HOMESTAKE MINING CO /DE/ (Form: 10-K, Filing Date: 03/28/1996)

Business Address650 CALIFORNIA ST-9TH FLSAN FRANCISCO CA94108-27884159818150

SECURITIES AND EXCHANGE COMMISSION

FORM 10-KAnnual report pursuant to section 13 and 15(d)

Filing Date: 1996-03-28 | Period of Report: 1995-12-31SEC Accession No. 0000743872-96-000008

(HTML Version on secdatabase.com)

FILERHOMESTAKE MINING CO /DE/CIK:743872| IRS No.: 942934609 | State of Incorp.:DE | Fiscal Year End: 1231Type: 10-K | Act: 34 | File No.: 001-08736 | Film No.: 96539455SIC: 1040 Gold and silver ores

Copyright © 2012 www.secdatabase.com. All Rights Reserved.Please Consider the Environment Before Printing This Document

http://www.sec.gov/Archives/edgar/data/0000743872/000074387296000008/0000743872-96-000008-index.htm

http://edgar.secdatabase.com/1352/74387296000008/filing-main.htm

http://www.secdatabase.com/CIK/743872

http://www.secdatabase.com/CIK/743872

http://www.secdatabase.com/FileNumber/108736

http://www.secdatabase.com/SIC/1040

http://www.secdatabase.com

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549FORM 10-K

(Mark One)[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]For the fiscal year ended December 31, 1995

OR[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]For the transition period from ______ to ______

Commission file number 1-8736

HOMESTAKE MINING COMPANY(Exact name of registrant as specified in its charter)

Delaware 94-2934609(State of Incorporation) (I.R.S. Employer

Identification No.)650 California Street

San Francisco, California 94108-2788(Address of principal executive office) (Zip Code)

(415) 981-8150(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange onTitle of each class which registered

Common Stock, $1.00 par value New York Stock Exchange, Inc.Rights to Purchase Series A Participating

Cumulative Preferred Stock New York Stock Exchange, Inc.

Securities registered pursuant to Section 12(g) of the Act:Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports requiredto be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes X No

--- ----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405of Regulation S-K is not contained herein, and will not be contained, to thebest of registrant's knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or any amendment to thisForm 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of theregistrant was approximately $2,549,000,000 as of March 18, 1996.

The number of shares of common stock outstanding as of March 18, 1996 was146,489,575.

Documents Incorporated by Reference:Specified sections of Homestake Mining Company's 1995 Annual Report toShareholders, as described herein, are incorporated by reference in Parts I andII of this Form 10-K. Specified sections of the definitive Proxy Statement forthe 1996 Annual Meeting of Shareholders, which will be filed with the Securitiesand Exchange Commission within 120 days after December 31, 1995, areincorporated by reference in Part III of this Form 10-K.

HOMESTAKE MINING COMPANY AND SUBSIDIARIES

PART I

ITEM - 1 BUSINESS

INTRODUCTION

Homestake is a Delaware corporation organized in 1983 as the parentholding company to a California corporation organized in 1877. In this report,the terms "Homestake" and "Company" refer to Homestake Mining Company and itssubsidiaries.



Homestake is engaged in gold mining and related activities, includingexploration, extraction, processing, refining and reclamation. Gold bullion, theCompany's principal product, is produced in the United States, Canada,Australia, and Chile. Ore and concentrates containing gold and silver from theEskay Creek and Snip mines in Canada are sold directly to smelters.

The results of the Company's operations are affected significantly bythe market price of gold. Gold prices are influenced by numerous factors overwhich the Company has no control, including expectations with respect to therate of inflation, the relative strength of the U.S. dollar and certain othercurrencies, interest rates, global or regional political or economic crises,demand for gold for jewelry and industrial products, and sales by holders andproducers of gold in response to these factors. The supply of gold consists of acombination of new mine production and sales from existing stocks of bullion andfabricated gold held by governments, public and private financial institutions,and individuals.

The Company's general policy is to sell its production at currentprices and not enter into forward sales, derivatives or other hedgingarrangements which establish a price for the sale of its future gold production.As a result, the Company's profitability is exposed to fluctuations in thecurrent price of gold in world markets. However, in certain limitedcircumstances, the Company will enter into forward sales commitments for smallportions of its gold production. In 1994, the Company sold for future delivery183,200 ounces of gold it expected to produce at the Nickel Plate mine during1995 and 1996. These forward sales represented less than 5% of the gold thatHomestake expected to produce during 1995 and 1996. The purpose of this forwardsales program was to allow for recovery of the Company's remaining investment inthe mine and provide for estimated reclamation costs. During 1995, 113,200ounces of gold were delivered or financially settled under this program. AtDecember 31, 1995 forward sales contracts covering 70,000 ounces for delivery in1996 remained outstanding.

Homestake also owns a 16.7% co-tenancy interest in the Main Pass 299offshore sulphur mine and oil deposit in the Gulf of Mexico.

Dollar amounts in this report are in U.S. dollars unless otherwiseindicated.

Effective December 31, 1995 Homestake adopted the "Gold InstituteProduction Cost Standard" for reporting of per ounce production costs. All costper ounce information included in this Form 10-K has been presented on thisbasis (See "GLOSSARY" on page 33).

See note 22 to the consolidated financial statements on pages 42 and 43of the Company's 1995 Annual Report to Shareholders for geographic and segmentinformation. Such information is hereby incorporated by reference.

2

SIGNIFICANT 1995 AND 1996 DEVELOPMENTS

In late 1995 and early 1996, the Company acquired the 18.5% ofHomestake Gold of Australia Limited ("HGAL") it did not already own. Homestakeoffered 0.089 of a Homestake share or A$1.90 in cash for each of the 109,605,000HGAL shares. Homestake expects to issue a total of 8.5 million common shares andexpend $22.3 million in cash in acquiring the 18.5% of HGAL held by minorityshareholders. See note 3 to the Consolidated Financial Statements on page 34 ofthe Annual Report to Shareholders for further details of this transaction.

A positive feasibility study for the Ruby Hill project was completedduring the fourth quarter of 1995. This study indicates that the project willproduce an average of 105,000 ounces of gold per year over its six-year life ata total cash cost of $140 per ounce. Capital requirements, including thepre-stripping of the overlying alluvium, are estimated to be $65 million.Construction of the facilities is anticipated to begin in early 1997 withinitial gold production possible in late 1997.

In December 1995, the Company acquired for $10.4 million, 5.5 millionshares of Orion Resources NL ("Orion"), an Australian public mining company, andoptions to acquire an additional 5 million shares of Orion. After furtherevaluation of the investment opportunity, Homestake sold these shares andoptions in January 1996 for $10.7 million.

In August 1995, an addition to the Fimiston mill at Kalgoorlie, WesternAustralia was commissioned. The addition has replaced the capacity of the Oroyamill, which was dismantled to allow for a planned expansion of the Super Pit,and increased the milling capacity at the Kalgoorlie operations to 33,500tons-per-day ("TPD"). The expected lower unit milling costs resulting from theexpansion will allow for further expansion of the of the Super Pit.



In July 1995, the Company acquired for $24.0 million a 10% interest(fully-diluted) in Navan Resources plc ("Navan"), an Irish public company, andan option to acquire up to 50% of Navan's wholly-owned subsidiary, NavanBulgarian Mining N.V., which owns a 68% interest in Bimak AD ("Bimak"), theowner of the Chelopech gold/copper processing operations located 45 miles eastof Sofia, Bulgaria. Bimak provides mining supervision and has an exclusivecontract to purchase all of the ore mined from the Chelopech mine. In March1996, the Company exercised the option and agreed to advance up to $12.0million, subject to the satisfaction of certain conditions, principally approvalby the Bulgarian government to increase the rate of mining at Chelopech from500,000 to 750,000 tonnes annually and approval of the roaster project forarsenic removal. The Company can acquire 50% of Navan's interest in Bimak byinvesting an additional $36.0 million, which would be used to fund a portion ofthe cost of a proposed expansion to accommodate processing of 1,750,000 tonnesannually.

In June 1995, Homestake exercised an option to acquire 5% of ZolotoMining Ltd. ("Zoloto") for $1.0 million. Zoloto has an exclusive option toacquire a 75% interest in the two million ounce Pokrovskoye gold deposit locatedin the Amur region of eastern Russia by bringing the deposit into production. Afeasibility study completed in March 1996 indicated that the projected economicreturns do not support the cost of the large-scale mining and milling operationsoriginally contemplated for the Prokrovskoye deposit. Homestake has agreed toforego its option and to pay for a revised feasibility study focused on asmaller scale operation. In exchange, Homestake will receive an additional 10%of Zoloto.

In February 1995, the Company sold its 28% equity interest in theTorres silver mining complex for $6.0 million. This sale resulted in a pretaxgain of $2.7 million.

3

In January 1995, commercial production began at the new Eskay Creekmine in British Columbia. During 1995, Eskay Creek sold 104,100 tons of orecontaining 196,500 ounces of gold and 9,945,000 ounces of silver for a total ofapproximately 331,300 gold equivalent ounces. Total cash costs, including thecosts of third-party smelters, were $185 per gold equivalent ounce during 1995.Proven and probable ore reserves totaled 2.1 million contained ounces of goldand 93.8 million contained ounces of silver at December 31, 1995. A recentexploration drilling program at Eskay Creek intersected high-grade gold andsilver mineralization which has the potential to add to the known reserves.Additional exploration drilling is planned in 1996 for this zone. Through itsmajority ownership of Prime Resources Group Inc. ("Prime"), the Company has a50.6% interest in the Eskay Creek mine.

The Company increased its proven and probable gold reserves by 3.5million contained ounces to 21.5 million contained ounces at December 31, 1995compared to 18.0 million contained ounces at December 31, 1994. This increase isnet of 1.9 million ounces produced during 1995. Principal increases, net ofproduction, were 1.9 million ounces at the Kalgoorlie operations (including 1.2million ounces as a result of acquiring the minority interests in HGAL), 1.0million ounces at the Homestake mine, 0.6 million ounces at the Round Mountainmine and 0.7 million ounces at the Ruby Hill project following completion of afeasibility study covering the West Archimedes orebody.

GLOSSARY OF TERMS

See "GLOSSARY" and "INFORMATION ON RESERVES" on pages 33-34 fordefinitions of terms used in the following discussion.

GOLD OPERATIONS

UNITED STATES

Homestake conducts operations at the Homestake mine in the Black Hillsof South Dakota and at the McLaughlin mine in northern California. Homestakealso owns a 25% interest in the Round Mountain mine in central Nevada and ownsor has an interest in three smaller mines in Nevada: the Santa Fe mine (100%),the Pinson mine (26.3%) and the Marigold mine (33.3%). During 1995, with thecompletion of mining, the Santa Fe mine entered the reclamation phase. Homestakealso has a 100% interest in the Ruby Hill project in Nevada. The Company has anexploration office in Reno, Nevada.

Homestake Mine

The 119-year old Homestake gold mine is located in Lawrence County inand near Lead, South Dakota. Homestake owns 100% of the operation.



The Homestake mine properties cover approximately 11,700 acres, ofwhich approximately 8,200 acres are owned in fee and the remainder are held asunpatented mining claims. All mining is conducted on owned property. Pavedpublic roads provide access to the operation.

The Homestake mine is comprised of underground and open-pit (the "OpenCut") mining operations, an ore processing plant, a waste-water treatment plant,and tailings disposal facilities. The underground mine is serviced by two5,000-foot vertical shafts from the surface connecting with internal shaftswhich provide hoisting and services to the 8,000-foot level. Ore fromunderground is hoisted to the surface, crushed and transported to the nearbyprocessing plant. Open Cut ore is crushed and transported more than a mile tothe processing plant by an enclosed conveyor. The 7,400-TPD capacity processing

4

plant recovers gold through a combination of gravity, carbon-in-pulp ("CIP") andvat leaching processes. Recycled process water is pumped through acarbon-in-leach ("CIL") circuit, also contributing to production. The refineryproduces 0.997 fine gold bullion. Process tails are used for underground fill orare deposited in a tailings impoundment facility three miles from the plant. Thecapacity of the tailings impoundment will be adequate through the end of 1996,at which time a new lift will be required. The first phase of a major tailinglift expansion will commence in the fourth quarter of 1996. Facilities andequipment at this operation continue to be upgraded for technological advancesand generally are in good operating condition.

Untreated water for use in the mine's facilities is obtained from localwatersheds under Homestake mine water rights and potable water is purchased fromthe Lead/Deadwood sanitation district. Electric power is purchased undercontract from Black Hills Corporation and is supplemented by Homestake-ownedhydroelectric facilities.

The main ventilation raise for the deeper levels of the undergroundmine, which collapsed in 1994, was replaced in the first quarter of 1995 with a14-foot diameter borehole between the 5,900- and 6,800-foot levels of the mine.This new exhaust raise has increased ventilation and cooling capacity for thedeep mine levels.

Expansion of the Open Cut was completed in 1995.

As mining has progressed into the lower levels of the Homestake mine,the remaining higher-grade ore deposits have become narrower and less continuousand more difficult to mine. The operation continues to develop new miningmethods, including narrow vein mining, uphole mining and bench mining which haveallowed profitable recovery of some previously subeconomic material. The newmining methods have increased productivity. Despite increasingly difficultorebodies, the operation has maintained its current cost structure and increasedreserves.

During 1995, the operation suffered from reduced mill throughput due toprocessing harder than normal ore from the Open Cut. Evaluations were conductedon the crushing and grinding circuit to improve milling rates. During the lastquarter of 1995, increased underground throughput and modifications to the OpenCut and underground crushing plants had returned mill throughput to near normallevels.

During 1995, the operation added nearly one million ounces to itsreserve base, net of 1995 production. This 24% increase primarily is the resultof new mining methods, in-mine exploration, ore reserve definition drilling andreserve revisions resulting from computer-aided modeling techniques.

Hourly employees at the Homestake mine are represented by the UnitedSteelworkers of America. In March 1995, a new labor contract was ratifiedcovering the period through May 1998.

The Homestake mine has received no notices of violation and is under noregulatory orders of any kind mandating specific environmental expenditures.During 1995, the mine operated in compliance with environmental permits.

No royalties are payable on production from the Homestake mine. TheState of South Dakota currently imposes a severance tax of 10% of net profitsfrom the sale of gold produced in the state, plus $4 per ounce of gold sold whenthe price of gold is $499 per ounce or less, increasing by $1 per ounce for each$100 increment or part thereof in excess of $499 per ounce.

5



Geology

The Homestake mine is the largest known iron formation hosted golddeposit. In its 119-year life, the mine has produced in excess of 38 millionounces of gold. The Homestake gold deposit is Proterozoic in age (approximately1.9 billion years). Mineralization is generally stratabound within the HomestakeFormation, which is a quartz-veined, sulfide-rich sedimentary sequence that hasbeen complexly deformed by tight folding, faulting and shearing. Tensoutheast-plunging fold structures, locally called ledges, have produced goldore over a vertical extent of more than 8,000 feet.

Year-end Proven and Probable Ore Reserves<TABLE><CAPTION>

1995 1994------------- -------------

<S> <C> <C>Underground:

Tons of ore (000's) 20,886 15,595Ounces of gold per ton 0.218 0.228Contained ounces of gold (000's) 4,551 3,559

Open Cut:Tons of ore (000's) 5,117 4,787Ounces of gold per ton 0.111 0.121Contained ounces of gold (000's) 568 579

Total:Tons of ore (000's) 26,003 20,382Ounces of gold per ton 0.197 0.203Contained ounces of gold (000's) 5,119 4,138

Operating Data1995 1994

------------- -------------Production Statistics:

Tons of ore mined (000's):Underground 1,461 1,331Open Cut 1,217 1,092

Ore grade mined (oz. gold/ton):Underground 0.219 0.224Open Cut 0.093 0.100

Open Cut stripping ratio (waste:ore) 7.3:1 10.1:1Tons of ore milled (000's) 2,460 2,590Mill feed ore grade (oz. gold/ton) 0.171 0.160Mill recovery (%) 96 95Gold recovered (000 ozs.) 403 394

6

<CAPTION>

<S> <C> <C>Cost per Ounce of Gold:

Cash operating costs $292 $284Other cash costs 11 7Noncash costs 32 31

------------- -------------Total production costs $335 $322

</TABLE>

McLaughlin Mine

The McLaughlin gold mine is located at the junction of Lake, Napa andYolo Counties in northern California. The McLaughlin mine has been in operationsince 1985 and is 100% owned by Homestake.

The McLaughlin mine properties cover approximately 16,200 acres.Approximately 15,100 acres are owned and approximately 950 acres are leased. TheCompany holds seven unpatented mining claims and six millsite claims coveringthe remaining 160 acres. Access to the property is by paved road.

Ore is mined by open-pit methods using a fleet of 85-ton haul trucksand two hydraulic shovels. Ore is crushed, ground and transported by slurrypipelines five miles to the processing site. The processing plant consists oftwo parallel circuits. The primary circuit utilizes pressure oxidation(autoclaves) to treat higher-grade sulfide ores, followed by neutralization and



cyanide leaching. The second circuit uses conventional sulfide flotation.Concentrates produced from flotation are added to the sulfide ores prior totreatment through the autoclaves. Flotation tailings go directly to cyanideleach. Conventional CIP cyanidation with pressure stripping and electrowinningis used to recover gold and silver. Total mill capacity through both circuits isapproximately 6,300 TPD. Tailings are deposited in a tailings impoundment thatwill be adequate through 1996, at which time a new lift is scheduled to be addedto the existing dam at an estimated cost of $2.6 million. The new lift willincrease the impoundment's capacity to allow for the treatment of all but thelowest-grade material in the remaining reserves. A final lift, currentlyscheduled to be added in 1999 at an estimated cost of $2.4 million, will berequired to allow for the processing of all remaining reserves. Facilities aremodern and in good operating condition.

The majority of process water is recycled from the tailings pond.Additional water is obtained from the Company's reservoir in Yolo County, whichhas approximately four years of storage capacity. Electric power is purchasedunder interruptible tariff from Pacific Gas and Electric Company.

In mid-1996, mining will cease and the pressure oxidation circuit willbe shut down. Gold production levels are expected to decline significantly, withfuture production to be derived from the processing of lower-grade stockpiles.During 1996, modifications will be made to the mill circuits to convert thesulfide circuit to conventional direct cyanide leach and increase plant capacityto 6,500 TPD for the processing of stockpiled ore. Processing of the stockpiledore is expected to continue for approximately eight years.

During 1995, the mine operated in compliance with its environmentalpermits.

McLaughlin mine royalties are equivalent to approximately 2% ofrevenues.

7

Geology

The McLaughlin ore body is a structurally-controlled siliceous veinnetwork, overlain by hot-spring terraces (sinter). The mineralization is theproduct of 0.5 to 1.0 million year old geothermal activity, induced by regionalvolcanism. Precious metals were transported in hot-spring fluids andcoprecipitated with quartz, chalcedony and opal in open fractures along andadjacent to a northeast-dipping structure, known as the Stony Creek fault. Theore body is wedge shaped and extends to depths of over 1,000 feet along astrike-length of more than a mile.

Year-end Proven and Probable Reserves<TABLE><CAPTION>

1995 1994-------------- --------------

<S> <C> <C>Open Pit:

Tons of ore (000's) 1,411 5,040Ounces of gold per ton 0.103 0.101Contained ounces of gold (000's) 145 508

Stockpiled: (1)Tons of ore (000's) 17,931 17,024Ounces of gold per ton 0.065 0.068Contained ounces of gold (000's) 1,170 1,157

Total:Tons of ore (000's) 19,342 22,064Ounces of gold per ton 0.068 0.075Contained ounces of gold (000's) 1,315 1,665

<FN>(1) The cost of mining substantially all of the lower-grade ore in the

stockpiles has been expensed.


-------------- --------------Production Statistics:

Tons of ore mined (000's) 2,056 2,667Stripping ratio (waste:ore) 5.9:1 5.6:1Tons of ore milled (000's) 2,296 2,244Mill feed ore grade (oz. gold/ton) 0.120 0.126



Mill recovery (%) 88 87Gold recovered (000 ozs.) 242 250

Cost per Ounce of Gold:Cash operating costs $234 $241Other cash costs 8 8Noncash costs 111 79

-------------- --------------Total production costs $353 $328

</TABLE>

8

Round Mountain Mine

The Round Mountain gold mine is an open-pit mine located in Nye County,Nevada, about 60 miles north of Tonopah. Homestake owns a 25% undivided interestin the mine. Echo Bay Mines Ltd. owns a 50% undivided interest and is theoperator. The remaining 25% interest is owned by Case, Pomeroy & Company, Inc.The mine has been in operation since 1977.

The Round Mountain properties cover approximately 28,362 acres ofprivate property and public domain land, some of which are under patentapplication and the remainder of which are subject to unpatented mining claims.Of the total reserves, 76% are located on the privately-owned land. Paved publicroads provide access to the operations.

Ore from the mine is leached using two methods. The higher-grade ore isprocessed on reusable heap-leach pads and the lower-grade ore is leached on adedicated pad. During 1995, total ore processed averaged 88,687 TPD. Thereusable heap-leach pads processed 22,490 TPD and the balance was processed onthe dedicated pad. The average ore and waste mining rate was 169,236 TPD. Thereusable pad processing facilities consist of a gyratory crusher, anintermediate ore storage and reclaim system, secondary and tertiary conecrushers and screens, and a conveyor system used to transport ore to two asphaltleach pads. The reusable pads have a total capacity of approximately fourmillion tons. A separate 16.4 million square foot dedicated heap-leach pad toprocess uncrushed run-of-mine ore and to reprocess previously leached materialhas a total capacity of 131 million tons. Facilities are in good condition.

Water is supplied from wells on the property and power is purchasedunder contract from Sierra Pacific Power Company.

Homestake's share of total 1995 gold production from the Round Mountainmine was 86,109 ounces compared to 105,877 ounces in 1994. The lower productionis a result of lower ore grades and lower recoveries, partially offset by highertonnage placed on both the reusable and dedicated pads during 1995. Additionalsolution capacity has been designed and should be operational in early 1996.Gold production from gravity treatment of high-grade ores amounted to 3,061ounces (Homestake's share) in 1995 compared to 8,263 in 1994. The operationexpects to recover approximately 2,000 ounces of gold (Homestake's share) fromgravity treatment of high-grade ore in 1996.

Round Mountain ore reserves increased by 2.2 million ounces (100%basis) in 1995 primarily due to exploration drilling which extended the pitlimits, and the inclusion in reserves of stockpiled material which haspreviously been leached, following favorable re-processing tests.

Permitting for the construction of an 8,000-TPD gravity mill to processhigher-grade sulfide ores is proceeding and regulatory approvals are anticipatedby the second quarter of 1996. Final design engineering on the $65 million (100%basis) project is expected to be completed in time to allow construction tobegin in the summer of 1996. Completion of the mill, which is expected in late1997, will result in an additional 50,000 - 75,000 ounces (100% basis) ofincremental annual production.

During 1995, the mine operated in compliance with its permits.

All Round Mountain mine production is subject to royalties determinedby a complex royalty formula based on the price of gold. The royalties rangefrom approximately 3.5% of gold revenues at prices of $320 per ounce of gold orless to approximately 6.4% of gold revenues at prices of $440 per ounce of goldor more. During 1995, the royalties averaged 4.9% of revenues.

9



Geology

The Round Mountain ore body straddles the margin of a volcanic calderacomplex. Gold-bearing hydrothermal fluids were transported along majorstructural conduits created by the volcano's collapse and associated faulting.These ascending fluids deposited gold in permeable zones along a broad northwesttrend. Primary gold mineralization at Round Mountain occurs as electrum, anatural gold/silver alloy, in association with quartz, adularia and pyrite.Narrow fractures in shear zones host higher-grade mineralization while poroussites within the volcanic rocks host the disseminated mineralization. Economicgold mineralization is found in both the volcanic and surrounding sedimentaryrocks as well as overlying alluvial placers. The oblong open-pit mine is wellover a mile at its longest dimension and currently more than 1,000 feet from thehighest working level to the bottom of the pit.

Homestake has a 25% share of the following amounts:

Year-end Proven and Probable Ore Reserves(100% Basis)

<TABLE><CAPTION>

1995 1994-------------- --------------

<S> <C> <C>Tons of ore (000's) 508,820 348,910Ounces of gold per ton 0.020 0.022Contained ounces of gold (000's) 10,000 7,799

Operating Data (100% Basis)1995 1994

-------------- --------------Production Statistics:

Tons of ore mined (000's) 32,723 26,242Stripping ratio (waste:ore) 0.8:1 1.2:1Tons of ore crushed (000's) 7,711 6,629Tons of ore processed (000's) 31,395 25,965Weighted average ore grade

placed on pads (oz. gold/ton) 0.018 0.021Leach recovery - reusable pads (%) 71 79Gold recovered (000 ozs.) 344 424

Homestake's Cost per Ounce of Gold:Cash operating costs $231 $153Other cash costs 23 29Noncash costs 74 61

-------------- --------------Total production costs $328 $243

</TABLE>

Santa Fe Mine

The Santa Fe gold mine is located in Mineral County, Nevada,approximately 40 miles east of Hawthorne. Homestake owns 100% of this operation.The mine commenced operations in 1988.

10

Mining operations at the Santa Fe mine ceased in late 1993 as orereserves were depleted. During 1994, production continued with the leaching ofall four crushed and run-of-mine ore heaps. In 1995, the operations entered areclamation phase with some gold production derived from rinsing of the heaps, aprocess which allows for natural reduction of cyanide levels in the heaps. Therinsing activities were completed during 1995. Based on current estimates, fullprovision for reclamation is included in the December 31, 1995 financialstatements. The mine and its facilities are fully depreciated.

During 1995, the mine operated in compliance with its environmentalpermits.

Operating Data<TABLE><CAPTION>

1995 1994------------- -------------

<S> <C> <C>Production Statistics:

Gold recovered (000 ozs.) 17 22

Cost per Ounce of Gold:Cash operating costs $118 $163



Other cash costs 21 6Noncash costs - 170


</TABLE>

Marigold Mine

The Marigold gold mine is located approximately 40 miles southeast ofWinnemucca, Nevada. Homestake owns an undivided 33.3% interest in the Marigoldproperty. Rayrock Mines, Inc. ("Rayrock") owns the remaining interest and is theoperator. The mine has operated since 1989.

The property consists of approximately 3,920 acres of unpatented miningclaims and 14,920 acres held under leases which remain in effect as long as themine continues production. Access to the property is via a five-mile long gravelroad.

Mining is conducted by conventional open-pit methods. During 1995, themine was converted to a primarily heap-leach operation with intermittent millingoperations. Mill-grade ore will be stockpiled and periodically processed throughthe mill to maximize gold recovery. Mine facilities are in good condition.

Water is supplied from on-site wells and power is purchased from SierraPacific Power Company.

The 1995 exploration program increased the reserves in the area of theknown deposits.

During 1995, the mine operated in compliance with all its environmentalpermits.

Production royalties of 5% of net smelter returns and 3.5% of netprofits were paid to two lease holders.

Homestake's share of production from the Marigold mine was 23,288ounces of gold in 1995 compared to 28,328 ounces in 1994.

11

Geology

Gold resources at the Marigold mine are hosted largely in the PermianAntler formation and the underlying Ordovician Valmy formation, and areassociated with broad bands of silicification and local decalcification. Bothstratigraphy and structure control the geometry of the zones. The ore bodies aresediment-hosted, disseminated deposits of micron-size gold, and are entirelyoxidized.

Homestake has a 33.3% share of the following amounts:


<TABLE><CAPTION>

1995 1994------------- -------------

<S> <C> <C>Tons of ore (000's) 14,585 14,070Ounces of gold per ton 0.036 0.033Contained ounces of gold (000's) 527 459



Tons of ore mined 3,412 2,247Stripping ratio (waste:ore) 2.2:1 3.3:1Tons of ore milled (000's) 440 678Ore grade milled (oz. gold/ton) 0.071 0.097Mill recovery (%) 92 92Tons of ore leached (000's) 2,969 1,616Ore grade leached (oz. gold/ton) 0.022 0.018Gold recovered (000 ozs.) 70 85


------------- -------------



Total production costs $313 $288</TABLE>

Pinson Mine

The Pinson gold mine is located approximately 30 miles northeast ofWinnemucca, Nevada. Homestake owns an undivided 26.3% interest in the Pinsonproperty. Rayrock owns a 26.5% interest and is the operator. The mine hasoperated since 1981.

The Pinson property consists of approximately 22,826 acres of which11,583 acres are held under leases which remain in effect as long as the minecontinues production. The remaining land is comprised of 7,780 acres ofunpatented mining claims and 3,463 acres of primarily fee lands. Access to theproperty is by paved road.

12

Mining is conducted by conventional open-pit methods in severaldifferent areas. Ore is processed by both heap leaching and conventional millingmethods. Total material mined is approximately 30,000 TPD. The 1,500-TPD millutilizes both CIP and CIL methods. In 1995, 83% of total gold production wasfrom ore milled. Low-grade ore is treated by heap leaching. The facilities arein good condition.

Water is supplied from on-site wells and power is purchased from SierraPacific Power Company.

The 1995 exploration program delineated minor ore extensions but didnot identify significant new reserves.


Production royalties of 2.2% of net smelter returns are payable on theprincipal producing areas of the mine. Overall, the underlying propertyownership is complex, requiring special arrangements with respect to thecommingling of ore from various locations.

Homestake's share of production from the Pinson mine was 12,587 ouncesof gold in 1995 compared to 11,817 ounces in 1994.

Geology

The Pinson deposit includes more than six zones of gold mineralizationlargely hosted in carbonate rocks and calcareous siltstones of the OrdovicianConus formation. Ore bodies consist of disseminations of micron-size goldperipheral to faults in favorable stratigraphy. High-grade stringer zones havebeen identified and are the subject of continuing investigation.



<TABLE><CAPTION>

1995 1994------------- -------------




Tons of ore mined (000's) 1,164 968Stripping ratio (waste:ore) 6.0:1 6.6:1Tons of ore milled (000's) 559 562Ore grade milled (oz. gold/ton) 0.088 0.078Mill recovery (%) 79 83Tons of ore leached (000's) 574 379Ore grade leached (oz. gold/ton) 0.027 0.029Gold recovered (000 ozs.) 48 45

13



<CAPTION>

<S> <C> <C>Homestake's Cost per Ounce of Gold:

Cash operating costs $307 $319Other cash costs 15 13Noncash costs 51 44


</TABLE>

Ruby Hill Project

The Ruby Hill project is located one mile northwest of Eureka, Nevada.Homestake acquired a 100% interest in the property in 1992.

The Ruby Hill property consists of approximately 24,831 acres, of which23,386 acres are unpatented mining claims and 1,445 acres are patented miningclaims and fee lands.

Exploration activities have resulted in the discovery of severalmineralized zones. A positive feasibility study on the West Archimedes depositwas completed during the fourth quarter of 1995. This study indicates that themine will produce an average of 105,000 ounces of gold per year over itssix-year life at a total cash cost of $140 per ounce. Capital requirements,including the pre-stripping of the overlying alluvium, are estimated to be $65million.

The proposed operation will utilize conventional open-pit miningmethods. Low-grade ore will be crushed and heap leached. High-grade ore will beground in a ball mill and combined with the crushed low-grade ore in a rotatingagglomeration drum prior to being placed on the leach pad. Preparation of theEnvironmental Impact Study by a third-party contractor, selected by the Bureauof Land Management and Homestake, is well under way. Construction of thefacilities, which is dependent on the receipt of permits, is scheduled to beginin early 1997 with initial gold production possible in late 1997.

Water is available from on-site wells and power is available from MountWheeler Power Company.

A production royalty of 3% of net smelter returns is payable onproduction over 500,000 ounces of gold.

Geology

The West Archimedes gold mineralization is hosted primarily withinbrecciated jasperiod and decalcified limestones of the uppermost Goodwin andAntelope Valley units of the Ordivician Pogonip Group. The micron-size gold isfinely disseminated and the ore body is entirely oxidized. Exploration anddelineation drilling are continuing in the nearby East Archimedes and Achilleszones.


1995-------------

<S> <C>Tons of ore (000's) 7,616Ounces of gold per ton 0.099Contained ounces of gold (000's) 755</TABLE>

14

CANADA

Homestake has a 50% interest in the Williams and David Bell mines inthe Hemlo mining district in Ontario and a 25% net profits interest in theQuarter Claim (adjacent to the David Bell mine). Homestake also owns andoperates the Nickel Plate mine in south central British Columbia and has a 50.6%interest in Prime. Prime owns the Eskay Creek mine and has a 40% interest in theSnip mine, both of which are located in northwestern British Columbia.

The Company conducts exploration and investigates mineral acquisitionand development opportunities throughout Canada. Canadian activities are managedfrom an office in Vancouver, British Columbia.



Eskay Creek Mine

Prime owns 100% of the Eskay Creek gold/silver mine. Through itsinterest in Prime, the Company has a 50.6% interest in the mine. Prime hascontracted with Homestake to provide all necessary professional, managerial, andadministrative services in connection with exploration, development andoperation of the Eskay Creek mine.

The Eskay Creek property consists of five mining leases and variousother mineral and surface rights comprising approximately 3,477 acres located 51air miles north of Stewart, British Columbia. The leases have remaining terms ofapproximately 25 to 29 years, subject to renewal rights. Access from the mainhighway to the mine is by 38 miles of single-lane gravel road. Road maintenanceand snow removal are provided under contract by a local company.

The Eskay Creek mine commenced commercial production in January 1995.The mine is an underground operation accessible through three surface portals.The mine utilizes a drift-and-fill method with cemented rock backfill. Mining isconducted by a mining contractor. Ore is crushed and blended in a facilitylocated at the minesite prior to shipment and sale to third-party smelters forfinal processing. There are no tailings produced at the minesite. Minewaste-rock, which is potentially acid-generating, is disposed of underwater in anearby barren lake. Workers are on a two-week work schedule followed by twoweeks off.

Two long-term ore sale contracts with smelters in Japan and Quebecprovide for combined annual sales of 100,000 tons, with options to increasesales to 130,000 tons, subject to smelter approvals. In addition, a trialshipment of 2,500 tons was made to a third smelter in late 1995. Ore is truckedby a contractor 164 miles to Stewart for shipment to Japan and 224 miles toKitwanga, British Columbia for shipment to Quebec. A dedicated loading facilityfor ships at Stewart handles ore shipments destined for Japan and a loadingfacility is utilized at the railhead in Kitwanga for shipments to Quebec. Primehas a five-year contract with Canadian National Railway to transport ore toQuebec.

Water is supplied from the Eskay and Argillite creeks and power isproduced by on-site diesel generators.

In 1995, the mine shipped 104,100 tons of ore containing 196,500 ouncesof gold and 9,945,000 ounces of silver for a total of approximately 331,300 goldequivalent ounces. During the year, mine development work was accelerated toprovide more production stoping areas. With more mining areas

15

available, the mine is better able to optimize ore blending to maximize smelterreturns. The mine produced approximately 300 TPD in 1995. Based on existingreserves and current production rates, the mine has a projected life of nineyears.

During 1995, exploration drilling at Eskay Creek intersected high-gradegold and silver mineralization which appears to be a stratigraphic extension tothe northeast end of the main 21B ore zone (See "MINERAL EXPLORATION ANDDEVELOPMENT" on page 31 and 32). Additional exploration drilling for this zoneand in the area surrounding the Eskay Creek mine is planned in 1996.


The mine is subject to an effective 1% net smelter royalty, with theexception of a small portion of the ore body, which is subject to a 2% netsmelter royalty.

Geology

The Eskay Creek ore body is a precious metal-enriched volcanogenicmassive sulfide deposit that occurs in association with volcanics of theJurassic-aged (141 to 195 million years) Hazelton Group. Eskay Creekmineralization is generally stratabound and occurs in a contact mudstone andbreccia bounded below a rhyolite flow-dome complex and overlain by volcanicrocks in the west limb of a north-plunging fold. Sphalerite, pyrite, galena andtetrahedrite are the most abundant ore minerals. Native gold occurs as mostlymicroscopic particles located between sulfide grains or in fractures withinsulfide grains, some of which are locked in pyrite. Gold also occurs in volcanicrocks beneath the contact mudstone with visible gold, coarse grained sphalerite,pyrite and galena disseminated in quartz veins or stockwork.




<TABLE><CAPTION>

1995 1994------------- -------------

<S> <C> <C>Tons of ore (000's) 1,124 1,190Ore grade (ounces of gold per ton) 1.875 1.190Contained ounces of gold (000's) 2,108 2,274Ore grade (ounces of silver per ton) 83.4 85.5Contained ounces of silver (000's) 93,752 101,800Contained ounces of gold equivalents (1)(000's) 3,345 3,568

Operating Data1995

-------------Production Statistics:

Tons of ore shipped (000's) 104Ore grade (ounces of gold per ton) 1.989Ore grade (ounces of silver per ton) 100.9Ounces of payable gold (000's) 197Ounces of payable silver (000's) 9,945Total ounces of gold equivalent (1)(000's) 331

16

<CAPTION>

<S> <C>Homestake's Cost per Ounce of Gold Equivalent:

Cash operating costs $182Other cash costs 3Noncash costs 45

-------------Total production costs $230

<FN>(1) Gold and silver are accounted for as co-products at Eskay Creek. Silver

production is converted into gold equivalent, using the ratio of the goldmarket price to the silver market price. The ratio was 73.8 ounces ofsilver equals one ounce of gold equivalent for production in the year endedDecember 31, 1995 and 75.8 ounces and 78.7 ounces of silver equals oneounce of gold equivalent at December 31, 1995 and 1994, respectively.

</TABLE>

Williams Mine

The Williams gold mine is located in the Hemlo Gold Camp 217 miles eastof Thunder Bay, Ontario, adjacent to the Trans Canada Highway. The mine isoperated by Williams Operating Corporation ("WOC") with its own personnel.Homestake and Teck Corporation ("Teck") each own a 50% interest in WOC. The minecommenced operations in 1985.

The property consists of 11 patented mining claims coveringapproximately 400 acres and one Crown mining lease. Homestake and Teck arerequired to provide funds equally to WOC for all costs incurred to operate themine. Homestake and Teck have mutual rights of first refusal over each other'sinterest in the Williams mine and shares of WOC.

The Williams mine is an underground operation which is accessible by a4,300-foot shaft. The mine utilizes the longhole, open-stope mining method withcemented rock backfill. In addition, 500-600 TPD of lower-grade ore is recoveredfrom a nearby open pit. Waste rock from the open pit is used for backfill in theunderground operations. The mine has a 7,000-TPD capacity mill which operated at7,145 TPD during 1995. The Williams and David Bell mines share one tailingsbasin facility located approximately two miles from the mill. Cyanidation andthe CIP process are used to recover gold. Water from the tailings basin istreated during the summer months in an effluent treatment plant prior todischarge. Both mines recycle mill make-up water from the tailings pond. Thefacilities and equipment are modern and in good condition.

Fresh water for the property is supplied from Cedar Creek and power ispurchased from Ontario Hydro via a long-term contract. Propane for heating mineair and surface facilities is also purchased under long-term contracts.

Following the installation of new crushing and ventilation systems in



1994, mining between the 9,065 and 9,240 levels commenced. The 9,175 and 9,450levels provided access for exploration drifting and diamond drilling during theyear. Approximately 60% of the ounces mined in 1995 were replaced by additionsto ore reserves, at a lower grade than the ore mined.

The mine will continue to operate at the average ore reserve grade forthe remaining life of the operation.

During 1995, the mine operated in compliance with all its environmentalpermits. Progressive reclamation projects are ongoing.

17

The 11 patented mining claims are subject to three net smelterroyalties totaling a net effective rate of 2.08% and the Crown mining lease issubject to a net smelter royalty of 0.75%.

Homestake's share of production was 202,561 ounces in 1995 compared to222,660 ounces in 1994.

Geology

The Hemlo Gold Camp occurs within the east-west striking Heron Bay beltof metamorphosed Archean aged rocks (3.5 billion years). The steeply dipping orebodies lie along the contact between overlying metasedimentary rocks andunderlying volcanic rocks. Gold mineralization is hosted primarily by a finegrained feldspar porphyry unit associated with pyrite, barite and molybdenum.



<TABLE><CAPTION>

1995 1994------------- -------------




Tons of ore milled (000's) 2,608 2,538Mill feed ore grade (oz. gold/ton) 0.163 0.184Mill recovery (%) 95 95Gold recovered (000's ozs.) 405 445



</TABLE>

David Bell Mine

The David Bell gold mine is located in the Hemlo Gold Camp. The mine isoperated by the Teck-Corona Operating Corporation ("TCOC") with its ownpersonnel. Homestake and Teck each own a 50% interest in TCOC. The minecommenced operations in 1985.

The mine is located on the same ore trend as the Williams mine. Theproperty consists of approximately 650 acres held under two freehold patents.Homestake and Teck are required to provide funds equally to TCOC for all costsincurred to operate the mine. Homestake and Teck have mutual rights of firstrefusal over each other's interest in the David Bell mine and shares of TCOC.

18

The David Bell mine is an underground operation which is accessible by



a 3,819-foot shaft. Production is from stopes using longhole mining methods,with cement, tailings, sand and waste rock utilized as backfill. Mill throughputwas approximately 1,333 TPD in 1995. Cyanidation and the CIP process are used torecover gold. The facilities and equipment are modern and in good condition.

Water and power supplies are the same as those at the Williams mine.Treated reclaimed process water is used to service the underground operations.

C-zone development and the construction of the related infrastructurewas completed during 1995 and production commenced in August. The average widthof ore at the David Bell mine is decreasing as mining progresses away from thecentral core of the ore body. In an effort to optimize ore extraction and tominimize development costs, stoping of narrow-width ore by longitudinal longholeretreat continued during the year. Gold production decreased in 1995 as a resultof lower ore grades and recoveries and reduced mill throughput.

Approximately 66% of the ounces mined in 1995 were replaced throughreserve additions. Homestake and Teck each have a 50% interest in efforts toexplore and develop mineral properties within approximately two miles of theDavid Bell property.

The collective bargaining agreement with the United Steel Workers ofAmerica expired in October 1995 and negotiations on a new contract are ongoing.


The property is subject to a 3% net smelter return royalty.

Homestake's share of production at the David Bell mine was 79,383ounces in 1995 compared with 96,109 ounces in 1994.

Geology

See "Williams Mine - Geology."



<TABLE><CAPTION>

1995 1994------------- -------------


19

Operating Data (100% Basis)<CAPTION>

1995 1994------------- -------------


Tons of ore milled (000's) 487 512Mill feed ore grade (oz. gold/ton) 0.347 0.399Mill recovery (%) 94 94Gold recovered (000 ozs.) 159 192



</TABLE>

Quarter Claim

The Quarter Claim constitutes approximately one-fourth of a miningclaim, which was originally part of the David Bell property, and was optioned toand subsequently acquired by Hemlo Gold Mines Inc. ("Hemlo Gold") in 1982. HemloGold developed a shaft on the Quarter Claim and reserved hoisting and millingcapacity of 500 TPD at its mill to process any ore found on the Quarter Claim.Homestake has a 25% net profits interest in all ore recovered from the QuarterClaim. In 1995, the net profits interest agreement was amended. The amended net



profits interest is based on a deemed production rate, deemed production costsand the market price of gold. The deemed production rate is based upon a minimumcommitted throughput of 500 TPD multiplied by: (a) the average ore grade of theremaining Quarter Claim reserves; (b) a recovery factor and; (c) 95%.

Homestake's share of production at the Quarter Claim was 7,140 ouncesin 1995 compared with 7,745 ounces in 1994.

