1
EXHIBIT 99.1
JOINT NEWS RELEASE BY GETCHELL GOLD CORPORATION AND SUBSIDIARY
AND PLACER DOME INC.
FOR IMMEDIATE RELEASE
- --------------------------------------------------------------------------------
MERGER AGREEMENT REACHED BETWEEN GETCHELL GOLD AND PLACER DOME
ENGLEWOOD, COLORADO (DECEMBER 13, 1998) Placer Dome Inc. and
Getchell Gold Corporation of Denver are pleased to announce an agreement and
plan of merger that will result in Placer Dome owning a 100% interest in
Getchell Gold Corporation which operates the adjoining Getchell and Turquoise
Ridge gold mines in Nevada.
Getchell shareholders will be offered 2.45 Placer Dome shares for each
Getchell share in a reorganization that is tax-free to United States
shareholders and is planned to be treated as a pooling of interests under U.S.
GAAP (Generally Accepted Accounting Principles). Based on the closing price of
Placer Dome's shares on the New York Stock Exchange on December 11, 1998, the
transaction values Getchell at about US$1.085 billion or US$34.45 per share.
Getchell's Board of Directors has unanimously approved the merger and
will recommend to Getchell shareholders acceptance of Placer Dome's offer.
Getchell's Chairman J. Kelley Williams and Chief Executive Officer G. W. (Bill)
Thompson will be invited to join Placer Dome's Board of Directors following the
merger.
Based on the findings of its due diligence study, Placer Dome intends
to implement an aggressive exploration and development program to increase
reserves and resources at Getchell's property to 20 million ozs. of gold by the
end of 1999. By completing development of the new Turquoise Ridge Mine and
expanding the mill to 6,000 tons per day at an incremental capital cost of
about $230 million, Placer Dome expects Getchell to produce more than 800,000
ozs. of gold per year at a cash production cost below $200/oz. starting in
2003. Placer Dome also sees significant potential for more than 20 million
ounces through exploration of Getchell's 50 square mile property that has all
the geological parameters for major discoveries. The observations contained in
this paragraph are those of Placer Dome Inc. based on the findings of its due
diligence and do not constitute any representations, estimates or projections
by Getchell Gold Corporation.
The Getchell property contains two operating underground mines and a
mill facility that includes a pressure oxidation plant. In its second quarter
1998 results, Getchell estimated its total mineral inventory to be 14.8 million
ozs. of gold contained in 37 million tons of material grading 12 grams of gold
per ton. The mines are expected to produce more than 400,000 ozs. per year
from 1999 to 2002 at a cash production cost below $230/oz.
Page 1
2
Placer Dome now estimates it will produce 3.2 million ozs. of gold in
1999 at an average cash production cost of about $170/oz., with a rising
production profile thereafter to above 3.5 million ozs. by 2003 at an average
cash production cost of about $190/oz., with 60% of this production from North
America.
John Willson, President and CEO of Placer Dome, said: "The Getchell
property provides Placer Dome with an opportunity to use our financial strength
and exploration and project development skills to optimize the potential of an
extraordinary property whose development has been constrained by recent market
conditions. The transaction strengthens our North American base with the
addition of quality ounces, making Placer Dome, with its Cortez operations
nearby, a major Nevada producer. And with our recent joint venture in South
Africa, this puts Placer Dome on track to become a long-term, 3.5
million-ozs.-per-year producer with reserves of 80 million ozs. of gold."
Bill Thompson commented: "I am delighted with this transaction.
Placer Dome has an excellent reputation for mine development, and is
well-positioned from a financial and management perspective to develop this
property into a world-class mining district."
With approximately 31.5 million Getchell shares outstanding on a
fully-diluted basis, Placer Dome will issue about 77 million additional common
shares, which considerably broadens Placer Dome's United States shareholder
base. Upon completion of the merger, Placer Dome will adopt U.S. GAAP as its
primary basis of communicating financial results. This will provide a more
appropriate accounting emphasis for an international gold mining company
reporting in U.S. dollars, and provides better comparison with its peer group.
The transaction is subject to majority approval by Getchell
shareholders and customary regulatory approvals. No approval by Placer Dome
shareholders is required. Placer Dome and Getchell plan to mail their joint
registration statement and proxy statement prospectus to Getchell shareholders
upon receipt of regulatory approvals. The transaction is expected to close by
the end of March 1999.
End
For further information:
In North America: Investor Relations - Earl Dunlop (604) 661-3779
Media Relations - Hugh Leggatt (604) 661-1554
In South America: Investor and Media Relations - Felipe Ruiz (56-2) 206-6252
In Australia: Investor and Media Relations - Ian Williams (02) 9256-3800
On the Internet: www.placerdome.com
Getchell Gold Corporation: VP & Chief Financial Officer - Donald Robson (303) 771-9000
Page 2
3
PLACER DOME INC. CAUTIONARY NOTE
Some of the statements contained in this news release are forward-looking
statements, such as estimates and statements that describe the Corporation's
future plans, objectives or goals, including words to the effect that the
Corporation or management expects a stated condition or result to occur. Since
forward-looking statements address future events and conditions, by their very
nature, they involve inherent risks and uncertainties. Actual results relating
to among other things, reserves, resources, results of exploration, capital
costs and mine production costs could differ materially from those currently
anticipated in such statements by reason of factors such as the productivity of
the Corporation's mining properties, changes in general economic conditions and
conditions in the financial markets, changes in demand and prices for the
minerals the Corporation produces, litigation, legislative, environmental and
other judicial, regulatory, political and competitive developments in areas in
which the Corporation operates, technological and operational difficulties
encountered in connection with the Corporation's mining activities, and labor
relations matters and costs.
GETCHELL GOLD CORPORATION CAUTIONARY NOTE
The information set forth is this document includes "forward looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and is subject to the safe harbor created by that section.
Factors that realistically could cause results to differ materially from those
projected in the forward-looking statements include those set forth in "Risk
Factors" in the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998 as filed with the Securities and Exchange Commission.
Getchell Gold is a gold mining and exploration company with operations
in north central Nevada and a corporate office in Englewood, Colorado.
Page 3