SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 27, 1998
BATTLE MOUNTAIN GOLD COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Nevada 1-9666 76-0151431
(STATE OR OTHER (COMMISSION FILE NUMBER) (IRS EMPLOYER
JURISDICTION IDENTIFICATION NO.)
OF INCORPORATION)
333 Clay Street, 42nd
Floor
Houston, Texas 77002-4103
(ADDRESS, OF PRINCIPAL
EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (713) 650-6400
Not applicable
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
ITEM 5. OTHER EVENTS.
5.1 Attached hereto as Exhibit 99.1 and incorporated by reference herein
is certain information regarding third quarter earnings, as presented in a press
release dated October 27, 1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
c) Exhibits.
99.1 Press Release issued by Battle Mountain Gold Company dated October
27, 1998.
<PAGE>
SIGNATURES
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 hereunto duly authorized.
Date: November 16, 1998 BATTLE MOUNTAIN GOLD COMPANY
(Registrant)
By: /s/ IAN D. BAYER
Name: Ian D. Bayer
Title: Chief Executive Officer
EXHIBIT 99.1
BATTLE MOUNTAIN GOLD CONTINUES STRONG OPERATING/CASH FLOW PERFORMANCE; BUT
POSTS LOSSES ON LOWER GOLD PRICES
Houston, October 27, 1998 -- Battle Mountain Gold Company (BMG-NYSE;
BMC-TSE) today reported a third quarter consolidated net loss of $9.6 million,
or 4 cents per share. The loss includes non-cash, foreign-currency-related
accounting charges of $7.2 million ($5.1 million net of tax), which were
primarily related to the U.S. dollar-denominated debt of its Canadian subsidiary
and have no effect on shareholders' equity. The third quarter loss compares with
net income of $22.2 million, or 10 cents per share, in the same period last
year, which included income tax benefits of $24.9 million related to the
Company's restructuring of the ownership of its subsidiary Niugini Mining
Limited.
For the first nine months of 1998, the consolidated net loss was $24.2
million, or 11 cents per share, and includes non-cash foreign-currency-related
accounting charges of $8.9 million net of tax. This compares with consolidated
income of $4.5 million, or 2 cents per share, in the same period last year.
BMG President and Chief Executive Officer, Ian D. Bayer, noted that "the
Company's strong operating performance is allowing it to generate almost $17
million more cash flow from operations than last year. This allows BMG to
reinvest in growth opportunities such as Phoenix and El Cairo."
Net cash flows from operations were $62.1 million in the first nine months
of 1998, compared with $45.3 million in the same period of 1997, because of
lower operating costs and higher gold production, notwithstanding a $40 per
ounce reduction in average realized gold prices.
Cash production costs declined by 21% during the first nine months,
compared with the same period a year ago, averaging $158 per gold ounce sold.
Attributable gold production was 690,000 ounces, or 51,000 ounces more than the
same period last year.
Bayer noted that the Company remains on target to meet its annual
production objective for 1998 of approximately 875,000 attributable ounces of
gold. Average cash production costs are expected to be lower than previous
estimates of $175 per gold ounce sold. BMG has a strong fundamental position,
with low-cost, quality reserves, good cash flows from operations, and a strong
balance sheet. In addition, prospects for growth from current projects
<PAGE>
are gaining momentum, and further coordination of our exploration and corporate
development efforts is enhancing our acquisition activities, he said.
OPERATIONS
At the GOLDEN GIANT mine, production for the period was almost 20,000
ounces over the same period last year largely due to higher grades. Current
forecasts indicate production of approximately 370,000 ounces in 1998, a 10%
increase over the original target. Cash production costs were $105 per ounce,
compared with $130 per ounce in 1997, reflecting higher gold production and a
weaker Canadian dollar.
At KORI KOLLO in Bolivia, where Battle Mountain holds an 88% interest,
cash production costs were $185 per ounce, a $12 per ounce improvement over last
year. Attributable gold production for the third quarter was approximately
73,000 ounces. Production was impacted by a higher proportion of refractory ores
from the northeast portion of the Kori Kollo pit, offset by higher mill
throughput and the processing of Llallagua oxide ore.
