<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): May 1, 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 first quarter 2000 earnings release of Battle Mountain Gold
Company, as presented in a press release dated May 1, 2000.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
c) Exhibits.
99.1 Press Release issued by Battle Mountain Gold Company
dated May 1, 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: May 1, 2000. BATTLE MOUNTAIN GOLD COMPANY
(Registrant)
By: /s/ Greg V. Etter
-----------------------------------
Name: Greg V. Etter
Title: Vice President, General Counsel
and Corporate Secretary
<PAGE>
Exhibit 99.1
[BATTLE MOUNTAIN GOLD LOGO] N E W S
IMMEDIATE RELEASE
CONTACT: LES VAN DYKE
(713) 653-7248 or [email protected]
Web Page: www.bmgold.com
BATTLE MOUNTAIN GOLD POSTS SMALL FIRST QUARTER LOSS,
BUT CONTINUES STRONG OPERATING PERFORMANCE
Houston, May 1, 2000 -- Battle Mountain Gold Company (BMG-NYSE;
BMC-TSE) today reported a first quarter consolidated net loss of $3.5
million, or 2 cents per share. The first quarter loss compares with a net
loss of $14.5 million, or 6 cents per share, in the same period last year.
BMG President and Chief Operating Officer, John A. Keyes, said that
first quarter gold production of 199,000 ounces and cash costs of $168 per
ounce are better than forecast and position the Company to achieve its
production and cash cost forecasts for the year.
The average realized gold price increased slightly to $290 per
ounce, compared with $286 in the first quarter of last year. Cash flow from
operations increased to $5.5 million for the quarter as a result of improving
gold prices and production. The Company's cash position was $62.2 million at
the end of the first quarter, 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. During the quarter, the Company made additional debt
repayments under the loan facility of $10 million, necessitated by a decline
in the value of the Company's investment in the securities of Lihir Gold
Limited.
Keyes noted that the Company continues to make solid strides
forward, in spite of the continuing difficult gold price environment. In
addition to the increased production and lower cash operating costs achieved
during the quarter, the Company:
- - Identified opportunities to significantly improve the economics and expand
the production of its Phoenix project.
- - Continued to demonstrate the viability of the Llallagua bio-oxidation
project.
- - Concluded a new milling agreement at Holloway.
- - Received additional encouragement from its exploration work at Holloway
and Casposo.
OPERATIONS
In Canada, the GOLDEN GIANT mine performed well during the quarter
and is expected to be on target for the year. Block 5 production is underway
and shaft deepening operations are scheduled for completion in mid 2000. The
88%-owned KORI KOLLO mine
more....
<PAGE>
BMG REPORTS FIRST QUARTER RESULTS, ADD 1.....
in Bolivia also continued to have good performance with production slightly
ahead of plan. Cash operating costs for the period were lower than target.
Opportunities to improve productivity and to treat a portion of the Kori
Kollo ore by bio-oxidation to enhance recoveries have been identified and are
being pursued. The 84.65%-owned HOLLOWAY mine performed better than plan with
both higher throughput and higher grades. On March 14, Holloway completed 1
million hours worked without a lost time injury. In early April, a revised
custom milling agreement was concluded with Barrick Gold Corporation. The new
10-year contract addresses Holloway's long term milling issues and is
expected to lower operating costs about $15 per ounce. The mill is being
expanded, on an equal shared-cost basis, to a capacity of 1.1 million tons
per year, sufficient to allow all of Holloway's targeted production to be
processed at the facility. The expansion is expected to be completed by year
end. BMG's 50% joint venture interest in the VERA/NANCY mine at the Pajingo
complex in Queensland, Australia, performed slightly below plan, but is
expected to be on target for the year.
DEVELOPMENT
At the PHOENIX development project at the Battle Mountain Complex in
Nevada, the Company announced in mid April that it expects to significantly
improve the economics and expand production. The project is now expected to
have lower cash costs and a greater return on investment than previously
envisioned because of the higher milling rate achievable with the increasing
reserve base. The Final Feasibility study, originally scheduled for
completion at the end of the first quarter of 2000 is now expected to be
completed in the second quarter of 2000. The extra time will allow work to be
completed which targets a number of improvements.
