<PAGE>
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): February 4, 2000
BATTLE MOUNTAIN GOLD COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Nevada 1-9666 76-0151431
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
333 Clay Street, 42nd Floor
Houston, Texas 77002
(ADDRESS, OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
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 the fourth quarter 1999 earnings release of Battle Mountain Gold
Company, as presented in a press release dated February 4, 2000.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
c) Exhibits.
99.1 Press Release issued by Battle Mountain Gold Company dated
February 4, 2000.
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: February 11, 2000. BATTLE MOUNTAIN GOLD COMPANY
(Registrant)
By: /s/ Greg V. Etter
----------------------------------
Name: Greg V. Etter
Title: Vice President, General Counsel and
Corporate Secretary
<PAGE>
[LOGO] NEWS
IMMEDIATE RELEASE
CONTACT: LES VAN DYKE
(713) 653-7248 OR
[email protected]
WEB PAGE: WWW.BMGOLD.COM
BATTLE MOUNTAIN GOLD BOOSTS RESERVES, CONTINUES STRONG, LOW-COST OPERATING
PERFORMANCE DESPITE LOSS FOR 4TH QUARTER/YEAR
Houston, February 4, 2000 -- Battle Mountain Gold Company (BMG-NYSE;
BMC-TSE) today reported a fourth quarter consolidated net loss of $82
million, or 36 cents per share, compared with a net loss of $225 million, or
98 cents per share, in the same period last year. For the year 1999, the
Company reported consolidated net losses of $127 million, or 55 cents per
share, compared with $249 million, or $1.08 per share, in the same period
last year.
BMG President and Chief Operating Officer, John A. Keyes, noted that
the loss for the period included a $35.9 million, or 16 cent per share,
non-cash write-off of the Company's remaining carrying value in the Crown
Jewel project; and a $33.3 million, or 14 cent per share, non-cash loss
related to the Company's investment in Niugini Mining Limited (NML). The
Crown Jewel write off reflects continuing delays and uncertainties
surrounding the project, while the NML loss reflects a decrease of 33% in the
market value of BMG's interest in Lihir Gold Limited (LGL), as of the date of
the merger of NML with LGL.
The loss for the year resulted from lower average realized gold
prices of $278 per ounce, compared with $306 per ounce in 1998; the Crown
Jewel write off; and non-cash losses totaling $46.6 million resulting from
the changing market value of Lihir. The Company also recorded a $9.5 million
environmental remediation charge, which was previously reported, and a $7.7
million reduction in prior year tax assets. These charges were somewhat
offset by mostly non-cash foreign currency gains for the year of $8.2 million.
Keyes said that despite the losses, the year overall was highlighted
by:
- A 9% increase in estimated reserves to approximately 10 million
ounces, including a 61% increase in estimated reserves at Phoenix
- Low cash production costs of $164 per ounce
- Strong second-half increases in cash flow
- A 6% increase in production over target
- Identification of significant upside potential at Holloway,
Llallagua and Vera/Nancy
- And an exciting new exploration discovery in Argentina
Keyes noted that the Company continues to achieve low production
costs, with fourth quarter production of 209,000 ounces, at an average cash
production cost of $159 per ounce. Attributable gold production for the year
was 770,000 ounces.
more....
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BMG POSTS RESERVE INCREASE, ANNOUNCES EARNINGS, ADD 1....
Keyes said that cash flow from operations improved significantly
during the second half to $28.1 million, compared with $2.6 million for the
first six months of 1999. He emphasized that the Company has made significant
strides during the year to lower costs, as reflected by sharply diminishing
operating losses, even at lower gold prices. These improvements were clearly
reflected in the Company's fourth quarter performance, which was bolstered by
modestly higher average realized gold prices of $294 per ounce, compared with
$272 for the first nine months.
Keyes added that the Company's financial position was strengthened
during the year by the completion of the restructuring of its loan facility,
improved cash flow, and greatly improved liquidity in the Company's interest
in Lihir as a result of the recent merger of NML with Lihir Gold. The NML/LGL
merger was approved by the Papua New Guinea National Court of Justice on
February 1, effective as of February 2, 2000. The Company's cash position was
$76.3 million at year end, including $40 million in restricted cash related
to the Company's loan facility, which will be applied against BMG's long-term
debt in 2003.
