SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
(Amendment No. 4)
-----------------------------
SANTA FE PACIFIC GOLD CORPORATION
(Name of Subject Company)
-----------------------------
HOMESTAKE MINING COMPANY
(Name of Person(s) Filing Statement)
-----------------------------
Common Stock, par value $0.01 per share
(including the associated Preferred Share Purchase Rights)
(Title of Class of Securities)
80217610
(CUSIP Number of Class of Securities)
-----------------------------
Wayne Kirk
Vice President, General Counsel and Corporate Secretary
Homestake Mining Company
650 California Street
San Francisco, California 94108-2788
(415) 981-8150
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
Richard Hall, Esq.
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
(212) 474-1000
THIS AMENDMENT NO. 4 TO SOLICITATION/RECOMMENDATION STATEMENT RELATES
TO A PROPOSED EXCHANGE OFFER BY NEWMONT MINING CORPORATION DESCRIBED
IN ITS REGISTRATION STATEMENT ON FORM S-4 FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION ON JANUARY 7, 1997 (REGISTRATION NO.
333-19335), WHICH OFFER HAS NOT BEEN COMMENCED. BY FILING THIS
AMENDMENT NO. 4 TO SOLICITATION/RECOMMENDATION STATEMENT, HOMESTAKE
MINING COMPANY DOES NOT ADMIT THAT IT IS REQUIRED TO MAKE THIS FILING.
<PAGE>
Homestake Mining Company ("Homestake") hereby amends and
supplements its Solicitation/Recommendation Statement on Schedule
14D-9 (the "Statement") originally filed on January 16, 1997, as
amended by Amendments No. 1, No. 2, and No. 3, with respect to the
proposed offer by Newmont Mining Corporation ("Newmont") to exchange
each share of Santa Fe Pacific Gold Corporation ("Santa Fe") common
stock, $0.01 par value, together with the associated preferred share
purchase rights, for 0.40 of a share of Newmont Common Stock, $1.60
par value.
Item 6. Recent Transactions and Intent with Respect to
Securities.
Item 6 of the Statement is hereby amended to add the
following information at the end thereof:
On February 7, 1997, Homestake Mining Company ("Homestake")
issued a press release announcing its fourth quarter earnings for the
quarter ending December 31, 1996. A copy of the text of Homestake's
press release is attached as Exhibit 10, and is incorporated herein by
reference.
Item 9. Materials to be filed as Exhibits.
Item 9 of the Statement is hereby amended to add the
following Exhibit:
Exhibit 10 - Text of Press Release issued by Homestake on
February 7, 1997.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Amendment No.
4 is true, complete and correct.
HOMESTAKE MINING COMPANY
By: /S/ GENE G. ELAM
Name: Gene G. Elam
Title: Vice President,
Finance and
Chief Financial Officer
Dated: February 7, 1997
<PAGE>
EXHIBIT INDEX
Exhibit 10 - Text of Press Release issued by Homestake on
February 7, 1997.
NEWS RELEASE HOMESTAKE
HOMESTAKE MINING COMPANY
650 California Street
San Francisco, CA 94108
Contact:
Gene G. Elam
Vice President, Finance and
Chief Financial Officer
415-983-8106
Michael A. Steeves
Director, Investor Relations
415-983-8169
HOMESTAKE MINING COMPANY REPORTS FOURTH QUARTER AND FULL
YEAR 1996 EARNINGS AND RECORD 1996 GOLD PRODUCTION
=================================================================
HIGHLIGHTS
o Net income was $30.3 million in both 1996 and 1995.
Operating earnings before income taxes and nonrecurring
items reached $88.7 million in 1996 compared to
$76.4 million in 1995, a 16% increase.
o Record gold production of almost two million ounces in
1996 exceeded the previous record in 1993 by 3%.
o Cash production costs were reduced from $257 per ounce to
$248 per ounce.
o Revenues from gold and ore sales increased 5% to
$712.2 million.
o In December, Homestake announced an agreement to acquire
Santa Fe Pacific Gold Corporation in a stock transaction
currently valued at approximately $2.1 billion.
