<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-K/A
(AMENDMENT NO. 2)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______
COMMISSION FILE NO. 1-9666
BATTLE MOUNTAIN GOLD COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 76-0151431
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
333 CLAY STREET, 42ND FLOOR, HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 650-6400
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -------------------
Common Stock New York Stock Exchange
$3.25 Convertible Preferred Stock New York Stock Exchange
Rights to Purchase Preferred Stock New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
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
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
The aggregate market value of the common stock held by
non-affiliates of the registrant was approximately $271 million as of April
30, 2000, based on the closing sales price of the registrant's common stock
as reported on the New York Stock Exchange Composite Tape on such date. As of
such date, the aggregate market value of the common stock and the
Exchangeable Shares of the registrant's wholly-owned subsidiary, Battle
Mountain Canada Ltd., together, held by non-affiliates was approximately $338
million. For purposes of the foregoing sentence only, all directors and
officers of the registrant are assumed to be affiliates.
The number of shares outstanding of the registrant's common stock as
of April 30, 2000 is 131,526,469, not including 98,859,948 shares of
Exchangeable Shares of the registrant's wholly-owned subsidiary, Battle
Mountain Canada Ltd., that entitle holders to economically equivalent rights
as the registrant's common stock and are exchangeable at any time into such
common stock on a one-for-one basis.
DOCUMENTS INCORPORATED BY REFERENCE:
LIST HEREUNDER THE FOLLOWING DOCUMENTS IF INCORPORATED BY REFERENCE
AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT IS INCORPORATED: NONE.
--------------------------------------------------------------------------------
<PAGE>
The information appearing in Part II, Item 8, of Battle Mountain
Gold Company's Annual Report on Form 10-K/A for the fiscal year ended
December 31, 1999 is hereby amended as indicated in the Index to Consolidated
Financial Statements as "II. Lihir Gold Limited" to include the following
financial statements of Lihir Gold Limited.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
II. Lihir Gold Limited
Report of the independent accountants.................................................... 2
Profit and Loss accounts for the years ended December 31, 1999, 1998 and 1997............ 3
Balance sheets as at December 31, 1999, 1998 and 1997.................................... 4,5
Statements of changes in equity for the years ended December 31, 1999, 1998 and 1997..... 6
Statements of cash flows for the years ended December 31, 1999, 1998 and 1997............ 7
Notes to the financial statements........................................................ 8
</TABLE>
<PAGE>
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PRICEWATERHOUSECOOPERS
PRICEWATERHOUSECOOPERS
6th Floor Credit House
Cuthbertson Street
PO Box 484
PORT MORESBY
PAPUA NEW GUINEA
Telephone +675 3211500
Facsimile +675 3211428
Direct fax +675 3211428
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF LIHIR GOLD LIMITED
In our opinion, the accompanying balance sheets and the related profit and
loss accounts, statements of changes in equity and cash flows present fairly,
in all material respects, the financial position of Lihir Gold Limited at
December 31, 1999, 1998 and 1997, and the results of its operations and its
cash flows for the years then ended, in conformity with International
Accounting Standards. These financial statements are the responsibility of
the Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing standards in
the United States and International Standards on Auditing. Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for the opinion expressed above.
International Accounting Standards vary in certain significant respects from
accounting principles generally accepted in the United States. The
application of the latter would have affected the determination of operating
profit after income tax for the years ended December 31, 1999, 1998 and 1997,
and the determination of shareholders' equity and financial position at
December 31, 1999, 1998 and 1997, to the extent summarized in Note 28 to the
financial statements.
/s/ PricewaterhouseCoopers
--------------------------
PricewaterhouseCoopers
Port Moresby, Papua New Guinea
12 May, 2000
2
<PAGE>
LIHIR GOLD LIMITED
PROFIT AND LOSS ACCOUNTS
FOR THE YEARS ENDED 31 DECEMBER 1999, 1998, AND 1997
<TABLE>
<CAPTION>
NOTE 1999 1998 1997
US$ 000 US$ 000 US$ 000
<S> <C> <C> <C> <C>
SALES REVENUE 206,574 184,718 56,966
----------------------------------------------------------
OPERATING EXPENSES
Mining expenses (70,703) (62,261) (15,562)
Processing costs (37,594) (30,339) (5,609)
Power generation costs (13,570) (11,097) (3,264)
General and administrative costs (32,351) (19,726) (8,427)
Refining, royalty and management fees (8,046) (7,548) (2,042)
Costs deferred and transferred to 25,593 15,258 11,588
inventories
Depreciation and amortisation (54,153) (46,123) (8,918)
----------------------------------------------------------
Total operating expenses (190,824) (161,836) (32,234)
----------------------------------------------------------
OPERATING PROFIT BEFORE ABNORMAL ITEM, INTEREST AND 15,750 22,882 24,732
TAX
Net interest expense 5 (26,120) (28,970) (6,593)
----------------------------------------------------------
OPERATING PROFIT BEFORE ABNORMAL ITEM AND INCOME TAX 5 (10,370) (6,088) 18,139
Abnormal item 5 - (9,370) -
----------------------------------------------------------
OPERATING PROFIT BEFORE INCOME TAX (10,370) (15,458) 18,139
Income tax attributable to operating profit 14 2,989 5,186 (6,338)
----------------------------------------------------------
OPERATING PROFIT AFTER INCOME TAX (7,381) (10,272) 11,801
Retained profits at the beginning of the year 1,529 11,801 -
Total available for appropriation (5,852) 1,529 11,801
----------------------------------------------------------
RETAINED PROFITS AT THE END OF THE YEAR
(5,852) 1,529 11,801
----------------------------------------------------------
</TABLE>
The accompanying notes form part of these financial accounts
3
<PAGE>
LIHIR GOLD LIMITED
BALANCE SHEETS AS AT 31 DECEMBER 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
NOTE US$ 000 US$ 000 US$ 000
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash 6 46,875 82,459 30,640
Inventories 8 31,883 22,054 21,953
Receivables and prepayments 9 14,656 7,149 6,282
Other current assets 10 5,722 12,845 6,320
-------------------------------------------------------
TOTAL CURRENT ASSETS 99,136 124,507 65,195
NON-CURRENT ASSETS
Inventories 8 16,228 6,804 4,262
Receivables and prepayments 9 5 5 418
Development and mining properties 11 862,593 882,983 889,049
Other non current assets 10 57,724 34,428 26,732
-------------------------------------------------------
TOTAL NON-CURRENT ASSETS 936,550 924,220 920,461
-------------------------------------------------------
TOTAL ASSETS 1,035,686 1,048,727 985,656
-------------------------------------------------------
CURRENT LIABILITIES
Accounts payable 12 26,300 27,442 19,459
Provisions 13 5,234 1,508 579
Borrowings 22 43,009 44,430 26,623
Deferred hedging income 23 3,592 684 -
Retentions - - 421
-------------------------------------------------------
TOTAL CURRENT LIABILITIES 78,135 74,064 47,082
NON CURRENT LIABILITIES
Provisions 13 14,220 10,268 6,131
Borrowings 22 115,552 273,869 299,328
Deferred hedging income 23 14,406 684 -
-------------------------------------------------------
TOTAL NON CURRENT LIABILITIES 144,178 284,821 305,459
-------------------------------------------------------
TOTAL LIABILITIES 222,313 358,885 352,541
-------------------------------------------------------
NET ASSETS 813,373 689,842 633,115
-------------------------------------------------------
SHAREHOLDERS' EQUITY
Paid up capital 18 819,225 688,313 621,314
Retained Earnings (5,852) 1,529 11,801
4
<PAGE>
LIHIR GOLD LIMITED
BALANCE SHEETS AS AT 31 DECEMBER 1999, 1998 AND 1997 (CONT'D)
<S> <C> <C> <C> <C>
-------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 813,373 689,842 633,115
-------------------------------------------------------
</TABLE>
COMMITMENTS 20
CONTINGENT LIABILITIES 21
The accompany notes form part of the financial statements.
5
<PAGE>
LIHIR GOLD LIMITED
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
SHARE RETAINED
CAPITAL EARNINGS TOTAL
NOTE US$ 000 US$ 000 US$ 000
<S> <C> <C> <C> <C>
Balance at 1 January 1997 621,314 - 621,314
-----------------------------------------------
Net profit/(loss) for the year - 11,801 11,801
-----------------------------------------------
BALANCE AT DECEMBER 31, 1997 621,314 11,801 633,115
-----------------------------------------------
Net profit/(loss) for the year - (10,272) (10,272)
Issue of share capital 66,999 - 66,999
-----------------------------------------------
BALANCE AT DECEMBER 31, 1998 18 688,313 1,529 689,842
-----------------------------------------------
Net profit/(loss) for the year - (7,381) (7,381)
Issue of share capital 130,912 - 130,912
-----------------------------------------------
BALANCE AT DECEMBER 31, 1999 18 819,225 (5,852) 813,373
-----------------------------------------------
</TABLE>
The accompanying notes form part of the financial statements.