Predicated on a $300 gold price, which was used to demonstrate the
robustness of the project, and estimated capital expenditures of $189
million, improvements in the new 30,000 ton per day (tpd) target scenario
include:
- - Increasing the milling rate by 40% to 30,000 tpd
- - Increasing production to average 385,000 oz/yr over 13 years
- - Improving pre-tax internal rate of return to over 18% and reducing pay
back to about 5 years
- - Lowering cash operating costs to below $175 per ounce
- - Incorporating sulfidization, acidification, recirculation and thickening,
or "SART" technology to increase average mill recovery of gold to 84.5%,
reduce cyanide consumption and improve copper recovery
- - Increasing reserves and resources to at least 6.2 million ounces, with
upside potential
- - Reducing the strip-ratio to 2.1:1
- - Doubling the net asset value
Keyes noted that the Phoenix project clearly stands out as one of
the best undeveloped gold projects in North America. He added that the
Company has identified, and will begin exploring, a number of potential
financing options which it believes can
more....
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BMG REPORTS FIRST QUARTER RESULTS, ADD 2.....
help overcome financing hurdles for the project created by the current low
gold price environment. Project commissioning is envisioned late in the first
quarter of 2002, assuming timely completion of permitting and construction
activities.
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. A total of 21,500 tons of bio-oxidized
ore was processed through the mill circuit in January and February. Recovery
for the material processed during the first quarter ranged between 65% and
70%, compared with original recoveries of between 18% and 39% prior to
bio-oxidation. Additional resource drilling at Llallagua was completed during
the first quarter, as was project scoping work, and mine planning efforts
began during March. The project is expected to have low development costs
using the existing Kori Kollo infrastructure.
EXPLORATION
Positive exploration developments for the first quarter include
significant drill results from the Holloway area in Canada, Copper Basin in
Nevada, Casposo in Argentina, and Llallagua in Bolivia.
Exploration in Canada during the quarter focused on the HOLLOWAY
area. Surface drilling continued on the BLACKTOP deposit near the Holloway
mine, where work to date has indicated a resource of at least 500,000 ounces
of gold, with upside potential. There is sufficient drill data on a portion
of this mineralization to outline a mineable resource of 445,000 tons,
grading 0.225 opt, or approximately 100,000 ounces which would be in the
proven and probable reserve category once access to this area is obtained. On
the Teddy Bear property surrounding the Holloway mine, exploration drilling
was initiated to evaluate three "satellite reserve" opportunities within
1,650 feet of the underground workings. The opportunities lie within the 500
XP Lightning zone, the Contact zone and the Lightning zone. Results are
pending. 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 accessed via 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 the first quarter of 2000 focused on the
Copper Basin area 7 miles to the north of Phoenix. Follow-up drilling at the
Surprise area at Copper Basin continued to generate excellent results.
Step-out holes expanded the wide intercepts of high-grade oxide gold
mineralization overlying copper ore. Some of this mineralization occurs at
depths of only 25-50 ft. beneath the bedrock surface. A six hole program in
February and early March extended the mineralized zones to the west and
southwest. Assays include 0.096 opt gold over 65 ft and 0.09 opt gold over 90
ft. Significant copper intersections were also returned, including 0.43% Cu
over 95 ft. and 1% CU over 40 ft. Follow-up drilling is under way.
more....
<PAGE>
BMG REPORTS FIRST QUARTER RESULTS, ADD 3.....
In Argentina, work focused on the CASPOSO project, where a 12-hole
7,500 foot program was completed in the Kamila, Mercado and Cerro Norte
zones. Significant results include: 0.479 opt Au and 7.58 opt Ag/30.5 ft;
0.242 opt Au and 2.87 opt Ag/34.5 ft; 0.041 opt Au and 17.28 opt Ag/26 ft;
and 0.028 opt Au and 7.39 opt Ag/23 ft. Further drilling is under way with
excellent potential to expand this resource.
OTHER
The Company has revised the financial statement presentation of its
former interest in Niugini Mining Limited (NML), which was merged with Lihir
Gold Ltd. in February 2000. The revisions have no impact on annual net
income, earnings per share or total net assets, and no ultimate impact on the
Company's March 31, 2000 cash balance.
As of December 31, 1998, the Company resolved that it would dispose
of NML and therefore deconsolidated the subsidiary from its financial
statements. However, in accordance with provisions of Statement of Financial
Accounting Standards No. 94, the Company will now present NML in its 1998
and 1999 financial statements on a consolidated basis. The Company's net
interest in NML was previously recorded as an asset held for sale of $108.3
million and $61.7 million in the Company's December 31, 1998 and 1999 balance
sheets, respectively. As a result of the revisions, it will now be recorded
in those periods primarily as cash of $49.6 million and $54.7 million,
investments in Lihir of $149.3 million and $68.4 million, and minority
interest of $89.6 million and $59.1 million, respectively. In addition, net
income for the quarter ended December 31, 1999 will be increased by $6.6
million and net income for the quarter ended September 30, 1999 will be
reduced by a corresponding amount, reflecting the reversal of the market
value gain recorded in the third quarter of 1999 associated with the NML
investment. BMG intends to amend the appropriate filings with the Securities
and Exchange Commission by mid-May 2000.
