As filed with the Securities and Exchange Commission on June 19, 1996
REGISTRATION NO. 333-_________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
BATTLE MOUNTAIN GOLD COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 76-0151431
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
333 CLAY STREET, 42ND FLOOR
HOUSTON, TEXAS 77002
(713) 650-6400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
ROBERT J. QUINN
VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
BATTLE MOUNTAIN GOLD COMPANY
333 CLAY STREET, 42ND FLOOR
HOUSTON, TEXAS 77002
(713) 650-6400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
----------------
COPY TO:
C. MICHAEL WATSON
BAKER & BOTTS, L.L.P.
3000 ONE SHELL PLAZA
HOUSTON, TEXAS 77002
(713) 229-1234
----------------
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================
AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF BE REGISTERED(2) OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED PER SHARE(3) OFFERING PRICE FEE(4)(5)
=====================================================================================================
<S> <C> <C> <C> <C>
Common Stock, par value $0.10
per share(1) 148,617,459 $7.73 $1,148,521,748 $45,643
=====================================================================================================
</TABLE>
(1) Includes the preferred stock purchase rights associated with the Common
Stock.
(2) Based upon sum of the number of common shares of Hemlo Gold Mines Inc.
("Hemlo Gold Common Shares") outstanding on March 31, 1996 plus the
number of Hemlo Gold Common Shares subject to outstanding options and
purchase rights exercisable on or before July 18, 1996 (the anticipated
closing date of the combination of Hemlo Gold Mines Inc. and the
Registrant (the "Transaction")) multiplied by 1.48, the exchange ratio
in the Transaction.
(3) Calculated pursuant to Rule 457(c), based upon the average of the high
and low prices of Hemlo Gold Common Shares reported on the American
Stock Exchange on June 14, 1996 ($11 7/16), divided by 1.48.
(4) In accordance with Rule 457(b), the registration fee is reduced by
$281,433, which was the fee paid by the registrant to the Securities
and Exchange Commission with respect to the Joint Management
Information Circular and Proxy Statement filed on April 15, 1996 with
respect to the Transaction.
(5) In accordance with Rule 429, shares of Common Stock, par value $0.10
per share, at an aggregate offering price of $200,000,000 are being
carried forward from Registration Statement No. 33-51921, and the
registration fee is reduced by $68,966, the filing fee associated with
such shares.
Pursuant to Rule 429, the Prospectus contained in this Registration
Statement also relates to and constitutes Post-Effective Amendment No. 1 to
Registration Statement No. 33-51921, which became effective on February 9, 1994.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED JUNE 19, 1996
PROSPECTUS
148,617,459 Shares
BATTLE MOUNTAIN GOLD COMPANY
Common Stock
(par value $0.10 per share)
Each share of common stock, par value $0.10 per share (the "Battle
Mountain Common Stock"), of Battle Mountain Gold Company, a Nevada corporation
("Battle Mountain"), offered hereby is issuable upon exchange of an exchangeable
share (an "Exchangeable Share") of Hemlo Gold Mines Inc., an Ontario corporation
("Hemlo Gold"), issued by Hemlo Gold in exchange for Hemlo Gold Common Shares in
connection with the combination of Battle Mountain and Hemlo Gold. In connection
with the combination, Hemlo Gold will change its name to Battle Mountain Canada
Inc. ("Battle Mountain Canada"). Shares of Battle Mountain Common Stock are
being offered on a continuous basis pursuant to Rule 415 under the Securities
Act of 1933, as amended (the "Securities Act"), during the period of time that
the Registration Statement to which this prospectus relates remains effective.
Battle Mountain, Battle Mountain Canada and Battle Mountain Canada Holdco, Inc.,
an indirect, wholly owned subsidiary of Battle Mountain organized under the laws
of the State of Nevada ("Battle Mountain Sub"), will offer shares of Battle
Mountain Common Stock in exchange for Exchangeable Shares from time to time.
Upon such exchange, holders of Exchangeable Shares will be entitled to receive
for each Exchangeable Share one share of Battle Mountain Common Stock, plus an
additional amount equivalent to the full amount of all declared and unpaid
dividends on such Exchangeable Share. See "PLAN OF DISTRIBUTION." All expenses
of registration incurred in connection with this offering are being paid by
Battle Mountain. Battle Mountain, Battle Mountain Canada and Battle Mountain Sub
will receive the Exchangeable Shares exchanged for the shares of Common Stock
offered hereby. The Battle Mountain Common Stock is traded on the New York Stock
Exchange (the "NYSE") and certain other stock exchanges outside the United
States under the symbol "BMG." On June 17, 1996, the closing price of the Battle
Mountain Common Stock on the NYSE was $8 per share.
--------------------
SEE "RISK FACTORS" BEGINNING AT PAGE 3 HEREOF FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH ANY
INVESTMENT IN THE BATTLE MOUNTAIN COMMON STOCK OFFERED HEREBY.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS __________, 1996.
<PAGE>
AVAILABLE INFORMATION
Battle Mountain is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities Exchange Commission (the "Commission"), which can be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549; and
at the regional offices of the Commission at Citicorp Center, 13th Floor, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and at Seven World
Trade Center, New York, New York 10048. Copies of such material can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 at prescribed rates or on the Internet
at http://www.sec.gov. Such reports, proxy statements and other information
concerning Battle Mountain also may be inspected at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
Battle Mountain has filed with the Commission a registration statement
(the "Registration Statement") under the Securities Act with respect to the
shares of Battle Mountain Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to Battle Mountain and such Battle Mountain Common Stock, reference is
made to such Registration Statement and to the exhibits and schedules thereto.
Statements contained in this Prospectus as to the contents of any contract or
any other document referred to are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference. A copy of the Registration Statement may be
obtained at the public reference facilities maintained by the Commission as
provided in the preceding paragraph.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by Battle Mountain with
the Commission pursuant to the Exchange Act (File No. 1-9666), are incorporated
in this Prospectus by reference and shall be deemed to be a part hereof:
(a) Battle Mountain's Annual Report on Form 10-K for the year ended
December 31, 1995, as amended by Form 10-K/A dated April 29, 1996;
(b) Battle Mountain's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996;
(c) Battle Mountain's Form 8-K dated March 11, 1996;
(d) Battle Mountain's Form 8-K dated June 11, 1996;
(e) The description of the Battle Mountain Common Stock contained in
Battle Mountain's Registration Statement on Form 8-A dated August 12,
1987 (as amended by a Form 8 dated April 25, 1991); and
(f) The description of the preferred stock purchase rights associated
with the Battle Mountain Common Stock contained in Battle Mountain's
Registration Statement on Form 8-A dated November 15, 1988 (as amended
by a Form 8 dated November 29, 1988).
All documents filed by Battle Mountain pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part
2
hereof from the date of the filing of such documents. Any statement contained in
this Prospectus, in a supplement to this Prospectus or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed supplement to this
Prospectus or in any document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
Battle Mountain hereby undertakes to provide without charge to each
person, including any beneficial owner, to whom a copy of this Prospectus has
been delivered, on the written or oral request of any such person, a copy of any
or all of the documents referred to above which have been or may be incorporated
in this Prospectus by reference, other than exhibits to such documents (unless
such exhibits are specifically incorporated by reference in such documents).
Written or telephone requests for such copies should be directed to Battle
Mountain at its principal executive offices located at 333 Clay Street, 42nd
Floor, Houston, Texas 77002, Attention: Secretary (telephone number: (713)
650-6400).
RISK FACTORS
Investors should consider carefully the following factors, in addition
to the other information contained in this Prospectus, before exchanging their
Exchangeable Shares for the shares of Battle Mountain Common Stock offered
hereby.
TAXABILITY OF THE EXCHANGE
The exchange of Exchangeable Shares for shares of Battle Mountain
Common Stock is generally a taxable event in Canada and the United States. A
holder's tax consequences can vary depending on a number of factors, including
the residency of the holder, the method of the exchange (redemption or exchange)
and the length of time that the Exchangeable Shares were held prior to exchange.
See "INCOME TAX CONSIDERATIONS."
DIFFERENCES IN CANADA AND U.S. TRADING MARKETS
The Toronto Stock Exchange (the "TSE") has accepted notice of the
Arrangement and has conditionally approved the listing of the Exchangeable
Shares on the effective date of the Arrangement, subject to the satisfaction of
customary requirements of the TSE. The Battle Mountain Common Stock is listed on
the NYSE and certain other exchanges outside the United States. Battle Mountain
has agreed that the shares of Battle Mountain Common Stock issuable from time to
time in exchange for the Exchangeable Shares will be listed on the NYSE. There
is no current intention to list the Exchangeable Shares or Battle Mountain
Common Stock on any other stock exchange in Canada or the United States. As a
result of the foregoing, the price at which the Exchangeable Shares will trade
will be based upon the market for such shares on the TSE and the price at which
the shares of Battle Mountain Common Stock will trade will be based upon the
market for such shares on the NYSE and such other exchanges. Although Battle
Mountain believes that the market price of the Exchangeable Shares on the TSE
and the market price of the Battle Mountain Common Stock on the NYSE and such
other exchanges will reflect essentially equivalent values, there can be no
assurances that the market price of the Battle Mountain Common Stock will be
identical, or even similar, to the market price of the Exchangeable Shares.
FOREIGN PROPERTY
So long as they are listed on a prescribed stock exchange in Canada
(which currently includes the TSE), the Exchangeable Shares will not be foreign
property under the Canadian Tax Act for trusts governed by registered pension
plans, registered retirement savings plans, registered retirement
3
income funds and deferred profit sharing plans or for certain other tax-exempt
persons. Battle Mountain Common Stock will, however, be foreign property for
such plans or persons.
THE COMPANY
Battle Mountain's principal executive offices are located at 333 Clay
Street, 42nd Floor, Houston, Texas 77002, and its telephone number is (713)
650-6400.
USE OF PROCEEDS
Because the shares of Battle Mountain Common Stock will be issued upon
exchange of the Exchangeable Shares, Battle Mountain will receive no net cash
proceeds upon such issuance.
DESCRIPTION OF BATTLE MOUNTAIN CAPITAL STOCK
As of the date of this Prospectus, Battle Mountain is authorized by its
Restated Articles of Incorporation (the "Battle Mountain Articles") to issue
200,000,000 shares of Battle Mountain Common Stock and 20,000,000 shares of
preferred stock, par value $1.00 per share (the "Battle Mountain Preferred
Stock"). In connection with the combination of Battle Mountain and Hemlo Gold,
the Battle Mountain Articles will be amended to increase the number of shares of
Battle Mountain Common Stock authorized for issuance to 500,000,000, increase
the number of shares of Battle Mountain Preferred Stock authorized for issuance
to 50,000,000, authorize one share of special voting stock, par value $0.10 per
share (the "Special Voting Stock") and provide for the relative rights of such
class. As of May 31, 1996, there were 2,299,980 shares of $3.25 Convertible
Preferred Stock (the "Convertible Preferred Stock") issued and outstanding and
an additional 2,000,000 shares of Battle Mountain Preferred Stock designated by
the Board of Directors of Battle Mountain as Series A Junior Participating
Preferred Stock (the "Series A Preferred Stock"). The number of shares of Battle
Mountain Preferred Stock designated as Series A Preferred Stock will be
increased to 5,000,000 in connection with the combination of Battle Mountain and
Hemlo Gold. Shares of Series A Preferred Stock have been initially reserved for
issuance upon exercise of the Rights hereinafter described. See "--Battle
Mountain Preferred Stock--Series A Preferred Stock." On May 31, 1996, there were
(i) 81,335,448 shares of Battle Mountain Common Stock issued and outstanding and
(ii) 4,847,516 shares and 10,952,505 shares of Battle Mountain Common Stock
reserved for issuance upon conversion of the Company's 6% Convertible
Subordinated Debentures due 2005 and of the Convertible Preferred Stock,
respectively. In addition, as of May 31, 1996, 11,073,359 shares of Battle
Mountain Common Stock were authorized and remained available for issuance under
Battle Mountain's stock option plans and other employee benefit plans.
Battle Mountain's ability to pay dividends is subject to certain
restrictions contained in its revolving credit facility.
BATTLE MOUNTAIN COMMON STOCK
Subject to the prior rights of any shares of Battle Mountain Preferred
Stock that may from time to time be outstanding, holders of Battle Mountain
Common Stock are entitled to share ratably in such dividends as may be lawfully
declared by the Board of Directors and paid by Battle Mountain and, in the event
of liquidation, dissolution or winding up of Battle Mountain, are entitled to
share ratably in all assets available for distribution.
