<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 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, April 30, 2000: 131,526,469. In addition, as of such date,
there were outstanding 98,359,948 Exchangeable Shares of Battle Mountain Canada
Ltd. which are exchangeable at any time into Common Stock on a one-for-one
basis, entitle their holders to dividend and other rights economically
equivalent to those of the Common Stock, and through a voting trust, vote at
meetings of stockholders of the Registrant.
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
INDEX
Page
Part I. Financial Information (Unaudited) ----
Condensed Consolidated Statement of Operations
for the three and nine months ended September 30, 1999 and 1998 2
Condensed Consolidated Balance Sheet
at September 30, 1999 and December 31, 1998 3
Condensed Consolidated Statement of Cash Flows
for the nine months ended September 30, 1999 and 1998 4
Notes to Condensed Consolidated Financial Statements 5
Supplemental Information - Operating Data 13
Management's Discussion and Analysis of Financial Condition
and Results of Operations 15
Quantitative and Qualitative Disclosures about Market Risk 20
Part II. Other Information 20
RESTATEMENT
After issuing Battle Mountain's 1999 financial statements and filing the Form
10-K with the Securities and Exchange Commission, following extensive
discussion with its independent accountants, management determined it was
necessary to revise the financial statement presentation of Battle Mountain's
former interest in Niugini Mining Limited. In 1998, Battle Mountain resolved
to dispose of its 50.45% equity interest in Niugini Mining Limited and
deconsolidated the subsidiary, classifying it as an asset held for sale.
However, in accordance with provisions of Statement of Financial Accounting
Standards No. 94, "Consolidation of all Majority-Owned Subsidiaries," Battle
Mountain's 1999 and 1998 financial statements and related disclosures are
restated from amounts previously reported to properly reflect the full
consolidation of Battle Mountain's interest in Niugini Mining.
For the purpose of this Form 10-Q/A, Battle Mountain Gold has amended and
restated in its entirety the Form 10-Q for the quarterly period ended
September 30, 1999 originally filed. In order to preserve the nature and
character of the disclosures as of November 15, 1999, the date on which the
1999 Form 10-Q for the quarterly period ended September 30, 1999 was
originally filed, no attempt has been made in this Form 10-Q/A to modify or
update such disclosures except as required to reflect the effects of the
restatement.
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
-------------------- ----------------------
MILLIONS, EXCEPT PER SHARE AMOUNTS 1999 1998 1999 1998
- ----------------------------------- --------- --------- --------- ---------
(as restated) (as restated)
<S> <C> <C> <C> <C>
Sales $ 54.6 $ 70.0 $ 161.8 $ 217.2
-------- ------- -------- --------
Costs and expenses
Production costs 35.8 39.2 107.4 122.6
Depreciation, depletion and amortization 16.6 19.9 46.8 62.4
Exploration, evaluation & other lease costs, net 3.9 3.5 13.1 16.3
General and administrative expenses 4.5 3.7 11.9 11.1
Environmental remediation charges (Note 3) 9.5 - 9.5 -
-------- ------- -------- --------
Total costs and expenses 70.3 66.3 188.7 212.4
-------- ------- -------- --------
Operating income (loss) (15.7) 3.7 (26.9) 4.8
Interest expense (3.7) (4.5) (11.2) (13.9)
Interest income 1.6 2.7 5.2 8.7
Foreign currency exchange gain (loss), net 0.1 (7.2) 6.9 (12.6)
Minority interest in net loss (income) - - 4.0 (1.3)
Equity in income (losses) and impairment of Lihir (Note 2) 0.2 (1.8) (26.2) (4.5)
Other income (expense), net 0.5 (0.2) 1.3 0.2
-------- ------- -------- --------
Loss before income taxes (17.0) (7.3) (46.9) (18.6)
Income tax benefit 1.0 1.8 3.2 5.4
Mining tax expense (2.1) (2.2) (2.4) (5.4)
-------- ------- -------- --------
Net loss (18.1) (7.7) (46.1) (18.6)
Preferred dividends 1.9 1.9 5.6 5.6
-------- ------- -------- --------
Net loss to common shares $ (20.0) $ (9.6) $ (51.7) $ (24.2)
======== ======= ======== ========
Loss per common share - basic and diluted (Note 4) $ (.09) $ (.04) $ (.22) $ (.11)
======== ======= ======== ========
Dividends per common share $ - $ .025 $ - $ .050
======== ======= ======== ========
Average common shares outstanding for loss
per share purposes - basic and diluted 229.9 229.8 229.9 229.8
======== ======= ======== ========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
2
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
MILLIONS (as restated) (as restated)
- --------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 92.0 $197.2
Restricted cash 0.4 7.7
Accounts and notes receivable 12.6 14.8
Product inventories 7.9 8.9
Materials and supplies, at average cost 25.4 23.6
Other current assets 3.2 2.7
-------- -------
Total current assets 141.5 254.9
Investments (Notes 2 and 6) 133.9 168.7
Property, plant and equipment, net 339.5 341.9
Restricted cash (Note 7) 40.0 0.7
Other assets 14.9 20.4
-------- -------
Total assets $669.8 $786.6
======== =======
Liabilities and Shareholders' Equity
Current liabilities
Short-term borrowings $ - $ 14.9
Current maturities of long-term debt (Note 7) 2.7 37.5
Debt due upon disposal of Lihir (Note 7) 30.0 -
Accounts payable 14.8 14.5
Income and mining taxes payable 13.6 23.9
Other current liabilities 16.2 14.9
-------- -------
Total current liabilities 77.3 105.7
Long-term debt (Note 7) 176.8 203.6
Deferred income and mining taxes 67.6 72.0
Other liabilities (Note 3) 61.6 50.3
-------- -------
Total liabilities 383.3 431.6
Minority interest 93.3 107.3
Commitments and contingencies (Notes 3, 8 and 11) - -
Shareholders' equity (Note 5) 193.2 247.7
-------- -------
Total liabilities and shareholders' equity $669.8 $786.6
======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended
September 30
---------------------------
MILLIONS 1999 1998
- -------- ------------- ------------
(as restated)
<S> <C> <C>
Cash flows from operating activities
Net loss $ (46.1) $ (18.6)
Adjustments to reconcile net loss to cash
flows from operating activities:
Depreciation, depletion and amortization 46.8 62.4
Environmental remediation charges (Note 3) 9.5 -
Deferred income taxes (2.8) (16.8)
Foreign currency exchange loss (gain), net (6.9) 12.6
Equity in losses and impairment of Lihir (Note 2) 26.2 4.5
Change in working capital accounts, net (5.0) 13.3
Other, net (5.2) 4.7
-------- --------
Net cash flows provided by operating activities 16.5 62.1
-------- --------
Cash flows from investing activities
Capital expenditures (37.3) (37.9)
Crown Butte liquidating dividend to minority shareholders (11.0) -
Proceeds from sale of assets 11.3 1.9
New World settlement - 34.9
Investment in Lihir Gold Limited - (11.5)
Other, net (2.9) 1.4
-------- --------
Net cash flows used in investing activities (39.9) (11.2)
-------- --------
Cash flows from financing activities
Debt repayments (30.8) (30.0)
Decrease in short-term borrowings (14.9) (4.9)
Cash dividend payments (5.6) (17.1)
Decrease (increase) in restricted cash (32.0) 8.7
Other, net 0.1 0.3
-------- --------
Net cash flows used in financing activities (83.2) (43.0)
-------- --------
Effect of exchange rate changes on cash and cash equivalents 1.4 0.3
-------- --------
Net increase (decrease) in cash and cash equivalents (105.2) 8.2
Cash and cash equivalents at beginning of period 197.2 185.0
-------- --------
Cash and cash equivalents at end of period $ 92.0 $ 193.2
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
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 normal recurring adjustments which
are, in the opinion of the management of Battle Mountain Gold Company
("BMG"), necessary for a fair presentation. 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 include the accounts of BMG and its wholly-owned and
majority-owned subsidiaries ("Battle Mountain Gold") and should be read in
conjunction with the consolidated financial statements which are included in
Battle Mountain Gold's Annual Report on Form 10-K for the year ended December
31, 1998. Certain amounts for prior periods may have been reclassified in
order to conform to the current reporting presentation.
After issuing Battle Mountain's 1999 financial statements and filing the Form
10-K with the Securities and Exchange Commission, following extensive discussion
with its independent accountants, management determined it was necessary to
revise the financial statement presentation of Battle Mountain's former interest
in Niugini Mining Limited. In 1998, Battle Mountain resolved to dispose of its
50.45% equity interest in Niugini Mining Limited and deconsolidated the
subsidiary, classifying it as an asset held for sale. However, in accordance
with provisions of Statement of Financial Accounting Standards No. 94,
"Consolidation of all Majority-Owned Subsidiaries," Battle Mountain's 1999 and
1998 financial statements and related disclosures are restated from amounts
previously reported to properly reflect the full consolidation of Battle
Mountain's interest in Niugini Mining. See Note 12 for the principal effects of
this restatement.
