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FILED UNDER RULE 424(B)(3)
REGISTRATION STATEMENT NO. 333-41434
PROSPECTUS
2,600,000 Shares
HOMESTAKE MINING COMPANY
Common Stock
This prospectus relates to the public offering, which is not
being underwritten, of up to 2,600,000 shares of our common stock
by Case, Pomeroy & Company, Inc. The prices at which Case
Pomeroy may sell the shares will be determined by the prevailing
market for the shares or in negotiated transactions. We will not
receive any proceeds from the sale of shares offered under this
prospectus.
Our common stock is traded on the NYSE under the symbol
"HM." The last reported sale price on August 3, 2000 was $5.25.
____________________________________________________________________
SEE "RISK FACTORS" BEGINNING ON PAGE 2 OF THIS PROSPECTUS TO READ
ABOUT IMPORTANT FACTORS YOU SHOULD CONSIDER BEFORE PURCHASING
SHARES OF THE COMMON STOCK.
____________________________________________________________________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER
REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES
OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is August 4, 2000
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TABLE OF CONTENTS
Homestake Mining Company ................................... 1
Risk Factors ............................................... 2
Cautionary Statements ...................................... 7
Use of Proceeds ............................................ 11
Selling Stockholder Information ............................ 11
Plan of Distribution ....................................... 12
Where You Can Find More Information ........................ 13
Incorporation by Reference ................................. 14
Legal Matters .............................................. 15
Experts .................................................... 15
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HOMESTAKE MINING COMPANY
INTRODUCTION
Homestake Mining Company is one of the largest North
American-based gold mining companies with annual production of
approximately 2.4 million gold equivalent ounces and reserves of
approximately 18.8 million gold ounces and 110 million silver
ounces at December 31, 1999. Homestake's operations include
mineral exploration, extraction, processing, refining and
reclamation. Gold bullion is Homestake's principal product.
Homestake has significant operations in the United States, Canada
and Australia. Homestake also has operations in Chile. Homestake
is engaged in active exploration projects in the United States,
Canada, Australia, Argentina, Chile and the Andean region of
South America.
Homestake is a Delaware corporation incorporated in 1983 as
the parent holding company of Homestake Mining Company of
California, which has been engaged in the gold mining business
since 1877.
SIGNIFICANT 2000 DEVELOPMENTS
In March 2000, Homestake announced that the mineralized
material at its 60%-owned Veladero project in northwestern
Argentina had increased to 220.6 million tons at an average grade
of 0.035 ounces of gold and 0.668 ounces of silver per ton. The
increase is based on information compiled from 87 additional
holes drilled from June 1999 in the Amable and Filo Federico
deposits, as well as step-out holes drilled north and east of
Amable and southeast of Filo Federico.
On July 14, 2000, Homestake acquired all of the issued and
outstanding capital stock of Bargold Corporation, a Delaware
corporation ("Bargold"), from Case Pomeroy. The purchase price,
$42,899,250, was paid in cash and 2.6 million shares of Homestake
common stock. The purchase price may be adjusted in certain
circumstances. Bargold holds a 25% interest in the Round
Mountain mine in Nevada. As a result of its acquisition of
Bargold from Case Pomeroy, Homestake now owns 50% of the Round
Mountain mine interests.
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RISK FACTORS
The following risk factors should be considered in
conjunction with the other information included in "Cautionary
Statements."
RISKS INHERENT IN GOLD EXPLORATION, DEVELOPMENT AND PRODUCTION
The business of gold exploration, development and production
by its nature involves significant risks. Among other things,
the business depends on successful location of reserves and
skillful management. Gold exploration is highly speculative in
nature, involves many risks and frequently is non- productive.
Once mineralization is discovered and determined to be
economically recoverable, it usually takes a number of years from
the initial phase of exploration until production commences,
during which time the economic feasibility of production may
change. Substantial expenditures are required to establish
reserves through drilling, to determine means of production and
metallurgical processes to extract the metal from ore and, in the
case of new properties, to construct mining and processing
facilities.
Mining is subject to a variety of risks and hazards,
including rock falls and slides, cave-ins, flooding and other
weather conditions, and other acts of God. Homestake maintains
and intends to continue to maintain, property and liability
insurance consistent with industry practice, but such insurance
contains exclusions and limitations on coverage. For example,
coverage for environmental liability generally is limited and may
be totally unavailable. There can be no assurance that insurance
will continue to be available at economically acceptable
premiums. Production costs also can be affected by unforeseen
changes in ore grades and recoveries, permitting requirements,
environmental factors, work interruptions, operating
circumstances, unexpected changes in the quantity or quality of
reserves, unstable or unexpected ground conditions, and technical
issues.
