Battle Mountain Gold Boosts Reserves, Continues Strong, Low-Cost Operating Performance Despite Loss for 4th Quarter/Year.Business Editors HOUSTON--(BUSINESS WIRE)--Feb. 4, 2000 Battle Mountain Gold Co. (NYSE NYSE See: New York Stock Exchange :BMG BMG Bundesministerium für Gesundheit (Germand: Federal Ministry for Health) BMG Be My Girl BMG Blue Man Group BMG Bertelsmann Music Group BMG Be My Guest BMG Browning Machine Gun BMG Bulk Metallic Glass )(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :BMC (BMC Software, Inc., Houston, TX, www.bmc.com) A leading supplier of software that supports and improves the availability, performance, and recovery of applications in complex computing environments. ) today reported a fourth quarter consolidated net loss of $82 million, or 36 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared with a net loss of $225 million, or 98 cents per share, in the same period last year. For the year 1999, the Company reported consolidated net losses of $127 million, or 55 cents per share, compared with $249 million, or $1.08 per share, in the same period last year. BMG President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , John A. Keyes Keyes is a common surname. It may refer to several notable people:
A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of the Company's remaining carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. in the Crown Jewel Crown jewel A particularly profitable or otherwise particularly valuable corporate unit or asset of a firm. Often used in risk arbitrage. The most desirable entities within a diversified corporation as measured by asset value, earning power, and business prospects; in takeover project; and a $33.3 million, or 14 cents per share, non-cash loss related to the Company's investment in Niugini Mining Limited (NML (language) nML - A specification language for instruction sets, based on attribute grammars, for back-end generators. ["The nML Machine Description Formalism", M. Freericks <mfx@cs.tu-berlin.de> TR TU Berlin, FB20, Bericht 1991/15]. ). The Crown Jewel write-off reflects continuing delays and uncertainties surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. the project, while the NML loss reflects a decrease of 33% in the market value of BMG's interest in Lihir Gold Limited (LGL LGL Legal (paper) LGL Large Granular Lymphocyte LGL Lown-Ganong-Levine Syndrome LGL Bayerischen Landesamtes für Gesundheit und Lebensmittelsicherheit LGL Luxair, Luxembourg (ICAO code) ), as of the date of the merger of NML with LGL. The loss for the year resulted from lower average realized gold prices of $278 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. , compared with $306 per ounce in 1998; the Crown Jewel write-off; and non-cash losses totaling $46.6 million resulting from the changing market value of Lihir. The Company also recorded a $9.5 million environmental remediation Generally, remediation means providing a remedy, so environmental remediation deals with the removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection of human health and the environment or from a charge, which was previously reported, and a $7.7 million reduction in prior year tax assets. These charges were somewhat offset by mostly non-cash foreign currency gains for the year of $8.2 million. Keyes said that despite the losses, the year overall was highlighted by: -- A 9% increase in estimated reserves to approximately 10 million ounces, including a 61% increase in estimated reserves at Phoenix -- Low cash production costs of $164 per ounce -- Strong second-half increases in cash flow -- A 6% increase in production over target -- Identification of significant upside potential Upside potential The amount by which analysts or investors expect the price of a security may increase. upside potential The potential price or gain that may be expected in a security or in a security average, generally stated as the dollar at Holloway Holloway may refer to: Place names:
Llallagua and Vera/Nancy -- And an exciting new exploration discovery in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. Keyes noted that the Company continues to achieve low production costs, with fourth quarter production of 209,000 ounces, at an average cash production cost of $159 per ounce. Attributable gold production for the year was 770,000 ounces. Keyes said that cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses improved significantly during the second half to $28.1 million, compared with $2.6 million for the first six months of 1999. He emphasized that the Company has made significant strides during the year to lower costs, as reflected by sharply diminishing di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , even at lower gold prices. These improvements were clearly reflected in the Company's fourth quarter performance, which was bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. by modestly higher average realized gold prices of $294 per ounce, compared with $272 for the first nine months. Keyes added that the Company's financial position was strengthened during the year by the completion of the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of its loan facility, improved cash flow, and greatly improved liquidity in the Company's interest in Lihir as a result of the recent merger of NML with Lihir Gold. The NML/LGL merger was approved by the Papua New Guinea Papua New Guinea (păp`  ə, –y National
Court of Justice on Feb. 1, effective as of Feb. 2, 2000. The
Company's cash position was $76.3 million at year end, including
$40 million in restricted cash related to the Company's loan
facility, which will be applied against BMG's long-term debt Long-Term DebtLoans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. in 2003. The Company has also implemented a limited number of hedges pursuant to its Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. credit facility. BMG views hedging as a valuable financial tool and will consider limited hedging in the future in order to ensure an adequate return on the Company's capital investments, while maintaining significant exposure to upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside moves in gold prices. Reserves Year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1999 proven and probable contained gold reserves increased to 9.9 million attributable ounces, up about 9% compared with year-end 1998, after deducting production and despite Crown Jewel's removal from the proven and probable category. (Absent the 825,000-ounce Crown Jewel adjustment, reserves would have increased 18% to about 10.8 million ounces). The reserve increase (using a gold price assumption of $325 per ounce, the same as in 1998) excludes Crown Jewel and reflects mineable gold production of 950,000 ounces last year. Reserve additions at Phoenix, which totaled 2.2 million ounces, as well as small additions at Kori Kollo, Holloway and Vera/Nancy, more than offset the changes. Reserves would only decrease 9% and 4% using $275 and $300 gold price assumptions, respectively. A $350 gold price assumption would result in approximately a 4% increase in year-end 1999 reserves.
Proven &Probable Cont. Gold Reserves Dec. 31, 1999 Dec. 31, 1998
(in 000s) BMG Share BMG Share
($325 Au) ($325 Au)
Golden Giant 1,725 2,130
Kori Kollo/Llallagua 1,330 1,410
Holloway 765 825
Vera/Nancy 440 400
Phoenix 5,680 3,515
Crown Jewel 0 825
Total 9,940 9,105
Contained Silver Reserves (000s oz) 49,950 30,980
Other mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. stands at 5.3 million ounces, includes Crown Jewel, and also demonstrates the Company's strong pipeline of largely headframe reserve-growth and development potential currently in hand. Additional Gold Mineralization (000s oz) Phoenix/Battle Mountain Complex 1,500 1,000 Llallagua 1,230 1,230 Crown Jewel 825 -- Holloway 750 300 Vera/Nancy 500 600 Casposo 500 -- Tres Cruces -- 2,000 El Cairo -- 1,250 Total 5,305 6,380 Outlook 2000 Keyes said that targets for the year 2000 include: -- The completion of permitting and engineering at Phoenix and Llallagua -- Strong operating performance, with production of 760,000 ounces -- Low cash operating costs operating costs npl → gastos mpl operacionales of under $175 per ounce -- A further net increase in reserves Development Keyes emphasized the significant progress that is being made at the Phoenix development project. Overall in 1999, the Company added 2.2 million contained ounces of gold at Phoenix, assuming a $325 gold price. The additions lowered the overall strip ratio from 3.7:1 to 2.8:1, decreased mining and milling costs, and increased the anticipated mine life to over 15 years at 300,000 ounces per year, based on an average grade of 0.038 ounces per ton (opt). The Company continues