PURSUANT TO RULE NO. 424(b)(5)
REGISTRATION NO. 33 -54249
333-59141
333-82671
PROSPECTUS SUPPLEMENT
(To Prospectus Dated May 9, 2001)
$275,000,000
Newmont Mining Corporation
8 5/8% Notes due 2011
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The notes will bear interest at the rate of 8 5/8% per year. Interest on the
notes is payable on May 15 and November 15 of each year, beginning on November
15, 2001. The Notes will mature on May 15, 2011. We may redeem some or all the
notes at any time at the price described under the heading "Description of
Notes--Optional Redemption."
The notes will be obligations of our company and will rank equally with all
of our other unsecured indebtedness.
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Investing in the notes involves risks. See "Risk Factors" beginning on page
S-9.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the attached prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
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Per Note Total
-------- ------------
Public Offering Price 99.729% $274,254,750
Underwriting Discount 0.650% $ 1,787,500
Proceeds to Newmont (before expenses) 99.079% $272,467,250
Interest on the notes will accrue from May 14, 2001 to date of delivery.
The underwriters expect to deliver the notes to purchasers on or about May
14, 2001.
Book-Running Manager
Salomon Smith Barney JP Morgan
HSBC
Scotia Capital
Barclays Capital
BNY Capital Markets, Inc.
Tokyo-Mitsubishi International plc
UBS Warburg
May 9, 2001
You should rely only on the information contained in or incorporated by
reference in this prospectus supplement and the attached prospectus. We have
not authorized anyone to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information contained in this
prospectus supplement or the attached prospectus is accurate as of any date
other than the date on the front of this prospectus supplement.
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TABLE OF CONTENTS
Page
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Prospectus Supplement
Forward-Looking Statements................................................... S-3
About Newmont................................................................ S-4
Recent Financial Results..................................................... S-8
Risk Factors................................................................. S-9
Use of Proceeds.............................................................. S-12
Capitalization............................................................... S-12
Selected Financial Data...................................................... S-13
Description of Notes......................................................... S-14
Underwriting................................................................. S-16
Legal Matters................................................................ S-17
Prospectus
About This Prospectus........................................................ 1
Newmont...................................................................... 1
Use of Proceeds.............................................................. 1
Ratios of Earnings to Fixed Charges and Preferred Stock Dividends............ 1
Description of Capital Stock................................................. 2
Description of Common Stock.................................................. 3
Description of Preferred Stock............................................... 6
Description of Common Stock Warrants......................................... 10
Description of Debt Securities............................................... 12
Description of Debt Security Warrants........................................ 22
U.S. Federal Income Tax Considerations as a Real Property Holding Corporation 23
Plan of Distribution......................................................... 24
Legal Opinion................................................................ 24
Experts...................................................................... 25
Where You Can Find More Information.......................................... 25
S-2
FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus supplement and the attached
prospectus, including information incorporated by reference, are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act, and are intended to be covered by the safe harbor created by
those sections. Our forward-looking statements include, without limitation, the
following:
. estimates of future gold production for specific operations and on a
consolidated basis;
. estimates of future production costs, exploration expenditures and other
expenses for specific operations and on a consolidated basis;
. estimates of future capital expenditures and other cash needs for specific
operations and on a consolidated basis and expectations as to the funding
thereof;
. statements as to the projected development of certain ore deposits,
including estimates of development and other capital costs, financing
plans with respect thereto and expected production commencement dates;
. estimates of mine life;
. estimates of future costs and other liabilities for certain environmental
matters; and
. estimates of reserves.
Our forward-looking statements are subject to risks, uncertainties and other
factors which could cause actual results to differ materially from future
results expressed or implied by those forward-looking statements. Cautionary
statements setting forth important factors that could cause actual results to
differ materially from our forward-looking statements are described below in
"Risk Factors" and discussed in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2000, which is incorporated by reference in the
attached prospectus, and include, but are not limited to:
. the price of gold and copper;
. interest and currency exchange rates;
. operating performance of equipment, processes and facilities;
. domestic and foreign laws or regulations, particularly relating to the
environment and mining;
. domestic and international economic and political conditions;
. the ability of joint venture partners to meet their obligations; and
. the ability of Newmont to obtain or maintain necessary financing.
Given these uncertainties, investors are cautioned not to place undue
reliance on our forward-looking statements. We disclaim any intent or
obligation to update publicly any forward-looking statements set forth in this
prospectus supplement, the attached prospectus, or incorporated herein by
reference, whether as a result of new information, future events or otherwise.
S-3
ABOUT NEWMONT
Unless otherwise indicated, the information in this prospectus supplement
gives effect to our January 2001 acquisition of Battle Mountain Gold Company.
It is important for you to read and consider all information contained in this
prospectus supplement and the attached prospectus in making your investment
decision. You should also read and consider the information in the documents we
have referred you to in "Where You Can Find More Information" in the attached
prospectus.
Newmont is the second largest producer of gold in the world, based on ounces
of production. In 2000, we produced gold from operations in Nevada and
California and, outside of the United States, from operations in Peru,
Indonesia, Mexico and Uzbekistan. Our average cash cost of production for 2000
was approximately $170 per ounce, compared to a Western world average of $186
per ounce. We also produced copper concentrates from the Batu Hijau copper/gold
deposit in Indonesia. On January 10, 2001, we completed our acquisition of
Battle Mountain Gold Company and, as a result, we also produce gold from
operations in Canada, Australia and Bolivia. Gold reserves at December 31, 2000
totaled 66.3 million contained equity ounces compared with 66.5 million
contained equity ounces at December 31, 1999.
Including our subsidiaries, partnerships and joint ventures, we sold 5.7
million equity ounces of gold in 2000 and 4.9 million equity ounces in 1999. We
use the term "equity ounces" to mean that portion of gold produced, or included
in proven and probable reserves, which is attributable or proportionate to our
ownership interest.
Approximately 65% of our gold production in both 2000 and 1999 came from
North American operations and 35% from overseas operations. In 2000, 44% of our
overseas equity production, or 16% of our total equity production, was
attributable to Minera Yanacocha in Peru.
Gold
Most of our revenue comes from the sale of refined gold into the
international market. The gold produced at each of our operations is sent to
refiners to produce bullion that meets the required market standard of 99.95%
pure gold. Gold has two main categories of use--product fabrication and bullion
investment. Fabricated gold has a variety of end uses, including jewelry,
electronics, dentistry, industrial and decorative uses, medals, medallions and
official coins.
Our gold sales are generally made at the average price prevailing during the
month in which the gold is delivered to the customer plus an interest factor.
The gold market is characterized by price volatility. Between January 1, 1991
and March 1, 2001 the price per ounce of gold on the London Bullion Market
ranged from a high of $415 to a low of $253.
On April 27, 2001 the late fixing price for gold on the London Bullion
Market was $264.60 per ounce and the spot market price of gold on the New York
Commodity Exchange was $263.90 per ounce.
The supply of gold consists of a combination of new production from mining
and stocks of bullion and fabricated gold held by governments, financial
institutions, industrial organizations and private individuals. In recent
years, mine production has accounted for 60%-65% of the total supply of gold.
The price of gold is affected by numerous factors beyond our control,
including:
. purchases, sales and leasing of gold reserves by governments and central
banks;
. rates of inflation and the strength of the U.S. dollar;
. global and regional economic activity; and
. speculative trading.
S-4
Copper
Refined copper, the final product from the treatment of concentrates, is
incorporated into wire and cable products for use in the construction, electric
utility, communication and transportation industries. Copper is also used in
industrial equipment and machinery, consumer products and a variety of other
electrical and electronic applications and is used to make brass. Materials
that compete with copper include aluminum, plastics, stainless steel and fiber
optics. We deliver and sell the concentrates produced by Batu Hijau to smelters
in Japan, Korea, Australia and Europe. In 2001, approximately 85% of Batu
Hijau's production will be sold under long-term contracts, and the balance on
the spot market.
Refined copper is an internationally traded commodity. The copper market
differs from the gold market in that copper prices tend to be more cyclical and
more directly affected by the worldwide balance of supply and demand. From
January 1, 1991 to March 1, 2001, the dollar per pound equivalent of the price
of copper on the London Metal Exchange ranged from a high of $1.47 to a low of
$0.61.
On April 27, 2001 the closing spot price of high grade copper on the London
Metal Exchange was equivalent to $0.75 per pound.
Properties
Nevada
Our Nevada operations include Carlin, located west of Elko on the geological
feature known as the Carlin Trend which we discovered in 1961, and operations
in the Winnemucca Region which were acquired in the 1997 merger with Santa Fe
Pacific Gold Corporation. The Carlin Trend is the largest gold district
discovered in North America in the last 50 years. The Winnemucca region
includes the Twin Creeks mine located near Winnemucca, the Lone Tree complex
located near Battle Mountain, and the Battle Mountain complex, acquired through
our recent merger. Currently, at the Battle Mountain complex we are conducting
studies as to the feasibility of developing a large copper/gold deposit, but
have no active mining operations. Production began in 1965 at Carlin, in 1990
at Twin Creeks, and in 1991 at Lone Tree.
Gold production in Nevada totaled approximately 3.0 million ounces in 2000
at a total cash cost of $203 per ounce and 2.5 million ounces in 1999 at a cash
cost of $211 per ounce. In 2000, ore was mined from nine open-pit deposits and
four underground mines.
California
We have one mine in Southern California, Mesquite, that was acquired in the
1997 merger with Santa Fe Pacific Gold Corporation. Located in Imperial County,
it was acquired by Santa Fe in 1993 and has been producing since 1986. Mining
at Mesquite is conducted in two open pits and gold production totaled 130,300
ounces in 2000 and 164,600 ounces in 1999. Total cash costs per ounce were $221
for 2000 and $167 for 1999.
Peru
The properties of Minera Yanacocha S.R.L. are located approximately 375
miles north of Lima and 28 miles north of the city of Cajamarca. In 1986, we
discovered the Yanacocha gold deposit which has since become the largest gold
district in South America. Minera Yanacocha began production in 1993. Prior to
1997, we owned a 38% equity interest in Minera Yanacocha. In 1997, we
consolidated Minera Yanacocha in our financial statements following the
acquisition of an additional 13.35% interest. The remaining interest is held by
Compania de Minas Buenaventura, S.A.A. (43.65%) and the International Finance
Corporation (5%).
Minera Yanacocha has mining rights with respect to a large land position
that includes multiple deposits as well as other prospects. These mining rights
were acquired through assignments of concessions granted by the Peruvian
government. The assignments have a term of 20 years, beginning in the early
1990s, renewable at the option of Minera Yanacocha for another 20 years.
S-5
Four open-pit mines and three leach pads are in operation at Minera
Yanacocha. In late 1999, Minera Yanacocha terminated its contract mining
agreement and, as a result, is achieving improved productivity and efficiency
by conducting mine operations with its own employees. In 2000, production
totaled 1.8 million ounces of gold (921,900 equity ounces) at a total cash cost
of $88 per ounce as compared to 1999 production of 1.7 million ounces of gold
(850,300 equity ounces) at a total cash cost of $103 per ounce.
Uzbekistan
Newmont has a 50% interest in the Zarafshan-Newmont Joint Venture. The
remaining 50% interest is owned by the State Committee for Geology and Mineral
Resources and Navoi Mining and Metallurgical Combine, each a state entity of
Uzbekistan. The joint venture produces gold by crushing and leaching ore from
existing stockpiles of low-grade oxide ore from the nearby government-owned
Muruntau mine. The gold produced by Zarafshan-Newmont is sold in international
markets for U.S. dollars. We provide technical and managerial support to
Zarafshan-Newmont. The State Committee and Navoi guaranteed to furnish
Zarafshan-Newmont with a total of 242 million tons of ore with an average grade
of 0.036 ounces of gold per ton, containing approximately 8.6 million ounces of
gold. In late 2000, the ore supply agreement was amended to add an additional
220 million tons of ore with an average grade of 0.05 ounces of gold per ton.
To handle the additional ore, the joint venture has arranged for construction
of a leach pad extension and an ore supply conveyor system. The amended
agreement extends the life of the operation to at least 2013.
In 2000, total production was 498,800 ounces of gold (249,400 equity ounces)
at a total cash cost of $129 per ounce. In 1999, total production was 543,000
ounces of gold (271,500 equity ounces) at a total cash cost of $161 per ounce.
Indonesia
We have two operating properties in Indonesia--Minahasa, a gold operation,
and Batu Hijau which produces copper/gold concentrates. We own 80% of Minahasa.
The remaining 20% interest is a carried interest held by P.T. Tanjung Serapung,
an Indonesian company. Because we funded 100% of the construction costs, we are
entitled to 100% of the gold production until we recover the bulk of our
investment, including interest. We have a 45% interest in Batu Hijau which we
own through a partnership with an affiliate of Sumitomo Corporation which holds
a 35% interest. The remaining 20% is a carried interest held by P.T. Pukuafu
Indah, an Indonesian company. We are accounting for our investment in Batu
Hijau as an equity investment due to each partner's significant participation
rights in the business. We are entitled to 56.25% of the concentrate production
until we recover the bulk of our investment, including interest.
