HOMESTAKE MINING CO /DE/, 8-K, 1997-01-16

HOMESTAKE MINING CO /DE/
8-K, 1997-01-16
GOLD AND SILVER ORES

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<PAGE> 1

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

JANUARY 15, 1997
(DATE OF EARLIEST EVENT REPORTED)

HOMESTAKE MINING COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 1-8736 94108-2788
(STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)

650 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94108-2788
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICE) (ZIP CODE)
</TABLE>

Registrant's telephone number, including area code: (415) 981-8150

Exhibit index is on page 4 of this filing
<PAGE> 2

ITEM 5. OTHER EVENTS

On January 15, 1997, Homestake Mining Company ("Homestake"), in response to
Newmont Mining Corporation's ("Newmont") proposed offer to purchase each
outstanding share of Santa Fe Pacific Gold Corporation ("Santa Fe") Common Stock
and Newmont's proposed solicitation of Santa Fe shareholders to vote against the
combination of Homestake and Santa Fe, distributed a letter to Santa Fe
shareholders dated January 14, 1997, and a letter to Homestake shareholders
dated January 14, 1997 and gave a slide presentation to Homestake and Santa Fe
shareholders. Copies of the Homestake letter to Santa Fe shareholders, the
Homestake letter to Homestake shareholders and the slide presentation are filed
as Exhibits 20(a), 20(b) and 20(c), respectively, and are incorporated herein by
reference.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.

<TABLE>
<S> <C>
20(a) Letter dated January 14, 1997, from Homestake to Santa Fe shareholders.

20(b) Letter dated January 14, 1997, from Homestake to Homestake shareholders.

Homestake management slide presentation to Homestake and Santa Fe
20(c) shareholders.
</TABLE>
<PAGE> 3

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.

HOMESTAKE MINING COMPANY,

By: /s/ JACK THOMPSON

----------------------------------
Name: Jack Thompson
Title: President and Chief
Executive Officer

DATED: January 15, 1997
<PAGE> 4

EXHIBIT INDEX

<TABLE>
<S> <C>
Exhibit 20(a) Letter dated January 14, 1997, from Homestake to Santa Fe shareholders.

Exhibit 20(b) Letter dated January 14, 1997, from Homestake to Homestake shareholders.

Homestake management slide presentation to Homestake and Santa Fe
Exhibit 20(c) shareholders.
</TABLE>

<PAGE> 1

[Homestake Logo]
HOMESTAKE MINING COMPANY
650 California Street
San Francisco, CA 94108
Phone: 415/981-8150
Fax: 415/397-5038

January 14, 1997

Dear Santa Fe Shareholder:

On December 8, 1996, Santa Fe Pacific Gold Corporation entered into a definitive
agreement to combine with Homestake Mining Company, a leading gold mining
company for 120 years. Under this definitive agreement, unanimously approved by
both Boards, your Santa Fe shares will be converted into the right to receive
1.115 Homestake shares per Santa Fe share.

Santa Fe and Homestake shareholders would each own 50% of the new Homestake -- a
revitalized company with substantial potential for long-term share price
appreciation.

On January 7, 1997, Newmont Mining Company announced its intention to make a
hostile exchange offer for your shares, offering 0.4 Newmont shares per Santa Fe
share. In so doing, Newmont made many statements we believe are inaccurate and
misleading about the Homestake-Santa Fe combination and the purported benefits
of Newmont's highly conditional offer.

The purpose of this letter is to set the record straight -- AND EXPLAIN WHY WE
BELIEVE A HOMESTAKE-SANTA FE COMBINATION WILL DELIVER FAR MORE LONG-TERM VALUE
TO YOU.

SMALL DIFFERENCE IN SHORT-TERM VALUE

Newmont is trumpeting the higher current value of its offer. However, both are
stock offers with fixed exchange ratios. The value of these offers can change
greatly in short periods of time. INDEED, THE VALUE DIFFERENTIAL BETWEEN THE TWO
OFFERS HAS ALREADY ERODED SHARPLY TO ONLY $0.71 PER SHARE TODAY -- AND COULD
EASILY DISAPPEAR OVERNIGHT FROM SMALL CHANGES IN THE PRICES OF HOMESTAKE AND
NEWMONT SHARES.

It will be several months before either transaction is completed. During this
time, the prices of both stocks are likely to fluctuate based on changes in gold
prices, the market's assessment of the probability of either transaction being
consummated, general market conditions and other factors.

We believe you should evaluate the two offers based on which you think will
deliver more long-term value. ON THAT BASIS, WE HAVE NO DOUBT THAT HOMESTAKE
OFFERS FAR GREATER APPRECIATION POTENTIAL AS THE MARKET RECOGNIZES OUR IMPROVED
FUNDAMENTALS.

HOMESTAKE OFFERS GREATER LONG-TERM VALUE

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
HOMESTAKE NEWMONT
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Ownership Stake in Combined Company....................... 50% 35%
- ------------------------------------------------------------------------------------------------
Current Market Value Per Ounce of Reserves................ $95 per ounce $157 per ounce
- ------------------------------------------------------------------------------------------------
Effect on Earnings Per Share of combination in 1997 and
1998 (excluding transaction costs, based on $400
gold).................................................. Accretive Dilutive
- ------------------------------------------------------------------------------------------------
Effect on Cash Flow Per Share of combination in 1997 and
1998 (excluding transaction costs, based on $400
gold).................................................. Accretive Dilutive
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2

There is clearly vast potential in Santa Fe's mines and exploration properties,
especially in Nevada. With Homestake, Santa Fe shareholders will own 50% of the
combined company, compared to only 35% under the Newmont proposal. A combination
with Homestake will allow you to share equally with Homestake shareholders in
the upside. In contrast, under the Newmont proposal, Newmont shareholders will
enjoy approximately two-thirds of the upside.

