-----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, DcJS/k/mUXiFcIUa9rFMceACCdOPbVLJ/YURpGzAfOi7znjHwH0bjvWkTUhK8rGc wdF4UGNkp02iQJhz65ifgw== 0000950157-97-000075.txt : 19970225 0000950157-97-000075.hdr.sgml : 19970225 ACCESSION NUMBER: 0000950157-97-000075 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970204 FILED AS OF DATE: 19970204 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: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08736 FILM NUMBER: 97517281 BUSINESS ADDRESS: STREET 1: 650 CALIFORNIA ST-9TH FL STREET 2: 9TH FL CITY: SAN FRANCISCO STATE: CA ZIP: 94108-2788 BUSINESS PHONE: 4159818150 DEF 14A 1 SCHEDULE 14A INFORMATION As filed with the Securities and Exchange Commission on February 3, 1997 =========================================================================== SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [X] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12 HOMESTAKE MINING COMPANY (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and show how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filings: (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: The following is the text of Press Release issued by Homestake on February 3, 1997. HOMESTAKE MINING COMPANY 650 California St. San Francisco, CA 94108 Contact: Gene G. Elam Vice President, Finance and Chief Financial Officer 415-983-8106 Michael A. Steeves Director, Investor Relations 415-983-8169 HOMESTAKE MINING'S MAJORITY OWNED SUBSIDIARY PRIME RESOURCES GROUP REPORTS RESERVE AND MINERALIZED MATERIAL GROWTH OF 27% IN 1996 San Francisco, CA, February 3, 1997-- Homestake Mining Company (NYSE:HM) said today that its 50.6% owned subsidiary, Prime Resources Group Inc. (TSE,VSE:PRU), which owns the Eskay Creek and Snip gold mines in northwestern British Columbia, announced that Prime's 1996 year end ore reserves and geological mineralized material calculations have been completed. As of December 31, 1996 Prime has reserves and geological mineralized material of 2.8 million ounces of gold and 120 million ounces of silver, or 4.4 million ounces of gold equivalent. Over one million ounces of gold equivalent were added to Prime's reserves and mineralized material during 1996 at a cost of approximately US $40 per equivalent ounce, including Snip mine acquisition costs. This includes a 34% increase in proven and probable reserves compared to December 31, 1995, before considering production in 1996. The growth in reserves was the result of the success of the aggressive surface and in-mine exploration programs at Eskay Creek and the acquisition of the 60% of the Snip mine the Company did not already own. The December 31, 1996 reserve and mineralized material calculations include the results of the recently completed underground in-fill drilling programs at both the Snip and Eskay Creek mines. The 1995 exploration program at Eskay Creek identified geological mineralized material containing 364,000 gold equivalent ounces in the NEX and Hangingwall Zones. During 1996, 418,000 gold equivalent ounces in these zones were upgraded to proven and probable reserves. At the Snip mine, all 101,000 ounces of gold that were previously reported as geological mineralized material have now been converted to ore reserves. When asked to comment on 1996's reserve and mineralized material growth, Ronald D. Parker, President and CEO of Prime said: "Two of our key objectives in 1996 were to replace all the reserves we mined and to grow Prime's overall reserve base through exploration and acquisition. Clearly we have met these objectives. Even more significant than the overall improvement in reserves and mineralized material is the fact that all of the growth was in the proven and probable reserve category. Approximately 1.2 million equivalent ounces were added to proven and probable reserves in 1996." DETAILED ORE RESERVES AND GEOLOGICAL MINERALIZED MATERIAL: Consistent with good mining practice, Prime updates its reserve and geological mineralized material estimates in January of each year. The proven and probable ore reserve category reflects estimated tonnage and grades of in-situ deposits the Company believes can be recovered and sold at prices sufficient to cover future costs of production and the Company's investment in the operation. An allowance for mining dilution has been included in the reserve calculations. Geological mineralized material is an estimate of tonnage and grade of a mineral deposit with potential