<PAGE>
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 401(k)
RETIREMENT 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 401(k) RETIREMENT 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 401(k) RETIREMENT SAVINGS PLAN
-------
FINANCIAL STATEMENTS
as of December 31, 1997 and 1996
and for the year ended December 31, 1997
<PAGE>
HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN
-------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Pages
-----
<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 5-12
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1997 13
Item 27d - Schedule of Reportable Transactions for the year ended December 31, 1997 14
</TABLE>
<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 401(k) Retirement 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 401(k) RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
as of December 31, 1997 and 1996
<TABLE>
<CAPTION>
ASSETS 1997 1996
- ------
<S> <C> <C>
Investments:
Homestake Mining Company Stock Fund $ 486,195 $ 468,218
Norwest Advantage Income Equity Fund 2,953,238 1,643,989
Norwest Advantage Growth Balanced Fund 2,921,473 2,200,445
Norwest Stable Return Fund 2,899,304 2,933,565
Norwest Short Term Investment Fund 639,333 446,817
Norwest Advantage Growth Equity Fund 1,595,425 886,643
Participant loans 691,862 533,519
----------------- ---------------
Total investments 12,186,830 9,113,196
LIABILITIES
Amounts due brokers for securities purchased - 2,592
----------------- ---------------
Net assets available for benefits $ 12,186,830 $ 9,110,604
================= ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
HOMESTAKE 401(k) RETIREMENT 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 $ 274,145
Net appreciation (depreciation) in fair value of investments 1,079,688
----------------
1,353,833
----------------
Contributions:
Company, in cash 497,414
Participants, in cash 1,666,150
----------------
2,163,564
----------------
Total additions 3,517,397
----------------
Deductions from net assets attributed to:
Benefits paid to participants 211,217
Transfers out to other plans 229,954
----------------
Total deductions 441,171
----------------
Net increase 3,076,226
Net assets available for benefits:
Beginning of year 9,110,604
----------------
End of year $ 12,186,830
================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
1. Description of Plan:
The following description of the Homestake 401(k) Retirement Savings
Plan (the Plan) provides only general information. Participants should
refer to the full Plan document for a more complete description of the
Plan's provisions.
General:
The Plan is a defined contribution profit sharing plan (designed to be
qualified under Internal Revenue Code Sections 401(a) and 401(k))
covering all employees of the Company's mining operations in Lead, South
Dakota who are covered by a collective bargaining agreement and have
completed three months of service. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA), as
amended.
The Plan is administered by the Company. Effective January 1, 1997, the
Plan's trustee, recordkeeper, and investment advisor is Norwest Bank
Minnesota, N.A. ("Norwest Bank"). Prior to January 1, 1997, the Plan's
trustee, recordkeeper, and investment advisor was Norwest Bank, South
Dakota.
Contributions:
Participation is voluntary. Participants may make pre-tax contributions
only of between 1% and 16% of compensation subject to Internal Revenue
Code limitations. Participant contributions not exceeding 6% of wages or
of salary are matched 35% 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 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
1. Description of the 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.
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 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.
Distribution of benefits can be in the form of single lump-sum cash
payments or partial payments made in a lump-sum with the remainder paid
later.
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.
6
<PAGE>
HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
1. Description of the Plan, continued:
Forfeitures:
Forfeitures of Company contributions made on behalf of former employees
whose employment was terminated before such contributions were vested
are allocated to active participants at the end of each Plan year. The
forfeitures are allocated in proportion to the Company contributions
made to the individual participant accounts during the Plan year.
2. Significant Accounting Policies:
Basis of Accounting:
The financial statements of the Plan are prepared under the accrual
basis of accounting in accordance with generally accepted accounting
principles.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of net assets available for
benefits at the date of the financial statements and the reported
amounts of changes in net assets available for benefits during the
reporting period. Actual results could differ from those estimates.
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.
Participant loans 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.
7
<PAGE>
HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
2. Significant Accounting Policies, continued:
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 Norwest Advantage Income Equity Fund,
the Norwest Advantage Growth Balanced Fund, the Norwest Stable Return
Fund, the Norwest Short Term Investment Fund, and the Norwest Advantage
Growth Equity Fund are made in cash.
Net Appreciation (Depreciation) in Fair Value of Investments:
The Plan presents in the statement of changes in net assets available
for benefits the net appreciation (depreciation) in the fair value of
its investments, which consists of realized gains (losses) and the
unrealized appreciation (depreciation).
3. Risks and Uncertainties:
All Plan investments are managed by Norwest Bank. Ultimate Plan
performance is dependent upon the ability of Norwest Bank to manage the
funds.
