<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(x) Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the Quarterly Period Ended March 31, 2000
( ) Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from _______ to ________
Commission File Number 1-8736
HOMESTAKE MINING COMPANY
A Delaware Corporation
IRS Employer Identification No. 94-2934609
650 California Street
San Francisco, California 94108-2788
Telephone: (415) 981-8150
http://www.homestake.com
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
The number of shares of common stock outstanding as of April 30, 2000 was
260,441,000.*
* Includes 6,646,000 Homestake Canada Inc. exchangeable shares that may be
exchanged at any time for Homestake common stock on a one-for-one basis.
<PAGE>
PART 1 - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements
- ----------------------------
A. Condensed Consolidated Balance Sheets (unaudited)
----------------------------------------------------
(in thousands, except per share amount)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------------ -----------------
<S> <C> <C>
ASSETS
Current Assets
Cash and equivalents $ 264,064 $ 130,273
Short-term investments 23,725 136,362
Receivables 41,218 44,988
Inventories (note 5) 64,155 63,337
Deferred income and mining taxes 17,702 14,663
Other 6,153 7,479
------------- -------------
Total current assets 417,017 397,102
------------- -------------
Property, Plant and Equipment, net 1,078,618 1,132,846
Investments and Other Assets
Noncurrent investments 11,814 10,473
Other assets 96,553 94,048
------------- -------------
Total investments and other assets 108,367 104,521
------------- -------------
Total Assets $ 1,604,002 $ 1,634,469
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 35,639 $ 34,873
Accrued liabilities 64,274 64,460
Income and other taxes payable 7,635 3,469
Current portion of long-term debt and capital leases 37,377 37,206
------------- -------------
Total current liabilities 144,925 140,008
------------- -------------
Long-term Liabilities
Long-term debt and capital leases (note 6) 280,040 278,494
Other long-term obligations 188,329 184,893
------------- -------------
Total long-term liabilities 468,369 463,387
------------- -------------
Deferred Gain on Close-out of Forward Sales Contracts 35,906 34,956
Deferred Income and Mining Taxes 210,517 216,958
Minority Interests in Consolidated Subsidiaries 13,518 13,800
Shareholders' Equity
Capital stock, $1 par value per share:
Authorized - Preferred: 10,000 shares; no shares outstanding
- Common: 450,000 shares
Outstanding - HC1 exchangeable shares: 2000 - 6,647; 1999 - 6,657
- Common: 2000 - 253,761; 1999 - 253,808 253,761 253,808
Additional paid-in capital 923,948 923,091
Deficit (398,414) (382,271)
Accumulated other comprehensive loss (48,528) (29,268)
------------- -------------
Total shareholders' equity 730,767 765,360
------------- -------------
Total Liabilities and Shareholders' Equity $ 1,604,002 $ 1,634,469
============= =============
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
B. Condensed Statements of Consolidated Operations (unaudited)
----------------------------------------------------------
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31,
2000 1999
------------- -----------
<S> <C> <C>
Revenues
Gold and ore sales $ 159,729 $ 159,227
Sulfur and oil sales 4,485 3,851
Interest income 5,092 4,163
Other income (loss) (note 3) (13,242) 11,373
------------- -----------
156,064 178,614
-------------- -----------
Costs and Expenses
Production costs 109,024 108,787
Depreciation, depletion and amortization 35,506 31,662
Administrative and general expense 11,132 11,197
Exploration expense 10,049 9,461
Interest expense 4,445 4,545
Business combination expenses - 1,288
Other expense 129 586
-------------- ------------
170,285 167,526
-------------- ------------
Income (Loss) Before Taxes and Minority Interests (14,221) 11,088
Income and Mining Taxes (2,077) (12,472)
Minority Interests 155 435
-------------- ------------
Net Loss $ (16,143) $ (949)
============== ============
Net Loss Per Share-Basic and Diluted $ (0.06) $ 0.00
============== ============
Average Shares Used in the Computation 260,475 259,198
============== ============
Dividends Paid Per Common Share $ - $ -
============== ============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
C. Condensed Statements of Consolidated Cash Flows (unaudited)
-----------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
2000 1999
------------ ------------
<S> <C> <C>
Cash Flows from Operations
Net loss $ (16,143) $ (949)
Reconciliation to net cash provided by operations:
Depreciation, depletion and amortization 35,506 31,662
Loss (gain) on asset disposals 263 (232)
Deferred taxes, minority interests and other (3,796) 4,916
Effect of changes in operating working capital items 22,168 (10,890)
------------- -------------
Net cash provided by operations 37,998 24,507
------------- -------------
Investment Activities
Decrease in investments 108,214 29,103
Additions to property, plant and equipment (16,410) (13,256)
Proceeds from sale-leaseback of equipment 4,755 -
Proceeds from asset sales 167 329
Decrease in restricted cash 1,789 11,836
------------ --------------
Net Cash provided by investment activities 98,515 28,012
------------ --------------
Financing Activities
Debt repayments (977) (58,000)
Common shares issued - 6,256
------------- -------------
Net cash used in financing activities (977) (51,744)
------------- -------------
Effect of Exchange Rate Changes on Cash and Equivalents (1,745) (590)
------------- -------------
Net Increase in Cash and Equivalents 133,791 185
Cash and Equivalents, January 1 130,273 147,519
------------- -------------
Cash and Equivalents, March 31 $ 264,064 $ 147,704
============= ==============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
Notes to Condensed Consolidated Financial Statements (unaudited)
- ----------------------------------------------------------------
1. General Information
The condensed consolidated financial statements include Homestake Mining
Company and its majority-owned subsidiaries, and their undivided interests
in joint ventures (collectively, "Homestake" or the "Company") after
elimination of intercompany amounts.
The information furnished in this report reflects all normal recurring
adjustments which, in the opinion of management, are necessary for a fair
statement of the results for the interim periods. Results of operations for
interim periods are not necessarily indicative of results for the full year.
These unaudited condensed consolidated financial statements should be read
in conjunction with the financial statements and notes thereto, which
include information as to significant accounting policies, in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999.
All dollar amounts are in United States dollars unless otherwise indicated.
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133 ("SFAS 133"),
"Accounting for Derivative Instruments and Hedging Activities." SFAS 133
requires that derivatives be recognized as assets or liabilities and be
measured at fair value. Gains or losses resulting from changes in the value
of derivatives are to be accounted for depending on the use of the
derivatives and whether they qualify for hedge accounting as either a fair
value hedge or a cash flow hedge. The key criterion for hedge accounting is
that the hedging relationship must be highly effective in achieving
offsetting changes in fair value or cash flows of the hedging instruments
and the hedged items. SFAS 133 is effective for fiscal years beginning after
June 15, 2000. In March 2000, the FASB issued an exposure draft proposing
certain amendments to SFAS 133. Under the proposed amendments, it is
possible that certain components of the Company's precious metals hedging
program could be excluded from the accounting requirements of SFAS 133. The
Company believes that changes in unrealized gains and losses on Homestake's
derivative activities, to the extent subject to the requirements of SFAS
133, will qualify for hedge accounting and, to the extent effective, be
deferred in other comprehensive income. However, there are many complexities
to SFAS 133 and the proposed amendments, and the Company currently is
evaluating their impact on reported operating results and financial
position. The effects of adopting the new standard are not reasonably
determinable at this time. The Company expects to adopt SFAS 133 effective
January 1, 2001.
2. Acquisition
Argentina Gold Corp.
In April 1999, Homestake acquired Argentina Gold Corp. ("Argentina Gold"), a
publicly-traded Canadian gold exploration company. Homestake issued 20.9
million common shares to acquire all of the shares of Argentina Gold. The
business combination with Argentina Gold was accounted for as a pooling of
interests and accordingly,
5
<PAGE>
Homestake's consolidated financial statements include Argentina Gold for all
periods presented. Agentina Gold's principal asset is its 60% interest in
the Veladero property located in northwest Argentina along the El Indio gold
belt. In the three months ended March 31, 1999, the Company recorded
business combination expenses of $1.3 million related to this transaction.
3. Other income (loss)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
(in thousands) 2000 1999
--------- ---------
<S> <C> <C>
Foreign currency contract gains (losses) $ (8,159) $ 7,911
Foreign currency exchange gains (losses) on
intercompany advances and other (5,876) 1,510
Other 793 1,952
--------- ---------
$ (13,242) $ 11,373
========= =========
</TABLE>
4. Comprehensive income (loss)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
(in thousands) 2000 1999
--------- ---------
<S> <C> <C>
Net Loss $ (16,143) $ (949)
Other Comprehensive Income (Loss)
Currency translation adjustments (20,533) 10,183
Unrealized gain (loss) on securities 1,273 (35)
--------- ---------
Total Other Comprehensive Income (Loss) (19,260) 10,148
--------- ---------
Comprehensive Income (Loss) $ (35,403) $ 9,199
========= =========
</TABLE>
5. Inventories
<TABLE>
<CAPTION>
March 31, December 31,
(in thousands) 2000 1999
----------- ------------
<S> <C> <C>
Finished products $ 13,969 $ 7,452
Ore and in process 25,598 30,591
Supplies 24,588 25,294
-------- --------
$ 64,155 $ 63,337
======== ========
</TABLE>
6
<PAGE>
6. Long-term debt and capital leases
<TABLE>
<CAPTION>
March 31, December 31,
(in thousands) 2000 1999
--------- -----------
<S> <C> <C>
Convertible subordinated notes (due 2000) $134,515 $134,990
Pollution control bonds:
Lawrence County, South Dakota (due 2032) 38,000 38,000
State of California (due 2004) 17,000 17,000
Cross-border credit facility (due 2003):
Canadian dollar-denominated borrowings 102,450 102,666
Capital leases 25,452 23,044
-------- --------
317,417 315,700
Less current portion
Convertible subordinated notes (34,515) (34,990)
Capital leases (2,862) (2,216)
-------- --------
$280,040 $278,494
======== ========
</TABLE>
During the first quarter of 2000, the Company repurchased convertible
subordinated notes ("Convertible Notes") having a principal amount of $0.5
million. The Company has classified $100 million of Convertible Notes
outstanding at March 31, 2000 as long-term debt since the Company intends
to refinance that portion of these obligations for a period longer than one
year from March 31, 2000 with funds drawn on the cross-border credit
facility. The remaining $34.5 million of Convertible Notes have been
classified as current as the Company expects to retire these notes using
cash and equivalent balances.
7. Foreign Currency, Gold Commitments
Foreign Currency Contracts
Under the Company's foreign currency protection program, the Company has
entered into a series of foreign currency option contracts which establish
trading ranges within which the United States dollar may be exchanged for
foreign currencies by setting minimum and maximum exchange rates.
