<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO ___________
COMMISSION FILE NUMBER 1-9666
BATTLE MOUNTAIN GOLD COMPANY
(EXACT NAME OF THE REGISTRANT AS SPECIFIED IN ITS CHARTER)
Nevada 76-0151431
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 Clay Street, 42nd Floor, Houston, Texas 77002
(Address of principal executive offices including Zip Code)
(713) 650-6400
(Registrant's telephone number, including area code)
NONE
(former name, former address and former fiscal year if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Number of shares of common stock outstanding as of the latest
practicable date, May 9, 1996: 81,330,314
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<PAGE> 2
BATTLE MOUNTAIN GOLD COMPANY
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information
Condensed Consolidated Balance Sheet at
March 31, 1996, and December 31, 1995 1
Condensed Consolidated Statement of Income
for the three months ended March 31, 1996 and 1995 2
Condensed Consolidated Statement of Cash Flows
for the three months ended March 31, 1996 and 1995 3
Notes to Condensed Consolidated Financial Statements 4
Statistical Information 5
Management's Discussion and Analysis of Financial Condition and Results
of Operations 7
Part II. Other Information 11
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 42,658 $ 46,071
Accounts receivable 27,591 26,320
Inventories 14,113 4,158
Materials and supplies 29,102 26,563
Other current assets 14,739 12,846
------------ ------------
TOTAL CURRENT ASSETS 128,203 115,958
Investments 231,422 230,652
Net property, plant and equipment 352,152 360,270
Other assets 31,319 30,259
------------ ------------
TOTAL ASSETS $ 743,096 $ 737,139
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short term borrowings $ 449 $ 2,571
Current maturities of long-term debt 13,428 13,427
Accounts payable 16,720 13,251
Payroll and related benefits accrued 4,804 5,039
Accrued interest 3,446 7,198
Other current liabilities 5,047 5,448
------------ ------------
TOTAL CURRENT LIABILITIES 43,894 46,934
Long-term debt 182,166 169,175
Other liabilities 39,901 38,199
------------ ------------
TOTAL LIABILITIES 265,961 254,308
Minority interest 110,967 111,773
Shareholders' equity 366,168 371,058
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 743,096 $ 737,139
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE> 4
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1996 1995
-------- --------
<S> <C> <C>
GROSS REVENUE $ 60,239 $ 56,120
Less: Freight, allowances and royalties 2,554 2,038
-------- --------
NET SALES 57,685 54,082
-------- --------
COSTS AND EXPENSES
Production costs 39,827 31,811
Depreciation, depletion and amortization 14,483 12,358
Exploration, evaluation and other lease costs 4,839 3,222
General and administrative expenses 3,311 2,709
Taxes, other than income 746 562
-------- --------
Total 63,206 50,662
-------- --------
OPERATING (LOSS) INCOME (5,521) 3,420
Interest income 808 947
Interest expense, net (1,687) (1,711)
Other (expense) income, net (1,511) 650
-------- --------
(LOSS) INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST (7,911) 3,306
Income tax benefit (expense) 2,545 (261)
Minority interest in net loss (income) 1,363 (563)
-------- --------
NET (LOSS) INCOME (4,003) 2,482
Preferred dividends 1,869 1,869
-------- --------
NET (LOSS) INCOME TO COMMON SHARES $ (5,872) $ 613
======== ========
(LOSS) INCOME PER COMMON SHARE $ (.07) $ .01
======== ========
DIVIDENDS PER COMMON SHARE $ .025 $ .025
======== ========
AVERAGE COMMON SHARES OUTSTANDING
FOR (LOSS) INCOME PER SHARE PURPOSES 81,251 86,294
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 5
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET (LOSS) INCOME $ (4,003) $ 2,482
Adjustments to reconcile net (loss) income to cash flows from
operating activities:
Depreciation, depletion and amortization 14,483 12,358
Exploration and evaluation costs 3,372 3,058
Deferred taxes (2,545) (316)
Change in current assets and liabilities (7,057) (10,740)
Other net change 1,167 125
-------- --------
Total Adjustments 9,420 4,485
-------- --------
NET CASH FLOWS FROM OPERATING ACTIVITIES 5,417 6,967
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (13,506) (21,268)
Exploration and evaluation expenditures (3,689) (2,949)
Other, net (273) (192)
-------- --------
NET CASH FLOWS USED IN INVESTING ACTIVITIES (17,468) (25,781)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from stock issuances 1,246 --
Cash proceeds from borrowings 13,052 --
Cash dividend payments (3,899) (3,892)
Repayment of debt (2,288) --
Other, net (18) (103)
-------- --------
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 8,093 (3,995)
-------- --------
EFFECT OF EXCHANGE RATE CHANGES 545 (417)
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,413) (23,226)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 46,071 76,464
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 42,658 $ 53,238
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
BATTLE MOUNTAIN GOLD COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. General Information
The unaudited condensed consolidated financial statements
included herein have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission and include all adjustments, consisting only
of normal recurring accruals, which are, in the opinion of the management of
Battle Mountain Gold Company (BMG), necessary for a fair presentation. These
financial statements include the accounts of BMG and its wholly owned and
majority-owned subsidiaries (the Company). Certain information and footnote
disclosures required by generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. These financial
statements should be read in conjunction with the financial statements and the
notes thereto which are included in the Company's Annual Report on Form 10-K
(File No. 1-9666) for the year ended December 31, 1995.
