<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
COMMISSION FILE NUMBER 0-12207
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
(Full title of the Plan)
PEGASUS GOLD INC.
(Name of issuer of the securities held pursuant to the Plan)
601 WEST FIRST AVENUE, SUITE 1500
SPOKANE, WASHINGTON 99204
(Address of principal executive office)
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
FORM 11-K - DECEMBER 31, 1996
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Report of Independent Accountants
Statements of Net Assets Available for Benefits
at December 31, 1996, and 1995
Statements of Changes in Net Assets Available for
Benefits for the year ended December 31, 1996
Notes to Financial Statements
Schedules I, II, and III are omitted, since all required information is included
in Notes 6, 8, and 9 to the Financial Statements included herein.
(b) Exhibits:
Consent of Independent Public Accountants for incorporation by reference of
their opinion in Form S-8.
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
-----------------
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
-----------------
CONTENTS
PAGES
Report of Independent Accountants. . . . . . . . . . . . . . . . 2
Financial Statements:
Statements of Net Assets Available for Benefits
as of December 31, 1996 and 1995. . . . . . . . . . . . . 3
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1996 . . . . . . . . . . 4
Notes to Financial Statements. . . . . . . . . . . . . . . . 5-15
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1996. . . . . . . . . . . . . 16
Item 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1996. . . . . . . . . . . 17
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Administrative Committee and Participants
Pegasus Gold Employee Savings Plan
Spokane, Washington
We have audited the accompanying statements of net assets
available for benefits of the Pegasus Gold Employee Savings Plan
(the Plan) as of December 31, 1996 and 1995, and the related
statement of changes in net assets available for benefits for
the year ended December 31, 1996. These financial statements
are the responsibility of the Plan's Administrative Committee.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by the Administrative Committee, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of the Plan as of December 31, 1996 and
1995, and the changes in net assets available for benefits for
the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedules of assets held for investment purposes
and reportable transactions are presented for the purpose of
additional analysis and are not a required part of the basic
financial statements but are supplementary information required
by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act
of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated, in all
material respects, in relation to the basic financial statements
taken as a whole.
/s/ Coopers & Lybrand LLP
---------------------
San Francisco, California
April 11, 1997
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
---------------
<TABLE>
<CAPTION>
ASSETS 1996 1995
<S> <C> <C>
Interest bearing cash and money market deposits $ 500,476 $ 380,480
------------- -------------
Investments, at fair value:
Certificates of deposit - 63,325
U.S. Government securities 771,430 1,205,735
Collective trust 4,741,323 3,952,455
Registered investment companies 15,143,909 11,155,404
Common stock of the Employer's parent company 732,211 1,118,752
Participant notes receivable 1,557,041 1,351,417
------------- -------------
Total investments 22,945,914 18,847,088
------------- -------------
Contributions receivable:
Employer 109,199 70,183
Participants 264,222 263,306
------------- -------------
Total contributions receivable 373,421 333,489
------------- -------------
Total assets 23,819,811 19,561,057
------------- -------------
LIABILITIES
Accrued liabilities 1,307 2,638
------------- -------------
Total liabilities 1,307 2,638
------------- -------------
Net assets available for benefits $ 23,818,504 $ 19,558,419
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------
<TABLE>
<S> <C>
Additions to net assets attributed to:
Interest and dividend income $ 1,849,585
Net appreciation in fair value of investment funds 618,171
Net depreciation in fair value of investment in common stock of the Employer's parent
company
(549,224)
-------------
1,918,532
-------------
Contributions:
Employer 955,615
Participants 2,647,770
-------------
Total contributions 3,603,385
Transfers in from other plans 229,841
-------------
Total additions 5,751,758
-------------
Deductions from net assets attributed to:
Benefits paid to participants 1,491,673
-------------
Net increase 4,260,085
Net assets available for benefits:
Beginning of year 19,558,419
-------------
End of year $ 23,818,504
-------------
-------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
---------------
1. DESCRIPTION OF PLAN:
The following description of the Pegasus Gold Employee Savings
Plan (the Plan) provides only general information. Participants
should refer to the Plan agreement for a more complete
description of the Plan's provisions.
