals Act are to be conductedaccording to an environmental management plan which must be approved by theDepartment of Minerals and Energy.

 

South African miningcompanies are required by law to undertake rehabilitation works as part oftheir 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, 2005, GoldFields had contributed a total of approximately Rand 401.2 million,including accrued interest, to the fund.

 

Gold Fields has implementedenvironmental management systems in compliance with ISO 14001 throughout itsoperations in South Africa, and has received full certification under ISO 14000for all surface portions of its South African operations. Gold Fields’non-South African operations received full ISO 14001 certification in fiscal2003.

 

In addition, Gold Fieldsbecame a signatory to the International Cyanide Management Code, or CyanideCode, on November 3, 2005, and all its operations, including the SouthAfrican operations, are committed to complying with the code. Theimplementation structure of the code allows the operations up to three years tohave independent, third-party audits conducted to evaluate compliance status.

 

*Health andSafety*

 

The principal objective ofthe Mine Health and Safety Act No. 29 of 1996, or the Mine Health andSafety Act, is to protect the health and safety of persons at mines. The MineHealth and Safety Act requires that employers and others ensure their operatingand non-operating mines provide a safe and healthy working environment,determines penalties and a system of administrative fines for non-complianceand gives the Minister of Minerals and Energy the right to restrict or stopwork at any mine and require an employer to take steps to minimize health andsafety risks at any mine. The Mine Health and Safety Act further provides foremployee participation through the establishment of health and safety committeesand by requiring the appointment of health and safety representatives. It alsogives employees the right to refuse dangerous work. Finally, it describes thepowers and functions of a mine health and safety inspectorate and the processof enforcement.

 

Under the Mine Health andSafety Act, an employer is obligated, among other things, to ensure, as far asreasonably practicable, that its mines are designed, constructed and equippedto provide conditions for safe operation and a healthy working environment andthe mines are commissioned, operated, maintained and decommissioned in such away that employees can perform their work without endangering their health andsafety or that of any other person. Every employer must ensure, as far asreasonably practicable, that persons who are not employees, but who may bedirectly affected by the activities at a mine, are not exposed to any hazardsto their health and safety.

 

The Mine Health and SafetyAct requires employers, among other things, to establish health and safetypolicies, to provide employees with health and safety training, assess andrespond to risk and establish a system of medical surveillance.

 

The Occupational Diseases inMines and Works Act 78 of 1973, or the Occupational Diseases Act, governscompensation and medical costs related to certain illnesses contracted bypersons employed in mines or at sites where activities ancillary to mining areconducted. Occupational health care services are made available by Gold Fieldsto employees from its existing facilities. Pursuant to changes in theOccupational Diseases Act, Gold Fields may experience an increase in the costof these services. See “Key Information — 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.

 

*MineralRights*

 

TheNew Minerals Act

 

The New Minerals Act cameinto effect on May 1, 2004. The New Minerals Act vests the right to prospectand mine in the state (which includes the rights to grant prospecting andmining rights on behalf of the nation) to be administered by the government ofSouth Africa in order to, among other things, promote equitable access to thenation’s mineral resources by South Africans, expand opportunities forhistorically disadvantaged persons who wish to participate in the South Africanmining industry, advance social and economic development, and create aninternationally competitive and efficient administrative and regulatory regime,based on the universally accepted principle, and consistent with commoninternational practice, that mineral resources are part of a nation’spatrimony. Gold Fields currently owns substantially all of the mineral rightsunder the previous regime for the properties for which it has miningauthorizations and will seek to convert these rights into mining rights underthe New Minerals Act.

 

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Under the former regulatoryregime, mineral rights (which encompassed the right to prospect and mine) inSouth Africa were held either privately or by the government of South Africa.Ownership of private mineral rights was held through title deeds andconstituted real rights in land, which were enforceable against any thirdparty. Prospecting and mining are now regulated by the provisions of the NewMinerals Act, including the transitional provisions included therein.

 

The transitional provisionsof the New Minerals Act phase out existing rights to prospect and mine grantedunder the old legislation. The transitional provisions contemplate threescenarios, applicable when the New Minerals Act came into effect: (1) mineralrights in respect of which no prospecting permit or mining authorization hasbeen issued and/or no prospecting or mining activities are taking place; (2) mineralrights that are the subject of prospecting permits and prospecting is takingplace; and (3) mineral rights in respect of which a mining authorizationhas been issued and mining is taking place. The rights described in the threecategories are referred to as old order rights. Under category (1), the holdersof privately-held mineral rights would need to apply for a prospecting ormining right in their own names to replace their existing mineral rights.Application has to be made within one year of the relevant provision of the NewMinerals Act becoming operational. Under categories (2) and (3), anyprospecting permit or mining authorization granted under the old legislationwould continue to be valid for the period granted under the old legislation,subject to a maximum period of two or five years, respectively. After the lapseof the one year period referred to in category (1) and the two and fiveyear periods in categories (2) and (3) respectively, the mineralrights would cease to exist. Within these periods, in order to continue withmining or prospecting operations, the holders of mineral rights and prospectingpermits or mining authorizations would have to apply for a new prospectingright or mining right in respect of category (1) and for conversion to newprospecting or mining rights in respect of categories (2) and (3). GoldFields is entitled to conversion of its existing old order rights provided thatit complies with the requirements for conversion, some of which are of adiscretionary nature.

 

Under the New Minerals Actprospecting rights are initially granted for a maximum period of five years andcan be renewed once upon application for a further period not exceeding threeyears. Mining rights are valid for a maximum period of 30 years, and canbe renewed upon application for further periods each of which may not exceed30 years. Provision is made for the grant of retention permits, whichwould 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. Gold Fields might not be successful in itsapplications for new prospecting rights or mining rights.

 

The provisions of the NewMinerals Act provide that a mining or prospecting right granted under the NewMinerals Act could be cancelled if the mineral to which such mining rightrelates is not mined at an “optimal” rate. Furthermore, royalties not payableunder the old legislation may become payable to the State. See “— The RoyaltyBill.”

 

The Mining TitlesRegistration Amendment Act, or the Mining Titles Act, came into force on May 1,2004. The Mining Titles Act provides for the registration of rights grantedunder the New Minerals Act. The Mining Titles Act repeals certain sections ofthe current legislation dealing with the registration of mineral rights,subject to the transitional provisions of the New Minerals Act. Until rightsheld under the previous regime are converted to rights under the New MineralsAct, rights held under the previous regime that become subject to a change inownership during the transition period will not be able to be registered underthe name of the new owner. See “Risk Factors — Gold Fields’ mineral rights inSouth Africa have become subject to new legislation which could imposesignificant costs and burdens — The New Minerals Act.”

 

The New Minerals Actcontains a provision requiring 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. The Mining Charter became effective on May 1,2004.

 

The charter’s statedobjectives are to:

 

•        promote equitable access to South Africa’smineral resources for all the people of South Africa;

•        substantially and meaningfully expandopportunities for HDSAs, including women, to enter the mining and mineralsindustry and to benefit from the exploitation of South Africa’s mineralresources;

•        utilize the existing skills base for theempowerment of HDSAs;

•        expand the skills base of HDSAs in order toserve the community;

•        promote employment and advance the social andeconomic welfare of mining communities and areas supplying mining labor; and

•        promote beneficiation of South Africa’smineral commodities beyond mining and processing, including the production ofconsumer products.

 

The charter clarifies thatit is not the government’s intention to nationalize the mining industry.

 

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To achieve these objectives,the charter requires that mining companies achieve a 15% HDSA ownership ofmining assets within five years and a 26% HDSA ownership of mining assetswithin 10 years by each mining company. Ownership can comprise active involvement,through HDSA controlled companies (where HDSAs own at least 50% plus one shareof the company and have management control), strategic joint ventures orpartnerships (where HDSAs own at least 25% plus one vote of the joint ventureor partnership interest and there is joint management and control) orcollective investment vehicles, the majority ownership of which is HDSA based,or passive involvement, particularly through broad based vehicles like employeestock option plans. The charter envisages measuring progress on transformationof ownership by:

 

•        taking into account, among other things,attributable units of production controlled by HDSAs; 

•        allowing flexibility by credits or offsets,so that, for example, where HDSA participation exceeds any set target in aparticular operation, the excess may be offset against shortfalls in anotheroperation; 

•        taking into account previous empowermentdeals in determining credits and offsets; and 

•        considering special incentives to encouragethe retention by HDSAs of newly acquired equity for a reasonable period. 

 

It is envisaged thattransactions will take place in a transparent manner and for fair market valuewith stakeholders meeting after five years to review progress in achieving the26% target. Under the charter, the mining industry as a whole agrees to assistHDSA companies in securing finance to fund participation in an amount of Rand100 billion over the first five years. Beyond the Rand 100 billioncommitment, HDSA participation will be increased on a willing seller-willingbuyer basis, at fair market value, where the mining companies are not at risk.

 

In addition, the charterrequires, among other things, that mining companies:

 

•        offer every employee the opportunity tobecome functionally literate and numerate by the year 2005; 

•        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; 

•        give HDSAs preferred supplier status, wherepossible, in the procurement of capital goods, services and consumables; and 

•        identify current levels of beneficiation andindicate 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:

 

•        human resource development; 

•        employment equity; 

•        migrant labor; 

•        mine community and rural development; 

•        housing and living conditions; 

•        ownership and joint ventures; 

•        beneficiation; and 

•        reporting. 

 

The scorecard does notindicate the relative significance of each item, nor does it provide aparticular score which an applicant must achieve in order to be in compliancewith the charter and be granted new order rights. The charter, together withthe scorecard, provides a system of “credits” or “offsets” with respect to measuringcompliance with HDSA ownership targets. Offsets may be claimed forbeneficiation activities undertaken or supported by a company above apredetermined “base state,” which has not yet been established for eachmineral. Offsets may also be claimed for continuing effects of previousempowerment transactions.

 

The charter also requiresmining companies to submit annual, audited reports on progress towards theircommitments, as part of an ongoing review process.

 

On March 8, 2004, theshareholders of Gold Fields approved a series of transactions, referred to inthis discussion as the Mvela Transaction, involving the acquisition by MvelaResources of a 15% beneficial interest in the South Africa gold mining assetsof Gold Fields for cash consideration of R4,139 million. See “Operatingand Financial Review and Prospects — Overview — Mvelaphanda Transaction.” TheMvela Transaction is intended to meet the charter’s requirement that miningcompanies achieve a 15% HDSA ownership within five years of the mining chartercoming into effect. There is no guarantee, however, that the Mvela Transactionwill not have a negative effect on the value of Gold Fields’ ordinary shares.In addition, any further adjustment to the ownership structure of Gold Fields’South African mining assets in order to meet the mining charter’s 10 yearHDSA ownership requirement of 26% could have a material adverse effect on thevalue of 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 mining 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 

 

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of financing during thefirst five years of the mining charter’s effectiveness. Moreover, there is noguarantee that any steps Gold Fields has already taken or might take in thefuture will ensure the successful conversion of any or all of its existingmining rights or for the grant of new mining rights or that the terms of anyconversion or grant would not be significantly less favorable to Gold Fieldsthan the terms of its current rights. See “Risk Factors — Gold Fields’ mineralrights in South Africa have become subject to new legislation which couldimpose significant costs and burdens — The New Minerals Act.” Managementbelieves that Gold Fields is well positioned to meet the requirements of themining charter within the prescribed periods.

 

TheRoyalty Bill

 

On March 20, 2003, thedraft Mineral and Petroleum Royalty Bill, or the Royalty Bill, was released forpublic comment. The South African National Treasury subsequently missed an August 1,2003, deadline for submitting a revised draft to the South African Parliamentand, as yet, no revised draft has been submitted or published.

 

The Royalty Bill proposes toimpose a 3% revenue based royalty on the South African gold mining sectorpayable to the South African government. The royalty would be calculated on thebasis of published tradable value or, where no published tradable value isavailable, on an imputed gross sales value of the relevant mineral. The royaltywould be deductible as an expense for income tax purposes as opposed to arebate against income tax. Under the terms of the proposed Royalty Bill, theroyalty is to take effect when companies convert to new order mining rights inaccordance with the New Minerals Act, although the Minister has indicated thatthe royalty is not expected to take effect until the transitional period forthe conversion of mining rights under the New Minerals Act expires. TheMinister of Finance in his Budget Speech in February 2004 indicated thatthe royalty will be based on revenues and will take effect in 2009. The RoyaltyBill is in the process of being drafted and is expected to contain an advalorum royalty on gross sales. If adopted, in either its current or a revisedform, the Royalty Bill could have an adverse effect on Gold Fields’ SouthAfrican operations and therefore an adverse effect on its business, operatingresults and financial condition. See “Key Information — Risk Factors — GoldFields’ mineral rights in South Africa have become subject to new legislationwhich could impose significant costs and burdens — The Royalty Bill.”

 

*LandClaims*

 

Gold Fields’ privately heldland and mineral 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 the payment of justand equitable compensation is granted certain remedies including, but notlimited to:

 

•        restoration of the land claimed with orwithout compensation to the holder;

•        granting of an appropriate right inalternative state-owned land to the claimant; or

•        payment of compensation by the state to theclaimant.

 

If land is restored withoutfair compensation it is possible that a constitutional challenge to therestoration could be successful. Once a notice of a land claim has beenpublished in the Government Gazette the rights of any person in respect of suchland are restricted in that he may not perform certain actions, including, butnot limited to, selling, leasing or developing such land, unless the RegionalLand Claims Commissioner has been given one month’s written notice. TheCommission is obligated to notify the owner of land in respect of which a claimhas been lodged or any other party which might have an interest in a claim. Allclaims were required to be lodged with the Commission by December 31,1998. Although this was the final date for filing claims, many claims lodgedbefore the deadline are still being reviewed and not all parties who aresubject to claims have yet been notified. However, new land claims may only beinstituted after December 31, 1998, if an original claim was filedincorrectly. Gold Fields has not been notified under the Land Claims Act of anyland claims against it but it may be notified of claims in the future. If GoldFields is notified of land claims in the future, these claims could have amaterial adverse effect on Gold Fields’ right to the properties to which theland claims relate. See “Key Information — Risk Factors — Gold Fields’ land andmineral 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 promote restitution to those entitled orwould encourage alternative relief to those not entitled. See “Key Information— Risk Factors — Gold Field’ land and mineral rights in South Africa could besubject to land restitution claims which could impose significant costs andburdens.”

 

*Exchange Controls*

 

South African law providesfor exchange control regulations, which restrict the export of capital from theCommon Monetary Area, comprising South Africa, the Kingdoms of Lesotho andSwaziland and the Republic of Namibia. The exchange control regulations, whichare administered by the SARB, are applied throughout the Common Monetary Areaand regulate transactions involving South African residents, includingcompanies. The basic purpose of exchange controls is to mitigate the decline offoreign capital reserves in South Africa and the devaluation of 

 

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the Rand against othercurrencies, in particular the U.S. dollar. It is anticipated that South Africanexchange controls will continue to operate for the foreseeable future. TheSouth African government has, however, committed itself to gradually relaxingexchange controls and a significant relaxation has occurred in recent years. Itis the stated objective of the authorities to achieve equality of treatmentbetween residents and non-residents in relation to inflows and outflows ofcapital. The gradual approach to the abolition of exchange controls adopted bythe South African government is designed to allow the economy to adjust moresmoothly to the removal of controls that have been in place for a considerableperiod of time.

 

SARB approval is requiredfor Gold Fields and its South African subsidiaries to receive loans from andrepay loans to non-residents of the Common Monetary Area. Repayment ofprincipal and interest on such loans will usually be approved where the paymentis limited to the amount borrowed and a market related rate of interest.

 

Funds raised outside of theCommon Monetary Area by Gold Fields’ non-South African resident subsidiaries(whether through debt or equity) can be used for overseas expansion, subject toany conditions imposed by the SARB. Gold Fields and its South Africansubsidiaries would, however, require SARB approval in order to provideguarantees for the obligations of any of Gold Fields’ subsidiaries with regardto funds obtained from non-residents of the Common Monetary Area. Debt raisedoutside the Common Monetary Area by Gold Fields’ non-South African subsidiariesmust be repaid or serviced by those foreign subsidiaries. Absent SARB approval,income earned in South Africa by Gold Fields and its South African subsidiariescannot be used to repay or service such foreign debts. Also, absent specificSARB approval, income earned by one of Gold Fields foreign subsidiaries cannotbe used to finance the operations of another foreign subsidiary.

 

Transfers of funds fromSouth Africa for the purchase of shares in existing offshore entities or forthe expansion of existing business ventures offshore require Exchange Controlapproval. Under the exchange control regulations, Gold Fields and its SouthAfrican subsidiaries can invest overseas only if the investment meets certaintests, including one of “national interest,” as determined by the SARB.However, consideration will be given to applications submitted to the SARB totransfer funds from South Africa for the purpose of initial foreign expansionand expansion of existing projects.

 

South African companies areallowed to retain outside South Africa foreign dividends declared after October 26,2004. Foreign dividends repatriated to South Africa after that date may beretransferred abroad at any time and be used for any purpose.

 

A listing by a South Africancompany on any stock exchange other than the JSE in connection with raisingcapital needs permission from the SARB. Any such listing which would result ina South African company being redomiciled also needs approval from the Ministerof Finance.

 

Under South African exchangecontrol regulations, Gold Fields must obtain approval from the SARB regardingany capital raising involving a currency other than the Rand. In connectionwith its approval, it is possible that the SARB may impose conditions on GoldFields’ use of the proceeds of any such capital raising, such as limits on GoldFields’ ability to retain the proceeds of the capital raising outside SouthAfrica or requirements that Gold Fields’ seek further SARB approval prior toapplying any such funds to a specific use. Any limitations imposed by the SARBon Gold Fields’ use of the proceeds of a capital raising could adversely affectGold Fields financial and strategic flexibility. See “Key Information — GoldFields’ financial flexibility could be materially constrained by South Africanexchange control regulations.”

 

In his speech to Parliamenttowards at the end of October 2004, the Minister of Finance outlined theSouth African Treasury’s medium term budget policy statement and repeated thatit was the government’s eventual goal to replace all remaining exchangecontrols 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.

 

***Ghana***

 

*Environmental*

 

The laws and regulationsrelating to the environment in Ghana have their roots in the 1992 Constitutionwhich charges both the state and individuals with a duty to take appropriatemeasures to protect and safeguard the natural environment. Mining companies arealso required under the Minerals and Mining Law, 1986 (P.N.D.C. Law 153), tohave due regard to the effect of their operations on the environment and totake steps to prevent pollution of the environment.

 

The principal legislationregulating activities which affect the environment is the EnvironmentalProtection Act, 1994 (Act 490), and the Environmental Assessment Regulations(LI 1652) and related guidelines. Mining operations are required by these lawsto undergo an environmental impact assessment process, to obtain approval foran environmental permit prior to commencing operations and subsequently, aftera period of operation, to submit an environmental management plan for theoperations to obtain an environmental certificate. The laws also require miningoperations to rehabilitate land disturbed as a result of mining operationspursuant to an environmental reclamation plan agreed with the Ghanaianenvironmental authorities. This obligation is included in a reclamationsecurity agreement signed by the mining company and negotiated with theEnvironmental Protection Agency, or EPA, and is secured by posting reclamationbonds and a cash deposit, which serve as a security deposit against default.

 

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In Ghana, environmentalmanagement plans are submitted every three years and include details regardingthe likely impact of the operation on the environment, including localcommunities, as well as a comprehensive plan and timetable for actions tolessen and remediate adverse impacts. Updated reclamation plans are submittedto the EPA every two years with readjustment of the calculated bond. GoldFields Ghana has posted a reclamation bond of $7.4 million representing50% of the liability estimated to have occurred by December 2005.Estimated rehabilitation costs totaling $26.6 million are forecast overthe life of Tarkwa Reclamation bonds are assessed based on 50% of the agreedestimated rehabilitation costs for the two year period after the date of thelast reclamation plan.

 

Gold Fields Ghana has anenvironmental permit for the Tarkwa property. Gold Fields Ghana has been issuedan environmental certificate dated October 27, 2003 which expires on October 26,2006.

 

Gold Fields has implementedenvironmental management systems in compliance with ISO 14001 throughout itsoperations in Ghana and has received full certification under ISO 14000. GoldFields’ operations in Ghana received full ISO 14001 certification in fiscal2003.

 

Following Gold Fieldsbecoming a signatory to the Cyanide Code on November 3, 2005, all itsoperations, including the Ghanaian operations, are committed to complying withthe code. The implementation structure of the code allows the operations up tothree years to have independent, third-party audits conducted to evaluatecompliance status.

 

Abosso has submitted therequired environmental management plans and reclamation plans and is incompliance with all permit, certificate and reclamation requirements. Anenvironmental certificate for the Damang mine was issued on October 9,2003 for a two year period to October 8, 2005. On August 24, 2005,Abosso submitted an application supported by an environmental management planfor the years 2005 to 2008 to the EPA for renewal of its environmentalcertificate. Although Gold Fields’ renewal has not yet been granted, GoldFields is not aware of any impediment to the renewal of its environmentalcertificate.

 

Abosso was the first miningcompany 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. An amendedand restated reclamation security agreement for Damang was signed in March 2003.Abosso has posted a reclamation bond of $2.0 million and deposited$200,000 cash to secure the agreement. Estimated rehabilitation costs totaling$6.3 million are forecast over the life of Damang.

 

*Health andSafety*

 

A mine owner is statutorilyobligated to, among other things, take steps to ensure that the mine is managedand worked in accordance with the provisions of the Mining Regulations, 1970L.I. 665, which provide for the safety and proper discipline of the mineworkers. The regulations prescribe the measures to be taken at every miningoperation to ensure the safety and health of mine workers. Additionally, GoldFields is required under the terms of its mining leases to comply with thereasonable instructions of the Chief Inspector of Mines regarding health andsafety on the mine. A violation of the provisions of the health and safetyregulations or failure to comply with the reasonable instructions of the Chief Inspectorof Mines could lead to, among other things, a shut down of all or a portion ofthe mine or the imposition of costly compliance procedures, and, in the case ofa violation of the regulations relating to health and safety, constitutes anoffence. Gold Fields, as the holder of the mining lease, has potentialliability arising from injuries to, or deaths of, workers, including, in somecases, workers employed by its contractors. Although Ghanaian law providesstatutory workers’ compensation for injuries or fatalities to workers, it isnot the exclusive means for workers to claim compensation. Gold Fields’insurance for health and safety claims or the relevant workers’ compensationmay not be adequate to meet the costs which may arise upon any future healthand safety claims. As a result, Gold Fields may suffer adverse consequences.See “Key Information — Risk Factors — Gold Fields’ operations in Ghana aresubject to health and safety regulations which could impose significant costsand burdens.”

 

On September 12, 2003,the National Health Insurance Act, 2003 (Act 650), came into effect. The actrequires every person resident in Ghana to belong to either a public or privatehealth insurance scheme. To fund the National Health Insurance Fund, the actimposes a levy of 2.5% on goods and services produced or provided in, orimported into, Ghana. By the National Health Insurance (Commencement of Levy)Instrument, 2004 (L.I. 1973), the imposition of the levy came into force on August 1,2004. Certain types of machinery used in mining, as well as water and certaintypes of fuel are exempt from the levy. Employers who establish or contributeto a private health insurance scheme are not exempt from payment of the levy.As a result, the imposition of the levy could increase Gold Fields’ costs withrespect to goods and services utilized in Ghana, including labor costs. See “KeyInformation — Risk Factors — Gold Field’s operations in Ghana are subject tohealth and safety regulations which could impose significant costs and burdens.”

 

*MineralRights*

 

Under the Minerals andMining Law 1986 (PNDCL 153), or the Minerals and Mining Law, neither alandowner nor any other person may search for minerals or mine on any landwithout having been granted a mineral right by the Minister responsible formines.

 

Gold Fields Ghana holds fivemining leases in respect of 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

 

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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 of Ghana.Abosso has applied to the Minister responsible for mines for the conversion ofa prospecting licence to a mining lease to allow it to commence mining in itsLima South Pit at Damang.

 

Abosso holds a mining leasein respect of the Damang mine dated April 19, 1995, as amended by anagreement dated April 4, 1996. This lease expires in 2025. As with theTarkwa and Teberebie mining leases, this lease is renewable under its terms andthe provisions of the Minerals and Mining Law by agreement between Abosso andthe government of Ghana.

 

In addition, under Ghanaianlaw, the Tarkwa property mining leases are subject to the ratification ofParliament. The Minerals Commission, the statutory corporation overseeing themining operations on behalf of the government of Ghana, has submitted theTarkwa property leases for parliamentary ratification, but they have not yetbeen ratified. See “Key Information — Risk Factors — Gold Fields’ mineralrights in Ghana are currently subject to regulations, and will become subjectto new regulations, which could impose significant costs and burdens.”

 

The Minerals and MiningBill, or the Minerals Bill, proposing amendments to Ghana’s minerals and mininglaws has been laid before the Ghanaian Parliament. The Minerals Bill, ifpassed, will repeal the Minerals and Mining Law and the amendments to it. Themajor provisions contemplated by the Minerals Bill are as follows:

 

•        applications for the grant of a mineral rightwould be considered on a first come first served basis;

•        the government of Ghana’s right to a 10% freecarried interest in mineral operations will be restricted to mining leases;

•        mineral rights in land over which mineralrights have been granted may not be granted to any other person in respect ofthe same minerals;

•        introduction of a new system for demarcating the land, know as thecadastral system, whereby land would be demarcated in blocks. Under the newsystem a mining lease area may not be less than one block or more than 300contiguous blocks. A block is defined as 21 hectares;

•        mining companies which have invested orintend to invest at least $500 million may benefit from stability anddevelopment agreements, relating to both existing and new operations, whichwill serve to protect holders of current and future mining leases for a periodnot exceeding 15 years against changes in laws and regulations generally and inparticular relating to customs and other duties, levels of payment of taxes,royalties and exchange control provisions, transfer of capital and dividendremittances. A development agreement may contain further provisions relating tothe mineral operations and environment issues. Each stability and developmentagreement will be subject to the ratification of Parliament;

•        provisions requiring the renewal of themining lease once the holder has made an application for renewal pursuant toterms of the lease if the holder is in material compliance with its obligationsunder law and under the lease; and

•        changes to the definition of a “miningcompany.” Under the existing Minerals and Mining Law, a mining company isdefined as a company which or whose subsidiary is the holder of a mining lease.The Minerals Bill proposes to define a mining company as “a company which orwhose subsidiary is the holder of a mineral right” (which includes prospectingand reconnaissance licence holders) and will exclude companies listed on astock exchange and companies whose holding in mining companies or whosesubsidiary’s assets are less than 50% of the market value of their totalassets. The effect of this re-definition appears to be that prospecting orreconnaissance licence holders as well as mining lease holders would berequired to notify the Minister responsible for mines of changes in control.Additionally, similar to its rights currently in respect of companies holdingmining licenses, the government of Ghana would be entitled to a “special share”in prospecting or reconnaissance licence holders. See “— Government Option toAcquire Shares of Mining Companies.”

 

The Minerals Bill providesthat leases, permits and licences granted or issued under the repealed enactmentswill continue under those laws unless the Minister responsible for minerals byregulation provides otherwise.

 

A license is required forthe export, sale or other disposal of minerals and the permission of the ChiefInspector of Mines is required to remove minerals obtained by the holder of amineral right. Under Ghanaian law, the government has the right to compel thesale to it of all mineral rights obtained in Ghana and all products derivedfrom the refining or treatment of minerals. However, the current projectdevelopment agreement between, among others, Gold Fields Guernsey Limited 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 toexercise these pre-emption rights for as long as Abosso follows the procedurefor marketing its products as may be approved by the Bank of Ghana acting onthe advice of the Minerals Commission.

 

Under the provisions of theMinerals and Mining Law, the size of an area in respect of which a mining leasemay be granted cannot exceed 50 square kilometers for any single grant or 150square kilometers in the aggregate for any company. Gold Fields Ghana’s miningleases cover approximately 207 square kilometers and Abosso’s mining leasecovers approximately 52 square kilometers. Gold Fields Ghana is currentlydiscussing a development agreement with the Ghanaian government which wouldpermit it to hold all its current land.

 

*RecentFiscal Measures*

 

The Ghanaian elections of2000 resulted in the principal opposition party winning and therefore formingthe present government which was re-elected in 2004. Since this government cameinto power it has passed legislation imposing a national reconstruction levyfor the calendar years 

 

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2001 and 2002, which in thecase of mining companies is 2.5% of operating profit. This levy was extendedfor the calendar years 2003, 2004 and 2005. Additionally the current Ghanagovernment has introduced measures imposing levies on mining equipmentpreviously exempt from customs duty.

 

In January 2005, theGhana budget statement reduced the corporate tax rate from 32.5% to 28% and thenational reconstruction levy from 2.5% to 1.5%. There have been someindications that for 2006 the corporate tax rate may be reduced to 25% and thenational reconstruction levy may be eliminated.

 

*GovernmentOption to Acquire Shares of Mining Companies*

 

Under Ghanaian law, thegovernment is entitled to a 10% interest in any Ghanaian company which holdsmineral rights in Ghana without the payment of compensation. The government ofGhana has already received this 10% interest in each of Gold Fields Ghana andAbosso. The government also has the option of acquiring an additional 20%interest in the share capital of mining companies at a price agreed upon by theparties, at the fair market value at the time the option is exercised, or asmay be determined by international arbitration. The government of Ghanaexercised this option for Gold Fields Ghana, and subsequently transferred theinterest, which now forms part of the IAMGold interest in Gold Fields Ghana.The Government of Ghana retains this option to purchase an additional 20% ofthe share capital of Abosso. As far as management is aware, the government ofGhana has not exercised this option for any other gold mining company in thepast.

 

Under the Minerals andMining Law, the government has a further option to acquire a “special share” ina mining company for no consideration or in exchange for such consideration asthe government and that company shall agree. This interest, when acquired,constitutes a special share which gives the government the right to attend andspeak at any general meeting of shareholders, but does not entitle thegovernment to any voting rights. The special share does not entitle thegovernment to distributions of profits of the company which issues it to thegovernment. The written consent of the government is required to make anyamendment to a company’s articles of incorporation relating to the government’soption to acquire a special share. Although the government of Ghana has agreednot to exercise this option for Gold Fields Ghana, it has retained this optionfor Abosso.

 

*ExchangeControls*

 

Ghana’s exchange controllaws require permission from the Ghanaian authorities for transactionsinvolving foreign currency. Under a foreign exchange retention accountagreement with the government of Ghana, Gold Fields Ghana is required torepatriate 20% of its revenues derived from the Tarkwa mine to Ghana and usethe repatriated revenues in Ghana or maintain them in a Ghanaian bank account.Abosso is currently obligated to repatriate 25% of its revenue to Ghana,although the level of repatriation under the deed of warranty between Abossoand the government of Ghana is subject to renegotiation every two years. Themost recent negotiations were concluded in February 2003. While managementhas no reason to believe that the repatriation level will increase as a resultof the next set of negotiations, there is no agreed ceiling on the repatriationlevel, and it could be increased. Any increase could adversely affect GoldFields’ ability to use the cash flow from the Damang mine outside Ghana,including to fund working costs and capital expenditures at other operations,to provide funds for acquisitions and to repay principal and interest onindebtedness.

 

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 nationalgovernment retains the power to regulate activities which impact upon mattersof national environmental significance, the Constitution vests the power tolegislate environmental matters principally in the states. Gold Fields’ goldoperations in Australia are primarily subject to the environmental laws andregulations of the State of Western Australia. The Western AustraliaEnvironmental Protection Act 1986 and Mining Act require, among other things,that Gold Fields obtain environmental licenses, work approvals and mininglicenses to begin mining operations.

 

During the operational lifeof its mines, Gold Fields is required by law to make provisions for the ongoingrehabilitation of its mines and to provide for the cost of post-closurerehabilitation and monitoring once mining operations cease. Gold Fieldsguarantees its environmental obligations by providing the Western Australiangovernment with unconditional bank-guaranteed performance bonds. However, thesebonds 

 

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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 Act2003 is expected to come into effect in late 2005. This legislation willrequire Gold Fields to report known or suspected contaminated sites. GoldFields may also be required to remediate an affected site if there iscontamination that is likely to cause harm to human health or the environment.The government of Western Australia recently amended the EnvironmentalProtection Act 1986 to create new offenses in relation to environmental harm(some of which provide for strict liability) and other obligations with whichGold Fields must comply. One of the purposes for these amendments is to broadenthe Department of Environmental Protection’s power to prosecute forenvironmental harms. As a result, Gold Fields’ exposure to prosecution forenvironmental harms may be increased. Further, as a result of these changes,Gold Fields’ environmental duties and responsibilities will be increased, whichcould impose significant costs and burdens. See “Key Information — Risk Factors— Gold Fields’ operations in Australia are subject to environmental regulationswhich could impose significant costs and burdens.”

 

Following Gold Fieldsbecoming a signatory to the Cyanide Code on November 3, 2005, all itsoperations, including the Australian operations, are committed to complyingwith the code. The implementation structure of the code allows the operationsup to three years to have independent, third-party audits conducted to evaluatecompliance status.

 

*Health andSafety*

 

The Western Australia MinesSafety and Inspection Act 1994 (WA), or the Safety and Inspection Act,regulates the duties of employers and employees in the mining industry withregard to occupational health and safety and outlines offenses and penaltiesfor breach. The regulations prescribe specific measures and provide forinspectors to review the work site for hazards and violations of the health andsafety requirements. A violation of the health and safety laws or failure tocomply with the instructions of the relevant health and safety authoritiescould lead to, among other things, a temporary shut down of all or a portion ofthe mine, a loss of the right to mine or the imposition of costly complianceprocedures. However, mine owner liability for contractors’ employees and laborhire employees under the Safety and Inspection Act extends only to matters overwhich the employer has the capacity to exercise control. See “Key Information —Risk Factors — Gold Fields’ operations in Australia are subject to health andsafety regulations which could impose significant costs and burdens.”

 

The Safety andInspection Act was amended in April 2005 and the changes include:

 

•        a new regimeof penalties characterized by significant increases (particularly in relationto companies), higher penalties for repeat offenses, and new offenses ofcausing 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 

•        a new dutyof care imposed on employers with respect to residential accommodation suppliedin connection with employment.

 

The effect of the amendments is that GoldFields’ exposure to prosecution has increased, as has the cost of health andsafety compliance of Gold Fields’ mining operations in Australia.

 

*MineralRights*

 

In Australia, the ownershipof land is separate from the ownership of most minerals, which are the propertyof the states and are thus regulated by the state governments. The WesternAustralian Mining Act 1978 (WA), or the Mining Act, is the principal piece oflegislation governing exploration and mining on land in Western Australia.Licenses and leases for, among other things, prospecting, exploration andmining must be obtained pursuant to the requirements of the Mining Act beforethe relevant activity can begin. Application fees and rental payments arepayable in respect of each mining tenement.

 

Prospecting licenses,exploration licenses and mining leases are subject to prescribed minimum annualexpenditure commitments. Royalties are payable to the state based on the amountof ore produced or obtained from a mining tenement. A monthly production reportmust be filed and royalties 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.

 

*LandClaims*

 

In 1992, the High Court ofAustralia recognized a form of native title which protects the rights ofindigenous people in relation to land in certain circumstances. As a result ofthis decision, the Native Title Act 1993 (Cth), or Native Title Act, wasenacted to recognize and protect existing native title by providing a mechanismfor the determination of native title claims and a statutory right forAboriginal groups or persons to negotiate, object, and/or be consulted when,among other things, there is an expansion of, or change to, the rights andinterests in the land 

 

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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 notnecessarily extinguish all native title, but do extinguish the native titlerights with which they conflict. The right of native title holders to controlaccess to land is extinguished by a mining lease in Western Australia. However,mining leases may not extinguish other native title rights. Therefore, somenative title rights may co-exist with the rights granted under a mining lease.Compensation could be payable for rights lost by native title holders on thegrant of a mining lease. In addition, negotiations with native title applicantsare generally necessary before a new mining lease will be granted by the stateand these can be time consuming and costly.

 

It is possible that landcomprised in seven of Gold Fields’ existing tenements could be at risk due tonative title claims, because those particular tenements may have been grantedby the State of Western Australia in a manner contrary to the Native Title Act.Although the validity of those seven tenements is in question, Gold Fields’management does not believe those tenements are material to its Australianoperation.

 

The Aboriginal heritage lawsprotect 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 “Key Information — Risk Factors — GoldFields’ tenements in Australia are subject to native title claims andAboriginal heritage sites which could impose significant costs and burdens.”

 

**Property**

 

Gold Fields’ operations asof June 30, 2005 comprised the following:

 

| **Gold Fields’ operative mining areas as  of June 30, 2005** |
|------------------------------------------------------------------------|
| **Operation**                                                          | ** ** | **Size** |
| Driefontein                                                            |   | 8,594 hectares |
| Kloof                                                                  |   | 20,087 hectares |
| Beatrix                                                                |   | 16,821 hectares |
| Ghana                                                                  |   |   |
| Tarkwa                                                                 |   | 20,825 hectares |
| Damang                                                                 |   | 5,239 hectares |
| Australia                                                              |   |   |
| St. Ives                                                               |   | 87,363 hectares |
| Agnew                                                                  |   | 59,272 hectares |

 

Gold Fields leases itscorporate headquarters in Johannesburg.

 

As discussed earlier, theNew Minerals Act came into operation on May 1, 2004 and vests the right toprospect and mine in the state with administration by the government of SouthAfrica.

 

The transitional provisionsof the New Minerals Act phase out existing rights to prospect and mine grantedunder the old legislation. Gold Fields owned substantially all of the mineralrights under the previous regime for which it has mining authorizations underthat regime. Gold Fields is in the process of applying for conversion of itsmineral rights into mining rights under the New Minerals Act. Although GoldFields has not yet received its mining rights under the New Minerals Act, itbelieves it is in compliance with the criteria for such rights and expects therights to be issued in fiscal 2006. Gold Fields has submitted its applicationsfor the conversion of the mineral rights for Driefontein, Beatrix and Kloofunder the New Minerals Act. Gold Fields also owns most of the surface rightswith respect 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— South Africa — Mineral Rights.”

 

Gold Fields Ghana obtainedthe mining rights for the Tarkwa property from the government of Ghana in 1993.In August 2000, with the consent of the government of Ghana, Gold FieldsGhana was assigned the mining rights for the northern portion of the Teberebieproperty. The Tarkwa rights expire in 2027, while the Teberebie rights expirein 2018. Abosso holds the right to mine at the Damang property under a mininglease from the government of Ghana which expires in 2025. Gold Fields mayexploit all surface and underground gold at all three sites until the rightsexpire, provided that Gold Fields pays the government of Ghana a royalty whichis calculated on the basis of a formula which ranges from 3% to 12% of revenuesderived from mining at the sites. For fiscal 2005, this formula resulted inGold Fields Ghana paying royalties 

 

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equivalent to approximately3% of the revenues from gold produced at the Tarkwa and Teberebie properties,and Abosso paying approximately 3% of the revenues from gold produced at theDamang property.

 

In Australia, mining rightsand property are leased from the state. Australian mining leases have aninitial term of 21 years with one automatic 21-year renewal period andthereafter an indefinite number of 21-year renewals with government approval.Gold Fields pays a royalty to the state of 2.5% of revenues from gold producedat St. Ives and Agnew.

 

Gold Fields also holds explorationtenements covering a total of approximately 22.5 million hectares(excluding mining leases and the Cerro Corona exploration leases) in variouscountries, including China, Indonesia, Finland, South Africa, Ghana andAustralia. Gold Fields’ ownership interests in these sites vary with itsparticipation interests in the relevant exploration projects. See “—Exploration.”

 

Gold Fields holds title tonumerous non-mining properties in South Africa, including buildings, shops,farmland and hospitals. In addition, Gold Fields controls, directly andindirectly, approximately 66,000 hectares of land in the West Wits region,including, among other things, a nature reserve, wetlands and a golf course.

 

**Researchand Development**

 

Gold Fields undertakes variousresearch and development projects relating to gold production technology andpotential uses of gold. In particular, Gold Fields has developed a patentedtechnology called Biox ® through its wholly-owned Swiss subsidiaryBiomin Technologies S.A. Biox ® involves a process by which bacteriareleases gold from sulfide bearing gold ore to permit more economical recoveryof the gold. During fiscal 2004, Gold Fields reevaluated the potential futureincome arising from existing and possible new contracts for Biox ®,and as a result reduced the carrying value of the patent. See “Operating andFinancial Review and Prospects — Years ended June 20, 2004 and 2003 —Impairment of assets.”

 

GoldFields is also participating, along with AngloGold Limited and Mintek, as wellas other partners, in Project AuTek. Project AuTek involves research into anddevelopment of new industrial applications for gold and gold alloys. GoldFields is also involved in a project called Future Mine with a consortium ofother mining companies. The project is focused on researching and developingadvanced technologies with applications for underground mining.

 

**LegalProceedings**

 

Gold Fields is not a party to any material legal orarbitration proceedings, nor is any of its property the subject of pendingmaterial legal proceedings.

 

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**Glossary of Mining Terms**

 

Thefollowing explanations are not intended as technical definitions, but ratherare intended to assist the reader in understanding some of the terms used inthis annual report.

 

**Absorption,desorption and recovery (AD&R):**a treatment process involving the extraction of gold in solution usingactivated carbon, followed by removal of the gold from the carbon.

 

**Agglomeration:**a method ofconcentrating gold based on its adhesive characteristics.

 

**Backfill:**material, generally sourced from tailings orwaste rock, used to refill mined-out areas to increase the long term stabilityof mines and mitigate the effects of seismicity.

 

**Calloption:**a contract whichprovides the owner with the right, but not the obligation, to purchase an assetat a specified price on or before a specified date.

 

**Carbonabsorption:**atreatment process which uses activated carbon to remove gold in solution.

 

**Carbon inleach (CIL):**aprocess similar to CIP (described below) except that the ore slurries are notleached with cyanide prior to carbon loading. Instead, the leaching and carbonloading occur simultaneously.

 

**Carbon inpulp (CIP):**a commonprocess used to extract gold from cyanide leach slurries. The process consistsof carbon granules suspended in the slurry and flowing counter-current to theprocess slurry in multiple-staged agitated tanks. The process slurry, which hasbeen leached with cyanide prior to the CIP process, contains soluble gold. Thesoluble gold is absorbed onto the carbon granules which are subsequentlyseparated from the slurry by screening. The gold is then recovered from thecarbon by electrowinning onto steel wool cathodes or by a similar process.

 

**Cleaning:**the process of removing broken rock from amine.

 

**Closelyspaced dip pillar mining method:**a mining method where support pillars are left in place at relativelyclose intervals to increase the stability of the mine. Mining is conductedusing conventional drilling and blasting techniques.

 

**Comminution:**the breaking,crushing or grinding of ore by mechanical means.

 

**Crosscut:**a mine working driven horizontally and atright angles to a level.

 

**Cut-offgrade:**the gradewhich distinguishes the material within the orebody that is to be extracted andtreated from the remainder. See also “— Paylimit.”

 

**Decline orIncline:**a slopingunderground opening for machine access from the surface to an underground mineor from level to level in a mine. Declines and inclines are often driven in aspiral to access different elevations in the mine.

 

**Depletion:**the decrease in quantity of ore in a depositor property resulting from extraction or production.

 

**Development:**activities (includingshaft sinking and on-reef and off-reef tunneling) required to prepare formining activities and maintain a planned production level and those costsincurred to enable the conversion of mineralization to reserves.

 

**Developmentend:**the end of anunderground excavation or tunnel.

 

**Dilution:**the mixing of waste rock with ore, resultingin a decrease in the overall grade.

 

**Dissolution:**the process whereby ametal is dissolved and becomes amenable to separation from the gangue material.

 

**Electrowinning:**the process ofremoving gold from solution by the action of electric currents.

 

**Elution:**removal of the gold from the activatedcarbon.

 

**Exploration:**activities associatedwith ascertaining the existence, location, extent or quality of mineralization,including economic and technical evaluations of mineralization.

 

**Flotation:**the process whereby certain chemicals areadded to the material fed to the leach circuit in order to float the desiredminerals to produce a concentrate of the mineral to be processed. This processcan be carried out in column floatation cells.

 

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**Footwall:**the area below a geological feature.

 

**Forwardsale contract:**thesale of a specified quantity of an asset at a future specified date at a fixedprice.

 

**Gangue:**commercially valueless material remainingafter ore extraction from rock.

 

**Gold inprocess:**gold in theprocessing circuit that is expected to be recovered during or after operations.

 

**Goldreserves:**the goldcontained within proven and probable reserves on the basis of recoverablematerial (reported as mill delivered tonnes and head grade).

 

**Grade:**the quantity of metal per unit mass of oreexpressed as a percentage or, for gold, as grams of gold per tonne of ore.

 

**Greenfield:**a potential miningsite of unknown quality.

 

**Grinding:**reducing rock to the consistency of fine sandby crushing and abrading in a rotating steel grinding mill.

 

**Head grade:**the grade of the oreas delivered to the metallurgical plant.

 

**Heapleaching:**arelatively low cost technique for extracting metals from ore by percolatingleaching solutions through heaps of ore placed on impervious pads. Generallyused on low-grade ores.

 

**In situ:**within unbroken rock or still in the ground.

 

**Jig:**a rock drill mounted on a bar which can bemoved up and down quickly. Used in the stope for drilling holes parallel toeach other.

 

**Jumbo cutand mullock fill mining method:**a mining method using a Jumbo multi-head drilling rig and waste rock,or mullock, as opposed to tailings, as backfill.

 

**Leaching:**dissolution of gold from the crushed andmilled material, including reclaimed slime, for absorption and concentration onto the activated carbon.

 

**Level:**the workings or tunnels of an undergroundmine which are on the same horizontal plane.

 

**Life ofmine, or LoM:**the expectedremaining years of production, based on production rates and ore reserves.

 

**Londonafternoon fixing price:**theafternoon session open fixing of the gold price which takes place daily inLondon and is set by a board comprising five financial institutions.

 

**Londonmorning fixing price:**themorning session open fixing of the gold price which takes place daily in Londonand is set by a board comprising five financial institutions.

 

**Longwallmining method:**amining method involving mining over large continuous spans without the use ofpillars.

 

**Mark-to-market:**the current fairvalue of a derivative based on current market prices, or to calculate thecurrent fair value of a derivative based on current market prices, as the casemay be.

 

**Measures:**conversion factors from metric units to U.S.units are provided below.

 
| **Metric  unit**     | ** ** | ** ** | ** ** | **U.S. equivalent**              |
|----------------------|------------|------------|------------|----------------------------------|
| 1 tonne              |       | = 1 t      |       | = 1.10231 short tons             |
| 1 gram               |       | = 1 g      |       | = 0.03215 ounces                 |
| 1 gram per tonne     |       | = 1 g/t    |       | = 0.02917 ounces per short  ton  |
| 1 kilogram per tonne |       | = 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 processingplant used to treat ore and extract the contained gold.

 

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**Metallurgicalrecovery factor:**theproportion of metal in the one delivered to the mill, that is recovered by themetallurgical process or processes.

 

**Metallurgy:**in the context ofthis document, the science of extracting metals from ores and preparing themfor sale.

 

**Milldelivered tonnes:**aquantity, expressed in tonnes, of ore delivered to the metallurgical plant.

 

**Milling/mill:**the comminution of theore, although the term has come to cover the broad range of machinery insidethe treatment plant where the gold is separated from the ore.

 

**Mine callfactor:**the ratio,expressed as a percentage, of the specific product recovered at the mill (plusresidue) to the specific product contained in an orebody calculated based on anoperation’s measuring and valuation methods.

 

**Mineralization:**the presence of atarget mineral in a mass of host rock.

 

**Net smelterreturn:**the volume ofrefined gold sold during the relevant period multiplied by the average spotgold price and the average exchange rate for the period, less refining,transport and insurance costs.

 

**Openpit/open cut:**miningin which the ore is extracted from a pit. The geometry of the pit may vary withthe characteristics of the orebody.

 

**Ore:**a mixture of material containing mineralsfrom which at least one of the minerals can be mined and processed at aneconomic profit.

 

**Orebody:**a well defined mass of material of sufficientmineral content to make extraction economically viable.

 

**Ore grade:**the average amount of gold contained in atonne of gold bearing ore expressed in grams per tonne.

 

**Orereserves or reserves:**thatpart of a mineral deposit which could be economically and legally extracted orproduced at the time of the reserve determination.

 

**Ounce:**one Troy ounce, which equals 31.1035 grams.

 

**Overburden:**the soil and rockthat must be removed in order to expose an ore deposit.

 

**Paylimit:**the value at which the orebody can be minedwithout profit or loss, calculated using an appropriate gold price, productioncosts and recovery factors. See also “— Cut-off grade.”

 

**Payshoot:**a linear to sub-linear zone within a reef forwhich gold grades or accumulations are predominantly above the cut-off grade.

 

**Paytrend:**an ore zone which occurs in a specificdirection and which has a concentration of minerals that is above the averageconcentration of minerals in the orebody.

 

**Probablereserves:**reservesfor which quantity and grade and/or quality are computed from informationsimilar to that used for proven reserves, but the sites for inspection,sampling, and measurement are farther apart or are otherwise less adequatelyspaced. The degree of assurance, although lower than that for proven reserves,is high enough to assume continuity between points of observation.

 

**Productionstockpile:**theselective accumulation of low grade material which is actively managed as partof the current mining operations.

 

**Prospect:**to investigate a site with insufficient dataavailable on mineralization to determine if minerals are economicallyrecoverable.

 

**Prospectingpermit or right:**permissionto explore an area for minerals.

 

**Provenreserves:**reservesfor which: (1) quantity is computed from dimensions revealed in outcrops,trenches, workings or drill holes; grade and/or quality are computed from theresults of detailed sampling; and (2) the sites for inspection, samplingand measurement are spaced so closely and the geologic character is so welldefined that size, shape, depth and mineral content of reserves arewell-established.

 

**Pumpcell:**a carbon absorption process whereby gold insolution is absorbed onto activated carbon.

 

**Reef:**a gold-bearing sedimentary horizon, normallya conglomerate band, that may contain economic levels of gold.

 

**Refining:**the final stage of metal production in whichfinal impurities are removed from the molten metal by introducing air andfluxes. The impurities are removed as gases or slag.

 

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**Rehabilitation:**the process ofrestoring mined land to a condition approximating its original state.

 

**Remnantpillar mining:**theremoval of blocks of ground previously left behind for various reasons duringthe normal course of mining.

 

**Rock burst:**an event caused byseismicity which results in damage to underground workings and/or loss of lifeand equipment.

 

**Rock dump:**the historical accumulation of low gradematerial derived in the course of mining which is processed in order to takeadvantage of spare processing capacity.

 

**Run of Mine(RoM):**a loose termto describe ore of average grade.

 

**Sampling:**taking small pieces of rock at intervalsalong exposed mineralization for assay (to determine the mineral content).

 

**Scatteredmining method:**conventionalmining which is applied in a non-systematic configuration.

 

**Seismicity:**a sudden movementwithin a given volume of rock that radiates detectable seismic waves. Theamplitude and frequency of seismic waves radiated from such a source depend, ingeneral, on the strength and state of stress of the rock, the size of thesource of seismic radiation, and the magnitude and the rate at which the rockmoves during the fracturing process. Rock bursts, as defined above, involveseismicity.

 

**SAG ballcrushing (SABC) mill:**a comminution process in which a SAG mill is used in conjunction with aball mill and a crushing circuit.

 

**Semi-autogenousgrinding (SAG) mill:**a piece of machinery used to crush and grind ore which uses a mixtureof steel balls and the ore itself to achieve comminution. The mill is shapedlike a cylinder causing the grinding media and the ore itself to impact uponthe ore.

 

**Shaft:**a shaft provides principal access to theunderground workings for transporting personnel, equipment, supplies, ore andwaste. A shaft is also used for ventilation and as an auxiliary exit. It may beequipped with a surface hoist system that lowers and raises conveyances formen, materials and ore in the shaft. A shaft generally has more than oneconveyancing compartment.

 

**Slimes:**the finer fraction of tailings dischargedfrom a processing plant after the valuable minerals have been recovered.

 

**Slurry:**a fluid comprising fine solids suspended in asolution (generally water containing additives).

 

**Smelting:**thermal processing whereby molten metal isliberated from beneficiated ore or concentrate with impurities separating aslighter slag.

 

**Spot price:**the current price ofa metal for immediate delivery.

 

**Stockpile:**a store of unprocessed ore.

 

**Stope:**the underground excavation within the orebodywhere the main gold production takes place.

 

**Stripping:**the process of removing overburden to mineore.

 

**Strippingratio:**the number ofunits of overburden which must be removed in order to mine one unit of ore.

 

**Sulfide:**a mineral characterized by the linkages ofsulfur with a metal or semi-metal, such as pyrite (iron sulfide). Also a zonein which sulfide minerals occur.

 

**Sweeping:**the clean-up of residual ore in a mine leftbehind during the normal cleaning operations.

 

**Tailings:**finely ground rock from which valuableminerals have been extracted by milling.

 

**Tailingsdam/slimes dam:**damsor dumps created from tailings or slimes.

 

**Tonnage:**quantities where the ton or tonne is anappropriate unit of measure. Typically used to measure reserves of gold-bearingmaterial in situ or quantities of ore and waste material mined, transported ormilled.

 

**Tonne:**one tonne is equal to 1,000 kilograms (alsoknown as a “metric” ton).

 

**Total cashcosts per ounce:**ameasure of the average cost of producing an ounce of gold, calculated bydividing the total cash costs in a period by the total gold production over thesame period. Total cash costs 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

 

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associationfees, refinery charges and social development costs), rehabilitation costs,plus royalties and employee termination costs. In determining the total cashcost of different elements of the operations, production overheads areallocated pro rata.

 

**Total production 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.

 

**Uphole bench and fill mining method:**a mining method wherea section of ore is drilled from the level below the section to thelevel above the section, blasted and removed. The void is then filled withwaste rock or tailings to form a working platform for removing the next section ofore.

 

**Uphole open stoping mining method:**a mining method wherea section of ore is drilled from the level below the section to thelevel above the section. Then, vertical “slices” of the section areblasted and removed in succession. The void is not filled at the productionstage, but may be filled with waste rock or tailings once production hasceased.

 

**Waste:**rock mined with an insufficient gold content tojustify processing.

 

**Yield:**the actual grade of ore realized after themining and treatment process.

 

**Zinc precipitation:**a chemical reaction using zinc dust thatconverts gold solution to a solid form for smelting into unrefined gold bars.

 

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**Item 5: OPERATING AND FINANCIALREVIEW 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 “Key Information — RiskFactors” for a discussion of important factors that could cause actual resultsto differ materially from the results described in or implied by theforward-looking statements contained in this annual report.*

 

**Overview**

 

**General**

 

Gold Fields is a significant producer of gold and major holder of goldreserves in South Africa, Ghana and Australia. Gold Fields is primarilyinvolved in underground and surface gold mining and related activities,including exploration, extraction, processing and smelting. Gold Fields iscurrently the second largest gold producer in South Africa, on the basis ofannual production, and one of the largest gold producers in the world. GoldFields is also currently engaged in exploration activities for platinum groupmetals primarily in Finland . In the year ended June 30, 2005, Gold Fieldsproduced 4.5 million ounces of gold, 4.2 million ounces of which wereattributable to Gold Fields, and the remainder of which were attributable tominority shareholders in Gold Fields Ghana Limited, or Gold Fields Ghana, andAbosso Gold Fields Limited, or Abosso. Gold Fields reported attributable gold reservesof 62.8 million ounces as of June 30, 2005 (including 2.4million ounces of proven and probable gold reserves for the Cerro CoronaProject that will be attributable to Gold Fields upon completion of itsacquisition of an 80.7% economic interest in the Cerro Corona Project; see “Informationon the Company — Exploration — Gold Fields’ Exploration Projects — Cerro CoronaProject”).

 

The Gold Fields group holdings evolved through a series oftransactions, 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 mine and a37.3% interest in the Driefontein mine. The transaction involved a purchase ofthe assets and interests held by the three selling companies, as well as offersto the minority shareholders of the three companies holding the Beatrix, Oryxand Kloof mines to acquire their shares in exchange for Original Gold Fieldsshares. Original Gold Fields accounted for the transaction as a purchase.Because Original Gold Fields was formed as a subsidiary of GFSA, the assetsacquired from GFSA were accounted for at the value they had been carried at onGFSA’s books. The assets acquired from Gencor Limited, New Wits Limited and theminority shareholders were accounted for at fair value.

 

With legal effect from January 1,1999, Original Gold Fields was acquired by the company that is today GoldFields. For accounting purposes, Original Gold Fields was fully consolidatedwith effect from June 1, 1999. Although for legal purposes Gold Fieldsacquired Original Gold Fields, for accounting purposes, Original Gold Fieldswas considered the acquiror because the Original Gold Fields shareholdersobtained the majority interest in the enlarged company. As part of thistransaction, the remaining interest in the Driefontein mine came into the GoldFields 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 was4.577 million ounces in fiscal 2003 (4.334 million ounces ofwhich were attributable to Gold Fields with the remainder attributable tominority shareholders in Gold Fields Ghana and Abosso). Total gold productiondecreased to 4.406 million ounces in fiscal 2004 (4.158 millionounces of which were attributable to Gold Fields with the remainderattributable to minority shareholders in Gold Fields Ghana and Abosso). Thisdecrease was due to the closure of two loss making shafts, Kloof Shaft No. 9and Driefontein Shaft No. 10 and the planned reduction of marginal miningat the South African operations. This strategy was due to the sharp reductionin the rand gold price in the latter half of the year. In fiscal 2005 totalgold production increased to 4.488 million ounces (4.219 million ounces ofwhich were attributable to Gold Fields with the remainder attributable tominority shareholders in Gold Fields Ghana and Abosso). This increase wasmainly due to the increase in underground yields at the South Africanoperations, in line with the strategy to reduce marginal mining, and increasedproduction at Tarkwa, in Ghana, following commissioning of a new mill in October 2004.

 

***St. Helena Disposal***

 

On October 30,2002, Gold Fields disposed of the St. Helena gold mining operation to theARMgold/Harmony Freegold Joint Venture Company (Proprietary) Limited, orFreegold, for a gross consideration of Rand 120.0 million and a monthly 1%royalty payment to Gold Fields on the net revenues from gold sales from the St.Helena mine for a period of four years after October 30, 2002.

 

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***Driefontein Mining Area 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. The miningarea can be accessed from the adjacent TauTona mining operation of AngloGold.The sale, which was conditional upon approval by the South African CompetitionCommission, was finalized in January 2004.

 

***Mvelaphanda Transaction***

 

On March 8,2004, the shareholders of Gold Fields approved a series of transactions,referred to in this discussion as the Mvela 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.

 

TheMvela Transaction was preceded by an internal restructuring of Gold Fields,whereby each of the Driefontein, Kloof and Beatrix mining operations, as wellas certain ancillary assets and operations, were transferred to a new,wholly-owned subsidiary of Gold Fields, GFI Mining South Africa (Proprietary)Limited, or GFIMSA.

 

On November 26,2003, Gold Fields, Mvela Resources, Mvelaphanda Gold (Proprietary) Limited, orMvela Gold, a wholly owned subsidiary of Mvela Resources, and GFIMSA enteredinto a covenants agreement, or the Covenants Agreement, regulating their rightsand obligations with respect to GFIMSA. This agreement became effectivefollowing the advance by Mvela Gold of the loan to GFIMSA described below,which is referred to in this discussion as the Mvela Loan, and, among otherthings, provides for Mvela Gold to nominate two members of GFIMSA’s board ofdirectors and two members of each of GFIMSA’s Operations Committee and TransformationCommittee, the latter of which has been established to monitor compliance withthe mining charter promulgated under the Mineral and Petroleum ResourcesDevelopment Act 2002. See “Information on the Company — Regulatory andEnvironmental Matters — South Africa — Mineral Rights.” Under the CovenantsAgreement, GFIMSA cannot dispose of any material assets, enter into, cancel oralter any material transaction between GFIMSA and any related party or make anymaterial amendment to its constitutive documents without the prior writtenconsent of Mvela Gold. In addition, if Gold Fields or GFIMSA wants to increasethe interest of black empowerment entities in GFIMSA or in any business orassets of GFIMSA, other than pursuant to an employee share incentive scheme,Gold Fields must offer to Mvela Gold the opportunity to increase its interestin GFIMSA. By its terms, the Covenants Agreement remains in force for so longas Gold Fields remains a shareholder in GFIMSA and Mvela Gold holds the rightto subscribe for 15% of the shares in, or is a shareholder of, GFIMSA, providedthat it terminates if the shares of GFIMSA are listed on the JSE SecuritiesExchange South Africa.

 

On December 11,2003, Gold Fields, GFIMSA, and Mvela Gold entered into a subscription and shareexchange agreement, or the Subscription and Share Exchange Agreement, pursuantto which, upon repayment of the Mvela Loan, Mvela Gold must subscribe forshares equal to 15% of GFIMSA’s outstanding share capital, including the newlyissued shares, for consideration of Rand 4,139 million. In addition, for aperiod of one year after the subscription by Mvela Gold of the GFIMSA shares,each of Gold Fields and Mvela Gold will be entitled to require the exchange ofMvela Gold’s GFIMSA shares for ordinary shares of Gold Fields of an equivalentvalue based on an exchange ratio equal to 15% of a discounted cash flowcalculation as applied to GFIMSA’s operations divided by the same calculationas applied to Gold Fields’ operations, with certain adjustments. In the eventthat the parties do not agree on the number of Gold Fields ordinary shares tobe issued to Mvela Gold in such exchange, then the exchange ratio will bedetermined by an independent merchant bank or investment bank appointed by theparties. Mvela Gold has ceded its rights under the Subscription and ShareExchange Agreement to secure its obligations under certain mezzanine financingit incurred to fund, in part, the Mvela Loan. Mvela Gold is entitled to disposeof the 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 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, Mvela Gold, First Rand Bank Limited, Gold Fields AustraliaPty Limited, or Gold Fields Australia, and Gold Fields Guernsey Limited, orGold Fields Guernsey, entered into a loan agreement, or the Mvela LoanAgreement, pursuant to which Mvela Gold advanced a loan of Rand4,139 million, or the Mvela Loan, to GFIMSA on March 17, 2004. GFIMSAapplied the loan toward funding its acquisition of Gold Fields’ South Africanmining operations and certain ancillary assets and operations as part of theinternal restructuring of Gold Fields. The Mvela Loan has a term of five years,bears interest at a rate of 10.57% per annum and is guaranteed by Gold Fields,Gold Fields Australia and Gold Fields Guernsey. GFIMSA may elect to repay theMvela Loan, together with the present value of the then outstanding interestpayment obligations and the tax payable by Mvela Gold as a result of suchrepayment, at any time starting 12 months after the Mvela Loan wasadvanced. While the Mvela Loan is outstanding, Gold Fields and any of itsmaterial subsidiaries, which is defined as any subsidiary whose gross turnoverin the most recently ended financial year represents more than 5% of theconsolidated gross turnover of Gold Fields and its subsidiaries, may not,subject to certain exceptions, (i) sell, lease, transfer or otherwisedispose of any assets, (ii) enter into any merger or similar transaction,or (iii) encumber its assets. The Mvela Loan will become immediately dueand payable upon the occurrence of any event of default, which includes, amongother things:

 

•                  failure to makepayments of interest or principal;

•                  breach of thecovenants in the agreement or of any material provision of the documentsrelating to the Mvelaphanda Transaction;

 

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•                  any representation orstatement of GFIMSA or any guarantor in the documents relating to the MvelaLoan being incorrect or misleading in a material and adverse way;

•                  default under otherindebtedness of Gold Fields or any of its material subsidiaries in excess ofRand 75 million;

•                  insolvency of GoldFields or any of its material subsidiaries;

•                  failure of GoldFields or any of its material subsidiaries to pay any judgment in excess ofRand 75 million within five days of it becoming due;

•                  governmentexpropriation of Gold Fields or any of its material subsidiaries or theirrespective material assets;

•                  a change in thebusiness, condition or prospects of any guarantor or Gold Fields and itssubsidiaries taken as a whole that is reasonably likely to have a materialadverse effect on the ability of GFIMSA or of any guarantor to perform itsobligations or on the validity or enforceability of any document relating tothe Mvela Loan;

•                  any litigation,arbitration, administrative proceedings or governmental or regulatoryinvestigations or proceedings against Gold Fields or any of its materialsubsidiaries that is reasonably likely to be adversely determined and if sodetermined, could reasonably be expected to have a material adverse effect onthe ability of GFIMSA or any guarantor to perform its obligations or on thevalidity or enforceability of any document relating to the Mvela Loan;

•                  any change in controlof Gold Fields that occurs without the written consent of the agent of theproviders of the commercial bank debt that funded, in part, the Mvela Loan, orthe Senior Agent, where the change in control could reasonably be expected tohave a material adverse effect on the ability of any guarantor to perform itsobligations or on the validity or enforceability of any document relating tothe Mvela Loan; and

•                  GFIMSA ceasing to bea wholly owned subsidiary of Gold Fields.