At the nearby LLALLAGUA sulfide resource, results from the bio-oxidation
heap leach project continue to be excellent. Recoveries from the second pilot
heap-leach test also exceeded 60%, notwithstanding a higher heap, coarser and
more refractory ore and a lower head grade than the initial test.
At the 84.65% owned HOLLOWAY mine, cash production costs per gold ounce
sold were $199, compared with $329 in the third quarter last year. Performance
improvements, ongoing since the beginning of the year, continued during the
period and current forecasts indicate attributable production will meet our
target.
At the 50% owned VERA/NANCY mine in Australia, attributable gold
production was 10,000 ounces during the quarter. Cash production costs for the
first nine months were $137 per gold ounce sold, or $44 per ounce less than the
same period a year earlier, in part due to a lower Australian dollar.
Development of the Vera Zone was completed in July, while the advance undertaken
during August and September was concentrated in the Nancy North Zone. Normandy
Mining, the Pajingo joint venture operator, is presently preparing a mine study
which could result in a doubling of the mine's production capacity over the next
three years. A preliminary report is expected in the fourth quarter.
At the BATTLE MOUNTAIN COMPLEX in Nevada, gold production at the residual
heap leach Reona mine was 8,000 ounces during the third quarter. Cash production
costs for the first nine months, including non-current mining costs of $66 per
ounce, were $253 per gold ounce sold, compared with $274 a year earlier.
At LIHIR in Papua New Guinea, where BMG holds an 8.65% interest through
its 50.5% owned subsidiary Niugini Mining Limited (NML), attributable production
for the quarter was 11,000 ounces. Production was adversely affected by various
equipment constraints, principally the oxygen plant; low autoclave
availabilities; and lower grades. Cash production costs were $232 per ounce. The
effects of lower gold production were more than offset by lower total operating
costs resulting from the decreased quantity of mined ore and waste. Lihir Gold
Limited has reduced its forecast of 1998 gold production from 600,000 ounces to
530,000 ounces. Gold production for 1999 is still projected to exceed 700,000
ounces. In addition, as a result of Lihir meeting its technical and financial
completion tests, NML received confirmation
<PAGE>
during the quarter that its obligations under the Completion Agreement have been
terminated and NML's $14.1 million cash held in escrow has been released.
At the CROWN JEWEL project in Washington state, where BMG is earning a 54%
interest, the Company continues to work through the permitting and appeals
process. Though the majority of permits have been obtained, several significant
permits remain to be issued, and there are also a number of outstanding appeals
by special interest groups which must be resolved. Additional appeals may be
filed as the remaining permits are issued, and this continues to make the
outcome and timing of the permitting and appeals process, as well as start-up of
construction, difficult to predict.
EXPLORATION
At the Battle Mountain Complex, work is continuing on the PHOENIX
project which is expected to result in the completion of approximately
146,000 ft of reverse circulation (RC) and core drilling by year-end. Almost
80% of this work has been completed.
Drill results from West Midas, mid-Midas and Fortitude pits continue to be
very encouraging. It now appears that the footprint of the new model is going to
be much larger than the original, spanning from the old Fortitude pit to the
north, to the Midas deposits in the south, a distance of about 3 miles. Drilling
at West Midas intersected appreciable gold mineralization, which remains open to
the south. Adjacent intercepts also occur west to east and a series of angle
holes are planned to better identify the orebody's geometry.