The Company has also implemented a limited number of hedges pursuant
to its Canadian credit facility. BMG views hedging as a valuable financial
tool and will consider limited hedging in the future in order to ensure an
adequate return on the Company's capital investments, while maintaining
significant exposure to upside moves in gold prices.
RESERVES
Year end 1999 proven and probable contained gold reserves increased
to 9.9 million attributable ounces, up about 9% compared with year end 1998,
after deducting production and despite Crown Jewel's removal from the proven
and probable category. (Absent the 825,000-ounce Crown Jewel adjustment,
reserves would have increased 18% to about 10.8 million ounces). The reserve
increase (using a gold price assumption of $325 per ounce, the same as in
1998) excludes Crown Jewel and reflects mineable gold production of 950,000
ounces last year. Reserve additions at Phoenix, which totaled 2.2 million
ounces, as well as small additions at Kori Kollo, Holloway and Vera/Nancy,
more than offset the changes. Reserves would only decrease 9% and 4% using
$275 and $300 gold price assumptions, respectively. A $350 gold price
assumption would result in approximately a 4% increase in year end 1999
reserves.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
PROVEN & PROBABLE CONT. GOLD RESERVES DECEMBER 31, 1999 DECEMBER 31, 1998
- ------------------------------------- ----------------- -----------------
(in 000s) BMG SHARE ($325 AU) BMG SHARE ($325 AU)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Golden Giant 1,725 2,130
Kori Kollo/Llallagua 1,330 1,410
Holloway 765 825
Vera/Nancy 440 400
Phoenix 5,680 3,515
Crown Jewel 0 825
------ ------
TOTAL 9,940 9,105
- --------------------------------------------------------------------------------------------------------
Contained Silver Reserves (000s oz) 49,950 30,980
- --------------------------------------------------------------------------------------------------------
</TABLE>
Other mineralization stands at 5.3 million ounces, includes Crown
Jewel, and also demonstrates the Company's strong pipeline of largely headframe
reserve-growth and development potential currently in hand.
more....
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BMG POSTS RESERVE INCREASE, ANNOUNCES EARNINGS, ADD 2....
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
ADDITIONAL GOLD MINERALIZATION (000S OZ)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Phoenix/Battle Mountain Complex 1,500 1,000
Llallagua 1,230 1,230
Crown Jewel 825 -
Holloway 750 300
Vera/Nancy 500 600
Casposo 500 -
Tres Cruces - 2,000
El Cairo - 1,250
- -------- ----- -----
TOTAL 5,305 6,380
- --------------------------------------------------------------------------------------------------------
</TABLE>
OUTLOOK 2000
Keyes said that targets for the year 2000 include:
- The completion of permitting and engineering at Phoenix and Llallagua
- Strong operating performance, with production of 760,000 ounces
- Low cash operating costs of under $175 per ounce
- A further net increase in reserves
DEVELOPMENT
Keyes emphasized the significant progress that is being made at the
Phoenix development project. Overall in 1999, the Company added 2.2 million
contained ounces of gold at Phoenix, assuming a $325 gold price. The additions
lowered the overall strip ratio from 3.7:1 to 2.8:1, decreased mining and
milling costs, and increased the anticipated mine life to over 15 years at
300,000 ounces per year, based on an average grade of 0.038 ounces per ton
(opt). The Company continues to target cash operating costs of approximately
$185 per ounce. Additional upside potential still remains both within the
current interim pit design, and elsewhere on the property. The final
feasibility study is expected to be completed early in the second quarter.
Permitting for Phoenix is moving ahead with the Bureau of Land Management, and
the Company currently hopes to have a draft environmental impact statement by
mid year.
In other development activity, in Bolivia, work is advancing on the
year-long 200,000-ton pilot-plant test of the LLALLAGUA bio-oxidation heap
leach project adjacent to Kori Kollo, which continues to indicate recovery
rates in the 70% range are feasible. At the end of 1999, a total of 51,500
tons were undergoing bio-oxidation on four demonstration cells. The plant is
currently placing crushed and agglomerated ore on the cells at the design
rate of 550 tons per day and will increase it to 1,100 tons per day late in
the first quarter of this year. The project is expected to have low
development costs using the existing Kori Kollo infrastructure. A 20-hole
program, initiated in November, is designed to assess opportunities to
significantly impact the size and strip ratio of the deposit. BMG hopes to
reach a production decision late in 2000.