Note 2. Niugini Mining Limited
On October 6, 1999, Lihir Gold Limited and Niugini Mining announced a
proposed plan of arrangement under which Lihir would acquire Niugini Mining.
Under the agreement, Niugini Mining shareholders would receive one share of
Lihir for each share of Lihir currently held by Niugini Mining, together with
one additional share of Lihir for each A$1.45 of Niugini Mining's net cash
balance at the effective date of the transaction. Under the terms of the
agreement, Niugini Mining's cash balance is subject to adjustment for, among
other items, the disposal of the San Cristobal mine. It is estimated that the
transaction, subject to shareholder and regulatory approvals, would close in
the first quarter of 2000. Battle Mountain Gold has agreed to hold the Lihir
shares to be acquired in this transaction for a 90-day period and intends to
classify those shares acquired as marketable securities in current assets.
In the first half of 1999, Battle Mountain Gold recorded $23.4 million of
impairment losses ($20.2 million net of minority interest) related to Niugini
Mining's investment in Lihir as a result of decreases in the market value of
the Lihir stock. These decreases in value were considered to be other than
temporary decreases.
Note 3. Environmental Matters
Battle Mountain Gold's Annual Report on Form 10-K for the year ended December
31, 1998 contained a description of closure and reclamation efforts with
respect to the San Luis mine in Colorado, which ceased operations in November
1996. As part of those efforts, Battle Mountain Gold voluntarily partially
backfilled the San Luis West Pit. As water percolates through the freshly
backfilled rock, the water picks up certain naturally occurring constituents.
The elevated levels of these constituents do not pose a risk to human health
or the environment.
On August 20, 1999 the Colorado Department of Public Health and the
Environment issued a Notice of Violation and Cease and Desist Order to Battle
Mountain Gold, alleging discharges at the San Luis mine to waters not
permitted under the Colorado Water Quality Control Act. Battle Mountain Gold
has filed an Answer to the Notice denying that such a violation has occurred.
The Notice requires Battle Mountain Gold to take a number of steps that the
Department of Public Health believes necessary to attain compliance with the
Water Quality Control Act. These steps include the submittal of a permit
application, a monitoring plan and a response plan. Battle Mountain Gold has
made all submittals required by the Notice and has commenced extensive
response activities.
5
<PAGE>
It is not possible to predict the nature or scope of any further action that
might be taken by regulatory authorities, which actions could include seeking
injunctive relief, mandating the posting of financial assurance, requiring
further on-site response actions and the imposition of monetary penalties.
Battle Mountain Gold accrued $9.5 million in the third quarter of 1999 as
other long-term liabilities based upon Battle Mountain Gold's current best
estimate of costs to address long-term water-quality issues at the San Luis
property. It is reasonably possible that this estimate may change in future
reporting periods as further information becomes available.
Note 4. Loss per Common Share
BMG's outstanding common stock options, convertible debentures and
convertible preferred stock were anti-dilutive and not included in the
calculations of basic and diluted loss per share amounts presented on the
condensed consolidated statement of operations.
Note 5. Comprehensive Loss
Battle Mountain Gold's comprehensive loss follows:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
--------------------- ---------------------
MILLIONS 1999 1998 1999 1998
- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net loss $ (18.1) $ (7.7) $ (46.1) $ (18.6)
Foreign currency translation adjustments (2.1) 4.4 (4.1) 4.6
--------- --------- --------- ---------
Comprehensive loss $ (20.2) $ (3.3) $ (50.2) $ (14.0)
========= ========= ========= =========
</TABLE>
Note 6. Investments
Battle Mountain Gold sold, at book value, its investment in First Toronto
Investments Limited for $10.2 million in the third quarter of 1999.
Note 7. Debt
The Canadian Imperial Bank of Commerce ("CIBC") loan agreement was
restructured effective October 1, 1999. Under the terms of the new agreement,
the $104.4 million outstanding loan is segregated into three "tranches": a
$40.0 million tranche due December 31, 2003, a $30.0 million tranche due the
earlier of the date of the receipt of cash from the sale of Battle Mountain
Gold's investment in Niugini Mining or December 31, 2003, and a $34.4 million
tranche payable in 14 equal quarterly installments beginning September 30,
2000.
Under the terms of the agreement, Battle Mountain Gold established a $40.0
million restricted cash collateral account and granted CIBC certain security
interests in Battle Mountain Canada Ltd.'s assets, including its investment
in Niugini Mining. The loan agreement requires Battle Mountain Canada to meet
certain financial covenants which include maintenance covenants relating to
the market value of Niugini Mining, gold reserves and the present value of
cash flows to the value of the $34.4 million tranche, as well as certain
restrictions on, among other things, cash transfers, expenditures, additional
debt, liens and the disposition of assets.
6
<PAGE>
Note 8. Gold Sales and Hedging
Battle Mountain Gold's results of operations are affected significantly by
the market price of gold, which it cannot control. During the third quarter
of 1999, Battle Mountain Gold modified its hedging policy. The purpose of the
current hedging policy is to minimize Battle Mountain Gold's exposure to
fluctuating gold prices by assuring adequate cash inflows to cover a portion
of future cash outflows. Battle Mountain Gold does not use derivative
financial instruments for trading purposes.
The hedging policy allows the use of various derivative financial
instruments, including forward sales contracts and options, and limits hedges
put in place to a maximum of 50% of the following five years' planned
operating mine gold production. No more than 300,000 ounces of new gold
hedges may be established in any quarter. Gold sold and to be delivered
within three months is not counted against the limit.
Gold option contracts outstanding at September 30, 1999 were as follows:
<TABLE>
<CAPTION>
Total or
1999 2000 2001 2002 2003 Average
------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Call options written:
Ounces 15,000 50,000 50,000 50,000 50,000 215,000
Average price per ounce $ 320 $ 338 $ 338 $ 338 $ 338 $ 336
Put options owned:
Ounces - 50,000 50,000 50,000 50,000 200,000
Average price per ounce - $ 285 $ 285 $ 285 $ 285 $ 285
</TABLE>
No option contracts were delivered against or financially settled during the
nine months ended September 30, 1999 and 1998. The estimated fair value of
call options written and put options owned at September 30, 1999 was $3.1
million and $3.8 million, respectively, for a net estimated fair value of
$0.7 million.
Pursuant to pricing provisions as set forth in certain customer forward sales
contracts as of September 30, 1999, Battle Mountain Canada had committed to
deliver 98,600 ounces of gold valued at approximately $25.6 million at
various prices determined during the third quarter of 1999. All such
contracts mature by January 31, 2000. The average price of gold sold under
these commitments was $260 per ounce. From time to time, Battle Mountain
Canada also enters into gold leasing transactions prior to delivery of gold
held in inventory related to these commitments. Battle Mountain Gold, at
times, is a party to these leasing transactions and will sell the leased gold
into the spot market. Whenever a spot sale is made, a forward purchase
contract is entered into to assure delivery of the gold at the end of the
lease.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This standard was amended by SFAS No.
137, which deferred the effective date of implementation to the first quarter
of fiscal years beginning after June 15, 2000. SFAS No. 133 requires
companies to record derivative financial instruments on the balance sheet as
assets or liabilities, as appropriate, at fair value. Gains or losses
resulting from changes in the fair values of those derivatives are accounted
for depending on the use of the derivative and whether it qualifies for hedge
accounting. Battle Mountain Gold is currently evaluating the impact that
implementation of this standard may have on its consolidated results of
operations, financial position and liquidity.
