This tread might, just might wake up soon!
Saturday, September 04, 1999
Miramar unmasked as buyer of Giant mine
Union worried about jobs
Keith Damsell
Financial Post
Miramar Mining Corp. is the mystery buyer of Royal Oak Mines Inc.'s Giant mine and wants the receiver of the insolvent gold company to fire Giant's workforce before it assumes control, union sources said yesterday.
"Essentially, they're trying to screw the workers," said Marc Danis, president of Canadian Autoworkers Local 2304 in Yellowknife. "They want to terminate all the staff and avoid any kind of successorship issues."
According to Mr. Danis, Miramar is finalizing an agreement to buy the Giant mine that will leave the North Vancouver company without any commitment to honouring the existing labour contract or assuming any environmental liabilities for the cleanup of the mine site. The mine employs about 300, including a unionized workforce of 200. The union learned of the details from a "very reliable source" close to the auction of Royal Oak's assets, Mr. Danis said.
"I'm not going to confirm anything," said Brian Labadie, Miramar's senior vice-president of operations. "We've had dialogue with the receiver and with various levels of government but we have no deal. Any comment on my part is premature."
In its Aug. 26 second-quarter earnings report, Miramar said its "search for strategic acquisitions has zeroed in on three low-cost producing targets." As of June 30, the company had $63.8-million in working capital to finance acquisitions.
An experienced northern miner, Miramar owns the Con mine and mill, a gold property about 10 kilometres from the Giant mine. Analysts believe the two mines could consolidate operations and trim production costs.
PricewaterhouseCoopers Inc., the court-appointed receiver of Royal Oak, will provide union officials with an update on the Giant auction on Tuesday. A receiver's report on the future of the 51-year-old mine will be released later the same day.
In its Aug. 25 report to Ontario's Superior Court, the receiver said it had found an unidentified buyer and hoped to conclude a deal within the next three weeks.
Giant's eventual owner will have to reach an agreement with federal and Yukon officials concerning the estimated $250-million reclamation of the site. Since 1951, arsenic trioxide has been pumped underground into mined-out chambers. The Department of Indian Affairs and Northern Development will waive environmental liabilities if the new owner agrees to take on future operating risks and a profit-sharing plan that will help pay for the cleanup.
"We've exchanged papers back and forth" with the successful bidder, said Hiram Beaubier, department spokesman. "But we're far from any kind of deal or outline of what we're going to be doing at this point."
With $600-million in liabilities, Royal Oak and its three Canadian mining operations were placed in receivership in April.
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