GENERAL:
The Plan is a defined contribution profit sharing and salary reduction plan
(under Internal Revenue Code Section 401(k)) covering all full-time
employees of Pegasus Gold Corporation, its subsidiaries and affiliated
companies (Employer) who have completed one-half year of service. The Plan
is subject to the provisions of the Employee Retirement Income Security Act
of 1974, as amended (ERISA).
The Plan is administered by the Employer, through a committee of four
executive officers of the Employer who are trustees for the Plan
(Administrative Committee). Merrill Lynch, Pierce, Fenner & Smith Inc.
(Merrill Lynch) is the Plan's investment advisor and custodian of the
Plan's investments.
CONTRIBUTIONS:
Participation is voluntary. Participating employees may make contributions
of up to 12% of their annual gross compensation. During 1996, a
participating employee's annual before-tax contribution was limited to
$9,500. The Employer contributes an amount equal to 50% of the employee's
before-tax contribution, up to a maximum of 3% of the employee's annual
gross compensation. Participants may also contribute to the Plan amounts
previously contributed to another qualified plan.
The Employer may contribute additional amounts at its discretion; however,
the annual total of the Employer's contribution and 50% of the employee's
contribution cannot exceed the lesser of $30,000 or 25% of each employee's
annual gross compensation. Forfeitures serve to reduce the Employer's
contributions.
Effective January 1, 1997, the Plan was amended to allow employees to
contribute up to 15% of their annual gross compensation and to increase the
employer's contribution to an amount equal to 75% of the employee's
before-tax contribution, up to a maximum of 4.5% of the employee's annual
gross compensation.
Each participating employee may designate the percentage of their total
contribution, including the Employer's matching portion, to be invested in
the common stock of Pegasus Gold Inc., the Canadian parent company of
Pegasus Gold Corporation, or in any of five other investment fund options.
Participants may designate between the six investment options in increments
of 5%.
Continued
5
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
---------------
1. DESCRIPTION OF PLAN, continued:
PARTICIPANT ACCOUNTS:
Separate accounts are maintained for each participant. Each participant's
account is directly credited with the participant's contribution and the
Employer's matching contribution. Unless otherwise specified,
discretionary additional Employer contributions are allocated to each
participant's account based on the ratio which that participant's
compensation bears to the total compensation of all participants. Net
earnings from investments, other than in common stock of the Employer's
parent company, including appreciation (depreciation) in fair value, are
allocated to each participant's account based on the ratio which the trust
fund portion of that participant's account balance bears to the total of
the trust fund portion of all participants' account balances. Net earnings
from investment in common stock of the Employer's parent company, including
appreciation (depreciation) in fair value, are allocated to each
participant's account based on the actual number of shares of such common
stock included therein.
Participants have the option of periodically converting the common stock
portion of their account into one of the other investment fund options, or
vice versa, at the current fair value of the stock.
VESTING:
The Plan offers full and immediate vesting of the employee contribution
portion of each participant's account. Participants joining the Plan vest
progressively in the Employer contribution portion of their account at the
rate of 25% per ensuing year of service.
PAYMENT OF BENEFITS:
A participant's account balance may be withdrawn under any of the following
circumstances:
- Attainment of age 59 1/2.
- Retirement (allowed at the age of 55 if five years of service have
been rendered, otherwise at the normal retirement age of 65).
- Death (vested account balance is paid to a designated beneficiary).
- Termination of employment.
- Permanent and total disability.
Distribution of benefits will generally be in the form of a lump-sum cash
payment. Participants may elect to receive the Pegasus Gold Inc. common
stock portion of their account in either actual shares of stock or a cash
payment equal to the current fair value of the stock. Participants or
their beneficiaries may elect to maintain their accounts with the Plan even
though such amounts may otherwise be withdrawn.
