UNITED STATES
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
Date of Report (Date of earliest event reported): June 5, 1998 (April 29, 1998)
HOMESTAKE MINING COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 1-8736 94-2934609
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation)
650 California Street, San Francisco, California 94108-2788
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 981-8150
http://www.homestake.com
<PAGE>
Item 5. Other Items
1. Offer to acquire minority interests in Prime Resources Group Inc.
On May 25, 1998 the Registrant announced that it had proposed to the
Board of Directors of Prime Resources Group Inc. ("Prime"), the
acquisition by Homestake of the 49.4% of Prime held by the public and
not already owned by Homestake. Under the terms of the offer, Prime
shareholders would receive 0.675 Homestake common shares or 0.675
Homestake Canada Inc. ("HCI") exchangeable shares for each Prime share
held by them. Each HCI exchangeable share would have dividend and
voting rights equivalent to those of one Homestake common share and
would be exchangeable for one Homestake common share at any time at
the option of the holder.
A copy of the Registrant's May 25, 1998 news release is attached as
Exhibit 99.2.
2. Acquisition of Plutonic Resources Limited
As previously reported on the Registrant's Form 8-K filed on May 12,
1998, on April 30, 1998 Registrant consummated the acquisition of
Plutonic Resources Limited ("Plutonic"), a publicly-traded Australian
gold producer, by an exchange of common stock for common stock.
Shareholders of Registrant voted on and approved the acquisition of
Plutonic at a Special Meeting of Shareholders held on April 29, 1998.
Shareholder votes were as follows:
Votes For Votes Against Abstentions
--------- ------------- -----------
79,505,401 1,040,836 603,751
Registrant issued 64,355,692 common shares, including 63,852,400
shares for all Plutonic fully-paid ordinary shares outstanding, and
503,292 for the Plutonic partly-paid shares and options outstanding.
As of close of business on June 5, 1998, there were 211,155,489
Homestake common shares outstanding.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
7(c) Exhibits
99.2 News Release, dated May 25, 1998 announcing the Registrant's
offer to acquire the Prime Resources Group Inc. minority
interests.
<PAGE>
SIGNATURE
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 thereunto duly authorized.
Dated: June 5, 1998
HOMESTAKE MINING COMPANY
(Registrant)
By: /s/ David W. Peat
-----------------
David W. Peat
Vice President and Controller
EXHIBIT 99.2
News Release
Contacts: Gene G. Elam Michael A. Steeves
Vice President, Finance and Director, Investor Relations
Chief Financial Officer 415-983-8169
415-981-8150
HOMESTAKE OFFERS TO ACQUIRE FOR STOCK
REMAINING 49.4% PUBLIC INTEREST IN PRIME RESOURCES
--------------------------------------------------
SAN FRANCISCO, CA, May 25, 1998 - Homestake Mining Company (NYSE: HM)
announced today that it has proposed to the Board of Directors of Prime
Resources Group Inc. (TSE, VSE, AMEX: PRU) the acquisition by Homestake of the
49.4% of Prime held by the public and not already owned by Homestake. Under the
terms of the offer, Prime shareholders would receive 0.675 Homestake common
shares -- or 0.675 Homestake exchangeable shares which will be issued by
Homestake Canada Inc. (HCI) -- for each Prime share held by them. The offer
represents a 12.5% premium over Prime's closing price on May 22.
Homestake has proposed that the transaction would be completed as a
plan of arrangement under the Company Act (British Columbia) and would be tax
deferred to most Canadian shareholders who elect to receive the Homestake
exchangeable shares. In addition, the Homestake exchangeable shares will not be
foreign property for purposes of Canadian tax law.
Homestake anticipates that Prime will soon convene a meeting of its
Board of Directors to consider Homestake's offer. It is anticipated that Prime
will establish a committee of independent directors, assisted by financial and
legal advisors, to properly review this acquisition proposal.
"This is an outstanding opportunity for the minority shareholders of
Prime to receive a fair premium for their shares and to participate in the
potential upside of our aggressive exploration and acquisition growth program,
world class ore bodies and 16 operating mines in the U.S., Australia, Canada and
Chile," said Jack E. Thompson, President and Chief Executive Officer of
Homestake. "For Homestake, the transaction will simplify our corporate
structure, unify our presence in Canada, reduce costs associated with
maintaining a separate public company, add to our equity interest in low cost
production and reserves, provide certain tax advantages and reinforce our
position as one of the world's leading gold mining companies."