6
<PAGE>
LIHIR GOLD LIMITED
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
US$ 000 US$ 000 US$ 000
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from operating activities 206,574 184,718 56,966
Payments arising from operating activities (172,184) (132,049) (50,466)
----------------------------------------------------
34,390 52,669 6,500
Interest income 3,202 3,654 633
Interest paid to third parties (29,322) (32,624) (6,135)
Income taxes paid - - -
----------------------------------------------------
NET CASH FLOWS FROM OPERATING ACTIVITIES 8,270 23,699 998
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings - 4,900 261,527
Restructure of hedge book 20,586 - -
Repayment of term debt (162,002) (11,262) -
Proceeds from issue of shares 130,912 67,000 -
----------------------------------------------------
(10,504) 60,638 261,527
CASH FLOWS FROM INVESTING ACTIVITIES
Property plant and equipment (33,378) (32,518) (216,813)
Proceeds from sale of fixed assets 28 - -
Decrease (Increase) in debtors - - (1,994)
Decrease (Increase) in inventories - - (14,773)
Decrease (Increase) in other assets - - (2,848)
Increase (Decrease) in creditors - - (29,366)
Increase (Decrease) in other provisions - - 632
Interest received - - 1,550
Interest paid to third parties - - (12,275)
----------------------------------------------------
(33,350) (32,518) (275,887)
----------------------------------------------------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (35,584) 51,819 (13,362)
----------------------------------------------------
Cash balance at beginning of year 82,459 30,640 44,002
Cash balance at end of year 46,875 82,459 30,640
----------------------------------------------------
(35,584) 51,819 (13,362)
----------------------------------------------------
</TABLE>
The accompanying notes form part of these financial statements.
7
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are presented in accordance with the Papua New
Guinea Companies Act 1997, and comply with applicable financial reporting
standards and other mandatory professional reporting requirements approved
for use in Papua New Guinea by the Accounting Standards Board (ASB). The ASB
has adopted International Accounting Standards and Interpretations issued by
the Standing Interpretations Committee as the applicable financial reporting
framework.
The financial statements have also been prepared on the basis of historical
costs and do not take into account changing money values. Cost is based on
the fair values of the consideration given in exchange for assets. The
accounting policies have been consistently applied, unless otherwise stated.
The following is a summary of the significant accounting policies adopted by
the Company in the preparation of the financial statements.
(a) EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure is accumulated separately for
each area of interest. Exploration expenditure is fully written off in
the financial year in which it is incurred, unless recoupment from
revenue to be derived from the relevant area of interest or mineral
resource, or from the sale of that area of interest, is reasonably
assured.
Evaluation expenditure is capitalised, to the extent to which its
recoupment out of revenue to be derived from the relevant area of
interest/mineral resource, or from sale of that area of interest, is
reasonably assured.
Exploration or evaluation expenditure written off, or provided against,
is reinstated when recoupment out of revenue to be derived from the
relevant area of interest or mineral resource, or from sale of that
area of interest, is reasonably assured. For the periods presented,
exploration or evaluation expenditure written off have not been
re-instated.
(b) DEVELOPMENT PROPERTIES
Development expenditure is accumulated separately for each area of
interest in which economically recoverable mineral reserves have been
identified and are reasonably assured.
Once a development decision has been taken, all past and future
exploration and evaluation expenditure in respect of the area of
interest is aggregated with the costs of development and classified
under non-current assets as "Development Properties".
All expenditure incurred prior to the commencement of commercial levels
of production from each development property is carried forward to the
extent to which recoupment out of revenue to be derived from the sale
of production from the relevant development property, or from sale of
that property, is reasonably assured.
No amortisation is provided in respect of development properties until
they are reclassified as "Mine Properties", following the commencement
of commercial production.
8
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(c) MINE PROPERTIES
Mine properties represent the accumulation of all exploration,
evaluation, and development expenditure incurred by or on behalf of the
Company in relation to areas of interest in which mining of a mineral
resource has commenced.
When future economic benefits are established by further development
expenditure in respect of a mine property after the commencement of
production, such expenditure is carried forward as part of the cost of
that mine property. Otherwise such expenditure is classified as part of
the cost of production.
Amortisation of costs is provided on the unit-of-production method,
separate calculations being made for each mineral resource. The
unit-of-production basis results in an amortisation charge proportional
to the depletion of estimated recoverable gold ounces contained in
proved and probable ore reserves.
Where a change in estimated recoverable gold ounces containing proved
and probable ore reserves is made, depreciation and amortisation of
mine properties is accounted for in the current accounting period.
(d) CAPITALISATION OF FINANCING COSTS
Interest, other financing costs and foreign exchange differences are
classified as part of development and mine properties where they relate
to funds raised for developing those properties. Interest earned on the
temporary investment of borrowed funds and funds received in connection
with the sale of equity securities prior to the expenditure being made
is deducted from interest paid on the borrowed funds in arriving at the
amounts so capitalised. These are amortised using the
unit-of-production method based on recoverable gold ounces.
(e) MINE BUILDINGS, MACHINERY AND EQUIPMENT
The cost of each item of buildings, machinery and equipment is
depreciated over its expected useful life. For the majority of assets
this is accomplished using the unit-of-production method based on
recoverable gold ounces, although some assets are depreciated using a
percentage based on time. Each item's economic life has due regard to
both physical life limitations and to present assessments of
economically recoverable reserves of the mine property (where
appropriate) and to possible future variations in those assessments.
Estimates of remaining useful lives are made on a regular basis for all
assets, with annual reassessments for major items.
The total net carrying values of mine building, machinery and equipment
at each mine property are reviewed regularly and, to the extent to
which these values exceed their recoverable amounts, that excess is
fully provided against in the financial year in which this is
determined.
Major spares purchased specifically for particular plant are included
in the cost of plant and are depreciated over the expected useful life
of the item of plant.
9
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(f) REMAINING MINE LIVES
In estimating the remaining life of the mine at each mine property for
the purpose of amortisation and depreciation calculations, due regard
is given, not only to the amount of remaining recoverable gold ounces,
but also to limitations which could arise from the potential for
changes in technology, demand, product substitution and other issues
which are inherently difficult to estimate over a lengthy time frame.
(g) IMPAIRMENT OF ASSETS
Impairments of assets are recognised whenever the carrying amount of an
asset exceeds its recoverable amount. The recoverable amount is
measured as the higher of net selling price and value in use. Value in
use for individual assets is calculated by discounting future cash
flows using a risk adjusted pre-tax discount rate.
(h) RESTORATION, REHABILITATION AND ENVIRONMENTAL EXPENDITURE
In accordance with IAS 37 "Provisions, Contingent Liabilities and
Contingent Assets", the amount of any provision recognised is the full
amount that has been estimated based on current costs to be required to
settle present obligations, discounted using a pre-tax risk-free
interest rate of 2.5%. Estimates of future costs are reassessed
annually.
A corresponding asset, which represents future economic benefits, is
raised and subsequently amortised using the units of production method.
The company has a rehabilitation policy which identifies the
environmental, social and engineering issues to be considered and the
procedures to be followed when providing for costs associated with the
site closure. Site rehabilitation and closure involves the dismantling
and demolition of infrastructure not intended for subsequent community
use, the removal of residual materials and the remediation of disturbed
areas. Community requirements and long term land use objectives are
also taken into account.
The adoption of IAS 37 has not resulted in a material adjustment and
therefore the comparatives and opening retained earnings have not been
restated.
(i) INVENTORIES
Inventories of ore and metal are physically measured or estimated and
valued at the lower of cost and net realisable value.
Cost comprises direct material, direct labour and transportation
expenditure in getting such inventories to their existing location and
condition, together with an appropriate portion of fixed and variable
overhead expenditure and depreciation and amortisation, based on
weighted average costs incurred during the period in which such
inventories are produced. Net realisable value is the amount estimated
to be obtained from sale of the item of inventory in the normal course
of business, less any anticipated costs to be incurred prior to its
sale.
10
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Inventories of consumable supplies and spare parts expected to be used
in production are valued at the lower of weighted average cost, which
includes the cost of purchase as well as transportation and statutory
charges, and net realisable value.
(j) DEFERRED MINING COSTS
Direct expenditure on mining is brought to account for each phase of
the mine's development based on the estimated ratio of waste to ore for
that phase. During the mining period the actual ratio of waste to ore
removed for each phase varies from year to year. In periods where more
than the average amount of waste is removed the surplus is transferred
to the deferred mining cost account. It is subsequently expensed during
periods where the waste to ore ratio is less than the average. The
average amount of waste to be removed is assessed according to each
mining phase, and not over the entire life of the mine.
(k) REVENUE RECOGNITION
Sales are recognised as revenue only when there has been a passing of
risk to the customer, and:
- the product is in a form suitable for delivery and no further
processing is required by, or on behalf of, the Company;
- the quantity and quality (grade) of the product can be determined
with reasonable accuracy;
- the product has been despatched to the customer and is no longer
under the physical control of the Company (or property in the
product has earlier passed to the customer); and
- the selling price can be measured reliably.
