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Gold/Mining/Energy : Royal Oak-RYO

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To: reg who wrote (1580)	12/25/1998 7:08:00 PM
From: Michael Bidder	Read Replies (1) of 1706

News artical: Thu 24 Dec 98 In the News The Globe and Mail reports in its Thursday, Dec. 24, 1998 edition that Royal Oak Mines will halt interest and principal repayments on its outstanding loans, blaming "historically low" gold and copper prices for its problems. The Globe's Allan Robinson writes that the decision to defer the payments until Feb. 15 caused Standard & Poor's to lower its rating on Royal Oak and place it on a credit watch. Royal Oak has been trying to refinance for the past two months after borrowing heavily and at a high cost to complete construction of its $480-million Kemess gold and copper mine in British Columbia. The mine began operations in May and reached commercial production in September, but mining analysts stress that the profit margins are thin on what is a low-grade ore body. S&P lowered its corporate credit rating to double-C from triple-C and its subordinated debt rating on the company to single-C from double-C. Canaccord Capital maintains a sell recommendation and says if the miner is unsuccessful in refinancing it will likely seek bankruptcy protection. (c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com Michael Bidder.

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