BATTLE MOUNTAIN GOLD CO, 10-K, 1994-03-22

BATTLE MOUNTAIN GOLD CO
10-K, 1994-03-22
GOLD AND SILVER ORES

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993 COMMISSION FILE NUMBER 1-9666

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

FROM THE TRANSITION PERIOD FROM TO

BATTLE MOUNTAIN GOLD COMPANY
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
NEVADA 76-0151431
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification Number)
333 CLAY STREET, 42ND FLOOR, HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
</TABLE>

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 650-6400

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- --------------------------------------------- ---------------------------------------------
<S> <C>
Common Stock New York Stock Exchange
$3.25 Convertible Preferred Stock New York Stock Exchange
Rights to Purchase Preferred Stock New York Stock Exchange
</TABLE>

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /

The aggregate market value of voting stock held by non-affiliates of the
registrant was approximately $851 million as of March 14, 1994, based on the
closing sales price of the registrant's common stock as reported on the New York
Stock Exchange Composite Tape on such date. For purposes of the foregoing
sentence only, all directors and officers of the registrant are assumed to be
affiliates.

The number of shares outstanding of the registrant's common stock as of March
14, 1994 is 80,352,399.
DOCUMENTS INCORPORATED BY REFERENCE:

LIST HEREUNDER THE FOLLOWING DOCUMENTS IF INCORPORATED BY REFERENCE AND THE
PART OF THE FORM 10-K INTO WHICH THE DOCUMENT IS INCORPORATED: PROXY STATEMENT
RELATING TO THE 1994 ANNUAL MEETING OF STOCKHOLDERS OF BATTLE MOUNTAIN GOLD
COMPANY WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO REGULATION 14A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (TO THE
EXTENT SET FORTH IN ITEMS 10, 11 AND 12 OF PART III OF THIS ANNUAL REPORT).

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I
Items 1. and 2. Business and Properties . . . . . . . . . . . . . . . . . . . . . . . . . 1

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . 41

Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . 41

PART II
Item 5. Market For Registrant's Common Equity and
Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . 43

Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . 45

Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . 58

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . 91

PART III
Item 10. Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . 91

Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

Item 12. Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

Item 13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . 91

PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
</TABLE>

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PART I

Items 1. and 2. Business and Properties

BUSINESS AND PROPERTIES OF THE COMPANY

INTRODUCTION

Battle Mountain Gold Company ("BMG") and its subsidiaries (collectively
with BMG, the "Company") are engaged in the mining and processing of gold,
silver and copper ore in the United States, Bolivia, Chile and Australia and in
exploration and evaluation of precious metals properties in the United States,
Australia, Latin America and the South Pacific. BMG was incorporated in Nevada
in 1985.

The Company's operating properties include the Battle Mountain complex
in Nevada, the San Luis mine in Colorado, the Pajingo and Red Dome mines in
Queensland, Australia, the San Cristobal mine in Chile and the Kori Kollo mine
in Bolivia.

During the first quarter of 1993, mining ceased at the Fortitude mine
at the Battle Mountain complex and the Kori Kollo mine sulfide facility started
up in Bolivia. With this transition, a significant portion of the Company's
revenues in 1993 were, and in the foreseeable future are expected to be,
attributable to its international operations. The Company continues to have
significant U.S. and international development projects. Additionally, the
Company is also carrying out an international exploration and acquisition
program for reserve expansion.

BMG currently owns 85 percent of the outstanding common equity of
Empresa Minera Inti Raymi S.A., a Bolivian company ("Inti Raymi") which owns
and operates the Kori Kollo mine. As of March 9, 1994, BMG reached an
agreement to purchase an additional 3 percent of Inti Raymi's equity. See
"-- Empresa Minera Inti Raymi -- General." BMG also owns approximately 52.6
percent of the outstanding common equity of Niugini Mining Limited, a Papua New
Guinea company ("Niugini Mining") which owns and operates the San Cristobal and
the Red Dome mines and has a 20 percent interest in a joint venture for the
proposed development of the Lihir gold project in Papua New Guinea ("PNG").

In 1993, the Company produced approximately 474,000 ounces of gold, 2.2
million ounces of silver and 9.5 million pounds of copper, of which BMG's
attributable portion was 400,000 ounces of gold, 1.8 million ounces of silver
and 5.4 million pounds of copper.

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The following table sets forth, on a consolidated basis, the
identifiable assets as of December 31, 1993, and the percent of total gross
revenues for the year ended December 31, 1993, of the Company attributable to
its various mining interests.
<TABLE>
<CAPTION>
Identifiable Percent
Assets of Total Gross
------------ Revenues
(000s) ----------
<S> <C> <C>
BMG
---
Battle Mountain Complex $19,756 10%
San Luis 25,876 13
Pajingo 2,885 6
Crown Jewel 24,640 --

Inti Raymi
----------
Kori Kollo 271,077 40

Niugini Mining
--------------
San Cristobal 41,363 9
Red Dome 37,255 22
Lihir 135,172 --

Other 110,128 --
----- ------- ----
$668,152 100%
======= ====
</TABLE>

The following table provides aggregate operating data for all of the
Company's operating mines for the years 1993, 1992 and 1991:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1993 1992 1991
------------------- ------------------- ----------------
AGGREGATE OPERATING DATA Net(1) 100% Net(2) 100% Net(3) 100%
------------------------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Gold production (000s oz) . . . . . . . . . 400 474 417 496 408 463

Gold sales (000s oz) . . . . . . . . . . . 417 503 415 489 404 451

Average realized gold price per oz . . . . $363 $366 $355 $359 $368 $361

Silver production (000s oz) . . . . . . . . 1,783 2,199 1,319 1,645 959 1,175

Silver sales (000s oz) . . . . . . . . . . 1,884 2,373 1,253 1,539 913 1,090

Average realized silver price per oz . . . $4.30 $4.29 $3.94 $3.94 $4.04 $3.81

Copper production (000s lbs) . . . . . . . 5,374 9,517 6,855 12,139 3,734 6,612

Copper sales (000s lbs) . . . . . . . . . . 7,569 13,404 5,915 10,474 2,464 4,364

Average realized copper price per lb . . . $0.982 $0.982 $1.00 $1.00 $0.975 $0.975

Weighted average cost per equivalent gold
ounce(4):

Cash production costs . . . . . . . . . $222 $222 $211 $211 $178 $178

Taxes, other than income . . . . . . . . 4 4 6 6 9 9

Depreciation, depletion and amortization 82 na 67 na 55 na
---- ---- ---- ---- ---- ----
Total operating costs . . . . . . $308 na $284 na $242 na
==== ==== ==== ==== ==== ====
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</TABLE>

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(1) Includes data based on BMG's 85 percent ownership of Inti Raymi. Gold
production and gold sales each include 180,000 ounces related to BMG's
interest in Inti Raymi and silver production and silver sales include
1,266,000 ounces and 1,273,000 ounces, respectively, related to such
interest. The information in the table also includes data based on BMG's
56.5 percent ownership of Niugini Mining. Gold production and gold sales
include 55,000 ounces and 72,000 ounces, respectively, related to BMG's
interest in Niugini Mining; silver production and silver sales include
251,000 ounces and 344,000 ounces, respectively, related to such interest;
and copper production and copper sales relate only to such interest. On
December 15, 1993, BMG's ownership interest in Niugini Mining decreased to
52.6 percent. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

(2) Includes data based on BMG's 85 percent ownership of Inti Raymi. Gold
production and gold sales include 46,000 ounces and 44,000 ounces,
respectively, related to BMG's interest in Inti Raymi and silver
production and silver sales include 296,000 ounces and 284,000 ounces,
respectively, related to such interest. The information in the table also
includes data based on BMG's 56.5 percent ownership of Niugini Mining.
Gold production and gold sales include 91,000 ounces and 89,000 ounces,
respectively, related to BMG's interest in Niugini Mining; silver
production and silver sales include 356,000 ounces and 306,000 ounces,
respectively, related to such interest; and copper production and copper
sales relate only to such interest.

(3) Includes data based on BMG's 51 percent ownership of Inti Raymi through
May 1991, and BMG's 85 percent ownership of Inti Raymi thereafter. Gold
production and gold sales each include 36,000 ounces related to BMG's
interest in Inti Raymi and silver production and silver sales each include
238,000 ounces, related to such interest. The information in the table
also includes data based on BMG's 56.5 percent ownership of Niugini
Mining. Gold production and gold sales include 54,000 ounces and 44,000
ounces, respectively, related to BMG's interest in Niugini Mining; silver
production and silver sales include 160,000 ounces and 112,000 ounces,
respectively, related to such interest; and copper production and copper
sales relate only to such interest.

(4) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and are
not directly comparable to selling and operating costs per equivalent
ounce of gold sold. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Results of Operations."
All costs are shown on a per equivalent gold ounce produced basis, with
silver and copper by-products converted to ounces of gold on an equivalent
revenue basis. Cash production costs include mining, processing and other
direct plant costs, but exclude sales expenses, royalties, corporate
administrative expenses and other indirect costs.

GOLD PRICE VOLATILITY

The Company's profitability is significantly affected by changes in the
market price of gold. Gold prices can fluctuate widely and are affected by
numerous factors such as expectations for inflation, levels of interest rates,
currency exchange rates, central bank sales, forward selling by producers,
demand for precious metals, global or regional political and economic crises
and production costs in major gold-producing regions such as South Africa and
the former Soviet Union. The aggregate effect of these factors, all of which
are beyond the Company's control, is impossible for the management of the
Company to predict. The demand for and supply of gold affect gold prices, but
not necessarily in the same manner as supply and demand affect the prices of
other commodities. The supply of gold consists of a combination of new mine
production and existing stocks of bullion and fabricated gold held by
governments, public and private financial institutions, industrial
organizations and private individuals. As the amount produced in any single
year constitutes a small portion of the total potential supply of gold, normal
variations in current production do not have a

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significant impact on the supply of gold or on its price. If gold prices
decline substantially, the Company would have to re-evaluate the carrying
values of its properties and could determine that a write-down of values
would be needed. If gold prices decline to a point below the Company's cash
production costs and remain below this level for any substantial period, the
Company could determine that it is not economically feasible to continue
commercial production at any or all of its operations. See "-- Certain Factors
Affecting Reserves, Foreign Investments and Properties."

The volatility of gold prices is illustrated by the following table of
the high, low and average afternoon fixing prices of gold per ounce on the
London Bullion Market:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
High . . . . . . . . . . . $406 $359 $403 $424 $416

Low . . . . . . . . . . . . 326 330 344 346 356

Average . . . . . . . . . . 360 344 362 383 381
</TABLE>

To mitigate the impact of downturns in the gold and copper markets, the
Company currently engages in limited hedging transactions with respect to a
portion of its production of gold and copper. See "-- Sales and Hedging
Activities," and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources." Also see Note
15, "Forward Sales and Hedging," of Notes to Consolidated Financial Statements
under Item 8 of Part II herein.

BATTLE MOUNTAIN GOLD COMPANY

BMG's worldwide offices are headquartered in Houston, Texas. BMG has a
North American regional office in Denver, Colorado and a South American
regional office in La Paz, Bolivia. Mine offices are located in Battle
Mountain, Nevada; San Luis, Colorado; and near Charters Towers, Queensland;
with an operations branch office in Oroville, Washington. BMG's worldwide
exploration program is headquartered in Houston, Texas. U.S. exploration
activities are managed from the Reno, Nevada branch office. Latin American
exploration activities are managed from the Tucson, Arizona branch office.
Other branch exploration offices are located in Helena, Montana; and Perth,
Western Australia.

BATTLE MOUNTAIN COMPLEX

General. BMG's Battle Mountain complex is located near Battle Mountain,
Nevada, and consists of two areas known as Copper Canyon and Copper Basin,
totalling approximately 50 square miles. The Copper Basin area is located 10
miles northeast of the Copper Canyon area. The Company's identifiable assets
attributable to the Battle Mountain complex as of December 31, 1993, were $19.8
million.

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[MAP]

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The Fortitude mine's reserves were exhausted in March 1993 resulting in
the decommissioning of the milling facility at Copper Canyon. Heap leaching at
Copper Basin commenced in 1991 and is expected to continue through the first
half of 1994. Development of the Reona heap leach project in Copper Canyon
commenced in early 1994.

BMG holds title to the Battle Mountain property in the form of fee land,
unpatented lode, placer and millsite claims and leased claim acreage. The
Reona project is located in part on unpatented lode claims which may be subject
to future royalties if legislation currently pending before Congress is
enacted. See "-- Property Interests -- United States." Access to the Battle
Mountain complex is by way of a two- mile paved road, which connects to a state
highway.

<TABLE>
<CAPTION>
RESERVE DATA DECEMBER 31, 1993
------------ -----------------
<S> <C>
Proven/probable ore reserves (000s tons)(1) . . . . . . . . . . . . . . . 15,018

Average gold ore grade (oz/ton) . . . . . . . . . . . . . . . . . . . . . .026

Contained ounces (000s)

Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390

Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,680

Recovery factor for gold (%) . . . . . . . . . . . . . . . . . . . . . . 69
</TABLE>

<TABLE>
<CAPTION>
OPERATING DATA YEAR ENDED DECEMBER 31,
-------------- -----------------------------
Production statistics: 1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Tons of ore milled (000s) . . . . . . . . . . . . . . 151 1,222 1,114

Tons of ore leached (000s) . . . . . . . . . . . . . . 1,711 1,238 727

Stripping ratio(2) . . . . . . . . . . . . . . . . . . 3.0:1 3.4:1 2.8:1

Mill feed ore grade (oz gold/ton) . . . . . . . . . . .15 .14 .21

Mill recovery factor for gold (%) . . . . . . . . . . 94 94 97

Leach ore grade (oz gold/ton) . . . . . . . . . . . . .033 .028 .032

Leach recovery factor for gold (%) . . . . . . . . . . 57 65 70

Gold recovered (000s oz) . . . . . . . . . . . . . . . 61 178 244

Silver recovered (000s oz) . . . . . . . . . . . . . . 114 426 425

Cost per equivalent gold ounce(3):

Cash production costs . . . . . . . . . . . . . . . . $352 $209 $146

Taxes, other than income . . . . . . . . . . . . . . . 15 9 14

Depreciation, depletion and amortization(4) . . . . . 67 43 38
----- ----- -----
Total operating costs . . . . . . . . . . . . . $434 $261 $198
- ---------------- ==== ==== ====
</TABLE>

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(1) This table includes Copper Basin and Reona project reserves. The reserves
were determined using a cutoff grade ranging from .010 to .031 ounce per
ton and an assumed gold price of $350 per ounce. See "-- Certain Factors
Affecting Reserves, Foreign Investments and Properties."

(2) As of December 31, 1993, the estimated stripping ratio over the remaining
life of the Battle Mountain complex ore reserves was assumed to average
approximately 2.1:1.

(3) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and are
not directly comparable to selling and operating costs per equivalent
ounce of gold sold. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Results of Operations."
All costs are shown on a per equivalent gold ounce produced basis, with
by-product silver converted to ounces of gold on an equivalent revenue
basis. Cash production costs include mining, processing and other direct
plant costs, but exclude sales expenses, corporate administrative expenses
and other indirect costs.

(4) Depreciation, depletion and amortization for 1992 does not include a
third-quarter write-off for the abandonment of the Canyon Placer mine
which amounted to $6 million before taxes. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Results
of Operations."

Copper Basin Heap Leach. Production at the Battle Mountain complex for
1993 decreased significantly from production for 1992 primarily as a result of
the exhaustion of the Fortitude reserves in March 1993. Heap leach ore was
mined in 1993 primarily from the Surprise and Labrador mines, both located in
the Copper Basin area. Additional heap leach ore was mined from smaller
satellite deposits near the heap leach facility, including the Northern Lights,
Bailey Day and Empire satellite deposits. Mining ceased at Copper Basin during
1993. Stockpiled ore continues to be crushed and processed at the Copper Basin
heap leach facility. Processing is expected to continue through the first half
of 1994.

Unit cash production costs at the Battle Mountain complex for 1993
increased significantly from unit cash production costs for 1992. The increase
was primarily due to lower ore grades, inclement weather conditions, higher
haulage costs associated with the mining of satellite ore deposits, and costs
attributable to a reduction in work force resulting from the shutdown of the
milling facility at the Battle Mountain complex. For the same reasons, total
unit operating costs at the Battle Mountain complex for 1993 also increased
from the total unit operating costs for 1992. Depreciation, depletion and
amortization expense per ounce increased during 1993 as compared to 1992 as a
result of adjustments made to accumulated depreciation, depletion and
amortization related to the disposal of plant and equipment resulting from the
scaling down of operations and a lower level of production.

Reona Project. In 1993, BMG announced a decision to develop the Reona
project, including construction of a heap leach facility in Copper Canyon. The
cost of developing the project is estimated to be approximately $13.8 million,
of which $2.1 million had been spent through December 31, 1993. The project
contains estimated reserves of approximately 13.5 million tons of ore at an
average ore grade of .028 ounce of gold per ton, equivalent to approximately
370,000 contained ounces of gold. The project also contains approximately 2.3
million contained ounces of silver. The reserves were determined using a
cutoff grade of .013 ounce of gold per ton and an assumed gold price of $350
per ounce. The estimated gold recovery factor was approximately 66 percent.

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On January 12, 1994, the Bureau of Land Management approved BMG's plan
of operations for the Reona project. The Company has commenced development
activities pursuant to the approved plan of operations. When fully
operational, the heap leach operation is expected to produce approximately
50,000 ounces of gold on an annual basis. BMG will conduct its mining
operations at the Reona project utilizing open pit mining methods. The project
is expected to be in production in the second half of 1994. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

Phoenix Mineralization. BMG is evaluating the feasibility of mining
and milling approximately 14 million tons of low-grade millable mineralization
with an average grade of .05 ounce of gold per ton and an estimated recovery
factor of approximately 90 percent. The cutoff grade used in evaluating this
mineralization is .026 ounce of gold per ton. See "-- Certain Factors
Affecting Reserves, Foreign Investments and Properties." This mineralization
lies in an area of Copper Canyon and is known as the Phoenix project (formerly
called the Fortitude Extension). A final feasibility study regarding the
Phoenix project is expected to be completed in 1994.

Geology. The mines at the Battle Mountain complex are located in the
Battle Mountain Range. The range consists of predominantly faulted and folded
Paleozoic rocks which have been locally intruded by plutonic masses. Marginal
to and associated with the plutons, sulfide mineralization containing base and
precious metals has locally formed. Economic concentrations of gold and silver
are typically associated with carbonate sediments that have been converted to
"skarn" through the process of contact metamorphism. Economic mineralization
is also associated with faulting and shearing which formed contemporaneously
with the intrusive events. Mill grade gold and silver mineralization has been
mined from several areas within the district where strong sulfide
mineralization was deposited. Natural weathering has altered areas of sulfide
mineralization to form iron oxides and other secondary minerals that are
generally favorable for heap leach recovery of precious metals.

Mining, Processing and Environmental Compliance. Leach grade ore is
processed at Copper Basin by heap leaching. The Copper Canyon milling facility
was decommissioned in the first quarter of 1993 in connection with the
cessation of mining Fortitude ore. However, the precious metals refinery and
desorption plant at Copper Canyon continues to process material from the Copper
Basin heap leach facility. The precious metals refinery and desorption plant
will also be utilized for processing material from the Reona heap leach
facility. As of December 31, 1993, the carrying value of the decommissioned
milling facilities was $5.1 million. It is expected that these facilities will
be utilized in future operations and that their carrying value will be fully
recoverable from the cash flows generated by those operations. In addition, it
is expected that the carrying value of other assets at the Battle Mountain
complex will also be fully recoverable from the cash flows from future
operations, including the carrying values of the following operating assets (as
of December 31, 1993): $4.1 million for the Copper Basin heap leach facility,
$2.4 million for materials and supplies inventory, and $1.3 million for mining
equipment. The Battle Mountain complex is subject to federal and state
environmental laws and regulations including reclamation requirements under the
laws of the State of Nevada. See "Management's Discussion and Analysis of

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Financial Condition and Results of Operations -- Liquidity and Capital
Resources" and "-- Environmental Matters -- United States -- Battle Mountain
Complex."

SAN LUIS MINE

General. The San Luis mine is located approximately 3 miles northeast
of San Luis, Colorado. The San Luis mine lies within approximately 800 acres
of land leased from a private party which in turn owns the land in fee. The
lease is held by Battle Mountain Resources Inc., a wholly-owned subsidiary of
BMG. The Company also owns fee lands in the proximity of the mine. Production
from the mine is subject to a net smelter returns royalty of 3.5 percent. See
"-- Property Interests -- United States." Commercial production at the San
Luis mine began in July 1991. Access to the San Luis property is by way of a
five-mile dirt road, which connects to a state highway. The Company's
identifiable assets attributable to the San Luis mine as of December 31, 1993,
were $25.9 million.

<TABLE>
<CAPTION>
RESERVE DATA DECEMBER 31, 1993
------------ -----------------
<S> <C>
Proven/probable ore reserves (000s tons)(1) . . . . . . . . . . . . . . . 6,977

Average gold ore grade (oz/ton) . . . . . . . . . . . . . . . . . . . . . .042

Contained gold ounces (000s) . . . . . . . . . . . . . . . . . . . . . . 295

Recovery factor for gold (%) . . . . . . . . . . . . . . . . . . . . . . 90
</TABLE>

Stripping ratio(2) . . . . . . . . . . . . . . . . . . . 2.4:1 2.4:1 2.5:1

Mill feed ore grade (oz gold/ton) . . . . . . . . . . . .05 .04 .04

Mill recovery factor for gold (%) . . . . . . . . . . . 91 88 76

Gold recovered (000s oz) . . . . . . . . . . . . . . . . 72 55 22

Silver recovered (000s oz) . . . . . . . . . . . . . . . 27 28 14

Cost per equivalent gold ounce(3):

Cash production costs . . . . . . . . . . . . . . . . . $238 $316 $314

Taxes, other than income . . . . . . . . . . . . . . . . 10 16 10

Depreciation, depletion and amortization(4) . . . . . . 81 131 170
---- ---- ----
Total operating costs . . . . . . . . . . . . . . $329 $463 $494
- ------------------ ==== ==== ====
</TABLE>

(1) The reserves were determined using a cutoff grade of .017 ounce of gold
per ton and an assumed gold price of $380 per ounce. See "-- Certain
Factors Affecting Reserves, Foreign Investments and Properties."

(2) As of December 31, 1993, the estimated stripping ratio is assumed to
average approximately 1.49:1 over the remaining life of the mine.

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(3) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and are
not directly comparable to selling and operating costs per equivalent
ounce of gold sold. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Results of Operations."
All costs are shown on a per equivalent gold ounce produced basis, with
silver by-product converted to ounces of gold on an equivalent revenue
basis. Cash production costs include mining, processing and other direct
plant costs, but exclude sales expenses, corporate administrative expenses
and other indirect costs. Production from the leased property is subject
to a 3.5 percent net smelter returns royalty, which is also excluded from
cash production costs.

(4) Depreciation, depletion and amortization for 1992 does not include a
third-quarter writ-edown which totalled $26.7 million before taxes. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Results of Operations."

Gold production for 1993 at the San Luis mine increased significantly
from 1992 production. Unit cash production costs and total unit operating
costs for 1993 at the San Luis mine decreased from 1992 levels. The increase
in production and decrease in unit cash production costs and unit depreciation,
depletion and amortization in 1993 were primarily due to higher recovery rates,
higher mill feed ore grade and generally improved operating efficiencies.

Geology. The San Luis gold deposits, composed of the east and west
zones, are part of a relatively flat dipping, tabular mineralized zone. This
zone lies on the south-facing slope of the north side of Rito Seco Valley. The
host rocks of the deposits are intensely deformed gneisses of Precambrian age.
The gold is fine-grained and associated with various sulfide minerals, pyrite
being the most common. The degree of oxidation is weak and generally is
restricted to fractures near the surface. Sulfides occur at the surface in
some areas, particularly the west zone.

Mining, Processing and Environmental Compliance. BMG conducts its
mining operations at San Luis utilizing conventional open pit mining methods.
Ore is processed at a mill in a carbon-in-pulp cyanide leach circuit.
Operations at San Luis are subject to federal and state environmental laws and
regulations. See "-- Environmental Matters -- United States -- San Luis."

PAJINGO MINE

General. The Pajingo mine and nearby Cindy deposit are situated on a
10.5 square mile state-issued mining lease, 44 miles southeast of Charters
Towers and 120 miles southwest of Townsville, Queensland. The mine is owned by
Pajingo Gold Mine Pty. Ltd., a wholly-owned, Australian subsidiary of a U.S.
subsidiary of BMG. Production from the state-issued mining lease is subject to
an annual royalty. See "-- Property Interests -- Australia." The Company's
identifiable assets attributable to the Pajingo mine as of December 31, 1993,
were $2.9 million.

The Pajingo mine commenced production in 1987. Mining operations at
the Pajingo mine ceased in 1993. Milling of stockpiled ore is continuing.
Mining of the Cindy deposit commenced in March 1994. The Pajingo milling
facility is expected to be used to process

10
<PAGE> 13
ore mined from the Cindy deposit beginning in mid-1994. Access to the
Pajingo mine and Cindy deposit is by way of a 13-mile gravel road, which
connects to a state highway.
<TABLE>
<CAPTION>
RESERVE DATA DECEMBER 31, 1993
------------ -----------------
<S> <C>
Proven/probable ore reserves (000s tons)(1) . . . . . . . . . . . . . . 337
Average gold ore grade (oz/ton) . . . . . . . . . . . . . . . . . . . . .201
Contained gold ounces (000s) . . . . . . . . . . . . . . . . . . . . . 70
Recovery factor for gold (%) . . . . . . . . . . . . . . . . . . . . . 95
</TABLE>
<TABLE>
<CAPTION>
OPERATING DATA YEAR ENDED DECEMBER 31,
-------------- -----------------------------
Production statistics: 1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Tons of ore milled (000s) . . . . . . . . . . . . . . . . . 190 196 188
Stripping ratio(2) . . . . . . . . . . . . . . . . . . . . . .025:1 4.4:1 9.9:1
Mill feed ore grade (oz gold/ton) . . . . . . . . . . . . . .18 .26 .29
Mill recovery factor for gold (%) . . . . . . . . . . . . . 94 94 96
Gold recovered (000s oz) . . . . . . . . . . . . . . . . . . 32 47 52
Silver recovered (000s oz) . . . . . . . . . . . . . . . . . 125 213 122
Cost per equivalent gold ounce(3):
Cash production costs . . . . . . . . . . . . . . . . . . . $179 $129 $169
Taxes, other than income . . . . . . . . . . . . . . . . . . 2 1 1
Depreciation, depletion and amortization . . . . . . . . . . 49 45 40
Total operating costs . . . . . . . . . . . . . . . . $230 $175 $210
- ---------------- ==== ==== ====
</TABLE>

(1) This table includes stockpiles at the Pajingo mine and ore reserves at the
Cindy deposit. The reserves were determined using a cutoff grade ranging
from .041 to .117 ounce of gold per ton and an assumed gold price of $350
per ounce. See "-- Certain Factors Affecting Reserves, Foreign
Investments and Properties."

(2) As of December 31, 1993, the estimated stripping ratio over the remaining
life of the Cindy deposit was assumed to average 16.3:1.

Unit cash production, unit depreciation, depletion and amortization
and total unit operating costs at the Pajingo mine increased significantly from
1992 levels. These increases

11
<PAGE> 14
were primarily due to lower production as a result of a decline in feed ore
grade. Costs fluctuate depending on exchange rates between U.S. and
Australian dollars. During 1993, the Australian dollar fluctuated from a low
of one Australian dollar to 0.64 U.S. dollars to a high of one Australian
dollar to 0.72 U.S. dollars. See "-- Explanatory Note Regarding Exchange
Rates." Following depletion of the Cindy deposit and cessation of milling
activities, all capitalized costs associated with the Pajingo mine and Cindy
deposit are expected to be fully expensed.

Geology. The Pajingo mine is located in rocks of Paleozoic age in the
Drummond Basin. The host rocks are ancient volcanic pyroclastic and lava rocks
intermixed with sandstone and siltstone sedimentary rocks. The gold ores occur
as quartz veins and wider lodes that are emplaced in steeply dipping fractures
in the host rocks.

Mining, Processing and Environmental Compliance. BMG conducts its
mining operations at the Cindy deposit utilizing open pit mining methods.
Underground mining methods are expected to be utilized in mining the Cindy
deposit beginning in the second half of 1994. Mining operations at the
Pajingo mine were conducted utilizing open pit mining methods and limited
underground mining in 1993. Ore is processed at a mill in a carbon-in-pulp
cyanide leach circuit. The Pajingo mine and Cindy deposit are subject to
environmental laws and regulations including reclamation requirements under
Queensland legislation. See "-- Environmental Matters -- Australia."

CROWN JEWEL PROJECT

At a cost of $10 million, BMG acquired an option to earn a 51 percent
joint venture interest in the Crown Jewel project near Oroville, Washington
from Crown Resources Corporation. In order to acquire the 51 percent interest,
BMG will have to fund, on a nonreimbursable basis, all expenditures for
exploration, evaluation and development of the project through commencement of
commercial production. BMG announced a decision to develop the Crown Jewel
project in 1992, subject to obtaining requisite permits. The Company's
identifiable assets attributable to the Crown Jewel project as of December 31,
1993, were $24.6 million.

The project is within approximately 9,000 acres of land in northeastern
Washington state consisting of patented, unpatented and lease holdings. BMG
has applied for patents covering the unpatented portion of the Crown Jewel ore
body but has not yet received the First Half - Mineral Entry Final Certificate.
The Secretary of Interior has withdrawn the authority of field offices to issue
such certificate, and, accordingly, additional administrative delay may be
encountered in BMG's obtaining the certificate. In addition, legislation is
currently pending before Congress to amend or replace the General Mining Law
which could impose royalty payments on Crown Jewel production. See "--
Property Interests -- United States."

Legislation was recently passed in the State of Washington legislature
which would impact mining activities there. The legislation must be signed by
the governor of the State of Washington to become law. The legislation covers,
among other matters, siting criteria and additional standards for tailings
impoundments, additional bonding requirements for mining activities, county
economic approval authority over mining projects, and the

12
<PAGE> 15
allowance of private citizens' lawsuits regarding enforcement of certain
environmental laws. While the legislation could cause increases in capital
expenditure or operating costs and potential project delays, the actual impact
of the legislation on the Crown Jewel project is difficult to determine at this
time. Implementing regulations which are expected to clarify several aspects
of the legislation are expected to be developed.

Reserves at the Crown Jewel project, net to BMG's 51 percent interest
in the project, were estimated at 4.435 million tons of ore at an average grade
of .186 ounce of gold per ton as of December 31, 1993, for net proven and
probable gold reserves of approximately 825,000 contained ounces attributable
to BMG. The recovery factor for gold was estimated to be approximately 87
percent. The reserves were determined using a cutoff grade of .034 ounce of
gold per ton and an assumed gold price of $350 per ounce. See "-- Certain
Factors Affecting Reserves, Foreign Investments and Properties."

BMG is proceeding with permitting of the Crown Jewel project.
Obtaining the necessary government permits and approvals is a complex and time
consuming process involving numerous federal, state and local agencies. See
"-- Environmental Matters -- United States -- Crown Jewel Project." In
addition, permitting could be complicated by recent and potential future
changes to environmental and public land laws affecting the project. See "--
Property Interests -- United States."