Most of Homestake's gold production and significant
exploration activities take place in the United States, Australia
and Canada, all of which historically have experienced relatively
low levels of political and economic risk. Homestake also
produces gold in Chile and conducts exploration activities in
Argentina, Chile and the Andean region of South America. These
regions generally have higher levels of political and economic
risk than the United States, Australia and Canada, including
greater potential for government instability, uncertainty of laws
and legal enforcement and compliance, defects in or uncertainty
as to title to mining property, expropriation of property,
restrictions on production, export controls, currency non-
convertibility, fluctuations in currency exchange rates,
inflation and other general economic and political uncertainties.
RISKS OF GOLD AND SILVER PRICE FLUCTUATIONS AND HEDGING
ACTIVITIES
The results of Homestake's operations are significantly
affected by the market price of gold and, to a lesser extent, the
market price of silver. The markets for gold and silver are
worldwide markets. Gold and silver prices are subject to
volatile price movements over short periods of time and are
influenced by numerous factors over which Homestake has no
control, including expectations with respect to the rate of
inflation, the relative strength of the United States dollar and
certain other currencies, interest rates, global or regional
political or economic crises, demand for jewelry and industrial
products containing gold and silver, speculation, and sales by
central banks and other holders and producers of gold and silver
in response to these factors.
The following table shows the reported annual high, low,
average and end of the period afternoon fixing prices of gold per
ounce and silver per ounce in US dollars on the London Bullion
Market.
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YEAR ENDED DECEMBER 31,
1999 1998 1997 1996 1995
GOLD
High ................ $326 $313 $367 $416 $397
Low ................. 253 273 283 367 372
Average ............. 279 294 331 388 384
Period End .......... 290 287 290 368 387
SILVER
High ................ $5.71 $7.81 $6.27 $5.83 $6.04
Low ................. 4.88 4.69 4.22 4.71 4.41
Average ............. 5.22 5.54 5.17 5.19 5.19
Period End .......... 5.33 5.01 5.95 4.73 5.11
The supply of gold and silver includes a combination of new
mine production, recycling of industrial products containing gold
and silver, and sales from existing stocks of bullion and
fabricated gold and silver held by governments, public and
private financial institutions, and individuals.
In general, hedging enables a gold and silver producer to
fix a future price for hedged gold and silver that generally is
higher than the then current spot price. However, to the extent
that sales of future production are hedged, the ability to
realize future increases in prices may be reduced subject to the
producer's ability to extend the expiry dates of the hedge
contracts.
Homestake has adopted a precious metals hedging policy under
which Homestake, in appropriate circumstances, may enter into
forward-sales transactions for up to 30% of its gold and silver
production in each of the subsequent ten years (five years for
silver) at prices in excess of certain targeted prices.
Homestake may also use, in appropriate circumstances,
combinations of put and call option contracts, which provide an
effective price floor for sales. To the extent Homestake has not
hedged its production in forward-sales transactions or
established price floors, its profitability is fully exposed to
fluctuations in the current price of gold and silver in world
markets.
Homestake's results also are affected to a lesser degree by
the market prices for sulfur and for crude oil. Sulfur prices
are affected principally by the demand for fertilizer and the
availability of by-product sulfur recovered during the refining
and processing of oil and natural gas. Crude oil prices are
affected principally by supply and demand for gasoline and fuel
oil as well as global or regional political or economic crises.
RISKS ASSOCIATED WITH RESERVE REALIZATION
Gold and silver reserves reported by Homestake reflect
estimated quantities and grades of gold and silver in deposits
and in stockpiles of mined material that Homestake believes can
be mined, processed and sold at prices sufficient to recover the
estimated future cash costs of production, remaining investment
and anticipated additional capital expenditures. Reserves are
estimates based upon drilling results, past experience with
mining properties, experience of the person making the reserve
estimates and many other factors. Reserve estimation is an
interpretive process based upon available data. Further,
reserves are valued based on estimates of future costs and future
prices. Homestake's gold reserves at December 31, 1999 and 1998
are based on an assumed price of $325 per ounce. Silver reserves
at December 31, 1999 and 1998 at the Eskay Creek mine are based
on assumed silver prices of $5.25 per ounce and $5 per ounce,
respectively.
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Actual quality and other characteristics of ore deposits and
gold and silver prices will differ from the assumptions used to
develop reserves. Such differences may be significant.
Sulfur and oil reserve realization is subject to similar
risks. In the third quarter of 1997, Homestake wrote off its
entire sulfur mine investment in light of the continued depressed
world market for sulfur.
RISKS OF GOVERNMENT REGULATION OF MINING
Homestake's mining operations are subject to extensive
regulation governing development, production, labor standards,
occupational health, waste disposal, use of toxic substances,
environmental regulations, mine safety and other matters. Some
jurisdictions also require or may in the future require the
payment of royalties. Changes in regulations can have material
impacts on anticipated levels of production, costs and
profitability. It is possible that exploration, development or
operation of a mine may be delayed or terminated as a result of
the inability to obtain all required permits and government
approvals on an economic basis, or the imposition of royalty
payments or other government regulations.
