<PAGE>   1
================================================================================


                                 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, 1998

          [ ]    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 1-9666

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

          Nevada                                               76-0151431
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)

               333 Clay Street, 42nd Floor, Houston, Texas 77002
          (Address of principal executive offices, including Zip Code)

                                 (713) 650-6400
              (Registrant's telephone number, including area code)

                                      NONE
             (Former name, former address and former fiscal year if
                           changed since last report)

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

         Number of shares of Common Stock outstanding as of the latest
practicable date, November 4, 1998: 127,766,133.  In addition, as of such date,
there were outstanding 102,057,544 Exchangeable Shares of Battle Mountain
Canada Ltd.  which are exchangeable at any time into Common Stock on a
one-for-one basis, entitle their holders to dividend and other rights
economically equivalent to those of the Common Stock, and through a voting
trust, vote at meetings of stockholders of the Registrant.


================================================================================
<PAGE>   2
                          BATTLE MOUNTAIN GOLD COMPANY
                                     INDEX

<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----
<S>                                                                                      <C>
       Part I. Financial Information (Unaudited)

           Condensed Consolidated Statement of Operations
             for the three and nine months ended September 30, 1998 and 1997              1

           Condensed Consolidated Balance Sheet
             at September 30, 1998 and December 31, 1997                                  2

           Condensed Consolidated Statement of Cash Flows
             for the nine months ended September 30, 1998 and 1997                        3

           Notes to Condensed Consolidated Financial Statements                           4

           Supplemental Information                                                       7

           Management's Discussion and Analysis of Financial Condition
             and Results of Operations                                                   10

       Part II.Other Information                                                         15
</TABLE>





<PAGE>   3
PART I.    FINANCIAL INFORMATION

ITEM 1.    Financial Statements

                          BATTLE MOUNTAIN GOLD COMPANY
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                           Three months ended          Nine months ended
                                                              September 30               September 30
                                                         ----------------------      ----------------------
 Millions, except per share amounts                        1998          1997          1998          1997
 ----------------------------------                      --------      --------      --------      --------
<S>                                                      <C>           <C>           <C>           <C>     
 Sales                                                   $   70.0      $   90.2      $  217.2      $  257.9
                                                         --------      --------      --------      --------

 Costs and expenses
   Production costs                                          39.2          61.4         122.6         168.6
   Depreciation, depletion and amortization                  19.9          19.7          62.4          56.0
   Exploration, evaluation & other lease costs, net           3.5           5.8          16.3          17.3
    Merger expense (Note 2)                                    --            --            --           2.3
   General and administrative expenses                        3.7           2.8          11.1          10.9
                                                         --------      --------      --------      --------
         Total costs and expenses                            66.3          89.7         212.4         255.1
                                                         --------      --------      --------      --------
 Operating income                                             3.7           0.5           4.8           2.8
   Interest expense                                          (4.5)         (3.0)        (13.9)         (9.0)
   Other income (expense), net (Note 3)                      (6.5)          2.6          (8.2)          8.9
                                                         --------      --------      --------      --------
 Income (loss) before income taxes and
   minority interest                                         (7.3)          0.1         (17.3)          2.7
    Income tax benefit                                       (1.8)        (24.9)         (5.4)        (17.6)
    Mining taxes                                              2.2           0.6           5.4           4.6
    Minority interest in net income                            --          (0.3)         (1.3)         (1.9)
                                                         --------      --------      --------      --------
 Income (loss) before cumulative effect of
   accounting change                                         (7.7)         24.1         (18.6)         13.8
     Cumulative effect of accounting change (Note 4)           --            --            --          (3.7)
                                                         --------      --------      --------      --------
 Net income (loss)                                           (7.7)         24.1         (18.6)         10.1
   Preferred dividends                                        1.9           1.9           5.6           5.6
                                                         --------      --------      --------      --------
 Net income (loss) to common shares                      $   (9.6)     $   22.2      $  (24.2)     $    4.5
                                                         ========      ========      ========      ========
 Earnings (loss) per common share (Note 5)
   Basic                                                 $   (.04)     $    .10      $   (.11)     $    .02
                                                         ========      ========      ========      ========
    Diluted                                              $   (.04)     $    .09      $   (.11)     $    .02
                                                         ========      ========      ========      ========
 Dividends per common share                              $   .025      $   .025      $    .05      $    .05
                                                         ========      ========      ========      ========
 Average common shares outstanding for
   earnings (loss) per share purposes
    Basic                                                   229.8         229.7         229.8         229.7
                                                         ========      ========      ========      ========
    Diluted                                                 229.8         234.6         229.8         234.6
                                                         ========      ========      ========      ========
 </TABLE>


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





                                       1
<PAGE>   4
                          BATTLE MOUNTAIN GOLD COMPANY
                      CONDENSED CONSOLIDATED BALANCE SHEET



<TABLE>
<CAPTION>
                                               September 30,  December 31,
                                                   1998           1997   
                                               -------------  ------------
Millions                                        (Unaudited)

<S>                                            <C>             <C>
 Assets
    Current assets
     Cash and cash equivalents                   $  193.2     $  185.0
     Restricted cash                                  9.2         17.7
     Accounts and notes receivable                   25.4         33.0
     Inventories                                     10.3          8.3
     Materials and supplies, at average cost         24.2         25.4
     Assets held for sale (Note 6)                     --         42.5
     Other current assets                             8.2         12.1
                                                 --------     --------
          Total current assets                      270.5        324.0

    Investments                                     261.6        255.2
    Property, plant and equipment, net              444.3        489.3
    Other assets                                     21.2         24.7
                                                 --------     --------

 Total assets                                    $  997.6     $1,093.2
                                                 ========     ========

 Liabilities and Shareholders' Equity
    Current liabilities
     Short-term borrowings                       $     --     $    4.9
     Current maturities of long-term debt            37.6         44.0
     Account payable                                 14.2         24.0
     Income and mining taxes payable                 21.7         10.1
     Other current liabilities                       14.5         23.1
                                                 --------     --------
          Total current liabilities                  88.0        106.1

    Long-term debt                                  217.1        241.0
    Deferred income and mining taxes                 61.8         84.1
    Other liabilities                                48.6         48.3
                                                 --------     --------
          Total liabilities                         415.5        479.5

    Minority interest                               108.1        107.7
    Commitments and contingencies (Note 7)             --           --
    Shareholders' equity                            474.0        506.0
                                                 --------     --------
 Total liabilities and shareholders' equity      $  997.6     $1,093.2
                                                 ========     ========
 </TABLE>