The Battle Mountain Common Stock is entitled to one vote per share held
of record on each matter submitted to a vote of stockholders. The holders of
Battle Mountain Common Stock have no preemptive rights to purchase any
securities of Battle Mountain or cumulative voting rights.
4
Preferred stock purchase rights are issuable in respect of all shares of Battle
Mountain Common Stock issued prior to certain events. See "--Battle Mountain
Preferred Stock--Series A Preferred Stock." All outstanding shares of Battle
Mountain Common Stock are validly issued, fully paid and nonassessable. Battle
Mountain is not prohibited by the Battle Mountain Articles from repurchasing
shares of Battle Mountain Common Stock. Any such repurchases would be subject to
any limitations on the amount available for such purpose under applicable
corporate law, any applicable restrictions under the terms of any outstanding
Battle Mountain Preferred Stock or indebtedness and, in the case of market
purchases, such restrictions on the timing, manner and amount of such purchases
as might apply in the circumstances under applicable securities laws.
The outstanding Battle Mountain Common Stock is listed on the NYSE, the
TSE, the Australian Stock Exchange Limited, the Swiss Stock Exchange and the
Frankfurt Stock Exchange under the symbol "BMG." Battle Mountain has agreed that
the shares of Battle Mountain Common Stock issuable from time to time in
exchange for the Exchangeable Shares will be listed on the NYSE.
The transfer agent, registrar and dividend disbursing agent for the
Battle Mountain Common Stock is The Bank of New York.
BATTLE MOUNTAIN SPECIAL VOTING STOCK
A single share of Battle Mountain Special Voting Stock has been
authorized for issuance and a single share is outstanding having a par value of
US$0.10 per share. Except as otherwise required by law or the Battle Mountain
Articles, the share of Special Voting Stock possesses a number of votes equal to
the number of outstanding Exchangeable Shares from time to time not owned by
Battle Mountain or certain subsidiaries of Battle Mountain, and may be voted in
the election of directors and on all other matters submitted to a vote of
stockholders of Battle Mountain. The holders of Battle Mountain Common Stock and
the holder of the share of Special Voting Stock vote together as a single class
on all matters, except to the extent voting as a separate class is required by
applicable law or the Battle Mountain Articles. In the event of any liquidation,
dissolution or winding up of Battle Mountain, the holder of the share of Special
Voting Stock will not be entitled to receive any assets of Battle Mountain
available for distribution to its stockholders. The holder of the share of
Special Voting Stock is not entitled to receive dividends. Pursuant to the
Combination Agreement by and between Battle Mountain and Hemlo Gold effective as
of March 11, 1996, as amended and restated (the "Combination Agreement"), the
share of Special Voting Stock was issued to the trustee appointed under the
Voting, Support and Exchange Trust Agreement entered into among Battle Mountain,
Battle Mountain Sub, Battle Mountain Canada and the trustee thereunder (the
"Voting, Support and Exchange Trust Agreement"). At such time as the share of
Special Voting Stock has no votes attached to it because there are no
Exchangeable Shares outstanding not owned by Battle Mountain or certain
subsidiaries of Battle Mountain, and there are no shares of stock, debt, options
or other agreements of Battle Mountain Canada that could give rise to the
issuance of any Exchangeable Shares to any person (other than Battle Mountain or
certain subsidiaries of Battle Mountain), the share of Special Voting Stock will
be canceled.
BATTLE MOUNTAIN PREFERRED STOCK
Battle Mountain's Board of Directors is authorized, without any further
vote or action by Battle Mountain's stockholders, to divide the Battle Mountain
Preferred Stock into series and, with respect to each series, to determine the
dividend rights, dividend rates, conversion rights, voting rights (which may be
greater or lesser than the voting rights of the Battle Mountain Common Stock),
redemption rights and terms, liquidation preferences, sinking fund rights and
terms, the number of shares constituting the series and the designation of each
series.
CONVERTIBLE PREFERRED STOCK. Holders of shares of Battle Mountain's
Convertible Preferred Stock are entitled to receive, when, as and if declared by
the Board of Directors of Battle Mountain, an
5
annual cash dividend of US$3.25 per share, payable in equal quarterly
installments. Except as required by law or as described in the next sentence,
holders of shares of Convertible Preferred Stock have no voting rights. Whenever
dividends on the Convertible Preferred Stock are in arrears for at least six
full quarterly dividends, holders of the Convertible Preferred Stock will be
entitled (voting separately as a class together with holders of shares of any
one or more other series of capital stock of Battle Mountain ranking on a parity
with the Convertible Preferred Stock as to dividends and having like voting
rights) to elect two additional directors until such dividend arrearage is
eliminated. Each share of Convertible Preferred Stock is convertible at any
time, at the option of the holder, into shares of Battle Mountain Common Stock
at a conversion rate of 4.762 shares of Battle Mountain Common Stock for each
share of Convertible Preferred Stock, subject to adjustment under certain
circumstances. The Convertible Preferred Stock is redeemable at any time on and
after May 15, 1996, at the option of Battle Mountain, in whole or in part, in
exchange for shares of Battle Mountain Common Stock at a redemption price of
US$52.275 per share of Convertible Preferred Stock, and thereafter at prices
decreasing ratably annually to US$50.00 per share on or after May 15, 2003, plus
accrued and unpaid dividends. The number of shares of Battle Mountain Common
Stock to be issued upon the redemption of any share of Convertible Preferred
Stock will be equal to the then-current redemption price divided by the lower of
(i) the average of the daily closing prices of the Battle Mountain Common Stock
for the 20 consecutive trading days immediately preceding the first business day
immediately preceding the date of any applicable redemption notice or (ii) the
closing price of the Battle Mountain Common Stock on the trading day immediately
preceding the first business day immediately preceding the date of any
applicable redemption notice. At no time is the Convertible Preferred Stock
redeemable for cash.
In the event of any liquidation, dissolution or winding up of Battle
Mountain, the holders of shares of Convertible Preferred Stock are entitled to
receive a liquidation preference of US$50.00 per share, plus an amount equal to
any accrued and unpaid dividends to the date of payment, before any distribution
of assets is made to holders of Battle Mountain Common Stock or any other stock
that ranks junior to the Convertible Preferred Stock as to liquidation rights.
The holders of Convertible Preferred Stock and all series or classes of Battle
Mountain's stock that rank on a parity as to liquidation rights with the
Convertible Preferred Stock are entitled to share ratably, in accordance with
the respective preferential amounts payable on such stock, in any distribution
which is not sufficient to pay in full the aggregate of the amounts payable
thereon.
The Convertible Preferred Stock is listed for trading on the NYSE. The
registrar, transfer agent, conversion agent and dividend disbursing agent for
the Convertible Preferred Stock is The Bank of New York.
SERIES A PREFERRED STOCK. On November 10, 1988, the Board of Directors
of Battle Mountain declared a dividend of one Right (a "Right") for each
outstanding share of Battle Mountain Common Stock to stockholders of record at
the close of business on November 21, 1988. Rights are issuable in respect of
all shares of Battle Mountain Common Stock issued after such record date but
prior to the earliest of (i) the Distribution Date (as defined below), (ii) the
date on which the Rights are redeemed as provided below and (iii) November 10,
1998. Each Right entitles the registered holder to purchase from Battle Mountain
a unit consisting of one one-hundredth of a share (a "Unit") of Battle
Mountain's Series A Junior Participating Preferred Stock (the "Series A
Preferred Stock"), at a purchase price of US$60 per Unit, subject to adjustment
(the "Purchase Price").
The Rights are now attached to all Battle Mountain Common Stock
certificates representing outstanding shares, and no separate Rights
Certificates have been distributed. The Rights will separate from the Battle
Mountain Common Stock and a "Distribution Date" will occur upon the earlier of
(i) 10 days following a public announcement that a person or group of affiliated
or associated persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 20 percent or more of the outstanding
shares of Battle Mountain Common Stock (the date of the announcement being the
"Stock Acquisition Date") or (ii) 10 business days (or such later
6
date as may be determined by Battle Mountain's Board of Directors before the
Distribution Date occurs) following the commencement of a tender offer or
exchange offer that would result in a person or group beneficially owning 30
percent or more of such outstanding shares of Battle Mountain Common Stock. The
Rights Agreement specifying the terms of the Rights (the "Rights Agreement")
provides that Noranda Inc., an Ontario corporation ("Noranda"), will not be an
Acquiring Person unless and until it or any of its affiliates purchase or
otherwise become the beneficial owner of shares of Battle Mountain Common Stock
in addition to that acquired by it in the transaction contemplated by the
Combination Agreement (the "Transaction") or any other person or persons who is
(or collectively are) the beneficial owners of any shares of Battle Mountain
Common Stock become an affiliate of Noranda unless (x) in either such case,
Noranda, together with all of its affiliates, is not then the beneficial owner
of 20 percent or more of the shares of Battle Mountain Common Stock then
outstanding or (y) in case Noranda becomes the beneficial owner of such
additional shares as a result of the acquisition of another person or becomes an
affiliate of another person as a result of a bona fide transaction undertaken
primarily for another purpose not related to the acquisition of beneficial
ownership of shares of Battle Mountain Common Stock and not for any purpose with
any effect of changing or influencing control of Battle Mountain, Noranda
promptly divests or causes to be divested such additional shares or the shares
owned beneficially by such affiliate. For purposes of the Rights, beneficial
ownership of Exchangeable Shares will be treated as beneficial ownership of
Battle Mountain Common Stock and calculations of percentage ownership, the
number of shares outstanding and related provisions will be made on a basis that
treats the Battle Mountain Common Stock and Exchangeable Shares as though they
are the same security. The Rights are not exercisable until the Distribution
Date and will expire at the close of business on November 10, 1998, unless
earlier redeemed by Battle Mountain as described below.
In the event that (i) Battle Mountain is the surviving corporation in a
merger with an Acquiring Person and the Battle Mountain Common Stock is not
changed or exchanged, (ii) a person becomes the beneficial owner of 30 percent
or more of the then outstanding shares of Battle Mountain Common Stock (except
pursuant to a tender or exchange offer for all outstanding shares of Battle
Mountain Common Stock at a price and on terms that a majority of the independent
directors of Battle Mountain determines to be fair to and otherwise in the best
interests of Battle Mountain and its stockholders), (iii) an Acquiring Person
engages in one or more "self-dealing" transactions as set forth in the Rights
Agreement or (iv) during such time as there is an Acquiring Person, an event
involving Battle Mountain or a subsidiary of Battle Mountain occurs that results
in such Acquiring Person's ownership interest being increased by more than one
percent (e.g., a reverse stock split), at any time following the Distribution
Date, each holder of a Right will thereafter have the right to receive, upon
exercise, Battle Mountain Common Stock (or, in certain circumstances, cash,
property or other securities of Battle Mountain) having a value equal to two
times the exercise price of the Right. The exercise price is the Purchase Price
multiplied by the number of Units issuable upon exercise of the Right prior to
the event described in this paragraph (initially, one). Notwithstanding any of
the foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person (or by
certain related parties) will be null and void. However, Rights are not
exercisable following the occurrence of any of the events set forth above until
such time as the Rights are no longer redeemable by Battle Mountain as set forth
below.
In the event that, on or after the Stock Acquisition Date, (i) Battle
Mountain is acquired in a merger or other business combination transaction
(other than a merger described in the preceding paragraph or a merger which
follows an offer described in the preceding paragraph) or (ii) 50 percent or
more of Battle Mountain's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as set forth
above) will thereafter have the right to receive, upon exercise, common stock of
the acquiring company having a value equal to two times the exercise price of
the Right.
7
At any time until 10 days following the Stock Acquisition Date, Battle
Mountain may redeem the Rights in whole, but not in part, at a price of US$0.01
per Right, payable, at the option of Battle Mountain, in cash, shares of Battle
Mountain Common Stock or such other consideration as the Board of Directors may
determine. The Rights may have certain antitakeover effects, including deterring
someone from acquiring control of Battle Mountain in a manner or on terms not
approved by the Board of Directors of Battle Mountain. The Rights should not
interfere with any merger or other business combination approved by the Board of
Directors of Battle Mountain.