economic merit. Estimates of tonnage and grade are made on the basis of continuity, size, and shape of the mineralization. Estimates include a provision for mining dilution. PROVEN AND PROBABLE ORE RESERVES DECEMBER 31: ESKAY CREEK MINE: 1996 1995 Tons Grade Contained Tons Grade Contained (000) (OPT) Oz(000) (000) (OPT) Oz (000) ======================= ======================== Gold: 1,397 1,732 2,418 1,124 1,875 2,108 Silver: 79.3 110,810 83.4 93,752 SNIP MINE: 1996 1995 Tons Grade Contained Tons Grade Contained (000) (OPT) Oz(000) (000) (OPT) Oz (000) ======================== ======================== Gold: 369 0.722 267 153 0.776 119 Total Gold and Gold Equivalent (1) 4,124 3,445 GEOLOGICAL MINERALIZED MATERIAL, DECEMBER 31: ESKAY CREEK MINE: 1996 1995 Tons Grade Tons Grade (000) (OPT) (000) (OPT) =================== ===================== Gold: 278 0.541 227 0.879 Silver: 31.6 56.2 SNIP MINE: 1996 1995 Tons Grade Tons Grade (000) (OPT) (000) (OPT) =================== ===================== Gold: 19 0.555 58 0.688 Note 1: Silver is converted to gold equivalent using the ratio of the silver market price to gold market price. For the purposes of the reserve calculations, this ratio was 77 ounces of silver equals one ounce of gold for both 1996 and 1995. Prime is a precious metals mining company which owns the Eskay Creek and Snip gold mines located in northwestern British Columbia. Homestake Canada Inc., a wholly owned subsidiary of Homestake Mining Company (San Francisco, NYSE:HM), owns approximately 51% of Prime's shares and has been contracted by Prime to provide exploration management, managerial and administrative services. Homestake Mining Company is an international gold mining company with substantial operations in the U.S., Canada and Australia. Homestake also has active exploration programs in the Andes, Venezuela, French Guiana, Brazil and elsewhere in Latin America, and development and/or evaluation projects in Chile, Russia and Bulgaria. Statements contained in this press release which are not historical facts are forward-looking statements as that item is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Such risks and uncertainties are detailed in the companies' filings with the Securities and Exchange Commission. INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF HOMESTAKE MINING COMPANY AND OTHER REPRESENTATIVES OF HOMESTAKE MINING COMPANY WHO MAY COMMUNICATE WITH HOMESTAKE AND SANTA FE PACIFIC GOLD CORPORATION SHAREHOLDERS The following is information concerning the directors and executive officers of Homestake Mining Company and other representatives of Homestake ("Homestake") who may communicate with Homestake and Santa Fe Pacific Gold Corporation ("Santa Fe") shareholders with respect to (i) Homestake's planned combination with Santa Fe pursuant to which Santa Fe will become a wholly-owned subsidiary of Homestake and each outstanding share of Santa Fe Common Stock, $0.01 par value, will be converted into the right to receive 1.115 shares of Homestake Common Stock, $1.00 par value (the "Combination") and (ii) the proposed offer by Newmont Mining Corporation ("Newmont") disclosed in the preliminary prospectus contained in the Registration Statement on Form S-4 of Newmont that was filed with the Securities and Exchange Commission on January 7, 1997 (Registration No. 333-19335), to exchange each outstanding share of Santa Fe Common Stock for 0.40 of a share of Newmont Common Stock, $1.60 par value. Newmont's proposed offer has not been commenced. Newmont's Registration Statement states that its principal executive offices are located at 1700 Lincoln Street, Denver, Colorado 80203. Santa Fe's principal executive offices are located at 6200 Uptown Boulevard NE, Suite 400, Albuquerque, New Mexico 87110. Directors and Officers of Homestake Name and Business Address Present Position with Homestake or Other Principal Occupation or Employment M. Norman Anderson N Anderson & Associates 502-455 Granville Street Vancouver, V6C1V2 Director, Homestake Mining Company; Former Chairman International Corona Corporation; Mining Industry Consultant. Jan P. Berger Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Treasurer, Homestake Mining Company. Michael L. Carroll Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Director of Taxes and Assistant Secretary, Homestake Mining Company. Robert H. Clark, Jr. 529 Fifth Avenue Suite 1600 New York, NY 10017 Director, Homestake Mining Company; President