As filed with the Securities and Exchange Commission on February 11, 1997
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
SANTA FE PACIFIC GOLD CORPORATION
(Name of Registrant as Specified In Its Charter)
HOMESTAKE MINING COMPANY
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check appropriate box):
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and 0-11.
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The following is the text of Press Release issued by Homestake on
February 10, 1997.
<PAGE>
HOMESTAKE MINING COMPANY
650 California St.
San Francisco, CA 94108
Contact:
Michael A. Steeves
Director, Investor Relations
415-983-8169
HOMESTAKE MINING RECEIVES PERMITS FOR RUBY HILL CONSTRUCTION
$65 Million Project To Begin Immediately
San Francisco, CA, February 10, 1997-- Homestake Mining Company
(NYSE:HM) announced today that it has received permits to develop the West
Archimedes orebody on the Company's Ruby Hill property in central Nevada,
near the town of Eureka. Construction began last week with gold production
scheduled to commence in the fourth quarter of this year.
Upon completion of construction, Homestake will process
approximately 3,500 tons of ore per day to produce between 105,000 and
110,000 ounces of gold on an annual basis. At current estimates, Ruby Hill
will become the Company's lowest cost gold mine with projected total cash
costs of approximately $140 per ounce and total production costs of $258
per ounce. Ore from the open pit at Ruby Hill will be processed by
crushing, grinding, pulp agglomeration and conventional heap leaching.
"We are very excited that Ruby Hill, the first major discovery
resulting from Homestake's renewed exploration efforts, is moving into the
construction phase, with production expected before the end of the year. We
expect the Ruby Hill mine to be one of a new generation of Homestake mines
that will lead to higher annual production and substantially lower costs
over the
<PAGE>
next few years," said Jack E. Thompson, President and Chief
Executive Officer of Homestake. "We intend to use a portion of the cash
generated from West Archimedes production to fund further exploration and
development of the promising Ruby Hill district."
At present, proven and probable reserves at Ruby Hill total 7.6
million tons of ore grading 0.099 ounces of gold per ton (755,000 contained
ounces). In addition, the oxide portion of the adjacent East Archimedes
zone is being evaluated currently and may be added to reserves in the
future. Additionally, recent deep drilling has intersected several hundreds
of feet of gold mineralization approximately 1500 feet below the West
Archimedes deposit which grades between 0.05 and 0.10 ounces of gold per
ton. Higher grade zones of 0.25 ounces of gold per ton and better are
occurring over widths of 20 to 80 feet within the mineralized area.
Drilling is continuing to determine the extent and continuity of these
zones.
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. The
Company expects to produce approximately 1.9 million ounces of gold in
1997.
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.
FACTS ABOUT RUBY HILL
ORE RESERVE - 7.62 million tons @ 0.099 ounces per ton
(755,000 ounces) (including 1.95 million
tons grading 0.233 ounces per ton)
<PAGE>
MINING - Open pit - @ 26,000 tons per day (tpd)
Strip ratio - 7 to 1
PROCESSING - 2600 tpd Low grade ore
900 tpd High grade ore
----
3500 tpd Total
- Low grade ore will be crushed and heap
leached
- High grade ore will be ground in a ball
mill, thickened, leached and filtered.
The filtered cake will be combined in a
rotating agglomeration drum with the
crushed low grade ore and the mixture
placed on the leach pad.
- Overall recovery 87%
ESTIMATED COST - $65.4 million
(including $20.9 million for mining
equipment and prestripping)
OPERATING COST PER OUNCE
Direct cash $130
Indirect cash 11
---
Total cash 141
Noncash 117
---
Total $258
<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.
<PAGE>
Lee A. Graber
Homestake Mining Company
650 California Street San Francisco, CA 94108-2788
Vice President, Corporate Development,
Homestake Mining Company.
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 Street, San 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.
<PAGE>
John Neerhout, Jr.
15 Peninsula Road
Belvedere, CA 94920
Director, Homestake Mining Company; Former Executive Vice
President and Director of Bechtel Group Inc.
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.
<PAGE>
Jack E. Thompson
Homestake Mining Company
650 California Street, San 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.
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
<PAGE>
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.
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.
<PAGE>
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
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
<PAGE>
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.