Any shares of Series A Preferred Stock that may be issued upon exercise
of the Rights will be nonredeemable. The holders of shares of Series A Preferred
Stock will be entitled to receive, when, as and if declared, a preferential
quarterly dividend in an amount per share effectively equal to the greater of
US$2.00 per share or 100 times any cash or noncash dividend or other
distribution declared on the Battle Mountain Common Stock (other than dividends
payable in shares of Battle Mountain Common Stock), in like kind. In the event
of liquidation, the holders of the Series A Preferred Stock will be entitled to
receive a liquidation payment per share in an amount effectively equal to the
greater of US$100 per share or 100 times the per share amount distributed to
holders of Battle Mountain Common Stock. In the event of any merger,
consolidation or other transaction in which shares of Battle Mountain Common
Stock are exchanged, the holder of the shares of Series A Preferred Stock will
be entitled to receive per share 100 times the amount received per share of
Battle Mountain Common Stock. Holders of Series A Preferred Stock will have 100
votes per share of Series A Preferred Stock and, except as otherwise provided in
the Battle Mountain Articles or required by law, will vote together with holders
of Battle Mountain Common Stock as a single class. The rights of the Series A
Preferred Stock as to dividends, liquidation and voting are protected by
antidilution provisions. Whenever dividend payments on the Series A Preferred
Stock are in arrears, Battle Mountain will not (i) purchase or redeem any shares
of Series A Preferred Stock or shares ranking on a parity with respect to the
Series A Preferred Stock except in accordance with a purchase offer to all
holders, (ii) declare or pay dividends on or purchase or redeem any shares of
stock ranking junior to the Series A Preferred Stock or (iii) declare or pay
dividends on or purchase or redeem any shares of stock ranking on a parity with
the Series A Preferred Stock except dividends paid ratably on the Series A
Preferred Stock and all such parity stock and except purchases or redemptions of
such parity stock in exchange for junior stock. If dividend payments on the
Series A Preferred Stock are in arrears for six quarters, the holders of the
Series A Preferred Stock (altogether with holders of any other Preferred Stock
with similar rights) will have the right to elect two additional directors of
Battle Mountain.
OTHER MATTERS
ANTITAKEOVER PROVISIONS. The Battle Mountain Articles and the bylaws,
as amended, of Battle Mountain ("Battle Mountain Bylaws") contain certain
provisions that might be characterized as antitakeover provisions. Such
provisions may render more difficult certain possible takeover proposals to
acquire control of Battle Mountain and make removal of management of Battle
Mountain more difficult.
PROVISIONS OF THE BATTLE MOUNTAIN ARTICLES AND BATTLE MOUNTAIN BYLAWS.
The Battle Mountain Articles and the Battle Mountain Bylaws set the number of
directors at a minimum of three and a maximum of 12, as may be fixed from time
to time by resolution of the entire Board of Directors, and provide that the
membership of the classified Board of Directors shall be divided into three
classes, as nearly equal in number as possible, each of which serves for three
years, with each class' term ending in a successive year. Under the Nevada
General Corporation Law (the "NGCL"), any director may be removed from office
upon the vote of stockholders representing not less than two-thirds of the
issued and outstanding capital stock entitled to voting power, unless a
corporation's articles require the concurrence of a larger percentage of the
stock entitled to voting power. As permitted by the NGCL, Battle Mountain
Articles provide that a director may be removed from
8
office without cause only by the affirmative vote of the holders of not less
than 80 percent of the number of shares of Battle Mountain Common Stock then
outstanding.
Pursuant to the Battle Mountain Articles, the vote of holders of 80
percent of the voting power of all stock of Battle Mountain entitled to vote in
elections of directors (excluding stock entitled so to be voted only upon the
happening of some contingency unless such contingency shall have occurred and is
continuing) is required for approval of, with certain exceptions, a merger or
consolidation of Battle Mountain with or into another corporation, a sale or
lease of all or substantially all the assets of Battle Mountain to another
corporation, person or entity and, under certain conditions, a sale or lease to
Battle Mountain of assets in exchange for voting securities (or securities
convertible into or exchangeable for voting securities) of Battle Mountain or
any of its subsidiaries, in each case where the other party to the transaction
is the beneficial owner, directly or indirectly, of 5 percent or more of the
outstanding shares of any class or series of voting stock of Battle Mountain. In
addition, for any transaction to be effected for which the foregoing 80 percent
vote is required, it is also required that such transaction be approved by a
majority of the outstanding voting power of the voting stock of Battle Mountain,
exclusive of the voting stock beneficially owned, directly or indirectly, by the
party whose interest in the transaction and stock ownership in Battle Mountain
gives rise to the requirement of the 80 percent vote. The foregoing requirements
described in this paragraph do not apply to a transaction if (i) the Board of
Directors of Battle Mountain has approved a memorandum of understanding with
respect to such transaction with the other party to the transaction prior to the
time the 5 percent beneficial ownership position is acquired or (ii) the
transaction is made with a corporation of which 50 percent or more of its
outstanding voting stock is beneficially owned, directly or indirectly, by
Battle Mountain.
As permitted by the NGCL, the Battle Mountain Articles provide that no
action may be taken by stockholders without a meeting except by the unanimous
written consent of all stockholders entitled to vote on such action. Special
meetings of stockholders may be called only by a majority of the Board of
Directors, the Chairman of the Board or the President of Battle Mountain.
The Battle Mountain Articles require approval of at least 80 percent of
the total voting power of the voting stock of Battle Mountain and approval of
the holders of at least a majority of the voting power of the voting stock of
Battle Mountain exclusive of all voting stock of Battle Mountain owned by
beneficial owners of 5 percent or more of the outstanding shares of any class or
series of voting stock of Battle Mountain to effect an amendment or repeal of,
or the adoption of any provision inconsistent with, the provisions of such
articles relating to (i) the alteration, amendment or repeal of the Battle
Mountain Bylaws by stockholders, (ii) the organization and powers of the Board
of Directors and the nomination, election and removal of directors, (iii)
stockholder action without meetings and the calling of special stockholder
meetings or (iv) the affirmative vote required for approval of the transactions
described in the preceding paragraph between Battle Mountain and beneficial
owners of 5 percent or more of the outstanding shares of any class or series of
voting stock of Battle Mountain. The Battle Mountain Articles also require the
same affirmative vote for the amendment or repeal of the foregoing provision.
The Battle Mountain Articles and the Battle Mountain Bylaws provide
that the Bylaws may be altered, amended or repealed by the stockholders only by
the affirmative vote of at least 80 percent of the voting power of all shares of
Battle Mountain represented at any regular meeting of stockholders (or at any
special meeting thereof duly called for that purpose) and entitled to vote
generally in the election of directors, voting together as a class.
The ability of the Board of Directors to determine the preferences,
relative rights, qualifications and restrictions of the Preferred Stock and to
issue Preferred Stock without stockholder approval could have an antitakeover
effect.
9
The Board of Directors has adopted a preferred stock purchase rights
plan which has an antitakeover effect. See "--Battle Mountain Preferred Stock
- --Series A Preferred Stock" for a description of the plan.
Battle Mountain's committed revolving credit facility provides that it
is an event of default thereunder if (a) any person or group acquires beneficial
ownership of 20 percent or more of the voting stock of Battle Mountain or (b)
during any period of up to 24 consecutive months, individuals who at the
beginning of such 24-month period were directors of Battle Mountain cease for
any reason to constitute a majority of the Board of Directors of Battle
Mountain.
NEVADA CORPORATION LAW. Sections 78.378 ET SEQ. of the NGCL generally
disallow the exercise of voting rights with respect to "control shares" of an
"issuing corporation" held by an "acquiring person," unless such voting rights
are conferred by a majority vote of the disinterested stockholders. "Control
shares" are the voting shares of an issuing corporation acquired in connection
with the acquisition of a "controlling interest." "Controlling interest" is
defined in terms of threshold levels of voting share ownership, which
thresholds, whenever each may be crossed, trigger application of the voting bar
with respect to the shares newly acquired. The issue of voting rights is
presented at the next annual or special meeting of stockholders after the
acquisition in question, unless a special meeting of stockholders is requested
sooner by the acquiring person. At such meeting, the votes of an "interested
stockholder" are not counted towards the majority approval requirement under
this statute. In the event that the control shares are accorded full voting
rights (but only if the acquiring person has acquired a majority voting interest
in the issuing corporation), any stockholder, other than the acquiring person,
who has not voted in favor of authorizing voting rights for the control shares
is entitled to demand payment for the fair value of his shares. Such right of
payment may, however, be expressly withdrawn by the corporate charter or bylaws.
Any charter or bylaw amendment withdrawing such right must be adopted prior to
the 10th day following the acquisition of a controlling interest. In the event
that the control shares are not accorded full voting rights, the issuing
corporation may call for redemption of all, but not less than all, of the
control shares at the average price paid for such shares, but only if the
corporate charter or bylaws expressly permit such redemption. Any charter or
bylaw amendment providing for such right of redemption must be adopted prior to
the 10th day following the acquisition of a controlling interest.
Battle Mountain is subject to Sections 78.411, ET SEQ. of the NGCL,
which generally prohibit a publicly held Nevada corporation from engaging in any
"combination" with an "interested stockholder" for three years after the date
the interested stockholder became an interested stockholder unless, prior to
that date, either the combination or the purchase of shares that resulted in the
interested stockholder becoming such is approved by the board of directors of
the corporation. An "interested stockholder" is a person who, together with
affiliates and associates, is the beneficial owner (or within the previous three
years was the beneficial owner) of 10 percent or more of the voting power of the
corporation's outstanding voting shares. A "business combination" generally
includes mergers, asset sales and share issuances above threshold sizes, and
certain other transactions resulting in financial benefit to the interested
stockholder. Even after the expiration of the three-year period in which such
business combinations with an interested stockholder are prohibited, a
corporation may not engage in a business combination with an interested
stockholder unless, in addition to meeting applicable requirements of the
corporation's articles of incorporation, either (1) the combination is approved
by the affirmative vote of a majority of the outstanding voting power of the
corporation not beneficially owned by the interested stockholder (or affiliates
or associates) at a meeting called for that purpose not earlier than the end of
such three-year period or (2) certain requirements for the minimum consideration
payable to holders other than the disinterested holder are met (based on the
higher of (a) the highest price per share paid by the interested stockholder
within prescribed periods and (b) the market value per share on the date of
announcement of the transaction or the date the interested stockholder became
such (in each case plus an amount based on an interest factor net of certain
dividends) and (c) in the case of a class other than common stock, the highest
preferential amount payable upon liquidation.
10
DIRECTOR AND OFFICER LIABILITY PROVISIONS. The Battle Mountain Articles
eliminate the personal liability of each director and officer of Battle Mountain
to Battle Mountain or any of its stockholders for damages resulting from
breaches of fiduciary duty as a director or officer involving any act or
omission of any such director or officer occurring on or after April 28, 1987.
The Battle Mountain Articles do not limit or eliminate the liability of a
director or officer for actions or omissions involving intentional misconduct,
fraud, a knowing violation of law or payment of an unlawful dividend.
GENERAL. The summary references above regarding the Battle Mountain
Articles and the Battle Mountain Bylaws, filed as exhibits to the Registration
Statement of which this Prospectus is a part, do not purport to be complete and
are qualified in their entirety by reference to the Battle Mountain Articles and
the Battle Mountain Bylaws.
PLAN OF DISTRIBUTION
EXCHANGEABLE SHARES
Pursuant to the terms of a plan of arrangement (the "Plan of
Arrangement") under section 182 of the Business Corporations Act (Ontario) (the
"OBCA"), Battle Mountain Canada will undergo a reorganization of capital
whereby, among other things, it will issue 1.48 Exchangeable Shares in exchange
for each existing Hemlo Gold Common Share (other than Hemlo Gold Common Shares
held by Battle Mountain and by holders who properly exercised their rights of
dissent and are ultimately entitled to be paid fair value for their shares) (the
"Arrangement") at the effective time (the "Effective Time") of the combination
of Hemlo Gold and Battle Mountain (the "Combination").
Battle Mountain Common Stock may be issued to holders of Exchangeable
Shares as follows: (i) holders of Exchangeable Shares may require at any time
that such shares be exchanged for an equivalent number of shares of Battle
Mountain Common Stock (see "-- Procedures for Issuance of Battle Mountain Common
Stock -- Election by Holders to Exchange Exchangeable Shares"); (ii) Battle
Mountain, Battle Mountain Sub and Battle Mountain Canada may redeem such
Exchangeable Shares by exchanging therefor an equal number of shares of Battle
Mountain Common Stock (see "-- Procedures for Issuance of Battle Mountain Common
Stock -- Redemption of Exchangeable Shares"); and (iii) upon liquidation of
Battle Mountain or Battle Mountain Canada, holders of Exchangeable Shares may be
required to, or may elect to, exchange such Exchangeable Shares for shares of
Battle Mountain Common Stock (see "-- Procedures for Issuance of Battle Mountain
Common Stock -- Liquidation of Battle Mountain Canada" and "--Liquidation of
Battle Mountain"). No broker, dealer or underwriter has been engaged in
connection with the offering of the Battle Mountain Common Stock covered hereby.
