sibanye gold annual report 2012 - jse gold limited-2012...complex or kdc) and beatrix mines. the...

2012annual report

Sib

anye Go

ld A

nnual Rep

ort 2012

Travelling underground at Driefontein Gold Mine

KEY OPERATING STATISTICS 2012

KDC Beatrix Sibanye

Gold produced (kg) 29,078 8,981 38,059

Gold produced (000’oz) 935 289 1,224

Total cash cost (R/kg) 283,249 294,277 285,851

Total cash cost (US$/oz) 1,076 1,118 1,086

NCE (notional cash expenditure) (R/kg) 366,707 366,875 367,338

NCE (US$/oz) 1,393 1,393 1,395

NCE margin (%) 16 16 16

Mineral reserves (million oz) 10.1 3.4 13.5

Mineral resources (million oz) 65.8 8.4 74.2

Fatality injury frequency rate (FIFR) 0.15 0.25 0.17

1Sibanye Gold Annual Report 2012

Overview Page 2

Chairman’s statement Page 4

Chief executive officer’s report Page 6

Mineral Resource and Mineral Reserve overview 2012 Page 10

Corporate governance Page 12

Statement of responsibility by the Board of Directors Page 19

Corporate Secretary’s confirmation Page 19

Management’s discussion and analysis of the Group financial statements Page 20

Directors’ report 3

Share capital statement Page 37

Independent auditors’ report Page 38

Remuneration report Page 39

Accounting policies Page 46

Income statement Page 60

Statement of comprehensive income Page 61

Statement of financial position Page 62

Statement of changes in equity Page 63

Statement of cash flows Page 65

Notes to the annual financial statements Page 66

Operating and financial information by mine Page 107

Shareholders’ information Page 108

Administration and corporate information Page 109

Notice of the Annual General Meeting Page 110

Form of proxy Page 119

The audited financial statements for the year ended 31 December 2012 have been prepared by the corporate accounting staff of Sibanye Gold Limited headed by Pieter Henning, Vice President Corporate Finance. This process was supervised by Charl Keyter, the Group’s Chief Financial Officer.

Contents

2 Sibanye Gold Annual Report 2012

About SibAnye GoldSibanye Gold Limited (“Sibanye Gold” or “the Company”) is a producer of gold and a major holder of gold reserves in South Africa. The Company is primarily involved in underground and surface gold mining and related activities, including extraction, and processing. All of the Company’s operations are located in South Africa. Sibanye Gold, previously a wholly owned subsidiary of Gold Fields Limited (“Gold Fields”), owns Kloof, Driefontein (collectively the Kloof-Driefontein Complex or KDC) and Beatrix mines. The Company was separated from Gold Fields in February 2013 into an independent and publicly traded company. In regard to the report on sustainability, please refer to Gold Fields’ Integrated Annual Review 2012 on goldfields.co.za.

The Company has its ordinary shares listed on the Main Board of the List maintained by the JSE Limited (“JSE”) in terms of its stock exchange licence and its American Depositary Receipts on the New York Stock Exchange (“NYSE”).

The Company had gold Mineral Reserves of 13.5 million ounces and Mineral Resources of 74.2 million ounces as at 31 December 2012.

Overview

FoRwARd lookinG StAtementS

Certain statements in this document constitute “forward looking statements” within the meaning of section 27A of the US Securities Act of 1933 and section 21E of the US Securities Exchange Act of 1934.

Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements.

Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa and elsewhere; the ability to achieve anticipated efficiencies and other cost savings in connection with past and future

acquisitions, exploration and development activities; decreases in the market price of gold and/or copper; hazards associated with underground and surface gold mining; labour disruptions; availability, terms and deployment of capital or credit; changes in government regulations, particularly environmental regulations and new legislation affecting mining and mineral rights; changes in exchange rates, currency devaluations, inflation and other macro-economic factors; industrial action; temporary stoppages of mines for safety and unplanned maintenance reasons; and the impact of the HIV/AIDS crisis in South Africa.

These forward looking statements speak only as of the date of this document. The Company 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 document or to reflect the occurrence of unanticipated events.


Group operating statistics 2012 2011

Gold produced (kg) 38,059 45,005

Gold produced (000’ozs) 1,224 1,447

Total cash cost (R/kg) 285,851 220,224

Total cash cost (US$/oz) 1,086 949

Notional cash expenditure (“NCE”) (R/kg) 367,338 284,055

Notional cash expenditure (US$/oz) 1,395 1,224

Gold price (R/kg) 434,943 369,139

Gold price (US$/oz) 1,652 1,590

Operating profit (R’million) 5,680 6,752

Operating profit (US$’million) 694 935

Operating margin (%) 34 41

NCE margin (%) 16 23

Group sustainability statistics 2012 2011

Taxation and royalties paid (R’million) 1,394 486

Taxation and royalties paid (US$’million) 170 67

Employee wages and benefits (R’million) 5,791 5,591

Employee wages and benefits (US$’million) 707 774

Total employees (number) 38,436 38,263

Fatalities (number) 16 18

Lost time injury frequency rate (note 1) 6.90 6.71

Cyanide consumption (tonne) 3,395 3,224

CO2-e emissions (000’t) 3,878 4,094

Electricity consumption (MWh) 3,835,194 4,070,499

Water withdrawal (million litre) 64,788 49,197Socio-economic development spend (R’million) 909 282

Socio-economic development spend (US$’million) 110 39

Group financial statistics 2012 2011

Revenue (R’million) 16,554 16,613

Basic earnings# (c.p.s.) 407 350

Headline earnings# (c.p.s.) 407 350

Dividend declared* (c.p.s.) 100 331

Total assets (R’million) 19,698 18,492

Shareholders’ equity (R’million) (9,668) (11,970)

Cash and equivalents (R’million) 292 363

Cash from operating activities (R’million) 2,621 3,861

Cash utilised (R’million) (71) (673)

EBITDA (R’million) 5,680 6,752

Net debt@ (R’million) 3,928 (363)

Net debt@ EBITDA (ratio) 0.7 (0.1)

Net asset value per share#@ (Rand) 10.16 15.37

Average exchange rate (US$1=R) 8.19 7.22

Closing rate (US$1=R) 8.57 8.13# Based on 731.6 million shares.* Paid to Gold Fields based on 731.6 million shares.@ Excludes related party loans.Note 1: rate per million man hours worked.

for the year ended 31 December 2012


chairman’s statement

The unbundling by Gold Fields Limited (“Gold Fields”) and the resultant listing of Sibanye Gold on the JSE and the NYSE follows a turbulent period in the history of mining in South Africa. The tragic events at Marikana in August 2012, marked a low in relations between the industry business owners, management, the state, organised labour, communities and our employees. However, the socio-economic issues that contributed to these events appear to have been recognised by all the parties and we trust that we can collectively continue to work towards a basis for common accord that can prevent such unacceptable outcomes. We can only hope that last year’s events signalled a nadir in industrial and community relations and that, together, we can appropriately address the major issues that face this industry which remains so important to our country.

Importantly, with the growing appreciation of the role that businesses in South Africa have to play in addressing some of the broader socio-economic problems facing the communities we serve and from whom we source our employees, we also realise that we can’t be expected to attain a better outcome all on our own. We would hope that all parties (business, labour and the state) recognise the need for give and take in this process so that we can become the stable and attractive mining industry that will see South Africa restored to being the premier investor-preferred destination we know we should be.

From a macro-economic perspective, the global mining sector has faced significant headwinds in recent years. While there have recently been positive signs of a recovery in the United States of America, China remains the cornerstone on which increased demand for commodities is premised and the economic outlook in Europe remains fragile. Gold has risen at a compound annual growth rate of c.14% per annum over the last 12 years, an unprecedented

the historical leverage to the gold price that the shares offered has all but disappeared. Industry risks, in the meantime, including the growing threat of resource nationalism, more stringent environmental policies and the lack of skills, among others have increased and the discovery of high-quality new reserves has markedly slowed. Investors have, as a result, flocked to the ETF for low risk exposure to the rising gold price.

With this in mind, we believe that Sibanye Gold’s strategy and assets differentiate it and offer a unique opportunity in the gold industry; as a leveraged alternative to the ETF and for investors looking for an unrivalled dividend yield.

bull run, but continues to fulfil a role as a store of value and safe haven from economic crisis. While recent liquidation of Exchange Traded Funds (“ETF”) positions from record levels highlights the risk to the downside if liquidation picks up pace, Central Banks are increasingly acquiring gold as part of their portfolio diversification strategies. In a world with negative to low real interest rates, we believe the gold price will remain well supported.

In contrast to the metal, gold equities have lagged alternative investments in recent years, including the gold ETF. The global gold mining industry has struggled to control costs, and as these have risen,

Chairman: Sello Moloko


Africa following its unbundling by Gold Fields, and we have a unique opportunity to build a significant and proudly South African company. We believe that Sibanye Gold should not only be a leader in productivity and cost management but a model mining company and an example of inclusiveness and good corporate governance. We believe that Sibanye Gold must be a company that stakeholders want to be associated with, not only for the returns it may generate, but also for the way in which it conducts its business. Your new board and management team are excited about Sibanye Gold’s prospects and are committed to taking on this mandate.

Sibanye Gold: We are one!

sello moloko

Chairman

While the assets that Sibanye Gold operates are mature, they remain of the highest quality in terms of size and grade. An increased focus by management on costs and efficiencies at the mines should result in increased flexibility and, over time, better volumes than have currently been planned.

Sibanye Gold’s operations have been well maintained by Gold Fields and do not require significant additional capital to maintain production levels into the future. This should enhance already strong cash flows from these operations, which will support a dividend, which we believe will set a benchmark in the industry.

With some of the best assets in the industry, acquisitive growth is not a priority, with the focus instead on reviewing operating costs and stabilising the operations. That said, the unbundling has clearly given Sibanye Gold first mover advantage in the South African gold mining industry and it would be remiss of us not to utilise this position to pursue synergistic opportunities should they be identified.

The pursuit of Sibanye Gold’s commercial objectives will always be guided by our commitment to safe mining and our commitment to fulfil our obligations as a responsible corporate citizen. This ensures that our behaviour reflects our values and concern for all our stakeholders, including shareholders, employees, their families and the communities and environments in which we live and work.

In conclusion: Sibanye Gold has taken up an industry leading position in South

Mar 12Mar 11Mar 10Mar 09Mar 08Mar 07Mar 06Mar 05Mar 04Mar 03

ETF Holdings and Gold Price

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chief executive officer’s report

Dear Shareholder

welcome And intRoduction

At the outset I would like to welcome you as new shareholders of Sibanye Gold.

As you are aware, Sibanye Gold – previously a wholly owned subsidiary of Gold Fields (GFI Mining South Africa Proprietary Limited (“GFIMSA”)) and owning its more mature South African assets, Kloof, Driefontein and Beatrix – was spun out of Gold Fields and listed as a fully independent company on 11 February 2013 on both the JSE and the NYSE.

As anticipated, the share price since listing has been extremely volatile; opening on the JSE at R13.05 per share and trading as high as R17.50 per share in the first week, before falling to R12.85 per share in the beginning of the second week and subsequently recovering to R14.24 per share on 14 March 2013. With over 75% of Gold Fields’ shareholders before the unbundling being non-South African domiciled, there was always a chance that there would be a reconfiguration of

Volume traded

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11 M

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Share price (LHS) and cumulative value traded (RHS)

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■ Share price ■ Cumulative value traded

Source: Bloomberg

(R m

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Gold Fields geographic shareholder distribution

24%

49%

6% 4%

10%

2%

5%

■ United States■ South Africa■ United Kingdom■ France■ Singapore■ Rest of Europe■ Rest of World

Source: Gold Fields

* Sibanye Gold’s cumulative trading value has exceeded 50% of its market capitalisation in the first six weeks of trade.

Chief Executive Officer: Neal Froneman


portfolios on listing, and certainly, this appears to be the case. In the first four weeks approximately 50% of Sibanye Golds’ market capitalisation has traded. While we expect volumes to moderate in coming months as portfolio restructuring is completed, it is heartening to notice that despite significant selling pressure, a firm base appears to have developed at around R13.50 per share and we hope to build on this base by communicating a clear strategy and delivering on our operational goals.

FinAnciAl ReSultS FoR the yeAR ended 31 decembeR 2012

Given that Sibanye Gold was only unbundled from Gold Fields in February 2013, the financial information for the year ended 31 December 2012 contained in this annual report therefore reflects the last period that Sibanye Gold’s assets were operated and managed by Gold Fields. In future, the results will solely reflect Sibanye Gold’s strategic initiatives outlined below.

Importantly though, the 2012 financial results demonstrate the ability of Sibanye Gold’s assets to generate significant amounts of cash. Despite the impact of the illegal industrial action and a fire at KDC Ya Rona Shaft, the Group generated net earnings of R2,980 million for the year ended 31 December 2012, a 16% increase on the equivalent period in 2011. Importantly, 85% of the net earnings (R2,522 million) was generated in the six-month period ended 30 June 2012.

StRAteGic dRiveRS

Sibanye Gold’s strategy is focused on what we believe investors want from a gold equity investment. As such, Sibanye Gold has identified the following key strategic drivers and criteria:●● Leverage to the gold price by

remaining unhedged and including operating strategies which ensure that gold price increases flow through to the bottom line;

●● Optimising free cash flow (after all costs, capital expenditure and taxes) and using this as the key performance measure;

●● maintaining capital expedience and discipline – ensuring that capital spent generates the appropriate returns and that the balance sheet is optimally geared;

●● not pursuing growth for the sake of size, but only if that growth enhances cash flow and returns measured as earnings per share; and

●● rewarding shareholders by means of regular and meaningful dividends1 and where appropriate returning excess cash to shareholders through the declaration of special dividends.

Sibanye Gold management believes it is well positioned to deliver on this strategy by virtue of the quality, cash generative assets it owns and through the implementation of focused cost saving and productivity initiatives at its mines.

QuAlity lonG-liFe ASSetS

The Kloof, Driefontein and Beatrix Mines, despite having been in production for many years, remain high-quality, long-life assets as evidenced by the current Group reserve and resource base of 13.5 million and 74.2 million ounces, respectively. It is worth noting that the most recent Life of Mine (“LoM”) operational plans (as in the Sibanye Gold Pre-Listing Statement) have been directly derived from the stated reserves, which were calculated assuming a gold input price of R380,000 per kilogram (US$1,500 per ounce and R7.90/US$), and little to no future conversion of Mineral Resource to Mineral Reserve (and hence into the LoM plans) was assumed. Notably, of the 74.2 million ounce Mineral Resource, 22.3 million ounces is a Measured Mineral Resource (which indicates a high level of confidence) with an average grade of 11.9 grams per tonne. This reflects the high quality of the assets and the potential to extend the lives of these operations by bringing them to account as Mineral Reserves in the LoM plans.

The measured resource contains a significant surface tailings resource of 2.9 million ounces, which could be brought to account following the conclusion of a pre-feasibility study in mid-2013 as well as 2.1 million ounces of remnant pillar resource, which was excluded by Gold Fields from Mineral Reserves in 2008. These high-grade pillar resources are currently being reviewed and if deemed safe to extract, may be included in the Mineral Reserve statement in future. The size and quality of the Mineral Resource also suggests that there is an opportunity to address the historical and projected declining production profiles, which have largely been a function of sharply rising costs in recent years.


chief executive officer’s report continued

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opeRAtinG StRAteGy: Reduce coStS, incReASe eFFiciencieS And volumeS mined

Sibanye Gold’s operating strategy is focused in the near term on reducing costs with a view to reducing mining paylimits (or the breakeven grade at which one can mine assuming specific parameters), which is necessary to improve mining flexibility and extend the lives of the operations.

Management has initiated a detailed six-month review of the entire group, with a view to rightsizing the organisation to current and longer-term sustainable production levels. Particular attention is being paid to unnecessary corporate overhead structures and costs, with shared and commercial services functions being streamlined, operational management levels being reduced and regional and corporate functions being combined, all of which should result in improved operational focus and efficiencies.


Safety will remain an imperative and Sibanye Gold will continue with practices initiated by Gold Fields, such as the use of in-stope netting and roof bolting which have yielded tangible improvement in safety statistics.

A benchmARk dividend yield

Sibanye Gold is committed to a dividend policy*, as outlined in the pre-listing statement, which is based on paying 25% to 35% of normalised earnings to shareholders, which at current share prices will result in Sibanye Gold having one of the highest industry dividend yields globally. Recognising the cash generative nature of the assets, and relatively limited capital demands, where appropriate, the Group will also consider returning excess cash back to shareholders through the declaration of special dividends. It is the Group’s intention to become a benchmark dividend payer.

in concluSion

I am confident that the implementation of Sibanye Gold’s near term strategy of reducing costs and refocusing on our core business of safe, efficient, quality mining, will result in Sibanye Gold’s high-quality, long-life assets delivering on the potential inherent in them. The successful and sustainable development of this Company is in the interest of all stakeholders and recognition of this, will enable us to successfully realign the operations to ensure longer operating lives, at higher production levels than currently forecast. This will enable us to continue to provide employment, to contribute to the fiscus of South Africa and develop our communities for many more years to come. The management team at Sibanye Gold is excited by the opportunity and we look forward to reporting on progress on the strategy outlined above.

nJ froneman

Chief Executive Officer

The focus in the longer term will be to improve operational productivity and efficiencies and increase volumes, which requires a more detailed focus on rock breaking and the quality of mining, investigating the potential for the extraction of secondary reefs, re-assessing the high-grade pillars and reviewing the old gold accumulations. All operation practices and norms are being reviewed and tested including shift scheduling and other work arrangement revisions. Once management has identified areas for improvement, remedial action will take place and revised targets will be incorporated in new plans which will be reported to the market within the next six months.

Previous experience has shown, that by lowering overhead costs (and hence mining paylimits), existing resources which were previously not economically viable to extract, can be brought to account at a profit, creating additional face length (and hence higher production) at a relatively low capital cost.

Operating strategy

SibanyeGold

Increase�exibility

Increasemargins

OptimiseALL capitalincluding balance

sheet

Strong cash�ows

Robustdividends

Reduce costs and paylimits

Premium rating

Strategic review complete by June 2013 with 18-month turnaround

5.0

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Impact of in-stope netting and roof bolting

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* Sibanye Gold has inherited Gold Fields’ dividend policy of returning 25% to 35% of normalised earnings’ to shareholders



mineraL Resource and Mineral Reserve overview 2012

coRpoRAte GoveRnAnce

The Mineral Resource and Mineral Reserve statement is compliant with the South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves (“SAMREC”) 2007 Code, the updated section 12 of the JSE Listings Requirements. This statement has been externally audited by SRK Consulting, and found to be compliant with the relevant codes.

The commodity prices used for the Mineral Reserve declaration are in accordance with the United States Securities and Exchange Commission (“SEC”) guidelines and approximate the historical two- to three-year average commodity prices. As such, a gold price of R380,000/kg has been used. The Mineral Resource gold price of R420,000/kg has a premium of 10% over the Mineral Reserve metal price.

The Mineral Resources and Mineral Reserves are estimates at a point in time and will be affected by fluctuations in the gold price, US Dollar currency exchange rates, costs, mining permits, changes in legislation and operating factors. All figures are managed and Mineral Resources are reported inclusive of Mineral Reserves and stability pillars. Although all permits may not be finalised and in place at the time of finalising this statement, there is no reason to expect that these will not be granted.

Sibanye Gold is committed to integrity and dependability in reporting, compliance with public and internal regulatory codes and to informing all stakeholders on the status of the Company’s fundamental asset base. The Company further aims to report on information that is deemed important to a level of detail that ensures completeness, transparency and materiality.

intRoduction

This statement outlines the Sibanye Gold Mineral Resources and Mineral Reserves at each of its operating mines as at 31 December 2012. It compares to the last full declaration made at 31 December 2011 and therefore includes a 12-month production depletion period. The Mineral Resources and Mineral Reserves are underpinned by appropriate Mineral Resource Management processes and protocols that ensure adequate corporate governance.

A comprehensive review of the Company’s Mineral Resources and Mineral Reserves as at 31 December 2012, including locality and mine infrastructure plans of all operations, is available in the Mineral Resources and Mineral Reserves Overview and Technical Short Form Reports that accompany the annual report. These may also be downloaded from the Sibanye Gold website, www.sibanyegold.co.za.

However, the time taken for permit approval may impact schedules. All financial models used to determine the Mineral Reserves are based on current tax regulations at 31 December 2012.

The respective operation-based Mineral Resource Managers are the Competent Persons designated in terms of SAMREC and take responsibility for the reporting of Sibanye Gold’s Mineral Resources and Mineral Reserves. Corporate governance on the overall compliance of these figures has been overseen and consolidated by Kevin Robertson, the current head of Mine Planning and Mineral Resource Management for Gold Fields Limited.

mineRAl ReSouRceS And mineRAl ReSeRveS oveRview

Sibanye Gold has total gold Mineral Resources of 74.2 million ounces (December 2011: 78.8 million ounces) and gold Mineral Reserves of 13.5 million ounces (December 2011: 21.5 million ounces) net of production depletion.

mineral Resources mineral Reserves

31 december 2012 dec 2011 31 december 2012 dec 2011

Operationtonnes

(mt)Grade

(g/t)Gold(moz)

Gold(moz)

tonnes(mt)

Grade(g/t)

Gold(moz)

Gold(moz)

Beatrix 48.9 5.4 8.434 11.276 28.0 3.7 3.357 4.958

Driefontein (KDC West) 186.9 4.0 23.757 26.657 23.5 5.8 4.369 7.823

Kloof (KDC East) 371.0 3.5 42.055 40.839 37.8 4.8 5.804 8.754

Total Sibanye Gold operations 606.6 3.8 74.246 78.772 89.2 4.7 13.530 21.535Rounding-off of figures may result in minor computational discrepancies; where this happens it is not deemed significant.The West Wits Tailings Treatment Project (“WWTTP”) is included in the Mineral Resources above.


opeRAtionAl SummARy

The Mineral Resource base has decreased by 4% net of depletion, primarily because of the increase in prevailing pay limits, which reflect an increase in mining and processing costs. The total Mineral Reserves has decreased by 21% – excluding West Wits Tailings Treatment Project (“WWTTP”) gold of 2.9 million ounces – net of mined depletion. The Mineral Resources include the WWTTP, which was excluded from the Mineral Reserves pending the finalisation of a pre-feasibility study, which is currently in the process of being updated.

The increase in the gold price used for estimation has been offset by the general increase in working costs, decrease in production volume and mining quality factors, which have negatively impacted the overall Mineral Resource and Mineral Reserve numbers declared.

Beatrix

The Beatrix Operation has three operating shafts and two processing plants. The mine is a low-cost, highly productive asset that is positioned for positive returns over the medium to long term, with Mineral Resources of approximately 8.4 million ounces and Mineral Reserves of approximately 3.4 million ounces. Year-on-year changes in the Mineral Reserves are mainly due to specific exclusions (mainly at 4 Shaft), a decrease in value and Mine Call Factor (“MCF”), and a decrease in surface sources.

Driefontein

The Driefontein Operation, with its seven operating shafts and three processing plants, is a high-yield, medium to long term operation with Mineral Resources of approximately 23.8 million ounces and Mineral Reserves of approximately 4.4 million ounces post-depletion. Year-on-year changes in the Mineral Reserves are mainly as a result of the exclusion of 1.3 million ounces of the WWTTP, as well as a decrease in value and the MCF.

Kloof

The Kloof Operation has five operating shafts and three processing plants and is a high-yield medium- to long-term operation that is fundamental to continued positive cash flow. It has Mineral Resources of approximately 42.1 million ounces and Mineral Reserves of approximately 5.8 million ounces. The year-on-year changes are mainly due to the exclusion of the below-infrastructure project at 4 Shaft (0.35 million ounces) and the WWTTP (1.62 million ounces). The Mineral Reserves were also affected by a decrease in value and the MCF.

Year-on-year reconciliation

Mineral Reserves reconciliation

Beatrix Driefontein WWTTPKloof

8

6

4

2

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(Go

ld M

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4.4

6.5

5.8

7.1

0.0

5.0

3.4

■ December 2011 (Total 21.5 Moz)■ December 2012 (Total 13.5 Moz)

2.9

5 50

0

Mineral Resources reconciliation

Beatrix Driefontein WWTTPKloof

50

40

30

20

10

0

22.225

.1

39.8

38.6

3.7

3.7

11.3

8.4

■ December 2011 (Total 78.8 Moz)■ December 2012 (Total 74.2 Moz)

(Go

ld M

oz)

Mineral Reserves (13.5 Moz)

43%

32%

25%

■ Beatrix 3.4 Moz■ Driefontein 4.4 Moz■ Kloof 5.8 Moz

Mineral Resources (74.2 Moz)

54%

30%

11%5%

■ Beatrix 8.4 Moz■ Driefontein 22.2 Moz■ Kloof 39.8 Moz■ WWTTP 3.7 Moz

Ounces per operation and the wwTTP


key StAndARdS And pRincipleS

Sibanye Gold is committed to high standards of corporate governance. The foundations for these standards were instilled in the Company as a member of the Gold Fields Group prior to the unbundling. For the period under review, the Company, as a wholly owned subsidiary of Gold Fields, did not directly apply the principles contained in South Africa’s King III Code of Corporate Governance and King Report (“King III”), but indirectly complied with the principles set out in King III as a member of the Gold Fields Group. In this regard the Gold Fields board of directors adopted the recommendations on good corporate governance contained in King III and implemented the King III principles and recommendations across the Gold Fields Group, with the exception of the King III principle which recommends that employment contracts should not compensate executives for severance because of change of control, although this does not preclude payments for retaining key executives during a period of uncertainty. The employment agreements in relation to the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) of Sibanye Gold have a provision for payments as a result of change of control. These employment agreements were, however, entered into before the unbundling and on the same basis as the senior executives in Gold Fields are employed. The relevant Gold Fields employment contracts were entered into before the guiding King III principle became effective.

All 75 principles contained in King III are recorded in the governance register on Sibanye Gold’s website detailing specific adoption and compliance therewith. All specific governance requirements contained in the JSE Listings Requirements were complied with for the 2012 financial year by the Gold Fields Group which are fully dealt with in the Gold Fields Limited Integrated Annual Review.

cOrPOraTe governance

On 11 February 2013 the Company listed its ordinary shares on the JSE in terms of its stock exchange licence and its American Depositary Receipts on the NYSE. The primary listing on the JSE means that the Company is subject to the JSE Listings Requirements including certain aspects of King III. The trading of the shares on NYSE and registration with the SEC means that the Company is subject to relevant NYSE disclosure and corporate governance requirements, as well as the terms of the Sarbanes-Oxley Act, 2002.

Pursuant to South Africa’s Companies Act No 71 of 2008, as amended (“Companies Act”) the Company implemented a new Memorandum of Incorporation (“MOI”) (which replaced the previous Articles of Association). This was approved at a shareholder meeting held on 21 November 2012. The key changes in the MOI compared to the Articles of Association include the following:●● The Company may now deliver

notices, documents, records or statements by, inter alia, electronic communication. Previously share-holders had to receive written documents by postal delivery.

●● Shareholders’ meetings must be held in person and may not be held by means of a written resolution as contemplated in section 60 of the Companies Act. Provision is also made for shareholders to participate in meetings by electronic communication.

●● Establishment of a Social and Ethics Committee.

The Company is in the process of ensuring that all the MOI of its subsidiaries are harmonised by the deadline date of 1 May 2013.

The Company has a Code of Ethics and commits its directors, officers and employees to conducting business in an ethical and fair manner and promoting a socially and environmentally responsible culture. It meets with relevant requirements from King III and is aligned with relevant US legislation (including the Sarbanes-Oxley Act (2002), Dodd-Frank Act (2010) and Foreign Corrupt Practices Act

(1977), the UK Bribery Act (2010), the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (1997), the UN Convention against Corruption (2003) and South Africa’s Prevention and Combating of Corrupt Activities Act (2004). The Board’s Audit Committee is tasked with ensuring the consistent application of, and adherence to the Code of Ethics.

The Company has an anonymous ethics line to allow its employees, suppliers and customers to report any irregularities and misconduct without fear of victimisation.

Sibanye Gold has established policies and procedures dealing with HIV/AIDS in the workplace and has a voluntary testing programme that has resulted in high proportions of the workforce taking ownership of their HIV/AIDS status and, together with management assistance, through independent service providers obtaining the necessary counselling and antiretroviral treatment. During the period under review, the Company undertook corporate social investment activities in a number of forms, namely:●● annual donations to charities

nominated by the staff; and●● participation in the Gold Fields

Corporate Social Investment Programme and Initiatives.

Board of Directors

The Sibanye Gold Board of Directors (“the Board”) is the highest governing authority of the Company. In terms of the MOI the number of directors shall not be less than four and not more than 15. The Board comprises 10 directors of whom two are executive directors and eight are independent non-executive directors. Advised by the Nominating and Governance Committee, the Board ensures that the election of independent non-executive directors falls on reputable persons of well-known competence and experience, who are willing to devote a sufficient part of their time to the Company. The role of non-executive directors, who are independent of management, is to protect shareholders’ interests, including those of minority shareholders.


The Board of Directors’ Charter articulates the objectives and responsibilities of the Board (see below). Likewise, each of the Board sub-committees operates in accordance with written terms of reference, which will be regularly reviewed by the Board. The Board takes ultimate responsibility for the Company’s adherence to sound corporate governance standards and sees to it that all business judgements are made with reasonable care, skill and diligence.

The Board is kept informed of all developments at the Company, through the executive directors and the Company secretary.

The roles of the Chairman of the Board and the CEO are kept separate.

On 9 November 2012 Mr MMC Mutloane resigned as a director of the Company and Mr C Keyter was appointed as a director with effect from 9 November 2012.

At a shareholder’s meeting held on 21 November 2012, the following persons who were eligible and available for election/re-election were appointed as follows with effect from 1 January 2013:

●● Mr NJ Froneman was elected as a director and appointed as CEO of the Company;

●● Mr C Keyter was re-elected as a director and appointed as CFO of the Company;

●● Mr MS Moloko was elected as an independent non-executive director and Chairman of the Company;

●● Mr KA Rayner was elected as an independent non-executive director and chairman of the Audit Committee; and

●● Mr RP Menell and Mr JS Vilakazi were elected as independent non-executive directors and as members of the Audit Committee.

On 21 February 2013 four additional directors were appointed. They are eligible and available for election and were appointed as follows:

●● Messrs TJ Cumming and BE Davison appointed as non-executive directors; and

●● Mr NG Nika and Ms SC van der Merwe were appointed as non-executive directors and members of the Audit Committee.

The current membership of all the Board sub-committees is disclosed on pages 17 and 18.

Messrs NJ Holland, SM Govender, KFL Moabelo and PL Turner resigned as directors of the Company with effect from 31 December 2012.

The Board is required to meet at least four times a year. The Board held its first Board meeting on 8 February 2013 and all the Board members at the time attended.

remuneration

The remuneration of non-executive directors is recommended to the shareholders by the Board after receiving external advice. The directors’ fees must be approved by shareholders at the annual general meeting of the Company for the ensuing year.

Non-executive directors only receive remuneration that is due to them as members of the Board. Directors serving as members on Board sub-committees receive additional remuneration.

Details of the directors’ remuneration packages as well as those of the Prescribed Officers are disclosed in the Remuneration Report on page 39.

monitoring of performance

In line with recommendations by King III, the Board will carry out a rigorous evaluation of the independence of directors. The Chairman is appointed on an annual basis by the Board and with the assistance of the Nominating and Governance Committee, a rigorous review of the Chairman’s performance and independence will be carried out during 2013.

No performance assessment was undertaken during the year under review as the Company was a wholly owned subsidiary of Gold Fields.

rotation and retirement from the Board

In accordance with the MOI, one third of the directors shall retire from office at each annual general meeting. The first to retire are those directors appointed as additional members of the Board followed by the longest serving members. Retiring directors can be immediately re-elected by the shareholders at the annual general meeting. The Board, assisted by the Nominating and Governance Committee, can recommend the eligibility of retiring directors (subject to availability and their contribution to the business) for re-appointment.

Board of Directors’ charter

The Board reviewed and approved the Board of Directors’ Charter to align it to the recommendations of King III. The Board of Directors’ Charter compels directors to promote the vision of the Company, while upholding sound principles of corporate governance. Directors’ responsibilities under the Charter include:●● determining the Company’s Code of

Ethics and conducting its affairs in a professional manner, upholding the core values of integrity, transparency and enterprise;

●● evaluating, determining and ensuring the implementation of corporate strategy and policy;

●● determining compensation, develop-ment, skills development and other relevant policies for employees;

●● developing and setting best practice disclosure and reporting practices that meet the needs of all stakeholders;

●● authorising and controlling capital expenditure and reviewing investment capital and funding proposals;

●● constantly updating the risk man-agement systems, including settling management expenditure authorisation levels and exposure limit guidelines;


career as a management trainee at Anglo American Corporation of South Africa and worked on a variety of gold and diamond mines including being Resident Engineer at Anglo American Corporation’s gold mines in Welkom.

barry e davison (67). BA (Law and Economics), University of the Witwaters-rand, Graduate’s Commerce Diploma, Birmingham University, United Kingdom, CIS Diploma in Advanced Financial Management and an Advanced Executive Programme, University of South Africa. Mr Davison was appointed a non-executive director effective 21 February 2013. Mr Davison has more than 40 years’ experience in the mining industry and has served as Executive Chairman of Anglo American Platinum, Chairman of Anglo American plc’s Ferrous Metals and Industries Division and Executive Director of Anglo American plc. He was a director of a number of listed companies including Nedbank Group Limited, Kumba Resources Limited, Samancor Limited and the Tongaat-Hulett Group Limited.

m Sello moloko (47). BSc (Honours) and Postgraduate Certificate in Education, University of Leicester, Advanced Management Programme, Wharton. Chairman of the Board. Mr Moloko was appointed the Non-Executive Chairman of the Board effective 1 January 2013. Prior to this, Mr Moloko served as a director of Gold Fields effective from 25 February 2011 and resigned as a director on 31 December 2012. He is the executive Chairman and founder of Thesele Group and Chairman of Alexander Forbes Group. He has an extensive career in financial services, including stints at Brait Asset Managers and Old Mutual, where he was CEO of Old Mutual Asset Managers until 2004. Mr Moloko’s other directorships are Sycom Property Fund and Acucap Limited. He is Chairman of the Nelson Mandela Foundation Investment Committee.

cOrPOraTe governance (continued)

nkosemntu G nika (54). BCom, BCompt (Honours), CA(SA) and Advanced Management Programme, INSEAD. Mr Nika was appointed a non-executive director effective 21 February 2013. Mr Nika is currently an independent non-executive director of Scaw South Africa Proprietary Limited, ConvergeNet Holdings Limited and Chairman of the Audit and Risk Committee of Foskor Proprietary Limited. He was previously CFO and Finance Director of PetroSA (SOC) Limited and Executive Manager: Finance at the Development Bank of Southern Africa. He has held various internal auditing positions at Eskom, Shell and Anglo American Corporation Limited. He was also a non-executive board member of the Industrial Development Corporation and chaired the Board Audit Committee, and Governance and Ethics Committee.

keith A Rayner (56). BCom, CTA, CA(SA). Mr Rayner was appointed a non-executive director effective 1 January 2013. Mr Rayner is a Chartered Accountant with experience in corporate finance. He is CEO of KAR Presentations, an advisory and presentations corporation, which specialises in corporate finance and regulatory advice. Mr Rayner is an independent non-executive director of Goliath Gold Limited, Sabi Gold Limited and John Daniel Holdings Limited. He is a member of the JSE Limited’s Issuer Regulation Advisory Committee. He was a member of the committee that wrote the Takeover Regulations in the Companies Act. He is a non-practising member of the South African Institute of Stockbrokers, a Fellow of the Institute of Directors, and a current and previous member of various SAMREC and SAMVAL working groups and a previous member of the Accounting Practices Committee.

Richard p menell (57). BSc (Honours) and BA (Honours), MA (Natural Sciences, Geology) Trinity College, Cambridge UK, MSc (Mineral Exploration and Management), Stanford University, California. Mr Menell was appointed a non-executive director effective 1 January 2013. Mr Menell has been a director of Gold Fields since 8 October 2008.

●● reviewing executive succession plan-ning and endorsing senior executive appointments, organisa tional changes and general remuneration policies. In this regard the Board will be guided by the Remuneration Committee as well as the Nominating and Governance Committee.

The Board considers that this Annual Report complies in all material respects with the relevant statutory requirements of the various regulations governing disclosure and reporting by Sibanye Gold and that the annual financial statements comply in all material respects with International Financial Reporting Standards (“IFRS”), the SAICA Financial Reporting Guides as issued by the Accounting Practice Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the Companies Act and the JSE Listings Requirements. As such, the Board approves the content of the Annual Report 2012, including the annual financial statements.

independent non-executive directors

timothy J cumming (55). BSc Engineering (Honours), University of Cape Town and BA (Oxon) (PPE) and MA (Oxon), Oxford University, United Kingdom. Mr Cumming was appointed a non-executive director effective 21 February 2013. Mr Cumming is the founder and partner of Scatterlinks, a South African-based company offering mentoring and coaching to senior business executives as well as strategic advisory services to financial services businesses. He was previously involved with the Old Mutual Group as CEO of the OM Investment Group SA, Executive Vice president – Director of Global Business Development of Old Mutual Asset Management (USA), Managing Director – Head of Corporate Segment of Old Mutual (South Africa), Strategy Director of Old Mutual (Emerging Markets) and Interim CEO of Old Mutual Investment Group (South Africa). He was also Executive Director and Head of Investment Research (Africa) for HSBC Securities. Mr Cumming started his


Resources Director for Africa and Levant at Cisco Systems, the IT Group from 2008 to 2010. Prior to Cisco Systems he was the Human Resources Director for Standard Bank overseeing the Global Personal and Business Banking, Credit and Support Services from 2005 to 2008. Mr Moabelo has extensive human resources experience within the mining and energy industries, having also worked for Anglo Platinum between 1999 and 2005 and Eskom, respectively.