Targets beneath the eastern part of Fortitude pit in the middle Battle
Formation and the Virgin fault zone also returned encouraging results. Some of
the better intercepts from the Phoenix project include:
<TABLE>
<CAPTION>
PIT AREA DRILL HOLE INTERCEPT (FT) ASSAYS
- ------------------------------------------------------------------------------------------------------------------------------------
NO. TYPE FROM TO WIDTH AU OPT AG OPT CU%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Phoenix-Fortitude ......... 7394 RC 15 60 45 0.135 0.87 0.02
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Fortitude ......... " RC 95 115 20 0.145 1.31 0.02
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Fortitude ......... 7504 RC 165 255 90 0.295 0.16 0.04
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Fortitude ......... 7516 RC 230 360 130 0.124 0.26 0.05
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Fortitude ......... 7523 RC 275 340 65 0.182 0.40 0.01
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Fortitude ......... " RC 480 535 55 0.166 0.20 0.12
- ------------------------------------------------------------------------------------------------------------------------------------
North Midas-Glory Hole ...... 7320 RC 135 230 95 0.320 1.68 0.34
- ------------------------------------------------------------------------------------------------------------------------------------
North Midas-Glory Hole ...... 7335 RC 465 495 30 0.145 0.34 0.34
- ------------------------------------------------------------------------------------------------------------------------------------
North Midas-Glory Hole ...... " RC 595 615 20 0.380 0.20 0.08
- ------------------------------------------------------------------------------------------------------------------------------------
West Midas ............ 7386 RC 560 580 20 0.157 0.08 0.06
- ------------------------------------------------------------------------------------------------------------------------------------
West Midas ............ 7555 RC/Core Total Interval 140 0.101 0.25 0.05
- ------------------------------------------------------------------------------------------------------------------------------------
West Midas ............ 7551 Core 357 400 43 0.138 0.12 0.06
- ------------------------------------------------------------------------------------------------------------------------------------
West Midas ............ " Core 505 521.4 16.4 0.209 0.19 0.05
- ------------------------------------------------------------------------------------------------------------------------------------
West Midas ............ 7553 RC 465 575 110 0.195 0.03 0.02
- ------------------------------------------------------------------------------------------------------------------------------------
West Midas ............ 7560 Core 490 615 125 0.213 0.14 0.09
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Metallurgical testing continued and centered on the variability of the
ore. The tests have largely confirmed the positive bench scale gravity/flotation
results to date. Plans for obtaining a large 160-ton sample for a pilot milling
test in the first quarter of 1999 are being finalized.
At COPPER BASIN, about 6 miles to the northeast of Phoenix, a 5,000 to
8,000 ft drill program comprised of 8-10 holes on the eastern side of the
Surprise pit is expected to begin in early November. The program will delineate
the high-grade gold-silver-copper mineralization beneath the pit's eastern
highwall.
Work in Mexico continues to focus on the EL CAIRO project, where a 40,000
ft RC follow-up drilling program was initiated there in August on the El
Castillo deposit. At the end of September, 30 RC holes totaling 26,000 ft had
been completed. Some of the better recent intercepts include: 0.047opt Au over
113ft, 0.044opt/74ft, 0.035opt/54ft, 0.033opt/187ft, and 0.029opt Au over 44ft.
Though the program is only about two-thirds complete, results to date are
confirming expectations for El Castillo as a potential low grade, bulk tonnage
gold deposit.
Drilling is also now in progress to the north and south of El Castillo,
where recent mapping and sampling of geochemical gold anomalies indicate the
presence of highly altered and mineralized rocks very similar to those hosting
the El Castillo deposit. Both areas offer potential to expand the El Castillo
resource.
In the HOLLOWAY CAMP, the last two holes of the Teddy Bear/Cadden surface
drill program have been completed, and the 1998 surface exploration program has
demonstrated the potential to extend the alteration system hosting the Holloway
deposit over a large area at depth.
Based on the completed drill program: Three of five drill holes along the
western portion of the drill area, 1,300-2,000 ft west of the Holloway shaft,
have penetrated significant grade mineralization between the -3,300 ft and
- -4,700 ft elevations. A preliminary geological resource totalling approximately
1,195,000 tons at 0.19 opt (227,000 ounces) is indicated. The mineralization is
open to the east below the Holloway shaft. In addition, preliminary geological
resource calculations completed in September for the Middle Zone indicate
approximately 1,000,000 tons grading 0.22 opt Au (220,000 ounces).
