UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-Q


 (x)      Quarterly report pursuant to section 13 or 15(d) of the Securities
          Exchange Act of 1934.

                For the Quarterly Period Ended September 30, 1997

 ( )      Transition report pursuant to section 13 or 15(d) of the Securities
          Exchange Act of 1934.

               For the transition period from _______ to ________

                          Commission File Number 1-8736


                            HOMESTAKE MINING COMPANY


                             A Delaware Corporation

                   IRS Employer Identification No. 94-2934609


                              650 California Street
                      San Francisco, California 94108-2788
                            Telephone: (415) 981-8150



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

            Yes        X                            No   ______


The number of shares of common  stock  outstanding  as of October  31,  1997 was
146,735,000.


                                     Page 1



<PAGE>
                    HOMESTAKE MINING COMPANY AND SUBSIDIARIES


PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

A.   Condensed Consolidated Balance Sheets (unaudited)
     (In thousands, except per share amount)
<TABLE>
<CAPTION>
                                                                                    September 30,              December 31,
                                                                                        1997                       1996
                                                                                 -----------------          ----------------
<S>                                                                              <C>                         <C>
ASSETS
Current assets
     Cash and equivalents                                                        $         61,080            $       89,599
     Short-term investments                                                               168,882                   130,158
     Receivables                                                                           32,903                    47,650
     Inventories:
         Finished products                                                                 20,328                    21,132
         Ore and in process                                                                40,408                    39,980
         Supplies                                                                          28,630                    30,015
     Deferred income and mining taxes                                                      12,263                    12,263
     Other                                                                                  6,802                     8,551
                                                                                 -----------------          ----------------
         Total current assets                                                             371,296                   379,348
                                                                                 -----------------          ----------------

Property, plant and equipment - at cost                                                 2,002,307                 1,970,300
     Accumulated depreciation, depletion and amortization                              (1,146,077)                 (963,270)
                                                                                 -----------------          ----------------
         Property, plant and equipment - net                                              856,230                 1,007,030
                                                                                 -----------------          ----------------

Investments and other assets
     Noncurrent investments                                                                25,285                    39,606
     Other assets                                                                          81,659                    56,124
                                                                                 -----------------          ----------------
         Total investments and other assets                                               106,944                    95,730
                                                                                 -----------------          ----------------
Total Assets                                                                     $      1,334,470            $    1,482,108
                                                                                 =================          ================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
     Accounts payable                                                            $         37,924            $       36,171
     Accrued liabilities:
         Payroll and other compensation                                                    23,653                    23,085
         Reclamation                                                                       14,307                    10,055
         Other                                                                             25,889                     9,034
     Income and other taxes payable                                                        13,731                    38,386
                                                                                 -----------------          ----------------
         Total current liabilities                                                        115,504                   116,731
                                                                                 -----------------          ----------------

Long-term liabilities
     Long-term debt                                                                       222,183                   185,000
     Other long-term obligations                                                          145,218                   114,168
     Deferred income and mining taxes                                                     152,699                   201,454
                                                                                 -----------------          ----------------
         Total long-term liabilities                                                      520,100                   500,622
                                                                                 -----------------          ----------------

Minority interests in consolidated subsidiaries                                           104,622                    96,203

Shareholders' equity
     Capital stock, $1 par value per share:
         Preferred - 10,000 shares authorized; no shares outstanding
         Common - 250,000 shares authorized; shares outstanding:
            1997 - 146,744; 1996 - 146,672                                                146,744                   146,672
     Other shareholders' equity                                                           447,500                   621,880
                                                                                 -----------------          ----------------
         Total shareholders' equity                                                       594,244                   768,552
                                                                                 -----------------          ----------------
Total Liabilities and Shareholders' Equity                                       $      1,334,470            $    1,482,108
                                                                                 =================          ================

</TABLE>

See notes to condensed consolidated financial statements.

                                       2
<PAGE>


                    HOMESTAKE MINING COMPANY AND SUBSIDIARIES



B.    Condensed Statements of Consolidated Operations (unaudited)
      (In thousands, except per share amounts)
<TABLE>
<CAPTION>

                                                              Three Months Ended                        Nine Months Ended
                                                                September 30,                            September 30,
                                                             1997               1996                  1997              1996
                                                       --------------     --------------        --------------    --------------

<S>                                                    <C>                <C>                  <C>                <C>         
Revenues
      Gold and ore sales                               $    152,994       $    171,468         $     477,660      $    541,691
      Sulfur and oil sales                                    6,332              7,212                20,126            23,005
      Interest income                                         3,280              3,317                10,488            11,246
      Gain on termination of Santa Fe merger                      -                  -                62,925                 -
      Other income                                           (4,382)             1,686                 5,871            12,041
                                                       --------------     --------------        --------------    --------------
                                                            158,224            183,683               577,070           587,983
                                                       --------------     --------------        --------------    --------------
Costs and Expenses
      Production costs                                      115,069            113,548               354,305           361,504
      Depreciation, depletion and amortization               29,297             28,178                85,509            83,539
      Administrative and general expense                     10,810              8,841                30,304            27,804
      Exploration expense                                    14,646             11,951                36,659            29,527
      Interest expense                                        2,226              2,682                 7,659             7,974
      Write-downs and other unusual charges                 183,646                  -               183,646                 -
      Other expense                                           1,452                285                 4,879             1,304
                                                       --------------     --------------        --------------    --------------
                                                            357,146            165,485               702,961           511,652
                                                       --------------     --------------        --------------    --------------

Income (Loss) Before Taxes and Minority Interests          (198,922)            18,198              (125,891)           76,331
Income and Mining Taxes                                      37,204             (9,104)                3,960           (37,709)
Minority Interests                                           (1,964)            (1,667)               (8,113)          (10,766)
                                                       --------------     --------------        --------------    --------------

Net Income (Loss)                                      $   (163,682)      $      7,427          $   (130,044)     $     27,856
                                                       ==============     ==============        ==============    ==============



Net Income (Loss) Per Share                            $      (1.12)      $       0.05          $      (0.89)     $       0.19
                                                       ==============     ==============        ==============    ==============

Average Shares Used in the Computation                      146,731            146,672               146,714           146,190
                                                       ==============     ==============        ==============    ==============

Dividends Paid Per Common Share                        $          -       $       0.05          $       0.10      $       0.15
                                                       ==============     ==============        ==============    ==============


</TABLE>



See notes to condensed consolidated financial statements.



                                       3
<PAGE>


                    HOMESTAKE MINING COMPANY AND SUBSIDIARIES



C.  Condensed Statements of Consolidated Cash Flows (unaudited)
    (In thousands)

<TABLE>
<CAPTION>

                                                                                     Nine Months Ended September 30,
                                                                                       1997                        1996
                                                                              -----------------           ------------------
<S>                                                                            <C>                         <C>             
Cash Flows from Operations
    Net income (loss)                                                          $      (130,044)            $         27,856
    Reconciliation to net cash provided by operations:
       Write-downs and other unusual charges                                           183,646                            -
       Depreciation, depletion and amortization                                         85,509                       83,539
       Gains on asset disposals                                                        (15,140)                      (3,260)
       Deferred taxes, minority interests and other                                    (26,467)                      33,523
       Effect of changes in operating working capital items                               (388)                       9,895
                                                                              -----------------           ------------------
    Net cash provided by operations                                                     97,116                      151,553
                                                                              -----------------           ------------------

Investment Activities
    Increase in short-term investments                                                 (38,724)                     (98,041)
    Additions to property, plant and equipment                                        (106,712)                     (85,759)
    Proceeds from asset sales                                                           12,619                       14,918
    Increase in restricted cash                                                        (18,488)                           -
    Purchase of HGAL minority interests                                                      -                       (6,435)
    Purchase of interest in Snip mine                                                        -                      (39,279)
    Other                                                                                  488                        2,547
                                                                              -----------------           ------------------
    Net cash used in investment activities                                            (150,817)                    (212,049)
                                                                              -----------------           ------------------

Financing Activities
    Borrowings                                                                          55,430                            -
    Debt repayments                                                                    (18,000)                           -
    Common shares issued                                                                   852                        2,355
    Dividends paid - Homestake                                                         (14,670)                     (22,008)
                   - Prime minority interests                                           (1,085)                      (1,099)
    Other                                                                                2,655                            -
                                                                              -----------------           ------------------
    Net cash provided by (used in) financing activities                                 25,182                      (20,752)
                                                                              -----------------           ------------------

Net decrease in cash and equivalents                                                   (28,519)                     (81,248)

Cash and equivalents, January 1                                                         89,599                      145,957
                                                                              -----------------           ------------------

Cash and equivalents, September 30                                             $        61,080             $         64,709
                                                                              =================           ==================
                                                                                                              
</TABLE>


See notes to condensed consolidated financial statements.


                                       4

<PAGE>


                    HOMESTAKE MINING COMPANY AND SUBSIDIARIES



Notes to Condensed Consolidated Financial Statements (unaudited)

1.   The condensed  consolidated  financial statements included herein should be
     read in conjunction with the financial statements and notes thereto,  which
     include information as to significant accounting policies, in the Company's
     Annual  Report on Form  10-K for the year  ended  December  31,  1996.  

