UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 20, 1997 (February 18, 1997)
Newmont Mining Corporation
Delaware 1-1153 13-1806811
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1700 Lincoln Street, Denver CO 80203
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(303) 863-7414
<PAGE>
Item 5. Other Events.
On February 18, 1997, Newmont Gold Company ("Newmont Gold") issued a
press release announcing that the Eighth Court of the Superior Court of Lima
upheld the decision of the Fifth Civil Court of Lima regarding ownership
rights to Minera Yanacocha in Peru. On February 20, 1997, Newmont Gold issued
a press release announcing its proven and probable gold reserves as of
December 31, 1996. Copies of the text of Newmont Mining's press releases are
attached as Exhibit 20(a) and Exhibit 20(b) and are incorporated herein by
reference.
Item 7. Financial Statements and Exhibits
(a) None.
(b) None.
(c) Exhibits.
20(a) Text of Press Release dated February 18, 1997, issued by
Newmont Gold.
20(b) Text of Press Release dated February 20, 1997, issued by
Newmont Gold.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEWMONT MINING CORPORATION
Date: February 20, 1997 By: /s/ Timothy J. Schmitt
Timothy J. Schmitt
Vice President, Secretary and
Assistant General Counsel
<PAGE>
EXHIBIT INDEX
Exhibit 20(a) Text of Press Release dated February 18, 1997
Exhibit 20(b) Text of Press Release dated February 20, 1997
<PAGE>
Exhibit 20(a)
[NEWMONT GOLD COMPANY LOGO]
News Release
Investor Contact: Terry Terens
(303) 837-6141
Media Contact: Doug Hock
(303) 837-5812
NEWMONT, BUENAVENTURA WIN YANACOCHA LAWSUIT
DENVER, February 18, 1997 -- Newmont Gold Company and Compania de Minas
Buenaventura, S.A. have been advised that the Eighth Court of the Superior
Court of Lima has upheld the decision of the Fifth Civil Court of Lima
regarding ownership rights to Minera Yanacocha in Peru.
In September, the civil court affirmed the right of Newmont and
Buenaventura to exercise their preemptive rights to acquire the 24.7 percent
interest in Yanacocha originally held by BRGM, an agency of the French
government. The court set a purchase price of $109.3 million, of which
Newmont's share is approximately $59 million.
Exercise of the preemptive right increases Newmont's equity interest in
Yanacocha to 51.35 percent from 38 percent, adds 815,000 ounces to proven and
probable reserves and 685,000 ounces to mineralized material not in reserves.
In addition, it will increase production in 1997 by an estimated 100,000
ounces and add significantly to earnings.
"This is the result we have been seeking for nearly two and a half
years," said Ronald C. Cambre, Newmont's Chairman, President and CEO. "We are
pleased that we and Buenaventura can continue to develop this extraordinary
property in the best interests of our shareholders and the people of Peru."
Newmont has been advised by its Peruvian counsel that under Peru's Civil
Procedure Code, decisions of the Superior Court can be modified by the Supreme
Court of Peru only under very limited circumstances and that the issues in
this matter do not qualify for such review.
As a result of the ruling, Newmont will account for Yanacocha on a
consolidated basis. Until now, Newmont has accounted for its 38 percent
interest in the mine on an equity basis.
Minera Yanacocha, the largest gold mining operation in Latin America,
commenced production in late 1993. It was the first major foreign investment
in the Peruvian mining industry in 20 years. Yanacocha operates three open
pit mines that produced 811,400 ounces of gold in 1996 at a total cash cost of
$107 per ounce. At year-end 1996 Yanacocha had proven and probable gold
reserves of more than 6 million ounces and mineralized material not in
reserves in excess of 5 million ounces.
Under the bylaws of Minera Yanacocha, shareholders were given preemptive
rights on the proposed sale of any other shareholders' interest. Newmont and
Buenaventura sued BRGM to enforce those rights after the French government
announced its intention to privatize BRGM in 1993 and a subsequent transaction
with an Australian company in September 1994.
<PAGE>
Newmont Gold Company, one of the world's largest gold producers, is 91
percent owned by Newmont Mining Corporation.
# # #
<PAGE>
INFORMATION CONCERNING THE DIRECTORS, EXECUTIVE OFFICERS
AND EMPLOYEES OF NEWMONT MINING CORPORATION AND
NEWMONT GOLD COMPANY AND OTHER REPRESENTATIVES OF
NEWMONT MINING CORPORATION WHO MAY COMMUNICATE
WITH SANTA FE PACIFIC GOLD CORPORATION SHAREHOLDERS
The following is information concerning the directors, executive officers
and employees of Newmont Mining Corporation ("Newmont Mining") and Newmont
Gold Company ("Newmont Gold") and other representatives of Newmont Mining who
may communicate with Santa Fe Pacific Gold Corporation ("Santa Fe")
shareholders with respect to (i) the planned merger of Homestake Mining
Company ("Homestake") with Santa Fe pursuant to which Santa Fe will become a
wholly-owned subsidiary of Homestake and each outstanding share of Santa Fe
common stock, $0.01 par value (each a "Santa Fe Share" and collectively the
"Santa Fe Shares"), will be converted into the right to receive 1.115 shares
of Homestake common stock, $1.00 par value, and (ii) Newmont Mining's
intention to commence an offer, as described in and subject to terms and
conditions set forth in the Preliminary Prospectus dated January 7, 1997
contained in the Registration Statement on Form S-4 of Newmont Mining
(Registration No. 333-19335), to exchange each outstanding Santa Fe Share for
0.40 of a share of Newmont Mining common stock, $1.60 par value (the "Offer").
