<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
[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, 1995
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, RENO, NEVADA 89502
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (702) 827-3777
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
<S> <C>
Common Stock, $0.01 par value New York Stock Exchange
</TABLE>
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, 1996, was $80,765,272. 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
<TABLE>
<S> <C>
Portions of Proxy Statement for 1996 Annual Meeting of
Shareholders Part III
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
FMC GOLD COMPANY
INDEX
<TABLE>
<CAPTION>
PAGE
----
PART I
<C> <S> <C>
Items 1
and 2. Business and Properties........................................ 3
Exploration.................................................... 3
FMC Gold Ore Reserves (Proven and Probable).................... 6
Operations..................................................... 6
Employees...................................................... 7
1995 Developments.............................................. 7
Item 3. Legal Proceedings.............................................. 9
Item 4. Submission of Matters to a Vote of Security Holders............ 10
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters........................................... 10
Item 6. Selected Financial Data........................................ 11
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations......................................... 11
Item 8. Financial Statements and Supplementary Data.................... 14
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.......................................... 31
PART III
Item 10. Directors and Executive Officers of the Registrant............. 32
Item 11. Executive Compensation......................................... 32
Item 12. Security Ownership of the Company.............................. 32
Item 13. Certain Relationships and Related Transactions................. 32
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-
K............................................................. 32
</TABLE>
2
<PAGE>
PART I
ITEMS 1 AND 2 BUSINESS AND PROPERTIES
FMC Gold Company ("FMC Gold" or "the company") is a precious metals mining
and exploration company, with 1995 production of 151,000 ounces of gold and
27,000 ounces of silver. FMC Gold has proven and probable reserves of 1.4
million ounces of gold and 0.1 million ounces of gold under leach at its
Beartrack mine.
FMC Gold was formed in 1987 through a combination of FMC Corporation's North
American Precious Metals interests. In June 1987, FMC Gold issued 7.5 million
shares to the public. In May 1990, FMC Gold issued 8.0 million shares to
acquire Meridian Gold Company. FMC Corporation ("FMC") currently holds the
remaining 58.8 million shares (80 percent).
FMC Gold has two producing properties: Beartrack (100 percent ownership)
near Salmon, Idaho, which began full-scale production in July 1995, and
Jerritt Canyon (30 percent ownership) located near Elko, Nevada, which has
been actively producing since 1981. In addition, FMC Gold pursues an active
exploration program in Chile and at the Rossi project in Nevada.
EXPLORATION
Total exploration spending in 1995 was $11.0 million. Of this amount, the
company spent $6.9 million in Chile for prospect drilling and reconnaissance
work, and $4.1 million in the United States, primarily at the Rossi project
and in seeking extensions around the Beartrack and Jerritt Canyon properties.
Chile
In Chile, the company's wholly-owned subsidiary, Minera FMC Limitada
("Minera FMC") has identified significant gold and silver mineralization at
the El Penon project. Early estimates based on an internal geologic model
indicate a potentially economic gold and silver discovery. However, additional
exploration and evaluation will be carried out to determine if an economic
opportunity can be developed, and there can be no assurance that the
mineralization can be developed into an economic reserve.
The mineralized structure discovered to date is still open along strike and
at depth. The exposed strike length of the El Penon structure system is
approximately 2.2 miles and the structure continues under shallow cover.
Geophysical evidence exists for parallel structures in unexplored areas of the
project. In 1996, Minera FMC expects to spend approximately $5 million on
exploration drilling and $3 million of capital on construction of a decline to
investigate the major portions of the underground mineralized resource.
The El Penon exploration property is located in an area of low, rolling
hills in Region II of northern Chile, approximately 100 miles southeast of
Antofagasta. Access is by a 25-mile-long gravel road that connects the
property with the Pan-American Highway. The property is comprised of
approximately 230 square miles of contiguous mineral concessions situated in
the Atacama Desert at an elevation of 5,900 feet. The El Penon project is
situated on land either owned by Minera FMC outright or leased from a private
Chilean company. In each case, to protect its interest, Minera FMC has filed
two layers of concessions overlying the base ownership concession. Minera FMC
has entered into option contracts to purchase the concessions owned by the
private Chilean company. In addition, Minera FMC has granted a net smelter
royalty to the private Chilean company on production from the leased property.
The royalty is on a sliding scale, depending on the price of gold, ranging
from 1 percent to 3 percent. No royalty is payable on Minera FMC claimed land.
Currently, the majority of the known mineralization is located on land where
the mineral rights are owned by Minera FMC outright.
The main geologic feature of interest on the property is a 2.2-mile-long,
north-south trending, near vertical fault, hydrothermal vent, and vein
structure that penetrated Tertiary-age volcanic intrusives, lava flows and
ignimbrites. The system is exposed at the surface, and extends further under
shallow cover. The adularia-sericite alteration is typical of vein- and lode-
type gold deposits where gold is carried in solutions and emplaced in
structurally prepared ground near and in the structure system. At least three
mineralizing episodes are recognized. There is potential for other, parallel
structures on the property, as indicated by geologic mapping and geophysical
surveys.
3
<PAGE>
Surface evaluations began at the project in August 1993, and drilling of 13
holes commenced later that year. A second round of 24 holes began in March
1994, and led to commencement of a third program of 75 holes in September
1994, and a fourth campaign of 76 holes in June 1995. A fifth program,
consisting of 122 holes, was completed in October 1995. In total, 310 holes
have been drilled in five phases. During these drilling campaigns, the company
spent over $7 million and considers the El Penon project as an advanced-stage
exploration project.
To date, exploration, including geochemical and geophysical surveys,
geologic mapping, trenching and drilling, has identified 13 target areas
exhibiting gold mineralization or geophysical anomalies. In five areas, known
as Quebrada Orito, Cerro Martillo, Discovery Wash, El Valle, and Tres Tontos,
significant intercepts of gold have been encountered in drilling. The company
defines a significant intercept to be one where gold mineralization of .20
ounces of gold per ton over a contiguous intercept of 13 feet is encountered.
At Quebrada Orito, the most heavily drilled of 13 specific targets defined
to date, the core zone resource estimate extends over approximately 5,000 feet
of strike, and is still open along strike and down dip or at depth. Minera FMC
has drilled 167 individual exploration holes in this target, of which 62 holes
have intercepted significant mineralization which begins at the surface and
ranges to depths of approximately 825 feet below surface. Significant
mineralization has been encountered over true widths of approximately 15 feet
to 90 feet, a vertical extent of approximately 900 feet and a strike length of
5,000 feet. The mineralization is open in all directions. Preliminary
metallurgical testing shows that the gold and silver mineralization in the
Quebrada Orito deposit is well oxidized. Initial test results are over 90
percent recovery of gold and over 80 percent recovery of silver achieved under
direct cyanidation with grinds of minus 100 mesh. In laboratory tests, the
samples leached rapidly and cyanide consumption was moderate. Preliminary
drilling in other areas shows similar characteristics to Quebrada Orito,
although only a small percentage of the property has been explored.
Minera FMC has acquired an option to purchase water within six miles of the
property boundary. Under terms of the agreement, Minera FMC may purchase 150
gallons per minute from an existing well, together with surface rights. The
water may be used for both exploration and development. The agreement also
grants to Minera FMC the right to purchase additional approved water rights.
In addition, Minera FMC has been granted approximately 536 square miles of
additional area to perfect new water rights. Minera FMC believes these water
rights would be able to provide sufficient supply for initial mine development
and future growth.
In addition to the exploration efforts around the El Penon project, the
company conducted reconnaissance in other regions of Chile. These efforts were
a continuation of activities initiated in 1994, using the El Penon discovery
as a model. The work was primarily focused within the Paleocene volcanic belt
between Ovalle on the south and the Bolivian/Peruvian border on the north.
Exploration was of a grassroots nature utilizing published literature,
available geologic mapping, known occurrences, and landsat imagery as a basis
for targeting. Several areas of high interest were identified and acquired
with one, Los Colores, being drill tested. Additional exploration is planned
in 1996.
Rossi
The Rossi property is located in the northern portion of the Carlin Trend,
the most prolific gold-producing district in the United States. The Rossi
property was initially joint ventured by FMC Gold from NL Baroid in 1986 with
disseminated shallow oxide gold mineralization the target of exploration.
However, deep sulfide gold mineralization was discovered on the property in
1991 and has been the focus of the company's exploration program ever since.
FMC Gold has spent more than $15 million in exploration and buying 100 percent
of the project from NL Baroid, without royalties.
The Rossi property is geographically situated between the Antelope and
Boulder Creek drainages in the low rolling hills of the Sheep Creek Range, 26
miles northwest of Carlin, Nevada. Access to the property is via all-season
gravel roads either through Boulder Valley or the Newmont Gold Company/Barrick
Gold Company owned mining areas. The property is immediately adjacent to the
currently operating Dee Gold Mine (Rayrock Yellowknife Resources, Inc.) and
approximately 3.5 and 5 miles northwest of the Meikle (Barrick Gold
4
<PAGE>
Company) and Post/Betze (Barrick Gold Company/Newmont Gold Company) deposits,
respectively. The land position encompasses 11.5 square miles of federally
owned ground, primarily secured by unpatented claims. FMC Gold controls 100
percent of the precious metal-bearing ores.
