<PAGE>
_____________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
--- ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
or
--
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______________ to ______________
Commission File number 1-9569
FMC GOLD COMPANY
(Exact name of registrant as specified in its charter)
Delaware 88-0226676
---------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5011 Meadowood Way, Suite 200, Reno, NV 89502
--------------------------------------- --------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (702) 827-3777
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
Common Stock, $0.01 par value 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. [X]
The aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 1, 1995, was $42,232,873. The number of shares of
Registrant's Common Stock, $0.01 par value, outstanding as of that date was
73,484,395.
Documents Incorporated By Reference
-----------------------------------
Document Form 10-K Reference
-------- -------------------
Portions of Annual Report to Stockholders for 1994 Parts I and II, Part
III, Item 10 and Part
IV, Item (a)(1) and (2)
Portions of Proxy Statement for 1995 Annual Meeting of Part III
Stockholders
___________________________________________________________________________
<PAGE>
Cross-Reference Table of Contents
---------------------------------
The 1994 Annual Report to Stockholders and the 1995 Proxy Statement include all
information required in Parts I, II and III of Form 10-K except for the list of
executive officers of Registrant which appears at the end of Part I. The Cross-
Reference Table of Contents set forth below identifies the source of
incorporated material for each of the 10-K items included in Parts I, II, III
and IV (Items (a)(1) and (2)). Only those sections of the Annual Report to
Stockholders and the Proxy Statement cited in the Cross-Reference Table are part
of the 10-K and filed with the Securities and Exchange Commission.
10-K Item No. Incorporated by Reference From
------------- ------------------------------
PART 1
Item 1. Business
(a) General Development Annual Report to Stockholders,
of Business Inside front cover, pages 1-10,
17-21
(b) Financial Information (Not Applicable)
About Industry
Segments
(c) Narrative Description Annual Report to Stockholders,
of Business Inside front cover, pages 1-10
(d) Financial Information Annual Report to Stockholders,
About Foreign and page 19
Domestic Operations
and Export Sales
Item 2. Properties Annual Report to Stockholders,
Inside front cover, pages 6 and 7
Item 3. Legal Proceedings Annual Report to Stockholders,
pages 19-20
Item 4. Submission of Matters to a Vote (Not Applicable)
of Security Holders
<PAGE>
Executive Officers of the Registrant
------------------------------------
The executive officers of FMC Gold Company, together with the offices in FMC
Gold Company presently held by them, their business experience since January 1,
1990, and their ages, are as follows:
Age Office; year of election;
Name 3/1/95 and other information for past 5 years
---- ------ --------------------------------------
Larry D. Brady 52 Chairman of the Board and Chief Executive Officer
of the Company since November, 1991; President of
FMC (93); Executive Vice President of FMC (89-93);
Vice President-Corporate Development of FMC (88)
Brian J. Kennedy 51 President and Chief Operating Officer of FMC Gold
Company (87); Manager, Minerals Division of FMC
(84)
Donald L. Beckwith 48 Vice President-Operations (92); Vice President-
Development (87-92)
Nha D. Hoang 52 Vice President-International (93); Director,
International for FMC (87-93)
Steven E. Baginski 36 Vice President-Finance, Treasurer and Chief
Financial Officer (93); Manager of Business
Planning, Pepsi Co Foods International (92-93);
Chief Financial Officer, Frito-Lay of Hawaii
(89-92)
Robert L. Day 60 Secretary and General Counsel (87); Secretary and
Assistant General Counsel of FMC (87)
Each of the Company's executive officers has been employed by the Company and/or
by FMC Corporation in a managerial capacity for the past five years except for
Mr. Baginski. No family relationship exists between any of the above-listed
officers and there are no arrangements or understandings between any of them and
any other persons pursuant to which they were selected as an officer. All
officers are elected to hold office for one year and until their successors are
elected and qualify.
<PAGE>
10-K Item No. Incorporated by Reference From
------------- ------------------------------
Part II
Item 5. Market for Registrant's Annual Report to Stockholders,
Common Equity and Related Inside front cover, pages
Stockholder Matters 13, 15, 19 and 23
Item 6. Selected Financial Data Annual Report to Stockholders,
page 23
Item 7. Management's Discussion Annual Report to Stockholders,
and Analysis of Financial pages 2-10
Condition and Results of
Operations
Item 8. Financial Statements and Annual Report to Stockholders,
Supplementary Data pages 11-21
(including all Schedules
required under Item 14
of Part IV)
Item 9. Changes in and disagreements (Not Applicable)
with Accountants on
Accounting and Financial
Disclosure
Part III
Item 10. Directors and Executive Part I; Proxy Statement for
Officers of the Registrant 1995 Annual Meeting of Stockholders,
pages 1-3; Annual Report to
Stockholders, page 24
Item 11. Executive Compensation Proxy Statement for 1995
Annual Meeting of Stockholders,
pages 6-11
Item 12. Security Ownership of Proxy Statement for 1995
Certain Beneficial Annual Meeting of Stockholders,
Owners and Management pages 3-4
<PAGE>
Item 13. Certain Relationships Proxy Statement for 1995
and Related Transactions Annual Meeting of Stockholders,
pages 4-5, Annual Report to Stockholders,
pages 18 and 21
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(A) Documents filed with this Report
1. Consolidated financial statements of FMC Gold
Company and its subsidiaries are incorporated under Item 8 of this
Form 10-K.
2. All required financial statement schedules are
included in the consolidated financial statements or notes thereto
as incorporated under Item 8 of this Form 10-K.
3. Exhibits: See attached exhibit index, page 7.
(B) Reports On Form 8-K
No reports on Form 8-K were filed during the quarter
ended December 31, 1994.
(C) Exhibits
See Index Of Exhibits.
SIGNATURES
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.
FMC GOLD COMPANY
(Registrant)
Brian J. Kennedy
President
By Steven E. Baginski
--------------------
Steven E. Baginski
(Attorney-in-Fact)
Date: March 29, 1995
<PAGE>
Pursuant to the Requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.
<TABLE>
<CAPTION>
<S> <C>
LARRY D. BRADY* Chairman of the Board, Chief Executive
------------------------------ Officer and Director
Larry D. Brady
STEVEN E. BAGINSKI* Vice President-Finance, Principal Financial Officer and
------------------------------ Principal Accounting Officer
Steven E. Baginski
ROBERT N. BURT* Director
-------------------------------
Robert N. Burt
PAUL L. DAVIES, JR.* Director
-------------------------------
Paul L. Davies, JR.
NHA D. HOANG* Director
-------------------------------
Nha D. Hoang
BRIAN J. KENNEDY* Director
-------------------------------
Brian J. Kennedy
EDMUND W. LITTLEFIELD* Director
-------------------------------
Edmund W. Littlefield
*By STEVEN E. BAGINSKI March 29, 1995
-------------------------------
Steven E. Baginski
Attorney-in-Fact
</TABLE>
<PAGE>
INDEX TO EXHIBITS FILED
WITH OR INCORPORATED BY
REFERENCE INTO FORM 10-K
OF FMC GOLD COMPANY
FOR YEAR ENDED DECEMBER 31, 1994
--------------------------------
EXHIBIT NO. SEQUENTIAL
THIS 10-K EXHIBIT DESCRIPTION PAGE NO.
----------- ------------------- ----------
3.1 Certificate of Incorporation of the Company,
as amended (incorporated by reference to
Exhibit 3.1 of the Company's Registration
Statement on Form S-1 (No. 33-14429)) .............. N/A
3.2 By-Laws of the Company (incorporated
by reference to Exhibit 3.2 to the
Company's Registration Statement on Form
S-1 (No. 33-14429)) ................................ N/A
4.1 Form of certificate representing Shares
of Common Stock of the Company
(incorporated by reference to Exhibit
4.1 to the Company's Registration
Statement on Form S-1 (No. 33-14429)) .............. N/A
10.1 Management Services Agreement between
the Company and FMC (incorporated by
reference to Exhibit 10.1 to the
Company's Registration Statement on
Form S-1 (No. 33-14429)) .......................... N/A
10.2 Amendment No. 1 to Management Services
Agreement between the Company and
FMC (incorporated by reference to Exhibit
10 to the Company's Quarterly Report
on Form 10-Q for the quarter ended
September 30, 1987) ............................... N/A
10.3 Amendment No. 2 to Management Services
Agreement between the Company and FMC
(incorporated by reference to Exhibit
10.3 to the Company's Form 10-K for 1990) .......... N/A
10.4 Tax Sharing Agreement between the
Company and FMC dated April 1, 1994 ................ 10
<PAGE>
10.5 Addendum to Tax Sharing Agreement
dated April 1, 1994 between the Company
and FMC ........................................... 16
10.6 Bill of Sale, Purchase and Assumption
Agreement between the Company and FMC
(incorporated by reference to Exhibit
10.3 to the Company's Registration
Statement on Form S-1 (No. 33-14429)) .............. N/A
10.7 Joint Venture Agreement between
Freeport Exploration Company and FMC
Corporation (incorporated by reference
to Exhibit 10.4 to the Company's
Registration Statement on Form S-1
(No. 33-14429)) ................................... N/A
10.8* FMC Corporation Salaried Employees' Retirement
Plan, as amended and restated January 1,
1995 (incorporated by reference from
Exhibit 10.4 to the Form 10-K filed by
FMC on March 29, 1995) ............................ N/A
10.9* FMC Corporation Employees' Thrift and
Stock Purchase Plan, as revised and
restated as of April 1, 1991 (incorporated
by reference from Exhibit 10.3 to the Form SE
filed by FMC on March 27, 1992) .................... N/A
10.10* Amendments to the FMC Employees' Thrift
and Stock Purchase Plan through December
31, 1994 (incorporated by reference from
Exhibit 10.6 to the Form 10-K filed by
FMC on March 29, 1995) ............................. N/A
10.11* FMC Salaried Employees' Equivalent
Retirement Plan (incorporated by
reference from Exhibit 10.4 to the
Form SE filed by FMC on March 27, 1992) ............ N/A
10.12* FMC Deferred Compensation Equivalent
Retirement and Thrift Plan (incorporated
by reference from Exhibit 10.5 to the
Form SE filed by FMC on March 27, 1992) ............ N/A
<PAGE>
10.13* FMC Management Bonus Plan (incorporated
by reference from Exhibit 10.6 to the
Form SE filed by FMC on March 27, 1992) ............ N/A
10.14* FMC Employees' Thrift and Stock Purchase
Trust dated April 1, 1982 (incorporated by
reference from Exhibit 10.7 to the Form SE
filed by FMC on March 27, 1992) ................... N/A
10.15* Amendment to FMC Employees' Thrift and
Stock Purchase Trust dated April 1, 1988
(incorporated by reference from Exhibit
10.8 to the Form SE filed by FMC on
March 27, 1992) .................................... N/A
10.16* FMC Master Trust Agreement between FMC and
Bankers Trust Company (incorporated by
reference from Exhibit 10.9 to the
Form SE filed by FMC on March 27, 1992) ............ N/A
10.17* FMC Gold Company 1988 Long-Term Incentive
Compensation Plan (incorporated by
reference from Exhibit 10.19 to the
Company's Form 10-K for 1989) ...................... N/A
10.18* Agreement and Plan of Merger among
Meridian Minerals Company, Meridian Gold
Company, FMC Gold Company, FMC Corporation
and Burlington Resources, Inc. dated
April 19, 1990 (incorporated by reference
from Exhibit 1 to the Company's Current
Report on Form 8 dated April 19, 1990) ............. N/A
13 Annual Report of FMC Gold Company
for the year ended December 31, 1994............... 18
21 List of Significant Subsidiaries of
the Registrant...................................... 44
23 Consent of Auditors................................. 45
24 Powers of Attorney................................. 46
27 Financial Data Schedule............................ 52
* Indicates a compensatory plan or arrangement.
<PAGE>
EXHIBIT 10.4
TAX SHARING AGREEMENT
---------------------
This AGREEMENT is effective as of the first day of the consolidated return year
beginning April 1, 1994, by and between FMC Corporation, a Delaware corporation
("FMC") and FMC Gold Company, a Delaware corporation, and FMC Paradise Peak
Corporation, FMC Jerritt Canyon Corporation, Meridian Gold Company and FMC
Minerals Corporation, its wholly owned subsidiaries, plus any companies which
become subsidiaries hereafter (hereinafter collectively referred to as "FMC
Gold").