Newmont Mining's proposed offer has not been commenced. The Offer, if
commenced, will expire on the 20th business day after such commencement,
unless and until Newmont Mining extends the period of time for which the Offer
will be open. Any such extension will be announced no later than 9:00 A.M.,
New York City time, on the next business day after the previously scheduled
expiration date. It is Newmont Mining's current intention to extend the
Offer, if commenced, until all conditions thereto have been either satisfied
or waived.
Newmont Mining's principal executive offices are located at 1700 Lincoln
Street, Denver, Colorado 80203. Santa Fe's principal executive offices are
located at 6200 Uptown Boulevard NE, Suite 400, Albuquerque, New Mexico 87110.
<PAGE>
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
OF NEWMONT MINING AND NEWMONT GOLD WHO MAY
COMMUNICATE WITH SANTA FE SHAREHOLDERS
PRESENT OFFICE OR
OTHER PRINCIPAL
NAME AND PRINCIPAL OCCUPATION OR
BUSINESS ADDRESS (1) EMPLOYMENT
Rudolph I.J. Agnew . . . . . . . Director; Chairman of
7, Eccleston Street World Conservation
Belgravia, London SW1W 9LX Monitoring Centre
England
J.P. Bolduc . . . . . . . . . . . Director; Chairman and
JPB Enterprises, Inc. Chief Executive
8808 Centre Park Drive #204 Officer of JPB
Columbia, Maryland 21045 Enterprises, Inc.
Ronald C. Cambre . . . . . . . . Director; Chairman,
President and Chief
Executive Officer
Joseph P. Flannery . . . . . . . Chairman, President
Uniroyal Holding, Inc. and Chief Executive
70 Great Hill Road Officer of Uniroyal
Naugatuck, Connecticut 06770 Holding, Inc.
Leo I. Higdon, Jr. . . . . . . . Director; Dean and
Darden Graduate School of Charles C. Abbott
Business Professor of the
University of Virginia Darden Graduate School
Massie Road Extended of Business
Charlottesville, Virginia 22903 Administration at the
University of Virginia
Thomas A. Holmes . . . . . . . . Director; Retired
Ingersoll-Rand Company Chairman and Chief
200 Chestnut Ridge Road Executive Officer of
Woodcliff Lake, New Jersey 07675 Ingersoll-Rand Company
Robin A. Plumbridge . . . . . . . Director; Chairman of
Gold Fields of South Africa Gold Fields of South
Limited Africa Limited
P.O. Box 61525
Marshalltown 2107
Republic of South Africa
Moeen A. Qureshi . . . . . . . . Director; Chairman of
Emerging Markets Corporation Emerging Markets
2001 Pennsylvania Ave., #1100 Corporation
Washington, D.C. 20006
Michael K. Reilly Director; Chairman of
Zeigler Coal Holding Company Zeigler Coal Holding
50 Jerome Lane Company
Fairview Heights, Illinois 62208
William I.M. Turner, Jr. . . . . Director; Chairman and
EXSULTATE INC. Chief Executive
1981 McGill College Avenue Officer of EXSULTATE
Suite 575 INC.
Montreal, Quebec H3A 2X1
Canada
<PAGE>
Robert H. Quenon(2) . . . . . . Director, Mining
7800 Forsyth Blvd. (6th Floor) Consultant
St. Louis, MO 63105
James V. Taranik(2) . . . . . . Director, President of
Desert Research Institute Desert Research
7010 Dandini Blvd. Institute, University
Reno, NV 89512 and Community College
System of Nevada
Wayne W. Murdy . . . . . . . . . Executive Vice
President and Chief
Financial Officer
John A.S. Dow . . . . . . . . . . Senior Vice President,
Exploration
Lawrence T. Kurlander . . . . . . Senior Vice President,
Administration
Gary E. Farmar . . . . . . . . . Vice President and
Controller
Patricia A. Flanagan . . . . . . Vice President,
Treasurer and
Assistant Secretary
Joy E. Hansen . . . . . . . . . . Vice President and
General Counsel
Donald G. Karras . . . . . . . . Vice President, Taxes
Timothy J. Schmitt . . . . . . . Vice President,
Secretary and
Assistant General
Counsel
W. Durand Eppler(2) . . . . . . Vice President,
Business Development
and Planning
Jack H. Morris(2) . . . . . . . Vice President,
Corporate Relations
W. James Mullin(2) . . . . . . . Vice President, North
American Operations
Jeffrey R. Huspeni(2) . . . . . Director of Mine
Geology
(1) Unless otherwise indicated, the principal business address of each
director, executive officer and employee is Newmont Mining Corporation, 1700
Lincoln Street, Denver, Colorado 80203.
(2) Director, officer or employee of Newmont Gold only.
On December 31, 1996, Midtown One Corp., a wholly-owned subsidiary of
Newmont Mining, acquired 200 Santa Fe Shares at a price of $17.50 per Santa Fe
Share in a privately negotiated transaction with Mr. and Mrs. David H.
Francisco. Mr. Francisco is Vice President, International Operations, of
Newmont Gold. On January 6, 1997, Midtown One Corp. acquired an additional
4,600 Santa Fe Shares at a price of $17.50 per Santa Fe Share in a privately
negotiated transaction with Mr. and Mrs. Francisco.
<PAGE>
In October, 1996, Santa Fe and Newmont Mining entered into a
confidentiality agreement, pursuant to which and in contemplation of a
potential transaction between Santa Fe and Newmont Mining, each party provided
the other with certain confidential information.
