SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 1996
HOMESTAKE MINING COMPANY
SAVINGS PLAN
(Full title of Plan)
HOMESTAKE MINING COMPANY
(Issuer of Securities Held Pursuant to the Plan)
650 California Street
San Francisco, California 94108
(Address if principal executive offices)
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
HOMESTAKE MINING COMPANY
SAVINGS PLAN
By /s/ T.H. Wong
----------------------------
T.H. Wong
Assistant Treasurer and
Assistant Secretary
June 24, 1997
<PAGE>
Item 1. Financial Statements and Exhibits
a. Financial Statements for the years ended December 31, 1996
and 1995 and Supplemental Schedules as of and for the year
ended December 31, 1996 and Independent Auditors' Report.
b. Exhibit No. 23
Independent Accountants' Consent
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
-------
FINANCIAL STATEMENTS
as of December 31, 1996 and 1995
and for the year ended December 31, 1996
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
-------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Financial Statements:
Report of Independent Accountants 2
Statements of Net Assets Available for Benefits
as of December 31, 1996 and 1995 3
Statement of Changes in Net Assets Available for
Benefits for the Year Ended December 31, 1996 4
Notes to Financial Statements 5-18
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1996 20
Item 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1996 21
</TABLE>
1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Homestake Mining Company
San Francisco, California
We have audited the accompanying statements of net assets available for benefits
of the Homestake Mining Company Savings Plan (the Plan) as of December 31, 1996
and 1995, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1996. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by Plan
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1996 and 1995, and the changes in net assets available for benefits
for the year ended December 31, 1996, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1996 and of reportable transactions
for the year then ended are presented for the purpose of additional analysis and
are not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Coopers & Lybrand L.L.P.
- ----------------------------
Coopers & Lybrand L.L.P.
San Francisco, California
June 16, 1997
2
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1996 and 1995
(in thousands)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
ASSETS
Cash and cash equivalents:
$ 393 $ 607
Investments:
Barclays Global Investors Asset Allocation Fund 9,805 9,761
Barclays Global Investors Lifepath Funds 5,951 5,046
Neuberger & Berman Guardian Trust Fund 1,671 1,416
Templeton Foreign Fund 1,338 400
Barclays Global Investors S&P 500 Stock Fund 7,989 5,941
Barclays Global Investors Money Market Fund 1,065 -
Homestake Mining Company Stock Fund 10,548 10,029
Fixed Income Fund 17,671 19,915
Frozen Confederation Life
Guaranteed Investment Contracts (See Notes 12 and 14) 3,089 3,091
Participant loans receivable 2,145 2,222
------------------ -----------------
61,272 57,821
------------------ -----------------
Total assets 61,665 58,428
LIABILITIES
Amounts due to brokers for securities purchased 51 327
------------------ -----------------
Net assets available for benefits $ 61,614 $ 58,101
================== =================
The accompanying notes are an integral part of these financial statements.
</TABLE>
3
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the year ended December 31, 1996
(in thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
Additions to net assets attributed to:
Interest and dividends $ 1,231
Interest on participants' loans 201
Mutual fund income 365
Net appreciation in the fair value of investments 3,203
----------------
5,000
----------------
Contributions:
Company, in cash 1,413
Participants, in cash 2,327
Transfers in from other plans 73
----------------
3,813
----------------
Total additions 8,813
----------------
Deductions from net assets attributed to:
Net depreciation in the fair value of investment
in Homestake Mining Company Stock Fund 606
Benefits paid to participants 4,550
Transfers out to other plans 144
----------------
Total deductions 5,300
----------------
Net increase 3,513
Net assets available for benefits:
Beginning of year 58,101
----------------
End of year $ 61,614
================
The accompanying notes are an integral part of these financial statements.
</TABLE>
4
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
1. Description of Plan:
The following description of the Homestake Mining Company Savings Plan
(the Plan) provides only general information. Participants should refer
to the full Plan document for a more complete description of the Plan's
provisions.
General:
The Plan is a defined contribution profit sharing plan (designed to be
qualified under Internal Revenue Code Sections 401(a) and 401(k))
covering the following employees who have completed three months of
service: all full-time salaried employees of Homestake Mining Company
and its subsidiaries (the Company) in the United States and certain
other locations, all hourly employees of the Company who are not covered
by collective bargaining agreements, as well as all temporary employees
who have completed one year of service. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA), as amended.