Continued
6
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
---------------
1. DESCRIPTION OF PLAN, continued:
PARTICIPANT NOTES RECEIVABLE:
At the discretion of the Administrative Committee, participants who have
been part of the Plan for at least one year may borrow from their account
up to the lesser of 50% of their vested account balance or $50,000. Loan
transactions are treated as a transfer to (from) the investment fund from
(to) the Participant Notes account. Interest on the loans is variable,
based on the prime rate (8.25% at December 31, 1996) plus 2%. The loans
have a repayment term of up to five years and are collateralized by the
balance in the participant's account. Principal and interest are paid
ratably through periodic payroll deductions.
2. SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING:
The financial statements of the Plan are prepared under the accrual basis
of accounting in accordance with generally accepted accounting principles.
ACCOUNTING ESTIMATES AND ASSUMPTIONS:
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires the Plan administrator to
make estimates and assumptions that affect the reported amounts of net
assets available for benefits at the date of the financial statements and
the changes in net assets available for benefits during the reporting
period. Actual results could differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION:
The Plan's investments are stated at fair value. Shares and units in
investment funds are valued at quoted market prices which represent the net
asset value of the shares or units held by the Plan at year-end. The
investment in Pegasus Gold Inc. common stock is valued at its quoted market
price. Participant notes receivable are valued at cost which approximates
fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
The Plan presents in the statement of changes in net assets available for
benefits, the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Continued
7
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
---------------
2. SIGNIFICANT ACCOUNTING POLICIES, continued:
RISKS AND UNCERTAINTIES:
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other investment
securities. Investment securities are exposed to various risks, such as
interest rate, market, and credit risks. Due to the level of risk
associated with certain investment securities, it is at least reasonably
possible that changes in the values of investment securities will occur in
the near term and that such changes could materially affect participants'
account balances and the amounts reported in the statement of net assets
available for benefits.
PAYMENT OF BENEFITS:
Amounts allocated to accounts of participants who have elected to withdraw
from the Plan but have not been paid as of year-end are included in net
assets available for benefits.
RECLASSIFICATIONS:
Certain reclassifications have been made to the 1995 financial statements
to conform to the 1996 presentation with no effect on net assets available
for benefits as previously reported.
3. RELATED PARTY TRANSACTIONS:
Certain Plan investments are units in investment funds managed by Merrill
Lynch. Merrill Lynch is the Plan's investment advisor and custodian and,
therefore, these transactions qualify as party-in-interest transactions.
Plan investments also include shares in Pegasus Gold, Inc., the parent
company of the Employer, which also qualify as party-in-interest
transactions.
4. PLAN TERMINATION:
Although the Employer has not expressed any intent to do so, it has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to ERISA provisions. In the event of Plan
termination, all accumulated plan benefits will be fully vested and will be
distributed to participants based on their respective account balances.
5. TAX STATUS:
The Internal Revenue Service has determined and informed the Employer by a
letter dated February 5, 1993, that the Plan and related trust are designed
in accordance with Sections 401(a) and 401(k) of the Internal Revenue Code
(IRC) and is therefore considered to be tax exempt from federal income
taxes under Section 501(a). The Plan has been amended since receiving the
Continued
8
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
---------------
5. TAX STATUS, continued:
determination letter. However, the Plan administrator believes the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC.