WITNESSETH
----------
WHEREAS, FMC is the common parent corporation of an affiliated group of
corporations (the "FMC Group") within the meaning of Section 1504(a) of the
Internal Revenue Code of 1986 (the "Code"), and FMC Gold is a member of said
affiliated group; and
WHEREAS, FMC files various separate, consolidated, and/or combined unitary state
income tax returns; and
WHEREAS, FMC and FMC Gold deem it appropriate to define the method and the
manner by which the Federal and state income tax liability or benefit of the FMC
Group shall be allocated and paid amongst the parties;
NOW, THEREFORE, in consideration of the premises of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. DETERMINATION OF FMC GOLD'S ALLOCABLE FEDERAL INCOME TAX LIABILITIES OR
BENEFITS
(a) FMC shall prepare and file a consolidated federal income tax return
for each year, commencing with the taxable year ending December 31,1994,
during the term of this Agreement (a "Consolidated Return Year") and pay
any consolidated federal income tax liability (the "Tax Liability") of the
FMC Group in respect of such year. FMC is hereby irrevocably constituted
the exclusive agent and attorney-in-fact of FMC Gold to file such return,
pay such tax, and take any action reasonably necessary or appropriate in
connection with the determination of the ultimate liability of the FMC
Group for such tax, including, without limiting the generality of the
foregoing, contesting the assessment of any deficiency, entering into any
closing agreement, compromise, or settlement, filing any amended return,
and prosecuting any action for a refund, on behalf of the FMC Group. FMC
Gold shall execute any consents or documents relating to any of the
foregoing.
<PAGE>
Tax Sharing Agreement - Page 2
(b) For each Consolidated Return Year, there shall be computed, the
federal income tax liability of FMC Gold, including alternative minimum tax
("AMT") and the environmental tax provided in Section 59A, and any other
federal tax, as if FMC Gold had filed a separate federal income tax return
under the Code for the taxable year ending December 31, 1994 and all
subsequent taxable years subject to this Agreement.
(c) The tax liability/benefit of FMC Gold shall be determined upon the
following basis:
(i) Carrybacks and/or carryovers of AMT credits, net operating
losses, investment tax credits, foreign tax credits, capital losses,
excess charitable contributions and similar tax attributes shall be
determined in accordance with the limitations and restrictions of the
Code and Regulations applicable to such tax year and shall be
accounted for as if separate federal income tax returns had been filed
by FMC Gold commencing with the taxable year ending December 31, 1994
and for all subsequent taxable years covered by this Agreement.
(ii) Any tax benefits made available to the FMC Group by FMC Gold in
any taxable year commencing with the taxable year ending December 31,
1994 or any subsequent taxable year covered by this Agreement and not
utilized by FMC Gold shall be allocated to FMC Gold only in the year,
and to the extent, that such benefits could have been utilized by FMC
Gold on a separate return basis (such as AMT credits of FMC Gold or a
net operating loss of FMC Gold made available to the FMC Group). Such
allocation shall give rise to an adjustment in favor of FMC Gold to
reduce its separate return tax liability in an amount equal to the
amount of the United States federal income tax saving which FMC Gold
could have affected in such year, or in later years in the case of
carryovers, by its own use on a separate return basis of such tax
benefit.
(iii) In the case of carrybacks of tax benefits to an earlier year in
which FMC Gold could have utilized such tax benefit, but not before
the taxable year ending December 31, 1987, FMC shall pay to FMC Gold
an amount equal to the benefit that FMC Gold would have derived from
the carryback on a separate return basis. FMC shall not pay or credit
any amounts to FMC Gold for the use of FMC Gold tax benefits which FMC
Gold would have been unable to utilize on a separate return basis.
(iv) Intercompany transactions between FMC Gold and any other member
of FMC Group shall be taken in the manner required by Regulations
Section 1.1502-13.
<PAGE>
Tax Sharing Agreement - Page 3
(v) If, at any time, FMC Gold ceases to be includible in the
affiliated FMC Group within the meaning of Code Section 1504 (a), the
Alternative Minimum Tax Credit ("MTC") allocable to FMC Gold shall be based upon
the formulary allocation provided in the Consolidated Return Regulations for
purposes of computing earnings and profits (as currently provided in Prop. Reg.
Sec 1.1502-55(h)(6)(vi) and Prop. Reg. Sec. 1.1502-55 (h) (7)). To the extent
that this amount is greater than MTC attributable to FMC Gold on a separate
return basis as computed under clauses 1(c)(i), 1(c)(ii), 1 (c)(iii) and
1(c)(iv) of this Agreement, FMC Gold must pay the difference to FMC. To the
extent this amount is less than MTC attributable to FMC Gold on a separate
return basis as computed under clauses 1(c)(i), 1(c)(ii), and 1(c)(iii) and
1(c)(iv) of this Agreement, FMC must pay the difference to FMC Gold.
2. DETERMINATION OF FMC GOLD'S STATE TAX LIABILITIES OR
BENEFITS
(a) Commencing with the taxable year ending December 31, 1994, FMC shall
include FMC Gold in the combined unitary income tax returns in all states
in which it is possible to do so and FMC Gold will not file separate income
tax returns for any state in which it is included in the FMC combined
unitary tax return.
(b) For each year, FMC Gold's state income tax liability or benefit for
each combined unitary state shall be determined by subtracting from:
(i) FMC's state income tax liability or benefit based upon FMC's
combined unitary taxable income for such state, excluding FMC's Gold's
income or loss and its payroll, property, and sales factors for such
state.
(ii) FMC's state income tax liability or benefit based upon FMC's
combined unitary taxable income for such state, including FMC Gold's
income or loss and its payroll, property and sales factors for such
state. The excess of subsection (ii) over subsection (i) shall
constitute FMC Gold's state income tax liability, and, the excess of
subsection (i) over subsection (ii) shall constitute FMC Gold's state
income tax benefit for such state.
FMC Gold's state income tax liability or benefit for each year shall be the
sum of its liabilities and benefits for each combined unitary state for which
it is included within FMC's combined unitary return .
<PAGE>
Tax Sharing Agreement - Page 4
3. PAYMENTS TO/FROM FMC GOLD WITH RESPECT TO ITS TAX LIABILITIES/BENEFITS
(A) FMC GOLD SHALL PAY TO FMC:
(i) On each date that quarterly estimated tax payments are due
(including those for AMT), the amount of the estimated federal income
tax liability which would have been payable by FMC Gold on such date,
if it were filing on a separate return basis as computed under clause
1 above, even if the FMC Group is not in a United States federal
income tax paying position.
(ii) On the filing date of the FMC Group consolidated return, the
balance, if any, of the tax liability of FMC Gold determined as if FMC
Gold had filed on a separate federal income tax return basis as
computed under clause 1 above, less any payments theretofore made by
FMC Gold pursuant to clause 3(a)(i) above, even if FMC Group is not in
a United States federal income tax paying position.
(iii) On the statutory due date for the filing of each state income
tax return by FMC, or if earlier, the due date of any estimated taxes,
to that extent, the amount of any liability for state tax of FMC Gold
as determined under clause 2 herein.
(B) FMC SHALL PAY TO FMC GOLD:
(i) In the case of an adjustment in favor of FMC Gold as a result of
a carryover which FMC Gold could have utilized on a separate return
basis as described in 1(c)(ii), the amount of the tax saving due to
FMC Gold shall be paid on the statutory due date for the carryover
year(s).
(ii) In the case of an adjustment in favor of FMC Gold as a result of
a carryback which FMC Gold could have utilized on a separate return
basis as described in 1(c)(iii), the amount of the tax saving due to
FMC Gold shall be paid within 10 days of the filing date of the return
year in which the carryback arose.
<PAGE>
Tax Sharing Agreement - Page 5
4. REDETERMINATION OF TAX LIABILITY
If any recomputation under any paragraph of this Agreement relating to any
year is required or appropriate for any reason, including, without limiting
the generality of the foregoing, by reason of refunds received or
liabilities incurred as a result of the filing of an amended return or the
examination of a return by the IRS or an application for refund, such
recomputation shall be made forthwith by FMC. In accordance with any such
recomputation, any additional sums payable by FMC Gold to FMC or vice versa
as the case may be, including any penalty or any interest received on any
refund or payable on any deficiency or penalty fairly attributable to the
reduced or additional tax liability, shall be paid by FMC Gold (or by FMC
as the case may be) within 45 days after its receipt of the written
computation reflecting the change or correction.
5. EFFECTIVE DATES AND COVERAGE
(a) The provisions of this Agreement shall become effective as of April 1,
1994 as if FMC Gold had been formed on such date, but will not be
applicable to estimated tax payments due prior to April 1, 1994. The
Agreement shall continue in effect so long as FMC Gold remains a member of
the affiliated group of FMC Group. FMC may terminate the FMC Group at any
time in its sole discretion, in accordance, with the applicable provisions
of the Code and Regulations. If FMC Gold is no longer included in the
Consolidated Return filed by FMC, the provisions of this Agreement with
respect to tax liabilities and benefits in respect of years prior to such
time, but after the date hereof, shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns.
(b) Any subsidiary of FMC Gold which is hereinafter required to join in
the filing of consolidated federal income tax returns with FMC shall become
a party to this Agreement by signing a master copy of this agreement.
6. OTHER MATTERS
(a) This Agreement contains the entire understanding of the parties hereto
with respect to the subject matter contained herein. No alteration,
amendment, or modification of any of the terms of this Agreement shall be
valid unless made by an instrument signed in writing by an unauthorized
officer of each party hereto. Notwithstanding the foregoing, this
Agreement may be amended consistent with the intent of this Agreement by
FMC in its sole discretion to reflect changes in the Code, regulations, or
other precedent thereunder or any state or local tax laws. This Agreement
shall be binding upon and inure to the benefit of each party thereto and
their respective successors and assigns.
(b) The prior tax sharing agreement entered into May 18, 1987 shall
continue to apply with respect to all tax matters to which it pertains for
all tax periods ending on or before May 15, 1990. The prior tax sharing
agreement entered into May 15, 1990 shall apply with respect to all matters
to which it pertains for all tax periods ending on or before the effective
date of this agreement.
<PAGE>
Tax Sharing Agreement - Page 6
(c) This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware.
(d) All notices and other communications hereunder shall be deemed to have
been duly given if delivered by hand or mailed certified or registered
mail, postage prepaid to
(I) FMC GOLD COMPANY
7011 Meadowood Way
Reno, Nevada 89502
Attention: President
(II) FMC CORPORATION
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Vice President, Finance
IN WITNESS WHEREOF, this Agreement has been duly executed on the date and year
first above written on behalf of the parties hereto by their respective officers
and duly authorized.
FMC CORPORATION
By: /s/ John E. Rogers
---------------------------
J.E. Rogers
Assistant Treasurer
FMC GOLD COMPANY
By: /s/ B. J. Kennedy
---------------------------
B. J. Kennedy
President
<PAGE>
EXHIBIT 10.5
ADDENDUM TO TAX SHARING AGREEMENT
EFFECTIVE APRIL 1, 1994 BETWEEN FMC
CORPORATION AND FMC GOLD
(The following shall become part of and be equivalent to having been included in
the Agreement originally)
4.1 ADJUSTMENT FOR FMC GOLD INTERNATIONAL SALES CORPORATION TAX
-----------------------------------------------------------
Notwithstanding anything above to the contrary, in the instance where FMC Gold
is in a net operating loss position for both regular income tax and for AMT tax
purposes and such losses cannot be utilized in their entirety by FMC Gold on a
separate company basis as provided in paragraph 1 (c), then in that instance
only, FMC Corporation shall be responsible for the portion of the federal tax of
FMC Gold International Sales Corporation as equals the lesser of the following:
. FSC Federal Tax - [20% (AMT Commission expense - AMT NOL)]
the amount in the brackets
cannot be less than zero
. FSC Federal Tax - [35% (Regular Commission expense - Regular NOL)]
the amount in the brackets
cannot be less than zero
For e.g., assume regular Commission expense is 900 and AMT Commission expense is
1,000 and that FMC Gold has a regular NOL of 800 and an AMT NOL of 500. Assume
further that the federal tax of the FMC Gold International Sales Corporation is
$122 (1,000,000 X 8/23 X 35%). Applying the above formula results in the
following:
. 122 - 20% (1,000 - 500) = 22
. 122 - 35% ( 900 - 800) = 87
The lesser amount of $22 computed above shall be borne by FMC. FMC Gold
International Sales Corporation shall be responsible for the balance of $100.
In the above instance, if the AMT NOL had exceeded 1,000 and regular tax NOL had
exceeded 900, FMC would have paid the entire $122 in tax due for FMC Gold
International Sales Corp.
<PAGE>
If in ensuing years, any portions of the Gold AMT NOL or regular tax NOL is
utilized by FMC Gold on a stand-alone basis, then FMC Gold International Sales
Corporation shall refund to FMC a ratable portion of the tax paid by FMC on its
behalf. The portion to be refunded shall be the result in the formulary
approach above, if the amount included for NOL was reduced by the amount now
utilized.
FMC CORPORATION
/s/ John E. Rogers
By:________________________
J. E. Rogers
Assistant Treasurer
FMC GOLD COMPANY
/s/ B. J. Kennedy
By:________________________
B. J. Kennedy
President
12-14-94
Date:______________________
<PAGE>
--------
FMC GOLD
COMPANY
--------
ANNUAL REPORT
1994
<PAGE>
CONTENTS
Message to Stockholders 2
Exploration 4
Development 5
Operations 6
Financial Review 9
Financial Results 12
Directors and Officers 24
STOCKHOLDER DATA
ANNUAL MEETING OF STOCKHOLDERS
FMC Gold's annual meeting of stockholders will be held at 11 a.m. on Wednesday,
May 3, 1995, in the Gold Room of the Stanford Court Hotel at 905 California
Street, San Francisco, California.