Keyes concluded that ultimately, these changes have no impact on the
economics or value of BMG and have no effect on the March 31, 2000 results of
operations, balance sheet, shareholders equity, or cash position of the
Company.
The United States Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for certain forward-looking statements. Operating, exploration
and financial data, and other statements in this document, are based on
information that the Company believes reasonable, but involve significant
uncertainties as to future gold prices, costs, ore grades, mining and
processing conditions, and regulatory and permitting matters. Actual results
and timetables could vary significantly from the estimates presented. Also
refer to the cautionary statement contained in the Company's Forms 10-K and
10-Q for the most recent reporting periods.
####
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
March 31
--------
US$ MILLIONS, EXCEPT PER SHARE AMOUNTS 2000 1999
- -------------------------------------- ---- ----
(as revised)
<S> <C> <C>
Sales $ 62.5 $ 53.8
------- -------
Costs and expenses
Production costs 39.4 35.9
Depreciation, depletion and amortization 17.5 14.4
Exploration, evaluation & other lease costs, net 3.6 3.9
General and administrative expenses 3.3 3.4
------- -------
Total costs and expenses 63.8 57.6
------- -------
Operating Loss (1.3) (3.8)
Interest expense (3.8) (3.7)
Interest income 1.1 1.6
Equity in losses of and impairment charge to Lihir - (12.2)
Foreign currency exchange gain, net 0.5 3.1
Other income, net 0.3 0.5
------- -------
Loss Before Income Taxes (3.2) (14.5)
Income tax benefit 0.9 2.1
Mining tax benefit (expense) 0.7 (0.2)
------- -------
Net Loss (1.6) (12.6)
Preferred dividends 1.9 1.9
------- -------
Net Loss to Common Shares $ (3.5) $ (14.5)
======= =======
Loss per Common Share - Basic and Diluted $ (.02) $ (.06)
======= =======
Average Common Shares Outstanding for
Basic and Diluted Loss per Share Purposes 229.9 229.8
======= =======
</TABLE>
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
US$ MILLIONS (as revised)
- ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 21.5 $ 91.0
Accounts and notes receivable, net 11.8 13.2
Product inventories 10.7 8.7
Materials and supplies, net, at average cost 21.7 22.4
Marketable equity securities 43.9 -
Other current assets 9.8 7.9
-------- --------
Total current assets 119.4 143.2
-------- --------
Investments
Investment in Lihir - 68.4
Other investments 12.1 10.6
-------- --------
Total investments 12.1 79.0
-------- --------
Restricted cash 40.7 40.0
Property, plant and equipment, net 288.7 299.6
Other assets 4.7 6.7
-------- --------
Total Assets $ 465.6 $ 568.5
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 7.5 $ 2.6
Debt due upon disposal of assets held for sale 30.0 30.0
Accounts payable 14.4 16.0
Income and mining taxes payable 14.6 16.7
Other current liabilities 17.3 23.6
-------- --------
Total current liabilities 83.8 88.9
Long-term debt 161.9 176.8
Deferred income and mining taxes 63.0 64.5
Other liabilities 54.7 54.5
-------- --------
Total Liabilities 363.4 384.7
Minority interest 5.7 65.1
Shareholders' equity 96.5 118.7
-------- --------
Total Liabilities and Shareholders' Equity $ 465.6 $ 568.5
======== ========
</TABLE>
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
March 31
--------
US$ MILLIONS 2000 1999
- ------------ ---- ----
(as revised)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1.6) $ (12.6)
Adjustments to reconcile net loss to net cash flows
from operating activities:
Depreciation, depletion and amortization 17.5 14.4
Deferred income and mining taxes (1.7) (2.9)
Equity in losses of and impairment charge to Lihir - 12.2
Foreign currency exchange gain, net (0.5) (3.1)
Change in working capital accounts, net (8.0) (4.4)
Other, net (0.2) (0.5)
------- -------
Net Cash Flows Provided by Operating Activities 5.5 3.1
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (9.5) (9.3)
Crown Butte liquidating dividend to minority shareholders - (11.0)
Effects on cash of the Niugini Mining and Lihir merger (54.7) -
Other, net (0.5) 0.2
------- -------
Net Cash Flows Used in Investing Activities (64.7) (20.1)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Debt repayments (10.0) (11.6)
Decrease in short-term borrowings - (14.9)
Cash dividend payments (1.9) (1.9)
Other, net (0.8) 0.1
------- -------
Net Cash Flows Used in Financing Activities (12.7) (28.3)
------- -------
Effect of Exchange Rate Changes on Cash 2.4 1.4
------- -------
Net Decrease in Cash and Cash Equivalents (69.5) (43.9)
Cash and cash equivalents at beginning of period 91.0 197.2
------- -------
Cash and Cash Equivalents at End of Period $ 21.5 $ 153.3