Minahasa--Our first project in Indonesia, Minahasa, located approximately
1,500 miles northeast of Jakarta on the island of Sulawesi, is a Newmont
discovery and consists of a multi-deposit operation. Production began in 1996.
Minahasa mines and processes ore from the open pit Mesel deposit and a number
of smaller peripheral deposits.
Minahasa produced 364,300 ounces of gold in 2000 at a total cash cost of
$133 per ounce as compared to 343,900 ounces of gold in 1999 at a total cash
cost of $103 per ounce. It is expected that processing from this mine will end
in 2003.
Batu Hijau--Our second project in Indonesia, Batu Hijau, is located on the
island of Sumbawa, approximately 950 miles east of Jakarta. Batu Hijau is a
large copper/gold deposit which we discovered in 1990. The total cost of the
project was approximately $1.83 billion including capitalized interest during
construction and working capital.
In July 1997, agreements for $1 billion in financing for the Batu Hijau
project were signed. The financing is non-recourse to Newmont and Sumitomo.
S-6
Development and construction activities began in 1997 and start-up took
place in late 1999. The mine produced 520.8 million pounds of copper and
320,100 ounces of gold in concentrates in 2000. We do not actually produce gold
for commercial sale at Batu Hijau, but rather obtain credit for the value of
the gold produced, which offsets the cost of producing copper. After such
credit, the total cash cost in 2000 was $0.57 per pound of copper.
Mexico
In Mexico, we have a 44% interest in La Herradura which is located in
northwest Sonora, Mexico. It commenced production in June 1998. The Penoles
group, Mexico's largest silver producer, holds a 56% interest and is the
operator. Mining is conducted in two open pits and the ore is processed by
run-of-mine heap-leaching. In 2000, La Herradura produced 114,800 ounces of
gold, (50,500 equity ounces) at a total cash cost of $131 per ounce. In 1999,
La Herradura produced 91,400 ounces of gold, (40,200 equity ounces) at a total
cash cost of $159 per ounce.
The Battle Mountain Acquisition
On January 10, 2001, we completed the acquisition of Battle Mountain Gold
Company, issuing approximately 24.1 million shares of our common stock. We also
exchanged 2.3 million shares of newly issued $3.25 convertible preferred stock
for all outstanding shares of Battle Mountain $3.25 convertible preferred
stock. The transaction was accounted for as a pooling of interests. At the time
of the transaction, Battle Mountain had a 50% or greater interest in four
active mining operations which are briefly described below.
Golden Giant Mine
The Golden Giant Mine, which is 100% owned, is located approximately 25
miles east of the town of Marathon in Ontario, Canada and is mined using
underground mining methods. The Golden Giant Mine has been in production since
1985. Production in 2000 was approximately 334,000 ounces at a total cash cost
of $151 per ounce. Production in 1999 was approximately 356,000 ounces at a
total cash cost of $145 per ounce.
Holloway Mine
The Holloway underground mine is located approximately 35 miles east of
Matheson in Ontario, Canada, and about 400 miles northeast of Golden Giant. The
mine is owned by a joint venture in which we have an 84.65% interest. The
remaining 15.35% interest is held by Teddy Bear Valley Mines. The Holloway Mine
commenced production late in 1996. Production in 2000 was approximately 93,000
equity ounces at a total cash cost of $204 per ounce. Production in 1999 was
approximately 91,200 equity ounces at a total cash cost of $198 per ounce.
Kori Kollo Mine
The Kori Kollo open pit mine is on the high plane in western Bolivia near
Oruru on government mining concessions issued to a Bolivian corporation,
Empresa Minera Inti Raymi S.A., which owns and operates the Kori Kollo mine. We
own 88% of this corporation with the remaining 12% owned by Zeland Mines, S.A.
In 2000, the mine produced 241,000 equity ounces of gold at a total cash cost
of $204 per ounce. In 1999, the mine produced 256,400 equity ounces, at a total
cash cost of $190 per ounce.
Vera/Nancy Mine
The Vera/Nancy mine is located in Australia, approximately 120 miles
southeast of Townsville, Queensland on 10.5 square miles held under a mineral
lease from the state of Queensland. We have a 50% interest in the Vera/Nancy
mine. The other 50% interest is held by Normandy Mining Limited, an Australian
gold mining company which is the operator of the mine. Production in 2000 was
116,000 equity ounces of gold at a total cash cost of $98 per ounce. Production
in 1999 was 67,000 equity ounces of gold at a total cash cost of $124 per
ounce.
S-7
Hedging
We generally sell our production at market prices. From time to time,
however, we have used commodity instruments to protect the selling price of
certain anticipated gold production. While we do not currently engage in an
active hedging program, we monitor the market on an ongoing basis and may
periodically elect to enter into hedging transactions. However, the hedging
policy authorized by our Board of Directors limits total hedging activity to 16
million ounces of gold. Forward sales contracts were utilized for a portion of
the gold production from our Minahasa mine in Indonesia and from our Nevada
operations. Sales of gold under forward sales contracts represented 3% in 2000,
6% in 1999 and 18% in 1998 of our total equity production. No costs were
incurred for forward sales contracts and there were no margin requirements
related to these contracts. The use of forward sales contracts has protected us
against declining gold prices over the past three years, with respect to the
covered ounces.
Exploration
We spent $77.4 million in 2000 and $74.2 million in 1999 for exploration and
reserve development. For 2001, we have budgeted approximately $45 million for
exploration. Exploration work is regularly conducted in areas surrounding our
existing mines for the purpose of locating additional deposits and determining
mine geology. In 2000, nearly one-half of the exploration budget was allocated
for work around existing mine sites.
RECENT FINANCIAL RESULTS
On May 1, 2001, we announced results for the first quarter of 2001. We had a
net loss from operations of $5.5 million for the first quarter of 2001,
excluding merger and restructuring costs and a non-cash mark-to-market gain, on
metal sales of $424.1 million. For the first quarter of 2000, we had net income
from operations of $10.3 million, on metals sales of $453.1 million.
For the first quarter of 2001, we reported a net loss of $39.2 million,
including $43.7 million in after tax, merger related costs and restructuring
costs associated with staff reductions, offset in part by a $10.1 million after
tax, non-cash mark-to-market gain on call options. We had a net loss of $6.5
million for the 2000 quarter, after an accounting change related to revenue
recognition.
We produced 1.4 million ounces of gold at a cash cost of $172 per ounce in
the first quarter of 2001, compared with 1.3 million ounces of gold at a cash
cost of $171 per ounce in the first quarter of 2000. Total production costs in
the quarter were $221 per ounce, $9 less than in the 2000 quarter. This
performance improvement helped offset a $24 decline in our realized gold price,
which averaged $264 per ounce during the first quarter of 2001, compared to
$288 per ounce in the 2000 quarter.
Net cash flow provided by operations also was adversely affected by lower
gold revenues, as well as merger and restructuring costs, declining to $18.6
million in the 2001 quarter from $92.4 million in the 2000 quarter.
S-8
RISK FACTORS
You should carefully consider the following risks and all other information
contained in this prospectus supplement and attached prospectus in deciding
whether to invest in the notes.
A Substantial or Extended Decline in Gold Prices Would Have a Material
Adverse Effect on our Business
Our business is extremely dependent on the price of gold, which is affected
by numerous factors beyond our control. Factors tending to put downward
pressure on the price of gold include:
. sales and leasing of gold reserves by governments and central banks;
. a low rate of inflation and a strong U.S. dollar;
. global and regional depression or reduced economic activity; and
. speculative trading.
Any drop in the price of gold adversely impacts our revenues, profits and cash
flows.
In addition, sustained low prices can:
. reduce revenues by production cutbacks due to cessation of the mining of
deposits or portions of deposits that have become uneconomic at the
then-prevailing gold price;
. halt the development of new projects;
. reduce funds available for exploration, with the result that depleted
reserves are not replaced;
. reduce the existing reserves by removing ore from reserves that cannot be
economically mined or treated at prevailing prices; or
. result in the write-off of assets whose value is impaired by low gold
prices.
Increased Energy Costs Could Affect Profitability of Our Nevada Operations
The cash cost of production at any particular mining location is frequently
subject to great variation from one year to the next due to a number of factors
such as changing waste-to-ore ratios, ore grade and metallurgy. In the past a
cash cost swing of 10% at any location has not been a significant factor in our
profitability. At the present depressed gold price level, however, there is an
additional risk that large increases in energy costs projected for our Nevada
operations in the coming year arising out of the current West Coast energy
crisis, when combined with expected cash cost increases otherwise within the
normal range of annual variation, may necessitate a reduction in our Nevada
production to a level where our consolidated revenues and income are materially
adversely affected.
We Continually Need to Obtain Additional Reserves for Gold Production
We must continually replace gold reserves depleted by production. It may
take many years from the initial phases of drilling before production is
possible and during that time economic feasibility of production may change. We
need to make substantial expenditures to establish proven and probable reserves
through drilling, to determine metallurgical processes to extract the metals
from the ore and, in the case of new properties, to construct mining and
processing facilities.
Estimates of Proven and Probable Ore Reserves are Uncertain
When we make estimates of proven and probable reserves and cash operating
costs, they are subject to considerable uncertainty. Our estimates are, to a
large extent, based on interpretations of geologic data obtained
S-9
from drill holes and other sampling techniques. We use feasibility studies to
derive estimates of cash operating costs based upon anticipated tonnage and
grades of ore to be mined and processed, configuration of the ore body,
expected recovery rates of the gold, copper or other metals from the ore,
comparable facility, equipment and operating costs, anticipated climatic
conditions and other factors. As a result, actual cash operating costs and
economic returns on projects may differ significantly from our original
estimates.
Remediation Costs for Federal Superfund Law Liabilities May Exceed the
Provisions We Have Made
We have conducted remediation work on two inactive sites as a result of
liability under the federal Superfund Law. At one of these two sites,
remediation requirements have not been finally determined and the ultimate cost
cannot be estimated with certainty. At a third site, an inactive uranium mine
and mill, significant remediation has not begun due to the failure to date of
federal agencies either to agree on a plan which was submitted or to propose a
remediation plan of their own. The environmental standards that may ultimately
be imposed remain uncertain and there is a risk that the costs of the
remediation may exceed the provision we have made for such remediation by a
material amount. Whenever a previously unrecognized remediation claim becomes
known or a previously estimated cost is increased that amount of additional
cost is expensed in the same period and this can materially reduce net income
in that period.
We Incur Costs to Comply with Environmental and Other Governmental Regulations
Our exploration, production and processing operations are extensively
regulated under various U.S. federal, state and local and foreign laws relating
to the protection of air and water quality, hazardous waste management and mine
reclamation. We have incurred current and may have potential future liability
for remediation and other environmental costs. Further, the regulatory
environment for our operations could change in ways that would substantially
increase liability or the costs of compliance and have a material adverse
effect on our results of operations or financial position.
Our Operations Outside North America are Subject to the Risks of Doing Business
Abroad
Over the past few years, we have devoted a significant portion of our
capital expenditures to international ventures. Approximately 65% of our gold
production in both 2000 and 1999 came from North American operations and 35%
from overseas operations. In 2000, 44% of our overseas equity production, or
16% of our total equity production, was attributable to Minera Yanacocha in
Peru. At December 31, 2000, approximately 44% of our total long-lived assets
were related to our overseas operations, with 45% of that total in Indonesia
and 47% in Peru.
These non-North American exploration, development and production activities
are potentially subject to increased political and economic risks, including:
. cancellation or renegotiation of contracts;
. disadvantages of competing against companies from countries that are not
subject to U.S. laws and regulations, including the Foreign Corrupt
Practices Act;
. changes in foreign laws or regulations;
. changes in tax laws;
. royalty and tax increases or claims;
. retroactive tax or royalty claims;
. expropriation or nationalization of property;
. currency fluctuations;
. foreign exchange controls;
. import and export regulations;
S-10
. environmental controls;
. risks of loss due to civil strife, acts of war, guerrilla activities and
insurrection; and
. other risks arising out of foreign sovereignty over the areas in which our
operations are conducted.
Consequently, our non-North American exploration, development and production
activities may be substantially affected by factors beyond our control, any of
which could materially adversely affect our financial position or results of
operations. Furthermore, in the event of a dispute arising from non-North
American operations, we may be subject to the exclusive jurisdiction of courts
outside North America or may not be successful in subjecting non-North American
persons to the jurisdiction of the courts in North America, which could
adversely affect the outcome of a dispute.
