Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Joe King who wrote (760)	3/18/1998 5:41:00 PM
From: roger fontaine	Respond to of 1706

Royal Oak Mines Inc. (TSE and AMEX: RYO) in an open conference call held earlier today, disclosed further information about the current short-term liquidity problems it is facing. To review this call, the phone-in number is 416-626-4100 (using reservation No. 838227). The number can be accessed until midnight Friday, March 20, 1998. In summary, the Company disclosed that its current cash position is approximately C$2.5 million and the Company has additional sources of cash totaling approximately C$20 million which will be flowing into the company over the next 2-1/2 months. The Company's current overdue payables are approximately C$27-$29 million with the largest percentage of these payables being for construction on the Kemess project. The Company has spent to date approximately C$435 million on the project and paid out approximately $395 - $400 million of cash towards construction. The total capital cost of the project is estimated at C$470 million. The Company is in the process of raising funds to ease the short-term liquidity problem. It is the Company's goal not just to provide a Band-Aid approach until start up of Kemess, but to raise sufficient monies (approximately US$50 - $60 million) to provide for the start-up of Kemess, additional working capital and meet all interest payments on its debt throughout 1998. The project is expected to cash flow positive by the third quarter of 1998. Provided the liquidity problems are solved in the next two to three weeks, the Company is anticipating that the Kemess Mine will be fully operational by the third to fourth week of May with Line A in the mill starting up in the last week of April, and Line B starting up later in May. With respect to further clarification of our news release dated March 17th, the Company is in technical default under covenants of the Senior Secured Debentures. All interest payments on the Senior and Subordinated Notes are up to date. No demand notice has been provided by the Senior Secured Noteholders and consequently the 20-day cure period has not started. None of our existing creditors are taking action against the Company and the Company does not have any plans to file for any type of bankruptcy proceedings. The Company is currently working with its financial advisors evaluating a number of alternative sources of liquidity. These sources of liquidity include the sale of non-core assets, additional senior or subordinated borrowings, and/or issuance of equity or preferred shares. The Company expects these issues to be resolved in the next two to three weeks.