and Chief Executive Officer, Case, Pomeroy & Company, Inc. Harry M. Conger Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Director and Chairman of the Board,Homestake Mining Company. G. Robert Durham 943 Seddon Cove Way Tampa, FL 33602 Director, Homestake Mining Company; Former Chairman and Chief Executive Officer of Walters Industries, Inc. and Former Chairman and President of Phelps Dodge Corporation. Gene G. Elam Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Vice President, Finance and Chief Financial Officer, Homestake Mining Company. Douglas W. Fuerstenau University of California, Berkeley 477 Evans Hall No. 1760 Berkeley, CA 94720 Director, Homestake Mining Company; Professor in the Graduate School, Department of Materials Science and Mineral Engineering, University of California, Berkeley. Dennis B. Goldstein Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Corporate Counsel and Assistant Secretary, Homestake Mining Company. Lee A. Graber Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Vice President, Corporate Development, Homestake Mining Company. Henry G. Grundstedt P.O. Box 105 Umpqua, OR 97486-0105 Director, Homestake Mining Company; Former Senior Vice President, Capital Guardian Trust. Fred Hewett Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Assistant Controller, Homestake Mining Company. William A. Humphrey Homestake Mining Company 650 California StreetSan Francisco, CA 94108-2788 Director, Vice Chairman of the Board, Former President and Chief Operating Officer, Homestake Mining Company. Robert K. Jaedicke Graduate School of Business Stanford University Stanford, CA 94305-5015 Director, Homestake Mining Company; Professor (Emeritus) of Accounting Graduate School of Business, Stanford University. Wayne Kirk Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Vice President, General Counsel and Corporate Secretary, Homestake Mining Company. Gillyeard J. Leathley Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Vice President, Operations, Homestake Mining Company. William F. Lindqvist Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Vice President, Exploration, Homestake Mining Company. John Neerhout, Jr. 15 Peninsula Road Belvedere, CA 94920 Director, Homestake Mining Company; Former Executive Vice President and Director of Bechtel Group Inc. Ronald D. Parker 1000-700 W. Pender Street Vancouver, BC V6C 168 CANADA Vice President, Canada, Homestake Mining Company. David W. Peat Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Vice President and Controller, Homestake Mining Company. Stuart T. Peeler Casa Codorniz POB 35852 Tucson, AZ 85740 Director, Homestake Mining Company; Petroleum Industry Consultant. Carol A. Rae 13117 N. Creekview Road Rapid City, SD 57702 Director, Homestake Mining Company; Former President and Chief Executive Officer, Magnum Diamond Corporation. Berne A. Schepman The Adair Company 1670 South Amphlett Blvd. Suite 214 San Mateo, CA 94402 Director, Homestake Mining Company; President,The Adair Company and Russian Technology Group. Richard A. Tastula 9th Floor 2 Mill Street Perth, WA 6000 Vice President, Australia, Homestake Mining Company. Jack E. Thompson Homestake Mining Company 650 California StreetSan Francisco, CA 94108-2788 Director, President and Chief Executive Officer, Homestake Mining Company. Thomas H. Wong Homestake Mining Company 650 California Street San Francisco, CA 94108-2788 Assistant Treasurer and Assistant Secretary, Homestake Mining Company. On November 17, 1996, Homestake and Santa Fe entered into a confidentiality agreement pursuant to which, among other things, each party agreed to protect the confidential and proprietary information and data provided to each other in connection with the evaluation of one or more business transactions. On December 8, 1996, Homestake, Santa Fe and HMGLD Corp, a wholly-owned subsidiary of Homestake, entered into an Agreement and Plan of Merger pursuant to which the Combination will be consummated. On January 9, 1997, Homestake purchased 100 shares of Santa Fe common stock. In addition, the following individuals named above own the following shares of Santa Fe common stock, all of which has been owned by such individuals for more than 60 days: Mr. Peeler - 10,300 shares; Mr. Elam - 2,000 shares; and Mr. Graber - 1,000 shares. At the effective time (the "Effective Time") of the Combination, five members of the Homestake Board will continue as directors of Homestake. The other eight