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Gold/Mining/Energy : Royal Oak-RYO

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To: Mike G who wrote (997)	6/2/1998 9:49:00 AM
From: scott	Read Replies (1) of 1706

sorry mike, but u should do a little more research before u make such strong comments. i will enlighten u as best i can: 1. they have 295 mm us in debt (427.75 mm CAD) 2. they have negative working capital of 104 mm cad (tends to add up when u dont pay the mine developers and contractors) 3. bond holders just received 10mm shares so the amount of shares is now 150mm 4. the rest of their mines have cash costs that make it uneconomical to mine at gold prices less than $350 5. the fact that they have spent 470mm does not mean that it is worth 470 mm. my analysis would put the mine at $300 mm i am not trying to be a prick but lets not gloss over the facts. but lets use your value for ryo's asset value to be 470. asset value 470 less: debt 427 working capital deficit 104 net value attributable to equity (61) bonds realize this as they are trading in the low 80's even after getting their 10% equity stake. and yes there will probably be a transfer of assets-but through a court proceeding. please do your homework in the future scott

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