EXHIBIT 99.4
Contact:
Stephen A. Orr
Vice President, Investor Relations
415-983-8169
HOMESTAKE MINING COMPANY AND PRIME RESOURCES GROUP INC. AGREE ON PROPOSED
EXCHANGE RATIO FOR HOMESTAKE'S ACQUISITION OF THE MINORITY INTEREST IN PRIME
San Francisco, CA - September 11, 1998 - Homestake Mining Company
(NYSE: HM) and Prime Resources Group Inc. (TSE, VSE, AMEX: PRU) announced today
that the Boards of Directors of both companies have agreed on an exchange ratio
for Homestake's acquisition of the 49.4% of Prime not already owned by
Homestake. Under the terms of the revised offer, for each Prime share owned by
them, Prime shareholders (other than Homestake) will have the choice of
receiving 0.74 of a Homestake common share or 0.74 of a Homestake Canada Inc.
(HCI) exchangeable share. Each HCI exchangeable share will be exchangeable at
any time for one Homestake common share, and will have dividend and voting
rights equivalent to those of one Homestake common share. Based on the relative
closing prices for Homestake and Prime common shares on May 22, 1998 (the last
trading day for both securities prior to announcement of Homestake's original
proposal), the revised offer represents a 23.2% premium to the Prime public
shareholders. This is an increase of 9.6% over Homestake's prior offer of a
0.675 exchange ratio.
Under the terms of the revised offer, Prime shareholders other than
Homestake will be entitled to receive the equivalent of 27.8 million Homestake
common shares. Most Canadian shareholders of Prime who elect to receive HCI
exchangeable shares will be able to defer any capital gains they would otherwise
incur on the exchange. In addition, HCI exchangeable shares are not expected to
be treated as foreign property for Canadian tax and investment purposes.
The Prime Special Committee of Independent Directors has advised
Homestake that the exchange ratio results in an offer that is slightly below the
midpoint of the valuation range determined by RBC Dominion Securities, Inc.,
financial advisors to the Special Committee. However, the offer is well within
the valuation range determined by RBC Dominion Securities. On that basis, and
after taking other relevant factors into consideration, both the Prime Special
Committee and the Board of Directors of Prime have advised Homestake that they
intend to recommend approval of the transaction to the Prime shareholders.
Jack E. Thompson, Chairman, President and Chief Executive Officer of
Homestake commented: "I am pleased that our two companies were able to agree on
a ratio that each could recommend to its shareholders. I believe that this
acquisition is in the best interests of both Prime and Homestake shareholders
and I am confident that they will support the transaction."
The transaction is to be structured as a plan of arrangement under the
British Columbia Companies Act. Completion of the transaction is subject to
final agreement on the definitive terms of the Arrangement Agreement. It is also
subject to shareholder vote by Homestake, approval by the British Columbia
Supreme Court, and approval by the Prime shareholders. A total of 75% of all
Prime common shares represented at its shareholders' meeting, including the
Prime shares owned by Homestake, must approve the transaction. In addition, the
transaction must be approved by two-thirds of the Prime shares present and
voting on the transaction, excluding the shares voted by Homestake and certain
of its affiliates. If all the necessary approvals are obtained, completion of
the transaction is expected in mid-December, 1998.
The transaction is expected to simplify Homestake's corporate
structure, unify the Company's presence in Canada and reduce costs associated
with maintaining a separate public company. In addition, the increase in
Homestake's equity interest in low-cost production and reserves resulting from
this transaction will strengthen the Company's position as one of the world's
leading gold mining companies.
Prime Resources is a precious metals company that owns and operates
mines in Canada. It owns 100% of the Eskay Creek mine, one of the highest-grade
gold and silver mines in the world, and 100% of the Snip mine, a small,
high-grade gold mine that is expected to cease production in the first quarter
of 1999. Both of these underground mines are located in northwestern British
Columbia. During the first six months of 1998, Prime's Eskay Creek mine
processed 80,000 tons of ore containing 143,400 ounces of gold and 6.3 million
ounces of silver, or 271,100 ounces of gold equivalent at a total cash cost of
$127 per equivalent ounce. During the same period, Prime's Snip mine produced
79,000 tons of ore that yielded 50,500 ounces of gold at a total cash cost of
$213 per equivalent ounce.
Homestake Mining Company is an international gold mining company with
operations and exploration activities in the United States, Canada, Australia
and Chile. Homestake currently owns 50.6% of Prime Resources through Homestake's
wholly owned subsidiary, Homestake Canada Inc. Homestake also has active
exploration programs in Latin America, and development and/or evaluation
projects in Chile and Bulgaria. Homestake began gold mining operations over 120
years ago, and is the oldest listed company on the New York Stock exchange still
in its original business. It has received numerous industry environmental and
safety awards for its responsible environmental health and safety stewardships.
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