GOLD FIELDS LIMITED - Category 2 Transaction Annou7 Nov 2016
GFI 201611070001A
Category 2 Transaction Announcement: Acquisition of 50% of Gold Road's Gruyere Gold Project

Gold Fields Limited
(Incorporated in the Republic of South Africa)
Registration Number 1968/004880/06)
JSE, NYSE, DIFX Share Code: GFI
ISIN: ZAE000018123

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO
OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF
THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

CATEGORY 2 TRANSACTION ANNOUNCEMENT: ACQUISITION OF 50% OF GOLD ROAD’S
GRUYERE GOLD PROJECT

1. Introduction

Gold Fields Limited (Gold Fields) (JSE, NYSE, DIFX: GFI) is pleased to
announce that it has, through its wholly-owned Australian subsidiary
Gruyere Mining Company Pty Ltd, agreed to acquire a 50% interest in ASX
listed Gold Road Resources Limited’s (ASX: GOR) (Gold Road) Gruyere Gold
Project (Gruyere) in Western Australia and to form a 50:50 unincorporated
joint venture over Gruyere (Gruyere Joint Venture) to develop, construct
and operate Gruyere. The acquired interest and Gruyere Joint Venture
includes the Gruyere, Central Bore, Attila/Alaric and other associated
deposits.

Gruyere is a large shear hosted porphyry gold deposit, with reserves of
3.5Moz and total resources of 6.2Moz. Gold Road’s drilling demonstrates
that mineralisation likely continues at depth beneath the planned pit
shell. The deposits at Central Bore (0.7Mt, 9.1g/t, 187koz) and
Attila/Alaric (5.3Mt, 1.64g/t, 270koz), could further add additional value
to the Gruyere development. Including these other ore sources, the JV has
total resources of 6.6Moz.

2. Description of the business carried on by Gold Road

Gold Road is pioneering development of Australia’s newest goldfield, the
Yamarna Belt, 200 kilometres east of Laverton in Western Australia. Gold
Road holds tenements covering 5,000km2 in the region, which is
historically underexplored and highly prospective for gold mineralisation.
These tenements contain a gold resource of 6.6Moz, including 6.2Moz at the
Gruyere deposit, which Gold Road discovered in 2013.

In addition to its retained 50% interest in Gruyere, Gold Road will
continue to explore for similar-scale deposits on its 100% owned North
Yamarna tenements and in conjunction with its joint venture partner,
Sumitomo Metal Mining Oceania (a subsidiary of Sumitomo Metal Mining Co.
Limited), on its South Yamarna tenements.

3. Particulars of the Proposed Transaction

Gold Fields will acquire a 50% interest in Gruyere for a total purchase
consideration of A$350 million payable in cash and a 1.5% royalty on Gold
Fields’ share of production after total mine production exceeds 2Moz with
an approximate value of A$15 million. The cash consideration will be
split, with A$250 million payable at completion and A$100 million payable
according to an agreed construction cash call schedule. The consideration
will be funded utilising existing cash resources in Australia.
The aggregate consideration comprises:

?   cash consideration of A$350 million, comprising A$250 million payable
    on completion of the transaction and A$100 million contributed by
    Gold Fields to fund Gold Road’s cash calls during the construction
    phase;
?   a 1.5% net smelter return (NSR) royalty on Gold Fields’ share of
    production from the Gruyere Joint Venture tenements, once total gold
    production exceeds 2Moz with an approximate value of A$15 million;

    Gold Fields will also contribute the following to the Gruyere Joint
    Venture in addition to contributions to construction cash calls):

    -   approximately A$50 million in the form of conditional assumed
        liability by Gold Fields for up to a 10% overrun (if any) on the
        Gruyere initial development program and budget as agreed between
        the parties;
    -   approximately A$75 million in funding support, in the form of a
        Gold Fields guarantee for any project-level bonding or guarantee
        requirements, to the extent required under the Gruyere Joint
        Venture;