Geology

See "Williams Mine - Geology."



<TABLE><CAPTION>

1995 1994------------- -------------


20

Operating Data (100% Basis)<CAPTION>

1995 1994------------- -------------


Tons of ore milled (000's) 115 114Mill feed ore grade (oz. gold/ton) 0.257 0.281Mill recovery (%) 96 97Gold recovered (000 ozs.) 29 31

Homestake's Cost per Ounce of Gold:Cash operating costs $155 $165Other cash costs 12 12Noncash costs 1 -


</TABLE>

Nickel Plate Mine

The Nickel Plate gold mine, located near Hedley, British Columbia, isowned 100% by Homestake. The mine was an underground gold mine prior to 1930 andfrom 1934 to 1955. Current operations began in 1987.

The property is comprised of 111 Crown-granted claims, six revertedCrown-granted claims, two mining leases, 26 mineral claims and certain surfacerights, covering approximately 8,077 acres. A 30-mile paved road from Penticton,British Columbia, provides access to the site.

Mining is carried out by conventional open-pit methods. Ore isprocessed in a 4,000-TPD mill. Mill processing comprises crushing, grinding,cyanidation and Merrill Crowe gold recovery. The Inco sulphur dioxide process isused to reduce cyanide concentrations in the tailings pond. The facilities andequipment are modern and in good condition.

The majority of the mine's process water is obtained from the tailingsimpoundment basin. Fresh water make-up is supplied from Cahill Creek duringspring run-off and stored in a process water pond. Power is supplied by WestKootenay Power under an annually renewable contract.

The ore reserve at the Nickel Plate mine will be depleted by the end ofthe third quarter of 1996. Reclamation of the property, in accordance with aplan filed with British Columbia's regulatory agencies, is in process.


Geology

The Nickel Plate ore body is situated within the rocks of theJurassic-aged Hedley Formation consisting of thinly bedded calcareous siltstones



and layered to massive limestone units dipping northwest at 20 to 30 degrees.The formation is intruded by Early Jurassic, coarse-grained porphyritic diorite.A large hydrothermal system was associated with the diorite intrusions.Gold-bearing sulfides (pyrrhotite,

21

pyrite and chalcopyrite) were emplaced during the last phase of thishydrothermal process. Higher grades are associated with the contacts of thediorite dikes and sills and the Hedley formation and are confined to the skarnzone.


1995 1994------------- -------------

<S> <C> <C>Tons of ore (000's) 940 2,889Ounces of gold per ton 0.079 0.077Contained ounces of gold (000's) 74 223



Tons of ore milled (000's) 1,464 1,438Mill feed ore grade (oz. gold/ton) 0.077 0.070Mill recovery (%) 81 81Gold recovered (000 ozs.) 91 82

Cost per Ounce of Gold:Cash operating costs $379 $349Other cash costs - -Noncash costs 56 54


</TABLE>

Snip Mine

The Snip gold mine is located at the junction of Bronson Creek and theIskut River, 56 air miles north of Stewart in northwestern British Columbia. Themine is 40% owned by Prime. Cominco Ltd. ("Cominco") owns the remaining interestand is the operator. Cominco receives a management fee for its services asoperator equivalent to 5% of cash expenditures made at the property. The minecommenced operations in 1991.

The property consists of a mining lease issued to Cominco for a term of30 years, together with three mineral claims also recorded in the name ofCominco covering approximately 3,637 acres.

The mine is serviced by aircraft which utilize the mine's 4,500-footlong landing strip. In addition, a hovercraft transports mine concentrates, fueland other supplies along the Iskut and Stikine rivers between the mine andWrangell, Alaska from late March to early November each year. During the wintermonths, access is by aircraft due to ice accumulations on the rivers.

The Snip mine is an underground operation serviced by three adits and ahaulageway at the 400-foot level. Mining is carried out through a combination ofshrinkage, conventional and mechanized cut and fill. Backfill is eitherunderground waste rock or mill tailings which are pumped to the mine and mixedwith cement. The mill has a capacity of 500 TPD. Approximately 91% of the goldcontained in the ore is recovered. A gravity circuit recovers about 33% of thegold and the remaining gold is recovered in

22

flotation concentrates containing approximately ten ounces of gold per ton. Theconcentrates are sold to a third-party facility located near Stewart for finalgold recovery. Mill tailings are deposited in a pond close to the mine andreclaimed water is pumped back to the mill for reuse. The facilities andequipment are modern and in good condition. Workers are on a four-week workschedule followed by two weeks off.

Water is supplied from Bronson Creek and power is produced on-site bydiesel generators.



Exploration diamond drilling on the Twin West zone completed in 1995provided sufficient encouragement to proceed with an underground developmentprogram to allow for further exploration drilling in 1996.

During 1995, the mine operated in compliance with all its environmentalpermits. There has been controversy regarding the environmental impact of themine's hovercraft operations on fish in the Iskut river. Cominco and the Companyhave agreed to further studies despite prior investigations indicating littleenvironmental impact.

Homestake's share of gold production in 1995 was 51,310 ounces comparedto 51,592 ounces in 1994.

Geology

The main ore body at the Snip mine is called the Twin Zone, a 1.5 to 50feet thick quartz-carbonate-sulfide-filled shear structure within a Triassicsedimentary unit. Gold primarily occurs as finely disseminated grains alongpyrite grain boundaries. Other sulfides within the Twin Zone include pyrrhotite,chalcopyrite and sphalerite, with trace arsenopyrite. The vein structure hasbeen traced over a strike length of 3,300 feet and has a known vertical extentto 1,650 feet.

Prime has a 40% share of the following amounts:


<TABLE><CAPTION>

1995 1994------------- -------------

<S> <C> <C>Tons of ore (000's) 383 553Ounces of gold per ton 0.776 0.797Contained ounces of gold (000's) 297 441



Tons of ore milled (000's) 187 190Mill feed ore grade (oz. gold/ton) 0.751 0.743Mill recovery (%) 91 92Gold recovered (1) (000 ozs.) 128 129

23

<CAPTION><S> <C> <C>Homestake's Cost per Ounce of Gold:

Cash operating costs $175 $173Other cash costs - -Noncash costs 56 59


<FN>(1) Includes recoverable gold contained in dore and in concentrates.

</TABLE>

AUSTRALIA

In late 1995 and early 1996, Homestake acquired the 18.5% of HGAL thatit did not already own (See "SIGNIFICANT 1995 AND 1996 DEVELOPMENTS" on page 3).HGAL is a gold mining and exploration company whose principal asset is a 50%ownership in Australia's largest gold mining operation, the consolidated surfaceand underground gold operations at Kalgoorlie, Western Australia.

HGAL explores for gold in Australia and has offices in Perth andKalgoorlie, Western Australia.

Kalgoorlie Operations

The Kalgoorlie operations are located 340 miles northeast of Perth,Western Australia on 164 state leases and licenses covering approximately 30,000acres adjacent to the town of Kalgoorlie. The mineral leases are renewable on anannual basis for a fee to the state. Homestake acquired its interest in theoriginal Kalgoorlie Mining Associates joint venture in 1976. Mining operations



in the Kalgoorlie region date back to 1893. Access to the operations is by pavedroad.

HGAL owns a 50% interest in three joint ventures in the Kalgoorliedistrict: the Fimiston/Paringa Venture ("FPV"), the Mt Percy Venture and theKalgoorlie Mining Associates Venture. Gold Mines of Kalgoorlie Limited and itsaffiliates ("GMK") own the other 50% interest. HGAL and GMK formed KalgoorlieConsolidated Gold Mines Pty Ltd ("KCGM"), a jointly-owned and controlledcompany, to manage all the operations on a consolidated basis under thedirection of a management committee.

Mines operated by KCGM include the Super Pit open-pit gold mine and theMt. Charlotte underground gold mine. Ore from both of these operations istreated at the Fimiston mill, the primary milling facility at Kalgoorlie. Inaddition, ore also is processed at two smaller facilities, the Mt Percy andCroesus mills. Sulfide concentrates produced at the Fimiston and Croesus millsare roasted at the Gidji roaster, located 12 miles north of the main Kalgoorlieoperations, prior to final processing at the Fimiston mill. The facilities andequipment at the Kalgoorlie operations generally are in good condition.

HGAL pays 50% of the costs and is entitled to receive 50% of theproduction from all operations, except for the FPV area of the Super Pit whereHGAL pays 50% of venture costs but may not receive 50% of the production. Undercertain circumstances, GMK is entitled to receive more than 50% of goldproduction out of the first 35.8 million tons of ore mined by open-pit methodsfrom the FPV area of the Super Pit. The disproportionate quantity of gold to bereceived by GMK depends upon capital and production costs, gold prices andlevels of production from the FPV area. In 1995, HGAL paid to GMK 12,966 ouncesunder the Disproportionate Sharing Arrangement ("DSA") compared to 15,781 ouncesin 1994. Through the end of 1995, approximately 18.7 million tons of ore havebeen mined from the FPV

24

area of the Super Pit. See "LEGAL PROCEEDINGS" on page 42 for a description of alegal action commenced by GMK against Homestake in respect of the calculation ofounces payable to GMK under the DSA.

Contractors are employed to conduct surface mining operations, ore andconcentrate haulage and some specialized services. Fresh water is supplied underallocation from the state water system and is piped 350 miles from Perth. Saltwater is taken from bores and underground mines. Power currently is purchasedunder a number of agreements with the state power authority. KCGM is negotiatinga new power agreement with Normandy Power, a company associated with GMK.

In 1995, the Gidji roaster performed well within sulphur dioxideemission limits established by the Western Australian government. Interceptdrainage channels were constructed in 1994 to isolate the Oroya tailings damfrom the nearby salt water drainage channel. The installation of a conveyor totransport the Mt. Charlotte ore from the mine to the Fimiston mill during 1995has substantially reduced noise levels and improved air quality. Previously,this material had been moved to the Fimiston mill by a fleet of trucks. A safetyexclusion zone surrounding the Super Pit was established in 1993. Measures toreduce noise and dust have resulted in a significant improvement in theenvironment of residents living close to the mining operations.

Super Pit mining during 1990-1994 produced approximately 20% more orethan predicted by the ore reserve model. In June 1995, Super Pit and Mt.Charlotte ore reserves were revised using computer-aided modeling techniqueswhich more closely approximate actual mining experience. As a result, year-endproven and probable ore reserves at Kalgoorlie were expanded by 18%. HGAL'sshare of this increase was 830,000 ounces.

No royalties are payable on production.

Super Pit

This large open-pit mine is located along the "Golden Mile" ore bodiespreviously mined from underground.

In 1995, 70.4 million tons of material were mined containing 8.7million tons of ore, compared to 59.7 million tons mined containing 12.4 milliontons in 1994. HGAL's share of Super Pit gold production, net of ounces paid toGMK under the DSA, was 262,570 ounces in 1995 and 289,625 ounces in 1994. The1995 results reflect a temporary decline in production while the new Fimistonmill additions were integrated with the existing complex and severalweather-related power outages during the year which halted operations.

Mt.Charlotte



This underground mine uses bulk mining methods and large conventionaldiesel powered loaders and trucks. The main production level is 3,200 feet belowsurface. Longhole stoping mining techniques are employed. Ore is crushedunderground with primary crushers before being hoisted to secondary crushers atthe surface.

25

Mill throughput was reduced at Mt Charlotte during 1995 due toproduction difficulties following a mass-blast in late 1994 of a stope pillarwhich contained 700,000 tons of ore in the lower levels of the mine. Productionproblems have now been rectified and the mine has returned to more normal levelsof operation.

In 1995, 1.4 million tons of ore were mined from Mt. Charlotte comparedto 1.7 million tons of ore mined in 1994. HGAL's share of gold production was47,496 ounces in 1995 and 61,021 ounces in 1994.

Mt Percy

The Mt Percy open cuts were mined to their planned economic depth inJuly 1992, at which time mining ceased. Previously stockpiled low-grade Mt Percyore is blended with non-refractory ore from the Super Pit and Mt. Charlotte.

HGAL's share of gold production was 1,350 ounces in 1995 and 1,353ounces in 1994.

Mills

Fimiston - a 28,000-TPD mill with CIP leaching and refractory sulfideflotation circuits that processes Super Pit and Mt. Charlotte ore. Approximately$90 million (100% basis) was spent during 1995 and 1994 on an expansion programat the Fimiston mill, including a 5,000-TPD free-milling sulfide circuit totreat Mt. Charlotte ore. The increase in capacity has improved the mill'sefficiency and replaced the capacity of the Oroya mill which was dismantled in1995 to allow for further planned expansion of the Super Pit.

Croesus - a 3,000-TPD mill with CIP and refractory sulfide flotationcircuits that processes ore from the Super Pit.

Mt Percy - a 2,500-TPD mill with a CIP circuit that processes ore fromMt Percy, the Super Pit and Mt. Charlotte.

Gidji - a roaster complex which comprises two converters and a CIPcircuit to process all sulfide concentrates.

The combined mills processed 10.7 million tons of ore in both 1995 and1994.

Cash operating costs were higher in 1995 primarily as a result oftemporary declines in production while the new Fimiston mill additions wereintegrated with the existing complex and while production was halted due topower interruptions. The mining rate at the Super Pit is currently increasing asthe expansion of the pit continues at an increased rate. The recent Fimistonexpansion has increased milling capacity and efficiencies and, as a result, unitoperating costs at Kalgoorlie are expected to decline during 1996.

HGAL's share of 1995 gold production from the consolidated Kalgoorlieoperations, net of the ounces paid to GMK under the DSA, was 311,416 ouncescompared to 352,081 ounces in 1994.

26

Geology

The ore deposits mined in the Kalgoorlie Goldfields occur within anintensely mineralized shear zone system in dolerite host rocks, within theNorseman-Wiluna Greenstone Belt which is part of the Yilgarn Block of WesternAustralia. The rocks are of Archaen age. The favorable structural metamorphicand lithologic setting in conjunction with hydrothermal activity controlled goldmineralization. During its history of operations since 1893, in excess of 40million ounces of gold have been produced from the Kalgoorlie properties atdepths of up to 4,000 feet from high-grade lodes and adjacent disseminatedmineralization in the Golden Mile Dolerite, and from the large stockworkmineralization which characterizes the Mt. Charlotte and Reward (underground)



ore bodies.

HGAL has a 50% share (subject to the DSA discussed above) of thefollowing amounts (Homestake's ownership interest in HGAL at December 31, 1995and 1994 was 88.1% and 81.5%, respectively. See "SIGNIFICANT 1995 AND 1996DEVELOPMENTS" on page 3.):


<TABLE><CAPTION>

1995 1994------------ -------------



------------ -------------Production Statistics:

Super Pit:Tons of ore mined (000's) 8,670 12,372Stripping ratio 7.1:1 3.8:1Tons of ore milled (000's) 9,186 8,964Mill feed ore grade (oz. gold/ton) 0.067 0.077Mill recovery (%) 88 88Gold recovered (000s) 551 611

Mt Percy:Tons of stockpiled ore milled (000's) 125 94Mill feed ore grade (oz. gold/ton) 0.026 0.029Mill recovery (%) 85 86Gold recovered (000's) 3 3

27

<CAPTION>

<S> <C> <C>Mt. Charlotte:

Tons of ore mined (000's) 1,440 1,680Tons of ore milled (000's) 1,429 1,682Mill feed ore grade (oz. gold/ton) 0.076 0.085Mill recovery (%) 88 87Gold recovered (000's) 95 122

Combined Production Statistics:Tons of ore mined (000's) 10,110 14,052Tons of ore milled (000's) 10,740 10,740Mill feed ore grade (oz. gold/ton) 0.068 0.078Mill recovery (%) 88 88Gold recovered (000 ozs.) 649 736

Homestake's Consolidated Cost Per Ounce of Gold:Cash operating costs $296 $257Other cash costs - -Noncash costs 46 41

------------ -------------Total production costs $342 $298

</TABLE>

CHILE

Homestake leases and operates the El Hueso gold mine and also conductsexploration throughout Chile. Homestake's office is in Santiago, Chile.

The El Hueso mine is located in the Maricunga District of Chile about600 miles north of Santiago at an elevation of approximately 12,500 feet. Theproperty is leased through June 1998 from Codelco, a government agency. Thelease includes rights to use the existing plant. The facilities are in goodcondition. Access to the mine is by 14 miles of dirt road.

In February 1995, the El Hueso mine closed as reserves were depletedand the 6,000-TPD crushing plant was shut down. Leaching of stockpiles willcontinue until mid-1996.



Water and power are purchased from Codelco.

Reclamation activities at the El Hueso mine have commenced.Environmental monitoring carried out during 1995 indicated that all dischargeswere in compliance with permit levels.

Additional land has been leased from Codelco through the year 2004.This additional land is subject to 30% to 50% profit sharing with Codelco onpossible future production. During 1995 and 1994, an exploration programidentified a new gold-bearing deposit, Manto Agua de la Falda, which contains anore reserve of 1.0 million tons at a grade of 0.18 ounces of gold per ton. Apreliminary agreement in principle has been reached with Codelco to form a newcompany to permit the processing of the Manto Agua de la Falda reserves at theexisting El Hueso plant and to explore for and exploit resources on additionallands controlled by Codelco. An engineering study is in progress to determinethe most efficient method of processing the ore at the existing El Hueso plant.

28

Geology

The El Hueso property is located within the Potrerillos porphyry copperdistrict and comprises Mesozoic marine sediments that have been overlain byTertiary volcanics and intruded by Tertiary porphyries. Gold mineralization isthought to be related to the porphyry intrusions and has been previously minedin both sedimentary and volcanic units which have been complexly folded andfaulted both before and after mineralization. The new deposit, Manto Agua de laFalda, is hosted in calcareous sediments.

MEXICO

In February 1995, the Company sold its 28% equity interest in Torressilver mining complex for $6.0 million.

SULPHUR

Homestake owns an undivided 16.7% interest in the Main Pass 299 sulphurdeposit, which at December 31, 1995 contained proven recoverable reserves ofapproximately 68 million long tons of sulphur. Freeport McMoRan ResourcePartners, Limited Partnership ("FRP") owns a 58.3% interest in the deposit andis the operator under a joint operating agreement. IMC Fertilizer Inc. owns theremaining 25%.

The sulphur deposit is located in the Gulf of Mexico approximately 36miles east of Venice, Louisiana in waters approximately 210 feet deep. Thedeposit is approximately 1,500 feet below the sea floor. The federal sulphurlease under which the deposit is held requires a royalty of 12.5% of thewellhead value.

The operating agreement provides that each participant pays its shareof capital and operating costs, and has the right to take its share ofproduction in kind in proportion to its undivided interest.

The sulphur deposit is being mined using the Frasch process, a methodof extraction which injects steam to liquefy the sulphur, which is then pumpedto surface. Based on current reserve estimates, projected costs and prices,annual production is expected to average two million long tons over a remainingreserve life in excess of 30 years.

Fabrication and installation of production facilities began in 1990.Initial sulphur production commenced in 1992. Initial production was lower thananticipated because the production of overlying oil and gas reserves slowed theheating of the sulphur dome to required production temperatures. Full sulphurproduction levels of 5,500 TPD were reached in December 1993. Sulphur productionaveraged 6,000 TPD during 1995. Homestake's 16.7% share of developmentexpenditures through 1995 was approximately $123 million.

FRP filters, blends, markets and delivers Homestake's share of sulphurproduction under an agreement having an initial term of ten years fromcommencement of production in 1992. Homestake can terminate the agreement bygiving FRP two-years notice.

During 1995, the sulphur market continued to strengthen and sulphurprices averaged $68 per ton during 1995 compared to $53 per ton in 1994, asignificant improvement from a 20-year low which had lowered average realizedprices to approximately $45 per ton at the end of 1993. At current sulphur pricelevels of approximately $70 per ton, Homestake expects its sulphur operations tobreak even during 1996.



29

During sulphur exploration, oil and gas were discovered overlying thesulphur deposit. In 1990, the participants acquired the oil and gas rights fromChevron USA Inc. for a total of $150 million, including reimbursement of certaincosts incurred in partial development of the reserves. Homestake's 16.7% shareof the oil and gas purchase and development costs through 1995 was approximately$56 million.

The federal oil and gas lease requires a 16.7% royalty payment based onwellhead value. In addition, Chevron retained the right to share in the proceedsof future production should the price or volume realized exceed those which wereused by the parties as the basis for determining the purchase price.

Oil and gas production, which peaked during 1992, is expected tocontinue to decline over the next few years. Oil production (100% basis) totaled4.5 million barrels in 1995 compared to 5.2 million barrels in 1994. Homestake'sshare of remaining recoverable oil reserves at December 31, 1995 is estimated tobe 1.9 million barrels after adjusting for the federal royalty. The remainingcarrying value of Homestake's investment in the Main Pass 299 oil and gasproperty is $8.5 million at December 31, 1995.


Year-end Proven and Recoverable Reserves(100% Basis)

<TABLE><CAPTION>

1995 1994--------- -------------

<S> <C> <C>Tons of sulphur (000's) 68,130 70,321Barrels of oil (000's) 15,873 15,521

Production Statistics (100% Basis)1995 1994

--------- -------------Tons of sulphur (000's) 2,190 2,259Barrels of oil (000's) 4,535 5,240

Homestake's Per Unit Data1995 1994

--------- -------------Average Sales Realizations:

Per ton of Sulphur $68 $53Per barrel of oil 16 14

CostsSulphur cash operating costs per ton $55 $49Sulphur noncash costs per ton 11 11

--------- -------------Total production costs $66 $60

Oil cash operating costs per ton $5 $4Oil noncash costs per barrel 8 6

--------- -------------Total production costs $13 $10

</TABLE>

30

MINERAL EXPLORATION AND DEVELOPMENT

Total exploration expenses, excluding in-mine exploration atHomestake's operating mines and capitalized costs associated with developmentstage projects, amounted to $27.5 million in 1995 and $21.3 million in 1994.Expenses related to the in-mine exploration at Homestake's operating minestotaled $7.2 million in 1995 and $8.4 million in 1994. These expenses areincluded in the individual mine property operating expenses and cost per ouncecalculations. In addition, $2.2 million of costs associated with developmentstage projects were capitalized in 1995.

United States corporate exploration expenses totaled $12.8 million in1995 and $11.8 million in 1994. Domestic exploration expenses in 1996 areexpected to be approximately $14.5 million.

Exploration at the Ruby Hill Project expanded into several areas



surrounding the West Archimedes deposit during 1995. In the East Archimedeszone, additional gold mineralization was encountered in association withsiliceous breccias, skarns, and carbonate replacement bodies developed inCambrian and Ordovician carbonate lithologies. Gold mineralization was alsoencountered in association with silicification and decalcification of Cambriancarbonate lithologies in the Achilles zone, located several thousand feet westof the Archimedes zones, and in the Jewel Ridge zone, located several thousandfeet south of the Archimedes zones. Some of this mineralization has beenoxidized. Exploration expenditures totaled approximately $4.2 million during theyear and $3 million of exploration expenditures are planned for 1996.

At the White Pine Project, located approximately 60 miles south ofElko, Nevada, Homestake has entered into a joint venture agreement with WesternStates Minerals Corporation in which Homestake has the right to earn a 60%interest in the property by spending $4 million prior to June 21, 2000. Severalsmall deposits of gold mineralization have been previously identified on theproperty and are associated with silicification and decalcification ofcalcareous shales of Devonian to Mississippian age. In 1995, Homestake began theexploration of these strata in alluvium covered areas along certain favorablestructures. Expenditures totaled approximately $0.6 million during the year and$1.2 million of expenditures are planned for 1996.

At the Mountain View Project, located approximately 90 miles north ofReno, Nevada, Homestake has entered into a joint venture agreement with CanyonResources Corporation in which Homestake has the right to earn a 51% interest inthe property by spending $4 million prior to December 31, 1999. Small depositsof partially oxidized, but locally high-grade, gold mineralization have beenpreviously identified on the property, where they are hosted by both Miocenerhyolitic volcanics and pre-Cretaceous metasediments. Mineralization isassociated with brecciation and quartz veining and is accompanied by pyrite andmarcasite. In 1995, Homestake began exploration of the principal trend ofbrecciation and veining in alluvium covered areas of the property. Expenditurestotaled approximately $0.7 million during the year and $1.0 million ofexpenditures are planned for 1996.

During 1995, an exploration program was conducted at the Homestakemine's Open Cut. The program consisted of core and reverse circulation drillingto quantify the remaining reserves in the immediate proximity of the Open Cut.Exploration expenditures totaled $1.3 million in 1995 and similar expendituresare planned for 1996.

Through its subsidiaries, Homestake also explores for gold andevaluates gold acquisition opportunities internationally. Internationalexploration expenses totaled $14.7 million in 1995 and $9.5 million in 1994.

During 1995, Homestake and Prime entered into a three-year agreement(51% Homestake and 49% Prime) to jointly fund and participate in a Canadianexploration program. All of Homestake's Canadian

31

exploration activities, with the exception of the areas surrounding currentoperating mines and certain previously active exploration properties, will beconducted in accordance with this agreement.

In July 1995, Homestake entered into an agreement with Navan, wherebyHomestake can acquire 50% of Navan's interest in the Chelopech gold/copperoperations, located 45 miles east of Sofia, Bulgaria (See "SIGNIFICANT 1995 AND1996 DEVELOPMENTS" on page 3). Gold mineralization at Chelopech is accompaniedby abundant pyrite and copper sulfides and is currently being mined undergroundfrom pipe-like bodies of silicification and argillization in Cretaceousvolcanics. In 1995, an underground diamond drilling program commenced to explorefor additional mineralization. Expenditures totaled approximately $0.3 millionduring the year.

At the El Hueso property in Chile, Homestake has continued itsexploration of the Manto Agua de la Falda zone and has encountered additionalgold mineralization in the nearby Jeronimo zone. Mineralization in the MantoAgua de la Falda is partially oxidized, while mineralization in the Jeronimozone is accompanied by pyrite and other sulfides. Expenditures totaled $1.6million during the year and $2.5 million of expenditures are planned for 1996.

During 1995, through its acquisition of a 5% interest in Zoloto,Homestake participated in the funding of a feasibility study at the Pokrovskoyeproject in eastern Russia (See "SIGNIFICANT 1995 AND 1996 DEVELOPMENTS" on page3). Gold mineralization at Pokrovskoye is associated with quartz veining andsilicification in Cretaceous granites and dacitic tuffs and is accompanied bypyrite, marcasite, and arsenopyrite.

In October 1995, Homestake and Prime entered into agreements tocollectively purchase (51% Homestake and 49% Prime) an approximate 6% interest



in Teuton Resources Corp. ("Teuton") and an approximate 7% interest in MinvitaEnterprises Ltd. ("Minvita") for a total of $2 million. Teuton and Minvita willspend a minimum of 90% of the $2 million on exploration and development of theirjointly owned property in northwestern British Columbia, Canada. As part ofthese agreements, Homestake and Prime also have been granted rights of firstrefusal on the property and any financings related to the exploration anddevelopment of the property. To date, several zones of structurally-controlledgold mineralization have been identified on the property by trenching andlimited diamond drilling.

At Eskay Creek, computer-aided modeling of the deposit led to theidentification and drill testing of the NEX zone, an apparent stratigraphicextension to the northeast end of the main 21B Eskay Creek ore zone. High-grademineralization comparable to the 21B zone was encountered in both the NEX zoneand the overlying Hangingwall zone. The two zones, which are well located foraccess from current underground workings, contain an estimated geologicalresource of 227,000 tons at a grade of 0.88 ounces of gold and 56 ounces ofsilver per ton. The 1996 surface exploration budget for Eskay Creek and thesurrounding area has been increased to $1.3 million from $0.4 million spent in1995.

During 1995, Homestake continued work on the El Foco project, a 119,628acre property situated south of the confluence of the Chicanan and Cuyuni riversin Bolivar State, Venezuela. Homestake has entered into three contracts withCorporacian Venezolana de Guayana, a Venezuelan government agency, under whichthe Company can earn a 90% interest in the property by completing explorationover a four-year period. During 1995, Homestake completed 500 miles of linecutting, collected 10,000 soil samples, conducted surface geologic mapping and aground magnetic survey, and drilled 1,500 auger holes. Seven gold-in-soilanomalies were identified over a 7 mile by 4 mile area. These anomalies will betested by diamond drilling in 1996 when the required permits are received.Exploration expenditures on this property totaled $2 million in 1995 andexpenditures of $1.3 million are planned for 1996.

32

GLOSSARY AND INFORMATION ON RESERVES

GLOSSARY

The following terms used in the preceding discussion mean:

"Cash operating costs" are costs directly related to the physicalactivities of producing gold (includes mining, processing and other plant costs,deferred mining adjustments, third-party refining and smelting costs, marketingexpenses, on-site general and administrative costs, in-mine explorationexpenditures that are related to production and other direct costs, but excludesdepreciation, depletion and amortization, corporate general and administrativeexpense, mineral exploration expense, royalties, federal and state income andproduction taxes, Canadian mining taxes, financing costs and accruals for finalreclamation).

"Other cash costs" are costs that are not related to, but may resultfrom, gold production activities (includes royalties and federal and stateproduction taxes, but excludes Canadian mining taxes).

"Total cash costs" are the sum of cash operating costs and other cashcosts.

"Noncash costs" are costs that are typically accounted for ratably overthe life of an operation (includes depreciation, depletion and amortization ofcapital assets, accruals for the costs of final reclamation and long-termmonitoring and care that are usually incurred at the end of mine life, and theamortization of the economic cost of property acquisitions, but excludesamortization of deferred tax purchase adjustments relating to propertyacquisitions established in accordance with Statement of Financial AccountingStandards No. 109 "Accounting for Income Taxes.")

"Total production costs" is the sum of cash operating costs, other cashcosts and noncash costs.

"In-situ deposit" refers to reserves still in the ground. This does notinclude previously mined stockpiled reserves that are being stored for futureprocessing.

"Mineral deposit" and/or "Mineralized Material" is a mineralized bodywhich has been delineated by appropriate drilling and/or underground sampling.Under United States Securities and Exchange Commission standards, a mineraldeposit does not qualify as a reserve unless the recoveries from the deposit are



expected to be sufficient to recover total cash and noncash costs for the mineand related facilities.

"Run-of-mine ore" is mined ore which has not been subjected to anypretreatment, such as washing, sorting or crushing, prior to processing.

"Stripping ratio" is the ratio of the number of tons of waste to thenumber of tons of ore extracted at an open-pit mine.

"Tonnage" and "grade" refer, respectively, to the quantity of reservesand the amount of gold (or other products) contained in such reserves andinclude estimates for mining dilution but not for other processing losses.

33

"Tons" means short tons (2,000 pounds) unless otherwise specified.

"Adit" or "Portal" is a tunnel driven into a mountainside providingaccess to an ore deposit.

INFORMATION ON RESERVES

Gold

The proven and probable gold ore reserves stated in this report reflectestimated quantities and grades of gold in in-situ deposits and in stockpiles ofmined material that Homestake believes can be recovered and sold at pricessufficient to recover the estimated future cash cost of production and remaininginvestment. The estimates of cash costs of production are based on current andprojected costs. Estimated mining dilution has been factored into the reservecalculation. The Company used a spot price of $375 per ounce of gold in itsmine-by-mine evaluation of mining properties and investments at December 31,1995.

Silver

The proven and probable silver ore reserves have been calculated on thesame basis as gold ore reserves.

Sulphur

Homestake's proved sulphur reserves represent the quantity of sulphurin the Main Pass 299 deposit for which geological, engineering and marketingdata give reasonable assurance of recovery and sale under projected economic andoperating conditions at prices sufficient to cover the estimated future cashcosts of production and the remaining investment.

Oil

Homestake's proved oil reserves at Main Pass 299 are the estimatedquantity of crude oil and condensate which geological and engineering data givereasonable assurance of recovery and sale under projected operating conditionsat prices sufficient to cover the estimated future cash costs of production andthe remaining investment. The estimate is based on limited reservoir andengineering data.

Estimation of Reserves

Gold reserves are estimated for each of the properties operated byHomestake based upon factors relevant to each deposit. Gold ore reserves forthose properties not operated by Homestake are based on reserve informationprovided to Homestake by the operator. Homestake has reviewed but has notindependently confirmed the information provided by these operators.

The sulphur and oil reserves at Main Pass 299 are based on informationprovided by the operator. Homestake reviewed the initial reserve data withindependent consultants. Homestake has reviewed subsequent adjustments to thesereserves but has not independently confirmed the reserve adjustments provided bythe operator.

34

Other Information

Ore reserves are reported as general indicators of the life of mineraldeposits. Changes in reserves generally reflect (i) efforts to developadditional reserves; (ii) depletion of existing reserves through production;



(iii) actual mining experience; and (iv) price forecasts. Grades of ore actuallyprocessed from time to time may be different from stated reserve grades becauseof geologic variation in different areas mined, mining dilution, losses inprocessing and other factors. Recovery rates vary with the metallurgicalcharacteristics and grade of ore processed.

Neither reserves nor projections of future operations should beinterpreted as assurances of the economic life of mineral deposits or of theprofitability of future operations.

ENVIRONMENTAL MATTERS

General

Homestake has made significant capital expenditures to minimize theeffects of its operations on the environment. Capital expenditures primarily arefor the purchase or development of environmental monitoring equipment andcontainment of waste. In 1995, these expenditures totaled approximately $4million compared to $6 million in 1994. Homestake estimates that during 1996,capital expenditures for such purposes will be approximately $3 million and thatduring the five years ending December 31, 2000, such capital expenditures willbe approximately $35 million.

Homestake also incurs significant operating costs in order to protectthe environment. Operating costs include current reclamation costs, accruals forfuture reclamation expenditures, and air, water and other environmentalmonitoring costs. Such additional costs totaled approximately $15 million in1995, compared with approximately $16 million in 1994, not including relateddepreciation expense of $5 million and $6 million, respectively. Homestakeestimates that environmental and related operating and depreciation costs in1996 will approximate the 1995 amounts. The above amounts exclude expendituresrelated to the Company's discontinued uranium operations.

Under applicable law and the terms of permits under which Homestakeoperates, Homestake is required to reclaim land disturbed by its operations.Homestake charges reclamation costs incurred in connection with its explorationactivities as expenses in the year in which incurred. For mining operations,Homestake makes periodic accruals for costs of reclamation. In the miningindustry, most reclamation work takes place generally after mining and relatedoperations terminate. However, Homestake has adopted a policy of conductingreclamation during operations where practical. As a result, an increasing amountof reclamation is being conducted simultaneously with mining. At December 31,1995 and 1994, Homestake had accrued a total of $56.4 million and $49.2 million,respectively, for future reclamation and related costs.

Homestake's operations are conducted under permits issued by regulatoryagencies. Many permits require periodic renewal or review of their conditions.Homestake cannot predict whether it will be able to renew such permits orwhether material changes in permit conditions will be imposed.

35

RCRA

The United States Environmental Protection Agency ("EPA"), has not yetissued final regulations for management of mining wastes under the ResourceConservation and Recovery Act ("RCRA"). The ultimate effects and costs ofcompliance with RCRA cannot be estimated at this time.

CERCLA

The United States Comprehensive Environmental Response, Compensationand Liability Act of 1980 ("CERCLA"), requires the EPA to list known orthreatened releases of hazardous substances, pollutants or contaminants. In1983, the EPA began publishing the National Priorities List ("NPL"). The listingof a site does not constitute a determination that any remedial action isrequired, nor that any person is liable for any remedial action or environmentaldamage. CERCLA imposes heavy liabilities on any person who is responsible for anactual or threatened release of any hazardous substance, including liability foroversight costs incurred by the EPA. Congressional hearings for CERCLAreauthorization occurred in 1994 and 1995. CERCLA reauthorization was notenacted in 1995, but is expected to occur in 1996.

Whitewood Creek

Deposits of mine rock tailings on lands along an 18-mile stretch ofWhitewood Creek in western South Dakota constitute a site on the NPL. The EPAasserts that discharges of tailings by mining companies, including Homestake,beginning in the nineteenth century, have contaminated the soil and stream bed.



In August 1990, Homestake signed a consent decree with the EPA inUnited States of America v. Homestake Mining Company of California, (U.S.District Court, W.D., S.D., Civil Action 90-5101). The consent decree requiredHomestake to carry out remedial work at Homestake's expense and to reimburse theEPA for oversight costs. The decree also provided for the three counties inwhich the property is located to enact institutional controls which would limitthe future use of the properties included within the area of the site. Remedialfield work was completed in 1993. Institutional control ordinances prepared withthe assistance of the Company have been adopted in all three of the affectedcounties. The Record of Decision also requires the Company to continue toperform long-term monitoring of the site. The consent decree was terminated bythe Court on January 10, 1996. Homestake has requested deletion of the site fromthe NPL and the EPA published a notice in the Federal Register on November 30,1995 stating its intent to delete this site from the NPL. The Company expectsthe site to be deleted in 1996. The Company has paid all oversight costs billedto date.

In connection with the program to implement institutional controls, theCompany decided to offer to purchase all properties along Whitewood Creek thatwere affected by the institutional controls. Approximately $1.3 million has beenspent to acquire property at the site from 9 landowners. Negotiations arecontinuing to acquire more of the site. The Company estimates that the totalcost for purchasing all of the affected property would be approximately $3million. These costs are expensed as and when incurred.

In 1983, the State of South Dakota filed claims against Homestake fornatural resources damages resulting from the release of tailings into theWhitewood Creek site. The State has taken no action to pursue the claims.

36

Grants Tailings

Homestake's closed uranium mill site near Grants, New Mexico is listedon the NPL. The EPA asserted that leachate from the tailings contaminated ashallow aquifer used by adjacent residential subdivisions. Homestake paid thecost of extending the municipal water supply to the affected homes. Homestakealso has operated a water injection and collection system that has significantlyimproved the quality of the aquifer. The estimated costs of continuedremediation are included in the accrued reclamation liability. Homestake hassettled with the EPA concerning its oversight costs for this site and noadditional oversight costs are accruing. The consent decree has been terminated.

Under Nuclear Regulatory Commission ("NRC") regulations, thedecommissioning of the uranium mill tailings facilities is in accordance withthe provisions of the facility's license. The facility license sets the closureof the two tailings impoundments as 1996 and 2001, subject to extension undercertain circumstances. No difficulties are anticipated in obtaining anextension. The NRC and EPA signed a Memorandum of Understanding in 1993 whichhas established the NRC as the oversight and enforcement agency fordecommissioning and reclamation of the site. Mill decommissioning was completedin 1994 and reclamation of the Grants large tailings site is scheduled forcompletion in 1997. During 1995, the Company incurred approximately $14.5million of reclamation expenditures at the Grant's facility and an additional$3.5 million is planned to be expended during 1996.

Title X of the Energy Policy Act of 1992 (the "Act") authorizedappropriations of $270.0 million to cover the Federal Government's share ofcertain costs of reclamation, decommissioning and remedial action for by-productmaterial (primarily tailings) generated by certain licensees as an incident ofuranium sales to the Federal Government. Reimbursement is subject to compliancewith regulations of the Department of Energy ("DOE"), which were issued in 1994.Pursuant to the Act, the DOE is responsible for 51.2% of the past and futurecosts of reclaiming the Grants site in accordance with Nuclear RegulatoryCommission license requirements. The Company's balance sheet at December 31,1995 includes a receivable of $18.7 million for the DOE's share of reclamationexpenditures made by the Company through 1995. The Company believes that itsshare of the estimated remaining cost of reclaiming the Grants facility, net ofestimated proceeds from the ultimate disposals of related assets, is fullyprovided in the financial statements at December 31, 1995.

In 1983, the State of New Mexico filed claims against Homestake fornatural resource damages resulting from the Grants site. The State has taken noaction to pursue the claims.

Lead

Prior to May 1986, Homestake Lead Company of Missouri ("HLCM"), awholly-owned subsidiary of the Company, was a joint venturer and partner withsubsidiaries of AMAX, Inc. ("AMAX") in the production of lead metal and lead



concentrates in Missouri. In May 1986, HLCM acquired AMAX's interest in theMissouri facilities and operations and agreed to assume certain limitedliabilities of AMAX in connection with the Missouri facilities. In November1986, HLCM entered into a partnership, The Doe Run Company ("Doe Run"), withsubsidiaries of Fluor Corporation ("Fluor"), under which HLCM and the Fluorsubsidiaries combined their existing United States lead businesses. Under theDoe Run partnership agreement, HLCM contributed to Doe Run certain liabilitiesof HLCM arising out of the lead business, including most obligations HLCM had toAMAX arising in connection with HLCM's acquisition of AMAX's interest in theMissouri facilities.

37

In May 1990, HLCM sold its interest in Doe Run to Fluor under anagreement which provided that Fluor would indemnify HLCM against all liabilitiesassumed by Doe Run to the extent that Doe Run was unable to discharge thoseliabilities.

In June 1991, HLCM and AMAX were notified of a potential claim by theJackson County, Mississippi Port Authority for contamination of soil and wateralleged to have resulted from storage and shipment of lead dross at the Port ofPascagoula prior to the formation of Doe Run; since that time, a number of otherlead producers and former lead producers have also been so notified. In July1991, HLCM tendered the claim to Fluor and Doe Run. They rejected the tender andHLCM filed suit in the Superior Court of Orange County, California for breach ofcontract and declaratory relief (Superior Court, Dept. 20, No. 673777).Subsequent to the filing of that action, HLCM tendered two additional potentialclaims arising out of the pre-1986 lead business to Fluor and Doe Run. DoeRun and Fluor rejected both tenders.

During the pendency of the action, Fluor and Doe Run joined AMAX in thelitigation. AMAX took the position that HLCM was obligated to indemnify AMAX foroff-site environmental liability associated with lead dross and smelterby-products, but not for off-site environmental liability associated with leadmetal or lead concentrates. AMAX also took the position that the transfer to DoeRun of obligations owed by HLCM to AMAX arising in connection with HLCM'sacquisition of AMAX's interest in the Missouri facilities was not binding onAMAX and did not relieve HLCM of its obligations to AMAX.

In settlement of the matter in respect of AMAX, HLCM agreed toindemnify AMAX in respect of future off-site environmental liability arising inrespect of lead dross and other smelter by-products. AMAX has acknowledged thatit is responsible for its proportionate share of off-site environmentalliability associated with lead metal and lead concentrates, and AMAX hasacknowledged the effectiveness of HLCM's transfer to Doe Run of obligations HLCMhad to AMAX arising in connection with HLCM's acquisition of AMAX's interest inthe Missouri facilities. HLCM and Fluor also agreed to dismiss Fluor out of thelitigation on the basis of a stipulation by Fluor acknowledging itsresponsibility with respect to obligations of Doe Run to HLCM should Doe Run beunable to satisfy its obligations.

In December 1993, trial was held with respect to HLCM's claims againstDoe Run and in January 1994, the court ruled against HLCM and in favor of DoeRun. That ruling is being appealed.

Homestake and other companies are working with the Port of Pascagoulato address the potential lead contamination situated on certain property held bythe Port Authority. The Port of Pascagoula is taking primary responsibility forconducting an investigation of the site, but the Port also has made claims forreimbursement against customers whose material was stored at and shipped throughthe site. As a result of subsequent investigations conducted by the Company andothers, the Company believes that most of the material at the Pascagoula site,and the material primarily responsible for any contamination, is leadconcentrate. Based on a review of shipping records to date, less than half ofthe lead concentrate shipped through the Port of Pascagoula was produced andsold for the account of the Company. The State of Mississippi Department ofEnvironmental Quality is, through regulatory oversight, reviewing theinvestigation efforts and remediation plans that are being developed by the PortAuthority.