The Plan is administered by the Company. Effective at the end of the day
on December 31, 1995, Barclays Global Investors (BGI), a unit of
Barclays Bank P.L.C., acquired the 401(k) MasterWorks division from the
Wells Fargo Bank and became the Plan's trustee and investment advisor.
Contributions:
Participation is voluntary. Participants may make pre-tax or after-tax
contributions of between 1% and 15% (between 1% and 14% pre-tax) of
compensation. Participant contributions not exceeding 6% of wages or of
salary are matched 100% by the Company.
Participants may make a rollover contribution to the Plan of amounts
previously contributed to another qualified plan. Rollover contributions
are not matched by the Company.
Each participant may cause some or all of its current or cumulative
contributions, including any amounts contributed by the Company to match
contributions, to be invested in one or more of the investments made
available through the Plan.
5
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
1. Description of Plan, continued:
Participants' Accounts:
Separate accounts are maintained for each participant. Each
participant's account is directly credited with the participant's
contribution and the Company's matching contribution. Net earnings from
each investment fund, including appreciation (depreciation) in fair
value, are allocated to each participant's account based on the ratio
which the participant's account balance in that investment fund bears to
the total of all participants' account balances in that investment fund.
Vesting:
Participant contributions and any income (loss) thereon are fully vested
at all times. Company contributions and any income (loss) thereon are
vested 60% after three years of service, 80% after four years of
service, and 100% after five years of service, on attainment of age 65,
or on the occurrence of death or disability.
Payment of Benefits:
The Plan permits withdrawal of after-tax contributions.
The Plan permits withdrawal of pre-tax contributions upon:
(1) Termination of employment;
(2) Attainment of age 59 1/2;
(3) Death (with vested account balance paid to designated
beneficiary);
(4) Hardship.
The Plan permits withdrawal of vested Company matching contributions
made prior to January 1, 1994; however, the right of the participant who
makes such a withdrawal to continue receiving the Company matching
contribution is suspended for twelve months.
6
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
1. Description of Plan, continued:
Payment of Benefits, continued:
Distribution of benefits, except for certain participants that are
required to receive annuities, can be in the form of single lump-sum
cash payments, a portion paid in lump-sum payments and the remainder
paid later, or periodic installments.
Participant Loans Receivable:
Participants may borrow from their vested accounts $1,000 to $50,000
limited to 50% of the value of such accounts. The loan term cannot
exceed five years unless the loan is for the purchase of a principal
residence, in which case, it cannot exceed ten years. These loans bear
interest at prime rate plus 1%. Loans are collateralized by the
borrower's note and vested interest in the Plan and repayments are made
on at least a monthly basis through payroll deductions.
Forfeitures:
Forfeitures of Company contributions made on behalf of former employees,
whose employment was terminated before such contributions were vested,
can be utilized to restore participants' accounts, to pay plan fees and
expenses, to offset company matching contributions, or can be allocated
to participants.
For the 1996 Plan year, forfeitures were allocated in proportion to the
Company contributions made to the individual participant accounts during
the Plan year.
2. Significant Accounting Policies:
Basis of Accounting:
The financial statements of the Plan are prepared under the accrual
basis of accounting in accordance with generally accepted accounting
principles.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of net assets available for
benefits at the date of the financial statements and the reported
amounts of changes in net assets available for benefits during the
reporting period. Actual results could differ from those estimates.
7
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
2. Significant Accounting Policies, continued:
Investment Valuation and Income Recognition:
Shares and units in investments funds are valued at quoted market
prices, representing the net asset value of the shares or units held by
the Plan at year end.
Effective January 1, 1996, the financial statements are prepared and
presented in compliance with Statement of Position (SOP) 94-4,
"Reporting of Investment Contracts by Health and Welfare Benefit Plans
and Defined Contribution Pension Plans." The adoption of this statement
had no effect on the Plan's statements of net assets available for
benefits. In accordance with this statement, the unallocated guaranteed
investment contracts included in the Fixed Income Fund are stated at
contract value.
Participant loans receivable are valued at cost, which approximates
market value.
Purchases and sales of securities are recorded on a trade-date basis,
utilizing the average cost method in determining the basis of
investments sold. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
Withdrawals:
Withdrawals of securities from the Homestake Mining Company Common Stock
Fund may be made in cash, common stock, or both, and are reported at
market value. Withdrawals from the Asset Allocation Fund, Lifepath
Funds, Neuberger & Berman Guardian Trust Fund, Templeton Foreign Fund,
S&P 500 Stock Fund, Money Market Fund, and Fixed Income Fund are made in
cash.