Notice of the meeting, together with proxy material, will be mailed
approximately 40 days prior to the meeting to stockholders of record as of March
15, 1995.
TRANSFER AGENT AND REGISTRAR OF STOCK
Harris Trust and Savings Bank
P.O. Box 755
Chicago, Illinois 60690
Questions concerning FMC Gold common stock should be sent to the above address.
EXCHANGE LISTINGS
Common stock: New York Stock Exchange FMC Corporation subordinated debentures
exchangeable into FMC Gold common stock: Luxembourg Exchange
COMMON STOCK SYMBOL
FGL
FORM 10-K
A copy of the company's annual report to the Securities and Exchange Commission
on Form 10-K for 1994 is available upon written request to:
FMC Gold Company
Communications Department
200 East Randolph Drive
Chicago, Illinois 60601
However, most information required under Parts I, II and III of Form 10-K has
been incorporated by reference to the annual report to stockholders or the proxy
statement.
FMC Gold was incorporated in 1987 under Delaware law.
ABOUT THE COVER:
The image is a Landsat Thematic Mapper composite of an area in northern Chile,
acquired in January 1986 and one of the exploration targets currently being
explored by FMC Gold. The image features a 6,000-meter volcano, the Cerro Azufre
o Copiapo; a lake, Laguna del Negro Francisco; and various rock types
differentiated by color.
CORPORATE PROFILE
FMC Gold is a precious metals producer, with 1994 production of 163,000 ounces
of gold and 154,000 ounces of silver. FMC Gold has reserves of 1.8 million
ounces of gold.
FMC Gold was formed in 1987 through a combination of FMC Corporation's North
American Precious Metals interests. In June 1987, FMC Gold sold 11.4 percent of
its shares to the public. In May 1990, FMC Gold issued eight million new shares
of stock to acquire Meridian Gold Company. FMC Corporation holds the remaining
80 percent of shares.
FMC Gold today has one producing property: Jerritt Canyon (30 percent
ownership), located near Elko, Nevada. The Beartrack mine (100 percent
ownership) in Salmon, Idaho, is in full-scale development and is expected to go
into production in 1995. In addition, FMC Gold pursues an active exploration
program through its property inventory in the western United States, Mexico and
Chile.
1994 HIGHLIGHTS
. Gold production of 163,000 ounces.
. In June 1994, the company purchased the remaining 14 percent interest in the
Beartrack joint venture from Minex, bringing FMC Gold's ownership in the
property to 100 percent.
. Capital expenditures rose to $56 million in 1994, primarily for development of
the Beartrack property near Salmon, Idaho. Production is scheduled to begin in
mid-1995.
. At year-end, FMC Gold held cash and cash equivalents of $118 million.
<PAGE>
[GRAPH]
SILVER PRICES
HIGH/LOW
1994 1993 1992 1991 1990
High 5.81 5.42 4.34 4.55 5.36
Low 4.99 3.56 3.66 3.53 3.96
[GRAPH]
GOLD PRICES
HIGH/LOW
1994 1993 1992 1991 1990
High 395 406 359 403 420
Low 370 326 330 344 348
[GRAPH]
PRODUCTION
GOLD EQUIVALENT OUNCES
(IN THOUSANDS)
1994 1993 1992 1991 1990
166 331 441 383 402
[GRAPH]
PRODUCTION COSTS(1)
$ PER GOLD EQUIVALENT OUNCE
1994 1993 1992 1991 1990
Full Cost 363 310 290 326 240
Cash Cost 246 194 180 220 161
[GRAPH]
EARNINGS PER SHARE
1994 1993 1992 1991 1990
0.00 0.12 0.20 0.10 0.56
(0.70)
OPERATING SUMMARY
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Production (thousands of ounces):
Gold 163 321 418
Silver 154 863 1,926
Total (gold equivalent) 166 331 441
Average realized price (ounce):
Gold $384.00 $357.00 $343.00
Silver $ 5.29 $ 3.94 $ 4.01
Average cash cost of production per gold equivalent ounce(1) $246.00 $194.00 $180.00
Year-end reserves (thousands of ounces):
Gold 1,769 1,752 2,279
Silver -- -- 4,321
FINANCIAL SUMMARY
(In millions, except per share data) 1994 1993 1992
Sales $ 63.4 $ 118.9 $ 150.0
Income before write-downs and other charges(2) $ 0.2 $ 9.3 $ 14.4
Write-downs and other charges $ -- $ (60.6) $ --
Net income (loss) $ 0.2 $ (51.3) $ 14.4
Earnings (loss) per common share:
Income before write-downs and other charges(2) $ -- $ 0.12 $ 0.20
Net income (loss) $ -- $ (0.70) $ 0.20
Exploration costs $ 11.2 $ 14.4 $ 12.2
Capital expenditures $ 56.2 $ 18.5 $ 19.0
Cash flow $ (48.4) $ 12.5 $ 28.9
Common shares outstanding 73.5 73.5 73.5
Common stock prices
High $ 7-1/8 $ 7-3/8 $ 6-1/4
Low $ 3 $ 4 $ 4
</TABLE>
(1)Cash cost of production includes all mine-site cash operating and
administrative expenses, including royalties and net proceeds taxes. Selling
expenses and pre-production stripping costs are excluded. Full cost includes
all cash costs plus non-cash costs and corporate overhead.
(2)Supplemental financial information. Income before write-downs and other
charges, and related earnings per share, should not be considered in
isolation nor as alternatives for net income (loss) or as the sole measures
of the company's profitability.
1
<PAGE>
MESSAGE TO STOCKHOLDERS
[PHOTO]
Larry D. Brady
1994 results for FMC Gold are disappointing.
With the May 1993 shutdown of our Paradise Peak mill and the July 1994 closure
of Royal Mountain King, production declined to 166,000 gold equivalent ounces,
and sales fell 47 percent to $63.4 million. Revenues were helped somewhat by
our unhedged position, which allowed the company to benefit from higher precious
metals prices during 1994. Average realized gold prices of $384 per ounce were
$27 higher than the prior year.
We generated net income of $0.2 million as operating profits at Paradise
Peak and Royal Mountain King, together with substantial interest income and a
reduction in our liability for future reclamation spending, essentially offset
an operating loss at Jerritt Canyon and our exploration and administration
costs.
This year's successes at Paradise Peak and Royal Mountain King are one-time
events. Other issues persist. At our minority-owned operation at Jerritt
Canyon, now our only producing property, we were disappointed by lower mill ore
grades and recoveries. We're working aggressively with our majority partner at
Jerritt Canyon to reorient the mine plan.
Meanwhile, legal developments have raised concern about the anticipated
start up of Beartrack, located in the Salmon National Forest near Salmon,
Idaho. In the second quarter, we became 100 percent owners of the Beartrack
property by purchasing our partner's 14 percent share, and we announced plans to
begin development of the property. In the third quarter of 1994, the Pacific
Rivers Council and the Wilderness Society, represented by the Sierra Club Legal
Defense Fund, Inc., filed a motion seeking an injunction against all ongoing and
future activities in the national forests of Idaho, including mining, that could
affect the local endangered species of salmon. Early in 1995, an injunction was
issued, stayed and subsequently dissolved.
We're continuing our development plans at Beartrack based on our successful,
three-year permitting effort and a favorable biological opinion from the
National Marine Fisheries Service.
Longer term, the key to our future lies in exploration activities, and we
made progress on this front. During 1994, we funded an $11 million exploration
program. More than half of this spending related to prospects outside the
United States, up from approximately one-third the prior year. We accelerated
international exploration to further evaluate targets in Chile and Mexico and to
generate additional opportunities in Chile. Our drilling program in Chile has
2
<PAGE>
[PHOTO]
Brian J. Kennedy
yielded particularly encouraging results over the past year.
This growing international focus is consistent with the increasingly
stringent regulatory environment in the United States and favorable trends in
mining elsewhere. Focused exploration spending on international projects will
continue in 1995.
Meanwhile, our international business development group is attempting to
pursue advanced-stage opportunities in the former Soviet Union and China. The
process, however, is a long and frustrating one.
In the United States, we focused our exploration efforts on the Rossi
property on the Carlin Trend and the Jerritt Canyon operation, both in Nevada.
Drilling at Rossi, aimed at deep targets, has yielded substantial intercepts.
The Jerritt Canyon program resulted in the SSX and Dash deposits being added to
proven and probable reserves. During 1995, we will continue our deep drilling
program at the Rossi property and will continue to assess the overall claim
block at Jerritt Canyon.
The company's gold reserves totaled 1.8 million ounces at year-end,
unchanged from the prior year. At Jerritt Canyon, exploration efforts focused
on replenishing proven reserves and identifying new resources. But by year-end
1994, FMC Gold's 30-percent share of proven and probable gold reserves had
declined 10 percent to 793,000 ounces. With our 1994 purchase of the remaining
14 percent interest in Beartrack, FMC Gold now counts 976,000 ounces of proven
and probable reserves at that site.
At year-end, our balance sheet included $118 million of cash equivalents.
This strong cash position with no debt ensures our ability to respond to
successful exploration or business development programs.
[SIGNATURE]
Larry D. Brady
Chairman of the Board
and Chief Executive Officer
[SIGNATURE]
Brian J. Kennedy
President and Chief
Operating Officer
March 10, 1995
3
<PAGE>
EXPLORATION
Total exploration spending in 1994 was $14.1 million, with $11.2 million
expensed and $2.9 million capitalized. In the United States, we spent a total of
$7.5 million, primarily seeking ore extensions around the Beartrack and Jerritt
Canyon properties. The company spent $5.9 million in prospect drilling and
reconnaissance work in Latin America, mainly in Chile and Mexico. We
capitalized the $2.9 million of development work at Jerritt Canyon related to
the SSX and DASH deposits.
Results from the Chilean program are encouraging, and we expect to
increase our exploration spending there in 1995. At the 30-percent-owned
Jerritt Canyon mine, we located significant mineralization and made extensions
to reserves. But total reserves declined 10 percent to 793,000 ounces. The
extensive Rossi property, situated at the north end of the Carlin Trend,
continues to provide good drilling results. Further large-scale evaluation will
continue in the coming year.
FMC GOLD ORE RESERVES (PROVEN AND PROBABLE)(1)
<TABLE>
<CAPTION>
<S> <C> <C>
December 31, 1994 December 31, 1993
(In thousands,
except grades) Tons(2) Grade Ounces(3) Tons(2) Grade Ounces(3)
(OPT) (Cont) (OPT) (Cont)
Gold
Jerritt Canyon (30%)
Millable 4,744 0.167 793 5,530 0.158 876
Heap leach -- -- -- 150 0.026 4
Royal Mountain King
Millable -- -- -- 628 0.053 33
Beartrack
Heap leach(4) 27,572 0.035 976 23,712 0.035 839
--------------------------------------------------------
Total 32,316 N/A 1,769 30,020 N/A 1,752
------------------------------------------------------------------------------
</TABLE>
(1) Reserve estimates for 1994 and 1993 are based on assumed prices of $375 and
$350 per ounce for gold, respectively.
(2) Based on optimized mine plans, which incorporate as necessary the impacts of
dilution and access for FMC Gold operations.
(3) Contained ounces exceed recoverable ounces due to metal losses experienced
during the extraction process. Precious metal recoveries are dependent on
process used, grade of ore and metallurgy. Estimated recoveries are as
follows: Jerritt Canyon mill ore--90%. Jerritt Canyon heap-leach ore--60%.
Royal Mountain King mill ore--75-80%. Beartrack heap-leach ore--66%.
(4) Beartrack's 1993 reserves were determined based upon an 86% ownership
interest in the property. During 1994, the company purchased the remaining
14% interest from Minex to obtain 100% ownership of the property.
4
<PAGE>
DEVELOPMENT
In the second quarter, we announced that we would begin development of the
Beartrack property. The decision was based on favorable gold prices and a
biological opinion by the National Marine Fisheries Service that the proposed
Beartrack mine was "not likely to jeopardize" the endangered species of
salmon.
In 1994, we invested $48 million of an expected $57 million for this
project.
The project is a heap-leach operation containing approximately one million
ounces of proven and probable gold reserves. Eighty-five percent of the minable
ore reserves are on patented land. Annual production is expected at about
100,000 ounces per year. The first gold production is expected by mid-year 1995.
Cash costs are expected to approximate $190 per ounce in 1995.
In October, the Sierra Club Legal Defense Fund, Inc., on behalf of certain
other organizations, sued the National Marine Fisheries Service and other
federal agencies for violation of the Endangered Species Act, alleging that the
Marine Fisheries' biological opinion failed to satisfy the requirements of the
act.