 

TheMvela Loan was funded by way of commercial bank debt of approximately Rand1,300 million and mezzanine finance of approximately Rand 1,100 million,with the balance of approximately Rand 1,700 million being raised by wayof an international private placement of shares of Mvela Resources. Inconnection with the mezzanine finance, Gold Fields subscribed for preferenceshares in an amount of Rand 200 million in Micawber 325 (Proprietary) Limited,or Micawber, a special purpose entity established by the mezzanine lenders.Further, Gold Fields subscribed for Rand 100 million of the shares issuedby Mvela Resources in the private placement. 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 made by thePIC to Micawber, or the PIC Loan. Interest on the PIC Loan accrues at the rateof 14.25%, is compounded semi-annually and is payable in one lump sum at theend of the term of the loan. Under the terms of the PIC Agreement, the PIC hasthe right to require Gold Fields to assume all its rights and obligations underthe PIC Loan, together with its underlying security, which consists of the PIC’sproportionate share of Mvela Gold’s rights under the Subscription and ShareExchange Agreement and a guarantee of Rand 200 million from Mvela Resources, ata price equal to the value of the principal and interest of the PIC Loan, netof a guarantee fee equal to 3.75% per annum of the value of the principal andinterest of the loan, if, at the time the PIC Loan is due for repayment,Micawber does not repay the loan in full. Whether or not the PIC requires GoldFields to assume its rights and obligations under the PIC Loan, the PIC isobligated to pay the guarantee fee to Gold Fields on the date on which the PICLoan is repaid to the PIC. See “ — Liquidity and Capital Resources — CashResources — Investing” and “ — Credit Facilities — Mvela Loan.”

 

On February 13,2004, the Mvela Loan Agreement was amended, principally in order to add andclarify certain definitions.

 

On November 17,2004, GFL Mining Services Limited, or GFLMSL, Gold Fields, Mvela Gold, MvelaResources and GFIMSA entered into an agreement, referred to in this discussionas the Amendment Agreement, amending the existing agreements relating to theMvelaphanda Transaction, including the Subscription and Share ExchangeAgreement and the Covenants Agreement. Pursuant to the Amendment Agreement, amongother things, (i) GFIMSA agrees not to repay any debt owing, as at thedate on which the Mvela Loan was advanced, to Gold Fields or any subsidiary ofGold Fields that is not a subsidiary of GFIMSA prior to the time Mvela Gold mayexchange its shares in GFIMSA for Gold Fields ordinary shares, pursuant to theSubscription and Share Exchange Agreement, (ii) GFIMSA must utilize 50% ofits free cash flow to pay certain intra-group indebtedness and (iii) MvelaGold will be entitled to not less than 45,000,000 or not more than 55,000,000Gold Fields ordinary shares in the event that GFIMSA shares are exchanged forGold Fields shares pursuant to the Subscription and Share Exchange Agreement.These minimum and maximum numbers of ordinary shares are subject to adjustmentto take account of changes to Gold Fields’ capital structure and certaincorporate activities of Gold Fields. The amendments were approved by the SeniorAgent and by the lenders who provided the commercial bank debt and mezzaninefinance to Mvela Gold to fund, in part, the Mvela Loan.

 

**Strategy**

 

***General***

 

GoldFields is a significant producer of gold and major holder of gold reserves inSouth Africa, Ghana and Australia. Gold Fields also has reported gold andcopper reserves at the Cerro Corona Project, a development project in Peru. Thegold industry has historically been highly fragmented and a trend has beenunderway to consolidate the industry through mergers and acquisitions.

 

***Global Context***

 

GoldFields’ strategy was developed in the context of a global market characterizedby an extended period of low gold prices, reduced global expenditure on goldexploration and increasing industry consolidation. This strategy has evolvedover time, but despite the recent increase in

 

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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 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;

•                  Growing Gold Fieldsby diversifying geographical, technical and product risk through acquiring anddeveloping additional long-life assets. Starting in fiscal 2004, Gold Fields seta goal of achieving an additional 1.5 million ounces of annual gold productionby the end of calendar 2009;

•                  Securing the futureof Gold Fields by earning and maintaining what Gold Fields calls its “licenseto operate” 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.

 

***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,specifically through:

 

•                  Increasingdevelopment rates at the South African operations to provide for ore reserveand mining flexibility

•                  Increasing qualitymining through increasing volumes mined above the paylimit and/or cut-offs andensuring that dilution is minimized. Dilution can be minimized through programsaimed at reducing the quantities of waste mined in the underground and openpits. Quality can be improved through ongoing grade control and optimizing minecall 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;

•                  Investing in costreduction through replacement of older equipment with modern and more efficientequipment;

•                  Reducing coststhrough improving controls over the consumption of materials used on the mines,implementing improved procurement practices and exploring opportunities forglobal and regional supply contracts; and

•                  Improvingefficiencies and controls in areas such as people management, plannedmaintenance, transport and medical facilities.

 

***Acquisitions and Exploration***

 

GoldFields is one of the largest producers of gold in the world based on annualgold production. Gold Fields’ corporate development mandate is to grow as aworld leader in developing and operating low-cost, long life precious metalmines. Gold Fields is sensitive to the fact increased competition foracquisitions and higher gold prices are pushing asset prices to levels thatthreaten returns. The impact on returns has been exacerbated by higher inputcosts, particularly as significant increases in base metal prices has led to increasedmining of base metals, which uses some of the same inputs as gold, andtherefore increased overall demand for those products.

 

Foracquisitions of gold assets or companies outside South Africa, Gold Fields isat somewhat of a disadvantage to certain of its competitors, but this also hasoffsetting strengths. First, South African exchange control regulations limitGold Fields’ ability to provide guarantees or borrow outside South Africawithout express approval from the South African Reserve Bank, or the SARB. However,in his speech to Parliament towards at the end of October 2004, theMinister of Finance outlined the South African Treasury’s medium term budgetpolicy statement and repeated that it was the government’s eventual goal to replaceall remaining exchange controls with prudential benchmarks. He also announcedthe abolition of exchange control limits on new outward foreign directinvestments by South African corporations and the lifting of their obligationto repatriate foreign dividends.  Second,shares of South African companies tend to be viewed as less attractiveacquisition currency than shares of non-South African companies, despite therelaxation of exchange controls. On the other hand, Gold Fields has a strongbalance sheet and low debt-to-equity ratio that diminishes the equity pricingdisadvantage, and also has a skilled and effective corporate evaluation andacquisition team, and a sound track record in project development.

 

GoldFields also maintains an active global exploration effort for gold and PGMsthrough exploration offices worldwide and an exploration philosophy thatmanagement believes is well focused and cost efficient.

 

***Hedging***

 

Generally,Gold Fields does not enter into forward sales, derivatives or other hedgingarrangements to establish a price in advance for future gold production. GoldFields believes that investors in Gold Fields’ shares seek an unlimitedexposure to movements in the U.S. dollar gold price and the resulting effect onGold Fields’ earnings.

 

However,commodity hedges are sometimes undertaken on a project specific basis asfollows:

 

•                  to protect cash flowsat times of significant expenditure;

 

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•                  for specific debtservicing requirements; and

•                  to safeguard theviability of higher cost operations.

 

GoldFields may from time to time establish currency and/or interest rate financialinstruments to protect underlying cash flows or to take advantage of potentialfavorable currency movements.

 

**Revenues**

 

Substantiallyall of Gold Fields’ revenues are derived from the sale of gold. As a result,Gold Fields’ revenues are directly related to the price of gold. Historically,the price of gold has fluctuated widely. The gold price is affected by numerousfactors over which Gold Fields does not have control. See “Key information—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.”

 

Thevolatility of gold prices is illustrated in the following table, which showsthe annual high, low and average of the London afternoon fixing price of goldin U.S. dollars for the past 12 calendar years and to date in calendar year2005:

 

| ** **                             | ** ** | **Price  per ounce** | ** ** |
|----------------------------------------|------------|----------------------|------------|
| **Year**                               | ** ** | **High**             | ** ** | **Low** | ** ** | **Average** | ** ** |
| ** **                             | ** ** | **($)**              | ** ** | **($)** | ** ** | **($)** | ** ** |
| 1993                                   |       | 406                  |       | 326 |   | 360 |   |
| 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 (through November 30,  2005) |       | 496                  |       | 411 |   | 439 |   |

 

*Source: Bloomberg*

 

On November 30,2005, the London afternoon fixing price of gold was $495.65 per ounce.

 

As ageneral rule, Gold Fields sells the gold it produces at market prices to obtainthe maximum benefit from prevailing gold prices and does not enter into hedgingarrangements such as forward sales or derivatives which establish a price inadvance for the sale of its future gold production. However, hedges aresometimes undertaken on a project specific basis as follows: to protectcashflows at times of significant expenditure; for specific debt servicingrequirements; and to safeguard the viability of higher cost operations. See “Quantitativeand Qualitative Disclosure About Market Risk—Commodity PriceSensitivity—Commodity Hedging Policy.”

 

Significantchanges in the price of gold over a sustained period of time may lead GoldFields to increase or decrease its production in the near-term, which couldhave a material impact on Gold Fields’ revenues.

 

**Gold Fields’ realized gold price**

 

Thefollowing table sets out the average, the high and the low London afternoonfixing price of gold and Gold Fields’ average U.S. dollar realized gold priceduring the past three fiscal years:

 
| ** **                                        | ** ** | **Year  ended June 30** | ** ** |
|---------------------------------------------------|------------|------------------------------|------------|
| ** **                                        | ** ** | **2003**                     | ** ** | **2004** | ** ** | **2005** | ** ** |
| ** **                                        | ** ** | **($/oz)**                   | ** ** | **($/oz)** | ** ** | **($/oz)** | ** ** |
| Average                                           |       | 334                          |       | 389 |   | 422 |   |
| High                                              |       | 382                          |       | 427 |   | 454 |   |
| Low                                               |       | 302                          |       | 342 |   | 387 |   |
| Gold Fields’ average realized  gold price(1) |       | 333                          |       | 387 |   | 422 |   |

 

Note:

(1)          Gold Fields’ average realized gold pricediffers from the average gold price due to the timing of its sales of goldwithin each year.

 

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**Costs**

 

Overthe last three fiscal years, Gold Fields’ total cash costs have typically madeup approximately 80% of total costs and consist primarily of labor and, whereapplicable, contractor costs, and consumable stores, which include explosives,timber and other consumables, including diesel fuel and other petroleumproducts.

 

GoldFields’ South African operations are labor intensive due to the use of deeplevel underground mining methods. As a result, over the last three fiscal yearslabor has represented on average approximately 50% of total cash costs at theSouth African operations. At the South African operations, power and water makeup approximately 11% of costs.****At the Ghanaoperations, mining operations at Damang are conducted by an outside contractor,while starting in fiscal 2005, Tarkwa began engaging in owner mining, havingpurchased its own mining equipment which was fully commissioned by September 2004and therefore significantly reducing its use of outside contractors.  Contractor costs represented on average 42% oftotal cash costs at Tarkwa over the last three fiscal years, and 22% of totalcash costs during fiscal 2005. Over the last three fiscal years contractorcosts represented on average 47% of total cash costs at Damang. Direct laborcosts represent on average a further 10% of total cash costs at Tarkwa and 12%in fiscal 2005. Over the last three fiscal years direct labor costs representedon average 8% at Damang. At the Australian operations, mining operations areconducted by outside contractors. Over the last three fiscal years, totalcontractor costs represented on average 61% at Agnew and 74% at St. Ives oftotal cash costs and direct labor costs represented on average a further 26% atAgnew and 12% at St. Ives of total cash costs. For open-pit operations, such asthose at the Ghana and Australia operations, cash costs tend to vary over thelife of the open pit. Initially, cash costs are relatively high because theproportion of waste rock to ore, or stripping ratio, is higher when operationsfirst commence. As an open pit evolves, the stripping ratio and cash cost perounce tend to decrease. Stripping ratios can however increase over the life ofan operation. Gold Fields’ operations in Ghana consume large quantities ofdiesel fuel for the running of its mining fleet. The cost of diesel fuel isdirectly related to the oil price and any movement in the oil price will havean impact on the cost of diesel fuel and therefore the cost of running themining fleet. Over the last three fiscal years, fuel costs have representedapproximately 12% of total cash costs at the Ghana operations. Fuel use isproportionately higher at the Ghana operations than at the South African orAustralian operations because open pit mining in general requires more fuelusage than underground mining and because of the configuration of the Ghanaoperations, including the scale of certain of the open pits and the distancesbetween the pits and the plants. In addition, the strengthening of the Rand andthe Australian dollar against the US dollar over the period has helped toreduce the impact of oil price increases at those operations, whereas fuelprices in Ghana are generally priced in, or indexed to, the US dollars. Inorder to provide some protection against future rises in oil prices, andtherefore in diesel fuel prices, on June 8, 2005, Gold Fields GhanaLimited and Abosso Gold Fields Limited purchased an Asian-style InternationalPetroleum Exchange, or IPE,  Gasoil calloption for one year, expiring May 31, 2006, for a total of 51.6 millionliters at a strike price of US$0.45 per liter. Two thirds of this hedge is for Tarkwaand one third is for Damang. See “Quantitativeand Qualitative Disclosures About Market Risk — Commodity Price Sensitivity,” “ — Commodity Hedging Policy — Oil,”****“ — Commodity Hedging Experience — Oil” and “ — CommodityPrice Contract Position — Oil.”

 

Theremainder of Gold Fields’ total costs consist primarily of amortization anddepreciation, exploration costs, and selling, administration and general andcorporate charges.

 

**Income and Mining Taxes**

 

***South Africa***

 

GoldFields pays taxes on mining income and non-mining income. As a result of theconsolidation of the South African assets into GFIMSA, the mines are no longerseparate tax entities but are treated as a single tax entity except in respectof capital expenditure, which is ring fenced to each mine separately. Theamount of Gold Fields’ mining income tax is calculated on the basis of aformula, which takes into account total revenue and profits from, and capitalexpenditures for, mining operations. Five percent of total mining revenue isexempt from taxation. The amount of revenue subject to taxation is calculatedby subtracting capital expenditures from operating profit, and making certainother minor adjustments to derive taxable income. The amount by which theadjusted profit figure exceeds 5% of total mining revenue constitutes taxablemining income.

 

Thetax rate applicable to the mining and non-mining income of a gold miningcompany depends on whether the company has elected to be exempt from theSecondary Tax on Companies, or STC. STC is a tax on dividends declared, and atpresent the STC tax rate is 12.5% on the net amount of dividends declared. In1993, all existing gold mining companies had the option of electing to beexempt from STC. If the election was made, a higher tax rate would apply forboth mining and non-mining income. In each of fiscal 2004 and 2003 the taxrates for taxable mining income for companies that elected the STC exemptionwere 46%, compared to 37% if the STC exemption election was not made. Forfiscal 2005 these tax rates decreased to 45% for taxable mining and non-miningincome and 35% if the STC exemption election was not made. The non-mining taxrate decreased to 37% in fiscal 2005 from 38% in fiscal 2004. All of GoldFields’ operating subsidiaries in South Africa have elected the STC exemption.However, Gold Fields itself, as a holding company without its own gold miningoperations, is not eligible to be exempt from STC. To the extent Gold Fieldsreceives dividends from any of its South African gold mining subsidiaries, suchreceived dividends are offset against the amount of dividends paid by GoldFields for purposes of calculating the amount subject to the 12.5% STC tax.

 

Duringfiscal 2000, Gold Fields obtained a tax ruling allowing the Beatrix and Oryx(now called Beatrix Shaft No. 4) mines to be treated as one mine forincome tax purposes, with effect from July 1, 1999. As a result of thisarrangement, assessed losses and unredeemed capital

 

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allowancesat the Oryx mine can be utilized against the Beatrix mine’s income, resultingin no mining tax being paid by the combined Beatrix and Oryx tax entity. As aresult of the sale of assets and liabilities of the St. Helena mine, BeatrixMining Ventures Company was liable for excess recoupments tax on the differencebetween the proceeds on the disposal and the assessed losses and unredeemedcapital allowances brought forward.

 

***Ghana***

 

Ghanaianresident companies are subject to tax on the basis of income derived from,accruing in or brought into Ghana. The standard corporate income tax rate iscurrently 28% having been reduced from 32.5% with effect from January 1,2005. As a result, an average rate of 30.25% was applied to fiscal 2005 taxableincome. There is also a reconstruction and development levy, introduced on January 1,2001, of 2.5% on operating profit. The Tarkwa and Damang operations are alsosubject to a 3% gold royalty, which came into effect from July 4, 1986,because the mineral rights are owned by the state. This royalty is included inGold Fields’ income and mining tax benefit/(expense) line item in Gold Fields’consolidated statements of operations.

 

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 the worldwide income (including capital gains) ofall of Gold Fields’ Australian incorporated and tax resident entities. Thecurrent income tax rate for companies is 30%. Exploration costs are deductiblein full as incurred and other capital expenditure is deductible over the livesof the assets acquired. In addition, other expenditures, such as export marketdevelopment, mine closure costs and the defense of native title claims, may bededucted from income. The St. Ives and Agnew operations are also subject to a2.5% gold royalty, which came into effect from July 1, 1998, because themineral rights are owned by the state. This royalty is included in Gold Fields’income and 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

•                  certain other capitalexpenditures.

 

Undercurrent Australian tax law, certain grouping concessions are available tocompanies with the same ultimate head entities. These concessions include theability to group losses and obtain capital gains tax roll over relief from thetransfer of assets. Gold Fields’ subsidiaries in Australia will therefore alsoqualify to transfer losses from one entity to another in the event that a lossis made in any one entity and a profit is generated in another.

 

TheAustralian tax legislation makes provision for companies that consolidate fortax purposes to recalculate their tax values based on a market valuecalculation. This gross up calculation was performed in fiscal 2005 by GoldFields’ subsidiaries in Australia and Gold Fields recorded a net gross up of$26.8 million. This gross-up has been included in the income and mining taxbenefit for fiscal 2005.

 

Withholdingtax is payable on dividends, interest and royalties paid by Australianresidents to non-residents. In the case of dividend payments to non-residents,withholding tax at a rate of 30% will apply. However, where the recipient ofthe dividend is a resident of a country with which Australia has concluded adouble taxation agreement, the rate of withholding tax is generally limited to15% (or 10% where the dividend is paid to a company’s parent company). Wheredividends are paid out of profits that have been subject to Australiancorporate tax there is no withholding tax, regardless of whether a doubletaxation agreement is in place.

 

**Exchange Rates**

 

GoldFields’ South African revenues and costs are very sensitive to the Rand/U.S.dollar exchange rate because revenues are generated using a gold pricedenominated in U.S. dollars, while the costs of the South African operationsare incurred principally in Rand. Depreciation of the Rand against the U.S.dollar reduces Gold Fields’ average costs when they are translated into U.S.dollars, thereby increasing the operating margin of the South Africanoperations. Conversely, appreciation of the Rand results in South Africanoperating costs being translated into U.S. dollars at a lower Rand/U.S. dollarexchange rate, resulting in lower operating margins. The impact onprofitability of any change in the value of the Rand against the U.S. dollarcan be substantial. Furthermore, the exchange rates obtained when convertingU.S. dollars to Rand are set by foreign exchange markets, over which GoldFields has no control. For more information regarding fluctuations in the valueof the Rand against the U.S. dollar, see “Key Information—Exchange Rates.”

 

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Withrespect 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.

 

Withrespect to the Australian operations, Gold Fields expects that the effect offluctuations in the value of the Australian dollar against the U.S. dollar willbe similar to that for the Rand, with weakness in the Australian dollarresulting in improved earnings for Gold Fields and strength in the Australiandollar producing the opposite result. Gold Fields agreed with the lendersproviding the loans for the acquisition of St. Ives and Agnew to manage itsexposure to fluctuations in the value of the Australian dollar against the U.S.dollar by entering into financial instruments that fix the exchange rates for aportion of the expected future revenues from the operations. These financialinstruments were closed out on January 7, 2004. However, in order for theGroup to participate in any future Australian dollar appreciation, a strip ofquarterly maturing Australian dollar/US dollar call options were purchased ofwhich the value dates and amounts matched those of the original structure. See “Quantitativeand Qualitative Disclosures About Market Risk — Foreign Currency HedgingExperience — St. Ives and Agnew Australian Dollar Instruments.” Gold Fieldsaccounts for these financial instruments on a mark-to-market basis, usingexchange rates prevailing at the end of the relevant accounting period. See “Quantitativeand Qualitative Disclosures About Market Risk — Foreign Currency HedgingExperience — Foreign Currency Sensitivity Analysis — St. Ives and Agnew DollarInstruments.”

 

**Inflation**

 

Itis possible that a period of significant inflation in South Africa couldadversely affect Gold Fields’ results and financial condition. However, becausethe majority of Gold Fields’ costs at the South African operations are in Randwhile its revenues from gold sales are in U.S. dollars, the extent to which theRand devalues against the U.S. dollar will offset the impact of South Africaninflation. In Ghana, Gold Fields’ operations are not significantly impacted byGhanaian inflation because a substantial portion of Gold Fields’ costs areeither incurred directly in U.S. dollars or are determined according to aformula by which U.S. dollar amounts are converted into Cedi. Gold Fieldsexpects that the impact of Australian inflation will be similar to that ofSouth Africa.

 

**South African and Ghanaian Economic and Political Environment**

 

GoldFields is a South African company and a substantial portion of its operations,based on gold production, are in South Africa. As a result, Gold Fields issubject to various economic, fiscal, monetary and political policies andfactors that generally affect South African companies. See “KeyInformation—Risk Factors—Political or economic instability in South Africa orregionally may have an adverse effect on Gold Fields’ operations and profits.”

 

SouthAfrican companies, including Gold Fields, are subject to exchange controlrestrictions which require companies to repatriate some or all of its offshoreprofits. While exchange controls have been relaxed in recent years, SouthAfrican companies remain subject to restrictions on their ability to deploycapital outside of the Southern African Common Monetary Area. In particular, inhis speech to Parliament towards at the end of October 2004, the Ministerof Finance outlined the South African Treasury’s medium term budget policystatement and repeated that it was the government’s eventual goal to replaceall remaining exchange controls with prudential benchmarks. He also announcedthe abolition of exchange control limits on new outward foreign directinvestments by South African corporations and the lifting of their obligationto repatriate foreign dividends. An exchange control circular from the SouthAfrican Reserve Bank detailing and regulating the above relaxations is expectedshortly. See “Information on the Company—Regulatory and Environmental Matters—SouthAfrica—Exchange Controls.”

 

GoldFields also has significant operations in Ghana and is therefore subject tovarious economic, fiscal, monetary and political policies and factors thataffect companies operating in Ghana. See “Key Information—RiskFactors—Political or economic instability in Ghana may have an adverse effecton Gold Fields’ operations and profits.” In addition, pursuant to an agreementwhich it has entered into with the Ghanaian government with respect to theTarkwa mine, Gold Fields is required to repatriate at least 20% of the revenuesderived from the Tarkwa mine to Ghana and either use such amounts in Ghana ormaintain them in a Ghanaian bank account. Abosso is currently obligated torepatriate 25% of its revenue to Ghana, although the level of repatriationunder the deed of warranty between Abosso and the government of Ghana issubject to renegotiation every two years. See “Information on the Company —Regulatory and Environmental Matters — Ghana — Mineral Rights.” Although it hasbeen more than two years since the last set of negotiations with the Bank ofGhana regarding the Damang mine’s level of repatriation, the next set ofnegotiations has not been scheduled pending the execution of a new development agreementwith the government of Ghana. Gold Fields currently repatriates approximately40% of revenues from the Ghana operation to Ghana. While management has noreason to believe that the repatriation level will increase as a result of thenext set of negotiations, there is no agreed ceiling on the repatriation level,and it could be increased. Any increase could adversely affect Gold Fields’ability to use the cash flow from the Damang mine outside Ghana, including tofund working costs and capital expenditures at other operations, to providefunds for acquisitions and to repay principal and interest on indebtedness.

 

**Critical Accounting Policies and Estimates**

 

GoldFields’ significant accounting policies are more fully described in note 2 toits audited consolidated financial statements included elsewhere in this annualreport. Some of Gold Fields’ accounting policies require the application ofsignificant judgment and estimates by management that can affect the amountsreported in the financial statements. By their nature, these judgments aresubject to a degree of uncertainty and are based on Gold Fields’ historicalexperience, terms of existing contracts, management’s view on trends in thegold mining industry, information from

 

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outsidesources and other assumptions that Gold Fields considers to be reasonable underthe circumstances. Actual results could differ from these estimates underdifferent assumptions or conditions.

 

Managementbelieves the following significant accounting policies, among others, reflectits more significant judgments and estimates used in the preparation of GoldFields’ consolidated financial statements.

 

***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.

 

***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 expected goldproduction over the lives of Gold Fields’ mines. An item is considered to beproduced at the time it is removed from the mine. The lives of the mines areestimated by Gold Fields’ geology department using interpretations of mineralreserves, as determined in accordance with the SEC’s industry guide number 7.The estimate of the total expected future lives of Gold Fields’ mines could bematerially different from the actual amount of gold mined in the future and theactual lives of the mines due to changes in the factors used in determiningGold Fields’ mineral reserves, such as the gold price and foreign currencyexchange rates. Any change in management’s estimate of the total expectedfuture lives of Gold Fields’ mines would impact the amortization chargerecorded in Gold Fields’ consolidated financial statements.

 

***Impairment of long-lived assets***

 

GoldFields reviews and tests the carrying amounts of assets when events or changesin circumstances suggest that the carrying amount may not be recoverable.Assets are grouped at the lowest level for which identifiable cash flows arelargely independent of the cash flows of other assets and liabilities. Thelowest level at which such cash flows are generated are generally at anindividual operating mine, even if the individual operating mine is included ina larger mine complex.

 

Ifthere are indications that an impairment may have occurred, Gold Fieldsprepares estimates of expected future cash flows for each group of assets.Expected future cash flows are based on a probability-weighted approach appliedto potential outcomes and reflect:

 

•                  Estimated salesproceeds from the production and sale of recoverable ounces of gold containedin proven and probable reserves;

•                  Expected futurecommodity prices and currency exchange rates (considering historical andcurrent prices, price trends and related factors). In impairment assessments conducted in fiscal2005, the Group used an expected future market gold price of $420 per ounce,and expected future market exchange rates of R7.50 to $1.00 and A$1.51 to $1.00;

•                  Expected futureoperating costs and capital expenditures to produce proven and probable goldreserves based on mine plans that assume current plant capacity, but excludethe impact of inflation; and

•                  Expected cash flowsassociated with value beyond proven and probable reserves, which includes theexpected cash outflows required to develop and extract the value beyond provenand probable reserves.

 

GoldFields records a reduction of a group of assets to fair value as a charge toearnings if expected future cash flows are less than the carrying amount. GoldFields estimates fair value by discounting the expected future cash flows usinga discount factor that reflects the risk-free rate of interest for a termconsistent with the period of expected cash flows.

 

Expectedfuture cash flows are inherently uncertain, and could materially change overtime. They are significantly affected by reserve estimates, together witheconomic factors such as gold prices, and currency exchange rates, estimates ofcosts to produce reserves and future sustaining capital.

 

Becauseof the significant capital investment that is required at many mines, if animpairment occurs, it could materially impact earnings. Due to the long-lifenature of many mines, the difference between total estimated undiscounted netcash flows and fair value can be substantial. An impairment is only recordedwhen the carrying amount of a long-lived asset exceeds the total estimatedundiscounted net cash flows. Therefore, although the value of a mine maydecline gradually over multiple reporting periods, the application ofimpairment accounting rules could lead

 

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torecognition of the full amount of the decline in value in one period. Due tothe highly uncertain nature of future cash flows, the determination of when torecord an impairment charge can be very subjective. Management makes thisdetermination using available evidence taking into account current expectationsfor each mining property.

 

Foracquired exploration-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 an explorationstage property, it would probably have minimal value and most of theacquisition cost may have to be written down.

 

GoldFields recorded impairment charges on its long-lived assets amounting to $233.1million in fiscal 2005, $72.7 million in fiscal 2004 and $29.6 million infiscal 2003.

 

***Deferred taxation***

 

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.

 

GoldFields is periodically required to estimate the tax basis of assets andliabilities. Where tax laws and regulations are either unclear or subject tovarying interpretations, it is possible that changes in these estimates couldoccur that materially affect the amounts of deferred income tax assets andliabilities recorded in the consolidated financial statements. Changes indeferred tax assets and liabilities generally have a direct impact on earningsin the period of changes. The most significant estimate is the tax basis ofcertain Australian assets following elections in 2005 under new tax regimes inAustralia. These elections resulted in the revaluation of certain assets inAustralia for income tax purposes. Part of the revalued tax basis of theseassets was estimated based on a valuation completed for tax purposes. Thisvaluation is under review by the Australian Tax Office, or ATO, and the amountfinally accepted by the ATO may differ from the assumption used to measuredeferred tax balances at the end of fiscal 2005. See note 6 to the audited consolidatedfinancial statements which appear elsewhere in this annual report. 

 

***Derivative financial instruments***

 

Thedetermination of the fair value of derivative financial instruments, whenmarked-to-market, takes into account estimates such as interest rates andforeign currency exchange rates under prevailing market conditions, dependingon the nature of the financial derivatives. These estimates may differmaterially from actual interest rates and foreign currency exchange ratesprevailing at the maturity dates of the financial derivatives and, therefore,may materially influence the values assigned to the financial derivatives,which may result in a charge to or an increase in Gold Fields’ earnings throughmaturity of the financial derivatives.

 

***Environmental rehabilitation costs***

 

GoldFields makes provision for environmental rehabilitation costs and relatedliabilities when incurred based on management’s interpretations of currentenvironmental and regulatory requirements. The provisions are recorded bydiscounting the expected cash flows associated with the environmentalrehabilitation using a discount factor that reflects the risk-free rate ofinterest. The principal factors that can cause expected cash flows to changeare: the construction of new processing facilities; changes in the quantitiesof material in reserves and a corresponding change in the life of mine plan;changing ore characteristics that ultimately impact the environment; changes inwater quality that impact the extent of water treatment required; and changesin laws and regulations governing the protection of the environment. Ingeneral, as the end of the mine life becomes nearer, the reliability ofexpected cash flows increases, but earlier in the mine life, the estimation ofrehabilitation liabilities is inherently more subjective. Significant judgmentsand estimates are made when estimating the fair value of rehabilitationliabilities. In addition, expected cash flows relating to rehabilitationliabilities could occur over periods up to the planned life of mine at the timethe estimate is made and the assessment of the extent of environmentalremediation work is highly subjective. While management believes that theenvironmental rehabilitation provisions made are adequate and that theinterpretations applied are appropriate, the amounts estimated for the futureliabilities may, when considering the factors discussed above, differmaterially from the costs that will actually be incurred to rehabilitate GoldFields’ mine sites in the future.

 

***Employee benefits***

 

Management’sdetermination of Gold Fields’ obligation and expense for pension and providentfunds, as well as post-retirement health care

 

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liabilities,depends on the selection of certain assumptions used by actuaries to calculatethe amounts. These assumptions are described in notes 16 and 17 to Gold Fields’consolidated financial statements and include, among others, the discount rate,health care inflation costs and rates of increase in compensation costs. Actualresults that differ from management’s assumptions are accumulated and chargedover future periods, which will generally affect Gold Fields’ recognizedexpense and recorded obligation in future periods. While management believesthat these assumptions are appropriate, significant changes in the assumptionsmay materially affect Gold Fields’ pension and other post retirementobligations as well as future expenses, which will result in an impact onearnings in the periods that the changes in the assumptions occur.

 

**Recent Accounting Pronouncements**

 

In March 2005,the FASB ratified Emerging Issues Task Force, or EITF, Issue No. 04-03, “MiningAssets: Impairment and Business Combinations,” or EITF 04-03. The EITFaddressed the concern that an acquired mining asset may be subject to a day-twoimpairment if the value beyond proven and probable reserves, or VBPP, andanticipated future market price increases are considered in the purchase priceallocation but subsequently excluded in cash flow analysis used in animpairment test performed under FASB Statement No. 144, “Accounting forthe Impairment and Disposal of Long-Lived Assets” (“FAS 144”). The Task Forcereached a consensus that an entity should include VBPP and the effects ofanticipated fluctuations in the market price of minerals in the value allocatedto mining assets in a purchase price allocation, and similarly, include thecash flows associated with VBPP and anticipated fluctuations in the marketprice of gold in estimates of future cash flows (both discounted andundiscounted) used for determining whether a mining asset is impaired under FAS144. The Task Force noted in both cases that estimates should be consistentwith the estimates of a market participant (i.e. the entity should consider allavailable information including current prices, historical averages and forwardpricing curves). The consensus reached by the Task Force was effective forbusiness combinations and asset impairments performed in periods beginningafter March 31, 2004. Accordingly, Gold Fields followed the consensus ofthe EITF in performing its impairment analyses at June 30, 2005.

 

In March 2005,the FASB ratified EITF Issue No. 04-06, “Accounting for Stripping CostsIncurred during Production in the Mining Industry,” or EITF 04-06. EITF 04-06addresses the accounting for stripping costs incurred during the productionstage of a mine and refers to these costs as post-production stripping costs.EITF 04-06 requires that post-production stripping costs be considered costs ofthe extracted minerals and recognized as a component of inventory to berecognized in costs applicable to sales in the same period as the revenue fromthe sale of inventory. As a result, capitalization of post-production strippingcosts is appropriate only to the extent product inventory exists at the end ofa reporting period. The guidance in EITF 04-06 is effective for the firstreporting period in fiscal years beginning after December 15, 2005, withearly adoption permitted. The guidance in the EITF is consistent with GoldFields’ current accounting for stripping costs. As such, Gold Fields does notexpect the adoption of the EITF to have a significant impact on itsconsolidated financial statements.

 

In December 2004,the FASB issued SFAS No. 123R, “Share-Based Payment,” which revised SFAS No. 123,“Accounting for Stock-Based Compensation” and superseded APB Opinion 25, “Accountingfor Stock Issued to Employees” and its related implementation guidance (“APB No. 25”).SFAS No. 123R requires measurement and recording in the financialstatements of the costs of employee services received in exchange for an awardof equity instruments based on the grant-date fair value of the award,recognized over the period during which an employee is required to provideservices in exchange for such award. Gold Fields anticipates adopting theprovisions of SFAS No. 123R on July 1, 2005, using the modifiedprospective method. Accordingly, compensation expense will be recognized forall newly granted awards and awards modified, repurchased, or cancelled after July 1,2005. Compensation cost for the unvested portion of awards that are outstandingas of July 1, 2005 will be recognized rateably over the remaining vestingperiod. The compensation cost for the unvested portion of awards will be basedon the fair value at date of grant as calculated for our pro forma disclosureunder SFAS No. 123. The effect on net (loss) income and (loss) earningsper share in the periods following adoption of SFAS No. 123R are expectedto be consistent with Gold Fields’ pro forma disclosure under SFAS No. 123,except that estimated forfeitures will be considered in the calculation ofcompensation expense under SFAS No. 123R. Additionally, the actual effecton net income and earnings per share will vary depending upon the number andfair value of options granted in future years compared to prior years.

 

**Results of Operations**

 

***Years Ended June 30, 2005 and 2004***

 

*Revenues*

 

Productsales increased by $186.9 million, or 11.0%, from $1,706.2 million in fiscal2004 to $1,893.1 million in fiscal 2005. The increase in product sales was dueto an increase in the average realized gold price of 9.0% from $387 per ouncein fiscal 2004 to $422 per ounce in fiscal 2005 together with an increase ofapproximately 0.082 million ounces, or 1.9%, of total gold sold from 4.406million ounces in fiscal 2004 to 4.488 million ounces in fiscal 2005. Theincrease in ounces sold resulted from an overall increase in production at boththe international and at the South African operations.

 

Theincrease in ounces sold from the South African operations from 2.804 millionounces in fiscal 2004 to 2.824 million ounces in fiscal 2005 resulted from anincrease in underground yields from 7.1 to 7.4 grams per tonne. This was as aresult of the reduction in production from marginal areas and processing of lowgrade surface material, coupled with some increased production from highergrade areas, in line with the change from a high-volume low-grade productionstrategy to a lower-volume higher-grade production strategy to increasemargins. Gold output from Driefontein increased by 21,000 ounces whileproduction at Kloof and Beatrix was unchanged in fiscal 2005 when compared with

 

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fiscal2004. Production at the international operations increased by 3.7% from 1.603million ounces in fiscal 2004 to 1.664 million ounces in fiscal 2005. Asignificant increase in production at Tarkwa resulting from the commissioningof the mill during October 2004 and a smaller increase in production atAgnew more than offset decreases in production at Damang and St. Ives. See “Informationon the Company — Gold Fields Mining Operations.”

 

Differencesbetween total gold sold and total gold produced are due to timing differencesbetween gold production and gold sales.

 

*Costs and Expenses*

 

Thefollowing table sets out Gold Fields’ total ounces produced, weighted averagetotal cash costs and total production costs per ounce for fiscal 2004 and fiscal2005.

 
| ** **         | ** ** | **Fiscal 2004**      | ** ** | **Fiscal 2005**                 | ** ** | ** **                       | ** ** | ** **           | ** ** |
|--------------------|------------|----------------------|------------|---------------------------------|------------|----------------------------------|------------|----------------------|------------|
| ** **         | ** ** | **Gold  Production** | ** ** | **Total cash********costs (1)** | ** ** | **Total  production  costs (2)** | ** ** | **Gold  production** | ** ** | **Total cash  costs (1)** | ** ** | **Total  production  costs (2)** | ** ** | **Percentage  increase/  (decrease) in  unit total cash  costs** | ** ** | **Percentage  increase/(decrease) in  unit total production  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 |   |

 

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Notes:

(1)          Gold Fields has calculated total cash costs perounce by dividing total cash costs, as determined using the guidance providedby the Gold Institute, by gold ounces sold for all periods presented. The GoldInstitute was a non-profit international industry association of miners,refiners, bullion suppliers and manufacturers of gold products, that ceasedoperation in 2002, which developed a uniform format for reporting productioncosts on a per ounce basis. The Gold Institute has now been incorporated intothe National Mining Association. The guidance was first adopted in 1996 andrevised in November 1999. Total cash costs, as defined in the GoldInstitute industry guidance, are production costs as recorded in the statementof operations, less offsite (i.e., central) general and administrative expenses(including head office costs charged to the mines, central training expenses,industry association fees and social development costs), rehabilitation costs,plus royalties and employee termination costs. Changes in total cash costs perounce are affected by operational performance, as well as changes in thecurrency exchange rate between the Rand and Australian dollar  and 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 net income/(loss), income before tax, operating cash flows orany 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 —Glossary of Mining Terms — Total cash costs per ounce.” For a reconciliation ofGold Fields’ production costs to its total cash costs for fiscal 2005, 2004 and2003, see “Operating and Financial Review and Prospects — Results of Operations— Years Ended June 30, 2004 and 2005” and “ — Years Ended June 30,2003 and 2004.”

(2)          Gold Fields has calculated total productioncosts per ounce by dividing total production costs, as determined using theguidance provided by the Gold Institute, by gold ounces sold for all periodspresented. Total production costs, as defined by the Gold Institute industryguidance, 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 and Australiandollar and the U.S. dollar. Management, however, believes that total productioncosts per ounce provides a measure for comparing Gold Fields’ operationalperformance against that of its peer group, both for Gold Fields as a whole,and for its individual operations. Total production costs per ounce is not aU.S. GAAP measure. An investor should not consider total production costs perounce in isolation or as an alternative to net income/(loss), income beforetax, operating cash flows or any other measure of financial performancepresented in accordance with U.S. GAAP. While the Gold Institute has provided adefinition for the calculation of total production costs, the calculation oftotal production costs per ounce may vary significantly among gold miningcompanies, and by

 

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itself does not necessarily provide a basis forcomparison with other gold mining companies. See “Information on the Company —Glossary of Mining Terms — Total production costs per ounce.” For areconciliation of Gold Fields’ production costs to its total production costsfor fiscal 2005, 2004 and 2003, see “Operational and Financial Review andProspects — Results of Operations — Years Ended June 30, 2004 and 2005”and “ — Years Ended June 30, 2003 and 2004.”

(3)          In fiscal 2004 and 2005, 0.391 million ouncesand 0.481 million ounces of production, respectively, were attributable to GoldFields, with the remainder attributable to minority shareholders in the Tarkwaoperation.

(4)          In fiscal 2004 and 2005, 0.219 million ouncesand 0.176 million ounces of production, respectively, were attributable to GoldFields, with the remainder attributable to minority shareholders in the Damangoperation.

(5)          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.

(6)          In fiscal 2004, and 2005, 4.158 million ouncesand 4.219 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 lineitems due to rounding.

 

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 |   |

 

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Notes:

(1)          Calculated using an exchange rate of R6.21 per$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 2005, 0.481 million ounces ofproduction, were attributable to Gold Fields, with the remainder attributableto minority shareholders in the Tarkwa operation.

(4)          Gold Fields has calculated total cash costs perounce by dividing total cash costs, as determined using the guidance providedby the Gold Institute, by gold ounces sold for all periods presented. Totalcash costs, as defined in the Gold Institute industry guidance, are productioncosts as recorded 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 and Australian dollar and the U.S. dollar. Management, however, believes that total cash costsper ounce 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 net income/(loss),income before tax, operating cash flows or any other measure of financialperformance presented in accordance with U.S. GAAP. In particular, depreciationand amortization is included in a measure of production costs under U.S. GAAP,but is not included in total cash costs under the guidance provided by the GoldInstitute. Furthermore, while the Gold Institute has provided a definition forthe calculation of total cash costs, the calculation of total cash costs perounce may vary significantly among gold mining companies, and by itself doesnot necessarily provide a basis for comparison with other gold miningcompanies. See “Information on the Company — Glossary of Mining Terms — Totalcash costs per ounce.” For a reconciliation of Gold Fields’ production costs toits total cash costs for fiscal 2005, 2004 and 2003, see “Operating andFinancial Review and Prospects — Results of Operations — Years Ended June 30,2004 and 2005” and “ — Years Ended June 30, 2003 and 2004.”

(5)          Gold Fields hascalculated total production costs per ounce by dividing total production costs,as determined using the guidance provided by the Gold Institute, by gold ouncessold for all periods presented. Total production costs, as defined by the GoldInstitute industry

 

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guidance, are total cash costs, as calculatedusing the Gold Institute guidance, plus amortization, depreciation andrehabilitation costs. Changes in total production costs per ounce are affectedby operational performance, as well as changes in the currency exchange ratebetween the Rand and Australian dollar and 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 peer group,both for Gold Fields as a whole, and for its individual operations. Totalproduction costs per ounce is not a U.S. GAAP measure. An investor should notconsider total production costs per ounce in isolation or as an alternative tonet income/(loss), income before tax, operating cash flows or any other measureof financial 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 “Informationon the Company — Glossary of Mining Terms — Total production costs per ounce.”For a reconciliation of Gold Fields’ production costs to its total productioncosts for fiscal 2005, 2004 and 2003, see “Operational and Financial Review andProspects — Results of Operations — Years Ended June 30, 2004 and 2005”and “ — Years Ended June 30, 2003 and 2004.”

 
| ** **                                        | ** ** | **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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Notes:

(1)          Calculated using an exchange rate of R6.90 per$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 2004, 0.610 million ounces ofproduction were attributable to Gold Fields, with the remainder attributable tominority shareholders in the Ghana operations.

(4)          Gold Fields has calculated total cash costs perounce by dividing total cash costs, as determined using the guidance providedby the Gold Institute, by gold ounces sold for all periods presented. Totalcash costs, as defined in the Gold Institute industry guidance, are productioncosts as recorded 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 and Australian dollar and the U.S. dollar. Management, however, believes that total cash costsper ounce 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 net income/(loss),income before tax, operating cash flows or any other measure of financialperformance presented in accordance with U.S. GAAP. In particular, depreciationand amortization is included in a measure of production costs under U.S. GAAP,but is not included in total cash costs under the guidance provided by the GoldInstitute. Furthermore, while the Gold Institute has provided a definition forthe calculation of total cash costs, the calculation of total cash costs perounce may vary significantly among gold mining companies, and by itself doesnot necessarily provide a basis for comparison with other gold miningcompanies. See “Information on the Company — Glossary of Mining Terms — Totalcash costs per ounce.” For a reconciliation of Gold Fields’ production costs toits total cash costs for fiscal 2005, 2004 and 2003, see “Operating andFinancial Review and Prospects — Results of Operations — Years Ended June 30,2004 and 2005” and “ — Years Ended June 30, 2003 and 2004.”

(5)          Gold Fields has calculated total productioncosts per ounce by dividing total production costs, as determined using theguidance provided by the Gold Institute, by gold ounces sold for all periodspresented. Total production costs, as defined by the Gold Institute industryguidance, 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 and Australiandollar and the U.S. dollar. Management, however, believes that total productioncosts per ounce

 

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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 net income/(loss), income beforetax, operating cash flows or any other measure of financial performancepresented in accordance with U.S. GAAP. While the Gold Institute has provided adefinition for the calculation of total production costs, the calculation oftotal production 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 production costs per ounce.” For a reconciliation of GoldFields’ production costs to its total production costs for fiscal 2005, 2004and 2003, see “Operational and Financial Review and Prospects — Results ofOperations — Years Ended June 30, 2004 and 2005” and “ — Years Ended June 30,2003 and 2004.”

 

GoldFields’ weighted average 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. Theprincipal reason was the strengthening of the Rand against the U.S. dollar, whichhad a 10.0% negative impact on the costs converted from the South Africanoperations. In Rand terms, weighted average total cash costs per ounce declinedat the South 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*

 

Productioncosts increased by $145.4 million, or 10.7%, from $1,355.2 million in fiscal2004 to $1,500.6 million in fiscal 2005. This was primarily due to theincreased production from Tarkwa, which was offset in part by slightlydecreased production in South Africa and St. Ives, as well as significantincreases in input costs, especially fuel, steel and cyanide and otherreagents, wage increases in line with/above inflation at the South Africanoperations, and the appreciation of the South African rand and the Australiandollar against the U.S. dollar. The Rand appreciated on average by 10.1% andthe Australian dollar appreciated 5.4% against the US dollar during fiscal 2005compared to fiscal 2004, resulting in increased costs in U.S. dollar terms.

 

*Depreciation and amortization*

 

Depreciationand amortization charges increased $75.9 million, or 38.2%, from $198.6 millionin fiscal 2004 to $274.5 million in fiscal 2005. Depreciation and amortizationis calculated on the units of production method and is based on current goldproduction as a percentage of total expected gold production over the lives ofthe different mines. 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 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.

 
| ** **                        | ** ** | **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 bemined through the shaft decline at Shaft No.7 will now be mined from currentinfrastructure at

 

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Shaft No. 4. This reclassification of reservesfrom Shaft No. 7 to Shaft No. 4 reduced the reserves at Shaft No. 7,resulting in the cost base at that shaft being amortized over a shorter lifethan previously planned.

(2)          The Beatrix operation, formerly called the FreeState operation, was renamed following the sale of the St. Helena mine toFreegold on October 30, 2002. The increase in amortization at Beatrix infiscal 2005 is due to a decrease in proven and probable reserves.

(3)          Includes the former Oryx mine, designated asBeatrix Shaft No. 4 or the West section.

(4)          As of June 30, 2003 and 2004, reserves of6.970 million ounces and 10.450 million ounces of gold, respectively, wereattributable to Gold Fields, with the remainder attributable to minorityshareholders in the Tarkwa operation. The increase in amortization at Tarkwa infiscal 2005 is due to the depreciation of the new owner mining fleet and thenew SAG mill commissioned during the year.

(5)          As of June 30, 2003 and 2004, reserves of0.640 million ounces and 0.640****million ounceswere attributable to Gold Fields, with the remainder attributable to minorityshareholders in the Damang operation.

(6)          The life of mine for each operation shown inthe above table differs from that shown in “Information on the Company — GoldFields Mining Operations.” The information in the above table is based on theabove infrastructure proven and probable reserves at June 30, 2004 forfiscal 2004 whereas the life of mine information in Item 4 is based on bothabove and below infrastructure proven and probable reserves at June 30,2005.

(7)          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.

(8)          Amortizationincreased at St. Ives and Agnew due to an increase in ounces mined.

(9)          Below infrastructure reserves relate tomineralization which is located at a level at which an operation currently doesnot have infrastructure sufficient to allow mining operations to occur, butwhere the operation has made plans to install additional infrastructure in thefuture which will allow mining to occur at that level.

(10)    As of June 30, 2003 and 2004, reserves of81.500 million ounces and 75.600 million ounces of gold, respectively, wereattributable to Gold Fields, with the remainder attributable to minorityshareholders in the Ghana operation.

 

*Corporate expenditure*

 

Corporateexpenditure was $22.5 million in fiscal 2005 compared to $20.3 million infiscal 2004, an increase of 10.8%. Corporate expenditure consists primarily ofgeneral corporate overhead and corporate service department costs, primarily inthe areas of technical services, human resources and finance, which are used bythe operations. Corporate expenditure also includes business development costs.This increase was primarily due to the appreciation of the Rand against theU.S. dollar. Rand costs remained constant at R140.0 million in fiscal 2005.

 

*Employment termination costs*

 

Infiscal 2005, Gold Fields incurred employment termination costs of $13.7 millionas compared to $10.5 million in fiscal 2004. The increase in employeeterminations costs resulted principally from higher retrenchments during fiscal2005.

 

*Exploration expenditure*

 

Explorationexpenditure was $46.0 million in fiscal 2005, an increase of 15.3% from $39.9million in fiscal 2004. The increase was as a result of a deliberate effort tostep up exploration activities, with $11.5 million spent in Africa in fiscal2005, compared to $5.7 million in fiscal 2004. Exploration expenditure infiscal 2005 also included $14.3 million incurred at the Arctic PlatinumProject, or APP, compared to $11.4 million in fiscal 2004. See “Information onthe Company—Exploration.” In addition, in fiscal 2005 the costs associated withmarketing the Biox® process were accounted for as Other (costs)/income, whereasin fiscal 2004 they were included within exploration expenditure. See “Informationon the Company — Research and Development.”

 

*Impairment of assets*

 

For fiscal 2005, Gold Fields had asset impairmentsof $233.1 million, as compared to asset impairments of $72.7 million in fiscal2004. During fiscal 2005, there was an impairment charge of $211.1 millionrelating to Beatrix North and South sections (formerly Beatrix Shaft Nos. 1, 2and 3). Beatrix is a low grade mine and therefore very sensitive to changes inits cost profile. Changes in the cost profile affects the pay limits, which inturn affects the reserves. During fiscal 2005, there were cost increases atBeatrix, which resulted in an increase in the pay limit. Due to the increase inthe pay limit, certain reserves at Shaft No. 2 (now part of the Southsection) and Vlakpan  included in fiscal2004 became uneconomical to mine and were therefore excluded from the 2005 lifeof mine profile. In addition, due to the restructuring at the South section,certain areas were closed which further impacted the life of mine plan.

 

Duringfiscal 2005, closures resulted in the following additional asset impairments:

 

•                  at Driefontein, ShaftNo. 10 shaft was closed, resulting in an impairment of $2.0 million;

•                  at Kloof, the No. 3metallurgical plant was closed, resulting in an impairment of $1.8 million; and

•                  at St. Ives, the old millwas closed, resulting in an impairment of $9.8 million.

 

Alsoduring fiscal 2005, an impairment charge was incurred at Living Gold, the roseproject at Driefontein. See “Information on the Company — Living Gold.”****As Living Gold is not a gold asset, its valuation was basedon its business plan using a long term exchange rate of R8.51 to the euro, thecurrency in the markets where it anticipated making most of its sales, and adiscounted cash flow valuation using a real discount

 

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rateof 10 per cent. This resulted in an impairment of $8.4 million. The main reasonfor the impairment is that the original plan forecast a higher exchange rate ofR9.87 to the euro and thus higher earnings.

 

Duringfiscal 2004, following a geological study at the Beatrix West Section andan associated revision of the ore reserve, the latest life-of-mine plansindicated that future production of gold should be based on 2.0 million ouncesas opposed to 2.8 million ounces as previously estimated. At this level ofextraction and at a gold price of $350 per ounce, the life-of-mine plans didnot support the carrying value of the shaft on an undiscounted cash flow basis.Accordingly, an asset impairment of $61.8 million was charged against income,which reduced the carrying value of the Beatrix West Section to $11.9million.

 

Duringfiscal 2004, the potential future income arising from existing and possible newcontracts for Biox® was reevaluated.  See“Information on the Company — Research and Development.” This revised plan didnot support the carrying value and accordingly, an impairment write-down of$5.0 million was recorded, to reflect the fair value of the Biox® patent of$15.0 million.

 

Duringfiscal 2004, new regulations were enacted in South Africa that will result inmining companies forfeiting those mineral rights not likely to be mined orexplored. GFL Mining Services held certain mineral rights to which this newregulation applies. Accordingly, an impairment write-off of $5.9 million wasrecorded for those minerals that would be forfeited as a result of this newregulation.

 

*Impairment of critical spares*

 

Withthe closure of the old St. Ives mill during fiscal 2005, $2.8 million worth ofcritical spares kept for the maintenance of the old plant were impaired as theyhad become redundant.

 

*Decrease in provision for post-retirement health care costs*

 

InSouth Africa, Gold Fields provides medical benefits to employees in itsoperations through the Medisense Medical Scheme.

 

Underthe medical plan which covers certain of its former employees, Gold Fieldsremains liable for 50% of the employees’ medical contribution to the medicalschemes after their retirement. During fiscal 2005 and fiscal 2004, 21% and 6%,respectively, of these former employees and dependants were bought out of thescheme at a 15% premium. At June 30, 2005, approximately 243 (fiscal 2004:510) former employees were covered under this plan, which is not available tomembers of the scheme formerly available to employees of the Free Stateoperation who retired after August 31, 1997 and members of the Medisense medicalscheme who retired after January 31, 1999. See “Directors, SeniorManagement and Employees—Employees—Benefits.”

 

Infiscal 2005 an amount of $4.2 million was credited to earnings, compared to$5.1 million in fiscal 2004, in respect of Gold Fields’ obligations under thismedical plan, representing an 18% decrease. The $4.2 million credit was theresult of a reversal of $4.5 million relating to the release of the crosssubsidization liability as a result of the buyout and a $2.2 million release asa result of benefits forfeited offset in part by the annual interest andservice charge of $1.7 million and a $0.8 million charge relating to the 15%premium mentioned above. In fiscal 2004, the credit was the result of areversal of $6.2 million relating to the release of the cross subsidizationliability as a result of the buyout and a $2.6 million release as a result ofbenefits forfeited, offset in part by the annual interest and service charge of$3.0 million and a $0.7 million charge relating to the 15% premium. Thepost-retirement health care provision is updated annually based on actuarialcalculations, with any increase in the provision reflected in the statement ofoperations.

 

*Accretion expense on environmental rehabilitation*

 

Forits South African operations, Gold Fields contributes to environmental trustfunds it has established to provide for any environmental rehabilitationobligations and expected closure costs relating to its mining operations. Theamounts invested in the trust funds are classified as non-current assets andany income earned on these assets is accounted for as interest income. For theGhana and Australia operations Gold Fields does not contribute to a trust fund,but does make provision for estimated environmental rehabilitation costs. Fullprovision is made based on the net present value of the estimated cost ofrestoring the environmental disturbance that has occurred up to the balancesheet date. The rehabilitation charge for fiscal 2005 was $11.5 millioncompared to $8.4 million in fiscal 2004. The increase was due primarily to thestrengthening of the Rand against the U.S. dollar and decreases in the life ofmines in South Africa

 

*Share-based compensation*

 

GoldFields has elected to follow APB No. 25 and its related interpretations inaccounting for its share option schemes. Under APB No. 25, because theexercise price of Gold Fields and its subsidiaries’ employee share options equaledthe market price of the underlying share on the date of the grant, nocompensation expense has historically been recognized in the consolidatedfinancial statements, other than on occasions where the terms of share optionvesting schedules are modified or accelerated. During fiscal 2005 however, as aresult of the inability by participants to exercise their share options duringthe period of the attempted Harmony hostile bid, Gold Fields extended the lifeof options 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.

 

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*Harmony hostile bid costs*

 

On October 18,2004, Harmony Gold Mining Company Limited, or Harmony, announced an unsolicitedand hostile tender offer to acquire the entire issued share capital of GoldFields. Gold Fields mounted a vigorous defense to the offer, which continuedduring much of the remainder of fiscal year 2005. The offer came to aconclusion on May 20, 2005 when the High Court of South Africa ruled that thetender offer had, in fact, lapsed on December 18, 2004 and was not capableof being revised or reinstated. Gold Fields incurred costs of $50.8 million indefending against the Harmony offer which has been expensed.

 

*IAMGold transaction costs*

 

On September 30,2004, Gold Fields, Gold Fields Ghana Holdings Limited, Gold Fields Guernsey 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 has been expensed.

 

*Interest and dividends*

 

Interestand dividends increased by $9.8 million or 50.5%, from $19.4 million in fiscal2004 to $29.2 million in fiscal 2005. Interest received on cash and cash equivalentswas $26.3 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*

 

GoldFields recognized net finance expense of $54.9 million in fiscal 2005 ascompared to $12.2 million in fiscal 2004. The main reason for the increase infiscal 2005 was due to the Mvelaphanda loan being in place for the entireperiod of fiscal 2005, whereas in fiscal 2004 it was only in place for threemonths. Net finance expense in fiscal 2005 consisted of interest payments of$57.6 million, comprising $56.9 million on the Mvelaphanda loan and $0.7million of miscellaneous interest payments. This was offset in part by a $2.7million realized exchange gain on funds held in Euros.

 

Netfinance expense in fiscal 2004 consisted of interest payments of $27.2 million,comprising $18.2 million on the Mvelaphanda loan and $9.0 million on the loansused to acquire St. Ives, Agnew and Damang, offset in part by a $3.6 millionunrealized exchange gain on certain offshore funds held in Euros and a $11.4million realized exchange gain on the Australian loan.

 

*Unrealized gain on financial instruments*

 

GoldFields recognized an unrealized gain of $4.9 million in fiscal 2005 compared toan unrealized gain of $39.2 million in fiscal 2004 relating to financialinstruments.

 

Theunrealized gain of $4.9 million in fiscal 2005 comprised a $5.3 millionunrealized gain 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 a $0.3 million unrealized gain onthe International Petroleum Exchange Gasoil call options Gold Fields enteredinto during fiscal 2005, offset in part by a $0.7 million negative mark-to-marketvaluation as at June 30, 2005 in respect of the $30.0 million USdollar/Rand currency financial instruments Gold Fields holds to cover any U.S.dollar commitments payable from South Africa. See “Quantitative and Qualitative Disclosures About Market Risk — ForeignCurrency Sensitivity — Foreign Currency Hedging Experience.”

 

Ofthe $39.2 million unrealized gain in fiscal 2004, $40.2 million related to anunrealized gain on the Australian dollar/U.S. dollar currency financialinstruments, 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 heldat that time which were purchased to protect the Group’s commitment in respectof the Tarkwa mill project and the shift to owner mining projects of $159.0million.

 

*Realized gain on financial instruments*

 

GoldFields recognized a realized gain of $2.1 million in fiscal 2005 compared to arealized loss of $8.7 million in fiscal 2004 relating to financial instruments.

 

Ofthe $2.1 million realized gain in fiscal 2005, a $1.3 million gain was realizedon the settlement of the $50.0 million US dollar/Rand currency financialinstruments and $0.8 million related to an interest rate swap Gold Fields hadentered into in connection with the Mvela Loan This swap was closed out on June 3,2005 realizing a gain of $36.2 million. This gain will be accounted for in theincome statement over the remaining period of the underlying loan. $0.8 millionwas accounted for in the income statement in fiscal 2005, with the balance of$35.4

 

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millionto be accounted for in the income statement in fiscal 2006 to fiscal 2009. See “Quantitative and Qualitative DisclosuresAbout Market Risk  — Interest RateSensitivity  — General — Interest RateHedging Experience.”

 

Ofthe $8.7 million realized loss in fiscal 2004, a loss of $13.0 million wasrealized on the settlement of the U.S. dollar/Rand forward purchases offset bya $4.3 million gain on the U.S. dollar/Australian dollar financial instruments.

 

*Profit on disposal of listed investments*

 

Duringfiscal 2005, Gold Fields continued to liquidate certain non-currentinvestments. The profit on the sale of these investments amounted to $8.1million resulting from the following sales:

 

•                  $6.2 million from thesale of 36.0 million shares in Zijin Mining Group Company Limited;

•                  $1.6 million from thesale of 8.5 million shares in African Eagle Resources Plc; and

•                  $0.3 million from thesale 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:

 

•                  $7.7 million from thesale of 1.2 million shares in Harmony Gold Mining Company Limited/AfricanRainbow Minerals Limited;

•                  $2.1 million from thesale of 0.9 million shares in Chesapeake Gold Corporation;

•                  $1.0 million from thesale of 0.1 million shares in Glamis Gold Limited;

•                  $1.5 million from the sale of 2.5 million shares inOrozone Resources Inc.; and

•                  $1.6 million from the sale of 1.3 million shares inCommittee Bay.

 

*Profit on disposal of exploration rights*

 

Duringfiscal 2005 Gold Fields sold its interest in the Angelina Project in Chile toits joint venture partner Meridian for $7.5 million plus a 2% net smelterroyalty on the majority of land within the joint venture. As the interest had anil cost, the proceeds of $7.5 million was also the profit.

 

*Profit on disposal of mineral rights*

 

Duringfiscal 2004, mineral rights and associated assets relating to Driefontein’sblock 1C11 were sold for $45.7 million to AngloGold Ashanti, realizing a profitof $27.1 million.

 

*Write-down of investments.*

 

Duringfiscal 2005 investments whose market value was lower than their original costsfor a period of longer than 12 months were written-down by $7.7 million.

 

The$7.7 million comprises:

 

•                  $5.4 million onMvelaphanda Resources Limited;

•                  $0.4 million onConquest Mining Limited;

•                  $0.3 million on OilQuest Resources Plc;

•                  $0.7 million on Lakota Resources; and

•                  $0.9 million on Ridge Mining Plc.

 

*Write-down of mineral rights*

 

Duringfiscal 2004, mineral rights held as trading stock to the value of $3.6 millionwere written-off. This was in line with new regulations in South Africa thatwill result in mining companies forfeiting those mineral rights not likely tobe mined or explored.

 

*Other (expenses)/income*

 

Other(expenses)/income represents miscellaneous revenue items such as scrap salesand rental income, net of miscellaneous corporate expenditure not allocated tothe operations and therefore not included in the corporate expenditure lineitem. Other (expenses)/income decreased by $7.3 million, from $2.1 millionother income in fiscal 2004 to $5.2 million other expenses in fiscal 2005. Otherincome in fiscal 2005 consisted of $3.7 million in revenues, comprisedprincipally of mineral right sales and rent, which was more than offset bymiscellaneous cost items totaling $8.9 million which included:

 

•                  auditors fees andother costs relating to Gold Fields becoming compliant with the requirements ofthe Sarbanes-Oxley Act of 2002;

 

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•                  costs related tomarketing Biox®, which prior to fiscal 2005 were accounted for underexploration expense;

•                  the cost of cashrewards given to all Gold Fields’ employees for the successful defense of theHarmony hostile bid; and

•                  additional sundry professional fees incurred.

 

Otherincome in fiscal 2004 consisted of $6.8 million in revenues, comprisedprincipally of mineral right sales, rent and a rebate received from JP Morgan netof $4.7 million 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.

 

*Income and Mining Tax Benefit/(Expense)*

 

Thetable below indicates that Gold Fields’ effective tax rate for fiscal 2004 andfiscal 2005, including normal and deferred tax.

 
| ** **                            | ** ** | **Year  ended June 30,** | ** ** |
|---------------------------------------|------------|-------------------------------|------------|
| **Income and mining tax**             | ** ** | **2004**                      | ** ** | **2005** | ** ** |
| Effective tax  (expense)/benefit rate |       | (14.3                         | )%         | 35.1 | % |

 

Infiscal 2005, the effective tax benefit rate of 35.1% differed from the maximummining statutory tax rate of 45% for Gold Fields and its subsidiaries as awhole, 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 credit due toan increase in the tax values of the Australian operations following theconsolidation of St. Ives and Agnew for tax purposes and $8.4 million due tothe reduction in fiscal 2005 of the Ghanaian tax rates from 32.5% to 28.0%. TheAustralian tax legislation makes provision for companies that consolidate fortax purposes to recalculate their tax values based on a market valuecalculation. The effect of these items was offset by an amount of $38.6 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.

 

Infiscal 2004, the effective tax expense rate of 14.3% differed from the maximummining statutory tax rate of 46% for Gold Fields and its subsidiaries as awhole, primarily due to the effect of the mining tax formula of $7.0 million(representing the tax-free status of the first 5% of mining revenue) on theSouth African mining operations’ taxable income and $15.1 million ofnon-taxable income primarily related to the profit on sale of certaininvestments. In addition, the tax expense rate is lower due to a credit of$17.6 million relating to income from Australia and Ghana taxed at a lowerrate. The effect of these items was partially offset by an amount of $19.8million relating to foreign levies and royalties, which is included in the taxcharge.

 

*Minority Interests*

 

Minorityinterests represented an expense of $20.6 million in fiscal 2005, compared to anexpense of $21.8 million in fiscal 2004. These amounts reflect the portion ofthe net income of Gold Fields Ghana, Abosso and Living Gold attributable totheir minority shareholders. The minority shareholders’ interest was 28.9% inGold Fields 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’ shareof the higher net loss of Living Gold in fiscal 2005 compared to fiscal 2004.

 

*Net (Loss)/Income*

 

As aresult of the factors discussed above, Gold Fields’ net loss was $206.2 millionin fiscal 2005 compared with net income of $48.9 million in fiscal 2004.

 

***Years Ended June 30, 2004 and 2003***

 

*Revenues*

 

Productsales increased by $168.0 million, or 10.9%, from $1,538.2 million infiscal 2003 to $1,706.2 million in fiscal 2004. The increase in productsales was due to an increase in the average realized gold price of 16.2% from$333 per ounce in fiscal 2003 to $387 per ounce in fiscal 2004 partially offsetby a net decrease of approximately 0.196 million ounces, or 4.3%, of totalgold sold from 4.62 million ounces in fiscal 2003 to 4.41 million ouncesin fiscal 2004. The decrease in sales resulted from a reduction at the SouthAfrican operations from 3.081 million ounces to 2.804 million ouncesoffset in part by increases at the Ghanaian and Australian operations. Thedecline at the South African operations was due primarily to lower grades aswell as the absence of St. Helena for the entire year, following its sale on October 30,2002. Gold output from Kloof and Driefontein decreased by 120,000 ounces and105,000 ounces, respectively. Production at the international operations increasedby 8.1% from 1.253 million ounces in fiscal 2003 to 1.354 million ouncesin fiscal 2004. Differences between total gold sold and total gold produced aremainly due to timing differences between gold production and gold sales.

