SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e) (2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[x] Soliciting Material Pursuant to Rule 14a-12
Battle Mountain Gold Company
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11. N/A
(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
NEWS
IMMEDIATE RELEASE
Contact: Les Van Dyke
(713)653-7248 or [email protected]
Web Page: www.bmgold.com
BATTLE MOUNTAIN GOLD POSTS SMALL LOSS ON LOW GOLD PRICES, SAYS
FINAL PHOENIX FEASIBILITY STUDY IMPROVES ON EARLIER MODEL
Houston, July 28, 2000 -- Battle Mountain Gold Company (BMG-NYSE;
BMC-TSE) today reported a second quarter consolidated net loss of $9.2 million,
or 4 cents per share, including foreign currency losses of $4.4 million. The
second quarter loss compares with a net loss of $17.2 million, or 7 cents per
share in the same period last year, which included a $14.2 million loss related
to Lihir Gold Limited (LGL).
For the first half of 2000, the consolidated net loss was $12.7
million, or 6 cents per share, including foreign currency losses of $3.9
million. This compares with a consolidated loss of $31.7 million, or 14 cents
per share in the same period last year, which included a $26.4 million loss
related to LGL.
BMG President and Chief Operating Officer, John A. Keyes, said that the
average realized gold price increased to $289 per ounce in the first half,
compared with $278 in the same period of last year. Cash flow from operations
increased to $21.2 million for the period as a result of improving gold prices
and production. The Company's cash position was $65.9 million at the end of the
first half, including $42.4 million in restricted cash, which is primarily
related to the Company's loan facility. First half gold production of 395,000
ounces and cash costs of $167 per ounce were slightly better than planned and
are expected to remain on target for the balance of the year.
In addition, Keyes said that the Company's previously announced merger
with Newmont Mining Corporation is expected to be completed this Fall following
customary regulatory approvals and approval by Battle Mountain Gold
shareholders. On July 27, early termination of the waiting period applicable to
the proposed merger under the Hart-Scott-Rodino Improvements Act of 1976 was
granted. Noranda Inc., which owns 28 percent of Battle Mountain Gold, has agreed
to vote its shares in favor of the merger.
DEVELOPMENT
Keyes also reported that work on BMG's Final PHOENIX Feasibility Study
has been completed and that the results are largely in line with or improve on
the targets projected in the March 2000 interim study. The Feasibility Study
does not take into account additional operating synergies that are expected to
result from the merger and to further lower costs and increase the rate of
return.
<PAGE>
<TABLE>
<CAPTION>
FINAL PHOENIX FEASIBILITY STUDY
----------------------------------------------------------------------------------------------------------------
FINAL FEASIBILITY JULY 2000 FEASIBILITY TARGETS MARCH 2000
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Avg. Mill Feed Grade Avg. Mill Feed Grade
Gold (oz/ton) 0.037 0.038
Silver (oz/ton) 0.286 0.285
Copper (%) 0.15 0.15
----------------------------------------------------------------------------------------------------------------
Avg. Mill Recovery Avg. Mill Recovery
Gravity Gold (%) 40.6 43.0
Flotation/SART Au (%) 44.0 41.5
---- ----
Total Au Recovery 84.6 84.5
--------------------------------------------------------------------------------------------------
Silver (%) 58.1 52.0
Copper (%) 85.1 83.5
----------------------------------------------------------------------------------------------------------------
Avg. Heap Leach Grade Avg. Heap Leach Grade
Gold (oz/ton) 0.028 0.026
Silver (oz/ton) 0.229 0.236
----------------------------------------------------------------------------------------------------------------
Leach Recovery Leach Recovery
Gold (%) 67.1 64.5
Silver (%) 31.4 16.0
----------------------------------------------------------------------------------------------------------------
Mill Ore Total Tons (000s) 148.4 140.2
Milling Rate (tons per day) 32,500 30,000
Strip Ratio 2.11:1 2.1:1
Contained Au Reserves/Resources 6.3 M oz 6.2 M oz
Capital Cost (millions) $206.5 $189.0
----------------------------------------------------------------------------------------------------------------
GOLD, SILVER, COPPER PRODUCTION Au,oz/yr Ag,oz/yr Cu, Mlbs/yr Au, oz/yr Ag, oz/yr Cu, Mlbs/yr
------- ------- ----------- --------- --------- -----------
Gravity 180,000 310,000 183,500 290,000
Float/SART 194,000 1,692,000 162,500 1,300,000
Heap Leach 41,000 153,000 39,000 100,000
------ ------- ------ -------
TOTAL 415,000 2,155,000 28.8 385,000 1,690,000 27.5
----------------------------------------------------------------------------------------------------------------
CASH OPERATING COST (PER OZ) $170 $172
DD&A (per oz) 41 38
Sustaining Capital (per oz) 18 15
Reclamation (per oz) 3 11
- --
TOTAL COSTS (PER OZ) $232 $236
----------------------------------------------------------------------------------------------------------------
PRE TAX IRR @ $300 AU (%) 17 18
----------------------------------------------------------------------------------------------------------------
</TABLE>
Keyes noted that, based on the same $300 per ounce gold price used in
the March study, proven and probable contained gold reserves increased from 5.7
million ounces to 6.1 million ounces. The increased reserves do not take into
account ongoing development drilling, and BMG expects to add another 800,000
ounces to the reserve base this year, with significant additional upside
potential remaining.