Net Appreciation (Depreciation) in Fair Value of Investments:
The Plan presents in the statement of changes in net assets available
for benefits the net appreciation (depreciation) in the fair value of
its investments, which consists of realized gains (losses) and the
unrealized appreciation (depreciation).
3. Risks and Uncertainties:
Barclays Global Investors (BGI) manages three collective trust funds
(the Asset Allocation Fund, the LifePath Funds, and the Money Market
Fund) and the S&P 500 Stock mutual fund.
8
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
3. Risks and Uncertainties, continued:
BGI also manages three custom funds, the Confederation Life GIC Fund
(see note 12), the Homestake Mining Stock Fund, and the Fixed Income
Fund. The Fixed Income Fund is a "hybrid" fund that consists of
guaranteed investment contracts and shares of the Income Accumulation
Fund managed by BGI.
Neuberger & Berman Management, Inc. and Templeton, Galbraith &
Hansberger Ltd. manage the Guardian Trust Fund and Foreign Fund,
respectively.
Ultimate Plan performance is dependent upon the ability of the
investment managers to manage the funds.
A significant portion of the Plan's assets is invested in the Homestake
Mining Company Common Stock Fund and is, therefore, subject to
fluctuations in the market value of such stock, which is, in turn,
impacted by the price of gold.
The Plan's assets are invested in collective trust and mutual funds,
and other investment securities. Investments are exposed to various
risks, such as interest rate, market and credit. Due to the level of
risk associated with certain investments and the level of uncertainty
related to changes in the value of such investments, it is possible
that changes in the value of one or more of such investments in the
near term could materially affect participants' account balances, the
amounts reported in the statements of net assets available for Plan
benefits and the statement of changes in net assets available for Plan
benefits.
4. Plan Termination:
Although the Company has not expressed any intent to do so, it has the
right under the Plan and subject to applicable law, to discontinue its
contributions at any time and to terminate the Plan. In the event of
Plan termination, all accumulated plan benefits will be fully vested and
will be distributed to participants based on their respective account
balances.
5. Reclassifications:
Certain reclassifications were made to 1995 balances to conform with the
1996 presentation, with no effect on the net assets available for
benefits or net change in net assets available for benefits, as
previously reported.
9
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
6. Plan Tax Status:
The Plan obtained its latest determination letter in July 1995, in which
the Internal Revenue Service stated that the Plan, as then designed, was
in compliance with Sections 401(a) and 401(k) of the Internal Revenue
Code. The Plan has been amended since receiving the determination
letter; however, the Plan administrator and the Plan's tax counsel are
not aware of circumstances creating a material risk of Plan
disqualification. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
Participants are not subject to federal income taxes on their pre-tax
contributions, Company matching contributions, or investment earnings
allocated to their accounts until withdrawals are made.
7. Related Party Transactions:
Certain Plan investments are units in investment funds managed by the
Trustee. Therefore, these transactions are transactions with
parties-in-interest.
8. Administrative Expenses:
Certain costs associated with administering the Plan are paid directly
by the Company.