Newmont Gold leases from Santa Fe certain properties in Eureka County
Nevada pursuant to a Lease of Mining Rights dated November 1, 1977, as amended
(the "Lease Agreement"). The Lease Agreement grants to Newmont Gold the
exclusive right to mine the nonferrous metals located on the land covered by
the Lease Agreement. In addition, Carlin Gold Mining Company (predecessor to
Newmont Gold), Southern Pacific Land Company (predecessor to Santa Fe) and
certain other individuals have entered into an Agreement for Unitization of
Ore Reserves dated as of January 18, 1982 (the "Unitization Agreement"), which
provides for unitization of certain of the properties leased pursuant to the
Lease Agreement. Pursuant to the terms of both the Lease Agreement and the
Unitization Agreement, Newmont Gold is required to pay Santa Fe royalty
payments based upon net smelter returns on ores and concentrates sent to
smelter or the gross sales price of any gold or silver bullion produced and
sold from Newmont Gold's mills. In 1995, the aggregate amount of such royalty
payments was approximately $4 million. The Lease Agreement is renewable
annually but will otherwise terminate on November 1, 2002. The Unitization
Agreement will remain in effect until Newmont Gold determines that all gold
ores located on the properties covered by the Unitization Agreement are mined.
In addition, Newmont Gold also leases from an affiliate of Santa Fe certain
other properties in Eureka County, Nevada pursuant to a Minerals Sublease
dated April 1, 1991 (the "Mineral Sublease"). The Mineral Sublease grants to
Newmont Gold the right to explore, develop, mine, recover and process minerals
located on the land covered by the Mineral Sublease. Pursuant to the terms of
the Mineral Sublease, Newmont Gold is required to pay Santa Fe's affiliate at
least $12,800 per year plus an annual royalty of 5% of net returns of minerals
mined and removed. To date, there has been no production on the property
which is the subject of the Mineral Sublease. The Mineral Sublease expires on
the later to occur of April 1, 2001 and the date on which minerals cease being
produced in commercial quantities.
Effective April 15, 1996, Newmont Exploration Limited ("Newmont
Exploration"), a wholly-owned subsidiary of Newmont Gold, entered into an
Exploration, Development and Mining Operations Agreement with Santa Fe (the
"Exploration Agreement"), pursuant to which the two parties agreed to enter
into a joint venture (the "Joint Venture") in order to jointly explore and
evaluate the possible development of certain properties located at Mary's
Mountain in Eureka County, Nevada. As an initial contribution to the Joint
Venture, Newmont Exploration agreed to lease to the Joint Venture 145
unpatented claims and Santa Fe agreed to lease to the Joint Venture five fee
sections owned by it and to sublease to the Joint Venture one fee section
leased by it. Newmont Exploration also agreed to spend an aggregate of
$2,000,000 during the first six years of the effectiveness of the Exploration
Agreement. Each party has a 50% interest in the Joint Venture. Newmont
Exploration is manager of the Joint Venture. Newmont Exploration may withdraw
from the Exploration Agreement prior to the completion of its contribution,
subject to its obligation to complete the expenditure of the first $40,000 of
exploration expenditures (which obligation it has already met). Each party
has the right to withdraw after its contribution, but in the event that it
does, it will have no further interest in the Assets (as defined therein) of
the Joint Venture. Unless earlier terminated pursuant to its terms, the
Exploration Agreement will remain in effect until August 2, 2012 and for so
long thereafter as the properties are jointly owned pursuant to the
Exploration Agreement.
From time to time Newmont Exploration has entered into confidentiality
agreements with third parties, including Santa Fe, covering the exchange of
data relating to mining exploration potential. Such agreements customarily
have a term of one to two years.
<PAGE>
OTHER REPRESENTATIVES OF NEWMONT MINING WHO MAY
COMMUNICATE WITH SANTA FE SHAREHOLDERS
NAME AND PRINCIPAL PRESENT OFFICE OR OTHER
BUSINESS ADDRESS (1) PRINCIPAL OCCUPATION OR
EMPLOYMENT
Peter D. Brundage . . . Managing Director,
Goldman, Sachs & Co. Goldman, Sachs & Co.
100 Crescent Court
Suite 1000
Dallas, Texas 75201
Robert P. Fisher . . . Managing Director,
Goldman, Sachs & Co.
Steven M. Heller . . . Managing Director,
Goldman, Sachs & Co.
Lance G. Gilliland . . Associate, Goldman, Sachs
& Co.
Gregory A. Gonsalves . Associate, Goldman, Sachs
& Co.
Sean J. Glodek . . . . Analyst, Goldman, Sachs &
Co.
(1) Unless otherwise indicated, the principal business address of each
representative of Goldman, Sachs & Co. is Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004.
Pursuant to a letter agreement dated October 24, 1996 (the "Letter
Agreement"), Goldman, Sachs & Co. ("Goldman Sachs") is providing certain
financial advisory services to Newmont Mining in connection with the Offer.
Under the Letter Agreement, Newmont Mining has agreed to pay Goldman Sachs for
its financial advisory services (including its services as Dealer Manager) in
connection with the Offer (i) a minimum fee of $200,000 upon execution of the
Letter Agreement (the "Minimum Fee"), (ii) a transaction fee of 0.40% of the
aggregate consideration paid in an acquisition, if more than 50% of the Santa
Fe Shares or more than 50% of the assets of Santa Fe are acquired (less fees
already paid, provided, however, the Minimum Fee shall not be so credited if
such fee was paid more than one year prior to the consummation of the
transaction), and (iii) a mutually acceptable fee of no less than 0.40% of the
aggregate consideration paid in an acquisition, if less than 50% of the Santa
Fe Shares or less than 50% of the assets of Santa Fe are acquired.