We Have a Substantial Amount of Indebtedness
As of December 31, 2000, we had approximately $1.2 billion of indebtedness
outstanding. This relatively high level of indebtedness could have important
consequences on our operations, including:
. we may need to use a large portion of the money we earn to pay principal
and interest on our other debt, which will reduce the amount of money
available to finance our operations and other business activities;
. our debt level may make us more vulnerable to economic downturns and
adverse developments in our businesses and markets;
. our debt level may reduce our flexibility in responding to changing
business and economic conditions, including increased competition in our
industry; and
. our debt level may limit our ability to pursue other business
opportunities, borrow money for operations or capital in the future and
implement our business strategy.
We expect to obtain the money to pay our expenses and to pay principal and
interest on our debt from our cash flow and refinancings. Our ability to meet
these requirements will depend on our future financial performance, which will
be affected by financial, business, economic, and other factors. We will not be
able to control many of these factors, such as economic conditions in the
markets in which we operate. We cannot be certain that our future cash flow
will be sufficient to allow us to pay principal and interest on our debt
(including the notes) and meet our other obligations. If we do not have enough
money to do so, we may be required to refinance all or part of our existing
debt including the notes, sell assets or borrow more money. We cannot assure
you that we will be able to do so on commercially reasonable terms, if at all.
We May Suffer Losses from Hedging
We sometimes use commodity market instruments to protect the selling price
of a portion of our future production. We also sometimes contract to sell
future production at an agreed price. Our net income in 1999 was reduced by the
recognition of an unrealized non-cash mark-to-market loss of $44.8 million
(pre-tax) on call options we sold in 1999. In 2000, a non-cash unrealized gain
of $26.8 million (pre-tax) resulted from the change in fair value since
December 31, 1999. Similar gains or losses may recur in the future. An increase
in the price of gold will likely increase the fair value of such options
resulting in non-cash charges against our quarterly income. However, over the
life of the options, any charges would be restored to income. If the gold price
rises above the price for which future production has been sold, we will have
an opportunity loss.
Mining Accidents or Other Adverse Events at a Mining Location Could Reduce Our
Production Levels
At any of our operations, production may fall below historic or estimated
levels as a result of mining accidents such as a pit wall failure in an open
pit mine, or cave-ins and flooding at underground mines. In addition,
production may be unexpectedly reduced at a location if, during the course of
mining, unfavorable ground conditions are encountered, ore grades are lower
than expected or the physical or metallurgical characteristics of the ore are
less amenable to mining and treatment than expected or planned.
S-11
USE OF PROCEEDS
Our net proceeds from this offering are estimated to be approximately $272.1
million after deducting the underwriting discounts and estimated offering
expenses. We will use these net proceeds to repay amounts outstanding under our
revolving credit facility, which as of March 31, 2001 totalled $215 million and
bore interest at a rate of 5.36% per annum. The balance of the net proceeds
will be used for general corporate purposes. Pending application of the net
proceeds as described above, we intend to invest the net proceeds from this
offering in short-term, investment-grade, interest-bearing securities.
CAPITALIZATION
The following table sets forth a summary of our consolidated capitalization
at March 31, 2001, and as adjusted to give effect to the sale of the notes
offered by this prospectus supplement and the application of the net proceeds
from that sale.
March 31, 2001
-----------------------
Actual As Adjusted
---------- ----------
(in thousands)
Long-term debt:
Notes offered hereby...................................................... $ -- $ 275,000
Other long-term debt (less current portion)............................... 1,164,950 949,950
---------- ----------
Total long-term debt.................................................. 1,164,950 1,224,950
---------- ----------
Minority interest in affiliates.............................................. 200,932 200,932
---------- ----------
Stockholders' equity:
Convertible preferred stock--par value $5.00, authorized and outstanding
2.3 million shares...................................................... 11,500 11,500
Common stock--par value $1.60, authorized 250 million shares; outstanding
185.1 million........................................................... 312,773 312,773
Additional paid-in capital................................................ 1,463,723 1,463,723
Accumulated other comprehensive loss...................................... (30,445) (30,445)
Retained deficit.......................................................... (299,595) (299,595)
---------- ----------
Total stockholders' equity............................................ 1,457,956 1,457,956
---------- ----------
Total capitalization.................................................. $2,823,838 $2,883,838
========== ==========
S-12
SELECTED FINANCIAL DATA
The following financial data include the results of Battle Mountain Gold
Company for the periods indicated. The statement of operations data for the
years ended December 31, 2000, 1999 and 1998, and the balance sheet data as of
December 31, 2000 and 1999 are derived from, and are qualified by reference to,
our financial statements included in our Annual Report on Form 10-K, which have
been audited by Arthur Andersen LLP. The balance sheet data as of December 31,
1998 has been prepared on a basis consistent with the other information
presented. The statement of operations data for the three month periods ended
March 31, 2001 and March 31, 2000 and the balance sheet data as of March 31,
2001 and March 31, 2000 are derived from unaudited financial statements. In the
opinion of our management, the unaudited financial statements have been
prepared on a basis consistent with the financial statements which appear
elsewhere in the documents incorporated by reference in the attached
prospectus, and include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the financial position and
results of operations for such unaudited periods. Historical results are not
necessarily indicative of results to be expected in the future.
The net loss for 2000 includes $58.4 million attributable to asset write
downs, $42.2 million of expenses relating to the settlement of a legal dispute
with respect to our 1997 acquisition of an additional interest in Minera
Yanacocha, a $23.9 million write down in the market value of securities
acquired in the Battle Mountain Gold Company merger, and $6.9 million of
expenses relating to the Battle Mountain Gold Company merger, as well as a
non-cash mark-to-market gain on call options of $26.8 million. The net loss for
1999 includes $39.5 million attributable to asset write downs, as well as a
$44.8 million non-cash mark-to-market loss on call options. The net loss for
1998 includes $719.8 million attributable to asset write downs. The net loss
for the three month period ended March 31, 2001 includes $60.5 million in
merger and restructuring expenses, as well as a $15.6 million non-cash
mark-to-market gain on call options.
Our selected financial data set forth below should be read in conjunction
with our financial statements, including the notes thereto, and "Management's
Discussion and Analysis of Financial Condition and Results of Operations", both
of which can be found in our Annual Report on Form 10-K for the year ended
December 31, 2000 and in our Quarterly Report on Form 10-Q for the quarter
ended March 31, 2001, which are incorporated by reference in the attached
prospectus.
Three Months
Ended March 31, Years Ended December 31,
------------------- -----------------------------
2001 2000 2000 1999 1998
-------- -------- -------- -------- --------
( dollars in millions, except per ounce)
Statement of Operations Data:
Sales...................................... $ 424.1 $ 453.1 $1,809.5 $1,627.1 $1,730.5
Net income (loss) before cumulative effect
of a change in accounting principle
applicable to common shares.............. (39.1) 6.1 (89.8) (102.0) (608.6)
Net loss applicable to common shares....... (39.2) (6.5) (102.3) (102.0) (641.5)
Balance Sheet Data (at period end):
Total assets............................... $3,819.6 $3,903.4 $3,916.7 $3,951.9 $4,022.0
Long-term debt, including current portion.. 1,213.3 1,321.9 1,199.8 1,246.9 1,489.8
Stockholders' equity....................... 1,457.9 1,554.2 1,500.0 1,570.3 1,687.3
Other Data:
Cash flow provided by operations........... $ 18.6 $ 92.4 $ 567.8 $ 451.2 $ 451.2
Equity ounces produced (thousands of
ounces).................................. 1,389.5 1,290.4 5,724.2 4,946.1 4,960.0
Equity ounces sold (thousands of ounces)... 1,422.3 1,387.4 5,727.8 4,946.2 4,954.3
Average realized price per equity ounce.... $ 264 $ 288 $ 281 $ 284 $ 307
Cash costs per equity ounce................ $ 172 $ 171 $ 170 $ 173 $ 179
Reserves (in millions of contained ounces). n/a n/a 66.3 66.5 61.7
S-13
DESCRIPTION OF NOTES
The following description of the particular terms of the notes offered by
this prospectus supplement supplements the description of the general terms and
provisions of the debt securities included in the attached prospectus. The
notes will be issued under an indenture, dated as of May 1, 2001, between us
and Citibank, N.A., as trustee. The following summary of the notes is qualified
in its entirety by reference to the description of the debt securities and
indenture contained in the accompanying prospectus.
The notes will mature on May 15, 2011. The notes will be our unsecured
obligations and will rank equally with all of our other unsecured and
unsubordinated indebtedness. The notes will be issued in fully registered form
only, in denominations of $1,000 and integral multiples of that amount.
We may, without the consent of the holders of notes, issue additional notes
having the same ranking and the same interest rate, maturity and other terms as
the notes. Any additional debt securities having such similar terms, together
with the notes, will constitute a single series of debt securities under the
indenture.
We will pay interest on the notes at a rate of 8 5/8% per annum
semi-annually in arrears on May 15 and November 15 of each year, commencing
November 15, 2001, to the persons in whose names the notes are registered at
the close of business on April 30 or October 31, as the case may be (whether or
not a business day), immediately preceding the relevant interest payment date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
If any interest payment date falls on a day that is not a business day, the
interest payment will be postponed to the next day that is a business day, and
no interest on such payment will accrue for the period from and after such
interest payment date. If the maturity date of the notes falls on a day that is
not a business day, the payment of interest and principal may be made on the
next succeeding business day, and no interest on such payment will accrue for
the period from and after the maturity date. Interest payments for the notes
will include accrued interest from and including the date of issue or from and
including the last date in respect of which interest has been paid, as the case
may be, to, but excluding, the interest payment date or the date of maturity,
as the case may be.
As used in this prospectus supplement, "business day" means any day, other
than a Saturday or Sunday, that is neither a legal holiday nor a day on which
banking institutions are authorized or required by law or regulation to close
in The City of New York.
Optional Redemption
The notes may be redeemed, in whole or in part, at our option at any time or
from time to time. The redemption price for the notes to be redeemed on any
redemption date will be equal to the greater of the following amounts:
. 100% of the principal amount of the notes being redeemed on the redemption
date; or
. the sum of the present values of the remaining scheduled payments of
principal and interest on the notes being redeemed on that redemption date
(not including any portion of any payments of interest accrued to the
redemption date) discounted to the redemption date on a semiannual basis
at the Treasury Rate (as defined below), as determined by the Reference
Treasury Dealer (as defined below), plus 45 basis points;
plus, in each case, accrued and unpaid interest on the notes to the redemption
date.
Notwithstanding the foregoing, installments of interest on notes that are
due and payable on interest payment dates falling on or prior to a redemption
date will be payable on the interest payment date to the registered holders as
of the close of business on the relevant record date according to the notes and
the indenture. The redemption price will be calculated on the basis of a
360-day year consisting of twelve 30-day months.
S-14
We will mail notice of any redemption at least 30 days but not more than 60
days before the redemption date to each registered holder of the notes to be
redeemed. Once notice of redemption is mailed, the notes called for redemption
will become due and payable on the redemption date and at the applicable
redemption price, plus accrued and unpaid interest to the redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the Comparable Treasury Price
for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Reference Treasury Dealer as having a maturity comparable to
the remaining term of the notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the notes.
"Comparable Treasury Price" means, with respect to any redemption date, (A)
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations, or (C) if only
one Reference Treasury Dealer Quotation is received, such Quotation.
"Reference Treasury Dealer" means (A) Salomon Smith Barney Inc. or Chase
Securities Inc. (or their respective affiliates which are Primary Treasury
Dealers), and their respective successors; provided, however, that if any of
the foregoing shall cease to be a primary U.S. Government securities dealer in
New York City (a "Primary Treasury Dealer"), we will substitute therefor
another Primary Treasury Dealer; and (B) any other Primary Treasury Dealer(s)
selected by us.
"Reference Treasury Dealer Quotation" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by such Reference Treasury Dealer at 5:00 p.m. (New York
City time) on the third business day preceding such redemption date.
On and after the redemption date, interest will cease to accrue on the notes
or any portion of the notes called for redemption (unless we default in the
payment of the redemption price and accrued interest). On or before the
redemption date, we will deposit with a paying agent (or the trustee) money
sufficient to pay the redemption price of and accrued interest on the notes to
be redeemed on that date. If less than all of the notes of any series are to be
redeemed, the notes to be redeemed shall be selected by lot by DTC, in the case
of notes represented by a global security, or by the trustee by a method the
trustee deems to be fair and appropriate, in the case of notes that are not
represented by a global security.
The notes will not be entitled to the benefit of any mandatory redemption or
sinking fund.
S-15
UNDERWRITING
Salomon Smith Barney Inc. and Chase Securities Inc. are acting as
representatives of the underwriters named below.
Subject to the terms and conditions stated in the underwriting agreement
dated the date of this prospectus supplement, each underwriter named below has
agreed to purchase, and we have agreed to sell to that underwriter, the
principal amount of notes set forth opposite the underwriter's name.
