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, 1998
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, 1999
<PAGE>
Item 1. Financial Statements and Exhibits
a. Financial Statements for the years ended December 31, 1998
and 1997 and Supplemental Schedules as of and for the year
ended December 31, 1998 and Independent Accountants'
Report.
b. Exhibit No. 23
Independent Accountants' Consent
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
-------
FINANCIAL STATEMENTS
as of December 31, 1998 and 1997
and for the year ended December 31, 1998
<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, 1998 and 1997 3
Statement of Changes in Net Assets Available for
Benefits for the Year Ended December 31, 1998 4
Notes to Financial Statements 5-16
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1998 17
Item 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1998 18
</TABLE>
1
<PAGE>
Report of Independent Accountants
Homestake Mining Company
San Francisco, CA
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Homestake Mining Company Savings Plan (the "Plan") at December 31, 1998
and December 31, 1997, and the changes in net assets available for benefits for
the year ended December 31, 1998, in conformity with generally accepted
accounting principles. 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 of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were conducted 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 and reportable transactions 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. These supplemental
schedules are the responsibility of the Plan's management. 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/ PricewaterhouseCoopers LLP
- ------------------------------
PRICEWATERHOUSECOOPERS LLP
San Francisco, CA
June 10, 1999
2
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1998 and 1997
(in thousands)
<TABLE>
<CAPTION>
ASSETS 1998 1997
<S> <C> <C>
Cash and cash equivalents: $ 99 $ 95
------------ -----------
Investments:
Barclays Global Investors Asset Allocation Fund 13,054 10,956
Barclays Global Investors Lifepath Funds 9,041 7,483
Neuberger & Berman Guardian Trust Fund 1,654 2,677
Templeton Foreign Fund I 1,129 1,510
MasterWorks S&P 500 Stock Fund 14,066 11,652
Barclays Global Investors Money Market Fund 4,437 4,882
Homestake Mining Company Stock Fund 10,958 7,587
Fixed Income Fund 15,199 15,410
Homestake PIMCO Total Return Fund 1,557 336
Participant loans 1,960 2,274
------------ -----------
Total investments 73,055 64,767
------------ -----------
Total assets 73,154 64,862
Net assets available for benefits $73,154 $64,862
============ ===========
</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, 1998
(in thousands)
<TABLE>
<CAPTION>
<S> <C>
Additions to net assets attributed to:
Interest and dividends $ 2,634
Net appreciation in the fair value of investments 6,462
----------
9,096
----------
Contributions:
Company, in stock 1,618
Participants, in cash 3,220
----------
4,838
----------
Total additions 13,934
----------
Deductions from net assets attributed to:
Benefits paid to participants 5,642
----------
Total deductions 5,642
----------
Net increase 8,292
Net assets available for benefits:
Beginning of year 64,862
----------
End of year $73,154
==========
</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. During the 1998 Plan
year, all Company matching contributions were made in Homestake Mining
Company common stock.
Vesting:
Participant contributions and any income (loss) thereon are fully vested
at all times. Company matching 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.
6
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
1. Description of Plan, continued:
Payment of Benefits, continued:
The Plan permits withdrawal of vested Company matching contributions
made prior to January 1, 1994; however, the right of any participant
who makes such a withdrawal to continue receiving Company matching
contributions is suspended for twelve months.
Distribution of benefits, except for certain participants who are
required to receive annuities, can be made, at the election of the
participant, in the form of a single lump-sum cash payment, partial
payment made in a lump-sum with the remainder paid later, or periodic
installments.
Participant Loans:
Participants may borrow from their vested accounts between $1,000 and
$50,000 but not more than 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 accounts in the Plan and repayments are made
through payroll deductions on at least a monthly basis.
Forfeitures:
Forfeitures of Company matching 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 1998 and 1997 Plan years, forfeitures were allocated to each
participant in proportion to the Company matching 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.
7
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
2. Significant Accounting Policies, continued:
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.
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).
8
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
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.
