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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM 10-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 COMMISSION FILE NO. 1-9666
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE TRANSITION PERIOD FROM -------------- TO --------------

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

BATTLE MOUNTAIN GOLD COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

NEVADA 76-0151431
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
333 CLAY STREET, 42ND FLOOR,
HOUSTON, TEXAS 77002
(Address of principal (Zip code)
executive offices)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 650-6400

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

Name of each Exchange
Title of each class on which registered
- ------------------------------------- -------------------------------------

Common Stock New York Stock Exchange
$3.25 Convertible Preferred Stock New York Stock Exchange
Rights to Purchase Preferred Stock New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
------------------------

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES _X_ NO ____

Indicate by check mark if disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /

The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $887 million as of March 23, 1995, based on the
closing sales price of the registrant's common stock as reported on the New York
Stock Exchange Composite Tape on such date. For purposes of the foregoing
sentence only, all directors and officers of the registrant are assumed to be
affiliates.

The number of shares outstanding of the registrant's common stock as of
March 23, 1995 is 80,959,302.

DOCUMENTS INCORPORATED BY REFERENCE:

LIST HEREUNDER THE FOLLOWING DOCUMENTS IF INCORPORATED BY REFERENCE AND THE
PART OF THE FORM 10-K INTO WHICH THE DOCUMENT IS INCORPORATED: PROXY STATEMENT
RELATING TO THE 1995 ANNUAL MEETING OF STOCKHOLDERS OF BATTLE MOUNTAIN GOLD
COMPANY WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO REGULATION 14A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (TO THE
EXTENT SET FORTH IN ITEMS 10, 11 AND 12 OF PART III OF THIS ANNUAL REPORT).

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TABLE OF CONTENTS

PAGE
----

PART I
Items 1. and 2. Business and Properties.............................. 1

Item 3. Legal Proceedings........................................... 39

Item 4. Submission of Matters to a Vote of Security Holders......... 39

Executive Officers of the Registrant........................ 39

PART II
Item 5. Market For Registrant's Common Equity and
Related Stockholder Matters................................. 41

Item 6. Selected Financial Data..................................... 42

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 43

Item 8. Financial Statements and Supplementary Data................. 57

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure......................... 90

PART III
Item 10. Directors and Executive Officers of the Registrant.......... 90

Item 11. Executive Compensation...................................... 90

Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................................. 90

Item 13. Certain Relationships and Related Transactions.............. 90

PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K................................................. 91

PART I

ITEMS 1. AND 2. BUSINESS AND PROPERTIES

BUSINESS AND PROPERTIES OF THE COMPANY

INTRODUCTION

Battle Mountain Gold Company ("BMG") and its subsidiaries
(collectively the "Company") are engaged in the mining and processing of
gold, silver and copper ore in the United States, Bolivia, Chile and
Australia and in the exploration and evaluation of precious metals properties
in the United States, Australia, Latin America and the South Pacific. BMG was
incorporated in Nevada in 1985.

The Company's operating properties include the Battle Mountain Complex
in Nevada, the San Luis mine in Colorado, the Pajingo and Red Dome mines in
Queensland, Australia, the San Cristobal mine in Chile and the Kori Kollo
mine in Bolivia. BMG is in the permitting phase of two development projects
in the United States, the Crown Jewel in Washington and the Phoenix at the
Battle Mountain Complex in Nevada.

BMG currently owns 88 percent of the outstanding common equity of
Empresa Minera Inti Raymi S.A., a Bolivian company ("Inti Raymi") which
owns and operates the Kori Kollo mine. BMG also owns approximately 51.4
percent of the outstanding common equity of Niugini Mining Limited, a Papua
New Guinea company ("Niugini Mining") which owns and operates the San
Cristobal and the Red Dome mines and has an interest in a joint venture for
the proposed development of the Lihir gold project in Papua New Guinea
("PNG"). See "-- Niugini Mining Limited -- Lihir Project."

In 1994, the Company produced approximately 581,000 ounces of gold,
2.2 million ounces of silver and 12.6 million pounds of copper, of
which BMG's attributable portion was 486,000 ounces of gold, 1.7 million
ounces of silver and 6.5 million pounds of copper. A majority of the
Company's production in 1994 was attributable to foreign operations.

The following table sets forth, on a consolidated basis, the
identifiable assets as of December 31, 1994, and the percent of total
gross revenues for the year ended December 31, 1994, of the Company
attributable to its various mining interests.

IDENTIFIABLE PERCENT
ASSETS OF TOTAL GROSS
(000S) REVENUES
------------ --------------

BMG
Battle Mountain Complex $ 37,214 8
San Luis 21,476 11
Pajingo/Cindy 5,838 5
Crown Jewel 39,314 --

INTI RAYMI
Kori Kollo 258,962 52

NIUGINI MINING
San Cristobal 41,345 13
Red Dome 44,955 11
Lihir 140,141 --

OTHER 90,524 --
-------- ---
TOTAL $679,769 100
======== ===

The following table provides aggregate operating data for all of the
Company's operating mines for the years 1994, 1993 and 1992:

YEAR ENDED DECEMBER 31,
--------------------------------------------
1994 1993 1992
------------ ------------ -------------
BMG BMG BMG
AGGREGATE OPERATING DATA Net(1) 100% Net(2) 100% Net(3) 100%
------------------------ ------ ----- ------ ------ ------ ------

Gold production (000s oz).............. 486 581 400 474 417 496

Gold sales (000s oz)................... 478 569 417 503 415 489

Average realized gold price per oz..... $385 $386 $363 $366 $355 $359

Silver production (000s oz)............ 1,724 2,150 1,783 2,199 1,319 1,645

Silver sales (000s oz)................. 1,692 2,094 1,884 2,373 1,253 1,539

Average realized silver price per oz... $5.33 $5.34 $4.30 $4.29 $3.94 $3.94

Copper production (000s lbs)........... 6,546 12,606 5,374 9,517 6,855 12,139

Copper sales (000s lbs)................ 6,022 11,601 7,569 13,404 5,915 10,474

Average realized copper price per lb... $1.053 $1.053 $0.982 $0.982 $1.00 $1.00

Weighted average cost per equivalent gold
ounce(4):

Cash production costs................ $194 $200 $222 $222 $211 $211

Taxes, other than income............. 4 3 4 4 6 6

Depreciation, depletion and
amortization........................ 83 na 82 na 67 na
------ ------ ------ ------ ----- ------

Total operating costs.............. $281 na $308 na $284 na
====== ====== ====== ====== ===== ======

<FN>
__________
(1) Includes data based on BMG's 85 percent ownership of Inti Raymi until
February 28, 1994, and 88 percent thereafter. Gold production and gold
sales include 274,000 ounces and 271,000 ounces, respectively, related to
BMG's interest in Inti Raymi, and silver production and silver sales include
1,251,000 ounces and 1,238,000 ounces, respectively, related to such
interest. The information in the table also includes data based on BMG's
52.6 percent ownership interest in Niugini Mining for the first half of 1994
and 51.4 percent ownership interest for the second half of 1994. Gold
production and gold sales include 61,000 ounces and 57,000 ounces,
respectively, related to BMG's interest in Niugini Mining; silver production
and silver sales include 265,000 ounces and 242,000, respectively, related
to such interest; and copper production and copper sales relate only to such
interest.

(2) Includes data based on BMG's 85 percent ownership of Inti Raymi. Gold
production and gold sales each include 180,000 ounces related to BMG's
interest in Inti Raymi and silver production and silver sales include
1,266,000 ounces and 1,273,000 ounces, respectively, related to such
interest. The information in the table also includes data based on BMG's
56.5 percent ownership of Niugini Mining. Gold production and gold sales
include 55,000 ounces and 72,000 ounces, respectively, related to BMG's
interest in Niugini Mining; silver production and silver sales include
251,000 ounces and 344,000 ounces, respectively, related to such interest;
and copper production and copper sales relate only to such interest. On
December 15, 1993, BMG's ownership interest in Niugini Mining decreased
to 52.6 percent. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

(3) Includes data based on BMG's 85 percent ownership of Inti Raymi. Gold
production and gold sales include 46,000 ounces and 44,000 ounces,
respectively, related to BMG's interest in Inti Raymi and silver production
and silver sales include 296,000 ounces and 284,000 ounces, respectively,
related to such interest. The information in the table also includes data
based on BMG's 56.5 percent ownership of Niugini Mining. Gold production and
gold sales include 91,000 ounces and 89,000 ounces, respectively, related to
BMG's interest in Niugini Mining; silver production and silver sales include
356,000 ounces and 306,000 ounces, respectively, related to such interest;
and copper production and copper sales relate only to such interest.

(4) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and are
not directly comparable to selling and operating costs per equivalent ounce
of gold sold. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Results of Operations." All costs
are shown on a per equivalent gold ounce produced basis, with silver and
copper by-products converted to ounces of gold on an equivalent revenue
basis. Cash production costs include mining, processing and other direct
plant costs, but exclude sales expenses, royalties, corporate administrative
expenses and other indirect costs.

GOLD PRICE VOLATILITY

The Company's profitability is significantly affected by changes in the
market price of gold. Gold prices can fluctuate widely and may be affected by
numerous factors such as expectations for inflation, levels of interest
rates, currency exchange rates, central bank sales, forward selling by
producers, demand for precious metals, global or regional political and
economic crises and production costs in major gold-producing regions such as
South Africa, the United States and the Commonwealth of Independent States
(formerly, the Soviet Union). The aggregate effect of these factors, all of
which are beyond the Company's control, is impossible for the management of
the Company to predict. The demand for and supply of gold affect gold prices,
but not necessarily in the same manner as supply and demand affect the prices
of other commodities. The supply of gold consists of a combination of new
mine production and existing stocks of bullion and fabricated gold held by
governments, public and private financial institutions, industrial
organizations and private individuals. As the amount produced in any single
year constitutes a small portion of the total potential supply of gold,
normal variations in

current production do not have a significant impact on the supply of gold or
on its price. If gold prices decline substantially, the Company would have to
re-evaluate the carrying values of its properties and could determine that a
write-down of values would be needed. If gold prices decline to a point below
the Company's cash production costs and remain below this level for any
substantial period, the Company could determine that it is not economically
feasible to continue commercial production at any or all of its operations.
See "-- Certain Factors Affecting Reserves, Foreign Investments and
Properties."

The volatility of gold prices is illustrated by the following table of
the high, low and average afternoon fixing prices of gold per ounce on the
London Bullion Market:

YEAR ENDED DECEMBER 31,
----------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----

High............... $395 $406 $359 $403 $424

Low................ 378 326 330 344 346

Average............ 384 360 344 362 383

To mitigate the impact of downturns in the gold, silver and copper
markets, the Company currently engages in limited hedging transactions with
respect to a portion of its production of gold, silver and copper. See "--
Sales and Precious Metals Hedging Activities," and "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity
and Capital Resources." Also see Note 14, "Forward Sales and Hedging," of
Notes to Consolidated Financial Statements under Item 8 of Part II herein.

BATTLE MOUNTAIN GOLD COMPANY

BMG's corporate headquarters is located in Houston, Texas. BMG has a
North American regional office in Denver, Colorado and a South American
regional office in La Paz, Bolivia. Mine offices are located in Battle
Mountain, Nevada; San Luis, Colorado; and near Charters Towers, Queensland;
with an operations branch office in Oroville, Washington. BMG's worldwide
exploration program is headquartered in Houston, Texas. U.S. exploration
activities are managed from the Reno, Nevada branch office. Latin American
exploration activities are managed from the Tucson, Arizona branch office.
Other branch exploration offices are located in Helena, Montana; San Juan,
Argentina; Townsville, Queensland; Perth, Western Australia; and Jakarta,
Indonesia.

BATTLE MOUNTAIN COMPLEX

GENERAL. BMG's Battle Mountain Complex is located near Battle Mountain,
Nevada, and consists of two areas known as Copper Canyon and Copper Basin,
totalling approximately 50 square miles. The Copper Basin area is located 10
miles northeast of the Copper Canyon area. The Company's identifiable assets
attributable to the Battle Mountain Complex as of December 31, 1994, were
$37.2 million.

The graphics on page 5 consist of maps depicting the Company's mines and
offices in North America, South America and the Austral Pacific. The North
America map references the following Company offices: BMG's headquarters in
Houston, Texas; BMG's North American Regional Office in Denver, Colorado;
BMG's Latin American Exploration Office in Tucson, Arizona; and BMG's U.S.
Exploration Office in Reno, Nevada. The North American map also includes the
following operating locations: the San Luis Mine in southern Colorado; the
Battle Mountain Complex in northern Nevada; and the Crown Jewel project in
northeast Washington. The South America map references BMG's South American
Regional Office and Inti Raymi's headquarters in La Paz, Bolivia; the Kori
Kollo mine in central Bolivia; and the San Cristobal mine in northern Chile.
The Austral Pacific map references Niugini Mining's office in Sydney,
Australia; BMG's Australian Exploration Office in Perth, Australia; the Red
Dome and Pajingo mines in northeastern Australia; and the Lihir Project
northeast of mainland Papua New Guinea.

The Fortitude mine's reserves at the Battle Mountain Complex were
exhausted in March 1993, resulting in the decommissioning of the milling
facility at Copper Canyon. Heap leaching at Copper Basin commenced in 1991
and is expected to continue through 1996. The Reona heap leach mine in Copper
Canyon commenced production in October 1994. BMG announced a development
decision with regard to the Phoenix milling project in March 1995. The
Phoenix project is scheduled to commence operations in 1997, assuming timely
permitting.

BMG holds title to the Battle Mountain property in the form of fee land,
unpatented lode, placer and millsite claims and leased claim acreage. The
Reona mine and Phoenix project are located in part on unpatented lode claims
which may be subject to future royalties if legislative amendment or
replacement of the General Mining Law takes place. See "-- Property Interests
- -- United States." Access to the Battle Mountain Complex is by way of a
two-mile paved road, which connects to a state highway.

RESERVE DATA(1) DECEMBER 31, 1994
----------------------
REONA PHOENIX TOTAL
------ ------- ------

Proven/probable ore reserves (000s tons)... 13,606 37,657 51,263
Average gold ore grade (oz/ton)............ .026 .039 .036
Contained ounces (000s)
Gold..................................... 350 1,475 1,825
Silver................................... 1,975 8,795 10,770
Recovery factor for gold (%)............... 71 82 80

OPERATING DATA YEAR ENDED DECEMBER 31,
---------------------------
1994 1993 1992
----- ----- -----

Production statistics:
Tons of ore milled (000s).................... 0 151 1,222
Tons of ore leached (000s)................... 4,236 1,711 1,238
Stripping ratio(2)........................... 1.9:1 3.0:1 3.4:1
Mill feed ore grade (oz gold/ton)............ na .15 .14
Mill recovery factor for gold (%)............ na 94 94
Leach ore grade (oz gold/ton)................ .023 .033 .028
Leach recovery factor for gold (%)........... 50 57 65
Gold recovered (000s oz)..................... 48 61 178
Silver recovered (000s oz)................... 96 114 426
Cost per equivalent gold ounce(3):
Cash production costs........................ $255 $352 $209
Taxes, other than income..................... 16 15 9
Depreciation, depletion and amortization(4).. 117 67 43
----- ----- -----
Total operating costs...................... $388 $434 $261
===== ===== =====

<FN>
__________
(1) The reserves were determined using a cutoff grade ranging from .008 to
.023 ounce per ton and an assumed gold price of $375 per ounce. These
reserve data do not include approximately 26,400 contained ounces of gold
attributable to Copper Basin heap leach ore which will continue to be
leached through 1996. See "-- Certain Factors Affecting Reserves, Foreign
Investments and Properties."

(2) As of December 31, 1994, the estimated average stripping ratio over
the remaining life of the Battle Mountain Complex ore reserves was
approximately 1.4:1.

(3) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and are
not directly comparable to selling and operating costs per equivalent ounce
of gold sold. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Results of Operations." All costs
are shown on a per equivalent gold ounce produced basis, with by-product
silver converted to ounces of gold on an equivalent revenue basis. Cash
production costs include mining, processing and other direct plant costs,
but exclude sales expenses, corporate administrative expenses and other
indirect costs.

(4) Depreciation, depletion and amortization for 1992 does not include a
third-quarter write-off for the abandonment of the Canyon Placer mine which
amounted to $6 million before taxes. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Results of
Operations."

During 1993, production at the Battle Mountain Complex decreased
significantly from production in previous years as a result of the
exhaustion of the Fortitude reserves in March 1993. Unit cash production
costs at the Battle Mountain Complex for 1994 decreased significantly from
unit cash production costs for 1993. Unit cash production costs were higher
in 1993 primarily due to inclement weather conditions, higher haulage costs
associated with the mining of satellite ore deposits, and severance costs
attributable to a reduction in work force resulting from the shutdown of the
Copper Canyon milling facility. Depreciation, depletion and amortization
expense per ounce increased during 1994 as compared to 1993 as a result of a
higher depreciable base resulting from the capital costs associated with the
Reona mine.

COPPER BASIN HEAP LEACH. Mining ceased at Copper Basin during 1993.
Leaching of ore was ongoing at the Copper Basin heap leach facility during
1994 and is expected to continue through 1996.

REONA MINE. The Reona mine commenced operations in October 1994. The
cost of developing the mine, including the construction of a heap leach
facility, was approximately $24 million. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources." The Reona mine experienced a slow start-up, but
corrective measures improved throughput near year-end 1994.

PHOENIX PROJECT. BMG announced a development decision in March 1995
for its Phoenix milling project in Copper Canyon at the Battle Mountain
Complex. Start-up of the project is currently scheduled for 1997, assuming
timely permitting. The cost of the project is estimated at $87 million.
The Phoenix milling project is expected to produce approximately 145,000
ounces of gold per year when fully operational.

GEOLOGY. The mines at the Battle Mountain Complex are located in the
Battle Mountain Range. The range consists of predominantly faulted and folded
Paleozoic rocks which have been locally intruded by plutonic masses. Marginal
to and associated with the plutons, sulfide mineralization

containing base and precious metals has locally formed. Economic
concentrations of gold and silver are typically associated with carbonate
sediments that have been converted to "skarn" through the process of contact
metamorphism. Economic mineralization is also associated with faulting and
shearing which formed contemporaneously with the intrusive events. Mill grade
gold and silver mineralization has been mined from several areas within the
district where strong sulfide mineralization was deposited. Natural
weathering has altered areas of sulfide mineralization to form iron oxides
and other secondary minerals that are generally favorable for heap leach
recovery of precious metals.

MINING, PROCESSING AND ENVIRONMENTAL COMPLIANCE. BMG conducts its mining
operation at the Battle Mountain Complex utilizing conventional open pit
mining methods. Leach grade ore is processed at Reona and Copper Basin by
heap leaching. The precious metals refinery and desorption plant at Copper
Canyon processes solution from the Reona and Copper Basin heap leach
facilities. The Battle Mountain Complex is subject to federal and state
environmental laws and regulations including reclamation requirements under
the laws and regulations of the State of Nevada and the U.S. Department of
the Interior, Bureau of Land Management (the "BLM"). See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources" and "-- Environmental Matters -- United
States -- Battle Mountain Complex."

SAN LUIS MINE

GENERAL. The San Luis mine is located approximately 3 miles northeast of
San Luis, Colorado. The San Luis mine lies within approximately 800 acres of
land leased from a private party which in turn owns the land in fee. The
lease is held by Battle Mountain Resources Inc., a wholly-owned subsidiary of
BMG. The Company also owns fee lands in the proximity of the mine. Production
from the mine is subject to a net smelter returns royalty of 3.5 percent
payable to a private party. See "-- Property Interests -- United States."
Commercial production at the San Luis mine began in July 1991. Access to
the San Luis property is by way of a 5 mile dirt road, which connects to a
state highway. The Company's identifiable assets attributable to the San Luis
mine as of December 31, 1994, were $21.5 million.

RESERVE DATA(1) DECEMBER 31, 1994
--------------------

Proven/probable ore reserves (000s tons)........ 4,811
Average gold ore grade (oz/ton)................. .042
Contained gold ounces (000s).................... 200
Recovery factor for gold (%).................... 90

OPERATING DATA YEAR ENDED DECEMBER 31,
-----------------------
1994 1993 1992
---- ---- ----

Production Statistics:
Tons of ore milled (000s). . . . . . . . . . . 1,692 1,692 1,631
Stripping ratio(2) . . . . . . . . . . . . . . 2.0:1 2.4:1 2.4:1
Mill feed ore grade (oz gold/ton). . . . . . . .046 .049 .042
Mill recovery factor for gold (%). . . . . . . 89 91 88
Gold recovered (000s oz) . . . . . . . . . . . 73 72 55
Silver recovered (000s oz) . . . . . . . . . . 19 27 28
Cost per equivalent gold ounce(3):
Cash production costs. . . . . . . . . . . . . $232 $238 $316
Taxes, other than income . . . . . . . . . . . 14 10 16
Depreciation, depletion and amortization(4). . 71 81 131
Total operating costs. . . . . . . . . . . . $317 $329 $463

<FN>
__________________

(1) The reserves were determined using a cutoff grade of .017 ounce of gold
per ton and an assumed gold price of $375 per ounce. See "-- Certain
Factors Affecting Reserves, Foreign Investments and Properties."

(2) As of December 31, 1994, the estimated average stripping ratio was
approximately 1.4:1 over the remaining life of the mine.

(3) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and
are not directly comparable to selling and operating costs per
equivalent ounce of gold sold. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Results
of Operations." All costs are shown on a per equivalent gold ounce
produced basis, with silver by-product converted to ounces of gold on
an equivalent revenue basis. Cash production costs include mining,
processing and other direct plant costs, but exclude sales expenses,
royalties, corporate administrative expenses and other indirect costs.

(4) Depreciation, depletion and amortization for 1992 does not include a
third-quarter write-down which totalled $26.7 million before taxes. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Results of Operations."

GEOLOGY. The San Luis gold deposits, composed of the east and west zones,
are part of a relatively flat dipping, tabular mineralized zone. This zone
lies on the south-facing slope of the north side of Rito Seco Valley. The
host rocks of the deposits are intensely deformed gneisses of Precambrian
age. The gold is fine-grained and associated with various sulfide minerals,
pyrite being the most common. The degree of oxidation is weak and generally
is restricted to fractures near the surface. Sulfides occur at the surface in
some areas, particularly the west zone.

MINING, PROCESSING AND ENVIRONMENTAL COMPLIANCE. BMG conducts its mining
operations at San Luis utilizing conventional open pit mining methods. Ore is
processed at a mill in a carbon-in-pulp cyanide leach circuit. Operations at
San Luis are subject to federal and state environmental laws and regulations.
See "-- Environmental Matters -- United States -- San Luis."

PAJINGO MINE/CINDY DEPOSIT

GENERAL. The Pajingo mine and milling facility and the nearby Cindy
deposit are situated on a 10.5 square mile state-issued mining lease, 44
miles southeast of Charters Towers and 120 miles southwest of Townsville,
Queensland. The mine and Cindy deposit are owned by Pajingo Gold Mine Pty.
Ltd., a wholly-owned Australian subsidiary of a U.S. subsidiary of BMG.
Production from the state-issued mining lease is subject to an annual royalty
payable to the State of Queensland. See "--Property Interests -- Australia"
and "-- Taxes -- Australia." Production from the Cindy deposit is subject to
a 3 percent royalty payable to a private party. The Company's identifiable
assets attributable to the Pajingo mine and Cindy deposit as of December 31,
1994, were $5.8 million.

The Pajingo mine commenced production in 1987. Mining operations at the
Pajingo mine ceased in 1993; however, processing of stockpiled ore continued
into 1994. BMG commenced development of the Cindy deposit in November 1993.
The total cost of developing the Cindy deposit was approximately $4.3
million. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources." Open pit mining of
the Cindy deposit commenced in February 1994 and ceased in July 1994.
Underground development began in September 1994. Access to the Pajingo mine
and Cindy deposit is by way of a 13-mile gravel road, which connects to a
state highway.

RESERVE DATA(1) December 31, 1994
-----------------

Proven/probable ore reserves (000s tons). . . . . . 250
Average gold ore grade (oz/ton) . . . . . . . . . . .21
Contained gold ounces (000s). . . . . . . . . . . . 53
Recovery factor for gold (%). . . . . . . . . . . . 96

OPERATING DATA Year Ended December 31,
------------------------
1994 1993 1992
---- ---- ----

PRODUCTION STATISTICS:
Tons of ore milled (000s). . . . . . . . 191 190 196
Stripping ratio(2) . . . . . . . . . . . 23:1 .03:1 4.4:1
Mill feed ore grade (oz gold/ton). . . . .17 .18 .26
Mill recovery factor for gold (%). . . . 95 94 94
Gold recovered (000s oz) . . . . . . . . 30 32 47
Silver recovered (000s oz) . . . . . . . 93 125 213
Cost per equivalent gold ounce(3):
Cash production costs. . . . . . . . . . $150 $179 $129
Taxes, other than income . . . . . . . . 2 2 1
Depreciation, depletion and
amortization. . . . . . . . . . . . . . 47 49 45
---- ---- ----
Total operating costs. . . . . . . . . $199 $230 $175
==== ==== ====
<FN>
________________

(1) This table includes ore reserves at the Cindy deposit. The reserves were
determined using a cutoff grade ranging from .041 to .117 ounce of gold
per ton and an assumed gold price of $375 per ounce. See "-- Certain
Factors Affecting Reserves, Foreign Investments and Properties."

(2) The stripping ratio reported for 1994 relates to open pit mining at the
Cindy deposit. The stripping ratios for 1992 and 1993 apply to the
Pajingo mine.

(3) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and
are not directly comparable to selling and operating costs per equivalent
ounce of gold sold. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Results of Operations." All costs
are shown on a per equivalent gold ounce produced basis, with by-product
silver converted to ounces of gold on an equivalent revenue basis. Cash
production costs include mining, processing and other direct plant costs,
but exclude sales expenses, corporate administrative expenses and other
indirect costs. Under the mining lease, the Company pays to the State of
Queensland an annual royalty equal to the greater of 2 percent of gross
sales after deducting A$30,000 or 5 percent of the operating income that
exceeds A$30,000. Payment of such royalty is not included in cash
production costs.

Unit cash production and total unit operating costs at the Pajingo mine
decreased in 1994 from 1993 levels primarily because production was from
stockpiled ore at the Pajingo mine during the majority of 1994. Following
depletion of the Cindy deposit and cessation of milling activities, all
capitalized costs associated with the Pajingo mine and Cindy deposit are
expected to be fully expensed.

GEOLOGY. The Cindy deposit is located in rocks of Paleozoic age in the
Drummond Basin. The host rocks are volcanic pyroclastic and lava rocks
intermixed with sandstone and siltstone sedimentary rocks. The gold ores
occur as quartz veins emplaced in steeply dipping fractures in the host rocks.

MINING, PROCESSING AND ENVIRONMENTAL COMPLIANCE. BMG conducts its mining
operations at the Cindy deposit utilizing underground mining methods. Ore
from the Cindy deposit is transported to the Pajingo mine and processed at
the Pajingo mill in a carbon-in-pulp cyanide leach circuit. The Pajingo mine
and Cindy deposit are subject to environmental laws and regulations including
reclamation requirements under Queensland legislation. See "-- Environmental
Matters -- Australia."