On January 19, 2000, the Washington Pollution Control Hearings Board
(PCHB) issued a decision which reversed the water right permits and vacated
the Clean Water Act Section 401 Certification for the CROWN JEWEL mine
project. The PCHB stated that it had based its water rights decision mostly
on concern that studies predicting the mine's impacts on water quantity,
which were prepared by the agencies during the 7-year EIS and permitting
process, do not provide sufficient certainty to support the Company's
streamflow mitigation plan. The Water
more....
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BMG POSTS RESERVE INCREASE, ANNOUNCES EARNINGS, ADD 3....
Quality Certification was rejected due to similar concerns with water quality
studies and mitigation plans. The PCHB also held that the Company's wetlands
mitigation plan, which was approved not only by Ecology, but also by the U.S.
Army Corps of Engineers, is not adequate. In light of the ruling, the Company
has written-off the remaining carrying value in Crown Jewel and discontinued
classifying the reserves as proven and probable. The Company is continuing to
examine its various options, including appeal.
OPERATIONS
In Canada, the GOLDEN GIANT mine performed well during the quarter
with higher than plan grades contributing to higher than anticipated
production and lower costs. Development work on Block 5 continued and test
mining is now complete. Block 5 production will continue in 2000 as a normal
part of mine operations. Shaft deepening operations are scheduled for
completion in mid 2000.
The 88% owned KORI KOLLO mine in Bolivia continued to have good
performance and completed the year slightly ahead of plan. Cash operating
costs for the year were lower than targeted, largely due to cost cutting
measures implemented earlier in 1999.
The 84.65% owned HOLLOWAY mine completed the year with gold
production approximately 1,500 ounces over plan, and cash operating costs
averaging $198 per ounce, compared with $216 in 1998. Cash operating costs
are expected to remain about $200 per ounce at Holloway in 2000.
BMG's 50% joint venture interest in the PAJINGO COMPLEX in
Queensland, Australia, performed significantly ahead of plan due to the early
completion of the mill expansion. BMG's share of total production at the
Vera/Nancy mine this year is targeted to be 115,000 ounces at a cash
operating cost of $112 per ounce.
EXPLORATION
Exploration expenditures for the year were in line with target at
$16.7 million and are expected to be approximately $11 million in 2000.
Efforts this year are being targeted at five priority project areas including
Phoenix, Holloway/Blacktop, Llallagua, Vera/Nancy and Casposo. Positive
developments for the fourth quarter include significant drill results from
the Blacktop project in Canada, Casposo in Argentina, Llallagua in Bolivia,
and Phoenix in Nevada.
Exploration in Canada during the quarter focused on the HOLLOWAY area.
Drilling continued on the BLACKTOP deposit, where nine drill holes were
completed over a 300-meter strike length. Significant assay results include
0.32 opt/48 ft; 0.22 opt/18 ft; 0.19 opt/7 ft and 0.19 opt/13 ft. The main
portion of the mineralized zone remains open to the west and at depth. The
exploration program for 2000 is under way and, in addition to Blacktop, work
in the immediate Holloway mine area has outlined a number of priority
"satellite reserve" opportunities including the 500 XP corridor, the 500 XP
Lightning Zone and the Middle Zone. Excellent potential also exists for both
Lightning Zone and Contact Zone mineralization within 1,300 ft of the
production shaft. Collectively, additional resources in all of these areas
currently total approximately 750,000 ounces. All of these zones are
potential satellite ore bodies that could be accesssed via
more....
<PAGE>
BMG POSTS RESERVE INCREASE, ANNOUNCES EARNINGS, ADD 4....
underground from the Holloway mine and will be the focus of exploration work
this year at Holloway.
Aside from the Phoenix development work, exploration drilling at the
BATTLE MOUNTAIN COMPLEX during 1999 focused on the eastern side of the Copper
Canyon property in the Plumas and Iron Canyon pit and 7 miles to the north at
Copper Basin. The Plumas and Iron Canyon areas have potential for both new
oxide (heap-leach) reserves and for higher grade (>0.06 opt Au) mill ore. Ten
holes totaling 4,750 ft were drilled in and adjacent to the Iron Canyon pit.
