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

To: roger fontaine who wrote (668)	2/2/1998 5:13:00 PM
From: Thomas P. Talbot	Respond to of 1706

The copper is a credit and the cost is an accounting allocation. Without the copper the costs would be pretty much the same, thus the copper is just revenue which offsets otherwise sunk costs.

To: roger fontaine who wrote (668)	2/3/1998 12:45:00 AM
From: roger fontaine	Read Replies (1) \| Respond to of 1706

The Financial Post Margaret (Peggy) Witte has proven the exception to a rule that women don't make it big in the tough mining game. For several years now, the chief executive of Kirkland, Wash.-based Royal Oak Mines Inc. has been almost a household name in the North American gold business. Only Viola MacMillan, who served a jail term for stock manipulation in the 1960s' Windfall Oils and Mines scandal, has made a comparable impact. A 44-year-old former metallurgical engineer, Witte has gained a reputation for acquiring high-cost mines at bargain prices and trying to turn them around. A tough negotiator, Witte won national attention for standing firm in a bitter labor dispute that led to a fatal explosion at Royal Oak's Giant gold mine in Yellowknife in September 1992. Nine miners were killed by the blast set by a striking miner. "This is survival," Witte said at the time, defending her immovable bargaining stance. "I'm not in business to be screwed over." Two years later, Royal Oak launched what was then regarded as an audacious $2-billion bid for a company four times its size, Toronto gold mining giant Lac Minerals Ltd. Her bid lost when Lac shareholders opted for an offer worth $2.2 billion from Barrick Gold Corp. But Witte was named the top newsmaker of 1994 by The Financial Post as well as Chatelaine's woman of the year. Some argued that Witte wouldn't have garnered one-tenth of the attention had she been a man. With gold prices at 18-year lows, Royal Oak has been struggling, shutting down mines in Newfoundland and the Northwest Territories. "The gold price certainly hasn't done her any favors,'' says Tony Sutton-Pratt, analyst at HSPC James Capel Canada Inc. in Toronto. Having recently secured US$44 million in new debt financing, Royal Oak's immediate future appears to ride on its $430-million Kemess gold-copper mine in British Columbia. Scheduled for startup in April, Kemess is an extremely low-grade mine. But over the project's 16-year life span, the mine is slated to produce an average of 250,000 ounces of gold for a cost of US$79 an ounce. Given that gold has traded recently at just under US$300 an ounce in New York, the mine should be profitable. Revenue from copper output will be credited against the cost of mining gold. "We are all waiting to see if the mine will work as well as Witte said it would,'' says Sutton-Pratt. But Dorothy Atkinson, an analyst with Whalen Beliveau & Assoc. in Vancouver is reluctant to bet against such a tough operator. "What she really needs," says Atkinson, "is for metal prices to turn around.''