7
<PAGE>
At March 31, 2000, the Company had foreign currency option contracts
outstanding as follows:
<TABLE>
<CAPTION>
Expected Maturity or Transaction Date
-------------------------------------
Total or
(US$ in millions) 2000 2001 2002 Average
----------- ---------- -------- ---------
<S> <C> <C> <C> <C>
Canadian $ / US $ option contracts:
US $ covered $ 80.3 $62.1 - $142.4
Written puts, average exchange rate (1) 0.69 0.66 - 0.68
US $ covered $ 80.3 $66.1 - $146.4
Purchased calls, average exchange rate (2) 0.72 0.69 - 0.70
US $ covered $ 80.3 $38.3 - $118.6
Purchased puts, average exchange rate (3) 0.65 0.65 - 0.65
Australian $ / US $ option contracts:
US $ covered $103.7 $81.8 $26.0 $211.5
Written puts, average exchange rate (1) 0.66 0.65 0.69 0.66
US $ covered $103.7 $81.8 $26.0 $211.5
Purchased calls, average exchange rate (2) 0.68 0.66 0.69 0.67
US $ covered $ 98.8 $70.8 $26.0 $195.6
Purchased puts, average exchange rate (3) 0.63 0.64 0.66 0.64
</TABLE>
(1) Assuming exercise by the counter-party at the expiration date, the Company
would exchange US dollars for Canadian or Australian dollars at the put
exchange rate. The counter-party would be expected to exercise the option
if the spot exchange rate was below the put exchange rate.
(2) Assuming exercise by the Company at the expiration date, the Company would
exchange US dollars for Canadian or Australian dollars at the call exchange
rate. The Company would exercise the option if the spot exchange rate was
above the call exchange rate.
(3) Assuming exercise by the Company at the expiration date, the Company would
exchange Canadian or Australian dollars for US dollars at the put exchange
rate. The Company would exercise the option if the spot exchange rate was
below the put exchange rate.
Gold and Silver Contracts
Homestake's hedging policy provides for the use of forward sales contracts to
hedge up to 30% of each of the following ten year's expected annual gold
production, and up to 30% of each of the following five year's expected annual
silver production, at prices in excess of certain targeted prices. The policy
also provides for the use of combinations of put and call option contracts to
establish minimum floor prices.
In March 2000, the Company closed out and financially settled its remaining US
dollar denominated silver forward sales contracts covering 3.6 million ounces
maturing in 2000 and 2001. The pretax gain of $3.3 million was deferred and
is being recorded in income as the originally designated production is sold.
At March 31, 2000, the unamortized portion of this gain was $3.2 million, of
which $0.9 million was classified as noncurrent. The noncurrent deferred gain
on close-out of forward sales contracts at
8
<PAGE>
March 31, 2000 also includes $35.0 million related to the 1999 close-out of
gold forward sales contracts maturing in the years 2001, 2002 and 2003.
At March 31, 2000 the Company had gold forward sales and option contracts
outstanding as follows:
<TABLE>
<CAPTION>
Expected Maturity or Transaction Date
---------------------------------------------------------------
There- Total or
2000 2001 2002 2003 2004 after Average
------ ------ ------ ------ ------ ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
US $ denominated contracts:
- ---------------------------
Forward sales contracts:
Ounces (thousands) 63.8 10.0 10.0 - 90.0 559.2 733.0
Average price ($ per oz.) $432 $400 $403 - $400 $418 $416
Put options owned:
Ounces (thousands) 70.0 80.0 - - - - 150.0
Average price ($ per oz.) $294 $253 - - - - $272
Call options written:
Ounces (thousands) 55.0 80.0 - - - - 135.0
Average price ($ per oz.) $291 $253 - - - - $268
Call options purchased:
Ounces (thousands) 40.0 80.0 - - - - 120.0
Average price ($ per oz.) $268 $268 - - - - $268
Australian $ denominated contracts:(1)
- --------------------------------------
Forward sales contracts:
Ounces (thousands) - - 144.8 144.8 108.8 26.0 424.4
Average price (US$ per oz.) - - $335 $347 $358 $323 $344
Put options owned:
Ounces (thousands) 90.0 120.0 - - - - 210.0
Average price (US$ per oz.) $319 $328 - - - - $324
</TABLE>
(1) Expressed in US dollars at an exchange rate of A$ = US$ 0.6132
8. Segment Information
The Company primarily is engaged in gold mining and related activities. Gold
operations are managed and internally reported based on the following
geographic areas: North America (United States and Canada), Australia and
South America. The Company also has other foreign exploration activities and
a sulfur and oil recovery operation in the Gulf of Mexico which are included
in "Corporate and All Other". Within each geographic segment, operations are
managed on a mine-by-mine basis. However, because each mine has similar
characteristics, the Company has geographically aggregated its operations.
9
<PAGE>
Segment information for the three months ended March 31, 2000 and 1999 is as
follows:
<TABLE>
<CAPTION>
Corporate
North South and All Reconciling
(in thousands) America Australia America Other Items (a) Total
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2000
Product sales $ 99,699 $ 56,568 $ 3,462 $ 4,485 $ - $ 164,214
Other revenues 218 (6,923) 340 823 (2,608) (8,150)
Total revenues 99,917 49,645 3,802 5,308 (2,608) 156,064
Operating
earnings (loss) 14,351 (643) 430 4 (2,608) 11,534
1999
Product sales $ 95,531 $ 59,966 $ 3,730 3,851 $ - $ 163,078
Other revenues 5,053 4,227 29 6,503 (276) 15,536
Total revenues 100,584 64,193 3,759 10,354 (276) 178,614
Operating
earnings (loss) 20,522 13,147 (113) 4,885 (276) 38,165
</TABLE>
(a) Primarily intercompany financing.
9. Contingencies
Environmental Contingencies
The Comprehensive Environmental Response, Compensation and Liability Act of
1980 imposes heavy liabilities on any person who discharges hazardous
substances. The Environmental Protection Agency publishes a National
Priorities List ("NPL") of known or threatened releases of such substances.
Homestake's former uranium millsite near Grants, New Mexico is listed on the
NPL. Pursuant to the Energy Policy Act of 1992, the United States Department
of Energy ("DOE") is responsible for 51.2% of past and future costs of
reclaiming the Grants site in accordance with Nuclear Regulatory Commission
license requirements. Through March 31, 2000, Homestake had received $27.2
million from the DOE and the balance sheet at March 31, 2000 includes an
additional receivable of $8.1 million for the DOE's share of reclamation
expenditures made by Homestake through 1999.
In 1983, the State of New Mexico filed claims against Homestake for natural
resource damages resulting from the Grants site. To date, the State has
taken no action to enforce its claims.
10
<PAGE>
Other Contingencies
In addition to the above, the Company is party to legal actions and
administrative proceedings and is subject to claims arising in the ordinary
course of business. The Company believes the disposition of these matters
will not have a material adverse effect on its financial position or results
of operations.
10. Homestake Canada Inc. ("HCI")
In connection with the 1998 acquisition of the minority interests in Prime
Resources Group Inc., HCI issued 11.1 million HCI exchangeable shares. Each
HCI exchangeable share is exchangeable for one Homestake common share at any
time at the option of the holder and has essentially the same voting,
dividend (payable in Canadian dollars), and other rights as one Homestake
common share. A share of special voting stock, which was issued to the
Transfer Agent in trust for the holders of the HCI exchangeable shares,
provides the mechanism for holders of the HCI exchangeable shares to receive
their voting rights.
Homestake, through a wholly-owned subsidiary, owns all the common shares
outstanding of Homestake Canada Inc. ("HCI"). At March 31, 2000, HCI had 6.6
million HCI exchangeable shares outstanding, which were held by the public.
Following the 1999 business combination with Argentina Gold, Homestake's
investment in Argentina Gold was transferred to HCI in exchange for a
Canadian dollar-denominated intercompany note payable by HCI to its parent
company of approximately C$282 million (US$191 million). In accordance with
United States generally accepted accounting principles, the assets,
liabilities and shareholders' equity of Argentina Gold have been recorded in
HCI's financial statements at the historical cost basis to the parent
company. The difference between the historical cost basis of Argentina Gold
shareholders' equity and its fair value at the date of transfer has been
recorded as a reduction to HCI's shareholders' equity.
11
<PAGE>
Summarized consolidated financial information for HCI, including Argentina
Gold for all periods presented, is as follows:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- ------------
<S> <C> <C>
Current assets $ 60,139 $ 43,666
Noncurrent assets 483,199 498,567
--------- ---------
Total assets $ 543,338 $ 542,233
========= =========
Notes payable to the Company $ 342,779 $ 329,105
Other current liabilities 21,517 19,521
Long-term liabilities 102,450 102,666
Other long-term liabilities 16,496 10,843
Deferred income and mining taxes 193,076 199,979
Shareholders' equity
HCI's shareholders' equity 57,892 70,991
Adjustment to conform to the
Company's accounting basis (190,872) (190,872)
--------- ---------
Total liabilities and shareholders' equity $ 543,338 $ 542,233
========= =========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------------------
2000 1999
--------- --------
<S> <C> <C>
Total revenues $57,755 $57,999
Costs and expenses 63,143 49,699
------- -------
Income (loss) before taxes and
minority interests $(5,388) $ 8,300
======= =======
Net income (loss) $(8,599) $ 804
======= =======
</TABLE>
12
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
(Unless specifically stated otherwise, the following information relates to
amounts included in the consolidated financial statements without reduction for
minority interests. Homestake reports per ounce production costs in accordance
with the "Gold Institute Production Cost Standard.")
The following provides information which management believes is relevant to
an assessment and understanding of Homestake Mining Company's ("Homestake" or
the "Company") consolidated results of operations and financial condition. The
discussion should be read in conjunction with the Management's Discussion and
Analysis included in Homestake's 1999 Annual Report on Form 10-K.
On April 29, 1999 Homestake acquired Argentina Gold Corp. ("Argentina
Gold"), a Canadian gold exploration company whose principal asset is its 60%
interest in the Veladero property located in northwest Argentina, by issuing
20.9 million Homestake common shares. This business combination was accounted
for as a pooling of interests, and accordingly, the Company's consolidated
financial statements include Argentina Gold for all periods.
RESULTS OF OPERATIONS
SUMMARY
Homestake recorded a net loss of $16.1 million ($0.06 per share) during the
first quarter of 2000 compared to a net loss of $0.9 million ($0.00 per share)
during the first quarter of 1999. First quarter of 2000 results include after-
tax foreign currency exchange losses of $11.2 million ($0.04 per share),
primarily due to a decline in the Australian dollar. First quarter of 1999
results include after-tax foreign currency exchange gains of $6.3 million ($0.02
per share) and business combination expenses of $1.3 million ($0.00 per share).
Excluding the effect of the foreign exchange gains and losses and the
business combination expenses, the Company recorded a net loss of $4.9 million
($0.02 per share) for the quarter ended March 31, 2000 compared with a net loss
of $5.9 million ($0.02 per share) for the corresponding period of 1999. The
slight improvement in the current year's results primarily reflects increased
production and lower income taxes, partially offset by higher depreciation costs
and a slightly lower average realized gold price.