The United States Mining Law of 1872 (the "Mining Law") has
been the subject of substantial debate and proposals for change
for several years. While changes in the Mining Law may occur,
Homestake cannot predict when or if changes will occur, or the
extent to which any new legislation will exempt or otherwise
"grandfather" existing mining operations, unpatented mining
claims on which commercial discoveries have been made or
unpatented mining claims for which the patenting process is
partially complete. Under current law, persons staking
unpatented mining claims on United States federal government
property open to exploration (unpatented mining claims), upon the
making and documenting of a discovery of most minerals (including
gold and silver) in commercial quantities, are entitled to mine
the property without payment of royalties and to secure title to
the property (patented mining claims) at nominal cost. Under
proposals made in recent years to amend the Mining Law, the
United States government would be entitled to receive royalties
based on either the gross or net value of production from
government-owned property. This would have only minimal impact
on Homestake's current operations, as substantially all of
Homestake's current operations in the United States, other than
its operations at Ruby Hill, are conducted on privately held
land. It is possible that Homestake may be required to pay
royalties on production from the Ruby Hill operation, which would
increase the production cost over current estimates, but the
amount of the increase, if any, is not predictable. Expansion at
Homestake's Round Mountain mine also may occur on government-
owned property, as to which royalties similarly might be payable.
Should the Mining Law be so amended, it could reduce the amount
of future exploration and development activity conducted by
Homestake on federal government-owned property in the United
States.
RISKS OF CURRENCY FLUCTUATIONS
Gold and silver are sold throughout the world principally
based on the US dollar price, but operating expenses of gold and
silver mining companies generally are incurred in local
currencies. Homestake's operations principally are based in the
United States, Canada and Australia. Homestake engages in
currency hedging in Canadian and Australian dollars to protect
against significant currency fluctuations relative to the US
dollar.
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RISKS OF NATIVE TITLE CLAIMS
Australia
The decision of the High Court of Australia in 1992 in Mabo
and Others v Queensland (No. 2) recognized traditional native
title rights to land. That decision and the Racial
Discrimination Act raised the possibility that mining and
exploration tenements granted by the Crown after October 31,
1975, over areas where there were existing native title rights
might be invalid to the extent of any inconsistency with those
native title rights. State governments and industry demanded,
and were soon given, validation of all existing interests. This
was achieved by virtue of the Native Title Act 1993 (Cth) and
complementary State and Territory legislation. Since then the
concept of native title and its consequences has been further
clarified by the courts. In 1996, the High Court held in The Wik
Peoples v Queensland that the grant of pastoral leases will not
necessarily extinguish native title rights. (Many mining leases
have been granted over areas of pastoral leasehold.) More
recently, in March 2000, the Full Court of the Supreme Court of
Western Australia held that Western Australian pastoral leases
(subject to certain qualifications) and mining leases and general
purpose leases granted under the Mining Act 1978 (WA) extinguish
mining title. This has huge ramifications for the mining
industry and in July 2000 the State Government issued guidelines
setting out the information relating to historical tenure that
applications have to provide in order to have mining tenements
granted without reference to the Native Title Act.
The Native Title Act also establishes a mechanism for
determination of claims to native title. The legislation
provides for a right to negotiate before the grant or renewal of
certain tenements (other than renewals of tenements as of right,
in accordance with the terms of their original grant) after
January 1, 1994. Negotiations must take place between the native
title holders or claimants, the grantee party and the government
party. A grantee party may pay compensation to the native title
holders and claimants for the future grant of a mining tenement.
If agreement cannot be reached after negotiations in good faith
for six months, court approval of the proposed tenement(s) can be
applied for. Such court approval may include conditions with
respect to compensation, but to-date, has not. The grant of a
mining tenement ordinarily has the effect of suspending native
title. Any compensation for the suspension is payable by the
government that granted the tenement.
In July 1998, the Native Title Amendment Act was passed by
both houses of the Australian Parliament. The legislation came
into operation on September 30, 1998, although in some respects
it operates retroactively. The Act makes significant changes in
the regime governing native title in Australia. Among other
things, the new law (i) transfers the determination of native
title claims to the Australian Federal Courts; (ii) requires that
native title claims be registered in compliance with specified
requirements in order to qualify for the right to negotiate;
(iii) permits registration of claims to be delegated to State
bodies; and (iv) permits States to validate all titles issued
between January 1, 1994 and December 23, 1996 on land which was
the subject of freehold or leasehold title. Homestake cannot
predict the extent to which the new law will impact its
operations, but it is generally expected that the new law will
facilitate and accelerate resolution of many native title issues
and eliminate some uncertainties.