CROWN JEWEL PROJECT

BMG has an option to earn a 54 percent joint venture interest in the Crown
Jewel project near Oroville, Washington. After the joint venture produces 1.6
million ounces of gold, this joint venture interest would be reduced to 51
percent. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources." In order to
acquire its interest, BMG will have to fund, on a nonreimbursable basis, all
expenditures for exploration, evaluation and development of the project
through commencement of commercial production. BMG announced a decision to
develop the Crown Jewel project in 1992, subject to obtaining requisite
permits and approvals. The Company's identifiable assets attributable to the
Crown Jewel project as of December 31, 1994, were $39.3 million.

The project is within approximately 9,000 acres of land in northeastern
Washington state consisting of patented, unpatented and lease holdings. A
patent covering the unpatented portion of the Crown Jewel ore body has been
applied for, but no First Half - Mineral Entry Final Certificate has been
received. Legislative amendment or replacement of the General Mining Law
could take place in 1995 and could result in the imposition of a severance
tax or royalty on Crown Jewel production. See "--Property Interests -- United
States."

Legislation impacting mining activities was enacted in 1994 in Washington
State. The legislation covers, among other matters, siting criteria and
additional standards for tailings impoundments, additional bonding
requirements for mining activities, county economic approval authority over
mining projects, and the allowance of private citizens' lawsuits regarding
enforcement of certain environmental laws. While the legislation could cause
increases in capital expenditure or operating costs and potential project
delays, the actual impact of the legislation on the Crown Jewel project is
difficult to determine at this time. Also, commencing in 1994, Washington
state agency funding for processing water rights applications was
substantially reduced as a result of legislative budgetary decisions. The
impact of this reduced funding on the Company's water rights applications for
the Crown Jewel project cannot yet be determined.

Reserves at the Crown Jewel project were estimated at 8.5 million tons of
ore at an average grade of .182 ounce of gold per ton as of December 31,
1994, for net proven and probable gold reserves of approximately 1,550,000
contained ounces (835,000 ounces attributable to BMG). The average recovery
factor for gold was estimated to be approximately 88 percent. The reserves
were determined using a cutoff grade of .042 ounce of gold per ton and an
assumed gold price of $375 per ounce. Additional gold mineralization exists
at the Crown Jewel project comprising approximately 600,000 tons of gold
mineralization with an average grade of .182 ounce of gold per ton based on
the same cutoff grade and assumed gold price used to determined the above
stated reserves. See "--Certain Factors Affecting Reserves, Foreign
Investments and Properties."

BMG is proceeding with permitting of the Crown Jewel project. Obtaining
the necessary government permits and approvals is a complex and time
consuming process involving numerous federal, state and local agencies. The
draft Environmental Impact Statement is expected to be issued in the near
future. See "-- Environmental Matters -- United States -- Crown Jewel
Project." In addition, permitting could be further complicated by potential
future changes to environmental and public land laws affecting the project.
See "-- Property Interests -- United States."

Assuming satisfactory permits and approvals are obtained, BMG expects to
construct a milling facility designed to have a throughput capacity of 3,000
tons per day which is expected to produce an average of approximately 97,200
ounces of gold per year attributable to BMG. Completion could occur in 1997,
although start-up will depend on the length of the permitting and the water
rights acquisition process and the extent to which legal challenges are made
by project opponents. See "-- Environmental Matters -- United States -- Crown
Jewel Project." BMG will be the operator. Total capital costs for the
project, including plant construction, exploration, evaluation and option
payments, are anticipated to be approximately $108 million, of which
approximately $47.6 million have been incurred through December 31, 1994. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

EXPLORATION

BMG, through wholly-owned subsidiaries, currently conducts exploration and
evaluation activities in search of precious metals in the United States,
Argentina, Bolivia, Mexico, Chile, Honduras, Australia, Peru, Ecuador and
Indonesia. BMG's primary objective is to develop high-quality ore deposits
with low operating costs per ounce. BMG seeks to do this through exploration
for extensions of ore zones at operating properties, in areas proximate to
other gold production and through frontier exploration. For additional
information concerning BMG's exploration expenditures, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

EMPRESA MINERA INTI RAYMI S.A.

Inti Raymi's corporate headquarters is located in La Paz, Bolivia. Through
a series of acquisitions, BMG has increased its equity ownership in Inti
Raymi to 88 percent through 1994. BMG's most recent acquisition was in March
1994 when BMG acquired an additional 3 percent equity ownership interest in
Inti Raymi from Zeland Mines, S.A. (unaffiliated with BMG) for $5.2 million.
The remaining 12 percent of Inti Raymi is owned by Zeland Mines S.A. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources." BMG maintains political risk
insurance for a portion of its investment in Inti Raymi with the Overseas
Private Investment Corporation, a United States government agency. See "--
Certain Factors Affecting Reserves, Foreign Investments and Properties." Inti
Raymi's principal asset is the Kori Kollo mine.

KORI KOLLO MINE

GENERAL. The Kori Kollo mine is located near Oruro in western Bolivia on
government mining concessions issued to Inti Raymi covering approximately
43.7 square miles. See "-- Property Interests -- Bolivia." Access to the mine
site is by way of a 27-mile dirt and gravel road connected to a national
highway. The Company's identifiable assets attributable to the Kori Kollo
mine as of December 31, 1994, were $259 million.

Commercial production from the milling facility at the Kori Kollo mine
commenced in February 1993. At that time, heap leaching of oxide ore at the
mine was discontinued. The cost of constructing the milling facility was
partially project financed. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources." Inti Raymi completed its first full calendar year of production
from the milling facility in 1994.

Inti Raymi conducts ongoing exploration and evaluation activities in
search of precious metals within the Kori Kollo concession areas. Gold
mineralization has been found at Llallagua and Nueva Esperanza in the
vicinity of the Kori Kollo mine. Additional drilling and metallurgical
testing is underway in an effort to further evaluate the gold mineralization
at Llallagua and Nueva Esperanza. See "Certain Factors Affecting Reserves,
Foreign Investments and Properties."

RESERVE DATA(1)

DECEMBER 31, 1994
--------------------
BMG Net 100%
(88%)
------- ------

Proven/probable ore reserves (000s tons). . . . . 49,550 56,306
Average gold ore grade (oz/ton) . . . . . . . . . .067 .067
Contained ounces (000s)
Gold. . . . . . . . . . . . . . . . . . . . . . 3,320 3,775
Silver. . . . . . . . . . . . . . . . . . . . . 17,485 19,870
Recovery factor for gold (%). . . . . . . . . . . 77 77

OPERATING DATA

YEAR ENDED DECEMBER 31,
----------------------------------------------
1994 1993 1992
------------- -------------- --------------
BMG NET BMG NET BMG NET
(2) 100% (85%) 100% (85%) 100%
------- ---- ------- ------ ------- ------

Heap leach operation:(3)
Tons of ore heap leached (000s). . . 0 0 105 123 1,170 1,385
Stripping ratio. . . . . . . . . . . na na 1.62:1 1.62:1 1.25:1 1.25:1
Leach ore grade (oz gold/ton). . . . na na .050 .050 .051 .051
Leach recovery factor for gold (%) . na na 80 80 76 76
Gold recovered (000s oz) . . . . . . na na 4 5 46 54
Silver recovered (000s oz) . . . . . na na 47 56 296 349
Milling operation:
Tons of ore milled (000s). . . . . . 5,980 6,831 4,464 5,220 0 0
Stripping ratio(4) . . . . . . . . . 1.23:1 1.23:1 1.45:1 1.45:1 na na
Mill feed ore grade (oz gold/ton). . .066 .066 .056 .056 na na
Mill recovery factor for gold (%). . 69 69 69 69 na na
Gold recovered (000s oz) . . . . . . 274 313 176 206 na na
Silver recovered (000s oz) . . . . . 1,251 1,431 1,219 1,433 na na
Cost per equivalent gold ounce(5):
Cash production costs. . . . . . . . $161 $161 $169 $169 $149 $149
Taxes, other than income . . . . . . - - 1 1 2 2
Depreciation, depletion and
amortization. . . . . . . . . . . . 91 na 109 na 128 na
------ ----- ------ ------- ------ ------
Total operating costs. . . . . . . $ 252 na $ 279 na $ 279 na
====== ===== ====== ======= ====== ======

<FN>
________________

(1) The reserves were determined using a cutoff grade ranging from .028 to
.036 ounce of gold per ton and an assumed gold price of $350 per ounce.
A recovery enhancement project scheduled to be completed in the first
half of 1995 is estimated to increase recoveries from 69 percent to
approximately 77 percent. See "-- Certain Factors Affecting Reserves,
Foreign Investments and Properties."

(2) Reflects data attributable to BMG's 85 percent ownership of Inti Raymi
through February 1994 and its 88 percent ownership of Inti Raymi
thereafter.

(3) Heap leaching of oxide ore was suspended in the first quarter of 1993 in
connection with the start-up of the milling facility in February 1993.

(4) As of December 31, 1994, the estimated average stripping ratio was
approximately 1.17:1 over the remaining life of the mine.

(5) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and
are not directly comparable to selling and operating costs per equivalent
ounce of gold sold. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Results of Operations." All costs
are shown on a per equivalent gold ounce produced basis, with by-product
silver converted to ounces of gold on an equivalent revenue basis. Cash
production costs include mining, processing and other direct plant costs,
but exclude sales expenses, corporate administrative expenses and other
indirect costs.

Total gold production in 1994 at Kori Kollo was 313,000 ounces of gold, of
which BMG's attributable share was 274,000 ounces of gold. See "-- Mining and
Processing." Gold production at the Kori Kollo milling facility has exceeded
the original design capacity of 245,000 ounces of gold per year due to
throughput enhancement work completed at the mine during 1994 and because of
higher recoveries associated with the processing of a larger quantity of
oxide ore than had been previously anticipated for 1994. Depreciation,
depletion and amortization expense per ounce decreased during 1994 compared
with 1993 as a result of higher feed grades. A recovery enhancement project
is also being constructed at the Kori Kollo mine and is scheduled for
completion in the first half of 1995. This project is expected to increase
gold recovery to approximately 77 percent compared with 69 percent at the end
of 1994. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources."

GEOLOGY. The project is in the Andean tectonic belt of western Bolivia
between the Cordillera Occidental and the Cordillera Real, and within a
former lake basin of the Altiplano. Deformed Paleozoic sediments and a
Tertiary volcanic sequence underlie the lake bed deposits. Locally these
rocks form topographic highs, reflecting block-faulting. Irregular masses of
biotite-hornblende dacite porphyry intrude the Paleozoic sediments. The
deposit is contained within two varieties of dacite porphyry intrusions. Both
varieties of dacite have been pervasively quartz-sericite altered throughout
the deposit. The most important structural controls of mineralization are
fault systems which trend in two directions and contain auriferous sulfide
veins and veinlets. Some veins contain minor stibnite, tetrahedrite, galena,
sphalerite and realgar.

MINING, PROCESSING AND ENVIRONMENTAL COMPLIANCE. Inti Raymi utilizes
conventional open pit mining methods at Kori Kollo. Mining at the Kori Kollo
mine is performed by Servicios de Maquinaria y Transporte, S.A., an 88
percent owned subsidiary of BMG ("SERMAT"). BMG increased its ownership
interest in SERMAT in March 1994 by acquiring an additional 3 percent
interest from Zeland Mines S.A. Ore from the Kori Kollo mine is processed at
the mill in a carbon-in-leach cyanide leach circuit. The mill processes an
average of approximately 17,000 tons of ore per day. The Kori Kollo
operations are subject to Bolivian environmental laws. See "-- Environmental
Matters -- Bolivia."

EXPLORATION

The Company conducts exploration in Bolivia (outside the Kori Kollo
concession area) and Argentina through Compania Minera La Barca S.A. ("La
Barca") and Minera Illimani S.A., separate 88 percent owned subsidiaries of
BMG, respectively. BMG increased its ownership in La Barca in March 1994 by
acquiring an additional 3 percent interest from Zeland Mines S.A. For
additional information concerning exploration expenditures, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

NIUGINI MINING LIMITED

Niugini Mining's administrative offices are located in Sydney, Australia
and Kainantu, Papua New Guinea, with subsidiary branch offices in Santiago
and Antofagasta, Chile; Cairns, Australia; and Kuala Lumpur, Malaysia.
Through purchases of Niugini Mining's equity directly from Niugini Mining and
on the open market, BMG acquired approximately 56.5 percent of Niugini
Mining's equity by 1990. BMG's interest in Niugini Mining was reduced from
approximately 56.5 percent to approximately 52.6 percent in December 1993 as
a result of the sale of equity by Niugini Mining in connection with the
proposed financing of the Lihir project in PNG. BMG's interest was further
reduced to 51.4 percent during 1994 as a result of the exercise of certain
employee stock options. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources." The remaining share ownership of Niugini Mining is publicly held,
with the shares quoted on the Australian Stock Exchange Limited.

SAN CRISTOBAL MINE

GENERAL. In 1989, Niugini Mining purchased a 100 percent interest in the
San Cristobal gold mine located on 52.5 square miles of government-issued
mining concessions in northern Chile, 68 miles from the port city of
Antofagasta. See "-- Property Interests -- Chile." The San Cristobal mine is
owned and operated by Niugini Mining's wholly-owned Chilean subsidiary
Inversiones Mineras del Inca, S.A. The mine is readily accessible by existing
roads. Commercial production of the mine began in July 1991. The Company's
identifiable assets attributable to the San Cristobal mine as of December 31,
1994, were $41.3 million.

RESERVE DATA(1)

DECEMBER 31, 1994
--------------------
BMG Net
(51.4%) 100%
------- ----

Proven/probable ore reserves (000s tons). . . . 7,037 13,669
Average gold ore grade (oz/ton) . . . . . . . . .033 .033
Contained gold ounces (000s). . . . . . . . . . 230 445
Recovery factor for gold (%). . . . . . . . . . 74 74

YEAR ENDED DECEMBER 31,

1994 1993 1992
---------------- --------------- ---------------
BMG NET BMG NET BMG NET
(51.4%)(2) 100% (56.5%) 100% (56.5%) 100%
---------- ----- -------- ------ ------- ------

Production statistics:
Tons of ore heap leached (000s). . . . 2,065 3,969 1,814 3,213 1,735 3,072
Stripping ratio(3) . . . . . . . . . . 2.7:1 2.7:1 2.3:1 2.3:1 2.2:1 2.2:1
Leach ore grade (oz gold/ton). . . . . .025 .025 .029 .029 .028 .028
Leach recovery factor for gold (%) . . 76 76 53 53 67 67
Gold recovered (000s oz) . . . . . . . 39 74 28 49 33 58
Silver recovered (000s oz) . . . . . . 94 181 78 139 100 177
Cost per equivalent gold ounce(4):
Cash production costs. . . . . . . . . $ 254 $ 254 $ 351 $ 351 $ 276 $ 276
Taxes, other than income . . . . . . . - - - - - -
Depreciation, depletion and
amortization. . . . . . . . . . . . . 75 75 85 85 82 82
------ ------ ------ ------ ------ ------
Total operating costs. . . . . . . . $ 329 $ 329 $ 436 $ 436 $ 358 $ 358
====== ====== ====== ====== ====== ======

<FN>
________________

(1) The reserves were determined using a cutoff grade of .010 ounce of gold
per ton and an assumed gold price of $377 per ounce. See "-- Certain
Factors Affecting Reserves, Foreign Investments and Properties."

(2) Reflects BMG's 52.6 percent ownership through June 1994 and 51.4 percent
thereafter. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

(3) As of December 31, 1994, the estimated average stripping ratio was
approximately 2.0:1 over the remaining life of the mine.

Production at San Cristobal increased significantly in 1994 primarily as a
result of the installation of a tertiary crushing circuit in early 1994. Unit
cash production and total unit operating costs for 1994 decreased from such
costs for 1993 primarily as a result of significant improvement in operating
efficiencies. See "-- Certain Factors Affecting Reserves, Foreign Investments
and Properties."

GEOLOGY. The San Cristobal mine is located in a low-grade porphyry-breccia
style gold deposit. A system of quartz feldspar porphyries, rhyolites and
breccias is hosted within a major structure at the margin of a larger granite
porphyry. The main part of the deposit occurs in the upper

part of the porphyry-breccia system. Several styles of gold mineralization
have been defined with the majority of the gold contained within the dikes
and breccias, particularly at dike contacts.

MINING, PROCESSING AND ENVIRONMENTAL COMPLIANCE. Niugini Mining conducts
its mining operations at San Cristobal utilizing conventional open pit mining
methods. Ore is processed by heap leaching. San Cristobal operations are
subject to Chilean environmental laws and regulations. See "-- Environmental
Matters -- Chile."

RED DOME MINE

GENERAL. In 1991, Niugini Mining purchased a 100 percent interest in the
Red Dome gold mine in northern Queensland for approximately $15.5 million
(before working capital adjustments of $2.1 million which resulted in a net
purchase price of $13.4 million). The Red Dome mine is owned by Niugini
Mining (Australia) Pty. Ltd., a wholly-owned Australian subsidiary of Niugini
Mining. The mine is located on a 5.6 square mile state-issued block of four
mining leases located 84 miles west of Cairns, Queensland, Australia and is
accessible by a 44-mile dirt and gravel road from a state highway. Production
from the state-issued mining lease is subject to an annual royalty payable to
the State of Queensland. See "-- Property Interests -- Australia" and "--
Taxes -- Australia." The Company's identifiable assets attributable to the Red
Dome mine as of December 31, 1994, were $45.0 million.

Expansion of the existing Red Dome pit was completed in 1994 at an
approximate cost of $34 million. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources." The expansion should extend the life of the mine through 1997.

RESERVE DATA(1)

DECEMBER 31, 1994
-----------------
BMG NET
(51.4%) 100%
------- ------

Proven/probable ore reserves (000s tons). . . . . 1,246 2,425
Average gold ore grade (oz/ton) . . . . . . . . . .085 .085
Contained gold ounces(000s) . . . . . . . . . . . 105 205
Contained pounds of copper (000s) . . . . . . . . 13,030 25,355
Recovery factor for gold (%). . . . . . . . . . . 81 81

YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1994 1993 1992
------------------ --------------- ---------------
BMG NET BMG NET BMG NET
OPERATING DATA (51.4%)(2) 100% (56.5%) 100% (56.5%) 100%
- -------------- ---------- ---- ------- ---- ------- ---

Production statistics:

Tons of ore milled (000s) . . . . . . 673 1,293 662 1,173 652 1,155

Stripping ratio(3) . . . . . . . . . 13.0:1 13.0:1 na na 1.6:1 1.6:1

Mill feed ore grade (oz gold/ton) . . .041 .041 .052 .052 .092 .092

Mill recovery factor for gold (%) . . 69 69 77 77 95 95

Gold recovered (000s oz) . . . . . . 22 43 27 49 58 104

Silver recovered (000s oz) . . . . . 171 330 173 305 256 452

Copper recovered (000s lbs) . . . . . 6,546 12,606 5,374 9,517 6,855 12,139

Cost per equivalent gold ounce(4):

Cash production costs . . . . . . . . $264 $264 $199 $199 $202 $202

Taxes, other than income . . . . . . -- -- -- -- -- --

Depreciation, depletion and
amortization . . . . . . . . . . . . 48 48 9 9 51 51
----- ------ ----- ----- ----- ------
Total operating costs . . . . . . $312 $312 $208 $208 $253 $253
----- ------ ----- ----- ----- ------
----- ------ ----- ----- ----- ------

<FN>

- ------------------
(1) This table includes ore reserves resulting from the expansion of the Red
Dome mine pit. The reserves were determined using a cutoff grade of .050
ounce of gold per ton and an assumed gold price of A$515 per ounce. See
"-- Certain Factors Affecting Reserves, Foreign Investments and
Properties" and "-- Explanatory Note Regarding Exchange Rates."

(3) As of December 31, 1994, the estimated average stripping ratio was
approximately 1.25:1 over the remaining life of the mine. Prior to the
current expansion, mining had been completed in 1992; therefore, no mining
occurred in 1993.

(4) Represents production costs incurred which, because of changes in
inventory, may not be included in operating results for the period and are
not directly comparable to selling and operating costs per equivalent ounce
of gold sold. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Results of Operations." All costs
are shown on a per equivalent gold ounce produced basis, with by-product
silver and copper converted to ounces of gold on an equivalent revenue
basis. Cash production costs include mining, processing and other direct
plant costs, but exclude sales expenses, corporate administrative expenses
and other indirect costs. Under the mining lease, Niugini Mining pays to
the State of Queensland an annual royalty equal to the greater of 2 percent
of gross sales after deducting A$30,000 or 5 percent of the operating
income that exceeds A$30,000. Payment of such royalty is not included in
cash production costs.

The amount of gold produced at the Red Dome mine decreased in 1994 from
1993 primarily as a result of processing lower grade ore. Unit cash
production costs increased in 1994 as compared to 1993 primarily as a result
of higher metallurgy and mining costs. Depreciation, depletion and

amortization expense per ounce increased during 1994 as compared to 1993
primarily as a result of increased capital costs related to the expansion of
the Red Dome pit.

GEOLOGY. The Red Dome deposit is hosted by Siluro-Devonian sedimentary
rocks of the Chillagoe Formation and is located between one-half and one and
one-half miles to the east of the Palmerville Fault, which is a major
regional feature that marks the western boundary between this unit and the
Precambrian Dargalong Metamorphics to the west. The Chillagoe Formation
consists predominantly of fossiliferous limestone and chert with intercalated
beds of quartz greywacke and siltstone. At the mine, narrow porphyritic
rhyolite dikes were intruded into a calcareous unit of the Chillagoe
Formation and produced skarns. Detailed electron microprobe analysis has
indicated that the gold occurs predominantly as isolated grains of native
gold either as inclusions within sulfides or as free gold associated with
silicates. Electrum is minor and has been identified only in the retrograde
skarn.

MINING, PROCESSING AND ENVIRONMENTAL COMPLIANCE. Mining operations at
Red Dome are conducted utilizing conventional open pit methods. The open pit
mine has been in operation since 1986, first utilizing heap leach processing
and later adding a milling facility. Ore is processed by heap leach,
flotation and carbon-in-leach methods. Red Dome operations are subject to
environmental laws and regulations including reclamation requirements under
Queensland legislation. See "-- Environmental Matters -- Australia."

LIHIR PROJECT

The Lihir project is located on the east coast of Lihir Island, 375
miles northeast of mainland PNG. Niugini Mining's ownership interest in the
Lihir project is in a state of transition as explained below. Niugini
Mining's ownership interest is subject to a joint venture agreement with a
subsidiary of RTZ Corporation plc ("RTZ") and the Mineral Resources Lihir
Pty. Ltd., a wholly-owned entity of the PNG government. Lihir Management
Company Pty. Ltd., a subsidiary of RTZ, is the manager for the Lihir project.
The Company's identifiable assets attributable to the Lihir project as of
December 31, 1994, were $140.1 million. The manager estimates minable sulfide
reserves at the Lihir project to be approximately 114.6 million tons of ore with
an average ore grade of .13 ounce of gold per ton, or approximately 14.6 million
contained gold ounces (1.5 million ounces of gold attributable to BMG). The
reserves were determined using a cutoff grade of .072 ounce of gold per ton and
an assumed gold price of $350. See "-- Certain Factors Affecting Reserves,
Foreign Investments and Properties."

On March 17, 1995, the Special Mining Lease (the "SML") for the Lihir
project was executed by the PNG government. The SML provides Niugini Mining,
RTZ and the PNG government, as joint venture partners, the right to develop
and operate the Lihir gold project. The Lihir Island landowners have reached
substantial agreement with the Lihir joint venture for the landowners' ongoing
compensation, social well-being from development of the mine and eventual
participation in the project. Formal execution of agreements with the landowners
is expected to take place in the near future.

Niugini Mining and subsidiaries of RTZ and the PNG government have signed
other agreements which will govern the ownership of the project and provide the
legal and financial framework for the development

and operation of the Lihir mine. The parties have formed a new company named
Lihir Gold Limited ("LGL") for ownership and development of the Lihir project.
A series of different agreed upon transactions, described below, are being
effected, first, to change the ownership profile of the joint venture, second,
to transfer ownership of the Lihir project to LGL, and third, to raise equity
funding through a public share offering of LGL shares. LGL would also raise
significant funds through project financing in order to complete development.
The following transactions will occur prior to project financing being
available:

(1) In connection with the execution of the SML and subject to certain
conditions subsequent and payment terms, the PNG government acquired a
30 percent joint venture interest, pro rata from a subsidiary of RTZ and
Niugini Mining ("NML" for purposes of tables below). The PNG government
has agreed to pay in steps a subsidiary of RTZ and Niugini Mining 30
percent of the aggregate historic costs relating to the Lihir project to
acquire its interest. Total historic costs are presently estimated at
approximately $155 million. Niugini Mining's pro rata portion of the
payment received from the PNG government will be based on its historic 8
percent contributing interest in repayment of expenditures to December 31,
1993, and 30 percent thereafter. Therefore, the following ownership
percentages apply before the next step indicated:

RTZ: 56% joint venture interest
NML: 14% joint venture interest
PNG: 30% joint venture interest

(2) Upon execution of agreements with the landowners, discussed above,
Niugini Mining will acquire a 16 percent joint venture interest from
a subsidiary of RTZ for $48 million and the Niugini Mining carried
interest would terminate. In addition RTZ is expected to transfer its
ownership in The Lihir joint venture to another RTZ subsidiary, Southern
Gold (Bahamas) Limited. These transactions will result in the following
ownership percentages:

RTZ: 40% joint venture interest
NML: 30% joint venture interest
PNG: 30% joint venture interest

(3) The joint venture interests will be transferred to LGL shortly before
the initial public offering of shares in LGL. The shares at this stage
will be owned in the same proportions as set out in (2) above.

(4) LGL will issue shares of common equity to new investors through an
initial public offering at a price yet to be determined. The terms of
the public offering would be subject to market conditions and Niugini
Mining's interest in LGL would be proportionately reduced depending on
the number of shares issued.

The manager's estimate of future development costs of the Lihir project
has increased to $671 million from $625 million, mainly due to foreign
exchange rate changes and inflation. The costs will be financed from the
proceeds of an initial public offering by LGL, anticipated to be
approximately $450 million (see above), a limited recourse borrowing by LGL
for approximately $300 million and joint venture funding prior to transfer of
the joint venture interests to LGL. The limited recourse borrowing

would require a completion guarantee under which RTZ, Niugini Mining and the
PNG government would severally guarantee debt until completion of
development. Additionally, political risk insurance will be purchased to insure
against risks relating to expropriation, transferability/convertibility
blockages and war/civil strife. Niugini Mining expects to fund the acquisition
of the additional joint venture interest from a subsidiary of RTZ and the
additional joint venture pre-development costs from its working capital, other
available facilities and possibly other alternate means of financing. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

The Lihir project will consist of an open pit mine, a crushing and
grinding circuit, a pressure oxidation circuit, a carbon-in-leach circuit,
gold smelting facilities to produce gold dore, and associated infrastructure.
Based on the manager's current proposals, the milling facility will process
approximately 9,400 tons of ore per day. The mine is expected to produce an
average of approximately 600,000 ounces of gold per year for the first 12
years of production. The Lihir ore is refractory in nature, requiring complex
processing methods, including pressure oxidation. The ore body is associated
with an active geothermal system, and an extensive dewatering and geothermal
control system will be necessary to avoid problems with hot water or steam
during mining. The process recovery factor is estimated to be approximately
92 percent. Operating costs, excluding royalties and sales costs, are
estimated to be approximately $199 per ounce of gold for the first 15 years
of operations.