7
<PAGE>
Note 9. Summarized Financial Information
The following summarized information of Battle Mountain Canada is presented
in accordance with the Securities and Exchange Commission's reporting
requirements as they pertain to the Battle Mountain Canada Exchangeable
Shares:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
---------------------- ----------------------
MILLIONS 1999 1998 1999 1998
- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C>
Sales $ 31.9 $ 38.2 $ 88.9 $ 115.7
Costs and expenses 31.2 28.3 89.1 94.3
-------- -------- -------- -------
Operating income (loss) $ 0.7 $ 9.9 $ (0.2) $ 21.4
======== ======== ======== =======
Net loss $ (1.0) $ (1.6) $ (18.4) $ (4.2)
======== ======== ======== =======
</TABLE>
Summarized financial information of Lihir Gold Limited follows:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
----------------- -----------------
MILLIONS 1999 1998 1999 1998
- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Sales $ 66.3 $ 43.3 $163.6 $ 134.2
Costs and expenses 51.6 36.8 144.3 106.0
------- ------- ------- -------
Operating income (loss) $ 14.7 $ 6.5 $ 19.3 $ 28.2
======= ======= ======= =======
Net loss $ 4.5 $ (0.7) $ (2.1) $ 3.4
======= ======= ======= =======
</TABLE>
8
<PAGE>
Note 10. Geographic and Segment Information
Financial information by segment for the applicable periods presented in the
condensed consolidated financial statements follows:
<TABLE>
<CAPTION>
Golden Kori Battle Vera / Crown Corp &
MILLIONS Total Giant Kollo Holloway Mountain Nancy Jewel Other
- -------- ------- ------- ------- ------- -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THREE MONTHS ENDED SEPT. 30, 1999
Gross revenues $ 54.6 $ 25.1 $ 18.8 $ 6.8 $ - $ 3.9 $ - $ -
Operating expenses 60.8 18.1 22.3 9.9 (0.1) 2.4 - 8.2
Environmental remediation 9.5 - - - - - - 9.5
------- ------- ------- ------- -------- ------ ------- -------
Operating income (loss) (15.7) $ 7.0 $ (3.5) $ (3.1) $ 0.1 $ 1.5 $ - $(17.7)
======= ======= ======= ======== ====== ======= =======
Equity in income and impairment
of Lihir 0.2
Other expenses, net (1.5)
-------
Loss before income taxes $(17.0)
=======
THREE MONTHS ENDED SEPT. 30, 1998
Gross revenues $ 70.0 $ 30.1 $ 24.9 $ 5.8 $ 3.6 $ 3.3 $ - $ 2.3
Operating expenses 66.3 17.6 28.3 6.3 3.0 2.2 - 8.9
------- ------- ------- ------- -------- ------ ------- -------
Operating income (loss) 3.7 $ 12.5 $ (3.4) $ (0.5) $ 0.6 $ 1.1 $ - $ (6.6)
======= ======= ======= ======== ====== ======= =======
Equity in losses and impairment
of Lihir (1.8)
Other expenses, net (9.2)
-------
Loss before income taxes $ (7.3)
=======
NINE MONTHS ENDED SEPT. 30, 1999
Gross revenues $161.8 $ 69.9 $ 60.9 $ 19.0 $ - $ 12.0 $ - $ -
Operating expenses 179.2 56.5 67.2 24.9 (0.3) 7.0 - 23.9
Environmental remediation 9.5 - - - - - - 9.5
------- ------- ------- ------- -------- ------ ------- -------
Operating income (loss) (26.9) $ 13.4 $ (6.3) $ (5.9) $ 0.3 $ 5.0 $ - $(33.4)
======= ======= ======= ======== ====== ======= =======
Equity in losses and impairment
of Lihir (26.2)
Other income, net 1.4
-------
Loss before income taxes $(51.7)
=======
NINE MONTHS ENDED SEPT. 30, 1998
Gross revenues $217.2 $ 88.1 $ 78.0 $ 17.0 $ 12.9 $ 10.6 $ - $ 10.6
Operating expenses 212.4 54.6 86.4 20.1 9.6 6.2 - 35.5
------- ------- ------- ------- -------- ------ ------- -------
Operating income (loss) 4.8 $ 33.5 $ (8.4) $ (3.1) $ 3.3 $ 4.4 $ - $(24.9)
======= ======= ======= ======== ====== ======= =======
Equity in losses and impairment
of Lihir (4.5)
Other expenses, net (18.9)
-------
Loss before income taxes $(18.6)
=======
TOTAL ASSETS - SEPT. 30, 1999 $669.8 $126.2 $ 86.5 $ 76.5 $ 51.6 $ 31.4 $ 34.9 $262.7
======= ======= ======= ======= ======== ====== ======= =======
TOTAL ASSETS - DEC. 31, 1998 $786.6 $144.6 $107.9 $ 79.7 $ 42.4 $ 24.8 $ 31.8 $355.4
======= ======= ======= ======= ======== ====== ======= =======
</TABLE>
Note 11. Other Contingencies
See Part II - Other Information - "Legal Proceedings" for information concerning
significant legal proceedings of Battle Mountain Gold. In addition to the legal
proceedings described therein, Battle Mountain Gold is party to a number of
actions arising in the ordinary course of business. While the final outcome of
these actions cannot be predicted with certainty, Battle Mountain Gold believes
that the outcome of these actions will not have a material adverse effect on its
results of operations, financial condition or cash flows.
9
<PAGE>
Note 12. Restatement
After issuing Battle Mountain's 1999 financial statements and filing the Form
10-K with the Securities and Exchange Commission, following extensive discussion
with its independent accountants, management determined it was necessary to
revise the financial statement presentation of Battle Mountain's former interest
in Niugini Mining Limited. In 1998, Battle Mountain resolved to dispose of its
50.45% equity interest in Niugini Mining Limited and deconsolidated the
subsidiary, classifying it as an asset held for sale. However, in accordance
with provisions of Statement of Financial Accounting Standards No. 94,
"Consolidation of all Majority-Owned Subsidiaries," Battle Mountain's 1999 and
1998 financial statements and related disclosures are restated from amounts
previously reported to properly reflect the full consolidation of Battle
Mountain's interest in Niugini Mining.
The following sets forth the effects of the restatement on Battle Mountain's
accompanying consolidated statement of operations, balance sheet and statement
of cash flows:
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENT Three months ended Nine months ended
OF OPERATIONS (UNAUDITED) September 30, 1999 September 30, 1999
------------------ ------------------
As Previously As Previously
MILLIONS, EXCEPT PER SHARE AMOUNTS As Restated Reported As Restated Reported
---------------------------------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C>
Sales $ 54.6 $ 54.6 $ 161.8 $ 161.8
-------- -------- ------- -------
Costs and expenses
Production costs 35.8 36.1 107.4 109.0
Depreciation, depletion and amortization 16.6 16.6 46.8 46.8
Exploration, evaluation & other lease costs, net 3.9 3.9 13.1 13.1
General and administrative expenses 4.5 4.3 11.9 11.3
Environmental remediation charges 9.5 9.5 9.5 9.5
Loss (gain) related to assets held for sale - (6.6) - 13.3
-------- -------- ------- -------
Total costs and expenses 70.3 63.8 188.7 203.0
-------- -------- ------- -------
Operating loss (15.7) (9.2) (26.9) (41.2)
Interest expense (3.7) (3.7) (11.2) (11.2)
Interest income 1.6 0.9 5.2 3.3
Foreign currency exchange gain, net 0.1 0.1 6.9 6.9
Minority interest in net loss - 0.5 4.0 1.1
Equity in income (losses) and impairment of Lihir 0.2 - (26.2) -
Other income, net 0.5 0.4 1.3 0.9
-------- -------- ------- -------
Loss before income taxes (17.0) (11.0) (46.9) (40.2)
Income tax benefit 1.0 1.0 3.2 3.2
Mining tax expense (2.1) (2.1) (2.4) (2.4)
-------- -------- ------- -------
Net loss (18.1) (12.1) (46.1) (39.4)
Preferred dividends 1.9 1.9 5.6 5.6
-------- -------- ------- -------
Net loss to common shares $ (20.0) $ (14.0) $ (51.7) $ (45.0)
======== ======== ======= =======
Loss per common share - basic and diluted $ (.09) $ (.06) $ (.22) $ (.20)
======== ======== ======= =======
Average common shares outstanding for loss
per share purposes - basic and diluted 229.9 229.9 229.9 229.9
======== ======== ======= =======
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET September 30, 1999 December 31, 1998
(UNAUDITED) ------------------ -----------------
As As
Previously Previously
MILLIONS As Restated Reported As Restated Reported
- -------- ----------- -------- ----------- --------
ASSETS
<S> <C> <C> <C> <C>
Current assets
Cash and cash equivalents $ 92.0 $ 38.8 $ 197.2 $ 147.6
Restricted cash 0.4 0.4 7.7 7.7
Accounts and notes receivable, net 12.6 12.0 14.8 13.8
Product inventories 7.9 7.8 8.9 8.9
Materials and supplies, net 25.4 25.2 23.6 23.4
Assets held for sale - 95.0 - 108.3
Other current assets 3.2 3.2 2.7 2.7
--------- --------- --------- ---------
Total current assets 141.5 182.4 254.9 312.4
Investments 133.9 10.8 168.7 19.4
Property, plant and equipment, net 339.5 339.5 341.9 341.9
Restricted cash 40.0 40.0 0.7 -
Other assets 14.9 14.9 20.4 20.4
--------- --------- --------- ---------
Total Assets $ 669.8 $ 587.6 $ 786.6 $ 694.1
========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings $ - $ - $ 14.9 $ 14.9
Current maturities of long-term debt 2.7 2.7 37.5 37.0
Debt due upon disposal of Lihir 30.0 30.0 - -
Accounts payable 14.8 14.8 14.5 14.3
Income and mining taxes payable 13.6 13.6 23.9 23.9
Other current liabilities 16.2 14.3 14.9 12.9
--------- --------- --------- ---------
Total current liabilities 77.3 75.4 105.7 103.0
Long-term debt 176.8 176.8 203.6 203.6
Deferred income and mining taxes 67.6 67.6 72.0 72.0
Other liabilities 61.6 61.5 50.3 50.1
--------- --------- --------- ---------
Total Liabilities 383.3 381.3 431.6 428.7
Minority interest 93.3 6.4 107.3 17.7
Commitments and contingencies - - - -
Shareholders' equity 193.2 199.9 247.7 247.7
--------- --------- --------- ---------
