Filed by Newmont Mining Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Battle Mountain Gold Company
Commission File No. 1-9666
FOR IMMEDIATE RELEASE
[Newmont Logo]
[Graphic - NEWS RELEASE]
[Graphic - BATTLE MOUNTAIN GOLD]
Newmont
Media Contact: Doug Hock Investor Contact: Wendy Yang
303-837-5812 303-837-6141
Battle Mountain:
Contact: Les Van Dyke
713-653-7248
NEWMONT MINING AND BATTLE MOUNTAIN GOLD AGREE TO MERGER
DENVER, June 21, 2000 - Newmont Mining Corporation and Battle Mountain
Gold Company have entered into a merger transaction under which Battle Mountain
will become a wholly-owned subsidiary of Newmont Mining. Each of Battle Mountain
Gold's 230 million shares of common stock will be exchanged for 0.105 share of
Newmont common stock. The transaction will be accounted for as a pooling of
interests.
The combination will consolidate the two companies' strategic land
position in Nevada and generate sustainable cash savings of approximately $30
million a year. The transaction is immediately accretive to Newmont shareholders
in terms of reserves, production, earnings and net asset value. It is cash flow
neutral until Battle Mountain's Phoenix project is in operation and accretive
thereafter. The transaction is also accretive to Battle Mountain Gold's
shareholders in terms of cash flow, earnings and net asset measures. Based on
closing stock prices on June 20, 2000, Battle Mountain shareholders will receive
a 25 percent premium, retain their leverage to the gold price and have an
interest in a larger, more liquid and financially stronger company.
The transaction is expected to be completed this Fall, following customary
regulatory approvals and approval by Battle Mountain Gold shareholders. Noranda
Inc., which owns 28 percent of Battle Mountain, has agreed to vote its shares in
favor of the merger.
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"After a thorough review of the Phoenix project, which is the prime
attraction for us, we concur with Battle Mountain Gold's management that it is
one of the best undeveloped gold properties in North America," said Ronald C.
Cambre, Newmont's chairman and chief executive officer. "Located within 30 miles
of Newmont's Lone Tree complex, Phoenix provides an excellent fit with our
Nevada infrastructure. We also acquire attractive, low-cost assets in Canada,
Bolivia and Australia and will have the opportunity to broaden our workforce
through the addition of talented people from the Battle Mountain Gold
organization."
"This merger presents an outstanding opportunity for Battle Mountain Gold
shareholders to participate in one of the strongest and largest precious metals
producers in the industry," said Karl Elers, Chairman and Acting CEO of Battle
Mountain. "Both companies contribute low operating costs, high quality reserves
and major operations that will complement each others' infrastructure in
Nevada."
Newmont will proceed aggressively with permitting, development and further
exploratory drilling on the Phoenix property, which had year-end reserves of 5.7
million ounces of gold and 430 million pounds of copper. The company believes
the project, as well as Battle Mountain's adjacent land holdings, has the
potential for a significant increase in reserves. With permitting expected to be
finalized by mid 2001, the mine and a leach operation could be in production by
early 2002 with the start-up of a 30,000-ton-per-day mill a year later.
Production is estimated to average 390,000 ounces of gold, 1.35 million ounces
of silver and 27.5 million pounds of copper a year. Current reserves indicate a
minimum mine life of 13 years.
Synergies and opportunities from the merger include:
* Capital savings of $25 million to $30 million from the use at Phoenix
of surplus mining equipment from the Mesquite mine in California and
Mule Canyon in Nevada, where deposits are being mined out.
* Processing the gold/copper concentrate from Phoenix through Newmont's
Lone Tree autoclave, thereby eliminating smelting costs, reducing
transportation charges and increasing recovery rates for gold and
copper.
* Application of Newmont's Gold Medal Performance program and global
purchasing initiatives at each Battle Mountain location.
* Consolidation of exploration and administrative personnel worldwide.
Based in Houston, Battle Mountain Gold was formed as a spin-off of
Pennzoil Corporation in 1985 and merged with Hemlo Gold Mines in 1996. The
company had proven and probable reserves at year-end 1999 of 9.9 million ounces
of gold. The company has estimated production of 760,000 ounces in 2000 rising
to more than 900,000 ounces when Phoenix comes into operation in 2003. Total
cash costs were $168 an ounce in the first quarter of 2000. In addition to
Phoenix, the company has the Golden Giant and Holloway mines in northern
Ontario; Kori Kollo in Bolivia and 50 percent of Vera/Nancy in Australia. It
also has an interest in Lihir Gold Limited in Papua New Guinea. The company
employs 1,500 people.