     The information furnished in this report reflects all adjustments which, in
     the  opinion of  management,  are  necessary  for a fair  statement  of the
     results for the interim periods.  Except as described in notes 2 through 6,
     such adjustments consist of items of a normal recurring nature.  Results of
     operations for interim  periods are not  necessarily  indicative of results
     for the full year.

     All dollar amounts are in United States dollars unless otherwise indicated.

2.   During the third quarter of 1997, Homestake recorded pretax write-downs and
     other  unusual  charges of $183.6  million  ($145.1  million  after tax) as
     follows (in millions):
<TABLE>
<CAPTION>

                                                            Three and Nine Months Ended
                                                                  September 30, 1997
                                                           Pretax                  After Tax
                                                    ----------------------    ---------------------
<S>                                                              <C>                      <C>
Write-down of investment in the
     Main Pass 299 sulfur mine (a)                               $ 107.8                  $  84.9
Reduction in carrying values of
     short-lived mining properties (b)                              24.3                     18.2
Increase in estimated accrual for
     future reclamation expenditures (c)                            29.1                     21.5
Write-down of certain investments (d)                               16.5                     14.7
Other charges, primarily foreign exchange
     losses on intercompany redeemable
     preferred stock                                                 5.9                      5.8
                                                    ======================    =====================
                                                                 $ 183.6                  $ 145.1
                                                    ======================    =====================

<FN>
         (a)   Homestake  owns a 16.7%  undivided  interest in the Main Pass 299
               sulfur mine located in the Gulf of Mexico. Planned write-downs by
               Homestake's   joint  venture   partners  caused  the  Company  to
               reexamine the carrying  value of its investment in Main Pass 299.
               Due to a prolonged  period of low sulfur  prices and  Homestake's
               current  assessment of estimated  future cash flows from the Main
               Pass 299 sulfur mine, the Company recorded a write-down of $107.8
               million in its  investment  in Main Pass 299. As a result of this
               write-down,  the  Company's  carrying  value of the Main Pass 299
               sulfur  property,  plant and  equipment  was  reduced  to zero at
               September 30, 1997. 

         (b)   As a result  of lower  gold  prices,  the  Company  reviewed  the
               carrying  values of its gold mining  operations  using a $325 per
               ounce gold price for its  short-lived  operations  and a $350 per
               ounce  gold  price for its  operations  with  longer  lives.  The
               Company  determined that impairment  write-downs were required to
               reduce the carrying  value of several of its assets or operations
               with short remaining lives,  including the Pinson mine in Nevada,
               the  Homestake  mine's Open Cut in South  Dakota,  and low- grade
               stockpiled  ore and certain  redundant  mining  equipment  at the
               Kalgoorlie   operations   in  Western   Australia.   The  Company
               determined  that no  adjustments  to the  carrying  values of its
               longer-lived operations were required.



                                       5

<PAGE>
                   HOMESTAKE MINING COMPANY AND SUBSIDIARIES


         (c)   As a result of a review of the Company's reclamation liabilities,
               the Company  determined  that it was  necessary  to increase  the
               reclamation  accruals at certain of its  nonoperating  properties
               including  the Santa Fe mine in Nevada,  the Nickel Plate mine in
               Canada  and the Grants  uranium  complex in New Mexico to reflect
               revised  estimates,  changed conditions and more stringent future
               reclamation requirements.

         (d)   Low gold prices and lower  market  valuations  for junior  mining
               companies  have  caused  the value of  certain  of the  Company's
               investments  in other  companies  to decline  significantly.  The
               Company  reduced  the  carrying  values of  certain of its mining
               investments  to reflect  reductions in value that it deemed to be
               other than temporary.
</FN>
</TABLE>

 3.            Other income for the three and nine months ended  September 30
               is as follows (in millions):
<TABLE>
<CAPTION>

                                       Three Months Ended               Nine Months Ended
                                         September 30,                    September 30,
                                  -----------------------------     ---------------------------
                                      1997            1996             1997           1996
                                  -------------   -------------     ------------   ------------
<S>                                      <C>             <C>             <C>             <C>  
Gains on asset disposals                 $ 0.8           $ 0.5           $ 15.1          $ 3.3
Royalty income                             0.6             0.7              1.8            2.1
Foreign currency contract
     gains (losses)                       (4.2)            0.1             (8.0)           1.4
Foreign currency exchange
     losses on intercompany
     advances                             (1.7)              -             (4.5)          (0.3)
Other foreign currency
     gains (losses)                          -             0.1             (0.3)           0.3
Litigation recovery                          -               -                 -           2.9
Other                                      0.1             0.2              1.8            2.3
                                  -------------   -------------     ------------   ------------
                                        $ (4.4)          $ 1.6            $ 5.9         $ 12.0
                                  =============   =============     ============   ============
</TABLE>

               In February 1997,  Homestake  completed the sale of its interests
               in the George  Lake and Back River  joint  ventures  in Canada to
               Arauco Resources Corporation  ("Arauco") for $9.3 million in cash
               and 3.6 million  shares of Arauco  common  stock.  As a result of
               this  transaction,  the  Company  recorded a pretax gain of $13.5
               million  ($8.1  million  after tax)  during the first  quarter of
               1997.  Arauco  subsequently  changed  its  name to Kit  Resources
               ("Kit").  The write-down of investments recorded at September 30,
               1997 (see note 2(d)) included a pretax write-down of $4.6 million
               ($3.1 million  after tax) related to the Company's  investment in
               Kit.

4.             In March 1997, Santa Fe Pacific Gold  Corporation  terminated its
               previously  announced  merger  agreement  with Homestake and paid
               Homestake a $65 million termination fee. As a result, the Company
               recorded a pretax  gain of $62.9  million  ($47.2  million  after
               tax), net of merger-related  expenses of $2.1 million incurred in
               1997.

5.             In April 1996,  the Company's  50.6%-owned  subsidiary,  Prime
               Resources  Group  Inc.   ("Prime"),   purchased   Cominco  Ltd.'s
               ("Cominco") 60% interest in the Snip mine in British Columbia for
               $39.3  million in cash.  The purchase  price  included  Cominco's
               share of the mine's working  capital.  Prime now owns 100% of the
               Snip mine.

 6.            In 1995,  Homestake  offered to acquire the 18.5% of Homestake
               Gold of  Australia  Limited  ("HGAL")  it did not  already own by
               offering .089 of a Homestake  share or A$1.90 in cash for each of
               the  109.6  million  HGAL  shares  owned by the  public.  Through
               December 31,


                                       6

<PAGE>


                   HOMESTAKE MINING COMPANY AND SUBSIDIARIES


               1995 a total of 38.9 million HGAL shares were  acquired at a cost
               of $59.1 million.  At December 31, 1995 Homestake  owned 88.1% of
               the shares of HGAL.  The  acquisition  was completed in the first
               quarter of 1996 when the  remaining  70.7 million  publicly  held
               HGAL shares were acquired at a cost of $105.8 million,  including
               $99.3 million for 6 million shares of the Company,  $5 million in
               cash and $1.5 million of transaction expenses. The total purchase
               price  to  acquire  all of the  18.5%  of HGAL  held by  minority
               shareholders was $164.9 million, including $141.7 million for 8.5
               million  shares of the  Company,  $19.5  million in cash and $3.7
               million of  transaction  expenses.  The  acquisition  of the HGAL
               minority interests was accounted for as a purchase.


7.             Long-term debt is as follows (in millions):
<TABLE>
<CAPTION>


                                                              September 30,            December 31,
                                                                  1997                     1996
                                                             -----------------------------------------
<S>                                                                    <C>                    <C>    
Convertible subordinated notes (due 2000)                              $ 150.0                $ 150.0
Pollution control bonds
    Lawrence County, South Dakota (due 2032)                              48.0                      -
    Lawrence County, South Dakota (due 2003)                                 -                   18.0
    State of California (due 2004)                                        17.0                   17.0
Borrowings under credit agreeement (due 2001)                              7.2                      -
                                                             -----------------------------------------
                                                                       $ 222.2                $ 185.0
                                                             =========================================
</TABLE>

         South Dakota  Pollution  Control Bonds: In July 1997,  Lawrence County,
         South Dakota  issued $30 million of South  Dakota Solid Waste  Disposal
         Revenue  Bonds  and $18  million  of  South  Dakota  Pollution  Control
         Refunding Revenue Bonds,  both of which are due in 2032.  Proceeds from
         the Solid Waste  Disposal  Revenue Bonds were relent to the Company and
         proceeds from the Pollution  Control  Refunding Revenue Bonds were used
         to redeem outstanding South Dakota pollution control bonds. The Company
         is  responsible  for funding  principal and interest  payments on these
         bonds.  Proceeds from the Solid Waste Disposal  Revenue Bonds are being
         used for  construction of a new tailings dam lift and other  qualifying
         expenditures  at the Homestake mine.  Qualifying  expenditures of $11.5
         million had been incurred through  September 30, 1997 and the remaining
         $18.5  million  is  held  in  a  trustee  account   committed  for  the
         construction  of  the  new  tailings  dam  lift  and  other  qualifying
         expenditures.  This $18.5  million of  restricted  cash is  included in
         other assets in the accompanying balance sheet at September 30, 1997.