Total Liabilities and Shareholders' Equity $ 669.8 $ 587.6 $ 786.6 $ 694.1
========= ========= ========= =========
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENT Nine months ended
OF CASH FLOWS (UNAUDITED) September 30, 1999
------------------
As Previously
MILLIONS As Restated Reported
-------- ----------- --------
<S> <C> <C>
Cash flows from operating activities
Net loss $ (46.1) $ (39.4)
Adjustments to reconcile net loss to cash
flows from operating activities:
Depreciation, depletion and amortization 46.8 46.8
Environmental remediation charges 9.5 9.5
Deferred income taxes (2.8) (2.8)
Foreign currency exchange gain, net (6.9) (6.9)
Loss related to assets held for sale - 13.3
Equity in losses and impairment of Lihir 26.2 -
Change in working capital accounts, net (5.0) (5.9)
Other, net (5.2) (1.0)
-------- -------
Net cash flows provided by operating activities 16.5 13.6
-------- -------
Cash flows from investing activities
Capital expenditures (37.3) (37.3)
Crown Butte liquidating dividend to minority shareholders (11.0) (11.0)
Proceeds from sale of assets 11.3 11.3
Other, net (2.9) (2.9)
-------- -------
Net cash flows used in investing activities (39.9) (39.9)
-------- -------
Cash flows from financing activities
Debt repayments (30.8) (30.8)
Decrease in short-term borrowings (14.9) (14.9)
Cash dividend payments (5.6) (5.6)
Increase in restricted cash (32.0) (32.7)
Other, net 0.1 0.1
-------- -------
Net cash flows used in financing activities (83.2) (83.9)
-------- -------
Effect of exchange rate changes on cash and cash equivalents 1.4 1.4
-------- -------
Net decrease in cash and cash equivalents (105.2) (108.8)
Cash and cash equivalents at beginning of period 197.2 147.6
-------- -------
Cash and cash equivalents at end of period $ 92.0 $ 38.8
======== ========
</TABLE>
12
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION - OPERATING DATA (Unaudited) (1)
(Production data reflects BMG attributable interests)
(Ounces in thousands)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
-------------------- --------------------
1999 1998 1999 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
GOLDEN GIANT
Gold ounces recovered 94 103 258 293
Silver ounces recovered 9 6 16 23
- -----------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $126 $106 $147 $115
Depreciation, depletion and amortization 64 62 65 67
Reclamation and mine closure costs 3 4 3 4
------ ------ ------ ------
Total production costs $193 $172 $215 $186
- -----------------------------------------------------------------------------------------------------
KORI KOLLO (88% Interest)
Gold ounces recovered 61 72 187 221
Silver ounces recovered 150 205 516 650
- -----------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced (2)
Cash production costs $196 $182 $191 $177
Depreciation, depletion and amortization 92 129 89 131
Reclamation and mine closure costs 11 11 11 11
------ ------ ------ ------
Total production costs $299 $322 $291 $319
- -----------------------------------------------------------------------------------------------------
HOLLOWAY (84.65% Interest)
Gold ounces recovered 28 20 71 59
- -----------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $162 $190 $188 $220
Depreciation, depletion and amortization 130 107 131 113
Reclamation and mine closure costs 2 2 2 2
------ ------ ------ ------
Total production costs $294 $299 $321 $335
- -----------------------------------------------------------------------------------------------------
VERA/NANCY (50% Interest)
Gold ounces recovered 15 10 45 35
Silver ounces recovered 11 9 35 29
- -----------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $112 $150 $116 $138
Depreciation, depletion and amortization 39 35 36 30
Reclamation and mine closure costs 2 2 1 1
------ ------ ------ ------
Total production costs $153 $187 $153 $169
- -----------------------------------------------------------------------------------------------------
OTHER (3)
Gold ounces recovered 23 82
Silver ounces recovered 29 97
- -----------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $259 $232
Depreciation, depletion and amortization 96 95
------ ------
Total production costs $355 $327
- -----------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION - OPERATING DATA (Unaudited) (1)
(Production data reflects BMG attributable interests)
(Ounces in thousands)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
------------------ -----------------
1999 1998 1999 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
AGGREGATE DATA
Gold ounces recovered - BMG share 198 229 561 690
Gold ounces sold - BMG share 195 230 558 689
Gold ounces recovered 207 253 587 769
Gold ounces sold 205 254 585 768
Average price per gold ounce realized $262 $299 $272 $306
- --------------------------------------------------------------------------------------------------------
Silver ounces recovered - BMG share 170 249 567 799
Silver ounces sold - BMG share 165 253 562 800
Silver ounces recovered 190 283 637 917
Silver ounces sold 184 290 631 920
Average price per silver ounce realized $5.26 $5.19 $5.20 $5.61
- --------------------------------------------------------------------------------------------------------
Weighted Average Cost per Gold Ounce Produced
Cash production costs $152 $155 $164 $159
Depreciation, depletion and amortization 80 90 79 93
Reclamation and mine closure costs 5 5 6 5
---- ---- ---- ----
Total production costs $237 $250 $249 $257
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Effective January 1, 1999, current and prior period production costs are
presented on an ounces-produced basis, versus an ounces-sold basis as
previously reported.
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. These guidelines also provide 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 calculations and are therefore not
included in these cost calculations.
(3) Production data for the Reona mine at the Battle Mountain Complex is not
presented for 1999 because it was placed on care and maintenance effective
January 1, 1999. Data for the Lihir and San Cristobal mines are not
included in 1999 as Battle Mountain Gold had made the decision to dispose
of its investment in Niugini Mining effective December 31, 1998.
14
<PAGE>
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
Battle Mountain Gold's Annual Report on Form 10-K for the year ended December
31, 1998 and the unaudited condensed consolidated financial statements and
notes preceding this discussion.
After issuing Battle Mountain's 1999 financial statements and filing the Form
10-K with the Securities and Exchange Commission, following extensive discussion
with its independent accountants, management determined it was necessary to
revise the financial statement presentation of Battle Mountain's former interest
in Niugini Mining Limited. In 1998, Battle Mountain resolved to dispose of its
50.45% equity interest in Niugini Mining Limited and deconsolidated the
subsidiary, classifying it as an asset held for sale. However, in accordance
with provisions of Statement of Financial Accounting Standards No. 94,
"Consolidation of all Majority-Owned Subsidiaries," Battle Mountain's 1999 and
1998 financial statements and related disclosures are restated from amounts
previously reported to properly reflect the full consolidation of Battle
Mountain's interest in Niugini Mining. See Note 12 for the principal effects of
this restatement.
OVERVIEW
Lower gold production, continued low gold prices and a nonrecurring
environmental remediation charge resulted in net losses of $20.0 million and
$51.7 million for the three and nine month periods ended September 30, 1999,
respectively. Foreign currency exchange gains and decreased depreciation,
production and exploration costs partially offset the impacts of these
unfavorable items. Impairment write-downs to the investment in Lihir during
the first six months of 1999 also impacted results of operations. Operating
cash flows declined in the first nine months of 1999 compared to 1998 due to
lower sales and gold prices and an increase in working capital. All of the
decrease in available cash during the first nine months of 1999 occurred in
the first six months of 1999, except for the $40.0 million reclassification
of cash to restricted cash in the third quarter of 1999 as a result of the
restructured loan agreement with CIBC.
LIQUIDITY AND CAPITAL RESOURCES
OPERATING ACTIVITIES. Battle Mountain Gold generated cash flows of $16.5
million from operating activities during the nine months ended September 30,
1999 compared with $62.1 million for the same period in 1998. The decrease
was primarily the result of lower gold prices and production, and increased
working capital primarily resulting from income tax payments made in 1999.
INVESTING ACTIVITIES. Capital expenditures totaled $37.3 million in the first
nine months of 1999 compared with $37.9 million during the same period in
1998. Capital expenditures in 1998 included $4.5 million of capitalized
interest paid related to Niugini Mining's investment in Lihir. Battle
Mountain Gold currently expects to invest approximately $49.0 million of
capital expenditures in 1999.