Principal Amount
Underwriter of Notes
----------- ----------------
Salomon Smith Barney Inc.......... $151,250,000
J.P. Morgan Securities Inc........ 68,750,000
HSBC Securities (USA) Inc......... 11,000,000
Scotia Capital (USA) Inc.......... 11,000,000
Barclays Capital Inc.............. 8,250,000
BNY Capital Markets, Inc.......... 8,250,000
Tokyo-Mitsubishi International plc 8,250,000
UBS Warburg LLC................... 8,250,000
----------------
Total.......................... $275,000,000
================
The underwriting agreement provides that the obligations of the underwriters
to purchase the notes included in this offering are subject to approval of
legal matters by counsel and to other conditions. The underwriters are
obligated to purchase all the notes if they purchase any of the notes.
The underwriters propose to offer some of the notes directly to the public
at the public offering price set forth on the cover page of this prospectus
supplement and some of the notes to dealers at the public offering price less a
concession not to exceed 0.40% of the principal amount of the notes. The
underwriters may allow, and dealers may reallow a concession not to exceed
0.25% of the principal amount of the notes on sales to other dealers. After the
initial offering of the notes to the public, the representatives may change the
public offering price and concessions.
The following table shows the underwriting discounts and commissions that we
are to pay to the underwriters in connection with this offering (expressed as a
percentage of the principal amount of the notes).
Paid by
Newmont
------
Per note ......................... 0.65%
In connection with the offering, Salomon Smith Barney, on behalf of the
underwriters, may purchase and sell notes in the open market. These
transactions may include over-allotment, syndicate covering transactions and
stabilizing transactions. Over-allotment involves syndicate sales of notes in
excess of the principal amount of notes to be purchased by the underwriters in
the offering, which creates a syndicate short position. Syndicate covering
transactions involve purchases of the notes in the open market after the
distribution has been completed in order to cover syndicate short positions.
Stabilizing transactions consist of certain bids or purchases of notes made for
the purpose of preventing or retarding a decline in the market price of the
notes while the offering is in progress.
The underwriters also may impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when
Salomon Smith Barney, in covering syndicate short positions or making
stabilizing purchases, repurchases notes originally sold by that syndicate
member.
Any of these activities may have the effect of preventing or retarding a
decline in the market price of the notes. They may also cause the price of the
notes to be higher than the price that otherwise would exist in the open market
in the absence of these transactions. The underwriters may conduct these
transactions in the over-the-counter market or otherwise. If the underwriters
commence any of these transactions, they may discontinue them at any time.
We estimate that our total expenses for this offering will be $375,000.
S-16
In the ordinary course of their respective businesses, the underwriters and
their affiliates have engaged and may in the future engage in investment and
commercial banking transactions with us and our affiliates. Salomon Smith
Barney is an affiliate of Citibank N.A. and Chase Securities is an affiliate of
certain of our other lenders. Each of these banking affiliates are lenders
under our revolving credit facility. In addition to its lending relationships
with us, Citibank N.A. is the trustee under the indenture under which the notes
will be issued. Since more than 10% of the net proceeds of the offering will be
used to repay indebtedness that we owe to affiliates of the underwriters under
our revolving credit facility, the offering will be made in accordance with
Rule 2710(c)(8) of the Conduct Rules of the National Association of Securities
Dealers, Inc.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments
the underwriters may be required to make because of any of those liabilities.
Any sales to U.S. investors by Tokyo-Mitsubishi International plc shall be
made through it affiliate, the New York Branch of the Bank of Tokyo-Mitsubishi,
Ltd.
LEGAL MATTERS
The validity of the notes will be passed upon for us by White & Case LLP,
New York, New York. Mayer Brown & Platt, Chicago, Illinois, will pass on
certain matters for the underwriters.
S-17
PROSPECTUS
NEWMONT MINING CORPORATION
We may offer by this prospectus the following securities for sale:
o Common Stock
o Preferred Stock
o Warrants to purchase Common Stock
o Senior Debt Securities
o Subordinated Debt Securities
o Warrants to purchase Debt Securities
We will provide the specific terms of the securities that we are offering in
supplements to this prospectus. You should read this prospectus and any
supplement carefully before you invest.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities that may be offered by
this prospectus or have determined that this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
This prospectus is dated May 9, 2001.
TABLE OF CONTENTS
About This Prospectus ..................................................... 1
Newmont ................................................................... 1
Use of Proceeds ........................................................... 1
Ratios of Earnings to Fixed Charges and
Preferred Stock Dividends ............................................. 1
Description of Capital Stock .............................................. 2
Description of Common Stock ............................................... 3
Description of Preferred Stock ............................................ 6
Description of Common Stock Warrants ...................................... 10
Description of Debt Securities ............................................ 12
Description of Debt Security Warrants ..................................... 22
U.S. Federal Income Tax
Considerations as a Real Property
Holding Corporation ................................................... 23
Plan of Distribution ...................................................... 24
Legal Opinion ............................................................. 24
Experts ................................................................... 25
Where You Can Find More Information ....................................... 25
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC utilizing a "shelf" registration process. The shelf process allows us to
sell any combination of the securities described in this prospectus in one or
more offerings up to a total dollar amount of $500 million.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement with specific information about the terms of the
securities. The prospectus supplement may also update or change information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement together with the additional information described under
the heading WHERE YOU CAN FIND MORE INFORMATION.
NEWMONT
We were incorporated in 1965 under the laws of Delaware.
We are engaged, directly or indirectly through our subsidiaries and
affiliates, in the production of gold, the development of mining properties, the
exploration for gold and the acquisition of such properties worldwide. We
produce gold from mines in Nevada, California, and, outside of the United
States, from operations in Peru, Indonesia, Mexico and Uzbekistan. We also
produce copper concentrates from a copper/gold deposit at a second location in
Indonesia. As a result of our merger with Battle Mountain, we now have added
gold production from mines in Canada, Australia and Bolivia.
Our principal executive offices are located at 1700 Lincoln Street,
Denver, Colorado 80203. Our telephone number is (303) 863-7414.
USE OF PROCEEDS
Unless we state otherwise in a prospectus supplement, the net proceeds
from the sale of any securities will be used for general corporate purposes
including the repayment of debt, acquisitions, additions to working capital and
capital expenditures.
RATIOS OF EARNINGS TO FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
The following table contains our ratios of earnings to fixed charges
for the periods indicated, giving effect to our January 2001 acquisition of
Battle Mountain Gold Company. Earnings in 1998 were inadequate to cover fixed
charges with a deficiency of $706 million.
Three Months ended Year ended December 31,
------------------ -----------------------
March 31, 2001 2000 1999 1998 1997 1996
-------------- ---- ---- ---- ---- ----
0.1 1.4 0.5 -- 1.9 1.1
The following table contains our ratios of earnings to fixed charges
and preferred stock dividends for the periods indicated, giving effect to our
acquisition of Battle Mountain Gold Company. Earnings in 1998 were inadequate to
cover fixed charges and preferred stock dividends with a deficiency of $714
million.
1
Three Months ended Year ended December 31,
------------------ -----------------------
March 31, 2001 2000 1999 1998 1997 1996
-------------- ---- ---- ---- ---- ----
0.1 1.3 0.5 -- 1.8 1.0
For the purposes of these tables, fixed charges are calculated by
adding the following:
o interest expensed and capitalized,
o amortized premiums, discounts and capitalized expenses related to
indebtedness,
o an estimate of the interest within rental expense and
o preferred stock dividend requirements of consolidated
subsidiaries, if any.
For purposes of these tables, earnings are calculated by adding:
o pre-tax income from continuing operations before adjustment for
minority interests in consolidated subsidiaries or income or loss
from equity investees,
o fixed charges,
o amortization of capitalized interest,
o distributed income of equity investees and
o our share of pre-tax losses of equity investees for which charges
arising from guarantees are included in fixed charges
o and then subtracting:
o capitalized interest,
o preferred stock dividend requirements of consolidated
subsidiaries, if any, and
o minority interests in pre-tax income of subsidiaries that have
not incurred fixed charges.
The term "equity investees" means investments that we account for using the
equity method of accounting. The term "preferred stock dividend" means the
amount of pre-tax earnings that is required to pay the dividends on outstanding
preferred stock.
DESCRIPTION OF CAPITAL STOCK
The rights of our stockholders are governed by Delaware law, our
restated certificate of incorporation and our by-laws. The following is a
summary of the material terms of our capital stock and is qualified in its
entirety by reference to the applicable provisions of Delaware law, our restated
certificate of incorporation and by-laws and the Rights Agreement, dated as of
August 31, 2000, between us and ChaseMellon Shareholder Services LLC, as rights
agent, relating to rights to purchase shares of our Series A Junior
Participating Preferred Stock. Copies of our restated certificate of
incorporation, our by-laws and our Rights Agreement are attached as exhibits to
our Annual Report on Form 10-K which has been incorporated in this prospectus by
reference.
As of March 1, 2001, we had 255,000,000 shares of authorized capital
stock. Those shares consisted of:
o 5,000,000 shares of preferred stock, of which 2,300,000 were
outstanding; and
o 250,000,000 shares of common stock, of which 188,002,163 shares were
outstanding.
2
DESCRIPTION OF COMMON STOCK
Listing
Our common stock is listed on the New York Stock Exchange under the
symbol "NEM" and on the Paris Bourse, the Brussels Stock Exchange and the Swiss
Stock Exchange.
Dividends
The owners of common stock may receive dividends when declared by the
board of directors. Subject to the terms of any outstanding preferred stock,
owners of common stock may not receive dividends until we have satisfied our
obligations to any holders of such preferred stock.
Voting Rights
Each share of common stock is entitled to one vote in the election of
directors and other matters. There is no cumulative voting.
By-Laws
Our board of directors may adopt, amend or repeal our by-laws subject
to Delaware law and our certificate of incorporation. The board's power to
change our by-laws is also subject to the power of stockholders to do the same.
Liquidation Rights
If we liquidate, dissolve or wind-up our business, whether voluntarily
or not, common stockholders will share equally in the distribution of all assets
remaining after we pay creditors and preferred stockholders.
Redemption
The common stock is not redeemable or convertible.
Anti-Takeover Provisions
Article NINTH of our restated certificate of incorporation and our
stockholder rights plan may make it more difficult for certain corporations,
entities or persons to acquire control of us or to remove management.
Approval of Certain Mergers, Consolidations, Sales and Leases
Article NINTH of our restated certificate of incorporation requires us
to get the approval of 80% of our stockholders who are entitled to vote in
elections of directors to enter the following types of transactions:
o a merger or consolidation between us and another corporation that
holds 10% of our outstanding shares;
o the sale or lease of all or a substantial part of our assets to
another corporation or entity that holds 10% of our outstanding
shares; or
o any sale or lease to us of assets worth more than $10 million in
exchange for our securities by another corporation or entity who
holds 10% of our outstanding shares.
3
However, Article NINTH does not apply to any transaction if
o the board of directors has approved the transaction before the
other corporation, person or entity has become a holder of 10% of
our outstanding shares or
o if we or our subsidiaries own a majority of the outstanding voting
shares of the other corporation.
Article NINTH can only be altered or repealed with the approval of 80%
of our stockholders.
Stockholder Rights Plan
On August 31, 2000, our board of directors declared a dividend of one
Series A Junior Participating Preferred Stock purchase right for each
outstanding share of common stock, par value $1.60 per share. The dividend was
paid on September 11, 2000 to the stockholders of record on that date.
In general terms, the Rights Agreement works by imposing a significant
penalty upon any person or group which acquires 15% or more of our outstanding
common stock without the approval of our board.
The Rights
Our board authorized the issuance of one right with respect to each
share of common stock outstanding on September 11, 2000. The rights initially
traded with, and were inseparable from, the common stock. The rights are
evidenced only by certificates that represent shares of our common stock. New
rights accompany any new shares of our common stock issued after September 11,
2000 until the "distribution date" described below.
Exercise Price
Each right allows its holder to purchase from us one one-thousandth of
a share of Series A Junior Participating Preferred Stock, referred to as
"preferred shares," for $100, once the rights become exercisable. This portion
of a preferred share will give the stockholder approximately the same dividend,
voting, and liquidation rights as would one share of common stock. Prior to
exercise, the right does not give its holder any dividend, voting, or
liquidation rights.
Exercisability
The rights will not be exercisable until
o 10 days after the public announcement that a person or group
has become an "acquiring person" by obtaining beneficial
ownership of 15% or more of our outstanding common stock, or,
if earlier,
o 10 business days, or a later date determined by our board
before any person or group becomes an acquiring person, after
a person or group begins a tender or exchange offer which, if
completed, would result in that person or group becoming an
acquiring person.
We refer to the date when the rights become exercisable as the
"distribution date." Until that date, the common stock certificates also
evidence the rights, and any transfer of shares of common stock constitutes a
transfer of rights. After that date, the rights will separate from the common
stock and be evidenced by book-entry credits or by rights certificates that we
will mail to all eligible holders of common stock. Any rights held by an
acquiring person are void and may not be exercised.