         The Company pays interest monthly on its pollution control bonds based
         on variable short-term,  tax-exempt obligation rates. At September 30,
         1997 the interest rate was 4.1%.

8.       Under the Company's foreign currency protection  program,  the Company
         enters  into a series  of  foreign  currency  option  contracts  which
         establish  trading ranges within which the United States dollar may be
         exchanged  for  foreign  currencies  by setting  minimum  and  maximum
         exchange  rates.  The  contracts  are marked to market at each balance
         sheet date and the  resulting  changes in market value are included in
         the  determination  of net income or loss.  Net  unrealized  losses on
         contracts outstanding at September 30, 1997 totaled $5.1 million.


                                       7

<PAGE>


                              HOMESTAKE MINING COMPANY AND SUBSIDIARIES



          At  September  30, 1997 the Company  had  forward  currency  contracts
          outstanding as follows (dollar amounts in millions):
<TABLE>
<CAPTION>

                                               Weighted-Average Exchange
                                                Rates to U.S. Dollars               
                     Amount Covered       -----------------------------------       Expiration
Currency              (U.S. Dollars)        Put Options      Call Options             Dates
-------------------------------------------------------------------------------------------------
<S>                             <C>             <C>              <C>                   <C> 
Canadian                        $ 52.7          0.72             0.76                  1997
Canadian                         152.2          0.72             0.76                  1998
Canadian                           7.0          0.72             0.75                  1999
Australian                        27.6          0.77             0.80                  1997
Australian                        93.5          0.75             0.78                  1998
Australian                         6.5          0.72             0.75                  1999
                          -------------
                               $ 339.5
                          =============
</TABLE>


9.        In the fourth quarter of 1996, the Company  entered into forward sales
          commitments  for 680,100  ounces of gold  expected to be produced from
          the McLaughlin  mine  stockpiles  from 1997 through 2003. In addition,
          during the second  quarter of 1997 the Company  entered  into  forward
          sales commitments for 20,000 ounces of gold to be produced in 2001 and
          2002.  Gold sales for the three and nine months  ended  September  30,
          1997  include  sales of 30,000  ounces  and  90,000  ounces at average
          prices of $387 per ounce and $383 per ounce, respectively.  Gold sales
          for the three and nine months ended  September  30, 1996 include sales
          under the  now-completed  Nickel Plate mine forward  sales  program of
          24,900  ounces and 70,000  ounces at average  prices of $427 per ounce
          and $421 per ounce, respectively.

          At September  30, 1997 the Company's  gold forward  sales  commitments
          were as follows:

<TABLE>
<CAPTION>
                                                                  Average Price of
                                    Forward Sales                  Forward Sales
      Year                          (ounces)                        (per ounce)
-----------------------------------------------------------------------------------
      <S>                              <C>                             <C> 
      1997                              30,100                         $391
      1998                             120,000                          399
      1999                             109,900                          415
      2000                              85,100                          430
      2001                              95,000                          441
      2002                              95,000                          457
      2003                              75,000                          481
                                  -------------
                                       610,100
</TABLE>

          To provide  protection  against a decrease in gold prices, the Company
          entered into a series of put and call option contracts during the 1997
          third  quarter  which will provide a floor price of $325 per ounce for
          900,000  ounces of  Homestake's  1998  gold  production.  The  Company
          purchased put options for 900,000  ounces of gold  exercisable  during
          1998 at a price of $325 per ounce.  The Company also sold call options
          for 900,000 ounces of gold exercisable  during 1998 at a price of $325
          per  ounce and  purchased  call  options  for  900,000  ounces of gold
          exercisable during 1998 at $336 per ounce. These option contracts were
          established at no net cost to the Company.

          The Company  also  purchased  put  options  for 30,000  ounces of gold
          exercisable  during  2000 at a price of $350 per  ounce  and sold call
          options  for  15,000  ounces  of gold  exercisable  during  2000 at an
          average price of $395 per ounce.


                                       8

<PAGE>



                   HOMESTAKE MINING COMPANY AND SUBSIDIARIES


10.      In September 1997, the Company's Board of Directors authorized the
         amendment  of  certain  terms of the  Rights  Agreement  (effective  -
         October  1997).  A  summary  of the  amended  Rights  Agreement  is as
         follows:

         Each share of common stock includes and trades with a right. Rights are
         not  exercisable  currently.  Rights will become  exercisable on a date
         designated by the Board of Directors  following the commencement of, or
         announcement  of an intent to  commence,  a tender offer by any person,
         entity or group for 15% or more of the Company's common stock.  When so
         exercisable,  each right initially  entitles the owner to purchase from
         the  Company  one  one-hundredth  of a share of Series A  Participating
         Preferred  Stock,  par value $1 per share,  at a price of $75 per share
         (the "Purchase Price"). In addition, if any person, entity or group (an
         "Acquiring Person") acquires 15% or more of the Company's common stock,
         each right (whether or not previously  exercisable) thereafter entitles
         the  owner  (other  than an  Acquiring  Person  or its  affiliates  and
         associates)  to  purchase  for the  Purchase  Price  the  number of one
         one-hundredth  of a share of  Series  A  Preferred  Stock  equal to the
         Purchase Price divided by one-half of the market price of the Company's
         common stock. In lieu of the rights holder  exercising such right,  the
         Board of Directors has the option to issue, in exchange for each right,
         one-half of the number of shares of  preferred  stock (or common  stock
         having a value equal to the  Purchase  Price) that would be issuable on
         exercise  of the right.  If the Board of  Directors  has not  exchanged
         shares for the rights and the Company engages in a business combination
         with an  Acquiring  Person (or  affiliate or  associate  thereof),  the
         holder of rights will be entitled to purchase  for the  Purchase  Price
         (i)  common  stock  of  the  surviving  company  or its  publicly  held
         affiliate  having a market value equal to twice the Purchase  Price, or
         (ii) common stock of the surviving company having a book value equal to
         twice the Purchase  Price if the surviving  company and its  affiliates
         are not publicly held. The numbers of shares and the Purchase Price are
         subject  to  adjustment  for stock  dividends,  stock  splits and other
         changes in capitalization. The rights expire on October 15, 2007.

11.       In June 1997, the Financial Accounting Standards Board ("FASB") issued
          Statement  of  Financial   Accounting   Standards  No.  ("SFAS")  131,
          "Disclosures About Segments of an Enterprise and Related Information."
          SFAS 131 specifies  revised  guidelines  for  determining  an entity's
          operating segments and the type and level of financial  information to
          be disclosed.  SFAS 131 is effective for fiscal years  beginning after
          December  15,  1997.  Adoption  of SFAS 131  will not have a  material
          impact on Homestake's current geographic and segment disclosures.

          In June  1997,  the FASB  issued  SFAS 130,  "Reporting  Comprehensive
          Income." SFAS 130 establishes  standards for the reporting and display
          of comprehensive income and its components (revenues,  expenses, gains
          and  losses).  The  purpose of  reporting  comprehensive  income is to
          present a measure of all changes in  shareholders'  equity that result
          from recognized  transactions and other economic events of the period,
          other than transactions with owners in their capacity as owners.  SFAS
          130 is effective for financial  statements  issued for periods  ending
          after  December  15,  1997.  Adoption  of  SFAS  130  will  result  in
          additional  disclosures in Homestake's  financial  statements but will
          not impact the Company's reported net income or net income per share.

          In February 1997, the FASB issued SFAS 128, "Earnings Per Share." SFAS
          128   specifies   the   computation,   presentation   and   disclosure
          requirements  for  earnings  per  share.  SFAS  128 is  effective  for
          financial  statements  issued for periods  ending  after  December 15,
          1997.  Adoption  of SFAS  128  will  not  have a  material  impact  on
          Homestake's previously reported earnings per share.

12.       The Comprehensive  Environmental Response,  Compensation and Liability
          Act  ("CERCLA")  imposes  heavy  liabilities  on persons who discharge
          hazardous substances.


                                       9

<PAGE>


                   HOMESTAKE MINING COMPANY AND SUBSIDIARIES



         The  Environmental  Protection  Agency  ("EPA")  publishes  a National
         Priorities  List  ("NPL")  of known  or  threatened  releases  of such
         substances.

         Grants

         The  Company's  former  uranium  millsite  near Grants,  New Mexico is
         listed on the NPL. The EPA asserted  that  leachate  from the tailings
         contaminated   a  shallow   aquifer   used  by  adjacent   residential
         subdivisions.  The Company paid the costs of extending  the  municipal
         water  supply to the affected  homes and  continues to operate a water
         injection and collection  system that has  significantly  improved the
         quality of the aquifer. The Company has decommissioned and disposed of
         the mills and has covered the tailings  impoundments  at the site. The
         total  future  cost  for  reclamation,   remediation,  monitoring  and
         maintaining   compliance  at  the  Grants  site  is  estimated  to  be
         approximately $19 million.