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





                                       2
<PAGE>   5
                          BATTLE MOUNTAIN GOLD COMPANY
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  Nine months ended
                                                                    September 30
                                                                  ------------------
 Millions                                                          1998        1997
 --------                                                         ------      ------
<S>                                                               <C>         <C>   
 Cash flows from operating activities
    Net income  (loss)                                            $(18.6)     $ 10.1
    Adjustments to reconcile net income (loss) to cash
       flows from operating activities:
        Depreciation, depletion and amortization                    62.4        56.0
        Deferred income taxes                                      (16.8)      (32.8)
        Foreign currency exchange loss                              12.6         0.4
        Equity in losses of equity investee                          4.5          --
        Cumulative effect of accounting change (Note 4)               --         3.7
        Change in working capital accounts, net                     13.3         3.1
        Other, net                                                   4.7         4.8
                                                                  ------      ------
 Net cash flows provided by operating activities                    62.1        45.3
                                                                  ------      ------
 Cash flows from investing activities
    Capital expenditures                                           (37.9)      (48.2)
    Investment in Lihir                                            (11.5)         --
    New World settlement, net (Note 6)                              34.9          --
    Other, net                                                       3.3        (0.5)
                                                                  ------      ------
 Net cash flows used in investing activities                       (11.2)      (48.7)
                                                                  ------      ------
 Cash flows from financing activities
    Cash proceeds from borrowings                                     --       162.8
    Debt repayments                                                (30.0)      (17.9)
    Decrease in short-term borrowings                               (4.9)      (12.5)
    Cash dividend payments                                         (17.1)      (17.1)
    Decrease in restricted cash                                      8.7         0.4
    Other, net                                                       0.3         0.7
                                                                  ------      ------
 Net cash flows provided by (used in) financing activities         (43.0)      116.4
                                                                  ------      ------
 Effect of exchange rate changes on cash and cash equivalents        0.3        (5.2)
                                                                  ------      ------
 Net increase in cash and cash equivalents                           8.2       107.8
 Cash and cash equivalents at beginning of period                  185.0        94.0
                                                                  ------      ------
 Cash and cash equivalents at end of period                       $193.2      $201.8
                                                                  ======      ======
</TABLE>


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







                                       3
<PAGE>   6
                          BATTLE MOUNTAIN GOLD COMPANY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


Note 1.  General Information

The unaudited condensed consolidated financial statements included herein have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission and include all normal recurring adjustments which are, in
the opinion of the management of Battle Mountain Gold Company ("BMG"),
necessary for a fair presentation.  Certain information and footnote
disclosures required by generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. These financial
statements include the accounts of BMG and its wholly-owned and majority-owned
subsidiaries ("the Company") and should be read in conjunction with the
consolidated financial statements which are included in the Company's Annual
Report on Form 10-K (File No. 1-9666) for the year ended December 31, 1997.
Certain amounts for prior periods may have been reclassified in order to
conform to the current reporting presentation and requirements.

The Company implemented Statement of Financial Accounting Standards ("SFAS")
No. 130, "Reporting Comprehensive Income," effective January 1, 1998.  This
standard requires that all items required to be recognized under this standard
as components of comprehensive income be reported in a financial statement.
The Company's comprehensive income (loss) follows:

<TABLE>
<CAPTION>
                                             Three months ended     Nine months ended
                                                September 30           September 30
                                             ------------------     -----------------
 Millions                                      1998      1997       1998       1997
 --------                                     -----      -----      ------     -----
<S>                                           <C>        <C>        <C>        <C>  
 Net income (loss)                            $(7.7)     $24.1      $(18.6)    $10.1
 Foreign currency translation adjustments       4.4       (0.1)        4.6      (5.4)
                                              -----      -----      ------     -----
 Comprehensive income (loss)                  $(3.3)     $24.0      $(14.0)    $ 4.7
                                              =====      =====      ======     =====
 </TABLE>


In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which is
required to be adopted for fiscal years beginning after June 15, 1999.  This
standard requires companies to record derivative financial instruments on the
balance sheet as assets or liabilities, as appropriate, at fair value.  Gains
or losses resulting from changes in the fair values of those derivatives are
accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting. Based on the current level of its hedging activities, the
Company believes that the implementation of this standard will not have a
material adverse effect on the Company's consolidated financial position or
results of operations.

Note 2.  Merger Expenses

In connection with the 1996 combination of BMG and Battle Mountain Canada Ltd.
("BMCL"), formerly Hemlo Gold Mines Inc., an additional $2.3 million of merger
expenses were incurred in the first half of 1997, consisting primarily of
merger-related severance payments made to BMG employees.





                                       4
<PAGE>   7
Note 3.  Other Income (Expense), net

Other income (expense), net consisted of the following:
<TABLE>
<CAPTION>
                                        Three months ended     Nine months ended
                                           September 30          September 30
                                        ------------------     -----------------
 Millions                                1998       1997       1998       1997
 --------                                -----      -----      -----      -----
<S>                                      <C>        <C>        <C>        <C>  
 Interest income                         $ 2.7      $ 0.9      $ 8.7      $ 4.1
 Capitalized interest                       --        1.5         --        4.5
 Foreign currency exchange loss, net      (7.2)      (0.3)     (12.6)      (0.4)
 Equity in losses of equity investee      (1.8)        --       (4.5)        --
 Other, net                               (0.2)       0.5        0.2        0.7
                                         -----      -----      -----      -----
 Total                                   $(6.5)     $ 2.6      $(8.2)     $ 8.9
                                         =====      =====      =====      =====
 </TABLE>

Note 4.  Change in Accounting Method

Effective January 1, 1997, Empresa Minera Inti Raymi S.A. ("Inti Raymi"), the
Company's 88%-owned Bolivian gold mining subsidiary, changed its method of
calculating depreciation, depletion and amortization ("DD&A") of mining
properties and certain related assets at its Kori Kollo mine.  Under the newly
adopted method, Inti Raymi calculates units-of-production DD&A on an
ounces-produced basis and applies such DD&A rate to the total estimated
development costs to be incurred throughout the mine life of Kori Kollo. The
Company correspondingly changed its method of amortizing the premium associated
with its investment in Inti Raymi to an ounces-sold basis.  Previously, both
such DD&A calculations were based on a tonnes-milled rate applied to the
capital costs incurred to date.

The cumulative effect of this accounting change for periods ending prior to
January 1, 1997 was a decrease in net income of $3.7 million, or $.02 per
common share, net of minority interests of $0.5 million and income tax of $0.5
million.

