Gold Fields Board reject talks with Harmony

The board of directors of Gold Fields today, 09 December 2004, rejected suggestions made in the media by Harmony that the two companies should enter into friendly discussions. It is the Board`s view that Harmony`s offer, with only 11.8% acceptances, has already been overwhelmingly rejected by Gold Fields` shareholders and does not merit any further discussion.

As currently structured, the offer:

• grossly undervalues Gold Fields;
• consists only of Harmony`s overvalued shares with no cash element; and offers no control premium.

Gold Fields Chief Executive Ian Cockerill said: `We don`t consider this offer to be the basis for serious discussion. The Harmony offer remains woefully short on value and takes no account of the value inherent in Gold Fields high quality asset base. On this basis the board believes it cannot recommend that our shareholders accept this offer. Instead, we believe shareholders should reject Harmony`s offer and protect value by keeping their Gold Fields shares. The termination of the IAMGold transaction in no way changes our view on the Harmony offer.`

The board does not believe that there is any basis for discussion until and unless:

• Harmony substantially increases its offer to reflect Gold Fields` value;
• Gold Fields shareholders receive Harmony`s independently audited reserves and resources statement, which Harmony promised to publish early in December 2004;
• Harmony consents to a comprehensive commercial due diligence on all of its assets, and in particular allows Gold Fields access to its reserves and life of mine plan; and
• All of Harmony`s loss-making and short-life shafts are excised from any proposal for discussion.

The board also notes that as of 8 December 2004, Harmony`s offer is at a 5.8% discount to Gold Fields` share price. Furthermore, since 18 October 2004, the offer has destroyed an aggregate of R16bn in market capitalisation for both Gold Fields and Harmony. In contrast, the gold price has risen USD18.54 per ounce or 4.4% in the same time period.

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