         Title X of the  Energy  Policy Act of 1992 (the  "Act") and  subsequent
         amendments  to the Act  authorized  appropriations  of $335  million to
         cover the Federal  Government's  share of certain costs of reclamation,
         decommissioning  and remedial action for by-product material (primarily
         tailings)  generated  by certain  licensees  as an  incident of uranium
         sales to the Federal Government. Reimbursement is subject to compliance
         with regulations of the Department of Energy ("DOE"), which were issued
         in 1994.  Pursuant to the Act, the DOE is responsible for 51.2% of past
         and future  costs of  reclaiming  the Grants  site in  accordance  with
         Nuclear Regulatory Commission license  requirements.  Through September
         30, 1997 the Company had  received  $17.1  million from the DOE and the
         accompanying balance sheet at September 30, 1997 includes an additional
         receivable  of  $13.2  million  for  the  DOE's  share  of  reclamation
         expenditures  made by the Company  through 1996.  The Company  believes
         that its share of the estimated remaining cost of reclaiming the Grants
         facility is fully provided in the financial statements at September 30,
         1997.

         In 1983,  the state of New Mexico made a claim against the Company for
         unspecified   natural  resource  damages  resulting  from  the  Grants
         tailings. New Mexico has taken no action to enforce its claim.

         Whitewood Creek

         Deposits  of  tailings  (ground  rock)  along an  18-mile  stretch  of
         Whitewood Creek in western South Dakota formerly constituted a site on
         the NPL. The EPA asserted that discharges of tailings beginning in the
         nineteenth   century  by  mining   companies,   including   Homestake,
         contaminated the soil and streambed. Homestake signed a Consent Decree
         with the EPA and carried out remedial  work,  and the site was deleted
         form the NPL on August 13, 1996.

         On  July   23,   1997  the   Company   received   a  letter   from  the
         Mountain-Prairie  Region of the United States Fish and Wildlife Service
         stating that the  "Department  [of the Interior]  intends to file suit,
         subject to final  approval by the  Department of Justice,  against your
         company to recover natural  resource  damages and assessment  costs" in
         respect of tailings  placed in Whitewood  Creek,  South  Dakota,  under
         CERCLA,  the Clean  Water Act and other  applicable  laws.  The  letter
         stated that other federal  agencies may  participate in such litigation
         and also stated that the  Cheyenne  River Sioux Tribe  intended to file
         such  an  action.  The  letter  invited  Homestake  to  participate  in
         discussions  with the Department of the Interior and the Tribe over the
         next 60 days and indicated  that absent an agreement,  "the  Department
         intends to request  that the  Department  of Justice file a lawsuit for
         natural resource  damages against  Homestake upon the expiration of the
         60-day  notice  period."  The  Company  agreed to a  limited  waiver of
         statutes of limitations  until November 24, 1997, and discussions  with
         the federal  trustees and the Cheyenne River Sioux Tribe regarding this
         matter have continued.


                                       10

<PAGE>


                  HOMESTAKE MINING COMPANY AND SUBSIDIARIES



          In 1983,  the  state  of South  Dakota  made a claim  for  unspecified
          natural  resource  damages in respect of the  placement of tailings in
          Whitewood  Creek.  On  September  25,  1997 the state  filed an action
          pursuant  to CERCLA and a pendent  state  claim for damages to natural
          resources in a quantity yet to be ascertained.  Homestake has filed an
          answer denying the allegation and counterclaiming against the State of
          South Dakota.

          The Company believes that the ultimate resolution of the above matters
          will not have a material adverse impact on its financial  condition or
          results of operations.

          See Part II,  Item 1- Legal  Proceedings  of this  Form  10-Q for more
          details regarding this matter.

13.       In  October  1997,  Homestake  Canada  Inc.  ("HCI"),  a  wholly-owned
          subsidiary  of the  Company,  agreed to purchase a 51% interest in the
          Troilus  gold  mine  in  Quebec  from  Inmet  Mining  Corporation  for
          approximately  $56 million in cash.  Prime will purchase the remaining
          49% of the mine for  approximately  $54 million in cash. HCI and Prime
          also will purchase  their  proportionate  share of the Troilus  mine's
          working capital.  The Troilus mine has proven and probable reserves of
          almost 1.8  million  ounces of gold and 128  million  pounds of copper
          contained in 53 million tons of ore. The  transaction  is scheduled to
          close on December 17, 1997.

          HCI will be the operator of the Troilus  open-pit mine which commenced
          production in January 1997. The mine is expected to produce an average
          of 130,000  ounces of gold and 9.7 million  pounds of copper  annually
          over its remaining  12-year mine life. Assets purchased also include a
          newly constructed  processing facility and an 18,500-acre land package
          adjacent to the mine site.


Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations

(Unless  specifically  stated otherwise,  the following  information  relates to
amounts included in the consolidated  financial statements without reduction for
minority interests.)

Results of Operations

Homestake  recorded a net loss of $163.7  million or $1.12 per share  during the
third  quarter of 1997 compared to net income of $7.4 million or $0.05 per share
during the third quarter of 1996. The 1997 third quarter net loss included after
tax  write-downs  and other unusual  charges of $145.1 million  ($183.6  million
pretax) or $0.99 per share. Details of these noncash charges are as follows:

-    $84.9 million ($107.8 million pretax) write-down of Homestake's  investment
     in the Main Pass 299 sulfur mine: Homestake owns a 16.7% undivided interest
     in the Main Pass 299 sulfur  mine  located  in the Gulf of Mexico.  Planned
     write-downs by  Homestake's  joint venture  partners  caused the Company to
     reexamine the carrying  value of its  investment in Main Pass 299. Due to a
     prolonged period of low sulfur prices and Homestake's current assessment of
     estimated future cash flows from the Main Pass 299 sulfur mine, the Company
     recorded a write-down of $107.8 million in its investment in Main Pass 299.
     As a result of this  write-down,  the Company's  carrying value of the Main
     Pass 299  sulfur  property,  plant and  equipment  was  reduced  to zero at
     September 30, 1997.

-    $18.2 million ($24.3 million  pretax)  reduction in the carrying  values of
     short-lived  mining  properties:  As a result  of lower  gold  prices,  the
     Company reviewed the carrying values of its gold mining  operations using a
     $325 per ounce gold price for its short-lived operations and a


                                       11

<PAGE>


                  HOMESTAKE MINING COMPANY AND SUBSIDIARIES



     $350 per ounce gold price for its operations with longer lives. The Company
     determined that impairment write-downs were required to reduce the carrying
     value of several of its assets or operations  with short  remaining  lives,
     including the Pinson mine in Nevada, the Homestake mine's Open Cut in South
     Dakota, and low-grade stockpiled ore and certain redundant mining equipment
     at the Kalgoorlie  operations in Western Australia.  The Company determined
     that no adjustments to the carrying values of its  longer-lived  operations
     were required.

-    $21.5 million ($29.1 million pretax) increase in the estimated  accrual for
     future reclamation  expenditures:  As a result of a review of the Company's
     reclamation  liabilities,  the Company  determined that it was necessary to
     increase the reclamation accruals at certain of its nonoperating properties
     including the Santa Fe mine in Nevada,  the Nickel Plate mine in Canada and
     the Grants  uranium  complex in New  Mexico to reflect  revised  estimates,
     changed conditions and more stringent future reclamation requirements.


-    $14.7 million ($16.5 million pretax) write-down of certain investments: Low
     gold prices and lower market  valuations  for junior mining  companies have
     caused the value of certain of the Company's investments in other companies
     to decline  significantly.  The  Company  reduced  the  carrying  values of
     certain of its mining  investments  to reflect  reductions in value that it
     deemed to be other than temporary.

-    $5.8 million  ($5.9 million  pretax) in other  charges,  primarily  foreign
     exchange losses on intercompany redeemable preferred stock.

Excluding the effect of the  write-downs  and other unusual  charges,  Homestake
incurred a net loss of $18.6 million or $0.13 per share,  primarily reflecting a
significantly lower average realized gold price, higher exploration expenditures
and increased administrative and general expenses.

Year to date,  Homestake  recorded a net loss of $130 million or $0.89 per share
compared to 1996 year-to-date  earnings of $27.9 million or $0.19 per share. The
decreased 1997  year-to-date  earnings reflect the write-downs and other unusual
charges  mentioned  above,  partially offset by after-tax gains of $47.2 million
($62.9  million  pretax) or $0.32 per share from the fee received  from Santa Fe
Pacific Gold  Corporation  ("Santa Fe") upon  termination of Homestake's  merger
agreement with Santa Fe, and $8.1 million  ($13.5  million  pretax) or $0.06 per
share from the sale of the George Lake and Back River joint venture interests in
the Northwest Territories of Canada to Arauco Resources Corporation  ("Arauco").
Results for the 1996  year-to-date  period  included an  after-tax  gain of $4.9
million ($5.5 million pretax) from a litigation recovery.  Excluding the effects
of the  nonrecurring  items, the Company incurred a net loss of $40.2 million or
$0.27 per share  during the first nine months of 1997  compared to net income of
$23 million or $0.16 per share for the first nine months of 1996.