Assuming satisfactory permits, water rights and approvals are obtained,
BMG expects to construct a milling facility designed to have a throughput
capacity of 3,000 tons per day which is expected to produce an average of
approximately 87,500 ounces of gold per year attributable to BMG. Completion
could occur in late 1996, although start-up will depend on the length of the
permitting process and the extent to which legal challenges are made by project
opponents. See "-- Environmental Matters -- United States -- Crown Jewel
Project." BMG would be the operator. Total capital costs for the project,
including plant construction, exploration, evaluation and option payments, are
anticipated to be approximately $87 million, of which approximately $24.6
million have been incurred through December 31, 1993. In addition, in order to
maintain BMG's right to earn a 51 percent interest in the Crown Jewel project,
BMG could be required to make payments to the co-venturer in amounts of $1
million per quarter. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

EXPLORATION

BMG, through wholly-owned subsidiaries, conducts exploration and
evaluation activities in search of precious metals in countries which currently
include the United States, the Dominican Republic, Argentina, Bolivia, Mexico,
Chile, Honduras, Australia and Indonesia. BMG's primary objective is to
develop high-quality ore deposits with low operating costs per ounce. BMG
seeks to do this through exploration for extensions of ore zones at operating
properties, in areas proximate to other gold production and through frontier
exploration. For additional information concerning BMG's exploration
expenditures, see "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources."

13
<PAGE> 16
EMPRESA MINERA INTI RAYMI

Inti Raymi's offices are headquartered in La Paz, Bolivia. Through a
series of acquisitions, BMG increased its equity ownership in Inti Raymi to 85
percent of Inti Raymi's equity by May 1991. The remaining 15 percent of Inti
Raymi is owned by Zeland Mines S.A. (unaffiliated to BMG). See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources." As of March 9, 1994, BMG and Zeland Mines
S.A. had reached an agreement for BMG to acquire an additional 3 percent
ownership of Inti Raymi's equity from Zeland Mines S.A. for $5.2 million. The
transaction is subject to corporate and governmental approvals. BMG maintains
political risk insurance for its investment in Inti Raymi with the Overseas
Private Investment Corporation, a United States government agency. See "--
Certain Factors Affecting Reserves, Foreign Investments and Properties."

KORI KOLLO MINE

General. The Kori Kollo mine is located near Oruro in western Bolivia
on government mining concessions issued to Inti Raymi covering approximately
43.7 square miles. See "-- Property Interests -- Bolivia." Access to the mine
site is by way of a 27-mile dirt and gravel road connected to a national
highway. The Company's identifiable assets attributable to the Kori Kollo mine
as of December 31, 1993, were $271 million.

Commercial production from the newly-constructed milling facility for
the processing of sulfide ore at the Kori Kollo mine commenced in February
1993. At that time, heap leaching of oxide ore was discontinued.

14
<PAGE> 17
<TABLE>
<CAPTION>
RESERVE DATA DECEMBER 31, 1993
------------ -----------------------
Net (85%) 100%
--------- ----
<S> <C> <C>
Proven/probable ore reserves (000s tons)(1) . . . . . . . . . . . . . . 55,474 65,264

Average gold ore grade (oz/ton) . . . . . . . . . . . . . . . . . . . . .066 .066

Contained ounces (000s)

Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,690 4,340

Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,035 24,745

Recovery factor for gold (%) . . . . . . . . . . . . . . . . . . . . . 62 62
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1993 1992 1991
-------------------- --------------------- -----------------
OPERATING DATA Net(85%) 100% Net(85%) 100% Net(2) 100%
-------------- -------- ---- -------- ---- ------ ----
<S> <C> <C> <C> <C> <C> <C>
Heap leach operation:(3)

Tons of ore heap leached (000s) . . 105 123 1,170 1,385 1,160 1,365

Stripping ratio . . . . . . . . . . 1.62:1 1.62:1 1.25:1 1.25:1 2.95:1 2.95:1

Leach ore grade (oz gold/ton) . . . .05 .05 .05 .05 .05 .05

Leach recovery factor for gold (%) . 80 80 76 76 72 72

Gold recovered (000s oz) . . . . . . 4 5 46 54 36 50

Silver recovered (000s oz) . . . . . 47 56 296 349 238 331

Milling operation:

Tons of ore milled (000s) . . . . . 4,464 5,220 na na na na

Stripping ratio(4) . . . . . . . . . 1.45:1 1.45:1 na na na na

Mill feed ore grade (oz gold/ton) . .056 .056 na na na na

Mill recovery factor for gold (%) . 69 69 na na na na

Gold recovered (000s oz) . . . . . . 176 206 na na na na

Silver recovered (000s oz) . . . . . 1,219 1,433 na na na na

Cost per equivalent gold ounce(5):

Cash production costs . . . . . . . $169 $169 $149 $149 $138 $138

Taxes, other than income . . . . . . 1 1 2 2 2 2

Depreciation, depletion and 109 na 128 na 110 na
---- ---- ---- ---- ---- ----
amortization . . . . . . . . . . . .

Total operating costs . . . . $279 na $279 na $250 na
- ---------------- ==== ==== ==== ==== ==== ====
</TABLE>

15
<PAGE> 18
(1) The reserves were determined using a cutoff grade ranging from .028 to
.036 ounce of gold per ton and an assumed gold price of $350 per ounce.
See "-- Certain Factors Affecting Reserves, Foreign Investments and
Properties."

(2) Reflects data attributable to BMG's 51 percent ownership of Inti Raymi
through May 1991 and its 85 percent ownership of Inti Raymi thereafter.

(3) Heap leaching of oxide ore was suspended in the first quarter of 1993 in
connection with the start-up of the milling facility in February 1993.

(4) As of December 31, 1993, the estimated stripping ratio is assumed to
average approximately 1:1 over the remaining life of the mine.

(5) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and are
not directly comparable to selling and operating costs per equivalent
ounce of gold sold. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Results of Operations."
All costs are shown on a per equivalent gold ounce produced basis, with
by-product silver converted to ounces of gold on an equivalent revenue
basis. Cash production costs include mining, processing and other direct
plant costs, but exclude sales expenses, corporate administrative expenses
and other indirect costs.

The milling facility has increased production at Kori Kollo to an
annual rate of approximately 245,000 ounces of gold. See "-- Mining and
Processing." The cost of construction, including financing costs, was
approximately $143 million and has been partially project financed. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

A project to increase operating efficiencies at the Kori Kollo mine is
currently underway. Management is also evaluating an expansion project to
increase gold recovery rates at the Kori Kollo mine.

With the start-up of the new milling facility in the first quarter of
1993, unit cash production costs increased over such costs associated with heap
leaching. Total unit operating costs for 1993 were approximately equal to
total unit operating costs for 1992. Total unit operating costs attributable
to BMG's interest include depreciation of capital and local taxes.
Depreciation, depletion and amortization expense per ounce decreased during
1993 as compared to 1992 as a result of the increased level of production and
an increased amount of reserves.

Geology. The project is in the Andean tectonic belt of western Bolivia
between the Cordillera Occidental and the Cordillera Real, and within a former
lake basin of the Altiplano. Deformed Paleozoic sediments and a Tertiary
volcanic sequence underlie the lake bed deposits. Locally these rocks form
topographic highs, reflecting block-faulting. Irregular masses of
biotite-hornblende dacite porphyry intrude the Paleozoic sediments. The
deposit is contained within two varieties of dacite porphyry intrusions. Both
varieties of dacite have been pervasively quartz-sericite altered throughout
the deposit. The most important structural controls of mineralization are
fault systems which trend in two directions and contain auriferous sulfide
veins and veinlets. Some veins contain minor stibnite, tetrahedrite, galena,
sphalerite and realgar.

16
<PAGE> 19
Mining, Processing and Environmental Compliance. Inti Raymi utilizes
conventional open pit mining methods at Kori Kollo. Mining at the Kori Kollo
mine is performed by Servicios de Maquinaria y Transporte, S.A., an 85 percent
owned subsidiary of BMG ("SERMAT"). BMG has reached agreement to increase its
ownership in SERMAT to 88 percent in conjunction with an agreement to purchase
an additional 3 percent equity interest in Inti Raymi. Through February 1993,
oxide ore from the mine was heap leached. Sulfide ore from the Kori Kollo mine
is processed at the mill in a carbon-in-leach cyanide leach circuit. The mill
processes an average of approximately 16,000 tons of ore per day. The Kori
Kollo operations are subject to Bolivian environmental laws. See "--
Environmental Matters -- Bolivia."

EXPLORATION

Inti Raymi conducts ongoing exploration and evaluation activities in
search of precious metals within the Kori Kollo concessions area. The Company
conducts exploration in Bolivia outside the Kori Kollo area through Compania
Minera La Barca S.A., a separate 85 percent owned subsidiary ("La Barca"). BMG
has reached agreement to increase its ownership in La Barca to 88 percent in
conjunction with an agreement to purchase an additional 3 percent equity
interest in Inti Raymi. For additional information concerning exploration
expenditures, see "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources."

NIUGINI MINING LIMITED

Niugini Mining's administrative offices are located in Sydney,
Australia and Kainantu, Papua New Guinea, with subsidiary branch offices in
Santiago and Antofagasta, Chile; Cairns, Australia; and Kuala Lumpur, Malaysia.
Through purchases of Niugini Mining's equity directly from Niugini Mining and
on the open market, BMG acquired approximately 56.5 percent of Niugini Mining's
equity by 1990. BMG's interest in Niugini Mining was reduced from
approximately 56.5 percent to approximately 52.6 percent in December 1993 as a
result of the sale of equity by Niugini Mining in connection with the proposed
financing of the Lihir project in PNG. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources." The remaining share ownership of Niugini Mining is
publicly held, with the shares quoted on the Australian Stock Exchange Limited.

SAN CRISTOBAL MINE

General. In 1989, Niugini Mining purchased a 100 percent interest in
the San Cristobal gold mine located on 52.5 square miles of government-issued
mining concessions in northern Chile, 68 miles from the port city of
Antofagasta. See "-- Property Interests -- Chile." The San Cristobal mine is
owned and operated by Niugini Mining's wholly-owned Chilean subsidiary
Inversiones Mineras del Inca, S.A. The mine is readily accessible by existing
roads. Commercial production of the mine began in July 1991. The reserves at
San Cristobal, shown below, include recent additions. The Company's
identifiable assets attributable to the San Cristobal mine as of December 31,
1993, were $41.4 million.

17
<PAGE> 20
<TABLE>
<CAPTION>
RESERVE DATA DECEMBER 31, 1993
------------ --------------------------
Net (52.6%) 100%
----------- ----
<S> <C> <C>
Proven/probable ore reserves (000s tons)(1) . . . . . . . . . . . . . . 11,835 22,483

Average gold ore grade (oz/ton) . . . . . . . . . . . . . . . . . . . . .028 .028

Contained gold ounces (000s) . . . . . . . . . . . . . . . . . . . . . 335 635

Recovery factor for gold (%) . . . . . . . . . . . . . . . . . . . . . 67 67
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1993 1992 1991
--------------------- ------------------ ------------------
Net Net Net
OPERATING DATA (56.5%)(2) 100% (56.5%) 100% (56.5%) 100%
-------------- ---------- ---- ------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C>
Production statistics:
Tons of ore heap leached (000s) . . 1,814 3,213 1,735 3,072 641 1,135

Stripping ratio(3) . . . . . . . . . 2.3:1 2.3:1 2.2:1 2.2:1 2.6:1
2.6:1
Leach ore grade (oz gold/ton) . . . .029 .029 .028 .028 .032 .032

Leach recovery factor for gold (%) . 53 53 67 67 64 64

Gold recovered (000s oz) . . . . . . 28 49 33 58 12 21
Silver recovered (000s oz) . . . . . 78 139 100 177 32 57

Cost per equivalent gold ounce(4):

Cash production costs . . . . . . . $351 $351 $276 $276 $342 $342

Taxes, other than income . . . . . . -- -- -- -- -- --

Depreciation, depletion and 85 85 82 82 98 98
---- ---- ---- ---- ---- ----
amortization . . . . . . . . . . . .
Total operating costs . . . . $436 $436 $358 $358 $440 $440
- ---------------- ==== ==== ==== ==== ==== ====
</TABLE>

(1) The reserves were determined using a cutoff grade of .010 ounce of gold
per ton and an assumed gold price of $375 per ounce. See "-- Certain
Factors Affecting Reserves, Foreign Investments and Properties."

(2) On December 15, 1993, BMG's ownership interest in Niugini Mining decreased
to 52.6 percent. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

(3) As of December 31, 1993, the estimated stripping ratio is assumed to
average approximately 1.19:1 over the remaining life of the mine.

(4) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and are
not directly comparable to selling and operating costs per equivalent
ounce of gold sold. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Results of Operations."
All costs are shown on a per equivalent gold ounce produced basis, with
by-product silver converted to ounces of gold on an equivalent revenue
basis. Cash

18
<PAGE> 21
production costs include mining, processing and other direct plant costs,
but exclude sales expenses, corporate administrative expenses and other
indirect costs.

Production at San Cristobal is expected to increase in 1994 as a result
of the installation of a tertiary crushing circuit in January 1994. Unit cash
production, unit depreciation, depletion and amorization and total unit
operating costs for 1993 increased from such costs for 1992 primarily as a
result of lower recovery rates. Unit cash production costs and total unit
operating costs are expected to decrease in 1994 primarily as a result of
improvement in crusher performance. See "-- Certain Factors Affecting
Reserves, Foreign Investments and Properties."

Geology. The San Cristobal mine is located in a low-grade
porphyry-breccia style gold deposit. A system of quartz feldspar porphyries,
rhyolites and breccias is hosted within a major structure at the margin of a
larger granite porphyry. The main part of the deposit occurs in the upper part
of the porphyry-breccia system. Several styles of gold mineralization have
been defined with the majority of the gold contained within the dikes and
breccias, particularly at dike contacts.

Mining, Processing and Environmental Compliance. Niugini Mining
conducts its mining operations at San Cristobal utilizing conventional open pit
mining methods. Ore is processed by heap leaching. San Cristobal operations
are subject to Chilean environmental laws and regulations. See "--
Environmental Matters -- Chile."

RED DOME MINE

General. In 1991, Niugini Mining purchased a 100 percent interest in
the Red Dome gold mine in northern Queensland for approximately $15.5 million
(before working capital adjustments of $2.1 million which resulted in a net
purchase price of $13.4 million). The Red Dome mine is owned by Red Dome Pty.
Ltd., a wholly-owned Australian subsidiary of Niugini Mining. The mine is
located on a 5.6 square mile state-issued block of four mining leases located
84 miles west of Cairns, Queensland, Australia and is accessible by a 44-mile
dirt and gravel road from a state highway. See "-- Property Interests --
Australia." The Company's identifiable assets attributable to the Red Dome
mine as of December 31, 1993, were $37.3 million.

Expansion of the existing Red Dome pit is now underway at an
approximate cost of $24.5 million. The expansion should extend the life of the
mine through 1996. The expansion increased reserves at Red Dome, shown below,
by approximately 227,000 contained ounces of gold and 28 million pounds of
copper. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources."

In November 1993, Niugini Mining announced the discovery of
mineralization at its Mungana project near Red Dome. Prefeasibility studies
are underway to determine whether there is sufficient economically recoverable
mineralization to warrant proceeding further. See "-- Certain Factors
Affecting Reserves, Foreign Investments and Properties."

19
<PAGE> 22
<TABLE>
<CAPTION>
RESERVE DATA DECEMBER 31, 1993
------------ ---------------------------
Net (52.6%) 100%
----------- ----
<S> <C> <C>
Proven/probable ore reserves (000s tons)(1) . . . . . . . . . . . . . . 1,761 3,347

Average gold ore grade (oz/ton) . . . . . . . . . . . . . . . . . . . . .076 .076

Contained gold ounces(000s) . . . . . . . . . . . . . . . . . . . . . . 130 255

Contained pounds of copper (000s) . . . . . . . . . . . . . . . . . . . 18,300 34,800

Recovery factor for gold (%) . . . . . . . . . . . . . . . . . . . . . 95 95
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1993 1992 1991
---------------------- ------------------ ------------------
Net Net Net
OPERATING DATA (56.5%)(2) 100% (56.5%) 100% (56.5%) 100%
-------------- ---------- ---- ------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C>
Production statistics:

Tons of ore milled (000s) . . . . . 662 1,173 652 1,155 513 908

Stripping ratio(3) . . . . . . . . . na na 1.6:1 1.6:1 1.66:1
1.66:1

Mill feed ore grade (oz gold/ton) . .052 .052 .092 .092 .08 .08

Mill recovery factor for gold (%) . 77 77 95 95 94 94

Gold recovered (000s oz) . . . . . . 27 49 58 104 42 74

Silver recovered (000s oz) . . . . . 173 305 256 452 128 226

Copper recovered (000s lbs) . . . . 5,374 9,517 6,855 12,139 3,734 6,612

Cost per equivalent gold ounce(4):

Cash production costs . . . . . . . $199 $199 $202 $202 $270 $270

Taxes, other than income . . . . . . -- -- -- -- 2 2

Depreciation, depletion and
amortization . . . . . . . . . . . . 9 9 51 51 54 54
---- ---- ---- ---- ---- ----
Total operating costs . . . . $208 $208 $253 $253 $326 $326
- ---------------- ==== ==== ==== ==== ==== ====
</TABLE>

(1) This table includes ore reserves resulting from the expansion of the Red
Dome mine pit. The reserves were determined using a cutoff grade of .050
ounce of gold per ton and an assumed gold price of $350 per ounce. See
"-- Certain Factors Affecting Reserves, Foreign Investments and
Properties."

(3) As of December 31, 1993, the estimated stripping ratio is assumed to
average approximately 1.2:1 over the remaining life of the mine. During
1993, there were no mining activities at the Red Dome mine other than
those related to the expansion of the pit.

20
<PAGE> 23
(4) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and are
not directly comparable to selling and operating costs per equivalent
ounce of gold sold. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Results of Operations."
All costs are shown on a per equivalent gold ounce produced basis, with
by-product silver and copper converted to ounces of gold on an equivalent
revenue basis. Cash production costs include mining, processing and other
direct plant costs, but exclude sales expenses, corporate administrative
expenses and other indirect costs. Under the mining lease, Niugini Mining
pays to the State of Queensland an annual royalty equal to the greater of
2 percent of gross sales after deducting A$30,000 or 5 percent of the
operating income that exceeds A$30,000. Payment of such royalty is not
included in cash production costs.

The amount of gold recovered from production at the Red Dome mine
decreased significantly in 1993 from 1992 primarily as a result of processing
lower grade ore which had been stockpiled in anticipation of the expansion of
the mine pit. Gold, silver and copper production is expected to increase in
1994 as a result of mining the expanded mine pit, scheduled to commence in
mid-1994. Unit cash production costs remained approximately equal in 1993 as
compared to 1992 and are expected to decrease in 1994. Costs fluctuate
depending on exchange rates between U.S. and Australian dollars. During 1993,
the Australian dollar fluctuated from a low of one Australian dollar to 0.64
U.S. dollars to a high of one Australian dollar to 0.72 U.S. dollars. See "--
Explanatory Note Regarding Exchange Rates." Depreciation, depletion and
amortization expense per ounce decreased during 1993 as compared to 1992 as a
result of the increased reserve base related to the expansion of the Red Dome
pit. Total unit operating costs, however, are expected to increase in 1994 due
to increased depreciation, depletion and amortization costs.

Geology. The Red Dome deposit is hosted by Siluro-Devonian sedimentary
rocks of the Chillagoe Formation and is located between one-half and one and
one-half miles to the east of the Palmerville Fault, which is a major regional
feature that marks the western boundary between this unit and the Precambrian
Dargalong Metamorphics to the west. The Chillagoe Formation consists
predominantly of fossiliferous limestone and chert with intercalated beds of
quartz greywacke and siltstone. At the mine, narrow porphyritic rhyolite dikes
were intruded into a calcareous rich unit of the Chillagoe Formation and
produced skarns. Detailed electron microprobe analysis has indicated that the
gold occurs predominantly as isolated grains of native gold either as
inclusions within sulfides or as free gold associated with silicates. Electrum
is minor and has been identified only in the retrograde skarn.

Mining, Processing and Environmental Compliance. Mining operations at
Red Dome are conducted utilizing conventional open pit methods. The open pit
mine has been in operation since 1986, first utilizing heap leach processing
and later adding a milling facility. Production is currently from stockpiled
ore. Ore is processed by heap leach, flotation and carbon-in-leach methods.
Red Dome operations are subject to environmental laws and regulations including
reclamation requirements under Queensland legislation. See "-- Environmental
Matters -- Australia."

LIHIR PROJECT

The Lihir Project is located on the east coast of Lihir Island, 375 miles
northeast of

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<PAGE> 24
mainland PNG. Niugini Mining owns a 20 percent interest (of which 12 percent
is a carried interest and 8 percent is a contributing interest) in a
state-issued Lihir Exploration License covering the Lihir project. The current
term of the Lihir Exploration license expires March 31, 1994. See "-- Property
Interests -- Papua New Guinea." Niugini Mining's interest is subject to a
joint venture agreement with a subsidiary of RTZ Corporation plc ("RTZ"). RTZ
is the manager for the Lihir project. The Company's identifiable assets
attributable to the Lihir project as of December 31, 1993, were $135.2 million.

The manager's estimate of minable sulfide reserves at the Lihir project
has recently been increased to 104 million metric tons of ore with an average
ore grade of 4.37 grams per metric ton, or approximately 14.6 million contained
gold ounces. Previous estimates were 89.3 million metric tons with an average
ore grade of 4.77 grams per metric ton, or approximately 13.7 million contained
gold ounces. See "-- Certain Factors Affecting Reserves, Foreign Investments
and Properties."

Development of the Lihir project is contingent upon the Lihir
Exploration License being converted to a Special Mining Lease. Issuance of the
Special Mining Lease requires approval by the PNG government. The PNG
government is expected to issue the Special Mining Lease subject to certain
conditions (see below). Renewal of the Lihir Exploration License beyond its
current term is expected and is part of the current discussions with the PNG
government regarding the issuance of the Special Mining Lease.

On September 25, 1993, an agreement in principle was reached between
the joint venturers and the PNG government to form a new company to be named
Lihir Gold Limited ("LGL") for development of the Lihir project. Proceeding
with the Lihir project through the LGL structure requires the approval by the
PNG Cabinet which is currently reviewing the proposal. Pursuant to the terms
of the agreement in principle, the Lihir project would be owned, developed and
financed by LGL. A series of different transactions, described below, are
proposed, first, to change the ownership profile of the joint venture, second,
to transfer ownership of the Lihir project to LGL and third, to raise equity
funding through a public share offering of LGL shares. LGL would also raise
significant funds through project financing in order to complete development.
The following transactions would take place in connection with the issuance by
the PNG government of a Special Mining Lease and prior to project financing
being available:

(1) The PNG government would acquire a 30 percent joint venture interest,
pro rata from RTZ and Niugini Mining ("NML" for purposes of tables
below). The PNG government would pay RTZ and Niugini Mining 30 percent
of the aggregate historic costs relating to the Lihir project to
acquire its interest. Total historic costs are presently estimated at
approximately $138 million. Niugini Mining's pro rata portion of the
payment received from the PNG government would be based on its current
8 percent contributing interest. This transaction would give rise to
the following ownership percentages:

RTZ: 56% joint venture interest
NML: 14% joint venture interest
PNG: 30% joint venture interest

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<PAGE> 25
(2) Niugini Mining would acquire a 16 percent joint venture interest from
RTZ and the Niugini Mining carried interest would terminate, resulting
in the following ownership percentages:

RTZ: 40% joint venture interest
NML: 30% joint venture interest
PNG: 30% joint venture interest

(3) The joint venturers would then transfer their interests to LGL, the
shares of which would be owned in the same proportions as set out in
(2) above.

(4) LGL would issue shares of common equity to new investors through an
initial public offering. The terms of the public offering would be
subject to market conditions, but dilution of the LGL shareholders
would be pro rata. Based on the assumption that the public offering
results in gross proceeds of approximately $400 million, dilution would
be expected to be in the range of 25 percent to 40 percent. Niugini
Mining's interest in LGL would thereby be expected to be reduced to
between 18 percent and 22.5 percent, of which BMG's attributable
interest would be between 9 and 11.25 percent. For example, if the
public acquires 33 1/3 percent of LGL, the ownership interests would
become:

RTZ: 26 2/3% shareholding
NML: 20% shareholding
PNG: 20% shareholding
Public: 33 1/3% shareholding

The terms of the transaction set forth in (2) above in which Niugini
Mining would acquire an additional 16 percent interest from RTZ (originally
agreed to in August 1993) were modified by RTZ and Niugini Mining in February
1994. This agreement gives Niugini Mining the right to acquire the additional
interest for $3 million cash per percentage point, or $48 million. The
agreement is contingent on, among other things, the issuance of the Special
Mining Lease. To partially fund the acquisition of the additional joint
venture interest, Niugini Mining issued 5.8 million common shares in a public
offering in December 1993 which provided net proceeds of approximately
$19.1 million. Other Niugini Mining funding necessary for the acquisition is
expected to come from a combination of debt and Niugini Mining's working
capital.

The manager's estimate of future capital costs for development of the
Lihir project is $625 million. This amount is expected to be financed from an
additional issuance of $31 million of equity to be subscribed pro rata by the
joint venturers, the proceeds of an initial public offering by LGL, anticipated
to be approximately $400 million (see above), and a $300 million limited
recourse loan by LGL. Niugini Mining expects to fund its 30 percent portion of
the proposed $31 million of equity from its working capital. The limited
recourse borrowing would require a completion guarantee under which RTZ,
Niugini Mining and the PNG government would severally guarantee debt until
completion of development. Political risk insurance is anticipated to be
acquired in order to cover loan defaults resulting from expropriation,
transferability/convertibility blockages and war/civil strife. See
"Management's

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<PAGE> 26
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

The Lihir project would consist of an open pit mine, a crushing and
grinding circuit, a pressure oxidation circuit, a carbon-in-leach circuit, gold
smelting facilities to produce gold dore, and associated infrastructure. Based
on the manager's current proposals, the milling facility would process
approximately 8,500 metric tons of ore per day. The mine is expected to
produce an average of approximately 600,000 ounces of gold per year for the
first 12 years of production. The Lihir ore is refractory in nature, requiring
complex processing methods, including pressure oxidation. The ore body is
associated with an active geothermal system, and an extensive dewatering and
geothermal control system will be necessary to avoid problems with hot water or
steam during mining. The process recovery factor is estimated to be
approximately 92 percent. An environmental plan is currently being reviewed by
the PNG government. See "-- Environmental Matters -- Papua New Guinea." Over
the first 15 years of operations, the manager's estimate of total cash
operating costs is $209 per ounce and, over the expected 37-year life of the
mine, is $228 per ounce.

Discussions are continuing among the PNG government and the joint
venturers regarding the timing and conditions of project development and the
planned restructuring of equity interests. As the non-operating minority
partner, Niugini Mining may have limited ability to affect the outcome of these
matters. The PNG government is expected to issue the Special Mining Lease for
the Lihir project after landowner negotiations are completed, all necessary
statutory approvals are obtained and the PNG Cabinet approves the LGL
structure. Development of the Lihir project is also contingent on the
successful completion of the initial public offering of LGL's shares and
closing of the Lihir project financing. There is no assurance that the PNG
Cabinet will approve the proposal, that the Special Mining Lease will be issued
by the PNG government or that the initial public offering and Lihir project
financing will be successfully completed as planned. Should it be determined
that development cannot proceed as contemplated, the Company may be required to
write down part or all of its investment in the Lihir project.

EXPLORATION

In addition to its mining operations, Niugini Mining conducts
exploration and evaluation activities in search of precious metals in countries
including Papua New Guinea, Chile, Malaysia, Thailand and Australia. For
additional information concerning Niugini Mining's exploration expenditures,
see "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

SALES AND HEDGING ACTIVITIES

Sales. The Company primarily produces dore at its mines which it sells
under sales and/or refining agreements. It also produces concentrates
containing gold, copper and silver at the Red Dome mine. Two buyers of
production from the Company each accounted for more than 15 percent of the
Company's total 1993 sales. Because of the availability of several alternative
buyers, the Company believes that it would suffer no material adverse effect
should it cease to market its gold, silver and copper through its present
buyers.

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<PAGE> 27
The table under "Introduction" sets forth information regarding the
percent of total gross revenues of the Company attributable to each of its
mines. Sales in Australia are denominated in either U.S. or Australian dollars
at the Company's election. See "-- Explanatory Note Regarding Exchange Rates"
and Note 12, "Major Customers and Export Sales," and Note 13, "Geographic
Segment Information," of Notes to Consolidated Financial Statements under Item
8 of Part II herein.

Hedging. The Company may employ a number of hedging techniques with
the objective of mitigating the impact of downturns in the gold market. The
Company also engages in limited hedging of its copper production. Potential
hedging techniques used by the Company include selling and/or delivering
against fixed forward and "spot deferred" forward sales contracts and entering
into various "put" options with unaffiliated parties. Fixed forward sales
contracts require the future delivery at a specified price on a specified date.
Forward sales contracts that are made on a spot deferred basis allow the
Company to defer the delivery of gold under the contract to a later date at the
original contract price plus the prevailing premium at the time of deferral, as
long as certain conditions are satisfied. Various factors influence the
decision to close a spot deferred contract or roll the contract to a later
date.

Future decisions with respect to hedging will depend upon gold market
conditions and management's assessment of the potential impacts of gold price
risk. Volatility in the price of gold can have a significant effect on the
Company's sales revenue and income. The volatility can be reduced by the use
of forward sales and other hedging techniques, but these techniques may at the
same time reduce the Company's ability to fully realize the benefits of
increases in gold prices.

The forward sales contracts associated with Red Dome gold production
are denominated in Australian dollars. The value of Red Dome's forward sales
contracts will fluctuate depending on the exchange rate between U.S. and
Australian dollars. During 1993, the Australian dollar fluctuated from a low
of one Australian dollar to 0.64 U.S. dollars to a high of one Australian
dollar to 0.72 U.S. dollars. See "-- Explanatory Note Regarding Exchange
Rates." For more information regarding the Company's hedging activities, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and Note 15, "Forward Sales and
Hedging," of Notes to Consolidated Financial Statements under Item 8 of Part II
herein. For more information concerning gold prices and the gold market, see
"-- Gold Price Volatility."

CERTAIN FACTORS AFFECTING RESERVES, FOREIGN INVESTMENTS AND PROPERTIES

The ore reserve figures presented herein are estimates and no assurance
can be given that the indicated level of recovery of gold, silver and copper
will be realized. Most of the ore reserve figures presented herein were
calculated using a gold price ranging from $350 to $380 per ounce. Market
price fluctuations of gold, silver and copper, as well as increased production
costs or reduced recovery rates, may render ore reserves uneconomic and may
ultimately result in a restatement of ore reserves. See "-- Gold Price
Volatility." Additionally, changes in the various assumptions on which the
reserve estimates are based, such as the average gold ore grade or the cutoff
grade, may result in increases or decreases

25
<PAGE> 28
in the reserve estimates from year to year. Reserve estimates for properties
that have not yet commenced production may require revision based on actual
production experience. Moreover, many factors relating to each mine, such as
the design of the mine plan, unexpected operating and processing problems,
increases in the stripping ratio and the complexity of the metallurgy of an ore
body, may adversely affect cash production and operating costs of a project.
Reserves for the Lihir project, as well as projected cost and production
estimates, are based on information provided by the manager. Such information
has been reviewed by, but not independently confirmed by, the Company. Neither
reserves nor projections of future operations should be interpreted as
assurances of the economic life or profitability of future operations.

The Company's foreign operations, which include significant operations
in Australia, Latin America and the South Pacific, are subject to the risks
normally associated with conducting business in foreign countries, including
foreign exchange controls and currency fluctuations, limitations on the
repatriation of earnings, foreign taxation, labor disputes, civil disturbances
and uncertain political and economic environments as well as risks of war and
civil disturbances or other risks which may limit or disrupt production and
markets, restrict the movement of funds or result in the deprivation of
contract rights or the taking of property by nationalization or appropriation
without fair compensation. Although the Company has not experienced any
significant problem in foreign countries arising from nationalistic policies,
political instability, economic instability, labor disputes, civil disturbances
or currency fluctuations or restrictions, there can be no assurance that such
problems will not arise in the future.