On October 6, 1999, Lihir and Niugini Mining announced a proposed plan of
arrangement under which Lihir would acquire Niugini Mining. See Note 2 of
Notes to Condensed Consolidated Financial Statements for further discussion.
Battle Mountain Gold sold the investment in First Toronto Investments Limited
for $10.2 million in July 1999. In March 1999, Crown Butte Resources Ltd.
paid an $11.0 million liquidating dividend to minority shareholders.
Battle Mountain Gold closed the sale of the New World project in August 1998
and received cash proceeds, net of related disbursements, of $34.9 million.
In May 1998, Niugini Mining increased its investment in Lihir by $11.5
million, which maintained Battle Mountain Gold's 8.65% attributable equity
interest in Lihir.
FINANCING ACTIVITIES. Battle Mountain Gold made $45.7 million of debt and
short-term borrowing repayments in the first nine months of 1999 compared
with $34.9 million in the same period in 1998. Cash dividends decreased from
$17.1 million to $5.6 million in the first nine months of 1999 as BMG
suspended the semi-annual common stock dividend in February 1999.
The Canadian Imperial Bank of Commerce loan agreement was restructured
effective October 1, 1999. Under the terms of the agreement, Battle Mountain
Gold established a $40.0 million restricted cash collateral account. See Note
7 of Notes to Condensed Consolidated Financial Statements for further
discussion.
15
<PAGE>
Battle Mountain Gold filed a shelf registration statement with the Securities
and Exchange Commission (the "SEC") on October 1, 1999, amended and declared
effective on November 1, 1999, for the issuance of up to $150.0 million of
debt and/or equity securities. As of the date of this report, no securities
have been issued nor does Battle Mountain Gold have any plans to issue any
securities under this registration statement at this time. Battle Mountain
Gold also has registration statements on file with the SEC and regulatory
authorities in Canada which qualify for sale the 65.2 million shares of BMG's
common stock effectively held by Noranda Inc. Battle Mountain Gold will not
receive proceeds from the sales of any shares sold under the latter
registration statements, should they occur.
CONCLUSION. Battle Mountain Gold believes we will be able to fund cash
requirements over the next twelve months through a combination of current
cash, future cash flows from operations, proceeds from potential asset sales
including Niugini Mining, and/or future debt or equity security issuances.
RESULTS OF OPERATIONS
Battle Mountain Gold recorded net losses to common shares of $20.0 million
($.09 per share) and $51.7 million ($.22 per share) for the three and nine
month periods ended September 30, 1999, respectively. This compares with
losses of $9.6 million ($.04 per share) and $24.2 million ($.11 per share),
respectively, for the same periods in 1998. Results of operations in the
first nine months of 1999 were negatively impacted by lower gold production
and prices, impairment write-downs of Niugini Mining's investment in Lihir
and a non-recurring environmental remediation charge related to the San Luis
property. The effect of these items was partially offset by foreign currency
exchange gains and decreased depreciation and production costs.
The results of operations of the Lihir and San Cristobal mines are not
included with those of Battle Mountain Gold in 1999 because Battle Mountain
had made the decision to dispose of its investment in Niugini Mining
effective December 31, 1998.
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
------------------ -----------------
1999 1998 1999 1998
------- ------- ------ ------
<S> <C> <C> <C> <C>
Gold sales - 100%, thousand ounces 205 254 585 768
Average gold revenue realized per ounce - 100% $262 $299 $272 $306
Average London PM gold fix per ounce $259 $289 $273 $294
</TABLE>
Battle Mountain Gold's results of operations are affected significantly by
the market price of gold, which it cannot control. During the third quarter
of 1999, Battle Mountain Gold modified its hedging policy. The current policy
allows the use of various derivative financial instruments, including forward
sales contracts and options, and limits hedges put in place to a maximum of
50% of the following five years' planned operating mine gold production. No
more than 300,000 ounces of new gold hedges may be established in any
quarter. No option contracts were delivered against or financially settled
during the nine months ended September 30, 1999 and 1998. Battle Mountain
Gold does not use derivative financial instruments for trading purposes. See
Note 8 of Notes to Condensed Consolidated Financial Statements for further
discussion.
Sales decreased for the three and nine month periods ended September 30, 1999
compared with the same periods in 1998 primarily as a result of decreased
production and lower realized gold prices. Excluding Battle Mountain Gold's
share of Lihir gold sales in 1998, sales volumes were 38,000 ounces lower in
the third quarter of 1999 and 150,000 ounces lower in the first nine months
of 1999. Lower production at Golden Giant and Kori Kollo in 1999 was
attributable to lower head grades. Also contributing to the overall decrease
in sales volumes in 1999 was the placing of the Battle Mountain Complex Reona
mine and the Niugini Mining San Cristobal mine on care and maintenance
effective January 1, 1999. Sales generated from gold production from these
mines are netted against production costs for financial statement
presentation purposes.
16
<PAGE>
The average realized price of gold decreased in 1999 as a result of decreased
spot gold prices. Average realized prices for the periods shown in 1998 were
higher than the average London PM fix price for the same periods due to gains
recognized from forward sales at Lihir.
<TABLE>
<CAPTION>
AGGREGATE ATTRIBUTABLE PRODUCTION COSTS Three months ended Nine months ended
PER OUNCE OF GOLD PRODUCED September 30 September 30
------------------ ------------------
1999 1998 1999 1998
---- ----- ---- ----
<S> <C> <C> <C> <C>
Direct mining costs $152 $156 $164 $161
Third party smelting, refining and transportation costs 2 2 2 2
By-product credits included in sales (4) (6) (5) (7)
---- ----- ---- ----
Cash operating costs 150 152 161 156
Royalties* 2 3 3 3
---- ----- ---- ----
Total cash costs 152 155 164 159
Depreciation, depletion and amortization 80 90 79 93
Reclamation and mine closure costs 5 5 6 5
---- ----- ---- ----
Total production costs $237 $250 $249 $257
==== ===== ==== ====
</TABLE>
<TABLE>
<CAPTION>
RECONCILIATION OF AGGREGATE ATTRIBUTABLE CASH COSTS
PER OUNCE TO CONSOLIDATED FINANCIAL STATEMENTS* Three months ended Nine months ended
September 30 September 30
-------------------- ---------------------
MILLIONS, EXCEPT OUNCES PRODUCED AND PER OUNCE AMOUNTS 1999 1998 1999 1998
- ------------------------------------------------------ ------- ------- ------- -------
<S> <C> <C> <C> <C>
Production costs per financial statements $ 35.8 $ 39.2 $107.4 $122.6
Lihir production costs - 3.1 - 8.3
Minority interest portion of production costs (1.7) (2.5) (5.2) (8.5)
By-product credits included in sales (0.8) (1.3) (2.9) (4.6)
Reclamation and mine closure costs (1.2) (0.8) (3.5) (3.4)
Inventory change and other (2.1) (2.2) (3.6) (4.4)
------ ------ ------ ------
Production costs for per ounce calculation purposes $ 30.0 $ 35.5 $ 92.2 $110.0
====== ====== ====== ======
Gold ounces produced, thousands 198 229 561 690
====== ====== ====== ======
Total cash costs per gold ounce produced $ 152 $ 155 $ 164 $ 159
====== ====== ====== ======
</TABLE>
* Royalties paid to the Bolivian government for the Kori Kollo mine are treated
as income tax for per ounce cost calculations and are therefore not included
in these cost calculations.
Total production costs decreased in the periods shown for 1999 primarily as a
result of the effects of placing the Reona and San Cristobal mines in care
and maintenance. Lower costs at Kori Kollo, resulting from a cost reduction
program, were offset by higher costs at Golden Giant and Holloway.
Consolidated per ounce cash costs increased slightly in the nine month period
in 1999 compared with 1998. Higher per ounce cash costs at Golden Giant and
Kori Kollo were partially offset by decreases at Holloway and Vera/Nancy and
the exclusion of Lihir from 1999 calculations. Cost increases at Golden Giant
and Kori Kollo were primarily the result of lower production.
Depreciation, depletion and amortization decreased in total and on a cost per
gold ounce produced basis for the three and nine month periods ended
September 30, 1999 compared with the same periods in 1998. These decreases
were attributable to lower production and lower asset carrying values
resulting from asset write-downs taken at the end of 1998.
Exploration, evaluation and other lease costs decreased in 1999. As a result
of continuing low gold prices, Battle Mountain Gold has reduced estimated
1999 exploration expenditures from $25 million to $17 million.
