KIRKLAND, WASHINGTON--(BUSINESS WIRE)--Nov. 14, 1997-- Royal Oak Mines Inc.
(TSE:RYO. - news; AMEX:RYO - news) Royal Oak Mines Inc. (TSE and AMEX: RYO - news
news) announced today that it is taking the necessary steps to ensure that its current mines operate
profitably in the current weak gold price environment. Royal Oak is taking these steps to ensure
there is sufficient cash available to complete the construction of its low cash cost Kemess mine. The
Company has reviewed the viability of its Timmins and Giant mining operations and plans to mine
only those areas that are economic at a gold price below US$300 per ounce. Furthermore, as part
of its cost-cutting measures, the Company plans to reduce employment levels company-wide in
order to further decrease expenses and cash requirements. In the third quarter, Royal Oak
permanently closed its Hope Brook and Colomac mines for economic reasons. The Company has
no plans at present to close its gold mining operations at Timmins, Ontario and at Yellowknife in the
Northwest Territories.
Construction of the Kemess gold-copper mine, mill and associated infrastructure facilities is
approximately 70 percent complete. Approximately C$410 million of the capital cost of C$430
million has been committed to purchase orders for equipment and construction contracts. The
Company has already received C$110 million from the government of British Columbia, which is
current in its payments. A further C$20 million is due on November 17.
Average annual production at Kemess over the 16-year mine life is forecast at approximately
250,000 ounces of gold at an estimated cash cost in current dollars of US$79 per ounce after
copper credits at US$1.00 per pound.
Royal Oak's budgeted gold production and estimated cash costs on a company-wide basis for the
next three years are:
1997 340,000 ounces at US$332 per ounce
1998 340,000 ounces at US$200 per ounce
1999 480,000 ounces at US$174 per ounce. |