=================================================================
San Francisco, CA, February 7, 1997 -- Homestake Mining Company
(NYSE:HM) today reported net income of $30.3 million or $.21 per
share in 1996 compared to net income of $30.3 million or $.22 per
share in 1995. Earnings in 1996 include $10.4 million ($.07 per
share) of net nonrecurring gains while earnings in 1995 included
$6.7 million ($.05 per share) of similar gains.
<PAGE>
Net income in the fourth quarter of 1996 was $2.4 million or $.02
per share compared to net income of $7.6 million or $.05 per
share in 1995. Pretax charges to fourth quarter earnings in 1996
include a writedown of $9 million in the carrying value of
investments in mining companies, recognition of an $8.7 million
foreign exchange loss related to the Company's investment in its
wholly-owned Canadian subsidiary, and $3.4 million of costs
related to the Company's proposed merger with Santa Fe Pacific
Gold Corporation. Offsetting these charges were net credits of
$23.2 million, principally from a reduction of prior years'
income tax accruals for certain contingencies which have now been
resolved. Net income in the fourth quarter of 1995 includes net
nonrecurring gains of $3.7 million or $.03 per share.
Homestake increased its gold production to a record level of
1,968,000 ounces in 1996, 5% more than the 1,877,000 ounces it
produced in 1995. Significantly higher production from the Eskay
Creek and Snip mines in British Columbia and from the Super Pit
in Western Australia more than compensated for lower production
at the McLaughlin mine in California, where low-grade stockpiles
are being processed, and the Nickel Plate mine in Canada, which
is now closed and being reclaimed. Total cash production costs
were reduced by 4% to $248 per ounce in 1996 compared to $257 per
ounce in 1995.
Revenues from gold and ore sales increased 5% to $712.2 million
in 1996 compared to $675.2 million in 1995. The increase was due
to an increase in the number of ounces sold and to a slightly
higher realized gold price. The Company sold 1,952,000 ounces of
gold in 1996 at an average price of $389 per ounce. In 1995,
Homestake sold 1,873,000 ounces of gold at an average price of
$386 per ounce.
Jack E. Thompson, President and Chief Executive Officer said "We
are very pleased with the performance of all of our operations
during 1996. Increased production and lower production costs in
the fourth quarter compared to 1995 continued the favorable trend
we established earlier in the year. We continue to generate
significant cash flow to fund a growing exploration program and
necessary capital investments. These operations provide a solid
base for future growth, which we expect to accelerate by the
acquisition of Santa Fe Pacific Gold. This acquisition will
create a new leading international gold company with the asset
base, financial strength and operating skills to pursue an
aggressive growth strategy."
<PAGE>
Homestake's operating earnings in 1996 increased by 16% to
$88.7 million as a result of higher realized gold prices, an
increase in the number of ounces of gold sold and a decrease in
per-ounce cash production costs. This increase occured despite
higher depreciation charges, a sharp increase in exploration
spending and reduced earnings from sulphur operations.
Exploration expenses increased by 65% to $45.4 million as the
Company continued to place a high priority on evaluating high-
quality exploration prospects and potential mine development
projects. Significant amounts continue to be spent at the Agua
de la Falda property in Chile, at the Ruby Hill mine in Nevada
and on a number of other promising prospects.
The Company reported an effective income and mining tax rate of
37% in 1996 compared to a rate of 46% in 1995. The lower tax
rate in 1996 primarily was due to a $24 million reduction in the
Company's accrual for prior years' income taxes, partially offset
by the effect of incurring substantial exploration expenses,
primarily in South America, which are not deductible for United
States income tax purposes and for which a foreign income tax
benefit cannot be recognized currently.
Homestake's proven and probable gold reserves declined by 5%
during 1996 to 20.4 million contained ounces. Reserve additions
occurred at Kalgoorlie in Western Australia and at the Snip mine
in Canada, where the Company's 51% owned subsidiary Prime
Resources Group, Inc. purchased an additional interest in this
operation. Exploration success at the Eskay Creek mine also
added to reserves. However, these additions were not sufficient
to replace all of the ounces which were mined by the Company
during the year. In addition to its proven and probable gold
reserves, Homestake added significantly to the amount of gold
contained in its mineralized material not yet classified as
reserves. Gold in mineralized material increased 11% to 13.1
million ounces in 1996 from 11.8 million ounces in 1995.