A significant portion of the Company's reserves and production come
from Inti Raymi's Kori Kollo mine in Bolivia. Risks associated with conducting
business in Bolivia are therefore significant to the Company. For several
decades, Bolivia experienced periods of slow or negative growth, high
inflation, large devaluations of the Bolivian currency and imposition of
exchange controls. Limited availability of foreign exchange required the
Bolivian government to restructure its foreign currency denominated
indebtedness. Since 1985, Bolivian governments have pursued economic
stabilization and reform policies which have reduced significantly inflation
and budget deficits and which have eliminated exchange controls. There are
currently no restrictions on the transfer of funds out of Bolivia. Since 1986,
the exchange rate for Bolivian currency has been relatively stable. A
recurrence of adverse economic conditions, high levels of inflation, the
imposition of exchange controls or restrictions on payments to non-Bolivians
could adversely affect Inti Raymi's ability to pay dividends or repay funds
borrowed outside Bolivia and adversely affect the Company's financial condition
and results of operations.

Since 1982, Bolivian governments have been elected through a
democratic process as required under the Bolivian Constitution. The Company
considers the Bolivian government to be stable and its current relations with
the government to be good. However, should there be a deterioration in
Bolivia's political stability or an adverse change in the Bolivian government's
policy towards foreign-owned companies in Bolivia, the Company's financial
condition and results of operations could be adversely affected. Although
Bolivia has not suffered from civil disturbances, acts of terrorism and
sabotage to the same extent as neighboring South American countries, there
can be no assurance that

26
<PAGE> 29
the occurrence of civil unrest or terrorist activities against Inti Raymi's
facilities will not occur. BMG has, in connection with its investment in Inti
Raymi, obtained political risk insurance from the U.S. Overseas Private
Investment Corporation. This insurance provides coverage of $15 million for
expropriation, $25 million for inconvertibility and $25 million for political
violence. The policy is renewed annually at the option of BMG and is expected
to be available for the life of the Kori Kollo mine.

The Company also has a significant investment in the Lihir project
located in PNG. PNG achieved independence in 1975. Since 1975, PNG has
maintained a policy favoring direct foreign investment in general, and foreign
investment in the mining sector in particular. The PNG Constitution and major
statutes governing foreign investment also provide significant safeguards for
investors and lenders. The Investment Promotion Act assures investors the
right to remit after-tax profits and make debt-service and supplier payments.
The Investment Promotion Act also provides that expropriation will not occur
without adequate compensation. While the Company does not expect civil unrest
from the inhabitants of Lihir Island, there can be no assurance that acts of
civil unrest against the Lihir project would not occur. Furthermore, a
deterioration in PNG's political stability or an adverse change in the PNG
government's policy towards foreign-owned companies in PNG could adversely
affect the Lihir project and the Company's financial condition.

Foreign operations and investments may also be adversely affected by
laws and policies of the United States affecting foreign trade, investment and
taxation.

PROPERTY INTERESTS

UNITED STATES

Mineral interests in the United States are owned variously by federal
and state governments and private parties. When a prospective mineral property
is owned by a private party or by a state, some type of property acquisition
agreement is necessary in order for the Company to explore or develop such
property. Generally, these agreements take the form of long-term mineral
leases under which the Company acquires the right to explore, develop and
operate the property in exchange for an up-front cash payment, periodic cash
payments during the exploration and development phase and/or a royalty during
production (usually expressed as a percentage of net smelter returns or net
profits derived from the leased properties). Other forms of acquisition
agreements include exploration agreements coupled with options to purchase and
joint venture agreements. Under a typical joint venture agreement, one joint
venture participant manages the property, with both joint venture participants
contributing to the costs of development and operations and sharing in the
production from the property in proportion to their respective interests.
Another form of joint venture agreement gives the Company the right to earn an
undivided interest in a mineral property owned by another joint venture
participant upon the performance of a specified amount of exploration and
development on the property.

In addition to the acquisition of mineral rights held by states or
private parties, the Company also may acquire rights to explore for and produce
minerals on federally owned lands. This acquisition is accomplished through
the location of unpatented mining claims

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<PAGE> 30
(lode, placer and millsite) upon unappropriated federal land pursuant to
procedures established by the General Mining Law of 1872, the Federal Land
Policy and Management Act of 1976 and various state laws (or the acquisition of
previously located mining claims from a private party as described above).
These laws generally provide that a citizen of the United States, including a
corporation, may acquire a possessory right to explore for and develop valuable
mineral deposits discovered upon unappropriated federal lands, provided that
such lands have not been withdrawn from mineral location. The amount of public
lands open to mineral location under the federal mining laws is continually
being limited by the withdrawal or segregation of portions of such lands for
other purposes. Withdrawn lands would include, for example, lands included in
national parks and military reservations and lands designated as part of the
National Wilderness Preservation System. Withdrawal and segregation programs
may substantially limit the amount of land in the Western United States that is
available for the Company's exploration efforts.

The location of a valid mining claim on federal lands requires the
discovery of a valuable mineral deposit, the erection of appropriate monuments,
the posting of a location notice at the point of discovery in accordance with
federal law and the filing of a notice or certificate of location and a map
with the BLM and the real property recording official of the county in which
the claim is located. A certain type of mining claim, a millsite claim, may be
located on non-mineralized lands. Failure to follow the required procedures
may render the mining claim void. If the statutes and regulations for the
location of a mining claim are complied with, the locator obtains a valid
possessory right to explore, develop and produce minerals from the claim. This
property right can be freely transferred and is protected against appropriation
by the government without just compensation. Also, the claim locator acquires
the right to obtain a patent (or deed) conveying fee title to his claim from
the federal government upon payment of fees and compliance with certain
additional procedures.

The interests represented by unpatented mining claims possess certain
unique risks not associated with other types of property interests. For
example, in order to maintain each unpatented mining claim, the claimant must
pay fees and timely file documents with the United States Department of the
Interior. Failure to make the required payments or federal filing constitutes
abandonment of the claim. Further, because mining claims are often located
with less than sophisticated surveying techniques, difficulty may arise in
determining the validity and ownership of specific mining claims. Moreover,
under applicable regulations and court decisions, in order for an unpatented
mining claim to be valid against a governmental challenge, the claimant must be
able to prove that the mineral deposit on which the claim is based can be mined
at a profit. Thus, it is conceivable that, during times of declining metal
prices, claims that were valid when located could be later invalidated by the
federal government.

The validity of unpatented mining claims, which constitute most of the
Company's undeveloped property holdings in the United States, is often
uncertain and may be contested by the federal government and third parties.
Although the Company has attempted to acquire satisfactory title to its
undeveloped properties, the Company, in accordance with mining industry
practice, does not generally obtain title opinions or title insurance until a

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<PAGE> 31
decision is made to develop a property, with the attendant risk that some
titles, particularly titles to undeveloped properties, may be defective.

Legislation has been passed by the U.S. Senate ("S.775") and the U.S.
House of Representatives ("H.R.322") which would amend or replace the General
Mining Law under which the Company holds claims on public lands. A compromise
bill is expected to be developed by a conference committee in 1994. As
written, S.775 proposes a 2 percent royalty on the value of minerals measured
at the point of extraction and H.R.322 proposes an 8 percent royalty on,
effectively, gross revenue. H.R.322 also proposes new environmental standards,
additional reclamation requirements and extensive new procedural steps which
could result in delays and additional expenditures for all phases of mining
activity. Approximately 40 percent of the Reona reserves and 80 percent of the
Crown Jewel ore body are on public lands and could be subject to the proposed
royalties. These projects, as well as reclamation and closure activities at
the Battle Mountain complex, could be subject to extensive additional
permitting and environmental requirements. The extent of change to the
existing law is not presently known; however, it is expected to be unfavorable.
The Company cannot yet predict the impact of any such change on its U.S.
activities. Assuming current gold prices, the adoption of either version of
the new mining law, as currently written, is not expected to render uneconomic
any of the Company's existing operating mines or development projects.

BOLIVIA

Mineral interests in Bolivia are under the domain of the federal
government. Concessions for exploration and mining are issued pursuant to the
Bolivian Mining Code. Inti Raymi owns a group of concessions which include the
Kori Kollo mine and operating facilities.

CHILE

Mineral interests in Chile are under the domain of the federal
government, which issues mining claims pursuant to the Chilean Mining Code.
Niugini Mining, through subsidiaries, owns the group of mining concessions
including the San Cristobal mine and operating facilities.

AUSTRALIA

Most of the Company's exploration properties in Australia are located
in Queensland and in Western Australia. Much of this land is "Crown land" held
under pastoral leases by third parties. The Company holds the lands under
mining leases, authorities to prospect and exploration licenses. The Pajingo
mine and the Red Dome mine and associated operating facilities are on lands
held pursuant to mining leases issued by the State of Queensland.

Similar to procedures in the United States, a lease applicant must
stake the area of a proposed mining lease. A subsequent application for a
mining lease must be filed with officials who will make a recommendation to the
state to grant or refuse the lease application. Each state imposes various
obligations on tenement holders and generally

29
<PAGE> 32
requires holders to undertake a minimum work program or to make certain minimum
exploration expenditures during each year of the permit. The duration of
permits varies from state to state.

In June 1992, the Supreme Court of Australia recognized, in the case
Mabo v. Queensland, a new form of real property title in Australia referred to
as "native title," relating to aboriginal rights. The court held that "native
title" may exist wherever such title has not been extinguished by a superseding
grant from the government. The court also held that "native title" may also
co-exist with certain interests granted by the government, such as mining
exploration. Since the Mabo decision, the federal government and a number of
state governments have attempted to formulate a legislative response that will
validate titles threatened by native title claims without compromising
aboriginal rights. The Company believes that the Mabo decision will neither
affect the Company's Pajingo or Red Dome mine nor have an adverse impact on the
Company's exploration properties in Australia. However, the Mabo decision has
increased the risk that title to certain exploration properties may be
challenged or invalidated in the future or that title claimants will have the
right to negotiate compensatory terms with the Company.

PAPUA NEW GUINEA

Exploration and mining activities in PNG are regulated by the Mining
Act and administered by the Department of Minerals and Energy. Exploration
rights in PNG are held pursuant to exploration licenses which are granted by
the PNG government and typically run for two-year periods renewable at the
discretion of the government. Before construction and mining operations can
begin, an exploration license must be converted, at the government's
discretion, to a Special Mining Lease which may be granted for an initial term
of 40 years. As part of the conversion of an exploration license to a Special
Mining Lease, the holder must submit for the government's approval a Proposal
for Development and negotiate a Mining Development Contract and compensation
agreements with affected landowners. The government has a policy of acquiring
a participatory interest in new mining ventures. Although the terms of the
government's acquisition may be subject to negotiation, the government has
acquired no more than a 30 percent interest in a new mining venture and has
customarily paid its elected percentage of historic project costs at the time
it exercises its right to acquire the interest. Provincial and landowner
participation in the project is expected to occur through the participatory
interest acquired by the PNG government. See "-- Niugini Mining Limited --
Lihir Project" for the current status of the regulatory process for the Lihir
project.

ENVIRONMENTAL MATTERS

Set forth below is a summary description of various environmental
matters affecting the Company, including various domestic and foreign national,
state and local legislation and regulations governing, among other things,
mineral exploration, development, production and refining. Environmental laws
and regulations in most countries allow the imposition of civil and criminal
penalties for violations. The Company believes it is in substantial compliance
with all material aspects of such applicable laws and regulations. The Company
is not aware of any material environmental constraint affecting its existing
mines or development

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<PAGE> 33
properties that would preclude the economic development or operation of any of
the Company's mines or projects or have a material adverse effect on the
Company's financial condition or results of operations.

UNITED STATES

General. The Company is required to obtain a full range of
environmental permits and approvals of reclamation plans to develop new
properties and maintain such permits for ongoing operations and for closure,
post-closure, and reclamation operations. Existing and possible future
legislation and regulations could cause additional expense, capital
expenditures, restrictions and delays in the development, operation and closure
of the Company's properties, the extent of which cannot be predicted by
management of the Company. The Company expects environmental constraints to
become increasingly strict and that the cost of compliance will continue to
grow. In the context of environmental permitting, including the approval of
reclamation plans, the Company must comply with standards and regulations which
may entail greater or lesser costs and delays depending on the nature of the
activity to be permitted and how stringently the regulations are implemented by
the permitting authority. It is possible that the costs and delays associated
with the compliance with such standards and regulations could become such that
the Company would not proceed with the development or operation of a mine.

Each of the Company's mining properties has many environmental
controls. The principal environmental control facilities at the Company's heap
leaching operations include engineered heap leach facilities to contain process
fluids. The principal environmental control facilities at the Company's
milling operations consist of detoxification circuits to process plant effluent
and tailings facilities to contain the processed effluent. These facilities
are constructed as an integral part of processing facilities. The Company will
also incur reclamation expenditures as reserves at existing mines are exhausted
and the facilities are closed. The Company is accruing reserves over the lives
of the respective mines to cover reclamation expenditures. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

Laws and Regulations. The Company is subject to federal, state and
local laws and regulations relating to the protection of the environment. At
the federal level, these laws include, among others, the Resource Conservation
and Recovery Act, the Clean Water Act, the Clean Air Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the National
Environmental Policy Act of 1969, the Endangered Species Act of 1973, and the
Federal Mine Safety and Health Act of 1977.

The Resource Conservation and Recovery Act ("RCRA") RCRA regulates the
generation, transportation, treatment, storage and disposal of hazardous
wastes, special wastes, and some non-hazardous wastes. Mining wastes are
currently exempt to a limited extent from the extensive set of Environmental
Protection Agency ("EPA") regulations governing hazardous waste. The EPA is
proceeding with development of a program to regulate mining waste pursuant to
its solid waste management authority under RCRA. Under this program, certain
processing and other wastes, as well as high volume extraction and
beneficiation wastes, will eventually be regulated by the EPA. In this
connection, RCRA is currently pending

31
<PAGE> 34
legislative re-authorization and the EPA is studying regulations concerning how
mine wastes should be managed and regulated. If the Company's mining wastes
are treated as hazardous wastes, material expenditures would be required for
the construction of additional waste disposal facilities and possible other
corrective action measures.

The Clean Water Act ("CWA") CWA controls, among other things, the
discharge of effluent into navigable surface waters by requiring effluent
discharge permits. The EPA promulgated stormwater regulations in 1991 which
regulate stormwater discharge at all United States mining operations. BMG has
applied to state authorities and received general permits for stormwater
discharges under relevant state and federal regulations. Because of the nature
of the stormwater regulations, it is difficult to identify the exact terms and
conditions which will have to be satisfied in order to be in compliance with
such regulations. The Company, however, does not anticipate that such
compliance will have a material adverse effect on the Company's financial
position or results of operations.

The Clean Air Act ("CAA") CAA controls, among other things, fugitive
dust arising out of the Company's operations. Mining operations produce
fugitive dust, primarily from crushing operations and vehicular traffic over
unpaved roads. To control fugitive dust, dust suppressants and water are
periodically sprayed on the unpaved roads. Certain environmental groups have
contended in several pending court cases that fugitive dusts emissions from new
or expanded surface mining operations should be subject to additional
regulation, which could substantially limit the ability of the Company and
other companies engaged in similar mining operations to develop new surface
mining operations or maintain or expand existing operations. Emission
limitations are a matter of individual state air quality control implementation
plans. Both federal and state law impose substantial penalties for violation
of applicable requirements.

The Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA") CERCLA, also know as the "Superfund" law, imposes liability,
without regard to fault or the legality of the original conduct, on certain
classes of persons that are considered to have contributed to the release of a
"hazardous substance" into the environment. These persons include the owner or
operator of the disposal site or sites where the release occurred and companies
that disposed or arranged for the disposal of the hazardous substances found at
the site. Persons who are or were responsible for releases of hazardous
substances under CERCLA may be subject to joint and several liability for the
costs of cleaning up the hazardous substances that have been released into the
environment and for damages to natural resources. In the ordinary course of
the Company's operations, substances may be generated which fall within the
definition of "hazardous substances."

The National Environmental Policy Act of 1969 ("NEPA") Under NEPA, if
any project is to be undertaken that would significantly affect the quality of
the environment and that would require a permit or approval from a federal
agency, a detailed environmental impact statement ("EIS") or an environmental
assessment may be required by the federal agency. It is possible that new
projects and extensions of many of the Company's existing projects would
require NEPA compliance. The effect of NEPA may be to delay or prevent
construction of new facilities or to alter their location, design or method
of construction. Similar state laws also

32
<PAGE> 35
may be applicable. Furthermore, the NEPA process often engenders citizen
involvement which can result in substantial delays in the permitting process.

The Endangered Species Act of 1973 ("ESA") ESA is designed to protect
certain species of flora and fauna that have been identified by the government
as endangered or threatened. No federal agency may grant permission to develop
mines unless it insures that the action will not jeopardize or adversely affect
the designated critical habitat of the species. Many of the Company's
operations require federal agency approval and are subject to ESA requirements.
A finding by a federal agency that proposed mining operations could jeopardize
or adversely affect an endangered species could impair the Company's ability
to develop a project. Furthermore, the ESA process often engenders citizen
involvement which can result in substantial delays in the permitting process.

The Federal Mine Safety & Health Act of 1977 ("FMSHA") Mine operators
must comply with FMSHA, as amended, which is enforced by the Mine Safety and
Health Administration ("MSHA"), an agency within the Department of Labor. The
Company's operations are subject to regulation and inspections by MSHA.

The various states in which the Company operates have groundwater
protection statutes and regulatory programs. These laws vary from state to
state. As a general rule, state groundwater protection programs regulate the
discharge of waste materials that could adversely impact groundwater which is
capable of beneficial use. The groundwater programs typically require site
discharge permits, spill notification and corrective action measures, and
impose civil and criminal penalties for violations. It is not uncommon for
neighboring landowners and other third parties to file claims for personal
injury arising out of contamination events.

Changes in the aforementioned federal and state environmental laws and
regulations, the enactment or promulgation of new laws and regulations or the
imposition of new requirements pursuant to such laws or regulations could
require capital expenditures, increases in operating costs and delays or
interruptions of operations, render certain mining operations uneconomic and
prevent or delay the development of new operations. See "-- Property Interests
- -- United States."

Battle Mountain Complex. BMG has been issued a water pollution control
permit for the Battle Mountain complex project facilities from the Nevada
Division of Environmental Protection. A modification of this permit for the
Reona project has also been approved. The permit provides the framework for
the development of a "final closure plan." BMG has applied for a reclamation
permit and has been issued a general stormwater permit covering the Battle
Mountain complex area. Certain activities undertaken as part of operations at
the Reona project (and at the Phoenix project if a development decision is made
with regard to such project) will eliminate certain reclamation costs. If the
Phoenix project does not proceed, reclamation expenditures could be
significantly higher than current estimates. Laws and regulations applicable
to these permits have been amended during the past few years, and it is
difficult to ascertain the exact terms and conditions which will be required
thereunder. Potentially adverse site characterization results or the
imposition by

33
<PAGE> 36
regulatory authorities of unanticipated reclamation standards could
substantially increase future reclamation requirements and expenditures. Based
on data collected to date, management does not expect that potential future
adverse site characterization results will have a material adverse effect on
the Company's financial condition. Reclamation obligations could also be
impacted by proposed federal legislation to amend or replace the General Mining
Law. See "-- Property Interests -- United States" and see "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

San Luis Mine. After encountering elevated levels of cyanide in the
tailings facility early in 1992, BMG took steps during 1992 to reduce the
cyanide levels in the tailings facilities and installed a new detoxification
unit at San Luis which has been operating since late 1992.

Crown Jewel Project. The State of Washington, site of the proposed
Crown Jewel mine, has a comprehensive regulatory regime controlling the
development and operation of new mining operations. Permits and approvals must
be obtained from federal, state and local agencies before the mine can be put
into operation. The State Environmental Policy Act mandates an exhaustive
review of the environmental impact of the project prior to permit issuance and
before construction can begin. In addition, since the project is located
partially on federal land, NEPA compliance is necessary, including the
preparation of an EIS which is also used to satisfy the State Environmental
Policy Act requirements. During this permitting process, as required by law,
baseline studies of all aspects of the mine and its impact on the surrounding
environment are conducted. Approximately two dozen permits will be required
for the project. The project is moving slowly through the permitting process.
The delays in obtaining permits for the Crown Jewel project relate primarily to
delays in regulatory approvals for certain site data collection activities and
the time taken for agency development of certain wildlife studies. The
duration of the permitting effort is difficult for the management of BMG to
predict since it is contingent upon many variables not within BMG's control,
including administrative and judicial appeals, and inter-governmental
coordination. The State of Washington legislature has recently passed
legislation which will impact environmental compliance at the Crown Jewel
project. See "-- Battle Mountain Gold Company -- Crown Jewel Project."

BOLIVIA

In 1992, the Bolivian legislature adopted environmental legislation
applicable to the mining industry. The legislation directs the Ministry of
Mining and Metallurgy and the National Environmental Department to establish,
through regulations, the appropriate standards applicable to mining activities.
Such regulations are in the process of being prepared. After the regulations
become effective, Inti Raymi would have a period of time, not to exceed five
years, within which to come into compliance, if necessary. The financial
impact of such legislation on Inti Raymi's operations cannot be accurately
assessed at this time, but the Company does not expect the legislation to have
a material adverse effect on the Company's financial condition or results of
operations.

34
<PAGE> 37
CHILE

Environmental legislation was recently approved by the Chilean
legislature and enacted into law. Regulations in connection with the
legislation have not been published. The legislation is expected to impact
mining activities in Chile. However, at this time, the Company cannot
accurately assess the impact on Niugini Mining's San Cristobal operations or
the Company's exploration activities in Chile.

AUSTRALIA

The mining industry in Australia is subject to extensive state
legislation with respect to environmental protection. In particular, such
legislation requires the reduction or elimination of the adverse effects of
wastes generated by extraction and processing operations. Accordingly, mine
and plant designs and extraction and processing operations are subject to such
legislative requirements, which typically entail compliance with applicable
environmental criteria or review processes, the obtaining of various permits,
licenses and authorizations from various governmental agencies, and, under
certain circumstances, the preparation of environmental impact reports.

In addition to complying with various environmental protection
statutes, both the Pajingo and Red Dome mines in Queensland are required to
obtain plan of operations approvals from the Minister of Mines pursuant to the
Mineral Resources Act. When approved, the plan of operations becomes part of
the conditions of the mining lease issued by the state. The plan of operations
at the Pajingo and Red Dome mines have been approved, including an approved
Environmental Management Overview Strategy, which covers environmental
protection and rehabilitation requirements.

PAPUA NEW GUINEA

Mining operations in PNG are subject to comprehensive environmental
regulations pursuant to legislation requiring the preparation of an EIS and
legislation setting environmental standards and approval requirements for
activities which may affect air, land or water.

The Lihir project will be subject to stringent environmental standards
set forth in the following PNG legislation: the Environmental Planning Act,
the Water Resources Act, the Dumping of Wastes at Sea Act, and the
Environmental Contaminants Act. Special emphasis has been given to minimize
the impact of the Lihir project on the inhabitants of Lihir Island. Tailings
would be discharged into the ocean where the natural alkalinity of the seawater
is expected to neutralize the acidity of the tailings. Hot water from the
mine's dewatering and geothermal control system would also be discharged into
the ocean. As the Lihir project's useful economic life draws to a close, a
final reclamation plan would be prepared. Final reclamation would include the
removal of buildings and equipment and re-contouring and revegetating disturbed
lands and any residual stockpiles. The environmental plan for the proposed
Lihir project is currently being reviewed by the PNG government.

35
<PAGE> 38
TAXES

UNITED STATES

The Company is subject to federal income tax by the United States on
its worldwide earnings, although earnings of the Company's foreign subsidiaries
are not generally subject to tax until repatriated to the United States. While
the United States allows a credit for foreign income taxes paid, the
limitations on such credit may substantially reduce or eliminate the benefit of
the credit. The top marginal U.S. statutory corporate rates are presently
35 percent for regular tax and 20 percent for alternative minimum tax.
Alternative minimum taxes paid are available as credits against regular tax in
subsequent years. At December 31, 1993, the Company believes that it had
approximately $5.8 million of alternative minimum tax credits available on an
indefinite carryforward basis, and approximately $17.2 million of cumulative
regular tax benefit that were derived from past net operating losses, available
to offset future U.S. federal income tax. These benefits begin to expire in
2007. These amounts are subject to adjustment upon a subsequent audit by the
Internal Revenue Service. The Company is also subject to state and local taxes
in jurisdictions in which it is engaged in business operations.

BOLIVIA

The Bolivian legislature amended its Mining Code to change the
corporate tax structure applicable to Bolivian mining operations to include a
mining income tax. Pursuant to certain grandfather provisions under the
Bolivian Mining Code, Inti Raymi is subject to a 3 percent royalty which is
assessed on gold sales. Starting in late 1999, Inti Raymi is expected to be
subject to a mining income tax at a 30 percent rate and no royalty.

Inti Raymi did not pay any dividends in 1993. Future dividends will be
subject to a 13 percent Bolivian withholding tax. Inti Raymi generally pays
Bolivian Value Added Tax on all purchases and imports and subsequently claims a
refund from the Bolivian government of such Value Added Tax with respect to its
sales. See "Business and Properties of the Company -- Inti Raymi -- General"
and see "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources."

CHILE

The San Cristobal mine is owned and operated by Niugini Mining's
wholly-owned Chilean subsidiary Inversiones Mineras del Inca, S.A. After
utilization of existing tax loss carryforwards, Inversiones Mineras del Inca,
S.A. will be subject to income tax at the rate of 15 percent. Repatriated
profits are generally taxed at an effective rate of 20 percent. Inversiones
Mineras del Inca, S.A. pays Chilean Value Added Tax on all purchases and
imports and subsequently claims a refund of Value Added Tax with respect to its
exports.

AUSTRALIA

Pajingo Gold Mine Pty. Ltd. is subject to tax on income derived from
Pajingo Gold Mine Pty. Ltd.'s mining operations. However, no taxes are
expected to be paid because of

36
<PAGE> 39
rules under which taxes have been phased in for gold mining. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Results of Operations." Australian dividends paid by Pajingo Gold Mine Pty.
Ltd. to a U.S. subsidiary of BMG are currently subject to a 15 percent
Australian withholding tax.

Red Dome Pty. Ltd. and Niugini Mining (Australia) Pty. Ltd.,
wholly-owned Australian subsidiaries of Niugini Mining, are subject to tax at
the corporate rate of 39 percent on their mining, hedging and investment
income. However, such income is expected to be offset by certain deductions
available to Red Dome Pty. Ltd.

The Company's Australian operations are also subject to various state
and local taxes and the payment of certain gold and silver royalties. Under
each of the mining leases, the Company pays to the State of Queensland an
annual royalty equal to the greater of 2 percent of gross sales after deducting
A$30,000 or 5 percent of the operating income that exceeds A$30,000.

PAPUA NEW GUINEA

Niugini Mining is subject to corporate tax in PNG. Assessable income,
after utilization of existing tax loss carryforwards, will be subject to a 35
percent income tax because Niugini Mining is a PNG resident corporation. The
dividend withholding tax rate is currently 17 percent. Niugini Mining did not
pay any dividends in 1993.

INSURANCE

The Company carries insurance against property damage risks and
comprehensive general liability insurance. The Company is also insured against
losses from dishonesty, including limited losses from the theft of gold, as
well as losses of other goods in transit. From time to time, the Company
reviews and modifies its insurance coverages and may obtain additional
policies, cancel existing policies or self-insure as it deems appropriate.

The Company is not insured against most environmental risks. Insurance
against environmental risks (including potential liability for pollution or
other hazards as a result of the disposal of waste products occurring from
exploration or production) has not been generally available to the Company or
to other companies within the industry. Insurance coverage against certain
environmental risks has recently become available. The Company is currently
evaluating the cost and coverage of the insurance recently made available to
determine if it would be appropriate to obtain such insurance. Without such
insurance, if the Company becomes subject to environmental liabilities, the
payment of such liabilities would reduce the funds available to the Company.
Should the Company be unable to fund fully the cost of remedying an
environmental problem, the Company might be required to enter into interim
compliance measures pending completion of the required remedy.

37
<PAGE> 40
EMPLOYEES

The number of full-time employees at December 31, 1993 of the Company was:
BMG
<TABLE>
<S> <C>
Battle Mountain complex* 123
San Luis mine 105
Pajingo mine 35
Crown Jewel project 9
U.S. corporate and exploration staff 72
Australian corporate and exploration staff 17
Bolivian corporate and exploration staff 4

Inti Raymi
Inti Raymi corporate, operations and exploration staff* 442
SERMAT corporate and mining staff* 213

Niugini Mining
San Cristobal mine* 225
Red Dome mine* 96
Niugini Mining corporate and exploration staff 27
------
Total 1,368
</TABLE>
* Represent operations where some of the employees are represented by a labor
union.

COMPETITION

The Company competes with other mining companies in connection with the
acquisition of precious metal mining interests and in the recruitment and
retention of qualified employees. There is significant and increasing
competition for the limited number of gold acquisition opportunities in the
United States, Australia and other countries. As a result of this competition,
the Company may be unable to acquire attractive gold mining properties on terms
it considers acceptable. In the pursuit of such acquisition opportunities, the
Company competes with many United States and international companies that have
substantially greater financial resources than the Company.

In terms of asset size or reserves, the Company is not currently a
major producer in the world markets for gold as compared with other producers.
There is a world market for gold, silver and copper. The Company believes that
no single company has sufficient market power to affect the price or supply of
gold, silver and copper in the world market. See "-- Gold Price Volatility."

EXPLANATORY NOTE REGARDING EXCHANGE RATES

In this report, references to "dollar," "US$" and "$" are to United
States dollars; references to "A$" are to Australian dollars.

38
<PAGE> 41
On March 8, 1994, the New York foreign exchange selling rate in U.S.
dollars applied to trading among banks in amounts of $1 million or more, as
quoted at 3:00 p.m. Eastern time by Bankers Trust Company, was A$1.00 equals
US$.7163.

GLOSSARY OF MINING TERMS

CARBON-IN-LEACH--milling process for the recovery of gold from slurried
ore in a dilute sodium cyanide solution, whereby the gold is dissolved and
adsorbed onto coarse carbon particles and then stripped from the carbon by a
screening process.

CARBON-IN-PULP--milling process for the recovery of precious metals by
adsorption onto activated carbon. The precious metals are recovered from the
enriched carbon by elution and electrolysis.

CONTAINED OUNCES--ounces before allowance for mining, dilution and
metallurgical recovery.

CUTOFF GRADE--the lowest grade of mineralized rock that qualifies as
ore grade in a given deposit, or the grade below which the mineralized rock
currently cannot be economically mined. Cutoff grades vary between deposits
depending upon the amenability of ore to gold extraction, costs of production
and assumed gold prices.

DORe--an unrefined alloy of gold, silver and other impurities normally
in the form of bars or buttons.

EQUIVALENT OUNCE OF GOLD--a comparable unit obtained by applying a
silver-to-gold or a copper-to-gold price ratio to the total market value of
silver and copper, respectively, produced during a given period, based on the
Company's average realized prices for each metal during that period.

LEACH--to dissolve minerals or metals out of ore with chemicals. Heap
leaching gold involves the percolation of a cyanide solution either through
crushed or run-of-mine ore heaped on an impervious pad or base.

MINING CLAIM--that portion of public mineral lands which a party has
staked or marked out in accordance with federal, provincial or state mining
laws to acquire the right to explore for and exploit the minerals under the
surface.

NET SMELTER RETURN--actual gold and silver sales after customary
deductions for the cost of refining, freight and insurance.

ORE--material that can be economically mined and processed.

ORE BODY--a deposit of economically recoverable minerals, the extent
and grade of which has been defined through exploration and development work.

39
<PAGE> 42
ORE RESERVE--that part of a mineral deposit which at the time of the
reserve determination could be economically and legally extracted or produced.

OUNCE OR OZ--a troy ounce.

PATENTED MINING CLAIM--a mining claim with respect to which the U.S.
federal government has granted fee title after fulfillment of the government's
qualifying requirements.