17
<PAGE>
General and administrative expenses increased in 1999 as a result of costs
associated with the retirement of a key executive and the closure of an
administrative office, totaling approximately $1.2 million, both in the third
quarter of 1999.
Battle Mountain Gold recorded a $9.5 million environmental remediation charge
in the third quarter of 1999 based upon Battle Mountain Gold's current best
estimate of costs to address technical long-term water quality issues at the
San Luis property. See Part II - Other Information - "Other Information" for
further discussion.
Interest expense decreased in the three and nine month periods ended
September 30, 1999 due to lower levels of average debt outstanding in 1999
compared with 1998, while interest income decreased primarily as a result of
lower average levels of cash invested.
Battle Mountain Gold incurred net foreign currency exchange gains on the U.S.
dollar-denominated debt of our foreign subsidiaries, primarily Battle
Mountain Canada, of $0.1 million and $6.9 million for the three and nine
month periods ended September 30, 1999, respectively. This compares with net
foreign currency exchange losses of $7.2 million and $12.6 million,
respectively, during the same periods in 1998.
Minority interest in net loss increased in the nine month period in 1999 as a
result of impairment losses of Lihir described below.
Equity in losses and impairment of Lihir increased in the nine months ended
September 30, 1999 compared with the same period in 1998. This increase was
due to $23.4 million of impairment write-downs ($20.2 million net of minority
interest) recorded during the first six months of 1999 as a result of
decreases in the market value of the Lihir stock. These decreases in value
were considered to be other than temporary decreases.
Battle Mountain Gold's provision for income taxes for the three and nine
month periods ended September 30, 1999 included benefits of $1.0 million and
$3.2 million, respectively, on losses before income taxes of $17.0 million
and $46.9 million, respectively. Battle Mountain Gold's effective income tax
rate for the first nine months of 1999 was 8%. The effective tax rate
includes the impact of recording a valuation allowance against the deferred
tax assets created by operating losses in the U.S., the net loss related to
assets held for sale and the net foreign currency exchange gains.
Mining taxes decreased for the periods presented in 1999 compared with the
same periods in 1998 due to decreased mining income from Battle Mountain
Gold's Canadian mines.
OTHER
See Notes 3 and 11 of Notes to Condensed Consolidated Financial Statements
and Part II - Other Information "Legal Proceedings" and "Other Information"
for a discussion of material contingencies.
Various laws require that financial assurances be in place for certain
environmental and reclamation obligations and potential liabilities. Battle
Mountain Gold has in place certain environmental and reclamation financial
assurances and will be required to put additional financial assurances in
place in the future. There can be no guarantee that Battle Mountain Gold will
be able to maintain and/or put in place the necessary assurances.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This standard
was amended by SFAS No. 137, which deferred the effective date of implementation
to the first quarter of fiscal years beginning after June 15, 2000. See Note 8
of Notes to Condensed Consolidated Financial Statements for further discussion.
18
<PAGE>
Unless otherwise discussed below, information for the nine months ending
September 30, 1999 about market, foreign currency, interest rate and equity
risks, and forward sales and hedging does not differ materially from that
discussed under Item 7A of Battle Mountain Gold's Annual Report on Form 10-K
for the year ended December 31, 1998.
Battle Mountain Gold's profitability is significantly affected by changes in
the market price of gold. Gold prices can fluctuate widely and are affected
by numerous factors, such as demand, forward selling by producers, central
bank sales and purchases, currency valuations, investor sentiment and
production levels. While Battle Mountain Gold is one of the lower cost gold
producers, a sustained period of low gold prices could have a material
adverse effect on our results of operations, financial position and cash
flows.
Battle Mountain Gold has operations in Canada and Australia in addition to
operations in the United States and other countries. Gold produced at these
operations is sold in the international markets for U.S. dollars. The cost
structures at these operations are primarily Canadian and Australian dollar
denominated, and accordingly, these affiliates' functional currencies are the
Canadian dollar and the Australian dollar, respectively. As such, Battle
Mountain Gold is exposed to foreign currency risk to the extent that there
are fluctuations in local currency exchange rates against the U.S. dollar.
All of Battle Mountain Gold's revenues for the nine months ended September
30, 1999 were generated from mining operations outside the United States,
while assets attributable to those operations were approximately $320.6
million. As a result, Battle Mountain Gold is exposed to risks normally
associated with operations located outside the United States, including
political, economic, social and labor instabilities, as well as foreign
exchange controls, currency fluctuations and taxation changes.
The risks associated with the year 2000 ("Y2K") are the result of computer
technology utilizing only the last two digits of a year rather than all four
to define a specific year. Absent corrective actions, some computer programs
that are not "Y2K-compliant" may recognize a date using "00" as the year
1900, rather than the year 2000. This could result in system failure or
miscalculations, causing disruptions to various activities and operations.
Battle Mountain Gold has completed our Y2K readiness program, with a review
of our computer systems inventory, systems validation, and certification and
testing stages having been completed. Both information technology ("IT") and
non-IT systems, including process control equipment used at Battle Mountain
Gold's mines, that have been determined to be Y2K non-compliant have been
replaced or upgraded, as appropriate. The replacement costs of those affected
non-IT systems are immaterial to Battle Mountain Gold. Some of our other
potential Y2K problems have been resolved through the implementation of a
previously planned Y2K-compliant IT systems upgrade. In recognition of the
important role that supply chain partners play in our business,
vendor/supplier Y2K compliance evaluations are continuing to be performed.
All of our critical vendors/suppliers indicate Y2K compliance. An outside
contractor assisted Battle Mountain Gold in developing our Y2K readiness
program.
Battle Mountain Gold is continuing to review and evaluate our most likely
worst-case scenario with regards to disruptions attributable to Y2K. Battle
Mountain Gold has developed business contingency plans in order to mitigate
potential disruptions, including those that may result from non-compliant
systems utilized by unrelated third party governmental and business entities.
These contingency plans, completed in the third quarter of 1999, will be
reviewed and updated as necessary throughout the remainder of 1999 and into
the year 2000.
Although no assurance can be given, Battle Mountain Gold does not anticipate
any material adverse effect regarding Y2K compliance on our consolidated
results of operations, financial position or cash flows. Battle Mountain Gold
believes failures of third parties to complete their Y2K compliance programs
will be the area of greatest risk of year 2000 having a material adverse
effect on Battle Mountain Gold.
The foregoing Y2K disclosures are based on Battle Mountain Gold's current
expectations, estimates and projec-tions. The actual effects of Y2K issues on
Battle Mountain Gold may be different from our current assessment.
19
<PAGE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The U.S. securities laws provide a "safe harbor" for certain forward-looking
statements. This report contains forward-looking statements that involve
risks and uncertainties that could cause actual results to differ materially
from those projected in such forward-looking statements. Statements regarding
the expected commencement dates of mining operations, projected quantities of
future production, capital costs, production rates, costs and expenditures
and other operating and financial data are based on expectations that Battle
Mountain Gold believes are reasonable, but we can give no assurance that such
expectations will prove to have been correct. Factors that could cause actual
results to differ materially include, among others: risks and uncertainties
relating to general domestic and international economic and political
conditions, the cyclical and volatile prices of gold, silver and copper,
political and economic risks associated with foreign operations,
unanticipated ground and water conditions, unanticipated grade and geological
problems, metallurgical and other processing problems, availability of
materials and equipment, delays in the receipt of or failure to receive and
maintain necessary governmental permits, changes in laws or regulations or
the interpretation and enforcement thereof, the occurrence of unusual weather
or operating conditions, force majeure events, lower than expected ore
grades, the failure of equipment or processes to operate in accordance with
specifications or expectations, including Y2K readiness, labor relations,
accidents, delays in anticipated start-up dates, environmental risks, the
availability and maintainability of environmental and remediation financial
assurances, the results of financing efforts and financial market conditions.
These and other risk factors are discussed in more detail in Battle Mountain
Gold's Annual Report on Form 10-K (File No. 1-9666) for the year ended
December 31, 1998. Many of such factors are beyond our ability to control or
predict. Readers are cautioned not to put undue reliance on forward-looking
statements. Battle Mountain Gold disclaims any intent or obligations to
update these forward-looking statements, whether as a result of new
information, future events or otherwise.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See Management's Discussion and Analysis of Financial Condition and Results
of Operations - "Other" for a discussion.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Battle Mountain Gold is working toward earning up to a 54% interest in the
Crown Jewel project in Washington state. Certain positive permit decisions
and approvals have been received for the Crown Jewel project, but additional
state permit decisions and approvals are pending. Certain persons and groups
oppose the Crown Jewel project. Among the opponents are the Okanogan
Highlands Alliance, the Washington Environmental Council, the Colville Indian
Environmental Protection Alliance and the Kettle Range Conservation Group
(collectively the "Anti-Development Groups") and the Confederated Tribes of
the Colville Reservation (the "Colville Confederated Tribes"). The legal
proceedings detailed below have been initiated by project opponents. Battle
Mountain Gold expects that additional appeals may be brought and that
injunctions will be sought. The final resolution of existing and expected
appeals and the timing thereof cannot be determined with any accuracy at this
time.