Gold  production  during the third quarter of 1997  increased to 491,900  ounces
from 484,100  ounces  produced  during the third quarter of 1996.  Revenues from
gold and ore sales for the 1997 third  quarter  decreased by 11% to $153 million
from $171.5 million during the 1996 third quarter,  primarily  reflecting  lower
gold prices.  During the third quarter of 1997,  496,900  ounces were sold at an
average  realized  price of $328 per ounce compared to 472,600 ounces sold at an
average  realized  price of $388 per ounce  during  the third  quarter  of 1996.
Finished  gold  inventories  decreased  by 5,000  ounces  during  the 1997 third
quarter  compared to an increase of 11,500  ounces during the prior year's third
quarter.

Domestic  production  during the third  quarter of 1997  decreased  slightly  to
170,300 ounces  compared to 173,100 ounces  produced during the third quarter of
1996,  primarily  due to lower  production  at the  McLaughlin  mine in northern
California.  Production  at the  McLaughlin  mine  decreased  by 7,300 ounces to
31,200 ounces during the 1997 third quarter compared to 38,500


                                       12

<PAGE>


                  HOMESTAKE MINING COMPANY AND SUBSIDIARIES


ounces produced  during the 1996 third quarter,  reflecting a 9% decrease in ore
grades.  Mining  operations  ceased  at the end of June  1996  and  lower  grade
stockpiled  ore will be  processed  over the next six  years.  Total  cash costs
remained  unchanged at $243 per ounce for the 1997 third quarter compared to the
1996 third quarter.  Homestake's  share of production at the Round Mountain mine
in Nevada  increased  to 31,400  ounces  during  the third  quarter of 1997 from
29,700  ounces  produced  during  the third  quarter  of 1996.  Total cash costs
decreased  by 6% to $237 per ounce  during the 1997 third  quarter from $252 per
ounce during the 1996 third quarter,  primarily due to the increased production.
Construction of an 8,000 tons-per-day gravity mill to treat higher grade ore was
completed in July 1997, and the mill is scheduled to begin commercial production
in November 1997.  During the 1997 third quarter,  Round Mountain approved a new
mining plan that is expected to increase cash flow and  profitability and reduce
total cash costs.  At the Homestake mine in Lead,  South Dakota,  production was
97,000  ounces during the third quarter of 1997 compared to 98,000 ounces during
the third quarter of 1996.  Total cash costs were $307 per ounce during the 1997
third quarter  compared to $305 per ounce during the comparable  quarter for the
prior year.

Total foreign gold  production  increased by 3% to 321,600 ounces from the prior
year's third quarter,  primarily due to production  increases at the Eskay Creek
mine in Canada and the Kalgoorlie  operations in Western  Australia,  as well as
production  at the new Agua de la Falda  mine in Chile,  which  poured its first
gold in April  1997.  These  increases  were  partially  offset by a  production
decline at the Snip mine in Canada and the absence of  production  at the Nickel
Plate mine.

Production at the Eskay Creek mine  increased to 105,400  ounces at a total cash
cost (including  third-party smelter charges) of $163 per ounce during the third
quarter of 1997 from  87,500  ounces  produced  at a total cash cost of $176 per
ounce during the third  quarter of 1996.  The improved  results  reflect  higher
grades  and  an  increase  in  tons  of  ore  shipped.  Construction  of  a  new
gravity/flotation  mill at Eskay Creek  commenced  in July 1997 and is scheduled
for  completion by the end of 1997.  The mill will improve profit margins on ore
currently  directly shipped to third-party  smelters and allow for the treatment
of some lower grade ores that otherwise could not be processed economically. The
capital  cost of the mill is  estimated  to be $12  million.  The mill  will add
approximately  30,000 ounces to Eskay Creek's average annual production over its
remaining life. Prime Resources Group, Inc. ("Prime"),  Homestake's  50.6%-owned
subsidiary,  became  the sole owner of the Snip mine when it  purchased  Cominco
Ltd.'s 60% interest in this mine for $39.3 million.  Production at the Snip mine
was 31,200  ounces  during  the 1997 third  quarter  compared  to 36,800  ounces
produced during the 1996 third quarter,  reflecting a 10% decrease in ore grades
and a 4% decrease in tons  milled.  As a result,  total cash costs  increased to
$210 per ounce  during  the third  quarter  of 1997  compared  to $163 per ounce
during  the  third  quarter  of 1996.  Homestake's  share of  production  at the
Williams  mine in Canada  totaled  51,200  ounces  during the 1997 third quarter
compared to 54,300 ounces produced during the prior year's third quarter.  Total
cash costs  increased  to $218 per ounce  during the third  quarter of 1997 from
$197 per ounce during the third quarter of 1996. The slightly  lower  production
and  corresponding  increase  in total  cash costs  primarily  are due to ground
control problems that  temporarily  have limited access to higher-grade  stopes.
Homestake's  share of  production  at the David  Bell mine in Canada  was 17,700
ounces during the 1997 third quarter  compared to 19,700 ounces  produced during
the 1996 third quarter.  Total cash costs increased to $241 per ounce during the
1997 third quarter from $203 per ounce during the 1996 third quarter.  The lower
production and corresponding increase in total cash costs results from lower ore
grades,   the  mining  of  narrower  and  smaller  stopes,  and  ground  control
difficulties during the 1997 third quarter.

Homestake's  share of production at the Kalgoorlie  operations  totaled  102,500
ounces at a total cash cost of $242 per ounce  during the third  quarter of 1997
compared to 91,900 ounces



                                       13

<PAGE>


                 HOMESTAKE MINING COMPANY AND SUBSIDIARIES



produced  at a total  cash cost of $282 per ounce  during  the third  quarter of
1996. The improved  results reflect a 4% increase in recovery and a draw down of
in-process inventories  (Homestake's share - 5,600 ounces),  partially offset by
decreased  throughput.  The  decrease  in total cash costs  primarily  is due to
higher production and the installation of a recycle crusher at the Fimiston mill
earlier this year.

The new Agua de la Falda mine (51% owned by Homestake, 49% by Codelco) commenced
mining  operations late in 1996 and the first gold was poured in April 1997. The
mine  produced  10,700  ounces of gold during the 1997 third  quarter.  Both the
average ore grade and ore production rates have been higher than expected.  As a
result, total cash costs of $231 per ounce are well below projections. Estimated
gold production for the Agua de la Falda mine in 1997 is 28,000 ounces.

The  Company's  consolidated  total cash cost per ounce  decreased by 4% to $234
during the third quarter of 1997 from $245 during the third quarter of 1996.

Year-to-date  1997  revenues  from gold and ore  sales  totaled  $477.7  million
compared to gold and ore sales of $541.7 million  during the  comparable  period
for 1996.  The  decrease  in  revenues  is due to a $52  decrease in the average
realized gold price. During the first nine months of 1997, 1,472,800 ounces were
sold at an  average  realized  price  of $341  per  ounce  compared  to sales of
1,470,700  ounces sold at an average realized price of $393 per ounce during the
first nine months of 1996. Total cash costs during the first nine months of 1997
decreased  to $243 per ounce from $249 per ounce during the first nine months of
1996.

The Company's  share of revenues at the Main Pass 299  operations in the Gulf of
Mexico  totaled  $6.3  million  during  the third  quarter of 1997  compared  to
revenues of $7.2 million during the third quarter of 1996, and operating  losses
declined  to $.4 million  during the 1997 third  quarter  compared to  operating
earnings of $.4 million  during the 1996 third  quarter.  The results  primarily
reflect  lower oil  prices  and an  anticipated  decline  in oil sales  volumes,
partially  offset by a slight increase in sulfur prices.  As discussed above, at
September 30, 1997 the Company  recorded a write-down  of $107.8  million in its
investment in the Main Pass 299 sulfur mine.

To provide  protection  against a decrease in gold prices,  the Company  entered
into a series of put and call  option  contracts  during the 1997 third  quarter
which  will  provide  a floor  price of $325 per  ounce  for  900,000  ounces of
Homestake's 1998 gold production.  The Company purchased put options for 900,000
ounces of gold exercisable during 1998 at a price of $325 per ounce. The Company
also sold call options for 900,000 ounces of gold  exercisable  during 1998 at a
price of $325 per ounce and  purchased  call options for 900,000  ounces of gold
exercisable  during  1998  at  $336  per  ounce.  These  option  contracts  were
established at no net cost to the Company.

The Company also  purchased  put options for 30,000  ounces of gold  exercisable
during 2000 at a price of $350 per ounce and sold call options for 15,000 ounces
of gold exercisable during 2000 at an average price of $395 per ounce.