to target cash operating costs of approximately $185 per ounce. Additional upside potential still remains both within the current interim pit design, and elsewhere on the property. The final feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. is expected to be completed early in the second quarter. Permitting for Phoenix is moving ahead with the Bureau of Land Management, and the Company currently hopes to have a draft environmental impact statement by mid-year. In other development activity, in Bolivia Bolivia (bōlĭv`ēə, Span. bōlē`vyä), officially Republic of Bolivia, republic (2005 est. pop. 8,858,000), 424,162 sq mi (1,098,581 sq km), W South America. , work is advancing on the year-long 200,000-ton pilot-plant test of the Llallagua bio-oxidation heap leach leach v. leached, leach·ing, leach·es v.tr. 1. To remove soluble or other constituents from by the action of a percolating liquid. 2. project adjacent to Kori Kollo, which continues to indicate recovery rates in the 70% range are feasible. At the end of 1999, a total of 51,500 tons were undergoing bio-oxidation on four demonstration cells. The plant is currently placing crushed and agglomerated agglomerated of particles, compacted together into a mass. agglomerated feeds particulated feeds compacted or extruded into pellets and similar forms. ore on the cells at the design rate of 550 tons per day and will increase it to 1,100 tons per day late in the first quarter of this year. The project is expected to have low development costs using the existing Kori Kollo infrastructure. A 20-hole program, initiated in November November: see month. , is designed to assess opportunities to significantly impact the size and strip ratio of the deposit. BMG hopes to reach a production decision late in 2000. On Jan. 19, 2000, the Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. Pollution Control Hearings Board (PCHB PCHB Pollution Control Hearings Board PCHB Pre-Charge Half-Buffer ) issued a decision that reversed the water right permits and vacated the Clean Water Act Section 401 Certification for the Crown Jewel mine project. The PCHB stated that it had based its water rights decision mostly on concern that studies predicting the mine's impacts on water quantity, which were prepared by the agencies during the 7-year EIS (1) (Executive Information System) An information system that consolidates and summarizes ongoing transactions within the organization. It provides top management with all the information it requires at all times from internal and external sources. and permitting process, do not provide sufficient certainty to support the Company's streamflow Streamflow, or channel runoff, is the flow of water in streams, rivers, and other channels, and is a major element of the water cycle. It is one component of the runoff of water from the land to waterbodies, the other component being surface runoff. mitigation MITIGATION. To make less rigorous or penal. 2. Crimes are frequently committed under circumstances which are not justifiable nor excusable, yet they show that the offender has been greatly tempted; as, for example, when a starving man steals bread to satisfy plan. The Water Quality Certification was rejected due to similar concerns with water quality studies and mitigation plans. The PCHB also held that the Company's wetlands wetlands, low-lying ecosystem where the water table is always at or near the surface. It is divided into estuarine and freshwater systems, which may be further subdivided by soil type and plant life into bogs, swamps, and marshes. mitigation plan, which was approved not only by Ecology ecology, study of the relationships of organisms to their physical environment and to one another. The study of an individual organism or a single species is termed autecology; the study of groups of organisms is called synecology. , but also by the U.S. Army Corps of Engineers, is not adequate. In light of the ruling, the Company has written-off the remaining carrying value in Crown Jewel and discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: classifying the reserves as proven and probable. The Company is continuing to examine its various options, including appeal. Operations In Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , the Golden Giant mine The Golden Giant Mine was an underground gold mine in the Hemlo mining camp in Canada, located