The following is a description of certain rights, privileges,
restrictions and conditions attaching to the Exchangeable Shares, which are
attached to the Plan of Arrangement (the "Exchangeable Share Provisions"), and
certain provisions of the Voting, Support and Exchange Trust Agreement to be
entered into between Hemlo Gold, Battle Mountain and The R-M Trust Company, as
trustee (the "Voting, Support and Exchange Trust Agreement"). The Plan of
Arrangement and the Voting, Support and Exchange Trust Agreement are included as
exhibits to the Registration Statement of which this Prospectus constitutes a
part, and the following description is qualified in its entirely by reference to
the Plan of Arrangement and the Voting, Support and Exchange Trust Agreement.
11
PROCEDURES FOR ISSUANCE OF BATTLE MOUNTAIN COMMON STOCK
ELECTION BY HOLDERS TO EXCHANGE EXCHANGEABLE SHARES. Holders of the
Exchangeable Shares are entitled at any time to retract (I.E., require Battle
Mountain Canada to redeem) any or all such Exchangeable Shares owned by them and
to receive an equivalent number of shares of Battle Mountain Common Stock, plus
an additional amount equivalent to all declared and unpaid dividends on such
Exchangeable Shares, subject to the rights of Battle Mountain and Battle
Mountain Sub described below. Holders of the Exchangeable Shares may effect such
retraction by presenting a certificate or certificates to Battle Mountain Canada
or its transfer agent representing the number of Exchangeable Shares the holder
desires to retract, together with a duly executed statement (the "Retraction
Request") specifying the number of Exchangeable Shares the holder wishes to
retract and such other documents as may be required to effect the retraction of
the Exchangeable Shares. The retraction will become effective five business days
after the request is received by Battle Mountain Canada (the "Retraction Date").
Upon receipt of a Retraction Request, Battle Mountain Canada is
required to immediately notify Battle Mountain and Battle Mountain Sub of such
Retraction Request. Battle Mountain or Battle Mountain Sub will thereafter have
two business days in which to exercise its overriding right (the "Retraction
Call Right") to purchase all of the Exchangeable Shares submitted by the holder
thereof by the delivery of an equivalent number of shares of Battle Mountain
Common Stock plus an additional amount equivalent to the full amount of all
declared and unpaid dividends on the Exchangeable Shares (the "Retraction
Price") to the transfer agent for delivery to such holder on the Retraction
Date. If either Battle Mountain or Battle Mountain Sub so advises Battle
Mountain Canada within such two business day period, Battle Mountain Canada will
notify the holder as soon as possible thereafter that the Retraction Call Right
will be exercised. A holder may revoke his or her Retraction Request at any time
prior to the close of business on the business day preceding the Retraction
Date, in which case the holder's Exchangeable Shares will neither be purchased
by Battle Mountain or Battle Mountain Sub nor redeemed by Battle Mountain
Canada. In the event neither Battle Mountain nor Battle Mountain Sub determines
to exercise its Retraction Call Right and provided that the Retraction Request
is not revoked by the holder, Battle Mountain Canada is obligated to deliver to
the holder the number of shares of Battle Mountain Common Stock equal to the
number of Exchangeable Shares submitted by the holder for retraction, plus an
additional amount equivalent to the full amount of all declared and unpaid
dividends on such Exchangeable Shares. If only a part of the Exchangeable Shares
represented by any certificate is redeemed, a new certificate for the balance of
such Exchangeable Shares will be issued to the holder at Battle Mountain
Canada's expense. If, as a result of solvency provisions of applicable law,
Battle Mountain Canada is not permitted to redeem all Exchangeable Shares
tendered by a retracting holder, Battle Mountain Canada will redeem only those
Exchangeable Shares tendered by the holder (rounded down to a whole number of
shares) as would not be contrary to such provisions of applicable law.
Exchangeable Shares not redeemed by Battle Mountain Canada as a result of such
solvency provisions are subject to redemption pursuant to the optional exchange
right granted to the trustee under the Voting, Support and Exchange Trust
Agreement as described below under "-- Liquidation of Battle Mountain Canada."
The Retraction Call Right may, in general, be exercised, at the
election of Battle Mountain, by either Battle Mountain or Battle Mountain Sub,
but with respect to holders of Exchangeable Shares who acquire in the
Arrangement Exchangeable Shares that are exchangeable into more than 5 percent
of the number of shares of Battle Mountain Common Stock outstanding at the
Effective Time and who have properly requested that Battle Mountain enter into a
tax cooperation agreement pursuant to the Combination Agreement ("Initial 5
Percent Holders"), may be exercised only by Battle Mountain Sub unless certain
conditions have occurred.
REDEMPTION OF EXCHANGEABLE SHARES. Subject to applicable law and the
Redemption Call Right of Battle Mountain or Battle Mountain Sub described below,
on any date on or after July 31, 2003
12
specified by the Battle Mountain Canada Board of Directors or such earlier date
as specified by the Battle Mountain Canada Board of Directors if there are fewer
than 5,000,000 Exchangeable Shares outstanding (other than Exchangeable Shares
held by Battle Mountain and its direct and indirect subsidiaries and subject to
adjustment to such number of shares to reflect permitted changes to Exchangeable
Shares) (the "Optional Redemption Date"), Battle Mountain Canada will redeem all
of the then outstanding Exchangeable Shares in exchange for an equal number of
shares of Battle Mountain Common Stock, plus an additional amount equivalent to
the full amount of all declared and unpaid dividends on such Exchangeable Shares
(the "Redemption Price"). Notwithstanding any proposed redemption of the
Exchangeable Shares by Battle Mountain Canada, Battle Mountain and Battle
Mountain Sub will have the overriding right (the "Redemption Call Right") to
purchase on the Optional Redemption Date all of the outstanding Exchangeable
Shares (other than Exchangeable Shares held by Battle Mountain, Battle Mountain
Sub or a single wholly owned subsidiary of Battle Mountain incorporated under
the federal laws of Canada or a province thereof ("Canada Holdco")) in
exchange for the Redemption Price and, upon the exercise of the Redemption Call
Right, the holders thereof will be obligated to sell such shares to Battle
Mountain or Battle Mountain Sub, as applicable. If either Battle Mountain or
Battle Mountain Sub exercises the Redemption Call Right, Battle Mountain
Canada's right to redeem the Exchangeable Shares on such Optional Redemption
Date will terminate.
Battle Mountain Canada will, at least 120 days before the Optional
Redemption Date, provide the registered holders of Exchangeable Shares with
written notice of the proposed redemption of the Exchangeable Shares by Battle
Mountain Canada. On or after the date such proposed redemption is exercised,
upon the holder's presentation and surrender of the certificates representing
the Exchangeable Shares and such other documents as may be required at the
office of the transfer agent or the registered office of Battle Mountain Canada,
Battle Mountain Canada will deliver the Redemption Price to the holder at the
address of the holder recorded in the securities register or by holding the
Redemption Price for pick up by the holder at the registered office of Battle
Mountain Canada or the office of the transfer agent as specified in the written
notice.
The Redemption Call Right may, in general, be exercised, at the
election of Battle Mountain, by either Battle Mountain or Battle Mountain Sub,
but with respect to an Initial 5 Percent Holder, may be exercised only by Battle
Mountain Sub unless certain conditions have occurred. If the Redemption Call
Right is exercised, Battle Mountain Canada may elect to redeem all then
outstanding Exchangeable Shares on a subsequent Optional Redemption Date.
LIQUIDATION OF BATTLE MOUNTAIN CANADA. In the event of the liquidation,
dissolution or winding up of Battle Mountain Canada or any other proposed
distribution of the assets of Battle Mountain Canada among its shareholders for
the purpose of winding up its affairs, holders of the Exchangeable Shares will
be entitled to receive from Battle Mountain Canada one share of Battle Mountain
Common Stock for each Exchangeable Share they hold, plus an additional amount
equivalent to the full amount of all declared and unpaid dividends on each such
Exchangeable Share (the "Liquidation Amount"). Upon the occurrence of such
liquidation, dissolution or winding up, Battle Mountain and Battle Mountain Sub
will have the right (the "Liquidation Call Right") to purchase all of the
outstanding Exchangeable Shares (other than Exchangeable Shares held by Battle
Mountain, Battle Mountain Sub or Canada Holdco) from the holders thereof on the
effective date of such liquidation, dissolution or winding up (the "Liquidation
Date") in exchange for the Liquidation Amount and, upon the exercise of the
Liquidation Call Right, the holders thereof will be obligated to sell such
shares to Battle Mountain or Battle Mountain Sub, as applicable. Upon the
occurrence of a Battle Mountain Canada Insolvency Event, the trustee under the
Voting, Support and Exchange Trust Agreement will have the right to require
Battle Mountain to purchase any or all of the Exchangeable Shares then
outstanding (other than Exchangeable Shares held by Battle Mountain and certain
of its subsidiaries) for the Liquidation Amount. A "Battle Mountain Canada
Insolvency Event" is the institution by Battle Mountain Canada of any proceeding
to be adjudicated a bankrupt or insolvent or to be dissolved or wound up, or the
consent of Battle Mountain Canada to the institution of
13
bankruptcy, insolvency, dissolution or winding-up proceedings against it, or the
filing of a petition, answer or consent seeking dissolution or winding up under
any bankruptcy, insolvency or analogous laws, including without limitation the
Companies Creditors' Arrangement Act (Canada) and the Bankruptcy and Insolvency
Act (Canada), and the failure by Battle Mountain Canada to contest in good faith
any such proceedings commenced in respect of Battle Mountain Canada within 15
days of becoming aware thereof, or the consent by Battle Mountain Canada to the
filing of any such petition or to the appointment of a receiver, or the making
by Battle Mountain Canada of a general assignment for the benefit of creditors,
or the admission in writing by Battle Mountain Canada of its inability to pay
its debts generally as they become due, or Battle Mountain Canada not being
permitted, pursuant to solvency requirements of applicable law, to redeem any
Exchangeable Shares pursuant to the Exchangeable Share Provisions.
On or after the Liquidation Date, a holder of Exchangeable Shares may
surrender certificates representing such Exchangeable Shares, together with such
other documents as may be required, to Battle Mountain Canada's registered
office or the office of the transfer agent. Upon receipt of the certificates and
other documents and subject to the exercise by Battle Mountain and Battle
Mountain Sub of its Liquidation Call Right, Battle Mountain Canada will deliver
the Liquidation Amount to such holder at the address recorded in the securities
register or by holding the Liquidation Amount for pick up by the holder at
Battle Mountain Canada's registered office or the office of the transfer agent,
as specified by Battle Mountain Canada in a notice to such holders.
The Liquidation Call Right may, in general, be exercised, at the
election of Battle Mountain, by either Battle Mountain or Battle Mountain Sub,
but with respect to an Initial 5 Percent Holder, may be exercised only by Battle
Mountain Sub unless certain conditions have occurred.
LIQUIDATION OF BATTLE MOUNTAIN. Upon the occurrence of a Battle
Mountain Liquidation Event, in order for the holders of the Exchangeable Shares
to participate on a pro rata basis with the holders of Battle Mountain Common
Stock, Battle Mountain will purchase each outstanding Exchangeable Share (other
than Exchangeable Shares held by Battle Mountain, Battle Mountain Sub or Canada
Holdco), and holders of such Exchangeable Shares will be required to sell the
Exchangeable Shares held by them at that time, in exchange for the Liquidation
Amount on the fifth business day prior to the effective date of the liquidation,
dissolution or winding up contemplated by a Battle Mountain Liquidation Event. A
"Battle Mountain Liquidation Event" means (i) any determination by Battle
Mountain's Board of Directors to institute voluntary liquidation, dissolution or
winding-up proceedings with respect to Battle Mountain or to effect any other
distribution of assets of Battle Mountain among its stockholders for the purpose
of winding up its affairs or (ii) receipt by Battle Mountain of notice of, or
Battle Mountain otherwise becoming aware of, any threatened or instituted claim,
suit, petition or other proceeding with respect to the involuntary liquidation,
dissolution or winding up of Battle Mountain or to effect any other distribution
of assets of Battle Mountain among its stockholders for the purpose of winding
up its affairs.
Upon a holder's request and surrender of Exchangeable Share
certificates, duly endorsed in blank and accompanied by such instruments of
transfer as Battle Mountain may reasonably require, Battle Mountain will deliver
to such holder certificates representing an equivalent number of shares of
Battle Mountain Common Stock plus a check in the amount equivalent to the full
amount of all declared and unpaid dividends on the Exchangeable Shares.