======= =======
</TABLE>
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION - (Unaudited) (1)
(Data reflects BMG attributable interests, except as noted)
(US$, ounces in thousands)
<TABLE>
<CAPTION>
Three months ended
March 31
--------
2000 1999
---- ----
<S> <C> <C>
GOLDEN GIANT
Gold ounces recovered 89 78
Silver ounces recovered 7 3
- --------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $ 149 $ 167
Depreciation, depletion and amortization 68 64
Reclamation and mine closure costs 6 4
------ ------
Total production costs $ 223 $ 235
- --------------------------------------------------------------------------------------------
KORI KOLLO (88% Interest)
Gold ounces recovered 62 64
Silver ounces recovered 132 201
- --------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced (2)
Cash production costs $ 201 $ 189
Depreciation, depletion and amortization 89 85
Reclamation and mine closure costs 5 11
------ ------
Total production costs $ 295 $ 285
- --------------------------------------------------------------------------------------------
HOLLOWAY (84.65% Interest)
Gold ounces recovered 23 20
- --------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $ 209 $ 206
Depreciation, depletion and amortization 135 126
Reclamation and mine closure costs 3 2
------ ------
Total production costs $ 347 $ 334
- --------------------------------------------------------------------------------------------
VERA/NANCY (50% Interest)
Gold ounces recovered 25 14
Silver ounces recovered 19 12
- --------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $ 121 $ 116
Depreciation, depletion and amortization 51 31
Reclamation and mine closure costs 3 1
------ ------
Total production costs $ 175 $ 148
- --------------------------------------------------------------------------------------------
============================================================================================
AGGREGATE DATA
Gold ounces recovered 199 176
Average price per gold ounce realized $ 290 $ 286
Silver ounces recovered 158 216
Average price per silver ounce realized $ 5.09 $ 5.26
- --------------------------------------------------------------------------------------------
Weighted Average Cost per Gold Ounce Produced
Cash production costs $ 168 $ 175
Depreciation, depletion and amortization 80 76
Reclamation and mine closure costs 5 6
------ ------
Total production costs $ 253 $ 257
============================================================================================
</TABLE>
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION - (Unaudited) (1)
(Data reflects BMG attributable interests, except as noted)
(US$, ounces in thousands)
<TABLE>
<CAPTION>
Three months ended
March 31
--------
2000 1999
---- ----
<S> <C> <C>
AGGREGATE DATA (cont.)
Gold ounces recovered - 100% 207 185
Gold ounces sold - 100% 212 186
Gold ounces sold - BMG share 203 177
- -------------------------------------------------------------------------------------------
Silver ounces recovered - 100% 176 244
Silver ounces sold - 100% 171 245
Silver ounces sold - BMG share 154 217
===========================================================================================
</TABLE>
(1) Cash production costs are presented in accordance with guidelines
established by The Gold Institute. In addition to mining, milling and plant
level general and administrative expenses, cash production costs include
royalties, freight, smelting costs and allowances, and production taxes.
Credits for by-product silver and copper are offset against these cash
production costs.
(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.
<TABLE>
<CAPTION>
===========================================================================================
DERIVATIVES OUTSTANDING
At April 30, 2000
-----------------
Total or
2000 2001 2002 2003 2004 Average
---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
Call options
Ounces 98 140 140 140 18 536
Average price per ounce $ 354 $ 359 $ 359 $ 359 $ 375 $ 359
Put options
Ounces 98 140 140 140 18 536
Average price per ounce $ 297 $ 298 $ 298 $ 298 $ 305 $ 298
Forwards
Ounces 25 38 38 38 2 141
Average price per ounce $ 315 $ 317 $ 317 $ 317 $ 326 $ 317
===========================================================================================
</TABLE>
The put options are the minimum price Battle Mountain will receive, while the
call options, having a higher price, allow participation in a rising gold
market. All ounces sold through the forwards will be at the stated prices.
There are no margin requirements or lease rate exposure on the above
derivatives. The above ounces represent between 9% and 24% of production each
period through the first quarter of 2004, if fully exercised.