Soobramoney m Govender (51). Vice President, Commercial Services of Gold Fields. Mr Govender joined Gold Fields in February 2007 as Vice President, Commercial Services. He has extensive experience within auditing, financial management, outsourcing, sales and consulting. Mr Govender implemented the Shared Services model at Gold Fields and his skills and competence is highly regarded in the Shared Service discipline external to Gold Fields. Prior to joining Gold Fields he held a senior position at South African Breweries.

morapedi m mutloane (39). Vice President, Human Resources for the South Africa Region of Gold Fields. Mr Mutloane joined Gold Fields in 2008 as Vice President, Human Resources for the South Africa Region. Mr Mutloane has extensive experience in senior manage ment human resources positions and has specialised in training and development, industrial relations and talent management. Prior to joining Gold Fields, Mr Mutloane was a senior human resources manager at De Beers and has also held senior positions at Standard Bank and Lonmin.

Mr Vilakazi was Managing Director of the Black Management Forum. In 2009, Mr Vilakazi was appointed to the Presidential Broad-Based Black Economic Empowerment Advisory Council and in 2010 was appointed as a Commissioner of the National Planning Commission. He was appointed Public Service Commissioner in 1999 and has played a critical role in shaping major public service policies in the new South Africa. He is the chairman of the Mpumalanga Gambling Board, Mpumalanga Economic Growth Agency and the State Information and Technology Agency, or SITA. He is the non-executive chairman of Netcare Limited and holds non-executive directorships in Goliath Gold Limited, Blue Label Telecoms, General Health Group (UK) and Palama Investments.

former directors

The former directors, who resigned effective 31 December 2012 (except for Morapedi M Mutloane who resigned effective 9 November 2012), are set out below.

nicholas J holland (54). BCom, BAcc, Witwatersrand; CA(SA). Executive director and CEO of Gold Fields. Mr Holland has been an executive director of Gold Fields since 14 April 1998 and became CEO on 1 May 2008. He served as executive director of finance of Gold Fields from April 1998. On 15 April 2002, his title changed to CFO until 30 April 2008. Mr Holland has more than 30 years’ experience in financial management and over 22 years of experience in the mining industry. Prior to joining the Gold Fields Group, he was Financial Director and Senior Manager of Corporate Finance of Gencor Limited. He was also a director of Rand Refinery Proprietary Limited.

kgabo Fl moabelo (42). BAdmin (Honours) in Industrial Psychology, MSc in Engineering Business Management, University of Warwick. Executive Vice President, People and Organisational Effectiveness. Mr Moabelo was appointed Executive Vice President, People and Organisational Effectiveness of Gold Fields from 1 August 2011. Prior to his appointment, he was the Human

He has over 30 years’ experience in the mining industry. Previously, he has been the President and Member of the Chamber of Mines of South Africa, President and CEO of TEAL Exploration & Mining Inc., Chairman of Anglovaal Mining Limited and Avgold Limited, Chairman of Bateman Engineering, Deputy Chairman of Harmony Gold Mining Company Limited and African Rainbow Minerals and director of Telkom SA Limited, Standard Bank Group Limited and Mutual and Federal Insurance Company Limited. He is currently a director of, and senior adviser to, Credit Suisse Securities Johannesburg, Weir Group Plc, the National Business Initiative and the Tourism Enterprise Partnership. Mr Menell is a Trustee of Brand South Africa and a Council Member of Business Leadership South Africa. He is also Chairman of the City Year South Africa Citizen Service Organisation, the Carrick Foundation and the Palaeontological Scientific Trust.

Susan c van der merwe (58). BA, University of Cape Town. Ms Van der Merwe was appointed a non-executive director effective 21 February 2013. Ms Van der Merwe is a Member of Parliament where she has served in various capacities since 1996. She currently serves on the Portfolio Committee on Trade and Industry. She was previously the Deputy Minister of Foreign Affairs for the period 2004 to 2010. She is currently a member of the National Executive Committee of the African National Congress. Ms Van der Merwe has participated in various civil society organisations and currently serves as Trustee on the Kay Mason Foundation which is a non-profit organisation assisting disadvantaged scholars in the Cape Town area.

Jerry S vilakazi (52). BA (Unisa), MA (Thames Valley), MA (London), MBA. Mr Vilakazi was appointed a non-executive director effective 1 January 2013. Mr Vilakazi is Chairman of Palama, which he co-founded to invest in a diversified portfolio of sectors. He is the past CEO of Business Unity South Africa, or BUSA. Prior to joining BUSA,



executive directors and executive committee

Sibanye Gold’s Executive Committee meets on a regular basis to discuss and make decisions on strategic and operating issues facing Sibanye Gold. The composition of the Executive Committee is as follows:

neal J Froneman (53). Pr Eng BSc Mech Eng (Ind Opt) University of the Witwatersrand, BCompt UNISA. Executive director and CEO and Chairman of the Executive Committee. Mr Froneman was appointed an executive director and CEO of Sibanye Gold effective 1 January 2013. Mr Froneman has over 30 years of relevant operational, corporate development and mining industry experience. Mr Froneman was appointed CEO of Aflease Gold Limited, or Aflease Gold, in April 2003. Aflease Gold, through a series of reverse takeovers, became Gold One in May 2009. Mr Froneman was primarily responsible for the creation of Uranium One Inc., or Uranium One, from the Aflease Gold uranium assets. During this period, Mr Froneman was CEO of both Aflease Gold and Uranium One until his resignation from Uranium One in February 2008. Prior to joining Aflease Gold, Mr Froneman has also held executive and senior management positions at Gold Fields Limited, Harmony Gold Mining Company Limited and JCI Limited. He is also a non-executive director of Delview Three Proprietary Limited, Hi-Zone Traders 116 Proprietary Limited, 17 Perissa Proprietary Limited and Forestry Services Proprietary Limited.

charl keyter (39). BCom, Johannesburg University, MBA Northwest University, ACMA and CGMA. Executive Director and CFO. Mr Keyter was appointed a director on 9 November 2012 and was appointed an executive director and CFO of Sibanye Gold effective 1 January 2013. Previously, Mr Keyter was Vice President and Group Head of International Finance for Gold Fields. Mr Keyter started his career with Gold Fields in February 1995 and has held various positions in the finance department within the group, including

Management Accountant at Libanon Gold Mine and Kloof Gold Mine and later Unit Manager Finance at Kloof Gold Mine. In 2005, Mr Keyter was appointed Unit Manager – Management Accounting in the Corporate Office and during this time he was the acting Senior Manager Finance for the Venezuela operation. Between late 2006 and 2009 he returned to South Africa and held the position of Senior Manager Finance for the Driefontein Mine and Head of Finance for the South African Region. In 2010, he was appointed as Head of Finance for the International Operations of Gold Fields. He has more than 17 years of mining experience. He is also a non-executive director of Oil Recovery and Maintenance Services Proprietary Limited and Grease Trap Maintenance Proprietary Limited.

Shadwick bessit (50). National Higher Diploma (NHD) Wits Technikon, Executive Development Programme GIBS, Mine Managers Certificate of Competency. Mr Bessit is currently appointed as Senior Vice President: Technical Services for Sibanye Gold. Prior to joining Gold Fields Limited on 6 July 2012, Shadwick was the Executive Director: Operations at Impala Platinum Holdings Limited (“Implats”) from 2005 to 2010 after joining Implats in November 2002 as General Manager. Previously Shadwick was employed at AngloGold Ashanti Limited from 1986 to 2002 moving through the ranks in various capacities to General Manager level at Deelkraal, Elandsrand and Savuka mine.

dawie J mostert (43). MDP, Adv Labour Law, MBA, University of South Africa. Mr Mostert was appointed as Senior Vice President Organisational Effectiveness at Sibanye Gold effective 1 January 2013. Prior to joining Sibanye Gold, Mr Mostert served as Vice President Commercial Services at Gold One Inc. and previously as Vice President Human Capital at Great Basin Gold Limited. Prior to joining Great Basin Gold in 2006, he was Executive Organisational Development and Employee Relations at Harmony Gold Mining Company Limited from 2002 to 2006. Mr Mostert joined Harmony Gold in 1996 as part of the

acquisition transformational team and was appointed Mine Manager at Elandsrand Mine from 2001 to 2002. Mr Mostert has more than 15 years’ experience in the mining industry.

Adam A mutshinya (49). BAdmin (Honours) Industrial Psychology, University of Venda. Senior Vice President, Human Capital. Mr Mutshinya was appointed senior Vice President Human Capital of Sibanye Gold effective 1 March 2013. Prior to his appointment to Sibanye Gold, Mr Mutshinya was appointed Vice President and Head of Human Resources – SA Region of Gold Fields on 1 December 2012. Prior to transferring to the SA Region, he was the Vice President and Head of Group Talent Management at Gold Fields since November 2011. Prior to joining Gold Fields, Mr Mutshinya was with the South African Forestry Company (“SAFCOL”) where he held senior positions of Group Executive Human Resources and Senior Group Executive Human Capital between the period September 2006 – June 2011. Prior to joining SAFCOL, Mr Mutshinya was with Anglo American Platinum Limited during the period October 2003 and August 2006 where he held various positions of HR Manager Platinum Expansion Programme, HR Manager Smelter Operations and the Group HR Manager Transformation.

Robert van niekerk (48). National Higher Diploma Metalliferous Mining; Witwatersrand Technikon, BSc Mining Engineering; University of the Witwaters-rand, South African Mine Managers Certificate of Competency. Mr Van Niekerk was appointed to the position of Senior Vice President Organisational Effectiveness at Sibanye Gold effective February 2013. Prior to joining Sibanye Gold, Mr Van Niekerk was the Senior Vice President and Group Head of Mining at Gold Fields and before that occupied several senior management positions at Gold Fields and Anglo American Platinum Limited and executive management positions at Uranium One and Gold One. Mr Van Niekerk commenced his mining career in 1982 as a Barlow’s Learner Official and progressed through the mining ranks at East Rand Proprietary


of regulatory authorities and Sibanye Gold’s Code of Ethics. The CFO’s expertise was evaluated by the Audit Committee. The committee is satisfied that the CFO has the appropriate expertise and experience to carry out his duties as the financial director of the Company and is supported by qualified competent senior staff. The committee reviewed and assessed the independence of the external auditors, including their confirmation in writing that the criteria for independence as set out in the rules of the Independent Regulatory Board for Auditors and international bodies have been followed. The committee is satisfied that KPMG Inc. is independent of the Group. Sibanye Gold’s CFO and internal and external auditors will attend all the Audit Committee meetings and have unrestricted access to the chairman of this committee. The Audit Committee, in turn, will communicate freely with other members of the Board not serving as members of the Audit Committee. To effectively perform its functions, the Audit Committee meets at least quarterly, but more frequently if required. Membership of the Audit Committee, with effect from 21 February 2013, is as follows:

Keith A Rayner (Chairman) Richard P Menell Nkosemntu G Nika Susan C van der Merwe

The Audit Committee met on 27 February 2013, reviewed and recommended to the full Board the approval of the Company’s Reviewed Preliminary Condensed Consolidated results for the year ended 31 December 2012. This report was published on 1 March 2013.

The Audit Committee also met on 14 March 2013, reviewed and recommended to the full Board the approval of the 2012 Annual Report.

companies and contributing to JP Morgan’s supply and demand and gold price forecasts.

company secretary

cain Farrel (63). FCIS, MBA, Southern Cross University, Australia. Mr Farrel was appointed company secretary of Sibanye Gold effective 1 January 2013. Mr Farrel was appointed company secretary of Gold Fields on 1 May 2003. Mr Farrel is past president and the former director of the Southern African Institute of Chartered Secretaries and Administrators. Previously, Mr Farrel served as senior divisional secretary of Anglo American Corporation of South Africa Limited.

Board committees

In order to ensure good corporate governance, the Board has formed an Audit Committee, a Remuneration Committee, a Nominating and Governance Committee and a Safety, Health and Sustainable Development Committee. Further, in order to comply with the statutory requirements of the Companies Act, the Board has formed a Social and Ethics Committee. All the Committees are composed exclusively of independent non-executive directors except for the Safety, Health and Sustainable Development Committee where the CEO is also a member. The Committees are chaired by an independent non-executive director. The Committees operate in accordance with written terms of reference which have been approved by the Board.

The Audit Committee monitors and reviews Sibanye Gold’s accounting controls and procedures, including the effectiveness of Sibanye Gold’s information systems and other systems of internal control; the effectiveness of the internal audit function; reports of both external and internal auditors; half-yearly reports, the Form 20-F and the annual financial statements; the accounting policies of Sibanye Gold and any proposed revisions thereto; external audit findings and reports, and the approval thereof; and compliance with applicable legislation and requirements

Mines, Harmony Gold Mining Company Limited, Anglo Platinum, Gold One, Uranium One and Gold Fields, where he gained extensive South African and international mining experience.

peter l turner (56). National Higher Diploma (NHD) Vaal Triangle Technikon SA, Mechanical Engineering; South African Mine Manager Certificate of Competency – Metalliferous; South Africa Mechanical Engineers Certificate of Competency, Chief Operating Officer of Sibanye Gold effective 1 January 2013. Prior to his appointment to Sibanye Gold, Mr Turner was appointed as Executive Vice President, Head of South Africa region of Gold Fields on 8 August 2011 and previously served as Executive Vice President, Head of West Africa since 1 August 2009. He moved to Ghana in 2008 when he was appointed Vice President of Operations and before that he was the head of the Kloof mine in South Africa from 2005 and later the Driefontein mine. Prior to joining Gold Fields in 2005, he was managing director of Geita Gold Mining Limited in Tanzania from 2002 to 2005 and, before that, General Manager of East and West Africa Region for AngloGold Ashanti where he spent the majority of his career. He progressed through the ranks, starting as an engineering trainee at Vaal Reefs in 1975, later spending time in various managerial positions at numerous gold mining operations. Mr Turner has more than 34 years of experience in the mining industry.

James R wellsted (43). BSc (Honours) Geology, University of the Witwatersrand. Senior Vice President, Corporate Affairs. Mr Wellsted was appointed Senior Vice President, Corporate Affairs of Sibanye Gold effective 1 January 2013. Prior to joining Sibanye Gold, Mr Wellsted was a mining analyst at JP Morgan covering the South African diversified mining sector since 2011. Previously, Mr Wellsted was the Executive Head of Investor and Media Relations at Mvelaphanda Resources for seven years, until its unbundling in 2011. Between 1998 and 2004, Mr Wellsted was an analyst at JP Morgan, covering the South African and African gold mining



audit committee statement

Based on information from the discussions with management and external auditors, the Audit Committee has no reason to believe that there were any material breakdowns in the design and operating effectiveness of internal financial controls during the year and that the financial records can be relied upon as the basis for preparation of the annual financial statements.

The Audit Committee considered and discussed this annual report with both management and the internal and external auditors. During this process, the committee:●● evaluated significant judgements and

reporting decisions;●● determined that the going concern

basis of reporting is appropriate;●● evaluated the material factors and

risks that could impact on the annual report;

●● evaluated the completeness of the financial and sustainability discussion and disclosures;

●● discussed the treatment of significant and unusual transactions with management and the internal and external auditors.

The Audit Committee considers that this annual report complies in all material respects with the statutory requirements of the various regulations governing disclosure and reporting of the annual financial statements and that the annual financial statements comply in all material respects with IFRS, the SAICA Financial Reporting Guides as issued by the Accounting Practice Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the Companies Act and the JSE Listings Requirements. The Audit Committee has recommended to the Board that the annual financial statements be adopted and approved by the Board.

The Nominating and Governance Committee is responsible for ensuring that new directors undergo an appro-priate induction process; recommending

to the Board the need for Board participation in continued education programmes; identifying successors to the Chairman and CEO to recommend to the Board; developing the approach of Sibanye Gold to matters of corporate governance; and making recommendations to the Board with respect to all such matters. The members of the committee, with effect from 21 February 2013, are:

M Sello Moloko (Chairman) Rick P Menell Jerry S Vilakazi

The Remuneration Committee is responsible for determining Sibanye Gold’s remuneration policy and the practices needed to attract, retain and motivate high performing executives that are demonstrably aligned with Sibanye Gold’s corporate objectives and business strategy; ensuring that remuneration levels relative to other comparable companies are pitched at the desired level taking relative performance into account. Further, on behalf of the Board, the Remuneration Committee reviews both the remuneration levels of senior executives and management share incentive schemes and the related performance criteria and measurements; and advises the Board on the remuneration payable to non-executive directors (as a separate process from executive remuneration reviews) for confirmation of the Board and, to the extent required, approval by shareholders. To perform these functions the Remuneration Committee meets quarterly or more frequently if required. The members of the committee, with effect from 21 February 2013, include:

Tim J Cumming (Chairman) Barry E Davison M Sello Moloko Nkosemntu G Nika

The Safety, Health and Sustainable Development Committee reviews adherence to occupational health, safety and environmental standards by Sibanye Gold. The committee seeks to minimise mining-related accidents, to ensure that Sibanye Gold’s operations are in compliance with all environmental regulations and to establish policy in

respect of HIV/AIDS and health matters. Membership of the Safety, Health and Sustainable Development Committee, with effect from 21 February 2013, is as follows:

Barry E Davison (Chairman) Neal J Froneman M Sello Moloko Susan C van der Merwe

The Social and Ethics Committee is responsible for discharging its statutorily imposed duties as contemplated in section 72 of the Companies Act and the applicable regulations, which include monitoring Sibanye Gold’s activities in relation to relevant legislation, other legal requirements and prevailing codes of best practice regarding: (i) social and economic development; (ii) good corporate citizenship; (iii) the environment, health and public safety and their impact on Sibanye Gold’s activities, products and services; (iv) consumer relations; and (v) labour and employment legislation. The Social and Ethics Committee must bring any matters relating to this monitoring to the attention of the Board and report to shareholders at the annual general meeting. The Board seeks the assistance of the Social and Ethics Committee in ensuring that Sibanye Gold complies with best practice recommendations in respect of social and ethical management. The members of the committee, with effect from 21 February 2013, include:

Jerry S Vilakazi (Chairman) Timothy J Cumming Barry E Davison M Sello Moloko Keith A Rayner

RiSk mAnAGement

The total process of risk management, which includes the related systems of internal control, is the responsibility of the Board. Management is accountable to the Board for designing, implementing and monitoring an integrated process of risk management into the daily activities of Sibanye Gold. The Board, through the Audit Committee, ensures that management implements appropriate risk management processes and controls.


Statement of responsibility by the board of directors

The directors are responsible for the preparation, integrity and fair presentation of the financial statements of the Company and of the Group. The financial statements presented on pages 39 to 106 have been prepared in accordance with International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practice Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings Requirements and in a manner required by the Companies Act 71 of 2008, as amended, of South Africa, and include amounts based on judgements and estimates made by management.

The directors consider that, in preparing the financial statements, they have used the most appropriate policies, consistently applied and supported by reasonable and prudent judgements and estimates, and that all IFRS standards that they consider to be applicable have been followed. The directors are satisfied that the information contained in the financial statements fairly presents the results of operations for the year and the financial position of the Company and the Group at year end. The directors also prepared the other information included in the annual report and are responsible for both its accuracy and its consistency with the financial statements.

The directors have responsibility for ensuring that accounting records are kept. The accounting records should disclose with reasonable accuracy the financial position of the Company and the Group to enable the directors to ensure that the financial statements comply with the relevant legislation.

The Company and the Group operated in a well-established controlled environment, which is well documented and regularly reviewed. This incorporates risk management and internal control procedures, which are designed to provide reasonable assurance that assets are safeguarded and the material risks facing the business are being controlled.

The going-concern basis has been adopted in preparing the financial statements. The directors have no reason to believe that the Group or any company within the Group will not be going concerns in the foreseeable future, based on forecasts and available cash resources. These financial statements support the viability of the Company and the Group.

Sibanye Gold has adopted a code of ethics which is available on the Sibanye Gold website and which is adhered to by the Group. The Group’s external auditors, KPMG Incorporated, audited the financial statements, and their report is presented on page 38.

The financial statements were approved by the Board of Directors on 5 April 2013 and are signed on its behalf by:

nJ froneman c Keyter

Chief Executive Officer Chief Financial Officer

corporate Secretary’s confirmation

In terms of section 88(2)(e) of the Companies Act 71 of 2008, as amended, I certify that the Company has lodged with the Companies and Intellectual Property Commission all such returns as are required to be lodged by a public company in terms of the Companies Act, and that all such returns are true, correct and up to date.

c farrel

Corporate Secretary

5 April 2013


management’s discussion and analysis of the Group financial statements

GeneRAl

Sibanye Gold is a South Africa focused gold producer, newly listed on the JSE and NYSE, following the unbundling by Gold Fields of its wholly owned subsidiary, Sibanye Gold (previously GFI Mining South Africa Proprietary Limited (“GFIMSA”)). The Company and its subsidiaries are referred to as the “Group”. Sibanye Gold’s principal operations are Kloof, Driefontein (collectively KDC) and Beatrix mines, which, despite already long and illustrious operating histories, still have some of the highest grades and largest resources in the South African gold mining industry. Sibanye Gold is one of the largest gold producers in South Africa and among the top 10 largest gold producers globally.

In the 2012 financial year, the Group produced 38,059 kilograms (1.22 million ounces) of gold compared with 45,005 kilograms (1.45 million ounces) in the 2011 financial year. The 15% production decline was mainly due to illegal industrial action, which resulted in up to six weeks of lost production and a fire at the KDC Ya Rona shaft. KDC and Beatrix produced 165,200 ounces and 58,100 ounces less, respectively, than in the equivalent period in 2011.

The Group reported gold reserves of 13.5 million ounces as of 31 December 2012 and resources of 74.3 million ounces.

the SepARAtion And unbundlinG

Sibanye Gold, in its previous guise as GFIMSA, acquired its current operations in 2002 while part of the Gold Fields Group. The proposed unbundling of Sibanye Gold into an independent, publicly traded company by Gold Fields was announced on 29 November 2012. Gold Fields proposed to distribute, on a pro rata basis, Sibanye Gold ordinary shares to Gold Fields shareholders and Gold Fields American Depositary Receipts (“ADR”) holders who held their shares or ADRs as of the record date for the unbundling. The Board of Directors of Gold Fields approved the unbundling on 12 December 2012.

Included in current liabilities at 31 December 2012 is R17,108 million (2011: R21,258 million) owed by Sibanye Gold to GFL Mining Services Limited (“GFLMS”, a subsidiary of Gold Fields) (the “GFLMS loan”). As a result of the GFLMS loan, Sibanye Gold’s total liabilities exceeded its total assets by R9,673 million and R11,976 million as of 31 December 2012 and 31 December 2011, respectively. In addition, Sibanye Gold’s current liabilities exceeded its current assets by R19,681 million and R22,265 million, respectively, at those dates.

On 1 February 2013, Gold Fields subscribed for a further 731,647,614 shares in Sibanye Gold at a subscription price of R17,246 million. Sibanye Gold used R17,108 million of the proceeds to repay the GFLMS loan (the share subscription and the repayment of the GFLMS loan collectively referred to as the Share subscription).

Sibanye Gold began trading on 11 February 2013 on the JSE at a share price of R13.05 per share, giving it an initial market capitalisation of approximately R9.5 billion. Sibanye Gold’s secondary listing on the NYSE also commenced on 11 February 2013.

The entire issued share capital of Sibanye Gold was unbundled to existing Gold Fields shareholders on 18 February 2013, by way of a distribution in specie in accordance with section 46 of the Companies Act, section 46 of the Income Tax Act and the JSE Listings Requirements. The Sibanye Gold shares were unbundled in a ratio of 1:1 with Gold Fields shares and resulted in Gold Fields’ shareholders holding two separate shares; a Sibanye Gold share as well as their original Gold Fields share. Each Sibanye Gold ADR represents four ordinary shares. After the unbundling Sibanye Gold is now a fully independent, publicly traded company with a new board of directors and management.

As a result of the Share subscription, the Company and Group’s total assets exceed its total liabilities.

The directors believe the Share subscription and the refinancing of all its debt, in conjunction with the cash generated from operations and the remaining balance of the Company’s revolving credit facility will enable the Company and the Group to continue to meet its obligations as they fall due.

ReFinAncinG oF boRRowinGS

On 28 November 2012, Sibanye Gold entered into a R6 billion term loan and revolving credit facilities agreement (“Rand bridge loan”), as detailed in note 22 of the financial statements.

The purpose of the Rand bridge loan facilities was to refinance Sibanye Gold’s remaining debt on unbundling, with the balance to be used to fund Sibanye Gold’s ongoing capital expenditure, working capital and general corporate expenditure requirements.


On 18 February 2013, Sibanye Gold refinanced all of its debt which was under Gold Fields group debt facilities, by drawing down under the Rand bridge loan facilities.

As of 18 February 2013, the Gold Fields group is not guaranteeing any debt of Sibanye Gold, similarly Sibanye Gold has been released from all of its obligations as guarantor under Gold Fields group debt, except, Sibanye Gold will remain a guarantor of the US$1 billion 4.875% guaranteed notes (the “Notes”) as detailed in note 22 of the financial statements.

An indemnity agreement (the “Indemnity Agreement”) has been entered into between the Guarantors, pursuant to which the Guarantors (other than Sibanye Gold) hold Sibanye Gold harmless from and against any and all liabilities and expenses which may be incurred by Sibanye Gold under or in connection with the Notes. The indemnity includes any payment obligations by Sibanye Gold to the note holders or the trustee of the Notes pursuant to the guarantee of the Notes, all on the terms and subject to the conditions contained therein. The Indemnity Agreement will remain in place for as long as Sibanye Gold guaranteed obligations under the Notes remain in place.

Sibanye Gold has ceded all of its rights, title and interest in and to the Indemnity Agreement in favour of the lenders of the Rand bridge loan facility, jointly and severally, as security for its obligations under the facilities.

unAudited condenSed conSolidAted pRo FoRmA FinAnciAl inFoRmAtion

Set out below is the unaudited condensed consolidated pro forma earnings per share information and the unaudited condensed consolidated pro forma statement of financial position of Sibanye Gold (together, “the unaudited condensed consolidated pro forma financial information”).

The unaudited condensed consolidated pro forma financial information has been prepared by management of Sibanye Gold and is the responsibility of the Board of Directors of Sibanye Gold. The unaudited condensed consolidated pro forma financial information has been prepared for illustrative purposes only, to provide information as to how the Share subscription might have affected the reported financial information, had the Share subscription been undertaken on 1 January 2012, in calculating earnings per share and headline earnings per share and on 31 December 2012 for the statement of financial position. Other than for the impact on earnings per share and headline earnings per share, the Share subscription did not have any other pro forma financial impact on the income statement as the GFLMS loan which was repaid was interest free.

In addition, the unaudited condensed consolidated pro forma financial information provides information on how the refinancing of borrowings might have affected the reported financial information had the refinancing been undertaken on 31 December 2012 for the statement of financial position. The refinancing of borrowings did not have any pro forma financial impact on the income statement had the refinancing been undertaken on 1 January 2012 as the refinancing merely resulted in the reclassification between short and long term borrowings.

Because of its nature, the unaudited condensed consolidated pro forma financial information may not present a fair reflection of the financial position, changes in equity, results of operations or cash flows of Sibanye Gold, after the Share subscription and the refinancing of borrowings.

The unaudited condensed consolidated pro forma financial information of Sibanye Gold has been prepared using the accounting policies that comply with IFRS and that are consistent with those applied in the preparation of the audited consolidated financial statements of Sibanye Gold for the year ended 31 December 2012.

Had the Share subscription and the refinancing of Sibanye Gold’s other debt occurred on 31 December 2012, as detailed in the pro forma table alongside, Sibanye Gold’s total assets would have exceeded its total liabilities by R7,573 million on 31 December 2012. However, Sibanye Gold’s current liabilities would have exceeded its current assets by R715 million on the same date as illustrated.


unaudited condensed consolidated pro forma information for the year ended 31 december 2012Figures in millions unless otherwise stated

unaudited pro forma earnings per share

SOuTh AFRICAN RAND

2012

before the Share

subscription pro forma1

adjustments

After the Share

subscription

Earnings per share attributable to ordinary shareholders of the CompanyBasic and diluted earnings per share (cents) 297,960,000 (297,959,593)2 407 Headline and diluted headline earnings per share (cents) 297,790,000 (297,789,593)2 407

unaudited condensed consolidated pro forma statement of financial position

SOuTh AFRICAN RAND

2012

before the Share

subscription and the

refinancing of borrowings

pro forma1

adjustments

After the Share

subscription and the

refinancing of borrowings

Non-current assets 17,950.6 – 17,950.6Current assets 1,747.1 137.93 1,885.0

total assets 19,697.7 137.9 19,835.6

Shareholders’ equity (9,672.7) 17,245.83 7,573.1Non-current liabilities 7,942.3 1,720.03 9,662.3Current liabilities 21,428.1 (18,827.9) 2,600.2

Other current liabilities 2,100.2 – 2,100.2GFLMS loan 17,107.9 (17,107.9)3 –Current portion of borrowings 2,220.0 (1,720.0)4 500.0

total equity and liabilities 19 697.7 137.9 19 835.6

Net asset value per share (cents) (967,270,000) 967,271,0355 1,035Net tangible asset value per share (cents) (967,270,000) 967,271,0355 1,035

notes and assumptions to the consolidated pro forma financial informationThe figures set out in the “Before the Share subscription” and the “Before the Share subscription and the refinancing of borrowings” columns above have been extracted without adjustment from the audited consolidated financial statements of Sibanye Gold for the year ended 31 December 2012.

management’s discussion and analysis of the Group financial statements (continued)


The following notes and assumption are applicable to the pro forma adjustments:1. The unaudited condensed consolidated pro forma financial information of Sibanye Gold has been reviewed by the Company’s independent reporting accountant, KPMG

Inc. In their limited assurance report dated 1 March 2013, which is available for inspection at the Company’s Registered Office, KPMG Inc. state that their review was conducted in accordance with International Standard on Assurance Engagements applicable to Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and the Guide on Pro Forma Financial Information issued by the South African Institute of Chartered Accountants, which applies to a review of pro forma financial information, and have expressed an unmodified conclusion on the pro forma financial information.

2. The adjustment relates to basic and diluted earnings per share and headline and diluted headline attributable to Sibanye Gold shareholders resulting from the impact of the increase in the weighted average number of ordinary shares (from 1,000 to 731,648,614, as described below). 100% weighting was assumed for the Share subscription. Other than for the impact on earnings per share and headline earnings per share resulting from the Share subscription, the pro forma adjustments resulting from the Share subscription and the refinancing of the borrowings did not have any other impact on the income statement.

3. The pro forma adjustments relate to the settlement of the GFLMS loan owing by Sibanye Gold from the proceeds of the issuance of no par value ordinary shares to Gold Fields.

r million

Increase in shareholders’ equity from the issuance of 731,647,614 no par value ordinary shares 17,245.8

Use of net proceeds 17,245.8

– Current assets – Increase in cash and cash equivalents 137.9

– Current liabilities – GFLMS loan 17,107.9

4. The pro forma adjustments relate to the reclassification of borrowings between current and non-current liabilities as a result of the refinancing of the borrowings.

r million

Total pro forma borrowings at 31 December 2012 4,220.0

– Long-term portion of borrowings under the Rand bridge loan facilities 3,720.0

– Short-term portion of borrowings under the Rand bridge loan facilities 500.0

5. The adjustment relates to net asset value and net tangible asset value per share resulting from the impact of pro forma adjustments above reflecting the increase in the number of ordinary shares.

6. The above adjustments are expected to have a continuing effect.

ReSultS FoR the peRiod

Group profit attributable to owners of the parent increased from R2,564 million for 2011 to R2,980 million for 2012. The reasons for this increase are discussed below.

Revenue

Revenue decreased marginally from R16,613 million for 2011 to R16,554 million for 2012. The decrease in revenue of R59 million was due to a decrease in gold sales, partially offset by an increase in the average Rand gold price for the period from R369,139 per kilogram to R434,943 per kilogram. The Rand gold price increase was due to a 4% increase in the US Dollar gold price from an average of US$1,590 per ounce to US$1,652 per ounce and a weaker Rand, which weakened by 13% from an average of R7.22 to R8.19 to the US Dollar.

Gold sales decreased by 15% from 1,447,000 ounces in 2011 to 1,223,600 ounces in 2012 primarily due to the strike and the fire at Ya Rona Shaft.

Gold sales at KDC decreased by 15% from 1,100,200 ounces to 934,900 ounces as a result of lower underground and surface mining volumes. The lower volumes were due to a fire at Ya Rona Shaft which started on 30 June 2012 and was eventually extinguished on 14 August 2012, together with illegal strike action which lasted from late August to early in November and resulted in a total of 30 days’ lost production at KDC East (formerly Kloof) and 39 days’ lost production at KDC West (formerly Driefontein). Production lost due to the illegal strike and the fire amounted to approximately 116,000 ounces and 30,000 ounces respectively. At Beatrix, gold output decreased by 17% from 346,800 ounces to 288,700 ounces due to lower underground grades and lower volumes mined and processed because of illegal strike action, which resulted in the loss of 23 days’ production at the North and South Sections and the loss of 29 days’ production at the West Section. Production lost due to the illegal strike amounted to approximately 29,000 ounces.



coSt oF SAleS

Cost of sales, which consists of operating costs and amortisation and depreciation, increased by 10% from R12,055 million in 2011 to R13,236 million in 2012.

The analysis that follows provides a more detailed comparison of cost of sales together with total cash cost and notional cash expenditure (“NCE”) per kilogram and per ounce.

operating costs – cost of sales less amortisation and depreciation

Operating costs increased by 10% from R9,861 million in financial 2011 to R10,874 million in financial 2012.

This increase of R1,013 million was mainly due to an above-inflation all-in annual wage increase of around 9.4%, an increase in electricity tariffs of 16.7%, additional support costs and an increase in raw material input costs. These increases were partially offset by the lower production levels, mainly due to the strikes, resulting in lower consumable usage and lower labour costs. At KDC, operating costs increased by 11% from R7,452 million to R8,237 million. Beatrix increased by 9% from R2,409 million to R2,637 million.

General and administration (G&A) costs

Net general and administration costs, which are included in operating costs, amounted to R227 million in 2012 compared with R176 million in 2011. This increase was mainly due to an increase in World Gold Council costs, reorganisation of corporate services and inflation.

The table below presents the analysis of cost of sales:

2012 2011

Analysis of cost of sales R million R million

cost of sales per income statement 13,236 12,055Deduct: Amortisation and depreciation (2,363) (2,193)

operating costs 10,873 9,862(Deduct)/add: General and administration (227) (176) Royalties* 282 290 Rehabilitation (50) (64)

total cash cost 10,878 9,912* Royalties are included as part of total cash cost but are reflected below operating profit in the income statement.Figures may vary in this table due to rounding.


The following table sets out for each operation and the Group, total gold sales in ounces and total cash cost in US$/oz and R/kg for 2012 and 2011:

2012 2011

Gold sold’000 oz

totalcash cost1

uS$/oz

totalcash cost1

R/kgGold sold

’000 oz

totalcash cost1

uS$/oz

totalcash cost1

R/kg

KDC 934.9 1,076 283,249 1,100.2 946 219,642Beatrix 288.7 1,118 294,277 346.8 957 222,073

total operations 1,223.6 1,086 285,851 1,447.0 949 220,2241 Total cash cost is calculated in accordance with the Gold Industry standard.

The weighted average total cash cost per kilogram increased by 30% from R220,224 per kilogram (US$949 per ounce) in 2011 to R285,851 per kilogram (US$1,086 per ounce) in 2012. This increase was as a result of the decrease in gold sold and the increase in operating costs described earlier.

Amortisation and depreciation

Amortisation and depreciation increased by 8% from R2,193 million in 2011 to R2,363 million in 2012.

KDC increased by 3% from R1,663 million to R1,713 million due to a reduction in life of mine reserves, mainly at Driefontein 1 Shaft. Beatrix increased by 23% from R514 million to R632 million due to a decrease in the life of mine.

notional cash expenditure (“nce”)

Notional cash expenditure is defined as operating costs (including general and administration costs) plus capital expenditure, which includes brownfields exploration (if any), and is reported on a per kilogram and per ounce basis. The objective is to provide the all-in cost for the Group, and for each operation. NCE per kilogram and per ounce indicates how much free cash flow is available in order to pay taxation, interest, and dividends. NCE margin is defined as the difference between revenue per kilogram and per ounce and NCE per kilogram and per ounce expressed as a percentage. NCE margin was 16% and 23% for financial 2012 and financial 2011, respectively.

2012 2011

Goldproduced

’000 oz

operatingcosts

R million

capitalexpen-diture

R millionnceR/kg

nceuS$/oz

Goldproduced

’000 oz

operatingcosts

R million

capitalexpen-diture

R millionnceR/kg

nceuS$/oz

KDC 934.9 8,236.9 2,426.2 366,707 1,393 1,100.2 7,452.4 2,300.3 285,017 1,228Beatrix 288.7 2,636.7 658.2 366,875 1,393 346.8 2,408.8 611.1 279,957 1,206

total operations 1,223.6 10,873.6 3,084.4 366,746 1,393 1,447.0 9,861.2 2,911.4 283,804 1,223

corporate/services – – 22.5 592 2 – – 11.3 251 1

Group 1,223.6 10,873.6 3,106.9 367,338 1,395 1,447.0 9,861.2 2,922.7 284,055 1,224

The above calculation is based on the average Rand to the US Dollar exchange rate for the period of R8.19 and R7.22 in 2012 and 2011 respectively.

The NCE increased by 29% from R284,055 per kilogram (US$1,224 per ounce) to R367,338 per kilogram (US$1,395 per ounce) because of the higher operating costs and capital expenditure (as discussed under additions to property, plant and equipment) together with the lower production.


net opeRAtinG pRoFit

Net operating profit decreased by 27% from R4,559 million in 2011 to R3,317 million in 2012. This was due to the decrease in revenue as a result of the lower production, and the higher cost of sales.

inveStment income

Income from investments increased by 8% from R98 million in 2011 to R106 million in 2012. This increase was mainly due to higher average cash balances in 2012 compared with 2011.

