06 August 2009 23:08
Gold Fields results: Nick Holland - CEO, Gold Fields
.....ALEC HOGG: Nick, we've been talking with the bankers this week - first Maria Ramos and then Mike Brown - about their write-offs. We'd expect that from bankers because they lend out money. You've had a massive write-off, though, as well, of R1.1bn on an operation called Rusoro. Give us the background.
NICK HOLLAND: Rusoro is the company that bought our Venezuelan assets that we owned a couple of years back, and we sold those assets for a combination of cash and shares. We got a sizeable cash component. But with Venezuela being what it is today, the political discount in that country is huge and, despite the fact that they've got some tremendous ore bodies, and they've got a good growth profile, we deemed it prudent to write the investment down to its market value.
ALEC HOGG: The share price of Rusoro has actually fallen.
NICK HOLLAND: It hasn't fallen. It's remained low. Last year we didn't take the impairment because it was fairly early on after the transaction, but given a sustained period of weakness we decided we needed to make the impairment. We believe that the inherent value of that operation is significantly higher, and I am sure that in time the potential will be realised.
ALEC HOGG: In time and a post-Chavez society?
NICK HOLLAND: Probably.
ALEC HOGG: But you did do well by selling when you sold.
NICK HOLLAND: Well, we did, because we did get in almost $200m in cash, so we did recoup a sizeable portion of our initial purchase of those assets, and then we took the shares, which is an option on the upside. And over time it's interesting to see what's going to happen. So it's a long-tem option on Venezuela. I don't think we should get too fixated about a book-entry write-down here. We could well get the value back in time.
ALEC HOGG: Nick Holland is the chief executive of Gold Fields.
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|aus der Diskussion:||RUSORO MINING|
|Autor (Datum des Eintrages):||XIO (07.08.09 23:03:01)|
|Beitrag:||74 von 250 (ID:37736835)|
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