Gold mineralization on the Rossi property is primarily hosted in the Devonian
Popovich Formation, which is also the host at the Meikle, Post/Betze, Gold
Quarry, Deep Star, Dee, and Bootstrap deposits. Although mineralization on the
company's property is in the same formation as several other commercially
viable deposits, there is no assurance at this stage that the Rossi property
will develop into an economic reserve. The formation consists of limestone and
limey mudstone with horizons of fossil hash which seem especially susceptible
to mineralization. The Popovich also displays sedimentary features such as
karsting and collapse brecciation. Mineralization and alteration consists of
intense silicification, quartz veining, argillization, and decalcification.
Gold is related to arsenian pyrite and silica accompanied by anomalous silver,
antimony, and mercury. The spatial distribution of gold is controlled by a
complex relationship between the intersection of possible wrench fault-related
structures and the presence of permissive host rocks. As is the case in most of
the deposits in the northern portion of the Carlin Trend, intrusive filled
structures are important keys to mineralization at Rossi. Modeling of the
mineralization has been accomplished by detailed surface mapping of the
structure and lithologic and geochemical analysis of cuttings from many core
and reverse circulation holes. A total of 103 holes have been drilled to an
average depth of 1,600 feet to test the deep mineralization. The best hole, to
date, intersected 64 feet of 0.94 gold ounces per ton. The deepest hole on the
property encountered low grade gold mineralization in the Roberts Mountains
Formation at a depth of 3,750 feet.
Much of the deep exploration activity has been conducted in a region on the
property which is located in the southern portion of the claimblock. Twenty-
four holes in the target area have returned 47 intercepts, each with gold
grades in excess of 0.2 ounces per ton over a minimum of 6 feet. Average gold
grade in these intercepts is 0.47 ounces per ton. Within the target area, gold
mineralization has been identified at depths between approximately 700 feet and
more than 2,700 feet below the surface.
There are at least five other areas of interest on the property; however, to
date, most of the work in these areas has been detailed surface mapping,
trenching, and surface geochemical surveys. Limited drilling indicates the
presence of sulfide mineralization similar to the main target area.
Additional exploration and evaluation will be carried out to determine if an
economic opportunity can be developed, and there can be no assurance that the
mineralization can be developed into an economic reserve. If developed, it is
expected that development will be through underground mining methods, the cost
of which could be substantial. It is possible that the company could seek to
enter into a joint venture as a means of financing development costs.
Beartrack and Jerritt Canyon
In 1995, the company also spent $0.7 million seeking ore extensions around
the Beartrack and Jerritt Canyon properties.
5
<PAGE>
FMC GOLD ORE RESERVES (PROVEN AND PROBABLE)(1)
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------------- -----------------------
GRADE OUNCES(3) GRADE OUNCES(3)
TONS(2) (OPT) (CONT) TONS(2) (OPT) (CONT)
(IN THOUSANDS, EXCEPT GRADES) ------- ----- --------- ------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Gold
Jerritt Canyon (30%)
Millable.................... 3,402 0.188 638 4,744 0.167 793
Beartrack(4) Heap leach...... 22,792 0.034 784 27,572 0.035 976
------ ----- ----- ------ ----- -----
Total...................... 26,194 n/a 1,422 32,316 n/a 1,769
</TABLE>
- --------
(1) Reserve estimates for December 31, 1995 and 1994 were based on assumed
prices of $400 and $375 per ounce of 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%; Beartrack heap-leach ore--90% of
cyanide soluble gold mineralization. These estimated recoveries have not
been reflected in the reserve table above.
(4) Mining at Beartrack commenced in November 1994. At December 31, 1995, the
mine had approximately 4.7 million tons of ore containing nearly 113,000
ounces of gold under leach.
OPERATIONS
Beartrack
The Beartrack mine, located near Salmon, Idaho, began full-scale production
in July 1995.
The company began development of the project in the second quarter of 1994,
investing $48 million before year end. Construction was completed in the second
quarter of 1995, with the first gold poured in August 1995.
The mine is a heap leach operation containing approximately 800,000 ounces of
proven and probable gold reserves. Eighty-five percent of the mineable ore
reserves are on patented land.
In 1995, production was 49,000 ounces. The mine moved 8 million tons of
material at an average ore grade of 0.034 ounces per ton. The average cash cost
of production was $166 per ounce.
Jerritt Canyon
The Jerritt Canyon mine, located 57 miles northwest of Elko, Nevada, is 30
percent owned by FMC Gold. FMC Gold's 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 within 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 1995, FMC Gold's 30 percent share of gold production was 98,000 ounces,
unchanged from 1994, as improved ore grades offset lower throughput and
recoveries. The mine moved 23 million tons of material in 1995. Mill through-
put was 8,071 tons per day. The average grade of ore milled was 0.129 ounces
per ton, while the average recovery was 86 percent. The average cash cost of
production decreased 12 percent from 1994 to $250 per ounce, reflecting a
combination of lower mining and milling costs per ton.
At year-end 1995, FMC Gold's share of reserves was approximately 0.6 million
ounces. Approximately 63 percent of the current reserve is contained in
underground ore bodies, with more than 40 percent of the total in the New Deep
ore body discovered in 1990.
6
<PAGE>
FMC Gold's share of exploration costs on the claim block was $0.6 million in
1995.
Paradise Peak
The wholly owned Paradise Peak mine, located 140 miles southeast of Reno,
Nevada, discontinued operation of its 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 was able to recover residual ounces from the
low-grade heap-leach operations.
The company's 100% interest in FMC Paradise Peak Corporation was sold to
Arimetco, Inc. on November 30, 1995, for $4 million and the assumption by
Arimetco, Inc. of all future reclamation liabilities. The company recorded a
pre-tax gain on the transaction of $1.7 million resulting from the sale of
assets and reversed $4.5 million of accrued reclamation liability through cost
of sales.
Gold production in 1995 was 4,000 ounces, roughly 10 percent of the prior
year's output, as heap leach production ceased in the third quarter.
Royal Mountain King
The wholly owned Royal Mountain King Mine, located in Calaveras County, 40
miles east of Stockton, California, discontinued operation in July 1994.
Decommissioning of the mill facility and reclamation of the mine site began
in August 1994. The mill processing facility was sold in January 1995. The
reclamation process is expected to continue for several years, with the
majority of spending completed by 1998. Management believes the accrued
reclamation expense of $5.2 million associated with the operation is sufficient
to complete all phases of the reclamation process.
Statistical Summary
The table on page 8 summarizes key statistics with respect to the company's
operations for the five years ended December 31, 1995.
EMPLOYEES
FMC Gold had 203 employees as of December 31, 1995. Of this total, 188 were
based in the United States, with the remaining 15 employees located in Chile.
1995 DEVELOPMENTS
In September 1995, the company engaged the investment banking firm of CIBC
Wood Gundy Securities Inc. ("Wood Gundy") to act as its financial adviser in
connection with the possible sale of the company. In February 1996, the company
announced that the results of the sale process to date suggested that there is
greater interest in the sale of individual assets than in the purchase of the
company as a whole. In addition, the recent upturn in gold prices and gold
equity markets has presented an opportunity to evaluate additional options,
including a possible public equity offering of all or a substantial portion of
FMC's 80 percent equity interest in FMC Gold. As a result, both FMC Gold and
FMC have augmented the previously announced sale process to include a range of
strategic options based on gold equity market conditions and interest in
individual properties of FMC Gold. J.P. Morgan & Co., Inc. has been retained to
join Wood Gundy as financial advisers for this process. However, there is no
assurance that any transaction will result from the ongoing strategic review
effort and there is no assurance regarding the value, timing or structure of
any transaction that may be consummated.
In November 1995, the company sold its 100 percent interest in Paradise Peak
Corporation to Arimetco, Inc., resulting in a gain. (See Note 2 to the
company's consolidated financial statements.) Mining activity at the Paradise
Peak property ceased in 1993.
7
<PAGE>
FMC GOLD COMPANY
STATISTICAL SUMMARY
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
MILLING OPERATIONS
Tons of ore processed (thousands)
Paradise Peak............................ -- -- 587 1,727 1,558
Jerritt Canyon (FMC Gold share).......... 884 889 936 897 865
Royal Mountain King...................... -- 700 1,334 1,405 1,368
Ore grade (ounces per ton milled)
Paradise Peak
Gold................................... -- -- 0.115 0.097 0.079
Silver................................. -- -- 1.900 1.511 2.166
Jerritt Canyon........................... 0.129 0.119 0.129 0.117 0.145
Royal Mountain King...................... -- 0.051 0.053 0.060 0.057
Recoveries
Paradise Peak
Gold................................... -- -- 89% 93% 92%
Silver................................. -- -- 57% 63% 63%
Jerritt Canyon........................... 86% 88% 89% 89% 88%
Royal Mountain King...................... -- 73% 77% 82% 78%
LEACHING OPERATIONS
Tons of ore mined (thousands)
Paradise Peak............................ -- -- 3,918 4,715 3,217
Beartrack................................ 3,901 808 -- -- --
Ore grade (ounces per ton)
Paradise Peak
Gold................................... -- -- 0.026 0.028 0.029
Silver................................. -- -- 0.331 0.278 0.316
Beartrack--Gold.......................... .034 .036 -- -- --
Recoveries
Paradise Peak
Gold................................... -- -- 82% 74% 72%
Silver................................. -- -- 8% 17% 16%
Beartrack--Gold.......................... 90% -- -- -- --
PRODUCTION (thousands of ounces)
Gold
Paradise Peak.......................... 4 39 158 251 182
Jerritt Canyon (FMC Gold share)........ 98 98 108 96 113
Beartrack.............................. 49 -- -- -- --
Royal Mountain King.................... -- 26 55 71 62
----- ----- ----- ----- -----
Total................................ 151 163 321 418 357
Silver................................... 27 154 863 1,926 2,337
Total--gold equivalent(1)............ 151 166 331 441 383
CASH COST OF PRODUCTION ($ per gold
equivalent ounce)
Paradise Peak.......................... $ 155 $ 124 $ 117 $ 134 $ 180
Jerritt Canyon......................... $ 250 $ 283 $ 240 $ 230 $ 219
Royal Mountain King.................... -- $ 296 $ 336 $ 285 $ 353
Beartrack.............................. $ 166 -- -- -- --
Average................................ $ 221 $ 246 $ 194 $ 180 $ 220
Full cost of production.................. $ 362 $ 363 $ 310 $ 290 $ 326
</TABLE>
- --------
(1) Silver:gold conversion ratio: 75.6:1 in 1995, 72.5:1 in 1994, 90.6:1 in
1993, 85.5:1 in 1992, 89.1:1 in 1991.
