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

To: scott who wrote (990)	5/22/1998 6:00:00 PM
From: Al Cern	Respond to of 1706

scott, I agree with what you have said, but I still dont understand why the subs went for the deal. I can't see that block of shares being worth much, and I see much more risk in their capital, now. Were they that compromised already, that anything was better than bankruptcy? Sincerely, Al Cern

To: scott who wrote (990)	5/23/1998 12:32:00 AM
From: JCgold3	Read Replies (1) \| Respond to of 1706

scott, I'm not an RYO evangelist but am long as a speculative investment. I was quite heavily invested in RYO at one time but sold a large portion of my shares based on the high risk that this company has become. If some of the numbers that RYO has published re: mining cost per ounce of gold at Kemess, and we get a spike in the price of gold, RYO could provide a good ROI in the short term based on the heavy short position in this stock. The dilution of the shares is a big negative and the rumors of environmental problems at Kemess are a major negative. I know that there was an interest payment that was coming due on the $44 million that was borrowed in December/January, however that will be paid off in full with the $120 million that they can start drawing upon at the end of May. I don't know what the detailed repayment schedule is for the new financing but would be interested in any info you might have. Incidentally, the average daily volume for RYO has been 410,000 shares on the AMEX over the last 30 days. Make no mistake, I know how risky RYO is and would not be surprised by an RYO bankruptcy especially if the BC government decides to go after them for environmental problems at Kemess. The risk is extremely high however Trilon is giving them the $120 million, the geologists reports have been verified by numerous 3rd parties, the unsecured bondholders gave their permission for the new financing and accepted stock as partial repayment for this magnanimous gesture, contractors continued work without being paid for many months, and management has not sold their remaining shares which is still a significant number. A lot of this doesn't add up and for me , the risk/reward ratio is worth some speculative capital.