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. Effective October 1, 1997, Merrill Lynch also succeeded BGI
as manager and owner of the Income Accumulation Fund. The Fixed Income
Fund was a "hybrid" fund that consisted of guaranteed investment
contracts and shares of the Merrill Lynch Income Accumulation Fund. At
December 31, 1998, the Fixed Income Fund is made up entirely 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.
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.
Plan 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
matching 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.
9
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
5. 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.
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 costs associated with administering the Plan are paid directly
by the Company.
10
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
_______
8. Investments
Investments at December 31, 1998 and 1997 are comprised of the following:
<TABLE>
<CAPTION>
Number Value Fair
of Per Value
1998 Units Unit (in thousands)
---- ---------- ------ --------------
<S> <C> <C> <C>
Barclays Global Investors Investment Funds, at fair value:
* Barclays Global Investors Asset Allocation Fund 393,442 $33.18 $13,054
* Barclays Global Investors Lifepath Funds 497,144 18.19 9,041
* Barclays Global Investors Money Market Fund 4,436,789 1.00 4,437
------------
26,532
------------
* Homestake Mining Company Stock Fund, at fair value 2,596,598 4.22 10,958
------------
Mutual Funds, at fair value:
Neuberger & Berman Guardian Trust Fund 102,342 16.16 1,654
Templeton Foreign Fund I 134,527 8.39 1,129
* MasterWorks S&P 500 Stock Fund 571,567 24.61 14,066
------------
16,849
------------
Homestake PIMCO Total Return Fund, at fair value 130,769 11.91 1,557
------------
Fixed Income Fund:
* Merrill Lynch Income Accumulation Fund, at fair value 1,133,625 13.41 15,199
------------
Participant loans, at book value, which
approximates fair value 1,960
------------
Total investments $73,055
============
* Represents 5% or more of the net assets available for benefits.
</TABLE>
11
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
_______
8. Investments, continued
<TABLE>
<CAPTION>
Number Value Fair
of Per Value
1997 Units Unit (in thousands)
----- ----------- -------- -------------
<S> <C> <C> <C>
Barclays Global Investors Investment Funds, at fair value:
* Barclays Global Investors Asset Allocation Fund 415,783 $26.35 $10,956
* Barclays Global Investors Lifepath Funds 480,705 15.57 7,483
* Barclays Global Investors Money Market Fund 4,882,422 1.00 4,882
------------
23,321
------------
* Homestake Mining Company Stock Fund, at fair value 1,832,707 4.14 7,587
------------
Mutual Funds, at fair value:
Neuberger & Berman Guardian Trust Fund 154,730 17.30 2,677
Templeton Foreign Fund I 151,739 9.95 1,510
* MasterWorks S&P 500 Stock Fund 571,472 20.39 11,652
------------
15,839
------------
Homestake PIMCO Total Return Fund, at fair value 30,870 10.88 336
------------
Fixed Income Fund:
Guaranteed Investment Contracts, at contract value:
Allstate Life Insurance Company 2,015
Crown Life Insurance Company 182
John Hancock Mutual Life Insurance Company 1,666
* Merrill Lynch Income Accumulation Fund, at fair value 825,112 13.99 11,547
------------
15,410
------------
Participant loans, at book value, which
approximates fair value 2,274
------------
Total investments $64,767
============
</TABLE>
* Represents 5% or more of the net assets available for benefits.
12
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
8. 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 the early years of a participant's working life and then
gradually adjust the 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 undervalued 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 seeking 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 Fixed Income Fund consisted 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>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
8. 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, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
Average Yield Crediting Interest Rate
Insurance Co. Contract No. For 1998 For 1997 At Maturity As of 12/31/97
<S> <C> <C> <C> <C> <C>
Allstate Life GA-5530 5.46 5.46 5.46 5.46
Crown Life 9005866 3.13 4.24 3.13 4.07
John Hancock
Mutual Life GAC-7163 5.16 5.16 5.16 5.16
</TABLE>
All guaranteed investments contracts matured during 1998, and the
proceeds were reinvested in the Fixed Income Fund.
