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

To: Michael Bidder who wrote (1090)	7/22/1998 7:07:00 PM
From: Elizabeth Andrews	Read Replies (2) \| Respond to of 1706

The facts are that at current prices the combined cash flow of the mines of RYO can support the debt. You are overestimating the role of the BC govt I think and underestimating how poor the management of this company is. I talked to an analyst who knows the history of this deal (Kemess et al) and he says that the govt involvement is not the problem. Accordinging to him it is the fact that RYO has no management below Peggy and that her decision making ability is suspect and getting worse. Kemess is over budget by at least $70 million because of a long list of errors and bad calls. The other exploits (read investments) are also almost worth zero and they cost something like $60 million. The analyst said that the smelter contract is also a problem. If you look at the litigation that the company is involved in that has to tell you that the top management is very capricious and the interests of the shareholders may not be in the forefront. I'm thinking that the US$ will weaken in the fall and the price of gold may rebound a bit which could add some months to RYO's life but without restructuring the debt it's only months we are talking about. Waiting for the next quarterly.