A 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.
8
<PAGE>
HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-----
5. Plan Tax Status:
The Plan obtained its latest determination letter in July 1991, 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.
6. Related Party Transactions:
Certain Plan investments are units in investment funds managed by the
Trustee. Therefore, these transactions are transactions with
parties-in-interest.
7. Administrative Expenses:
Certain administrative expenses of the Plan are paid for by the Company.
9
<PAGE>
HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
_______
8. Investments
Investments at December 31, 1997 and 1996 are comprised of the following:
<TABLE>
<CAPTION>
December 31, 1997
-----------------------------------------------------------------
Number of Value
Shares or Per Fair
Units Held Unit Value
<S> <C> <C> <C>
Homestake Mining Company Stock Fund 54,783 $ 8.87 $ 486,195
Norwest Advantage Income Equity Fund 79,947 36.94 2,953,238
Norwest Advantage Growth Balanced Fund 113,543 25.73 2,921,473
Norwest Stable Return Fund 115,469 25.11 2,899,304
Norwest Short Term Investment Fund 639,333 1.00 639,333
Norwest Advantage Growth Equity Fund 49,733 32.08 1,595,425
Participant loans - - 691,862
-----------------
$ 12,186,830
=================
<CAPTION>
December 31, 1996
-----------------------------------------------------------------
Number of Value
Shares or Per Fair
Units Held Unit Value
<S> <C> <C> <C>
Homestake Mining Company Stock Fund 40,117 $ 11.67 $ 468,218
Norwest Advantage Income Equity Fund 54,934 29.93 1,643,989
Norwest Advantage Growth Balanced Fund 94,404 23.30 2,200,445
Norwest Stable Return Fund 124,407 23.58 2,933,565
Norwest Short Term Investment Fund 446,817 1.00 446,817
Norwest Advantage Growth Equity Fund 29,800 29.77 886,643
Participant loans - - 533,519
-----------------
$ 9,113,196
=================
</TABLE>
10
<PAGE>
HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
8. Investments, continued:
All earnings on the investment funds are reinvested in and credited to
each fund daily. These earnings include interest, dividends, and net
appreciation (depreciation) in fair value.
The Homestake Mining Company Stock Fund invests in shares of Homestake
Mining Company.
The Advantage Income Equity Fund's objective is to achieve a high level
of current income with moderate appreciation through investment in
equity securities.
The Advantage Growth Balanced Fund's objective is to maximize growth
through appreciation from quality stocks, while moderating risk by
investing in intermediate maturity bonds, including corporate, U.S.
government and mortgage-backed and related securities.
The Stable Return Fund's objective is to achieve reasonable and
consistent current income by investing in fixed income securities and
other investments.
The Short Term Investment Fund consists of short term and floating rate
investments.
The Advantage Growth Equity Fund invests in U.S. and international
equity securities.
9. Subsequent Events:
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 5, effective January 27, 1998, the
vesting percentages of all such Plan participants whose employment was
terminated and whose vesting percentages were less than 100% were
accelerated to 100% upon termination.
Norwest Corporation Merger with Wells Fargo & Company
On June 8, 1998 Wells Fargo & Company and Norwest Corporation, the
parent company of Norwest Bank, announced their intention to merge by
October 1998.
Company Matching Contribution
Following the May 31, 1998 ratification of a new collective bargaining
agreement, the Company's matching contribution will be increased from
35% to 50% of a participant's contributions, not exceeding 6% of wages
or of salary, effective January 1, 1999.
