SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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Battle Mountain Gold Company
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(Name of Registrant as Specified In Its Charter)
N/A
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On June 21, 2000, Battle Mountain Gold Company, a Nevada corporation (the
"Company"), announced that it had entered into an Agreement and Plan of Merger,
dated as of June 21, 2000, among the Company, Newmont Mining Corporation, a
Delaware corporation ("Newmont"), and Bounty Merger Corp., a Nevada corporation
and wholly-owned subsidiary of Newmont (the "Merger Agreement"), pursuant to
which the Company will become a wholly-owned subsidiary of Newmont. In
connection with the transactions contemplated under the Merger Agreement, each
share of the Company's common stock and each exchangeable share of Battle
Mountain Canada Ltd., a subsidiary of the Company, will be converted into the
right to receive 0.105 shares of Newmont's common stock. In addition, each share
of the Company's $3.25 convertible preferred stock will be converted into one
share of a new class of $3.25 convertible preferred stock of Newmont having
terms and conditions substantially identical to those of the Company's preferred
stock.
A copy of the joint press release of the Company and Newmont issued on June 21,
2000 is attached hereto (the "Press Release"). The Company and the following
persons named below may be deemed to be "participants" in the solicitation of
proxies from the stockholders of the Company in connection with the meeting of
the stockholders of the Company to be held to consider the approval of the
Merger Agreement.
The participants in this solicitation may include (i) the directors of the
Company: Karl E. Elers (Chairman), Ian D. Bayer, Douglas J. Bourne, David L.
Bumstead, Delo H. Caspary, Charles E. Childers, David W. Kerr, Terrence A.
Lyons, Mary Mogford and William A. Wise and (ii) the following officers of the
Company: John A. Keyes (President and Chief Operating Officer), Phillips S.
Baker, Jr. (Vice President, Chief Financial Officer), Joseph J. Baylis (Senior
Vice President, Corporate Development), Ian Atkinson (Senior Vice President,
Operations and Exploration), Thomas P. Bausch (Treasurer), Stanford M. Haley
(Vice President, Human Resources), Jeffrey L. Powers (Vice President and
Controller) and Greg V. Etter (Vice President and General Counsel).
As of June 20, 2000, David L. Bumstead and David W. Kerr may be deemed to
beneficially own 65,242,526 shares of the Company's common stock, although they
have each advised the Company that they disclaim beneficial ownership thereof.
The remaining directors and officers of the Company beneficially own in the
aggregate less than 1% of the common stock of the Company.
Set forth below is the full text of the Press Release:
[Letterhead of the Company and Newmont]
Newmont:
Media Contact: Doug Hock Investor Contact: Wendy Yang
303-837-5812 303-837-6141
Battle Mountain:
Contact: Les Van Dyke
713-653-7248
<PAGE>
BATTLE MOUNTAIN GOLD AND NEWMONT MINING AGREE TO MERGER
HOUSTON, June 21, 2000 - Battle Mountain Gold Company (BMG-NYSE;
BMC-TSE) and Newmont Mining Corporation have entered into a merger transaction
under which Battle Mountain Gold will become a wholly-owned subsidiary of
Newmont Mining. Each of Battle Mountain Gold's 230 million shares of common
stock and exchangeable shares will be exchanged for 0.105 shares of Newmont
common stock. The transaction will be accounted for as a pooling of interests.
The combination will consolidate the two companies' strategic land
positions in Nevada and generate company-wide sustainable cash savings of
approximately $30 million a year. The transaction is immediately accretive to
Newmont shareholders in terms of reserves, production, earnings and net asset
value. It is cash flow neutral until Battle Mountain Gold's Phoenix project is
in operation and accretive thereafter. The transaction is also accretive to
Battle Mountain Gold's shareholders in terms of cash flow, earnings and net
asset measures. Based on closing stock prices on June 20, 2000, Battle Mountain
Gold shareholders will receive a 25 percent premium, retain their leverage to
the gold price and have an interest in a larger, more liquid and financially
stronger company.
The transaction is expected to be completed this Fall, following
customary regulatory approvals and approval by Battle Mountain Gold
shareholders. Noranda Inc., which owns 28 percent of Battle Mountain Gold, has
agreed to vote its shares in favor of the merger.
"After a thorough review of the Phoenix project, which is the prime
attraction for us, we concur with Battle Mountain Gold's management that it is
one of the best undeveloped gold properties in North America," said Ronald C.
Cambre, Newmont's chairman and chief executive officer. "Located within 30 miles
of Newmont's Lone Tree complex, Phoenix provides an excellent fit with our
Nevada infrastructure. We also acquire attractive, low-cost assets in Canada,
Bolivia and Australia and will have the opportunity to broaden our workforce
through the addition of talented people from the Battle Mountain Gold
organization."
"This merger presents an outstanding opportunity for Battle Mountain
Gold shareholders to participate in one of the strongest and largest precious
metals producers in the industry," said Karl Elers, Chairman and Acting CEO of
Battle Mountain Gold. "Both companies contribute low operating costs, high
quality reserves and major operations that will complement each others'
infrastructure in Nevada."
Newmont will proceed aggressively with permitting, development and
further exploratory drilling on the Phoenix property, which had year-end
reserves of 5.7 million ounces of gold and 430 million pounds of copper. The
company believes the project, as well as Battle Mountain Gold's adjacent land
holdings, have the potential for a significant increase in reserves. With
permitting expected to be finalized by mid 2001, the mine and a leach operation
could be in production by early 2002 with the start-up of a 30,000 ton-per-day
mill a year later. Production is estimated to average 390,000 ounces of gold,
1.35 million ounces of silver and 27.5 million pounds of copper a year. Current
reserves indicate a minimum mine life of 13-years.