38

Foreign Operations

Homestake believes that its foreign operations comply with applicablelaws, regulations and permit conditions and has no knowledge of any significantenvironmental liability or contingent liability resulting from its foreignoperations. Homestake expects that environmental constraints in foreign



countries will become increasingly strict.

CUSTOMERS

Sales of $102 million, $101 million, $92 million and $91 million tofour customers in 1995 were in excess of 10% of Homestake's consolidatedrevenues. Homestake believes that the loss of any of these customers would nothave a material adverse impact on Homestake because of the active worldwidemarket for gold.

CREDIT FACILITIES

See note 14 to the consolidated financial statements on page 38 of the1995 Annual Report to Shareholders for details of the Company's creditfacilities. Such information is hereby incorporated by reference.

EMPLOYEES

The number of full-time employees at December 31, 1995 of Homestake andits subsidiaries was:<TABLE><CAPTION>

<S> <C>Homestake mine (1) 967McLaughlin mine 346Nickel Plate mine 131Eskay Creek mine 72El Hueso mine (1) 23United States corporate staff and other 76Canada exploration and corporate staff 27HGAL exploration and corporate staff 20United States exploration 26Santa Fe mine 7Uranium 8Chile exploration and corporate staff 31

-----------Total 1,734

39

The number of full-time employees at December 31, 1995 in jointly-ownedoperations in which Homestake participates was:<CAPTION>

<S> <C>Kalgoorlie Consolidated Gold Mines Pty Ltd (1) 992Williams Operating Corporation 604Round Mountain mine 550Teck-Corona Operating Corporation (1) 232Rayrock managed operations (Marigold and

Pinson mines) 198Snip mine 142Main Pass 299 187

-----------Total 2,905

<FN>(1) Operations where a portion of the employees are represented by a

labor union.</TABLE>

EXECUTIVE OFFICERS OF THE REGISTRANT

The executive officers of the Company, their ages at December 31, 1995,their business experience and principal occupations during the past five yearsand their business backgrounds are:

Harry M. Conger - Chairman of the Board and Chief Executive Officersince 1982, age 65. He has been Chief Executive Officer since December 1978 andwas President from 1977 to 1986. He is a mining engineer with over 40 years ofprofessional experience.

Jack E. Thompson - President and Chief Operating Officer since August1994, age 45. From August 1994 to June 1995, he was also Chairman of Prime. Hewas Executive Vice President, Canada of the Company and President of Prime from



1992 through August 1994. He also was President of North American Metals Corp.from 1988 until 1993. He is a mining engineer with over 25 years of experiencein mining and mine management.

Gene G. Elam - Vice President, Finance and Chief Financial Officersince September 1990, age 56. Before joining Homestake, he was Senior VicePresident, Administrative Services of Pacific Gas and Electric Company fromApril 1989 through August 1990 and was Vice President and Controller fromJanuary 1987 through March 1989. He was President and Chief Executive Officer ofThe Pacific Lumber Company from 1982 to 1986, President in 1980 and 1981, andChief Financial Officer from 1972 until 1980. He is a certified publicaccountant with over 34 years of experience in accounting and finance.

Lee A. Graber - Vice President, Corporate Development since 1983, age47. From 1980 to 1983, he was Manager, Corporate Development and Planning. Hehas over 25 years of experience in finance and corporate development.

Wayne Kirk - Vice President, General Counsel and Secretary sinceSeptember 1992, age 52. He was a partner in Thelen, Marrin, Johnson & Bridgesfrom 1976 to 1992. He has practiced law for more than 26 years.

40

Gillyeard J. Leathley - Vice President, Operations since May 1995, age58. He joined Homestake in 1992 as Vice President, Canadian Operations. Prior tojoining Homestake, he was Senior Vice President, Operations for InternationalCorona Corporation from 1986 to September 1992. He has over 38 years ofexperience in mining and mine management.

William F. Lindqvist - Vice President, Exploration since August 1995,age 53. He rejoined Homestake from Newcrest Mining Company, where he wasExecutive General Manager, Exploration. He was Vice President, Exploration atHomestake from 1990 through 1992. He is a geologist with more than 25 years ofprofessional experience.

Ronald D. Parker - Vice President Canada and President, HomestakeCanada Inc. since August 1994, age 45. He also has been President and ChiefExecutive Officer of Prime since August 1994. He was the Resident GeneralManager of the McLaughlin mine from 1988 until August 1994. He is an engineerwith over 24 years of experience in mining and mine management.

Richard A. Tastula - Vice President, Australia since August 1995, age52. He has been Managing Director of Homestake Gold of Australia Limited since1993, and was Director of Operations from 1991 to 1993. For 18 years prior tothat time, he held various positions with Western Mining Corporation, Limited.He has over 30 years of experience in mining and mine management.

David W. Peat - Vice President and Controller since December 1995, age43. He was Controller of the Company from 1992 through November 1995. Prior tojoining Homestake in 1992, he was Vice President, Controller for InternationalCorona Corporation. He is a chartered accountant with over 19 years ofaccounting and finance experience.

Jan P. Berger - Treasurer since August 1992, age 40. He has been withHomestake since 1989, first as senior analyst in the finance group and from 1991to 1992 was Manager, Internal Audit. Prior to joining Homestake, he was ananalyst for Bechtel Financing Services Inc. Before Bechtel, he worked as anengineering and exploration geologist in the consulting and petroleumindustries. He has over 14 years of experience in exploration and finance.

No officer is related to any other officer by blood, marriage oradoption.

Officers are elected to serve until the next annual meeting of theBoard of Directors at which officers are elected or until their successors arechosen.

No arrangement or understanding exists between any officer and anyother person under which any officer was elected.

ITEM 2 - PROPERTIES

See Item 1 - Business.

41



ITEM 3 - LEGAL PROCEEDINGS

Certain environmental proceedings in which the Company is or may becomea party are discussed on pages 35 through 39 under the caption "ENVIRONMENTALMATTERS."

HGAL and Gold Mines of Kalgoorlie Limited and its affiliates ("GMK")each own a 50% interest in the Kalgoorlie operations in Western Australia. Undercertain circumstances, GMK is entitled to more than 50% of the gold productionsourced from a specific area of the Kalgoorlie operations. The entitlement inexcess of 50%, which is called the "disproportionate share," is calculated by aformula linked to gold prices, production costs and capital costs. HGAL and GMKdisagree in respect to the interpretation and application of the formula forcalculating the disproportionate share, principally relating to the treatment ofcertain capital costs.

On October 20, 1995 HGAL was served a writ of summons and a statementof claim by GMK, North Kalgurli Mines Pty Ltd, et al v. Homestake Gold ofAustralia Limited, et al, Supreme Court of Western Australia, Civ. No 2037 of1995. GMK claims a number of declarations relating to the correct interpretationand application of the formula which calculates the disproportionate share. Thestatement of claim also alleges that HGAL has received to date a greaterquantity of gold production than it is entitled to pursuant to theDisproportionate Sharing Arrangement and that HGAL should account to GMK inrespect of the same. The quantity claimed is 8,313 ounces of gold having a valueof approximately $3.2 million. GMK also seeks damages from HGAL in respect ofdamage it claims to have suffered because of the application of the formulawhich calculates the disproportionate share. Kalgoorlie Consolidated Gold MinesPty Ltd, the manager of the Joint Venture, has been joined as the seconddefendant to the action. HGAL is of the view that it will successfully defendthese proceedings.

The Company and its subsidiaries are defendants in various other legalactions in the ordinary course of business. In the opinion of management, suchmatters will be resolved without material affect on the Company's financialcondition.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

PART II

ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATEDSTOCKHOLDER MATTERS

a. The common stock of Homestake Mining Company is registered and tradedprincipally on the New York Stock Exchange under the symbol "HM". It isalso listed and traded on the Australian Stock Exchange and inSwitzerland on the Basel, Geneva and Zurich stock exchanges under thesame symbol.

b. The number of holders of common stock of record as of March 18, 1996was 23,530.

42

c. Information about the range of sales prices for the common stock andthe frequency and amount of dividends declared during the past twoyears appears in the tables on page 45 in the Registrant's 1995 AnnualReport to Shareholders. The tables setting forth sales prices anddividends are hereby incorporated by reference. Information aboutcertain restrictive covenants under the Company's line of creditappears on page 38 in Note 14 entitled "Long-term Debt" in the Notes toConsolidated Financial Statements in the Company's 1995 Annual Reportto Shareholders. Such information is hereby incorporated by reference.

d. Reference is hereby made to the Note 18 entitled "Shareholders' Equity"on page 40 in the Notes to Consolidated Financial Statements in theCompany's 1995 Annual Report to Shareholders. Such information ishereby incorporated by reference.

ITEM 6 - SELECTED FINANCIAL DATA

A summary of selected consolidated financial data of the Company andits subsidiaries for the eight-year period ended December 31, 1995 appears onpages 46 and 47 in the 1995 Annual Report to Shareholders. The summary ofselected consolidated financial data is hereby incorporated by reference.



ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's discussion and analysis of financial condition and resultsof operations covering the three-year period ended December 31, 1995 appears onpages 22 through 27 in the 1995 Annual Report to Shareholders and is herebyincorporated by reference.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The 1995 Annual Report to Shareholders includes the Company'sconsolidated balance sheets as of December 31, 1995 and 1994 and relatedstatements of consolidated income, consolidated shareholders' equity andconsolidated cash flows for each of the three years in the period ended December31, 1995 and the independent auditors' report thereon, and certain supplementaryfinancial information. The following are hereby incorporated by reference fromthe 1995 Annual Report to Shareholders at the pages indicated:

Statements of Consolidated Income (page 28)Consolidated Balance Sheets (page 29)Statements of Consolidated Shareholders' Equity (page 30)Statements of Consolidated Cash Flows (page 31)Notes to Consolidated Financial Statements (pages 32-43)Report of Independent Auditors (page 44)Quarterly Selected Data (page 45)

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ONACCOUNTING AND FINANCIAL DISCLOSURE

None

43

PART III

ITEMS 10, 11, 12 AND 13

In accordance with General Instruction G(3), Items 10, 11, 12 and 13(with the exception of certain information pertaining to executive officers,which is included in Part I hereof) have been omitted from this report since adefinitive proxy statement is being filed with the Securities and ExchangeCommission and furnished to shareholders pursuant to Regulation 14A.

The information contained in the proxy statement relating to directors,executive compensation, security ownership and certain relationships (other thanthe performance graph and Compensation Committee report contained therein) ishereby incorporated by reference.

PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES,AND REPORTS ON FORMS 8-K

(a) 1. Financial Statements:

Refer to Part II, Item 8.

2. Financial Statement Schedules:

Schedules for the years ended December 31, 1995, 1994, and1993 -

II Valuation and Qualifying Accounts

Report of Independent Auditors

Schedules not listed are omitted because they are not requiredor because the required information is included elsewhere inthis report.

3. Exhibits

2.1 Plan of acquisition and offer to purchase the 18.5% ofHomestake Gold of Australia Limited held by minorityshareholders (incorporated by reference to the Registrant'sRegistration Statement No. 33-62667 on Form S-4, as amended byPost-Effective Amendment No. 1 filed on October 19, 1995("Offer Document") and Supplements to Offer Document dated



December 1, 1995, December 13, 1995, January 12, 1996, andJanuary 25, 1996).

3.1 Restated Certificate of Incorporation of Homestake MiningCompany (incorporated by reference to Exhibit 3.1 to theRegistrant's Registration Statement on Form S-4 filed on June10, 1992 (the "1992 S-4 Registration Statement")).

3.2 Amendment to Restated Certificate of Incorporation ofHomestake Mining Company dated June 3, 1991 (incorporated byreference to Exhibit 3.2 to the 1992 S-4 RegistrationStatement).

44

3.3 Certificate of Correction of the Restated Certificate ofIncorporation of Homestake Mining Company dated February 10,1992 (incorporated by reference to Exhibit 3.3 to the 1992 S-4Registration Statement).

3.4 Bylaws (as amended through May 9, 1993) of Homestake MiningCompany (incorporated by reference to Exhibit 3.4 to theRegistrant's Form 10-Q for the quarter ended March 31, 1995).

3.5 Rights Agreement dated October 16, 1987 (incorporated byreference to Exhibit 10 to the Registrant's Report on Form 8-Adated October 16, 1987).

4.1 Indenture dated as of January 23, 1993 between HomestakeMining Company, Issuer and The Chase Manhattan Bank, N.A.,Trustee, with respect to U.S. $150,000,000 principal amount of5 1/2% Convertible Subordinated Notes due January 23, 2000(incorporated by reference to Exhibit 4.2 to the Registrant'sForm 8-K Report dated as of June 23, 1993).

10.1 Agreement dated July 4, 1995 between Noranda ExplorationCompany Limited, Teck Corporation and International CoronaResources Limited (a subsidiary of International CoronaCorporation, now Homestake Canada Inc. and a subsidiary ofRegistrant), relating to development of the Quarter Claimmine.

* 10.2 Form of Change of Control Severance Plan of Registrant.* 10.3 Deferred Compensation Plan of Homestake Mining Company

effective October 1, 1995.* 10.4 Amended and Restated Executive Supplemental Retirement Plan of

Homestake Mining Company effective August 1, 1995.* 10.5 Supplemental Retirement Plan of Homestake Mining Company,

amended and restated effective as of January 1, 1990(including November 29, 1990 modification).

* 10.6 Master Trust under the Homestake Mining Company DeferredCompensation Plans as of December 5, 1995.

10.7 Amended and restated credit agreement dated as of September30, 1994 between the Registrant, the Lenders, Bank of NovaScotia and Canadian Imperial Bank of Commerce as managingagents and Canadian Imperial Bank of Commerce asadministrative agent (incorporated by reference to Exhibit10.1 to the Registrant's Form 8-K dated March 20, 1995).

* 10.8 Retirement plan for outside directors of the Registrant datedas of July 21, 1994 (incorporated by reference to Exhibit 10.2to the Registrant's Form 8-K dated March 20, 1995).

10.9 Lease agreement dated June 17, 1988 between the Registrant'swholly-owned subsidiary, Minera Homestake Chile, S.A. andCODELCO-Chile (incorporated by reference to Exhibit 10(f) tothe Registrant's Form 10-K for the year ended December 31,1989).

10.10 Amendment dated September 4, 1991 to the lease agreement datedJune 17, 1988 between the Registrant's wholly-ownedsubsidiary, Minera Homestake Chile, S.A. and CODELCO-Chile(incorporated by reference to Exhibit 10(a) to theRegistrant's Form 10-K for the year ended December 31, 1989).

10.11 Agreement dated October 9, 1991 between the Registrant andChevron Minerals Ltd. (incorporated by reference to Exhibit10(b) to the Registrant's Form 10-K for the year endedDecember 31, 1991).

10.12 Guarantee dated December 18, 1991 between the Registrant andChevron Minerals Ltd. (incorporated by reference to Exhibit10(c) to the Registrant's Form 10-K for the year endedDecember 31, 1991).

10.13 Agreement dated May 4, 1990 for the sale of the Registrant's42.5% partnership interest in The Doe Run Company(incorporated by reference to Exhibit 28(a) to theRegistrant's Form 8-K dated May 18, 1990).

45



10.14 Purchase and sale agreement dated January 15, 1989 between theRegistrant's subsidiary, Homestake Gold of Australia Limited,and North Kalgoorlie Mines Limited (and Group Companies) andKalgoorlie Lake View Pty. Ltd. (incorporated by reference toExhibit 10(g) to the Registrant's Form 10-K for the year endedDecember 31, 1989).

10.15 Joint Operating Agreement dated May 1, 1988 betweenFreeport-McMoRan Resources Partners, IMC Fertilizer, Inc. andFelmont Oil Corporation (a subsidiary of Registrant, now namedHomestake Sulphur Company) relating to the Main Pass Block 299sulphur project (incorporated by reference to Exhibit 10.16 tothe Registrant's Form 10-K for the year ended December 31,1992).

10.16 Amendment No. 1 dated July 1, 1993 to Joint OperatingAgreement between Freeport McMoRan Resources Partners, IMCFertilizer, Inc. and Homestake Sulphur Company (incorporatedby reference to Exhibit 10.8 to the Registrant's Form 10-K forthe year ended December 31, 1993).

10.17 Amendment No. 2 dated November 30, 1993 to Joint OperatingAgreement between Freeport McMoRan Resources Partners, IMCFertilizer, Inc. and Homestake Sulphur Company (incorporatedby reference to Exhibit 10.9 to the Registrant's Form 10-K forthe year ended December 31, 1993).

10.18 Amended and Restated Project Agreement (David Bell Mine) datedas of April 1, 1986 among Teck Corporation, InternationalCorona Resources Ltd. (a subsidiary of International CoronaCorporation, now Homestake Canada Inc. and a subsidiary ofRegistrant), Teck-Hemlo Inc., Corona-Hemlo Inc. (a subsidiaryof International Corona Corporation, now Homestake Canada Inc.and a subsidiary of Registrant) (incorporated by reference toExhibit 10.17 to the Registrant's Form 10-K for the year endedDecember 31, 1992).

10.19 Amended and Restated Operating Agreement (David Bell Mine)among Teck Corporation, International Corona Resources Ltd. (asubsidiary of International Corona Corporation, now HomestakeCanada Inc. and a subsidiary of Registrant), Teck Mining GroupLimited, Teck-Corona Operating Corporation, Teck-Hemlo Inc.and Corona-Hemlo Inc. (a subsidiary of International CoronaCorporation, now Homestake Canada Inc. and a subsidiary ofRegistrant) (incorporated by reference to Exhibit 10.18 to theRegistrant's Form 10-K for the year ended December 31, 1992).

10.20 Project Agreement (Williams Mine) dated August 11, 1989 amongTeck Corporation, Corona Corporation (now Homestake CanadaInc. and a subsidiary of Registrant) and Williams OperatingCorporation (incorporated by reference to Exhibit 10.19 to theRegistrant's Form 10-K for the year ended December 31, 1992).

10.21 Operating Agreement (Williams Mine) dated August 11, 1989among Teck Corporation, Corona Corporation (now HomestakeCanada Inc. and a subsidiary of Registrant), Teck Mining GroupLimited and Williams Operating Corporation (incorporated byreference to Exhibit 10.20 to the Registrant's Form 10-K forthe year ended December 31, 1992).

10.22 Shareholders' Agreement dated August 11, 1989 among CoronaCorporation (now Homestake Canada Inc. and a subsidiary ofRegistrant), Teck Corporation and Williams OperatingCorporation (incorporated by reference to Exhibit 10.21 to theRegistrant's Form 10-K for the year ended December 31, 1992).

* 10.23 Agreement dated July 16, 1982, as amended November 3, 1987 andFebruary 23, 1990, between the Registrant and H. M. Conger(incorporated by reference to Exhibit 10(a) to theRegistrant's Form 10-K for the year ended December 31, 1989).

46

* 10.24 Share Incentive Plan effective July 1, 1988 of InternationalCorona Corporation (now Homestake Canada Inc. and subsidiaryof Registrant), as amended October 22, 1991 (incorporated byreference to Exhibit 10.32 to the Registrant's Form 10-K forthe year ended December 31, 1992).

10.25 Shareholder Agreement dated January 1, 1989 among HomestakeMining Company, Case, Pomeroy & Company, Inc. and Hadley Case(incorporated by reference to Exhibit 10(a) to theRegistrant's Form 10-K for the year ended December 31, 1988).

10.26 Amendment dated March 27, 1992 to Shareholder Agreement datedJanuary 1, 1989 among Homestake Mining Company, Case, Pomeroy& Company, Inc., and Hadley Case (incorporated by reference toExhibit 10.14 to the 1992 S-4 Registration Statement).



* 10.27 Consulting Agreement dated July 24, 1992, between Stuart T.Peeler and the Registrant (incorporated by reference toExhibit 10.36 to the Registrant's Form 10-K for the year endedDecember 31, 1992).

* 10.28 Consulting agreement dated March 1, 1993 between William A.Humphrey and the Registrant (incorporated by reference toExhibit 10.27 to the Registrant's Form 10-K for the year endedDecember 31, 1993).

* 10.29 Employees Non-Qualified Stock Option Plan--1978 (incorporatedby reference to Exhibit 10(a) to the Registrant's Form 10-Kfor the year ended December 31, 1984, Commission File Number1-1235 and to Post Effective Amendment No. 3 to theRegistrant's Registration Statement on Form S-8 dated March11, 1988).

* 10.30 1981 Incentive Stock Option Plan (incorporated by reference toExhibit 10(b) to the Registrant's Form 10-K for the year endedDecember 31, 1984, Commission File Number 1-1235 and to PostEffective Amendment No. 3 to the Registrant's RegistrationStatement on Form S-8 dated March 11, 1988).

* 10.31 Long Term Incentive Plan of 1983 of Homestake Mining Company(incorporated by reference to Exhibit 10(g) to theRegistrant's Registration Statement on Form S-14 dated May 16,1984).

* 10.32 Employees' Stock Option and Share Rights Plan--1988(incorporated by reference to Exhibit 10(n) to theRegistrant's Form 10-K for the year ended December 31, 1987).

11 Computation of Earnings Per Share.13 Specified sections of the 1995 Annual Report to Shareholders.21 Subsidiaries of the Registrant.23 Consent of Coopers & Lybrand L.L.P., Independent Auditors.27 Financial Data Schedule.

* Compensatory plan or management contract.

(b) Reports Filed on Form 8-K

Six reports on Form 8-K were filed during the fourth quarter of 1995and in the 1996 period through March 21, 1996.

1) The report on Form 8-K dated November 29, 1995 announced thatthe Company extended until December 22, 1995 its offer toacquire the shares of HGAL that Homestake did not own already.

47

2) The report on Form 8-K dated December 13, 1995 was submittedin order to file two documents as follows: (i) Supplement #2to Offer Document related to the Company's offer to acquirethe 18.5% of HGAL that it did not own already and (ii) consentof opinion of independent accountants related to report onfinancial forecast included in Supplement #2 to OfferDocument. Supplement #2 to Offer Document includes updated andrevised Pro Forma Condensed Consolidated Financial Statements.

3) The report on Form 8-K dated December 21, 1995 announced thatthe Company extended until January 12, 1996 its offer toacquire the shares of HGAL that Homestake did not own already.

4) The report on Form 8-K dated January 12, 1996 announced thatthe Company extended until January 25, 1996 its offer toacquire the shares of HGAL that Homestake did not own already.

5) The report on Form 8-K dated January 25, 1996 announced thatthe Company extended until February 9, 1996 its offer toacquire the shares of HGAL that Homestake did not own already.

6) The report on Form 8-K dated January 31, 1996 announced thatthe Company's offer to acquire the shares of HGAL thatHomestake did not own already would close on February 9, 1996,and that the Company then owned 98.3% of the shares of HGALand would proceed with compulsory acquisition of any remainingshares after the closing date.



48

SIGNATURES----------

Pursuant to the requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized.

HOMESTAKE MINING COMPANY

Date March 21, 1996 By: /s/ H. M. Conger--------------- -----------------

H. M. CongerChairman of the Boardand Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this reporthas been signed below by the following persons on behalf of the registrant andin the capacities and on the dates indicated.

Signature Capacity Date--------- -------- ----

/s/ G. G. Elam Vice President,Finance March 21, 1996-------------- and Chief Financial OfficerG. G. Elam (Principal Financial Officer)

/s/ D. W. Peat Vice President and Controller March 21, 1996-------------- (Principal Accounting Officer)D. W. Peat

(Signatures continued on following page.)

49

<TABLE><CAPTION>Signature Capacity Date--------- -------- ----

<S> <C> <C>/s/ Harry M. Conger Chairman of the Board, March 21, 1996------------------- Chief Executive Officer and DirectorHarry M. Conger

/s/ Jack E. Thompson President, Chief Operating March 21, 1996-------------------- Officer and DirectorJack E. Thompson

/s/ M. Norman Anderson Director March 21, 1996----------------------M. Norman Anderson

/s/ Robert H. Clark, Jr. Director March 21, 1996------------------------Robert H. Clark, Jr.

/s/ G. Robert Durham Director March 21, 1996--------------------G. Robert Durham



/s/ Douglas W. Fuerstenau Director March 21, 1996-------------------------Douglas W. Fuerstenau

/s/ Henry G. Grundstedt Director March 21, 1996-----------------------Henry G. Grundstedt

/s/ William A. Humphrey Director March 21, 1996-----------------------William A. Humphrey

/s/ Robert K. Jaedicke Director March 21, 1996----------------------Robert K. Jaedicke

/s/ John Neerhout, Jr. Director March 21, 1996----------------------John Neerhout, Jr.

/s/ Stuart T. Peeler Director March 21, 1996--------------------Stuart T. Peeler

/s/ Carol A. Rae Director March 21, 1996----------------Carol A. Rae

/s/ Berne A. Schepman Director March 21, 1996---------------------Berne A. Schepman

</TABLE>

50


SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTSFOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

(In thousands)<TABLE><CAPTION>

---------------------------------------------------------------------------------------------------------------------------------COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E

BALANCE AT BALANCEBEGINNING AT END OF

DESCRIPTION OF PERIOD ADDITIONS DEDUCTIONS PERIOD

---------------------------------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>DEFERRED TAX ASSET VALUATION ALLOWANCES (1)

Year ended December 31, 1995 $ 49,839 $ 11,034 $ 1,262 (2) $ 59,611

Year ended December 31, 1994 $ 52,066 $ 10,210 $ 12,437 (3) $ 49,839

Year ended December 31, 1993 $ 0 $ 52,066 (4) $ 0 $ 52,066

<FN>

(1) For further information see Note 7, Income Taxes, in the Notes to theConsolidated Financial Statements included in the 1995 Annual Report toShareholders.

(2) Deductions in 1995 relate to the realization of certain United Statesdeferred tax assets.

(3) Deductions in 1994 relate to the reversals of Canadian and Australiantax loss carry-forwards.

(4) Additions in 1993 relate to the implementation of SFAS 109, "Accountingfor Income Taxes."

</TABLE>

REPORT OF INDEPENDENT ACCOUNTANTS



The Shareholders and Board of DirectorsHomestake Mining Company

We have audited the consolidated financial statements of Homestake MiningCompany and subsidiaries as of December 31, 1995 and 1994, and for each of thethree years in the period ended December 31, 1995, which financial statementsare included on pages 28 through 43 of the 1995 Annual Report to Shareholders ofHomestake Mining Company and incorporated by reference herein. We have alsoaudited the financial statement schedules listed in Item 14(a)(2) of this Form10-K. These financial statements and financial statement schedules are theresponsibility of the company's management. Our responsibility is to express anopinion on these financial statements and financial statement schedules based onour audits.

We conducted our audits in accordance with generally accepted auditingstandards. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and the significant estimates made bymanagement, 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, inall material respects, the consolidated financial position of Homestake MiningCompany and subsidiaries as of December 31, 1995 and 1994, and the consolidatedresults of their operations and their cash flows for each of the three years inthe period ended December 31, 1995, in conformity with generally acceptedaccounting principles. In addition, in our opinion, the financial statementschedules referred to above, when considered in relation to the basic financialstatements taken as a whole, present fairly, in all material respects, theinformation required to be included therein.

/s/ Coopers & Lybrand L.L.P.

San Francisco, CaliforniaFebruary 9, 1996

EXHIBIT INDEX

<TABLE><CAPTION>Exhibit Method of Filing------- ----------------

<S> <C> <C>10.1 Agreement dated July 4, 1995 between Noranda Exploration

Company Limited, Teck Corporation and International CoronaResources Limited (a subsidiary of International CoronaCorporation, now Homestake Canada Inc. and a subsidiary ofRegistrant), relating to development of the Quarter Claimmine. Filed herewith electronically

10.2 Change of Control Severance Plan of Registrant. Filed herewith electronically

10.3 Deferred Compensation Plan of Homestake Mining Companyeffective October 1, 1995. Filed herewith electronically

10.4 Amended and Restated Executive Supplemental RetirementPlan of Homestake Mining Company effective August 1, 1995. Filed herewith electronically

10.5 Supplemental Retirement Plan of HomestakeMining Company, amended and restated effective as ofJanuary 1, 1990 (including November 29, 1990 modification). Filed herewith electronically

10.6 Master Trust under the Homestake Mining CompanyDeferred Compensation Plans as of December 5, 1995. Filed herewith electronically

11 Computation of Earnings Per Share Filed herewith electronically

13 1995 Annual Report to Shareholders Filed herewith electronically

21 List of Subsidiaries Filed herewith electronicallY

23 Consent of Coopers & Lybrand L.L.P.,



Independent Auditors Filed herewith electronically

27 Financial Data Schedule Filed herewith electronically

</TABLE>



EXHIBIT 10.1

QUARTER CLAIM DEEMEDPRODUCTION AGREEMENT


AMENDMENT made this 4th day of July, 1995 ("Effective Date") betweenHomestake Canada Inc., successor in interest to International Corona ResourcesLtd. ("Homestake"), Teck Corporation ("Teck") (Homestake and Teck arecollectively referred to herein as "T/H") and Hemlo Gold Mines Inc., successorin interest to Noranda Exploration Company Limited (N.P.L.) ("Hemlo") to thatcertain Agreement between Teck Corporation , International Corona ResourcesLtd., and Noranda Exploration Company Limited (N.P.L.) made as of January 25,1983 and amended December 1, 1983 (the "Agreement").

WHEREAS, the Agreement contained an option in favor of Hemlo to acquirecertain mineral property defined therein as the Optioned Property and Hemlo,pursuant to exercise of the option, became the owner of the Optioned Property(hereinafter referred to as the "Quarter Claim") on terms and conditions set outin the Agreement, including but not limited to the obligation to pay to T/H a50% Net Profits Royalty and the obligation to provide hoisting and millingcapacity to T/H through facilities of Hemlo; and,

WHEREAS, for the term hereof T/H and Hemlo desire to (i) modify the



manner in which the 50% Net Profits Royalty is calculated and paid such thatHemlo will pay and T/H will receive monthly payments based on estimates ofreserves, grades, production rates and costs provided by Hemlo on the EffectiveDate without respect to Hemlo's actual rate of production and sale of gold fromthe Quarter Claim and (ii) make other amendments contained herein;

THEREFORE, for and in consideration of the mutual covenants andagreements contained herein, the parties do agree as follows:

1. Definitions. For the purposes of this Amendment, including the Schedulesattached hereto, the following words and expressions shall have the followingmeanings with respect to the Quarter Claim. All capitalized words and terms notdefined herein shall have the same meanings as are ascribed to them in theAgreement.

(a) "Deemed Gold Production" shall mean the number of troyounces of gold for which the Royalty shall be calculated and paid pursuant tothis Amendment. For each month while this Amendment is in effect, such numbershall be the product of (i) the Deemed Production Rate, (ii) the number ofcalendar days in the same month and (iii) the Production Factor.

(b) "Deemed Production Rate" shall mean 453.59 metric tonnesof ore per day.

(c) "Deemed Production Costs" shall mean the product of DeemedUnit Production Costs and the Deemed Production Rate.

(d) "Deemed Unit Production Costs" shall mean C$57.40 permetric tonne as shown in the last line of the Column on Schedule B entitled"Total Cost per Tonne to Recover

Gold ($C/T)" as that amount may be adjusted for Escalation. Hemlo acknowledgesthat such Costs include a component for all costs, charges, and fees included inthe Agreement as Operating Costs.

(e) "Deemed Revenue" shall mean that sum of money equal toDeemed Gold Production for the month for which the Royalty is being calculatedmultiplied by the average of the London final daily quotation per ounce of goldfor each trading day in the same month and converted from U. S. dollars intoCanadian dollars at a rate of exchange equal to the average of the daily Bank ofCanada noon rates of exchange between U. S. and Canadian dollars for eachbusiness day in such month. No adjustment shall be made to Deemed Revenue onaccount of silver.

(f) "Deemed Third Party Royalty" means for the period for whichit is being calculated the amount that would be payable for the same periodpursuant to the Third Party Royalty if such Third Party Royalty were calculatedon the basis of Deemed Gold Production, Deemed Revenue, and Deemed Production



Costs for the same period.

(g) "Escalation" shall mean the amount by which Deemed UnitProduction Costs may be increased or decreased annually in accordance withSchedule A and commencing as of January 1, 1996.

(h) "Estimated Production" shall mean the 304,976 troy ouncesof gold estimated by Hemlo to be recovered from the Quarter Claim after January1, 1995 as shown in the last line of the column on Schedule B entitled"Estimated Ounces Recovered".

(i) "Production Factor" shall mean 0.27377 and was derived bydividing the total number of ounces shown in the last line of the Column onSchedule B entitled "Estimated Ounces Recovered" by the total number of tonnesshown in the last line of the Column on Schedule B entitled "Estimated MinedTonnes".

(j) "Royalty" means the 50% Net Profits Royalty payable to T/Has provided in the Agreement and modified in this Amendment. The Royalty iscalculated and paid as provided in Section 3 of this Amendment.

(k) "Third Party Royalty" shall mean that 3% net smelterroyalty referred to in the Agreement determined in accordance with thatagreement made the 30th day of September, 1980 between 435198 Ontario Corp. andInternational Corona Resources Ltd., as amended.

(l) "Third Party Royalty Agreement" shall mean that agreementreferred to in Section 1(k).

2. Representations.

-2-

(a) Hemlo represents to T/H that Schedule B contains Hemlo'sgood faith estimates as of January 1, 1995 of reserves, grade, contained ounces,minable tonnes, ounces to be recovered, and costs with respect to the remainingmine life of the Quarter Claim at the time of Hemlo's execution of thisAmendment. T/H acknowledges that T/H has reviewed those estimates and enteredinto this Amendment after making independent analysis based on such estimates.Hemlo acknowledges that T/H relies upon the underlying factual informationcontained in such estimates in entering into this Amendment.

(b) Hemlo represents to T/H that T/H, and T/H represents toHemlo that Hemlo, is not in breach of the Agreement and that the Agreement isvalid and enforceable pursuant to its terms.



3. Net Profits Royalty Calculation and Payment.

(a) Commencing as of January 1, 1995, Hemlo shall pay theRoyalty to T/H until Hemlo has paid the Royalty with respect to cumulativeDeemed Gold Production equal to 95% of Estimated Production (which number, forgreater clarity, is equal to 289,727 troy ounces of gold).

(b) The Royalty shall be calculated for any month bysubtracting from Deemed Revenue the sum of (i) Deemed Production Costs for suchmonth, (ii) Hemlo's estimate of Ontario Mining Taxes payable with respect tosuch month, (iii) Deemed Third Party Royalty, and (iv) an amount equivalent todeductions that would have been appropriate under the Agreement for PostProduction Capital Expenditures, Interest Charges, and Reserve Charges, if any,and multiplying the remainder by .50. With respect to the calendar month inwhich cumulative Deemed Gold Production equals 95% of Estimated Production, theRoyalty shall be adjusted as is appropriate to reflect the number of ounces ofDeemed Gold Production in that month required to reach such 95%.

(c) Payment of the Royalty for each month shall be made notlater than the 20th day of the following month.

(d) Hemlo shall provide T/H with each Royalty payment detailsof its calculation showing monthly and cumulative Deemed Gold Production, theapplicable gold price and exchange rates, the monthly and cumulative DeemedThird Party Royalty, and any estimated Ontario Mining Taxes deducted.

(e) T/H shall have no obligation or liability of any kind toHemlo, including but not limited to the refund or payment of any Royalty, in theevent that the actual number of troy ounces of gold actually produced from theQuarter Claim on and after January 1, 1995 is for any reason less than 95% ofEstimated Production.

4. Actual Rates of Production; Suspension of Certain Obligations. Hemlo'sobligations

-3-

to (i) provide hoisting and milling capacity for the benefit of the QuarterClaim and (ii) mine and process ore from the Quarter Claim, as provided in theAgreement, shall be suspended from January 1, 1995 until this Amendmentterminates. Until this Amendment terminates Hemlo shall have the right to mineand mill ore from the Quarter Claim, and recover and sell gold therefrom, atrates determined by Hemlo in its sole discretion; provided, however, that Hemloshall at all times carry out all mining, milling, and other operations in a good



and minerlike fashion and in accordance with applicable laws and regulations andshall make all Third Party Royalty payments when due and shall defend, indemnifyand hold T/H harmless against any cost, loss, damage or liability arising fromHemlo's failure to comply with the terms and provisions of the Third PartyRoyalty Agreement.

5. Termination of Amendment; Subsequent Reduction of Net Profits Royalty.

This Amendment shall terminate on the day that the cumulativenumber of troy ounces of gold actually recovered from the Quarter Claim afterJanuary 1, 1995 is equal to 95% of Estimated Production (which number, forgreater clarity, is equal to 289,727 troy ounces of gold). Upon termination ofthis Amendment the rights and duties of the parties shall continue to begoverned by the Agreement, including but not limited to its provisions regardingpayment of the Royalty and the obligations to provide T/H with hoisting andmilling capacities, without regard to the provisions of this Amendment exceptthat the Royalty payable to T/H shall be reduced in perpetuity from 50% to 40%.For greater clarity, in the event that the actual production of precious metals(including gold and silver) from the Quarter Claim continues after terminationof this Amendment, the rights and duties of T/H and Hemlo to each other withrespect to the royalty payable to T/H on such production shall be governed bythe Agreement and not by this Amendment except that the Royalty on all suchproduction shall be 40%.

6. Escalation.

(a) Not later than March 31st of each year Deemed UnitProduction costs shall be increased or decreased annually in accordance withSchedule A. Each such increase or decrease shall be retroactively effective asof January 1 of the same year.

(b) If either party believes that extraordinary events affectingcosts or material changes in accounting practices at the Golden Giant Mine orthe Williams Mine render the annual Escalation calculated pursuant to Schedule Amaterially inappropriate for the purpose intended, such party shall notify theother in writing. Within fifteen (15) days of the receipt of such notice by theother party, both parties shall meet to try to agree on appropriate Escalationfor the relevant time period. If the parties do not so agree within thirty (30)days following such meeting, the parties shall arbitrate such Escalation beforea single arbitrator experienced in the matter of mining and milling costs,appointed by the President of the Canadian Institute of Mining and Metallurgy,whose decision shall be final and binding upon the parties. Each party shallsubmit a written proposal for such Escalation to the arbitrator within twenty(20) days of the arbitrator's appointment along with a justification therefor,including within such submittal all relevant costs

-4-



for from the Golden Giant or Williams Mine as the case may be. The arbitratorshall select either the Hemlo or the T/H proposal, whichever he deems to morereasonably reflect changes in costs that do or should apply to production fromthe Quarter Claim.

7. Records. Hemlo shall keep and maintain (i) records of actual productionfrom the Quarter Claim, including records of the quantities of tonnes mined andmilled and the number of ounces of gold recovered therefrom and (ii) suchaccounting and financial records as are necessary to calculate Escalation. Hemloshall report such records of production to T/H on a regular basis not lessfrequently than annually and make all such production, accounting and financialrecords available for inspection and copying by T/H from time to time as T/H mayrequest.

8. Governing Law. This Amendment shall be governed in accordance with thelaws of the Province of Ontario.

9. Effect. This Amendment shall not be construed by implication to depriveany party of any right to which it is expressly entitled under the Agreement.The parties acknowledge that the Agreement is a valid and subsisting agreementand, agree that, except as expressly amended herein, the Agreement shall remainin full force and effect.

10. Successors. This Amendment shall extend to and bind the parties heretoand their respective successors and permitted assigns.

11. Notices. Notices given and payments made pursuant to this Amendmentshall be given and made by personal delivery, mail, or (except for payment)facsimile transmission as follows:

Notices:

Teck Corporation: Hemlo Gold Mines Inc.:200 Burrard Street Suite 2902Vancouver, B.C. VC6 1G8 1 Adelaide Street East

Toronto, Ontario M5C 2Z9Attn: Senior Vice-President Attn: John Keyes

MiningFAX: 604-687-6100 FAX: 807-238-1013

Homestake Canada Inc.1000-700 West Pender StreetVancouver, B.C V6C 1G8Attn: PresidentFAX: 604-684-9831



-5-

Royalty payments shall be made in accordance with reasonableinstructions to Hemlo from Teck and Homestake. Until further notice Royaltypayments shall be make to Teck for the benefit of Homestake and Teck.

IN WITNESS WHEREOF, the parties have duly executed this Amendment as ofthe date first written above.

For Homestake Canada Inc. For Hemlo Gold Mines Inc.

By: _______________________ By: _______________________Its: Its:

For Teck Corporation

By: _______________________Its:

-6-



EXHIBIT 10.2

HOMESTAKE MINING COMPANY(Basic Plan Document)

-------------------------------------------------------------------------------

Date

TO:

SUBJECT: Change of Control Severance Plan

Homestake Mining Company ("Homestake") considers the establishment andmaintenance of a sound and vital management to be essential to protecting andenhancing the best interests of Homestake and its shareholders. In thisconnection, Homestake recognizes that the possibility of a change in control andthe uncertainty and questions which it may raise among management may result inthe departure or distraction of management personnel to the detriment ofHomestake and its shareholders. Accordingly, the Board of Directors of Homestake("Board") has determined that appropriate steps should be taken to reinforce andencourage the continued attention and dedication of members of Homestakemanagement, including yourself, to their assigned duties without distraction inthe face of the potentially disturbing circumstances arising from thepossibility of a change in control of the Company.

As a result, the Board has adopted a Change of Control Severance Plan("Plan") which will provide you with financial support in the event Homestakeundergoes a significant change of ownership or other change in control. Theterms of the Plan are set forth in this letter. If you accept the terms of thePlan, you should acknowledge such by signing the Verification and Acceptance atthe end of the letter. Your participation in the Plan will begin effective as ofthe date your acceptance is received by Homestake and will terminate effectiveas of the date of your 65th birthday.

1. Events Entitling You to Benefits

No benefits will be payable under the Plan unless there is aChange of Control (as defined below). You will become entitled to benefits underthe Plan if, within the three-year period following a Change of Control andprior to the date of your becoming age 65,



(i) Your employment is terminated involuntarily for reasons other than death,disability or discharge for Good and Sufficient Cause (as defined below);or

(ii) You voluntarily choose to terminate your employment for Good Reason (asdefined below).

As used herein, "Change of Control" means any of the following events:

(i) The Company is a party to a merger or combination under the terms of whichless than 75% of the shares in the resulting company are owned by theshareholders of the Company immediately preceding such event;

(ii) At least 75% in fair market value of the Company's assets are sold; or

(iii)At least 25% in voting power in election of directors of the Company'scapital stock is acquired by any one person or group as that term is usedin Rule 13d-5 under the Securities Exchange Act of 1934.

As used herein, voluntary termination by you of your employment for "GoodReason" means termination subsequent to a Change of Control of Homestakeresulting from the occurrence of one of the following events without yourexpress written consent:

(i) The assignment by Homestake to you of any duties inconsistent with yourpositions, duties, responsibilities, and status with Homestake immediatelyprior to the Change of Control, or a reduction in your responsibilities,titles, or offices as in effect immediately prior to a Change of Control,or any removal of you from or any failure to re-elect you to any suchpositions, except in connection with the involuntary termination of youremployment for Good and Sufficient Cause, or as a result of your death,disability or retirement, or voluntary termination by you for other thanGood Reason;

(ii) A reduction by Homestake in your base salary as in effect immediately priorto the Change of Control;

(iii)The requirement by Homestake that you be based anywhere other than withina 50-mile radius of your location immediately prior to a Change of Control,except for required travel on the Company's business to an extentsubstantially consistent with your present business travel obligations;

(iv) The failure by Homestake to continue in effect, or a change of yourparticipation or benefits under, any bonus or incentive compensation plan,any employee benefit plan qualified under Section 401 (a) of the InternalRevenue Code of 1954, as amended from time to time (the "Code"), any stockownership, stock purchase, stock option or other equity incentive plan, any



life, health, accident, disability or similar plan providing welfarebenefits or any plan or program of fringe benefits in which you areparticipating immediately prior to a Change of Control, the effect of whichwould be to materially reduce your benefits under such plans as suchexisted immediately prior to the Change of Control, or the failure byHomestake to provide you with the number of paid vacation days to which youare entitled in accordance with Homestake's general vacation policy ineffect immediately prior to the Change of Control; or

(v) The failure of Homestake to obtain the express assumption by any successorof Homestake's obligations under the Plan, as contemplated in Section 3.