Our board may reduce the threshold at which a person or group becomes
an acquiring person from 15% to not less than 10% of our outstanding common
stock.
4
Consequences of a Person or Group Becoming an Acquiring Person
o Flip In. If a person or group becomes an acquiring person, all
holders of rights except the acquiring person may, for $100,
purchase shares of our common stock with a market value of
$200, based on the market price of the common stock prior to
such acquisition.
o Flip Over. If we are later acquired in a merger or similar
transaction after the rights distribution date, all holders of
rights except the acquiring person may, for $100, purchase
shares of the acquiring corporation with a market value of
$200 based on the market price of the acquiring corporation's
stock, prior to such merger.
Preferred Share Provisions
Each one one-thousandth of a preferred share, if issued:
o will not be redeemable.
o will entitle holders to quarterly dividend payments of $0.001 per
share, or an amount equal to the dividend paid on one share of
common stock, whichever is greater.
o will entitle holders upon liquidation either to receive $1 per
share or an amount equal to the payment made on one share of common
stock, whichever is greater.
o will have the same voting power as one share of common stock.
o if shares of our common stock are exchanged via merger,
consolidation, or a similar transaction, will entitle holders
to a per-share payment equal to the payment made on one share
of common stock.
The value of a one one-thousandth interest in a preferred share
approximates the value of one share of common stock.
Expiration
The rights will expire on September 11, 2010.
Redemption
Our board may redeem the rights for $0.001 per right at any time before
any person or group becomes an acquiring person. If our board redeems any
rights, it must redeem all of the rights. Once the rights are redeemed, the only
right of the holders of rights will be to receive the redemption price of $0.001
per right. The redemption price will be adjusted if we have a stock split or
stock dividends of our common stock.
Exchange
After a person or group becomes an acquiring person, but before an
acquiring person owns 50% or more of our outstanding common stock, our board may
extinguish the rights by exchanging one share of common stock or an equivalent
security for each right, other than rights held by the acquiring person.
Anti-Dilution Provisions
Our board may adjust the purchase price of the preferred shares, the
number of preferred shares issuable and the number of outstanding rights to
prevent dilution that may occur from a stock dividend, a stock split, a
5
reclassification of the preferred shares or common stock. No adjustments to
the exercise price of less than 1% may be made.
Amendments
The terms of the Rights Agreement may be amended by our board without
consent of the holders of the rights. However, our board may not amend the
rights agreement to lower the threshold at which a person or group becomes an
acquiring person to below 10% of our outstanding common stock. In addition, our
board may not cause a person or group to become an acquiring person by lowering
this threshold below the percentage interest that such person or group already
owns. After a person or group becomes an acquiring person, our board may not
amend the agreement in a way that adversely affects holders of the rights.
The Rights Have Anti-Takeover Effects
The stockholder rights will cause substantial dilution to a person or
group that attempts to acquire us on terms not approved by our board, except by
means of an offer conditioned on a substantial number of rights being acquired.
The rights should not interfere with any merger or other business combination
approved by our board, as the rights may be redeemed by us at the required
redemption price, or may be amended so as not to apply to such a combination,
prior to the time that a person or group has acquired beneficial ownership of
15% or more of the shares of our common stock.
The Rights Agreement, specifying the terms of the rights and including,
as an exhibit, the form of the certificate of designation setting forth the
terms of the Series A Junior Participating Preferred Stock, is attached as an
exhibit to our registration statement on Form 8-A, dated September 6, 2000, and
is incorporated in this document by reference. The foregoing description of the
Series A Junior Participating Preferred Stock purchase rights is qualified in
its entirety by reference to this exhibit. You should read the Rights Agreement.
DESCRIPTION OF PREFERRED STOCK
General
Our restated certificate of incorporation authorizes us to issue
5,000,000 shares of preferred stock and it is issuable in series. Our board of
directors has the power to fix various terms for each series of preferred stock,
including the following:
o voting powers,
o designations,
o preferences,
o the relative participating and optional or other rights,
o qualifications and
o limitations and restrictions.
$3.25 Convertible Preferred Stock
In connection with the merger of our wholly owned subsidiary, Bounty
Merger Corp., with Battle Mountain Gold Company, on the effective date of the
merger, we issued 2,300,000 shares of $3.25 convertible preferred stock. The
following is a summary of our convertible preferred stock, par value $5.00 per
share. This summary is qualified in its entirety by reference to the form of the
certificate of designation of our $3.25
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convertible preferred stock, a copy of which is attached as an exhibit to our
Annual Report on Form 10-K for the year ended December 31, 2000, and is
incorporated in this prospectus by reference.
Dividend Rights
Holders of shares of the convertible preferred stock are entitled to
receive, when, as and if declared by our board of directors out of funds legally
available therefor, an annual cash dividend of $3.25 per share, payable in equal
quarterly installments on February 15, May 15, August 15 and November 15, of
each year, except that if such date is not a Saturday, Sunday or legal holiday,
then such dividend will be payable on the next succeeding day that is not a
Saturday, Sunday or legal holiday. Dividends on the convertible preferred stock
will accrue without interest and be cumulative from the date of initial
issuance. Dividends will be payable to holders of record as they appear on our
stock transfer books on such record dates as are fixed by our board of
directors.
If dividends are not paid in full, or declared in full and sums set
apart for the payment thereof, upon the convertible preferred stock and any
other preferred stock ranking on a parity as to dividends with the convertible
preferred stock, all dividends declared upon shares of convertible preferred
stock and such other parity preferred stock will be declared pro rata so that in
all cases the amount of dividends declared and paid per share on the convertible
preferred stock and such other parity preferred stock will bear to each other
the same ratio that accumulated dividends per share on the shares of convertible
preferred stock and such other preferred stock bear to each other. Except as set
forth above, unless full cumulative dividends on the convertible preferred stock
have been paid, or declared and sums set aside for the payment thereof,
dividends (other than in common stock or any of our other stock ranking junior
to the convertible preferred stock as to dividends and as to liquidation rights)
may not be paid, or declared and set aside for payment, and other distributions
may not be made upon the common stock or on any of our other stock ranking
junior to or on a parity with the convertible preferred stock as to dividends;
and neither common stock nor any of our other stock ranking junior to the
convertible preferred stock as to dividends may be redeemed, purchased or
otherwise acquired for any consideration by us.
Conversion Rights
Each share of convertible preferred stock is convertible into shares of
our common stock at any time at the conversion price of $100 adjusted as
described in the following paragraphs. If shares of convertible preferred stock
are earlier called for redemption, the conversion right with respect thereto
will terminate at the close of business on the date fixed for redemption and
will be lost if not exercised prior to that time, unless we default in payment
of the redemption obligation.
Fractional shares of common stock will not be delivered upon
conversion, but a cash adjustment will be paid in respect of such fractional
interests based on the then-current market price of the common stock.
The conversion price is subject to adjustment upon certain events,
including
(1) the issuance of common stock as a dividend or distribution on
the common stock;
(2) a combination, subdivision or reclassification of common stock;
(3) the issuance to all holders of common stock of rights or
warrants (expiring within 45 days after the record date for
determining stockholders entitled to receive them) entitling
them to subscribe for or purchase common stock at less than
the then-current market price; and
(4) the distribution to all holders of common stock or capital
stock (other than common stock), evidences of our
indebtedness, assets (excluding regular periodic cash
dividends), or rights or warrants to subscribe for or purchase
our securities (excluding the dividends, distributions, rights
and warrants mentioned above).
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No adjustment of the conversion price will be required to be made in
any case until cumulative adjustments amount to 1% of such price. We will not
adjust the conversion price with respect to rights or warrants issued pursuant
to certain employee benefit plans. Adjustments to the conversion price with
respect to preferred stock purchase rights or similar rights or warrants
hereafter adopted or issued will generally be made when such preferred stock
purchase rights or similar rights or warrants are exercised. From time to time
we may decrease the conversion price by any amount for any period of at least 20
days, so long as the decrease is irrevocable during such period, in which case
we will give at least 15 days' notice of such decrease. In addition to the
foregoing adjustments, we are permitted to make such reductions in the
conversion price as we determine to be advisable in order that any stock
dividend, subdivision or shares, distribution of rights to purchase stock or
securities or distribution of securities convertible into or exchangeable for
stock made by Newmont to its stockholders will not be taxable to the recipients.
Except as stated above, we will not adjust the conversion price for the
issuance of common stock, or any securities convertible into or exchangeable for
common stock or carrying the right to purchase any of the foregoing, in exchange
for cash, property or services.
In case of any consolidation or merger to which we are a party (other
than a merger or consolidation in which we are the continuing corporation and in
which the common stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, securities or other property of another
corporation), or in case of any sale or transfer to another corporation of our
property as an entirety or substantially as an entirety, or in the case of any
statutory exchange of securities with another corporation (other than in
connection with a merger or acquisition), there will be no adjustment of the
conversion price. In any such case, each holder of the then-outstanding
convertible preferred stock will have the right, at the holder's option, to
convert such holder's convertible preferred stock into the kind and amount of
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or transfer by a holder of the number of shares of
common stock into which such convertible preferred stock might have been
converted immediately prior to such consolidation, merger, statutory exchange,
sale or transfer, assuming such holder of common stock failed to exercise such
holder's rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such consolidation, merger, statutory
exchange, sale or transfer (provided that if the kind or amount of securities,
cash or other property receivable upon such consolidation, merger, statutory
exchange, sale or transfer is not the same for each non-electing share, then the
kind and amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or transfer for each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). In the case of a cash merger
of us into another corporation or any other cash transaction of the type
mentioned above, the effect of these provisions would be that thereafter each
share of convertible preferred stock would be convertible at the conversion
price in effect at such time into the same amount of cash per share into which
each share of convertible preferred stock would have been convertible had such
share been converted into common stock immediately prior to the effective date
of such cash merger or transaction. Depending upon the terms of such cash merger
or transaction, the aggregate amount of cash into which such shares of
convertible preferred stock would be converted could be more or less than the
liquidation preference with respect to such convertible preferred stock.
Convertible preferred stock surrendered for conversion after the close
of business on a record date for payment of dividends and before the opening of
business on the next succeeding dividend payment date (unless such convertible
preferred stock is subject to redemption on a redemption date in that period)
must be accompanied by payment of an amount equal to the dividend thereon which
is to be paid on such dividend payment date. Subject to the foregoing, no
payments or adjustments will be made upon conversion on account of accrued
dividends on the convertible preferred stock or for any dividends or
distributions on any shares of common stock delivered upon such conversion.
Liquidation Rights
In the event of any liquidation, dissolution or winding up of Newmont,
the holders of shares of convertible preferred stock are entitled to receive a
liquidation preference of $50.00 per share, plus an amount equal to any
8
accrued and unpaid dividends to the date of payment before any distribution of
assets is made to holders of common stock or any other stock that ranks junior
to the convertible preferred stock as to liquidation rights.
The holders of convertible preferred stock and all series or classes of
our stock issued after the convertible preferred stock that rank on a parity as
to liquidation rights with the convertible preferred stock are entitled to share
ratably, in accordance with the respective preferential amounts payable on such
stock, in any distribution which is not sufficient to pay in full the aggregate
of the amounts payable thereon. After payment in full of the liquidation
preference of the shares of the convertible preferred stock, the holders of such
shares will not be entitled to any further participation in any distribution of
assets by us. Neither a consolidation, merger or other business combination of
us with or into another corporation or other entity nor a sale or transfer of
all or part of our assets for cash, securities or other property will be
considered a liquidation, dissolution or winding up of us.
Redemption at Option of Newmont
The convertible preferred stock is redeemable, at our option, in whole
or in part, for shares of common stock, at any time, if redeemed during the
12-month period beginning May 15 of the year specified below, at the following
redemption prices:
Price Per
Year Share
---- -----
2000........................ $50.975
2001........................ $50.650
2002........................ $50.325
and thereafter at $50.00 per share, plus in each case accrued and unpaid
dividends to the redemption date. At no time will the convertible preferred
stock be redeemable for cash.
We will issue in payment of the redemption price for each share of
convertible preferred stock to be redeemed such number of shares of common stock
as equals (1) the then-current Redemption Price of the convertible preferred
stock, divided by (2) the market price of the common stock, subject to
adjustment in certain circumstances. The market price will be calculated as the
lower of (1) the average of the daily closing prices of the common stock for the
20 consecutive trading days immediately preceding the first business day
immediately preceding the date of the applicable redemption notice and (2) the
closing price of the common stock on the trading day immediately preceding the
first business day immediately preceding the date of the applicable redemption
notice. The closing price for each day will be the last reported sales price
regular way or, in case no such reported sales takes place on such day, the
average of the closing bid and asked prices regular way for such day, in each
case on the New York Stock Exchange Composite Tape. Fractional shares of common
stock will not be issued upon any redemption of convertible preferred stock,
but, in lieu thereof, we will pay a cash adjustment based on the Market Price.