14
INCOME TAX CONSIDERATIONS
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of McCarthy Tetrault, who acted as counsel for Hemlo
Gold in connection with the Arrangement, the following is a summary of the
principal Canadian federal income tax considerations under the Canadian Tax Act
generally applicable to Battle Mountain Canada shareholders who, for purposes of
the Canadian Tax Act, hold their Exchangeable Shares and Battle Mountain Common
Stock as capital property and deal at arm's length with Battle Mountain Canada,
Battle Mountain and Battle Mountain Sub. This summary does not apply to a
shareholder with respect to whom Battle Mountain or Battle Mountain Sub is or
will be a foreign affiliate within the meaning of the Canadian Tax Act or who
holds more than 10 percent of the Exchangeable Shares.
The Exchangeable Shares will generally be considered to be capital
property to a shareholder unless held in the course of carrying on a business,
in an adventure in the nature of trade or as "mark-to-market" property for
purposes of the Canadian Tax Act. Shareholders who are resident in Canada and
whose Exchangeable Shares might not otherwise qualify as capital property may be
entitled to obtain such qualification by making the irrevocable election
provided by subsection 39(4) of the Canadian Tax Act. Shareholders who do not
hold their Exchangeable Shares as capital property should consult their own tax
advisors regarding their particular circumstances and, in the case of certain
"financial institutions" (as defined in the Canadian Tax Act), the potential
application to them of the special "mark-to-market" rules in the Canadian Tax
Act, as the following discussion does not apply to such shareholders.
This summary is based on the Canadian Tax Act, the regulations
thereunder, the Canada-United States Income Tax Convention (the "Tax Treaty")
and counsel's understanding of the administrative practices published by Revenue
Canada, Customs, Excise and Taxation ("Revenue Canada"), all in effect as of the
date of this Prospectus. This summary takes into account specific proposals to
amend the Canadian Tax Act and regulations announced prior to the date hereof
(the "Tax Proposals"), although no assurances can be given that the Tax
Proposals will be enacted in the form presented, or at all. This summary does
not take into account or anticipate any other changes in law, whether by
judicial, governmental or legislative action or decision, nor does it take into
account provincial, territorial or foreign income tax legislation or
considerations, which may differ from the Canadian federal income tax
considerations described herein. No advance income tax ruling has been obtained
from Revenue Canada to confirm the tax consequences of any of the transactions
described herein.
THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, AND
SHOULD NOT BE CONSTRUED TO BE, LEGAL, BUSINESS OR TAX ADVICE TO ANY PARTICULAR
BATTLE MOUNTAIN CANADA SHAREHOLDER. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS AS TO THE TAX CONSEQUENCES OF THE TRANSACTIONS IN THEIR PARTICULAR
CIRCUMSTANCES.
In computing a shareholder's liability for tax under the Canadian Tax
Act, (i) any cash amount received by the shareholder in U.S. dollars must be
converted into the product obtained by multiplying the U.S. dollar amount by the
noon spot exchange rate on such date for U.S. dollars expressed in Canadian
dollars as reported by the Bank of Canada and (ii) the amount of any non-cash
consideration received by the shareholder must be expressed in Canadian dollars,
generally determined at the time such consideration is received.
SHAREHOLDERS RESIDENT IN CANADA
The following portion of the summary is applicable to Battle Mountain
Canada shareholders who, for purposes of the Canadian Tax Act, are resident or
deemed to be resident in Canada.
15
REDEMPTION OF EXCHANGEABLE SHARES
On the redemption (including a retraction) of an Exchangeable Share by
Battle Mountain Canada, the holder of an Exchangeable Share will be deemed to
have received a dividend equal to the amount, if any, by which the redemption
proceeds (the fair market value at that time of Battle Mountain Common Stock
received by the shareholder from Battle Mountain Canada on the redemption plus
the amount of any accrued but unpaid dividends on the Exchangeable Share) exceed
the paid-up capital (for purposes of the Canadian Tax Act) at that time of the
Exchangeable Share so redeemed. The amount of any such deemed dividend will be
subject to the tax treatment described below under "--Deemed Dividends on
Exchangeable Shares." On the redemption, the holder of an Exchangeable Share
will also be considered to have disposed of the Exchangeable Share for proceeds
of disposition equal to the redemption proceeds less the amount of such deemed
dividend. A holder will in general realize a capital loss (or a capital gain)
equal to the amount by which the adjusted cost base to the holder of the
Exchangeable Share exceeds (or is less than) such proceeds of disposition. See
"--Taxation of Capital Gain or Capital Loss" below. In the case of a shareholder
that is a corporation, in some circumstances the amount of any such deemed
dividend may be treated as proceeds of disposition and not as a dividend.
DEEMED DIVIDENDS ON EXCHANGEABLE SHARES
In the case of a shareholder who is an individual, dividends deemed to
be received on the Exchangeable Shares will be included in computing the
shareholder's income and will be subject to the gross-up and dividend tax credit
rules normally applicable to taxable dividends received from taxable Canadian
corporations.
Subject to the discussion below as to the denial of the dividend
deduction, in the case of a shareholder that is a corporation, other than a
"specified financial institution" as defined in the Canadian Tax Act, dividends
deemed to be received on the Exchangeable Shares will be included in computing
its income and will normally be deductible in computing its taxable income. A
corporation is a specified financial institution for purposes of the Canadian
Tax Act if it is a bank, a trust company, a credit union, an insurance
corporation or a corporation whose principal business is the lending of money to
persons with whom the corporation is dealing at arm's length or the purchasing
of debt obligations issued by such persons or a combination thereof, and
corporations controlled by or related to such entities.
In the case of a shareholder that is a specified financial institution,
such a deemed dividend will be deductible in computing its taxable income only
if either:
(i) the specified financial institution did not acquire the
Exchangeable Shares in the ordinary course of the business carried on
by such institution; or
(ii) at the time of the receipt of the deemed dividend by the specified
financial institution, the Exchangeable Shares are listed on a
prescribed stock exchange in Canada (which currently includes the TSE)
and the specified financial institution, either alone or together with
persons with whom it does not deal at arm's length, does not receive
(or is not deemed to receive) dividends in respect of more than 10
percent of the issued and outstanding Exchangeable Shares.
A shareholder that is a "private corporation" (as defined in the
Canadian Tax Act) or any other corporation resident in Canada and controlled or
deemed to be controlled by or for the benefit of an individual or a related
group of individuals may be liable under Part IV of the Canadian Tax Act to pay
a refundable tax of 33 1/3 percent on dividends deemed to be received on the
Exchangeable Shares to the extent that such deemed dividends are deductible in
computing the shareholder's taxable income.
16
If Battle Mountain, Battle Mountain Sub or any other person with whom
Battle Mountain does not deal at arm's length is a specified financial
institution at the time of redemption, then, subject to the exemption described
below, dividends received or deemed to be received by a shareholder that is a
corporation will not be deductible in computing taxable income but will be fully
includable in taxable income under Part I of the Canadian Tax Act. A shareholder
that is a "Canadian-controlled private corporation" (as defined in the Canadian
Tax Act) may be liable to pay an additional refundable tax of 6 2/3 percent on
deemed dividends that are not deductible in computing taxable income. As set
forth and qualified in the Combination Agreement, Battle Mountain has
represented that neither it nor any person with whom it does not deal at arm's
length is a specified financial institution. Battle Mountain intends to
endeavour to avoid such status in the future, although there can be no
assurances that this status will not change prior to any deemed receipt of any
dividend by a corporate shareholder.
This denial of the dividend deduction for a corporate shareholder will
not in any event apply if, at the time of redemption, the Exchangeable Shares
are listed on a prescribed stock exchange (which currently includes the TSE),
Battle Mountain controls Battle Mountain Canada, and the recipient (together
with persons with whom the recipient does not deal at arm's length or any
partnership or trust of which the recipient or person is a member or
beneficiary, respectively) does not receive dividends on more than 10 percent of
the issued and outstanding Exchangeable Shares.
The Exchangeable Shares will be "taxable preferred shares" and
"short-term preferred shares" for purposes of the Canadian Tax Act. Accordingly,
Battle Mountain Canada will be subject to a 66 2/3 percent tax under Part VI.1
of the Canadian Tax Act on dividends deemed to be paid on the Exchangeable
Shares and will be entitled to deduct 9/4 of the tax payable in computing its
taxable income under Part I of the Canadian Tax Act.
EXCHANGE OF EXCHANGEABLE SHARES
On the exchange of an Exchangeable Share by the holder thereof with
Battle Mountain or Battle Mountain Sub for Battle Mountain Common Stock, the
holder will in general realize a capital gain (or a capital loss) equal to the
amount by which the proceeds of disposition of the Exchangeable Share, net any
reasonable costs of disposition, exceed (or are less than) the adjusted cost
base to the holder of the Exchangeable Share. For these purposes, the proceeds
of disposition will be the fair market value of Battle Mountain Common Stock at
the time of the exchange plus the amount of any accrued but unpaid dividends on
the Exchangeable Share received by the holder as part of the exchange
consideration. See "--Taxation of Capital Gain or Capital Loss" below.
TAXATION OF CAPITAL GAIN OR CAPITAL LOSS
Three-quarters of any capital gain (the "taxable capital gain")
realized on a retraction, redemption or exchange of Exchangeable Shares or
disposition of Battle Mountain Common Stock will be included in the
shareholder's income for the year of disposition. Three-quarters of any capital
loss so realized (the "allowable capital loss") may be deducted by the holder
against taxable capital gains for the year of disposition. Any excess of
allowable capital losses over taxable capital gains of the shareholder for the
year of disposition may be carried back up to three taxation years or forward
indefinitely and deducted against net taxable capital gains in those other
years.
Capital gains realized by an individual or trust, other than certain
specified trusts, may give rise to alternative minimum tax under the Canadian
Tax Act. A shareholder that is a Canadian-controlled private corporation may be
liable to pay an additional refundable tax of 6 2/3 percent on taxable capital
gains.
If the holder of an Exchangeable Share is a corporation, the amount of
any capital loss arising from a disposition or deemed disposition of an
Exchangeable Share may be reduced by the amount
17
of dividends received or deemed to have been received by it on such share or on
the Hemlo Gold Common Shares previously owned by such holder, to the extent and
under circumstances prescribed by the Canadian Tax Act. Similar rules may apply
where a corporation is a member of a partnership or a beneficiary of a trust
that owns Exchangeable Shares or where a trust or partnership of which a
corporation is a beneficiary or a member is a member of a partnership or a
beneficiary of a trust that owns Exchangeable Shares.
HOLDING AND DISPOSING OF BATTLE MOUNTAIN COMMON STOCK
The cost of Battle Mountain Common Stock received on the retraction,
redemption or exchange of an Exchangeable Share will be equal to the fair market
value of Battle Mountain Common Stock at the time of such event.
Dividends on Battle Mountain Common Stock will be included in the
recipient's income for the purposes of the Canadian Tax Act. Such dividends
received by an individual shareholder will not be subject to the gross-up and
dividend tax credit rules in the Canadian Tax Act. A corporation that is a
shareholder will include such dividends in computing its income and generally
will not be entitled to deduct the amount of such dividends in computing its
taxable income. A shareholder that is a Canadian-controlled private corporation
may be liable to pay an additional refundable tax of 6 2/3 percent on dividends.
United States non-resident withholding tax on such dividends will be eligible
for foreign tax credit or deduction treatment where applicable under the
Canadian Tax Act.
A disposition or deemed disposition of Battle Mountain Common Stock by
a holder will generally result in a capital gain (or capital loss) equal to the
amount by which the proceeds of disposition, net of any reasonable costs of
disposition, exceed (or are less than) the adjusted cost base to the holder of
Battle Mountain Common Stock. See "--Taxation of Capital Gain or Capital Loss"
above.
ELIGIBILITY FOR INVESTMENT
Battle Mountain Common Stock will be foreign property under the
Canadian Tax Act for trusts governed by registered pension plans, registered
retirement savings plans, registered retirement income funds and deferred profit
sharing plans or for certain other tax-exempt persons.
Battle Mountain Common Stock will be a qualified investment under the
Canadian Tax Act for trusts governed by registered retirement savings plans,
registered retirement income funds and deferred profit sharing plans provided
such shares remain listed on the NYSE (or are listed on another prescribed stock
exchange).
FOREIGN PROPERTY INFORMATION REPORTING
A holder of Battle Mountain Common Stock who is a "specified Canadian
entity" (as defined in the Tax Proposals) and whose cost amount for such shares
at any time in a year or fiscal period exceeds Canadian $100,000 will be
required to file an information return in respect of such shares disclosing the
holder's cost amount, any dividends received in the year and any gains or losses
realized in the year in respect of such shares. A specified Canadian entity
means a taxpayer resident in Canada in the year, other than a corporation or a
trust exempt from tax under Part I of the Canadian Tax Act, a non-resident-owned
investment corporation, a mutual fund corporation, a mutual fund trust and
certain other trusts and partnerships.