Mill throughput in the Final Feasibility study increased to 32,500 tons
per day from the 30,000 ton-per-day target. Total production estimates increased
to 415,000 ounces of gold per year, together with 2.2 million ounces of silver
and 28.8 million pounds of copper. This compares with 385,000 ounces of gold,
1.7 million ounces of silver and 27.5 million pounds of copper in the March
target case.
<PAGE>
Cash operating costs declined slightly to $170 per ounce, with total
production costs declining to $232, including sustaining capital. Total capital
costs increased to $206 million, including an $18.3 million contingency
allowance. The pre-tax internal rate of return is estimated at 17%.
At the LLALLAGUA bio-oxidation demonstration plant adjacent to the
88%-owned Kori Kollo mine in Bolivia, processing of Llallagua and Nueva
Esperanza ores continued. A recently completed scoping study has generally
supported earlier expectations and confirmed contained gold mineralization of
1.3 million ounces. In addition, a 34 hole drilling program has been completed
to evaluate areas that could have significant impacts on the Llallagua sulfide
project by testing new areas and extending known mineralization. Assays overall
were generally encouraging and have identified three promising mineralized
targets. These new targets occur outside the current pit designs and will expand
the resource. Of special note is the higher grade of recent intercepts, many of
which are over twice the average Llallagua resource grade. Recent results
include .172 opt gold (Au) over 35.1 ft., .117 opt Au/29.5 ft. and .108 opt
Au/59.0 ft. Based on these positive results, a second phase of drilling totaling
35-40 holes will be implemented shortly. This program will further test these
new areas to expand the Llallagua deposit and provide detailed information on
resource grade, stripping ratio, ore controls and model parameters.
OPERATIONS
In Canada, the GOLDEN GIANT mine performed well during the first half
and is expected to be on target for the year. Shaft deepening and additional
development for Block 5 is on schedule. At KORI KOLLO, production was slightly
below plan, and cash operating costs for the period were about 12% over target,
primarily due to higher equipment-maintenance and fuel costs. Production from
the 84.65%-owned HOLLOWAY mine was slightly above plan for the first six months.
BMG's 50% joint venture interest in the VERA/NANCY mine at the Pajingo complex
in Queensland, Australia, completed the first half above plan in terms of
production, with cash costs averaging $99 per ounce for the period.
EXPLORATION
Positive exploration developments for the first half 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. East of
the Holloway mine, surface drilling continued to expand the Blacktop deposit.
Mineralization is open to the west and is currently being drilled. The first
drill hole to test this westerly extension assayed .185 opt Au/10.2 ft. This
drilling is expected to be completed early in the third quarter and will provide
resource information required for an internal study on the viability of
developing the Blacktop deposits.
On the western side of the Holloway mine, the first phase of the 505
West exploration drift to evaluate Lightning and Middle zone mineralization west
of the current mine limits is nearly complete. In this area, very positive
developments have been made in defining Middle
<PAGE>
zone mineralization. Significant values returned include .616 opt Au/19.4 ft.,
.228 opt Au/15.1 ft. and .229 opt Au/18 ft. In addition, the 505 West level has
encountered a northeast trending quartz tourmaline vein with high-grade gold
values. The vein trend is normal to all other mineralization at Holloway and had
not been recognized previously. The vein has been cut by 14 underground holes
to-date, and drilling is continuing. The average drill intercept is 5.8 ft.
wide, grading .415 opt gold. Based on these positive developments, further work
will commence immediately. The expectation is that the 505 West exploration
program will outline additional reserves equivalent to one year's production
(approximately 100,000 ounces).
