UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 1997
HOMESTAKE MINING COMPANY
SAVINGS PLAN
(Full title of Plan)
HOMESTAKE MINING COMPANY
(Issuer of Securities Held Pursuant to the Plan)
650 California Street
San Francisco, California 94108
(Address of principal executive offices)
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
HOMESTAKE MINING COMPANY
SAVINGS PLAN
By /s/ T.H. Wong
----------------------------
T.H. Wong
Assistant Treasurer and
Assistant Secretary
June 25, 1998
<PAGE>
Item 1. Financial Statements and Exhibits
a. Financial Statements for the years ended December 31, 1997
and 1996 and Supplemental Schedules as of and for the year
ended December 31, 1997 and Independent Accountants'
Report.
b. Exhibit No. 23
Independent Accountants' Consent
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
-------
FINANCIAL STATEMENTS
as of December 31, 1997 and 1996
and for the year ended December 31, 1997
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
-------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Financial Statements:
Report of Independent Accountants 2
Statements of Net Assets Available for Benefits
as of December 31, 1997 and 1996 3
Statement of Changes in Net Assets Available for
Benefits for the Year Ended December 31, 1997 4
Notes to Financial Statements 5-17
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1997 18
Item 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1997 19
</TABLE>
1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Homestake Mining Company
San Francisco, California
We have audited the accompanying statements of net assets available for benefits
of the Homestake Mining Company Savings Plan (the Plan) as of December 31, 1997
and 1996, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1997. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1997 and 1996, and the changes in net assets available for benefits
for the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1997 and of reportable transactions
for the year then ended are presented for the purpose of additional analysis and
are not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Coopers & Lybrand L.L.P.
- ----------------------------
COOPERS & LYBRAND L.L.P.
San Francisco, California
June 9, 1998
2
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1997 and 1996
<TABLE>
<CAPTION>
ASSETS 1997 1996
- ------ ----------- ------------
<S> <C> <C>
Cash and cash equivalents: $ 94,674 $ 393,414
Investments:
Barclays Global Investors Asset Allocation Fund 10,955,873 9,804,606
Barclays Global Investors Lifepath Funds 7,482,509 5,950,697
Neuberger & Berman Guardian Trust Fund 2,676,821 1,670,723
Templeton Foreign Fund I 1,509,799 1,338,252
MasterWorks S&P 500 Stock Fund 11,652,313 7,988,852
Barclays Global Investors Money Market Fund 4,882,422 1,064,698
Homestake Mining Company Stock Fund 7,587,406 10,547,924
Fixed Income Fund 15,410,267 17,671,365
Guaranteed Investment Contracts (See Notes 11 and 13) - 3,089,453
Homestake PIMCO Total Return Fund 336,010 -
Participant loans 2,274,014 2,145,158
----------------- -----------------
Total investments 64,767,434 61,271,728
----------------- -----------------
Total assets 64,862,108 61,665,142
LIABILITIES
Amounts due to brokers for securities purchased - 50,515
----------------- -----------------
Net assets available for benefits $64,862,108 $61,614,627
================= =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the year ended December 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Additions to net assets attributed to:
Interest and dividends $ 2,496,274
Net appreciation (depreciation) in the fair value of investments 1,510,724
-------------------
4,006,998
-------------------
Contributions:
Company, in cash 1,515,456
Participants, in cash 2,321,199
Transfers in from other plans 2,804,740
-------------------
6,641,395
-------------------
Total additions 10,648,393
-------------------
Deductions from net assets attributed to:
Benefits paid to participants 7,322,691
Transfers out to other plans 78,221
-------------------
Total deductions 7,400,912
-------------------
Net increase 3,247,481
Net assets available for benefits:
Beginning of year 61,614,627
-------------------
End of year $ 64,862,108
===================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
1. Description of Plan:
The following description of the Homestake Mining Company Savings Plan
(the Plan) provides only general information. Participants should refer
to the full Plan document for a more complete description of the Plan's
provisions.