members of the Homestake Board will voluntarily resign as directors of Homestake. The Agreement provides that at the Effective Time, Mr. Thompson will become Homestake's Chairman of the Board and Chief Executive Officer. A total of ten Homestake management personnel, including Messrs. Thompson, Elam, Kirk, Leathley and Lindqvist, have severance agreements with Homestake under which they are entitled to receive benefits in the event of a change of control followed by certain events. The Combination is a change of control for purposes of these severance agreements. Under the severance agreements, entitlement to benefits arises if, within three years following the consummation of the Combination, such person's employment is terminated or such person elects to terminate his employment following (i) a reduction in salary or certain benefits, (ii) a change in location of employment, (iii) a change in position, duties, responsibilities or status inconsistent with such person's prior position, or (iv) a reduction in responsibilities, title or office as in effect just before the consummation of the Combination. Benefits consist of (i) a lump sum payment equal to two times such person's highest annual salary and bonus (including deferred compensation) during the three years prior to termination, (ii) continuation of participation in insurance and certain other fringe benefits for two years, (iii) continued vesting of stock options, and (iv) relocation assistance. Such benefits are in lieu of severance benefits otherwise payable under Homestake's general severance policy. The same ten management personnel are also participants in Homestake's Executive Supplemental Retirement Plan (the "Homestake ESRP"). The Homestake ESRP provides that participating employees accrue retirement benefits at the rate of 4 1/3% times years of service up to a maximum of 15 years. Service credit is then multiplied by average monthly compensation during the 36 consecutive months of highest compensation (salary and bonus) to determine a monthly retirement benefit. Benefits are payable on retirement at age 62 after 10 continuous years of service, with provision for early retirement between ages 55 and 62. Within two years following the Combination, if any participant's employment is terminated by Homestake or by the participant for any reason, such participant will fully vest in the maximum benefits payable under the Homestake ESRP to the extent such participant is not already fully vested, and will be entitled to commence receiving such benefits at age 55. Benefits payable under the Homestake ESRP are reduced to the extent of retirement benefits otherwise payable under any other Homestake retirement plan (except the Homestake Mining Company Savings Plan). Homestake has a deferred compensation plan under which 23 eligible employees and the directors are entitled to defer receipt of compensation. Deferred compensation earns interest at rates determined under the plan, with a higher rate equal to 120% of the regular rate (the "Preferred Rate") for persons who have been participants for more than five years. Under the deferred compensation plan, following the Combination, all deferred compensation will earn interest at the Preferred Rate. Other Representatives of Homestake Who May Communicate with Homestake and Santa Fe Shareholders Name and Business Address Present Principal Occupation or Employment Robert A. Pilkington Dillon, Read & Co. Inc. 535 Madison Avenue New York, NY 10022 Managing Director Homestake has retained Dillon, Read & Co. Inc. ("Dillon Read") to act as its financial advisor in connection with the Combination and related matters. Pursuant to an engagement letter dated as of November 21, 1996, between Homestake and Dillon Read, Homestake has agreed to pay Dillon Read a fee of 0.33% of the equity consideration in the Combination, subject to a maximum fee of $6,500,000, for services provided in connection with the Combination. Of this amount, $2,250,000 was paid upon the announcement by Homestake of the execution of the Agreement; the payment of the balance is contingent upon the consummation of the merger. Homestake has also agreed to reimburse Dillon Read for the expenses reasonably incurred by it in connection with its engagement (including reasonable counsel fees) and to indemnify Dillon Read and its officers, directors, employees, agents and controlling persons against certain expenses, losses, claims, damages or liabilities