In  the  fourth  quarter  of  1996,  the  Company  entered  into  forward  sales
commitments  for 680,100 ounces expected to be produced from the McLaughlin mine
stockpiles  from 1997 through  2003. In addition,  during the second  quarter of
1997 the Company  entered into forward  sales  commitments  for 20,000 ounces of
gold to be produced  in 2001 and 2002.  Gold sales for the three and nine months
ended  September  30, 1997 include  sales of 30,000  ounces and 90,000 ounces at
average  prices of $387 per ounce and $383 per ounce,  respectively.  Gold sales
for the three and nine months ended  September  30, 1996 include sales under the
now-completed  Nickel  Plate mine  forward  sales  program of 24,900  ounces and
70,000  ounces  at  average  prices  of $427  per  ounce  and  $421  per  ounce,
respectively.  At  September  30, 1997  forward  sales for 610,100  ounces at an
average price of $432 per ounce remain outstanding.


                                       14

<PAGE>


                 HOMESTAKE MINING COMPANY AND SUBSIDIARIES


A  significant  portion of the  Company's  operating  expenses  is  incurred  in
Australian and Canadian currencies.  The Company's  profitability is impacted by
fluctuations in these  currencies'  exchange rates relative to the United States
dollar.  Under the Company's foreign currency  protection  program,  the Company
enters  into a series of  foreign  currency  option  contracts  which  establish
trading  ranges  within  which the United  States  dollar may be  exchanged  for
Australian and Canadian dollars.  At September 30, 1997 the Company has recorded
a net unrealized loss of $5.1 million on open contracts under this program.

Administrative  and general  expense of $10.8 million for the 1997 third quarter
compares to $8.8  million for the 1996 third  quarter.  The  increase  primarily
reflects  employee  relocations  to the new Agua de la Falda and Ruby Hill mines
and higher investment banking fees.

Exploration  expense for the three and nine months ended  September 30, 1997 was
$14.6 million and $36.7 million,  respectively,  compared to exploration expense
of $12 million and $29.5  million for the three and nine months ended  September
30,  1996,  respectively.  The higher  exploration  expenses  reflect  increased
activity as the Company pursues numerous exploration targets and prospects.

Income and mining tax credits for the three and nine months ended  September 30,
1997 were $37.2  million  and $4 million,  respectively,  compared to income and
mining tax  expense of $9.1  million  and $37.7  million  for the three and nine
months  ended  September  30, 1996,  respectively.  Tax credits  totaling  $38.5
million with respect to the  write-downs and other unusual charges were recorded
in the third  quarter of 1997. In addition,  the  year-to-date  period  includes
$15.7 million of expense associated with the termination fee received from Santa
Fe and $5.4  million of expense  related to the gain on sale of the George  Lake
and Back River joint venture interests.  During the first nine months of 1996, a
$2.6 million credit was recorded with respect to a litigation  recovery relating
to previously paid income taxes. The Company's consolidated effective income and
mining  tax rate will  fluctuate  depending  on the  geographical  mix of pretax
income.

Minority interests in the income of consolidated  subsidiaries decreased to $8.1
million during the first nine months of 1997 from $10.8 million during the first
nine months of 1996. The decrease  primarily is attributable to lower income due
to lower gold prices realized by Prime and higher exploration  expenses incurred
during the first nine months of 1997 by the Company's 51%-owned subsidiary, Agua
de la Falda S.A., which was formed in July 1996.

The following charts detail Homestake's gold production and total cash costs per
ounce by location, and consolidated revenue and production costs per ounce.


                                       15

<PAGE>


                              HOMESTAKE MINING COMPANY AND SUBSIDIARIES

<TABLE>
<CAPTION>

                                                                       Production
                                                                  (Ounces in thousands)
                                                     Three Months Ended                  Nine Months Ended
                                                        September 30,                       September 30,
Mine (Percentage interest)                          1997             1996               1997             1996
                                            ------------------------------      ------------------------------

<S>                                                 <C>              <C>               <C>              <C>  
Homestake (100)                                     97.0             98.0              301.3            306.5
McLaughlin (100)                                    31.2             38.5               93.7            153.3
Round Mountain (25)                                 31.4             29.7               92.0             78.4
Pinson (50) (1)                                      6.3              2.9               18.9              7.7
Marigold (33)                                        4.4              4.0               18.7             16.8
                                            -------------    -------------      -------------    -------------
    Total United States                            170.3            173.1              524.6            562.7

Eskay Creek (100) (2,3)                            105.4             87.5              300.9            281.7
Williams (50)                                       51.2             54.3              145.4            149.3
David Bell (50)                                     17.7             19.7               61.5             72.2
Quarter Claim (25)                                   2.9              2.9                8.5              8.5
Snip (100) (3,4)                                    31.2             36.8               90.7             69.8
Nickel Plate (100)                                     -             16.1                 -              67.9
                                            -------------    -------------      -------------    -------------
     Total Canada                                  208.4            217.3              607.0            649.4

Kalgoorlie, Australia (50)                         102.5             91.9              317.8            259.3

Agua de la Falda (100)                              10.7              -                 19.0               -
El Hueso (100)                                         -              1.8                0.5              6.7
                                            -------------    -------------      -------------    -------------
     Total Chile                                    10.7              1.8               19.5              6.7

                                            -------------    -------------      -------------    -------------
Total Production                                   491.9            484.1            1,468.9          1,478.1
Less Minority Interests                            (72.7)           (61.5)            (202.7)          (173.7)
                                            -------------    -------------      -------------    -------------
Homestake's Share                                  419.2            422.6            1,266.2          1,304.4
                                            =============    =============      =============    =============
</TABLE>

<TABLE>
<CAPTION>
                                                                    Total Cash Costs
                                                                   (Dollars per ounce)

                                                     Three Months Ended                   Nine Months Ended
                                                       September 30,                       September 30,
Mine (Percentage interest)                          1997             1996               1997             1996
                                               ------------------------------      ------------------------------
<S>                                                <C>              <C>                <C>              <C> 
United States
     Homestake (100)                                $307             $305               $318             $298
     McLaughlin (100)                                243              243                247              239
     Round Mountain (25)                             237              252                225              253
     Pinson (50) (1)                                 344              347                343              392
     Marigold (33)                                   316              343                260              282

Canada
     Eskay Creek (100) (2,3)                         163              176                162              170
     Williams (50)                                   218              197                240              228
     David Bell (50)                                 241              203                214              170
     Quarter Claim (25)                              172              166                173              167
     Snip (100) (3,4)                                210              163                210              175
     Nickel Plate (100)                                -              383                  -              342

Kalgoorlie, Australia (50)                           242              282                265              309

Chile
     Agua de la Falda (100)                          231                -                219                -
     El Hueso (100)                                    -              375                310              270

Weighted Average                                    $234             $245               $243             $249
</TABLE>


                                       16

<PAGE>


                    HOMESTAKE MINING COMPANY AND SUBSIDIARIES


<TABLE>
<CAPTION>


                                                     Three Months Ended                  Nine Months Ended
                                                        September 30,                       September 30,
Per Ounce of Gold                                   1997             1996               1997             1996
-----------------                           ------------------------------      ------------------------------
<S>                                                 <C>              <C>                <C>              <C> 
Revenue                                             $328             $388               $341             $393
                                            ==============================      ==============================

Per Ounce Costs
     Cash Operating Costs (5)                       $230             $238               $238             $242
     Other Cash Costs (6)                              4                7                  5                7
                                            ------------------------------      ------------------------------
     Total Cash Costs                                234              245                243              249
     Noncash Costs  (7)                               57               60                 55               58
                                            ------------------------------      ------------------------------
     Total Production Costs                         $291             $305               $298             $307
                                            ==============================      ==============================

<FN>

     (1)  Homestake  increased its ownership  percentage in the Pinson mine from
          26.3% to 50% in December 1996.

     (2)  Gold and silver  are  accounted  for as  co-products  at Eskay  Creek.
          Silver is converted to gold equivalent,  using the ratio of the silver
          market price to the gold market price. These ratios were 72 ounces and
          76  ounces  of silver  equals  one ounce of gold for the three  months
          ended September 30, 1997 and 1996, respectively,  and 71 ounces and 74
          ounces of silver  equals one ounce of gold for the nine  months  ended
          September  30, 1997 and 1996,  respectively.  Eskay  Creek  production
          includes  63,100  (48,400  in  1996)  payable  ounces  of gold and 3.1
          million (3 million in 1996) payable ounces of silver  contained in ore
          sold to smelters in the third quarter,  and 174,000  (160,100 in 1996)
          payable  ounces of gold and 9.1  million (9  million in 1996)  payable
          ounces of silver contained in ore sold to smelters in the year-to-date
          period.

     (3)  For comparison purposes,  total cash costs per ounce include estimated
          third-party  costs  incurred  by smelter  owners and others to produce
          marketable gold and silver.

     (4)  Includes  ounces of gold contained in dore and  concentrates.  Prime's
          ownership  percentage  in the  Snip  mine  increased  from 40% to 100%
          effective April 30, 1996.

