Gold producer Royal Oak Mines (RYO-T) has completed a debt-financing to raise funds for its portfolio of Canadian development projects.
The funds will be used to finance construction of Royal Oak’s flagship operation, the $390-million Kemess copper-gold project in British Columbia, as well as several other development projects there and in northern Ontario.
“We have no current intention to issue shares to fund these projects,” said President Margaret (Peggy) Witte in a press release. She said the balance of funding for the projects would come from Royal Oak’s treasury, future operational cash flow, and compensation and economic assistance from the government of British Columbia.
Construction at Kemess is estimated to be 65% complete. When the operation begins production in the second quarter of 1998, the Kemess South deposit is expected to yield 250,000 oz. annually at an average cash cost of US$189 per oz. In addition, 60 million lb. copper, at a cash cost of US48 cents per lb., will also be produced.
In addition, the mine’s life, which is now estimated at 15 years, may increase when a resource of 1.9 million oz. gold and 623 million lb. copper in the Kemess North deposit is upgraded to the status of minable ore reserves.
Royal Oak ‘s other development project in British Columbia is the Red Mountain gold property. In Ontario, the company will develop the Matachewan and Duport properties, and expand the Pamour open pit.
Based on these plans, Royal Oak anticipates that, by 2000, it will be producing more than 1 million oz. gold per year at an average cash cost of US$230.
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