In addition, Homestake will be paying you with stock now valued at only $95 per
ounce of reserves. In contrast, Newmont proposes to pay you with stock now
valued at $157 per ounce of reserves, approximately equal to the S&P Gold Index
average. If Homestake can close only half of this valuation gap, the value of
the Homestake shares you receive will far exceed the value of the Newmont shares
you would receive under its offer. We have never expected a "rerating" to be
justified by size alone -- but rather by our new fundamentals and improved
performance.

Despite what Newmont says, acquiring Santa Fe will be accretive to Homestake's
expected cash flow and earnings per share starting in 1997 (before one-time
transaction costs). By Newmont's own admission, their proposed combination with
Santa Fe would be dilutive to both their cash flow and earnings per share in
1997 and 1998.

HOMESTAKE CAN MAKE MORE OF SANTA FE'S ASSETS
- ----------------------------------------------------------------------

Homestake and Newmont agree that the long-term value in Santa Fe's principal
mines is locked up in complex refractory ores and that expertise in treating
these ores is essential to realizing that value. We also agree that underground
mining is rapidly increasing in importance and that exploration skills will be
critical to developing Santa Fe's Nevada assets. Homestake has a substantial
edge in all three of these key areas.

TREATMENT OF COMPLEX ORES
- ------------------------------

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
HOMESTAKE NEWMONT
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Autoclave Experience..................................... 12 years None
- ----------------------------------------------------------------------------------------------
Roasting Experience...................................... 21 years 1 year
- ----------------------------------------------------------------------------------------------
</TABLE>

WE BELIEVE HOMESTAKE HAS A SIGNIFICANT ADVANTAGE OVER NEWMONT IN THE TREATMENT
OF COMPLEX ORES, INCLUDING AUTOCLAVING AND ROASTING. Santa Fe has installed
autoclaves at the Twin Creeks and Lone Tree mines using technology pioneered by
Homestake at our McLaughlin mine. Processing the complex refractory ores at
these mines will be technologically challenging and require superior autoclaving
know-how. Homestake's 12 years of autoclaving experience is unmatched in the
mining industry. In contrast, Newmont has no autoclaving experience at all.

Homestake has 21 years of experience in roasting, another key technology needed
to treat refractory ores. Newmont is a newcomer to roasting. Indeed, its new
roaster at Carlin uses the technology we pioneered at our Kalgoorlie operations
in 1989.

Furthermore, biotechnology is readily available. None of the industry's six
commercial bioleaching plants use Newmont's technology. In fact, Newmont calls
its facility a "demonstration plant" -- with no commercial production to date.
Homestake also has more experience in smelting and other approaches to treating
complex ores.
<PAGE> 3

UNDERGROUND MINING
- -----------------------

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
HOMESTAKE NEWMONT
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Underground Mining Experience................ 120 years 2 years
- -----------------------------------------------------------------------------------------------
Number of Underground Mines.................. 6 1
- -----------------------------------------------------------------------------------------------
Ore Mined Underground in 1995................ 7.5 million tons 0.5 million tons
- -----------------------------------------------------------------------------------------------
</TABLE>

UNDERGROUND MINING IS THE WAY OF THE FUTURE IN NEVADA BECAUSE THE EASY, SURFACE
MINING OPPORTUNITIES ARE RAPIDLY DIMINISHING. OUR ADVANTAGE OVER NEWMONT IN THIS
AREA IS UNQUESTIONED. Homestake has 120 years of continuous underground mining
experience, using virtually every technique available in mines up to 8,000 feet
deep. Newmont has had only two years of recent underground mining experience.

EXPLORATION
- ------------

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
HOMESTAKE NEWMONT
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Exploration Program................... Accelerating Stalled
- ----------------------------------------------------------------------------------------------
Nevada Discoveries.................... Ruby Hill (1994) None except at Carlin
- ----------------------------------------------------------------------------------------------
</TABLE>

HOMESTAKE IS ON AN ACCELERATING PATH OF EXPLORATION SUCCESS WHILE NEWMONT'S
EXPLORATION EFFORTS HAVE STALLED. Homestake has put in place a world-wide
exploration team with proven experience in discovering gold in diverse
geological settings. Our recent discoveries include the soon-to-open Ruby Hill
mine in Nevada (1994) and the growing resource at Agua de la Falda in Chile
(1996), where production will begin in April 1997.

In stark contrast, Newmont's exploration efforts have stalled, especially in
Nevada, where the most significant discoveries in recent years have come from
Newmont's competitors. In Nevada, Newmont has added only 200,000 ounces of
reserves (net of production) since 1989, a nominal 1% increase. It is a fact
that in Nevada, Newmont has not had a single significant discovery outside the
Carlin Trend despite 30 years of trying.