General:
On November 30, 1996 the Company increased its ownership interest in the
Pinson mine to 50% and the Company became the operator of the mine. On
January 23, 1997 the Plan was amended to permit Pinson employees to
participate. Those employees began to participate in the Plan effective
March 1, 1997, and on that date the Plan became a multiple-employer
plan.
The Plan is a defined contribution profit sharing plan (designed to be
qualified under Internal Revenue Code Sections 401(a) and 401(k))
covering the following employees who have completed three months of
service: all full-time salaried employees of Homestake Mining Company
and its subsidiaries (the Company) in the United States and certain
other locations, all hourly employees of the Company in the United
States who are not covered by collective bargaining agreements, as well
as all temporary employees of the Company in the United States who have
completed one year of service. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA), as amended.
The Plan is administered by the Company. On August 29, 1997, Merrill
Lynch & Co. acquired the 401(k) MasterWorks division from Barclays
Global Investors (BGI). BGI remained as the Plan's trustee until January
1, 1998 when Merrill Lynch Trust Company succeeded BGI as trustee. The
401(k) MasterWorks division provides recordkeeping, investment
management and plan related consulting services to the Plan. Merrill
Lynch continues to offer BGI's investment products and services to the
Plan.
Contributions:
Participation is voluntary. Participants may make pre-tax or after-tax
contributions of between 1% and 15% (between 1% and 14% pre-tax) of
compensation subject to Internal Revenue Code limitations. Participant
contributions not exceeding 6% of wages or of salary are matched 100% by
the Company.
Participants may make a rollover contribution to the Plan of amounts
previously contributed to another qualified plan. Rollover contributions
are not matched by the Company.
Each participant may cause some or all of its current or cumulative
contributions, including any amounts contributed by the Company to match
contributions, to be invested in one or more of the investments made
available through the Plan.
5
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
1. Description of Plan, continued:
Participants' Accounts:
A separate account is maintained for each participant. Each
participant's account is directly credited with the participant's
contribution and the Company's matching contribution. Net earnings from
each investment fund, including appreciation (depreciation) in fair
value, are allocated to each participant's account based on the ratio
which the participant's account balance in that investment fund bears to
the total of all participants' account balances in that investment fund.
Effective January 1998, Company matching contributions formerly made in
cash can now be made in Homestake Mining Company common stock or cash at
the discretion of the Company's Board of Directors.
Vesting:
Participant contributions and any income (loss) thereon are fully vested
at all times. Company contributions and any income (loss) thereon are
vested 60% after three years of service, 80% after four years of
service, and 100% after five years of service, on attainment of age 65,
or on the occurrence of death or disability.
Payment of Benefits:
The Plan permits withdrawal of after-tax contributions.
The Plan permits withdrawal of pre-tax contributions upon:
(1) Termination of employment;
(2) Attainment of age 59 1/2;
(3) Death (with vested account balance paid to designated
beneficiary);
(4) Hardship.
The Plan permits withdrawal of vested Company matching contributions
made prior to January 1, 1994; however, the right of the participant who
makes such a withdrawal to continue receiving Company matching
contribution is suspended for twelve months.
6
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
1. Description of Plan, continued:
Payment of Benefits, continued:
Distribution of benefits, except for certain participants that are
required to receive annuities, can be in the form of single lump-sum
cash payments, partial payments made in a lump-sum with the remainder
paid later, or periodic installments.
Participant Loans:
Participants may borrow from their vested accounts $1,000 to $50,000
limited to 50% of the value of such accounts. The loan term cannot
exceed five years unless the loan is for the purchase of a principal
residence, in which case, it cannot exceed ten years. These loans bear
interest at prime rate plus 1%. Loans are collateralized by the
borrower's vested account in the Plan and repayments are made on at
least a monthly basis through payroll deductions.