As used herein, "Good and Sufficient Cause" means any act of fraud ordishonesty, or conviction of a felony involving moral turpitude or yourknowingly engaging in acts seriously detrimental to any of the operations ofHomestake.

2. Compensation (as defined below) and Benefits Payable To You

Compensation - A lump sum cash payment equal to two times your highestannual Compensation which is or would be reported on your Form W-2 for anycalendar year during the three-year period immediately preceding the date ofyour termination. The lump sum cash payment shall be payable in full within 10calendar days of the occurrence of the first event entitling you to benefitsunder the Plan.

Benefits

(i) Continuation of participation and coverage for a period of two years fromthe date of your termination under all Homestake life, health, accident,disability or similar plans providing welfare benefits, and all fringebenefit plans and programs which you are participating in immediately priorto your termination of employment, under the same coverages and on the sameterms as in effect immediately prior to the date of your termination (or inthe case of your voluntary termination for Good Reason following a Changeof Control as a result of a reduction in benefits, such coverages and termsas were in effect immediately prior to a Change of Control); provided thatif your continued participation is not possible under the general terms andprovisions of such plans and programs, Homestake shall arrange to provideyou with substantially similar benefits;

(ii) Relocation assistance, to the extent not provided by another employer.

Benefit accruals under Homestake employee benefit plans qualified underSection 401 (a) of the Code which you are participating in immediately prior toyour termination shall cease as of the date of your termination. You will become



entitled to payment of benefits under such plans in accordance with their terms.

Benefits payable under the Plan will be in lieu of any severance paybenefits provided under Homestake's general severance pay policy. In the eventyou have an outstanding employment agreement with Homestake in effect as of yourdate of termination and such agreement provides you with compensation andbenefits which will continue during the period of time coincident with thatcovered by this Plan, your benefits under the Plan will be provided only to theextent they exceed the benefits under such agreement.

As used herein, "Compensation" means all regular base salary; performancebonuses paid under the Homestake Mining Company Bonus Plan paid by the Companyto the Member; plus any pre-tax reductions of such compensation made at theelection of the Member under a Section 401(k), Cafeteria, Deferred Income orsimilar plans. All other payments to a Member, such as relocation

bonuses, tax equalization payments, fees, commissions, directors fees andpayments resulting from or relating to the exercise of stock option orappreciation rights are excluded.

If the payment of any compensation or other benefit pursuant to the Planwould constitute "applicable employee remuneration" with respect to a "coveredemployee" in excess of the annual limitation on deductibility by Homestakepursuant to Section 162(m) of the Code (or any successor provision), thenpayment of such excess amount shall be paid on March 16 of the next taxable yearof Homestake (or such earlier date as, in the opinion of counsel for Homestake,would not result in such excess amount being "applicable employee remuneration"in excess of the annual limitation on deductibility), together with interestfrom the time such excess amount would otherwise be payable under the Plan untilthe date of payment at the rate of 12% per annum.

3. Successors

As used herein, Homestake means Homestake (as defined above) and anysuccessor to its business and/or assets.

Homestake will require any successor (whether direct or indirect, bypurchase, merger, consolidation or otherwise) to all or substantially all of thebusiness and/or assets of Homestake by agreement to expressly assume Homestake'sobligations under the Plan in the same manner and to the same extent thatHomestake would be required to perform if no such succession had taken place.

4. Arbitration

Any controversy between you and Homestake involving the construction orapplication of any of the terms, provisions, or conditions of this Agreement



shall be settled by arbitration in accordance with the Commercial ArbitrationRules of the American Arbitration Association, then in effect, and judgment onthe award may be entered by any court having jurisdiction thereof. The exclusivelocation of the arbitration shall be San Francisco, California. The expensesreasonably incurred by both parties in connection with arbitration, includingattorney fees, shall be borne by Homestake.

5. General Provisions

No provision in this Plan shall be construed to guarantee continuedemployment by Homestake for any specified period of time, or to impair orinterfere with Homestake's right to dismiss its employees.

You will be entitled to reimbursement by Homestake of all reasonableexpenses, including attorney's fees, incurred by you in enforcing the provisionsof this Plan.

All payments are subject to applicable withholding taxes and income taxes.

Sections 280G and 4999 of the Code imposes penalties on the payor and payeeof certain "excess parachute payments." Very generally, parachute payments areamounts which are paid as a result of the change of control of a corporation andthe present value of which equals or exceeds a threshold of three times theemployee's average annual taxable compensation (excluding deferred compensation)for the five years preceding the year in which a change of control occurs.

If the employee has been with the Company, including predecessor or relatedentities, for less than five years, the employee's average annual compensationis that earned during the period of employment. If the threshold is exceeded,any parachute payments (excluding amounts which constitute reasonablecompensation) which exceed one times your average annual taxable compensationfor the five-year period preceding the Change of Control will be deemed "excessparachute payments" which are (i) not deductible by the payor corporation, and(ii) subject the payee to a non-deductible excise tax equal to 20% of thepayment.

The IRS has proposed regulations which define a "change of control." Someor all of the events which constitute a Change of Control for purposes of thePlan also constitute a change of control under the regulations. In the event aChange of Control occurs which also constitutes a change of control under theIRS regulations, you will be subject to the non-deductible excise tax if yourbenefits under the Plan, together with any other amounts that are deemed to beconditioned on a change of control, equal or exceed the threshold amount.

If the amount of benefits you would receive from the Plan on an after-taxbasis (considering your expected federal and state income tax brackets and theeffect of any non-deductible excise tax) would be greater if benefits under the



Plan were limited so that no excess parachute payments existed, benefits underthe Plan will be so limited.

This Plan is intended to be an "employee welfare benefit plan" as definedin the Employee retirement Income Security Act of 1974 ("ERISA"). Homestakeshall be the "Plan Administrator" and the "named fiduciary" of the Plan, as suchterms are defined in ERISA ss.ss.3(16)(a) and 402(a)(1), respectively. The PlanAdministrator shall have the sole discretionary authority for interpreting thePlan, for making determinations on questions of fact relating to the operationof the Plan, and for establishing procedures for administration of the Plan.

Please indicate your acceptance of the terms of the Plan by signing onecopy of this letter and returning it to me in the enclosed envelope. The secondcopy is for your own records.

Sincerely,

VERIFICATION AND ACCEPTANCE

I have read the foregoing letter and understand that the Change of ControlSeverance Plan defines the entire obligation of Homestake with respect to thebenefits identified above and is limited to those benefits. I further understandthat the Plan modifies Homestake's obligations under Homestake's generalseverance pay policy in the manner described above and that the opportunity toreceive the special benefits provided under the Plan represents valuableconsideration for this modification. I accept the terms of the Plan.

Date:_____________ ______________________________



EXHIBIT 10.3

DEFERRED COMPENSATION PLAN

Homestake Mining Company

Effective October 1, 1995

TABLE OF CONTENTS<TABLE><CAPTION>

Page

<S> <C>Purpose .................................................................................................... 1

ARTICLE 1 Definitions...................................................................................... 1

ARTICLE 2 Selection, Enrollment, Eligibility............................................................... 6

2.1 Selection by Committee................................................................. 62.2 Enrollment Requirements................................................................. 62.3 Eligibility; Commencement of Participation............................................. 6

ARTICLE 3 Deferral Commitments/Interest Crediting............................................................6

3.1 Minimum Deferral.........................................................................63.2 Maximum Deferral....................................................................... 73.3 Election to Defer; Effect of Election Form............................................. 73.4 Withholding of Deferral Amounts..........................................................73.5 Interest Crediting Prior to Distribution............................................... 83.6 Installment Distributions................................................................83.7 FICA and Other Taxes................................................................... 9

ARTICLE 4 Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal Election.........................9

4.1 Short-Term Payout........................................................................94.2 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies....................94.3 Withdrawal Election.................................................................... 10

ARTICLE 5 Retirement Benefit................................................................................10

5.1 Retirement Benefit......................................................................105.2 Payment of Retirement Benefits..........................................................10



5.3 Death Prior to Completion of Retirement Benefits....................................... 10

ARTICLE 6 Pre-Retirement Survivor Benefit.................................................................. 11

6.1 Pre-Retirement Survivor Benefit........................................................ 116.2 Payment of Pre-Retirement Survivor Benefits............................................ 116.3 Restriction in the Event of Suicide or Falsely Provided Information.................... 11

-i-

<CAPTION>Page

<S> <C>ARTICLE 7 Termination Benefit.............................................................................. 12

7.1 Termination Benefits................................................................... 127.2 Payment of Termination Benefit......................................................... 12

ARTICLE 8 Disability Waiver and Benefit.................................................................... 12

8.1 Disability Waiver...................................................................... 128.2 Disability Benefit..................................................................... 13

ARTICLE 9 Beneficiary Designation.......................................................................... 13

9.1 Beneficiary............................................................................ 139.2 Beneficiary Designation; Change; Spousal Consent....................................... 139.3 Acknowledgment......................................................................... 139.4 No Beneficiary Designation............................................................. 139.5 Doubt as to Beneficiary................................................................ 14

ARTICLE 10 Leave of Absence................................................................................ 14

10.1 Paid Leave of Absence.................................................................. 1410.2 Unpaid Leave of Absence................................................................ 14

ARTICLE 11 Termination, Amendment or Modification.......................................................... 15

11.1 Termination............................................................................ 1511.2 Amendment.............................................................................. 1511.3 Interest Rate in the Event of a Change in Control and Interest......................... 16

ARTICLE 12 Administration.................................................................................. 16

12.1 Committee Duties....................................................................... 1612.2 Agents................................................................................. 1612.3 Binding Effect of Decisions............................................................ 1612.4 Indemnity of Committee................................................................. 1612.5 Employer Information................................................................... 16

ARTICLE 13 Other Benefits and Agreements................................................................... 17

13.1 Coordination with Other Benefits....................................................... 17

-ii-

<CAPTION>

<S> <C>ARTICLE 14 Pension Benefit Credit and Savings Plan Augmentation Contribution............................... 17

14.1 Pension Benefit Credit................................................................. 1714.2 Savings Plan Augmentation Contribution................................................. 18

ARTICLE 15 Claims Procedures............................................................................... 18

15.1 Claims Procedure....................................................................... 18



15.2 Arbitration............................................................................ 1915.3 Legal Action........................................................................... 19

ARTICLE 16 Trust........................................................................................... 19

16.1 Establishment of the Trust............................................................. 1916.2 Interrelationship of the Plan and the Trust............................................ 19

ARTICLE 17 Miscellaneous................................................................................... 19

17.1 Unsecured General Creditor..............................................................1917.2 Employer's Liability................................................................... 2017.3 Nonassignability....................................................................... 2017.4 Not a Contract of Employment........................................................... 2017.5 Furnishing Information................................................................. 2017.6 Terms.................................................................................. 2017.7 Captions............................................................................... 2117.8 Governing Law.......................................................................... 2117.9 Notice................................................................................. 2117.10 Successors............................................................................. 2117.11 Spouse's Interest...................................................................... 2117.12 Validity............................................................................... 2117.13 Incompetent............................................................................ 2117.14 Court Order............................................................................ 2217.15 Distribution in the Event of Taxation.................................................. 2217.16 Taxes and Withholding.................................................................. 2217.17 Legal Fees To Enforce Rights After Change in Control................................... 22

</TABLE>

-iii-


DEFERRED COMPENSATION PLAN

Effective October 1, 1995

Purpose

The purpose of this Plan is to provide specified benefits to a select groupof management, highly compensated Employees and Directors who contributematerially to the continued growth, development and future business success ofHomestake Mining Company, a Delaware corporation, and its subsidiaries, if any,that sponsor this Plan. This Plan shall be unfunded for tax purposes and forpurposes of Title I of ERISA.

ARTICLE 1Definitions

For purposes hereof, unless otherwise clearly apparent from the context,the following phrases or terms shall have the following indicated meanings:

1.1 "Account Balance" shall mean the sum of (i) the Deferral Amount, plus (ii)interest credited in accordance with all the applicable interest creditingprovisions of this Plan, less (iii) all distributions.

1.2 "Affiliate" shall mean a corporation or other form of enterprise in whichthe Company has directly or indirectly, an ownership interest of 50% ormore and is designated by the Compensation Committee to participate in thePlan.

1.3 "Annual Bonus" shall mean any compensation, in addition to Base AnnualSalary, paid annually to a Participant as an Employee under any Employer'sannual bonus and incentive plans.

1.4 "Annual Deferral Amount" shall mean that portion of a Participant's Base



Annual Salary, Annual Bonus and/or Directors Fees that a Participant electsto have and is deferred, in accordance with Article 3, for any one PlanYear. In the event of a Participant's Retirement, Disability (if deferralscease in accordance with Section 8.1), death or a Termination of Employmentprior to the end of a Plan Year, such year's Annual Deferral Amount shallbe the actual amount withheld prior to such event.

1.5 "Base Annual Salary" shall mean the annual compensation, excluding bonuses,disability payments, commissions, overtime, relocation expenses, taxequalization payments, loan forgiveness, incentive payments, non-monetaryawards, directors fees

-1-

and payments resulting from or relating to the exercise of stock options orappreciation rights, paid to a Participant for employment services renderedto an Employer, before reduction for compensation deferred pursuant to allqualified, non-qualified and Code Section 125 plans of any Employer.

1.6 "Beneficiary" shall mean a Participant and one or more persons, trusts,estates or other entities, designated in accordance with Article 9, thatare entitled to receive benefits under this Plan upon the death of aParticipant.

1.7 "Beneficiary Designation Form" shall mean the form established from time totime by the Committee that a Participant completes, signs and returns tothe Committee to designate one or more Beneficiaries.

1.8 "Board" shall mean the Board of Directors of the Company.

1.9 "Bonus Rate" shall mean, for a Plan Year, an interest rate, if any,determined by the Committee, in its sole discretion, which rate shall bedetermined and announced before the commencement of the Plan Year for thewhich the rate applies. This rate may be zero for any Plan Year.

1.10 "Change in Control" shall mean:

(a) The Company is a party to a merger or combination under the terms ofwhich less than 75% of the shares in the resulting company are ownedby the shareholders of the Company immediately preceding such event;or

(b) At least 75% in fair market value of the Company's assets are sold; or

(c) At least 25% in voting power in election of directors of the Company'scapital stock is acquired by any one person or group as that term isused in Rule 13d-5 under the Securities Exchange Act of 1934.

1.11 "Claimant" shall have the meaning set forth in Section 15.1.

1.12 "Code" shall mean the Internal Revenue Code of 1986, as may be amended fromtime to time.

1.13 "Committee" shall mean the Compensation Committee of the Board, asconstituted from time to time, or, in the event there is no such Committeeof the Board, means the Board.

1.14 "Company" shall mean Homestake Mining Company.

-2-

1.15 "Crediting Rate" shall mean, for each Plan Year, an interest ratedetermined and announced by the Committee before the Plan Year for which itis to be used that is equal to the Moody's Rate. The Moody's Rate for aPlan Year shall be an interest rate that (i) is published in Moody's BondRecord under the heading of "Moody's Corporate Bond Yield Averages", (or



its successor if it is changed or eliminated) (ii) is equal to the averagecorporate bond yield most recently published prior to the Plan Year forwhich the rate is to be used.

1.16 "Deferral Amount" shall mean the sum of all of a Participant's AnnualDeferral Amounts.

1.17 "Deduction Limitation" shall mean the following described limitation on theannual benefit that may be distributed pursuant to the provisions of thisPlan. Except as otherwise provided, this limitation shall be applied to alldistributions under this Plan. If an Employer determines in good faith atany time prior to the occurrence of a Change in Control that there is areasonable likelihood that any compensation paid to a Participant for ataxable year of the Employer would not be deductible by the Employer solelyby reason of the limitation under Code Section 162(m), then to the extentdeemed necessary by the Employer to ensure that the entire amount of anydistribution to the Participant pursuant to this Plan prior to the Changein Control is deductible, the Employer may defer all or any portion of adistribution under this Plan. Any amounts deferred pursuant to thislimitation shall continue to be credited with interest in accordance withSection 3.5 below. The amounts so deferred and interest thereon shall bedistributed to the Participant or his or her Beneficiary at the earliestpossible date, as determined by the Employer in good faith, on which thedeductibility of compensation paid or payable to the Participant for thetaxable year of the Employer during which the distribution is made will notbe limited by Section 162(m), or if earlier, the effective date of a Changein Control.

1.18 "Director" shall mean any member of the board of directors of any Employer.

1.19 "Directors Fees" shall mean the annual fees paid by any Employer, includingretainer fees and meetings fees, as compensation for serving on the boardof directors.

1.20 "Disability" shall mean a period of disability during which a Participantqualifies for benefits under the Participant's Employer's long-termdisability plan, or, if a Participant does not participate in such a plan,a period of disability during which the Participant would have qualifiedfor benefits under such a plan had the Participant been a participant insuch a plan, as determined in the sole discretion of the Committee. If theParticipant's Employer does not sponsor such a plan or discontinues tosponsor such a plan, Disability shall be determined by the Committee in itssole discretion.

1.21 "Disability Benefit" shall mean the benefit set forth in Article 8.

-3-

1.22 "Election Form" shall mean the form established from time to time by theCommittee that a Participant completes, signs and returns to the Committeeto make an election under the Plan.

1.23 "Employee" shall mean a person who is an employee of any Employer.

1.24 "Employer(s)" shall mean the Company and/or any of its Affiliates that havebeen selected by the Board to participate in the Plan.

1.25 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, asmay be amended from time to time.

1.26 "Participant" shall mean any Employee or Director (i) who is selected toparticipate in the Plan, (ii) who elects to participate in the Plan, (iii)who signs a Plan Agreement, an Election Form and a Beneficiary DesignationForm, (iv) whose signed Plan Agreement, Election Form and BeneficiaryDesignation Form are accepted by the Committee, (v) who commencesparticipation in the Plan, and (vi) whose Plan Agreement has notterminated.

1.27 "Plan" shall mean the Company's Deferred Compensation Plan, which shall beevidenced by this instrument and by each Plan Agreement, as may be amendedfrom time to time.



1.28 "Plan Agreement" shall mean a written agreement, as may be amended fromtime to time, which is entered into by and between an Employer and aParticipant. Each Plan Agreement executed by a Participant shall providefor the entire benefit to which such Participant is entitled to under thePlan, and the Plan Agreement bearing the latest date of acceptance by theCommittee shall govern such entitlement.

1.29 "Plan Year" shall, for the first Plan Year, begin on October 1, 1995, andend on December 31, 1995. For each Plan Year thereafter, the Plan Yearshall begin on January 1 of each year and continue through December 31.

1.30 "Preferred Rate" shall mean, for each Plan Year, an interest rate that is120% of the total of the Crediting Rate and the Bonus Rate.

1.31 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth inArticle 6.

1.32 "Retirement", "Retires" or "Retired" shall mean, with respect to anEmployee, severance from employment from all Employers for any reason otherthan a leave of absence, death or disability on or after the earlier of theattainment of (a) age sixty-five (65) or (b) age fifty-five with five (5)years of service; and shall mean, with respect to a Director who is not anEmployee, severance of his or her directorships with all Employers on orafter the latter of (y) the attainment of age seventy (70), or (z) in the

-4-

sole discretion of the Committee, an age later than age seventy (70). If aParticipant is both an Employee and a Director, Retirement shall not occuruntil he or she Retires as both an Employee and a Director; provided,however, that such a Participant may elect, prior to Retirement and inaccordance with the policies and procedures established by the Committee,to Retire for purposes of this Plan at the time he or she Retires as anEmployee, which Retirement shall be deemed to be a retirement as anEmployee.

1.33 "Retirement Benefit" shall mean the benefit set forth in Article 5.

1.34 "Short-Term Payout" shall mean the payout set forth in Section 4.1.

1.35 "Termination Benefit" shall mean the benefit set forth in Article 7.

1.36 "Termination of Employment" shall mean the ceasing of employment andservice as a Director with all Employers, voluntarily or involuntarily, forany reason other than Retirement, Disability, death or an authorized leaveof absence. If a Participant is both an Employee and a Director, aTermination of Employment shall occur only upon the termination of the lastposition held; provided, however, that such a Participant may elect, inaccordance with the policies and procedures established by the Committee,to be treated for purposes of this Plan as having experienced a Terminationof Employment at the time he or she ceases employment with an Employer asan Employee.

1.37 "Trust" shall mean the trust established pursuant to that certain MasterTrust Agreement, dated as of December 5, 1995, between the Company and thetrustee named therein, as amended from time to time.

1.38 "Unforeseeable Financial Emergency" shall mean an unanticipated emergencythat is caused by an event beyond the control of the Participant orBeneficiary that would result in severe financial hardship to theParticipant or Beneficiary resulting from (i) a sudden and unexpectedillness or accident of the Participant or Beneficiary or a dependent of theParticipant, (ii) a loss of the Participant's property due to casualty, or(iii) such other extraordinary and unforeseeable circumstances arising as aresult of events beyond the control of the Participant, all as determinedin the sole discretion of the Committee.

1.39 "Years of Plan Participation" shall mean the total number of full PlanYears a Participant has been a Participant in the Plan prior to his or herTermination of Employment (determined without regard to whether deferralelections are made under this Plan). For purposes of a Participant's first



Plan Year of Participation only, any partial Plan Year of participationshall be treated as a full Plan Year.

-5-

1.40 "Years of Service" shall mean the total number of full years in which aParticipant has been employed by one or more Employers. For purposes ofthis definition, a year of employment shall be a 365 day period (or 366 dayperiod in the case of a leap year) that, for the first year of employment,commences on the Employee's date of hiring and that, for any subsequentyear, commences on an anniversary of that hiring date. Any partial year ofemployment shall not be counted.

ARTICLE 2Selection, Enrollment, Eligibility

2.1 Selection by Committee. Participation in the Plan shall be limited to aselect group of management, highly compensated Employees and Directors ofthe Employers. From that group, the Committee shall select, in its solediscretion, Employees and Directors to participate in the Plan.

2.2 Enrollment Requirements. As a condition to participation, each selectedEmployee or Director shall complete, execute and return to the Committeewithin 30 days of selection a Plan Agreement, an Election Form and aBeneficiary Designation Form. In addition, the Committee shall establishfrom time to time such other enrollment requirements as it determines inits sole discretion are necessary.

2.3 Eligibility; Commencement of Participation. Provided an Employee orDirector selected to participate in the Plan has met all enrollmentrequirements set forth in this Plan and required by the Committee,including returning all required documents to the Committee within 30 daysof selection, that Employee or Director shall commence participation in thePlan on the first day of the month following the month in which theemployee or Director completes all enrollment requirements. If an Employeeor a Director fails to meet all such requirements within the required 30day period, that Employee or the Director shall not be eligible toparticipate in the Plan until the first day of the Plan Year following thedelivery to and acceptance by the Committee of the required documents.

ARTICLE 3Deferral Commitments/Interest Crediting

3.1 Minimum Deferral.

(a) Minimum. For each Plan Year, a Participant may elect to defer BaseAnnual Salary, Annual Bonus and/or Directors Fees in the followingminimum amounts for each deferral elected:

-6-

MinimumDeferral Amount

Base Annual Salary $2,000Annual Bonus $2,000Directors Fees $ 0

If no election is made, the amount deferred shall be zero.

(b) Short Plan Year. If a Participant first becomes a Participant afterthe first day of a Plan Year, or in the case of the first Plan Year ofthe Plan itself, the minimum Base Annual Salary deferral shall be anamount equal to the minimum set forth above, multiplied by a fraction,the numerator of which is the number of complete months remaining in



the Plan Year and the denominator of which is 12.

3.2 Maximum Deferral. For each Plan Year, a Participant may elect to defer BaseAnnual Salary, Annual Bonus and/or Directors Fees up to the followingmaximum percentages for each deferral elected:

MaximumDeferral Amount

Base Annual Salary 100%Annual Bonus 100%Directors Fees 100%

3.3 Election to Defer; Effect of Election Form. In connection with aParticipant's commencement of participation in the Plan, the Participantshall make a deferral election by timely delivering to the Committee (inaccordance with Section 2.3 above) a completed and signed Election Form,which election and form must be accepted by the Committee for a validelection to exist. For each succeeding Plan Year, a new Election Form mustbe delivered to the Committee, in accordance with its rules and procedures,before the end of the Plan Year preceding the Plan Year for which theelection is made. If no Election Form is timely delivered for a Plan Year,no Annual Deferral Amount shall be withheld for that Plan Year.

3.4 Withholding of Deferral Amounts. For each Plan Year, the Base Annual Salaryportion of the Annual Deferral Amount shall be withheld each payroll periodin equal amounts from the Participant's Base Annual Salary. The AnnualBonus and/or Directors Fees portion of the Annual Deferral Amount shall bewithheld at the time the Annual Bonus or Directors Fees are or otherwisewould be paid to the Participant.

-7-

3.5 Interest Crediting Prior to Distribution. Prior to any distribution ofbenefits under Articles 4, 5, 6, 7 or 8, interest shall be credited andcompounded annually on a Participant's Account Balance as though the AnnualDeferral Amount for that Plan Year was withheld at the beginning of thePlan Year or, in the case of the first year of Plan participation, waswithheld on the date that the Participant commenced participation in thePlan. The rate of interest for crediting shall be the Preferred Rate,except as otherwise provided in this Plan. In the event of Retirement,Disability, death or Termination of Employment prior to the end of a PlanYear, the basis for that year's interest crediting will be a fraction ofthe full year's interest, based on the number of full months that theParticipant was employed with the Employer during the Plan Year prior tothe occurrence of such event. If a distribution is made under this Plan,for purposes of crediting interest, the Account Balance shall be reduced asof the first day of the month in which the distribution is made.

3.6 Installment Distributions. In the event a benefit is paid in installmentsunder Articles 5, 6 or 8, installment payment amounts shall be determinedin the following manner:

(a) Interest Rate. The interest rate to be used to calculate installmentpayment amounts shall be a fixed interest rate that is determined byaveraging the Preferred Rates for the Plan Year in which installmentpayments commence and the four (4) preceding Plan Years. If aParticipant has completed fewer than five (5) Plan Years, this averageshall be determined using the Preferred Rates for the Plan Yearsduring which the Participant participated in the Plan.

b) "Deemed" Installment Payments. For purposes of calculating installmentpayment amounts only (and notwithstanding the fact that installmentpayments shall actually be paid monthly), installment payments foreach 12 month period, starting with the date that the Participantbecame eligible to receive a benefit under this Plan (the "EligibilityDate") and continuing thereafter for each additional 12 month perioduntil the Participant's Account Balance is paid in full, shall bedeemed to have been paid in one sum as of the first day of each such12 month period. (The result of this is that interest crediting shallbe made on an annual basis after taking into account the "deemed"annual installment payment for the 12 month period.)



(c) Amortization. Based on the interest rate determined in accordance withSection 3.6(a) above and the "deemed" form of installment paymentsdetermined in accordance with Section 3.6(b) above, the Participant'sAccount Balance shall be amortized in equal annual installmentpayments over the term of the specified payment period (starting as ofthe Eligibility Date and stated in years rather than months).

-8-

(d) Monthly Payments. The annual installment payment determined in Section3.6(c) above shall be divided by 12, and the resulting number shall bethe monthly installment payment that is to be paid each month duringthe specified monthly installment payment period in accordance withthe other terms and conditions of this Plan.

3.7 FICA and Other Taxes. For each Plan Year in which an Annual Deferral Amountis being withheld, the Participant's Employer(s) shall withhold from thatportion of the Participant's Base Annual Salary, Annual Bonus or DirectorsFees that is not being deferred, the Participant's share of FICA and otheremployment taxes. If necessary, the Committee shall reduce the AnnualDeferral Amount in order to comply with this Section 3.7.

ARTICLE 4Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal Election

The following provisions govern payment of benefits prior to Termination ofEmployment, Retirement, death or Disability.

4.1 Short-Term Payout. Subject to the Deduction Limitation, in connection witheach election to defer an Annual Deferral Amount, a Participant may electto receive a future "Short-Term Payout" from the Plan with respect to thatAnnual Deferral Amount. The Short-Term Payout shall be a lump sum paymentin an amount that is equal to the Annual Deferral Amount plus interestcredited in the manner provided in Section 3.5 above on that amount, butusing the applicable interest rate set forth in Section 7.1 below. Subjectto the other terms and conditions of this Plan, each Short-Term payoutelected shall be paid within 60 days of the first day of the Plan Year thatis 5 years after the first day of the Plan Year in which the AnnualDeferral Amount is actually deferred.

4.2 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies. Ifthe Participant experiences an Unforeseeable Financial Emergency, theParticipant may petition the Committee to (i) suspend any deferralsrequired to be made by a Participant and/or (ii) receive a partial or fullpayout from the Plan. The payout shall not exceed the lesser of theParticipant's Account Balance, calculated as if such Participant werereceiving a Termination Benefit, or the amount reasonably needed to satisfythe Unforeseeable Financial Emergency. If, subject to the sole discretionof the Committee, the petition for a suspension and/or payout is approved,suspension shall take effect upon the date of approval and any payout shallbe made within 60 days of the date of approval. The payment of any amountunder this Section 4.2 shall be subject to the Deduction Limitation.

-9-

4.3 Withdrawal Election. A Participant may elect, at any time, to withdraw allof his or her Account Balance less a 10% withdrawal penalty (the net amountshall be referred to as the "Withdrawal Amount"). No partial withdrawals ofthat balance shall be allowed. The Participant shall make this election bygiving the Committee advance written notice of the election in a formdetermined from time to time by the Committee. The penalty shall be equalto 10% of the Participant's Account Balance determined immediately prior tothe withdrawal. The Participant shall be paid the Withdrawal Amount within60 days of his or her election. Once the Withdrawal Amount is paid, theParticipant's participation in the Plan shall terminate and the Participant



shall not be eligible to participate in the Plan in the future. The paymentof this Withdrawal Amount shall be subject to the Deduction Limitation.

ARTICLE 5Retirement Benefit

The following provisions govern payment of benefits after Termination ofEmployment, Retirement, death or Disability.

5.1 Retirement Benefit. Subject to the Deduction Limitation, a Participant whoRetires shall receive, as a Retirement Benefit, his or her Account Balance.

5.2 Payment of Retirement Benefits. A Participant, in connection with his orher commencement of participation in the Plan, shall elect on an ElectionForm to receive the Retirement Benefit in a lump sum or in equal monthlypayments (the latter determined in accordance with Section 3.6 above) overa period of 60, 120 or 180 months. The Participant may change his or herelection to an allowable alternative payout period by submitting a newElection Form to the Committee, provided that any such Election Form issubmitted at least 3 years prior to the Participant's Retirement and isaccepted by the Committee in its sole discretion. The Election Form mostrecently accepted by the Committee shall govern the payout of theRetirement Benefit. The lump sum payment shall be made, or installmentpayments shall commence, no later than 60 days after the date theParticipant Retires.

5.3 Death Prior to Completion of Retirement Benefits. If a Participant diesafter Retirement but before the Retirement Benefit is paid in full, theParticipant's unpaid Retirement Benefit payments shall continue and shallbe paid to the Participant's Beneficiary (a) over the remaining number ofmonths and in the same amounts as that benefit would have been paid to theParticipant had the Participant survived, or (b) in a lump sum, ifrequested by the Beneficiary and allowed in the sole discretion of theCommittee, that is equal to the Participant's unpaid remaining AccountBalance.

-10-

ARTICLE 6Pre-Retirement Survivor Benefit

6.1 Pre-Retirement Survivor Benefit. Subject to the Deduction Limitation, andexcept as provided in Section 6.3 below, if a Participant dies before he orshe Retires, experiences a Termination of Employment or suffers aDisability, the Participant's Beneficiary shall receive a Pre-RetirementSurvivor Benefit equal to the Participant's Account Balance.

6.2 Payment of Pre-Retirement Survivor Benefits. A Participant, in connectionwith his or her commencement of participation in the Plan, shall elect onan Election Form whether the Pre-Retirement Survivor Benefit shall bereceived by his or her Beneficiary in a lump sum or in equal monthlypayments (the latter determined in accordance with Section 3.6 above) overa period of 60, 120 or 180 months. The Participant may change this electionto an allowable alternative payout period by submitting a new Election Formto the Committee, which form must be accepted by the Committee in its solediscretion. The Election Form most recently accepted by the Committee priorto the Participant's death shall govern the payout of the Participant'sPre-Retirement Survivor Benefit. Despite the foregoing, if theParticipant's Account Balance at the time of his or her death is less than$25,000, payment of the Pre-Retirement Survivor Benefit may be made, in thesole discretion of the Committee, in a lump sum or in installment paymentsthat do not exceed five years in duration. The lump sum payment shall bemade, or installment payments shall commence, no later than 60 days afterthe date the Committee is provided with proof that is satisfactory to theCommittee of the Participant's death.

6.3 Restriction in the Event of Suicide or Falsely Provided Information. In theevent of a Participant's suicide within 2 years after the Participant firstbecomes a Participant, or in the event the Participant's death is



determined to be from a bodily or mental cause or causes, the informationabout which was withheld, knowingly concealed, or falsely provided by theParticipant if requested to furnish evidence of good health, thePre-Retirement Survivor Benefit shall be equal to the sum of theParticipant's Annual Deferral Amounts, without interest, all determined asof his or her date of death.

-11-

ARTICLE 7Termination Benefit

7.1 Termination Benefits. Subject to the Deduction Limitation, if a Participantexperiences a Termination of Employment prior to his or her Retirement,death or Disability, the Participant shall receive a Termination Benefit,which shall be equal to the Participant's Account Balance, with interestcredited in the manner provided in Section 3.5 above, but using theapplicable interest rate set forth in the following schedule:

Completion of Years of Plan Participation Applicable Rate

Less than five years Crediting Rate

Five or more years Preferred Rate

7.2 Payment of Termination Benefit. The Termination Benefit shall be paid in alump sum within 60 days of the Termination of Employment.

ARTICLE 8Disability Waiver and Benefit

8.1 Disability Waiver.

(a) Eligibility. By participating in the Plan, all Participants areeligible for this waiver.

(b) Waiver of Deferral; Credit for Plan Year of Disability. A Participantwho is determined by the Committee to be suffering from a Disabilityshall be excused from fulfilling that portion of the Annual DeferralAmount commitment that would otherwise have been withheld from aParticipant's Base Annual Salary, Annual Bonus and/or Directors Feesfor the Plan Year during which the Participant first suffers aDisability. During the period of Disability, the Participant shall notbe allowed to make any additional deferral elections.

(c) Return to Work. If a Participant returns to employment or service as aDirector with an Employer after a Disability ceases, the Participantmay elect to defer an Annual Deferral Amount for the Plan Yearfollowing his or her return to employment or service and for everyPlan Year thereafter while a Participant in the Plan; provided suchdeferral elections are otherwise allowed and an

-12-

Election Form is delivered to and accepted by the Committee for eachsuch election in accordance with Section 3.3 above.

8.2 Disability Benefit. A Participant suffering a Disability shall, for benefitpurposes under this Plan (but not for purposes of annual deferrals),continue to be considered to be employed or in the service of an Employeras a Director and shall be eligible for the benefits provided for inArticles 4, 5, 6 or 7 in accordance with the provisions of those Articles.Notwithstanding the above, the Committee shall have the right, in its soleand absolute discretion and for purposes of this Plan only, to terminate aParticipant's employment or service as a Director at any time after suchParticipant is determined to be permanently disabled (i) under theParticipant Employer's long-term disability plan (or would have beendetermined to be permanently disabled had he or she participated in that



plan), or (ii) if such a plan does not exist, by the Committee in its solediscretion.

ARTICLE 9Beneficiary Designation

9.1 Beneficiary. Each Participant shall have the right, at any time, todesignate his or her Beneficiary(ies) (both primary as well as contingent)to receive any benefits payable under the Plan to a beneficiary upon thedeath of a Participant. The Beneficiary designated under this Plan may bethe same as or different from the Beneficiary designation under any otherplan of an Employer in which the Participant participates.

9.2 Beneficiary Designation; Change; Spousal Consent. A Participant shalldesignate his or her Beneficiary by completing and signing the BeneficiaryDesignation Form, and returning it to the Committee or its designatedagent. A Participant shall have the right to change a Beneficiary bycompleting, signing and otherwise complying with the terms of theBeneficiary Designation Form and the Committee's rules and procedures, asin effect from time to time. If the Participant names someone other thanhis or her spouse as a Beneficiary, a spousal consent, in the formdesignated by the Committee, must be signed by that Participant's spouseand returned to the Committee. Upon the acceptance by the Committee of anew Beneficiary Designation Form, all Beneficiary designations previouslyfiled shall be canceled. The Committee shall be entitled to rely on thelast Beneficiary Designation Form filed by the Participant and accepted bythe Committee prior to his or her death.

9.3 Acknowledgment. No designation or change in designation of a Beneficiaryshall be effective until received, accepted and acknowledged in writing bythe Committee or its designated agent.

9.4 No Beneficiary Designation. If a Participant fails to designate aBeneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if alldesignated Beneficiaries predecease the Participant or die prior tocomplete distribution of the Participant's

-13-

benefits, then the Participant's designated Beneficiary shall be deemed tobe his or her surviving spouse. If the Participant has no surviving spouse,the benefits remaining under the Plan to be paid to a Beneficiary shall bepayable to the executor or personal representative of the Participant'sestate.

9.5 Doubt as to Beneficiary. If the Committee has any doubt as to the properBeneficiary to receive payments pursuant to this Plan, the Committee shallhave the right, exercisable in its discretion, to cause the Participant'sEmployer to withhold such payments until this matter is resolved to theCommittee's satisfaction.

ARTICLE 10Leave of Absence

10.1 Paid Leave of Absence. If a Participant is authorized by the Participant'sEmployer for any reason to take a paid leave of absence from the employmentof the Employer, the Participant shall continue to be considered employedby the Employer and the Annual Deferral Amount shall continue to bewithheld during such paid leave of absence in accordance with Section 3.3.

10.2 Unpaid Leave of Absence. If a Participant is authorized by theParticipant's Employer for any reason to take an unpaid leave of absencefrom the employment of the Employer, the Participant shall continue to beconsidered employed by the Employer and the Participant shall be excusedfrom making deferrals until the earlier of the date the leave of absenceexpires or the Participant returns to a paid employment status. Upon suchexpiration or return, deferrals shall resume for the remaining portion ofthe Plan Year in which the expiration or return occurs, based on thedeferral election, if any, made for that Plan Year. If no election was madefor that Plan Year, no deferral shall be withheld.



-14-

ARTICLE 11Termination, Amendment or Modification

11.1 Termination. Any Employer reserves the right to terminate the Plan at anytime with respect to its participating Employees and Directors by theactions of its board of directors. Upon the termination of the Plan, allPlan Agreements of a Participant shall terminate and his or her AccountBalance, determined as if he or she had experienced a Termination ofEmployment on the date of Plan termination or, if Plan termination occursafter the date upon which the Participant was eligible to Retire, theParticipant had Retired on the date of Plan termination, shall be paid tothe Participant as follows. Prior to a Change in Control, an Employer shallhave the right, in its sole discretion, and notwithstanding any electionsmade by the Participant, to pay such benefits in a lump sum or in monthlyinstallments for up to 15 years, with interest credited during theinstallment period as provided in Section 3.6. After a Change in Control,the Employer shall be required to pay such benefits in a lump sum. Thetermination of the Plan shall not adversely affect any Participant orBeneficiary who has become entitled to the payment of any benefits underthe Plan as of the date of termination; provided however, that the Employershall have the right to accelerate installment payments by paying thepresent value equivalent of such payments, using the Crediting Rate for thePlan Year in which the termination occurs as the discount rate, in a lumpsum or pursuant to a different payment schedule.

11.2 Amendment. Any Employer may, at any time, amend or modify the Plan in wholeor in part with respect to that Employer by the actions of its board ofdirectors; provided, however, that no amendment or modification shall beeffective to decrease or restrict the value of a Participant's AccountBalance in existence at the time the amendment or modification is made,calculated as if the Participant had experienced a Termination ofEmployment as of the effective date of the amendment or modification, or,if the amendment or modification occurs after the date upon which theParticipant was eligible to Retire, the Participant had Retired as of theeffective date of the amendment or modification. The amendment ormodification of the Plan shall not affect any Participant or Beneficiarywho has become entitled to the payment of benefits under the Plan as of thedate of the amendment or modification; provided, however, that the Employershall have the right to accelerate installment payments by paying thepresent value equivalent of such payments, using the Crediting Rate for thePlan Year of the amendment or modification as the discount rate, in a lumpsum or pursuant to a different payment schedule.

-15-

11.3 Interest Rate in the Event of a Change in Control and Interest. If a Changein Control occurs, the applicable interest rate to be used in determining aParticipant's benefit in connection with a Termination of Employment afterthe Change in Control, or a Plan termination, amendment or modificationunder Sections 11.1 and 11.2, shall be the Preferred Rate. However, theCrediting Rate for the applicable Plan Year, and not the Preferred Rate,shall be used as the discount rate for determining present value.

ARTICLE 12Administration

12.1 Committee Duties. This Plan shall be administered by the CompensationCommittee of the Board. Members of the Committee may be Participants underthis Plan. The Committee shall also have the discretion and authority to(i) make, amend, interpret, and enforce all appropriate rules andregulations for the administration of this Plan and (ii) decide or resolveany and all questions including interpretations of this Plan, as may arisein connection with the Plan.

12.2 Agents. In the administration of this Plan, the Committee may, from time totime, employ agents and delegate to them such administrative duties as itsees fit (including acting through a duly appointed representative) and may



from time to time consult with counsel who may be counsel to any Employer.

12.3 Binding Effect of Decisions. The decision or action of the Committee withrespect to any question arising out of or in connection with theadministration, interpretation and application of the Plan and the rulesand regulations promulgated hereunder shall be final and conclusive andbinding upon all persons having any interest in the Plan.

12.4 Indemnity of Committee. The Company and Affiliates shall indemnify and holdharmless each member of the Committee against any and all claims, losses,damages, expenses or liabilities arising from any action or failure to actwith respect to this Plan, except in the case of willful misconduct by thatmember.

12.5 Employer Information. To enable the Committee to perform its functions,each Employer shall supply full and timely information to the Committee onall matters relating to the compensation of its Participants, the date andcircumstances of the Retirement, Disability, death or Termination ofEmployment of its Participants, and such other pertinent information as theCommittee may reasonably require.

-16-

ARTICLE 13Other Benefits and Agreements

13.1 Coordination with Other Benefits. The benefits provided for a Participantand Participant's Beneficiary under the Plan are in addition to any otherbenefits available to such Participant under any other plan or program foremployees of the Participant's Employer. The Plan shall supplement andshall not supersede, modify or amend any other such plan or program exceptas may otherwise be expressly provided.