HOMESTAKE-SANTA FE WILL BE FINANCIALLY STRONGER

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
HOMESTAKE/ NEWMONT/
AS OF 9/30/96 SANTA FE SANTA FE
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
$580
Total Debt................................................ million $1.04 billion
- -----------------------------------------------------------------------------------------------
$312
Net Debt*................................................. million $804 million
- -----------------------------------------------------------------------------------------------
Debt to Capitalization Ratio.............................. 29% 38%
- -----------------------------------------------------------------------------------------------
Net Debt to Capitalization Ratio*......................... 18% 32%
- -----------------------------------------------------------------------------------------------
</TABLE>

* net of cash & short-term investments

HOMESTAKE HAS SIGNIFICANTLY LESS DEBT THAN NEWMONT AND A STRONGER BALANCE SHEET.
A combined Homestake-Santa Fe will have less than half the net debt of
Newmont-Santa Fe. Newmont-Santa Fe would have a total post-merger debt load of
more than $1 billion. It would be a more leveraged company facing immediate
requirements to raise large amounts of additional funding for capital projects,
particularly its copper mine in Indonesia. Debt service will divert cash that
could be better used for exploration and other production activities. In
contrast, Homestake-Santa Fe will have one of the strongest balance sheets in
the industry that will immediately enable us to continue an aggressive growth
strategy.
<PAGE> 4

HOMESTAKE HAS IMPROVED ITS COST STRUCTURE

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
HOMESTAKE NEWMONT
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Reduction In Overhead Costs Per Ounce (1990-95)......... $11(35%) $2(6%)
- ----------------------------------------------------------------------------------------------
Reduction In Cash Operating and Overhead Costs Per Ounce
(1990-95)............................................... $25(8%) $9(4%)
- ----------------------------------------------------------------------------------------------
</TABLE>

HOMESTAKE HAS REDUCED CASH OPERATING AND OVERHEAD COSTS MORE THAN NEWMONT SINCE
1990. Newmont has touted $50 million in cost savings from a hostile takeover of
Santa Fe, but 80% of this amount would come from eliminating Santa Fe's
management and virtually all of its exploration budget. Newmont projects only a
2% savings in operating expenses. Newmont's operating expenses in Nevada have
increased in recent years as it processes more refractory ore and increases
underground mining. Moreover, its current operating expenses reflect processing
approximately 35% refractory ore. With refractory ore now comprising 65% of
Newmont's reserves, will its operating expenses continue to increase?

Homestake will eliminate duplicative costs, but without sacrificing the Santa Fe
exploration program. Homestake also has a more efficient overhead structure than
Newmont. In 1995, our overhead costs were roughly 20% lower than Newmont's per
ounce of gold produced. Homestake's overhead costs have decreased annually since
1992, while Newmont's have increased. The new Homestake-Santa Fe expects to
reduce overhead costs a further 20% per ounce.

CONCLUSION

We believe Homestake will earn a rerating that will greatly increase the
long-term value of the Homestake shares you would receive in our proposed
combination. In our opinion, Homestake's refractory ore processing expertise,
underground mining experience, and accelerating exploration program -- combined
with a strong balance sheet and low political risk profile -- will enable us to
earn this rerating. Our prospects will be further enhanced by adding Santa Fe
talent to the new management team that is transforming Homestake into an
aggressive growth company.

We are building a new Homestake dedicated to delivering superior shareholder
value. We urge you to support the combination with Homestake unanimously
endorsed by the Santa Fe Board. We will write again soon to tell you how to help
make this compelling combination a reality.

Sincerely,
/s/ JACK E. THOMPSON
Jack E. Thompson
President and Chief Executive Officer
<PAGE> 5

ADDITIONAL INFORMATION

The Homestake-Santa Fe Agreement was unanimously approved by both Boards of
Directors as being in the best interests of the Homestake and Santa Fe
stockholders, respectively. The obligations of Homestake and Santa Fe to
consummate the merger are subject to various conditions, including Homestake and
Santa Fe shareholder approvals, Hart-Scott-Rodino clearance, the receipt of
independent accountants' letters that the merger qualifies as a pooling of
interests and the receipt of opinions of counsel that the merger will constitute
a tax-free reorganization. Subject to certain limitations, Santa Fe is permitted
to terminate the Agreement to enter into an agreement to combine with another
party upon payment to Homestake of a $65 million termination fee.

A Preliminary Joint Proxy Statement/Prospectus of Homestake and Santa Fe is
contained in the Registration Statement on Form S-4 which Homestake filed with
the Securities and Exchange Commission on January 6, 1997 (Registration No.
333-19303). The Preliminary Joint Proxy Statement/Prospectus contains
information relating to the combination of Homestake and Santa Fe, including a
more detailed description of the Agreement. Copies of the complete Preliminary
Joint Proxy Statement/Prospectus are available, without charge, to Homestake and
Santa Fe shareholders on written or oral request to Wayne Kirk, Vice President,
General Counsel and Corporate Secretary, Homestake Mining Company, 650
California Street, San Francisco, CA 94108-2788 (Tel: 415/981-8150).

The preliminary prospectus with respect to Newmont's proposed exchange offer
states that the offer is subject to a number of conditions, including the tender
by Santa Fe shareholders of at least 90% of the outstanding Santa Fe shares,
Hart-Scott-Rodino clearance and receipt of an independent accountant's letter
that the offer qualifies as a pooling of interests. The preliminary prospectus
is contained in a Registration Statement on Form S-4 which Newmont filed with
the Securities and Exchange Commission on January 7, 1997 (Registration No.
333-19335). Copies of Newmont's preliminary prospectus are available from the
Securities and Exchange Commission.

