-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MAONTG2D+N5DOHf+unlyo9XHmUCn7CIs6yZHqomYOZ8bPbwrDsauJN1JGAPfpfgH U/9kZZl3GTmPS7bhYt34Jg== 0000743872-98-000018.txt : 19980626 0000743872-98-000018.hdr.sgml : 19980626 ACCESSION NUMBER: 0000743872-98-000018 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980625 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOMESTAKE MINING CO /DE/ CENTRAL INDEX KEY: 0000743872 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 942934609 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-08736 FILM NUMBER: 98653895 BUSINESS ADDRESS: STREET 1: 650 CALIFORNIA ST STREET 2: 9TH FL CITY: SAN FRANCISCO STATE: CA ZIP: 94108-2788 BUSINESS PHONE: 4159818150 MAIL ADDRESS: STREET 1: 650 CALIFORNIA ST CITY: SAN FRANCISCO STATE: CA ZIP: 94108-2788 11-K 1 LEAD 401K RETIREMENT PLAN UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended December 31, 1997 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN (Full title of Plan) HOMESTAKE MINING COMPANY (Issuer of Securities Held Pursuant to the Plan) 650 California Street San Francisco, California 94108 (Address of principal executive offices) SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustees (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN By /s/ T.H. Wong ---------------------------- T.H. Wong Assistant Treasurer and Assistant Secretary June 25, 1998 Item 1. Financial Statements and Exhibits a. Financial Statements for the years ended December 31, 1997 and 1996 and Supplemental Schedules as of and for the year ended December 31, 1997 and Independent Accountants' Report. b. Exhibit No. 23 Independent Accountants' Consent HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN ------- FINANCIAL STATEMENTS as of December 31, 1997 and 1996 and for the year ended December 31, 1997 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN ------- TABLE OF CONTENTS
Pages ----- Financial Statements: Report of Independent Accountants 2 Statements of Net Assets Available for Benefits as of December 31, 1997 and 1996 3 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1997 4 Notes to Financial Statements 5-12 Supplemental Schedules: Item 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1997 13 Item 27d - Schedule of Reportable Transactions for the year ended December 31, 1997 14
REPORT OF INDEPENDENT ACCOUNTANTS Homestake Mining Company San Francisco, California We have audited the accompanying statements of net assets available for benefits of the Homestake 401(k) Retirement Savings Plan (the Plan) as of December 31, 1997 and 1996, and the related statement of changes in net assets available for benefits for the year ended December 31, 1997. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these 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 an 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 financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1997 and 1996, and the changes in net assets available for benefits for the year ended December 31, 1997, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes as of December 31, 1997 and of reportable transactions for the year then ended are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Coopers & Lybrand L.L.P. - ---------------------------- COOPERS & LYBRAND L.L.P. San Francisco, California June 9, 1998 2 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS as of December 31, 1997 and 1996
ASSETS 1997 1996 - ------ Investments: Homestake Mining Company Stock Fund $ 486,195 $ 468,218 Norwest Advantage Income Equity Fund 2,953,238 1,643,989 Norwest Advantage Growth Balanced Fund 2,921,473 2,200,445 Norwest Stable Return Fund 2,899,304 2,933,565 Norwest Short Term Investment Fund 639,333 446,817 Norwest Advantage Growth Equity Fund 1,595,425 886,643 Participant loans 691,862 533,519 ----------------- --------------- Total investments 12,186,830 9,113,196 LIABILITIES Amounts due brokers for securities purchased - 2,592 ----------------- --------------- Net assets available for benefits $ 12,186,830 $ 9,110,604 ================= ===============
The accompanying notes are an integral part of these financial statements. 3 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS for the year ended December 31, 1997