8
<PAGE>
ITEM 3 LEGAL PROCEEDINGS
During the third quarter of 1994, the Pacific Rivers Council and the
Wilderness Society (collectively the "PRC"), 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 including mining,
which may affect endangered salmon, 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 Endangered Species Act (the "Act") with the National Marine
Fisheries Service ("NMFS") regarding existing land resource management plans
for the subject forests and their potential impacts on endangered Snake River
salmon. The government defendants and the plaintiffs have subsequently
negotiated a stipulated dismissal of most of the lawsuit. Under the terms of
the stipulation, the parties dismissed from this litigation all projects which
have undergone site-specific consultation. The company's Beartrack mine was
identified by the government defendants as a project for which consultation
has been completed. The Court issued an Order on Pending Claims on December
11, 1995 regarding the remaining specified projects (not including the
Beartrack mine) which have not yet completed consultation. Under the terms of
that Order, the Court has retained jurisdiction in this lawsuit for further
proceedings regarding those projects. The Beartrack mine is not subject to or
a part of the Court's order.
In October 1994, the Sierra Club Legal Defense Fund, Inc. ("Sierra"), on
behalf of certain other organizations, filed a lawsuit in Federal District
Court for the Western District of Washington at Seattle against NMFS and other
federal agencies for violation of the Act, alleging the NMFS' biological
opinion failed to satisfy the requirements of the Act. Sierra, the federal
agencies and the company, as intervenor, each filed a motion for summary
judgment. In November 1995, the Court ordered the federal agencies to
reinitiate consultation under Section 7 of the Act on the potential
environmental impacts of the Beartrack mine project on endangered salmon or
the designated critical habitat for salmon. The plaintiffs did not seek, and
the Court did not impose, any injunction or other restriction on the operation
of the Beartrack mine pending completion of such consultation. If, upon
remand, the Forest Service were to determine that an activity associated with
Beartrack mine operations could preclude the development of reasonable and
prudent alternatives to the project pending completion of the reinitiated
consultation, such activities could be required to cease pending completion of
consultation. Under the Act's regulations, consultation must be completed
within 135 days of the date consultation is initiated. An extension of 60 days
can be imposed by the agencies. Under the relevant statutory and regulatory
authorities, the results of a consultation can range from no impact on the
activities under review on the one hand to modest to significant impacts on
the other. In an extreme situation, a consultation could result in the
cessation of activities altogether, a potential result the company believes to
be remote in the case of the Beartrack mine, which has been in operation and
production since mid-1995. The company believes that the ongoing operation of
the Beartrack mine will not jeopardize endangered salmon or adversely modify
or destroy designated critical habitat, and that upon completion of
consultation, the mine will be permitted to continue operation.
On February 16, 1996, the company settled a dispute with a subcontractor on
the Beartrack project. The subcontractor made claims against the prime
contractor alleging overruns for work performed which exceeded the original
estimated costs for the project by approximately $8 million. These claims were
disputed by the prime contractor. Arbitration of the subcontractor's claims
against the prime contractor was concluded, and the company agreed to pay a
settlement of $3.1 million as part of the overall arbitrated settlement. The
settlement will be charged to property, plant and equipment and depreciated
over the remaining life of the Beartrack property.
The company sought and obtained from the U.S. Army Corps of Engineers (the
"Corps") a permit authorizing dredging and filling of wetlands in connection
with construction of the Beartrack mine under Section 404 of the Clean Water
Act. That permit was set to expire on October 11, 1994. On June 16, 1994, the
company sought an extension of the permit under applicable regulations. Under
those regulations, the filing of a request for extension operates to extend
the permit until the agency acts upon the request for extension. As of this
time, the Corps has not taken action upon the company's request.
9
<PAGE>
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the three
months ended December 31, 1995.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of FMC Gold Company as of March 1, 1996, together
with the offices in FMC Gold Company presently held by them, their business
experience since January, 1991, and their ages are as follows:
<TABLE>
<CAPTION>
AGE OFFICE; YEAR OF ELECTION; AND OTHER INFORMATION
NAMES 3/1/96 FOR PAST 5 YEARS
----- ------ -----------------------------------------------
<C> <C> <S>
Larry D. Brady..... 53 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... 52 President and Chief Operating Officer of FMC Gold
Company (87); Manager, Minerals Division of FMC
(84)
Donald L. Beckwith. 49 Vice President-Operations (92); Vice President-
Development (87-92)
Nha D. Hoang....... 53 Vice President-International (93); Director,
International of FMC (87-93)
Alan L. Lowe....... 44 Vice President-Finance and Chief Financial Officer
(96); Director, Financial Control of FMC (93);
Marketing Director, Alkali Chemicals Division of
FMC (91)
Jay A. Nutt........ 32 Controller-Principal Accounting Officer (96);
Finance Manager (94); Manager of Financial
Analysis, Food Machinery Group of FMC (94); Senior
Business Analyst, Food Machinery Group of FMC (91)
Robert L. Day...... 61 Secretary and General Counsel (87); Secretary and
Assistant General Counsel of FMC (87)
</TABLE>
Each of the company's executive officers has been employed by the company
and/or by FMC Corporation for the past five years. 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 or until their successors are elected and qualify.
PART II
ITEM 5 MARKET FOR THE REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The principal public trading market for FMC Gold common stock is the New
York Stock Exchange. The quarterly high and low trading prices of FMC Gold
common stock as reported on the New York Stock Exchange and cash dividends
paid for years ended December 31, 1995 and 1994 are set forth in the table of
Supplementary Data on page 31.
Year-end 1995 and 1994 market prices of FMC Gold shares were $4.125 and
$3.125 respectively.
FMC Gold had 763 shareholders of record as of December 31, 1995.
10
<PAGE>
ITEM 6 SELECTED FINANCIAL DATA
The following selected financial data, as it relates to the years 1991
through 1995, has been derived from the consolidated financial statements of
FMC Gold, including the consolidated balance sheets at December 31, 1995 and
1994 and the related consolidated statements of income and consolidated
statements of cash flows for the three years ended December 31, 1995, and the
notes thereto, appearing elsewhere herein.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C> <C> <C>
SUMMARY OF EARNINGS
Sales.................................... $ 57.4 $ 63.4 $118.9 $150.0 $139.4
Costs and expenses
Cost of sales.......................... 51.0 53.8 96.8 120.0 117.9
Exploration costs...................... 11.0 11.2 14.4 12.2 12.6
Selling, general and administrative
expenses.............................. 5.2 6.5 7.0 7.6 7.5
Write-downs and other charges.......... -- -- 60.6 -- --
------ ------ ------ ------ ------
Total costs and expenses................. 67.2 71.5 178.8 139.8 138.0
Operating income (loss).................. (9.8) (8.1) (59.9) 10.2 1.4
Interest income.......................... 5.9 8.7 8.3 6.0 7.8
Gain on sale of assets................... 1.7 -- -- -- --
------ ------ ------ ------ ------
Income (loss) before income taxes........ (2.2) 0.6 (51.6) 16.2 9.2
Provision (benefit) for income taxes..... (4.5) 0.4 (0.3) 1.8 2.2
------ ------ ------ ------ ------
Net income (loss)........................ $ 2.3 $ 0.2 $(51.3) $ 14.4 $ 7.0
====== ====== ====== ====== ======
Earnings (loss) per common share......... $ 0.03 $ -- $(0.70) $ 0.20 $ 0.10
====== ====== ====== ====== ======
Number of common shares used in earnings
per share computations (thousands)...... 73,484 73,484 73,484 73,484 73,484
====== ====== ====== ====== ======
TOTAL ASSETS AT DECEMBER 31.............. $225.2 $235.1 $238.6 $291.9 $275.2
====== ====== ====== ====== ======
TOTAL DIVIDENDS.......................... $ 3.7 $ 3.7 $ 3.7 $ 3.7 $ 3.7
====== ====== ====== ====== ======
</TABLE>
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FINANCIAL REVIEW
SALES AND EARNINGS
Sales decreased to $57.4 million from $63.4 million in 1994, reflecting the
winding down of residual heap leach production at Paradise Peak and the July
1994 shutdown of Royal Mountain King, offset by the start-up of the Beartrack
mine in July 1995 and slightly higher precious metals prices. Gold production
declined 7 percent and silver production declined 82 percent. At Jerritt
Canyon, the company's 30 percent share of gold production was even with 1994
production of 98,000 ounces as higher mill ore grades offset slightly lower
throughput and recoveries. At Paradise Peak, gold production declined to 4,000
ounces in 1995 due to residual heap leaching. The Royal Mountain King mine was
shut down in July 1994, producing 26,000 ounces of gold prior to closing.