Development of the Lihir project is contingent on the finalization of the
agreements with the Lihir Island landowners, the successful completion of the
initial public offering of LGL's shares, and the closing of the Lihir project
financing. Should it be determined that development cannot proceed as
contemplated, the Company may be required to write down part or all of its
investment in the Lihir project. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

EXPLORATION

In addition to its mining operations, Niugini Mining conducts
exploration and evaluation activities in search of precious metals in the
vicinity of its San Cristobal and Red Dome mines and generally in Papua New
Guinea, Chile, Malaysia, Thailand, Australia, India and Greece. For
additional information concerning Niugini Mining's exploration expenditures,
see "Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Liquidity and Capital Resources."

SALES AND PRECIOUS METALS HEDGING ACTIVITIES

SALES. The Company primarily produces dore at its mines which it sells
under sales and/or refining agreements. It also produces concentrates
containing gold, silver and copper at the Red Dome mine. Three buyers of
production from the Company each accounted for more than 15 percent of the
Company's total 1994 sales. Because of the availability of several
alternative buyers, the Company believes that it would suffer no material
adverse effect should it cease to market its gold, silver and copper through
its present buyers.

The table under "Introduction" sets forth information regarding the
percent of total gross revenues of the Company attributable to each of its
mines. Sales in Australia are denominated in either U.S. or Australian
dollars at the Company's election. See "-- Explanatory Note Regarding
Exchange Rates" and Note 12, "Geographic Segment Information," of Notes to
Consolidated Financial Statements under Item 8 of Part II herein and Note 11,
"Major Customers and Export Sales."

Precious Metals Hedging. The Company may employ a number of hedging
techniques with the objective of mitigating the impact of downturns in the
gold market. The Company also engages in limited hedging of its silver and
copper production. Hedging techniques used by the Company have included
selling and/or delivering against fixed forward and "spot deferred" forward
sales contracts and entering into put options with unaffiliated parties.
Fixed forward sales contracts require the future delivery at a specified
price on a specified date. Forward sales contracts that are made on a spot
deferred basis allow the Company to defer the delivery of gold under the
contract to a later date at the original contract price plus the prevailing
premium (contango) at the time of deferral, as long as certain conditions are
satisfied. Various factors influence the decision to close a spot deferred
contract or roll the contract to a later date.

Future decisions with respect to hedging will depend upon gold market
conditions and management's assessment of the potential impacts of gold price
risk. Volatility in the price of gold can have a significant effect on the
Company's sales revenue and income. The volatility can be reduced by the use
of forward sales and other hedging techniques, but these techniques may at
the same time reduce the Company's ability to fully realize the benefits of
increases in gold prices.

The forward sales contracts associated with Red Dome gold production are
denominated in Australian dollars. The value of Red Dome's forward sales
contracts will fluctuate depending on the exchange rate between U.S. and
Australian dollars. During 1994, the Australian dollar fluctuated from a low
of one Australian dollar to 0.68 U.S. dollars to a high of one Australian
dollar to 0.78 U.S. dollars. See "-- Explanatory Note Regarding Exchange
Rates." For more information regarding the Company's hedging activities, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and Note 14, "Forward Sales
and Hedging," of Notes to Consolidated Financial Statements under Item 8 of
Part II herein. For more information concerning gold prices and the gold
market, see "-- Gold Price Volatility."

CERTAIN FACTORS AFFECTING RESERVES, FOREIGN INVESTMENTS AND PROPERTIES

The ore reserve figures presented herein are estimates, and no assurance
can be given that the indicated level of recovery of gold, silver and copper
will be realized. The ore reserve figures presented herein were calculated
using a gold price ranging from $350 to $380 per ounce. Market price
fluctuations of gold, silver and copper, as well as increased production
costs or reduced recovery rates, may render ore reserves uneconomic and may
ultimately result in a restatement of ore reserves. See "-- Gold Price
Volatility." Additionally, changes in the various assumptions on which the
reserve estimates are based, such as the cutoff grade, may result in
increases or decreases in the reserve estimates from year to year. Reserve
estimates for properties that have not yet commenced production may require
revision based on actual production experience. Moreover, many factors
relating to each

mine, such as the design of the mine plan, unexpected operating and
processing problems, increases in the stripping ratio and the complexity of
the metallurgy of an ore body, may adversely affect cash production and
operating costs of a project. Reserves for the Lihir project, as well as
projected cost and production estimates, are based on information provided by
the manager. Such information has been reviewed by, but not independently
confirmed by, the Company. Neither reserves nor projections of future
operations should be interpreted as assurances of the economic life or
profitability of future operations.

A majority of the Company's production in 1994 was attributable to
foreign operations. Foreign operations, which include significant operations
in Latin America and Australia, are subject to the risks normally associated
with conducting business in foreign countries, including foreign exchange
controls and currency fluctuations, limitations on the repatriation of
earnings, foreign taxation, labor disputes, civil disturbances and uncertain
political and economic environments as well as risks of war and civil
disturbances or other risks which may limit or disrupt production and
markets, restrict the movement of funds or result in the deprivation of
contract rights or the taking of property by nationalization or appropriation
without fair compensation. Although the Company has not experienced any
significant problem in foreign countries arising from nationalistic policies,
political instability, economic instability, labor disputes, civil
disturbances or currency fluctuations or restrictions, there can be no
assurance that such problems will not arise in the future.

A significant portion of the Company's reserves and production come from
Inti Raymi's Kori Kollo mine in Bolivia. Risks associated with conducting
business in Bolivia are therefore significant to the Company. For several
decades, Bolivia experienced periods of slow or negative growth, high
inflation, large devaluations of the Bolivian currency and imposition of
exchange controls. Limited availability of foreign exchange required the
Bolivian government to restructure its foreign currency denominated
indebtedness. Since 1985, the Bolivian government has pursued economic
stabilization and reform policies which have significantly reduced inflation
and budget deficits and which have eliminated exchange controls. There are
currently no restrictions on the transfer of funds out of Bolivia. Since
1986, the exchange rate for Bolivian currency has been relatively stable. A
recurrence of adverse economic conditions, high levels of inflation, the
imposition of exchange controls or restrictions on payments to non-Bolivians
could adversely affect Inti Raymi's ability to pay dividends or repay funds
borrowed outside Bolivia and adversely affect the Company's financial
condition and results of operations.

Since 1982, Bolivian governments have been elected through a democratic
process as required under the Bolivian Constitution. The Company considers
the Bolivian government to be stable and its current relations with the
government to be good. However, should there be a deterioration in Bolivia's
political stability or an adverse change in the Bolivian government's policy
towards foreign-owned companies in Bolivia, the Company's financial
condition and results of operations could be adversely affected. Although
Bolivia has not suffered from civil disturbances, acts of terrorism and
sabotage to the same extent as neighboring South American countries, there
can be no assurance that the occurrence of civil unrest or terrorist
activities against Inti Raymi's facilities will not occur. BMG has, in
connection with its investment in Inti Raymi, obtained political risk
insurance from the U.S. Overseas Private Investment Corporation. This
insurance provides coverage of $15 million for expropriation, $25 million for
inconvertibility and $25 million for political violence. The policy is

renewed annually at the option of BMG and is expected to be available for the
life of the Kori Kollo mine.

The Company also has a significant investment in the Lihir project
located in PNG. PNG achieved independence in 1974. Since 1974, PNG has
maintained a policy favoring direct foreign investment in general, and
foreign investment in the mining sector in particular. The PNG Constitution
and major statutes governing foreign investment also provide significant
safeguards for investors and lenders. The Investment Promotion Act assures
investors the right to remit after-tax profits and make debt-service and
supplier payments. The Investment Promotion Act also provides that
expropriation will not occur without adequate compensation. While the Company
does not expect civil unrest from the inhabitants of Lihir Island, there can
be no assurance that acts of civil unrest against the Lihir project would not
occur. Furthermore, a deterioration in PNG's political stability or an
adverse change in the PNG government's policy towards foreign-owned companies
in PNG could adversely affect the Lihir project and the Company's financial
condition.

Foreign operations and investments may also be adversely affected by
laws and policies of the United States affecting foreign trade, investment
and taxation.

PROPERTY INTERESTS

UNITED STATES

Mineral interests in the United States are owned variously by federal
and state governments and private parties. When a prospective mineral
property is owned by a private party or by a state, some type of property
acquisition agreement is necessary in order for the Company to explore or
develop such property. Generally, these agreements take the form of long-term
mineral leases under which the Company acquires the right to explore, develop
and operate the property in exchange for an up-front cash payment, periodic
cash payments during the exploration and development phase and/or a royalty
during production (usually expressed as a percentage of net smelter returns
or net profits derived from the leased properties). Other forms of
acquisition agreements include exploration agreements coupled with options to
purchase and joint venture agreements. Under a typical joint venture
agreement, one joint venture participant manages the property, with both
joint venture participants contributing to the costs of development and
operations and sharing in the production from the property in proportion to
their respective interests. Another form of joint venture agreement gives the
Company the right to earn an undivided interest in a mineral property owned
by another joint venture participant upon the performance of a specified
amount of exploration and development on the property.

In addition to the acquisition of mineral rights held by states or
private parties, the Company also may acquire rights to explore for and
produce minerals on federally owned lands. This acquisition is accomplished
through the location of unpatented mining claims (lode, placer and millsite)
upon unappropriated federal land pursuant to procedures established by the
General Mining Law of 1872, the Federal Land Policy and Management Act of
1976 and various state laws (or the acquisition of previously located mining
claims from a private party as described above). These laws generally provide
that a citizen of the United States, including a corporation, may acquire a
possessory right to

explore for and develop valuable mineral deposits discovered upon
unappropriated federal lands, provided that such lands have not been
withdrawn from mineral location. The amount of public lands open to mineral
location under the federal mining laws is continually being limited by the
withdrawal or segregation of portions of such lands for other purposes.
Withdrawn lands would include, for example, lands included in national parks
and military reservations and lands designated as part of the National
Wilderness Preservation System. Withdrawal and segregation programs may
substantially limit the amount of land in the Western United States that is
available for the Company's exploration efforts.

The location of a valid mining claim on federal lands requires the
discovery of a valuable mineral deposit, the erection of appropriate
monuments, the posting of a location notice at the point of discovery in
accordance with federal law and the filing of a notice or certificate of
location and a map with the BLM and the real property recording official of
the county in which the claim is located. A certain type of mining claim, a
millsite claim, may be located on non-mineralized lands. Failure to follow
the required procedures may render the mining claim void. If the statutes and
regulations for the location of a mining claim are complied with, the locator
obtains a valid possessory right to explore, develop and produce minerals
from the claim. This property right can be freely transferred and is
protected against appropriation by the government without just compensation.
Also, the claim locator acquires the right to obtain a patent (or deed)
conveying fee title to his claim from the federal government upon payment of
fees and compliance with certain additional procedures.

The interests represented by unpatented mining claims possess certain
unique risks not associated with other types of property interests. For
example, in order to maintain each unpatented mining claim, the claimant must
pay fees and timely file documents with the United States Department of the
Interior. Failure to make the required payments or federal filing constitutes
abandonment of the claim. Further, because mining claims are often located
with less than sophisticated surveying techniques, difficulty may arise in
determining the validity and ownership of specific mining claims. Moreover,
under applicable regulations and court decisions, in order for an unpatented
mining claim to be valid against a governmental challenge, the claimant must
be able to prove that the mineral deposit on which the claim is based can be
mined at a profit. Thus, it is conceivable that, during times of declining
metal prices, claims that were valid when located could be later invalidated
by the federal government.

The validity of unpatented mining claims, which constitute most of the
Company's undeveloped property holdings in the United States, is often
uncertain and may be contested by the federal government and third parties.
Although the Company has attempted to acquire satisfactory title to its
undeveloped properties, the Company, in accordance with mining industry
practice, does not generally obtain title opinions or title insurance until a
decision is made to develop a property, with the attendant risk that some
titles, particularly titles to undeveloped properties, may be defective.

Legislative amendment or replacement of the General Mining Law under
which the Company holds claims on public lands is being considered by
Congress in 1995. Such legislation could result in new environmental
standards, additional reclamation requirements and new procedural steps which
could result in delays and additional expenditures for all phases of mining
activity. Such legislation could also impose a severance tax or royalty.
Approximately 40 percent of the Reona reserves, 23 percent of the Phoenix
project reserves and 80 percent of the Crown Jewel ore body are on public

lands and could be subject to a royalty. These projects, as well as
reclamation and closure activities at the Battle Mountain Complex, could be
subject to additional permitting and environmental requirements. Orders for
mineral surveys for the claims constituting the unpatented portion of the
Reona reserves have been issued by the BLM. A patent covering the unpatented
portion of the Crown Jewel ore body has been applied for, but no First
Half-Mineral Entry Final Certificate has been received. The extent to which
existing law might change is not yet known. The Company cannot yet predict
the impact of any such change on its U.S. activities. However, the passage of
legislation that can be reasonably anticipated is not expected to render
uneconomic any of the Company's existing operating mines or development
projects, assuming current gold prices.

BOLIVIA

Mineral interests in Bolivia are under the domain of the federal
government. Concessions for exploration and mining are issued pursuant to the
Bolivian Mining Code. Inti Raymi owns a group of concessions which include
the Kori Kollo mine and operating facilities.

CHILE

Mineral interests in Chile are under the domain of the federal
government, which issues mining claims pursuant to the Chilean Mining Code.
Niugini Mining, through subsidiaries, owns the group of mining concessions
including the San Cristobal mine and operating facilities.

AUSTRALIA

Most of the Company's exploration properties in Australia are located in
Queensland and in Western Australia. Much of this land is "Crown land" held
under pastoral leases by third parties. The Company holds the lands under
mining leases, authorities to prospect and exploration licenses. The Pajingo
mine and the Red Dome mine and associated operating facilities are on lands
held pursuant to mining leases issued by the State of Queensland.

Similar to procedures in the United States, a lease applicant must stake
the area of a proposed mining lease. A subsequent application for a mining
lease must be filed with officials who will make a recommendation to the
state to grant or refuse the lease application. Each state imposes various
obligations on tenement holders and generally requires holders to undertake a
minimum work program or to make certain minimum exploration expenditures
during each year of the permit. The duration of permits varies from state to
state.

In June 1992, the Supreme Court of Australia recognized, in the case
MABO V. QUEENSLAND, a new form of real property title in Australia referred
to as "native title," relating to aboriginal rights. The court held that
"native title" may exist wherever such title has not been extinguished by a
superseding grant from the government. The court also held that "native
title" may also co-exist with certain interests granted by the government,
such as mining exploration. Since the MABO decision, the federal government
and a number of state governments have attempted to formulate a legislative
response that will validate titles threatened by native title claims without
compromising aboriginal rights. The Company believes that the MABO decision
will neither affect the Company's Pajingo or Red

Dome mine nor have an adverse impact on the Company's exploration properties
in Australia. However, the MABO decision has increased the risk that title to
certain exploration properties may be challenged or invalidated in the future
or that title claimants will have the right to negotiate compensatory terms
with the Company.

PAPUA NEW GUINEA

Exploration and mining activities in PNG are regulated by the Mining Act
and administered by the Department of Minerals and Energy. Exploration rights
in PNG are held pursuant to exploration licenses which are granted by the PNG
government and typically run for two-year periods renewable at the discretion
of the government. Before construction and mining operations can begin, an
exploration license must be converted, at the government's discretion, to a
Special Mining Lease which may be granted for an initial term of 40 years. As
part of the conversion of an exploration license to a Special Mining Lease,
the holder must submit for the government's approval a Proposal for
Development and negotiate a Mining Development Contract and compensation
agreements with affected landowners. The government has a policy of acquiring
a participatory interest in new mining ventures. Although the terms of the
government's acquisition may be subject to negotiation, the government has
acquired no more than a 30 percent interest in a new mining venture.
Provincial and landowner participation in the project is expected to occur
through the participatory interest acquired by the PNG government. On March
17, 1995, the Special Mining Lease for the Lihir project was executed by the
PNG government. See "-- Niugini Mining Limited -- Lihir Project" for the
current status of the Lihir project.

ENVIRONMENTAL MATTERS

Set forth below is a summary description of various environmental
matters affecting the Company, including various domestic and foreign
national, state and local legislation and regulations governing, among other
things, mineral exploration, development, production and refining.
Environmental laws and regulations in most countries allow the imposition of
civil and criminal penalties for violations. The Company believes it is in
substantial compliance with all material aspects of such applicable laws and
regulations. The Company is not aware of any material environmental
constraint affecting its existing mines or development properties that would
preclude the economic development or operation of any of the Company's mines
or projects or have a material adverse effect on the Company's financial
condition or results of operations.

UNITED STATES

GENERAL. The Company is required to obtain a full range of environmental
permits and approvals of reclamation plans to develop new properties and
maintain such permits for ongoing operations and for reclamation, closure,
and post-closure activities. Existing and possible future legislation and
regulations could cause additional expense, capital expenditures,
restrictions and delays in the development, operation and closure of the
Company's properties, the extent of which cannot be predicted by management
of the Company. The Company expects environmental constraints to become
increasingly strict and that the cost of compliance will continue to grow. In
the context of environmental permitting, including the approval of
reclamation plans, the Company must comply with standards and regulations
which may entail greater or lesser costs and delays depending on the nature

of the activity to be permitted and how stringently the regulations are
implemented by the permitting authority. It is possible that the costs and
delays associated with the compliance with such standards and regulations
could become such that the Company would not proceed with the development or
operation of a mine.

Each of the Company's mining properties has many environmental controls.
The principal environmental control facilities at the Company's heap leaching
operations include engineered heap leach facilities to contain process
fluids. The principal environmental control facilities at the Company's
milling operations consist of tailings treatment circuits to process plant
effluent and tailings facilities designed to hold the processed effluent.
These facilities are constructed as an integral part of processing
facilities. The Company will also incur reclamation expenditures as reserves
at existing mines are exhausted and the facilities are closed. The Company is
making accruals for estimated reclamation expenditures over the lives of the
respective mines. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

LAWS AND REGULATIONS. The Company is subject to federal, state and local
laws and regulations relating to the protection of the environment. At the
federal level, these laws include, among others, the Resource Conservation
and Recovery Act, the Clean Water Act, the Clean Air Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the National
Environmental Policy Act of 1969, and the Endangered Species Act of 1973.

THE RESOURCE CONSERVATION AND RECOVERY ACT ("RCRA") RCRA regulates the
generation, transportation, treatment, storage and disposal of hazardous
wastes, special wastes, and some non-hazardous wastes. Mining wastes are
currently exempt to a limited extent from the extensive set of Environmental
Protection Agency ("EPA") regulations governing hazardous waste. The EPA is
proceeding with development of a program to regulate mining waste pursuant to
its solid waste management authority under RCRA. Under this program, certain
processing and other wastes, as well as high volume extraction and
beneficiation wastes, will eventually be regulated by the EPA. In this
connection, RCRA is currently pending legislative re-authorization and the
EPA is studying regulations concerning how mine wastes should be managed and
regulated. If the Company's mining wastes are treated as hazardous wastes,
material expenditures would be required for the construction of additional
waste disposal facilities and possible other corrective action measures.

THE CLEAN WATER ACT ("CWA") CWA controls, among other things, the point
source discharge of effluent into navigable surface waters by requiring
effluent discharge permits. The EPA promulgated stormwater regulations in
1991 which regulate point source stormwater discharge at all United States
mining operations. BMG has applied to state authorities and received general
permits for point source stormwater discharges under relevant state and
federal regulations. Because of the nature of the stormwater regulations, it
is difficult to identify the exact terms and conditions which will have to be
satisfied in order to be in compliance with such regulations. The Company,
however, does not anticipate that such compliance will have a material
adverse effect on the Company's financial position or results of operations.

THE CLEAN AIR ACT ("CAA") CAA controls, among other things, fugitive
dust arising out of the Company's operations. Mining operations produce
fugitive dust, primarily from crushing

operations and vehicular traffic over unpaved roads. To control fugitive
dust, dust suppressants and water are periodically sprayed on the unpaved
roads. Certain environmental groups have contended in several pending court
cases that fugitive dusts emissions from new or expanded surface mining
operations should be subject to additional regulation, which could
substantially limit the ability of the Company and other companies engaged in
similar mining operations to develop new surface mining operations or
maintain or expand existing operations. Emission limitations are a matter of
individual state air quality control implementation plans. Both federal and
state law impose substantial penalties for violation of applicable
requirements.

THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT
("CERCLA") CERCLA, also known as the "Superfund" law, imposes liability,
without regard to fault or the legality of the original conduct, on certain
classes of persons that are considered to have contributed to the release of
a "hazardous substance" into the environment. These persons include the owner
or operator of the disposal site or sites where the release occurred and
companies that disposed or arranged for the disposal of the hazardous
substances found at the site. Persons who are or were responsible for
releases of hazardous substances under CERCLA may be subject to joint and
several liability for the costs of cleaning up the hazardous substances that
have been released into the environment and for damages to natural resources.
In the ordinary course of the Company's operations, substances may be
generated which fall within the definition of "hazardous substances."

THE NATIONAL ENVIRONMENTAL POLICY ACT OF 1969 ("NEPA") Under NEPA, if
any project is to be undertaken that would significantly affect the quality
of the environment and that would require a permit or approval from a federal
agency, a detailed environmental impact statement ("EIS") or an environmental
assessment may be required by the federal agency. It is possible that new
projects and extensions of many of the Company's existing projects would
require NEPA compliance. The effect of NEPA may be to delay or prevent
construction of new facilities or to alter their location, design or method
of construction. Similar state laws also may be applicable. Furthermore, the
NEPA process often engenders citizen involvement which can result in
substantial delays in the permitting process.

THE ENDANGERED SPECIES ACT OF 1973 ("ESA") ESA is designed to protect
certain species of flora and fauna that have been identified by the
government as endangered or threatened. No federal agency may grant
permission to develop mines unless it insures that the action will not
jeopardize or adversely affect the designated critical habitat of the
species. Many of the Company's operations require federal agency approval and
are subject to ESA requirements. A finding by a federal agency that proposed
mining operations could jeopardize or adversely affect an endangered species
could impair the Company's ability to develop a project. Furthermore, the ESA
process often engenders citizen involvement which can result in substantial
delays in the permitting process.

In the various states in which the Company operates or has projects,
laws and regulations have been promulgated that are at least as stringent as
RCRA, CWA and CAA and the regulations promulgated thereunder. Such states
have assumed authority for permitting and enforcement of these federal laws
and regulations. As a result, the EPA has no direct authority at the mine
sites. However, should the EPA promulgate more stringent regulations, the
states must conform their regulations or risk having permitting and
enforcement authority revert to the EPA.

The various states in which the Company operates have groundwater protection
statutes and regulatory programs. These laws vary from state to state. As a
general rule, state groundwater protection programs regulate the discharge of
waste materials that could adversely impact groundwater which is capable of
beneficial use. The groundwater programs typically require site discharge
permits, spill notification and corrective action measures, and impose civil
and criminal penalties for violations. It is not uncommon for neighboring
landowners and other third parties to file claims for personal injury arising
out of contamination events.

Changes in the aforementioned federal and state environmental laws and
regulations, the enactment or promulgation of new laws and regulations or the
imposition of new requirements pursuant to such laws or regulations could
require capital expenditures, increases in operating costs and delays or
interruptions of operations, render certain mining operations uneconomic and
prevent or delay the development of new operations. See "-- Property
Interests -- United States."

BATTLE MOUNTAIN COMPLEX. BMG has been issued a water pollution control
permit for the Battle Mountain Complex project facilities from the Nevada
Division of Environmental Protection. This permit was amended in 1994 to
include the Reona operations. BMG has also received a stormwater discharge
permit covering the Battle Mountain Complex area. BMG has applied for a
reclamation permit covering the Battle Mountain Complex area which is
currently under review. Activity expected to be performed as part of the
development and operation of the Phoenix project would include certain
reclamation costs. If the Phoenix project does not proceed, reclamation
expenditures would be expected to increase by $3 million over current
estimates. BMG is currently conducting further site characterization studies
for the Battle Mountain Complex area and is communicating with the Nevada
Division of Environmental Protection to determine the ultimate reclamation
and closure requirements. Adverse site characterization results or the
imposition by regulatory authorities of unanticipated reclamation standards
could substantially increase future reclamation requirements and
expenditures. Laws and regulations applicable to these permits have been
amended during the past few years, and it is difficult to ascertain the
exact terms and conditions which will be required thereunder. Based on data
collected to date, management has not identified any adverse site
characterization results that are expected to have a material adverse effect
on the Company's financial condition. Reclamation obligations could also be
impacted by legislative amendment or replacement of the General Mining Law.
See "-- Property Interests -- United States" and see "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

CROWN JEWEL PROJECT. The State of Washington, site of the proposed Crown
Jewel mine, has a comprehensive regulatory regime controlling the development
and operation of new mining operations. Permits and approvals must be
obtained from federal, state and local agencies before the mine can be put
into operation. The State Environmental Policy Act ("SEPA") mandates an
exhaustive review of the environmental impact of the project prior to permit
issuance and before construction can begin. In addition, since the project is
located partially on federal land, NEPA compliance is necessary, including
the preparation of an EIS which is also used to satisfy the SEPA
requirements. During this permitting process, as required by law, baseline
studies of all aspects of the mine and its impact on the surrounding
environment are conducted. Many permits for the Crown Jewel project require
the completion of the NEPA/SEPA process before such permits can be issued.
Approximately two dozen permits will be

required for the project. The project is moving slowly through the permitting
process with a draft EIS expected to be released for public comment in the
first half of 1995. The delays in obtaining permits for the Crown Jewel
project have related primarily to delays in regulatory agreement on
preparation of data for the EIS, the time taken for agency development of
certain wildlife studies and the time taken by the agencies to prepare the
draft EIS. The duration of the permitting effort is difficult for the
management of BMG to predict since it is contingent upon many variables not
within BMG's control, including administrative and judicial appeals, and
inter-governmental coordination. The State of Washington legislature passed
legislation in 1994 which may impact environmental compliance and permitting
at the Crown Jewel project. See "-- Battle Mountain Gold Company -- Crown
Jewel Project."

BOLIVIA

An additional tailings treatment facility is being constructed at the Kori
Kollo mine and is expected to be operational by the end of the first half of
1995. In Bolivia, new environmental regulations are being developed to
implement federal legislation passed in 1992. Various versions of the
proposed regulations are currently being reviewed by several governmental
agencies, and final regulations are expected by mid-1995. The new regulations
will generally require the preparation of environmental impact studies, set
air and water discharge standards and provide protocols for dealing with
hazardous substances. Such regulations could result in new environmental
standards and requirements for the Company's Kori Kollo project which, in
turn, could require additional expenditures and changes in operations. At
this time, the Company is not able to determine the impact of these
anticipated regulations, but does not anticipate that such regulations will
have a material effect on the Company's financial condition or results of
operations.

CHILE

Environmental legislation was approved by the Chilean legislature and
enacted into law in 1993. Regulations in connection with the legislation have
not been published. The legislation is expected to impact mining activities
in Chile. However, at this time, the Company cannot accurately assess the
impact on Niugini Mining's San Cristobal operations or the Company's
exploration activities in Chile.

