In announcing gold reserves of 82,8-million ounces, 80% of which were in South Africa, Holland said that Gold Fields mines could not be replaced anywhere in the world at the current gold price of $820/oz, which indicated gold’s cur- rent unrealistically low price level.

Holland spoke after Gold Fields minerals head Tim Rowland put the resources of Gold Fields – as at June 30, 2008 – at 250,6-million ounces, which represented a 4% increase on resources 18 months ago, and said the company’s reserves were the world’s third-largest with 66,6-million ounces in South Africa.

“There’s not enough money today to replace the infras-tructure that exists today at Gold Fields,” said Holland, who earlier this month said the gold price could rise to $1 500/oz.

“If you tried to build these mines today, you would need a $2 000/oz gold price and higher to justify the invest-ment in all of these mines today.

“Replacement costs of all of the operations, whether it be South Deep, Kloof, Driefontein or Beatrix . . . you could not recoup your investment today at these prices.

“You could not build these facilities today anywhere, and that gives an idea of the gold price’s behaviour today in the face of reality,” he said.

In outlining the position at Gold Fields’ South Deep operation, Gold Fields’ South African opera- tions head, Vishnu Pillay, said that South Deep had 76-million ounces of resource and 29-million ounces of reserve.

He said that the application to South Deep of the normal Gold Fields guidelines that are used to distinguish between above cur-rent infrastructure and below current infrastructure had indicated that South Deep’s levels between 87 and 110 level were above current infrastructure, and the levels from 110 to 130 level were below current infrastructure.

“In essence, having done this, I feel comfortable in telling you that we actually acquired two mines for the price of one,” said Pillay.

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