If Newmont Mining enters into an agreement to acquire Santa Fe (the
"Agreement") and Newmont Mining receives a payment on account of the
termination of the Agreement, Newmont Mining shall pay Goldman Sachs a fee of
15% of such payment (less reasonable legal expenses and out-of-pocket expenses
incurred by Newmont Mining). Newmont Mining has also agreed to reimburse
Goldman Sachs for its reasonable out-of-pocket expenses, including the fees
and expenses of its legal counsel incurred in connection with its engagement,
and has agreed to indemnify each of Goldman Sachs and certain related persons
and entities against certain liabilities and expenses in connection with
Goldman Sachs' engagement, including certain liabilities under the federal
securities laws. Goldman Sachs will not receive any fee for or in connection
with the communication with Santa Fe shareholders by its employees apart from
the fees it is otherwise entitled to receive as described above.
In addition to the fees to be received by Goldman Sachs in connection
with its engagement as financial advisor to Newmont Mining, Goldman Sachs has
in the past rendered and is expected to continue to render various investment
<PAGE>
banking and financial advisory services for Newmont Mining for which it has
received customary compensation. Goldman Sachs also has in the past rendered
various investment banking and financial advisory services for Santa Fe for
which it has received customary compensation.
Goldman Sachs engages in a full range of investment banking, securities
trading, market-making and brokerage services for institutional and individual
clients. In the ordinary course of its business, Goldman Sachs may actively
trade the equity and debt securities of Santa Fe for its own account and the
accounts of its customers and, accordingly, may at any time hold a long or
short position in such securities. As of February 14, 1997, Goldman Sachs
held a net long position of approximately 34,003 Santa Fe Shares. Goldman
Sachs does not admit that it or any of its directors, officers, employees or
affiliates is a "participant," as defined in Schedule 14A promulgated under
the Securities Exchange Act of 1934, as amended, by the Securities and
Exchange Commission or that Schedule 14A requires the disclosure of certain
information concerning Goldman Sachs.
<PAGE>
Exhibit 20(b)
[Newmont Gold Logo]
Press Release
Investor Contact: Terry Terens Media Contact: Doug Hock
(303) 837-6141 (303) 837-5812
NEWMONT RESERVES INCREASE 29 PERCENT TO 37.1 MILLION OUNCES
DENVER, February 20, 1997 -- Newmont Gold Company ended 1996 with 37.1
million equity ounces of proven and probable gold reserves, an increase of 8.3
million ounces, or 29 percent, from reserves of 28.8 million ounces reported
at the end of 1995.
The company converted 9.4 million ounces of previously identified
mineralized material to reserves, added 1.3 million ounces through new
discoveries and revisions of previous estimates, and added 0.8 million ounces
as a result of a court decision authorizing the company to increase its
ownership in Minera Yanacocha in Peru to 51.4 percent from 38 percent. This
more than offset mine depletion of 3.2 million ounces for the year.
"This marks our sixth consecutive year of increased reserves and the most
ounces we have added in any year in our history," said Newmont Chairman,
President and Chief Executive Officer Ronald C. Cambre. "On a gross basis,
reserves rose 16.8 million ounces, or 46 percent, to 53.3 million ounces.
This is the true measure of success of Newmont's global exploration effort."
Cambre added, "It is significant at a time of low gold prices that our
reserves are primarily low-cost ounces. Newmont is projecting a 10 percent
decline in total cash cost per ounce of production in 1997 to approximately
$200. Furthermore, 86 percent of our reserves can be profitably produced at a
gold price of $350 an ounce."
Reserves were added net of depletion at both Carlin, Nevada and Minera
Yanacocha. Reserves were reported for the first time from the Batu Hijau
project in Indonesia and La Herradura in Mexico. In addition, Newmont booked
4.8 billion pounds of copper into reserves from its share of the Batu Hijau
project.
At Carlin, reserves increased to a record 22.1 million equity ounces, up
from 20.9 million ounces in 1995, despite mining depletion of 2.3 million
ounces. Reserves from underground deposits increased to 3.8 million ounces
from 1.2 million ounces. Additions included 2 million equity ounces from the
West Leeville/Four Corners area, including the Newmont/Barrick HD Venture
property where Newmont holds a 60 percent interest. Another million ounces
were added at the Deep Star, Carlin and Rain underground mines. Reserves from
open pit mines at Carlin declined to 15.6 million ounces from 17.1 million
ounces.
Reserves at Minera Yanacocha increased to 6.1 million ounces (3.1 million
equity ounces) from 4.9 million ounces (1.9 million equity ounces) as the
conversion of 1.9 million ounces from the Yanacocha Norte and Encajon deposits
and the addition of 500,000 ounces at Carachugo more than offset depletion of
1.2 million ounces.
<PAGE>
Batu Hijau represented the largest addition to 1996 reserves, with the
conversion of 12.1 million ounces (5.4 million equity ounces) from the
previously defined mineralized material category. Newmont holds a 45 percent
interest in Batu Hijau. Also placed in reserves at Batu Hijau were 10.6
billion pounds (4.8 billion equity pounds) of copper. Newmont is awaiting
final construction and forestry permits from the Indonesian government.
Engineering and pre-construction site preparation are nearing completion.
Marketing of the copper/gold concentrate and arranging the required project
financing are proceeding on schedule. Production could begin in late 1999.
An additional 1.7 million ounces (740,000 equity ounces) were converted
from mineralized material for the La Herradura project in northern Mexico.
Newmont holds a 44 percent interest in La Herradura, which is scheduled to
begin production in 1998.