AUSTRALIA

The mining industry in Australia is subject to extensive state legislation
with respect to environmental protection. In particular, such legislation
requires the reduction or elimination of the adverse effects of wastes
generated by extraction and processing operations. Accordingly, mine and
plant designs and extraction and processing operations are subject to such
legislative requirements, which typically entail compliance with applicable
environmental criteria or review processes, the obtaining of various permits,
licenses and authorizations from various governmental agencies, and, under
certain circumstances, the preparation of environmental impact reports.

In addition to complying with various environmental protection statutes,
both the Pajingo and Red Dome mines in Queensland are required to obtain plan
of operations approvals from the Minister

of Mines pursuant to the Mineral Resources Act. When approved, the plan of
operations becomes part of the conditions of the mining lease issued by the
state. The plans of operations at the Pajingo and Red Dome mines have been
approved, including an approved Environmental Management Overview Strategy,
which covers environmental protection and rehabilitation requirements.

In late 1994, the Queensland government passed the Environmental
Protection Act, which includes comprehensive environmental legislation which
supersedes prior law. Mining operations will be exempt for two years while
the Queensland government evaluates how to integrate the existing mining
regulations with the Environmental Protection Act. At this time, the Company
is not able to accurately assess the impact of this new legislation on the
Company's operations and exploration activities in Australia.

PAPUA NEW GUINEA

Mining operations in PNG are subject to comprehensive environmental
regulations pursuant to legislation requiring the preparation of an EIS and
legislation setting environmental standards and approval requirements for
activities which may affect air, land or water.

The Lihir project will be subject to stringent environmental standards set
forth in the following PNG legislation: the Environmental Planning Act, the
Water Resources Act, the Dumping of Wastes at Sea Act, and the Environmental
Contaminants Act. Special emphasis has been given to minimize the impact of
the Lihir project on the inhabitants of Lihir Island. Tailings would be
discharged into the ocean where the natural alkalinity of the seawater is
expected to neutralize the acidity of the tailings. Hot water from the mine's
dewatering and geothermal control system would also be discharged into the
ocean. As the Lihir project's economic life draws to a close, a final
reclamation plan would be prepared. Final reclamation would include the
removal of buildings and equipment and re-contouring and revegetating
disturbed lands and any residual stockpiles.

TAXES

UNITED STATES

The Company is subject to federal income tax by the United States on its
worldwide earnings, although earnings of the Company's foreign subsidiaries
are not generally subject to tax until repatriated to the United States.
While the United States allows a credit for foreign income taxes paid, the
limitations on such credit may substantially reduce or eliminate the benefit
of the credit. The top marginal U.S. statutory corporate rates are presently
35 percent for regular tax and 20 percent for alternative minimum tax.
Alternative minimum taxes paid are available as credits against regular tax
in subsequent years. At December 31, 1994, the Company had approximately $4.6
million of alternative minimum tax credits available on an indefinite
carryforward basis, and approximately $71.4 million of net operating loss
carryforwards, available to offset future U.S. federal income tax. These
benefits begin to expire in 2007. These amounts are subject to adjustment
upon a subsequent audit by the Internal Revenue Service. The Company is also
subject to state and local taxes in jurisdictions in which it is engaged in
business operations.

BOLIVIA

In December 1994, the laws in Bolivia were amended to generally subject
Bolivian mining operations to income tax. Pursuant to certain grandfather
provisions under the Bolivian Mining Code under which Inti Raymi currently
operates, Inti Raymi is subject to a 3 percent royalty which is assessed on
gold sales. Starting in late 1999, however, Inti Raymi is expected to be
subject to an income tax at a 25 percent rate and no royalty.

Dividends paid by Inti Raymi are subject to a 12.5 percent Bolivian
withholding tax. Inti Raymi generally pays Bolivian Value Added Tax on all
purchases and imports and subsequently claims a refund from the Bolivian
government of such Value Added Tax by means of tax certificates used to pay
taxes due on its sales. See "Business and Properties of the Company -- Inti
Raymi -- General" and see "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

CHILE

The San Cristobal mine is owned and operated by Niugini Mining's
wholly-owned Chilean subsidiary Inversiones Mineras del Inca, S.A. After
utilization of existing tax loss carryforwards, Inversiones Mineras del Inca,
S.A. will be subject to income tax at the rate of 15 percent. Repatriated
profits are generally taxed at an effective rate of 20 percent. Inversiones
Mineras del Inca, S.A. pays Chilean Value Added Tax on all purchases and
imports and subsequently claims a refund of Value Added Tax with respect to
its exports.

AUSTRALIA

Pajingo Gold Mine Pty. Ltd. is subject to tax on income derived from
Pajingo Gold Mine Pty. Ltd.'s mining operations. However, no taxes are
expected to be paid because of rules under which taxes have been phased in
for gold mining. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Results of Operations." Australian
dividends paid by Pajingo Gold Mine Pty. Ltd. to a U.S. subsidiary of BMG are
currently subject to a 15 percent Australian withholding tax.

Niugini Mining (Australia) Pty. Ltd., a wholly-owned Australian subsidiary
of Niugini Mining, is subject to tax at the corporate rate of 33 percent on
their mining, hedging and investment income. However, such income is expected
to be offset by certain deductions available to Niugini Mining (Australia)
Pty. Ltd.

The Company's Australian operations are also subject to various state and
local taxes and the payment of certain gold and silver royalties. Under each
of the mining leases, the Company pays to the State of Queensland an annual
royalty equal to the greater of 2 percent of gross sales after deducting
A$30,000 or 5 percent of the operating income that exceeds A$30,000.

PAPUA NEW GUINEA

Niugini Mining is subject to corporate tax in PNG. Assessable income,
after utilization of existing tax loss carryforwards, will be subject to a 35
percent income tax because Niugini Mining is a PNG resident corporation. The
dividend withholding tax rate is currently 17 percent. Niugini Mining did not
pay any dividends in 1994.

INSURANCE

The Company carries insurance against property damage risks and
comprehensive general liability insurance. The Company is also insured
against losses from dishonesty, including limited losses from the theft of
gold, as well as losses of other goods in transit. From time to time, the
Company reviews and modifies its insurance coverages and may obtain
additional policies, cancel existing policies or self-insure as it deems
appropriate.

The Company is not insured against most environmental risks. Insurance
against most environmental risks (including potential liability for pollution
or other hazards as a result of the disposal of waste products occurring from
exploration and production) is not generally available to the Company or to
other companies within the industry. The Company periodically evaluates the
cost and coverage of the insurance against certain environmental risks that
is available to determine if it would be appropriate to obtain such
insurance. Without such insurance, if the Company becomes subject to
environmental liabilities, the payment of such liabilities would reduce the
funds available to the Company. Should the Company be unable to fully fund
the remedial cost of an environmental problem, the Company might be required
to enter into interim compliance measures pending completion of the required
remedy.

EMPLOYEES

The number of full-time employees at December 31, 1994 of the Company was:

BMG
Battle Mountain Complex* 122
San Luis mine 95
Pajingo mine 37
Crown Jewel project 7
U.S. corporate and exploration staff 70
Australian corporate and exploration staff 17
Bolivian corporate and exploration staff 4

INTI RAYMI
Inti Raymi corporate, operations and exploration staff* 491
SERMAT corporate and mining staff* 206

NIUGINI MINING
San Cristobal mine* 230
Red Dome mine* 105
Niugini Mining corporate and exploration staff 23
-----
Total 1,407
-----

<FN>

* Represent operations where some of the employees are represented by a labor
union.

COMPETITION

The Company competes with other mining companies in connection with the
acquisition of precious metal mining interests and in the recruitment and
retention of qualified employees. There is significant and increasing
competition for the limited number of gold acquisition opportunities in the
United States, Australia and other countries. As a result of this
competition, the Company may be unable to acquire attractive gold mining
properties on terms it considers acceptable. In the pursuit of such
acquisition opportunities, the Company competes with many United States and
international companies that have substantially greater financial resources
than the Company.

In terms of asset size or reserves, the Company is not currently a major
producer in the world markets for gold as compared with other producers.
There is a world market for gold, silver and copper. The Company believes
that no single company has sufficient market power to affect the price or
supply of gold, silver and copper in the world market. See "-- Gold Price
Volatility."

EXPLANATORY NOTE REGARDING EXCHANGE RATES

In this report, references to "dollar," "US$" and "$" are to United
States dollars; references to "A$" are to Australian dollars.

On March 20, 1995, the New York foreign exchange selling rate in U.S.
dollars applied to trading among banks in amounts of $1 million or more,
as quoted at 3:00 p.m. Eastern time by Bankers Trust Company, was A$1.00
equals US$.7236.

GLOSSARY OF MINING TERMS

CARBON-IN-LEACH--milling process for the recovery of gold from slurried
ore in a dilute sodium cyanide solution, whereby the gold is dissolved and
adsorbed onto coarse carbon particles and then stripped from the carbon by a
screening process.

CARBON-IN-PULP--milling process for the recovery of precious metals by
adsorption onto activated carbon. The precious metals are recovered from the
enriched carbon by elution and electrolysis.

CONTAINED OUNCES--ounces before allowance for mining dilution and
metallurgical recovery.

CUTOFF GRADE--the lowest grade of mineralized rock that qualifies as ore
grade in a given deposit, or the grade below which the mineralized rock
currently cannot be economically mined. Cutoff grades vary between deposits
depending upon the amenability of ore to gold extraction, costs of production
and assumed gold prices.

DORE--an unrefined alloy of gold, silver and other impurities normally in
the form of bars or buttons.

EQUIVALENT OUNCE OF GOLD--a comparable unit obtained by applying a
silver-to-gold or a copper-to-gold price ratio to the total market value of
silver and copper, respectively, produced during a given period, based on the
Company's average realized prices for each metal during that period.

LEACH--to dissolve minerals or metals out of ore with chemicals. Heap
leaching gold involves the percolation of a cyanide solution either through
crushed ore or ore transported directly from the mine (run-of-mine).

MINING CLAIM--that portion of public mineral lands which a party has
staked or marked out in accordance with federal, provincial or state mining
laws to acquire the right to explore for and exploit the minerals under the
surface.

NET SMELTER RETURN--actual gold and silver sales revenues after customary
deductions for the cost of refining, freight, insurance and taxes.

ORE--material that can be economically mined and processed.

ORE BODY--a deposit of economically recoverable minerals, the extent and
grade of which has been defined through exploration and development work.

ORE RESERVE--that part of a mineral deposit which at the time of the
reserve determination could be economically and legally extracted or produced.

OUNCE OR OZ--a troy ounce.

PATENTED MINING CLAIM--a mining claim with respect to which the U.S.
federal government has granted fee title after fulfillment of the
government's qualifying requirements.

PROBABLE ORE RESERVES--reserves for which quantity and grade and/or
quality are computed from information similar to that used for proven
reserves, but the sites for inspection, sampling and measurement are farther
apart or are otherwise less adequately spaced. The degree of assurance,
although lower than that for proven reserves, is high enough to assume
continuity between points of observation.

PROVEN ORE RESERVES--reserves for which (a) the quantity is computed from
dimensions revealed in outcrops, trenches, workings or drill holes and grade
and/or quality are computed from the results of detailed sampling and (b) the
sites for inspection, sampling and measurements are spaced so closely and the
geologic character is so well defined that size, shape, depth and mineral
content of reserves are well established.

RECLAMATION--the process of restoring mined land to a condition which
allows future beneficial use. Reclamation standards vary widely from
jurisdiction to jurisdiction but usually address ground and surface water,
topsoil, final slope gradients, waste handling and revegetation issues.

STRIPPING RATIO--the ratio of the number of tons of waste to the number of
tons of ore which will be extracted during the excavation of an open pit mine.

SULFIDE--a mineral compound characterized by the presence of sulfur.

TAILING--material rejected from a mill after the recoverable valuable
minerals have been extracted.

TAILINGS FACILITY--natural or man-made area suitable for depositing ground
waste material resulting from the milling and/or processing of ore.

TON--a short ton of 2,000 pounds, dry weight basis.

UNPATENTED MINING CLAIM--those claims, either lode or placer, for which no
patent has been issued. The claim owner has the right to exclusive possession
of the locatable minerals in the area claimed. Such property rights are
subject to the paramount title of the U.S. federal government until a patent
is obtained.

ITEM 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings required to be reported in
response to this item.

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

No matters were submitted during the fourth quarter of 1994 to a vote of
security holders.

EXECUTIVE OFFICERS OF THE REGISTRANT

Listed below are the names and ages as of March 1, 1995, of each of the
present executive officers of the Company together with principal occupations
held by each during the past five years. Executive officers are appointed
annually to serve for the ensuing year or until their successors have been
appointed. No officer is related to any other by blood, marriage or adoption.
No arrangement or understanding exists between any officer and any other
person under which any officer was elected. Messrs. Mazur, Quinn and
Reisbick have been employed with the Company since July 1985.

KARL E. ELERS (56) - Chairman of the Board and Chief Executive
Officer and Director

KENNETH R. WERNEBURG (53) - President and Chief Operating Officer and
Director

ANDRE J. DOUCHANE (44) - Vice President - Operations

JOSEPH L. MAZUR (56) - Vice President - Administration and
Communications

R. DENNIS O'CONNELL (48) - Vice President - Finance and Chief
Financial Officer

ROBERT J. QUINN (39) - Vice President, General Counsel and
Secretary

FRED B. REISBICK (57) - Vice President - Exploration

KARL E. ELERS previously served as President and Chief Operating Officer
of the Company from April 1988 until April 1990. Mr. Elers also serves as a
member of the Executive Committee and of the Environmental Affairs and Ethics
Committee of the Company's Board of Directors.

KENNETH R. WERNEBURG was Executive Vice President of the Company from
November 1989 until April 1990. Prior to joining the Company, Mr. Werneburg
served as Chairman and Chief Executive Officer of Hill Refrigeration
Corporation (commercial refrigeration equipment) since April 1989. From 1985
through 1988, Mr. Werneburg served as Executive Vice President of St. Joe

Minerals Corporation (international mining and manufacturing). Mr. Werneburg
also serves as a member of the Executive Committee of the Company's Board of
Directors.

ANDRE J. DOUCHANE was Manager of North American Operations from July 1991
until April 1992. Prior to joining the Company in July 1991, Mr. Douchane was
employed by Round Mountain Gold Corp. as Vice President and General Manager.

R. DENNIS O'CONNELL was Vice President of the Company from May 1992 until
July 1992 when he was named Vice President - Finance and Chief Financial
Officer. Prior to joining the Company, Mr. O'Connell served as Assistant
Controller, Worldwide Exploration and Production for Marathon Oil Company
since January 1991. From July 1988 through January 1991, Mr. O'Connell served
as Manager, Finance and Administration, Worldwide Production for Marathon Oil
Company. From January 1987 through July 1988, Mr. O'Connell served as
Director, Finance and Administration of Marathon Oil U.K., Ltd.

FRED B. REISBICK previously served as General Manager, North America
Exploration until November 1992.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

PRICE RANGE OF COMMON STOCK
The Company's common stock, par value $0.10 per share (the "Common
Stock"), is traded on the New York Stock Exchange (the "NYSE"), the
Toronto Stock Exchange, the Australian Stock Exchange Limited, the Swiss
Stock Exchanges and the Frankfurt Stock Exchange. The ticker symbol for the
Common Stock on the exchanges is "BMG."

The following table sets forth for the periods indicated the high and low
sales prices for the Common Stock as reported on the NYSE Composite Tape.

High Low
------- -------

1994
First Quarter. . . . . . . . . . . . . . $12 1/8 $10 3/8
Second Quarter . . . . . . . . . . . . . $11 3/8 $ 9 1/8
Third Quarter. . . . . . . . . . . . . . $12 3/4 $ 9 5/8
Fourth Quarter . . . . . . . . . . . . . $12 3/4 $ 9 3/8
1993
First Quarter. . . . . . . . . . . . . . $ 7 1/4 $ 4 7/8
Second Quarter . . . . . . . . . . . . . $10 1/8 $ 6 1/4
Third Quarter. . . . . . . . . . . . . . $11 $ 7 1/4
Fourth Quarter . . . . . . . . . . . . . $10 5/8 $ 8 1/8

As of March 20, 1994, the Company had 21,010 record holders of Common
Stock.

Cash dividends of $0.025 per share were paid in each half of fiscal 1994
and 1993. A determination to pay future dividends and the amount thereof will
be made by the Company's Board of Directors and will depend on the Company's
future earnings, capital requirements, financial condition and other relevant
factors. The Company's ability to pay dividends is subject to certain
restrictions contained in the Company's committed revolving credit facility.
These restrictions are not expected to affect the payment of dividends. For a
further discussion of the credit facility and of restrictions on Inti Raymi's
ability to pay dividends to BMG, see "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Liquidity and Capital
Resources" and Note 10 of Notes to Consolidated Financial Statements under
Item 8 herein. The Company intends to retain most of its earnings to support
current operations, to fund exploration and development projects and to
provide funds for acquiring gold properties.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth certain consolidated financial data for the
respective periods presented and should be read in conjunction with the
Consolidated Financial Statements and the related notes thereto in Item 8 and
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Item 7.

YEAR ENDED DECEMBER 31,
------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(EXPRESSED IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Income Statement Data:
Gross revenue $242,984 $207,251 $192,190 $176,464 $144,504
Less: freight, allowances & royalties 13,314 13,836 10,387 6,222 1,745
Net sales 229,670 193,415 181,803 170,242 142,759
Mining, milling and other direct costs 124,299 128,487 117,350 89,375 59,921
Depreciation, depletion and amortization 51,247 41,389 38,644 28,149 16,979
General and administrative expenses 17,047 17,483 17,948 21,082 18,190
Taxes, other than income 2,593 2,316 3,424 5,071 5,607
Exploration and evaluation 14,542 9,474 17,132 27,390 36,686
Asset write-downs(1) - - 32,600 5,573 -
Operating income (loss) $ 19,942 $ (5,734) $(45,295) $ (6,398) $ 5,376
Income (loss) before cumulative effect of
accounting changes $ 9,572 $ (4,405) $(34,941) $ (1,174) $ 16,043
Cumulative effects of accounting
changes (net of taxes) (2):
Method of accounting for exploration - - - - (33,754)
Postretirement benefits other than
pensions - - (5,342) - -
Income taxes - - 3,880 - -
Net income (loss) 9,572 (4,405) (36,403) (1,174) (17,711)
Preferred dividends 7,475 3,738 - - -
Net income (loss) to common shares $ 2,097 $ (8,143) $(36,403) $ (1,174) $(17,711)
Income (loss) per share before accounting $ .02 $ (.10) $ (.44) $ (.02) $ .21
Cumulative effects of accounting change
(net of taxes) per share (3):
Method of accounting for exploration - - - - (.45)
Postretirement benefits other than
pensions - - (.07) - -
Income taxes - - .05 - -
Net income (loss) per share $ .02 $ (.10) $ (.46) $ (.44) $ (.24)
Cash dividends per common share $ .05 $ .05 $ .10 $ .10 $ .10

AS OF DECEMBER 31,
------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(EXPRESSED IN THOUSANDS)

Balance Sheet Data:
Cash and cash equivalents $ 76,464 $115,338 $ 45,377 $ 28,720 $ 92,820
Working capital $ 96,747 $140,348 $ 35,990 $ 26,070 $ 91,636
Total assets $679,769 $668,152 $577,484 $524,520 $449,187
Long-term debt, less current maturities $165,602 $179,053 $198,593 $125,403 $111,391
Shareholders' equity $375,634 $369,560 $269,779 $314,562 $255,490

<FN>

(1) In 1992, the Company (i) wrote down $17.6 million, net of a $9.1
million income tax benefit, of BMG's investment in the San Luis mine and
(ii) wrote off $4 million, net of a $2 million income tax benefit,
of BMG's investment in the previously closed Canyon Placer facility,
which was abandoned because of gold prices being persistently less
than needed for development. In 1991, the Company wrote down $4.5
million, net of a $1.1 million tax benefit, of BMG's carrying value
in its investment in the San Juan Project in California. In March 1992,
BMG sold its interest in the San Juan Project.

(2) For 1992, includes the Company's adoption of SFAS No. 109, "Accounting
for Income Taxes," and SFAS No. 106, "Employers' Accounting for
Postretirement Benefits other than Pensions" (see Notes 5 and 6 to the
Consolidated Financial Statements, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations").

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table presents results of operations data on a per equivalent
ounce of gold sold basis:

YEAR ENDED DECEMBER 31
------------------------
1994 1993 1992
---- ---- ----

Gross revenue $386 $365 $359
Freight, allowances and royalties $ 21 $ 24 $ 19
Mining, milling and other plant costs $198 $227 $219
Depreciation, depletion and amortization $ 81 $ 73 $ 72

REVENUES

Gross revenue increased in 1994, compared with 1993 and 1992, because of
both increased sales volumes and increased average realized gold prices. The
volume increase came from the Kori Kollo mine in Bolivia, which sold 309,000
gross ounces in 1994 (271,000 ounces net to BMG), compared with 212,000
ounces (180,000 ounces net) in 1993 and 52,000 ounces (44,000 ounces net) in
1992. Sales volumes also increased from the San Cristobal mine in Chile.
Volumes from the Kori Kollo mine increased in 1994 due to a full year of
operation of the new milling facilities, increased recoveries and the
re-treatment of used cathodes by electro-winning. Upgrading of the crushing
facilities at the San Cristobal mine was the main factor contributing to the
increase in that mine's sales volume. These increases were partially offset by a
significant decrease in sales volumes at the Red Dome mine, which was caused
primarily by the majority of the mining efforts being directed at a push back of
the existing mine pit. Additionally, a pit wall slippage delayed startup of
production from the push back of the mine pit and also delayed access to the
higher grade ore. Improved mining operations at the Red Dome mine were achieved
in the fourth quarter of 1994. The Battle Mountain Complex also experienced a
decrease in production volumes compared to 1993 primarily because of the end
of the production cycle at the Basin Leach facility. This decrease in
production was partially offset by production from the start-up of the Reona
Leach facility in October 1994.

SELLING AND OPERATING COSTS

Freight, allowances and royalties decreased in total and on a cost per
equivalent ounce of gold sold basis due to fewer concentrate sales from the
Red Dome mine in 1994. Shipments from the Red Dome mine carry relatively high
freight charges. The freight, allowances and royalties costs were higher in
1993 compared with 1992 because of increased sales from the Kori Kollo mine
and higher freight, allowances and royalty costs associated with new smelting
and refining agreements for Red Dome mine concentrates which resulted in
higher costs per equivalent ounce.

Mining, milling and other plant costs per equivalent ounce of gold sold
decreased in 1994 because of an increased percentage (from approximately 41
percent in 1993 to approximately 52 percent in 1994) of consolidated sales
volumes being derived from the Kori Kollo mine which has lower cash operating
costs per equivalent ounce. Cash operating costs per equivalent ounce of gold
sold at the Kori Kollo mine were lower in 1994 compared with 1993 due to
increased recoveries and the re-treatment of used cathodes by
electro-winning. The San Cristobal mine costs decreased on an equivalent
ounce of gold sold basis due to improved efficiencies resulting from the
addition of more efficient crushing equipment. Lower (per equivalent ounce
sold) cash costs at the Battle Mountain Complex, the San Luis mine and the
Pajingo mine also contributed to the decrease in total mining, milling and
other plant costs on a per ounce and total basis. Higher costs, primarily
associated with the production transition from the Fortitude mine to the Kori
Kollo mine, and higher sales volumes contributed to higher aggregate mining,
milling and other costs in 1993 compared with 1992.

The increase in depreciation, depletion and amortization, in total for
1994 compared with 1993, resulted primarily from increased sales volumes. The
increase on a cost per equivalent ounce of gold sold basis resulted from
higher per equivalent ounce depreciable bases at the new Reona mine and the
expanded Red Dome mine. Depreciation, depletion and amortization expense
increased in 1993 compared with 1992 as a result of the higher capital costs
associated with the Company's newer operations, especially the Kori Kollo
mine, and increases in sales volumes. Increased production and sales volumes,
and the higher acquisition costs of new reserves, will cause depreciation,
depletion and amortization to increase in the future.

Selling and operating costs per equivalent ounce of gold sold are based on
actual sales and include inventoried costs; therefore, these costs are not
directly comparable to production costs per equivalent ounce of gold
disclosed elsewhere in this report.

EXPLORATION COSTS

Exploration and evaluation expenses increased in 1994 compared with 1993
and decreased in 1993 compared with 1992. In 1994, the Company expanded its
exploration efforts in Latin America and the Austral Pacific. Also, it
expanded its exploration efforts around its currently operating mines to
determine the existence of new ore bodies in the vicinity of existing known
reserves. (See "-- Liquidity and Capital Resources -- Investing Activities").

WRITE-DOWNS

The volatility of gold prices requires that the Company, in assessing the
impact of prices on recoverability, exercise judgment as to whether price
levels are temporary or are likely to persist. The Company performs a
comprehensive evaluation of the recoverability of its assets on a periodic
basis to assess the impact of significant changes in market conditions and
other factors.

No write-downs are currently anticipated, and none were recorded in 1994
or 1993. However, asset write-downs may occur if the Company determines that
the carrying values attributed to individual assets are not recoverable given
reasonable expectations for future market

conditions. During 1992, the Company recognized charges totaling
approximately $23.3 million, net of $11.1 million in income tax benefits, for
the impairment in value of certain of the Company's assets. The charges
included: (1) a write-down of $17.6 million, net of a $9.1 million income tax
benefit, of BMG's investment in the San Luis mine in Colorado that reduced
the carrying value of the investment to a level which BMG believed would be
recoverable under then existing and expected future market conditions (lower
gold prices, compared with those at the time of project conception, and
greater than anticipated capital expenditures resulting from a difficult
start-up period led to the write-down), (2) a write-off of $4 million, net of
a $2 million income tax benefit, of BMG's investment in the previously closed
Canyon Placer facility, which was abandoned because of gold prices being
persistently less than needed for development, and (3) an impairment of $1.7
million, included as Other income (expense), net, to adjust to current market
the carrying value of certain marketable equity security investments.

GENERAL AND ADMINISTRATIVE COSTS

The Company's general and administrative costs are presented on a
consolidated basis without reduction for minority interest and include the
following (in thousands):

YEAR ENDED DECEMBER 31,
-------------------------
1994 1993 1992
------- ------- -------

BMG $11,296 $12,248 $12,925
Inti Raymi 3,211 2,800 2,377
Niugini Mining 2,540 2,435 2,646
------- ------- -------
Total $17,047 $17,483 $17,948
======= ======= =======

The Company continues to emphasize controls on these costs and to evaluate
peer group operational and reporting practices. As a result of these
evaluations, management is considering alternative reporting of certain costs
which are directly related to mine site, exploration and capital projects,
but may initially be charged to a general or administrative cost center.

OTHER

Interest income increased in 1994 compared to 1993 primarily due to an
increase in investable cash balances and higher rates. Interest income
increased in 1993 compared to 1992. This increase resulted from greater
levels of cash available for investment arising primarily from the proceeds
of the Company's 1993 convertible preferred stock offering.