One core hole intersected mineralization assaying 0.306 opt Au (cut)/38 ft
within a wider interval grading 0.177 opt Au/69.5 ft. Two other exploration
holes assayed 0.114 opt Au/50 ft and 0.69 opt/90 ft. Eleven reverse
circulation holes totaling 3,805 ft were drilled to test the Plumas targets,
along and west of the Plumas fault. Results are mixed with one hole returning
0.223 opt Au/20 ft at a vertical depth of 220 ft. At Copper Basin to the
north of the Phoenix pit, good results were obtained from all six reverse
circulation holes drilled in the Surprise and Empire areas. Assays returned
from the Surprise target include: 0.147 opt/25 ft, 0.095 opt/30 ft and 0.118
opt/15 ft. Empire area assays include: 0.068 opt/20 ft, 0.188 opt/55 ft, and
0.040 opt/35ft. High copper grades were encountered in one hole at Empire
with 1.0% Cu occurring over 120 ft. Follow up drilling is planned for all of
these exploration areas in 2000.
In Argentina, work focused on the CASPOSO project. A third phase of
drilling was completed bringing the total for the year to 14,000 ft in 26
holes. The drill results continue to expand the mineralization with good gold
grades and high silver in all but one of the holes. Significant results from
the Kamila Zone include: 0.66 opt Au with 18.06 opt Ag/14 ft; 0.52 opt Au
with 10.10 opt Ag/30 ft; 0.29 opt Au with 3.64 opt Ag/65 ft and 0.27 opt Au
with 6.75 opt Ag/30 ft. The weakest intercept returned 0.06 opt Au with 3.49
opt Ag/40 ft. Mineralization remains open at depth and strike dimensions have
yet to be defined. Initial metallurgical testing is in progress. Preliminary
calculations have outlined a geologic resource containing in excess of
500,000 ounces of gold and 5,000,000 ounces of silver. The fourth round of
drilling is ongoing.
At Pajingo, work during the quarter focused on completing resource
extension drilling at Vera South, updating resource/reserve estimations for
VERA/NANCY, and compiling/interpreting data to complete planning for 2000.
The eastern and down-dip limits of the mineralization located east of Vera
South are still undefined and some additional drilling will be completed
during the first quarter of 2000. Vera South drilling resulted in a best
drill intercept of 0.53 opt Au/20 ft during the quarter. Resource block
models and inferred resource estimates were completed by the Company's
operating partner, Normandy, for the Vera South and Veracity structures in
December. Veracity may represent an opportunity to develop a source of
medium-grade ore close to the planned development for Vera South. Future
drilling is planned.
OTHER MATTERS
The Board of Directors is continuing to consider the matter of
nominees for board membership, but did not take action at its regularly
scheduled meeting today.
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 Twelve months ended
December 31 December 31
----------- -----------
US$ MILLIONS, EXCEPT PER SHARE AMOUNTS 1999 1998 1999 1998
- -------------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Sales $ 66.4 $ 59.4 $ 228.2 $ 276.6
------ ------ ------ ------
Costs and expenses
Production costs 42.5 40.7 151.5 163.3
Depreciation, depletion and amortization 17.4 17.2 64.2 79.6
Exploration, evaluation & other lease costs, net 3.6 8.5 16.7 24.8
General and administrative expenses 2.8 3.0 14.1 14.1
Environmental remediation charge - - 9.5 -
Asset write-downs 35.9 194.9 35.9 194.9
Loss related to assets held for sale 33.3 - 46.6 -
------ ------ ------ ------
Total costs and expenses 135.5 264.3 338.5 476.7
------ ------ ------ ------
Operating loss (69.1) (204.9) (110.3) (200.1)
Interest expense (3.9) (3.9) (15.1) (17.8)
Interest income 0.8 2.0 4.1 10.7
Foreign currency exchange gain (loss), net 1.3 0.2 8.2 (12.4)
Minority interest in net loss (income) 0.4 0.8 1.5 (0.5)
Equity in losses of Lihir - (3.4) - (7.9)
Other income (expense), net (1.3) 0.3 (0.4) 0.5
------ ------ ------ ------
Loss before income taxes (71.8) (208.9) (112.0) (227.5)
Income tax benefit (expense) (10.8) (13.2) (7.6) (7.8)
Mining tax benefit (expense) 2.6 (0.6) 0.2 (6.0)
------ ------ ------ ------
Net loss (80.0) (222.7) (119.4) (241.3)
Preferred dividends 1.9 1.9 7.5 7.5
------ ------ ------ ------
Net loss to common shares $(81.9) $(224.6) $(126.9) $(248.8)
====== ====== ====== ======