PROBABLE ORE RESERVES--reserves for which quantity and grade and/or
quality are computed from information similar to that used for proven reserves,
but the sites for inspection, sampling and measurement are farther apart or are
otherwise less adequately spaced. The degree of assurance, although lower than
that for proven reserves, is high enough to assume continuity between points of
observation.

PROVEN ORE RESERVES--reserves for which (a) quantity is computed from
dimensions revealed in outcrops, trenches, workings or drill holes; grade
and/or quality are computed from the results of detailed sampling and (b) the
sites for inspection, sampling and measurements are spaced so closely and the
geologic character is so well defined that size, shape, depth and mineral
content of reserves are well established.

RECLAMATION--the process of restoring mined land to a condition
approximating to a greater or lesser degree its original state. Reclamation
standards vary widely from jurisdiction to jurisdiction but usually address
ground and surface water, topsoil, final slope gradients, waste handling and
revegetation issues.

STRIPPING RATIO--the ratio of the number of tons of waste to the number
of tons of ore which will be extracted during the excavation of an open pit
mine.

SULFIDE--a mineral compound characterized by the presence of sulfur.

TAILINGS--material rejected from a mill after the recoverable valuable
minerals have been extracted.

TAILINGS FACILITY--natural or man-made area suitable for depositing
ground waste material resulting from the milling of ore.

TON--a short ton of 2,000 pounds, dry weight basis.

UNPATENTED MINING CLAIM--those claims, either lode or placer, for which
no patent has been issued. The claim owner has rights to exclusive possession
in the area claimed. Such property rights are subject to the paramount title
of granting jurisdiction until a patent is obtained.

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<PAGE> 43
ITEM 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings required to be reported
in response to this item.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted during the fourth quarter of 1993 to a vote
of security holders.

EXECUTIVE OFFICERS OF THE REGISTRANT

Listed below are the names and ages as of March 1, 1994, of each of the
present executive officers of the Company together with principal occupations
held by each during the past five years. Executive officers are appointed
annually to serve for the ensuing year or until their successors have been
appointed. No officer is related to any other by blood, marriage or adoption.
No arrangement or understanding exists between any officer and any other person
under which any officer was elected. Messrs. Mazur, Quinn and Reisbick have
been employed with the Company since July 1985.

<TABLE>
<S> <C> <C>
KARL E. ELERS (55) - Chairman of the Board and Chief Executive Officer and Director

KENNETH R. WERNEBURG (52) - President and Chief Operating Officer and Director

ANDRE J. DOUCHANE (43) - Vice President

JOSEPH L. MAZUR (55) - Vice President - Administration and Communications

R. DENNIS O'CONNELL (47) - Vice President - Finance and Chief Financial Officer

ROBERT J. QUINN (38) - Vice President, General Counsel and Secretary

FRED B. REISBICK (56) - Vice President - Exploration
</TABLE>

KARL E. ELERS previously served as President and Chief Operating
Officer of the Company from April 1988 until April 1990. Mr. Elers also serves
as a member of the Executive Committee and of the Environmental Affairs and
Ethics Committee of the Company's Board of Directors.

KENNETH R. WERNEBURG was Executive Vice President of the Company from
November 1989 until April 1990. Prior to joining the Company, Mr. Werneburg
served as Chairman and Chief Executive Officer of Hill Refrigeration
Corporation (commercial

41
<PAGE> 44
refrigeration equipment) since April 1989. From 1985 through 1988, Mr.
Werneburg served as Executive Vice President of St. Joe Minerals Corporation
(international mining and manufacturing). Mr. Werneburg also serves as a member
of the Executive Committee of the Company's Board of Directors.

ANDRE J. DOUCHANE was Manager of North American Operations from July
1991 until April 1992. Prior to joining the Company in July 1991, Mr. Douchane
was employed by Round Mountain Gold Corp. as Vice President and General
Manager.

R. DENNIS O'CONNELL was Vice President of the Company from May 1992
until July 1992 when he was named Vice President - Finance and Chief Financial
Officer. Prior to joining the Company, Mr. O'Connell served as Assistant
Controller, Worldwide Exploration and Production for Marathon Oil Company since
January 1991. From July 1988 through January 1991, Mr. O'Connell served as
Manager, Finance and Administration, Worldwide Production for Marathon Oil
Company. From January 1987 through July 1988, Mr. O'Connell served as
Director, Finance and Administration of Marathon Oil U.K., Ltd.

ROBERT J. QUINN previously served as Secretary and Corporate Counsel of
the Company until 1989.

FRED B. REISBICK previously served as General Manager, North America
Exploration until November 1992.

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<PAGE> 45
PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

PRICE RANGE OF COMMON STOCK

The Company's common stock, par value $0.10 per share (the
"Common Stock"), is traded on the New York Stock Exchange (the "NYSE"), the
Toronto Stock Exchange, the Australian Stock Exchange Limited, the Swiss Stock
Exchanges and the Frankfurt Stock Exchange. The ticker symbol for the Common
Stock on the exchanges is "BMG."

The following table sets forth for the periods indicated the
high and low sales prices for the Common stock as reported on the NYSE
Composite Tape.
<TABLE>
<CAPTION>
1993 High Low
---- ---
<S> <C> <C>
First Quarter . . . . . . . . . . . . . . . . . . 7 1/4 4 7/8

Second Quarter . . . . . . . . . . . . . . . . . 10 1/8 6 1/4

Third Quarter . . . . . . . . . . . . . . . . . . 11 7 1/4

Fourth Quarter . . . . . . . . . . . . . . . . . 10 5/8 8 1/8
</TABLE>
<TABLE>
<CAPTION>
1992
<S> <C> <C>
First Quarter . . . . . . . . . . . . . . . . . . 8 5/8 7

Second Quarter . . . . . . . . . . . . . . . . . 7 1/2 5 3/4

Third Quarter . . . . . . . . . . . . . . . . . . 7 1/2 6

Fourth Quarter . . . . . . . . . . . . . . . . . 6 1/2 4 1/2
</TABLE>

As of March 7, 1994, the Company had 22,559 record holders of
Common Stock.

Cash dividends of $0.025 per share were paid in each quarter
of fiscal 1992. Cash dividends of $0.025 per share were paid in each half of
fiscal 1993 pursuant to the Company's October 1992 announcement of its
intention to reduce cash dividends. A determination to pay future dividends and
the amount thereof will be made by the Company's Board of Directors and will
depend on the Company's future earnings, capital requirements, financial
condition and other relevant factors. The Company's ability to pay dividends
is subject to certain restrictions contained in the Company's committed
revolving credit facility. These restrictions are not expected to affect the
payment of dividends. For a further discussion of the credit facility and of
restrictions on Inti Raymi to pay dividends to BMG, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources" and Note 11 of Notes to Consolidated Financial
Statements under Item 8 herein. The Company intends to retain most of its
earnings to support current operations, to fund exploration and development
projects and to provide funds for acquiring gold properties.

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<PAGE> 46
ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth certain consolidated financial
data for the respective periods presented and should be read in conjunction
with the Consolidated Financial Statements and the related notes thereto in
Item 8 and Management's Discussion and Analysis of Financial Condition and
Results of Operations in Item 7.

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(expressed in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Gross revenue $ 207,251 $ 192,190 $ 176,464 $ 144,504 $ 132,333
Less: freight, allowances & royalties 13,836 10,387 6,222 1,745 1,693
------- -------- -------- -------- --------
Net sales 193,415 181,803 170,242 142,759 130,640
Mining, milling and other direct costs 128,487 117,350 89,375 59,921 49,474
Depreciation, depletion and amortization 41,389 38,644 28,149 16,979 12,308
General and administrative and other expenses(1) 19,799 21,372 26,153 23,797 18,529
Exploration and evaluation 9,474 17,132 27,390 36,686 18,294
Asset write-downs(2) - 32,600 5,573 - -
------- -------- -------- ---------- ----------
Operating income (loss) $ (5,734) $ (45,295) $ (6,398) $ 5,376 $ 32,035
Income (loss) before cumulative effects
of accounting changes $ (4,405) $ (34,941) $ (1,174) $ 16,043 $ 26,418
Cumulative effects of accounting
changes (net of taxes)(3):
Method of accounting for exploration - - - (33,754) -
Postretirement benefits other than pensions - (5,342) - - -
Income taxes - 3,880 - - -
-------- -------- ---------- ---------- ----------

Net income (loss) $ (4,405) $ (36,403) $ (1,174) $ (17,711) $ 26,418
Preferred dividends 3,738 - - - -
-------- --------- ---------- --------- ----------
Net income (loss) to common shares $ (8,143) $ (36,403) $ (1,174) $ (17,711) $ 26,418
Earnings (loss) per share before accounting changes $ (.10) $ (.44) $ (.02) $ .21 $ .40
Cumulative effects of accounting changes
(net of taxes)(3):
Method of accounting for exploration - - - (.45) -
Postretirement benefits other than pensions - (.07) - - -
Income taxes - .05 - - -
Earnings (loss) per share $ (.10) $ (.46) $ (.02) $ (.24) $ .40
Cash dividends per common share $ .05 $ .10 $ .10 $ .10 $ .10
</TABLE>
<TABLE>
<CAPTION>
As of December 31,
-------------------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(expressed in thousands)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents $ 115,338 $ 45,377 $ 28,720 $ 92,820 $ 39,482
Working capital $ 140,348 $ 35,990 $ 26,070 $ 91,636 $ 46,467
Total assets $ 668,152 $ 577,484 $ 524,520 $ 449,187 $ 350,665
Long-term debt, less current maturities $ 179,053 $ 198,593 $ 125,403 $ 111,391 $ 50,000
Shareholders' equity $ 369,560 $ 269,779 $ 314,562 $ 255,490 $ 203,948

- --------------------------------------------------------
</TABLE>

(1) Consists of selling, general and administrative expenses and taxes,
other than income.
(2) In 1992, the Company (i) wrote down $17.6 million, net of a $9.1
million income tax benefit, of BMG's investment in the San Luis mine
and (ii) wrote off $4 million, net of a $2 million income tax benefit,
of BMG's investment in the previously closed Canyon Placer facility,
which was abandoned because of a persistently weak gold market. In
1991, the Company wrote down $4.5 million, net of a $1.1 million tax
benefit, of BMG's carrying value in its investment in the San Juan
Project in California. In March 1992, BMG sold its interest in the San
Juan Project.
(3) For 1992, includes the Company's adoption of SFAS No. 109, "Accounting
for Income Taxes," and SFAS No. 106, "Employers' Accounting for
Postretirement Benefits other than Pensions" (see Notes 6 and 7 to the
Consolidated Financial Statements, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations").

44
<PAGE> 47
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

During 1993, the Company completed the transition of its
primary production stream from the Fortitude mine in Nevada to the 85 percent
owned Kori Kollo mine in Bolivia. As expected, there was little change in the
Company's total gold production during this transition period. However,
increased costs related to the transition to a lower grade ore body at the
Fortitude mine and lower than anticipated production levels from the heap leach
operations at the Battle Mountain complex and the San Cristobal mine resulted
in an increase in total operating costs per equivalent ounce of gold for 1993.
The Company reported a net loss of $4.4 million for 1993.

In 1992, the Company increased its gold production as it
realized the first full year of production from three new mines: the San Luis
mine in Colorado, the San Cristobal mine in Chile and the Red Dome mine in
Australia. For 1992, the Company reported a net loss of $36.4 million as a
result of weak gold prices, impairment in value of the Company's San Luis mine
and the Canyon Placer facility and higher operating costs associated with its
newer, low-grade mines. In particular, the San Luis mine experienced an
extended period of start-up difficulties. This compares with a net loss of
$1.2 million for 1991, which included the impairment in value of the Company's
San Juan project. Effective January 1, 1992, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes,"
and SFAS No. 106, "Employer's Accounting for Postretirement Benefits other than
Pensions." (See Notes 6 and 7 to the Consolidated Financial Statements.)

Revenues

Gross revenue of $207.3 million in 1993 represented an
increase of 8 percent from gross revenue of $192.2 million in 1992. This
increase, resulting from increased sales volumes and improved gold prices in
1993, followed a 9 percent gross revenue increase realized in 1992, which
reflected the growth in volumes of gold production and sales that the Company
achieved through the acquisition and development of new mines. Gold sales
volumes increased 3 percent in 1993 to a total of 503,000 ounces (of which
417,000 ounces were attributable to BMG) following an increase of 8 percent in
1992. Also contributing to improved revenues in 1993 was an increase in
average realized gold prices (to $366 per ounce in 1993 from $359 per ounce in
1992). During 1992, lower average realized gold prices partially offset volume
gains. In the upcoming years, the Company expects development and evaluation
projects at the Battle Mountain complex and the Crown Jewel site to be
permitted, and the Kori Kollo mine to be expanded. Because of these factors,
the Company expects continued production growth through the mid-1990's.

Selling and Operating Costs

Freight, allowances and royalties increased to $13.8 million
($24 per equivalent ounce of gold sold) in 1993 from $10.4 million ($19 per
equivalent ounce of gold sold) in 1992 and $6.2 million ($13 per equivalent
ounce of gold sold) in 1991. The increase in 1993 resulted from higher costs
associated with new smelting and refining agreements for Red

45
<PAGE> 48
Dome mine concentrates and increased sales from the Kori Kollo mine. The 1992
increase was primarily attributable to the first full year of production of Red
Dome mine concentrates which had characteristics requiring significant
additional freight, smelting and refining costs for conversion to salable
products.

Higher costs primarily associated with the production
transition from the Fortitude mine to the Kori Kollo mine and higher sales
volumes contributed to higher aggregate mining, milling and other costs in
1993. Increases in production and sales volumes resulted in higher costs in
1992 as compared with 1991. These costs increased to $128.5 million ($227 per
equivalent ounce of gold sold) in 1993 from $117.4 million ($219 per equivalent
ounce of gold sold) in 1992 and $89.4 million ($191 per equivalent ounce of
gold sold) in 1991.

Depreciation, depletion and amortization expense increased to
$41.4 million ($73 per equivalent ounce of gold sold) in 1993 from $38.6
million ($72 per equivalent ounce of gold sold) in 1992, and $28.1 million ($60
per equivalent ounce of gold sold) in 1991, as a result of the higher capital
costs associated with the Company's newer operations and increases in sales
volumes. Increased production and sales volumes, and the higher acquisition
costs of new reserves, will cause depreciation, depletion and amortization to
increase in the future. Selling and operating costs per equivalent ounce of
gold sold are based on actual sales and include inventoried costs; therefore,
these costs are not directly comparable to production costs per equivalent
ounce of gold.

Exploration Costs

Exploration and evaluation expenses were reduced to $9.5
million in 1993 from $17.1 million in 1992 and from $27.4 million in 1991 as a
result of the Company's decision to focus its exploration efforts on fewer,
higher potential targets. Exploration and evaluation expenses are expected to
increase to about $14 million in 1994 as the Company expands its international
exploration program and intensifies its efforts to evaluate targets already in
hand. (See "-- Liquidity and Capital Resources -- Exploration and Capital
Expenditures.")

Write-downs

The volatility of gold prices requires that the Company, in assessing the
impact of prices on recoverability, exercise judgement as to whether price
changes are temporary or are likely to persist. The Company performs a
comprehensive evaluation of the recoverability of its assets on a periodic
basis to assess the impact of significant changes in market conditions and
other factors.

During 1992, the Company recognized charges totalling
approximately $23.3 million, net of $11.1 million in income tax benefits for
the impairment in value of certain of the Company's assets. The charges
included: (1) a write-down of $17.6 million, net of a $9.1 million income tax
benefit, of BMG's investment in the San Luis mine in Colorado that reduced the
carrying value of the investment to a level which BMG believed would be
recoverable under then existing and expected future market conditions (lower
gold prices, compared with those at the time of project conception, and greater
than anticipated capital expenditures resulting from a difficult start-up
period led to the write-down), (2) a write-off of $4 million, net of a $2
million income tax benefit, of BMG's investment in the

46
<PAGE> 49
previously closed Canyon Placer facility, which was abandoned because of a
persistently weak gold market, and (3) an impairment of $1.7 million, included
as Other income (expense), net, to adjust to current market the carrying value
of certain marketable equity security investments. These charges compare with
a 1991 charge of $4.5 million (net of a $1.1 million tax benefit) to adjust the
carrying value of the Company's investment in the San Juan project in
California to the purchase price set forth in the Company's agreement to sell
the project to another gold mining company. No similar write-downs were
recorded in 1993. Additional asset write-downs may occur if the Company
determines that the carrying values attributed to individual assets are not
recoverable given reasonable expectations for future market conditions,
although no write-downs are currently anticipated.

General and Administrative Costs

As a result of cost reduction efforts initiated in 1992, the
Company's general and administrative expenses have decreased to $17.5 million
in 1993 from $17.9 million in 1992 and from $21.1 million in 1991. Included in
these expenses are $6.7 million, $6.3 million and $8.2 million, respectively,
attributable to the general and administrative costs incurred by the Company's
majority-owned subsidiaries. Absent material changes in the Company's manner
of operation, general and administrative expenses are not expected to
significantly change in the foreseeable future.

Other

Interest income increased to $4.6 million in 1993 from $1.8
million in 1992. This increase resulted from greater levels of cash available
arising primarily from the proceeds of the Company's 1993 convertible preferred
stock offering (see "-- Liquidity and Capital Resources -- Financing"). The
1992 amount represents a decrease from $4.4 million in 1991 which can be
attributed to lower interest rates and lower levels of cash available for
investment. Future declines in interest income are expected for the near term
because of lower levels of cash available as a result of continuing major
capital investments and debt service requirements.

Gross interest expense, including amounts capitalized,
amounted to $15.1 million in 1993, $10.3 million in 1992 and $8.3 million in
1991. Interest expense with respect to borrowings attributable to any given
project in the pre-production stage is capitalized until such time as that
project begins commercial production. Interest expense charged against income
increased in 1993 because interest expense related to the Kori Kollo sulfide
project financing has not been capitalized since commencement of commercial
operations in February 1993 and since project financing was outstanding for the
entire year. Prior to 1993, the majority of interest expense was capitalized
and was related primarily to the $100 million of 6 percent convertible
subordinated debentures and to amounts outstanding under a committed $150
million revolving credit facility. Should additional borrowings be required to
fund acquisitions and mine development, interest expense would be expected to
increase accordingly.

Other net income of $5.7 million in 1993 represents an
improvement from other net expense of $1.2 million in 1992 and $1.2 million in
1991. The 1993 income resulted from gains of $3.7 million from the sale of an
ore deposit at BMG's Plutonic Bore

47
<PAGE> 50
Exploration project in Western Australia and $2 million from the sale of
certain long-term investments held by Niugini Mining.

Exclusive of the taxes provided on cumulative effects of
accounting changes for the periods presented, income tax provisions resulted in
a $4.1 million benefit in 1993, and a $12.2 million benefit in 1992 compared
with income tax expense of $1 million in 1991. The changes in the tax
provisions are primarily attributable to changes relative to the level of
income or losses before taxes. It is anticipated that the Australian income
tax, which had no material impact on the Company's income in 1993 or previous
years, will not materially affect the Company's future results of operations.
Earnings from the Company's wholly- owned Australian subsidiary are subject to
a 15 percent Australian withholding tax and U.S. Federal income tax to the
extent such earnings are paid as a dividend to the parent company.

The results of operations for BMG's majority-owned
subsidiaries Inti Raymi and Niugini Mining are consolidated with the Company's
results. Minority interest of $(4.7) million in 1993, $(1.2) million in 1992
and $5.4 million in 1991 represents the minority shareholders' share of
combined net (income) loss for these subsidiaries during the respective
periods.

For 1992, the Company's Consolidated Statement of Income
reflects an accrued charge of $5.3 million (net of $1.4 million in income tax
benefits) and a credit of $3.9 million, representing the cumulative prior
periods' effects of the adoption of SFAS No. 106 and SFAS No. 109,
respectively.

Recently Issued Accounting Standards

See Notes 4, "Marketable Securities" and 7, "Benefits Plans,"
of Notes to Consolidated Financial Statements for a discussion of the impact
that recently issued accounting standards will have on the Company's
consolidated financial statements when adopted.

Liquidity and Capital Resources

As of December 31, 1993, the Company had net working capital
of $140.3 million and a current ratio of 4.5 to 1 as compared with net working
capital of $36 million and a current ratio of 1.7 to 1 at December 31, 1992.
The increase in working capital resulted primarily from $111 million in net
proceeds received from a convertible preferred stock offering, less subsequent
debt repayment of $59.9 million. An increase in accounts receivable of $21.1
million was attributable primarily to accruals for certain tax refunds,
especially in Bolivia, and the timing of shipments to customers. Product
inventory decreased by $10.1 million, reflecting the timing of customer
shipments. An $11.2 million increase in materials and supplies inventories
reflected the start-up of the Kori Kollo sulfide mine. For 1993, cash from
operations totaled $30.1 million, and borrowings aggregated $36.9 million. Uses
of cash included $50.4 million for capital expenditures, excluding capitalized
interest, $7.6 million for investment in the Crown Jewel project, $6.6 million
of direct expenditures for project exploration and evaluation, annual interest
payments, which were capitalized, of $6 million on the $100 million principal
amount of convertible subordinated debentures due

48
<PAGE> 51
2005 and dividends on common and preferred stock of $4 million and $3.7
million, respectively.

Financing

On May 20, 1993, BMG completed an offering of 2.3 million
shares of its convertible preferred stock valued at $115 million. The net
proceeds of the offering were approximately $111 million. The preferred stock
carries a $50 per share liquidation preference and, subject to Board vote,
provides for annual cumulative dividends of $3.25 per share, which are payable
in quarterly installments. Each share of the stock is convertible at any time
at the option of the holder into 4.762 shares of BMG's common stock. It is
also redeemable at the option of BMG solely for shares of BMG's common stock
beginning May 15, 1996.
BMG has used a portion of the proceeds of this offering to
repay all amounts outstanding under its revolving credit facilities. The
remainder is being used for working capital and for general corporate purposes,
which include capital expenditures and may include potential future
acquisitions relating to the businesses in which the Company currently engages.

As of February 9, 1994, BMG has effective a registration
statement under the Securities Act of 1933 for what is commonly referred to as
a "universal shelf" filing covering up to $200 million of its debt securities,
preferred stock, depositary shares, common shares and warrants, which BMG may
elect to offer from time to time and in any combination.

BMG can borrow funds under a committed revolving credit
agreement, which is scheduled to expire on December 31, 1996. Scheduled $9.4
million quarterly reductions in commitments under the agreement began on March
31, 1993, and will continue until the agreement expires. As of December 31,
1993, the remaining availability under this agreement was $112.5 million. This
agreement contains certain financial covenants as well as restrictions on
additional dispositions of major assets and the payment of dividends. These
restrictions are not expected to affect planned operations. BMG may borrow an
additional $15 million through a separate uncommitted revolving credit
facility. As of February 17, 1994, no borrowings were outstanding under either
of these facilities.

BMG's majority owned Bolivian subsidiary, Inti Raymi, has
borrowed funds from three international agencies, the Overseas Private
Investment Corporation ("OPIC") ($40 million), the International Finance
Corporation ("IFC") ($40 million) and the Corporacion Andina de Fomento ("CAF")
($15 million) under three separate but coordinated financing facilities. These
facilities provided most of the funding necessary for the development of the
Kori Kollo mine. Each of these facilities imposes restrictions on dividend
payments and loan repayments by Inti Raymi to its shareholders, and limits
additional fixed asset purchases or dispositions, debt and liens. As of
February 17, 1994, Inti Raymi owed an aggregate of $92.4 million under these
facilities. This amount includes $3.8 million previously owed by Inti Raymi to
OPIC. The IFC facility includes a $5 million convertible loan payable on March
1, 2002, which may be converted at any time, at IFC's option, into a 3.98
percent ownership interest in Inti Raymi. Other than the convertible portion,
loans under the facilities are to be repaid in semi-annual installments which
commenced in December 1993 and will continue through June 2000. Certain
prepayments would be required in the event of substantial Kori Kollo reserve
losses or significantly

49
<PAGE> 52
improved gold prices. Having met certain prerequisite physical and financial
completion tests set forth in the facility agreements, Inti Raymi has applied
for project completion by submitting certain certifications to the lenders.
Under the terms of the facilities, BMG has agreed to provide financial support
to Inti Raymi to the extent necessary for Inti Raymi to meet its financial
obligations until the lenders approve the application for project completion,
which is expected to occur during the first half of 1994.

Of the Company's $140.3 million net working capital at
December 31, 1993, $48.4 million was attributable to Niugini Mining and $24.6
million to Inti Raymi. Inti Raymi is currently restricted in its ability to pay
dividends or otherwise advance funds to BMG under the terms of Inti Raymi's
project financing agreements, as described above. Upon project completion, as
defined in the facility agreements, Inti Raymi may pay dividends and debt
repayments subject to compliance with loan covenants. BMG does expect to
receive dividends from Inti Raymi in 1994. In addition, the Company does not
expect Niugini Mining to pay dividends currently because of Niugini Mining's
other business commitments and plans for its working capital (see "Development
Projects".)

In December 1993, Niugini Mining issued 5.8 million of its
common shares at A$5 per share in a public offering which provided net proceeds
of approximately $19.1 million U.S. equivalent. These proceeds are to be used
to partially fund the acquisition of an additional 16 percent ownership
interest in the Lihir project in Papua New Guinea ("PNG"). See discussion
under "Development Projects - Lihir Project" further herein. As a result of
this stock offering, BMG's ownership interest in Niugini Mining decreased from
56.5 percent to 52.6 percent. In December 1993, the Company recorded a $2.1
million adjustment to reduce the carrying value of its investment in Niugini
Mining to reflect the reduction in ownership interest. This adjustment was
charged to shareholders' equity and not charged against net income because the
Company believed the carrying value of the investment to be fully recoverable.
After giving effect to potential dilution for the exercise of outstanding
Niugini Mining stock options, BMG retains a majority ownership position.

Development Projects

At present, the Company has interests in five projects which
have matured beyond advanced stages of evaluation.

Lihir Project - BMG holds an interest in the Lihir project
through its 52.6 percent ownership of Niugini Mining. In March 1992, the PNG
government extended, until March 1994, the Prospecting Authority for the Lihir
project in which Niugini Mining currently holds a 20 percent interest and a
subsidiary of RTZ Corporation, plc ("RTZ") holds an 80 percent interest. RTZ
is the manager of the Lihir project. Also, in March 1992, the Lihir joint
venture submitted a Proposal for Development of the Lihir project for
government approval.

On August 9, 1993, the Company announced that Niugini Mining
had reached an agreement with RTZ to acquire an additional 16 percent of the
Lihir Joint Venture for $3 million cash per percentage point, or $48 million.
This agreement anticipates that the PNG government will acquire a 30 percent
contributing interest in the project and that following the acquisition by the
government and consummation of Niugini Mining's purchase of the additional
interest from RTZ, Niugini Mining would have a 30 percent interest in the

50
<PAGE> 53
project and RTZ would retain a 40 percent interest. The transaction is
contingent on, among other things, PNG government approval of the transaction,
the purchase by the PNG government of a 30 percent interest and the granting of
a Special Mining Lease by the PNG government. It is anticipated that Niugini
Mining would finance the acquisition by a combination of working capital, debt
and proceeds from the 1993 issuance of common stock. No funding would be
required by BMG.

On September 25, 1993, an agreement in principle was reached
between the joint venture partners and the PNG government for the government to
acquire a 30 percent interest in the project and for the parties to pool their
respective Lihir joint venture interests into a newly formed, single purpose
company tentatively named Lihir Gold Limited ("LGL"). The new company would
therefore be initially owned 30 percent by Niugini Mining, 40 percent by RTZ
and 30 percent by the PNG government. Related to this proposed restructuring,
the carried interest arrangement between Niugini Mining and RTZ would be
terminated with no further rights or obligations continuing to either party.
LGL would enter into a management contract with RTZ whereby RTZ would manage
the administration, financing, construction and subsequent operation of the
project. The project is expected to be funded through the offering of an
estimated 25 to 40 percent of the equity of LGL common stock to the public.
Niugini Mining's interest in LGL would thereby be expected to be reduced to
between 18 percent and 22.5 percent. On this basis, BMG's attributable
interest in the Lihir project would be between 9 and 11 percent. Any
additional funding required for the project is expected to be provided in the
form of debt financing by LGL.

The capital costs for Lihir project development are presently
estimated by the manager of the project at $625 million. These capital costs
are based on the planned use of mining contractors for the first five years of
operations. Over the first 15 years of operations, the manager's estimate of
total cash operating costs is $209 per ounce and, over the expected 37 year
life of the mine, is $228 per ounce. The estimate of minable sulfide reserves
has been revised from 89.3 million metric tons, or 13.7 million contained gold
ounces, to 104 million metric tons, or 14.6 million contained gold ounces, with
the average grade changing from 4.77 to 4.37 grams of gold per metric ton.

The PNG government is expected to issue the Special Mining
Lease for the project after landowner negotiations are completed and all
necessary statutory approvals are obtained. As soon as practical after the
Special Mining Lease is granted, preliminary development work would commence.
This preliminary work is expected to be funded by the joint venture partners
until LGL is formed and financing is arranged, after which LGL would be
responsible. It is anticipated that Niugini Mining will fund its share of the
preliminary development costs from its working capital.

As of December 31, 1993, the carrying value of the Company's
investment in the Lihir project was approximately $135 million. If the Lihir
project does not proceed as contemplated, the Company may be required to write
down part or all of its investment in the Lihir project.

Red Dome Expansion - Niugini Mining is proceeding with the
expansion of the existing Red Dome pit. It is estimated that the total cost of
the expansion will be approximately $24.5 million, of which $17.3 million had
been spent through December 31, 1993. The proposed expansion, to be completed
by mid-1994, is expected to extend the life

51
<PAGE> 54
of the mine through 1996 and increase the reserves at Red Dome by approximately
227,000 contained ounces of gold and 28 million pounds of copper. The new
reserves are based on an additional 2.7 million tons of ore at an average grade
of .09 ounce of gold per ton and containing .52 percent copper with a cutoff
grade of .05 ounce of gold per ton. Niugini Mining received all requisite
permits and commenced the pit expansion in mid-1993.

Crown Jewel Project - BMG is continuing to seek permits for
the Crown Jewel project in Washington state. BMG expects to construct a 3,000
ton per day milling facility with start-up possible in fall of 1996, depending
on the length of the permitting process, the effect of possible legal
challenges by project opponents and the potential impact of proposed
legislation to amend or replace state and federal laws and regulations
affecting mining projects. The delays in obtaining permits for the Crown Jewel
project relate primarily to delays in regulatory approvals for certain site
data collection activities and the time taken for agency development of certain
wildlife studies.

To acquire a 51 percent ownership interest in the project, BMG
will have to fund all expenditures for exploration, evaluation and development
of the project through commencement of commercial production. Under the terms
of the joint venture agreement, the minority partner will not reimburse BMG for
any portion of funding provided through the commencement of commercial
production. These expenditures, including acquisition costs, are currently
estimated to be approximately $95.3 million, of which $33.1 million ($24.6
million of which has been capitalized) has been incurred through December 31,
1993. Management expects that BMG should be able to more than recover its
total investment in the project from its 51 percent interest in the project's
operating cash flows based on current market conditions and current
expectations of the timing of obtaining permitting. To maintain BMG's right to
earn a 51 percent interest in the project, BMG could be required to make
payments to the co-venturer in amounts of $1 million per quarter for the period
commencing with the third quarter of 1993 through commencement of commercial
production. BMG believes that it is entitled under "force majeure" provisions
of the joint venture agreement to suspend application of these quarterly
payment requirements because of delays in the permitting process. The
Company's financial position as of December 31, 1993, does not reflect a
liability for any such payments. An arbitration proceeding has been initiated
between BMG and the co- venturer and the $1 million payments are being
deposited in an escrow account pending resolution of the dispute.