Attached hereto as Annex A is information concerning the directors and executive
officers of Homestake and other representatives of Homestake who may communicate
with Homestake and Santa Fe shareholders regarding these matters and a
description of their interests therein.

This letter 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 letter is not being furnished by Santa Fe
or its Board of Directors.

Statements contained in this letter which are not historical facts are
forward-looking statements as that term 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
companies' filings with the Securities and Exchange Commission.
<PAGE> 6

ANNEX A

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

A-1
<PAGE> 7

<TABLE>
<CAPTION>
PRESENT POSITION WITH HOMESTAKE OR OTHER PRINCIPAL
NAME AND BUSINESS ADDRESS OCCUPATION OR EMPLOYMENT
- ------------------------------- -----------------------------------------------------------
<S> <C>
Douglas W. Fuerstenau.......... Director, Homestake Mining Company; Professor in the
University of California, Graduate School, Department of Materials Science and
Berkeley Mineral Engineering, University of California, Berkeley.
477 Evans Hall
No. 1760
Berkeley, CA 94720
Dennis B. Goldstein............ Corporate Counsel and Assistant Secretary, Homestake Mining
Homestake Mining Company Company.
650 California Street
San Francisco, CA 94108-2788
Lee A. Graber.................. Vice President, Corporate Development, Homestake Mining
Homestake Mining Company Company.
650 California Street
San Francisco, CA 94108-2788
Henry G. Grundstedt............ Director, Homestake Mining Company; Former Senior Vice
P.O. Box 105 President, Capital Guardian Trust.
Umpqua, OR 97486-0105
Fred Hewett.................... Assistant Controller, Homestake Mining Company.
Homestake Mining Company
650 California Street
San Francisco, CA 94108-2788
William A. Humphrey............ Director, Vice Chairman of the Board, Former President and
Homestake Mining Company Chief Operating Officer, Homestake Mining Company.
650 California Street
San Francisco, CA 94108-2788
Robert K. Jaerdicke............ Director, Homestake Mining Company; Professor (Emeritus) of
Graduate School of Business Accounting Graduate School of Business, Stanford
Stanford University University.
Stanford, CA 94305-5015
Wayne Kirk..................... Vice President, General Counsel and Corporate Secretary,
Homestake Mining Company Homestake Mining Company.
650 California Street
San Francisco, CA 94108-2788
Gillyeard J. Leathley.......... Vice President, Operations, Homestake Mining Company.
Homestake Mining Company
650 California Street
San Francisco, CA 94108-2788
William F. Lindqvist........... Vice President, Exploration, Homestake Mining Company.
Homestake Mining Company
650 California Street
San Francisco, CA 94108-2788
John Neerhout, Jr. ............ Director, Homestake Mining Company.
15 Peninsula Road
Belvedere, CA 94920
Ronald D. Parker............... Vice President, Canada, Homestake Mining Company.
1000-700 W. Pender Street
Vancouver, BC V6C 168
CANADA
</TABLE>

A-2
<PAGE> 8

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-3
<PAGE> 9

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.

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

<TABLE>
<CAPTION>
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
- -------------------------------------------------------- ------------------------------------------
<S> <C>
Robert A. Pilkington.................................... Managing Director
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, NY 10022
</TABLE>

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.

A-4

<PAGE> 1

Homestake
HOMESTAKE MINING COMPANY
650 California Street
San Francisco, CA 94108
Phone: 415/981-8150
Fax: 415/397-5038
January 14, 1997

Dear Homestake Shareholder:

Attached for your information is a copy of a letter which we sent to Santa
Fe Pacific Gold Corporation shareholders. This letter is in response to Newmont
Mining Corporation's announced intention to make a competing hostile exchange
offer for Santa Fe shares and Newmont's proposed solicitation of Santa Fe
shareholders to vote against a Homestake-Santa Fe combination.

Sincerely,
/s/ JACK E. THOMPSON
Jack E. Thompson
President and Chief Executive Officer
<PAGE> 2

[Homestake Logo]
HOMESTAKE MINING COMPANY
650 California Street
San Francisco, CA 94108
Phone: 415/981-8150
Fax: 415/397-5038

January 14, 1997

Dear Santa Fe Shareholder:

Santa Fe and Homestake shareholders would each own 50% of the new Homestake -- a
revitalized company with substantial potential for long-term share price
appreciation.

The purpose of this letter is to set the record straight -- AND EXPLAIN WHY WE
BELIEVE A HOMESTAKE-SANTA FE COMBINATION WILL DELIVER FAR MORE LONG-TERM VALUE
TO YOU.

SMALL DIFFERENCE IN SHORT-TERM VALUE

HOMESTAKE OFFERS GREATER LONG-TERM VALUE

HOMESTAKE CAN MAKE MORE OF SANTA FE'S ASSETS
- ----------------------------------------------------------------------

TREATMENT OF COMPLEX ORES
- ------------------------------

UNDERGROUND MINING
- -----------------------

EXPLORATION
- ------------

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
HOMESTAKE NEWMONT
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Exploration Program................... Accelerating Stalled
- ----------------------------------------------------------------------------------------------
Nevada Discoveries.................... Ruby Hill (1994) None except at Carlin
- ----------------------------------------------------------------------------------------------
</TABLE>