SHAREHOLDERS NOT RESIDENT IN CANADA
The following portion of the summary is applicable to holders of
Exchangeable Shares who, for purposes of the Canadian Tax Act, have not been and
will not be resident or deemed to be resident
18
in Canada at any time while they have held Hemlo Gold Common Shares or hold
Exchangeable Shares or Battle Mountain Common Stock and to whom such shares are
not "taxable Canadian property" (as defined in the Canadian Tax Act) and who do
not use or hold and are not deemed to use or hold such shares in connection with
carrying on a business in Canada.
Generally, such shares will not be taxable Canadian property provided
that such shares are listed on a prescribed stock exchange (which currently
include the TSE and the NYSE), the holder does not use or hold, and is not
deemed to use or hold, such shares, in connection with carrying on a business in
Canada and the holder, alone or together with persons with whom such holder does
not deal at arm's length, has not owned (or had under option) 25 percent or more
of the issued shares of any class or series of the capital stock of Battle
Mountain Canada or Battle Mountain at any time within five years preceding the
date of disposition. The Exchangeable Shares have been accepted for listing on
the TSE, subject to the satisfaction of the requirements of the TSE, and Battle
Mountain has indicated that it intends to use its best efforts to cause Battle
Mountain Canada to maintain such listing. Battle Mountain has indicated that it
will maintain the listing of Battle Mountain Common Stock on the NYSE or another
prescribed stock exchange.
A holder of Exchangeable Shares will not be subject to tax under the
Canadian Tax Act on the exchange of an Exchangeable Share for Battle Mountain
Common Stock (except to the extent the exchange results in a redemption of an
Exchangeable Share) or on the sale or other disposition of Battle Mountain
Common Stock. A holder whose Exchangeable Shares are redeemed (either under
Battle Mountain Canada's redemption right or pursuant to the holder's retraction
rights) will be deemed to receive a dividend as described above for shareholders
resident in Canada under "--Redemption of Exchangeable Shares." The amount of
such deemed dividend will be subject to non-resident withholding tax under the
Canadian Tax Act at the rate of 25 percent, although such rate may be reduced
under the provisions of an applicable income tax treaty. Under the Tax Treaty,
the rate is generally reduced to 15 percent in respect of dividends paid to a
person who is the beneficial owner and who is resident in the United States for
purposes of the Tax Treaty.
UNITED STATES FEDERAL TAX CONSIDERATIONS
The following summary of the principal United States federal income tax
considerations generally applicable to a United States Holder (as defined below)
of Exchangeable Shares arising from and relating to the receipt and ownership of
Battle Mountain Common Stock, represents the opinion of Fried, Frank, Harris,
Shriver & Jacobson (a partnership including professional corporations), who
acted as United States counsel to Hemlo Gold in connection with the Arrangement,
insofar as it relates to matters of United States federal income tax law and
legal conclusions with respect thereto.
As used herein, a United States Holder includes a holder of
Exchangeable Shares who is a citizen or individual resident of the United
States, a corporation or partnership created or organized in or under the laws
of the United States, or of any political subdivision thereof, or an estate or
trust the income of which is includible in its gross income for United States
federal income tax purposes without regard to its source, but excludes persons
subject to special provisions of United States federal income tax law, such as
tax-exempt organizations, financial institutions, insurance companies,
broker-dealers, persons having a "functional currency" other than the United
States dollar, holders who hold Exchangeable Shares as part of a straddle, wash
sale, hedging or conversion transaction (other than by virtue of their
participation in an exchange of Exchangeable Shares for Battle Mountain Common
Stock as contemplated herein) and holders who acquired their Exchangeable Shares
through the exercise of employee stock options or otherwise as compensation for
services. This summary is limited to United States Holders who hold Exchangeable
Shares as capital assets.
19
This summary is based on United States federal income tax law in effect
as of the date of this Prospectus. No statutory, judicial or administrative
authority exists which directly addresses certain of the United States federal
income tax consequences of the ownership of instruments comparable to the
Exchangeable Shares. Consequently, some aspects of the United States federal
income tax treatment of the exchange of Exchangeable Shares for shares of Battle
Mountain Common Stock are not certain. No advance income tax ruling has been
sought or obtained from the United States Internal Revenue Service (the "IRS")
regarding the tax consequences of the transactions described herein.
This summary does not address aspects of United States taxation other
than United States federal income taxation under the United States Internal
Revenue Code of 1986, as amended (the "U.S. Code"), nor does it address all
aspects of United States federal income taxation that may be applicable to a
particular United States Holder in light of the United States Holder's
particular circumstances. In addition, this summary does not address the United
States state or local tax consequences or the foreign tax consequences of the
receipt and ownership of Battle Mountain Common Stock.
UNITED STATES HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE UNITED STATES FEDERAL, STATE AND LOCAL TAX CONSEQUENCES AND THE
FOREIGN TAX CONSEQUENCES OF THE RECEIPT AND OWNERSHIP OF BATTLE MOUNTAIN COMMON
STOCK.
EXCHANGE OF EXCHANGEABLE SHARES. A United States Holder that exercises
such holder's right to exchange its Exchangeable Shares for shares of Battle
Mountain Common Stock will generally, subject to the discussion below, recognize
gain or loss on such exchange. Such gain or loss will be equal to the difference
between the fair market value of the shares of Battle Mountain Common Stock at
the time of the exchange and the United States Holder's tax basis in the
Exchangeable Shares surrendered. The gain or loss will generally be capital gain
or loss, except that, with respect to any declared but unpaid dividends on the
Exchangeable Shares, ordinary income may be recognized. Capital gain or loss
will generally be long-term capital gain or loss if a United States Holder's
holding period for its Exchangeable Shares is longer than one year at the time
of the exchange. A United States Holder will generally, subject to the
discussion below, have a tax basis in the shares of Battle Mountain Common Stock
received equal to the fair market value of such shares at the time of the
exchange. The holding period for such shares will generally, subject to the
discussion below, begin on the day after the exchange. The IRS could assert,
however, that the Exchangeable Shares and certain of the rights associated
therewith constitute "offsetting positions" for purposes of the straddle rules
set forth in Section 1092 of the U.S. Code. In such case, the holding period of
the Exchangeable Shares would not increase while held by a United States Holder.
It is possible, however, that a United States Holder who holds
Exchangeable Shares not acquired in the Arrangement would not be permitted to
recognize loss on an exchange of such Exchangeable Shares for Battle Mountain
Common Stock. In that case, a United States Holder will have a tax basis in the
shares of Battle Mountain Common Stock received equal to the tax basis of the
Exchangeable Shares exchanged therefor and the United States Holder's holding
period for the Battle Mountain Common Stock received will include the United
States Holder's holding period in the Exchangeable Shares exchanged therefor.
Further, under certain limited circumstances, an exchange by a United States
Holder of Exchangeable Shares for shares of Battle Mountain Common Stock may, in
any event, be characterized as a tax-free exchange. Whether an exchange would be
tax-free will depend upon the facts and circumstances existing at the time of
the exchange and cannot be accurately predicted at the date of this Prospectus.
For United States federal income tax purposes, gain realized on the
exchange of Exchangeable Shares for shares of Battle Mountain Common Stock
generally will be treated as United States source gain, except that, under the
terms of the Tax Treaty, such gain may be treated as sourced in
20
Canada. Any Canadian tax imposed on the exchange may be available as a credit
against United States federal income taxes, subject to applicable limitations. A
United States Holder that is ineligible for a foreign tax credit with respect to
any Canadian tax paid may be entitled to a deduction therefor in computing
United States taxable income.
PASSIVE FOREIGN INVESTMENT COMPANY CONSIDERATIONS. For United States
federal income tax purposes, Battle Mountain Canada generally will be classified
as a passive foreign investment company (a "PFIC") for any taxable year ending
prior to consummation of the Arrangement during which either (i) 75 percent or
more of its gross income was passive income (as defined for United States
federal income tax purposes) or (ii) on average for such taxable year, 50
percent or more of its assets (by value) produced or were held for the
production of passive income. For purposes of applying the foregoing tests, the
assets and gross income of Battle Mountain Canada's significant subsidiaries
will be attributed to Battle Mountain Canada.
While there can be no assurance with respect to the classification of
Battle Mountain Canada as a PFIC, Battle Mountain Canada believes that it did
not constitute a PFIC during its taxable years ending prior to consummation of
the Arrangement. Currently, Battle Mountain Canada and Battle Mountain intend to
endeavor to cause Battle Mountain Canada to avoid PFIC status in the future,
although there can be no assurance that they will be able to do so or that their
intent will not change. Moreover, in connection with the transactions
contemplated herein, no opinion will be rendered regarding Battle Mountain
Canada's status as a PFIC.
For purposes of applying the 50 percent asset test following the
Arrangement, Battle Mountain Canada's assets must be measured by their adjusted
tax bases (as calculated in order to compute earnings and profits for United
States federal income tax purposes) instead of by value, subject to certain
adjustments. As a result, it is possible that Battle Mountain Canada could be a
PFIC for taxable years ending after the Arrangement even though less than 50
percent of Battle Mountain Canada's assets (measured by the fair market value of
such assets) do not constitute passive assets. After the Arrangement, Battle
Mountain Canada will endeavor to notify United States Holders of Exchangeable
Shares if it believes that Battle Mountain Canada was a PFIC for that taxable
year.
If Battle Mountain Canada is a PFIC during a United States Holder's
holding period for such holder's Exchangeable Shares, and the United States
Holder has not made an election to treat Hemlo Gold as a qualified electing fund
(a "QEF Election") with respect to all taxable years included in the United
States Holder's holding period in which Battle Mountain Canada was a PFIC, then
(i) the United States Holder would be required to allocate gain recognized upon
the exchange of Exchangeable Shares for shares of Battle Mountain Common Stock
ratably over the United States Holder's holding period for such Exchangeable
Shares, (ii) the amount allocated to each year other than (x) the year of the
disposition of the Exchangeable Shares or (y) any year prior to the beginning of
the first taxable year of Battle Mountain Canada for which it was a PFIC, would
be subject to tax at the highest rate applicable to individuals or corporations,
as the case may be, for the taxable year to which such income is allocated, and
an interest charge would be imposed upon the resulting tax attributable to each
such year, and (iii) gain recognized upon the disposition of the Exchangeable
Shares would be taxable as ordinary income.
If a United States Holder has made a QEF Election with respect to all
taxable years included in the United States Holder's holding period in which
Battle Mountain Canada was a PFIC, the United States Holder would recognize gain
or loss on the disposition of Exchangeable Shares without regard to the PFIC
rules. United States Holders should consult their tax advisors concerning the
merits and mechanics of making a QEF Election and other relevant considerations
if Battle Mountain Canada is a PFIC for any taxable year.
The foregoing summary of the possible application of the PFIC rules to
Battle Mountain Canada and the United States Holders of Exchangeable Shares is
only a summary of certain material aspects
21
of those rules. Because the United States federal income tax consequences to
United States Holders under the PFIC provisions are significant and complex,
United States Holders are urged to discuss those consequences with their tax
advisors.
SHAREHOLDERS NOT RESIDENT IN OR CITIZENS OF THE UNITED STATES. The
following summary is applicable to a non-United States Holder who acquires
Battle Mountain Common Stock in exchange for Exchangeable Shares. As used
herein, a non-United States Holder is a holder of Exchangeable Shares or of
Battle Mountain Common Stock acquired in exchange for Exchangeable Shares who,
for United States federal income tax purposes, is a non-resident alien
individual, a foreign corporation, a foreign partnership or a foreign estate or
trust, but excludes persons subject to special provisions of United States
federal income tax law, such as tax-exempt organizations, financial
institutions, insurance companies, broker-dealers, holders who hold Exchangeable
Shares as part of a straddle, wash sale, hedging or conversion transaction
(other than by virtue of their participation in an exchange of Exchangeable
Shares for Battle Mountain Common Stock as contemplated herein) and holders who
acquired their Exchangeable Shares through the exercise of employee stock
options or otherwise as compensation for services. A non-United States Holder
seeking benefits under an applicable tax treaty or an exemption from United
States withholding tax for "effectively connected" income, as described below,
may be required to comply with additional certification and other requirements
in order to establish the holder's entitlement to such benefits or exemption.