The investment income in 2012 of R106 million, comprised R70 million interest on monies invested in the South African environmental rehabilitation trust funds and R36 million interest on other cash and cash equivalent balances.

The investment income in 2011 of R98 million, comprised R66 million interest on monies invested in the South African environmental rehabilitation trust funds and R32 million interest on other cash and cash equivalent balances.

Interest received on the funds invested in rehabilitation trust funds increased from R66 million in 2011 to R70 million in 2012 due to higher balances invested in 2012.

Interest on other cash balances increased from R32 million in 2011 to R36 million in 2012 mainly due to higher cash balances in 2012.

FinAnce expenSe

Finance expense increased from R37 million in 2011 to R127 million in 2012.

The finance expense of R127 million in 2012 comprises R8 million relating to the accretion of the environmental rehabilitation liability and R119 million on borrowings.

The finance expense of R37 million in 2011 comprised R23 million relating to the accretion of the environmental rehabilitation liability, R10 million on borrowings and R5 million on various borrowings from related parties.

The environmental rehabilitation liability accretion expense decreased from R23 million in 2011 to R8 million in 2012 mainly due to a decrease in the mines’ lives.

Below is an analysis of the components making up other interest, stated on a comparative basis:

2012 2011

R million R million

Interest on borrowings 114 5Other interest charges 5 5

119 10

Interest on borrowings increased due to additional borrowings to fund working capital requirements of the operations during the Ya Rona Shaft fire and the illegal strike action.



otheR coStS

Other costs increased from R18 million in 2011 to R121 million in 2012. The charges are mainly made up of:●● Social contributions and sponsorships; ●● New loan facility charges; ●● Long service awards; and●● Ya Rona Shaft firefighting costs.

ShARe oF ReSultS oF ASSociAteS AFteR tAxAtion

The Group’s 33.1% share of after-tax profits in Rand Refinery Proprietary Limited was R93 million in 2012 compared with R35 million in 2011. This increase was due to higher Krugerrand sales and furnace clean-up.

ShARe-bASed pAymentS

Sibanye Gold recognises the cost of share options granted (share-based payments) in terms of IFRS 2.

Sibanye Gold has adopted appropriate valuation models (Black-Scholes and Monte Carlo simulation) to fair value share-based payments. The value of the share options is determined at the grant date of the options and expensed on a straight-line basis over a three-year vesting period, adjusted for forfeitures as appropriate.

Share-based payments expensed in 2012 and 2011 related to the share options issued under the Gold Fields’ GF Management Incentive Scheme, the Gold Fields Limited 2005 Share Plan and the Gold Fields Limited 2012 Share Plan.

Based on these models, R264 million was accounted for in 2012 compared with R238 million in 2011. The corresponding entry for the above adjustments was share-based payment reserve within shareholders’ equity.

The increase in share-based payments was mainly due to the value of share-based compensation granted under the new Gold Fields Limited 2012 Share Plan in 2012.

pRoFit on SAle oF ASSetS

Profit on disposal of property, plant and equipment decreased from R4 million in 2011 to R2 million in 2012.

The major disposals in 2012 related to the sale of assets at KDC and Beatrix, whereas in 2011, they related to the sale of assets at KDC.


GAin on FinAnciAl inStRumentS

Gains on financial instruments increased from Rnil in 2011 to R15 million in 2012.

ReStRuctuRinG coStS

Restructuring costs decreased from R286 million in 2011 to R124 million in 2012. The cost in financial 2012 included R25 million on voluntary separation packages and R99 million on business process re-engineering costs, while costs in 2011 included R166 million on voluntary separation packages and R120 million on business process re-engineering costs.

RoyAltieS

Royalties decreased from R290 million in 2011 to R282 million in 2012. The decreased royalty in 2012 was due to the lower gold sales and higher operating costs, partly offset by an increase in the gold price.

mininG And income tAx

Mining and income tax decreased from an expense of R1,265 million in 2011 to an income of R365 million in 2012. The table below indicates Gold Fields’ effective tax expense rate in 2012 and 2011:

2012 2011

R million R million

Income and mining tax (365) 1,265Effective tax expense rate (%) (14.0) 33.0

In 2012, the effective tax expense rate of negative 14% was lower than the maximum South African mining statutory tax rate of 34% mainly due to the tax effect of the following:●● R17 million adjustment reflected the actual realised company tax rates;●● R282 million reduction related to the mining tax formula rate adjustment;●● R1,004 million deferred tax released on reduction of the long-term expected tax rate at the operations; and●● R41 million of net non-deductible expenditure and non-taxable income.

The above were offset by the following tax-effected charges:●● R90 million non-deductible charges related to share-based payments.

In 2011, the effective tax expense rate of 33% was lower than the maximum South African mining statutory tax rate of 43% mainly due to the tax effect of the following:●● R382 million adjustment reflected the actual realised company tax rates;●● R86 million reduction related to the mining tax formula rate adjustment; and●● R15 million of net non-deductible expenditure and non-taxable income.

The above were offset by the following tax-effected charges:●● R102 million non-deductible charges related to share-based payments.



pRoFit FoR the yeAR

As a result of the factors discussed above, the Group posted a profit for the year of R2,980 million in 2012, compared with R2,563 million in 2011.

pRoFit AttRibutAble to owneRS oF the pARent

The Group posted a profit attributable to ordinary shareholders of the Company of R2,980 million in 2012, compared with R2,564 million in 2011.

pRoFit AttRibutAble to non-contRollinG inteReSt holdeRS

The non-controlling interest consists of Living Gold Proprietary Limited at 10% at the end of 2012 (nil at the end of 2011). Profit attributable to non-controlling interest of R1 million in 2012 compared with a loss of R1 million in 2011. The 10% effective minority rate during 2012, compared with a 3.4% effective minority rate during 2011.

eARninGS peR ShARe

As a result of the above, basic and diluted earnings per share increased from R2,564 per share for 2011 to R2,980 per share in 2012.

Headline earnings per share increased from R2,561 thousand per share for 2011 to R2,978 thousand per share in 2012.

liQuidity And cApitAl ReSouRceS

cash resources

cash flows from operating activities

Cash inflows from operating activities decreased from R6,284 million in 2011 to R3,353 million in 2012. The decrease of R2,931 million was due to:

R million

Decrease in cash generated from operations mainly due to higher cost of sales (1,033)Increase in interest received 3Increase in investment in working capital (889)Increase in interest paid (104)Increase in royalties paid (243)Increase in taxes paid (665)

(2,931)

dividends paid

Dividends paid decreased from R2,423 million in 2011 to R731 million in 2012. These dividends were paid to Sibanye Gold’s only shareholder at the time, Gold Fields.


cASh FlowS FRom inveStinG ActivitieS

Cash outflows from investing activities increased from R3,005 million in 2011 to R3,126 million in 2012. The items comprising these amounts are discussed below.

Additions to property, plant and equipmentCapital expenditure increased from R2,923 million in 2011 to R3,107 in 2012. Capital expenditure at the individual mines was as follows:●● KDC increased from R2,300 million to R2,426 million, which was mainly due to increased spending on an additional processing

facility (Python plant) and an increase in safety-related equipment;●● Beatrix increased from R611 million to R658 million due to an increase in infrastructure upgrades; and●● The balance of R23 million in 2012 and R12 million in 2011 includes expenditure at corporate and other services divisions.

proceeds on disposal of property, plant and equipment

Proceeds on the disposal of property, plant and equipment decreased from R16 million in 2011 to R6 million in 2012. In both periods this related to the disposal of various redundant assets.

environmental trust funds and rehabilitation payments

The environmental trust fund contributions decreased from R98 million in 2011 to R24 million in 2012.

cASh FlowS FRom FinAncinG ActivitieS

Net cash from financing activities increased from outflows of R1,529 million in 2011 to inflows of R434 million in 2012. The items comprising these amounts are discussed below.

loans raised

Loans raised increased from R400 million in 2011 to R4,706 million in 2012.

The loans raised in 2012 and 2011 comprised:

2012 2011

R million R million

R2.0 billion revolving credit facility 2,000 –R1.0 billion revolving credit facility 500 –R500 million revolving credit facility 500 –Short-term Rand credit facilities 1,220 400Related-party loans 486 –

4,706 400

loans repaid

Loans repaid increased from R1,929 million in 2011 to R4,272 million in 2012.

The loans repaid in 2012 and 2011 comprised:

2012 2011

R million R million

Short-term Rand credit facilities – 400

Related-party loans 4,272 1,529

4,272 1,929



net cash utilised

As a result of the above, net cash utilised in 2012 amounted to R71 million compared with R673 million in 2011.

Total Group cash and cash equivalents amounted to R292 million at 31 December 2012, compared with R363 million as at 31 December 2011.

StAtement oF FinAnciAl poSition

borrowings

Total debt (short and long term and excludes related party loans) increased from Rnil at 31 December 2011 to R4,220 million at 31 December 2012. Net debt (total debt less cash and cash equivalents) decreased from a net asset of R363 million at 31 December 2011 to a net debt of R3,928 million at 31 December 2012. This increase in borrowings was largely to fund working capital, especially during the fire at KDC and the illegal strike action.

provisions

Long-term provisions at the end of 31 December 2012 were R1,757 million, compared with R1,434 million at 31 December 2011, and included, a provision for post-retirement healthcare costs of R18 million (2011: R17 million) and a provision for environmental rehabilitation costs of R1,739 million (2011: R1,417 million).

provision for post-retirement healthcare costs

The Group medical scheme, Medisense, provides benefits to employees and certain of its former employees. The Group remains liable for 50% of these retired employees’ medical contributions to the medical scheme after retirement. This is applicable to employees of the Free State operations who retired on or before 31 August 1997 and members of the West Wits operations who retired on or before 1 January 1999. The increase in the provision is due to the unwinding of interest.

provision for environmental rehabilitation costs

The amount provided for environmental rehabilitation costs increased from R1,417 million at 31 December 2011 to R1,739 million at 31 December 2012. This increase was largely due to adjustments for new disturbances. This provision represents the present value of closure, rehabilitation and other environmental obligations incurred up to 31 December 2012. This provision is updated annually to take account of inflation, the time value of money and any new environmental obligations incurred.

The inflation and range of discount rates applied in 2012 and 2011 are shown in the table below:

2012 2011

Inflation rates 5.3% – 6.4% 5.6% – 6.5%

Discount rates 5.2% – 7.0% 6.2% – 7.7%

The inflation adjustment decreased from R64 million in 2011 to R50 million in 2012 and the interest adjustment in 2011 was R23 million compared with R8 million for 2012.

After applying the above inflation and discount rates, and the adjustment for new disturbances during 2012 the provision was R264 million compared with R169 million in 2011.

The operations contribute to dedicated environmental trust funds to provide financing for final closure and rehabilitation costs. The amount invested in the fund is shown as a non-current asset in the financial statements and increased from R1,237 million at 31 December 2011 to R1,331 million at 31 December 2012. This increase consists of contributions of R24 million and interest income of R70 million. South African operations are required to contribute annually to the trust fund over the remaining lives of the mines, to ensure that sufficient funds are available to discharge commitments for future rehabilitation costs.


SARbAneS-oxley

Sibanye Gold, being a foreign private issuer as defined under the US Securities and Exchange Act of 1934 (the “Exchange Act”), must comply with the requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). Management’s compliance programme, as a wholly owned subsidiary of Gold Fields, has consisted of self-assessments, focused walk-throughs and operating effectiveness testing executed throughout the year, on a quarterly basis.

At the time of reporting, management has completed control design and operating effectiveness testing for the Group across all significant locations, with the exception of the processes relating to preparation of its US annual report on Form 20-F (“Form 20-F”). The results to date of said compliance programme indicate a very high level of compliance and no indication of a material breakdown in controls was noted.

However, after its unbundling from Gold Fields and independent listing on the NYSE, Sibanye Gold is exempt from complying with certain reporting requirements under the Sarbanes-Oxley Act for a period of time. Until it has filed its Form 20-F for fiscal year 31 December 2013 under the Exchange Act, Sibanye Gold is not required to comply with the management assessment of internal controls over financial reporting and auditor attestation requirements of section 404 of the Sarbanes-Oxley Act. Therefore, Sibanye Gold will only be required to provide the information required by section 404 of the Sarbanes-Oxley Act in its Form 20-F for the fiscal year ending 31 December 2013.

c Keyter

Chief Financial Officer

5 April 2013



directors’ report

The directors have pleasure in submitting their first report and the annual financial statements of Sibanye Gold Limited (“Sibanye Gold” or the “Company”) and its subsidiaries (together referred to as “the Group”) for the year ended 31 December 2012.

pRoFile

business of the company

Sibanye Gold is a producer of gold and a major holder of gold reserves in South Africa. The Company is primarily involved in underground and surface gold mining and related activities, including extraction, and processing. All of the Company’s operations are located in South Africa. The Company had gold Mineral Reserves of 13.5 million ounces and Mineral Resources of 74.2 million ounces as at 31 December 2012.

Review oF opeRAtionS

The activities of the various Sibanye Gold operations are detailed in the Chief executive officer’s report on page 6.

FinAnciAl ReSultS

The information on the financial position of the Group and the Company for the year ended 31 December 2012 is set out in the financial statements on pages 39 to 106 of this annual report. The income statement for the Group shows a profit of R2,980 million (US$364 million) for the year ended 31 December 2012 compared with R2,563 million (US$355 million) in 2011.

compliAnce with FinAnciAl RepoRtinG StAndARdS

The Group and the Company annual financial statements comply with International Financial Reporting Standards, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standard Council, the Companies Act, No 71 of 2008, as amended (“the Companies Act”) and the JSE Listings Requirements.

RepoRtinG in united StAteS dollARS

To assist international investors, the consolidated income statement, consolidated statement of comprehensive income, the consolidated statement of financial position and consolidated statement of cash flows of the Group have been translated into United States Dollars. Refer to the accounting policies on page 59 which explain how this additional US Dollar information was translated from South African Rand.

diRectoRAte

composition of the board

The following changes in directorate occurred during the year under review:

On 9 November 2012, Mr MMC Mutloane resigned as a director of the Company and Mr C Keyter was appointed as a director.

At a shareholder’s meeting held on 21 November 2012, the following persons who were eligible and available for election/re-election were appointed as follows with effect from 1 January 2013:●● Mr NJ Froneman was elected as a director and appointed as Chief Executive Officer of the Company;●● Mr C Keyter was re-elected as a director and appointed as Chief Financial Officer of the Company;●● Mr MS Moloko was elected as a non-executive director and Chairman of the Company;●● Mr KA Rayner was elected as a non-executive director and chairman of the Audit Committee; and●● Mr RP Menell and Mr JS Vilakazi were elected as non-executive directors and as members of the Audit Committee.

On 21 February 2013 four additional directors were appointed. They are eligible and available for election and were appointed as follows:●● Messrs TJ Cumming and BE Davison appointed as non-executive directors; and●● Mr NG Nika and Ms SC van der Merwe were appointed as non-executive directors and members of the Audit Committee.

The membership of all the Board sub-committees is disclosed on pages 17 and 18.

Messrs NJ Holland, SM Govender, KFL Moabelo and PL Turner resigned as directors of the Company with effect from 31 December 2012.


The Boards of Directors of various subsidiaries of Sibanye Gold comprise some of the executive officers and one or both of the executive directors, where appropriate.

The Company has not entered into any contracts of service, other than the service contract with the executive directors of the Company.

directors’ and officers’ disclosure of interests in contracts

During the year under review, no contracts were entered into in which directors and officers of the Company had an interest and which significantly affected the business of the Group.

Related party information is disclosed on page 103.

FinAnciAl AFFAiRS

dividend policy

Sibanye Gold adopted a dividend policy in line with Gold Fields’ current policy of between 25% and 35% of normalised earnings. Normalised earnings are defined as profit for the year excluding gains and losses on foreign exchange, financial instruments, non-recurring items and share of associates after royalties and taxation.

In accordance with the Bridge Loan Facilities (detailed in note 22 of the Financial Statements), Sibanye Gold is not entitled to distribute any dividends, shares or other assets to its shareholders without the consent of the majority lenders under the Bridge Loan Facilities, except for a final dividend in respect of the financial year ending December 2013, which will be limited to 25% of normalised earnings and will be payable only if Sibanye Gold’s gross debt is not more than R4 billion after such dividend payment. Subject to debt restrictions and free cash flow, Sibanye Gold will consider paying special dividends.

For the year under review, the Company paid a dividend to its sole shareholder at that time, Gold Fields Limited (“Gold Fields”), of R731 million (US$96 million) 2011 (R2,423 million) (US$327 million).

borrowing powers

In terms of the provisions of section 19(1) of the Companies Act, read together with Clause 4 of the Company’s Memorandum of Incorporation, the borrowing powers of the Company are unlimited. As at 31 December 2012, the Company’s borrowings (including related party loans) totalled R21,328 million (US$2,489 million), compared to total borrowings of R21,270 million (US$2,616 million) at 31 December 2011.

Sibanye Gold may be subject to financial and other covenants and restrictions under its credit facilities from time to time. Such covenants may include restrictions on Sibanye Gold incurring additional financial indebtedness and obligations to maintain certain financial covenant ratios for as long as any amount is outstanding under such facilities.

capital expenditure

Capital expenditure for the year ended 31 December 2012 amounted to R3,107 million (US$379.4 million) compared with R2,923 million (US$405 million) for 2011. Estimated capital expenditure for 2013 is R2,935 million (US$354 million) and is intended to be funded from internal sources and, to the extent necessary, borrowings.

SiGniFicAnt AnnouncementS

During the year under review the Company was a subsidiary of Gold Fields and all significant announcements were made by the holding company.

GoinG conceRn

The financial statements have been prepared using appropriate accounting policies, supported by reasonable judgements and estimates. The directors believe that the Group and the Company have adequate resources to continue as a going concern for the foreseeable future.

At 31 December 2012 and 2011, the Group and the Company’s total liabilities exceeded its total assets. In addition, the Group and Company’s current liabilities exceeded its current assets. For more details please refer to the unaudited condensed consolidated pro forma statement of financial position on pages 21 to 23 and note 1 of the accounting policies.

directors’ report (continued)


Note 1 of the accounting policies in the financial statements also indicates why, in these circumstances, it is appropriate to prepare the financial statements on the basis applicable to a going concern. This basis assumes that the Group and Company will be able to realise its assets and settle its liabilities in the ordinary course of business.

pRopeRty

The register of property and mineral rights is available for inspection at the registered office of the Company during normal business hours.

occupAtionAl heAlthcARe SeRviceS

Occupational healthcare services are made available by Sibanye Gold to employees from its existing facilities. There is a risk that the cost of providing such services could increase in the future, depending upon changes in the nature of underlying legislation such as the ruling by the Constitutional Court in February 2011 against AngloGold Ashanti Limited in favour of a claimant, who suffered from silicosis. Increased costs, should they transpire, are currently indeterminate. The Company is monitoring developments in this regard. Further information is provided below under the Litigation paragraph and in note 32 to the financial statements.

enviRonmentAl obliGAtionS

The Group and the Company have made provision in the financial statements for environmental rehabilitation costs amounting to R1,739 million (US$203 million) (December 2011: R1,417 million (US$174 million)). Cash contributions of R24 million (US$3 million) (December 2011: R98 million (US$14 million)) have been paid during the year to a dedicated trust fund created to fund these provisions. The total amount invested at 31 December 2012 amounted to R1,331 million (US$155 million (December 2011: R1,237 million (US$152 million)). The unfunded portion of the environmental rehabilitation costs will be funded as the obligations are incurred over the life of the operations.

SpeciAl ReSolutionS Adopted by SubSidiARy compAnieS

For the year under review, there were no special resolutions adopted by the subsidiary companies.

litiGAtion

On 21 August 2012, a court application was served on a group of respondents that included Sibanye Gold (the “August Respondents”). On 21 December 2012, a further court application was issued and was formally served on a number of respondents, including Sibanye Gold, (the “December Respondents” and, together with the August Respondents, the “Respondents”) on 10 January 2013, on behalf of classes of mine workers, former mine workers and their dependants who were previously employed by, or who are currently employed by, among others, Sibanye Gold and who allegedly contracted silicosis and/or other occupational lung diseases (the “Classes”). The court application of 21 August 2012 and the court application of 21 December 2012 are together referred to below as the “Applications”.

These Applications request that the court certify a class action to be instituted by the applicants on behalf of the Classes. The Applications are the first and preliminary steps in a process where, if the court were to certify the class action, the applicants may, in a second stage, bring an action wherein they will attempt to hold the Respondents liable for silicosis and other occupational lung diseases and resultant consequences. In the second stage, the Applications contemplate addressing what the applicants describe as common legal and factual issues regarding the claim arising from the allegations of the entire Classes. If the applicants are successful in the second stage, they envisage that individual members of the Classes could later submit individual claims for damages against the respective Respondents. The Applications do not identify the number of claims that may be instituted against the Respondents or the quantum of damages the applicants may seek.

With respect to the Applications, Sibanye Gold has filed a notice of its intention to oppose the application and has instructed its attorneys to defend the claims. Sibanye Gold and its attorneys are engaging with the applicants’ attorneys in both Applications to try to establish a court-sanctioned process to agree the timelines, (including the date by which Sibanye Gold must file its papers opposing the Applications) and the possible consolidation of the separate applications. At this stage, Sibanye Gold cannot quantify their potential liability from these actions.

Other than the above, Sibanye Gold is not a party to any material legal or arbitration proceedings, nor is any of its property the subject of pending material legal proceedings.


directors’ report (continued)

AdminiStRAtion

The office of Company Secretary of Sibanye Gold was held by Gold Fields Group Services Proprietary Limited for the year under review. As from 1 January 2013 Mr C Farrel was appointed Company Secretary.

With effect from 11 February 2013 Computershare Investor Services Proprietary Limited became the Company’s South African transfer secretaries and Capita Registrars became the United Kingdom registrars of the Company.

AuditoRS

The Audit Committee has recommended to the Board that KPMG continues in office in accordance with section 90(1) of the Companies Act.

SubSidiARy compAnieS

Details of major subsidiary companies in which the Company has a direct or indirect interest are set out on page 80.



Share capital statement

ShARe cApitAl

Authorised and issued

At the shareholder’s meeting held on 21 November 2012, the Company’s authorised and issued share capital each consisting of 1,000 par value shares of R1.00 each was converted into 1,000 ordinary shares with no par value. The authorised share capital was increased by the creation of a further 999,999,000 ordinary no par value shares, each ranking pari passu in all respects with the existing no par value shares in the Company’s share capital so as to result in the Company’s authorised share capital being 1,000,000,000 ordinary no par value shares. As at 31 December 2012 the authorised share capital was 1,000,000,000 ordinary no par value shares and the issued share capital was 1,000 ordinary no par value shares.

On 1 February 2013, Gold Fields subscribed for a further 731,647,614 shares in Sibanye Gold for R17,246 million. As of this date the issued share capital was 731,648,614 ordinary no par value shares.

In terms of the general authority granted at the shareholder’s meeting on 21 November 2012, the authorised but unissued ordinary share capital of the Company representing not more than 5% of the issued share capital of the Company from time to time, after setting aside so many ordinary shares as may be required to be allotted and issued pursuant to the share incentive scheme, was placed under the control of the directors. This authority expires at the next annual general meeting where shareholders will be asked to place under the control of the directors the authorised but unissued ordinary share capital of the Company representing not more than 5% of the issued share capital of the Company from time to time.

Repurchase of shares

The Company has not exercised the general authority granted to buy back shares from its issued ordinary share capital granted at the shareholders’ meeting held on 21 November 2012. At the next annual general meeting, shareholders will be asked to review the general authority for the acquisition by the Company, or a subsidiary of the Company, of its own shares.



to the ShAReholdeRS oF SibAnye Gold limited

We have audited the group financial statements and financial statements of Sibanye Gold Limited, which comprise the statements of financial position at 31 December 2012, and the income statements, statements of comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements which include a summary of significant accounting policies and other explanatory notes, as set out on pages 39 to 106.

directors’ responsibility for the financial statements

The Company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

opinion

In our opinion, these financial statements present fairly, in all material respects, the consolidated and separate financial position of Sibanye Gold Limited at 31 December 2012, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

other reports required by the companies Act

As part of our audit of the financial statements for the year ended 31 December 2012, we have read the Corporate Secretary’s confirmation, Directors’ Report and the Audit Committee Statement for the purpose of identifying whether there are material inconsistencies between these reports and the audited financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

KPmG inc.

Registered Auditor

Per Coenie Basson 85 Empire RoadChartered Accountant (SA) ParktownRegistered Auditor 2193Director Gauteng South Africa 5 April 2013

independent auditors’ report


Remuneration reportfor the year ended 31 December 2012

The Remuneration Committee’s (the “Committee”) main task is to ensure that executive remuneration is aligned with the delivery of the Group’s strategy for growth over the long term. The total remuneration of senior executives of Gold Fields, which included senior executives of Sibanye Gold, was reviewed in 2011 and the findings reflected that the remuneration of senior executives of Gold Fields was poorly positioned in relation to its peer group. A comprehensive review was conducted and the Remuneration Committee of Gold Fields effected changes to the remuneration mix of senior executives. All elements of the variable pay strategy underwent change and this was implemented in 2012.

Sibanye Gold believes that the financial rewards to management for 2012 have been consistent with their achievements, and that the new approach to remuneration will continue to incentivise management to deliver excellent performance in future years and is more appropriately aligned to the market. A year-on-year comparison will be difficult as the remuneration structure for senior management underwent extensive changes in 2012. Going forward the year-on-year comparison will also be difficult due to Sibanye Gold’s unbundling and changes in management structures of Sibanye Gold from 2013.

It should therefore be noted that all information disclosed in this Remuneration Report for the years prior and up to 31 December 2012 was in compliance with remuneration policies set by the Gold Fields Group Remuneration Committee (the “Gold Fields Remuneration Committee”). As such, information reported for the financial year 2012 will be in respect of the Gold Fields’ senior executives and not that of Sibanye Gold as a standalone independent company. The current policies of Gold Fields were adopted by Sibanye Gold and are in the process of review and will be submitted to the Committee for consideration and approval.

2013 RemuneRAtion policy

The key principles of Sibanye Gold’s remuneration policy are:●● support the execution of the Group’s business strategy;●● provide competitive rewards to attract, motivate and retain highly skilled executives;●● motivate and reinforce individual, team and business performance; and●● ensure Sibanye Gold’s remuneration arrangements are equitable and facilitate the deployment of people across the Group’s

operations.

Sibanye Gold’s business strategy requires that the Company’s reward (remuneration and benefits) strategies are sufficiently robust and innovative to attract people with the requisite skills.

At Sibanye Gold, reward (remuneration and benefits) has been identified as the means by which behaviour that is critical for success is to be effected; it has been established as a strategic driver of performance. The reward strategy and philosophy adopted form an integral part of the people strategy and promote a holistic total reward approach of combining remuneration with other elements of reward to attract, retain and motivate employees. The principle of performance-based remuneration is one of the cornerstones of the reward strategy. The reward strategy is also underpinned by sound remuneration management and governance principles which are promoted across Sibanye Gold in order to ensure the consistent application of the reward strategy and policy.

The Sibanye Gold reward strategy includes the following elements:●● Guaranteed remuneration●● Benefits●● Annual bonus●● Bonus shares●● Performance shares

RemuneRAtion mix

Sibanye Gold remuneration philosophy is aimed at attracting and retaining motivated, high-calibre employees aligned with the interests of shareholders. Such alignment is achieved through an appropriate mix of guaranteed and performance-based remuneration (variable pay), which provides for differentiation between high, average and low performers. The pay mix of guaranteed and variable remuneration differs according to the level of the individual in the Company. Generally, more senior employees’ remuneration will consist of a higher portion of variable pay as a percentage of their total package. The maximum at-risk rewards that could be earned are twice the on-target percentages for both the annual bonus and performance shares.

The remuneration policy aligns senior executives’ interests with shareholders by promoting and measuring performance that drives long-term growth and sustained shareholder value. The following remuneration mix for the period under review was approved by the Gold Fields Remuneration Committee and adopted by Sibanye Gold for 2013.


Role totalGuaranteed

payAnnual bonus

bonus shares

performance shares

Chief Executive Officer 100% 36% 24% 16% 24%

Chief Financial Officer 100% 39% 23% 15% 23%

Chief Operating Officer 100% 41% 22% 15% 22%

Senior Vice President 100% 43% 21% 14% 21%

Guaranteed remuneration

Sibanye Gold endeavours to reward its people fairly and consistently according to their role and individual contribution to the Company. To achieve external equity and a competitive total remuneration position, Sibanye Gold surveys the relevant markets continuously. The benchmark for guaranteed remuneration is the market median for the relevant market, with a significant proportion of performance-related variable pay comprising short, medium and long-term incentives.

Guaranteed remuneration is reviewed annually in March. A decision was, however, taken to freeze the salaries of senior executives for 2013 due to the challenging economic times and in light of the revenue lost in 2012 due to the illegal strike action. No salary increases will be awarded to top management.

Annual bonus

Executive directors are able to earn bonuses of 60% for the Chief Financial Officer (“CFO”) and 65% for the Chief Executive Officer (“CEO”) of their Guaranteed Remuneration Package (“GRP”) for on-target performance, which will be based on Group and personal performance. The annual bonus could increase above 60% and 65% due to stretch target achievement. The maximum earning potential is capped at twice the on-target bonus percentage.

In the case of the CEO and the CFO, 65% of the annual bonus is based on Group objectives and the remaining 35% on personal objectives.

In 2012 annual bonuses were based on targets approved in advance by the Gold Fields Remuneration Committee, comprising a combination of Gold Fields Group, Operational and Personal Objectives.

For the year ended 31 December 2012, the Group performance measures for the senior executives were set by the Gold Fields Remuneration Committee and their weighing were as follows: ●● Safety 39%;●● Production 23%;●● Cost 23%; and●● Development 15%.

Sibanye Gold’s objectives for the senior executives comprise the same four elements, however, the weightings for the 2013 objectives will be set by the Committee.

Operational objectives are measured against the operational plans approved by the Board which covers safety, production, costs and progress in developing long-term ore reserves. Personal objectives are developed every year for each executive based on key performance areas and are approved at the beginning of the year by the Committee. Performance against these objectives is reviewed by the Committee at the end of the year.

Remuneration report (continued)


For the year ended 31 December 2012, the Gold Fields Group performance measures for senior executives which included Sibanye Gold were:

2012

weight Actualthreshold

0.00%target100%

maximum200% Achieved

Safety improvement – % average all rates year-on-year 39% 9.4% 0% 10% 20% 94%

Gold (equivalent) production – ’000 oz1 23% 3,5431 3,392 3,730 4,068 45%

NCE operations only – R million 23% 36,346 37,346 35,568 33,789 56%

Development and waste mined – % increase 15% 7.8% 0% 5% 10% 156%

100% 83%¹ Calculated as follows: Actual gold equivalent managed production of 3,348,000 ounces, plus an adjustment for ounces lost during the illegal strike at KDC and Beatrix of 145,000 ounces, plus 50,000 equivalent ounces at Cerro Corona, were the actual copper production is converted to equivalent ounces at the planned gold and copper prices for bonus purposes so as to eliminate the actual gold and copper price ratio over which there is no control.

In addition to corporate performance as determined by the above scorecard, individual performance is also considered in determining the annual performance incentive award. The CEO develops specific individual objectives with his direct reports at the beginning or prior to the beginning of each year. These objectives are then reviewed with the Committee and form the basis upon which the executives’ performance will be reviewed at the end of the year. Based on the bonus accrued for the year ended 31 December 2012, the annual bonus as a percentage of annual pay paid to directors of Sibanye Gold in February 2013 was:

name Actual 2012 Annual incentive

Morapedi Mutloane* 0%

Kgabo Moabelo 62%

Nicholas Holland 77%

Peter Turner 45%

Paddy Govender 41%

Charl Keyter** 37% *Morapedi Mutloane resigned and forfeited his annual incentive.** Charl Keyter was on a lower bonus base percentage for 2012.

directors’ fees

In terms of the Memorandum of Incorporation, the fees for services as non-executive directors are determined by the Company at a general meeting.

non-executive directors’ fees, executive directors and prescribed officers’ remuneration

Prior to 1 January 2013, no member of the Board served Sibanye Gold exclusively. None of the current directors acted as directors of Sibanye Gold in the year ended December 2012, except for Charl Keyter who was appointed to the Board on 9 November 2012. None of the current directors received compensation for services performed for Sibanye Gold in any capacity in the year ended December 2012 and 2011, except for Charl Keyter. The remuneration of all other directors and prescribed officers were paid by the other companies in the Gold Fields Group for 2012 and 2011.

The former directors, Nicholas Holland, Kgabo Moabelo, Peter Turner and Paddy Govender resigned effective 31 December 2012. Former Director Morapedi Mutloane resigned effective 9 November 2012.

As Sibanye Gold was a wholly owned subsidiary of Gold Fields during the year ended 31 December 2012, Gold Fields’ prescribed officers are deemed to be the prescribed officers of Sibanye Gold. The prescribed officers of Sibanye Gold will change during 2013 to be aligned with its’ new executive committee.



The directors and prescribed officers of Gold Fields which included Sibanye Gold were paid the following remuneration during the year ended 31 December 2012:

2012

SalaryR’000

AnnualbonusR’000

Sharesproceeds

R’000

pension scheme

total contributions

R’000

expenseallowance

R’000

For the period ended

31 december 2012

R’000

For the period ended

31 december 2011

R’000

executive directors

Nicholas Holland 9,310 8,460 25,389 1,573 600 45,332 32,699

Charl Keyter* 285 281 143 40 – 749 –

Kgabo Moabelo 3,499 3,102 321 467 – 7,389 4,412

Peter Turner 5,032 3,394 4,521 798 – 13,745 10,197

Paddy Govender 2,385 3,042 3,809 403 – 9,639 –

Morapedi Mutloane** 4,371 19 1,976 148 – 6,514 –

prescribed officers

Paul Schmidt 5,465 5,553 8,001 614 327 19,960 8,793

Zakira Amra 2,250 – – 128 – 2,378 2,192

Naseem Chohan 2,464 1,402 236 325 – 4,427 3,279

Jimmy Dowsley 3,115 3,298 4,110 765 – 11,288 7,208

Michael Fleischer 4,603 4,307 8,462 741 – 18,113 11,172

Juan Kruger 4,753 5,726 5,455 916 – 16,850 13,933

Tommy McKeith 7,391 3,782 7,985 212 – 19,370 11,996

Tim Rowland 3,227 2,679 4,854 595 71 11,426 6,388

Peet van Schalkwyk 4,827 2,771 113 – – 7,711 3,609

Richard Weston 5,483 2,909 20 632 – 9,044 7,491

Willie Jacobsz 2,102 3,325 3,551 – – 8,978 –

Total 70,562 54,050 78,946 8,357 998 212,913 123,369

* Charl Keyter remuneration for the period 9 November 2012 to 31 December 2012.** Morapedi MC Mutloane remuneration includes separation payments on resignation.

The Guaranteed remuneration package (“GRP”) payable to the CEO and CFO for the 2013 financial year is expected to be as follows:●● CEO: Mr Neal Froneman; R7,000,000●● CFO: Mr Charl Keyter; R3,500,000

The following remuneration shall be payable to non-executive directors of the Company with effect from 1 January 2013:

per annum

The Chair of the Board R1,500, 000

The Chair of the Audit Committee R287,000

The Chairs of the Nominating and Governance Committee, Remuneration Committee, Social and Ethics Committee and Safety, Health and Sustainable Development Committee (excluding the Chairman of the Board) R177,000

Members of the Board (excluding the Chairman of the Board) R793,000

Members of the Audit Committee (excluding the Chair of the Board) R149,000

Members of the Nominating and Governance Committee, Remuneration Committee, Social and Ethics Committee and Safety, Health and Sustainable Development Committee (excluding the Chairman of the Board) R112,000


directors and prescribed officers’ equity-settled instruments

The directors and prescribed officers of Gold Fields which included Sibanye Gold held the following Gold Fields equity-settled instruments at 31 December 2012:

equity-settled instruments at 31 december

2011

equity-settled instruments

granted during

the year

equity-settled instruments

forfeited during

the yearequity-settled instruments exercised during the year

equity-settled instruments at 31 december

2012

number number number number

Average strike price

(cents)

Share proceeds

R’000 number

Average strike price

(cents)

executive directors

Nicholas Holland 350,590 280,549 – 224,147 105.78 25.389 406,992 84.15

Charl Keyter 40,825 16,827 – 9,558 104.06 143 48,094 108.34

Kgabo Moabelo 42,989 33,453 – 3,132 99.39 321 73,310 117.82

Peter Turner 143,221 70,700 5,625 42,784 104.76 4.521 165,512 108.84

Paddy Govender 109,635 41,073 – 43,385 – 3.809 107,323 110.50

Morapedi Mutloane 35,580 25,913 35,813 25,680 100.05 1.976 – –

prescribed officers

Paul Schmidt 181,350 92,594 4,500 69,910 107.99 8.001 199,534 87.95

Zakira Amra 15,833 – 15,833 – – – – –

Naseem Chohan 34,580 21,534 – 2,286 100.05 236 53,828 118.88

Jimmy Dowsley 142,350 51,473 5,925 41,495 104.06 4.110 146,403 80.16

Michael Fleischer 173,597 92,116 – 74,523 111.83 8.462 191,190 110.50

Juan Kruger 142,550 89,715 – 49,983 104.08 5.455 182,282 109.16

Tommy McKeith 201,930 109,623 – 69,990 111.83 7.985 241,563 110.16

Tim Rowland 114,415 58,052 3,000 42,820 107.59 4.854 126,647 96.59

Peet van Schalkwyk 24,400 32,010 – 1,090 100.05 113 55,320 114.38

Richard Weston 62,375 48,856 – – – 20 111,231 113,26

Willie Jacobsz 135,041 50,724 3,950 76,118 105.08 3.551 105,697 84.99

●● The former directors, Nicholas Holland, Kgabo Moabelo, Peter Turner and Paddy Govender resigned effective 31 December 2012.●● Peter Turner resigned as a director of Sibanye Gold effective 31 December 2012 and was appointed Chief Operating Officer for

Sibanye Gold.