HOMESTAKE-SANTA FE WILL BE FINANCIALLY STRONGER

* net of cash & short-term investments

HOMESTAKE HAS IMPROVED ITS COST STRUCTURE

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
HOMESTAKE NEWMONT
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Reduction In Overhead Costs Per Ounce (1990-95)......... $11(35%) $2(6%)
- ----------------------------------------------------------------------------------------------
Reduction In Cash Operating and Overhead Costs Per Ounce
(1990-95)............................................... $25(8%) $9(4%)
- ----------------------------------------------------------------------------------------------
</TABLE>

CONCLUSION

Sincerely,
/s/ JACK E. THOMPSON
Jack E. Thompson
President and Chief Executive Officer
<PAGE> 6

ADDITIONAL INFORMATION

ANNEX A

DIRECTORS AND OFFICERS OF HOMESTAKE

A-1
<PAGE> 8

A-2
<PAGE> 9

A-3
<PAGE> 10

OTHER REPRESENTATIVES OF HOMESTAKE WHO MAY COMMUNICATE
WITH HOMESTAKE AND SANTA FE SHAREHOLDERS

A-4

<PAGE> 1
Homestake Mining Co.

[Homestake & Santa Fe Pacific Gold Corp. Logo]

Superior Long-Term Value
<PAGE> 2
[HOMESTAKE BACKGROUND
LOGO] ---------------------------------------------------------------

[SANTA FE - Homestake - Santa Fe Merger Agreement
LOGO] - 1.115 Homestake shares for each Santa Fe share
- Santa Fe shareholders to own 50% of combined company

- Newmont's Hostile Offer
- 0.4 of a Newmont share for each Santa Fe share
- Santa Fe shareholders to own 35% of combined company
- Claimed their combination had greater upside potential

<PAGE> 3
[HOMESTAKE
LOGO] BACKGROUND
-----------------------------------------------------------------
[SANTA FE
LOGO] - Newmont making statements we believe are inaccurate and
misleading

- This discussion today is to set the record straight

... and to explain why we believe a Homestake - Santa Fe
combination will deliver far more long-term value to Santa Fe
shareholders

<PAGE> 4
[HOMESTAKE
LOGO] SMALL DIFFERENCE IN SHORT-TERM VALUE
-------------------------------------------------------------

* Both offers are in stock, not cash

[SANTA FE * Premium offered by Newmont eroding fast
LOGO]
-- Lost one half of its value in first three trading days

-- May erode further before transaction closes in
several months

-- Illustrates uncertainty when focusing on current premiums
based on stock offers

<PAGE> 5
[HOMESTAKE ERODING SHORT-TERM VALUE DIFFERENTIAL
LOGO]

[SANTA FE
LOGO]

Graph shows erosion in short-term value differential between competing Newmont
and Homestake offers. Graph shows decline since 11/20/96 of 74% from $2.74 on
11/20/96 to $0.71 on 1/13/97.
<PAGE> 6

[HOMESTAKE
LOGO] LONG-TERM VALUE OF OFFERS
-------------------------------------------------------
[SANTA FE
LOGO] * Key is which offer most likely to deliver more
long-term value to shareholders

* Factors include

- Appreciation potential

- Making the most of Santa Fe's assets

- Relative financial strength

<PAGE> 7

[HOMESTAKE
LOGO] POTENTIAL TO DELIVER LONG-TERM VALUE
-------------------------------------------------------

[SANTA FE * Homestake offers better deal to Santa Fe shareholders
LOGO]
- Greater long-term value

- Immediately accretive to EPS and cash flow per
share

- Greater ability to realize Nevada potential

- Superior balance sheet

- Lower overhead costs

* Presently undervalued Homestake more likely to reward
shareholders compared to limited prospects of merging
with an already highly valued Newmont

<PAGE> 8

[HOMESTAKE GREATER OWNERSHIP INTEREST FOR
LOGO] SANTA FE SHAREHOLDERS
-------------------------------------------------------

[SANTA FE * Homestake gives Santa Fe shareholders 50%
LOGO]
* Newmont gives Santa Fe shareholders only 35%

<PAGE> 9

[HOMESTAKE
LOGO] GREATER APPRECIATION POTENTIAL
-------------------------------------------------------

[SANTA FE - Homestake a value play
LOGO]
-- Currently valued below the S&P Gold Index Average
-- $95 per ounce of reserves

- Newmont stock is already valued at $157 per ounce
of reserves

- Homestake's new fundamentals and improved
performance should enable us to close the gap

<PAGE> 10

[HOMESTAKE
LOGO] RERATING POTENTIAL
---------------------------------------------------------------

[SANTA FE
LOGO]

Graph shows current market capitalization per ounce of reserves as of 1/14/97.
Graph shows Homestake at $95 per ounce, Newmont at $157 per ounce and S&P Gold
average at $159 per ounce.
<PAGE> 11
[HOMESTAKE APPRECIATION POTENTIAL FOR
LOGO] SANTA FE SHAREHOLDERS
---------------------------------------------------------------

[SANTA FE
LOGO]

Graph shows appreciation potential for Santa Fe shareholders. Graph shows value
to Santa Fe shareholders on 1/14/97 at $15.19 per share for Homestake offer and
$15.90 per share for Newmont offer. Assumes Newmont stock valued at $157 market
capitalization per ounce of reserves. Shows that offer differential closes and
reverses if Homestake can achieve higher market capitalization valuation per
ounce of reserves. Shows parity of offers at Homestake valuation of $100 market
capitalization per ounce of reserves. Shows Homestake offer value to Santa Fe
shareholders at $25.29 if Homestake can achieve same market capitalization
valuation per ounce of reserves as Newmont ($157).
<PAGE> 12