GOLD OPERATIONS
Revenues from gold, ore and concentrate sales totaled $159.7 million during
the first quarter of 2000 compared to $159.2 million during the first quarter of
1999. Higher sales revenues in 2000 reflect higher sales volumes, partially
offset by lower average realized gold prices. In the 2000 first quarter,
568,200 equivalent ounces of gold were sold at an average realized price of $295
per ounce compared to 554,000 equivalent ounces at an average realized price of
$298 per ounce during the same period of 1999.
13
<PAGE>
The following chart details Homestake's gold production and total cash
costs per ounce by location:
<TABLE>
<CAPTION>
Production Total Cash Costs
(Ounces in thousands) (Dollars per ounce)
Three Months Ended Three Months Ended
March 31, March 31,
-------------------------- ----------------------------
Mine (Percentage interest) 2000 1999 2000 1999
- -------------------------- --------- ---------- -------- -----------
<S> <C> <C> <C> <C>
United States
Homestake (100) 47.7 45.7 $275 $271
Ruby Hill (100) 28.3 25.2 106 121
McLaughlin (100) 29.5 30.2 224 244
Round Mountain (25) 36.0 29.8 257 196
Marigold (33) 6.7 7.9 196 190
Pinson (50) - 3.6 - 242
--------- --------- ------- ----------
Total United States 148.2 142.4 225 218
Canada
Eskay Creek (100) (1,4) 152.7 123.5 131 121
Hemlo: 82.3 73.4 195 216
Williams (50) 57.2 51.9 198 220
David Bell (50) (2) 25.1 21.5 188 208
Snip (100) (3) - 21.1 - 214
--------- --------- ------- ----------
Total Canada 235.0 218.0 153 162
Australia
Kalgoorlie (50) 96.1 83.0 211 210
Yilgarn: 110.9 103.5 215 213
Plutonic (100) 58.5 48.3 214 264
Darlot (100) 30.4 27.9 222 174
Lawlers (100) 22.0 27.3 209 162
Peak Hill (67) - 5.5 - 177
--------- --------- ------- -----------
Total Australia 207.0 192.0 213 210
Chile
Agua de la Falda (51) 6.1 6.6 209 212
--------- --------- ------- -----------
Total Production 596.3 559.0 $192 $193
========= ========= ======= ===========
</TABLE>
(1) Ounces produced are expressed on a gold equivalent basis and include 84,400
(70,200 in 1999) ounces of gold and 3.8 million (2.9 million in 1999)
ounces of silver contained in ore and concentrates sold to smelters in the
first quarter.
(2) Ounces produced include 2,800 ounces (Homestake's share) from the Quarter
Claim in both 2000 and 1999. Cash costs per ounce include Quarter Claim.
(3) Includes ounces of gold contained in dore and concentrates.
(4) For comparison purposes, total cash costs per ounce include estimated
third-party costs incurred by smelter owners and others to produce
marketable gold and silver.
14
<PAGE>
The Company's total gold production for the first quarter of 2000 was
596,300 ounces compared to 559,000 ounces during the first quarter of 1999.
Higher production reflects increased production from the United States, Canadian
and Australian operations. Total cash costs per equivalent ounce during the
first quarter of 2000 declined slightly to $192 per ounce from $193 per ounce in
the first quarter of 1999.
United States
- -------------
United States production increased 4% to 148,200 ounces during the first
quarter of 2000 from 142,400 ounces during the first quarter of 1999, primarily
due to higher production at the Round Mountain, Ruby Hill and Homestake mines,
partially offset by the absence of production from the Pinson mine which closed
in 1999. The weighted average United States cash cost increased 3 percent to
$225 per ounce during the first quarter of 2000 compared to $218 per ounce
during the first quarter of 1999.
Homestake's 25 percent share of production from the Round Mountain mine
increased to 36,000 ounces from 29,800 in the prior year due to significantly
higher tonnage processed on the leach pads and in the mill, partially offset by
lower ore grade. Cash costs per ounce increased to $257 per ounce from $196 per
ounce in the first quarter of 1999 due to the processing of higher cost mill
inventory and the effect of the lower ore grades. Cash costs per ounce for the
remainder of 2000 are expected to decline to the $210 per ounce level. The
Homestake mine continued to escalate its rate of underground production,
resulting in 47,700 ounces produced in the first quarter of 2000 compared to
45,700 ounces a year ago. The cash costs per ounce during the first quarter of
2000 averaged $275 per ounce, $4 per ounce higher than the corresponding period
of 1999, primarily due to the depletion of low-cost open-pit ore stockpiles in
December 1999. Homestake's wholly-owned Ruby Hill mine produced 28,300 ounces
at an average cash cost of $106 per ounce during the first quarter of 2000
compared to 25,200 ounces at a cash cost of $121 per ounce a year ago. The
increase in production and decline in cash costs per ounce primarily was due to
higher ore grades during the first quarter of 2000. During the first quarter of
2000, gold production from the processing of residual stockpiles at the
McLaughlin mine totaled 29,500 ounces compared to 30,200 ounces during the first
quarter of 1999. An 8% decrease in cash costs to $224 per ounce was achieved as
a result of lower processing costs despite the slightly lower production.
Canada
- ------
Canadian gold production increased 8% to 235,000 ounces during the first
quarter of 2000 from 218,000 ounces during the first quarter of 1999, primarily
due to increased production at the Eskay Creek and Hemlo operations, partially
offset by the absence of production from the Snip mine which closed in 1999.
During the first quarter of 2000, the weighted average total cash costs per
ounce from the Company's Canadian mines declined 6% to $153 per ounce from $162
per ounce a year ago, primarily due to the increased production.
At the Eskay Creek mine, first quarter 2000 production totaled 152,700 gold
equivalent ounces at an average cash cost of $131 per equivalent ounce, compared
to 123,500 gold equivalent ounces at an average cash cost of $121 per equivalent
ounce in the corresponding 1999 period. The increase in production was achieved
as a result of increased ore and concentrate shipments, higher mill throughput
and higher ore grades.
15
<PAGE>
The 8% increase in cash costs at Eskay Creek is primarily the result of the
stronger Canadian currency. At the Hemlo operations, Homestake's 50% share of
first quarter production from the combined Williams and David Bell mines totaled
82,300 ounces compared to 73,400 ounces in the prior year's first quarter. Since
June 1999, the Williams and David Bell mines have been supplying ore to a single
mill, which has resulted in the combined operation achieving higher levels of
productivity and lower costs. The weighted average cash cost per ounce decreased
10%, or $21 per ounce, to $195 per ounce in the 2000 first quarter. On a local
currency basis, cash costs per ounce at the Hemlo operations decreased by 14%.
During the first quarter of 1999, the Snip mine produced 21,100 ounces of
gold at an average cash cost of $214 per ounce. All mining and milling
activities at the Snip mine were completed during the second quarter of 1999 as
the mine's reserves were depleted. Active reclamation activities at the
minesite were completed in the fourth quarter of 1999.
Australia
- ---------
Australian gold production increased 8% to 207,000 ounces during the first
quarter of 2000 compared to 192,000 ounces during the first quarter of 1999,
primarily due to higher production at both the Kalgoorlie and Yilgarn
operations, partially offset by the absence of production from the Peak Hill
mine which was closed in 1999. During the first quarter of 2000, Australian
weighted average total cash costs per ounce increased 1% to $213 per ounce from
$210 per ounce during the first quarter of 1999. The percentage increase in
cash costs per ounce was the same on a local currency basis since the weighted
average first quarter 2000 exchange rate approximated the prior year's first
quarter average.
The first quarter of 2000 was an important turning point for Homestake's
50%-owned Kalgoorlie operations, as the transition from contract to owner mining
at the Super Pit was completed during the quarter. Despite unusually heavy
rains experienced during the quarter, Homestake's share of production from the
Kalgoorlie operations increased 16% to 96,100 ounces at a cash cost of $211 per
ounce from 83,000 ounces at a cash cost of $210 per ounce a year ago.
Production increased primarily as a result of higher tons milled and increased
ore grades. Homestake expects that operating efficiencies and benefits from
owner mining at the Super Pit will result in lower costs in the remainder of the
year.
Homestake's 100%-owned Yilgarn operations, consisting of the Plutonic,
Lawlers and Darlot mines, increased production by 7% to 110,900 ounces at a
weighted average cash cost of $215 per ounce during the first quarter of 2000
compared to 103,500 ounces at $213 per ounce a year ago, reflecting higher
production at the Plutonic and Darlot mines, partially offset by lower
production at the Lawlers mine. Production at the Plutonic mine totaled 58,500
ounces at a cash cost of $214 per ounce during the 2000 first quarter compared
to 48,300 ounces at a cash cost of $264 per ounce during the same period of
1999. The improvement was mainly due to the processing of higher-grade
underground ore. During the 2000 first quarter, the Darlot mine produced 30,400
ounces at an average cash cost of $222 per ounce, compared to 27,900 ounces at a
cash cost of $174 per ounce a year ago. Cash costs per ounce increased at
Darlot primarily due to higher costs associated with cement backfill. The
Lawlers mine produced 22,000 ounces at an average cash cost of $209 per ounce
16
<PAGE>
during the 2000 first quarter, compared to 27,300 ounces at $162 per ounce a
year ago, primarily due to a 25% decline in ore grades. Ore grades are expected
to improve later in 2000 as access to the mine's higher-grade areas is
completed. At the Peak Hill mine, final reclamation was completed in November
1999. During the first quarter of 1999, the Peak Hill mine produced 5,500
ounces of gold at an average cash cost of $177 per ounce.
South America
- -------------
Homestake's share of production at its 51%-owned Agua de la Falda mine
amounted to 6,100 ounces of gold at an average cash cost of $209 per ounce in
the first quarter of 2000, compared to 6,600 ounces at a cash cost of $212 per
ounce in the first quarter of 1999. The small decline in production primarily
was due to a lower recovery rate.
During the first quarter of 2000, Homestake significantly advanced its 60%-
owned Veladero project. On March 28, 2000, Homestake announced a 4.8 million
ounce proven and probable gold reserve (Homestake's share: 2.88 million ounces)
contained in 92.5 million tons of ore grading 0.052 ounces of gold per ton. The
reserve, which also contains 0.71 ounces of silver per ton, is part of the
recently announced and much larger mineralized inventory totaling 7.8 million
ounces of gold. These reserve and mineralized inventory calculations are based
on information compiled through early March 2000 from a total of 87 additional
holes drilled during the 1999-2000 drilling program. The current drilling
program is expected to continue into May 2000 and a new estimate of reserves and
mineralized material is expected to be completed by mid-year. The capital cost
at this early stage of project engineering is estimated at $370 million (100%
basis). Once in operation, the mine is expected to produce approximately
450,000 to 500,000 ounces of gold per year. Cash costs are expected to average
approximately $150 per ounce. Production is expected to begin in 2003.
Beginning in the second quarter of 2000, the Company will begin capitalizing
development expenses incurred related to Veladero.