11
<PAGE>
HOMESTAKE 401(k) RETIREMENT 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 are allocated among the Plan's investment funds as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1997
----------------------------------------------------------------------------
Norwest
Homestake Advantage Norwest
Mining Income Advantage Norwest
Company Equity Growth Stable
Stock Stock Balanced Return
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Interest and dividends $ 5,501 $ 30 $ 58 $ 183,787
Net appreciation (depreciation) in the fair
value of investments (183,959) 576,459 479,135 -
Contributions:
Company, in cash 12,805 125,635 106,090 87,247
Participants, in cash 49,717 439,070 316,832 316,262
-------------- --------------- --------------- --------------
Total Additions (115,936) 1,141,194 902,115 587,296
-------------- --------------- --------------- --------------
Deductions to net assets attributed to:
Benefits paid to participants 4,200 26,977 19,207 29,365
Transfers out to other plans 1,100 75,254 27,373 99,301
-------------- --------------- --------------- --------------
Total Deductions 5,300 102,231 46,580 128,666
-------------- --------------- --------------- --------------
Interfund Transfers 141,805 270,286 (134,507) (492,891)
-------------- --------------- --------------- --------------
Net increase (decrease) 20,569 1,309,249 721,028 (34,261)
Net assets available for benefits:
Beginning of year 465,626 1,643,989 2,200,445 2,933,565
--------------- --------------- --------------- --------------
End of year $486,195 $2,953,238 $2,921,473 $2,899,304
============== =============== =============== ==============
<CAPTION>
Norwest
Advantage
Short Term Growth
Investment Equity Participant
Fund Fund Loans Total
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Interest and dividends $ 30,510 $ 5 $ 54,254 $ 274,145
Net appreciation (depreciation) in the fair
value of investments - 208,053 - 1,079,688
Contributions:
Company, in cash 68,431 97,206 - 497,414
Participants, in cash 227,152 317,117 - 1,666,150
-------------- ----------------- --------------- -----------------
Total Additions 326,093 622,381 54,254 3,517,397
-------------- ----------------- --------------- -----------------
Deductions to net assets attributed to:
Benefits paid to participants 14,667 9,132 107,669 211,217
Transfers out to other plans 4,943 21,983 - 229,954
-------------- ----------------- --------------- -----------------
Total Deductions 19,610 31,115 107,669 441,171
-------------- ----------------- --------------- -----------------
Interfund Transfers (113,967) 117,516 211,758 -
-------------- ----------------- --------------- -----------------
Net increase (decrease) 192,516 708,782 158,343 3,076,226
Net assets available for benefits:
Beginning of year 446,817 886,643 533,519 9,110,604
-------------- ----------------- --------------- -----------------
End of year $639,333 $1,595,425 $691,862 $12,186,830
============= ================= =============== =================
</TABLE>
12
<PAGE>
HOMESTAKE 401(k) RETIREMENT 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> <C>
* Norwest Bank Homestake Mining Company Stock
Fund (54,783 units) $ 722,916 $ 486,195
* Norwest Bank Norwest Advantage Income
Equity Fund
(79,947 units) 2,226,016 2,953,238
* Norwest Bank Norwest Advantage Growth
Balanced Fund
(113,543 units) 2,397,403 2,921,473
* Norwest Bank Norwest Stable Return Fund
(115,469 units) 2,361,971 2,899,304
* Norwest Bank Norwest Short Term
Investment Fund
(639,333 units) 639,333 639,333
* Norwest Bank Norwest Advantage Growth
Equity Fund (49,733 units) 1,523,068 1,595,425
* Participant notes (Repayable over five years
unless it is for purchase
of a principal residence
which is repayable over ten
years. Rate during 1997
ranged from 7% to 10%.) 691,862 691,862
------------- --------------
$10,562,569 $12,186,830
============= ==============
* Represents party-in-interest to Plan.
</TABLE>
13
<PAGE>
HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1997
<TABLE>
<CAPTION>
(c) Description of Asset
(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> <C>
* Norwest Bank Homestake Mining Company
Stock Fund $ 346,397 - -
- $200,434 $200,434
* Norwest Bank Advantage Income Equity Fund $1,161,722 - -
- $335,753 $252,523
* Norwest Bank Advantage Growth Balanced Fund $ 734,027 - -
- $294,632 $232,831
* Norwest Bank Stable Return Fund $ 501,726 - -
- $719,666 $592,352
* Norwest Bank Advantage Growth Equity Fund $ 895,587 - -
- $234,359 $209,677
* Norwest Bank Short-Term Investment Fund $ 376,309 - -
- $184,998 $184,998
<CAPTION>
(g) Current
Value of (h) Net (i) Number
(c) Description of Asset 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> <C>
* Norwest Bank Homestake Mining Company
Stock Fund $ 346,397 - 64
$ 200,434 - 54
* Norwest Bank Advantage Income Equity Fund $1,161,722 - 92
$ 335,753 $ 83,230 49
* Norwest Bank Advantage Growth Balanced Fund $ 734,027 - 68
$ 294,632 $ 61,801 63
* Norwest Bank Stable Return Fund $ 501,726 - 54
$ 719,666 $127,314 68
* Norwest Bank Advantage Growth Equity Fund $ 895,587 - 78
$ 234,359 $ 24,682 44
* Norwest Bank Short-Term Investment Fund $ 376,309 - 45
$ 184,998 - 49
* Represents party-in-interest to Plan.
</TABLE>
14
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.
33-32174) of our report dated June 9, 1998, on our audits of the financial
statements and financial statement schedules of the Homestake 401(k) Retirement
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