ARTICLE 14Pension Benefit Credit and Savings Plan Augmentation Contribution

14.1 Pension Benefit Credit. Amounts deferred under this Plan are not includedin the compensation base for calculating pension benefits under theHomestake Retirement Plan or the Supplemental Retirement Plan. As a result,a pension benefit credit will be calculated at the time of retirement andsubsequently paid as follows:

a. At termination, the actual pension benefit under the HomestakeRetirement Plan and the Supplemental Retirement Plan will becalculated in the payment option form chosen under the provisions ofthose plans.

b. A hypothetical pension benefit under such plans will then becalculated in the same payment option form, including in the pensionbase the amount of the deferred compensation that would have beenincluded in the pension base but for the Executive's electionshereunder.

c. The resulting difference will be paid monthly as a pension plansupplement in conjunction with the pension benefit payment.

d. As an alternative, the Committee may, in its sole and absolutediscretion, accelerate the payment of this supplement, using a presentvalue calculation, so that full payment is made in equal paymentscoinciding with the deferred compensation payment.

e. In the event of the Participant's death, the Committee shall determinethe portion of the pension benefit credit, if any, which shallcontinue to be payable. Such amount shall be payable to the person orpersons who are entitled to receive payments under the HomestakeRetirement Plan and/or the Supplemental Retirement Plan.

-17-



14.2 Savings Plan Augmentation Contribution. (a) Participation in this Plan doesnot preclude participation in the Homestake Mining Company Savings Plan("Savings Plan"). The Company will make a Savings Plan augmentationcontribution on behalf of any Participant in this Plan who defers themaximum election deferred under Section 402 (g) or the maximum electivecontribution permitted under the terms of the Code of Savings Plan. For anysuch Plan Year, the aggregate Company contribution to both the Savings Planand this Plan (in respect of the Savings Plan) on behalf of such aParticipant will be an amount equal to 25% (or such higher percentage ofmatching contributions as the Company may make under the Savings Plan forthe Plan Year) of the first six percent (6%) of the Participant's BaseSalary for that year which is contributed or deferred during that year inaccordance with each Plan, respectively. Any amount of Company contributionnot allocated to the Savings Plan will be credited to the Participant'sSavings Plan Augmentation Account. The Savings Plan augmentationcontribution shall be credited to the Participant's Savings PlanAugmentation Account once a year following the end of each Plan Year. NoSavings Plan augmentation contribution will be made on behalf of anyParticipant who does not defer the maximum elective deferral under Section402 (g) or the maximum elective contribution permitted under the SavingsPlan for the applicable Plan Year.

(b) A Participant's interest in any credit to his or her Savings PlanAugmentation Account and earnings thereon shall vest at the same rate andat the same time as would have been the case had such contribution beenmade to the Savings Plan. Interest will be credited on a Savings PlanAugmentation Account at the same rate and in the same manner as discussedin Section 3.5. Upon death, Disability, Retirement or other Termination ofEmployment, the Company shall pay to the Participant the value of theParticipant's Savings Plan Augmentation Account at the same rate and in thesame manner as if it were the Participant's Account Balance.

ARTICLE 15Claims Procedures

15.1 Claims Procedure. If a Participant or Beneficiary ("Claimant")believes that he or she is entitled to a benefit, or to a greater benefitas the case may be, under the Plan, the Claimant may submit a signed,written application to the Committee within 90 days of having been deniedsuch benefit. The Claimant will generally be notified of the approval ordenial of this application within 90 days of the date that the Committeereceives the application. If the claim is denied, the denial will statespecific reasons for the denial and the Claimant will have 60 days to filea signed, written request for a review of the denial with the Committee.This request should include the reasons for requesting review, factssupporting the request and any other relevant comments. The Committee,operating pursuant to its discretionary authority to administer andinterpret the Plan and to determine eligibility for benefits under theterms of the Plan, will generally make a final, written determination ofthe Claimant's eligibility for benefits within 60 days of receipt of therequest for review.

-18-

15.2 Arbitration. Any controversy between a Participant or Beneficiary and theCompany involving the construction or application of any of the terms,provisions, or conditions of this Plan shall be settled by arbitration inaccordance with the Commercial Arbitration Rules of the AmericanArbitration Association, then in effect, and judgment on the award renderedby the arbitrator(s) may be entered by any court having jurisdictionthereof. The exclusive place of arbitration shall be San Francisco,California. The expenses reasonably incurred by both parties in connectionwith arbitration, including attorney fees, shall be borne by the Company.

15.3 Legal Action. A Claimant's compliance with the foregoing provisions of thisArticle 15 is a mandatory prerequisite to a Claimant's right to commenceany legal action with respect to any claim for benefits under this Plan.



ARTICLE 16Trust

16.1 Establishment of a Trust. The Company shall establish the Trust, and theEmployers shall at least annually transfer over to the Trust such assets asthe Employers determine, in their sole discretion, are necessary to providefor their respective future liabilities created with respect to the AnnualDeferral Amounts, Augmentation Accounts and interest credits for that year.

16.2 Interrelationship of the Plan and the Trust. The provisions of the Plan andthe Plan Agreement shall govern the rights of a Participant or aBeneficiary to receive distributions pursuant to the Plan. The provisionsof the Trust shall govern the rights of the Employers, Participants,Beneficiaries and the creditors of the Employers to the assets transferredto the Trust. Each Employer shall at all times remain liable to carry outits obligations under the Plan. Each Employer's obligations under the Planmay be satisfied with Trust assets distributed pursuant to the terms of theTrust, and any such distribution shall reduce the Employer's obligationsunder this Agreement.

ARTICLE 17Miscellaneous

17.1 Unsecured General Creditor. Participants and their Beneficiaries, heirs,successors and assigns shall have no legal or equitable rights, interestsor claims in any property or assets of an Employer. Any and all of anEmployer's assets shall be, and remain, the general, unpledged unrestrictedassets of the Employer. An Employer's obligation under the Plan shall bemerely that of an unfunded and unsecured promise to pay money in thefuture.

-19-

17.2 Employer's Liability. An Employer's liability for the payment of benefitsshall be defined only by the Plan and the Plan Agreement, as entered intobetween the Employer and a Participant. An Employer shall have noobligation to a Participant or his or her Beneficiary under the Plan exceptas expressly provided in the Plan and his or her Plan Agreement.

17.3 Nonassignability. No employer shall be liable under the Plan to anyParticipant or his or her Beneficiaries except to the extent of (i) theDeferral Amount attributable to the Participant's employment by thatEmployer, plus (ii) interest credited on (i) in accordance with the Plan.Neither a Participant nor any other person shall have any right to commute,sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,transfer, hypothecate or convey in advance of actual receipt, the amounts,if any, payable hereunder, or any part thereof, which are, and all rightsto which are expressly declared to be, unassignable and non-transferable,except that the foregoing shall not apply to any family support obligationsset forth in a court order. No part of the amounts payable shall, prior toactual payment, be subject to seizure or sequestration for the payment ofany debts, judgments, alimony or separate maintenance owed by a Participantor any other person, nor be transferable by operation of law in the eventof a Participant's or any other person's bankruptcy or insolvency.

17.4 Not a Contract of Employment. The terms and conditions of this Plan shallnot be deemed to constitute a contract of employment between any Employerand the Participant. Such employment is an "at will" employmentrelationship that can be terminated at any time for any reason, or noreason, with or without cause, and with or without notice, unless expresslyprovided in a written employment agreement. Nothing in this Plan shall bedeemed to give a Participant the right to be retained in the service of anyEmployer, either as an Employee or a Director, or to interfere with theright of any Employer to discipline or discharge the Participant at anytime.

17.5 Furnishing Information. A Participant or his or her Beneficiary willcooperate with the Committee by furnishing any and all informationrequested by the Committee and take such other actions as may be requested



in order to facilitate the administration of the Plan and the payments ofbenefits hereunder, including but not limited to taking such physicalexaminations as the Committee may deem necessary.

17.6 Terms. Whenever any words are used herein in the masculine, they shall beconstrued as though they were in the feminine in all cases where they wouldso apply; and whenever any words are used herein in the singular or in theplural, they shall be construed as though they were used in the plural orthe singular, as the case may be, in all cases where they would so apply.

-20-

17.7 Captions. The captions of the articles, sections and paragraphs of thisPlan are for convenience only and shall not control or affect the meaningor construction of any of its provisions.

17.8 Governing Law. Subject to ERISA, the provisions of this Plan shall beconstrued and interpreted according to the internal laws of the State ofCalifornia without regard to its conflicts of laws principles.

17.9 Notice. Any notice or filing required or permitted to be given to theCommittee under this Plan shall be sufficient if in writing andhand-delivered, or sent by registered or certified mail, to the addressbelow:

Homestake Mining CompanyAttn: Compensation Committee650 California StreetSan Francisco, CA 94108

Such notice shall be deemed given as of the date of delivery or, ifdelivery is made by mail, as of the date shown on the postmark on thereceipt for registration or certification.

Any notice or filing required or permitted to be given to a Participantunder this Plan shall be sufficient if in writing and hand-delivered, orsent by mail, to the last known address of the Participant.

17.10 Successors. The provisions of this Plan shall bind and inure to thebenefit of the Participant's Employer and its successors and assignsand the Participant and the Participant's designated Beneficiaries.

17.11 Spouse's Interest. The interest in the benefits hereunder of a spouseof a Participant who has predeceased the Participant shallautomatically pass to the Participant and shall not be transferable bysuch spouse in any manner, including but not limited to such spouse'swill, nor shall such interest pass under the laws of intestatesuccession.

17.12 Validity. In case any provision of this Plan shall be illegal orinvalid for any reason, said illegality or invalidly shall not affectthe remaining parts hereof, but this Plan shall be construed andenforced as if such illegal or invalid provision had never beeninserted herein.

17.13 Incompetent. If the Committee determines in its discretion that abenefit under this Plan is to be paid to a minor, a person declaredincompetent or to a person incapable of handling the disposition ofthat person's property, the Committee may direct payment of suchbenefit to the guardian, legal representative or person having thecare and custody of such minor, incompetent or incapable person. TheCommittee may require

-21-

proof of minority, incompetency, incapacity or guardianship, as it maydeem appropriate prior to distribution of the benefit. Any payment ofa benefit shall be a payment for the account of the Participant andthe Participant's Beneficiary, as the case may be, and shall be a



complete discharge of any liability under the Plan for such paymentamount.

17.14 Court Order. The Committee is authorized to make any paymentsdirected by court order in any action in which the Plan or theCommittee has been named as a party.

17.15 Distribution in the Event of Taxation.

(a) General. If, for any reason, all or any portion of aParticipant's or Beneficiary's benefit under this Plan becomestaxable to the Participant or Beneficiary prior to receipt, aParticipant or Beneficiary may petition the Committee for adistribution of that portion of his or her benefit that hasbecome taxable. Upon the grant of such a petition, which grantshall not be unreasonably withheld, a Participant's Employershall distribute to the Participant or Beneficiary immediatelyavailable funds in an amount equal to the taxable portion of hisor her benefit (which amount shall not exceed a Participant's orBeneficiary's unpaid Account Balance under the Plan). If thepetition is granted, the tax liability distribution shall be madewithin 90 days of the date when the Participant's orBeneficiary's petition is granted. Such a distribution shallaffect and reduce the benefits to be paid under this Plan.

(b) Trust. Plan benefits payable to a Participant or Beneficiaryshall be reduced to the extent that benefits are distributed fromthe Trust, in accordance with its provisions, to that Participantor Beneficiary because the Trust is determined not to be a"grantor trust".

17.16 Taxes and Withholding. The Participant's Employer(s), or the trusteeof the Trust in accordance with the terms of the Trust, may withholdfrom any distribution under this Plan any and all employment andincome taxes that are required to be withheld under applicable law.

17.17 Legal Fees To Enforce Rights After Change in Control. The Company isaware that upon the occurrence of a Change in Control, the Board(which might then be composed of new members) or a shareholder of theCompany, or of any successor corporation might then cause or attemptto cause the Company or such successor to refuse to comply with itsobligations under the Plan and might cause or attempt to cause theCompany to institute, or may institute, litigation seeking to denyParticipants and Beneficiaries the benefits intended under the Plan.In these circumstances, the purpose of the Plan could be frustrated.Accordingly, if, following a Change in Control, it should appear toany Participant and Beneficiary that the Company or the Company hasfailed to comply with any of its obligations under the Plan or any

-22-

agreement thereunder or, if the Company or any other person takes anyaction to declare the Plan void or unenforceable or institutes anylitigation or other legal action designed to deny, diminish or torecover from any Participant and Beneficiary the benefits intended tobe provided, then the Company irrevocably authorize such Participantand Beneficiary to retain counsel of his or her choice at the expenseof the Company to represent such Participant and Beneficiary inconnection with the initiation or defense of any litigation or otherlegal action, whether by or against the Company or any director,officer, shareholder or other person affiliated with the Company orany successor thereto in any jurisdiction.

IN WITNESS WHEREOF, the Company has signed this Plandocument as of __________, 199_.

"Company"

--------------------------



a Delaware corporation

By: __________________________________

Title: ________________________________

-23-



EXHIBIT 10.4

AMENDED AND RESTATED

EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN


Effective August 1, 1995


AMENDED AND RESTATED EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

1. The Amended and Restated Executive Supplemental Retirement Plan (the"Plan") for designated key executives of Homestake Mining Company iseffective as of August 1, 1995.

2. General Purpose of Plan

This Plan is established to provide supplementary Retirement Benefitsfor key executives designated by the Compensation Committee of theBoard of Directors.

3. Definitions



(a) "Affiliate" means any affiliated organizations designated bythe Compensation Committee to participate in the Plan.

(b) "Board" means the Board of Directors of Homestake MiningCompany.

(c) "Company" means Homestake Mining Company.

(d) "Committee" means the Compensation Committee of the Board, asconstituted from time to time, or, in the event there is nosuch Committee of the Board, means the Board.

(e) "Compensation" means all regular base salary; performancebonuses paid under the Homestake Mining Company Bonus Plan;plus any pre-tax reductions of such compensation made at theelection of the Member under a Section 401 (k), cafeteria,deferred income or similar plans paid by the Company andAffiliates. All other payments to a Member, such as relocationbonuses, tax equalization payments, fees, commissions,directors fees and payments resulting from or relating to theexercise of stock option or appreciation rights are excluded.

(f) "Participant" means a key executive of the Company orAffiliate who receives written notification from the Companythat he or she has been designated as a participant of thePlan by the Compensation Committee.

(g) "Normal Retirement Date" means with respect to a Member thefirst day of the calendar month coincident with or nextfollowing the first date on which the Member has both attainedage sixty-two and completed ten or more continuous years ofService.

2

(h) "Reorganization" means any of the following events:

(i) the Company is a party to a merger or consolidation underthe terms of which less than 75% of the shares in theresulting company are owned by the shareholders of the Companyimmediately preceding such events; (ii) at least 75% in fairmarket value of the Company's assets are sold in a singletransaction or series of related transactions; or (iii) atleast 25% in voting power of the Company's shares for electingdirectors are acquired by any one person or group as that termis used in Rule 13d-5 under the Securities Exchange Act of1934.



(i) "Retirement Benefit" means the benefits payable under thisPlan, calculated in accordance with Section 4.

(j) "Homestake Retirement Plan" means the Homestake RetirementPlan, restated as of January 1, 1989, as it has been and maybe amended and restated from time to time.

(k) "Service" means all periods of employment with the Companyand any Affiliate and any other entity designated by theCompany.

4. Retirement Benefit

(a) Normal Retirement Benefit--At the Normal Retirement Date a Member whoretires at such date shall be entitled to receive a monthly RetirementBenefit equal to the amount determined by multiplying:

(i) 4-1/3% by

(ii) the complete or fractional years of Service (up to amaximum of fifteen years) by

(iii)the average monthly Compensation paid to the Memberduring the period of his thirty-six consecutive monthsof highest Compensation (or, if employed for less thanthirty-six consecutive months, the period of suchMember's actual employment);

The monthly Retirement Benefit thus calculated shall bereduced by:

(iv) commencing on the Member's attainment of age 65, (x)50% of the primary insurance amount of United StatesSocial Security which the Member would be entitled toreceive if he retired and commenced receipt of benefitsat that time, and (y) an amount equal to any reductionfor Canada Pension Plan, Quebec Pension Plan and anysimilar foreign employment related social security plan("foreign plans")

3

benefits which the Member would be entitled to receiveif he retired and commenced receipt of benefits at thattime, but only to the extent the Homestake RetirementPlan has been amended prior to the Member's attainment



or age 65 to provide for such a reduction in respectof foreign plans from benefits payable under theHomestake Retirement Plan, and

(v) benefits from time to time received or receivablebefore giving effect to any spousal or contingentannuitant benefit election under the HomestakeRetirement Plan, the Supplemental Retirement Plan orany other of the Company's pension or retirement plans(not including the Savings Plan), and any disabilityplan or worker's compensation plan.

(b) Early Retirement Benefit--A Member who has attained age fifty-five andhas completed ten or more continuous years of Service may elect toretire on the first day of any month prior to the Member's NormalRetirement Date, upon written election filed with, and subject to theapproval of, the Compensation Committee. The Compensation Committee,at its discretion, may withhold such approval, but in no event beyondage sixty-two. Upon such retirement, the Member shall be entitled toreceive a monthly Retirement Benefit determined as provided in clauses(i), (ii) and (iii) of paragraph (a) above, reduced as follows:

(i) by four percent of such amount for each year (proratedon a monthly basis for parts of a year) by which suchcommencement of benefits precedes the Member's NormalRetirement Date; and

(ii) there shall then be made the reductions provided inclauses (iv) and (v) of paragraph (a) above.

(c) Postponed Retirement Benefit--A Member who retires after the NormalRetirement Date will receive monthly the same dollar amount ofRetirement Benefit that would have been payable had the Member'sretirement not been postponed, except that such Member's years ofService shall include all years of Service (up to a maximum of fifteenyears) prior to such Member's actual retirement.

(d) Surviving Spouse Benefit--If a Member with ten or more continuousyears of Service dies after age fifty-five, either before or afterretirement, the Member's qualifying spouse will receive a SurvivingSpouse Benefit for life if the Member did not, at the time of death,have in effect a valid election to receive an optional form of jointand survivor annuity pursuant to Section 5. A "qualifying spouse" isthe spouse of a Member at the Member's death who has been lawfullymarried to the Member throughout the one-year period ending on theearlier of the Member's death or Normal Retirement Date. The SurvivingSpouse Benefit shall commence on the first day of the month followingthe Member's death and terminate with the payment for the month in



4

which the spouse's death occurs. Such benefit amount shall equalone-half of the Retirement Benefit which would have been payable ifthe Member had been living and had commenced receipt of benefits onthe date of death, reduced by one percent of such benefit for eachfull year in excess of ten that the date of birth of such survivingspouse occurred after that of the deceased Member.

(e) For the purposes of paragraphs (a), (b) and (c) of Section 4, thepayment of any benefit provided under this Plan will commence on thefirst day of the month following the month in which retirement occurs.The final payment will be the payment made on the first day of themonth in which death occurs.

5. Optional Forms of Benefits

Instead of the Retirement Benefit with Surviving Spouse Benefitprovided in Section 4, a Member may elect, effective upon theattainment of age fifty-five with ten or more continuous years ofService, to receive an actuarially determined Retirement Benefit toprovide an optional surviving spouse or contingent annuitant benefit,which benefits to a spouse or contingent annuitant shall be paid uponthe Member's death, whether before or after retirement. The optionalsurviving spouse or contingent annuitant benefit shall be actuariallyadjusted to take into account the amount to be continued as well as theages of the spouse or contingent annuitant and the Member. The optionalforms of benefits are as follows:

(a) Surviving Spouse: The Retirement Benefit may be actuarially reduced toprovide a benefit to a qualifying surviving spouse equal to:

(i) the benefit the Member would have been entitled to receive, or

(ii) two-thirds of the benefit the Member would have been entitled toreceive.

(b) Contingent Annuitant: With the written consent of a spouse, if any, amember may designate a person other than a qualifying spouse to be acontingent annuitant, in which case the Retirement Benefit will beactuarially reduced to provide a benefit to the contingent annuitantequal to:

(i) the benefit the Member would have been entitled to receive,or

(ii) two-thirds of the benefit the Member would have been entitled toreceive, or



(iii)one-half of the benefit the Member would have been entitled toreceive.

5

Any actuarial reduction in benefits made pursuant to this Section 5shall be made in accordance with the actuarial assumptions used incomputing alternative forms of benefits under the Homestake RetirementPlan at the time that such reduction is made.

6. Benefit Increases

It is anticipated that the retirement benefits payable to Memberhereunder will exceed those to which Member is entitled pursuant to theHomestake Retirement Plan, the Supplemental Retirement Plan or anyother retirement plans from time to time in effect and its employmentpolicies generally and, in the event that Member becomes entitled toretirement benefits under said plans and policies which benefits at anytime or from time to time are greater than those herein provided, noadditional benefits shall be payable under this Plan. If at any timethe Company increases the benefits paid to persons then retired underthe Company's retirement plans generally or to then retired seniorexecutives generally, such increases shall be applied pro rata to allof the Retirement Benefits payable to Members hereunder. For purposesof this section 6, any annual adjustment to the Member's retirementbenefits under the Homestake Retirement Plan will also apply toRetirement Benefits payable hereunder.

7. Termination of Service

A Member who ceases to be employed by the Company for any reason (otherthan retirement or early retirement under the provisions of Section 4of this Plan), after attaining age fifty-five and having completed tenor more continuous years of Service shall be entitled, with theapproval of the Compensation Committee as provided in Section 4(b), toreceive early Retirement Benefits as provided in Section 4(b). With theapproval of the Compensation Committee the terminated Member may electto begin receiving benefits on the Normal Retirement Date, such benefitwill be calculated based on the Member's actual years of continuousservice and earnings, up to the date of termination.

Any Member who ceases to be employed by the Company or Affiliates forany reason before completion of ten continuous years of Service and agefifty-five shall cease to be a Member and shall not be entitled toreceived any benefits under this Plan except for any benefits to whichsuch Member may become entitled through re-employment.



8. Withdrawal Election

A Member or his or her Beneficiary, as the case may be, may elect, atany time after he or she commences to receive benefits payments underthis Plan, to receive those payments in a lump sum, based on theactuarial equivalent of his or her remaining vested benefits less a 10%penalty (as described below). No election to partially acceleratebenefits shall be allowed. The Member shall make this election bygiving the Plan Administrator written notice of the election

6

in a form determined from time to time by the Plan Administrator. Thepenalty shall be equal to 10% of the lump sum actuarial equivalentof the Member's remaining vested benefit.

Any actuarial reduction in benefits made pursuant to this Section 8shall be made in accordance with the actuarial assumptions used incomputing lump sum payments under the Homestake Retirement Plan at thetime such lump sum payment is made. The Member shall be paid thereduced Benefit Amount within 60 days of his or her election. Once suchis paid, the Member's participation in the Plan shall terminate and theMember shall not be eligible to participate in the Plan in the future.

9. Suspension or Termination of Benefits

If the Compensation Committee determines that a Member otherwiseentitled to benefits under the Plan is engaged actively or proposes toengage actively, directly or indirectly in activities which may bedetrimental to the interests of the Company, it shall give such personwritten notice of the grounds for its determination. The CompensationCommittee shall afford such person an opportunity to submit to itwithin 60 days thereafter a written statement of reasons why suchperson considered such determination to be incorrect. After consideringsuch written statement and any other information which it determines tobe relevant, the Compensation Committee shall have the right toterminate benefits otherwise payable under the Plan or to suspend themfor such period as it determines to be appropriate. The CompensationCommittee shall advise such person of its action. Any determination bythe Compensation Committee to suspend or terminate benefits shall befinal and binding upon the Member.

10. Trust



The Company may establish one or more grantor Trusts and the Companyand Affiliates shall at least annually transfer over to the Trust suchassets as the Company and Affiliates determine, in their solediscretion, are necessary to provide for the Company's and Affiliatesfuture liabilities created under the Plan, provided the assets of theTrust shall be considered part of the general assets of the Company andAffiliates subject to the claims of its general creditors.

The provisions of the Plan shall govern rights of a Member to receivedistributions pursuant to the Plan. The provisions of the Trust shallgovern the rights of the Members and the creditors of the Company andAffiliates to the assets transferred to the Trust. The Company andAffiliates shall at all times remain liable to carry out itsobligations under the Plan. The Company's and Affiliate's obligationsunder the Plan may be satisfied with Trust assets distributed pursuantto the terms of the Trust.

11. Administration and Interpretation

7

This Plan is intended to qualify for exemption from Parts II, III andIV of the Employee Retirement Income Security Act of 1974, as amended,as a plan maintained primarily for the purpose of providing deferredcompensation for a select group of management or highly compensatedemployees under Sections 201(2), 301(a)(3) and 401(a)(1) of such Act,and shall be so interpreted.

This plan shall be administered by the Compensation Committee. TheCommittee shall have the discretion and authority to make, amend,interpret and enforce all appropriate rules and regulations for theadministration of this Plan and decide or resolve any and all questionsincluding interpretations of this Plan, as may arise in connection withthe Plan.

In the administration of this Plan, the Committee may, from time totime, employ agents and delegate to them such administrative duties asit sees fit and may, from time to time, consult with counsel who may becounsel to the Company.

The decision or action of the Committee with respect to any questionarising out of or in connection with the administration, interpretationand application of the Plan and the rules and regulations promulgatedhereunder shall be final and conclusive and binding upon all personshaving any interest in the Plan.

The Company and Affiliates shall indemnify and hold harmless each



member of the Committee against any and all claims, losses, damages,expenses or liabilities arising from any action or failure to act withrespect to this Plan, except in the case of willful misconduct by thatmember.

To enable the Committee to perform its functions, the Company andAffiliates shall supply full and timely information to the Committee onall matters relating to the compensation of its Members, the date andcircumstances of the retirement, disability, death or termination ofemployment of its Members, and such other pertinent information as theCommittee may reasonably require.

12. Termination of Plan

The Company and Affiliates reserves the right to change or terminatethe Plan, or both, at any time. The Company and Affiliates shallpromptly notify Members of any change or termination. Any change ortermination will not affect benefits vested on the effective date ofchange or termination, but any benefits or expected benefits not thenvested shall be modified or extinguished as the case may be. For thispurpose, the Normal Retirement Benefit shall be deemed vested when aMember reaches age sixty-five or both completes ten continuous years ofService and reaches age sixty-two, and the Early Retirement Benefitshall be deemed vested when a Member completes ten continuous years ofService and reaches age fifty-five.

13. Effects of Dissolution, Liquidation or Reorganization

8

Notwithstanding any other provision of the Plan, if the Company isdissolved or liquidated or is a party to a Reorganization and if (i)the Company's successor does not, by operation of law or prioragreement, assume the Company's obligations with respect to this Planor (ii) the Member's employment is terminated for any reason or for noreason by the Member or by such successor within two years followingthe occurrence of such dissolution, liquidation or Reorganization, thebenefits of each member affected thereby under this Plan shall vestfully as if each member's Service had continued until the NormalRetirement Date (but in no event for more than a total of 15 years ofService) but shall be calculated based on each Member's highest averagemonthly Compensation over any thirty-six consecutive month period ofactual employment prior to the vesting date, or, if employed for lessthan thirty-six consecutive months at such time, the period of suchMember's actual employment. No termination or modification of this Planshall affect the rights of a Member to then-vested benefits pursuant to



the preceding sentence.

Benefits so vested pursuant to this Section 13 shall be payablecommencing on the later of attainment of age fifty-five or the firstday of the month following the vesting event, or at such later time asa Member alone may elect; provided, however, that in computing suchbenefits the amount computed pursuant to clauses (i), (ii) and (iii) ofSection 4(a) hereof, as modified in this Section 14, shall be reducedby 4% for each year (prorated on a monthly basis for parts of a year)by which such commencement of benefits precedes such Member's NormalRetirement Date, and then reduced as provided in clauses (iv) and (v)of Section 4(a).

Any Member who is employed by a successor organization shall beentitled to the retirement benefits of such organization without offsetof benefits provided under this Plan and to the extent benefitsotherwise receivable from such organization are reduced, benefits underthis Plan shall be correspondingly increased.

14. General Provisions

Members and their Beneficiaries, heirs, successors and assigns shallhave no legal or equitable rights, interest or claims in any propertyor assets of the Company or Affiliate's. With respect to the Plan, anyPlan Agreement and the Trust, any and all of the Company's orAffiliate's assets shall be, and shall remain, the general, unpledgedunrestricted assets of the Company or Affiliate's, except as providedby the Trust. The Company's or Affiliate's obligation under the Planshall be merely that of an unfunded and unsecured promise to pay moneyin the future.

The Company's or Affiliate's liability for the payment of benefitsshall be defined only by the Plan. The Company or Affiliate's shallhave no obligation to a Member under the Plan except as expresslyprovided in the Plan.

Neither a Member nor any other person shall have any right to commute,sell, assign, transfer, pledge, anticipate, mortgage or otherwiseencumber, transfer, hypothecate or convey in advance of actual receipt,the amounts, if any, payable hereunder, or any part thereof, which are,and all rights to which are, expressly declared to be unassignable andnon-transferable,

9

except that the foregoing shall not apply to any family support



obligations set forth in a court order. No part of the amounts payableshall, prior to actual payment, be subject to seizure or sequestrationfor the payment of any debts, judgments, alimony or separatemaintenance owed by a Member or any other person, nor be transferableby operation of law in the event of a Member's or any other person'sbankruptcy or insolvency.

The terms and conditions of this Plan shall not be deemed to constitutea contract of employment between the Company or any Affiliate and theMember. Such employment is an "at will" employment relationship thatcan be terminated at any time for any reason, with or without cause,unless expressly provided in a written employment agreement. Nothing inthis Plan shall be deemed to give a Member the right to be retained inthe service of any Company or Affiliate or to interfere with the rightof any Company or Affiliate to discipline or discharge the Member atany time.

A Member will cooperate with the Company or Affiliate by furnishing anyand all information requested by the Company or Affiliate and take suchother actions as may be requested in order to facilitate theadministration of the Plan and the payments of benefits hereunder,including but not limited to taking such physical examinations as anyCompany or Affiliate may deem necessary.

Whenever any words are used herein in the masculine, they shall beconstrued as though they were in the feminine in all cases where theywould so apply; and wherever any words are used herein in the singularor in the plural, they shall be construed as though they were used inthe plural or the singular, as the case may be, in all cases where theywould so apply.

The captions of the articles, sections and paragraphs of this plan arefor convenience only and shall not control or affect the meaning orconstruction of any of its provisions.

The provisions of this Plan shall be construed and interpretedaccording to the laws of the State of California.

In case any provision of this Plan shall be illegal or invalid for anyreason, said illegality or invalidity shall not affect the remainingparts hereof, but this Plan shall be construed and enforced as if suchillegal and invalid provision had never been inserted herein.

Any notice or filing required or permitted to be given to the Committeeunder this Plan shall be sufficient if in writing and hand-delivered,or sent by registered or certified mail, to the address below:

Homestake Mining CompanyAttn: Compensation Committee650 California Street



San Francisco, CA 94108

10

Such notice shall be deemed given as of the date of deliveryor, if delivery is made by mail, as of the date shown on thepostmark on the receipt for registration or certification.

Any notice or filing required or permitted to be given to aMember under this Plan shall be sufficient if in writing andhand-delivered, or sent by mail, to the last known address ofthe Member.

The provisions of this Plan shall bind and inure to the benefit of theCompany and Affiliates and their successors and assigns and the Member,the Member's Beneficiaries, and their permitted successors and assigns.

The interest in the benefits hereunder of a spouse of a Member who haspredeceased the Member shall automatically pass to the Member and shallnot be transferable by such spouse in any manner, including but notlimited to such spouse's will, nor shall such interest pass under thelaws of intestate succession.

If a benefit under this Plan is to be paid to a minor, a persondeclared incompetent or to a person incapable of handling thedisposition of that person's property, the Committee may direct paymentof such benefit to the guardian, legal representative or person havingthe care and custody of such minor, incompetent or incapable person.The Committee may require proof of minority, incompetency, incapacityor guardianship, as it may deem appropriate prior to distribution ofthe benefit. Any payment of a benefit shall be a payment for theaccount of the Member and the Participant's Beneficiary, as the casemay be, and shall be a complete discharge of any liability under thePlan for such payment amount.

15. Distribution in the Event of Taxation

If, for any reason, all or any portion of a Member's benefit under thisPlan becomes taxable to the Member prior to receipt, a Member maypetition the Committee for a distribution of assets sufficient to meetthe Participant's tax liability (including additions to tax, penaltiesand interest). Upon the grant of such a petition, which grant shall notbe unreasonably withheld, the Company and Affiliate shall distribute tothe Member immediately available funds in an amount equal to theMember's federal, state and local tax liability associated with suchtaxation (which amount shall not exceed a Participant's accrued benefitunder the Plan), which liability shall be measured by using thatMember's then current highest federal, state and local marginal tax



rate, plus the rates or amounts for the applicable additions to tax,penalties and interest. If the petition is granted, the tax liabilitydistribution shall be made within 90 days of the date whenParticipant's petition is granted. Such a distribution shall affect andreduce the benefits to be paid under Article 3.

16. Claims Procedure

11

If a Member or Beneficiary ("Claimant") believes that he or she isentitled to a benefit or greater benefit as the case may be, under thePlan, the Claimant may submit a signed, written application to theCommittee within 90 days of having been denied such benefit. TheClaimant will generally be notified of the approval or denial of thisapplication within 90 days of the date that the Committee receives theapplication. If the claim is denied, the denial will state specificreasons for the denial and the Claimant will have 60 days to file asigned, written request for a review of the denial with the Committee.This request should include the reasons for requesting a review, factssupporting the request and any other relevant comments. The Committee,operating pursuant to its discretionary authority to administer andinterpret the Plan and to determine eligibility for benefits under theterms of the Plan, will generally make a final, written determinationof the Claimant's eligibility for benefits within 60 days of receipt ofthe request for review.

17. Arbitration

Any controversy between a participant and the Company or Affiliatesinvolving the construction or application of any of the terms,provisions, or conditions of this Plan shall be settled by arbitrationin accordance with the Commercial Arbitration Rules of the AmericanArbitration Association, then in effect, and judgment on the awardrendered by the arbitrator(s) may be entered by any court havingjurisdiction thereof. The exclusive place of arbitration shall be SanFrancisco, California. The expenses reasonably incurred by both partiesin connection with arbitration, including attorney fees, shall be borneby the Company or Affiliates.

IN WITNESS WHEREOF, Homestake Mining Company has adopted this Amendedand Restated Executive Supplemental Retirement Plan, effective August 1, 1995.




___________________________ By: __________________________Date of Execution Chairman and

Chief Executive Officer

___________________________ By: __________________________Date of Execution Vice President

12



EXHIBIT 10.5

AMENDED AND RESTATED

SUPPLEMENTAL RETIREMENT PLAN


Effective January 1, 1990

(Including November 29, 1990 Modification)


AMENDED AND RESTATEDSUPPLEMENTAL RETIREMENT PLAN

This Amended and Restated Supplemental Retirement Plan for



designated employees of Homestake Mining Company is adopted by the Company to beeffective as of January 1, 1990.

SECTION IDEFINITIONS

1.01 "Affiliate" means any corporation, partnership or other entity which iscontrolled by the Company.

1.02 "Basic Plan" means the Retirement Plan for Salaried Employees of HomestakeMining Company, as amended and restated from time to time.

1.03 "Beneficiary" means any person designated in writing by the Participant toreceive benefits under the terms of the Basic Plan.

1.04 "Board of Directors" means the Board of Directors of Homestake MiningCompany.

1.05 "Committee" means the Compensation Committee appointed by the Board ofDirectors of the Company, and given authority by the Board of Directors toadminister this Plan.

1.06 "Company" means Homestake Mining Company.

1.07 "Participant" means any employee of the Company or its Subsidiaries andAffiliates whose benefits under the Basic Plan are reduced on account ofthe restrictions of Sections 401(a)(17) and 415 of the Internal RevenueCode of 1954 or the Internal Revenue Code of 1986, as amended: providedthat no employee shall become or remain a Participant if the Committeedetermines that such employee is not a member of "a select group ofmanagement or highly compensated employees" within the meaning of sections201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income SecurityAct of 1974, as amended.

1.08 "Plan" means this Supplemental Retirement Plan of Homestake Mining Company.

1.09 "Subsidiary" means any corporation in which the Company holds, directly orindirectly, more than 50% of the voting power.

-1-

1.10 The masculine gender, where appearing in the Plan will be deemed to includethe feminine gender, and the singular may include the plural, unless thecontext clearly indicates the contrary.



SECTION IIELIGIBILITY FOR AND AMOUNT OF BENEFITS

2.01 Eligibility

Each Participant is eligible to receive a benefit under this Plan if he iseligible to receive a benefit under the terms of the Basic Plan.

2.02 Amount of Benefit

The retirement or death benefit payable under the Plan to a Participant orBeneficiary will equal the amounts, if any, that would have been payable tothe Participant or Beneficiary under the terms of the Basic Plan except forthe restrictions of Sections 401(a)(17) and 415 of the Internal RevenueCode of 1954 or the Internal Revenue Code of 1986, as amended, minus theamounts payable to the Participant or Beneficiary under the terms of theBasic Plan.

2.03 Forms and Times of Benefit Payments

Any benefit to which a Participant or Beneficiary is determined to beentitled under this Plan will be payable in the same form, at the same timeand subject to the same actuarial reductions, if any, as benefits payableunder the terms of the Basic Plan. If periodic payments are nominal, theCommittee may convert benefit values to a lump sum payment on a presentvalue basis, as determined by the Committee in its sole discretion.

SECTION IIIMISCELLANEOUS

3.01 Amendment and Plan Termination

The Company may, in its sole discretion, terminate, suspend or amend thisPlan at any time or from time to time, in whole or in part. In that event,Participants will vest in their benefits, if any, hereunder calculated inaccordance with Section 2.02 to the date of termination, suspension oramendment of the Plan. Plan suspension or termination will not affectbenefits being paid or benefits which have vested.

In the event of a Plan termination, the Board of Directors may, at its solediscretion, elect any one or more of the following alternatives to satisfythe

-2-



Company's obligations to Participants or Beneficiaries receiving orentitled to benefits:

(a) Provide benefit payments in accordance with Section 2.03.

(b) Make lump sum payments equal to the present value of the benefitspayable under the Plan.

3.02 Not An Employment Agreement

Nothing contained herein will confer upon any Participant the right to beretained in the service of the Company, nor will it interfere with theright of the Company to discharge or otherwise deal with Participantswithout regard to the existence of this Plan.

3.03 No Advance Funding

This Plan is unfunded, and the Company will make Plan benefit paymentssolely on a current disbursement basis. Nothing in the establishment ofthis Plan is to be construed as requiring or authorizing the Company tocreate or maintain any separate fund, account or reserve to provide for thepayment of the Company's liability to a Participant under the Plan.

All payments hereunder shall be made from the general assets of the Companyand no Participant shall have any right hereunder to any specific asset ofthe Company.

3.04 Assignment of Benefits

A Participant may not, either voluntarily or involuntarily, assign,anticipate, alienate, commute, pledge, discount, borrow against or encumberany benefits to which he is or may become entitled to under the Plan, normay the same be subject to attachment or garnishment by any creditor of aParticipant.

3.05 Interpretation

This Plan is intended to qualify for exemption from Parts II, III and IV ofthe Employee Retirement Income Security Act of 1974, as amended, as a planmaintained primarily for the purpose of providing deferred compensation fora select group of management or highly compensated employees under Sections201(2), 301(a)(3) and 401(a)(1) of such Act, and shall be so interpreted.Subject to that restriction, the Committee shall have the sole discretionto interpret this Plan and to adopt rules and interpretation for theapplication and implementation of this Plan. The decisions andinterpretations by the Committee shall be final and binding on allParticipants.



-3-

IN WITNESS WHEREOF, Homestake Mining Company has adopted thisPlan, effective January 1, 1990.


______________________ By: _________________________________Date of Execution Chairman and Chief Executive Officer

______________________ By: _________________________________Date of Execution Vice President

Human Resources

-4-



EXHIBIT 10.6

MASTER TRUST

UNDER THE


DEFERRED COMPENSATION PLANS

TABLE OF CONTENTS

<TABLE><CAPTION>

Page

<S> <C>ARTICLE I - ESTABLISHMENT OF TRUST................................................................ 1

ARTICLE II - PAYMENTS TO PLAN PARTICIPANTS AND THEIRBENEFICIARIES......................................................................... 2

ARTICLE III - TRUSTEE RESPONSIBILITY REGARDING PAYMENTSTO TRUST BENEFICIARY WHEN THE COMPANY ISINSOLVENT............................................................................. 3

ARTICLE IV - PAYMENTS TO THE COMPANY............................................................... 5

ARTICLE V - INVESTMENT AUTHORITY.................................................................. 5

ARTICLE VI - DISPOSITION OF INCOME................................................................. 8

ARTICLE VII - ACCOUNTING BY TRUSTEE................................................................. 8

ARTICLE VIII - RESPONSIBILITY OF TRUSTEE............................................................. 9

ARTICLE IX - COMPENSATION AND EXPENSES OF TRUSTEE.................................................. 10

ARTICLE X - RESIGNATION AND REMOVAL OF TRUSTEE.................................................... 10

ARTICLE XI - APPOINTMENT OF SUCCESSOR.............................................................. 11

ARTICLE XII - AMENDMENT OR TERMINATION.............................................................. 11

ARTICLE XIII - MISCELLANEOUS......................................................................... 12

ARTICLE XIV - EFFECTIVE DATE........................................................................ 14

</TABLE>

-i-



MASTER TRUSTUNDER THE

HOMESTAKE MINING COMPANYDEFERRED COMPENSATION PLANS

This Agreement made this 5th day of December, 1995, by andbetween Homestake Mining Company (the "Company") and Wells Fargo Bank, N.A. (the"Trustee");

WHEREAS, the Company has adopted the nonqualified deferredcompensation plans listed in Appendix A (collectively, the "Plans").

WHEREAS, the Company and those subsidiaries (as defined inSection 424(f) of the Internal Revenue Code), if any, that participate in thePlans, (the "Subsidiaries") have incurred or expect to incur liability under theterms of the Plans with respect to the individuals participating in the Plans;

WHEREAS, the Company wishes to establish a trust (the "Trust")and to contribute to the Trust assets that shall be held therein, subject to theclaims of the Company's or Subsidiaries' creditors in the event the Company or aSubsidiary becomes Insolvent, as herein defined, until paid to Plan participantsand their beneficiaries in such manner and at such times as specified in thePlans;

WHEREAS, it is the intention of the parties that this Trustshall constitute an unfunded arrangement and shall not affect the status of thePlans as an unfunded plan maintained for the purpose of providing deferredcompensation for a select group of management or highly compensated employeesfor purposes of Title I of the Employee Retirement Income Security Act of 1974;

WHEREAS, it is the intention of the Company to makecontributions to the Trust to provide itself with a source of funds to assist itin the meeting of its liabilities under the Plans;

NOW, THEREFORE, the parties do hereby establish the Trust andagree that the Trust shall be comprised, held and disposed of as follows:

ARTICLE I

ESTABLISHMENT OF TRUST

1.01 The Company hereby deposits with Trustee in trust OneHundred Dollars ($100), which shall become the principal of the Trust to beheld, administered and disposed of by Trustee as provided in this TrustAgreement.

1.02 The Trust hereby established shall be irrevocable;provided, however, the Company may revoke the Trust if, prior to a Change inControl, either the Internal Revenue Code, or the interpretation of the InternalRevenue Code by the Internal Revenue Service, as

-1-

publicly announced in the Internal Revenue Bulletin, is changed to permit,without current taxation to participants, the creation of a trust fund (the"Trust Fund") to pay benefits under the Plans with assets that are no longersubject to the claims of the Company's creditors.