Gross interest expense, including amounts capitalized, increased in 1994
compared with 1993 because of generally higher interest rates on Inti Raymi's
variable rate debt which was somewhat offset as described above and from
recoveries under interest rate cap contracts. The increase in interest
expense due to increases in interest rates was partially offset by a decrease
in outstanding debt. Interest expense with respect to borrowings attributable
to any given project in the pre-production stage is capitalized until such
time as that project begins commercial

production. The interest associated with the 6 percent convertible
subordinated debentures has been and continues to be capitalized against the
Lihir project. Interest expense charged against income increased in 1993
compared with 1992 because interest expense related to the Kori Kollo sulfide
project financing ceased to be capitalized since commencement of commercial
operations in February 1993, and because project financing was outstanding
for the entire 1993 year. Prior to 1993, the majority of interest expense was
capitalized and was related primarily to the convertible subordinated
debentures and to amounts outstanding under a committed revolving credit
facility. Should additional borrowings be required to fund acquisitions and
mine development, interest expense would be expected to increase when these
new investments reach the operational stage.

Other expense, net in 1994 was substantially less than Other income, net
in 1993. In 1994, the Company received approximately $.8 million in royalties
from the owner of the Triple P ore deposit at BMG's Plutonic Bore exploration
project in Western Australia which was sold by BMG in 1993 and $.7 million
from the sale of a prospect in Chile. These gains were offset by foreign
currency losses of approximately $1.2 million attributable to Papua New
Guinea Kina cash deposits. Other income, net in 1993 represents an
improvement from Other expense, net in 1992. The 1993 income resulted
primarily from gains of $3.7 million from the sale of the Triple P ore
deposit and $2 million from the sale of certain long-term investments.

The Company's effective income tax rate was 21 percent for the year ended
December 31, 1994, compared with an income tax benefit rate of 48 percent for
the year ended December 31, 1993. The effective income tax rate of 1994 has
been influenced by a reduction in the Company's deferred tax valuation
allowance. The Company has determined that it is more likely than not that
additional deferred tax benefits will be realized as a result of the
Company's profitability in 1994 which has created additional taxable
temporary differences.

Income tax expense in 1994 resulted primarily from the accrual of
withholding taxes on earnings from the Company's majority owned subsidiary
Inti Raymi. The income tax benefit in 1993 resulted from the net operating
loss generated in 1993.

Minority interest in net income decreased in 1994 compared with 1993 and
increased in 1993 compared with 1992 as a result of the changes in the
ownership interests in the Company's majority owned subsidiaries and the
results of their operations. The Company's interest in Inti Raymi increased
from 85 percent to 88 percent in 1994 and its interest in Niugini Mining
decreased slightly, from 52.6 percent to 51.4 percent. The decrease in
Minority interest in net income in 1994 resulted from BMG's calculation,
under U.S. GAAP, of net losses incurred by Niugini Mining compared with net
income from Niugini Mining in 1993. Minority interest in net income increased
substantially in 1993 compared with 1992 because of a substantial increase in
profits from Inti Raymi.

Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes," and
SFAS No. 106, "Employer's Accounting for Postretirement Benefits other than
Pensions." (See Notes 5 and 6 to the Consolidated Financial Statements.) For
1992, the Company's Consolidated Statement of

Income reflects a credit of $3.9 million and an accrued charge of $5.3
million (net of $1.4 million in income tax benefits) representing the
cumulative prior periods' effects of the adoption of these standards.

NET INCOME

The Company generated net income in 1994 primarily because of the
increased profitability of its Kori Kollo mine in Bolivia and higher actual
and realized gold, silver and copper prices. Production increases and
decreased operating costs per equivalent ounce of gold were the main factors
contributing to Kori Kollo's profitability.

During 1993, the Company completed the transition of its primary
production stream from the Fortitude mine in Nevada to the Kori Kollo mine in
Bolivia. As expected, there was little change in the Company's total gold
production during this transition period. However, increased costs related to
the transition to a lower grade ore body at the Battle Mountain Complex and
lower than anticipated production levels from the heap leach operations at
the Battle Mountain Complex and the San Cristobal mine resulted in an
increase in total operating costs per equivalent ounce of gold sold for 1993.
These factors all contributed to the net loss incurred by the Company in 1993.

In 1992, the Company increased its gold production as it realized the
first full year of production from three new mines: the San Luis mine in
Colorado, the San Cristobal mine in Chile and the Red Dome mine in Australia.
For 1992, the Company reported a net loss as a result of weak gold prices,
impairment in value of the Company's San Luis mine and the Canyon Placer
facility in Nevada and higher operating costs associated with its new
lower-grade mines. In particular, the San Luis mine experienced an extended
period of start-up difficulties.

LIQUIDITY AND CAPITAL RESOURCES

SUMMARY

At December 31, 1994, the Company had cash and cash equivalents of $76.5
million, of which $21.2 million was held by BMG, $39.9 million was held by
Niugini Mining, and $15.4 million was held by Inti Raymi.

OPERATING ACTIVITIES

The Company generated cash flow of $89.7 million, $30.1 million and $41.5
million from operating activities for the years ended December 31, 1994, 1993
and 1992, respectively. The increase in cash flow from operating activities
in 1994 compared with 1993 resulted primarily from the increased revenues of
the Company. Also, the recovery of approximately $8.1 million of refundable
value added taxes from the Bolivian government related to the construction of
the Kori Kollo sulfide mining facilities contributed to the increase in cash
flow from operations. The increase in cash flow from operations was partially
offset by increased

product inventories and materials and supplies inventories of $4.5 million
and $4.6 million, respectively, in 1994. The increase in product inventories
is primarily attributable to the accumulating of gold, silver and copper
concentrates from the Red Dome mine in Australia. Since these products are
shipped overseas, the Company realizes significant savings by shipping this
product in large quantities. The Red Dome mine produces sufficient quantities
to allow for approximately 4 or 5 shipments annually. Inventories of
materials and supplies continue to increase at the expanding Kori Kollo mine
in Bolivia due to increases in the cost and quantities of the materials which
must be retained at the mine due to its remote location.

INVESTING ACTIVITIES

Cash used for investing activities increased to $107.3 million in 1994
compared with $60.3 million in 1993 and $103.5 million in 1992. Capital and
exploration expenditures were the most significant components of cash flows
used for investing activities. The Company expended approximately $21.9
million on completion of the development of the Reona mine, approximately
$15.0 million on completion of the expansion of the Red Dome mine,
approximately $27.0 million for capital expansion and improvements at the
Kori Kollo mine and approximately $7.9 million, including $6.0 million of
capitalized interest, for development of the Lihir prospect during 1994.

The Reona project contains reserves of approximately 350,000 ounces of
gold in the Copper Canyon area of the Battle Mountain Complex. The total cost
of developing this project was approximately $24.0 million. The cost of the
project was greater than originally estimated because of delays in the
permitting process and the establishment of a more aggressive completion
schedule to make up for these delays. Also, certain pre-production costs were
not included in the original cost estimate.

Niugini Mining has completed the expansion of the existing Red Dome pit.
The total cost of this expansion project was $34 million. Total costs
exceeded previous estimates primarily due to corrections of problems related
to an unexpected pit wall slippage. The expansion is expected to extend the
life of the mine through 1996.

Inti Raymi is implementing a $25.5 million capital expansion program at
the Kori Kollo mine. The capital program includes the construction of a
recovery enhancement system designed to increase recovery rates from 69
percent to approximately 77 percent. The program also includes a new tailings
treatment facility and the acquisition of additional haul trucks. Completion
of the enhanced recovery and tailings treatment facilities is expected
approximately around the end of the first quarter of 1995. Inti Raymi is
using cash generated from operations to fund these projects.

The Company has included $100.7 million for capital expenditures,
including $7.4 million for the Crown Jewel project, in its 1995 business
plan. The plan includes $67.3 million for the acquisition by Niugini Mining
of an additional joint venture interest in the Lihir project and additional
pre-development costs of this project. These expenditures are expected to be
funded from Niugini Mining's working capital, other available facilities and
possibly other alternative means of financing. Of the total 1995 projected
expenditures, 14 percent is expected to be spent

in North America, 15 percent in Latin America, one percent in Australia and
70 percent in various countries by Niugini Mining.

PHOENIX PROJECT - BMG has announced its decision to develop the Phoenix
project, subject to permitting. The project includes the construction of a
milling facility and is located in the Copper Canyon area of the Battle
Mountain Complex. The cost of developing the project is estimated to be
approximately $87 million, of which $2.2 million has been spent through
December 31, 1994. The project contains reserves of approximately 28.8
million tons of millable ore at an average ore grade of .043 ounces of gold
per ton, and 8.9 million tons of heap leach ore with an average grade of .028
ounces of gold per ton, for a total of approximately 1.5 million contained
ounces of gold. The project also includes approximately 8.8 million contained
ounces of silver. The reserves were determined using cutoff grades ranging
from .010 to .025 ounces of gold per ton and an assumed gold price of $375
per ounce. The estimated recovery factor was approximately 85 percent for the
mill ore and 65 percent for the leach ore.

CROWN JEWEL PROJECT - BMG is continuing to seek permits for the Crown
Jewel project in Washington state. BMG expects to construct a 3,000 ton per
day milling facility with start-up possible in the spring of 1997, depending
on the length of the permitting process, including the acquisition of water
rights, the effect of possible legal challenges by project opponents and the
potential impact of newly enacted and proposed legislation to amend or
replace state and federal laws and regulations affecting mining projects. The
delays in obtaining permits for the Crown Jewel project to date relate
primarily to delays in regulatory approvals for certain site data collection
activities, the time taken for agency development of certain wildlife studies
and the time taken by the agencies to prepare the draft Environmental Impact
Statement.

In March 1994, an arbitrator held that BMG was entitled, under "force
majeure" provisions of BMG's joint venture agreement covering its Crown Jewel
project, to suspend quarterly payments of $1 million to its co-venturer for
the third and fourth quarters of 1993 because of delays in the permitting
process. In May 1994, BMG announced that it had resolved outstanding
contractual issues with the co-venturer, including all issues relating to
BMG's obligation to subsequently make such quarterly $1 million payments. As
part of its agreement to resolve these issues, BMG acquired the right to earn
an additional 3 percent joint venture interest in the Crown Jewel project.
The consideration paid by BMG to the co-venturer was $4.25 million in cash
and 435,897 shares of BMG common stock. As a result of this agreement, BMG
has the right to earn a 54 percent interest in the project, and the joint
venture agreement has been amended to delete the terms requiring $1 million
quarterly payments to the co-venturer. The 3 percent additional interest will
apply only until the joint venture recovers the currently identified gold
reserve of 1.5 million ounces of gold from the project at which time BMG's
interest will be reduced to 51 percent.

To earn the 54 percent ownership interest in the Crown Jewel project, BMG
will have to fund all expenditures for exploration, evaluation and
development of the project through commencement of commercial production. The
minority partner will not reimburse BMG for any portion of funding provided
through the commencement of commercial production. These expenditures, plus
acquisition costs, are currently estimated to be approximately $108
million, of which, as of December 31, 1994, $47.6 million ($39.3 million of
which has been capitalized) has been

incurred. The current estimate and the expenditures to date include
approximately $8.5 million related to the acquisition of the additional 3
percent interest in the project and the resolution of certain contractual
issues. Management expects that BMG should be able to recover more than its
total investment in the project from its 54 percent interest in the project's
operating cash flows based on current market conditions and current
expectations of the timing to obtain permitting.

LIHIR PROJECT - BMG holds an interest in the Lihir project through its
51.4 percent ownership of Niugini Mining. Niugini Mining's ownership interest
in the Lihir project is in a state of transition as explained below. Niugini
Mining's ownership interest is subject to a joint venture agreement with a
subsidiary of RTZ Corporation plc ("RTZ") and the Mineral Resources Lihir Pty.
Ltd., a wholly-owned entity of the PNG government.

On March 17, 1995, the Special Mining Lease (the "SML") for the Lihir
project was executed by the PNG government. The SML provides Niugini Mining,
RTZ and the PNG government, as joint venture partners, the right to develop
and operate the Lihir gold project. The Lihir Island landowners have reached
substantial agreement with the Lihir joint venture for the landowners' ongoing
compensation, social well-being from development of the mine and eventual
participation in the project. Formal execution of agreements with the
landowners is expected to take place in the near future.

Upon execution of the agreements with the landowners, Niugini Mining will
acquire an additional 16 percent of the Lihir joint venture for $3 million
cash per percentage point, or $48 million. In connection with the execution
of the SML, the PNG government acquired a 30 percent joint venture interest,
pro rata from RTZ and Niugini Mining. Following the acquisition of the
interest by the government and consummation of Niugini Mining's purchase of
the additional interest from RTZ, Niugini Mining will have a 30 percent
interest in the project and another subsidiary of RTZ will retain a 40 percent
interest.

Niugini Mining, RTZ and the PNG government have signed other agreements
which will govern the ownership of the project and provide the legal and
financial framework for the development and operation of the Lihir mine. The
parties have formed a new company named Lihir Gold Limited ("LGL") for the
ownership and development of the Lihir project. The new company will be
owned 30 percent by Niugini Mining, 40 percent by the subsidiary of RTZ and 30
percent by the PNG government. Related to this restructuring, the carried
interest arrangement between Niugini Mining and RTZ will terminate with no
further rights or obligations continuing to either party. LGL will enter into a
management contract with Lihir Management Company Pty. Ltd., a wholly-owned
subsidiary of RTZ ("LMC"), whereby LMC will manage the administration,
financing, construction and subsequent operation of the project. The project is
expected to be partially funded through the offering of the equity of LGL
common stock to the public at a price yet to be determined. Niugini Mining's
interest in LGL will thereby be proportionately reduced depending on the
number of shares issued. Additional funding required for the project is expected
to be provided in the form of debt financing by LGL.

The capital costs for the Lihir project are presently estimated by the
manager of the project at $671 million. The capital cost increase takes into
account inflation due to delays in the

issuance of the SML and exchange rate variations that have occurred since
the last estimate was compiled. Over the first 15 years of operations, the
manager's estimate of total cash operating costs, which exclude royalties and
sales costs, is $199 per ounce. The estimate of minable sulfide reserves is
114.6 million tons, or 14.6 million contained gold ounces, with the average
grade of .13 ounces of gold per ton.

As of December 31, 1994, the carrying value of the Company's investment in
the Lihir project was approximately $135.9 million. If the Lihir project does
not proceed as contemplated, the Company may be required to write down part
or all of its investment in the Lihir project.

CINDY PROJECT - In Queensland, Australia, BMG is proceeding with the $4.3
million development of the Cindy ore deposit, containing approximately 42,500
ounces of gold. Through December 31, 1994, $3.0 million has been spent on
this development project. Ore from the Cindy deposit is to be processed at
the existing Pajingo milling facility beginning in June 1995 and is expected
to extend the productive life of the Pajingo property to June 1996. The cost
of this project has increased because of the inclusion of certain
pre-operating mining costs that had not been previously included in the cost
estimate.

The Company currently estimates that it will spend approximately $14.5
million on its 1995 exploration programs to identify potential additional
mineral deposits. Of this amount, 17 percent is budgeted to be spent in North
America, 23 percent in Latin America, 37 percent in Australia and the South
Pacific and 19 percent in various countries by Niugini Mining. Four percent of
the budgeted amount is as yet undesignated. During 1994, the Company spent
approximately $15.0 million on exploration and evaluation activities and related
capital expenditures.

FINANCING ACTIVITIES

BMG can borrow funds under a committed revolving credit agreement, which
is scheduled to expire on December 31, 1996. Scheduled $9.4 million quarterly
reductions in commitments under the agreement began on March 31, 1993, and
will continue until the agreement expires. As of December 31, 1994, the
remaining availability under this agreement was $84.4 million. This agreement
contains certain financial covenants as well as restrictions on dispositions
of major assets and the payment of dividends. These restrictions are not
expected to affect planned operations. BMG may borrow an additional $15
million through a separate uncommitted revolving credit facility. As of
December 31, 1994, no borrowings were outstanding under either of these
facilities; however, letters of credit amounting to approximately $4.8
million had been issued against the uncommitted facility. The Company is
currently evaluating proposals from certain banks to revise or replace the
committed revolving credit agreement.

BMG's majority owned Bolivian subsidiary, Inti Raymi, has borrowed funds
from three international agencies, the Overseas Private Investment
Corporation (OPIC) ($40 million), the International Finance Corporation (IFC)
($40 million) and the Corporacion Andina de

Fomento (CAF) ($15 million) under three separate but coordinated financing
facilities. These facilities provided most of the funding necessary for the
development of the Kori Kollo mine. Each of these facilities imposes
restrictions on dividend payments and loan repayments by Inti Raymi to its
shareholders, and limits additional fixed asset purchases or dispositions,
debt and liens. As of February 17, 1995, Inti Raymi owed an aggregate of
$79.0 million under these facilities. This amount includes $3.2 million
previously owed by Inti Raymi to OPIC. The IFC facility includes a $5 million
convertible loan payable on March 1, 2002, which may be converted at any
time, at IFC's option, into a 3.98 percent ownership interest in Inti Raymi.
Other than the convertible portion, loans under the facilities are to be
repaid in semi-annual installments which commenced in December 1993 and will
continue through June 2000. Certain prepayments would be required in the
event of substantial Kori Kollo reserve losses or significantly improved gold
prices.

In 1994, Inti Raymi successfully obtained lender acceptance of project
completion status under the Kori Kollo project financing agreements.
Accordingly, BMG is no longer required to provide financial support to Inti
Raymi under the terms of these agreements. Subject to other restrictions in
the financing agreements and general operating needs, Inti Raymi may
generally pay dividends up to the amount of Inti Raymi's net income for the
preceding fiscal year, which ends September 30. In 1994, Inti Raymi paid
dividends of $8.1 million to its shareholders ($7.1 million to BMG).
Currently, Inti Raymi has elected to retain the majority of fiscal 1994
earnings in order to fund its $25.5 million capital expansion program (See
"-Liquidity and Capital Resources - Investing Activities").

The Company does not expect Niugini Mining to pay dividends currently
because of Niugini Mining's other business commitments and plans for its
working capital as previously discussed.

BMG has effective a registration statement under the Securities Act of
1933 for what is commonly referred to as a "universal shelf" filing covering
up to $200 million of its debt securities, preferred stock, depository
shares, common shares and warrants, which BMG may elect to offer from time to
time and in any combination. BMG has no current plans to issue securities
under this registration statement.

CONCLUSION

The Company expects the cash currently held along with cash flows from
operations and financing facilities currently in place, to be adequate to
meet its cash needs at least through the end of 1995. Funding may also be
provided from offerings of additional securities under the Company's $200
million universal shelf registration statement, assuming any such offering
could be completed under satisfactory terms or possibly other alternative
means of financing.

GOVERNMENT REGULATION

All of the Company's mining and processing operations are subject to
reclamation requirements. The Company believes it is making sufficient
accruals for known reclamation obligations. Such accruals, amounting to an
aggregate of $10.7 million at December 31, 1994, are included as long-term
liabilities in the Company's consolidated balance sheet. At the Battle
Mountain Complex, aggregate reclamation expenditures required to be spent in
the area are expected to amount to approximately $7.7 million, of which $3.1
million remained accrued at December 31, 1994. Estimated reclamation
obligations and related amounts accrued as of December 31, 1994,
respectively, for each of the Company's other operating mines are as follows:
San Luis $3.3 million and $1.4 million, Pajingo $2.6 million and $1.5
million, Kori Kollo $10.0 million and $1.1 million, Red Dome $4.4 million and
$3.8 million. Reclamation expenditures for the Company's San Cristobal mine
are not expected to be material.

BMG has been issued a water pollution control permit for the Battle
Mountain Complex project facilities from the Nevada Division of Environmental
Protection. This permit was amended in 1994 to include the Reona operations.
BMG has also received a stormwater discharge permit covering the Battle
Mountain Complex area. BMG has applied for a reclamation permit covering the
Battle Mountain Complex area which is currently under review. Activity
expected to be performed as part of the development and operation of the
Phoenix Project would eliminate certain possible reclamation costs. If this
project does not proceed, reclamation expenditures would be expected to be up
to $3 million higher than current estimates. BMG is currently conducting
further site characterization studies for the Battle Mountain Complex area
and is communicating with the Nevada Division of Environmental Protection to
determine the ultimate permit requirements. Potentially adverse site
characterization results or the imposition by regulatory authorities of
unanticipated reclamation standards could substantially increase future
reclamation requirements and expenditures. Laws and regulations applicable to
these permits have been amended during the past few years, and it is
difficult to ascertain the exact terms and conditions which will be required
thereunder. Based on data collected to date, management has not identified
any adverse site characterization results that are expected to have a
material adverse effect on the Company's financial condition. Reclamation
obligations could also be impacted by proposed federal legislation to amend
or replace the General Mining Law.

The Company's Crown Jewel, Phoenix and Lihir development projects are
dependent upon securing requisite permits and approvals and the impacts of
legal challenges. Although the Company believes the requisite permits and
approvals for its development properties can be obtained in due course, the
requisite permitting efforts are complex, time consuming and subject to legal
challenge. At this time, the Company does not believe that the impact of
existing permitting requirements or existing environmental laws and
regulations will have a material adverse effect on the Company's business,
financial condition or results of operations. There can be no assurance that
future changes in laws and regulations and legal challenges to regulatory
actions would not result in additional expense, capital expenditures,
restrictions and delays associated with the development and operation of the
Company's properties.

Legislative amendment or replacement of the General Mining Law under which
the Company holds claims on public lands could take place in 1995. Such
legislation could result in

new environmental standards, additional reclamation requirements and new
procedural steps which could result in delays and additional expenditures for
all phases of mining activity. Such legislation could also impose a royalty.
Approximately 40 percent of the Reona reserves, 23 percent of Phoenix project
reserves and 80 percent of the Crown Jewel ore body are on public lands and
could be subject to a royalty. These projects, as well as reclamation and
closure activities at the Battle Mountain Complex, could be subject to
additional permitting and environmental requirements. The Company has applied
for mineral surveys for the claims constituting the unpatented portion of the
Reona reserves. The Company has applied for patents covering the unpatented
portion of the Crown Jewel ore body but has not yet received the "first half" of
the final certificate. The extent to which existing law might change is not yet
known. The Company cannot yet predict the impact of any such change on its U.S.
activities. However, the passage of legislation that can be reasonably
anticipated is not expected to render uneconomic any of the Company's existing
operating mines or development projects, assuming current gold prices.

In Bolivia, new environmental regulations are being developed to implement
federal legislation passed in 1992. Various versions of the proposed
regulations are currently being reviewed by several governmental agencies and
final regulations are expected by mid-1995. The new regulations will
generally require the preparation of environmental impact studies, set air
and water discharge standards and provide protocols for dealing with
hazardous substances. Such regulations could result in new environmental
standards and requirements for the Company's Kori Kollo project which, in
turn, could require additional expenditures and changes in operations. At
this time, the Company is not able to determine the impact of these
anticipated regulations, but does not anticipate that such regulations will
have a material impact on the Company's financial condition or results of
operations.

FORWARD SALES AND HEDGING

The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes. They are used to
manage well-defined interest rate and commodity price risks.

Interest rate cap agreements are used to reduce the potential impact of
increases in interest rates on floating-rate long-term debt. At December 31,
1994, Inti Raymi was party to three interest rate cap agreements, each with a
term of three years. The agreements entitle Inti Raymi to receive from
counterparties on a quarterly basis the amounts, if any, by which Inti
Raymi's interest payments on a portion of its LIBOR based floating-rate Kori
Kollo project financing exceed various fixed rates over the term of the caps.
The fixed rates in the cap agreements gradually escalate from 4.5 percent in
1994 to 7.2 percent in 1997. Currently, Inti Raymi has hedged approximately
50 percent of its net interest rate exposure related to the Kori Kollo
project financing. The hedge increases to 100 percent of its exposure by June
1996. Inti Raymi has not hedged any of its exposure subsequent to December
1997. The net unamortized cost of the premiums paid for these caps, amounting
to $.7 million at December 31, 1994, has been included in other assets.

The Company uses fixed forward sales contracts, spot deferred sales
contracts and put options to hedge anticipated sales of gold, silver and
copper. The following table summarizes the Company's contracts at December 31,
1994:

Average Price
Per Unit Period
------------- ------

BMG
Spot deferred sales contracts 145,000 oz. gold US$382 Jun 95 - Nov 95

Niugini Mining
Spot deferred sales contracts 30,000 oz. gold US$388 Jan 95
7,000 oz. gold A$501 Jan 95
91,000 oz. silver US$5.67 Jan 95

Fixed forward sales contracts 164,000 oz. gold A$505 Jan 95 - Dec 96
165,000 oz. silver US$5.67 Jan 95
750 tonnes copper US$2,756 Feb 95

Inti Raymi
Spot deferred sales contracts 98,500 oz. gold US$378 Jan 95 - Apr 95

Deferred costs associated with forward sales contracts amounted to $1.5
million at December 31, 1994 and 1993. There were no deferred costs
associated with put options at December 31, 1994. Deferred costs associated
with put options amounted to $.6 million at December 31, 1993.

At December 31, 1994, in the aggregate, the Company's forward sales
contracts were approximately at market based on the then current spot price
of $381 per ounce and an exchange rate of US$.77 to A$1.

The Company is exposed to credit-related losses in the event of
nonperformance by the counterparties to its interest rate caps and forward
sales contracts, but does not expect any counterparties to fail to meet their
obligations. The Company does not obtain collateral or other security to
support financial instruments subject to credit risk but monitors the credit
standing of counterparties.

In future periods, the Company may continue to employ selective hedging
strategies, where appropriate, to protect cash flow for specific needs.

FOREIGN OPERATIONS

The Company continues to expand and geographically diversify its resource
base through the exploration, acquisition, development and exploitation of
foreign gold reserves. The Company's identifiable assets attributable to
foreign operations as of December 31, 1994, were

approximately $474 million and foreign operations represented approximately
81 percent of the total gross revenues of the Company for the year ended
December 31, 1994. As a result, the Company is exposed to risks normally
associated with foreign operations, including political, economic, social and
labor instabilities, as well as foreign exchange controls and currency
fluctuations. Foreign operations and investments may also be subject to laws
and policies of the United States affecting foreign trade, investment and
taxation which could affect the conduct or profitability of those operations.

INFLATION AND CHANGING PRICES

Gold production costs and corporate expenses are subject to normal
inflationary pressures, which, to date, have not had a significant impact on
the Company. The Company's results of operations and cash flows are affected
by fluctuations in the market prices of gold, silver and copper, and to a
lesser extent by changes in foreign currency exchange rates.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE
----

Reports of Independent Public Accountants........................... 58

Consolidated Statement of Income.................................... 61

Consolidated Balance Sheet.......................................... 62

Consolidated Statement of Shareholders' Equity...................... 63

Consolidated Statement of Cash Flows................................ 64

Notes to Consolidated Financial Statements.......................... 65

Supplemental Financial Information (Unaudited)...................... 89

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Battle Mountain Gold Company:

We have audited the accompanying consolidated balance sheets of Battle Mountain
Gold Company (a Nevada corporation) and subsidiaries as of December 31, 1994 and
1993, and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1994. These consolidated financial statements and the schedule referred to
below are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and schedule based on our
audits. We did not audit the financial statements of Niugini Mining Limited and
subsidiaries, which statements reflect assets and net sales of 18 percent and
23 percent in 1994, 17 percent and 29 percent in 1993 and 15 percent and
35 percent in 1992, respectively, of the consolidated totals. Those statements
were audited by other auditors whose report has been furnished to us and our
opinion, insofar as it relates to the amounts included for those entities, is
based solely on the report of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of other auditors provide a reasonable
basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Battle Mountain Gold Company and
subsidiaries as of December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.