Reserves from the 80 percent-owned Minahasa mine in Indonesia and the 50
percent-owned Zarafshan-Newmont Joint Venture in Uzbekistan declined slightly
due to mining depletion and a draw-down of stockpiles for processing.
During 1996, mineralized material not in reserves was added in Carlin's
Turf, Goldbug and Pete deposits and in the Yanacocha Sur and Oeste deposits in
Peru. However, with the large conversion of ounces to reserves and the
reduction in Newmont's equity share in Batu Hijau to 45 percent from 80
percent following the signing of a joint venture agreement with Sumitomo
Corporation last March, mineralized material not in reserves declined from
1995.
Proven and probable reserves are based on extensive drilling, sampling,
and mine modeling from which economic feasibility has been determined.
Mineralized material not in reserves is only potentially economic under
current or reasonably expected conditions. Further drilling, technological
changes or a higher gold price is required before these deposits can be
classified as reserves. Generally, new discoveries are classified as
mineralized material until the economic feasibility of mining the deposit is
determined. Over the past five years, Newmont has converted 71 percent of its
mineralized material into reserves.
Newmont Gold is 91 percent owned by Newmont Mining Corporation.
<PAGE>
Newmont Gold Company
1996 & 1995 PROVEN AND PROBABLE RESERVES
U.S. Units (short tons, ozs/short ton)
<TABLE>
DECEMBER 31, 1996
1996
PERCENT TONNAGE GRADE OUNCES EQUITY OZ
DEPOSITS EQUITY (000 TONS) (OZ/TON) (000) (000)
<S> <C> <C> <C> <C> <C>
CARLIN OPEN PIT 100 272,587 0.057 15,620 15,620
CARLIN UNDERGROUND 100 3,719 0.551 2,049 2,049
CARLIN UNDERGROUND 60 7,050 0.425 2,993 1,796
STOCKPILES AND IN PROCESS 100 53,767 0.050 2,673 2,673
TOTAL CARLIN, NV 337,123 0.069 23,335 22,138
MINERA YANACOCHA, PERU 51 198,107 0.031 6,109 3,138
ZARAFSHAN-NEWMONT, UZBEKISTAN 50 231,669 0.035 8,211 4,105
MINAHASA, INDONESIA 80 7,739 0.247 1,913 1,530
LA HERRADURA, MEXICO 44 54,408 0.031 1,683 740
TOTAL INTERNATIONAL 491,923 0.036 17,916 9,513
(EXCLUDING BATU HIJAU)
GOLD 0.012 12,096 5,443
BATU HIJAU, INDONESIA 45 1,006,593
(cu%) billion lbs billion lbs
COPPER 0.528 10.631 4.784
TOTAL GOLD RESERVES 53,347 37,094
</TABLE>
<PAGE>
<TABLE>
DECEMBER 31, 1995
TONNAGE GRADE OUNCES EQUITY OZ
DEPOSITS (000 TONS) (OZ/TON) (000) (000)
<S> <C> <C> <C> <C>
CARLIN OPEN PIT 316,174 0.054 17,143 17,143
CARLIN UNDERGROUND 1,931 0.632 1,220 1,220
CARLIN UNDERGROUND 0 0 0
STOCKPILES AND IN PROCESS 47,730 0.053 2,521 2,521
TOTAL CARLIN, NV 365,835 0.057 20,884 20,884
MINERA YANACOCHA, PERU 137,071 0.036 4,911 1,865
ZARAFSHAN-NEWMONT, UZBEKISTAN 241,794 0.036 8,632 4,316
MINAHASA, INDONESIA 10,526 0.204 2,147 1,717
LA HERRADURA, MEXICO
TOTAL INTERNATIONAL 389,391 0.040 15,690 7,898
(EXCLUDING BATU HIJAU)
TOTAL GOLD RESERVES 36,574 28,782
</TABLE>
<PAGE>
Reserves - Calculated at gold price of $400/ounce or less. A reduction in the
gold price to $350/ounce would cause an approximate 14 percent decline in
reserves; at $300/ounce the reduction would be approximately 25 percent.
Carlin, Nevada - Reserves calculated using a cutoff grade of at least
0.006 ounce/ton for oxide material (27 percent of reserves) and 0.07
ounce/ton for mill grade refractory material (57 percent of reserves).
Cutoff grade for bioleachable refractory ore at Gold Quarry is 0.03
ounce/ton (16 percent of reserves).
Yanacocha - Oxide material above 0.01 ounce/ton. Equity ownership
increased to 51.4 percent in 1996 from 38 percent in 1995 as a result of
a ruling by the Superior Court of Peru in February, 1997.
Zarafshan-Newmont - Stockpiled material whose tonnage and grade were
confirmed by drilling and are guaranteed by State entities of the
Republic of Uzbekistan. To date grade mined is approximately 10% higher
than guaranteed grade.
Minahasa - Reserves of mostly refractory material calculated using a
cutoff grade of 0.058 ounce/ton.
La Herradura - Reserves based on a feasibility study completed in 1996.
Construction is scheduled to begin in 1997.
Batu Hijau - Reserves based on a feasibility study completed in 1996.
Construction, awaiting permits from the Indonesian government, is
scheduled to begin in 1997.