In Australia, on the PAJINGO joint venture where BMG holds a 50% interest,
drilling has focused on VERA SOUTH and a variety of nearby targets. At Vera
South, drilling has generally returned results consistent with the geologic
model developed for the Vera South resource block model and has highlighted
potential areas of additional high-grade mineralization. During the quarter,
drilling there has returned significant intercepts of 0.99 opt Au/10ft; 2.36
opt/11ft; 0.74 opt/21 ft; 0.39 opt/14 ft; 0.44 opt/6 ft and 0.74 opt/6 ft,
demonstrating that the structures are mineralized and continuous. Drilling in
the Vera South and nearby areas continues.
A mineral resource update for the total Pajingo joint venture was received
in September, which incorporates the inferred resources from Vera South totaling
1,167,000 tons @ 0.44 opt Au or about 515,000 ounces of contained gold. This
puts the property-wide resource total in all categories at 4,600,000 tons @ 0.40
opt Au or 1,840,000 ounces of contained gold, which includes proven and probable
reserves (as of 6/98) of approximately 1,113,000 tons @ 0.32 opt, or about
360,000 ounces of contained gold.
On the Mampon prospect on the DUNKWA joint venture, located in Ghana,
where BMG can earn a 65% interest, work during the third quarter remained
focused on the Mampon target.
<PAGE>
Twelve core holes have been completed on the Mampon prospect this year and
mineralization was intersected in all twelve holes, demonstrating the uniformity
and continuity of the structure in both strike and dip. However, only three of
the twelve holes on the Main zone returned economic grades.
Work at Dunkwa also centered on advancing several other known anomalies,
primarily within the Forest Reserve, to drill target status. During the fourth
quarter several of these anomalies will be tested with 65-70 RC holes (about
16,000 ft), with most anomalies and drill holes located within the Forest
Reserve north and south of Mampon. A smaller number of holes are slated for the
Mansi West prospect where coincident high gold-arsenic soil values outline a
strong linear anomaly. The results of this and other ongoing work will largely
dictate the scope and direction of further work at Dunkwa.
OTHER ACTIVITIES
In addition, the Company announced today that its Board of Directors has
approved amendment of its shareholder rights plan, to extend the term of the
plan for an additional 10 years, until November 10, 2008. In connection with the
extension, the Board approved amending the plan so that it will not be triggered
solely by the acquisition by a single person of 20% or more of BMG's shares from
the Company's current 28% shareholder, Noranda Inc. or from the first person to
whom Noranda has sold such a block of shares.
The United States Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for certain forward-looking statements. Operating, exploration and
financial data, and other statements in this document, are based on information
that the Company believes reasonable, but involve significant uncertainties as
to future gold prices, costs, ore grades, mining and processing conditions, and
regulatory and permitting matters. Actual results and timetables could vary
significantly from the estimates presented. Also refer to the Cautionary
Statement contained in the Company's Form 10-K and 10-Q for the most recent
reporting periods.
####
<PAGE>
<TABLE>
<CAPTION>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three months ended Nine months ended
September 30 September 30
-------------------- -------------------
US$ MILLIONS, EXCEPT PER SHARE AMOUNTS 1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales ........................................... $ 70.0 $ 90.2 $ 217.2 $ 257.9
-------- -------- -------- --------
Costs and expenses
Production costs ............................... 39.2 61.4 122.6 168.6
Depreciation, depletion and amortization ....... 19.9 19.7 62.4 56.0
Exploration, evaluation & other lease costs, net 3.5 5.8 16.3 17.3
Merger expense ................................. -- -- -- 2.3
General and administrative expenses ............ 3.7 2.8 11.1 10.9
-------- -------- -------- --------
Total costs and expenses ................. 66.3 89.7 212.4 255.1
-------- -------- -------- --------
Operating income ................................ 3.7 0.5 4.8 2.8
Interest expense ............................... (4.5) (3.0) (13.9) (9.0)
Interest income ................................ 2.7 0.9 8.7 4.1
Equity in losses of equity investee ............ (1.8) -- (4.5) --
Foreign currency exchange loss ................. (7.2) (0.3) (12.6) (0.4)