10
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
9. Investments
Investments at December 31, 1996 and 1995 are comprised of the following:
<TABLE>
<CAPTION>
Number Value Reported
of Per Value
1996 Units Unit (in thousands)
- ---- ---------- -------- --------------
<S> <C> <C> <C>
Barclays Global Investors Investment Funds, at fair value:
Barclays Global Investors Asset Allocation Fund 455,816 $ 21.51 $ 9,805
Barclays Global Investors Lifepath Funds 446,861 13.32 5,951
Barclays Global Investors Income Accumulation Fund 896,892 13.14 11,785
Barclays Global Investors Money Market Fund 1,064,698 1.00 1,065
---------------
28,606
Mutual Funds, at fair value:
Neuberger & Berman Guardian Trust Fund 105,276 15.87 1,671
Templeton Foreign Fund 129,175 10.36 1,338
Barclays Global Investors S&P 500 Stock Fund 502,128 15.91 7,989
---------------
10,998
Fixed Income Fund, Guaranteed Investment Contracts,
at contract value:
Allstate Life Insurance Company 2,014,618 1.00 2,015
Crown Life Insurance Company 702,059 1.00 702
John Hancock Mutual Life Insurance Company 3,168,621 1.00 3,169
---------------
5,886
Confederation Life Guaranteed Investment Contracts,
at contract value (see Notes 12 and 14) 3,089,453 1.00 3,089
---------------
Homestake Mining Company Stock Fund, at fair value 1,651,940 6.39 10,548
---------------
Participant loans receivable, at book value, which
approximates fair value - - 2,145
---------------
Total investments $ 61,272
===============
</TABLE>
11
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
9. Investments, continued:
<TABLE>
<CAPTION>
Number Value Reported
of Per Value
1995 Units Unit (in thousands)
- ---- ------- --------- --------------
<S> <C> <C> <C>
Wells Fargo Bank Investment Funds, at fair value:
Wells Fargo Asset Allocation Fund 507,334 $ 19.24 $ 9,761
Wells Fargo Lifepath Funds 421,389 11.39-12.93 5,046
Wells Fargo Income Accumulation Fund 839,520 12.42 10,429
--------------
25,236
Mutual Funds, at fair value:
Neuberger & Berman Guardian Trust Fund 102,558 13.81 1,416
Templeton Foreign Fund 43,529 9.19 400
Wells Fargo Stagecoach S&P 500 Stock Fund 442,004 13.44 5,941
---------------
7,757
Fixed Income Fund, Guaranteed Investment Contracts,
at contract value:
Allstate Life Insurance Company 2,014,325 1.00 2,014
Bankers Trust Company 3,416,528 1.00 3,417
Crown Life Insurance Company 1,041,937 1.00 1,042
John Hancock Mutual Life Insurance Company 3,013,143 1.00 3,013
--------------
9,486
Confederation Life Guaranteed Investment Contracts,
at contract value (see Note 12) 3,090,586 1.00 3,091
---------------
Homestake Mining Company Stock Fund, at fair value 1,437,671 6.98 10,029
---------------
Participant loans receivable, at book value, which - - 2,222
---------------
Total investments $ 57,821
===============
</TABLE>
12
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
9. Investments, continued:
All earnings on the investment funds are credited to each fund daily.
These earnings include interest, dividends, and appreciation
(depreciation) in fair value.
The Asset Allocation Fund invests in a changing mix of stocks, bonds,
and money market securities and aims for a high level of total return
over the long term, consistent with reasonable risk.
The Lifepath Funds invest in a changing mix of U.S. and international
stocks, bonds, and money market securities and aim for greater growth
potential in early years and then gradually reduce risk to exposure over
time.
The Neuberger & Berman Guardian Trust Fund is a growth and income fund
that emphasizes investments in stocks of established, high quality
companies considered to be under valued in comparison to stocks of
similar companies.
The Templeton Foreign Fund seeks long-term capital growth through a
flexible policy of investing in stocks and debt obligations of companies
and governments outside the United States.
The S&P 500 Stock Fund is a mutual fund that invests in substantially
the same stocks in substantially the same percentages as the Standard &
Poor's 500 Composite Stock Price Index and seeks to approximate as
closely as practicable the rate of return of that index.
The Money Market Fund invests in high-quality securities maturing in 13
months or less.
The Homestake Mining Company Stock Fund invests in shares of Homestake
Mining Company.
The Fixed Income Fund consists of guaranteed investment contracts
previously purchased by the Plan from bank and insurance companies and
shares in the BGI Income Accumulation Fund.
In accordance with SOP 94-4, the investment contracts are stated at
contract value, which approximates fair value. The average yield of the
contracts for 1996 and 1995 and the crediting interest rate of the
contracts as of December 31, 1996 and 1995 are as follows:
13
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
9. Investments, continued:
<TABLE>
<CAPTION>
Average Yield Crediting Interest Rate
Insurance Co. Contract No. For 1996 For 1995 As of 12/31/96 As of 12/31/95
------------- ------------ -------- --------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Allstate Life GA-5530 5.46 5.46 5.46 5.46
Crown Life 9005866 4.11 4.03 3.98 4.04
John Hancock
Mutual Life GAC-7163 5.16 5.16 5.16 5.16
Bankers Trust 93-613ALP 5.91 5.76 Matured 02/96 5.87
</TABLE>
Guaranteed investment contracts of Confederation Life Insurance Company have
been separated from the Fixed Income Fund into a separate fund, as detailed in
Note 12.
