-----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, BoWSVITU7RoOOa6BJkBq5aDPDNTjQbgy8CxLtleEIPwT/hynTMkSET2aOAM5983j oWEDKNqo8gPAL5SLskTfLQ== 0000041304-98-000029.txt : 19980513 0000041304-98-000029.hdr.sgml : 19980513 ACCESSION NUMBER: 0000041304-98-000029 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980512 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980512 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROYAL OAK MINES INC CENTRAL INDEX KEY: 0000041304 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 980160821 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-04350 FILM NUMBER: 98617102 BUSINESS ADDRESS: STREET 1: 5501 LAKEVIEW DR CITY: KIRKLAND STATE: WA ZIP: 98033 BUSINESS PHONE: 4258228992 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 12, 1998 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) (425) 822-8992 - ---------------------------------------- Registrant's telephone number, including area code Item 5. Other Events On May 12, 1998, 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 12, 1998. 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 12, 1998 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 12, 1998. FOR IMMEDIATE RELEASE FROM KIRKLAND May 12, 1998 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, 1998. All figures are in thousands of Canadian dollars unless otherwise stated. First Quarter Highlights Financial Position March 31, 1998 December 31, 1997 March 31, 1997 -------------- ----------------- -------------- Cash 63 568 113,761 Total assets 842,541 843,386 810,207 Net debt (1) 334,724 274,136 132,915 Shareholders' equity 318,638 316,378 443,365 (1) Net debt = Notes payable + current and non-current capital leases - cash * Operating income of $3.2 million in Q1/98 compared with an operating loss of $9.2 million in Q1/97. * Net income of $2.3 million (2 cents per share) in Q1/98 compared with a net loss of $8.1 million (6 cents per share) in Q1/97. * Cash flow before other operating items of $0.9 million in Q1/98 compared with a cash deficiency of $0.5 million in Q1/97. * Operating results in Q1/98 were favourably impacted by closure of the high cost Hope Brook and Colomac mines toward the end of last year. * Gold production from continuing operations at Giant and Pamour/Nighthawk mines was 45,557 ounces, down 5% from 47,999 ounces produced in Q1/97. Total gold production from all operations in Q1/97 was 85,080 ounces. * Average cash cost of US$280 per ounce from continuing operations was down 16% from US$332 per ounce in Q1/97. Average cash cost for all operations in Q1/97 was US$372 per ounce. * Average realized gold price of US$345 per ounce, a premium of US$51 per ounce, or 17% above average spot price of US$294 per ounce. * Arranged US$120 million debt financing to complete Kemess project. * Scheduled start-up of Kemess this week. Royal Oak Announces First Quarter Results, Page 2 Operating Results Three months ended March 31 1998 1997 ------- -------- Gold production (ounces) 45,557 85,080 Revenue 22,429 47,974 Cash flow before changes in other operating items 930 (488) Cash flow before changes in other operating items per share (C$) 0.01 -- Net income (loss) 2,260 (8,113) Net income (loss) per share (C$) 0.02 (0.06) Cash cost of production (US$/oz) 280 372 Average spot gold price (US$/oz) 294 351 Average realized gold price (US$/oz) 345 411 Weighted average common shares outstanding (millions) 138.940 138.845 Period-end common shares outstanding (millions) 138.940 138.870 Operating results in the first quarter of 1998, compared with the same period in 1997, were favourably impacted by the closure of the high cost Hope Brook and Colomac mines in September and December of 1997, respectively. Both mines were placed on care and maintenance. In the first quarter of 1998, gold production from continuing operations at the Giant and Pamour/Nighthawk mines was 45,557 ounces, a decrease of 5% from the 47,999 ounces produced at these mines in the same period of 1997. Total gold production in the first quarter of 1997 (including production from the Hope Brook and Colomac mines) was 85,080 ounces. Revenue in the first quarter of this year was $22.4 million compared with $48.0 million in the same period of 1997. The decrease in revenue in the period this year reflected a decrease in gold production of 39,523 ounces, mainly due to the closure of the Hope Brook and Colomac mines, and a decrease of 16% in the average realized gold price to US$345 per ounce from US$411 per ounce in the first quarter of 1997. Revenue in the first quarter of 1998 included hedging gains of $3.2 million