Sales revenue represents the gross proceeds receivable from the
customer.
Revenue received from sale/disposal of product, materials or services
during the exploration, expenditure or development phases of operations
is offset against expenditure in respect of the area of
interest/mineral resource concerned.
(l) GOLD HEDGING
Hedging is undertaken to ensure a minimum level of income, and not for
speculative purposes. Any costs incurred in purchasing options, forward
contracts and other derivative instruments are capitalised, and charged
to profit when the position expires, either through delivery of the
underlying gold or through the passage of time.
Where a hedged transaction is terminated prior to its maturity date and
the underlying sale is still expected to occur, it is the Company's
policy to defer any gains and losses that arise from the early
termination, and to bring them to account over the periods when the
hedged transaction was expected to take place.
All unrealised gains and losses are brought to account upon expiry, and
not progressively through time. The Company does not trade derivative
financial instruments.
11
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(m) EMPLOYEE ENTITLEMENTS
(i) WAGES AND SALARIES
A liability for wages and salaries is recognised, and measured
as the amount unpaid at balance date at current pay rates in
respect of employees' services up to that date.
(ii) ANNUAL AND LONG SERVICE LEAVE & OTHER ACCRUED BENEFITS
A liability for annual and long service leave is recognised
and measured with reference to existing entitlements and
salary and measured as the amount unpaid at balance date at
current pay rates in respect of employees services up to that
date.
(n) FOREIGN CURRENCY TRANSLATION
As the Company's turnover is denominated in US dollars and the majority
of its fixed asset purchases and costs are in US dollars or currencies
related to US dollars, the Company's Directors have adopted the US
dollar as the Company's functional and management reporting currency.
Foreign currency transactions (other than US dollars) are initially
translated into US currency at the rate of exchange at the date of the
transaction. At the date of the balance sheet, amounts payable and
receivable in foreign currencies are translated to US dollars at rates
of exchange current at that date. Resulting exchange differences are
brought to account in determining the profit or loss for the year.
The Company's Kina figures are translated from US Dollars at the rate
prevailing at December 31, 1999 of PGK 1.00 = USD 0.375 (1998: PGK 1.00
= USD 0.475). Movements in the share capital account are accounted for
as a capital reserve.
(o) INCOME TAX
Tax effect accounting procedures are followed whereby the income tax
expense in the profit and loss account is matched with the accounting
profit (after allowing for permanent differences). Income tax on
temporary differences is set aside to the deferred income tax and
future tax benefit accounts at current rates. The future tax benefit
relating to deductible temporary differences and tax losses is only
carried forward as an asset to the extent that it is probable that
taxable profit will be available against which the deductible temporary
differences and tax losses can be utilised.
(p) LEASES
Leases of fixed assets where substantially all the risks and benefits
incidental to the ownership of the asset, but not the legal ownership
transferred to the Company, are classified as finance leases. Finance
leases are capitalised, recording an asset and liability equal to the
present value of the minimum lease payments, including any guaranteed
residual values. Leased assets are amortised over their estimated
useful lives. Lease payments are allocated between the reduction of
the lease liability and the lease interest expense for the period.
Lease payments for operating leases, where substantially all the risks
and benefits remain with the lessor, are charged as expenses in the
periods in which they are incurred.
12
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(q) CASH
For the purpose of the statement of cash flows, cash includes:
(i) cash on hand and in at call deposits with banks or financial
institutions, net of bank overdrafts; and
(ii) investments in money market instruments with less than 90 days
to maturity.
(r) COMPARATIVE FIGURES
Where necessary, comparative figures have been adjusted to conform with
changes in presentation in the current year.
(s) ROUNDING OF AMOUNTS
The financial statements and directors' report have been rounded to the
nearest thousand dollars.
(t) SIGNIFICANT RISKS AND UNCERTAINIES
The reserve estimates presented are estimates based on a gold price of
$350 per ounce for the cut off grade of 2.2g Au/t using the end 1998
mine life cost estimates and within a mine pit designed at $350 per
ounce. As of December 31, 1999 the Company's estimated proved and
probable reserves stood at 11.2 million contained ounces. The Company
believes that $350 per ounce is the appropriate long-term gold price to
estimate the value of these reserves. If the long-term gold price were
to fall to $300 per ounce, the Company's proved and probable reserves
would be reduced to 9.9 million ounces.
The Lihir operation is also subject to the provisions of the PNG Mining
Act 1992 which governs the granting of mining rights and the conditions
upon which those rights may be terminated. In particular, the Company
is party to a mining development contract, dated March 17, 1995 (the
"Mining Development Contract"), with the PNG Government which sets
forth the terms upon which the Company may exercise its rights under
the Special Mining Lease which governs the Lihir operation. Under
certain limited circumstances, the PNG Government may terminate the
Mining Development Contract and therefore, the Special Mining Lease.
Any such termination would prohibit the continued operation of the
Lihir operation.
(u) USE OF ESTIMATES
The preparation of financial statements in accordance with
International Accounting Standards requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. The most significant
estimates and assumptions relate to the long-term gold price, mineral
reserves and remaining mine lives, provision for restoration and
rehabilitation obligations, valuation allowance for deferred tax
assets, recoverability of long-lived assets (including ore stock piles)
and depreciation. Actual results could differ from those estimates and
may affect amounts reported in future periods. Management believes that
the estimates are reasonable.
13
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 2: SPECIAL MINING LEASE
The Special Mining Lease was issued on 17 March, 1995 and has a term of 40
years. Under the Mining Act it may be renewed for subsequent 20 year periods at
the discretion of the PNG Government.
NOTE 3: REQUIREMENTS REGARDING CASH RESERVES
The Papua New Guinea Central Banking (Foreign Exchange and Gold) Regulations
generally require PNG companies to hold all cash reserves in Kina. Prior
approval of the Bank of Papua New Guinea is required to convert funds from
Kina into other currencies.
Under the Mining Development Contract, however, the Company has permission to
retain funds in foreign currencies to meet its obligations.
NOTE 4: DIVIDEND RESTRICTIONS
The Loan Agreement permits the payment of dividends only on the quarterly
payment dates and only if certain conditions are met, including a condition
that after payment of such dividends and all other payments required under
the Loan Agreement the company has a specified minimum cash balance in an
offshore account and a Debt Cover ratio (as defined in the Loan Agreement) of
not less than 1.25:1.