14
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
10. Net Assets Available for Benefits by Investment Type (in
thousands):
At December 31, 1996 and 1995, net assets available for benefits
were held in the following participant-designated investment types:
<TABLE>
<CAPTION>
Barclays Barclays Neuberger
Global Investors Global & Berman
Asset Investors Guardian Templeton
Allocation Lifepath Trust Foreign
Fund Funds Fund Fund
------------ ----------- ------------- ------------
December 31, 1996:
-----------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents - - - -
------------- ------------------- ------------------- --------------
Investments, at fair value:
Fund investments held by
trustee $ 9,805 $ 5,951 $ 1,671 $ 1,338
Common stock of the
Company - - - -
Participant loans
receivable - - - -
------------ ------------------- ------------------- --------------
9,805 5,951 1,671 1,338
Investments, at contract value:
Fund investments held
by trustee - - - -
------------- ------------------- ------------------- -------------
Total assets 9,805 5,951 1,671 1,338
LIABILITIES
Amounts due to brokers
for securities purchased - - - -
------------- ------------------- ------------------- -------------
Net assets available
for benefits $ 9,805 $ 5,951 $ 1,671 $ 1,338
============== =================== =================== ============
</TABLE>
<TABLE>
<CAPTION>
Barclays Barclays Confederation
Global Global Life
Investors Investors Fixed Guaranteed
S&P 500 Money Market Income Investment
Fund Fund Fund Contracts
------------ ----------------- ------------- -------------
December 31, 1996:
------------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents - - $ 12 -
------------ ----------------- -------------- --------------
Investments, at fair value:
Fund investments held by
trustee $ 7,989 $ 1,065 11,785 -
Common stock of the
Company - - - -
Participant loans
receivable - - - -
----------- ----------------- ---------------- ----------------
7,989 1,065 11,785 -
Investments, at contract value:
Fund investments held
by trustee - - 5,886 $ 3,089
------------ ---------------- ---------------- ----------------
Total assets 7,989 1,065 17,683 3,089
LIABILITIES
Amounts due to brokers
for securities purchased - - - -
------------- ---------------- ----------------- ----------------
Net assets available
for benefits $ 7,989 $ 1,065 $ 17,683 $ 3,089
============= ================ ================ ================
</TABLE>
<TABLE>
<CAPTION>
Homestake
Mining
Company Participant Short Term
Stock Loan Investment
Fund Fund Account Total
-------------- ----------- ------------ --------------
December 31, 1996:
------------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 289 - $ 92 $ 393
--------------- ----------- ------------- --------------
Investments, at fair value:
Fund investments held by
trustee - - - 39,604
Common stock of the -
Company 10,548 -
10,548
Participant loans
receivable - $ 2,145 - 2,145
--------------- ------------ -------------- ---------------
10,548 2,145 - 52,297
Investments, at contract value:
Fund investments held
by trustee - - - 8,975
--------------- ------------- --------------- ---------------
Total assets 10,837 2,145 92 61,665
LIABILITIES
Amounts due to brokers
for securities purchased 51 - - 51
---------------- ------------- ------------------- -------------------
Net assets available
for benefits $ 10,786 $ 2,145 $ 92 $ 61,614
================ ============= =================== ===================
</TABLE>
15
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
10. Net Assets Available for Benefits by Investment Type (in thousands),
continued:
<TABLE>
<CAPTION>
Neuberger
Wells Fargo Wells & Berman
Asset Fargo Guardian
Allocation Lifepath Trust
Fund Funds Fund
----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
December 31, 1995:
-----------------
ASSETS
Cash and cash equivalents - - -
----------------- ----------------- ------------------
Investments, at fair value:
Fund investments held by
trustee $ 9,761 $ 5,046 $ 1,416
Common stock of the
Company - - -
Participant loans
receivable - - -
----------------- ----------------- ------------------
9,761 5,046 1,416
Investments, at contract value:
Fund investments held
by trustee - - -
----------------- ----------------- ------------------
Total assets 9,761 5,046 1,416
LIABILITIES
Amounts due to brokers
for securities purchased - - -
----------------- ----------------- ------------------
Net assets available
for benefits $ 9,761 $ 5,046 $ 1,416
================= ================= ==================
</TABLE>
<TABLE>
<CAPTION>
Wells Confederation
Fargo Life
Templeton Stagecoach Fixed Guaranteed
Foreign S&P 500 Income Investment
Fund Fund Fund Contracts
----------------- ----------------- ------------------ ------------------
December 31, 1995:
-----------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents - - $ 11 -