MAIN PASS 299
The Main Pass 299 sulfur operating agreement provides that each participant
pays its share of capital and operating costs, and has the right to take its
share of production in kind in proportion to its undivided interest. In certain
circumstances, Homestake can make an annual election to not take its share of
the following year's production and not pay for the operating costs related to
that year's production.
In the fall of 1999, Homestake notified Freeport-McMoRan Sulphur ("FMS"),
the operator of the Main Pass 299 joint venture, that Homestake elected to not
take and not pay for its share of the sulfur production in the year 2000. In
December 1999, FMS denied that Homestake had the right to make the election or
that Homestake had made the election on a timely basis. Homestake filed suit in
Delaware seeking a declaratory judgment affirming that it had the right to make
the election and that it had made the election on a timely basis. In March 2000
Homestake rescinded its election to not take and not pay for its share of 2000
production from Main Pass 299 and dismissed its request for declaratory
judgment. As a result, Homestake's financial statements for the three months
ended March 31, 2000 include the results from sulfur operations for this
period.
17
<PAGE>
Homestake's share of revenues from the Main Pass 299 operations in the Gulf
of Mexico increased to $4.5 million in the first three months of 2000 compared
to revenues of $3.9 million during the first three months of 1999, and first
quarter 2000 operating losses were $0.7 million compared to operating losses of
$1.4 million in the comparable 1999 period. The increased revenues and lower
operating losses were mainly due to higher oil prices and lower per ton sulfur
operating costs, partially offset by reduced sulfur prices and higher per unit
oil operating costs.
Other income for the first quarter of 2000 includes foreign currency exchange
losses of $14.0 million, of which $8.2 million was related to foreign currency
contracts and $5.8 million was related to intercompany advances. Other income
in the corresponding period of 1999 includes foreign currency exchange gains of
$9.4 million, including $7.9 million related to foreign currency contracts and
$1.5 million related primarily to intercompany advances.
Depreciation, depletion and amortization expense increased 12% to $35.5 million
during the 2000 first quarter from $31.7 million in the first quarter of 1999,
primarily due to increased production, particularly at Eskay Creek, which has a
per ounce depreciation rate that is higher than the Company's consolidated
weighted average rate. Depreciation and amortization expense for the first
quarter of 2000 also includes $0.8 million related to owner-mining equipment at
Kalgoorlie financed with capital leases.
Exploration expense for the first quarter of 2000 increased to $10.0 million
compared to $9.5 million a year ago as a result of increased spending on the
Veladero project and other properties acquired in the acquisition of Argentina
Gold. Exploration expense related to these properties totaled $5.8 million in
the three months ended March 31, 2000 compared to $1.7 million in the prior
year's first quarter.
Income and mining tax expense for the first quarter ended March 31, 2000
decreased to $2.1 million compared to $12.5 million for the same period in 1999,
primarily due to the lower pretax income in 2000. In addition, the first
quarter of 1999 included a charge of approximately $3 million related to the
repatriation of cash to the United States from the Company's Canadian
subsidiaries. The $2.1 million tax expense incurred during the first quarter of
2000 primarily reflects the result of geographic mix of pretax income and
losses, foreign withholding taxes on intercompany interest income, and Canadian
mining taxes. The Company's consolidated effective income and mining tax rate
will fluctuate depending on the geographical mix of pretax income and losses.
Minority interests: During the first quarter of 2000 minority interests' share
of losses in consolidated subsidiaries decreased to $0.2 million compared to
$0.4 million in the first quarter of 1999, primarily due to improved results at
Agua de la Falda.
18
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations totaled $38.0 million in the first quarter of
2000 compared to $24.5 million in the first quarter of 1999. Working capital at
March 31, 2000 amounted to $272.1 million, including cash and equivalents and
short-term investments of $287.8 million.
The decrease in investments of $108.2 million during the first quarter of
2000 primarily reflects an increase in the proportion of Homestake's interest-
bearing portfolio of securities which have an original maturity of less than
three months.
Capital expenditures of $16.4 million during the first quarter of 2000
compare to capital expenditures of $13.3 million during the first quarter of
1999. Capital expenditures in 2000 include approximately $6.4 million at the
Yilgarn operations (Plutonic, Darlot and Lawlers mines) primarily for
underground development work, $5.9 million at Kalgoorlie primarily for owner-
mining equipment, and $1.5 million at the Homestake mine for various
infrastructure and other capital improvements. The balance of the 2000 capital
expenditures primarily relate to sustaining capital at the Company's other
operating mines. Capital expenditures of $13.3 million during the first quarter
of 1999 included approximately $7.1 million at the Yilgarn operations mines
primarily for underground development work. The balance of the 1999 capital
expenditures primarily related to underground mobile mining equipment purchases
at the Homestake mine and sustaining capital at the Company's other operating
mines.
Debt repayments during the first quarter of 2000 were $1.0 million compared
to $58.0 million in the prior year's first quarter. Debt repayments in 2000
reflect the repurchase of $0.5 million of the 5.5% convertible subordinated
notes ("Convertible Notes") and $0.5 million of principal payments under
capitalized leases. During the first quarter of 2000, the Company also received
$4.8 million of capital lease proceeds related to additional owner-mining
equipment at Kalgoorlie. In the first quarter of 1999, $48.0 million of
Australian dollar-denominated borrowings under the credit facility and $10.0
million of South Dakota pollution control bonds were repaid.
The Company has a credit facility ("Credit Facility") providing a total
availability of $430 million. This facility is available through July 14, 2003
and provides for borrowings in United States, Canadian, or Australian dollars,
or gold, or a combination of these. During the first quarter of 2000, the
Company made no repayments under the Credit Facility. At March 31, 2000,
borrowings under the Canadian dollar Credit Facility of $102.5 million (C$148.9
million) were outstanding. The Company pays a commitment fee on the unused
portion of this facility ranging from 0.15% to 0.35% per annum, depending upon
rating agencies' ratings for the Company's senior debt. The credit agreement
requires a minimum consolidated net worth, as defined in the agreement
(primarily shareholders' equity plus the amount of all noncash write-downs made
after December 31, 1997), of $500 million. Interest on the Canadian dollar
borrowings is payable quarterly and is based on the Bankers' Acceptance discount
rate plus a stamping fee. At March 31, 2000, this rate was 6.35%.
The Company's 5.5% Convertible Notes, which mature on June 23, 2000, are
convertible into the Company's common shares at a rate of $23.06 per common
share
19
<PAGE>
and are redeemable by the Company in whole at any time. Interest on the notes is
payable semiannually in June and December. At March 31, 2000, the Company has
classified $100 million of Convertible Notes as long term debt since the Company
intends to refinance that portion of these obligations for a period longer than
one year from March 31, 2000 with funds drawn on the Credit Facility. The
remaining $34.5 million of Convertible Notes have been classified as current as
the Company expects to retire this debt using cash and cash equivalent balances.
Foreign currency, gold and other commitments
Homestake's precious metals hedging policy provides for the use of forward
sales contracts to hedge up to 30% of each of the following ten year's expected
annual gold production, and up to 30% of each of the following five year's
expected annual silver production, at prices in excess of certain targeted
prices. The policy also provides for the use of combinations of put and call
option contracts to establish minimum floor prices. Homestake does not hold or
issue financial instruments or derivative financial instruments for trading
purposes or to create hedge positions in excess of forecast identifiable
exposures.
During the first quarter of 2000 and 1999, the Company delivered or
financially settled 91,300 and 57,500 ounces of gold at average prices of $323
and $ 362 per ounce, respectively, and during the first quarter of 2000, 655,000
ounces of silver at an average price of $6.30 per ounce under maturing forward
sales and option contracts. The foregoing hedging activities increased revenues
in the three months ended March 31, 2000 and 1999 by approximately $4 million
and $6 million, respectively. In March 2000, the Company closed out and
financially settled its remaining US dollar denominated silver forward sales
contracts covering 3.6 million ounces maturing in 2000 and 2001. The pretax
gain of $3.3 million realized on this transaction was deferred and is being
recorded in income as the originally designated production is sold. At March
31, 2000, the unamortized portion of this gain was $3.2 million, of which $0.9
million was classified as noncurrent. The estimated fair value of the Company's
remaining gold hedging position at March 31, 2000 is approximately $18.2
million. The Company's gold and silver hedging program at March 31, 2000 covers
approximately 5% of its proven and probable reserves and contains no exposure to
floating lease rates or margin call requirements.
Under the Company's foreign currency protection program, the Company has
entered into foreign currency option contracts to minimize the effects of a
strengthening of either the Canadian or Australian currencies in relation to the
United States dollar. Realized and unrealized gains and losses on this program
are recorded in other income. At March 31, 2000, the Company had a net
unrealized loss of $3.7 million on open contracts under this program.
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting
for Derivative Instruments and Hedging Activities." SFAS 133 requires that
derivatives be recognized as assets or liabilities and be measured at fair
value. Gains or losses resulting from changes in the value of derivatives are
to be accounted for depending on the use of the derivatives and whether they
qualify for hedge accounting as either a fair value hedge or a cash flow hedge.
The key criterion for hedge accounting is that the hedging relationship must be
highly effective in achieving offsetting changes in fair value or cash flows of
the hedging instruments and the hedged items. SFAS 133 is effective
20
<PAGE>
for fiscal years beginning after June 15, 2000. In March 2000, the FASB issued
an exposure draft proposing certain amendments to SFAS 133. Under the proposed
amendments, it is possible that certain components of the Company's precious
metals hedging program could be excluded from the accounting requirements of
SFAS 133. The Company believes that changes in unrealized gains and losses on
Homestake's derivative activities, to the extent subject to the requirements of
SFAS 133, will qualify for hedge accounting and, to the extent effective, be
deferred in other comprehensive income. However, there are many complexities to
SFAS 133 and the proposed amendments, and the Company currently is evaluating
their impact on reported operating results and financial position. The effects
of adopting the new standard are not reasonably determinable at this time. The
Company expects to adopt SFAS 133 effective January 1, 2001.
Year 2000 Compliance
The Year 2000 (Y2K) issue is the result of computerized systems using two
digits rather than four to identify an applicable year. Date-sensitive systems
may recognize a date using "00" as the year 1900 rather than the year 2000.
This could result in a system failure or miscalculation causing disruptions to
business operations. In 1999, the Company completed a review of its computer-
based information systems and, where needed, Y2K compliant upgrades for the
Company's core financial systems were installed and tested. To date, no
significant Y2K problems have been encountered and none are expected.
Homestake's management information systems and operations staff will again
monitor critical operations during the December 31, 2000 - January 1, 2001 Y2k
rollover dates.
21
<PAGE>
Part II - OTHER INFORMATION
- ---------------------------
Item 4 - Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
At the Annual Meeting of Stockholders held on April 28, 2000, stockholders voted
on and approved: (i) the election of three Class I directors for terms expiring
in 2003, (ii) the Amended Homestake Mining Company Stock Option and Share Rights
Plan--1996, which, among other changes, has been amended to increase by
12,000,000 the number of shares available under the plan, and (iii) the
appointment of PricewaterhouseCoopers LLP as independent auditors for 2000. In
addition, the stockholders voted against (iv) a stockholder proposal that the
Company donate 0.1% of the Company's annual gold revenues to the Foundation
for the Advancement of Monetary Education, Ltd. for the years 2000 to 2005.