4. Structure of the joint venture:

-   Gold Fields and Gold Road will establish a 50:50 unincorporated joint
    venture, the Gruyere Joint Venture, to develop and operate the
    Gruyere Gold Project, with both parties assuming responsibility for
    their respective share of post-feasibility study expenditure;
-   Gold Road will continue to manage the Gruyere Gold Project during a
    transition period of up to 6 months post completion, after which Gold
    Fields will become the manager on a ‘no profit / no loss’ basis,
    where a management fee will be payable to Gold Fields to recover
    certain overhead costs that are not recovered directly through joint
    venture cash calls (such costs to be estimated and then subject to
    periodic adjustment and review);
-   a Management Committee, a Technical Committee and a Steering
    Committee will be formed during the development and commissioning
    stages of the Gruyere Joint Venture. The committees will be
    responsible for providing oversight of Gold Fields, as the Manager,
    and approving key decisions including business plans and budgets;
-   Gold Road and Gold Fields will initially have the right to appoint
    three representatives each to the respective committees;
-   the initial Chairperson of the Gruyere Joint Venture will be
    appointed by Gold Road during the transition period, after which the
    right to nominate the Chairperson will rotate every 12 months, unless
    changed by supermajority vote. The Chairperson will not hold a
    casting vote;
-   pre-emptive rights will exist in relation to the transfer of all or
    part of a joint venturer’s interest to a non-affiliated party, except
    in relation to a change of control at the listed parent company
    level;
-   Gold Road will maintain an ability to process ore from its 100%-owned
    North Yamarna and 50%-owned South Yamarna tenements through the
    Gruyere processing plant under a conditional commercial tolling
    framework;
-       Gold Road will maintain access rights to the extensive infrastructure
        developed by the Gruyere Joint Venture, including the bore fields,
        gas pipeline, tailings dam, airstrip, roads, transport equipment,
        emergency equipment, communications infrastructure; and
-       Gold Road and Gold Fields have provided warranties and indemnities to
        each other that are standard for a transaction of this nature.
5. Rationale for the Acquisition

Australia is a key part of our business and our largest cash generator and
this deal enhances our portfolio and expands our exposure to a new and
emerging goldfield in Western Australia. Gruyere will add life, margin and
cash flow into what is already a strong region for Gold Fields and which
has proven its ability to integrate new operations with ease. We are
excited about partnering with Gold Road and are hopeful this is the start
of a multi-decade, mutually beneficial relationship and see significant
potential synergies in resourcing, intellectual property, procurement and
technical skills.

We believe this acquisition is extremely competitive on a per ounce basis,
when compared to similar recent deals globally, at A$200 (US$153) per
reserve ounce and A$113 (US$86) per resource ounce.

The Feasibility Study for Gruyere, which was completed in October 2016,
indicated the Project’s 3.5Moz reserve (6.2Moz resource) could support
average annualised production of 270koz for a 13-year life of mine (LOM).
All-in sustaining costs (AISC) over the LOM are expected to be A$945/oz
(US$690/oz) and all-in costs (AIC) of A$1,103/oz (US$805/oz), with
construction capital expenditure estimated at A$507 million. First
production from Gruyere is expected at the end of 2018/early 2019.

Reserves and Resources

Reserves
                  Tonnes       Grade   Contained gold
                    (Mt)       (g/t)            (Moz)
Proved              14.9        1.09             0.52
Probable            76.7        1.22             3.00
Total               91.6        1.20             3.52


Resources
                  Tonnes       Grade   Contained gold
                    (Mt)       (g/t)            (Moz)
Measured           13.86        1.18             0.53
Indicated          91.12        1.29             3.79
Inferred           42.73        1.35             1.85
Total             147.71        1.30             6.16

The full feasibility study for the Gruyere project was published by Gold
Road on 19 October 2016. Below are some of the salient features (on a 100%
basis):

    -    First gold at end-2018/early-2019
    -    Annual production: 270koz
    -    Life of Mine: 13 years
    -    AISC: A$945/oz (US$690/oz)
    -    AIC: A$1,103/oz (US$805/oz)
    -    Total capital cost: A$507m (US$370 million); A$514 million including
         escalation
    -    Tonnes mined: 30Mt pa for first 5 years, 44Mt pa for next 5 years
    -    Tonnes milled: 7.5Mt pa of fresh ore and up to 8.8Mt pa of oxide ore
    -    Head grade: 1.1g/t – 1.3g/t over LOM
    -    Recoveries: 91% – 94% over LOM
    -    Strip ratio: 2.8 including pre-strip (2.7 excluding pre-strip)

6. Condition Precedent

The acquisition is subject to the following conditions precedent to be
fulfilled on or before 90 days after the date of the Asset Sale Agreement:
        a.     Foreign Investment Review Board Approval: The Treasurer of the
        Commonwealth of Australia (Treasurer) either:

           (i)     ceases to be empowered to make an order under Part III of
              the Foreign Acquisitions and Takeovers Act 1975 (Cth) in
              respect of the acquisitions contemplated by the agreement; or

            (ii)    gives the Gold Fields advice in writing of a decision by,
               or on behalf of, the Treasurer that the Commonwealth Government
               has no objection to the acquisitions contemplated by the
               agreement (either unconditionally or on terms and conditions
               that are acceptable to Gold Fields, acting reasonably);
        b.     The Western Australian Government Mines Minister, or an officer
        of the Department of Mines and Petroleum providing written consent to
        Gold Fields in respect of the acquisition; and
        c.     written notice of the acquisition having been duly given to the
        native title party under Gold Road’s native title agreement, and the
        native title party not disputing Gold Fields’ financial and technical
        capacity as acquirer of an interest in Gruyere (or any such dispute
        having been resolved in accordance with the native title agreement.