20
<PAGE>
OKANOGAN HIGHLANDS ALLIANCE V. WILLIAMS, ET AL., NINTH CIRCUIT COURT OF
APPEALS (NO. 99-35538)
During the first quarter of 1997, the United States Forest Service (the
"Forest Service") issued a final Environmental Impact Statement ("EIS") and
Record of Decision ("ROD") for the Crown Jewel project. The Forest Service
received four administrative appeals to its EIS and ROD, all of which the
Forest Service denied in the second quarter of 1997. On May 29, 1997, the
Anti-Development Groups instituted an action designated Civil No. 97-806JE
against the Forest Service and certain individual Forest Service decision
makers in United States District Court for the District of Oregon. The action
appealed the Forest Service's EIS, its ROD and its denial of the
administrative appeals. The action sought the following rulings: 1) that the
EIS and ROD were inadequate and violated the National Environmental Policy
Act and the Administrative Procedures Act; 2) that the Forest Service's
decision not to prepare and issue a supplemental EIS was not in accordance
with law; and 3) that the ROD violated certain specified laws. The action
also sought an award of fees and costs associated with the litigation and
indicated that the plaintiffs would seek injunctive relief restraining the
Forest Service from approving or authorizing the Plan of Operations or any
other action related to the Crown Jewel project. Battle Mountain Gold
intervened in the action and the Colville Confederated Tribes also intervened
and filed a complaint alleging that the ROD was issued in violation of
certain tribal rights. On December 31, 1998, the District Court granted
Battle Mountain Gold's and the Forest Service's motions for summary judgment,
thereby upholding the Forest Service's EIS, ROD and administrative denial of
plaintiffs' claims. On March 17, 1999, the District Court entered the order
of final judgment and dismissed the case with prejudice. On May 13, 1999 and
May 17, 1999, respectively, the Anti-Development Groups and the Colville
Confederated Tribes appealed the District Court's decision to the Ninth
Circuit Court of Appeals. In August of 1999, the appellants asked the Court
of Appeals to stay the briefing schedule while they pursue a separate as yet
unfiled lawsuit against the Bureau of Land Management and Forest Service. The
briefing schedule has been temporarily suspended while the Court considers
this motion.
OKANOGAN HIGHLANDS ALLIANCE, ET AL. V. STATE OF WASHINGTON DEPARTMENT OF
ECOLOGY, ET AL., WASHINGTON POLLUTION CONTROL HEARINGS BOARD,
(PCHB NOS. 97-182; 97-183; 97-186; AND 99-019)
In November 1997, the Washington Department of Ecology (the "Department of
Ecology") approved certain applications for new water rights and certain
applications for changes to existing water rights that are necessary for the
Crown Jewel project. On December 1, 1997, Roger Lorenz instituted the action
designated PCHB No. 97-182 against the Department of Ecology, appealing the
Department's approval of one new water right application and one water right
change application. On the same date, the Okanogan Highlands Alliance, the
Washington Environmental Council and the Center for Environmental Law and
Policy instituted the action designated PCHB No. 97-183 against the
Department of Ecology and Battle Mountain Gold. The action challenges the
Department of Ecology's water rights decisions, claiming that such decisions
violated the State Water Code, Water Resources Act, Administrative Procedures
Act and Environmental Policy Act. The action seeks an order reversing the
Department of Ecology's decisions or, in the alternative, vacating the
Reports of Examination and remanding the applications to the Department of
Ecology for further study. The action has been joined by Triple Creek, a
nonprofit corporation. On December 2, 1997, the Colville Confederated Tribes
instituted the action designated PCHB No. 97-186 against the Department of
Ecology and Battle Mountain Gold. The action makes the same challenge and
seeks the same relief as PCHB No. 97-183. The Washington Pollution Control
Hearings Board (the "PCHB") granted Battle Mountain Gold's request to
consolidate PCHB Nos. 97-182; 97-183; and 97-186 for hearing. However, the
PCHB determined that the water quality issues raised by the appeals will only
be decided after a hearing on the 401 Water Quality Certification. On October
23, 1998, the PCHB entered an order dismissing certain of the plaintiffs'
claims and ruled in favor of Battle Mountain Gold on eight additional claims
on February 16, 1999.
21
<PAGE>
In January 1999, the Department of Ecology granted Battle Mountain Gold 401
Water Quality Certification for the Crown Jewel project. On February 12,
1999, the Okanogan Highlands Alliance and the Washington Environmental
Council instituted an action designated PCHB No. 99-019 against the
Department of Ecology and Battle Mountain Gold, appealing the Department's
grant of the 401 Certification, approval of certain performance securities
and issuance of an Addendum to the Environmental Impact Statement. The action
has been consolidated with the above-described actions. The action seeks
determinations that: 1) the 401 Certification is invalid, illegal, null and
void; 2) the performance security fails to meet the requirements of the
Washington Metals Mining and Milling Act; 3) the Addendum violates the State
Environmental Policy Act; 4) all decisions based on the Addendum are null and
void; 5) the matter be remanded to the Department of Ecology for preparation
of a Supplemental Environmental Impact Statement; and 6) other relief,
including injunctive relief, as the PCHB deems appropriate. A hearing on the
merits was held during the week of September 13, 1999. A decision on the
matter is pending.
CONFEDERATED TRIBES OF THE COLVILLE RESERVATION V. STATE OF WASHINGTON
DEPARTMENT OF ECOLOGY, ET AL., SUPERIOR COURT OF THE STATE OF WASHINGTON FOR
THURSTON COUNTY, CIVIL NO. 97-2-02849-7
In November 1997, the Department of Ecology approved certain of Battle
Mountain Gold's applications for new water rights and for changes to existing
water rights that are necessary for the Crown Jewel project. The Department
granted Battle Mountain Gold's applications in part based upon a streamflow
mitigation plan. On December 2, 1997, the Colville Confederated Tribes
instituted the above-referenced action against the Department of Ecology and
Battle Mountain Gold. On the same date, the Okanogan Highlands Alliance, the
Washington Environmental Council and the Center for Environmental Law and
Policy instituted an action designated Civil No. 97-2-02831-8 against the
Department of Ecology and Battle Mountain Gold. On November 13, 1998, the two
actions were consolidated. The consolidated action seeks an order holding
that the Department of Ecology's approval of the streamflow mitigation plan
constituted a rulemaking in violation of the Administrative Procedures Act
and an order that such approval exceeds the Department of Ecology's statutory
authority, conflicts with existing law and is irrational. The action also
seeks an order mandating a rulemaking to develop guidelines and criteria for
approving water resource mitigation measures and an injunction on the
approval of water rights applications until the conclusion of such
rulemaking. The plaintiffs seek reversal of the Department of Ecology's
decisions with respect to Battle Mountain Gold's water rights applications,
along with an injunction precluding Battle Mountain Gold from taking action
in reliance on such decisions. The plaintiffs also seek to be reimbursed for
their costs and attorney fees. On November 5, 1998, the Department of Ecology
filed a motion to dismiss, which was subsequently joined by Battle Mountain
Gold. The motion was denied on January 8, 1999, allowing the case to proceed.
However, the case has been completely inactive since January 1999.
OKANOGAN HIGHLANDS ALLIANCE, ET AL. V. U.S. BUREAU OF LAND MANAGEMENT, ET
AL., INTERIOR BOARD OF LAND APPEALS (IBLA NOS. 99-345 AND 99-347)
On June 2, 1999, the Bureau of Land Management approved the Plan of
Operations for the Crown Jewel project. On July 19, 1999, the
Anti-Development Groups and the Colville Confederated Tribes each filed a
Notice of Appeal and Petition for Stay Pending Appeal with the United States
Department of the Interior Office of Hearings and Appeals Interior Board of
Land Appeals. The Colville Confederated Tribes also requested that the two
appeals be consolidated. The appeals requested that the Board remand the Plan
of Operations approval back to the Bureau of Land Management with
instructions to deny the Plan on the basis that the Plan of Operations is
allegedly based on illegal uses of lode mining claims under the Mining Law
and upon invalid lode mining claims. On September 3, 1999, the Interior Board
of Land Appeals affirmed the Bureau of Land Management's decision. The
Anti-Development Groups and the Colville Confederated Tribes have announced
their intent to seek review of the Interior Board of Land Appeals' decision
in federal district court.