Forfeitures:
Forfeitures of Company contributions made on behalf of former employees
whose employment was terminated before such contributions were vested
can be utilized to restore participants' accounts, to pay plan fees and
expenses, to offset company matching contributions, or can be allocated
to participants.
For the 1997 Plan year, forfeitures were allocated to each participant
in proportion to the Company contributions made to such individual's
accounts during the Plan year.
2. Significant Accounting Policies:
Basis of Accounting:
The financial statements of the Plan are prepared under the accrual
basis of accounting in accordance with generally accepted accounting
principles.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of net assets available for
benefits at the date of the financial statements and the reported
amounts of changes in net assets available for benefits during the
reporting period. Actual results could differ from those estimates.
7
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
2. Significant Accounting Policies, continued:
Investment Valuation and Income Recognition:
Shares and units in investment funds are valued at quoted market prices,
representing the net asset value of the shares or units held by the Plan
at year end.
Unallocated guaranteed investment contracts included in the Fixed Income
Fund are fully benefit responsive and are stated at contract value.
Participant loans receivable are valued at cost, which approximates
market value.
Purchases and sales of securities are recorded on a trade-date basis,
utilizing the average cost method in determining the basis of
investments sold. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
Withdrawals:
Withdrawals of securities from the Homestake Mining Company Common Stock
Fund may be made in cash, common stock, or both, and are reported at
market value. Withdrawals from the Asset Allocation Fund, Lifepath
Funds, Neuberger & Berman Guardian Trust Fund, Templeton Foreign Fund I,
S&P 500 Stock Fund, Money Market Fund, the Homestake PIMCO Total Return
Fund, and Fixed Income Fund are made in cash.
Net Appreciation (Depreciation) in Fair Value of Investments:
The Plan presents in the statement of changes in net assets available
for benefits the net appreciation (depreciation) in the fair value of
its investments consisting of realized gains (losses) and the unrealized
appreciation (depreciation).
3. Risks and Uncertainties:
BGI manages three collective trust funds (the Asset Allocation Fund,
the Lifepath Funds, and the Money Market Fund) and the S&P 500 Stock
mutual fund.
8
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
3. Risks and Uncertainties, continued:
Commencing on August 30, 1997, Merrill Lynch succeeded BGI as manager
of two custom funds, the Homestake Mining Company Stock Fund and the
Fixed Income Fund. The Fixed Income Fund is a "hybrid" fund that
consists of guaranteed investment contracts and shares of the Merrill
Lynch Income Accumulation Fund. Effective October 1, 1997, Merrill
Lynch also succeeded BGI as manager and owner of the Income
Accumulation Fund.
Neuberger & Berman Management, Inc., Templeton, Galbraith & Hansberger
Ltd., and Pacific Investment Management Company (PIMCO) manage the
Guardian Trust Fund, Foreign Fund I, and the Total Return Fund,
respectively.
Ultimate Plan performance is dependent upon the ability of the
investment managers to manage the funds.
A significant portion of the Plan's assets is invested in the Homestake
Mining Company Common Stock Fund and is, therefore, subject to
fluctuations in the market value of such stock, which is, in turn,
impacted by the price of gold.
The Plan's assets are invested in collective trust and mutual funds,
and other investment securities. Investments are exposed to various
risks, such as interest rate, market and credit. Due to the level of
risk associated with certain investments and the level of uncertainty
related to changes in the value of such investments, it is possible
that changes in the value of one or more of such investments in the
near term could materially affect participants' account balances, the
amounts reported in the statements of net assets available for Plan
benefits, and the statement of changes in net assets available for Plan
benefits.
4. Plan Termination:
Although the Company has not expressed any intent to do so, it has the
right under the Plan and subject to applicable law, to discontinue its
contributions at any time and to terminate the Plan. In the event of
Plan termination, all accumulated plan benefits will be fully vested and
will be distributed to participants based on their respective account
balances.
