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: roger fontaine who wrote (1642)	3/15/1999 12:47:00 AM
From: Eashoa' M'sheekha	Respond to of 1706

I FEEL VERY SAD FOR ALL THOSE MINERS.

To: roger fontaine who wrote (1642)	3/15/1999 2:16:00 AM
From: Michael M. Cubrilo	Respond to of 1706

How many Michaels on this thread? Anyway, I had always hoped that RYO would recover... I made money on RYO twice in the past, during better times. However, the latest Post article made me sick. During a time when hundreds of workers may lose their jobs, their homes, etc... Royal Oak Executives are using loaned money to pay life insurance premiums! What a display of poor leadership qualities... if the story is true, they should be ashamed to show their faces in public. $600,000 for six people... just the premiums? What kind of policy is that!!! With those kind of spending habits, no wonder RYO is in the mess it is in. Sad tale. Mike

To: roger fontaine who wrote (1642)	3/16/1999 8:09:00 PM
From: roger fontaine	Respond to of 1706

Tuesday, March 16, 1999 PAUL WALDIE The Globe and Mail Toronto -- An Ontario judge has given insolvent Royal Oak Mines Inc. five more days of court protection from creditors owed a total of $600-million. In a decision released yesterday, Mr. Justice James Farley of the Ontario Court's General Division also said he expects to decide by Friday whether Royal Oak should receive more emergency funding. Kirkland, Wash.-based Royal Oak filed for court protection on Feb. 15 and has been surviving on an $8.4-million loan from its biggest creditor, Trilon Financial Corp. Royal Oak has three gold mines in Canada and about 1,000 employees. Toronto-based Trilon cut off the loan last week after Royal Oak made three unauthorized payments totalling $1.2-million, including nearly $600,000 for premiums on a life insurance policy for six executives. Royal Oak's court-appointed monitor, PriceWaterhouseCoopers Inc., said the payments were made without the required approval from Trilon or the monitor. Royal Oak has had the payments reversed. In his ruling, Judge Farley criticized the company for making the payments. "It is puzzling and troublesome why Royal Oak made the three improper payments," he wrote. "In response to my inquiry as to why these payments were in fact made, I was only advised that Royal Oak had made a very serious mistake. I trust that Royal Oak will reflect upon that very carefully as it impacts upon its future as a corporation," he added. On Friday, Patricia Jackson, a lawyer representing Royal Oak, told a court hearing that the payments were made because of a misunderstanding as to what the company could do. "There's no question it ought not to have happened," she said. But yesterday, Royal Oak said it did nothing wrong. "Actions taken by the company in making the [payments] were in accordance with the budget previously submitted to Trilon and the monitor and were not the result of any wrongdoing," the company said in a press release. "Problems with the timing of these payments arose only because the company has not received the full amount of the advance." Only $4-million has been advanced under the loan, but Royal Oak has spent $8.9-million. The company said it needs at least another $12-million to keep operating for another month. It wants court protection to extend at least until then. Trilon, which is owed $186-million, has said it will provide more financing but it wants any further loan to rank ahead of all other creditors. Another major creditor, Bank of Nova Scotia, opposes any further financing, arguing that the company is unlikely to produce a workable restructuring plan. The bank, owed $7.3-million, wants the company to consider filing for receivership. Judge Farley said he will rule on the issue of further financing after the monitor completes an analysis of Royal Oak's spending plans for the next month. That review is expected to be finished today. The judge also said the monitor must have added powers to review Royal Oak's spending "to ensure that Royal Oak does not get off the tracks as it did concerning the three unauthorized payments." Judge Farley said other creditors should also consider providing financing. And, he questioned why Royal Oak filed for court protection in the first place, given that the company appeared to be in serious financial trouble for some time. "It is unclear what truly precipitated the Feb. 15 application. Applicants should not rely on indulgences being automatically given when the applicant has in effect placed a gun to its own head and threatened to pull the trigger." The company's fate is being decided in an Ontario court because its shares trade on the Toronto Stock Exchange. A hearing on a further extension of creditor protection begins Thursday.

To: roger fontaine who wrote (1642)	3/16/1999 8:16:00 PM
From: roger fontaine	Read Replies (2) \| Respond to of 1706

Trilon turns Royal Oak's tap back on By KEITH DAMSELL The Financial Post Trilon Financial Corp. will inject more survival money into insolvent Royal Oak Mines Ltd. following an Ontario Court ruling yesterday. "We've agreed to turn the tap back on," said George Myhal, Trilon president and chief executive. Pending further court approval, Trilon, the gold company's largest creditor, will advance up to $34.7 million while the company restructures operations, Mr. Myhal said. Royal Oak, Trilon, and additional creditors will be back in court Thursday to debate further financing and the company's plea for additional time to prepare a restructuring plan. The future of Royal Oak was thrown into doubt last week following Trilon's decision to halt financing following news Royal had made $1.2 million in unauthorized payments, including insurance premiums for executives and leasing fees to Trilon. The controversial payments were later cancelled. Cost overruns at Royal Oak's Kemess South mining project in British Columbia and the slumping price of gold forced the Washington state company to file for protection from its creditors last month. The troubled company has about $600 million in liabilities, including a $185.5 million debt to Toronto-based Trilon. Trilon agreed to provide survival funds on the condition its loan be placed above all other creditors for repayment. Several creditors objected to the terms of the deal, including lien holders on the Kemess property and Bank of Nova Scotia. In a 15-page ruling released yesterday, Ontario Chief Justice James Farley confirmed the first $8.4-million tranche of Trilon's financing will receive top priority, but will not supercede the rights of original lien holders. But Royal Oak did not escape unscathed. Justice Farley was critical of the company's decision to turn to the courts for protection at the eleventh hour. "Applicants should not rely on indulgences being automatically given when the applicant has in effect placed a gun to its own head and threatened to pull the trigger," the judge noted. In addition, Justice Farley found management's decision to make the unauthorized payments from its survival funds a "puzzling and troublesome" act that "could have very serious negative consequences."