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

To: Bill Jackson who wrote (870)	3/30/1998 9:06:00 AM
From: mineman	Read Replies (1) \| Respond to of 1706

From figures on www.royal-oak-mines.com/kemiss.html. the operation will generate $7.50/ton smelter value and costs are $6.00/ton, so the mine will generate $27 million profit per year, before taxes and capital investment costs, which will not pay the interest on their accumulated dept. Kemiss is therefore unprofitable at $300/oz gold and $.80/pound copper. Do the dept-holders know this?

To: Bill Jackson who wrote (870)	3/30/1998 1:01:00 PM
From: mineman	Read Replies (2) \| Respond to of 1706

Royal Oak have made it appear to the public that Northgate is prepared to assist them, so that Peggy Witte will have some levergage when talking with the debt holders on Tuesday, the 31st. I will repeat my figures. Please correct any errors: At .018 oz/t gold, and .22% Cu, at todays metal prices, net smelter value = $7.50/ton. Costs according to Royal Oak= $6.00/ton (before taxes and capital payback). So profit at 50,000 tons/day = $75,000/day = $27 million/year (before taxes and capital payback). As the payback of interest and principle will be over $30 million/year, Kemess will lose at least $3 million/year at $300/oz gold and $.80/pound copper. If gold rises to $350/oz the equation would change. But for now....