Other income (expense), net .................... (0.2) 2.0 0.2 5.2
-------- -------- -------- --------
Income (loss) before income taxes and
Minority interest ............................. (7.3) 0.1 (17.3) 2.7
Income tax benefit ............................. (1.8) (24.9) (5.4) (17.6)
Mining taxes ................................... 2.2 0.6 5.4 4.6
Minority interest in net income ................ -- (0.3) (1.3) (1.9)
-------- -------- -------- --------
Income (loss) before cumulative effect of
Accounting change ............................. (7.7) 24.1 (18.6) 13.8
Cumulative effect of accounting change ......... -- -- -- (3.7)
-------- -------- -------- --------
Net income (loss) ............................... (7.7) 24.1 (18.6) 10.1
Preferred dividends ......................... 1.9 1.9 5.6 5.6
-------- -------- -------- --------
Net income (loss) to common shares .............. $ (9.6) $ 22.2 $ (24.2) $ 4.5
======== ======== ======== ========
Earnings (loss) per common share
Basic .......................................... $ (.04) $ .10 $ (.11) $ .02
======== ======== ======== ========
Diluted ........................................ $ (.04) $ .09 $ (.11) $ .02
======== ======== ======== ========
Dividends per common share
$ .025 $ .025 $ .05 $ .05
======== ======== ======== ========
Average common shares outstanding for
earnings (loss) per share purposes
Basic .......................................... 229.8 229.7 229.8 229.7
======== ======== ======== ========
Diluted ........................................ 229.8 245.6 229.8 245.6
======== ======== ======== ========
</TABLE>
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
September 30, December 31,
1998 1997
US$ millions -------- --------
Assets
(Unaudited)
Current assets
Cash and cash equivalents .................... $ 193.2 $ 185.0
Restricted cash .............................. 9.2 17.7
Accounts and notes receivable ................ 25.4 33.0
Inventories .................................. 10.3 8.3
Materials and supplies, at average cost ...... 24.2 25.4
Assets held for sale ......................... -- 42.5
Other current assets ......................... 8.2 12.1
-------- --------
Total current assets ...................... 270.5 324.0
Investments .................................. 261.6 255.2
Property, plant and equipment, net ........... 444.3 489.3
Other assets ................................. 21.2 24.7
-------- --------
Total assets .................................... $ 997.6 $1,093.2
======== ========
Liabilities and Shareholders' Equity
Current liabilities
Short-term borrowings ........................ $ -- $ 4.9
Current maturities of long-term debt ......... 37.6 44.0
Accounts payable ............................. 14.2 24.0
Income and mining taxes payable .............. 21.7 10.1
Other current liabilities .................... 14.5 23.1
-------- --------
Total current liabilities ................. 88.0 106.1
Long-term debt ............................... 217.1 241.0
Deferred income and mining taxes ............. 61.8 84.1
Other liabilities ............................ 48.6 48.3
Total liabilities ......................... 415.5 479.5
Minority interest ............................ 108.1 107.7
Shareholders' equity ......................... 474.0 506.0
-------- --------
Total liabilities and shareholders' equity ...... $ 997.6 $1,093.2
======== ========
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30
US$ MILLIONS 1998 1997
------ ------
Cash flows from operating activities
Net income (loss) ..................................... $(18.6) $ 10.1
Adjustments to reconcile net income (loss) to cash
flows from operating activities:
Depreciation, depletion and amortization ........... 62.4 56.0
Deferred income taxes .............................. (16.8) (32.8)
Foreign currency exchange loss ..................... 12.6 0.4
Equity in losses of equity investee ................ 4.5 --
Cumulative effect of accounting change ............. -- 3.7
Change in working capital accounts, net ............ 13.3 3.1
Other, net ......................................... 4.7 4.8
------ ------
Net cash flows provided by operating activities .......... 62.1 45.3
------ ------
Cash flows from investing activities
Capital expenditures ................................... (37.9) (48.2)
Investment in Lihir .................................... (11.5) --
New World settlement, net .............................. 34.9 --
Other, net ............................................. 3.3 (0.5)
------ ------
Net cash flows used in investing activities .............. (11.2) (48.7)