5. Reclassifications:
Certain reclassifications were made to 1996 balances to conform with the
1997 presentation, with no effect on the net assets available for
benefits or net change in net assets available for benefits, as
previously reported.
9
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
6. Plan Tax Status:
The Plan obtained its latest determination letter in July 1995, in which
the Internal Revenue Service stated that the Plan, as then designed, was
in compliance with Sections 401(a) and 401(k) of the Internal Revenue
Code. The Plan has been amended since receiving the determination
letter; however, the Plan administrator and the Plan's tax counsel are
not aware of circumstances creating a material risk of Plan
disqualification. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
Participants are not subject to federal income taxes on their pre-tax
contributions, Company matching contributions, or investment earnings
allocated to their accounts until withdrawals are made.
7. Related Party Transactions:
Certain Plan investments are units in investment funds managed by the
Trustee. Therefore, these transactions are transactions with
parties-in-interest.
8. Administrative Expenses:
Certain costs associated with administering the Plan are paid directly
by the Company .
10
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
_______
9. Investments
Investments at December 31, 1997 and 1996 are comprised of the following:
<TABLE>
<CAPTION>
Number Value
of Per Fair
1997 Units Unit Value
---- ------ -------- ------------
<S> <C> <C> <C>
Barclays Global Investors Investment Funds, at fair value:
Barclays Global Investors Asset Allocation Fund 415,783 $ 26.35 $ 10,955,873
Barclays Global Investors Lifepath Funds 480,705 15.57 7,482,509
Barclays Global Investors Money Market Fund 4,882,422 1.00 4,882,422
------------
23,320,804
Homestake Mining Company Stock Fund, at fair value 1,832,707 4.14 7,587,406
Mutual Funds, at fair value:
Neuberger & Berman Guardian Trust Fund 154,730 17.30 2,676,821
Templeton Foreign Fund I 151,739 9.95 1,509,799
MasterWorks S&P 500 Stock Fund 571,472 20.39 11,652,313
------------
15,838,933
Homestake PIMCO Total Return Fund, at fair value 30,870 10.88 336,010
Fixed Income Fund:
Guaranteed Investment Contracts, at contract value:
Allstate Life Insurance Company 2,014,618
Crown Life Insurance Company 182,215
John Hancock Mutual Life Insurance Company 1,666,061
Merrill Lynch Income Accumulation Fund, at fair value 825,112 13.99 11,547,373
-------------
15,410,267
Participant loans, at book value, which
approximates fair value 2,274,014
-------------
Total investments $ 64,767,434
=============
</TABLE>
11
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
_______
9. Investments, continued:
<TABLE>
<CAPTION>
Number Value
of Per Fair
1996 Units Unit Value
---- --------- ------- -----------
<S> <C> <C> <C>
Barclays Global Investors Investment Funds, at fair value:
Barclays Global Investors Asset Allocation Fund 455,816 $ 21.51 $ 9,804,606
Barclays Global Investors Lifepath Funds 446,861 13.32 5,950,697
Barclays Global Investors Money Market Fund 1,064,698 1.00 1,064,698
------------
16,820,001
Homestake Mining Company Stock Fund, at fair value 1,651,940 6.39 10,547,924
Mutual Funds, at fair value:
Neuberger & Berman Guardian Trust Fund 105,276 15.87 1,670,723
Templeton Foreign Fund I 129,175 10.36 1,338,252
Barclays Global Investors S&P 500 Stock Fund 502,128 15.91 7,988,852
------------
10,997,827
Fixed Income Fund:
Guaranteed Investment Contracts, at contract value:
Allstate Life Insurance Company 2,014,618
Crown Life Insurance Company 702,059
John Hancock Mutual Life Insurance Company 3,168,621
Barclays Global Investors Income Accumulation Fund,
at fair value 896,892 13.14 11,786,067
-------------
17,671,365
Confederation Life Guaranteed Investment Contracts,
at contract value (see Notes 11 and 13) 3,089,453
-------------
Participant loans, at book value, which
approximates fair value 2,145,158
-------------
Total investments $ 61,271,728
=============
</TABLE>
12
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
9. Investments, continued:
All earnings on the investment funds are credited to each fund daily.