As explained in Note 5 to the consolidated financial statements, effective
January 1, 1992, the Company changed its method of accounting for income taxes
with the adoption of Financial Accounting Standards Board Statement No. 109,
"Accounting for Income Taxes." Also, as explained in Note 6 to the consolidated
financial statements, effective January 1, 1992, the Company changed its method
of accounting for postretirement benefits other than pension plans with the
adoption of Financial Accounting Standards Board Statement No. 106, "Employers'
Accounting for Postretirement Benefits other than Pensions."

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The financial statement schedule listed
in Item 14(a)(2) is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not a required part of the basic financial
statements. This financial statement schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, based on our audits and the report of other auditors,
fairly state in all material respects the financial data required to be set
forth therein in relation to the basic financial statements taken as a
whole.

ARTHUR ANDERSEN LLP

Houston, Texas
February 17, 1995

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Battle Mountain Gold Company and the Board of Niugini Mining
Limited:

We have audited the consolidated balance sheet of Niugini Mining Limited (a
company incorporated in Papua New Guinea) and subsidiaries as of December 31,
1994 and 1993, and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1994 and the consolidated financial statement schedules
which are not presented separately in the Battle Mountain Gold Company
December 31, 1994 Form 10-K. Battle Mountain Gold Company is the Company's
majority shareholder. Those financial statements and the financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on those financial statements and
financial statement schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Niugini Mining
Limited and subsidiaries as of December 31, 1994 and 1993, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994, in conformity with
generally accepted accounting principles. In addition, in our opinion, the
financial statement schedules referred to above, when considered in relation
to the basic financial statements taken as a whole, present fairly, in all
material respects, the information required to be included therein.

COOPERS & LYBRAND

Sydney, Australia
January 31, 1995

BATTLE MOUNTAIN GOLD COMPANY
CONSOLIDATED STATEMENT OF INCOME

YEAR ENDED DECEMBER 31,
---------------------------
1994 1993 1992
-------- -------- --------
(EXPRESSED IN THOUSANDS
EXCEPT PER SHARE AMOUNTS)

GROSS REVENUE $242,984 $207,251 $192,190
Less: freight, allowances and royalties 13,314 13,836 10,387
-------- -------- --------
NET SALES 229,670 193,415 181,803
-------- -------- --------
COSTS AND EXPENSES
Mining costs 30,404 35,906 38,802
Milling and other plant costs 93,895 92,581 78,548
Depreciation, depletion and amortization 51,247 41,389 38,644
Exploration, evaluation and other lease costs 14,542 9,474 17,132
Asset write-downs - - 32,600
General and administrative expenses 17,047 17,483 17,948
Taxes, other than income 2,593 2,316 3,424
-------- -------- --------
Total costs and expenses 209,728 199,149 227,098

OPERATING INCOME(LOSS) 19,942 (5,734) (45,295)
Interest income 4,149 2,689 1,831
Interest (expense) (13,722) (13,103) (10,260)
Interest capitalized 6,353 6,655 8,885
Other income (expense), net (244) 5,708 (1,161)
-------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY
INTEREST 16,478 (3,785) (46,000)
Income tax expense (benefit) 2,519 (4,089) (12,241)
Minority interest in net (income) loss (4,387) (4,709) (1,182)
-------- -------- --------
INCOME (LOSS) BEFORE CUMULATIVE EFFECTS OF ACCOUNTING
CHANGES 9,572 (4,405) (34,941)

CUMULATIVE EFFECTS OF ACCOUNTING CHANGES (net of taxes):
Postretirement benefits other than pensions (SFAS 106) - - (5,342)
Income taxes (SFAS109) - - 3,880
-------- -------- --------
NET INCOME(LOSS) 9,572 (4,405) (36,403)
Preferred dividends 7,475 3,738 -
-------- -------- --------
NET INCOME(LOSS) TO COMMON SHARES $ 2,097 $ (8,143) $(36,403)
======== ======== ========

NET INCOME(LOSS) PER SHARE:
Income(loss) before cumulative effects of accounting
changes $ .02 $ (.10) $ (.44)
Cumulative effects of accounting changes (net of
taxes):
Postretirement benefits other than pensions - - (.07)
Income taxes - - .05
-------- -------- --------
Net income(loss) $ .02 $ (.10) $ (.46)
======== ======== ========

DIVIDENDS PER COMMON SHARE $ .05 $ .05 $ .10

AVERAGE COMMON SHARES OUTSTANDING FOR INCOME PER
SHARE PURPOSES 86,071 80,132 79,917

The accompanying notes are an integral part of these financial statements.

BATTLE MOUNTAIN GOLD COMPANY
CONSOLIDATED BALANCE SHEET

December 31,
------------------------
1994 1993
----------- -----------
(Expressed in thousands)

ASSETS
Current Assets:
Cash and cash equivalents $ 76,464 $ 115,338
Accounts receivable 22,810 37,349
Inventories 5,048 1,068
Materials and supplies, at average cost 27,730 22,916
Other current assets 7,014 3,949
----------- -----------
Total Current Assets 139,066 180,620
----------- -----------
Investments 43,405 28,111
Property, Plant and Equipment, at Cost:
Leasehold and mine development 132,658 109,450
Mining, milling and other equipment 320,695 285,405
Other 283,304 249,633
----------- -----------
Total Property, Plant and Equipment 736,657 644,488
----------- -----------
Less accumulated depreciation, depletion and amortization 245,256 191,246
----------- -----------
Property, Plant and Equipment, net 491,401 453,242
----------- -----------
Other Assets 5,897 66,179
----------- -----------
Total Assets $ 679,769 $ 668,152
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ 13,427 $ 13,431
Accounts payable 14,527 13,171
Payroll and related benefits accrued 4,226 2,354
Accrued interest 6,714 6,527
Other current liabilities 3,425 4,789
----------- -----------
Total Current Liabilities 42,319 40,272
----------- -----------
Long-term Debt 165,602 179,053
Other Liabilities 32,043 24,607
----------- -----------
Total Liabilities 239,964 243,932
----------- -----------
Minority Interest 64,171 54,660
----------- -----------
Commitments and Contingencies (Note 13) -- --
Shareholders' Equity:
Preferred stock, $1.00 par value; 20,000,000 shares
authorized, 2,299,980 and 2,300,000 issued and outstanding at December 31, 1994
and 1993, respectively 110,578 110,579
Common stock, $.10 par value; 200,000,000 shares
authorized, 80,934,793 and 80,266,114 shares issued
and outstanding at December 31, 1994 and
1993, respectively 8,094 8,027
Additional paid-in capital 206,735 202,011
Retained earnings 50,327 52,260
Cumulative foreign currency translation adjustment (100) (3,317)
----------- -----------
Total Shareholders' Equity 375,634 369,560
----------- -----------
Total Liabilities and Shareholders' Equity $ 679,769 $ 668,152
----------- -----------
----------- -----------

The accompanying notes are an integral part of these financial statements.

BATTLE MOUNTAIN GOLD COMPANY
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

Year Ended December 31,
-----------------------------------------------------------------------------------------
1994 1993 1992
------------------------------------- ------------------------------------- -----------
Preferred Common Preferred Common Common
Shares Shares Amount Shares Shares Amount Shares
----------- ----------- ----------- ----------- ----------- ----------- -----------
(Expressed in thousands)

COMMON STOCK, $.10 par value;
Authorized 200,000,000
shares:
Balance January 1 -- 80,266 $ 8,027 -- 80,016 $ 8,002 79,801
Shares issued -- 669 67 -- 250 25 215
----- ----------- ----------- ----- ----------- ----------- -----------
Balance December 31 -- 80,935 8,094 -- 80,266 8,027 80,016
----- ----------- ----------- ----- ----------- ----------- -----------
ADDITIONAL PAID-IN CAPITAL:
Balance January 1 -- -- 202,011 -- -- 202,417 --
Shares issued -- -- 5,933 -- -- 1,732 --
Exercise of NML options -- -- (1,209) -- -- -- --
NML equity offering -- -- -- -- -- (2,138) --
----- ----------- ----------- ----- ----------- ----------- -----------
Balance December 31 -- -- 206,735 -- -- 202,011 --
----- ----------- ----------- ----- ----------- ----------- -----------
PREFERRED STOCK, $1.00 par
value;
Authorized 20,000,000
shares;
$50.00 liquidation
preference
per share:
Balance January 1 2,300 -- 110,579 -- -- -- --
Shares issued -- -- -- 2,300 -- 110,579 --
Shares converted to Common -- -- (1) -- -- -- --
----- ----------- ----------- ----- ----------- ----------- -----------
Balance December 31 2,300 -- 110,578 2,300 -- 110,579 --
----- ----------- ----------- ----- ----------- ----------- -----------
RETAINED EARNINGS:
Balance January 1 -- -- 52,260 -- -- 62,410 --
Net income (loss) -- -- 9,572 -- -- (4,405) --
Common stock dividends -- -- (4,030) -- -- (2,007) --
Preferred stock dividends -- -- (7,475) -- -- (3,738) --
----- ----------- ----------- ----- ----------- ----------- -----------
Balance December 31 -- -- 50,327 -- -- 52,260 --
----- ----------- ----------- ----- ----------- ----------- -----------
CUMULATIVE FOREIGN CURRENCY
TRANSLATION ADJUSTMENT -- -- (100) -- -- (3,317) --
----- ----------- ----------- ----- ----------- ----------- -----------
TOTAL SHAREHOLDERS' EQUITY 2,300 80,935 $ 375,634 2,300 80,266 $ 369,560 80,016
----- ----------- ----------- ----- ----------- ----------- -----------
----- ----------- ----------- ----- ----------- ----------- -----------

Amount
-----------

COMMON STOCK, $.10 par value;
Authorized 200,000,000
shares:
Balance January 1 $ 7,980
Shares issued 22
-----------
Balance December 31 8,002
-----------
ADDITIONAL PAID-IN CAPITAL:
Balance January 1 200,921
Shares issued 1,496
Exercise of NML options --
NML equity offering --
-----------
Balance December 31 202,417
-----------
PREFERRED STOCK, $1.00 par
value;
Authorized 20,000,000
shares;
$50.00 liquidation
preference
per share:
Balance January 1 --
Shares issued --
Shares converted to Common --
-----------
Balance December 31 --
-----------
RETAINED EARNINGS:
Balance January 1 106,813
Net loss (36,403)
Common stock dividends (8,000)
Preferred stock dividends --
-----------
Balance December 31 62,410
-----------
CUMULATIVE FOREIGN CURRENCY
TRANSLATION ADJUSTMENT (3,050)
-----------
TOTAL SHAREHOLDERS' EQUITY $ 269,779
-----------
-----------

The accompanying notes are an integral part of these financial statements.

BATTLE MOUNTAIN GOLD COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended December 31,
---------------------------------------
1994 1993 1992
------------ ----------- ------------
(Expressed in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 9,572 $ (4,405) $ (36,403)
------------ ----------- ------------
Adjustments to reconcile net income or loss
to cash flows from operating activities:
Depreciation, depletion and amortization 51,247 41,389 38,644
Exploration and evaluation costs 10,312 6,621 12,535
Unproven leases abandoned 59 146 1,535
Loss(gain) from sale of assets 243 (6,429) --
Asset write-downs -- -- 32,600
Accrued reclamation costs 1,341 1,517 2,552
Cumulative effects of accounting changes -- -- 1,462
Valuation of marketable securities -- -- 2,117
Loss on foreign currency transactions 2,075 (228) (760)
(Increase) decrease in accounts and notes receivable 14,542 (13,337) (2,439)
(Increase) decrease in inventories (4,469) 6,857 (2,140)
(Increase) in materials and supplies (4,555) (1,762) (2,249)
(Increase) decrease in other current assets (3,065) (2,091) 483
Increase (decrease) in accounts payable other current liabilities 3,212 (5,058) 5,419
Deferred income tax expense (benefit) 3,581 -- (8,741)
Other net changes 5,590 6,845 (3,134)
------------ ----------- ------------
TOTAL ADJUSTMENTS 80,113 34,470 77,884
------------ ----------- ------------
NET CASH FLOWS FROM OPERATING ACTIVITIES 89,685 30,065 41,481
------------ ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of assets 257 10,729 2,926
Acquisition of minority interest (5,200) -- --
Investment in Crown Jewel (10,304) (7,595) (6,862)
Capital expenditures (81,597) (57,070) (101,886)
Exploration and evaluation expenditures (10,301) (6,621) (12,535)
(Increase) decrease in restricted cash -- (53) 16,900
Other, net (193) 329 (2,014)
------------ ----------- ------------
NET CASH FLOWS USED IN INVESTING ACTIVITIES (107,338) (60,281) (103,471)
------------ ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from stock issuances 6,397 130,934 --
Cash proceeds from borrowings -- 36,891 182,981
Cash dividend payments (11,505) (7,743) (7,996)
Debt repayments (13,558) (59,869) (95,488)
Other, net (104) -- --
------------ ----------- ------------
NET CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES (18,770) 100,213 79,497
------------ ----------- ------------
EFFECT OF EXCHANGE RATE CHANGES (2,451) (36) (850)
------------ ----------- ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (38,874) 69,961 16,657
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 115,338 45,377 28,720
------------ ----------- ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 76,464 $ 115,338 $ 45,377
------------ ----------- ------------
------------ ----------- ------------

The accompanying notes are an integral part of these financial statements.

BATTLE MOUNTAIN GOLD COMPANY
Notes to Consolidated Financial Statements

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation -

The accompanying consolidated financial statements include the
accounts of the Battle Mountain Gold Company ("BMG") and its wholly-owned and
majority-owned subsidiaries ("the Company"). The accounts of Niugini Mining
Limited, a Papua New Guinea precious metals exploration, development and
production company ("Niugini Mining"), have been consolidated with the
Company's from January 1, 1989 (See Note 7). The accounts of Empresa Minera
Inti Raymi S.A., a Bolivian gold mining company ("Inti Raymi"), have been
consolidated with the Company's from April 1, 1990 (See Note 7). All
significant intercompany transactions have been eliminated in consolidation.
Majority-owned, non-corporate joint ventures are proportionately
consolidated. Non-corporate joint ventures in which the Company owns less
than a majority interest and has the ability to exercise significant
influence are accounted for by the equity method. All other joint ventures
are carried at cost. Certain prior-period items have been reclassified in the
consolidated financial statements in order to conform with current year
presentation.

Inventories -

Inventories, consisting of gold, silver and copper, are reported at
cost, using the first-in, first-out method, which is lower than market.

Property, Plant and Equipment -

Property, plant and equipment are stated at cost. Expenditures for
development of new mines and major development expenditures at existing
mines, which are expected to benefit future periods, are capitalized and
amortized, generally, on the units of production method. Exploration and
development costs expended to maintain production at operating mines are
charged to expense as incurred. In certain cases, mining costs associated
with waste rock removal are deferred as development costs and charged to
operations on the basis of the average stripping ratio over the life of the
mine.

Other property, plant and equipment includes capitalized lease costs
and mine development in progress. Capitalized exploration lease costs are
apportioned to expense in interim periods through a provision for abandonment
of unproductive projects. Actual abandonments of unproductive projects are
charged against the allowance. The balance in the allowance for abandonment
is then evaluated on an annual basis and adjusted as necessary.

Generally, depreciation, depletion and amortization of mining
properties and related assets are determined using the units of production
method based upon estimated

recoverable ore reserve tonnages or reserve ounces at the beginning of the
year. However, assets having an estimated life of less than the estimated
life of the mineral deposits are depreciated on the straight-line method
based on the expected life of the asset. Write-downs and write-offs of
depreciable properties are included in accumulated depreciation, depletion
and amortization.

Exploration and Evaluation Expenditures -

With the exception of lease acquisition costs incurred to acquire
mineral rights, the Company charges all exploration and predevelopment
evaluation expenditures to expense as incurred.

Capitalization of Operating Results During Mine Development -

During the start-up period for each developing mine, operating costs
may exceed revenues earned from the sale of precious metals produced. In
these instances, all costs incurred during this precommercial production
period, net of revenues earned, are capitalized as property costs.

Capitalization of Interest -

Interest expense incurred in connection with borrowings attributable to
pre-production stage projects is capitalized until those projects commence
commercial production.

Reclamation -

Reserves for estimated future costs for reclamation of the Company's
operating sites are accrued on a units of production basis over the estimated
lives of the respective mines. These costs are charged to milling and other
plant costs as accrued (See Note 13).

Revenue Recognition -

Revenue is recognized when the dore (a combination of gold and
silver) or concentrates are delivered against sales agreements or contracts
and risk of loss passes to the buyer.

Currency Translation -

Foreign currency financial statements are translated into U.S. dollars
using current exchange rates and translation gains and losses are accumulated
in the balance sheet caption "Cumulative Foreign Currency Translation
Adjustment," a separate component of shareholders' equity.

Effective January 1, 1994, NML changed its functional currency from the
Papua New Guinea Kina to U.S. dollars.

Income (Loss) Per Share -

Income (loss) per share is computed by dividing net income (loss)
attributable to common shareholders by the weighted average number of common
shares outstanding for the year, adjusted for common stock equivalents, if
dilutive. The effect of other dilutive securities are not included in the
computation of the 1994 income per share and the effects of common stock
equivalents and other dilutive securities are not included in the computation
of the 1993 and 1992 losses per share because of their antidilutive effect.

Statement of Cash Flows -

At December 31, 1994, cash and cash equivalents included $39.9 million
and $15.4 million attributable to Niugini Mining and Inti Raymi,
respectively. Cash and cash equivalents at December 31, 1993, included $44.7
million and $9.3 million held by Niugini Mining and Inti Raymi, respectively.
At December 31, 1994 and December 31, 1993, other assets included $.9 million
and $1.3 million, respectively, of restricted cash held by Niugini Mining.

For purposes of the Consolidated Statement of Cash Flows, the Company
considers all highly liquid debt instruments purchased with a maturity of
three months or less to be cash equivalents.

For the year ended December 31, 1994 the Company received U.S. federal
income tax refunds of $4.3 million and paid Bolivian withholding taxes of $.9
million. For the years ended December 31, 1993, and 1992, the Company paid
$.7 million and $3.2 million respectively, for income taxes. The Company paid
$6.4 million, $6.8 million and $1.4 million in interest, net of amounts
capitalized, during 1994, 1993 and 1992, respectively.

For 1994, the Company's investing activities included the issuance of
435,897 shares of BMG's common stock (market value of $4.25 million) in
addition to $4.25 million of cash for the purchase of an additional 3%
interest in the Crown Jewel Project (see Note 3). During 1993 and 1992 the
Company's investing activities did not include any significant non-cash
transactions.

Issuance of Stock by Subsidiaries

The issuance of stock by subsidiaries is accounted for as a capital
transaction in the Consolidated Financial Statements.

Forward Sales Contracts, Options and Interest Rate Caps

The Company may enter into fixed forward and spot deferred sales contracts
for the sale of its metals as a hedge against changes in prices. Gains, losses
or expenses related to these transactions are netted against revenue when the
hedged production is sold. The Company may also purchase put options for the
sale of its produced metals.

Premiums paid for purchased interest rate caps are amortized to interest
expense over the terms of the interest rate cap agreement. Unamortized premiums
are included in other assets in the Consolidated Balance Sheet. Amounts earned
under cap agreements are accrued as a reduction of interest expense.

Spot deferred sales contracts allow the Company to defer the delivery of
gold under the contract to a later date at the original contract price plus the
prevailing premium at the time of the deferral, as long as certain conditions
are satisfied. Although spot deferred sales contracts could limit amounts
realizable during a period of rising process, the Company may "roll forward" its
spot deferred contracts to future periods in order to realize current market
price increases, while maintaining future downside protection.

Note 2. ASSET IMPAIRMENTS

The Company did not recognize any charges for asset impairments during 1994
and 1993. During the third quarter of 1992, the Company recognized charges
totaling approximately $23.3 million, net of $11 million in income tax benefits
for the impairment in value of certain of the Company's assets. The charges
included (1) a write-down of $17.6 million, net of a $9 million income
tax benefit, of the Company's investment in the San Luis mine in Colorado to
reduce the carrying value of the investment to a level which the Company
believed would be recoverable under then existing and expected future market
conditions (lower gold prices, compared with those at the time of project
conception, and greater than anticipated capital expenditures resulting from a
difficult start-up period led to the write-down), (2) a write-off of $4 million,
net of a $2 million income tax benefit, of the Company's investment in the
previously closed Canyon Placer facility, which was abandoned because of gold
prices being persistently less than needed for development, and (3) an
impairment of $1.7 million, included as other income (expense), net, to adjust
to current market the carrying value of certain marketable equity security
investments acquired upon the previous disposition of a discontinued project.

Note 3. INVESTMENTS

The Company's long-term investments include the following:

December 31,
--------------------
1994 1993
--------- ---------
(expressed in
thousands)

Crown Jewel joint venture $ 39,139 $ 24,639
Other joint ventures 264 142
Cash surrender value of life insurance, net 3,601 3,029
Other 401 301
--------- ---------
$ 43,405 $ 28,111
--------- ---------
--------- ---------

Crown Jewel Joint Venture -

On March 14, 1990, the Company purchased, for $5 million, an option to
acquire a 51 percent joint venture interest in Crown Resources Corporation's
Crown Jewel gold project and surrounding exploration rights in Washington state.
The Company paid an additional $5 million on January 4, 1991, to exercise the
option and retain the right to acquire an ownership interest in the project. The
Company has spent an additional $29.1 million as of December 31, 1994,
evaluating and developing the project. The evaluation expenditures were charged
to expense in the periods incurred prior to March 31, 1992, when the Company
decided to proceed with the development of the project. Since that time, all
evaluation expenditures ($20.4 million) have been capitalized.

In March 1994, an arbitrator held that BMG was entitled, under "force
majeure" provisions of BMG's joint venture agreement covering its Crown Jewel
project, to suspend quarterly payments of $1 million to its co-venturer for the
third and fourth quarters of 1993 because of delays in the permitting process.
On May 10, 1994, BMG announced that it had resolved outstanding contractual
issues with the co-venturer, including all issues relating to BMG's obligation
to subsequently make such quarterly $1 million payments. As part of its
agreement to resolve these issues, BMG acquired the right to earn an additional
3 percent joint venture interest in the Crown Jewel project. The consideration
paid by BMG to the co-venturer totaled $4.25 million in cash and 435,897 shares
of BMG common stock. As a result of this agreement, BMG has the right to earn a
54 percent interest in the project, and the joint venture agreement has been
amended to delete the terms requiring $1 million quarterly payments to the
co-venturer. The 3 percent additional interest will apply only until the joint
venture recovers 1.5 million ounces of gold from the project at which time BMG's
interest will be reduced to 51 percent.

To earn a 54 percent undivided interest in the project and certain adjacent
mineral claims, the Company would be required to fund an estimated additional
$61 million for construction and development of the project through commencement
of commercial production.

Note 4. OTHER INCOME (EXPENSE), NET

Included in other income (expense), net, are certain non-operating revenues,
net of related expenses, consisting of:

Year Ended December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
(expressed in thousands)

Impairment of non-current marketable securities $ -- $ -- $ (2,117)
Foreign currency exchange gains (losses) (2,075) 228 760
Gain on sale of investments 725 2,697 --
Gain on sale of exploration project -- 3,730 --
Royalty income 820 -- --
Other 286 (947) 196
--------- --------- ---------
$ (244) $ 5,708 $ (1,161)
--------- --------- ---------
--------- --------- ---------

Note 5. FEDERAL AND FOREIGN INCOME TAX

The discussion of income taxes herein does not include the cumulative income
tax effects of accounting changes explained in Note 6 to these Consolidated
Financial Statements.

Federal and foreign income tax expense (benefit) consisted of the following:

Year Ended December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
(expressed in thousands)

Current
United States $ (2,288) $ (5,117) $ (4,665)
Foreign 1,226 1,028 1,165
--------- --------- ---------
Total current (1,062) (4,089) (3,500)
--------- --------- ---------
Deferred
United States -- -- (8,741)
Foreign 3,581 -- --
--------- --------- ---------
Total deferred 3,581 -- (8,741)
--------- --------- ---------
$ 2,519 $ (4,089) $ (12,241)
--------- --------- ---------
--------- --------- ---------

Consolidated income before income taxes and the cumulative effect of the
accounting change includes income from foreign operations of $32.7 million,
$13.8 million and $1.7 million in 1994, 1993 and 1992, respectively.

Effective January 1, 1992, the Company adopted the provisions of SFAS No.
109. SFAS No. 109 requires recognition of deferred tax liabilities and assets
for the expected future tax consequences of events that have been included in
the financial statements or tax returns.

Under this method, deferred tax liabilities and assets are determined based on
the difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. Effective January 1, 1992, the Company
recorded a deferred tax liability of $12.6 million, representing the net effect
of adopting SFAS No. 109 as of that date. This liability was comprised of a
$16.5 million purchase acquisition liability related to the Westworld
acquisition (See Note 7), which was capitalized to property, and a partially
offsetting net $3.9 million tax benefit which has been reflected in the
consolidated statement of income as the cumulative effect of the accounting
change.

For the year 1992, loss before cumulative effects of accounting changes
includes an additional income tax benefit of approximately $8.7 million or $.11
per share resulting from the adoption of SFAS No. 109.

The significant components of the deferred tax benefit in 1992 were as
follows:

(expressed in
thousands)

Temporary differences between book and tax bases $ (6,472)
Alternative minimum tax credit (2,269)
-------
1992 Deferred tax benefit $ (8,741)
-------
-------

The Company's deferred tax position at December 31, 1994 and 1993, is
comprised of the following:

1994 1993
---------- ----------
(expressed in
thousands)

Deferred tax assets $ 55,275 $ 51,186
Deferred tax liabilities (57,822) (42,825)
Valuation allowance (1,034) (8,361)
----------- ----------
Net deferred tax (liability) $ (3,581) $ --
----------- ----------
----------- ----------

Temporary differences and carryforwards which gave rise to significant
portions of deferred tax assets and liabilities at December 31, 1994 and 1993
are as follows:

1994 1993
---------- ----------
(expressed in
thousands)

Net operating loss carryforwards $ 24,975 $ 17,229
Alternative minimum tax credit carryforward 4,552 5,828
Employee compensation and benefits accrued 5,052 4,425
Property, plant and equipment (18,915) (16,313)
Undistributed earnings of foreign subsidiaries (17,447) (5,080)
Other, net (764) 2,272
Valuation allowance (1,034) (8,361)
---------- ----------
Net deferred tax asset (liability) $ (3,581) $ --
---------- ----------
---------- ----------

A reconciliation of income tax at the statutory rate to income tax expense
(benefit) follows:

Year Ended December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
(expressed in thousands)

Income tax based on statutory rate of 35% for 1994 and 1993 and 34% for
1992 $ 4,232 $ (2,973) $ (16,042)
Increases (reductions) resulting from:
Statutory depletion in excess of cost basis -- -- (2,654)
Foreign withholding tax, net 4,377 -- --
Undistributed (income) losses of foreign subsidiaries not subject to
income tax 302 (1,030) (302)
Change in valuation allowance (7,327) 722 7,639
Other, net 935 (808) (492)
--------- --------- ---------
Income tax expense (benefit) $ 2,519 $ (4,089) $ (12,241)
--------- --------- ---------
--------- --------- ---------

The Omnibus Budget Reconciliation Act of 1993, enacted on August 10, 1993,
retroactively increased the federal statutory income tax from 34 percent to 35
percent for periods beginning on or after January 1, 1993. The effect of the
rate change was not significant to the Company's net deferred income tax
position.