In a lawsuit currently pending in Federal District Court in Idaho (Pacific
Rivers Council v. Thomas), the Pacific Rivers Council and the Wilderness Society
sought an injunction during the third quarter of 1994 against all ongoing and
future forest activities, including mining, that could affect the endangered
salmon in Idaho's national forests. In early 1995, that injunction was issued,
stayed and subsequently dissolved as the U.S. Forest Service completed its
consultation with the National Marine Fisheries Service regarding existing land
resource management plans for Idaho's national forests and potential effects on
endangered salmon.
Based on our favorable biological opinion from the National Marine Fisheries
Service, which we believe was carefully considered and fully supported by the
record, we are continuing our planned activity at the Beartrack site. We plan to
have production on stream by mid-1995. However, a different conclusion in the
remaining lawsuit could result in suspension of further development or operation
of the Beartrack property.
5
<PAGE>
OPERATIONS
Jerritt Canyon
The Jerritt Canyon mine, located 57 miles northwest of Elko, Nevada, is
30-percent-owned by FMC Gold. Our joint-venture partner, Independence Mining
Company, Inc. (IMC), is a wholly owned subsidiary of Minorco (U.S.A.) Inc., and
operates the mine.
Development and mining activities take place at Jerritt Canyon on various
ore bodies scattered over a 160-mile claim block. Ore is processed through one
of two milling circuits--a wet mill circuit for less refractory ores, and a dry
milling and ore roasting circuit for more refractory ores that contain a higher
carbon content.
In 1994, FMC Gold's 30 percent share of gold production was 98,000
ounces, down 9 percent from the previous year, reflecting lower ore grades
and recoveries. The mine moved 27 million tons of material, down 35 percent
from the prior year because a substantial portion of existing open pit
resources have been exhausted.
Mill through-put declined 5 percent in 1994 to 8,122 tons per day. The
average grade of ore milled declined 8 percent to 0.119 ounces per ton, while
the average recovery slipped from 89 percent in 1993 to 88 percent in the
current year.
The average cash cost of production increased 18 percent to $283 per
ounce, reflecting a combination of fewer tons being mined with higher mining
cost per ton.
At year-end 1994, FMC Gold's share of reserves declined 10 percent to
793,000 ounces. Approximately two-thirds of the current reserve is contained
in underground ore bodies, with nearly half of the total in the New Deep ore
body discovered in 1990.
FMC Gold's share of exploration costs on the claim block was
$2.9 million in 1994.
6
<PAGE>
Paradise Peak
The wholly owned Paradise Peak mine, located 140 miles southeast of Reno,
Nevada, discontinued operation of the mill in May 1993, and mining activity
ended in August 1993. Reclamation of the mine site began in 1993. During the
reclamation process, the operation has been able to recover residual ounces from
the low-grade heap-leach operations.
Gold production in 1994 was 39,000 ounces, roughly 25 percent of the prior
year's output; similarly, silver production decreased 84 percent to 130,000
ounces. Cash costs of production increased 6 percent to $124 per ounce.
Reclamation of the mine site progressed well in 1994. The reclamation
process is likely to continue into 1997. As we continue to detoxify the heap-
leach pads, we expect to recover a small amount of additional gold in the first
quarter of 1995.
Royal Mountain King
The wholly owned Royal Mountain King mine, located in Calaveras County, 40 miles
east of Stockton, California, was shut down in July 1994 due to the depletion of
the ore body. As a result, the mine produced 26,000 ounces of gold versus 55,000
ounces the prior year.
Cash costs of $296 per ounce in 1994 were 12 percent lower than the prior
year due to lower mining costs, as a significant portion of production came from
processing stockpiled material.
Decommissioning of the mill facility and reclamation of the mine site began
in August. The reclamation process is expected to continue for several years,
with the majority of spending completed by 1998.
7
<PAGE>
STATISTICAL SUMMARY
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Tons of ore processed (thousands)
Paradise Peak
--Mill -- 587 1,727 1,558 1,409
--Heap leach -- 3,918 4,715 3,217 803
-------------------------------------------------
Total -- 4,505 6,442 4,775 2,212
Jerritt Canyon (FMC Gold share) 889 936 897 865 754
Royal Mountain King 700 1,334 1,405 1,368 659
------------------------------------------------------------------------------------
Ore grade (ounces per ton)
Paradise Peak (Mill)
--Gold -- 0.115 0.097 0.079 0.136
--Silver -- 1.900 1.511 2.166 5.599
Paradise Peak (Heap leach)
--Gold -- 0.026 0.028 0.029 0.028
--Silver -- 0.331 0.278 0.316 0.540
Jerritt Canyon (Mill) 0.119 0.129 0.117 0.145 0.147
Royal Mountain King (Mill) 0.051 0.053 0.060 0.057 0.068
------------------------------------------------------------------------------------
Recoveries
Paradise Peak (Mill)
--Gold -- 89% 93% 92% 94%
--Silver -- 57% 63% 63% 68%
Paradise Peak (Heap leach)
--Gold -- 82% 74% 72% 74%
--Silver -- 8% 17% 16% 20%
Jerritt Canyon (Mill) 88% 89% 89% 88% 88%
Royal Mountain King (Mill) 73% 77% 82% 78% 81%
------------------------------------------------------------------------------------
Production (thousands of ounces)
Gold
Paradise Peak
--Mill -- 61 157 114 183
--Heap leach 39 97 94 68 16
Jerritt Canyon
(FMC Gold share) 98 108 96 113 98
Royal Mountain King 26 55 71 62 35
-------------------------------------------------
Total 163 321 418 357 332
Silver
--Mill 23 698 1,709 2,176 5,395
--Heap leach 131 165 217 161 86
-------------------------------------------------
Total 154 863 1,926 2,337 5,481
Total--gold equivalent(1) 166 331 441 383 402
(1) Silver/gold conversion ratio: 72.5:1 in 1994, 90.6:1 in 1993, 85.5:1 in 1992,
89.1:1 in 1991, 77.8:1 in 1990.
------------------------------------------------------------------------------------
Cash cost of production ($ per gold
equivalent ounce)
Paradise Peak $124 $117 $134 $180 $106
Jerritt Canyon $283 $240 $230 $219 $237
Royal Mountain King $296 $336 $285 $353 $365
Average $246 $194 $180 $220 $161
Full cost of production $363 $310 $290 $326 $240
</TABLE>
8
<PAGE>
FINANCIAL REVIEW
SALES AND EARNINGS
--------------------------------------------------------------------------------
Sales decreased to $63.4 million from $118.9 million in 1993,
reflecting the July 1994 shutdown of the mill at Royal Mountain King
and heap-leach only production at Paradise Peak, offset slightly by
higher precious metals prices. Gold production declined 49 percent
and silver production declined 82 percent. At Paradise Peak, gold
production declined to 39,000 ounces in 1994, due to the May 1993
mill shutdown and the winding down of the heap-leach operation. At
Jerritt Canyon, the company's 30 percent share of gold production
declined to 98,000 ounces due to lower ore grades and recoveries in
both the ore-roasting process and the wet mill. The Royal Mountain
King mine produced 26,000 ounces of gold in 1994, a 53 percent
decrease from 1993. Silver production continued to decline in 1994,
to 154,000 ounces compared with 863,000 ounces in 1993, as the
heap-leach operation at Paradise Peak wound down.
The average realized price of gold increased to $384 per ounce
from $357 in 1993. Average realized silver prices rose to $5.29
per ounce from $3.94 per ounce in 1993. The company's average
precious metal prices were essentially equal to commodity
market averages.
Cost of sales decreased to $53.8 million in 1994 due to the mill
shutdowns at Paradise Peak and Royal Mountain King and a $4.0
million reversal of previously accrued reclamation expense. $2.8
million in previously accrued reclamation was reversed for Paradise
Peak, and another $1.2 million was reversed for the Austin joint
venture, which went out of production in 1989. The reversals were
based on the latest estimates for total reclamation spending for these
properties. Offsetting some of these cost reductions was an
increase in Jerritt Canyon depletion expense of $4.8 million due to
a deterioration of minable tons in several open pits. Average cash
costs of production increased to $246 per gold equivalent ounce
from $194 in 1993, reflecting the exhaustion of low-cost mill ore at
Paradise Peak. Cash costs at Paradise Peak increased to $124 per
gold equivalent ounce in 1994, as costs were spread over fewer
ounces produced. Royal Mountain King cash costs per ounce
declined to $296 from $336 in 1993 due to lower mining costs.
Jerritt Canyon cash costs increased to $283 per ounce from $240
in 1993 due to a 9 percent decline in production and higher mining
costs per ton.
Exploration spending declined to $11.2 million in 1994 as a result
of the capitalization of $2.9 million of exploration spending at Jerritt
Canyon, and slightly lower spending for grassroots programs. Selling,
general and administrative expenses decreased slightly to $6.6 million
in 1994, due to lower allocated costs from FMC Corporation (FMC),
as well as continued cost reduction efforts. Interest income increased
to $8.7 million in 1994, as improved interest rates on loans to FMC
overcame the decreases in cash and cash equivalents that occurred in
the second half of 1994 due to development spending at Beartrack.
Net income was $0.2 million in 1994 compared with net income
of $9.3 million before the impact of write-downs and other charges
in 1993. After $60.6 million of write-downs and other charges the
company reported a net loss of $51.3 million in 1993. Earnings per
share were breakeven for 1994 compared with losses per share of
$0.70 in 1993.
TAXES
--------------------------------------------------------------------------------
The company's effective tax rate increased to 73 percent in 1994
compared with a 1 percent tax benefit in 1993. The company's break-
even earnings in 1994 and $51.6 million loss in 1993 distort effective
tax rate comparisons between 1994 and 1993. The 1994 provision
primarily represents a prior-year adjustment to the company's foreign
sales corporation benefits. Also in 1994, depletion tax benefits
and net operating loss carryover benefits were offset by increases
to the valuation allowance to fully reserve deferred tax assets.
In 1993, the company did not tax effect $60.6 million of asset
write-downs and other charges.
LIQUIDITY AND CAPITAL RESOURCES
--------------------------------------------------------------------------------
Cash to meet the company's operating needs, finance capital expen-
ditures and fund exploration activities was provided from operations
and existing cash reserves (including loans due from FMC). At
December 31, 1994, cash and cash equivalents totaled $118.4
million, primarily in the form of loans to FMC, which have varying
maturities and are payable on demand. As of December 31, 1994,
FMC's cash on hand and available credit lines were more than
adequate to allow repayment of these loans.
Capital expenditures rose to $56.2 million in 1994 due mainly
to the start up of development of the Beartrack property. Capital
expenditures related to Beartrack included $35 million of develop-
ment and $6 million to purchase the remaining 14 percent interest in
the Beartrack property. Other capital expenditures included $14.9
million in spending for mine development and equipment additions at
Jerritt Canyon and approximately $0.3 million of new capital for
Reno-based exploration and administrative functions.
The company also invested an additional $7 million in Beartrack
in 1994, primarily to purchase put options, giving the company
the right to sell gold at an agreed-upon price, and to fund working
capital needs.
On December 31, 1994, the company paid a dividend on
common stock of $0.05 per share to stockholders of record on
December 8, 1994.
Expected cash requirements for 1995 include approximately
9
<PAGE>
$37 million for planned capital expenditures, primarily associated
with bringing the Beartrack project into production in 1995 and
further mine development at Jerritt Canyon. Exploration spending
for 1995 is expected to approximate $12 million and $3.7 million
is planned for dividends, based on the current dividend rate. The
company expects to fund these requirements from cash flow from
operations and existing cash and cash equivalents.
As a matter of course, the company periodically evaluates the
possible acquisition of other mining assets or companies. Should
such an acquisition occur, or should mine development at any of the
company's existing properties prove beneficial, significant cash
requirements may be necessary. The company believes that any
unexpected cash requirements could be funded by existing cash
reserves (including loans due from FMC) or through borrowing
from third parties.
1994 FOURTH QUARTER COMPARED WITH 1993
--------------------------------------------------------------------------------
Sales in the fourth quarter fell 57 percent to $11.3 million from
$26.3 million in the fourth quarter of 1993, as a result of the
shutdown of the mill at Royal Mountain King and lower heap-leach
production from Paradise Peak.
In the fourth quarter, the average realized price of gold increased
to $386 per ounce from $373 per ounce in 1993. The average
realized price of silver increased 9 percent to $5.15 per ounce. Gold
production decreased to 29,000 ounces from 64,000 ounces in the
fourth quarter of 1993. At Paradise Peak, gold production declined
to 5,000 ounces from 22,000 ounces in the fourth quarter of 1993.
The decrease in gold production reflected the winding down of the
heap-leach operation. At Jerritt Canyon, gold production decreased
23 percent to 24,000 ounces in the fourth quarter due to lower
mill ore grades and recoveries.
Silver production for the fourth quarter declined to 26,000 ounces
from 47,000 ounces in 1993 as a result of the winding down of
the heap-leach operation at Paradise Peak.