Synergies and opportunities from the merger include:
<PAGE>
o Capital savings of $25 million to $30 million from the use at
Phoenix of surplus mining equipment from the Mesquite mine in
California and Mule Canyon in Nevada, where deposits are being
mined out.
o Processing the gold/copper concentrate from Phoenix through
Newmont's Lone Tree autoclave, thereby eliminating smelting
costs, reducing transportation charges and increasing recovery
rates for gold and copper.
o Application of Newmont's Gold Medal Performance program and
global purchasing initiatives at each Battle Mountain Gold
location.
o Consolidation of exploration and administrative personnel
worldwide.
Based in Houston, Battle Mountain Gold was formed as a spin-off of
Pennzoil Company in 1985 and merged with Hemlo Gold Mines in 1996. The company
had proven and probable reserves at year-end 1999 of 9.9 million ounces of gold.
The company has estimated production of 760,000 ounces in 2000 rising to more
than 900,000 ounces when Phoenix comes into operation in 2003. Total cash costs
were $168 an ounce in the first quarter of 2000. In addition to Phoenix, the
company has the Golden Giant and Holloway mines in northern Ontario; Kori Kollo
in Bolivia and 50 percent of Vera/Nancy in Australia. It also has an interest in
Lihir Gold Limited in Papua New Guinea. The company employs 1,500 people.
Newmont, founded in 1921, acquired Santa Fe Pacific Gold Corporation in
1997 to become North America's largest gold producer. It reported reserves of
56.6 million ounces of gold at December 31, 1999. It has estimated production
for 2000 at 4.7 million ounces of gold and had cash costs of $176 an ounce in
the first three months of the year. The company's core assets are in Nevada,
Peru and Indonesia, with other operations in California, Mexico and Uzbekistan.
The company has an employee base of 9,300.
"The successful acquisition of Santa Fe and our ability to generate
significant and sustained savings through the integration of adjacent assets is
the model we will follow with Battle Mountain Gold," Cambre said. "While we are
reviewing optimal mining rates and processing options for Phoenix, we will
achieve significant savings in capital and operating costs by utilizing our
existing equipment and facilities compared with Battle Mountain Gold's
stand-alone plan. As a result, Phoenix will be one of our lowest cost operations
in Nevada."
Upon completion of the merger, Newmont's outstanding shares will
increase to approximately 192.2 million. The company expects to assume Battle
Mountain Gold's 2.3 million shares of convertible preferred stock as well as
$199 million in long-term debt. Net debt to total capitalization after the
transaction of 40 percent will be essentially unchanged.
Following the merger, Newmont will have reserves of 66.5 million ounces
of gold (the third highest in the world), 232.8 million ounces of silver and 6.1
billion pounds of copper. North America will account for 56 percent of the
company's gold reserves versus 52 percent today. The company will retain its
position as the second largest gold producer in the world, with estimated
production in 2000 of 5.4 million ounces of gold at a total cash cost of under
$170 an ounce.
"This transaction is part of a much needed consolidation in the
industry," Cambre said. "It will enable us to better rationalize our Nevada
assets and determine the optimum investment and production levels to achieve the
best return for our shareholders."
<PAGE>
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
This press release includes forward-looking information and statements about
Newmont Mining Corporation, Battle Mountain Gold Company and the combined
company after completion of the transaction that are intended to be covered by
the safe harbor for "forward-looking statements" provided by the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
statements that are not historical facts. These statements include financial
projections and estimates and their underlying assumptions; statements regarding
plans, objectives and expectations with respect to future operations, products
and services; and statements regarding future performance. Forward-looking
statements are generally identified by the words "expect," "anticipates,"
"believes," "intends," "estimates" and similar expressions. The forward-looking
information and statements in this press release are subject to various risks
and uncertainties, many of which are difficult to predict and generally beyond
the control of Newmont and Battle Mountain, that could cause actual results to
differ materially from those expressed in, or implied or projected by, the
forward-looking information and statements. These risks and uncertainties
include those discussed or identified in the public filings with the U.S.
Securities and Exchange Commission (SEC) made by Newmont and Battle Mountain;
risks and uncertainties with respect to the parties' expectations regarding the
timing, completion and accounting and tax treatment of the merger, the value of
the merger consideration, production and development opportunities, conducting
worldwide operations, earnings accretion, cost savings, revenue enhancements,
synergies and other benefits anticipated from the transaction; and the effect of
gold price and foreign exchange rate fluctuations, and general economic
conditions such as changes in interest rates and the performance of the
financial markets, changes in domestic and foreign laws, regulations and taxes,
changes in competition and pricing environments, the occurrence of significant
natural disasters, civil unrest and general market and industry conditions.
ADDITIONAL INFORMATION
Information regarding the identity of the persons who may, under SEC rules, be
deemed to be participants in the solicitation of stockholders of Battle Mountain
in connection with the proposed merger, and their interests in the solicitation,
are set forth in a Schedule 14A filed on the date of this press release with the
SEC. Newmont and Battle Mountain will be filing a proxy statement/prospectus and
other relevant documents concerning the proposed transaction with the U.S. SEC.
Investors are urged to read the proxy statement/prospectus when it becomes
available and any other relevant documents filed with the SEC because they will
contain important information on the proposed transaction. Investors will be
able to obtain the documents free of charge at the SEC's website (www.sec.gov).
In addition, documents filed with the SEC by Newmont may be obtained free of
charge by contacting Newmont Mining Corporation, 1700 Lincoln Street, Denver, CO
80203, (303) 863-7414. Documents filed with the SEC by Battle Mountain will be
available free of charge by contacting Battle Mountain Gold Company, 333 Clay
Street, 42nd Floor, Houston, Texas 77002, (713) 650-6400. Investors should read
the proxy statement/prospectus carefully when it becomes available before making
any voting or investment decision.