GOLD OPERATIONS
Production of precious metals continued at a high level at the
Company's Eskay Creek mine in British Columbia. During 1996, the
mine sold 116,000 tons of ore containing 211,000 ounces of gold
and 12,054,000 ounces of silver, equivalent to approximately
372,000 ounces of gold. In 1995, 104,000 tons of ore containing
197,000 ounces of gold and 9,945,000 ounces of silver, or 331,000
ounces of gold equivalent, were shipped to smelters. Total cash
costs, including third-party smelter charges, were $170 per
equivalent ounce of gold in 1996 compared to $185 per equivalent
ounce in 1995.
<PAGE>
Homestake's share of gold production from the Super Pit and the
Mt. Charlotte mines in Australia increased by 57,000 ounces in
1996, primarily as the result of a 19% increase in tons of ore
milled. During the year, the new Fimiston mill facilities were
integrated successfully with the existing plant, and are now
operating in excess of design capacity.
Production at the McLaughlin mine in Northern California declined
by 56,000 ounces to 186,000 ounces during 1996. Mining at the
open pit ceased in June as the orebody has been mined out.
Production of gold from low-grade stockpiles will continue for
another seven years. During 1996, the Company sold for future
delivery 680,000 ounces of the gold it expects to produce from
the stockpiles. The average price to be realized from these
sales will be $426 per ounce, including $385 per ounce for the
120,000 ounces sold for delivery in 1997. The forward sales were
made to ensure recovery of cash production costs, remaining
capital costs and reclamation expenses.
Production of gold from the Snip mine in British Columbia
increased by 51,000 ounces compared to 1995, principally as a
result of Prime Resources' April, 1996 purchase of the 60% of the
mine it did not own already.
Homestake Mining Company is an international gold mining company
with substantial operations and exploration in the United States,
Canada and Australia. Homestake also has active exploration
programs in the Andes, Venezuela, French Guiana, Brazil and
elsewhere in Latin America, and development and/or evaluation
projects in Chile, Russia and Bulgaria.
Statements contained in this press release which are not historical
facts are forward-looking statements as that item is defined in the
Private Securities Litigation Reform Act of 1995. Such forward-
looking statements are subject to risks and uncertainties which
could cause actual results to differ materially from estimated
results. Such risks and uncertainties are detailed in the Company's
filings with the Securities and Exchange Commission.
<PAGE>
Homestake Mining Company
Statements of Consolidated Income
(in thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
1996 1995 1996 1995
Revenues
Gold and ore sales $ 170,495 $ 172,921 $ 712,186 $675,222
Sulphur and oil sales 7,744 8,919 30,749 40,620
Interest 3,808 4,051 15,054 16,737
Equity earnings 902 471 1,588 2,155
Other (3,996) 3,053 7,359 11,631
178,953 189,415 766,936 746,365
Costs and expenses
Production costs 113,829 126,261 475,333 481,886
Deprec.& depl 28,814 25,736 112,353 99,602
Admin. & general 9,161 8,306 36,965 37,283
Exploration 15,855 8,154 45,382 27,541
Interest expense 2,670 2,973 10,644 11,297
Other 13,271 1,135 14,575 3,290
183,600 172,565 695,252 660,899
Income before taxes
and minority int (4,647) 16,850 71,684 85,466
Income & mining taxes 11,376 (6,050) (26,333) (39,141)
Minority interests (4,304) (3,157) (15,070) (15,998)
Net income $ 2,425 $ 7,643 $ 30,281 $ 30,327
Net income per share $ 0.02 $ 0.05 $ 0.21 $ 0.22
Average shares
outstanding 146,672 138,793 146,311 138,117
<PAGE>
Homestake Mining Company
Consolidated Balance Sheets
(in thousands)
December 31, December 31,
1996 1995
Assets
Cash and short-term investments $ 219,757 $ 212,373