Cost of sales decreased $10.0 million to $9.8 million due mainly
to the cessation of mill operation at Royal Mountain King and a
$4.0 million reversal of previously accrued reclamation expense at
Paradise Peak and the Austin joint venture property. The Austin joint
venture property went out of production in 1989. Offsetting some of
these cost reductions was an increase in Jerritt Canyon depletion
expense due to a deterioration of minable tons in several open pits.
Average cash production costs for the quarter increased to $268 per
gold equivalent ounce compared with $209 per gold equivalent
ounce in 1993, reflecting the decline in low-cost production from
Paradise Peak.
Exploration expense declined $4.0 million to $0.9 million due to
timing of spending for grassroots programs and the capitalization of
$2.9 million of exploration spending at the Jerritt Canyon property.
Selling, general and administrative expenses declined $0.4 million,
as a result of lower allocated costs from FMC Corporation and
continuing cost reduction efforts. Interest income decreased slightly
to $2.1 million as the loan balances declined but better interest rates
were achieved.
Net income for the quarter declined to $0.6 million from $3.1
million (before $60.6 million in write-downs and other charges) in
1993, due to the lower production resulting from the mill shutdown
at Royal Mountain King and the winding down of the heap-leach
operation at Paradise Peak. In December 1993, the company
recorded an after-tax charge of $60.6 million, or $0.82 per share,
primarily to cover the write-down of the Beartrack development
property. After the $60.6 million charge, 1993 losses per share were
$0.78 for the quarter. Earnings per share for the fourth quarter of
1994 were $0.01.
1993 COMPARED WITH 1992
--------------------------------------------------------------------------------
Sales decreased to $118.9 million from $150.0 million in 1992,
primarily due to a 23 percent decrease in gold production and a
55 percent decrease in silver production, offset in part by higher
gold prices. At Paradise Peak, gold production decreased to 158,000
ounces from 251,000 ounces in 1992, due to the exhaustion of mill
grade ore in July, 1993. At Jerritt Canyon, the company's 30 percent
share of gold production increased to 108,000 ounces from 96,000
ounces in 1992 due to higher ore grades. Production at the Royal
Mountain King mine declined to 55,000 ounces from 71,000 ounces
in 1992 as a result of lower ore grades and recoveries. Silver
production declined to 863,000 ounces from 1.9 million ounces in
1992, reflecting the exhaustion of mill grade silver ore at
Paradise Peak.
The average realized price of gold increased to $357 per ounce
from $343 per ounce in 1992. The average realized price of silver
declined slightly to $3.94 from $4.01 per ounce in 1992.
Average cash costs of production increased to $194 per gold
equivalent ounce from $180 in 1992, reflecting the exhaustion of
the low-cost mill ore at Paradise Peak, in addition to higher costs
at Jerritt Canyon and Royal Mountain King.
Exploration spending increased to $14.4 million in 1993, with
increased spending related to Jerritt Canyon and the expanding
international program. Selling, general and administrative expenses
decreased to $7.0 million in 1993 from $7.7 million in 1992 as a
result of lower allocated costs from FMC Corporation (FMC) and
continued cost reduction efforts. Interest income increased to $8.3
million in 1993, reflecting a $12.5 million increase in cash and
cash equivalents and higher interest rates on loans to FMC. Net
income in 1993 was $9.3 million before the impact of write-downs
and other charges. In December 1993, the company recorded a
$60.6 million charge primarily for the write-down of assets. The
charge included an asset write-down of $51.0 million for the Beartrack
development property and related investments. After the $60.6
million in write-downs and other charges net loss for 1993 was
$51.3 million. Losses per share were $0.70 in 1993, compared with
earnings of $0.20 per share in 1992.
10
<PAGE>
<TABLE>
<CAPTION>
QUARTERLY FINANCIAL INFORMATION (unaudited)
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
(In millions, except per share data) 1994 1993
-------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $ 22.3 $ 17.8 $ 12.0 $ 11.3 $ 35.5 $ 31.2 $ 25.9 $ 26.3
-------------------------------------------------------------------------------------------------------
Gross profit $ 7.2 $ 2.2 $ (1.4) $ 1.5 $ 5.4 $ 5.4 $ 4.8 $ 6.5
-------------------------------------------------------------------------------------------------------
Earnings (loss) before interest
and taxes $ 2.7 $ (2.6) $ (7.1) $ (1.2) $ 1.4 $ (0.4) $ 0.2 $(61.1)
-------------------------------------------------------------------------------------------------------
Net income (loss) $ 4.6 $ (0.3) $ (4.7) $ 0.6 $ 2.8 $ 1.0 $ 2.4 $(57.5)
-------------------------------------------------------------------------------------------------------
Earnings (loss) per common share(1) $ 0.06 $ 0.00 $(0.06) $ 0.01 $ 0.04 $ 0.01 $ 0.03 $(0.78)
-------------------------------------------------------------------------------------------------------
Dividends per common share $ 0.05 $ 0.05
-------------------------------------------------------------------------------------------------------
Common stock prices:
High $7 1/8 $6 7/8 $5 3/8 $4 7/8 $5 1/8 $6 7/8 $7 3/8 $5 3/4
Low $5 1/4 $5 1/8 $4 7/8 $3 $4 $4 3/8 $4 7/8 $4 7/8
=======================================================================================================
(1) Quarterly earnings per common share may differ from the full-year amounts due to rounding.
</TABLE>
11
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(In thousands, except per share data) Year ended December 31
--------------------------------------------------------------------------
1994 1993 1992
--------------------------------------------------------------------------
Sales $63,369 $118,927 $150,030
--------------------------------------------------------------------------
Costs and expenses
Cost of sales 53,821 96,822 119,987
Exploration costs 11,153 14,414 12,174
Selling, general and administrative expenses 6,551 7,003 7,664
Write-downs and other charges (Note 3) -- 60,600 --
--------------------------------------------------------------------------
Total costs and expenses 71,525 178,839 139,825
--------------------------------------------------------------------------
Earnings (loss) before interest and taxes (8,156) (59,912) 10,205
--------------------------------------------------------------------------
Interest income 8,717 8,336 5,965
--------------------------------------------------------------------------
Income (loss) before income taxes 561 (51,576) 16,170
Provision (benefit) for income taxes (Note 8) 410 (313) 1,725
--------------------------------------------------------------------------
Net income (loss) $ 151 $(51,263) $ 14,445
==========================================================================
Earnings (loss) per common share (Note 1) $ -- $ (0.70) $ 0.20
--------------------------------------------------------------------------
See notes to consolidated financial statements.
FMC GOLD COMPANY
12
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(In thousands, except per share data) December 31
------------------------------------------------------------------------------
1994 1993
------------------------------------------------------------------------------
<S> <C> <C>
Current assets
Loans due from FMC Corporation (Notes 1 and 12) $ 120,326 $ 167,326
Trade receivables 1,496 2,527
Inventories (Note 4) 5,621 3,776
Other current assets 1,558 1,236
------------------------------------------------------------------------------
Total current assets 129,001 174,865
Property, plant and equipment, at cost (Note 5) 298,919 246,117
Accumulated depreciation (197,652) (185,512)
Deferred income taxes (Note 8) -- 2,527
Other assets (Notes 1 and 11) 4,821 638
------------------------------------------------------------------------------
Total assets $235,089 $238,635
==============================================================================
Current liabilities
Outstanding checks in excess of bank balances (Note 1) $ 1,940 $ 542
Accounts payable, trade and other 11,110 8,206
Accrued and other liabilities (Note 6) 9,025 11,935
Amounts due to FMC Corporation (Note 12) 594 1,069
Income taxes payable (Notes 1 and 8) 1,919 4,922
------------------------------------------------------------------------------
Total current liabilities 24,588 26,674
Other long-term liabilities (Note 7) 14,379 12,316
Commitments and contingent liabilities (Note 11)
------------------------------------------------------------------------------
Stockholders' equity
Preferred stock, $1.00 par value, authorized
100,000 shares; none issued or outstanding --
Common stock, $0.01 par value, authorized
150,000,000 shares; issued and outstanding
73,484,395 shares in 1994 and 1993 735 735
Capital in excess of par value 68,609 68,609
Retained earnings 126,778 130,301
------------------------------------------------------------------------------
Total stockholders' equity 196,122 199,645
------------------------------------------------------------------------------
Total liabilities and stockholders' equity $235,089 $238,635
==============================================================================
</TABLE>
See notes to consolidated financial statements.
FMC GOLD COMPANY
13
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------------------------------------------------------
(In thousands) Year ended December 31
-------------------------------------------------------------------------------------------------------------------------
1994 1993 1992
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $ 151 $(51,263) $ 14,445
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for depreciation and amortization 15,275 25,804 30,653
Deferred tax provision (benefit) (Note 8) 2,527 (1,335) (3,022)
Write-downs and other charges (Note 3) -- 60,600 --
(Increase) decrease in assets:
Trade receivables 1,031 1,246 34
Inventories (1,845) 2,516 85
Other current assets (322) (816) 169
Other assets (4,015) -- --
(Decrease) increase in liabilities:
Accounts payable, trade and other 2,904 390 (3,775)
Accrued and other liabilities (2,910) 1,623 5,518
Amounts due to FMC Corporation (475) (313) (110)
Income taxes payable (3,003) (2,178) 4,047
Other long-term liabilities 2,063 (2,885) 3,153
-------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 11,381 $ 33,389 $ 51,197
-------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital spending (56,188) (18,455) (19,037)
Disposal of property, plant and equipment, net 251 1,431 465
Increase in other assets (168) (223) (20)
-------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (56,105) (17,247) (18,592)
-------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Dividends paid (3,674) (3,674) (3,674)
-------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents (48,398) 12,468 28,931
Cash and cash equivalents, beginning of year 166,784 154,316 125,385
-------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year $118,386 $166,784 $154,316
=========================================================================================================================
</TABLE>
Supplemental disclosure of cash flow information:
Cash paid for income taxes during 1994, 1993 and 1992 was $895, $3,180 and $700,
respectively.
See notes to consolidated financial statements.
FMC GOLD COMPANY
14
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Number Capital
of Common in excess Retained
(In thousands) shares stock of par value earnings
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance December 31, 1991 73,484 $735 $68,609 $174,467
Net income 14,445
Cash dividend ($0.05 per share) (3,674)
-------------------------------------------------------------------------------------
Balance December 31, 1992 73,484 735 68,609 185,238
Net loss (51,263)
Cash dividend ($0.05 per share) (3,674)
-------------------------------------------------------------------------------------
Balance December 31, 1993 73,484 735 68,609 130,301
Net income 151
Cash dividend ($0.05 per share) (3,674)
-------------------------------------------------------------------------------------
Balance December 31, 1994 73,484 $735 $68,609 $126,778
=====================================================================================
</TABLE>
See notes to consolidated financial statements.
FMC GOLD COMPANY
15
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 PRINCIPAL ACCOUNTING POLICIES
----------------------------------------------------------------
CONSOLIDATION.
The consolidated financial statements include the accounts of FMC Gold Company
("the company") and all majority-owned subsidiaries. The accounts of joint
ventures in which the company holds an interest are consolidated on a pro rata
basis. All significant inter-company accounts are eliminated in consolidation.
CASH AND CASH EQUIVALENTS.
Cash and cash equivalents consists of:
-----------------------------------------------------------
Year ended December 31
-----------------------------------------------------------
(In thousands) 1994 1993 1992
-----------------------------------------------------------
Loans due from FMC
Corporation $120,326 $167,326 $154,826
Outstanding checks in
excess of bank balances (1,940) (542) (510)
-----------------------------------------------------------
Total cash and cash
equivalents $118,386 $166,784 $154,316
===========================================================
Loans due from FMC consist of four notes, with varying maturities, due upon
demand. Terms and conditions of these loans are covered by the management
services agreement between the company and FMC (Note 12).
As a result of the company's participation in FMC's centralized cash
management system, the company reported a liability for outstanding checks in
excess of bank balances due to the timing of cash transfers from FMC.
RECEIVABLES.
Trade receivables are stated net of allowance for doubtful accounts. The
allowance for doubtful receivables was $0.3 million in 1994. There was no
allowance in 1993.
INVENTORIES.
Finished goods inventories are stated at the lower of the average cost or
market, and include labor, materials, other production costs and depreciation.
No inventory value is assigned to stockpiled ore or in-process material, except
for certain stockpiled leach-pad ore where cost includes labor, materials and
other production costs.
PROPERTY, PLANT AND EQUIPMENT.
Property, plant and equipment, including development costs and capitalized
interest associated with the construction of certain capital assets, is recorded
at cost. Depreciation and amortization for financial reporting purposes is
provided principally on the straight-line basis over the shorter of the
estimated lives of the assets or the estimated proven and probable recoverable
reserves. Gains and losses are reflected in income upon sale or retirement of
assets.
Maintenance and repairs are charged to expense in the year incurred.
Expenditures that extend the useful life of property, plant and equipment or
increase its productivity are capitalized.