Loss per common share - basic and diluted $ (.36) $ (.98) $ (.55) $ (1.08)
Dividends per common share $ - $ - $ - $ .05
Average common shares outstanding for
Basic and diluted loss per share purposes 229.9 229.8 229.9 229.8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
December 31, December 31,
1999 1998
------------ ------------
US$ MILLIONS (Unaudited)
- ------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 36.3 $147.6
Restricted cash - 7.7
Accounts and notes receivable 12.9 13.8
Product inventories 8.6 8.9
Materials and supplies, at average cost 22.3 23.4
Assets held for sale 61.7 108.3
Other current assets 7.9 2.7
----- -----
Total current assets 149.7 312.4
Investments 10.6 19.4
Property, plant and equipment, net 299.6 341.9
Restricted cash 40.0 -
Other assets 6.7 20.4
----- -----
Total assets $506.6 $694.1
===== =====
Liabilities and Shareholders' Equity
Current liabilities
Short-term borrowings $ - $ 14.9
Current maturities of long-term debt 2.6 37.0
Debt due upon disposal of assets held for sale 30.0 -
Accounts payable 15.9 14.3
Income and mining taxes payable 16.6 23.9
Other current liabilities 21.0 12.9
----- -----
Total current liabilities 86.1 103.0
Long-term debt 176.8 203.6
Deferred income and mining taxes 64.5 72.0
Other liabilities 54.5 50.1
----- -----
Total liabilities 381.9 428.7
Minority interest 6.0 17.7
Shareholders' equity 118.7 247.7
----- -----
Total liabilities and shareholders' equity $506.6 $694.1
===== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Twelve months ended
December 31
-----------
US$ MILLIONS 1999 1998
- ------------ ------ ------
<S> <C> <C>
Cash flows from operating activities
Net loss $(119.4) $(241.3)
Adjustments to reconcile net loss to cash
flows from operating activities:
Depreciation, depletion and amortization 64.2 79.6
Environmental remediation charges 9.5 -
Asset write-downs 35.9 194.9
Loss related to assets held for sale 46.6 -
Deferred income and mining taxes 2.1 (7.1)
Foreign currency exchange loss (gain), net (8.2) 12.4
Equity in losses of Lihir - 7.9
Change in working capital accounts, net 2.1 21.4
Other, net (4.7) 15.0
------ ------
Net cash flows provided by operating activities 28.1 82.8
------ ------
Cash flows from investing activities
Capital expenditures (49.3) (46.5)
Crown Butte liquidating dividend to minority shareholders (11.0) -
Proceeds from sale of assets 11.9 2.0
New World settlement - 34.9
Investment in Lihir Gold Limited - (11.5)
Effects on cash of deconsolidation of Niugini Mining Limited - (49.6)
Other, net (0.1) (3.4)
------ ------
Net cash flows used in investing activities (48.5) (74.1)
------ ------
Cash flows from financing activities
Debt repayments (31.2) (44.3)
Increase (decrease) in short-term borrowings (14.9) 9.9
Cash dividend payments (7.5) (19.0)
Decrease (increase) in restricted cash (31.7) 10.2
Other, net 0.2 (0.5)
------ ------
Net cash flows used in financing activities (85.1) (43.7)
------ ------
Effect of exchange rate changes on cash (5.8) (2.4)
------ ------
Decrease in cash and cash equivalents (111.3) (37.4)
Cash and cash equivalents at beginning of year 147.6 185.0
------ ------
Cash and cash equivalents at end of year $ 36.3 $ 147.6
====== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION - OPERATING DATA (Unaudited)(1)
(Production data reflects BMG attributable interests)
(US$, ounces in thousands)
Three months ended Twelve months ended
December 31 December 31
----------- -----------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
GOLDEN GIANT
Gold ounces recovered 98 72 356 366
Silver ounces recovered 6 3 22 26
- --------------------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $ 131 $ 149 $ 145 $ 122
Depreciation, depletion and amortization 65 64 65 66
Reclamation and mine closure costs 8 4 5 4
---- ---- ---- ----
Total production costs $ 204 $ 217 $ 215 $ 192
- --------------------------------------------------------------------------------------------------------------
KORI KOLLO (88% Interest)
Gold ounces recovered 69 75 256 295
Silver ounces recovered 171 202 687 852
- --------------------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced (2)
Cash production costs $ 185 $ 129 $ 190 $ 165
Depreciation, depletion and amortization 89 117 89 127
Reclamation and mine closure costs 25 11 15 11
---- ---- ---- ----