     (5)  Cash  operating  costs  are costs  directly  related  to the  physical
          activities of producing gold;  includes mining,  milling,  third-party
          smelting  and  in-mine  drilling  expenditures  that  are  related  to
          production.

     (6)  Other cash costs are costs that are not  directly  related to, but may
          result from, gold production; includes production taxes and royalties.

     (7)  Noncash costs are costs that  typically are accounted for ratably over
          the life of an operation;  includes depreciation,  depletion, accruals
          for final  reclamation  and the  amortization  of the economic cost of
          property acquisitions,  but excludes amortization of SFAS 109 deferred
          tax purchase adjustments relating to property acquisitions.
</FN>

</TABLE>

Liquidity and Capital Resources

Cash provided by operations  totaled $97.1 million  during the first nine months
of 1997 compared to $151.6 million during the first nine months of 1996. Working
capital at September 30, 1997 amounted to $255.8 million, including $230 million
of cash and short-term investments.


                                       17

<PAGE>


                   HOMESTAKE MINING COMPANY AND SUBSIDIARIES


Capital  additions  of $106.7  million for the first nine months of 1997 include
$50.7 million for construction and development work at the Ruby Hill mine, $12.5
million  at  the  Round  Mountain  mine  primarily  for a new  mill  to  process
higher-grade  sulfide ore, $11.7 million at the Kalgoorlie  operations primarily
for a decline from surface and a ventilation  raise at the Mt.  Charlotte  mine,
$10.8 million at the Eskay Creek mine  primarily for the  construction  of a new
gravity/flotation  mill, and $10.2 million at the Homestake mine primarily for a
new tailings dam lift and improvements in the underground operations.

In July 1997,  Lawrence County,  South Dakota issued $30 million of South Dakota
Solid Waste  Disposal  Revenue  Bonds and $18 million of South Dakota  Pollution
Control Refunding  Revenue Bonds,  both of which are due in 2032.  Proceeds from
the Solid Waste  Disposal  Revenue Bonds were relent to the Company and proceeds
from  the  Pollution  Control  Refunding  Revenue  Bonds  were  used  to  redeem
outstanding South Dakota pollution control bonds. The Company is responsible for
funding principal and interest payments on these bonds.  Proceeds from the Solid
Waste Disposal  Revenue Bonds are being used for  construction of a new tailings
dam lift and other  qualifying  expenditures at the Homestake  mine.  Qualifying
expenditures of $11.5 million had been incurred  through  September 30, 1997 and
the  remaining  $18.5  million is held in a trustee  account  committed  for the
construction  of the new  tailings dam lift and other  qualifying  expenditures.
This  $18.5  million  of  restricted  cash is  included  in other  assets in the
accompanying balance sheet at September 30, 1997.

The Company has a United States/Canadian/Australian cross-border credit facility
providing a total  availability  of $275 million.  The Company pays a commitment
fee of 0.15%  per annum on the  unused  portion  of this  facility.  The  credit
facility is available  through  September  2001 and provides for  borrowings  in
United States,  Canadian,  or Australian  dollars,  or gold, or a combination of
these.  The credit agreement  requires a minimum  consolidated net worth of $500
million.  At September 30, 1997 Homestake Gold of Australia Limited ("HGAL") had
$7.2 million of borrowings  outstanding  under this agreement.  In October 1997,
HGAL  borrowed  an  additional  $46.8  million  under  this  agreement  to repay
intercompany advances.

In October 1997, Homestake Canada Inc. ("HCI"), a wholly-owned subsidiary of the
Company,  agreed to purchase a 51%  interest in the Troilus  gold mine in Quebec
from Inmet Mining  Corporation for approximately $56 million in cash. Prime will
purchase the  remaining 49% of the mine for  approximately  $54 million in cash.
HCI and Prime also will purchase their proportionate share of the Troilus mine's
working capital. The Troilus mine has proven and probable reserves of almost 1.8
million ounces of gold and 128 million pounds of copper  contained in 53 million
tons of ore. The  transaction  is  scheduled to close on December 17, 1997.  HCI
will be the operator of the Troilus open-pit mine which commenced  production in
January  1997.  The mine is expected to produce an average of 130,000  ounces of
gold and 9.7 million pounds of copper  annually over its remaining  12-year mine
life. Assets purchased also include a newly constructed  processing facility and
an 18,500-acre land package adjacent to the mine site.

On November 6, 1997 the  Company's new Ruby Hill mine in Nevada poured its first
gold. The mine is now  processing  ore at the design  capacity of 3,500 tons per
day and gold  production  for  1997  likely  will  exceed  initial  projections.
Starting in 1998,  Ruby Hill will produce  between 105,000 and 110,000 ounces of
gold annually at an estimated total cash cost of approximately $140 per ounce.

In March 1997,  Santa Fe terminated its previously  announced  merger  agreement
with  Homestake and paid Homestake a $65 million  termination  fee. As a result,
the Company  recorded a pretax gain of $62.9 million  ($47.2 million after tax),
net of merger-related expenses of $2.1 million incurred in 1997.


                                       18

<PAGE>


                   HOMESTAKE MINING COMPANY AND SUBSIDIARIES



In February  1997,  Homestake  completed the sale of its interests in the George
Lake and Back River joint  ventures in Canada to Arauco for $9.3 million in cash
and 3.6 million shares of Arauco common stock. As a result of this  transaction,
the Company  recorded a pretax gain of $13.5  million  ($8.1 million after tax),
which is included in other income.

In February  1997,  the Company  paid a cash  dividend of 5 cents per share.  In
March 1997, the Company  reduced its annual  dividend rate to 10 cents per share
from 20 cents per share and declared a semi-annual dividend of 5 cents per share
which  was  paid  in May  1997.  In  September  1997,  the  Company  declared  a
semi-annual dividend of 5 cents per share payable in November 1997.

In April 1997,  the Company filed a shelf  registration  with the Securities and
Exchange  Commission  for the  potential  sale  of up to 20  million  shares  of
Homestake  common stock.  The proceeds from any such offering would be available
for general  corporate  purposes,  which  could  include  capital  expenditures,
repayment of debt and future acquisitions which have the potential to add to the
Company's gold reserves and future gold production.

Future  results  will be impacted by such  factors as the market  price of gold,
silver and sulfur,  the  Company's  ability to expand its ore  reserves  and the
fluctuations of foreign  currency  exchange rates. The Company believes that the
combination  of cash,  short-term  investments,  available  lines of credit  and
future cash flows from  operations  will be sufficient to meet normal  operating
requirements, planned capital expenditures, and anticipated dividends.


Part II - OTHER INFORMATION

Item 1 - Legal Proceedings

Reference is made to Part II - Other Information: Item 1 - Legal Proceedings, of
the  Company's  Form 10-Q Report for the quarter  ended June 30,  1997.  In that
report,  the  Company  disclosed  that it had  received a letter from the United
States Fish and Wildlife  Service  stating that the  Department  of the Interior
intended to file suit,  subject to final  approval of the Department of Justice,
against the  Company's  wholly-owned  subsidiary,  Homestake  Mining  Company of
California  ("HMCC") to recover alleged natural  resource damages and assessment
costs under the Comprehensive Environmental Response, Compensation and Liability
Act  ("CERCLA")  with  respect to alleged  releases of hazardous  substances  at
Whitewood Creek in South Dakota.  HMCC agreed to a limited waiver of statutes of
limitations  until November 24, 1997, and discussions  with the federal trustees
and the Cheyenne River Sioux Tribe regarding this matter have continued.

On September  25, 1997 the State of South Dakota filed an action  against  HMCC,
State of South Dakota v. Homestake Mining Company of California, U.S. Dist. Ct.,
W.D.S.D., Civ. Action No. 97-5078. The action relates to the same general matter
which is the subject of the above referenced letter - placement of mine tailings
in Whitewood  Creek.  In the  complaint,  the State of South Dakota alleges that
HMCC  disposed  of mine  tailings  in  Whitewood  Creek and that  such  disposal
resulted in injuries to natural  resources in Whitewood  Creek and downstream in
the Belle Fourche River, the Cheyenne River and Lake Oahe on the Missouri River.
The complaint  also alleges that the State of South Dakota  incurred  assessment
costs.  The State of South Dakota claims that it is a trustee  authorized  under
CERCLA to bring such action.  The  complaint  also  contains a pendent state law
claim,  alleging  that the  tailings  placed in  Whitewood  Creek  constitute  a
continuing  public nuisance in and around the Belle Fourche River,  the Cheyenne
River and Lake Oahe. The complaint  asks for abatement of the nuisance,  damages
in an unascertained amount, costs and interest.


