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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
(Date of Report)
AUGUST 22, 1997
COMMISSION FILE NUMBER 0-12207
PEGASUS GOLD INC.
(Exact name of registrant as specified in its charter)
PROVINCE OF BRITISH COLUMBIA NONE
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
601 W. FIRST AVE., SUITE 1500, SPOKANE, WASHINGTON 99201-3282
(Address of principal executive offices) (Zip Code)
(509) 624-4653
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On August 22, 1997, Pegasus Gold Inc. ("Pegasus") issued a news release
announcing a reduction of its total workforce by approximately 90 employees
Company-wide in response to the continued weakness in the gold price and the
need to lower overall costs. The Company will take a charge of about $1.7
million in the current quarter in order to cover the cost of severance benefits.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION, AND EXHIBITS.
(a) Financial statements - not applicable.
(b) Pro forma financial information - not applicable.
(c) Exhibits:
(99.1) News Release issued by the Company dated August 22, 1997.
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FORM 8-K
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PEGASUS GOLD INC. (Registrant)
Date: August 28, 1997 By: /s/ Phillips S. Baker, Jr.
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Phillips S. Baker, Jr.
Vice President, Finance and Chief
Financial Officer
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NEWS RELEASE
PEGASUS GOLD ANNOUNCES WORKFORCE REDUCTION
SPOKANE, WASH. -AUGUST 22, 1997 - Pegasus Gold Inc. (PGU: AMEX; TSE; ME)
announced today that it is reducing its total workforce by approximately 90
employees, or almost 9 percent Company-wide in response to the continued
weakness in the gold price and the need to lower the Company's overall costs.
The workforce reduction consists of a nearly 35 percent reduction at the
corporate headquarters and a 7 percent reduction at the mine sites.
These actions as well as other overhead reductions such as reducing outside
services, selling the Company plane, reducing travel and closure of regional
offices, will save the Company over $4 million in the first full year after
implementation. The Company will take a charge of about $1.7 million in the
current quarter in order to cover the cost of severance benefits.
"This reduction is part of our continuing and successful effort of overall
cost-management during the past year," said Werner G. Nennecker, President and
Chief Executive Officer. As a result of recent cost savings programs, general
and administrative expenses decreased 25 percent in the first half of 1997.
"We have built a strong team at Pegasus. As necessary as these actions are, the
decision to lay-off employees is very difficult and saddens me. These steps
must be taken to protect our Company's future. By acting now, rather than
waiting any longer for the gold price to recover, we will be better positioned
to achieve our long-term goals. I am confident that those people who remain
form an excellent team which, coupled with our strong gold price hedging program
and focus on cost reductions, positions the Company for future growth and
profitability. We will provide for individuals directly affected with severance
and outplacement programs," added Mr. Nennecker.
Statements in this report which are not historical data are forward looking and
involve a number of risks and uncertainties, including but not limited to the
price of gold and other commodities and currencies, production, construction and
permitting or regulatory delays, reserve estimation of tonnage, grade and
metallurgical recoveries, exploration success and reserve growth, litigation,
capital costs, and other risks that are detailed in the Company's SEC filings.
Pegasus Gold Inc. is an international gold mining company, headquartered in
Spokane, Washington. Pegasus currently produces more than 500,000 ounces of
gold annually from its properties in the United States and Australia. The
Company carries out exploration internationally through offices located in
Mendoza, Argentina; Kalgoorlie, Australia; Itaituba, Brazil; Santiago, Chile;
and Panama City, Panama. The common shares of Pegasus are traded under the
symbol PGU on the American, Toronto and Montreal stock exchanges. Options on
the Company's common shares are traded on the Chicago Board Options Exchange and
the Montreal Exchange.
FOR FURTHER INFORMATION, CONTACT:
John W. Pearson
Director of Investor Relations
509-624-4653
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