----------------- ----------------- ------------------ ------------------
Investments, at fair value:
Fund investments held by
trustee $ 400 $ 5,941 10,429 -
Common stock of the
Company - - - -
Participant loans
receivable - - - -
----------------- ----------------- ------------------ ------------------
400 5,941 10,429 -
Investments, at contract value:
Fund investments held
by trustee - - 9,486 $ 3,091
----------------- ----------------- ------------------ ------------------
Total assets 400 5,941 19,926 3,091
LIABILITIES
Amounts due to brokers
for securities purchased - - 1 -
----------------- ----------------- ------------------ ------------------
Net assets available
for benefits $ 400 $ 5,941 $ 19,925 $ 3,091
================= ================= ================== ==================
</TABLE>
<TABLE>
<CAPTION>
Homestake
Mining
Company Participant Short Term
Stock Loan Investment
Fund Fund Account Total
----------------- ----------------- ------------------ ----------------
December 31, 1995:
-----------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 576 - $ 20 $ 607
----------------- ----------------- ------------------ ------------------
Investments, at fair value:
Fund investments held by
trustee - - - 32,993
Common stock of the
Company 10,029 - - 10,029
Participant loans
receivable - $ 2,222 - 2,222
----------------- ----------------- ------------------ ------------------
10,029 2,222 - 45,244
Investments, at contract value:
Fund investments held
by trustee - - - 12,577
----------------- ----------------- ------------------ ------------------
Total assets 10,605 2,222 20 58,428
LIABILITIES
Amounts due to brokers
for securities purchased 326 - - 327
----------------- ----------------- ------------------ ------------------
Net assets available
for benefits $ 10,279 $ 2,222 $ 20 $ 58,101
================= ================= ================== ==================
</TABLE>
16
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(in thousands)
11. Changes in Net Assets Available for Benefits by Investment Type:
During the year ended December 31, 1996, changes in net assets available
for benefits by participant-designated investment types were as follows:
<TABLE>
<CAPTION>
Barclays Barclays Neuberger
Global Investors Global & Berman
Asset Investors Guardian Templeton
Allocation Lifepath Trust Foreign
Fund Funds Fund Fund
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Interest and dividends - - - -
Interest on participants' loans - - - -
Mutual Fund Income - - $ 40 $ 56
Net appreciation in the fair value of assets $ 1,061 $ 586 214 104
Contributions:
Company, in cash 308 221 60 45
Participants, in cash 454 353 102 77
Transfers in from other plans - 2 - 12
------------- -------------- ------------ ---------------
Total additions 1,823 1,162 416 294
------------- -------------- ------------ ---------------
Deductions from net assets attributed to:
Net depreciation in the fair value
of investment - - - -
Benefits paid to participants 486 255 29 4
Transfers out to other plans - - - -
-------------- ----------------- -------------- --------------
Total deductions 486 255 29 4
-------------- ----------------- -------------- --------------
Interfund transfers (1,293) (2) (132) 648
-------------- ----------------- -------------- --------------
Net increase (decrease) 44 905 255 938
Net assets available for benefits:
Beginning of year 9,761 5,046 1,416 400
-------------- ----------------- -------------- -------------
End of year $ 9,805 $ 5,951 $ 1,671 $ 1,338
============== ================= ============== =============
</TABLE>
<TABLE>
<CAPTION>
Barclays Barclays Global Confederation
Global Investors Life
Investors Money Fixed Guaranteed
S&P 500 Market Income Investment
Fund Fund Fund Contracts
------------- ---------------- --------------- ------------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Interest and dividends - $ 34 $ 1,064 -
Interest on participants' loans - - - -
Mutual Fund Income $ 269 - - -
Net appreciation in the fair value of assets 1,238 - - -
Contributions:
Company, in cash 304 14 305 -
Participants, in cash 458 54 462 -
Transfers in from other plans 6 47 - -
------------- ----------------- -------------- --------------
Total additions 2,275 $ 149 $ 1,831
------------- ----------------- -------------- --------------
Deductions from net assets attributed to:
Net depreciation in the fair value
of investment - - - $ 1
Benefits paid to participants 493 525 1,991 -
Transfers out to other plans - - 26 -
------------- ----------------- -------------- --------------
Total deductions 493 525 2,017 1
-------------- ----------------- -------------- --------------
Interfund transfers 266 1,441 (2,056) (1)
-------------- ----------------- -------------- --------------
Net increase (decrease) 2,048 1,065 (2,242) (2)