Reona Project - BMG has announced a decision to develop the
Reona project, including construction of a heap leach facility, in the Copper
Canyon area of the Battle Mountain complex. The cost of developing the project
is estimated to be approximately $13.8 million, of which $2.1 million has been
spent through December 31, 1993. The project contains reserves of
approximately 13.5 million tons of ore at an average ore grade of .028 ounce of
gold per ton, equivalent to approximately 370,000 contained ounces of gold.
The project also contains approximately 2.3 million contained ounces of silver.
The cutoff grade used in determining reserves was .013 ounce of gold per ton
with an estimated gold recovery factor of approximately 66 percent. On January
12, 1994, the local Bureau of Land Management ("BLM") issued a Finding of No
Significant Impact (based on an Environmental Assessment ("EA")) and a Record
of Decision approving BMG's Plan of Operations ("POO") for the project. The
Company has commenced development activities pursuant to the approved POO. The
local BLM decision is subject to appeal by certain third parties through
February 1994 and is subject to reversal by the Secretary of the Interior

52
<PAGE> 55
and the Director of the BLM. Third party comments on the draft EA have
requested that an Environmental Impact Statement be prepared for the Reona
project. The project could be in production in 1994 assuming the POO approval
is not appealed or reversed. The project could also be impacted by proposed
federal legislation to amend or replace the General Mining Law. (See
"Government Regulation".)

Cindy Project - In Queensland, Australia, BMG is proceeding with
the $3.4 million development of the Cindy ore deposit, containing approximately
42,500 ounces of gold, adjacent to BMG's Pajingo mine. Ore from the Cindy
deposit is to be processed at the existing Pajingo milling facility beginning
in September 1994 and is expected to extend the productive life of the Pajingo
district to October of 1995.

New Reserve Potential

BMG is currently evaluating the feasibility of mining and milling
deposits of low grade sulfide mineralization known as the Phoenix milling
project (formerly called the Fortitude Extension) located in the Copper Canyon
area of the Battle Mountain complex. Feasibility evaluation of this
mineralization is expected to be completed in 1994.

Niugini Mining has recently announced the discovery of significant
mineralization at its Mungana project in the Red Dome area. Prefeasibility
studies are underway there to determine the existence of sufficient ore to
warrant proceeding with feasibility and permitting activities.

An additional 220,000 contained ounces of gold reserves have been
recently defined at Niugini Mining's San Cristobal mine. Niugini Mining will
be conducting an intensive drilling program in the area of the San Cristobal
mine during 1994 to evaluate an associated gold resource.

Government Regulation

All of the Company's mining and processing operations are subject
to reclamation requirements. The Company believes it is making sufficient
accruals for known reclamation obligations. Such accruals, amounting to an
aggregate of $9.5 million at December 31, 1993, are included as long-term
liabilities in the Company's consolidated balance sheet. At the Battle
Mountain complex, assuming the Reona project is developed as currently
permitted and the Phoenix project proceeds, aggregate reclamation expenditures
required to be spent in the area are expected to amount to approximately $7.7
million, of which $4.7 million remained accrued at December 31, 1993.
Estimated reclamation obligations and related amounts accrued as of December
31, 1993, respectively, for each of the Company's other operating mines are as
follows: San Luis $3.3 million and $1.0 million, Pajingo $2.6 million and $.8
million, Kori Kollo $10.0 million and $.4 million, Red Dome $4.2 million and
$2.6 million. Reclamation expenditures for the Company's San Cristobal mine
are not expected to be material.

BMG has been issued a water pollution control permit for the Battle
Mountain complex project facilities from the Nevada Division of Environmental
Protection. The permit provides the framework for the development of a "final
closure plan". BMG has applied for reclamation and stormwater runoff permits
covering the Battle Mountain

53
<PAGE> 56
complex area. Activity expected to be performed as part of the development
and operation of the Reona and Pheonix projects would eliminate certain
possible reclamation costs. If one or both of these projects does not proceed,
reclamation expenditures would be expected to be up to $4 million higher than
current estimates. BMG is currently conducting further site characterization
studies for the Battle Mountain complex area and is communicating with the
Nevada Division of Environmental Protection to determine the ultimate permit
requirements. Potentially adverse site characterization results or the
imposition by regulatory authorities of unanticipated reclamation standards
could substantially increase future reclamation requirements and expenditures.
Laws and regulations applicable to these permits have been amended during the
past few years, and it is difficult to ascertain the exact terms and conditions
which will be required thereunder. Based on data collected to date, management
does not expect that potential future adverse site characterization results
will have a material adverse effect on the Company's financial condition.
Reclamation obligations could also be impacted by proposed federal legislation
to amend or replace the General Mining Law.

The Company's Crown Jewel and Lihir development projects are
dependent upon securing requisite permits and approvals and the impacts of
legal challenges, as would be the Phoenix and Mungana projects if a development
decision is made. Although the Company believes the requisite permits and
approvals for its development properties can be obtained in due course, the
requisite permitting efforts are complex, time consuming and subject to legal
challenge. At this time, the Company does not believe that the impact of
existing permitting requirements or existing environmental laws and regulations
will have a material adverse effect on the Company's business, financial
condition or results of operations. There can be no assurance that future
changes in laws and regulations and legal challenges to regulatory actions
would not result in additional expense, capital expenditures, restrictions and
delays associated with the development and operation of the Company's
properties.

Legislation has been passed by the U.S. Senate ("S.775") and the
U.S. House of Representatives ("H.R.322") which would amend or replace the
General Mining Law under which the Company holds claims on public lands. A
compromise bill is expected to be developed by a conference committee in 1994.
As written, S.775 proposes a 2 percent royalty on the value of minerals
measured at the point of extraction and H.R.322 proposes an 8 percent royalty
on, effectively, gross revenue. H.R.322 also proposes new environmental
standards, additional reclamation requirements and extensive new procedural
steps which could result in delays and additional expenditures for all phases
of mining activity. Approximately 40 percent of the Reona reserves and 80
percent of the Crown Jewel ore body are on public lands and could be subject to
the proposed royalties. These projects, as well as reclamation and closure
activities at the Battle Mountain complex, could be subject to extensive
additional permitting and environmental requirements. The Company has applied
for patents covering the unpatented portion of the Crown Jewel ore body but has
not yet received the "first half" of the final certificate. While the extent
to which existing law might change is not yet known it is expected to be
unfavorable in most respects. The Company cannot yet predict the impact of any
such change on its U.S. activities. However, the adoption of either version of
the new mining law, as currently written, is not expected to render uneconomic
any of the Company's existing operating mines or development projects, assuming
current gold prices.

54
<PAGE> 57
Exploration and Capital Expenditures

The Company currently estimates that it will spend approximately
$14 million on its 1994 exploration programs to identify potential additional
mineral deposits. Of this amount, 16 percent is budgeted to be spent in North
America, 28 percent in Latin America and the Caribbean, 24 percent in Australia
and the South Pacific and 25 percent in various countries by Niugini Mining.
Seven percent of the budgeted amount is as yet undesignated. During 1993, the
Company spent approximately $9.7 million on exploration and evaluation
activities.

The Company has budgeted $56.7 million for capital expenditures for
1994 which includes $13.8 million for construction and development of the Reona
project, $7.8 million for the Red Dome expansion, lesser amounts for
development of the Crown Jewel, Phoenix, Cindy, Lihir and Kori Kollo expansion
projects and $14.1 million for additions and replacements. Of the total 1994
budget, 35 percent is expected to be spent in North America, 28 percent in
Latin America and the Caribbean, 32 percent in various countries by Niugini
Mining and 5 percent in the South Pacific. The Company spent $57.1 million for
capital expenditures in 1993. The Company routinely evaluates additional
capital project, acquisition and merger opportunities.

Forward Sales and Hedging

In order to minimize exposure to decreasing prices for portions of
its gold production, the Company has in the past and may in the future, from
time to time, hedge future gold production by entering into contracts, such as
spot deferred sales contracts, fixed forward sales contracts and put options.

Fixed forward sales contracts require the future delivery of gold
at a specified price on a specified delivery date. Spot deferred sales
contracts allow the Company to defer the delivery of gold under the contract to
a later date at the original contract price plus the prevailing premium at the
time of deferral, as long as certain conditions are satisfied. Although spot
deferred sales contracts could limit amounts realizable during a period of
rising prices, the Company may "roll forward" its spot deferred contracts to
future periods in order to realize current market increases, while maintaining
future downside protection. Various factors influence the decision to close a
spot deferred sales contract or to roll the contract forward to a later date.
Purchased put options give the Company the right, but not the obligation to
sell gold at a predetermined price on a predetermined date thereby allowing
full participation by the Company in favorable price movements.

55
<PAGE> 58
As of December 31, 1993, the following table summarized the
Company's hedging transactions:

<TABLE>
<CAPTION>
Weighted
Average Price Period
Per Unit ------
--------
<S> <C> <C>
BMG:
Spot deferred sales contracts
154,000 oz gold $ 367 June 94 - June 95

Niugini Mining:
Spot deferred sales contracts
81,400 oz gold $ 381 Jan 94 - Sept 95

Fixed forward sales contracts
180,000 oz gold $ 328 Jan 94 - Dec 96
1,819,000 lbs copper $ .99 Jan 94

Inti Raymi:
Spot deferred sales contracts
98,500 oz gold $ 364 Jan 94 - Sept 94

Purchased put options
180,000 oz gold $ 350 Jan 94 - Aug 94
</TABLE>

Gains and losses related to these hedging transactions are
recognized in revenues when the related production is sold. In addition, costs
associated with the purchase of certain of the hedge instruments, amounting to
$.6 million for open put options and $1.5 million for Inti Raymi's open spot
deferred sales contracts as of December 31, 1993, are also deferred and
recognized concurrently with the revenues related to the hedged production.

The aggregate amount by which the net market value of the Company's
open fixed forward and spot deferred sales contracts is less than $390 per
ounce of gold, which was the spot price as of December 31, 1993, is $19.4
million, of which $6.2 million is attributable to minority interests.

In January 1994, the Company allowed options contracts covering
22,500 ounces of gold to expire. At the December 31 market price of $390 per
ounce of gold, the Company would allow all remaining open put option contracts
(covering 157,500 ounces of gold) to expire. Open spot deferred sales
contracts would be evaluated to determine if it would be in the best long-term
interests of the Company to either "roll the contracts forward" or deliver
against them. Delivery against spot deferred sales contracts in a period in
which current market prices exceed contract prices will result in recognition
of revenues at prices below current market conditions.

In future periods, the Company may continue to employ selective
hedging strategies, where appropriate, to protect cash flow for specific needs.

Foreign Operations

The Company continues to expand and geographically diversify its
resource base through the exploration, acquisition, development and
exploitation of foreign gold reserves. The Company's identifiable assets
attributable to foreign mining as of December 31, 1993, were approximately $488
million and foreign mining operations represented approximately 77 percent of
the total gross revenues of the Company for the year ended

56
<PAGE> 59
December 31, 1993. As a result, the Company is exposed to risks normally
associated with foreign operations, including political, economic, social and
labor instabilities, as well as foreign exchange controls and currency
fluctuations. Foreign operations and investments may also be subject to laws
and policies of the United States affecting foreign trade, investment and
taxation which could affect the conduct or profitability of those operations.

Dividends

Effective with the calendar year 1993, BMG reduced its annual
dividend on common stock by 50 percent, by replacing its quarterly $.025 per
share dividend payment with semi-annual payments of $.025 per share. Each
semi-annual payment totals approximately $2 million. BMG's dividend policy is
subject to periodic review by BMG's Board of Directors.

During the third quarter of 1993, BMG commenced quarterly dividend
payments to its preferred stockholders. Each such quarterly payment totals
approximately $1.8 million.

Conclusion

During the year ended December 31, 1993, BMG raised $111 million in
net proceeds from the sale of its convertible preferred stock. The Company
expects the cash currently remaining from this offering along with cash flows
from operations and financing facilities currently in place, to be adequate to
meet its cash needs at least through 1994. Funding may also be provided from
offerings of additional securities under the Company's $200 million universal
shelf registration statement, assuming any such offering could be completed
under satisfactory terms.

Proposed Incentive Plan

Management intends to propose to the Board of Directors adoption in
1994 of a new long-term incentive executive compensation plan under which 4
million shares of common stock of BMG would be reserved for grant. The
proposed plan, subject to shareholder approval, would provide for grants of the
following types of executive compensation awards: stock options, stock
appreciation rights, stock grants and cash.

Inflation and Changing Prices

Gold production costs and corporate expenses are subject to normal
inflationary pressures, which, to date, have not had a significant impact on
the Company. The Company's results of operations and cash flows may also be
affected by fluctuations in the market prices of gold, silver and copper, and
to a lesser extent by changes in foreign currency exchange rates. While gold
prices for the last three years have remained, on average, well below 1990
levels, prices have recently strengthened. Changing gold prices, in conjunction
with operating costs incurred by the Company for its operations, affect the net
margins realized by the Company.

57
<PAGE> 60
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

<TABLE>
<CAPTION>
Page
----
<S> <C>
Reports of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Consolidated Statement of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Consolidated Statement of Shareholders'
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Supplemental Financial Information
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
</TABLE>

58
<PAGE> 61
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Battle Mountain Gold Company:

We have audited the accompanying consolidated balance sheets of Battle Mountain
Gold Company (a Nevada corporation) and subsidiaries as of December 31, 1993
and 1992, and the related consolidated statements of income, shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1993. These consolidated financial statements and the schedules referred
to below are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits. We did not audit the financial statements of
Niugini Mining Limited and subsidiaries, which statements reflect assets and
net sales of 17 percent and 29 percent, respectively, of the consolidated totals
as of and for the year ended December 31, 1993, and 15 percent and 35 percent,
respectively, of the consolidated totals as of and for the year ended December
31, 1992. We did not audit the financial statements of Niugini Mining Limited
and subsidiaries or Empresa Minera Inti Raymi S.A., which statements reflect
assets and net sales of 29 percent and 29 percent, respectively, of the
consolidated totals as of and for the year ended December 31, 1991. Those
statements were audited by other auditors whose reports have been furnished to
us and our opinion, insofar as it relates to the amounts included for those
entities, is based solely on the reports of the other auditors.

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 management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the reports of other
auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Battle Mountain Gold Company and
subsidiaries as of December 31, 1993 and 1992, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting principles.

As explained in Note 6 to the consolidated financial statements, effective
January 1, 1992, the Company changed its method of accounting for income taxes
with the adoption of Financial Accounting Standards Board Statement No. 109,
"Accounting for Income Taxes." Also, as explained in Note 7 to the
consolidated financial statements, effective January 1, 1992, the Company
changed its method of accounting

59
<PAGE> 62
for postretirement benefits other than pension plans with the adoption of
Financial Accounting Standards Board Statement No. 106, "Employers' Accounting
for Postretirement Benefits other than Pensions."

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The financial statement schedules
listed in Item 14 (a)(2) are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These financial statement schedules have been subjected
to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, based on our audits and the reports of other
auditors, fairly state in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

ARTHUR ANDERSEN & CO.

Houston, Texas
February 18, 1994

60
<PAGE> 63
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Battle Mountain Gold Company and the Board of Niugini Mining
Limited:

We have audited the consolidated balance sheet of Niugini Mining Limited (a
company incorporated in Papua New Guinea) and subsidiaries as of December 31,
1993 and 1992, and the related consolidated statements of income, shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1993 and the consolidated financial statement schedules which are not
presented separately in the Battle Mountain Gold Company December 31, 1993 Form
10-K. Battle Mountain Gold Company is the Company's majority shareholder.
Those financial statements and the financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express
an opinion on those financial statements and financial statement schedules
based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Niugini Mining
Limited and subsidiaries as of December 31, 1993 and 1992, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1993, in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial statement
schedules referred to above, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material respects, the
information required to be included therein.

COOPERS & LYBRAND

Sydney, Australia
January 22, 1994

61
<PAGE> 64
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
Battle Mountain Gold Company
Houston, Texas, U.S.A.

We have audited the balance sheets of Empresa Minera Inti Raymi S.A. as of
December 31, 1991, and the related statements of income, retained earnings and
cash flows for the year then ended, expressed in United States dollars (not
presented herein). These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

The financial statements have been prepared to enable the Company's majority
shareholder, Battle Mountain Gold Company, to prepare consolidated financial
statements. Accordingly, the financial statements are prepared utilizing
accounting principles that conform to the accounting policies of Battle
Mountain Gold Company rather than the Company's adopted accounting policies.

In our opinion, the financial statements referred to above, prepared for the
purposes described in the preceding paragraph, present fairly, in all material
respects, the financial position of Empresa Minera Inti Raymi S.A. at December
31, 1991 and the results of its operations and its cash flows for the year
then ended, in conformity with accounting principles accepted in the United
States of America as adopted by Battle Mountain Gold Company.

Our audit of the financial statements of Empresa Minera Inti Raymi S.A. also
included an audit of the related financial statement schedules (not presented
herein) listed in Item 14(a) of Form 10-K. In our opinion, these financial
statement schedules present fairly, in all material respects, the information
set forth therein when read in conjunction with the related financial
statements.

MORENO MUNOZ Y CIA.

La Paz, Bolivia
January 17, 1992

62
<PAGE> 65
BATTLE MOUNTAIN GOLD COMPANY
CONSOLIDATED STATEMENT OF INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------
1993 1992 1991
---- ---- ----
(Expressed in thousands except per share amounts)
<S> <C> <C> <C>
GROSS REVENUE $ 207,251 $ 192,190 $ 176,464
Less: freight, allowances and royalties 13,836 10,387 6,222
------- ------- -------
NET SALES 193,415 181,803 170,242
------- ------- -------
COSTS AND EXPENSES
Mining costs 35,906 38,802 28,825
Milling and other plant costs 92,581 78,548 60,550
Depreciation, depletion and amortization 41,389 38,644 28,149
Exploration, evaluation and other lease
costs 9,474 17,132 27,390
Asset write-downs - 32,600 5,573
General and administrative expenses 17,483 17,948 21,082
Taxes, other than income 2,316 3,424 5,071
------- ------- -------
Total costs and expenses 199,149 227,098 176,640

OPERATING LOSS (5,734) (45,295) (6,398)
Interest income 4,647 1,831 4,377
Interest expense (15,061) (10,260) (8,290)
Interest capitalized 6,655 8,885 6,000
Other income (expense), net 5,708 (1,161) (1,214)
------- ------- -------
LOSS BEFORE INCOME TAXES AND
MINORITY INTEREST (3,785) (46,000) (5,525)
Income tax expense (benefit) (4,089) (12,241) 1,018
Minority interest in net (income) loss (4,709) (1,182) 5,369
-------- --------- -------
LOSS BEFORE CUMULATIVE
EFFECTS OF ACCOUNTING CHANGES (4,405) (34,941) (1,174)

CUMULATIVE EFFECTS OF ACCOUNTING CHANGES
(net of taxes):
Postretirement benefits other than pensions
(SFAS No. 106) - (5,342) -
Income taxes (SFAS No. 109) - 3,880 -
------- ------ -------
NET LOSS $ (4,405) $ (36,403) $ (1,174)
Preferred dividends 3,738 - -
------ ------- -------
NET LOSS TO COMMON SHARES $ (8,143) $ (36,403) $ (1,174)
======= ======= =======
LOSS PER SHARE:
Loss before cumulative effects of accounting
changes $ (.10) $ (.44) $ (.02)
Cumulative effects of accounting changes -
(net of taxes):
Postretirement benefits other than pensions $ - $ (.07) $ -
Income taxes $ - $ .05 $ -
------ ------- -------
Net loss $ (.10) $ (.46) $ (.02)
======= ======= =======

DIVIDENDS PER COMMON SHARE $ .05 $ .10 $ .10

AVERAGE COMMON SHARES OUTSTANDING 80,132 79,917 76,555
</TABLE>

- --------------------------------------------------
The accompanying notes are an integral part of these financial statements.

63
<PAGE> 66
BATTLE MOUNTAIN GOLD COMPANY
CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
December 31,
---------------------------
1993 1992
---- ----
ASSETS (Expressed in thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $115,338 $ 45,377
Accounts receivable 37,349 16,297
Inventories 1,068 11,182
Materials and supplies, at average cost 22,916 11,764
Other current assets 3,949 1,488
------- --------
Total Current Assets 180,620 86,108
------- --------
Investments 28,111 23,833
Property, Plant and Equipment, at Cost:
Leasehold and mine development 109,450 85,805

Mining, milling and other equipment 285,405 281,606
Other 249,633 256,859
------- -------
Total Property, Plant and Equipment 644,488 624,270
------- -------
Less accumulated depreciation, depletion and amortization 191,246 167,027
------- -------
Property, Plant and Equipment, net 453,242 457,243
------- -------
Non-current Receivables 142 3,143
Other Assets 6,037 7,157
------- -------
Total Assets $668,152 $577,484
======= =======

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $13,431 $ 6,818
Short-term debt 510 10,000
Accounts payable 13,171 18,878
Payroll and related benefits accrued 2,354 3,487
Accrued interest 6,527 6,788
Other current liabilities 4,279 4,147
------- -------
Total Current Liabilities 40,272 50,118
------- -------

Long-term Debt 179,053 198,593
Other Liabilities 24,607 22,858
------- -------
Total Liabilities 243,932 271,569
------- -------

Minority Interest 54,660 36,136
------- -------

Commitments and Contingencies (Note 14)

Shareholders' Equity:
Preferred stock, $1.00 par value; 20,000,000 shares
authorized, 2,300,000 issued and outstanding at
December 31, 1993 110,579 -
Common stock, $.10 par value; 200,000,000 shares
authorized, 80,266,114 and 80,016,114 shares issued
and outstanding at December 31, 1993 and
1992, respectively 8,027 8,002
Additional paid-in capital 202,011 202,417
Retained earnings 52,260 62,410
Cumulative foreign currency translation adjustment (3,317) (3,050)
------- -------
Total Shareholders' Equity 369,560 269,779
------- -------
Total Liabilities and Shareholders' Equity $668,152 $577,484
======= =======
</TABLE>

- --------------------------------------------------
The accompanying notes are an integral part of these financial statements.

64
<PAGE> 67
BATTLE MOUNTAIN GOLD COMPANY
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------------------------
1993 1992 1991
-------------------------------------------------------------------------------------
(Expressed in thousands)
Preferred Common Common Common
Shares Shares Amount Shares Amount Shares Amount
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON STOCK, $.10 par value;
Authorized 200,000,000 shares:
Balance January 1 - 80,016 $ 8,002 79,801 $ 7,980 71,327 $ 7,133
Shares issued - 250 25 215 22 8,474 847
------- ------- ------- ------- ------ ------- -------

Balance December 31 - 80,266 8,027 80,016 8,002 79,801 7,980
------- ------ ------- ------ ------ ------- -------

ADDITIONAL PAID-IN CAPITAL:
Balance January 1 - - 202,417 - 200,921 - 134,022
Shares issued - - 1,732 - 1,496 - 66,899
NML equity offering - - (2,138) - - - -
------- ------- ------- ------- ------- ------- -------
Balance December 31 - - 202,011 - 202,417 - 200,921
------- ------- ------- ------- ------- ------- -------

PREFERRED STOCK, $1.00 par value;
Authorized 20,000,000 shares;
$50.00 liquidation preference
per share:
Balance January 1 - - - - - - -
Shares issued 2,300 - 110,579 - - - -
------- ------- ------- ------- ------- ------- -------
Balance December 31 2,300 - 110,579 - - - -
------- ------- ------- ------- ------- ------- -------

RETAINED EARNINGS:
Balance January 1 - - 62,410 - 106,813 - 115,761

Net loss - - (4,405) - (36,403) - (1,174)
Common stock dividends - - (2,007) - (8,000) - (7,774)
Preferred stock dividends - - (3,738) - - - -
------- ------- ------- ------- ------- ------- -------
Balance December 31 - - 52,260 - 62,410 - 106,813
------- ------- ------- ------- ------- ------- -------

CUMULATIVE FOREIGN CURRENCY
TRANSLATION ADJUSTMENT - - (3,317) - (3,050) - (790)
------- ------- ------- ------- ------- ------- -------
MARKETABLE EQUITY
SECURITIES VALUATION ALLOWANCE - - - - - - (362)
------- ------- ------- ------- ------- ------- -------
TOTAL SHAREHOLDERS' EQUITY 2,300 80,266 $369,560 80,016 $269,779 79,801 $314,562
======= ======= ======= ======= ======= ======= =======
</TABLE>

- --------------------------------------------
The accompanying notes are an integral part of these financial statements.

65
<PAGE> 68
BATTLE MOUNTAIN GOLD COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1993 1992 1991
---- ---- ----
(Expressed in thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,405) $(36,403) $ (1,174)
------- -------- --------
Adjustments to reconcile net loss
to cash flows from operating activities:
Depreciation, depletion and amortization 41,389 38,644 28,149
Exploration and evaluation costs 6,621 12,535 21,906
Unproven leases abandoned 146 1,535 537
Gain from sale of assets (6,429) - -
Asset write-downs - 32,600 5,573
Accrued reclamation costs 1,517 2,552 3,244
Cumulative effects of accounting changes - 1,462 -
Valuation of marketable securities - 2,117 -
Loss on foreign currency transactions - - 661
(Increase) decrease in accounts and note receivable (13,337) (2,439) 4,260
(Increase) decrease in inventories 6,857 (2,140) (4,698)
Increase in materials and supplies (1,762) (2,249) (1,016)
(Increase) decrease in other current assets (2,091) 483 (537)
Increase (decrease) in accounts payable
and other current liabilities (5,058) 5,419 1,692
Deferred income tax benefit - (8,741) (2,375)
Other net changes 6,617 (3,894) (2,378)
------- --------- --------
TOTAL ADJUSTMENTS 34,470 77,884 55,018
------- --------- --------
NET CASH FLOWS FROM OPERATING ACTIVITIES 30,065 41,481 53,844
------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of marketable securities - - 18,807
Proceeds from sales of assets 10,729 2,926 -
Investments in marketable securities - - (12,660)
Investment in Crown Jewel (7,595) (6,862) (5,179)
Capital expenditures (57,070) (101,886) (88,117)
Exploration and evaluation expenditures (6,621) (12,535) (21,906)
(Increase) decrease in restricted cash (53) 16,900 (17,954)
Other, net 329 (2,014) 1,092
-------- --------- --------
NET CASH FLOWS USED IN INVESTING ACTIVITIES (60,281) (103,471) (125,917)
-------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from stock issuances 130,934 - 1,065
Cash proceeds from borrowings 36,891 182,981 20,500
Cash dividend payments (7,743) (7,996) (7,563)
Debt repayments (59,869) (95,488) (5,816)
Other, net - - (30)
------- --------- --------
NET CASH FLOWS FROM FINANCING ACTIVITIES 100,213 79,497 8,156
------- --------- --------
EFFECT OF EXCHANGE RATE CHANGES (36) (850) (183)
------- --------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 69,961 16,657 (64,100)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 45,377 28,720 92,820
------- ------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $115,338 $ 45,377 $ 28,720
======= ======= ========
</TABLE>

- ----------------------------------------------------
The accompanying notes are an integral part of these financial statements.

66
<PAGE> 69
BATTLE MOUNTAIN GOLD COMPANY
Notes to Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies

Principles of Consolidation -

The accompanying consolidated financial statements include the
accounts of the Battle Mountain Gold Company ("BMG"), its wholly-owned and
majority-owned subsidiaries and corporate joint ventures in which the Company
owns a majority share ("the Company"). The accounts of Niugini Mining Limited,
a Papua New Guinea precious metals exploration, development and production
company ("Niugini Mining"), have been consolidated with the Company's from
January 1, 1989 (See Note 8). The accounts of Empresa Minera Inti Raymi S.A.,
a Bolivian gold mining company ("Inti Raymi"), have been consolidated with the
Company's from April 1, 1990 (See Note 8). All significant intercompany
transactions have been eliminated in consolidation. Majority-owned,
non-corporate joint ventures are proportionately consolidated. Non-corporate
joint ventures in which the Company owns less than a majority interest and has
the ability to exercise significant influence are proportionately consolidated,
while such corporate joint ventures are accounted for by the equity method.
All other joint ventures are carried at cost. The issuance of stock by
subsidiaries is accounted for as a capital transaction in the consolidated
financial statements. Certain prior-period items have been reclassified in the
consolidated financial statements in order to conform with current year
presentation.

Inventories -

Inventories, consisting of gold, silver and copper, are reported at
the lower of cost, using the first-in, first-out method, or market.

Property, Plant and Equipment -

Property, plant and equipment are stated at cost. Expenditures for
development of new mines and major development expenditures at existing mines,
which are expected to benefit future periods, are capitalized and amortized,
generally, on the units of production method. Exploration and development
costs expended to maintain production at operating mines are charged to expense
as incurred.

Other property, plant and equipment includes capitalized lease
costs and mine development in progress. Capitalized exploration lease costs
are apportioned to expense in interim periods through a provision for
abandonment of unproductive projects. Actual abandonments of unproductive
projects are charged against the allowance. The balance in the allowance for
abandonment is then evaluated on an annual basis and adjusted as necessary.

Generally, depreciation, depletion and amortization of mining
properties and related assets are determined using the units of production
method based upon estimated recoverable ore reserve tonnages at the beginning
of the year. However, assets having an estimated life of less than the
estimated life of the mineral deposits are depreciated on the straight-line
method based on the expected life of the asset. Write-downs and write-offs of
depreciable properties are included in accumulated depreciation, depletion and
amortization.

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<PAGE> 70
Exploration and Evaluation Expenditures -

With the exception of lease acquisition costs incurred to acquire
mineral rights, the Company charges all exploration and predevelopment
evaluation expenditures to expense as incurred.

Capitalization of Operating Results During Mine Development -

During the start-up period for each developing mine, operating
costs may exceed revenues earned from the sale of precious metals produced. In
these instances, all costs incurred during this precommercial production
period, net of revenues earned, are capitalized as property costs.

Capitalization of Interest -

Interest expense incurred in connection with borrowings
attributable to pre-production stage projects is capitalized until those
projects commence commercial production.

Reclamation -

Reserves for estimated future costs for reclamation of the
Company's operating sites are accrued on a units of production basis over the
estimated lives of the respective mines. These costs are charged to milling
and other plant costs as accrued (See Note 14).

Revenue Recognition -

Revenue is recognized when the dore (a combination of gold and
silver) or concentrates are delivered against sales agreements or contracts and
risk of loss passes to the buyer.

Currency Translation -

Foreign currency financial statements are translated into U.S.
dollars using current exchange rates and translation gains and losses are
accumulated in the balance sheet caption "Cumulative Foreign Currency
Translation Adjustment," a separate component of shareholders' equity.

Earnings (Loss) Per Share -

Earnings (loss) per share is computed by dividing net income
(loss) attributable to common stock by the weighted average number of
shares outstanding for the year, adjusted for common stock equivalents, if
dilutive. The effects of common stock equivalents and other dilutive
securities are not included in the computation of the 1993, 1992 or 1991 losses
per share because of their antidilutive effect.

Statement of Cash Flows -

At December 31, 1993, cash and cash equivalents included $44.7
million and $9.3 million attributable to Niugini Mining and Inti Raymi,
respectively. Cash and cash equivalents at December 31, 1992, included $29.6
million and $7.3 million held by Niugini Mining and Inti Raymi, respectively.
At December 31, 1993 and December 31, 1992, other

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<PAGE> 71
assets included $1.3 million and $1.4 million, respectively, of restricted cash
held by Niugini Mining.

For purposes of the Consolidated Statement of Cash Flows, the
Company considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents.

For the years ended December 31, 1993, 1992, and 1991, the Company
paid $.7 million, $3.2 million and $7 million respectively, for income taxes.
The Company paid $6.8 million, $1.4 million and $1.5 million in interest, net
of amounts capitalized, during 1993, 1992, and 1991, respectively.