<PAGE>
Newmont Gold Company
1996 & 1995 MINERALIZED MATERIAL NOT IN RESERVES
U.S. Units (short tons, ozs/short ton)
<TABLE>
DECEMBER 31, 1996 DECEMBER 31, 1995
1996
PERCENT TONNAGE GRADE TONNAGE GRADE
DEPOSITS EQUITY (000 TONS) (OZ/TON) (000 TONS) (OZ/TON)
<S> <C> <C> <C> <C> <C>
CARLIN OPEN PIT 100 126,756 0.050 165,243 0.048
CARLIN UNDERGROUND 100 8,938 0.314 4,516 0.309
CARLIN UNDERGROUND 60 500 0.328 7,113 0.348
STOCKPILES AND IN PROCESS 100 8,353 0.046 9,127 0.046
TOTAL CARLIN, NV 144,547 0.067 185,999 0.065
MINERA YANACOCHA, PERU 51 217,457 0.024 149,758 0.028
MINAHASA, INDONESIA 80 396 0.157 1,226 0.116
LA HERRADURA, MEXICO 44 14,908 0.032 51,096 0.035
MEZCALA, MEXICO 44 54,587 0.027 44,993 0.024
TOTAL INTERNATIONAL 287,348 0.025 247,073 0.029
(EXCLUDING BATU HIJAU)
GOLD 0.005 0.016
BATU HIJAU, INDONESIA 45 803,481 919,538
(cu%) (cu%)
COPPER 0.333 0.610
</TABLE>
<PAGE>
Material Not In Reserves - Calculated from drill hole data and other
information. After preliminary analysis this material has been found to have
economic potential but feasibility of a mining operation has not yet been
demonstrated. While there is no assurance that this material will be
reclassified as reserves, it is reported only where the potential exists for
reclassification.
Carlin, Nevada - Material which requires a higher gold price,
improvements in the economic feasibility of processing low grade
refractory material and more information on underground projects.
Yanacocha, Peru - Oxide material which requires additional drilling to
confirm economic feasibility. Equity ownership increased to 51.4 percent
in 1996 from 38 percent in 1995 as a result of a ruling by the Superior
Court of Peru in February, 1997.
Minahasa - Small oxide deposits whose economic exploitation has not yet
been demonstrated.
Batu Hijau - Deeper material which could be mined by open pit method but
requires additional drilling.
La Herradura - Oxide material not included in reserve because of marginal
economics.
Mezcala - Potential open pit mine of oxide material. Additional drilling
and feasibility studies are in progress.
<PAGE>
INFORMATION CONCERNING THE DIRECTORS, EXECUTIVE OFFICERS
AND EMPLOYEES OF NEWMONT MINING CORPORATION AND
NEWMONT GOLD COMPANY AND OTHER REPRESENTATIVES OF
NEWMONT MINING CORPORATION WHO MAY COMMUNICATE
WITH SANTA FE PACIFIC GOLD CORPORATION SHAREHOLDERS
The following is information concerning the directors, executive officers
and employees of Newmont Mining Corporation ("Newmont Mining") and Newmont
Gold Company ("Newmont Gold") and other representatives of Newmont Mining who
may communicate with Santa Fe Pacific Gold Corporation ("Santa Fe")
shareholders with respect to (i) the planned merger of Homestake Mining
Company ("Homestake") with Santa Fe pursuant to which Santa Fe will become a
wholly-owned subsidiary of Homestake and each outstanding share of Santa Fe
common stock, $0.01 par value (each a "Santa Fe Share" and collectively the
"Santa Fe Shares"), will be converted into the right to receive 1.115 shares
of Homestake common stock, $1.00 par value, and (ii) Newmont Mining's
intention to commence an offer, as described in and subject to terms and
conditions set forth in the Preliminary Prospectus dated January 7, 1997
contained in the Registration Statement on Form S-4 of Newmont Mining
(Registration No. 333-19335), to exchange each outstanding Santa Fe Share for
0.40 of a share of Newmont Mining common stock, $1.60 par value (the "Offer").
Newmont Mining's proposed offer has not been commenced. The Offer, if
commenced, will expire on the 20th business day after such commencement,
unless and until Newmont Mining extends the period of time for which the Offer
will be open. Any such extension will be announced no later than 9:00 A.M.,
New York City time, on the next business day after the previously scheduled
expiration date. It is Newmont Mining's current intention to extend the
Offer, if commenced, until all conditions thereto have been either satisfied
or waived.
Newmont Mining's principal executive offices are located at 1700 Lincoln
Street, Denver, Colorado 80203. Santa Fe's principal executive offices are
located at 6200 Uptown Boulevard NE, Suite 400, Albuquerque, New Mexico 87110.
<PAGE>
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
OF NEWMONT MINING AND NEWMONT GOLD WHO MAY
COMMUNICATE WITH SANTA FE SHAREHOLDERS
PRESENT OFFICE OR
OTHER PRINCIPAL
NAME AND PRINCIPAL OCCUPATION OR
BUSINESS ADDRESS (1) EMPLOYMENT
Rudolph I.J. Agnew . . . . . . . Director; Chairman of
7, Eccleston Street World Conservation
Belgravia, London SW1W 9LX Monitoring Centre
England
J.P. Bolduc . . . . . . . . . . . Director; Chairman and
JPB Enterprises, Inc. Chief Executive
8808 Centre Park Drive #204 Officer of JPB
Columbia, Maryland 21045 Enterprises, Inc.
Ronald C. Cambre . . . . . . . . Director; Chairman,
President and Chief
Executive Officer
Joseph P. Flannery . . . . . . . Chairman, President
Uniroyal Holding, Inc. and Chief Executive
70 Great Hill Road Officer of Uniroyal
Naugatuck, Connecticut 06770 Holding, Inc.