north of Lake Superior, midway between Sault Ste. Marie and Thunder Bay, Ontario near the town of Marathon. performed well during the quarter with higher than plan grades contributing to higher than anticipated production and lower costs. Development work on Block 5 continued and test mining is now complete. Block 5 production will continue in 2000 as a normal part of mine operations. Shaft shaft (shaft) a long slender part, such as the diaphysis of a long bone. shaft n. 1. An elongated rodlike structure, such as the midsection of a long bone. 2. deepening deep·en tr. & intr.v. deep·ened, deep·en·ing, deep·ens To make or become deep or deeper. Noun 1. deepening - a process of becoming deeper and more profound operations are scheduled for completion in mid- mid- pref. Middle: midbrain. 2000. The 88%-owned Kori Kollo mine in Bolivia continued to have good performance and completed the year slightly ahead of plan. Cash operating costs for the year were lower than targeted, largely due to cost-cutting measures implemented earlier in 1999. The 84.65%-owned Holloway mine completed the year with gold production approximately 1,500 ounces over plan, and cash operating costs averaging $198 per ounce, compared with $216 in 1998. Cash operating costs are expected to remain about $200 per ounce at Holloway in 2000. BMG's 50% joint venture interest in the Pajingo complex in Queensland Queensland, state (1991 pop. 2,477,152), 667,000 sq mi (1,727,200 sq km), NE Australia. Brisbane is the capital; other important cities are Gold Coast, Toowoomba, Townsville, Rockhampton, Cairns, and Ipswich. , Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , performed significantly ahead of plan due to the early completion of the mill expansion. BMG's share of total production at the Vera/Nancy mine this year is targeted to be 115,000 ounces at a cash operating cost of $112 per ounce. Exploration Exploration expenditures for the year were in line with target at $16.7 million and are expected to be approximately $11 million in 2000. Efforts this year are being targeted at five priority project areas including Phoenix, Holloway/Blacktop, Llallagua, Vera/Nancy and Casposo. Positive developments for the fourth quarter include significant drill results from the Blacktop project in Canada, Casposo in Argentina, Llallagua in Bolivia, and Phoenix in Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). . Exploration in Canada during the quarter focused on the Holloway area. Drilling continued on the Blacktop deposit, where nine drill holes were completed over a 300-meter strike length. Significant assay results include 0.32 opt/48 ft; 0.22 opt/18 ft; 0.19 opt/7 ft and 0.19 opt/13 ft. The main portion of the mineralized min·er·al·ize v. min·er·al·ized, min·er·al·iz·ing, min·er·al·iz·es v.tr. 1. To convert to a mineral substance; petrify. 2. To transform a metal into a mineral by oxidation. 3. zone remains open to the west and at depth. The exploration program for 2000 is under way, and in addition to Blacktop, work in the immediate Holloway mine area has outlined a number of priority &uot;satellite reserve&uot; opportunities including the 500 XP corridor, the 500 XP Lightning Zone and the Middle Zone. Excellent potential also exists for both Lightning Zone and Contact Zone mineralization within 1,300 ft of the production shaft. Collectively, additional resources in all of these areas currently total approximately 750,000 ounces. All of these zones are potential satellite ore bodies that could be accessed via underground from the Holloway mine and will be the focus of exploration work this year at Holloway. Aside from the Phoenix development work, exploration drilling at the Battle Mountain Complex during 1999 focused on the eastern side of the Copper Canyon The Copper Canyon (Spanish: Barranca del Cobre) is a canyon system in the Sierra Tarahumara in the southwestern part of the state of Chihuahua in Mexico. This canyon system is larger and deeper than the Grand Canyon in the neighboring United States, although the Grand property in the Plumas Plumas may refer to:
Ten holes totaling 4,750 ft were drilled in and adjacent to the Iron Canyon pit. One core hole intersected mineralization assaying 0.306 opt Au (cut)/38 ft within a wider interval grading 0.177 opt Au/69.5 ft. Two other exploration holes assayed 0.114 opt Au/50 ft and 0.69 opt/90 ft. Eleven reverse circulation holes totaling 3,805 ft were drilled to test the Plumas targets, along and west of the Plumas fault. Results are mixed with one hole returning 0.223 opt Au/20 ft at a vertical depth of 220 ft. At Copper Basin to the north of the Phoenix pit, good results were obtained from all six reverse circulation holes drilled in the Surprise and Empire areas. Assays returned from the Surprise target include: 0.147 opt/25 ft, 0.095 opt/30 ft and 0.118 opt/15 ft. Empire area assays include: 0.068 opt/20 ft, 0.188 opt/55 ft, and 0.040 opt/35ft. High copper grades were encountered in one hole at Empire with 1.0% Cu occurring over 120 ft. Follow-up follow-up, n the process of monitoring the progress of a patient after a period of active treatment. follow-up subsequent. follow-up plan drilling is planned for all of these exploration areas in 2000. In Argentina, work focused on the Casposo project. A third phase of drilling was completed bringing the total for the year to 14,000 ft in 26 holes. The drill results continue to expand the mineralization with good gold grades and high silver in all but one of the holes. Significant results from the Kamila Zone include: 0.66 opt Au with 18.06 opt Ag/14 ft; 0.52 opt Au with 10.10 opt Ag/30 ft; 0.29 opt Au with 3.64 opt Ag/65 ft and 0.27 opt Au with 6.75 opt Ag/30 ft. The weakest intercept intercept in mathematical terms the points at which a curve cuts the two axes of a graph. returned 0.06 opt Au with 3.49 opt Ag/40 ft. Mineralization remains open at depth and strike dimensions have yet to be defined. Initial metallurgical met·al·lur·gy n. 1. The science that deals with procedures used in extracting metals from their ores, purifying and alloying metals, and creating useful objects from metals. 2. testing is in progress. Preliminary calculations have outlined a geologic ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. resource containing in excess of 500,000 ounces of gold and 5,000,000 ounces of silver. The fourth round of drilling is ongoing. At Pajingo, work during the quarter focused on completing resource extension drilling at Vera South, updating resource/reserve estimations for Vera/Nancy, and compiling/interpreting data to complete planning for 2000. The eastern and down-dip limits of the mineralization located east of Vera South are still undefined and some additional drilling will be completed during the first quarter of 2000. Vera South drilling resulted in a best drill intercept of 0.53 opt Au/20 ft during the quarter. Resource block models and inferred resource estimates were completed by the Company's operating partner, Normandy Normandy (nôr`məndē), Fr. Normandie (nôrmäNdē`), region and former province, NW France, bordering on the English Channel. , for the Vera South and Veracity veracity (v  ras´itē),n structures in December. Veracity may represent an opportunity to develop a source of medium-grade ore close to the planned development for Vera South. Future drilling is planned. Other Matters The Board of Directors is continuing to consider the matter of nominees for board membership, but did not take action at its regularly scheduled meeting today. The United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a &uot;safe harbor&uot; for certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Operating, exploration and financial data, and other statements in this document, are based on information that the Company believes reasonable, but involve significant uncertainties as to future gold prices, costs, ore grades Ore grade is a measure that describes the concentration of a valuable natural material (such as metals or minerals) in its surrounding ore. Ore grade is used to assess the economic feasibility of a mining operation: the cost of extracting a natural material from its ore is directly , mining and processing conditions, and regulatory and permitting matters. Actual results and timetables could vary significantly from the estimates presented. Also refer to the cautionary statement contained in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and 10-Q for the most recent reporting periods.
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(US$ millions, except per share amounts)
Three months ended Twelve months ended
Dec. 31, Dec. 31,
1999 1998 1999 1998
Sales $ 66.4 $ 59.4 $ 228.2 $ 276.6
Costs and expenses
Production costs 42.5 40.7 151.5 163.3