There are a number of native title claims relating to the
area of Homestake's 50% owned Kalgoorlie operations, but the
validity of those claims has not been determined. In any event,
all of the mining leases with respect to active mining operations
at Kalgoorlie are pre-1994 leases and therefore native title
claims will not affect their validity. There also are native
title claims relating to areas in which Homestake's other
Australian mining operations are conducted, but the validity of
these claims also has not been determined. In any event, with
the one exception described below, all of the other production
mining leases are pre-1994 leases and their validity is not
affected by native title claims.
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One production mining lease was granted between January 1
and March 15, 1995, when Western Australia did not comply with
the requirement of negotiation in granting these titles.
Legislation has now been passed to validate titles granted in
Western Australia during this period.
Some of Homestake's exploration tenements in Australia are
subject to multiple native title claims. Should Homestake be
successful in its exploration activities in these areas and seek
to convert its interests to mining leases, it will be necessary
to comply with the right to negotiate provisions of the Native
Title Act. The requirements for negotiation and the possibility
of a requirement to pay compensation may result in delay and
increased costs for mining in the affected mining areas.
Canada
In the Delgamuukw decision in December 1997, the Supreme
Court of Canada (the "Supreme Court") affirmed that aboriginal
tribal groups continue to have aboriginal rights in lands in
British Columbia used or occupied by their ancestors in 1846.
Those rights may vary from rights of limited use up to aboriginal
title. The decision has created uncertainty regarding property
rights in Canada (including mineral and other resource rights),
particularly in British Columbia and other areas where treaties
were not concluded with aboriginal groups. The Supreme Court
stated these principles in broad terms, and did not apply them to
any particular lands. The decision also did not address how
aboriginal rights or title are to be reconciled with property and
tenure rights previously sold or granted by the government. The
Supreme Court did confirm that the extent of the aboriginal
rights (including whether the rights rise to the level of
aboriginal title) will depend on, among other things, the extent
of prior aboriginal use and occupation. The Supreme Court also
stated that, depending on the nature of the aboriginal rights,
consultation with and compensation to (and possibly consent of)
aboriginal groups may be required in connection with sales of
government-owned land or granting of mining, forestry and other
rights to use government-owned land. The Supreme Court indicated
that rights of compensation derive from the government's
fiduciary obligations to the aboriginal groups. The application
of the principles enunciated in the decision will not be possible
until subsequent decisions provide clarification, and the
application of these principles to any particular land will not
be possible until the exact nature of historical aboriginal use
and occupancy and the resulting rights in the particular property
have been determined.
The governments of Canada and British Columbia have
initiated a treaty negotiation process aimed at resolving
outstanding issues of aboriginal rights and title in British
Columbia, under the authority of the B.C. Treaty Commission. To
date, a number of aboriginal groups have commenced negotiations
under the B.C. Treaty Commission process. No treaties have yet
been concluded under this process. Some aboriginal groups have
withdrawn from negotiations and commenced litigation since
Delgamuukw. The position of the provincial and federal
governments is that it will not negotiate treaties with the
aboriginal groups that are litigating claims in the courts.
On August 4, 1998, the government of British Columbia and
the government of Canada initialed a treaty with the Nisga'a
Nation. The Nisga'a treaty was ratified by the Nisga'a Nation
and by legislation by both the federal and the provincial
governments, and came into effect on May 11, 2000. The Nisga'a
treaty includes provisions granting fee simple title to 2,000
square kilometers of Crown land to the Nisga'a (Nisga'a lands),
confirming non-exclusive aboriginal rights over an extended area,
granting payment of compensation, and establishing the Nisga'a
government. None of Homestake's operations or exploration
properties are located in the area subject to the Nisga'a treaty.
It is the stated policy of the British Columbia government
that lands held in fee simple by third parties will not be
subject to selection in treaty negotiations and that the
province will respect the terms of all existing legal interests
in Crown lands and resources including leases and licenses.
However, where there are legal interests in Crown lands which,
under a treaty, become settlement land, and where those
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legal interests have termination dates, subject to extensions or
renewals, the province may decline to grant further extensions or
renewals. The Nisga'a treaty contemplates that future rights and
interests within the Nisga'a lands will be subject to negotiation
with the Nisga'a government and to potential payment of fees,
royalties or other charges to the Nisga'a government.
Any confirmation by treaty of non-exclusive aboriginal
rights on Crown land will mean the continuation of certain
limitations and procedural requirements (such as consultation and
possibly consent) on the disposition of Crown land and resources.
There are aboriginal claims that extend to the area of
British Columbia in which the Eskay Creek mine is located. This
mining operation is conducted under government mining leases
which grant the exclusive right to mine. There has not been any
determination of the existence of any valid claim of aboriginal
rights or title in the area. Homestake does not expect any
interruption of its existing mining operations in British
Columbia, and Homestake does not believe that its other Canadian
operations will be materially adversely affected by aboriginal
claims. However, Homestake expects that future Canadian
activities, including exploration and development of new mines,
could be slowed and could be adversely affected, depending on
future legal developments in this area and the extent of
aboriginal rights in any particular property.
