Hedging/Derivatives

The Group’s policy is to remain unhedged to the gold price. However, hedges are sometimes undertaken on a project specific basis as follows:

to protect cash flows at times of significant expenditure;
for specific debt servicing requirements; and
to safeguard the viability of higher cost operations.

Gold Fields may from time to time establish currency financial instruments to protect underlying cash flows.
Gold Fields has various currency financial instruments – those remaining are described in the schedule.

Position at end of March 2009

Western Areas US Dollars / Rand forward purchases

As a result of the US$551 million drawn down under the original bridge loan facility to settle mainly the close-out of the Western Areas gold derivative structure on 30 January 2007, US dollar/rand forward cover was purchased during the March 2007 quarter to cover this amount. During financial 2008, US$233 million of this loan was repaid and the forward cover was reduced to US$318 million to correspond with the loan amount outstanding. At 31 March 2009, the unrealised foreign exchange loss on the revaluation of the US$318 million loan was R720 million. This loss was offset by R720 million cumulative positive gains on the forward cover purchased at an original rate of R7.3279.

During the March quarter R88 million of forward cover costs were accounted for as part of interest, as this forward cover has been designated as a hedging instrument.

South Africa US Dollars / Rand forward sales

In October 2008, US$150 million of expected gold revenue for the December quarter was sold forward on behalf of the South African operations. In December 2008, the US$150 million was extended to the March quarter at an average forward rate of R10.3818. During the March quarter US$30 million was settled and the gain for the quarter was R12 million of which R7 million was accounted for in the income statement and the balance of R5 million in equity. The outstanding balance of US$120 million was extended into the June quarter at an average forward rate of R10.2595. At the end of March 2009 the marked to market value of the US$120 million forward cover was positive by R80 million (US$8 million).

Subsequent to the March quarter end the remaining forward cover of US$120 million was partly delivered into and the balance closed out, resulting in a gain of R51 million which will be accounted for in the income statement in the June quarter.

Australia US Dollars / Australian Dollars forward sales

In October 2008, US$70 million of expected gold revenue for the December quarter was sold forward on behalf of the Australian operations. In December 2008, US$56 million was extended to the March quarter at an average forward rate of A$0.6650. During the March quarter an additional US$8 million of instruments was taken out. The total of US$64 million was extended to the June quarter at an average forward rate of A$0.6445. The gain for the March quarter was A$1 million of which a loss of A$1million was accounted for in the income statement and a gain of A$2 million in equity.

Subsequent to the March quarter end the forward cover of US$64 million was partly delivered into and the balance closed out, resulting in a gain of A$3 million which will be accounted for in the income statement in the June quarter.

Ghana currency forward sales

During financial 2009, a South African rand forward cover was taken out to cover commitments of Gold Fields Ghana Ltd. Outstanding at the end of March 2009 were forward cover contracts of R4 million, with a final expiry on 31 July 2009.

The marked to market value for the outstanding contracts at the end of the March 2009 quarter was US$18,000.

Diesel Hedge

Ghana

The Ghanaian operations purchased four Asian style ICE Gasoil call options with strike prices ranging from US$0.90 per litre to US$1.11 per litre, which equates to a Brent crude price of between US$92 and US$142 per barrel, with final expiry on 28 February 2010.

The marked to market value for the above call options purchased was positive by US$0.1 million at the end of the March 2009 quarter.

Australia

The Australian operations purchased two Asian style Singapore 0.5 Gasoil call options with strike prices ranging from US$0.9128 per litre to US$1.0950 per litre with a final expiry on 28 February 2010.

The marked to market value for the above call options was negligible at the end of the March 2009 quarter.