6. INVESTMENTS:
Investments at December 31, 1996 and 1995, are comprised of the following:
<TABLE>
<CAPTION>
FAIR NUMBER
VALUE OF FAIR
PER UNIT UNITS VALUE
-------- --------- ------------
<S> <C> <C> <C>
1996:
Guaranteed Fund:
Zero Coupon U.S. Treasury Bonds:
COGR Series 1 $0.9200 34,746 $ 32,123
Coupon Treasury Shares 0.9900 114,949 114,295
Treasury Strips 0.9800 637,306 625,012
------------
771,430
Merrill Lynch Retirement Preservation Trust 1.0000 4,741,323 4,741,323
------------
5,512,753
------------
Balanced Fund:
Income Fund of America 16.5200 246,413 4,070,737
------------
Moderate Risk Growth Fund:
Oppenheimer Total Return Fund - Class A 9.7700 538,219 5,257,520
------------
International Growth Fund:
Templeton Developing Markets Trust 15.4000 34,691 534,245
Templeton Foreign Fund 10.3600 158,749 1,644,640
------------
2,178,885
------------
Aggressive Growth Fund:
Delaware Group Trend Fund 15.8400 229,594 3,636,767
------------
Pegasus Stock Fund:
Common stock held in Pegasus Gold Inc. 7.5600 96,830 732,211
------------
Participant notes receivable 1.0000 1,557,041 1,557,041
------------
$ 22,945,914
------------
------------
</TABLE>
Continued
9
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
---------------
6. INVESTMENTS, continued:
<TABLE>
<CAPTION>
FAIR NUMBER
VALUE OF FAIR
PER UNIT UNITS VALUE
-------- ---------- ------------
<S> <C> <C> <C>
1995:
Guaranteed Fund:
Certificates of deposit $1.0153 62,373 $ 63,325
Zero Coupon U.S. Treasury Bonds:
TIGR Series 19 0.9816 9,172 9,004
TIGR Series 23 0.9816 22,931 22,509
COGR Series 1 0.8822 34,855 30,751
COGR Series 1 0.9559 169,920 162,422
Coupon Treasury Shares 0.9553 402,627 384,623
Treasury Strips 0.9329 639,322 596,426
-----------
1,205,735
Merrill Lynch Retirement Preservation Trust 1.0000 3,952,455 3,952,455
-----------
5,221,515
-----------
Balanced Fund:
Income Fund of America 15.8700 213,679 3,391,085
-----------
Moderate Risk Growth Fund:
Oppenheimer Total Return Fund - Class A 9.3500 417,556 3,904,149
-----------
International Growth Fund:
Templeton Developing Markets Trust 13.0097 29,025 377,612
Templeton Foreign Fund 9.1798 123,989 1,138,199
-----------
1,515,811
-----------
Aggressive Growth Fund:
Delaware Group Trend Fund 15.7899 148,472 2,344,359
-----------
Pegasus Stock Fund:
Common stock held in Pegasus Gold Inc. 13.8748 80,632 1,118,752
-----------
Participant notes receivable 1.0000 1,351,417 1,351,417
-----------
$18,847,088
-----------
-----------
</TABLE>
Continued
10
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
---------------
6. INVESTMENTS, continued:
All earnings on the investment funds are credited to each fund monthly.
These earnings include interest, dividends, and net appreciation
(depreciation) in fair value. The Guaranteed Fund is a low-risk fund
consisting primarily of high-quality fixed income investment vehicles. The
Balanced Fund seeks reasonable income, and capital conservation and growth
while maintaining a moderate level of risk by investing in equity, debt,
and money market instruments. The objective of the Moderate Risk Growth
Fund is total return through investment in common stocks and their
equivalents. The International Growth Fund seeks long-term capital growth
through investment in international company securities, primarily common
stocks. The Aggressive Growth Fund seeks capital appreciation through
investment in common stocks with a low market capitalization which may
include over the counter issues and stock of higher risk companies.
7. ADMINISTRATIVE EXPENSES:
All costs associated with administering the Plan, totaling $84,334 and
$63,429 in 1996 and 1995, respectively, are paid directly by Pegasus Gold
Corporation.