This summary is limited to non-United States Holders who hold Exchangeable
Shares as capital assets and who will hold Battle Mountain Common Stock as a
capital asset. Moreover, insofar as concerns ownership by a non-United States
Holder of Exchangeable Shares, this discussion is limited to the exchange by
such holder of Exchangeable Shares for Battle Mountain Common Stock and does not
otherwise address U.S. federal tax consequences of the ownership and disposition
of Exchangeable Shares.
An individual may, subject to certain exceptions, be deemed to be a
resident alien (as opposed to a non-resident alien) by virtue of being present
in the United States for at least 31 days in the calendar year and for an
aggregate of at least 183 days during a three-year period ending in the current
calendar year (counting for such purposes all of the days present in the current
year, one-third of the days present in the immediately preceding year, and
one-sixth of the days present in the second preceding year). Resident aliens are
subject to tax as if they were U.S. citizens.
This discussion does not consider specific facts and circumstances that
may be relevant to a particular non-United States Holder's tax position,
including whether such non-United States Holder is a United States expatriate.
Dividends received by a Non-United States Holder with respect to Battle
Mountain Common Stock that are not effectively connected with the conduct by
such holder of a trade or business in the United States will generally be
subject to United States withholding tax at a rate of 30 percent, which rate may
be reduced by an applicable income tax treaty in effect between the United
States and the non-United States Holder's country of residence (currently 15
percent, generally, on dividends paid to residents of Canada under the Tax
Treaty).
Subject to the discussion below, a non-United States Holder generally
will not be subject to United States federal income tax on gain (if any)
recognized on the exchange of the Exchangeable Shares for Battle Mountain Common
Stock or on the sale or exchange of shares of Battle Mountain Common Stock,
unless (i) such gain is effectively connected with a trade or business of the
non-United States Holder in the United States, or, if a tax treaty applies, is
attributable to a permanent establishment maintained by the non-United States
Holder in the United States, or (ii) the non-United States Holder is an
individual who holds the Exchangeable Shares or the Battle Mountain Common
Stock, as the case may be, as capital assets and is present in the United States
for 183 days or more in the taxable year of disposition, and certain other
conditions are satisfied.
22
Notwithstanding the general rule set forth in the preceding paragraph,
under the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"), gain
or loss recognized by a non-United States Holder on the exchange of Exchangeable
Shares for Battle Mountain Common Stock or on the sale or exchange of shares of
Battle Mountain Common Stock will be subject to regular United States federal
income tax, as if such gain or loss were effectively connected with a U.S. trade
or business, if (a) Battle Mountain is a "U.S. real property holding
corporation" ("USRPHC") (as defined below) and (b) such non-United States Holder
is a "greater than 5 percent shareholder" (as defined below) of Battle Mountain
Canada or Battle Mountain, as the case may be.
Battle Mountain will be a USRPHC with respect to any greater than 5
percent shareholder if at any time during the shorter of (x) the five-year
period ending on the date of the sale or exchange of Exchangeable Shares for
Battle Mountain Common Stock or the sale or exchange of Battle Mountain Common
Stock (as the case may be) or (y) the period during which such greater than 5
percent shareholder held such Exchangeable Shares or Battle Mountain Common
Stock (as the case may be) (such period the "FIRPTA holding period"), the fair
market value of Battle Mountain's interests in United States real property
equaled or exceeded 50 percent of the sum of the fair market values of all of
its interests in real property and all of its other assets used or held for use
in a trade or business (as defined in applicable regulations). Battle Mountain
has represented in the Combination Agreement that it is not presently a USRPHC.
Moreover, Battle Mountain considers it unlikely that Battle Mountain will become
a USRPHC in the future unless its interests in United States real property
increase significantly as a result of one or more acquisitions, but there can be
no assurance that Battle Mountain will not in any event become a USRPHC in the
future.
The definition of a "greater than 5 percent shareholder" is complex and
subject to some uncertainty. In the case of a non-United States Holder who owns
only Battle Mountain Common Stock (actually and constructively), such non-United
States Holder will be a greater than 5 percent shareholder if such non-United
States Holder holds more than 5 percent of the total fair market value of the
Battle Mountain Common Stock outstanding (on a non-diluted basis). In the case
of a non-United States Holder who owns only Exchangeable Shares (actually and
constructively, other than Battle Mountain Common Stock constructively owned by
reason of ownership of Exchangeable Shares), such non-United States Holder will
be a greater than 5 percent shareholder if either (a) such non-United States
Holder holds more than 5 percent of the total fair market value of the
Exchangeable Shares outstanding and the Exchangeable Shares are treated as
"regularly traded on an established securities market" or (b) such non-United
States Holder holds Exchangeable Shares with a fair market value on the relevant
date of determination greater than 5 percent of the total fair market value of
the Battle Mountain Common Stock outstanding (on a non-diluted basis) on such
date and the Exchangeable Shares are not treated as "regularly traded on an
established securities market." The Exchangeable Shares will be traded on the
TSE which should be considered an "established securities market" for this
purpose. The Exchangeable Shares will be treated as regularly traded on that
market if they are registered by Battle Mountain under Section 12 of the
Exchange Act or Battle Mountain makes certain filings with the IRS, and certain
other conditions are met. Battle Mountain intends to register the Exchangeable
Shares under Section 12 of the Exchange Act. Notwithstanding the foregoing, the
Exchangeable Shares will not be considered regularly traded on the TSE during
any calendar quarter in which 100 or fewer persons own 50 percent or more of the
Exchangeable Shares. If a non-United States Holder which is a greater than 5
percent shareholder during a period in which Battle Mountain is a USRPHC
subsequently disposes of sufficient Exchangeable Shares or Battle Mountain
Common Stock so that such non-United States Holder is no longer a greater than 5
percent shareholder, such non-United States Holder will still be subject to
United States federal income tax on subsequent dispositions until Battle
Mountain has ceased to be a USRPHC for at least five years. If at any time,
Battle Mountain Common Stock were not regularly traded on an established
securities market, or the Exchangeable Shares were traded on an established
securities market located in the United States, different rules, not described
herein,
23
may apply. Non-United States Holders who believe they may be greater than 5
percent shareholders are particularly urged to consult their own tax advisors to
determine the possible application of FIRPTA to them.
A non-United States Holder that is a greater than 5 percent shareholder
may be subject to withholding on the exchange of Exchangeable Shares for Battle
Mountain Common Stock if, at the time of the exchange, the Exchangeable Shares
are not treated as regularly traded on an established securities market. Upon
the exchange of Exchangeable Shares for Battle Mountain Common Stock, the
transferee of the Exchangeable Shares would be required to withhold ten percent
of the amount realized in the exchange unless, in general, the non-United States
Holder obtains from Battle Mountain and provides to the transferee a statement
signed under penalties of perjury to the effect that Battle Mountain is not a
USRPHC and was not a USRPHC at any time during the FIRPTA holding period
(described above). Any tax withheld may be credited against the United States
federal income tax owed by the non-United States Holder for the year in which
the exchange occurs.
The foregoing summary of the possible application of the FIRPTA rules
to non-United States Holders is only a summary of certain material aspects of
these rules. Because the United States federal income tax consequences to a
non-United States Holder under FIRPTA may be significant and are complex,
non-United States Holders are urged to discuss those consequences with their tax
advisors.
Battle Mountain Common Stock (or a previously triggered obligation of
Battle Mountain or Battle Mountain Sub to deliver Battle Mountain Common Stock
along with unpaid dividends) will be deemed to be a United States situs asset
for purposes of United States federal estate tax law and, therefore, Battle
Mountain Common Stock (or a previously triggered obligation of Battle Mountain
or Battle Mountain Sub to deliver Battle Mountain Common Stock along with unpaid
dividends) held by an individual non-United States Holder at the time of his or
her death will generally be subject to the United States federal estate tax,
except as may otherwise be provided by an applicable tax or estate tax treaty
with the United States.
The Tax Treaty provides that the United States federal estate tax paid
by a resident of Canada will generally be allowed as a deduction from the amount
of any Canadian tax otherwise payable by the individual for the year in which
the individual died on the total of (a) any income, profits or gains of the
individual arising in the United States in that year and (b) where the value at
the time of the individual's death of the individual's entire gross estate,
wherever situated, exceeds $1.2 million, any income, profits or gains of the
individual for that year from property situated in the United States at that
time. This summary does not purport to be a complete description of all of the
provisions of the Tax Treaty that may affect the taxation of Canadian residents.
Non-United States Holders should consult their tax advisors as the tax
consequences to them of the Tax Treaty or another applicable tax or estate tax
treaty with the United States.
LEGAL OPINIONS
Certain legal matters in connection with the Common Stock offered
hereby are being passed upon for Battle Mountain by Baker & Botts, L.L.P.,
Houston, Texas. Baker & Botts, L.L.P. will rely as to matters of Nevada law on
Marshall Hill Cassas & de Lipkau, Reno, Nevada. Certain federal U.S. and
Canadian tax consequences have been passed upon by Fried, Frank, Harris, Shriver
& Jacobson, New York, New York (a partnership including professional
corporations) and McCarthy Tetrault, Toronto, Ontario, respectively, as set
forth under "Income Tax Considerations."
24
EXPERTS
The consolidated financial statements of Battle Mountain, incorporated
by reference herein as of December 31, 1995, and for the year ended December 31,
1995 have been audited by Price Waterhouse LLP, independent accountants, as set
forth in their report thereon incorporated by reference herein. Such
consolidated financial statements referred to above are incorporated herein by
reference in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
The consolidated financial statements and financial statement schedule
of Battle Mountain as of December 31, 1994, and for each of the two years in the
period ended December 31, 1994, incorporated by reference in this Prospectus,
have been audited by Arthur Andersen LLP, independant public accountants, as set
forth in their report. In that report, that firm states that with respect to
certain subsidiaries of Battle Mountain, its opinion is based on the reports of
other independent public accountants, namely Coopers & Lybrand.The consolidated
financial statements and financial statement schedule referred to above have
been incorporated herein in reliance upon the authority of those firms as
experts in giving said reports.
The consolidated financial statements of Hemlo Gold, incorporated by
reference herein as of December 31, 1994 and 1995, and for each of the three
years in the period ended December 31, 1995, have been audited by Ernst & Young,
Chartered Accountants, as set forth in their report thereon incorporated by
reference herein, and are incorporated by reference herein in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by Battle Mountain in connection with
this offering are as follows:
Securities and Exchange Commission registration fee .............. $45,643
Printing expenses ................................................ 3,500
Accounting fees and expenses ..................................... *
Legal fees and expenses .......................................... *
Miscellaneous .................................................... _____*
Total ............................................................ *
======
* To be furnished by amendment
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VII of the Battle Mountain Bylaws provides for the
indemnification of officers and directors of Battle Mountain to the extent
authorized by the NGCL. Pursuant to Section 78.751 of the NGCL, Battle Mountain
generally has the power to indemnify its present and former directors, officers,
employees and agents against expenses, judgments and amounts paid in settlements
incurred by them in connection with any suit to which they are, or are
threatened to be made, a party by reason of their serving in such positions so
long as they acted in good faith and in a manner they reasonably believed to be
in or not opposed to the best interests of Battle Mountain and, with respect to
any criminal action, they had no reasonable cause to believe their conduct was
unlawful. With respect to suits by or in the right of a corporation, however,
indemnification is not available if such person is finally adjudged to be liable
to Battle Mountain or for amounts paid in settlement, unless and only to the
extent the court determines that indemnification is appropriate. The statute
also expressly provides that the power to indemnify authorized thereby is not
exclusive of any rights granted under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise.
Section 78.751 of the NGCL also enables a corporation to purchase and
maintain insurance for its present and former directors, officers, employees and
agents. Accordingly, Battle Mountain has provided liability insurance for each
director and officer for certain losses arising from claims or charges made
against him while acting in his capacity as a director or officer of Battle
Mountain, including liabilities under federal securities laws.
The above discussion of Battle Mountain's Bylaws and of Section 78.751
of the NGCL is not intended to be exhaustive and is respectively qualified in
its entirety by such Bylaws and statute.
Additionally, Article Tenth of Battle Mountain Articles limits the
liability of Battle Mountain's directors and officers under certain
circumstances. Article Tenth states:
No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for damages for
breach of fiduciary duty as a director or officer involving any act or
omission of any such director or officer occurring on or after April
28, 1987; provided, however, that the foregoing provision shall not
eliminate or limit the liability of a director or officer (i) for acts
or omissions which involve intentional misconduct, fraud or a knowing
violation of law, or (ii) the payment of dividends in violation of
Section 78.300 of the NGCL.