These earnings include interest, dividends, and net appreciation
(depreciation) in fair value.
The Asset Allocation Fund invests in a changing mix of stocks, bonds,
and money market securities and aims for a high level of total return
over the long term, consistent with reasonable risk.
The Lifepath Funds invest in a changing mix of U.S. and international
stocks, bonds, and money market securities and aim for greater growth
potential in early years and then gradually adjust its asset mix to
lower-risk investments over time.
The Money Market Fund invests in short-term, high-quality fixed income
securities.
The Homestake Mining Company Stock Fund invests in shares of Homestake
Mining Company.
The Neuberger & Berman Guardian Trust Fund is a growth and income fund
that emphasizes investments in stocks of established, high quality
companies considered to be under valued in comparison to stocks of
similar companies.
The Templeton Foreign Fund I seeks long-term capital growth through a
flexible policy of investing in stocks and debt obligations of companies
and governments outside the United States.
The S&P 500 Stock Fund is a mutual fund that invests in substantially
the same stocks in the same percentage weightings as the Standard &
Poor's 500 Composite Stock Price Index and seeks to approximate as
closely as practicable the rate of return of that index.
The Homestake PIMCO Total Return Fund is a broad market bond fund which
invests in a diversified portfolio of fixed income securities with
varying maturities. The fund was added as an investment option on May 1,
1997.
The Fixed Income Fund consists of guaranteed investment contracts
previously purchased by the Plan from insurance companies and shares in
the Merrill Lynch Income Accumulation Fund. The Income Accumulation Fund
invests primarily in guaranteed investment contracts, synthetic
guaranteed investment contracts and U.S. Treasury and agency securities.
13
<PAGE>
9. Investments, continued:
Guaranteed investment contracts are stated at contract value, which
approximates fair value. The average yield and the crediting interest
rate of the contracts as of December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Average Yield Crediting Interest Rate
Insurance Co. Contract No. For 1997 For 1996 As of 12/31/97 As of 12/31/96
------------- ------------ -------- -------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Allstate Life GA-5530 5.46 5.46 5.46 5.46
Crown Life 9005866 4.24 4.11 4.07 3.98
John Hancock
Mutual Life GAC-7163 5.16 5.16 5.16 5.16
</TABLE>
Guaranteed investment contracts of Confederation Life Insurance Company
were separated from the Fixed Income Fund in a separate fund that was
liquidated in 1997, as detailed in Note 11.
14
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
__________
10. Changes in Net Assets Available for Benefits by Investment Type:
During the year ended December 31, 1997, changes in net assets available
for benefits by participant-designated investment types were as follows:
<TABLE>
<CAPTION>
Barclays Barclays Neuberger
Global Investors Global & Berman
Asset Investors Guardian Templeton
Allocation Lifepath Trust Foreign
Fund Funds Fund Fund I
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Interest and dividends $ 202,953 $ 202,178
Net appreciation (depreciation) in the
fair market value of investments $ 2,091,194 $ 977,217 54,954 (109,533)
Contributions:
Company, in cash 246,553 230,418 93,301 77,832
Participants, in cash 331,767 334,771 144,662 126,355
Transfers in from other plans 156,500 16,682 348,729 4,234
----------------------------------------------------------------------
Total additions 2,826,014 1,559,088 844,599 301,066
----------------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid to participants 1,213,654 277,196 201,513 48,529
Transfers out to other plans 9,550 738 3,538 628
----------------------------------------------------------------------
Total deductions 1,223,204 277,934 205,051 49,157
----------------------------------------------------------------------
Interfund transfers (451,543) 250,658 366,550 (80,362)
----------------------------------------------------------------------
Net increase (decrease) 1,151,267 1,531,812 1,006,098 171,547
Net assets available for benefits:
Beginning of year 9,804,606 5,950,697 1,670,723 1,338,252
----------------------------------------------------------------------
End of year $ 10,955,873 $ 7,482,509 $ 2,676,821 $ 1,509,799
======================================================================
<CAPTION>
Confederate
Barclays Global Life
MasterWorks Investors Fixed Guaranteed
S&P 500 Money Income Investment
Fund Marekt Fund Fund Contracts
------------ ----------- ---------- ----------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Interest and dividends $ 412,793 $ 164,452 $ 954,294 $211,981
Net appreciation (depreciation) in the
fair market value of investments 2,355,780
Contributions:
Company, in cash 409,819 56,870 287,907
Participants, in cash 605,440 135,447 360,494
Transfers in from other plans 53,496 2,003,677 20,647
----------------------------------------------------------------------
Total additions 3,837,328 2,360,446 1,623,342 211,981
-------------------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid to participants 413,227 1,229,486 3,131,420
Transfers out to other plans 7,483 23,471 26,493
-------------------------------------------------------------------------
Total deductions 420,710 1,252,957 3,157,913
-------------------------------------------------------------------------
Interfund transfers 246,843 2,710,235 (737,905) (3,301,435)
-------------------------------------------------------------------------
Net increase (decrease) 3,663,461 3,817,724 (2,272,476) (3,089,454)
Net assets available for benefits:
Beginning of year 7,988,852 1,064,698 17,682,743 3,089,454
-------------------------------------------------------------------------
End of year $ 11,652,313 $ 4,882,422 $ 15,410,267 $ -
=========================================================================
<CAPTION>
Homestake Homestake
PIMCO Mining
Total Company Short Term
Return Stock Participant Investment
Fund Fund Loans Account Total
---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Interest and dividends $ 121,917 $ 206,459 $ 19,247 $ 2,496,274
Net appreciation (depreciation) in the
fair market value of investments $ 8,668 (3,867,556) 1,510,724
Contributions: -
Company, in cash 1,498 198,664 (87,406) 1,515,456
Participants, in cash 2,025 267,656 12,582 2,321,199
Transfers in from other plans 9,853 190,922 2,804,740
--------------------------------------------------------------------------------------
Total additions 12,191 (3,269,466) 397,381 (55,577) 10,648,393
--------------------------------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid to participants 507,016 300,553 97 7,322,691
Transfers out to other plans 185 6,135 78,221
--------------------------------------------------------------------------------------
Total deductions 507,201 300,553 6,232 7,400,912
--------------------------------------------------------------------------------------
Interfund transfers 323,819 576,906 32,028 64,206 -
--------------------------------------------------------------------------------------
Net increase (decrease) 336,010 (3,199,761) 128,856 2,397 3,247,481
Net assets available for benefits:
Beginning of year - 10,787,167 2,145,158 92,277 61,614,627
--------------------------------------------------------------------------------------
End of year $ 336,010 $ 7,587,406 $ 2,274,014 $ 94,674 $ 64,862,108
======================================================================================
</TABLE>
15
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
11. Confederation Life Guaranteed Investment Contracts:
Confederation Life Insurance Company (CLIC) was seized by insurance
regulators on August 12, 1994, to protect the financial interest of all
policyholders. On August 18, 1994, the Plan suspended withdrawals and
transfers by participants of amounts in the Plan held by CLIC and froze
the value of its CLIC guaranteed investment contracts at their
then-current book values (cost plus accrued interest through August 12,
1994). The Plan did not accrue any interest on these contracts after
they were frozen. These frozen contracts were segregated from the Fixed
Income Fund into a separate frozen fund.
A Rehabilitation Plan was submitted to the Michigan state court in July
1996 and was finally approved by the court in November 1996.