Depreciation, depletion
and amortization 17.4 17.2 64.2 79.6
Exploration, evaluation & other lease costs, net 3.6 8.5
16.7 24.8
General and administrative
expenses 2.8 3.0 14.1 14.1
Environmental remediation
charge -- -- 9.5 --
Asset write-downs 35.9 194.9 35.9 194.9
Loss related to assets
held for sale 33.3 -- 46.6 --
Total costs and expenses 135.5 264.3 338.5 476.7
Operating loss (69.1) (204.9) (110.3) (200.1)
Interest expense (3.9) (3.9) (15.1) (17.8)
Interest income 0.8 2.0 4.1 10.7
Foreign currency exchange
gain (loss), net 1.3 0.2 8.2 (12.4)
Minority interest in
net loss (income) 0.4 0.8 1.5 (0.5)
Equity in losses of Lihir -- (3.4) -- (7.9)
Other income (expense), net (1.3) 0.3 (0.4) 0.5
Loss before income taxes (71.8) (208.9) (112.0) (227.5)
Income tax benefit (expense) (10.8) (13.2) (7.6) (7.8)
Mining tax benefit (expense) 2.6 (0.6) 0.2 (6.0)
Net loss (80.0) (222.7) (119.4) (241.3)
Preferred dividends 1.9 1.9 7.5 7.5
Net loss to common shares $ (81.9) $(224.6) $(126.9) $(248.8)
Loss per common share -
basic and diluted $ (.36) $ (.98) $ (.55) $ (1.08)
Dividends per common share $ -- $ -- $ -- $ .05
Average common shares
outstanding for basic and
diluted loss per
share purposes 229.9 229.8 229.9 229.8
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(US$ millions)
December 31, December 31,
1999 1998
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 36.3 $ 147.6
Restricted cash -- 7.7
Accounts and notes receivable 12.9 13.8
Product inventories 8.6 8.9
Materials and supplies,
at average cost 22.3 23.4
Assets held for sale 61.7 108.3
Other current assets 7.9 2.7
Total current assets 149.7 312.4
Investments 10.6 19.4
Property, plant and equipment, net 299.6 341.9
Restricted cash 40.0 --
Other assets 6.7 20.4
Total assets $ 506.6 $ 694.1
Liabilities and Shareholders' Equity
Current liabilities
Short-term borrowings $ -- $ 14.9
Current maturities of
long-term debt 2.6 37.0
Debt due upon disposal of
assets held for sale 30.0 --
Accounts payable 15.9 14.3
Income and mining taxes payable 16.6 23.9
Other current liabilities 21.0 12.9
Total current liabilities 86.1 103.0
Long-term debt 176.8 203.6
Deferred income and mining taxes 64.5 72.0
Other liabilities 54.5 50.1
Total liabilities 381.9 428.7
Minority interest 6.0 17.7
Shareholders' equity 118.7 247.7
Total liabilities and
shareholders' equity $ 506.6 $ 694.1
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(US$ millions)
Twelve months ended
Dec. 31,
1999 1998
Cash flows from operating activities
Net loss $(119.4) $(241.3)
Adjustments to reconcile net loss to cash
flows from operating activities:
Depreciation, depletion and amortization 64.2 79.6
Environmental remediation charges 9.5 --
Asset write-downs 35.9 194.9
Loss related to assets held for sale 46.6 --
Deferred income and mining taxes 2.1 (7.1)
Foreign currency exchange loss (gain), net (8.2) 12.4
Equity in losses of Lihir -- 7.9
Change in working capital accounts, net 2.1 21.4
Other, net (4.7) 15.0
Net cash flows provided by operating activities 28.1 82.8
Cash flows from investing activities
Capital expenditures (49.3) (46.5)
Crown Butte liquidating dividend
to minority shareholders (11.0) --
Proceeds from sale of assets 11.9 2.0
New World settlement -- 34.9
Investment in Lihir Gold Limited -- (11.5)
Effects on cash of deconsolidation
of Niugini Mining Limited -- (49.6)
Other, net (0.1) (3.4)
Net cash flows used in investing activities (48.5) (74.1)
Cash flows from financing activities
Debt repayments (31.2) (44.3)
Increase (decrease) in short-term borrowings (14.9) 9.9
Cash dividend payments (7.5) (19.0)
Decrease (increase) in restricted cash (31.7) 10.2
Other, net 0.2 (0.5)
Net cash flows used in financing activities (85.1) (43.7)
Effect of exchange rate changes on cash (5.8) (2.4)
Decrease in cash and cash equivalents (111.3) (37.4)
Cash and cash equivalents at beginning of year 147.6 185.0
Cash and cash equivalents at end of year $ 36.3 $ 147.6
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION - OPERATING DATA (Unaudited) (a)
(Production data reflects BMG attributable interests)
(US$, ounces in thousands)
Three months ended Twelve months ended
Dec. 31, Dec. 31,
1999 1998 1999 1998
GOLDEN GIANT
Gold ounces recovered 98 72 356 366
Silver ounces recovered 6 3 22 26
Cost per Gold Ounce
Produced
Cash production costs $131 $149 $145 $122
Depreciation, depletion
and amortization 65 64 65 66
Reclamation and mine