Additions to net assets attributed to: Interest and dividends $ 274,145 Net appreciation (depreciation) in fair value of investments 1,079,688 ---------------- 1,353,833 ---------------- Contributions: Company, in cash 497,414 Participants, in cash 1,666,150 ---------------- 2,163,564 ---------------- Total additions 3,517,397 ---------------- Deductions from net assets attributed to: Benefits paid to participants 211,217 Transfers out to other plans 229,954 ---------------- Total deductions 441,171 ---------------- Net increase 3,076,226 Net assets available for benefits: Beginning of year 9,110,604 ---------------- End of year $ 12,186,830 ================
The accompanying notes are an integral part of these financial statements. 4 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS ------- 1. Description of Plan: The following description of the Homestake 401(k) Retirement Savings Plan (the Plan) provides only general information. Participants should refer to the full Plan document for a more complete description of the Plan's provisions. General: The Plan is a defined contribution profit sharing plan (designed to be qualified under Internal Revenue Code Sections 401(a) and 401(k)) covering all employees of the Company's mining operations in Lead, South Dakota who are covered by a collective bargaining agreement and have completed three months of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. The Plan is administered by the Company. Effective January 1, 1997, the Plan's trustee, recordkeeper, and investment advisor is Norwest Bank Minnesota, N.A. ("Norwest Bank"). Prior to January 1, 1997, the Plan's trustee, recordkeeper, and investment advisor was Norwest Bank, South Dakota. Contributions: Participation is voluntary. Participants may make pre-tax contributions only of between 1% and 16% of compensation subject to Internal Revenue Code limitations. Participant contributions not exceeding 6% of wages or of salary are matched 35% by the Company. Participants may make a rollover contribution to the Plan of amounts previously contributed to another qualified plan. Rollover contributions are not matched by the Company. Each participant may cause some or all of its current or cumulative contributions, including any amounts contributed by the Company to match contributions, to be invested in one or more of the investments made available through the Plan. 5 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS ------- 1. Description of the Plan, continued: Participants' Accounts: A separate account is maintained for each participant. Each participant's account is directly credited with the participant's contribution and the Company's matching contribution. Net earnings from each investment fund, including appreciation (depreciation) in fair value, are allocated to each participant's account based on the ratio which the participant's account balance in that investment fund bears to the total of all participants' account balances in that investment fund. Vesting: Participant contributions and any income (loss) thereon are fully vested at all times. Company contributions and any income (loss) thereon are vested 60% after three years of service, 80% after four years of service, and 100% after five years of service, on attainment of age 65, or on the occurrence of death or disability. Payment of Benefits: The Plan permits withdrawal of contributions upon: (1) Termination of employment; (2) Attainment of age 59 1/2; (3) Death (with vested account balance paid to designated beneficiary); (4) Hardship. Distribution of benefits can be in the form of single lump-sum cash payments or partial payments made in a lump-sum with the remainder paid later. Participant Loans: Participants may borrow from their vested accounts $1,000 to $50,000 limited to 50% of the value of such accounts. The loan term cannot exceed five years unless the loan is for the purchase of a principal residence, in which case, it cannot exceed ten years. These loans bear interest at prime rate plus 1%. Loans are collateralized by the borrower's vested account in the Plan and repayments are made on at least a monthly basis through payroll deductions. 6 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS ------- 1. Description of the Plan, continued: Forfeitures: Forfeitures of Company contributions made on behalf of former employees whose employment was terminated before such contributions were vested are allocated to active participants at the end of each Plan year. The forfeitures are allocated in proportion to the Company contributions made to the individual participant accounts during the Plan year. 2. Significant Accounting Policies: Basis of Accounting: The financial statements of the Plan are prepared under the accrual basis of accounting in accordance with generally accepted accounting principles. 