[HOMESTAKE ACCRETION/DILUTION*
LOGO] ------------------------------------------------------------

[SANTA FE . Contrary to Newmont's assertions, Santa Fe-Homestake
LOGO] merger immediately accretive to cash flow and earnings
per share

. By Newmont's own admission, their proposed combination
dilutive in 1997 and 1998

* Excluding transaction costs, based on $400 gold

<PAGE> 13

[HOMESTAKE HOMESTAKE'S GREATER ABILITY TO REALIZE
LOGO] POTENTIAL OF SANTA FE'S ASSETS
------------------------------------------------------------

[SANTA FE - Long-term value in Santa Fe's principal mines is locked
LOGO] up in complex refractory ores

- Expertise and experience in treatment of such ores
required

- Future of Nevada is in underground mining

- Particularly so at Santa Fe's mines

HOMESTAKE IS AN EXPERT AND
NEWMONT IS A NOVICE IN BOTH AREAS

<PAGE> 14
[HOMESTAKE
LOGO] TREATMENT OF COMPLEX ORES
-------------------------------------------------------------------

[SANTA FE
LOGO] - Santa Fe's mines use autoclave technology pioneered by Homestake

-- Years of autoclave experience: Homestake - 12
Newmont - 0

- Newmont latecomer to roasting technology
-- Newmont's own roaster at Carlin uses technology pioneered by
Homestake at Kalgoorlie in 1989
-- Only just begun production

- Homestake has 21 years of roasting experience
-- Newmont has only 1 year

<PAGE> 15
[HOMESTAKE TREATMENT OF COMPLEX ORES - OTHERS
LOGO] -------------------------------------------------------

[SANTA FE - Biotechnology
LOGO] - Readily available
- No commercial use of Newmont's technology

- Flotation Plants
- Homestake's plant at Kalgoorlie, Snip, Eskay, McLaughlin

- Smelting
- Homestake has more experience than Newmont

<PAGE> 16
[HOMESTAKE COMPLEX ORE PROCESSED (1990-1995)
LOGO] --------------------------------------------
Graph compares Homestake and Newmont tons of complex ore
[SANTA FE processed for 1990 to 1995. Graph shows Homestake having
LOGO] processed 22.6 million tons of complex ore by autoclave and 14.3
million tons by roasting during such period. Graph shows Newmont
having processed 0 tons of complex ore by autoclave and 2.8
million tons by roasting during such period. Graph shows
Homestake autoclave and roaster experience processing 13 times
the amount of ore as Newmont.

<PAGE> 17
[HOMESTAKE UNDERGROUND MINING - HOMESTAKE
LOGO] --------------------------------------------------------------
[SANTA FE - Easy near-surface mining opportunities in Nevada are few and
PACIFIC far between
LOGO]
- Underground mining way of the future

- Homestake's advantage unquestioned

- 120 years of continuous underground mining experience

- Knowledge of virtually every mining technique

- Mines as deep as 8,000 feet

- Six current underground mines
<PAGE> 18

[HOMESTAKE
LOGO] UNDERGROUND MINING - NEWMONT
-------------------------------------------------------

[SANTA FE * Newmont only just beginning an underground add-on to
LOGO] its Carlin open pit operations

- Recent experience only 2 years

- Annual tons of ore mined underground:

Homestake - 7.5 million
Newmont - 0.5 million

<PAGE> 19
[HOMESTAKE UNDERGROUND MINING (1990-1995)
LOGO] ---------------------------------------------------------------

[SANTA FE
LOGO]

Graph compares Homestake to Newmont in underground mining tonnage for 1990 to
1995. Graph shows Homestake having mined 24.7 million tons of ore during such
period. Graph shows Newmont having mined 0.6 million tons of ore during such
period. Graph shows Homestake having 41 times the underground mining tonnage as
Newmont over the last six years.

<PAGE> 20
[HOMESTAKE EXPLORATION
LOGO] ----------------------------------------------------------------

* Homestake's exploration program on accelerating path

-- New people
[SANTA FE -- New approach
LOGO] -- Bigger budgets
-- Two discoveries in past two years

* Newmont's exploration stalled

-- No Nevada success outside Carlin trend in 30 years
-- Significant Nevada discoveries made by others
-- Since 1989 Nevada reserves increased by only a nominal 1%
-- Overseas growth due to acquisitions or discoveries years ago

<PAGE> 21
[HOMESTAKE ANALYSIS OF RESERVE ADDITIONS
LOGO] ----------------------------------------------------------------
(Net of Production)

[SANTA FE
LOGO]
Aggregate Reserve Additions (MM oz.)