Taxes have been provided on the undistributed earnings of subsidiaries and
joint ventures with the exception of Niugini Mining which is in a cumulative
loss position.

The Company and its domestic subsidiaries file a consolidated U.S.
federal income tax return. Such returns have been closed through the year
1990.

At December 31, 1994, the Company had approximately $4.6 million of
alternative minimum tax credits available on an indefinite carryforward
basis, and approximately $71.4 million of regular net operating losses
expiring beginning in 2007, available to offset future U.S. federal income
tax.

Note 6. BENEFITS PLANS

Pension Plans -

Substantially all U.S. employees of the Company are covered by
non-contributory pension plans. The U.S. plans provide benefits based on
participants' years of service and compensation or defined amounts for each
year of service. The Company makes annual contributions to the U.S. plans
that comply with the minimum funding provisions of the Employee Retirement
Income Security Act ("ERISA").

During 1993, the plans for BMG's Australian employees were changed from
non-contributory defined benefit plans to defined contribution plans.

Pension costs are generally accrued and charged to expense currently.
Net periodic pension cost included the following components:

Australian
U. S. Plans Plans
------------ ----
1994 1993 1992 1992
---- ---- ---- ----
(expressed in thousands)

Service cost - benefits earned during the
year $ 599 $ 648 $ 736 $ 296
Interest cost on projected benefit
obligations 1,499 1,611 1,433 103
Expected return on plan assets (2,060) (1,773) (1,643) (147)
Net amortization and deferral 258 (88) (131) -
------- ------- ------- -----
Net periodic pension cost $ 296 $ 398 $ 395 $ 252
------- ------- ------- -----
------- ------- ------- -----

The projected long-term rate of return on U.S. plan assets was 9
percent at December 31, 1994 and 1993. At December 31, 1992, the projected
long-term rate of return was 8 percent for the U.S. plans and 9 percent for
the Australian plans.

Actual return on U.S. plans' assets was $1.4 million for the year
ended December 31, 1994, $.3 million for the year ended December 31,
1993, and $1.1 million for the year ended December 31, 1992. For
Australian plans, actual return on plan assets for the year ended
December 31, 1992 was $(.1) million.

The following sets forth the plans' funded status and the related
amounts:

U.S. Plans
As of December 31,
------------------
1994 1993
---- ----
(Expressed in thousands)

Actuarial present value of
benefit obligations:
Vested benefit obligation $17,148 $19,343
------- -------
Accumulated benefit obligation $18,163 $21,118
------- -------
Projected benefit obligation $19,299 $23,579
Plan assets at fair value 21,498 22,965
------- -------
Plan assets in excess of (less than)
Projected Benefit Obligation 2,199 (614)
Unrecognized net gain and effects of
changes in actuarial assumptions (2,585) (572)
Unrecognized net asset at transition (914) (1,033)
Prior service cost not yet recognized in net
periodic pension cost 3,262 3,906
------- -------
Prepaid pension cost $1,962 $1,687
------- -------
------- -------

Plan assets include equity securities, common trust funds and various
debt securities. Weighted average rate assumptions used in determining
estimated benefit obligations were as follows:

U.S. Plans
--------------------
1994 1993
---- ----

Discount Rate 8.5% 7.0%
Rate of increase in compensation levels 6.0% 6.0%

Early Retirement Program -

In July 1992, 29 of the Company's salaried employees elected to accept
early retirement benefits offered by the Company as part of general cost
reduction efforts. In connection with these special benefits, a $1.3 million
charge (net of a $.7 million income tax benefit) was taken against 1992
earnings.

Contribution Plans -

The Company has defined contribution plans available for all full-time
U.S. salaried employees and all full-time U.S. hourly employees. The plans
provide for savings contributions by employees from 1 to 16 percent of their
compensation, subject to ERISA limitations. The Company matches 50 to 100
percent of employee contributions with BMG's common stock, subject to a limit
of 6 percent of an employee's compensation during each plan year.

The Company has defined contribution plans available for all BMG's
Australian salaried and hourly employees. The Company's contributions to the
salaried plan are determined in accordance with the trust deed. The Company's
contributions to the hourly plan are determined in accordance with the union
award.

All Company contributions to the plans are expensed and funded
currently. The cost of such Company contributions was $.5 million in 1994,
$.7 million in 1993 and $.4 million in 1992.

Postretirement Health Care and Life Insurance Benefits -

Substantially all of the Company's U.S. employees may become eligible
for certain unfunded health care and life insurance benefits when they reach
retirement age while working for the Company.

In October 1992, the Company announced its decision to adopt SFAS No.
106, "Employers' Accounting for Postretirement Benefits other than Pensions",
effective January 1, 1992. This standard requires that the expected cost of
these benefits must be charged to expense during the years that the employees
render service. As a result of the adoption, the Company's results of
operations for the year ended December 31, 1992, reflected an accrued charge
of $5.3 million (net of $1.4 million in income tax benefits) representing the
cumulative effect of the change in accounting principle for periods prior to
1992. Ongoing postretirement benefit costs recognized under this standard do
not differ significantly from those that would have been reported under the
previous method.

Net periodic postretirement benefit cost for the years ended December 31,
1994, 1993 and 1992, included the following components (in thousands):

1994 1993 1992
---- ---- ----

Service cost $ 460 $ 367 $283
Interest cost on accumulated benefit
obligation 554 644 572
------ ------ ----
Net periodic postretirement benefit
cost $1,014 $1,011 $855
------ ------ ----
------ ------ ----

The following table presents the plans' status at December 31, 1994 and
1993 (in thousands):

1994 1993
---- ----

Accumulated postretirement benefit
obligation:
Retirees $3,940 $ 4,993
Fully eligible active plan participants 720 676
Other active plan participants 2,299 3,684
------ -------
6,959 $ 9,353
Unrecognized net gain(loss) 1,510 (1,609)
------ -------
Accrued postretirement benefit cost $8,469 $ 7,744
------ -------
------ -------

The discount rate used in determining the accumulated postretirement
benefit obligation was 8.5 percent for 1994 and 7 percent for 1993. For 1994
and 1993, the assumed annual rate of increase in the per capita cost of
covered health care benefits was 12 and 14 percent, respectively. In 1994 and
1993, a gradual decrease in the rate is assumed through the years, 1999 and
2001, respectively, when the rate is estimated to reach 6 percent for the
1994 calculations and 7 percent for 1993 calculation and remain at that level
thereafter. A one- percentage-point increase in the assumed health care cost
trend rates would increase the accumulated postretirement benefit obligation
as of December 31, 1994, by approximately $1.1 million, and the total of the
service and interest cost components of net periodic postretirement health
care cost for 1994 by approximately $.2 million.

Postemployment Benefits -

Effective January 1, 1994, the Company adopted SFAS No. 112,
"Employers' Accounting for Postemployment Benefits". This standard requires
that the expected cost of these benefits must be charged to expense during
the periods that employees vest in these benefits. The Company had previously
recognized these costs as an expense when paid. Adoption of the standard did
not have a material effect on the Company's financial position or on its
results of operations. Postemployment benefit costs recognized under this
standard do not differ significantly from those that would have been reported
under the previous method.

Note 7. ACQUISITIONS

Niugini Mining -

In the aggregate, since January 1, 1989, the Company has paid $179.6
million for 47.5 million shares of the common stock of Niugini Mining. In
December 1993, Niugini Mining issued 5.8 million of its common shares at
A$5.00 per share in a public offering which provided net proceeds of
approximately $19.1 million U.S. equivalent. As a result of this stock
offering, BMG's ownership interest in Niugini Mining decreased from 56.5
percent to 52.6 percent. In December 1993, the Company recorded a $2.1
million adjustment to reduce the carrying value of its investment in Niugini
Mining to reflect the reduction in ownership interest. In 1994, BMG's
ownership interest was diluted to 51.4 percent due to employee stock options
that were exercised during the year. In June 1994 the Company recorded a $1.2
million adjustment to reduce the carrying value of its investment in NML to
reflect this reduction in ownership interest. These adjustments were charged
to shareholders' equity and not charged against net income because the
Company believed the carrying value of its investment to be fully
recoverable. Based on existing Niugini Mining employee incentive option
schemes, BMG's ownership could be diluted to as low as 50.03 percent.

At December 31, 1994, the carrying value attributed to the Company's
share of the Lihir gold project exceeded its proportionate share of Niugini
Mining's historical cost basis in the project by $135.9 million. Such excess
will be amortized based on the estimated recoverable reserves attributable to
the Lihir project upon commencement of production.

Interest costs amounting to $6 million in 1994, 1993 and 1992 each were
capitalized in connection with the Lihir gold project.

Inti Raymi -

On March 8, 1994, the Company purchased an additional 3 percent of Inti
Raymi's outstanding stock for $5.2 million from Zeland Mines, S.A., a
Panamanian mining company ("Zeland") to increase the Company's ownership
interest to 88 percent. As of December 31 1994, the Company had invested an
aggregate of $41.1 million in cash and 9 million of its common shares (valued
at approximately $76.3 million) to acquire its 88 percent equity interest in
Inti Raymi.

At December 31, 1994, the carrying value, net of accumulated
amortization, attributed to the Company's share of the Kori Kollo gold
deposit (including a $16.5 million deferred tax charge capitalized in
connection with the Westworld purchase acquisition) (See Note 5), exceeded
its proportionate share of Inti Raymi's historical cost basis in the deposit
by $93.6 million. This excess has been capitalized to property and is being
amortized by the units of production method based on the deposit's estimated
recoverable reserves. Amortization of the excess cost amounted to $11.1
million, $8.6 million and $3.0 million in 1994, 1993 and 1992, respectively.

Interest costs amounting to $.4 in 1994, $.6 million in 1993 and $2.8
million in 1992 were capitalized in connection with the Kori Kollo project.

Note 8. COMMON STOCK AND STOCK OPTIONS

Reference is made to Notes 9 and 10 for discussion regarding the number
of shares of common stock reserved for issuance for the conversion of the
Company's outstanding convertible preferred stock and convertible
subordinated debentures.

Stock Options -

The Company has two stock option plans available to officers and key
employees covering non-qualified and incentive stock options. A total of
1,980,000 shares of common stock are reserved for issuance under the 1985
Stock Option Plan, of which 52,073 shares remained available for granting at
December 31, 1994. At December 31, 1993, there were 8,549 shares available
for granting under this plan. During 1994, 45,023 stock option shares expired
and were put back into the available pool.

During 1994, the 1994 Long Term Incentive Stock Option Plan was
approved by the Company's shareholders. Under this plan, a total of 4,000,000
shares of the Company's common stock are reserved for issuance. At December 31,
1994, 3,589,100 shares remained available for granting. During 1994, 3,900
stock option shares expired and were put back into the available pool.

Non-employee directors of the Company are granted non-qualified stock
options under the Non-qualified Stock Option Plan for Outside Directors,
which was approved by the Company's shareholders on April 21, 1992. Under
this plan, a total of 250,000 shares of the Company's common stock are
reserved for issuance, of which 160,500 shares remained available for
granting at December 31, 1994. At December 31, 1993, there were 177,500
shares available for granting under the plan.

Options granted under the above plans are exercisable under the terms
of the respective option agreements at the market price of the common stock
at the date of grant, subject to anti-dilution adjustments in certain
circumstances. Payment of the exercise price may be made in cash or in shares
of common stock previously owned by the optionee, valued at current market
value.

Under the deferred income stock option plan for officers and directors,
each participant may elect to receive a non-qualified stock option in lieu of
a portion of his compensation. A maximum of 2,000,000 shares of common stock
is issuable under the plan, of which 1,751,391 shares remained available for
granting at December 31, 1994. At December 31, 1993, 1,774,641 shares
remained available for granting under the plan. Options granted pursuant to
the plan become exercisable at the beginning of the calendar year immediately
following the year in which the option was granted. They expire no later than
10 years after the date of grant.

The amount of deferred compensation is accrued as compensation expense
during the period earned.

Additional information for 1994 related to the Company's stock option
plans follows:

Number of Shares Option Price
Under Option Range Per Share
------------ ---------------

Outstanding at December 31, 1993 1,908,186 $4.83 to $20.75
Granted 458,050 $7.25 to $10.50
Exercised (140,164) $4.83 to $8.33
Expired (50,424) $6.88 to $17.75
---------
Outstanding at December 31, 1994 2,175,648 $4.83 to $20.75
---------
Exercisable at December 31, 1994 1,141,316 $4.83 to $20.75
---------

At December 31, 1994, expiration dates for the outstanding options
ranged from July 1, 1996 to May 9, 2004. The weighted average exercise price
per share was $9.00.

Additionally, the Company has reserved 950,000 shares for issuance
under restricted stock and stock award plans. At December 31, 1994, a total
of 698,611 shares remained available for issuance under these plans.
Compensation expense related to the plans is accrued ratably over periods
vested.

Note 9. PREFERRED STOCK AND STOCK RIGHTS

The Company's Board of Directors is authorized to divide the preferred
stock into series. With respect to each series the Board may determine the
dividend rights, dividend rates, conversion rights and voting rights (which
may be greater or less than the voting rights of the common stock). The Board
may also determine the redemption rights and terms, liquidation preferences,
sinking fund rights and terms, the number of shares constituting the series
and the designation of each series.

Pursuant to their authority to divide the preferred stock into series,
the Board of Directors in 1988 designated 2,000,000 shares of preferred stock
as "Series A Junior Participating Preferred Stock" for possible issuance upon
the exercise of stock rights as described below.

Stock Rights -

Since November 21, 1988, when the Company's Board of Directors declared
a dividend of one right for each outstanding share of the Company's common
stock, each share of the Company's outstanding common stock carries with it
such right. Each right entitles the holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock,
par value $1.00 per share, for an exercise price of $60, subject to
adjustment. The rights expire on November 10, 1998. They will not be
exercisable nor transferable apart from the common stock until such time as a
person or group acquires 20 percent of the Company's common stock or
initiates a tender offer that will result in ownership of 30 percent of the

Company's common stock. In the event that the Company is merged, and its
common stock is exchanged or converted, the rights will entitle the holders
to buy shares of the acquirer's common stock at a 50 percent discount. Under
certain other circumstances, the rights can become rights to purchase the
Company's common stock at a 50 percent discount. The rights may be redeemed
by the Company for one cent per right at any time until 10 days following the
first public announcement of a 20 percent acquisition of beneficial ownership
of the Company's common stock.

Convertible Preferred Stock -

On May 20, 1993, the Company received $111 million in net proceeds from
the issuance of 2.3 million shares of its convertible preferred stock with a
liquidation preference of $50 per share plus any accrued and unpaid
dividends. Each share of preferred stock will pay an annual cumulative
dividend of $3.25 and is convertible at any time at the option of the holder
into 4.762 shares of Battle Mountain Gold Company common stock. The preferred
stock is redeemable at the option of the Company solely for shares of the
Company's common stock beginning May 15, 1996. There are 11 million shares of
the Company's common stock reserved for issuance upon conversion of the
preferred stock.

Note 10. DEBT

The Company had the following long-term debt outstanding as of December 31
(in thousands):

1994 1993
---- ----

Convertible subordinated debentures, due 2005, 6% $100,000 $100,000
Inti Raymi Kori Kollo project financing:
IFC loan, variable rate 27,500 32,500
IFC convertible loan, variable rate with 11% minimum 5,000 5,000
OPIC loan, variable rate 31,500 37,200
Restructured OPIC loans, 10.5% 3,231 3,819
CAF loan, variable rate 11,786 13,929
Other 12 36
-------- --------
Total 179,029 192,484
Less current portion of long-term debt 13,427 13,431
-------- --------
Total long-term debt $165,602 $179,053
-------- --------
-------- --------

On January 4, 1990, the Company received net proceeds of $97.4 million
upon the completion of a $100 million Euromarket issue of 6 percent
convertible subordinated debentures, due January 4, 2005. The debentures are
convertible into shares of the Company's common stock at a conversion price
of $20 5/8 per share, subject to adjustment in case of certain events. The
debentures are now redeemable at the Company's option at any time at par
value plus accumulated interest. There are 4.8 million shares of the
Company's common stock reserved for issuance upon conversion of the
debentures. Interest payments are due annually on the anniversary date of the
issuance. Proceeds from the issuance were added to working capital and

used for general corporate purposes, including mineral acquisitions and
development of properties. There are no sinking fund requirements imposed
under the debenture agreement.

During 1992, the Company's majority-owned subsidiary, Inti Raymi,
established separate but coordinated term credit facilities with the Overseas
Private Investment Corporation (OPIC), International Finance Corporation
(IFC) and Corporacion Andina de Fomento (CAF) for the development of its Kori
Kollo expansion project in Bolivia. Each loan is secured by a lien on the
project and is to be repaid in semi-annual installments which commenced in
December 1993 and will continue through June 2000, with certain provisions
for accelerated repayment in the event of substantial Kori Kollo reserve
losses or significantly improved gold market conditions. Through certain
ratio tests, each loan may restrict payments of intercompany debt and
dividends by Inti Raymi to the owners of shares of its capital stock.
Additional covenants exist which limit fixed asset purchases, additional debt
and liens, and require compliance with applicable environmental laws. During
1993, the project met the prerequisite physical and financial completion
tests as set forth in the facility agreements and in April 1994 achieved
project completion status from the lenders. The most significant implication
of project completion is the ability for Inti Raymi to begin paying dividends
and repaying loans to the Company. Additionally, BMG is no longer required to
provide financial support to ensure Inti Raymi's ability to meet its
obligations.

The OPIC and IFC loan agreements require that the current mining plan
indicate that production from the Kori Kollo mine extends at least three
years beyond the final scheduled principal payment ("Reserve Life
Provision"). Failure to meet this Reserve Life Provision results in the
suspension of all debt repayments from Inti Raymi to its shareholders and all
Inti Raymi dividend payments until such time as compliance with the Reserve
Life Provision is achieved by either a pre-payment of a sufficient portion of
the debt or an increase in the Kori Kollo mine ore reserves. The IFC and CAF
loan agreements contain provisions which entitle their respective agencies to
receive principal pre-payments proportionate to those received by OPIC. In
the third quarter of 1994, the Company completed a rescheduling of the life
of mine production and observed that the new schedule was not in compliance
with the Reserve Life Provision due to more accelerated mining and production
than originally planned. The current plan indicates that production will
extend approximately 2.8 years beyond the date of the final scheduled
principal payment. To allow continuing payments of dividends and the
repayment of intercompany debts, Inti Raymi obtained a temporary waiver,
permitting noncompliance with the Reserve Life Provision until June 30, 1996.
Inti Raymi is currently undertaking evaluations in areas of identified
mineralization to be able to add the reserves necessary to satisfy the
Reserve Life Provision within the agreed time frame.

The OPIC facility provided for borrowings of $40 million. Interest
rates under the facility are based on LIBOR plus 2.0 percent. Additionally,
$4.1 million of previously existing OPIC loans to Inti Raymi were
restructured as loan obligations under the terms of the agreement, with the
exception that they are subject to their originally agreed interest rates. As
of December 31, 1994 and 1993, Inti Raymi owed $34.7 million and $41.0
million, respectively, under these combined facilities. Interest charges for
the years ended December 31, 1994, 1993 and 1992,

were based on weighted average interest rates of 6.7 percent, 5.6 percent and
6.2 percent, respectively.

Under the IFC commitment, borrowings of $40 million were made. The
interest rate for the non-convertible portion of the loan is based on LIBOR
plus 2.375 percent, but Inti Raymi has the right to request an interest rate
cap or collar, or may elect at any time to pay a fixed rate of interest. Of
the total IFC borrowings, $5 million represents a convertible loan due on
March 1, 2002, carrying a fixed annual interest rate of 11 percent with an
additional interest rate provision which varies with the price of gold.
Interest charges for the years ended December 31, 1994, 1993 and 1992 were
based on weighted average interest rates of 6.9 percent, 6.0 percent and 6.2
percent, respectively, for the non-convertible portion of the loan and 13.7
percent, 12 percent and 11 percent, respectively, for the convertible portion
of the loan. The loan may be converted, at IFC's option, into up to a 3.98
percent equity interest in Inti Raymi. Upon the conversion of the convertible
loan into equity, the Company and Inti Raymi's minority owner would have
their interests in the capital stock of Inti Raymi diluted proportionately.
Each share of Inti Raymi common stock issued by Inti Raymi as a result of
such conversion will carry a put option which, when exercised by IFC, would
require BMG and Inti Raymi's minority shareholder to purchase such share at
its fair market value as determined at the time the put is exercised. As of
December 31, 1994 and 1993, Inti Raymi owed $32.5 million and $37.5 million,
respectively, under this facility.

The CAF facility provided for borrowings of $15 million. Interest rates
under the facility are based on LIBOR. These funds were obtained from several
sources. CAF charged a supervision and oversight fee and a commitment fee in
addition to fees charged by the participants in the funding. As of December 31,
1994 and 1993, Inti Raymi owed $11.8 million and $13.9 million, respectively,
under this facility. Interest charges for the years ended December 31, 1994,
1993 and 1992, were based on weighted average interest rates of 5.5 percent
4.7 percent and 4.8 percent, respectively.

The Company has a committed revolving credit agreement with a syndicate
of seven banks, led by Citibank N.A. as agent. At December 31, 1994, the
facility would provide unsecured borrowings up to $84.4 million. The facility
provides for quarterly reductions in commitments of $9.4 million which are
scheduled to continue until the facility termination date of December 31,
1996. As a result of 1992 amendments, the facility permits the Company to
pledge its shareholdings in Inti Raymi and restricts the amounts that the
Company may borrow under the facility if the Company does not meet certain
net worth criteria. The amendments also impose additional facility costs in
the form of amendment arrangement fees and increased interest rates. Interest
rates under this facility are based on the facility agent bank's base rate,
LIBOR or applicable certificate of deposit rates. There were no interest
charges related to this facility for the year ended December 31, 1994, since
the Company did not make any borrowings under it in 1994. Interest charges
for the years ended December 31, 1993 and 1992, were based on weighted
average interest rates of 3.9 to 6.0 percent and 4.0 to 6.5 percent,
respectively. Other costs associated with the facility include commitment
fees of one-eighth percent per annum on the unused portion of the facility
and facility fees of one-eighth percent per annum of the average daily
commitment. The credit agreement imposes certain financial covenants upon the
Company which include covenants relating to leverage, net worth and working
capital, as well as certain

restrictions on liens, additional debt or lease obligations and the
acquisition or disposition of major assets. Additionally, the agreement sets
forth restrictions limiting the amount of dividends the Company may pay based
on the Company's equity position applied on a cumulative basis from the date
of the agreement. As of December 31, 1994, cumulative dividend restriction
levels exceeded cumulative dividends paid or declared by $119.9 million. No
amounts were outstanding under this revolving credit facility as of December 31,
1994 or 1993.

In August 1992, the Company established a $15 million uncommitted
revolving credit facility with the Union Bank of Switzerland. Interest rates
under the facility are variable, based on either the bank's base rate or a
negotiated rate. There are no additional costs or financial restrictions
imposed on the Company by this facility. No amounts were outstanding under
this revolving credit facility as of December 31, 1994 or 1993; however,
letters of credit amounting to $4.8 million had been issued against this
facility as of December 31, 1994. There were no interest charges for the year
ended December 31, 1994 since the Company did not borrow against this
facility in 1994. Interest charges for the year ended December 31, 1993 and
1992 were based on weighted average interest rates of 3.5 to 4.3 percent and
3.4 to 4.5 percent, respectively.

Maturities of the Company's long-term debt for each of the next five
years are $13.4 million.

As of February 9, 1994, BMG has effective a registration statement
under the Securities Act of 1933, as amended, for what is commonly referred
to as a "universal shelf" filing covering up to $200 million of its debt
securities, preferred stock, depository shares, common shares and warrants
which BMG may elect to offer from time to time and in any combination.

Note 11. MAJOR CUSTOMERS AND EXPORT SALES

During 1994, sales to three separate buyers accounted for $68.3
million, $63.1 million and $36.4 million of total sales, respectively,
representing 71.3 percent of total sales. International sales for 1994 were
$235.3 million, of which $46.2 million were export sales of U.S. product. In
1993, sales to three separate buyers of $55.3 million, $36.2 million and
$25.3 million, respectively, accounted for 56.4 percent of total sales. Of
the Company's $205.7 million international sales in 1993, $47.9 million were
export sales of U.S. product. For 1992, 78.1 percent of the Company's total
sales were distributed among five separate buyers who accounted for $34.9
million, $30.0 million, $28.9 million, $28.6 million and $27.7 million in
sales, respectively. International sales of $192.2 million in 1992 included
$83.6 million in export sales of U.S. product. Alternate buyers are available
to replace the loss of any of the Company's principal customers.

All sales of the Company's products are made to precious metals
smelters, refiners or traders. Accordingly, the precious metals industry has
substantial influence over the market for the Company's products.

Note 12. GEOGRAPHIC SEGMENT INFORMATION

The following table sets forth certain financial information relating
to international and domestic operations:

Year Ended December 31,
--------------------------
1994 1993 1992
---- ---- ----
(expressed in thousands)

Gross revenues:
United States $ 46,562 $ 47,915 $ 83,602
Austral Pacific 40,314 57,060 65,268
South America 156,108 102,276 43,320
-------- -------- --------
$242,984 $207,251 $192,190
-------- -------- --------
-------- -------- --------
Operating Income (Loss):
United States $(10,673) $(19,239) $(43,952)
Austral Pacific (2,976) 7,046 1,653
South America 34,861 7,434 (1,089)
Other International (1,270) (975) (1,907)
-------- -------- --------
19,942 (5,734) (45,295)
Interest and Other Income (Expense),
Net (3,464) 1,949 (705)
-------- -------- --------
Income (Loss) Before Income Taxes,
Minority Interest and Cumulative
Effects of Accounting Changes $ 16,478 $ (3,785) $(46,000)
-------- -------- --------
Cumulative Effects of Accounting
Changes:
United States - - $ (820)
Austral Pacific - - (1,175)
South America - - 533
--------
Other International - - $ (1,462)
--------
--------
Identifiable Assets:
United States $114,789 $132,669 $ 82,397
Austral Pacific 228,989 216,200 194,187
South America 335,683 318,959 300,183
Other International 308 324 717
-------- -------- --------
$679,769 $668,152 $577,484
-------- -------- --------
-------- -------- --------

Note 13. COMMITMENTS AND CONTINGENCIES

Total operating lease rental expenses (exclusive of mineral leases)
were $2.3 million, $1.4 million and $1.6 million for 1994, 1993 and
1992, respectively.

Aggregate minimum rentals (exclusive of mineral leases) subsequent to
December 31, 1994, under non-cancelable leases for the years ending
December 31, 1995 to 1999, are estimated to be $3.0 million, $2.8
million, $2.3 million, $1.6 million and $.8 million, respectively.
Lease commitments beyond 1999 total $2.4 million.

Pursuant to pricing provisions as set out in dore customer contracts,
as of December 31, 1994, the Company had committed to sell 8,800 ounces of
gold contained in dore valued at approximately $3.3 million at prices
determined during various pricing periods in 1994, none of which exceeds 45
days. The average price of gold sold under this commitment is approximately
$380 per ounce.