in connection with its services, including those arising under the federal securities laws. This letter is being furnished by Homestake to Homestake and Santa Fe shareholders pursuant to Rule 14a-12 under the Securities Exchange Act of 1934, as amended, in response to the proposed Newmont exchange offer and Newmont's proposed solicitation of proxies. This letter is not being furnished by Santa Fe or its Board of Directors. The following is an updated description of the representatives of Homestake who may communicate with Homestake and Santa Fe shareholders. INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF HOMESTAKE MINING COMPANY AND OTHER REPRESENTATIVES OF HOMESTAKE MINING COMPANY WHO MAY COMMUNICATE WITH HOMESTAKE AND SANTA FE PACIFIC GOLD CORPORATION SHAREHOLDERS The following is information concerning the directors and executive officers of Homestake Mining Company and other representatives of Homestake ("Homestake") who may communicate with Homestake and Santa Fe Pacific Gold Corporation ("Santa Fe") shareholders with respect to (i) Homestake's planned combination with Santa Fe pursuant to which Santa Fe will become a wholly-owned subsidiary of Homestake and each outstanding share of Santa Fe Common Stock, $0.01 par value, will be converted into the right to receive 1.115 shares of Homestake Common Stock, $1.00 par value (the "Combination") and (ii) the proposed offer by Newmont Mining Corporation ("Newmont") disclosed in the preliminary prospectus contained in the Registration Statement on Form S-4 of Newmont that was filed with the Securities and Exchange Commission on January 7, 1997 (Registration No. 333-19335), to exchange each outstanding share of Santa Fe Common Stock for 0.40 of a share of Newmont Common Stock, $1.60 par value. Newmont's proposed offer has not been commenced. Newmont's Registration Statement states that its principal executive offices are located at 1700 Lincoln Street, Denver, Colorado 80203. Santa Fe's principal executive offices are located at 6200 Uptown Boulevard NE, Suite 400, Albuquerque, New Mexico 87110. Directors and Officers of Homestake Present Position with Homestake of Other Name and Business Address Principal Occupation or Employment - ------------------------- ---------------------------------------- M. Norman Anderson............. Director, Homestake Mining Company; Former N Anderson & Associates Chairman International Corona Corporation; 502-455 Granville Street Mining Industry Consultant. Vancouver, V6C1V2 Jan P. Berger.................. Treasurer, Homestake Mining Company. Homestake Mining Company 650 California Street San Francisco, CA 94108- 2788 Michael L. Carroll............. Director of Taxes and Assistant Secretary, Homestake Mining Company Homestake Mining Company. 650 California Street San Francisco, CA 94108- 2788 Robert H. Clark, Jr............ Director, Homestake Mining Company; 529 Fifth Avenue President and Chief Executive Officer, Suite 1600 Case, Pomeroy & Company, Inc. New York, NY 10017 Harry M. Conger................ Director and Chairman of the Board, Homestake Mining Company Homestake Mining Company. 650 California Street San Francisco, CA 94108- 2788 G. Robert Durham............... Director, Homestake Mining Company. 943 Seddon Cove Way Former Chairman and Chief Executive Tampa, FL 33602 Officer of Walters Industries, Inc. and former Chairman and President of Phelps Dodge Corporation. Gene G. Elam................... Vice President, Finance and Chief Homestake Mining Company Financial Officer, Homestake Mining 650 California Street Company. San Francisco, CA 94108- 2788 Douglas W. Fuerstenau.......... Director, Homestake Mining Company; University of California, Professor in the Graduate School, Berkeley Department ofMaterials Science and 477 Evans Hall Mineral Engineering, University of No. 1760 California,Berkeley. Berkeley, CA 94720 Dennis B. Goldstein............ Corporate Counsel and Assistant Homestake Mining Company Secretary, Homestake Mining Company. 650 California Street San Francisco, CA 94108- 2788 Lee A. Graber.................. Vice President, Corporate Development, Homestake Mining Company Homestake Mining Company. 650 California Street San Francisco, CA 94108- 2788 Henry G. Grundstedt............ Director, Homestake Mining Company; P.O. Box 105 Former Senior Vice President, Capital Umpqua, OR 97486-0105 Guardian Trust. Fred Hewett.................... Assistant Controller, Homestake Mining Homestake Mining Company Company. 