To ensure that Sibanye Gold’s remuneration policy fully supports the Group’s commitment to high performance and to continue to attract high-calibre talent, remuneration levels must be competitive, but oriented more towards variable performance-based incentives that provide reward only where robust performance hurdles are met to increase shareholder value.

All scheme rules and targets were regularly reviewed by the Gold Fields Remuneration Committee to ensure they remain relevant and effective in enabling Sibanye Gold business objectives by driving appropriate behaviours and providing retention incentives.

Individuals who held Gold Fields shares on unbundling have received a pro rata vesting based on the no fault termination rules of the Share Plan and the forfeited shares were converted to Sibanye Shares. Refer to the Sibanye Gold 2013 Share Plan detailed below.


As at 1 March 2013, the current Sibanye Gold executive committee held the following number of Sibanye Gold shares:

SIBANYE PERFORMANCE ShARES AT END FEBRuARY 2013

name position number

Neal Froneman CEO 1,190,713

Charl Keyter CFO 158,727

Peter Turner Chief Operating Officer 617,087

Cain Farrel Company Secretary 112,235

Shadwick Bessit SVP – Technical Services 127,737

Dawie Mostert SVP – Organisational Effectiveness –

Adam Mutshinya SVP – Human Capital 80,275

Robert van Niekerk SVP – Organisational Effectiveness 400,234

James Wellsted SVP – Corporate Affairs –

the Sibanye Gold 2013 Share plan

Sibanye Gold has in place a new share plan for its employees, the 2013 Share Plan. The 2013 Share Plan consists of two equity instruments: (i) restricted shares (bonus shares) and (ii) performance shares.

The number of performance shares to be awarded to an employee will be based on the employee’s annual salary, grade and performance. The performance shares are expected to be settled on the third anniversary of the award date.

Based on the rules of the 2013 Share Plan, the actual number of performance shares which will be settled to a participant three years after the original award date will be determined by Sibanye Gold’s performance measured against the individual performance of five other gold mining companies (the “Peer Group”). This Peer Group still needs to be determined and approved by the Committee. The performance shares, which will be settled, are based on the relative change in the Sibanye Gold share price compared to the respective share prices of the individual companies within the Peer Group. For performance share awards to be settled to executives, an internal company performance target is required to be met before the external relative measure is applied. The target performance criterion is expected to be set at 85% of Sibanye Gold’s expected gold production over the three-year measurement period as set out in the business plans of Sibanye Gold as approved by the Board. Only once the internal measure has been achieved, will the external measure (Sibanye Gold’s share price performance measured against the abovementioned Peer Group) be applied to determine the scale of the vesting of awards of performance shares.

Based on the rules of the 2013 Share Plan, and in addition to the performance shares, an award of restricted shares will be made based on an employee’s annual cash bonus calculated with reference to actual performance against pre-determined targets for the fiscal year ending immediately preceding the award date. The restricted shares vest in two equal parts at nine months and 18 months after the award date.

In terms of the Gold Fields Limited Plans, all Gold Fields shares would vest pro rata (“no fault termination” rules will apply) to Sibanye Gold employees. The proportionate unvested options under the Gold Fields Limited Share Plans on date of unbundling were replaced with Sibanye Gold shares to the equivalent value.

The value of the unvested options were valued and adjusted at the average share price of Gold Fields 10 business days prior to the listing of Sibanye Gold (10-day VWAP). These options were then replaced with Sibanye Gold shares to the equivalent value based on the Sibanye Gold share price three days prior to 1 March 2013 (three-day VWAP).

This process was completed and the final conversion figure was received by Sibanye Gold from the administrators of the plan on 14 March 2013. As a result, there is insufficient number of shares available for the March Annual 2013 allocation. Shareholders will be requested to approve the amendment of the Sibanye Gold 2013 Share Plan at the Annual General Meeting.



executive directors’ contracts of employment

The employment of an executive director will continue until terminated upon (i) 24 or 12 months’ notice by either party for the CEO and CFO, respectively, or (ii) retirement of the relevant executive director (currently provided for at age 60 in the contract). Sibanye Gold can also terminate the executive director’s employment summarily for any reason recognised by law as justifying summary termination.

The employment contracts also provide that, in the event of the relevant executive director’s employment being terminated solely as a result of a “change of control” as defined below, and within 12 months of the change of control, the director is entitled to: (i) payment of an amount equal to twice his GRP, or two and a half times in the case of the CEO; (ii) payment of an amount equal to the average of the incentive bonuses paid to the executive director during the previous two

completed financial years;(iii) any other payments and/or benefits due under the contracts; (iv) payment of any annual incentive bonus he has earned during the financial year notwithstanding that the financial year is incomplete; (v) an entitlement, for two years after the date of termination, subject to the relevant rules of the Sibanye Gold Limited Management

Incentive Scheme then in force, to retain and to exercise all share options vested to him; and (vi) an entitlement to be settled Restricted Shares allocated and awarded to him, subject to the rules of the Sibanye Gold Limited

Share Plan then in force.

The employment contracts further provide that these payments cover any compensation or damages the executive director may have under any applicable employment legislation.

A “change of control” for the above is defined as the acquisition by a third party or concert parties of 30% or more of Sibanye Gold ordinary shares.

In the event of the consummation of an acquisition, merger, consolidation, scheme of arrangement or other reorganisation, whether or not there is a change of control, if the executive director’s services are terminated, the “change of control” provisions summarised above also apply.

The Committee resolved to discontinue the compensation entitlement in the event of change of control for senior executive appointed from 1 January 2013. The senior executives who are currently entitled to the change of control compensation benefits will be grandfathered.

directors and officers’ disclosure of interests in contracts

The Company was a wholly owned subsidiary of Gold Fields as at 31 December 2012 and its issued shares were not listed on any securities exchanges, accordingly the directors and their associates held no interest in any shares and the Company had no public shareholders as defined in the JSE Listings Requirements. The interests of any director or associate in the Company’s shares post 31 December 2012 is as disclosed above.


Accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, except for the adoption of new and revised standards and interpretations.

1. RepoRtinG entity

Sibanye Gold Limited (“Sibanye Gold” or the “Company”) is a South African focused gold producer, newly listed on the Johannesburg Stock Exchange (“JSE”) and New York Stock Exchange (“NYSE”), following the unbundling by Gold Fields Limited (“Gold Fields”), of its wholly owned subsidiary, Sibanye Gold (previously GFI Mining South Africa Proprietary Limited (“GFIMSA”)). Sibanye Gold’s principal operations are the Kloof-Driefontein Complex (“KDC”), and Beatrix mines as well as a number of service company subsidiaries, collectively referred to as the “Group”.

The Gold Fields board of directors approved on 21 November 2012, and subsequently announced on 29 November 2012, the unbundling of Sibanye Gold into an independent, publicly traded company. The unbundling would result in Gold Fields distributing, on a pro rata basis, Sibanye Gold ordinary shares to Gold Fields shareholders and Gold Fields American Depositary Receipts (“ADR”) holders who held their shares or ADRs as at the record date for the unbundling.

Sibanye Gold was a wholly owned subsidiary of Gold Fields for the years ended 31 December 2012 and 2011.

Included in current liabilities at 31 December 2012 is R17,108 million (US$1,996 million) (2011: R21,258 million (US$2,615 million)) owed by Sibanye Gold to GFL Mining Services Limited (“GFLMS”, a subsidiary of Gold Fields) (the “GFLMS loan”). As a result of the GFLMS loan, the Group’s total liabilities exceeded its total assets by R9,673 million (US$1,129 million) and R11,976 million (US$1,473 million) as of 31 December 2012 and 31 December 2011, respectively. In addition, the Group’s current liabilities exceeded its current assets by R19,681 million (US$2,296 million) and R22,265 million (US$2,739 million), respectively, at those dates.

The Company’s total liabilities exceeded its total assets by R10,011 million and R12,160 million as at 31 December 2012 and 31 December 2011, respectively. The Company’s current liabilities exceeded its current assets by R19,881 million (US$2,320) and R22,442 million (US$2,760), respectively at those dates.

On 1 February 2013, Gold Fields subscribed for a further 731,647,614 shares in Sibanye Gold at a subscription price of R17,246 million (US$2,012 million). Sibanye Gold used R17,108 million (US$1,996 million) of the proceeds to repay the GFLMS loan (the share subscription and the repayment of the GFLMS loan, collectively referred to as the “Share subscription”).

Sibanye Gold began trading on 11 February 2013 on the JSE and the NYSE. The entire issued share capital of Sibanye Gold was unbundled to existing Gold Fields shareholders on 18 February 2013, by way of a distribution in specie in accordance with Section 46 of the Companies Act, Section 46 of the Income Tax Act and the JSE Listings Requirements. The Sibanye Gold shares were unbundled in a ratio of 1:1 with Gold Fields shares and resulted in Gold Fields’ shareholders holding two separate shares; a Sibanye Gold share as well as their original Gold Fields share. After the unbundling Sibanye Gold is now a fully independent, publicly traded company with a new board of directors and management.

On 18 February 2013, Sibanye Gold refinanced all of its debt which existed under the Gold Fields group debt facilities, by drawing down under the R6.0 billion (US$700 million) term loan and revolving credit facilities obtained on 28 November 2012, as detailed in note 22.

As a result of the Share subscription, the Company and Group’s total assets exceeds its total liabilities.

The directors believe the Share subscription and the refinancing of all its debt, in conjunction with the cash-generated from operations and the remaining balance of the Company’s revolving credit facility will enable the Company and the Group to continue to meet its obligations as they fall due.


2. bASiS oF pRepARAtion

The financial statements of the Group and Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and Interpretations of the IFRS Interpretations Committee as adopted by the International Accounting Standards Board, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, as well as the requirements of the South African Companies Act and JSE Listing requirements. The consolidated and Company financial statements have been prepared under the historical cost convention, as modified by available-for-sale financial assets, and financial assets and liabilities (including derivative instruments), which have been brought to account at fair value through profit or loss or through the fair value adjustment reserve in the statement of comprehensive income.

Standards, interpretations and amendments to published standards effective for the year ended 31 december 2012

During the financial year, the following new and revised accounting standards, amendments to standards and new interpretations were adopted by the Group:

Standard(s)Amendment(s)interpretation(s) n

atur

e o

f

the

cha

nge

Salient features of the change(s)

imp

act

on

fina

ncia

l p

osi

tio

n o

r p

erfo

rman

ce

iAS 12 Deferred tax: Recovery of Underlying Assets

Am

endm

ent

●● Introduces an exception to the general measurement requirements of IAS 12 Income Taxes in respect of investment properties measured at fair value; and

●● The measurement of deferred tax assets and liabilities, in this limited circumstance, is based on a rebuttable presumption that the carrying amount of the investment property will be recovered entirely through sale. The presumption can be rebutted only if the investment property is depreciable and held within a business model whose objective is to consume substantially all of the asset’s economic benefits over the life of the asset.

No

impa

ct

iFRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters

Am

endm

ent

●● Replaces the fixed dates in the derecognition exception and the exemption related to the initial fair value measurement of financial instruments; and

●● Add a deemed cost exemption to IFRS 1 First-time Adoption of International Financial Reporting Standards that an entity can apply at the date of transition to IFRSs after being subject to severe hyperinflation.

No

impa

ct

iFRS 7 Disclosures – Transfers of Financial Assets

Am

endm

ent The amendments introduce new disclosure requirements about

transfers of financial assets including disclosures for:●● Financial assets that are not derecognised in their entirety;

and●● Financial assets that are derecognised in their entirety but for

which the entity retains continuing involvement.

No

impa

ct


Accounting policies (continued)

Standards, interpretations and amendments to published standards which are not yet effective

Certain new standards, amendments and interpretations to existing standards have been published that apply to the Group’s accounting periods beginning on 1 January 2013 or later periods but have not been early adopted by the Group. Management is currently reviewing the impact of these standards on the Group. These standards, amendments and interpretations are:

Standard(s) Amendment(s) interpretation(s) n

atur

e o

f th

e ch

ang

e


eff

ecti

ve

dat

e*

iAS 1 Presentation of Financial Statements: Presentation of Items of Other Comprehensive Income

Am

endm

ent

●● Requires that an entity present separately the items of other comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would never be reclassified to profit or loss;

●● It does not change the existing option to present profit or loss and other comprehensive income in two statements;

●● The title of the statement of comprehensive income changes to the statement of profit or loss and other comprehensive income. However, an entity is still allowed to use other titles; and

●● The amendment does not address which items are presented in other comprehensive income or which items need to be reclassified. The requirements of other IFRSs continue to apply in this regard.

1 Ju

ly 2

012

iAS 19 Employee Benefits: Defined Benefit Plans

Am

endm

ent

●● Requires that actuarial gains and losses are recognised immediately in other comprehensive income; this change will remove the corridor method and eliminate the ability for entities to recognise all changes in the defined benefit obligation and in plan assets in profit or loss, which currently is allowed under IAS 19 Employee Benefits; and

●● Expected return on plan assets recognised in profit or loss is calculated based on the rate used to discount the defined benefit obligation.

1 Ja

nuar

y 20

13iAS 27 Separate Financial Statements (2011)

Rev

isio

n ●● IAS 27 (2011) supersedes IAS 27 Consolidation and Separate Financial Statements (2008) and carries forward the existing accounting and disclosure requirements for separate financial statements, with some minor clarifications. 1

Janu

ary

2013

iAS 28 Investments in Associates and Joint Ventures (2011)

Am

endm

ent

●● IFRS 5 Non-current Assets Held for Sale and Discontinued Operations applies to an investment, or a portion of an investment, in an associate or a joint venture that meets the criteria to be classified as held for sale; and

●● On cessation of significant influence or joint control, even if an investment in an associate becomes an investment in a joint venture or vice versa, the entity does not remeasure the retained interest.

1 Ja

nuar

y 20

13

iAS 32 Offsetting Financial Assets and Financial Liabilities

Am

endm

ent The amendments clarify that an entity currently has a legally

enforceable right to set-off if that right is:●● Not contingent on a future event; and●● Enforceable both in the normal course of business and in the

event of default, insolvency or bankruptcy of the entity and all counterparties. 1

Janu

ary

2014



atur

e o

f th

e ch

ang

e


eff

ecti

ve

dat

e*

iFRS 1 Government Loans

Am

endm

ent

●● This project seeks to amend the requirements for first-time adoption to mirror the requirements for existing IFRS preparers in relation to the application of amendments made to IAS 20 Accounting for Governments Grants and Disclosure of Government Assistance in relation to accounting for government loans; and

●● The amendments to IAS 20 were made in 2008, requiring an entity to measure government loans with a below-market rate of interest at fair value on initial recognition.

1 Ja

nuar

y 20

13

iFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities

Am

endm

ent ●● The amendments contain new disclosure requirements for

financial assets and financial liabilities that are offset in the statement of financial position, or are subject to enforceable master netting arrangements or similar agreements. 1

Janu

ary

2013

iFRS 9 Financial Instruments (2009)

New

sta

ndar

d

●● This IFRS is part of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement;

●● Addresses classification and measurement of financial assets and replaces the multiple classification and measurement models in IAS 39 with a single model that has only two classification categories: amortised cost and fair value; and

●● The classification and measurement of financial liabilities are the same as per IAS 39 barring two aspects.

1 Ja

nuar

y 20

15

iFRS 9 Financial Instruments (2010)

New

sta

ndar

d

●● Adds the requirements related to the classification and measurement of financial liabilities, and derecognition of financial assets and liabilities to the version issued in November 2009; and

●● Includes those paragraphs of IAS 39 dealing with how to measure fair value and accounting for derivatives embedded in a contract that contains a host that is not a financial asset, as well as the requirements of IFRIC 9 Reassessment of Embedded Derivatives.

1 Ja

nuar

y 20

15

iFRS 10 Consolidated Financial Statements

New

sta

ndar

d ●● IFRS 10 introduces a new approach to determining which investees should be consolidated and provides a single model to be applied in the control analysis for all investees;

●● Control is reassessed as facts and circumstances change; and●● IFRS 10 supersedes IAS 27 (2008) and SIC-12 Consolidation

– Special Purpose Entities. 1 Ja

nuar

y 20

13

iFRS 11 Joint Arrangements

New

st

anda

rd

●● Focuses on the rights and obligations of joint arrangements, rather than the legal form (as is currently the case); and

●● IFRS 11 supersedes IAS 31 Interests in Joint Ventures and SIC-13 Jointly Controlled Entities – Non-Monetary Contributions by Venturers.

1 Ja

nuar

y 20

13




atur

e o

f th

e ch

ang

e


eff

ecti

ve

dat

e*

iFRS 12 Disclosure of Interests in Other Entities

New

sta

ndar

d

IFRS 12 contains the disclosure requirements for entities that have interests in subsidiaries, joint arrangements (i.e. joint operations or joint ventures), associates and/or unconsolidated structured entities, aiming to provide information to enable users to evaluate:●● The nature of, and risks associated with, an entity’s interests in

other entities; and●● The effects of those interests on the entity’s financial position,

financial performance and cash flows.

1 Ja

nuar

y 20

13

iFRS 13 Fair Value Measurement

New

sta

ndar

d

●● IFRS 13 replaces the fair value measurement guidance contained in individual IFRSs with a single source of fair value measurement guidance; and

●● It does not introduce new requirements to measure assets or liabilities at fair value, nor does it eliminate the practicability exceptions to fair value measurements that currently exist in certain standards.

1 Ja

nuar

y 20

13

Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance

Am

endm

ent ●● The amendment clarifies the transition guidance in IFRS 10

Consolidated Financial Statements.

1 Ja

nuar

y 20

13

Various iFRSs Annual improvements project is a collection of amendments to IFRS and are the result of conclusions reached by the Board on proposals made at its annual improvements project.

1 Ja

nuar

y 20

13Amendments to iFRS 10, iFRS 12 and iAS 27 – Investment entities

Am

endm

ent

The amendments clarify that a qualifying investment entity is required to account for investments in controlled entities, as well as investments in associates and joint ventures, at fair value through profit or loss; the only exception would be subsidiaries that are considered an extension of the investment entity’s investment activities. The consolidation exemption is mandatory and not optional.

1 Ja

nuar

y 20

14

iFRic 20 Stripping Costs in the Production Phase of a Surface Mine

New

in

terp

reta

tion The interpretation requires production stripping costs in a surface mine to be capitalised if certain criteria are met.

1 Ja

nuar

y 20

13

*Effective date refers to annual period beginning on or after said date.

Significant accounting judgements and estimates

Use of estimates: The preparation of the financial statements requires the Group’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The determination of estimates requires the exercise of judgement based on various assumptions and other factors such as historical experience, current and expected economic conditions, and in some cases actuarial techniques. Actual results could differ from those estimates.


The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis of future cash flow estimates and unit-of-production depreciation, depletion and amortisation calculations; environmental, reclamation and closure obligations; asset impairments, write-downs of inventory to net realisable value; the fair value and accounting treatment of derivative financial instruments and deferred taxation.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the financial year are discussed below.

carrying value of property, plant and equipment

All mining assets are amortised using the units-of-production method where the mine operating plan calls for production from proved and probable mineral reserves.

Mobile and other equipment are depreciated over the shorter of the estimated useful life of the asset or the estimate of mine life based on proved and probable mineral reserves.

The calculation of the units-of-production rate of amortisation could be impacted to the extent that actual production in the future is different from current forecast production based on proved and probable mineral reserves. This would generally result from the extent that there are significant changes in any of the factors or assumptions used in estimating mineral reserves. These factors could include:●● Changes in proved and probable mineral reserves;●● Differences between actual commodity prices and commodity price assumptions;●● Unforeseen operational issues at mine sites;●● Changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates; and●● Changes in mineral reserves could similarly impact the useful lives of assets depreciated on a straight-line basis, where

those lives are limited to the life of the mine.

The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value-in-use calculations and fair value less cost to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that the gold price assumption may change which may then impact the Group estimated life of mine determinant and may then require a material adjustment to the carrying value of property, plant and equipment.

The Group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable by comparing expected future cash flows to these carrying values. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows of each group of assets. Expected future cash flows used to determine the value in use and fair value less costs to sell of property, plant and equipment are inherently uncertain and could materially change over time. They are significantly affected by a number of factors including reserves and production estimates, together with economic factors such as spot and future gold prices, discount rates, foreign currency exchange rates, estimates of costs to produce reserves and future capital expenditure.

The Group’s carrying amount of property, plant and equipment at 31 December 2012 was R16,376.1 million (US$1,911.0 million) (2011: R15 358.8 million (US$1,889.2 million)).

mineral Reserves estimates

Mineral Reserves are estimates of the amount of product that can be economically and legally extracted from the Group’s properties. In order to calculate the reserves, estimates and assumptions are required about a range of geological, technical and economic factors, including but not limited to quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates.

Estimating the quantity and grade of the mineral reserves requires the size, shape and depth of orebodies to be determined by analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological judgements and calculations to interpret the data.



The Group is required to determine and report on the Mineral Reserves in accordance with the South African Mineral Resource Committee (SAMREC) code.

Estimates of mineral reserves may change from period to period due to the change in economic assumptions used to estimate ore reserves and due to additional geological data becoming available during the course of operations. Changes in reported proven and probable reserves may affect the Group’s financial results and position in a number of ways, including the following:●● Asset carrying values may be affected due to changes in estimated cash flows;●● Depreciation and amortisation charges to the income statement may change as these are calculated on the units-of-

production method, or where the useful economic lives of assets change;●● Decommissioning site restoration and environmental provisions may change where changes in ore reserves affect

expectations about the timing or cost of these activities; and●● The carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits.

pre-production

The Group assesses the stage of each mine construction project to determine when a mine moves into the production stage. The criteria used to assess the start date are determined based on the unique nature of each mine construction project. The Group considers various relevant criteria to assess when the mine is substantially complete, ready for its intended use and moves into the production stage. Some of the criteria would include, but are not limited to the following:●● the level of capital expenditure compared to the construction cost estimates; ●● ability to produce metal in saleable form (within specifications); and ●● ability to sustain commercial levels of production of metal.

When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs ceases and costs are expensed, except for capitalisable costs related to mining asset additions or improvements, underground mine development or ore reserve development.

income taxes

The Group is subject to income taxes in South Africa. Significant judgement is required in determining the liability for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The Group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the Group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group to realise the net deferred tax assets recorded at the reporting date could be impacted.

Additionally, future changes in tax laws in South Africa could limit the ability of the Group to obtain tax deductions in future periods.

The Group’s carrying values at 31 December 2012:●● Deferred taxation liability: R4,185.5 million (US$488.4 million) (2011: R5,020.3 million (US$617.5 million))●● Deferred taxation asset: R23.3 million (US$2.7 million) (2011: R18.3 million (US$2.3 million))●● Taxation and royalties payable: R96.6 million (US$11.3 million) (2011: R733.8 million (US$90.2 million))

provision for environmental rehabilitation costs

The Group’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The Group recognises management’s best estimate for asset retirement obligations in the period in which they are incurred. Actual costs incurred in future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision.


The Group’s carrying amounts of the rehabilitation obligations at 31 December 2012 was R1,739.1 million (US$202.9 million) (2011: R1,417.1 million (US$174.3 million)).

Share-based payments

The Gold Fields Group issued equity-settled share-based payments to certain employees of its group including Sibanye Gold. These instruments are measured at fair value at grant date, using the Black-Scholes or Monte Carlo simulation valuation models, which require assumptions regarding the estimated term of the option, share price volatility and expected dividend yield. While Sibanye Gold’s management believes that these assumptions are appropriate, the use of different assumptions could have a material impact on the fair value of the option grant and the related recognition of share-based compensation expense in the consolidated income statement. Gold Fields’ options have characteristics significantly different from those of traded options and therefore fair values may also differ.

The Group’s income statement charge for the year ended 31 December 2012 was R263.5 million (US$32.2 million) (2011: R238.0 million (US$33.0 million)).

Financial instruments

The estimated fair value of financial instruments is determined at discrete points in time, based on the relevant market information. The fair value is calculated with reference to market rates using industry valuation techniques and appropriate models. If a financial instrument does not have a quoted market price and the fair value cannot be measured reliably, it will be stated at cost.

contingencies

Contingencies can be either possible assets or possible liabilities arising from past events which, by their nature, will only be resolved when one or more future events not wholly within the control of the Group occur or fail to occur. The assessment of such contingencies inherently involves the exercise of significant judgement and estimates of the outcome of future events.

3. conSolidAtion

3.1 business combinations

The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a business is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. Subsequently, the carrying amount of non-controlling interest is the amount of the interest at initial recognition plus the non-controlling interest’s share of the subsequent changes in equity. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit and loss.

3.2 Subsidiaries

Subsidiaries are all entities (including special-purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one-half of the voting rights so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group until the date on which control ceases.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.



The carrying value on the investments in subsidiaries in the Company’s financial statements is stated at cost less accumulated impairment losses.

3.3 transactions with non-controlling interests

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

3.4 Associates

The equity method of accounting is used for an investment over which the Group exercises significant influence, but not control, and normally owns between 20% and 50% of the voting equity. Associates are equity accounted from the date that significant influence is obtained to the date that Group ceases to have significant influence.

Results of associates are equity accounted using the results of their most recent audited annual financial statements or unaudited interim financial statements. Any losses from associates are brought to account in the consolidated financial statements until the interest in such associates is written down to zero. Thereafter, losses are accounted for only insofar as the Group is committed to providing financial support to such associates.

The carrying value of an investment in associate represents the cost of the investment, including goodwill, a share of the post-acquisition retained earnings and losses, any other movements in reserves and any impairment losses. The carrying value is assessed annually for existence of indicators of impairment and if such exist, the carrying amount is compared to the recoverable amount, being the higher of value in use or fair value less costs to sell. If an impairment in value has occurred, it is recognised in the period in which the impairment arose.

The carrying value of an associate in the Company’s financial statements is stated at cost less accumulated impairment losses.

4. FoReiGn cuRRencieS

4.1 Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in South African Rand, which is the Company’s functional and presentation currency.

4.2 transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement. Translation differences on available-for-sale equities are included in the statement of other comprehensive income.

Refer to “Additional US Dollar Information” section 18 of these accounting policies for US Dollar presentation.

5. pRopeRty, plAnt And eQuipment

5.1 mine development and infrastructure

Mining assets, including mine development and infrastructure costs and mine plant facilities, are recorded at cost less accumulated depreciation and accumulated impairment losses.

Expenditure incurred to evaluate and develop new orebodies, to define mineralisation in existing ore bodies and to establish or expand productive capacity, is capitalised until commercial levels of production are achieved, at which times the costs are amortised as set out below.

Development of orebodies includes the development of shaft systems and waste rock removal that allows access to reserves that are economically recoverable in the future. Subsequent to this, costs are capitalised if the criteria for recognition as an asset are met. Access to individual orebodies exploited by the Group is limited to the time span of the respective mining leases.


5.2 borrowing costs

Borrowing costs incurred in respect of assets requiring a substantial period of time to prepare for their intended future use are capitalised to the date that the assets are substantially completed.

5.3 mineral and surface rights

Mineral and surface rights are recorded at cost less accumulated amortisation and accumulated impairment losses. When there is little likelihood of a mineral right being exploited, or the carrying amount has exceeded its recoverable amount, impairment is recognised in the income statement in the year that such determination is made.

5.4 land

Land is shown at cost and is not depreciated.

5.5 other assets

Non-mining assets are recorded at cost less accumulated depreciation and accumulated impairment losses. These assets include the assets of the mining operations not included in mine development and infrastructure, borrowing costs, mineral and surface rights and land and all the assets of the non-mining operations.

5.6 Amortisation and depreciation of mining assets

Amortisation and depreciation is determined to give a fair and systematic charge in the income statement taking into account the nature of a particular ore body and the method of mining that ore body. To achieve this, the following calculation method are used:●● mining assets, including mine development and infrastructure costs, mine plant facilities and evaluation costs, are

amortised over the life of the mine using the units-of-production method, based on estimated proved and probable ore reserves above infrastructure.

●● Proved and probable ore reserves reflect estimated quantities of economically recoverable reserves, which can be recovered in future from known mineral deposits.

●● Certain mining plant and equipment included in mine development and infrastructure is depreciated on a straight-line basis over their estimated useful lives.

5.7 depreciation of non-mining assets

Non-mining assets are recorded at cost and depreciated on a straight-line basis over their current expected useful lives to their residual values as follows:●● Vehicles, 20%●● Computers, 33.3%●● Furniture and equipment, 10%

The assets’ useful lives, depreciation methods and residual values are reassessed at each reporting date and adjusted if appropriate.

5.8 mining exploration

Expenditure on advances to companies solely for exploration activities, prior to evaluation, is charged against income until the viability of the mining venture has been proven. Expenditure incurred on exploration “farm-in” projects is written off until an ownership interest has vested. Exploration expenditure to define mineralisation at existing ore bodies is considered mine development costs and is capitalised until commercial levels of production are achieved.

5.9 impairment

Recoverability of the carrying values of long-term assets or cash-generating units of the Group are reviewed whenever events or changes in circumstances indicate that such carrying value may not be recoverable. To determine whether a long-term asset or cash-generating unit may be impaired, the higher of “value in use” (defined as: “the present value of future cash flows expected to be derived from an asset or cash-generating unit”) or “fair value less costs to sell” (defined as: “the amount obtainable from the sale of an asset or cash-generating unit in an arm’s-length transaction between knowledgeable, willing parties, less the costs of disposal”) is compared to the carrying value of the asset/unit.



A cash-generating unit is defined by the Group as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Generally for the Group this represents an individual operating mine, including mines which are part of a larger mine complex. The costs attributable to individual shafts of a mine are impaired if the shaft is closed.

When any infrastructure is closed down during the year, any carrying value attributable to that infrastructure is impaired.

5.10 Gain or loss on disposal

Any gain or loss on disposal on an item of property plant and equipment (calculated at the net proceeds from disposal and the carrying amount of the item) is recognised in profit and loss.

6. tAxAtion

Income tax comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

Current tax is measured on taxable income at the applicable statutory rate enacted at the reporting date.

Deferred taxation is provided on temporary differences existing at each reporting date between the tax values of assets and liabilities and their carrying amounts. Substantively enacted tax rates are used to determine future anticipated effective tax rates which in turn are used in the determination of deferred taxation.

These temporary differences are expected to result in taxable or deductible amounts in determining taxable profits for future periods when the carrying amount of the asset is recovered or the liability is settled. The principal temporary differences arise from depreciation of property, plant and equipment, provisions, unutilised capital allowances and tax losses carried forward.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

Deferred tax assets relating to the carry forward of unutilised tax losses and/or unutilised capital allowances are recognised to the extent it is probable that future taxable profit will be available against which the unutilised tax losses and/or unutilised capital allowances can be recovered. Deferred tax assets are reviewed at each reporting date and are adjusted if recovery is no longer probable.

No provision is made for any potential taxation liability on the distribution of retained earnings by Group companies.

7. inventoRieS

Inventories are valued at the lower of cost and net realisable value. The Group’s inventories comprise consumable stores and are valued at weighted average cost, after appropriate provision for surplus and slow-moving items. The Group does not value gold-in-process.

8. FinAnciAl inStRumentS

Financial instruments recognised in the statement of financial position include cash and cash equivalents, investments, trade and other receivables, related party receivables, borrowings, trade and other payables, related party payables and derivative financial instruments.

The Group initially recognised loans and receivables on the date they are originated. All other financial assets (including assets designated at fair value through profit and loss) are recognised initially on trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. The Group derecognised a financial asset when the contractual rights to the cash flows in a transaction in which substantially all the risks and rewards of the ownership of the financial asset are transferred. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expired. Any interest in such transferred financial asset that is created or retained by the Group is recognised as a separate asset or liability. The particular recognition and measurement methods adopted are disclosed in the individual policy statements associated with each item.


A financial asset not classified as fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset and loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably.

8.1 investments

Investments comprise investments in unlisted companies which are accounted for at directors’ valuation adjusted for write-downs where appropriate.

8.2 cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value and are measured at amortised cost which is deemed to be fair value as they have a short-term maturity.

Bank overdrafts are included within current liabilities in the statement of financial position.

8.3 trade receivables

Trade receivables are initially recognised at fair value and subsequently carried at amortised cost less allowance for impairment. Estimates made for impairment are based on a review of all outstanding amounts at period end. Irrecoverable amounts are written off during the period in which they are identified.

8.4 trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

8.5 Financial guarantees

Financial guarantee contracts are accounted for as financial instruments and are recognised initially at fair value and are subsequently measured at the higher of the amount determined in accordance with IAS 37 (Provisions, contingent liabilities and assets), and the initial amount recognised less cumulative amortisation.

8.6 borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred, where applicable and subsequently measured at amortised cost using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Interest payable on borrowings is recognised in the income statement over the term of the borrowings using the effective interest method.

Finance expense comprises interest on borrowings and environmental rehabilitation liability offset by interest capitalised on qualifying assets.

Cash flows from interest paid are classified under operating activities in the statement of cash flows.

9. pRoviSionS

Provisions are recognised when the Group has a present obligation, legal or constructive resulting from past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

10. enviRonmentAl obliGAtionS

Long-term environmental obligations are based on the Group’s environmental management plans, in compliance with applicable environmental and regulatory requirements.

Full provision is made based on the net present value of the estimated cost of restoring the environmental disturbance that has occurred up to the reporting date. The unwinding of the obligation is accounted for in the income statement.



The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation, technology or other circumstances. Cost estimates are not reduced by the potential proceeds from the sale of assets or from plant clean up at closure.

Changes in estimates are capitalised or reversed against the relevant asset. Estimates are discounted at a pre-tax rate that reflects current market assessments.

Increases due to additional environmental disturbances are capitalised and amortised over the remaining lives of the mines. These increases are accounted for on a net present value basis.

Annual contributions are made to dedicated rehabilitation trust funds to fund the estimated cost of rehabilitation during and at the end of the life of the relevant mine. The amounts contributed to this trust fund are included under non-current assets and are measured at fair value. Interest earned on monies paid to rehabilitation trust funds is accrued on a time proportion basis and is recorded as interest income.

In addition, bank guarantees are provided for funding of the environmental rehabilitation obligations.

11. employee beneFitS11.1 pension and provident funds

The Group operates a defined contribution retirement plan and contributes to a number of industry-based defined contribution retirement plans. The retirement plans are funded by payments from employees and Group companies.

Contributions to defined contribution funds are charged against income as incurred.

11.2 post-retirement healthcare costs

Medical cover is provided through a number of different schemes. The Group has an obligation to provide medical benefits to certain of its pensioners and dependants of ex-employees. These liabilities have been provided in full, calculated on an actuarial basis. These liabilities are unfunded. Periodic valuation of these obligations is carried out by independent actuaries using appropriate mortality tables, long-term estimates of increases in medical costs and appropriate discount rates.

11.3 Share-based payments

Gold Fields operates a number of equity-settled compensation plans in which the Group participated. The fair value of the equity-settled instruments is measured by reference to the fair value of the equity instrument granted which in turn is determined using the modified Black-Scholes and Monte Carlo simulation models on the date of grant.

Fair value is based on market prices of the equity-settled instruments granted, if available, taking into account the terms and conditions upon which those equity-settled instruments were granted. Fair value of equity-settled instruments granted is estimated using appropriate valuation models and appropriate assumptions at grant date. Non-market vesting conditions (service period prior to vesting) are not taken into account when estimating the fair value of the equity-settled instruments at grant date. Market conditions are taken into account in determining the fair value at grant date.

The fair value of the equity-settled instruments is recognised as an employee benefit expense over the vesting period based on the Group’s estimate of the number of instruments that will eventually vest, with a corresponding increase in the share-based payment reserve. Vesting assumptions for non-market conditions are reviewed at each reporting date to ensure they reflect current expectations.

Where the terms of an equity-settled award are modified, the originally determined expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification, which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the participant as measured at the date of the modification.

11.4 termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the reporting date are discounted to present value.


12. ShARe cApitAl12.1 ordinary share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

12.2 Repurchased and reissue of share capital

When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the reserve from own shares. When treasury shares are re-allotted subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in share premium.

13. Revenue RecoGnition

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Group and the amount of revenue can be reliably measured. Revenue is stated at the fair value of the consideration received or receivable. Investment income comprises interest income.

13.1 Revenue arising from gold sales is recognised when the significant risks and rewards of ownership pass to the buyer. The price of gold and silver is determined by market forces.

13.2 Revenue from services is recognised over the period the services are rendered and is accrued in the financial statements.

13.3 Interest income is recognised on a time proportion basis taking account of the principal outstanding and the effective rate over the period to maturity.

Investment income comprises interest income on funds invested and dividend income from listed and unlisted investments.

Cash flows from dividends and interest received are classified under operating activities in the statement of cash flows.

14. dividendS declARed

Dividends are recognised only when such dividends are declared.

Cash flows from dividends paid are classified under operating activities in the statement of cash flows.

15. eARninGS peR ShARe

Earnings per share is calculated based on the profit attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the period. A diluted earnings per share is presented when the inclusion of ordinary shares that may be issued in the future has a dilutive effect on earnings per share.

16. SeGmentAl RepoRtinG

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker and is based on individual mining operations. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive committee that makes strategic decisions.

17. compARAtiveS

Where necessary, comparatives are adjusted to conform to changes in presentation. No comparatives were adjusted in the current year.

18. AdditionAl uS dollAR inFoRmAtion

The translation of the Group financial statements into US Dollar is based on the average exchange rate for the year for the income statement and cash flow statement and the year-end closing exchange rate for statement of financial position items. Exchange differences on translation are accounted for in the statement of comprehensive income.