Partly offsetting the lost production at Paradise Peak and Royal Mountain King
was the start up of the Beartrack mine, where gold production reached 49,000
ounces in 1995. Silver production in 1995 continued to decline to 27,000 ounces
compared with 154,000 ounces in 1994, as the Paradise Peak heap leach operation
came to a close.
The average realized price of gold increased to $389 per ounce from $384 in
1994, reflecting higher market prices and the benefit of hedging positions on
gold production from Beartrack.
11
<PAGE>
On November 30, 1995, the company sold the stock of FMC Paradise Peak
Corporation to Arimetco, Inc. for $4.0 million and the assumption by Arimetco
of all reclamation liabilities. The company recorded a pre-tax gain on the
transaction of $1.7 million and reversed $4.5 million of accrued reclamation
liability through cost of sales.
Cost of sales decreased to $51.0 million in 1995 from $53.8 million in 1994
due to lower cash mining and milling costs at Jerritt Canyon, the 1994
shutdown of Royal Mountain King and the reversal of the accrued reclamation
costs at Paradise Peak. Partly offsetting these reductions was the incremental
production cost at Beartrack. Average cash costs of production decreased to
$221 per gold equivalent ounce from $246 in 1994, reflecting the addition of
lower-cost production from Beartrack. Jerritt Canyon cash costs per gold
equivalent ounce decreased to $250 from $283 due to lower mining and milling
costs per ton. Beartrack cash costs per gold equivalent ounce were $166. Cash
costs at Paradise Peak increased to $155 per gold equivalent ounce in 1995
from $124 in 1994 as costs were spread over significantly fewer ounces of
production.
Exploration spending of $11.0 million in 1995 was virtually unchanged from
$11.2 million in 1994. Spending was primarily focused on the El Penon project
in northern Chile and the Rossi project on the Carlin Trend in Nevada.
Selling, general and administrative expenses decreased to $5.2 million in 1995
from $6.6 million in 1994 due to lower allocated costs from FMC, and continued
cost reduction efforts. Costs allocated from FMC are determined as a
percentage of the company's revenues relative to FMC consolidated revenue,
multiplied by FMC corporate overhead. See Note 12 to the company's
consolidated financial statements. Interest income decreased to $5.9 million
in 1995 from $8.7 million in 1994 due to lower cash balances on loans to FMC
as well as lower interest rates.
Net income was $2.3 million in 1995 compared with net income of $0.2 million
in 1994. The company recognized tax benefits of $4.5 million in 1995
associated the utilization of net operating loss carrybacks. The tax benefits
were made available through the company's tax sharing agreement with FMC.
Earnings per share were $0.03 for 1995 compared with break-even earnings per
share in 1994.
TAXES
The company's 1995 tax provision includes a $4.5 million benefit associated
with the utilization of tax benefits (operating loss carrybacks) made
available through the company's tax sharing agreement with FMC. 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 1995, portions of these previously reserved deferred tax assets were
recognized. The 1994 tax provision primarily reflected a prior-year adjustment
to the company's foreign sales corporation tax benefits generated upon
completion of the company's 1993 tax return.
LIQUIDITY AND CAPITAL RESOURCES
Cash to meet the company's operating needs, finance capital expenditures and
fund exploration activities was provided from existing cash reserves
(including loans to FMC). At December 31, 1995, cash and cash equivalents
totaled $79.2 million, primarily in the form of loans to FMC, which have
varying maturities and are payable on demand. As of December 31, 1995, FMC's
cash on hand and available credit lines were more than adequate to allow
repayment of these loans.
Capital expenditures decreased to $36.9 million in 1995 from $56.2 million
in 1994. Capital expenditures in 1995 related to Beartrack were $25.1 million
versus $48.0 million in 1994. In 1995, $11.9 million of mine development and
equipment additions were made at Jerritt Canyon.
On December 31, 1995, the company paid a dividend on common stock of $0.05
per share to stockholders of record on December 7, 1995.
12
<PAGE>
Expected cash requirements for 1996 include approximately $16.0 million for
planned capital expenditures, primarily associated with mine development at
Jerritt Canyon and ongoing project development at Beartrack. Exploration
spending for 1996 is expected to approximate $7.9 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. In addition, in the event that the ongoing strategic
review process results in any significant proceeds from asset sales, it is
possible that a distribution of such proceeds and some portion of existing
cash balances may occur.
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, loans due from FMC or borrowings from third parties.
OUTLOOK
Annual production is estimated to be approximately 200,000 ounces per year
in 1996 and 1997 based upon continued operation of the Beartrack and Jerritt
Canyon mines. This higher production level should further reduce cash costs
per gold equivalent ounce and improve operating profitability in both years.
The production from Beartrack will help offset a decline at Jerritt Canyon,
where production through 1997 will primarily come from underground sources.
Exploration at both the Chilean and Rossi properties has been successful in
delineating mineralization.
As discussed in Note 13 to the consolidated financial statements, management
is pursuing, in consultation with FMC, an ongoing strategic review process
that may result in one or more transactions involving the company, some or all
of its assets, or FMC's 80 percent equity interest in the company. See "1995
Developments" under Items 1 and 2 on page 7 for additional information
regarding this process.
See Item 3 to Form 10-K on page 9 for a description of legal proceedings
relating to the Beartrack mine and the company's assessment of risks related
thereto.
1994 COMPARED WITH 1993
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, with the winding down of the Paradise Peak heap-leach
operation.
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 mills shutdown
at Paradise Peak and Royal Mountain King and a $4.0 million reversal of
previously accrued reclamation expense. Of this amount, $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 mineable 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
13
<PAGE>
costs per ounce declined to $296 from $336 in 1993 due to lower mining costs.
Jerritt Canyon cash costs per gold equivalent ounce 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, as well as continued cost reduction efforts.
Costs allocated from FMC are determined as a percentage of the company's
revenues relative to FMC consolidated revenue, multiplied by FMC Corporate
overhead. See Note 12 to the company's consolidated financial statements.
Interest income increased to $8.7 million in 1994 as improved interest rates
on loans to FMC overcame the decrease 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 break-even for 1994 compared
with losses per share of $0.70 in 1993.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors............................................ 15
Management Report on Financial Statements................................. 16
Consolidated Financial Statements
Consolidated Statements of Operations for the Years Ended December 31,
1995, 1994 and 1993.................................................... 17
Consolidated Balance Sheets as of December 31, 1995 and 1994............ 18
Consolidated Statements of Cash Flows for the Years Ended December 31,
1995, 1994 and 1993.................................................... 19
Consolidated Statements of Changes in Stockholders' Equity for the Years
Ended December 31, 1995, 1994 and 1993................................. 20
Notes to Consolidated Financial Statements.............................. 21
Supplementary Data
Quarterly Results and Stockmarket Data.................................. 31
</TABLE>
14
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders,
FMC Gold Company:
We have audited the consolidated balance sheets of FMC Gold Company and
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of operations, cash flows and changes in stockholders' equity for
each of the years in the three-year period ended December 31, 1995. These
consolidated financial statements are the responsibility of the company's
management. 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 perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. 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 reasonable 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 subsidiaries at December 31, 1995 and 1994, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 1995 in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Salt Lake City, Utah
January 18, 1996
15
<PAGE>
MANAGEMENT REPORT ON FINANCIAL STATEMENTS
The consolidated financial statements and related information have been
prepared by management, which is responsible for the integrity and objectivity
of that information. Where appropriate, they reflect estimates based on
judgments of management. The statements have been prepared in conformity with
accounting principles generally accepted in the United States. Financial
information included elsewhere in this annual report is consistent with that
contained in the consolidated financial statements.
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 reasonable 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 outside 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.
Jay A. Nutt
Principal Accounting Officer
Alan L. Lowe
Chief Financial Officer
Reno, Nevada
January 18, 1996
16
<PAGE>
FMC GOLD COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1995 1994 1993
------- ------- --------
<S> <C> <C> <C>
Sales............................................... $57,438 $63,369 $118,927
Costs and expenses
Cost of sales..................................... 51,043 53,821 96,822
Exploration costs................................. 11,022 11,153 14,414
Selling, general and administrative expenses...... 5,149 6,551 7,003
Write-downs and other charges (Note 3)............ -- -- 60,600
------- ------- --------
Total costs and expenses........................ 67,214 71,525 178,839
Operating loss...................................... (9,776) (8,156) (59,912)
Interest income..................................... 5,857 8,717 8,336
Gain on sale of assets.............................. 1,680 -- --
------- ------- --------
Income (loss) before income taxes................... (2,239) 561 (51,576)
Provision (benefit) for income taxes (Note 8)....... (4,512) 410 (313)
------- ------- --------
Net income (loss)................................... $ 2,273 $ 151 $(51,263)
======= ======= ========
Earnings (loss) per common share (Note 1)........... $ 0.03 $ -- $ (0.70)
======= ======= ========
</TABLE>
See notes to consolidated financial statements.