Aside from the Phoenix development work, exploration drilling at the
BATTLE MOUNTAIN COMPLEX during the second quarter of 2000 focused on the Copper
Basin area 7 miles to the north of Phoenix. A 16-hole program totaling 7,000 ft.
is under way at the Surprise area at Copper Basin with the objective of drilling
off an indicated resource which has the potential to contain significant amounts
of gold and copper.
In Argentina, work focused on the Casposo project. Based on results to
date, a preliminary study was completed to determine the general economics of
the mineralized zone and to identify areas for significant improvement.
Metallurgical test work indicates a total recovery of 98.5% for gold using
gravity concentration and 96.7% for silver. At $300 gold, preliminary resource
calculations indicate 1.9 million tons of ore grading 0.186 opt gold and 3.358
opt silver, or approximately 350,000 ounces of gold and 6.4 million ounces of
silver. Further drilling is planned with excellent potential to expand this
resource.
#####
<PAGE>
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
This press release includes forward-looking information and statements about
Battle Mountain Gold, Newmont Mining Corporation and the combined company after
completion of the proposed merger that are intended to be covered by the safe
harbor for "forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are statements that
are not historical facts. These statements include financial projections and
estimates and their underlying assumptions; statements regarding plans,
objectives and expectations with respect to future operations, products and
services; and statements regarding future performance. Forward-looking
statements are generally identified by the words "expect," "anticipates,"
"believes," "intends," "estimates" and similar expressions. The forward-looking
information and statements in this press release are subject to various risks
and uncertainties, many of which are difficult to predict and generally beyond
the control of Battle Mountain Gold and Newmont, that could cause actual results
to differ materially from those expressed in, or implied or projected by, the
forward-looking information and statements. These risks and uncertainties
include those discussed or identified in the public filings with the U.S.
Securities and Exchange Commission (SEC) made by Battle Mountain Gold and
Newmont; risks and uncertainties with respect to the parties' expectations
regarding the timing, completion and accounting and tax treatment of the merger,
the value of the merger consideration, production and development opportunities,
conducting worldwide operations, earnings accretion, cost savings, revenue
enhancements, synergies and other benefits anticipated from the transaction; and
the effect of gold price and foreign exchange rate fluctuations, and general
economic conditions such as changes in interest rates and the performance of the
financial markets, changes in domestic and foreign laws, regulations and taxes,
changes in competition and pricing environments, the occurrence of significant
natural disasters, civil unrest and general market and industry conditions.
ADDITIONAL INFORMATION
Information regarding the identity of the persons who may, under SEC rules, be
deemed to be participants in the solicitation of stockholders of Battle Mountain
Gold in connection with the proposed merger, and their interests in the
solicitation, are set forth in a Schedule 14A filed by Battle Mountain Gold on
June 21, 2000 with the SEC. Battle Mountain Gold filed a preliminary proxy
statement/prospectus with the SEC on July 21, 2000. In addition, Battle Mountain
Gold and Newmont will be filing a definitive proxy statement/prospectus and
other relevant documents concerning the proposed transaction with the SEC.
Investors are urged to read the definitive proxy statement/prospectus when it
becomes available and any other relevant documents filed with the SEC because
they will contain important information on the proposed transaction. Investors
will be able to obtain the documents free of charge at the SEC's website
(www.sec.gov). In addition, documents filed with the SEC by Battle Mountain Gold
are available free of charge by contacting Battle Mountain Gold Company, 333
Clay Street, 42nd Floor, Houston, Texas 77002, (713) 650-6400. Documents filed
with the SEC by Newmont may be obtained free of charge by contacting Newmont
Mining Corporation, 1700 Lincoln Street, Denver, CO 80203, (303) 863-7414.
Investors should read the definitive proxy statement/prospectus carefully when
it becomes available before making any voting or investment decision.