Other current assets 159,591 156,344
Property, plant and equipment-net 1,007,030 846,776
Other assets 95,730 106,140
Total $1,482,108 $1,321,633
Liabilities and Shareholders' Equity
Current liabilities $ 116,731 $ 98,421
Long-term debt 185,000 185,000
Other long-term liabilities 114,168 120,418
Deferred income and mining taxes 201,454 189,925
Minority interests 96,203 92,012
Shareholders' equity 768,552 635,857
Total $1,482,108 $1,321,633
<PAGE>
Homestake Mining Company
Statements of Consolidated Cash Flow
(in thousands)
Year Ended
December 31,
1996 1995
Net income $ 30,281 $ 30,327
Reconciliation to net cash provided
by operations:
Depreciation, depletion and
amortization 112,353 99,602
Deferred taxes, minority interests
and other 22,893 32,891
Gains on asset disposals (3,836) (1,969)
Effect of changes in operating working
capital items 18,687 (7,394)
Net cash flows provided by operations 180,378 153,457
Capital additions (105,923) (80,979)
Proceeds from asset sales 16,141 13,295
Change in short-term investments (63,742) 33,063
Purchase of HGAL minority interests (6,435) (16,714)
Purchase of interest in Snip mine (39,279) -
Investments in mining companies (12,224) (37,314)
Other 3,264 3,296
Total investment activities (208,198) (85,353)
Dividends paid - Homestake (29,341) (27,587)
Dividends paid - Prime minority
interests (2,205) -
Common stock issued 2,599 2,886
Total financing activities (28,947) (24,701)
Effect of exchange rate
changes on cash 409 (3,147)
Net increase (decrease) in cash
and equivalents $ (56,358) $ 40,256
<PAGE>
Homestake Mining Company
Gold Production (including Minority Interests)
Ounces in Thousands
Ownership Percentage in (parenthesis)
Three Months Ended Year Ended
December 31, December 31,
1996 1995 1996 1995
UNITED STATES
Homestake (100) 100.8 111.4 407.3 402.9
McLaughlin (100) 32.2 63.0 185.5 241.8
Round Mountain (25) 24.3 22.4 102.7 86.1
Pinson (50) (a) 4.4 3.5 12.1 12.6
Marigold (33) 7.7 5.7 24.5 23.2
Santa Fe (100) - 1.3 - 16.7
CANADA
Eskay Creek (100)(b) 90.6 86.2 372.3 331.3
Williams (50) 56.2 49.7 205.5 202.6
David Bell (50) 25.5 19.7 97.7 79.4
Quarter Claim (25) 2.9 1.5 11.4 7.1
Nickel Plate (100) 2.3 26.5 70.2 91.4
Snip (100) (c) 32.0 11.8 101.8 51.3
AUSTRALIA
Kalgoorlie (50) 109.5 72.7 368.8 311.4
CHILE
El Hueso (100) 1.6 3.1 8.3 19.6
TOTAL PRODUCTION 490.0 478.5 1,968.1 1,877.4
Minority Interests (60.5) (60.9) (234.2) (245.7)
HOMESTAKE'S SHARE 429.5 417.6 1,733.9 1,631.7
(a) Homestake increased its interest in the Pinson mine from
26.3% to 50% in December 1996.
(b) Ounces produced are expressed on a gold equivalent basis and
include 51,200 (44,500 in 1995) payable ounces of gold and
3.1 million (3.0 million in 1995) payable ounces of silver
contained in ore sold to smelters in the fourth quarter, and
211,300 (196,500 in 1995) payable ounces of gold and 12.1
million (9.9 million in 1995) payable ounces of silver
contained in ore sold to smelters in the year-to-date period.
<PAGE>
(c) Includes ounces of gold contained in dore and concentrates.
Prime's ownership percentage in the Snip mine increased from
40% to 100% effective April 30, 1996.
<PAGE>
Homestake Mining Company
Total Cash Costs (a)
(Dollars per Ounce)
Three Months Ended Year Ended
December 31, December 31,
1996 1995 1996 1995
UNITED STATES
Homestake $320 $304 $304 $303
McLaughlin 283 256 250 242
Round Mountain 265 264 256 254
Pinson 329 314 369 322
Marigold 236 282 267 254
Santa Fe - 99 - 139
CANADA
Eskay Creek (b) 171 187 170 185
Williams 206 220 222 222
David Bell 176 217 172 203
Quarter Claim 169 168 167 167
Nickel Plate 526 391 347 379
Snip (b) 222 179 190 176
AUSTRALIA
Kalgoorlie 269 344 291 296
CHILE
El Hueso 298 403 275 403
TOTAL HOMESTAKE $248 $270 $248 $257
(a) Effective January 1, 1996 Homestake adopted the "Gold
Institute Production Cost Standard" for reporting per
ounce production costs.
