Royal Oak clears debt despite drop in gold production

Although Royal Oak Mines (TSE) isn’t producing as much gold as last year, the company’s new management team is reporting an improved financial performance for both the first nine months of 1991 and the latest quarter ended Sept. 30.

Gold production for the 1991 third quarter was 46,905 oz., compared with 57,047 oz. in the comparable 1990 period. But net earnings of $2.14 million was reported for the period, compared to a loss of $1.39 million a year earlier.

During the third quarter, Royal Oak paid off all its long-term debt. During the first nine months of this year, gold production totalled 141,738 oz., compared with 144,037 oz. in the comparable 1990 period. Net earnings of $8.6 million were reported for the period, compared to a loss of $4.5 million for the first nine months of 1990.

The company says it plans to reduce production costs in 1992 to less than $300 per oz. while increasing production at its operations in Timmins, Ont., and Yellowknife, N.W.T.

Royal Oak produces gold from mining operations at Timmins, Ont., and at Yellowknife, N.W.T. The company was formed as the result of an amalgamation in July of Royal Oak Resources, Pamour, Giant Yellowknife Mines, Pamorex Minerals and Akaitcho Yellowknife Gold Mines.

The company holds a large portfolio of exploration prospects inherited from its predecessor companies. It plans to concentrate exploration on projects that offer the best potential for quick, low-cost development and operations. “Discoveries of new deposits and extensions to past producing orebodies on our properties over the past few years have provided Royal Oak with a stable of attractive potential mines which will assure the steady growth of the company,” says President Margaret Witte in a company profile. With 90 properties covering 180,000 acres, Royal Oak controls one of the largest land positions in two of Canada’s premier gold camps. Royal Oak is also considering a North American acquisition that would add more than 50,000 oz. output annually.