Continued
11
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
---------------
8. NET ASSETS AVAILABLE FOR BENEFITS BY INVESTMENT TYPE:
At December 31, 1996 and 1995, net assets available for benefits were held
in the following participant-designated investment types:
<TABLE>
<CAPTION>
MODERATE INTER-
RISK NATIONAL
GUARANTEED BALANCED GROWTH GROWTH
FUND FUND FUND FUND
----------- ----------- ----------- -----------
DECEMBER 31, 1996:
<S> <C> <C> <C> <C>
ASSETS
Interest bearing cash and money market deposits - $ 273,767 $ 197,696 $ 28,798
----------- ----------- ----------- -----------
Investments, at fair value:
U.S. Governent securities $ 771,430 - - -
Collective trust 4,741,323 - - -
Registered investment companies - 4,070,737 5,257,520 2,178,885
Common stock of the Employer's parent company - - - -
Participant notes receivable - - - -
----------- ----------- ----------- -----------
Total investments 5,512,753 4,070,737 5,257,520 2,178,885
----------- ----------- ----------- -----------
Contributions receivable:
Employer 49,650 7,717 11,626 13,341
Participants 66,732 35,765 56,292 24,662
----------- ----------- ----------- -----------
Total contributions receivable 116,382 43,482 67,918 38,003
----------- ----------- ----------- -----------
Total assets 5,629,135 4,387,986 5,523,134 2,245,686
----------- ----------- ----------- -----------
LIABILITIES
Accrued liabilities 703 171 217 86
----------- ----------- ----------- -----------
Total liabilities 703 171 217 86
----------- ----------- ----------- -----------
Net assets available for benefits $ 5,628,432 $ 4,387,815 $ 5,522,917 $ 2,245,600
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
8. Net Assets Available for Benefits by Investment Type,
continued:
<CAPTION>
Aggressive Pegasus
Growth Stock Participant
Fund Fund Notes Total
----------- ----------- ----------- -----------
December 31, 1996:
<S> <C> <C> <C> <C>
ASSETS
Interest bearing cash and money market deposits $ 200 $ 15 - $ 500,476
----------- ----------- ----------- -----------
Investments, at fair value:
U.S. Government securities - - - 771,430
Collective trust - - - 4,741,323
Registered investment companies 3,636,767 - - 15,143,909
Common stock of the Employer's parent company - 732,211 - 732,211
Participant notes receivable - - $ 1,557,041 1,557,041
----------- ----------- ----------- -----------
Total investments 3,636,767 732,211 1,577,041 22,945,914
----------- ----------- ----------- -----------
Contributions receivable:
Employer 26,153 712 - 109,199
Participants 64,299 16,472 - 264,222
----------- ----------- ----------- -----------
Total contributions receivable 90,452 17,184 - 373,421
----------- ----------- ----------- -----------
Total assets 3,727,419 749,410 1,577,041 23,819,811
----------- ----------- ----------- -----------
LIABILITIES
Accrued liabilities 130 - - 1,307
----------- ----------- ----------- -----------
Total liabilities 130 - - 1,307
----------- ----------- ----------- -----------
Net assets available for benefits $ 3,727,289 $ 749,410 $ 1,577,041 $ 23,818,504
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
Continued
12
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
---------------
8. NET ASSETS AVAILABLE FOR BENEFITS BY INVESTMENT TYPE, continued:
<TABLE>
<CAPTION>
MODERATE INTER-
RISK NATIONAL
GUARANTEED BALANCED GROWTH GROWTH
FUND FUND FUND FUND
---------- --------- ------------ -------------
DECEMBER 31, 1995:
ASSETS
<S> <C> <C> <C> <C>
Interest bearing cash and money market deposits - $ 87,673 $ 260,582 $ 31,593
--------- --------- ------------ -----------
Investments, at fair value:
Certificates of deposit $ 63,325 - - -
U.S. Government securities 1,205,735 - - -
Collective trust 3,952,455 - - -
Registered investment companies - 3,391,089 3,904,145 1,515,811
Common stock of the Employer's parent company - - - -
Participant notes receivable - - - -
--------- --------- ------------ -----------
Total investments 5,221,515 3,391,089 3,904,145 1,515,811