1.03 The Trust is intended to be a grantor trust, of which theCompany is the grantor, within the meaning of subpart E, part I, subchapter J,chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, andshall be construed accordingly.

1.04 The principal of the Trust, and any earnings thereonshall be held separate and apart from other funds of the Company and theSubsidiaries and shall be used exclusively for the uses and purposes of Planparticipants and general creditors as herein set forth. Plan participants andtheir beneficiaries shall have no preferred claim on, or any beneficialownership interest in, any assets of the Trust. Any rights created under thePlans and this Trust Agreement shall be mere unsecured contractual rights ofPlan participants and their beneficiaries against the Company or a Subsidiary.Any assets held by the Trust will be subject to the claims of the Company's or a



Subsidiary's general creditors under federal and state law in the event theCompany or a Subsidiary becomes Insolvent.

1.05 The Company, in its sole discretion, may at any time, orfrom time to time, make additional deposits of cash or other property in trustwith Trustee to augment the principal to be held, administered and disposed ofby Trustee as provided in this Trust Agreement. Neither Trustee nor any Planparticipant or beneficiary shall have any right to compel such additionaldeposits.

ARTICLE II

PAYMENTS TO PLAN PARTICIPANTSAND THEIR BENEFICIARIES

2.01 Concurrent with the establishment of this Trust, theCompany shall deliver to the Trustee a schedule (the "Payment Schedule") thatindicates the amounts payable in respect of each participant (and his or herbeneficiaries) on a Plan by Plan basis, provides a formula or formulas or otherinstructions acceptable to the Trustee for determining the amounts so payable,specifies the form in which such amount is to be paid (as provided for oravailable under the applicable Plans), and the time of commencement for paymentof such amounts. Except as otherwise provided herein, Trustee shall makepayments to the Plan participants and their beneficiaries in accordance withsuch Payment Schedule. The Payment Schedule shall be updated from time to timeas is necessary.

2.02 Prior to a Change in Control, the entitlement of aparticipant or his or her beneficiaries to benefits under the Plans shall bedetermined by the Company or such party as it shall designate under the Plans,and any claim for such benefits shall be considered and reviewed under theprocedures set out in the Plans. After a Change in Control, the entitlement of aparticipant or his or her beneficiaries to benefits under the Plans shall bedetermined by the

-2-

Trustee, and any claim for such benefits shall be considered and reviewed underthe procedures set out in the Plans.

2.03 The Company or a Subsidiary may make payment of benefitsdirectly to Plan participants or their beneficiaries as they become due underthe terms of the Plans. The Company shall notify the Trustee of the decision tomake payment of benefits directly prior to the time amounts are payable toparticipants or their beneficiaries. If the principal of the Trust, and anyearnings thereon, are not sufficient, determined on a Plan by Plan basis, tomake payments of benefits in accordance with the terms of the Plans, the Companyand the Subsidiaries shall make the balance of each such payment as it fallsdue. The Trustee shall notify the Company and the Subsidiaries when principaland earnings are not sufficient.

2.04 Notwithstanding anything contained in this TrustAgreement to the contrary, if at any time prior to the occurrence of an eventdescribed in Section 1.02, the Trust is finally determined by the IRS not to bea "grantor trust" with the result that the income of the Trust Fund is nottreated as income of the Company or the Subsidiaries pursuant to Sections 671through 679 of the Internal Revenue Code of 1986, as amended, or if a tax isfinally determined by the IRS to be payable by one or more participants orbeneficiaries with respect to any interest in the Plans or the Trust Fund priorto payment of such interest to such participant or beneficiary, then the Trustshall immediately terminate, the Trustee shall immediately determine eachparticipant's share of the Trust Fund in accordance with the Plans, and theTrustee shall immediately distribute such share in a lump sum to eachparticipant or beneficiary entitled thereto, regardless of whether suchparticipant's employment has terminated and regardless of form and time ofpayments specified in or pursuant to the Plans. Any remaining assets (less anyexpenses or costs due under Article IX) shall then be paid by the Trustee to theCompany and the Subsidiaries in such amounts, and in the manner instructed bythe Company. Prior to a Change in Control, the Trustee shall rely solely on thedirections of the Company with respect to the occurrence of the foregoing eventsand the resulting distributions to be made, and the Trustee shall not be



responsible for any failure to act in the absence of such direction.

2.05 The Trustee shall make provision for the reporting andwithholding of any federal, state or local taxes that may be required to bewithheld with respect to the payment of benefits pursuant to the terms of thePlans and shall pay amounts withheld to the appropriate taxing authorities ordetermine that such amounts have been reported, withheld and paid by the Companyand the Subsidiaries.

2.06 Prior to a Change in Control, payments by the Trusteeshall be delivered or mailed to addresses supplied by the Company and theTrustee's obligation to make such payments shall be satisfied upon such deliveryor mailing. Prior to a Change in Control, the Trustee shall have no obligationto determine the identity of persons entitled to benefits or their mailingaddresses. After a Change in Control, the Trustee shall have such obligations.

-3-

ARTICLE III

TRUSTEE RESPONSIBILITY REGARDING PAYMENTSTO TRUST BENEFICIARY WHEN THE COMPANY IS INSOLVENT

3.01 If the Company or any Subsidiary is Insolvent (the"Insolvent Entity"), the Trustee shall cease payment of benefits to any Planparticipant or a participant's beneficiaries to the extent that the benefits areattributable, under the Plans, to the participant's employment by the InsolventEntity. The Insolvent Entity shall be considered "Insolvent" for purposes ofthis Trust Agreement if (i) the entity is unable to pay its debts as they becomedue, or (ii) the entity is subject to a pending proceeding as a debtor under theUnited States Bankruptcy Code. For purposes of this Section, if an entity isdetermined to be Insolvent, each Subsidiary in which such entity has an equityinterest shall also be deemed to be an Insolvent Entity. However, the insolvencyof a Subsidiary will not cause a parent corporation to be deemed Insolvent.

3.02 At all times during the continuance of this Trust, asprovided in Section 1(d), the principal and income of the Trust shall be subjectto claims of general creditors of the Company and its Subsidiaries under federaland state law only as set forth below.

(a) The Board of Directors (the "Board") and the president of theCompany shall have the duty to inform the Trustee in writing of the Company's orany Subsidiary's Insolvency. If a person claiming to be a creditor of theCompany or any Subsidiary alleges in writing to the Trustee that the Company orany Subsidiary has become Insolvent, the Trustee shall determine whether theCompany or any Subsidiary is Insolvent and, pending such determination, theTrustee shall discontinue payment of benefits to the Insolvent Entity'sparticipants or their beneficiaries.

(b) Unless the Trustee has actual knowledge of the Company's or aSubsidiary's Insolvency, or has received notice from the Company, a Subsidiary,or a person claiming to be a creditor alleging that the Company or a Subsidiaryis Insolvent, the Trustee shall have no duty to inquire whether the Company orany Subsidiary is Insolvent. The Trustee may in all events rely on such evidenceconcerning the Company's or any Subsidiary's solvency as may be furnished to theTrustee and that provides the Trustee with a reasonable basis for making adetermination concerning the Company's or any Subsidiary's solvency. In thisregard, the Trustee may rely upon a letter from the Company's or a Subsidiary'sauditors as to the Company's or any Subsidiary's financial status.

(c) If, in accordance with Section 3.01, the Trustee hasdiscontinued payment of any benefits because of the Insolvency of the Company ora Subsidiary, the Trustee shall hold the portion of the assets of the Trustallocable to the Insolvent Entity for the benefit of the Insolvent Entity'sgeneral creditors. Nothing in this Trust Agreement shall in any way diminish anyrights of participants or their beneficiaries to pursue their rights as generalcreditors of the Insolvent Entity with respect to benefits due under the Plansor otherwise.



-4-

(d) Trustee shall resume the payment of benefits to Planparticipants or their beneficiaries in accordance with Article II only afterTrustee has determined that the Company or Subsidiary, as the case may be, isnot Insolvent (or is no longer Insolvent).

3.03 Provided that there are sufficient assets, if the Trusteediscontinues the payment of benefits from the Trust pursuant to Section 3.01 andsubsequently resumes such payments, the first payment following suchdiscontinuance shall include the aggregate amount of all payments due toparticipants or their beneficiaries under the terms of the Plans for the periodof such discontinuance, less the aggregate amount of any payments made toparticipants or their beneficiaries by the Company or any Subsidiary in lieu ofthe payments provided for hereunder during any such period of discontinuance.Prior to a Change in Control, the Company shall instruct the Trustee as to suchamounts, and after a Change in Control, the Trustee shall determine such amountsin accordance with the terms and provisions of the Plans.

ARTICLE IV

PAYMENTS TO THE COMPANY

Except as specifically provided in this Trust, prior to theoccurrence of one or more of the events described in Section 1.02, the Companyshall have no right or power to direct Trustee to return to the Company or todivert to others any of the Trust assets before all payment of benefits havebeen made to Plan participants and their beneficiaries pursuant to the terms ofthe Plans.

ARTICLE V

INVESTMENT AUTHORITY

5.01 Except as provided in Section 5.02, the Company or itsauthorized agent shall provide the Trustee with all investment instructions. TheTrustee shall neither affect nor change investments of the Trust Fund, except asdirected in writing by the Company, and shall have no right, duty orresponsibility to recommend investments or investment changes; provided, thatthe Trustee may (i) deposit cash on hand from time to time in any bank savingsaccount, certificate of deposit, or other instrument creating a depositliability for a bank, including the Trustee's own banking department if theTrustee is a bank, without such prior direction, or (ii) invest in governmentsecurities, bonds with specific ratings, or stock of "Fortune 500" companies,all within broad investment guidelines established by the Company from time totime.

5.02 In the event of a Change in Control, the authority of theCompany to direct investments of the Trust Fund shall cease and the Trusteeshall have complete authority to direct investments of the Trust Fund. Thepresident of the Company shall notify the Trustee in writing when a Change inControl has occurred. The Trustee has no duty to inquire whether a Change inControl has occurred and may rely on notification by the president of theCompany of a Change in Control; provided, however, that if any officer, formerofficer, director or former director of the Company or any Subsidiary (otherthan the president of the Company), or any Participant notifies the Trustee thatthere has been or there may be a Change in Control, the Trustee shall have the

-5-

duty to satisfy itself as to whether a Change in Control has in fact occurred.The Company and the Subsidiaries shall indemnify and hold harmless the Trusteefor any damages or costs (including attorneys' fees) that may be incurredbecause of reliance on the president's notice or lack thereof.

5.03 Subject to Section 5.01, the Trustee shall have, withoutexclusion, all powers conferred on the Trustee by applicable law, unless



expressly provided otherwise herein, and all rights associated with assets ofthe Trust shall be exercised by the Trustee or the person designated by theTrustee, and shall in no event be exercisable by or rest with Participants. TheTrustee shall have full power and authority to invest and reinvest the TrustFund in any investment permitted by law, exercising the judgment and care thatpersons of prudence, discretion and intelligence would exercise under thecircumstances then prevailing, considering the probable income and safety oftheir capital, including, without limiting the generality of the foregoing, thepower:

(a) To invest and reinvest the Trust Fund, together with theincome therefrom, in common stock, preferred stock, convertible preferred stock,mutual funds (including mutual funds affiliated with the Trustee), bonds,debentures, convertible debentures and bonds, mortgages, notes, timecertificates of deposit, commercial paper and other evidences of indebtedness(including those issued by the Trustee or any of its affiliates), othersecurities, policies of life insurance, annuity contracts, options to buy orsell securities or other assets, and other property of any kind (personal, real,or mixed, and tangible or intangible); provided, however, that in no event maythe Trustee invest in securities (including stock or rights to acquire stock) orobligations issued by the Company or the Subsidiaries, other than a de minimisamount held in common investment vehicles in which the Trustee invests;

(b) To deposit or invest all or any part of the assets of theTrust Fund in savings accounts or certificates of deposit or other depositswhich bear a reasonable interest rate in a bank, including the commercialdepartment of the Trustee, if such bank is supervised by the United States orany State;

(c) To hold, manage, improve, repair and control all property,real or personal, forming part of the Trust Fund and to sell, convey, transfer,exchange, partition, lease for any term, even extending beyond the duration ofthis Trust, and otherwise dispose of the same from time to time in such manner,for such consideration, and upon such terms and conditions as the Trustee shalldetermine;

(d) To have, respecting securities, all the rights, powers andprivileges of an owner, including the power to give proxies, pay assessments andother sums deemed by the Trustee to be necessary for the protection of the TrustFund, to vote any corporate stock either in person or by proxy, with or withoutpower of substitution, for any purpose; to participate in voting trusts, poolingagreements, foreclosures, reorganizations, consolidations, mergers andliquidations, and in connection therewith to deposit securities with andtransfer title to any protective or other committee under such terms as theTrustee may deem advisable; to exercise or sell stock subscriptions orconversion rights; and, regardless of any limitation elsewhere in this

-6-

instrument relative to investment by the Trustee, to accept and retain as aninvestment any securities or other property received through the exercise of anyof the foregoing powers;

(e) To hold in cash, without liability for interest, such portionof the Trust Fund which, in its discretion, shall be reasonable under thecircumstances, pending investments, or payment of expenses, or the distributionof benefits;

(f) To take such actions as may be necessary or desirable toprotect the Trust Fund from loss due to the default on mortgages held in theTrust including the appointment of agents or trustees in such otherjurisdictions as may seem desirable, to transfer property to such agents ortrustees, to grant such powers as are necessary or desirable to protect theTrust or its assets, to direct such agents or trustees, or to delegate suchpower to direct, and to remove such agents or trustees;

(g) To employ such agents including custodians and counsel as maybe reasonably necessary and to pay them reasonable compensation; to settle,compromise or abandon all claims and demands in favor of or against the Trustassets;



(h) To cause title to property of the Trust to be issued, held orregistered in the individual name of the Trustee, or in the name of itsnominee(s) or agents, or in such form that title will pass by delivery;

(i) To exercise all of the further rights, powers, options andprivileges granted, provided for, or vested in trustees generally under the lawsof the State of California, so that the powers conferred upon the Trustee hereinshall not be in limitation of any authority conferred by law, but shall be inaddition thereto;

(j) To borrow money from any source (including the Trustee) andto execute promissory notes, mortgages or other obligations and to pledge ormortgage any Trust assets as security;

(k) To lend certificates representing stocks, bonds, or othersecurities to any brokerage or other firm selected by the Trustee;

(l) To institute, compromise and defend actions and proceedings;to pay or contest any claim; to settle a claim by or against the Trustee bycompromise, arbitration, or otherwise; to release, in whole or in part, anyclaim belonging to the Trust to the extent that the claim is uncollectible;

(m) To use securities depositories or custodians and to allowsuch securities as may be held by a depository or custodian to be registered inthe name of such depository or its nominee or in the name of such custodian orits nominee;

(n) To invest the Trust Fund from time to time in one or moreinvestment funds, which funds shall be registered under the Investment CompanyAct of 1940; and

-7-

(o) To do all other acts necessary or desirable for the properadministration of the Trust Fund, as if the Trustee were the absolute ownerthereof. However, nothing in this section shall be construed to mean the Trusteeassumes any responsibility for the performance of any investment made by theTrustee in its capacity as trustee under the operations of this Trust Agreement.

5.04 Voting or other rights in securities shall be exercisedby the person or entity responsible for directing such investments, and theTrustee shall have no duty to exercise voting or proxy or other rights relatingto any investment managed or directed by the Company. If any foreign securitiesare purchased pursuant to the direction of the Company, it shall be theresponsibility of the person or entity responsible for directing suchinvestments to advise the Trustee in writing of any laws or regulations, eitherforeign or domestic, that apply to such foreign securities or to the receipt ofdividends or interest on such securities.

5.05 The Company shall have the right at anytime, and fromtime to time in its sole discretion, to substitute assets of equal fair marketvalue for any asset held by the Trust. This right is exercisable by the Companyin a nonfiduciary capacity without the approval or consent of any person in afiduciary capacity.

ARTICLE VI

DISPOSITION OF INCOME

During the term of this Trust, all income received by theTrust, net of expenses and taxes, shall be accumulated and reinvested; providedthat, if the Company requests, a portion of the income equal to the taxespayable by the Company with respect to the income of the Trust shall be returnedto the Company.

ARTICLE VII

ACCOUNTING BY TRUSTEE

7.01 The Trustee shall keep accurate and detailed records ofall investments, receipts, disbursements, and all other transactions required to



be made, including such specific records as shall be agreed upon in writingbetween the Company and the Trustee. Within 90 days following the close of eachcalendar year and within 90 days after the removal or resignation of Trustee,Trustee shall deliver to the Company a written account of its administration ofthe Trust during such year or during the period from the close of the lastpreceding year to the date of such removal or resignation, setting forth allinvestments, receipts, disbursements and other transactions effected by it,including a description of all securities and investments purchased or sold withthe cost or net proceeds of such purchases or sales (accrued interest paid orreceivable being shown separately), and showing all cash, securities and otherproperty held in the Trust at the end of such year or as of the date of suchremoval or resignation, as the case may be. The account shall be deemed correctupon receipt by the Trustee of the Company's written approval of the account orupon the passage of ninety (90) days from the date the account was mailed by the

-8-

Trustee to the Company, except for objections raised by the Company within suchninety (90) day period.

7.02 The assets of the Trust Fund shall be valued at theirrespective fair market values on the date of valuation, as determined by theTrustee based upon such sources of information as it may deem reliable,including, but not limited to, stock market quotations, statistical valuationservices, newspapers of general circulation, financial publications, advice frominvestment counselors, brokerage firms or insurance companies, or anycombination of sources. Prior to a Change in Control, the Company shall instructthe Trustee as to the value of assets for which market values are not readilyobtainable by the Trustee. If the Company fails to provide such values, theTrustee may take whatever action it deems reasonable, including employment ofattorneys, appraisers, life insurance companies or other professionals, theexpense of which shall be an expense of administration of the Trust Fund andpayable by the Company and the Subsidiaries. The Trustee may rely uponinformation from the Company and the Subsidiaries, appraisers or other sourcesand shall not incur any liability for an inaccurate valuation based in goodfaith upon such information.

ARTICLE VIII

RESPONSIBILITY OF TRUSTEE

8.01 Trustee shall act with the care, skill, prudence anddiligence under the circumstances then prevailing that a prudent person actingin like capacity and familiar with such matters would use in the conduct of anenterprise of a like character and with like aims, provided, however, thatTrustee shall incur no liability to any person for any action taken pursuant toa direction, request or approval given by the Company which is contemplated by,and in conformity with, the terms of the Plans or this Trust and is given inwriting by the Company. When giving directions or requests to the Trustee, theCompany shall represent that the directions or requests are consistent with theCompany's interpretation of the Plans. In the event of a dispute between theCompany and a party, the Trustee may apply to a court of competent jurisdictionto resolve the dispute.

8.02 If the Trustee undertakes or defends any litigationarising in connection with this Trust, the Company agrees to indemnify theTrustee against the Trustee's costs, expenses and liabilities (including,without limitation, attorneys' fees and expenses) relating thereto and to beprimarily liable for such payments. If the Company does not pay such costs,expenses and liabilities in a reasonably timely manner, the Trustee may obtainpayment from the Trust.

8.03 The Trustee may consult with legal counsel (who may alsobe counsel for the Company generally) with respect to any of its duties orobligations hereunder.

8.04 The Trustee may hire agents, accountants, actuaries,investment advisors, financial consultants or other professionals to assist itin performing any of its duties or obligations hereunder. No less often thanquarterly, the Company shall reimburse the Trustee for



-9-

the reasonable actual costs incurred in hiring such agents, accountants,actuaries, investment advisors, financial consultants or other professionals inconnection with the Trustee's management of any life insurance contracts ownedby the Trust.

8.05 The Trustee shall have, without exclusion, all powersconferred on trustees by applicable law, unless expressly provided otherwiseherein, provided, however, that if an insurance policy is held as an asset ofthe Trust, the Trustee shall have no power to name a beneficiary of the policyother than the Trust, to assign the policy (as distinct from conversion of thepolicy to a different form) other than to a successor Trustee, or to loan to anyperson the proceeds of any borrowing against such policy.

8.06 However, notwithstanding the provisions of Section 8.05,the Trustee may loan to the Company the proceeds of any borrowing against aninsurance policy held as an asset of the Trust.

8.07 Notwithstanding any powers granted to Trustee pursuant tothis Trust Agreement or to applicable law, Trustee shall not have any power thatcould give this Trust the objective of carrying on a business and dividing thegains therefrom, within the meaning of section 301.7701-2 of the Procedure andAdministrative Regulations promulgated pursuant to the Internal Revenue Code.

ARTICLE IX

COMPENSATION AND EXPENSES OF TRUSTEE

9.01 The Company shall pay all administrative and Trustee'sfees and expenses. If not so paid, the fees and expenses shall be paid fromthe Trust.

9.02 The Company shall indemnify and hold harmless the Trustee,its officers, employees, and agents from and against all liabilities, losses,and claims (including reasonable attorney's fees and costs of defense) to theextent that (i) such liabilities, losses and claims are asserted by anyone otherthan the Company or the Trustee, and (ii) do not result, directly or indirectly,from the Trustee's breach of this Trust agreement, breach of fiduciary duty,negligence, gross negligence or willful misconduct.

ARTICLE X

RESIGNATION AND REMOVAL OF TRUSTEE

10.01 The Trustee may resign at any time by written notice to theCompany, which shall be effective 60 days after receipt of such notice unlessthe Company and the Trustee agree otherwise.

10.02 Trustee may be removed by Company on 60 days notice or uponshorter notice accepted by Trustee.

-10-

10.03 Upon a Change of Control, as defined herein, Trustee maynot be removed by Company for 3 years, except for gross negligence or willfulmisconduct.

10.04 If Trustee resigns within 3 years of a Change of Control,as defined herein, Trustee shall select a successor Trustee in accordance withthe provisions of Section 11.02 prior to the effective date of Trustee'sresignation or removal.

10.05 Upon resignation or removal of Trustee and appointment of asuccessor Trustee, all assets shall subsequently be transferred to the successorTrustee. The transfer shall be completed within 90 days after receipt of noticeof resignation, removal or transfer, unless Company extends the time limit.



10.06 If Trustee resigns or is removed, a successor shall beappointed, in accordance with Article XI, by the effective date of resignationor removal under Sections 10.01 or 10.02. If no such appointment has been made,Trustee may apply to a court of competent jurisdiction for appointment of asuccessor or for instructions. All expenses of Trustee in connection with theproceeding shall be allowed as administrative expenses of the Trust.

ARTICLE XI

APPOINTMENT OF SUCCESSOR

11.01 If Trustee resigns or is removed in accordance withSections 10.01 or 10.02, Company may appoint any third party, such as a banktrust department or other party that may be granted corporate trustee powersunder state law, as a successor to replace Trustee upon resignation or removal.The appointment shall be effective when accepted in writing by the new Trustee,who shall have all of the rights and powers of the former Trustee, includingownership rights in the Trust assets. The former Trustee shall execute anyinstrument necessary or reasonably requested by Company or the successor Trusteeto evidence the transfer.

11.02 If Trustee resigns pursuant to the provisions of Section10.04 and selects a successor Trustee, Trustee may appoint any third party suchas a bank trust department or other party that may be granted corporate trusteepowers under state law. The appointment of a successor Trustee shall beeffective when accepted in writing by the new Trustee. The new Trustee shallhave all the rights and powers of the former Trustee, including ownership rightsin Trust assets. The former Trustee shall execute any instrument necessary orreasonably requested by the successor Trustee to evidence the transfer.

11.03 The successor Trustee need not examine the records and actsof any prior Trustee and may retain or dispose of existing Trust assets, subjectto Sections 7 and 8. The successor Trustee shall not be responsible for andCompany shall indemnify and defend the successor Trustee from any claim orliability resulting from any action or inaction of any prior Trustee or from anyother past event, or any condition existing at the time it becomes successorTrustee.

-11-

ARTICLE XII

AMENDMENT OR TERMINATION

12.01 This Trust Agreement may be amended by a writteninstrument executed by Trustee and the Company. Notwithstanding the foregoing,no such amendment shall conflict with the terms of the Plans or shall make theTrust revocable except in accordance with Section 1.02. When the Companyproposes any amendment to the Trust, the Company shall also represent that theproposed amendment is consistent with the Company's interpretation of the Plans.

12.02 The Trust shall not terminate until the date on whichPlan participants and their beneficiaries are no longer entitled to benefitspursuant to the terms of the Plans unless sooner revoked in accordance withSection 1.02. Upon termination of the Trust any assets remaining in the Trustshall be returned to the Company.

12.03 Notwithstanding Section 1.02, at any time, upon writtenapproval of participants or beneficiaries entitled to payment of benefitspursuant to the terms of the Plans, the Company may terminate this Trust priorto the time all benefit payments under the Plans have been made. All assets inthe Trust at termination shall be returned to the Company.

ARTICLE XIII

MISCELLANEOUS

13.01 Any provision of this Trust Agreement prohibited by lawshall be ineffective to the extent of any such prohibition, without invalidatingthe remaining provisions hereof.



13.02 Except to the extent, if any, preempted by ERISA, thisTrust Agreement shall be governed by and construed in accordance with theinternal laws of the State of California. Any provision of this Trust Agreementprohibited by law shall be ineffective to the extent of any such prohibition,without invalidating the remaining provisions hereof.

13.03 For purposes of this Trust, Change of Control shallmean: (a) the Company is a party to a merger or combination under the terms ofwhich less than 75% of the shares in the resulting company are owned by theshareholders of the Company immediately preceding such event; or (b) at least75% in fair market value of the Company's assets are sold; or (c) at least 25%in voting power in election of directors of the Company's capital stock isacquired by any one person or group as that term is used in Rule 13d-5 under theSecurities Exchange Act of 1934.

13.04 Despite any other provision of this Trust Agreement thatmay be construed to the contrary, following a Change in Control, all powers ofthe Committee, the Company and the Board to direct the Trustee under this TrustAgreement shall terminate, and the Trustee shall

-12-

act on its own discretion to carry out the terms of this Trust Agreement inaccordance with the Plans and this Trust Agreement.

13.05 The Company and the Subsidiaries shall from time to timepay taxes of any and all kinds whatsoever that at any time are lawfully leviedor assessed upon or become payable in respect of the Trust Fund, the income orany property forming a part thereof, or any security transaction pertainingthereto. To the extent that any taxes lawfully levied or assessed upon the TrustFund are not paid by the Company and the Subsidiaries, the Trustee shall havethe power to pay such taxes out of the Trust Fund and shall seek reimbursementfrom the Company and the Subsidiaries. Prior to making any payment, the Trusteemay require such releases or other documents from any lawful taxing authority asit shall deem necessary. The Trustee shall contest the validity of taxes in anymanner deemed appropriate by the Company or its counsel, but at the Company'sand the Subsidiaries' expense, and only if it has received an indemnity bond orother security satisfactory to it to pay any such expenses. Prior to a Change inControl, the Trustee (i) shall not be liable for any nonpayment of tax when itdistributes an interest hereunder on directions from the Company, and (ii) shallhave no obligation to prepare or file any tax return on behalf of the TrustFund, any such return being the sole responsibility of the Company. The Trusteeshall cooperate with the Company in connection with the preparation and filingof any such return.

13.06 Benefits payable to participants and their beneficiariesunder this Trust Agreement may not be anticipated, assigned (either at law or inequity), alienated, pledged, encumbered or subjected to attachment, garnishment,levy, execution or other legal or equitable process.

13.07 The Trust and the Plans are parts of a single,integrated employee benefit plan system and shall be construed together. In theevent of any conflict between the terms of this Trust Agreement and theagreements that constitute the Plans, such conflict shall be resolved in favorof this Trust Agreement.

13.08 Actions by the Company shall be by its Board, anauthorized committee of the Board, or a duly authorized officer, with suchactions certified to the Trustee by an appropriately certified copy of theaction taken. The Trustee shall be protected in acting upon any such notice,resolution, order, certificate or other communication believed by it to begenuine and to have been signed by the proper party or parties.

13.09 This Trust Agreement shall be binding upon and inure tothe benefit of the Company, the Subsidiaries and the Trustee and theirrespective successors and assigns.

13.10 This Trust Agreement may be executed in an original andany number of counterparts, each of which shall be deemed to be an original ofone and the same instrument.

13.11 The Company and the Subsidiaries are the true



beneficiaries hereunder in that the payment of benefits, directly or indirectlyto or for a participant or beneficiary by the Trustee, is in satisfaction of theCompany's and the Subsidiaries' liability therefor under the Plans.

-13-

Nothing in this Trust Agreement shall establish any beneficial interest in anyperson other than the Company and the Subsidiaries.

ARTICLE XIV

EFFECTIVE DATE

The effective date of this Trust Agreement shall be December5, 1995.

IN WITNESS WHEREOF the Company and the Trustee have signedthis Trust Agreement as of the date first written above.

TRUSTEE: THE COMPANY:

WELLS FARGO BANK, N.A. HOMESTAKE MINING COMPANY

By:___________________ By:_____________________Title:________________ Title:__________________

-14-

APPENDIX A

Deferred Compensation Plan

Supplemental Retirement Plan

Executive Supplemental Retirement Plan

Special Retirement Plan

Supplemental Retirement Agreements for Felmont Oil Employees

Employment Agreement with Harry M. Conger dated July 16, 1982, as amended.

Split Dollar Insurance Plan

-l-



EXHIBIT 11


COMPUTATION OF EARNINGS PER SHARE(In thousands, except per share amounts)

<TABLE><CAPTION>---------------------------------------------------------------------------------------------------------------------------------

1995 1994 1993---------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C>PRIMARY:

Earnings:Net income $30,327 $78,016 $52,494Less dividends on HCI series 1 second preference shares (885)

------------- ------------- -------------Net income applicable to primary earnings

per share calculation $30,327 $78,016 $51,609============= ============= =============

Weighted average number of shares outstanding 138,117 137,733 137,046============= ============= =============

Net income per share - primary $0.22 $0.57 $0.38============= ============= =============

FULLY DILUTED:

Earnings:Net income $30,327 $78,016 $52,494Less dividends on HCI series 1 second preference shares (885)Add:

Interest relating to 5.5% convertiblesubordinated notes, net of tax 6,517 6,517 3,447

Amortization of issuance costs relating to 5.5%convertible subordinated notes, net of tax 443 443 234

------------- ------------- -------------Net income applicable to fully diluted earnings

per share calculation $37,287 $84,976 $55,290============= ============= =============

Weighted average number of shares outstanding:Common shares 138,117 137,733 137,046Additional average shares outstanding assuming

conversion of 5.5% convertible subordinated notes 6,505 6,505 3,397------------- ------------- -------------

144,622 144,238 140,443============= ============= =============

Net income per share - fully diluted (a) $0.26 $0.59 $0.39============= ============= =============

<FN>(a) This calculation is submitted in accordance with Regulation S-K item

601(b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15because it produced an anti-dilutive result.

</TABLE>



EXHIBIT 13

Index to Exhibit 13:

Selected information from the 1995 Annual Report to Shareholders is incorporatedby reference in the Form 10-K and such information is herewith filedelectronically as Exhibit 13. Such selected information is listed below. Notedpage references correspond to pagination in the 1995 Annual Report toShareholders.

Annual ReportPage

Management's Discussion and Analysis 22-27

Consolidated Financial Statements 28-31

Notes to Consolidated Financial Statements 32-43

Report of Independent Auditors 44

Management's Responsibility forFinancial Reporting 44

Quarterly Selected Data 45

Common Stock Price Range 45

Eight-Year Selected Data 46-47

Appendix 1: Description of Bar Charts in Management's Discussionand Analysis

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Unless specifically stated otherwise, the following information relates toamounts included in the consolidated financial statements, including theCompany's interests in mining partnerships accounted for using the equitymethod, without reduction for minority interests. Effective January 1, 1996Homestake adopted the "Gold Institute Production Cost Standard" for reporting ofper ounce production costs. All per ounce production costs in this annual reportare presented on this basis.)

Results of Operations

Homestake Mining Company ("Homestake" or the "Company") recorded net income of$30.3 million or $0.22 per share in 1995 compared to net income of $78.0 millionor $0.57 per share in 1994 and $52.5 million or $0.38 per share in 1993. Thehigher 1994 earnings reflect $23.8 million or $0.17 per share of nonrecurringgains and a lower effective income and mining tax rate. Nonrecurring gains in1994 included $15.7 million ($12.6 million after tax) on the sale of theCompany's interest in the Dee mine and $11.2 million ($11.2 million after tax)on the dilution of the Company's interest in Prime Resources Group Inc.("Prime") following Prime's sale of additional shares to the public. The 1994results also included a $7.8 million tax benefit resulting from a reorganizationof Canadian exploration assets. The 1993 results included a $16.0 million pretaxwrite-down of oil assets, and restructuring and business combination expenses of$8.2 million.

(See Appendix 1: Description of Bar Chart A "Net Income.")

Gold Operations: The results of the Company's operations are affectedsignificantly by the market price of gold. Gold prices are influenced bynumerous factors over which the Company has no control, including expectationswith respect to the rate of inflation, the relative strength of the UnitedStates dollar and certain other currencies, interest rates, global or regionalpolitical or economic crises, demand for gold for jewelry and industrialproducts, and sales by holders and producers of gold in response to thesefactors.

The Company's general policy is to sell its production at current prices.However, in certain limited circumstances, the Company will enter into forwardsales commitments for small portions of its gold production. In 1994, theCompany entered into forward sales for 183,200 ounces of gold it expected toproduce at the Nickel Plate mine during 1995 and 1996. The purpose of theforward sales program was to allow for recovery of the Company's remaininginvestment in the mine and provide for estimated reclamation and closure costs.During 1995, 113,200 ounces of gold were delivered or financially settled underthis program. At December 31, 1995 forward sales for 70,000 ounces at an averageprice of $421 per ounce remain outstanding.

A significant portion of the Company's operating expenses are incurred in



Australian and Canadian currencies. The Company's profitability is impacted byfluctuations in these currencies' exchange rates relative to the United Statesdollar. Under the Company's foreign currency protection program, the Company hasentered into a series of foreign currency option contracts which establishedtrading ranges within which the United States dollar may be exchanged forAustralian and Canadian dollars. See note 21 to the consolidated financialstatements for additional information regarding this program.

(See Appendix 1: Description of Bar Chart B "Gold and Ore Sales.")

Revenues from gold and ore sales totaled $675.2 million in 1995 compared torevenues of $629.2 million in 1994 and $687.3 million in 1993. The increase in1995 revenues from 1994 primarily is due to higher sales volumes and a slightlyhigher gold price. The decline in 1994 revenues from 1993 reflects lower goldsales volumes, partially offset by higher gold prices. During 1995, the Companysold 1,873,500 equivalent ounces of gold at an average price of $386 perequivalent ounce compared to 1,692,800 ounces sold at an average price of $384per ounce during 1994 and 1,983,300 ounces sold at an average price of $359 perounce during 1993.

Total gold production of 1,877,300 equivalent ounces during 1995 comparesto 1,696,400 ounces during 1994 and 1,917,900 ounces during 1993. The increasein 1995 production from 1994 primarily is due to the commencement of productionat the new Eskay Creek mine, partially offset by production declines at certainother locations. The 1994 decrease in production from 1993 reflects the absenceof production following the sale of the Dee mine in March 1994, the 1993 salesof the Mineral Hill and Golden Bear mines, the completion of mining operationsin 1993 at the Santa Fe mine, as well as lower production at the Homestake andMcLaughlin mines.

In January 1995, commercial production began at the Eskay Creek mine inBritish Columbia, Canada. Eskay Creek sold 104,100 tons of ore containing196,500 ounces of gold and 9.9 million ounces of silver, equivalent toapproximately 331,300 ounces of gold during 1995. Total cash costs, includingthe costs of third-party smelters, were $185 per equivalent ounce during 1995.Through its majority ownership of Prime, the Company has a 50.6% interest in theEskay Creek mine.

22

At the Homestake mine in South Dakota, production of 402,900 ounces during1995 compares to 393,900 ounces during 1994 and 447,600 ounces during 1993. Theincrease in production during 1995 is due to higher ore grades, partially offsetby lower mill throughput. The lower throughput primarily results from theprocessing of harder than normal ore, principally from the Open Cut. Additionalscreening of ore prior to processing through the mill has increased throughputduring the fourth quarter of 1995. Production during 1994 decreased from 1993primarily due to lower grades resulting from an extended pre-stripping anddevelopment program in the Open Cut, the collapse of a ventilation raise whichhad limited access to the deeper, higher-grade areas in the undergroundoperations, and flooding following a severe storm late in the year. IncreasedOpen Cut costs in 1995 and lower production in 1995 and 1994 compared to 1993resulted in increases in total cash costs to $303 and $291 per ounce during 1995and 1994, respectively, from $265 per ounce during 1993.

(See Appendix 1: Description of Bar Chart C "Gold Production.")

Production at the McLaughlin mine in northern California decreased to241,800 ounces during 1995 compared to 250,500 ounces and 305,300 ounces during1994 and 1993, respectively. Production during 1995 was hampered by the effectsof severe rain and flooding early in the year. Insurance proceeds of $3.8million received by the Company as reimbursement for costs associated with theflooding were credited to operating costs. Total cash costs decreased to $242per ounce during 1995 from $249 per ounce during 1994. The decline in productionduring 1994 compared to 1993 primarily was due to the mining of lower-grade orein the South Pit. Lower grades, combined with costs associated with anunderground exploration program, increased total cash costs to $249 per ounceduring 1994 from $193 per ounce during 1993. Gold production levels at theMcLaughlin mine are expected to decline significantly in 1996 as miningoperations will cease mid-year, and production will then be derived fromprocessing lower-grade stockpiles.

The Company's share of production from the Round Mountain mine in Nevadawas 86,100 ounces during 1995 compared to 105,900 ounces during 1994 and 93,700ounces during 1993. The lower production in 1995 is due in part to lower gradesand volumes of ore placed on both the reusable and dedicated pads early in theyear. In the latter part of 1995, the rate of placement of ore on the dedicatedpad was increased. However, due to the length of time between the initialloading of ore on to the dedicated pad and the commencement of leaching, asignificant portion of the gold contained in the dedicated pad ore will not berecovered until 1996. The lower production resulted in an increase in total cashcosts to $254 per ounce during 1995 compared to $182 per ounce during 1994 and$226 per ounce during 1993. The increase in production and correspondingdecrease in cash costs per ounce during 1994 reflects higher grades and



recoveries on the reusable pad and larger quantities of lower-grade ore placedon the dedicated pad. The permitting process is proceeding for the constructionof an 8,000 tons-per-day ("TPD") gravity mill to process higher-grade sulfideores and regulatory approvals are anticipated by the second quarter of 1996.Final design engineering on the $65 million (Homestake's share - $16 million)project is expected to be completed in time to allow construction to begin inthe summer of 1996 and mill start-up in late 1997.

The Company's share of production at the Williams mine in the Hemlo miningcamp in Canada amounted to 202,600 ounces during 1995 at a total cash cost of$222 per ounce compared to 222,700 ounces produced at a cost of $203 per ounceduring 1994 and 246,100 ounces produced at a cost of $198 per ounce during 1993.The decreases in production and increases in cash costs per ounce during 1995and 1994 primarily are due to the processing of lower-grade ore. The 1994increase in cash costs per ounce was partially offset by a weakening Canadiandollar in relation to the United States dollar. Production at the Williams mineis expected to remain at current levels for the next few years.

The Company's share of production at the David Bell mine, also in the Hemlomining camp, amounted to 79,400 ounces during 1995 at a total cash cost of $203per ounce compared to 96,100 ounces produced at a cost of $167 per ounce during1994 and 107,600 ounces produced at a cost of $154 per ounce during 1993. Theincrease in cash costs per ounce during 1995 primarily is due to lowerproduction. During 1995, production was limited because only two areas wereavailable for mining for most of the year which reduced mining flexibility andresulted in lower mill throughput and a lower-grade of ore processed. Inaddition, mining activity was delayed during the fourth quarter of 1995 instopes close to the neighboring Golden Giant mine's property line whilemaintenance was completed on that company's mine shaft. A third mining block wasdeveloped late in the year which has increased min-

23

ing flexibility. The decrease in production and increase in cash costs per ounceduring 1994 was due to the processing of lower-grade ore, partially offset by aweakening Canadian dollar in relation to the United States dollar. Productionfrom the mine is expected to increase during 1996.

Production at the Nickel Plate mine in Canada of 91,400 ounces during 1995increased from 82,100 ounces produced during 1994 and 73,900 ounces producedduring 1993. The increase in production during 1995 from 1994 primarily is dueto the processing of higher-grade ore. The increase in production during 1994from 1993 is also due to the processing of higher-grade ore following completionof the Stage IV pit expansion program. The estimate of the remaining orereserves at the Nickel Plate mine was reduced during the fourth quarter of 1994and again in the fourth quarter of 1995. The decreases in the ore reservesaccelerated the recovery of the deferred stripping costs and resulted incorresponding increases in per unit cash costs. Total cash costs increased to$379 per ounce in 1995 from $349 per ounce in 1994 and $310 per ounce during1993. Gold production at the Nickel Plate mine is expected to cease by the endof the third quarter of 1996 as the ore reserves will be depleted.

Homestake Gold of Australia Limited's ("HGAL") share of production from theKalgoorlie operations in Western Australia totaled 311,400 ounces during 1995compared to 352,100 ounces during 1994 and 332,600 ounces during 1993. The 1995results primarily reflect a temporary decline in production while the newFimiston mill additions were integrated with the existing complex, and lowerproduction at Mt. Charlotte due to operational difficulties which hamperedproduction early in the year. The new mill, which was commissioned in August1995, has increased total milling capacity at the Kalgoorlie operations to33,500 TPD and allowed for further expansion of the Super Pit. The increase inproduction during 1994 was due to an increase in tons mined, higher grades, andimproved recoveries from the Super Pit, partially offset by a decrease inproduction at Mt. Charlotte and an increase in the payment of gold to HGAL'sjoint venture partner under the disproportionate sharing arrangement. Total cashcosts at the Kalgoorlie operations increased to $296 per ounce during 1995 from$257 and $229 per ounce during 1994 and 1993, respectively. The increase in cashcosts per ounce during 1995 from 1994 is primarily due to the temporary declinein production, while the increase in costs in 1994 from 1993 is primarily due toa strengthening in the Australian dollar in relation to the United Statesdollar.

In February 1995, the El Hueso mine ceased operations as reserves weredepleted. Leaching of existing stockpiles will continue until mid-1996. The ElHueso property is leased from Codelco, a Chilean government agency, through theyear 1998. Additional land, which is subject to 30% to 50% profit sharing withCodelco, has been leased through 2004. A 1995 exploration program on theadditional land identified a new gold-bearing deposit, Manto Agua de la Falda,which contains an ore reserve of 1.0 million tons at a grade of 0.18 ounces ofgold per ton. An engineering study is in progress to evaluate the most efficientmethod of processing this ore at the existing El Hueso plant. A preliminaryagreement in principle has been reached with Codelco to form a new company toexplore for and exploit additional resources.