Note 2. Income Per Common Share
The effect of common stock equivalents is not included in the
calculation of income per share for the three months ended March 31, 1996
because the effect is antidilutive. Fully diluted income per share is not
presented because the effect of other dilutive securities is antidilutive for
the periods presented.
4
<PAGE> 7
PART I. FINANCIAL INFORMATION - Continued
STATISTICAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
March 31,
------------------
1996 1995
---- ----
<S> <C> <C>
BATTLE MOUNTAIN COMPLEX Operating Data
Production statistics
Gold recovered (000s oz) 17 17
Silver recovered (000s oz) 64 42
- ------------------------------------------------------------------
Cost Per Equivalent Gold Ounce (1)
Cash production costs $311 $334
Taxes, other than income 10 12
DD&A 73 62
---- ----
Total operating costs $394 $408
- ------------------------------------------------------------------
SAN LUIS Operating Data
Production statistics
Gold Recovered (000s oz) 15 17
Silver Recovered (000s oz) 9 6
- ------------------------------------------------------------------
Cost Per Equivalent Gold Ounce (1)
Cash production costs $273 $250
Taxes, other than income 18 7
DD&A 85 96
---- ----
Total operating costs $376 $353
- ------------------------------------------------------------------
PAJINGO Operating Data
Production statistics
Gold recovered (000s oz) 11 8
Silver recovered (000s oz) 5 18
- ------------------------------------------------------------------
Cost Per Equivalent Gold Ounce (1)
Cash production costs $292 $110
Taxes, other than income 3 2
DD&A 115 54
---- ----
Total operating costs $410 $166
- ------------------------------------------------------------------
KORI KOLLO Operating Data
Production statistics
Gold recovered BMG share (000s oz) (2) 69 71
Silver recovered BMG share (000s oz) (2) 214 302
Gold recovered (000s oz) 78 81
Silver recovered (000s oz) 243 343
- ------------------------------------------------------------------
Cost Per Equivalent Gold Ounce (1)
Cash production costs $206 $167
Taxes, other than income 3 1
DD&A 103 90
---- ----
Total operating costs $312 $258
- ------------------------------------------------------------------
</TABLE>
See Page 6 for footnotes
5
<PAGE> 8
PART I. FINANCIAL INFORMATION - Continued
STATISTICAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1996 1995
------ ------
<S> <C> <C>
SAN CRISTOBAL Operating Data
Production statistics
Gold recovered BMG share (000s oz)(3) 10 9
Silver recovered BMG share (000s oz)(3) 25 21
Gold recovered (000s oz) 21 18
Silver recovered (000s oz) 50 41
- --------------------------------------------------------------------------------
Cost Per Equivalent Gold Ounce (1)
Cash production costs $ 312 $ 314
Taxes, other than income -- --
DD&A 93 81
------ ------
Total operating costs $ 405 $ 395
- --------------------------------------------------------------------------------
RED DOME Operating Data
Production statistics
Gold recovered BMG share (000s oz)(3) 12 11
Silver recovered BMG share(000s oz)(3) 106 76
Gold recovered (000s oz) 24 21
Silver recovered (000s oz) 209 146
Copper recovered (000s lbs) 3,525 2,542
- --------------------------------------------------------------------------------
Cost Per Equivalent Gold Ounce (1)
Cash production costs $ 204 $ 220
Taxes, other than income -- --
DD&A 92 125
------ ------
Total operating costs $ 296 $ 345
- --------------------------------------------------------------------------------
AGGREGATE DATA
Gold recovered BMG share (000s oz) 134 133
Gold sales BMG share (000s oz) 125 124
Gold recovered (000s oz) 166 162
Gold sales (000s oz) 148 142
Average price per oz realized $ 393 $ 382
- --------------------------------------------------------------------------------
Silver recovered BMG share (000s oz) 423 465
Silver sales BMG share (000s oz) 320 388
Silver recovered (000s oz) 580 596
Silver sales (000s oz) 379 453
Average price per oz realized $ 5.45 $ 4.83
- --------------------------------------------------------------------------------
Weighted Average Cost Per Equivalent Gold Ounce (1)
Cash production costs $ 240 $ 209
Taxes, other than income 5 3
DD&A 96 87
------ ------
Total operating costs $ 341 $ 299
- --------------------------------------------------------------------------------
</TABLE>
(1) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period.