NOTE 5: OPERATING PROFIT
<TABLE>
<CAPTION>
US$ 000
1999 1998 1997
<S> <C> <C> <C>
Operating loss before taxation has been determined after crediting /
(charging):
Interest income 3,202 3,654 633
Interest and finance expenses (29,322) (32,624) (7,226)
Royalties on sales (4,074) (3,792) (1,151)
Net foreign exchange gains/(losses) (589) 2,096 30
Provisions for employee benefits (2,225) (2,614) (207)
Amortisation of hedging gains 3,956 - -
Amortisation of hedging costs (4,481) (3,246) -
Staff costs (14,879) (13,450) (3,862)
Donations and community assistance (235) (60) (3)
Provision for stock obsolescence (1,000) - -
Abnormal charge - impairment of low grade stockpile - (9,370) -
(Applicable income tax expense $3.3 m)
</TABLE>
14
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NOTE 6: CASH
US$ 000
1999 1998 1997
<S> <C> <C> <C>
Cash at bank and on hand 20,537 39,245 5,364
Short term deposits with financial institutions 26,338 43,214 25,276
--------------- --------------- ----------------
46,875 82,459 30,640
--------------- --------------- ----------------
NOTE 7: STATEMENT OF CASH FLOWS
US$ 000
1999 1998 1997
Reconciliation of cash flow from operating activities to
operating profit after tax
Operating profit/(loss) after tax (7,381) (10,272) 11,801
Depreciation and amortisation 54,153 46,123 8,918
Loss on disposal of assets 243 170 (17)
(Increase)/Decrease in debtors (7,507) (454) (4,665)
(Increase)/Decrease in inventories (19,253) (2,643) (11,442)
(Increase)/Decrease in future income tax benefit (7,264) (1,089) (64)
(Increase)/Decrease in other assets (13,390) (16,378) (9,642)
(Decrease)/Increase in creditors 1,112 7,983 548
(Decrease)/Increase in deferred tax 4,253 (4,320) 5,869
(Decrease)/Increase in rehabilitation 1,079 600 -
(Decrease)/Increase in other provisions 2,225 3,979 (308)
---------------- --------------- ---------------
Net cash flow from operating activities 8,270 23,699 998
---------------- --------------- ---------------
NOTE 8: INVENTORIES
US$ 000
1999 1998 1997
CURRENT
Stores 26,167 18,117 14,354
Less: Provision for obsolescence 1,000 - -
--------------- --------------- ----------------
25,167 18,117 14,354
Production work in progress 1,658 1,556 4,811
Finished goods 1,979 1,053 -
Ore stockpiles 3,079 1,328 2,788
--------------- --------------- ----------------
Total current inventories 31,883 22,054 21,953
NON-CURRENT
Ore stockpiles 16,228 6,804 4,262
--------------- --------------- ----------------
Total inventories 48,111 28,858 26,215
--------------- --------------- ----------------
</TABLE>
15
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NOTE 9: RECEIVABLES AND PREPAYMENTS
US$ 000
1999 1998 1997
<S> <C> <C> <C>
CURRENT
Prepayments 4,824 3,410 2,969
Insurance claims receivable - - 805
Other amounts receivable from:
- third parties 10,027 3,739 2,508
Less: Provision for doubtful debts 195 - -
--------------- --------------- ----------------
14,656 7,149 6,282
NON-CURRENT
Prepayments - - 413
Other amounts receivable 5 5 5
--------------- --------------- ----------------
5 5 418
--------------- --------------- ----------------
Total amounts receivable and prepayments 14,661 7,154 6,700
--------------- --------------- ----------------
NOTE 10: OTHER ASSETS
US$ 000
1999 1998 1997
CURRENT
Future income tax benefit - - 25
Hedging costs 4,424 4,469 3,246
Deferred mining costs 1,298 8,376 3,049
--------------- --------------- ----------------
5,722 12,845 6,320
NON-CURRENT
Future income tax benefit 8,417 1,153 39
Hedging costs 8,345 12,781 17,250
Deferred mining costs 40,962 20,494 9,443
--------------- --------------- ----------------
57,724 34,428 26,732
--------------- --------------- ----------------
Total Other Assets 63,446 47,273 33,052
--------------- --------------- ----------------
</TABLE>
16
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 11: DEVELOPMENT AND MINING PROPERTIES
<TABLE>
<CAPTION>
US$ 000
1999 1998 1997
<S> <C> <C> <C>
CAPITAL WORKS IN PROGRESS
Cost brought forward 30,939 3,572 670,412
Acquisitions and disposals 33,378 32,446 240,014
Interest received - - (12,275)
Transfers to mining properties (49,834) (5,079) (894,579)
--------------- --------------- ----------------
Costs carried forward 14,483 30,939 3,572
--------------- --------------- ----------------
MINING PROPERTIES
PLANT AND EQUIPMENT
Cost brought forward 416,458 412,024 -
Transfers from capital works in progress 44,037 4,562 412,225
Transfer to other mining properties (1,831) (26) -
Acquisitions and disposals (499) (102) (201)
--------------- --------------- ----------------
Cost carried forward 458,165 416,458 412,024
Depreciation brought forward (25,647) (4,549) -
Charge for the year (26,483) (21,107) (4,566)
Transfer to other mining properties 756 - -
Disposals 228 9 17
--------------- --------------- ----------------
Depreciation carried forward (51,146) (25,647) (4,549)
--------------- --------------- ----------------
Net book value 407,019 390,811 407,475
--------------- --------------- ----------------
LAND AND BUILDINGS
Cost brought forward 71,596 71,496 -
Transfers from capital works in progress 5,274 74 71,496
Transfers from other mining properties - 26 -
--------------- --------------- ----------------
Cost carried forward 76,870 71,596 71,496
Depreciation brought forward (3,906) (643) -
Charge for the year (4,038) (3,262) (643)
Transfers from other mining properties (1) (1) -
--------------- --------------- ----------------
Depreciation carried forward (7,945) (3,906) (643)
--------------- --------------- ----------------
Net book value 68,925 67,690 70,853
--------------- --------------- ----------------
</TABLE>
17
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
US$ 000
1999 1998 1997
<S> <C> <C> <C>
CAPITALISED EXPLORATION
Cost brought forward 146,374 146,374 -
Transfers from capital works in progress development properties - - 146,374
Acquisitions and disposals - - -
--------------- --------------- ----------------
Cost carried forward 146,374 146,374 146,374
Depreciation brought forward (7,998) (1,317) -
Charge for the year (8,053) (6,681) (1,317)
Disposals - - -
--------------- --------------- ----------------
Depreciation carried forward (16,051) (7,998) (1,317)
--------------- --------------- ----------------
Net book value 130,323 138,376 145,057
--------------- --------------- ----------------
DEFERRED EXPENDITURE
Cost brought forward 263,285 264,484 -
Transfers from capital works in progress 523 443 264,484
Transfer from other mining properties 1,831 - -
Acquisitions and disposals - (1,642) -
--------------- --------------- ----------------
Cost carried forward 265,639 263,285 264,484
Depreciation brought forward (14,393) (2,392) -
Charge for the year (14,555) (12,001) (2,392)
Transfers from other mining properties (755) - -
--------------- --------------- ----------------
Depreciation carried forward (29,703) (14,393) (2,392)
--------------- --------------- ----------------
Net book value 235,936 248,892 262,092
--------------- --------------- ----------------
TOTAL MINING PROPERTIES
Cost brought forward 897,713 894,378 -
Transfers from development properties 49,834 5,079 894,579
Acquisitions and disposals (499) (1,744) (201)
--------------- --------------- ----------------
Cost carried forward 947,048 897,713 894,378
Depreciation brought forward (51,944) (8,901) -
Charge for the year (53,129) (43,051) (8,918)
Disposals 228 8 17
--------------- --------------- ----------------
Depreciation carried forward (104,845) (51,944) (8,901)
--------------- --------------- ----------------
Net book value 842,203 845,769 885,477
--------------- --------------- ----------------
</TABLE>
18
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
US$ 000
1999 1998 1997
<S> <C> <C> <C>
REHABILITATION
Cost brought forward 6,775 - -
Acquisitions and disposals 121 6,775 -
--------------- --------------- ----------------
Cost carried forward 6,896 6,775 -
Amortisation brought forward (500) - -
Charge for the year (489) (500) -
Disposals - - -
--------------- --------------- ----------------
Amortisation carried forward (989) (500) -
--------------- --------------- ----------------
Net book value 5,907 6,275 -
--------------- --------------- ----------------
--------------- --------------- ----------------
TOTAL DEVELOPMENT AND MINING PROPERTIES 862,593 882,983 889,049
--------------- --------------- ----------------
</TABLE>
NOTE 12: ACCOUNTS PAYABLE
<TABLE>
<CAPTION>
US$ 000
1999 1998 1997
<S> <C> <C> <C>
CURRENT
Trade creditors and accruals 23,898 24,056 17,510
Amounts payable to related bodies 2,402 3,386 1,949
--------------- --------------- ----------------
26,300 27,442 19,459
--------------- --------------- ----------------
</TABLE>
NOTE 13: PROVISIONS
<TABLE>
<CAPTION>
US$ 000
1999 1998 1997
<S> <C> <C> <C>
CURRENT
Employee provisions - current 5,234 1,508 579
NON CURRENT
Employee provisions - non current 443 1,944 262
Deferred income tax 5,802 1,549 5,869
Rehabilitation provision 7,975 6,775 -
--------------- --------------- ----------------
14,220 10,268 6,131
--------------- --------------- ----------------
Total provisions 19,454 11,776 6,710
--------------- --------------- ----------------
</TABLE>
19
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 14: INCOME TAX
INCOME TAX EXPENSE HAS BEEN CALCULATED AS FOLLOWS:
<TABLE>
<CAPTION>
US$ 000
1999 1998 1997
<S> <C> <C> <C>
PROFIT/(LOSS) FOR THE YEAR (10,370) (15,458) 18,139
Prima facie income tax credit on operating loss at 35% (3,629) (5,410) 6,348
Tax effect of permanent differences
- non-deductible entertainment 1 5 -
- non-deductible superannuation 174 180 -
- non-deductible rehabilitation 384 13 -
- exempt interest income - (59) (10)
--------------- --------------- ----------------
INCOME TAX ADJUSTED FOR PERMANENT DIFFERENCES (3,070) (5,271) 6,338
Under provision in previous years 81 85 -
--------------- --------------- ----------------
INCOME TAX EXPENSE ATTRIBUTABLE TO OPERATING PROFIT (2,989) (5,186) 6,338
--------------- --------------- ----------------
DEFERRED TAX PROVISION
Balance carried forward (5,802) (1,549) (5,869)
This balance comprises the tax effect of:
Depreciation (4,693) (666) (5,033)
Prepayments (710) (883) (836)
Other (399) - -
--------------- --------------- ----------------
(5,802) (1,549) (5,869)
--------------- --------------- ----------------
FUTURE INCOME TAX BENEFIT
Balance carried forward 8,417 1,153 64
This balance comprises the tax effect of:
Provisions 2,097 890 39
Deferred hedging income 6,299 - -
Other 21 263 25
--------------- --------------- ----------------
8,417 1,153 64
--------------- --------------- ----------------
</TABLE>
20
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 15: REMUNERATION AND RETIREMENT BENEFITS
(a) Directors' remuneration, including the value of benefits received during
the year:
<TABLE>
<CAPTION>
US$ 000
1999 1998 1997
<S> <C> <C> <C>
Baker, Phillips - - -
Baylis, Joseph - - -
Garnaut, Ross 68 71 69
Leslie, Jonathan - - -
Ives, Glenn (Retired 20/01/00) - - -
Louden, Geoff - - -
Merton, Michael 423 445 -
O'Reilly, John - 383 354
Siaguru, Anthony 27 28 23
Soipang, Mark 3 2 4
Taylor, Meg (Retired 30/06/99) 17 25 24
Telfer, Ian (Retired 02/03/00) - - -
Vickerman, Andrew - 52 253
</TABLE>
In addition, during the year the Company paid a premium of US$113,000 for
Directors and Officers Liability Insurance.
