HOMESTAKE UPDATES PROGRESS ON ESKAY CREEK AND DEVELOPMENTS AT OTHER GOLD OPERATIONS.

SAN FRANCISCO--(BUSINESS WIRE)--Jan. 11, 1995--Homestake Mining Company reported that all production facilities at the Eskay Creek mine have been commissioned and are fully operational. Initial shipments of crushed ore from the mine in northwestern British Columbia were trucked to the transshipment facility during December and the first shipment to Japan will depart from the port of Stewart, British Columbia this week. The shipment is scheduled to arrive in early February. Homestake expects to sell about 100,000 tons of Eskay Creek ore in 1995 which will result in the production of about 170,000 ounces of gold and about 7.3 million ounces of silver. The Company forecasts cash costs for the first year to average $185 per gold equivalent ounce including smelting costs.

Construction of Eskay Creek's facilities essentially was complete early in the fourth quarter of 1994 ahead of schedule and slightly below the estimated cost of $60 million. Mine development is progressing smoothly despite difficult ground conditions which have been encountered in the higher-grade core of the deposit.

Based upon preliminary December results, Homestake now estimates its 1994 gold production will be 1.7 million ounces. Increased gold production at the Kalgoorlie operations in Australia will not be sufficient to offset production shortfalls in the fourth quarter at certain U. S. properties. At the Homestake mine in South Dakota, difficult ground conditions caused further delays in completing the new air exhaust raise for the underground mine. The contractor now is anticipating the project will be completed early in the second quarter of 1995, postponing a return to normal production levels until that time. At the McLaughlin mine in California, lower than planned ore grade in the South Pit and lower than anticipated grades from the ore stockpile resulted in much lower gold production. Consequently, fourth quarter gold production from both of these operations will be about 154,000 ounces or 15% lower than expected.

The Company has determined that forward sales of a small portion of its gold production may be appropriate in certain limited circumstances. During December 1994, the Company sold for future delivery 183,200 ounces of the gold it expects to produce during the next two years at its Nickel Plate mine in British Columbia. The average price to be received is approximately $412 per ounce, which should cover Nickel Plate's relatively high cash costs during the mine's remaining two-year life. The forward sales also will allow for recovery of the Company's remaining investment in the mine and provide for estimated reclamation costs.

Homestake is one of the largest gold producers in the world with projected 1994 gold production of 1.7 million ounces and cash operating costs that averaged $246 per ounce in the first nine months of 1994. The Company has major gold operations in the United States, Canada and Australia, as well as gold interests in Chile and Mexico.

CONTACT: Homestake Mining

Gene G. Elam, 415/981-8150