Includes mining, milling and other plant costs directly related to a mine
site and stripping cost adjustments but excludes third party smelting
costs, transportation costs, royalties, depreciation, depletion and
amortization and taxes.
(2) Reflects BMG's 88 percent equity interest.
(3) Reflects BMG's average equity interest of 50.5 percent for 1996 and of 51.4
percent for 1995.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the Company's Annual Report on Form 10-K (File No. 1-9666) for the
year 1995 (1995 Form 10-K) and the historical condensed consolidated financial
statements and notes thereto preceding this discussion.
LIQUIDITY AND CAPITAL RESOURCES
Summary - At March 31, 1996, the Company had cash and cash equivalents of
$42.7 million, of which $11.0 million was held by BMG, $21.0 million was held
by Niugini Mining and $10.7 million was held by Inti Raymi.
Operating Activities - The Company generated cash flow of $5.4 million from
operating activities during the three months ended March 31, 1996, compared
with cash flow from operations of $7.0 million for the three months ended March
31, 1995. The decrease in cash flows from operations of $1.6 million was
primarily the result of higher production costs at the Kori Kollo, Red Dome and
Pajingo mines. Total production costs increased at the Red Dome mine because
of a 47% increase in production volumes. The increase in production costs at
the Kori Kollo and Pajingo mines resulted from an increase in per unit
costs.(See "- Results of Operations - Production Costs").
Investing Activities - The Company used cash of $13.5 million for capital
expenditures during the three months ended March 31, 1996. This amount
includes $6.0 million in interest that has been capitalized related to the
Company's investment in the Lihir Gold Ltd. The Company's 1996 business plan
includes a total of $47.8 million for capital expenditures, of which
approximately $10.5 million and $8.6 million are associated with the Phoenix
and Crown Jewel projects, respectively and approximately $9.7 million is
associated with various projects and purchases of equipment by Inti Raymi.
During the three months ended March 31, 1996, the Company spent
approximately $5.2 million on exploration and evaluation. The Company
currently estimates that it will spend a total of approximately $18 million on
its 1996 exploration programs. Exploration and evaluation expenditures
increased for the three months ended March 31, 1996 compared with the same
period of 1995 primarily because of the expansion of the Company's exploration
activities in the area of the Red Dome and Pajingo mines.
Financing Activities - During the first quarter of 1996, BMG borrowed an
additional $13 million under its $75 million revolving credit facility,
resulting in a total of $30 million outstanding under this facility as of March
31, 1995. During the first quarter of 1996, BMG received $3.9 million in
dividends from Inti Raymi, net of applicable Bolivian withholding taxes.
Further dividends are expected from Inti Raymi as earnings and cash are
available.
Conclusion - The Company expects cash on hand, along with cash flows from
operations and financing facilities currently in place, to be adequate to meet
its cash needs at least through the middle of 1997.
On March 11, 1996, the Company announced that it had signed an
agreement to combine with Hemlo Gold Mines, Inc. ("Hemlo") of Toronto, Canada.