 

*Costs and Expenses*

 

The followingtable sets out Gold Fields’ total ounces produced, weighted average total cashcosts and total production costs per ounce for fiscal 2003 and fiscal 2004.

 

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| ** **         | ** ** | **Fiscal 2003**      | ** ** | **Fiscal 2004**           | ** ** | ** **                       | ** ** | ** **           | ** ** |
|--------------------|------------|----------------------|------------|---------------------------|------------|----------------------------------|------------|----------------------|------------|
| ** **         | ** ** | **Gold  Production** | ** ** | **Total cash  costs (1)** | ** ** | **Total  production  costs (2)** | ** ** | **Gold  production** | ** ** | **Total cash  costs (1)** | ** ** | **Total  production  costs (2)** | ** ** | **Percentage  increase/  (decrease) in  unit total cash  costs** | ** ** | **Percentage  increase/(decrease) in  unit total production  costs** | ** ** |
| ** **         | ** ** | **(‘000oz)**    | ** ** | **($/oz)**                | ** ** | **(‘000oz)**                | ** ** | **($/oz)**           | ** ** | **(%)** | ** ** |
| South Africa       |       |                 |       |                      |       |                             |       |                 |       |   |   |   |   |   |   |   |   |
| Driefontein        |       | 1,238                |       | 202                       |       | 233                              |       | 1.141                |       | 311 |   | 355 |   | 54.0 |   | 52.4 |   |
| Kloof              |       | 1,140                |       | 215                       |       | 246                              |       | 1,038                |       | 341 |   | 388 |   | 58.6 |   | 57.7 |   |
| Free State         |       |                 |       |                      |       |                             |       |                 |       |   |   |   |   |   |   |   |   |
| Beatrix            |       | 659                  |       | 229                       |       | 260                              |       | 625                  |       | 356 |   | 393 |   | 55.5 |   | 51.2 |   |
| St. Helena         |       | 44                   |       | 289                       |       | 289                              |       | —               |       | — |   | — |   | — |   | — |   |
| Ghana              |       |                 |       |                      |       |                             |       |                 |       |   |   |   |   |   |   |   |   |
| Tarkwa (3)         |       | 540                  |       | 194                       |       | 225                              |       | 550                  |       | 230 |   | 258 |   | 18.6 |   | 14.7 |   |
| Darnang (4)        |       | 299                  |       | 243                       |       | 260                              |       | 308                  |       | 222 |   | 245 |   | (8.6 | ) | (5.8 | ) |
| Australia (5)      |       |                 |       |                      |       |                             |       |                 |       |   |   |   |   |   |   |   |   |
| St. Ives           |       | 513                  |       | 198                       |       | 295                              |       | 543                  |       | 300 |   | 377 |   | 51.5 |   | 27.8 |   |
| Agnew              |       | 144                  |       | 219                       |       | 396                              |       | 202                  |       | 221 |   | 303 |   | 0.9 |   | (23.5 | ) |
| Total (6) (7) |       | 4,577                |       | —                    |       | —                           |       | 4,406                |       | — |   | — |   | — |   | — |   |
| Weighted average   |       | —               |       | 212                       |       | 254                              |       | —               |       | 302 |   | 349 |   | 42.5 |   | 37.4 |   |

 

Exceptfor gold production, all statistics are based on gold sold.

 

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Notes:

(1)          Gold Fields has calculated total cash costs perounce by dividing total cash costs, as determined using the guidance providedby the Gold Institute, by gold ounces sold for all periods presented. Totalcash costs, as defined in the Gold Institute industry guidance, are productioncosts as recorded 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 by operationalperformance, as well as changes in the currency exchange rate between the Randand Australian dollar  and 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 net income/(loss), income beforetax, operating cash flows or any other measure of financial performancepresented in accordance with U.S. GAAP. In particular, depreciation andamortization is included in a measure of production costs under U.S. GAAP, butis not included in total cash costs under the guidance provided by the GoldInstitute. Furthermore, while the Gold Institute has provided a definition forthe calculation of total cash costs, the calculation of total cash costs perounce may vary significantly among gold mining companies, and by itself doesnot necessarily provide a basis for comparison with other gold miningcompanies. See “Information on the Company — Glossary of Mining Terms — Totalcash costs per ounce.” For a reconciliation of Gold Fields’ production costs toits total cash costs for fiscal 2005, 2004 and 2003, see “Operating andFinancial Review and Prospects — Results of Operations — Years Ended June 30,2004 and 2005” and “ — Years Ended June 30, 2003 and 2004.”

(2)          Gold Fields has calculated total productioncosts per ounce by dividing total production costs, as determined using theguidance provided by the Gold Institute, by gold ounces sold for all periodspresented. Total production costs, as defined by the Gold Institute industryguidance, 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 and Australiandollar and the U.S. dollar. Management, however, believes that total productioncosts per ounce provides a measure for comparing Gold Fields’ operationalperformance against that of its peer group, both for Gold Fields as a whole,and for its individual operations. Total production costs per ounce is not aU.S. GAAP measure. An investor should not consider total production costs perounce in isolation or as an alternative to net income/(loss), income beforetax, operating cash flows or any other measure of financial performancepresented in accordance with U.S. GAAP. While the Gold Institute has provided adefinition for the calculation of total production costs, the calculation oftotal production 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 production costs per ounce.” For a reconciliation of GoldFields’ production costs to its total production costs for fiscal 2005, 2004and 2003, see “Operational and Financial Review and Prospects — Results ofOperations — Years Ended June 30, 2004 and 2005” and “ — Years Ended June 30,2003 and 2004.”

(3)          In fiscal 2003 and 2004, 0.384 millionounces and 0.391 million ounces of production, respectively, wereattributable to Gold Fields, with the remainder attributable to minorityshareholders in the Tarkwa operation.

(4)          In fiscal 2003 and 2004, 0.213 millionounces and 0.219 million ounces of production, respectively, wereattributable to Gold Fields, with the remainder attributable to minorityshareholders in the Damang operation.

(5)          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.

 

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(6)          In fiscal 2003, and 2004, 4.334 millionounces and 4.158 million ounces of production, respectively, wereattributable to Gold Fields, with the remainder attributable to minorityshareholders in the Ghana operations.

(7)          The total does not reflect the sum of the lineitems due to rounding.

 

Thefollowing tables set out a reconciliation of Gold Fields’ production costs toits total cash costs and total production costs for fiscal 2004 and fiscal2003.

 
| ** **                                         | ** ** | **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 inventory (‘000 oz)                      |       | —                                                 |       | — |   | — |   | — |   | — |   | — |   | — |   | — |   | — |   |
| Gold sales (‘000 oz)                          |       | 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 |   |

 

Allstatistics are based on gold sold.

 

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Notes:

(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, 0.610 million ounces ofproduction were attributable to Gold Fields, with the remainder attributable tominority shareholders in the Ghana operations.

(4)          Gold Fields has calculated total cash costs perounce by dividing total cash costs, as determined using the guidance providedby the Gold Institute, by gold ounces sold for all periods presented. Totalcash costs, as defined in the Gold Institute industry guidance, are productioncosts as recorded 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 and Australian dollar and the U.S. dollar. Management, however, believes that total cash costsper ounce 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 net income/(loss),income before tax, operating cash flows or any other measure of financialperformance presented in accordance with U.S. GAAP. In particular, depreciationand amortization is included in a measure of production costs under U.S. GAAP,but is not included in total cash costs under the guidance provided by the GoldInstitute. Furthermore, while the Gold Institute has provided a definition forthe calculation of total cash costs, the calculation of total cash costs perounce may vary significantly among gold mining companies, and by itself doesnot necessarily provide a basis for comparison with other gold miningcompanies. See “Information on the Company — Glossary of Mining Terms — Totalcash costs per ounce.” For a reconciliation of Gold Fields’ production costs toits total cash costs for fiscal 2005, 2004 and 2003, see “Operating andFinancial Review and Prospects — Results of Operations — Years Ended June 30,2004 and 2005” and “ — Years Ended June 30, 2003 and 2004.”

(5)          Gold Fields has calculated total productioncosts per ounce by dividing total production costs, as determined using theguidance provided by the Gold Institute, by gold ounces sold for all periodspresented. Total production costs, as defined by the Gold Institute industryguidance, 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 and Australiandollar and the U.S. dollar. Management, however, believes that total productioncosts per ounce provides a measure for comparing Gold Fields’ operationalperformance against that of its peer group, both for Gold Fields as a whole,and for its individual operations. Total production costs per ounce is not aU.S. GAAP measure. An investor should not consider total production costs perounce in isolation or as an alternative to net income/(loss), income beforetax, operating cash flows or any other measure of financial performancepresented in accordance with U.S. GAAP. While the Gold Institute has provided adefinition for the calculation of total production costs, the calculation oftotal production costs per ounce may vary significantly among gold miningcompanies, and by

 

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itself does not necessarily provide a basis forcomparison with other gold mining companies. See “Information on the Company —Glossary of Mining Terms — Total production costs per ounce.” For areconciliation of Gold Fields’ production costs to its total production costsfor fiscal 2005, 2004 and 2003, see “Operational and Financial Review andProspects — Results of Operations — Years Ended June 30, 2004 and 2005”and “ — Years Ended June 30, 2003 and 2004.”

 

Thefollowing table sets out a reconciliation of Gold Fields’ production costs toits total cash costs and total production costs for fiscal 2003.

 
| ** **                                        | ** ** | **For the year ended June 30,  2003**        | ** ** |
|---------------------------------------------------|------------|---------------------------------------------------|------------|
| ** **                                        | ** ** | ** **                                        | ** ** | ** ** | ** ** | ** ** | ** ** | **St.** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                        | ** ** | **Driefontein**                                   | ** ** | **Kloof** | ** ** | **Beatrix** | ** ** | **Helena** | ** ** | **Tarkwa** | ** ** | **Damang** | ** ** | **St. Ives** | ** ** | **Agnew** | ** ** | **Corporate** | ** ** | **Group** | ** ** |
| ** **                                        |       | **(in $millions except as  otherwise noted) (1)** |       |
| **Production costs**                              |       | 260.3                                             |       | 250.5 |   | 155.0 |   | 12.6 |   | 105.1 |   | 71.2 |   | 118.2 |   | 42.1 |   | — |   | 1,015.0 |   |
| Less:                                             |       |                                              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| G&A other than corporate  cost                |       | (7.5                                              | )          | (6.1 | ) | (3.9 | ) | — |   | (5.5 | ) | (1.6 | ) | (3.6 | ) | (0.8 | ) | — |   | (28.2 | ) |
| GIP adjustments                                   |       | (0.4                                              | )          | — |   | — |   | — |   | — |   | — |   | (1.1 | ) | (5.1 | ) | — |   | (6.6 | ) |
| Exploration                                       |       | —                                            |       | — |   | — |   | — |   | — |   | — |   | (16.6 | ) | (5.8 | ) | — |   | (22.42 | ) |
| Plus:                                             |       |                                              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Employment termination cost                       |       | 2.3                                               |       | 1.5 |   | — |   | — |   | — |   | — |   | — |   | — |   | — |   | 3.8 |   |
| Royalty                                           |       | —                                            |       | — |   | — |   | — |   | 5.4 |   | 3.0 |   | 4.6 |   | 1.1 |   | — |   | 14.1 |   |
| **Total cash costs**                              |       | 254.7                                             |       | 245.9 |   | 151.1 |   | 12.6 |   | 105.0 |   | 72.6 |   | 101.5 |   | 31.5 |   | — |   | 863.4 |   |
| Plus:                                             |       |                                              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization (2)                                  |       | 37.2                                              |       | 34.2 |   | 19.5 |   | — |   | 16.0 |   | 5.0 |   | 49.4 |   | 25.3 |   | 1.5 |   | 188.1 |   |
| Rehabilitation                                    |       | 1.8                                               |       | 1.3 |   | 0.9 |   | — |   | 0.5 |   | 0.3 |   | 0.4 |   | 0.1 |   | — |   | 5.3 |   |
| **Total production costs**                        |       | 293.7                                             |       | 281.4 |   | 171.5 |   | 12.6 |   | 121.5 |   | 77.9 |   | 151.3 |   | 56.9 |   | 1.5 |   | 1,168.3 |   |
| Gold produced (‘000 oz) (2)                  |       | 1,238.3                                           |       | 1,140.1 |   | 658.7 |   | 43.7 |   | 539.9 |   | 299.2 |   | 513.3 |   | 143.6 |   | — |   | 4,576.8 |   |
| Gold inventory (‘000 oz)                     |       | 23.2                                              |       | 2.0 |   | — |   | — |   | — |   | — |   | — |   | — |   | — |   | 25.2 |   |
| Gold sales (‘000 oz)                         |       | 1,261.5                                           |       | 1,142.1 |   | 658.7 |   | 43.7 |   | 539.9 |   | 299.2 |   | 513.3 |   | 143.6 |   | — |   | 4,602.0 |   |
| **Gold sold per production cost (‘000  oz)** |       | 1,261.5                                           |       | 1,142.1 |   | 658.7 |   | 43.7 |   | 539.9 |   | 299.2 |   | 513.3 |   | 143.6 |   | — |   | 4,602.0 |   |
| **Total cash costs (4) ($/oz)**              |       | 202                                               |       | 215 |   | 229 |   | 289 |   | 195 |   | 243 |   | 198 |   | 219 |   | — |   | 212 |   |
| **Total production costs (5) ($/oz)**        |       | 233                                               |       | 246 |   | 260 |   | 289 |   | 225 |   | 260 |   | 295 |   | 396 |   | — |   | 254 |   |

 

Allstatistics are based on gold sold.

 

----

Notes:

(1)          Calculated using an exchange rate of R9.07 per$1.00.

(2)          Includes non-cash portion of GIP adjustments.

(3)          In fiscal 2003, 0.597 million ounces ofproduction were attributable to Gold Fields, with the remainder attributable tominority shareholders in the Ghana operations.

(4)          Gold Fields has calculated total cash costs perounce by dividing total cash costs, as determined using the guidance providedby the Gold Institute, by gold ounces sold for all periods presented. Totalcash costs, as defined in the Gold Institute industry guidance, are productioncosts as recorded 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 and Australian dollar and the U.S. dollar. Management, however, believes that total cash costsper ounce 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 net income/(loss),income before tax, operating cash flows or any other measure of financialperformance presented in accordance with U.S. GAAP. In particular, depreciationand amortization is included in a measure of production costs under U.S. GAAP,but is not included in total cash costs under the guidance provided by the GoldInstitute. Furthermore, while the Gold Institute has provided a definition forthe calculation of total cash costs, the calculation of total cash costs perounce may vary significantly among gold mining companies, and by itself doesnot necessarily provide a basis for comparison with other gold mining companies.See “Information on the Company — Glossary of Mining Terms — Total cash costsper ounce.” For a reconciliation of Gold Fields’ production costs to its totalcash costs for fiscal 2005, 2004 and 2003, see “Operating and Financial Reviewand Prospects — Results of Operations — Years Ended June 30, 2004 and 2005”and “ — Years Ended June 30, 2003 and 2004.”

(5)          Gold Fields has calculated total productioncosts per ounce by dividing total production costs, as determined using theguidance provided by the Gold Institute, by gold ounces sold for all periodspresented. Total production costs, as defined by the Gold Institute industryguidance, 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 and Australiandollar and the U.S. dollar. Management, however, believes that total productioncosts per ounce provides a measure for comparing Gold Fields’ operationalperformance against that of its peer group, both for Gold Fields as a whole,and for its individual operations. Total production costs per ounce is not aU.S. GAAP measure. An investor should not consider total production costs perounce in isolation or as an alternative to net income/(loss), income beforetax, operating cash flows or any other measure of financial performancepresented in accordance with U.S. GAAP. While the Gold Institute has provided adefinition for the calculation of total production costs, the calculation oftotal production costs per ounce may vary significantly among gold mining

 

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companies, and by itself does not necessarily providea basis for comparison with other gold mining companies. See “Information onthe Company — Glossary of Mining Terms — Total production costs per ounce.” Fora reconciliation of Gold Fields’ production costs to its total production costsfor fiscal 2005, 2004 and 2003, see “Operational and Financial Review andProspects — Results of Operations — Years Ended June 30, 2004 and 2005”and “ — Years Ended June 30, 2003 and 2004.”

 

GoldFields’ weighted average total cash costs per ounce increased $90 per ounce, or42.5%, from $212 per ounce in fiscal 2003 to $302 per ounce in fiscal 2004. Theprincipal reason was the strengthening of the Rand against the U.S. dollar,which had a 23.9% negative impact on costs converted from the South Africanoperations. In Rand terms, average total cash costs per ounce at the SouthAfrican operations were affected by a decrease in mining volumes and a 12%decrease in yields during fiscal 2004 as compared to fiscal 2003, as well aswage increases above inflation. Total cash costs per ounce in Rand terms at theinternational operations were similar to fiscal 2003 with lower unit costs atDamang, Agnew and Tarkwa offsetting the increase at St. Ives, as theappreciation of the Rand against the U.S. dollar contributed to the lower totalcash costs per ounce in Rand terms in fiscal 2004.

 

*Production costs*

 

Productioncosts increased by $340.2 million, or 33.5%, from $1,015.0 million infiscal 2003 to $1,355.2 million in fiscal 2004, primarily due to increasedproduction from all the international operations, inflationary increases at theSouth African operations, and the appreciation of the South African rand andthe Australian dollar against the U.S. dollar. Increased operating costs at theSouth African operations were due to wage increases above inflation andincreases in the amount and cost of stoping and development, during fiscal 2004as compared to fiscal 2003. In addition the Rand appreciated on average by23.9% and the Australian dollar appreciated 22.3% against the U.S. dollarduring fiscal 2004 compared to fiscal 2003, resulting in increased costs inU.S. dollar terms. In Australia, production costs increased primarily due toincreased volumes mined and a shift towards underground mining. In Ghana, productioncosts increased primarily due to increased waste tonnage.

 

*Depreciation and amortization*

 

Depreciationand amortization charges increased $10.5 million, or 5.6%, from$188.1 million in fiscal 2003 to $198.6 million in fiscal 2004.Depreciation and amortization is calculated on the units of production methodand is based on current gold production as a percentage of total expected goldproduction over the lives of the mines. The principal reasons for this increasewas the increase in production at the international operations compounded bythe appreciation of the Rand against the U.S. dollar.

 

Thetable below depicts the changes from June 30, 2002 to June 30, 2003for proven and probable reserves and for the life of mine for each operation,and the resulting impact on the amortization charge in fiscal 2003 and 2004.The life of mine numbers below are taken from the operations’ strategic plans,adjusted for proven and probable reserve balances. In basic terms, amortizationis calculated using the life of mine for each operation, which is based on: (1) theproven and probable reserves above infrastructure for the operation at thestart of the relevant year (which are taken to be the same as at the end of theprior fiscal year and using only above infrastructure reserves) and (2) theamount of gold produced by the operation during the year.

 
| ** **                         | ** ** | **Proven  and probable reserves as of  June 30,** | ** ** | **Life of  mine as of  June 30,** | ** ** | **Amortization  as of June 30,** | ** ** |
|------------------------------------|------------|--------------------------------------------------------|------------|----------------------------------------|------------|---------------------------------------|------------|
| ** **                         | ** ** | **2002**                                               | ** ** | **2003**                               | ** ** | **2002**                              | ** ** | **2003** | ** ** | **2003** | ** ** | **2004** | ** ** |
| ** **                         | ** ** | **(‘000  oz)**                                    | ** ** | **(years)**                            | ** ** | **($ millions)**                 | ** ** |
| Driefontein                        |       | 16,400                                                 |       | 16,000                                 |       | 19                                    |       | 17 |   | 37.2 |   | 49.5 |   |
| Kloof (1)                          |       | 15,300                                                 |       | 15,900                                 |       | 20                                    |       | 18 |   | 34.2 |   | 46.0 |   |
| Free State                         |       |                                                   |       |                                   |       |                                  |       |   |   |   |   |   |   |
| Beatrix (2) (3)               |       | 11,800                                                 |       | 11,800                                 |       | 20                                    |       | 20 |   | 19.5 |   | 22.8 |   |
| St. Helena                         |       | 370                                                    |       | —                                 |       | —                                |       | — |   | — |   | — |   |
| Ghana                              |       |                                                   |       |                                   |       |                                  |       |   |   |   |   |   |   |
| Tarkwa (4)                         |       | 6.500                                                  |       | 9,800                                  |       | 13                                    |       | 14 |   | 16.0 |   | 15.2 |   |
| Damang (5)                         |       | 1,190                                                  |       | 900                                    |       | 4                                     |       | 3 |   | 5.0 |   | 6.8 |   |
| Australia                          |       |                                                   |       |                                   |       |                                  |       |   |   |   |   |   |   |
| St. Ives (6)                       |       | 2,340                                                  |       | 3,000                                  |       | 6                                     |       | 5 |   | 49.4 |   | 41.8 |   |
| Agnew (6)                          |       | 600                                                    |       | 500                                    |       | 4                                     |       | 3 |   | 25.3 |   | 15.3 |   |
| Corporate and other                |       | —                                                 |       | —                                 |       | —                                |       | — |   | 1.5 |   | 1.2 |   |
| Total                              |       | 54,500                                                 |       | 57,900                                 |       | —                                |       | — |   | 188.1 |   | 198.6 |   |
| Reserves below infrastructure  (7) |       | 26,600                                                 |       | 26,600                                 |       | —                                |       | — |   | — |   | — |   |
| Total reserves (8)                 |       | 81,100                                                 |       | 84,500                                 |       | —                                |       | — |   | — |   | — |   |

 

----

Notes:

(1)          A mineral resource study at Kloof during fiscal2001 resulted in adjustments to grade zones, exclusions of certain miningblocks due to lack of adequate ventilation, a reduction in extraction fromshaft pillars amongst other adjustments. The net effect on total reserves was insignificantbut resulted in a movement from above infrastructure reserves to belowinfrastructure reserves at the end of fiscal 2002. As

 

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|   |   | amortization  is calculated using the above infrastructure reserves as its denominator (the  numerator being the produced ounces) the amortization charge for fiscal 2003  increased accordingly.                                                                                                                                              |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)    |   | The  Beatrix operation, formerly called the Free State operation, was renamed  following the sale of the St. Helena mine to Freegold on October 30,  2002.                                                                                                                                                                                |
| (3)    |   | Includes  the former Oryx mine, now designated as Beatrix Shaft No. 4.                                                                                                                                                                                                                                                                    |
| (4)    |   | As  of June 30, 2002 and 2003, reserves of 4.620 million ounces and  6.970 million ounces of gold, respectively, were attributable to Gold  Fields, with the remainder attributable to minority shareholders in the  Tarkwa operation.                                                                                          |
| (5)    |   | As  of June 30, 2002 and 2003, reserves of 0.850 million ounces and  0.640 million ounces were attributable to Gold Fields, with the  remainder attributable to minority shareholders in the Damang operation.                                                                                                                  |
| (6)    |   | The  consideration paid for the Australian operations in excess of the book value  of the underlying net assets was allocated pro rata to the value of the  underlying assets, which affected the allocation of amortization between St.  Ives and Agnew.                                                                                      |
| (7)    |   | Below  infrastructure reserves relate to mineralization which is located at a level  at which an operation currently does not have infrastructure sufficient to  allow mining operations to occur, but where the operation has made plans to  install additional infrastructure in the future which will allow mining to  occur at that level. |
| (8)    |   | As  of June 30, 2002 and 2003, reserves of 78.900 million ounces and  81.500 million ounces of gold, respectively, were attributable to Gold  Fields, with the remainder attributable to minority shareholders in the Ghana  operation.                                                                                         |

 

*Corporate expenditure*

 

Corporateexpenditure was $20.3 million in fiscal 2004 compared to $16.6 million infiscal 2003, an increase of 22.3%. Corporate expenditure consists primarily ofgeneral corporate overhead and corporate service department costs, primarily inthe areas of technical services, human resources and finance, which are used bythe operations. Corporate expenditure also includes business development costs.The increase was due to the appreciation of the Rand against the U.S. dollar asRand costs decreased from R150.8 million in fiscal 2003 toR140.0 million in fiscal 2004 due to higher profits generated by theTreasury Department which are reflected as a credit against these costs.

 

*Employment termination costs*

 

Infiscal 2004, Gold Fields incurred termination costs of $10.5 million ascompared to $3.8 million in fiscal 2003. The increase in employmentterminations costs was primarily as a result of higher retrenchments duringfiscal 2004.

 

*Exploration expenditure*

 

Explorationexpenditure was $39.9 million in fiscal 2004, an increase of 34.8% from$29.6 million in fiscal 2003. The increase was as a result of a deliberateeffort to step up exploration activities, with $6.2 million spent in Southand Latin America in fiscal 2004, compared to $1.9 million in fiscal 2003.Exploration expenditure in fiscal 2004 also included $11.4 million incurred atAPP compared to $6.2 million in fiscal 2003. See “Information on theCompany—Exploration.”

 

*Impairment of assets*

 

Duringfiscal 2004, following a geological study at Beatrix Shaft No. 4 and anassociated revision of the ore reserve, the latest life-of-mine plans indicatedthat future production of gold should be based on 2.0 million ounces asopposed to 2.8 million ounces as previously estimated. At this level ofextraction and at a gold price of $350 per ounce, the life-of-mine plans didnot support the carrying value of the shaft on an undiscounted cash flow basis.Accordingly, an asset impairment of $61.8 million was charged againstincome, which reduced the carrying value of the Beatrix Shaft No. 4 to$11.9 million.

 

Duringfiscal 2004, the potential future income arising from existing and possible newcontracts for Biox® was reevaluated. See “Information on the Company—Researchand Development.” This reevaluation did not support the patent carrying valueand accordingly, an impairment write-down of $5.0 million was recorded, toreflect the fair value of the Biox patent of $15.0 million.

 

Duringfiscal 2004, new regulations were enacted in South Africa that will result inmining companies forfeiting those mineral rights not likely to be mined or explored.GFL Mining Services held certain mineral rights to which this new regulationapplies. The carrying value of these mineral rights was $5.9 million.Accordingly, an impairment write-off of $5.9 million was recorded forthose minerals that would be forfeited as a result of this new regulation.

 

Theallocation of the purchase price to the Agnew and St. Ives mines was based upongeological and other information available to Gold Fields at the purchase date.During fiscal 2003, Gold Fields revised the Agnew life of mine plan based onthe latest reserves and mineralized material. The life of mine plan was revisedbecause the results of the Agnew mine following the acquisition had been belowthose anticipated due to lower recovered gold content and certain events whichrendered certain mineralized material unexploitable. The revised life of mineplan did not support the original allocation of the purchase price to the Agnewmine orebody, mining tenements and undeveloped properties. U.S. GAAP does notpermit a company to reallocate the purchase price more than a year beyond theacquisition date, when sufficient data was available to make the initialpurchase price allocation. Accordingly, an impairment write down of $29.6million was recorded to reflect the Agnew mine assets at their fair value.

 

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*Decrease in post-retirement health care provision*

 

Underthe medical plan which covers certain of its former employees, Gold Fieldsremains liable for 50% of the employees’ medical contribution to the medicalschemes after their retirement. During fiscal 2004 and fiscal 2003, 6% and 61%,respectively, of these former employees and dependants were bought out of thescheme at a 15% premium to the actuarial valuation. At June 30, 2004,approximately 510 (fiscal 2003: 850) former employees were covered under thisplan, which is not available to members of the scheme formerly available toemployees of the Free State operation who retired after August 31, 1997and members of the Medisense medical scheme who retired after January 31,1999. See “Directors, Senior Management and Employees—Employees— Benefits.”

 

Infiscal 2004 an amount of $5.1 million was credited to earnings, comparedto $5.0 million in fiscal 2003, in respect of Gold Fields’ obligationsunder this medical plan, a 2% increase. The $5.1 million credit was theresult of a reversal of $6.2 million relating to the release of the crosssubsidization liability as a result of the buyout and a $2.6 millionrelease as a result of benefits forfeited offset in part by the annual interestand service charge of $3.0 million, and a $0.7 million chargerelating to the 15% premium mentioned above. In fiscal 2003, the credit was theresult of a $13.5 million reversal relating to the release of the crosssubsidization liability as a result of the buyout, offset in part by the annualinterest and service charge of $5.5 million and a $3.0 million chargerelated to the 15% premium. The post-retirement health care provision isupdated annually based on actuarial calculations, with any increase in theprovision reflected in the statement of operations.

 

*Increase in provision for environmental rehabilitation*

 

Forits South African operations, Gold Fields contributes to environmental trustfunds it has established to provide for any environmental rehabilitationobligations and expected closure costs relating to its mining operations. Theamounts invested in the trust funds are classified as non-current assets andany income earned on these assets is accounted for as interest income. For theGhana and Australia operations Gold Fields does not contribute to a trust fund,but does make provision for estimated environmental rehabilitation costs. Fullprovision is made based on the net present value of the estimated cost ofrestoring the environmental disturbance that has occurred up to the balancesheet date. The rehabilitation charge for fiscal 2004 was $8.4 millioncompared to $5.3 million in fiscal 2003 principally because of the appreciationof the Rand against the U.S. dollar.

 

*Interestand dividends*

 

Interestand dividends decreased by $1.9 million or 8.9%, from $21.3 millionin fiscal 2003 to $19.4 million in fiscal 2004. Interest received on cashand cash equivalents was $17.1 million in fiscal 2004 as compared to $19.1million in fiscal 2003, due to lower average cash balances during fiscal 2004compared to fiscal 2003, including a depletion of cash balances at the SouthAfrican operation for several months of the year, as well as lower interestrates. Dividends received were $2.3 million in fiscal 2004 as compared to$2.2 million in fiscal 2003.

 

*Finance (expense)/income*

 

GoldFields recognized a net finance expense of $12.2 million in fiscal 2004 ascompared to finance income of $4.2 million in fiscal 2003. Net financeexpense in fiscal 2004 consisted of interest payments of $27.2 million,comprising $18.2 million on the Mvelaphanda loan and $9.0 million onthe loans used to acquire St. Ives, Agnew and Damang in Australia and Ghana ,offset in part by a $3.6 million unrealized exchange gain on certainoffshore funds denominated in Euros and a $11.4 million realized exchangegain on the Australian loan.

 

Netfinance income in fiscal 2003 consisted of a $4.0 million unrealizedexchange gain on the revaluation of the U.S. dollar loan incurred in connectionwith the acquisition of the Australian operations and a realized exchange gainof $11.5 million on the repayment of $119.5 million of the Australianloans, offset in part by interest payments of $4.8 million and realizedloss of $6.5 million on certain other U.S. dollar denominated accounts inAustralia.

 

*Unrealized gain on financial instruments*

 

GoldFields recognized an unrealized gain of $39.2 million in fiscal 2004compared to an unrealized gain of $35.7 million in fiscal 2003 relating tofinancial instruments.

 

Ofthe $39.2 million unrealized gain in fiscal 2004, $40.2 millionrelated to an unrealized gain on the Australian dollar/U.S. dollar currencyfinancial instruments purchased at the time of the acquisition of St. Ives andAgnew, 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 instrumentspurchased to protect the Group’s commitment of $159.0 million in respectof the Tarkwa mill project and the conversion to owner mining. See “Quantitativeand Qualitative Disclosures About Market Risk— Foreign Currency HedgingExperience.”

 

Ofthe $35.7 million unrealized gain in fiscal 2003, $36.7 millionrelated to the positive mark-to-market valuation as at June 30, 2003 ofthe then remaining Australian dollar/U.S. dollar currency instruments offset by$1.0 million negative mark-to-market valuation as at June 30, 2003 of the$36.0 million U.S. dollar/Rand currency financial instruments purchased toprotect the Group’s commitment in respect of the Tarkwa mill project and theshift to owner mining projects, of $159.0 million.

 

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*Realized gain on financial instruments*

 

GoldFields recognized a realized loss of $8.7 million in fiscal 2004 comparedto a realized gain of $15.1 million in fiscal 2003 relating to financialinstruments.

 

Ofthe $8.7 million realized loss in fiscal 2004, a loss of$13.0 million was realized on the settlement of the U.S. dollar/Randforward purchases offset in part by a $4.3 million gain on the U.S.dollar/Australian dollar financial instruments purchased at the time of theacquisition of St. Ives and Agnew.

 

Ofthe $15.1 million realized gain in fiscal 2003, $10.5 million wasrealized on the close-out of $175.0 million of the Australian dollar/U.S.dollar currency financial instruments purchased at the time of the acquisitionof St. Ives and Agnew during fiscal 2004. The balance of $4.6 million relatesto the amortization of deferred hedging gains relating to Abosso Goldfieldsforward sales contracts that Gold Fields acquired in connection with thepurchase of Abosso.

 

*Profit on disposal of listed investments*

 

Duringfiscal 2004, Gold Fields continued to liquidate certain non-current investmentsin order to fund foreign debt repayments. The profit on the sale of theseinvestments amounted to $13.9 million resulting from the following sales:

 
| • |   | $7.7 million  from the sale of 1.2 million shares in Harmony Gold Mining Company  Limited and African Rainbow Minerals Limited; |   |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|--------|
| • |   | $2.1 million  from the sale of 0.9 million shares in Chesapeake Gold Corporation;                                               |   |
| • |   | $1.0 million  from the sale of 0.1 million shares in Glamis Gold Limited;                                                       |   |
| • |   | $1.5 million  from the sale of 2.5 million shares in Orezone Resources Inc; and                                                 |   |
| • |   | $1.6 million  from the sale of 1.3 million shares in Committee Bay.                                                             |   |

 

Duringfiscal 2003, the profit on the sale of non-current investments amounted to$57.2 million resulting from the following sales:

 
| • |   | $42.4 million  from the sale of 30.5 million shares in Eldorado Gold Corporation;           |   |
|--------|--------|-------------------------------------------------------------------------------------------------------|--------|
| • |   | $13.1 million  from the sale of 1.5 million shares in Glamis Gold Limited;                  |   |
| • |   | $1.5 million  from the sale of 0.4 million shares in African Rainbow Minerals Limited;  and |   |
| • |   | $0.2 million  from the sale of 73,000 shares in Chesapeake Gold Corporation.                     |   |

 

*Profit on sale of mineral rights*

 

Duringfiscal 2004, mineral rights and associated assets relating to a portion ofDriefontein were sold for $45.7 million to AngloGold, resulting in aprofit of $27.1 million.

 

*Write-down of mineral rights*

 

Duringfiscal 2004, mineral rights classified as inventories to the value of$3.6 million were written-off. This is in line with new regulations inSouth Africa that will result in mining companies forfeiting those mineralrights

 

notlikely to be mined or explored.

 

*Other(expenses)/income*

 

Otherincome decreased by $1.3 million, from $3.4 million in fiscal 2003 to$2.1 million in fiscal 2004. Other income in fiscal 2004 consisted of$6.8 million in revenues, comprised principally of mineral right sales,rent and a rebate received from J.P. Morgan net of $4.7 million in otherexpenses comprised principally of payments to The Business Trust and sundryprofessional fees. Other income in fiscal 2003 consisted of $4.7 millionin revenues, comprised principally of rent, proceeds from insurance claims andscrap sales, net of $0.1 million in other expenses.

 

*Income and Mining Tax Expense*

 

Thetable below indicates Gold Fields’ effective tax rate for fiscal 2003 andfiscal 2004, including normal and deferred tax.

 

| ** **                 | ** ** | **Year ended June 30,** | ** ** |
|----------------------------|------------|------------------------------|------------|
| **Income  and mining tax** | ** ** | **2003**                     | ** ** | **2004** | ** ** |
| Effective tax expense rate |       | 32.9                         | %          | 14.3 | % |

 

Infiscal 2004, the effective tax expense rate of 14.3% differed from the maximummining statutory tax rate of 46% for Gold Fields and the subsidiaries as awhole, primarily due to the effect of the mining tax formula of$7.0 million (representing the tax-free status of the first 5% of 

 

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miningrevenue) on the South African mining operations’ taxable income and$15.1 million of non-taxable income primarily related to the profit onsale of certain investments. In addition, the tax expense rate is lower due toa credit of $17.6 million relating to income from Australia and Ghanabeing taxed at a lower rate. The effect of these items was partially offset byan amount of $19.8 million relating to foreign levies and royalties, whichis included in the tax charge.

 

In fiscal2003, the effective tax rate expense of 32.9% differed from the maximum miningstatutory tax rate of 46% for Gold Fields and its subsidiaries as a whole,primarily due to the effect of the mining tax formula of $18.4 million(representing the tax-free status of the first 5% of mining revenue) on theSouth African mining operations’ taxable income, the utilization of assessedlosses of $13.7 million mainly related to the disposal of the St. Helenamine not previously recognized and $30.6 million of non taxable incomerelated primarily to the profit on the sale of certain investments. The effectof these items was offset in part by an amount of $16.1 million relatingto foreign levies and royalties, which is included in the tax charge.

 

*Minority Interests*

 

Minorityinterests represented a cost of $21.8 million in fiscal 2004, compared toa cost of $14.4 million in fiscal 2003. The increase is due to the highernet income of the Ghanaian operations in fiscal 2004 compared to fiscal 2003.These amounts reflect the portion of the net income of Gold Fields Ghana, andAbosso attributable to their minority shareholders. The minority shareholders’interest was 28.9% in Gold Fields Ghana and Abosso in fiscal 2004 and fiscal2003.

 

*Net(Loss)/Income*

 

As aresult of the factors discussed above, Gold Fields net income was $48.9 millionin fiscal 2004 compared with net income of $257.0 million in fiscal 2003.

 

**Liquidity and Capital Resources**

 

***Cash resources***

 

*Operations*

 

Netcash provided by operations in fiscal 2005 was $181.9 million compared to$198.4 million 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.

 

Theincreased revenues were offset in part by a $145.4 million increase inproduction costs, which increased from $1,355.2 million in fiscal 2004 to$1,500.6 million in fiscal 2005. In addition, Gold Fields incurred costs of $50.8million and $9.3 million on the Harmony hostile bid and the IAMGold transaction,respectively. The net effect of this was a $12.0 million increase in cash flowprovided by operations before taxation and working capital changes. Thedecrease in taxes paid of $37.3 million was largely offset by the $29.6 millionincrease in working capital changes.

 

Netcash provided by operations was $198.4 million in fiscal 2004 compared to$411.4 million in fiscal 2003. In fiscal 2004, Gold Fields’ realized goldprice increased to an average of $387 per ounce compared to $333 per ounce infiscal 2003. Sales in fiscal 2004 decreased by 0.2 million ounces but theincrease in the realized price resulted in revenues from product salesincreasing by $168.0 million in fiscal 2004 to $1,706.2 millioncompared to $1,538.2 million in fiscal 2003. The increased revenues weremore than offset by a $340.2 million increase in production costs, whichincreased from $1,015.0 million in fiscal 2003 to $1,355.2 million infiscal 2004. The net effect was a decrease in cash flow provided by operationsbefore taxation and working capital changes. The decrease in cash provided byoperations was partly offset by an increase in working capital changes of$21.8 million.

 

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 theCompany—Regulatory and Environmental Matters—South Africa—Exchange Controls.”As a result, those revenues are generally not available to service Gold Fields’non-Rand debt obligations or to make investments outside South Africa withoutthe approval of the South African Reserve Bank.

 

Revenuesfrom Gold Fields’ Ghanaian and Australian operations are also denominated inU.S. dollars, but unlike in South Africa, Gold Fields receives them in U.S.dollars or is freely able to convert them into U.S. dollars. These U.S. dollaramounts can be used by Gold Fields to service its U.S. dollar-denominated debtand to make investments in its non-South African operations.

 

*Investing*

 

Netcash utilized in investing activities was $318.3 million in fiscal 2005compared to $400.2 million in fiscal 2004. The decrease in net cash utilized of$81.9 million was primarily due to a decrease in capital expenditure of $60.2million and a decrease in purchases of investments of 

 

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$49.0million. In addition, proceeds on disposal of property, plant and equipmentwere lower by $46.6 million in fiscal 2005 and in fiscal 2004 $45.7 million wasreceived from the sale of Driefontein Block 1C11 to AngloGold while $23.0million was spent on the acquisition of the minority interest in the ArcticPlatinum Project.

 

Netcash utilized in investing activities was $400.2 million in fiscal 2004compared to $150.6 million in fiscal 2003. The increase in net cashutilized of $249.6 million was primarily due to an increase in capitalexpenditure of $153.6 million and an increase in investments purchased of$72.4 million. This was partially offset by the $55.0 millionincrease in the proceeds on the disposal of property, plant and equipment from$1.8 million in fiscal 2003 to $56.8 million in fiscal 2004. Thisamount included the $45.7 million received from the sale of Driefonteinblock 1C11 to AngloGold Ashanti with the balance of $11.1 million relatedmainly to the sale of shares received in exchange for the sale of variousnickel mineral rights at the Australian operations in fiscal 2004.

 

Proceedsfrom the sale of listed investments decreased from $29.3 million in fiscal 2004to $18.6 million in fiscal 2005. The investment disposals comprising the $18.6million in fiscal 2005 were:

 
| •  |   | $13.9  million from the sale pf Zijin Mining Group Company Limited shares; |   |
|--------------|--------|----------------------------------------------------------------------------|--------|
| •  |   | $3.2  million from the sale of African Eagle Resources Plc shares; and     |   |
| •  |   | $1.5  million from the sale of Radius Gold Incorporated shares.            |   |

 

Proceedsfrom the sale of listed investments decreased from $72.1 million in fiscal2003 to $29.3 million in fiscal 2004. The $29.3 million in fiscal2004 comprised the following sales:

 
| •  |   | $19.6 million  from the sale of 1.2 million shares in Harmony Gold Mining Company  Limited and African Rainbow Minerals Limited; |   |
|--------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
| •  |   | $2.1 million  from the sale of 0.9 million shares in Chesapeake Gold Corporation;                                                |   |
| •  |   | $1.1 million  from the sale of 0.1 million shares in Glamis Gold Limited;                                                        |   |
| •  |   | $1.9 million  from the sale of 2.5 million shares in Orezone Resources Inc.;                                                     |   |
| •  |   | $2.0 million  from the sale of 1.3 million shares in Committee Bay; and                                                          |   |
| •  |   | $2.6 million  from the sale of various other shares.                                                                                  |   |

 

Duringfiscal 2005 Gold Fields received $7.5 million from the disposal of its interestin the Angelina exploration project in Chile to its joint venture partnerMeridian Gold Incorporated. The consideration for the sale also includes a 2%net smelter royalty on the majority of land within the joint venture.

 

Capitalexpenditure decreased by $60.2 million to $317.7 million in fiscal 2005compared to $377.9 million in fiscal 2004. Capital expenditure was $224.3million in fiscal 2003. In Rand terms, capital expenditure decreased toR1,973.6 million in fiscal 2005 from R2,607.6 million in fiscal 2004 andR2,035.5 million in fiscal 2003. The decrease in capital expenditure was mainlydue to the lower spending on growth projects at Tarkwa in Ghana and St. Ives inAustralia due to most of these costs being incurred in fiscal 2004 and thecurtailing of capital expenditure in South Africa due to the lower rand goldprice.

 

Expenditureon Gold Fields’ major capital projects in fiscal 2005 included:

 
| •  |   | $21.7  million on the Beatrix Shaft No. 3 expansion project, as compared to  $24.7 million in fiscal 2004 and $23.9 million in fiscal 2003;                    |   |
|--------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| •  |   | $19.1  million on the Shaft No. 1 and Shaft No. 5 projects at Driefontein,  as compared to $20.1 million in fiscal 2004 and $38.1 million in fiscal 2003; |   |
| •  |   | $16.9  million on the Shaft No. 4 project at Kloof as compared to $25.0 million  in fiscal 2004 and $24.6 million in fiscal 2003;                              |   |
| •  |   | $46.6  million on the St. Ives mill, expansion project, compared to $45.7 in fiscal  2004 and $nil in fiscal 2003;                                                  |   |
| •  |   | $25.7  million on the Tarkwa CIL process plant, as compared to $75.9 million in  fiscal 2004 and $2.0 in fiscal 2003;                                               |   |
| •  |   | $16.1  million on the Tarkwa owner mining project, as compared to $55.3 million in  fiscal 2004 and $nil in fiscal 2003; and                                        |   |
| •  |   | $11.8  million on the Songvang open pit at Agnew, as compared to $nil in fiscal 2004  and 2003.                                                                     |   |

 

The$30.4 million spent on the purchase of investments in fiscal 2005 was made upof:

 
| •  |   | $18.7  million invested in Comaplex Corporation:                                                                                                                                               |   |
|--------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| •  |   | $1.5 million invested in Avoca Resources  Limited;                                                                                                                                             |   |
| •  |   | $1.5 million invested in African Eagle  Resources Plc on the exercising of warrants held;                                                                                                      |   |
| •  |   | $6.8 million lent to GBF, the open pit mining  contractor at St. Ives, in terms of the alliance agreement between St. Ives  and GBF to fund the purchase of mining equipment used on site; and |   |
| •  |   | $1.9 million on other investments.                                                                                                                                                             |   |

 

The$79.4 million spent on the purchase of investments in fiscal 2004 was made upof:

 

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| •  |   | $14.5 million of shares in Mvela Resources’                                  |   |
|--------------|--------|-----------------------------------------------------------------------------------|--------|
| •  |   | $29.0 million of redeemable preference shares  in Micawber (Proprietary) Limited; |   |
| •  |   | $12.6 million of shares in Bolivar Gold  corporation;                             |   |
| •  |   | $7.7 million of shares in Zijin Mining Group  Company Limited;                    |   |
| •  |   | $2.8 million of shares in CMQ Resources Inc.;  and                                |   |
| •  |   | $12.8 million of shares on numerous other  investments.                           |   |

 

*Financing*

 

Netcash utilized in financing activities was $11.4 million in fiscal 2005 ascompared to net cash provided by financing activities of $682.2 million infiscal 2004. The main reason for the movement was that fiscal 2004 included theproceeds of the $586.7 million loan ($591.3 million less costs of $4.6 million)raised as a result of the Mvelaphanda transaction. See “ — Overview — MvelaphandaTransaction.” In addition, in fiscal 2004 Gold Fields raised $215.9 millionfrom shares issued as a result an international private placement of Gold Fieldsshares. In fiscal 2005, $3.6 million was received as a result of share optionsexercised, as compared to $3.8 million in fiscal 2004.

 

Dividendspaid amounted to $54.5 million in fiscal 2005 compared to $92.6 million infiscal 2004. The amount of dividends paid was lower than in fiscal 2004principally due to the lower net income on which the dividend is calculated,partly offset by the stronger Rand/US dollar exchange rate. Dividend paymentsin fiscal 2005 amounted to Rand 344.5 million or 70 SA cents per ordinary shareas compared to Rand 669.1 million or 140 SA cents per ordinary share in fiscal2004. During fiscal 2005, Tarkwa and Damang each paid dividends and theminority shareholders’ share of these payments was $17.3 million.

 

Duringfiscal 2005, $36.2 million was received on the close out of the interest rateswap entered into in connection with the Mvela loan.

 

Netcash provided by financing activities was $682.2 million in fiscal 2004 ascompared to net cash utilized in financing activities of $335.8 million infiscal 2003. The increase in cash provided from financing was due primarily tothe loan of $586.7 million raised as a result of the Mvelaphanda transactionand $219.7 million received from shares issued mainly as a result of aninternational private placement. The international private placement raised$215.9 million. In fiscal 2004, $3.8 million was received as a result of shareoptions exercised, as compared to $4.5 million in fiscal 2003.

 

Inaddition, during fiscal 2004 Gold Fields repaid the $28.6 million balance owingon the $165.0 million drawdown on the $250.0 million credit facility enteredinto in connection with the purchase of the St. Ives and Agnew operations. Italso repaid the $12.2 million balance owing on $35.0 million remaining on the$50.0 million two-year facility to finance the acquisition of 71.1% of Abosso.In fiscal 2003, the amounts repaid were $119.5 million and $20.9 million,respectively.

 

Dividendspaid amounted to $92.6 million in fiscal 2004 as compared to $184.3 million infiscal 2003. The amount of dividends paid was lower than in fiscal 2003principally due to the lower net income on which the dividend is calculated,partially offset by the stronger Rand/U.S. dollar exchange rate. Dividendpayments amounted to Rand 669.1 million or 140 SA cents per ordinary share ascompared to Rand 1,746.4 million or 370 SA cents per ordinary share in fiscal2003.

 

**Credit Facilities**

 

As of the date of this annual report, Gold Fieldshas no committed unutilized banking facilities. Substantial contractualarrangements for uncommitted borrowing facilities are maintained with severalbanking counterparties to meet Gold Fields’ normal contingency fundingrequirements.

 

Duringfiscal 2006, Gold Fields expects to enter into a project finance facility ofapproximately $150 million to fund capital costs in connection with the CerroCorona project. In addition, GoldFields may in the future undertake further acquisitions of mining assets. Inthe event that Gold Fields does undertake any such acquisition, it may need toincur further debt or arrange other financing to fund any costs of theacquisition, which could have an adverse effect on Gold Fields’ liquidity,including increasing its level of debt.

 

***Australia Acquisitions***

 

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.

 

Theterms of the credit facility also required Gold Fields to maintain a foreignexchange hedging strategy over the life of the loan to reduce the impact offluctuations in the Australian dollar/U.S. dollar exchange rate on the cashflow from St. Ives and Agnew. See “Quantitative and Qualitative DisclosureAbout Market Risk—Foreign Currency Sensitivity.”

 

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Thefacility consisted of a $160.0 million term loan facility and a $90.0million revolving credit facility. The principal of the term loan facility wasrepayable in ten equal semi-annual installments over five years, with the firstrepayment of $16.0 million paid in May 2002. During fiscal 2003, GoldFields repaid $114.5 million of the $160.0 million term loan facilityand repaid the full $5.0 million drawn down on the revolving creditfacility. 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 balance owing on the term loan facility. The $90 millionrevolving credit facility was cancelled with effect from October 20, 2004.

 

***Damang Acquisition***

 

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 million bilateral two-year term loan and the balance of$12.1 million was fully repaid by December 31, 2003. The $2.0 millionletter of credit facility terminated on June 30, 2003. Also, on January 23,2002, Gold Fields utilized the full amount of $15.0 million availableunder a two-year term loan facility dated December 31, 2001 into betweenGold Fields and several of its subsidiaries and Barclays Capital and BarclaysBank of Ghana Limited. By June 2002, Gold Fields repaid in full the$15.0 million term loan facility.

 

***Mvela Loan***

 

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 of GoldFields, 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 Guernsey. 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 any merger orsimilar transaction, or (iii) encumber its assets. The Mvela Loan willbecome immediately due and payable upon the occurrence of an event of default.See “—Overview—Mvelaphanda Transaction.”

 

TheMvela Loan was funded by way of commercial bank debt of approximately Rand1,300 million and mezzanine finance of approximately Rand 1,100 million,with the balance of approximately Rand 1,700 million being raised by wayof an international private placement of shares of Mvela Resources. Inconnection with the mezzanine finance, Gold Fields subscribed for preferenceshares in an amount of Rand 200 million in Micawber. Further, Gold Fieldssubscribed for Rand 100 million of the shares issued by Mvela Resources inthe private placement. In addition, pursuant to the PIC Agreement, Gold Fieldshas effectively guaranteed the PIC Loan. Interest on the PIC loan accrues atthe rate of 14.25%, is compounded semi-annually and is payable in one lump sumat the end of the term of the loan. Under the terms of the PIC Agreement, thePIC 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 Rand200 million from Mvela Resources, at a price equal to the value of theprincipal and interest of the PIC Loan, if, at the time the PIC Loan is due forrepayment, Micawber does not repay the loan in full. Whether or not the PICrequires Gold Fields to assume its rights and obligations under the PIC loan,the PIC is obligated to pay a guarantee fee to Gold Fields equal to 3.75% perannum of the value of the principal and interest payable under the PIC Loan onthe date on which the PIC Loan is repaid to the PIC.

 

GFIMSAapplied the net proceeds of the Mvela Loan of $586.7 million (R4,139million less R32 million of costs at an exchange rate of R7.00 to $1.00)toward funding its acquisition of Gold Fields’ South African mining operationsand certain ancillary assets and operations as part of an internalrestructuring of Gold Fields. In connection with the Mvela Loan, GFIMSA enteredinto two interest rate swaps, both of which were designated as fair valuehedges and which were accounted for as a single swap. The fixed rate receivableon the interest rate swap was equal to the interest rate payable on the loanfrom Mvela Gold and the floating rate payable was the three month JohannesburgInter-Bank Acceptance Rate, or JIBAR, plus a margin of 1.025%. The interestrate swap was closed out on June 3, 2005 with the loan reverting to thefixed interest rate mentioned above. Gold Fields realized mark-to-market gainson the swap of $36.2 million and interest rate credits of $14.8 million, givinga total gain of $51.0 million. Of the $36.2 million realized mark-to-marketgain, $0.8 million was accounted for in fiscal 2005 with the balance of $35.4million to be accounted for in fiscal 2006 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 —Interest Rate Hedging Experience.”

 

***Living Gold 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, 2005, that rate was 10.5%. The loan is repayable in96 monthly installments 

 

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beginningon July 1, 2006.

 

***Bolivar Acquisition***

 

GoldFields has agreed summary terms of, and expects to enter into, a $200.0 millionterm loan facility with an interest rate LIBOR plus 0.35% per year and a termof three years to fund in part the acquisition of Bolivar Gold Corp and forgeneral corporate purposes. The facility is subject to negotiation andexecution of final documentation which is expected to include customary covenantsby Gold Fields, including financial covenants. See “— Recent Developments — Acquisition of Bolivar Gold Corp.” 

 

**Capital expenditure**

 

Capitalexpenditure was $317.7 million in fiscal 2005, compared to $377.9 million infiscal 2004. See “—Cash resources—Investing.” Gold Fields expects to incurapproximately Rand 2.2 billion ($331.2 million) in capital expenditure infiscal 2006, which it expects to finance from internal sources and, to theextent required, credit facilities. Details regarding the specific capitalexpenditure for each operation are found in the individual operation sectionsunder “Information on the Company—Gold Fields’ Mining Operations.”

 

**Contractual obligations and commitments as at June 30,2005**

 
| ** **                                                      | ** ** | **Payments due by period** | ** ** |
|-----------------------------------------------------------------|------------|----------------------------|------------|
| ** **                                                      | ** ** | ** **                 | ** ** | **Less than** | ** ** | **12-36** | ** ** | **36-60** | ** ** | **After 60** | ** ** |
| ** **                                                      | ** ** | **Total**                  | ** ** | **12 months** | ** ** | **months** | ** ** | **months** | ** ** | **months** | ** ** |
| ** **                                                      | ** ** | **($ millions)**      | ** ** |
| **Long-term debt (1)**                                          |       |                       |       |   |   |   |   |   |   |   |   |
| Mvelaphanda Gold (Proprietary)  Limited (5 years) (2)      |       |                       |       |   |   |   |   |   |   |   |   |
| Capital                                                         |       | 650.6                      |       | — |   | 650.6 |   | — |   |   |   |
| Interest                                                        |       | 274.8                      |       | 65.3 |   | 130.6 |   | 78.9 |   | — |   |
| Industrial Development  Corporation of South Africa Limited (3) |       |                       |       |   |   |   |   |   |   |   |   |
| Capital                                                         |       | 2.5                        |       | — |   | 0.6 |   | 0.6 |   | 1.3 |   |
| Interest                                                        |       | 1.3                        |       | 0.2 |   | 0.5 |   | 0.3 |   | 0.3 |   |
| Capital lease obligations —  building                      |       | 3.3                        |       | 0.7 |   | 1.4 |   | 1.2 |   | — |   |
| **Other long-term obligations**                                 |       |                       |       |   |   |   |   |   |   |   |   |
| Post-retirement healthcare (4)                                  |       | 9.0                        |       | 0.4 |   | 0.8 |   | 0.8 |   | 7.0 |   |
| Environmental obligations (5)                                   |       | 134.6                      |       | 1.6 |   | 3.2 |   | 3.2 |   | 126.6 |   |
| Total contractual cash  obligations                             |       | 1,076.1                    |       | 68.2 |   | 137.1 |   | 735.6 |   | 135.2 |   |

 

----

Notes:
| (1) |   | Gold  Fields is party to certain long-term credit facilities, entered into in  connection with the Mvelaphanda transaction and by Living Gold (Pty) Limited  with the Industrial Development Corporation of South Africa Limited. See “ —  Liquidity and Capital Resources — Credit Facilities.”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | On  March 17, 2004, Mvelaphanda Gold advanced an amount of $591.3 million to  GFIMSA. The loan amount is repayable five years from the date of advance and  interest is payable semi-annually. Pursuant to the Subscription and Share  Exchange Agreement, upon repayment of the Mvela Loan, Mvela Gold must  subscribe for shares equal to 15% of GFIMSA’s outstanding share capital,  including the newly issued shares. In addition, for a period of one year  after the subscription by Mvela Gold of the GFIMSA shares, each of Gold  Fields and Mvela Gold will be entitled to require the exchange of Mvela  Gold’s GFIMSA shares for ordinary shares of Gold Fields of an equivalent  value based on an exchange ratio equal to 15% of a discounted cash flow  calculation as applied to GFIMSA’s operations divided by the same calculation  as applied to Gold Fields’ operations, with certain adjustments. See “—  Overview — General — Mvelaphanda Transaction.” |
| (3) |   | On  May 28, 2004 Living Gold (Pty) Limited, a subsidiary of GFI Mining South  Africa (Pty) Limited entered into an agreement with the Industrial  Development Corporation of South Africa Limited in terms of which it would  provide a $2.5 million loan facility to Living Gold (Pty) Limited. The loan  is repayable in 96 equal monthly installments commencing on July 1,  2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4) |   | Gold  Fields’ provision for post-retirement healthcare obligations increases  annually based on the expected increases in the level of individual  contributions in order to settle its obligations to its former employees, set  off by payments made on behalf of certain pensioners and dependants of former  employees on a pay-as-you-go-basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (5) |   | Gold  Fields makes full provision for all environmental obligations based on the  net present value of the estimated cost of restoring the environmental  disturbance that has occurred up to the balance sheet date. This provision  increases annually based on expected inflation. Management believes that the  provisions made for environmental obligations are adequate to direct the  expected volume of such obligations. See “— Significant Accounting Policies —  Environmental rehabilitation costs.”                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

 

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| ** **                       | ** ** | **Amount of commitments expiring  by period** | ** ** |
|----------------------------------|------------|-----------------------------------------------|------------|
| ** **                       | ** ** | ** **                                    | ** ** | **Less than** | ** ** | **12-36** | ** ** | **36-60** | ** ** | **After 60** | ** ** |
| ** **                       | ** ** | **Total**                                     | ** ** | **12 months** | ** ** | **months** | ** ** | **months** | ** ** | **months** | ** ** |
| ** **                       | ** ** | **($ millions)**                         | ** ** |
| **Other commercial commitments** |       |                                          |       |   |   |   |   |   |   |   |   |
| Lines of credit                  |       | —                                        |       | — |   | — |   | — |   | — |   |
| Standby letters of credit        |       | —                                        |       | — |   | — |   | — |   | — |   |
| Guarantees (1)                   |       | 51.3                                          |       | — |   | — |   | 26.8 |   | 24.5 |   |
| Standby repurchase obligations   |       | —                                        |       | — |   | — |   | — |   | — |   |
| Capital expenditure (2)          |       | 23.8                                          |       | 23.8 |   | — |   | — |   | — |   |
| Total commercial commitments     |       | 75.1                                          |       | 23.8 |   | — |   | 26.8 |   | 24.5 |   |

 

----

| Notes: |   |                                                                                                                                                                                                                                                                                                                  |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    |   | Guarantees  consist of $23.3 million committed to guarantee Gold Fields’ environmental  rehabilitation obligations with respect to its Ghanaian and Australian  operations, $26.8 million to the Public Investment Commissioners with regard  to the Mvela loan and $1.2 million for numerous other obligations. |
| (2)    |   | Capital  expenditure consists only of amounts committed to external suppliers,  although as of June 30, 2005 an amount of $454.6 million in respect of  capital expenditure had been approved by Gold Fields’ Board.                                                                                        |

 

**Working capital**

 

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**

 

Aspart of the Mvelaphanda Transaction, Mvela Gold is obliged to subscribe for 15%of the share capital of GFIMSA. Under the Subscription and Share ExchangeAgreement entered into in connection with the Mvelaphanda Transaction, for aperiod of one year after the subscription of the GFIMSA shares each of GoldFields and Mvela Gold will be entitled to require the exchange of Mvela Gold’sGFIMSA shares for ordinary shares of Gold Fields of an equivalent value, but numberingnot less than 45,000,000 and not more than 55,000,000 Gold Fields’ ordinaryshares, adjusted as necessary to reflect changes to Gold Fields’ capitalstructure and certain corporate activities of Gold Fields. Shareholders’ equityinterests in Gold Fields will be diluted if Gold Fields or Mvela Gold requiresthe exchange of GFIMSA shares for Gold Fields’ shares. See “— Overview —General — Mvelaphanda Transaction.”

 

Other than the Mvelaphanda Transaction, at June 30,2005 Gold Fields had no off balance sheet items.

 

**Recent Developments**

 

***Cerro Corona Project***

 

Following approval of the environmental impactassessment for the Cerro Corona Project by the Peruvian Ministry of Energy andMines on December 2, 2005, Gold Fields has now commenced steps to completethe purchase of an 80.7% economic interest and 92% voting interest in the CerroCorona Project.  See “Information on theCompany — Exploration — Gold Fields’ Exploration Projects — Cerro CoronaProject.”

 

***Acquisition of Bolivar Gold Corp.***

 

On November 21, 2005, Gold Fields and Bolivar Gold Corp., orBolivar, jointly announced that they had entered into an agreement providingfor Gold Fields to acquire, through a court approved plan of arrangement, allof the outstanding securities of Bolivar not currently held by Gold Fields fortotal cash consideration of approximately $330 million. Holders of Bolivarcommon shares will be offered C$3.00 per Bolivar common share and holders ofBolivar warrants expiring on March 17, 2008, August 25, 2008 and December 22,2009 will be offered C$1.90, C$1.25 and C$0.90 per warrant, respectively. Theconsideration for the warrants expiring on March 17, 2008, and August 25,2008, is calculated based on the amount of consideration per common share minusthe warrant strike price and the consideration for the warrants expiring on December 22,2009, is calculated based on a premium equal to the premium payable to commonshareholders based on the closing price of the common shares on November 18,2005. Furthermore, the transaction will trigger the redemption of C$26 millionprincipal amount of convertible debentures of Bolivar at a redemption price ofC$1,905.25 in cash per C$1,000 principal amount of debentures for a totalamount of $24.1 million, which is included in the total purchase considerationreferred to above.

 

Gold Fields currently holds approximately 15.5% of the common sharesand 32% of the warrants expiring on August 25, 2008, which isapproximately 16% of the total warrants outstanding. Definitive agreementdocumentation was executed on December 1, 2005, and the SARB has approvedthe proposed transaction.

 

Each of Gold Fields’ and Bolivar’s Boards of Directors have voted toapprove the transaction and it is anticipated that the transaction will closein January 2006, subject to, among other things, satisfaction of thefollowing principal conditions precedent:

 

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| •  |   | court approval of the plan of arrangement;                                                                                                                                                                              |   |
|--------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| •  |   | approval by two-thirds of the holders of common  shares of Bolivar present in person or by proxy at an extraordinary general  meeting of Bolivar to be held to approve the transaction;                                 |   |
| •  |   | approval by two-thirds of the holders of warrants  of Bolivar, voting together as a single class, present in person or by proxy  at an extraordinary general meeting of Bolivar to be held to approve the  transaction; |   |
| •  |   | no more than 10% of holders of Bolivar common  shares exercising dissent rights; and                                                                                                                                    |   |
| •  |   | approval, to the extent necessary, of any  regulatory authorities having jurisdiction over the transaction.                                                                                                             |   |

 

Bolivar is listed on the Toronto Stock Exchange and operates the Choco10 open pit gold mine in the El Callao gold district in the Bolivar State,Venezuela.

 

***ArcticPlatinum Joint Venture with NAP***

 

On October 18,2005, Gold Fields announced that it had entered into a letter of intent withNorth American Palladium, or NAP, a Canadian platinum metals group producer, toform a joint venture to further explore mining properties and develop a mine atAPP. APP’s location and geology are similar to that of NAP’s other propertiesand it is expected that NAP will be able to utilize its operating anddevelopment experience in the design and construction of a mine at APP. Theletter of intent provides that NAP will be granted an option to acquire up to a60% undivided interest in APP including the Suhanko, SJ Reef and SK Reef miningproperties and claims located south of Rovaniemi, Finland. NAP’s option toacquire its interest in APP will vest upon NAP satisfying the following conditionson or before June 30, 2008: (i) completing a $7.5 million re-scopingstudy and exploration program and $5.0 million feasibility study; (ii) makinga decision to develop a mine at APP; and (iii) paying Gold Fields up to$45.0 million through the issuance of NAP common shares. The price per sharewill be $4.88, which is the weighted average trading price of NAP’s commonstock on the American Stock Exchange for 11 trading days commencing October 11,2005. During the next stage of work, NAP is expected to manage the exploration,engineering and evaluation activity on APP. This work is to be divided into twophases, Phase I, a re-scoping study, and Phase II, a feasibility study. Theproposed exploration program will focus on APP’s SK Reef and SJ Reef projects.The feasibility study is expected to generate a report with sufficientengineering detail and cost estimates in order for the APP****tobe considered for project financing or other suitable financing alternatives.