<TABLE>
<CAPTION>
Homestake Newmont Newmont(NEV) Santa Fe
----------------------------------------------------------------
<S> <C> <C> <C> <C>
'94-95 3.6 2.7 2.4 2.5
'93-95 3.1 2.8 3.1 3.8
'92-95 4.2 5.0 1.4 11.5
'91-95 8.3 8.7 0.8 12.1
'90-95 7.7 9.9 2.0 13.2
'89-95 6.8 8.1 0.2 14.1

</TABLE>

<PAGE> 22
[HOMESTAKE ANALYSIS OF RESERVE ADDITIONS
LOGO] ----------------------------------------------------
(Net of Production)
[SANTA FE
LOGO] Reserve Additions (% Change)

<TABLE>
<CAPTION>
Homestake Newmont Newmont(NEV) Santa Fe
-------------------------------------------------------------
<S> <C> <C> <C> <C>
'94-95 20.1 10.3 12.9 16.2
'93-95 16.9 10.8 17.4 26.9
'92-95 24.3 21.0 7.2 179.7
'91-95 62.8 43.3 3.9 208.9
'90-95 55.8 52.4 10.6 280.9
'89-95 46.3 39.1 1.0 371.1
</TABLE>

<PAGE> 23

[HOMESTAKE
LOGO] EXPLORATION CAPABILITIES
-------------------------------------------------------

[SANTA FE * In each time period Homestake has had greater percent
LOGO] increases in reserves than Newmont

* Measured in ounces, Homestake reserve additions have
outstripped Newmont since 1993

* Santa Fe has enjoyed a stronger reserve growth than
either Homestake or Newmont

* Newmont's Nevada performance is modest at best, adding
only 200,000 ounces since 1989 (1.0% increase)

<PAGE> 24

[HOMESTAKE
LOGO] HOMESTAKE'S SUPERIOR BALANCE SHEET
-------------------------------------------------------

[SANTA FE - Homestake's strong balance sheet has net cash position
LOGO]
- Pro forma (9/30/96) net debt-to-capitalization ratio*
w/Homestake 18%
w/Newmont 32%

- Newmont will owe more than $1 billion

- Facing immediate requirements to raise large
amounts of capital for new projects

- Debt service will divert cash from exploration and
other production activities

* Net of cash and short-term investments

<PAGE> 25

[HOMESTAKE
LOGO] BALANCE SHEET AS OF 9/30/96
-------------------------------------------------------

[SANTA FE
LOGO]

Graph shows pro forma balance sheets for a Homestake-Santa Fe combination and a
Newmont-Santa Fe combination as of 9/30/96. Graph shows total debt for
Homestake-Santa Fe at $580 million and net debt at $312 million as of 9/30/96.
Graph shows total debt for Newmont-Santa Fe of $1.042 billion and net debt of
$804 million as of 9/30/96. Graph shows Newmont having 2.6 times the net debt of
Homestake as of 9/30/96.
<PAGE> 26

[HOMESTAKE
LOGO] HOMESTAKE'S LOWER OVERHEAD COSTS
-------------------------------------------------------

[SANTA FE - Homestake has been consistently reducing overhead costs
LOGO] since 1992

- Homestake's 1995 overhead expenses 19% lower per ounce
of production than Newmont's

- Homestake expects further 20% reduction to $16 per
ounce post merger

<PAGE> 27

[HOMESTAKE
LOGO] HOMESTAKE'S IMPROVING COST STRUCTURE
-------------------------------------------------------
[SANTA FE
LOGO]

Graph shows comparative cost structures. Graph shows that from 1990 to 1995,
Homestake reduced overall overhead $11 per ounce or 35%, generating five times
the savings as Newmont. Graph shows that from 1990 to 1995, Homestake reduced
total cash operating and overhead costs $16 per ounce more than Newmont.

<PAGE> 28
[HOMESTAKE OPERATING COSTS
LOGO] ------------------------------------------------

[SANTA FE - Operating costs rapidly converging
LOGO]
- Newmont's historical lower costs due to treating
simple oxide ores
- Currently treating only 35% refractory ores
- Ore reserve 65% refractory

<PAGE> 29
[HOMESTAKE CASH COSTS - NEWMONT'S CARLIN OPERATIONS
LOGO] ----------------------------------------------------
% oz. Produced
[SANTA FE
LOGO]

Graph shows cash costs at Newmont's Carlin operations. Graph shows cash
costs of $198 per ounce in 1993 (0% refractory); $208 per ounce in 1994
(< 1% refractory); $223 per ounce in 1995 (22% refractory); and $244 per
ounce for the first nine months of 1996 (35% refractory).

<PAGE> 30
[HOMESTAKE SUPERIOR OPPORTUNITY FOR RERATING AND FUTURE APPRECIATION
LOGO] ------------------------------------------------------------

[SANTA FE - Larger size is not the primary goal
LOGO]
- New Homestake will have greater capabilities
- Improves ability to compete for attractive opportunities
and to maximize return from current assets

- Improved fundamentals in new company should be reflected in
share price
- Requires continued exploration success, new mine
development, lower costs, improved profitability and above
all sustainable growth

<PAGE> 31

[HOMESTAKE
LOGO] THE NEW HOMESTAKE - SANTA FE
-------------------------------------------------------

[SANTA FE - Leading international gold company
LOGO]
- #1 Gold reserves 39.4 MM oz.
- #2 Gold production 3.2 MM oz. by 1998
- #1 Nevada land position 1.5 MM acres

- 17 mines (8 underground, 9 surface)

- 10 development projects

- Low political risk

<PAGE> 32

[HOMESTAKE
LOGO] THE NEW HOMESTAKE - SANTA FE
-------------------------------------------------------

[SANTA FE - Strong commitment to exploration
LOGO] -- Nevada Focus

- Complementary technological expertise
-- A spectacular fit

- Production growth profile

<PAGE> 33

[HOMESTAKE
LOGO] HOMESTAKE MINING COMPANY
-------------------------------------------------------

[SANTA FE
LOGO]