------ ------
Cash flows from financing activities
Cash proceeds from borrowings .......................... -- 162.8
Debt repayments ........................................ (30.0) (17.9)
Decrease in short-term borrowings ...................... (4.9) (12.5)
Cash dividend payments ................................. (17.1) (17.1)
Decrease in restricted cash ............................ 8.7 0.4
Other, net ............................................. 0.3 0.7
------ ------
Net cash flows used in financing activities .............. (43.0) 116.4
------ ------
Effect of exchange rate changes on cash and cash
equivalents .............................................. 0.3 (5.2)
------ ------
Net increase in cash and cash equivalents ................ 8.2 107.8
Cash and cash equivalents at beginning of period ......... 185.0 94.0
------ ------
Cash and cash equivalents at end of period ............... $193.2 $201.8
====== ======
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION
OPERATING DATA (Unaudited) (1)
(US$, all production data reflects BMG attributable interests)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
----------- -----------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
GOLDEN GIANT
Gold recovered (000s oz) ....................... 103 85 293 262
Silver recovered (000s oz) ..................... 6 4 23 12
- -------------------------------------------------------------------------------------
Cost per Gold Ounce Sold
Cash production costs .......................... $105 $130 $115 $140
Depreciation, depletion and amortization ....... 62 64 67 65
Reclamation and mine closure costs ............. 4 4 4 4
Total production costs ......................... $171 $198 $186 $209
- -------------------------------------------------------------------------------------
KORI KOLLO (88% Interest)
Gold recovered (000s oz) ....................... 73 73 221 207
Silver recovered (000s oz) ..................... 205 180 650 561
- -------------------------------------------------------------------------------------
Cost per Gold Ounce Sold (2)
Cash production costs .......................... $185 $197 $179 $196
Depreciation, depletion and amortization ....... 128 121 130 122
Reclamation and mine closure costs ............. 11 7 11 8
Total production costs ......................... $324 $325 $320 $326
- -------------------------------------------------------------------------------------
HOLLOWAY (84.65% Interest)
Gold recovered (000s oz) ........................ 20 13 59 42
- -------------------------------------------------------------------------------------
Cost per Gold Ounce Sold
Cash production costs .......................... $199 $329 $228 $332
Depreciation, depletion and amortization ....... 108 123 114 119
Reclamation and mine closure costs ............. 2 2 2 2
Total production costs ......................... $309 $454 $344 $453
- -------------------------------------------------------------------------------------
BATTLE MOUNTAIN COMPLEX
Gold recovered (000s oz) ....................... 8 20 32 59
Silver recovered (000s oz) ..................... 22 34 67 106
- -------------------------------------------------------------------------------------
Cost per Gold Ounce Sold
Cash production costs .......................... $279 $269 $253 $274
Depreciation, depletion and amortization ....... 64 41 46 37
Reclamation and mine closure costs ............. -- 45 -- 44
Total production costs ......................... $343 $355 $299 $355
- -------------------------------------------------------------------------------------
</TABLE>
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION
OPERATING DATA (Unaudited) (1)
(US$, all production data reflects BMG attributable interests)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------ ------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C>
LIHIR (8.65%) Interest (3)
Gold recovered (000s oz) ................ 11 -- 34 --
- ------------------------------------------------------------------------------------
Cost per Gold Ounce Sold
Cash production costs .................. $ 232 -- $ 204 --
Depreciation, depletion and amortization 145 -- 177 --
Total production costs ................. $ 377 -- $ 381 --
- ------------------------------------------------------------------------------------
VERA/NANCY (50% Interest) (3)
Gold recovered (000s oz) ............... 10 8 35 8
Silver recovered (000s oz) ............. 9 10 29 10
- ------------------------------------------------------------------------------------
Cost per Gold Ounce Sold