 

There-scoping and feasibility studies are expected to commence in the firstquarter of 2006 and take approximately 30 months to complete. It is expectedthat a joint venture will be formed with NAP holding a 60% interest and GoldFields holding a 40% interest. Gold Fields would have a back-in right toacquire an additional 10% interest in the joint venture to be paid for byreducing the number of NAP common shares issued to Gold Fields by 20%. NAPwould remain operator of the joint venture which would be managed under a jointventure arrangement. Completion of the transaction is subject to a number ofconditions including, among other things, negotiating and executing a formaloption and joint venture agreement and receipt of all required regulatory andthird party approvals and consents, including certain regulatory approvals,such as the South African Reserve Bank.

 

See “Informationon the Company — Recent Developments.”

 

**Trend and Outlook**

 

Duringthe first quarter of fiscal 2006, Gold Fields’ operating profit was lower whilenet earnings were higher than that achieved in the fourth quarter of fiscal2005. The lower operating profit was primarily due to the slightly lowerproduction. Net earnings in the first quarter of fiscal 2006 were higher mainlydue to the absence of the impairment charges taken in the fourth quarter offiscal 2005.

 

Goldproduction is expected to increase at the Gold Fields operations in the secondquarter of fiscal 2006 compared with the first quarter. Should the Rand andU.S. dollar gold prices stay at current levels revenues and operating margins,including at the South African operations, are expected to increase.

 

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**Item 6: DIRECTORS, SENIORMANAGEMENT AND EMPLOYEES**

 

**Directors**

 

GoldFields’ directors and their ages and positions are:

 
| **Name**                   | ** ** | **Age** | ** ** | **Position**                                    | ** ** | **Term Expires**        | ** ** |
|----------------------------|------------|---------|------------|-------------------------------------------------|------------|-------------------------|------------|
| Alan  J. Wright(1)         |       | 64      |       | Non-executive  Chairman                         |       | November 13,  2008 |       |
| Ian  D. Cockerill          |       | 51      |       | Executive  Director and Chief Executive Officer |       | November 16,  2006 |       |
| Nicholas  J. Holland       |       | 47      |       | Executive  Director and Chief Financial Officer |       | November 16,  2006 |       |
| Rupert  L. Pennant-Rea     |       | 57      |       | Non-executive  Director                         |       | November 16,  2006 |       |
| Jakes  G. Gerwel           |       | 59      |       | Non-executive  Director                         |       | November 16,  2006 |       |
| Chris  I. von Christierson |       | 58      |       | Non-executive  Director                         |       | November 13,  2008 |       |
| J.  Michael McMahon        |       | 59      |       | Non-executive  Director                         |       | November 15,  2007 |       |
| Patrick  J. Ryan           |       | 68      |       | Non-executive  Director                         |       | November 15,  2007 |       |
| Tokyo  M. G. Sexwale       |       | 52      |       | Non-executive  Director                         |       | November 15,  2007 |       |
| Kofi  Ansah                |       | 61      |       | Non-executive  Director                         |       | November 15,  2007 |       |
| Artem  Grigorian(2)        |       | 48      |       | Non-executive  Director                         |       | November 13,  2008 |       |
| Sergei  Stefanovich(2)     |       | 35      |       | Non-executive  Director                         |       | November 13,  2008 |       |
| Michael  Sosnovski(3)      |       | 30      |       | Non-executive  Director                         |       | November 16,  2006 |       |

 

----

| Notes:    |
|-----------|
| (1)  | On  October 30, 2005, Christopher M.T. Thompson formally notified the Board  of Directors of his intention to retire from the Board effective November 17,  2005. The Board unanimously voted Mr. Alan J. Wright to succeed Mr. Thompson  as Non-executive Chairman. |
| (2)       | Nominated  by OJSC MMC Norilsk Nickel, Gold Fields’ largest shareholder, appointed on June 21,  2005 and elected at Gold Fields’ annual general meeting on November 17,  2005. |
| (3)       | Representative  of OJSC MMC Norilsk Nickel, Gold Fields’ largest shareholder, who was  appointed on November 18, 2005. |

 

ChristopherM. T. Thompson, Bernard R. van Rooyen and Gordon R. Parker retired as directorsat Gold Fields’ annual general meeting on November 17, 2005.

 

**Directors and Executive Officers**

 

TheArticles of Association of Gold Fields provide that the Board must consist ofno less than four and no more than 15 directors at any time. The Boardcurrently consists of 13 directors. Three directors retired at Gold Fields’annual general meeting on November 17, 2005, and one director, Michael Sosnovski,was appointed by the Board on November 18, 2005.

 

TheArticles of Association of Gold Fields provide that the longest servingone-third of directors must retire from office at each annual general meetingof Gold Fields. Retiring directors normally make themselves available forre-election and are re-elected at the annual general meeting at which theyretire. Executive directors appointed by contract with Gold Fields are notsubject to retirement by rotation for a period of no longer than five years.The number of directors serving under these contracts must at all times be lessthan one-half of the total number of directors in office. None of Gold Fields’current executive directors are appointed to their positions as directors bycontract.

 

Accordingto the Articles of Association, the Board may meet as it sees fit, and sets itsown policies 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:

 
| •  |   | no  director may vote on any contract or arrangement in which the director is  interested. If the director votes on a transaction in which the director is  interested, the director’s vote will not be counted. An interested director,  with certain exceptions, will not be counted for the purpose of determining a  quorum for a meeting in which the Board is voting on a resolution in which  the director is interested. However, a director who owns ordinary shares may  vote his ordinary shares at a general meeting of shareholders in a  transaction in which the director is interested; |   |
|--------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| •  |   | a  director may not vote as a director to determine his own compensation. The  shareholders in a general meeting determine the fees for directors from time  to time. Any additional compensation, including compensation for additional  services performed by the director for Gold Fields’ business or for other  positions in Gold Fields or its subsidiaries, must be determined by a quorum  of directors whose compensation would not be affected by the decision; and                                                                                                                           |   |
| •  |   | the  directors are not required to hold shares in Gold Fields, although a  shareholding qualification may be imposed at any meeting of the shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |

 

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TheArticles of Association do not provide for a mandatory retirement age for directors.However, Gold Fields’ Board charter specifies the retirement age to be72 years of age.

 

Someof the executive officers and all of the executive directors are members of theboards of directors of various subsidiaries of Gold Fields.

 

Thebusiness addresses of all the directors and executive officers of Gold Fieldsis 24 St. Andrews Road, Parktown 2193, South Africa, the address of Gold Fields’head office.

 

**Executive Directors**

 

*Ian D. Cockerill*BSc Geology Hons, London; MSc Mining, RoyalSchool 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 30 years’ experience in the miningindustry. Prior to joining Gold Fields he was the Executive Officer forBusiness Development and African International Operations for AngloGold AshantiLimited.

 

*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 25 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-Executive Directors**

 

*Alan J. Wright*CA (SA). Chairman of the Board of Directors. Mr. Wrightwas unanimously elected to succeed Mr. Thompson as Non-executive Chairmanof the Board upon Mr. Thompson’s retirement on November 17, 2005.Prior to that, Mr. Wright had been Deputy Chairman of Gold Fields since November 1997.Prior to September 1998, Mr. Wright was the Chief Executive Officerof Gold Fields of South Africa Limited. Mr. Wright is currently retiredand is not a Director of any other company.

 

*Rupert L. Pennant-Rea*BA, Trinity College,Dublin; MA, University of Manchester. Non-executive Director. Mr. Pennant-Reawas appointed 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 Governor of the Bank of England.

 

*Jakes G. Gerwel*BA, Western Cape; Licentiate (GermanicPhilology), Brussels; D.litt et Phil (magna cum laude), Brussels. Non-executiveDirector. Professor Gerwel 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.

 

*Chris I. von Christierson*BComm, Rhodes; MA,Cambridge. Non-executive Director. Mr. von Christierson has been aDirector of Gold Fields since February 1999. Mr. von Christierson isthe Chairman of Rio Narcea Gold Mines Limited and a Director of Afri-Can MarineMinerals Corporation Limited and Southern Prospecting (UK) Limited. Mr. von Christiersonwas previously Chairman of Golden Shamrock Mines Limited and Managing Directorof 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.

 

*Patrick J. 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 and Cobre del MayoS.A. de CV. Dr. Ryan was also previously the Executive Vice President,Mining Operations, Development and Exploration at Phelps Dodge Corporation.

 

*Tokyo M. G. Sexwale*Certificate ofBusiness Studies, University of Botswana, Lesotho and Swaziland. Non-executiveDirector. Mr. Sexwale has been a Director of Gold Fields since January 2001.Mr. Sexwale is Executive Chairman of Mvelaphanda Holdings (Proprietary)Limited and of Mvelaphanda Resources Ltd. Mr. Sexwale is also Chairman ofGlobal Village Network Technologies (Proprietary) Limited and Chairman of TransHex Group Limited. In addition, Mr. Sexwale is a Director of several ofMvelaphanda Holdings (Proprietary) Limited’s subsidiaries, ABSA Bank Limited,Northam Platinum Limited, The Rand Mutual Assurance Company Limited, Arcus Gibb(Proprietary) Limited, ABSA Group Limited, African Maritime Logistics(Proprietary) Limited, Dunrose Investments 29 (Proprietary) Limited, Gem

 

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DiamondMining Corporation Limited, Global Village Network (Proprietary) Limited, KasMaine Mining (Proprietary) Limited, Mvelamasefield (Proprietary) Limited, MocohServices South Africa (Proprietary) Limited, Power Matla (Proprietary) Limited,RMA Life Assurance Company Limited, Tepco Petroleum (Proprietary) Limited andVoltex Holdings Limited.

 

*Kofi Ansah*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.

 

*Artem Grigorian* PhD Political Science and History, USSRAcademy of Science. Non-executive Director. Dr. Grigorian was appointed a Directorin June 2005. He is vice-president and shareholder of Russian SpectraCompany and chief executive officer of RMC. Mr. Grigorian was nominated tothe Board by OJSC MMC Norilsk Nickel, Gold Fields’ largest shareholder.

 

*Sergei Stefanovich* English Studies (cum laude) Odessa StateUniversity, MBA Institute for Management Development (IMD) Lausanne,Switzerland. Non-executive Director. Mr. Stefanovich was appointed a Directorin June 2005. He is head of the International Projects Department at OJSC MMCNorilsk Nickel. Previously, Mr. Stefanovich was Vice President in chargeof Strategy for Golden Telecom. Mr. Stefanovich was nominated to the Boardby OJSC MMC Norilsk Nickel, Gold Fields’ largest shareholder.

 

*MichaelSosnovski*International Law and Master of Laws (honors) Moscow State University forInternational Relations, Russia. Non-executive Director. Mr. Sosnovski wasappointed a Director in November 2005. Previously, Mr. Sosnovski wasVice-President and Chief Counsel at LV Finance LLC. Mr. Sosnovski is aformer Corporate Secretary of OJSC MMC Norilsk Nickel and currently an advisorto the General Director of OJSC MMC Norilsk Nickel. Mr. Sosnovski wasnominated to the Board by OJSC MMC Norilsk Nickel, Gold Fields’ largestshareholder.

 

***Retired Non-executive Directors***

 

Thefollowing former directors retired at Gold Fields’ annual general meeting heldon November 17, 2005.

 

*Christopher M. T. Thompson*BA, Rhodes; MScManagement Studies, Bradford. Chairman of the Board of Directors. Mr. Thompsonhad been a Director of Gold Fields since May 1998 and Chairman of theBoard since October 1998 prior to his retirement on November 17,2005. Mr. Thompson was the Chief Executive Officer of Gold Fields from October 1998to June 30, 2002. Mr. Thompson has over 36 years’ experience inthe mining industry. Mr. Thompson is also Chairman and a member of theExecutive Committee of the World Gold Council, a Director of Teck ComincoCorporation and Frontera Copper Corporation and a past Director of the SouthAfrican Chamber of Mines and of Business Against Crime. Prior to joining GoldFields he was the President and Chief Executive Officer of the Castle GroupLtd.

 

*Bernard R. van Rooyen*BA, LLB,Witwatersrand. Non-executive Director. Mr. van Rooyen had been a Directorof Gold Fields since May 1998 prior to his retirement. Mr. van Rooyenis the Deputy Chairman of Trans Hex Group Limited and Mvelaphanda ResourcesLimited and a Director of Banro Corporation, Northam Platinum Limited,Mvelaphanda Gold (Pty) Limited, and Ndowana Exploration (Proprietary) Limited.

 

*Gordon R. Parker*BS, MS, Montana College of Mineral Science andTechnology; MBA, Cape Town. Non-executive Director. Mr. Parker had been aDirector of Gold Fields since May 1998 prior to his retirement. Mr. Parkeris a Director of Caterpillar Inc. and Phelps Dodge Corporation. Previously, Mr. Parkerwas Chairman, President and Chief Executive Officer of Newmont MiningCorporation.

 

**Executive Officers**

 

*James T. Nkosi*(54), D.Com (Leadership in Performance andChange), M.Com (Business Management), Rand Afrikaans University; Masters inIndustrial and Organizational Psychology, University of Cape Town. Senior VicePresident, Human Resources and Transformation. On July 1, 2004, Dr Nkosiwas appointed Senior Vice President, Human Resources and Transformation. Since July 2001,Dr Nkosi had served as Vice President Human Resources, South AfricanOperations, Gold Fields. Prior to that Dr Nkosi was an Executive Manager atEskom for 12 years and a Transformation Director at Standard Bank for fouryears.

 

*James W. D. Dowsley*(47), BSc (MiningEngineering), 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 Ltd.

 

*Craig J. Nelsen*(54), BA (Geology), Montana; MSc (Geology), NewMexico. Executive Vice President, Exploration; President and CEO of Gold FieldsExploration, Inc. Since April 1999, Mr. Nelsen has served asSenior Vice President of Exploration for Gold Fields and President and ChiefExecutive Officer of Gold Fields Exploration, Inc. On April 15, 2002,Mr. Nelsen’s title changed to Executive Vice President, Exploration. Mr. Nelsenwas previously Chairman and Chief Executive Officer of Metallica ResourcesIncorporated.

 

*Michael J. Prinsloo*(51), BSc (MiningEngineering), Witwatersrand; AMP, Harvard. Executive Vice President, SouthAfrican Operations. On April 15, 2002, Mr. Prinsloo was appointedExecutive Vice President, South African Operations. Mr. Prinsloo hadserved as Managing Director of the Driefontein operation since September 2001.Mr. Prinsloo was previously Managing Director and Chief Executive Officer 

 

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ofDurban Roodepoort Deep Limited. Prior to that, Mr. Prinsloo was an independentconsultant to small businesses in South Africa and a Senior Manager withAngloGold Ashanti Limited.

 

*Jan W. Jacobsz*(44), BA, Rand Afrikaans University. SeniorVice President, Investor Relations and Corporate Affairs. On April 15,2002, Mr. Jacobsz was appointed Senior Vice President, Investor Relationsand Corporate Affairs. Since January 1998, Mr. Jacobsz had served asManager and Senior Manager of Investor Relations and Corporate Affairs of GoldFields. Prior to that Mr. Jacobsz was Program Manager of the VulindlelaTransformation Program for Gold Fields of South Africa Limited andAdministrator of The Gold Fields Foundation.

 

*John A. Munro*(37), BSc (Chemical Engineering), Cape Town.Head of Corporate Development. Mr. Munro was appointed to his currentposition on November 17, 2005. Mr. Munro served as Executive VicePresident and Head of International Operations from September 1, 2003, andpreviously served as Senior Vice President and Head of InternationalOperations, Senior Manager and General Manager of Corporate Development forGold Fields. Prior to that Mr. Munro served as Assistant Manager andManager of the Property Division of Gold Fields of South Africa Limited.

 

*Terence P. Goodlace*(46), National HigherDiploma Metalliferous Mining; BComm, Unisa; MBA, Wales. Executive VicePresident, Head of International Operations. Mr. Goodlace was appointed Headof International Operations on November 17, 2005. From April 15,2002, Mr. Goodlace served as Senior Vice President, Strategic Planning. Mr. Goodlacehad previously served as Senior Manager of Strategic Planning. During theperiod between June 1998 and May 2000, Mr. Goodlace was theSenior Manager for Corporate Finance for Gold Fields. Prior to that, Mr. Goodlacewas the Manager of various Gencor Limited mines.

 

*Paul Pretorius* (35), B Com LLB, Potchefstroom University forCHE; LLM (Corporate Law) Rand Afrikaans University. Acting Senior VicePresident, Legal Counsel. Mr. Pretorius joined Gold Fields in April 1999as Legal Advisor and was promoted to Senior Legal Advisor on July 1, 2004.Mr. Pretorius has been acting as Senior Vice President, Legal Counselsince December 2004. Previously, Mr. Pretorius worked for theIndustrial Development Corporation for four years as Legal Advisor.

 

On November 17,2005, Gold Fields announced certain executive management changes, includingthat effective January 1, 2006, Michael J. Prinsloo will assume theposition of Chief Executive Officer, Gold Fields Academy. Gold Fields Academyis a center for education and training in the mining industry.  Brendan Walker, who is currently the ManagingDirector of Gold Fields’ Ghanaian operations, will replace Mr. Prinsloo asExecutive Vice President, South African Operations.

 

**Company Secretary**

 

*Cain Farrel*(56), FCIS, MBA, Southern CrossUniversity–Australia. Mr. Farrel was appointed Company Secretary on May 1,2003. Mr. Farrel is past President of the Southern African Institute ofChartered Secretaries and Administrators. Previously, Mr. Farrel served asSenior Divisional Secretary of AngloAmerican Corporation of South Africa.

 

**Board of Directors Committees**

 

Inorder to ensure good corporate governance, the Board has formed an AuditCommittee, a Compensation Committee, a Nominating and Governance Committee anda Health, Safety and Environment Committee. All the committees are comprisedexclusively of non-executive Directors. All committees are chaired by anindependent non-executive director. The remuneration of non-executive directorsfor their service on the various committees has been approved by theshareholders. Gold Fields intends to reorganize its committees in fiscal 2006to include its new board members and the retirements of Christopher M.T.Thompson, Bernard R.van Rooyen and Gordon R. Parker.

 

TheAudit Committee monitors and reviews Gold Fields’ accounting controls andprocedures, including the effectiveness of the Group’s information systems andother systems of internal control; the effectiveness of the internal auditfunction; reports of both external and internal auditors; quarterly reports,the annual report and the annual financial statements; the accounting policiesof the Group and any proposed revisions thereto; external audit findings,reports and fees, and the approval thereof; and compliance with applicablelegislation and requirements of regulatory authorities and Gold Fields’ Code ofEthics. Membership of the Audit Committee is as follows:

 

J.Michael McMahon (acting chairman)

JakesG. Gerwel

RupertL. Pennant-Rea

KofiAnsah

 

Priorto his retirement in November 2005, Bernard, R.van Rooyen was a member ofthe Audit Committee. Effective November 18, 2005, J. Michael McMahonreplaced Alan J. Wright as chairman and Kofi Ansah replaced Chris I. vonChristierson as a member of the Audit Committee.

 

TheCompensation Committee establishes the compensation philosophy of Gold Fieldsand the terms and conditions of employment of executive directors and otherexecutive officers. Membership of the Compensation Committee is as follows:

 

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ChrisI. von Christierson (chairman)

J.Michael McMahon

AlanJ. Wright

TokyoM. G. Sexwale

SergeiStefanovich

 

Priorto their retirements in November 2005, Gordon R. Parker and ChristopherM.T. Thompson were members of the Compensation Committee. Effective November 18,2005, Chris I. von Christierson replaced Patrick J. Ryan as chairman of theCompensation Committee and Tokyo M. G. Sexwale and Sergei Stefanovich joined asnew members.

 

The Safety,Health, Environment and Community Committee, previously the Health, Safety andEnvironment Committee, reviews adherence to occupational health and safety andenvironmental standards by Gold Fields. The Committee seeks to minimizemining-related accidents and to ensure that the group’s operations are incompliance with all environmental regulations and to establish policy inrespect to HIV/AIDS and health matters. Membership of the Safety, Health,Environment and Community Committee is as follows:

 

PatrickJ. Ryan (chairman)

KofiAnsah

MichaelSosnovski

 

Priorto his retirement in November 2005, Gordon R. Parker was a member of theEnvironment Committee. Effective November 18, 2005, Patrick J. Ryanreplaced J. Michael McMahon as chairman and Kofi Ansah and Michael Sosnovskireplaced Tokyo M. G. Sexwale and Chris I. von Christierson as members of theSafety, Health, Environment and Community Committee.

 

TheNominating and Governance Committee develops and implements policy on corporategovernance issues, develops the policy and process for evaluating nominationsto the Board of Directors, identifies successors to the Chairman and ChiefExecutive Officer and considers selection and rotation of the Board committeemembers. Membership of the Nominating and Governance

 

Committeeis as follows:

AlanJ. Wright (chairman)

PatrickJ. Ryan

RupertL. Pennant-Rea

ArtemGrigorian

 

Priorto their retirements in November 2005, Bernard R.van Rooyen andChristopher M.T. Thompson were members of the Nominating and GovernanceCommittee. Mr. Thompson was the chairman of this committee. Effective November 18,2005, Alan J. Wright joined as chairman of the Nominating and GovernanceCommittee and Artem Grigorian and Rupert L. Pennant-Rea joined as members,replacing Tokyo M. G. Sexwale.

 

**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                                   |
| James  T. Nkosi      |   | Human  Resources and Transformation       |
| James  W. D. Dowsley |   | Corporate  Development                    |
| Craig  J. Nelsen     |   | Exploration                               |
| Michael  J. Prinsloo |   | South  African Operations                 |
| Jan  W. Jacobsz      |   | Investor  Relations and Corporate Affairs |
| John  A. Munro       |   | Corporate  Development                    |
| Terence  P. Goodlace |   | International  Operations                 |
| Paul  Pretorius      |   | Legal  Counsel                            |
| Cain  Farrel         |   | Company  Secretary                        |

 

On January 1,2006, Brendan Walker will replace Michael J. Prinsloo on the ExecutiveCommittee when Mr. Walker replaces Mr. Prinsloo as the head of theSouth African operations. In addition, Mr. Munro’s and Mr. Goodlace’sresponsibilities changed on November 17, 2005, as part of theannounced management changes at Gold Fields. Mr. Munro’s area ofresponsibility is now corporate development rather than internationaloperations, and Mr. Goodlace’s area of responsibility is now internationaloperations rather than strategic development.

 

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**Operating Committee**

 

GoldFields’ Operating Committee meets on a regular basis to discuss and makedecisions on high level operational issues facing Gold Fields. The compositionof the Operating Committee is as follows:

 
| Michael  J. Prinsloo   |   | Chairman  (South African operations)                                  |
|------------------------|--------|-----------------------------------------------------------------------|
| Nicholas  J. Holland   |   | Finance                                                               |
| Gordon  V. Thompson    |   | Driefontein  Operation                                                |
| Philip  A. Schoeman    |   | Beatrix  Operation                                                    |
| Peter  L. Turner       |   | Kloof  Operation                                                      |
| Dana  Roets            |   | Technical  Services                                                   |
| Paul  A. Schmidt       |   | Finance                                                               |
| James  T. Nkosi        |   | Human  Resources and Transformation                                   |
| Steve  W. Banning      |   | Australian  Operation                                                 |
| Tom  Fowler            |   | Information  Technology                                               |
| Terence  P. Goodlace   |   | International  Operations                                             |
| Jan  W. Jacobsz        |   | Investor  Relations and Corporate Affairs                             |
| Zernobia  Lachporia    |   | Secretary                                                             |
| Koos  P. Nel           |   | Human  Resources — SA Operations                                 |
| Cambronne  E. Pienaar  |   | Asset  Protection                                                     |
| Petrus  C. Pienaar     |   | Mvelaphanda  Representative                                           |
| Tim  Rowland           |   | Mineral  Resources                                                    |
| Bernard  R. van Rooyen |   | Mvelaphanda  Representative                                           |
| Brendan  I. Walker     |   | Ghana  operation                                                      |
| Mike  J. Mitchley      |   | Commercial  Services                                                  |
| Mike  J. Adan          |   | Human  Resources — International Operations and Corporate Office |
| Allen  B. Phillips     |   | Metallurgy                                                            |
| Andries  H. Leuschner  |   | Environment                                                           |
| Henry  E.S. Moorcroft  |   | Occupational  Environment                                             |

 

Aspart of the executive management changes announced by Gold Fields on November 17,2005, Peter L. Turner replaced Neil A. Herrick as representative of theKloof Operation, Terence Goodlace’s area of responsibility changed to internationaloperations and John A. Munro left the Operating Committee. On January 1,2006, Michael J. Prinsloo will be replaced by Brendan Walker as chairman of theOperating Committee with responsibility for the South African operations andKoos P. Nel will leave the Operating Committee.

 

**Compensation of Directors and Officers**

 

Duringthe fiscal year ended June 30, 2005, the aggregate compensation paid orpayable to directors and executive officers of Gold Fields as a group wasapproximately Rand 27 million, including all salaries, fees, bonuses andcontributions during such period to provide pension, retirement or similarbenefits for directors and executive officers of Gold Fields, of which Rand2.8 million was due to pension scheme contributions and life insurance,and Rand 6.5 million was due to bonus and performance related payments.

 

Thefollowing table presents information regarding the compensation paid by GoldFields for the year ended June 30, 2005 to its directors:

 
| ** **                    | ** ** | **Board Fees** | ** ** | **Committee  Fees** | ** ** | **Salary(1)** | ** ** | **Bonuses and  performance  related  payments** | ** ** | **Pension  scheme  contributions** | ** ** | **One-off  payments(2)** | ** ** | **Total**  | ** ** |
|-------------------------------|------------|----------------|------------|---------------------|------------|---------------|------------|-------------------------------------------------|------------|------------------------------------|------------|--------------------------|------------|------------|------------|
| ** **                    | ** ** | **(Rand)**     | ** ** | **(Rand)**          | ** ** | **(Rand)**    | ** ** | **(Rand)**                                      | ** ** | **(Rand)**                         | ** ** | **(Rand)**               | ** ** | **(Rand)** | ** ** |
| **Executive Directors**       |       |           |       |                |       |          |       |                                            |       |                               |       |                     |       |       |       |
| Ian D. Cockerill              |       |           |       |                |       | 3,892,812     | (3)        | 1,684,765                                       |       | 602,508                            |       |                     |       | 6,180,085  |       |
| Nicholas. J. Holland          |       | —         |       | —              |       | 2,245,965     | (3)        | 1,425,547                                       |       | 361,592                            |       | 99,127                   |       | 4,132,231  |       |
| **Non-executive Directors**   |       |           |       |                |       |          |       |                                            |       |                               |       |                     |       |       |       |
| Christopher M. T. Thompson(4) |       | 1,200,000      |       | —              |       | —        |       | —                                          |       | —                             |       | 1,200,000                |       |       |       |
| Alan J. Wright                |       | 272,625        |       | 217,675             |       | —        |       | —                                          |       | —                             |       | —                   |       | 490,300    |       |
| Kofi Ansah                    |       | 272,625        |       | —              |       | —        |       | —                                          |       | —                             |       | 272,625                  |       |       |       |
| J. Michael                    |       | 272,625        |       | 173,600             |       | —        |       | —                                          |       | —                             |       | —                   |       | 446,225    |       |

 

112

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| ** **                | ** ** | **Board Fees** | ** ** | **Committee  Fees** | ** ** | **Salary(1)** | ** ** | **Bonuses and  performance  related  payments** | ** ** | **Pension  scheme  contributions** | ** ** | **One-off  payments(2)** | ** ** | **Total**  | ** ** |
|---------------------------|------------|----------------|------------|---------------------|------------|---------------|------------|-------------------------------------------------|------------|------------------------------------|------------|--------------------------|------------|------------|------------|
| McMahon                   |       |           |       |                |       |          |       |                                            |       |                               |       |                     |       |       |       |
| Gordon R. Parker(4)       |       | 266,125        |       | 102,075             |       | —        |       | —                                          |       | —                             |       | —                   |       | 368,200    |       |
| Patrick J. Ryan           |       | 253,125        |       | 149,225             |       | —        |       | —                                          |       | —                             |       | —                   |       | 402,350    |       |
| Bernard R. van Rooyen(4)  |       | 258,000        |       | 122,750             |       | —        |       | —                                          |       | —                             |       | —                   |       | 380,750    |       |
| Tokyo M. G. Sexwale       |       | 175,125        |       | 66,000              |       | —        |       | —                                          |       | —                             |       | —                   |       | 241,125    |       |
| Chris I. von Christierson |       | 245,000        |       | 138,350             |       | —        |       | —                                          |       | —                             |       | —                   |       | 383,350    |       |
| Rupert Pennant-Rea        |       | 258,000        |       | 66,350              |       | —        |       | —                                          |       | —                             |       | —                   |       | 324,350    |       |
| Jakes G. Gerwel           |       | 272,625        |       | 105,350             |       | —        |       | —                                          |       | —                             |       | —                   |       | 377,975    |       |
| Artem Grigorian(5)        |       | —         |       | —              |       | —        |       | —                                          |       | —                             |       | —                   |       | —     |       |
| Sergei Stefanovich(5)     |       | —         |       | —              |       | —        |       | —                                          |       | —                             |       | —                   |       | —     |       |
| Michael Sosnovski(5)      |       | —         |       | —              |       | —        |       | —                                          |       | —                             |       | —                   |       | —     |       |
| Total                     |       | 3,745,875      | (6)        | 1,141,375           |       | 6,138,777     |       | 3,110,312                                       |       | 964,100                            |       | 99,127                   |       | 15,199,566 |       |

 

----

| Notes: |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    |   | Bonuses  for performance in fiscal year 2005 and paid in fiscal year 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (2)    |   | Gold  Fields limits the amount of accumulated leave an employee may hold. Any  accumulated leave held above the maximum is converted to a cash payment to  the employee. The one-off payment includes the amount paid for accumulated  leave above the maximum limit.                                                                                                                                                                                                                                                                                                           |
| (3)    |   | Mr. Cockerill’s  and Mr. Holland’s employment agreements with Gold Fields Guernsey Ltd.  provide for their salaries to be determined in U.S. dollars, and their  agreements with GFL Mining Services Ltd. provide for their salaries to be  determined in Rand. Under these employment agreements, Mr. Cockerill and  Mr. Holland’s salaries are included as a component of their gross annual  remuneration package which also includes pension contributions and other  items. See “— Directors’ Terms of Employment.” |
| (4)    |   | Retired  at the Gold Fields’ annual meeting November 17, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (5)    |   | Appointed  to the Board after June 30, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (6)    |   | The  amount paid in fees to the Board of Directors increased substantially in  fiscal 2005 due to the increased amount of meetings necessary to respond to  an unsolicited, hostile tender offer by Harmony Gold Mining Company Limited  and an increase in Board fees effective January 1, 2005, as approved by  shareholders.                                                                                                                                                                                                                                            |

 

Shareoptions outstanding as of November 30, 2005 and held by the currentdirectors and executive officers were, to the knowledge of Gold Fields’management, as follows:

 
| **Name**                | ** ** | **Options to purchase********Ordinary shares** | ** ** | **Option exercise price********(in Rand)** | ** ** | **Expiration date**    | ** ** |
|-------------------------|------------|------------------------------------------------|------------|--------------------------------------------|------------|------------------------|------------|
| **Executive Directors** |       |                                           |       |                                       |       |                   |       |
| Ian D. Cockerill        |       | 247,000                                        |       | 20.90                                      |       | October 1, 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                                         | (1)        | 76.75                                      |       | October 22, 2011  |       |
|                    |       | 37,500                                         | (1)        | 67.93                                      |       | February 25, 2012 |       |
|                    |       | 75,000                                         | (1)        | 63.65                                      |       | May 23, 2012      |       |
| Nicholas J. Holland     |       | 125,000                                        |       | 25.67                                      |       | December 1, 2006  |       |
|                    |       | 40,000                                         |       | 46.23                                      |       | December 12, 2008 |       |
|                    |       | 23,000                                         |       | 125.37                                     |       | July 2, 2009      |       |
|                    |       | 17,700                                         |       | 84.17                                      |       | March 17, 2010    |       |

 

113

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| **Name**                      | ** ** | **Options to purchase********Ordinary shares** | ** ** | **Option exercise price********(in Rand)** | ** ** | **Expiration date**    | ** ** |
|-------------------------------|------------|------------------------------------------------|------------|--------------------------------------------|------------|------------------------|------------|
|                          |       | 15,800                                         |       | 93.49                                      |       | August 19, 2010   |       |
|                          |       | 19,000                                         |       | 83.18                                      |       | March 3, 2011     |       |
|                          |       | 19,000                                         | (1)        | 76.75                                      |       | October 22, 2011  |       |
|                          |       | 19,000                                         | (1)        | 67.93                                      |       | February 25, 2012 |       |
|                          |       | 38,000                                         | (1)        | 63.65                                      |       | May 23, 2012      |       |
| **Non-Executive Directors**   |       |                                           |       |                                       |       |                   |       |
| Christopher M. T. Thompson(2) |       | 20,000                                         |       | 22.97                                      |       | October 27.2006   |       |
|                          |       | 260,000                                        |       | 46.23                                      |       | December 12, 2008 |       |
|                          |       | 10,000                                         |       | 110.03                                     |       | December 12, 2007 |       |
|                          |       | 10,000                                         |       | 88.38                                      |       | November 27, 2008 |       |
|                          |       | 10,000                                         | (1)        | 68.59                                      |       | February 18, 2010 |       |
| Alan J. Wright                |       | 25,000                                         |       | 43.70                                      |       | October 31, 2006  |       |
|                          |       | 10,000                                         |       | 110.03                                     |       | December 12, 2007 |       |
|                          |       | 10,000                                         |       | 88.38                                      |       | November 27, 2008 |       |
|                          |       | 10,000                                         | (1)        | 68.59                                      |       | February 18, 2010 |       |
| J. Michael McMahon            |       | 21,000                                         |       | 43.70                                      |       | October 31, 2006  |       |
|                          |       | 10,000                                         |       | 110.03                                     |       | December 12, 2007 |       |
|                          |       | 10,000                                         |       | 88.38                                      |       | November 27, 2008 |       |
|                          |       | 10,000                                         | (1)        | 68.59                                      |       | February 18, 2010 |       |
| Gordon R. Parker(2)           |       | 10,000                                         |       | 110.03                                     |       | December 12, 2007 |       |
| Patrick J. Ryan               |       | 10,000                                         |       | 110.03                                     |       | December 12, 2007 |       |
|                          |       | 10,000                                         |       | 88.38                                      |       | November 27, 2008 |       |
|                          |       | 10,000                                         | (1)        | 68.59                                      |       | February 18, 2010 |       |
| Tokyo M.G. Sexwale            |       | 5,000                                          |       | 43.70                                      |       | October 31, 2006  |       |
|                          |       | 7,000                                          |       | 110.03                                     |       | December 12, 2007 |       |
|                          |       | 10,000                                         |       | 88.38                                      |       | November 27, 2008 |       |
|                          |       | 5,700                                          | (1)        | 68.59                                      |       | February 18, 2010 |       |
| Bernard R. van Rooyen(2)      |       | 10,000                                         |       | 110.03                                     |       | December 12, 2007 |       |
| Chris I. von Christierson     |       | 10,000                                         |       | 110.03                                     |       | December 12, 2007 |       |
|                          |       | 10,000                                         |       | 88.38                                      |       | November 27, 2008 |       |
|                          |       | 10,000                                         | (1)        | 68.59                                      |       | February 18, 2010 |       |
| Rupert L. Pennant-Rea         |       | 5,000                                          |       | 110.03                                     |       | December 12, 2007 |       |
|                          |       | 10,000                                         |       | 88.38                                      |       | November 27, 2008 |       |
|                          |       | 10,000                                         | (1)        | 68.59                                      |       | February 18, 2010 |       |
| Jakes G. Gerwel               |       | 5,000                                          |       | 110.03                                     |       | December 12, 2007 |       |
|                          |       | 10,000                                         |       | 88.38                                      |       | November 27, 2008 |       |
|                          |       | 10,000                                         | (1)        | 68.59                                      |       | February 18, 2010 |       |
| Kofi Ansah                    |       | 6,700                                          | (1)   | 68.59                                      |       | February 18, 2010 |       |
| Artem Grigorian               |       | —                                         |       | —                                     |       | —                 |       |
| Sergei Stefanovich            |       | —                                         |       | —                                     |       | —                 |       |
| Michael  Sosnovski            |       | —                                         |       | —                                     |       | —                 |       |
| **Executive Officers**        |       |                                           |       |                                       |       |                   |       |
| James W. D. Dowsley           |       | 45,000                                         |       | 25.67                                      |       | December 1, 2006  |       |
|                          |       | 22,000                                         |       | 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                                          | (1)        | 76.75                                      |       | October 22, 2011  |       |
|                          |       | 7,500                                          | (1)        | 67.93                                      |       | February 25, 2012 |       |
|                          |       | 15,000                                         | (1)        | 63.65                                      |       | May 23, 2012      |       |
| 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                                         | (1)        | 76.75                                      |       | October 22, 2011  |       |
|                          |       | 15,000                                         | (1)        | 67.93                                      |       | February 25, 2012 |       |
|                          |       | 30,000                                         | (1)        | 63.65                                      |       | May 23, 2012      |       |

 

114

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| **Name**            | ** ** | **Options to purchase********Ordinary shares** | ** ** | **Option exercise price********(in Rand)** | ** ** | **Expiration date**    | ** ** |
|---------------------|------------|------------------------------------------------|------------|--------------------------------------------|------------|------------------------|------------|
| Michael J. Prinsloo |       | 140,000                                        |       | 46.23                                      |       | December 12, 2008 |       |
|                |       | 50,000                                         |       | 154.65                                     |       | May 24, 2009      |       |
|                |       | 13,300                                         |       | 93.49                                      |       | August 19, 2010   |       |
|                |       | 15,000                                         |       | 83.18                                      |       | March 3, 2011     |       |
|                |       | 15,000                                         | (1)        | 76.75                                      |       | October 22, 2011  |       |
|                |       | 15,000                                         | (1)        | 67.93                                      |       | February 25, 2012 |       |
|                |       | 30,000                                         | (1)        | 63.65                                      |       | May 23, 2012      |       |
| Jan W. Jacobsz      |       | 6,850                                          |       | 14.19                                      |       | June 25, 2006     |       |
|                |       | 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                                          | (1)        | 76.75                                      |       | October 22, 2011  |       |
|                |       | 7,500                                          | (1)        | 67.93                                      |       | February 25, 2012 |       |
|                |       | 15,000                                         | (1)        | 63.65                                      |       | May 23, 2012      |       |
| John A. Munro       |       | 14,800                                         |       | 14.19                                      |       | June 25, 2005     |       |
|                |       | 13,333                                         |       | 25.67                                      |       | December 1, 2006  |       |
|                |       | 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                                         | (1)        | 76.75                                      |       | October 22, 2011  |       |
|                |       | 15,000                                         | (1)        | 67.93                                      |       | February 25, 2012 |       |
|                |       | 30,000                                         | (1)        | 63.65                                      |       | May 23, 2012      |       |
| Terence P. Goodlace |       | 11,000                                         |       | 25.67                                      |       | December 1, 2006  |       |
|                |       | 12,000                                         |       | 46.23                                      |       | December 12, 2008 |       |
|                |       | 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                                          | (1)        | 76.75                                      |       | October 22, 2011  |       |
|                |       | 7,500                                          | (1)        | 67.93                                      |       | February 25, 2012 |       |
|                |       | 15,000                                         | (1)        | 63.65                                      |       | May 23, 2012      |       |
| James T. Nkosi      |       | 17,600                                         |       | 116.85                                     |       | August 22, 2009   |       |
|                |       | 16,000                                         |       | 119.90                                     |       | January 1, 2010   |       |
|                |       | 4,900                                          |       | 93.49                                      |       | August 19, 2010   |       |
|                |       | 7,500                                          |       | 83.18                                      |       | March 3, 2011     |       |
|                |       | 7,500                                          | (1)        | 62.25                                      |       | July 2, 2011      |       |
|                |       | 7,500                                          | (1)        | 67.93                                      |       | February 25, 2012 |       |
|                |       | 15,000                                         | (1)        | 63.65                                      |       | May 23, 2012      |       |
| Paul C Pretorius    |       | 1,400                                          |       | 46.23                                      |       | December 12, 2008 |       |
|                |       | 1,600                                          |       | 84.17                                      |       | March 17, 2010    |       |
|                |       | 1,400                                          |       | 93.49                                      |       | August 19, 2010   |       |
|                |       | 2,100                                          |       | 83.18                                      |       | March 3, 2011     |       |
|                |       | 7,200                                          | (1)        | 65.25                                      |       | July 2, 2011      |       |
|                |       | 3,600                                          | (1)        | 67.93                                      |       | February 25, 2012 |       |
|                |       | 7,200                                          | (1)        | 63.65                                      |       | May 23, 2012      |       |
| Total(1)            |       | 626,400                                        |       | —                                     |       | —                 |       |

 

----

| Notes: |   |                                                                                                                                                                                                                                                                                                                |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    |   | Issued  in fiscal 2005 pursuant to either the GF Management Incentive Scheme or the  GF Non-Executive Director Share Plan as part of the compensation paid to  directors and officers in fiscal 2005.                                                                                                               |
| (2)    |   | Mr. Thompson,  Mr. Parker and Mr. van Rooyen retired from the Board at the Gold  Fields’ annual general meeting on November 17, 2005 at which time all  options granted to them vested immediately. They have until December 17,  2005, to exercise the options under the plan rules. |

 

115

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**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 current directorsand executive officers of Gold Fields as of November 30, 2005:

 
| **Holder**                                           | ** ** | **Ordinary shares(1)** | ** ** | **Percentage** | ** ** |
|------------------------------------------------------|------------|------------------------|------------|----------------|------------|
| Ian D. Cockerill                                     |       | 62,000                 |       | .01            | %          |
| Alan J. Wright                                       |       | 135,690                |       | .03            | %          |
| Total Directors (13 persons)                         |       | 197,690                |       | .04            | %          |
| Total Non-Director Executive Officers (8 persons)(1) |       | —                 |       | —         |       |
| Total Directors and Executive Officers (21 persons)  |       | 197,690                |       | .04            | %          |

 

----

| Note: |   |                                                                                                                                               |
|-------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)   |   | Since  Mr. Thompson, Mr. van Rooyan and Mr. Parker retired on  November 17, 2005, their share ownership is not included above. |

 

**The GF Management Incentive Scheme**

 

GoldFields has a share option scheme available to executive officers and otheremployees, as determined by the Board of Directors, which has a total of22,791,830 ordinary shares reserved for issuance under the scheme. Options topurchase a total of 10,002,222 ordinary shares were outstanding under thescheme as of November 30, 2005, of which options to purchase 969,900ordinary shares at a weighted average price of Rand 58.52 were held by theexecutive directors of Gold Fields. The exercise prices of all outstanding optionsrange between Rand 13.55 and Rand 154.65 per ordinary share and they expirebetween June 30, 2006 and November 1, 2012. The amount of ordinaryshares reserved under the scheme may be changed by the shareholders. 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 Board of Directors resolves to grant theoption.

 

Eachoption may normally only be exercised by a participant on the following bases: (1) aftertwo years have elapsed from the date on which the option was accepted by theparticipant, in respect of not more than one-third of the ordinary shares whichare the subject of that option; (2) after three years have elapsed fromthe date on which the option was accepted by the participant, in respect of notmore than a further one-third (representing two-thirds cumulatively) of theordinary shares which are the subject of that option; and (3) after fouryears have elapsed from the date on which the option was accepted by theparticipant, in respect of all the ordinary shares which are the subject ofthat option, subject to revision by the Board of Directors. For so long as aperson continues to work for Gold Fields, options lapse seven years after thedate of acceptance of the option by the participant. Options vest as soon asthey are exercisable, and employees who leave Gold Fields have one yearfollowing their departure to exercise options which have vested. Options whichare not yet exercisable are forfeited upon leaving employment, subject toexceptions relating to changes in control of Gold Fields and no faulttermination of service as part of organizational restructuring. The schemeprovides for different methods of exercising options in order to permitparticipants to take advantage of favorable provisions of South African taxlaw.

 

Theshare option scheme may be amended from time to time by the Board of Directorsand the trustees of the scheme in any respect (except in relation to amendmentsaffecting: (1) the eligibility of participants under the scheme, (2) theformula for calculating the total number of ordinary shares which may be issuedunder the scheme, (3) the maximum number of options which may be acquiredby any participant, (4) the option price formula and (5) the voting,dividend and transfer rights attaching to options, which may only be amendedthrough approval in a general meeting), provided that no such amendment shalloperate to affect the vested rights of any participant.

 

**The GoldFields 2005 Limited Share Plan**

 

AtGold Fields’ annual general meeting held on November 17, 2005, theshareholders approved the Gold Fields Limited 2005 Share Plan, or the 2005Plan, and this plan is the new plan under which employees, including executivedirectors, will be compensated going forward. A total of 24,564,711 ordinaryshares is reserved for issuance under the 2005 Plan.

 

TheGold Fields Limited 2005 Share Trust will be established to administer the 2005Plan. The board of directors shall be entitled to appoint and remove thetrustees of the trust. There shall at all times be a minimum of two trustees.The first trustees are to be Alan J. Wright and Tokyo M.G. Sexwale. Thetrustees may not participate in the 2005 Plan. The Trust shall recover from aparticipant’s employer within the Gold Fields Limited group of companies allsuch costs as may be attributable to such participant’s participation in the2005 Plan. The Gold Fields Limited 2005 Share Plan provides for two types ofawards: performance vesting restricted shares and performance allocated shareappreciation rights. The performance vesting restricted shares will only bereleased to participants three years after the date of the award of suchshares, and the release is subject, in whole and in part, to Gold Fieldsmeeting certain performance criteria set by the Board of Directors. Theperformance allocated share appreciation rights are similarly not available toparticipants until three years after their award, however, availability is notsubject to Gold Fields’ performance. The size of the initial allocation ofshare appreciation rights is dependent on the performance of the 

 

116

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participantat the time of allocation. In terms of the resolutions passed at the AGM, amaximum of 5% of the issued share capital was placed under the control of theDirectors for the purposes of the four share schemes. No allocations or awardshave been made under the 2005 Plan.

 

**The GF Non-Executive Director Share Plan**

 

GoldFields has a share option plan available to non-executive directors selected bya Non-Executive Directors Remuneration Committee, comprising the ChiefExecutive Officer and two representatives of shareholders of Gold Fieldsnominated by the Chief Executive Officer. No member of the committee may be aparticipant in the plan. The plan was adopted at the annual general meeting ofshareholders on October 31, 2001. There are a total of 2,279,183 ordinaryshares reserved for issuance under the plan. The shareholders may change theamount of ordinary shares reserved under the plan. Under the plan, theaggregate number of ordinary shares acquired by any one participant cannotexceed 0.1% of the issued share capital from time to time without the approvalof the shareholders in a general meeting and the JSE. The exercise price ofeach ordinary share which is the subject of an option is the weighted averageprice of the ordinary shares on the JSE on the day immediately preceding thedate on which the Non-Executive Directors Remuneration Committee resolves togrant the option.

 

Underthe plan, all options granted may only be exercised no less than 12 months andno more than five years after the date on which the option was accepted by theparticipant. If an option holder ceases to hold office for any reason, he willbe entitled within 30 days to exercise share options which he was entitledto exercise immediately prior to his ceasing to hold office, failing which theoptions shall automatically lapse. The ordinary shares in respect of which eachoption is exercised will rank equally with existing issued ordinary shares.Gold Fields has undertaken to apply to list any ordinary shares received onexercise of options under the plan on the stock exchanges on which Gold Fields’ordinary shares are listed and quoted. The share option plan may be amendedfrom time to time by the Non-Executive Directors Remuneration Committee in anyrespect, except in relation to: (1) the eligibility of participants underthe plan, (2) the formula for calculating the total number of ordinaryshares which may be acquired pursuant to the plan, (3) the maximum numberof options which may be acquired by any participant, (4) the price payableby participants and (5) the voting, dividend and transfer rights attachingto options, which may only be amended through approval by the shareholders in ageneral meeting and by the JSE.

 

Optionsto purchase a total of 335,400 ordinary shares were held by the non-executivedirectors of Gold Fields under the plan as of November 30, 2005. Theexercise prices of all outstanding options granted under this plan rangebetween Rand 43.70 and 110.03 per ordinary share, and they expire between October 31,2006 and February 18, 2010.

 

**The Gold Fields Limited 2005 Non-Executive Director SharePlan**

 

AtGold Fields’ annual general meeting scheduled for November 17, 2005, theshareholders approved the Gold Fields Limited 2005 Non-Executive Share Plan,and this plan will be the new plan under which non-executive directors willreceive share awards. Participants in the 2005 Non-Executive Director SharePlan will be non-executive directors of Gold Fields who are not members of theNon-Executive Directors Remuneration Committee. The Gold Fields Limited 2005Non-Executive Share Plan provides for the release of restricted shares, up to atotal of 24,564,711 ordinary shares, awarded to the non-executive directorsthree years after the date of the award, provided that the non-executivedirector is not removed, disqualified or forced to resign from the Board ofDirectors during that period. No consideration is payable for the grant of anaward of restricted shares. Awards in respect of 33,000 shares were authorizedat Gold Fields’ annual general meeting on November 17, 2005.

 

Pursuantto resolutions passed at Gold Fields’ annual general meeting on November 17,2005, a maximum of 5% of the unissued ordinary shares, less the 33,000 shareswhich were authorized for issuance to the Gold Fields’ non-executive directorspursuant to the Gold Fields Limited 2005 Non-Executive Director Share Plan atthe same meeting, were placed under the control of the directors for purposesof issuance under The Gold Fields 2005 Limited Share Plan and The GF ManagementIncentive Scheme.

 

**Directors’ Terms of Employment**

 

Eachof Ian D. Cockerill (Executive Director and Chief Executive Officer of GoldFields) and Nicholas J. Holland (Executive Director and Chief Financial Officerof Gold Fields) has entered into two service agreements with subsidiaries ofGold Fields. One agreement, or the GFL Contract, is with GFL Mining ServicesLtd., or GFLMSL. The other agreement, or the Guernsey Contract, is with GoldFields Guernsey Limited, or Gold Fields Guernsey. The terms and conditions ofemployment for each executive director are substantially similar, except whereotherwise indicated below.

 

*The GFL Contracts*

 

Underthe GFL Contracts, the employment of Mr. Cockerill and Mr. Hollandwill continue until terminated upon (i) six months’ notice by eitherrelevant party or the relevant executive director or (ii) retirement ofthe 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.If the summary termination is due to the inability of the executive director toprovide his services (as a result of ill health or other cause) for acontinuous period of three consecutive months in any one-year or more, he mustalso be paid in lieu of his six-month notice period.

 

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Mr. Cockerill’scurrent gross annual remuneration package, or GRP, is valued at Rand 3,348,000and Mr. Holland’s current GRP is valued at Rand 2,124,000. Both Mr. Cockerill’sand Mr. Holland’s GRP are reviewed annually for possible adjustment.Pursuant to their annual compensation reviews, each of Mr. Cockerill’s andMr. Holland’s GRP was increased in January 2005.

 

Thevalue of the gross annual remuneration package is to be allocated among thefollowing benefits: (i) salary; (ii) compulsory retirement fundcontribution (with contributions set at 20% of “Pensionable Emoluments” and “PensionableEmoluments” being a rate between 50% and 100% of the gross annual remunerationpackage 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.

 

Inaddition, each of Mr. Cockerill and Mr. Holland is entitled, amongother things, to the following benefits under the GFL Contract: (i) participationin the GF Management Incentive Scheme at the discretion of Gold Fields; and (ii) considerationfor an annual (financial year) incentive bonus based upon the fulfillment ofcertain targets set by the Board of Directors.

 

Theamount and manner of any bonus payment is determined by the CompensationCommittee of the Board. “See—Board of Directors Committees.” The annual bonusis set at a target of 50% of the value of the GRP, assuming fulfillment of alltargets, with scope to award a lesser bonus if targets are not met, or agreater bonus, up to a further 50% of the GRP, if targets are exceeded.

 

TheGFL Contract also provides that in the event of the relevant executive director’semployment being terminated solely as a result of a “change of control” asdefined below, and within 12 months of the change of control, the directoris entitled to: (i) payment of an amount equal to twice his GRP; (ii) paymentof an amount equal to the average of the incentive bonuses paid to theexecutive director during the previous two completed financial years; (iii) anyother payments and/or benefits due under his GFL Contract; (iv) payment ofany annual incentive bonus he has earned during the financial yearnotwithstanding that the financial year is incomplete; and (v) anentitlement, for two years after the date of termination, subject to therelevant rules of the share option scheme then in force, to retain and toexercise all share options allocated to him including those which may not havevested at the date of such termination. The GFL Contract further provides thatthese payments cover any compensation or damages the executive director mayhave under any applicable employment legislation.

 

A “changeof control” for the above purposes includes, but is not limited to, theacquisition by a third party of 30% or more of Gold Fields’ Ordinary Shares.

 

Inthe event of the consummation of an acquisition, merger, consolidation, schemeof arrangement or other reorganization, whether or not there is a change ofcontrol, if the executive director’s services are terminated the “change ofcontrol” provisions summarized above also apply.

 

Eachof Mr. Cockerill and Mr. Holland has agreed to: (i) not use ordivulge any trade secrets without Board consent; (ii) surrender anywritten or electronic documentation relating to any trade secrets at the Board’sdemand, and not keep any copies thereof; (iii) not, for a period of24 months after his employment terminates, induce, solicit, encourage orprocure (or endeavor to do so) any employee to (a) terminate hisemployment with Gold Fields or (b) become employed by or interested in anycompetitor of Gold Fields; (iv) not provide any information acquired byhim in the course of his association with or employment by Gold Fields, toanyone, if the provision of the information results or may result in any of theGold Fields’ employees becoming employed by or interested in any mannerwhatsoever, whether directly or indirectly, in any concern; (v) notsolicit, interfere with or entice or endeavor to entice away from Gold Fieldsany person who was an associate, customer or supplier of, or who was accustomedto dealing with, Gold Fields during the past two years; and (vi) notdisclose any information which comes to his knowledge as a result of hisemployment or the termination thereof, but excluding information acquired froman independent third person, which relates to any business/marketing method orpractice, or any business/marketing associates of Gold Fields. A generalexception to the various restrictions on disclosure of information is that theexecutive director is entitled to disclose information to such person(s) towhom it is necessary for the purpose of implementing his employment rights and obligations.

 

*The Guernsey Contracts*

 

Eachof Mr. Cockerill’s and Mr. Holland’s agreement with Gold FieldsGuernsey provides for his salary payable under that agreement to be determinedin U.S. dollars. The annual salary remuneration package, or SRP, of Mr. Cockerillis U.S.$200,000 and of Mr. Holland is U.S.$91,800. Both Mr. Cockerill’sand Mr. Holland’s SRPs are reviewed annually for possible adjustment.Pursuant to their annual compensation reviews, each of Mr. Cockerill’s andMr. Holland’s SRP was increased in January 2005.****The notice period under the GuernseyContract is six months.

 

Inaddition, each of Mr. Cockerill and Mr. Holland is entitled to beconsidered for an annual incentive bonus payment depending upon the fulfillmentof certain targets as agreed between the relevant executive director and theBoard. The annual bonus is set at a target of 50% of the value of the annualsalary, as provided under the GFL Contract, and assuming fulfillment of alltargets, with scope to award a lesser bonus if targets are not met, or agreater bonus, up to a further 50% of the annual salary, if targets areexceeded.

 

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Allconditions relating to the employment of Mr. Cockerill and Mr. Hollandunder the GFL Contract, other than with respect to remuneration, apply to theiremployment under the Guernsey Contract. In addition, the Guernsey Contractexpressly provides that the “change of control” clause in the GFL Contract alsoapplies on the same terms in respect of remuneration paid under the GuernseyContract.

 

*Additional information*

 

Theexecutive directors also benefit from pension contributions and life insurance,the value of which is included in the compensation chart presented above.Effective March 1, 2004, these pension contributions and life insurancepayments are included in the amount of the executive director’s GRP describedabove.

 

Thenon-executive directors are entitled to fees as agreed at Gold Fields’ annualgeneral meeting from time to time, reimbursement of out-of-pocket expensesincurred on Gold Fields’ behalf and remuneration for other services, such asserving on committees. Prior to January 1, 2005, each non-executive directorwas entitled to a Rand 65,000 ($10,062) director’s fee per year and a Rand6,500 ($1,006) attendance fee per meeting. In addition, the non-executivedirectors were each entitled to Rand 52,000 ($8,050) per year if thenon-executive director was the chairman of a Board committee, other than theAudit Committee, or Rand 26,000 ($4,025) per year per committee for Boardcommittee fees, and a Rand 3,900 ($604) attendance fee per committee meeting. Theannual fee for the chairman of the Audit Committee was Rand 80,000 ($12,384). Atthe November 17, 2004 Gold Fields annual general meeting, the shareholdersvoted to provide for additional Board fees and to increase the existing Boardfees effective January 1, 2005 as follows: the chairman of the Board nowreceives an annual fee of Rand 1.0 million ($154,799); the annual fee foreach Board member, other than the Chairman, is Rand 100,000 ($15,480); theattendance fee for each Board member, excluding the Chairman, for each Boardmeeting is Rand 8,125 ($1,258) per meeting; the annual fee for each chairman ofa board committee, other than the Audit Committee chairman, is now Rand 80,000($12,384); the annual fee for the chairman of the Audit Committee is Rand112,000 ($17,337); the attendance fee for each Board committee member for eachBoard committee meeting is Rand 4,875 ($755) per meeting; the annual fee formembers of each Board committee, other than the Audit Committee, is Rand 40,000($6,192); the annual fee for each member of the Audit Committee, excluding thechairman, is Rand 56,000 ** **($8,669); and theshareholder-approved travel allowance payable to directors who travelinternationally to attend meetings is U.S.$4,000 per international trip.

 

Inaddition, the shareholders at the annual general meeting on November 17,2004 resolved to pay Christopher Thompson, for his role as the chairman of the Board,a flat fee for Board meetings for the period from March 1, 2004 to December 31,2004 of Rand 1,167,000 ($180,650),which is included in the chart above under Board fees amount for the period of July 2004to December 2004.

 

GoldFields has no service contracts with its non-executive directors.

 

**Employees**

 

Thegold mining industry, particularly in South Africa, is labor-intensive. Thetotal number of employees at the operations, including employees of outsidecontractors, as of the end of the last three fiscal years at each of theoperations owned by Gold Fields as of those dates was: 

| ** **        | ** ** | **As of June 30,** | ** ** |
|-------------------|------------|-------------------------|------------|
| **South  Africa** | ** ** | **2003**                | ** ** | **2004 (1)** | ** ** | **2005(1)** | ** ** |
| Driefontein       |       | 18,253                  |       | 17,900 |   | 17,200 |   |
| Kloof             |       | 19,042                  |       | 16,600 |   | 15,400 |   |
| Beatrix           |       | 12,615                  |       | 12,200 |   | 12,300 |   |
| Ghana             |       |                    |       |   |   |   |   |
| Tarkwa            |       | 1,388                   |       | 3,300 |   | 3,300 |   |
| Damang            |       | 1,025                   |       | 900 |   | 900 |   |
| Australia         |       |                    |       |   |   |   |   |
| St. Ives          |       | 951                     |       | 900 |   | 1,000 |   |
| Agnew             |       | 254                     |       | 300 |   | 400 |   |
| Total             |       | 53,528                  |       | 52,100 |   | 50,500(2 | ) |

 

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| Notes:                                                                                                                     |
|----------------------------------------------------------------------------------------------------------------------------|
| (1)   Rounded  to the nearest hundred.                                                                           |
| (2)   As  of June 30, 2005, approximately 81% of these employees were laborers and  semi-skilled employees. |

 

***Labor Relations***

 

*South Africa*

 

Since1995, the South African legislature has enacted various labor laws that enhancethe rights of employees. For example, these laws:

 

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| •  |   | confirm  the right of employees to belong to trade unions and the right of unions to  have access to the workplace;                                                                                                                                                            |   |
|--------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| •  |   | guarantee  employees the right to strike, the right to picket and the right to  participate in secondary strikes in certain prescribed circumstances;                                                                                                                          |   |
| •  |   | provide  for mandatory severance pay in the event of termination of employment for  operational reasons;                                                                                                                                                                       |   |
| •  |   | reduce  the maximum ordinary hours of work;                                                                                                                                                                                                                                    |
| •  |   | increase  the rate of pay for overtime;                                                                                                                                                                                                                                        |
| •  |   | require  large employers such as Gold Fields to implement affirmative action policies  to benefit historically disadvantaged groups, and impose significant monetary  penalties for non-compliance with the administrative and reporting  requirements of the legislation; and |   |
| •  |   | provide  for the financing of training programs by means of a levy grant system and a  national skills fund; and                                                                                                                                                               |   |
| •  |   | grant  employees the right to strike if a company employing over 500 employees terminates  over 50 employees at one time for operational reasons.                                                                                                                              |   |

 

Approximately79% of the labor force at Gold Fields’ South African operations is unionized,with the major portion of its South African workforce being members of theNational Union of Mineworkers, or the NUM. As a result of its highly unionizedlabor force in South Africa and the fact that labor costs constituteapproximately 50% of production costs, Gold Fields has attempted to balanceunion demands with the need to contain and reduce total cash costs in order toensure the long-term viability of its operations.

 

In July 2003,Gold Fields completed biannual negotiations with the NUM on wages and terms ofemployment for semi-skilled employees, which provided for a wage increase of 10%effective July 1, 2003, a further increase in other benefits ofapproximately 3% in fiscal 2004 and a 7% wage increase which was effective on July 1,2004. The NUM agreement also provided for the achievement by January 2004of a minimum surface wage of Rand 2,000 ($328) per month.

 

Arrangementswith other significant South African unions include:

 
| •  |   | a  9.5% increase effective July 1, 2003 for semi-skilled and skilled  employees represented by the Solidarity, the United Association of South  Africa, or UASA, and the NUM and a second year inflation linked increase with  a minimum increase of 7%, which was implemented effective July 1, 2004;  and                                                                     |   |
|--------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| •       |   | an  8.5% increase which became effective September 1, 2003 for mine  officials and white-collar employees represented by UASA, Solidarity and the  NUM. In addition, an agreement was concluded with those unions on September 16,  2004 which provides for a 6% retroactive increase effective July 1, 2004  and a further increase of 1% effective October 1, 2004. |   |

 

Theaverage increase in Gold Fields’ South African total labor costs due to thesewage increases and improvements in conditions of employment was approximately5.1% in fiscal 2004 and 3.6% in fiscal 2005.

 

On August 23,2005, Gold Fields reached a two-year wage agreement with the United Associationof South Africa, or UASA, Solidarity and the NUM. This agreement provided forwage increases of between 6% and 7% depending upon the category of employee tobe implemented with effect from July 2005. The approximate impact of this increaseis expected to be a 3% increase on the total Rand production costs for theSouth African operations for fiscal 2006. A further inflation linked increase(which shall not be lower than 5.5% to 6%, depending on the category ofemployee) is scheduled to be implemented on July 1, 2006. The agreementfurther provides for an increase in contributions to the Mine Workers ProvidentFund, a retirement fund, of 0.5% in July 2005 and 0.5% in July 2006and an increase in the living out allowance from R706 to R1,000 by September 1,2006. Currently, only 14% of Gold Fields’ South African labor force receiveliving out allowances. The next round of negotiations with the South AfricanUnion is expected to take place prior to June 2007 when the currentagreement expires.

 

Workweek and shift arrangements are negotiated on a shaft-by-shaft basis and varyin accordance with staffing needs and union demands at each shaft. SouthAfrican legislation provides for a 45 hour work week, although the governmenthas stated its intention to move toward a 40 hour work week.

 

GoldFields experienced no significant strikes in fiscal 2003 or 2004. On March 31,2005, members of the NUM embarked on strike action at the South Africanoperations in support of demands for an increased living out allowance. TheSouth African Labour Court declared the strike unlawful and employees returnedto work the next day. Only one day’s production was lost. Gold Fields’ SouthAfrican operations were also impacted by the South African gold mining industrystrike which commenced on August 7, 2005 and ended on August 12,2005. Gold Fields subsequently concluded the two-year wage agreement referredto above on August 23, 2005 with the unions, as part of the industry-widenegotiations coordinated by the South African Chamber of Mines.

 

*Ghana*

 

InGhana, there are various constitutional and legislative provisions relating tolabor which, among other things:

 
| •  |   | entitle  workers to join trade unions and give those unions the power to negotiate on  their behalf with regard to their conditions of employment; |   |
|--------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| •  |   | prohibit  discrimination against union members;                                                                                                    |   |
| •  |   | entitle  workers to strike in certain prescribed circumstances;                                                                                    |   |
| •  |   | regulate  the hours of work, termination notice, severance pay and minimum length of  annual leave for workers;                                    |   |
| •  |   | provide  for social security for workers and worker’s compensation; and                                                                       |   |
| •  |   | provide  for arbitration in trade disputes.                                                                                                        |   |

 

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On October 8,2003, the Ghanaian Parliament passed the Labour Act, 2003 (Act 651), or theLabour Act. Regulations under the Labour Act have been published for comment bystakeholders. The Labour Act gives employees greater freedom to form and tojoin trade unions, among other rights.