This information is provided as supplementary information only.



income statement

Figures in millions unless otherwise stated

GROuP GROuP COMPANY

uNITED STATES DOLLAR SOuTh AFRICAN RAND SOuTh AFRICAN RAND

2011 2012 notes 2012 2011 2012 2011

2,301.0 2,021.2 Revenue 1 16,553.5 16,613.1 16,553.5 16,613.1 (1,669.6) (1,616.2) Cost of sales 2 (13,236.4) (12,054.5) (13,218.8) (12,039.8)

631.4 405.0 net operating profit 3,317.1 4,558.6 3,334.7 4,573.3 13.6 12.9 Investment income 3 105.5 98.3 98.1 90.4 (5.1) (15.5) Finance expense 4 (126.9) (37.1) (126.4) (36.6) (2.5) (14.8) Other costs (121.3) (18.4) (191.3) (109.7) 4.8 11.4 Share of results of associate after taxation 93.1 35.0 – –

(33.0) (32.2) Share-based payments 5 (263.5) (238.0) (209.8) (183.4)

0.6 0.3Profit on disposal of property, plant and equipment 2.4 4.3 2.1 4.2

– 1.8 Gain on financial instruments 15.0 – 15.0 –Impairment of investments in subsidiaries 11 – – (17.9) –

– –Reversal of impairment of related-party loans – – – 107.5

(39.5) (15.2) Restructuring costs (124.1) (285.5) (124.1) (284.2)

570.3 353.7 profit before royalties and taxation 6 2,897.3 4,117.2 2,780.4 4,161.5 (40.1) (34.4) Royalties 7.1 (282.1) (289.5) (282.1) (289.5)

530.2 319.3 profit before taxation 2,615.2 3,827.7 2,498.3 3,872.0 (175.1) 44.6 Mining and income tax 7.2 365.0 (1,264.5) 381.8 (1,242.2)

355.1 363.9 profit for the year 2,980.2 2,563.2 2,880.1 2,629.8

profit/(loss) attributable to: 355.2 363.8 Owners of the parent 2,979.6 2,564.1

(0.1) 0.1 Non-controlling interest holders 0.6 (0.9)

355.1 363.9 2,980.2 2,563.2

earnings per share attributable to ordinary share holders of the company

355.2 363.8 Basic earnings per share – (’000) 8.1 2,979.6 2,564.1

355.2 363.8 Diluted earnings per share – (’000) 8.2 2,979.6 2,564.1Average exchange rate: R8,19/1US$ (2011: R7,22/1US$).The accompanying notes form an integral part of these financial statements.


Statement of comprehensive incomefor the year ended 31 December 2012


GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

355.1 363.9 Profit for the year 2,980.2 2,563.2 2,880.1 2,629.8 296.0 69.6 Other comprehensive income – – – –

296.0 69.6 Currency translation adjustments – – – –

651.1 433.5 Total comprehensive income for the year 2,980.2 2,563.2 2,880.1 2,629.8

Attributable to: 651.2 433.4 – Owners of the parent 2,979.6 2,564.1

(0.1) 0.1 – Non-controlling interest holders 0.6 (0.9)

651.1 433.5 2,980.2 2,563.2Average exchange rate: R8,19/1US$ (2011: R7,22/1US$).The accompanying notes form an integral part of these financial statements.


as at 31 December 2012

Statement of financial position


GROuP GROuP COMPANY


2011 2012 notes 2012 2011 2012 2011

ASSetS 2,059.6 2,094.7 non-current assets 17,950.6 16,743.6 17,794.1 16,715.7

1,889.2 1,911.0 Property, plant and equipment 10 16,376.1 15,358.8 16,290.3 15,288.5 – – Investment in subsidiaries 11 – – 152.1 170.0

15.8 25.5 Investment in associate 12 218.6 128.4 19.4 19.4 0.2 0.2 Investments 14 1.5 1.5 1.2 1.2

152.1 155.3 Environmental trust fund 15 1,331.1 1,236.6 1,331.1 1,236.6 2.3 2.7 Deferred taxation 21 23.3 18.3 – –

215.0 203.9 current assets 1,747.1 1,747.9 1,677.6 1,098.8

31.0 40.7 Inventories 16 348.9 251.9 4.1 4.1 65.3 65.2 Trade and other receivables 17 558.3 531.4 517.1 494.8 74.1 64.0 Related-party receivables 18 548.1 601.8 1,013.8 397.4 44.6 34.0 Cash and cash equivalents 19 291.8 362.8 142.6 202.5

2,274.6 2,298.6 total assets 19,697.7 18,491.5 19,471.7 17,814.5

eQuity And liAbilitieS (1,472.3) (1,128.1) Equity attributable to owners of the parent (9,668.1) (11,969.7) (10,011.4) (12,159.8)

– – Stated share capital* 20 – – – – 153.7 255.5 Other reserves (1,218.6) (1,482.1) 2,008.9 1,799.1

(1,626.0) (1,383.6) Accumulated loss (8,449.5) (10,487.6) (12,020.3) (13,958.9)

(0.7) (0.5) Non-controlling interest (4.6) (5.9) – –

(1,473.0) (1,128.6) total equity (9,672.7) (11,975.6) (10,011.4) (12,159.8)

793.9 926.9 non-current liabilities 7,942.3 6,454.2 7,924.5 6,433.8

617.5 488.4 Deferred taxation 21 4,185.5 5,020.3 4,168.1 5,000.3 – 233.5 Borrowings 22 2,000.0 – 2,000.0 –

176.4 205.0 Provisions 23 1,756.8 1,433.9 1,756.4 1,433.5

2,953.7 2,500.3 current liabilities 21,428.1 24,012.9 21,558.6 23,540.5

210.3 229.4 Trade and other payables 24 1,966.0 1,709.8 1,609.7 1,330.8 2,653.1 2,000.7 Related-party payables 25 17,145.5 21,569.3 17,642.1 21,489.5

90.3 11.2 Taxation and royalties 96.6 733.8 86.8 720.2 – 259.0 Current portion of borrowings 22 2,220.0 – 2,220.0 –

2,274.6 2,298.6 total equity and liabilities 19,697.7 18,491.5 19,471.7 17,814.5Closing exchange rate: R8.57/1US$ (2011: R8.13/1US$)The accompanying notes form an integral part of these financial statements.* This is a nominal amount of R1,000 and shown as zero due to rounding.


Statement of changes in equityfor the year ended 31 December 2012


GROuP

SOuTh AFRICAN RAND

number of ordinary

shares in issued

Stated share

capital

Foreign currency

translation adjustment

Share-based

payment reserve

transactions

with non-controlling

interest holders

Accumu-lated loss

equity attribut-

able toowners

of the parent

non-controlling

interest total

equity

balance at 31 december 2010 1,000 – – 1,928.4 (3,648.5) (10,628.4) (12,348.5) (5.0) (12,353.5)Total comprehensive income for the year – – – – – 2,564.1 2,564.1 (0.9) 2,563.2Share-based payments – – – 238.0 – – 238.0 – 238.0Dividends paid – – – – – (2,423.3) (2,423.3) – (2,423.3)

balance at 31 december 2011 1,000 – – 2,166.4 (3,648.5) (10,487.6) (11,969.7) (5.9) (11,975.6)

Total comprehensive income for the year – – – – – 2,979.6 2,979.6 0.6 2,980.2Share-based payments – – – 263.5 – – 263.5 – 263.5Dividends paid – – – – – (731.3) (731.3) – (731.3)Transaction with non-controlling interest holder – – – – – – – 0.7 0.7Transaction with shareholder – – – – – (210.2) (210.2) – (210.2)

balance at 31 december 2012 1,000 –* – 2,429.9 (3,648.5) (8,449.5) (9,668.1) (4.6) (9,672.7)

Authorised share capital is 1,000,000,000 (2011: 1,000) shares of no par value.* This is a nominal amount of R1,000 and shown as zero due to rounding.

GROuP

uNITED STATES DOLLAR

balance at 31 december 2010 1,000 – 73.8 263.1 (512.1) (1,654.2) (1,829.4) (0.7) (1,830.1)Total comprehensive income for the year – – 295.9 – – 355.2 651.1 – 651.1

Profit for the year – – – – – 355.2 355.2 (0.1) 355.1Other comprehensive income – – 295.9 – – – 295.9 0.1 296.0

Share-based payments – – – 33.0 – – 33.0 – 33.0Dividends paid – – – – – (327.0) (327.0) – (327.0)

balance at 31 december 2011 1,000 – 369.7 296.1 (512.1) (1,626.0) (1,472.3) (0.7) (1,473.0)

Total comprehensive income for the year – – 69.6 – – 363.8 433.4 0.1 433.5

Profit for the year – – – – – 363.8 363.8 0.1 363.9Other comprehensive income – – 69.6 – – – 69.6 – 69.6

Share-based payments – – – 32.2 – – 32.2 – 32.2Dividends paid – – – – – (95.5) (95.5) – (95.5)Transaction with non-controlling interest holder – – – – – – – 0.1 0.1Transaction with shareholder – – – – – (25.9) (25.9) – (25.9)

balance at 31 december 2012 1,000 –* 439.3 328.3 (512.1) (1,383.6) (1,128.1) (0.5) (1,128.6)

Authorised share capital is 1,000,000,000 (2011: 1,000) shares of no par value.The accompanying notes form an integral part of these financial statements.* This is a nominal amount of US$117 and shown as zero due to rounding.



Statement of changes in equity (continued)


COMPANY

SOuTh AFRICAN RAND

number of

ordinary shares

in issued

Statedshare

capital

Share-based

payment reserve

Accumu-lated loss

equity attribut-

able to owners of the parent

balance at 31 december 2010 1,000 – 1,615.7 (14,165.4) (12,549.7)Total comprehensive income for the year – – – 2,629.8 2,629.8Share-based payments – – 183.4 – 183.4Dividends paid – – – (2,423.3) (2,423.3)

balance at 31 december 2011 1,000 – 1,799.1 (13,958.9) (12,159.8)

Total comprehensive income for the year – – – 2,880.1 2,880.1Share-based payments – – 209.8 – 209.8Dividends paid – – – (731.3) (731.3)Transaction with share holder – – – (210.2) (210.2)

balance at 31 december 2012 1,000 –* 2,008.9 (12,020.3) (10,011.4)Authorised share capital is 1,000,000,000 (2011: 1,000) shares of no par value.* This is a nominal amount of R1,000 and shown as zero due to rounding.



Statement of cash flows


GROuP GROuP COMPANY


2011 2012 notes 2012 2011 2012 2011

543.3 314.0 cash flows from operating activities 2,621.2 3,860.6 2,466.5 3,599.2

902.1 669.0 Cash generated by operations 26 5,479.5 6,512.5 5,417.6 6,530.0 4.4 4.3 Interest income 35.3 31.9 27.9 24.0 (0.2) (0.1) Post-retirement healthcare payments (1.2) (1.2) (1.2) (1.2)

33.4 (79.0) Change in working capital 27 (648.0) 241.3 (762.1) (44.0)

939.7 594.2 Cash generated by operating activities 4,865.6 6,784.5 4,682.2 6,508.8 (2.0) (14.5) Interest paid (119.0) (14.5) (118.5) (14.0)

(23.8) (50.5) Royalties paid 28 (413.7) (171.5) (413.7) (171.5) (43.6) (119.7) Tax paid 29 (980.4) (314.6) (952.2) (300.8)

870.3 409.5 Net cash from operations 3,352.5 6,283.9 3,197.8 6,022.5 (327.0) (95.5) Dividends paid (731.3) (2,423.3) (731.3) (2,423.3)

(416.2) (381.8) cash flows from investing activities (3,126.0) (3,004.9) (3,104.9) (3,146.7)

(404.8) (379.4) Additions to property, plant and equipment (3,106.9) (2,922.6) (3,085.6) (2,911.6)

2.1 0.6Proceeds on disposal of property, plant and equipment 5.2 15.5 5.0 15.6

– – Purchase of investment in subsidiary – – – (152.9)

(13.5) (3.0)Environmental trust fund and rehabilitation payments (24.3) (97.8) (24.3) (97.8)

(211.8) 53.0 cash flows from financing activities 433.8 (1,529.0) 578.5 (1,104.4)

(55.4) – Loans repaid – (400.0) – (400.0) 55.4 515.3 Loans raised 4,220.0 400.0 4,220.0 400.0

(211.8) (521.7) Related-party loans repaid (4,272.4) (1,529.0) (4,181.2) (1,104.6) – 59.4 Related-party loans raised 486.2 – 539.7 0.2

(84.7) (14.8) Net cash utilised (71.0) (673.3) (59.9) (651.9)

(24.2) 4.2Effect of exchange rate fluctuation on cash held – – – –

153.5 44.6Cash and cash equivalents at the beginning of the year 362.8 1,036.1 202.5 854.4

44.6 34.0cash and cash equivalents at end of the year 291.8 362.8 142.6 202.5

Average exchange rate: R8.19/1 US$ (2011: R7.22/1 US$) and closing exchange rate: R8.57/1 US$ (2011: R8.13/1 US$).The accompanying notes form an integral part of these financial statements.

S




notes to the annual financial statements

GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

1. Revenue

2,301.0 2,021.2Revenue from mining operations – spot sales 16,553.5 16,613.1 16,553.5 16,613.1

2,301.0 2,021.2 total revenue 16,553.5 16,613.1 16,553.5 16,613.1

2. coSt oF SAleS (774.4) (707.1) Salaries and wages (5,790.8) (5,591.0) (5,790.8) (5,591.0) (343.2) (314.6) Consumable stores (2,576.2) (2,478.0) (2,576.2) (2,478.0) (259.3) (258.3) Utilities (2,115.2) (1,871.9) (2,115.2) (1,871.9) (114.5) (114.3) Mine contracts (936.5) (826.9) (936.5) (826.9) 125.6 66.6 Other* 545.1 906.5 545.1 906.5 (303.8) (288.5) Amortisation and depreciation (2,362.8) (2,193.2) (2,345.2) (2,178.5)

(1,669.6) (1,616.2) total cost of sales (13,236.4) (12,054.5) (13,218.8) (12,039.8)

3. inveStment income 9.2 8.6 Interest received – environmental trust funds 70.2 66.4 70.2 66.4 4.4 4.3 Interest received – cash balances 35.3 31.9 27.9 24.0

13.6 12.9 total investment income 105.5 98.3 98.1 90.4

4. FinAnce expenSe (0.7) – Interest paid – related entity loans – (4.8) (4.8) (1.3) (14.5) Interest paid – borrowings (119.0) (9.7) (118.5) (9.2) (3.1) (1.0) Interest charge – environmental rehabilitation (7.9) (22.6) (7.9) (22.6)

(5.1) (15.5) total finance expense (126.9) (37.1) (126.4) (36.6)

* Other cost include the Ore development costs that have been capitalised.


5. ShARe-bASed pAymentS

The Gold Fields Group grants equity-settled instruments comprising share options and restricted shares to directors, certain officers and employees. Sibanye Gold participated in the GF Management Incentive Scheme, the Gold Fields Limited 2005 Share Plan and the Gold Fields Limited 2012 Share Plan up to the unbundling from Gold Fields. All plans are equity-settled.

The following information is available for each plan:

GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

_ – (a) The GF Management Incentive Scheme – – – –

(b) Gold Fields Limited 2005 Share Plan

30.4 17.9 Performance vesting restricted shares 146.7 219.2 111.9 167.6

2.6 1.7Performance allocated share appreciation rights 13.9 18.8 11.9 15.8

(c) Gold Fields Limited 2012 Share Plan

– 7.6 Performance shares 62.3 – 53.0 –

– 5.0 Bonus shares 40.6 – 33.0 –

33.0 32.2 total share-based payments 263.5 238.0 209.8 183.4

(a) the GF management incentive Scheme

At the Gold Fields annual general meeting on 10 November 1999, shareholders approved the adoption of the GF Management Incentive Scheme (the “Scheme”) to substitute the scheme in place prior to the reverse takeover of Driefontein by Gold Fields in 1999. This scheme was introduced to provide an incentive for certain officers and employees to acquire shares in Gold Fields. No further allocations of options under this scheme are being made in view of the introduction of the Gold Fields 2005 Share Plan (see below) and the scheme will be closed once all options have been exercised or forfeited. Currently, the last date of expiry is 2 July 2013.

The salient features of the scheme were that:●● it comprises only share options;●● a third of the total share option grant vests upon the second, third and fourth anniversaries of the grant date; and●● share options expire no later than seven years from the grant date.

The following information details the options granted under the Scheme to Sibanye Gold employees:

2011 GROuP 2012

number of instruments

Average instrument

price (cps)number of

instruments

Average instrument price (cps)

228,340 79.54 Outstanding at beginning of the year 67,104 80.83 Movement during the year:

(147,136) 74.46 Exercised and released (35,036) 64.82 (14,100) 111.75 Forfeited (6,068) 97.97

67,104 80.83 outstanding at end of the year 26,000 98.42

2011 COMPANY 2012

180,843 76.96 Outstanding at beginning of the year 55,104 80.71 Movement during the year:

(116,839) 73.83 Exercised and released (23,036) 56.17 (8,900) 94.86 Forfeited (6,068) 97.97

55,104 80.71 outstanding at end of the year 26,000 98.42

All options above have vested and no options were granted during the year.


Notes to the annual financial statements (continued)


5. ShARe-bASed pAymentS (continued)

(a) the GF management incentive Scheme (continued)

During the year ended 31 December 2012, some share appreciation rights’ expiry dates were extended to enable participants who were disadvantaged due to closed periods to be placed in an equitable position. The incremental fair value of the modification was Rnil. No share options were extended during the year ended 31 December 2011.

The following table summarises information relating to the options outstanding at 31 December 2012 and 31 December 2011:

2011 GROuP 2012


price (Rand)

contractual life

(years)Range of exercise prices for outstanding equity instruments (South African Rand)


price (Rand)

contractual life

(years)

38,504 64.92 0.37 60.00 – 84.99 – – – 19,200 89.80 0.86 85.00 – 109.99 19,200 89.80 0.41 4,200 111.66 1.03 110.00 – 134.99 4,200 111.66 0.04 5,200 140.66 1.16 135.00 – 159.99 2,600 140.66 0.17

67,104 total outstanding at the end of the year 26,000

2011 COMPANY 2012

30,704 64.88 1.13 60.00 – 84.99 – – – 19,200 89.80 0.86 85.00 – 109.99 19,200 89.80 0.41

– – – 110.00 – 134.99 4,200 111.66 0.04 5,200 140.66 1.16 135.00 – 159.99 2,600 140.66 0.17


(b) Gold Fields limited 2005 Share plan

At the Gold Fields annual general meeting on 17 November 2005 shareholders approved the adoption of the Gold Fields Limited 2005 Share Plan (the “Plan”) to replace the GF Management Incentive Scheme approved in 1999. The plan provides for two methods of participation, namely the Performance Allocated Share Appreciation Rights Method (“SARS”) and the Performance Vesting Restricted Share Method (“PVRS”). This plan seeks to attract, retain, motivate and reward participating employees on a basis which seeks to align the interests of such employees with those of the Gold Fields share owners. No further allocations of options under this plan are being made due to the introduction of the Gold Fields Limited 2012 Share Plan (see below) and the plan will be closed once all options have been exercised or forfeited. Currently the last date of expiry is 1 December 2017.

The salient features of the plan were:●● PVRS and SARS are offered to participants annually during March. Quarterly allocations are also made in June, September

and December on a pro rata basis to qualifying new employees. PVRS are performance-related shares, granted at zero cost (the shares are granted in exchange for the rendering of service by participants to Gold Fields during the three-year restricted period prior to the share vesting period);

●● All PVRS allocations made from 1 March 2006 to 1 March 2008 were conditionally awarded to participants. Based on the rules of the Plan, the actual number of PVRS which would be settled to a participant three years after the original award date is determined by Gold Fields’ performance measured against the performance of five other major gold mining companies (the peer groups) based on the relative change in Gold Fields’ share price compared to the basket of respective US Dollar share prices of the peer group. From 1 June 2008 the rules were modified so that two performance measures apply. The target performance criterion has been set at 85% of Gold Fields’ expected gold production over the three-year measurement period as set out in the business plans of Gold Fields approved by the Gold Fields Board. In the event that the target performance criterion is met the full initial target award shall be settled on the settlement date. In addition, the Gold Fields Remuneration Committee has determined that the number of PVRS to be settled may be increased by up to 300% of the number of the initial target PVRS conditionally awarded, depending on the performance of Gold Fields relative to the performance of the peer group based on the relative change in Gold Fields’ share price compared to the basket of respective US Dollar share prices of the peer group. The above amendments were effected under the ambit of the existing rules as previously approved by Gold Fields shareholders at the annual general meeting;


5. ShARe-bASed pAymentS (continued)(b) Gold Fields limited 2005 Share plan (continued)

●● The performance of Gold Fields that will result in the settlement of shares is to be measured by Gold Fields’ share price performance relative to the share price performance of the following peer gold mining companies, collectively referred to as “the peer group”, over the three-year period:– AngloGold Ashanti;– Barrick Gold Corporation;– Goldcorp Incorporated;– Harmony Gold Mining Company;– Newmont Mining Corporation;

●● The performance of Gold Fields’ shares against the shares of the peer group will be measured for the three-year period running from the first business day of the month preceding the relevant allocation and award date;

●● SARS are share options, granted at the weighted average price over the previous 20 trading days; and●● SARS will vest on the third anniversary of the grant date, but may be exercised between the third and sixth anniversary of the

grant date by existing employees.

The following information details the options granted under this scheme to Sibanye Gold employees:

2011 GROuP 2012

performance vesting

restricted shares (pvRS)

Share appreciation rights (SARS)


performance vesting

restricted shares (pvRS)

Share appreciation rights (SARS)


4,287,862 3,968,584 105.97 Outstanding at beginning of the year 3,290,075 1,211,778 107.79Movement during the year:

1,324,161 455,542 119.17 Granted during the year – – – (1,321,403) (540,135) 111.06 Exercised and released (829,266) (70,119) 105.98

(333,574) (213,455) 110.69 Forfeited (213,581) (131,068) 116.62 (666,971) (2,458,758) 105.93 Transferred within the Gold Fields Group (16,642) (89,085) 106.21

3,290,075 1,211,778 107.79 outstanding at end of the year 2,230,586 921,506 106.82

2011 COMPANY 2012

2,819,118 1,343,100 105.81 Outstanding at beginning of the year 2,483,330 919,510 107.65Movement during the year:

1,002,154 392,084 118.86 Granted during the year – – – (991,084) (443,489) 112.09 Exercised and released (656,673) (60,669) 105.81 (245,724) (170,351) 107.44 Forfeited (177,919) (116,668) 115.82 (101,134) (201,834) 107.63 Transferred within the Gold Fields Group 160,797 (4,962) 107.83

2,483,330 919,510 107.65 outstanding at end of the year 1,809,535 737,211 106.96

During the year ended 31 December 2012, some share appreciation rights’ expiry dates were extended to enable participants who were disadvantaged due to closed periods to be placed in an equitable position. The incremental fair value of the modification was Rnil. No share options were extended during the year end 31 December 2011.





The fair value of the above equity instruments granted during the year were valued using the Black-Scholes and Monte Carlo Simulation models:

GROuP COMPANY

2011 2012 black-Scholes model 2012 2011

This model is used to value the SARS. The inputs to the model for options granted during the year were as follows:

119.17 – – weighted average exercise price – 119.17

46.4% –

– exponentially weighted moving average volatility (based on a statistical analysis of the share price on a weighted moving average basis for the expected term of the option) – 46.4%

5.9 – – expected term (years) – 5.91.7% – – long-term expected dividend yield – 1.7%6.9% – – weighted average risk-free interest rate – 6.9%51.66 – – weighted average fair value – 51.66

2011 2012 monte carlo Simulation 2012 2011

This model is used to value the PVRS. The inputs to the model for options granted during the year were as follows:– weighted average exercise price – Rand

64.1% –

– weighted average historical volatility (based on a statistical analysis of the share price on a weighted moving average basis for the expected term of the option) – 64.1%

3.0 – – expected term (years) – 3.01.7% – – historical dividend yield – 1.7%

0.2% – – weighted average three-year risk-free interest rate (based on US

interest rates) – 0.2% 206.27 – – weighted average fair value – 206.27

– members on the Philadelphia index on grant date

Vesting of PVRS is based on Gold Fields’ performance on the Philadelphia XAU Index (“XAU”) relative to the five representative peers in the gold mining industry rather than all members of the index, because some members of the index are not purely gold mining companies or are small producers.



The following table summarises information relating to the options outstanding at 31 December 2012 and 31 December 2011:

2011 GROuP 2012


price (Rand)

contractual life (years)

Range of exercise prices for outstanding equity instruments (South African Rand)


price (Rand)


712,224 99.36 3.62 85.00 – 109.99 544,466 98.12 2.71 499,554 119.82 4.51 110.00 – 134.99 371,110 119.13 4.13

– – – 135.00 – 159.99 5,930 136.29 5.01

1,211,778 total outstanding at the end of the year 921,506

2011 COMPANY 2012


price (Rand)


Range of exercise prices for outstanding equity instruments (South African Rand)


price (Rand)


533,574 98.94 3.67 85.00 – 109.99 424,129 97.78 2.74 385,936 119.69 4.76 110.00 – 134.99 307,152 119.07 4.17

– – – 135.00 – 159.99 5,930 136.29 5.01


The PVRS have not been included in the table above as they do not have an expiry date and are granted for no consideration.

(c) Gold Fields limited 2012 Share planAt the Gold Fields annual general meeting on 14 May 2012 Gold Fields shareholders approved the adoption of the Gold Fields Limited 2012 Share Plan to replace the Gold Fields Limited 2005 Share Plan. The Plan provides for two methods of participation, namely the Performance Share (”PS”) Method and the Bonus Share (“BS”) Method. This plan seeks to attract, retain, motivate and reward participating employees on a basis which seeks to align the interests of such employees with those of the Gold Fields share owners.

The salient features of the Plan are:●● PS and BS are offered to participants annually in March. Quarterly allocations of PS are also made in June, September and

December on a pro rata basis to qualifying new employees. PS and BS are performance-related shares, granted at zero cost (the shares are granted in exchange for the rendering of service by participants to the Company during the three-year restricted period prior to the share vesting period);

●● based on the rules of the Plan, the actual number of PS which would be settled to a participant three years after the original award date is determined by Gold Fields’ performance measured against the performance of seven other major gold mining companies (the peer group) based on the relative change in Gold Fields’ share price compared to the basket of respective US Dollar share prices of the peer group. Furthermore, for PS awards to be settled to members of Gold Fields Executive Committee, an internal company performance target is required to be met before the external relative measure is applied. The internal target performance criterion has been set at 85% of Gold Fields’ planned gold production over the three-year measurement period as set out in the business plans of Gold Fields approved by the Gold Fields Board. In the event that the internal target performance criterion is met the full initial target award shall be settled on the settlement date. In addition, Gold Fields Remuneration Committee has determined that the number of PS to be settled may be increased by up to 200% of the number of the initial target PS conditionally awarded, depending on the performance of Gold Fields relative to the performance of the peer group, based on the relative change in Gold Fields’ share price compared to the basket of respective US Dollar share prices of the peer group.




5. ShARe-bASed pAymentS (continued)(c) Gold Fields limited 2012 Share plan (continued)

●● the performance of Gold Fields that will result in the settlement of shares is to be measured by Gold Fields’ share price performance relative to the share price performance of the following peer gold mining companies, collectively referred to as “the peer group”, over the three-year period:– AngloGold Ashanti;– Barrick Gold Corporation;– Goldcorp Incorporated;– Harmony Gold Mining Company;– Newmont Mining Corporation;– Newcrest Mining Limited; and– Kinross Gold Corporation.

●● the performance of Gold Fields’ shares against the shares of the peer group will be measured for the three-year period running from the first business day of the month preceding the relevant allocation and award date;

●● BS are offered to participants annually in March; and●● based on the rules of the plan, the actual number of BS which would be settled equally to a participant over a nine-month

and an 18-month period after the original award date is determined by the employee’s annual cash bonus calculated with reference to actual performance against predetermined targets for the financial year ended immediately preceding the award date.

Details of the options granted under this scheme to Sibanye Gold employees are detailed below:

2011 GROuP 2012

performance shares (pS)

bonus shares (bS)


bonus shares (bS)

– – Outstanding at beginning of the year – – Movement during the year:

– – Granted during the year 1,638,684 489,748 – – Exercised and released – (216,715) – – Forfeited (73,889) (16,582) – – Transferred within the Gold Fields Group (27,412) –

– – outstanding at end of the year 1,537,383 256,451

2011 COMPANY 2012


bonus shares (bS)


bonus shares (bS)

– – Outstanding at beginning of the year – – Movement during the year:

– – Granted during the year 1,397,932 400,107 – – Exercised and released – (183,416) – – Forfeited (67,896) (15,478) – – Transferred within the Gold Fields Group (29) –

– – outstanding at end of the year 1,330,007 201,213


5. ShARe-bASed pAymentS (continued)(c) Gold Fields limited 2012 Share plan (continued)

The fair value of the above equity instruments granted during the year were valued using the Monte Carlo Simulation models:

GROuP MONTE CARLO SIMuLATION COMPANY

2011 2012 performance shares 2012 2011

This model is used to value the PS. The inputs to the model for options granted during the year were as follows:

– 36.4%

– weighted average historical volatility (based on a statistical analysis of the share price on a weighted moving average basis for the expected term of the option) 36.5% –

– 3.0 – expected term (years) 3.0 – – 1.6% – historical dividend yield 1.6% –

– 0.7% – weighted average three-year risk-free interest rate (based on

US interest rates) 0.7% – – 162.31 – weighted average fair value 162.41 –

2011 2012 bonus shares 2012 2011

A future trading model is used to estimate the loss in value to the holders of bonus shares due to trading restrictions. The actual valuation is developed using a Monte Carlo analysis of the future share price of Gold Fields:

– 29.4%

– weighted average historical volatility (based on a statistical analysis of the share price on a weighted moving average basis for the expected term of the option) 29.4% –

– 9 – 18 – expected term (months) 9 – 18 – – 2.7% – historical dividend yield 2.7% –

– 5.5% – weighted average three-year risk-free interest rate (based on

SA interest rates) 5.5% – – 1.5% – marketability discount 1.5% – – 115.74 – weighted average fair value 115.74 –

Vesting of PS is based on Gold Fields’ performance on the XAU relative to the seven representative peers in the gold mining industry rather than all members of the index, because some members of the index are not purely gold mining companies or are small producers.

The compensation cost related to awards not yet recognised under the above schemes at 31 December 2012 and 31 December 2011 amounts to R319.4 million and R369.9 million, respectively, and is to be spread over three years.

The directors of Gold Fields were authorised to issue and allot all or any of such shares required for the plans, but in aggregate all plans may not exceed 35,309,563 of the total issued ordinary shares capital of Gold Fields. An individual participant may also not be awarded an aggregate of shares from all or any such plans exceeding 3,530,956 of the Gold Fields’ total issued ordinary share capital. The unexercised options and shares under all plans represented 14,447,471 (1.98%) of the total issued ordinary share capital of Gold Fields Limited at 31 December 2012.




5. ShARe-bASed pAymentS (continued)(d) Sibanye Gold limited 2013 Share plan

On 21 November 2012 the shareholder of Sibanye Gold passed a resolution to approve and adopt for implementation the Sibanye Gold 2013 Share Plan (the “SGL Plan”) with effect from the date of listing. This plan was implemented to replace the Gold Fields Limited 2012 Share Plan that Sibanye Gold’s employees participated in. The SGL Plan provides for two methods of participation, namely the Performance Share Method (“PS”) and the Bonus Share Method (“BS”). This plan seeks to attract, retain, motivate and reward participating employees on a basis which seeks to align the interests of such employees with those of the shareholders.

The salient features of the SGL Plan are:●● PS and BS are offered to participants annually in March. Quarterly allocations of PS are also made in June, September and

December on a pro rata basis to qualifying new employees. PS and BS are performance-related shares, granted at zero cost (the shares are granted in exchange for the rendering of service by participants to the Group during the three-year restricted period prior to the share vesting period);

●● based on the rules of the SGL Plan, the actual number of PS which would be settled to a participant three years after the original award date is determined by the Company’s performance measured against the performance of five other major gold mining companies (the peer group) based on the relative change in the Sibanye Gold share price compared to the basket of respective share prices of the peer group. Furthermore, for PS awards to be settled to members of the Executive Committee, an internal company performance target is required to be met before the external relative measure is applied;

●● the performance of the Company that will result in the settlement of shares is to be measured by the Company’s share price performance relative to the share price performance of peer gold mining companies to be determined by the Remuneration Committee over a three-year period;

●● the performance of the Company’s shares against the shares of the peer group will be measured for the three-year period running from the relevant award date;

●● BS are offered to participants annually in March; and●● based on the rules of the SGL Plan, the actual number of BS which would be settled equally to a participant over a nine-

month and an 18-month period after the original award date is determined by the employee’s annual cash bonus calculated with reference to actual performance against predetermined targets for the financial year ended immediately preceding the award date.

The directors were authorised to issue and allot all or any of such shares required for the plans, but in aggregate all plans may not exceed 35,309,563 of the total issued ordinary shares capital of the Company. An individual participant may also not be awarded an aggregate of shares from all or any such plans exceeding 3,530,956 of the Company’s total issued ordinary share capital.

The compensation cost related to awards to be granted in the future will mirror the costs that would have been expensed in future periods under the Gold Fields Limited Share Plans above. All Gold Fields shares will vest pro rata (“no fault termination” rules will apply). The proportionate unvested options under the Gold Fields Limited Share Plans on date of unbundling will be replaced with Sibanye Gold shares to the equivalent value.

The value of the unvested options will be valued and adjusted at the volume weighted average share price (“VWAP”) of Gold Fields 10 days prior to the listing of Sibanye Gold. These options will be replaced with Sibanye Gold Limited 2013 share options to the equivalent value based on the Sibanye Gold VWAP three days prior to 1 March 2013.



GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

6. included in pRoFit beFoRe RoyAltieS And tAxAtion ARe the FollowinGexpenses

8.8 6.1Environmental rehabilitation inflation adjustment 49.8 63.7 49.8 63.7

7. RoyAltieS, mininG And income tAx

7.1 Royalties

(40.1) (34.4) – current year charge (282.1) (289.5) (282.1) (289.5)

The Mineral and Petroleum Resource Royalty Act 2008 (“Royalty Act”) was promulgated on 24 November 2008 and became effective from 1 March 2010. The Royalty Act imposes a royalty on refined (mineral resources that have undergone a comprehensive level of beneficiation such as smelting and refining as defined in Schedule 1 of the Act) and unrefined (mineral resources that have undergone limited beneficiation as defined in Schedule 2 of the Act) minerals payable to the State. The royalty in respect of refined minerals (which include gold refined to 99.5% and above and platinum) is calculated by dividing earnings before interest and taxes (“EBIT”) by the product of 12.5 times gross revenue calculated as a percentage, plus an additional 0.5%. EBIT refers to taxable mining income (with certain exceptions such as no deduction for interest payable and foreign exchange losses) before assessed losses but after capital expenditure. A maximum royalty of 5% has been introduced on refined minerals. The effective rate of royalty tax payable for the year ended 31 December 2012 was approximately 1.7% of mining revenue (2011: 1.7%).

GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

7.2 mining and income taxThe components of mining and income tax are the following:

(87.7) (52.2) – mining tax (428.3) (633.0) (428.3) (633.0) (1.5) (1.0) – non-mining tax (8.1) (11.0) (7.4) (7.9) (3.1) (2.8) – company and capital gain tax (22.8) (22.2) – – 0.4 (1.9) – prior year adjustment – current tax (15.6) 2.9 (14.7) –

(83.4) 102.5 – deferred tax 839.8 (602.5) 832.2 (601.3) 0.2 – – prior year adjustment – deferred tax – 1.3 – –

(175.1) 44.6 total mining and income tax 365.0 (1,264.5) 381.8 (1,242.2)





GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

7. RoyAltieS, mininG And income tAx (continued)

7.2 mining and income tax (continued)

The major items causing the Group’s income tax to differ from the maximum South African statutory mining tax rate of 34.0% (2011: 43.0%) were:

(228.0) (108.6)Tax on Profit before taxation at maximum South African statutory mining tax rate (889.2) (1,645.9) (849.4) (1,665.0)

11.9 34.5South African mining tax formula rate adjustment 282.4 86.2 282.4 86.2

53.0 2.0Rate adjustment to reflect the Company tax rate of 28% 16.6 382.4 13.1 380.1

(14.2) (10.9) Non-deductible share-based payments (89.6) (102.3) (71.3) (78.9)

2.2 5.1Net non-taxable income and non-deductible expenditure 41.3 15.1 3.4 35.4

– 122.5 Deferred tax release on reduction of rate1 1,003.5 – 1,003.5 –

(175.1) 44.6 Income and mining tax expense 365.0 (1,264.5) 381.8 (1,242.2)

tax ratesMining tax2 y=34–170/xY=43–215/X y=34–170/xY=43–215/XNon-mining tax3 28.0% 35.0% 28.0% 35.0%Company tax rate 28.0% 28.0% 28.0% 28.0%

1 During the budget speech in February 2012, the minister of finance announced that Secondary Tax on Companies (“STC”) will be abolished resulting in the abolishment of STC inclusive mining tax formula. The result is that there is now only one mining tax formula.

2 Mining tax on mining income is determined according to a formula which takes into account the profit and revenue from mining operations. Mining taxable income is determined after the deduction of all mining capital expenditure, with the proviso that this cannot result in an assessed loss. Capital expenditure amounts not deducted are carried forward as unredeemed capital expenditure to be deducted from future mining income. Accounting depreciation is ignored for the purpose of calculating mining taxation.

In the formula above, Y is the percentage rate of tax payable and X is the ratio of mining profit, after the deduction of redeemable capital expenditure, to mining revenue expressed as a percentage.

3 Non-mining income consists primarily of interest income.

Deferred tax is provided at the expected future rate for mining operations arising from temporary differences between the carrying values and tax values of assets and liabilities.