Graph shows Homestake's annual gold production (in millions of ounces) growing
from 304,877 in 1973 to 3,160,255 for 1998 estimated (including Santa Fe
figures).
<PAGE> 34
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

DIRECTORS AND OFFICERS OF HOMESTAKE

<TABLE>
<CAPTION>
PRESENT POSITION WITH HOMESTAKE OR OTHER PRINCIPAL
NAME AND BUSINESS ADDRESS OCCUPATION OR EMPLOYMENT
- ------------------------- --------------------------------------------------

<S> <C>
M. Norman Anderson............................... Director, Homestake Mining Company; Former
N Anderson & Associates Chairman International Corona Corporation;
502-455 Granville Street Mining Industry Consultant.
Vancouver, V6C1V2

Jan P. Berger.................................... Treasurer, Homestake Mining Company.
Homestake Mining Company
650 California Street
San Francisco, CA 94108-
2788

Michael L. Carroll............................... Director of Taxes and Assistant Secretary,
Homestake Mining Company Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788

Robert H. Clark, Jr.............................. Director, Homestake Mining Company; President and
529 Fifth Avenue Chief Executive Officer, Case, Pomeroy & Company,
Suite 1600 Inc.
New York, NY 10017
</TABLE>
<PAGE> 35
2

<TABLE>
<S> <C>
Harry M. Conger.................................. Director and Chairman of the Board,
Homestake Mining Company Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788

G. Robert Durham................................. Director, Homestake Mining Company.
943 Seddon Cove Way
Tampa, FL 33602

Gene G. Elam..................................... Vice President, Finance and Chief Financial
Homestake Mining Company Officer, Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788

Douglas W. Fuerstenau............................ Director, Homestake Mining Company; Professor in
University of California, the Graduate School, Department of Materials
Berkeley Science and Mineral Engineering, University of
477 Evans Hall California, Berkeley.
No. 1760
Berkeley, CA 94720

Dennis B. Goldstein.............................. Corporate Counsel and Assistant Secretary,
Homestake Mining Company Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788

Lee A. Graber.................................... Vice President, Corporate Development, Homestake
Homestake Mining Company Mining Company.
650 California Street
San Francisco, CA 94108-
2788

Henry G. Grundstedt.............................. Director, Homestake Mining Company; Former Senior
P.O. Box 105 Vice President, Capital Guardian Trust.
Umpqua, OR 97486-0105

Fred Hewett...................................... Assistant Controller, Homestake Mining Company.
Homestake Mining Company
650 California Street
San Francisco, CA 94108-
2788

William A. Humphrey.............................. Director, Vice Chairman of the Board, Former
Homestake Mining Company President and Chief Operating Officer, Homestake
650 California Street Mining Company.
San Francisco, CA 94108-
2788

Robert K. Jaerdicke.............................. Director, Homestake Mining Company; Professor
Graduate School of Business (Emeritus) of Accounting Graduate School of
Stanford University Business, Stanford University.
Stanford, CA 94305-5015

Wayne Kirk....................................... Vice President, General Counsel and Corporate
Homestake Mining Company Secretary, Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788
</TABLE>
<PAGE> 36
3

<TABLE>
<S> <C>
Gillyeard J. Leathley............................ Vice President, Operations, Homestake Mining
Homestake Mining Company Company.
650 California Street
San Francisco, CA 94108-
2788

William F. Lindqvist............................. Vice President, Exploration, Homestake Mining
Homestake Mining Company Company.
650 California Street
San Francisco, CA 94108-
2788

John Neerhout, Jr................................ Director, Homestake Mining Company.
15 Peninsula Road
Belvedere, CA 94920

Ronald D. Parker................................. Vice President, Canada, Homestake Mining Company.
1000-700 W. Pender Street
Vancouver, BC V6C 168
CANADA

David W. Peat.................................... Vice President and Controller, Homestake Mining
Homestake Mining Company Company.
650 California Street
San Francisco, CA 94108-
2788

Stuart T. Peeler................................. Director, Homestake Mining Company; Petroleum
Casa Codorniz Industry Consultant.
POB 35852
Tucson, AZ 85740

Carol A. Rae..................................... Director, Homestake Mining Company; Former
HC 89 - Box 188A President and Chief Executive Officer, Magnum
Hermosa, SD 57744 Diamond Corporation.

Berne A. Schepman................................ Director, Homestake Mining Company; President, The
The Adair Company Adair Company.
1670 South Amphlett Blvd.
Suite 214
San Mateo, CA 94402

Richard A. Tastula............................... Vice President, Australia, Homestake Mining
9th Floor Company.
2 Mill Street
Perth, WA 6000

Jack E. Thompson................................. Director, President and Chief Executive Officer,
Homestake Mining Company Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788

Thomas H. Wong................................... Assistant Treasurer and Assistant Secretary,
Homestake Mining Company Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788
</TABLE>

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
<PAGE> 37
4

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.

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.

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).

OTHER REPRESENTATIVES OF HOMESTAKE WHO MAY COMMUNICATE
WITH HOMESTAKE AND SANTA FE SHAREHOLDERS

<TABLE>
<CAPTION>
PRESENT PRINCIPAL
NAME AND BUSINESS ADDRESS OCCUPATION OR EMPLOYMENT
- ------------------------- ------------------------

<S> <C>
Robert A. Pilkington......................................... Managing Director
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, NY 10022
</TABLE>

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.