The Rehabilitation Plan offered several payout options to CLIC
guaranteed investment contract holders. In March 1997, the Homestake
Mining Company Savings Plan elected a payout which provided for payment
of the entire value at the end of May 1997. Pursuant to the elected
payout, approximately 107% of the August 12, 1994 account balances were
returned to the Plan by the end of May 1997. Each participant's account
balances formerly held by CLIC were then reinvested in accordance with
each participant's instructions and the separate, "frozen" fund was
then liquidated and terminated.
12. Acceleration of Vesting Percentages:
Due to the cessation of mining at the McLaughlin mine on June 28, 1996,
the employment of a number of Plan participants was terminated during
the second quarter of 1996. In accordance with Plan Amendment No. 4,
effective January 1, 1996, the vesting percentages of all such
McLaughlin participants whose employment was terminated and whose
vesting percentages were less than 100% were accelerated to 100% upon
termination.
13. Pension and Welfare Benefits Administration:
In April 1997, the Pension and Welfare Benefits Administration
("PWBA"), a division of the United States Department of Labor, began
an audit of the Homestake Mining Company Savings Plan to investigate
whether the purchase and subsequent holding of guaranteed investment
contracts issued to the Savings Plan by CLIC was consistent with the
requirements of ERISA, and whether one or more Savings Plan
fiduciaries might be liable for unspecified damages. The PWBA
completed its audit and closed its investigation in October 1997. No
claims have been made and no actions have been taken by the PWBA
arising out of the audit and investigation. The Company believes that
the PWBA does not contemplate any such claims or action.
16
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
14. Subsequent Events:
Acceleration of Vesting Percentages:
Homestake Mine
Due to the restructuring at the Homestake mine on January 27, 1998, the
employment of a number of Plan participants was terminated. In
accordance with Plan Amendment Number 8, effective January 27, 1998,
the vesting percentages of all such Homestake mine participants whose
employment was terminated and whose vesting percentages were less than
100% were accelerated to 100% upon termination.
Pinson Mine
Due to the restructuring at the Pinson mine on February 16, 1998, the
employment of a number of Plan participants was terminated. In
accordance with Plan Amendment Number 9, effective February 16, 1998,
the vesting percentages of all such Pinson mine participants whose
employment was terminated and whose vesting percentages were less than
100% were accelerated to 100% upon termination.
17
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
as of December 31, 1997
<TABLE>
<CAPTION>
(c) Description of
Investment including
(b) Identity of Maturity Date, Rate
Issuer, Borrower, of Interest,
Lessor, or Collateral, Par (e) Current
(a) Similar Party or Maturity Value (d) Cost Value
<S> <C> <C> <C>
* Barclays Global Investors Barclays Global Investors Asset Allocation Fund
( 415,783 units) $7,289,518 $10,955,873
Barclays Global Investors Lifepath 2000 Fund
( 148,294 units) 1,547,635 1,966,375
Barclays Global Investors Lifepath 2010 Fund
( 104,006 units) 1,161,757 1,571,542
Barclays Global Investors Lifepath 2020 Fund
( 132,039 units) 1,599,163 2,183,929
Barclays Global Investors Lifepath 2030 Fund
( 43,679 units) 549,904 769,625
Barclays Global Investors Lifepath 2040 Fund
( 52,687 units) 716,514 991,038
* Barclays Global Investors Barclays Global Investors Money Market Fund
( 4,882,422 units) 4,882,422 4,882,422
* Merrill Lynch & Co. Homestake Mining Company Stock Fund
( 1,832,707 units) 12,721,622 7,587,406
Neuberger & Berman Management, Inc. Neuberger & Berman Guardian Trust
( 154,730 units) 2,560,084 2,676,821
Franklin Templeton Distributors, Inc. Templeton Foreign Fund I
( 151,739 units) 1,542,701 1,509,799
* Barclays Global Investors MasterWorks S&P 500 Stock Fund
( 571,472 units) 7,965,033 11,652,313
Pacific Investment Management Company Homestake PIMCO Total Return Fund
( 30,870 units) 328,145 336,010
Allstate Life Insurance Company GIC (maturing 11/12/98, 5.46%) 2,014,618 2,014,618
Crown Life Insurance Company GIC (maturing 03/03/98, 4.07%) 182,215 182,215
John Hancock Mutual Life
Insurance Company GIC (maturing 06/30/98, 5.16%) 1,666,061 1,666,061
* Merrill Lynch & Co. Merrill Lynch Income Accumulation
Fund ( 825,112 units) 11,533,413 11,547,373
* Participant notes Repayable over a term of up to five
years at an interest rate set
at the time of issue of the loan.