21
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(b) The number of employees, not including directors, whose remuneration and
benefits exceeded K100,000 fall into the following bands:
<TABLE>
<CAPTION>
NUMBER OF EMPLOYEES
US$ 1999 1998 1997
<S> <C> <C> <C>
$37,501 - $41,250 9 2 7
$41,251 - $45,000 8 2 4
$45,001 - $48,750 5 3 18
$48,751 - $52,500 3 5 6
$52,501 - $56,250 4 18 9
$56,251 - $60,000 4 7 4
$60,001 - $63,750 3 7 6
$63,751 - $67,500 3 5 -
$67,501 - $71,250 3 6 -
$71,251 - $75,000 1 2 4
$75,001 - $78,750 2 2 -
$78,751 - $82,500 6 - 1
$82,501 - $86,250 - 2 -
$86,251 - $90,000 1 1 1
$90,001 - $93,750 6 - -
$93,751 - $97,500 9 - -
$97,501 - $101,250 4 2 -
$101,251 - $105,000 3 - -
$105,001 - $108,750 5 - -
$108,750 - $112,500 3 - 1
$112,501 - $116,250 2 1 -
$116,251 - $120,000 3 - -
$120,001 - $123,750 3 - -
$123,751 - $127,500 1 - -
$131,251 - $135,000 1 - -
$135,001 - $138,750 1 - -
$153,750 - $157,500 1 - -
$172,501 - $176,250 2 - -
$183,751 - $187,500 1 - -
$202,501 - $206,250 1 - -
</TABLE>
22
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 16: RETIREMENT BENEFITS
Senior employees of the Company participate in a retirement benefit plan, and
contributions are made to the plan by the Company based on a fixed percentage of
the employee's base salary. Employer contributions during the year were $497,000
(1998 $515,000).
The Company also participates in the National Provident Fund of Papua New Guinea
in respect of its Papua New Guinean employees. Employer contributions during the
year amounted to $393,000 (1998 $216,000).
NOTE 17: AUDITORS' REMUNERATION
<TABLE>
<CAPTION>
US$ 000
Fees received by the Company's auditors for: 1999 1998 1997
<S> <C> <C> <C>
- auditing the accounts 85 85 110
- other services 54 70 51
NOTE 18: SHARE CAPITAL
US$ 000
1999 1998 1997
(a) ISSUED AND PAID UP CAPITAL
Opening balance 688,313 621,314 621,314
Shares issued 130,912 66,999 -
------------------------------------------
Closing balance 819,225 688,313 621,314
------------------------------------------
</TABLE>
In October 1999 the Company granted 12,531,170 options to Mineral Resources
Lihir Limited, exercisable in whole or part at any time up to and including 31
January 2000 at market price less a discount of 13.17%. The options were not
exercised and lapsed on 31/1/2000.
23
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 19: RESERVES
In accordance with the Papua New Guinea Companies Act, Share Premium Reserves
are no longer shown in the accounts as a separate item, but are instead included
as part of Paid Up Capital.
NOTE 20: CAPITAL AND LEASING COMMITMENTS
<TABLE>
<CAPTION>
(a) Operating Lease Commitments
US$ 000
Non-cancellable operating leases contracted for but
not capitalised in the accounts 1999 1998 1997
<S> <C> <C> <C>
Payable
- not later than one year 472 534 426
- later than one year but not later than 2 years 351 472 296
- later than two years but not later than 5 years 115 466 374
---------------------------------------
938 1,472 1,096
---------------------------------------
(b) Capital Expenditure Commitments
US$ 000
1999 1998 1997
Capital expenditure commitments contracted for:
Capital expenditure projects 17,900 48,074 9,212
Payable
- not later than one year 17,900 48,074 9,212
</TABLE>
NOTE 21: CONTINGENT LIABILITIES
GUARANTEES
As part of the Company's support of Lihirian owned businesses, the Company has
provided a number of guarantees to various financiers in favour of Lihirian
companies. These guarantees total approximately US$5 million.
The Company has also arranged the supply of various bank guarantees to companies
with which the Company conducts business. The Company would be obliged to meet
any amounts called under these guarantees, which total approximately US$10
million.
CLAIMS
There are no outstanding claims against the company.
24
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 22: FINANCE FACILITIES
The major facilities are summarised as follows:
(a) PROJECT FINANCING FACILITY
The Limited Recourse Project Financing Facility is syndicated between
26 banks, and is scheduled to be repaid by June 2003. Interest payments
under the facility are based on LIBOR plus a margin which varies over
time. Mandatory prepayments are required under the Loan Agreement under
certain conditions. The Company has provided a range of covenants and
warranties in relation to the facility, as follows:
COVENANTS OF THE COMPANY
The Company has agreed that during the term of the Loan Agreement it
will, among other things: (a) not engage in any business other than the
Lihir operation or any business related to other exploration licenses
granted by the PNG government (such other businesses to be funded
through shareholder equity, proceeds from subordinated debt or funds
from the Expansion Account); (b) with certain exceptions, not sell,
lease or otherwise dispose of any of the Lihir operation assets except
for the production of the Lihir operation; (c) construct and operate
the Lihir operation substantially in accordance with the Approved
Proposal for Development and good international mining practice; (d)
use its best efforts to procure Completion by December 31, 1999; (e)
not incur indebtedness for borrowed money in addition to the Loan
except certain subordinated loans and certain permitted senior
unsecured working capital facilities; (f) incur no liens or
encumbrances upon any Lihir operation assets, except permitted
encumbrances; (g) use the Loan proceeds solely for purposes of the
Lihir operation; (h) enter into hedging agreements as required by the
Loan Agreement to protect itself and the Banks against fluctuations in
the price of gold; (i) not terminate the Management Agreement or
appoint a successor Manager not wholly owned and controlled by Rio
Tinto, or amend the Management Agreement in any material respect
adverse to the Banks or the Company; and (j) indemnify the Banks
against certain liabilities they may incur arising out of use or
disposal by the Company of hazardous substances or failure by the
Company to comply with PNG environmental laws.
The Loan Agreement specifies a number of "Events of Default". These
events are generally conditions that may adversely affect the ability
of the company to meet its obligations under the Loan Agreement and may
comprise of factors which are controlled or uncontrolled by the
Company. Where default has occurred, the agent for the Banks may take
control of the Kina and non-Kina accounts of the Company and apply it
in accordance with the Loan Agreement, but in a manner that does not
prevent the Company from remedying the Default. At 31 December 1999,
there was no default under the Loan Agreement.
During the year the Company made a voluntary pre-payment of
USD115,500,000.
25
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(b) LOAN FACILITY EUROPEAN INVESTMENT BANK ("EIB")/ MINERAL RESOURCES
DEVELOPMENT COMPANY LTD ("MRDC")
The Company entered into an Agreement with EIB and MRDC whereby the
European Investment Bank has loaned funds to MRDC who then on lent
those funds to the Company. The amount of the loan was US$26.5 million
when drawn down. The funds are provided to MRDC at a concessionary rate
of interest. The interest rate payable by the Company is 8.42%. The
Loan Principal is repayable in 16 semi-annual instalments commencing
four years after loan signature. The payment of interest under the Loan
has been deferred during the construction and early operating period,
and will begin when permitted under the Limited Recourse Financing
Facility. The Loan is unsecured.
The following table details the profile of debt repayments:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Repayment Maturity LIMITED RECOURSE
FACILITY EIB FACILITY TOTAL
($ 000) ($ 000) ($ 000)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LESS THAN ONE YEAR 36,182 6,827 43,009
---------------------------------------------------------------------------------------------
36,182 3,773 39,955
BETWEEN ONE AND TWO YEARS
---------------------------------------------------------------------------------------------
BETWEEN TWO AND THREE YEARS 36,182 3,773 39,955
---------------------------------------------------------------------------------------------
IN EXCESS OF THREE YEARS 18,091 17,551 35,642
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Total 126,637 31,924 158,561
---------------------------------------------------------------------------------------------
</TABLE>
Interest accrued at December 31, 1999 was $1,431,000 (1998: $3,413,000), and is
included in Accounts Payable. Principal repayments due in less than one year and
accrued interest are included in Current Liabilities in the Balance Sheet.
