For Immediate Release
CONTACT:
Igor Levental
Vice President, Investor Relations
Homestake Mining Company
925-817-1369
HOMESTAKE INCREASES ITS OWNERSHIP OF THE ROUND MOUNTAIN MINE TO 50%
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WALNUT CREEK, CA, JUNE 28, 2000
Homestake Mining Company (NYSE: HM, ASX: HSM, TSE: HCX) and Case Pomeroy & Company, Inc. (OTC: CASPA) today announced that they have agreed to the purchase by Homestake of Case Pomeroy's 25% interest in the Round Mountain gold mine for $42.9 million, including working capital of $3.6 million. The acquisition will increase Homestake's ownership of the mine from 25% to 50%. The transaction will be effected by Homestake purchasing 100% of the shares of Bargold Corporation, a wholly-owned subsidiary of Case Pomeroy, which holds the interest in Round Mountain. Closing of this transaction is expected to take place in July. The purchase price will be settled in the form of 2.6 million common shares of Homestake and cash. The share portion of the payment will be valued on the basis of the average closing price of Homestake stock for the five trading days ending two trading days prior to the closing of this transaction. The cash portion will represent the balance of the payment. Working capital will be subject to adjustment and Case Pomeroy will retain certain receivables.
Upon completion of this transaction, Round Mountain will be Homestake's largest US-based contributor of gold. In 1999, Round Mountain produced a record 541,808 ounces of gold (100% basis) at an average cash cost of $198 per ounce, the lowest in the last five years. Its 1999 year-end proven and probable ore reserves amounted to 320 million tons grading 0.018 ounces per ton or 5.9 million ounces. In addition, Round Mountain had 126 million tons of mineralized material grading 0.016 ounces per ton or two million ounces. Since Round Mountain commenced operations in 1977, it has produced over six million ounces of gold. Located 60 miles north of the town of Tonopah in central Nevada, this major surface mine is one of the largest operations in the world to utilize heap-leach technology.
"This is a strategic acquisition for Homestake," said Jack E. Thompson, Homestake's Chairman and Chief Executive Officer. "It expands our US-based production with ounces from one of the country's best gold mines. We are proud to have been a part of the Round Mountain success for the last 16 years and are looking forward to working with Echo Bay Mines, our joint venture partner, to extend Round Mountain's remarkable track record in the future."
Robert H. Clark, Jr., Chairman, President and Chief Executive Officer of Case Pomeroy said: "Our participation in the Round Mountain mine has been a good long-term business for Case Pomeroy and we have enjoyed our association with Homestake and Echo Bay. J. P. Morgan Securities Inc. acted as our financial advisor and assisted us in the negotiations."
Homestake Mining Company is an international gold mining company with operations and exploration activities in the United States, Canada, Australia and Chile. The company also has active project development program in Argentina. Shares of the company's common stock are listed on the New York Stock Exchange, the Australian Stock Exchange and the Basel, Geneva and Zurich Stock Exchanges in Switzerland. Homestake Canada Inc. Exchangeable Shares are listed on the Toronto Stock Exchange. Homestake began gold mining operations over 120 years ago, and is one of the oldest listed companies on the New York Stock Exchange still in its original business. It has received numerous industry awards for its responsible environmental health and safety management programs.
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