 

Ofthe Ghanaian employees at Tarkwa, the majority are members of the GhanaMineworkers Union, or GMU, whose employment is governed by a collectivebargaining agreement originally concluded in 1996 and revised in 2000, 2003 and2004. Wages are revised annually by negotiation with the GMU. In July 2004,Gold Fields Ghana concluded a two-year agreement with the GMU covering both theTarkwa and Damang mines. The agreement provides for a 2% increase in basicrates of pay effective January 1, 2004. The increase effective January 1,2005 was 3%. The agreement further provided for profit sharing arrangementunder which employees shared in the profits made at the Tarkwa and Damang minesin fiscal 2004 and fiscal 2005. The payment for fiscal 2005 was agreed at $750per employee in service for the full fiscal year. Senior staff terms ofemployment are also governed by the Labour Act. Under the Labour Act, employeesconsidered to be in “policy making” positions are prohibited from joiningunions. As a result, some members of senior staff who are not in “policy making”positions could be eligible to join unions which would then negotiate terms ofemployment on their behalf. However, the current practice of using theconditions contained in collective agreements with unions as the minimum basisfor negotiating senior staff conditions of employment is expected to continue.

 

NeitherGold Fields nor AMS experienced any strikes at Tarkwa in fiscal 2003, 2004 orfiscal 2005. However, in August 2005, Gold Fields experienced anunexpected 48 hour strike at the Tarkwa mine. The strike centered onunhappiness with existing union representation, and as a result Gold Fields istaking steps in conjunction with the union to facilitate the election of newunion representatives.

 

Aspart of a project undertaken by Gold Fields to expand operations at Tarkwa, orthe Tarkwa Expansion Project, Gold Fields has completed shifting operations atthe mine from contractor mining to owner mining. The conversion to owner miningat Tarkwa was completed in fiscal 2005 without any labor incidents.

 

Aswith Tarkwa, substantially all of the local employees at the Damang mine areunionized, including those employed by AMS. Damang did not experience any workstoppages in fiscal 2003, 2004 or 2005. The terms of employment ofunionized employees at Damang are governed by a collective bargaining agreementnegotiated in June 2003 and revised in July 2004. The terms of thisagreement are identical to those of the collective bargaining agreementcovering unionized employees at Tarkwa. Damang was party to the two yearagreement concluded in July 2004 on wages and other conditions ofemployment referred to above, for which the same terms apply to the Damangoperations. These terms are expected to remain in place until 2006.

 

*Australia*

 

InWestern Australia, where Gold Fields’ Australian operation is located, labor isregulated by a combination of federal and state statutes and certain standardsprimarily set by Western Australian regulatory commissions which set outcertain workplace conditions across the mining industry. These laws andstandards prescribe, among other things:

 
| •  |   | minimum  wages;                                                  |   |
|--------------|--------|------------------------------------------------------------------|--------|
| •  |   | forms  of leave;                                                 |   |
| •  |   | conditions  regarding termination of an employee for redundancy; |   |
| •  |   | rights  of unions to enter a workplace; and                      |   |
| •  |   | collective  bargaining rights for employees.                     |   |

 

TheSt. Ives and Agnew mines together had approximately 1,320 workers as of June 30,2005, approximately 1,000 of whom were employed by outside contractors. All ofGold Fields’ Australian employees and the employees of the contractors at theSt. Ives and Agnew mines are employed pursuant to individually negotiatedfederal workplace agreements. The effect of federal workplace agreements isgenerally to exclude collective bargaining and limit union access to theworkplace.

 

Historically,Australian unions have had a significant role in negotiating collectiveagreements for pay and working conditions. In recent years under both state andfederal Conservative Party-led coalition governments, workplace agreements havereplaced union collective bargaining agreements. The Industrial Relations Act1979 (WA) as amended by the Labour Relations Reform Act in July 2002reduces the availability of state workplace agreements and promotes collectivebargaining and union access to the workplace. Although unions currently havelittle presence in Western Australia’s mining industry, it is possible thatindividually negotiated federal workplace agreements at some mines could bereplaced by collective bargaining agreements if and when the workplaceagreements expire, which could have an adverse effect on labor costs at GoldFields’ mining operations in Australia.

 

*Benefits*

 

GoldFields provides benefits to its employees, generally including pension, medicaland accommodation benefits. Employees are also entitled to a severance packageif they are laid off. At Damang, medical benefits only are provided by thecontractor, AMS, while the costs of such benefits are paid by Gold Fields underthe terms of the contract between Gold Fields and AMS. Gold Fields’ ownemployees are generally provided with medical and retirement benefits. InAustralia, benefits for contractors’ employees are the responsibility of eachcontractor and Gold Fields’ own employees are generally responsible for theirown medical costs and other benefits, except that Gold Fields contributes to athird-party pension plan.

 

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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.

 

Gold Fields provides 50% ofthe premiums under a medical plan for certain former employees in South Africa.As of June 30, 2005, 89% of these former employees and dependants had beenbought out of the scheme at a 15% premium. At June 30, 2005, approximately248 former employees were still covered under this plan following the buyout.As of June 30, 2005, Gold Fields had accrued a provision of Rand18.8 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 Medisense medicalscheme during fiscal 2003) who retired after August 31, 1997 and membersof Medisense Medical Scheme who retired after January 31, 1999.

 

*BonusSchemes*

 

Gold Fields has extensivebonus schemes for workers at all levels. The focus of Gold Fields’ bonus schemesis based on specific production and safety targets as the primary drivers, withquality factors being secondary drivers at management levels.

 

*SocialDevelopment*

 

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 one Rand per each ounce of gold producedfrom its South African operations each year plus 0.5% of annual pre-tax profitsof its South African operations. Ghana has a similar program in place and fundsan aggregate amount of $1 per ounce of gold produced plus 0.5% of annualpre-tax profits at the Ghana operations. In Australia, contributions are madeto the Gold Fields Australian Foundation at a rate of A$0.80 per ounce of goldsold. The funds from those operations are applied to development projects wherethe relevant operation is located. Currently, the Foundation focuses on fourprimary areas:

 

•        **Education**. The Foundation has initiatives involvingall levels of education from pre-schools to universities. In South Africa, thefocus has been on developing educational infrastructure, including providingclassrooms, laboratories and libraries. In addition, the Foundation providesfor professional training and education, such as AIDS-related training forhealth care workers. 

•        **Health Care**. The Foundation has funded health careprojects involving a number of issues, in particular, HIV and AIDS, women’shealth issues, tuberculosis and health care infrastructure development. TheFoundation is also involved with various primary care issues. 

•        **Community Development**. The Foundation operates a number ofprograms which focus on improving community life, especially in rural areas.This includes programs dedicated to education, training, welfare, smallbusiness development and job creation, among others. 

•        **Environmental Education andConservation**. The Foundationsupports various initiatives which work to encourage and facilitate communityparticipation in natural resource management and promote an integrated andsustained approach to the environment. 

 

*EmploymentEquity*

 

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 is currentlymaking adequate progress towards the targets under its plan and is incompliance with legal and regulatory requirements regarding employment equity.

 

*Training*

 

Gold Fields spentapproximately Rand 133.4 million, $865,000 and A$1.1 million on employeetraining and development in fiscal 2005 at its South African, Ghanaian andAustralian operations, respectively. Particular emphasis is placed on literacyas Gold Fields estimates that approximately 42% of its South African employeesare functionally illiterate.

 

Another area of currentfocus is improvement in middle management managerial skills. Gold Fields hasimplemented an internal leadership program which is expected to help fulfillthe human resources requirements of the Mining Charter. See “Information on theCompany—Regulatory Matters—South Africa—Mineral Rights.”

 

In addition, Gold Fieldsprovides ongoing training to employees regarding safe work practices and othersafety issues. Gold Fields’ training programs relating to safe workingpractices are aligned with South Africa’s National Qualifications Framework. Inaddition, Gold Fields’ South African 

 

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training centers areaccredited by the Sectoral Education and Training Authority (MiningQualification Authority) for the mining industry.

 

In fiscal 2003, Gold Fieldsimplemented an integrated people development system called The IntegratedManager, or TIM, at all mine sites. TIM includes systems designed to track andmanage employee performance and development programs. TIM was fully implementedduring fiscal 2004 and focuses training on areas that will enhance employeesafety, performance and development and integrate the various employeedevelopment initiatives within Gold Fields.

 

***Health and Safety***

 

*Health*

 

The principal health risksassociated with Gold Fields’ mining operations in South Africa arise fromoccupational exposure to dust, noise, heat, noxious fumes and chemicals. Themost significant occupational diseases affecting Gold Fields’ workforce includelung diseases (particularly silicosis, tuberculosis and a combination of thetwo), noise induced hearing loss and heat exhaustion. In South Africa, theincidence of tuberculosis in mine workers is aggravated by exposure tocrystalline silica dust and by compromised immunity due to HIV infection. GoldFields is working to increase the level of ventilation at its undergroundoperations in order to try to lower the risk of lung disease for its workers.To reduce the incidence of noise-induced hearing loss, Gold Fields implementsengineering controls where practicable and if it is not possible Gold Fieldstrains its workers to use adequate ear protection and provides appropriateequipment. Gold Fields has embarked on significant initiatives to address HIVinfection and AIDS among its workforce.

 

In Ghana and Australia theprimary health risks include dust and noise-induced hearing loss. Malaria isalso a significant health risk in Ghana. To combat these risks, Gold Fieldsprovides workers with appropriate protective gear and regular training andscreening tests.

 

Gold Fields provides freehealthcare to a substantial portion of its South African and Ghanaian employeeswhile they are employed by Gold Fields. This includes the operation of hospitalsand clinics to provide treatment as needed. Workers in Australia areresponsible for their own health care.

 

*HIV/AIDSProgram*. Gold Fields’South African workforce has a similar level of HIV prevalence to that presentin groups 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/AIDS awareness campaigns; 

•        peer education and training, involving morethan 800 peer educators; 

•        voluntary counseling and testing; 

•        condom promotion and distribution, with astated goal of three condoms per employee per week; 

•        treatment of sexually transmitted diseases,including treatment of infected prostitutes and “periodic presumptive therapy”which involves giving a broad spectrum of antibiotics to asymptomaticprostitutes at high risk of contracting sexually transmitted diseases; 

•        care and support for workers with HIV/AIDS.This includes wellness management, ill health retirement for workers with AIDS(with workers encouraged to return home to their families) and home based carefor such workers following retirement. In April 2003, Gold Fieldsannounced that it had extended the program to include the delivery of HighlyActive Antiretroviral Therapy, or HAART, as a treatment option for employeesliving with AIDS; and 

•        collaboration with international initiativessuch as the Global Health Initiative, World Economic Forum, World HealthOrganization and USAID. 

 

In July 2004,management estimated that 28.3% of Gold Fields’ workforce in South Africa wasinfected with HIV. Based on this level of prevalence, other existing data andvarious other assumptions, many of which involve factors beyond Gold Fields’control, management estimates that without appropriate interventions theultimate impact of HIV/AIDS on its operating costs could be as high as $10 perounce of gold produced at its South African operations two years after theprojected peak of HIV prevalence in approximately 2017, when the largest numberof employees on HAART will be reached. The cost in fiscal 2005 was estimated at$4.35 per ounce. Gold Fields hopes to limit the impact of HIV/AIDS on itsoperating costs through its HIV/AIDS program. Management estimates that,depending on the success of its HIV/AIDS program, the maximum expected impactof AIDS on operating costs at its South African operations could be reducedfrom $10 per ounce estimate to as low as $6.00 per ounce of gold produced.However, the ultimate impact of HIV/AIDS on Gold Fields’ operating costs couldvary significantly depending on any of these factors.

 

See “Key Information — RiskFactors — HIV/AIDS poses risks to Gold Fields in terms of lost productivity andincreased costs.”

 

On December 12, 2001,Gold Fields entered into an agreement with the principal labor unionsrepresenting its employees in which it and the unions agreed to implementvarious initiatives aimed at reducing the spread of HIV/AIDS among Gold Fields’workforce and providing for the treatment and care of employees who are HIVpositive or suffering from AIDS. These initiatives include, among others,improving awareness and education among employees regarding HIV/AIDS, promotingcondom usage among employees, managing sexually transmitted infections 

 

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and collectively supportinga wellness management program for employees who are HIV positive. In April 2003,the Gold Fields HIV/AIDS program was recognized as one of the nine bestprograms in the world by the Global Business Coalition Against AIDS.

 

HIV/AIDS prevalence is notsignificant in Gold Fields’ Ghanaian or Australian workforces. Gold Fields hasalso introduced its HIV/AIDS program in Ghana.

 

*Safety*

 

Operating mines,particularly underground mines, involves significant safety hazards. Gold Fieldshas undertaken a number of safety initiatives intended to lower the rate ofinjuries and fatalities incurred by employees in connection with itsoperations. A number of these initiatives involve ensuring that employeesreceive adequate training regarding safe workplace practices. In addition, GoldFields takes steps to address particular safety issues which are present at itsoperations. Specific safety issues are explained in further detail inconnection with the description of each of Gold Fields’ operations above.

 

Gold Fields introduced a newhealth and safety compliance program in fiscal 2001 at its South Africanoperations, with the goal of improving compliance with the Mines Health andSafety Act and other rules, standards, regulations and generally acceptedprinciples relating to health and safety. The Full Compliance Safety ManagementInitiative, as it is called, has been implemented at all of Gold Field’soperations and aims to:

 

•        eliminate fatal accidents at Gold Fields’mines; 

•        reduce accident rates by 50% over a five-yearperiod, commencing in July 2000; and 

•        maintain a safe and healthy workingenvironment with quality training, good practice and full employee commitment. 

 

Gold Fields operations inAustralia as well as Tarkwa mine in Ghana are certified under OccupationalHealth and Safety Assessment Series 18000, an occupational health andsafety management specification system. The South African operations and Damangare scheduled for such certification in fiscal 2006.

 

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**Item 7: MAJOR SHAREHOLDERS AND RELATED PARTYTRANSACTIONS**

 

**MajorShareholders**

 

To the knowledge ofmanagement: (1) Gold Fields is not directly or indirectly owned orcontrolled (a) by another corporation or (b) by any foreigngovernment and (2) there are no arrangements the operation of which may ata subsequent date result in a change in control of Gold Fields. To theknowledge of Gold Fields’ management, there is no controlling shareholder ofGold Fields.

 

As of November 30,2005, the issued share capital of Gold Fields consisted of 492,114,739 ordinaryshares.

 

A list of the individualsand organizations holding, to the knowledge of management, directly orindirectly, 5% or more of its issued share capital as of October 31, 2005is set forth below.

 
| **Beneficial owner**               | ** ** | **Ordinary Shares** | ** ** | **Percentage** | ** ** |
|------------------------------------|------------|---------------------|------------|----------------|------------|
| MMC Norilsk Nickel(1)              |       | 98,467,758          |       | 20.0           |       |
| Public Investment Commission(2)    |       | 32,952,603          |       | 6.7            |       |
| Harmony Gold Mining Company(3)     |       | 26,591,018          |       | 5.4            |       |
| Capital Research and Management(4) |       | 23,993,873          |       | 4.9            |       |
| Old Mutual plc(5)                  |       | 20,817,213          |       | 4.2            |       |

 

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Notes: 

(1)               MMC Norilsk Nickel previously owned theseshares directly. In May 2005, these shares were transferred to JeningtonInternational Inc., an indirectly, wholly owned subsidiary of MMC NorilskNickel. The entire share capital of Jenington International Inc. wastransferred to ZAO Polyus, a direct wholly owned subsidiary of MMC NorilskNickel, as part of a spin-off by MMC Norilsk Nickel of its mining assets. MMCNorilsk Nickel is controlled by Vladimir O. Potanin and Mikhail D. Prokhorov.

(2)               The Public Investment Commission holds aportion of its shares directly and a portion of its shares through StanlibAsset Management, Sanlam Investment Managers and RMB Asset Management. 

(3)               On November 16, 2005, Harmony GoldMining Company Ltd. announced the sale of its remaining shares in Gold Fields.

(4)               Capital Research and Management holds itsshares through JPMorgan Chase Bank and State Street Bank & TrustCompany.

(5)               Old Mutual holds its shares through OldMutual Life Assurance Company of South Africa Limited and various subsidiaries.Jakes G. Gerwel, a non-executive director of Gold Fields, is also a director ofOld Mutual Life Assurance Company of 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.

 

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 October 31,** | ** ** |
| ** **                           | ** ** | **2003**                 | ** ** | **2004** | ** ** | **2005** | ** ** | **2005** | ** ** |
| **Beneficial  owner**                | ** ** | **(%**                   | **)**      | **(%** | **)** | **(%** | **)** | **(%** | **)** |
| Anglo  American plc(1)               |       | 20.9                     |       | — | (2) | — | (2) | — | (2) |
| OJSC MMC  Norilsk Nickel(3)          |       | —(2                 | )          | 20.0 |   | 20.0 |   | 20.0 |   |
| Public  Investment Commission(4)     |       | 4.9                      |       | 4.9 |   | 4.9 |   | 6.7 |   |
| Capital  Research and Management(5)  |       | 2.8                      |       | 2.2 |   | 4.9 |   | 4.9 |   |
| Old Mutual  plc(6)                   |       | 6.1                      |       | 5.8 |   | 4.6 |   | 4.2 |   |
| Harmony Gold  Mining Company Ltd.(7) |       | —(2                 | )          | —(2 | ) | 5.4 |   | 5.4 |   |

 

----

Notes: 

(1)               Anglo American plc held its shares throughits indirect, wholly owned subsidiary, Anglo South Africa Capital (Proprietary)Ltd. 

(2)               To the knowledge of Gold Fields’ management,the entities did not own Gold Fields’ ordinary shares on the dates specified. 

(3)               MMC Norilsk Nickel previously owned theseshares directly. In May 2005, these shares were transferred to JeningtonInternational Inc., a indirectly, wholly owned subsidiary of MMC NorilskNickel. The entire share capital of Jenington International Inc. wastransferred to ZAO Polyus, a direct wholly owned subsidiary of MMC NorilskNickel, as part of a spin-off by MMC Norilsk Nickel of its mining assets. MMCNorilsk Nickel is controlled by Vladimir O. Potanin and Mikhail D. Prokhorov.

(4)               The Public Investment Commission holds aportion of its shares directly and a portion of its shares through StanlibAsset Management, Sanlam Investment Managers and RMB Asset Management. 

(5)               Capital Research and Management holds itsshares through JPMorgan Chase Bank and State Street Bank & TrustCompany. 

(6)     Mutual plc holds itsshares through Old Mutual Life Assurance Company of South Africa Limited andvarious subsidiaries.

(7)               On November 16, 2005, Harmony GoldMining Company Ltd. announced the sale of its remaining shares in Gold Fields.

 

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As of June 30, 2005,13,484 record holders of Gold Fields’ ordinary shares, holding an aggregate of124,995,693 ordinary shares (25.4%), were listed as having addresses in SouthAfrica. As of June 30, 2005, 100 record holders of Gold Fields’ ordinaryshares, holding an aggregate of 167,276,824 ordinary shares (34.0%), werelisted as having addresses in the United States.

 

**RelatedParty Transactions**

 

None of the directors,officers or major shareholders of Gold Fields or, to the knowledge of GoldFields, their families, had any interest, direct or indirect, in anytransaction during the last three fiscal years or in any proposed transaction whichhas affected or will materially affect Gold Fields or its investment interestsor subsidiaries, other than as stated below.

 

***Pro-Drilling***

 

Michael J. Prinsloo,Executive Vice President, South African Operations, sits on the Board of andowns 50% of Pro-Drilling & Mining (Proprietary) Limited, orPro-Drilling, a privately held drilling company. Pro-Drilling has a contractwith GFI Mining South Africa (Proprietary) Limited to provide labor, equipmentand materials for diamond drilling and core recovery at the South Africanoperations. The contract is valid until terminated upon one month’s writtennotice by either party. Gold Fields was employing Pro-Drilling prior to Mr. Prinsloo’sjoining Gold Fields. During fiscal 2005 Gold Fields paid Pro-Drilling a totalof approximately Rand 11 million ($1,702,786). Gold Fields expects tocontinue its contract with Pro-Drilling during fiscal 2006 on similar terms.

 

***Mvelaphanda***

 

Tokyo M.G. Sexwale, anon-executive director of Gold Fields, is the Chairman of the Board ofMvelaphanda Resources Limited, or Mvela Resources, an African mining andexploration company and sit on the Boards of certain of its subsidiaries.Bernard R. van Rooyen, who retired as a non-executive director of Gold Fieldson November 17, 2005, is the Deputy Chairman of Mvela Resources. Both Mr. Sexwaleand Mr. van Rooyen are also significant shareholders of Mvela Resources.

 

On July 10, 2002, GoldFields announced that it had granted Mvela Resources the right to acquire abeneficial ownership interest of between 5% and 15% in, and a correspondingshare of Gold Fields’ obligations and liabilities with respect to, thedevelopment, financing or construction of any precious metals mine which isdeveloped in Africa, beginning March 1, 2002. In consideration for thetransaction, referred to in this discussion as the Exploration Arrangement,Mvela Resources is obligated to issue to Gold Fields options to subscribe intranches for linked units in Mvela Resources, consisting of one ordinary sharesand one unsecured debenture issued by Mvela Resources, at a 10% premium to thefive day weighted average trading price on the JSE Securities Exchange SouthAfrica. Mvela Resources issued to Gold Fields 380,102 options to subscribe forlinked units pursuant to this arrangement on 26 September, 2002.Thereafter, each year Mvela Resources was obligated to issue to Gold Fieldsoptions to subscribe for linked units with a value equal to half of the amountspent by Gold Fields on the precious metals exploration projects covered by theagreement between the parties during that year. On May 5, 2003, MvelaResources issued to Gold Fields further options to subscribe for 373,435 linkedunits. 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 2 years from the dateof issuance, but as of September 16, 2004, this period was extended to5 years. As of September 30, 2004, the aggregate value of the optionsto subscribe for ordinary shares issued by Mvela Resources to Gold Fields wasapproximately Rand 1.3 million. The term of the agreement is fiveyears.

 

On March 8, 2004, theshareholders of Gold Fields approved a series of transactions, referred to inthis discussion as the Mvelaphanda Transaction, involving the acquisition byMvela Resources of a 15% beneficial interest in the South African gold miningassets of Gold Fields for cash consideration of Rand 4,139 million.

 

The Mvelaphanda Transactionwas preceded by an internal restructuring of Gold Fields, whereby each of theDriefontein, Kloof and Beatrix mining operations, as well as certain ancillaryassets and operations, were transferred to a new, wholly-owned subsidiary ofGold Fields, GFI Mining South Africa (Proprietary) Limited, or GFIMSA.

 

On November 26, 2003,Gold Fields, Mvela Resources, Mvelaphanda Gold (Proprietary) Limited, or MvelaGold, a wholly-owned subsidiary of Mvela Resources, and GFIMSA entered into acovenants agreement, or the Covenants Agreement, regulating their rights andobligations with respect to GFIMSA. This agreement became effective followingthe advance by Mvela Gold of the loan to GFIMSA described below, which isreferred to in this discussion as the Mvela Loan, and, among other things,provides for Mvela Gold to nominate two members of GFIMSA’s Board of Directorsand two members of each of GFIMSA’s Operations Committee and TransformationCommittee, the latter of which has been established to monitor compliance withthe mining charter promulgated under the Mineral and Petroleum ResourcesDevelopment Act 2002. Under the Covenants Agreement, GFIMSA cannot dispose ofany material assets, enter into, cancel or alter any material transactionbetween GFIMSA and any related party or make any material amendment to itsconstitutive documents without the prior written consent of Mvela Gold. Inaddition, if Gold Fields or GFIMSA wants to increase the interest of blackempowerment entities in GFIMSA or in any business or assets of GFIMSA, otherthan pursuant to an employee share incentive scheme, Gold Fields must offer toMvela Gold the opportunity to increase its interest in GFIMSA. By its terms,the Covenants Agreement remains in force for so long as Gold Fields 

 

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remains a shareholder inGFIMSA and Mvela Gold holds the right to subscribe for 15% of the shares interestin, or is a shareholder of, GFIMSA, provided that it terminates if the sharesof GFIMSA are listed on the JSE Securities Exchange South Africa.

 

On December 11, 2003,Gold Fields, GFIMSA, and Mvela Gold entered into a subscription and shareexchange agreement, or the Subscription and Share Exchange Agreement, pursuantto which, upon repayment of the Mvela Loan, Mvela Gold must subscribe forshares equal to 15% of GFIMSA’s outstanding share capital, including the newlyissued shares, for consideration of Rand 4,139 million. In addition, for aperiod of one year after the subscription by Mvela Gold of the GFIMSA shares,each of Gold Fields and Mvela Gold will be entitled to require the exchange ofMvela Gold’s GFIMSA shares for ordinary shares of Gold Fields of an equivalentvalue based on an exchange ratio equal to 15% of a discounted cash flowcalculation as applied to GFIMSA’s operations divided by the same calculationas applied to Gold Fields’ operations, with certain adjustments. Mvela Gold isentitled to dispose of the GFIMSA shares and any Gold Fields ordinary shares itmay hold only in accordance with the terms of a pre-emptive rights agreemententered into by the parties whereby if Mvela Gold receives an offer for, orotherwise wishes to sell, any GFIMSA or Gold Fields shares, it must first offerto sell them to Gold Fields. The Subscription and Share Exchange Agreementbecame unconditional following the advance of the Mvela Loan to GFIMSA on March 17,2004.

 

On December 11, 2003,Gold Fields, GFIMSA, Mvela Gold, First Rand Bank Limited, Gold Fields AustraliaPty Limited, or Gold Fields Australia, and Gold Fields Guernsey Limited, orGold Fields Guernsey, entered into a loan agreement, or the Mvela LoanAgreement, pursuant to which Mvela Gold advanced a loan of Rand4,139 million, or the Mvela Loan, to GFIMSA on March 17, 2004. GFIMSAapplied the loan toward funding its acquisition of Gold Fields’ South Africanmining operations and certain ancillary assets and operations as part of theinternal restructuring of Gold Fields.

 

The Mvela Loan was funded byway of commercial bank debt of approximately Rand 1,300 million andmezzanine finance of approximately Rand 1,100 million, with the balance ofapproximately Rand 1,700 million being raised by way of an internationalprivate placement of shares of Mvela Resources. In connection with themezzanine finance, Gold Fields subscribed for preference shares in an amount ofRand 200 million in Micawber 325 (Proprietary) Limited, or Micawber, aspecial purpose entity established by the mezzanine lenders. Further, GoldFields subscribed for 4,350,000 ordinary shares of Mvela Resources which wereissued by Mvela Resources in the private placements for consideration of Rand100 million. In order to facilitate the private placement, Mvela Resourcesproposed a scheme of arrangement, or the Scheme, between itself and the holdersof its linked units. The effect of the Scheme, which became operative on November 24,2003, was that each linked unit holder received two ordinary shares of MvelaResources for each linked unit held. In order to maintain the same number oflisted instruments in issue after the implementation of the Scheme, MvelaResources consolidated its ordinary share capital on a two for one basis. As aresult, the net effect of the Scheme and the share consolidation is that GoldFields has 1,275,349 options to acquire the same number of ordinary shares ofMvela Resources issued in connection with the Exploration Arrangement. Inaddition, pursuant to an agreement entered into on February 13, 2004, orthe PIC Agreement, Gold Fields has effectively guaranteed a loan ofRand 150 million. See “Operating and Financial Review andProspects–Liquidity and Capital Resources-Cash Resources-Investing” and “–CreditFacilities—Mvela Loan.”

 

On February 13, 2004,the Mvela Loan Agreement was amended, principally in order to add and clarifycertain definitions.

 

On November 17, 2004,GFL Mining Services Limited, or GFLMSL, Gold Fields, Mvela Gold, MvelaResources and GFIMSA entered into an agreement, referred to in this discussionas the Amendment Agreement, amending the existing agreements relating to theMvelaphanda Transaction, including, among others, the Subscription and ExchangeAgreement and the Covenants Agreement. The agreements were amended to provideamong other things, that Mvela Resources may acquire a minimum of 45,000,000and a maximum of 55,000,000 Gold Fields shares should it elect to exchange itsequity interest in the South African assets for Gold Field shares.

 

See “Operating and FinancialReview and Prospects — Overview — Mvelaphanda Transaction.”

 

***RandRefinery***

 

GFL Mining Services Limited,or GFLMSL as agent for GFIMSA, has an agreement with Rand Refinery Limited, orRand Refinery, in which Gold Fields holds a 33.1% interest, providing for therefining of substantially all of Gold Fields’ South African gold production byRand Refinery. Prior to October 1, 2004, GFLMSL acted as agent for RandRefinery to sell up to 50% of Gold Fields’ South African production. However,since October 1, 2004, Gold Fields has sold the gold produced from itsSouth African operations itself. Gold Fields Ghana Limited and AbossoGoldfields Limited are each party to agreements with Rand Refinery totransport, refine and sell substantially all of the gold production from theTarkwa and Damang mines entered into in June 2003. Nicholas J. Holland,who is the Chief Financial Officer and a Director of Gold Fields, has been aDirector of Rand Refinery since July 12, 2000. As a Director of GFLMSL,which is a wholly-owned subsidiary of Gold Fields, Mr. Holland hasdeclared his interest in the contract between Rand Refinery and GFLMSL,pursuant to South African requirements, and has not participated in thedecision of Rand Refinery to enter into the agreement with GFLMSL, Gold FieldsGhana Limited or Abosso Goldfields. Mr. Holland signed the agreement withRand Refinery on behalf of GFLMSL. See “Information on the Company—Descriptionof Mining Business—Refining and Marketing” for further details regarding thesearrangements.

 

Gold Fields believes thatthe above transactions with related parties have been conducted on terms atleast as favorable to it as arm’s length terms.

 

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None of the directors orofficers of Gold Fields or any associate of such director or officer iscurrently or has been at any time during the past three fiscal years materiallyindebted to Gold Fields.

 

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**Item 8: FINANCIAL INFORMATION**

 

Reference is made toItem 18 for a list of all financial statements filed as part of thisannual report. For information on legal proceedings please refer to “Informationon the Company” above.

 

**Dividendsand Dividend Policy**

 

The following table setsforth the dividends announced and paid per share in respect of Gold Fields’ordinary shares for the periods indicated:

 
| ** **                        | ** ** | **Year ended June 30,** | ** ** |
|-----------------------------------|------------|------------------------------|------------|
| ** **                        | ** ** | **2001**                     | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| ** **                        | ** ** | **($)**                      | ** ** | **(R)** | ** ** | **($)** | ** ** | **(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 | (2) | 0.40 | (2) |
| Interim dividend                  |       | 0.13                         |       | 1.05 | (1) | 0.08 |   | 0.90 |   | 0.90 |   | 1.50 |   | 0.06 |   | 0.40 |   | 0.05 |   | 0.30 |   | — |   | — |   |
| Total dividend                    |       | 0.13                         |       | 1.05 |   | 0.13 |   | 1.30 |   | 1.30 |   | 3.70 |   | 0.19 |   | 1.40 |   | 0.11 |   | 0.70 |   | — |   | — |   |

 

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Notes: 

(1)     This interim dividendincluded the final dividend for fiscal 2000, which was deferred as a conditionof an aborted merger between Gold Fields and Franco-Nevada Mining Corporation.  

(2)     This final dividend wasannounced on August 3, 2005 and paid on August 29, 2005. 

 

Gold Fields’ dividend policyis to declare an interim and final dividend in respect of each financial yearbased on 50% of the earnings for the year before taking account of investmentopportunities. Earnings are adjusted to exclude unrealized gains and losses onfinancial instruments and foreign debt, but actual cash flows on maturity offinancial instruments are included in the determination of adjusted earnings.

 

**SignificantChanges**

 

Please refer to “Operatingand Financial Review and Prospects—Recent Developments.”

 

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**Item 9: THE OFFER AND LISTING**

 

**ListingDetails**

 

The principal non-UnitedStates trading market for the ordinary shares of Gold Fields is the JSESecurities Exchange South Africa, or JSE, on which they trade under the symbol “GFI.”The ordinary shares of Gold Fields are also listed on the Official List of theUK Listing Authority and traded on the London Stock Exchange, and are listed onthe Premier Marché of Euronext Paris and the SWX Swiss Exchange. Gold Fields’International Depositary Shares are listed on Euronext Brussels. As of June 30,2005, 13,484 record holders of Gold Fields’ ordinary shares, holding anaggregate of 124,995,693 ordinary shares (25.4%), were listed as havingaddresses in South Africa. As of June 30, 2005, 100 recordholders of Gold Fields’ ordinary shares, holding an aggregate of167,276,824 ordinary shares (34.0%), were listed as having addresses inthe United States.

 

Gold Fields’ ADSs currentlytrade in the United States on The New York Stock Exchange under the symbol “GFI.”The ADRs representing the ADSs are issued by The Bank of New York, asDepositary. Each ADR represents one ADS. Each ADS represents one ordinaryshare.

 

**JSE TradingHistory**

 

The tables below show thehigh and low closing prices in Rand and the average daily volume of tradingactivity on the JSE for Gold Fields’ ordinary shares for the last five fiscalyears.

 

The following table sets outordinary share trading information on a yearly basis for the last five fiscalyears, as reported by I-Net Bridge (Proprietary) Limited, or I-Net Bridge, aSouth African financial information service: 

 

| ** **                            | ** ** | **Ordinary share price**      | ** ** | **Average daily trading  volume (number** | ** ** |
|---------------------------------------|------------|-------------------------------|------------|-------------------------------------------|------------|
| **Year ended June 30,**          | ** ** | **High**                      | ** ** | **Low**                                   | ** ** | **of ordinary shares)** | ** ** |
| ** **                            | ** ** | **(Rand per ordinary share)** | ** ** | ** **                                | ** ** |
| 2001                                  |       | 39.70                         |       | 20.10                                     |       | 782,898 |   |
| 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 (through November 30, 2005) |       | 105.50                        |       | 69.01                                     |       | 1,605,877 |   |

 

The following table sets outordinary share trading information on a quarterly basis for the periodsindicated, 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, 2003 |       | 110.40                        |       | 82.10                                        |       | 1,418,814 |   |
| December 31, 2003  |       | 105.10                        |       | 81.90                                        |       | 1,441,818 |   |
| March 31, 2004     |       | 102.60                        |       | 77.41                                        |       | 2,884,949 |   |
| June 30, 2004      |       | 85.00                         |       | 65.02                                        |       | 1,398,935 |   |
| 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 |   |

 

The following table sets outordinary share trading information on a monthly basis each of the last sixmonths, as reported by I-Net Bridge: 

 

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| ** **              | ** ** | **Ordinary share price**      | ** ** | **Average daily trading volume  (number of** | ** ** |
|-------------------------|------------|-------------------------------|------------|----------------------------------------------|------------|
| **Month ended**         | ** ** | **High**                      | ** ** | **Low**                                      | ** ** | **ordinary shares)** | ** ** |
| ** **              | ** ** | **(Rand per ordinary share)** | ** ** | ** **                                   | ** ** |
| June 30, 2005      |       | 77.90                         |       | 68.00                                        |       | 3,172,886 |   |
| July 30, 2005      |       | 79.00                         |       | 70.99                                        |       | 878,894 |   |
| August 30, 2005    |       | 76.37                         |       | 69.01                                        |       | 1,196,516 |   |
| September 30, 2005 |       | 95.32                         |       | 72.00                                        |       | 2,094,860 |   |
| October 31, 2005   |       | 96.00                         |       | 86.00                                        |       | 1,182,871 |   |
| November 30, 2005  |       | 105.50                        |       | 87.98                                        |       | 2,623,980 |   |

 

On November 30, 2005,the closing of the ordinary shares on the JSE was R99.25.

 

**New YorkStock Exchange and Nasdaq SmallCap Market Trading History**

 

The tables below show thehigh and low closing prices in U.S. dollars and the average daily volume oftrading activity on The Nasdaq SmallCap Market for Gold Fields’ ADSs from July 1,2000 until May 8, 2002 and on the New York Stock Exchange since May 9,2002.

 

The following table sets outordinary share trading information on a yearly basis for the last five fiscalyears, as reported by Bloomberg: 

 

| ** **                            | ** ** | **ADS price**  | ** ** | **Average daily trading** | ** ** |
|---------------------------------------|------------|----------------|------------|---------------------------|------------|
| **Year ended June 30,**          | ** ** | **High**       | ** ** | **Low**                   | ** ** | **volume (number of ADSs)** | ** ** |
| ** **                            | ** ** | **($per ADS)** | ** ** | ** **                | ** ** |
| 2001(1)                               |       | 5.23           |       | 2.63                      |       | 416,049 |   |
| 2002                                  |       | 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 (through November 30, 2005) |       | 16.16          |       | 10.69                     |       | 1,649,516 |   |

 

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Note: 

(1)     Gold Fields delisted itsADSs from the Nasdaq SmallCap market on May 8, 2002 and listed its ADSs onThe New York Stock Exchange on May 9, 2002. 

 

The following table sets outADS trading information on a quarterly basis for the periods indicated, asreported by Bloomberg: 

 

| ** **              | ** ** | **ADS price**  | ** ** | **Average daily trading** | ** ** |
|-------------------------|------------|----------------|------------|---------------------------|------------|
| **Quarter ended**       | ** ** | **High**       | ** ** | **Low**                   | ** ** | **volume (number of ADSs)** | ** ** |
| ** **              | ** ** | **($per ADS)** | ** ** | ** **                | ** ** |
| September 30, 2003 |       | 14.89          |       | 10.63                     |       | 1,964,214 |   |
| December 31, 2003  |       | 15.12          |       | 12.59                     |       | 2,125,869 |   |
| March 31, 2004     |       | 14.70          |       | 11.65                     |       | 1,926,113 |   |
| June 30, 2004      |       | 13.19          |       | 9.93                      |       | 1,527,529 |   |
| 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 |   |

 

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The following table sets outADS trading information on a monthly basis for each of the last six months, asreported by Bloomberg: 

 

| ** **              | ** ** | **ADS price**  | ** ** | **Average daily trading** | ** ** |
|-------------------------|------------|----------------|------------|---------------------------|------------|
| **Month ended**         | ** ** | **High**       | ** ** | **Low**                   | ** ** | **volume (number of ADSs)** | ** ** |
| ** **              | ** ** | **($per ADS)** | ** ** | ** **                | ** ** |
| May 31, 2005       |       | 10.99          |       | 9.57                      |       | 1,368,552 |   |
| June 30, 2005      |       | 11.42          |       | 10.20                     |       | 2,056,041 |   |
| July 30, 2005      |       | 11.65          |       | 10.69                     |       | 1,113,180 |   |
| August 30, 2005    |       | 11.68          |       | 10.72                     |       | 1,589,926 |   |
| September 30, 2005 |       | 14.66          |       | 11.58                     |       | 2,214,276 |   |
| October 31, 2005   |       | 14.81          |       | 13.05                     |       | 1,363,252 |   |
| November 30, 2005  |       | 16.16          |       | 13.13                     |       | 1,947,081 |   |

 

On November 30, 2005,the closing price of Gold Fields’ ADSs quoted on The New York Stock Exchangewas $14.95.

 

**The JSESecurities Exchange South Africa**

 

The JSE was formed in 1887.The JSE provides facilities for the buying and selling of a wide range ofsecurities, including equity and corporate debt securities and warrants inrespect of securities, as well as Krugerrands.

 

The JSE is a self-regulatoryorganization operating under the ultimate supervision of the Ministry ofFinance, through the Financial Services Board and its representative, theRegistrar of Stock Exchanges. Following the introduction of the Stock ExchangesControl Amendment Act No. 54 of 1995, or Stock Exchange Act, whichprovides the statutory 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 JSEto trade either as agents or as principals in any transaction in equities andto allow members to negotiate freely the brokerage commissions payable onagency transactions in equities. With effect from 1996, screen tradingcommenced on the JSE.

 

The market capitalization ofcompanies listed on the JSE was approximately Rand 2.3 trillion as of November 30,2005. The actual float available for public trading is significantly smallerthan the aggregate market capitalization because of the large number oflong-term holdings by listed holding companies in listed subsidiaries andassociates, the existence of listed pyramid companies and cross holdingsbetween listed companies. Liquidity on the JSE (measured by reference to thetotal market value of securities traded as a percentage of the total marketcapitalization) was 38.5% for 2001. Trading is concentrated in a small, butgrowing number of companies. As of November 30, 2005, there were 157listed companies on the JSE.

 

South Africa was included inthe Morgan Stanley Capital International Emerging Markets Free Index and theInternational Finance Corporation Investable Index in March and April 1995,respectively. South Africa has a significant representation in these emergingmarket indices.

 

The four main indicescharting the performance of the JSE as a whole and of composite sectors are theAll Share Index, the Financial Index, the Industrial Index and the ResourcesIndex. As of November 30, 2005, the All Share Index, Financial Index,Industrial Index and the Resource Index accounted for 100%, 22%, 30% and 38%,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 three days after each trade (T+3). The JSE has stated that thesettlement period may be reduced in the future to one day (T+1).

 

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**Item 10: 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 theprovisions of the Companies Act. Gold Fields’ registration number is1968/004880/06. Section 3 of Gold Fields’ Memorandum of Associationprovides that its objectives are, among other things: (1) to purchase,lease or otherwise acquire mines, mineral and other properties, lands, farmsand hereditaments, (2) to buy, sell, refine and deal in bullion, specie,coin and precious metals and (3) to carry on any mining and metallurgicaloperation which may seem conducive to any of Gold Fields’ objectives.

 

**ShareCapital**

 

The authorized share capitalof Gold Fields consists of 1,000,000,000 ordinary shares with a par value ofRand 0.50 each. The aggregate number of issued shares of Gold Fields on November 30,2005 was 492,114,739ordinary shares of Rand 0.50 each.  All of the issued ordinary shares rankequally with one another and are fully paid and are not subject to calls foradditional payments of any kind.

 

More than 10% of Gold Fields’current issued share capital has been paid for in assets other than cash. GoldFields ordinary shares were exchanged for shares in GFL Mining Services Ltd.during the merger with Gold Fields in 1999 and for the minority shares in St.Helena Gold Mines Limited when Gold Fields acquired total ownership. See “Informationon the Company — History.” On November 30, 2001, 12,000,000 ordinaryshares were issued to WMC Resources Ltd as part of the consideration for theacquisition of St. Ives and Agnew mining operations from WMC Limited and WMCResources Ltd. See “Information on the Company — Gold Fields Mining Operations— Ghana Operation — Damang.” In addition, on September 11, 2003, GoldFields issued 564,841 ordinary shares to Outokumpu Oy, or Outokumpu, as part ofthe consideration for the acquisition of Outokumpu’s 49% interest in the ArcticPlatinum Project, or APP. See “Information on the Company — Exploration —Arctic Platinum Project.”

 

At a general meeting held onNovember 17, 2005, 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.

 

The following table setsforth changes in Gold Fields’ issued share capital for the periods indicated:

 

| ** **                | ** ** | **Total Issued**    | ** ** | **Total Authorized** | ** ** |
|---------------------------|------------|---------------------|------------|----------------------|------------|
| **As of**                 | ** ** | **Ordinary Shares** | ** ** | **Ordinary Shares**  | ** ** |
| June 30, 2003(1)     |       | 472,364,872         |       | 1,000,000,000        |       |
| June 30, 2004(2)     |       | 491,492,520         |       | 1,000,000,000        |       |
| June 30, 2005(3)     |       | 492,294,226         |       | 1,000,000,000        |       |
| November 30, 2005(4) |       | 492,114,739         |       | 1,000,000,000        |       |

 

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Notes: 

(1)     Reflects the issuance of1,842,648 ordinary shares issued under the GF Management Incentive Scheme andthe GF Non-Executive Director Share Plan. 

(2)     Reflects the issuance of19,127,648 ordinary shares, of which 564,841 shares issued to Outokumpu as partof the consideration for Gold Fields’ purchase of Outokumpu’s 49% stake in theArctic Platinum Project, 17,250,000 shares issued in an international privateplacement, 1,300,977 shares issued under the GF Management Incentive Scheme andthe GF Non-Executive Director Share Plan and 11,830 shares issued to others. 

(3)               Reflects the issuance of 801,706 ordinaryshares issued under the GF Management Incentive Scheme and the GF Non-ExecutiveShare Plan.

(4)     Reflects the repurchase bythe company of 1,000,000 of its ordinary shares at a weighted average price ofRand 74.89, which were de-listed and cancelled on August 17, 2005 and theissuance of 333,681 ordinary shares issued under the GF Management IncentiveScheme and the GF Non-Executive Director Share Plan. 

 

**Dividendsand Payments to Shareholders**

 

Gold Fields may makepayments (including the payment of dividends) to its shareholders from time totime in accordance with provisions of the Companies Act and the requirements ofthe JSE and Gold Fields’ Articles of Association. The Companies Act prohibits apayment (including the payment of any dividend) to a company’s shareholders ifthere are reasonable grounds for believing that:

 

•        the company is, or would be after thepayment, unable to pay its debts as they become due; or 

 

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•        the consolidated assets of the company fairlyvalued would, after the payment, be less than the consolidated liabilities ofthe company. 

 

Subject to the aboverequirements, the shareholders of Gold Fields in a general meeting or thedirectors may from time to time declare a dividend or any other payment to bepaid to shareholders and to the holders of share warrants (if any) inproportion 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.

 

**VotingRights**

 

Every shareholder of GoldFields, or representative of a shareholder, who is present at a shareholders’meeting has one vote on a show of hands, regardless of the number of shares heholds or represents or number of shareholders he represents, unless a poll isdemanded. Every Gold Fields’ shareholder is, on a poll, entitled to one voteper ordinary share held. A poll may be demanded by any person entitled to voteat the meeting. Neither the Companies Act nor Gold Fields’ Articles ofAssociation provide for cumulative voting.

 

A shareholder is entitled toappoint a proxy to attend, speak and vote at any meeting on his or her behalf.The proxy need not be a shareholder.

 

**Issue ofAdditional Shares and Pre-emptive Rights**

 

Shareholder approval isrequired for any issuance of additional shares. Shareholders may either conveya general or specific authority to directors to issue shares. A generalauthority is valid until the next annual general meeting.

 

The JSE and Gold Fields’Articles of Association require that any new issue of equity shares by GoldFields must first be offered to existing shareholders in proportion to theirshareholding in the company unless, among other things, the issuance to newshareholders is:

 

•        pursuant to a shareholder approved employeeshare incentive scheme; 

•        for the acquisition of an asset, providedthat if the issue is more than 30% of the company’s issued share capital, asimple majority of shareholders must vote in favor of the acquisition; 

•        to raise cash through a general issuance inthe discretion of the directors to the general public (but not to relatedparties) of up to 15% of the issued share capital in any one fiscal year at anissue price with a discount not exceeding 10% of the 30 business dayweighted average trading price prior to the date the application is made to theJSE to list the shares provided that a 75% majority of votes cast byshareholders at a general meeting must approve the granting of such authorityto the directors; or 

•        to raise cash through a specific issuance ofshares for cash, provided that a 75% majority of shareholders, other than controllingshareholders, vote in favor of the resolution to issue the shares at a generalmeeting. 

 

**Transfer ofShares**

 

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 three 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 in certificatedform will need to dematerialize their shares in order to trade on the JSE.

 

**Disclosureof Interest in Shares**

 

Under South African law, aregistered holder of Gold Fields’ shares who is not the beneficial owner ofsuch shares is required to disclose every three months to Gold Fields theidentity of the beneficial owner and the number and class of securities held onbehalf of the beneficial owner. Moreover, Gold Fields may, by notice inwriting, require a person who is a registered shareholder, or whom Gold Fieldsknows or has reasonable cause to believe has a beneficial interest in GoldFields’ ordinary shares, to confirm or deny whether or not such person holdsthe ordinary shares or beneficial interest and, if the ordinary shares are heldfor another person, to disclose to Gold Fields the identity of the person onwhose behalf the ordinary shares are held. Gold Fields may also require theperson to give particulars of the extent of the beneficial interest held duringthe three years preceding the date of the notice. Gold Fields is obligated toestablish and maintain a register of the disclosures described above and topublish in its annual financial statements a list of the persons who holdbeneficial interest equal to or in excess of 5% of the total number of ordinaryshares issued by Gold Fields together with the extent of those beneficialinterests.

 

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**GeneralMeetings of Shareholders**

 

The directors may convenegeneral meetings of Gold Fields’ shareholders and a general meeting may also beconvened on a requisition by shareholders made pursuant to the Companies Act.Gold Fields is obligated to hold an annual general meeting for each fiscal yearwithin nine months of the end of each fiscal year and prior to 15 monthsafter the date of the last annual general meeting.

 

Annual general meetings andmeetings calling for the passage of a special resolution require 21 days’notice in writing of the place, day and time of the meeting to shareholders.Any other general meeting of Gold Fields shareholders requires at least14 days’ notice in writing to shareholders.

 

Business may be transactedat any meeting of shareholders only while a quorum of shareholders is present.Three shareholders present personally or by representative and entitled to voteconstitutes a quorum for a general meeting and an annual general meeting.

 

The annual general meetingdeals with and disposes of all matters prescribed by Gold Fields’ Articles ofAssociation and by the Companies Act, including:

 

•        the consideration of the audited financialstatements and report of the independent accountants; and 

•        the election of directors. 

 

**AnnualReport and Accounts**

 

Gold Fields is required tokeep the accounting records and books of accounts as are necessary to presentthe state of affairs of the company and to explain the financial position ofthe company as prescribed by the Companies Act. No shareholder (who is not adirector of Gold Fields) has the right to inspect any account or book or documentof Gold Fields, except as conferred by the Companies Act or authorized by thedirectors or by a resolution of Gold Fields in general meeting.

 

The directors of Gold Fieldswill cause to be prepared annual financial statements and an annual report asrequired by the Companies Act and the JSE Listing Requirements. Gold Fieldswill send by mail to the registered address of every shareholder a copy of theannual report and annual financial statements. Not later than three monthsafter the first six months of its financial year, Gold Fields will mail toevery shareholder an interim report for the previous six month period.

 

**Changes inCapital or Objects and Powers of Gold Fields**

 

The Gold Fields shareholdersmay, by the passing of a special resolution in accordance with the provisionsof the Companies Act:

 

•        increase Gold Fields’ authorized sharecapital; 

•        divide all or any part of Gold Fields’ sharecapital into shares of larger amount than Gold Fields’ existing shares orconsolidate and reduce the number of the issued no par value shares, if any; 

•        subdivide all or any portion of Gold Fields’shares into shares of a smaller amount than is fixed by Gold Fields’ Memorandumof Association; 

•        convert all of Gold Fields’ ordinary orpreference share capital from having a par value into shares of no par value; 

•        reduce Gold Fields’ authorized share capitaland, if required by law, its issued share capital, stated capital and anycapital redemption reserve fund or any share premium account; 

•        alter the provisions of Gold Fields’Memorandum of Association with respect to the objects and powers of thecompany; and 

•        subject to the provisions of the CompaniesAct or any other South African law governing companies and the requirements ofthe JSE and any other stock exchange upon which the shares of Gold Fields maybe quoted or listed from time to time, allow Gold Fields to acquire sharesissued by itself or by its holding company or in any subsidiary of its holdingcompany from time to time, and provided that: 

•        the directors may resolve that any return ofcapital made to all or any shareholders whose registered addresses are outsideSouth Africa will, subject to any exchange control regulations then in force,be paid in such other currencies as may be stipulated by the directors. Thedirectors may also stipulate the date for converting Rand to those currenciesand the provisional rate of exchange, provided that the date for conversionmust be within a period of 30 days prior to the date of payment; and 

•        all unclaimed amounts due as a result of areduction of capital or any consolidation or subdivision of capital may beinvested or otherwise made use of by the directors for the benefit of GoldFields until claimed. 

 

**Variationof 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.

 

**Distributionof Assets on Liquidation**

 

In the event of voluntary orcompulsory liquidation, dissolution or winding up, the assets remaining afterpayment of all the debts and liabilities of Gold Fields, including the costs ofliquidation, shall be dealt with by a liquidator who may, with the sanction ofa special resolution, among other things, divide among the shareholders anypart of the assets of Gold Fields, and may vest any part of the assets of GoldFields as the 

 

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liquidator deems fit intrustees for the benefit of shareholders. The division of assets is notrequired to be done in accordance with the legal rights of shareholders of GoldFields. In particular, any class may be given preferential or special rights ormay be partly or fully excluded.

 

**Purchase ofShares**

 

The Companies Act permitsthe establishment of share incentive trusts for the purpose of purchasingshares of a company for the benefit of its employees, including salarieddirectors. These share incentive trusts are permitted to extend loans tocompany employees, other than non-salaried directors, for the purpose ofpurchasing or subscribing for shares of 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.

 

**BorrowingPowers**

 

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 orobligation of Gold Fields or of any third party. Gold Fields has unlimitedborrowing powers.

 

**Non-SouthAfrican Shareholders**

 

There are no limitationsimposed by South African law or by the Articles of Association of Gold Fieldson the rights of non-South African shareholders to hold or vote Gold Fields’ordinary shares.

 

**Rights ofMinority Shareholders and Directors’ Duties**

 

Majority shareholders ofSouth African companies have no fiduciary obligations under South Africancommon law to minority shareholders. However, under the Companies Act, ashareholder may, under certain circumstances, seek relief from the court if hehas been unfairly prejudiced by the company. There may also be common lawpersonal actions available to a shareholder of a company.

 

In South Africa, the commonlaw imposes on directors’ duties to, among other things, act with care, skilland diligence and to conduct the company’s affairs honestly and in the best interestsof the company.

 

**MaterialContracts**

 

***MvelaphandaTransaction***

 

On March 8, 2004, theshareholders of Gold Fields approved a series of transactions, referred to inthis discussion as the Mvelaphanda Transaction, involving the acquisition byMvelaphanda Resources Limited, or Mvela Resources, of a 15% beneficial interestin the South African gold mining assets of Gold Fields for cash considerationof Rand 4,139 million. In connection with the Mvelaphanda Transaction:

 

•        on July 25, 2003, Beatrix Mining VenturesLimited, or Beatrix, Driefontein Consolidated (Proprietary) Limited, orDriefontein, Kloof Gold Mining Company Limited, or Kloof, GFL MiningServices Limited, or GFLMS, Gold Fields and Newshelf 706 Limited, orGFIMSA, entered into a reorganization agreement, or the ReorganizationAgreement, pursuant to which each of the Driefontein, Kloof and Beatrix miningoperations were transferred to a new, wholly owned subsidiary of Gold Fields; 

•        on November 26, 2003, Gold Fields, MvelaResources, Mvelaphanda Gold (Proprietary) Limited, or Mvela Gold, a whollyowned subsidiary of Mvela Resources, and GFI Mining South Africa (Proprietary)Limited, or GFIMSA, entered into a covenant agreement, or the CovenantsAgreement, regulating their rights and obligations with respect to GFIMSA; 

•        on December 11, 2003, Gold Fields,GFIMSA, Mvela Gold, First Rand Bank Limited, Gold Fields Australia Pty Limitedand Gold Fields Guernsey entered into a loan agreement, or the Mvela LoanAgreement, pursuant to which Mvela Gold advanced a loan ofRand 4,139 million, or the Mvela Loan, to GFIMSA on March 17,2004; 

•        on December 11, 2003, Gold Fields,GFIMSA, and Mvela Gold entered into a subscription and share exchangeagreement, or the Subscription and Share Exchange Agreement, pursuant to which,upon repayment of the Mvela Loan, Mvela Gold must subscribe for shares equal to15% of GFIMSA’s outstanding share capital, including newly issued shares, forconsideration of Rand 4,139 million; 

•        on February 12, 2004, Beatrix, Kloof, Driefontein,GFLMS, Gold Fields and GFIMSA entered into Addendum Number 1 to theReorganization Agreement; 

•        on February 13, 2004 Gold Fields,GFIMSA, Mvela Gold, First Rand Bank Limited, Gold Fields Australia Pty Limitedand Gold Fields Guernsey entered into an addendum to the Mvela Loan Agreement,principally in order to add and clarify certain definitions; 

•        on February 13, 2004, Gold Fields, GFLMSand the Public Investment Commissioners, or the PIC, entered into a put optionagreement pursuant to which Gold Fields has effectively guaranteed a loan ofRand 150 million from the PIC to a special purpose entity establishedby 

 

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themezzanine lenders that funded, in part, the Mvela Loan; 

•        on November 17, 2004, Gold Fields,GFLMS, Mvela Gold, Mvela Resources and GFIMSA entered into an agreementamending the existing agreements relating to the Mvelaphanda Transaction,including, among others, the Subscription and Share Exchange Agreement, and theCovenants Agreement; and 

•        on November 17, 2004, Gold Fields,GFLMS, Mvela Gold, Gold Fields Australia, Gold Fields Guernsey, First Rand BankLimited and GFIMSA entered into a second addendum to the Mvela Loan Agreement. 

 

See “Operating and FinancialReview and Prospects — Overview — Mvelaphanda Transaction.”

 

***Acquisitionof Bolivar Gold Corp.***

 

On November 21, 2005,Gold Fields and Bolivar Gold Corp., or Bolivar, jointly announced that they hadentered into an agreement providing for Gold Fields to purchase, through acourt approved plan of arrangement, all of the securities of Bolivar for totalcash consideration of approximately $330 million. Bolivar securityholders willbe offered C$3.00 per Bolivar common share and C$1.90, C$1.25 and C$0.40 perBolivar warrant expiring on March 17, 2008, August 25, 2008 and December 22,2009, respectively. The consideration for the warrants is 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 will triggerthe 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.

 

Thetransaction is subject to the approval of 66 2/3% of the Bolivar shareholdersand warrant holders, of which Gold Fields currently holds approximately 15.5%of the common shares and 32% of the warrants expiring on August 25, 2008.Bolivar shareholders are expected to vote on the deal January 12, 2006.Definitive agreement documentation was executed on December 1, 2005, andthe SARB has also approved the agreement.

 

Eachof Gold Fields’ and Bolivar’s Boards of Directors have voted to approve thetransaction and it is expected that the transaction will close in January 2006,subject to certain conditions being satisfied.

 

Bolivaris listed on the Toronto Stock Exchange and operates the Choco 10 open pit goldmine in the El Callao gold district in the Bolivar State, Venezuela.

 

See“Operating and Financial Review and Prospects — Recent Developments.”

 

***Arctic Platinum Project***

 

On September 11, 2003,Gold Fields Limited exercised its pre-emptive right to acquire Outokumpu’s 49%stake in the Arctic Platinum Project in Finland, in which Gold Fields held a51% majority share.

 

The Arctic Platinumpartnership agreement between Gold Fields and Outokumpu contained the right ofpre-emption in favor of both parties in respect of any intended disposals byeither party of their interest in the Arctic Platinum project. Pursuant to apurchase agreement dated September 4, 2003, Gold Fields paid$31 million to Outokumpu consisting of $23 million in cash and GoldFields ordinary shares worth $8 million, determined based on the averageclosing price of the ordinary shares as quoted on the JSE for the three daysprior to September 11, 2003.

 

***Sale of Driefontein Mining Area to AngloGold***

 

On September 18, 2003,Gold Fields and AngloGold Limited, or AngloGold, announced that an agreementhas been reached on the sale of a portion of the Driefontein mining area toAngloGold for cash consideration of Rand 315 million. The transaction relatedto mining area is Block 1C11, which covers an area of 280,000 square meters andis located on the western boundary of the Driefontein mine. The mining area canbe accessed from the adjacent TauTona mining operation of AngloGold. The sale,which was conditional upon approval by the South African CompetitionCommission, was finalized in January 2004.

 

***Management and Other Compensatory Plans and Arrangements***

 

Gold Fields’ share plan, theGold Fields Limited 2005 Share Plan, was approved by the shareholders on November 17,2005 and is available to its executive officers and other employees. See “Directors,Senior Management and Employees — The Gold Fields Limited 2005 Share Plan.”

 

Gold Fields shareholdersalso approved on November 17, 2005 a new share plan available to itsnon-executive directors. See “Directors, Senior Management and Employees — TheGold Fields Limited 2005 Non-Executive Director Share Plan.”

 

Gold Fields’ share optionscheme, the GF Management Incentive Scheme, was adopted on November 10,1999 and is available to its executive officers and other employees. See “Directors,Senior Management and Employees — The GF Management Incentive Scheme.”

 

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Gold Fields also has a shareoption plan available to its non-executive directors. See “Directors, SeniorManagement and Employees — The GF Non-Executive Director Share Plan.”

 

Gold Fields also has aprofit sharing plan available to its exploration employees that was adopted on May 25,1999 and amended by the Compensation Committee on August 22, 2000. See “Directors,Senior Management and Employees — The Exploration Incentive Plan.”

 

Ian D. Cockerill, GoldFields’ Chief Executive Officer and an executive director of Gold Fields, isparty to two employment agreements: one with Gold Fields Guernsey and the otherwith GFL Mining Services Ltd., or GFLMSL. See “Directors, Senior Management andEmployees — Directors’ Terms of Employment.”

 

Nicholas J. Holland, GoldFields’ Chief Financial Officer and an executive director of Gold Fields, isparty to two employment agreements: one with Gold Fields Guernsey and the otherwith GFLMSL. See “Directors, Senior Management and Employees — Directors’ Termsof Employment.”

 

**DepositAgreement**

 

Gold Fields has an AmericanDepositary Receipt facility. In connection with this facility, Gold Fields isparty to a Deposit Agreement, dated as of February 2, 1998, as amended andrestated as of May 21, 2002 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 nototherwise defined will have the meanings set forth in the Deposit Agreement.Copies of the Deposit Agreement are available for inspection at the CorporateTrust Office of the Depositary, located at 101 Barclay Street, New York, NewYork 10286. The Depositary’s principal executive office is located at One WallStreet, New York, New York 10286.

 

**AmericanDepositary Receipts**

 

Each Gold Fields ADSrepresents ownership interests in one Gold Fields ordinary share and the rightsattributable to one Gold Fields ordinary share that Gold Fields will depositwith one of the custodians, which currently are Standard Bank of South Africa,ABSA Bank Limited, French Bank of South Africa, First National Bank of SouthAfrica and Nedcor Bank Limited. Each Gold Fields ADR also representssecurities, cash or other property deposited with The Bank of New York but notdistributed to holders of Gold Fields ADRs.

 

As The Bank of New York willactually be the holder of the underlying ordinary shares, Gold Fields will not treatyou as one of its shareholders. As a holder of ADSs, you will have ADR holderrights. A Deposit Agreement among Gold Fields, The Bank of New York and you, asa Gold Fields ADR holder, sets out the ADR holders’ rights and obligations ofThe Bank of New York, as depositary. New York state law governs the DepositAgreement and the ADRs 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 willyou receive 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 willconvert any cash dividend or distribution Gold Fields pays on the ordinaryshares, other than any dividend or distribution paid in U.S. dollars, into U.S.dollars. If that is not possible on a reasonable basis, or if any approval fromany government is needed and cannot be obtained, the Deposit Agreement allowsThe Bank of New York to distribute the foreign currency only to those ADSholders to whom it is possible to do so or to hold the foreign currency itcannot convert for the account of the ADS holders who have not been paid. Itwill not invest the foreign currency and it will not be liable for anyinterest.

 

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 andcents and will round any fractional amounts to the nearest whole cent. If theexchange rates fluctuate during a time when The Bank of New York cannot convertthe foreign currency, you may lose some or all of the value of thedistribution.

 

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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 new ordinaryshares.

 

Right to purchase additionalordinary shares:

 

If Gold Fields offersholders of securities any rights, including rights to subscribe for additionalordinary shares, The Bank of New York may take actions necessary to make theserights available to you. Gold Fields must first instruct The Bank of New Yorkto do so and furnish it with satisfactory evidence that it is legal to do so.If Gold Fields does not furnish this evidence and/or give these instructions,and The Bank of New York determines that it is practical to sell the rights,The Bank of New York may sell the rights and allocate the net proceeds toholders’ accounts. The Bank of New York may allow rights that are notdistributed or sold to lapse. In that case, 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 sendto you anything else Gold Fields distributes on deposited securities by anymeans The Bank of New York thinks is legal, fair and practical. If it cannotmake the distribution in that way, The Bank of New York may decide to sell whatGold Fields distributed—for example by public or private sale—and distributethe net proceeds, in the same way as it does with cash, or it may decide tohold what Gold Fields distributed, in which case the ADRs will also representthe newly distributed property.

 

The Bank of New York is notresponsible 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 doesthe Depositary 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 isresponsible for regulating currency exchange at that time. If required by TheBank of New York, you must in addition deliver an agreement transferring yourrights as a shareholder to receive dividends or other property. Upon payment ofits fees and of any taxes or charges, The Bank of New York will register the appropriatenumber of ADSs in the names you request and will deliver the ADRs at itsCorporate Trust Office to the persons you request.

 

*How do ADSholders cancel 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.

 

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***Record Dates***

 

Whenever any distribution ofcash or rights, change in the number of ordinary shares represented by ADSs ornotice of a meeting of holders of ordinary shares or ADSs is made, The Bank ofNew York will fix a record date for the determination of the owners entitled toreceive the benefits, rights or notice.

 

***Voting of Deposited Securities***

 

*How do youvote?*

 

If you are an ADS holder ona record date fixed by The Bank of New York, you may exercise the voting rightsof the same class of securities as the ordinary shares represented by yourADSs, but only if Gold Fields asks The Bank of New York to ask for yourinstructions. Otherwise, you won’t be able to exercise your right to voteunless you withdraw the ordinary shares.

 

However, you may not knowabout the meeting enough in advance to withdraw the ordinary shares. If GoldFields asks for your instructions, The Bank of New York will notify you of theupcoming meeting and arrange to deliver certain materials to you. The materialswill: (1) include all information included with the meeting notice sent byGold Fields to The Bank of New York, (2) explain how you may instruct TheBank of New York to vote the ordinary shares or other deposited securitiesunderlying your ADSs as you direct if you vote by mail or by proxy and (3) includea voting instruction card and any other information required under SouthAfrican law that Gold Fields and The Bank of New York will prepare. Forinstructions to be valid, The Bank of New York must receive them on or beforethe date specified in the instructions. The Bank of New York will try, to theextent practical, subject to applicable law and the provisions of the by-lawsof Gold Fields, to vote or have its agents vote the underlying shares as youinstruct. The Bank of New York will only vote, or attempt to vote, as youinstruct. However, if The Bank of New York does not receive your votinginstructions, it will give a proxy to vote your ordinary shares to a designatedrepresentative of Gold Fields, unless Gold Fields informs The Bank of New Yorkthat either: (1) it does not want the proxy issued, (2) substantialopposition exists or (3) the matter materially and adversely affects therights of holders of ordinary shares.