Under the terms of the agreement Hemlo will become an indirect subsidiary of
BMG and Hemlo's shareholders will receive 1.48 shares of a newly issued class
of Hemlo exchangeable shares. Each exchangeable share will be exchangeable
into one share of BMG common stock and will entitle its holder to dividend and
other rights economically equivalent to those of the BMG common stock and,
through a voting trust, to vote at meetings of stockholders of BMG. The
combination is structured as a Canadian plan of arrangement and is intended to
provide an opportunity for shareholders of Hemlo to achieve tax deferral in
certain circumstances and to be accounted for as a pooling of interests under
U.S. generally accepted accounting principles. The combination is subject to
approval by
7
<PAGE> 10
the Ontario Court of Justice, other regulatory authorities, and the
shareholders of BMG and of Hemlo. The Company anticipates that the combination
will be completed early in the third quarter of 1996.
Government Regulation - In Bolivia, new environmental regulations to implement
federal legislation passed in 1992 became effective in December 1995. The
official version of the new regulations was released in April, 1996. These
regulations contain new environmental standards and requirements applicable to
the Company's Kori Kollo project which, depending on how the regulations are
implemented and interpreted could require expenditures and changes in
operations and it is possible that such expenditures and changes could have a
material effect on the Company's financial condition or results of operations.
However, based on the Company's initial review of the regulations and assuming
reasonable interpretation and implementation, the Company does not anticipate
that compliance will have a material adverse effect on the Company's financial
condition or results of operations.
Forward Sales and Hedging - The Company has limited involvement with derivative
financial instruments and does not use them for trading purposes.
At March 31, 1996, Inti Raymi was party to three interest rate cap
agreements which were effective June 1, 1994, each with a term of three years.
The agreements entitle Inti Raymi to receive from counterparties on a quarterly
basis the amounts, if any, by which Inti Raymi's interest payments on a portion
of its LIBOR based floating-rate Kori Kollo project financing exceed various
fixed rates over the term of the caps. The fixed rates in the cap agreements
gradually escalate from 5.4 percent to 7.2 percent by 1997. The net
unamortized cost of the premiums paid for these caps amounting to $.4 million
at March 31, 1996, has been included in other assets. Since the interest rate
caps were put in place, the Company has amortized approximately $.3 million of
such premiums and has received approximately $.2 million in settlement of
expiring caps.
The Company uses fixed forward sales contracts, spot deferred sales
contracts and put options to hedge anticipated sales of gold, silver and
copper. The following table summarizes the Company's contracts at March 31,
1996:
<TABLE>
<CAPTION>
Average Price
Amount Per Unit Period
---------- ------------------ ---------------------
<S> <C> <C> <C>
BMG
Forward sales contracts
Gold 129,977 oz US$399 Apr 96 - Feb 97
Niugini Mining
Forward sales contracts
Gold 85,422 oz A$543 Apr 96 - Dec 96
53,679 oz US$394 Apr 96
Silver 312,568 oz US$5.81 Apr 96
Copper 1,000 tonnes US$2,460 Sep 96
Inti Raymi
Forward sales contracts
Gold 83,500 oz US$399 Apr 96 - Sep 96
Purchased put options
Gold 10,500 oz US$385 Apr 96
</TABLE>
Deferred costs associated with Inti Raymi's forward sales contracts
amounted to $1.1 million and $1.5 million at March 31, 1996 and 1995,
respectively. Deferred costs associated with put options amounted to $ .1
million at March 31, 1996. There were no put options at March 31, 1995.
8
<PAGE> 11
The aggregate amount by which the net market value of the Company's
open forward sales contracts is greater than the spot price of $396 per ounce
of gold, $5.51 per ounce of silver and $2,549 per tonne of copper, as of March
31, 1996, before consideration of the deferred costs referred to above, is $2.9
million, of which $1.1 million is attributable to minority interests. The
foregoing amounts were calculated assuming conversion of Australian dollar
contracts to U.S. dollars at the March 1996 month end exchange rate of US$.78
to A$1.
Foreign Operations - The Company's identifiable assets attributable to foreign
operations as of March 31, 1996, were approximately $554 million and foreign
mining operations represented approximately 80 percent of the total gross
revenues of the Company for the three months ended March 31, 1996. As a
result, the Company is exposed to risks normally associated with foreign
operations, including political, economic, social and labor instabilities, as
well as foreign exchange controls, currency fluctuations and taxation changes.