17
<PAGE>
FMC GOLD COMPANY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31
-----------------
ASSETS 1995 1994
------ -------- --------
<S> <C> <C>
Current assets:
Loans and amounts due from FMC Corporation (Notes 1 & 12).. $ 80,826 $120,326
Trade receivables, net of allowances of $300 in 1995 and
1994...................................................... 4,859 1,496
Inventories (Note 4)....................................... 14,792 5,621
Other current assets....................................... 4,096 1,558
-------- --------
Total current assets..................................... 104,573 129,001
-------- --------
Property, plant and equipment, net (Note 5).................. 113,992 101,267
Other assets (Notes 1 and 11)................................ 6,612 4,821
-------- --------
Total assets............................................. $225,177 $235,089
======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
Current liabilities:
Outstanding checks in excess of bank balances (Note 1)..... $ 1,651 $ 1,940
Accounts payable, trade and other.......................... 7,108 11,110
Accrued and other liabilities (Note 6)..................... 7,309 9,025
Amounts due to FMC Corporation (Note 12)................... 2,275 594
Income taxes payable (Notes 1 & 8)......................... 2,270 1,919
-------- --------
Total current liabilities................................ 20,613 24,588
-------- --------
Other long-term liabilities (Note 7)......................... 9,843 14,379
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.......... 735 735
Capital in excess of par value............................. 68,609 68,609
Retained earnings.......................................... 125,377 126,778
-------- --------
Total stockholders' equity............................... 194,721 196,122
-------- --------
Total liabilities and stockholders' equity................. $225,177 $235,089
======== ========
</TABLE>
See notes to consolidated financial statements.
18
<PAGE>
FMC GOLD COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).............................. $ 2,273 $ 151 $(51,263)
-------- -------- --------
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Provision for depreciation................... 21,253 15,275 25,804
Gain on sale of assets....................... (1,680) -- --
Non-cash portion of deferred taxes (Note 8).. -- 2,527 (1,335)
Write-downs and other charges (Note 3)....... -- -- 60,600
(Increase) decrease in assets:
Trade receivables.......................... (3,363) 1,031 1,246
Inventories................................ (9,171) (1,845) 2,516
Other current assets....................... (2,538) (322) (816)
Other assets............................... -- (4,015) --
(Decrease) increase in liabilities:
Accounts payable, trade and other.......... (4,002) 2,904 390
Accrued and other liabilities.............. (1,716) (2,910) 1,623
Amounts due to FMC Corporation............. 1,681 (475) (313)
Income taxes payable....................... 351 (3,003) (2,178)
Other long-term liabilities................ (4,536) 2,063 (2,885)
-------- -------- --------
Net cash provided (used) by operating activities. (1,448) 11,381 33,389
-------- -------- --------
Cash flows from investing activities:
Capital spending............................... (36,943) (56,188) (18,455)
Disposal of property, plant and equipment...... 4,645 251 1,431
Increase in other assets....................... (1,791) (168) (223)
-------- -------- --------
Net cash used in investing activities............ (34,089) (56,105) (17,247)
-------- -------- --------
Cash flows from financing activities:
Dividends paid................................. (3,674) (3,674) (3,674)
-------- -------- --------
Increase (decrease) in cash and cash equivalents. (39,211) (48,398) 12,468
Cash and cash equivalents, beginning of year..... 118,386 166,784 154,316
-------- -------- --------
Cash and cash equivalents, end of year........... $ 79,175 $118,386 $166,784
======== ======== ========
</TABLE>
Supplemental disclosure of cash flow information:
Cash paid and (refunds received) for income taxes during 1995, 1994 and 1993
were $(2,857), $895 and $3,180, respectively.
See notes to consolidated financial statements.
19
<PAGE>
FMC GOLD COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
CAPITAL IN
NUMBER COMMON EXCESS OF RETAINED
OF SHARES STOCK PAR VALUE EARNINGS
--------- ------ ---------- --------
<S> <C> <C> <C> <C>
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
Net income................................ 2,273
Cash dividend ($0.05 per share)........... (3,674)
------ ---- ------- --------
Balance December 31, 1995................. 73,484 $735 $68,609 $125,377
====== ==== ======= ========
</TABLE>
See notes to consolidated financial statements.
20
<PAGE>
FMC GOLD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 PRINCIPAL ACCOUNTING POLICIES
Nature of Operations
FMC Gold Company ("FMC Gold" or "the company") is a producer of precious
metals.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Consolidation
The consolidated financial statements include the accounts of FMC Gold
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 intercompany accounts are eliminated in consolidation.
Revenue Recognition
Revenue is generally recognized upon shipment of gold and silver dore to
third parties.
Cash and Cash Equivalents
Cash and cash equivalents consists of loans and amounts due from FMC
Corporation ("FMC") less outstanding checks in excess of bank balances.
Loans due from FMC consist of three 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 at December 31, 1995, 1994
and 1993 for outstanding checks in excess of bank balances due to the timing
of cash transfers from FMC.
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. Some assets are depreciated on a units of production
basis, with depreciation rates established according to estimated producible
units at the time the assets are placed in service. 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.
21
<PAGE>
FMC GOLD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
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
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. The company is subject to a tax sharing
agreement with FMC, which is further described in Note 8. The application of
the tax sharing agreement does not materially affect the company's accounting
for income taxes under Statement of Financial Accounting Standards ("SFAS")
No. 109.
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. Costs
associated with the purchase of certain hedge instruments for open put options
included in other assets were $3.4 million as of December 31, 1995 and $4.0
million as of December 31, 1994. These costs were deferred and are recognized
in the period the revenues related to the hedged production are recorded.
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 shares in
1995, 1994 and 1993).
Financial Instruments
The fair values of financial instruments (primarily short-term deposits)
approximated their carrying values at December 31, 1995, 1994 and 1993. Fair
values have been determined through information obtained from both market
sources and management estimates.
Accounting Standards Not Adopted
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed of" will be adopted by the company effective
January 1, 1996. SFAS No. 121 establishes criteria for recognizing, measuring
and disclosing impairments of long-lived assets. The company plans to adopt
the new standard on January 1, 1996 but does not expect a significant impact
on its consolidated financial position or results of operations at the date of
adoption.
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," also effective for fiscal years beginning after December 15,
1995. Upon adoption of SFAS No. 123, the company plans to continue its current
accounting for employee stock-based compensation plans in accordance with
Accounting Principles Board Opinion No. 25, as permitted under SFAS No. 123,
and, if material, to disclose the pro forma effect of the fair value
accounting method in the notes to its consolidated financial statements.
22
<PAGE>
FMC GOLD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 2 ACQUISITIONS AND DIVESTITURES
On November 30, 1995, the company's 100 percent interest in Paradise Peak
Corporation was sold to Arimetco, Inc. for $4 million in the form of cash and
a note receivable, resulting in a $1.7 million gain on the sale of the assets
and the reversal of $4.5 million of accrued reclamation liability through cost
of sales.
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, 1994. Another $1.5 million payment
was made in June 1995, with the balance owed to Minex to be paid in $1.0
million installments in 1996 and 1997, and $0.5 million installments in 1998
and 1999.
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 investments. 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. 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 in the December, 1993 special charge was $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 (at cost) consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31
--------------
1995 1994
------- ------
(IN THOUSANDS)
<S> <C> <C>
Gold and silver............................................ $ 638 $ 279
Leach-pad ore.............................................. 11,368 2,730
Materials and supplies..................................... 2,786 2,612
------- ------
Total.................................................. $14,792 $5,621
======= ======
</TABLE>
Gold and silver inventories are in the form of dore, which is suitable for
delivery to precious metal treatment facilities. These inventories are
generally sold to and further processed by these facilities into forms
suitable for end uses.
Heap leach pad ore increased to $11.4 million at December 31, 1995, from
$2.7 million at December 31, 1994. The increase represents the cost of loading
ore on the heap leach pads at the Beartrack mine, and includes labor,
materials and other production costs. Mining at the Beartrack operation
commenced in August 1994, and at December 31, 1995 there were approximately
4.7 million tons of ore under leach containing approximately 113,000 ounces of
gold.
23
<PAGE>
FMC GOLD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 5 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31
------------------
1995 1994
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Land and land improvements............................ $ 2,689 $ 9,484
Buildings............................................. 2,341 5,037
Machinery and equipment............................... 84,416 153,295
Construction in progress.............................. 73,516 47,685
Development costs..................................... 63,187 72,832
Capitalized interest.................................. -- 10,586
-------- --------
Total cost........................................ 226,149 298,919
Accumulated depreciation.............................. (112,157) (197,652)
-------- --------
Net property, plant and equipment..................... $113,992 $101,267
======== ========
</TABLE>
NOTE 6 ACCRUED AND OTHER LIABILITIES
Accrued and other liabilities comprise the following:
<TABLE>
<CAPTION>
DECEMBER 31
-------------
1995 1994
------ ------
(IN
THOUSANDS)
<S> <C> <C>
Shutdown and reclamation accrual (Notes 1 and 7)........... $1,256 $3,537
Notes payable (Note 2)..................................... 1,000 1,500
Accrued bonus and payroll.................................. 979 838
Other...................................................... 4,074 3,150
------ ------
Total.................................................. $7,309 $9,025
====== ======
</TABLE>
NOTE 7 OTHER LONG-TERM LIABILITIES
Other long-term liabilities comprise the following:
<TABLE>
<CAPTION>
DECEMBER 31
--------------
1995 1994
------ -------
(IN THOUSANDS)
<S> <C> <C>
Shutdown and reclamation accrual (Notes 1 and 6).......... $7,843 $11,372
Notes payable (Note 2).................................... 2,000 3,000
Other..................................................... -- 7
------ -------
Total................................................. $9,843 $14,379
====== =======
</TABLE>
Shutdown and reclamation accruals represent estimated costs of earthwork
such as detoxification and recontouring, revegetation, and stabilization. Also
included are heap-leach encapsulation and facility decommissioning 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.