22
<PAGE>
ITEM 5. OTHER INFORMATION
Battle Mountain Gold's Annual Report on Form 10-K for the year ended December
31, 1998 contained a description of closure and reclamation efforts with
respect to the San Luis mine in Colorado, which ceased operations in November
1996. As part of those efforts, Battle Mountain Gold voluntarily partially
backfilled the San Luis West Pit. As water percolates through the freshly
backfilled rock, the water picks up certain naturally occurring constituents.
The elevated levels of these constituents do not pose a risk to human health
or the environment. The following discussion relates to water quality issues
related to the San Luis West Pit.
The Colorado Mined Land Reclamation Board held a formal public hearing to
consider the matter on January 26, 1999 and determined that no violation had
occurred and ordered Battle Mountain Gold to implement our response plan.
Battle Mountain Gold has made all of the submittals required by the
Reclamation Board, has implemented those measures which have been approved
and is awaiting final approval for permanent response measures set forth in a
technical revision to the facility's permit.
By letter dated August 10, 1999, the United States Environmental Protection
Agency (the "EPA") advised the Colorado Department of Public Health and the
Environment and Battle Mountain Gold that the EPA believed that discharges of
pollutants without a permit have occurred near the West Pit in violation of
the Clean Water Act. The letter notified Battle Mountain Gold and the
Department of Public Health that the EPA would take direct action if the
Department of Public Health failed to take action and secure appropriate
injunctive relief and penalty.
On August 20, 1999 the Department of Public Health issued a Notice of
Violation and Cease and Desist Order to Battle Mountain Gold, alleging
discharges to waters not permitted under the Colorado Water Quality Control
Act. Battle Mountain Gold has filed an Answer to the Notice denying that such
a violation has occurred. The Notice requires Battle Mountain Gold to take a
number of steps that the Department of Public Health believes necessary to
attain compliance with the Water Quality Control Act. These steps include the
submittal of a permit application, a monitoring plan and a response plan.
Battle Mountain Gold has made all submittals required by the Notice and has
commenced extensive response activities. On October 8, 1999, the Department
of Public Health issued an Amendment to the Notice. The Amendment authorized
the operation of a water treatment facility and the discharge of treated
water. Battle Mountain Gold has commenced treatment and discharge operations.
On October 4, 1999, the Colorado Division of Minerals and Geology sent Battle
Mountain Gold a letter stating that the Division had reason to believe that
there might be a reasonable potential for degradation of groundwater quality
in certain portions of the aquifer near the West Pit. The letter requires
Battle Mountain Gold to modify our permit to protect the quality of
groundwater in the uncontaminated portion of the aquifer.
It is not possible to predict the nature or scope of any further action that
might be taken by regulatory authorities, which actions could include seeking
injunctive relief, mandating the posting of financial assurance, requiring
further on-site response actions and the imposition of monetary penalties.
Battle Mountain Gold accrued $9.5 million in the third quarter of 1999 as
other long-term liabilities based upon our current best estimate of costs to
address long-term water-quality issues at the San Luis property. It is
reasonably possible that this estimate may change in future reporting periods
as further information becomes available.
23
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11 Computations of Earnings (Loss) per Common Share
27 Financial Data Schedule
(a) Reports on Form 8-K
A Current Report on Form 8-K, dated August 19, 1999, was filed
containing a press release issued by Battle Mountain Gold.
A Current Report on Form 8-K, dated September 3, 1999, was
filed containing a letter granting an extension of certain
dates contained in Battle Mountain Gold's then outstanding
loan agreement with Canadian Imperial Bank of Commerce.
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, 2000 /s/ Jeffrey L. Powers
--------------------------------
Jeffrey L. Powers
Vice President and Controller
(Chief Accounting Officer)
24
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
COMPUTATIONS OF INCOME (LOSS) PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
MILLIONS, EXCEPT PER SHARE AMOUNTS 1999 1998 1999 1998
- ---------------------------------- -------- ------- -------- -------
(as restated) (as restated)
<S> <C> <C> <C> <C>
BASIC LOSS PER SHARE
Net loss
Net loss $ (18.1) $ (7.7) $ (46.1) $ (18.6)
Deduct dividends on preferred shares (1.9) (1.9) (5.6) (5.6)
-------- ------- -------- -------
Net loss applicable to common stock $ (20.0) $ (9.6) $ (51.7) $ (24.2)
======== ======= ======== =======
Shares
Weighted average number of common shares outstanding 229.9 229.8 229.9 229.8
======== ======= ======== =======
Basic loss per common share $(0.087) $(0.042) $(0.224) $(0.105)
======== ======= ======== =======
DILUTED LOSS PER SHARE
Net loss applicable to common stock $ (20.0) $ (9.6) $ (51.7) $ (24.2)
======== ======= ======== =======
Shares
Weighted average number of common shares outstanding 229.9 229.8 229.9 229.8
Assuming exercise of stock options reduced by the number of
shares which could have been purchased with the proceeds
from exercise of such options - - - -
-------- ------- -------- -------
Weighted average number of common shares outstanding, as adjusted 229.9 229.8 229.9 229.8
======== ======= ======== =======
Diluted loss per share, assuming conversion $(0.087) $(0.042) $(0.224) $(0.105)
======== ======= ======== =======
CALCULATIONS OF CONVERSIONS OF SECURITIES PRODUCING ANTI-DILUTIVE RESULTS
CONVERSION OF PREFERRED SHARES
Net loss
Net loss applicable to common stock $ (20.0) $ (9.6) $ (51.7) $ (24.2)
Effect on net loss if preferred shares were converted 1.9 1.9 5.6 5.6
-------- ------- -------- -------
Net loss, as adjusted $ (18.1) $ (7.7) $ (46.1) $ (18.6)
======== ======= ======== =======
Shares
Weighted average number of common shares outstanding 229.9 229.8 229.9 229.8
Effect on average shares outstanding if preferred shares were converted 11.0 11.0 11.0 11.0
-------- ------- -------- -------
Weighted average number of common shares outstanding, as adjusted 240.9 240.8 240.9 240.8
======== ======= ======== =======
Diluted loss per share, assuming conversion $(0.075) $(0.032) $(0.191) $(0.077)
======== ======= ======== =======
CONVERSION OF DEBENTURES
Net loss
Net loss applicable to common stock $ (20.0) $ (9.6) $ (51.7) $ (24.2)
Effect on net loss if debentures were converted 1.0 1.0 2.9 2.9
-------- ------- -------- -------
Net loss, as adjusted $ (19.0) $ (8.6) $ (48.8) $ (21.3)
======== ======= ======== =======
Shares
Weighted average number of common shares outstanding 229.9 229.8 229.9 229.8
Effect on average shares outstanding if debentures were converted 4.8 4.8 4.8 4.8
-------- ------- -------- -------
Weighted average number of common shares outstanding, as adjusted 234.7 234.6 234.7 234.6
======== ======= ======== =======
Diluted loss per share, assuming conversion $(0.081) $(0.037) $(0.208) $(0.091)
======== ======= ======== =======
CONVERSION OF OPTIONS
Net loss
Net loss applicable to common stock $ (20.0) $ (9.6) $ (51.7) $ (24.2)
======== ======= ======== =======
Shares
Weighted average number of common shares outstanding 229.9 229.8 229.9 229.8
Effect on average shares outstanding if options were converted - - - -
-------- ------- -------- -------
Weighted average number of common shares outstanding, as adjusted 229.9 229.8 229.9 229.8
======== ======= ======== =======
Diluted loss per share, assuming conversion $(0.087) $(0.042) $(0.224) $(0.105)
======== ======= ======== =======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BATTLE
MOUNTAIN GOLD COMPANY QUARTERLY REPORT ON FORM 10-Q/A FOR THE QUARTER ENDED
SEPTEMBER 30, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999<F1>
<CASH> 92,400
<SECURITIES> 0
<RECEIVABLES> 12,600
<ALLOWANCES> 0
<INVENTORY> 33,300
<CURRENT-ASSETS> 141,500
<PP&E> 844,500
<DEPRECIATION> 505,000
<TOTAL-ASSETS> 669,800
<CURRENT-LIABILITIES> 77,300
<BONDS> 176,800
0
110,600
<COMMON> 13,000
<OTHER-SE> 69,600
<TOTAL-LIABILITY-AND-EQUITY> 669,800
<SALES> 161,800
<TOTAL-REVENUES> 161,800
<CGS> 154,200
<TOTAL-COSTS> 154,200
<OTHER-EXPENSES> 13,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,200
<INCOME-PRETAX> (46,900)
<INCOME-TAX> (800)
<INCOME-CONTINUING> (46,100)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (51,700)
<EPS-BASIC> (0.22)
<EPS-DILUTED> (0.22)
<FN>
<F1>AS RESTATED
</FN>
</TABLE>