If fewer than all the outstanding shares of convertible preferred stock
are to be redeemed, we will select those shares to be redeemed pro rata or by
lot or in such other manner as the board of directors may determine. There is no
mandatory redemption or sinking fund obligation with respect to the convertible
preferred stock. In the event that we have failed to pay accrued and unpaid
dividends on the convertible preferred stock, we may not redeem less than all of
the then-outstanding shares of the convertible preferred stock until all such
accrued and unpaid dividends have been paid in full.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of record of shares of
convertible preferred stock to be redeemed at the address shown on the stock
transfer books. After the redemption date, dividends will cease to accrue on the
shares of convertible preferred stock called for redemption and all rights of
the holders of such shares will terminate, except the right to receive shares of
common stock equal to the Redemption Price as described above without interest
or adjustment resulting from changes in the market value of the common stock. At
the close of business on the redemption date, each holder of convertible
preferred stock so redeemed (unless Newmont defaults on its obligations to
deliver shares of
9
common stock or cash) will be, without any further action, deemed a holder
of the number of shares of common stock for which such convertible preferred
stock is redeemable.
Voting Rights
Holders of the convertible preferred stock will have no voting rights
except as described below or as required by law. In exercising any such vote,
each outstanding share of convertible preferred stock will be entitled to one
vote, excluding shares held by Newmont or any entity controlled by us, which
shares will have no voting rights.
Whenever dividends on the convertible preferred stock have not been
paid in an aggregate amount equal to at least six quarterly dividends on such
shares, whether or not consecutive, the number of directors of Newmont will be
increased by two, and the holders of the convertible preferred stock (voting
separately as a class with the holders of any outstanding shares of stock on a
parity as to dividends with the convertible preferred stock ("parity dividend
stock") on which like voting rights have been conferred and are exercisable)
will be entitled to elect such two additional directors to the board of
directors at any meeting of our stockholders at which directors are to be
elected until all such dividends accrued and in default have been paid in full
or set apart for payment in full. The term of office of all directors so elected
will terminate immediately upon such payment or setting apart for payment.
In addition, so long as any convertible preferred stock is outstanding,
we will not, without the affirmative vote or consent of the holders of at least
66-2/3 percent of all outstanding shares of convertible preferred stock, voting
separately as a class, (i) amend, alter or repeal any provision of our
certificate of incorporation or by-laws so as to affect adversely the relative
rights, preferences, qualifications, limitations or restrictions of the
convertible preferred stock, (ii) authorize or issue or increase the authorized
amount of any additional class or series of stock, or any security convertible
into stock of such class or series, ranking senior to the convertible preferred
stock as to dividends or as to rights upon liquidation, dissolution or winding
up of us or (iii) effect any reclassification of the convertible preferred
stock.
Other Provisions
The shares of convertible preferred stock, when issued, will be duly
and validly issued, fully paid and nonassessable.
The holders of shares of convertible preferred stock have no preemptive
rights with respect to any of our securities.
Our convertible preferred stock is listed and traded on the New York
Stock Exchange. The registrar, transfer agent, conversion agent and dividend
disbursing agent for the convertible preferred stock and the transfer agent and
registrar for the common stock issuable upon conversion thereof will be
ChaseMellon Shareholder Services, LLC.
DESCRIPTION OF COMMON STOCK WARRANTS
We may issue warrants for the purchase of common stock. The warrants
may be issued independently or together with any securities offered by any
prospectus supplement. The warrants will be issued under one or more common
stock warrant agreements between us and a bank or trust company as common stock
warrant agent. The common stock warrant agent will be our agent and will not
assume any obligations to any owner of the warrants. The following is a summary
of the separate common stock warrant agreements. This summary is qualified in
its entirety by reference to the form of common stock warrant agreement, a copy
of which is attached as an exhibit to our registration statement on Form S-3 of
which this prospectus forms a part.
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General
Under the common stock warrant agreement, warrants may be issued in one
or more series. The prospectus supplement and the common stock warrant agreement
relating to any series of warrants will include specific terms about the
warrants. These terms include some of the following:
o the type and number of warrants,
o the amount of related common stock for which the warrant can be
exercised and the price or the manner of determining the price and
currency or other consideration to purchase such common stock,
o the expiration date of each warrant,
o the exercise date of each warrant,
o the offering price and currency of each warrant,
o if applicable, the designation and terms of the securities with
which each warrant can be issued,
o any provision dealing with the date on which the warrants and
related securities will be separately transferable,
o any provision granting a mandatory or an optional redemption
provision,
o the identity of the common stock warrant agent,
o the form of the warrant certificates and
o any other terms of the warrant.
The warrants will be represented by certificates. The warrants may be
exchanged under the terms outlined in the common stock warrant agreement. We
will not charge any service charges for any transfer or exchange of warrant
certificates, but we may require payment for tax or other governmental charges
in connection with the exchange or transfer. Until a common stock warrant is
exercised, a holder will not be entitled to any payments on or have any rights
with respect to the common stock issuable upon exercise of the common stock
warrant.
Exercise of Common Stock Warrants
To exercise warrants, the holder must provide the common stock warrant
agent with the following:
o payment of the exercise price,
o certain information required as described on the reverse side of the
warrant certificates,
o the number of warrants to be exercised and
o an executed and completed warrant certificate.
The common stock warrant agent will issue a new warrant certificate for
any warrants not exercised. The exercise price and the number of shares of
common stock that each warrant can purchase will be subject to adjustment in
certain events, including the issuance of a common stock dividend or a
combination, subdivision or
11
reclassification of common stock. No adjustment will be required until
cumulative adjustments require an adjustment of at least 1%.
From time to time, we may reduce the exercise price. No fractional
shares will be issued upon exercise of warrants, but we will pay the cash value
of any fractional shares otherwise issuable. If we enter into any consolidation,
merger, or sale or conveyance of our property as an entirety, the holder of each
outstanding warrant shall have the right to the kind and amount of shares of
stock, other securities, property or cash receivable by a holder of the number
of shares of common stock into which such warrants were exercisable immediately
prior to the occurrence of the event.
Modification of the Common Stock Warrant Agreement
The common stock warrant agreement will permit us and the common stock
warrant agent, without the consent of the common stock warrant holders, to
supplement or amend the agreement in the following circumstances:
o to cure any ambiguity;
o to correct or supplement any provision which may be defective or
inconsistent with any other provisions; or
o to add new provisions regarding certain matters or questions that we
and the common stock warrant agent may deem necessary or desirable
and which do not adversely affect the interests of the common stock
warrant holders.
DESCRIPTION OF DEBT SECURITIES
General
We may offer:
o senior debt securities and
o subordinated debt securities.
Any senior debt securities will be issued under an indenture between us
and Citibank, N.A., as trustee. Any subordinated debt securities will be issued
under a separate indenture between us and Citibank, N.A., as trustee. All
references in this section to debt securities are references to both the senior
debt securities and the subordinated debt securities. All references to the
indentures are references to both the indenture for senior debt securities and
the indenture for the subordinated debt securities. All references to the
trustee include both the trustee for the senior debt securities and the trustee
for the subordinated debt securities.
The following is a summary of the material provisions of the
indentures. This summary is qualified in its entirety by reference to the Trust
Indenture Act of 1939 and the form of indenture.
The debt securities will be our unsecured indebtedness. The senior debt
securities will rank equally with all of our other unsecured and unsubordinated
indebtedness. The subordinated debt securities will be subordinate in right of
payment to our senior debt securities as well as our other indebtedness that we
now or may have in the future. The subordination provisions of the subordinated
debt securities are discussed in greater detail below.
Neither indenture limits the amount of debt securities that we may
issue under such indenture. Unless we state otherwise in the prospectus
supplement, neither indenture limits the amount of other debt that we can issue.
12
Both indentures allow us to issue debt securities in one or more series
with different terms. The indentures provide that debt securities of a single
series can be issued at different times with different interest rates,
redemption and repayment provisions. The prospectus supplement for the series of
debt securities being offered will include specific terms of the debt
securities. These terms will include some or all of the following:
o the title of the debt securities and whether such debt securities
are senior or subordinated,
o the total principal amount and permitted denomination of the debt
securities,
o the percentage of the principal amount of the debt securities at
which the debt securities will be issued and any payments due if the
maturity of the debt securities is accelerated,
o the currency or currencies in which the principal and interest on
the debt securities will be payable,
o the dates on which the principal of the debt securities will mature,
o the interest rate for the debt securities or the method that will be
used to determine the interest rate,
o the dates on which interest on the debt securities will be payable
and the manner in which interest will be paid,
o any mandatory or optional repayment or redemption provisions,
o any sinking fund provisions,
o any index used to determine the amount of payments of principal
and/or interest,
o any additional payment provisions,
o any provision relating to the issuance of discounted debt securities
and
o in the case of debt securities that are convertible into common
stock, the conversion price, the period during which the debt
securities may be converted and any other terms of conversion which
may differ from the applicable indenture.
Some of the debt securities may be sold at a substantial discount below
their stated principal amount and may provide for the payment of no interest or
interest at a rate which at the time of issuance is below market rates. We will
describe the U.S. federal income tax consequences and other special
considerations applicable to any discounted debt securities in the prospectus
supplement relating to the discounted debt securities.
Convertibility of the Debt Securities
The holders of debt securities of a specified series that are
convertible into shares of our common stock will be entitled at certain times
specified in the prospectus supplement to convert any such securities into
common stock. The conversion price and other terms of the conversion will be set
forth in the prospectus supplement.
Subordination of Subordinated Debt Securities
The indebtedness represented by the subordinated debt securities will
be subordinated in right of payment to the prior payment in full of all of our
senior indebtedness.
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The term "senior indebtedness" means the principal of and any premium
and interest on any of our indebtedness outstanding on the date of the
subordinated debt securities indenture or to be created, incurred or assumed by
us after the date of the indenture unless the terms of such indebtedness
specifically state that it is not senior in right of payment to the subordinated
debt securities.
Upon the insolvency, liquidation, bankruptcy, reorganization or similar
proceeding relating to us or our property:
o the holders of our senior indebtedness will be entitled to receive
payment in full of all obligations before payment is made to any
holders of the subordinated debt securities and
o until all obligations with respect to our senior indebtedness are
paid in full, any payment to which the holders of the subordinated
debt securities would be entitled shall be made to the holders of
our senior indebtedness.
In addition, we may not make any payment on account of the subordinated
debt securities, if:
o any of our senior indebtedness is not paid when due or
o any other default on our senior indebtedness occurs and the maturity
of such senior indebtedness is accelerated.
If there is a default with respect to any of our senior indebtedness
other than the two types of default described immediately above and the maturity
of the indebtedness may be accelerated immediately, a representative of the
applicable senior indebtedness has the right to send to us written notice
stating that there has been a default. After receipt of such notice, we may not
make any payments on the subordinated debt securities until the earlier of:
o 179 days after the receipt of the notice,
o the date on which the default which gave rise to the notice is no
longer continuing,
o the date that the default has been waived and any acceleration has
been rescinded in writing or
o the date when the applicable senior indebtedness has been paid in
full.
Not more than one blockage period notice may be given in any
consecutive 360-day period, irrespective of the number of defaults with respect
to our senior indebtedness during such period.
After all of our senior indebtedness is paid in full and all
commitments in respect of the senior indebtedness have expired or terminated and
until the subordinated debt securities are paid in full, holders of the
subordinated debt securities will be subrogated to the rights of holders of our
senior indebtedness to receive distributions applicable to the senior
indebtedness.
Global Notes, Delivery and Form
The debt securities may be issued in the form of one or more global
notes that will be deposited with a depositary identified in a prospectus
supplement. Each note will be registered in the name of the depositary's
nominee. Unless a global note is exchanged in whole or in part for debt
securities in definitive form, a global note may generally be transferred only
as a whole and only to another nominee of the depositary or to a successor
depositary or its nominee.
Unless otherwise stated in the applicable prospectus supplement, the
depositary will be The Depository Trust Company, New York, New York. Currently,
it limits the maximum denomination of any single global note
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to $500 million. Beneficial interests in global notes will be shown on, and
transfers of global notes will be effected only through, records maintained by
DTC and its participants.
DTC has provided us the following information, and we take no
responsibility for its accuracy: DTC is a limited purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the United States Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered under Section 17A of
the Securities Exchange Act of 1934. DTC holds securities that its participants
deposit with DTC. DTC also facilitates the clearance and recording of the
settlement among its participants of securities transactions, such as transfers
and pledges, in deposited securities through computerized records for
participant's accounts. This eliminates the need for physical exchange of
certificates. Direct participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. Other
organizations such as securities brokers and dealers, banks and trust companies
that work through a participant, either directly or indirectly use DTC's
book-entry system. The rules that apply to DTC and its participants are on file
with the SEC.