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 amounts of net assets available for benefits at the date of the financial statements and the reported amounts of changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates. Investment Valuation and Income Recognition: Shares and units in investment funds are valued at quoted market prices, representing the net asset value of the shares or units held by the Plan at year end. Participant loans are valued at cost, which approximates market value. Purchases and sales of securities are recorded on a trade-date basis, utilizing the average cost method in determining the basis of investments sold. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. 7 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS ------- 2. Significant Accounting Policies, continued: Withdrawals: Withdrawals of securities from the Homestake Mining Company Common Stock Fund may be made in cash, common stock, or both, and are reported at market value. Withdrawals from the Norwest Advantage Income Equity Fund, the Norwest Advantage Growth Balanced Fund, the Norwest Stable Return Fund, the Norwest Short Term Investment Fund, and the Norwest Advantage Growth Equity Fund are made in cash. Net Appreciation (Depreciation) in Fair Value of Investments: The Plan presents in the statement of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of its investments, which consists of realized gains (losses) and the unrealized appreciation (depreciation). 3. Risks and Uncertainties: All Plan investments are managed by Norwest Bank. Ultimate Plan performance is dependent upon the ability of Norwest Bank to manage the funds. A portion of the Plan's assets is invested in the Homestake Mining Company Common Stock Fund and is, therefore, subject to fluctuations in the market value of such stock, which is, in turn, impacted by the price of gold. The Plan's assets are invested in collective trust and mutual funds, and other investment securities. Investments are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investments and the level of uncertainty related to changes in the value of such investments, it is possible that changes in the value of one or more of such investments in the near term could materially affect participants' account balances, the amounts reported in the statements of net assets available for Plan benefits, and the statement of changes in net assets available for Plan benefits. 4. Plan Termination: Although the Company has not expressed any intent to do so, it has the right under the Plan and subject to applicable law, to discontinue its contributions at any time and to terminate the Plan. In the event of Plan termination, all accumulated plan benefits will be fully vested and will be distributed to participants based on their respective account balances. 8 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS ----- 5. Plan Tax Status: The Plan obtained its latest determination letter in July 1991, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with Sections 401(a) and 401(k) of the Internal Revenue Code. The Plan has been amended since receiving the determination letter; however, the Plan administrator and the Plan's tax counsel are not aware of circumstances creating a material risk of Plan disqualification. Therefore, no provision for income taxes has been included in the Plan's financial statements. Participants are not subject to federal income taxes on their pre-tax contributions, Company matching contributions, or investment earnings allocated to their accounts until withdrawals are made. 6. Related Party Transactions: Certain Plan investments are units in investment funds managed by the Trustee. Therefore, these transactions are transactions with parties-in-interest. 7. Administrative Expenses: Certain administrative expenses of the Plan are paid for by the Company. 9 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS _______ 8. Investments Investments at December 31, 1997 and 1996 are comprised of the following:
December 31, 1997 ----------------------------------------------------------------- Number of Value Shares or Per Fair Units Held Unit Value Homestake Mining Company Stock Fund 54,783 $ 8.87 $ 486,195 Norwest Advantage Income Equity Fund 79,947 36.94 2,953,238 Norwest Advantage Growth Balanced Fund 113,543 25.73 2,921,473 Norwest Stable Return Fund 115,469 25.11 2,899,304 Norwest Short Term Investment Fund 639,333 1.00 639,333 Norwest Advantage Growth Equity Fund 49,733 32.08 1,595,425 Participant loans - - 691,862 ----------------- $ 12,186,830 ================= December 31, 1996 ----------------------------------------------------------------- Number of Value Shares or Per Fair Units Held Unit Value Homestake Mining Company Stock Fund 40,117 $ 11.67 $ 468,218 Norwest Advantage Income Equity Fund 54,934 29.93 1,643,989 Norwest Advantage Growth Balanced Fund 94,404 23.30 2,200,445 Norwest Stable Return Fund 124,407 23.58 2,933,565 Norwest Short Term Investment Fund 446,817 1.00 446,817 Norwest Advantage Growth Equity Fund 29,800 29.77 886,643 Participant loans - - 533,519 ----------------- $ 9,113,196 =================
10 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS ------- 8. Investments, continued: All earnings on the investment funds are reinvested in and credited to each fund daily. These earnings include interest, dividends, and net appreciation (depreciation) in fair value. The Homestake Mining Company Stock Fund invests in shares of Homestake Mining Company. The Advantage Income Equity Fund's objective is to achieve a high level of current income with moderate appreciation through investment in equity securities. The Advantage Growth Balanced Fund's objective is to maximize growth through appreciation from quality stocks, while moderating risk by investing in intermediate maturity bonds, including corporate, U.S. government and mortgage-backed and related securities. The Stable Return Fund's objective is to achieve reasonable and consistent current income by investing in fixed income securities and other investments. The Short Term Investment Fund consists of short term and floating rate investments. The Advantage Growth Equity Fund invests in U.S. and international equity securities. 9. Subsequent Events: Homestake Mine Due to the restructuring at the Homestake mine on January 27, 1998, the employment of a number of Plan participants was terminated. In accordance with Plan Amendment Number 5, effective January 27, 1998, the vesting percentages of all such Plan participants whose employment was terminated and whose vesting percentages were less than 100% were accelerated to 100% upon termination. Norwest Corporation Merger with Wells Fargo & Company On June 8, 1998 Wells Fargo & Company and Norwest Corporation, the parent company of Norwest Bank, announced their intention to merge by October 1998. Company Matching Contribution Following the May 31, 1998 ratification of a new collective bargaining agreement, the Company's matching contribution will be increased from 35% to 50% of a participant's contributions, not exceeding 6% of wages or of salary, effective January 1, 1999. 11 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS _______ 10. Changes in Net Assets Available for Benefits by Investment Type: During the year ended December 31, 1997, changes in net assets available for benefits are allocated among the Plan's investment funds as follows:
Year Ended December 31, 1997 ---------------------------------------------------------------------------- Norwest Homestake Advantage Norwest Mining Income Advantage Norwest Company Equity Growth Stable Stock Stock Balanced Return Fund Fund Fund Fund Additions to net assets attributed to: Interest and dividends $ 5,501 $ 30 $ 58 $ 183,787 Net appreciation (depreciation) in the fair value of investments (183,959) 576,459 479,135 - Contributions: Company, in cash 12,805 125,635 106,090 87,247 Participants, in cash 49,717 439,070 316,832 316,262 -------------- --------------- --------------- -------------- Total Additions (115,936) 1,141,194 902,115 587,296 -------------- --------------- --------------- -------------- Deductions to net assets attributed to: Benefits paid to participants 4,200 26,977 19,207 29,365 Transfers out to other plans 1,100 75,254 27,373 99,301 -------------- --------------- --------------- -------------- Total Deductions 5,300 102,231 46,580 128,666 -------------- --------------- --------------- -------------- Interfund Transfers 141,805 270,286 (134,507) (492,891) -------------- --------------- --------------- -------------- Net increase (decrease) 20,569 1,309,249 721,028 (34,261) Net assets available for benefits: Beginning of year 465,626 1,643,989 2,200,445 2,933,565 --------------- --------------- --------------- -------------- End of year $486,195 $2,953,238 $2,921,473 $2,899,304 ============== =============== =============== ============== Norwest Advantage Short Term Growth Investment Equity Participant Fund Fund Loans Total Additions to net assets