First-quarter results show turnaround for Royal Oak

The latest operating results from the Pamour group of companies reflect the success of a detailed turnaround program implemented by Royal Oak Resources (TSE) since it assumed direct managerial control of the group late last year.

Royal Oak and the Pamour group — which includes Giant Yellowknife Mines (TSE), Pamour (TSE), Pamorex Minerals (TSE) and Akaitcho Yellowknife Gold Mines (TSE) — will be seeking shareholder approval next month for a proposal to amalgamate the companies.

The amalgamated company would be an intermediate gold producer with two main operations — the Giant mine in Yellowknife, N.W.T., and the Pamour No. 1 (including Hoyle deposit) in Timmins, Ont. — each producing 100,000 oz. gold annually.

The 1990 acquisition of the Pamour group represents a coup for Royal Oak President Margaret Witte, particularly as the company was able to report 1991 first-quarter earnings of $2.1 million, compared to a loss of $96,000 in the 1990 first quarter.

Royal Oak said its “exceptional” first-quarter earnings result from a turnaround in the operations of Giant Yellowknife and a focussing of all operations on cost-effective production.

For example, the company said the cost of production at the Giant Yellowknife mine sites was reduced by $100 per oz. from the first quarter last year, and $70 per oz. from the year ended 1990. At the same time, gold production in the 1991 first quarter increased by 13%, while staffing was cut by about 20%.

As for Giant Yellowknife, it reported net earnings of $4.5 million on revenues of $24.3 million for the 1991 first quarter, compared to a loss of $610,000 on revenues of $23.7 million in the year-earlier period.

A total of 48,299 oz. gold was produced during the period at a cash production cost of US$325 per oz., compared with 42,809 oz. produced for a cash cost of US$426 per oz. in the 1990 first quarter.

Pamour reported net earnings of $875,000 for the first three months of this year, compared to a loss of $820,000 in the 1990 first quarter. Akaitcho reported a loss of $34,000, compared with a loss of $2,000 in the 1990 first quarter.