--------- --------- ------------ -----------
Contributions receivable:
Employer 18,037 7,653 8,757 13,036
Participants 98,391 33,820 46,750 18,242
--------- --------- ------------ -----------
Total contributions receivable 116,428 41,473 55,507 31,278
--------- --------- ------------ -----------
Total assets 5,337,943 3,520,235 4,220,234 1,578,682
--------- --------- ------------ -----------
LIABILITIES
Accrued liabilities 1,126 433 517 169
--------- --------- ------------ -----------
Total liabilities 1,126 433 517 169
--------- --------- ------------ -----------
Net assets available for benefits $ 5,336,817 $ 3,519,802 $ 4,219,717 $ 1,578,513
--------- --------- ------------ -----------
--------- --------- ------------ -----------
8. Net Assets Available for Benefits by Investment Type,
continued:
<CAPTION>
AGGRESSIVE PEGASUS
GROWTH STOCK PARTICIPANT
FUND FUND NOTES TOTal
----------- ----------- ----------- -----------
December 31, 1995:
<S> <C> <C> <C> <C>
ASSETS
Interest bearing cash and money market deposits $ 614 $ 18 - $ 380,480
----------- ----------- ----------- -----------
Investments, at fair value:
Certificates of deposit - - - 63,325
U.S. Government securities - - - 1,205,735
Collective trust - - - 3,952,455
Registered investment companies 2,344,359 - - 11,155,404
Common stock of the Employer's parent company - 1,118,752 - 1,118,752
Participant notes receivable - - $ 1,351,417 1,351,417
----------- ----------- ----------- ----------
Total investments 2,344,359 1,118,752 1,351,417 18,847,088
----------- ----------- ----------- ----------
Contributions receivable:
Employer 16,851 5,849 - 70,183
Participants 56,466 9,637 - 263,306
----------- ----------- ----------- ----------
Total contributions receivable 73,317 15,486 - 333,489
----------- ----------- ----------- ----------
Total assets 2,418,290 1,134,256 1,351,417 19,561,057
----------- ----------- ----------- ----------
LIABILITIES
Accrued liabilities 266 127 - 2,638
----------- ----------- ----------- ----------
Total liabilities 266 127 - 2,638
----------- ----------- ----------- ----------
Net assets available for benefits $ 2,418,024 $ 1,134,129 $ 1,351,417 $19,558,419
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
Continued
13
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
---------------
9. CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY INVESTMENT TYPE:
During the year ended December 31, 1996, the changes in net assets available for
benefits by participant-designated investment types were
as follows:
<TABLE>
<CAPTION>
MODERATE INTER-
RISK NATIONAL
GUARANTEED BALANCED GROWTH GROWTH
FUND FUND FUND FUND
--------- --------- --------- --------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Interest and dividend income $ 243,767 $ 414,463 $ 693,522 $ 85,929
Net appreciation (depreciation) in
fair value of investment funds 56,920 148,738 184,841 238,844
Net depreciation in fair value of
investment in stock of the
Employer's parent company - - - -
----------- ----------- ------------ -----------
300,687 563,201 878,363 324,773
----------- ----------- ----------- -----------
Contributions receivable:
Employer 242,743 141,189 205,444 112,376
Participants 642,426 384,740 559,690 330,153
----------- ----------- ----------- -----------
Total contributions 885,169 525,929 765,134 442,529
Transfers in from other plans 61,083 14,808 57,735 32,463
---------------------- ----------- -----------
Total additions 1,246,939 1,103,938 1,701,232 799,765
------------ --------- ----------- -----------
Deductions from net assets
attributed to:
Benefits paid to participants 489,249 240,124 292,973 164,327
------------ ---------- ----------- -----------
Net increase (decrease)
prior to
interfund transfers 757,690 863,814 1,408,259 635,438
Participant notes withdrawn (313,092) (99,373) (219,262) (81,994)
Loan repayments 231,595 117,118 162,052 69,364
Interfund transfers (384,578) (13,546) (47,849) 44,279
----------- ----------- ----------- -----------