MINERAL EXPLORATION AND DEVELOPMENT COSTS.
Mineral exploration and preliminary development costs are expensed as incurred.
Development costs applicable to mineralized properties deemed capable of
commercial production are capitalized and then amortized over units of
production.
RECLAMATION.
Reclamation and shutdown costs to be incurred when mining operations are
closed are estimated and accrued over the life of the mine.
INCOME TAXES.
Prior to January 1, 1993, income tax provisions were based on income reported
for financial statement purposes, adjusted for transactions (permanent
differences) that do not enter into the computation of income taxes payable. The
company deferred the tax effects of timing differences between financial
reporting and tax income. Effective January 1, 1993, the company adopted
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes." SFAS No. 109 requires an asset and liability approach, whereby
deferred tax liabilities and assets are recognized for expected future tax
consequences of temporary differences between the carrying amounts and tax bases
of assets and liabilities.
FORWARD SALES AND HEDGING.
In order to minimize exposure to decreasing prices for portions of its gold
production, the company has hedged future gold production by entering into
contracts, such as fixed forward sales contracts and put options. Gains and
losses related to these hedging transactions are recognized in revenues as the
related production is sold. In addition, costs associated with the purchase of
certain hedge instruments amounting to $4.0 million included in other assets for
open put options as of December 31, 1994, are also deferred and recognized
concurrently with the revenues related to the hedged production.
EARNINGS PER COMMON SHARE.
Earnings per common share are computed by dividing net income (loss) by the
weighted average number of shares of common stock and common stock equivalents
(incentive plan shares) outstanding during the year (73,484,395 in 1994, 1993
and 1992).
FINANCIAL INSTRUMENTS.
The fair value of financial instruments approximated their carrying values at
December 31, 1994, 1993 and 1992. Fair values have been determined through
information obtained from both market sources and management estimates.
16
<PAGE>
Accounting standards not adopted. The Accounting Standards
Executive Committee of the AICPA adopted Statement of Position
94-6 on December 30, 1994. This SOP, "Disclosure of Certain Signifi-
cant Risks and Uncertainties and Financial Flexibility," is effective
for fiscal years ending after December 15, 1995. The disclosures
required by the SOP focus primarily on the nature of an entity's
operations, the use of estimates in preparation of financial statements
and on risks and uncertainties that could significantly affect the
amounts reported in the financial statements. The company plans to
adopt the statement for the annual report to shareholders for 1995
but it is not possible, at this time, to determine what additional dis-
closures may be necessary with respect to reasonably possible risks
and uncertainties that could significantly affect the amounts reported
in the 1995 financial statements.
NOTE 2 ACQUISITIONS AND DIVESTITURES
--------------------------------------------------------------------------------
In June 1994, the company agreed to purchase the remaining
14 percent interest in the Beartrack joint venture from MINEX for
$6.0 million, bringing the company's ownership in the property to
100 percent. The first installment of $1.5 million was made to Minex
in June. Another $1.5 million payment will be made in 1995, with the
balance owed to Minex paid in $1.0 million installments in 1996, and
1997, and $0.5 million installments in 1998 and 1999. The Beartrack
property is more fully described in management's review of operations.
In April 1993, the company purchased the remaining 50 percent
interest in the Humboldt Gold Venture from TRE Management Company
for $5.5 million, bringing the company's ownership interest in all
gold and precious metal-bearing ores in the related property to 100
percent. The former Humboldt Gold Venture is targeting deep gold
mineralization at the "Rossi Property" on the Carlin Gold Trend
in Nevada.
NOTE 3 WRITE-DOWNS AND OTHER CHARGES
--------------------------------------------------------------------------------
In December 1993, the company recorded a special charge of $60.6
million or $0.82 per share. This charge included a write-down of $51.0
million for the Beartrack development property and related invest-
ments. The Beartrack property was acquired for stock in 1990. Gold
prices did not increase as projected; and therefore, the book value
of the property was written down to reflect the lower prices. The
property, however, has potential to add shareholder value assuming
certain gold prices and other positive conditions. As a result of
improved prices and project economics, the company decided in
May 1994 to invest $57 million to develop the project.
Also included was a charge of $4.6 million associated with the
write-down of fixed assets at the Royal Mountain King mine, which
completed production in mid-1994. A charge of $5.0 million was
also recorded at Paradise Peak for additional mine closure costs
in 1994 and beyond. The Paradise Peak mill shut down in May, 1993.
NOTE 4 INVENTORIES
--------------------------------------------------------------------------------
Inventories included at cost in current assets at December 31 were:
-----------------------------------------------
(In thousands) 1994 1993
-----------------------------------------------
Gold and silver $ 279 $ 482
Leach-pad ore 2,730 --
Materials and supplies 2,612 3,294
-----------------------------------------------
Total $5,621 $3,776
===============================================
Gold and silver inventories are in the form of dore, which is
suitable for delivery to precious metal treatment facilities. These inven-
tories are generally sold to and further processed by these facilities
into forms suitable for end uses.
NOTE 5 PROPERTY, PLANT AND EQUIPMENT
--------------------------------------------------------------------------------
Property, plant and equipment consists of the following:
---------------------------------------------------------
December 31,
---------------------------------------------------------
(In thousands) 1994 1993
---------------------------------------------------------
Land and land improvements $ 9,484 $ 8,700
Buildings 5,037 5,177
Machinery and equipment 153,295 152,643
Construction in progress 47,685 4,189
Development costs 72,832 64,822
---------------------------------------------------------
Capitalized interest 10,586 10,586
---------------------------------------------------------
Total cost 298,919 246,117
Accumulated depreciation 197,652 185,512
---------------------------------------------------------
Net property, plant and equipment $101,267 $ 60,605
=========================================================
Depreciation expense was $15.3 million, $25.8 million and $30.7
million in 1994, 1993 and 1992, respectively.
NOTE 6 ACCRUED AND OTHER LIABILITIES
--------------------------------------------------------------------------------
Accrued and other liabilities at December 31 were:
----------------------------------------------------
(In thousands) 1994 1993
----------------------------------------------------
Shutdown and reclamation accrual
(Notes 1 and 7) $3,537 $ 9,036
Notes Payable (Note 2) 1,500 --
Accrued bonus and payroll 838 1,588
Other 3,150 1,311
----------------------------------------------------
Total $9,025 $11,935
----------------------------------------------------
17
<PAGE>
NOTE 7 OTHER LONG-TERM LIABILITIES
--------------------------------------------------------------------------------
Other long-term liabilities at December 31 were:
----------------------------------------------------
(In thousands) 1994 1993
----------------------------------------------------
Shutdown and reclamation accrual
(Notes 1 and 6) $11,372 $12,209
Notes Payable (Note 2) 3,000 --
Other 7 107
----------------------------------------------------
Total $14,379 $12,316
====================================================
Shutdown and reclamation accruals represent estimated costs
of earthwork such as recontouring, revegetation, and stabilization.
Also included are heap-leach encapsulation, facility decommissioning,
and human resources costs.
In determining the estimated costs, the company considers such
factors as changes in laws and regulations, the likelihood of additional
permits being required, requirements under existing operating permits,
and estimated operating costs. Such analyses are performed on an
ongoing basis.
Based on the latest cost estimates, in December the company
reversed $2.8 million of previously accrued reclamation expense
for Paradise Peak and $1.2 million for the Austin joint venture.
At December 31, 1994 accrued reclamation costs, including those
identified in Note 6--Accrued and Other Liabilities, associated with
Paradise Peak were $7.2 million, Royal Mountain King $5.8 million,
Austin $0.3 million, and Jerritt Canyon $1.7 million. Reclamation
spending at each of these facilities is expected to continue in 1995
and beyond.
NOTE 8 INCOME TAXES
--------------------------------------------------------------------------------
Effective January 1, 1993, the company adopted Statement of Financial
Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes."
The company has elected not to restate the financial statements
of any prior years. There was no cumulative effect on pre-tax income
and net income for the change in accounting method.
On March 31, 1994, FMC increased its ownership interest in the
company to 80 percent. Due to this increased ownership percentage,
the company will be included in FMC's federal tax return for tax
periods beginning April 1, 1994, under a tax-sharing agreement
whereby the company will pay to FMC amounts generally equal to
the tax the company would have been required to pay had it filed
a separate return.
For state tax purposes, the company will generally continue to be
included in FMC's combined returns. The tax-sharing agreement
for periods beginning after April 1, 1994 provides that the company
will be liable for the incremental impact the company has on FMC's
state tax liability in states where FMC files combined returns.
In addition, in the states where the company files separate state tax
returns, the company will be responsible for the tax due thereunder.
Differences between the recorded state tax provision and that cal-
culated on a separate return basis were immaterial. The company's
management believes that all determinations under the agreements
have been made in a manner that is fair and reasonable in the
circumstances.
The provision (benefit) for income taxes consists of:
---------------------------------------------------------
Year ended December 31
---------------------------------------------------------
(In thousands) 1994 1993 1992
---------------------------------------------------------
Current:
Federal $(2,117) $ 782 $ 4,418
State -- 240 329
----------------------------------------------------------
Total current (2,117) 1,022 4,747
Deferred 2,527 (1,335) (3,022)
----------------------------------------------------------
Total provision (benefit) $ 410 $ (313) $ 1,725
==========================================================
Significant components of the company's deferred tax assets and
liabilities are as follows:
----------------------------------------------------------
Year ended December 31
----------------------------------------------------------
(In thousands) 1994 1993
----------------------------------------------------------
Alternative minimum tax carryforwards $ 12,536 $ 12,183
Reclamation reserves 5,206 6,429
Capitalized exploration costs 4,857 5,203
Property, plant and equipment 3,297 3,446
General reserves 2,332 2,122
Loss carryforwards 1,749 --
Accrued pension and other
postretirement benefits 715 661
Other 429 865
----------------------------------------------------------
Deferred tax assets 31,121 30,909
Valuation allowance (30,810) (27,230)
----------------------------------------------------------
Deferred tax assets, net of allowance $ 311 $ 3,679
==========================================================
Capitalized development costs -- $ (896)
Other (311) (256)
----------------------------------------------------------
Deferred tax liabilities $ (311) $ (1,152)
==========================================================
Net deferred tax assets $ -- $ 2,527
==========================================================
The valuation allowance for deferred tax assets as of December
31, 1993 was $27,230. The net change in the valuation allowance
during 1994 was an increase of $3,580, to take additional
allowance against all remaining net deferred tax assets.
The company has an alternative minimum tax credit carryover of
$12.5 million for income tax purposes. This credit is available to
offset future regular taxes to the extent those taxes exceed the alter-
native minimum tax computed for the respective carryover year.
18
<PAGE>
The effective income tax provision (benefit) differs from that com-
puted by applying the applicable federal statutory rate of 35 percent
for 1994 and 34 percent for 1993 and 1992 to income before taxes
for the following reasons:
----------------------------------------------------------------
Year ended December 31
----------------------------------------------------------------
(In thousands) 1994 1993 1992
----------------------------------------------------------------
Expected tax provision (benefit) $ 197 $(17,536) $ 5,498
Foreign sales corporation
income not subject to
U.S. tax (769) (2,714) (1,650)
Percentage depletion (1,217) (3,674) (4,862)
Imputed interest expense -- 9 279
Alternative minimum tax -- -- 491
Net operating loss carryover (1,796) -- 3,079
Change in valuation reserve 3,580 22,632 --
Loss on foreign subsidiaries 398 787 --
Purchase accounting
differences -- -- (1,334)
State income taxes, less
federal income tax benefit -- 158 79
Other 17 25 145
----------------------------------------------------------------
Actual tax provision (benefit) $ 410 $ (313) $ 1,725
================================================================
The source and tax effect of the deferred income tax benefit for
the year ended December 31, 1992 is as follows (In thousands):
--------------------------------------------------------
Alternative minimum tax $(2,370)
Tax depreciation greater (less)
than book (4,304)
Exploration and
development costs 968
Shutdown and
reclamation costs (2,454)
Net operating loss carryover 5,535
Other timing differences (397)
--------------------------------------------------------
Total deferred income tax (benefit) $(3,022)
========================================================
NOTE 9 EXPORT SALES AND SALES TO MAJOR CUSTOMERS
--------------------------------------------------------------------------------
U.S. export sales to unaffiliated customers by destination of sale are
as follows:
----------------------------------------------------
Year ended December 31
----------------------------------------------------
(In thousands) 1994 1993 1992
----------------------------------------------------
Canada $25,240 $ 20,063 $ 21,563
Western Europe 37,555 98,404 125,367
----------------------------------------------------
Total $62,795 $118,467 $146,930
====================================================
The company's products may be purchased and refined by several
Canadian, European and domestic refiners. Sales to three refiners in
1994, four refiners in 1993, and three refiners in 1992 each repre-
sented 10 percent or more of consolidated sales. Specifically, sales
to these companies amounted to $62.8 million in 1994, $118.5
million in 1993 and $146.9 million in 1992. The company believes
that because there are several alternative refiners, each capable of
refining the company's products, no adverse effect will result should
any of the current refiners discontinue buying the company's products.