(b) For comparison purposes, total cash costs per ounce
include estimated third-party costs incurred by smelter
owners and others to produce marketable gold and silver.
<PAGE>
Homestake Mining Company
Proven And Probable Gold Reserves (a)
December 31,1996
Grade Contained
Tons Ounces Ounces
(000) Per Ton (000)
UNITED STATES
Homestake 23,754 0.196 4,662
Round Mountain 119,127 0.019 2,263
McLaughlin 16,627 0.063 1,048
Ruby Hill 7,616 0.099 755
Other 7,304 0.040 295
CANADA
Williams 17,725 0.146 2,585
Eskay Creek 707 1.732 1,224
David Bell 2,787 0.291 811
Other 420 0.464 195
AUSTRALIA
Mt. Charlotte 13,169 0.070 924
Super Pit and other 85,126 0.065 5,522
CHILE
Agua de la Falda 526 0.181 95
-------
20,379
=======
(a) Homestake's proportionate interest, excluding minority
interests.
<PAGE>
Homestake Mining Company
Mineralized Material - Gold (a)(b)
December 31,1996
Grade Contained
Tons Ounces Ounces
(000) Per Ton (000)
UNITED STATES
Homestake 23,993 0.173 4,148
Round Mountain 26,479 0.015 391
Ruby Hill 9,200 0.067 614
CANADA
Williams 4,313 0.121 524
Eskay Creek 141 0.541 76
George Lake (c) 2,572 0.322 829
AUSTRALIA
Mt. Charlotte 14,235 0.074 1,054
Super Pit and other 68,647 0.073 5,003
CHILE
Agua de la Falda 3,054 0.158 483
------
13,122
======
<PAGE>
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS
OF HOMESTAKE MINING COMPANY AND OTHER REPRESENTATIVES
OF HOMESTAKE MINING COMPANY WHO MAY COMMUNICATE WITH
HOMESTAKE AND SANTA FE PACIFIC GOLD CORPORATION
SHAREHOLDERS
The following is information concerning the directors and
executive officers of Homestake Mining Company and other
representatives of Homestake ("Homestake") who may communicate
with Homestake and Santa Fe Pacific Gold Corporation ("Santa Fe")
shareholders with respect to (i) Homestake's planned combination
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, will be converted into the
right to receive 1.115 shares of Homestake Common Stock, $1.00
par value (the "Combination") and (ii) the proposed offer by
Newmont Mining Corporation ("Newmont") disclosed in the
preliminary prospectus contained in the Registration Statement on
Form S-4 of Newmont that was filed with the Securities and
Exchange Commission on January 7, 1997 (Registration No. 333-
19335), to exchange each outstanding share of Santa Fe Common
Stock for 0.40 of a share of Newmont Common Stock, $1.60 par
value. Newmont's proposed offer has not been commenced.
Newmont's Registration Statement states that its 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.
Directors and Officers of Homestake
Name and Business Address Present Position with Homestake or
Other Principal Occupation or Employment
M. Norman Anderson
N Anderson & Associates 502-455 Granville Street
Vancouver, V6C1V2
Director, Homestake Mining Company; Former Chairman International
Corona Corporation; Mining Industry Consultant.
Jan P. Berger
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Treasurer, Homestake Mining Company.
<PAGE>
Michael L. Carroll
Homestake Mining Company 650 California Street
San Francisco, CA 94108-2788
Director of Taxes and Assistant Secretary,
Homestake Mining Company.
Robert H. Clark, Jr.
529 Fifth Avenue Suite 1600 New York, NY 10017
Director, Homestake Mining Company; President and Chief Executive
Officer, Case, Pomeroy & Company, Inc.
Harry M. Conger
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Director and Chairman of the Board,Homestake Mining Company.