Net increase (decrease) 291,615 868,013 1,303,200 667,087
Net assets available for benefits:
Beginning of year 5,336,817 3,519,802 4,219,717 1,578,513
----------- ----------- ----------- -----------
End of year $ 5,628,432 $ 4,387,815 $ 5,522,917 $ 2,245,600
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
<CAPTION>
AGGRESSIVE PEGASUS
GROWTH STOCK PARTICIPANT
FUND FUND NOTES TOTAL
--------- ------ ---------- -----------
<S> <C> <C> <C> <C>
Additions to net assets attributed to
Interest and dividend income $ 281,605 $ 194 $ 130,105 $ 1,849,585
Net appreciation (depreciation) in
fair value of investment funds (11,172) - - 618,171
Net depreciation in fair value of
investment in stock of the
Employer's parent company - (549,224) - (549,224)
---------- --------- ----------- ------------
270,433 (549,030) 130,105 1,918,532
---------- --------- ----------- ------------
Contributions receivable:
Employer 197,814 56,049 - 955,615
Participants 583,534 147,227 - 2,647,770
---------- --------- ----------- ------------
Total contributions 781,348 203,276 - 3,603,385
Transfers in from other plans 57,955 5,797 - 229,841
---------- --------- ----------- ------------
Total additions 1,109,736 (339,957) 130,105 5,751,758
---------- --------- ----------- ------------
Deductions from net assets
attributed to:
Benefits paid to participants 115,332 77,071 112,597 1,491,673
---------- --------- ----------- ------------
Net increase (decrease)
prior to
interfund transfers 994,404 (417,028) 17,508 4,260,085
Participant notes withdrawn (148,534) (74,314) 936,569 -
Loan repayments 137,021 31,303 (748,453) -
Interfund transfers 326,374 75,320 - -
---------- --------- ----------- ------------
Net increase (decrease) 1,309,265 (384,719) 205,624 4,260,085
Net assets available for benefits:
Beginning of year 2,418,024 1,134,129 1,351,417 19,558,419
----------- ---------- ----------- ------------
End of year $ 3,727,289 $ 749,410 $ 1,557,041 $23,818,504
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
</TABLE>
Continued
14
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
-----------------
10. RECONCILIATION TO FORM 5500:
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500 as of December 31:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Net assets available for benefits per the
financial statements $ 23,818,504 $ 19,558,419
Amounts allocated to withdrawing participants - (14,365)
------------- ------------
Net assets available for benefits per the Form 5500 $ 23,818,504 $ 19,544,054
------------- ------------
------------- ------------
Similarly, the 1996 participants' withdrawals amount reflected in the statement of changes in net assets available for benefits
is reconciled to Form 5500 as follows:
Benefits paid to participants per the financial statements $ 728,807
Transfers out to other plans per the financial statements 762,866
------------
Total deductions per the financial statements 1,491,673
Add: Amounts allocated to withdrawing participants at
December 31, 1996 -
Less: Amounts allocated to withdrawing participants
at December 31, 1995 (14,365)
Expenses related to disbursements (895)
------------
Benefits paid to participants per the Form 5500 $ 1,476,413
------------
------------
</TABLE>
15
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
Line 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
---------------
<TABLE>
<CAPTION>
- ----- -------------------- --------------------------------------------------------- ------------ ------------
(b) IDENTITY OF
ISSUER, BORROWER,
LESSOR, OR SIMILAR (c) DESCRIPTION OF INVESTMENT INCLUDING MATURITY (e) CURRENT
(a) PARTY DATE, RATE OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE (d) COST VALUE
- ----- -------------------- ------------------------------------------------------------- ------------ ------------
<S> <C> <C> <C> <C>
* Merrill Lynch CMA Money Market Account (500,476 shares) $ 497,663 $ 500,476
------------ ------------
------------ ------------
