-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RrscIi2x+gAAoNigemcqcRUxCwR0qSWxvFN/5L0Q/a/2GRQ/fyUCaXywl5+Pab7w bxuDMysKM/3C5pTFhnUd4w== 0000041304-97-000003.txt : 19970222 0000041304-97-000003.hdr.sgml : 19970222 ACCESSION NUMBER: 0000041304-97-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970210 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970214 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROYAL OAK MINES INC CENTRAL INDEX KEY: 0000041304 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04350 FILM NUMBER: 97532292 BUSINESS ADDRESS: STREET 1: 5501 LAKEVIEW DR CITY: KIRKLAND STATE: WA ZIP: 98033 BUSINESS PHONE: 6046828320 MAIL ADDRESS: STREET 1: 5501 LAKEVIEW DR CITY: KIRKLAND STATE: WA ZIP: 98033 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 February 13, 1997 ROYAL OAK MINES INC. (Exact name of registrant as specified in its charter) Commission File Number 1-4350 ONTARIO, CANADA 98-0160821 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) c/o Royal Oak Mines (USA) Inc. 5501 Lakeview Drive Kirkland, Washington U.S.A. 98033 (Address of principal executive offices) (Postal/Zip Code) (206) 822-8992 Registrant's telephone number, including area code Item 5. Other Events On February 10, 1997, the Registrant issued the press release set forth as Exhibit 99.1 hereto, which press release is hereby incorporated herein by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits 99.1 Royal Oak Mines Inc. press release, dated February 10, 1997. SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROYAL OAK MINES INC. Date: February 13, 1997 By: /s/ James H. Wood James H. Wood Chief Financial Officer EX-99 2 Exhibit 99.1 Royal Oak Mines Inc. press release, dated February 10, 1997. [Royal Oak Mines Inc. Press Release Letterhead] FOR IMMEDIATE RELEASE FROM KIRKLAND February 10, 1997 Royal Oak Announces 1996 Results of Operations Royal Oak Mines Inc. (TSE and AMEX: RYO) announced today the unaudited operating results for the fourth quarter and year ended December 31, 1996. All figures are in thousands of Canadian dollars unless otherwise stated. Three Months Year ended December 31 ended December 31 1996 1995 1996 1995 (audited) Gold Production (ounces) 105,548 94,786 389,203 371,151 Revenue $71,999 $55,214 $255,168 $208,311 Operating Income (Loss) 7,725 (879) 29,204 4,743 Net Income (Loss) (21,306) 3,691 (5,985) 23,169 Net Income (Loss) Per Share (C$) (0.15) 0.03 (0.04) 0.20 Net Cash Flow from Operations 14,605 12,011 57,449 31,760 Net Cash Flow Per Share from Operations (C$) 0.11 0.10 0.42 0.27 Weighted Average Common Shares Outstanding 136,758,106 117,900,306 Year-end Common Shares Outstanding 138,845,263 119,118,714 Cash Cost of Production (US$/ounce) $357 $364 $343 $358 Average Spot Gold Price (US$/ounce) 376 385 388 384 Average Realized Gold Price (US$/ounce) 505 430 481 409
In 1996, gold production was 389,203 ounces, an increase of 5% from the 371,151 ounces produced in 1995. In the fourth quarter of 1996, gold production was 105,548 ounces compared to 94,786 ounces in the same period a year earlier. Revenue of $255.2 million in 1996 included hedging gains of $51.3 million and was 22% higher than revenue of $208.3 million in 1995. As a result of the hedging gains, the realized gold price was US$481 per ounce of gold compared to US$409 per ounce in 1995. Operating income in 1996 was $29.2 million compared to $4.7 million in 1995. The increase was due to the higher revenue in 1996 which was partly offset by higher depreciation charges and exploration costs. A net loss of $6.0 million ($0.04 per share) was incurred in 1996 compared to net income of $23.2 million ($0.20 per share) in 1995. The loss in 1996 reflects a fourth quarter provision totalling $37.6 million for the revaluation of the carrying values of the Hope Brook and Colomac assets, and for the provision for reclamation costs at Hope Brook. In 1996, cash costs were reduced to US$343 per ounce of gold from US$358 per ounce in the previous year, the result of the implementation of a number of cost control measures as well as the benefits of processing higher grade ore from the Nighthawk Mine at the Pamour mill in Timmins. Production and cash cost estimates for 1997 As announced last November, Royal Oak plans to close its Hope Brook Mine in Newfoundland in September, 1997 when it is estimated that economic ore reserves will be depleted. As a result, gold production in 1997 is forecast to decline to 375,000 ounces at an estimated cash cost of US$325 per ounce. As part of the Company's successful gold hedging program, approximately 310,000 ounces of gold production for 1997 have been sold forward at US$395 per ounce. This gives the Company significant price protection in the current weak gold market where the US$340 per ounce level is being tested. Ore reserves increased in 1996 Mineable ore reserves were increased from 9.263 million ounces of gold at December 31, 1995 to 9.875 million ounces at year-end 1996, an increase of 612,000 ounces of gold. At the Timmins operations in Ontario, mineable ore reserves increased by 1,020,000 ounces of gold, most of which was at the open pit where a highly successful drilling program enabled the Pamour expansion project to be significantly increased in scale and scope. In 1996, mineralized material was increased by 1.081 million ounces of gold, or 17%, from 6.303 million ounces to 7.384 million ounces at year-end. Most of this increase was attributable to the successful drilling programs at the Timmins and Matachewan properties at the Ontario Division. Total resources in 1996 increased by 11%, or 1.693 million ounces of gold, to 17.259 million ounces from 15.566 million ounces at the end of 1995. Significant progress made on principal development projects During 1996, significant progress was made on the Company's principal development projects. At the large Kemess gold-copper project in British Columbia construction started in July of last year. The concrete has been poured in the mill building and steel erection will commence shortly. The airstrip and the 450-person camp have been completed. Production is scheduled to commence in the second quarter of 1998. Annual life-of-mine production is forecast at 250,000 ounces of gold at an estimated cash cost of US$189 per ounce, and 60 million pounds of copper at US$0.48 per pound. Mine life in excess of 16 years is expected based on current ore reserves. At the Matachewan project in Ontario, permitting is proceeding satisfactorily. Mine planning and detailed design of the processing plant, infrastructure and tailings facility are underway. The #3 shaft is being dewatered and the hoist and headframe have been commissioned. Installation of the powerline, and the pipeline to the Montreal River, has been completed. Following the closure of the Hope Brook Mine in September of this year, items of mill and mine equipment are scheduled to be shipped to Matachewan in the spring of 1998 when construction will commence. Pre-stripping of the open pit will also start at this time. Underground production and milling are planned to commence in the fourth quarter of 1998. Average annual production over the 10-year mine life is expected to be 100,000 ounces of gold per year at an estimated cash cost of US$225 per ounce. On the Pamour