At 31 December 2012, the Group had the following estimated amounts available for set-off against future income:

GROuP GROuP COMPANY


tax losses tax losses tax losses

2011 2012 2012 2011 2012 2011

14.1 17.1 Living Gold Proprietary Limited 146.4 114.4 – – 1.3 1.2 Golden Oils Proprietary Limited 10.1 10.4 – – 1.9 – Agrihold Proprietary Limited – 15.8 – – 1.1 – Golden Hytec Farming Proprietary Limited – 9.3 – –

18.4 18.3 156.5 149.9 – –



GROuP GROuP COMPANY


deferred tax asset not recognised



2011 2012 2012 2011 2012 2011

7. RoyAltieS, mininG And income tAx (continued)

7.2 mining and income tax (continued)

3.9 4.8 Living Gold Proprietary Limited 41.0 32.0 – – 0.4 0.3 Golden Oils Proprietary Limited 2.8 2.9 – – 0.5 – Agrihold Proprietary Limited – 4.4 – – 0.3 – Golden Hytec Farming Proprietary Limited – 2.6 – –

5.1 5.1 43.8 41.9 – –

These deductions are available to be utilised against income generated by the relevant tax entity and do not expire unless the tax entity concerned ceases to operate for a period of longer than one year. Under South African mining tax ring-fencing legislation, each tax entity is treated separately and as such these deductions can only be utilised by the tax entities in which the deductions have been generated. South African tax losses have no expiration date.

GROuP GROuP

uNITED STATES DOLLAR SOuTh AFRICAN RAND

2011 2012 2012 2011

8. eARninGS peR ShARe

355.2 363.8 8.1 basic earnings per share (’000) 2,979.6 2,564.1Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders for the year ended 31 December 2012 of R2,979.6 million (2011: R2,564.1 million) by the weighted average number of ordinary shares in issue during the year of 1,000 (2011: 1,000).

355.2 363.8 8.2 diluted earnings per share (’000) 2,979.6 2,564.1Diluted earnings per share is calculated on the basis of profit attributable to ordinary shareholders for the year ended 31 December 2012 of R2,979.6 million (2011: R2,564.1 million) and 1,000 (2011: 1,000) shares being the diluted number of ordinary shares in issue during the year. There are no dilutive instruments.





GROuP GROuP


2011 2012 2012 2011

8. eARninGS peR ShARe (continued)

354.8 363.6 8.3 headline earnings per share (’000) 2,977.9 2,561.3Headline earnings per share is calculated on the basis of adjusted profit attributable to ordinary shareholders for the year ended 31 December 2012 of R2,977.9 million (2011: R2,561.3 million) and 1,000 (2011: 1,000) shares being the weighted average number of ordinary shares in issue during the year.

Profit attributable to ordinary shareholders is reconciled to headline earnings as follows:

355.2 363.8 Profit attributable to ordinary shareholders 2,979.6 2,564.1 (0.6) (0.3) Profit on disposal of property, plant and equipment (2.4) (4.3)

0.2 0.1Taxation effect of profit on disposal of property, plant and equipment 0.7 1.5

354.8 363.6 headline earnings 2,977.9 2,561.3

354.8 363.6 8.4 diluted headline earnings per share (’000) 2,977.9 2,561.3Diluted headline earnings per share is calculated on the basis of adjusted profit attributable to ordinary shareholders for the year ended 31 December 2012 of R2,977.9 million (2011: R2,561.3 million) and 1,000 (2011: 1,000) shares being the diluted number of ordinary shares in issue during the year. There are no dilutive instruments.

8.5 pro forma earnings per shareHad the share capitalisation for the unbundling of Sibanye Gold from the Gold Fields Group as discussed in note 33 taken place at 1 January 2012 and 2011, respectively, the above earnings per share would have been as follows:

731,648,614 731,648,614Gold Fields’ subscribed shares after the unbundling of Sibanye Gold: 731,648,614 731,648,614

49 50 Pro forma basic earnings per share (cents) 407 350 49 50 Pro forma diluted earnings per share (cents) 407 350 48 50 Pro forma headline earnings per share (cents) 407 350 48 50 Pro forma diluted headline earnings per share (cents) 407 350

9. dividendS 327.0 95.5 Dividends declared and paid during the year to Gold Fields 731.3 2,423.3 327.0 95.5 Dividends per share (’000) 731.3 2,423.3

45 13 Pro forma dividend per share (cents) – refer to note 8.5 100 331



GROuP


land, mineral

rights and rehabilitation

mine development, infrastructure

and other total total


and other

land, mineral


10. pRopeRty, plAnt And eQuipment31 december 2012cost

155.0 4,517.6 4,672.6 Balance at beginning of the year 37,988.0 36,727.7 1,260.3 – 379.4 379.4 Additions 3,106.9 3,106.9 –

32.3 – 32.3 Change in estimates of rehabilitation assets 264.3 – 264.3 – (1.1) (1.1) Disposals (8.6) (8.6) – – 1.4 1.4 Other 11.7 11.7 –

(9.3) (248.8) (258.1) Translation adjustment – – –

178.0 4,648.5 4,826.5 balance at end of the year 41,362.3 39,837.7 1,524.6

Accumulated depreciation and impairment losses

87.9 2,695.5 2,783.4 Balance at beginning of the year 22,629.2 21,914.6 714.6 4.1 284.4 288.5 Amortisation and depreciation 2,362.8 2,329.2 33.6

– (0.7) (0.7) Disposals (5.8) (5.8) – (4.7) (151.0) (155.7) Translation adjustment – – –

87.3 2,828.2 2,915.5 Balance at end of the year 24,986.2 24,238.0 748.2

90.7 1,820.3 1,911.0 carrying value at end of the year 16,376.1 15,599.7 776.4

31 december 2011cost

161.6 5,012.7 5,174.3 Balance at beginning of the year 34,926.6 33,835.6 1,091.0 – 404.8 404.8 Additions 2,922.6 2,922.5 0.1

23.4 – 23.4 Change in estimates of rehabilitation assets 169.2 – 169.2 – (4.2) (4.2) Disposals (30.4) (30.4) –

(30.0) (895.7) (925.7) Translation adjustment – – –

155.0 4,517.6 4,672.6 balance at end of the year 37,988.0 36,727.7 1,260.3


102.8 2,927.6 3,030.4 Balance at beginning of the year 20,455.2 19,761.3 693.9 2.9 300.9 303.8 Amortisation and depreciation 2,193.2 2,172.5 20.7

– (2.7) (2.7) Disposals (19.2) (19.2) – (17.8) (530.3) (548.1) Translation adjustment – – –

87.9 2,695.5 2,783.4 balance at end of the year 22,629.2 21,914.6 714.6






COMPANY

SOuTh AFRICAN RAND SOuTh AFRICAN RAND

land, mineral



and other total total

land, mineral



and other

31 december 2011 10. pRopeRty, plAnt And eQuipment (continued) 31 december 2012

cost 1,066.1 33,608.8 34,674.9 Balance at beginning of the year 37,741.2 36,505.8 1,235.4

0.1 2,911.5 2,911.6 Additions 3,085.6 3,085.6 – 169.2 – 169.2 Change in estimates of rehabilitation assets 264.3 – 264.3

– (14.5) (14.5) Disposals (6.2) (6.2) –

1,235.4 36,505.8 37,741.2 balance at end of the year 41,084.9 39,585.2 1,499.7


689.6 19,587.7 20,277.3 Balance at beginning of the year 22,452.7 21,743.5 709.2 19.6 2,158.9 2,178.5 Amortisation and depreciation 2,345.2 2,312.7 32.5

– (3.1) (3.1) Disposals (3.3) (3.3) –

709.2 21,743.5 22,452.7 balance at end of the year 24,794.6 24,052.9 741.7


COMPANY

NuMBER OF ShARES SOuTh AFRICAN RAND

2011 2012 2012 2011

11. inveStment in SubSidiARieSInvestment in subsidiaries consist of:

2 2 Agrihold Proprietary Limited1 16.4 16.4 950 950 Bushbuck Ventures Proprietary Limited2, 4 – –

1,000 1,000 St Helena Hospital Proprietary Limited1 9.1 9.1 1,000 1,000 Gold Fields Shared Services Proprietary Limited1, 4 – –

30,000 30,000 Gold Fields Protection Services Proprietary Limited1 8.0 8.0 12 12 Gold Fields Trust Proprietary Limited1, 4 – –

501 501 Golden Hytec Farming Proprietary Limited1 9.2 9.2 2 2 Golden Oils Proprietary Limited1, 6 8.7 8.7

225 225 Living Gold Proprietary Limited3 118.6 118.6 95 95 Oryx Ventures Proprietary Limited2, 4 – –

2,160 2,160 West Driefontein Gold Mining Company1, 4 – – Less accumulated impairment losses6 (17.9) –

Total investments5 152.1 170.01 The Group has a 100% beneficial holding (2011: 100%).2 The Group has a 95% beneficial holding (2011: 95%).3 The Group has a 90% beneficial holding (2011: 90%).4 This is a nominal amount shown as zero due to rounding.5 All subsidiaries are incorporated in the Republic of South Africa.6 Impairment losses relate to the impairment of 100% of the investment in Golden Hytec and Golden Oils.



GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

12. inveStment in ASSociAteSibanye Gold has a 33.1% interest in Rand Refinery Proprietary Limited (“Rand Refinery”), a company incorporated in the Republic of South Africa, which is involved in the refining of bullion and by-products sourced from, inter alia, South African and foreign gold producing mining companies. The investment has been equity accounted since 1 July 2002.

Rand Refinery has a 30 September year end and equity accounting is based on results to 30 November 2012.

Investment in associate consists of: 3.2 3.2 Unlisted shares at cost 21.7 21.7 19.4 19.4

8.6 13.0Share of accumulated profits brought forward 103.8 71.7 – –

4.8 11.4 Share of profit after taxation 93.1 35.0 – – (0.8) (2.1) Translations adjustment – – – –

15.8 25.5 total investment in associate 218.6 128.4 19.4 19.4

78.8 110.8 Total revenue of associate 907.4 569.1 14.3 34.4 Total profit of associate 281.6 103.4

The Group’s interest in the summarised financial statements of Rand Refinery are:

37.5 56.1 Non-current assets 480.4 304.7 46.0 65.3 Current assets 559.3 373.9

83.5 121.4 total assets 1,039.7 678.6

6.6 6.5 Non-current liabilities 55.7 53.5 14.2 22.4 Current liabilities 191.7 115.2

20.8 28.9 total liabilities 247.4 168.7

62.7 92.5 net assets 792.3 509.9

Reconciliation of the total investment in associate with attributable net assets:

21.2 30.6 Net assets 262.3 172.8 (1.4) (1.4) Dividend received (8.2) (8.2) (4.0) (3.7) Fair value adjustment* (35.5) (36.2)

15.8 25.5 total investment in associate 218.6 128.4* The investment in associate was fair valued at 1 July 2002, the date when significant influence was obtained.





GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

13. FinAnciAl inStRumentS peR cAteGoRyThe accounting policies for financial instruments have been applied to the line items below:

(a) Financial assetsLoans and receivables

46.4 42.5 – Trade and other receivables 364.3 377.1 342.8 345.2 44.6 34.0 – Cash and cash equivalents 291.8 362.8 142.6 202.5

152.1 155.3 – Environmental trust funds 1,331.1 1,236.6 1,331.1 1,236.6 74.1 64.0 – Related party receivables 548.1 601.8 1,013.8 397.4

available for sale 0.2 0.2 – Investments 1.5 1.5 1.2 1.2

(b) Financial liabilitiesOther financial liabilities

– 492.5 – Borrowings 4,220.0 – 4,220.0 – 2,653.1 2,000.7 – Related-party payables 17,145.5 21,569.3 17,642.1 21,489.5

165.7 182.7 – Trade and other payables 1,565.4 1,347.1 1,234.2 985.2

14. inveStmentSunlisted

0.2 0.2 Carrying value and directors’ valuation 1.5 1.5 1.1 1.1 – – Loans advanced – – 0.1 0.1

0.2 0.2 total investments 1.5 1.5 1.2 1.2

15. enviRonmentAl tRuSt FundGold Fields mining environmental trust Fund

158.9 152.1 Balance at beginning of the year 1,236.6 1,072.4 1,236.6 1,072.4 13.5 3.0 Contributions 24.3 97.8 24.3 97.8 9.2 8.6 Interest earned 70.2 66.4 70.2 66.4

(29.5) (8.4) Translations adjustment – – – –

152.1 155.3 balance at end of the year 1,331.1 1,236.6 1,331.1 1,236.6

The proceeds from this fund are intended to fund environmental rehabilitation obligations of the Company’s mines and they are not available for general purposes of the Company. All income from this asset is reinvested or spent to meet these obligations. These obligations are included in environmental rehabilitation costs under long-term provisions, refer to note 23.



GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

16. inventoRieS 31.0 40.7 Consumable stores 348.9 251.9 4.1 4.1

31.0 40.7 total inventories 348.9 251.9 4.1 4.1

The cost of consumable stores consumed during the year and included in working costs amounted to R2,576.2 million or US$314.6 million (2011: R2,478.0 million or US$343.2 million)

17. tRAde And otheR ReceivAbleS 28.0 24.8 Trade receivables – gold sales 212.6 227.3 212.6 227.3 4.0 5.8 Other trade receivables 49.6 32.7 32.3 13.9 7.0 9.0 Prepayments 76.8 57.3 76.5 56.4

11.9 13.7 Value added tax 117.2 97.0 97.8 93.2 10.6 6.2 Payroll debtors 52.9 85.8 50.2 83.0 3.8 5.7 Other 49.2 31.3 47.7 21.0

65.3 65.2 total trade and other receivables 558.3 531.4 517.1 494.8

18. RelAted-pARty ReceivAbleSother trade receivables

27.8 64.0 – Related-party receivables 548.1 225.7 1,013.8 212.5

loans

25.4 – – Gold Fields Group Services Proprietary

Limited – 206.1 – – 20.9 – – Gold Fields Operations Limited – 170.0 – 170.0

– Other – – – 14.9

74.1 64.0 total related-party receivables 548.1 601.8 1,013.8 397.4

Refer to note 36 for further details relating to related-party balances.

19. cASh And cASh eQuivAlentS 44.6 34.0 Cash at bank and on hand 291.8 362.8 142.6 202.5

44.6 34.0 total cash and cash equivalents 291.8 362.8 142.6 202.5





GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

20. StAted ShARe cApitAl 1 1,000,000 Authorised number of shares (’000) 1,000,000 1 1,000,000 1

The authorised and issued share capital of the Company was converted from par value to no par value shares and the authorised share capital was increased during 2012 by the creation of an additional 999 999 000 ordinary no par value shares.

1 1 issued number of shares (’000) 1 1 1 1

There were no ordinary shares issued during the year. At 31 December 2012 Gold Fields owned all the issued share capital. Refer to section 1 of the accounting policies for details of the Share subscription by Gold Fields on 1 February 2013.

In terms of the general authority granted by the shareholder of the Company on 21 November 2012, the Board may issue authorised but unissued ordinary share capital representing not more than 5% of the issued share capital of the Company at any time in accordance with the memorandum of incorporation and the Companies Act.

All the Sibanye Gold ordinary shares rank pari passu in all respects, there being no conversion or exchange rights attached thereto, and all of the ordinary shares will have equal rights to participate in capital, dividend and profit distributions by the Company.



GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

21. deFeRRed tAxAtionThe detailed components of the net deferred taxation liability which results from the differences between the amounts of assets and liabilities recognised for financial reporting and taxation purposes in different accounting periods are:

deferred taxation liabilities 636.0 514.2 – Mining assets 4,407.1 5,170.6 4,406.0 5,167.7 52.3 42.5 – Investment in environmental trust fund 364.4 425.5 364.4 425.5 2.5 1.8 – Other 15.3 20.0 0.6 4.5

690.8 558.5 Gross deferred taxation liabilities 4,786.8 5,616.1 4,771.0 5,597.7

deferred taxation assets (75.5) (72.4) – Provisions (620.4) (614.1) (602.9) (597.4)

– (0.5) – Tax losses (4.2) – – – – – – Unredeemed capital expenditure – – – –

615.3 485.6 net deferred taxation liabilities 4,162.2 5,002.0 4,168.1 5,000.3

Included in the statement of financial position as follows:

(2.3) (2.7) Deferred taxation assets (23.3) (18.3) – – 617.5 488.4 Deferred taxation liabilities 4,185.5 5,020.3 4,168.1 5,000.3

615.2 485.7 net deferred taxation liabilities 4,162.2 5,002.0 4,168.1 5,000.3

652.0 615.3 Balance at beginning of the year 5,002.0 4,400.8 5,000.3 4,399.0 83.2 (102.5) Current year charge (839.8) 601.2 (832.2) 601.3

(119.9) (27.1) Translations adjustment – – – –

615.3 485.7 balance at end of the year 4,162.2 5,002.0 4,168.1 5,000.3




22. boRRowinGS

(a) long-term Rand revolving credit facilities

Sibanye Gold and Gold Fields Operations Limited (“GFO”) (collectively the “Borrowers”) entered into various revolving credit facilities with some of the major banks with tenors between three and five years. The purpose of these facilities was to finance capital expenditure, general corporate and working capital requirements and to refinance existing borrowings.

The borrowers were required to pay a commitment fee of between 0.65% and 0.90% per annum on the undrawn and uncancelled amounts of the facilities, calculated and payable either quarterly or semi-annually in arrears.

In summary the facilities were: – a R1.0 billion (US$116.7 million) revolving credit facility entered into on 9 December 2009 and maturing on 30 June 2013

at JIBAR plus 3.00%;– a R500.0 million (US$58.3 million) revolving credit facility entered into on 8 March 2010 and maturing on 10 March 2013

at JIBAR plus 2.85%;– a R1.5 billion (US$175.0 million) revolving credit facility entered into on 6 May 2009 and maturing on 10 June 2014 at

JIBAR plus 2.95%. This facility was cancelled and replaced with a new R2.0 billion (US$233.4 million) revolving credit facility on 15 December 2011 as detailed below; and

– a R2.0 billion (US$233.4 million) revolving credit facility entered into on 15 December 2011 and maturing on 19 December 2016 at JIBAR plus 1.95%.

Borrowings under these facilities were guaranteed by Gold Fields and certain of its subsidiaries: Gold Fields Holdings Company (BVI) Limited (“GF Holdings”), GFO, Gold Fields Orogen Holding (BVI) Limited (“Orogen”), Newshelf 899 Proprietary Limited (“Newshelf”) and Sibanye Gold.

These facilities were unutilised during the year ended 31 December 2011.

On various dates during 2012, Sibanye Gold drew down amounts totalling R2.0 billion under the R2.0 billion revolving credit facility. On 24 October 2012, Sibanye Gold drew down R500.0 million under the R500.0 million revolving credit facility. On 16 November 2012, Sibanye Gold drew down a further R500.0 million under the R1.0 billion revolving credit facility.

The outstanding borrowings of Sibanye Gold under these facilities at 31 December 2012 were R3.0 billion (US$350.1 million) and at 31 December 2011: Rnil (US$nil).

Subsequent to year end, on 18 February 2013, these facilities were refinanced by drawing down under the Rand bridge loan facilities as detailed below. These facilities were also cancelled on 18 February 2013.

(b) Short-term Rand credit facilities

Sibanye Gold utilised uncommitted loan facilities from some of the major banks to fund the capital expenditure and working capital requirements at KDC and Beatrix. The total draw downs were R1,220.0 million and R400.0 million, respectively, during the years ended 31 December 2012 and 31 December 2011. The total repayments were Rnil million and R400.0 million, respectively, during the years ended 31 December 2012 and 31 December 2011.

The outstanding borrowings of Sibanye Gold under these facilities at 31 December 2012 were R1,220.0 million (US$142.4 million) and at 31 December 2011: Rnil (US$nil).

Subsequent to year end, on 18 February 2013, these facilities were refinanced by drawing down under the Rand bridge loan facilities as detailed below.

These facilities have no fixed terms, are short-term in nature and interest rates are market related. Borrowings under these facilities are guaranteed by Gold Fields.


22. boRRowinGS (continued)

(c) Rand bridge loan facilities

On 28 November 2012, Sibanye Gold entered into a R6.0 billion term loan and revolving credit facilities reducing to R5.0 billion as detailed below. The facilities comprise a R2.0 billion revolving credit facility and a R4.0 billion term loan facility. The available revolving credit facility amount will reduce from R2.0 billion to R1.5 billion on the earliest of the date on which Sibanye Gold’s Board of Directors declares a final dividend in respect of the financial year ending December 2013 or the first anniversary of the unbundling, being 18 February 2014. Similarly, the term loan facility amount will reduce from R4.0 billion to R3.5 billion on the earliest of the date on which Sibanye Gold’s Board of Directors declares a final dividend in respect of the financial year ending December 2013 or the first anniversary of the unbundling, being 18 February 2014. The final maturity date of the facilities is 18 months after the unbundling date of 18 February 2013.

The purpose of the Rand bridge loan facilities is to refinance Sibanye Gold’s debt as detailed above under the Long-term Rand revolving credit facilities and the Short-term Rand credit facilities on unbundling, with the balance of the Rand bridge loan facilities to be used to fund Sibanye Gold’s on-going capital expenditure, working capital and general corporate expenditure requirements.

Sibanye Gold has ceded all of its rights, title and interest in and to the Indemnity Agreement in favour of the lenders of the Rand bridge loan facility, jointly and severally, as security for its obligations under the facilities. Sibanye Gold must lodge and register a security package for its obligations under the US$1 billion notes issue within six months from the unbundling if it is not released as a guarantor under the Notes (refer (d)) at such point in time. The Indemnity Agreement is discussed in (d)(i).

The Rand bridge loan facilities bear interest at JIBAR plus a margin of 3.00% per annum for 12 months after the unbundling and 3.50% per annum for the last six months of the facilities. If Sibanye Gold is not released as a guarantor under the Notes within six months from unbundling, the margin will increase to 3.25% per annum for the six to 12 months period after unbundling and 3.75% per annum for the last six months of the facilities. Sibanye Gold is required to pay a quarterly commitment fee of 35% of the applicable margin per annum calculated on the undrawn portion of the facilities.

The facilities were undrawn at 31 December 2012.

Subsequent to year end, on 18 February 2013, the Long-term Rand revolving credit facilities and the Short-term Rand credit facilities were refinanced by drawing down under the Rand bridge loan facilities.

(d) borrowings guaranteed by Sibanye Gold

Sibanye gold has not drawn from the following debt facilities but serves as a guarantor for these facilities at 31 December 2012:

(i) Us$1 billion notes issueOn 30 September 2010, Orogen issued US$1,000,000,000 4.875% guaranteed notes due on 7 October 2020 (the Notes). The interest is due and payable semi-annually on 7 April and 7 October in arrears. The payment of all amounts due in respect of the Notes is unconditionally and irrevocably guaranteed by Gold Fields, Sibanye Gold, GFO and GF Holdings (collectively the “Guarantors”), on a joint and several basis. The Notes and guarantees constitute direct, unsubordinated and unsecured obligations of Orogen and the Guarantors, respectively, and rank equally in right of payment among themselves and with all other existing and future unsubordinated and unsecured obligations of Orogen and the Guarantors, respectively.

An indemnity agreement (the “Indemnity Agreement”) has been entered into between the Guarantors, pursuant to which the Guarantors (other than Sibanye Gold) hold Sibanye Gold harmless from and against any and all liabilities and expenses which may be incurred by Sibanye Gold under or in connection with the Notes, including any payment obligations by Sibanye Gold to the noteholders or the trustee of the Notes pursuant to the guarantee of the Notes, all on the terms and subject to the conditions contained therein. The Indemnity Agreement will remain in place for as long as Sibanye Gold’s guarantee obligations under the Notes remain in place.




22. boRRowinGS (continued)

(ii) Us$1 billion syndicated revolving credit facilityOn 20 June 2011, Sibanye Gold, Orogen and GFO entered into a US$1 billion syndicated revolving loan facility with an option to increase the facility to US$1.1 billion within six months from signing date. The option to increase the facility to US$1.1 billion was not exercised. The purpose of the facility was to refinance an existing facility, for general corporate purposes and working capital. The final maturity date of this facility was 20 June 2016.

The facility bore interest at LIBOR plus a margin of 1.20% per annum. Where the utilisation under the facility was greater than 33 1/3% and less than or equal to 66 2/3%, a utilisation fee of 0.20% per annum would be payable on the amount of utilisations. Where the utilisation under the facility was greater than 66 2/3%, a utilisation fee of 0.40% per annum would be payable on the amount of utilisations. Such utilisation fee was payable quarterly in arrears. The borrowers were required to pay a quarterly commitment fee of 0.42% per annum.

Orogen was the only entity that has drawn down under this facility during the year ended 31 December 2011 and 2012.

The outstanding borrowings of Orogen under this facility at 31 December 2012 were R5,707.6 million (US$666.0 million) and at 31 December 2011 R1,788.6 million (US$220 million).

Borrowings under the syndicated revolving loan facility were guaranteed by Gold Fields, Sibanye Gold, GF Holdings, Orogen, Newshelf and GFO.

Subsequent to year end, on 15 February 2013, this facility was refinanced by Gold Fields by drawing down under their new facilities. Sibanye Gold was released as guarantor after the facility was cancelled on 15 February 2013.

(iii) Us$500 million syndicated revolving credit facilityOn 17 April 2012, Sibanye Gold, Orogen and GFO entered into a US$500 million syndicated revolving credit facility. The purpose of the facility was to refinance existing facilities, for general corporate purposes and working capital. The final maturity date of this facility was 17 April 2017.

The facility bore interest at LIBOR plus a margin of 1.60% per annum. Where the utilisation under the facility was less than or equal to 33 1/3%, a utilisation fee of 0.20% per annum would be payable on the amount of utilisations. Where the utilisation under the facility was greater than 33 1/3% and less than or equal to 66 2/3%, a utilisation fee of 0.40% per annum would be payable on the amount of utilisations. Where the utilisation under the facility was greater than 66 2/3%, a utilisation fee of 0.60% per annum would be payable on the amount of utilisations. Such utilisation fee was payable quarterly in arrears. The borrowers were required to pay a quarterly commitment fee of 0.56% per annum.

Orogen was the only entity that has drawn down under this facility during the year ended 31 December 2012.

The outstanding borrowings of Orogen under this facility at 31 December 2012 were R891.3 million (US$104.0 million). Borrowings under the syndicated revolving loan facility were guaranteed by Gold Fields, Sibanye Gold, GF Holdings, Orogen, Newshelf and GFO.

Subsequent to year end, on 15 February 2013, this facility was refinanced by drawing down under their new facilities. Sibanye Gold was released as guarantor after this facility was also cancelled on 15 February 2013.



GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

22. boRRowinGS (continued)(a) long-term Rand revolving

credit facilities

– – Balance at beginning of the period – – – –

– 366.3 Loans advanced 3,000.0 – 3,000.0 –

– (16.2) Translation adjustment – – – –

– 350.1 balance at end of the period 3,000.0 – 3,000.0 –

(b) Short-term Rand credit facilities

– – Balance at beginning of the period – – – –

55.4 149.0 Loans advanced 1,220.0 400.0 1,220.0 400.0

(55.4) – Loans repaid – (400.0) – (400.0)

– (6.6) Translation – – – –

– 142.4 balance at end of the period 1,220.0 – 1,220.0 –

– 492.5 Gross borrowings 4,220.0 – 4,220.0 –

– (259.0) Current portion of borrowings (2,220.0) – (2,220.0) –

– 233.5 total non-current borrowings 2,000.0 – 2,000.0 –

the exposure of the Group’s borrowings to interest rate changes and the contractual reprising dates at the reporting dates are as follows:

– 492.4 Six months or less 4,220.0 – 4,220.0 –

– 492.4 4 220.0 – 4,220.0 –

the carrying amounts of the Group’s borrowings are denominated in the following currencies:

– 492.4 Rand 4,220.0 – 4,220.0 –

– 492.4 4,220.0 – 4,220.0 –

the Group has the following undrawn borrowing facilities:

– 788.3 Committed 6,756.1 – 6,756.1 –

208.6 – Uncommitted – 1,696.0 – 1,696.0

208.6 788.3 6 756.1 1,696.0 6,756.1 1,696.0

All of the above facilities have floating rates. the uncommitted facilities have no expiry dates and are open ended. the undrawn committed facilities have the following expiry dates:

– 58.3 – within one year 500.0 – 500.0 –

– 730.0– later than three years and not later than

five years 6,256.1 – 6,256.1 –

– 788.3 6,756.1 – 6,756.1 –





SOuTh AFRICAN RAND

2012

utilised by total

facilities Sibanye

Gold Gold Fields total

unutilised

22. boRRowinGS (continued)Summary of guaranteed facilities:

Long-term Rand revolving credit facilities 3,500.0 3,000.0 – 500.0US$1 billion notes issue 8,570.0 – 8,570.0 – US$1 billion syndicated revolving credit facility 8,570.0 – 5,707.6 2,862.4US$500 million syndicated revolving credit facility 4,285.0 – 891.3 3,393.7

24,925.0 3,000.0 15,168.9 6,756.1

2011

Split-tenor revolving credit facility 4,065.0 – 4,065.0 – Long-term Rand revolving credit facilities 3,500.0 – – 3,500.0US$1 billion notes issue 8,130.0 – 8,130.0 – US$1 billion syndicated revolving credit facility 8,130.0 – 1,788.6 6,341.4

23,825.0 – 13,983.6 9,841.4

A financial guarantee has been raised relating to the above guarantees. Refer to note 24.

uNITED STATES DOLLAR

2012

utilised by total

facilities Sibanye

Gold Gold Fields total

unutilised

Long-term Rand revolving credit facilities 408.4 350.1 – 58.3US$1 billion notes issue 1,000.0 – 1,000.0 – US$1 billion syndicated revolving credit facility 1,000.0 – 666.0 334.0US$500 million syndicated revolving credit facility 500.0 – 104.0 396.0

2,908.4 350.1 1,770.0 788.3

2011

Split-tenor revolving credit facility 500.0 – 500.0 – Long-term Rand revolving credit facilities 430.5 – – 430.5US$1 billion notes issue 1,000.0 – 1,000.0 – US$1 billion syndicated revolving credit facility 1,000.0 – 220.0 780.0

2,930.5 – 1,720.0 1,210.5

A financial guarantee has been raised relating to the above guarantees. Refer to note 24.



GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

23. pRoviSionS 2.1 2.1 Post-retirement healthcare costs 17.7 16.8 17.3 16.4

174.3 202.9 Environmental rehabilitation costs 1,739.1 1,417.1 1,739.1 1,417.1

176.4 205.0 total provisions 1,756.8 1,433.9 1,756.4 1,433.5

23.1 Sibanye Gold post-retirement healthcare costs

The Group has certain liabilities to subsidise the contributions payable by certain pensioners and dependants of ex-employees on a pay-as-you-go basis. The remaining obligation was actuarially valued at 31 December 2012 and the outstanding contributions will be funded over the lifetime of these pensioners and dependants.

The following table sets forth the funded status and amounts recognised for post-retirement healthcare costs:

2.1 2.1 Actuarial present value 17.7 16.8 17.3 16.4Plan assets at fair value – – – –

2.1 2.1Accumulated benefit obligation in excess of plan assets 17.7 16.8 17.3 16.4

– – Unrecognised prior service costs – – – – – – Unrecognised actuarial (gains)/losses – – – –

2.1 2.1 Post-retirement healthcare liability 17.7 16.8 17.3 16.4

Benefit obligation reconciliation 2.5 2.1 Balance at beginning of the period 16.8 17.1 16.4 16.7 0.1 0.3 Interest charge 2.1 0.9 2.1 0.9 (0.2) (0.1) Payments during the period (1.2) (1.2) (1.2) (1.2) (0.3) (0.2) Translation adjustment – – – –

2.1 2.1 Balance at end of the period 17.7 16.8 17.3 16.4

The obligation has been valued using the projected unit credit funding method on past service liabilities. The valuation assumes a healthcare cost inflation rate of 7.5% per annum (2011: 8.0%) and a discount rate of 8.0% per annum (2011: 8.75%). Assumed healthcare cost trend rates have a significant impact on the amounts reported for the healthcare plans.

A one percentage point increase in assumed healthcare trend rates would have increased interest cost for the period to December 2012 by R0.2 million (11.0%) (2011: R0.2 million (10.8%)). The effect of this change on the accumulated post-retirement healthcare benefit obligation at 31 December 2012 would have been an increase of R1.8 million (10.6%) (2011: R1.8 million (10.5%)).

A one percentage point decrease in assumed healthcare trend rates would have decreased interest cost for the period to 31 December 2012 by R0.1 million (9.3%) (2011: R0.1 million (9.2%)). The effect of this change on the accumulated post-retirement healthcare benefit obligation at 31 December 2012 would have been a decrease of R1.6 million (9.0%) (2011: R1.5 million (8.9%)).





GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

23. pRoviSionS (continued)

23.2 environmental rehabilitation costs 172.1 174.3 Balance at beginning of the period 1,417.1 1,161.6 1,417.1 1,161.6 23.4 32.3 Changes in estimates1 264.3 169.2 264.3 169.2 8.8 6.1 Inflation charge2 49.8 63.7 49.8 63.7 3.1 1.0 Interest charge2 7.9 22.6 7.9 22.6

(33.1) (10.8) Translation adjustment – – – –

174.3 202.9 balance at end of the period 1,739.1 1,417.1 1,739.1 1,417.1

The Group’s mining companies are required by law to undertake rehabilitation works as part of their on-going operations. The Group makes contributions into an environmental trust fund (refer to note 15) and hold guarantees to partly secure the estimated costs.

24. tRAde And otheR pAyAbleS 66.1 52.2 Trade creditors 447.3 537.2 208.0 286.9 69.1 83.8 Accruals and other creditors 718.4 562.1 661.1 497.4 25.7 21.2 Payroll creditors 182.1 208.9 164.6 187.5 44.6 46.7 Leave pay accrual 400.6 362.7 375.5 345.6

– 22.8Financial guarantees liability (refer to note 22) 196.4 – 196.4 –

4.8 2.7 Other 21.2 38.9 4.1 13.4

210.3 229.4 Total trade and other payables 1,966.0 1,709.8 1,609.7 1,330.8

25. RelAted-pARty pAyAbleSOther trade payables

36.8 4.4 – Related-party payables 37.6 299.0 14.3 35.2

Loans 2,614.8 1,996.3 – GFL Mining Services Limited 17,108.0 21,258.1 17,108.0 21,274.2

– – – Gold Fields Group Services Proprietary

Limited – – – 180.1 1.5 – – Other – 12.2 519.9 –

2,653.1 2,000.7 total related-party payables 17,145.5 21,569.3 17,642.1 21,489.5

Refer to note 36 for further details relating to related-party balances.

1 Changes in estimates are defined as changes in reserves and corresponding changes in life of mine as well as changes in laws and regulations governing environmental matters.

2 The provision is calculated based on the inflation and discount rates of 5.3% – 6.4% and 5.2% – 7.0% (December 2011: 5.6% – 6.5% and 6.2% – 7.7%).



GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

26. cASh GeneRAted by opeRAtionS

355.1 363.9 profit for the year 2,980.2 2,563.2 2,880.1 2,629.8 40.1 34.4 Royalties 282.1 289.5 282.1 289.5

175.1 (44.6) Taxation (365.0) 1,264.5 (381.8) 1,242.2 2.0 14.5 Interest paid 119.0 14.5 118.5 14.0 (4.4) (4.3) Interest received (35.3) (31.9) (27.9) (24.0)

567.9 363.9 earning before non-cash items 2,981.0 4,099.8 2,871.0 4,151.5Non-cash and other adjusting items

303.8 288.5 Amortisation and depreciation 2,362.8 2,193.2 2,345.2 2,178.5 8.8 6.1 Inflation adjustment to rehabilitation liability 49.8 63.7 49.8 63.7 3.1 1.0 Interest adjustment to rehabilitation liability 7.9 22.6 7.9 22.6 (9.2) (8.6) Interest rehabilitation trust fund (70.2) (66.4) (70.2) (66.4)

33.0 32.2 Share-based payments 263.5 238.0 209.8 183.4 (4.8) (11.4) Share of results of associates (93.1) (35.0) – – (0.5) (2.7) Other (22.2) (3.4) 4.1 (3.3)

902.1 669.0 total cash generated by operations 5,479.5 6,512.5 5,417.6 6,530.0

27. chAnGe in woRkinG cApitAl (7.1) (11.8) Inventories (97.0) (51.0) – (0.3)

55.8 (42.6) Trade, related and other receivables (349.3) 402.7 (823.6) 92.8 (15.3) (24.6) Trade, related and other payables (201.7) (110.4) 61.5 (136.5)

33.4 (79.0) total change in working capital (648.0) 241.3 (762.1) (44.0)

28. RoyAltieS pAid (13.0) (25.3) Balance at beginning of the period (206.0) (88.0) (206.0) (88.0) (40.1) (34.4) Royalties (282.1) (289.5) (282.1) (289.5)

4.0 0.5 Translation adjustment – – – – 25.3 8.7 Amount owing at end of the period 74.4 206.0 74.4 206.0

(23.8) (50.5) total royalties paid (413.7) (171.5) (413.7) (171.5)

29. tAx pAid (26.5) (64.9) Balance at beginning of the period (527.8) (179.1) (514.2) (174.1) (91.9) (58.0) Current taxation (474.8) (663.3) (450.4) (640.9)

9.9 0.6 Translation adjustment – – – – 64.9 2.6 Amount owing at end of the period 22.2 527.8 12.4 514.2

(43.6) (119.7) total tax paid (980.4) (314.6) (952.2) (300.8)





GROuP GROuP COMPANY


2011 2012 2012 2011 2012 2011

30. RetiRement beneFitSAll employees are members of various defined contribution retirement schemes.

Contributions to the various retirement schemes are fully expensed during the year in which they are incurred. The cost of providing retirement benefits for the year amounted to R514.7 million (2011: R474.8 million).

31. commitmentSCapital expenditure

461.2 506.5 – authorised 4,340.7 3,749.3 4,340.7 3,749.3KDC 3,436.2 3,037.9 3,436.2 3,037.9Beatrix 897.9 708.5 897.9 708.5Other 6.6 2.9 6.6 2.9

49.3 59.7 – contracted for 511.4 401.1 511.4 398.8 0.5 0.5 Other guarantees 4.1 4.1 4.1 4.1

Commitments will be funded from internal sources and to the extent necessary from borrowings. This expenditure primarily relates to hostel upgrades, mining activities and infrastructure. Also refer to note 22 for debt guarantees provided by the Group.