U.S. Government COGR Series 1 (34,746 units, maturing 05/15/98; 8.16% per annum) 30,654 32,123
Coupon Treasury Shares (various maturities and interest rates) 108,547 114,295
Treasury Strips (maturing 5/15/97; various interest rates) 594,545 625,012
------------ ------------
733,746 771,430
------------ ------------
* Merrill Lynch Merrill Lynch Retirement Preservation Trust (4,741,323 units) 4,741,323 4,741,323
------------ ------------
America Fund Group Phoenix Income Fund of America (246,413 units) 3,929,871 4,070,737
Oppenheimer Funds Oppenheimer Total Return Fund, Inc.(538,129 Class A shares) 5,114,445 5,257,520
Franklin Templeton Group Templeton Developing Markets Trust (34,691 shares) 460,694 534,245
Franklin Templeton Group Templeton Foreign Fund (158,749 shares) 1,479,026 1,644,640
Delaware Group Delaware Group Trend Fund (229,594 shares) 3,645,552 3,636,767
------------ ------------
14,629,588 15,143,909
------------ ------------
* Pegasus Gold Inc. Common stock (96,830 shares; no par value) 1,267,989 732,211
------------ ------------
* Pegasus Gold Employee Participant notes (repayable over a term up to
Savings Plan five years at an interest rate of prime rate
plus 2% per annum) 1,557,041 1,557,041
------------ ------------
$ 22,929,687 $ 22,945,914
------------ ------------
------------ ------------
</TABLE>
* Represents party in interest to Plan
16
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
Line 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1996
<TABLE>
<CAPTION>
(b) DESCRIPTION OF ASSET
(INCLUDE INTEREST RATE
(a) IDENTITY OF AND MATURITY IN (c) PURCHASE (d) SELLING (e) LEASE
PARTY INVOLVED CASE OF A LOAN) PRICE PRICE RENTAL
- ------------------------ ------------------------------------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
Combined transactions:
Merrill Lynch Merrill Lynch Retirement Preservation Trust $1,686,418 - -
Merrill Lynch Merrill Lynch Retirement Preservation Trust - $897,549 -
America Fund Group Phoenix Income Fund of America 814,073
America Fund Group Phoenix Income Fund of America - 283,857 -
Oppenheimer Funds Oppenheimer Total Return Fund 1,736,034
Oppenheimer Funds Oppenheimer Total Return Fund - 568,882 -
Delaware Group Delaware Group Trend Fund 1,556,110
Delaware Group Delaware Group Trend Fund - 252,542 -
Pegasus Gold Participant loans: (repayable over a term
Employee up to five years at an annual interest
Savings Plan rate of prime plus 2% per annum)
New loans 936,570 - -
Loan Repayments - 748,452 -
<CAPTION>
(h) CURRENT
(f) EXPENSES VALUE OF (i) NET
INCURRED ASSET ON GAIN
(a) IDENTITY OF WITH (g) COST TRANSACTION OR
PARTY INVOLVED TRANSACTION OF ASSET DATE (LOSS)
--------------- ----------- ---------- ------------ ---------
<S> <C> <C> <C> <C>
Combined transactions:
Merrill Lynch - $1,686,418 $1,686,418 -
Merrill Lynch - 897,549 897,549 -
America Fund Group 814,073 814,073 -
America Fund Group - 275,291 283,857 $8,566
Oppenheimer Funds 1,736,034 1,736,034 -
Oppenheimer Funds - 525,716 568,882 43,166
Delaware Group 1,556,110 1,556,110 -
Delaware Group - 250,168 252,542 2,374
Pegasus Gold
Employee
Savings Plan
- 936,570 936,570 -
- 748,452 748,452 -
</TABLE>
17
<PAGE>
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
FORM 11-K - DECEMBER 31, 1996
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
PEGASUS GOLD EMPLOYEE SAVINGS PLAN
Date: June 24, 1997 By: /s/ Phillips S. Baker, Jr.
--------------- --------------------------
Phillips S. Baker, Jr.
Trustee
Pegasus Gold Employee Savings Plan
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Pegasus Gold Inc. on Form S-8 (Amended and Restated Employee Savings Plan of
Pegasus Gold Corporation, File # 33-98968) of our report dated April 11, 1997,
on our audits of the financial statements and supplemental schedules of Pegasus
Gold Employee Savings Plan as of December 31, 1996 and 1995, and for the year
ended December 31, 1996, which report is included in this filing on Form 11-K.
/s/ COOPERS & LYBRAND L.L.P.
San Francisco, California
June 24, 1997