24
<PAGE>
FMC GOLD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
At December 31, 1995, accrued reclamation costs, including those identified
in Note 6--Accrued and Other Liabilities, associated with Royal Mountain King
were $5.2 million, Beartrack $0.7 million, Austin $0.3 million, and Jerritt
Canyon $2.9 million. Reclamation spending at each of these facilities is
expected to continue in 1996 and beyond.
NOTE 8 INCOME TAXES
On March 31, 1994, FMC increased its ownership interest in the company to 80
percent. Thereafter, the company agreed to be included in FMC's consolidated
federal income tax return. Under a tax-sharing agreement, the company pays to
FMC amounts generally equal to the tax the company would have been required to
pay had it filed a separate return, and FMC pays to the company amounts
generally equal to any tax benefits the company would have realized through
carryover on a separate return basis.
For state tax purposes, the company generally continues 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 is responsible for the tax due thereunder.
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 is presented below. The 1995
benefit of $4.5 million resulted from tax benefits realized under the tax
sharing agreement with FMC.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------
1995 1994 1993
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal........................................ $ -- $(2,117) $ 782
State.......................................... -- -- 240
------- ------- -------
Total current.................................... -- (2,117) 1,022
Deferred......................................... (4,512) 2,527 (1,335)
------- ------- -------
Total provision (benefit)........................ $(4,512) $ 410 $ (313)
======= ======= =======
</TABLE>
25
<PAGE>
FMC GOLD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Significant components of the company's deferred tax assets and liabilities
are as follows:
<TABLE>
<CAPTION>
DECEMBER 31
------------------
1995 1994
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Alternative minimum tax ("AMT") carryforwards.............. $ 9,522 $ 12,536
Reclamation reserves....................................... 1,734 5,206
Capitalized exploration costs.............................. 3,034 4,857
Property, plant and equipment.............................. 394 3,297
Other reserves............................................. 2,150 2,332
Loss carryforwards......................................... 11,854 1,749
Accrued pension and other postretirement benefits.......... 823 715
Other...................................................... 382 429
-------- --------
Deferred tax assets........................................ 29,893 31,121
Valuation allowance........................................ (29,103) (30,810)
-------- --------
Deferred tax assets, net of allowance...................... $ 790 $ 311
======== ========
Capitalized development costs.............................. $ (546) $ --
Other...................................................... (244) (311)
-------- --------
Deferred tax liabilities................................... $ (790) $ (311)
======== ========
Net deferred tax assets.................................... $ -- $ --
======== ========
</TABLE>
The valuation allowance for deferred tax assets as of December 31, 1995 was
$29.1 million. The net decrease in the allowance during 1995 of $1.7 million
includes an increase in the allowance against benefits to be realized through
loss carryforwards more than offset by the realization of benefits through
loss carrybacks pursuant to the tax sharing agreement.
At December 31, 1995, the company has an AMT credit carryover of $12.8
million. Generally, this credit can be carried forward to offset regular tax
to the extent it exceeds the AMT in a carryover year. During 1995, FMC Gold
reduced its deferred asset for AMT by $3.3 million as a result of loss
carrybacks allowed pursuant to the tax sharing agreement with FMC.
The effective income tax provision (benefit) differs from that computed by
applying the applicable federal statutory rate of 35 percent for 1995 and 1994
and 34 percent for 1993 to income before taxes for the following reasons:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1995 1994 1993
------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Expected tax provision (benefit)................... $ (784) $ 197 $(17,536)
Foreign sales corporation income not subject to US
tax............................................... (844) (769) (2,714)
Percentage depletion............................... (1,716) (1,217) (3,674)
Foreign corporation worthless stock deduction...... (1,324) -- --
Net operating loss carryover....................... -- (1,796) --
Change in valuation reserve........................ (1,707) 3,580 22,632
Loss from foreign subsidiaries not benefited....... 1,844 398 787
State income taxes, less federal income tax
benefit........................................... -- -- 158
Other.............................................. 19 17 34
------- ------- --------
Actual tax provision (benefit)..................... $(4,512) $ 410 $ (313)
======= ======= ========
</TABLE>
26
<PAGE>
FMC GOLD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 9 EXPORT SALES AND SALES TO MAJOR CUSTOMERS
U.S. export sales to unaffiliated customers by destination of sale are as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
------------------------
1995 1994 1993
------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Canada........................................... $ 1,109 $25,240 $ 20,063
Western Europe................................... 55,643 37,555 98,404
------- ------- --------
Total........................................ $56,752 $62,795 $118,467
======= ======= ========
</TABLE>
The company's products may be purchased and refined by several Canadian,
European and domestic refiners. Sales to two refiners in 1995, three refiners
in 1994, and four refiners in 1993 each represented 10 percent or more of
consolidated sales. Specifically, sales to these companies amounted to $55.8
million in 1995, $62.8 million in 1994 and $118.5 million in 1993. 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 defined contribution
postretirement health care and life insurance benefit program. The cost of
these benefits is included in the allocation of overhead from FMC (Note 12).
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 $0.2 million, $0.5 million and $1.1 million in
1995, 1994 and 1993, 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 1995,
1994 and 1993 and are included in the costs paid under the management services
agreement discussed in Note 12. As of December 1995, there are 203 employees
under this plan. 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 established as a base performance objective the discovery of a
certain quantity of profitable gold reserves. 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
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 were for 23,800 ounces of gold,
deliverable between April 1995 and April 1996. The options were originally
purchased for $4 million and provide the company the right to sell gold at an
agreed-upon price. At December 31, 1995, the carrying value of the remaining
options (at cost) was $3.4 million. The market values of the options as of
December 31, 1995 and 1994 were approximately $2.8 million and $1.1 million,
respectively. The cost of the options was recognized concurrently with the
revenues related to the hedged production.
27
<PAGE>
FMC GOLD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
At December 31, 1995 the company held forward contracts for 10,500 ounces of
gold. Contracts for 3,000 ounces expire January 31, 1996 with the remaining
contracts for 7,500 ounces expiring April 30, 1996. The options are recorded
in other assets and will be amortized in accordance with utilization. The
options carry a strike price of $400 per ounce. The value of these options
varies with changes in market prices of the commodity and management
continually evaluates the desirability of exercise in relation to current
market prices. The options expire according to the following schedule:
<TABLE>
<CAPTION>
OPTIONS EXPIRATION
(OUNCES) DATE
-------- ----------
<S> <C>
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
</TABLE>
The company's mining operations and exploration activities are subject to
various federal, state and local laws, and regulation 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 that
will require substantial and extraordinary expenditures. Expenditures for
environmental projects were not substantial in 1995, nor are they expected to
be substantial in 1996.
The company leases office and warehouse space in Reno and Denver and various
types of equipment (primarily mobile mining equipment at the Beartrack mine).
Total rent expense under all leases amounted to $1.1 million, $0.5 million and
$0.6 million for 1995, 1994 and 1993 respectively. Minimum future rentals
under noncancellable leases aggregated approximately $9.8 million as of
December 31, 1995, and are estimated to be payable $1.9 million in 1996, $1.8
million in 1997, $1.5 million in 1998, $1.5 million in 1999, $1.5 million in
2000, and $1.7 million beyond.
As discussed in Note 13, the company has hired financial advisers in
connection with the possible sale of the company. Due to the possibility of a
sale, selected employees were informed of severance benefits that would become
available in the event of a change in control of the company, resulting in the
loss of employment. Because it is unclear whether a sale will take place or
how such a transaction may be structured, the company has not accrued
severance benefits. Should a transaction be agreed upon, resulting in the
company incurring severance costs, management estimates the cost of such
benefits could be as much as $2.0 million, primarily covering employees based
in Reno, Denver, and Chile.
The company has certain other contingent liabilities resulting from
litigation, 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.
NOTE 12 RELATED PARTY TRANSACTIONS
At December 31, 1995, 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.
28
<PAGE>
FMC GOLD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Under the management services agreement, the company will be charged at
FMC's direct and indirect cost, including allocated overhead, for certain
general, administrative and other services provided by FMC. Overhead
allocations of $1.0 million, $1.6 million and $2.6 million in 1995, 1994 and
1993, 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 reasonable and consistent manner.
In addition, the agreement states that either the company or FMC may borrow
up to $50 million from the other on a short-term 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 by FMC Gold for repayment of
FMC's borrowings under the management services agreement is legally
enforceable. During 1995, FMC decreased its total borrowings from the company
by $39.5 million, ending the year with a balance of $80.8 million (consisting
of three notes with varying maturities), and paid $5.7 million in interest at
an average rate of 6.2 percent. During the year, the highest outstanding
balance owed was $120.3 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 arrangement
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. In the
opinion of management, FMC's cash on hand and available credit lines at year-
end were more than adequate to allow repayment of these loans.
The following schedule summarizes the activity of indebtedness to and from
FMC in 1995, 1994 and 1993.
<TABLE>
<CAPTION>
LOAN DUE AMOUNTS DUE
FROM FMC FROM (TO) FMC
-------- -------------
(IN THOUSANDS)
<S> <C> <C>
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 by FMC Gold............................... 16,816
Payments received by FMC Gold........................... (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 by FMC Gold............................... 16,793
Payments received by FMC Gold........................... (97,000) (8,639)
Balance December 31, 1994............................... 120,326 (594)
Increase in amounts loaned.............................. 51,500
Interest charges........................................ 5,737
Payments made by FMC for FMC Gold....................... (18,480)
Charges from FMC for services and materials............. (1,808)
Payments made by FMC Gold............................... 19,040
Payments received by FMC Gold........................... (91,000) (6,170)
-------- --------
Balance December 31, 1995............................... $ 80,826 $ (2,275)
======== ========
</TABLE>
29
<PAGE>
FMC GOLD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)
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 FMC Gold Company common stock currently
held by FMC. If exchanged at $15 1/8, non-FMC ownership of the company would
increase to 28 percent and FMC's ownership would be reduced to 72 percent.