32. continGent liAbilitieS

world Gold council

Gold Fields, which was the ultimate holding company of Sibanye Gold, is a member of the World Gold Council. In terms of the membership agreement, all members are responsible for certain costs, including on-going costs on a three-year rolling basis, winding up costs, if applicable, and various other contingent liabilities. Apportionment of liabilities to individual members, should they arise, is done proportionate to the member’s production relative to the total production of all members. To date, no claims have been made on Gold Fields.

occupational healthcare services

The Group provides occupational healthcare services to its employees through its existing facilities at the various operations. There is a risk that the cost of providing such services could increase in the future depending upon changes in the nature of underlying legislation and the profile of employees. Any such increased cost has not yet been quantified. The Group is monitoring developments in this regard.


32. continGent liAbilitieS (continued)

The principal health risks associated with Sibanye Golds’ mining operations in South Africa arise from occupational exposure to silica dust, noise, heat and certain hazardous chemicals. The most significant occupational diseases affecting Sibanye Golds’ workforce include lung diseases (such as silicosis, tuberculosis, a combination of the two and chronic obstructive airways disease (“COAD”) as well as noise induced hearing loss (“NIHL”). The Occupational Diseases in Mines and Works Act, 78 of 1973, or ODMWA, governs the compensation paid to mining employees who contract certain illnesses, such as silicosis. Recently, the South African Constitutional Court ruled that a claim for compensation under ODMWA does not prevent an employee from seeking compensation from its employer in a civil action under common law (either as individuals or as a class). While issues, such as negligence and causation, need to be proved on a case by case basis, it is possible that such ruling could expose Sibanye Gold to claims related to occupational hazards and diseases (including silicosis), which may be in the form of a class or similar group action. If Sibanye Gold were to face a significant number of such claims and the claims were suitably established against it, the payment of compensation for the claims could have a material adverse effect on Sibanye Gold’s results of operations and financial condition. In addition, Sibanye Gold may incur significant additional costs arising out of these issues, including costs relating to the payment of fees, levies or other contributions in respect of compensatory or other funds established (if any) and expenditures arising out of its efforts to resolve any outstanding claims or other potential action.

On 21 August 2012, a court application was served on a group of respondents that included Sibanye Gold (the August Respondents). On 21 December 2012, a further court application was issued and was formally served on a number of respondents, including Sibanye Gold, (the December Respondents and, together with the August Respondents, the Respondents) on 10 January 2013, on behalf of classes of mine workers, former mine workers and their dependants who were previously employed by, or who are currently employed by, amongst others, Sibanye Gold and who allegedly contracted silicosis and/or other occupational lung diseases (the “Classes”). The court application of 21 August 2012 and the court application of 21 December 2012 are together referred to below as the “Applications”.


With respect to the Applications Sibanye Gold has filed a notice of its intention to oppose the Applications and has instructed its attorneys to defend the claims. Sibanye Gold and its attorneys are engaging with the applicants’ attorneys in both Applications to try to establish a court-sanctioned process to agree the timelines, (including the date by which Sibanye Gold must file its papers opposing the Applications) and the possible consolidation of the separate applications. At this stage, Sibanye Gold cannot quantify its potential liability from these actions.

Acid mine drainage

The Group has identified a risk of potential long-term Acid Mine Drainage (“AMD”), on certain of its operations. AMD relates to the acidification and contamination of naturally occurring water resources by pyrite-bearing ore contained in underground mines and in rock dumps, tailings dams and pits on the surface. The Group has not been able to reliably determine the financial impact that AMD might have on the Group, however, the Group has adopted a proactive approach by initiating projects such as Liquid Gold (long-term water management strategy), and the identification of mine rehabilitation to focus on AMD risk management. The Group also conducts acid base accounting to obtain a more detailed understanding of where they key potential AMD risks are located at identified operations, thereby better informing appropriate long-term mitigation strategies.

33. eventS AFteR the RepoRtinG dAteThere were no events that could have a material impact on the financial results of the Group after 31 December 2012, except for the Share subscription, the repayment of the GFLMS loan and the unbundling from Gold Fields, all as detailed under the accounting policies.

In addition, as detailed in the borrowings note (refer to note 22), Sibanye Gold refinanced all of its debt which was under the existing Gold Fields Group debt facilities on 18 February 2013, by drawing down under the Rand bridge loan facilities. As of 18 February 2013, the Gold Fields Group is not guaranteeing any debt of Sibanye Gold, similarly Sibanye Gold has been released from all of its obligations as guarantor under Gold Fields group debt, except, Sibanye Gold will remain a guarantor to the Notes.





GROuP


2011 2012 2012 2011

carrying amount

Fair value

carrying amount

Fair value

carrying amount

Fair value

carrying amount

Fair value

34. FAiR vAlue oF FinAnciAl ASSetS And liAbilitieSThe fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in an arm’s-length transaction between willing parties. The estimated values of the financial instruments are:

Financial assets 44.6 44.6 34.0 34.0 Cash and cash equivalents 291.8 291.8 362.8 362.8 46.4 46.4 42.5 42.5 Trade and other receivables 364.3 364.3 377.1 377.1 74.0 74.0 64.0 64.0 Related-party receivables 548.1 548.1 601.8 601.8

152.1 152.1 155.3 155.3 Environmental trust fund 1,331.1 1,331.1 1,236.6 1,236.6 0.2 0.2 0.2 0.2 Investments 1.5 1.5 1.5 1.5

Financial liabilities 165.7 165.7 182.7 182.7 Trade and other payables 1,565.4 1,565.4 1,347.1 1,347.1

– – 233.5 233.5 Borrowings 2,000.0 2,000.0 – – – – 259.0 259.0 Current portion of borrowings 2,220.0 2,220.0 – –

2,653.1 2,653.1 2,000.7 2,000.7 Related-party payables 17,145.5 17,145.5 21,569.3 21,569.3

COMPANY

SOuTh AFRICAN RAND

2011 2012

carrying amount

Fair value

carrying amount

Fair value

Financial assets 202.5 202.5 Cash and cash equivalents 142.6 142.6 345.2 345.2 Trade and other receivables 342.8 342.8 397.4 397.4 Related-party receivables 1,013.8 1,013.8

1,236.6 1,236.6 Environmental trust fund 1,331.1 1,331.1 1.2 1.2 Investments 1.2 1.2

Financial liabilities 985.2 985.2 Trade and other payables 1,234.2 1,234.2

– – Borrowings 2,000.0 2,000.0 – – Current portion of borrowings 2,220.0 2,220.0

21,489.5 21,489.5 Related-party payables 17,642.1 17,642.1


34. FAiR vAlue oF FinAnciAl ASSetS And liAbilitieS (continued)

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

trade and other receivables/payables, related-party receivables/payables and cash and cash equivalentsThe carrying amounts approximate fair values due to the short maturity of these instruments.

investments, environmental trust fund, borrowings and current portion of borrowingsThe fair value of publicly traded instruments is based on quoted market values. The environmental trust fund is stated at fair value based on the nature of the fund’s investments. The fair value of borrowings and current portion of borrowings approximates their carrying amount as the impact of credit risk is included in the measurement of carrying amounts.

Financial instrumentsThe fair value of financial instruments is estimated based on ruling market prices, volatilities and interest rates at 31 December 2012. All derivatives are carried on the statement of financial position at fair value.

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments:

level 1: unadjusted quoted prices in active markets for identical asset or liabilities;level 2: inputs other than quoted prices in level 1 that are observable for the asset or liability, either directly (as prices) or

indirectly (derived from prices); andlevel 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table set out the Group’s financial assets and liabilities measured at fair value by level within the fair value hierarchy as at 31 December 2012:

GROuP


2012 2012

level 3 level 2 level 1 total total level 1 level 2 level 3

Financial assets – 30.0 125.3 155.3 Environmental trust fund 1,331.1 1,073.9 257.2 –

0.2 – – 0.2 Unlisted investments 1.5 – – 1.5

2011 2011


Financial assets – 39.0 113.1 152.1 Environmental trust fund 1,236.6 919.6 317.0 –

0.2 – – 0.2 Unlisted investments 1.5 – – 1.5

COMPANY


2011 2012


Financial assets – 317.0 919.6 1,236.6 Environmental trust fund 1,331.1 1,073.9 257.2 –

1.2 – – 1.2 Unlisted investments 1.2 – – 1.2environmental trust fundComprises interest-bearing short-term investments of which investments amounting to R1,073.9 million (2011: R919.6 million) are valued using quoted market prices and investments of R257.2 million (2011: R317.0 million) are valued using inputs other than quoted prices that are observable for the assets.

unlisted investmentsComprise investments in unlisted companies which are accounted for at directors’ valuation adjusted for write-downs where appropriate.




35. RiSk mAnAGement ActivitieSIn the normal course of its operations, the Group is exposed to commodity price, currency, interest rate, liquidity and credit risk. In order to manage these risks, the Group has developed a comprehensive risk management process to facilitate control and monitoring of these risks.

controlling and managing risk in the GroupGold Fields, which was the ultimate holding company of Sibanye Gold during 31 December 2011 and 2012, had policies in areas such as counterparty exposure, hedging practices and prudential limits which have been approved by Gold Fields Board of Directors. Management of financial risk was centralised at Gold Fields treasury department, which acted as the interface between Sibanye Gold and counterparty banks. The Gold Fields treasury department managed financial risk in accordance with the policies and procedures established by the Gold Fields Board of Directors and Executive Committee.

The Gold Fields Board of Directors had approved dealing limits for money market, foreign exchange and commodity transactions, which Gold Fields treasury department was required to adhere to. Among other restrictions, these limits describe which instruments may be traded and demarcate open position limits for each category as well as indicating counterparty credit-related limits. The dealing exposure and limits were checked and controlled each day and reported to Gold Fields Chief Financial Officer.

The objective of Gold Fields treasury department was to manage all financial risks arising from the Group’s business activities in order to protect profit and cash flows. Treasury activities of Gold Fields Limited and its subsidiaries were guided by the treasury policy, the treasury framework as well as domestic and international financial market regulations. Treasury activities were performed within the treasury framework with appropriate resolutions from the Board of Gold Fields Limited, which were reviewed and approved annually by the Gold Fields Audit Committee.

Sibanye Gold’s Board of Directors has adopted the same risk management policies as above and will assess these policies on an annual basis going forward.

The financial risk management objectives of the Group are defined as follows:

liquidity risk management: the objective is to ensure that the Group is able to meet its short-term commitments through the effective and efficient management of cash and usage of credit facilities.

currency risk management: the objective is to maximise the Group’s profits by minimising currency fluctuations.

Funding risk management: the objective is to meet funding requirements timeously and at competitive rates by adopting reliable liquidity management procedures.

investment risk management: the objective is to achieve optimal returns on surplus funds.

interest rate risk management: the objective is to identify opportunities to prudently manage interest rate exposures.

counterparty exposure: the objective is to only deal with approved counterparts that are of a sound financial standing and who have an official credit rating. The Group is limited to a maximum investment of 2.5% of the financial institutions’ equity, which is dependent on the institutions’ credit rating. The credit rating used is Fitch Ratings’ short-term credit rating for financial institutions.

commodity price risk management: commodity risk management takes place within limits and with counterparts as approved in the treasury framework.

operational risk management: the objective is to implement controls to adequately mitigate the risk of error and/or fraud.

banking relations management: the objective is to maintain relationships with credible financial institutions and ensure that all contracts and agreements related to risk management activities are co-ordinated and consistent throughout the Group and that they comply where necessary with all relevant regulatory and statutory requirements.


35. RiSk mAnAGement ActivitieS (continued)

credit risk

Credit risk represents risk that an entity will suffer a financial loss due to the other party of a financial instrument not discharging its obligation.

The Group has reduced its exposure to credit risk by dealing with a number of counterparties. The Group approves these counterparties according to its risk management policy and ensures that they are of good credit quality.

Trade receivable are reviewed on a regular basis and an allowance for impairment is raised when they are not considered recoverable.

The combined maximum credit risk exposure is as follows:

GROuP COMPANY

SOuTh AFRICAN RAND uNITED STATES DOLLAR SOuTh AFRICAN RAND

2012 2011 2012 2011 2012 2011

Environmental trust funds 1,331.1 1,236.6 155.3 152.1 1,331.1 1,236.6Trade and other receivables 364.3 377.1 42.5 46.4 342.8 345.2Related party receivables 548.1 601.8 64.0 74.1 1,013.8 397.4Cash and cash equivalents 291.8 362.8 34.0 44.6 142.6 202.5

Trade receivables comprise banking institutions purchasing gold bullion. These receivables are in a sound financial position and no impairment has been recognised.

Trade and other receivables above exclude VAT and pre-payments.

Receivables that are past due but not impaired total R7.3 million (2011: R10.3 million). At 31 December 2012, receivables of R12.5 million (2011: R17.4 million) are considered impaired and are provided for.

Concentration of credit risk on cash and cash equivalents and non-current assets is considered minimal due to the abovementioned investment risk management and counterparty exposure risk management policies.

liquidity risk

In the ordinary course of business, the Group receives cash proceeds from its operations and is required to fund working capital and capital expenditure requirements. The cash is managed to ensure surplus funds are invested to maximise returns whilst ensuring that capital is safeguarded to the maximum extent possible by investing only with top financial institutions.

Uncommitted borrowing facilities are maintained with several banking counterparties to meet the Group’s normal and contingency funding requirements.




35. RiSk mAnAGement ActivitieS (continued)The following are the contractually due undiscounted cash flows resulting from maturities of all financial liabilities, including interest payments:

GROuP GROuP


After five years

between one and

five yearswithin

one year total totalwithin

one year

between one and

five yearsAfter

five years

31 december 2012 – – 182.7 182.7 Trade and other payables 1,565.4 1,565.4 – –

1,770.0 1,770.0 Financial guarantees1 15,168.9 15,168.9 – – – – 2,000.7 2,000.7 Related-party payables 17,145.5 17,145.5 – –

Borrowings2

– 233.4 259.0 492.4 – Capital 4,220.0 2,220.0 2,000.0 – – 48.3 20.5 68.8 – Interest 590.0 176.1 413.9 –

214.7 – – 214.7Environmental rehabilitation costs3 1,839.7 – – 1,839.7

2.1 – – 2.1Post-retirement healthcare costs 17.7 – – 17.7

216.8 281.7 4,232.8 4,731.3 total 40,547.2 36,275.9 2,413.9 1,857.4

31 december 2011 – – 165.7 165.7 Trade and other payables 1,347.1 1,347.1 – –

1,220.0 1,220.0 Financial guarantees1 9,918.6 9,918.6 – – – – 2,653.1 2,653.1 Related-party payables 21,569.3 21,569.3 – –

195.6 – – 195.6Environmental rehabilitation costs3 1,590.6 – – 1,590.6


197.7 – 4,038.8 4,236.5 total 34,442.4 32,835.0 – 1,607.4

COMPANY COMPANY


After five years

between one and

five yearswithin

one year total totalwithin

one year

between one and

five yearsAfter

five years

31 december 2011 31 december 2012

– – 985.2 985.2 Trade and other payables 1,234.2 1,234.2 – – – – 9,918.6 9,918.6 Financial guarantees1 15,168.9 15,168.9 – – – – 21,489.5 21,489.5 Related-party payables 17,642.1 17,642.1 – –

Borrowings2

– – – – – Capital 4,220.0 2,220.0 2,000.0 – – – – – – Interest 590.0 176.1 413.9 –

1,590.6 – – 1,590.6Environmental rehabilitation costs3 1,839.7 – – 1,839.7


1,607.0 – 32,393.3 34,000.3 total 40,712.2 36,441.3 2,413.9 1,857.01 Financial guarantees are included at the gross carry amount of Gold Fields Group drawn borrowings at 31 December 2011 and 2012.2 Borrowings – JIBAR at 31 December 2012 adjusted by specific facility agreement between 5.214% and 5.319%.3 R1,331.1 million (2011: R1,236.6 million) of the environmental rehabilitation costs is funded through the environmental trust funds.


35. RiSk mAnAGement ActivitieS (continued)

market risk

The Group is exposed to market risks, including foreign currency, commodity price, equity securities price and interest rate risk associated with underlying assets, liabilities and anticipated transactions. Following periodic evaluation of these exposures, the Group may enter into derivative financial instruments to manage some of these exposures.

Sensitivity analysis

The sensitivity analysis shows the effects of hypothetical changes of relevant risk variables on profit and loss or shareholders’ equity. The Group is exposed to commodity price, currency and interest rate risks. The effects are determined by relating the hypothetical change in the risk variable to the balance of financial instruments at period end date.

The amounts generated from the sensitivity analyses below are forward-looking estimates of market risks assuming certain adverse or favourable market conditions occur. Actual results in the future may differ materially from those projected results and therefore should not be considered a projection of likely future events and gains/losses.

Foreign currency sensitivity

General and policy

In the ordinary course of business, the Group enters into transactions, such as gold sales, denominated in foreign currencies, primarily US Dollar. Although this exposes the Group to transaction and translation exposure from fluctuations in foreign currency exchange rates, the Group does not generally hedge this exposure, although it may do so in specific circumstances, such as financing projects or acquisitions. Also, the Group on occasion undertakes currency hedging to take advantage of favourable short-term fluctuations in exchange rates when management believes exchange rates are at unsustainably high levels.

Currency risk only exists on account of financial instruments being denominated in a currency that is not the functional currency and being of a monetary nature.

Foreign currency hedging experienceAs at 31 December 2012 and 31 December 2011 there were no material foreign currency contract positions.

commodity price sensitivity

Gold

The market price of gold has a significant effect on the results of operations of the Group and the ability of the Group to pay dividends and undertake capital expenditures. The gold price has historically fluctuated widely and is affected by numerous industry factors over which the Group does not have any control. The aggregate effect of these factors on the gold price, all of which are beyond the control of the Group, is impossible for the Group to predict.

commodity price hedging policy

Gold

As a general rule, the Group does not enter into forward sales, derivatives or other hedging arrangements to establish a price in advance for future gold production.

To the extent that it enters into commodity hedging arrangements, the Group seeks to use different counterparty banks consisting of local and international banks to spread risk. None of the counterparties is affiliated with, or related to parties of, the Group.

commodity price hedging experience

As at 31 December 2012 and 31 December 2011 there were no commodity price contracts.




35. RiSk mAnAGement ActivitieS (continued)interest rate sensitivity

General

As the Group has no significant interest-bearing assets, the group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest rate risk arises from long-term borrowings.

As of 31 December 2012, Sibanye Gold’s total borrowings amounted to R4,220.0 million (2011: Rnil). Sibanye Gold generally does not undertake any specific action to cover its exposure to interest rate risk, although it may do so in specific circumstances. Refer to note 22 for all the borrowings and the relevant interest rates per facility.

interest rate sensitivity analysis

The portion of Sibanye Gold’s interest-bearing debt at period end that is exposed to interest rate fluctuations is R4,220.0 million (2011: Rnil). This debt is normally rolled for periods between one and three months and is therefore exposed to the rate changes in this period.

R4,220 million (2011: Rnil), the total debt at the end of the period is exposed to changes in the JIBAR rate. The relevant interest rates for each facility are described in note 22.

The table below summarises the effect of a change in finance expense on the Group and Company’s profit and loss had JIBAR differed as indicated. The analysis is based on the assumption that the applicable interest rate increased/decreased with all other variables held constant. All financial instruments with fixed interest rates that are carried at amortised cost are not subject to the interest rate sensitivity analysis.

ChANGE IN INTEREST ExPENSE FOR A NOMINAL ChANGE IN INTEREST RATES

South AFRicAn RAnd

Sensitivity to interest rates (1.5%) (1.0%) (0.5%) 0.5% 1.0% 1.5%31 december 2012Sensitivity to JIBAR interest rates (20.9) (13.9) (7.0) 7.0 13.9 20.9

change in finance expense (20.9) (13.9) (7.0) 7.0 13.9 20.9

31 december 2011Sensitivity to JIBAR interest rates – – – – – –

change in finance expense – – – – – –

ChANGE IN INTEREST ExPENSE FOR A NOMINAL ChANGE IN INTEREST RATES

united StAteS dollAR

Sensitivity to interest rates (1.5%) (1.0%) (0.5%) 0.5% 1.0% 1.5%31 december 2012Sensitivity to JIBAR interest rates (2.6) (1.7) (0.9) 0.9 1.7 2.6

change in finance expense (2.6) (1.7) (0.9) 0.9 1.7 2.6

31 december 2011Sensitivity to JIBAR interest rates – – – – – –

change in finance expense – – – – – –


36. RelAted-pARty tRAnSActionS

Sibanye Gold entered into related party transactions with Rand Refinery, Gold Fields, Gold Fields Group Services Proprietary Limited (“Gold Fields Group Services”), GFLMS and other Gold Fields’ subsidiaries.

The transactions with these related parties are generally conducted with terms comparable to transactions with third parties, however in certain circumstances such as related party loans, the transactions are not at arm’s length.

Refer to the Remuneration Report for key management remuneration.

Rand Refinery

Rand Refinery, in which Sibanye Gold holds a 33.1% interest, has an agreement with the Group whereby it refines all the Group’s gold production. NJ Holland, a director of Sibanye Gold up to 31 December 2012, was an alternate director of Rand Refinery and has held his directorship since 30 September 2008. Prior to this date, he had been a director of Rand Refinery since 10 July 2000. Sibanye Gold paid Rand Refinery R12.9 million and R12.3 million in refining fees for the year ended 31 December 2012 and 2011, respectively. No dividends were received during the years ended 31 December 2012 and 2011.

Gold Fields Group

As indicated in the accounting policies, Sibanye Gold was a wholly owned subsidiary of Gold Fields up to 18 February 2013. As indicated below, some transactions that were related-party transactions during the financial year might have stopped, been cancelled or settled or might continue as detailed below. Post the unbundling, as described in the accounting policies, Gold Fields and Sibanye Gold will continue to provide services to each other as described in a transitional services agreement. These services may include corporate functions and infrastructure support, purchasing, corporate communications, human resources and benefit management, treasury and finance, investor relations, corporate controller, internal audit, legal and tax advice, compliance regarding internal controls and information technology functions, on a transitional basis for a period of up to 12 months after unbundling.

The Group has a service level arrangement with Gold Fields Group Services which provides, amongst other services, payroll, procurement and payment services. Gold Fields Group Services, which accounts for the significant balance of related-party accounts receivable at 31 December 2011 (refer to note 18), is a wholly owned subsidiary of Gold Fields. The accounts receivable balances represent the value of services paid for by the Group that is recoverable from Gold Fields Group Services.

The Group’s related-party accounts receivable balance of R548.1 million at 31 December 2012 (2011: R225.7 million) consists of R134.9 million (2011: R132.2 million) owed by Gold Fields Group Services as discussed above; and R290.8 million (2011: R13.2 million) owed by South Deep Mine; R59.2 million (2011: R10.9 million) owed by Gold Fields Ghana Limited and R63.2 million (2011: R69.4 million) owed by a number of other subsidiaries of Gold Fields related to services provided by the Group.

The Company’s related-party accounts receivable balance of R1,013.8 million at 31 December 2012 (2011: R212.5 million) consists of R135.2 million (2011: R123.4 million) owed by Gold Fields Group Services as discussed above; R864.5 million (2011: R80.1 million) by Gold Fields Shared Services and R14.1 million (2011: R9.0 million) to a number of other subsidiaries and subsidiaries of Gold Fields.

The Company has received loans from various of its subsidiaries amounting to R519.9 million at 31 December 2012. These loans are unsecured, interest free and has no fixed terms of repayment.

Gold Fields Group Services charged a management fee (corporate expenditure) relating to the provision of corporate services such as financial reporting, treasury, tax and legal services, secretarial, technical services and human resources. Corporate expenditure costs are determined based on the time spent by the Gold Fields corporate staff on providing the above mentioned services to the Group. The management fee charged to Sibanye Gold for the year ended 31 December 2012 amounted to R66.7 million (2011: R49.4 million).

GFLMS has a related-party loan (refer to note 25) with the Group at 31 December 2012. This loan was unsecured, interest-free and had no fixed terms of repayment. As detailed in the subsequent events note (refer to note 33), this loan was repaid as part of the unbundling.

Refer to notes 22 and 33 for details of the debt guarantees between Sibanye Gold and the Gold Fields Group.




37. cApitAl mAnAGementThe primary objective of managing the Group’s capital is to ensure that there is sufficient capital available to support the funding requirements of the Group, including capital expenditure, in a way that: – optimises the cost of capital; – maximises shareholders’ returns; and – ensures that the group remains in a sound financial position.

There were no changes to the Group’s overall capital management approach during the current year.

The Group manages and makes adjustments to the capital structure as and when borrowings mature or as and when funding is required. This may take the form of raising equity, market or bank debt or hybrids thereof. Opportunities in the market are also monitored closely to ensure that the most efficient funding solutions are implemented.

The Group monitors capital using the ratio of net external debt to earnings (net operating profit) before interest, taxes, depreciation and amortisation (EBITDA), but does not set absolute limits for this ratio. The Group is comfortable with a ratio of net debt to EBITDA of one times or lower.


2011 2012 2012 2011

– 492.4 Borrowings excluding related party loans1 4,220.0 – 44.6 34.0 Cash and cash equivalents 291.8 362.8(44.6) 458.4 Net debt2/(cash) 3,928.2 (362.8)

935.2 693.5 EBITDA 5,679.9 6,751.8(0.05) 0.66 Net debt2 to EBITDA (Ratio) 0.69 (0.05)

1All related party loans were repaid during February 2013 (refer to note 33).2Net debt excludes related party loans.


38. SeGment RepoRtinG



2012 2011

kdc beatrix corporate1 Group kdc beatrix corporate1 Group

income StAtementRevenue 12,640.5 3,913.0 – 16,553.5 12,602.8 4,010.3 – 16,613.1Operating costs (8,236.9) (2,636.7) – (10,873.6) (7,452.4) (2,408.8) – (9,861.3)

operating profit 4,403.6 1,276.3 – 5,679.9 5,150.4 1,601.5 – 6,751.8Amortisation and depreciation (1,712.9) (631.8) (18.1) (2,362.8) (1,663.3) (514.4) (15.5) (2,193.2)

net operating profit/(loss) 2,690.7 644.5 (18.1) 3,317.1 3,487.1 1,087.1 (15.5) 4,558.6Investment income 75.0 19.3 11.2 105.5 68.5 17.9 11.9 98.3Finance expense (106.0) (15.6) (5.3) (126.9) (30.1) (6.6) (0.4) (37.1)Other costs2 (145.5) (30.1) 164.8 (10.8) (86.4) (22.0) 129.3 20.9Share-based payments (115.6) (42.3) (105.6) (263.5) (108.1) (35.6) (94.3) (238.0)Restructuring costs (115.9) (8.2) – (124.1) (249.4) (34.7) (1.4) (285.5)Royalties (211.5) (70.5) – (282.1) (256.5) (33.0) – (289.5)Current taxation (328.9) (121.5) (24.4) (474.8) (638.7) (2.2) (22.4) (663.3)Deferred taxation 584.7 238.2 16.9 839.8 (286.4) (313.4) (1.4) (601.2)

profit for the year 2,327.0 613.8 39.5 2,980.2 1,900.0 657.5 5.8 2,563.2

profit attributable to:– Owners of the parent 2,327.0 613.8 38.9 2,979.6 1,900.0 657.5 6.7 2,564.1– Non-controlling interest holders – – 0.6 0.6 – – (0.9) (0.9)

StAtement oF FinAnciAl poSitionTotal assets (excluding deferred taxation) 18,222.8 2,682.9 (1,231.3) 19,674.4 13,938.9 1,829.4 2,704.9 18,473.2Total liabilities (excluding deferred taxation) 6,348.6 (229.3) 19,065.6 25,184.9 3,367.6 (841.4) 22,920.6 25,446.8Net deferred taxation liabilities 3,249.8 945.3 (32.9) 4,162.2 3,834.5 1,183.5 (16.0) 5,002.0

capital expenditure 2,426.2 658.2 22.5 3,106.9 2,300.3 611.1 11.2 2,922.6

The above is a geographical analysis presented by location of assets.Figures may not add as they are rounded independently.The Group is primarily involved in gold mining and related activities. Activities are conducted and investments held inside South Africa. The segment results have been prepared and presented based on management’s reporting format. Gold mining operations are managed and internally reported based on the following geographical areas: the KDC and Beatrix mines. (Refer to accounting policies on segment reporting on page 59.)1 “Corporate” represents the items to reconcile segment data to consolidated financial statement totals. This does not represent a separate segment as it does

not generate revenue.2 Other costs “Corporate” includes the share of profit of associate after taxation of R93.1 million (2001: R35.0 million) and the balance of R71.7 million (2011:

R94.3 million) income consists mainly of corporate related cost recoveries.


notes to the annual financial statements (continued)


38. SeGment RepoRtinG (continued)


uNITED STATES DOLLAR uNITED STATES DOLLAR

2012 2011

kdc beatrix corporate1 Group kdc beatrix corporate1 Group

income StAtementRevenue 1,543.4 477.8 – 2,021.2 1,745.5 555.4 – 2,301.0Operating costs (1,005.7) (321.9) – (1,327.7) (1,032.2) (333.6) – (1,365.8)

operating profit 537.7 155.8 – 693.5 713.4 221.8 – 935.2Amortisation and depreciation (209.1) (77.1) (2.3) (288.5) (230.4) (71.2) (2.2) (303.8)

net operating profit/(loss) 328.5 78.7 (2.3) 405.0 483.0 150.6 (2.2) 631.4Other costs2 (17.8) (3.7) 20.2 (1.3) (12.0) (2.9) 17.8 2.9Share-based payments (14.1) (5.2) (12.9) (32.2) (15.0) (4.9) (13.1) (33.0)Restructuring costs (14.2) (1.0) – (15.2) (34.5) (4.8) (0.2) (39.5)Investment income 9.2 2.4 1.3 12.9 9.5 2.5 1.6 13.6Finance expense (12.9) (1.9) (0.7) (15.5) (4.3) (0.9) – (5.1)Royalties (25.8) (8.6) – (34.4) (35.5) (4.6) – (40.1)Current taxation (40.2) (14.8) (2.9) (57.9) (88.5) (0.3) (3.1) (91.9)Deferred taxation 71.4 29.1 2.0 102.5 (39.7) (43.4) (0.1) (83.2)

profit for the year 284.1 74.9 4.7 363.9 263.2 91.1 0.7 355.1

profit attributable to:– Owners of the parent 284.1 74.9 4.6 363.8 263.2 91.1 0.8 355.1– Non-controlling interest holders – – 0.1 0.1 – – (0.1) (0.1)

StAtement oF FinAnciAl poSitionTotal assets (excluding deferred taxation) 2,126.3 313.1 (143.5) 2,295.9 1,714.5 225.0 332.8 2,272.3Total liabilities (excluding deferred taxation) 740.8 (26.8) 2,224.9 2,938.9 414.2 (103.5) 2,819.4 3,130.1Net deferred taxation liabilities 379.2 110.3 (3.8) 485.7 471.6 145.6 (2.0) 615.2

capital expenditure 296.2 80.4 2.7 379.4 318.6 84.6 1.6 404.8

The above is a geographical analysis presented by location of assets.Year-end closing exchange rate: R8.57/1US$ (2011: R8.13/1US$).Average exchange rate for the year: R8.19/1US$ (2011: R7.22/1US$).Figures may not add as they are rounded independently.The Group is primarily involved in gold mining and related activities. Activities are conducted and investments held inside South Africa. The segment results have been prepared and presented based on management’s reporting format. Gold mining operations are managed and internally reported based on the following geographical areas: the KDC and Beatrix mines. (Refer to accounting policies on segment reporting on page 59.)1 “Corporate” represents the items to reconcile segment data to consolidated financial statement totals. This does not represent a separate segment as it does not

generate revenue.2 Other costs “Corporate” includes the share of profit of associate after taxation of US$11.4 million (2011: US$4.8 million) and the balance of US$8.8 million

(2011: US$13.0 million) income consists mainly of corporate-related cost recoveries.

S


notes to the annual financial statements (continued)



operating and financial information by mine

All data based on ore reserve development capitalised as from F2004.

kdc

TONS YIELD* GOLD PRODuCED CASh COST NET EARNINGSMILLED G/TON KILOGRAMS 000’ OuNCES uS$/Oz SA RAND MIL. uS$ MIL.

year to 30 June1939 – 2005 458,323,900 11.6 5,331,856 171,423 n/a n/a n/a2006 10,533,000 6.1 64,184 2,064 341 854.9 133.62007 10,481,000 5.8 60,323 1,939 357 1,794.6 249.32008 9,934,000 5.5 54,398 1,749 420 2,181.2 299.92009 9,536,000 4.8 45,812 1,473 474 2,194.1 243.52010 10,383,000 3.8 39,700 1,276 723 1,022.8 135.0Six months to december 2010 5,152,000 3.8 19,719 634 832 76.1 10.7year to 31 december2011 10,831,000 3.2 34,218 1,100 946 1,900.0 263.12012 8,817,000 3.3 29,078 935 1,076 2,327.0 284.1

total 533,990,900 10.6 5,679,288 182,593

Includes Venterspost from 1939, Libanon from 1949, West Driefontein from 1952, Kloof from 1968, East Driefontein from 1972 and Leeudoorn from 1991.

*Combined surface and underground yield.

beAtRix mine (includes oRyx – also known as 4 shaft or west section – as from F2000)

TONS YIELD* GOLD PRODuCED CASh COST NET EARNINGSMILLED G/TON KILOGRAMS 000’ OuNCES uS$/Oz SA RAND MIL. uS$ MIL.

year to 30 June1985 – 2005 57,164,000 5.4 311,517 10,016 n/a n/a n/a2006 3,551,000 5.2 18,541 596 354 185.3 29.02007 3,590,000 4.7 16,903 543 377 370.8 51.52008 3,215,000 4.2 13,625 438 515 332.4 45.72009 2,991,000 4.1 12,164 391 552 321.8 35.72010 3,051,000 4.0 12,188 392 740 206.9 27.3Six months to december 2010 1,965,000 3.2 6,282 202 837 (55.9) (7.8)year to 31 december2011 3,817,000 2.8 10,787 347 957 657.5 91.12012 3,368,000 2.7 8,981 289 1,118 613.8 74.9

total 82,712,000 5.0 410,988 13,214

Beatrix and Oryx became one tax entity as from F2000.

*Combined surface and underground yield.

oRyx mine – (changed name to 4 shaft, known as west section from F2005)

TONS YIELD GOLD PRODuCED CASh COST NET EARNINGSMILLED G/TON KILOGRAMS 000’ OuNCES uS$/Oz SA RAND MIL. uS$ MIL.

year to 30 June

1985 – 1999 5,656,000 3.2 18,182 585 n/a (768.0) (123.5)

Included in Beatrix since F2000.


Shareholders’ information

At 31 December 2012 all 1,000 issued shares of Sibanye Gold were owned by Gold Fields. At the same date the shareholders of Gold Fields were as follows:

Shareholder spread number of shareholders % number of shares %

1 – 1,000 shares 15,018 83.70 2,503,645 0.341,001 – 10,000 shares 1,951 10.87 5,891,700 0.8110,001 – 100,000 shares 606 3.38 21,692,593 2.97100,001 – 1,000,000 shares 293 1.63 86,193,439 11.781,000,001 shares and over 76 0.42 615,307,237 84.11

total 17,944 100 731,588,614 100

distribution of shareholders number of shareholders % number of shares %

American Depositary Receipts 3 0.02 272,747,349 37.28Banks 258 1.44 222,298,412 30.39Brokers 115 0.64 24,768,985 3.39Close Corporations 169 0.94 203,609 0.03Control Account 1 0.01 1,153,676 0.16Endowment Funds 77 0.43 1,727,979 0.24Individuals 14,376 80.12 6,991,611 0.96Insurance Companies 53 0.30 10,441,434 1.43Investment Companies 17 0.09 8,149,432 1.11Medical Aid Schemes 20 0.11 1,119,156 0.15Mutual Funds 384 2.14 78,480,171 10.73Nominees and Trusts 1,676 9.34 2,708,360 0.37Other Corporations 164 0.91 344,735 0.05Own Holdings 4 0.02 1,750,635 0.24Pension Funds 317 1.77 82,851,040 11.32Private Companies 263 1.47 882,235 0.12Public Companies 46 0.26 1,444,401 0.20Share Trust 1 0.01 13,525,394 1.85

total 17,944 100 731,588,614 100

public/non-public shareholders number of shareholdings % number of shares %

non-public shareholders 13 0.08 15,378,201 2.10 Directors 9 0.05 102,172 0.01 Share trust 1 0.01 13,525,394 1.85 Own holdings 3 0.02 1,750,635 0.24 public shareholders 17,931 99.90 716,210,413 97.90

total 17,944 100 731,588,614 100

beneficial shareholders holding of 3% or more number of shares %

First Eagle Investment Management LLC 50,614,564 6.92 Government Employees Pension Fund 35,237,251 4.82 Van Eck Associates Corporation 34,754,227 4.75

Foreign custodian shareholders holding of 3% or more number of shares %

Bank of New York Depositary Receipts 272,747,349 37.28 State Street Bank and Trust Company 62,218,481 8.50 Chase Nominees Limited 39,661,471 5.42 The Bank of New York (Nominees) Limited 30,426,773 4.16 Nortrust Nominees Limited 23,758,868 3.25


Administration and corporate information

investor enquiriesJames wellsted Head of Corporate Affairs Sibanye Gold Limited

Tel: +27 83 453 4014 +27 11 278 9656E-mail: [email protected]

corporate Secretary cain Farrel Tel: +27 10 001 1122 Fax: +27 11 278 9863 E-mail: [email protected]

Registered office Libanon Business Park1 Hospital Street(Off Cedar Ave) Libanon Westonaria 1780 South Africa Private Bag X5Westonaria 1780South Africa

Tel: +27 11 278 9600 Fax: +27 11 278 9863

Sibanye Gold limited Incorporated in the Republic of South Africa Registration number 2002/031431/06 Share code: SGL Issuer code: SGL ISIN – ZAE E000173951

listings JSE: SGLNYSE: SBGL

websitewww.sibanyegold.co.za

directorsM Sello Moloko* (Chairman) Neal J Froneman (CEO)Charl Keyter (CFO) Timothy J Cumming*Barry E Davison* Rick P Menell* Nkosemntu G Nika* Keith A Rayner*Susan C van der Merwe*Jerry S Vilakazi* Cain Farrel (Company Secretary)

*Independent non-executive

office of the united kingdom Secretaries london St James’s Corporate Services Limited 6 St James’s Place LondonSW1A 1NP United Kingdom

Tel: +44 20 7499 3916 Fax: +44 20 7491 1989

American depository Receipts transfer Agent Bank of New York Mellon BNY Mellon Shareowner Services PO Box 358516 PittsburghPA15252-8516

US toll-free telephone: +1 888 269 2377 Tel: +1 201 680 6825 E-mail: [email protected]

transfer Secretaries South Africa Computershare Investor Services Proprietary Limited Ground Floor 70 Marshall Street Johannesburg2001

PO Box 61051 Marshalltown 2107 Tel: +27 11 370 5000 Fax: +27 11 688 5248

transfer Secretariesunited kingdom Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4TU England

Tel: 0871 664 0300 [calls cost 10p a minute plus network extras, lines are open 8:30 – 17:00 Mon – Fri] or [from overseas] +44 20 8639 3399

Fax: +44 20 8658 3430E-mail: [email protected]


notice of the Annual General meeting

Notice is hereby given to shareholders that the annual general meeting (“AGM”) of Sibanye Gold Limited (“the Company”) for the year ended 31 December 2012 will be held at Libanon Business Park, 1 Hospital Street (Off Cedar Avenue), Libanon, Westonaria, 1780, South Africa, on 13 May 2013 at 09:00 to (i) deal with such business as may lawfully be dealt with at the meeting; and (ii) consider and, if deemed fit, pass, with or without modification, the ordinary and special resolutions set out hereunder in the manner required by the Companies Act No. 71 of 2008 (as amended) (“the Act”), as read with the listings requirements of the JSE Limited (“JSE Listings Requirements”) and other stock exchanges on which the Company’s ordinary shares are listed.