Pursuant to DTC's procedures, upon issuance of debt securities
represented by a global note in connection with the sale of the debt securities
to one or more underwriters, DTC will credit the accounts of the participants
designated by the underwriters with the principal amount of the debt securities
purchased by the underwriters. Ownership of beneficial interests in a global
note will be shown
o on DTC's records with respect to participants;
o by the participants with respect to indirect participants and
certain beneficial owners; and
o by the indirect participants with respect to all other beneficial
owners.
The laws of some states require that certain persons take physical
delivery in definitive form of the securities which they own. Consequently, the
ability to transfer beneficial interests in a global note may be limited.
Under the indentures, if the nominee of DTC is the registered owner of
a global note, the nominee will be considered the sole owner or holder of the
debt securities. Except as provided below, owners of a global note will not be
entitled to have debt securities registered in their names, will not receive or
be entitled to receive physical delivery of debt securities in definitive form,
and will not be considered the owners or holders thereof under the indentures
for any purpose, including with respect to the giving of any directions,
instructions or approval to the trustee. However, DTC has advised us that
pursuant to its customary practice with respect to the giving of consents and
votes, it will deliver an omnibus proxy to the trustee assigning the related
holder's voting rights to the participant to whose account the debt securities
are credited on the record date. Each proxy will include a list of participants'
positions in the relevant security as of the record date for a consent or vote.
We will wire to DTC's nominee principal and interest payments with
respect to global notes. We and the trustee will treat DTC's nominee as the
owner of the global notes for all purposes. Accordingly, we, the trustee and any
paying agent will have no direct responsibility or liability to pay amounts due
on the global notes to owners of beneficial interests in the global notes or for
maintaining and reviewing any records relating to the beneficial ownership
interest.
It is DTC's current practice, upon receipt of any payment of principal
or interest, to credit participants' accounts on the payment date according to
their holdings of beneficial interests in the global notes as shown on DTC's
records. DTC's current practice is to credit such accounts, as to interest, in
next-day funds and, as to principal, in same-day funds. Payments by participants
to owners of beneficial interests in the global notes will be governed by
standing instructions and customary practices between the participants and the
owners of beneficial interests in the global notes, as is the case with
securities held for the account of customers registered in "street
15
name." However, payments will be the responsibility of the participants and not
of DTC, the underwriters, the trustee or us.
Debt securities represented by a global note will be exchangeable for
debt securities in definitive form with the same terms in authorized
denominations only if:
o DTC notifies us that it is unwilling or unable to continue as
depositary, and we do not appoint a successor depositary within 90
days or
o we determine not to have the debt securities represented by global
notes.
If any of these events occur, DTC will generally notify all direct
participants of the availability of definitive debt securities. These securities
will be issued in denominations of $1,000 and multiples thereof, in registered
form only, and without coupons. We will maintain one or more offices or agencies
in New York City to facilitate the transfer or exchange of the global notes. You
will not be required to pay any service charges for any transfer or exchange,
but we may require you to pay any tax, other governmental charge or payment in
connection with the exchange or transfer.
Same-Day Settlement in respect of Global Notes
Secondary trading in definitive long-term notes and debentures of
corporate issuers is generally settled in clearing-house or next-day funds. In
contrast, debt securities represented by global notes held by DTC will trade in
DTC's Same-Day Funds Settlement System until maturity, and DTC therefore will
require that secondary market trading activity in such debt securities settle in
immediately available funds. No assurance can be given as to the effect, if any,
of settlement in immediately available funds on trading activity in debt
securities represented by global notes.
Restrictive Covenants Required by the Indenture
The indenture for the senior debt securities requires us to comply with
certain restrictive covenants. Some of the provisions are described below. All
series of senior debt securities issued under the indenture will be entitled to
the benefits of the covenants described below except for any series of senior
debt securities that provides that they are not entitled to the benefits of the
covenants described below.
Definition of Attributable Debt
"Attributable Debt" means, with respect to any lease, the present value
of the total net rental payments during the remaining term of the lease. The
present value will be determined by using the discount rate implicit in the
terms of the lease as determined by two of our officers and will be compounded
semiannually. The net amount of rent we may pay under any lease for any period
is the amount of rent payable for the period but excluding payments for
maintenance, repairs, insurance, taxes, assessments, water rates or similar
charges. For any lease which we may terminate by paying a penalty, the net
amount of rent will include the penalty, but no rent will be included after the
first date that the lease may be terminated.
Definition of Consolidated Net Tangible Assets
"Consolidated Net Tangible Assets" means the aggregate amount of assets
minus the following:
o applicable reserves and other properly deductible items,
o all current liabilities excluding (1) those that the borrower may
extend or renew to a time more than 12 months after the time the
amount of the liability is being computed, (2) current maturities of
long-term indebtedness and (3) capital lease obligations and
16
o all goodwill shown on our balance sheet.
Definition of Funded Debt
"Funded Debt" means all indebtedness for money borrowed having a
maturity of more than 12 months from the determination date or having a maturity
of less than 12 months but that the borrower may renew or extend beyond 12
months.
Definition of Principal Property
"Principal Property" means any mine, plant or other facility, the land
upon which it stands and the fixtures that are a part of it, (1) which is used
primarily for mining and processing and is located in the U.S. and (2) the net
book value of which exceeds 5% of Consolidated Net Tangible Assets. Principal
Property does not include (1) any mine, plant or facility which, in the opinion
of our board of directors, is not of material importance to our total business
or (2) any portion of a particular mine, plant or facility which is not of
material importance to the use or operation of the mine, plant or facility.
Definition of Restricted Subsidiary
"Restricted Subsidiary" means any Subsidiary (1) with substantially all
of its property located, or carrying on substantially all of its business,
within the U.S. and (2) which owns a Principal Property. "Restricted
Subsidiary", however, does not include any Subsidiary whose primary business
consists of (1) financing operations in connection with leasing and conditional
sales transactions on behalf of us and our Subsidiaries, (2) purchasing accounts
receivable or making loans secured by accounts receivable or inventory or (3)
being a finance company.
Definition of Subsidiary
"Subsidiary" is defined as any corporation or entity in which we or one
or more of our Subsidiaries directly or indirectly owns a majority of the voting
interests.
Limitation on Liens
The indenture for the senior debt securities will prohibit us and any
of our Restricted Subsidiaries from incurring, issuing, assuming or guarantying
any debt for money borrowed or any debt evidenced by notes, bonds, debentures or
other similar documents ("Debt") secured by any mortgage, security interest or
other liens (collectively, "Mortgages") on any Principal Property or shares of
stock or indebtedness of any Restricted Subsidiary, without securing all
outstanding series of debt securities under the applicable indenture (other than
any series of debt securities that provide that the debt securities of the
series are not entitled to the benefit of this covenant) equally and ratably
with (or prior to) the secured Debt to be incurred, issued, assumed or
guaranteed. This restriction, however, will not apply if the sum of the
following does not exceed 10% of Consolidated Net Tangible Assets:
o the aggregate principal amount of such secured Debt,
o all secured Debt which would otherwise be prohibited, and
o all of our and our Restricted Subsidiary's Attributable Debt in
respect of sale and leaseback transactions which would otherwise be
prohibited by the covenant limiting sale and leaseback transactions
described below.
The restriction described above also will not apply to debt for
borrowed money secured by the following:
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o Mortgages on property, stock or Debt of any entity existing at the
time it becomes a Restricted Subsidiary,
o Mortgages to secure indebtedness of a Restricted Subsidiary to us or
to another Restricted Subsidiary,
o Mortgages for taxes, assessments or governmental charges or levies
(1) that are not yet due and delinquent or (2) the validity of which
is being contested in good faith,
o Mortgages of materialmen, mechanics, carriers, workmen, repairmen,
landlords or other similar Mortgages, or deposits to obtain the
release of these Mortgages,
o Mortgages arising under attachment or restraint or similar legal
process and the execution or enforcement of which is stayed and
which are being contested in good faith,
o Mortgages (1) to secure public or statutory obligations, (2) to
secure payment of workmen's compensation, (3) to secure performance
in connection with tenders, leases of real property, bids or
contracts; or (4) to secure (or in lieu of) surety or appeal bonds,
and Mortgages made in the ordinary course of business for similar
purposes,
o Mortgages in favor of the United States, any state in the United
States, or any foreign governmental entity to secure payments
pursuant to any contract or statute (including Debt of the pollution
control or industrial revenue bond type) or to secure any debt
incurred to finance the purchase price or the cost of construction
of the property subject to the Mortgage,
o Mortgages on property (including capitalized leases), stock or Debt
of a corporation (1) existing at the time we or our Restricted
Subsidiary acquired the entity, (2) that secure the payment of the
purchase price, construction cost or improvement cost of the
property, stock or Debt; or (3) that secure any Debt incurred prior
to, at the time of, or within one year after we or our Restricted
Subsidiary acquired the property, shares or Debt, completed the
construction on or commenced commercial operation of the property
for the purpose of financing the purchase price or construction
cost,
o Mortgages existing at the date of the applicable indenture and
o any extension, renewal or replacement of any of the Mortgages
enumerated above that does not increase the Debt and that is limited
to all or a part of the same property, stock or Debt that secured
the original mortgage.
The restrictions discussed above also will not apply to (1) any
gold-based loan or forward sale arrangement and (2) Mortgages on property that
we or any Restricted Subsidiary own or lease to secure our or a Restricted
Subsidiary's proportionate share of any payments required to be made to any
Person incurring the expense of developing, exploring or conducting operations
for the recovery, processing or sale of the mineral resources of the property.
Limitation on Sales and Leasebacks
The indenture for the senior debt securities will prohibit us and any
of our Restricted Subsidiaries from entering into any arrangement with any third
party lender or investor under which we or any Restricted Subsidiary will lease
for a period, including renewals, in excess of three years, any Principal
Property if we or the Restricted Subsidiary sold or will sell or transfer the
Principal Property more than 270 days after the acquisition of the Principal
Property or after completion of construction and commencement of full operation
of the Principal Property, to the lender or investor or to any person to whom
funds have been or will be advanced by the lender or investor on the security of
the Principal Property (herein referred to as a "sale and lease-back
transaction"), unless:
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o we or any Restricted Subsidiary could create Debt secured by a
mortgage on the Principal Property to be leased back in an amount
equal to the Attributable Debt with respect to such sale and
leaseback transaction without equally and ratably securing the debt
securities of all series pursuant to the provisions of the covenant
on limitation on liens described above or
o we apply within 180 days after the sale or transfer an amount equal
to the greater of (1) the net proceeds of the sale of the Principal
Property sold and leased back pursuant to the arrangement or (2) the
fair market value of the Principal Property so sold and leased back
at the time of entering into the arrangement to:
(a) the purchase of different property, facilities or equipment which
has a value at least equal to the net proceeds of the sale or
(b) the retirement of our Funded Debt or that of a Restricted
Subsidiary (other than as a result of payment at maturity or pursuant to
any mandatory sinking fund or prepayment provision).
The amount to be applied to the retirement of Funded Debt, however,
will be reduced by:
o the principal amount of any debt securities of any series delivered
within 180 days after such sale to the trustee for retirement and
cancellation,
o if the debt securities of any series are original issue discount
debt securities or provide that an amount other than the face value
is payable upon maturity or a declaration of acceleration, the
amount that is due and payable with respect to such series pursuant
to Section 4.1 of each of the indentures delivered within 180 days
after such sale to the trustee for retirement and cancellation and
o the principal amount of Funded Debt, other than the debt securities,
voluntarily retired within 180 days after such sale.
Merger and Consolidation
We may consolidate or merge with or into any other corporation and may
sell, transfer or lease all of our property or substantially all of our property
to any corporation, if:
o the corporation, if other than us, which resulted from or received
the property expressly assumes by supplemental indenture the due and
punctual payment of the principal of and any premium or interest on
the debt securities and the performance and observance of each
agreement to be performed or observed by us under the debt
securities and the indentures; and
o immediately after the completion of the transaction, no Event of
Default and no event which, after notice or lapse of time or both,
would become an Event of Default shall have occurred and be
continuing.
Event of Default
"Event of Default", when used in each of the indentures with respect to
any series of debt securities, will mean any of the following:
o failure to pay interest on any debt security of the series for 30
days after it is due,
o failure to pay the principal or any premium on any debt security of
the series when it is due,
o failure to pay any sinking fund payment on any debt security of the
series when it is due,
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o failure to perform any other covenant in the applicable indenture
for the benefit of the series of debt securities that continues
for 90 days after we have been given written notice of that
failure,
o events of bankruptcy, insolvency or reorganization, or
o any other Event of Default specified for the series of debt
securities.
Within 90 days after a default occurs with respect to any series of
debt securities, the trustee must notify the holders of the debt securities of
the series of the default if we have not remedied it. Default is defined to
include the events listed above without any grace periods. The trustee may
withhold notice to the holders of the debt securities of any default except in
the payment of principal, premium, interest or sinking fund payment if it in
good faith considers the withholding of notice in the interest of all of the
holders of the debt securities of the series. We are required to file an annual
certificate with the trustee about any default by us under any provisions of the
applicable indenture.