Stockholder votes were as follows:
<TABLE>
<CAPTION>
(i) Election of three Class I Directors: Votes For Votes Withheld
------------------------------------ ----------- --------------
<S> <C> <C> <C>
M. Norman Anderson 190,102,656 3,388,376
Robert H. Clark, Jr. 189,359,340 4,131,692
Jeffrey L. Zelms 190,092,227 3,398,805
</TABLE>
Mr. Anderson will reach the Company's mandatory retirement age for
directors and he will retire at the time of the 2001 Annual Meeting.
In addition to the aforementioned directors, the following directors
continued in office: Gerhard Ammann, Richard R. Burt, E. Paul McClintock,
John Neerhout, Jr., Peter J. Neff, Carol A. Rae, and Jack E. Thompson.
On April 28, 2000, Stuart T. Peeler retired as director.
(ii) Approval of the Amended Homestake Mining Company Stock Option and Share
-----------------------------------------------------------------------
Rights Plan--1996:
-----------------
Votes For Votes Against Abstain No Vote
--------- ------------- ------- -------
178,240,062 13,553,127 1,697,841 2
(iii) Appointment of PricewaterhouseCoopers LLP as independent auditors
-----------------------------------------------------------------
for 2000:
--------
Votes For Votes Against Abstain No Vote
--------- ------------- ------- -------
191,753,852 779,745 957,435 -
(iv) Stockholder Proposal:
--------------------
Votes For Votes Against Abstain No Vote
--------- ------------- ------- -------
5,815,772 133,265,842 6,372,277 48,037,141
22
<PAGE>
Item 5. - Other Information
- ---------------------------
(a) CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
Certain statements contained in this Form 10-Q 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
reserves, future production, costs per ounce, 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 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, assumptions regarding ground
conditions and physical characteristics of ore (such as hardness and
metallurgical characteristics), expected rates and costs of production, and
estimated future sales prices. 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 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. Noncash
cost estimates are based on total capital costs and reserve estimates,
changes based on actual amounts of unamortized capital, changes in reserve
estimates, and changes in estimates of final reclamation. Estimates of
future capital costs are based on a variety of factors and include past
operating experience, 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.
23
<PAGE>
See the Company's Form 10-K Report for the year ended December 31, 1999,
"RISK FACTORS" and "CAUTIONARY STATEMENTS" included under Part I - Item 1,
for a more detailed discussion of factors that may impact on expected
future results.
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
3.2 By-laws (as amended through April 28, 2000) of Homestake Mining
Company
4.1 Indenture dated as of June 23, 1993 between Homestake Mining Company,
Issuer and The Chase Manhattan Bank, N.A., Trustee, with respect to
U.S. $150,000,000 principal amount of 5 1/2% Convertible Subordinated
Notes due June 23, 2000 (incorporated by reference to Exhibit 4.2 to
the Registrant's Form 8-K Report dated as of June 23, 1993).
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed one report on Form 8-K during the quarter ended March 31,
2000. The report filed on January 18, 2000, was submitted to file certain
previously unfiled documents.
24
<PAGE>
SIGNATURES
----------
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.
HOMESTAKE MINING COMPANY
Date: May 10, 2000 By /s/ David W. Peat
------------ -----------------------
David W. Peat
Vice President, Finance and
Chief Financial Officer
(Principal Financial Officer)
Date: May 10, 2000 By /s/ James B. Hannan
------------ -----------------------
James B. Hannan
Vice President & Controller
(Principal Accounting Officer)
25
<PAGE>
HOMESTAKE MINING COMPANY
(A DELAWARE CORPORATION)
BYLAWS
As amended through April 28, 2000
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. The annual meeting of the Company shall be held on such day and at
such time as the Board of Directors shall determine, for the election of
Directors and the transaction of such other business as properly come before
such meeting.
SECTION 2. Special meetings of the stockholders may be called at any time by
the Chairman of the Board, by the President, by the Board of Directors of the
Company, by a committee of the Board of Directors which has been duly designated
by the Board of Directors and whose powers and authority, as provided in a
resolution of the Board of Directors or in the Bylaws of the Company include the
power to call such meetings, or by stockholders having not less than seventy-
five percent (75%) of the total voting power of all outstanding shares of stock
of the Company, but such special meetings may not be called by any other person
or persons; provided, however, that if and to the extent that any special
meeting of stockholders may be called by any other person or persons specified
in any provisions of the Restated Certificate of Incorporation or any amendment
thereto, or any certificate filed under Section 151(g) of the General
Corporation Law of Delaware (or its successor statute as in effect from time to
time hereafter), then such special meeting may also be called by the person or
persons in the manner, at the times and for the purposes so specified.
SECTION 3. All notices of meetings of stockholders shall be sent or otherwise
given in accordance with Section 4 of this Article I not less than ten (10) nor
more than sixty (60) days before the date of the meeting. The notice shall
specify the place, date and hour of the meeting and (1) in the case of a special
meeting, the general nature of the business to be transacted, and no other
business may be transacted, or (2) in the case of the annual meeting, those
matters which the Board of Directors, at the time of giving the notice, intends
to present for action by the stockholders, and (3) in the case of any meeting at
which directors are to be elected, the names of the nominees intended at the
time of the mailing of the notice to be presented by management for election.
SECTION 4. Notice of any meeting of stockholders shall be given either
personally or by mail or other written communication, charges prepaid, addressed
to the stockholder at the address of the stockholder appearing on the books of
the Company, or given by the stockholder to the Company for the purpose of
notice. If no such address appears on the Company's books or is given, notice
shall be deemed to have been given if sent to that stockholder by mail or other
written communication to the Company's principal executive office, or, if
published at least once
<PAGE>
in a newspaper of general circulation in the county where that office is
located. Notice shall be deemed to have been given at the time when delivered
personally or deposited in the mail or sent by telegram or other means of
written communication.
If any notice addressed to a stockholder at the address of that stockholder
appearing on the books of the Company is returned to the Company by the United
States Postal Service marked to indicate that the United States Postal Service
is unable to deliver the notice to the stockholder at that address, all future
notices or reports shall be deemed to have been duly given without further
mailing if these shall be available to the stockholder on written demand of the
stockholder at the principal executive office of the Company for a period of one
year from the date of the giving of the notice. An affidavit of the mailing or
other means of giving any notice of any stockholders' meeting may be executed by
the Secretary, any Assistant Secretary, or any transfer agent of the Company
giving the notice, and if executed shall be filed and maintained in the minute
book of the Company.
SECTION 5. Every annual meeting and every special meeting of the stockholders
shall be held at such place within or without the State of Delaware as may be
designated as the place for holding such meeting by the Board of Directors. In
the absence of any such designation, stockholders' meetings shall be held at the
principal executive office of the Company.
SECTION 6. Except as otherwise provided by statute of by the Restated
Certificate of Incorporation, the presence in person or by proxy of the holders
of a majority in voting power of the shares of capital stock of the Company at
the time issued and outstanding and entitled to vote at any meeting shall
constitute a quorum for the transaction of business. The stockholders present
at a duly called or held meeting at which a quorum is present may continue to do
business until adjournment notwithstanding the withdrawal of enough stockholders
to leave less than a quorum, if any action taken (other than adjournment) is
approved by at least a majority in voting power of the shares required to
constitute a quorum. If such quorum shall not be present or represented at any
meeting of the stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have the power to adjourn the meeting
from time to time until a quorum shall by present or represented. At any
adjourned meeting at which a quorum shall be present or represented any business
which might have been transacted at the meeting which was adjourned may be
transacted and with the same effect. If after the adjournment a new record date
is fixed for the adjourned meeting or if the adjournment is for more than thirty
(30) days, notice of the adjourned meeting shall be given as in the case of an
original meeting, but otherwise no further notice of the time and place of the
adjourned meeting need be given other than by announcement at the meeting at
which such adjournment is taken.
SECTION 7. Except as otherwise provided by statute or by the Restated
Certificate of Incorporation, every stockholder of record shall be entitled at
any meeting of stockholders to one vote on each matter submitted to a vote of
the stockholders for every share of stock standing in the name of such person on
the books of the Company and qualified to vote. The stockholders'
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vote shall be by written ballot unless the requirement therefor is dispensed
with by the Board of Directors. On any matter other than elections of directors,
any stockholder may vote part of the shares in favor of the proposal and refrain
from voting the remaining shares or vote them against the proposal, but, if the
stockholder fails to specify the number of shares which the stockholder is
voting affirmatively, it will be conclusively presumed that the stockholder's
approving vote is with respect to all shares that the stockholder is entitled to
vote. All matters (other than the election of directors) shall, unless otherwise
provided by the Restated Certificate of Incorporation, these By-laws, or the
rules and regulations of any stock exchange applicable to the Company or its
securities, be decided by the affirmative vote of the holders of a majority in
voting power of the shares of stock of the Company which are present in person
or by proxy and entitled to vote thereon.
SECTION 8. In the event the Board of Directors fixes a day for the
determination of stockholders of record entitled to vote as provided in Section
1 of Article XIV of these Bylaws, then only persons in whose names shares
entitled to vote stand on the stock records of the Company on such day shall be
entitled to vote.
If no record date is fixed, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the business day next preceding the day notice is given or,
if notice is waived, at the close of business on the business day next preceding
the day on which the meeting is held.
If no record date is fixed, the record date for determining stockholders for
any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote at
a meeting of stockholders shall apply to any adjournment of the meeting unless
the Board of Directors fixes a new record date for the adjourned meeting, but
the Board of Directors may fix a new record date for the adjourned meeting.
SECTION 9. At all meetings of the stockholders, stockholders may vote either
in person or by one or more agents authorized by a proxy. A proxy which does
not state that it is irrevocable shall continue in full force and effect unless
(1) revoked before the vote pursuant to that proxy, by a revocation delivered to
the Company stating that the proxy is revoked, or by the granting of a
subsequent proxy by, or attendance at the meeting and voting by, the person
granting the proxy, or (2) written notice of the death or incapacity of the
maker of that proxy is received by the Company before the vote pursuant to that
proxy is counted; provided, however, that no proxy shall be valid after the
expiration of three (3) years from the date of the proxy, unless otherwise
provided in the proxy. The revocability of a proxy that states on its face that
it is irrevocable shall be governed by the provisions of Section 212(e) of the
General Corporation Law of Delaware (or its successor statute as in effect from
time to time hereafter).
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SECTION 10. The transaction of business at any meeting of stockholders,
however called and noticed, and wherever held, shall be as valid as though had
at a meeting duly held after regular call and notice, if a quorum be present
either in person or by proxy, and if, either before or after a meeting, each
person entitled to vote, who was not present in person or by proxy, signs a
written waiver of notice or a consent to a holding of the meeting, or an
approval of minutes of the meeting. The waiver of notice or consent need not
specify either the business to be transacted or the purpose of any annual or
special meeting of stockholders. All such waivers, consents or approvals shall
be filed with the corporate records or made a part of the minutes of the
meeting.