Note 5.  Earnings (Loss) per Common Share

The Company's outstanding preferred stock, convertible debentures and stock
options were not included in diluted loss per share calculations for the three
and nine month periods ended September 30, 1998 because they were anti-dilutive
for those periods.  Diluted earnings per share computations for the three and
nine month periods ended September 30, 1997 included 4.8 million and 0.1 million
common stock equivalents, representing additional common shares outstanding had
the Company's convertible debentures and stock options, respectively, been
converted.  The Company's convertible preferred stock was not included in the
1997 calculations because it was anti-dilutive.

Note 6.  New World Project

In 1997, the Company reclassified $42.5 million of other property, plant and
equipment to assets held for sale in the condensed consolidated balance sheet,
representing the estimated net realizable value of the New World project.  In
August 1998, the Company closed the sale of the New World project and received
net cash proceeds of $34.9 million from the sale.  No gain or loss was incurred
in 1998 in connection with the sale.





                                       5
<PAGE>   8
Note 7.  Contingencies

See "Part II - Other Information - Legal Proceedings" for information
concerning significant legal proceedings of the Company.  In addition to the
legal proceedings described therein, the Company is party to a number of
actions arising in the ordinary course of business.  While the final outcome of
these actions cannot be predicted with certainty, the Company believes that the
outcome of these actions will not have a material adverse effect on the
Company's financial condition, results of operations or cash flows.

Note 8.  Summarized Financial Information

The following summarized information of Battle Mountain Canada Ltd. is
presented in accordance with the Securities and Exchange Commission's reporting
requirements as they pertain to the BMCL Exchangeable Shares:

<TABLE>
<CAPTION>
                        Three months ended     Nine months ended
                           September 30          September 30
                        ------------------     ------------------
Millions                 1998        1997       1998        1997
--------                ------      ------     ------      ------
<S>                     <C>         <C>        <C>         <C>   
 Sales                  $ 38.2      $ 31.7     $115.7      $106.0
 Costs and expenses       28.3        31.2       94.3        89.9
                        ------      ------     ------      ------
 Operating income       $  9.9      $  0.5     $ 21.4      $ 16.1
                        ======      ======     ======      ======
 Net income (loss)      $ (1.6)     $  8.6     $ (4.2)     $ 18.2
                        ======      ======     ======      ======
</TABLE>

Summarized financial information of Lihir Gold Limited ("Lihir"), which
commenced commercial operations on October 1, 1997, follows:

<TABLE>
<CAPTION>
                         Three months ended    Nine months ended
Millions                 September 30, 1998    September 30, 1998
--------                 ------------------    ------------------
<S>                          <C>                <C>
 Sales                         $ 43.3               $134.2
 Costs and expenses              36.8                106.0
                               ------               ------
 Operating income              $  6.5               $ 28.2
                               ======               ======
 Net income (loss)             $ (0.7)              $  3.4
                               ======               ======
 </TABLE>





                                       6
<PAGE>   9
                          BATTLE MOUNTAIN GOLD COMPANY
                            SUPPLEMENTAL INFORMATION
                         OPERATING DATA (Unaudited) (1)
           (All production data reflects BMG attributable interests)



<TABLE>
<CAPTION>
                                              Three months ended   Nine months ended
                                                 September 30         September 30
                                              ------------------   -----------------
                                                 1998     1997       1998     1997
                                                 ----     ----       ----     ----
<S>                                               <C>      <C>        <C>      <C>
 GOLDEN GIANT
     Gold recovered (000s oz)                     103       85        293      262
     Silver recovered (000s oz)                     6        4         23       12
 -----------------------------------------------------------------------------------
   Cost per Gold Ounce Sold
     Cash production costs                       $105     $130       $115     $140
     Depreciation, depletion and amortization      62       64         67       65
     Reclamation and mine closure costs             4        4          4        4
                                                 ----     ----       ----     ----
     Total production costs                      $171     $198       $186     $209
 -----------------------------------------------------------------------------------
 KORI KOLLO (88% Interest)
     Gold recovered (000s oz)                      73       73        221      207
     Silver recovered (000s oz)                   205      180        650      561
 -----------------------------------------------------------------------------------
   Cost per Gold Ounce Sold (2)
     Cash production costs                       $185     $197       $179     $196
     Depreciation, depletion and amortization     128      121        130      122
     Reclamation and mine closure costs            11        7         11        8
                                                 ----     ----       ----     ----
     Total production costs                      $324     $325       $320     $326
 -----------------------------------------------------------------------------------
 HOLLOWAY (84.65% Interest)
     Gold recovered (000s oz)                      20       13         59       42
 -----------------------------------------------------------------------------------
   Cost per Gold Ounce Sold
     Cash production costs                       $199     $329       $228     $332
     Depreciation, depletion and amortization     108      123        114      119
     Reclamation and mine closure costs             2        2          2        2
                                                 ----     ----       ----     ----
     Total production costs                      $309     $454       $344     $453
 -----------------------------------------------------------------------------------
 BATTLE MOUNTAIN COMPLEX
     Gold recovered (000s oz)                       8       20         32       59
     Silver recovered (000s oz)                    22       34         67      106
 -----------------------------------------------------------------------------------
   Cost per Gold Ounce Sold
     Cash production costs                       $279     $269       $253     $274
     Depreciation, depletion and amortization      64       41         46       37
     Reclamation and mine closure costs            --       45         --       44
                                                 ----     ----       ----     ----
     Total production costs                      $343     $355       $299     $355
 -----------------------------------------------------------------------------------
</TABLE>




                                       7
<PAGE>   10
                          BATTLE MOUNTAIN GOLD COMPANY
                            SUPPLEMENTAL INFORMATION
                         OPERATING DATA (Unaudited) (1)
           (All production data reflects BMG attributable interests)

<TABLE>
<CAPTION>



                                                 Three months ended    Nine months ended
                                                     September 30        September 30
                                                 ------------------    -----------------
                                                   1998       1997      1998       1997
                                                 -------     ------    ------     ------
<S>                                              <C>         <C>       <C>        <C>
 LIHIR (8.65 Interest) (3)
     Gold recovered (000s oz)                         11                   34
 ---------------------------------------------------------------------------------------
   Cost per Gold Ounce Sold
     Cash production costs                        $  232                $ 204
     Depreciation, depletion and amortization        145                  177
                                                  ------                -----
     Total production costs                       $  377                $ 381
 ---------------------------------------------------------------------------------------
 