14
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
9. Changes in Net Assets Available for Benefits by Investment Type
(in thousands):
During the year ended December 31, 1998, 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 - - $147 $150
Net appreciation (depreciation) in the
fair market value of investments $2,812 $1,245 (111) (286)
Contributions:
Company, in stock - - - -
Participants, in cash 489 412 162 131
---------------------------------------------------------------
Total additions 3,301 1,657 198 (5)
---------------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid to participants 660 638 264 69
--------------------------------------------------------------
Total deductions 660 638 264 69
--------------------------------------------------------------
Interfund transfers (543) 539 (957) (307)
---------------------------------------------------------------
Net increase (decrease) 2,098 1,558 (1,023) (381)
Net assets available for benefits:
Beginning of year 10,956 7,483 2,677 1,510
---------------------------------------------------------------
End of year $13,054 $9,041 $1,654 $1,129
===============================================================
Table continued:
<CAPTION>
Barclays Global Homestake
Investors PIMCO
MasterWorks Money Fixed Total
S&P 500 Market Income Return
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Interest and dividends $ 833 $227 $ 871 $102
Net appreciation (depreciation) in the
fair market value of investments 2,361 - - (36)
Contributions:
Company, in stock - - - -
Participants, in cash 817 235 508 22
--------------------------------------------------------
Total additions 4,011 462 1,379 88
--------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid to participants 886 980 1,439 5
---------------------------------------------------------------
Total deductions 886 980 1,439 5
---------------------------------------------------------------
Interfund transfers (711) 73 (151) 1,138
---------------------------------------------------------------
Net increase (decrease) 2,414 (445) (211) 1,221
Net assets available for benefits:
Beginning of year 11,652 4,882 15,410 336
---------------------------------------------------------------
End of year $14,066 $4,437 $15,199 $1,557
===============================================================
Table continued:
<CAPTION>
Homestake
Mining
Company Short Term
Stock Participant Investment
Fund Loans Account Total
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Interest and dividends $ 104 $195 $ 5 $ 2,634
Net appreciation (depreciation) in the
fair market value of investments 477 - - 6,462
Contributions:
Company, in stock 1,722 - (104) 1,618
Participants, in cash 444 - - 3,220
----------------------------------------------------------
Total additions 2,747 195 (99) 13,934
----------------------------------------------------------
Deductions from net assets attributed to:
Benefits paid to participants 432 261 8 5,642
----------------------------------------------------------
Total deductions 432 261 8 5,642
----------------------------------------------------------
Interfund transfers 1,056 (248) 111 -
----------------------------------------------------------
Net increase (decrease) 3,371 (314) 4 8,292
Net assets available for benefits:
Beginning of year 7,587 2,274 95 64,862
-----------------------------------------------------------
End of year $10,958 $1,960 $99 $73,154
===========================================================
</TABLE>
15
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-------
10. Acceleration of Vesting Percentages:
Homestake Mine
On January 27, 1998, the Homestake mine was restructured and the
employment of a number of Plan participants was terminated. 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
On February 16, 1998, the Pinson mine was restructured and the
employment of a number of Plan participants was terminated. 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.
11. Subsequent Events:
Pinson Mine
On February 1, 1999, the Pinson mine discontinued mining operations and
the employment of a number of Plan participants was terminated. In
accordance with the Plan, 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.
Successor Trustee
On January 5, 1999, Charles Schwab Retirement Plan Services, Inc.
replaced Merrill Lynch & Co. as the Plan's recordkeeper and investment
advisor. In addition, Charles Schwab Trust Company replaced Merrill
Lynch Trust Company as Trustee. Charles Schwab Retirement Plan
Services, Inc. and Charles Schwab Trust Company continue to offer
investment products and services similar to the prior service
providers.
