Battle Mountain Gold sees added potential at Vera/Nancy and Holloway; projects 1997 transition phase production.

HOUSTON--(BUSINESS WIRE)--Dec. 4, 1996--Battle Mountain Gold Co. (NYSE:BMG; TSE:BMC) told gold analysts in New York City that recent drilling at the Vera/Nancy deposit, near the Pajingo Complex in Australia, has returned excellent results from a limited number of step-out holes that could significantly increase the previously identified 1 million ounce gold deposit.

Of six recent holes completed at Nancy North, all contained good gold values ranging from 5.92 g/t Au over 11 meters to 18.39 g/t Au over 22 meters. Significant additional drilling will be required to confirm the amount and continuity of any added mineralization before a reserve estimate can be made.

Normandy Mining Ltd. has a 50 percent interest in the project and is operator of the Vera/Nancy mine, which is scheduled to begin initial production in the first quarter of next year.

BMG Chairman Karl E. Elers also told the analysts that the company is encouraged by recent deep drilling at the new Holloway mine in Ontario, in which it holds an 84.65 percent interest. Hole 96-27 intersected 11.6 g/t Au over 2.9 meters in the Lightning Zone horizon some 600 meters below the main ore body. The Lightning Zone is the main producing zone at Holloway.

The significance of the hole is that it indicates the presence of the productive stratigraphy at depth and provides great up-side potential for Holloway, Elers noted. Significant additional drilling will be required to determine the extent of the additional mineralization.

The immediate priority, Elers explained, is the smooth start-up and efficient on-budget operation of the new mine. Teddy Bear Valley Mines Ltd. holds the remaining 15.35 percent interest in the Holloway mine and has a 40 percent interest in the potential deep mineralization.

Looking to 1997, Elers and BMG President Ian Bayer told the analysts that the company is entering a period of transition during which it will phase out three high-cost mines -- San Luis, Silidor and Red Dome; and begin production at two low-cost properties -- Lihir and Vera/Nancy.

Overall, gold production in 1997 is expected to be down about 3 percent from currently projected 1996 levels of about 930,000 ounces; somewhat lower than previously anticipated primarily because of a strategic decision to phase out the three mines earlier than planned, and lower than expected production at the Kori Kollo mine in Bolivia. Efforts are currently focused on improving operating performance at Kori Kollo.

The company is working to lower overall cash production costs for 1997 by 5 to 10 percent, compared with anticipated 1996 aggregate cash costs of approximately $220 per gold ounce sold.

Bayer pointed out that since the merger in July, the new BMG has taken advantage of the opportunity for change by restructuring its exploration efforts, restructuring its 50.4 percent-owned Niugini Mining Ltd., and conducting a zero-based project/property review focusing on core assets. The review work is ongoing but has already resulted in many of the changes noted above.

The new BMG is a substantially improved company, with production growth in the pipeline; higher post merger production and cash flow; competitive costs; a stronger balance sheet; better exploration prospects backed by a $35 million program; a stronger M&A program; strong management synergies, and the critical mass to be a highly competitive international gold producer, he concluded. -0- NOTE: The United States Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. Operating, exploration and other statements and projections in this release are based on information that the company believes reasonable, but involve significant uncertainties as to future gold prices, costs, ore grades, mining and processing conditions, and regulatory and permitting matters.

Actual results and timetables could vary significantly from the estimates presented. Also see Form 10-Q for other cautionary statements.

CONTACT: Battle Mountain Gold Co.

Les Van Dyke, 713/653-7248