In Bolivia, presidential and congressional elections are scheduled for
mid-1997. Under the Bolivian constitution, a sitting president cannot serve
consecutive terms. Therefore, a change in administration will occur in 1997.
The current administration has initiated far reaching programs to decentralize
central government's authority, to decentralize the distributions of the tax
revenues, to reform the education and tax system and to promote private
ownership of previously state-owned companies. While the Company believes
these reforms are beneficial to the Bolivian people and Bolivian economy, it is
difficult to predict the ultimate impacts of these and associated reforms and a
change in administration on the Company's Bolivian operations.
RESULTS OF OPERATIONS
The following table presents significant financial data related to the
Company's results of operations for the three months ended March 31:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Gold sales (ounces - 100%) 148,000 142,000
Gold revenues realized per ounce $ 393 $ 382
Average London PM fix per ounce $ 400 $ 379
Cash production costs per equivalent gold ounce produced * $ 240 $ 209
Depreciation, depletion and amortization per equivalent gold
ounce produced $ 96 $ 87
</TABLE>
* Includes mining, milling and other plant costs directly related to a mine
site and stripping cost adjustments but excludes third party smelting
costs, transportation costs, royallties, depreciation, depletion and
amortization and taxes.
Gross Revenue - Gross revenue increased for the three months ended March 31,
1996, compared with the same period of 1995 because of a higher average
realized gold price and increased sales volumes from the Red Dome, San
Cristobal, Pajingo and Kori Kollo mines. Increased spot gold prices caused the
average realized sales price of gold to increase to $393 per ounce for the
first quarter of 1996 compared with $382 per ounce for the first quarter of
1995. Average realized prices for the first quarter of 1996 were lower than
the average London PM fix because of BMG's practice of pricing its gold
shipments 20 to 45 days in advance of shipment.
Production Costs - Production costs increased on a total and per equivalent
ounce of gold produced basis for the three month period ended March 31, 1996,
compared with the same period of 1995. Production costs increased because of
increased sales volumes at the Red Dome, San Cristobal, Pajingo and Kori Kollo
mines. Production costs per equivalent ounce of gold produced increased at the
Kori Kollo, Pajingo and San Luis mines. These unit costs increased at the Kori
Kollo mine because of lower mill head grades
9
<PAGE> 12
and temporary increases in materials costs. Studies are underway regarding the
lower mill head grades. Per equivalent ounce of gold produced costs increased at
the Pajingo mine because production is now coming from ore recovered from the
higher cost underground section of the Cindy deposit and because ore was being
mined at a faster rate than it was being milled. Mining was completed at the
Cindy deposit in April and production is currently from stockpiles which will
result in a reduction of per equivalent ounce production costs. The Company
expects production to be completed towards the end of the third quarter of 1996.
Depreciation, depletion and amortization increased in total and on a
cost per equivalent ounce produced for the three months ended March 31, 1996,
when compared with the same period of 1995. Depreciation, depletion and
amortization increased primarily because of an increase in this cost on a per
equivalent ounce of gold produced basis at the Pajingo mine complex. The
depreciation, depletion and amortization at the Pajingo mine complex is high
because of the high cost of the development of the underground portion of the
Cindy mine relative to the number of ounces that will be produced from that
mine. Production from ore from the Cindy mine will cease during the second
quarter of 1996 thus reducing depreciation, depletion and amortization charges
at the Pajingo mine complex in subsequent quarters. Once the ore from the
Cindy mine is exhausted, gold will continue to be produced at the Pajingo
complex from low grade stockpiles from the previously depleted Scott Lode.
Other - The Company had other expense in the amount of $1.5 million for the
three months ended March 31, 1996, compared with other income of $ .6 million
for the three months ended March 31, 1995. The other expense resulted
primarily from foreign exchange losses in the amount of approximately $1.6
million. Most of these foreign exchange losses resulted from losses recorded
on U.S. dollar cash deposits held by Niugini Mining (Australia) Pty. Ltd.
("NMA"), an Australian dollar functional currency subsidiary of Niugini Mining.