G. Robert Durham
943 Seddon Cove Way
Tampa, FL 33602
Director, Homestake Mining Company; Former Chairman and Chief
Executive Officer of Walters Industries, Inc. and Former Chairman
and President of Phelps Dodge Corporation.
Gene G. Elam
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Vice President, Finance and Chief Financial Officer, Homestake
Mining Company.
Douglas W. Fuerstenau
University of California, Berkeley 477 Evans Hall No. 1760
Berkeley, CA 94720
Director, Homestake Mining Company; Professor in the Graduate
School, Department of Materials Science and
Mineral Engineering, University of California, Berkeley.
Dennis B. Goldstein
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Corporate Counsel and Assistant Secretary,
Homestake Mining Company.
Lee A. Graber
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Vice President, Corporate Development,
Homestake Mining Company.
<PAGE>
Henry G. Grundstedt
P.O. Box 105 Umpqua, OR 97486-0105
Director, Homestake Mining Company; Former Senior Vice President,
Capital Guardian Trust.
Fred Hewett
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Assistant Controller, Homestake Mining Company.
William A. Humphrey
Homestake Mining Company
650 California StreetSan Francisco, CA 94108-2788
Director, Vice Chairman of the Board, Former President and Chief
Operating Officer, Homestake Mining Company.
Robert K. Jaedicke
Graduate School of Business
Stanford University
Stanford, CA 94305-5015
Director, Homestake Mining Company; Professor (Emeritus) of
Accounting Graduate School of Business, Stanford University.
Wayne Kirk
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Vice President, General Counsel and Corporate Secretary,
Homestake Mining Company.
Gillyeard J. Leathley
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Vice President, Operations, Homestake Mining Company.
William F. Lindqvist
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Vice President, Exploration, Homestake Mining Company.
John Neerhout, Jr.
15 Peninsula Road
Belvedere, CA 94920
Director, Homestake Mining Company; Former Executive Vice
President and Director of Bechtel Group Inc.
<PAGE>
Ronald D. Parker
1000-700 W. Pender Street
Vancouver, BC V6C 168 CANADA
Vice President, Canada, Homestake Mining Company.
David W. Peat
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Vice President and Controller, Homestake Mining Company.
Stuart T. Peeler
Casa Codorniz
POB 35852
Tucson, AZ 85740
Director, Homestake Mining Company;
Petroleum Industry Consultant.
Carol A. Rae
13117 N. Creekview Road
Rapid City, SD 57702
Director, Homestake Mining Company;
Former President and Chief Executive Officer, Magnum Diamond
Corporation.
Berne A. Schepman
The Adair Company
1670 South Amphlett Blvd.
Suite 214 San Mateo, CA 94402
Director, Homestake Mining Company; President,The Adair Company
and Russian Technology Group.
Richard A. Tastula
9th Floor
2 Mill Street
Perth, WA 6000
Vice President, Australia, Homestake Mining Company.
Jack E. Thompson
Homestake Mining Company
650 California StreetSan Francisco, CA 94108-2788
Director, President and Chief Executive Officer,
Homestake Mining Company.
Thomas H. Wong
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Assistant Treasurer and Assistant Secretary,
Homestake Mining Company.
<PAGE>
On November 17, 1996, Homestake and Santa Fe entered into
a confidentiality agreement pursuant to which, among other
things, each party agreed to protect the confidential and
proprietary information and data provided to each other in
connection with the evaluation of one or more business
transactions. On December 8, 1996, Homestake, Santa Fe and HMGLD
Corp, a wholly-owned subsidiary of Homestake, entered into an
Agreement and Plan of Merger pursuant to which the Combination
will be consummated. On January 9, 1997, Homestake purchased 100
shares of Santa Fe common stock. In addition, the following
individuals named above own the following shares of Santa Fe
common stock, all of which has been owned by such individuals for
more than 60 days: Mr. Peeler - 10,300 shares; Mr. Elam - 2,000
shares; and Mr. Graber - 1,000 shares.
At the effective time (the "Effective Time") of the
Combination, five members of the Homestake Board will continue as
directors of Homestake. The other eight members of the Homestake
Board will voluntarily resign as directors of Homestake. The
Agreement provides that at the Effective Time, Mr. Thompson will
become Homestake's Chairman of the Board and Chief Executive Officer.