 VERA/NANCY (50% Interest) (3)
     Gold recovered (000s oz)                         10          8        35          8
     Silver recovered (000s oz)                        9         10        29         10
 ---------------------------------------------------------------------------------------
   Cost per Gold Ounce Sold
     Cash production costs                        $  151     $  181     $ 137     $  181
     Depreciation, depletion and amortization         32         29        30         29
     Reclamation and mine closure costs                1          2         1          2
                                                  ------     ------     -----     ------
     Total production costs                       $  184     $  212     $ 168     $  212
 ---------------------------------------------------------------------------------------
 
 SAN CRISTOBAL (50.5% Interest)
     Gold recovered (000s oz)                          4         10        16         27
     Silver recovered (000s oz)                        7         21        30         58
 ---------------------------------------------------------------------------------------
   Cost per Gold Ounce Sold
     Cash production costs (4)                    $  134     $  433     $ 158     $  404
     Depreciation, depletion and amortization         38         68        75         54
     Reclamation and mine closure costs               --          2        --          8
                                                  ------     ------     -----     ------
     Total production costs                       $  172     $  503     $ 233     $  466
 ---------------------------------------------------------------------------------------
 
 RED DOME (50.5% Interest) (5)
     Gold recovered (000s oz)                                     4                   24
     Silver recovered (000s oz)                                  82                  162
     Copper recovered (000s lb)                               2,485                3,702
 ---------------------------------------------------------------------------------------
   Cost per Gold Ounce Sold
     Cash production costs                                   $  225               $  239
     Depreciation, depletion and amortization                    31                   20
     Reclamation and mine closure costs                          15                   13
                                                             ------               ------
     Total production costs                                  $  271              $   272
 ---------------------------------------------------------------------------------------
</TABLE>






                                       8
<PAGE>   11

                          BATTLE MOUNTAIN GOLD COMPANY
                            SUPPLEMENTAL INFORMATION
                         OPERATING DATA (Unaudited) (1)
           (All production data reflects BMG attributable interests)


<TABLE>
<CAPTION>
                                                 Three months ended     Nine months ended
                                                   September 30           September 30
                                                 ------------------     -----------------
                                                  1998        1997       1998       1997
                                                 ------      ------     ------     ------
<S>                                               <C>        <C>        <C>        <C>
 SILIDOR (55% Interest) (5)
     Gold recovered (000s oz)                                     1                    10
 ----------------------------------------------------------------------------------------
   Cost Per Gold Ounce Sold
     Cash production costs                                   $  239                $  318
     Depreciation, depletion and amortization                    --                    39
     Reclamation and mine closure costs                          --                     5
                                                             ------                ------
     Total production costs                                  $  239                $  362
 ----------------------------------------------------------------------------------------
 AGGREGATE DATA
    Gold recovered BMG share (000s oz)               229        214        690        639
    Gold sold BMG share (000s oz)                    230        221        689        637
    Gold recovered (000s oz)                         253        237        769        717
    Gold sold (000s oz)                              254        251        768        714
 Average price per oz realized                    $  299     $  332     $  306     $  346
 ----------------------------------------------------------------------------------------
    Silver recovered BMG share (000s oz)             249        331        799        908
    Silver sold BMG share (000s oz)                  253        343        800        848
    Silver recovered (000s oz)                       283        456        917      1,201
    Silver sold (000s oz)                            290        485        920      1,087
 Average price per oz realized                    $ 5.19     $ 4.43     $ 5.61     $ 4.75
 ----------------------------------------------------------------------------------------
    Weighted Average Cost per Gold Ounce Sold
     Cash production costs                        $  153     $  197     $  158     $  201
     Depreciation, depletion and amortization         90         80         94         82
     Reclamation and mine closure costs                5          9          5          9
                                                  ------     ------     ------     ------
     Total production costs                       $  248     $  286     $  257     $  292
 ----------------------------------------------------------------------------------------
</TABLE>

(1)  Cash production costs are presented in accordance with guidelines
     established by The Gold Institute. In addition to mining, milling and plant
     level general and administrative expenses, cash production costs include
     royalties, freight, smelting costs and allowances, and production taxes.
     Credits for by-product silver and copper are offset against these cash
     production costs. This standard also provides for reporting on a cost per
     gold ounce basis, rather than cost per equivalent gold ounce.

(2)  Royalties paid to the Bolivian government for the Kori Kollo mine are
     treated as income tax for per ounce cost purposes and therefore are not
     included in these cost calculations.

(3)  Production started at Vera/Nancy and at Lihir during the third and fourth
     quarters of 1997, respectively.

(4)  Includes net deferred stripping costs of $133 and $6 per ounce for the
     three and nine month periods ended September 30, 1997, respectively, and
     deferred stripping costs of $36 per ounce for the nine months ended
     September 30, 1998.

(5)  Production ceased at Silidor and at Red Dome during the third and fourth
     quarters of 1997, respectively.




                                       9
<PAGE>   12

ITEM 2.             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations included in the
Company's Annual Report on Form 10-K (File No. 1-9666) for the year ended
December 31, 1997 and the historical condensed consolidated financial
statements and notes thereto preceding this discussion.

OVERVIEW - Increased gold production and decreased cash production costs by the
Company's mines helped improve cash flows from operations during the first nine
months of 1998 compared with the same period in 1997, despite a $40 per ounce
lower average realized gold price.  However, $12.6 million of net foreign
currency exchange losses recorded in 1998, primarily as a result of the
weakened Canadian dollar's effect on Battle Mountain Canada Ltd.'s U.S. dollar-
denominated debt, and continued low realized gold prices resulted in a net loss
to common shares of $9.6 million and $24.2 million, respectively, for the three
and nine month periods ended September 30, 1998.

Market Conditions and Risks

Gold Price - The Company's profitability is significantly affected by changes
in the market price of gold. Gold prices can fluctuate widely and are affected
by numerous factors, such as demand, forward selling by producers, central bank
sales and purchases, investor sentiment and production levels.  Continued
uncertainty about the level of central banks' holding and lending of gold
reserves, the perception of sustainable low-inflationary environments and other
factors could continue to adversely impact the market price of gold.  While the
Company is one of the lowest cost gold producers, a sustained period of low
gold prices could have a material adverse affect on its financial position and
results of operations.  Consistent with the Company's impairment policy, if
current low gold prices persist, the Company may be required to reduce the
carrying values of some of its long-lived assets in the future, as appropriate.

