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): March 10, 1999 (March 8, 1999)
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
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Item 5. Other Items
1. Homestake to Acquire Argentina Gold
On March 8, 1999, Homestake Mining Company ("Homestake" or the
"Registrant") and Argentina Gold Corp. ("Argentina Gold") announced a
definitive agreement for Homestake to acquire the Vancouver-based
Argentina Gold for approximately US$200 million in Homestake common
stock. Argentina Gold's principal asset is its 60% interest in the
Veladero property located in northwest Argentina along the El Indio
gold belt.
Under the terms of the agreement, Argentina Gold shareholders will
receive 0.545 shares of Homestake common stock for each share of
Argentina Gold common stock. Homestake will issue a total of
approximately 21 million common shares to acquire all of the shares of
Argentina Gold. The transaction will be accounted for as a pooling of
interests. Homestake and Argentina Gold have agreed to complete the
acquisition as a Plan of Arrangement under the Canada Business
Corporations Act. Completion of the transaction is subject to approval
by the Argentina Gold shareholders, the British Columbia Supreme Court
and further due diligence. The transaction is expected to close in May
1999.
A copy of the Registrant's March 8, 1999 news release is attached as
Exhibit 99.1
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
7(c) Exhibits
99.1 News Release, dated March 8, 1999 announcing that Homestake
and Argentina Gold Corp had entered into an agreement for
Homestake to acquire Argentina Gold.
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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: March 10, 1999
HOMESTAKE MINING COMPANY
(Registrant)
By: /s/David W. Peat
----------------
David W. Peat
Vice President and Controller
EXHIBIT 99.1
News Release
Homestake Mining Company
650 California Street
San Francisco, CA 94108
Phone: 415-981-8150
Fax: 415-397-5038
http://www.homestake.com
Contact:
Stephen A. Orr
Vice President, Investor Relations
415-983-8169 (United States)
HOMESTAKE MINING COMPANY TO ACQUIRE ARGENTINA GOLD
SAN FRANCISCO, CA March 8, 1999 -- Homestake Mining Company (NYSE: HM, ASX:
HSM, TSE: HCX), and Argentina Gold Corp. (VSE: ARP) today announced a definitive
agreement for Homestake to acquire the Vancouver-based Argentina Gold Corp.
(VSE: ARP) for approximately US$200 million (C$300 million) in Homestake common
stock. Argentina Gold's principal asset is its 60% interest in the Veladero
property located in northwest Argentina along the El Indio gold belt. Argentina
Gold's resource estimate indicates that Veladero's three mineralized zones
contain at least 4.5 million ounces of gold and 100 million ounces of silver.
In addition to the Veladero project, Argentina Gold's holdings include the
very promising Del Carmen project and the Rio Frio, Santa Rosa and Vicuna Pampa
prospects. Argentina Gold's land package encompasses an entire mining district
and covers more than 80% of the rich El Indio gold belt in Argentina.
Under the terms of the agreement, Argentina Gold shareholders will receive
0.545 shares of Homestake common stock for each share of Argentina Gold common
stock. Based on the closing price for Homestake common stock on Friday, March 5,
1999, the transaction values each Argentina Gold share at US$5.14 or C$7.81.
Homestake will issue approximately 21 million additional shares, which is equal
to about 8.8% of Homestake's currently outstanding shares. The transaction will
be accounted for as a pooling of interests. Directors of Argentina Gold,
representing approximately 15% of currently outstanding Argentina Gold stock,
have stated their intention to vote in favor of the transaction.
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"Argentina Gold and its unique Veladero site, presents a tremendous
opportunity for Homestake," said Jack E. Thompson, Chairman, President and Chief
Executive Officer of Homestake. "Based on recent independent surveys and our own
due diligence, we believe that the Veladero property is a superb gold asset with
exceptional upside potential. While only 30% of the project area has been
explored, the resources defined to date and the consistently favorable
metallurgical tests suggest that Veladero's resources could grow significantly.
If Veladero meets our expectations, it will develop into a very significant
producer at an attractive cash cost. This acquisition strengthens our operating
base in South America where we are currently evaluating the feasibility of
expanding our operations at La Falda in Chile with ore from the adjacent
Jeronimo deposit. It makes Latin America Homestake's fourth growth pillar after
the U.S., Canada and Australia without appreciably altering our conservative
geo-political risk profile."
Lukas Lundin, Director of Argentina Gold stated, "This is an excellent
transaction for Argentina Gold's shareholders, representing a full and fair
price, and offering the opportunity to participate in the upside of a well
managed, international gold producer."
"Throughout acquisition discussions, the Special Committee of the Board of
Directors of Argentina Gold has focused on ensuring that Argentina Gold's
shareholders received full value for their shares. Homestake's bid for Argentina
Gold is a fair offer that provides excellent value for our shareholders." stated
William Rand, Director and Chairman of the Special Committee of the Directors
for Argentina Gold.
Homestake and Argentina Gold have agreed to complete the acquisition as a
plan of arrangement under the Canada Business Corporations Act. Completion of
the transaction is subject to approval by the Argentina Gold Shareholders, the
British Columbia Supreme Court and further due diligence. The transaction is
expected to close in May 1999.
Following completion of the acquisition, Homestake will carry out an
intense drill program to increase reserves and resources at Veladero. In
addition, work will begin to determine optimal design parameters for the mining
and processing of ore from this deposit. Homestake expects to spend
approximately $6 million for its share of additional drilling and a feasibility
study during 1999.
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Homestake Mining Company is an international gold mining company with
operations and exploration activities in the United States, Canada, Australia
and Chile. The Company also has active exploration programs in Latin America and
Eastern Europe. Homestake currently produces approximately 2.3 million ounces of
gold annually from 16 operating mines. Shares of the Company's stock are listed
on the New York Stock Exchange, the Australian Stock Exchange and the Basel,
Geneva and Zurich Stock Exchanges in Switzerland. 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
awards for its responsible environmental health and safety management programs.
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 estimates of future production, costs per ounce, and
cost reductions, dates of construction completion, costs of capital projects 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.
Estimates of reserves and 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. Estimates of production from properties and
facilities not yet in production are based on similar factors but there is a
greater likelihood that actual results will vary from estimates due to a lack of
actual experience. Cash cost estimates and estimates of cash cost reductions are
based on such things as past experience, including experience with other
properties, reserve and production estimates, anticipated mining conditions,
estimated costs of materials, supplies and utilities, and estimated exchange
rates. Noncash cost estimates are based on total capital costs and reserve
estimates, and change based on actual amounts of unamortized capital and changes
in reserve estimates. Estimates of future capital costs are based on a variety
of factors and include past operating experience, including experience with
other properties estimated levels of future production, estimates by and
contract terms with third party suppliers, expectations as to government and
legal requirements, feasibility reports by company personnel and outside
consultants, and other factors. Capital cost estimates for new projects are
subject to greater uncertainties than additional capital costs for existing
operations. Estimated time for completion of capital projects is based on such
factors as the Company's experience in completing capital projects, and
estimates provided by and contract terms with contractors, engineers, suppliers
and others involved in design and construction of projects. 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.
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