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
-------------------- --------------------
2000 1999 2000 1999
-------- -------- ------- -------
US$ millions, except per share amounts (as restated) (as restated)
--------------------------------------
<S> <C> <C> <C> <C>
Sales $ 59.2 $ 53.4 $ 121.7 $ 107.2
-------- -------- ------- -------
Costs and expenses
Production costs 36.2 35.7 75.6 71.6
Depreciation, depletion and amortization 15.2 15.8 32.7 30.2
Exploration, evaluation & other lease costs, net 3.8 5.3 7.4 9.2
Merger expense 0.7 - 0.7 -
General and administrative expenses 2.6 4.0 5.9 7.4
-------- -------- ------- -------
Total costs and expenses 58.5 60.8 122.3 118.4
-------- -------- ------- -------
Operating Income (Loss) 0.7 (7.4) (0.6) (11.2)
Interest expense (3.7) (3.8) (7.5) (7.5)
Interest income 0.9 2.0 2.0 3.6
Equity in losses and impairment of Lihir - (14.2) - (26.4)
Foreign currency exchange gain (loss), net (4.4) 3.7 (3.9) 6.8
Minority interest in net loss 0.6 3.9 0.8 4.0
Other income, net - 0.4 0.1 0.8
-------- -------- ------- -------
Loss Before Income Taxes (5.9) (15.4) (9.1) (29.9)
Income tax benefit (expense) (1.9) 0.1 (1.0) 2.2
Mining tax benefit (expense) 0.4 (0.1) 1.1 (0.3)
-------- -------- ------- -------
Net Loss (7.4) (15.4) (9.0) (28.0)
Preferred dividends 1.8 1.8 3.7 3.7
-------- -------- ------- -------
Net Loss to Common Shares $ (9.2) $ (17.2) $ (12.7) $ (31.7)
======== ======= ======= ======
Loss per Common Share - Basic and Diluted $ (.04) $ (.07) $ (.06) $ (.14)
======== ======== ======== =======
Average Common Shares Outstanding for
Basic and Diluted Loss per Share Purposes 229.9 229.8 229.9 229.8
======== ======== ======== =======
</TABLE>
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
US$ millions 2000 1999
------------ ------- ------------
(as restated)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 23.5 $ 91.0
Restricted cash 1.7 0.2
Accounts and notes receivable, net 12.4 13.2
Product inventories 8.7 8.7
Materials and supplies, net, at average cost 20.3 22.4
Marketable equity securities 43.9 -
Other current assets 7.3 7.7
-------- --------
Total current assets 117.8 143.2
-------- --------
Investments
Investment in Lihir - 68.4
Other investments 12.5 10.6
-------- --------
Total investments 12.5 79.0
-------- --------
Restricted cash 40.7 40.0
Property, plant and equipment, net 282.9 299.6
Other assets 4.0 6.7
-------- --------
Total Assets $ 457.9 $ 568.5
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings $ 5.0 $ -
Current maturities of long-term debt 9.9 2.6
Debt due upon disposal of Lihir 30.0 30.0
Accounts payable 19.0 16.0
Income and mining taxes payable 11.1 16.7
Other current liabilities 18.6 23.6
-------- --------
Total current liabilities 93.6 88.9
Long-term debt 157.5 176.8
Deferred income and mining taxes 61.3 64.5
Other liabilities 52.7 54.5
-------- --------
Total Liabilities 365.1 384.7
Minority interest 5.0 65.1
Shareholders' equity 87.8 118.7
-------- --------
Total Liabilities and Shareholders' Equity $ 457.9 $ 568.5
======== ========
</TABLE>
<PAGE>
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
June 30
------------------------------
US$ millions 2000 1999
------------ ---- ----
(as restated)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (9.0) $ (28.0)
Adjustments to reconcile net loss to net cash flows
from operating activities:
Depreciation, depletion and amortization 32.7 30.2
Deferred income and mining taxes (1.1) (5.4)
Equity in losses and impairment of Lihir - 26.4
Foreign currency exchange loss (gain), net 3.9 (6.8)
Change in working capital accounts, net (1.5) (5.7)
Other, net (3.8) (6.0)
--------- --------
Net Cash Flows Provided by Operating Activities 21.2 4.7
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (22.9) (22.9)
Crown Butte liquidating dividend to minority shareholders - (11.0)
Effects on cash of the Niugini Mining and Lihir merger (54.7) -
Other, net (0.8) (0.2)
--------- --------
Net Cash Flows Used in Investing Activities (78.4) (34.1)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Debt repayments (12.0) (24.4)
Increase (decrease) in short-term borrowings 5.0 (14.9)
Cash dividend payments (3.7) (3.7)
Decrease (increase) in restricted cash (2.2) 0.5
Other, net - 0.3
--------- --------
Net Cash Flows Used in Financing Activities (12.9) (42.2)
--------- --------
Effect of Exchange Rate Changes on Cash 2.6 1.6
--------- --------
Net Decrease in Cash and Cash Equivalents (67.5) (70.0)
Cash and cash equivalents at beginning of period 91.0 197.2
--------- --------
Cash and Cash Equivalents at End of Period $ 23.5 $ 127.2