United States
There are no native title issues for Homestake's properties
in the United States.
CAUTIONARY STATEMENTS
This Prospectus contains certain information relating to
Homestake that is based on the beliefs of management, as well as
assumptions made by and information currently available to
management. Any statements made in this Prospectus that are not
historical in nature, including statements preceded by the words
"anticipate," "believe," "estimate," "expect," "intend," "will"
and similar expressions, as they relate to Homestake, are forward-
looking statements (as such term is defined in the United States
Private Securities Litigation Reform Act of 1995). Estimates of
reserves, future production and future cash costs per ounce of
gold-equivalent production are also forward-looking statements.
The purpose of these cautionary statements is to identify
certain important factors and assumptions on which forward-
looking statements may be based or which could cause actual
results to differ materially from those expressed in forward-
looking statements. The important factors and assumptions set
forth below should be read in conjunction with "Risk Factors"
above.
RESERVES
Gold and silver reserves reported by Homestake reflect
estimated quantities and grades of gold and silver in deposits
and in stockpiles of mined material that Homestake believes can
be mined, processed and sold at prices sufficient to recover the
estimated future cash costs of production, remaining investment,
and anticipated additional capital expenditures. Estimates of
costs of production are based on current and projected costs
taking into account past experience and expectations as to the
future. Estimated mining dilution is factored into reserve
calculations.
Reserves are reported as general indicators of the life of
mineral deposits. Reserves should not be interpreted as assurances
of mine lives or of the profitability of current or future
operations. Reserves are estimated for each property based upon
factors relevant to each deposit including drilling results, past
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experience with the property, experience of the persons making
the reserve estimates and many other factors. Reserve estimation
is an interpretive process based upon available data, and the
actual quality and other characteristics of ore deposits cannot
be known until mining has taken place.
Changes in reserves over time generally reflect (i) efforts
to develop additional reserves, (ii) depletion of existing
reserves through production, (iii) actual mining experience, (iv)
continued testing and development of additional information and
(v) price and cost forecasts. Grades of ore actually processed
may be different from the stated reserve grades because of
geologic variations in different areas mined, mining dilution,
losses in processing and other factors. Recovery rates vary with
the metallurgical and other characteristics and grade of ore
processed. Actual quality and other characteristics of ore
deposits, gold and silver prices, and costs of production will
vary from the assumptions used to develop reserve estimates.
Such differences may be material.
Gold and silver reserve calculations for properties operated
by Homestake are prepared by Homestake. Gold and silver reserve
calculations for properties not operated by Homestake are based
on information provided to Homestake by the operator. Homestake
periodically reviews such information but does not independently
confirm the information provided by these operators.
Homestake's sulfur reserves represent the quantity of sulfur
in the Main Pass 299 deposit for which geological, engineering
and marketing data give reasonable assurance of recovery and sale
under projected economic and operating conditions at prices
sufficient to cover the estimated future cash costs of
production, and estimated future capital expenditures.
Homestake's proven oil reserves at Main Pass 299 are the
estimated quantity of crude oil and condensate which geological
and engineering data give reasonable assurance of recovery and
sale under projected operating conditions at prices sufficient to
cover the estimated future cash costs of production, the
remaining investment, and estimated future capital expenditures.
The estimates are based on limited reservoir and engineering
data. The reserve estimates are based on information provided by
the operator. The operator principally relies on oil reserve
estimations performed by third-party petroleum engineers. In the
third quarter of 1997, Homestake wrote off its entire investment
in the sulfur mine in light of the continued depressed market for
sulfur.
ESTIMATES OF PRODUCTION
Estimates of future production and mine life for particular
properties are derived from annual mining plans that have been
developed based on, among other things, mining experience,
reserve estimates, assumptions regarding ground conditions and
physical characteristics of ores (such as hardness and presence
or absence of certain metallurgical characteristics), and
estimated rates and costs of production. Actual production may
vary from estimates for a variety of reasons, including risks and
hazards of the types discussed above, actual ore mined varying
from estimates of grade and metallurgical and other
characteristics, mining dilution, strikes and other actions by
labor at unionized locations, restrictions imposed by government
agencies and other factors. Estimates of production from
properties not yet in production or from operations that are to
be expanded are based on similar factors (including, in some
instances, feasibility reports prepared by company personnel
and/or outside consultants) but, as such estimates do not have
the benefit of actual experience, there is a greater likelihood
that actual results will vary from the estimates.
MINERALIZED MATERIAL
Mineralized material is gold-bearing material that has
been physically delineated by one or more of a number of
methods including drilling, underground work, surface trenching
and other types of sampling. This material has been found to
contain a sufficient amount of mineralization of an average
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grade of metal or metals to have economic potential that warrants
further exploration evaluation. While this material is not
currently or may never be classified as reserves, it is reported
as mineralized material only if the potential exists for
reclassification into the reserves category. This material has
established geologic continuity, but cannot be classified in the
reserves category until final technical, economic and legal
factors have been determined and the project containing the
material has been approved for development.