650 California Street San Francisco, CA 94108- 2788 William A. Humphrey............ Director, Vice Chairman of the Board, Homestake Mining Company Former President and Chief Operating 650 California Street Officer,Homestake Mining Company. San Francisco, CA 94108- 2788 Robert K. Jaedicke............. Director, Homestake Mining Company; Graduate School of Business Professor (Emeritus) of Accounting Stanford University Graduate School of Business, Stanford Stanford, CA 94305-5015 University. Wayne Kirk..................... Vice President, General Counsel and Homestake Mining Company Corporate Secretary, Homestake Mining 650 California Street Company. San Francisco, CA 94108- 2788 Gillyeard J. Leathley.......... Vice President, Operations, Homestake Homestake Mining Company Mining Company. 650 California Street San Francisco, CA 94108- 2788 William F. Lindqvist........... Vice President, Exploration, Homestake Homestake Mining Company Mining Company. 650 California Street San Francisco, CA 94108- 2788 John Neerhout, Jr.............. Director, Homestake Mining Company. 15 Peninsula Road Former Exective Vice President and Belvedere, CA 94920 Director of Bechtel Group Inc. Ronald D. Parker............... Vice President, Canada, Homestake Mining 1000-700 W. Pender Street Company. Vancouver, BC V6C 168 CANADA David W. Peat.................. Vice President and Controller, Homestake Mining Company Homestake Mining Company. 650 California Street San Francisco, CA 94108- 2788 Stuart T. Peeler............... Director, Homestake Mining Company; Casa Codorniz Petroleum Industry Consultant. POB 35852 Tucson, AZ 85740 Carol A. Rae................... Director, Homestake Mining Company; 13117 N. Creekview Road Former President and Chief Executive Rapid City, SD 57702 Officer, Magnum Diamond Corporation. Berne A. Schepman.............. Director, Homestake Mining Company; The Adair Company President, The Adair Company and Russian 1670 South Amphlett Blvd. Technology Group. Suite 214 San Mateo, CA 94402 Richard A. Tastula............. Vice President, Australia, Homestake 9th Floor Mining Company. 2 Mill Street Perth, WA 6000 Jack E. Thompson............... Director, President and Chief Executive Homestake Mining Company Officer, Homestake Mining Company. 650 California Street San Francisco, CA 94108- 2788 Thomas H. Wong................. Assistant Treasurer and Assistant Homestake Mining Company Secretary, Homestake Mining Company. 650 California Street San Francisco, CA 94108- 2788 On November 17, 1996, Homestake and Santa Fe entered into a confidentiality agreement pursuant to which, among other things, each party agreed to protect the confidential and proprietary information and data provided to each other in connection with the evaluation of one or more business transactions. On December 8, 1996, Homestake, Santa Fe and HMGLD Corp, a wholly- owned subsidiary of Homestake, entered into an Agreement and Plan of Merger pursuant to which the Combination will be consummated. On January 9, 1997, Homestake purchased 100 shares of Santa Fe common stock. In addition, the following individuals named above own the following shares of Santa Fe common stock, all of which has been owned by such individuals for more than 60 days: Mr. Peeler - 10,300 shares; Mr. Elam - 2,000 shares; and Mr. Graber - 1,000 shares. At the effective time (the "Effective Time") of the Combination, five members of the Homestake Board will continue as directors of Homestake. The other eight members of the Homestake Board will voluntarily resign as directors of Homestake. The Agreement provides that at the Effective Time, Mr. Thompson will become Homestake's Chairman of the Board and Chief Executive Officer. A total of ten Homestake management personnel, including Messrs. Thompson, Elam, Kirk, Leathley and Lindqvist, have severance agreements with Homestake under which they are entitled to receive benefits in the event of a change of control followed by certain events. The Combination is a change of control for purposes of these severance agreements. Under the severance agreements, entitlement to benefits arises if, within three years following the consummation of the Combination, such person's employment is terminated or such person elects to terminate his employment following (i) a reduction in salary or certain benefits, (ii) a change in location of employment, (iii) a change in position, duties, responsibilities or status inconsistent with