expansion at Timmins, Ontario, detailed engineering and design of the "Superpit" and the 15,000 tpd mill are underway. Considerable progress has been made on environmental baseline studies and a project prospectus is being prepared. The new plant is expected to be in production in the fourth quarter of 1999. The Timmins operations are expected to be in operation for over 20 years at an annual production rate of approximately 240,000 ounces of gold per year at an estimated cash cost of US$225 per ounce when full capacity is reached. Outlook Commenting on the long-term outlook for Royal Oak, the Company's President and Chief Executive Officer, Margaret Witte, said, "We are very pleased with the progress being made on our principal development projects at Kemess and Matachewan, and on the expansion of the Timmins operations. Construction on these projects is on track and we expect to be producing approximately one million ounces of gold annually by the year 2000 at an estimated cash cost of US$215 per ounce". "In the near-term, we have sold forward substantially all of our 1997 gold production at US$395 per ounce which gives us significant price protection in the present weak gold market". "We recognize that 1996 was a challenging year for the Company and appreciate the support of our employees and shareholders throughout the year." Conference Call Royal Oak's management will be holding an open conference call at 2:00 p.m. Toronto time (11:00 a.m. Pacific time) on Monday, February 10, 1997 to review operating results for 1996 and to discuss the outlook for 1997 and beyond. Mining analysts, investors and the media are invited to phone (416) 620-4001 approximately 5 to 10 minutes beforehand. A replay of the conference call can be accessed by dialling (416) 626-4119 until midnight Thursday, February 13, 1997. For further information, contact: or in Europe contact: Mr. J. Graham Eacott Mr. David Williamson Vice President, Investor Relations David Williamson Associates Royal Oak Mines International Investor Relations 5501 Lakeview Drive 78 Old Broad Street, 3rd Floor Kirkland, WA 98033 London, England EC2M 1QP Telephone: (206) 822-8992 Telephone: 011-44-171-628-3989 Facsimile: (206) 822-3552 Facsimile: 011-44-171-920-0563 ROYAL OAK MINES INC. Consolidated Balance Sheets (unaudited - Cdn$ 000's) December 31 December 31 1996 1995 ======== =========== ASSETS Current Assets Cash and cash equivalents $197,766 $139,410 Marketable securities 28,259 2,971 Receivables 17,492 7,138 Inventories 61,844 46,136 Prepaid expenses 7,729 5,620 -------- -------- Total Current Assets 313,090 201,275 Property, Plant and Equipment, net 482,733 191,381 Long-Term Investments 16,586 36,307 Deferred Charges and Other Assets 9,221 -- -------- -------- TOTAL ASSETS $821,630 $428,963 ======== ======== LIABILITIES Current Liabilities Accounts payable and accrued liabilities $ 61,579 $37,911 Current portion of deferred revenue 10,994 4,523 ------- ------- Total Current Liabilities 72,573 42,434 Deferred Revenue and Other Liabilities 52,827 40,800 Deferred Income Taxes 5,064 5,064 Senior Subordinated Notes 239,680 -- Minority Interest in Subsidiary Companies 120 170 -------- -------- TOTAL LIABILITIES 370,264 88,468 -------- -------- SHAREHOLDERS' EQUITY Capital Stock Common stock Authorized - unlimited Outstanding - 138,845,263 (Dec. 31, 1995 - 119,118,714) 378,813 261,957 Retained Earnings 72,553 78,538 -------- -------- TOTAL SHAREHOLDERS' EQUITY 451,366 340,495 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $821,630 $428,963 ======== ======== Certain 1995 items have been reclassified to conform with the 1996 presentation.