Consolidated Production Costs per Ounce:<TABLE><CAPTION>

(per ounce of gold) 1995 1994 1993--------------------------------------------------------------------------------------------<S> <C> <C> <C>Direct mining costs $233 $250 $235Deferred stripping adjustments 2 (1) (11)Costs of third-party smelters 16 - -Other (1) (4) (2)--------------------------------------------------------------------------------------------Cash Operating Costs 250 245 222Royalties 4 5 5Production taxes 3 2 2--------------------------------------------------------------------------------------------Total Cash Costs 257 252 229Depreciation and amortizaton 46 41 49Reclamation 5 7 2--------------------------------------------------------------------------------------------Total Production Costs $308 $300 $280============================================================================================</TABLE>

During 1995, Homestake's overall total cash cost per equivalent ounceincreased to $257 from $252 per ounce during 1994 and $229 per ounce during1993. The higher 1995 per ounce costs primarily reflect the temporary productiondeclines at the Round Mountain, David Bell and Kalgoorlie operations and highercosts at the Homestake mine, partially offset by production from the newlow-cost Eskay Creek mine. The increase in cash costs per ounce during 1994compared to 1993 primarily was due to lower production at the Homestake andMcLaughlin mines. The Company's overall noncash cost per equivalent ounce during1995 was $51 compared to $48 per ounce and $51 per ounce during 1994 and 1993,respectively. The increase in noncash costs per ounce during 1995 is a result ofproduction from the new Eskay Creek mine which has higher per unit depreciationand amortization charges. The 1994 decline in noncash costs per ounce reflectslower per unit depreciation charges as a result of ore reserve expansions atseveral operations.

24

Reconciliation of Total Cash Costs per Ounce to Financial Statements:<TABLE><CAPTION>(thousands of dollars,except per ounce amounts) 1995 1994 1993----------------------------------------------------------------------------------------------------<S> <C> <C> <C>Production Costs per Financial Statements $ 481,886 $ 447,129 $ 454,623Costs not included in Homestake's production costs:

Costs of third-party smelters 29,214 464 553Production costs of equity-accounted investments 11,752 15,683 19,968

Sulphur and oil production costs (26,917) (19,210) (15,494)Reclamation accruals (8,754) (12,112) (3,498)By-product silver revenues (2,334) (2,326) (2,919)Inventory movements and other (2,659) (1,298) (13,746)----------------------------------------------------------------------------------------------------Production Costs for per Ounce Calculation Purposes $ 482,188 $ 428,330 $ 439,487====================================================================================================Ounces Produced During the Year 1,877,329 1,696,389 1,917,853Total Cash Costs per Ounce $ 257 $ 252 $ 229====================================================================================================

Main Pass 299: The Company's share of sulphur revenues from the Main Pass 299mine in the Gulf of Mexico increased to $30.5 million in 1995 from $16.9 millionin 1994 and $2.0 million in 1993, reflecting increased sales volumes, includingsales from inventories, and rising sulphur prices. The Company sold 445,600 tonsof sulphur at an average price of $68 per ton during 1995 compared to 317,700tons of sulphur sold at an average price of $53 per ton during 1994 and 33,600tons of sulphur sold at an average price of $59 per ton during 1993. TheCompany's share of sulphur production was 365,100 tons in 1995 compared to376,600 tons in 1994 and 116,000 tons in 1993. Operating earnings from thesulphur operations of $3.7 million in 1995 compare to operating losses of $2.9million in 1994 and $11.2 million in 1993.

Main Pass 299 oil production, which peaked in 1992, is expected to continueto decline over the next few years. The Company's share of oil revenues amountedto $10.1 million in 1995 compared to $10.0 million and $14.2 million in 1994 and1993, respectively. Operating earnings from oil operations totaled $2.1 millionin 1995 compared to operating earnings of $2.7 million in 1994 and $0.9 millionin 1993. The lower operating earnings during 1995 reflect lower sales volumesand increased costs, partially offset by rising oil prices. The improved resultsin 1994 from 1993 reflect increased operating efficiencies. In addition, atDecember 31, 1993 the Company recorded a pretax write-down of oil assets of



$16.0 million based on a decline in the market price of oil at that time.

Interest and other income: Interest income of $16.7 million in 1995 compares to$9.8 million in 1994 and $4.8 million in 1993. The increases in interest incomeare due to higher cash and equivalents and short-term investments balances andincreases in average interest rates. Other income of $11.6 million in 1995compares to $25.6 million and $13.1 million in 1994 and 1993, respectively.Other income in 1995 includes a gain of $5.4 million from the sale of theCompany's remaining uranium inventory. The decrease in other income in 1995 from1994 as well as the increase in 1994 from 1993 primarily are due to a pretaxgain in 1994 of $15.7 million on the sale of the Company's interest in the Deemine in Nevada.

Depreciation, depletion and amortization: Depreciation, depletion andamortization increased to $99.6 million in 1995 compared to $76.2 million in1994 and $103.4 million in 1993. The 1995 increase is a result of additionaldepreciation charges related to the Eskay Creek mine, partially offset byreserve expansions at certain locations and lower production at other locations.The decrease in 1994 primarily is due to lower production and the write-down ofoil assets in 1993.

(See Appendix 1: Description of Bar Chart D "Exploration Expense.")

Exploration expense: Exploration expense, excluding $7.2 million of in-mineexploration expenditures which are included in production costs and $2.2 millionof capitalized costs associated with development stage projects, increased to$27.5 million in 1995 from $21.3 million in 1994 and $17.5 million in 1993. Theincrease in exploration expense in 1995 primarily is due to increased activityat the Ruby Hill project in Nevada and continued work near the El Hueso mine andon the El Foco concession in Venezuela. The increase in exploration expense in1994 from 1993 reflects increased activity at the Ruby Hill project, partiallyoffset by the cessation of the Homestake mine north drift project in early 1994.Exploration spending in 1996 is expected to continue to rise as the Companypursues numerous attractive exploration targets and prospects.

Interest expense: Interest expense of $11.3 million in 1995 compares to $10.1million in 1994 and $9.1 million in 1993. Interest expense increased in 1995primarily due to $0.7 million of interest which was capitalized in 1994. Theincrease in

25

interest expense in 1994 from 1993 primarily is due to a full year's interest onthe Company's convertible subordinated notes which were issued in June 1993,partially offset by the repayment of $8.3 million of Australian finance leasedebt in February 1994. The Company's average rate of interest on its long-termdebt was 5.5% in 1995 and 1994 compared to 5.1% in 1993.

Income taxes: The Company's income and mining tax rate was 46% in 1995 comparedto 18% and 19% in 1994 and 1993, respectively. The 1994 and 1993 rates were lowdue to the availability of certain tax benefits. The higher effective tax ratesexperienced in 1995 will continue as the tax benefits available in 1994 and 1993have been utilized and the major portion of the Company's current earnings arein jurisdictions with higher income and mining tax rates.

At December 31, 1995 and 1994 the Company had tax valuation allowances of$59.6 million and $49.8 million, respectively. While circumstances could occurwhich would permit the Company to reduce its deferred tax valuation allowancesin future years, based on the Company's current projections it does not expectfuture reductions to be material. Events that would allow the Company tomaterially reduce such allowances in the future would include (i) generatingsubstantial taxable income in Chile, (ii) an acceleration of the payment of theCompany's postretirement benefit obligation accrual and (iii) an acceleration ofthe disposal of certain non-amortizable United States and Australia land andmineral properties which are located either on, or in proximity to, theCompany's existing operating minesites.

Minority interests: Income allocable to minority interests in consolidatedsubsidiaries increased to $16.0 million in 1995 from $8.9 million in 1994 and$3.1 million in 1993. The increase in 1995 primarily is due to the income fromthe Eskay Creek mine.

LIQUIDITY AND CAPITAL RESOURCES

Homestake's cash and equivalents and short-term investments balances increasedby $7.2 million to $212.4 million at December 31, 1995 as a result of strongcash flows from the Company's operations, partially offset by capitalexpenditures of $81.0 million, investments in mining companies of $37.3 millionand $16.7 million related to the acquisition of HGAL. Net cash provided byoperations was $153.5 million in 1995 compared to $133.7 million in 1994 and$170.1 million in 1993. In addition, $13.3 million was realized on the sale ofassets in 1995 compared to $24.5 million and $9.6 million in 1994 and 1993,respectively.



On August 14, 1995 Homestake announced its unconditional offer to acquirethe 18.5% of HGAL it did not already own by offering 0.089 of a Homestake shareor A$1.90 in cash for each of the 109,605,000 HGAL shares owned by the public.At December 31, 1995 acceptances for a total of 38.9 million HGAL shares hadbeen received, and Homestake owned 88.1% of the shares of HGAL outstanding atthat date. The offer closed on February 9, 1996. Homestake was successful inacquiring 107,186,000 shares of HGAL resulting in ownership of 99.6% of HGAL andis currently proceeding with the compulsory acquisition of the remaining HGALshares. Upon completion of this transaction, Homestake expects it will haveissued a total of 8.5 million of its common shares and paid $22.3 million forthe HGAL minority interests. See note 3 to the consolidated financial statementsfor further information.

(See Appendix 1: Description of Bar Chart E: "Cash and Equivalents andShort-term Investments.")

In October 1995, Homestake and its 50.6%-owned subsidiary, Prime, enteredinto agreements to collectively purchase (51% Homestake and 49% Prime) anapproximate 6% interest in Teuton Resources Corp. ("Teuton") and an approximate7% interest in Minvita Enterprises Ltd. ("Minvita") for a total of $2 million.Teuton and Minvita will spend a minimum of 90% of the $2 million of proceeds onexploration and development of their jointly-owned Clone property innorthwestern British Columbia, Canada.

In July 1995, the Company acquired for $24 million a 10% interest(fully-diluted) in Navan Resources plc ("Navan") and an option to acquire 50% ofNavan's interest in Bimak AD ("Bimak"), the owner of the Chelopech gold/copperprocessing operations located 45 miles east of Sofia, Bulgaria. Bimak has anexclusive contract to purchase all of the ore mined from the Chelopech mine. TheCompany can acquire 50% of Navan's 68% interest in Bimak by investing anadditional $48 million, which would be used to fund a portion of the cost of aproposed expansion.

Additions to property, plant and equipment in 1995 totaled $81.0 millioncompared to $88.7 million and $57.8 million in 1994 and 1993, respectively.Capital additions in 1995 include $50.9 million at the Kalgoorlie operationsprimarily for the Fimiston mill expansion and $10.6 million at

26

the Homestake mine primarily for the Open Cut expansion. Additions in 1994included $42 million at the Eskay Creek mine, $20 million at the Homestake minefor Open Cut expansion and $13 million at Kalgoorlie for mill expansions andmodifications. Additions in 1993 included $19 million at the Nickel Plate minefor a pit expansion and $12 million at the Homestake mine for the Open Cutexpansion. The remaining expenditures during these years primarily were forreplacement capital to maintain existing production capacity.

In addition to sustaining capital at existing operations, planned capitalexpenditures during 1996 include $14.9 million and $10.6 million at theKalgoorlie operations and the Homestake mine, respectively, primarily onnumerous projects related to improving the efficiency of these operations, $13.2million at the Round Mountain mine primarily for the new mill project, and $8.7million at the advanced-stage Ruby Hill project in Nevada.

(See Appendix 1: Description of Bar Chart F: "Cash Provided by Operations.")

Exploration activities at Ruby Hill have resulted in the discovery ofseveral mineralized zones. A positive feasibility study on the West Archimedesdeposit was completed in the fourth quarter of 1995. This study indicates thatan open-pit, heap-leach operation on this deposit will produce an average of105,000 ounces of gold per year over a six-year life at a total cash cost of$140 per ounce. Capital requirements, including pre-stripping of the overlyingalluvium, are estimated to be $65 million. The construction of facilities, whichis dependent on the receipt of permits, is scheduled to begin in early 1997 withinitial gold production possible in late 1997.

Total common share dividends paid by the Company were $27.6 million in 1995compared to $24.1 million in 1994 and $13.7 million in 1993. In May 1994, theCompany increased its regular quarterly dividend from $0.025 to $0.05 per share.

In 1994, Prime sold five million common shares at approximately $6.70 pershare to the public. The Company recorded a gain of $11.2 million on thistransaction, which resulted in a reduction of the Company's interest in Primefrom 54.2% to 50.6%. It is the Company's policy to recognize in the incomestatement any gains or losses on the issuance of stock of the Company'ssubsidiaries.

In 1993, the Company sold $150 million of 5.5% convertible subordinatednotes maturing in the year 2000. The notes are convertible into the Company'sshares at a price of $23.06 per common share and are redeemable by the Companyon or at any time after June 23, 1996. Proceeds from the notes were used toretire existing gold loans and other long-term debt.



The Company has a $150 million revolving credit facility which is availablethrough September 30, 2000. This facility provides for borrowings denominated inUnited States dollars, Canadian dollars, ounces of gold or any combination ofthese. The credit agreement includes a minimum consolidated net worthrequirement of $500 million. No amounts have been borrowed under this facility.

The Company incurred $14.3 million of reclamation-related expendituresduring 1995 at its discontinued uranium facility at Grants, New Mexico. Inaccordance with the Energy Policy Act of 1992, the United States Department ofEnergy ("DOE") is responsible for 51.2% of all past and future reclamationexpenditures at this facility. The Company has received $9.8 million to datefrom the DOE and the accompanying balance sheet at December 31, 1995 includes areceivable of $18.7 million for the DOE's share of reclamation expenditures madeby the Company through 1995. The total future cost for reclamation, remediation,monitoring and maintaining compliance at the Grants site is estimated to be $24million. The Company believes that its share of the estimated remaining cost ofreclaiming the Grants facility, net of estimated proceeds on the ultimatedisposals of related assets, is fully provided in the financial statements atDecember 31, 1995.

The Company evaluates its accruals for remediation, reclamation and siterestoration regularly. With respect to non-operating properties, the Companybelieves it has fully provided for all remediation liabilities and for estimatedreclamation and site restoration costs. With respect to operating properties,the Company is providing for estimated ultimate reclamation relating to ongoingand end-of-mine life restoration and closure costs over the lives of itsindividual operations using the units-of-production method. See note 20 to theconsolidated financial statements for discussion of certain environmentalmatters.

Future results will be impacted by such factors as the market price ofgold, the Company's ability to expand its ore reserves and the fluctuations offoreign currency exchange rates. The Company believes that the combination ofcash, short-term investments, available lines of credit and future cash flowsfrom operations will be sufficient to meet normal operating requirements andanticipated dividends.

27


STATEMENTS OF CONSOLIDATED INCOME(In thousands, except per share amounts)

</TABLE><TABLE><CAPTION>

For the years ended December 31, 1995, 1994 and 1993 1995 1994 1993-------------------------------------------------------------------------------------------------------------------<S> <C> <C> <C>Revenues

Gold and ore sales $ 675,222 $ 629,174 $ 687,285Sulphur and oil sales 40,620 26,882 16,220Interest income 16,737 9,762 4,832Equity earnings 2,155 2,857 795Gain on issuance of stock by subsidiary 11,224Other income 11,631 25,588 13,096

-------------------------------------------------------------------------------------------------------------------

746,365 705,487 722,228-------------------------------------------------------------------------------------------------------------------

Costs and ExpensesProduction costs 481,886 447,129 454,623Depreciation, depletion and amortization 99,602 76,171 103,377Administrative and general expense 37,283 38,159 40,553Exploration expense 27,541 21,347 17,457Interest expense 11,297 10,124 9,147Other expense 3,290 6,744 4,492Write-downs of mining properties and restructuring and

business combination expenses 24,183-------------------------------------------------------------------------------------------------------------------

660,899 599,674 653,832-------------------------------------------------------------------------------------------------------------------

Income Before Taxes and Minority Interests 85,466 105,813 68,396Income and Mining Taxes (39,141) (18,880) (12,775)Minority Interests (15,998) (8,917) (3,127)-------------------------------------------------------------------------------------------------------------------

Net Income $ 30,327 $ 78,016 $ 52,494



===================================================================================================================Net Income Per Share $ 0.22 $ 0.57 $ 0.38===================================================================================================================

Average Shares Used in the Computation 138,117 137,733 137,046===================================================================================================================

See notes to consolidated financial statements.

28


CONSOLIDATED BALANCE SHEETS(In thousands, except per share amount)

</TABLE><TABLE><CAPTION>

December 31, 1995 and 1994 1995 1994--------------------------------------------------------------------------------------------------------------------------------<S> <C> <C>ASSETSCurrent Assets

Cash and equivalents $ 145,957 $ 105,701Short-term investments 66,416 99,479Receivables 58,046 58,994Inventories 69,979 71,715Deferred income and mining taxes 20,521Other 7,798 6,910

--------------------------------------------------------------------------------------------------------------------------------

Total current assets 368,717 342,799--------------------------------------------------------------------------------------------------------------------------------

Property, Plant and Equipment - net 846,776 808,221--------------------------------------------------------------------------------------------------------------------------------

Investments and Other AssetsNoncurrent investments 46,188 15,774Other assets 59,952 35,174

--------------------------------------------------------------------------------------------------------------------------------

Total investments and other assets 106,140 50,948--------------------------------------------------------------------------------------------------------------------------------

Total Assets $ 1,321,633 $ 1,201,968================================================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITYCurrent Liabilities

Accounts payable $ 35,170 $ 35,674Accrued liabilities 53,937 54,138Income and other taxes payable 9,314 7,083

--------------------------------------------------------------------------------------------------------------------------------

Total current liabilities 98,421 96,895--------------------------------------------------------------------------------------------------------------------------------

Long-term LiabilitiesLong-term debt 185,000 185,000Other long-term obligations 120,418 110,719

--------------------------------------------------------------------------------------------------------------------------------

Total long-term liabilities 305,418 295,719--------------------------------------------------------------------------------------------------------------------------------

Deferred Income and Mining Taxes 189,925 136,274--------------------------------------------------------------------------------------------------------------------------------

Minority Interests in Consolidated Subsidiaries 92,012 84,310--------------------------------------------------------------------------------------------------------------------------------

Shareholders' EquityCapital stock, $1 par value per share:

Preferred - 10,000 shares authorized; no shares outstandingCommon - 250,000 shares authorized; shares outstanding:

1995 - 140,541; 1994 - 137,785 140,541 137,785Additional paid-in capital 382,314 339,785Retained earnings 109,145 106,405Accumulated currency translation adjustments 7,828 8,869



Other (3,971) (4,074)--------------------------------------------------------------------------------------------------------------------------------

Total shareholders' equity 635,857 588,770--------------------------------------------------------------------------------------------------------------------------------

Total Liabilities and Shareholders' Equity $ 1,321,633 $ 1,201,968=================================================================================================================================</TABLE>

Commitments and Contingencies - see notes 20 and 21.


29


STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY(In thousands)<TABLE><CAPTION>

AccumulatedAdditional Currency

For the years ended Common Paid-in Retained TranslationDecember 31, 1995, 1994 and 1993 Stock Capital Earnings Adjustments Other Total----------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>BALANCES, DECEMBER 31, 1992 $ 136,772 $ 322,688 $ 14,592 $ 1,133 $ (9,747) $ 465,438

Net income 52,494 52,494Dividends paid (14,591) (14,591)Sale of Homestake stock held by

Prime 1,155 4,258 5,413Exercise of stock options 686 10,397 11,083Stock issued to employee

savings plan 36 492 528Currency translation adjustments (6,753) (6,753)Other 5 1,627 1,632

-----------------------------------------------------------------------------------------------------------------------------------BALANCES, DECEMBER 31, 1993 137,494 334,737 52,495 (5,620) (3,862) 515,244

Net income 78,016 78,016Dividends paid (24,106) (24,106)Exercise of stock options 291 5,048 5,339Currency translation adjustments 14,489 14,489Unrealized loss on investments (382) (382)Other 170 170

-----------------------------------------------------------------------------------------------------------------------------------BALANCES, DECEMBER 31, 1994 137,785 339,785 106,405 8,869 (4,074) 588,770

Net income 30,327 30,327Dividends paid (27,587) (27,587)Exercise of stock options 206 2,680 2,886Stock issued for purchase of HGAL

minority interests 2,550 39,849 42,399Currency translation adjustments (1,041) (1,041)Change in unrealized loss on

investments 162 162Other (59) (59)

----------------------------------------------------------------------------------------------------------------------------------BALANCES, DECEMBER 31, 1995 $ 140,541 $ 382,314 $ 109,145 $ 7,828 $ (3,971) $ 635,857==================================================================================================================================</TABLE>


30


STATEMENTS OF CONSOLIDATED CASH FLOWS(In thousands)<TABLE><CAPTION>

For the years ended December 31, 1995, 1994 and 1993 1995 1994 1993--------------------------------------------------------------------------------------------------------------------------------



<S> <C> <C> <C>Cash Flows From Operations

Net income $ 30,327 $ 78,016 $ 52,494Reconciliation to net cash provided by operations:

Depreciation, depletion and amortization 99,602 76,171 103,377Write-downs of mining properties 16,032Gain on issuance of stock by subsidiary (11,224)Gain on disposals of assets (1,969) (19,521) (7,974)Deferred income and mining taxes 19,475 (3,665) 2,583Minority interests 15,998 8,917 3,127Reclamation - net (6,044) 3,986 (8,459)Other noncash items - net 3,462 27,222 17,435Effect of changes in operating working capital items:

Receivables 821 (8,824) (18,993)Inventories 1,324 (14,045) 10,357Accounts payable (852) 2,484 (4,009)Accrued liabilities and taxes payable (7,456) (6,938) 4,877Other (1,231) 1,138 (765)

---------------------------------------------------------------------------------------------------------------------------------Net cash provided by operations 153,457 133,717 170,082---------------------------------------------------------------------------------------------------------------------------------Investment Activities

Decrease (increase) in short-term investments 33,063 (99,479) 16,739Proceeds from sales of assets 13,295 24,542 9,649Additions to property, plant and equipment (80,979) (88,654) (57,825)Investments in mining companies (37,314)Purchase of HGAL minority interests (16,714)Other 3,296 (8,033) 1,060

--------------------------------------------------------------------------------------------------------------------------------Net cash used in investment activities (85,353) (171,624) (30,377)--------------------------------------------------------------------------------------------------------------------------------Financing Activities

Borrowings 146,074Debt repayments (8,352) (194,037)Dividends paid on common shares (27,587) (24,106) (13,706)Common shares issued 2,886 5,339 11,611Stock issued by subsidiary 31,870Redemption of HCI preferred shares (15,810)Sale of Homestake stock held by Prime 6,361Other 567

---------------------------------------------------------------------------------------------------------------------------------Net cash provided by (used in) financing activities (24,701) 4,751 (58,940)---------------------------------------------------------------------------------------------------------------------------------Effect of Exchange Rate Changes on Cash and Equivalents (3,147) 4,138 (254)---------------------------------------------------------------------------------------------------------------------------------Net Increase (Decrease) in Cash and Equivalents 40,256 (29,018) 80,511Cash and Equivalents, January 1 105,701 134,719 54,208---------------------------------------------------------------------------------------------------------------------------------Cash and Equivalents, December 31 $ 145,957 $ 105,701 $ 134,719=================================================================================================================================</TABLE>


31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(All tabular amounts in thousands, except per share amounts)

Note 1: Nature of Operations

Homestake Mining Company ("Homestake" or the "Company") is engaged in goldmining and related activities, including exploration, extraction, processing,refining and reclamation. Gold bullion, the Company's principal product, isproduced and sold in the United States, Canada, Australia and Chile. Ore andconcentrates, containing gold and silver, from the Eskay Creek and Snip mines inCanada are sold directly to smelters. The Company also produces and sellssulphur and oil.

Note 2: Significant Accounting Policies

The consolidated financial statements include Homestake and its majority-ownedsubsidiaries and their undivided interests in joint ventures after eliminationof intercompany amounts. At December 31, 1995 the Company owned 88.1% ofHomestake Gold of Australia Limited ("HGAL") and 50.6% of Prime Resources GroupInc. ("Prime") with the remaining interests reflected as minority interests inthe consolidated financial statements. Undivided interests in gold miningoperations (the Round Mountain mine in the United States; HGAL's interest in thegold mining operations at Kalgoorlie, Western Australia; Homestake Canada Inc.'s("HCI") interests in the Williams and David Bell mines in Canada; and Prime'sinterest in the Snip mine in Canada) and in the sulphur and oil recoveryoperations at Main Pass 299 in the Gulf of Mexico are reported using pro rata



consolidation whereby the Company reports its proportionate share of assets,liabilities, income and expenses.

Use of estimates: The preparation of financial statements in conformity withUnited States generally accepted accounting principles requires the Company'smanagement to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities atthe date of the financial statements, and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from thoseestimates.

Cash and equivalents include all highly-liquid investments with a maturity ofthree months or less at the date of purchase. The Company minimizes its creditrisk by placing its cash and equivalents with major international banks andfinancial institutions located principally in the United States, Canada andAustralia. The Company believes that no concentration of credit risk exists withrespect to cash and equivalents.

Short-term investments principally consist of highly-liquid United States andforeign government and corporate securities with original maturities in excessof three months. The Company classifies all short-term investments asavailable-for-sale securities. Unrealized gains and losses on these investmentsare recorded as a separate component of shareholders' equity, except thatdeclines in market value judged to be other than temporary are recognized indetermining net income.

Inventories, which include finished products, ore in-process, stockpiled ore,ore in transit, and supplies, are stated at the lower of cost or net realizablevalue. The cost of gold produced by United States operations is determinedprincipally by the last-in, first-out method ("LIFO"). The cost of otherinventories is determined primarily by averaging methods.

Exploration costs are expensed as incurred. All costs related to propertyacquisitions are capitalized.

Preoperating and development costs relating to new mines and major programs atoperating mines are capitalized. Ongoing development costs to maintainproduction are expensed as incurred.

Depreciation, depletion and amortization of mining properties, mine developmentcosts and major plant facilities are computed principally by theunits-of-production method based on estimated proven and probable ore reserves.Proven and probable ore reserves reflect estimated quantities of ore which canbe economically recovered in the future from known mineral deposits. Suchestimates are based on current and projected costs and prices. Other equipmentand plant facilities are depreciated using straight-line or accelerated methodsprincipally over estimated useful lives of three to ten years.

Property evaluations: Recoverability of investments in operating mines andnon-operating properties is evaluated periodically. Estimated future net cashflows from each mine and non-operating property are calculated using estimatesof proven and probable ore reserves for operating properties and estimatedcontained mineralization expected to be classified as proven and probablereserves based on geological delineation to date for non-operating properties,estimated future sales prices (considering historical and current prices, pricetrends and related fac-

32

tors) and operating capital and reclamation costs. Reductions in the carryingvalue of each mine or non-operating property are recorded to the extent theremaining investment exceeds the estimate of future undiscounted net cash flows.

Management's estimates of future cash flows are subject to risks anduncertainties. Therefore, it is reasonably possible that changes could occurwhich may affect the recoverability of the Company's investments in mineralproperties.

Undeveloped properties upon which the Company has not performed sufficientexploration work to determine whether significant mineralization exists arecarried at original acquisition cost.

In 1995, the Financial Accounting Standards Board ("FASB") issued Statementof Financial Accounting Standards No. ("SFAS") 121, "Accounting for theImpairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."SFAS 121 requires that long-lived assets and certain identifiable intangibles bereviewed for impairment whenever events or changes in circumstances indicatethat the carrying amount of an asset may not be recoverable, and, if deemedimpaired, measurement and recording of an impairment loss be based on the fairvalue of the asset which generally will be computed using discounted cash flows.The Company will adopt SFAS 121 prospectively for the year beginning January 1,1996. Based on current carrying values and estimated future undiscounted cash



flows of the Company's long-lived assets, the Company will not record acumulative effect upon adopting SFAS 121.

Reclamation costs and related accrued liabilities, which are based on theCompany's interpretation of current environmental and regulatory requirements,are accrued and expensed, principally by the units-of-production method based onestimated proven and probable ore reserves. Remediation liabilities are expensedupon determination.

Based on current environmental regulations and known reclamationrequirements, management has included its best estimates of these obligations inits reclamation accruals. However, it is reasonably possible that the Company'sestimates of its ultimate reclamation liabilities could change as a result ofchanges in regulations or cost estimates.

Noncurrent investments, which include mining securities, are carried at thelower of cost or market. Realized gains and losses are included in determiningnet income. The Company classifies noncurrent investments as available-for-saleinvestments. Unrealized gains and losses on these investments are recorded as aseparate component of shareholders' equity, except that declines in market valuejudged to be other than temporary are recognized in determining net income.

Product sales are recognized when title passes at the shipment or deliverypoint.

Income taxes: The Company follows the liability method of accounting for incometaxes whereby deferred income taxes are recognized for the tax consequences oftemporary differences by applying current statutory tax rates applicable tofuture years to differences between the financial statement amounts and the taxbases of certain assets and liabilities. Changes in deferred tax assets andliabilities include the impact of any tax rate changes enacted during the year.Mining taxes represent Canadian taxes levied on mining operations.

Foreign currency: Substantially all assets and liabilities of foreignsubsidiaries are translated at exchange rates in effect at the end of eachperiod. Revenues and expenses are translated at the average exchange rate forthe period. Accumulated currency translation adjustments are included as aseparate component of shareholders' equity. Foreign currency transaction gainsand losses are included in the determination of net income.

Pension plans and other postretirement benefits: Pension costs related to UnitedStates employees are determined using the projected unit credit actuarialmethod. Pension plans are funded through annual contributions. In addition, theCompany provides medical and life insurance benefits for certain retiredemployees and accrues the cost of such benefits over the period in which activeemployees become eligible for the benefits. The costs of the postretirementmedical and life insurance benefits are paid at the time the services areprovided.

Net income per share is computed by dividing net income by the weighted averagenumber of common shares and common share equivalents outstanding during theyear. Fully diluted net income per share is not presented since the exercise ofstock options would not result in a material dilution of earnings per share andthe conversion of the 5.5% convertible subordinated notes would produceanti-dilutive results.

33

Preparation of financial statements: Certain amounts for 1994 and 1993 have beenreclassified to conform to the current year's presentation. All dollar amountsare expressed in United States dollars unless otherwise indicated.

Note 3: Homestake Gold of Australia Limited

On August 14, 1995 the Company announced its unconditional offer to acquire the18.5% of HGAL it did not already own by offering 0.089 of a Homestake share orA$1.90 in cash for each of the 109,605,000 HGAL shares owned by the public.Through December 31, 1995 a total of 38.9 million additional HGAL shares wereacquired at a cost of $59.1 million, including $42.4 million for 2.6 millionnewly issued shares of the Company, $14.5 million paid in cash and $2.2 millionof transaction expenses. At December 31, 1995 Homestake owned 88.1% of theshares of HGAL. The offer closed on February 9, 1996. The Company acquired atotal of 107.2 million shares of HGAL from the public and currently isproceeding with compulsory acquisition of the remaining shares. The totalpurchase price to acquire all of the 18.5% of HGAL held by minority shareholdersis expected to be $164.4 million, including $142.1 million for 8.5 million newlyissued shares of the Company, $18.8 million paid in cash and $3.5 million oftransaction expenses.

The acquisition of the HGAL minority interests is being accounted for as apurchase. Based upon the total expected purchase price of $164.4 million, theexcess of the purchase price paid over the net book value of the minority



interests acquired will be approximately $140.4 million. Substantially all ofthe excess purchase price is attributable to mineral property interests and willbe amortized in accordance with the Company's accounting policies for mineralproperties.

The following unaudited pro forma information includes pro forma balancesheet information, assuming that the acquisition of all of the HGAL shares theCompany did not already own had occurred as of December, 31 1995, and pro formaresults of operations, assuming that the acquisition had occurred at thebeginning of each period presented. The pro forma information includesadjustments which are based on available information and certain assumptionsthat management of the Company believes are reasonable in the circumstances. Thepro forma information does not purport to represent what the results ofoperations actually would have been had the acquisition of the HGAL minorityinterests occurred at the beginning of the periods or to project the results ofoperations for any future date or period.<TABLE><CAPTION>

Pro Forma(Unaudited)

December 31, 1995----------------

<S> <C>Current assets $ 363,131Property, plant and equipment - net 968,742Investments and other assets 106,140

----------------Total assets $1,438,013

================

Current liabilities $ 98,421Long-term liabilities 305,418Deferred income and mining taxes 222,210Minority interests in consolidated subsidiaries 76,451Shareholders' equity 735,513

----------------Total liabilities and shareholders' equity $1,438,013

================</TABLE>

<TABLE><CAPTION>

Pro Forma(Unaudited)

1995 1994------------------------------------------

<S> <C> <C>Revenues $ 745,027 $ 704,187Costs and expenses 666,455 605,955

------------------------------------------

Income before taxes and minority interests 78,572 98,232Income and mining taxes (37,403) (16,958)Minority interests (15,430) (4,285)

------------------------------------------Net income $ 25,739 $ 76,989

==========================================

Net income per share $ 0.18 $ 0.53==========================================

</TABLE>

Note 4: Prime Resources Group Inc.

In 1994, Prime sold five million common shares at approximately $6.70 per shareto the public. Net proceeds of approximately $31.9 million from this issue wereused to fund a portion of the construction and development costs of the EskayCreek mine. This transaction resulted in a reduction of the Company's interestin Prime from 54.2% to 50.6%. It is the Company's policy to recognize in theincome statement any gains or losses on the issuances of stock of the Company'ssubsidiaries. The Company recorded a gain of $11.2 million on the transaction inrecognition of the net increase in the book value of the Company's investment inPrime. Deferred income taxes were not provided on this gain since the Company'stax basis in Prime substantially exceeds its carrying value.

34

Note 5: Sales of Mining Operations



Torres mining complex: In February 1995, the Company sold its 28% equityinterest in the Torres silver mining complex in Mexico for $6.0 million. Thissale resulted in a pretax gain of $2.7 million, which is included in otherincome.

Dee mine: In 1994, the Company sold its 44% interest in the Dee gold mine inNevada to Rayrock Mines, Inc. ("Rayrock") for $16.5 million. Rayrock assumedresponsibility for and indemnified Homestake against all related environmentaland reclamation matters. This sale resulted in a pretax gain of $15.7 million,which was included in other income.

NAM: In 1993, the Company sold its 83% interest in North American Metals Corp.("NAM"), the owner and operator of the Golden Bear mine in Canada, forapproximately $1.0 million plus a retained royalty interest. The Companyrecorded a $0.5 million pretax gain and a $12.9 million tax benefit on thistransaction.

Mineral Hill mine: In 1993, the Company sold its 50% interest in the MineralHill gold mine in Montana for $4.0 million in cash and 140,000 common shares ofTVX Gold Inc. ("TVX"). The Company retained a royalty interest on certainexploration lands and received an indemnification from TVX for all past, presentand future reclamation requirements. This sale resulted in a pretax gain of $3.6million, which was included in other income.

Note 6: Write-downs of Mining Properties and Restructuring and BusinessCombination Expenses

As discussed in note 2, the Company performs periodic property evaluations toassess the recoverability of its mining properties and investments. In 1993, theCompany determined that, based upon a decline in oil prices, it would not fullyrecover its investment in the oil assets at the Main Pass 299 sulphur mine and,accordingly, recorded a $16.0 million write-down.

In 1993, the Company recorded restructuring expenses of $7.7 millionrelated to an early retirement and work force reduction program at the Homestakemine in South Dakota and the reorganization of HGAL, including the relocation ofHGAL's principal office, and business combination expenses of $0.5 millionrelated to the merger of Prime and Stikine Resources Ltd.

Note 7: Income Taxes

The provision (credit) for income and mining taxes consists of the following:<TABLE><CAPTION>

1995 1994 1993------------------------------------------------------------

<S> <C> <C> <C>Current

Income taxesFederal $ 7,375 $ 7,560 $ (2,465)State (61) 1,258 105Canadian 1,928 2,258 1,177Other foreign 176 206 1,013

-----------------------------------------------------------9,418 11,282 (170)

Canadian mining taxes 10,248 9,741 10,287-----------------------------------------------------------

Total current taxes 19,666 21,023 10,117-----------------------------------------------------------

DeferredIncome taxes

Federal (3,743) 6,867 3,639State 436 (1,086) 95Canadian 25,347 (13,796) 2,203Other foreign (2,041) 4,438

-----------------------------------------------------------19,999 (3,577) 5,937

Canadian mining taxes (524) 1,434 (3,279)-----------------------------------------------------------

Total deferred taxes 19,475 (2,143) 2,658-----------------------------------------------------------

Total income and mining taxes $ 39,141 $ 18,880 $ 12,775===========================================================

</TABLE>

The provision for income taxes is based on pretax income before minorityinterests as follows:<TABLE><CAPTION>

1995 1994 1993-----------------------------------------------------------



<S> <C> <C> <C>United States $ 17,607 $ 28,415 $ 6,222Canada 71,333 49,690 41,434Other foreign (3,474) 27,708 20,740

-----------------------------------------------------------$ 85,466 $ 105,813 $ 68,396

===========================================================</TABLE>

35

Deferred tax liabilities and assets as of December 31, 1995 and 1994 relateto the following:<TABLE><CAPTION>

1995 1994--------------------------------------

<S> <C> <C>Deferred tax liabilities

Depreciation and other resource property differencesUnited States $ 65,763 $ 73,826Canada - Federal 52,068 46,671Canada - Provincial 76,792 74,653Australia 29,921 5,214

--------------------------------------224,544 200,364

Other 12,597 14,800--------------------------------------

Gross deferred tax liabilities 237,141 215,164--------------------------------------

Deferred tax assetsTax loss carry-forwards

United States 2,533 3,958Canada - Federal 8,073 17,793Canada - Provincial 4,836Australia 7,681 2,972Chile 18,344 16,363

--------------------------------------36,631 45,922

Reclamation costsUnited States 8,502 9,957Other 5,314 4,071

--------------------------------------13,816 14,028

Employee benefit costs 28,573 28,120Alternative minimum tax credit carry-forwards 13,922 16,476Land and other resource property 12,759 4,193Deductible mining taxes 3,257 3,080Foreign tax credit carry-forwards 4,600 2,831Other 13,790 14,079

--------------------------------------Gross deferred tax assets 127,348 128,729Deferred tax asset valuation allowances (59,611) (49,839)

--------------------------------------Net deferred tax assets 67,737 78,890

--------------------------------------Net deferred tax liability $ 169,404 $ 136,274

======================================

Net deferred tax liability consists ofCurrent deferred tax assets (20,521)Long-term deferred tax liability 189,925 136,274

--------------------------------------Net deferred tax liability $ 169,404 $ 136,274

======================================</TABLE>

The classification of deferred tax assets and liabilities is based on therelated asset or liability creating the deferred tax. Deferred taxes not relatedto a specific asset or liability are classified based on the estimated period ofreversal. The change in the valuation allowance did not have a significantimpact on the 1995 provision for income taxes. The $59.6 million deferred taxvaluation allowance at December 31, 1995 represents the portion of the Company'sconsolidated deferred tax assets which, based on projections at December 31,1995, the Company does not believe that realization is "more likely than not."Such $59.6 million of deferred tax valuation allowance consists of UnitedStates, Chile and Australia unrealized deferred tax assets of $37.1 million,$18.3 million and $4.2 million, respectively.

The largest portion of the $59.6 million of unrealized deferred tax assets



is comprised of $34.1 million of future United States ($29.9 million) andAustralia ($4.2 million) tax benefits relating to expenses that the Companyprojects will not be deductible for tax return purposes until after the year2010. In projecting United States source income beyond this period, the Companycurrently does not meet the SFAS 109 "more likely than not" criteria required torecognize the United States tax benefits. In addition, there currently is not atax strategy which would result in the realization of the Australian taxbenefit. The remaining $25.5 million is comprised of future tax benefitsrelating to loss and credit carry-forwards in Chile and the United States thatthe Company projects it will be unable to realize. Net deferred tax assets atDecember 31, 1994 include $9.3 million of Canadian deferred tax assets, therealization of which is based on the Company's judgment regarding future income.

Major items causing the Company's income tax provision to differ from thefederal statutory rate of 35% were as follows:<TABLE><CAPTION>

1995 1994 1993---------------------------------------------------------

<S> <C> <C> <C>Income tax based on statutory rate $ 29,913 $ 37,035 $ 23,938Percentage depletion (9,879) (11,106) (14,401)Earnings in foreign jurisdictions

taxed at different rates (1,019) (6,175) (1,440)State income taxes,

net of federal benefit 340 1,614 130Australian investment allowances (2,097)Tax relating to reorganizations 7,682 4,387Unrealized minimum tax credits 4,790 1,753 23,844Nontaxable income (777) (4,784)Nondeductible losses 6,231 9,401 3,757Deferred tax assets not recognized in

prior years (1) (1,262) (27,697) (36,706)Foreign taxes withheld 1,965 2,089 2,669Other - net 1,212 (2,107) (411)

---------------------------------------------------------Total income taxes 29,417 7,705 5,767Canadian mining taxes 9,724 11,175 7,008

---------------------------------------------------------Total income and mining taxes $ 39,141 $ 18,880 $ 12,775

=========================================================

<FN>(1) Amounts include (i) reversals of prior year valuation allowances of

$1.3 million in 1995 and $12.4 million in 1994, and (ii) realization ofadditional deferred tax assets that could not be recognized in prioryears of $15.3 million in 1994 and $36.7 million in 1993.

</TABLE>

36

The Company's 1994 income tax expense includes a $3.6 million tax benefitrelating to tax law changes enacted in 1994 and a $9.6 million tax benefitrelating to a change in the Company's judgment concerning the realizability ofdeferred tax assets in future years.

For income tax purposes, the Company has foreign tax losses and UnitedStates foreign tax credit carry-forwards of approximately $29.5 million and $4.6million, respectively, which are due to expire at various times through the year2000.

Note 8: Receivables<TABLE><CAPTION>

December 31, 1995 1994------------ -------------------------------------<S> <C> <C>Trade accounts $ 37,907 $ 23,318Deferred uranium sale 10,320U.S. Government receivable (see note 20) 5,500 7,271Income taxes 3,049Interest and other 14,639 15,036

-------------------------------------$ 58,046 $ 58,994

=====================================</TABLE>

Note 9: Inventories<TABLE>



<CAPTION>

December 31, 1995 1994------------ --------------------------------------<S> <C> <C>Finished products $ 13,498 $ 15,004Ore and in-process 26,027 26,889Supplies 30,454 29,822

-------------------------------------$ 69,979 $ 71,715

=====================================</TABLE>

At December 31, 1995 and 1994, the cost of certain finished goldinventories in the United States stated on the LIFO cost basis totaled $2.0million and $2.5 million, respectively. Such inventories would have approximated$3.6 million and $4.0 million, respectively, if stated at the lower of market orcurrent year average production costs. In 1993, 44,750 ounces of gold at anaverage cost of $175 per ounce were sold from the LIFO inventory, the effect ofwhich increased pretax income by $5.2 million compared to the cost of suchinventories based on 1993 average production cost.

At December 31, 1995 and 1994, ore stockpiles in the amounts of $11.1million and $10.7 million, respectively, not expected to be processed within the12 months following the end of each year are included in other assets (see note12).

Note 10: Property, Plant and Equipment<TABLE><CAPTION>December 31, 1995 1994------------ ----------------------------------------<S> <C> <C>Mining properties and development costs $ 790,335 $ 714,479Plant and equipment 891,277 846,547Land and royalty interests 3,843 3,843Construction and mine development in progress 12,282 14,633

----------------------------------------1,697,737 1,579,502

Accumulated depreciation, depletion and amortization (850,961) (771,281)----------------------------------------

$ 846,776 $ 808,221========================================

</TABLE>

Note 11: Noncurrent Investments

<TABLE><CAPTION>December 31, 1995 1994------------ -------------------------------------<S> <C> <C>Equity Investments

Pinson (26%) and Marigold (33%) mines $ 4,121 $ 6,298Other equity investments 1,963 5,041

Navan Resources plc 24,000Other investments 16,104 4,435

-------------------------------------$ 46,188 $ 15,774

=====================================</TABLE>

In July 1995, the Company acquired for $24 million a 10% interest(fully-diluted) in Navan Resources plc ("Navan"), an Irish public company, andan option to acquire 50% of Navan's interest in Bimak AD ("Bimak"), the owner ofthe Chelopech gold/copper processing operations located 45 miles east of Sofia,Bulgaria. Bimak has an exclusive contract to purchase all of the ore mined fromthe Chelopech mine. The Company can acquire 50% of Navan's 68% interest in Bimakby investing an additional $48 million, which would be used to fund a portion ofthe cost of a proposed expansion.