Foreign Currency - The Company has operations in Canada and Australia in
addition to operations in the United States and other countries.  Gold produced
at these operations is sold in the international markets for U.S. dollars.  The
cost structures at these operations are primarily Canadian and Australian
dollar denominated, respectively.  As such, the Company is exposed to financial
risk to the extent that there are fluctuations in local currency exchange rates
against the U.S. dollar.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1998, the Company had cash and cash equivalents of $193.2
million, of which $110.9 million was held by BMG and its wholly-owned
subsidiaries, $48.4 million was held by Niugini Mining Limited ("NML"), a Papua
New Guinea company, $30.7 million was held by Crown Butte Mines, Inc. and $3.2
million was held by Inti Raymi.  In addition, $9.2 million of restricted cash
was held by Inti Raymi for future debt purposes.

See Part II - Other Information - Legal Proceedings and Note 7 of Notes to
Condensed Consolidated Financial Statements for a discussion of material
contingencies.

The Company expects that cash currently held, along with future cash flows from
operations, will be sufficient to meet future cash needs at least through 1999.





                                       10
<PAGE>   13
Operating Activities - The Company generated cash flows of $62.1 million from
operating activities during the nine months ended September 30, 1998 compared
with $45.3 million for the nine months ended September 30, 1997. The increase
in cash flows from operations was primarily the result of higher production and
lower operating costs, despite lower gold prices.

Investing Activities - Capital expenditures totaled $37.9 million during the
nine months ended September 30, 1998 as compared with $48.2 million during the
same period in 1997.  Capital expenditures for the nine months ended September
30, 1998 and 1997 included $4.5 million and $6.0 million, respectively, of
capitalized interest paid related to the Company's investment in Lihir.  The
Company has reduced its total 1998 projected capital expenditures to $50
million due to a revised construction schedule for the Crown Jewel Project.
However, 1998 capital expenditures could be substantially higher as the Company
is continuing to evaluate strategic opportunities that may exist in the
marketplace as a result of depressed gold prices.

In conjunction with contributions made by certain other equity investors, in
May 1998, NML increased its investment in Lihir by $11.5 million, maintaining
the Company's 8.65% attributable equity interest in Lihir. In August 1998, the
Company completed the sale of the New World project and received net cash
proceeds of $34.9 million from the sale.  See Note 6 of Notes to Condensed
Consolidated Financial Statements for further discussion.

Financing Activities - The Company made $30.0 million of scheduled debt
payments during the nine months ended September 30, 1998.  In addition,
restricted cash balances decreased $8.7 million, net in 1998 primarily because
in August 1998 NML was released from its obligations under the Lihir financing
agreement and funds previously held in escrow were remitted to NML.  In
September 1997, BMG sold its interest in NML to BMCL, facilitated primarily by
a $145 million bank borrowing by BMCL.

Battle Mountain Gold Company has an effective registration statement filed with 
the Securities and Exchange Commission, and similar filings in Canada, for the 
sale of up to 65.2 million shares of BMG common stock currently beneficially 
owned by Noranda Inc. BMG will not receive any proceeds from the sale of any of 
the shares.

RESULTS OF OPERATIONS

Net Income (loss) - The Company recorded net losses of $9.6 million ($.04 per
share) and $24.2 million ($.11 per share) for the three and nine month periods
ended September 30, 1998, respectively.  This compares with net income of $22.2
million ($.10 per share) and $4.5 million ($.02 per share), respectively, for
the same periods in 1997.  Results in 1998 were impacted by lower gold prices,
higher DD&A and increased foreign currency exchange losses, partially offset by
higher production and lower operating costs.  Results in 1997 included income
tax benefits of $24.9 million as a result of a change in certain assumptions
related to the Company's accounting for U.S. income taxes, $2.3 million of
merger expenses and a $3.7 million charge related to a change in accounting
method.

<TABLE>
<CAPTION>
                                                         Three months ended             Nine Months ended
                                                            September 30                   September 30
                                                         -------------------            --------------------
                                                          1998         1997             1998          1997
                                                         -----        ------            -----        ------
<S>                                                      <C>          <C>               <C>          <C>
Gold sales - 100%, thousand ounces                         254           251              768          714
Average gold revenue realized per ounce                  $ 299        $  332            $ 306        $ 346
Average London PM gold fix per ounce                     $ 289        $  327            $ 294        $ 339
</TABLE>

Sales - Sales decreased for the three month period ended September 30, 1998
compared with the same period in 1997 primarily as a result of lower realized
gold prices and decreased sales volumes. Excluding the Company's share of ounces
sold by Lihir, an equity investment, sales volumes decreased 7% compared with
the same period in 1997.  Contributing to this decrease were the effects of the
ceasing of production at the Red Dome mine in the second half of 1997 following
depletion of the remaining





                                       11
<PAGE>   14
stockpiles, the ceasing of mining operations at the San Cristobal mine in the
first quarter of 1998 and decreased ounces recovered from the Reona mine.
Partially offsetting these decreases was higher production at Golden Giant.

Sales also decreased for the nine month period ended September 30, 1998
compared with the same period in 1997 primarily resulting from lower realized
gold prices.  Increased production at the Golden Giant, Kori Kollo and Holloway
mines, and higher production at Vera/Nancy which commenced commercial
production in the third quarter of 1997, mostly offset lower production at the
Red Dome and San Cristobal mines and the closure of the Silidor mine.

The average realized price of gold decreased for the nine months ended
September 30, 1998, compared with the same period in 1997, as a result of
decreased spot gold prices.  Average realized prices for the three and nine
month periods ended September 30, 1998 were higher than the average London PM
fix price for the same periods due to gains recognized from the Company's
forward sales, primarily at Lihir.

<TABLE>
<CAPTION>
   CONSOLIDATED PRODUCTION COSTS                            Three months ended     Nine months ended
    PER OUNCE OF GOLD SOLD                                    September 30          September 30
                                                            ------------------     -----------------
                                                             1998       1997       1998       1997
                                                             -----      -----      -----      -----
<S>                                                          <C>        <C>        <C>        <C>  
 Direct mining costs                                         $ 157      $ 208      $ 158      $ 211
 Deferred stripping adjustments                                  2          6          4         --
 Third party smelting, refining and transportation costs         2         11          2          6
 By-product credits included in sales                           (6)       (24)        (7)       (13)
                                                             -----      -----      -----      -----
     Cash operating costs                                      155        201        157        204
 Royalties*                                                      3          6          3          5
                                                             -----      -----      -----      -----
     Total cash costs                                          158        207        160        209
 Depreciation, depletion and amortization                       87         78         92         79
 Reclamation and mine closure costs                              5          9          5          9
                                                             -----      -----      -----      -----
     Total production costs                                  $ 250      $ 294      $ 257      $ 297
                                                             =====      =====      =====      =====
</TABLE>