For 1993 and 1992, the Company's investing activities included no
significant non-cash transactions. During 1991, non- cash investing activities
included the issuance of 8,233,788 shares of BMG's common stock (market value
of $65.9 million) to increase BMG's equity interest in Inti Raymi to 85
percent.

Hedging Transactions -

To hedge the effect of price changes on a portion of its
production, the Company periodically sells metals products under fixed forward
and spot deferred sales contracts. Spot deferred sales contracts allow the
Company to defer the delivery of gold under the contract to a later date at the
original contract price plus the prevailing premium at the time of deferral, as
long as certain conditions are satisfied. Although spot deferred sales
contracts could limit amounts realizable during a period of rising prices, the
Company may "roll forward" its spot deferred contracts to future periods in
order to realize current market price increases, while maintaining future
downside protection. It also purchases put option contracts on metals
products. Gains, losses or expenses related to these transactions are netted
against revenue when the hedged production is sold (See Note 15).

Note 2. Asset Impairments

During the third quarter of 1992, the Company recognized charges
totalling approximately $23.3 million, net of $11 million in income tax
benefits for the impairment in value of certain of the Company's assets. The
charges included (1) a write- down of $17.6 million, net of a $9 million income
tax benefit, of the Company's investment in the San Luis mine in Colorado to
reduce the carrying value of the investment to a level which the Company
believed would be recoverable under then existing and expected future market
conditions (lower gold prices, compared with those at the time of project
conception, and greater than anticipated capital expenditures resulting from a
difficult start-up period led to the write-down), (2) a write-off of $4
million, net of a $2 million income tax benefit, of the Company's investment in
the previously closed Canyon Placer facility, which was abandoned because of a
persistently weak gold market, and (3) an impairment of $1.7 million, included
as other income (expense), net, to adjust to current market the carrying value
of certain marketable equity security investments acquired upon the previous
disposition of a discontinued project. The Company did not recognize any
similar charges for asset impairments during 1993.

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<PAGE> 72
Note 3. Investments

The Company's long-term investments include the following:

<TABLE>
<CAPTION>
December 31,
------------------------
1993 1992
---- ----
(expressed in thousands)
<S> <C> <C>
Crown Jewel joint venture $24,639 $17,045
Other joint ventures 142 1,828
Marketable equity securities - 2,058
Cash surrender value of life
insurance, net 3,029 2,511
Other 301 391
------ ------
$28,111 $23,833
====== ======
</TABLE>

Crown Jewel Joint Venture -

On March 14, 1990, the Company purchased, for $5 million, an option
to acquire a 51 percent joint venture interest in Crown Resources Corporation's
Crown Jewel gold project and surrounding exploration rights in Washington
state. The Company paid an additional $5 million on January 4, 1991, to
exercise the option and retain the right to acquire an ownership interest in
the project. The Company has spent an additional $23.1 million as of December
31, 1993, evaluating and developing the project. The evaluation expenditures
were charged to expense in the periods incurred prior to March 31, 1992, when
the Company decided to proceed with the development of the project. Since that
time, all evaluation expenditures ($14.4 million) have been capitalized.

To earn a 51 percent undivided interest in the project and certain
adjacent mineral claims, the Company would be required to fund an estimated
additional $62 million for construction and development of the project through
commencement of commercial production.

Other Joint Ventures -

Other joint ventures consist primarily of capitalized lease costs
incurred by exploration joint ventures to acquire mineral rights.

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<PAGE> 73
Note 4. Marketable Securities

The Company carries any non-current portfolios of marketable
securities at the lower of aggregate cost or market. As of December 31, 1993,
the Company had sold all of its marketable securities. For 1992, the
non-current marketable securities consisted of common stocks and were included
in investments (See Note 3).

<TABLE>
<CAPTION>
December 31,
----------------------------
1993 1992
---- ----
(expressed in thousands)
<S> <C> <C>
Non-current equity securities
Cost $ - $ 2,058
Market - 3,178
------- -------
Net unrealized gain $ - $ 1,120
Gross unrealized gain $ - $ 1,120
</TABLE>

Net unrealized losses associated with the marketable securities
portfolios are charged to shareholders' equity. Net realized gains or losses
are charged to other income.

Gross and net realized gains of $2.7 million were included in other
income (expense), net, during the year ended December 31, 1993. There were
no gains or losses realized during the years ended December 31, 1992 and 1991.

During 1993, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." This
standard changes the methods of classifying and accounting for investments in
equity securities that have readily determinable fair values and all
investments in debt securities. The Company is required to adopt the new
accounting and disclosure rules in the first quarter of 1994. Adoption of the
standard is not expected to have a material effect on the Company's financial
position or on its results of operations.

Note 5. Other Income (Expense), Net

Included in other income (expense), net, are certain non-operating
revenues, net of related expenses, consisting of:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------

1993 1992 1991
---- ---- ----
(expressed in thousands)
<S> <C> <C> <C>
Impairment of non-current marketable
securities $ - $ (2,117) $ -
Foreign currency exchange gains (losses) 228 760 (724)
Gain on sale of investments 2,697 - -
Gain on sale of exploration project 3,730 - -
Other (947) 196 (490)
------- ------- -------
$ 5,708 $ (1,161) $ (1,214)
======= ======= =======
</TABLE>

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<PAGE> 74
Note 6. Federal and International Income Tax

The discussion of income taxes herein does not include the
cumulative income tax effects of accounting changes explained in Note 7 to
these Consolidated Financial Statements.

Federal and international income tax expense (benefit) consisted of
the following:

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
1993 1992 1991
---- ---- ----
(expressed in thousands)
Current
<S> <C> <C> <C>
United States $ (5,117) $ (4,665) $ 1,353
International 1,028 1,165 2,040
------- ------- -------
Total current $ (4,089) $ (3,500) $ 3,393
Deferred
United States $ - $ (8,741) $ (2,375)
International - - -
------- ------- ------
Total deferred $ - $ (8,741) $ (2,375)
------- ------- ------
$ (4,089) $ (12,241) $ 1,018
======= ======= ======
</TABLE>

Consolidated income before income taxes and the cumulative effect
of the accounting change includes income (loss) from international operations
of $13.8 million, $1.7 million and $(6.5) million in 1993, 1992 and 1991,
respectively.

Effective January 1, 1992, the Company adopted the provisions of
SFAS No. 109. SFAS No. 109 requires recognition of deferred tax liabilities
and assets for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the difference
between the financial statement and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to reverse. Effective January 1, 1992, the Company recorded a deferred tax
liability of $12,611,000, representing the net effect of adopting SFAS No. 109
as of that date. This liability was comprised of a $16,491,000 purchase
acquisition liability related to the Westworld acquisition (See Note 8), which
was capitalized to property, and a partially-offsetting net $3,880,000 tax
benefit which has been reflected in the consolidated statement of income as the
cumulative effect of the accounting change.

For the year 1992, loss before cumulative effects of accounting
changes includes an additional income tax benefit of approximately $8,741,000
or $.11 per share resulting from the adoption of SFAS No. 109.

The significant components of the deferred tax benefit in 1992 were
as follows:

<TABLE>
<CAPTION>
(expressed in thousands)
------------------------
<S> <C>
Deferred tax expense resulting from temporary
differences between book and tax bases $ (6,472)
Recognition of alternative minimum tax credit (2,269)
------
1992 Deferred tax benefit $ (8,741)
=======
</TABLE>

Prior to the adoption of SFAS No. 109, the Company's provision for
deferred income tax resulted from timing differences in the recognition of
revenue and expense for tax and financial

72
<PAGE> 75
reporting purposes. For the year ended December 31, 1991, the sources of these
differences and the tax effect of each are as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1991
----
(expressed in thousands)
<S> <C>
Depreciation and amortization for
financial purposes under amounts
for tax purposes $ 231
Mining exploration and development costs
deducted for tax purposes under
amounts deducted for financial purposes (896)
Cost of goods sold for financial
purposes under amounts for
tax purposes 462
General and administrative expenses
capitalized for tax purposes (961)
Reclamation costs deducted for financial
purposes over amounts for tax purposes (972)
Write-downs of assets for financial purposes
not recognized for tax purposes (1,891)
Alternative minimum tax 98
Earnings of international subsidiaries, net of
dividend distributions (1,073)
Interest deducted for tax purposes
over amounts expensed or capitalized and
amortized for financial purposes 2,292
Withholding taxes paid on international
earnings in excess of amounts provided for
financial purposes (1,740)
Other, net 2,075
------
$(2,375)
======
</TABLE>

73
<PAGE> 76
The Company's deferred tax position at December 31, 1993 and 1992,
is comprised of the following:

<TABLE>
<CAPTION>
1993 1992
---- ----
(expressed in thousands)
<S> <C> <C>
Deferred tax assets $ 56,620 $ 44,375
Deferred tax liabilities (48,259) (36,736)
Valuation allowance (8,361) (7,639)
------ ------
Net deferred tax asset (liability) $ - $ -
====== ======
</TABLE>

Temporary differences and carryforwards which gave rise to
significant portions of deferred tax assets and liabilities at December 31,
1993 and 1992 are as follows:
<TABLE>
<CAPTION>
1993 1992
---- ----
(expressed in thousands)
<S> <C> <C>
Net operating loss carryforwards $ 17,229 $ 9,941
Alternative minimum tax credit
carryforward 5,828 10,467
Employee compensation and benefits
accrued 4,425 3,962
Property, plant and equipment (16,313) (16,552)
Undistributed earnings of
international subsidiaries (5,080) (1,411)
Other, net 2,272 1,232
Valuation allowance (8,361) (7,639)
------ -------
Net deferred tax asset (liability) $ - $ -
====== =======
</TABLE>

A reconciliation of income tax at the statutory rate to income tax
expense (benefit) follows:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------
1993 1992 1991
---- ---- ----
(expressed in thousands)
<S> <C> <C> <C>
Income tax based on statutory rate of 35% for 1993
and 34% for 1992 and 1991 $(2,973) $ (16,042) $ (53)
Increases (reductions) resulting from:
Statutory depletion in excess of cost
basis - (2,654) (4,604)
Foreign Sales Corporation exemption - (390) (1,408)
Undistributed (income) losses of
international subsidiaries not
subject to income tax (1,030) (302) 2,495
Change in valuation allowance 722 7,639 -
Alternative minimum tax - - 4,743
Other, net (808) (492) (155)
------ ------- -------
Income tax expense (benefit) $(4,089) $(12,241) $ 1,018
====== ======= =======
</TABLE>

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<PAGE> 77
The Omnibus Budget Reconciliation Act of 1993, enacted on August
10, 1993, retroactively increased the federal statutory income tax from 34
percent to 35 percent for periods beginning on or after January 1, 1993. The
effect of the rate change was not significant to the Company's net deferred
income tax position.

Taxes have been provided on the undistributed earnings of
subsidiaries and joint ventures with the exception of Niugini Mining which is
in a cumulative loss position.

The Company and its domestic subsidiaries file a consolidated U.S.
federal income tax return. Such returns have been closed through the year
1990.

At December 31, 1993, the Company had approximately $5.8 million of
alternative minimum tax credits available on an indefinite carryforward basis,
and approximately $17.2 million of regular tax net operating losses expiring
beginning in 2007, available to offset future U.S. federal income tax.

Note 7. Benefits Plans

Pension Plans -

Substantially all U.S. employees of the Company are covered by
non-contributory pension plans. The U.S. plans provide benefits based on
participants' years of service and compensation or defined amounts for each
year of service. The Company makes annual contributions to the U.S. plans that
comply with the minimum funding provisions of the Employee Retirement Income
Security Act ("ERISA").

During 1993, the plans for Australian employees were changed from
non-contributory defined benefit plans to defined contribution plans.

Pension costs are generally accrued and charged to expense
currently. Net periodic pension cost included the following components:

<TABLE>
<CAPTION>
Australian
U. S. Plans Plans
---------------------------- --------------
1993 1992 1991 1992 1991
---- ---- ---- ---- ----
(expressed in thousands)
<S> <C> <C> <C> <C> <C>
Service cost - benefits earned
during the year $ 648 $ 736 $ 888 $ 296 $ 311
Interest cost on projected
benefit obligations 1,611 1,433 1,203 103 134
Expected return on plan assets (1,773) (1,643) (1,116) (147) (206)
Net amortization and deferral (88) (131) 118 - -
------ ----- ----- ----- -----
Net periodic pension cost $ 398 $ 395 $ 1,093 $ 252 $ 239
====== ===== ===== ===== =====
</TABLE>

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<PAGE> 78
The projected long-term rate of return on U.S. plan assets was 9
percent at December 31, 1993. At December 31, 1992 and 1991, the projected
long-term rate of return was 8 percent for the U.S. plans and 9 percent for the
Australian plans.

Actual return on U.S. plans' assets was $.3 million for the year
ended December 31, 1993, $1.1 million for the year ended December 31, 1992, and
$5.3 million for the year ended December 31, 1991. For Australian plans,
actual return on plan assets for the years ended December 31, 1992 and 1991 was
$(.1) million and $.1 million, respectively.

The following sets forth the plans' funded status and the related
amounts as of December 31, 1993 and 1992:
<TABLE>
<CAPTION>
U. S. Plans Australian Plans
------------------- ------------------
As of December 31, As of December 31,
------------------- ------------------
1993 1992 1992
---- ---- ----
(expressed in thousands)
<S> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligation $ 19,343 $ 14,247 $ 603
Accumulated benefit obligation $ 21,118 $ 15,459 $ 611
Projected benefit obligation $ 23,579 $ 18,454 $ 1,074
Plan assets at fair value $ 22,965 $ 21,973 $ 1,612
------- ------- -------
Plan assets in excess of (less than) Projected
Benefit Obligation $ (614) $ 3,519 $ 538
Unrecognized net gain and effects of changes in
actuarial assumptions (572) (6,107) (119)
Unrecognized net asset at transition (1,033) (1,151) (4)
Prior service cost not yet recognized in net
periodic pension cost 3,906 4,189 -
------- ------- -------
Prepaid pension cost $ 1,687 $ 450 $ 415
======= ======= =======
</TABLE>

Plan assets include equity securities, common trust funds and
various debt securities. Weighted average rate assumptions used in determining
estimated benefit obligations were as follows:

<TABLE>
<CAPTION>
Australian
U.S. Plans Plans
------------------ ---------

1993 1992 1992
---- ---- ----
<S> <C> <C> <C>
Discount Rate 7.0% 9.0% 8.5%
Rate of increase in compensation levels 6.0% 9.0% 6.5%
</TABLE>

Early Retirement Program -

In July 1992, twenty-nine of the Company's salaried employees
elected to accept early retirement benefits offered by the Company as part of
general cost reduction efforts. In connection with these special benefits, a
$1.3 million charge (net of a $.7 million income tax benefit) was taken against
1992 earnings.

Contribution Plans -

The Company has defined contribution plans available for all
full-time U.S. salaried employees and all full-time U.S. hourly employees.
The plans provide for savings

76
<PAGE> 79
contributions by employees from 1 to 16 percent of their compensation, subject
to ERISA limitations. The Company matches 50 to 100 percent of employee
contributions with BMG's common stock, subject to a limit of 6 percent of an
employee's compensation during each plan year. The Company began matching of
the hourly employees' contributions with BMG's common stock on July 1, 1991.

The Company has defined contribution plans available for all
Australian salaried and hourly employees. The Company's contributions to the
salaried plan are determined in accordance with the trust deed. The Company's
contributions to the hourly plan are determined in accordance with the union
award.

All Company contributions to the plans are expensed and funded
currently. The cost of such Company contributions was $.7 million in 1993, $.4
million in 1992, and $.8 million in 1991.

Postretirement Health Care and Life Insurance Benefits -

Substantially all of the Company's U.S. employees may become
eligible for certain unfunded health care and life insurance benefits when they
reach retirement age while working for the Company. Prior to 1992, the cost of
retiree health care and life insurance benefits has been minimal and has been
recognized as an expense as claims or premiums were paid.

In October 1992, the Company announced its decision to adopt SFAS
No. 106, "Employers' Accounting for Postretirement Benefits other than
Pensions", effective January 1, 1992. This standard requires that the expected
cost of these benefits must be charged to expense during the years that the
employees render service. As a result of the adoption, the Company's results
of operations for the year ended December 31, 1992, reflected an accrued charge
of $5.3 million (net of $1.4 million in income tax benefits) representing the
cumulative effect of the change in accounting principle for periods prior to
1992. Ongoing postretirement benefit costs recognized under this standard do
not differ significantly from those that would have been reported under the
previous method.

Net periodic postretirement benefit cost for the years ended
December 31, 1993 and 1992, included the following components (in thousands):

<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Service cost $ 367 $ 283
Interest cost on accumulated
benefit obligation 644 572
----- ----
Net periodic postretirement
benefit cost $1,011 $ 855
===== =====
</TABLE>

77
<PAGE> 80
The following table presents the plans' status at December 31, 1993
and 1992 (in thousands):
<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Accumulated postretirement benefit
obligation:
Retirees $ 4,993 $ 4,386
Fully eligible active plan
participants 676 408
Other active plan participants 3,684 2,495
------ -------
$ 9,353 $ 7,289
Unrecognized net loss (1,609) (288)
------ ------
Accrued postretirement benefit cost $ 7,744 $ 7,001
====== ======
</TABLE>

The discount rate used in determining the accumulated
postretirement benefit obligation was 7 percent for 1993 and 9 percent for
1992. For 1993 and 1992, the assumed annual rate of increase in the per capita
cost of covered health care benefits was 14 percent. In 1993 and 1992, a
gradual decrease in the rate is assumed through the years, 1999 and 2001,
respectively, when the rate is estimated to reach 7 percent and remain at that
level thereafter. A one-percentage-point increase in the assumed health care
cost trend rates would increase the accumulated postretirement benefit
obligation as of December 31, 1993, by approximately $1.8 million, and the
total of the service and interest cost components of net periodic
postretirement health care cost for 1993 by approximately $187,000.

Postemployment Benefits -

During 1992, FASB issued SFAS No. 112, "Employers' Accounting for
Postemployment Benefits". This standard requires that the expected cost of
these benefits must be charged to expense during the periods that employees
vest in these benefits. This is a change from the Company's current policy of
recognizing these costs as an expense when paid. The Company is required to
adopt the new accounting and disclosure rules in the first quarter of 1994.
Adoption of the standard will not have a material effect on the Company's
financial position or on its results of operations.

Note 8. Acquisitions

Niugini Mining -

In the aggregate, since January 1, 1989, the Company has paid
$179.6 million for 47.5 million shares of the common stock of Niugini Mining.
In December 1993, Niugini Mining issued 5.8 million of its common shares at
A$5.00 per share in a public offering which provided net proceeds of
approximately $19.1 million U.S. equivalent. As a result of this stock
offering, BMG's ownership interest in Niugini Mining decreased from 56.5
percent to 52.6 percent. In December 1993, the Company recorded a $2.1 million
adjustment to reduce the carrying value of its investment in Niugini Mining to
reflect the reduction in ownership interest. This adjustment was charged to
shareholders' equity and not charged against net income because the Company
believed the carrying value of the investment to

78
<PAGE> 81
be fully recoverable. Based on existing Niugini Mining employee incentive
option schemes, the Company ownership could be diluted to as low as 50.03
percent.

The acquisition of Niugini Mining has been accounted for under the
purchase method of accounting. The Company has allocated its purchase cost to
the fair value of its share of Niugini Mining's net assets. The allocation to
the individual assets and liabilities acquired was based on the estimated fair
value of those assets and liabilities as of the acquisition date. At December
31, 1993, the carrying value attributed to the Company's share of the Lihir
gold project exceeded its proportionate share of Niugini Mining's historical
cost basis in the project by $132.5 million. Such excess will be amortized
based on the estimated recoverable reserves attributable to the Lihir project
upon commencement of production.

Interest costs amounting to $6 million in 1993, $6 million in 1992,
and $6 million in 1991 were capitalized in connection with the Lihir gold
project.

Inti Raymi -

On March 31, 1989, the Company purchased 33.3 percent of the
outstanding stock of Inti Raymi. In April 1990, the Company acquired an
additional 17.7 percent of the outstanding stock of Inti Raymi to increase the
Company's ownership interest to 51 percent. From April 1, 1990, the accounts
of Inti Raymi have been consolidated with those of the Company.

On May 28, 1991, the Company completed a merger with Westworld
Resources, Inc., a U.S. natural resources company ("Westworld"), and a separate
acquisition of additional shares of Inti Raymi from Zeland Mines S.A., a
Panamanian mining company ("Zeland"). In combination, these transactions
increased the Company's equity ownership of Inti Raymi from 51 percent to 85
percent. As of December 31, 1993, the Company had invested an aggregate of
$35.9 million in cash and 9 million of its common shares (valued at
approximately $76.3 million) to acquire its 85 percent equity interest in Inti
Raymi.

Using the purchase method of accounting, the Company has allocated
its Inti Raymi purchase cost to the fair value of its share of Inti Raymi's net
assets. At December 31, 1993, the carrying value attributed to the Company's
share of the Kori Kollo gold deposit (including a $16.5 million deferred tax
charge capitalized in connection with the Westworld purchase acquisition) (See
Note 6), exceeded its proportionate share of Inti Raymi's historical cost basis
in the deposit by $119.9 million. This excess has been capitalized to property
and is being amortized by the units of production method based on the deposit's
estimated recoverable reserves. Amortization of the excess cost amounted to
$8.6 million in 1993, $3.0 million in 1992 and $1.9 million in 1991.

Interest costs amounting to $.6 million in 1993 and $2.8 million in
1992 were capitalized in connection with the Kori Kollo project.

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<PAGE> 82
Pro Forma Financial Information -

The following unaudited pro forma information presents consolidated
net sales, net loss and loss per share for the year ended December 31, 1991, as
if the Company had acquired its 85 percent equity interest in Inti Raymi at the
beginning of that period. This unaudited pro forma information is not
necessarily indicative of the actual results of operations that would have been
achieved had the acquisition been consummated as of the assumed date.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1991
----
(Unaudited)
(expressed in thousands
except per share amounts)
<S> <C>
Gross Revenue $176,464

Net Loss $ (832)

Loss Per Share $ (.01)
</TABLE>

Note 9. Common Stock and Stock Options

Common Stock -

On May 28, 1991, in a merger agreement with Westworld, which owned
24.5 percent of Inti Raymi's outstanding shares, the Company exchanged
6,004,196 of its common shares (valued at approximately $48 million) with
Westworld shareholders for all of Westworld's outstanding shares.
Simultaneously, the Company exchanged 2,229,592 of its common shares (valued at
approximately $17.9 million) with Zeland for 9.5 percent of Inti Raymi's
outstanding shares (See Note 8).

Reference is made to Notes 10 and 11 for discussion regarding the
number of shares of common stock reserved for issuance for the conversion of
the Company's outstanding convertible preferred stock and convertible
subordinated debentures.

Stock Options -

The Company has a stock option plan available to officers and key
employees covering non-qualified and incentive stock options. A total of
1,980,000 shares of common stock is reserved for issuance under the plan, of
which 8,549 shares remained available for granting at December 31, 1993. At
December 31, 1992, there were 868,335 shares available for granting under the
plan. During 1993, 71,815 stock option shares expired and were put back into
the available pool. Non-employee directors of the Company are granted
non-qualified stock options under the Non-qualified Stock Option Plan for
Outside Directors, which was approved by the Company's shareholders on April
21, 1992. Under this plan, a total of 250,000 shares of the Company's common
stock are reserved for issuance, of which

80
<PAGE> 83
177,500 shares remained available for granting at December 31, 1993. At
December 31, 1992, there were 198,000 shares available for granting under the
plan. Options granted under the above plans are exercisable under the terms of
the respective option agreements at the market price of the common stock at the
date of grant, subject to antidilution adjustments in certain circumstances.
Payment of the exercise price may be made in cash or in shares of common stock
previously owned by the optionee, valued at current market value.

Under the deferred income stock option plan for officers and
directors, each participant may elect to receive a non- qualified stock option
in lieu of a portion of his compensation. A maximum of 2,000,000 shares of
common stock is issuable under the plan, of which 1,774,641 shares remained
available for granting at December 31, 1993. At December 31, 1992, 1,793,758
shares remained available for granting under the plan. Options granted
pursuant to the plan become exercisable at the beginning of the calendar year
immediately following the year in which the option was granted. They expire no
later than 10 years after the date of grant. The amount of deferred
compensation is accrued as compensation expense during the period earned.

81
<PAGE> 84
Additional information for 1993 related to the Company's stock
option plans follows:

<TABLE>
<CAPTION>
Number of Shares Option Price
Under Option Range Per Share
---------------- ---------------
<S> <C> <C>
Outstanding at December 31, 1992 1,104,368 $ 5.88 to $20.75
Granted 971,218 $ 4.83 to $ 7.63
Exercised 158,500 $ 6.38 to $ 8.33
Expired 8,900 $ 6.00 to $ 6.88
--------- ---------------
Outstanding at December 31, 1993 1,908,186 $ 4.83 to $20.75
Exercisable at December 31, 1993 954,269 $ 5.88 to $20.75
</TABLE>

At December 31, 1993, expiration dates for the outstanding options
ranged from July 1, 1996 to August 16, 2003. The weighted average exercise
price per share was $8.83.

Additionally, the Company has reserved 950,000 shares for issuance
under restricted stock and stock award plans. At December 31, 1993, a total of
707,971 shares remained available for issuance under these plans. Compensation
expense related to the plans is accrued ratably over periods vested.

Note 10. Preferred Stock and Stock Rights

The Company's Board of Directors is authorized to divide the
preferred stock into series. With respect to each series the Board may
determine the dividend rights, dividend rates, conversion rights and voting
rights (which may be greater or less than the voting rights of the common
stock). The Board may also determine the redemption rights and terms,
liquidation preferences, sinking fund rights and terms, the number of shares
constituting the series and the designation of each series.

Pursuant to their authority to divide the preferred stock into
series, the Board of Directors in 1988 designated 2,000,000 shares of preferred
stock as "Series A Junior Participating Preferred Stock" for possible issuance
upon the exercise of stock rights as described below.

Stock Rights -

Since November 21, 1988, when the Company's Board of Directors
declared a dividend of one right for each outstanding share of the Company's
common stock, each share of the Company's outstanding common stock carries with
it such right. Each right entitles the holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock, par
value $1.00 per share, for an exercise price of $60, subject to adjustment.
The rights expire on November 10, 1998. They will not be exercisable nor
transferable apart from the common stock until such time as a person or group
acquires 20 percent of the Company's common stock or initiates a tender offer
that will result in ownership of 30 percent of the Company's common stock. In
the event that the Company is merged, and its common stock is exchanged or
converted, the rights will

82
<PAGE> 85
entitle the holders to buy shares of the acquiror's common stock at a 50
percent discount. Under certain other circumstances, the rights can become
rights to purchase the Company's common stock at a 50 percent discount. The
rights may be redeemed by the Company for one cent per right at any time until
10 days following the first public announcement of a 20 percent acquisition of
beneficial ownership of the Company's common stock.

Convertible Preferred Stock -

On May 20, 1993, the Company received $111 million in net proceeds
from the issuance of 2.3 million shares of its convertible preferred stock with
a liquidation preference of $50 per share plus any accrued and unpaid
dividends. Each share of preferred stock will pay an annual cumulative
dividend of $3.25 and is convertible at any time at the option of the holder
into 4.762 shares of Battle Mountain Gold Company common stock. The preferred
stock is redeemable at the option of the Company solely for shares of the
Company's common stock beginning May 15, 1996. There are 11 million shares of
the Company's common stock reserved for issuance upon conversion of the
preferred stock.

Note 11. Debt

Long-term debt outstanding as of December 31:

<TABLE>
<CAPTION>
1993 1992
---- ----
(in thousands)
<S> <C> <C>
Convertible subordinated debentures,
due 2005, 6% $100,000 $100,000
Committed credit facility with banks,
variable rate - 12,500

Inti Raymi Kori Kollo project financing:
IFC loan, variable rate 32,500 32,045
IFC convertible loan, variable rate with 11% minimum 5,000 5,000
OPIC loan, variable rate 37,200 36,600
Restructured OPIC loans, 10.5% 3,819 4,113
CAF loan, variable rate 13,929 15,000
Other 36 153
------- -------
Total 192,484 205,411
Less current portion of long-term debt 13,431 6,818
------- -------
Total long-term debt $179,053 $198,593
======= =======
</TABLE>

On January 4, 1990, the Company received net proceeds of $97.4
million upon the completion of a $100 million Euromarket issue of 6 percent
convertible subordinated debentures, due January 4, 2005. The debentures are
convertible into shares of the Company's common stock at a conversion price of
$20 5/8 per share, subject to adjustment in case of certain events. The
debentures are redeemable at the Company's option at any time after January 4,
1993 (except that they may not be redeemed prior to 1995 unless the closing
market price of the common stock has been at least 130 percent of the
conversion price during a specified period prior to redemption). There are 4.8
million shares of the Company's common stock reserved for issuance upon
conversion of the debentures. Interest payments are due annually on the
anniversary date of the issuance. Proceeds from the issuance were added to
working capital and used for general corporate purposes, including mineral
acquisitions and development of properties. There are no sinking fund
requirements

83
<PAGE> 86
imposed under the debenture agreement. As of February 17, 1994 and 1993, the
market value of the debentures represents a discount to face value of
approximately 5 and 30 percent, respectively.

During 1992, the Company's majority-owned subsidiary, Inti Raymi,
established separate but coordinated term credit facilities with three
multilateral agencies (Overseas Private Investment Corporation ("OPIC"),
International Finance Corporation ("IFC") and Corporacion Andina de Fomento
("CAF")) for the development of its Kori Kollo expansion project in Bolivia.
Each loan is secured by a lien on the project and is to be repaid in
semi-annual installments which commenced in December 1993 and will continue
through June 2000, with certain provisions for accelerated repayment in the
event of substantial Kori Kollo reserve losses or significantly improved gold
market conditions. Through certain ratio tests, each loan may restrict
payments by Inti Raymi to the owners of shares of its capital stock.
Additional covenants exist which limit fixed asset purchases, additional debt
and liens, and require compliance with Bolivian and World Bank environmental
standards. During 1993, the project met the prerequisite physical and
financial completion tests as set forth in the facility agreements and is
waiting to obtain project completion status from the lenders, which the Company
expects to receive in the first half of 1994. Until the project obtains
completion status, Inti Raymi is restricted from repaying borrowings from the
Company or paying dividends and the Company is required to provide financial
support to ensure Inti Raymi's ability to meet its obligations.

The OPIC facility provided for borrowings of $40 million. Interest
rates under the facility are based on LIBOR plus 2.0 percent. Additionally,
$4.1 million of previously existing OPIC loans to Inti Raymi were restructured
as loan obligations under the terms of the agreement, with the exception that
they are subject to their originally agreed interest rates. As of December 31,
1993 and 1992, Inti Raymi owed $41.0 million and $40.7 million, respectively,
under these combined facilities. Interest charges for the years ended December
31, 1993 and 1992, were based on weighted average interest rates of 5.6 percent
and 6.2 percent, respectively.

Under the IFC commitment, borrowings of $40 million were made. The
interest rate for the non-convertible portion of the loan is based on LIBOR
plus 2.375 percent, but Inti Raymi has the right to request an interest rate
cap or collar, or may elect at any time to pay a fixed rate of interest. Of
the total IFC borrowings, $5 million represents a convertible loan due on March
1, 2002, carrying a fixed annual interest rate of 11 percent with an additional
interest rate provision which varies with the price of gold. Interest charges
for the years ended December 31, 1993 and 1992 were based on weighted average
interest rates of 6.0 percent and 6.2 percent, respectively, for the
non-convertible portion of the loan and 12 percent and 11 percent,
respectively, for the convertible portion of the loan. The loan may be
converted, at IFC's option, into up to a 3.98 percent equity interest in Inti
Raymi. Upon the conversion of the convertible loan into equity, the Company
and Inti Raymi's minority owner would have their interests in the capital stock
of Inti Raymi diluted proportionately. Each share of Inti Raymi common stock
issued by Inti Raymi as a result of such conversion will carry a put option
which, when exercised by IFC, would require BMG and Inti Raymi's minority
shareholder to purchase such share at its fair

84
<PAGE> 87
market value as determined at the time the put is exercised. As of December
31, 1993 and 1992, Inti Raymi owed $37.5 million and $37.0 million under this
facility, respectively.