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Newmont, founded in 1921, acquired Santa Fe Pacific Gold Corporation in
1997 to become North America's largest gold producer. It reported reserves of
56.6 million ounces of gold at December 31, 1999. It has estimated production
for 2000 at 4.7 million ounces of gold and had cash costs of $176 an ounce in
the first three months of the year. The company's core assets are in Nevada,
Peru and Indonesia, with other operations in California, Mexico and Uzbekistan.
The company has an employee base of 9,300.
"The successful acquisition of Santa Fe and our ability to generate
significant and sustained savings through the integration of adjacent assets is
the model we will follow with Battle Mountain Gold," Cambre said. "While we are
reviewing optimal mining rates and processing options for Phoenix, we will
achieve significant savings in capital and operating costs by utilizing our
existing equipment and facilities compared with Battle Mountain's stand-alone
plan. As a result, Phoenix will be one of our lowest cost operations in Nevada."
Upon completion of the merger, Newmont's outstanding shares will increase
to approximately 192.2 million. The company expects to assume Battle Mountain
Gold's 2.3 million shares of convertible preferred stock as well as $199 million
in long-term debt. Net debt to total capitalization after the transaction of 40
percent will be essentially unchanged.
Following the merger, Newmont will have reserves of 66.5 million ounces of
gold (the third highest in the world), 232.8 million ounces of silver and 6.1
billion pounds of copper. North America will account for 56 percent of the
company's gold reserves versus 52 percent today. The company will retain its
position as the second largest gold producer in the world with estimated
production in 2000 of 5.4 million ounces of gold at a total cash cost of under
$170 an ounce.
"This transaction is part of a much needed consolidation in the industry,"
Cambre said. "It will enable us to better rationalize our Nevada assets and
determine the optimum investment and production levels to achieve the best
return for our shareholders."
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PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
This press release includes forward-looking information and statements about
Newmont Mining Corporation, Battle Mountain Gold Company and the combined
company after completion of the transaction that are intended to be covered by
the safe harbor for "forward-looking statements" provided by the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
statements that are not historical facts. These statements include financial
projections and estimates and their underlying assumptions; statements regarding
plans, objectives and expectations with respect to future operations, products
and services; and statements regarding future performance. Forward-looking
statements are generally identified by the words "expect," "anticipates,"
"believes," "intends," "estimates" and similar expressions. The forward-looking
information and statements in this press release are subject to various risks
and uncertainties, many of which are difficult to predict and generally beyond
the control of Newmont and Battle Mountain, that could cause actual results to
differ materially from those expressed in, or implied or projected by, the
forward-looking information and statements. These risks and uncertainties
include those discussed or identified in the public filings with the U.S.
Securities and Exchange Commission (SEC) made by Newmont and Battle Mountain;
risks and uncertainties with respect to the parties' expectations regarding the
timing, completion and accounting and tax treatment of the merger, the value of
the merger consideration, production and development opportunities, conducting
worldwide operations, earnings accretion, cost savings, revenue enhancements,
synergies and other benefits anticipated from the transaction; and the effect of
gold price and foreign exchange rate fluctuations, and general economic
conditions such as changes in interest rates and the performance of the
financial markets, changes in domestic and foreign laws, regulations and taxes,
changes in competition and pricing environments, the occurrence of significant
natural disasters, civil unrest and general market and industry conditions.
ADDITIONAL INFORMATION
Information regarding the identity of the persons who may, under SEC rules, be
deemed to be participants in the solicitation of stockholders of Battle Mountain
in connection with the proposed merger, and their interests in the solicitation,
are set forth in a Schedule 14A filed on the date of this press release with the
SEC. Newmont and Battle Mountain will be filing a proxy statement/prospectus and
other relevant documents concerning the proposed transaction with the U.S. SEC.
INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES
AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ON THE PROPOSED TRANSACTION. Investors will be
able to obtain the documents free of charge at the SEC's website (www.sec.gov).
In addition, documents filed with the SEC by Newmont may be obtained free of
charge by contacting Newmont Mining Corporation, 1700 Lincoln Street, Denver, CO
80203, (303) 863-7414. Documents filed with the SEC by Battle Mountain will be
available free of charge by contacting Battle Mountain Gold Company, 333 Clay
Street, 42nd Floor, Houston, Texas 77002, (713) 650-6400. INVESTORS SHOULD READ
THE PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING
ANY VOTING OR INVESTMENT DECISION.
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