attributed to: Interest and dividends $ 30,510 $ 5 $ 54,254 $ 274,145 Net appreciation (depreciation) in the fair value of investments - 208,053 - 1,079,688 Contributions: Company, in cash 68,431 97,206 - 497,414 Participants, in cash 227,152 317,117 - 1,666,150 -------------- ----------------- --------------- ----------------- Total Additions 326,093 622,381 54,254 3,517,397 -------------- ----------------- --------------- ----------------- Deductions to net assets attributed to: Benefits paid to participants 14,667 9,132 107,669 211,217 Transfers out to other plans 4,943 21,983 - 229,954 -------------- ----------------- --------------- ----------------- Total Deductions 19,610 31,115 107,669 441,171 -------------- ----------------- --------------- ----------------- Interfund Transfers (113,967) 117,516 211,758 - -------------- ----------------- --------------- ----------------- Net increase (decrease) 192,516 708,782 158,343 3,076,226 Net assets available for benefits: Beginning of year 446,817 886,643 533,519 9,110,604 -------------- ----------------- --------------- ----------------- End of year $639,333 $1,595,425 $691,862 $12,186,830 ============= ================= =============== =================
12 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES as of December 31, 1997
(c) Description of Investment (including (b) Identity of Maturity Date, Rate Issuer, Borrower, of Interest, Lessor, or Collateral, Par (e) Current (a) Similar Party or Maturity Value) (d) Cost Value * Norwest Bank Homestake Mining Company Stock Fund (54,783 units) $ 722,916 $ 486,195 * Norwest Bank Norwest Advantage Income Equity Fund (79,947 units) 2,226,016 2,953,238 * Norwest Bank Norwest Advantage Growth Balanced Fund (113,543 units) 2,397,403 2,921,473 * Norwest Bank Norwest Stable Return Fund (115,469 units) 2,361,971 2,899,304 * Norwest Bank Norwest Short Term Investment Fund (639,333 units) 639,333 639,333 * Norwest Bank Norwest Advantage Growth Equity Fund (49,733 units) 1,523,068 1,595,425 * Participant notes (Repayable over five years unless it is for purchase of a principal residence which is repayable over ten years. Rate during 1997 ranged from 7% to 10%.) 691,862 691,862 ------------- -------------- $10,562,569 $12,186,830 ============= ============== * Represents party-in-interest to Plan.
13 HOMESTAKE 401(k) RETIREMENT SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS for the year ended December 31, 1997
(c) Description of Asset (b) Identity of (Include Interest Rate and (d) Purchase (e) Selling (f) Cost (a) Party Involved Maturity in Case of a Loan) Price Price of Asset * Norwest Bank Homestake Mining Company Stock Fund $ 346,397 - - - $200,434 $200,434 * Norwest Bank Advantage Income Equity Fund $1,161,722 - - - $335,753 $252,523 * Norwest Bank Advantage Growth Balanced Fund $ 734,027 - - - $294,632 $232,831 * Norwest Bank Stable Return Fund $ 501,726 - - - $719,666 $592,352 * Norwest Bank Advantage Growth Equity Fund $ 895,587 - - - $234,359 $209,677 * Norwest Bank Short-Term Investment Fund $ 376,309 - - - $184,998 $184,998 (g) Current Value of (h) Net (i) Number (c) Description of Asset Asset on Gain of (b) Identity of (Include Interest Rate and Transaction or Sales/ (a) Party Involved Maturity in Case of a Loan) Date (Loss) Purchases * Norwest Bank Homestake Mining Company Stock Fund $ 346,397 - 64 $ 200,434 - 54 * Norwest Bank Advantage Income Equity Fund $1,161,722 - 92 $ 335,753 $ 83,230 49 * Norwest Bank Advantage Growth Balanced Fund $ 734,027 - 68 $ 294,632 $ 61,801 63 * Norwest Bank Stable Return Fund $ 501,726 - 54 $ 719,666 $127,314 68 * Norwest Bank Advantage Growth Equity Fund $ 895,587 - 78 $ 234,359 $ 24,682 44 * Norwest Bank Short-Term Investment Fund $ 376,309 - 45 $ 184,998 - 49 * Represents party-in-interest to Plan.
14 EX-23 2 CONSENT OF AUDITORS Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in (i) Registration Statement of Homestake Mining Company (333-17357) and (ii) Post-Effective Amendment No. 5 to the Registration Statement of Homestake Mining Company on Form S-8 (File No. 33-32174) of our report dated June 9, 1998, on our audits of the financial statements and financial statement schedules of the Homestake 401(k) Retirement Savings Plan as of December 31, 1997 and 1996 and for the year ended December 31, 1997, which report is included in this Annual Report on Form 11-K. /s/ Coopers & Lybrand L.L.P. - ----------------------------- COOPERS & LYBRAND L.L.P. San Francisco, California June 25, 1998 -----END PRIVACY-ENHANCED MESSAGE-----