ESTIMATES OF OPERATING COSTS AND CAPITAL COSTS; CAPITAL PROJECTS
Estimates of cash costs for mining operations are developed
based on past experience, reserve and production estimates,
anticipated mining and ground conditions, metallurgical
recoveries, estimated costs of materials, supplies and utilities,
exchange rates and other items. Estimates of amortization of
noncash costs are based on total capital costs and reserve
estimates and may change at least annually based on actual
amounts of unamortized capital and changes in reserve estimates.
If the net book value of mining operations exceeds the fair
value, usually determined based on the estimated future
undiscounted cash flows from that mine, then an impairment loss
based on the discounted cash flows would be recognized as an
expense in the period in which such evaluation is made.
Estimates for reclamation and environmental remediation
costs are developed based on existing and expected legal
requirements, past reclamation experience, cost estimates
provided by company employees and third parties and other
factors. Estimates also reflect assumptions with respect to
actions of government agencies, including exercise of discretion
and the amount of time government agencies may take in completing
processes required under applicable laws and regulations. As a
result, final costs may vary significantly from estimates.
Homestake periodically reevaluates reclamation cost estimates and
reclamation reserves to take account of such factors.
Estimates of future capital costs are based on a variety of
factors and may 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 (which may be prepared by
company personnel and/or outside consultants) and other factors.
Capital cost estimates for new projects under development
generally are subject to greater uncertainties than additional
capital costs for existing operations.
Estimated periods for completion of capital projects are
based on many factors, including 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 also reflect assumptions
with respect to factors beyond the control of Homestake,
including, but not limited to, the time government agencies may
take in processing applications, issuing permits and otherwise
completing processes required under applicable laws and
regulations. Actual time to completion may vary significantly
from estimates.
Estimates of exploration costs are based upon many factors
such as past exploration costs, estimates of the level and cost
of future activities, and assumptions regarding anticipated
results on each property. Actual costs may vary during the year
as a result of such factors as actual exploration results (which
could result in increasing or decreasing expenditures for
particular properties), changed conditions, and acquisitions and
dispositions of property.
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TAXES
Homestake's operations are conducted in a number of
jurisdictions, with differing rates of taxation, but
substantially all of Homestake's revenues come from the United
States, Canada and Australia.
The Canadian statutory tax rate, including federal and
provincial income tax and mining tax is approximately 49%. The
applicable United States tax rate is 21% (20% alternative minimum
tax plus 1% state tax). The Australian statutory rate was 36% in
1999. In December 1999, the Australian government enacted
certain significant changes to the structure of taxation in
Australia. These changes included a reduction of the statutory
rate to 34% for the fiscal year beginning July 1, 2000 and a
further reduction to 30% for years thereafter. Further changes to
the structure of taxation in Australia, the impacts of which
currently are unknown, are expected to be enacted during 2000.
Homestake's reported tax rate varies from the statutory rate
because of certain differences between the tax laws and the
accounting treatment of income and expenditures. For example, as
a result of the acquisition of the minority interests in Prime,
there was an increase in the basis of mining assets for financial
reporting purposes that is not deductible for Canadian tax
purposes. The problem is partially mitigated by the FASB 109
deferred tax purchase accounting adjustments established at the
time of purchase. In addition, some of Homestake's foreign
exploration costs are expensed for accounting purposes but are
not yet deductible for tax purposes. Therefore, the tax benefit
related to those expenditures cannot be recognized until there is
sufficient taxable income generated in the jurisdictions where
such expenditures are incurred. Certain Canadian accounting
expenses cannot be deducted in calculating the mining tax.
Homestake also has limited ability to utilize foreign tax credits
in calculating its United States income tax.
Homestake's overall effective tax rate is dramatically
impacted by the geographic mix of its pretax income and losses.
A greater proportion of income in a high tax jurisdiction, like
Canada, can cause the consolidated effective tax rate to rise.
Homestake's overall effective tax rate also can fluctuate
significantly during a period of low gold prices, because the tax
rate is affected by the ratio of tax expense to pretax income.
Low pretax income or pretax losses can produce unusually high or
unusually low effective tax rates (including the possibility of
negative rates). This can occur if mining and income tax
expenses continue to accrue on profitable mines in high tax
jurisdictions while losses are incurred in low tax jurisdictions.
The tax expense in the high tax jurisdiction is not fully offset
by the tax benefit from losses generated in the low tax
jurisdictions. As a result, as the income and tax expenses from
all jurisdictions are blended into a consolidated total, the
overall effective rate is disproportionately impacted.
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USE OF PROCEEDS
All of the shares of our common stock offered by this
prospectus are being sold by Case Pomeroy. Homestake will not
receive any proceeds from the sale of these shares.