26
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 23: HEDGING INSTRUMENTS
The Company has entered into a series of agreements with financial institutions
in relation to future sales of gold. The purpose of these transactions is to
protect the level of income in future years, and it is not Company policy to
engage in speculative hedging activities.
The following tables summarise the hedging program as at December 31, 1999:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
Forward Sales Put Options Spot Deferred Sales Total
--------------------------------------------------------------------------------------------------------------------------
Maturity Ounces Committed Ounces Minimum Ounces Minimum Ounces Minimum
Price Price Price Price
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0-3 months 13,868 447.81 66,603 405.47 1,364,326 286.98 1,444,797 293.98
--------------------------------------------------------------------------------------------------------------------------
3-6 months 13,880 451.19 66,640 407.60 - - 80,520 415.11
--------------------------------------------------------------------------------------------------------------------------
6-9 months 12,996 454.41 63,985 407.75 - - 76,981 415.63
--------------------------------------------------------------------------------------------------------------------------
9-12 months 12,996 457.87 63,985 409.86 - - 76,981 417.97
--------------------------------------------------------------------------------------------------------------------------
2001 51,380 466.23 154,125 466.23 - - 205,505 466.23
--------------------------------------------------------------------------------------------------------------------------
2002 50,136 480.33 150,413 480.33 - - 200,549 480.33
--------------------------------------------------------------------------------------------------------------------------
2003 - - - - - - - -
--------------------------------------------------------------------------------------------------------------------------
2004 - - 40,000 335.00 - - 40,000 335.00
--------------------------------------------------------------------------------------------------------------------------
2005 - - 40,000 335.00 - - 40,000 335.00
--------------------------------------------------------------------------------------------------------------------------
2006 - - 40,000 335.00 - - 40,000 335.00
--------------------------------------------------------------------------------------------------------------------------
2007 - - 40,000 335.00 - - 40,000 335.00
--------------------------------------------------------------------------------------------------------------------------
2008 - - 40,000 335.00 - - 40,000 335.00
--------------------------------------------------------------------------------------------------------------------------
Total 155,256 466.10 765,751 414.74 1,364,326 286.98 2,285,333 341.96
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
Forward sales are transactions against which the Company will be obliged to
deliver when they fall due. The price therefore represents a fixed and
guaranteed amount of revenue. Put options are transactions that will occur at
the discretion of the Company. Should the spot price exceed the strike price of
the option at the date on which the option expires, the Company will allow the
option to expire and will sell the equivalent amount of gold on the spot market.
Conversely, if the strike price is higher than the spot price on that date, the
option will be exercised. Spot deferred sales are transactions into which the
Company has entered, but which do not have a fixed delivery date. The strike
price eventually received will depend on the contango applied during the
intervening time.
The Company does not enter into hedging transactions that have provisions for
margin calls. Structures that have a term of greater than 3 years have a right
to break clause in the agreements, which gives either party the right to close
out the transaction at the 3 year point. This would entail a settlement in cash
for the market value of the transaction at that point in time.
27
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Since the end of 1999 approximately 760,000 spot deferred sales have been
restructured into forward contracts. The profile at the end of 1999, revised to
reflect this change was:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
Forward Sales Put Options Spot Deferred Sales Total
--------------------------------------------------------------------------------------------------------------------------
Maturity Ounces Committed Ounces Minimum Ounces Minimum Ounces Minimum
Price Price Price Price
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0-3 months 28,868 359.04 66,603 405.47 594,850 296.54 690,321 309.66
--------------------------------------------------------------------------------------------------------------------------
3-6 months 63,880 317.41 66,640 407.60 - - 130,520 363.46
--------------------------------------------------------------------------------------------------------------------------
6-9 months 72,996 313.45 63,985 407.75 - - 136,981 357.50
--------------------------------------------------------------------------------------------------------------------------
9-12 months 77,996 317.26 63,985 409.86 - - 141,981 358.99
--------------------------------------------------------------------------------------------------------------------------
2001 351,380 319.99 154,125 466.23 - - 505,505 364.58
--------------------------------------------------------------------------------------------------------------------------
2002 329,611 342.90 150,413 480.33 - - 480,024 385.96
--------------------------------------------------------------------------------------------------------------------------
2003 - - - - - - - -
--------------------------------------------------------------------------------------------------------------------------
2004 - - 40,000 335.00 - - 40,000 335.00
--------------------------------------------------------------------------------------------------------------------------
2005 - - 40,000 335.00 - - 40,000 335.00
--------------------------------------------------------------------------------------------------------------------------
2006 - - 40,000 335.00 - - 40,000 335.00
--------------------------------------------------------------------------------------------------------------------------
2007 - - 40,000 335.00 - - 40,000 335.00
--------------------------------------------------------------------------------------------------------------------------
2008 - - 40,000 335.00 - - 40,000 335.00
--------------------------------------------------------------------------------------------------------------------------
Total 924,731 328.45 765,751 414.74 594,850 296.54 2,285,333 349.06
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
The minimum total revenue generated from these programs will be US$797 million.
Revenue generated from the same number of ounces at the prevailing spot price at
December 31, 1999 of US$290.25 per ounce would be US$663 million. Unrealised
gains in the value of the hedge book have not been brought to account in the
profit for the year.
On December 31, 1999 the value of the total hedge program as determined by an
independent organisation was US$85.9 million.
All counterparties to these transactions are recognised financial institutions
with a minimum credit rating of Aa3. The Company's risk in the event of any of
the counterparties defaulting on their contractual obligations is limited to any
revenue that may be foregone in the case where the defaulted contract's strike
price exceeds the prevailing spot price at the value date. The Company does not
expect any counterparty to fail to meet its obligations under any program.
The accounting treatment of any option premiums or other costs incurred to enter
into hedging structures is to defer the full amount, and then to subsequently
charge to Profit and Loss at each value date the cost of those options or other
committed sales that expire on that date. The amount deferred and carried in the
Balance Sheet was $13 million. The Company has adopted the principles of the
Australian Urgent Issues Group Consensus (UIG) 18, whereby any gains and losses
arising from the early closure of hedge structures are deferred, and only
transferred to the Profit and Loss account when the underlying transaction
actually takes place. Total income deferred amounted to $18 million.
The Company does not use financial instruments to hedge future interest rates or
foreign exchange transactions.
28
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 24: SEGMENT REPORTING
The Company produces gold in Papua New Guinea.
NOTE 25: RELATED PARTY TRANSACTIONS
MANAGEMENT AGREEMENT
Lihir Management Company Pty Ltd (LMC), a wholly owned subsidiary of Rio Tinto
Plc, manages the Company pursuant to a Management Agreement dated 17 March 1995.
LMC receives a management fee for according to the terms of this agreement.
There are two directors who are on the Board of the Company and LMC.
<TABLE>
<CAPTION>
US$ 000
Related Companies 1999 1998 1997
<S> <C> <C> <C>
The Rio Tinto Group supplies labour on a secondment basis
and bears expenses on behalf of the Company which are
subsequently recharged to the Company 810 2,196 1,943
LMC Management fee 3,311 3,231 2,815
</TABLE>
NOTE 26: EARNINGS PER SHARE
The number of ordinary shares has been based on the weighted average number of
ordinary shares on issue during the year. The diluted earnings per share takes
account of the future exercise of the options.
<TABLE>
<CAPTION>
US$ 000
1999 1998 1997
<S> <C> <C> <C>
Net profit/(loss) attributable to ordinary shareholders (7,381) (10,272) 11,801
Weighted average number of ordinary shares 974,821 924,642 900,000
Basic EPS (cents/share and toea/share) (0.8) (1.1) 1.3
Conversion of options into ordinary shares 19,731 7,200 7,200
Diluted number of ordinary shares 977,759 931,842 907,200
Diluted EPS (cents/share and toea/share) (0.8) (1.1) 1.3
</TABLE>
29
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 27: POST BALANCE DATE EVENT
MERGER WITH NIUGINI MINING LIMITED
On October 6, 1999 the Company announced its agreement with Niugini Mining
Limited, subject to various conditions, to merge by Scheme of Arrangement
under Papua New Guinea Law. The basis of the merger was set out in the notice
of special meeting forwarded to shareholders on November 27, 1999.
Shareholders on December 15, 1999 approved the required resolutions to
progress the merger. Niugini Mining shareholders also approved the required
resolutions in early January 2000 and final approval from the National Court
of Papua New Guinea was obtained by Niugini Mining on February 1, 2000. The
merger was effective on February 2, 2000 with the transfer of all Niugini
Mining shares to the Company and the issue by the Company of new ordinary
shares to Niugini Mining shareholders taking place on February 14, 2000.
The total number of shares issued to Niugini Mining shareholders was one Lihir
share for each share in the Company held by Niugini Mining, plus shares in the
Company equal in value to Niugini Mining Limited's net assets. The price of the
Company's shares for this purpose was A$1.45, which was the price at which the
institutional placement on October 7, 1999 was made. Niugini Mining's net assets
were US$54.6 million which, based on the applicable exchange rate of A$/US$
0.6371, resulted in 59,128,489 million Lihir shares being issued. With the one
for one consideration for Niugini Mining's holding of 161,527,405 shares in the
Company, the total number of shares issued to Niugini Mining shareholders was
220,655,894 shares.