<TABLE>
<CAPTION>
RECONCILIATION OF TOTAL CASH COSTS PER OUNCE
 TO CONSOLIDATED FINANCIAL STATEMENTS*                   Three months ended      Nine months ended
                                                            September 30             September 30
                                                         ------------------      ------------------
 Millions, except ounces sold and per ounce amounts       1998        1997        1998        1997
 ---------------------------------------------------     ------      ------      ------      ------
<S>                                                      <C>         <C>         <C>         <C>   
 Production costs per financial statements               $ 39.2      $ 61.4      $122.6      $168.6
 Lihir production costs                                     4.9          --        13.5          --
 By-product credits included in sales                      (1.6)       (6.1)       (5.3)       (9.2)
 Reclamation and mine closure costs                        (1.3)       (2.2)       (3.9)       (6.4)
 Other                                                     (1.1)       (1.2)       (3.6)       (3.6)
                                                         ------      ------      ------      ------
 Production costs for per ounce calculation purposes     $ 40.1      $ 51.9      $123.3      $149.4
                                                         ======      ======      ======      ======
 Gold ounces sold, thousands                                254         251         768         714
                                                         ======      ======      ======      ======
 Total cash costs per gold ounce sold                    $  158      $  207      $  160      $  209
                                                         ======      ======      ======      ======
 </TABLE>


* Royalties paid to the Bolivian government for the Kori Kollo mine are treated
  as income tax for per ounce cost calculations and therefore are not included
  in these cost calculations.





                                       12
<PAGE>   15
Production costs - Total production costs decreased for the three and nine
month periods ended September 30, 1998 compared with 1997, primarily a result
of lower operating costs and weakened foreign currencies. Contributing to the
decreases were the closures of the Red Dome and Silidor mines in the second
half of 1997 and decreased production costs at Golden Giant.  Lower Canadian
dollar exchange rates contributed to the lower costs at Golden Giant.  The
overall decreases were partially offset by the addition of production costs
from the Vera/Nancy mine.

Consolidated per ounce cash costs decreased for the three and nine month
periods ended September 30, 1998 compared with the same periods in 1997.  All
of the Company's mines showed per ounce cash cost reductions in 1998 as
compared with 1997.  Golden Giant's cash costs per ounce decreased from $140
per ounce to $115 per ounce for the nine month period in 1998, primarily a
result of higher ore grades mined.  Kori Kollo cash costs per ounce decreased
primarily as a result of lower costs.

Depreciation, depletion and amortization - DD&A increased in total and on a
cost per gold ounce sold basis for the three and nine month periods ended
September 30, 1998 compared with the same periods in 1997.  DD&A increased in
total primarily as a result of increases at Kori Kollo, Golden Giant and
Holloway because of increased production.  Lower DD&A at the San Cristobal mine
partially offset the overall increase.  Depreciation, depletion and
amortization from the Lihir mine also contributed to the increase on a cost per
ounce sold basis.

Exploration, evaluation and other lease costs, net - Exploration, evaluation
and other lease costs decreased for the three and nine month periods ended
September 30, 1998, compared with the same periods in 1997, primarily as a
result of differences in the timing of expenditures.

Merger expenses - Additional merger expenses of $2.3 million were recorded in
the first half of 1997, consisting primarily of merger-related severance
payments made to certain former BMG employees related to the 1996 combination
of BMG and BMCL.

Interest expense - Interest expense increased in the three and nine month
periods ended September 30, 1998, compared with the same periods in 1997,
primarily as a result of the $145 million bank borrowing by BMCL in September
1997.

Other income (expense), net - Other income, net decreased for the three and
nine month periods ended September 30, 1998 compared with the same periods in
1997.  This decrease was primarily as a result of $7.2 million and $12.6
million of net foreign currency exchange losses incurred in the three and nine
month periods ended September 30, 1998, respectively.  These exchange losses
were primarily related to the effect of the weakened Canadian dollar on BMCL's
U.S.  dollar-denominated debt.  Also contributing to the decreases in other
income were decreased capitalized interest, as interest related to Lihir is no
longer capitalized effective October 1, 1997 upon commencement of commercial
operations, and the recording of the Company's share of Lihir losses in 1998.
Partially offsetting the decrease in other income was increased interest income
resulting from higher levels of invested cash.

Income and mining taxes - The Company's provision for income taxes for the
three and nine month periods ended September 30, 1998 reflected benefits of
$1.8 million and $5.4 million, respectively, on losses before taxes of $7.3
million and $18.6 million, respectively.  The Company's effective income tax
rates for the three and nine month periods ended September 30, 1998 were 25%
and 29%, respectively.





                                       13
<PAGE>   16
The Company's provision for income taxes for the three and nine month periods
ended September 30, 1997 was $24.9 million and $17.6 million, respectively, on
a loss before taxes of $0.2 million and income before taxes of $0.8 million,
respectively.  In September 1997, the Company recorded a $16.4 million income
tax benefit, representing a release of certain deferred tax asset valuation
allowances and certain withholding tax liabilities previously recorded on
expected remittances of Canadian earnings.  Also, as a result of revised
projections of future taxable income at certain of the Company's subsidiaries
and the subsequent recognition of the tax benefits of net operating loss
carryforwards at these subsidiaries, BMG recorded additional tax benefits of
$7.2 million in September 1997.

Mining taxes increased for the three and nine month periods ended September 30,
1998 compared with the same periods in 1997 due to increased mining income from
the Company's Canadian mines.

Cumulative effect of accounting change - Effective January 1, 1997, Inti Raymi
changed its method of calculating DD&A of mining properties and certain related
assets at its Kori Kollo mine.  See Note 4 of Notes to Condensed Consolidated
Financial Statements for further discussion.

OTHER

Hedging - The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes.  Derivative instruments
are generally used to manage well-defined interest rate, foreign currency
exchange rate and commodity price risks.  The Company had no material hedged
forward sales contracts outstanding at September 30, 1998.

Pursuant to pricing provisions as set forth in certain customer forward sales
contracts, as of September 30, 1998, the Company had committed to deliver
64,800 ounces of gold valued at approximately $18.9 million at prices
determined during various pricing periods in 1998.  The average price of gold
sold under these commitments was $292 per ounce and all such contracts mature
by January 29, 1999.