The losses occurred because of the strengthening of the Australian dollar
compared with the US dollar. The U.S. dollar cash deposits were from sales of
gold, silver and copper from the Red Dome mine. Under the terms of a short
term loan agreement, Niugini Mining was required to keep U.S. dollars received
from the sales of its metals from the Red Dome mine in a U.S. dollar bank
account held by NMA. At the end March 1996, this loan was repaid and there are
no further restrictions imposed by the loan agreement on the transfer of funds
between NMA and its affiliates. This will allow Niugini Mining more flexibility
in managing its foreign currency gains and losses. Niugini Mining transferred
most of the U.S. dollar cash deposits from NMA to Niugini Mining Ltd. in April,
1996. Niugini Mining Ltd. is a U.S. dollar functional currency company.
The Company's effective income tax rate is 40 percent for the first
quarter of 1996, as compared with an effective income tax rate of 9.5 percent
in 1995. The effective tax rate for 1996 is higher than the U.S. statutory
rate primarily because the income tax benefit derived from the undistributed
losses of Niugini Mining have not been included in the calculation of the
income tax rate. The effective income tax rate for 1995 was affected by the
recognition of deferred tax assets related to foreign tax credits. Prior to
1995, the Company treated foreign taxes paid as deductions for U.S. income tax
purposes. However, the Company determined in 1995 that it is more likely than
not that it will be able to utilize foreign tax credits for foreign taxes
because of Inti Raymi's projected net income and its ability to remit earnings
in the form of dividends to BMG.
10
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
*3(a) Restated Articles of Incorporation of the Company,
as amended and restated through May 11, 1988
(Exhibit 4(a) to the Company's Registration
Statement on Form S-3 as filed with the Commission
on January 14, 1994; Registration No. 33-51921).
*3(b) Certificate of Resolution Establishing Designation,
Preferences and Rights of $3.25 Convertible
Preferred Stock (Exhibit 4(b) to the Company's
Registration Statement on Form S-3 as filed with the
Commission on January 14, 1994; Registration No.
33-51921).
*3(c) Bylaws of the Company, as amended through March 1,
1994 (Exhibit 3(c) to the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30,
1995; File No. 1-9666).
11 Computation of Earnings per Share
12 Computation of Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred
Dividends
27 Financial Data Schedule for the three month period
ended March 31, 1996
--------------------
* Incorporated by reference as indicated.
(b) Reports on Form 8-K
Form 8-K dated March 11, 1996.
11
<PAGE> 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
BATTLE MOUNTAIN GOLD COMPANY
Date: May 15, 1996 /s/ R. Dennis O'Connell
-----------------------------------
R. Dennis O'Connell, Vice President-
Finance and Chief Financial Officer
(Principal Financial and Chief
Accounting Officer)
12
<PAGE> 15
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Document
- ----------- --------
<S> <C>
*3(a) Restated Articles of Incorporation of the Company, as amended
and restated through May 11, 1988 (Exhibit 4(a) to the
Company's Registration Statement on Form S-3 as filed with the
Commission on January 14, 1994; Registration No. 33-51921).
*3(b) Certificate of Resolution Establishing Designation,
Preferences and Rights of $3.25 Convertible Preferred Stock
(Exhibit 4(b) to the Company's Registration Statement on Form
S-3 as filed with the Commission on January 14, 1994;
Registration No. 33-51921).
*3(c) Bylaws of the Company, as amended through March 1, 1994
(Exhibit 3(c) to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995; File No. 1-9666).
11 Computation of Earnings per Share
12 Computation of Ratio of Earnings to Fixed Charges and Earnings
to Combined Fixed Charges and Preferred Dividends
27 Financial Data Schedule for the three months ended March 31,
1996
</TABLE>
- --------------------------
* Incorporated by reference as indicated.