The CAF facility provided for borrowings of $15 million. Interest
rates under the facility are based on LIBOR. These funds were obtained from
several sources. CAF charged a supervision and oversight fee and a commitment
fee in addition to fees charged by the participants in the funding. As of
December 31, 1993 and 1992, Inti Raymi owed $13.9 million and $15 million,
respectively, under this facility. Interest charges for the years ended
December 31, 1993, and 1992, were based on weighted average interest rates of
4.7 percent and 4.8 percent, respectively.

Due to the generally variable interest rate features of the OPIC,
IFC and CAF loans, the Company believes the amounts outstanding under these
loans presented on the Company's balance sheet approximate the fair value of
this debt as of December 31, 1993 and 1992.

The Company has a revolving credit facility with a syndicate of
seven banks, led by Citibank N.A. as agent. At December 31, 1993, the facility
would provide unsecured borrowings up to $112.5 million. The facility provides
for quarterly reductions in commitments of $9.4 million which are scheduled to
continue until the facility termination date of December 31, 1996. As a result
of 1992 amendments, the facility permits the Company to pledge its
shareholdings in Inti Raymi and restricts the amounts that the Company may
borrow under the facility if the Company's financial support for the Kori Kollo
project loans extends beyond June 30, 1994, or if the Company does not meet
certain net worth criteria. The amendments also impose additional facility
costs in the form of amendment arrangement fees and increased interest rates.
Interest rates under this facility are based on the facility agent bank's base
rate, LIBOR or applicable certificate of deposit rates. Interest charges for
the years ended December 31, 1993 and 1992, were based on weighted average
interest rates of 3.9 to 6.0 percent and 4.0 to 6.5 percent, respectively.
Other costs associated with the facility include commitment fees of one-eighth
percent per annum on the unused portion of the facility and facility fees of
one-eighth percent per annum of the average daily commitment. The credit
agreement imposes certain financial covenants upon the Company which include
covenants relating to leverage, net worth and working capital, as well as
certain restrictions on liens, additional debt or lease obligations and the
acquisition or disposition of major assets. Additionally, the agreement sets
forth restrictions limiting the amount of dividends the Company may pay based
on the Company's equity position applied on a cumulative basis from the date of
the agreement. As of December 31, 1993, cumulative dividend restriction levels
exceeded cumulative dividends paid or declared by $123.7 million.

Due to the variable interest rate of this facility, the Company
believes the $12.5 million outstanding under this facility on the Company's
1992 balance sheet approximated the fair value of the debt. No amounts were
outstanding under this revolving credit facility as of December 31, 1993.

On August 17, 1992, the Company established a $15 million
uncommitted revolving credit facility with a major international bank.
Interest rates under the facility are

85
<PAGE> 88
variable, based on either the bank's base rate or a negotiated rate. There are
no additional costs or financial restrictions imposed on the Company by this
facility. No amounts were outstanding under this revolving credit facility as
of December 31, 1993. As of December 31, 1992, $10 million classified as short
term debt was outstanding under this revolving credit facility. Interest
charges for the years ended December 31, 1993 and 1992, were based on weighted
average interest rates of 3.5 to 4.3 percent and 3.4 to 4.5 percent,
respectively.

Maturities of the Company's long-term debt over the next five years
are as follows: $13.4 million in 1994, $13.4 million in 1995, $13.4 million in
1996, $13.4 million in 1997 and $13.4 million in 1998.

As of February 9, 1994, BMG has effective a registration statement
under the Securities Act of 1933, as amended, for what is commonly referred to
as a "universal shelf" filing covering up to $200 million of its debt
securities, preferred stock, depository shares, common shares and warrants
which BMG may elect to offer from time to time and in any combination.

Note 12. Major Customers and Export Sales

During 1993, sales to three separate buyers accounted for $55.3
million, $36.2 million and $25.3 million of total sales, respectively,
representing 56.4 percent of total sales. International sales for 1993 were
$205.7 million, of which $47.9 million were export sales of U.S. product. In
1992, sales to five separate buyers of $34.9 million, $30.0 million, $28.9
million, $28.6 million and $27.7 million, respectively, accounted for 78.1
percent of total sales. Of the Company's $192.2 million international sales in
1992, $83.6 million were export sales of U.S. product. For 1991, 75.3 percent
of the Company's total sales was distributed among four separate buyers who
accounted for $46.6 million, $37.7 million, $30.7 million and $17.9 million in
sales, respectively. International sales of $176.5 million in 1991 included
$102.1 million in export sales of U.S. product. Alternate buyers are available
to replace the loss of any of the Company's principal customers.

All sales of the Company's products are made to precious metals smelters,
refiners or traders. As such, the precious metals industry has substantial
influence over the market for the Company's products.

86
<PAGE> 89
Note 13. Geographic Segment Information

The following table sets forth certain financial information
relating to international and domestic operations:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1993 1992 1991
---- ---- ----
(expressed in thousands)
<S> <C> <C> <C>
Gross revenues:

United States $ 47,915 $ 83,602 $102,058
Austral Pacific 57,060 65,268 47,822
South America 102,276 43,320 26,584
------- ------- -------
$207,251 $192,190 $176,464
======= ======= =======
Operating Income (Loss):
United States $(27,822) $(46,964) $ 3,787
Austral Pacific 7,046 1,653 (4,333)
South America 16,017 1,923 (2,965)
Other International (975) (1,907) (2,887)
------- ------- -------
$ (5,734) $(45,295) $ (6,398)

Interest and Other Income (Expense), Net $ 1,949 $ (705) $ 873
------- ------- -------
Income Before Income Taxes, Minority
Interest and Cumulative Effects of
Accounting Changes $ (3,785) $(46,000) $ (5,525)
======= ======= =======
Cumulative Effects of Accounting Changes:
United States na $ (820) na
Austral Pacific na (1,175) na
South America na - na
Other International na 533 na
-------
na $ (1,462) na
=======
Identifiable Assets:
United States $137,168 $ 85,493 $126,372
Austral Pacific 213,757 192,589 193,722
South America 316,903 298,685 197,288
Other International 324 717 7,138
------- -------- -------
$668,152 $577,484 $524,520
======= ======= =======
</TABLE>

Note 14. Commitments and Contingencies

Total operating lease rental expenses (exclusive of mineral leases)
were $1.4 million, $1.6 million and $1.3 million for 1993, 1992 and 1991,
respectively.

Aggregate minimum rentals (exclusive of mineral leases) subsequent
to December 31, 1993, under non-cancelable leases for the years ending December
31, 1994 to 1998, are estimated to be $2.3 million, $2 million, $1.9 million,
$1.3 million and $.8 million, respectively. Lease commitments beyond 1998
total $2.9 million.

The Company spent $3.2 million in 1993, and has no future
commitments, in connection with several unrelated exploration joint ventures.

To maintain BMG's right to earn a 51 percent interest in the Crown
Jewel project, BMG could be required to make payments to the co-venturer in the
amounts of

87
<PAGE> 90
$1 million per quarter for the period commencing with the third quarter of 1993
through commencement of commercial production. BMG believes that it is
entitled under "force majeure" provisions of the joint venture agreement to
suspend application of these quarterly payment requirements because of delays
in the permitting process. The Company's financial position as of December 31,
1993, does not reflect a liability for any such payments. An arbitration
proceeding has been initiated between BMG and the co- venturer, and the $1
million payments are being deposited in an escrow account pending resolution of
the dispute.

Pursuant to pricing provisions as set out in dore customer
contracts, as of December 31, 1993, the Company had committed to sell 11,200
ounces of gold contained in dore valued at approximately $4.3 million at prices
determined during various pricing periods in 1993, none of which exceeds 45
days. The average price of gold sold under this commitment is approximately
$382 per ounce.

The Company has provided a $3.3 million guarantee to ensure that
the reclamation of the Company's San Luis mine will be performed as specified
in the operating permit issued by the State of Colorado.

All of the Company's mining and processing operations are subject
to reclamation requirements. The Company believes it is making sufficient
accruals for known reclamation obligations and has accrued an aggregate of $9.5
million at December 31, 1993. The accrued reclamation charges are included as
long-term liabilities in the Company's consolidated balance sheet. At the
Battle Mountain complex, assuming the Reona project is developed as currently
permitted and Phoenix project proceeds, aggregate reclamation expenditures
required to be spent in the area are expected to amount to approximately $7.7
million, of which $4.7 million remained accrued at December 31, 1993. Activity
expected to be performed as part of the development and operation of the Reona
and Phoenix projects will eliminate certain reclamation costs. If one or both
of these projects does not proceed, reclamation expenditures would be expected
to be up to $4 million higher than current estimates. Estimated reclamation
obligations and related amounts accrued as of December 31, 1993, respectively,
for each of the Company's other operating mines is as follows: San Luis $3.3
million and $1.0 million, Pajingo $2.6 million and $.8 million, Kori Kollo
$10.0 million and $.4 million and Red Dome $4.2 million and $2.6 million.
Reclamation expenditures for the San Cristobal mine are not expected to be
material.

Note 15. Forward Sales and Hedging

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<PAGE> 91
The Company's hedging transactions included the following at
December 31, 1993:
<TABLE>
<CAPTION>
Weighted
Average Price
Per Unit Period
---------- ------
<S> <C> <C> <C>
BMG:
Spot deferred sales contracts 154,000 oz. gold $ 367 June 94 - June 95
Niugini Mining:
Spot deferred sales contracts 81,400 oz. gold $ 381 Jan 94 - Sept 95
Fixed forward sales contracts 180,000 oz. gold $ 328 Jan 94 - Dec 96
1,819,000 lbs. copper $ .99 Jan 94
Inti Raymi:
Spot deferred sales contracts 98,500 oz. gold $ 364 Jan 94 - Sept 94
Purchased put options 180,000 oz. gold $ 350 Jan 94 - Aug 94
</TABLE>

Gains and losses related to these hedging transactions are
recognized in revenues when the related production is sold. In addition, costs
associated with the purchase of certain of the hedge instruments, amounting to
$.6 million for open put options and $1.5 million for open spot deferred sales
contracts as of December 31, 1993, are also deferred and recognized
concurrently with the revenues related to the hedged production.

The aggregate amount by which the net market value of the Company's
open fixed forward and spot deferred sales contracts is less than the current
spot price of $390 per ounce of gold as of December 31, 1993, is $19.4 million,
of which $6.2 million is attributable to minority interests.

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<PAGE> 92
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED)

QUARTERLY RESULTS

<TABLE>
<CAPTION>
Operating Net Earnings Dividends Dividends
Net Income Income (Loss) Per per per
Revenue (Loss) (Loss) Share Common Share Preferred Share
--------- ----------- ---------- ---------- ------------ ---------------

(expressed in thousands except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
1993
----

First Quarter $ 53,945 $ (1,988) $ (3,165) $ (.04) $ .025 $ -
Second Quarter 40,518 (4,967) (2,589) (.03) - -
Third Quarter 50,024 1,485 1,796 - .025 .8125
Fourth Quarter 48,928 (264) (447) (.03) - .8125
------- ------- ------- ------ ----- ------
$193,415 $ (5,734) $ (4,405) $ (.10) $ .05 $1.6250
------- ------- ------- ------ ----- ------

1992 (1)
----

First Quarter $ 44,205 $ (1,937) $ (2,397) $ (.03) $ .025 $ -
Second Quarter 43,321 (3,663) (1,950) (.02) .025 -
Third Quarter (2) 42,960 (40,116) (32,095) (.40) .025 -
Fourth Quarter 51,317 421 39 - .025 -
------- ------- ------- ------ ----- ------
$181,803 $(45,295) $(36,403) $ (.46) $ .10 $ -
======= ======= ======= ======= ===== ======
</TABLE>

- ---------------------------

(1) Restated to give effect to retroactive application of 1992 adoption of
SFAS No. 109," Accounting for Income Taxes." The cumulative effect of the
adoption of SFAS No. 109 on periods prior to 1992 (a $3.9 million tax
benefit or $.05 per share) is included in the first quarter of 1992 as is
the cumulative effect of adopting SFAS No. 106, "Employers' Accounting for
Postretirement Benefits other than Pensions" (a charge of $5.3 million net
of related income tax benefit or $.07 per share). (See Notes 6 and 7 of
Notes to Consolidated Financial Statements.)

(2) Includes non-cash asset impairments totalling $23.3 million (net of
related income tax benefit) or 29 cents per share. (See Note 2 of Notes to
Consolidated Financial Statements.)

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<PAGE> 93
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information appearing under the captions "Nominees" and
"Directors with Terms Expiring in 1995 and 1996" set forth under "Election of
Three Directors and Director Compensation" in the Company's definitive Proxy
Statement for its annual meeting of shareholders to be held April 21, 1994, as
filed within 120 days of December 31, 1993, pursuant to Regulation 14A under
the Security Exchange Act of 1934, as amended (the "Company's 1994 Proxy
Statement"), is incorporated herein by reference. See also "Executive Officers
of the Registrant" appearing in Part I of this Annual Report.

ITEM 11. EXECUTIVE COMPENSATION

The information appearing under the captions "Board Organization
and Committees" set forth under "Election of Three Directors and Director
Compensation" and "Executive Compensation" (other than the Compensation and
Stock Option Committee Report on Executive Compensation)in the Company's 1994
Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information appearing under the caption "Security Ownership"
set forth under "Election of Three Directors and Director Compensation" in the
Company's 1994 Proxy Statement is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not applicable.

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<PAGE> 94
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1) Financial Statements and Supplementary Data. Consolidated
financial statements of the Company and its subsidiaries are
incorporated under Item 8 of this Form 10-K.

(a)(2) Financial Statement Schedules.

<TABLE>
<S> <C> <C>
Schedule III. Condensed Financial Information of Registrant . . . . . . . . . . . . . . . . . . . . . . . . . S-1

Schedule V. Consolidated Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . S-4

Schedule VI. Consolidated Accumulated Depreciation,
Depletion and Amortization of Property, Plant
and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-5

Schedule X. Supplementary Consolidated Income Statement
Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6
</TABLE>

Other schedules of Battle Mountain Gold Company and subsidiaries are
omitted because of the absence of the conditions under which they are required
or because the required information is included in the financial statements or
notes thereto.

(a)(3) Exhibits: See attached exhibit index, page E-1, which also
includes the management contracts or compensatory plans or arrangements
required to be filed as exhibits to this Annual Report by Item 601 (10)(iii)
of Regulation S-K.

(b) Reports on Form 8-K: None.

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<PAGE> 95

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) 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.

BATTLE MOUNTAIN GOLD COMPANY

By /s/ R. DENNIS O'CONNELL
--------------------------------
R. DENNIS O'CONNELL
VICE PRESIDENT -- FINANCE AND
CHIEF FINANCIAL OFFICER

Date: March 21, 1994

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND
IN THE CAPACITIES AND ON THE DATES INDICATED.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- --------------
<C> <S> <C>
/s/ KARL E. ELERS Chairman of the Board, March 21, 1994
- --------------------------------------------- Chief Executive Officer
(KARL E. ELERS) and Director (Principal
Executive Officer)

/s/ R. DENNIS O'CONNELL Vice President -- Finance March 21, 1994
- --------------------------------------------- and Chief Financial
(R. DENNIS O'CONNELL) Officer (Principal
Financial and Accounting
Officer)
DOUGLAS J. BOURNE*
DELO H. CASPARY*
CHARLES E. CHILDERS*
JACK R. CROSBY*
JAMES H. ELDER, JR.* A majority of the Directors March 21, 1994
RODNEY L. GRAY* of the Registrant
J. HUGH LIEDTKE*
TED H. PATE*
KENNETH R. WERNEBURG*
WILLIAM A. WISE*

*By /s/ ROBERT J. QUINN
--------------------------------------------
(ROBERT J. QUINN
ATTORNEY IN FACT)
</TABLE>

<PAGE> 96
BATTLE MOUNTAIN GOLD COMPANY
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED BALANCE SHEET

<TABLE>
<CAPTION>
December 31,
--------------------------------
1993 1992
---- ----
(Expressed in thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 59,195 $ 6,535
Receivables:
Subsidiaries* 35,561 36,605
Other 5,518 5,044
Materials and supplies, at average cost 2,395 2,795
Other current assets 5,744 2,199
------- -------
TOTAL CURRENT ASSETS 108,413 53,178
Investments
Subsidiaries* 348,819 340,932
Other 27,842 21,161
Net property, plant and equipment 17,247 14,288
Other assets 2,174 2,649
------- -------
TOTAL ASSETS $504,495 $432,208
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt $ 510 $ 10,000
Payables:
Subsidiaries* - -
Other 1,803 5,859
Payroll and related benefits accrued 1,709 2,216
Accrued interest 6,000 6,300
Other current liabilities 1,317 1,583
------- -------
TOTAL CURRENT LIABILITIES 11,339 25,958
Long-term debt 100,000 112,500
Deferred income tax 5,630 6,508
Other liabilities 17,966 17,463
------- -------
TOTAL LIABILITIES 134,935 162,429

SHAREHOLDERS' EQUITY 369,560 269,779
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $504,495 $432,208
======= =======
</TABLE>

- --------------------------------------------------
* Eliminated in consolidation

This condensed statement should be read in conjunction with the
Consolidated Financial Statements and Notes thereto which are included in
Item 8 herein.

S-1
<PAGE> 97
BATTLE MOUNTAIN GOLD COMPANY
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENT OF INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------
1993 1992 1991
---- ---- ----
(Expressed in thousands)
<S> <C> <C> <C>
GROSS REVENUE $ 21,854 $ 63,718 $ 93,905
Less: Freight, allowances & royalties 262 744 850
------- ------- -------
NET SALES 21,592 62,974 93,055
------- ------- -------
COSTS AND EXPENSES
Mining costs 8,272 12,343 9,848
Milling and other plant costs 14,213 27,540 29,805
Depreciation, depletion and amortization 4,684 11,040 11,575
Exploration, evaluation and other lease 636 2,260 8,655
costs
Asset write-downs - 6,000 5,573

General and administrative expenses 8,196 12,871 19,213
Taxes, other than income 1,151 1,812 3,888
------- ------- -------

Total costs and expenses 37,152 73,866 88,557
------- ------- -------

OPERATING INCOME (LOSS) (15,560) (10,892) 4,498

Interest income from subsidiares, net* 2,722 4,094 118
Other interest income, net 180 347 3,394
Other income (expense), net 86 (1,523) (668)
------ ------- -------

INCOME (LOSS) BEFORE INCOME TAXES AND
EQUITY IN LOSSES OF SUBSIDIARIES AND
CUMULATIVE EFFECTS OF ACCOUNTING
CHANGES (12,572) (7,974) 7,342
Income tax expense (benefit) (4,274) 3,553 2,454
------ ------- -------
INCOME (LOSS) BEFORE EQUITY IN LOSSES
OF SUBSIDIARIES AND CUMULATIVE
EFFECTS OF ACCOUNTING CHANGES (8,298) (11,527) 4,888
CUMULATIVE EFFECTS OF ACCOUNTING
CHANGES (NET OF TAXES)** - (7,914) -
------- ------- -------
INCOME (LOSS) BEFORE EQUITY IN LOSSES
OF SUBSIDIARIES (8,298) (19,441) 4,888
Equity in income (losses) of subsidiaries 3,893 (16,962) (6,062)
------- ------- -------
NET LOSS $ (4,405) $ (36,403) $ (1,174)
Preferred dividends 3,738 - -
------- -------- --------
NET LOSS TO COMMON SHARES $ (8,143) $ (36,403) $ (1,174)
======= ======== ========
</TABLE>
- --------------------------------------------------
* Eliminated in consolidation

** For 1992, includes adoption of SFAS No. 106 ($5,341) and SFAS No. 109
($2,573).

This condensed statement should be read in conjunction with the Consolidated
Financial Statements and Notes thereto which are included in Item 8 herein.

S-2
<PAGE> 98
BATTLE MOUNTAIN GOLD COMPANY
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1993 1992 1991
---- ---- ----
(Expressed in thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVIES:
NET LOSS $ (4,405) $ (36,403) $ (1,174)
Adjustments to reconcile net loss
to cash flows from operating activities:
Depreciation, depletion and amortization 4,684 11,040 11,575
Exploration and evaluation costs 636 2,260 8,655
Asset write-downs - 6,000 5,573
Gain from sale of assets (741) - -
Cumulative effects of accounting changes - 7,914 -
Reclamation costs 582 1,682 2,799
Equity in (income) losses of subsidiaries* (3,893) 16,962 6,062
Deferred income tax benefit (878) (426) (2,108)
Change in current accounts receivable and
payable with subsidiaries* 1,044 (1,017) (22,938)
Change in other current assets and
liabilities (7,785) (1,620) 2,197
Other net changes 2,486 (318) 623
------- ------ -------

Total Adjustments (3,865) 42,477 12,438
------- ------- ------
NET CASH FLOWS FROM OPERATING ACTIVITIES (8,270) 6,074 11,264
------- ------- ------

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of assets 2,878 1,822 -
Investment in subsidiaries* (12,358) (6,934) (24,414)
Investment in Crown Jewel (7,595) (6,862) (5,179)
Investment in Niugini Mining* - (8,220) (16,440)
Capital expenditures (3,839) (3,950) (2,198)
Exploration and evaluation expenditures (636) (2,260) (8,655)
Dividends from subsidiaries* 823 7,296 7,265
Other, net 111 13 636
------- ------- -------

NET CASH FLOWS USED IN INVESTING ACTIVITIES (20,616) (19,095) (48,985)
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from stock issuances 111,840 - 1,065
Cash proceeds from borrowings 30,500 94,335 -
Cash dividend payments (7,743) (7,996) (7,563)
Debt repayments (53,051) (71,835) -
Other, net - - -
------- ------ -------

NET CASH FLOWS FROM FINANCING ACTIVITIES 81,546 14,504 (6,498)
------- ------- ------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 52,660 1,483 (44,219)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 6,535 5,052 49,271
------- ------- ------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 59,195 $ 6,535 $ 5,052
======= ======= =====
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:

Cash paid during the year for:
Interest, net of amount capitalized $ 4 $ 15 $ 93
Income taxes, net $ 892 $ 1,500 $ 3,600
</TABLE>

* Eliminated in consolidation

This condensed statement should be read in conjunction with the Consolidated
Financial Statements and Notes thereto which are included in Item 8 herein.

S-3
<PAGE> 99
SCHEDULE V
BATTLE MOUNTAIN GOLD COMPANY
CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
Cumulative
Balance at Effect of Balance at
Beginning Accounting Additions Retirements Other End of
of Period Change(1) at Cost or Sales Changes Period
------------ ------------- ----------- ------------ ------- ----------
(Expressed in thousands)
<S> <C> <C> <C> <C> <C> <C>
For the Year Ended
December 31, 1993
Leasehold & Mine
Development $ 85,805 na $ 16,679 $ - $ 6,966 $109,450
Mining, Milling &
Other Equipment 281,606 na 29,210 16,622 (8,789) 285,405
Acquisition
Premium (2) 255,466 na 6,349 - (15,021) 246,794
Other 1,393 na 224 280 1,502 2,839
------- ------- ------- ------- -------
$624,270 $ 52,462(3) $ 16,902 $(15,342) $644,488
======= ======= ======= ======= =======

For the Year Ended
December 31, 1992
Leasehold & Mine
Development $ 92,966 $ - $ 2,364 $ (8,258) $ (1,267) $ 85,805
Mining, Milling &
Other Equipment 207,896 - 82,735 (7,315) (1,710) 281,606
Acquisition
Premium (2) 228,274 16,491 8,938 - 1,763 255,466
Other 3,821 - 1,735 (2,467) (1,696) 1,393
------- --------- ------- ------- ------- -------
$532,957 $ 16,491 $ 95,772(4) $ (18,040) $ (2,910) $624,270
======= ========= ======= ======== ======= =======

For the Year Ended
December 31, 1991
Leasehold & Mine
Development $ 63,026 na $ 30,597 $ (440) $ (217) $ 92,966
Mining, Milling &
Other Equipment 163,867 na 48,338 (4,725) 416 207,896
Acquisition
Premium (2) 160,928 na 66,173 - 1,173 228,274
Other 5,450 na 14 (470) (1,173) 3,821
------- ------- ------- ------- -------
$393,271 $ 145,122(5) $ (5,635) $ 199 $532,957
======= ======= ======= ======= =======
</TABLE>

(1) Consists of a Capitalized Deferred Tax Charge in connection with the
Westworld purchase resulting from the adoption of SFAS No. 109. (See Note
6 of Notes to Consolidated Financial Statements.)

(2) "Acquisition Premium" reflects the fair value attributed to the Company's
share of the Lihir project and the Kori Kollo gold deposit at the date of
acquisition in excess of Niugini Mining's and Inti Raymi's historical cost
basis, respectively.

(3) Additions at cost for 1993 include $6.7 million in capitalized interest in
connection with Niugini Mining's Lihir project and plant construction at
Inti Raymi's Kori Kollo mine. Additions at cost also include development
of the Reona Project, the Red Dome mine extension, development at the San
Cristobal mine, development of the Lihir project and plant construction
expenditures for the Kori Kollo mine. (See Note 8 of Notes to
Consolidated Financial Statements.)

(4) Additions at cost for 1992 include $8.9 million in interest capitalized in
connection with Niugini Mining's Lihir project and plant construction at
Inti Raymi's Kori Kollo mine. Additions also include the capitalization
of a heap leach facility at the Battle Mountain complex. (See Note 8 of
Notes to Consolidated Financial Statements.)

(5) Additions at cost for 1991 include $6.0 million in interest capitalized in
connection with Niugini Mining's Lihir project. Additions at cost for
1991 also include the San Luis development, the Red Dome acquisition,
additional development at San Cristobal, development of the Kori Kollo
mine and the acquisition of an additional 34 percent equity interest in
the Kori Kollo mine. The Company issued 8.2 million shares of stock
(valued at $65.9 million) for such additional interest. (See Note 8 of
Notes to the Consolidated Financial Statements.)

S-4
<PAGE> 100
SCHEDULE VI

BATTLE MOUNTAIN GOLD COMPANY
CONSOLIDATED ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
Balance at Charged Balance at
Beginning to Retirements Other End of
of Period Expense or Sales Changes Period
--------- ------- ------------- ---------- ----------

(expressed in thousands)
<S> <C> <C> <C> <C> <C>
For the Year Ended
December 31, 1993
Leasehold & Mine
Development $ 49,754 $ 5,850 $ - $ 17,204 $ 72,808
Mining, Milling &
Other Equipment 112,116 26,956 (14,675) (19,409) 104,988
Acquisition Premium 4,867 8,583 - - 13,450
Other 290 - - (290) -
------- ------ ------- ------- -------
$167,027 $41,389 $(14,675) $ (2,495) $191,246
======= ====== ======= ======= =======

For the Year Ended
December 31, 1992
Leasehold & Mine
Development $ 37,704 $20,263(1) $ (8,896) $ 683 $ 49,754
Mining, Milling &
Other Equipment 66,258 48,212(2) (1,755) (599) 112,116
Acquisition Premium 1,855 3,012 - - 4,867
Other 533 (243) - - 290
------- ----- ------- ------- -------
$106,350 $ 71,244 $(10,651) $ 84 $167,027
======= ======= ======= ======= =======

For the Year Ended
December 31, 1991
Leasehold & Mine
Development $ 28,390 $ 9,348 $ - $ (34) $ 37,704
Mining, Milling &
Other Equipment 50,046 16,929 (3,571) 2,854 66,258
Acquisition Premium - 1,855 - - 1,855
Other 516 17 - - 533
------- ------- ------- ------- -------
$ 78,952 $ 28,149 $ (3,571) $ 2,820 $106,350
======= ======= ======= ======= =======
</TABLE>

(1) Includes write-downs of $12.2 million, for the impairment in value of
certain of the Company's assets (See Note 2 of Notes to Consolidated
Financial Statements).

(2) Includes write-downs of $20.4 million, for the impairment in value of
certain of the Company's assets (See Note 2 of Notes to Consolidated
Financial Statements).

S-5
<PAGE> 101
SCHEDULE X

BATTLE MOUNTAIN GOLD COMPANY

SUPPLEMENTARY CONSOLIDATED INCOME STATEMENT INFORMATION

<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------

1993 1992 1991
---- ---- ----
(expressed in thousands)
<S> <C> <C> <C>
MAINTENANCE AND REPAIRS $ 16,798 $ 22,395 $ 18,259
======= ====== ======

NEVADA NET PROCEEDS TAX $ - $ 149 $ 2,194
======= ====== ======
</TABLE>

S-6
<PAGE> 102

INDEX OF EXHIBITS

<TABLE>
<CAPTION>
Exhibit No. Document
- ----------- --------
<S> <C> <C>
*3(a) -- Restated Articles of Incorporation of the Company, as amended and restated through May 11, 1988 (Exhibit
4(a) to the Company's Registration Statement on Form S-3 as filed with the Commission on January 14,
1994; Registration No. 33-51921).

*3(b) -- Certificate of Resolution Establishing Designation, Preferences and Rights of $3.25 Convertible Preferred
Stock (Exhibit 4(b) to the Company's Registration Statement on Form S-3 as filed with the Commission on
January 14, 1994; Registration No. 33-51921).

*3(c) -- Bylaws of the Company, as amended through April 27, 1988 (Exhibit 3(b) to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1988; File No. 1-9666).

*4(a)(1) -- Rights Agreement, dated November 10, 1988, between the Company and NCNB Texas National Bank, as Rights
Agent (Exhibit to the Company's Form 8 filed with the Commission on November 30, 1988, amending the
Company's Current Report on Form 8-K dated November 21, 1988; File No. 1-9666).

*4(a)(2) -- First Amendment to Rights Agreement, dated July 30, 1992, between the Company and the Bank of New York,
as successor Rights Agent (Exhibit 4(a)(2) to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992; File No. 1-9666).

*4(b) -- Specimen Stock Certificate for the Common Stock of the Company (Exhibit 4(b) to the Company's Annual
Report on Form 10-K for the year ended December 1, 1988; File No. 1-9666).

*4(c) -- Fiscal and Paying Agency Agreement, dated as of January 4, 1990, between the Company and Citibank, N.A.,
Fiscal Agent (Exhibit 4(c) to the Company's Annual Report on Form 10-K for the year ended December 31,
1989; File No. 1-9666).

*4(d) -- Credit Agreement, dated as of December 29, 1989, among the Company, the banks named therein and Citibank,
N.A., as agent, as amended (Exhibit 4(a) to the Company's Ouarterly Report on Form 10-Q for the quarter
ended June 30, 1992; File No. 1-9666).
</TABLE>

E-1
<PAGE> 103
<TABLE>
<S> <C> <C>
*4(e) -- Investment Agreement, dated May 22, 1992, between Empresa Minera Inti Raymi S.A. and International
Finance Corporation (Exhibit 4(e) to the Company's Annual Report on Form 10-K for the year ended December
31, 1992; File No. 1-9666).

*4(f) -- Finance Agreement, dated as of September 14, 1992, between Empresa Minera Inti Raymi S.A. and Overseas
Private Investment Corporation (Exhibit 4(f) to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992; File No. 1-9666).

*4(g) -- Loan Agreement, dated June 29, 1992, between Empresa Minera Inti Raymi S.A. and Corporacion Andina de
Fomento (English translation) (Exhibit 4(g) to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992; File No. 1-9666).

+*10(a)(1) -- Battle Mountain Gold Company 1988 Deferred Income Stock Option Plan, as amended through September 1, 1988
(Exhibit 10(a) to the Company's Post-Effective Amendment No. 1 to Registration Statement on Form S-8 as
filed with the Commission on September 2, 1988; Registration No. 33-22146).