 

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 not voted as you requested.

 

***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***

 

The Bank of New York, asDepositary, will charge any party depositing or withdrawing ordinary shares orany party surrendering ADRs or to whom ADRs are issued:

 
| **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

•  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

•  each cancellation of a Gold Fields ADS,  including if the 

•  Deposit Agreement terminates

•  each cash distribution pursuant to the  Deposit Agreement

•  annual depository services transfer and  registration of ordinary shares on Gold Fields’ share register from your name  to the name The Bank of New York or its agent when you deposit or withdraw  ordinary |       | •  $5.00 or less per 100 Gold Fields ADSs or  portion thereof 

•        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

•  $5.00 or less per 100 Gold Fields ADSs or  portion thereof

•  not more than $0.02 per ADS (or portion  thereof)

•  not more than $0.02 per ADS (or partition  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

•  registration or transfer fees

•  expenses of The Bank of New York

•  expenses of The Bank of New York |       |

 

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| •  shares

•  conversion of foreign currency to U.S. dollars  cable, telex and facsimile transmission expenses, if expressly

•  provided in the Deposit Agreement 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 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

 

***Payment of Taxes***

 

You will be responsible forany 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 sells depositedsecurities, it will, if appropriate, reduce the number of Gold Fields ADSs heldby you to reflect the sale and pay to you any proceeds, or send to you anyproperty, remaining after it has paid the taxes.

 

***Reclassifications, Recapitalizations and Mergers***

 

If Gold Fields:

 

•        changes the par value of any of the GoldFields ordinary shares, 

•        reclassifies, splits or consolidates any ofthe Gold Fields ordinary shares, 

•        distributes securities on any of the GoldFields ordinary shares that are not distributed to you, or 

•        recapitalizes, reorganizes, merges,consolidates, sells its assets, or takes any similar action, then: 

 

the cash, ordinary shares orother 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 maythe Deposit Agreement 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 daysafter The Bank of New York notifies you of the amendment. At the time anamendment becomes effective, you are considered, by continuing to hold yourADSs, to agree to the amendment and to be bound by the agreement as amended.However, no amendment will impair your right to receive the depositedsecurities in exchange for your Gold Fields ADSs.

 

*How maythe Deposit Agreement be terminated?*

 

The Bank of New York willterminate the Deposit Agreement if Gold Fields asks it to do so, in which caseit must notify you at least 30 days before termination. The Bank of NewYork may also terminate the agreement after notifying you if The Bank of NewYork informs Gold Fields that it would like to resign and Gold Fields does notappoint a new depositary bank within 90 days.

 

If any Gold Fields ADSsremain 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 doanything else under the Deposit Agreement other than:

 

•        collect dividends and distributions on thedeposited securities; 

•        sell rights and other property offered toholders of deposited securities; and 

•        deliver ordinary shares and other depositedsecurities upon cancellation of Gold Fields ADSs. 

 

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.

 

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***Your Right to Receive the Ordinary Shares Underlying Your Gold FieldsADSs***

 

You have the right to cancelyour Gold Fields ADSs and withdraw the underlying ordinary shares at any timeexcept:

 

•        due to temporary delays caused by The Bank ofNew York or Gold Fields closing its transfer books, the transfer of ordinaryshares is blocked in connection with voting at a shareholders’ meeting, or GoldFields is paying dividends; 

•        when you or other ADR holders seeking towithdraw ordinary shares owe money to pay fees, taxes and similar charges; or 

•        when it is necessary to prohibit withdrawalsin order to comply with any laws or governmental regulations that apply to GoldFields ADSs or to the withdrawal of ordinary shares or other depositedsecurities. 

 

This right of withdrawal maynot be limited by any provision of the Deposit Agreement.

 

***Limitations on Obligations and Liability to Gold Fields ADS Holders***

 

The Deposit Agreement expresslylimits the obligations of Gold Fields and The Bank of New York. It also limitsthe liability of Gold Fields and The Bank of New York. Gold Fields and The Bankof New York:

 

•        are only obligated to take the actionsspecifically set forth in the Deposit Agreement without negligence or badfaith; 

•        are not liable if either of them is preventedor delayed by law, any provision of the Gold Fields by-laws or circumstancesbeyond their control from performing their obligations under the agreement; 

•        are not liable if either of them exercises,or fails to exercise, discretion permitted under the agreement; 

•        have no obligation to become involved in alawsuit or proceeding related to the ADSs or the Deposit Agreement on yourbehalf or on behalf of any other party unless they are indemnified to theirsatisfaction; and 

•        may rely upon any advice of or informationfrom any legal counsel, accountants, any person depositing ordinary shares, anyGold Fields ADS holder or any other person whom they believe in good faith iscompetent to give them that advice or information. 

 

In the Deposit Agreement,Gold Fields and The Bank of New York agree to indemnify each other underspecified circumstances.

 

***Requirements for Depositary Actions***

 

Before The Bank of New Yorkwill deliver or register the transfer of a Gold Fields ADS, make a distributionon a Gold Fields ADS, or permit withdrawal of ordinary shares, The Bank of NewYork may require:

 

•        payment of taxes, including stock transfertaxes or other governmental charges, and transfer or registration fees chargedby third parties for the transfer of any ordinary shares or other depositedsecurities, as well as the fees and expenses of The Bank of New York; 

•        production of satisfactory proof of theidentity of the person presenting ordinary shares for deposit or Gold FieldsADSs upon withdrawal, and of the genuineness of any signature; and 

•        compliance with regulations The Bank of NewYork may establish consistent with the Deposit Agreement, includingpresentation 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 certain circumstances,subject to the provisions of the Deposit Agreement, The Bank of New York maydeliver Gold Fields ADSs before deposit of the underlying ordinary shares. Thisis called a pre-release of Gold Fields ADSs. The Bank of New York may alsodeliver ordinary shares prior to the receipt and cancellation of pre-releasedGold Fields ADSs (even if those Gold Fields ADSs are cancelled before thepre-release transaction has been closed out). A pre-release is closed out assoon as the underlying ordinary shares are delivered to The Bank of New York.The Bank of New York may receive Gold Fields ADSs instead of the ordinaryshares to close out a pre-release. The Bank of New York may pre-release GoldFields ADSs only under the following conditions:

 

•        before or at the time of the pre-release, theperson to whom the pre-release is being made must represent to The Bank of NewYork in writing that it or its customer, as the case may be, owns the ordinaryshares or Gold Fields ADSs to be deposited; 

•        the pre-release must be fully collateralizedwith cash or collateral that The Bank of New York considers appropriate; and 

•        The Bank of New York must be able to closeout the pre-release on not more than five business days’ notice. 

 

The pre-release will besubject to whatever indemnities and credit regulations that The Bank of NewYork considers appropriate. In addition, The Bank of New York will limit thenumber of Gold Fields ADSs that may be outstanding at any time as a result ofpre-release.

 

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***Governing Law***

 

The Deposit Agreement isgoverned by the law of the State of New York.

 

**SouthAfrican Exchange Control Limitations Affecting Security Holders**

 

*Thediscussion below relates to exchange controls in force as of the date of thisannual report. These controls are subject to change at any time without notice.It is not possible to predict whether existing exchange controls will beabolished, continued or amended by the South African government in the future.Investors are urged to consult a professional adviser as to the exchangecontrol implications of their particular investments.*

 

Acquisitions of shares orassets of South African companies by non-South African purchasers solely forcash consideration are not generally subject to review by the SARB pursuant toSouth African exchange control regulations. An acquisition of shares or assetsof a South African company by a non-South African purchaser may trigger therequirement for SARB review in other circumstances, such as if theconsideration for the acquisition is shares in a non-South African company orif the acquisition is financed by a loan from a South African lender. Denial ofSARB approval for an acquisition of shares or assets of a South African companymay result in the transaction not being completed. Subject to this limitation,there are no restrictions on equity investments in South African companies anda foreign investor may invest freely in the ordinary shares and ADSs of GoldFields.

 

There are no exchangecontrol restrictions on the remittance in full of dividends declared out oftrading profits to non-residents of the Common Monetary Area (comprising SouthAfrica, the Kingdoms of Lesotho and Swaziland and the Republic of Namibia) byGold Fields.

 

Under South African exchangecontrol regulations, the ordinary shares and ADSs of Gold Fields are freelytransferable outside South Africa between persons who are not residents of theCommon Monetary Area. Additionally, where ordinary shares are sold on the JSEon behalf of shareholders of Gold Fields who are not residents of the CommonMonetary Area, the proceeds of such sales will be freely exchangeable intoforeign 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 setsforth the material South African tax consequences of the purchase, ownershipand disposition of Gold Fields’ ordinary shares or ADSs under current SouthAfrican law. Changes in the law may alter the tax treatment of Gold Fields’ordinary shares or ADSs, possibly on a retroactive basis.

 

The following summary is nota 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 advisor aboutthe consequences of holding Gold Fields’ ordinary shares or ADSs, as applicable,in your particular situation.

 

*Withholdingtax on dividends*

 

Under South African law, nowithholding tax applies to, and no other tax is payable by, shareholders or ADSholders on dividends paid to non-resident shareholders or non-resident ADS holders.It should be noted that any future decision to re-impose a withholding tax ondividends 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 12.5% on the distribution ofearnings in the form of dividends on the company declaring the dividend. STC isa 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 taxand capital 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.

 

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*Stamp dutyand uncertificated securities tax*

 

South African stamp duty ispayable by the company on the issue of certificated shares at the rate of 0.25%of the higher of the consideration or the market value of the issue price.Uncertificated securities tax is payable in South Africa by the company inrespect of the issue of dematerialized shares at the rate of 0.25% of the parvalue of such shares plus any premium payable therefore. The provisions ofthe Revenue Laws Amendment Act, which have been passed byParliament and which are expected shortly to be promulgated, willabolish the South African stamp duty, with respect to both certificated anduncertificated shares, with effect from January 1, 2006.

 

On a subsequent registrationof transfer of shares, stamp duty is generally payable for off-markettransactions (that is, shares not sold through the JSE) and uncertificatedsecurities tax, or UST, is generally payable for on-market transactions (thatis, shares sold through the JSE in a dematerialized form), each at 0.25% of themarket value of the shares concerned. Stamp duty is payable in South Africaregardless of whether the transfer is executed within or outside South Africa.A transfer of a dematerialized share can only occur in South Africa.

 

There are certain exceptionsto the payment of stamp duty where, for example, the instrument of transfer isexecuted outside of South Africa and registration of transfer is effected inany branch register kept by the relevant company, subject to certain provisionsset forth in the South African Stamp Duties Act of 1968. Although technicallyunder the terms of current legislation it could be interpreted that transfersof ADSs between non-residents of South Africa could attract either stamp dutyor UST, such transfers have not to date attracted either stamp duty or UST.However, if securities are withdrawn from the deposit facility or the relevantdeposit agreement is terminated, either stamp duty or UST will be payable onthe subsequent transfer of the shares. An acquisition of shares from thedepositary in exchange for ADSs representing the relevant underlying securitieswill also render an investor liable to pay South African stamp duty or UST inSouth Africa at the same rate as stamp duty or UST on a subsequent transfer ofshares, upon the registration of the investor as the holder of the applicableshares on the company’s register.

 

***U.S. Federal Income Tax Considerations***

 

TO ENSURE COMPLIANCE WITHTREASURY DEPARTMENT CIRCULAR 230, HOLDERS ARE HEREBY NOTIFIED THAT: (A) ANYDISCUSSION OF FEDERAL TAX ISSUES IN THIS DOCUMENT IS NOT INTENDED OR WRITTEN TOBE RELIED UPON, AND CANNOT BE RELIED UPON, BY HOLDERS FOR THE PURPOSE OFAVOIDING PENALTIES THAT MAY BE IMPOSED ON HOLDERS UNDER THE INTERNALREVENUE CODE; (B) SUCH DISCUSSION IS INCLUDED HEREIN BY THE ISSUER INCONNECTION WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230)BY THE ISSUER OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) HOLDERSSHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENTTAX ADVISOR.

 

The following discussionsummarizes 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:

 

•        a citizen or resident of the United States; 

•        a corporation created or organized under thelaws of the United States or any State within the United States; or 

•        otherwise subject to U.S. federal income taxon a net income basis in respect of the ordinary shares or ADSs. 

 

The U.S. federal income taxtreatment of a partner in a partnership that holds ordinary shares will dependupon the status of the partner and the activities of the partnership. If youare a partnership, you should consult your tax adviser concerning the U.S.federal income tax consequences to your partners of the acquisition, ownershipand disposition of ordinary shares by you.

 

This summary only applies toholders that hold ordinary shares or ADSs as capital assets. This summary isbased upon:

 

•        the current tax laws of the United States,including the Internal Revenue Code of 1986; 

•        current U.S. Internal Revenue Servicepractice and applicable U.S. court decisions; and 

•        the income tax treaty between the UnitedStates and South Africa. 

 

This summary assumes thatthe obligations of the Depositary under the Deposit Agreement and any relatedagreements will be performed in accordance with their terms.

 

The following summary is ofa general nature and does not address all U.S. federal income tax consequencesthat may be relevant to you in light of your particular situation. For example,this summary does not apply to:

 

•        investors that own (directly or indirectly)10% or more of Gold Fields’ voting stock; 

•        financial institutions; 

•        insurance companies; 

•        investors liable for the alternative minimumtax; 

•        individual retirement accounts and othertax-deferred accounts; 

 

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•        tax-exempt organizations; 

•        dealers in securities or currencies; 

•        investors that hold ordinary shares or ADSsas part of straddles, hedging transactions or conversion transactions for U.S.federal income tax purposes; or 

•        investors whose functional currency is notthe U.S. dollar. 

 

This summary assumes thatGold Fields is not, and will not become, a passive foreign investment company,or PFIC, for U.S. federal income tax purposes, which it believes to be thecase. Gold Fields’ possible status as a PFIC must be determined annually andtherefore may be subject to change. However, based on Gold Fields’ currentassets and income, and assuming that Gold Fields will continue to operate itsbusiness in the same manner as it has in the past, management believes thatthere is not a material risk that Gold Fields will become a PFIC in the future.If Gold Fields were to be a PFIC in any year in which you held Gold Fields’ordinary shares or ADSs, materially adverse consequences would result for you.

 

**The summaryof U.S. federal income tax consequences set out below is for generalinformation only. You are urged to consult your tax advisers as to theparticular tax consequences to you of acquiring, owning and disposing of theordinary shares and ADSs, including the applicability and effect of state,local, foreign and other tax laws and possible changes in tax law.**

 

*U.S.Holders of ADSs*

 

For U.S. federal income taxpurposes, an owner of ADSs will be treated as the owner of the correspondingnumber of underlying ordinary shares held by the depositary for the ADSs, andreferences to ordinary shares in the following discussion refer also to ADSsrepresenting the ordinary shares.

 

*Taxationof Dividends*

 

Distributions paid out ofGold Fields’ current or accumulated earnings and profits (as determined forU.S. federal income tax purposes) will generally be taxable to you as foreignsource dividend income, and will not be eligible for the dividends receiveddeduction allowed to corporations. Distributions that exceed Gold Fields’current and accumulated earnings and profits will be treated as a non-taxablereturn of capital to the extent of your basis in the ordinary shares andthereafter as capital gain. However, we do not maintain calculations of ourearnings and profits in accordance with U.S. federal income tax accounting principles.You should therefore assume that any distribution by us with respect to theshares will constitute ordinary dividend income. You should consult your owntax advisors with respect to the appropriate U.S. federal income tax treatmentof any distribution received from us. For purposes of determining limitationson any foreign tax credits, dividends paid by Gold Fields will generallyconstitute “passive income.”

 

For taxable years that beginbefore 2009, dividends paid by Gold Fields will be taxable to shareholders thatare individuals at the special reduced rate normally applicable to capitalgains, provided that either Gold Fields qualifies for the benefits of theincome tax treaty between the United States and South Africa, or the ADSs areconsidered to be “readily tradable” on the NYSE.” You will be eligible for thisreduced rate only if you are an individual, and have held the ordinary sharesfor more than 60 days during the 121-day period beginning 60 daysbefore the ex-dividend date.

 

For U.S. federal income taxpurposes, the amount of any dividend paid in Rand will be included in income ina U.S. dollar amount calculated by reference to the exchange rate in effect onthe date the dividends are received by you or the depositary (in the case ofADSs). If you or the depositary, as the case may be, convert dividends receivedin Rand into U.S. dollars on the day they are received, you generally will notbe required to recognize foreign currency gain or loss in respect of thisdividend income.

 

*Taxationof a Sale or other Disposition*

 

Your tax basis in anordinary share will generally be its U.S. dollar cost. The U.S. dollar cost ofan ordinary share purchased with foreign currency will generally be the U.S.dollar value of the purchase price on the date of purchase or, in the case ofordinary shares traded on an established securities market, as defined in theapplicable Treasury Regulations, that are purchased by a cash basis taxpayer(or an accrual basis taxpayer that so elects), on the settlement date for thepurchase. Such an election by an accrual basis taxpayer must be appliedconsistently from year to year and cannot be revoked without the consent of theIRS.

 

Upon a sale or otherdisposition of ordinary shares or ADSs, other than an exchange of ADSs forordinary shares and vice versa, you will generally recognize capital gain orloss for U.S. federal income tax purposes equal to the difference between theamount realized and your adjusted tax basis in the ordinary shares or ADSs.This capital gain or loss will be long-term capital gain or loss if yourholding period in the ordinary shares or ADSs exceeds one year. However,regardless of your actual holding period, any loss may be treated as long-termcapital loss to the extent of any dividends you receive that qualify for thereduced rate described above under “Taxation of Dividends” and also exceed 10%of your basis in the ordinary shares. Any gain or loss will generally be U.S.source.

 

The amount realized on asale or other disposition of ordinary shares for an amount in foreign currencywill be the U.S. dollar value of this amount on the date of sale ordisposition. On the settlement date, you will recognize U.S. source foreigncurrency gain or loss (taxable as 

 

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ordinary income or loss)equal to the difference (if any) between the U.S. dollar value of the amountreceived based on the exchange rates in effect on the date of sale or otherdisposition and the settlement date. However, in the case of ordinary sharestraded on an established securities market that are sold by a cash basistaxpayer (or an accrual basis taxpayer that so elects), the amount realizedwill be based on the exchange rate in effect on the settlement date for thesale, and no exchange gain or loss will be recognized at that time.

 

Foreign currency received onthe sale or other disposition of an ordinary share will have a tax basis equalto its U.S. dollar value on the settlement date. Foreign currency that ispurchased will generally have a tax basis equal to the U.S. dollar value of theforeign currency on the date of purchase. Any gain or loss recognized on a saleor other disposition of a foreign currency (including its use to purchaseordinary shares or upon exchange for U.S. dollars) will be U.S. source ordinaryincome or loss.

 

Deposits and withdrawals ofordinary shares by U.S. holders in exchange for ADSs will not result in therealization of gain or loss for U.S. federal income tax purposes. Your taxbasis in withdrawn ordinary shares will be the same as your tax basis in theADSs surrendered, and your holding period for the ordinary shares will includethe holding period of the ADSs.

 

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 creditabletax for U.S. foreign tax credit purposes.

 

*BackupWithholding and 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 advisor as to yourqualification for an exemption from backup withholding and the procedure forobtaining an exemption.

 

**Documentson Display**

 

Gold Fields files annual andspecial reports and other information with the Securities and ExchangeCommission, or SEC. You may read and copy any reports or other information onfile at the SEC’s public reference room at the following location:

 

Public Reference Room 450 Fifth Street, N.WRoom 1024 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. Gold Fields’SEC filings may also be obtained electronically via the EDGAR system on thewebsite maintained by the SEC at http://www.sec.gov.

 

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**Item 11:****  ****Quantitative and Qualitative Disclosures About MarketRisk**

 

Gold Fields is exposed tomarket risks, including foreign currency, commodity price and interest raterisk associated with underlying assets, liabilities and anticipatedtransactions. Following periodic evaluation of these exposures, Gold Fields mayenter into derivative financial instruments to manage some of these exposures.As part of its strategy, however, Gold Fields does not generally hedge againstthe risk of changes in the price of gold. See “—Commodity PriceSensitivity—Commodity Hedging Policy.”

 

Gold Fields has policies inareas 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 spelling out counterparty credit-related limits. Thedealing exposure and limits are checked and controlled each day and reported tothe Chief Financial Officer.

 

**Foreign Currency Sensitivity**

** **

***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 HedgingExperience**

** **

Gold Fields currently holdsvarious hedging instruments to protect its exposure to adverse movements inforeign 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 Agnew ForwardSale 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 in 20 quarterlyinstallments beginning on March 31, 2002 and ending on December 31,2006. The fixed exchange rate for the Barclays contracts was $0.49577 perA$1.00, while the fixed exchange rate for the Citibank contracts was $0.49100per A$1.00. Gold Fields paid no fees or other consideration to enter into theforward sale arrangements with Barclays and Citibank.

 

***St. Ives and Agnew ZeroCost Collars***

 

In addition, Gold FieldsAustralia entered into two series of specialized option contracts called “zerocost collars,” each covering an aggregate amount of $125.0 million, withBarclays and Citibank. Each series of contracts provided for the exchange of$6.25 million for Australian dollars at fixed exchange rates in 20 quarterlyinstallments beginning on March 31, 2002 and ending on December 31,2006. Whether Gold Fields Australia or the counterparty (Barclays or Citibank)would have been obligated to sell U.S. dollars or Australian dollars,respectively, depended on the U.S. dollar/Australian dollar exchange rate ineffect during and at the end of each quarter.

 

Specifically, for theCitibank zero cost collars:

 

•        if the U.S. dollar/Australian dollar exchangerate was $0.51820 per A$1.00 or more at the end of the relevant quarter,Citibank was obligated to sell Australian dollars to Gold Fields Australia forU.S. dollars an exchange rate of $0.51820 per A$1.00; 

•        if the exchange rate at the end of therelevant quarter was less than $0.51820 per A$1.00 and greater than $0.42820per A$1.00, neither party was obligated to sell its respective currency; and

•        if the exchange rate was $0.42820 or less perA$1.00 at any time during the relevant quarter, Gold Fields Australia wasobligated to sell U.S. dollars to Citibank for Australian dollars at anexchange rate of $0.50320 per A$1.00 regardless of the exchange rate at the endof the relevant quarter. This was referred to as a “knock-in” feature.

 

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Forthe Barclays zero cost collars:

 

•        if the U.S. dollar/Australian dollar exchangerate was $0.51990 per A$1.00 or more at the end of the relevant quarter,Barclays was obligated to sell Australian dollars to Gold Fields Australia forU.S. dollars an exchange rate of $0.51990 per A$1.00;

•        if the exchange rate at the end of therelevant quarter was less than $0.51990 per A$1.00 and greater than $0.42950per A$1.00, neither party was obligated to sell its respective currency; and

•        if the exchange rate was $0.42950 per A$1.00or less at any time during the relevant quarter, Gold Fields Australia wasobligated to sell U.S. dollars to Barclays for Australian dollars at anexchange rate of $0.50490 per A$1.00 regardless of the exchange rate at the endof the relevant quarter.

 

Gold Fields paid no fees orother consideration to enter into the zero cost collar arrangements withBarclays and Citibank.

 

On January 7, 2004,Gold Fields Australia effectively closed out the Australian dollar/UnitedStates dollar currency forward sale contracts and zero cost dollars by enteringinto equal and opposite transactions. The close out of the outstanding openposition of $275.0 million was at an average spot rate of $0.7670 per A$1.00.These transactions locked in gross profit amounting to $115.7 million of which$102.8 million had already been accounted for through the end of December 2003via scheduled maturities of the instruments from the time they were firstpurchased in 2001. The remaining underlying cash receipts were deferred tomatch the maturity dates of the original transactions. In addition, to allowGold Fields to participate in further Australian dollar appreciation, a seriesof quarterly maturing Australian dollar/U.S. dollar call options were purchasedon January 7, 2004, in respect of an amount of $275.0 million, with valuedates and amounts matching those of the original instruments. These newAustralian dollar call options require Gold Fields to pay a premium of $8.3million. The payment dates are scheduled to match the maturity dates of the,and the amount of the premium is offset against the amounts due under, originalinstruments. The average strike price 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 theoriginal instruments were fixed in Australian dollars so as to take advantageof the weakened Australian dollar against the U.S. dollar at that time. Theoriginal value of the future cash flows was $107.4 million or A$140.0 million at$0.7670 per A$1.00, the rate at the time the call options were purchased. Thevalue fixed in Australian dollar amounts to A$147 million, based on a spot rateof $0.7158 per A$1.00.

 

The following table presentsthe cash flows as of June 30, 2005, net of the premium on the call optionsrelated to the profit resulting from the close out of the original Australiandollar/U.S. dollar instruments.

 

| **Payment value dates**    | ** ** | **Net Future Cash Flows** | ** ** |
|----------------------------|------------|---------------------------|------------|
| ** **                 | ** ** | **(US$’000)**        | ** ** | **(A$’000)** | ** ** |
| June 30, 2005(1)      |       | 9,885                     |       | 14,345 |   |
| September 30, 2005(1) |       | 9,560                     |       | 13,954 |   |
| December 30, 2005     |       | 9,275                     |       | 13,606 |   |
| March 31, 2006        |       | 9,020                     |       | 13,292 |   |
| June 30, 2006         |       | 8,720                     |       | 12,899 |   |
| September 29, 2006    |       | 8,460                     |       | 12,561 |   |
| December 29, 2006     |       | 8,245                     |       | 12,281 |   |
| **Total**                  |       | 63,165                    |       | 92,938 |   |

 

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Note:

(1)               The payments for June 30, 2005 and September 30,2005 were received on their due dates.

 

***South African RandInstruments***

 

During May and June 2003,Gold Fields entered into a number of forward purchase contracts with severalfinancial institutions providing for the purchase by Gold Fields of anaggregate amount of $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 inrespect of the Tarkwa mill and owner mining projects of $159 million. At thebeginning of fiscal 2004 this amount was increased to $50.0 million at anaverage exchange rate of R8.4264 per $1.00.

 

The forward purchase of$50.0 million matured on June 3, 2004. This amount was extended at anexchange rate of Rand 6.6368 per $1.00 to mature on December 3, 2004,resulting in a cash outflow $16.0 million. The $50.0 million matured on December 3,2004 resulting in a cash outflow of $4.1 million. The spot rate on this datewas R5.8215 per $1.00.

 

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. The $30.0million was further extended at a rate of R6.9402 per $1.00 to mature on December 5,2005 which resulted in a cash inflow of $3.8 million.  The $30.0 million forward cover was purchasedto cover any US dollar commitments payable from South Africa.

 

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Realized gains on financialinstruments are disclosed in detail under the Results of Operations section,under the sub heading “Realized gains on financial instruments.”

 

***Foreign Currency ContractPosition***

 

As of June 30, 2005,Gold Fields’ foreign currency contract position was as follows:

 
| ** **                                | ** ** | **2006** | ** ** | **2007** | ** ** | **TOTAL** | ** ** |
|-------------------------------------------|------------|----------|------------|----------|------------|-----------|------------|
| **A$/US$call options:**                   |       |     |       |     |       |      |       |
| Volume ($million)                         |       | 100.0    |       | 75.0     |       | 175.0     |       |
| $ per A$1.00 (1)                     |       | 0.7670   |       | 0.7670   |       | 0.7670    |       |
| **$ /R forward exchange contracts:** |       |     |       |     |       |      |       |
| Volume ($million)                         |       | 30.0     |       | —   |       | 30.0      |       |
| $ per R1.00                          |       | 0.1441   |       | —   |       | 0.1441    |       |

 

----

Note: 

(1)               Weightedaverage rate of all contracts in the relevant periods.

 

**Foreign Currency SensitivityAnalysis**

 

Gold Fields’ 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 costs ofthe South African operations are incurred principally in Rand. Depreciation ofthe Rand against the U.S. dollar reduces Gold Fields’ average costs when theyare translated into U.S. dollars, thereby increasing the operating margin ofthe South African operations. Conversely, appreciation of the Rand results inSouth African operating costs being translated into U.S. dollars at a higherRand/U.S. dollar exchange rate, resulting in lower operating margins. Theimpact on profitability of changes in the 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 30,2005 is set forth below.

 

***Australian DollarInstruments***

 
| ** **                                        | ** ** | **US$/A$ exchange rate as of June 30,  2005** | ** ** |
|---------------------------------------------------|------------|---------------------------------------------------------|------------|
| ** **                                        | ** ** | ** **                                              | ** ** | ** ** | ** ** | ** ** | ** ** | **(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)                |       | 0.5                                                     |       | 0.9 |   | 1.6 |   | 4.2 |   | 9.4 |   | 12.6 |   | 16.1 |   |

 

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Notes:

(1)               “+” and “—” designate the strengthening andweakening of the Australian dollar against the U.S. dollar.

(2)               Spot rate: $0.7684 = A$1.00

 
| ** **                                     | ** ** | **Weighted average U.S. dollar  interest rate as of June 30, 2005** | ** ** |
|------------------------------------------------|------------|--------------------------------------------------------------------------|------------|
| ** **                                     | ** ** | ** **                                                               | ** ** | ** ** | ** ** | ** ** | ** ** | **(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)             |       | 3.4                                                                      |       | 3.7 |   | 3.9 |   | 4.2 |   | 4.5 |   | 4.8 |   | 5.1 |   |

 

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Note:

(1)               Spot U.S. dollar interest rate: 3.48%.

 
| ** **                                           | ** ** | **Weighted average Australian  dollar interest rate as of June 30, 2005** | ** ** |
|------------------------------------------------------|------------|--------------------------------------------------------------------------------|------------|
| **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)                   |       | 5.1                                                                            |       | 4.8 |   | 4.5 |   | 4.2 |   | 3.9 |   | 3.7 |   | 3.4 |   |

 

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Note: 

(1)               Spot Australian dollar interest rate: 5.65%. 

 

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***South African RandInstruments***

 
| ** **                                        | ** ** | **US$/R (1) exchange rate as  of June 30, 2005** | ** ** |
|---------------------------------------------------|------------|------------------------------------------------------------|------------|
| ** **                                        | ** ** | ** **                                                 | ** ** | ** ** | ** ** | ** ** | ** ** | **(R)** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Sensitivity to US$/R (1) exchange  rates** |       | -10.0                                                      | %          | -7.5 | % | -5.0 | % | Spot | (2) | +5.0 | % | +7.5 | % | +10.0 | % |
| Mark-to-market Forwards ($million)                |       | 2.1                                                        |       | 1.5 |   | 0.8 |   | (0.6 | ) | (2.2 | ) | (3.0 | ) | (4.0 | ) |

 

----

Notes: 

(1)               “+” and “—” designate the strengthening andweakening of the Rand against the U.S. dollar. 

(2)               Spot rate: $0.1493 = R1.00 

 
| ** **                             | ** ** | **Weighted average Rand interest  rate as of June 30, 2005** | ** ** |
|----------------------------------------|------------|-------------------------------------------------------------------|------------|
| **Sensitivity to Rand interest rates** |       | -1.5                                                              | %          | -1.0 | % | -0.5 | % | Spot | (1) | +0.5 | % | +1.0 | % | +1.5 | % |
| Mark-to-market Forwards ($million)     |       | (0.8                                                              | )          | (0.8 | ) | (0.7 | ) | (0.6 | ) | (0.6 | ) | (0.5 | ) | (0.4 | ) |

 

----

Note: 

(1)               Spot Rand interest rate: 6.95% 

 
| ** **                                    | ** ** | **Weighted average U.S. dollar  interest rate as of June 30, 2005** | ** ** |
|-----------------------------------------------|------------|--------------------------------------------------------------------------|------------|
| **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)            |       | (0.4                                                                     | )          | (0.5 | ) | (0.6 | ) | (0.6 | ) | (0.7 | ) | (0.8 | ) | (0.8 | ) |

 

----

Note: 

(1)               Spot U.S. dollar interest rate: 3.48%. 

 

**Commodity Price Sensitivity**

 

***General***

 

*Gold*

 

The market price of gold hasa significant effect on the results of operations of Gold Fields, the abilityof Gold Fields to pay dividends and undertake capital expenditures, and themarket 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.

 

*Oil*

 

The market price of oil hasa significant effect on the results of the offshore operations of Gold Fields.The offshore operations consume large quantities of diesel in the running oftheir mining fleets. Oil prices have historically fluctuated widely and areaffected by numerous factors over which Gold Fields does not have any control.

 

***Commodity Price HedgingPolicy***

 

*Gold*

 

Generally, Gold Fields doesnot enter into forward sales, derivatives or other hedging arrangements toestablish a price in advance for future gold production. On an exceptionalbasis, Gold Fields may consider gold hedging arrangements in one or more of thefollowing circumstances:

 

•        to protect cash flows at times of significantexpenditure;

•        for specific debt servicing requirements; and

•        to safeguard the viability of higher costoperations.

 

See “Business—Strategy—HedgingStrategy.”

 

To the extent that it doesenter into commodity hedging arrangements, Gold Fields seeks to use differentcounterparty banks consisting of local and international banks to spread risk.None of the counter parties are affiliated or related parties of Gold Fields.

 

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*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 HedgingExperience***

 

*Oil*

 

On June 8, 2005 GoldFields Ghana Limited and Abosso Gold Fields Limited, purchased an Asian-styleIPE Gasoil call option for one year (June 8, 2005 – May 31, 2006) ata strike of US$0.45 per litre for a total of 51.6 million litres, of which twothirds is for Gold Fields Ghana Limited and one third is for Abosso Gold FieldsLimited. The call option resulted in a premium of $1.16 million, paid upfront,at a structure price of $0.46 per litre.

 

***Commodity Price ContractPosition***

 

*Gold*

 

As of June 30, 2005,Gold fields did not have any gold price hedging contracts outstanding.

 

*Oil*

 

As of June 30, 2005Gold Fields oil contract position was as follows:

 
| **International Petroleum Exchange (IPE) Gasoil options** | ** ** | **2006** | ** ** | **TOTAL** | ** ** |
|-----------------------------------------------------------|------------|----------|------------|-----------|------------|
| Amount (‘000s liters)                                |       | 51,600   |       | 51,600    |       |
| Strike price (US$/liter)                                  |       | 0.4500   |       | 0.4500    |       |

 

The mark-to-market value ofall transactions making up the position above was a gain $1.93 million. Thevalue was based on an IPE Gasoil price $0.4498 per liter and on prevailinginterest rates and volatilities at the time.

 

***Commodity PriceSensitivity***

 

Gold Fields’ offshoreoperations in Ghana consume large quantities of diesel for the running of itsmining fleet. The cost of diesel is directly related to the oil price and anymovement in the oil price will have an impact on the cost of diesel andtherefore the cost of running the mining fleet. An increase in the oil pricewill increase the cost of diesel, which in turn increase the mining fleetrunning costs, thereby reducing operation margins. Similarly, a decrease in theoil price will decrease the cost of diesel, which in turn decreases the miningfleet running costs, thereby increasing the operating margins.

 

***Commodity PriceSensitivity Analysis***

 

*Gasoil call option*

 

| ** **                                  | ** ** | **IPE Gasoil spot price as at June 30,  2005** | ** ** |
|---------------------------------------------|------------|-----------------------------------------------------|------------|
| **Sensitivity to IPE Gasoil spot price(1)** |       | -10.0                                               | %          | -7.5 | % | -5.0 | % | Spot |   | +5.0 | % | +7.5 | % | +10.0 | % |
| Mark-to-market Option ($million)            |       | 1.1                                                 |       | 1.3 |   | 1.5 |   | 2.0 |   | 2.4 |   | 2.7 |   | 3.0 |   |

 

----

Note: 

(1)               Spot IPE Gasoil price: $0.4422 cents perliter.

 

**Interest Rate Sensitivity**

 

***General***

 

Gold Fields generally doesnot undertake any specific action to cover its exposure to interest rate risk,although it may do so in specific circumstances as in the case of theMvelaphanda transaction. As of June 30, 2005, Gold Fields’ long-termindebtedness amounted to $650.6 million.

 

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*Interest Rate Hedging Experience*

 

Gold Fields was party to aninterest risk management transaction. In terms of the Mvela loan, South African(Pty) Limited, or GFIMSA, pays Mvela Gold interest on $591.3 million (Rand4,139.0 million). See “Operating and Financial Review and Prospects -Liquidity and Capital Resources - Credit Facilities - Mvela Loan.”GFIMSA entered into two interest rate swaps, an amortizing and an accretingswap. The amortizing swap for $236.2 million and the accreting swap of $355.1million reflected the profile of the Mvela loan and were designated as a fairvalue hedge. The swaps were accounted for as a single swap. The fixed ratereceivable on these interest rate swaps was equal to the interest rate payableon the loan from Mvelaphanda Gold (Pty) Limited and the floating rate payablewas the three month JIBAR rate plus a margin of 1.025%. In terms of the swap,GFI Mining SA was exposed to the 3 month Jibar rate plus a margin of 1.025%.

 

The interest rate swap wasclosed out on June 30, 2005, with the loan reverting to the fixed interestrate mentioned above. Gold Fields realised mark-to-market gains on the swap of$36.2 million and interest rate credits of $14.8 million, giving a total gainof $51.0 million. Of the $36.2 million realized mark-to-market gain, $0.8million was accounted for in fiscal 2005 and the balance of $35.4 million to beaccounted for in fiscal 2006 to fiscal 2009. Of the $14.8 million interestcredits, $12.9 million was accounted for in fiscal 2005 and the balance of $1.9million was accounted for in fiscal 2004.

 

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**Item 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITYSECURITIES**

 

 Not applicable.

 

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# **Part II**

# ** **

**Item 13:DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

 

 Not applicable.

 

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**Item 14: MATERIAL MODIFICATIONS TO THE RIGHTS OFSECURITY HOLDERS AND USE OF PROCEEDS**

 

 Not applicable.

 

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**Item 15: CONTROLS AND PROCEDURES**

 

(a)               Gold Fields has carried out an evaluation,under the supervision and with the participation of management, including thechief executive officer and chief financial officer of Gold Fields, of theeffectiveness of the design and operation of Gold Fields’ disclosure controlsand procedures (as defined in Exchange Act Rule 13a-15(e)) as of the endof the period covered by this annual report. Based upon that evaluation, GoldFields’ chief executive officer and chief financial officer concluded that, asof June 30, 2005 Gold Fields’ disclosure controls and procedures wereeffective to ensure that information required to be disclosed by Gold Fields inreports that it files or submits under the Exchange Act is recorded, processed,summarized and reported within the time periods specified in Securities andExchange Commission rules and forms. 

(b)              Not applicable for this annual report, whichcovers a fiscal year ended prior to July 15, 2006. 

(c)               Not applicable for this annual report, whichcovers a fiscal year ended prior to July 15, 2006. 

(d)              There has been no change in Gold Fields’internal control over financial reporting that occurred during fiscal 2005 thathas materially affected, or is reasonably likely to materially affect, GoldFields’ internal control over financial reporting. 

 

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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 foreach member of the Audit Committee, see “Directors, Senior Management andEmployees — Non-executive Directors.”

 

157

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**Item 16B: CODE OF ETHICS**

 

Gold Fields has adopted a Company Code of Ethics, which applies to all directors and employees, the text of which can be accessed on Gold Fields’ website at www.goldfields.co.za.

 

158

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**Item 16C: PRINCIPAL ACCOUNTANT FEES AND SERVICES**

 

PricewaterhouseCoopers Inc.,or PwC, has served as Gold Fields’ principal accountant for the fiscal yearsended June 30, 2004 and 2005. Set forth below are the fees for audit andother services rendered by PwC for the fiscal years ended June 30, 2004and 2005.

 

| ** **         | ** ** | **Year ended  June 30, 2004** | ** ** | **Year ended  June 30, 2005** | ** ** |
|--------------------|------------|------------------------------------|------------|------------------------------------|------------|
| ** **         | ** ** | **(R millions)**                   | ** ** |
| Audit fees         |       | 5.0                                |       | 6.3                                |       |
| Audit-related fees |       | 1.7                                |       | 5.4                                |       |
| Tax fees           |       | 0.3                                |       | 0.1                                |       |
| All other fees     |       | 0.3                                |       | 0.1                                |       |
| Total              |       | 7.3                                |       | 11.9                               |       |

 

Audit fees include feesbilled for audit services rendered for Gold Fields’ annual consolidatedfinancial statements filed with regulatory organizations.

 

Audit-related fees relatemainly to advice in connection with the implementation of Section 404 ofthe Sarbanes-Oxley Act of 2002 and accounting assistance for the circular toshareholders for the proposed transaction with IAMGold Corporation which wasnot approved by the shareholders.

 

Tax fees include fees billedfor tax compliance, tax advice, tax planning and other tax related services.

 

All other fees consist offees for all other services not included in any of the other categories notedabove.

 

All of the above fees werepre-approved by the Audit Committee.

 

**AuditCommittee’s Policies and Procedures**

 

In accordance with theSecurities and Exchange Commission rules regarding auditor independence,the Audit Committee has established Policies and Procedures for Audit andNon-Audit Services Provided by Independent Auditor. The rules apply toGold Fields and its consolidated subsidiaries engaging any accounting firms foraudit services and the auditor who audits the accounts filed with theSecurities and Exchange Commission, or the SEC Auditor, for permissiblenon-audit services.

 

When engaging the SECAuditor for permissible non-audit services (audit-related services, tax services,and all other services), pre-approval is obtained prior to the commencement ofthe services.

 

159

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**Item 16D: EXEMPTIONS FROM THE LISTING STANDARDS FORAUDIT COMMITTEES**

 

Not applicable.

 

160

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**Item 16E: PURCHASES OF EQUITY SECURITIES BY THE ISSUERAND AFFILIATED PURCHASERS**

 

Gold Fields did not makepurchases of its equity securities during fiscal 2005.  In August 2005, Gold Fields purchased1,000,000 of its ordinary shares in the open market at a weighted average priceof Rand 74.89.  Those ordinary shareswere then cancelled on August 17, 2005.

 

161

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# **Part III**

# ** **

**Item 17: FINANCIAL STATEMENTS**

 

 Gold Fields has responded to Item 18 inlieu of responding to this item.

 

162

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**Item 18: FINANCIAL STATEMENTS**

 

The following financialstatements, together with the report of PricewaterhouseCoopers Inc. on thefinancial statements of Gold Fields Limited are filed as part of this annualreport.

 

**INDEX TO 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, 2005, 2004 and 2003                |       | F-2        |
| Consolidated Balance Sheets as of  June 30, 2005 and 2004                                              |       | F-3        |
| Consolidated Statements of  Shareholders’ Equity for the Years Ended June 30, 2005, 2004 and 2003 |       | F-4        |
| Consolidated Statements of  Cash Flows for the Years Ended June 30, 2005, 2004 and 2003                |       | F-6        |
| Consolidated Statements of  Comprehensive Income for the Years Ended June 30, 2005, 2004 and 2003      |       | F-7        |
| Notes to the Consolidated  Financial Statements                                                             |       | F-8        |
| **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        |

 

163

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**Item 19:EXHIBITS**

 

The following instruments and documents are included as Exhibits tothis annual report.

 
| **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 3.1)                                                                                                                                                                                                                                                              |
| 2.2(†)                    |       | Articles  of Association of Gold Fields (included in Exhibit 3.2)                                                                                                                                                                                                                                                                |
| 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 Securities Exchange South Africa 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                                                                          |
| 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 Commissioners, 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, FirstRand 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 Corp. Arrangement Agreement,  dated December 1, 2005                                                                                                                                                                                                                                         |
| 4.24                           |       | The Gold Fields Limited 2005 Non-Executive Director Share Plan,  adopted November 17, 2005                                                                                                                                                                                                                                            |
| 4.25                           |       | The Gold Fields Limited 2005 Share Plan, adopted November 17, 2005                                                                                                                                                                                                                                                                    |
| 8.1                            |       | Amended  list of subsidiaries of the registrant                                                                                                                                                                                                                                                                                       |
| 12.1                           |       | Certification  of Chief Executive Officer                                                                                                                                                                                                                                                                                             |

 

164

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| **No.**                    | ** ** | **Exhibit**                                                                                                                                                                                |
|----------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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.                   |

 

165

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**SIGNATURES**

 

The registrant hereby certifies that it meets all of the requirementsfor filing on Form 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: December 22, 2005        |

 

166

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**Report of the Independent Registered Public Accounting Firm**

 

**To the Board of Directors and Shareholders of GoldFields Limited**

 

We have audited the accompanying consolidated balance sheets of GoldFields Limited and its subsidiaries as of June 30, 2005 and 2004, and therelated consolidated statements of operations, comprehensive income, cash flowsand of changes in shareholders’ equity for each of the three years in theperiod ended June 30, 2005. These financial statements are theresponsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the PublicCompany Accounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to abovepresent fairly, in all material respects, the financial position of Gold FieldsLimited and its subsidiaries at June 30, 2005 and 2004 and the results oftheir operations and their cash flows for each of the three years in the periodended June 30, 2005, in conformity with accounting principles generallyaccepted in the United States of America.

 

As discussed in note 2(d) and note 2(n) to the consolidated financialstatements, the Company changed its method of accounting for mineral andsurface use rights on July 1, 2003 and its method of accounting for assetretirement obligations on July 1, 2002, respectively.

 

**PricewaterhouseCoopers Inc**

*Registered Accountants and Auditors*

*Chartered Accountants (SA)*

Johannesburg, Republic of South Africa

December 9, 2005

 

F-1

----

 

**Gold Fields Limited**

**Consolidated Statements of Operations**

**For the years ended June 30,**

**($ in millions unless otherwise noted)**

 
| ** **                                                                                                                                                    | ** ** | **2005**     | ** ** | **2004**     | ** ** | **2003**     | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                                                                                                                                    | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **REVENUES**                                                                                                                                                  |       |         |       |         |       |         |       |
| Product  sales                                                                                                                                                |       | 1,893.1      |       | 1,706.2      |       | 1,538.2      |       |
|                                                                                                                                                          |       |         |       |         |       |         |       |
| **COSTS  AND EXPENSES**                                                                                                                                       |       |         |       |         |       |         |       |
| Production  costs (exclusive of depreciation and amortization)                                                                                                |       | 1,500.6      |       | 1,355.2      |       | 1,015.0      |       |
| Depreciation  and amortization                                                                                                                                |       | 274.5        |       | 198.6        |       | 188.1        |       |
| Corporate  expenditure                                                                                                                                        |       | 22.5         |       | 20.3         |       | 16.6         |       |
| Employment  termination costs                                                                                                                                 |       | 13.7         |       | 10.5         |       | 3.8          |       |
| Exploration  expenditure                                                                                                                                      |       | 46.0         |       | 39.9         |       | 29.6         |       |
| Impairment  of assets                                                                                                                                         |       | 233.1        |       | 72.7         |       | 29.6         |       |
| Impairment  of critical spares                                                                                                                                |       | 2.8          |       | —       |       | —       |       |
| Decrease in  provision for post-retirement health care costs                                                                                                  |       | (4.2         | )          | (5.1         | )          | (5.0         | )          |
| Accretion  expense on environmental rehabilitation                                                                                                            |       | 11.5         |       | 8.4          |       | 5.3          |       |
| Share-based  compensation                                                                                                                                     |       | 2.1          |       | —       |       | —       |       |
| Harmony  hostile bid costs                                                                                                                                    |       | (50.8        | )          | —       |       | —       |       |
| IAMGold transaction  costs                                                                                                                                    |       | (9.3         | )          | —       |       | —       |       |
|                                                                                                                                                          |       | 2,162.7      |       | 1,700.5      |       | 1,283.0      |       |
| **OTHER  (EXPENSES)/INCOME**                                                                                                                                  |       |         |       |         |       |         |       |
| Interest and  dividends                                                                                                                                       |       | 29.2         |       | 19.4         |       | 21.3         |       |
| Finance  (expense)/income                                                                                                                                     |       | (54.9        | )          | (12.2        | )          | 4.2          |       |
| Unrealized  gain on financial instruments                                                                                                                     |       | 4.9          |       | 39.2         |       | 35.7         |       |
| Realized  gain/(loss) on financial instruments                                                                                                                |       | 2.1          |       | (8.7         | )          | 15.1         |       |
| Gain on  disposal of St. Helena                                                                                                                               |       | —       |       | —       |       | 13.4         |       |
| Profit on  disposal of listed investments                                                                                                                     |       | 8.1          |       | 13.9         |       | 57.2         |       |
| 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                                                                                                                                      |       | (5.2         | )          | 2.1          |       | 3.4          |       |
|                                                                                                                                                          |       | 16.0         |       | 77.2         |       | 150.3        |       |
| **(LOSS)/INCOME  BEFORE TAX, SHARE OF EQUITY INVESTEE’S (LOSSES)/PROFITS, MINORITY INTERESTS  AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLES** |       | (285.6       | )          | 82.9         |       | 405.5        |       |
| Income and  mining tax benefit/(expense)                                                                                                                      |       | 100.4        |       | (11.8        | )          | (133.8       | )          |
| **(LOSS)/INCOME  BEFORE SHARE OF EQUITY INVESTEE’S (LOSSES)/PROFITS, MINORITY INTERESTS AND  CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLES**      |       | (185.2       | )          | 71.1         |       | 271.7        |       |
| Share of  equity investee’s (losses)/profit                                                                                                              |       | (0.4         | )          | (0.4         | )          | 1.0          |       |
| Minority  interests                                                                                                                                           |       | (20.6        | )          | (21.8        | )          | (14.4        | )          |
| **(LOSS)/INCOME  BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLES**                                                                                |       | (206.2       | )          | 48.9         |       | 258.3        |       |
| Cumulative  effect of change in accounting principles, net of tax                                                                                             |       | —       |       | —       |       | (1.3         | )          |
| **NET  (LOSS)/INCOME**                                                                                                                                        |       | (206.2       | )          | 48.9         |       | 257.0        |       |
| **BASIC  (LOSS)/EARNINGS PER SHARE ($) BEFORE CUMULATIVE EFFECT OF CHANGE IN  ACCOUNTING PRINCIPLES**                                                    |       | (0.42        | )          | 0.10         |       | 0.55         |       |
| **DILUTED  (LOSS)/EARNINGS PER SHARE ($) BEFORE CUMULATIVE EFFECT OF CHANGES IN  ACCOUNTING PRINCIPLES**                                                 |       | (0.42        | )          | 0.10         |       | 0.54         |       |
| **BASIC  (LOSS)/EARNINGS PER SHARE ($)**                                                                                                                      |       | (0.42        | )          | 0.10         |       | 0.54         |       |
| **DILUTED  (LOSS)/EARNINGS PER SHARE ($)**                                                                                                                    |       | (0.42        | )          | 0.10         |       | 0.54         |       |
| **WEIGHTED  AVERAGE NUMBER OF SHARES USED IN THE COMPUTATION OF BASIC EARNINGS PER SHARE**                                                                    |       | 491,987,508  |       | 485,020,966  |       | 471,814,106  |       |
| **WEIGHTED  AVERAGE NUMBER OF SHARES USED IN THE COMPUTATION OF DILUTED EARNINGS PER  SHARE**                                                                 |       | 493,690,893  |       | 487,698,431  |       | 475,294,239  |       |
| **DIVIDEND  PER SHARE ($)**                                                                                                                                   |       | 0.11         |       | 0.19         |       | 0.39         |       |

 

The accompanying notes arean integral part of these consolidated financial statements

 

F-2

----

 

**Gold Fields Limited**

 

**Consolidated Balance Sheets**

**As of June 30,**

**($ in millions unless otherwise noted)**

 
| ** **                                                                                                                                                                 | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                                                                                                                                 | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **ASSETS**                                                                                                                                                                 |       |         |       |         |       |
| **CURRENT  ASSETS**                                                                                                                                                        |       |         |       |         |       |
| Cash and  cash equivalents                                                                                                                                                 |       | 503.7        |       | 656.3        |       |
| Current  portion of financial instruments                                                                                                                                  |       | 46.8         |       | 37.0         |       |
| Receivables                                                                                                                                                                |       | 119.9        |       | 116.4        |       |
| Inventories                                                                                                                                                                |       | 77.4         |       | 63.9         |       |
| Materials  contained in heap leach pads                                                                                                                                    |       | 55.1         |       | 42.5         |       |
|                                                                                                                                                                       |       |         |       |         |       |
| **Total  current assets**                                                                                                                                                  |       | 802.9        |       | 916.1        |       |
|                                                                                                                                                                       |       |         |       |         |       |
| **Property,  plant and equipment**                                                                                                                                         |       |         |       |         |       |
| Cost                                                                                                                                                                       |       | 4,570.5      |       | 4,518.8      |       |
| Accumulated  depreciation and amortization                                                                                                                                 |       | (2,016.4     | )          | (1,713.3     | )          |
| Property,  plant and equipment, net                                                                                                                                        |       | 2,554.1      |       | 2,805.5      |       |
| Non-current  portion of financial instruments                                                                                                                              |       | 32.4         |       | 70.3         |       |
| Non-current  investments                                                                                                                                                   |       | 203.5        |       | 179.8        |       |
|                                                                                                                                                                       |       |         |       |         |       |
| **TOTAL  ASSETS**                                                                                                                                                          |       | 3,592.9      |       | 3,971.7      |       |
|                                                                                                                                                                       |       |         |       |         |       |
| **LIABILITIES  AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES**                                                                                                         |       |         |       |         |       |
| Accounts  payable and provisions                                                                                                                                           |       | 274.5        |       | 290.6        |       |
| Income and  mining taxes payable                                                                                                                                           |       | 18.0         |       | 14.2         |       |
|                                                                                                                                                                       |       |         |       |         |       |
| **Total  current liabilities**                                                                                                                                             |       | 292.5        |       | 304.8        |       |
|                                                                                                                                                                       |       |         |       |         |       |
| Long-term  loans                                                                                                                                                           |       | 653.1        |       | 643.2        |       |
| Deferred  income and mining taxes                                                                                                                                          |       | 596.2        |       | 769.0        |       |
| Provision  for environmental rehabilitation                                                                                                                                |       | 134.6        |       | 116.0        |       |
| Provision  for post-retirement health care costs                                                                                                                           |       | 9.0          |       | 18.9         |       |
| **Total  liabilities**                                                                                                                                                     |       | 1,685.4      |       | 1,851.9      |       |
|                                                                                                                                                                       |       |         |       |         |       |
| **COMMITMENTS  AND CONTINGENCIES – see notes 19 and 20**                                                                                                              |       |         |       |         |       |
| Minority  interests’                                                                                                                                                  |       | 118.4        |       | 102.7        |       |
| **SHAREHOLDERS’  EQUITY**                                                                                                                                             |       |         |       |         |       |
| Share  capital – 1,000,000,000 (2004: 1,000,000,000) authorized ordinary shares of  50 South African cents each. Shares issued – 492 294 226 (2004: 491 492 520) |       | 43.7         |       | 43.6         |       |
| Additional  paid-in capital                                                                                                                                                |       | 1,797.9      |       | 1,792.3      |       |
| Retained  earnings                                                                                                                                                         |       | (49.1        | )          | 211.6        |       |
| Accumulated  other comprehensive loss                                                                                                                                      |       | (3.4         | )          | (30.4        | )          |
| **Total  shareholders’ equity**                                                                                                                                       |       | 1,789.1      |       | 2,017.1      |       |
|                                                                                                                                                                       |       |         |       |         |       |
| **TOTAL  LIABILITIES AND SHAREHOLDERS’ EQUITY**                                                                                                                       |       | 3,592.9      |       | 3,971.7      |       |

 

The accompanying notes are an integral part of these consolidatedfinancial statements

 

F-3

----

 

**Gold Fields Limited**

 

**Consolidated Statements of Shareholders’ Equity**

**For the years ended June 30,**

**($ in millions unless otherwise noted)**

 
| ** **                                        | ** ** | **Number of** | ** ** | ** **         | ** ** | ** **     | ** ** | ** **   | ** ** | **Accumulated**   | ** ** | ** **   | ** ** |
|---------------------------------------------------|------------|---------------|------------|--------------------|------------|----------------|------------|--------------|------------|-------------------|------------|--------------|------------|
| ** **                                        | ** ** | **ordinary**  | ** ** | ** **         | ** ** | **Additional** | ** ** | ** **   | ** ** | **other**         | ** ** | ** **   | ** ** |
| ** **                                        | ** ** | **shares**    | ** ** | **Share**          | ** ** | **paid-in**    | ** ** | **Retained** | ** ** | **comprehensive** | ** ** | ** **   | ** ** |
| ** **                                        | ** ** | **issued**    | ** ** | **capital**        | ** ** | **capital**    | ** ** | **earnings** | ** ** | **loss**          | ** ** | **Total**    | ** ** |
| ** **                                        | ** ** | ** **    | ** ** | **$ ‘m** | ** ** | **$’m**   | ** ** | **$’m** | ** ** | **$’m**      | ** ** | **$’m** | ** ** |
| **BALANCE  – JUNE 30, 2002**            |       | 470,522,224   |       | 42.1               |       | 1,560.8        |       | 182.6        |       | (558.6            | )          | 1,226.9      |       |
| Net income                                        |       | —        |       | —             |       | —         |       | 257.0        |       | —            |       | 257.0        |       |
| Dividends  declared                               |       | —        |       | —             |       | —         |       | (184.3       | )          | —            |       | (184.3       | )          |
|                                              |       |          |       |               |       |           |       |         |       |              |       |         |       |
| Exercise of  employee share options               |       | 1,842,648     |       | 0.1                |       | 4.4            |       | —       |       | —            |       | 4.5          |       |
| Mark-to-market  of listed investments             |       | —        |       | —             |       | —         |       | —       |       | 21.9              |       | 21.9         |       |
| Realized  loss on disposal of listed investments  |       | —        |       | —             |       | —         |       | —       |       | (25.3             | )          | (25.3        | )          |
| Foreign  exchange translation                     |       | —        |       | —             |       | —         |       | —       |       | 318.6             |       | 318.6        |       |
| **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        | )          |
| Exercise of  employee share options               |       | 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  loss 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        | )          |
| Stock  compensation cost                          |       | —        |       | —             |       | 2.1            |       | —       |       | —            |       | 2.1          |       |
| Exercise of  employee share options               |       | 801,706       |       | 0.1                |       | 3.5            |       | —       |       | —            |       | 3.6          |       |
| Write down  of investments                        |       | —        |       | —             |       | —         |       | —       |       | 7.7               |       | 7.7          |       |
| Mark-to-market  of listed investments             |       | —        |       | —             |       | —         |       | —       |       | 9.0               |       | 9.0          |       |
| Realized  gain 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      |       |

 

The accompanying notes are an integral part of these consolidatedfinancial statements

 

F-4

----

 

The following is areconciliation of the components of accumulated other comprehensive loss for theperiods presented.

 
| ** **                                       | ** ** | **Mark-to-**    | ** ** | ** **      | ** ** | **Accumulated**   | ** ** |
|--------------------------------------------------|------------|-----------------|------------|-----------------|------------|-------------------|------------|
| ** **                                       | ** ** | **market of**   | ** ** | **Foreign**     | ** ** | **other**         | ** ** |
| ** **                                       | ** ** | **listed**      | ** ** | **exchange**    | ** ** | **comprehensive** | ** ** |
| ** **                                       | ** ** | **investments** | ** ** | **translation** | ** ** | **loss**          | ** ** |
| ** **                                       | ** ** | **$’m**    | ** ** | **$’m**    | ** ** | **$’m**      | ** ** |
| **BALANCE – JUNE 30, 2002**            |       | 21.2            |       | (579.8          | )          | (558.6            | )          |
| Mark-to-market of listed investments             |       | 21.9            |       | —          |       | 21.9              |       |
| Realized loss on disposal of listed  investments |       | (25.3           | )          | —          |       | (25.3             | )          |
| Foreign exchange translation                     |       | —          |       | 318.6           |       | 318.6             |       |
| **BALANCE – JUNE 30, 2003**            |       | 17.8            |       | (261.2          | )          | (243.4            | )          |
| Mark-to-market of listed investments             |       | (5.1            | )          | —          |       | (5.1              | )          |
| Realized loss on disposal of listed  investments |       | (12.3           | )          | —          |       | (12.3             | )          |
| Foreign exchange translation                     |       | —          |       | 230.4           |       | 230.4             |       |
| **BALANCE – JUNE 30, 2004**            |       | 0.4             |       | (30.8           | )          | (30.4             | )          |
| Write down of investments                        |       | 7.7             |       | —          |       | 7.7               |       |
| Mark-to-market of listed investments             |       | 9.0             |       | —          |       | 9.0               |       |
| Realized gain on disposal of listed  investments |       | 1.5             |       | —          |       | 1.5               |       |
| Foreign exchange translation                     |       | —          |       | 8.8             |       | 8.8               |       |
| **BALANCE – JUNE 30, 2005**            |       | 18.6            |       | (22.0           | )          | (3.4              | )          |

 

The accompanying notes arean integral part of these consolidated financial statements.

 

F-5

----

 

**Gold Fields Limited**

**Consolidated Statements of Cash Flows**

**For the years ended June 30,**

**($ in millions unless otherwise noted)**

 
| ** **                                                             | ** ** | **2005**     | ** ** | **2004**     | ** ** | **2003**     | ** ** |
|------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                                             | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **CASH  FLOWS FROM OPERATIONS**                                        |       |         |       |         |       |         |       |
| Net  (loss)/income                                                     |       | (206.2       | )          | 48.9         |       | 257.0        |       |
| Reconciled  to net cash provided by operations:                        |       |         |       |         |       |         |       |
| Minority  interests                                                    |       | 20.6         |       | 21.8         |       | 14.4         |       |
| Income and  mining tax expense                                         |       | (100.4       | )          | 11.8         |       | 133.8        |       |
| Impairment  of assets                                                  |       | 233.1        |       | 72.7         |       | 29.6         |       |
| Profit on  sale of listed investments                                  |       | (8.1         | )          | (13.9        | )          | (57.2        | )          |
| Profit on  disposal of St. Helena                                      |       | —       |       | —       |       | (13.4        | )          |
| Depreciation  and amortization                                         |       | 274.5        |       | 198.6        |       | 188.1        |       |
| 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  disposal of exploration rights                              |       | (7.5         | )          | —       |       | —       |       |
| Exchange  rate difference                                              |       | —       |       | (35.5        | )          | (25.7        | )          |
| Stock  compensation                                                    |       | 2.1          |       | —       |       | —       |       |
| Unrealized  gains on loans                                             |       | —       |       | (3.6         | )          | (4.0         | )          |
| Unrealized  gains on financial instruments                             |       | (4.9         | )          | (39.2        | )          | (35.7        | )          |
| Accretion  expense on environmental rehabilitation                     |       | 11.5         |       | 8.4          |       | 5.3          |       |
| Decrease in  provision for post-retirement health care costs           |       | (4.2         | )          | (5.2         | )          | (5.0         | )          |
| Payment  against post-retirement health care provision                 |       | (5.3         | )          | (4.5         | )          | (25.7        | )          |
| Other                                                                  |       | (7.8         | )          | (4.7         | )          | 2.8          |       |
| Cash flow  from operations before taxation and working capital changes |       | 207.9        |       | 232.1        |       | 464.3        |       |
| Income and  mining taxes paid                                          |       | (38.4        | )          | (75.7        | )          | (73.1        | )          |
| Effect of  changes in operating working capital items:                 |       |         |       |         |       |         |       |
| Receivables                                                            |       | 30.7         |       | (25.6        | )          | 18.2         |       |
| Inventories  and heap leach pads                                       |       | (26.5        | )          | 10.7         |       | 6.0          |       |
| Accounts  payable and provisions                                       |       | 8.2          |       | 56.9         |       | (4.0         | )          |
| **NET CASH  PROVIDED BY OPERATIONS**                                   |       | 181.9        |       | 198.4        |       | 411.4        |       |
| **CASH  FLOWS FROM INVESTING ACTIVITIES**                              |       |         |       |         |       |         |       |
| Additions to  property, plant and equipment                            |       | (317.7       | )          | (377.9       | )          | (224.3       | )          |
| Proceeds on  disposal of property, plant and equipment                 |       | 10.2         |       | 56.8         |       | 1.8          |       |
| Proceeds on  sale of listed investments                                |       | 18.6         |       | 29.3         |       | 72.1         |       |
| Proceeds on  disposal of exploration rights                            |       | 7.5          |       | —       |       | —       |       |
| Proceeds on  disposal of St. Helena                                    |       | —       |       | —       |       | 11.9         |       |
| Acquisition  of subsidiaries                                           |       | —       |       | (23.0        | )          | —       |       |
| Purchase of  investments                                               |       | (30.4        | )          | (79.4        | )          | (7.0         | )          |
| Investment  in environmental trust fund                                |       | (6.5         | )          | (6.0         | )          | (5.1         | )          |
| **NET CASH  UTILIZED IN INVESTING ACTIVITIES**                         |       | (318.3       | )          | (400.2       | )          | (150.6       | )          |
| **CASH  FLOWS FROM FINANCING ACTIVITIES**                              |       |         |       |         |       |         |       |
| Long and  short-term loans raised                                      |       | 2.7          |       | 586.7        |       | —       |       |
| Long and  short-term loans repaid                                      |       | —       |       | (40.7        | )          | (140.4       | )          |
| Proceeds on  close out of interest rate swap                           |       | 36.2         |       | —       |       | —       |       |
| Increase/(decrease)  in minority funding                               |       | 17.9         |       | 9.1          |       | (9.8         | )          |
| Dividends  paid to Company shareholders                                |       | (54.5        | )          | (92.6        | )          | (184.3       | )          |
| Dividends  paid to minority shareholders                               |       | (17.3        | )          | —       |       | (5.8         | )          |
| Ordinary  shares issued                                                |       | 3.6          |       | 219.7        |       | 4.5          |       |
| **NET CASH  (UTILIZED IN)/PROVIDED BY FINANCING ACTIVITIES**           |       | (11.4        | )          | 682.2        |       | (335.8       | )          |
| **EFFECT  OF EXCHANGE RATE MOVEMENTS ON CASH AND CASH EQUIVALENTS**    |       | (4.8         | )          | 42.3         |       | 13.5         |       |
| **NET  (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS**              |       | (152.6       | )          | 522.7        |       | (61.5        | )          |
| **CASH AND  CASH EQUIVALENTS – JULY 1**                      |       | 656.3        |       | 133.6        |       | 195.1        |       |
| **CASH AND  CASH EQUIVALENTS – JUNE 30**                     |       | 503.7        |       | 656.3        |       | 133.6        |       |

 

The principal non-cashtransactions are the issue of shares as consideration for business acquisitionsand the mark-to-market of certain listed investments. See notes 3 and 11.

