-----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, DFtn1cLfWbFVWNoakUTw/8JVgepjjtiX3aOsWBr2q1vsAVEKXkTnjcAJ0qUjs+Fs UKnyiULe2XGyxWy4BXBkUg== 0000041304-97-000014.txt : 19970523 0000041304-97-000014.hdr.sgml : 19970523 ACCESSION NUMBER: 0000041304-97-000014 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970515 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970522 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: 97613056 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 May 15, 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 Identification incorporation or organization) 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 May 15, 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 May 15, 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: May 15, 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 May 15, 1997. [Royal Oak Mines Inc. Press Release Letterhead] FOR IMMEDIATE RELEASE FROM KIRKLAND May 15, 1997 Royal Oak Announces First Quarter Results Royal Oak Mines Inc. (TSE and AMEX: RYO) announced today the unaudited financial results for the three months ended March 31, 1997. All figures are in thousands of Canadian dollars unless otherwise stated. Three Months Ended March 31 1997 1996 -------- -------- Gold production (ounces) 85,080 88,196 Revenue 47,484 51,049 Operating income (loss) (9,431) 881 Net income (loss) (8,113) 1,356 Net income (loss) per share (C$) (0.06) 0.01 Net cash used in operating activities 66,251 3,666 Net cash used in operating activities per share (C$) 0.48 0.03 Cash cost of production (US$ per ounce) 372 348 Average spot gold price (US$ per ounce) 351 400 Average realized gold price (US$ per ounce) 411 423 Weighted average common shares outstanding (million) 138.845 131.817 Quarter-end common shares outstanding (million) 138.870 138.181
Gold production of 85,080 ounces in the first quarter of 1997 was 4% less than the 88,196 ounces produced in the same period a year earlier. The lower production in the period this year was due to the temporary closure of the Hope Brook mill in January and February for cost saving measures. The mine continued to operate, although at a lower production rate than in the first quarter of 1996. The Company plans to permanently close the Hope Brook operation in the third quarter of this year when economic ore reserves will be depleted. Mine and mill equipment will be dismantled and moved to the Matachewan project in Ontario which is expected to commence production in the second quarter of 1999. This six month delay from the previously planned start-up date will allow the Company to conserve cash during this period of weaker gold prices until the Kemess Mine reaches full production capacity. In the first quarter this year, gold production at the Giant, Colomac and Pamour/Nighthawk mines was 5%, 4% and 8% higher, respectively, than in the first quarter of 1996. Revenue in the period ended March 31, 1997 was $47.5 million, a decrease of 7% from revenue of $51.0 million in the same period a year earlier. The decrease was due to the combined impact of lower gold production and a lower average realized gold price. The Company realized an average gold price of US$411 per ounce, 3% below the US$423 per ounce of gold realized in the first quarter of 1996. The average spot gold price of US$351 per ounce in the first quarter was 12% below the average spot price of US$400 in the same period last year. The Company's average cash cost of production in the first quarter this year was US$372 per ounce of gold, an increase of 7% from the US$348 per ounce in the same period last year. The principal reasons for this increase were higher costs at Colomac, and higher costs at Hope Brook where lower gold production resulted from the temporary mill closure. Cash costs at the Giant and Pamour/Nighthawk mines were below the levels in the first quarter of last year. The combination of lower revenue, higher cash costs, and a provision for loss on foreign currency contracts due to a weaker Canadian dollar impacted operating income. The operating loss in the first quarter of this year was $9.4 million compared to operating income of $0.9 million in the same period last year. In the period ended March 31, 1997, the Company incurred a net loss of $8.1 million, or 6 cents per share, compared to net income of $1.4 million, or 1 cent per share in the comparable period in 1996. Interest payable on the Company's U.S.-denominated Senior Subordinated Notes, which were issued in the third quarter of last year, and the foreign exchange translation effect on these Notes because of the weaker Canadian dollar, contributed to the loss in the first quarter. Net cash used in operating activities was $66.3 million, or 48 cents per share, in the first quarter of this year compared to $3.7 million, or 3 cents per share in the same period last year. In the first quarter of this year, the increase in cash invested in working capital related to operations was $65.8 million. The primary use of the cash invested in working capital was an increase in inventory items at the Colomac Mine (supplies are transported to Colomac in the first quarter of each year), and an increase in accounts receivable on the Kemess project. In light of the current market conditions and weak gold price, the Company is revaluing its high cost production with a view to suspending operations that do not generate cash flow at a gold price of US$350 per ounce in order to conserve cash. Royal Oak is constructing and developing a number of major projects which are expected to decrease cash costs significantly in the future. The principal project under construction is the Kemess Mine which is scheduled to commence production in the second quarter of 1998. Construction is now approximately 50% complete. Mill steelwork is being erected and major services have been installed. Mining equipment is being delivered to site in