II-1
Any repeal or modification of this Article by the stockholders of the
Corporation shall be prospective only, and shall not adversely affect
any limitation on the personal liability of a director or officer of
the Corporation for acts or omission prior to such repeal or
modification.
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated herein by
reference:
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
*4(a)(1) Form of Restated Articles of Incorporation as amended and
restated through May 11, 1988 (Exhibit 4(a) to Battle Mountain's
Registration Statement on Form S-3 dated January 16, 1994;
Registration No. 33-51921).
*4(a)(2) Form of Amendment to Restated Articles of Incorporation of Battle
Mountain (Annex F to the Joint Management Information Circular
and Proxy Statement filed as Exhibit 20(a) to Battle Mountain's
Current Report on Form 8-K dated June 11, 1996).
*4(b) Certificate of Resolution Establishing Designation, Preferences
and Rights of $3.25 Convertible Preferred Stock (Exhibit 4(b) to
Battle Mountain's Registration Statement on Form S-3 dated
January 16, 1994; Registration No. 33-51921).
*4(c) Bylaws of Battle Mountain, as amended through March 1, 1994
(Exhibit 3(c) to Battle Mountain's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995; File No. 1-9666).
*4(d)(1) Rights Agreement, dated November 10, 1988, between Battle
Mountain and NCNB Texas National Bank, as Rights Agent (Exhibit
to Battle Mountain's Form 8 filed with the Commission on November
30, 1988 amending Battle Mountain's Report on Form 8-K dated
November 21, 1988; File No. 1-9666).
*4(d)(2) First Amendment to Rights Agreement, dated July 30, 1992, between
Battle Mountain and The Bank of New York , as successor Rights
Agent (Exhibit 4(a)(2) to Battle Mountain's Annual Report on Form
10-K for the year ended December 31, 1992; File No. 1-9666).
*4(e) Specimen Stock Certificate for the Common Stock of Battle
Mountain (Exhibit 4(b) to Battle Mountain's Annual Report on Form
10-K for the year ended December 31, 1988; File No. 1-9666).
+5 Opinion of Baker & Botts, L.L.P. regarding the legality of the
securities being issued (including relied upon opinion of
Marshall Hill Cassas & de Lipkau).
+8(a) Opinion of McCarthy Tetrault regarding tax matters.
+8(b) Opinion of Fried, Frank, Harris, Shriver & Jacobson regarding tax
matters.
23(a) Consent of Price Waterhouse LLP, independent accountants.
23(b) Consent of Arthur Andersen LLP, independent public accountants.
II-2
23(c) Consent of Coopers & Lybrand, independent auditors.
23(d) Consent of Ernst & Young, Chartered Accountants.
23(e) Consent of Baker & Botts, L.L.P. (included in Exhibit 5).
23(f) Consent of McCarthy Tetrault (included in Exhibit 8(a)).
23(g) Consent of Fried, Frank, Harris, Shriver & Jacobson (included in
Exhibit 8(b)).
24 Power of Attorney.
*99(a) Form of Plan of Arrangement of Hemlo Gold Mines Inc. (Annex D to
the Joint Management Information Circular and Proxy Statement
filed as Exhibit 20(a) to Battle Mountain's Current Report on
Form 8-K dated June 11, 1996).
*99(b) Form of Voting, Support and Exchange Trust Agreement among Battle
Mountain, Hemlo Gold Mines Inc. and The R-M Trust Company, as
trustee (Annex E to the Joint Management Information Circular and
Proxy Statement filed as Exhibit 20(a) to Battle Mountain's
Current Report on Form 8-K dated June 11, 1996).
- --------------------
*Incorporated by reference as indicated.
+To be furnished by amendment.
ITEM 17. UNDERTAKINGS
Battle Mountain hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of Battle Mountain's annual
report pursuant to section 13(a) or section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Battle Mountain hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration Statement;
II-3
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (i) and (ii) above do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by Battle
Mountain pursuant to section 13 or section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of Battle
Mountain pursuant to the provisions described under Item 15 above, or otherwise,
Battle Mountain has been advised that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Battle Mountain of expenses
incurred or paid by a director, officer or controlling person of Battle Mountain
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Battle Mountain will, unless, in the opinion of its counsel, the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-4
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BATTLE
MOUNTAIN CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF HOUSTON, THE STATE OF TEXAS, ON JUNE 18, 1996.
BATTLE MOUNTAIN GOLD COMPANY
By: /s/ KARL E. ELERS
(Karl E. Elers,
Chairman of the Board and
Chief Executive Officer)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ KARL E. ELERS Chairman of the Board, Chief June 18, 1996
Karl E. Elers Executive Officer and Director
(Principal Executive Officer)
/s/ R. DENNIS O'CONNELL Vice President--Finance and Chief June 18, 1996
R. Dennis O'Connell Financial Officer
(Principal Financial and Accounting
Officer)
DOUGLAS J. BOURNE* Directors
DELO H. CASPARY*
CHARLES E. CHILDERS*
JACK R. CROSBY*
RODNEY L. GRAY*
TED H. PATE*
KENNETH R. WERNEBURG*
WILLIAM A. WISE*
*By: /S/ KARL E. ELERS June 18, 1996
(Karl E. Elers, Attorney-in-Fact)
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Prospectus
constituting part of the Registration Statement on Form S-3 of Battle Mountain
Gold Company of our report dated February 23, 1996 appearing on page 52 of
Battle Mountain Gold Company's Annual Report on Form 10-K for the year ending
December 31, 1995. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
Houston, Texas
June 18, 1996
Exhibit 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated February 17, 1995,
included in Battle Mountain Gold Company's Form 10-K, for the year ended
December 31, 1995 and to all references to our Firm included in this
Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Houston, Texas
June 18, 1996
Exhibit 23(c)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Battle Mountain Gold Company on Form S-3 of our report dated January 31, 1995 on
our audits of the consolidated financial statements of Nuigini Mining Limited as
of December 31, 1994, and for the two years in the period ended December 31,
1994, which report is included in Form 10-K for the year ended December 31,
1995. We also consent to the reference to our firm under the heading "Experts".
/s/ COOPERS & LYBRAND
Coopers & Lybrand
Sydney, Australia
June 18, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 of Battle Mountain Gold Company and to the
incorporation by reference therein of our report dated February 8, 1996 (except
for Note 17, which is as of April 12, 1996) with respect to the consolidated
financial statements of Hemlo Gold Mines Inc. through the incorporation by
reference of Battle Mountain Gold Company's Form 8-K dated June 11, 1996.
Toronto, Canada /s/ ERNST & YOUNG
June 19, 1996 Ernst & Young
Exhibit 24
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 1933, as amended (the "Act"), a
Registration Statement of Form S-3, including a Prospectus, with any amendment
or amendments and any supplement or supplements 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 Registration Statement in connection with a delayed or
continuous offering of 26,887,693 shares of the Company's common stock, par
value $0.10 per share, and associated preferred stock purchase rights;
NOW, THEREFORE, the undersigned, in his capacity as a director 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 Registration Statement
and any and all amendments thereto (including, without limitation,
post-effective amendments and any additional registration statements filed
pursuant to Rule 462 under the Act increasing the amount of securities for which
registration is being sought) 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
20th day of May,1996.
/s/ DOUGLAS J. BOURNE
Douglas J. Bourne
<PAGE>
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 1933, as amended (the "Act"), a
Registration Statement of Form S-3, including a Prospectus, with any amendment
or amendments and any supplement or supplements 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 Registration Statement in connection with a delayed or
continuous offering of 26,887,693 shares of the Company's common stock, par
value $0.10 per share, and associated preferred stock purchase rights;
NOW, THEREFORE, the undersigned, in his capacity as a director 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 Registration Statement
and any and all amendments thereto (including, without limitation,
post-effective amendments and any additional registration statements filed
pursuant to Rule 462 under the Act increasing the amount of securities for which
registration is being sought) 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
22 day of May,1996.
/s/ DELO H. CASPARY
Delo H. Caspary
<PAGE>
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 1933, as amended (the "Act"), a
Registration Statement of Form S-3, including a Prospectus, with any amendment
or amendments and any supplement or supplements 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 Registration Statement in connection with a delayed or
continuous offering of 26,887,693 shares of the Company's common stock, par
value $0.10 per share, and associated preferred stock purchase rights;
NOW, THEREFORE, the undersigned, in his capacity as a director 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 Registration Statement
and any and all amendments thereto (including, without limitation,
post-effective amendments and any additional registration statements filed
pursuant to Rule 462 under the Act increasing the amount of securities for which
registration is being sought) 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
20th day of May,1996.
/s/ CHARLES E. CHILDERS
Charles E. Childers
<PAGE>
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 1933, as amended (the "Act"), a
Registration Statement of Form S-3, including a Prospectus, with any amendment
or amendments and any supplement or supplements 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 Registration Statement in connection with a delayed or
continuous offering of 26,887,693 shares of the Company's common stock, par
value $0.10 per share, and associated preferred stock purchase rights;
NOW, THEREFORE, the undersigned, in his capacity as a director 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 Registration Statement
and any and all amendments thereto (including, without limitation,
post-effective amendments and any additional registration statements filed
pursuant to Rule 462 under the Act increasing the amount of securities for which
registration is being sought) 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
20th day of May,1996.
/s/ JACK R. CROSBY
Jack R. Crosby
<PAGE>
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 1933, as amended (the "Act"), a
Registration Statement of Form S-3, including a Prospectus, with any amendment
or amendments and any supplement or supplements 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 Registration Statement in connection with a delayed or
continuous offering of 26,887,693 shares of the Company's common stock, par
value $0.10 per share, and associated preferred stock purchase rights;
NOW, THEREFORE, the undersigned, in his capacity as a director or officer
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 Registration Statement and
any and all amendments thereto (including, without limitation, post-effective
amendments and any additional registration statements filed pursuant to Rule 462
under the Act increasing the amount of securities for which registration is
being sought) 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
21 day of May,1996.
/s/ KARL E. ELERS
Karl E. Elers
<PAGE>
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 1933, as amended (the "Act"), a
Registration Statement of Form S-3, including a Prospectus, with any amendment
or amendments and any supplement or supplements 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 Registration Statement in connection with a delayed or
continuous offering of 26,887,693 shares of the Company's common stock, par
value $0.10 per share, and associated preferred stock purchase rights;
NOW, THEREFORE, the undersigned, in his capacity as a director 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 Registration Statement
and any and all amendments thereto (including, without limitation,
post-effective amendments and any additional registration statements filed
pursuant to Rule 462 under the Act increasing the amount of securities for which
registration is being sought) 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
20th day of May,1996.
/s/ RODNEY L. GRAY
Rodney L. Gray
<PAGE>
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 1933, as amended (the "Act"), a
Registration Statement of Form S-3, including a Prospectus, with any amendment
or amendments and any supplement or supplements 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 Registration Statement in connection with a delayed or
continuous offering of 26,887,693 shares of the Company's common stock, par
value $0.10 per share, and associated preferred stock purchase rights;
NOW, THEREFORE, the undersigned, in his capacity as a director 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 Registration Statement
and any and all amendments thereto (including, without limitation,
post-effective amendments and any additional registration statements filed
pursuant to Rule 462 under the Act increasing the amount of securities for which
registration is being sought) 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
20thay of May,1996.
/s/ TED H. PATE
Ted H. Pate
<PAGE>
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 1933, as amended (the "Act"), a
Registration Statement of Form S-3, including a Prospectus, with any amendment
or amendments and any supplement or supplements 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 Registration Statement in connection with a delayed or
continuous offering of 26,887,693 shares of the Company's common stock, par
value $0.10 per share, and associated preferred stock purchase rights;
NOW, THEREFORE, the undersigned, in his capacity as a director or officer
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 Registration Statement and any and all
amendments thereto (including, without limitation, post-effective amendments and
any additional registration statements filed pursuant to Rule 462 under the Act
increasing the amount of securities for which registration is being sought) 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
23 day of May,1996.
/s/ KENNETH R. WERNEBURG
Kenneth R. Werneburg
<PAGE>
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 1933, as amended (the "Act"), a
Registration Statement of Form S-3, including a Prospectus, with any amendment
or amendments and any supplement or supplements 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 Registration Statement in connection with a delayed or
continuous offering of 26,887,693 shares of the Company's common stock, par
value $0.10 per share, and associated preferred stock purchase rights;
NOW, THEREFORE, the undersigned, in his capacity as a director 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 Registration Statement
and any and all amendments thereto (including, without limitation,
post-effective amendments and any additional registration statements filed
pursuant to Rule 462 under the Act increasing the amount of securities for which
registration is being sought) 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
24 day of May,1996.
/s/ WILLIAM A. WISE
William A. Wise
<PAGE>