Total production costs $ 299 $ 257 $ 294 $ 303
- --------------------------------------------------------------------------------------------------------------
HOLLOWAY (84.65% Interest)
Gold ounces recovered 20 21 91 80
- --------------------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $ 230 $ 205 $ 198 $ 216
Depreciation, depletion and amortization 133 115 131 114
Reclamation and mine closure costs 3 2 2 2
---- ---- ---- ----
Total production costs $ 366 $ 322 $ 331 $ 332
- --------------------------------------------------------------------------------------------------------------
VERA/NANCY (50% Interest)
Gold ounces recovered 22 12 67 47
Silver ounces recovered 15 11 50 40
- --------------------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $ 140 $ 129 $ 124 $ 135
Depreciation, depletion and amortization 57 37 42 32
Reclamation and mine closure costs 2 1 2 1
---- ---- ---- ----
Total production costs $ 199 $ 167 $ 168 $ 168
- --------------------------------------------------------------------------------------------------------------
OTHER (3)
Gold ounces recovered 19 101
Silver ounces recovered 21 117
- --------------------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $ 341 $ 253
Depreciation, depletion and amortization 141 103
---- ----
Total production costs $ 482 $ 356
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION - OPERATING DATA (Unaudited)(1)
(Production data reflects BMG attributable interests)
(US$, ounces in thousands)
Three months ended Twelve months ended
December 31 December 31
----------- -----------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
AGGREGATE DATA
Gold ounces recovered - BMG share 209 199 770 889
Gold ounces sold - BMG share 213 195 771 884
Gold ounces recovered 219 223 806 992
Gold ounces sold 221 218 806 987
Average price per gold ounce realized $ 294 $ 305 $ 278 $ 306
- -------------------------------------------------------------------------------------------------------------
Silver ounces recovered - BMG share 192 236 759 1,034
Silver ounces sold - BMG share 197 232 759 1,032
Silver ounces recovered 215 270 852 1,187
Silver ounces sold 222 266 853 1,186
Average price per silver ounce realized $5.28 $4.64 $5.22 $ 5.50
- -------------------------------------------------------------------------------------------------------------
Weighted Average Cost per Gold Ounce Produced
Cash production costs $ 159 $ 165 $ 164 $ 160
Depreciation, depletion and amortization 79 95 79 94
Reclamation and mine closure costs 13 6 8 5
---- ---- ---- ----
Total production costs $ 251 $ 266 $ 251 $ 259
- -------------------------------------------------------------------------------------------------------------
</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 classified the investment in
Niugini Mining Limited as an asset held for sale effective December 31,
1998.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
HEDGING DATA*
INSTRUMENTS VOLUME PRICE PERIODS
----------- ------- ----- -------
<S> <C> <C> <C>
Puts 50,000 $270 1st Qtr '00 to 4th Qtr '03
100,000 $280 1st Qtr '00 to 4th Qtr '03
100,000 $290 1st Qtr '00 to 4th Qtr '03
100,000 $320 1st Qtr '00 to 4th Qtr '03
- -------------------------------------------------------------------------------------------------------------
Calls 100,000 $335 1st Qtr '00 to 4th Qtr '03
100,000 $340 1st Qtr '00 to 4th Qtr '03
50,000 $352 1st Qtr '00 to 4th Qtr '03
100,000 $370 1st Qtr '00 to 4th Qtr '03
- -------------------------------------------------------------------------------------------------------------
Flat Forwards 100,000 $312 1st Qtr '00 to 4th Qtr '03
25,000 $323 2nd Qtr '00 to 1st Qtr '04
25,000 $329 2nd Qtr '00 to 1st Qtr '04
- -------------------------------------------------------------------------------------------------------------
</TABLE>
*The puts are the minimum price BMG will receive, while the offsetting calls,
having a higher price, allow BMG to participate in a rising gold market. All
ounces sold through the forwards will be at the stated prices. There is no
lease rate exposure or margin requirements on these hedges. The above 500,000
ounces are deliverable over 16 equal periods, and equal about 31,000 ounces
per period, or about 15% of BMG's expected gold production in any given
period, if fully exercised.