Attendance by a person at a meeting shall also constitute a waiver of notice
of that meeting, except when the person objects at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened, and except that attendance at a meeting is not a waiver of any right
to object to the consideration of matters required by law to be included in the
notice of meeting but not so included if that objection is expressly made at the
meeting.
SECTION 11. No action shall be taken by the stockholders except at an annual
or special meeting of the stockholders.
SECTION 12. At any annual meeting of stockholders, only such business shall
be conducted as shall have been brought before the annual meeting (1) by or at
the direction of the chairman of the meeting or (2) by any stockholder who is a
holder of record at the time of the giving of the notice provided for in this
Section 12, who is entitled to vote at the meeting, and who complies with the
procedures set forth in this Section 12.
For business properly to be brought before an annual meeting by a stockholder,
the stockholder must have given timely notice thereof in proper written form to
the Secretary. To be timely, a stockholder's notice must be received at the
principal executive offices of the Company not less than 75 days nor more than
180 days prior to the anniversary date of the immediately preceding annual
meeting; provided, however, that in the event that the date of the annual
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meeting is more than 30 days earlier or more than 30 days later than such
anniversary date, notice by the stockholder to be timely must be so received not
earlier than the 180th day prior to such annual meeting and not later than the
close of business on the later of the 75th day prior to such annual meeting or
the 10th day following the day on which public announcement of the date of such
meeting is first made. To be in proper written form, a stockholder's notice to
the Secretary shall set forth in writing as to each matter the stockholder
proposes to bring before the annual meeting: (i) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting; and (ii) the name and address,
as they appear on the Company's books, of the stockholder proposing such
business. The foregoing notice requirements shall also be deemed satisfied by a
stockholder if the
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stockholder has notified the Company of his or her intention to present a
proposal at an annual meeting and such stockholder's proposal has been included
in a proxy statement that has been prepared by management of the Company to
solicit proxies for such annual meeting; provided, however, that if such
stockholder does not appear or send a qualified representative to present such
proposal at such annual meeting, the Company need not present such proposal for
a vote at such meeting, notwithstanding that proxies in respect of such vote may
have been received by the Company.
ARTICLE II
DIRECTORS
SECTION 1. Subject to the limitations prescribed by statute or by the
Restated Certificate of Incorporation or these Bylaws as to action to be
authorized or approved by the stockholders, all the powers, rights and
privileges of the Company shall be exercised by or under the direction of, and
the business and affairs of the Company shall be managed under the direction of,
its Board of Directors. Directors shall be elected by the stockholders of the
Company, and at each election the persons receiving the greatest number of
votes, up to the number of directors then to be elected, shall be the persons
then elected. The election of directors is subject to any provisions in the
Restated Certificate of Incorporation relating thereto, including any provisions
for a classified Board.
SECTION 2. Except as otherwise provided by statute or by the Restated
Certificate of Incorporation, any vacancy in the Board of Directors may be
filled by a majority of the remaining directors, though less than a quorum, or
by a sole remaining director, and each director so elected shall hold office
until his successor is elected and qualified.
SECTION 3. All meetings of the Board of Directors shall be held at the
principal office of the Company or at any other place within or without the
State of Delaware as the Board of Directors may from time to time fix therefor.
Any meeting of the Board of Directors, regular or special, may be held by
conference telephone or similar communication equipment, so long as all
directors participating in the meeting can hear one another, and all such
directors shall be deemed to be present in person at the meeting.
SECTION 4. A regular meeting of the Board of Directors shall be held, if a
quorum be present, in each and every year immediately after the adjournment of
the annual meeting of stockholders for the purpose of electing officers and
transacting such other business as might be transacted at any regular meeting of
the Board. Regular meetings of the Board of Directors, of which no notice shall
be required to be given, shall be held in every odd-numbered month in accordance
with a schedule established by the Board of Directors from time to time, except
that the scheduled date of any meeting may be changed by the Chairman of the
Board or the President, in the discretion of either, provided that notice of
such change shall be given to all directors personally or by mail, telegram,
telecopy or other means of electronic communication
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or telephone at least one (1) week prior to such scheduled date and at least
four (4) days prior to the date upon which such meeting is to be held.
SECTION 5. Special meetings of the Board of Directors shall be called by the
Secretary at the direction of the Chairman of the Board, the President, or a
majority of the directors. Notice of the time and place of any special meeting
of the Board of Directors shall be given by serving the same personally or by
telegram, telecopy or other means of electronic communication or telephone at
least two (2) hours before such meeting. Each member of the Board of Directors
shall, by writing filed with the Secretary, designate his post office address,
telecopier number, electronic mail address, telephone number or other relevant
delivery information to which notices of meetings of the Board of Directors of
this Company shall be directed, and in the event of any change therein shall
promptly inform the Company thereof.
SECTION 6. At all meetings of the Board of Directors a majority of the
directors shall be necessary and sufficient to constitute a quorum for the
transaction of business, and every act and decision done or made by a majority
of the directors present at a regular meeting or a duly called special meeting
held at which a quorum is present shall be the act of the Board of Directors,
unless a greater number is required by statute or by the Restated Certificate of
Incorporation. In the absence of a quorum, a majority of the directors present
at any meeting may adjourn the meeting from time to time until and not past the
time fixed for the next regular meeting of the Board of Directors. Notice of
the time and place of holding an adjourned meeting need not be given to
directors absent from the meeting which was adjourned if the time and place of
the adjourned meeting are fixed at the meeting which was adjourned.
SECTION 7. By resolution of the Board of Directors, a fixed sum may be
allowed each director attending a meeting of the Board of Directors. Members of
the Executive Committee or other committees may likewise be allowed fixed sums
as determined by the Board of Directors. All directors shall be reimbursed for
any reasonable expenses which they incur as such for attendance at meetings of
the Board of Directors or committees or otherwise. Directors who are not also
officers or employees of the Company may receive such compensation for their
services as directors as may be fixed or determined by the Board of Directors.
Except as provided herein, no director shall be compensated for his services as
a director, but any director may serve the Company in any other capacity and
receive compensation therefor.
SECTION 8. The transaction of business at any meeting of the Board of
Directors, however called and noticed, and wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if a quorum be
present and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice and consent to holding the meeting or
an approval of the minutes thereof, which waiver, consent, or approval shall be
filed with the corporate records or made a part of the minutes of the meeting.
Notice of a meeting shall also be deemed given to any director who attends the
meeting without protesting before or at its commencement, the lack of notice to
that director. Any action required or permitted to be
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taken by the Board of Directors may be taken without a meeting, if all members
of the Board shall individually or collectively consent in writing to such
action. Such written consent or consents shall be filed with the minutes of the
proceedings of the Board of Directors.
SECTION 9. The authorized number of Directors is hereby set at ten until such
number is changed by a Bylaw or amendment thereof duly adopted by the
stockholders in accordance with the Restated Certificate of Incorporation or by
the Board of Directors amending this Section Nine. The Board of Directors shall
be divided into three classes of directors elected for terms of three years
each. Until so changed, Class I shall consist of three directors, Class II
shall consist of three directors, and Class III shall consist of four directors.
SECTION 10. The Board of Directors may from time to time designate from one
to three former directors of this Company as Consultants to the Board of
Directors. The term of office of each such Consultant to the Board of Directors
shall terminate immediately after the adjournment of each annual meeting of
stockholders of the Company, or at such other time as may be determined by the
Board of Directors. A Consultant to the Board of Directors may attend meetings
of the Board of Directors with the privilege of participating in all
discussions, but without the right to vote, and shall be eligible for
appointment as Consultant to committees of the Board of Directors, but with no
right to vote. Consultants shall not be included in determining the presence of
a quorum. Other rights, privileges and duties of Consultants to the Board of
Directors and any compensation to be paid to Consultants to the Board of
Directors may be provided from time to time by resolution of the Board of
Directors.
ARTICLE III
EXECUTIVE AND OTHER COMMITTEES
SECTION 1. The Board of Directors may, by resolution or resolutions passed by
a majority of the directors, appoint from their number an Executive Committee of
one or more directors, who shall make recommendations to the Board. The
Executive Committee, to the extent provided in the resolution of the Board of
Directors, shall have and may exercise all the powers and authority of the Board
of Directors including, without limitation, the power and authority to declare a
dividend, to authorize the issuance of stock and to adopt a certificate of
ownership and merger pursuant to Section 253 of the General Corporation Law of
Delaware (or its successor statute as in effect from time to time hereafter);
but shall not have the power or authority to: (a) amend the Restated Certificate
of Incorporation (except that a committee may, to the extent authorized in
resolutions providing for the issuance of stock adopted by the Board of
Directors as provided in Section 151(a) of the General Corporation Law of
Delaware (or its successor statute as in effect from time to time hereafter),
fix any of the preferences or rights of such shares relating to dividends,
redemption, dissolution, distribution of assets of the Company, or the
conversion into or the exchange of such shares for shares of any other class or
classes or any other series of the same of any other class or classes of stock
of the Company), (b) adopt an agreement of merger or consolidation under Section
251 or 252 of the General Corporation Law
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of Delaware (or its successor statute as in effect from time to time hereafter),
(c) recommend to the stockholders the sale, lease or exchange of all or
substantially all of the Company's property and assets, (d) recommend to the
stockholders a dissolution of the Company or a revocation of a dissolution, or
(e) amend the Bylaws of the Company. The Board of Directors shall elect a
Chairman of the Executive Committee, and in his absence the Chairman of the
Board shall act as Chairman of the Executive Committee, ex officio, in his
place, and in the absence of the Chairman of the Executive Committee and the
Chairman of the Board, the President of the Company shall act as Chairman of the
Executive Committee, ex officio, in their places.
SECTION 2. A majority of the Executive Committee shall constitute a quorum
for the transaction of business at any meeting thereof duly called and held.
The Board of Directors shall have the power to provide by resolution for regular
meetings of the Executive Committee and to specify the time and place of holding
such regular meetings. Special meetings of the Executive Committee may be
called at any time by the Chairman of the Board, the President, or by a majority
of the members of the Executive Committee and notice of all such special
meetings shall be given in the manner provided in Section 5 of Article II.
Meetings of the Executive Committee may be held at the principal office of the
Company, or, if authorized by resolution of the Board of Directors, such
meetings may, by unanimous consent of the members of the committee, be held at
any other place. The Board of Directors shall have the power to prescribe rules
for the government of the Executive Committee not inconsistent with the
provision of these Bylaws. In the absence of any such prescription by the Board
of Directors of by the Bylaws, the regular and special meetings and other
actions of the Executive Committee shall be governed by the provisions of
Article II applicable to meetings and actions of the Board, with such changes in
the context of these Bylaws as are necessary to substitute the Executive
Committee and its members for the Board of Directors and its members.