Accounting Standards - In June 1998, the Financial Accounting Standards Board
issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which is required to be adopted for fiscal years beginning after
June 15, 1999.  This standard requires companies to record derivative financial
instruments on the balance sheet as assets or liabilities, as appropriate, at
fair value.  Gains or losses resulting from changes in the fair values of those
derivatives are accounted for depending on the use of the derivative and
whether it qualifies for hedge accounting.  Based on the current level of its
hedging activities, the Company believes that the implementation of this
standard will not have a material adverse effect on the Company's consolidated
financial position, results of operations or liquidity.

Foreign Operations - Identifiable assets attributable to operations of the
Company outside the U.S. and Canada as of September 30, 1998 were approximately
$476.3 million.  Mining operations outside the U.S. and Canada represented
approximately 46% of the total gross revenues of the Company for the nine
months ended September 30, 1998.  As a result, the Company is exposed to risks
normally associated with operations located outside the U.S. and Canada,
including political, economic, social and labor instabilities, as well as
foreign exchange controls, currency fluctuations and taxation changes.





                                       14
<PAGE>   17


Year 2000 ("Y2K") Issue - The risks associated with the Year 2000 are the 
result of computer technology utilizing only the last two digits of a year 
rather than all four to define a specific year. Absent corrective actions, some 
computer programs that are not "Y2K-compliant" may recognize a date using "00" 
as the year 1900, rather than the year 2000. This could result in system 
failure or miscalculations, causing disruptions to various activities and 
operations.

The Company is in the final stage of its Y2K readiness program, with a review 
of its computer systems inventory, systems validation, and certification and 
testing stages having been completed. Both information technology ("IT") and 
non-IT systems, such as various equipment used at the Company's mines, that 
have been determined to by Y2K non-compliant are being replaced or upgraded, as 
appropriate. The cost of replacing those effected non-IT systems is immaterial 
to the Company. The Company is also in the final stages of a previously planned 
Y2K-compliant IT systems upgrade. In addition, critical vendor/supplier 
readiness confirmations are currently being obtained. An outside contractor is 
assisting the Company with its Y2K readiness program and it is expected that 
the program will be completed by mid-1999.

The Company is in the process of reviewing and evaluating its most likely 
worst-case scenario with regards to Y2K. The Company is also in the process of 
developing business contingency plans in order to mitigate potential 
disruptions, including those that may result from non-compliant systems 
utilized by unrelated third party governmental and business entities. It is 
expected that the plans will be completed by mid-1999. These plans will be 
continually reviewed and updated as necessary until the year 2000.

As a result of efforts described herein, the Company does not anticipate any 
material adverse effect regarding Y2K compliance on the Company's consolidated 
results of operations, financial position or cash flows, although no assurance 
can be given. The Company believes that third party noncompliance will be the 
area of greatest risk of Year 2000 having a material adverse effect on the 
Company.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

The U.S. securities laws provide a "safe harbor" for certain forward-looking
statements.  This report contains forward-looking statements that involve
risks and uncertainties that could cause actual results to differ materially
from those projected in such forward-looking statements.  Statements regarding
the expected commencement dates of mining operations, projected quantities of
future production, capital costs, production rates, costs and expenditures and
other operating and financial data are based on expectations that the Company
believes are reasonable, but it can give no assurance that such expectations
will prove to have been correct.  Factors that could cause actual results to
differ materially include, among others: risks and uncertainties relating to
general domestic and international economic and political conditions, the
cyclical and volatile prices of gold, silver and copper, political and economic
risks associated with foreign operations, unanticipated ground and water
conditions, unanticipated grade and geological problems, metallurgical and
other processing problems, availability of materials and equipment, the delays
in the receipt of or failure to receive necessary governmental permits, changes
in laws or regulations or the interpretation and enforcement thereof, the
occurrence of unusual weather or operating conditions, force majeure events,
lower than expected ore grades, the failure of equipment or processes to
operate in accordance with specifications or expectations, labor relations,
accidents, delays in anticipated start-up dates, environmental risks, the
results of financing efforts and financial market conditions.  These and other
risk factors are discussed in more detail in the Company's Annual Report on
Form 10-K (File No. 1-9666) for the year ended December 31, 1997.  Many of such
factors are beyond the Company's ability to control or predict.  Readers are
cautioned not to put undue reliance on forward-looking statements.  The Company
disclaims any intent or obligations to update these forward-looking statements,
whether as a result of new information, future events or otherwise.


PART II.         OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Crown Jewel

The following legal proceedings relate to the Crown Jewel project in Washington
State in which the Company is earning an interest of up to 54%.  During the
first quarter of 1997, the final Environmental Impact Statement ("EIS") for the
Crown Jewel project was issued.  Certain positive permit decisions and
approvals have been received for the project, but additional state and federal
permit decisions and approvals are pending.  The existing legal proceedings
evidence opposition to the project by certain persons and special interest
groups, including the Okanogan Highlands Alliance ("OHA"), the Washington
Environmental Council ("WEC"), the Center for Environmental Law and Policy
("CELP") and the Confederated Tribes of the Colville Reservation ("CCT").  The
Company expects that additional appeals may be filed and that injunctions will
be sought.  The impact and exact timing of final resolution of the existing
appeals, or any future appeals related to the project, cannot be determined
with any accuracy at this time.





                                       15
<PAGE>   18
OKANOGAN HIGHLANDS ALLIANCE V. WILLIAMS, ET AL., UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON, CIVIL NO. 97-806JE

During the first quarter of 1997, the United States Forest Service ("USFS")
issued a Record of Decision ("ROD") which approved the Crown Jewel project
subject to the requirement that the Company obtain USFS approval of a detailed
Plan of Operations.  The USFS received four administrative appeals to its EIS
and ROD, which were denied in the second quarter of 1997.  On May 29, 1997,
OHA, WEC, the Colville Indian Environmental Protection Alliance and the Kettle
Range Conservation Group instituted the above-referenced action against the
USFS and certain USFS decision makers in United States District Court for the
District of Oregon.  The action appeals the EIS, the ROD and the denial of the
administrative appeals.  The action seeks the following rulings:  1) that the
EIS and ROD are inadequate and violate the National Environmental Policy Act
and the Administrative Procedures Act; 2) that the USFS's decision not to
prepare and issue a supplemental EIS was not in accordance with law; and 3)
that the ROD violates certain specified laws. The action also seeks an award of
fees and costs associated with the litigation and indicates that the plaintiffs
will seek injunctive relief restraining the USFS from approving or authorizing
the Plan of Operations or any other action related to the Crown Jewel project.
The Company has intervened in the action.  On November 5, 1997, CCT moved to
intervene as a matter of right and filed a complaint alleging that the ROD was
issued in violation of certain tribal rights.  On March 19, 1998, the court
ruled in favor of the USFS and the Company by denying the plaintiffs' challenge
to the contents and scope of the administrative record.  On March 27, 1998, the
court granted the CCT's Motion to Intervene.  Briefing of the case has been
completed.