Leo I. Higdon, Jr. . . . . . . . Director; Dean and
Darden Graduate School of Charles C. Abbott
Business Professor of the
University of Virginia Darden Graduate School
Massie Road Extended of Business
Charlottesville, Virginia 22903 Administration at the
University of Virginia
Thomas A. Holmes . . . . . . . . Director; Retired
Ingersoll-Rand Company Chairman and Chief
200 Chestnut Ridge Road Executive Officer of
Woodcliff Lake, New Jersey 07675 Ingersoll-Rand Company
Robin A. Plumbridge . . . . . . . Director; Chairman of
Gold Fields of South Africa Gold Fields of South
Limited Africa Limited
P.O. Box 61525
Marshalltown 2107
Republic of South Africa
Moeen A. Qureshi . . . . . . . . Director; Chairman of
Emerging Markets Corporation Emerging Markets
2001 Pennsylvania Ave., #1100 Corporation
Washington, D.C. 20006
Michael K. Reilly . . . . . . . Director; Chairman of
Zeigler Coal Holding Company Zeigler Coal Holding
50 Jerome Lane Company
Fairview Heights, Illinois 62208
William I.M. Turner, Jr. . . . . Director; Chairman and
EXSULTATE INC. Chief Executive
1981 McGill College Avenue Officer of EXSULTATE
Suite 575 INC.
Montreal, Quebec H3A 2X1
Canada
<PAGE>
Robert H. Quenon(2) . . . . . . Director, Mining
7800 Forsyth Blvd. (6th Floor) Consultant
St. Louis, MO 63105
James V. Taranik(2) . . . . . . Director, President of
Desert Research Institute Desert Research
7010 Dandini Blvd. Institute, University
Reno, NV 89512 and Community College
System of Nevada
Wayne W. Murdy . . . . . . . . . Executive Vice
President and Chief
Financial Officer
John A.S. Dow . . . . . . . . . . Senior Vice President,
Exploration
Lawrence T. Kurlander . . . . . . Senior Vice President,
Administration
Gary E. Farmar . . . . . . . . . Vice President and
Controller
Patricia A. Flanagan . . . . . . Vice President,
Treasurer and
Assistant Secretary
Joy E. Hansen . . . . . . . . . . Vice President and
General Counsel
Donald G. Karras . . . . . . . . Vice President, Taxes
Timothy J. Schmitt . . . . . . . Vice President,
Secretary and
Assistant General
Counsel
W. Durand Eppler(2) . . . . . . Vice President,
Business Development
and Planning
Jack H. Morris(2) . . . . . . . Vice President,
Corporate Relations
W. James Mullin(2) . . . . . . . Vice President, North
American Operations
Jeffrey R. Huspeni(2) . . . . . Director of Mine
Geology
(1) Unless otherwise indicated, the principal business address of each
director, executive officer and employee is Newmont Mining Corporation, 1700
Lincoln Street, Denver, Colorado 80203.
(2) Director, officer or employee of Newmont Gold only.
On December 31, 1996, Midtown One Corp., a wholly-owned subsidiary of
Newmont Mining, acquired 200 Santa Fe Shares at a price of $17.50 per Santa Fe
Share in a privately negotiated transaction with Mr. and Mrs. David H.
Francisco. Mr. Francisco is Vice President, International Operations, of
Newmont Gold. On January 6, 1997, Midtown One Corp. acquired an additional
4,600 Santa Fe Shares at a price of $17.50 per Santa Fe Share in a privately
negotiated transaction with Mr. and Mrs. Francisco.
In October, 1996, Santa Fe and Newmont Mining entered into a
confidentiality agreement, pursuant to which and in contemplation of a
potential transaction between Santa Fe and Newmont Mining, each party provided
<PAGE>
the other with certain confidential information.
Newmont Gold leases from Santa Fe certain properties in Eureka County,
Nevada pursuant to a Lease of Mining Rights dated November 1, 1977, as amended
(the "Lease Agreement"). The Lease Agreement grants to Newmont Gold the
exclusive right to mine the nonferrous metals located on the land covered by
the Lease Agreement. In addition, Carlin Gold Mining Company (predecessor to
Newmont Gold), Southern Pacific Land Company (predecessor to Santa Fe) and
certain other individuals have entered into an Agreement for Unitization of
Ore Reserves dated as of January 18, 1982 (the "Unitization Agreement"), which
provides for unitization of certain of the properties leased pursuant to the
Lease Agreement. Pursuant to the terms of both the Lease Agreement and the
Unitization Agreement, Newmont Gold is required to pay Santa Fe royalty
payments based upon net smelter returns on ores and concentrates sent to
smelter or the gross sales price of any gold or silver bullion produced and
sold from Newmont Gold's mills. In 1995, the aggregate amount of such royalty
payments was approximately $4 million. The Lease Agreement is renewable
annually but will otherwise terminate on November 1, 2002. The Unitization
Agreement will remain in effect until Newmont Gold determines that all gold
ores located on the properties covered by the Unitization Agreement are mined.
In addition, Newmont Gold also leases from an affiliate of Santa Fe certain
other properties in Eureka County, Nevada pursuant to a Minerals Sublease
dated April 1, 1991 (the "Mineral Sublease"). The Mineral Sublease grants to
Newmont Gold the right to explore, develop, mine, recover and process minerals
located on the land covered by the Mineral Sublease. Pursuant to the terms of
the Mineral Sublease, Newmont Gold is required to pay Santa Fe's affiliate at
least $12,800 per year plus an annual royalty of 5% of net returns of minerals
mined and removed. To date, there has been no production on the property
which is the subject of the Mineral Sublease. The Mineral Sublease expires on
the later to occur of April 1, 2001 and the date on which minerals cease being
produced in commercial quantities.