SECTION 3. The Board of Directors may, by resolution or resolutions passed by
a majority of the directors, appoint from their number such other committees
consisting of one or more directors as the Board of Directors may deem
advisable. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent member at the meeting of the
committee. Any such committee, to the extent provided in the resolution of the
Board of Directors, shall have all the authority of the Board of Directors,
except with respect to the matters set forth in (a) through (e) of Section 1 of
this Article III and shall be governed in accordance with Section 2 of this
Article III.
SECTION 4. The Executive and other committees shall keep records of their
proceedings and report the same to the Board of Directors whenever so required.
ARTICLE IV
OFFICERS
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SECTION 1. The officers of this Company shall be a Chairman of the Board, a
President, a Vice President, a Secretary, a Treasurer and a Controller, who
shall be elected by and hold office at the pleasure of the Board of Directors.
The Board of Directors may also elect such additional officers, if any, as it
shall deem expedient, including, without limitation, one or more Executive Vice
Presidents, one or more Senior Vice Presidents, one or more Vice Presidents and
one or more assistant officers. Only members of the Board of Directors shall be
eligible for the office of the Chairman of the Board and the office of
President, but no other officer need be a member of the Board of Directors. Any
two or more offices may be held by the same person. The compensation of
officers shall be fixed and determined by the Board of Directors from time to
time.
SECTION 2. The Board of Directors, at its first meeting after each annual
meeting of stockholders, shall elect a Chairman of the Board, a President, a
Vice President, a Secretary, a Treasurer and a Controller and at such time or
from time to time may elect or appoint such other officers and agents as it
shall deem expedient.
SECTION 3. Except as otherwise provided by law, or in these Bylaws, or by
resolutions of the Board of Directors, each of such officers shall serve until
the date appointed by these Bylaws for the next annual meeting of stockholders
and until his successor is elected or appointed and shall have qualified. If
the office of any officer becomes vacant for any reason, the vacancy may be
filled by the Board of Directors.
SECTION 4. The Board of Directors, in its discretion, may require any
officer, agent or employee of the Company to give security for the faithful
performance of his duties in such form and amount and with or without one or
more of such sureties as the Board of Directors may determine.
SECTION 5. Nothing in this Article IV or elsewhere in these Bylaws shall
prevent the Board of Directors from authorizing, or the Company from executing,
a contract for the employment of a person as an officer of the Company for a
period of more than one year.
ARTICLE V
CHAIRMAN OF THE BOARD AND PRESIDENT
SECTION 1. The Chairman of the Board shall, if present, preside at all
meetings of the stockholders and of the Board of Directors, and shall have such
other powers and duties as shall be prescribed by the Board of Directors or by
law. He shall be a member ex officio of all committees, except the Audit,
Compensation and Nominating Committees.
SECTION 2. The President shall, if present and in the absence of the Chairman
of the Board, preside at all meetings of the stockholders and of the Board of
Directors, and shall have such other powers and duties as shall be prescribed by
the Board of Directors or by law. He shall
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be a member ex officio of all committees, except the Audit, Compensation and
Nominating Committees.
ARTICLE VI
POWERS AND DUTIES OF THE CHIEF EXECUTIVE OFFICER
AND HEAD OF THE COMPANY
Either the Chairman of the Board or the President, as may be determined from
time to time by the Board of Directors, shall have the powers and duties of the
Chief Executive Officer and head of the Company. Such powers and duties shall
include the general control and management of the business and affairs of the
Company; the responsibility for seeing that all orders and resolutions of the
Board of Directors are carried into effect; the exclusive authority to execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
Company, except where required or permitted by law to be otherwise signed and
executed and except where the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other officer or agent of the
Company; and membership ex officio in all committees, except the Audit,
Compensation and Nominating Committees.
ARTICLE VII
EXECUTIVE VICE PRESIDENTS AND VICE PRESIDENTS
SECTION 1. Executive Vice Presidents, if any shall have been elected and be
in office, shall have and may exercise the powers and duties of the President in
the absence or inability of the latter and such other powers and duties as may
be assigned to them by the Board of Directors.
SECTION 2. The Vice President or Vice Presidents (including any Senior Vice
Presidents) shall have and exercise the powers and duties of the Executive Vice
President in the absence or inability of the President and the Executive Vice
Presidents and such other powers and duties as may be assigned to them
respectively by the Board of Directors.
SECTION 3. The Vice President, Finance shall be the Chief Financial Officer
of the Company.
ARTICLE VIII
SECRETARY AND ASSISTANT SECRETARIES
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SECTION 1. The Secretary shall have custody of the seal of the Company, and
when authorized by the Board of Directors, he shall affix the same to any
instrument requiring it, and when so affixed it shall be attested by his
signature or by the signature of the Treasurer or an Assistant Secretary. He
shall attend all meetings of the stockholders and of the Board of Directors and
keep the minutes of all proceedings in a book or books to be kept for that
purpose at the principal office of the Company or at such other place as the
Board of Directors may from time to time determine, and he shall perform like
duties for the Executive and other committees when required. He shall attend to
the giving and serving of all notices of the Company, and he shall perform such
other duties as may be incidental to his office or as may be assigned to him by
the Board of Directors, the Chairman of the Board, the President, or the officer
under whose supervision he shall be.
SECTION 2. It shall be the duty of the Assistant Secretaries, if any shall
have been elected and be in office, to aid the Secretary in the discharge of his
duties and to perform such other duties as may be assigned to them by the Board
of Directors, the Chairman of the Board, the President, the Vice President,
Finance, or the Secretary.
ARTICLE IX
TREASURER AND ASSISTANT TREASURER
SECTION 1. The Treasurer shall have the care and custody of the funds and
securities of the Company, except as otherwise determined by the Board of
Directors, and shall deposit all such funds and securities of the Company in the
name and to the credit of the Company in such depositories and places and
subject to withdrawal in such manner as these Bylaws or the Board of Directors
may determine. Within established lines of authority, he shall be responsible
for the administration of the Company's securities portfolio, pension plans,
insurance and employee benefit programs, the keeping of the stock certificate
book and such other books and records as the Board of Directors may direct. He
shall also have charge of a stock book containing the names of the stockholders
and their addresses, the number of shares of stock held by them respectively,
the name and date of the certificates issued for the same, and the number and
date of cancellation of every certificate surrendered for cancellation, and
shall have such other powers and perform such other duties as may be conferred
upon or assigned to him by the Board of Directors, the Chairman of the Board,
the President, the Vice President, Finance, or the officer under whose
supervision he shall be.
SECTION 2. It shall be the duty of the Assistant Treasurer, if one shall have
been elected and be in office, to aid the Treasurer in the discharge of his
duties and perform such other duties as may be assigned to him by the Board of
Directors, the Chairman of the Board, the President, the Vice President,
Finance, or the Treasurer.
ARTICLE X
CONTROLLER AND ASSISTANT CONTROLLER
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SECTION 1. The Controller shall keep or cause to be kept adequate and correct
accounts of the corporate properties and business transactions in books
belonging to the Company, and he shall disburse the funds of the Company as
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors,
whenever they may require it, an account of all of his transactions and the
financial condition of the Company. He shall be responsible for the
administration of programs providing for financial management and budgetary
controls of the Company, development of accounting policies and procedures, and
use of data processing equipment and the preparation, review and filing of all
tax and other financial reports and returns, and he shall have such other powers
and perform such other duties as may be conferred upon or assigned to him by the
Board of Directors, the Chairman of the Board, the President, the Vice
President, Finance, or the officer under whose direct supervision he shall be.
SECTION 2. It shall be the duty of the Assistant Controller, if one shall
have been elected and be in office, to aid the Controller in the discharge of
his duties and to perform such other duties as may be assigned to him by the
Board of Directors, the Chairman of the Board, the President, the Vice
President, Finance, or the Controller.
SECTION 3. The Controller shall be the Chief Accounting Officer of the
Company.
ARTICLE XI
GENERAL MANAGER
SECTION 1. The Board of Directors may appoint a General Manager who shall not
be an officer of the Company unless the Board shall otherwise determine.
SECTION 2. Subject to the supervision and direction of the Chairman of the
Board or the President, and in accordance with the policies determined by the
Board of Directors, the General Manager shall have power and authority to do and
transact and supervise and direct such of the usual and ordinary business of the
Company as may be designated by the Chairman of the Board or the President.
SECTION 3. The Board of Directors may also appoint an Assistant General
Manager to aid the General Manager in the performance of his duties and to
perform such other duties as may be required of him by the Chairman of the Board
or the President.
SECTION 4. The Chairman of the Board or the President may, with the approval
of the Board of Directors, appoint managers or superintendents for specific
operations that are not related to or included in those assigned to the General
Manager, with duties and responsibilities as may be designated by the Chairman
of the Board or the President.
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ARTICLE XII
REMOVALS, RESIGNATIONS AND VACANCIES OF DIRECTORS AND OFFICERS
SECTION 1. No member of the Board of Directors may be removed without cause
and except in compliance with the Company's Restated Certificate of
Incorporation.
SECTION 2. Any director or officer may resign his office at any time, such
resignation to be made in writing and to take effect from the time of its
receipt by the Company, unless a different time be fixed in the resignation, and
in that event, from the time so fixed. The acceptance of a resignation shall
not be required to make it effective.
SECTION 3. Any officer elected or appointed by the Board of Directors may be
removed at any time with or without cause by the Board of Directors. Any other
officer or employee of the Company may be removed at any time with or without
cause by the Board of Directors or by any committee or superior officer upon
whom such power of removal may be conferred by the Bylaws or by the Board of
Directors.
SECTION 4. If the office of any director becomes vacant for any cause, such
vacancy may be filled for the unexpired portion of the term, if any, by a
majority of the remaining directors, though less than a quorum, or by a sole
remaining director.
ARTICLE XIII
CERTIFICATES OF STOCK
SECTION 1. Form of Certificate. Certificates for shares of stock of the
Company shall be in such form and of such design as the Board of Directors shall
prescribe and each certificate for shares issued by the Company shall be signed
by the Chairman of the Board, or the President or any Executive Vice President
or Vice President and the Secretary or an Assistant Secretary. Any or all of
the signatures on the certificate may be facsimile. If any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Company
with the same effect as if such person were an officer, transfer agent or
registrar at the date of issue. The certificates for shares shall be numbered
and registered as they are issued. They shall exhibit the number, date of
issuance, name of person to whom issued, designation, if any, the class or
series of shares represented thereby, the par value of the shares or a statement
that such shares are without par value.
SECTION 2. Transfer of Shares. Upon surrender to the Secretary or Transfer
Agent of the Company of a certificate for shares, duly endorsed or accompanied
by proper evidence of succession, assignment or authority to transfer, a new
certificate shall be issued to the person entitled thereto and the old
certificate canceled and the transaction recorded upon the books of the Company.
