Corporate

Clinic on the West Rand

Gold Fields completed construction of a healthcare facility that will operate as a public private partnership between KDC East (previously known as Kloof), the Westonaria Municipality and the Gauteng Department of Health. The new clinic was officially handed over to the Westonaria Municipality and the Gauteng Department of Health at a ceremony attended by the Department of Mineral Resources, Gauteng MEC for Health, Ntombi Mekgwe, and Gauteng Premier, Nomvula Mokonyane on 15 June.

The clinic, which cost Gold Fields approximately R4 million to build, is located in the Simunye development precinct and will provide much needed relief to the residents of Simunye Township and surrounding areas. The clinic will provide approximately 20,000 local residents access to a comprehensive range of services including dental health, trauma and emergency services, obstetrics and gynaecological services. Provisions have been made for an X-ray facility, lung function unit, laboratory and a dispensary.

Talas project

On 20 July, a wholly-owned subsidiary of Gold Fields completed the acquisition from Orsu Metals Corporation (“Orsu”) of its 40 per cent interest in the Talas gold-copper-molybdenum joint venture project (“Talas project”) for US$10 million. Gold Fields now owns 100 per cent of the Talas project.

Another wholly-owned Gold Fields subsidiary has agreed to subscribe, by way of private placement, for 25 million units of Orsu at a price of CAD$0.40 per unit (the “subscription”). Each unit will consist of one common share of Orsu and one-half of one common share purchase warrant. Each whole common share purchase warrant will be exercisable for a period of three years from the date of issue to acquire one common share of Orsu at a price of CAD$0.50. Completion of the subscription is conditional on Orsu obtaining from the Kazakh Government formal waiver of its pre-emptive right to acquire shares in Orsu and its consent to the issue and placement of new shares in Orsu pursuant to the subscription.

Heap leach facilities suspended

Gold Fields received a directive from the Environmental Protection Agency (EPA) of Ghana to stop discharging water from its heap leach facilities at Tarkwa. To comply with this directive, the operation of all heap leach facilities at Tarkwa was suspended from 16 July 2012 to 9 August 2012.

The new EPA directive requires that all water discharges from the mine’s heap leach facilities should be treated through a water treatment plant to reduce conductivity levels. Conductivity is a measure of the amount of dissolved salts in discharged water and is classified internationally as a non-toxic pollutant.

Gold Fields believes that Tarkwa was complying with the prescribed conductivity levels, but is nonetheless conducting further investigations to validate this. However, in pursuit of environmental best practice and world class environmental stewardship, and to comply with the directive, the Group has commissioned the construction of two water treatment plants at Tarkwa’s North and South heap leach facilities. The plants are expected to be operational by the end of 2012.

Tarkwa continued to engage with the EPA to reopen and operate the heap leach facilities while the water treatment plants are being built. On 9 August the EPA lifted the temporary suspension.

Silicosis

On 21 August 2012, a court application was served on Gold Fields and various of its subsidiary companies (Gold Fields) on behalf of three individual applicants purporting to represent a class of mine workers who were previously employed by or who are employees of Gold Fields and who allegedly contracted occupational lung diseases (the class).

This is an application in terms of which the court is asked to certify a class action to be instituted by the applicants on behalf of the class. According to the applicants, this is the first and preliminary step in a process, where if the court were to certify the class action, the applicants will, in a second stage, bring an action wherein they will attempt to hold Gold Fields liable for the occupational disease and the resultant consequences. The applicants contemplate in the second stage dealing with what they describe as common legal and factual issues regarding the claim arising for the entire class. If the applicants are successful in the second leg, they envisage that individual members of the class could later submit individual claims for damages against Gold Fields. The application does not identify the number of claims that will be instituted against Gold Fields or the quantum of damages the applicants may seek.

Gold Fields has 10 court days to decide whether to oppose the application and thereafter, in the usual course of action, a further 15 court days to file papers opposing the application. Gold Fields and its lawyers are busy studying the application and will in due course decide how to respond.

Dividend policy

During the quarter, Gold Fields restated its dividend policy. Previously, dividend payments were based on 50 per cent of earnings attributable to owners of the parent adjusted for impairments and after taking account of investment opportunities. This represented a dividend pay-out of approximately 32 per cent of normalised earnings over the past six years (refer table below). The new dividend policy is to pay a dividend of between 25 and 35 per cent of normalised earnings. Although this restatement would not have changed the quantum of the historical dividend pay-out, it prioritises the payment of a dividend from current cash flows and crystallises our position as the leading dividend payer in the industry.

The new policy would have resulted in similar dividend payments evidenced in the pay-out ratios in the table below for the past 5 years based on normalised earnings per share.

Cash dividend

In line with the company’s new dividend policy to pay a dividend of between 25 and 35 per cent of normalised earnings, the Board has approved and declared an interim dividend number 77 of 160 SA cents per ordinary share (gross) in respect of the six months ended 30 June 2012. The interim dividend will be subject to the new Dividends Tax that was introduced with effect from 1 April 2012. In accordance with paragraphs 11.17 (a) (i) to (x) and 11.17 (c) of the JSE Listings Requirements the following additional information is disclosed:

Shareholders are advised of the following dates in respect of the interim dividend:

Share certificates may not be dematerialised or rematerialised between Monday, 10 September and Friday, 14 September 2012, both dates inclusive.