NOTE 10 EMPLOYEE PLANS
--------------------------------------------------------------------------------
All company employees are covered by FMC's postretirement health
care and life insurance benefit program. Retroactive to January 1,
1992, the company elected early adoption of Statement of Financial
Accounting Standards (SFAS) No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," which requires accrual
of the expected cost of providing postretirement benefits, other than
pensions, during the years of employee service. Previously, such
costs were generally expensed as paid. The impact of adopting
SFAS No. 106 was immaterial to the company's financial position.
Employees, other than hourly employees at the Royal Mountain
King operating mine, are included in FMC's employee thrift plan and
funded retirement plan. Charges for these benefits were $0.5 million,
$1.1 million and $1.3 million in 1994, 1993 and 1992, respectively,
and are included in the costs paid under the management services
agreement as discussed in Note 12. Hourly employees at Royal
Mountain King participated in a separate thrift and stock purchase
plan which is qualified under Section 401(k) of the Internal Revenue
Code. Charges against income for contributions made to this plan
were negligible in 1994 and $0.1 million in 1993 and 1992 and are
included in the costs paid under the management services agree-
ment discussed in Note 12. As of December, 1994, there are no
employees under this plan due to closure of the RMK mine in July
1994. The company has no pension obligations other than the
payment of charges from FMC under the management services
agreement.
In 1989, the stockholders approved the FMC Gold Company 1988
Long-Term Incentive Compensation Plan, which authorized the Board
of Directors of the company (the Board) to grant awards, payable in
the form of cash and non-qualified stock options, to key employees
of the company if certain specified performance objectives were met
over a four-year period ended December 31, 1991. The Board estab-
lished as a base performance objective the discovery of a certain
quantity of profitable gold reserves.
During the first quarter of 1992, a cash payment of $0.8 million
was made to plan participants related to awards granted in 1988.
The stock options granted in 1988 bear an exercise price ranging
from $9.625 to $11.25, the fair market value at the date of grant, and
expire May 6, 1998. During 1992, additional options for 223,000
shares of common stock were granted at an exercise price of $4.25
and with an expiration date of April 2007.
NOTE 11 COMMITMENTS AND CONTINGENT LIABILITIES
--------------------------------------------------------------------------------
On May 4, 1994, the company announced plans to invest $57 million
to develop the Beartrack property located near Salmon, Idaho. The
decision to proceed with the development was based largely on
improved project economics and issuance of a biological opinion by
the National Marine Fisheries Service ("NMFS") that the proposed
Beartrack mine was "not likely to jeopardize" the continued exis-
tence of the endangered salmon. The company has submitted
19
<PAGE>
a request to the Army Corps of Engineers ("ACOE") for renewal
of one of the permits necessary to complete construction of the
Beartrack mine. ACOE is studying that request at this time, and the
company is participating actively in ACOE's review.
On October 21, 1994, the Sierra Club Legal Defense Fund, Inc.,
on behalf of certain other organizations, sued NMFS and other
federal agencies for violation of the Endangered Species Act alleg-
ing that NMFS' biological opinion failed to satisfy the requirements
of the Act.
During the third quarter of 1994, the Pacific Rivers Council
and the Wilderness Society (the "PRC"), represented by Sierra
and others, in a lawsuit filed in Federal District Court in Idaho
(Pacific Rivers Council v. Thomas), sought an injunction against all
ongoing and future forest activities which may affect endangered
salmon, including mining, within various national forests in Idaho
including the Salmon National Forest in which the Beartrack property
is located. In that lawsuit, the PRC sought to require the U.S. Forest
Service to consult under the Act with the NMFS regarding existing
land resource management plans for the subject forests and their
potential impacts on endangered salmon.
The company, along with other mining and timber companies,
has been been granted limited leave to intervene in both lawsuits
and filed a memorandum in opposition to the PRC's motion for an
injunction at least as it might apply to the Beartrack property based
on, inter alia, the fact that the company had already obtained the
requisite biological opinion by NMFS and the fact that the Beartrack
property is at least 6.5 miles from the closest habitat for salmon.
On January 12, 1995, the court in the PRC lawsuit entered an
order enjoining, among other things, all ongoing and announced
mining activities in the Idaho national forests (in which the Beartrack
project is located) subject to a determination by the court as to
whether an activity may proceed under Sections 7(a)(ii) and 7(d) of
the Act. The company and the government have filed appeals from
the court's order. On January 25, 1995, the court entered an order
staying until March 16, 1995, the effectiveness of the injunction
in order to give the Forest Service time in which to complete
consultation with NMFS on the Land and Resource Management
Plans for the national forests in Idaho and on March 8, 1995, the
court entered an order dissolving the injunction in recognition of the
completion of that consultation. The company believes that entry of
that order is likely to end its involvement in that lawsuit.
The company believes that (i) the biological opinion was carefully
considered and fully supported by the record and (ii) that it will be
permitted to continue its planned activity at the Beartrack site.
However, a different conclusion in the earlier lawsuit could result
in suspension of further development and/or operation of the
Beartrack property.
The Beartrack property encompasses approximately 30 square
miles of mining claims and contains approximately one million
ounces of proven and probable reserves. Capital spent as of the
end of 1994 totals $48 million of an expected $57 million for
this development.
During the second quarter of 1994, the company purchased put
options and entered into certain forward contracts in connection
with gold production from the Beartrack property. The forward contracts
are for 23,800 ounces of gold, deliverable between April 1995 and
April 1996. The options were purchased for $4 million and provide
the company the right to sell gold at an agreed-upon price. The market
value of the options as of December 31, 1994 was approximately
$1.1 million. The options are recorded in other assets and will
be amortized in accordance with production. The options carry
a strike price of $400 per ounce and expire according to the
following schedule:
Options Expiration
(ounces) Date
---------------------------------
27,000 12/27/95
43,000 12/27/96
33,000 12/27/97
33,000 12/27/98
32,000 12/27/99
32,000 12/27/00
27,000 12/27/01
The company's mining operations and exploration activities are
subject to various federal, state and local laws, and regulations
governing protection of the environment. These laws are continually
changing and, as a general matter, are becoming more restrictive.
The company's policy is to conduct its business in a manner that
safeguards public health and the environment. The company believes
that its operations are in compliance with all applicable laws and
regulations, and has no reason to believe that compliance problems
exist at operations in which it holds a joint-venture interest. To
comply with these federal, state and local laws, the company has
made and in the future will be required to make capital and operating
expenditures on environmental projects. However, the company
currently has no environmental projects under development that
will require substantial and extraordinary expenditures. Expenditures
for environmental projects were not substantial in 1994, nor are they
expected to be substantial in 1995.
The company leases office space and various types of equipment.
Total rent expense under all leases amounted to $0.5 million, $0.6
million and $0.8 million for 1994, 1993 and 1992, respectively. Mini-
mum future rentals under noncancellable leases aggregated approxi-
mately $1.2 million as of December 31, 1994, and are estimated to
be payable $0.5 million in 1995 and $0.4 million in 1996 and $0.3
million in 1997.
The company has certain contingent liabilities resulting from liti-
gation, claims and commitments incident to the ordinary course of
business. Management believes that the probable resolution of such
contingencies will not materially affect the financial position or results
of operations of the company.
20
<PAGE>
NOTE 12 RELATED PARTY TRANSACTIONS
-------------------------------------------------------------------------------
At December 31, 1994, 80 percent of the outstanding common stock
of the company was held by FMC.
Certain agreements exist between the company and FMC
concerning income taxes (Note 8) and management services.
Under the management services agreement, the company will be
charged at FMC's direct and indirect cost, including allocated over-
head, for certain general, administrative and other services provided
by FMC. Overhead allocations of $1.6 million, $2.6 million and
$3.1 million in 1994, 1993 and 1992, respectively, are based generally
on the level of company sales to aggregate FMC sales. The company's
management believes that all determinations with respect to direct
and indirect costs, including allocated overhead, have been made
in a manner which is fair and reasonable under the circumstances.
In addition, the agreement states that either the company or FMC
may borrow up to $50 million from the other on a short-term demand
basis. Borrowings exceeding $50 million are made upon the review
and approval of the lending company. All such borrowings are
payable on a demand basis and bear interest at a floating rate equal
to FMC's current weighted average rate on its borrowings under its
credit facilities, or its investing rate, for the relevant period. The
company's management believes that any demand for repayment of
borrowings by FMC under the management services agreement is
legally enforceable. During 1994, FMC decreased total borrowings
from the company by $47.0 million, ending the year with a balance
of $120.3 million (consisting of four notes with varying maturities),
and paid $8.7 million in interest at an average rate of 6.0 percent.
During the year, the highest outstanding balance owed was $171.0
million. The company believes it has received an equal or better yield
on its loans to FMC than it could have received from comparable
investments and plans to continue this cash management arrange-
ment in the future. The company is an unsecured creditor of FMC, and
as such it receives the same treatment as any other FMC unsecured
creditor. At year-end, FMC's cash on hand and available credit lines
were more than adequate to allow repayment of these loans.
FMC is obligated under a $75 million issue of exchangeable
senior subordinated debentures in Europe. The debentures bear
interest at 6-3/4 percent and are exchangeable at $15-1/8 per share,
subject to change as defined in the offering circular, into common
stock of the company currently held by FMC. If exchanged at $15-1/8,
non-FMC ownership of the company would increase to 28 percent.
The following schedule recaps the activity of indebtedness to and
from FMC in 1994, 1993 and 1992.
--------------------------------------------------------
Loan due Amounts due
(In thousands) from FMC from (to) FMC
--------------------------------------------------------
Balance December 31, 1991 $127,000 $(1,492)
Increase in amounts loaned 95,500
Interest charges 5,962
Payments made by FMC for
FMC Gold (6,282)
Charges from FMC for services
and materials (5,739)
Payments made 12,143
Payments received (67,674) (5,974)
--------------------------------------------------------
Balance December 31, 1992 154,826 (1,382)
Increase in amounts loaned 94,500
Interest charges 8,297
Payments made by FMC for
FMC Gold (11,543)
Charges from FMC for services
and materials (5,492)
Payments made 16,816
Payments received (82,000) (7,765)
--------------------------------------------------------
Balance December 31, 1993 167,326 (1,069)
Increase in amounts loaned 50,000
Interest charges 8,677
Payments made by FMC for
FMC Gold (11,888)
Charges from FMC for services
and materials (4,468)
Payments made 16,793
Payments received (97,000) (8,639)
--------------------------------------------------------
Balance December 31, 1994 $120,326 $ (594)
========================================================
The company purchases liquid sodium cyanide from the Alkali
Chemicals Division of FMC. Such purchases amounted to $1.9
million, $2.0 million and $1.0 million in 1994, 1993 and 1992,
respectively. Contracts are in effect to purchase sodium cyanide
through 1995. The purchases from FMC were transacted on terms
no less favorable to the company than those which the company
believes could have been obtained from an unaffiliated third party.
FMC, as controlling stockholder, will be able to control all deci-
sions with respect to the use of cash generated by the company,
including dividend policy. Any determination as to the use of cash
generated by the company may be affected by factors related to
FMC's cash requirements, which may differ from those of other
stockholders of the company and may conflict with the use that
the company would otherwise make of its cash, such as for new
exploration or the funding of development activity. No such conflict
is presently anticipated.
FMC has engaged in hedging transactions with respect to its
portion of production of precious metals. FMC may engage in such
transactions in the future for its own account as a means of
offsetting the decline in the company's income that could result
if gold or silver prices should decrease.
21
<PAGE>
INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------
[LOGO OF KPMG PEAT MARWICK LLP]
The Board of Directors and Stockholders,
FMC Gold Company:
We have audited the consolidated balance sheets of FMC Gold
Company and consolidated subsidiaries as of December 31, 1994
and 1993, and the related consolidated statements of income, cash
flows and changes in stockholders' equity for each of the years in
the three-year period ended December 31, 1994. These consolidated
financial statements are the responsibility of the company's man-
agement. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and per-
form 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. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reason-
able basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
FMC Gold Company and consolidated subsidiaries at December 31,
1994 and 1993, and the results of their operations and their cash
flows for each of the years in the three-year period ended December
31, 1994 in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Salt Lake City, Utah
January 20, 1995
MANAGEMENT REPORT ON FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
The consolidated financial statements and related information were
prepared by management, which is responsible for the integrity and
objectivity of that information. The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contin-
gent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
FMC Gold maintains a system of internal control over financial
reporting and over safeguarding of assets against unauthorized
acquisition, use or disposition which is designed to provide reason-
able assurance as to the reliability of financial records and the
safeguarding of such assets. The system is maintained by the
selection and training of qualified personnel, by establishing and
communicating sound accounting and business policies, and by an
internal auditing program which constantly evaluates the adequacy
and effectiveness of such internal controls, policies and procedures.