Other investments at December 31, 1995 includes $10 million related to a1995 investment in Orion Resources NL ("Orion"). In January 1996, after furtherevaluation of the investment opportunity, the Company sold its investment inOrion and recorded a gain of $0.2 million.

Note 12: Other Assets

<TABLE><CAPTION>December 31, 1995 1994------------ --------------------------------------<S> <C> <C>Assets held in trust (see note 16) $ 23,741



Ore stockpiles 11,118 $ 10,684U.S. Government receivable (see note 20) 13,166 2,520Other 11,927 21,970

-------------------------------------$ 59,952 $ 35,174

=====================================</TABLE>

37

Note 13: Accrued Liabilities<TABLE><CAPTION>

December 31, 1995 1994------------ --------------------------------------<S> <C> <C>Accrued payroll and other compensation $ 26,925 $22,178Accrued reclamation costs 12,383 15,266Other 14,629 16,694

-------------------------------------$ 53,937 $54,138

=====================================</TABLE>

Note 14: Long-term Debt<TABLE><CAPTION>

December 31, 1995 1994------------ -------------------------------------<S> <C> <C>Convertible subordinated notes (due 2000) $ 150,000 $ 150,000Pollution control bonds

Lawrence County, South Dakota (due 2003) 18,000 18,000State of California (due 2004) 17,000 17,000

-------------------------------------$ 185,000 $ 185,000

=====================================</TABLE>

Convertible subordinated notes: The Company's 5.5% convertible subordinatednotes, which mature on June 23, 2000, are convertible into common shares at aprice of $23.06 per common share and are redeemable by the Company in whole atany time on or after June 23, 1996. Interest on the notes is payablesemi-annually in June and December. Proceeds from the notes were used to retireexisting gold loans and other long-term debt. Issuance costs of $3.9 millionwere capitalized and are being amortized over the life of the notes.

Pollution control bonds: The Company pays interest monthly on the pollutioncontrol bonds based on variable short-term, tax-exempt obligation rates.Interest rates at December 31, 1995 and 1994 were 5.0% and 5.7%, respectively.No principal payments are required until cancellation, redemption or maturity.Bondholders have the right to tender the bonds for payment at any time onseven-days notice. The Company has arrangements with underwriters to remarketany tendered bonds and also with a bank to provide liquidity and credit supportto the Company and to purchase and hold for up to 15 months any tendered bondsthat the underwriters are unable to remarket.

Lines of credit: The Company has a United States/Canadian cross-border creditfacility providing a total availability of $150 million. The Company pays acommitment fee of 0.25% per annum on the unused portion of this facility. Thecredit facility is available through September 30, 2000 and provides forborrowings in United States dollars, Canadian dollars, gold loans or anycombination of these. The credit agreement requires a minimum consolidated networth of $500 million. In addition, Prime has a $11.0 million credit facility.At December 31, 1995 and 1994 no amounts had been borrowed under theseagreements.

Note 15: Other Long-term Obligations<TABLE><CAPTION>

December 31, 1995 1994------------ -------------------------------------<S> <C> <C>Accrued reclamation costs (see notes 2, 13 and 20) $ 44,051 $ 33,892Accrued pension and other postretirement

benefit obligations (see note 16) 63,092 64,066Other 13,275 12,761

-------------------------------------$ 120,418 $ 110,719

=====================================



</TABLE>

Note 16: Employee Benefit Plans

Pension plans: The Company has pension plans covering substantially all UnitedStates employees. Plans covering salaried and other nonunion employees providepension benefits based on years of service and the employee's highestcompensation during any 60 consecutive months prior to retirement. Planscovering union employees provide defined benefits for each year of service.

Pension costs for 1995, 1994 and 1993 for Company-sponsored United Statesemployee plans included the following components:<TABLE><CAPTION>

1995 1994 1993------------------------------------------------------------

<S> <C> <C> <C>Service cost - benefits earned

during the year $ 3,573 $ 3,928 $ 3,513Interest costs on projected benefit

obligations 14,476 13,497 12,957Actual net return on assets (44,788) (1,828) (17,198)Net amortization (deferral) 32,405 (11,202) 4,821

------------------------------------------------------------Net periodic pension cost 5,666 4,395 4,093Early retirement program cost 4,062

------------------------------------------------------------$ 5,666 $ 4,395 $ 8,155

============================================================</TABLE>

38

Assumptions used in determining net periodic pension cost for 1995, 1994and 1993 include discount rates of 8%, 7%, and 8%, respectively, and assumedrates of increase in compensation of 5%, 5%, and 6%, respectively. The assumedlong-term rate of return on assets was 8.5% for each year. Assumptions used indetermining the projected benefit obligations at December 31, 1995 and 1994include discount rates of 7% and 8%, respectively, and an assumed rate ofincrease in compensation of 5%.

The funded status and amounts recognized for pension plans in theconsolidated balance sheets are as follows:<TABLE><CAPTION>

December 31, 1995 December 31, 1994Plans Where Plans Where

-------------------------------------------------------------------------------Accumulated Accumulated

Assets Exceed Benefits Assets Exceed BenefitsAccumulated Exceed Accumulated ExceedBenefits Assets Benefits Assets

-------------------------------------------------------------------------------<S> <C> <C> <C> <C>Actuarial present value

of benefit obligationsVested benefits $(159,400) $ (16,300) $ (99,615) $ (51,749)

===============================================================================Accumulated benefits $(175,400) $ (17,500) $ (108,838) $ (57,761)

===============================================================================Projected benefits $(195,300) $ (19,800) $ (127,006) $ (61,261)

Plan assets at fair value (1) 192,565 117,966 37,687-------------------------------------------------------------------------------

Projected benefit obligationin excess of plan assets (2,735) (19,800) (9,040) (23,574)

Unrecognized net loss (gain) (7,285) 114 1,318 5,353Unrecognized net transition

obligation (asset) amortizedover 15 years (3,916) 792 77 (3,635)

Unrecognized prior servicecost (benefit) 680 3,081 (608) 2,322

Additional minimum liability (1,687) (612)-------------------------------------------------------------------------------

Pension liability recognizedin the consolidated balancesheets $ (13,256) $ (17,500) $ (8,253) $ (20,146)

===============================================================================

<FN>(1) Approximately 7% and 15% of the plan assets were invested in fixed-rate

insurance contracts and the balance was invested in listed stocks and bondsin 1995 and 1994, respectively.



</TABLE>

Amounts shown under "plans where accumulated benefits exceed assets" atDecember 31, 1995 consist of liabilities for a nonqualified supplemental pensionplan covering certain employees and a nonqualified pension plan coveringdirectors of the Company. These plans are unfunded. In 1995, the Companyestablished a grantor trust, consisting of a money market fund andcorporate-owned life insurance policies, to provide funding for the benefitspayable under these nonqualified plans and certain other deferred compensationplans. The grantor trust, which is included in other assets, amounted to $23.7million at December 31, 1995.

Certain of the Company's foreign operations participate in pension plans.The Company's share of contributions to these plans was $1.1 million in 1995 and$0.8 million in 1994 and 1993.

Postretirement benefits other than pensions: The Company provides medical andlife insurance benefits for certain retired employees, primarily retirees of theHomestake mine. Retirees are generally eligible for benefits upon retirement ifthey are at least age 55 and have completed five years of service. Net periodicpostretirement benefit costs were $3.5 million in 1995 and 1994 and $5.5 millionin 1993.

The actuarial assumptions used in determining net periodic postretirementbenefit costs include discount rates of 8% for 1995, 7% for 1994 and 8% for1993, an initial health care cost trend rate of 11.5% grading down to anultimate health care cost trend rate of 6% for 1995, an initial health care costtrend rate of 12% grading down to an ultimate health care cost trend rate of 5%for 1994, and an initial health care cost trend rate of 12.5% grading down to anultimate health care cost trend rate of 6% for 1993. The actuarial assumptionsused in determining the Company's accumulated postretirement benefit obligationat December 31, 1995 and 1994 include discount rates of 7% and 8%, respectively.A one percentage-point increase in the assumed health care cost trend rate wouldresult in an increase of approximately $4.7 million in the accumulatedpostretirement benefit obligation at December 31, 1995 and an increase ofapproximately $0.5 million in net periodic postretirement benefit costs.

39

The following table sets forth amounts recorded in the Company'sconsolidated balance sheets at December 31, 1995 and 1994. The Company has notfunded any of its estimated future obligation.<TABLE><CAPTION>

1995 1994--------------------------------------

<S> <C> <C>Accumulated postretirement benefit obligation

Retirees $(27,000) $(30,000)Fully-eligible active plan participants (1,000) (1,000)Other active plan participants (7,000) (9,000)

--------------------------------------(35,000) (40,000)

Unrecognized net loss (gain) (5,412) 996Unrecognized prior service cost 677 737

--------------------------------------Accumulated postretirement benefit obligation

liability recognized in the consolidatedbalance sheets $(39,735) $(38,267)

======================================</TABLE>

Other plans: Substantially all full-time United States employees of the Companyare eligible to participate in the Company's defined contribution savings plans.The Company's matching contribution was approximately $1.6 million in 1995 and$1.1 million in 1994 and 1993.

Under the Company's stock option plans, options to buy 2.3 million commonshares at an average price of $18.82 per share were outstanding at December 31,1995, of which 1.5 million shares were exercisable. An additional 0.6 millionand 0.8 million shares were available for future grants at December 31, 1995 and1994, respectively.

Stock option activity was as follows:<TABLE><CAPTION>

1995 1994 1993----------------------- ------------------------- -----------------------

Average Average AveragePrice Per Price Per Price Per

Number Share Number Share Number Share----------------------- ------------------------- ----------------------



<S> <C> <C> <C> <C> <C> <C>Balance at January 1 2,301 2,600 2,193

HCI converted 787 $29.04Granted 361 $15.58 268 $20.50 516 12.18Exercised (206) 13.90 (293) 15.98 (695) 15.88Expired (147) 16.92 (274) 15.86 (201) 29.20

---------- ---------- ----------Balance at December 31 2,309 2,301 2,600

========== ========== ==========</TABLE>

In October 1995, the FASB issued SFAS 123, "Accounting for Stock-BasedCompensation." SFAS 123 is effective for periods beginning after December 15,1995. SFAS 123 requires that companies either recognize compensation expense forgrants of stock, stock options, and other equity instruments based on fairvalue, or provide pro forma disclosure of net income and earnings per share inthe notes to the financial statements. The Company will adopt the disclosureprovisions of SFAS 123 in 1996.

Note 17: Fair Value of Financial Instruments

The carrying values of the Company's cash and equivalents and short-terminvestments, noncurrent investments, long-term debt and foreign currency optionsapproximate their estimated fair values.

Note 18: Shareholders' Equity

Other equity includes deductions of $3.7 million at December 31, 1995 and 1994for loans made to certain former HCI employees and directors for the purchase ofcommon shares. The loans, which were used for the purchase of shares of HCI, arenon-interest bearing, are secured by a pledge of the shares, and are notrequired to be paid until the pledged securities are equal to or greater thanthe value of the respective loans.

Each share of common stock includes and trades with a right. Rights are notexercisable currently but become exercisable on the 10th business day after anyperson, entity or group ("the Acquiring Person") acquires 20% or more of theCompany's common stock or announces a tender or exchange offer which wouldresult in such entity acquiring 20% or more of the Company's common stock. Whenexercisable, each right entitles its holder to purchase from the Company oneone-hundredth of a share of Series A Participating Cumulative Preferred Stock,par value $1 per share, at a share price of $75. If the Company is subsequentlyinvolved in a merger or other business combination involving the AcquiringPerson, each right will entitle its holder to purchase certain securities of thesurviving company. Rights also provide for protection against self-dealingtransactions by the Acquiring Person. The rights expire on November 2, 1997.

40

Note 19: Additional Cash Flow Information

Cash paid for interest and for income and mining taxes is as follows:<TABLE><CAPTION>

1995 1994 1993---------------------------------------------------------

<S> <C> <C> <C>Interest, net of amounts capitalized $ 11,292 $ 10,110 $ 8,600Income and mining taxes 22,650 10,670 18,170</TABLE>

Certain investing and financing activities of the Company affected itsfinancial position but did not affect its cash flows. See note 3 for adiscussion of the noncash acquisitions of the additional interests in HGAL.

Note 20: Contingencies

Environmental Contingencies

The Comprehensive Environmental Response, Compensation and Liability Act("CERCLA") imposes heavy liabilities on persons who discharge hazardoussubstances. The Environmental Protection Agency ("EPA") publishes a NationalPriorities List ("NPL") of known or threatened releases of such substances.

Whitewood Creek: An 18-mile stretch of Whitewood Creek in the Black Hills ofSouth Dakota is a site on the NPL. The EPA asserted that discharges of tailingsby mining companies, including the Company, contaminated soil and water for morethan 100 years. In 1990, the Company signed a consent decree with the EPArequiring that the Company perform remedial work on the site and continuelong-term monitoring. The on-site remedial work has been completed and theconsent decree was terminated on January 10, 1996. The EPA published a notice onNovember 30, 1995 of their intent to delete the site from the NPL. The Company



estimates that the remaining cost of monitoring, including EPA oversight costs,will be approximately $1 million.

Grants: The Company's former uranium millsite near Grants, New Mexico is listedon the NPL. The EPA asserted that leachate from the tailings contaminated ashallow aquifer used by adjacent residential subdivisions. The Company paid thecosts of extending the municipal water supply to the affected homes andcontinues to operate a water injection and collection system that hassignificantly improved the quality of the aquifer. The Company hasdecommissioned and disposed of the mills and has covered the tailingsimpoundments at the site. The total future cost for reclamation, remediation,monitoring and maintaining compliance at the Grants site is estimated to be $24million.

Title X of the Energy Policy Act of 1992 (the "Act") authorizedappropriations of $270.0 million to cover the Federal Government's share ofcertain costs of reclamation, decommissioning and remedial action for by-productmaterial (primarily tailings) generated by certain licensees as an incident ofuranium sales to the Federal Government. Reimbursement is subject to compliancewith regulations of the Department of Energy ("DOE"), which were issued in 1994.Pursuant to the Act, the DOE is responsible for 51.2% of the past and futurecosts of reclaiming the Grants site in accordance with Nuclear RegulatoryCommission license requirements. The accompanying balance sheet at December 31,1995 includes a receivable of $18.7 million (see notes 8 and 12) for the DOE'sshare of reclamation expenditures made by the Company through 1995. The Companybelieves that its share of the estimated remaining cost of reclaiming the Grantsfacility, net of estimated proceeds from the ultimate disposals of relatedassets, is fully provided in the financial statements at December 31, 1995.

In 1983, the state of New Mexico made a claim against the Company forunspecified natural resource damages resulting from the Grants tailings. Thestate of South Dakota made a similar claim in 1983 as to the Whitewood Creektailings. The Company denies all liability for damages at the two CERCLA sites.The two states have taken no action to enforce the 1983 claims. Finalregulations for performing natural resource damage assessments were issued bythe United States Department of Interior on March 25, 1994. CERCLA provides fora three-year statute of limitations for natural resource damage assessmentsafter the issuance of final regulations.

41

The Company believes that the ultimate resolution of the above matters willnot have a material adverse impact on its financial condition or results ofoperations.

While the ultimate amount of reclamation and site restoration costs to beincurred in the future is uncertain, the Company has estimated that theaggregate amount of these costs for operating properties, plus previouslyaccrued remediation liabilities for non-operating properties, will be $99million. This figure does not include approximately $12.2 million of reclamationcosts at the Grants uranium facility, which will be funded by the United StatesFederal Government. At December 31, 1995 the Company had accrued $56.4 millionfor estimated ultimate reclamation and site restoration costs and remediationliabilities.

Other Contingencies

In addition to the above, the Company is party to legal actions andadministrative proceedings and is subject to claims arising in the ordinarycourse of business. The Company believes the disposition of these matters willnot have a material adverse effect on its financial position or results ofoperations.

Note 21: Foreign Currency and Other Commitments

Under the Company's foreign currency protection program, the Company has enteredinto a series of foreign currency option contracts which established tradingranges within which the United States dollar may be exchanged for foreigncurrencies by setting minimum and maximum exchange rates. The Company does notrequire or place collateral for these contracts. However, the Company minimizesits credit risk by dealing with only major international banks and financialinstitutions. The contracts are marked to market at each balance sheet date. Netunrealized gains on contracts outstanding at December 31, 1995 and 1994 totaled$0.3 million and $0.7 million, respectively. Other income for the years endedDecember 31, 1995, 1994 and 1993 included income (loss) of $(0.2) million, $4.6million and $(1.4) million, respectively, related to the foreign currencyprotection program.

At December 31, 1995 the Company had outstanding forward currencycontracts as follows:<TABLE><CAPTION>



Amount Covered Exchange Rates to U.S. Dollars ExpirationCurrency (U.S. Dollars) Minimum Maximum Dates--------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>Canadian $111,400 0.67 0.77 1996 - 1997Australian 33,300 0.68 0.76 1996

--------------$144,700

==============</TABLE>

In addition to amounts related to the foreign currency option contracts,the Company realized foreign currency transaction losses of $0.6 million in1995, $6.6 million in 1994, and $1.5 million in 1993, which were included inother income.

During 1994, the Company entered into forward sales for 183,200 ounces ofgold it expected to produce at the Nickel Plate mine during 1995 and 1996. Thepurpose of the forward sales program was to allow for recovery of the Company'sremaining investment in the mine and provide for estimated reclamation costs.Gold sales for the year ended December 31, 1995 included 88,800 ounces soldunder this program at an average price of $398 per ounce. In October 1995, theCompany closed out forward sales covering 24,400 ounces at an average price of$435 per ounce for delivery in 1996, realizing a gain of $0.8 million. AtDecember 31, 1995 forward sales for 70,000 ounces at an average price of $421per ounce remain outstanding.

The Company has entered into various commitments during the ordinary courseof its business, which include commitments to perform assessment work and otherobligations necessary to maintain or protect its interests in mining properties,financing and other obligations to joint ventures and partners under venture andpartnership agreements, and commitments under federal and state environmentalhealth and safety permits.

Note 22: Geographic and Segment Information

The Company primarily is engaged in gold mining and related activities.Interests in joint ventures are included in segment operations and identifiableassets. In determining operating earnings, which are defined as operatingrevenues less operating costs and expenses, the following items have beenexcluded: mineral exploration costs, corporate income and

42

expenses, and income and mining taxes. Identifiable assets represent thoseassets used in a segment's operations. Corporate assets are principally cash andequivalents, short-term investments and assets related to operations notsignificant enough to require classification as a business segment.

Sales to individual customers exceeding 10% of the Company's consolidatedrevenues were as follows: in 1995, gold sales of $102 million, $101 million, $92million and $91 million to four customers; in 1994, gold sales of $129 million,$118 million and $100 million to three customers; and in 1993, gold sales of$175 million, $145 million and $105 million to three customers. Because of theactive worldwide market for gold, Homestake believes that the loss of any ofthese customers would not have a material adverse impact on the Company.

GEOGRAPHIC INFORMATION<TABLE><CAPTION>

1995 1994 1993-------------------------------------------------------

<S> <C> <C> <C>Revenues

United States (1) $ 349,461 $ 346,629 $ 380,458Canada(2) 264,548 192,363 194,755Australia 120,898 143,944 121,025Latin America (3) 11,458 22,551 25,990

-------------------------------------------------------$ 746,365 $ 705,487 $ 722,228

=======================================================

Operating EarningsUnited States (1,4) $ 45,373 $ 72,379 $ 33,295Canada 89,459 55,804 70,788Australia 9,261 29,026 29,660Latin America (3) 705 (1,359) 2,272

-------------------------------------------------------$ 144,798 $ 155,850 $ 136,015

=======================================================



Exploration ExpenseUnited States $ 12,750 $ 11,841 $ 11,128Canada 2,797 2,445 1,907Australia 4,745 4,008 2,888Latin America and other 7,249 3,053 1,534

-------------------------------------------------------$ 27,541 $ 21,347 $ 17,457

=======================================================

Identifiable Assets as of December 31United States $ 618,267 $ 598,059 $ 550,645Canada 432,087 382,575 385,324Australia 264,238 207,837 165,683Latin America and other 7,041 13,497 19,598

-------------------------------------------------------$1,321,633 $1,201,968 $1,121,250

=======================================================<FN>

(1) Includes a gain of $15.7 million in 1994 on the sale of the Company'sinterest in the Dee mine.

(2) Includes a gain of $11.2 million in 1994 on the dilution of theCompany's interest in Prime.

(3) Includes a gain of $2.7 million in 1995 on the sale of the Company'sinterest in the Torres mining complex.

(4) Includes a write-down of $16.0 million in 1993 of oil assets at MainPass 299.

</TABLE>

SEGMENT INFORMATION<TABLE><CAPTION>

1995 1994 1993-------------------------------------------------------

<S> <C> <C> <C>Revenues

Gold $ 677,377 $ 632,031 $ 688,080Sulphur and oil 40,620 26,882 16,220Interest and other (1,2) 28,368 46,574 17,928

-------------------------------------------------------$ 746,365 $ 705,487 $ 722,228

=======================================================

Operating EarningsGold (1) $ 139,105 $ 156,013 $ 161,947Sulphur and oil (3) 5,693 (163) (25,932)

-------------------------------------------------------Operating earnings 144,798 155,850 136,015Exploration expense (27,541) (21,347) (17,457)Net corporate expense (2,4) (31,791) (28,690) (50,162)

-------------------------------------------------------Income Before Taxes and Minority Interest $ 85,466 $ 105,813 $ 68,396

=======================================================

Depreciation, Depletion and AmortizationGold $ 90,237 $ 66,857 $ 90,842Sulphur and oil 8,055 7,861 10,629Corporate 1,310 1,453 1,906

-------------------------------------------------------$ 99,602 $ 76,171 $ 103,377

=======================================================

Exploration ExpenseGold $ 27,541 $ 21,318 $ 17,017Sulphur and oil - 29 440

-------------------------------------------------------$ 27,541 $ 21,347 $ 17,457

=======================================================

Additions to Property, Plant and EquipmentGold $ 78,892 $ 83,597 $ 54,219Sulphur and oil 1,604 3,039 1,828Corporate 483 2,018 1,778

-------------------------------------------------------$ 80,979 $ 88,654 $ 57,825

=======================================================

Identifiable Assets as of December 31Gold $ 870,512 $ 796,016 $ 788,122Sulphur and oil 134,990 143,742 142,220Corporate:



Cash and equivalents and short-terminvestments 212,373 205,180 134,719

Other 103,758 57,030 56,189-------------------------------------------------------

$1,321,633 $1,201,968 $1,121,250=======================================================

<FN>(1) Includes a gain of $2.7 million in 1995 on the sale of the

Company's interest in the Torres mining complex and a gain of$15.7 million in 1994 on the sale of the Company's interest inthe Dee mine.

(2) Includes a gain of $11.2 million in 1994 on the dilution ofthe Company's interest in Prime.

(3) Includes a write-down of $16.0 million of oil assets at MainPass 299 in 1993.

(4) Includes restructuring and business combination expenses of$8.2 million in 1993.

</TABLE>

43

REPORT OF INDEPENDENT AUDITORS

The Shareholders and Board of Directors of Homestake Mining Company:

We have audited the consolidated balance sheets of Homestake Mining Company andSubsidiaries as of December 31, 1995 and 1994, and the related statements ofconsolidated income, shareholders' equity and cash flows for each of the threeyears in the period ended December 31, 1995. These financial statements are theresponsibility of the Company's management. Our responsibility is to express anopinion on the financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditingstandards. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 consolidated financial statements referred to above presentfairly, in all material respects, the financial position of Homestake MiningCompany and Subsidiaries at December 31, 1995 and 1994, and the results of theiroperations and their cash flows for each of the three years in the period endedDecember 31, 1995 in conformity with generally accepted accounting principles.

/s/ Coopers & Lybrand L.L.P.----------------------------San Francisco, CaliforniaFebruary 9, 1996

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

Homestake Mining Company and Subsidiaries

The accompanying consolidated financial statements of Homestake Mining Companyand Subsidiaries are prepared by the Company's management in conformity withgenerally accepted accounting principles. Management is responsible for thefairness of the financial statements, which include estimates based onjudgments.

The Company maintains accounting and other control systems which managementbelieves provide reasonable assurance that financial records are reliable forthe purposes of preparing financial statements and that assets are properlysafeguarded and accounted for. Underlying the concept of reasonable assurance isthe premise that the cost of controls should not be disproportionate to thebenefits expected to be derived from such controls. The Company's internalcontrol structure is reviewed by its internal auditors and by the independentauditors in connection with their audit of the Company's consolidated financialstatements.

The external auditors conduct an independent audit of the consolidatedfinancial statements in accordance with generally accepted auditing standards inorder to express their opinion on these financial statements. These standardsrequire that the external auditors plan and perform the audit to obtain



reasonable assurance that the financial statements are free of materialmisstatement.

The Audit Committee of the Board of Directors, composed entirely of outsidedirectors, meets periodically with management, internal auditors and theexternal auditors to discuss the annual audit, internal control, internalauditing and financial reporting matters. The external auditors and the internalauditors have direct access to the Audit Committee.

/s/ Harry M. Conger-------------------Harry M. CongerChairman of the Board and Chief Executive Officer

/s/ Gene G. Elam-----------------Gene G. ElamVice President, Finance and Chief Financial OfficerFebruary 9, 1996

44

QUARTERLY SELECTED DATA(In thousands, except per share amounts)<TABLE><CAPTION>

First Second Third FourthQuarter Quarter Quarter Quarter Year

------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C> <C>1995:Revenues $ 179,932 $ 195,590 $ 181,428 $ 189,415 $ 746,365Net income 6,560 (1) 11,179 4,945 7,643 30,327 (1)

Per common share:Net income 0.05 (1) 0.08 0.04 0.05 0.22 (1)Dividends paid 0.05 0.05 0.05 0.05 0.20

1994:Revenues $ 172,402 $ 202,079 $ 166,991 $ 164,015 $ 705,487Net income 24,214 32,955 (2) 10,849 9,998 78,016 (2)

Per common share:Net income 0.18 0.24 (2) 0.08 0.07 0.57 (2)Dividends paid 0.025 0.05 0.05 0.05 0.18

<FN>(1) Includes a gain of $1.4 million ($2.7 million pretax) or $0.01

per share on the sale of the Company's interest in the Torresmining complex.

(2) Includes a gain of $12.6 million ($15.7 million pretax) or$0.09 per share on the sale of the Company's interest in theDee mine and a gain of $11.2 million (no tax expense) or $0.08per share on the dilution of the Company's interest in Prime.

</TABLE>

COMMON STOCK PRICE RANGE

(Prices as quoted on the New York Stock Exchange)<TABLE><CAPTION>

First Second Third FourthQuarter Quarter Quarter Quarter Year

---------------------------------------------------------------------------------------------<C> <S> <C> <C> <C> <C> <C>1995: High $19.13 $19.13 $18.13 $17.38 $19.13

Low 14.75 15.63 16.13 15.13 14.75

1994: High $24.88 $22.63 $22.00 $20.75 $24.88Low 18.88 17.38 17.50 16.13 16.13

</TABLE>



45

EIGHT-YEAR SELECTED DATA (1)

(Dollar amounts in thousands, except per share and per ounce amounts)<TABLE><CAPTION>

1995 1994 1993 1992--------------- --------------- -------------- ---------------

<S> <C> <C> <C> <C>OPERATIONSRevenues $746,365 $705,487 $722,228 $683,520

-------------- --------------- -------------- ---------------Production costs 481,886 447,129 454,623 470,374Depreciation, depletion

and amortization 99,602 76,171 103,377 117,483Administrative and general expense 37,283 38,159 40,553 48,514Exploration expense 27,541 21,347 17,457 27,798Interest and other expense 14,587 16,868 13,639 19,114Write-downs and restructuring costs 24,183 178,732Income and mining tax expense (credit) 39,141 18,880 12,775 (2,889)Minority interests 15,998 8,917 3,127 230

-------------- --------------- -------------- ---------------716,038 627,471 669,734 859,356

-------------- --------------- -------------- ---------------

Income (loss) from continuingoperations 30,327 (2) 78,016 (3) 52,494 (4) (175,836)(5)

Income (loss) from discontinuedoperations

Extraordinary gainCumulative effect

-------------- --------------- -------------- ---------------Net income (loss) $ 30,327 (2) $ 78,016 (3) $ 52,494 (4) $(175,836)(5)

============== =============== ============== ===============

PER SHAREIncome (loss) from

continuing operations $ 0.22 (2) $ 0.57 (3) $ 0.38 (4) $ (1.31)(5)Income (loss) from

discontinued operationsExtraordinary gainCumulative effect

-------------- --------------- -------------- ---------------Net income (loss) $ 0.22 (2) $ 0.57 (3) $ 0.38 (4) $ (1.31)(5)

============== =============== ============== ===============Dividends paid (Homestake only) $ 0.20 $ 0.175 $ 0.10 $ 0.20

============== =============== ============== ===============

<CAPTION>

1991 1990 1989 1988-------------- --------------- -------------- ---------------

<S> <C> <C> <C> <C>OPERATIONSRevenues $671,600 $793,660 $771,126 $520,708

-------------- --------------- -------------- ---------------Production costs 468,107 473,688 405,246 276,082Depreciation, depletion and

amortization 116,993 113,443 103,110 59,472Administrative and general expense 47,405 50,631 44,641 38,674Exploration expense 47,440 50,695 49,394 47,952Interest and other expense 12,336 28,475 33,073 26,315Write-downs and restructuring costs 185,987 32,600 44,963 28,163Income and mining tax expense (credit) 5,582 40,267 56,195 25,702Minority interests (4,494) (350) (266) 1,036

-------------- --------------- -------------- ---------------879,356 789,449 736,356 503,396

-------------- --------------- -------------- ---------------

Income (loss) from continuing operations (207,756)(6) 4,211 (8) 34,770 (9) 17,312 (11)Income (loss) from discontinued

operations (25,359) 7,979 31,667 15,558Extraordinary gain 3,678 (10)Cumulative effect (28,800)(7) 3,125 (12)

-------------- --------------- -------------- ---------------Net income (loss) $(261,915)(6,7) $ 12,190 (8) $ 70,115 (9,10) $ 35,995 (11,12)

============== =============== ============== ===============

PER SHARE



Income (loss) from continuing operations $ (1.57)(6) $ 0.02 (8) $ 0.28 (9) $ 0.14 (11)Income (loss) from discontinued

operations (0.19) 0.06 0.25 0.13Extraordinary gain 0.03 (10)Cumulative effect (0.22)(7) 0.02 (12)

-------------- --------------- -------------- ---------------Net income (loss) $ (1.98)(6,7) $ 0.08 (8) $ 0.56 (9,10) $ 0.29 (11,12)

============== =============== ============== ===============Dividends paid (Homestake only) $ 0.20 $ 0.20 $ 0.20 $ 0.20

============== =============== ============== ===============

<FN>(1) Eight-year selected data reflects the 1992 combination of Homestake

and HCI accounted for as a pooling of interests, and accounts forHomestake's former interests in base metals, oil and gas, uranium andHCI's non-gold operations as discontinued operations.

(2) Includes a gain of $1.4 million ($2.7 million pretax) or $0.01 pershare on the sale of the Company's interest in the Torres silvermining complex.

(3) Includes a gain of $12.6 million ($15.7 million pretax) or $0.09 pershare on the sale of the Company's interest in the Dee mine and a gainof $11.2 million (no tax expense) or $0.08 per share on dilution ofthe Company's interest in Prime.

(4) Includes expense of $12.8 million ($16.0 million pretax) or $0.09 pershare for the write-down of oil assets at Main Pass 299 and expense of$6.8 million ($8.2 million pretax) or $0.05 per share forrestructuring and business combination costs.

(5) Includes expense of $117.7 million ($130.3 million pretax) or $0.87per share for write-downs of certain mining properties and investmentsand expense of $32.3 million ($48.4 million pretax) or $0.24 per sharefor restructuring and business combination costs.

(6) Includes expense of $165.5 million ($172.4 million pretax) or $1.25per share for write-downs of certain mining properties and investmentsand expense of $7.8 million ($13.6 million pretax) or $0.06 per sharefor HCI's 1991 restructuring.

</TABLE>

46

EIGHT-YEAR SELECTED DATA (1)

(Dollar amounts in thousands, except per share and per ounce amounts)<TABLE><CAPTION>

1995 1994 1993 1992---------------- ---------------- ----------------- ----------------

<S> <C> <C> <C> <C>FINANCIAL POSITIONCash and short-term investments $ 212,373 $ 205,180 $ 134,719 $ 71,064Other current assets 156,344 137,619 103,491 108,288Property, plant and equipment - net 846,776 808,221 830,228 911,588Other long-term assets 106,140 50,948 52,812 54,229

---------------- ---------------- ---------------- ----------------Total assets $1,321,633 $ 1,201,968 $ 1,121,250 $1,145,169

================ ================ ================ ================

Current liabilities $ 98,421 $ 96,895 $ 104,350 $ 155,894Long-term debt 185,000 185,000 189,191 205,174Other long-term obligations 120,418 110,719 93,674 88,002Deferred income and mining taxes 189,925 136,274 164,030 162,587Minority interests (13) 92,012 84,310 54,761 68,074Shareholders' equity 635,857 588,770 515,244 465,438

---------------- ---------------- ---------------- ----------------Total liabilities and shareholdlers' equity $1,321,633 $ 1,201,968 $ 1,121,250 $1,145,169

================ ================ ================ ================

RATIOSDebt to equity 29% 31% 37% 53%Return on shareholders' equity 5% 14% 11% (31)%

CAPITAL EXPENDITURES $ 80,979 $ 88,654 $ 57,825 $ 63,453

OPERATING STATISTICSGold production (thousands of ounces) 1,877 1,696 1,918 1,912Average gold price realized per ounce $386 $384 $359 $348



Total cash costs per ounce $257 $252 $229 $246

RESERVESGold (millions of ounces) 21.5 17.9 18.4 17.3Eskay Creek silver (millions of ounces) 47.4 51.5 55.1Sulphur (millions of long tons) 11.4 11.7 11.0 11.2

<CAPTION>1991 1990 1989 1988

---------------- ---------------- ---------------- ----------------<S> <C> <C> <C> <C>FINANCIAL POSITIONCash and short-term investments $ 164,353 $ 332,690 $ 323,501 $ 295,538Other current assets 137,217 295,843 209,998 172,936Property, plant and equipment - net 844,909 902,161 947,494 692,020Other long-term assets 206,352 381,121 267,504 213,321

---------------- ---------------- ---------------- ----------------Total assets $ 1,352,831 $ 1,911,815 $ 1,748,497 $ 1,373,815

================ ================ ================ ================

Current liabilities $ 191,145 $ 205,863 $ 145,325 $ 95,926Long-term debt 279,190 408,902 440,888 283,600Other long-term obligations 86,193 51,253 47,000 41,425Deferred income and mining taxes 100,797 108,681 114,828 61,663Minority interests (13) 19,864 78,422 98,972 58,976Shareholders' equity 675,642 1,058,694 901,484 832,225

---------------- ---------------- ---------------- ----------------Total liabilities and shareholders' equity $ 1,352,831 $ 1,911,815 $ 1,748,497 $ 1,373,815

================ ================ ================ ================

RATIOSDebt to equity 52% 48% 51% 37%Return on shareholders' equity (30)% 1% 8% 4%

CAPITAL EXPENDITURES $ 166,458 $ 139,352 $ 266,279 $ 281,040

OPERATING STATISTICSGold production (thousands of ounces) 1,801 1,979 1,738 1,312Average gold price realized per ounce $376 $392 $394 $434Total cash costs per ounce $269 $247 $246 $262

RESERVESGold (millions of ounces) 18.5 19.6 20.6 14.3Eskay Creek silver (millions of ounces)Sulphur (millions of long tons) 11.2 11.2

<FN>(7) Includes expense of $28.8 million (no tax benefit) or $0.22 per share

for the cumulative effect of the change in accounting forpostretirement benefits other than pensions.

(8) Includes expense of $32.6 million (no tax benefit) or $0.25 per sharefor the write-down of the Company's investment in NAM.

(9) Includes expense of $30.7 million ($45 million pretax) or $0.24 pershare for write-downs of certain mining properties of HCI.

(10) Includes an extraordinary gain of $3.7 million or $0.03 per share onthe monetization of gold loans.

(11) Includes expense of $28.2 million (no tax benefit) or $0.23 per sharefor write-downs of certain mining properties of HCI.

(12) Includes income of $3.1 million or $0.02 per share from the cumulativeeffect of the change in accounting for income taxes.

(13) Includes redeemable preference shares of wholly-owned subsidiaries of$15.9 million, $4.9 million, $46.1 million, $50.4 million and $48.9million at December 31, 1992, 1991, 1990, 1989 and 1988, respectively.

</TABLE>

47

APPENDIX 1: Description of Bar Charts in Management's Discussion and Analysis

Bar Chart A:Chart depicting net income (dollars in millions) as follows:

Year: 1995 1994 1993-------------------------------------

Dollars: $30.3 $78.0 $52.5

Bar Chart B:Chart depicting gold and ore sales (dollars in millions) as follows:



Year: 1995 1994 1993-------------------------------------

Dollars: $675.2 $629.2 $687.3

Bar Chart C:Chart depicting gold production (ounces in millions) as follows:

Year: 1995 1994 1993-------------------------------------

Ounces:Homestake's Economic Interest: 1.63 1.59 1.76Minority Interest: 0.25 0.09 0.09Operations Sold: - 0.02 0.07

-------------------------------------Total 1.88 1.70 1.92

Bar Chart D:Chart depicting exploration expense (dollars in millions) as follows:

Year: 1995 1994 1993-------------------------------------

Dollars:United States: $12.8 $11.8 $11.1Canada: 2.8 2.4 1.9Australia: 4.7 4.0 2.9Latin America and Other: 7.2 3.1 1.6

-------------------------------------Total $27.5 $21.3 $17.5

Bar Chart E:Chart depicting cash and equivalents and short-term investments (dollars inmillions) as follows:

Year: 1995 1994 1993-------------------------------------

Dollars: $212.4 $205.2 $134.7

Bar Chart F:Chart depicting cash provided by operations (dollars in millions) as follows:

Year: 1995 1994 1993-------------------------------------

Dollars: $153.5 $133.7 $170.1



EXHIBIT 21

LIST OF SUBSIDIARIES

--------------------------------------------------------------------------------Homestake Mining Company, a Delaware Corporation and its SubsidiariesInterest of Homestake Mining Company is 100% unless otherwise noted( ) Denotes state, province or country of incorporation--------------------------------------------------------------------------------

Homestake Mining Company (Delaware)Homestake Mining Company of California (California)

Denay Creek Gold Mining Company (California)Homestake Canada Inc. (Ontario)

588982 Ontario Inc. (Ontario)Corona Gold Inc. (Nevada)

Santa Fe Gold Inc. (Nevada)E & B Explorations Inc. (Delaware)Galveston Resources (Nevada), Inc. (Nevada)PRG Project Development Corp. (British Columbia)Prime Resources Group Inc. (British Columbia) - 50.6%Teck-Corona Operating Company (Ontario) - 50%Westcan Holdings Inc. (Nevada)Williams Operating Company (Ontario) - 50%

Homestake de Argentina S.A. (Buenos Aires)Homestake Forest Products Company (California)Homestake Gold of Australia Limited (South Australia) - 88.1%

Homestake Australia Limited (South Australia) - 88.1%Homestake Gold (Queensland) Pty. Ltd. (Queensland) - 88.1%

Homestake International Minerals Limited (California)Homestake Lead Company of Missouri (California)Homestake Nevada Corporation (California)Homestake Sulphur Company (Delaware)Homestake Venezuela, S.A. (Venezuela)

Minera Rio Carichapo, S.A. (Venezuela)Minera Rio Marwani, S.A. (Venezuela)La Jara Mesa Mining Company (New Mexico)Minera Homestake Chile S.A. (Chile)Whitewood Development Corporation (California)



EXHIBIT 23

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the following RegistrationStatements of Homestake Mining Company: Post-Effective Amendment No. 5 to No.2-90903 on Form S-8 (originally filed on Form S-3); Post-Effective Amendment No.3 to No. 2-90905 on Form S-8 (originally filed on Form S-3); No. 33-26049 onForm S-8; No. 33-32174 on Form S-8; No. 2-66538 on Form S-8; Post-EffectiveAmendment No. 1 to No. 33-48526 on Form S-8 (originally filed on Form S-4);Post-Effective Amendment No. 1 to No. 33-62667 on Form S-4 of our report datedFebruary 9, 1996, appearing in and incorporated by reference in the AnnualReport on Form 10-K of Homestake Mining Company for the year ended December 31,1995.

/s/ Coopers & Lybrand L.L.P.

San Francisco, CaliforniaMarch 21, 1996



<TABLE> <S> <C>

<ARTICLE> 5<LEGEND>This schedule contains summary financial information extracted from theConsolidated Balance Sheet at December 31, 1995 and the related Statement ofConsolidated Income for the year ended December 31, 1995 and is qualifiedin its entirety by reference to such financial statements.</LEGEND><MULTIPLIER> 1,000

<S> <C><PERIOD-TYPE> 12-MOS<FISCAL-YEAR-END> DEC-31-1995<PERIOD-END> DEC-31-1995<CASH> 145,957<SECURITIES> 66,416<RECEIVABLES> 58,046<ALLOWANCES> 0<INVENTORY> 69,979<CURRENT-ASSETS> 368,717<PP&E> 1,697,737<DEPRECIATION> 850,961<TOTAL-ASSETS> 1,321,633<CURRENT-LIABILITIES> 98,421<BONDS> 185,000<PREFERRED-MANDATORY> 0<PREFERRED> 0<COMMON> 140,541<OTHER-SE> 495,316<TOTAL-LIABILITY-AND-EQUITY> 1,321,633<SALES> 715,842<TOTAL-REVENUES> 746,365<CGS> 581,488<F1><TOTAL-COSTS> 618,771<F2><OTHER-EXPENSES> 30,831<F3><LOSS-PROVISION> 0<INTEREST-EXPENSE> 11,297<INCOME-PRETAX> 85,466<INCOME-TAX> 39,141<INCOME-CONTINUING> 30,327<DISCONTINUED> 0<EXTRAORDINARY> 0<CHANGES> 0<NET-INCOME> 30,327<EPS-PRIMARY> 0.22<EPS-DILUTED> 0.00<FN><F1>Includes Production costs and Depreciation, depletion and amortization from



Condensed Statement of Consolidated Operations.<F2>Includes Production costs and Depreciation, depletion and amortization andAdministrative and general expense from Condensed Statement of ConsolidatedOperations.<F3>Includes Exploration expense and Other expense from Condensed Statement ofConsolidated Operations.</FN>

</TABLE>



HOMESTAKE MINING CO /DE/ (Form: 10-K, Filing Date: 03/28/1996)

Documents

Transcript of HOMESTAKE MINING CO /DE/ (Form: 10-K, Filing Date: 03/28/1996)