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Gold/Mining/Energy : Royal Oak-RYO -- Ignore unavailable to you. Want to Upgrade?

To: JERRY GACH who wrote (519)	12/4/1997 10:18:00 PM
From: roger fontaine	Read Replies (2) \| Respond to of 1706

Jerry and all: After reading the article in the globe and mail on RYO no wonder heavy selling is going on.They state that RYO is running low on cash and needs to raise a small fortune $13,000,000 to meet a junk bond payment in Feb. and to complete Kemess 2 months later.Graham Eacott admits things are pretty tight.One analyst claims Kemess will make or break RYO.They state that for every .10 increase in copper the production price of gold is reduced by$27.00.Unfortunately the reverse is also true.The Kemess project is costing RYO just under 1 million per day.They are having problems getting a loan from a bank because a lot of banks are having problems with gold companies.Ryo is planning to raise 40 million through the private placement of a new series of junk bonds..RYO is having some problems here but are nonetheless optimistic that the new junk bond issue will be completed soon.Eacott claims that there are people on the site now doing due diligence now.No analyst has a buy recommendation on RYO shares,in spite of their low price and the author of this article says only the very bravest investor would load up as long as the financing effort is unresolved.He also states that short sellers are gambling that Ms. Witte will be unable to raise additional financing,putting the Feb. junk bond payment in jeopardy.The author also claims that Ms. Witte is a tough negotiator and probably has other options.He says he can't see the BC government letting it go into limbo after sinking so much money into the Kemess project already.To protect jobs, the government has just come to the rescue of Skeena Cellulose,a pulp and paper company.Another option is to bring in a joint venture partner.This last option I am not happy with ,for sure they will take advantage of RYO's desperate need for money.Much of the above is in my own words and I would advise everyone to read the article.Thanks G.W. for pointing out this article,very informative.