16
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
as of December 31, 1998
<TABLE>
<CAPTION>
(c) Description of
Investment including
(b) Identity of Maturity Date, Rate
Issuer, Borrower, of Interest, (e) Current
Lessor, or Collateral, Par (d) Cost Value
(a) Similar Party or Maturity Value (in thousands) (in thousands)
<S> <C> <C> <C> <C>
* Barclays Global Investors Barclays Global Investors Asset Allocation Fund $7,556 $13,054
( 393,442 units)
Barclays Global Investors Lifepath 2000 Fund 1,703 2,262
( 155,605 units)
Barclays Global Investors Lifepath 2010 Fund 1,173 1,650
( 95,351 units)
Barclays Global Investors Lifepath 2020 Fund 1,859 2,735
( 139,831 units)
Barclays Global Investors Lifepath 2030 Fund 705 1,013
( 47,366 units)
Barclays Global Investors Lifepath 2040 Fund 978 1,381
( 58,991 units)
* Barclays Global Investors Barclays Global Investors Money Market Fund 4,437 4,437
( 4,436,789 units)
* Merrill Lynch & Co. Homestake Mining Company Stock Fund 14,248 10,958
( 2,596,598 units)
Neuberger & Berman Management, Inc. Neuberger & Berman Guardian Trust 1,735 1,654
( 102,342 units)
Franklin Templeton Distributors, Inc. Templeton Foreign Fund I 1,349 1,129
( 134,527 units)
* Barclays Global Investors MasterWorks S&P 500 Stock Fund 9,385 14,066
( 571,567 units)
Pacific Investment Management Company Homestake PIMCO Total Return Fund 1,499 1,557
( 130,769 units)
* Merrill Lynch & Co. Merrill Lynch Income Accumulation 15,199 15,199
Fund ( 1,133,625 units)
* Participant notes (Repayable over a term of up to five 1,960 1,960
years unless it is for the purchase
of a principal residence which is
repayable over ten years.
Rate during 1998 ranged from
7% to 11%.)
--------------- ---------------
* Represents parties-in-interest to Plan $63,786 $73,055
=============== ===============
</TABLE>
17
<PAGE>
HOMESTAKE MINING COMPANY SAVINGS PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1998
($ in thousands)
________
<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> <C>
* Barclays Global Investors Asset Allocation Fund $1,944 - -
- $2,657 $1,677
* Barclays Global Investors Money Market Fund $4,255 - -
- $4,701 $4,701
Neuberger & Berman Neuberger & Berman Guardian Trust $1,240 - -
Management Inc. - $2,153 $2,065
* Barclays Global Investors MasterWorks S & P 500 Stock Fund $4,183 - -
- $4,130 $2,762
* Merrill Lynch & Co. Fixed Income Fund $7,452 - -
- $8,535 $8,535
* Merrill Lynch & Co. Homestake Mining Company Stock Fund $10,836 - -
- $8,047 $9,309
Table continued:
<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> <C>
* Barclays Global Investors Asset Allocation Fund $1,944 - 113
$2,657 $980 83
* Barclays Global Investors Money Market Fund $4,255 - 80
$4,701 - 122
Neuberger & Berman Neuberger & Berman Guardian Trust $1,240 - 103
Management Inc. $2,153 $88 65
* Barclays Global Investors MasterWorks S & P 500 Stock Fund $4,183 - 134
$4,130 $1,368 89
* Merrill Lynch & Co. Fixed Income Fund $7,452 - 111
$8,535 - 107
* Merrill Lynch & Co. Homestake Mining Company Stock Fund $10,836 - 123
$8,047 ($1,262) 108
* Represents parties-in-interest Plan
</TABLE>
18
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 10, 1999, on our audits of the financial
statements and financial statement schedules of the Homestake Mining Company
Savings Plan as of December 31, 1998 and 1997, and for the year ended December
31, 1998, which report is included in this Annual Report on Form 11-K.
/s/ PricewaterhouseCoopers LLP
- ---------------------------------------
PRICEWATERHOUSECOOPERS LLP
San Francisco, California
June 25, 1999