 

The accompanying notes are an integral part of these consolidatedfinancial statements

 

F-6

----

 

**Gold Fields Limited**

 

**Consolidated Statements of Comprehensive Income**

**For the years ended June 30,**

**($ in millions unless otherwise noted)**

 
| ** **                                                                     | ** ** | **2005**     | ** ** | **2004**     | ** ** | **2003**     | ** ** |
|--------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                                                     | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **(Loss)/income  before cumulative effect of change in accounting principles** |       | (206.2       | )          | 48.9         |       | 258.3        |       |
| Cumulative  effect of change in accounting principles, net of tax              |       | —       |       | —       |       | (1.3         | )          |
| **Net  (loss)/income**                                                         |       | (206.2       | )          | 48.9         |       | 257.0        |       |
| **Other  comprehensive income**                                                |       |         |       |         |       |         |       |
| Write down  of investments                                                     |       | 7.7          |       | —       |       | —       |       |
| Mark-to-market  adjustment of listed investments held                          |       | 9.0          |       | (5.1         | )          | 21.9         |       |
| Realized  gain/(loss) on disposal of listed investments                        |       | 1.5          |       | (12.3        | )          | (25.3        | )          |
| Foreign  currency translation adjustment                                       |       | 8.8          |       | 230.4        |       | 318.6        |       |
| **Other  comprehensive income**                                                |       | 27.0         |       | 213.0        |       | 315.2        |       |
| **Comprehensive  (loss)/income**                                               |       | (179.2       | )          | 261.9        |       | 572.2        |       |

 

The accompanying notes arean integral part of these consolidated financial statements

 

F-7

----

 

**Gold Fields Limited**

 

**Notes to the Consolidated Financial Statements**

**($ in millions unless otherwise noted)**

 

**1****                                        ****GENERAL**

 

GoldFields Limited (formerly Driefontein Consolidated Limited (“Driefontein”), the “Company”or the “Group”) was originally incorporated in South Africa and listed on theJSE Securities Exchange S.A. (“JSE”) during 1968 as East Driefontein GoldMining Company Limited. Following a merger with West Driefontein Gold MiningCompany Limited, 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 and Australia and sold in South Africa(primarily to the Rand Refinery) and internationally.

 

2                                          **SIGNIFICANT ACCOUNTINGPOLICIES**

 

(a)     **USE OF ESTIMATES:**The preparation of the consolidated financialstatements in conformity with United States generally accepted accountingprinciples (“US GAAP”) requires the Company’s management to make estimates andassumptions about current and future events that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities atthe date of the financial statements, and the reported amounts of revenues andexpenses during the reporting period. Future events and their effects cannot bedetermined with absolute certainty. Therefore, the determination of estimatesrequires the exercise of judgment based on various assumptions and otherfactors such as historical experience, current and expected economicconditions, and in some cases actuarial techniques. Actual results ultimatelymay differ from those estimates.

 

Themore significant areas requiring the use of management estimates andassumptions relate to mineral reserves that are the basis of future cash flowestimates and unit-of-production depreciation, depletion and amortization calculations;environmental, reclamation and closure obligations; estimates of recoverablegold and other materials in heap leach pads; asset impairments (includingimpairments of goodwill, long-lived assets, and investments); write-downs ofinventory to net realizable value; post employment, post retirement and otheremployee benefit liabilities; valuation allowances for deferred tax assets;reserves for contingencies and litigation; and the fair value and accountingtreatment of financial instruments.

 

Thefollowing are accounting policies used by the Company which, except asdescribed in note (2) (d) (iii) and note 2 (n) below, have beenconsistently applied for all periods presented:

 

(b)    **CONSOLIDATION**: The Group’s financial statements includethe 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 Company is the primarybeneficiary of a variable interest entity. If the determination is made thatthe Company is the primary beneficiary, then that entity is consolidated from thedate that the Company was deemed to have become the primary beneficiary. Theresults of subsidiaries acquired or disposed of are included in the Groupstatements from the effective dates of acquisition or excluded from suchstatements as from the effective dates of disposal. Investments in companies,which the Company does not control, but has the ability to exercise significantinfluence over their operating and financial policies, are accounted for by theequity method.

 

 Any excess between the purchase price and thefair value of the attributable net assets of subsidiaries and associates at thedate of acquisition is capitalized as goodwill and not amortized; however it issubject to an annual assessment for impairment.

 

 Inter—company transactions and balances areeliminated on consolidation.

 

F-8

----

 

(c)     (i) **FOREIGN CURRENCY 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 foreign entities are regarded asthose entities that are considered to be self-sustaining. The balance sheet andstatements of operations of foreign subsidiaries are translated on thefollowing basis:

 

Assetsand liabilities are translated at the prevailing exchange rate at year-end.Statement of operations items are translated at the average exchange rate forthe year. Exchange differences on translation are accounted for in shareholders’equity. These differences will be recognized in earnings upon realization ofthe underlying foreign entity.

 

(iii)**FUNCTIONAL CURRENCY:**Thefunctional currencies of the Group’s South African operations are the SouthAfrican Rand, Australian operations, the Australian dollar and the Ghanaianoperations, the U.S. dollar. The translation differences arising as a result ofconverting the South African Rand and the Australian dollar to U.S. dollars (reportingcurrency) using the current exchange rate method are included as a separatecomponent of shareholders’ equity.

 

(d)                                 **PROPERTY, PLANT ANDEQUIPMENT**

 

(i)        **MINING ASSETS:**Mining assets, including mine developmentcosts and mine plant facilities, are recorded at cost.

 

Oncean economically feasible orebody with proven and probable ore reserves has beenestablished, expenditure incurred to further develop the orebody, to furtherdefine mineralization in the orebody, and to establish or expand productive capacity,are capitalized until commercial levels of production are achieved, at whichtime the costs are amortized as set out below. Development of orebodiesincludes the development of shaft systems and waste rock removal. These costsare capitalized until the reef horizons are intersected and commercial levelsof production can be obtained on a sustainable basis. 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.

 

Borrowingcosts incurred in respect of assets requiring a substantial period of time toprepare for their intended future use are capitalized to the date on which theassets are substantially completed and ready for their intended use.

 

(ii) **LAND:**Land isshown at cost and is not depreciated.

 

(iii) **MINERAL INTERESTS:**Mineralinterests represent mineral and surface use rights for parcels of land bothowned and not owned by the Company. Mineral interests and other tangible assetsinclude acquired mineral use rights in production, development and explorationstage properties. The amount capitalized related to mineral interestsrepresents its fair value at the time it was acquired, either as an individualasset purchase or as part of a business combination.

 

*Productionstage*mineralinterests represents mineral interests in operating properties that containproven and probable reserves. *Developmentstage*mineral interests represent interests in properties underdevelopment that contain proven and probable reserves. *Exploration stage*mineral interestsrepresent interests in properties that are believed to potentially contain (i) *other mineralized material*such asinferred material within pits, measured, indicated and inferred material withinsufficient 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 comprised mainlyof 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 notsufficient to recover all identified and valued proven and probable reservesand /or undeveloped mineral interests.

 

F-9

----

 

OnApril 30, 2004 the Financial Accounting Standard Board (“FASB”) amendedStatements of Financial Accounting Standards (“SFAS”) No. 141, “Businesscombinations” (“SFAS” No. 141”) and SFAS No. 142, “Goodwill and otherIntangible Assets” (“SFAS No. 142”) to provide that certain mineral userights are considered tangible assets and that mineral use rights should beaccounted for based on their substance. The FASB Staff Position (“FSP”) iseffective for the first reporting period beginning after April 29, 2004,with early adoption permitted. As a result, the Company has adopted this FSPfrom July 1, 2003 and has reclassified all of its mineral use rights fromintangible assets to property, plant and equipment in its balance sheets forall periods presented and effective July 1, 2003, ceased amortization onexploration stage interests prior to the commencement of production.

 

(iv) **AMORTIZATION ANDDEPRECIATION OF MINING ASSETS:**Mining assets, mine development andevaluation costs, and mine plant facilities are amortized over the life of mineusing the units-of-production method, based on estimated above infrastructureproven and probable ore reserves. Proven and probable ore reserves reflectestimated quantities of economically recoverable reserves, which can be recoveredin future from known mineral deposits.

 

(v) **AMORTIZATION OF MINERALINTERESTS:**Mineral interests associated with production stagemineral interests are amortized over the life-of-mine using the units-of-productionmethod in order to match the amortization with the expected underlying futurecash flows. Mineral interests associated with development and exploration stagemineral interests are not amortized until such time as the underlying propertyis converted to the production stage.

 

(vi) **DEPRECIATION OF NON-MININGASSETS:**Other non-mining assets are recorded at cost and depreciatedon a straight-line basis over their expected useful lives as follows:

 

| Vehicles                |   | - 20.0 | % |
|-------------------------|--------|--------|---|
| Computers               |   | - 33.3 | % |
| Furniture and Equipment |   | - 10.0 | % |

 

(vii) **MINING EXPLORATION:**Expenditureon exploration activities incurred prior to the completion of a finalfeasibility study to establish proven and probable reserves is charged againstincome.

 

(viii) **IMPAIRMENT:**  The Group reviews and tests the carryingamounts of long-lived assets, which include development costs, when events orchanges in circumstances suggest that the carrying amount may not berecoverable. For impairment purposes, assets are grouped at the lowest levelfor which identifiable cash flows are largely independent of the cash flows ofother assets and liabilities. The lowest level at which such cash flows aregenerated are generally at an individual operating mine, even if the individualoperating mine is included in a larger mine complex.

 

If there are indications that an impairment may haveoccurred, the Group prepares estimates of expected future cash flows for eachgroup of assets. Expected future cash flows are based on a probability-weightedapproach applied to potential outcomes 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 assetsto fair value as a charge to earnings if expected future cash flows are lessthan the carrying amount. The Group estimates fair value by discounting theexpected future cash flows using a discount factor that reflects the risk-freerate of interest for a term consistent with the period of expected cash flows.

 

Management’s estimate offuture cash flows is subject to risk and uncertainties. It is thereforereasonably possible that changes could occur which may affect therecoverability of the Group’s mining assets.

 

F-10

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(ix)      **LEASES:**Operating leases are charged against incomeas incurred.

 

(e)                                  **DEFERRED TAXATION:**Deferred taxation is calculated on thecomprehensive basis using the balance sheet approach. Deferred tax liabilitiesand assets are recognized by applying expected tax rates to the temporarydifferences existing at each balance sheet date between the tax values andtheir carrying amounts. These temporary differences are expected to result intaxable or deductible amounts in determining taxable profits for future periodswhen the carrying amount of the asset is recovered or the liability is settled.The effect on deferred tax of any changes in tax rates is recognized in theincome statement during the period in which the change occurs.

 

Theprincipal temporary differences arise from depreciation on property, plant andequipment, provisions and tax losses carried forward. A valuation allowance isrecorded to reduce the carrying amounts of deferred tax assets if it is morelikely than not that such assets will not be realized.

 

(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.

 

Unrealizedlosses are included in the determination of net income or loss where it isdetermined that a decline, other than a temporary decline, in the value of theinvestment has occurred.

 

(g)                                 **MATERIALS CONTAINED IN HEAPLEACH PADS:**The recovery ofgold from certain oxide ores is best achieved through the heap leachingprocess. Under this method, ore is placed on leach pads where it is permeatedwith a chemical solution, which dissolves the gold contained in the ore. Theresulting “pregnant” solution is further processed in a leach plant where thegold in solution is recovered. For accounting purposes, value is added to leachpads based on current mining costs, including applicable depreciation andamortization relating to mining operations. Value is removed from the leach padas ounces are recovered in circuit at the leach plant based on the average costper recoverable ounce of gold on the leach pad.

 

Theengineering estimates of recoverable gold on the heap leach pads are calculatedfrom quantities of ore placed on the pads (measured tonnes added to the leachpads), the grade of ore placed on the leach pads (based on assay data) and arecovery percentage (based on the leach process and the ore type). In general,the leach pad production cycles project recoveries of approximately 50% to 70%of the placed recoverable ounces in the first year of leaching, declining eachyear thereafter until the leaching process is completed.

 

Althoughthe quantities of recoverable gold placed on the leach pads are reconciled bycomparing the grades of ore placed on the pads to the quantities of goldactually recovered (metallurgical balancing), the nature of the leachingprocess inherently limits the ability to precisely monitor inventory levels. Asa result, the metallurgical balancing process is constantly monitored andengineering estimates are refined based on actual results over time. Variationsbetween actual and estimated quantities resulting from changes in assumptionsand estimates that do not result in write-downs to net realizable value areaccounted for on a prospective basis. The ultimate recovery of gold from thepad will not be known until the leaching process is terminated.

 

Thecurrent portion of leach pad inventories is determined based on engineeringestimates of the quantities of gold at the balance sheet date that are expectedto be recovered during the next twelve months.

 

F-11

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(h)                                 **INVENTORIES**: Inventories are valued at the lower of costor net realizable value. The Company’s inventories comprise consumable stores,gold-in-process, gold bullion, ore stockpiles and mineral rights and areaccounted for as follows:

 

**Consumable stores:**Consumable stores are valued at average cost, after appropriateprovision for surplus and slow moving items.

 

**Gold in process:**Gold in-process inventories represent materials that are currently inthe process of being converted to a saleable product. Conversion processes varydepending on the nature of the ore and the specific mining operation, butinclude mill in-circuit, leach in-circuit, flotation and column cells, andcarbon in-pulp inventories. In-process material is measured based on assays ofthe material fed to process and the projected recoveries of the respectiveplants. In-process inventories are valued at the average cost of the materialfed to process attributable to the source material coming from the mine,stockpile or leach pad plus the in-process conversion costs, includingapplicable depreciation relating to the process facility, incurred to that pointin the process.

 

**Gold bullion:**Gold bullion inventories represent saleable gold ore or gold bullionand are valued at the average cost of the respective in-process inventoriesincurred prior to the refining process, plus refining costs.

 

**Stockpiles:**Stockpiles represent coarse ore that has been extracted from the minethat is available for further processing. Stockpiles are measured by estimatingthe number of tonnes (via truck counts and/or in-pit surveys of the ore beforestockpiling) added and removed from the stockpile, the number of containedounces (based on assay data) and the recovery percentage (based on the processfor which the ore is destined). Stockpile tonnages are verified by periodicsurveys. Stockpiles are valued based on mining costs incurred up to the pointof stockpiling the ore, including applicable depreciation and amortizationrelating to mining operations. Value is added to a stockpile based on thecurrent mining cost per tonnes plus applicable depreciation and amortizationand removed at the average cost per recoverable ounce of gold in the stockpile.

 

**Mineral rights:**Mineral rights not linked to any specific operation are valued at thelower of cost and net realizable value.

 

(i)                                     **FINANCIAL INSTRUMENTS:**Financial instruments carried on the balancesheet include 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.

 

UnderSFAS No. 133, all derivatives are recognized on the balance sheet at theirfair value, unless they meet the criteria for the normal purchases normal saleexemption. On the date a derivative contract is entered into, the Companydesignates the derivative as (1) a hedge of the fair value of a recognizedasset or liability (fair value hedge), (2) a hedge of a forecastedtransaction (cash flow hedge), or (3) a hedge of a net investment in aforeign entity. Certain derivative transactions, while providing effectiveeconomic hedges under the Company’s risk management policies, do not qualifyfor hedge accounting. Hedging activities are conducted in accordance withguidelines established by the Audit Committee which allow for the use ofvarious hedging instruments.

 

Changesin the fair value of a derivative that is highly effective, and that isdesignated and qualifies as a fair value hedge, are recorded in earnings, alongwith the change in the fair value of the hedged asset or liability that isattributable to the hedged risk.

 

Changesin the fair value of a derivative that is highly effective, and that isdesignated and qualifies as a cash flow hedge, are recognized directly inshareholders’ equity. Amounts deferred in shareholders’ equity are included inearnings in the same periods during which the hedged firm commitment orforecasted transaction affects earnings.

 

F-12

----

 

Recognitionof derivatives which meet the criteria for the normal purchases normal salesexception under SFAS No. 133 is deferred until settlement. Under thesecontracts, the Group must deliver a specified quantity of gold at a future dateat a specified price to the contracted counter-party.

 

Hedgesof net investment in foreign entities are accounted for similarly to cash flowhedges.

 

Changesin the fair value of derivatives that do not qualify for hedge accounting arerecognized in the statement of operations, under the caption entitled gains andlosses on financial instruments. The fair value recognized on the balance sheetis included under the caption financial instruments.

 

TheGroup formally documents all relationships between hedging instruments andhedged items, as well as its risk management objective and strategy forundertaking various hedge transactions. This process includes linkingderivatives 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.

 

(k)                                  **CASH AND CASH EQUIVALENTS:**Cash and cash equivalents comprise cash onhand, demand deposits and investments in money market instruments. These areall highly liquid investments with a maturity of three months or less at thedate of purchase.

 

Thecarrying amount of cash and cash equivalents is stated at cost whichapproximates fair value.

 

(l)                                     **TRADE RECEIVABLES:**Trade receivables are carried at anticipatedrealizable value. Estimates are made for doubtful debts based on a review ofall outstanding amounts at year-end. Irrecoverable amounts are written offduring the year in which they are identified.

 

(m)                               **PROVISIONS:**Provisions are recognized when information isavailable prior to the issuance of the financial statements which indicatesthat it is probable that an asset has been impaired or a liability had beenincurred at the date of the financial statements and the amount can bereasonably estimated.

 

(n)                                 **REHABILITATION COSTS:**SFAS No. 143, Accounting for assetretirement obligations (“SFAS No. 143”) was adopted by the company witheffect from July 1, 2002.

 

SFASNo. 143 applies to legal obligations associated with the retirement of along-lived asset that result from the acquisition, construction, developmentand/or the normal operation of a long-lived asset. Under SFAS No. 143 theCompany records the fair value of a liability for an asset retirementobligation in the period in which it is incurred. When the liability isinitially recorded, the Company correspondingly capitalizes the cost byincreasing the carrying value of the related long-lived asset. Over time, theliability is increased (accretion) to reflect an interest elementconsidered in its initial measurement at fair value, and the capitalized costis amortized over the useful life of the related asset. Upon settlement of theliability, the Company will record a gain or loss if the actual cost incurreddiffers from the liability recorded. The adoption of SFAS No. 143 resultedin the Company recording an increase in property, plant and equipment, net of$16.9 million; an increase in provision for environmental rehabilitationof $20.8 million; a decrease in minority interest of $2.7 million; adecrease in deferred tax liabilities of $5.3 million and a$1.3 million debit cumulative effect of a change in accounting principle,net of tax.

 

Followingthe adoption of SFAS No. 143, the total amount of recognized liabilitiesfor asset retirement obligations was $79.6 million. These liabilitiesmainly relate to the obligations to perform reclamation and remediationactivities to meet existing environmental laws and regulations that govern theCompany’s operations at the Company’s active mines.

 

Environmentalliabilities, other than rehabilitation costs which relate to liabilities fromspecific events, are expensed as incurred.

 

F-13

----

 

(o)                                 **ENVIRONMENTAL TRUST FUNDS:**Contributions are made to the Group’s trustfunds, created in accordance with statutory requirements, to fund the estimatedcost of pollution control, rehabilitation and mine closure at the end of thelife of the Group’s South African mines. Contributions are determined on thebasis of the estimated environmental obligation over the life of the mine.Income earned on monies paid to environmental trust funds is accounted for asinvestment income. The funds contributed to the trusts plus growth in the trustfunds are included under investments on the balance sheet.

 

(p)                                 **EMPLOYEE BENEFITS**

 

(i)  **PENSION AND PROVIDENTFUNDS:**The Group operates a defined benefit pension plan and definedcontribution retirement plan and contributes to a number of industry baseddefined contribution retirement plans. The retirement plans are funded bypayments from employees and the Company.

 

Theexpected costs of the defined benefit pension plan are assessed in accordancewith the advice of independent actuaries. The cost of experience adjustments orplanned amendments is expensed to operations over the expected averageremaining service lives of the relevant employees. Any shortfalls are fundedeither immediately or as increased employer contributions to ensure the ongoingsoundness of the fund.

 

Contributionsto defined contribution funds are expensed to operations as incurred.

 

Thesefunds are governed by the Pension Fund Act of 1956 (as amended).

 

(ii)     **POST-RETIREMENT HEALTH CARECOSTS:**Medical coverage isprovided through a number of schemes.

 

Post-retirementhealth care in respect of existing employees is recognized as an expense overthe remaining service lives of the relevant employees.

 

TheCompany has an obligation to provide medical benefits to certain of itspensioners and dependents of ex-employees. These liabilities are unfunded andhave been provided in full, calculated on an actuarial basis. A significantportion of the pensioners and dependents were recently bought out of thescheme.

 

Valuationof these obligations is carried out annually by independent actuaries usingappropriate mortality tables, long-term estimates of increases in medical costsand appropriate discount rates.

 

(iii) **SHARE-BASED COMPENSATIONPLANS:**The Company has elected to follow Accounting Policies BoardOpinion No. 25 “Accounting for Stock Issued to Employees” (APB No. 25”)and its related interpretations in accounting for its share option schemes.Under APB No. 25, because the exercise price of the Company’s andsubsidiary’s employee stock options equaled the market price of the underlyingshare on the date of the grant, no compensation expense was recognized in theCompany’s financial statements, other than on occasions where the terms of shareoption vesting schedules are modified or accelerated. In particular, during theyear ended June 30, 2005, as a result of the inability by participants toexercise their share options during the period of the attempted Harmony hostiletakeover bid, the Company extended the exercise period of allocation optionsfor certain employees whose options would otherwise have expired by June 25,2005. The Company accounted for the modification under the intrinsic valuemethod with a new measurement date and, since the option were fully vested onthe modification date, recorded the incremental compensation cost of $2.1million as an expense.

 

Pro forma informationregarding net income and earnings per share is required by SFAS No. 123 “Accountingfor Stock-Based Compensation”. This information is required to be determined asif the Company had accounted for its employee stock options granted subsequentto December 31, 1995 under the fair value method of that statement. Thefair value of the options granted during 2005, 2004 and 2003 reported below hasbeen estimated at the date of grant using a Black-Scholes option pricing modelwith the following weighted average assumptions:

 

| ** **               | ** ** | **2005**       | ** ** | **2004** | ** ** | **2003** | ** ** |
|--------------------------|------------|----------------|------------|----------|------------|----------|------------|
| Expected life (in years) |       | 3.0 – 6.0 |       | 6.0      |       | 6.0      |       |
|                     |       |           |       |     |       |     |       |
| Risk free interest rate  |       | 8.4            | %          | 8.4      | %          | 10.7     | %          |
| Volatility               |       | 35.0           | %          | 53.0     | %          | 54.5     | %          |
| Dividend yield           |       | 1.5            | %          | 2.4      | %          | 4.5      | %          |

 

F-14

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TheBlack-Scholes option valuation model was developed for use in estimating thefair value of traded options that have no vesting restrictions and are fullytransferable. In addition, option valuation models require the input of highlysubjective assumptions, including the expected stock price volatility. Becausethe Company’s options have characteristics significantly different from thoseof traded options, and because changes in the subjective input assumptions canmaterially affect the value estimate, in the opinion of management, theexisting models do not necessarily provide a reliable single measure of thefair value of its options. The weighted average estimated fair value ofemployee stock options granted during fiscal 2005, 2004 and 2003 under theemployee share option scheme was R25.66, R44.18 and R61.89 per 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**     | ** ** | **2003**     | ** ** |
|---------------------------------------------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                                                                                          | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| (Loss)/income  before cumulative effect of change in accounting principles as reported                              |       | (206.2       | )          | 48.9         |       | 258.3        |       |
| Add back:  Stock compensation expense under APB No. 25                                                         |       | 2.1          |       | —       |       | —       |       |
| Less: Stock  compensation expense under SFAS No. 123                                                           |       | (15.4        | )          | (10.8        | )          | (7.6         | )          |
| Pro forma  (loss)/income before cumulative effect of change in accounting principles                                |       | (219.5       | )          | 38.1         |       | 250.7        |       |
|                                                                                                                |       |         |       |         |       |         |       |
| Pro forma  basic (loss)/earnings per share before cumulative effect of change in  accounting principles ($)         |       | (0.45        | )          | 0.08         |       | 0.53         |       |
| Pro forma  fully diluted (loss)/earnings per share before cumulative effect of change in  accounting principles ($) |       | (0.45        | )          | 0.08         |       | 0.53         |       |
|                                                                                                                |       |         |       |         |       |         |       |
| Net  (loss)/income as reported                                                                                      |       | (206.2       | )          | 48.9         |       | 257.0        |       |
| Add back:  Stock compensation expense under APB No. 25                                                         |       | 2.1          |       | —       |       | —       |       |
| Less : Stock  compensation expense under SFAS No. 123                                                          |       | (15.4        | )          | (10.8        | )          | (7.6         | )          |
|                                                                                                                |       |         |       |         |       |         |       |
| Pro forma  net (loss)/income                                                                                        |       | (219.5       | )          | 38.1         |       | 249.4        |       |
|                                                                                                                |       |         |       |         |       |         |       |
| Pro forma  basic (loss)/earnings per share ($)                                                                      |       | (0.45        | )          | 0.08         |       | 0.53         |       |
| Pro forma fully  diluted (loss)/earnings per share ($)                                                              |       | (0.45        | )          | 0.08         |       | 0.53         |       |

 

Theimpact on pro forma (loss)/income before cumulative effect of change inaccounting principles, pro forma basic (loss)/earnings per share beforecumulative effect of change in accounting principles, pro forma fully diluted(loss)/earnings per share before cumulative effect of change in accountingprinciples, pro forma net (loss)/income, pro forma basic (loss)/earnings pershare and pro forma fully diluted (loss)/earnings per share in the table abovewhich shows the effect of recognizing share-based compensation expense usingthe fair value method rather than the intrinsic method, may not be indicativeof the effect in future years. The Company continues to grant share options tocertain employees. This policy may or may not continue.

 

(q)                                 **REVENUE RECOGNITION:**Revenue arising from gold and by-productsales is recognized when the risks and rewards of ownership and title pass tothe buyer under the terms of the applicable contract and the pricing is fixedand determinable. Sales revenue excludes value-added tax but includes the netprofit and losses arising from hedging transactions from matched gold salescontracts, which are designated as normal sales contracts. Revenue from silverand other by-products sales are credited to production costs as a by-productcredit

 

(r)                                    **DIVIDEND INCOME:**Dividends are recognized when the right toreceive payment is established.

 

(s)                                  **INTEREST INCOME:**Interest is recognized on a time proportionbasis taking account of the principal outstanding and the effective rate tomaturity on the accrual basis.

 

F-15

----

 

(t)                                    **DIVIDENDS DECLARED:**Dividends proposed and the related taxationthereon are recognized only when the dividends are declared. Dividends arepayable in South African Rand.

 

(u)                                 **SEGMENT REPORTING:**The Group is a gold mining company operatinggeographically in South Africa, Ghana and Australia. The business segmentscomprise geographical operations based on locations and operating units.

 

(v)                                 **(LOSS)/EARNINGS PER SHARE**is calculated based on the net income/(loss)divided by the weighted average number of common shares in issue during theyear. Diluted earnings per share is presented when the inclusion of potentialordinary shares has a dilutive effect on earnings per share.

 

(w)                               **COMPARATIVES:**The Company changedthe presentation of its income statement in the current year primarily toreflect only “Product sales” as a component of “Revenue”, and to reflect “Interestand dividends” and “Other income” as components of “Other (Expenses)/Income”.Therefore, where necessary,comparative figures have been adjusted to conform with changes in presentationin the current fiscal year.

 

(x)                                   **RECENT ACCOUNTINGPRONOUNCEMENTS:**

In March 2005, the FASB ratified EmergingIssues Task Force (“EITF”) Issue No. 04-03, “Mining Assets: Impairment andBusiness Combinations” (“EITF 04-03”). The EITF addressed the concern that anacquired mining asset may be subject to a day-two impairment if the valuebeyond proven and probable reserves (“VBPP”) and anticipated future marketprice increases are considered in the purchase price allocation butsubsequently excluded in cash flow analysis used in an impairment testperformed under FASB Statement No. 144, “Accounting for the Impairment andDisposal of Long-Lived Assets” (“FAS 144”). The Task Force reached a consensusthat an entity should include VBPP and the effects of anticipated fluctuationsin the market price of minerals in the value allocated to mining assets in apurchase price allocation, and similarly, include the cash flows associatedwith VBPP and anticipated fluctuations in the market price of gold in estimatesof future cash flows (both discounted and undiscounted) used for determining whethera mining asset is impaired under FAS 144. The Task Force noted in both casesthat estimates should be consistent with the estimates of a market participant(i.e. the entity should consider all available information including currentprices, historical averages and forward pricing curves).. The consensus reachedby the Task Force was effective for business combinations and asset impairmentsperformed in periods beginning after March 31, 2004. Accordingly, theGroup followed the consensus of the EITF in performing its impairment analysesat June 30, 2005.

 

In March 2005, the FASB ratified EITF Issue No. 04-06,“Accounting for Stripping Costs Incurred during Production in the MiningIndustry” (“EITF 04-06”). EITF 04-06 addresses the accounting for strippingcosts incurred during the production stage of a mine and refers to these costsas post-production stripping costs. EITF 04-06 requires that post-productionstripping costs be considered costs of the extracted minerals and recognized asa component of inventory to be recognized in costs applicable to sales in thesame period as the revenue from the sale of inventory. As a result,capitalization of post-production stripping costs is appropriate only to theextent product inventory exists at the end of a reporting period. The guidancein EITF 04-06 is effective for the first reporting period in fiscal yearsbeginning after December 15, 2005, with early adoption permitted. Theguidance in the EITF is consistent with the Group’s current accounting forstripping costs. As such, the Group does not expect the adoption of the EITF tohave a significant impact on its consolidated financial statements.

 

In December 2004, theFASB issued SFAS No. 123R, “Share-Based Payment”, which revised SFAS No. 123,“Accounting for Stock-Based Compensation” and superseded APB Opinion 25, “Accountingfor Stock Issued to Employees” and its related implementation guidance. SFAS No. 123Rrequires measurement and recording in the financial statements of the costs ofemployee services received in exchange for an award of equity instruments basedon the grant-date fair value of the award, recognized over the period duringwhich an employee is required to provide services in exchange for such award.The Group anticipates adopting the provisions of SFAS No. 123R on July 1,2005, using the modified prospective method. Accordingly, compensation expensewill be recognized for all newly granted awards and awards modified,repurchased, or cancelled after July 1, 2005. Compensation cost for theunvested portion of awards that are outstanding as of July 1, 2005 will berecognized rateably over the remaining vesting period. The compensation costfor the unvested portion of awards will be based on the fair value at date ofgrant as calculated for Gold Fields’ pro forma disclosure under SFAS No. 123.The effect on net (loss)/income and (loss)/earnings per share in the periodsfollowing adoption of SFAS No. 123R is expected to be consistent with GoldFields’ pro forma disclosure under SFAS No. 123, except that estimatedforfeitures will be considered in the calculation of compensation expense underSFAS No. 123R. Additionally, the actual effect on net income and earningsper share will vary depending upon the number and fair value of options grantedin future years compared to prior years.

 

F-16

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**3              ACQUISITIONAND DISPOSAL OF BUSINESSES**

 

(a)                                  St Helena Gold Mines Limited (“St Helena”)

On October 30, 2002, the Company disposed ofthe St. Helena gold mining operation to the ARMGold/Harmony Free Gold JointVenture Company (Proprietary) Limited (“Freegold”) for $11.9 million incash and a monthly royalty payment of 1% of net revenues from gold sales of theSt. Helena Gold Mining Operations, payable to the Company for a period of fouryears subsequent to the disposal of the St. Helena operations. The Companyrealized a gain of $13.4 million on disposal of the St. Helena operations.

 

(b)           Acquisitionof remaining 49% stake in ArcticPlatinum Project

The Company’s investment in the Arctic Platinum Project was achievedthrough an earn-in agreement with Outokumpu Mining Oy. The Arctic PlatinumProject is an exploration project for platinum group metals and as such allcontributions by the Company to the project to date have been classified asexploration expenditure and expensed as incurred. On September 11, 2003,the Company exercised its rights of first refusal to acquire the remaining 49%stake in the Arctic Platinum Project it did not already own for$31.7 million, consisting of $23 million in cash and Gold Fields ordinaryshares worth $8.7 million. These costs have been capitalized as part ofmineral interests within property, plant and equipment.

 

**4                IMPAIRMENTOF ASSETS**

 

| ** **                                  | ** ** | **2005**     | ** ** | **2004**     | ** ** | **2003**     | ** ** |
|---------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                  | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Agnew Mine                                  |       | —       |       | —       |       | 29.6         |       |
| 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         |       | 29.6         |       |

 

**Beatrix North and South sections**

Beatrix is a relatively low grade mine and thereforeis very sensitive to changes in its cost profile. Changes in the cost profileaffects the pay-limit, which in turn affects the quantum of reserves.

 

During fiscal 2005, there were cost increases atBeatrix which resulted in an increase in the pay-limit. Due to the increase inthe pay-limit, certain reserves at No. 2 shaft and Vlakpan included infiscal 2004 became uneconomical to mine and were therefore excluded from the2005 reserve calculation. In addition, due to the restructuring at No. 2shaft, certain sections were closed which resulted in a further decrease inreserves from fiscal 2004. The reduction in reserves in fiscal 2005 as a resultof these two factors was the main reason that led to recording the impairmentcharge of $211.1 million, which represents the amount by which the carryingamount of the asset group exceeded its estimated fair value. The fair value ofthe asset group was estimated using the method described in note 2 (d) (viii).

 

**Living Gold**

An impairment charge was incurred at Living Gold,the rose project at Driefontein. As Living Gold is not a gold asset, itsvaluation was based on its business plan using a long-term exchange rate ofR8.51 to the euro and a discounted cash flow valuation at a real discount rateof 10 per cent. This resulted in an impairment charge of $8.4 million.

 

**Driefontein 10 shaft, Kloof No 3Metallurgical plant and St Ives Old Mill**

Due to the closure of certain infrastructure in theGroup, 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 St Ives, the old mill was closed,resulting in an impairment charge of $9.8 million.

 

F-17

----

 

**Beatrix 4 West section**

During fiscal 2004,following a geological study at the Beatrix 4 West section and anassociated revision of the ore reserve, the latest life-of-mine plans indicatedthat future production of gold should be based on 2.9 million ounces as opposedto 6.9 million ounces as previously estimated. At this level of extraction andat a 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.

 

**Intangible asset - Biox technology**

During 2004, an asset impairment charge of$5.0 million was required to adjust the carrying value of the Bioxtechnology to its recoverable amount of $15.0 million.

 

**Mineral rights**

New regulations in South Africa will result inmining companies forfeiting certain mineral rights not likely to be mined orexplored. Accordingly, an asset impairment of $5.9 million was chargedagainst income.

 

**Agnew mine**

The allocation of the purchase price to the Agnewand St. Ives mines was based upon geological and other information available tothe Company at the purchase date. During fiscal 2003, the Company revised theAgnew life of mine plan based upon the latest reserves and mineralizedmaterial. The life of mine plan was revised because the results of the Agnewmine following the acquisition had been below those anticipated due to lowerrecovered gold content, and certain events which rendered certain mineralizedmaterial unexploitable. The revised mine plan did not support the originalallocation of the purchase price to the Agnew mine orebody, mining tenementsand undeveloped properties. For management reporting purposes, the Companyreallocated part of the initial purchase price from the Agnew mine orebody,mining tenements and undeveloped properties to the St. Ives mine orebody,mining tenements and undeveloped properties. US GAAP does not permit a companyto reallocate the purchase price more than a year beyond the acquisition date,when sufficient data was available to make the initial purchase priceallocation. Accordingly, an impairment write down of $29.6 million wasrecorded to reflect the Agnew mine assets at their fair value.

 

**5              FINANCEEXPENSE /(INCOME)**

 

| ** **                                    | ** ** | **2005**     | ** ** | **2004**     | ** ** | **2003**     | ** ** |
|-----------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                    | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Interest paid – Mvelaphanda loan         |       | 56.9         |       | 18.2         |       | —       |       |
| Interest paid – other                    |       | 0.7          |       | 9.0          |       | 4.8          |       |
| Realized gain on foreign debt, net of cash    |       | (2.7         | )          | (11.4        | )          | (5.0         | )          |
| Unrealized gain on foreign debt, net of  cash |       | —       |       | (3.6         | )          | (4.0         | )          |
|                                          |       | 54.9         |       | 12.2         |       | (4.2         | )          |

 

F-18

----

 

**6              INCOMEAND MINING TAX BENEFIT/(EXPENSE)**

 
| ** **                                     | ** ** | **2005**     | ** ** | **2004**     | ** ** | **2003**     | ** ** |
|------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                     | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| South Africa                                   |       | (15.2        | )          | (10.1        | )          | (64.3        | )          |
| Ghana                                          |       | (19.2        | )          | (12.7        | )          | (10.3        | )          |
| Australia                                      |       | (7.8         | )          | (7.1         | )          | (5.7         | )          |
|                                           |       |         |       |         |       |         |       |
| Current income and mining taxes                |       | (42.2        | )          | (29.9        | )          | (80.3        | )          |
| South Africa                                   |       | 127.9        |       | 53.9         |       | (34.6        | )          |
| Ghana                                          |       | (17.4        | )          | (26.8        | )          | (25.6        | )          |
| Australia                                      |       | 32.1         |       | (9.0         | )          | 6.7          |       |
|                                           |       |         |       |         |       |         |       |
| Deferred income and mining taxes               |       | 142.6        |       | 18.1         |       | (53.5        | )          |
|                                           |       |         |       |         |       |         |       |
| Total income and mining tax  benefit/(expense) |       | 100.4        |       | (11.8        | )          | (133.8       | )          |

 

The Company’s pre-tax (loss)/income before minority interests andcumulative effect of change in accounting principles comprise:

 
| ** **   | ** ** | **2005**     | ** ** | **2004**     | ** ** | **2003**     | ** ** |
|--------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **   | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| South Africa |       | (394.2       | )          | (84.1        | )          | 309.5        |       |
| Ghana        |       | 123.8        |       | 118.3        |       | 85.4         |       |
| Australia    |       | (15.6        | )          | 48.3         |       | 11.6         |       |
|         |       | (286.0       | )          | 82.5         |       | 406.5        |       |

 

South African mining tax on mining income is determined on a formulabasis which takes into account the profit and revenue from mining operationsduring the year. Non-mining income is taxed at a standard rate.

 

F-19

----

 

Deferred tax is provided at the estimated effective mining tax rate ontemporary differences. Major items causing the Group’s income tax provision todiffer from the South African maximum mining statutory rate of 45% (2004 and2003: 46%) were:

 
| ** **                                                                                                                                                                                                                | ** ** | **2005**     | ** ** | **2004**     | ** ** | **2003**     | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                                                                                                                                                                                                | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
|                                                                                                                                                                                                                      |       |         |       |         |       |         |       |
| Tax benefit/(expense)  on (loss)/income at South African maximum mining statutory rate                                                                                                                                    |       | 128.6        |       | (38.0        | )          | (187.0       | )          |
| Rate  adjustment to reflect estimated effective mining tax rate in South Africa of  40% (2004 and 2003: 40%) and tax rate in Ghana of 32.5% (2004 and 2003: 32.5%)  and tax rate in Australia of 30% (2004 and 2003: 30%) |       | (4.6         | )          | 17.6         |       | 1.0          |       |
| South  African mining tax formula rate adjustment                                                                                                                                                                         |       | 11.5         |       | 7.0          |       | 18.4         |       |
| Valuation  allowance raised against deferred tax assets                                                                                                                                                                   |       | —       |       | —       |       | (0.4         | )          |
| Non-taxable  income/additional deductions                                                                                                                                                                                 |       | (40.0        | )          | 15.1         |       | 30.6         |       |
| Valuation  allowance against deferred tax asset                                                                                                                                                                           |       | (1.5         | )          | —       |       | —       |       |
| Use of  assessed losses and unredeemed capital expenditure not previously recognized                                                                                                                                      |       | —       |       | —       |       | 13.7         |       |
| Prior year  adjustment                                                                                                                                                                                                    |       | —       |       | (1.0         | )          | —       |       |
| Ghanaian tax  rate adjustment                                                                                                                                                                                             |       | 8.4          |       | —       |       | —       |       |
| Australian  tax benefit from tax consolidations                                                                                                                                                                           |       | 26.8         |       | —       |       | —       |       |
| South  African capital gains tax                                                                                                                                                                                          |       | —       |       | (1.7         | )          | (2.1         | )          |
| Foreign  levies and royalties                                                                                                                                                                                             |       | (21.8        | )          | (19.8        | )          | (16.1        | )          |
| Other                                                                                                                                                                                                                     |       | (7.0         | )          | 9.0          |       | 8.1          |       |
| Income and  mining tax benefit/(expense)                                                                                                                                                                                  |       | 100.4        |       | (11.8        | )          | (133.8       | )          |
|                                                                                                                                                                                                                      |       |         |       |         |       |         |       |
| Deferred  income and mining tax liabilities and assets on the balance sheet of June 30,  2005 and 2004, relate to the following:                                                                                     |       |         |       |         |       |         |       |

 
| ** **                                                       | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                       | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **Deferred income and mining tax liabilities:**                  | ** ** | ** **   | ** ** | ** **   | ** ** |
| Mining assets                                                    |       | 822.1        |       | 968.4        |       |
| Financial instruments                                            |       | 35.0         |       | 30.0         |       |
| Investment in environmental trust fund                           |       | 23.2         |       | 21.0         |       |
| Other                                                            |       | 0.5          |       | 7.8          |       |
| Total  deferred income and mining tax liabilities                |       | 880.8        |       | 1,027.2      |       |
| **Deferred income and mining tax assets:**                       |       |         |       |         |       |
| Provisions, including rehabilitation  accruals)                  |       | 64.2         |       | 68.4         |       |
| Tax losses                                                       |       | 101.2        |       | 60.7         |       |
| Unredeemed capital expenditure                                   |       | 155.4        |       | 166.1        |       |
| Total  deferred income and mining tax assets                     |       | 320.8        |       | 295.2        |       |
| Valuation allowance for deferred tax assets                      |       | (36.2        | )          | (37.0        | )          |
|                                                             |       |         |       |         |       |
| Total  deferred income and mining tax assets                     |       | 284.6        |       | 258.2        |       |
| Net deferred  income and mining tax liabilities                  |       | 596.2        |       | 769.0        |       |
|                                                             |       |         |       |         |       |
| **Net deferred income and mining tax  liabilities comprise of:** |       |         |       |         |       |
| Current deferred income and mining tax  liabilities              |       | —       |       | —       |       |
| Non-current deferred income and mining tax  liabilities          |       | 596.2        |       | 769.0        |       |
| Net deferred income and mining tax  liabilities                  |       | 596.2        |       | 769.0        |       |

 

F-20

----

 

The classification ofdeferred income and mining tax liabilities or assets is based on the relatedliability or asset creating the deferred tax. Deferred taxes not related to aspecific liability or asset are classified based on the estimated period ofreversal.

 

The Company has establisheda valuation allowance for certain deferred tax assets which management believewill not be realized based on projections as of June 30, 2005 and 2004.The valuation allowance relates primarily to a full valuation allowance againstcertain foreign net deferred tax assets of $34.8 million (2004: $37.0million),  raised on the explorationcosts incurred in Orogen investments SA (Luxembourg) and $1.4 million(2004:$Nil million) raised on losses incurred at Living Gold (Pty) Limited.

 

As at June 30, 2005 and2004 the Group has unredeemed capital expenditure and tax loss carry forwardsavailable for deduction against future mining income at its South Africanmining operations as follows:

 

•                            unredeemed capital expenditure at GFI Miining South Africa (Pty)Limited of $337.1 million (2004: $313.9 million).This comprises $Nil (2004:$1.9 million) at the Driefontein operation, $62.4 million (2004: $37.0 million)at the Kloof operation and $274.7 million (2004: $275.0 million) at the Beatrixoperation.

 

•                            estimated and assessed tax losses at GFI Mining South Africa (Pty)Limited of $7.4 million (2004: $8.4 million). This comprises  $0.2 million (2004: $Nil million) at theKloof operation and $7.2 million (2002: $8.4 million) at the Beatrix operation.

 

These future deductions areutilizable against income generated by the individual tax entity concerned anddo not expire unless the tax entity ceases to commercially mine for a periodlonger than one year. Under South African mining tax ring-fencing legislation,each tax entity is treated separately and as such these deductions can only beutilized by the tax entities in which the deductions have been generated.

 

•                            estimated assessed losses at Gold Fields Shared Services (Pty) Limitedof $6.7 million (2004: $2.4 million).

 

The Group has estimatedcapital allowances to be offset against future income of $73.3 million (2004:$116.2 million) and $Nil million (2004: $8.4 million) at Gold Fields GhanaLimited and Abosso Goldfields Limited respectively. The estimated capitalallowances do not have an expiration date. In terms of current Ghanaiantaxation legislation, tax losses not utilized by Gold Fields Ghana Limited andAbosso Goldfields Limited are forfeited after 5 years. Gold Fields GhanaLimited and Abosso Goldfields Limited currently have no tax losses availablefor utilization against future profits.

 

The Group has tax lossesavailable of $120.2 million (2004: $121.8 million) at Orogen Investments SA(Luxembourg), which can only be used to offset future interest income generatedby Orogen Investments SA (Luxembourg). In terms of current Luxembourg taxationlegislation, losses incurred in accounting periods subsequent to December 31,1990, can be carried forward indefinitely. Losses incurred prior to this datecould only be carried forward for 5 years. All losses incurred by OrogenInvestments 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 gross up of $26.8 million.

 

The Group has estimatedcapital allowances to be offset against future income of $183.9 million (2004:$52.5 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.

 

F-21

----

 

**7              (LOSS)/EARNINGSPER SHARE**

 
| ** **                                                                                    | ** ** | **For the year ended June 30,  2005** | ** ** |
|-----------------------------------------------------------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                                                                    | ** ** | **Loss  Numerator**                        | ** ** | **Shares  Denominator** | ** ** | **Per-share  Amount** | ** ** |
| ** **                                                                                    | ** ** | **$’m**                               | ** ** | ** ** | ** ** | **cents** | ** ** |
| **Basic  loss per share before cumulative effect of change in accounting principle**          |       |                                       |       |   |   |   |   |
| 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 before cumulative effect of change in accounting  principle** |       |                                       |       |   |   |   |   |
| Effect of  dilutive securities                                                                |       |                                       |       | — |   |   |   |
| Loss  available to common stockholders                                                        |       | (206.2                                     | )          | 491,987,508 |   | (0.42 | ) |
| **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 securities                                                                |       |                                       |       | — |   |   |   |
| Loss  available to common stockholders                                                        |       | (206.2                                     | )          | 491,987,508 |   | (0.42 | ) |

 
| ** **                                                                                        | ** ** | **For the year ended June 30,  2004** | ** ** |
|---------------------------------------------------------------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                                                                        | ** ** | **Income  Numerator**                      | ** ** | **Shares  Denominator** | ** ** | **Per-share  Amount** | ** ** |
| ** **                                                                                        | ** ** | **$’m**                               | ** ** | ** ** | ** ** | **cents** | ** ** |
| **Basic  earnings per share before cumulative effect of change in accounting principle**          |       |                                       |       |   |   |   |   |
| 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 |   | 0.1010 |   |
| **Fully  diluted earnings per share before cumulative effect of change in accounting  principle** |       |                                       |       |   |   |   |   |
| Effect of dilutive  securities                                                                    |       |                                       |       | 2,677,465 |   |   |   |
| Income  available to common stockholders                                                          |       | 48.9                                       |       | 487,698,431 |   | 0.10 |   |
| **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 securities                                                                    |       |                                       |       | 2,677,465 |   |   |   |
| Income  available to common stockholders                                                          |       | 48.9                                       |       | 487,698,431 |   | 0.10 |   |

 

F-22

----

 
| ** **                                                                                         | ** ** | **For the year ended June 30,  2003** | ** ** |
|----------------------------------------------------------------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                                                                         | ** ** | **Income Numerator**                  | ** ** | **Shares**** Denominator** | ** ** | **Per-share Amount** | ** ** |
| ** **                                                                                         | ** ** | **$’m**                               | ** ** | ** ** | ** ** | **cents** | ** ** |
| **Basic  earnings per share before cumulative effect of change in accounting  principles**         |       |                                       |       |   |   |   |   |
| Shares  outstanding July 1, 2002                                                              |       |                                       |       | 470,522,224 |   |   |   |
| Weighted  average number of shares issued during the year                                          |       |                                       |       | 1,291,882 |   |   |   |
| Income  available to common stockholders                                                           |       | 258.3                                      |       | 471,814,106 |   | 0.55 |   |
| **Fully  diluted earnings per share before cumulative effect of change in accounting  principles** |       |                                       |       |   |   |   |   |
| Effect of  dilutive securities                                                                     |       |                                       |       | 3,480,133 |   |   |   |
| Income  available to common stockholders                                                           |       | 258.3                                      |       | 475,294,239 |   | 0.54 |   |
| **Basic  earnings per share**                                                                      |       |                                       |       |   |   |   |   |
| Shares  outstanding July 1, 2002                                                              |       |                                       |       | 470,522,224 |   |   |   |
| Weighted  average number of shares issued during the year                                          |       |                                       |       | 1,291,882 |   |   |   |
| Income  available to common stockholders                                                           |       | 257.0                                      |       | 471,814,106 |   | 0.54 |   |
| **Fully  diluted earnings per share**                                                              |       |                                       |       |   |   |   |   |
| Effect of  dilutive securities                                                                     |       |                                       |       | 3,480,133 |   |   |   |
| Income  available to common stockholders                                                           |       | 257.0                                      |       | 475,294,239 |   | 0.54 |   |

 

**8**                                         **RECEIVABLES**

 
| ** **                                                              | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|-------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                              | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Gold sale trade receivables                                             |       | 43.8         |       | 31.4         |       |
| Other trade receivables                                                 |       | 11.6         |       | 14.0         |       |
| Deposits                                                                |       | 2.0          |       | 2.0          |       |
| Value added tax                                                         |       | 18.0         |       | 36.4         |       |
| Interest receivable                                                     |       | 0.4          |       | 1.6          |       |
| Payroll receivables                                                     |       | 4.9          |       | 3.2          |       |
| Pre-paid expenses                                                       |       | 11.0         |       | 6.9          |       |
| Capitalized project acquisition costs to be  transferred to investments |       | 12.0         |       | —       |       |
| Rand Mutual Assurance refund                                            |       | 2.6          |       | —       |       |
| Financial instrument receivables                                        |       | 1.3          |       | —       |       |
| Debt issuance costs                                                     |       | 3.6          |       | 5.1          |       |
| Other                                                                   |       | 8.7          |       | 15.8         |       |
|                                                                    |       | 119.9        |       | 116.4        |       |

 

F-23

----

 

**9**                                         **INVENTORIES**

 
| ** **        | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|-------------------|------------|--------------|------------|--------------|------------|
| ** **        | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Ore stockpiles    |       | 10.5         |       | 26.0         |       |
| Gold-in-process   |       | 16.9         |       | 5.3          |       |
| Consumable stores |       | 49.3         |       | 32.0         |       |
| Mineral rights    |       | 0.7          |       | 0.6          |       |
|              |       | 77.4         |       | 63.9         |       |

 

**10**                                  **PROPERTY, PLANT ANDEQUIPMENT**

 
| ** **                                                           | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|----------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                           | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Mining properties, mine development costs  and mine plant facilities |       | 2,324.9      |       | 2,579.8      |       |
| Asset retirement cost                                                |       | 24.7         |       | 19.5         |       |
| Other non-mining assets                                              |       | 204.5        |       | 206.2        |       |
|                                                                 |       | 2,554.1      |       | 2,805.5      |       |

 

Includedin the cost of property, plant and equipment is cumulative capitalized interestrelating to the Tarkwa mine amounting to $1.7 million (2004:$1.7 million). No interest were capitalized during the fiscal  2005, 2004 and 2003.

 

Depreciationof property, plant and equipment amounted to $274.5 million in 2005 (2004:$198.6 million and 2003: $188.1 million).

 

**11          ****NON-CURRENT INVESTMENTS**

 
| ** **                                           | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                           | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Listed investments (a)                               |       | 108.1        |       | 93.4         |       |
| Unlisted investments (b)                             |       | 30.3         |       | 32.3         |       |
| Amounts contributed to environmental trust  fund (c) |       | 58.1         |       | 52.6         |       |
| Equity investees (d)                                 |       | —       |       | 0.4          |       |
| Other investments                                    |       | 7.0          |       | 1.1          |       |
|                                                 |       | 203.5        |       | 179.8        |       |

 

F-24

----

 

 

(a)                                  Listed investments mainly consist of4,212,137 shares in Western Areas Gold Mining Company valued at $3.02 per share(2004: 4,212,137 shares at $4.28 per share), 10,800,000 shares in Sino GoldLimited valued at $1.42 per share (2004: 10,800,000 shares at $1.61 per share),4,350,000 shares in Mvelaphanda Resources Limited valued at $2.28 per share(2004: 4 350,000 at $2.83 per share), 12,344,444 shares in Bolivar GoldCorporation valued at $2.11 per share (2004: 12,344,444 at $1.08 per share),7,628,571 shares in Comaplex Minerals Corporation valued at $2.00 per share(2004: Nil shares) and Nil shares in Zijin Mining Group Company Limited (2004:18,000,000 at $0.34 per share).

 

Thefair value of listed investments at June 30, 2005 of $108.1 million (2004:$93.4 million) comprises a cost of $87.4 million (2004: $81.9 million) and anet unrealized gain of $20.7 million (2004: $11.5 million). The net unrealizedgain comprises a gross unrealized gain of $34.1 million (2004: $23.9 million)partly offset by a gross unrealized loss of $13.4 million (2004: $12.4million). The gross unrealized loss of $13.4 million (2004: $12.4 million)comprises 17 equity investments in listed entities. Only 5 of the 17 equityinvestments have been in a continuous unrealized loss position for more than 12months. The unrealised loss relating to these 5 investments amounting to $7.7million have been accounted in the consolidated statement of operations.

 

(b)                                 Unlisted investments comprise investments invarious unlisted companies in South Africa for which a fair value is notreadily determinable. The directors of the Company perform independentvaluations of the investments on an annual basis to ensure that no other-thantemporary decrease in the value of the investments has occurred.   Unlisted investments mainly consist ofpreference shares in Mvelaphanda Resources Limited with a cost of $29.9 million(2004: $28.6 million).

 

(c)                            The environmentaltrust funds are irrevocable trusts under the Group’s control. The monies in thetrusts are invested primarily in interest bearing short-term investments.  The future realization of this asset isintended to fund environmental rehabilitation obligations of the Groups SouthAfrican mines. Whilst the asset is under the Company’s control, it is notavailable for the general purposes of the Company. All income from this assetis reinvested or spent to meet these obligations. These obligations aredescribed in note 15, “Provision for Environmental Rehabilitation”.

 

(d)                           Equity in investee comprises the following:

 
| ** **            | ** ** | ** **                               | ** ** | **Ownership %** | ** ** | **Market value** | ** ** |
|-----------------------|------------|------------------------------------------|------------|-----------------|------------|------------------|------------|
| **Investments**       | ** ** | **Description of business**              | ** ** | **2005**        | ** ** | **2004**         | ** ** | **2005** | ** ** | **2004** | ** ** | **$’m** | ** ** |
| ** **            | ** ** | ** **                               | ** ** | ** **      | ** ** | ** **       | ** ** | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Rand Refinery Limited |       | Refining of gold bullion and by-products |       | 33.1            |       | 33.1             |       | — |   | — |   | — |   |

 

Thecarrying value of the equity investment in Rand Refinery Limited has beenreduced to nil because Gold Fields’ share of the losses exceeds its carryingvalue in Rand Refinery. Gold Fields obligation to make good its share of thelosses in the investee is limited to the carrying value of the investment.

 

RandRefinery Limited (“Rand Refinery”) acts as a sale agent on behalf of theCompany’s African operations. The market value of the Company’s investment inRand Refinery is not readily determinable. During the years ended June 30,2005, 2004 and 2003, the Company received dividends from Rand Refinery of$Nil million, $0.8 million and $1.9 million, respectively. At June 30,2005 an amount of $35.1 million was owing from Rand Refinery (2004: $25.2million).

 

F-25

----

 

**12****                                  ACCOUNTSPAYABLE AND PROVISIONS**

 
| ** **                               | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                               | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Trade payables                           |       | 86.5         |       | 82.1         |       |
| Accruals                                 |       | 82.0         |       | 76.9         |       |
| Payroll and other compensation           |       | 22.2         |       | 26.8         |       |
| Leave pay accrual                        |       | 39.0         |       | 38.5         |       |
| Financial instruments payable            |       | 6.3          |       | 25.4         |       |
| Net interest payable on Mvelaphanda loan |       | 32.6         |       | 17.2         |       |
| Foreign levies payable                   |       | 0.2          |       | 3.3          |       |
| Other                                    |       | 6.6          |       | 20.4         |       |
|                                     |       | 275.4        |       | 290.6        |       |

 

**13          ****LONG—TERM LOANS**

 
| ** **                                  | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|---------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                  | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **Secured**                                 | ** ** | ** **   | ** ** | ** **   | ** ** |
| Mvelaphanda loan agreement (a)              |       | 650.6        |       | 643.2        |       |
| Unsecured                                   |       |         |       |         |       |
| Industrial Development Corporation loan (b) |       | 2.5          |       | —       |       |
| Total long-term loans                       |       | 653.1        |       | 643.2        |       |

 

(a)           **Mvelaphanda loan agreement**

OnMarch 17, 2004, Mvelaphanda Gold (Proprietary) Limited, a wholly ownedsubsidiary of Mvelaphanda Resources Limited, advanced an amount of $591.3million to GFI Mining South Africa (Pty) Limited (“GFIMSA”), (the “Mvela Loan”).The loan bears interest at a fixed rate of 10.57% nominal annual compoundedsemi-annually and is guaranteed by Gold Fields, Gold Fields Australia and GoldFields Guernsey. Interest is payable semi-annually and the loan amount isrepayable 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.

 

Onthe date the loan is repaid, Mvelaphanda Gold (Proprietary) Limited isobligated to use the entire proceeds of the loan repayment to subscribe for newshares in GFIMSA such that after the subscription it will own 15% of theenlarged equity of GFIMSA.

 

In addition, starting one year after the subscription by Mvela Gold ofthe GFIMSA shares, each of Gold Fields and Mvela Gold will be entitled torequire the exchange of Mvela Gold’s GFIMSA shares for ordinary shares of GoldFields of an equivalent value based on an exchange ratio equal to 15% of adiscounted cash flow calculation as applied to GFIMSA’s operations divided bythe same calculation as applied to Gold Fields’ operations, with certainadjustments. In the event that the parties do not agree on the number of GoldFields ordinary shares to be issued to Mvela Gold in such exchange, then theexchange ratio will be determined by an independent merchant bank or investmentbank appointed by the parties. Mvela Gold is entitled to dispose of the GFIMSAshares and any Gold Fields ordinary shares it may hold only in accordance withthe terms of a pre-emptive rights agreement entered into by the parties.

 

F-26

----

 

In connection with theMvela loan, GFIMSA entered into two interest rate swaps, an amortizing and anaccreting swap. The amortizing swap for $236.2 million and the accretingswap of $355.1 million reflect the profile of the Mvela loan and have beendesignated as a fair value hedge. The fixed rate receivable on these interestrate swaps is equal to the interest rate payable on the loan from MvelaphandaGold (Proprietary) Limited and the floating rate payable is the three monthJohannesburg Interbank Agreed Rate, or JIBAR rate plus a margin of 1.025%.

 

In terms of the Subscription and Share ExchangeAgreement, 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 Subscription and ShareExchange Agreement is 45,000,000 and 55,000,000 respectively.

 

On June 3, 2005, the interest rate swapwas closed-out resulting in a gain of $36.2 million. Of the $36.2 million, $0.8million was accounted for in the income statement as a gain on financialinstruments in fiscal 2005. The balance of $35.4 million will be accounted forin the income statement as a gain on financial instruments in the incomestatements of fiscal years 2006 to 2009.

 
| ** **                                                                               | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|------------------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                                               | ** ** | **$’m** | ** ** | **$’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         |       | (13.8        | )          |
| Amortization of fair value adjustment  following close-out of interest rate swap         |       | (0.8         | )          | —       |       |
| Translation                                                                              |       | 23.9         |       | 65.7         |       |
| Fair value of loan at end of year                                                        |       | 650.6        |       | 643.2        |       |

 

The fair value adjustment in relation to the interest rate swaps iscalculated using cash flows over the remaining period of the debt discounted atthe five year forward curve of the three month JIBAR rate plus a margin of1.025%.

 

**Long-term debt repayment schedule**

The Mvela loan is repayable in full on March 17,2009.

 

(b)                                **Industrial DevelopmentCorporation loan**

OnMay 28, 2004, Living Gold (Pty) Limited (“Living Gold”), a subsidiary ofGFIMSA entered into an agreement with the Industrial Development Corporation ofSouth Africa Limited (“IDC”) in terms of which IDC agreed to provide a loanfacility of R 16.6 million. On November 24, 2004, Living Gold drew downthe full amount of the facility.

 

In terms of the loan agreement, interest accrues on the facility basedon the First National Bank of Southern Africa Limited prime overdraft rate. Theprime overdraft rate at June 30, 2005 was 10.5%. The loan is repayable in96 equal monthly instalments commencing July 1, 2006.

 

F-27

----

 

**14**                                 **PROVISION FOR ENVIRONMENTALREHABILITATION**

 

The Company has made, and expects to make in the future, expendituresto comply with such 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:

 
| ** **                                                                                  | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|---------------------------------------------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                                                                  | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **Asset retirement obligations**                                                            |       |         |       |         |       |
| The following is a reconciliation of the  total liability for asset retirement obligations: |       |         |       |         |       |
| Balance at July 1                                                                      |       | 116.0        |       | 99.2         |       |
| Revision to estimated cash flows                                                            |       | —       |       | (6.7         | )          |
| Additions to liabilities                                                                    |       | 11.6         |       | —       |       |
| Liabilities settled                                                                         |       | (1.6         | )          | (1.6         | )          |
| Accretion of liability                                                                      |       | 11.5         |       | 8.4          |       |
| Foreign currency translation adjustment                                                     |       | (2.9         | )          | 16.7         |       |
| Balance at June 30                                                                     |       | 134.6        |       | 116.0        |       |

 

The Company intends to finance the ultimaterehabilitation costs of the South African operations from the monies investedwith the environmental trust fund, ongoing contributions, as well as theproceeds on sale of assets and gold from plant clean-up at the time of mineclosure. The Company will finance the ultimate rehabilitation costs of thenon-South African operations from funds to be set aside for that purpose. 

 

**15           PROVISIONFOR POST-RETIREMENT HEALTH CARE COSTS**

 
| ** **                                | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|-------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Accrued post-retirement health care costs |       | 9.0          |       | 18.9         |       |

 

The Group has certain liabilities to subsidize the contributionspayable by certain pensioners and dependants of ex-employees on a pay-as-you-gobasis. The Group’s contributions to these schemes on behalf of current andretired employees amounted to $0.4 million in fiscal 2005 (2004:$2.6 million and 2003: $3.4 million). The obligation has beenactuarially valued and the outstanding contributions will be funded over thelifetime of these pensioners and dependants. During fiscal 2005 approximately2.1% (2004: approximately 6%) of these pensioners and dependants were boughtout of the scheme at a premium of 15%.

 

F-28

----

 

Thefollowing table sets forth the funded status and amounts recognized in the Company’sconsolidated financial statements for the post-retirement health care costs:

 
| ** **                                               | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|----------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                               | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Actuarial present value                                  |       | 9.0          |       | 18.9         |       |
| Plan assets at fair value                                |       | —       |       | —       |       |
| Accumulated benefit obligation in excess of  plan assets |       | 9.0          |       | 18.9         |       |
| Prior service costs                                      |       | —       |       | —       |       |
| Unrecognized net (gain)/loss                             |       | —       |       | —       |       |
| Post-retirement health care liability                    |       | 9.0          |       | 18.9         |       |

 

Thefollowing is a reconciliation of the benefit obligation:

 
| ** **                                            | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|-------------------------------------------------------|------------|--------------|------------|--------------|------------|
| ** **                                            | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| Benefit obligation at beginning of year               |       | 18.9         |       | 23.9         |       |
| Service cost                                          |       | 0.5          |       | 1.3          |       |
| Interest cost                                         |       | 1.2          |       | 1.7          |       |
| Benefits paid                                         |       | (0.4         | )          | (0.6         | )          |
| Benefits forfeited                                    |       | (2.2         | )          | (2.6         | )          |
| Buy out of pensioners and dependants                  |       | (4.9         | )          | (3.9         | )          |
| Premium on buy out of pensioners and  dependents      |       | 0.8          |       | 0.7          |       |
| Release of cross subsidy liability  following buy out |       | (4.5         | )          | (6.2         | )          |
| Foreign currency translation adjustment               |       | (0.4         | )          | 4.6          |       |
| Balance at end of year                                |       | 9.0          |       | 18.9         |       |

 

Theobligation has been valued using the projected unit credit funding method onpast service liabilities. The valuation assumes a health care cost inflationrate of 7% per annum (2004: 11%) and a discount rate of 9% per annum (200413%).