7. Completion Date of the Acquisition

-       The completion date of the acquisition is the fifth business day
        after the conditions precedent have been fulfilled, as detailed in 5
        above.
8. Financial information
     As at the date of this announcement, the Gruyere Joint Venture has
     not been established, and the Gruyere Gold Project is still in a
     feasibility phase with construction due to commence shortly.
     Accordingly, the Gruyere Joint Venture has no producing assets and
     there are no profits attributable to assets

9. Classification of the Transaction
   The Acquisition is classified as a Category 2 transaction in terms of
   the Listing Requirements issued by JSE Limited.
10.      Conclusion

    Gold Fields is already one of the largest gold producers in Australia.
    This transaction provides Gold Fields with exposure to an emerging
    goldfield in Western Australia, further enhancing the group’s position
  in the region. Gruyere will add life and cash flow to a strategically
  important region for Gold Fields.


7 November 2016

Sponsor
JP Morgan Equities South Africa (Pty) Ltd.

Notes:

The Gold Road mineral information as well as information relation to the
Gold Road Feasibility Study is JORC 2012 compliant. The financial
information set out in this announcement has not been reviewed, or
reported on, by Gold Fields' auditors.



Forward Looking Statements

This announcement contains forward-looking statements within the meaning
of Section 27A of the U.S. Securities Act of 1933, as amended, or the
Securities Act, and Section 21E of the U.S. Securities Exchange Act of
1934, as amended, or the Exchange Act, with respect to Gold Fields’
financial condition, results of operations, business strategies, operating
efficiencies, competitive position, growth opportunities for existing
services, plans and objectives of management, markets for stock and other
matters. These forward-looking statements, including, among others, those
relating to the future business prospects, revenues and income of Gold
Fields, wherever they may occur in this report and the exhibits to the
report, are necessarily estimates reflecting the best judgment of the
senior management of Gold Fields and involve a number of risks and
uncertainties that could cause actual results to differ materially from
those suggested by the forward-looking statements. As a consequence,
these forward-looking statements should be considered in light of various
important factors, including those set forth in this report. Important
factors that could cause actual results to differ materially from
estimates or projections contained in the forward-looking statements
include, without limitation:
•     overall economic and business conditions in South Africa, Ghana,
  Australia, Peru and elsewhere;
•     changes in assumptions underlying Gold Fields’ mineral reserve
  estimates;
•     the ability to achieve anticipated efficiencies and other cost
  savings in connection with past and future acquisitions;
•     the ability to achieve anticipated cost savings at existing
  operations;
•     the success of the Group’s business strategy, development activities
  and other initiatives;
•     the ability of the Group to comply with requirements that it operate
  in a sustainable manner and provide benefits to affected communities;
•     decreases in the market price of gold or copper;
•     the occurrence of hazards associated with underground and surface
  gold mining or contagious diseases at Gold Field’s operations;
•     the occurrence of work stoppages related to health and safety
  incidents;
•     loss of senior management or inability to hire or retain employees;
•     fluctuations in exchange rates, currency devaluations and other
  macroeconomic monetary policies;
•     the occurrence of labour disruptions and industrial actions;
•     power cost increases as well as power stoppages, fluctuations and
  usage constraints;
•     supply chain shortages and increases in the prices of production
  imports;
•     the ability to manage and maintain access to current and future
  sources of liquidity, capital and credit, including the terms and
  conditions of Gold Fields’ facilities and Gold Fields’ overall cost of
  funding;
•     the adequacy of the Group’s insurance coverage;
•     the manner, amount and timing of capital expenditures made by Gold
  Fields on both existing and new mines, mining projects, exploration
  project or other initiatives;
•     changes in relevant government regulations, particularly labour,
  environmental, tax, royalty, health and safety, water, regulations and
  potential new legislation affecting mining and mineral rights;
•     fraud, bribery or corruption at Gold Field’s operations that leads
  to censure, penalties or negative reputational impacts; and
•     political instability in South Africa, Ghana, Peru or regionally in
  Africa or South America.

Gold Fields undertakes no obligation to update publicly or release any
revisions to these forward-looking statements to reflect events or
circumstances after the date of this report or to reflect the occurrence
of unanticipated events.

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