Rate during 1997 ranged from
6.89% to 11% 2,274,014 2,274,014
-------------- ---------------
* Represents parties-in-interest to Plan $ 60,534,819 $ 64,767,434
============== ===============
</TABLE>
Note: GIC has been used above as an abbreviation for Guaranteed Investment
Contract.
18
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1997
________
<TABLE>
<CAPTION>
(c) Description of Assets
(b) Identity of (Include Interest Rate and (d) Purchase (e) Selling (f) Cost
(a) Party Involved Maturity in Case of a Loan) Price Price of Asset
- -------------------- --------------------------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
* Barclays Global Investors Asset Allocation Fund $ 1,635,063 - -
- $ 2,574,990 $ 1,818,303
* Barclays Global Investors Money Market Fund $ 7,129,024 - -
- $ 3,311,300 $ 3,311,300
* Barclays Global Investors MasterWorks S & P 500 Stock Fund $ 2,677,246 - -
- $ 1,369,565 $ 958,404
Confederation Life
Insurance Co Guaranteed Investment Contract - $ 3,301,435 $ 3,301,435
* Merrill Lynch & Co. Fixed Income Fund $ 3,764,716 - -
- $ 6,991,486 $ 6,991,486
* Merrill Lynch & Co. Homestake Mining Company Stock Fund $ 4,706,736 - -
- $ 4,160,857 $ 4,844,830
<CAPTION>
(g) Value of (h) Net (i) Number
(c) Description of Assets Asset on Gain of
(b) Identity of (Include Interest Rate and Transaction or Sales/
(a) Party Involved Maturity in Case of a Loan) Date (Loss) Purchases
- -------------------- --------------------------- ------------- ---------- -----------
<S> <C> <C> <C> <C>
* Barclays Global Investors Asset Allocation Fund $ 1,635,063 - 114
$ 2,574,990 $ 756,687 94
* Barclays Global Investors Money Market Fund $ 7,129,024 - 58
$ 3,311,300 - 120
* Barclays Global Investors MasterWorks S & P 500 Stock Fund $ 2,677,246 - 147
$ 1,369,565 $ 411,161 70
Confederation Life
Insurance Co Guaranteed Investment Contract $ 3,301,435 - 3
* Merrill Lynch & Co. Fixed Income Fund $ 3,764,716 - 96
$ 6,991,486 - 121
* Merrill Lynch & Co. Homestake Mining Company Stock Fund $ 4,706,736 - 138
$ 4,160,857 $ (683,973) 87
</TABLE>
*Represents parties-in-interest to plan.
19
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in (i) Registration Statement of
Homestake Mining Company (333-17357) and (ii) Post-Effective Amendment No. 5 to
the Registration Statement of Homestake Mining Company on Form S-8 (File No.
2-90903) of our report dated June 9, 1998, on our audits of the financial
statements and financial statement schedules of the Homestake Mining Company
Savings Plan as of December 31, 1997 and 1996, and for the year ended December
31, 1997, which report is included in this Annual Report on Form 11-K.
/s/ Coopers & Lybrand L.L. P.
- ---------------------------------------
COOPERS & LYBRAND L.L.P.
San Francisco, California
June 25, 1998