compared with $8.0 million in the same period last year. In the first quarter of 1998, the Company reported operating income of $3.2 million compared with an operating loss of $9.2 million in the first quarter of 1997. Net income in the first quarter of 1998 was $2.3 million, or 2 cents per share, compared with a net loss of $8.1 million, or 6 cents per share, in the same period last year. In the first quarter of 1998, the average cash cost of production for continuing operations at the Giant and Pamour/Nighthawk mines was US$280 per ounce, a decrease of 16% from the average of US$332 per ounce for these mines in the same period of 1997. In the first quarter of last year, the average cash cost for all operations was US$411 per ounce, which reflected the combined impact of the high cost Hope Brook and Colomac mines that were subsequently closed toward the end of the year. The average cash cost of US$280 per ounce at the Giant and Pamour/Nighthawk mines in the period this year reflects major cost-cutting initiatives implemented in the fourth quarter of last year when an average cash cost of US$285 per ounce was reported for these mines. Cash flow before changes in other operating items was $0.9 million in the first quarter of 1998 compared with a cash deficiency of $0.5 million in the same quarter last year. Net cash used in operating activities Royal Oak Announces First Quarter Results, Page 3 was $35.3 million in the first quarter of this year compared with net cash used of $66.3 million in the same period last year. The net change in cash used in other operating items of $36.2 million and $65.8 million in the respective periods mainly reflects increases in accounts payable related to the Kemess project. Kemess Mine Scheduled to Commence Production this Week The Kemess gold copper mine in north central British Columbia is scheduled to commence production within the next few days after completing construction of the mill and the tailings pipeline. Over 9 million tons of waste has been stripped from the open pit during the pre-production phase in order to expose ore for drilling and blasting. Ore has already been hauled to the primary crusher to commission the equipment. Power is now being delivered to the mine site through the 230 kV transmission line. Outlook Margaret K. Witte, president and chief executive officer of Royal Oak, commenting on the outlook for the Company, said, "We are very excited about starting our new Kemess Mine within the next few days. Building the Kemess facility has been a great challenge for Royal Oak and we value the commitment of our construction workforce, suppliers and contractors who have supported the Company, particularly during this difficult period. We expect to close the previously announced US$120 million debt financing as soon as documentation is complete, allowing us to resolve our short-term liquidity problems. We are also encouraged that the average cash cost at our Giant and Pamour operations has been maintained at the US$280 per ounce level after we took some major cost cutting initiatives in the fourth quarter last year. As a result, we were able to generate operating income, earnings, and cash flow before other operating items in the first quarter of this year despite a weak gold market. The last twelve months have been a difficult time for Royal Oak as we have overcome a number of challenges on our Kemess project and have taken steps to improve our cost structure going forward by closing the high cost Hope Brook and Colomac mines. I believe the worst is now behind us as we are about to commence production at Kemess and complete our financing. I look forward to sharing with you during the remainder of this year the results of operations at Kemess as the mine reaches its operating targets." For further information contact: or in Europe contact: Mr. J. Graham Eacott Mr. David Williamson Vice President, Investor Relations David Williamson Associates Royal Oak Mines International Investor Relations 5501 Lakeview Drive 15 St. Helen's Place, 3rd Floor Kirkland, WA 98033-7314 London, England, EC3A 6DE Telephone:(425) 822-8992 Telephone:011-44-171-628-3989 Facsimile:(425) 822-3552 Facsimile:011-44-171-920-0563 Internet site: http://www.royal-oak-mines.com Royal Oak Mines Inc. Consolidated Balance Sheets (unaudited - Cdn$ 000's) March 31 December 31 1998 1997 ========= =========== ASSETS Current Assets Cash and cash equivalents $ 63 $ 568 Marketable securities 560 9,875 Receivables 14,294 30,923 Inventories 16,204 21,120 Prepaid expenses 4,523 3,967 ---------- ---------- Total Current Assets 35,644 66,453 Property, Plant and