SELLING STOCKHOLDER INFORMATION
The shares offered by this prospectus may be offered from
time to time by Case Pomeroy. This prospectus also covers any
additional shares of common stock that become issuable in
connection with the shares being registered by reason of any
stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which
results in an increase in the number of our outstanding shares of
common stock.
When we acquired all of the outstanding capital stock of
Bargold from Case Pomeroy on July 14, 2000, we issued 2,600,000
shares of common stock to Case Pomeroy. In connection with the
acquisition, we undertook to file a registration statement
covering the resale of the shares issued in such acquisition
through the filing of this Form S-3.
As of August 4, 2000, Case Pomeroy holds the following
shares of Homestake Common Stock:
NUMBER OF
SHARES NUMBER OF
BENEFICIALLY BENEFICIALLY SHARES
NAME AND ADDRESS OWNED PERCENT NUMBER OF OWNED PERCENT
OF BENEFICIAL (PRE- OF SHARES (POST- OF
OWNER OFFERING) CLASS OFFERED OFFERING) CLASS
Case, Pomeroy & 9,011,776(1) 3.55% 2,600,000 6,411,776(2) 2.53%
Company, Inc.
529 5th Avenue,
Suite 1600
New York, N.Y.
10017
(1) Case, Pomeroy & Company, Inc. has the sole power to vote
and to dispose of its shares.
(2) Assumes all offered shares are sold.
Mr. Robert H. Clark, Jr. has been a director of Homestake
since 1984. Mr. Clark has been Chairman since 1999, Chief
Executive Officer since 1993, President since 1983, and a
director since 1968 of Case Pomeroy. Mr. Clark and his family
are controlling shareholders of Case Pomeroy. Mr. Clark and his
spouse beneficially own a total of 39,014 shares of Homestake
common stock as of July 14, 2000.
In 1985, Case Pomeroy transferred to Homestake all of Case
Pomeroy's interest in certain unpatented mining claims and other
mineral properties in the United States and Canada previously
jointly owned by Case Pomeroy and Homestake Sulphur. Case Pomeroy
kept a 2.5% net smelter return royalty interest in the
properties, subject to certain limitations. In addition, Case
Pomeroy has the option to convert any part of the royalty into a
40% participating interest in the property following a
determination that development of a property for commercial
production is feasible. No royalties have been paid. We have no
obligation to explore, develop or mine or spend any money on any
of the property and we can abandon any of the property at any
time after we first offer it to Case Pomeroy.
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PLAN OF DISTRIBUTION
We are registering all 2,600,000 shares on behalf of Case
Pomeroy. All of the shares were issued to Case Pomeroy in
connection with our acquisition of Bargold. We will not receive
proceeds from this offering. Case Pomeroy may sell the shares
from time to time, subject to certain restrictions. Case Pomeroy
will act independently of us in making decisions with respect to
the timing, manner and size of each sale.
The sales may be made on the NYSE or otherwise, at prices
and at terms then prevailing or at prices related to the then
current market price, or in negotiated transactions. Case
Pomeroy may effect such transactions by selling the shares to or
through broker-dealers. The shares may be sold by one or more
of, or a combination of, the following:
* a block trade in which the broker-dealer so engaged will
attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate
the transaction,
* purchases by a broker-dealer as principal and resale by
such broker-dealer for its account pursuant to this
prospectus,
* an exchange distribution in accordance with the rules of
such exchange,
* ordinary brokerage transactions and transactions in which
the broker solicits purchasers, and
* in privately negotiated transactions.
To the extent required, this prospectus may be amended or
supplemented from time to time to describe a specific plan of
distribution. In effecting sales, broker-dealers engaged by Case
Pomeroy may arrange for other broker-dealers to participate in
the resales.
Case Pomeroy may enter into hedging transactions with broker-
dealers in connection with distributions of the shares or
otherwise. In such transactions, broker-dealers may engage in
short sales of the shares in the course of hedging the positions
they assume with Case Pomeroy.
Case Pomeroy also may sell shares short and redeliver the
shares to close out such short positions. Case Pomeroy may enter
into option or other transactions with broker-dealers which
require the delivery to the broker-dealer of the shares. The
broker-dealer may then resell or otherwise transfer such shares
pursuant to this prospectus. Case Pomeroy also may loan or
pledge the shares to a broker-dealer. The broker-dealer may sell
the shares so loaned, or upon a default the broker-dealer may
sell the pledged shares pursuant to this prospectus.
Broker-dealers or agents may receive compensation in the
form of commissions, discounts or concessions from Case
Pomeroy. Broker-dealers or agents may also receive compensation
from the purchasers of the shares for whom they act as agents or
to whom they sell as principals, or both. Compensation as to a
particular broker-dealer might be in excess of customary
commissions and will be in amounts to be negotiated in
connection with the sale. Broker-dealers or agents and any
other participating broker-dealers or Case Pomeroy may be deemed
to be "underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933 in connection with sales of the shares.