                                       19

<PAGE>


                   HOMESTAKE MINING COMPANY AND SUBSIDIARIES


Whitewood Creek was a site where mining  companies  operating in the Black Hills
of  South  Dakota,  including  HMCC,  placed  mine  tailings  beginning  in  the
nineteenth  century.  Whitewood Creek is a tributary to the Belle Fourche River,
which is a tributary to the Cheyenne River and Lake Oahe. As a consequence, some
tailings  placed in Whitewood  Creek  eventually  flowed into the Belle  Fourche
River and downstream therefrom.  Placement of mine tailings into Whitewood Creek
was  authorized by the laws of the United States,  the Dakota  territory and the
State of South Dakota, and Whitewood Creek was later specifically  designated by
the State of South  Dakota as a disposal  stream for mine  tailings  and for the
disposal  of raw  sewage  and  other  municipal  waste.  Consequently,  all mine
tailings  placed by HMCC in  Whitewood  Creek were placed there with the consent
and  encouragement of the State of South Dakota and the United States government
and in  compliance  with  applicable  laws.  In  response  to  changes  in legal
requirements,  HMCC ceased the placement of mine tailings into  Whitewood  Creek
and for many years the  Homestake  mine has impounded all mine tailings that are
not redeposited in the mine.

In its answer,  HMCC denies that there has been any continuing damage to natural
resources or nuisance caused by HMCC as a result of the placement of tailings in
Whitewood Creek. Among other defenses, it is also the position of HMCC that as a
result  of the  State  of  South  Dakota's  ownership  of  Whitewood  Creek  and
designation  of  Whitewood  Creek as an  authorized  disposal  site under  state
authority,  the State of South  Dakota was and is the owner and  operator of the
Whitewood  Creek waste disposal site and is responsible  for all past and future
damages  and  any  continuing  nuisance  resulting  therefrom.   HMCC  has  also
counterclaimed  against  the  State  of  South  Dakota  seeking  cost  recovery,
contribution and indemnity from the State of South Dakota, in its capacity as an
owner and operator of a disposal facility,  for expenses previously incurred and
to be incurred  in the future with  respect to  Whitewood  Creek and  downstream
areas.

HMCC intends to vigorously defend this action and to seek recovery, contribution
and  indemnity  from the State of South Dakota for past and future  expenditures
with respect to Whitewood Creek and its downstream  receiving  water.  HMCC also
expects, as appropriate, to seek recovery, contribution and indemnity from other
government  entities and other  persons who  participated  in  ownership  and/or
operation of Whitewood  Creek as a waste  disposal site or who disposed of waste
in the site.

In the opinion of the Company,  there is no basis for the claims by the State of
South Dakota or by the federal trustees. The Company is also of the opinion that
HMCC has valid defenses and counterclaims against the State of South Dakota, and
cross-claims for recovery,  contribution and indemnity  against other government
entities and other persons who  participated  in ownership  and/or  operation of
Whitewood  Creek as a waste  disposal site or who disposed of waste in the site.
The Company  does not  believe  that  resolution  of these  matters  will have a
material effect on the business or financial  condition or results of operations
of the Company.

As previously  reported in the Company's  Form 10-K Annual  Reports,  an 18-mile
stretch of land along  Whitewood  Creek on which  tailings  were  deposited  was
designated  as a  superfund  site and  placed on the  National  Priorities  List
("NPL") in 1983.  During the period from 1982 through 1990 extensive  studies of
the   superfund   site  were   conducted  to  identify  any  public  health  and
environmental  issues related to the site and appropriate  remedial  action.  In
August 1990,  HMCC signed a consent decree with the United States  Environmental
Protection  Agency  ("EPA")  in United  States of America  v.  Homestake  Mining
Company of California,  U.S. Dist. Ct., W.D.S.D., Civ. Action No. 90-5101. Under
the  Consent  Decree,  HMCC  conducted  remedial  work at its  expense  and also
reimbursed the EPA for its oversight costs. Remedial field work was completed in
1993.  The decree also provided for the three  counties in which the property is
located to enact institutional  controls which would limit the future use of the
property included within the area of the superfund site.  Institutional controls
were adopted in all three counties. In


                                       20

<PAGE>


                    HOMESTAKE MINING COMPANY AND SUBSIDIARIES


addition,  HMCC offered to purchase all properties  along  Whitewood  Creek that
were affected by the institutional  controls.  Approximately $3 million has been
spent  to date  to  acquire  property  along  Whitewood  Creek  and the  Company
estimates  that the total  cost for  purchasing  all of the  remaining  affected
property would be an additional $3 million.

The  Consent  Decree  was  terminated  by the Court on  January  10,  1996.  The
Whitewood  Creek  site was  deleted  from the NPL on  August  13,  1996.  In the
deletion  notice,  the EPA stated that "EPA, in  consultation  with the State of
South  Dakota,  have  determined  that the Site poses no  significant  threat to
public health or the environment."


Item 5. - Other Information

CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain  statements  contained  in this  Form 10-Q  that are not  statements  of
historical  facts are  "forward  looking  statements"  within the meaning of the
Private  Securities  Litigation Reform Act of 1995. Such statements are based on
beliefs of management,  as well as assumptions made by and information currently
available to management.  Forward looking  statements  include those preceded by
the  words  "believe,"  "estimate,"  "expect,"  "intend,"  "will,"  and  similar
expressions,  and include estimates of future production, costs per ounce, dates
of  construction  completion,  costs of capital  projects  and  commencement  of
operations.  Forward looking statements are subject to risks,  uncertainties and
other factors that could cause actual results to differ materially from expected
results.  Some important factors and assumptions that could cause actual results
to differ materially from expected results are discussed below. Those listed are
not exclusive.

Estimates of future production for particular  properties and for the Company as
a whole are derived  from annual  mine plans that have been  developed  based on
mining experience,  reserve estimates,  assumptions  regarding ground conditions
and  physical  characteristics  of  ore  (such  as  hardness  and  metallurgical
characteristics),  expected rates and costs of production,  and estimated future
sales prices.  Actual production may vary for a variety of reasons,  such as the
factors  described  above,  ore  mined  varying  from  estimates  of  grade  and
metallurgical and other characteristics,  mining dilution, actions by labor, and
government  imposed  restrictions.  Estimates of production  from properties and
facilities  not yet in  production  are based on similar  factors but there is a
greater likelihood that actual results will vary from estimates due to a lack of
actual  experience.  Cash  cost  estimates  are  based  on such  things  as past
experience,  reserve and production  estimates,  anticipated  mining conditions,
estimated  costs of materials,  supplies and utilities,  and estimated  exchange
rates.  Noncash cost estimates are based on capital costs and reserve estimates,
changes  based on actual  amounts  of  unamortized  capital,  changes in reserve
estimates,  and changes in estimates of final  reclamation.  Estimates of future
capital  costs are based on a variety  of factors  and  include  past  operating
experience,  estimated  levels of future  production,  estimates by and contract
terms  with  third-party  suppliers,  expectations  as to  government  and legal
requirements,  feasibility reports by Company personnel and outside consultants,
and other  factors.  Capital  cost  estimates  for new  projects  are subject to
greater  uncertainties  than additional  capital costs for existing  operations.
Estimated  time for  completion of capital  projects is based on such factors as
the Company's experience in completing capital projects,  and estimates provided
by and contract terms with contractors, engineers, suppliers and others involved
in design and  construction of projects.  Estimates  reflect  assumptions  about
factors beyond the Company's control,  such as the time government agencies take
in processing  applications,  issuing permits and otherwise completing processes
required under  applicable laws and  regulations.  Actual time to completion can
vary significantly from estimates.




                                       21

<PAGE>


                   HOMESTAKE MINING COMPANY AND SUBSIDIARIES


See the Company's  Form 10-K Report for the year ended  December 31, 1996,  Part
IV,  "FORWARD  LOOKING  STATEMENTS"  and  "RISK  FACTORS,"  for a more  detailed
discussion of factors that may impact expected future results.


Item 6 - Exhibits and Reports on Form 8-K

Exhibits

         4   -      Amendment  No. 1 dated as of October 15, 1997, to the Rights
                    Agreement  dated as of October 16, 1987,  between  Homestake
                    Mining Company and BankBoston  N.A., as successor to Bank of
                    America  National Trust and Savings  Association,  as Rights
                    Agent  (incorporated  by  reference  to  Exhibit  4  to  the
                    Registrant's Form 8-A/A filed on October 16, 1997).


         11  -      Computation   of  Earnings  Per  Share  (filed   herewith
                    electronically)
 
         27 -       Financial Data Schedule (filed herewith electronically)


(b)      Reports on Form 8-K

          One report on Form 8-K was filed  during the quarter  ended  September
          30, 1997. The report, dated August 26, 1997, was submitted in order to
          file the Second and Third Amendments to the Credit Agreement.

                                       22

<PAGE>


                    HOMESTAKE MINING COMPANY AND SUBSIDIARIES



                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.







                                                   HOMESTAKE MINING COMPANY




Date:  November 13, 1997                       By /s/ Gene G. Elam
                                                  ----------------
                                                  Gene G. Elam
                                                  Vice President, Finance and
                                                  Chief Financial Officer








Date:  November 13, 1997                       By /s/ David W. Peat
                                                  -----------------
                                                  David W. Peat
                                                  Vice President and Controller
                                                  (Chief Accounting Officer)

                                       23