closure costs 8 4 5 4
Total production costs $204 $217 $215 $192
KORI KOLLO (88% Interest)
Gold ounces recovered 69 75 256 295
Silver ounces recovered 171 202 687 852
Cost per Gold Ounce
Produced (b)
Cash production costs $185 $129 $190 $165
Depreciation, depletion
and amortization 89 117 89 127
Reclamation and mine
closure costs 25 11 15 11
Total production costs $299 $257 $294 $303
HOLLOWAY (84.65% Interest)
Gold ounces recovered 20 21 91 80
Cost per Gold Ounce
Produced
Cash production costs $230 $205 $198 $216
Depreciation, depletion
and amortization 133 115 131 114
Reclamation and mine
closure costs 3 2 2 2
Total production costs $ 366 $ 322 $ 331 $ 332
VERA/NANCY (50% Interest)
Gold ounces recovered 22 12 67 47
Silver ounces recovered 15 11 50 40
Cost per Gold Ounce
Produced
Cash production costs $140 $129 $124 $135
Depreciation, depletion
and amortization 57 37 42 32
Reclamation and mine
closure costs 2 1 2 1
Total production costs $199 $167 $168 $168
OTHER (c)
Gold ounces recovered 19 101
Silver ounces recovered 21 117
Cost per Gold Ounce
Produced
Cash production costs $341 $253
Depreciation, depletion
and amortization 141 103
Total production costs $ 482 $ 356
BATTLE MOUNTAIN GOLD COMPANY
SUPPLEMENTAL INFORMATION - OPERATING DATA (Unaudited) (a)
(Production data reflects BMG attributable interests)
(US$, ounces in thousands)
Three months ended Twelve months ended
Dec. 31, Dec. 31,
1999 1998 1999 1998
AGGREGATE DATA
Gold ounces recovered
- BMG share 209 199 770 889
Gold ounces sold
- BMG share 213 195 771 884
Gold ounces recovered 219 223 806 992
Gold ounces sold 221 218 806 987
Average price per
gold ounce realized $294 $305 $278 $306
Silver ounces recovered
- BMG share 192 236 759 1,034
Silver ounces sold
- BMG share 197 232 759 1,032
Silver ounces recovered 215 270 852 1,187
Silver ounces sold 222 266 853 1,186
Average price per
silver ounce realized $5.28 $4.64 $5.22 $5.50
Weighted Average Cost
per Gold Ounce Produced
Cash production costs $159 $165 $164 $160
Depreciation, depletion
and amortization 79 95 79 94
Reclamation and mine
closure costs 13 6 8 5
Total production costs $ 251 $ 266 $ 251 $ 259
(a) Effective Jan. 1, 1999, current and prior period production
costs are presented on an ounces-produced basis, versus an
ounces-sold basis as previously reported. Cash production costs
are presented in accordance with guidelines established by The
Gold Institute. In addition to mining, milling and plant level
general and administrative expenses, cash production costs
include royalties, freight, smelting costs and allowances, and
production taxes. Credits for by-product silver and copper are
offset against these cash production costs. These guidelines also
provide for reporting on a cost per gold ounce basis, rather than
cost per equivalent gold ounce.
(b) Royalties paid to the Bolivian government for the Kori Kollo mine
are treated as income tax for per ounce cost calculations and are
therefore not included in these cost calculations.
(c) Production data for the Reona mine at the Battle Mountain Complex
is not presented for 1999 because it was placed on care and
maintenance effective Jan. 1, 1999. Data for the Lihir and San
Cristobal mines are not included in 1999 as Battle Mountain Gold
classified the investment in Niugini Mining Limited as an asset
held for sale effective Dec. 31, 1998.
HEDGING DATA(a)
Instruments Volume Price Periods
Puts 50,000 $270 1st Qtr '00 to 4th Qtr '03
100,000 $280 1st Qtr '00 to 4th Qtr '03
100,000 $290 1st Qtr '00 to 4th Qtr '03
100,000 $320 1st Qtr '00 to 4th Qtr '03
Calls 100,000 $335 1st Qtr '00 to 4th Qtr '03
100,000 $340 1st Qtr '00 to 4th Qtr '03
50,000 $352 1st Qtr '00 to 4th Qtr '03
100,000 $370 1st Qtr '00 to 4th Qtr '03
Flat Forwards 100,000 $312 1st Qtr '00 to 4th Qtr '03
25,000 $323 2nd Qtr '00 to 1st Qtr '04
25,000 $329 2nd Qtr '00 to 1st Qtr '04
(a) The puts are the minimum price BMG will receive, while the
offsetting calls, having a higher price, allow BMG to participate
in a rising gold market. All ounces sold through the forwards
will be at the stated prices. There is no lease rate exposure or
margin requirements on these hedges. The above 500,000 ounces are
deliverable over 16 equal periods, and equal about 31,000 ounces
per period, or about 15% of BMG's expected gold production in any
given period, if fully exercised.
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