preparation for pre-production stripping of the open pit in July of this year. Significant progress is being made on construction of the tailings dam and on clearing the corridor for installation of the power line. Approximately $325 million of the total capital cost of $390 million has been committed in purchase orders and construction contracts. Recruiting of the approximately 350-person workforce to operate the mine has begun. The Company will focus on successful completion of its Kemess project and on operating its lower cash cost mines to maximize operating cash flow. For further information contact: or in Europe contact: Mr. J. Graham Eacott Mr. David Williamson Vice President, Investor Relations David Williamson Associates Royal Oak Mines International Investor Relations 5501 Lakeview Drive 78 Old Broad Street, 3rd Floor Kirkland, WA 98033 London, England, EC2M 1QP Telephone: (425) 822-8992 Telephone: 011-44-171-628-3989 Facsimile: (425) 822-3552 Facsimile: 011-44-171-920-0563 Consolidated Balance Sheets (unaudited - Cdn$ 000's) March 31 December 31 1997 1996 ======== =========== ASSETS Current Assets Cash and cash equivalents $113,761 $197,766 Marketable securities 590 590 Receivables 50,858 17,492 Inventories (note 4) 82,965 61,844 Prepaid expenses 14,011 7,729 -------- -------- Total Current Assets 262,185 285,421 Property, Plant and Equipment, net 494,181 482,733 Long-Term Investments 44,006 44,255 Deferred Charges and Other Assets 9,835 9,221 -------- -------- TOTAL ASSETS $810,207 $821,630 ======== ======== LIABILITIES Current Liabilities Accounts payable $ 16,268 $21,094 Accrued payroll costs 3,579 3,514 Accrued reclamation costs 6,668 -- Deferred revenue and capital leases 14,722 13,508 Income and other taxes payable 4,478 3,894 Senior subordinated notes interest payable 3,189 10,180 Other current liabilities 27,968 20,383 -------- ------- Total Current Liabilities 76,872 72,573 Deferred Revenue and Other Liabilities Deferred Reclamation Costs 12,084 17,622 Senior Subordinated Notes (note 12) 242,218 239,680 Deferred Income Taxes 843 5,064 Minority Interest in Subsidiary Companies 105 120 -------- -------- TOTAL LIABILITIES 366,842 370,264 -------- -------- SHAREHOLDERS' EQUITY Capital Stock (note 11) Common stock Authorized - unlimited Outstanding - 138,870,263 Dec. 31, 1996 - 138,845,263) 378,925 378,813 Retained Earnings 64,440 72,553 -------- -------- TOTAL SHAREHOLDERS' EQUITY 443,365 451,366 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $810,207 $821,630 ======== ========
The accompanying notes are an integral part of the Consolidated Financial Statements. Consolidated Statements of Income (unaudited - Cdn$ 000's except per share amounts) Three months ended March 31 ------------------ 1997 1996 ======== ======== REVENUE $ 47,484 $ 51,049 -------- -------- EXPENSES Operating 43,052 42,029 Royalties and marketing 424 562 Administrative and corporate 2,652 2,149 Depreciation and amortization 5,792 5,076 Reclamation 1,130 159 Exploration and other 1,347 960 Provision for (Recovery of) loss on foreign currency contracts 2,518 (767) -------- -------- Total operating expenses 56,915 50,168 -------- -------- OPERATING INCOME (LOSS) (9,431) 881 OTHER INCOME (EXPENSE) Interest and other income, net (note 3) 1,952 1,382 Interest expense (118) (39) Senior subordinated notes interest (6,344) -- Senior subordinated notes interest capitalized 4,420 -- Foreign currency translation on senior subordinated notes (2,538) -- -------- -------- NET INCOME (LOSS) BEFORE UNDERNOTED (12,059) 2,224 Income and mining taxes - current (326) (355) Income and mining taxes - deferred 4,221 (540) Minority interest 36 27 Equity in income of associated companies 15 -- -------- -------- NET INCOME (LOSS) (8,113) 1,356 RETAINED EARNINGS - BEGINNING OF PERIOD 72,553 78,538 -------- -------- RETAINED EARNINGS - END OF PERIOD $ 64,440 $ 79,894 ======== ======== EARNINGS PER SHARE $(0.06) $0.01 ======== ======== Weighted average number of common shares outstanding (000's) 138,845 131,817 ======== ========
The accompanying notes are an integral part of the Consolidated Financial Statements. Consolidated Statements of Cash Flow (unaudited - Cdn$ 000's) Three months ended March 31 ------------------ 1997 1996 ======== ======== CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Consolidated net income (loss) for the period $ (8,113) $ 1,356 Items not affecting cash: Depreciation and amortization 5,792 5,076 Reclamation 1,130 159 Deferred income tax (4,221) 540 Provision for (Recovery of) loss on foreign currency contracts 2,518 (767) Foreign currency translation on senior subordinated notes 2,538 -- Deferred charges and other (132) 118 -------- -------- CASH FLOW (488) 6,482 Net change in other operating items (65,763) (10,148) -------- -------- Net cash used in operating activities (66,251) (3,666) -------- -------- CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES Issue of common shares 112 114,000 Capital lease payable (278) (80) Deferred credits -- 1,510 -------- ------- Net cash provided by financing activities (166) 115,430 -------- ------- 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 -- (13,252) Investment in other capital assets, net (15,310) (19,428) Investment in exploration and non-producing properties, net (1,691) (2,066) Change in other assets (587) (3,243) Net cash used in investing activities (17,588) (213,083) -------- -------- INCREASE (DECREASE) IN CASH AND MARKETABLE SECURITIES DURING PERIOD (84,005) (101,319) CASH AND MARKETABLE SECURITIES AT BEGINNING OF PERIOD 198,356 142,381 -------- -------- CASH AND MARKETABLE SECURITIES AT END OF PERIOD $114,351 $ 41,062 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 13,317 $ 39 Income taxes $ 40 $ 355
Cash consists of cash and short-term investments. The accompanying notes are an integral part of the Consolidated Financial Statements. -----END PRIVACY-ENHANCED MESSAGE-----