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

To: JCgold3 who wrote (708)	3/15/1998 12:14:00 AM
From: Michael Bidder	Read Replies (1) \| Respond to of 1706

Food for thought. I stole this post from the Yahoo RYO chat (link at bottom). Seelark raises some interesting thoughts: <<I wonder: 1. How RYO cannot be in default of covenants of its Sr. Notes, considering its present financial situation. 2. Why RYO expects to find a merger or partnership candidate when it has tried for months without success, according to the street, to find such a merger or partnership candidate - and how can it obtain the consent of existing note holders to obtain additional debt even if such additional financing were available - any why BC would take on the financial and political risk of financing the project when the project can be completed by the debt-holders, even if RYO is liquidated. 3. Why are companies failing to merge or JV with RYO on the Keness project if it offers such good economics as professed by RYO. 4. How is it possible that RYO not anticipate the substantial capital cost over-run at the time recently when it took on additional debt to "finish the project and provide funds for "start up" unless RYO has not been forthright with the bond holders and its shareholders or is not guilty of gross mismanagment. 5. Why Peggy keeps insisting that the stock is undervalued (from the time it was over $4/share), yet RYO cannot obtain additional equity funding even at this level as evidenced by the failure to obtain equity financing with Toronto-based First Marathon Securities Ltd. And if the stock is undervalued, why do most of the Canadian analysts continue to pan the stock and major institutions reportedly are heavily shorting the stock. 6. Why RYO has still not reported its financials. 7. Why G. Eacott is not more positive on the viability of the company, if the liklihood of additional funding is promising. 8. Why does RYO expect to receive instant cash flow when the mine is completed, if indeed it is completed, when it usually takes months to iron out the bugs associated with "start up" before steady state is achieved - even assuming the mine will produce as contemplated. 7. Why are so many posters visiting here and panning RYO, even though they admitting do not own the stock. BUT MOST OF ALL, I wonder why RYO is not making new lows with the large volume being traded, notwithstanding the above.>> messages.yahoo.com@m2.yahoo.com

To: JCgold3 who wrote (708)	3/15/1998 8:56:00 AM
From: Bill Jackson	Read Replies (1) \| Respond to of 1706

JCgold3, The present price drop is a risk and fear assessment by the market. RYO is obviously worth more than $2.25, but the current climate makes them a deal. However they have defenses in place against a hostile takeover.I am not privy to the details of the bondholders agreement and so I do not know of any drop dead date. The fund raiser that failed in Toronto last week or so is not the only arrow in her quiver. Since time is of the essence I speculate they will find a bridge fund source soon(this week?). Desperate borrowers with the main assets pledged to the bondholders are a higher risk. Instead of a high rate loan they might get a loan with warrants/options? where the lender takes risk and RYO gives them the chance to buy future shares at todays prices, and the lender takes that risk as his spec profit and gives the loan at a good rate. Since we are looking at a small amount that dilution will be minimal. Forward sale of gold is doable right now but risks locking in the current low price in a rebound situation, and thus must be avoided. The BC government also wants this to proceed. The timetable for any foreclosure by bondholders? I suspect they will wait this out, however the lien they have will deter unfriendly takeovers, as they will have the ability to detach the Kemiss assets and take them elsewhere unless paid right away, so any takeover will be well negotiated, and if rumor is correct there are some talks as we speak. If you are going to go broke, better to end up as an autonomous division within a greater organisation, than fully chewed up and swallowed. With negotiation the poison pill can be set aside for the proper deal that is best for all RYO SH. Another possibility is persons courting the bondholders, asking them to please foreclose on Kemiss and sell it to us and we will pay you mucho moola, and so they might act like a mousetrap on the default day. I suspect there will be a default date and a final remedy time to rectify the default. IE you are in default and have X days to pay??, as there are usually clauses like that in contracts like this??, in this one?? Bill