As a result of the merger, Niugini Mining became a subsidiary of the Company on
14 February 2000. Niugini Mining continues to hold 161,527,405 ordinary shares
in the company and ways of canceling these shares as soon as possible are being
examined.
The following represents the proforma balance sheet following the merger with
Niugini Mining Limited in February 2000:-
<TABLE>
<CAPTION>
LIHIR NIUGINI PROFORMA
GOLD MINING CONSOLIDATED
------------------------------------------------------------------
<S> <C> <C> <C>
Cash 46.9 55.3 102.2
------------------------------------------------------------------
Other Assets 988.8 0.1 988.9
------------------------------------------------------------------
------------------------------------------------------------------
Total Assets 1,035.7 55.4 1,091.1
------------------------------------------------------------------
------------------------------------------------------------------
Debt 158.6 - 158.6
------------------------------------------------------------------
Other Liabilities 63.7 0.8 64.5
------------------------------------------------------------------
------------------------------------------------------------------
Total Liabilities 222.3 0.8 223.1
------------------------------------------------------------------
------------------------------------------------------------------
Net Assets 813.4 54.6 868.0
------------------------------------------------------------------
</TABLE>
30
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 28: RECONCILIATION TO US GAAP
The basis of preparation of these financial statements is set out in Note 1.
These accounting policies vary in certain important respects from the
accounting principles generally accepted in the United States ("US GAAP").
The material differences affecting the profit and loss account and
shareholders' equity between generally accepted accounting principles
followed by the Company and those generally accepted in the US are summarised
below.
Prior to the commencement of commercial operations of the mine, on 1 October
1997, costs relating to exploration and evaluation, general and
administrative costs, start-up costs and project financing costs (including
foreign exchange gains and losses) were capitalised as part of development
and mine properties. As set out in the US GAAP reconciliation below, these
costs are expensed for US GAAP purposes. As a result of expensing these costs
for US GAAP purposes, adjustments have also been made to reflect the lower
depreciation expense and related tax-effect applicable to development and
mine properties as stated on a US GAAP basis.
The Company granted stock options in December 1999 to a shareholder, Mineral
Resources Lihir Limited. IAS does not require the recognition of the fair
value of stock options in the financial statements. Under US GAAP, the
options would be valued at their fair value and would be accounted for as a
dividend reducing retained earnings and a corresponding increase in paid up
capital. As a result, the grant of options would have no net effect on
shareholders' equity under US GAAP. The fair value of the options at the date
of grant was estimated to be US$1,694,289. The Black-Scholes model was used
to estimate the fair value of the options utilising the following
assumptions: risk-free interest rate of 6 per cent; dividends yield of nil
per cent; expected stock market price volatility factor of 80 per cent; and
an expected life of the options of 1.5 months. There is no income tax effect
on the fair value of the options.
31
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
RECONCILIATION TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED STATES
<TABLE>
<CAPTION>
US$ 000
1999 1998 1997
<S> <C> <C> <C>
SHAREHOLDERS' EQUITY IN ACCORDANCE WITH IAS GAAP 813,373 689,842 633,115
Adjusted as follows:
- Development and mine properties (34,430) (34,430) (34,430)
- Project financing (11,470) (11,470) (11,470)
- Depreciation 18,170 9,050 1,494
- Deferred tax provision (1,964) 1,228 3,873
- Reversal of exploration and evaluation costs incurred prior to
identification of commercial feasibility (113,700) (113,700) (113,700)
-----------------------------------------------
ACCUMULATED ADJUSTMENTS UNDER US GAAP (143,394) (149,322) (154,233)
-----------------------------------------------
SHAREHOLDERS' EQUITY UNDER US GAAP 669,979 540,520 478,882
-----------------------------------------------
NET INCOME/(LOSS) IN ACCORDANCE WITH IAS GAAP (7,381) (10,272) 11,801
Adjusted as follows:
- Development and mine properties - general and - - (12,559)
administrative costs
- Depreciation 9,120 7,556 1,494
- Income tax expense (3,192) (2,645) 3,873
-----------------------------------------------
NET INCOME/(LOSS) UNDER US GAAP (1,453) (5,361) 4,609
===============================================
STATEMENT OF CHANGES IN EQUITY UNDER US GAAP
Retained Earnings/(Accumulated Losses)
Balance at 1 January (147,793) (142,432) (147,041)
Net income/(loss) (1,453) (5,361) 4,609
Dividend - stock options (1,694) - -
-----------------------------------------------
Balance at 31 December (150,940) (147,793) (142,432)
Paid up capital
Balance at 1 January 688,313 621,314 621,314
Shares issued 130,912 66,999 -
Additional paid up capital - stock options 1,694 - -
-----------------------------------------------
Balance at 31 December 820,919 688,313 621,314
-----------------------------------------------
669,979 540,520 478,882
===============================================
</TABLE>
There were no items of other comprehensive income for the periods presented.
32
<PAGE>
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
<TABLE>
<S> <C> <C> <C>
EPS UNDER US GAAP
- Basic and diluted (0.001) (0.006) 0.005
</TABLE>
The EPS calculations have been based on the net income/(loss) as calculated
above in the US GAAP reconciliation and the weighted average number of basic
and diluted ordinary shares as contained in note 26.
RECENTLY ISSUED ACCOUNTING STANDARDS
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," establishes accounting and
reporting standards for derivative instruments and hedging activity. SFAS No.
133 is effective for all periods in fiscal years beginning after June 15,
2000. SFAS No. 133 requires recognition of all derivative instruments on the
balance sheet as either assets or liabilities and measurement at fair market
value. Changes in the derivative's fair value will be recognised in earnings
unless specific hedge accounting criteria are met. Gains and losses on
derivative hedging instruments must be recorded in either other comprehensive
income or current earnings, depending on the nature of the instrument. The
Company plans to adopt the statement on January 1, 2001.
33
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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: June 28, 2000 /s/ Jeffrey L. Powers
-------------------------------------
Jeffrey L. Powers
Vice President and Controller
(Chief Accounting Officer)
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Document
----------- --------
<S> <C>
*2(a) -- Plan of Arrangement of Hemlo Gold Mines Inc. under Section 182
of the Business Corporations Act (Ontario) (Annex D to Exhibit
20(a), Joint Management Information Circular and Proxy
Statement, to the Company's Current Report on Form 8-K dated
June 11, 1996; File No. 1-9666).
*2(b) -- Combination Agreement effective as of March 11, 1996 by and
between the Company and Hemlo Gold Mines Inc. (Annex C to
Exhibit 20(a), Joint Management Information Circular and Proxy
Statement, to the Company's Current Report on Form 8-K dated
June 11, 1996; File No. 1-9666).
*3(a) -- Restated Articles of Incorporation of the Company, as amended
and restated through July 19, 1996 (Exhibit 3(a) to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1996; File No. 1-9666).
*3(b) -- Certificate of Resolution Establishing Designation,
Preferences and Rights of $3.25 Convertible Preferred Stock
(Exhibit 4(b) to the Company's Current Report on Form 8-K
dated July 19, 1996; File No. 1-9666).
*3(c) -- Certificate of Amendment of Certificate of Resolution
Establishing Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock (Exhibit 4(c) to the
Company's Current Report on Form 8-K dated July 19, 1996; File
No. 1-9666).
*3(d) -- Bylaws of the Company, as amended through March 21, 1997
(Exhibit 3(d) to the Company's Annual Report on Form 10-K/A
for the year ended December 31, 1996; File No. 1-9666).
E-1
<PAGE>
*4(a)(1) -- Rights Agreement, dated November 10, 1988, as amended and
restated as of July 19, 1996, between the Company and The Bank
of New York, as Rights Agent (Exhibit 4(e) to the Company's
Current Report on Form 8-K dated July 19, 1996; File No.
1-9666).
*4(a)(2) Third Amendment to Rights Agreement, dated and effective as of
November 10, 1998, between the Company and The Bank of New
York, as Rights Agent (Exhibit 4(a)(2) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1998; File
No. 1-9666).
*4(b) -- Voting, Support and Exchange Trust Agreement dated as of July
19, 1996 between the Company, Hemlo Gold Mines Inc. and CIBC
Mellon Trust Company (as successor to The R-M Trust Company)
(Annex E to Exhibit 20(a), Joint Management Information
Circular and Proxy Statement, to the Company's Current Report
on Form 8-K dated June 11, 1996; File No. 1-9666).
*4(c) -- Specimen Stock Certificate for the Common Stock of the Company
(Exhibit 4(b) to the Company's Annual Report on Form 10-K for
the year ended December 31, 1988; File No. 1-9666).