<PAGE>
The offer is subject to customary conditions, including the approval of
British Columbia Supreme Court and the Prime Board of Directors and the approval
by the required percentage of Prime's minority shareholders present and voting
at a special shareholder meeting.
Each Homestake exchangeable share which will be issued by Homestake
Canada Inc. will (a) be exchangeable for one share of Homestake's common stock,
(b) entitle its holders to receive dividends economically equivalent to
dividends paid on Homestake's common stock and (c) through the operation of
trustee arrangements, carry the right to vote at Homestake stockholder meetings.
An application will be made to list the Homestake exchangeable shares on The
Toronto Stock Exchange.
Prime Resources is a precious metals company that owns and operates
mines in Canada. It owns 100% of the Eskay Creek mine, one of the highest grade
gold and silver mines in the world, and 100% of the Snip mine, a small,
high-grade gold mine that is expected to cease production in the first quarter
of 1999. Both are underground mines located in northwestern British Columbia. In
1997, Prime's Eskay Creek mine produced 121,465 tons of ore containing 244,722
ounces of gold and 11.8 million ounces of silver, or 417,303 ounces of gold
equivalent. Total cash costs at Eskay Creek were $157 per equivalent ounce. In
1997, Prime's Snip mine produced 164,856 tons of ore that yielded 115,644 ounces
of gold. Total cash costs at Snip were $213 per equivalent ounce.
Homestake Canada Inc., a wholly owned subsidiary of Homestake Mining
Company of California, owns 50.6% of Prime's shares and has been contracted
by Prime to provide exploration, managerial and administrative services.
Homestake Mining Company is an international gold mining company with
substantial operations and exploration activities in the United States, Canada
and Australia. Homestake owns 50.6% of Prime Resources through Homestake's
wholly-owned subsidiary, Homestake Canada Inc. (HCI). Homestake also has active
exploration programs in Latin America, and development and/or evaluation
projects in Chile and Bulgaria. Homestake began gold mining operations over 120
years ago, and is the oldest listed company on the New York Stock exchange still
in its original business. It has received numerous industry environmental and
safety awards for its responsible environmental health and safety stewardships.
***
Certain statements contained in this press release that are not
statements of historical facts are "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
are based on beliefs of management, as well as assumptions made by and
information currently available to management.
Forward-looking statements include those preceded by the words "believe,"
"estimate," "expect," "intend," "will," and similar expressions, and include
reserves, estimates of future production, costs per ounce and commencement of
operations. Forward-looking statements are subject to risks, uncertainties and
other factors that could cause actual results to differ materially from expected
results. Some important factors and assumptions that could cause actual results
to differ materially from expected results are discussed below. Those listed are
not exclusive.
Reserve estimates are based on drilling results, past experience with
the property, experience of the person making the estimates and many other
factors. Reserve estimation is an interpretive process based on available data
and actual quality and characteristics of ore deposits can not be known until
mining has taken place.
Estimates of future production for particular properties and for the
Company as a whole are derived from annual mine plans that have been developed
based on mining experience, reserve estimates, assumptions regarding ground
conditions and physical characteristics of ore (such as hardness and
metallurgical characteristics), and expected rates and costs of production.
Actual production may vary for a variety of reasons, such as the factors
described above, ore mined varying from estimates of grade and metallurgical and
other characteristics, mining dilution, actions by labor, and government imposed
restrictions. Cash cost estimates are based on such things as past experience,
reserve and production estimates, anticipated mining conditions, estimated costs
of materials, supplies and utilities, and estimated exchange rates.
Estimates reflect assumptions about factors beyond the Company's
control, such as the time government agencies take in processing applications,
issuing permits and otherwise completing processes required under applicable
laws and regulations. Actual time to completion can vary significantly from
estimates.
Cost savings estimates are based on expected ability to eliminate
duplicative expenses, anticipated reduction in administrative facilities and
relocation of certain personnel. Actual cost savings may be lower than estimated
and realization of savings may be lower than expected.
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