Equipment, net 758,695 730,314 Long-Term Investments 12,373 12,145 Reclamation and Other Deposits 14,360 14,332 Deferred Charges and Other Assets 21,469 20,142 ---------- ---------- TOTAL ASSETS $ 842,541 $ 843,386 ========== ========== LIABILITIES Current Liabilities Accounts payable and accrued liabilities $ 95,577 $ 135,320 Deferred revenue 16,066 20,085 Capital leases 4,446 4,531 Taxes payable 1,563 1,723 Long-term debt interest payable 4,579 10,326 Accrued unrealized loss on derivatives 18,258 21,327 ---------- ---------- Total Current Liabilities 140,489 193,312 Deferred Revenue 23,132 23,330 Other Liabilities 46,817 57,427 Long-Term Debt 310,895 250,338 Deferred Income Taxes 2,532 2,532 Minority Interest in Subsidiary Companies 38 69 ---------- ---------- TOTAL LIABILITIES 523,903 527,008 ---------- ---------- SHAREHOLDERS' EQUITY Capital Stock Common stock Authorized - unlimited Outstanding - 138,940,263 (Dec. 31, 1997 - 138,940,263) 379,040 379,040 Deficit (60,402) (62,662) ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 318,638 316,378 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 842,541 $ 843,386 ========== ==========
Royal Oak Mines Inc. Consolidated Statements of Income (Loss) (unaudited - Cdn$ 000's except per share amounts) Three months ended March 31 --------------------------- 1998 1997 ============ ============ REVENUE $ 22,429 $ 47,974 ---------- ---------- EXPENSES Operating 18,231 42,978 Care and maintenance 1,337 74 Royalties and marketing 291 424 Administrative and corporate 2,246 2,652 Depreciation and amortization 4,004 5,553 Reclamation 584 1,130 Exploration and other 447 1,347 Provision for (Recovery of) loss on foreign currency and commodity contracts (7,894) 3,008 ---------- ---------- Total operating expenses 19,246 57,166 ---------- ---------- OPERATING INCOME (LOSS) 3,183 (9,192) OTHER INCOME (EXPENSE) Interest and other income (expense), net (8) 1,713 Interest expense (297) (118) Long-term debt interest (8,208) (6,344) Interest capitalized 8,208 4,420 Foreign currency translation loss on long-term debt (292) (2,538) ---------- --------- INCOME (LOSS) BEFORE UNDERNOTED 2,586 (12,059) Income and mining taxes - current (420) (326) Income and mining taxes - deferred -- 4,221 Minority interest 31 36 Equity in income of associated companies 63 15 ---------- ---------- NET INCOME (LOSS) 2,260 (8,113) RETAINED EARNINGS (DEFICIT) - BEGINNING OF PERIOD (62,662) 72,553 ---------- ---------- RETAINED EARNINGS (DEFICIT) - END OF PERIOD $ (60,402) $ 64,440 ========== ========== EARNINGS (LOSS) PER SHARE $ 0.02 $ (0.06) ========== ========== Weighted average number of common shares outstanding (000's) 138,940 138,845 ========== ========== Certain of 1997 amounts have been reclassified to conform with the current year's presentation.
Royal Oak Mines Inc. Consolidated Statements of Cash Flow (unaudited - Cdn$ 000's) Three months ended March 31 1998 1997 ============ ============ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Net income (loss) for the period $ 2,260 $ (8,113) Items not affecting cash: Depreciation and amortization 4,004 5,553 Amortization of deferred finance costs 425 239 Deferred income tax -- (4,221) Reclamation 584 1,130 Provision for (Recovery of) unrealized loss on foreign currency and commodity contracts (6,539) 2,518 Foreign currency translation on senior subordinated notes 292 2,538 Deferred charges and other (96) (132) ---------- ---------- Cash flow 930 (488) Net change in other operating items (36,197) (65,763) ---------- ---------- Net cash used in operating activities (35,267) (66,251) ---------- ---------- CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES Issue of common shares -- 112 Capital lease obligation (474) (278) Issue of Senior Secured Debt 64,059 -- Issue costs of long-term debt (5,566) -- ---------- ---------- Net cash provided by (used in) financing activities 58,019 (166) ---------- ---------- CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES Proceeds from asset sales 4,267 -- Investment in other capital assets, net (36,446) (46,275) BC Government assistance -- 30,965 Investment in exploration and non-producing properties, net (274) (1,691) Change in other assets (119) (587) ---------- ---------- Net cash used in investing activities (32,572) (17,588) ---------- ---------- DECREASE IN CASH AND MARKETABLE SECURITIES DURING PERIOD (9,820) (84,005) CASH AND MARKETABLE SECURITIES AT BEGINNING OF PERIOD 10,443 198,356 ---------- ---------- CASH AND MARKETABLE SECURITIES AT END OF PERIOD $ 623 $ 114,351 ========== ==========
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