 

Thenet periodic benefit cost is explained as follows:

 

| ** **                | ** ** | **2005** | ** **  | **2004**   | ** ** | **2003**    | ** ** |
|---------------------------|------------|----------|-------------|------------|------------|-------------|------------|
| ** **                | ** ** | **$**    | **‘m** | ** ** | **$**      | **‘m** | ** ** | **$** | **‘m** | ** ** |
| Service cost              |       | 0.5      |        | 1.3        |       | 1.5         |       |
| Interest cost             |       | 1.2      |        | 1.7        |       | 4.0         |       |
| Recognized actuarial loss |       | —   |        | —     |       | —      |       |
| Net periodic benefit cost |       | 1.7      |        | 3.0        |       | 5.5         |       |
|                           |            |          |             |            |            |             |            |  |  |  |

 

F-29

----

 

Assumed health care cost trend rates have asignificant effect on the amounts reported for the health care plans. A onepercentage point increase in assumed health care cost trend rates would haveincreased the aggregate of service and interest cost for 2005 by$0.2 million (2004: $0.3 million). The effect of this change on theaccumulated post-retirement health care benefit obligation at fiscal year-end2005 would be an increase of $0.9 million (2004: $1.8 million). A onepercentage point decrease in assumed health care cost trend rates would havedecreased the aggregate of service and interest cost for 2005 by$0.1 million (2004: $0.4 million). The effect of this change on theaccumulated post-retirement health care benefit obligation at fiscal year-end2004 would be a decrease of $1.5 million (2003: $2.2 million).

 

**16           EMPLOYEE BENEFIT PLANS**

 

**RETIREMENT BENEFITS**: The Gold Fields Limited Corporate Pension Fund is a defined benefitscheme, which has 14 active members. Membership to the scheme is closed. Thescheme is valued at intervals of not less than three years using the projectedunit credit method. This is the only defined benefit scheme in the Group.

 

Thelast actuarial valuation was carried out at June 30, 2004 and showed thefund to be under-funded by approximately $0.4 million, which has beenfully provided for. This scheme is in the process of being wound up. On June 1,2004, all active members were transferred to the Gold Fields Retirement Fund, adefined contribution scheme. Pensioner members have been transferred from thescheme to a retirement scheme of their choice by June 30, 2005.

 

Contributionsto the various retirement schemes are fully expensed during the year in whichthey are funded. The cost of providing retirement benefits for the Company’sdefined contribution plans for the year amounted to $46.9 million (2004:$38.7 million and 2003: $26.6 million).

 

**SHARE OPTION SCHEMES**: At the annual general meeting held on November 10,1999 shareholders approved the adoption of the GF Management Incentive Scheme (“NewScheme”) to replace the scheme (“Old Scheme”) in place prior to the down streammerger with Driefontein by the Company on June 1, 1999. As a result ofintroducing the New Scheme consequent upon the composite transaction,participants transferred to the New Scheme on terms no less favorable to themthan those applicable to them in terms of the Old Scheme. The fair value of theawards granted to members of the Old Scheme was included in the determinationof the purchase consideration as part of the composite transaction. The NewScheme was introduced to provide an incentive for certain officers andemployees of the Group to acquire shares in the Company. In terms of the NewScheme’s rules, up to a maximum of 3% of the Company’s authorized issuedordinary shares, being 13,451,600 shares, may be offered to eligibleCompany employees. The exercise price of each ordinary share which is thesubject of the option is the weighted average of the middle market price atwhich the ordinary shares traded on the JSE on the trading day immediatelypreceding the date on which the Board of Directors grants the options. At theannual general meeting held on October 31, 2001, the shareholders approvedan increase in the maximum number of shares to 5% of the Company’s issuedordinary shares, as at June 30, 2001 being 22,791,830 shares. For theconvenience of the reader, the Rand amounts have been converted toU.S. dollars at the balance sheet rates for the respective fiscal years.

 

F-30

----

 

Detailsof the Scheme are as follows:

 
| ** **                           | ** ** | **Number of  Share  options** | ** ** | **Weighted Average option  price** | ** ** |
|--------------------------------------|------------|-------------------------------|------------|------------------------------------|------------|
| ** **                           | ** ** | ** **                    | ** ** | **Rand**                           | ** ** | **$** | ** ** |
| Outstanding as of July 1, 2002  |       | 6,578,112                     |       | 31.45                              |       | 3.03 |   |
| Granted during the year              |       | 3,128,700                     |       | 89.30                              |       | 11.46 |   |
| Exercised and released               |       | (1,842,648                    | )          | 21.64                              |       | 2.78 |   |
| Forfeited                            |       | (40,000                       | )          | 92.95                              |       | 11.93 |   |
| 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 July 1, 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 |   |

 

Interms of the New Scheme rules, options currently expire no later than sevenyears from the grant date and vest as follows. Upon the second anniversary ofthe grant date, a third of the total option grant vests, and then annually uponfuture anniversaries of the grant date, a further third of the total optiongrant vests. Proceeds received by the Company from the exercise of options arecredited to common stock and additional paid-in capital. The optionsexercisable on June 30, 2005, 2004 and 2003 were3,839,551, 3,376,816 and1,599,202 respectively. The range of exercise prices for options outstanding atJune 30, 2005 was R13.55 to R154.65. The range of exercise prices foroptions is wide primarily due to the fluctuation of the price of the Company’sstock over the period of the grants.

 

OnMay 23, 2005, the contract life of options granted to certain employees atprices between R13.55 and R14.19 were extended by one year. These options wouldhave otherwise expired by June 25, 2005. The incremental cost of the modificationto these options, calculated as the difference between the intrinsic value atmodification date (May 23, 2005) and intrinsic value at grant date of $2.1million, has been recognized in earnings as share-based compensation expense.

 

F-31

----

 

The following tablessummarize information relating to the options outstanding under the New Schemeas of June 30, 2005: (Tables are denominated in South African Rand whereapplicable).

 
| ** **      | ** ** | ** **    | ** ** | ** **  | ** ** | ** **     | ** ** | **Outstanding options|Weighted  average** | ** ** |
|-----------------|------------|---------------|------------|-------------|------------|----------------|------------|-------------------------------------------|------------|
| ** **      | ** ** | ** **    | ** ** | ** **  | ** ** | **Number of**  | ** ** | **Contractual life**                      | ** ** | **Exercise price** | ** ** |
| **Rand**        | ** ** | **$**         | ** ** | **Options** | ** ** | **(in years)** | ** ** | **Rand**                                  | ** ** | **$** | ** ** |
|            |       |          |       |        |       |           |       |                                      |       |   |   |   |   |
| Range of prices |       | 13.55-14.19   |       | 2.02-2.12   |       | 388,208        |       | 1.42                                      |       | 14.08 |   | 2.10 |   |
|            |       | 19.47-23.60   |       | 2.91-3.52   |       | 552,567        |       | 1.57                                      |       | 21.43 |   | 3.20 |   |
|            |       | 25.67-29.45   |       | 3.83-4.40   |       | 961,942        |       | 1.48                                      |       | 25.87 |   | 3.86 |   |
|            |       | 36.07-57.50   |       | 5.38-8.58   |       | 1,174,001      |       | 3.40                                      |       | 46.44 |   | 6.78 |   |
|            |       | 57.51-73.29   |       | 8.58-10.94  |       | 2,997,600      |       | 6.76                                      |       | 65.33 |   | 9.71 |   |
|            |       | 73.80-84.17   |       | 11.01-12.56 |       | 3,378,800      |       | 5.31                                      |       | 81.87 |   | 12.22 |   |
|            |       | 84.59-119.90  |       | 12.56-17.90 |       | 1,400,033      |       | 4.93                                      |       | 96.92 |   | 14.47 |   |
|            |       | 125.37-154.65 |       | 18.71-23.08 |       | 287,300        |       | 3.98                                      |       | 141.08 |   | 21.06 |   |
| Total           |       |          |       |        |       | 11,140,451     |       | 4.79                                      |       | 66.91 |   | 9.99 |   |

 
| ** **      | ** ** | ** **    | ** ** | ** **  | ** ** | ** **    | ** ** | **Exercisable options** | ** ** |
|-----------------|------------|---------------|------------|-------------|------------|---------------|------------|-------------------------|------------|
| ** **      | ** ** | ** **    | ** ** | ** **  | ** ** | ** **    | ** ** | **Weighted  average**   | ** ** | **Weighted  average** | ** ** |
| ** **      | ** ** | ** **    | ** ** | ** **  | ** ** | **Number of** | ** ** | **exercise price**      | ** ** | **exercise price** | ** ** |
| **Rand**        | ** ** | **$**         | ** ** | **options** | ** ** | **Rand**      | ** ** | **$**                   | ** ** |
| Range of prices |       | 13.55-14.19   |       | 2.02-2.12   |       | 388,208       |       | 14.08                   |       | 2.10 |   |
|            |       | 19.47-23.60   |       | 2.91-3.52   |       | 552,567       |       | 21.43                   |       | 3.20 |   |
|            |       | 25.67-29.45   |       | 3.83-4.40   |       | 961,942       |       | 25.87                   |       | 3.86 |   |
|            |       | 36.07-57.50   |       | 5.38-8.58   |       | 755,401       |       | 46.57                   |       | 6.95 |   |
|            |       | 57.51-73.29   |       | 8.58-10.94  |       | 8,200         |       | 65.32                   |       | 9.75 |   |
|            |       | 73.80-84.17   |       | 11.01-12.56 |       | 686,400       |       | 83.48                   |       | 12.46 |   |
|            |       | 84.59-119.90  |       | 12.56-17.90 |       | 335,133       |       | 104.04                  |       | 15.53 |   |
|            |       | 125.37-154.65 |       | 18.71-23.08 |       | 151,700       |       | 145.92                  |       | 21.78 |   |
| Total           |       |          |       |        |       | 3,839,551     |       | 50.06                   |       | 7.47 |   |

 

These options will expire ifnot exercised at specific dates ranging from June 17, 2006 to May 31,2012. Market prices of shares for which options were exercised during thefiscal years ended June 30, 2005 and 2004 ranged from R64.01 to R112.25.

 

At the annual generalmeeting held on October 31, 2001, shareholders approved the adoption ofthe GF Non-Executive Director Share Plan (the “Plan”). The Plan was introducedto provide 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 may be offered to non-executive directors.

 

Under the Plan, theaggregate number of ordinary shares acquired by any one participant cannotexceed 0.1% of the issued share capital from time to time without the approvalof the shareholders in a general meeting and the JSE. The exercise price ofeach ordinary share which is the subject of an option is the weighted averageprice of the ordinary shares on the JSE on the day immediately preceding thedate on which the Non-Executive Directors Remuneration Committee resolves togrant the option.

 

Underthe Plan, all options granted may only be exercised no less than twelve monthsand no more than five years after the date on which the option was accepted bythe participant. Should a participant cease to hold office for any reason, hewill be entitled within thirty days to exercise those share options which hewas entitled to exercise immediately prior to his ceasing to hold office,failing which the options shall automatically lapse. For the convenience of thereader, Rand amounts have been converted to U.S. dollars at the balancesheet rate as of June 30, 2005.

 

F-32

----

 

Detailsof the Plan are as follows:

 
| ** **                           | ** ** | **Number of  options** | ** ** | **Weighted Average option  price** | ** ** |
|--------------------------------------|------------|------------------------|------------|------------------------------------|------------|
| ** **                           | ** ** | **granted**            | ** ** | **Rand**                           | ** ** | **$** | ** ** | ** ** |
| Outstanding as of June 30, 2002 |       | 145,000                |       | 43.70                              |       | 5.61 |   |
| Granted during the year              |       | 87,000                 |       | 110.03                             |       | 14.12 |   |
| Exercised and released               |       | (10,000                | )          | 43.70                              |       | 5.61 |   |
| Outstanding as of June 30, 2003 |       | 222,000                |       | 69.69                              |       | 8.95 |   |
| Granted during the year              |       | 100,000                |       | 88.38                              |       | 14.03 |   |
| Exercised and released               |       | (19,000                | )          | 43.70                              |       | 6.94 |   |
| Outstanding as of June 30, 2004 |       | 303,000                |       | 77.49                              |       | 12.30 |   |
| Granted during the year              |       | 102,400                |       | 68.59                              |       | 11.05 |   |
| Exercised and released               |       | —                 |       | —                             |       | — |   |
|                                 |       |                   |       |                               |       |   |   |
| Outstanding as ofJune 30, 2005  |       | 405,400                |       | 75.24                              |       | 11.23 |   |
|                                      |            |                        |            |                                    |            |  |  |  |

 

Thefollowing tables summarize information relating to options outstanding underthe Plan as of June 30, 2005. (Tables are denoted in South African Randwhere applicable.)

 
| ** **      | ** ** | ** **               | ** ** | ** **            | ** ** | ** **       | ** ** | **Outstanding options** | ** ** |
|-----------------|------------|--------------------------|------------|-----------------------|------------|------------------|------------|-------------------------|------------|
| ** **      | ** ** | ** **               | ** ** | ** **            | ** ** | ** **       | ** ** | **Weighted average**    | ** ** |
| ** **      | ** ** | ** **               | ** ** | ** **            | ** ** | **Number of**    | ** ** | **Contractual  life**   | ** ** | **Exercise price** | ** ** | ** ** | ** ** |
| **Rand**        | ** ** | **$**                    | ** ** | **options**           | ** ** | **(in years)**   | ** ** | **Rand**                | ** ** | **$** | ** ** |
| Range of prices |       | 43.70-65.55  65.56-88.37 |       | 6.52-9.78  9.79-13.19 |       | 116,000  102,400 |       | 1.37  4.64              |       | 43.70  68.59 |   | 6.52  10.24 |   |
|            |       | 88.38-110.03             |       | 13.19-16.42           |       | 187,000          |       | 2.94                    |       | 98.45 |   | 14.69 |   |
| Total           |       |                     |       |                  |       | 405,400          |       | 2.92                    |       | 75.24 |   | 11.23 |   |

 
| ** **      | ** ** | ** **   | ** ** | ** **  | ** ** | ** **     | ** ** | **Outstanding options** | ** ** |
|-----------------|------------|--------------|------------|-------------|------------|----------------|------------|-------------------------|------------|
| ** **      | ** ** | ** **   | ** ** | ** **  | ** ** | ** **     | ** ** | **Weighted average**    | ** ** |
| ** **      | ** ** | ** **   | ** ** | ** **  | ** ** | **Number of**  | ** ** | **Contractual  life**   | ** ** | **Exercise price** | ** ** | ** ** | ** ** |
| **Rand**        | ** ** | **$**        | ** ** | **options** | ** ** | **(in years)** | ** ** | **Rand**                | ** ** | **$** | ** ** |
| Range of prices |       | 43.70-65.55  |       | 6.52-9.78   |       | 116,000        |       | 1.37                    |       | 43.70 |   | 6.52 |   |
|            |       | 88.38-110.03 |       | 13.19-16.42 |       | 187,000        |       | 2.94                    |       | 98.45 |   | 14.69 |   |
| Total           |       |         |       |        |       | 303,000        |       | 2.34                    |       | 77.49 |   | 11.57 |   |

 

F-33

----

 

These options will expire if not exercised at specific dates rangingfrom November 1, 2006 to February 17, 2010. Market prices of sharesfor which options were exercised during the fiscal years ended June 30,2005 and 2004 ranged from R100.00 to R129.10.

 

**17**                                  **DERIVATIVE FINANCIALINSTRUMENTS AND FAIR VALUE AND CREDIT RISK OF FINANCIAL INSTRUMENTS**

 

**Riskmanagement activities**

 

In the normal course of itsoperations, the group is exposed to commodity price, currency, interest rate,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.

 

**Concentrationof credit risk**

 

The Group’s financialinstruments do not represent a concentration of credit risk as the Group dealswith a number of major banks. Accounts receivable are regularly monitored andassessed and where necessary an adequate level of provision is maintained.

 

A formal process ofallocating counterparty exposure and prudential limits is applied under thesupervision of the Group’s executive committee.

 

No margin facilities areengaged.

 

**Foreigncurrency and commodity price risk**

 

In the normal course ofbusiness the Group enters into transactions for the sale of its gold,denominated in U.S. dollars. In addition, the Group has assets and liabilitiesdenominated in a number of different currencies (primarily South African randand Australian dollars). As a result, the Group is subject to transaction andtranslation exposure from fluctuations 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.

 

**Interestrate and liquidity risk**

 

Fluctuations in interestrates impact on the value of investments and financing activities, giving riseto interest rate risk. The Group does not currently hedge its exposure tointerest rate risk.

 

In the ordinary course ofbusiness, the Group receives cash proceeds from its operations and is requiredto fund working capital and capital expenditure requirements. The cash ismanaged to ensure surplus funds are invested to maximize returns while ensuringthat capital is safeguarded to the maximum extent possible by investing onlywith top financial institutions.

 

Substantial contractualarrangements for uncommitted borrowing facilities are maintained with severalbanking counterparties to meet the Group’s normal contingency fundingrequirements.

 

**Fair value**

 

The fair value of afinancial instrument is defined as the amount at which the instrument could beexchanged in a current transaction between willing parties, other than in aforced or liquidation sale. The carrying amounts of receivables, accountspayable and cash and cash equivalents are a reasonable estimate of their fairvalues due to the short-term maturity of such instruments. The investments inthe environmental trust fund approximate fair value, as the monies are investedin short-term maturity investments. The listed investments are carried atmarket value. Long-term loans approximate fair value, as they are subject tomarket based floating rates.

 

F-34

----

 

The estimated fair values of the Group’sfinancial instruments are:

 
| ** **                       | ** ** | **June 30,  2005** | ** ** | **June 30,  2004** | ** ** |
|----------------------------------|------------|-------------------------|------------|-------------------------|------------|
| ** **                       | ** ** | **Carrying  value**     | ** ** | **Fair value**          | ** ** | **Carrying  value** | ** ** | **Fair value** | ** ** |
| **Financial  assets**            |       |                    |       |                    |       |   |   |   |   |
| Cash and  cash equivalents       |       | 503.7                   |       | 503.7                   |       | 656.3 |   | 656.3 |   |
| Financial  instruments           |       | 79.2                    |       | 79.2                    |       | 107.3 |   | 107.3 |   |
| Receivables                      |       | 119.9                   |       | 119.9                   |       | 116.4 |   | 116.4 |   |
| Non-current  investments         |       | 203.5                   |       | 203.5                   |       | 179.8 |   | 179.8 |   |
|                             |       |                    |       |                    |       |   |   |   |   |
| **Financial  liabilities**       |       |                    |       |                    |       |   |   |   |   |
| Long-term  loans                 |       | 653.1                   |       | 702.0                   |       | 643.2 |   | 643.2 |   |
| Accounts  payable and provisions |       | 274.5                   |       | 274.5                   |       | 290.6 |   | 290.6 |   |

 

**Derivative contracts as at June 30, 2005**

 

**Foreign currency contracts**

 

Thefollowing tables summarize the foreign currency contracts held by the Companyas at June 30, 2005:

 

(a)          **A$/$ currency contracts**

 

| ** **                  | ** ** | **Call options** | ** ** |
|-----------------------------|------------|------------------|------------|
| **Various  maturity dates** | ** ** | **$m**           | ** ** | **A$1=$ ** | ** ** |
| **in  fiscal years ending** | ** ** | **Notional**     | ** ** | **Strike price** | ** ** |
| June 30, 2006          |       | 100.0            |       | 0.7670 |   |
| June 30, 2007          |       | 75.0             |       | 0.7670 |   |
|                        |       | 175.0            |       | 0.7670 |   |

 

The mark-to-market value of these contracts amountedto 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** | ** ** |
|-----------------------|------------|-------------------|------------|
| ** **            | ** ** | **$m**            | ** ** | **ZAR1 = $ ** | ** ** |
| **Maturity date**     | ** ** | **Notional**      | ** ** | **Strike price** | ** ** |
| December 5, 2005 |       | 30.0              |       | 0.14409 |   |

 

The mark-to-market value of these contracts amountedto a loss of  $0.6 million at June 30,2005, which value is based on the prevailing interest rates and volatility atthe time.

 

(c)          **International Petroleum Exchange(IPE) Gasoil options**

 

| ** **        | ** ** | **Forward sales** | ** ** |
|-------------------|------------|-------------------|------------|
| **Maturity date** | ** ** | **Liters**        | ** ** | **US$/liter** | ** ** |
| June 8, 2005 |       | 51,600            |       | 0.45000 |   |

 

The mark-to-market value of these contracts amountedto a gain of $1.9 million at June 30, 2005, which value is based onthe prevailing interest rates and volatility at the time.

 

F-35

----

 

**Derivative contracts as at June 30, 2004**

 
|   |   | The  following tables summarize the foreign currency contracts held by the Company  as at June 30, 2004: |   |
|--------|--------|---------------------------------------------------------------------------------------------------------------|--------|

 

(a)          **A$/$ currency contracts**

 

| ** **                  | ** ** | **Call options** | ** ** |
|-----------------------------|------------|------------------|------------|
| **Various  maturity dates** | ** ** | **$m**           | ** ** | **A$1=$ ** | ** ** |
| **in  fiscal years ending** | ** ** | **Notional**     | ** ** | **Strike price** | ** ** |
| June 30, 2005          |       | 87.5             |       | 0.7670 |   |
| June 30, 2006          |       | 100.0            |       | 0.7670 |   |
| June 30, 2007          |       | 75.0             |       | 0.7670 |   |
|                        |       | 262.5            |       | 0.7670 |   |

 

(b)         $/ZARcurrency contracts

 

| ** **            | ** ** | **Forward sales** | ** ** |
|-----------------------|------------|-------------------|------------|
| ** **            | ** ** | **$m**            | ** ** | **ZAR1 = $ ** | ** ** |
| **Maturity date**     | ** ** | **Notional**      | ** ** | **Strike price** | ** ** |
| December 3, 2004 |       | 50.0              |       | 0.1506 |   |

 
|   |   | The mark-to-market  value of these contracts amounted to a positive US$1.7 million at June 30,  2004, which value is based on quotes from brokers. |   |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

 
|   |   | **Interest rate swap contracts as at June 30, 2004**

 

In  terms of the Mvelaphanda loan, GFIMSA pays Mvelaphanda Gold (Proprietary)  Limited interest on the Rand denominated Mvela loan at a fixed rate, semi-annually.  The interest rate was fixed with reference to the 5 year ZAR swap rate,  at 9.6179% nominal annual compounded semi-annually plus a margin of 0.95%.  GFIMSA simultaneously entered into interest rate swap agreements converting  the fixed interest rate exposure to a floating rate. In terms of the swap,  GFIMSA is now exposed to the 3 month JIBAR rate plus a margin of 1.025%.

 

 The marked-to-market value of the interest  rate swap was a loss of $13.8 million at June 30, 2004, to which hedge  accounting has been applied. In terms of hedge accounting, the liability that  exists in the balance sheet is decreased by the $13.8 million. The mark-to-market  value was based on the prevailing interest rates at the time. |   |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

 

F-36

----

 

**18**                                  **ADDITIONALCASH FLOW INFORMATION**

 

(a)          **Supplemental cash flow disclosures**

 
|   |   | The income and mining taxes paid in the  statement of cash flow represents actual cash paid. |   |
|--------|--------|----------------------------------------------------------------------------------------------|--------|

 
|   |   | The  following amounts of interest paid were included in net cash provided by  operating activities: |   |
|--------|--------|------------------------------------------------------------------------------------------------------|--------|

 
| ** ** | ** ** | ** **                                                                                                                                                                                                 | ** ** | **Years ended June 30,** | ** ** |
|------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------|------------|
| ** ** | ** ** | ** **                                                                                                                                                                                                 | ** ** | **2005**                      | ** ** | **2004** | ** ** | **2003** | ** ** |
| ** ** | ** ** | ** **                                                                                                                                                                                                 | ** ** | **$****‘m**              | ** ** | **$****‘m** | ** ** | **$****‘m** | ** ** |
| ** ** | ** ** | ** **                                                                                                                                                                                                 | ** ** | ** **                    | ** ** | ** ** | ** ** | ** ** | ** ** |
|       |       | Interest  paid                                                                                                                                                                                             | ** ** | 57.6                          |       | 27.2 |   | 4.8 |   |
| (b)        |       | **Non cash-items**                                                                                                                                                                                         | ** ** |                          |       |   |   |   |   |
|       |       | Excluded  from the statements of cash flows are the following:                                                                                                                                             | ** ** |                          |       |   |   |   |   |
|       | (i)        | **For  the year ended June 30, 2005**                                                                                                                                                                 | ** ** |                          |       |   |   |   |   |
|       |       | The  $9.0 million gain on market-to-market of listed investments                                                                                                                                           | ** ** |                          |       |   |   |   |   |
|       | (ii)       | **For the year ended June 30, 2004**                                                                                                                                                                  | ** ** |                          |       |   |   |   |   |
|       |       | The  $17.4 million loss on mark-to-market of listed investments.                                                                                                                                      | ** ** |                          |       |   |   |   |   |
|       | (iii)      | **For the year ended June 30, 2003**                                                                                                                                                                  | ** ** |                          |       |   |   |   |   |
|       |       | The  $3.4 million loss on mark-to-market of listed investments                                                                                                                                        | ** ** |                          |       |   |   |   |   |
|       |       | ** **                                                                                                                                                                                                 | ** ** |                          |       |   |   |   |   |
| (c)        |       | **Acquisitions of subsidiaries**                                                                                                                                                                           | ** ** |                          |       |   |   |   |   |
|       |       | **Minority shareholders’ interest in Arctic Platinum**                                                                                                                                                | ** ** |                          |       |   |   |   |   |
|       |       | With  effect from September 4, 2003, the Group acquired the minority  shareholders’ interest in Artic Platinum.                                                                                  | ** ** |                          |       |   |   |   |   |
|       |       | Minority  shareholders’ interest                                                                                                                                                                      | ** ** | —                        |       | 31.7 |   | — |   |
|       |       | Paid  for by issue of share capital                                                                                                                                                                        | ** ** | —                        |       | (8.7 | ) | — |   |
|       |       | Paid  for by cash                                                                                                                                                                                          | ** ** | —                        |       | 23.0 |   | — |   |
|       |       | ** **                                                                                                                                                                                                 | ** ** |                          |       |   |   |   |   |
| (d)        |       | **Disposal of St Helena**                                                                                                                                                                                  | ** ** |                          |       |   |   |   |   |
|       |       | With  effect from October 30, 2002, the Group disposed of the assets and  liabilities of St. Helena to Freegold. The aggregate fair value of the assets  and liabilities disposed of were as follows: | ** ** |                          |       |   |   |   |   |
|       |       | Property,  plant and equipment                                                                                                                                                                             | ** ** | —                        |       | — |   | 0.2 |   |
|       |       | Inventory                                                                                                                                                                                                  | ** ** | —                        |       | — |   | 0.1 |   |
|       |       | Environmental  rehabilitation provision                                                                                                                                                                    | ** ** | —                        |       | — |   | (4.9 | ) |
|       |       | Environmental  rehabilitation investment                                                                                                                                                                   | ** ** | —                        |       | — |   | 3.1 |   |
|       |       | **Net liabilities disposed of**                                                                                                                                                                            | ** ** | —                        |       | — |   | (1.5 | ) |
|       |       | Profit  on disposal of St. Helena                                                                                                                                                                          | ** ** | —                        |       | — |   | 13.4 |   |
|       |       | **Payment received in cash**                                                                                                                                                                               | ** ** | —                        |       | — |   | 11.9 |   |

 

F-37

----

 

**19**       **COMMITMENTS**

 
| ** **               | ** ** | **2005**     | ** ** | **2004**     | ** ** |
|--------------------------|------------|--------------|------------|--------------|------------|
| ** **               | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **Capital  expenditure** |       |         |       |         |       |
| Authorized               |       | 454.6        |       | 520.7        |       |
| Contracted for           |       | 23.8         |       | 57.5         |       |
| Other guarantees         |       | 51.3         |       | 44.0         |       |

 

Guaranteesconsist of $23.3 million committed to guarantee Gold Fields’ environmentalobligations with respect to its Ghanaian and Australian operations,$26.8 million (comprising a loan of $22.4 million and interest of $4.4million) to the Public Investment Commissioners (PIC) with regard to the Mvelaloan and $1.2 million for numerous other obligations.

 

Underthe PIC agreement, the Company has effectively guaranteed a loan ofR150 million ($22.4 million) made by the PIC to certain lenders toMvela, at an interest rate of 14.25%. Under the terms of the agreement, the PIChas the right to require the Company to assume all its rights and obligationsunder this loan together with its underlying security. The PIC is obliged topay the Company a guarantee fee equal to 3.75% per annum on the date theloan is repaid.

 

Commitmentswill be funded from internal cash resources and borrowings as necessary.

 

**20**           **CONTINGENT LIABILITIES**

 

Gold Fields isa member of the World Gold Council. In terms of the membership agreement, allmembers are responsible for certain costs, including core costs on a three yearrolling basis, winding up costs, if applicable, and various other contingentliabilities.  Apportionment of liabilities,should they arise, is done proportionate to the member’s production relative tothe total production of all members. To date, no claims have been made on GoldFields.

** **

**21**           **LINES OF CREDIT**

 

The Group had unused linesof credit available amounting to $388.0 million (R2.6 billion) at June 30,2005 (2004: $90.0 million).

 

**22**           **RELATEDPARTY TRANSACTIONS**

 

**Pro-Drilling &Milling (Pty) Limited**

 

One of theCompany’s executive committee members sits on the board of and owns 50% ofPro-Drilling & Mining (Pty) Limited (“Pro-Drilling”) a privately owneddrilling company. Pro-Drilling provides diamond drilling and core recovery,services at the Driefontein operation of GFIMSA pursuant to a contract which isvalid until terminated by either party with one months written notice. TheCompany paid Pro-Drilling $1.8 million, $0.3 million and $0.2 million for theyears ended June 30, 2005, 2004 and 2003 respectively.

 

**MvelaphandaResources Limited**

 

Twoof the Company’s non-executive directors at June 30, 2005, Tokyo Sexwale andBernard van Rooyen, are the executive chairman and a director of MvelaphandaResources Limited (“Mvela”), respectively. Mvela is a broad based blackeconomic empowerment consortium.  Bernardvan Rooyen retired from the Gold Fields’ Board of Directors on November 17,2005.

 

OnJuly 10, 2002, the Company announced that it had granted Mvelaparticipation rights, varying between a minimum of 5% and a maximum of 15% inany new Gold Fields precious metals exploration projects in Africa, beginningMarch 1, 2002. In consideration for the transaction Mvela will issue theCompany with options to subscribe in tranches for ordinary shares, consistingof one ordinary share and one unsecured debenture issued by Mvela, in Mvela ata 10% premium to the five day weighted average trading price on the JSE. Mvelainitially issued the Company with options to subscribe for ordinary shares witha value of Rand 10 million ($1 million). As at June 30, 2005 Mvela hadissued the Company options to subscribe for ordinary shares with a value ofR7.6 million ($1.1 million), of which the Company is yet to subscrib for anyMvela ordinary shares.

 

Thetransaction with Mvela to acquire a 15% beneficial interest in the Company’sSouth African mining operations for a total cash consideration ofR4.1 billion ($591.3 million) became effective on March 15,2004. The Company has provided Mvela with vendor financing of R300 million($47.6 million) comprising R200 million of preference shares andR100 million of ordinary shares on commercial terms in connection with thetransaction.

 

F-38

----

 

**RandRefinery**

 

Rand Refinery, in which theCompany holds a 33.1% interest, has an agreement with the Company whereby itrefines all the Company’s South African and Ghanaian operations goldproduction. The Company’s chief financial officer is currently a director ofRand Refinery and has held his directorship of Rand Refinery since July 10,2000. The Company paid Rand Refinery $2.6 million, $3.4 million and $1.73million in refining fees for the years ended June 30, 2005, 2004 and 2003,respectively. Refer to footnote 12 - Non-current Investments for amounts owingby Rand Refinery to the Company as at June 30, 2005 and 2004, and thedividends received from Rand Refinery for the years ended June 30, 2005,2004 and 2003 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.

 

**23           SUBSEQUENT EVENTS**

 

***Cerro Corona Project***

 

Thefeasibility study for the Cerro Corona Project in Northern Peru was completedduring November 2005, and the Gold Fields’ Board of Directors subsequentlyapproved the associated investment of a purchase of an 80.7% economic interestand 92% voting interest in the Cerro Corona Project, subject to the receiptof  approval by the Peruvian Governmentof the environmental impact study.  OnDecember 5, 2005, Gold Fields Limited announced that the Peruvian Governmenthad approved the environmental impact study for the Cerro Corona Project. GoldFields has now commenced steps to complete the purchase for a totalconsideration of $40 million.

 

***Acquisition of Bolivar Gold Corp.***

 

On November 21, 2005, Gold Fields andBolivar Gold Corp., or Bolivar, jointly announced that they had entered into anagreement providing for Gold Fields to acquire, through a court approved planof arrangement, all of the outstanding securities of Bolivar not currently heldby Gold Fields for total cash consideration of approximately $330 million. Holdersof Bolivar common shares will be offered C$3.00 per Bolivar common share andholders of Bolivar warrants expiring on March 17, 2008, August 25,2008 and December 22, 2009 will be offered C$1.90, C$1.25 and C$0.90 perwarrant, respectively. The consideration for the warrants expiring on March 17,2008, and August 25, 2008, is calculated based on the amount ofconsideration per common share minus the warrant strike price and theconsideration for the warrants expiring on December 22, 2009, iscalculated based on a premium equal to the premium payable to commonshareholders based on the closing price of the common shares on November 18,2005. Furthermore, the transaction will trigger the redemption of C$26 millionprincipal amount of convertible debentures of Bolivar at a redemption price ofC$1,905.25 in cash per C$1,000 principal amount of debentures for a totalamount of $24.1 million, which is included in the total purchase considerationreferred to above.

 

Gold Fields currently holds approximately 13%of the common shares and 32% of the warrants expiring on August 25, 2008.Definitive agreement documentation was executed on December 1, 2005, andthe SARB has approved the proposed transaction.

 

Each of Gold Fields’ and Bolivar’s Boards ofDirectors have voted to approve the transaction and it is anticipated that thetransaction will close in January 2006, subject to, among other things,satisfaction of the following principal conditions precedent:

 

•                  court approval of the plan ofarrangement;

•                  approval by two-thirds of theholders of common shares of Bolivar present in person or by proxy at anextraordinary general meeting of Bolivar to be held to approve the transaction;

•                  approval by two-thirds of theholders of warrants of Bolivar, voting together as a single class, present inperson or by proxy at an extraordinary general meeting of Bolivar to be held toapprove the transaction;

•                  no more than 10% of holders ofBolivar common shares exercising dissent rights; and

•                  approval, to the extent necessary,of any regulatory authorities having jurisdiction over the transaction.

 

Bolivar is listed on the Toronto StockExchange and operates the Choco 10 open pit gold mine in the El Callao golddistrict in the Bolivar State, Venezuela.

 

F-39

----

 

***Arctic Platinum Joint Venture with North AmericanPalladium***

 

On October 18, 2005, Gold Fields announced thatit had entered into a letter of intent with North American Palladium, or NAP, aCanadian platinum metals group producer, to form a joint venture to furtherexplore mining properties and develop a mine at APP. APP’s location and geologyare similar to that of NAP’s other properties and it is expected that NAP willbe able to utilize its operating and development experience in the design andconstruction of a mine at APP. The letter of intent provides that NAP will begranted an option to acquire up to a 60% undivided interest in APP includingthe Suhanko, SJ Reef and SK Reef mining properties and claims located south ofRovaniemi, Finland. NAP’s option to acquire its interest in APP will vest uponNAP satisfying the following conditions on or before June 30, 2008: (i) completinga $7.5 million re-scoping study and exploration program and $5.0 millionfeasibility study; (ii) making a decision to develop a mine at APP; and (iii) payingGold Fields up to $45.0 million through the issuance of NAP common shares. Theprice per share will be $4.88, which is the weighted average trading price ofNAP’s common stock on the American Stock Exchange for 11 trading dayscommencing October 11, 2005. During the next stage of work, NAP isexpected to manage the exploration, engineering and evaluation activity on APP.This work is to be divided into two phases, Phase I, a re-scoping study, andPhase II, a feasibility study. The proposed exploration program will focus onAPP’s SK Reef and SJ Reef projects. The feasibility study is expected generatea report with sufficient engineering detail and cost estimates in order for theAPP****to be considered for project financingor other suitable financing alternatives.

 

The re-scoping and feasibility studies are expected tocommence in the first quarter of 2006 and take approximately 30 months tocomplete. It is expected that a joint venture will be formed with NAP holding a60% interest and Gold Fields holding a 40% interest. Gold Fields would 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 would remain operator of the joint venture which would be managedunder a joint venture arrangement. Completion of the transaction is subject toa number of conditions including, among other things, negotiating and executinga formal option and joint venture agreement and receipt of all requiredregulatory and third party approvals and consents, including certain regulatoryapprovals, such as the South African Reserve Bank.

 

F-40

----

 

**24           GEOGRAHICAL AND SEGMENT INFORMATION**

 

GoldFields is primarily involved in gold mining, exploration and relatedactivities. Activities are conducted and investments held both inside andoutside of South Africa.

 

Thesegment results have been prepared and presented in accordance withInternational Financial Reporting Standards (“IFRS”) and reconciled to US GAAP,as IFRS information is what the Company’s chief operating decision makerreviews in allocating resources and making investment decisions. The Company’sgold mining operations are managed and internally reported based upon thefollowing geographic areas: the Driefontein division, the Kloof Division, theFree State Beatrix and Free State St. Helena (until its disposal on October 30,2002), in Ghana the Tarkwa and Damang mines and Australia. The Group also hasexploration interests which are included in the Corporate and other segment.Corporate costs are allocated between segments based upon the time spent oneach segment by members of the executive team.

 
| ** **                                              | ** ** | **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-41

----

 
| ** **                                                                                | ** ** | **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 under IFRS includes: Corporateexpenditure — $22.5 million, Environmental rehabilitation — $11.5 million andEmployment termination costs — $13.7 million, which are not included inproduction costs under US GAAP. In addition, gold inventory change is includedin production costs under US GAAP.

(2)          Reflects the change in quantity and value ofbroken ore and ore on the heap leach pad during the financial year.

 

F-42

----

 
| ** **                                              | ** ** | **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 | ) | — |   | — |   | — |   | — |   | — |   | (61.8 | ) |
| Other items as detailed in the statement of  operations |       | 16.3                                      |       | (8.8 | ) | (8.6 | ) | 0.8 |   | — |   | 43.9 |   | 32.5 |   | (7.1 | ) | 68.9 |   |
| 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** | ** ** | **(1.6** | **)** | **(62.3** | **)** | **71.7** | ** ** |

 

F-43

----

 
| ** **                                                                                | ** ** | **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 under IFRS includes: Corporateexpenditure — $20.3 million, Environmental rehabilitation — $8.4 million andEmployment termination costs — $10.5 million, which are not included inproduction costs under US GAAP. In addition, gold inventory change is includedin production costs under US GAAP.

(2)          Reflects the change in quantity and value ofbroken ore and ore on the heap leach pad during the financial year.

 

F-44

----

 
| ** **                                                                                | ** ** | **Fiscal year ended June 30,  2003** | ** ** |
|-------------------------------------------------------------------------------------------|------------|-------------------------------------------|------------|
| ** **                                                                                | ** ** | **Driefontein**                           | ** ** | **Kloof** | ** ** | **Beatrix** | ** ** | **St. Helena** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                | ** ** | **South**                                 | ** ** | **South** | ** ** | **South** | ** ** | **South** | ** ** | **Tarkwa** | ** ** | **Damang** | ** ** | ** ** | ** ** | **Corporate** | ** ** | **Reconciling** | ** ** | **Group** | ** ** |
| ** **                                                                                | ** ** | **Africa**                                | ** ** | **Africa** | ** ** | **Africa** | ** ** | **Africa** | ** ** | **Ghana** | ** ** | **Ghana** | ** ** | **Australia** | ** ** | **and other** | ** ** | **items** | ** ** | **consolidated** | ** ** |
| **Statement of operations**                                                               |       |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                                                                                   |       | 420.2                                     |       | 380.1 |   | 217.6 |   | 16.0 |   | 179.4 |   | 99.5 |   | 219.0 |   | — |   | 6.4 |   | 1,538.2 |   |
| Operating costs (1)                                                                       |       | (267.2                                    | )          | (257.1 | ) | (158.7 | ) | (12.9 | ) | (103.7 | ) | (70.4 | ) | (139.0 | ) | — |   | (31.9 | ) | (1,041.1 | ) |
| Gold inventory change (2)                                                                 |       | (4.2                                      | )          | (0.5 | ) | — |   | — |   | (1.8 | ) | (1.1 | ) | 6.5 |   | — |   | 1.5 |   | 0.4 |   |
| **Operating profit**                                                                      | ** ** | **148.8**                                 | ** ** | **122.5** | ** ** | **58.7** | ** ** | **3.1** | ** ** | **73.9** | ** ** | **28.0** | ** ** | **86.5** | ** ** | **—** | ** ** | **(24.0** | **)** | **497.5** | ** ** |
| Amortization and depreciation                                                             |       | (25.0                                     | )          | (24.4 | ) | (9.4 | ) | — |   | (15.6 | ) | (7.1 | ) | (56.2 | ) | (10.1 | ) | (40.3 | ) | (188.1 | ) |
| **Net operating profit/(loss)**                                                           | ** ** | **123.8**                                 | ** ** | **98.1** | ** ** | **49.3** | ** ** | **3.1** | ** ** | **58.3** | ** ** | **20.9** | ** ** | **30.3** | ** ** | **(10.1** | **)** | **(64.3** | **)** | **309.4** | ** ** |
| Exploration expenditure                                                                   |       | —                                    |       | — |   | — |   | — |   | — |   | — |   | — |   | (23.4 | ) | (6.2 | ) | (29.6 | ) |
| Other items as detailed in the statement of  operations                                   |       | (2.9                                      | )          | (0.1 | ) | (0.3 | ) | 14.6 |   | 0.6 |   | 4.3 |   | 52.6 |   | 70.2 |   | (13.3 | ) | 125.7 |   |
| Current taxation                                                                          |       | (30.2                                     | )          | (25.9 | ) | (0.6 | ) | (3.0 | ) | (6.7 | ) | (3.6 | ) | (5.7 | ) | (4.6 | ) | — |   | (80.3 | ) |
| Deferred taxation                                                                         |       | (10.6                                     | )          | (5.8 | ) | (19.9 | ) | — |   | (17.6 | ) | (7.3 | ) | (14.7 | ) | 6.0 |   | 16.4 |   | (53.5 | ) |
| **Profit after taxation**                                                                 | ** ** | **80.1**                                  | ** ** | **66.3** | ** ** | **28.5** | ** ** | **14.7** | ** ** | **34.6** | ** ** | **14.3** | ** ** | **62.5** | ** ** | **38.1** | ** ** | **(67.4** | **)** | **271.7** | ** ** |
| **Balance sheet**                                                                         |       |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                                              |       | 427.0                                     |       | 449.2 |   | 259.8 |   | 2.4 |   | 162.0 |   | 41.3 |   | 399.2 |   | 726.1 |   | 259.8 |   | 2,726.8 |   |
| Total liabilities (excluding deferred  taxation and minority shareholders’ interest) |       | 104.2                                     |       | 67.5 |   | 26.8 |   | 3.9 |   | 29.5 |   | 15.7 |   | 76.0 |   | 58.2 |   | 19.6 |   | 401.4 |   |
| Deferred tax liability/(asset)                                                            |       | 176.9                                     |       | 172.4 |   | 19.9 |   | — |   | 40.3 |   | (5.4 | ) | 43.4 |   | 101.8 |   | 98.0 |   | 647.3 |   |
| Capital expenditure – net                                                            |       | 73.5                                      |       | 53.9 |   | 48.6 |   | — |   | 26.6 |   | 1.8 |   | 82.0 |   | 7.7 |   | (69.8 | ) | 224.3 |   |

 

----

(1)          Operating cost under IFRS includes: Corporateexpenditure — $16.6 million, Environmental rehabilitation —$5.3 million and Employment termination costs — $3.8 million, whichare not included in Production costs under US GAAP. In addition, gold inventorycharge is included in Production costs under US GAAP       

(2)          Reflects the change in quantity and value ofbroken ore and ore on the heap leach pad during the financial year 

 

F-45

----

 

Thefollowing provides a breakdown of the reconciling items for each line itempresented.

 
| ** **                                                    | ** ** | ** ** | ** **        | **2005**     | ** ** | **2004**     | ** ** | **2003**     | ** ** |
|---------------------------------------------------------------|------------|------------|-------------------|--------------|------------|--------------|------------|--------------|------------|
| ** **                                                    | ** ** | ** ** | ** **        | **$’m** | ** ** | **$’m** | ** ** | **$’m** | ** ** |
| **Revenue**                                                   |       |       |              |         |       |         |       |         |       |
| ** **                                                    |       |       |              |         |       |         |       |         |       |
| Revenue recognition                                           |       | (i         | )                 | —       |       | —       |       | 6.4          |       |
| ** **                                                    | ** ** | ** ** | ** **        | **—**   | ** ** | **—**   | ** ** | **6.4**      | ** ** |
| **Operating costs**                                           |       |       |              |         |       |         |       |         |       |
| On-mine exploration                                           |       | (j         | )                 | (9.3         | )          | (14.6        | )          | (22.3        | )          |
| Provision for rehabilitation                                  |       | (l         | )                 | (1.3         | )          | —       |       | (0.6         | )          |
| Revenue recognition                                           |       | (i         | )                 | —       |       | —       |       | (6.4         | )          |
| Deferred stripping                                            |       | (o         | )                 | (11.4        | )          | (6.3         | )          | (2.6         | )          |
| ** **                                                    | ** ** | ** ** | ** **        | **(22.0**    | **)**      | **(20.9**    | **)**      | **(31.9**    | )          |
| **Gold inventory**                                            |       |       |              |         |       |         |       |         |       |
|                                                          |       |       |              |         |       |         |       |         |       |
| Inventory                                                     |       | (g         | )                 | 2.5          |       | (0.3         | )          | 1.5          |       |
|                                                          |       |       |              |         |       |         |       |         |       |
| ** **                                                    | ** ** | ** ** | ** **        | **2.5**      | ** ** | **(0.3**     | **)**      | **1.5**      |       |
| **Amortization and depreciation**                             |       |       |              |         |       |         |       |         |       |
| Business combination – formation of Original Gold Fields |       | (a         | )                 | (27.0        | )          | (20.3        | )          | (19.9        | )          |
| Business combination – formation of Gold Fields          |       | (b         | )                 | (4.0         | )          | (3.6         | )          | (2.7         | )          |
| Business combination – purchase of St. Ives and Agnew    |       | (c         | )                 | 2.3          |       | 2.6          |       | 3.4          |       |
| Business combination – purchase of Abosso                |       | (d         | )                 | 1.0          |       | 0.4          |       | 1.3          |       |
| Amortization of reserves                                      |       | (g         | )(h) (q) (o) | (3.1         | )          | (3.3         | )          | (21.0        | )          |
| Amortization – inclusion of future costs                 |       | (h         | )                 | (0.2         | )          | 6.3          |       | (0.9         | )          |
| Provision for rehabilitation                                  |       | (l         | )                 | —       |       | (1.5         | )          | (0.5         | )          |
| ** **                                                    | ** ** | ** ** | ** **        | **(31.0**    | **)**      | **(19.4**    | **)**      | **(40.3**    | )          |
| **Exploration expenditure**                                   |       |       |              |         |       |         |       |         |       |
| Exploration costs                                             |       | (j         | )                 | (14.2        | )          | (11.4        | )          | (6.2         | )          |
| ** **                                                    | ** ** | ** ** | ** **        | **(14.2**    | **)**      | **(11.4**    | **)**      | **(6.2**     | )          |
| **Other items as detailed in the statement of operations**    |       |       |              |         |       |         |       |         |       |
| Post-retirement medical benefits                              |       | (n         | )                 | 4.0          |       | 4.5          |       | 12.0         |       |
|                                                          |       |       |              |         |       |         |       |         |       |
| Share-based compensation                                      |       | (k         | )                 | (2.1         | )          | —       |       | —       |       |
| Investments in affiliates                                     |       | (m         | )                 | 1.3          |       | —       |       | 4.3          |       |
| Write-down of investments                                     |       | (p         | )                 | (7.7         | )          | —       |       | —       |       |
| Impairment of Agnew                                           |       | (r         | )                 | —       |       | —       |       | (29.6        | )          |
| Impairment of assets                                          |       | (f         | )                 | (191.1       | )          | (10.9        | )          | —       |       |
| Mvelaphanda transaction – interest paid                  |       | (s         | )                 | (43.3        | )          | (12.4        | )          | —       |       |
| Mvelaphanda transaction – debt insurance costs           |       | (s         | )                 | 0.8          |       | —       |       | —       |       |
| Mvelaphanda transaction –fair value hedge accounting     |       | (s         | )                 | —       |       | 11.7         |       | —       |       |
| Mvelaphanda transaction –profit on close out of hedge    |       | (s         | )                 | (49.2        | )          |         |       | —       |       |
| ** **                                                    | ** ** | ** ** | ** **        | **(287.3**   | **)**      | **(7.1**     | **)**      | **(13.3**    | )          |

 

F-46

----

 
| ** **                                                                           | ** **                     | ** ** | **2005**   | ** **  | **2004**   | ** ** | **2003**    | ** ** |
|--------------------------------------------------------------------------------------|--------------------------------|------------|------------|-------------|------------|------------|-------------|------------|
| ** **                                                                           | ** **                     | ** ** | **$**      | **’m** | ** ** | **$**      | **’m** | ** ** | **$** | **’m** | ** ** |
| **Total liabilities excluding  minority interests and shareholders’ interests** | ** **                     |       |       |        |       |       |        |       |
| Provision for rehabilitation                                                         | (l)                            |       | (0.6       | )           | 2.4        |       | 10.0        |       |
| Post-retirement medical  benefits                                                    | (n)                            |       | 5.4        |        | 9.7        |       | 9.6         |       |
| Mvelaphanda transaction – debt  issuance cost                                   | (s)                            |       | 4.8        |        | 5.1        |       | —      |       |
| Mvelaphanda transaction – fair  value hedge accounting                          | (s)                            |       | 32.8       |        | (11.0      | )          | —      |       |
| Mvelaphanda transaction –  classification of instrument                         | (s)                            |       | 366.2      |        | 389.5      |       | —      |       |
| Mvelaphanda transaction –  interest paid                                        | (s)                            |       | 51.6       |        | 11.7       |       | —      |       |
| ** **                                                                           | ** **                     | ** ** | **460.2**  | ** **  | **407.4**  | ** ** | **19.6**    | ** ** |
| **Total assets**                                                                     | ** **                     | ** ** | ** ** | ** **  | ** ** | ** ** | ** **  | ** ** |
| Business combination –  formation of Original Gold Fields                       | (a)                            |       | 27.1       |        | 55.9       |       | 62.0        |       |
| Business combination –  formation of Gold Fields                                | (b)                            |       | 61.9       |        | 69.8       |       | 63.6        |       |
| Business combination –  purchase of St. Ives and Agnew                          | (c)                            |       | (8.7       | )           | (11.5      | )          | (11.5       | )          |
| Business combination –  purchase of Abosso                                      | (d)                            |       | (2.4       | )           | (0.6       | )          | 3.0         |       |
| Business combination –  acquired tax losses                                     | (e)                            |       | —     |        | (10.5      | )          | (9.6        | )          |
| Mvelaphanda transaction – debt  insurance costs                                 | (s)                            |       | 3.6        |        | 5.1        |       | —      |       |
| Impairment of assets                                                                 | (f)                            |       | 137.8      |        | 345.2      |       | 299.3       |       |
| Amortization of reserves                                                             | (g)                            |       | (44.8      | )           | (38.5      | )          | (28.5       | )          |
| Amortization – inclusion of  future costs                                       | (h)                            |       | 8.7        |        | 8.1        |       | 2.1         |       |
| Exploration costs                                                                    | (j)                            |       | (101.8     | )           | (78.2      | )          | (80.9       | )          |
| Provision for rehabilitation                                                         | (l)                            |       | (8.9       | )           | (11.8      | )          | (0.8        | )          |
| Investments in affiliates                                                            | (m)                            |       | (2.8       | )           | —     |       | —      |       |
| Deferred stripping                                                                   | (o) (g) (h) (q) |       | (21.9      | )           | (9.2       | )          | (3.0        | )          |
| Inventory                                                                            | (q)                            |       | 2.3        |        | 0.3        |       | (1.5        | )          |
| Impairment of Agnew                                                                  | (r)                            |       | (39.0      | )           | (35.5      | )          | (34.4       | )          |
| ** **                                                                           | ** **                     | ** ** | **11.1**   | ** **  | **288.6**  | ** ** | **259.8**   | ** ** |
|                                                                                      |                                |            |            |             |            |            |             |            |  |  |  |

 

**Notes to the reconciliation of segment information to thehistorical financial statements**

 

----

| (a)    |   | Business  combination – formation of Original Gold Fields                                                                                                                                                                                                                                                                                                   |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | For  management reporting purposes, the formation of Original Gold Fields was  accounted for as a uniting-of-interests. Under US GAAP, the Company accounted  for the assets and liabilities acquired from Gold Fields of South Africa  Limited at historical cost, and the assets and liabilities acquired from  Gencor and outside shareholders as a purchase. |
|   |   |                                                                                                                                                                                                                                                                                                                                                             |
| (b)    |   | Business  combination – formation of Gold Fields                                                                                                                                                                                                                                                                                                            |
|   |   | For  management reporting purposes, the difference between the purchase price and  net asset value of acquired assets that arose on this transaction was set-off  against shareholders’ equity. Under US GAAP, the excess purchase price was  capitalized to property, plant and equipment and is being amortized over its  useful life.                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                             |
| (c)    |   | Business  combination – purchase of St. Ives and Agnew                                                                                                                                                                                                                                                                                                      |
|   |   | For  management reporting purposes, traded equity securities issued as  consideration in a business combination are valued on the date they are  issued. Under US GAAP, traded equity securities issued as consideration in a  business combination are valued a few days before and after the terms of the  transaction are announced.                          |

 

F-47

----

 
| (d)  |   | Business  combination – purchase of Abosso                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-----------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   | For  management reporting purposes, traded equity securities issued as  consideration in a business combination are valued on the date they are  issued. Under US GAAP, traded equity securities issued as consideration  in a business combination are valued a few days before and after the terms of  the transaction are announced.                                                                                                                                                                                                                                                                           |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| (e)  |   | Business  combination – acquired tax losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|      |   | For  management reporting purposes, for tax losses acquired which result  subsequently in deferred tax assets being recognized, the benefit is recorded  in income. Under US GAAP, when tax losses which have been acquired for  which deferred tax assets have been recognized, and against which a valuation  allowance has been recorded which is subsequently released, the release of  the valuation allowance recorded against deferred tax assets is first charged  against goodwill and any other intangible assets, with the remaining balance  of the valuation allowance release recognized in income. |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| (f)  |   | Impairment  of assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|      |   | For  management reporting purposes, higher impairment charges were recognized in  fiscal 2005 and 2004 based upon the higher values assigned to the assets  acquired as part of the Original Gold Fields formation, than that which was  recognized under US GAAP. In addition, prior to fiscal 2003, impairment  charges were recorded for management purposes based on discounted cash flows,  but not recorded under US GAAP, since the undiscounted cash flows exceeded  the carrying amounts of the assets under US GAAP.                                                                                         |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| (g)  |   | Amortization  of reserves                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |
|      |   | For  management reporting purposes, a portion of ore resources at the Australian  operations, based on the philosophy of “endowment”, is used for calculating  depreciation and amortization. Under US GAAP, depreciation and amortization  is calculated based upon existing proven and probable reserves.                                                                                                                                                                                                                                                                                                  |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| (h)  |   | Amortization  – inclusion of future costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
|      |   | For  management reporting purposes, future mine development costs are included in  mining assets in calculating depreciation and amortization. Under US GAAP,  future development costs are not included in the calculation of depreciation  and amortization.                                                                                                                                                                                                                                                                                                                                                         |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| (i)  |   | Revenue  recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
|      |   | For  management reporting purposes, prior to fiscal 2003, revenue was recognized  prior to title passing to the buyer. Under US GAAP, revenue is recognized  when the risks and rewards of ownership and title pass to the buyer under the  terms of the applicable contract and the pricing is fixed and determinable.                                                                                                                                                                                                                                                                                                |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| (j)       |   | Exploration  costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|      |   | For  management reporting purposes, exploration costs are capitalized from the  date the drilling program confirms sufficient evidence of mineralization to  proceed with a feasibility study. Under US GAAP, exploration costs are  capitalized from the date a bankable feasibility study is completed.                                                                                                                                                                                                                                                                                                              |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| (k)       |   | Share-based  compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |
|      |   | For  management reporting purposes share-based compensation is not recognized.  Under US GAAP, the Company recognizes share-based compensation expense for  the modification to the vesting conditions   of an employee’s share options, based upon the difference between the  option grant price and the market price at the date of modification.                                                                                                                                                                                                                                                         |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| (l)       |   | Provision  for rehabilitation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
|      |   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Method  of recognition |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | For  management reporting purposes, environmental rehabilitation costs are  provided for, based upon the net present value of the expected future  obligation and a corresponding asset is raised. Under US GAAP, prior to  fiscal 2003, environmental rehabilitation costs were provided for based on  the units-of-production method based on the expected ultimate rehabilitation  amount. |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
|      |   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Amortization  of rehabilitation asset |   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | The  rehabilitation asset’s carrying value for management reporting purposes is  different to that under US GAAP, which results in a different amortization  charge. |   |

 

F-48

----

 
|   |   | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Revisions  to the asset retirement obligation                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | For  management reporting purposes, all changes in the carrying amount of the  obligation are recognized in the income statement. Changes resulting from  revisions in the timing or amount of estimated cash flows are recognized as  an increase or decrease in the carrying amount of the asset retirement  obligation and the associated capitalized retirement cost for US GAAP.                                                                   |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | In  addition, the current discount rate is applied to measure the retirement  obligation for management reporting purposes. Under US GAAP any decreases in  the asset retirement obligation as a result of downward revisions in cash  flow estimates should be treated as a modification of an existing asset  retirement obligation, and should be measured at the historical discount rate  used to measure the initial asset retirement obligation. |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| (m)    |   | Investments in affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|   |   | For management reporting purposes an equity investment exceeding a  20% shareholding was treated as an  available-for-sale investment prior to fiscal  2003. Under US GAAP this investment was accounted for under the equity method  since acquisition.                                                                                                                                                                                                                                        |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| (n)    |   | Post-retirement medical benefits                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|   |   | For management reporting purposes, only the employer’s contribution  liability is accounted for. Under US GAAP, the liability includes certain  employees’ cross subsidy liabilities.                                                                                                                                                                                                                                                                                                      |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| (o)    |   | Deferred stripping                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
|   |   | For management reporting purposes, the Company defers the waste  stripping costs in excess of the expected average pitlife stripping ratio.  Under US GAAP waste stripping costs are considered costs of the extracted minerals  and recognized as a component of inventory to be recognized in costs  applicable to sales in the same period as the revenue from the sale of  inventory                                                                                                             |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| (p)    |   | Write-down of investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|   |   | Under US GAAP, were the fair value of available for sale  investments  are lower than their  original cost for a  continuous  period of longer than 12 months, the unrealized loss is recognized in the  consolidated statements of operations.  For management reporting purposes, the unrealized losses on these investments  have remained in other comprehensive income.                                                                                                          |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| (q)    |   | Inventory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|   |   | Under US GAAP additional amortization and waste normalization are  included in the cost of inventory produced.   No such absorption of costs occurred for management reporting  purposes.  Additionally, for management  reporting purposes, no adjustment is required to record inventory at net  realizable value. Under US GAAP, due to the impact of the amortization  adjustments on the inventory valuation, an adjustment is required to record  inventory at net realizable value. |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| (r)    |   | Impairment of Agnew                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|   |   | For management reporting purposes the Agnew mine was not determined  to be impaired. Under US GAAP the Agnew mine was determined to be impaired  and an impairment charge was recognized.                                                                                                                                                                                                                                                                                                       |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| (s)    |   | Mvelaphanda transaction                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |
|   |   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | classification of  instrument                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | For management reporting purposes the Mvela loan  is split between a debt component and an equity component. Under US GAAP the  Mvela loan is classified as debt.                                                                                                                                                                                                                                                                                       |   |
|   |   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | interest paid                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Due to the classification of the Mvela loan as  debt under US GAAP, additional interest is charged to the income statement.                                                                                                                                                                                                                                                                                                                             |   |
|   |   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | debt issuance cost                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | For management reporting purposes debt issuance  cost is set off against debt. Under US GAAP debt issuance cost is recorded as  a deferred cost within accounts receivable.                                                                                                                                                                                                                                                                             |   |
|   |   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | fair value hedge  accounting                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | For management reporting purposes only the  amortizing swap is treated as a fair value hedge in relation to the debt  component of the Mvela loan. Under US GAAP both the amortizing and accreting  swap are treated as a fair value hedge as the entire loan is classified as  debt.                                                                                                                                                                   |   |
|   |   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | Profit on close out of  hedge                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | For management reporting purposes the profit on  close-out of the interest rate swaps was accounted for in earnings at the  time the swaps were closed out.  Under  US GAAP the profit is deferred and amortized to earnings over the life of the  hedged item.                                                                                                                                                                                    |   |

 

F-49

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**Report of the Independent Registered PublicAccounting Firm**

 

**To the Board of Directorsand Shareholders of Gold Fields Limited**

 

We have audited theconsolidated balance sheets of Gold Fields Limited and its subsidiaries as ofJune 30, 2005 and 2004, and the related consolidated statements of operations,comprehensive income, cash flows and of changes in shareholders’ equity foreach of the three years in the period ended June 30, 2005 and have issued ourreport thereon dated December 9, 2005, included elsewhere in this Annual Reporton Form 20-F. Out audits also included the financial statement schedules listedin Item 19 of this Annual Report on Form 20-F. These financial statementschedules are the responsibility of the Company’s management. Ourresponsibility is to express as opinion on these financial statement schedules.

 

In our opinion, thefinancial statement schedules present fairly, in all material respects, theinformation set forth therein when read in conjunction with the relatedconsolidated financial statements. 

 

**PricewaterhouseCoopers Inc**

*Registered Accountants andAuditors*

*Chartered Accountants (SA)*

Johannesburg, Republic ofSouth Africa

December 9, 2005 

 

S-1

----

 

## **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, 2005** | ** ** | ** **                           | ** ** | ** **                           | ** ** | ** **                                     | ** ** | ** **    | ** ** | ** **                     | ** ** |
| Valuation allowance               |       | 37.0                                 |       | 1.4                                  |       | (2.2                                           | )          | —        |       | 36.2                           |       |
| **Year ended June 30, 2004** | ** ** | ** **                           | ** ** | ** **                           | ** ** | ** **                                     | ** ** | ** **    | ** ** | ** **                     | ** ** |
| Valuation allowance               |       | 34.2                                 |       | —                               |       | 2.8                                            |       | —        |       | 37.0                           |       |
| **Year ended June 30, 2003** | ** ** | ** **                           | ** ** | ** **                           | ** ** | ** **                                     | ** ** | ** **    | ** ** | ** **                     | ** ** |
| Valuation allowance               |       | 43.6                                 |       | —                               |       | 0.4                                            |       | (9.8          | )          | 34.2                           |       |
| **Year ended June 30, 2002** | ** ** | ** **                           | ** ** | ** **                           | ** ** | ** **                                     | ** ** | ** **    | ** ** | ** **                     | ** ** |
| Valuation allowance               |       | 45.5                                 |       | —                               |       | (0.1                                           | )          | (1.8          | )          | 43.6                           |       |

 

S-2

----

 

**Exhibits**

 

The following instruments and documents areincluded as Exhibits to this annual report.

 
| **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 3.1)                                                                                                                                                                                                                                                             |   |
| 2.2(†)                    |       |       | Articles of Association of Gold Fields  (included in Exhibit 3.2)                                                                                                                                                                                                                                                               |   |
| 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 Securities  Exchange South Africa 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                                                                          |   |
| 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 Commissioners, 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, FirstRand 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  Corp. Arrangement Agreement, dated December 1, 2005                                                                                                                                                                                                                                        |   |
| 4.24                           |       |       | The Gold Fields Limited 2005 Non-Executive  Director Share Plan, adopted November 17, 2005                                                                                                                                                                                                                                           |   |
| 4.25                           |       |       | The Gold Fields Limited 2005 Share Plan,  adopted November 17, 2005                                                                                                                                                                                                                                                                  |   |
| 8.1                            |       |       | Amended list of subsidiaries of the  registrant                                                                                                                                                                                                                                                                                      |   |
| 12.1                           |       |       | Certification of Chief Executive Officer                                                                                                                                                                                                                                                                                             |   |
| 12.2                           |       |       | Certification of Chief Financial Officer                                                                                                                                                                                                                                                                                             |   |

 

----

 
| **No.**                    | ** ** | ** ** | **Exhibit**                                                                                                                                                                               |   |
|----------------------------|------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| 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.                  |   |

 

----