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
March 18, 1998
ROYAL OAK MINES INC.
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(Exact name of registrant as specified in its charter)
Commission File Number 1-4350
ONTARIO, CANADA 98-0160821
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(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
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(Address of principal executive offices) (Postal/Zip Code)
(425) 822-8992
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Registrant's telephone number, including
area code
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Item 5. Other Events
On March 18, 1998, the Registrant issued the following press release:
[Royal Oak Mines Inc. Press Release Letterhead]
FOR IMMEDIATE RELEASE FROM KIRKLAND
March 18, 1998
Royal Oak Summarizes Conference Call Held March 18, 1998
Royal Oak Mines Inc. (TSE and AMEX: RYO) in an open conference call held earlier
today, disclosed further information about the current short-term liquidity
problems it is facing. To review this call, the phone-in number is 416-626-4100
(using reservation #838227). The number can be accessed until midnight Friday,
March 20, 1998.
In summary, the Company disclosed that its current cash position is
approximately C$2.5 million and the Company has additional sources of cash
totaling approximately C$20 million which will be flowing into the company over
the next 2-1/2 months. The Company's current overdue payables are approximately
C$27-$29 million with the largest percentage of these payables being for
construction on the Kemess project.
The Company has spent to date approximately C$435 million on the project and
paid out approximately $395 - $400 million of cash towards construction. The
total capital cost of the project is estimated at C$470 million.
The Company is in the process of raising funds to ease the short-term liquidity
problem. It is the Company's goal not just to provide a Band-Aid approach until
start up of Kemess, but to raise sufficient monies (approximately US$50 - $60
million) to provide for the start-up of Kemess, additional working capital and
meet all interest payments on its debt throughout 1998.
The project is expected to cash flow positive by the third quarter of 1998.
Provided the liquidity problems are solved in the next two to three weeks, the
Company is anticipating that the Kemess Mine will be fully operational by the
third to fourth week of May with Line A in the mill starting up in the last week
of April, and Line B starting up later in May.
With respect to further clarification of our news release dated March 17th, the
Company is in technical default under covenants of the Senior Secured
Debentures. All interest payments on the Senior and Subordinated Notes are up
to date. No demand notice has been provided by the Senior Secured Noteholders
and consequently the 20-day cure period has not started. None of our existing
creditors are taking action against the Company and the Company does not have
any plans to file for any type of bankruptcy proceedings. The Company is
currently working with its financial advisors evaluating a number of alternative
sources of liquidity. These sources of liquidity include the sale of non-core
assets, additional senior or subordinated borrowings, and/or issuance of equity
or preferred shares. The Company expects these issues to be resolved in the
next two to three weeks.
For further information, contact: or in Europe contact:
Mr. J. Graham Eacott Mr. David Williamson
Mr. Nick Volk 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
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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: March 18, 1998 By: /s/ James H. Wood
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James H. Wood
Chief Financial Officer
