<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
(Date of Report)
JANUARY 9, 1998
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)
-------------------------------
<PAGE>
ITEM 5. OTHER EVENTS.
On January 9, 1998, Pegasus Gold Inc. ("Pegasus") issued a news release
announcing that the lenders under the Company's revolving credit facility have
notified Pegasus that the indebtedness outstanding thereunder has been
accelerated and that such lenders have offset amounts they owe under various
hedging contracts against such indebtedness. Certain other hedging agreements
have also been terminated.
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 January 9, 1998.
2
<PAGE>
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: January 9, 1998 By: /s/ Phillips S. Baker, Jr.
----------------------------------------
Phillips S. Baker, Jr.
Vice President, Finance and Chief
Financial Officer
3
<PAGE>
-----------------------------------
NEWS RELEASE
-----------------------------------
PEGASUS GOLD CLOSES HEDGE BOOK
SPOKANE, WA - JANUARY 9, 1997 - Pegasus Gold Inc. (PGU - AMEX, TSE, ME)
announced that the lenders under the Company's revolving credit facility have
notified Pegasus that they consider all amounts payable under the credit
facility accelerated, although they have not yet demanded repayment.
"After consultation with counsel, we have informed our lenders that we disagree
with their interpretation of the revolving credit agreement and have reserved
our rights concerning their actions," said Werner G. Nennecker, President and
Chief Executive Officer.
Under the Company's convertible subordinated notes, acceleration of the
revolving credit indebtedness would constitute an event of default. The Company
disagrees that its revolving credit indebtedness is accelerated, due and
payable.
In addition, over the past several weeks the majority of the Company's gold and
other hedge contracts, including foreign exchange contracts, have been closed
out. The repurchase of the gold hedges generated a gain of approximately $74.5
million. Pegasus still has forward contracts on 48,000 ounces of gold for
delivery in 1998 at an average realized price of $524 per ounce. The remaining
gold hedge position has a mark-to-market value of approximately $10.8 million at
a gold price of $285 per ounce.
The termination of the Australian dollar hedges generated a loss of
approximately $18.6 million. The lenders have notified the Company that they
have exercised their right to set-off proceeds of approximately $58 million from
the termination of gold contracts against foreign currency losses of $2.4
million and the balance against amounts owing under the revolving credit
facility. The remaining foreign currency losses of $16.2 million have not been
settled with the financial institutions.
Statements in this release 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, a Canadian company by incorporation, currently
produces about 475,000 ounces of gold from its operations. The Company carries
out exploration internationally through offices located in Santiago, Chile; and
Panama City, Panama. The common shares of Pegasus are traded under the symbol
PGU on the American, Toronto
<PAGE>
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:
John W. Pearson
Vice President, Investor and Public Relations
Pegasus Gold Corp.
509-624-4653