Accordingly, any such commission, discount or concession
received by them and any profit on the resale of the shares
purchased by them may be deemed to be underwriting discounts
or commissions under the Securities Act.
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Because Case Pomeroy may be deemed to be an "underwriter" within
the meaning of Section 2(11) of the Securities Act, Case Pomeroy
will be subject to the prospectus delivery requirements of the
Securities Act. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144
promulgated under the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus. Case Pomeroy has
advised us that it has not entered into any agreements,
understandings or arrangements with any underwriters or broker-
dealers regarding the sale of their securities. There is no
underwriter or coordinating broker acting in connection with
the proposed sale of shares by Case Pomeroy.
The shares will be sold only through registered or licensed
brokers or dealers if required under applicable state securities
laws. In addition, in certain states the shares may not be sold
unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Case Pomeroy will be subject to applicable provisions of the
Securities Exchange Act of 1934 and the rules and regulations
thereunder, which provisions may limit the timing of purchases
and sales of any of the common stock by Case Pomeroy. The
foregoing may affect the marketability of such securities.
We will make copies of this prospectus available to Case
Pomeroy and have informed Case Pomeroy of the need for delivery
of copies of this prospectus to purchasers at or prior to the
time of any sale of the shares.
We will file a supplement to this prospectus, if required,
pursuant to Rule 424(b) under the Securities Act upon being
notified by any selling stockholder that any material arrangement
has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer. Such
supplement will disclose:
* the name of the selling stockholders and of the
participating broker-dealer(s),
* the number of shares involved,
* the price at which such shares were sold,
* the commissions paid or discounts or concessions allowed
to such broker-dealer(s), where applicable,
* that such broker-dealer(s) did not conduct any
investigation to verify the information set out or
incorporated by reference in this prospectus, and
* other facts material to the transaction.
We will bear all costs, expenses and fees in connection with
the registration of the shares. Case Pomeroy will bear all
commissions and discounts, if any, attributable to the sales of
the shares.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission
a Registration Statement on Form S-3 under the Securities Act,
relating to the common stock being offered. This prospectus is
filed as part of the registration statement. Other parts of the
registration statement are omitted from this prospectus.
Statements made in this prospectus concerning the contents of
any contract or other document are not
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necessarily complete. For a more complete description of the
matter involved, you should read the entire contract or other
document, which has been filed as an exhibit to the
registration statement.
We file annual, quarterly and special reports, proxy
statements and other information with the SEC. Homestake's SEC
filings are available to the public over the Internet at the
SEC's web site at http://www.sec.gov. You may also read and copy
any document Homestake files at the SEC's public reference rooms
in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information on
the public reference rooms.
For a fee, the SEC will send copies of any of our filings to
you.
Our common stock is listed on the NYSE under the symbol
"HM", and our SEC filings can also be read at the following
address:
New York Stock Exchange
20 Broad Street
New York, NY 10048
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference the
information we file with it, which means we can disclose
important information to you by referring you to those documents.
The information incorporated by reference is an important part of
this prospectus. Information that we file later with the SEC
will automatically update and supersede this information. We
incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act until all of the securities
registered in this offering are sold:
1. Our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2000, filed May 12, 2000 (File #001-08736).
2. Our Annual Report on Form 10-K for the year ended
December 31, 1999, filed March 27, 2000 (File #001-
08736).
3. Our definitive Proxy Statement filed March 21, 2000
(File #000-08736).
4. Current Report on Form 8-K dated January 18, 2000,
filed January 18, 2000; and
5. The description of the Homestake Common Stock and
Homestake Rights contained in Homestake's Registration
Statement on Form S-3 (No. 333-66311) filed on November
23, 1998, subsequent descriptions of amendments to the
Homestake Rights Agreement, filed on Form 8-A/A filed
on December 4, 1998 and April 8, 1999, and any
amendment or report filed for the purpose of updating
such descriptions.
You may request a copy of these filings, at no cost, by
writing us at the following address:
Homestake Mining Company
1600 Rivera Avenue, Suite 200
Walnut Creek, CA 94596-3568
Attn: Corporate Secretary
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or by calling Investor Relations at (925) 817-1369.
You should rely on the information incorporated by reference
or provided in this Prospectus. We have not authorized anyone
else to provide you will different information. We are not
making an offer of these securities in any jurisdiction where the
offer is not permitted.
You should not assume that the information in this
Prospectus or any Prospectus supplement is accurate as of any
date other than the date on the front of those documents.
LEGAL MATTERS
The validity of the common stock will be passed upon for us
by Thelen Reid & Priest LLP, San Francisco, California.
EXPERTS
The financial statements incorporated in this Registration
Statement by reference to Homestake's Annual Report on Form 10-K
for the year ended as of December 31, 1999 have been so
incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on authority of said firm as
experts in auditing and accounting.
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