All of the Company's mining and processing operations are subject to
reclamation requirements. The Company believes it is making sufficient
accruals for known reclamation obligations and has accrued an aggregate of
$10.7 million at December 31, 1994. The accrued reclamation charges are
included as long-term liabilities in the Company's consolidated balance
sheet. At the Battle Mountain complex, assuming the Phoenix project is
permitted and proceeds, aggregate reclamation expenditures required to be
spent in the area are expected to amount to approximately $7.7 million, of
which $3.1 million remained accrued at December 31, 1994. Activity expected
to be performed as part of the development and operation of the Phoenix
project will eliminate certain reclamation costs. If this project is not
permitted and does not proceed, reclamation expenditures would be expected to
be up to $3 million higher than current estimates. Estimated reclamation
obligations and related amounts accrued as of December 31, 1994,
respectively, for each of the Company's other operating mines is as follows:
San Luis $3.3 million and $1.4 million, Pajingo $2.6 million and $1.5
million, Kori Kollo $10.0 million and $1.1 million and Red Dome $4.4 million
and $3.8 million. Reclamation expenditures for the San Cristobal mine are not
expected to be material.

Note 14. FORWARD SALES AND HEDGING

Interest rate cap agreements are used to reduce the potential impact of
increases in interest rates on floating-rate long-term debt. At December 31,
1994, Inti Raymi was party to three interest rate cap agreements, each with a
term of three years. The agreements entitle the Inti Raymi to receive from
counterparties on a quarterly basis the amounts, if any, by which Inti
Raymi's interest payments on a portion of its LIBOR based floating-rate Kori
Kollo project financing exceed various fixed rates over the term of the caps.
The fixed rates in the cap agreements gradually escalate from 4.5 percent in
1994 to 7.2 percent in 1997. Inti Raymi has hedged 50 percent of its net
interest rate exposure currently related to the Kori Kollo LIBOR based
project financing. The hedge increases to 100 percent of its exposure by June
1996. Inti Raymi has not hedged any of its exposure subsequent to December
1997. The net unamortized cost of the premiums paid for these caps amounting
to $.7 million at December 31, 1994 has been included in other assets.

Average Price
Per Unit Period
-------- ------

BMG
Spot deferred sales contracts 145,000 oz. gold US$382 Jun 95 - Nov 95

Niugini Mining
Spot deferred sales contracts 30,000 oz. gold US$388 Jan 95
7,000 oz. gold A$501 Jan 95
91,000 oz. silver US$5.67 Jan 95

Fixed forward sales contracts 164,000 oz. gold A$505 Jan 95 - Dec 96
165,000 oz. silver US$5.67 Jan 95
750 tonnes copper US$2,756 Feb 95

Inti Raymi
Spot deferred sales contracts 98,500 oz. gold US$378 Jan 95 - Apr 95

The following table summarizes the Company's forward sales contracts
and put options at December 31, 1993:

Average Price
Per Unit Period
-------- ------

BMG
Spot deferred sales contracts 154,000 oz. gold US$367 Jun 94 - Jun 95

Niugini Mining
Spot deferred sales contracts 57,000 oz. gold US$397 Jan 94
24,101 oz. gold A$510 Jan 94

Fixed forward sales contracts 180,000 oz. gold A$487 Feb 94 - Dec 96
825 tonnes copper US$2,184 Jan 94
Inti Raymi
Spot deferred sales contracts 98,500 oz. gold US$364 Jan 94 - Sep 94

Purchased put options 180,000 oz. gold US$350 Jan 94 - Aug 94

Deferred costs associated with forward sales contracts amounted to $1.5
million at December 31, 1994 and 1993. There were no deferred costs
associated with put options at

December 31, 1994. Deferred costs associated with put options amounted
to $.6 million at December 31, 1993.

At December 31, 1994, in the aggregate, the Company's forward sales
contracts were approximately at the market based on the then current spot
price of $381 per ounce and an exchange rate of US$.77 to A$1. At December
31, 1993 the aggregate amount by which the net market value of the Company's
forward sales contracts is less than the then current spot price of $390 per
ounce of gold and an exchange rate of US$.67 to A$1 is $19.4 million, of
which $6.2 million is attributable to minority interests.

Note 15. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and estimated fair
values of the Company's financial instruments at December 31, 1994 and 1993.
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments",
defines the fair value of a financial instrument as the amount at which the
instrument could be exchanged in a current transaction between willing
parties.

1994 1993
---------------------- ------------------

Carrying Fair Carrying Fair
Amount Value Amount Value
------ ----- ------ -----
(expressed in thousands)

Financial Assets
Other Assets $ 685 $ 1,677 - -
Financial Liabilities
Debt $179,029 $158,662 $192,484 $182,484

The carrying amounts shown in the table are included in the
Consolidated Balance Sheet under the indicated captions.

The following methods and assumptions were used to estimate the fair
value of each class of financial instruments:

CASH, CASH EQUIVALENTS, TRADE RECEIVABLES, AND TRADE PAYABLES: The
carrying amounts approximate fair value because of the short maturity of
those instruments.

OTHER ASSETS: The amounts reported relate to the interest rate cap
agreements described in Note 14. The carrying amount comprises the
unamortized premiums paid for the contracts. The

fair value is estimated using option pricing models and essentially values
the potential for the caps to become in-the-money through changes in interest
rates during the remaining terms.

DEBT: The fair value of the Company's Convertible subordinated
debentures is based on the quoted market price of the debentures at the
reporting date. Due to the generally variable interest rate features of the
OPIC, IFC and CAF loans, the Company believes the carrying amounts
approximate the fair value of this debt at the reporting date.

The Company has a letter of credit outstanding for $3.3 to ensure that
the reclamation of the Company's San Luis mine will be performed as specified
in the operating permit issued by the State of Colorado. The Company has
letters of credit totaling $1.5 million and corporate guarantees totaling
$4.5 million to ensure that the reclamation of the Battle Mountain Complex
mines will be performed as specified in the operating permits issued by the
State of Nevada. In addition, the Company has a letter of credit outstanding
for $1.5 million as collateral for the issuance of bonds to be issued after
December 31, 1994. The Company believes the carrying value of these financial
instruments approximates their fair market value.

SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED)

QUARTERLY RESULTS

Operating Net Earnings Dividends per Dividends
Net Income Income (Loss) Per Common per
Sales (Loss) (Loss) Share Share Preferred Share
----- ----- ------ ----- ----- ---------------
(expressed in thousands except per share amounts)

1994
- ----
First Quarter $ 50,917 $ 7,182 $ 2,848 $ .01 $.025 $ .8125
Second Quarter 57,036 6,028 3,084 .01 - .8125
Third Quarter 55,827 1,856 1,451 (.01) .025 .8125
Fourth Quarter 65,890 4,876 2,189 .01 - .8125
-------- ------- ------- ----- ----- ------
$229,670 $19,942 $ 9,572 $ .02 $.050 $3.2500
-------- ------- ------- ----- ----- -------
-------- ------- ------- ----- ----- -------
1993
- ----
First Quarter $ 53,945 $(1,988) $(3,165) $(.04) $.025 $ -
Second Quarter 40,518 (4,967) (2,589) (.03) - -
Third Quarter 50,024 1,485 1,796 - .025 .8125
Fourth Quarter 48,928 (264) (447) (.03) - .8125
-------- ------- ------- ----- ----- -------
$193,415 $(5,734) $(4,405) $(.10) $.050 $1.6250
-------- ------- ------- ----- ----- -------
-------- ------- ------- ----- ----- -------

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information appearing under the captions "Nominees" and "Directors
with Terms Expiring in 1996 and 1997" set forth under "Election of Three
Directors and Director Compensation" in the Company's definitive Proxy
Statement for its annual meeting of shareholders to be held April 27, 1995,
as filed within 120 days of December 31, 1994, pursuant to Regulation 14A
under the Security Exchange Act of 1934, as amended (the "Company's 1995
Proxy Statement"), is incorporated herein by reference. See also "Executive
Officers of the Registrant" appearing in Part I of this Annual Report.

ITEM 11. EXECUTIVE COMPENSATION

The information appearing under the captions "Board Organization and
Committees" set forth under "Election of Three Directors and Director
Compensation" and "Executive Compensation" (other than the Compensation and
Stock Option Committee Report on Executive Compensation) in the Company's
1995 Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information appearing under the caption "Security Ownership" set
forth under "Election of Three Directors and Director Compensation" in the
Company's 1995 Proxy Statement is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not applicable.

PART IV

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

(a)(1) Financial Statements and Supplementary Data. Consolidated financial
statements of the Company and its subsidiaries are incorporated
under Item 8 of this Form 10-K.

(a)(2) Financial Statement Schedules.

Schedule I. Condensed Financial Information of Registrant............ S-1

Other schedules of Battle Mountain Gold Company and subsidiaries are
omitted because of the absence of the conditions under which they are
required or because the required information is included in the financial
statements or notes thereto.

(a)(3) Exhibits: See attached exhibit index, page E-1, which also
includes the management contracts or compensatory plans or arrangements
required to be filed as exhibits to this Annual Report by Item 601 (10)(iii)
of Regulation S-K.

(b) Reports on Form 8-K: None

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

BATTLE MOUNTAIN GOLD COMPANY

By /s/ Karl E. Elers
-----------------------------
Karl E. Elers
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER

Date: March 27, 1995

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.

Signature Title Date
--------- ----- ----
/s/ Karl E. Elers Chairman of the Board, March 27, 1995
- -------------------------- Chief Executive Officer
(Karl E. Elers) and Director (Principal
Executive Officer)

/s/ R. Dennis O'Connell Vice President - Finance and March 27, 1995
- -------------------------- Chief Financial Officer
(R. Dennis O'Connell) (Principal Financial and
Accounting Officer)

DOUGLAS J. BOURNE*
DELO H. CASPARY*
CHARLES E. CHILDERS*
JACK R. CROSBY*
RODNEY L. GRAY* A majority of the Directors March 27, 1995
TED H. PATE* of the Registrant
KENNETH R. WERNEBURG*

*By /s/ Karl E. Elers
----------------------
(Karl E. Elers,
ATTORNEY IN FACT)

BATTLE MOUNTAIN GOLD COMPANY
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED BALANCE SHEET

December 31,
----------------------
1994 1993
--------- ---------
(Expressed in thousands)

ASSETS
Current Assets:
Cash and cash equivalents $ 19,315 $ 59,195
Receivables:
Subsidiaries* 31,339 35,561
Other 1,834 5,518
Materials and supplies, at average cost 2,165 2,395
Other current assets 5,343 5,744
TOTAL CURRENT ASSETS 59,996 108,413
Investments
Subsidiaries* 374,724 348,819
Other 42,915 27,842
Net property, plant and equipment 34,296 17,247
Other assets 1,960 2,174
--------- ---------
TOTAL ASSETS $ 513,891 $ 504,495
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Payables:
Subsidiaries* $ - $ -
Other 2,290 1,803
Payroll and related benefits accrued 1,797 1,709
Accrued interest 6,000 6,000
Other current liabilities 1,253 1,827
TOTAL CURRENT LIABILITIES 11,340 11,339
Long-term debt 100,000 100,000
Deferred income tax 9,352 5,630
Other liabilities 17,565 17,966
TOTAL LIABILITIES 138,257 134,935
--------- ---------
SHAREHOLDERS' EQUITY 375,634 369,560
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 513,891 $ 504,495
--------- ---------
--------- ---------
<FN>
* Eliminated in consolidation

This condensed statement should be read in conjunction with
the Consolidated Financial Statements and Notes thereto
which are included in Item 8 herein.

S-1

BATTLE MOUNTAIN GOLD COMPANY
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENT OF INCOME

Year ended December 31,
----------------------------------
1994 1993 1992
---- ---- ----
(Expressed in thousands)

GROSS REVENUE $ 18,990 $ 21,854 $ 63,718
Less: Freight, allowances &
royalties 195 262 744
-------- -------- --------
NET SALES 18,795 21,592 62,974
-------- -------- --------
COSTS AND EXPENSES
Mining costs 2,939 8,272 12,343
Milling and other plant costs 9,808 14,213 27,540
Depreciation, depletion and 6,453 4,684 8,028
amortization
Exploration, evaluation and
other lease costs 435 636 2,260
Asset write-downs - - 6,000
General and administrative
expenses 8,544 8,196 12,871
Taxes, other than income 1,113 1,151 1,812
-------- -------- --------
Total costs and expenses 29,293 37,152 70,854
-------- -------- --------
OPERATING (LOSS) (10,498) (15,560) (7,880)
Interest income from
subsidiaries, net* 2,388 2,722 4,094
Other interest income, net 1,334 180 347
Other income (expense), net (325) 86 (1,523)
-------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES
AND EQUITY IN INCOME(LOSS) OF
SUBSIDIARIES AND CUMULATIVE
EFFECTS OF ACCOUNTING CHANGES (7,101) (12,572) (4,962)
Income tax expense(benefit) 2,519 (4,274) 3,553
-------- -------- --------
INCOME (LOSS) BEFORE EQUITY IN
INCOME (LOSS) OF SUBSIDIARIES
AND CUMULATIVE EFFECTS OF
ACCOUNTING CHANGES (9,620) (8,298) (8,515)

Cumulative effects of accounting
changes (net of taxes)** - - (7,914)
-------- -------- --------
INCOME (LOSS) BEFORE EQUITY IN
INCOME (LOSS) OF SUBSIDIARIES (9,620) (8,298) (16,429)
Equity in income (losses) of
subsidiaries 19,192 3,893 (19,974)
-------- -------- --------
NET INCOME(LOSS) 9,572 (4,405) (36,403)
Preferred dividends 7,475 3,738 -
-------- -------- --------
NET INCOME (LOSS) TO COMMON SHARES $ 2,097 $ (8,143) $(36,403)
-------- -------- --------
-------- -------- --------
<FN>
* Eliminated in consolidation
** For 1992, includes adoption of SFAS 106 ($5,341) and SFAS
109 ($2,573).

This condensed statement should be read in conjunction with the
Consolidated Financial Statements and Notes thereto which are
included in Item 8 herein.

S-2

BATTLE MOUNTAIN GOLD COMPANY
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENT OF CASH FLOWS

Year ended December 31,
----------------------------------
1994 1993 1992
---- ---- ----
(Expressed in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME(LOSS) $ 9,572 $ (4,405) $ (36,403)
Adjustments to reconcile net income(loss)
to cash flows from operating activities:
Depreciation, depletion and amortization 6,453 4,684 8,028
Exploration and evaluation costs 435 636 2,260
Asset write-downs - - 6,000
Gain from sale of assets - (741) -
Cumulative effects of accounting changes - - 7,914
Reclamation costs 170 582 1,682
Undistributed (income) losses of subsidiaries* (10,071) (3,070) 27,270
Deferred income tax benefit 3,722 (878) (426)
Change in current accounts receivable and
payable with subsidiaries* 4,299 1,044 (1,017)
Change in other current assets and
liabilities 5,483 (7,785) (1,620)
Other net changes (356) 2,486 (318)
--------- -------- ---------
Total Adjustments 10,135 3,042 49,773
--------- -------- ---------
NET CASH FLOWS FROM(USED IN) OPERATING
ACTIVITIES 19,707 (8,270) 13,370
--------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of assets - 2,878 1,822
Investment in subsidiaries* (5,200) (12,358) (6,934)
Investment in Crown Jewel (10,305) (7,595) (6,862)
Investment in Niugini Mining* - - (8,220)
Capital expenditures (30,636) (3,839) (3,950)
Exploration and evaluation expenditures (435) (636) (2,260)
Other, net (1,573) 111 13
--------- -------- ---------
NET CASH FLOWS USED IN INVESTING ACTIVITIES (48,149) (21,439) (26,391)
--------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from stock issuances 691 111,840 -
Cash proceeds from borrowings - 30,500 94,335
Cash dividend payments (11,505) (7,743) (7,996)
Debt repayments - (53,051) (71,835)
Other, net (624) - -
--------- -------- ---------
NET CASH FLOWS (USED IN)FROM FINANCING (11,438) 81,546 14,504
ACTIVITIES
--------- -------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (39,880) 52,660 1,483
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 59,195 6,535 5,052
--------- -------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 19,315 $ 59,195 $ 6,535
--------- -------- ---------
--------- -------- ---------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid (received) during the year for:
Interest, net of amount capitalized - 4 15
Income taxes, net (3,405) 892 1,500

<FN>
* Eliminated in consolidation

This condensed statement should be read in conjunction with the
Consolidated Financial Statements and Notes thereto which are
included in Item 8 herein.

S-3

INDEX OF EXHIBITS

EXHIBIT NO. DOCUMENT
- ----------- --------

*3(a) -- Restated Articles of Incorporation of the Company, as
amended and restated through May 11, 1988 (Exhibit 4(a) to
the Company's Registration Statement on Form S-3 as filed
with the Commission on January 14, 1994; Registration
No. 33-51921).

*3(b) -- Certificate of Resolution Establishing Designation,
Preferences and Rights of $3.25 Convertible Preferred Stock
(Exhibit 4(b) to the Company's Registration Statement on Form
S-3 as filed with the Commission on January 14, 1994;
Registration No. 33-51921).

*3(c) -- Bylaws of the Company, as amended through April 27, 1988
(Exhibit 3(b) to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1988; File No. 1-9666).

*4(a)(1) -- Rights Agreement, dated November 10, 1988, between the
Company and NCNB Texas National Bank, as Rights Agent
(Exhibit to the Company's Form 8 filed with the Commission
on November 30, 1988, amending the Company's Current Report
on Form 8-K dated November 21, 1988; File No. 1-9666).

*4(a)(2) -- First Amendment to Rights Agreement, dated July 30, 1992,
between the Company and the Bank of New York, as successor
Rights Agent (Exhibit 4(a)(2) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1992; File
No. 1-9666).

*4(b) -- Specimen Stock Certificate for the Common Stock of the
Company (Exhibit 4(b) to the Company's Annual Report on Form
10-K for the year ended December 1, 1988; File No. 1-9666).

*4(c) -- Fiscal and Paying Agency Agreement, dated as of January 4,
1990, between the Company and Citibank, N.A., Fiscal Agent
(Exhibit 4(c) to the Company's Annual Report on Form 10-K for
the year ended December 31, 1989; File No. 1-9666).

*4(d)(1) -- Credit Agreement, dated as of December 29, 1989, among the
Company, the banks named therein and Citibank, N.A., as
agent, as amended (Exhibit 4(a) to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1992;
File No. 1-9666).

E-1

*4(d)(2) -- Amendment to Credit Agreement, dated April 30, 1994, among
the Company, the lenders parties thereto and Citibank, N.A.,
as agent (Exhibit 4 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1994; File No. 1-9666).

*4(e) -- Investment Agreement, dated May 22, 1992, between Empresa
Minera Inti Raymi S.A. and International Finance Corporation
(Exhibit 4(e) to the Company's Annual Report on Form 10-K for
the year ended December 31, 1992; File No. 1-9666).

*4(f)(1) -- Finance Agreement, dated as of September 14, 1992, between
Empresa Minera Inti Raymi S.A. and Overseas Private
Investment Corporation (Exhibit 4(f) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1992;
File No. 1-9666).

4(f)(2) -- First Amendment to Finance Agreement and Limited Waiver,
effective as of December 31, 1994, between Empresa Minera
Inti Raymi S.A. and Overseas Private Investment Corporation.

*4(g) -- Loan Agreement, dated June 29, 1992, between Empresa Minera
Inti Raymi S.A. and Corporacion Andina de Fomento (English
translation) (Exhibit 4(g) to the Company's Annual Report on
Form 10-K for the year ended December 31, 1992; File No.
1-9666).

+*10(a)(1) -- Battle Mountain Gold Company 1988 Deferred Income Stock
Option Plan, as amended through September 1, 1988
(Exhibit 10(a) to the Company's Post-Effective Amendment
No. 1 to Registration Statement on Form S-8 as filed with the
Commission on September 2, 1988; Registration No. 33-22146).

+*10(a)(2) -- Amendment to Battle Mountain Gold Company 1988 Deferred
Income Stock Option Plan dated February 23, 1992 (Exhibit
10(a)(2) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1992; File No. 1-9666).

+10(a)(3) -- Amendment to Battle Mountain Gold Company 1988 Deferred
Income Stock Option Plan effective February 9, 1995.

+10(a)(4) -- Specimen of Deferred Income Stock Option Agreement for
non-employee directors of the Company, as amended and
restated.

+*10(a)(5) -- Specimen of Deferred Income Stock Option Agreement for
officers of the Company, as amended and restated (Exhibit
10(a)(4) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1992; File No. 1-9666).

E-2

+*10(b)(1) -- 1985 Stock Option Plan of the Company, as amended and
restated effective April 7, 1993 (Exhibit 10(a) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993; File No. 1-9666).

+*10(b)(2) -- Specimen of the Company's 1985 Stock Option Plan
Non-Qualified Stock Option Agreement for executive officers
of the Company (Exhibit 10(a)(1) to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1993;
File No. 1-9666).

+*10(b)(3) -- Specimen of the Company's 1985 Stock Option Plan Incentive
Stock Option Agreement for executive officers of the Company
(Exhibit 10(a)(2) to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1993; File No. 1-9666).

+*10(c)(1) -- Battle Mountain Gold Company 1986 Restricted Stock Plan, as
amended and restated (Exhibit 4(d) to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1988;
File No. 1-9666).

+*10(c)(2) -- Specimen of Agreement under the Company's 1986 Restricted
Stock Plan (Exhibit 10(c)(2) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1992;
File No. 1-9666).

+*10(d)(1) -- Battle Mountain Gold Company 1988 Long-Term Performance Unit
Plan, as amended and restated effective July 1, 1992 (Exhibit
10(d)(1) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1992; File No. 1-9666).

+*10(d)(2) -- Specimen of Agreement under the Company's 1988 Long-Term
Performance Unit Plan (Exhibit 10(d)(2) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1992; File No. 1-9666).

+*10(e)(1) -- Battle Mountain Gold Company Deferred Compensation Plan
(Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1993; File No. 1-9666).

+*10(e)(2) -- Specimen of the Company's Deferred Compensation Agreement for
directors of the Company (Exhibit 10(d) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1986; File No. 0-13728).

+*10(f)(1) -- Battle Mountain Gold Company Executive Supplemental
Retirement Income Plan (Exhibit 10(f)(1) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1992; File No. 1-9666).

E-3

+-*10(f)(2) -- Specimen of the Company's Executive Supplemental Retirement
Income Plan Agreement (Exhibit 10(f)(2) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1992; File No. 1-9666).

+-*10(g)(1) -- Specimen of the Company's Severance Agreements with officers
of the Company regarding certain benefits payable in the
event of change of control of the Company (Exhibit 10(f) to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1986; File No. 0-13728).

+*10(g)(2) -- Severance Agreement, dated June 5, 1992, between the Company
and R. Dennis O'Connell (Exhibit 10(g)(2) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1992; File No. 1-9666).

+*10(h) -- Battle Mountain Gold Company Contribution Equalization Plan,
as amended and restated effective as of November 10, 1988
(Exhibit 10(h) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1992; File No. 1-9666).

+*10(i) -- Battle Mountain Gold Company Executive Productivity Bonus
Plan, as amended and restated effective January 1, 1994
(Exhibit 10(i) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993; File No. 1-9666).

*10(j)(1) -- Battle Mountain Gold Company Non-Qualified Stock Option Plan
for Outside Directors. (Exhibit 10(m) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1991;
File No. 1-9666).

10(j)(2) -- Amendment to Battle Mountain Gold Company Non-Qualified Stock
Option Plan for Outside Directors effective January 1, 1995.

*10(j)(3) -- Specimen of Director's Stock Option Agreement under the
Company's Non-Qualified Stock Option Plan for Outside
Directors (Exhibit 10(j)(2) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1992;
File No. 1-9666).

*10(k) -- Heads of Agreement, dated March 23, 1989, among the Company,
Niugini Mining Limited and the individuals listed on the
signature page thereto (Exhibit 10(k) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1988;
File No. 1-9666).

*10(l) -- Mining Lease, dated May 5, 1987, granted by the Queensland
(Australia) Department of Mines to Pajingo Gold Mine Pty.
Ltd. (Exhibit 28(a) to the Company's Current Report on Form
8-K dated February 14, 1990; File No. 1-9666).

E-4

*10(m) -- Mining Lease, dated October 1, 1987, as amended, between
Earth Sciences, Inc. and Battle Mountain Gold Company
(Exhibit 28(b) to the Company's Current Report on Form 8-K
dated February 14, 1990; File No. 1-9666).

+*10(n)(1) -- 1994 Long-Term Incentive Plan of Battle Mountain Gold
Company, as effective April 21, 1994 (Exhibit 10(a)(1) to
the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1994; File No. 1-9666).

+*10(n)(2) -- Specimen of the Company's 1994 Long-Term Incentive Plan
Non-Qualified Stock Option Agreement (Exhibit 10(a)(2) to
the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1994; File No. 1-9666).

+*10(n)(3) -- Specimen of the Company's 1994 Long-Term Incentive Plan
Incentive Stock Option Agreement (Exhibit 10(a)(3) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994; File No. 1-9666).

+*10(n)(4) -- Specimen of the Company's 1994 Long-Term Incentive Plan
Restricted Stock Agreement (Exhibit 10(a)(4) to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1994; File No. 1-9666).

+10(n)(5) -- Specimen of the Company's 1994 Long-Term Incentive Plan
Performance Unit Agreement.

+10(o)(1) -- Specimen Split-Dollar Agreement (Individual).

+10(o)(2) -- Specimen Amendment to Split-Dollar Agreement (Individual).

+10(o)(3) -- Specimen Split-Dollar Agreement (Trustee).

+10(o)(4) -- Specimen Amendment to Split-Dollar Agreement (Trustee).

11 -- Computation of Earnings Per Common Share.

12 -- Computation of Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Dividends.

21 -- Subsidiaries of the Company.

23(a) -- Consent of Arthur Andersen LLP.

23(b) -- Consent of Coopers & Lybrand.

24 -- Powers of Attorney.

E-5

27 -- Financial Data Schedule for the year ended December 31, 1994.

__________________________

* Incorporated by reference as indicated.

+ Represent management contracts or compensatory plans or arrangements
required to be filed as exhibits to this Annual Report by
Item 601(10)(iii) of Regulation S-K.

- - Pursuant to Instruction 2 accompanying paragraph (a) and the Instruction
accompanying paragraph (b)(10)(iii)(B)(6) of Item 601 of Regulation S-K,
the registrant has not filed each executive officer's individual Executive
Supplemental Retirement Income Agreement with the Company as an exhibit
hereto; the registrant has agreements substantially identical to Exhibit
10(f)(2) above with each of Karl E. Elers, Kenneth R. Werneburg, Andre,
Douchane, Joseph L. Mazur, R. Dennis O'Connell, Robert J. Quinn and Fred
B. Reisbick except that the monthly benefits for such executive officers
under such agreements are $12,917, $10,292, $6,083, $6,125, $6,458, $5,750
and $4,417, respectively. In addition, the registrant has not filed each
executive officer's individual Severance Agreement with the Company as an
exhibit hereto; the registrant has agreements substantially identical to
Exhibit 10(g)(1) above with each of Messrs. Elers, Werneburg, Mazur,
Quinn, Douchane and Reisbick.

E-6