Kindly note that in terms of section 63(1) of the Act, meeting participants (including proxies) will be required to provide reasonably satisfactory identification before being entitled to participate in or vote at the AGM. Forms of identification that will be accepted include original and valid identity documents, driver’s licences and passports.

RecoRd dAteS, pRoxieS And votinG

In terms of section 59(1)(a) and (b) of the Act, the Board of the Company has set the record dates for the purposes of determining which shareholders are entitled to:receive notice of the AGM (being the date on which a shareholder must be registered in the Company’s securities register in order to receive notice of the AGM) as 5 April 2013; andparticipate in and vote at the AGM (being the date on which a shareholder must be registered in the Company’s securities register in order to participate in and vote at the AGM) as 3 may 2013.

Shareholders who have not dematerialised their shares or who have dematerialised their shares with “own-name” registration, and who are entitled to attend, participate in and vote at the AGM, are entitled to appoint a proxy to attend, speak and vote in their stead. A proxy need not be a shareholder and shall be entitled to vote on a show of hands or poll. It is requested that proxy forms be forwarded so as to reach the transfer secretaries in South Africa or the United Kingdom by no later than 48 (forty-eight) hours before the commencement of the AGM. If shareholders who have not dematerialised their shares or who have dematerialised their shares with “own-name” registration, and who are entitled to attend, participate in and vote at the AGM do not deliver the proxy forms to the transfer secretaries in South Africa or the United Kingdom by the relevant time, such shareholders will nevertheless be entitled to lodge the form of proxy in respect of the AGM immediately prior to the AGM, in accordance with the instructions therein, with the Chair of the AGM.

Shareholders who have dematerialised their shares, other than those shareholders who have dematerialised their shares with “own-name” registration, should contact their CSDP or broker in the manner and within the time stipulated in the agreement entered into between them and their CSDP or broker:●● to furnish them with their voting instructions; or●● in the event that they wish to attend the AGM, to obtain the necessary letter of representation to do so.

On a show of hands, every shareholder present in person or represented by proxy and entitled to vote shall have only one vote irrespective of the number of shares such shareholder holds. On a poll, every shareholder present in person or represented by proxy and entitled to vote, shall be entitled to that proportion of the total votes in the Company which the aggregate amount of the nominal value of the shares held by such shareholder bears to the aggregate amount of the nominal value of all shares issued by the Company.

electRonic pARticipAtion

The Company intends to offer shareholders reasonable access to attend the AGM through electronic conference call facilities, in accordance with the provisions of the Act. Shareholders wishing to participate electronically in the AGM are required to deliver written notice to the Company at Libanon Business Park, 1 Hospital Street (Off Cedar Avenue), Libanon, Westonaria, 1780, South Africa, (marked for the attention of Cain Farrel, the Company Secretary) by no later than 09:00 on 6 May 2013 that they wish to participate via electronic communication at the AGM (“the electronic notice”). In order for the electronic notice to be valid it must state: (a) if the shareholder is an individual, a certified copy of his identity document and/or passport; (b) if the shareholder is not an individual, a certified copy of a resolution by the relevant entity and a certified copy of the identity documents and/or passports of the persons who passed the relevant resolution, which resolution must set out who from the relevant entity is authorised to represent the relevant entity at the AGM via electronic communication; and (c) a valid email address and/or facsimile number (“the contact address/number”). Voting on shares will not be possible via electronic communication and accordingly shareholders participating electronically and wishing to vote their shares at the AGM will need to be represented at the AGM, either in person, by proxy or by letter of representation. The Company shall use its reasonable endeavours on or before 09:00 on 9 May 2013, to notify the shareholder, who has delivered a valid electronic notice, at its contact address/number, of the relevant details through which the shareholder can participate via electronic communication.

When reading the resolutions below, please refer to the explanatory notes for the resolutions on pages 116 to 118.


pReSentAtion oF AnnuAl FinAnciAl StAtementS And RepoRtS

The consolidated audited annual financial statements of the Company and its subsidiaries, including the external auditors’, Audit Committee’s and directors’ reports for the year ended 31 December 2012, have been distributed as required and will be presented to the shareholders at the AGM.

A complete set of the consolidated audited annual financial statements, together with the abovementioned reports, are set out on pages 39 to 106 of the Annual Financial Report.

SociAl And ethicS committee

In accordance with Regulation 43(5)(c) of the Act, the Chair of the Social and Ethics Committee will report to shareholders at the AGM.

oRdinARy ReSolution numbeR 1

Re-appointment of auditors

“Resolved that KPMG Inc, upon the recommendation of the current Audit Committee of the Company, be re-appointed as the auditors of the Company until the conclusion of the next AGM.”


election of a director

“Resolved that Mr TJ Cumming, who was appointed to the Board on 21 February 2013 and who retires in terms of the Company’s Memorandum of Incorporation, and who is eligible and available for election, is elected as a director of the Company.”

A brief CV is set out on page 14 of the Annual Report.



“Resolved that Mr BE Davison, who was appointed to the Board on 21 February 2013 and who retires in terms of the Company’s Memorandum of Incorporation, and who is eligible and available for election, is elected as a director of the Company.”




“Resolved that Mr NG Nika, who was appointed to the Board on 21 February 2013 and who retires in terms of the Company’s Memorandum of Incorporation, and who is eligible and available for election, is elected as a director of the Company.”




“Resolved that Ms SC van der Merwe, who was appointed to the Board on 21 February 2013 and who retires in terms of the Company’s Memorandum of Incorporation, and who is eligible and available for election, is elected as a director of the Company.”



Re-election of a member and chair of the Audit committee

“Resolved that Mr KA Rayner is re-elected as a member and the Chair of the Audit Committee with effect from the end of this AGM, in terms of section 94(2) of the Act.



notice of the Annual General meeting (continued)


Re-election of a member of the Audit committee

“Resolved that Mr RP Menell is re-elected as a member of the Audit Committee with effect from the end of this AGM, in terms of section 94(2) of the Act.”



election of a member of the Audit committee

“Resolved that Mr NG Nika is elected as a member of the Audit Committee with effect from the end of this AGM, in terms of section 94(2) of the Act, subject to his election as a director pursuant to ordinary resolution number 4.”



election of a member of the Audit committee

“Resolved that Ms SC van der Merwe is elected as a member of the Audit Committee with effect from the end of this AGM, in terms of section 94(2) of the Act, subject to her election as a director pursuant to ordinary resolution number 5.”



Approval for the issue of authorised but unissued ordinary shares

“Resolved that, as required by the Company’s Memorandum of Incorporation and subject to the provisions of section 41 of the Act and the requirements of any recognised stock exchange on which the shares in the capital of the Company may from time to time be listed, the directors are authorised, as they in their discretion think fit, to allot and issue, or grant options over, shares representing not more than 5% (five per cent) of the number of ordinary shares in the issued share capital of the Company as at 11 February 2013 (the date that the Company was listed on the JSE Limited and New York Stock Exchanges) (for which purposes any shares approved to be allotted and issued by the Company in terms of any share plan or incentive scheme for the benefit of employees shall be excluded), such authority to ensure until the next AGM of the Company (whereupon this authority shall lapse, unless it is renewed at the aforementioned AGM).”


Approval for the following amendment to the Sibanye Gold limited 2013 Share plan

“Resolved that the existing Rule 5.1.1 of the Sibanye Gold Limited 2013 Share Plan be deleted and replaced with the following new Rule 5.1.1: 5.1.1 The aggregate number of Shares at any one time which may be Allocated under the Plan, shall not exceed

70,619,126 Shares (which represents approximately 10% of the number of issued Shares as at the date of approval of the Plan by shareholders). To the extent that there is a discrepancy between the number of Shares and the percentage of issued Shares it represents, the number of Shares will take precedence.”

In terms of the JSE Listings Requirements, a 75% (seventy-five per cent) majority in favour of the above ordinary resolution by all equity securities holders present or represented by proxy at the AGM, is required to approve this resolution excluding all the votes attaching to all equities securities owned or controlled by persons who are existing participants in the Sibanye Gold Limited 2013 Share Plan.


Approval for the following amendment to the Sibanye Gold limited 2013 Share plan

“Resolved that the existing Rule 5.2.1 of the Sibanye Gold Limited 2013 Share Plan be deleted and replaced with the following new Rule 5.2.1: 5.2.1 Subject to the provisions of Rule 11, the maximum number of Shares Allocated in respect of all unvested Awards

granted to any Participant in respect of this Plan, shall not exceed 7,061,912 Shares (which represents approximately 1,0% of the number of issued Shares as at the date of approval of the Plan by shareholders). To the extent that there is a discrepancy between the number of Shares and the percentage of issued Shares it represents, the number of Shares will take precedence.”


In terms of the JSE Listings Requirements, a 75% (seventy-five per cent) majority in favour of the above ordinary resolution by all equity securities holders present or represented by proxy at the AGM, is required to approve this resolution excluding all the votes attaching to all equities securities owned or controlled by persons who are existing participants in the Sibanye Gold Limited 2013 Share Plan.

AdviSoRy endoRSement

Advisory endorsement of the remuneration policy

“To endorse, through a non-binding advisory vote, the Company’s remuneration policy (excluding the remuneration of the non-executive directors for their services as directors and members of the Board or statutory committees), as set out in the remuneration report contained on pages 39 to 45 of the Annual Financial Report.”

In terms of the King Report of Governance Principles for South Africa 2009, an advisory vote should be obtained from shareholders on the Company’s annual remuneration policy. The vote allows shareholders to express their views on the remuneration policies adopted and the implementation thereof, but will not be binding on the Company.

SpeciAl ReSolution numbeR 1

Approval for the remuneration of non-executive directors

“Resolved that, in terms of section 66(9) of the Act, the following remuneration shall be payable to non-executive directors of the Company with effect from 1 June 2013 for their services as directors:

per annum

The Chair of the Board R1,500,000

The Chair of the Audit Committee R287,000

The Chairs of the Nominating and Governance Committee, Remuneration Committee, Social and Ethics Committee and Safety, Health and Sustainable Development Committee (excluding the Chairman of the Board) R177,000

Members of the Board (excluding the Chairman of the Board) R793,000

Members of the Audit Committee (excluding the Chairman of the Board) R149,000

Members of the Nominating and Governance Committee, Remuneration Committee, Social and Ethics Committee and Safety, Health and Sustainable Development Committee (excluding the Chairman of the Board) R112,000

A decision was taken by the executive directors to freeze the salaries of executive directors and senior management of the Company for 2013. Likewise, the non-executive directors have similarly elected to forego any increases for the following year. The next anticipated increase will, subject to approval by shareholders, be on 1 June 2014 and on each anniversary of this date thereafter.


Approval for the company to grant financial assistance in terms of section 44 and 45 of the Act

“Resolved that, to the extent required by sections 44 and/or 45 of the Act, the Board may, subject to compliance with the requirements of the Act, the Company’s Memorandum of Incorporation and the requirements of any recognised stock exchange on which the shares in the capital of the Company may from time to time be listed, authorise the Company to provide direct or indirect financial assistance to any of its present or future subsidiaries and/or any other Company or entity that is or becomes related or inter-related to the Company, at any time during a period commencing on the date of passing of this resolution and ending at the next AGM.”




Approval of amendments to the existing memorandum of incorporation

“Resolved that, the existing clause 24 of the Memorandum of Incorporation is deleted and replaced with the following new clause 24:

“24. RetiRement oF diRectoRS in RotAtion 24.1 At the Annual General Meeting held in each year 1/3 (one-third) of the Directors, or if their number is not a multiple of 3

(three), then the number nearest to, but not less than 1/3 (one-third) shall retire from office. The Directors so to retire at each Annual General Meeting shall be firstly those retiring in terms of clause 20.8, and then, those who have been longest in office since their last election. As between Directors of equal seniority, the Directors to retire shall, in the absence of agreement, be selected by the chairperson; provided that notwithstanding anything herein contained, if, at the date of any Annual General Meeting any Director will have held office for a period of 3 (three) years since his/her last election or appointment, he/she shall retire at such meeting, either as one of the Directors to retire in pursuance of the foregoing or additionally thereto. The length of time a Director has been in office shall be computed from the date of his/her last election or appointment.

24.2 A retiring Director shall act as a Director throughout the Meeting at which he/she retires.

24.3 Retiring Directors shall be eligible for re-election. No person other than a Director retiring at the Meeting shall, unless recommended by the Directors for election, be eligible for election to the office of a Director at any Annual General Meeting unless, not less than 14 (fourteen) Business Days nor more than 21 (twenty one) Business Days before the issue date for the notice of the meeting, there shall have been given to the Company Secretary notice in Writing by a Holder or Holders duly qualified to be Present at a Meeting for which such notice is given of the intention of such Holder or Holders to propose such Director for election and also notice in Writing signed by the Person to be proposed of his/her willingness to be elected.

24.4 If at any Annual General Meeting, the place of any retiring Director is not filled, he/she shall if willing continue in office until the dissolution of the Annual General Meeting in the next year, and so on from year to year until his/her place is filled, unless it shall be determined at such Meeting not to fill such vacancy.”


Acquisition of the company’s own shares

“Resolved that, pursuant to the Company’s Memorandum of Incorporation, the Company or any subsidiary of the Company is hereby authorised by way of a general approval, from time to time, to acquire ordinary shares in the capital of the Company in accordance with the Act and the JSE Listings Requirements, provided that:(i) the number of its own ordinary shares acquired by the Company in any one financial year shall not exceed 20% (twenty per cent)

of the ordinary shares in issue at the date on which this resolution is passed;(ii) this authority shall lapse on the earlier of the date of the next AGM of the Company or the date 15 (fifteen) months after the date

on which this resolution is passed;(iii) the Board has resolved to authorise the acquisition and that the Company and its subsidiaries (“the Group”) will satisfy the

solvency and liquidity test immediately after the acquisition and that since the test was done there have been no material changes to the financial position of the Group;

(iv) the acquisition must be effected through the order book operated by the JSE Limited trading system and done without any prior understanding or arrangement between the Company and the counterparty;

(v) the Company only appoints one agent to effect any acquisition(s) on its behalf;(vi) the price paid per ordinary share may not be greater than 10% (ten per cent) above the weighted average of the market value of

the ordinary shares for the 5 (five) business days immediately preceding the date on which an acquisition is made;(vii) the number of shares acquired by subsidiaries of the Company shall not exceed 10% (ten per cent) in the aggregate of the

number of issued shares in the Company at the relevant times;(viii) the acquisition of shares by the Company or its subsidiaries may not be effected during a prohibited period, as defined in the JSE

Listings Requirements;(ix) an announcement containing full details of such acquisitions of shares will be published as soon as the Company and/or its

subsidiaries have acquired shares constituting, on a cumulative basis 3% (three per cent) of the number of shares in issue at the date of the AGM at which this special resolution is considered and if approved, passed, and for each 3% (three percent) in aggregate of the initial number acquired thereafter; and

(x) the Group will, prior to an acquisition, obtain a working capital letter from its sponsor.”


The JSE Listings Requirements require, in terms of paragraph 11.26, the following disclosures, which appear in the Annual Report:●● Directors and management – refer to pages 14 to 17 of the Annual Report●● Major shareholders – refer to page 108 of the annual financial statements●● Material change – there were no material changes in the Annual Financial Report●● Directors’ interest in securities – refer to pages 43 to 44 of the Remuneration Report●● Share capital of the Company – refer to page 37 of the annual financial statements●● Responsibility statement – refer to page 19 of the Annual Financial Report

litigation statement

On 21 August 2012, a court application was served on a group of respondents that included Sibanye Gold (the “August Respondents”). On 21 December 2012, a further court application was issued and was formally served on a number of respondents, including Sibanye Gold, (the “December Respondents” and, together with the August Respondents, the “Respondents”) on 10 January 2013, on behalf of classes of mine workers, former mine workers and their dependants who were previously employed by, or who are currently employed by, among others, Sibanye Gold and who allegedly contracted silicosis and/or other occupational lung diseases (the “Classes”). The court application of 21 August 2012 and the court application of 21 December 2012 are together referred to below as the “Applications”.


With respect to the Applications, Sibanye Gold has filed a notice of its intention to oppose the application and has instructed its attorneys to defend the claims. Sibanye Gold and its attorneys are engaging with the applicants’ attorneys in both Applications to try to establish a court-sanctioned process to agree the timelines, (including the date by which Sibanye Gold must file its papers opposing the Applications) and the possible consolidation of the separate applications. At this stage, Sibanye Gold cannot quantify their potential liability from these actions.

Other than the above, Sibanye Gold is not a party to any material legal or arbitration proceedings, nor is any of its property the subject of pending material legal proceedings.

The directors jointly and severally accept full responsibility for the accuracy of the information pertaining to the special resolutions and certify that to the best of their knowledge and belief, there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the resolutions contain all information required by the Act and the JSE Listings Requirements.

Other than the facts and developments reported on in the Annual Report, there have been no material changes in the affairs or financial position of the Company and its subsidiaries between the date of signature of the audit report and the date of this notice.

By order of the directors

c farrel

Corporate SecretaryJohannesburg

5 April 2013



eXPLanaTOrY nOTes


Re-appointment of auditors

In terms of section 90(1) of the Act, each year at its AGM, the Company must appoint an auditor who complies with the requirements of section 90(2) of the Act. Following a detailed review, which included an assessment of its independence, the current Audit Committee of the Company has recommended that KPMG Inc. be re-appointed as the auditors of the Company.

oRdinARy ReSolution numbeRS 2 to 5

election and re-election of directors

In terms of the Company’s Memorandum of Incorporation, 1/3 (one third) of the non-executive directors shall retire from office each AGM. The non-executive directors so to retire at each AGM shall firstly be vacancies filled or additional directors appointed since the last AGM and then those who have been longest in office since their last election. For avoidance of doubt, in determining the number of non-executive directors to retire, no account shall be taken of any executive directors. Retiring non-executive directors shall be eligible for re-election.

The Board, through the Nominating and Governance Committee, has evaluated the past performance and contribution of the retiring non-executive directors and recommends that they be re-elected.

oRdinARy ReSolution numbeRS 6 to 9

Re-election of members of the Audit committee

The members of the Audit Committee have been nominated by the Board for election as members of the Company’s Audit Committee in terms of section 94(2) of the Act. The Board has reviewed the proposed composition of the Audit Committee against the requirements of the Act and the Regulations under the Act and has confirmed that if all the individuals referred to above are re-elected, the committee will comply with the relevant requirements and have the necessary knowledge, skills and experience to enable it to perform its duties in terms of the Act.


Approval for the issue of authorised but unissued ordinary shares

In terms of the Company’s Memorandum of Incorporation, read with the JSE Listings Requirements, the shareholders of the Company may authorise the directors to, inter alia, issue any unissued ordinary shares and/or grant options over them, as the directors in their discretion think fit.

The existing authority granted by the shareholders at the previous AGM is proposed to be renewed at this AGM. The authority will be subject to the provisions of the Act and the JSE Listings Requirements. The aggregate number of ordinary shares capable of being allotted and issued in terms of this resolution, other than in terms of the Company’s share or other employee incentive schemes, shall be limited to 5% (five per cent) of the number of ordinary shares in issue as at 11 February 2013 (the listing date).

The directors have decided to seek annual renewal of this authority in accordance with best practice. The directors have no current plans to make use of this authority, but wish to ensure, by having it in place, that the Company has some flexibility to take advantage of any business opportunities that may arise in the future.


Approval for the amendment to the Sibanye Gold limited Share plan

As part of the unbundling of Sibanye Gold from Gold Fields Limited (“Gold Fields”) on 18 February 2013, the Sibanye Share Plan was implemented to replace the Gold Fields Limited 2012 Share Plan that Sibanye Gold’s employees participated in prior to the listing and unbundling of Sibanye Gold. The directors of Sibanye Gold were thus authorised to issue and allot all or any of such shares required for the plans, but in aggregate all plans were not to exceed 35,309,563 of the total issued ordinary shares capital of Sibanye Gold.

In terms of the Gold Fields Limited Plans, all Gold Fields shares would vest pro rata (“no fault termination” rules will apply) to Sibanye Gold employees. The proportionate unvested options under the Gold Fields Limited Share Plans on date of unbundling were replaced with Sibanye Gold shares to the equivalent value.


The value of the unvested options were valued and adjusted at the average share price of Gold Fields 10 business days prior to the listing of Sibanye Gold (10-day VWAP). These options were then replaced with Sibanye Gold shares to the equivalent value based on the Sibanye Gold share price three days prior to 1 March 2013 (three-day VWAP).

This process was completed and the final conversion figure was received by Sibanye Gold from the administrators of the plan namely Investec and PWC on 14 March 2013. Based on the three-day VWAP of Sibanye Gold, the allocation was made at a price of R13.27. This resulted that the total forfeited Gold Fields Shares to the value of R379,550,326; when converted to Sibanye shares totalling 29,218,718 of the allotted 35,309,563 shares in the Sibanye Share Plan, leaving the Sibanye Share Plan with a balance of only 6,090,845 Shares available for the March Annual 2013 allocation.

Based on the annual incentive scheme allocation criteria for Bonus Shares and the allocation criteria for annual allocation, based on individual performance under the Sibanye Share Plan and approved by the Remuneration Committee, Sibanye Gold will require a further 19,989,414 shares, 5,570,480 Bonus Shares and 14,418,934 Performance Shares. Therefore there is a shortfall of 13,050,900 issued ordinary shares required for the Sibanye Share Plan.


Approval for the amendment to the Sibanye Gold limited Share plan

The explanatory note set out in Ordinary Resolution 11 is relevant to Ordinary Resolution 12 but is not repeated. once again.

The Sibanye Share Plan provides that the maximum number of shares allocated in respect of all unvested awards granted to any participant in respect of the Sibanye Share Plan, is not allowed to exceed 3,530,956 issued ordinary shares which is currently 0.5% of the number of issued ordinary shares in the Company at the date of the approval of the Sibanye Share Plan. For the same reason as set out in explanatory note to Ordinary Resolution 11, the Company wishes to increase the maximum number of shares an individual participant may hold in the Sibanye Share Plan to 7,061,912 ordinary issued shares (which represents approximately 1.0% of the number of issued ordinary shares as at the date of approval of the Sibanye Share Plan).


Approval for the remuneration of non-executive directors

Special resolution number 1 is proposed to enable the Company to comply with the provisions of sections 65(11)(h), 66(8) and 66(9) of the Act, which stipulate that remuneration to directors for their service as directors may be paid only in accordance with a special resolution approved by shareholders. A decision was taken by the executive directors to freeze the salaries of all senior executives (executive directors and senior management) for 2013. Likewise, the non-executive directors have similarly decided to forego any increases for the following year. The next anticipated increase will, subject to shareholders approval, be on 1 June 2014 and on each anniversary of this date thereafter.


Approval for the company to grant financial assistance in terms of sections 44 and 45 of the Act

Notwithstanding the title of section 45 of the Act, being “Loans or other financial assistance to directors”, on a proper interpretation thereof, the body of the section also applies to financial assistance provided by a company to any related or inter-related company or corporation, a member of a related or inter-related corporation, and to a person related to any such company, corporation or member.

Further, section 44 of the Act may also apply to the financial assistance so provided by a company to any related or inter-related company or corporation, a member of a related or inter-related corporation, or a personal related to any such company, corporation or member, in the event that the financial assistance is provided for the purpose of, or in connection with, the subscription of any option, or any securities, issued or to be issued by the Company or a related or inter-related company, or for the purchase of any securities of the Company or a related or inter-related company.

Both sections 44 and 45 of the Act provide, inter alia, that the particular financial assistance must be provided only pursuant to a special resolution of shareholders, adopted within the previous 2 (two) years, which approved such assistance either for the specific recipient, or generally for a category of potential recipients, and the specific recipient falls within that category and the Board is satisfied that: (i) immediately after providing the financial assistance, the Company would satisfy the solvency and liquidity test (as contemplated in the Act); and (ii) the terms under which the financial assistance is proposed to be given are fair and reasonable to the Company.



eXPLanaTOrY nOTes (continued)

As part of the normal conduct of the business of the Group, the Company, where necessary, usually provides guarantees and other support undertakings to third parties which enter into financial agreements with its local and foreign subsidiaries and joint ventures or partnerships in which the Company or members of the Group have an interest. This is particularly so where funding is raised by the foreign subsidiaries of the Company, whether by way of borrowings or the issue of bonds or otherwise, for the purposes of the conduct of their operations. In the circumstances and in order, inter alia, ensure that the Company and its subsidiaries and other related and inter-related companies and entities continue to have access to financing for purposes of refinancing existing facilities and funding their corporate and working capital requirements, it is necessary to obtain the approval of the shareholders as set out in this special resolution. The Company would like the ability to continue to provide financial assistance, if necessary, also in other circumstances, in accordance with section 45 of the Act.

Furthermore, it may be necessary for the Company to provide financial assistance to any of its present or future subsidiaries, and/or to any related or inter-related company or corporation, and/or to a member of a related or inter-related corporation, to subscribe for options or securities of the Company or another Company related or inter-related to it. Under the Act, the Company will require the special resolution referred to above to be adopted.

It is therefore imperative that the Company obtains the approval of shareholders in terms of special resolution number 2 so that it is able to effectively organise its internal financial administration.


Approval of amendments to the existing memorandum of incorporation

The existing clause 24 of the Company’s Memorandum of Incorporation contains the provisions and mechanism in relation to the rotation of non-executive directors. However, having regard to international best practice, good governance and recent circumstances, wherein institutional investors have required that executive directors must be included in the rotation process and run for re-election, the Board has decided to amend the Company’s Memorandum of Incorporation to include the retirement by rotation of all directors, not only non-executive directors, as per the proposed resolution.


Acquisition of the company’s own shares

Special resolution number 4 is sought to allow the Company and/or its subsidiaries (“the Group”) by way of a general authority to acquire its own issued shares (reducing the total number of ordinary shares of the Company in issue in the case of an acquisition by the Company of its own shares). At the present time, the directors have no specific intention with regard to the utilisation of this authority which will only be used if the circumstances are appropriate. Any decision by the directors to use the general authority to acquire shares of the Company will be taken with regard to the prevailing market conditions and other factors and provided that, after such acquisition, the directors are of the opinion that:(i) the Group will be able to pay its debts in the ordinary course of business for a period of 12 (twelve) months after the date of this

notice;(ii) the assets of the Group will exceed the liabilities of the Company and its subsidiaries for a period of 12 (twelve) months after the

date of this notice, recognised and measured in accordance with the accounting policies used in the latest audited annual Group financial statements;

(iii) the ordinary share capital and reserves of the Company and its subsidiaries will be adequate for the purposes of the business of the Company and its subsidiaries for the period of 12 (twelve) months after the date of this notice;

(iv) the working capital of the Company and its subsidiaries will be adequate for the purposes of the business of the Company and its subsidiaries for the period of 12 (twelve) months after the date of this notice.

The Company will ensure that its sponsor will provide the necessary letter on the adequacy of the working capital in terms of the JSE Listings Requirements, prior to the commencement of any acquisition of the Company’s shares on the open market.


Form of proxy

Sibanye Gold limited (Registration number 2002/031431/06) (“the Company”)Share code: SGL Issuer code: SGL ISIN: ZAE000173951

FoR uSe by ceRtiFicAted ShAReholdeRS And own-nAme demAteRiAliSed ShAReholdeRS At the AGm oF the compAny to be held At libAnon buSineSS pARk, 1 hoSpitAl StReet, (oFF cedAR Avenue), libAnon, weStonARiA, At 09:00 on 13 mAy 2013.Certificated shareholders or dematerialised shareholders with “own-name” registration, and who are entitled to attend and vote at the AGM, are entitled to appoint one or more proxies to attend, speak and vote in their stead. A proxy need not be a shareholder and shall be entitled to vote on a show of hands or poll.

Dematerialised shareholders, other than dematerialised shareholders with “own-name” registration must not return this form of proxy to the Transfer Secretaries or deliver it to the Chair of the AGM. Dematerialised shareholders, other than dematerialised shareholders with “own-name” registration, should instruct their CSDP or broker as to what action they wish to take. This must be done in the manner and time stipulated in the agreement entered into between them and their CSDP or broker.

I/we (name in block letters)

of (address in block letters)

being the holder/s of 1 ordinary shares in the issued share capital of the Company hereby appoint

of

or, failing him/her of

or, failing him/her, the Chair of the AGM

as my/our proxy, to attend, speak on my/our behalf at the AGM to be held at Libanon Business Park, 1 Hospital Street, (Off Cedar Avenue), Libanon, Westonaria, on 13 May 2013 at 09:00 South African time and at any adjournment thereof, and to vote or abstain from voting on my/our behalf on the resolutions to be proposed at such AGM, with or without modification, as follows:

For Against AbstainoRdinARy ReSolution numbeR 1Re-appointment of auditorsoRdinARy ReSolution numbeR 2Re-election of a director: tJ cummingoRdinARy ReSolution numbeR 3Re-election of a director: be davisonoRdinARy ReSolution numbeR 4Re-election of a director: nG nikaoRdinARy ReSolution numbeR 5Re-election of a director: Sc van der merweoRdinARy ReSolution numbeR 6Re-election of a member and chair of the Audit committee: kA RayneroRdinARy ReSolution numbeR 7Re-election of a member of the Audit committee: Rp menelloRdinARy ReSolution numbeR 8election of a member of the Audit committee: nG nikaoRdinARy ReSolution numbeR 9election of a member of the Audit committee: Sc van der merweoRdinARy ReSolution numbeR 10Approval for the issue of authorised but unissued ordinary sharesAdvisory endorsement of the remuneration policyoRdinARy ReSolution numbeR 11 Approval for the amendment of Rule 5.1.1 of the Sibanye Gold limited 2013 Share planoRdinARy ReSolution numbeR 12 Approval for the amendment of Rule 5.2.1 of the Sibanye Gold limited 2013 Share planSpeciAl ReSolution numbeR 1Approval of the remuneration of non-executive directorsSpeciAl ReSolution numbeR 2Approval for the company to grant financial assistance in terms of section 44 and 45 of the ActSpeciAl ReSolution numbeR 3Approval of amendments to the existing memorandum of incorporationSpeciAl ReSolution numbeR 4Acquisition of the company’s own shares

Every person entitled to vote who is present at the AGM shall be entitled to –a. one vote on a show of hands irrespective of the number of shares such person holds or represents, provided that a proxy shall, irrespective of the

number of shareholders she/he represents, have only one vote;

b. that proportion of the total votes in the Company which the aggregate amount of the nominal value of the shares held by the shareholder bears to the aggregate amount of the nominal value of all shares issued by the Company in respect of every matter that may be decided by polling.

A proxy may not delegate his/her authority to act on his/her behalf to another person (see note 11).

1 Insert number of securities in respect of which you are entitled to exercise voting rights.


notes to the form of proxy

This proxy form will lapse and cease to be of force and effect immediately after the AGM of the Company and any adjournment(s) thereof, unless it is revoked earlier (as to which see notes 15 and 16).

Signed at on 2013

(Name in block letters)

Signature

Assisted by me (where applicable)

this proxy form is not for use by holders of American depositary receipts issued by the bank of new york mellon. please read the notes and instructions.

Summary of holders’ rights in respect of proxy appointments as set out in sections 56 and 58 of the Act and notes to the form of proxy

1. Section 56 grants voting rights to holders of a beneficial interest in certain circumstances, namely if the beneficial interest includes the right to vote on the matter, and the person’s name is on the Company’s register of disclosures as the holder of a beneficial interest. A person who has a beneficial interest in any securities that are entitled to be voted on by him/her, may demand a proxy appointment from the registered holder of those securities, to the extent of that person’s beneficial interest, by delivering such a demand to the registered holder, in writing, or as required by the applicable requirements of a central securities depository.

2. A proxy appointment must be in writing, dated and signed by the person appointing the proxy.

3. Forms of proxy must be delivered to the Company before a proxy may exercise any voting rights at the AGM either by returning them to Computershare Investor Services Proprietary Limited at Ground Floor, 70 Marshall Street, Johannesburg, or to Capita Registrars, PXS, 34 Beckenham Road, Beckenham, BR3 4TU, to be received on or before 09:00 on 9 May 2013 or if not so received by 9 May 2013, by presenting it to a representative of Computershare Investor Services Proprietary Limited at the premises of the Company immediately before the commencement of the AGM; alternatively by presenting it to the Company Secretary at the premises of the Company at any time before the commencement of the AGM. Forms can be posted or hand delivered.

4. Each person entitled to exercise any voting rights at the AGM may appoint a proxy or proxies to attend, speak, vote or abstain from voting in place of that holder.

5. A person entitled to vote may insert the name of a proxy or the name of an alternative proxy of the holder’s choice in the space provided, with or without deleting the Chair of the AGM. Any such deletion must be initialled. The person whose name stands first on the form of proxy and who is present at the AGM shall be entitled to act as proxy to the exclusion of the person whose name follows as an alternative. In the event that no names are indicated, the proxy shall be exercised by the Chair of the AGM.

6. An “X” in the appropriate box indicates that all your voting rights are exercisable by that holder. If no instructions are provided in the form of proxy, in accordance with the above, then the proxy shall be entitled to vote or abstain from voting at the AGM, as the proxy deems fit in respect of all your voting rights exercisable thereat, but if the proxy is the Chair, failure to provide instructions to the proxy in accordance with the above will be deemed to authorise the proxy to vote only in favour of the resolution.

7. You or your proxy are not obliged to exercise all your voting rights exercisable, but the total of the voting rights cast may not exceed the total of the voting rights exercisable by you.

8. Your authorisation to the proxy, including the Chair of the AGM, to vote on your behalf, shall be deemed to include the authority to vote on procedural matters at the AGM.

9. The completion and lodging of this form of proxy will not preclude you from attending the AGM and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, in which case the appointment of any proxy will be suspended to the extent that you choose to act in person in the exercise of your voting rights at the AGM.

10. The Company’s memorandum of incorporation does not permit delegation by a proxy.

11. Documentary evidence establishing the authority of a person attending the AGM on your behalf in a representative capacity or signing this form of proxy in a representative capacity must be attached to this form.

12. The Company will accept an original and valid identity document, driver’s licence or passport as satisfactory identification.

13. Any insertions, deletions or alterations to this form must be initialled by the signatory(ies).

14. The appointment of a proxy is revocable unless you expressly state otherwise in the form of proxy.

15. You may revoke the proxy appointment by: (i) cancelling it in writing, or making a later, inconsistent appointment of a proxy; and (ii) delivering a copy of the revocation instrument to the proxy and to the Company at its premises or at Ground Floor, 70 Marshall Street, Johannesburg for the attention of Computershare Investor Services Proprietary Limited, or to Capita Registrars, PXS, 34 Beckenham Road, Beckenham, BR3 4TU, to be received before the replacement proxy exercises any of your rights at the AGM.

16. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy’s authority to act on your behalf at the later of (i) the date stated in the revocation instrument, if any; or (ii) the date on which the revocation instrument is delivered as required in paragraph 15.

17. If this form of proxy has been delivered to the Company in accordance with paragraph 3 then, as long as that appointment remains in effect, any notice that is required by the Act or the Company’s memorandum of incorporation to be delivered by the Company to the holder of the voting rights must be delivered by the Company to:

(a) the holder; or (b) the proxy, if the holder has: (i) directed the Company to do so, in writing; and (ii) has paid any reasonable fee charged by the Company for doing so.

18. In terms of section 56 of the Act, the registered holder of any shares in which any person has a beneficial interest, must deliver to each such person a notice of any meeting of the Company at which those shares may be voted on, within two business days after receiving such a notice from the Company.

tRAnSFeR oFFiceSSouth AfricaComputershare Investor Services Proprietary LimitedGround Floor70 Marshall StreetJohannesburg, 2001PO Box 61051Marshalltown, 2107

Tel: +2711 370 5000Fax: +2711 688 5248

united kingdomCapita RegistrarsThe Registry34 Beckenham RoadBeckenhamKent BR3 4TUEngland

Tel: 0871 664 0300 (calls cost 10 pence per minute plus network extras) Lines are open Monday to Friday, from 09:00 to 17:30

From outside the UK: +44 (0) 20 8639 3399

E-mail: [email protected]

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