Battle Mountain Gold Posts Small Loss On Low Gold Prices, Says Final Phoenix Feasibility Study Improves On Earlier Model

Business Wire, July 28, 2000

Business Editors

HOUSTON--(BUSINESS WIRE)--July 28, 2000

Battle Mountain Gold Company (NYSE:BMG)(TSE:BMC) today reported a second quarter consolidated net loss of $9.2 million, or 4 cents per share, including foreign currency losses of $4.4 million. The second quarter loss compares with a net loss of $17.2 million, or 7 cents per share in the same period last year, which included a $14.2 million loss related to Lihir Gold Limited (LGL).

For the first half of 2000, the consolidated net loss was $12.7 million, or 6 cents per share, including foreign currency losses of $3.9 million. This compares with a consolidated loss of $31.7 million, or 14 cents per share in the same period last year, which included a $26.4 million loss related to LGL.

BMG President and Chief Operating Officer, John A. Keyes, said that the average realized gold price increased to $289 per ounce in the first half, compared with $278 in the same period of last year. Cash flow from operations increased to $21.2 million for the period as a result of improving gold prices and production. The Company's cash position was $65.9 million at the end of the first half, including $42.4 million in restricted cash, which is primarily related to the Company's loan facility. First half gold production of 395,000 ounces and cash costs of $167 per ounce were slightly better than planned and are expected to remain on target for the balance of the year.

In addition, Keyes said that the Company's previously announced merger with Newmont Mining Corporation is expected to be completed this Fall following customary regulatory approvals and approval by Battle Mountain Gold shareholders. On July 27, 2000 early termination of the waiting period applicable to the proposed merger under the Hart-Scott-Rodino Improvements Act of 1976 was granted. Noranda Inc., which owns 28 percent of Battle Mountain Gold, has agreed to vote its shares in favor of the merger.

Development

Keyes also reported that work on BMG's Final Phoenix Feasibility Study has been completed and that the results are largely in line with or improve on the targets projected in the March 2000 interim study. The Feasibility Study does not take into account additional operating synergies which are expected to result from the merger, further lowering costs and increasing the rate of return.

                    Final Phoenix Feasibility Study

         Final Feasibility July 2000    Feasibility Targets March 2000

Avg. Mill Feed Grade                              Avg. Mill Feed Grade
 Gold (oz/ton)                  0.037                       0.038
 Silver (oz/ton)                0.286                       0.285
 Copper (%)                      0.15                        0.15
----------------------------------------------------------------------
Avg. Mill Recovery                                Avg. Mill Recovery
 Gravity Gold (%)                40.6                        43.0
 Flotation/SART Au (%)           44.0                        41.5
                                 ----                        ----
 Total Au Recovery               84.6                        84.5
 ---------------------------------------------------------------------
 Silver (%)                      58.1                        52.0
 Copper (%)                      85.1                        83.5
----------------------------------------------------------------------
Avg. Heap Leach Grade                           Avg. Heap Leach Grade
 Gold (oz/ton)                  0.028                       0.026
 Silver (oz/ton)                0.229                       0.236
----------------------------------------------------------------------
Leach Recovery                                         Leach Recovery
 Gold (%)                        67.1                       64.5
 Silver (%)                      31.4                       16.0
----------------------------------------------------------------------
Mill Ore Total Tons (000s)      148.4                      140.2
Milling Rate (tons per day)    32,500                     30,000
Strip Ratio                    2.11:1                      2.1:1
Contained Au Reserves
 /Resources                  6.3 M oz                   6.2 M oz
Capital Cost (millions)        $206.5                     $189.0
----------------------------------------------------------------------
Gold, Silver, Copper Production
                Au,       Ag,     Cu,       Au,         Ag,      Cu,
               oz/yr     oz/yr  Mlbs/yr    oz/yr       oz/yr  Mlbs/yr
 Gravity     180,000    310,000           183,500     290,000
 Float/SART  194,000  1,692,000           162,500   1,300,000
 Heap Leach   41,000    153,000            39,000     100,000
              ------    -------            ------     -------
 TOTAL       415,000  2,155,000  28.8     385,000   1,690,000   27.5
----------------------------------------------------------------------
Cash Operating Cost (per oz)     $170                        $172
 DD&A (per oz)                     41                          38
 Sustaining Capital (per oz)       18                          15
 Reclamation (per oz)               3                          11
                                 ----                        ----
Total Costs (per oz)             $232                        $236
----------------------------------------------------------------------
Pre tax IRR @ $300 Au (%)          17                          18
----------------------------------------------------------------------