+*10(a)(2) -- Amendment to Battle Mountain Gold Company 1988 Deferred Income Stock Option Plan dated February 23, 1992
(Exhibit 10(a)(2) to the Company's Annual Report on Form 10-K for the year ended December 31, 1992; File
No. 1-9666).

+*10(a)(3) -- Specimen of Deferred Income Stock Option Agreement for non-employee directors of the Company, as amended
and restated (Exhibit 10(a)(3) to the Company's Annual Report on Form 10-K for the year ended December
31, 1992; File No. 1-9666).

+*10(a)(4) -- Specimen of Deferred Income Stock Option Agreement for officers of the Company, as amended and restated
(Exhibit 10(a)(4) to the Company's Annual Report on Form 10-K for the year ended December 31, 1992; File
No. 1-9666).

+*10(b)(1) -- 1985 Stock Option Plan of the Company, as amended and restated effective April 7, 1993 (Exhibit 10(a) to
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1993; File No. 1-9666).

+*10(b)(2) -- Specimen of the Company's 1985 Stock Option Plan Non-Qualified Stock Option Agreement for executive
officers of the Company (Exhibit 10(a)(1) to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993; File No. 1-9666).

</TABLE>

E-2
<PAGE> 104
<TABLE>
<S> <C> <C>
+*10(b)(3) -- Specimen of the Company's 1985 Stock Option Plan Incentive Stock Option Agreement for executive officers
of the Company (Exhibit 10(a)(2) to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1993; File No. 1-9666).

+*10(c)(1) -- Battle Mountain Gold Company 1986 Restricted Stock Plan, as amended and restated (Exhibit 4(d) to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1988; File No. 1-9666).

+*10(c)(2) -- Specimen of Agreement under the Company's 1986 Restricted Stock Plan (Exhibit 10(c)(2) to the Company's
Annual Report on Form 10-K for the year ended December 31, 1992; File No. 1-9666).

+*10(d)(1) -- Battle Mountain Gold Company 1988 Long-Term Performance Unit Plan, as amended and restated effective
July 1, 1992 (Exhibit 10(d)(1) to the Company's Annual Report on Form 10-K for the year ended December
31, 1992; File No. 1-9666).

+*10(d)(2) -- Specimen of Agreement under the Company's 1988 Long-Term Performance Unit Plan (Exhibit 10(d)(2) to the
Company's Annual Report on Form 10-K for the year ended December 31, 1992; File No. 1-9666).

+*10(e)(1) -- Battle Mountain Gold Company Deferred Compensation Plan (Exhibit 10(b) to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1993; File No. 1-9666).

+*10(e)(2) -- Specimen of the Company's Deferred Compensation Agreement for directors of the Company (Exhibit 10(d) to
the Company's Annual Report on Form 10-K for the year ended December 31, 1986; File No. 0-13728).

+*10(f)(1) -- Battle Mountain Gold Company Executive Supplemental Retirement Income Plan (Exhibit 10(f)(1) to the
Company's Annual Report on Form 10-K for the year ended December 31, 1992; File No. 1-9666).

+.*10(f)(2) -- Specimen of the Company's Executive Supplemental Retirement Income Plan Agreement (Exhibit 10(f)(2) to
the Company's Annual Report on Form 10-K for the year ended December 31, 1992; File No. 1-9666).

</TABLE>

E-3
<PAGE> 105
<TABLE>
<S> <C> <C>
+.*10(f)(2) -- Specimen of the Company's Executive Supplemental Retirement Income Plan Agreement (Exhibit 10(f)(2) to
the Company's Annual Report on Form 10-K for the year ended December 31, 1992; File No. 1-9666).

+*10(g)(1) -- Specimen of the Company's Severance Agreements with officers of the Company regarding certain benefits
payable in the event of change of control of the Company (Exhibit 10(f) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1986; File No. 0-13728).

+*10(g)(2) -- Severance Agreement, dated June 5, 1992, between the Company and R. Dennis O'Connell (Exhibit 10(g)(2)
to the Company's Annual Report on Form 10-K for the year ended December 31, 1992; File No. 1-9666).

+*10(h) -- Battle Mountain Gold Company Contribution Equalization Plan, as amended and restated effective as of
January 1, 1992 (Exhibit 10(h) to the Company's Annual Report on Form 10-K for the year ended December
31, 1992; File No. 1-9666).

+10(i) -- Battle Mountain Gold Company Executive Productivity Bonus Plan, as amended and restated effective
January 1, 1994.

*10(j)(1) -- Battle Mountain Gold Company Non-Qualified Stock Option Plan for Outside Directors. (Exhibit 10(m) to
the Company's Annual Report on Form 10-K for the year ended December 31, 1991; File No. 1-9666).

*10(j)(2) -- Specimen of Director's Stock Option Agreement under the Company's Non-Qualified Stock Option Plan for
Outside Directors (Exhibit 10(j)(2) to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992; File No. 1-9666).

*10(k) -- Heads of Agreement, dated March 23, 1989, among the Company, Niugini Mining Limited and the individuals
listed on the signature page thereto (Exhibit 10(k) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1988; File No. 1-9666).

*10(l) -- Mining Lease, dated May 5, 1987, granted by the Queensland (Australia) Department of Mines to Pajingo
Gold Mine Pty. Ltd. (Exhibit 28(a) to the Company's Current Report on Form 8-K dated February 14, 1990;
File No. 1-9666).

*10(m) -- Mining Lease, dated October 1, 1987, as amended, between Earth Sciences, Inc. and Battle Mountain Gold
Company (Exhibit 28(b) to the Company's Current Report on Form 8-K dated February 14, 1990; File No.
1-9666).

11 -- Computation of Earnings Per Common Share.

</TABLE>

E-4
<PAGE> 106
<TABLE>
<S> <C> <C>

12 -- Computation of Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred
Dividends.

21 -- Subsidiaries of the Company.

23(a) -- Consent of Arthur Andersen & Co.

23(b) -- Consent of Coopers & Lybrand.

23(c) -- Consent of Moreno Munoz y Cia.

24 -- Powers of Attorney
</TABLE>

________________________

* Incorporated by reference as indicated.

+ Represent management contracts or compensatory plans or arrangements
required to be filed as exhibits to this Annual Report by Item
601(10)(iii) of Regulation S-K.

. Pursuant to Instruction 2 accompanying paragraph (a) and the
Instruction accompanying paragraph (b)(10)(iii)(B)(6) of Item 601 of
Regulation S-K, the registrant has not filed each executive officer's
individual Executive Supplemental Retirement Income Agreement with the
Company as an exhibit hereto; the registrant has agreements
substantially identical to Exhibit 10(f)(2) above with each of Karl E.
Elers, Kenneth R. Werneburg, Andre Douchane, Joseph L. Mazur, R.
Dennis O'Connell, Robert J. Quinn and Fred B. Reisbick except that the
monthly benefits for such executive officers under such agreements are
$12,917, $10,292, $6,083, $6,125, $6,458, $5,750 and $4,417,
respectively. In addition, the registrant has not filed each
executive officer's individual Severance Agreement with the Company as
an exhibit hereto; the registrant has agreements substantially
identical to Exhibit 10(g)(1) above with each of Messrs. Elers,
Werneburg, Mazur, Quinn, Douchane and Reisbick.

E-5
<PAGE> 107
APPENDIX TO 10-K

re graphics on page 5

The graphics on page 5 consist of maps depicting the Company's mines and
offices in North America, South America and the Austral Pacific. The North
America map references the following Company offices: BMG's headquarters in
Houston, Texas; BMG's North American Regional Office in Denver, Colorado;
BMG's Latin American Exploration Office in Tucson, Arizona; and BMG's U.S.
Exploration Office in Reno, Nevada. The North America map also includes the
following operating locations: the San Luis Mine in southern Colorado; the
Battle Mountain complex in northern Nevada; and the Crown Jewel Project in
northeast Washington. The South America map references BMG's South American
Regional Office and Inti Raymi's headquarters in La Paz, Bolivia; the Kori
Kollo mine in central Bolivia; and the San Cristobal mine in northern Chile.
The Austral Pacific map references Niugini Mining's office in Sydney,
Australia; BMG's Australian Exploration Office in Perth, Australia; the Red
Dome and Pajingo mines in northeastern Australia; and the Lihir Project
northeast of mainland Papua New Guinea.

<PAGE> 1

BATTLE MOUNTAIN GOLD COMPANY
EXECUTIVE PRODUCTIVITY BONUS PLAN

(As Amended and Restated Effective January 1, 1994)
<PAGE> 2
BATTLE MOUNTAIN GOLD COMPANY
EXECUTIVE PRODUCTIVITY BONUS PLAN

(As Amended and Restated Effective January 1, 1994)

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Actual Award Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Actual Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Bonus Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Earnings Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Organizational Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Target Award Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Target Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE II ADMINISTRATION OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section:
2.1 The Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Liability of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE III ELIGIBILITY AND VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section:
3.1 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Vesting of Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE IV PAYMENT OF BONUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section:
4.1 Executive Productivity Bonus . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Bonuses Contingent Upon Committee Approval . . . . . . . . . . . . . . . . . 6
4.3 Payment of Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.4 Payments to Incompetents . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.5 Withholding of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>

-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE V RIGHTS OF PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section:
5.1 Limitation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Nonalienation of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Prerequisites to Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE VI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section:
6.1 Amendment or Termination of the Plan . . . . . . . . . . . . . . . . . . . . . 8
6.2 Reliance Upon Information . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>

-ii-
<PAGE> 4

BATTLE MOUNTAIN GOLD COMPANY
EXECUTIVE PRODUCTIVITY BONUS PLAN

(As Amended and Restated Effective January 1, 1994)

The Battle Mountain Gold Company Executive Productivity
Bonus Plan for employees of Battle Mountain Gold Company (the "Company") is
intended to provide greater incentives for employees to attain and maintain the
highest standards of performance, to attract and retain employees of
outstanding competence and ability, to stimulate the active interest of such
persons in the development and financial success of the Company, to further the
identity of interests of such employees with those of the Company's
shareholders generally and to reward such employees for outstanding performance
when certain goals have been achieved.

-1-
<PAGE> 5
ARTICLE I

DEFINITIONS

ACTUAL AWARD PERCENTAGE ("AAP"): The percentage that is
applied to determine the amount of a Participant's Bonus when the actual
performance of the Company is greater or lesser than the target performance of
the Company. The AAP shall be determined in accordance with the terms of
Article IV. In no event shall the AAP for any Participant exceed the limits
set forth below in the definition of TAP.

ACTUAL CASH FLOW ("ACF"): The after-tax cash flow from
operations generated by the Company during the Bonus Period, exclusive of any
Bonus paid under this Plan. At the sole discretion of the Committee, unusual
events which have a large impact on cash flow may be excluded from
consideration in determining the cash flow for purposes of calculating any
Bonus payable under this Plan.

BOARD OF DIRECTORS: The Board of Directors of the
Company.

BONUS: A cash bonus awarded and payable to a Participant
under the terms of this Plan.

BONUS PERIODS: The applicable of January 1 through June
30 annually and July 1 through December 31 annually.

COMMITTEE: The Compensation and Stock Option Committee
of the Board of Directors.

COMPANY: Battle Mountain Gold Company, a Nevada
corporation, or any successor.

EARNINGS PAID ("EP"): All earned compensation and
remuneration for services as a salaried employee that is normally reportable on
Internal Revenue Service Form W-2, including overtime, shift differentials,
location differentials and hardship pay, but excluding imputed income, bonuses,
awards or income received under the Long-Term Performance Unit Plan, any income
arising from the exercise of a stock option and compensation earned in an
hourly rated, site-specific or part-time position.

EFFECTIVE DATE: January 1, 1994.

ORGANIZATIONAL LEVEL: The organization level of a
Participant's position within the Company, as determined by the Committee.

-2-
<PAGE> 6
PARTICIPANT: An employee of the Company who meets the
eligibility requirements set forth in Section 3.1 of the Plan.

PLAN: The Battle Mountain Gold Company Executive
Productivity Bonus Plan, as set forth herein.

PLAN ADMINISTRATOR: The administrator of the Plan as
described in Section 2.1.

TARGET AWARD PERCENTAGE ("TAP"): The percentage that is
applied to determine the amount of a Participant's Bonus when the Company's
targeted performance is achieved. The TAP shall be determined in accordance
with the following table, subject to the applicable limit:

<TABLE>
<CAPTION>
Organizational Level and TAP %
------------------------------
Level TAP Maximum %
----- --- ---------
<S> <C> <C>
I 50 100
II 40 80

III 35 70

IV 25 50
V 20 40

VI 15 30
VII 8 16

VIII 6 12
</TABLE>

TARGET CASH FLOW ("TCF"): The goal set by management in
the Business Plan covering the Bonus Period for after-tax cash flow from
operations generated by the Company during a Bonus Period, exclusive of Bonuses
expected to be paid under this Plan.

-3-
<PAGE> 7
ARTICLE II

ADMINISTRATION OF PLAN

2.1 The Committee: The Committee will serve as Plan
Administrator. A majority of the Committee shall constitute a quorum thereof
and the actions of a majority of the Committee at a meeting at which a quorum
is present, or actions unanimously approved in writing by all members of the
Committee, shall be the actions of the Committee. Vacancies occurring on the
Committee shall be filled by the Board of Directors. The Committee shall have
full and final authority to interpret this Plan and to prescribe, amend and
rescind rules and regulations, if any, relating to this Plan and to make all
determinations necessary or advisable for the administration of this Plan. The
Committee's determination in all matters referred to herein shall be conclusive
and binding for all purposes and upon all persons, including, but without
limitation, the Company, the shareholders of the Company, the Committee and
each of the members thereof, and employees of the Company, and their respective
successors in interest. The Committee may delegate any of its rights, powers
and duties to any one or more of its members, or to any other person, by
written action as provided herein, acknowledged in writing by the delegate or
delegates. Such delegation may include, without limitation, the power to
execute any documents on behalf of the Committee.

2.2 Liability of Committee: No member of the Committee shall
be liable for anything done or omitted to be done by such member or by any
other member of the Committee or by any person to whom authority is delegated
as provided in the last sentence of Section 2.1 in connection with this Plan,
except for the willful misconduct of such member or as expressly required by
law. The Committee shall have power to engage outside consultants, auditors or
other professionals to assist in the fulfillment of the Committee's duties
under this Plan at the Company's expense.

-4-
<PAGE> 8
ARTICLE III

ELIGIBILITY AND VESTING

3.1 Eligibility. The Committee, in its sole
discretion, shall have the right to determine all issues relating to
eligibility of employees to participate in the Plan, subject to the
requirements set forth in this Section 3.1.

Any Participant who is otherwise eligible to receive a
Bonus under this Plan shall forfeit such Bonus unless (i) the Participant is
actively employed by the Company on the final day of the Bonus Period, (ii) the
Participant dies, retires with entitlement to an immediate payment of pension
benefits under the Battle Mountain Gold Company Pension Plan or (iii) the
Participant becomes permanently disabled (as defined in the Long-Term
Disability Plan maintained by the Company) during the Bonus Period.

The Chief Executive Officer, the President, the Corporate
Vice-Presidents of the Company, the Treasurer, and the Controller and other key
employees of the Company as selected by the Committee, shall be eligible to
participate in the Plan. Participation during one Bonus Period is not a
guaranty of eligibility to participate during a subsequent Bonus Period.

3.2 Vesting of Awards. No Participant shall have
a vested right or interest in any award under this Plan before it is paid. All
determinations and decisions regarding awards under the Plan are final and
conclusive and will be made by the Committee. The interest of any Participant
in an award under the Plan may not be transferred for any reason other than
death, whether voluntarily, involuntarily or by operation of law.

-5-
<PAGE> 9
ARTICLE IV

PAYMENT OF BONUS

4.1 Executive Productivity Bonus: The Bonus of
an eligible Participant under the Plan shall equal the amount of Earnings Paid
multiplied by Actual Award Percentage. The Actual Award Percentage shall be
calculated in accordance with the following formula:

ACF
---- x TAP = AAP
TCF

Notwithstanding the foregoing, the Committee, in its sole
discretion, may adjust the factors used to determine the Bonus paid under this
Section 4.1 if the Committee deems such factors to be unusual or otherwise
warrant special consideration.

4.2 Bonuses Contingent Upon Committee Approval.
Notwithstanding the foregoing, the Committee, in its sole discretion, may
determine that no Bonus will be payable by the Company with respect to a
particular Bonus Period if the Committee determines that due to overall
business conditions the payment of a Bonus under this Plan would be imprudent.

4.3 Payment of Bonus. Each Participant who is
eligible to receive a Bonus shall be entitled to receive such Bonus only if the
Participant (i) is employed by the Company on the final day of the Bonus
Payment or (ii) has terminated employment due to retirement, death or long-term
disability as of the close of the applicable Bonus Period. Such payment shall
be made in cash as soon as practicable after the close of the Bonus Period.

4.4 Payments to Incompetents. Should the
Participant become incompetent by reason of physical or mental disability, the
Company, in its sole discretion, shall have the power to determine whether to
pay the amount to the Participant's guardian or directly to the Participant.
Payments made pursuant to such power shall operate as a complete discharge of
the Committee and the Company.

4.5 Withholding of Taxes. The Company shall
deduct from any benefits paid under the Plan the amount of any taxes required
to be withheld by the federal or any state or local government.

-6-
<PAGE> 10
ARTICLE V

RIGHTS OF PARTICIPANTS

5.1 Limitation of Rights. Nothing in this Plan
shall be construed to:

(a) give any employee of the Company any right to
be awarded any Bonus other than that set forth herein, as determined by
the Plan Administrator;

(b) give a Participant any rights whatsoever with
respect to shares of common stock of the Company;

(d) give a Participant or any other person any
interest in any fund or in any specific asset or assets of the Company;
or

(e) be evidence of any agreement or
understanding, express or implied, that the Company will employ a
Participant in any particular position or at any particular rate of
remuneration.

5.2 Nonalienation of Benefits. No right or
benefit under this Plan shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber or charge the same will be void. No
right or benefit hereunder shall in any manner be liable for or subject to any
debts, contracts, liabilities or torts of the person entitled to such benefits.
If any Participant hereunder shall become bankrupt or attempt to anticipate,
alienate, assign, sell, pledge, encumber or charge any right or benefit
hereunder, or if any creditor shall attempt to subject the same to a writ of
garnishment, attachment, execution, sequestration or any other form of process,
involuntary lien or seizure, then such right or benefit shall be held by the
Company for the sole benefit of the Participant, his or her spouse, children or
other dependents, or for any of them in such manner and in such proportion as
the Plan Administrator shall deem proper, free and clear of the claims of any
other party whatsoever.

5.3 Prerequisites to Benefits. No Participant,
or any person claiming through a Participant, shall have any right or interest
in the Plan or any benefits hereunder unless and until all the terms,
conditions and provisions of the Plan that affect such Participant or such
other person shall have been complied with as specified herein. The
Participant shall complete such forms and furnish such information as the Plan
Administrator may require in the administration of the Plan.

-7-
<PAGE> 11
ARTICLE VI

MISCELLANEOUS

6.1 Amendment or Termination of the Plan. The
Board of Directors of the Company may amend, alter or discontinue the Plan at
any time, except that no amendment or alteration shall be made which would
impair the rights of any Participant to the benefits provided hereunder as to
the awards then standing to the credit of any such Participant at the time of
such amendment or alteration without his consent.

6.2 Reliance Upon Information. The Board of
Directors of the Company and the Committee may rely upon any information
supplied to them by any officer of the Company, the Company's legal counsel or
the Company's independent public accountants in connection with the
administration of the Plan and shall not be liable for any decision or action
in reliance thereon.

6.3 Governing Law. The place of administration
of the Plan shall be conclusively deemed to be within the State of Texas; and
the validity, construction, interpretation and effect of the Plan and all
rights of any and all persons having or claiming to have any interest in the
Plan shall be governed by the laws of the State of Texas.

BATTLE MOUNTAIN GOLD COMPANY

By /s/ Kenneth R. Werneburg

-8-

<PAGE> 1
EXHIBIT 11
BATTLE MOUNTAIN GOLD COMPANY
COMPUTATION OF EARNINGS PER COMMON SHARE
(EXPRESSED IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
Earnings
Net loss $ (4,405) $ (36,403) $ (1,174)
Deduct dividends on preferred shares 3,738 - -
---------- ---------- ----------
Net loss applicable to common stock $ (8,143) $ (36,403) $ (1,174)
========== ========== ==========
Shares
Weighted average number of common
shares outstanding 80,131,904 79,916,997 76,554,784
========== ========== ==========
Primary loss per common share $ (0.10) $ (0.46) $ (0.02)
========== ========== ==========
FULLY DILUTED EARNINGS PER SHARE(1)
Earnings
Net loss $ (4,405) $ (36,403) $ (1,174)
========== ========== ==========
Shares
Weighted average number of common
shares outstanding 80,131,904 79,916,997 76,554,784
Assuming conversion of 6% convertible debentures 4,848,485 4,848,485 4,848,485
Assuming exercise of stock options reduced by the
number of shares which could have been
purchased with the proceeds from exercise of
such options 414,939 131,305 98,961
Assuming conversion of preferred stock 6,931,645 - -
---------- ---------- ----------
Weighted average number of common shares
outstanding as adjusted 92,326,973 84,896,787 81,502,230
========== ========== ==========
Loss per common share assuming full dilution $ (0.05) $ (0.43) $ (0.01)
========== ========== ==========
ADDITIONAL PRIMARY COMPUTATION (1)
Net loss applicable to common stock, as adjusted per
primary computation above $ (8,143) $ (36,403) $ (1,174)
=========== =========== ===========
Additional adjustment to weighted average number of
shares outstanding:
Weighted average number of shares outstanding,
as adjusted per primary computation above 80,131,904 79,916,997 76,554,784
Anti-dilutive effect of outstanding options (as
determined by the application of the treasury stock
method) 101,755 130,422 92,542
Anti-dilutive effect of conversion of
6% convertible debentures 4,848,485 4,848,485 4,848,485
---------- ---------- ----------
Weighted average number of shares, as adjusted 85,082,144 84,895,904 81,495,811
========== ========== ==========
Primary earnings per share, as adjusted $ (0.10) $ (0.43) $ (0.01)
========== ========== ==========
</TABLE>

(1) These calculations are submitted in accordance with Regulation S-K Item
601(b)(11) although it is contrary to paragraphs 30 and 40 of APB Opinion
No. 15 because it produces an anti-dilutive result.

<PAGE> 1
EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED DIVIDENDS
(in thousands of dollars except ratios)

<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------

1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(expressed in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
EARNINGS COMPUTATION USING
CONSOLIDATED INCOME STATEMENT DATA
Income (loss) before income taxes and
minority interest $ (3,785) $ (46,000) $ (5,525) $ 14,056 $ 38,950

Minority interest in income of
majority-owned subsidiaries (4,709) (1,182) - - (197)
------ ------ ------ ------ ------
Income (loss) before income taxes and
cumulative effects of accounting changes (8,494) (47,182) (5,525) 14,056 38,753
------ ------- ------ ------ ------

Add fixed charges included in income (loss):
Interest expense 8,406 1,375 2,290 774 -

Amortization of deferred financing costs 1,073 269 269 262 -

Interest portion of rental expenses (33%) 468 528 429 396 297
------ ------- ------ ------ ------

Sub-total fixed charges included in income (loss) 9,947 2,172 2,988 1,432 297
------ ------- ------ ------ ------
Earnings (loss) $ 1,453 $ (45,010) $ (2,537) $ 15,488 $ 39,050
------ ------ ------ ------ ------
Fixed Charges

Included in income (loss) $ 9,947 $ 2,172 $ 2,988 $ 1,432 $ 297

Capitalized interest 6,655 8,885 6,000 6,015 2,122
------ ------ ------ ------ ------
Total fixed charges 16,602 11,057 8,988 7,447 2,419
------ ------ ------ ------ ------
Preferred dividends 7,208 - - - -
------ ------ ------ ------ ------
Combined fixed charges and
preferred dividends $ 23,810 $ 11,057 $ 8,988 $ 7,447 $ 2,419
------ ------ ------ ------ ------
Ratio of earnings to fixed charges - (1) (1) 2.08 16.14

Amount by which fixed charges exceed earnings $ 15,149 $ 56,067 $ 11,525 - -

Ratio of earnings to combined fixed charges
and preferred dividends - (1) (1) 2.08 16.14

Amount by which combined fixed charges and
preferred dividends exceed earnings $ 22,357 $ 56,067 $ 11,525 - -
</TABLE>

- --------------------------------------------------------
(1) Earnings were inadequate to cover fixed charges in these periods as a
result of asset writedowns and other non-cash charges.

<PAGE> 1

SUBSIDIARIES OF BATTLE MOUNTAIN GOLD COMPANY

<TABLE>
<CAPTION>
Jurisdiction of
Subsidiary Organization
---------- ----------------
<S> <C>
Battle Mountain (Australia) Inc. Delaware
Battle Mountain (Canada) Inc. Nevada
Battle Mountain (Dominican Republic) Inc. Nevada
Battle Mountain Exploration Company Texas
Battle Mountain Finance Company Nevada
Battle Mountain (Irian Jaya) Ltd. Nevada
Battle Mountain (Kayan) Inc. Nevada
Battle Mountain (Ketungau) Inc. Nevada
Battle Mountain North America Inc. Nevada
Battle Mountain (Pacific) Ltd. Nevada
Battle Mountain Resources Inc. Nevada
Battle Mountain Sales Corporation U.S. Virgin Islands
Battle Mountain Services Inc. Nevada
BMG Sub, Inc. Delaware
Compania Minera El Condor Nevada
Compania Minera La Barca S.A. (85%) Bolivia
Compania Minera Vicuna Nevada
Empresa Minera Inti Raymi S.A. (85%) Bolivia
Empresa Minera La Joya S.R.L. (51%) Bolivia
Inversiones Mineras del Inca, S.A. (52.6%) Santiago, Chile
Kori Kollo Corporation Delaware
Minera BMG Nevada
Minera BMG de Chile, Inc. Nevada
Minera BMG de Mexico, S. de R.L. de C.V. Mexico
Minera Hispaniola, S.A. Dominican Republic
Mt. Blanca Land and Cattle Company Nevada
Niugini Mining Limited (52.6%) Papua New Guinea
Niugini Mining (Australia) Pty. Ltd. (52.6%) Australia
Pajingo Gold Mine Pty. Ltd. Queensland, Australia
Red Dome Pty. Ltd. (52.6%) Queensland, Australia
SERMAT S.A. (85%) Bolivia
</TABLE>

<PAGE> 1
EXHIBIT 23(a)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of
our report dated February 18, 1994, included in this Form 10-K, into Battle
Mountain Gold Company's previously filed Registration Statements on Form S-3
No. 33-51921, Form S-4 No. 33-39903 and Form S-8 Nos. 33-14605, 33-22146 and
33-47570.

ARTHUR ANDERSEN & CO.

Houston, Texas
March 21, 1994

<PAGE> 1
EXHIBIT 23 (b)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We consent to the incorporation of our report dated January 22, 1994, on our
audit of Niugini Mining Limited into Battle Mountain Gold Company's previously
filed Registration Statements on Form S-3 No. 33-51921, Form S-4 No. 33-39903
and Form S-8 Nos. 33-14605, 33-22146 and 33-47570.

COOPERS & LYBRAND

Sydney, Australia
March 21, 1994

<PAGE> 1
EXHIBIT 23 (c)

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectuses
constituting part of Battle Mountain Gold Company's Registration Statements on
Form S-3 (No. 33-51921), Form S-4 (No. 33-39903) and on Forms S-8
(Nos. 33-14605, 33-22146 and 33-47570) of our report dated January 17, 1992,
on Empresa Minera Inti Raymi S.A. appearing on page 62 of Battle Mountain Gold
Company's Form 10-K for the year ended December 31, 1993.

MORENO, MUNOZ Y CIA.

La Paz, Bolivia
March 21, 1994

<PAGE> 1

BATTLE MOUNTAIN GOLD COMPANY

Power of Attorney

WHEREAS, BATTLE MOUNTAIN GOLD COMPANY, a Nevada corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1934, as amended (the "Act"), an
Annual Report on Form 10-K for the fiscal year ended December 31, 1993, with
any amendment or amendments thereto, as prescribed by the Commission pursuant
to the Act and the rules and regulations of the Commission promulgated
thereunder, together with any and all exhibits and other documents relating to
such Annual Report;

NOW, THEREFORE, the undersigned, in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Karl
E. Elers, Kenneth R. Werneburg and Robert J. Quinn, and each of them severally,
his true and lawful attorneys-in-fact and agents with power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign such Annual Report and any and all amendments thereto and
all instruments necessary or incidental in connection therewith and to file the
same with the Commission. Each of such attorneys-in-fact and agents shall have
full power and authority to do and perform in the name and on behalf of the
undersigned, in any and all capacities, every act whatsoever necessary or
desirable to be done in the premises, as fully and to all intents and purposes
as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts of such attorneys-in-fact and agents and each
of them.

IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 21st day of March, 1994.

/s/ DOUGLAS J. BOURNE
Douglas J. Bourne
<PAGE> 2
BATTLE MOUNTAIN GOLD COMPANY

Power of Attorney

IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 21st day of March, 1994.

/s/ DELO H. CASPARY
Delo H. Caspary
<PAGE> 3
BATTLE MOUNTAIN GOLD COMPANY

Power of Attorney

IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 21st day of March, 1994.

/s/ CHARLES E. CHILDERS
Charles E. Childers
<PAGE> 4
BATTLE MOUNTAIN GOLD COMPANY

Power of Attorney

IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 21st day of March, 1994.

/s/ JACK R. CROSBY
Jack R. Crosby
<PAGE> 5
BATTLE MOUNTAIN GOLD COMPANY

Power of Attorney

IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 21st day of March, 1994.

/s/ JAMES H. ELDER, JR.
James H. Elder, Jr.
<PAGE> 6
BATTLE MOUNTAIN GOLD COMPANY

Power of Attorney

NOW, THEREFORE, the undersigned, in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint
Kenneth R. Werneburg and Robert J. Quinn, and each of them severally, his true
and lawful attorneys-in-fact and agents with power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign such Annual Report and any and all amendments thereto and
all instruments necessary or incidental in connection therewith and to file the
same with the Commission. Each of such attorneys-in-fact and agents shall have
full power and authority to do and perform in the name and on behalf of the
undersigned, in any and all capacities, every act whatsoever necessary or
desirable to be done in the premises, as fully and to all intents and purposes
as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts of such attorneys-in-fact and agents and each
of them.

IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 7th day of March, 1994.

/s/ KARL E. ELERS
Karl E. Elers
<PAGE> 7
BATTLE MOUNTAIN GOLD COMPANY

Power of Attorney

IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 21st day of March, 1994.

/s/ RODNEY L. GRAY
Rodney L. Gray
<PAGE> 8
BATTLE MOUNTAIN GOLD COMPANY

Power of Attorney

IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 21st day of March, 1994.

/s/ J. HUGH LIEDTKE
J. Hugh Liedtke
<PAGE> 9
BATTLE MOUNTAIN GOLD COMPANY

Power of Attorney

IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 21st day of March, 1994.

/s/ TED H. PATE
Ted H. Pate
<PAGE> 10
BATTLE MOUNTAIN GOLD COMPANY

Power of Attorney

NOW, THEREFORE, the undersigned, in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Karl
E. Elers and Robert J. Quinn, and each of them severally, his true and lawful
attorneys-in-fact and agents with power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any and all amendments thereto and all instruments necessary
or incidental in connection therewith and to file the same with the Commission.
Each of such attorneys-in-fact and agents shall have full power and authority
to do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done in the
premises, as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
such attorneys-in-fact and agents and each of them.

IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 21st day of March, 1994.

/s/ KENNETH R. WERNEBURG
Kenneth R. Werneburg
<PAGE> 11
BATTLE MOUNTAIN GOLD COMPANY

Power of Attorney

IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 21 day of March, 1994.

/s/ WILLIAM A. WISE
William A. Wise