========= ========
</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 Six months ended
June 30 June 30
-------------------- --------------------
2000 1999 2000 1999
-------- -------- ------- -------
<S> <C> <C> <C> <C>
GOLDEN GIANT
Gold ounces recovered 84 86 173 164
Silver ounces recovered 5 4 12 7
-------------------------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $ 149 $ 151 $ 149 $ 158
Depreciation, depletion and amortization 66 68 67 66
Reclamation and mine closure costs 6 4 6 4
----- ----- ----- -----
Total production costs $ 221 $ 223 $ 222 $ 228
-------------------------------------------------------------------------------------------------------------------
KORI KOLLO (88% Interest)
Gold ounces recovered 56 62 118 126
Silver ounces recovered 166 165 298 366
-------------------------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced (2)
Cash production costs $ 219 $ 195 $ 209 $ 189
Depreciation, depletion and amortization 92 89 91 87
Reclamation and mine closure costs 5 11 5 11
----- ---- ----- ----
Total production costs $ 316 $ 295 $ 305 $ 287
-------------------------------------------------------------------------------------------------------------------
HOLLOWAY (84.65% Interest)
Gold ounces recovered 21 23 44 43
-------------------------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $ 218 $ 204 $ 213 $ 205
Depreciation, depletion and amortization 132 133 134 130
Reclamation and mine closure costs 3 3 3 2
----- ----- ----- -----
Total production costs $ 353 $ 340 $ 350 $ 337
-------------------------------------------------------------------------------------------------------------------
VERA/NANCY (50% Interest)
Gold ounces recovered 35 16 60 30
Silver ounces recovered 26 12 45 24
-------------------------------------------------------------------------------------------------------------------
Cost per Gold Ounce Produced
Cash production costs $ 82 $ 119 $ 99 $ 118
Depreciation, depletion and amortization 36 36 42 34
Reclamation and mine closure costs 2 1 2 1
----- ----- ----- -----
Total production costs $ 120 $ 156 $ 143 $ 153
-------------------------------------------------------------------------------------------------------------------
===================================================================================================================
AGGREGATE DATA
Gold ounces recovered 196 187 395 363
Average price per gold ounce realized $ 287 $ 271 $ 289 $ 278
Silver ounces recovered 197 181 355 397
Average price per silver ounce realized $4.53 $5.08 $4.77 $5.19
-------------------------------------------------------------------------------------------------------------------
Weighted Average Cost per Gold Ounce Produced
Cash production costs $ 164 $ 170 $ 167 $ 171
Depreciation, depletion and amortization 76 80 77 79
Reclamation and mine closure costs 5 6 5 6
----- ----- ----- -----
Total production costs $ 245 $ 256 $ 249 $ 256
===================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION - (UNAUDITED) (1)
(Data reflects BMG attributable interests, except as noted)
(US$, ounces in thousands)
Three months ended Six months ended
June 30 June 30
-------------------- -----------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
AGGREGATE DATA (cont.)
Gold ounces recovered - 100% 204 195 411 380
Gold ounces sold - 100% 203 194 415 380
Gold ounces sold - BMG share 196 186 399 363
----------------------------------------------------------------------------------------------------------------
Silver ounces recovered - 100% 220 203 396 447
Silver ounces sold - 100% 224 202 395 447
Silver ounces sold - BMG share 201 180 355 397
================================================================================================================
</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 July 26, 2000
----------------
Total or
2000 2001 2002 2003 2004 Average
---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
Call options
Ounces 125 149 149 149 20 592
Average price per ounce $ 334 $ 358 $ 358 $ 358 $ 372 $ 353
Put options
Ounces 75 149 149 149 20 542
Average price per ounce $ 297 $ 297 $ 297 $ 297 $ 302 $ 297
Forwards
Ounces 25 38 38 38 2 141
Average price per ounce $ 316 $ 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. The
above derivatives have no margin requirements nor do they subject Battle
Mountain to lease rate exposure. The above ounces represent between 3% and 46%
of estimated production for each period from July 27, 2000 through March 31,
2004, with a weighted average of approximately 20% of total estimated production
for those periods combined.