Net assets available for benefits:
Beginning of year 5,941 - 19,925 3,091
-------------- ----------------- -------------- --------------
End of year $ 7,989 $ 1,065 $ 17,683 $ 3,089
============== ================= ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Homestake
Mining
Company Participant Short Term
Stock Loan Investment
Fund Fund Account Total
-------------- ---------------- -------------- ------------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Interest and dividends $ 129 - $ 4 $ 1,231
Interest on participants' loans - $ 201 - 201
Mutual Fund Income - - - 365
Net appreciation in the fair value of assets - - - 3,203
Contributions:
Company, in cash 192 - (36) 1,413
Participants, in cash 367 - - 2,327
Transfers in from other plans 6 - - 73
-------------- ----------------- -------------- -------------
Total additions 694 201 (32) 8,813
-------------- ----------------- -------------- -------------
Deductions from net assets attributed to:
Net depreciation in the fair value
of investment 605 - - 606
Benefits paid to participants 599 166 2 4,550
Transfers out to other plans 118 - - 144
-------------- ----------------- -------------- ------------
Total deductions 1,322 166 2 5,300
-------------- ----------------- -------------- ------------
Interfund transfers 1,135 (112) 106 -
-------------- ----------------- -------------- ------------
Net increase (decrease) 507 (77) 72 3,513
Net assets available for benefits:
Beginning of year 10,279 2,222 20 58,101
--------------- ----------------- -------------- ------------
End of year $ 10,786 $ 2,145 $ 92 $ 61,614
=============== ================= ============== ============
</TABLE>
17
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
12. Confederation Life Guaranteed Investment Contracts:
Confederation Life Insurance Company (CLIC) was seized by insurance
regulators on August 12, 1994, to protect the financial interest of all
policyholders. On August 18, 1994, the Plan suspended withdrawals and
transfers by participants of amounts in the Plan held by CLIC and froze
the value of its CLIC guaranteed investment contracts at their
then-current book values (cost plus accrued interest through August 12,
1994). The Plan had not accrued any interest on these contracts since
they were frozen. These frozen contracts had been segregated from the
Fixed Income Fund into a separate frozen fund.
A Rehabilitation Plan was submitted to the Michigan state court in
July 1996 and it received final approval from the court in November
1996. The Rehabilitation Plan offered several payout options to CLIC
guaranteed investment contract holders.
13. Acceleration of Vesting Percentages:
Due to the cessation of mining at the McLaughlin mine on June 28, 1996,
the employment of a number of Plan participants was terminated during
the second quarter of 1996. In accordance with Plan Amendment No. 4,
effective January 1, 1996, the vesting percentages of all such
McLaughlin participants whose employment was terminated and whose
vesting percentages were less than 100% were accelerated to 100% upon
termination.
14. Subsequent Events:
On November 30, 1996 the Company increased its ownership interest in
the Pinson mine to 50% and the Company became the operator of the
mine. In accordance with the Company undertaking the role of operator,
all Pinson employees became eligible for participation in the Plan
effective March 1, 1997.
In March 1997, in connection with the CLIC Rehabilitation Plan
discussed above, the Homestake Savings Plan elected an option which
provided for payment of the entire balances payable by the end of May
1997. Pursuant to the elected payout, approximately 107% of the August
12, 1994 account balances were returned to the Plan by the end of May
1997.
The Pension and Welfare Benefits Administration ("PWBA"), a division of
the United States Department of Labor, has begun an audit of the
Homestake Mining Company Savings Plan related to the purchase and
subsequent holding of guaranteed investment contracts issued to the
Savings Plan by CLIC. The PWBA asserted that the purchase of one
contract in 1991 and subsequent holding of three contracts from 1991
until the present may not have been consistent with the requirements of
ERISA, and that one or more Savings Plan fiduciaries may be liable to
the Savings Plan for unspecified damages. The investigation is ongoing.
18
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
14. Subsequent Events, continued:
On May 1, 1997, the Plan added a custom fund, the Homestake
PIMCO Total Return Fund, to its investment options. The Fund
holds shares of the PIMCO Total Return Fund - Institutional (a
mutual fund) and some money market securities. The PIMCO Total
Return Fund is a broad market bond fund which invests in a
diversified portfolio of fixed income securities with varying
maturities.