The Audit Committee of the Board of Directors, composed of out-
side directors of the company, inquires into the company's financial
and accounting organization, accounting controls and the quality of
financial reporting. The independent auditors and the internal auditors
have free access to the Audit Committee to discuss their audits.
/s/ Steven E. Baginski
Steven E. Baginski
Vice President--Finance
Reno, Nevada
January 20, 1995
<PAGE>
<TABLE>
<CAPTION>
FIVE-YEAR FINANCIAL SUMMARY
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
(In millions, except per share,
employee and stockholder data) 1994 1993 1992 1991 1990
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Summary of earnings
Sales $ 63.4 118.9 150.0 139.4 153.0
---------------------------------------------------------------------------------------------
Cost of sales 53.8 96.8 120.0 117.9 88.8
Exploration costs 11.2 14.4 12.2 12.6 14.7
Selling, general and administrative expenses 6.5 7.0 7.6 7.5 8.5
Write-downs and other charges -- 60.6 -- -- --
---------------------------------------------------------------------------------------------
Total costs and expenses 71.5 178.8 139.8 138.0 112.0
---------------------------------------------------------------------------------------------
Earnings (loss) before interest and taxes (8.1) (59.9) 10.2 1.4 41.0
---------------------------------------------------------------------------------------------
Interest income 8.7 8.3 6.0 7.8 8.0
---------------------------------------------------------------------------------------------
Income (loss) before income taxes 0.6 (51.6) 16.2 9.2 49.0
Provision (benefit) for income taxes 0.4 (0.3) 1.8 2.2 9.6
---------------------------------------------------------------------------------------------
Net income (loss) $ 0.2 (51.3) 14.4 7.0 39.4
=============================================================================================
Share data
Average number of common shares used in
earnings per share computations 73.5 73.5 73.5 73.5 70.5
Earnings (loss) per common share $ -- (0.70) 0.20 0.10 0.56
---------------------------------------------------------------------------------------------
Financial position at December 31
Property, plant and equipment, at cost $298.9 246.1 282.5 265.7 242.7
Accumulated depreciation and amortization $197.7 185.5 161.6 132.7 102.3
Total assets $235.1 238.6 291.9 275.2 267.8
Stockholders' equity $196.1 199.6 254.6 243.8 240.5
---------------------------------------------------------------------------------------------
Other data
Capital expenditures $ 56.2 18.5 19.0 19.4 18.8
Provision for depreciation and amortization $ 15.3 25.8 30.7 31.5 23.0
Total dividends $ 3.7 3.7 3.7 3.7 3.7
Employees at year-end 185 238 442 473 500
Stockholders of record at year-end 847 940 960 990 825
=============================================================================================
</TABLE>
23
<PAGE>
DIRECTORS AND OFFICERS
--------------------------------------------------------------------------------
BOARD OF DIRECTORS
Larry D. Brady
Chairman of the Board and
Chief Executive Officer; also President
FMC Corporation
Robert N. Burt
Chairman of the Board
and Chief Executive Officer
FMC Corporation
Paul L. Davies, Jr. (1)
President
Lakeside Corporation
Nha D. Hoang
Vice President-International
Brian J. Kennedy
President and Chief Operating Officer
Edmund W. Littlefield (1)
Retired Chairman of
Utah International, Inc.
(1) Audit and Compensation Committees
--------------------------------------------------------------------------------
OFFICERS
Larry D. Brady
Chairman of the Board and
Chief Executive Officer
Brian J. Kennedy
President and Chief Operating Officer
Steven E. Baginski
Vice President-Finance,
Treasurer and Assistant Secretary
Donald L. Beckwith
Vice President-Operations
Robert L. Day
Secretary and General Counsel
Nha D. Hoang
Vice President-International
24
<PAGE>
FMC GOLD COMPANY
ANNUAL REPORT ON
FORM 10-K FOR 1994
EXHIBIT 21
<TABLE>
<CAPTION>
LIST OF SIGNIFICANT SUBSIDIARIES OF REGISTRANT
----------------------------------------------
PERCENT OF
ORGANIZED VOTING
UNDER SECURITIES
COMPANY LAWS OF OWNED
---------------------------------- --------- ----------
<S> <C> <C>
FMC GOLD COMPANY.................. DELAWARE REGISTRANT
FMC JERRITT CANYON CORPORATION.. DELAWARE 100
FMC MINERALS CORPORATION........ DELAWARE 100
FMC PARADISE PEAK CORPORATION... NEVADA 100
MERIDIAN GOLD COMPANY........... MONTANA 100
MINERA FMC S.A. DE C.V.......... MEXICO 100
MINERA FMC LIMITADA............. CHILE 100
</TABLE>
<PAGE>
[LOGO OF PEAT MARWICK]
EXHIBIT 23
The Board of Directors
FMC Gold Company:
We consent to incorporation by reference in Registration Statement No. 33-35804
and Registration Statement No. 33-35805 on Forms S-3 of FMC Gold Company and
consolidated subsidiaries of our report dated January 23, 1995, relating to the
consolidated balance sheets of FMC Gold Company and consolidated subsidiaries as
of December 31, 1994 and 1993, and the related consolidated statements of
income, cash flows, and changes in stockholders' equity for each of the years in
the three-year period ended December 31, 1994, which report is incorporated by
reference in the December 31, 1994 annual report on Form 10-K of FMC Gold
Company and consolidated subsidiaries.
KPMG Peat Marwick LLP
Salt Lake City, Utah
March 27, 1995
<PAGE>
FMC GOLD COPMANY
200 East Randolph Drive EXHIBIT 24
Chicago Illinois 60601
312 861 6000
[LOGO OF FMC GOLD COMPANY]
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC GOLD COMPANY, a Delaware corporation (hereinafter
referred to as the "Company"), is a corporation with securities registered
pursuant to Section 12(b) of the Securities and Exchange Act of 1934, as
Amended (the "Act"), and is subject to the reporting requirements of the Act
including the obligation to file an annual report on Form 10-K; and
WHEREAS, the undersigned holds and may hereafter from time to time
hold one or more positions in the Corporation whether as an Officer, a Director,
or both, such that the undersigned may be required or permitted in such capacity
or capacities, or on behalf of the Corporation, to sign such document;
NOW, THEREFORE, the undersigned hereby constitutes and appoints B.J.
Kennedy, S.E. Baginski or R.L. Day, or any of them, his attorney for him and in
his name, place and stead, and in his office and capacity in the Company, to
sign and file the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, including all schedules, exhibits and amendments thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
9th day of February, 1995.
/s/ LARRY D. BRADY
_________________________
<PAGE>
FMC GOLD COPMANY
200 East Randolph Drive
Chicago Illinois 60601
312 861 6000
[LOGO OF FMC GOLD COMPANY]
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC GOLD COMPANY, a Delaware corporation (hereinafter
referred to as the "Company"), is a corporation with securities registered
pursuant to Section 12(b) of the Securities and Exchange Act of 1934, as
Amended (the "Act"), and is subject to the reporting requirements of the Act
including the obligation to file an annual report on Form 10-K; and
WHEREAS, the undersigned holds and may hereafter from time to time
hold one or more positions in the Corporation whether as an Officer, a Director,
or both, such that the undersigned may be required or permitted in such capacity
or capacities, or on behalf of the Corporation, to sign such document;
NOW, THEREFORE, the undersigned hereby constitutes and appoints B.J.
Kennedy, S.E. Baginski or R.L. Day, or any of them, his attorney for him and in
his name, place and stead, and in his office and capacity in the Company, to
sign and file the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, including all schedules, exhibits and amendments thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
9th day of February, 1995.
/s/ ROBERT N. BURT
_________________________
<PAGE>
FMC GOLD COPMANY
200 East Randolph Drive
Chicago Illinois 60601
312 861 6000
[LOGO OF FMC GOLD COMPANY]
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC GOLD COMPANY, a Delaware corporation (hereinafter
referred to as the "Company"), is a corporation with securities registered
pursuant to Section 12(b) of the Securities and Exchange Act of 1934, as
Amended (the "Act"), and is subject to the reporting requirements of the Act
including the obligation to file an annual report on Form 10-K; and
WHEREAS, the undersigned holds and may hereafter from time to time
hold one or more positions in the Corporation whether as an Officer, a Director,
or both, such that the undersigned may be required or permitted in such capacity
or capacities, or on behalf of the Corporation, to sign such document;
NOW, THEREFORE, the undersigned hereby constitutes and appoints B.J.
Kennedy, S.E. Baginski or R.L. Day, or any of them, his attorney for him and in
his name, place and stead, and in his office and capacity in the Company, to
sign and file the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, including all schedules, exhibits and amendments thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
9th day of February, 1995.
/s/ PAUL L. DAVIS, JR.
_________________________
<PAGE>
FMC GOLD COPMANY
200 East Randolph Drive
Chicago Illinois 60601
312 861 6000
[LOGO OF FMC GOLD COMPANY]
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC GOLD COMPANY, a Delaware corporation (hereinafter
referred to as the "Company"), is a corporation with securities registered
pursuant to Section 12(b) of the Securities and Exchange Act of 1934, as
Amended (the "Act"), and is subject to the reporting requirements of the Act
including the obligation to file an annual report on Form 10-K; and
WHEREAS, the undersigned holds and may hereafter from time to time
hold one or more positions in the Corporation whether as an Officer, a Director,
or both, such that the undersigned may be required or permitted in such capacity
or capacities, or on behalf of the Corporation, to sign such document;
NOW, THEREFORE, the undersigned hereby constitutes and appoints B.J.
Kennedy, S.E. Baginski or R.L. Day, or any of them, his attorney for him and in
his name, place and stead, and in his office and capacity in the Company, to
sign and file the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, including all schedules, exhibits and amendments thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
9th day of February, 1995.
/s/ NHA D. HOANG
_________________________
<PAGE>
FMC GOLD COPMANY
200 East Randolph Drive
Chicago Illinois 60601
312 861 6000
[LOGO OF FMC GOLD COMPANY]
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC GOLD COMPANY, a Delaware corporation (hereinafter
referred to as the "Company"), is a corporation with securities registered
pursuant to Section 12(b) of the Securities and Exchange Act of 1934, as
Amended (the "Act"), and is subject to the reporting requirements of the Act
including the obligation to file an annual report on Form 10-K; and
WHEREAS, the undersigned holds and may hereafter from time to time
hold one or more positions in the Corporation whether as an Officer, a Director,
or both, such that the undersigned may be required or permitted in such capacity
or capacities, or on behalf of the Corporation, to sign such document;
NOW, THEREFORE, the undersigned hereby constitutes and appoints B.J.
Kennedy, S.E. Baginski or R.L. Day, or any of them, his attorney for him and in
his name, place and stead, and in his office and capacity in the Company, to
sign and file the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, including all schedules, exhibits and amendments thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
9th day of February, 1995.
/s/ BRIAN J. KENNEDY
_________________________
<PAGE>
FMC GOLD COPMANY
200 East Randolph Drive
Chicago Illinois 60601
312 861 6000
[LOGO OF FMC GOLD COMPANY]
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, FMC GOLD COMPANY, a Delaware corporation (hereinafter
referred to as the "Company"), is a corporation with securities registered
pursuant to Section 12(b) of the Securities and Exchange Act of 1934, as
Amended (the "Act"), and is subject to the reporting requirements of the Act
including the obligation to file an annual report on Form 10-K; and
WHEREAS, the undersigned holds and may hereafter from time to time
hold one or more positions in the Corporation whether as an Officer, a Director,
or both, such that the undersigned may be required or permitted in such capacity
or capacities, or on behalf of the Corporation, to sign such document;
NOW, THEREFORE, the undersigned hereby constitutes and appoints B.J.
Kennedy, S.E. Baginski or R.L. Day, or any of them, his attorney for him and in
his name, place and stead, and in his office and capacity in the Company, to
sign and file the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, including all schedules, exhibits and amendments thereto,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
9th day of February, 1995.
/s/ EDMUND W. LITTLEFIELD
_________________________
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FMC GOLD COMPANY FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1994 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 120,326<F1>
<SECURITIES> 0
<RECEIVABLES> 1,796
<ALLOWANCES> 300
<INVENTORY> 5,621
<CURRENT-ASSETS> 129,001
<PP&E> 298,919
<DEPRECIATION> 197,652
<TOTAL-ASSETS> 235,089
<CURRENT-LIABILITIES> 24,588
<BONDS> 0
<COMMON> 735
0
0
<OTHER-SE> 195,387
<TOTAL-LIABILITY-AND-EQUITY> 235,089
<SALES> 63,369
<TOTAL-REVENUES> 63,369
<CGS> 53,821
<TOTAL-COSTS> 53,821
<OTHER-EXPENSES> 11,153
<LOSS-PROVISION> 300
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 561
<INCOME-TAX> 410
<INCOME-CONTINUING> 151
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 151
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
<FN>
<F1> Cash and cash items consists of cash and loans due from FMC Corporation of
$120 million.
</FN>
</TABLE>