Effective April 15, 1996, Newmont Exploration Limited ("Newmont
Exploration"), a wholly-owned subsidiary of Newmont Gold, entered into an
Exploration, Development and Mining Operations Agreement with Santa Fe (the
"Exploration Agreement"), pursuant to which the two parties agreed to enter
into a joint venture (the "Joint Venture") in order to jointly explore and
evaluate the possible development of certain properties located at Mary's
Mountain in Eureka County, Nevada. As an initial contribution to the Joint
Venture, Newmont Exploration agreed to lease to the Joint Venture 145
unpatented claims and Santa Fe agreed to lease to the Joint Venture five fee
sections owned by it and to sublease to the Joint Venture one fee section
leased by it. Newmont Exploration also agreed to spend an aggregate of
$2,000,000 during the first six years of the effectiveness of the Exploration
Agreement. Each party has a 50% interest in the Joint Venture. Newmont
Exploration is manager of the Joint Venture. Newmont Exploration may withdraw
from the Exploration Agreement prior to the completion of its contribution,
subject to its obligation to complete the expenditure of the first $40,000 of
exploration expenditures (which obligation it has already met). Each party
has the right to withdraw after its contribution, but in the event that it
does, it will have no further interest in the Assets (as defined therein) of
the Joint Venture. Unless earlier terminated pursuant to its terms, the
Exploration Agreement will remain in effect until August 2, 2012 and for so
long thereafter as the properties are jointly owned pursuant to the
Exploration Agreement.
From time to time Newmont Exploration has entered into confidentiality
agreements with third parties, including Santa Fe, covering the exchange of
data relating to mining exploration potential. Such agreements customarily
have a term of one to two years.
<PAGE>
OTHER REPRESENTATIVES OF NEWMONT MINING WHO MAY
COMMUNICATE WITH SANTA FE SHAREHOLDERS
NAME AND PRINCIPAL PRESENT OFFICE OR OTHER
BUSINESS ADDRESS (1) PRINCIPAL OCCUPATION OR
EMPLOYMENT
Peter D. Brundage . . . Managing Director,
Goldman, Sachs & Co. Goldman, Sachs & Co.
100 Crescent Court
Suite 1000
Dallas, Texas 75201
Robert P. Fisher . . . Managing Director,
Goldman, Sachs & Co.
Steven M. Heller . . . Managing Director,
Goldman, Sachs & Co.
Lance G. Gilliland . . Associate, Goldman, Sachs
& Co.
Gregory A. Gonsalves . Associate, Goldman, Sachs
& Co.
Sean J. Glodek . . . . Analyst, Goldman, Sachs &
Co.
(1) Unless otherwise indicated, the principal business address of each
representative of Goldman, Sachs & Co. is Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004.
Pursuant to a letter agreement dated October 24, 1996 (the "Letter
Agreement"), Goldman, Sachs & Co. ("Goldman Sachs") is providing certain
financial advisory services to Newmont Mining in connection with the Offer.
Under the Letter Agreement, Newmont Mining has agreed to pay Goldman Sachs for
its financial advisory services (including its services as Dealer Manager) in
connection with the Offer (i) a minimum fee of $200,000 upon execution of the
Letter Agreement (the "Minimum Fee"), (ii) a transaction fee of 0.40% of the
aggregate consideration paid in an acquisition, if more than 50% of the Santa
Fe Shares or more than 50% of the assets of Santa Fe are acquired (less fees
already paid, provided, however, the Minimum Fee shall not be so credited if
such fee was paid more than one year prior to the consummation of the
transaction), and (iii) a mutually acceptable fee of no less than 0.40% of the
aggregate consideration paid in an acquisition, if less than 50% of the Santa
Fe Shares or less than 50% of the assets of Santa Fe are acquired.
If Newmont Mining enters into an agreement to acquire Santa Fe (the
"Agreement") and Newmont Mining receives a payment on account of the
termination of the Agreement, Newmont Mining shall pay Goldman Sachs a fee of
15% of such payment (less reasonable legal expenses and out-of-pocket expenses
incurred by Newmont Mining). Newmont Mining has also agreed to reimburse
Goldman Sachs for its reasonable out-of-pocket expenses, including the fees
and expenses of its legal counsel incurred in connection with its engagement,
and has agreed to indemnify each of Goldman Sachs and certain related persons
and entities against certain liabilities and expenses in connection with
Goldman Sachs' engagement, including certain liabilities under the federal
securities laws. Goldman Sachs will not receive any fee for or in connection
with the communication with Santa Fe shareholders by its employees apart from
the fees it is otherwise entitled to receive as described above.
In addition to the fees to be received by Goldman Sachs in connection
with its engagement as financial advisor to Newmont Mining, Goldman Sachs has
in the past rendered and is expected to continue to render various investment
banking and financial advisory services for Newmont Mining for which it has
<PAGE>
received customary compensation. Goldman Sachs also has in the past rendered
various investment banking and financial advisory services for Santa Fe for
which it has received customary compensation.
Goldman Sachs engages in a full range of investment banking, securities
trading, market-making and brokerage services for institutional and individual
clients. In the ordinary course of its business, Goldman Sachs may actively
trade the equity and debt securities of Santa Fe for its own account and the
accounts of its customers and, accordingly, may at any time hold a long or
short position in such securities. As of February 18, 1997, Goldman Sachs
held a net long position of approximately 34,003 Santa Fe Shares. Goldman
Sachs does not admit that it or any of its directors, officers, employees or
affiliates is a "participant," as defined in Schedule 14A promulgated under
the Securities Exchange Act of 1934, as amended, by the Securities and
Exchange Commission or that Schedule 14A requires the disclosure of certain
information concerning Goldman Sachs.