<PAGE> 1
Exhibit 11
BATTLE MOUNTAIN GOLD COMPANY
COMPUTATION OF EARNINGS PER COMMON SHARE
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------
1996 1995
------------ ------------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE
Earnings
Net (loss) income $ (4,003) 2,482
Deduct dividends on preferred shares 1,869 1,869
------------ ------------
Net (loss) income applicable to common stock $ (5,872) $ 613
============ ============
Shares
Weighted average number of common shares outstanding 81,251,397 80,946,628
Assuming exercise of stock options reduced by the number of shares
which could have been purchased with the proceeds from
exercise of such options -- 498,481
Assuming conversion of 6% convertible debentures -- 4,848,485
------------ ------------
Weighted average number of common shares outstanding, as adjusted 81,251,397 86,293,594
============ ============
Primary (loss) earnings per common share $ (.07) $ .01
============ ============
FULLY DILUTED EARNINGS PER SHARE (1)
Earnings
Net (loss) income $ (4,003) $ 2,482
============ ============
Shares
Weighted average number of common shares outstanding 81,251,397 80,946,628
Assuming exercise of stock options reduced by the number of shares
which could have been purchased with the proceeds from
exercise of such options 415,903 543,759
Assuming conversion of 6% convertible debentures 4,847,515 4,848,485
Assuming conversion of preferred stock 10,952,600 10,952,600
------------ ------------
Weighted average number of common shares outstanding, as adjusted 97,467,415 97,291,472
============ ============
Net (loss)income per common share assuming full dilution $ (.04) $ .03
============ ============
ADDITIONAL PRIMARY COMPUTATION (1)
Net income (loss) applicable to common stock, as adjusted per
primary computation above $ (5,872)
============
Weighted average number of shares outstanding, as adjusted per
primary computation above 81,251,397
Anti-dilutive effect of outstanding options (as determined by the
application of the treasury stock method) 360,847
Anti-dilutive effect of conversion of 6% convertible debentures 4,847,515
------------
Weighted average number of common shares, as adjusted 86,459,759
============
Primary (loss) earnings per share, as adjusted $ (.07)
============
</TABLE>
(1) These calculations are submitted in accordance with Regulation S-K
Item 601(b)(11) although it is contrary to paragraphs 30 and 40 of APB
Opinion No. 15 because it produces an anti-dilutive result.
<PAGE> 1
Exhibit 12
BATTLE MOUNTAIN GOLD COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED DIVIDENDS
(in thousands, except ratios)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1996 1995
-------- --------
<S> <C> <C>
EARNINGS COMPUTATION USING
CONSOLIDATED INCOME STATEMENT DATA
(Loss) income before income taxes and minority interest $ (7,911) $ 3,306
Minority interest in loss (income) of majority-owned subsidiaries 1,363 (563)
-------- --------
(Loss) income before income taxes (6,548) 2,743
-------- --------
Add fixed charges included in (loss) income:
Interest expense 1,687 1,711
Amortization of deferred financing costs 66 49
Interest portion of rental expenses (33%) 439 197
-------- --------
Sub-total fixed charges included in (loss) income 2,192 1,957
-------- --------
(Loss) income $ (4,356) $ 4,700
======== ========
Fixed Charges
Included in (loss) income $ 2,192 $ 1,957
Capitalized interest 1,492 1,831
-------- --------
Total fixed charges 3,684 3,788
-------- --------
Preferred dividends 3,057 2,066
-------- --------
Combined fixed charges and preferred dividends $ 6,740 $ 5,854
======== ========
Ratio of earnings to fixed charges -- 1.24
Amount by which fixed charges exceed earnings $ 8,040 --
Ratio of earnings to combined fixed charges
and preferred dividends -- --
Amount by which combined fixed charges and
preferred dividends exceed earnings $ 11,096 $ 1,154
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from Battle Mountain Gold
Company's Condensed Consolidated Balance Sheet at March 31, 1996 and December
31, 1995 and Condensed Consolidated Statements of Income for the three months
ended March 31, 1996 and 1995, and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 42,658
<SECURITIES> 0
<RECEIVABLES> 27,591
<ALLOWANCES> 0
<INVENTORY> 14,113
<CURRENT-ASSETS> 128,203
<PP&E> 629,616
<DEPRECIATION> (277,464)
<TOTAL-ASSETS> 743,096
<CURRENT-LIABILITIES> 43,894
<BONDS> 0
<COMMON> 8,133
0
110,578
<OTHER-SE> 247,457
<TOTAL-LIABILITY-AND-EQUITY> 743,096
<SALES> 60,239
<TOTAL-REVENUES> 60,239
<CGS> 39,827
<TOTAL-COSTS> 63,206
<OTHER-EXPENSES> (1,511)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,687)
<INCOME-PRETAX> (7,911)
<INCOME-TAX> (2,545)
<INCOME-CONTINUING> (4,003)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,003)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> 0
</TABLE>