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SECTION 3. Lost Certificates. The Chairman of the Board or the President and
the Secretary or the Assistant Secretary may in their discretion direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Company alleged to have been lost or
destroyed upon the production by the person claiming the certificate for shares
to be lost or destroyed of satisfactory evidence of the loss or destruction of
such certificate or certificates and of the claimant's ownership of the shares
of stock represented thereby, together with a bond in favor of the Company, with
a surety satisfactory to said officers, in the amount of the then current market
value of the stock represented by such allegedly lost certificate or
certificates, conditioned upon such claimant and surety indemnifying and saving
harmless the Company from all and every cost, charge, expense and liability
which it may in any manner incur by reason of the issuance of such new
certificate or certificates, and further conditioned upon their surrendering to
the Company for cancellation such allegedly lost certificate or certificates in
the event of their subsequent discovery; or the Chairman of the Board or
President or Secretary may refer any such application for the issuance of a new
certificate or certificates to the Board of Directors which shall have the power
to direct the issuance of a new certificate or certificates upon submission of
such proof and upon such guarantee on the part of the applicant as the Board of
Directors may deem satisfactory.
ARTICLE XIV
GENERAL PROVISIONS
SECTION 1. Fixing of Record Date or Closing of Transfer Books. The Board of
Directors may fix a time in the future as a record date for the determination of
the stockholders entitled to notice of and to vote at any meeting or entitled to
receive any dividend or distribution or any allotment of rights or to exercise
any rights in respect of any other lawful action. The record date so fixed
shall not be more than sixty (60) nor less than ten (10) days prior to the date
of such meeting and no more than sixty (60) days prior to any other action.
When a record date is so fixed, then, subject to the provisions of the General
Corporation Law of Delaware, only stockholders of record at that date shall be
entitled to notice of and to vote at the meeting or to receive the dividend,
distribution or allotment of rights or to exercise the rights, as the case may
be, notwithstanding any transfer of any shares on the books of the Company after
the record date.
SECTION 2. Dividends. Subject to the provisions of the Restated Certificate
of Incorporation relating thereto, if any, dividends may be declared by the
Board of Directors at any regular or special meeting of the Board of Directors
pursuant to law. Dividends may be paid in cash, in property, or in shares of
capital stock, subject to any provisions of the Restated Certificate of
Incorporation.
SECTION 3. Reserves. Before payment of any dividend there may be set aside
out of any funds of the Company available for dividends such sum or sums as the
Board of Directors from time to time in their absolute discretion think
appropriate as a reserve fund to meet
14
<PAGE>
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Company, or for such other purposes as the Board of Directors
shall think conducive to the interests of the Company, and the Board of
Directors may abolish any such reserve in the manner in which it was created.
SECTION 4. Annual Report. The Board of Directors shall cause an annual
report to be sent to the stockholders not later than one hundred twenty (120)
days after the close of each fiscal year of the Company and at least fifteen
(15) days prior to the annual meeting of stockholders to be held during the
ensuing fiscal year.
SECTION 5. Checks, Drafts and Notes. All checks, drafts and demands for
money and notes of the Company shall be signed by such individual or individuals
as the Board of Directors may from time to time designate.
SECTION 6. Representation of Shares of Other Corporations. The chief
executive officer or any other officer or officers authorized by the Board of
Directors or the President are each authorized to vote represent, and exercise
on behalf of the Company all rights incident to any and all shares of any other
corporation or corporations standing in the name of the Company. The authority
herein granted may be exercised either by any such officer in person or by any
other person authorized so to do by proxy or power of attorney duly executed by
said officer.
SECTION 7. Seal. The seal of the Company shall consist of a circle bearing on
its surface the inscription,
"Homestake Mining Company
Delaware
Incorporated November 28, 1983"
SECTION 8. Indemnification.
(a) Right of Indemnification. To the fullest extent permitted by the General
------------------------
Corporation Law of Delaware, the Company shall indemnify each director and
officer and may indemnify each employee or other agent of the Company
against expenses, judgments, fines, settlements and other amounts actually
and reasonably incurred in connection with any action, suit or proceeding
arising by reason of the fact that any such person is or was a director,
officer, employee or other agent of the company or is or was serving at the
request of the Company as a director, officer, employee or other agent of
another corporation, partnership, joint venture, trust or other enterprise.
(b) Advances of Expenses. Expenses incurred by an officer or director in
--------------------
defending a civil or criminal action, suit or proceeding arising by reason
of the fact that such director or officer is or was a director or officer
of the Company or was serving at the request of
15
<PAGE>
the Company as a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust or other enterprise shall be
paid by the Company in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay all amounts so advanced if it shall ultimately
be determined that such director or officer is not entitled to be
indemnified by the Company as authorized in this Section 8. Such expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate. The Board
of Directors may, with the consent of such director, officer, employee or
other agent of the Company, authorize the legal counsel of the Company to
represent such person, in any action, suit or proceeding, whether or not
the Company is a part to such action, suit or proceeding.
(c) Procedure for Indemnification. Any indemnification or advance of expenses
-----------------------------
required hereunder shall be made promptly, and in any event within sixty
(60) days after a written request therefor by a director or officer. The
right to indemnification or advances as granted by this Section 8 shall be
enforceable by a director or officer in any court of competent
jurisdiction, if the Company denies such request, in whole or in part, or
if no disposition thereof is made within sixty (60) days. The director's
or officer's expenses incurred in connection with successfully establishing
his right to indemnification, in whole or in part, in any such action shall
also be indemnified by the Company. It shall be a defense to any such
action (other than an action brought to enforce a claim for the advance of
expenses where the required undertaking, if any, has been received by the
Company) that the claimant has not met the standard of conduct required by
law, but the failure of the Company (including its Board of Directors, its
independent legal counsel and its stockholders) to have made a
determination as to whether indemnification of the claimant is proper in
the circumstances because he has met the applicable standard of conduct
shall not be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
(d) Other Rights. The indemnification and advancement of expenses provided by
------------
or granted pursuant to this Section 8 shall not be deemed exclusive of any
other rights to which a person seeking indemnification may be entitled
under any law (common or statutory), agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding office. All
rights to indemnification under this Section 8 shall be deemed to be a
contract between the Company and each director and officer who serves or
served in such capacity at any time while this Section 8 is in effect, and
any repeal or modification of this Section 8 or relevant provision of the
General Corporation Law of Delaware or any other applicable law shall not
in any way diminish any rights to indemnification of such director or
officer, or the obligations of the Company arising hereunder prior to such
modification or repeal.
16
<PAGE>
(e) Insurance. The Company may, but shall not be required to, purchase and
---------
maintain insurance on behalf of any person who is or was a director or
officer of the Company against any liability asserted against such person
and incurred by him or on his behalf in such capacity or as a director,
officer, employee or other agent of another corporation, partnership, joint
venture, trust or other enterprise, for which such person is or was serving
at the request of the Company, or arising out of his status as such,
whether or not the Company would have the power to indemnify him against
such liability under the provisions of this Section 8, all as the Board of
Directors may from time to time deem appropriate.
(f) Definitions. For purposes of this Section 8:
-----------
(i) service as a director, officer, employee or other agent of any
corporation, partnership, joint venture, trust or other enterprise in
which the Company, directly or indirectly, holds an interest shall be
deemed to be service at the request of the Company;
(ii) "the Company" shall include in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority
to indemnify its directors, officers, employees or other agents, so
that any person who is or was a director, officer, employee or other
agent of such constituent corporation, or is or was serving at the
request of such constituent corporation, as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the
provision of this Section 8 with respect to the resulting or surviving
corporation as he would have with respect to such constituent
corporation if its separate existence had continued;
(iii) "other enterprise" shall include without limitation employee benefit
plans; "fines" shall include without limitation any excise taxes
assessed on a person with respect to an employee benefit plan; and
"serving at the request of the Company" shall include without
limitation any service as a director, officer, employee or other agent
of the Company which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee
benefit plan, its participants or beneficiaries;
(iv) the indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 8 shall, unless other wise provided
when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person;
17
<PAGE>
(v) "expenses" shall include all direct and indirect costs, charges and
attorneys' fees; and
(vi) "action, suit or proceeding" shall include any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, and any appeal therefrom.
(g) Effect of Advances. Advances of expenses by the Company as required or
------------------
authorized by this Section 8 shall not be deemed or interpreted as
ratifying, approving or condoning any act or omission by any director,
officer or employee of the Company in violation of standards of conduct
required by law.
(h) Savings Clause. If this Section 8 or any portion hereof shall be
--------------
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify each director and officer of the
Company as to expenses, judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding to the fullest extent
permitted by any applicable portion of this Section 8 that shall not have
been invalidated and to the fullest extent permitted by applicable law.
ARTICLE XV
AMENDMENT OF BYLAWS
These Bylaws may be amended or repealed, or new bylaws may be adopted, (a) by
the affirmative vote of the holders of a majority in voting power of the shares
of capital stock of the Company entitled to vote thereon or (b) by the
affirmative vote of the majority of the Board of Directors at any regular or
special meeting. Any Bylaw adopted or amended by the stockholders may be
amended or repealed by the Board of Directors.
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT MARCH 31, 2000 AND THE RELATED STATEMENT OF
CONSOLIDATED OPERATIONS FOR THE 3 MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 264,064
<SECURITIES> 23,725
<RECEIVABLES> 41,218
<ALLOWANCES> 0
<INVENTORY> 64,155
<CURRENT-ASSETS> 417,017
<PP&E> 2,676,938
<DEPRECIATION> (1,598,320)
<TOTAL-ASSETS> 1,604,002
<CURRENT-LIABILITIES> 144,925
<BONDS> 280,040
0
0
<COMMON> 253,761
<OTHER-SE> 477,006
<TOTAL-LIABILITY-AND-EQUITY> 1,604,002
<SALES> 164,214
<TOTAL-REVENUES> 156,064
<CGS> 144,530<F1>
<TOTAL-COSTS> 155,662<F2>
<OTHER-EXPENSES> 10,178<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,445
<INCOME-PRETAX> (14,221)
<INCOME-TAX> (2,077)
<INCOME-CONTINUING> (16,143)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,143)
<EPS-BASIC> (0.06)
<EPS-DILUTED> (0.06)
<FN>
<F1>INCLUDES PRODUCTION COSTS AND DEPRECIATION, DEPLETION AND AMORTIZATION FROM THE
STATEMENT OF CONSOLIDATED OPERATIONS.
<F2>INCLUDES PRODUCTION COSTS AND DEPRECIATION, DEPLETION AND AMORTIZATION AND
ADMINISTRATIVE AND GENERAL EXPENSE FROM THE STATEMENT OF CONSOLIDATED
OPERATIONS.
<F3>INCLUDES EXPLORATION EXPENSE, WRITE-DOWNS AND OTHER UNUSUAL CHARGES,
BUSINESS COMBINATION AND INTEGRATION COSTS, AND OTHER EXPENSE FROM THE
STATEMENT OF CONSOLIDATED OPERATIONS.
</FN>
</TABLE>