ROYAL OAK MINES INC. Consolidated Statements of Income (unaudited - Cdn$ 000's except per share amounts) Three months ended Twelve months ended December 31 December 31 ------------------ ------------------- 1996 1995 1996 1995 ======== ======== ========= ======== REVENUE $ 71,999 $ 55,214 $ 255,168 $208,311 -------- -------- --------- -------- EXPENSES Operating 50,943 46,914 181,869 182,214 Royalties and marketing 689 817 2,904 2,535 Administrative and corporate 1,979 1,504 9,339 8,549 Depreciation and amortization 6,499 4,001 24,900 13,645 Reclamation 2,111 930 2,663 1,250 Exploration and other 909 128 4,742 619 Provision for (Recovery of) loss on foreign currency contracts 1,144 1,799 (453) (5,244) -------- -------- --------- -------- Total operating expenses 64,274 56,093 225,964 203,568 -------- -------- --------- -------- OPERATING INCOME (LOSS) 7,725 (879) 29,204 4,743 OTHER INCOME (EXPENSE) Interest and other income, net 3,007 5,457 8,556 20,902 Long-term debt interest (6,499) -- (10,089) -- Long-term debt interest capitalized 3,436 -- 5,362 -- Closure costs and write-down of mineral resource properties (37,633) (891) (37,633) (891) -------- -------- --------- -------- INCOME (LOSS) BEFORE UNDERNOTED (29,964) 3,687 (4,600) 24,754 Income and mining taxes - current 184 (294) (900) (1,542) Income and mining taxes - deferred 8,820 -- -- -- Minority interest 14 500 50 594 Equity in income (loss) of associated companies (360) (202) (535) (637) -------- -------- --------- -------- NET INCOME (LOSS) (21,306) 3,691 (5,985) 23,169 RETAINED EARNINGS - BEGINNING OF PERIOD 93,859 74,847 78,538 55,369 -------- -------- --------- -------- RETAINED EARNINGS - END OF PERIOD $ 72,553 $ 78,538 $ 72,553 $ 78,538 ======== ======== ========= ======== EARNINGS (LOSS) PER SHARE $(0.15) $0.03 $(0.04) $0.20 ======== ======== ========= ======== Weighted average number of common shares outstanding (000's) 138,734 119,072 136,758 117,900 ======== ======== ========= ======== Certain 1995 items have been reclassified to conform with the 1996 presentation.
ROYAL OAK MINES INC. Consolidated Statements of Cash Flow (unaudited - Cdn$ 000's) Three months ended Twelve months ended December 31 December 31 ------------------ ------------------- 1996 1995 1996 1995 ======== ======== ========= ======== CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Consolidated net income (loss) for the period $(21,306) $ 3,691 $ (5,985) $ 23,169 Items not affecting cash: Depreciation and amortization 6,499 4,001 24,900 13,645 Reclamation 2,111 930 2,663 1,250 Deferred income tax (8,820) -- -- -- Provision for (Recovery of) loss on foreign currency contracts 1,144 1,799 (453) (5,244) Write-down of resource properties and other assets 37,633 891 37,633 891 Other 730 (348) 1,014 44 -------- -------- --------- -------- CASH FLOW 17,991 10,964 59,772 33,755 Net changes in other operating items (3,386) 1,047 (2,323) (1,995) -------- -------- --------- -------- Net cash provided by operating activities 14,605 12,011 57,449 31,760 -------- -------- --------- -------- CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES Issue of common shares 557 (248) 116,855 14,595 Issuance of senior subordinated notes 1,295 -- 239,680 -- Cost of senior subordinated notes (170) -- (8,786) -- Accrued reclamation on acquisition -- -- -- 3,000 Other 1,377 (78) 2,001 (300) -------- ------- --------- -------- Net cash provided by (used in) financing activities 3,059 (326) 349,750 17,295 -------- ------- --------- -------- CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES Investment in Kemess capital assets through purchase of companies -- -- (201,976) -- Decrease in long-term investments -- -- 26,882 -- Investment in capital assets through purchase of Consolidated Professor Mines Limited (242) -- (16,100) -- Net additions to property, plant and equipment (44,623) (26,327) (123,844) (66,018) Investments, net of sales (596) (4,050) (7,697) (19,025) Change in other assets -- (593) (820) (568) -------- -------- --------- -------- Net cash used in investing activities (45,461) (30,970) (323,555) (85,611) -------- -------- --------- -------- INCREASE (DECREASE) IN CASH AND MARKETABLE SECURITIES DURING PERIOD (27,797) (19,285) 83,644 (36,556) CASH AND MARKETABLE SECURITIES AT BEGINNING OF PERIOD 253,822 161,666 142,381 178,937 -------- -------- --------- -------- CASH AND MARKETABLE SECURITIES AT END OF PERIOD $226,025 $142,381 $226,025 $142,381 ======== ======== ========= ======== Certain 1995 items have been reclassified to conform with the 1996 presentation.
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