OKANOGAN HIGHLANDS ALLIANCE, ET AL. V. STATE OF WASHINGTON DEPARTMENT OF
ECOLOGY, ET AL., WASHINGTON POLLUTION CONTROL HEARINGS BOARD, (PCHB NOS.
97-182; 97-183; 97-185; AND 97-186)

In November 1997, the Washington Department of Ecology ("WDOE") approved certain
applications for new water rights and certain applications for changes to
existing water rights that are necessary for the Crown Jewel project. Pursuant
to the Company's request, PCHB Nos. 97-182; 97-183; 97-185; and 97-186 were
consolidated for hearing with PCHB No. 97-146.  PCHB Nos. 97-146 and 97-185 were
subsequently dismissed.  At a March 5, 1998 Scheduling Conference, the Board
decided that the water quality issues raised by these pending appeals would not
be heard during the consolidated hearing, but instead would be heard at an
unspecified future date.  The consolidated hearing concluded on May 20, 1998.
Briefing of the portions of the case heard at the consolidated hearing has been
completed.

PCHB No. 97-182.  On December 1, 1997, Roger Lorenz instituted the action
designated PCHB No. 97-182 against WDOE, which action appeals WDOE's approval
of one new water right application and one water right change application.

PCHB No. 97-183.  On December 1, 1997, OHA, WEC and CELP instituted the action
designated PCHB No. 97-183 against WDOE and the Company.  The action challenges
WDOE's water rights decisions, claiming that such decisions violated the State
Water Code, Water Resources Act, Administrative Procedures Act and
Environmental Policy Act.  The action seeks an order reversing WDOE decisions
or, in the alternative, vacating the Reports of Examination and remanding the
applications to WDOE for further study.  The action has been joined by Triple
Creek, a nonprofit corporation.





                                       16
<PAGE>   19
PCHB No. 97-186.  On December 2, 1997, CCT instituted the action designated
PCHB No. 97-186 against the WDOE and the Company.  The action makes the same
challenge and seeks the same relief as PCHB No. 97-183.

OKANOGAN HIGHLANDS ALLIANCE V. STATE OF WASHINGTON DEPARTMENT OF ECOLOGY, ET
AL., WASHINGTON POLLUTION CONTROL HEARINGS BOARD, PCHB NO. 98-019

In January 1998, WDOE approved an air quality permit to construct and operate
the proposed Crown Jewel mine.  On February 3, 1998, OHA instituted the action
designated PCHB No. 98-019 against the WDOE and the Company.  The action
challenges the air quality permit to construct and operate the mine.  On April
27, 1998, OHA voluntarily dismissed this action but reserved its right to
appeal future air permit decisions related to the mine.

CONFEDERATED TRIBES OF THE COLVILLE RESERVATION V. STATE OF WASHINGTON
DEPARTMENT OF ECOLOGY, ET AL., SUPERIOR COURT OF THE STATE OF WASHINGTON FOR
THURSTON COUNTY, CIVIL NO. 97-2-02849-7

In November 1997, the WDOE approved certain applications for new water rights
and certain applications for changes to existing water rights that are
necessary for the Crown Jewel project.  WDOE granted the Company's applications
in part based upon a streamflow mitigation plan.  On December 2, 1997, CCT
instituted the above-referenced action against the WDOE and the Company.  The
action seeks an order holding that WDOE's approval of the streamflow mitigation
plan constituted a rulemaking in violation of the Administrative Procedures Act
and an order that such approval exceeds WDOE's statutory authority, conflicts
with existing law and is irrational.  The action also seeks an order mandating
a rulemaking to develop guidelines and criteria for approving water resource
mitigation measures and an injunction on the approval of water rights
applications until the conclusion of such rulemaking.  Reversal of WDOE's
decisions with respect to the Company's water rights applications is also
sought, along with an injunction precluding the Company from taking action in
reliance on such decisions.  The Plaintiff also seeks costs and attorney fees.

OKANOGAN HIGHLANDS ALLIANCE, ET AL., V. WASHINGTON STATE DEPARTMENT OF ECOLOGY,
ET AL., SUPERIOR COURT OF THE STATE OF WASHINGTON FOR THURSTON COUNTY, CIVIL
NO. 97-2-02831-8

On December 2, 1997, OHA, WEC and CELP instituted the above referenced action
against WDOE and the Company.  The action makes the same challenges and seeks
the same relief as Confederated Tribes of the Colville Reservation v. State of
Washington Department of Ecology, et al., Superior Court of the State of
Washington for Thurston County, Civil No. 97-2-0289-7.

OKANOGAN HIGHLANDS ALLIANCE V. OKANOGAN COUNTY, ET AL., SUPERIOR COURT OF THE
STATE OF WASHINGTON FOR OKANOGAN COUNTY, CIVIL NO. 98-2-00180-3

On May 4, 1998, OHA instituted the above-referenced action against Okanogan
County, the Company and Crown Resources Corporation in the Superior Court of
the State of Washington in and for Okanogan County.  On May 20, 1998, OHA
amended the action by naming the Okanogan County Health District as an
additional respondent.  The action challenges the decision of the Okanogan
County Health District that





                                       17
<PAGE>   20
Solid Waste Permits are not required for the Crown Jewel mine tailings and
waste rock piles.  The action seeks an order declaring that such decision
violated the Washington Solid Waste Management Act and other state and local
laws and regulations and is therefore null and void.  All respondents have
moved to dismiss the action on various procedural and substantive grounds.  A
hearing on the respondents' motions was held on September 14, 1998, and
post-hearing briefing has been completed.

ITEM 6.          EXHIBITS AND REPORTS ON FORM 8-K

                 (a)      Exhibits

                          11   Computations of Earnings (Loss) per Common Share

                          27   Financial Data Schedule

                 (b)      Reports on Form 8-K - none





                                   SIGNATURE

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.


                                          BATTLE MOUNTAIN GOLD COMPANY


Date:  November 16, 1998                  
                                                  /s/ Jeffrey L. Powers
                                          --------------------------------------
                                                      Jeffrey L. Powers
                                              Vice President and Controller






                                       18
<PAGE>   21

                               INDEX TO EXHIBITS


         Exhibit
           No.                  Description
         -------                -----------

            11    Computations of Earnings (Loss) per Common Share

            27    Financial Data Schedule