The company purchases liquid sodium cyanide from the Alkali Chemicals
Division of FMC. Such purchases amounted to $1.0 million, $1.9 million and
$2.0 million in 1995, 1994 and 1993, respectively. Contracts are in effect to
purchase sodium cyanide through 1996 for approximately $1.2 million. 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 decisions 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 prices should decrease.
NOTE 13 SUBSEQUENT EVENTS (UNAUDITED)
In September 1995, the company engaged the investment banking firm of CIBC
Wood Gundy Securities Inc. ("Wood Gundy") to act as its financial adviser in
connection with the possible sale of the company. On February 9, 1996, the
company announced that it had determined that it will augment its previously-
announced sale process to include a range of options based on current gold
equity market conditions and interest in individual properties. The company is
retaining J. P. Morgan & Co., Inc. to join Wood Gundy as financial advisers
for this process. At this time, there can be no assurance as to whether any
transaction will result from the company's work with Wood Gundy and J. P.
Morgan & Co., Inc. or as to the value, timing or structure of any such
transaction. Management's decisions with respect to the value or structure of
a potential sale could have a material impact on the valuation of the company
and its assets.
On February 16, 1996 the company settled a dispute with a subcontractor on
the Beartrack project. The subcontractor made claims against the prime
contractor alleging overruns for work performed which exceeded the original
estimated costs for the project by approximately $8 million. These claims were
disputed by the prime contractor. Arbitration of the subcontractor's claims
against the prime contractor was concluded in February 1996, and the company
agreed to pay a settlement of $3.1 million as part of the overall arbitrated
settlement. The settlement will be charged to property, plant and equipment
and depreciated over the remaining life of the Beartrack property.
30
<PAGE>
SUPPLEMENTARY DATA
FMC GOLD COMPANY
QUARTERLY RESULTS AND STOCK MARKET DATA
<TABLE>
<CAPTION>
1995 1994
------------------------------ -----------------------------
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................... $ 9.1 $ 9.7 $ 14.4 $ 24.2 $ 22.3 $ 17.8 $ 12.0 $ 11.3
Gross profit............ $ (3.9) $ (3.7) $ (2.0) $ 5.0 $ 7.2 $ 2.2 $ (1.4) $ 1.5
Operating income (loss). $ (5.2) $ (4.8) $ (3.6) $ 3.9 $ 2.7 $ (2.6) $ (7.1) $ (1.2)
Gain on sale of assets.. -- -- -- 1.7 -- -- -- --
Interest income & taxes. 1.6 1.7 5.1 2.0 1.9 2.3 2.4 1.8
------ ------ ------ ------ ------ ------ ------ ------
Net income (loss) (1)... $ (3.6) $ (3.1) $ 1.5 $ 7.6 $ 4.6 $ (0.3) $ (4.7) $ 0.6
Earnings (loss) per
common share (1)....... $ (.05) $ (.04) $ .02 $ .10 $ .06 $ .00 $ (.06) $ .01
Dividends per common
share.................. $ 0.05 $ 0.05
Common stock prices:
High.................. $4 3/8 $4 1/2 $5 5/8 $5 1/8 $7 1/8 $6 7/8 $5 3/8 $4 7/8
Low................... $2 3/4 $3 1/2 $3 3/4 $3 3/4 $5 1/4 $5 1/8 $4 7/8 $3
</TABLE>
- --------
(1) Quarterly earnings per common share and net income (loss) may differ from
the full-year amounts due to rounding.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable for the two-year period ended December 31, 1995.
31
<PAGE>
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item with respect to directors is
incorporated by reference to page 2 of FMC Gold's Proxy Statement dated March
26, 1996. Executive Officers of the Registrant are identified under Item 4 on
page 10 of this Form 10-K.
ITEM 11 EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to page 6
of FMC Gold's Proxy Statement dated March 26, 1996. The information related to
Board Compensation is identified separately therein and is not incorporated
herein.
ITEM 12 SECURITY OWNERSHIP OF THE COMPANY
The information required by this item is incorporated by reference to page 3
of FMC Gold's Proxy Statement dated March 26, 1996.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is incorporated by reference to page 4
of FMC Gold's Proxy Statement dated March 26, 1996.
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1 and 2. Financial Statements and Reports
See Index to Financial Statements and Supplementary Data on page
14.
Schedules not included in this 10-K have been omitted because they
are either not applicable or the required information is shown in
the financial statements or notes thereto.
3. Exhibits: See attached Index to Exhibits, page 34.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the three months ended
December 31, 1995.
(c) Exhibits
See Index to Exhibits, page 34.
32
<PAGE>
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
/s/ Brian J. Kennedy
By: ______________________________________
Brian J. Kennedy
Date: March 26, 1996
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>
<S> <C>
Larry D. Brady* Chairman of the Board, Chief Executive
___________________________________________ Officer and Director
Larry D. Brady
Alan L. Lowe* Vice President--Finance, Principal
___________________________________________ Financial Officer
Alan L. Lowe
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
/s/ Jay A. Nutt Controller--Principal Accounting Officer
___________________________________________
Jay A. Nutt
</TABLE>
/s/ Alan L. Lowe
*By ______________________________ March 26, 1996
Alan L. Lowe
33
<PAGE>
INDEX TO EXHIBITS
FILED WITH OR INCORPORATED BY
REFERENCE INTO FORM 10-K
OF FMC GOLD COMPANY
FOR YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT DESCRIPTION
------- -------------------
<C> <S> <C>
3.1 Certificate of Incorporation of the Company, as amended (in-
corporated by reference to Exhibit 3.1 of the Company's Regis-
tration Statement on Form S-1 (No. 33-14429))
3.2 By-Laws of the Company (incorporated by reference to Exhibit
3.2 to the Company's Registration Statement on Form S-l (No.
33-14429))
10.1 Management Services Agreement between the Company and FMC (in-
corporated by reference to Exhibit 10.1 to the Company's Reg-
istration Statement on Form S-1 (No. 33-14429))
10.2 Amendment No. 1 to Management Services Agreement between the
Company and FMC
10.3 Amendment No. 2 to Management Services Agreement between the
Company and FMC
10.4 Tax Sharing Agreement between the Company and FMC dated April
1, 1994 (incorporated by reference to Exhibit 10.4 to the
Company's Annual Report on Form 10-K for the year ended Decem-
ber 31, 1994)
10.5 Addendum to Tax Sharing Agreement dated April 1, 1994 between
the Company and FMC (incorporated by reference to Exhibit 10.5
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1994)
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))
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))
10.8* FMC Corporation Salaried Employees' Retirement Plan, as
amended and restated January 1, 1995 (incorporated by refer-
ence from Exhibit 10.4 to the Form 10-K filed by FMC on March
29, 1995)
10.9* FMC Corporation Employees' Thrift and Stock Purchase Plan, as
revised and restated as of April 1, 1991 (incorporated by ref-
erence from Exhibit 10.3 to the Form SE filed by FMC on March
27, 1992)
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)
10.11* FMC Salaried Employees' Equivalent Retirement Plan (incorpo-
rated by reference from Exhibit 10.4 to the Form SE filed by
FMC on March 27, 1992)
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)
10.13* FMC Management Bonus Plan (incorporated by reference from Ex-
hibit 10.6 to the Form SE filed by FMC on March 27, 1992)
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)
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)
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT DESCRIPTION
------- -------------------
<C> <S> <C>
10.16* FMC Master Trust Agreement between FMC and Bankers Trust Com-
pany (incorporated by reference from Exhibit 10.9 to the Form
SE filed by FMC on March 27, 1992)
10.17* FMC Gold Company 1988 Long-Term Incentive Compensation Plan
(incorporated by reference from Exhibit 4.3 to the Company's
Registration Statement on Form S-8 (No. 33-65327))
21 List of Significant Subsidiaries of the Registrant
23 Consent of Independent Auditors
24 Powers of Attorney
27 Financial Data Schedule
</TABLE>
- --------
* Indicates a compensatory plan or arrangement.
35
<PAGE>
EXHIBIT 10.2
FMC GOLD COMPANY
ANNUAL REPORT ON
FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1995
Amendment No. 1
to
Management Services Agreement
AGREEMENT, dated as of August 1, 1987, between FMC Gold Company (formerly
known as FMC Nevada Company), a Delaware Corporation ("Newco") and FMC
Corporation, a Delaware corporation (the "Parent").
WHEREAS, Newco and Parent have heretofore entered into a Management Services
Agreement dated as of May 2, 1987, (the "Agreement"); and
WHEREAS, Newco and Parent desire to amend the Agreement as hereinafter set
forth;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement shall have the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in
the Agreement shall from and after the date hereof refer to the Agreement as
amended hereby.
SECTION 2. AMENDMENT of Section 6 of the Agreement. Section 6 is amended to
read as follows:
"6. Extension of Credit
(a) The Company and FMC hereby grant to each other the right to borrow
money from the other, from time to time, subject to the terms and
conditions set forth herein.