A total of ten Homestake management personnel, including
Messrs. Thompson, Elam, Kirk, Leathley and Lindqvist, have
severance agreements with Homestake under which they are entitled
to receive benefits in the event of a change of control followed
by certain events. The Combination is a change of control for
purposes of these severance agreements. Under the severance
agreements, entitlement to benefits arises if, within three years
following the consummation of the Combination, such person's
employment is terminated or such person elects to terminate his
employment following (i) a reduction in salary or certain
benefits, (ii) a change in location of employment, (iii) a change
in position, duties, responsibilities or status inconsistent with
such person's prior position, or (iv) a reduction in
responsibilities, title or office as in effect just before the
consummation of the Combination. Benefits consist of (i) a lump
sum payment equal to two times such person's highest annual
salary and bonus (including deferred compensation) during the
three years prior to termination, (ii) continuation of
participation in insurance and certain other fringe benefits for
two years, (iii) continued vesting of stock options, and (iv)
relocation assistance. Such benefits are in lieu of severance
benefits otherwise payable under Homestake's general severance
policy.
<PAGE>
The same ten management personnel are also participants in
Homestake's Executive Supplemental Retirement Plan (the
"Homestake ESRP"). The Homestake ESRP provides that
participating employees accrue retirement benefits at the rate of
4 1/3% times years of service up to a maximum of 15 years.
Service credit is then multiplied by average monthly compensation
during the 36 consecutive months of highest compensation (salary
and bonus) to determine a monthly retirement benefit. Benefits
are payable on retirement at age 62 after 10 continuous years of
service, with provision for early retirement between ages 55 and
62. Within two years following the Combination, if any
participant's employment is terminated by Homestake or by the
participant for any reason, such participant will fully vest in
the maximum benefits payable under the Homestake ESRP to the
extent such participant is not already fully vested, and will be
entitled to commence receiving such benefits at age 55. Benefits
payable under the Homestake ESRP are reduced to the extent of
retirement benefits otherwise payable under any other Homestake
retirement plan (except the Homestake Mining Company Savings Plan).
Homestake has a deferred compensation plan under which 23
eligible employees and the directors are entitled to defer
receipt of compensation. Deferred compensation earns interest at
rates determined under the plan, with a higher rate equal to 120%
of the regular rate (the "Preferred Rate") for persons who have
been participants for more than five years. Under the deferred
compensation plan, following the Combination, all deferred
compensation will earn interest at the Preferred Rate.
Other Representatives of Homestake Who May Communicate
with Homestake and Santa Fe Shareholders
Present Principal
Occupation or Employment
Robert A. Pilkington....................... Managing Director
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, NY 10022
James C. Katzman............................ Vice President
Dillon, Read & Co. Inc.
535 Madisoin Avenue
New York, NY 10022
<PAGE>
Homestake has retained Dillon, Read & Co. Inc. ("Dillon
Read") to act as its financial advisor in connection with the
Combination and related matters. Pursuant to an engagement
letter dated as of November 21, 1996, between Homestake and
Dillon Read, Homestake has agreed to pay Dillon Read a fee of
0.33% of the equity consideration in the Combination, subject to
a maximum fee of $6,500,000, for services provided in connection
with the Combination. Of this amount, $2,250,000 was paid upon
the announcement by Homestake of the execution of the Agreement;
the payment of the balance is contingent upon the consummation of
the merger. Homestake has also agreed to reimburse Dillon Read
for the expenses reasonably incurred by it in connection with its
engagement (including reasonable counsel fees) and to indemnify
Dillon Read and its officers, directors, employees, agents and
controlling persons against certain expenses, losses, claims,
damages or liabilities in connection with its services, including
those arising under the federal securities laws. In the past,
Dillon Read has provided investment banking services to Homestake
and has received customary compensation for such services. In
the ordinary course of business, Dillon Read trades the
securities of Homestake and 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.
This information is being furnished by Homestake to
Homestake and Santa Fe shareholders pursuant to Rule 14a-12 under
the Securities Exchange Act of 1934, as amended, in response to
the proposed Newmont exchange offer and Newmont's proposed
solicitation of proxies. This information is not being furnished
by Santa Fe or its Board of Directors.