19
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
as of December 31, 1996
<TABLE>
<CAPTION>
(c) Description of
Investment including
(b) Identity of Maturity Date, Rate
Issuer, Borrower, of Interest, (e) Current
Lessor, or Collateral, Par (d) Cost Value
(a) Similar Party or Maturity Value (in thousands) (in thousands)
- --- ------------------ --------------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Allstate Life Insurance Company GIC (maturing 11/12/98, 5.46%) $ 2,015 $ 2,015
Crown Life Insurance Company GIC (maturing 03/03/98, 3.98%) 702 702
John Hancock Mutual Life
Insurance Company GIC (maturing 06/30/98, 5.16%) 3,169 3,169
* Barclays Global Investors Barclays Global Investors Income Accumulation
Fund (896,862 units) 11,827 11,785
Confederation Life Insurance GIC (frozen 08/18/94, originally maturing
Company 01/02/95, 8.70%) 1,051 1,051
GIC (frozen 08/18/94, originally maturing
07/24/95, 9.14%) 1,004 1,004
GIC (frozen 08/18/94, originally maturing
03/15/96, 8.54%) 1,034 1,034
* Barclays Global Investors Barclays Global Investors Asset Allocation Fund
(455,816 units) 8,008 9,805
Barclays Global Investors Lifepath 2000 Fund
(144,837 units) 1,652 1,750
Barclays Global Investors Lifepath 2010 Fund
(107,619 units) 1,293 1,416
Barclays Global Investors Lifepath 2020 Fund
(112,762 units) 1,409 1,573
Barclays Global Investors Lifepath 2030 Fund
(39,475 units) 505 571
Barclays Global Investors Lifepath 2040 Fund
(42,168 units) 560 641
Barclays Global Investors S&P 500 Stock Fund
(502,128 units) 6,906 7,989
Barclays Global Investors Money Market Fund
(1,064,698 units) 1,065 1,065
* Barclays Global Investors Homestake Mining Company Stock Fund
(1,651,940 units) 12,192 10,548
Neuberger & Berman Management, Inc. Neuberger & Berman Guardian Trust
(105,276 units) 1,480 1,671
Franklin Templeton Distributors, Templeton Foreign Fund
Inc.
(129,175 units) 1,244 1,338
* Participant notes Repayable over a term of up to five
years at an interest rate set
at the time of issue of the loan.
Rate during 1996 ranged from
6.9% to 12.3% 2,145 2,145
<FN>
* Represents parties-in-interest to Plan
Note: GIC has been used above as an abbreviation for Guaranteed Investment Contract.
</TABLE>
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1996
(in thousands)
<TABLE>
<CAPTION>
(b) Description of Assets
(a) Identity of (Include Interest Rate and (c) Purchase (d) Selling (e) Lease
Party Involved Maturity in Case of a Loan) Price Price Rental
- -------------- --------------------------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
Barclays Global Investors Homestake Mining Company Stock Fund $ 10,205 - -
- $12,702 -
Barclays Global Investors Fixed Income Fund 17,803 - -
- 16,920 -
</TABLE>
<TABLE>
<CAPTION>
(h) Current
(f) Expenses Value of (i) Net
(b) Description of Assets Incurred Asset on Gain
(a) Identity of (Include Interest Rate and with (g) Cost Transaction or
Party Involved Maturity in Case of a Loan) Transaction of Asset Date (Loss)
- ------------------------- --------------------------- ------------ --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Barclays Global Investors Homestake Mining Company Stock Fund - - - -
- $12,713 $12,702 $ (11)
Barclays Global Investors Fixed Income Fund - - - -
- 16,357 16,920 563
</TABLE>
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in (i) Registration Statement of
Homestake Mining Company (333-17357) and (ii) Post-Effective Amendment No. 5 to
the Registration Statement of Homestake Mining Company on Form S-8 (File No.
2-90903) of our report dated June 16, 1997, on our audits of the financial
statements and financial statement schedules of the Homestake Mining Company
Savings Plan as of December 31, 1996 and 1995, and for the year ended December
31, 1996, which report is included in this Annual Report on Form 11-K.
/s/ Coopers & Lybrand L.L.P.
- ----------------------------
COOPERS & LYBRAND L.L.P.
San Francisco, California
June 18, 1997