Cash production costs .................. $ 151 $ 181 $ 137 $ 181
Depreciation, depletion and amortization 32 29 30 29
Reclamation and mine closure costs ..... 1 2 1 2
Total production costs ................. $ 184 $ 212 $ 168 $ 212
- ------------------------------------------------------------------------------------
SAN CRISTOBAL (50.5% Interest)
Gold recovered (000s oz) ............... 4 10 16 27
Silver recovered (000s oz) ............. 7 21 30 58
- ------------------------------------------------------------------------------------
Cost per Gold Ounce Sold
Cash production costs (4) .............. $ 134 $ 433 $ 158 $ 404
Depreciation, depletion and amortization 38 68 75 54
Reclamation and mine closure costs ..... -- 2 -- 8
Total production costs ................. $ 172 $ 503 $ 233 $ 466
- ------------------------------------------------------------------------------------
RED DOME (50.5% Interest) (5)
Gold recovered (000s oz) ............... -- 4 -- 24
Silver recovered (000s oz) ............. -- 82 -- 162
Copper recovered (000s lb) ............. -- 2,485 -- 3,702
- ------------------------------------------------------------------------------------
Cost per Gold Ounce Sold
Cash production costs .................. -- $ 225 -- $ 239
Depreciation, depletion and amortization -- 31 -- 20
Reclamation and mine closure costs ..... -- 15 -- 13
Total production costs ................. -- $ 271 -- $ 272
- ------------------------------------------------------------------------------------
</TABLE>
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION
OPERATING DATA (Unaudited) (1)
(US$, all production data reflects BMG attributable interests)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------ ------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C>
SILIDOR (55% Interest) (5)
Gold recovered (000s oz) ................ -- 1 -- 10
- -----------------------------------------------------------------------------------------
Cost Per Gold Ounce Sold
Cash production costs .................. -- $ 239 -- $ 318
Depreciation, depletion and amortization -- -- -- 39
Reclamation and mine closure costs ..... -- -- -- 5
Total production costs ................. -- $ 239 -- $ 362
- -----------------------------------------------------------------------------------------
AGGREGATE DATA
Gold recovered BMG share (000s oz) ...... 229 214 690 639
Gold sold BMG share (000s oz) ........... 230 221 689 637
Gold recovered (000s oz) ................ 253 237 769 717
Gold sold (000s oz) ..................... 254 251 768 714
Average price per oz realized .............. $ 299 $ 332 $ 306 $ 346
- -----------------------------------------------------------------------------------------
Silver recovered BMG share (000s oz) .... 249 331 799 908
Silver sold BMG share (000s oz) ......... 253 343 800 848
Silver recovered (000s oz) .............. 283 456 917 1,201
Silver sold (000s oz) ................... 290 485 920 1,087
Average price per oz realized .............. $ 5.19 $ 4.43 $ 5.61 $ 4.75
- -----------------------------------------------------------------------------------------
Weighted Average Cost per Gold Ounce Sold
Cash production costs .................. $ 153 $ 197 $ 158 $ 201
Depreciation, depletion and amortization 90 80 94 82
Reclamation and mine closure costs ..... 5 9 5 9
Total production costs ................. $ 248 $ 286 $ 257 $ 292
- -----------------------------------------------------------------------------------------
</TABLE>
(1)Cash production costs are presented in accordance with guidelines
established by The Gold Institute. In addition to mining, milling and plant
level general and administrative expenses, cash production costs include
royalties, freight, smelting costs and allowances, and production taxes.
Credits for by-product silver and copper are offset against these cash
production costs. This standard also provides for reporting on a cost per
gold ounce basis, rather than cost per equivalent gold ounce.
(2)Royalties paid to the Bolivian government for the Kori Kollo mine are
treated as income tax for per ounce cost purposes and therefore are not
included in these cost calculations.
(3)Production started at Vera/Nancy and at Lihir during the third and fourth
quarters of 1997, respectively.
(4)Includes net deferred stripping costs of $133 and $6 per ounce for the three
and nine month periods ended September 30, 1997, respectively, and deferred
stripping costs of $36 per ounce for the nine months ended September 30,
1998.
(5)Production ceased at Silidor and at Red Dome during the third and fourth
quarters of 1997, respectively.