such person's prior position, or (iv) a reduction in responsibilities, title or office as in effect just before the consummation of the Combination. Benefits consist of (i) a lump sum payment equal to two times such person's highest annual salary and bonus (including deferred compensation) during the three years prior to termination, (ii) continuation of participation in insurance and certain other fringe benefits for two years, (iii) continued vesting of stock options, and (iv) relocation assistance. Such benefits are in lieu of severance benefits otherwise payable under Homestake's general severance policy. The same ten management personnel are also participants in Homestake's Executive Supplemental Retirement Plan (the "Homestake ESRP"). The Homestake ESRP provides that participating employees accrue retirement benefits at the rate of 4 1/3% times years of service up to a maximum of 15 years. Service credit is then multiplied by average monthly compensation during the 36 consecutive months of highest compensation (salary and bonus) to determine a monthly retirement benefit. Benefits are payable on retirement at age 62 after 10 continuous years of service, with provision for early retirement between ages 55 and 62. Within two years following the Combination, if any participant's employment is terminated by Homestake or by the participant for any reason, such participant will fully vest in the maximum benefits payable under the Homestake ESRP to the extent such participant is not already fully vested, and will be entitled to commence receiving such benefits at age 55. Benefits payable under the Homestake ESRP are reduced to the extent of retirement benefits otherwise payable under any other Homestake retirement plan (except the Homestake Mining Company Savings Plan). Homestake has a deferred compensation plan under which 23 eligible employees and the directors are entitled to defer receipt of compensation. Deferred compensation earns interest at rates determined under the plan, with a higher rate equal to 120% of the regular rate (the "Preferred Rate") for persons who have been participants for more than five years. Under the deferred compensation plan, following the Combination, all deferred compensation will earn interest at the Preferred Rate. Other Representatives of Homestake Who May Communicate with Homestake and Santa Fe Shareholders Present Principal Name and Business Address Occupation or Employment - ------------------------- ------------------------ Robert A. Pilkington........... Managing Director Dillon, Read & Co. Inc. 535 Madison Avenue New York, NY 10022 James C. Katzman............... Vice President Dillon, Read & Co. Inc. 535 Madison Avenue New York, NY 10022 Homestake has retained Dillon, Read & Co. Inc. ("Dillon Read") to act as its financial advisor in connection with the Combination and related matters. Pursuant to an engagement letter dated as of November 21, 1996, between Homestake and Dillon Read, Homestake has agreed to pay Dillon Read a fee of 0.33% of the equity consideration in the Combination, subject to a maximum fee of $6,500,000, for services provided in connection with the Combination. Of this amount, $2,250,000 was paid upon the announcement by Homestake of the execution of the Agreement; the payment of the balance is contingent upon the consummation of the merger. Homestake has also agreed to reimburse Dillon Read for the expenses reasonably incurred by it in connection with its engagement (including reasonable counsel fees) and to indemnify Dillon Read and its officers, directors, employees, agents and controlling persons against certain expenses, losses, claims, damages or liabilities in connection with its services, including those arising under the federal securities laws. In the past, Dillon Read has provided investment banking services to Homestake and has received customary compensation for such services. In the ordinary course of business, Dillon Read trades the securities of Homestake and Santa Fe for its own account and the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities. This information is being furnished by Homestake to Homestake and Santa Fe shareholders pursuant to Rule 14a-12 under the Securities Exchange Act of 1934, as amended, in response to the proposed Newmont exchange offer and Newmont's proposed solicitation of proxies. This information is not being furnished by Santa Fe or its Board of Directors. -----END PRIVACY-ENHANCED MESSAGE-----