*4(d) -- Fiscal and Paying Agency Agreement, dated as of January 4,
1990, between the Company and Citibank, N.A., Fiscal Agent
(Exhibit 4(c) to the Company's Annual Report on Form 10-K for
the year ended December 31, 1989; File No. 1-9666).
+*10(a)(1) -- Battle Mountain Gold Company 2000 Deferred Income Stock
Option Plan (Exhibit 10(a)(1) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1999; File No.
1-9666).
+*10(b)(1) -- 1985 Stock Option Plan of the Company, as amended and
restated effective April 7, 1993 (Exhibit 10(a) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993; File No. 1-9666).
+*10(b)(2) -- First Amendment to 1985 Stock Option Plan of the Company,
effective May 12, 1995 (Exhibit 10(b)(1) to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1995; File No. 1-9666).
+o*10(c)(1) -- Specimen of Waiver and Release Agreements dated July 19,
1999 between the Company and certain executive officers
regarding certain benefits payable in the event of a change in
control of the Company (Exhibit 10(c)(1) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1999; File No. 1-9666).
+*10(c)(2) -- Battle Mountain Gold Company Change In Control Severance
Plan, effective December 2, 1997 (Exhibit 10(c)(2) to the
Company's Annual Report on Form -K for the year ended December
31, 1997; File No. 1-9666).
+*10(d) -- Battle Mountain Gold Company Contribution Equalization Plan,
as amended and restated effective as of November 10, 1988
(Exhibit 10(h) to the Company's Annual Report on Form 10-K for
the year ended December 31, 1992; File No. 1-9666).
+*10(e)(1) -- Battle Mountain Gold Company Executive Productivity Bonus
Plan, as amended and restated effective January 1, 1994
(Exhibit 10(i) to the Company's Annual Report on Form 10-K for
the year ended December 31, 1993; File No. 1-9666).
E-2
<PAGE>
+*10(e)(2) -- Battle Mountain Gold Company 1997 Incentive Bonus Plan
(Exhibit 10(e)(2) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1997; File No. 1-9666).
*10(f)(1) -- Battle Mountain Gold Company Non-Qualified Stock Option
Plan for Outside Directors (Exhibit 10(m) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1991; File No. 1-9666).
*10(f)(2) -- Amendment to Battle Mountain Gold Company Non-Qualified
Stock Option Plan for Outside Directors effective January 1,
1995 (Exhibit 10(j)(2) to the Company's Annual Report on Form
10-K for the year ended December 31, 1994; File No. 1-9666).
+*10(f)(3) -- Second Amendment to Battle Mountain Gold Company's
Non-Qualified Stock Option Plan for Outside Directors
effective December 2, 1997 (Exhibit 10(f)(3) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1999; File No. 1-9666).
+*10(f)(4) -- Third Amendment to Battle Mountain Gold Company's
Non-Qualified Stock Option Plan for Outside Directors
effective February 2, 1999 (Exhibit 10(f)(4) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1999; File No. 1-9666).
*10(g) -- Heads of Agreement, dated March 23, 1989, among the
Company, Niugini Mining Limited and the individuals listed on
the signature page thereto (Exhibit 10(k) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1988; File No. 1-9666).
+*10(h)(1) -- Amended and Restated 1994 Long-Term Incentive Plan of
Battle Mountain Gold Company, as of January 1, 1997 (Appendix
B to the Company's definitive Proxy Statement dated March 28,
1997 and filed with the Commission on March 28, 1997; File No.
1-9666).
+*10(h)(2) -- Specimen of the Company's 1994 Long-Term Incentive Plan
Non-Qualified Stock Option Agreement (Exhibit 10(c)(1) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995; File No. 1-9666).
+*10(h)(3) -- Specimen of the Company's 1994 Long-Term Incentive Plan
Incentive Stock Option Agreement (Exhibit 10(c)(2) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995; File No. 1-9666).
+*10(h)(4) -- Specimen of the Company's 1994 Long-Term Incentive Plan
Restricted Stock Agreement (Exhibit 10(a)(4) to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1994; File No. 1-9666).
+*10(h)(5) -- Specimen of the Company's 1994 Long-Term Incentive Plan
Performance Unit Agreement (Exhibit 10(n)(5) to the Company's
Quarterly Report on Form 10-Q for the quarter ended December
31, 1994; File No. 1-9666).
+*10(i)(1) -- Specimen Split-Dollar Agreement (Individual) (Exhibit
10(o)(1) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994; File No. 1-9666).
E-3
<PAGE>
+*10(i)(2) -- Specimen Amendment to Split-Dollar Agreement (Individual)
(Exhibit 10(o)(2) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994; File No. 1-9666).
+*10(i)(3) -- Specimen Split-Dollar Agreement (Trustee) (Exhibit
10(o)(3) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994; File No. 1-9666).
+*10(i)(4) -- Specimen Amendment to Split-Dollar Agreement (Trustee)
(Exhibit 10(o)(4) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994; File No. 1-9666).
+*10(j)(1) -- Battle Mountain Gold Company Supplemental Executive
Retirement Plan As Amended and Restated December 2, 1997
(Exhibit 10(j)(1) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1998; File No. 1-9666).
+o*10(j)(2) -- Specimen of the Company's Supplemental Executive
Retirement Plan Agreement (Exhibit 10(b) to the Company's
Quarterly Report on Form 10-Q for the quarter ended September
30, 1995; File No. 1-9666).
*10(k) -- Registration Rights Agreement, dated as of July 19, 1996,
between Noranda Inc., Kerr Addison Mines Limited and the
Company (Exhibit 10(a) to the Company's Current Report on Form
8-K dated July 19, 1996; File No. 1-9666).
+*10(l) -- Agreement for Consulting Services effective as of May 1,
1999 between the Company and Karl E. Elers, and a letter
extending the term of the agreement (Exhibit 10(L) to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1999; File No. 1-9666).
*10(m)(1) -- Investment Agreement, dated May 22, 1992, between Empresa
Minera Inti Raymi S.A. and International Finance Corporation
(Exhibit 4(e) to the Company's Annual Report on Form 10-K for
the year ended December 31, 1992; File No. 1-9666).
*10(m)(2) -- Amendment to Investment Agreement and Waiver, effective as
of December 31, 1994, between Empresa Minera Inti Raymi S.A.
and International Finance Corporation (Exhibit 4(a) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995; File No. 1-9666).
*10(n)(1) -- Finance Agreement, dated as of September 14, 1992, between
Empresa Minera Inti Raymi S.A. and Overseas Private Investment
Corporation (Exhibit 4(f) to the Company's Annual Report on
Form 10-K for the year ended December 31, 1992; File No.
1-9666).
*10(n)(2) -- First Amendment to Finance Agreement and Limited Waiver,
effective as of December 31, 1994, between Empresa Minera Inti
Raymi S.A. and Overseas Private Investment Corporation
(Exhibit 4(f)(2) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994; File No. 1-9666).
*10(n)(3) -- Letter Agreement dated December 31, 1994, among Overseas
Private Investment Corporation, Battle Mountain Gold Company,
Kori Kollo Corporation and Zeland Mines, S.A. (Exhibit 4(c) to
the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995; File No. 1-9666).
E-4
<PAGE>
*10(o)(1) -- Loan Agreement, dated June 29, 1992, between Empresa
Minera Inti Raymi S.A. and Corporacion Andina de Fomento
(English translation) (Exhibit 4(g) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1992; File
No. 1-9666).
*10(o)(2) -- Amendment to Loan Agreement, effective as of December 31,
1994, between Empresa Minera Inti Raymi S.A. and Corporacion
Andina de Fomento (English translation) (Exhibit 4(b) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995; File No. 1-9666).
*10(p)(1) -- Credit Agreement, including pertinent supporting exhibits
thereof, dated October 1, 1999, between Canadian Imperial Bank
of Commerce and Battle Mountain Canada Ltd. (Exhibit 10 to the
Company's Current Report on Form 8-K dated October 11, 1999).
*11 -- Computation of Earnings Per Common Share (Exhibit 11 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1999; File No. 1-9666).
*21 -- Subsidiaries of the Company (Exhibit 21 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1999; File No. 1-9666).
=23(a) -- Consent of PricewaterhouseCoopers LLP (Battle Mountain Gold
Company).
23(b) -- Consent of PricewaterhouseCoopers (Lihir Gold Limited).
=27 -- Financial Data Schedule.
------------------------
</TABLE>
* Incorporated by reference as indicated.
= Previously filed.
+ Represent management contracts or compensatory plans or arrangements
required to be filed as exhibits to this Annual Report by Item
601(10)(iii) of Regulation S-K.
o Pursuant to Instruction 2 accompanying paragraph (a) and the
Instruction accompanying paragraph (b)(10)(iii)(B)(6) of Item 601 of
Regulation S-K, the registrant has not filed each executive officer's
individual agreement with the Company as an exhibit hereto. The
registrant has agreements substantially identical to Exhibit 10(l)
above with each of Messrs. Bayer, Atkinson, Baylis and Keyes.
E-5