(b) The borrower may exercise its right to borrow from the lender from
time to time during the term of this Agreement by requesting in writing
that the lender advance the amount desired and making reference in such
request to this Agreement. The lender will lend to the borrower such sums
of money as the borrower may specify in its request.
(c) Draws under this credit facility may be made at any time in any whole
digit multiple of $100,000 provided that no draw may be made by the Company
if, when such draw is added to previous draws then outstanding, the
aggregate borrowing outstanding by the Company pursuant to this Agreement
would exceed $50,000,000.
(d) All money borrowed under this Agreement shall bear interest, payable
on or before the tenth business day of each month, at a rate equal to the
incremental net short-term borrowing or investing rate of FMC during such
period, determined in accordance with generally accepted accounting
principles applied in a manner consistent with those applied by FMC in the
preparation of its financial statements.
(e) All Funds borrowed under this Agreement, together with all interest
accrued thereon, shall be repaid by the borrower, upon demand by the
lender, in U.S. dollars at Chicago and may be repaid, at such place, at any
time or from time to time in any whole digit multiple of $100,000, prior to
such demand.
(f) Advances and repayments hereunder will be made by wire transfer to
the bank account designated by the borrower and lender, respectively; will
be made on the date on which written notice of the draw is requested; and
will earn interest from such date.
<PAGE>
(g) If payments are not made at the time or times or in the amount or
amounts demanded by the lender, the lender may, at its option and without
notice, declare the entire balance (including accrued interest) due and
immediately payable.
(h) The failure of the lender to accelerate the payments of the borrower
when entitled to do so under this Agreement shall at no time constitute a
waiver of any of its rights under this Agreement.
(i) No promissory notes or documentation other than this Agreement and
the written request contemplated by subsection (b) above shall be required,
and all advances and repayments will be evidenced solely by the respective
entries in the accounting records of the lender, the borrower and their
banks."
SECTION 3. Counterparts; Effectiveness. This Amendment No. 1 may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 4. Governing Law. This Amendment shall be construed in accordance
with and governed by the laws of the State of Illinois.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
FMC Gold Company
/s/ Brian J. Kennedy
By __________________________________
President
Its _________________________________
FMC Corporation
/s/ A. D. Lyons
By __________________________________
Vice President - Finance
Its _________________________________
<PAGE>
EXHIBIT 10.3
FMC GOLD COMPANY
ANNUAL REPORT ON
FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1995
AMENDMENT NO. 2
TO
MANAGEMENT SERVICES AGREEMENT
AGREEMENT, dated as of August 24, 1989, between FMC Gold Company (formerly
known as FMC Nevada Company), a Delaware corporation ("Company") and FMC
Corporation, a Delaware corporation ("FMC").
WHEREAS, Company and FMC have heretofore entered into a Management Services
Agreement dated as of May 2, 1987, and an Amendment No. 1 to Management
Services Agreement dated as of August 1, 1987 (as so amended, the
"Agreement"); and
WHEREAS, Company and FMC desire to amend the Agreement as hereinafter set
forth;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement shall have the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in
the Agreement shall from and after the date hereof refer to the Agreement as
amended hereby.
SECTION 2. Amendment of Section 6 of the Agreement. Section 6 is amended to
read as follows: Amendment of Section 6 of the Agreement. Section 6 is amended
to read as follows:
"6. Extension of Credit
(a) The Company and FMC hereby grant to each other the right to borrow
money from the other, from time to time, subject to the terms and
conditions set forth herein.
(b) The borrower may exercise its right to borrow from the lender from
time to time during the term of this Agreement by requesting in writing
that the lender advance the amount desired and making reference in such
request to this Agreement. Subject to subsection (c), the lender will lend
to the borrower such sums of money as the borrower may specify in its
request.
(c) Draws under this credit facility may be made at any time in any whole
digit multiple of $100,000 provided that, except as set forth in the
following sentence, no draw may be made by the Company or by FMC if, when
such draw is added to previous draws by such party then outstanding, the
aggregate borrowing outstanding by such party pursuant to this Agreement
would exceed $50,000,000. A draw under this credit facility may be made
even if, when added to previous draws outstanding, the aggregate borrowing
outstanding by the drawer would exceed $50,000,000, if the chief financial
officer of the other party (i) determines that the yield on such loan is at
least equal to the yield on other available investments with similar risk
and duration characteristics and (ii) consents in writing to such draw.
(d) All money borrowed under this Agreement shall bear interest, payable
on or before the tenth business day of each month, at a rate equal to FMC's
weighted average rate on its outstanding commercial paper and borrowings
under bank credit facilities during such period, determined in accordance
with generally accepted accounting principles applied in a manner
consistent with those applied by FMC in the preparation of its financial
statements.
<PAGE>
(e) All funds borrowed under this Agreement, together with all interest
accrued thereon, shall be repaid by the borrower, upon demand by the
lender, in U.S. dollars at Chicago and may be repaid, at such place, at any
time or from time to time in any whole digit multiple of $100,000, prior to
such demand.
(f) Advances and repayments hereunder will be made by wire transfer to
the bank account designated by the borrower and lender, respectively; will
be made on the date on which written notice of the draw is requested; and
will earn interest from such date.
(g) If payments are not made at the time or times or in the amount or
amounts demanded by the lender, the lender may, at its option and without
notice, declare the entire balance (including accrued interest) due and
immediately payable.
(h) The failure of the lender to accelerate the payments of the borrower
when entitled to do so under this Agreement shall at no time constitute a
waiver of any of its rights under this Agreement.
(i) No promissory notes or documentation other than this Agreement and
the written request contemplated by subsection (b) above shall be required,
and all advances and repayments will be evidenced solely by the respective
entries in the accounting records of the lender, the borrower and their
banks.
(j) Notwithstanding the provisions of Section 7(e) of this Agreement,
either party may, by giving at least 30 days' prior written notice to the
other, terminate this Section 6 of this Agreement as of December 31, 1989,
or any subsequent December 31."
SECTION 3. Counterparts; Effectiveness. This Amendment No. 2 may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 4. Governing Law. This Amendment shall be construed in accordance
with and governed by the laws of the State of Illinois.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
FMC Gold Company
/s/ Robert N. Burt
By __________________________________
Chairman of the Board
Its _________________________________
FMC Corporation
/s/ A. D. Lyons
By __________________________________
Vice President--Finance
Its _________________________________
<PAGE>
EXHIBIT 21.
FMC GOLD COMPANY
ANNUAL REPORT ON
FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1995
SIGNIFICANT SUBSIDIARIES OF REGISTRANT
<TABLE>
<CAPTION>
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
Meridian Gold Company................................... Montana 100
Minera FMC S.A. de C.V.................................. Mexico 100
Minera FMC Limitada..................................... Chile 100
</TABLE>
<PAGE>
EXHIBIT 23.
FMC GOLD COMPANY
ANNUAL REPORT ON
FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1995
CONSENT OF INDEPENDENT AUDITORS
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 and Registration
No. 33-65327 on Form S-8 of FMC Gold Company and consolidated subsidiaries of
our report dated January 18, 1996, relating to the consolidated balance sheets
of FMC Gold Company and consolidated subsidiaries as of December 31, 1995 and
1994, 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, 1995, which report appears in the December 31, 1995 annual
report on Form 10-K of FMC Gold Company and consolidated subsidiaries.
KPMG Peat Marwick LLP
Chicago, Illinois
March 25, 1996
<PAGE>
Exhibit 24
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, A.L. Lowe 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, 1995, 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 29th day
of February, 1996.
/s/ L.D. Brady
------------------
L.D. Brady
<PAGE>
Exhibit 24
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, A.L. Lowe 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, 1995, 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 29th day
of February, 1996.
/s/ Robert N. Burt
------------------------
Robert N. Burt
<PAGE>
Exhibit 24
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, A.L. Lowe 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, 1995, 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 28th day
of February, 1996.
/s/ E.W. Littlefield
--------------------------
E.W. Littlefield
<PAGE>
Exhibit 24
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, A.L. Lowe 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, 1995, 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 8th day
of February, 1996.
/s/ Nha D. Hoang
------------------
Nha D. Hoang
<PAGE>
Exhibit 24
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, A.L. Lowe 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, 1995, 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 8th day
of February, 1996.
/s/ Paul L. Davies, Jr.
-----------------------------
Paul L. Davies, Jr.
<PAGE>
Exhibit 24
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, A.L. Lowe 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, 1995, 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 8th day
of February, 1996.
/s/ Brian J. Kennedy
--------------------------
Brian J. Kennedy
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the Annual Report on Form 10-K of FMC Gold Company for the year ended December
31, 1995 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-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 80,826<F1>
<SECURITIES> 0
<RECEIVABLES> 5,159
<ALLOWANCES> 300
<INVENTORY> 14,792
<CURRENT-ASSETS> 104,573
<PP&E> 226,149
<DEPRECIATION> 112,157
<TOTAL-ASSETS> 225,177
<CURRENT-LIABILITIES> 20,613
<BONDS> 0
<COMMON> 735
0
0
<OTHER-SE> 193,986
<TOTAL-LIABILITY-AND-EQUITY> 225,177
<SALES> 57,438
<TOTAL-REVENUES> 57,438
<CGS> 51,043
<TOTAL-COSTS> 67,214
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,239)
<INCOME-TAX> (4,512)
<INCOME-CONTINUING> 2,273
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,273
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0
<FN>
<F1> Consists of amounts due on demand from FMC Corporation.
</FN>
</TABLE>