If any Event of Default occurs and continues for any series of debt
securities, the trustee or the holders of at least 25% of the principal amount
of the debt securities of the outstanding series may declare the principal and
interest accrued on all the debt securities of that series to be due and payable
immediately. If this happens, subject to certain conditions, the holders of at
least a majority of the aggregate principal amount of the debt securities of
that series can annul the declaration. In addition, past defaults other than in
payments of principal and interest may also be waived by the same vote.
If an Event of Default occurs and continues for any series of debt
securities, the holders of at least a majority of the principal amount of the
affected series of debt securities then outstanding may direct the time, method
and place of conducting any proceeding or any remedy available to the trustee,
or exercising any power given to or conferred upon the trustee under the
indentures, for the series of debt securities.
The trustee does not have to exercise any of its rights or powers under
either of the indentures at the direction of any holders of notes unless the
holders offer the trustee reasonable indemnity or reasonable security against
expenses and liabilities.
The Trust Indenture Act of 1939 requires that we file with the trustee
annually a written statement regarding the presence or absence of certain
defaults.
Defeasance
Defeasance and Discharge of Obligations
Under the indentures, we will be discharged from our non-administrative
obligations under the debt securities of any series if we deposit with the
trustee in trust sufficient money and/or U.S. government securities to pay the
interest and principal due on the stated due date of those payments. This trust
may only be established if, among other things, we deliver to the trustee an
opinion of counsel stating that, due to an Internal Revenue Service ruling or a
change in federal income tax law, holders of the debt securities of such series
will not recognize income, gain or loss for federal income tax purposes as a
result of this defeasance and will be subject to federal income tax, as if this
defeasance had not occurred.
Defeasance of Certain Covenants and Certain Events of Default
The indenture for the senior debt securities provides that we may be
released from our obligation to comply with the covenants limiting liens and
sale and leaseback transactions, and with any related Event of Default if we
deposit with the trustee in trust money and/or U.S. government securities which
provide for payment of the principal of and each installment of interest on the
debt securities due on the stated maturity of such payments. Our other
obligations under the indenture and the senior debt securities of such series
and other Events
20
of Default would remain in full force and effect. The trust may only be
established if, among other things, we have delivered to the trustee an opinion
of counsel stating that the holders of the senior debt securities of such series
will not recognize income, gain, or loss for federal income tax purposes as a
result of a deposit and defeasance of the covenants and the Event of Default
noted above and will be subject to federal income tax as would have been the
case if such deposit and defeasance had not occurred.
If we exercise the option described in this section and the debt
securities of a series are declared due and payable because of the occurrence of
an Event of Default other than the Event of Default related to the covenants
limiting liens and sale and leaseback transactions, the amount of money and U.S.
government securities on deposit with the trustee will be sufficient to pay
amounts due on the senior debt securities of a series at the time of their
stated maturity but may not be sufficient to pay amounts due on the debt
securities of such series at the time of the acceleration resulting from the
Event of Default.
Changes to Indentures
Under each of the indentures, we and the trustee may modify our rights
and obligations, and the rights of the holders of debt securities with the
consent of the holders of at least a majority of the principal amount of the
outstanding debt securities of all series issued under the indentures affected
by the modification. However, we must get the consent of the holder of each debt
security affected to make the following changes to the debt securities:
o an extension of the fixed maturity of any debt security,
o a reduction of the principal amount payable on any debt security,
o a reduction in the rate of interest payable on any debt security,
o a change in currency in which payments are made,
o an extension of the time of payment of interest,
o a modification that affects adversely any right of a holder of a
debt security to repayment,
o a reduction in the principal amount of an original issue discount
debt security due and payable upon a acceleration of the maturity,
o an adverse change in or elimination of conversion rights,
o a reduction in the portion of the principal amount of a debt
security provable in bankruptcy,
o a reduction in amounts payable upon redemption,
o a reduction in the rate of interest payable on overdue amounts and
o a reduction in the percentage of holders of the outstanding debt
securities of each series required to consent to any modification
discussed above.
Under each of the indentures, we can make certain modifications to the
applicable indenture with the consent of the trustee but without the consent of
any holders of debt securities to evidence our merger, the replacement of the
trustee and for certain other purposes.
21
Duties and Powers of the Trustee
Except during the continuance of an Event of Default, the trustee under
each of the indentures will perform only the duties set forth in the applicable
indenture. During the continuance of any Event of Default, the trustee will
exercise the rights and powers given it under the applicable indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under similar circumstances in the conduct of his own affairs.
The trustee may acquire and hold our securities and, subject to certain
conditions, otherwise deal with us as if it were not trustee.
We currently conduct banking transactions with the trustee in the
ordinary course of our business.
DESCRIPTION OF DEBT SECURITY WARRANTS
We may issue warrants for the purchase of debt securities. The warrants
may be issued independently or together with any securities offered by any
prospectus supplement. The warrants will be issued under one or more debt
security warrant agreements between us and a bank or trust company as debt
security warrant agent. The debt security warrant agent will be our agent and
will not assume any obligations to any owner of the debt security warrants. We
have summarized certain provisions of the separate debt security warrant
agreements. The summary is not complete, and is subject to the debt security
warrant agreement.
General
Under the debt security warrant agreement, the warrants may be issued
in one or more series. The prospectus supplement and the debt security warrant
agreement relating to any series of warrants will include specific terms about
the warrants. These terms include some of the following:
o the type and number of warrants,
o the aggregate principal amount of related debt securities for which
the warrant can be exercised and the price or the manner of
determining the price and currency or other consideration to
purchase such debt securities,
o the expiration date of each warrant,
o the exercise date of each warrant,
o the offering price and currency of each warrant,
o if applicable, the designation and terms of the securities with
which each warrant can be issued,
o any provision dealing with the date on which the warrants and
related securities will be separately transferable,
o any provision granting a mandatory or an optional redemption
provision,
o the identity of the debt security warrant agent,
o the form of the debt security warrant certificates and
o any other terms of the warrant.
22
The warrants will be represented by certificates. The warrants may be
exchanged pursuant to the procedure outlined in the debt security warrant
agreement. We will not charge any service charges for any transfer or exchange
of warrant certificates, but we may require payment for tax or other
governmental charges in connection with the exchange or transfer. Until a
warrant is exercised, a holder will not be entitled to any payments on or have
any rights with respect to the debt securities issuable upon exercise of the
warrant.
Exercise of Debt Security Warrants
To exercise warrants, the holder must provide the debt security warrant
agent with the following:
o payment of the exercise price,
o certain information required by the reverse side of the warrant
certificates,
o the number of warrants to be exercised and
o an executed and completed warrant certificate.
The debt security warrant agent will issue a new warrant certificate
for any warrants not exercised. From time to time, we may reduce the exercise
price.
Modification of the Debt Security Warrant Agreement
The debt security warrant agreement will permit us and the debt
security warrant agent, without the consent of the warrant holders, to
supplement or amend the agreement in the following circumstances:
o to cure any ambiguity,
o to correct or supplement any provision which may be defective or
inconsistent with any other provisions or
o to add new provisions regarding certain matters or questions that we
and the debt security warrant agent may deem necessary or desirable
and which do not adversely affect the interests of the warrant
holders.
U.S. FEDERAL INCOME TAX CONSIDERATIONS
AS A REAL PROPERTY HOLDING CORPORATION
We are likely to constitute a U.S. real property holding corporation
within the meaning of the Internal Revenue Code of 1986, as amended (the
"Code"). Under certain provisions of the Code and the income tax regulations,
gain realized by a non-U.S. person who would not ordinarily be subject to U.S.
federal income tax on gains would, under certain circumstances, be subject to
tax (the "special tax") on gain realized on the disposition (and possible
withholding tax on the proceeds from such sale (the "withholding tax")) of our
securities (other than the disposition of an interest held solely as a
creditor), notwithstanding such non-U.S. person's lack of other connections with
the U.S. However, because our common stock is regularly traded on an established
stock market, the special tax and the withholding tax would apply to the
disposition by a non-U.S. person of an interest in a class of securities that is
not regularly traded on established securities market only if on the date such
interest was acquired by such person it had a fair market value greater than the
fair market value on that date of 5% of the regularly traded class of stock with
the lowest fair market value. However, if such non-regularly traded class of
stock is convertible into a regularly traded class of securities, the special
tax and the withholding tax would apply to the disposition of an interest in
such non-regularly traded class of securities only if on the date such interest
was acquired by such person it had a fair market value greater than the fair
market value on that date of 5% of the regularly traded class of stock into
which it is convertible. The special tax (but, except in certain circumstances,
23
not the withholding tax) would likewise apply to a disposition of an interest
in a class of securities that is regularly traded on an established securities
market by a non-U.S. person who beneficially owns, directly or indirectly, more
than 5% of the total fair market value of such class of securities at any time
during the five year period immediately preceding the disposition of the
interest.
Certain U.S. federal income tax consequences of an investment in a
class of securities will, to the extent appropriate under the circumstances, be
described in the prospectus supplement relating thereto. Each prospective holder
of securities is urged to consult its own tax advisors regarding the U.S.
federal tax consequences of an investment in such securities, as well as the tax
consequences under any state, local or foreign tax laws.
PLAN OF DISTRIBUTION
We may sell the securities described in this prospectus
o through agents
o through underwriters or dealers or
o directly to one or more purchasers.
The distribution of the securities may be made from time to time in one
or more transactions at a fixed price or prices. The fixed price may be changed
to reflect market prices prevailing at the time of sale at negotiated prices.
Except the common stock, the securities will have no established
trading market. Underwriters and agents to whom securities are sold for public
offering and sale may make a market in the securities, but will not be obligated
to do so and could stop doing so at any time without notice. We cannot guarantee
that there will be a market for the securities.
In connection with the sale of offered securities, underwriters may
receive compensation from us or from purchasers of offered securities for whom
they may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell offered securities to or through dealers and such dealers
may receive compensation in the form of discounts, concessions and commissions
from the underwriters and commissions from the purchasers for whom they may act
as agents. Underwriters, dealers, agents or direct purchasers that participate
in the distribution of the offered securities may be underwriters as defined in
the Securities Act of 1933, and any discounts or commissions that we pay to them
and any profit on their resale of the offered securities may be treated as
underwriting discounts and commissions under the Securities Act of 1933. We will
identify any underwriters, dealers, agents or direct purchasers and describe
their compensation in the prospectus supplement.
We may have agreements with the underwriters, dealers and agents who
participate in the sale of offered securities to indemnify them against certain
civil liabilities, including liabilities under the Securities Act of 1933, or to
contribute with respect to payments which the underwriters, dealers or agents
may be required to make.
We may authorize agents, underwriters or dealers to solicit offers by
certain institutional investors to purchase debt securities which will be paid
for and delivered on a future date specified in the prospectus supplement. The
obligations of any purchasers under this delayed delivery and payment
arrangements will not be subject to any conditions except that the purchase at
delivery must not be prohibited under the laws of any jurisdiction in the United
States to which the institution is subject. The underwriters and dealers will
not have any responsibility for the validity and performance of these contracts.
LEGAL OPINION
White & Case LLP will issue for us an opinion about the legality of the
offered securities.
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EXPERTS
The consolidated financial statements incorporated by reference in this
prospectus have been audited by Arthur Andersen LLP, independent accountants, as
indicated in their reports with respect thereto and are included herein in
reliance upon the authority of said firms as experts in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. Our SEC filings are available to the public from
our web site at http://www.newmont.com or from the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the SEC's
public reference rooms in Washington, D.C., New York City and Chicago. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms.
The SEC allows us to "incorporate by reference" in this prospectus the
information in the documents that we file with it, which means that we can
disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and information in documents that we file later with the SEC will
automatically update and supersede information contained in documents filed
earlier with the SEC or contained in this prospectus. We incorporate by
reference in this prospectus the documents listed below and any future filings
that we may make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we sell all of the securities that may be
offered by this prospectus:
o Annual Report on Form 10-K for the year ended December 31, 2000;
o Quarterly Report on Form 10-Q for the quarter ended March 31, 2001;
o Current Report on Form 8-K dated January 22, 2001; and
o Current Report on Form 8-K dated May 9, 2001.
You may request a copy of these documents at no cost to you, by writing
or telephoning us as follows:
Newmont Mining Corporation
1700 Lincoln Street
Denver, Colorado 80203
Attn: Office of the Secretary
(303) 863-7414
You should rely only on the information incorporated by reference or
provided in this prospectus or in any prospectus supplement. We have not
authorized anyone to provide you with different information. We are not making
an offer of the securities described in this prospectus in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents.
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$275,000,000
Newmont Mining Corporation
8 5/8% Notes due 2011
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PROSPECTUS SUPPLEMENT
May 9, 2001
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Salomon Smith Barney
JPMorgan
HSBC
Scotia Capital
Barclays Capital
BNY Capital Markets, Inc.
Tokyo-Mitsubishi International plc
UBS Warburg
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