Royal Oak lays off 121 people in bid to cut Pamour costs

As promised, Royal Oak Resources (TSE) has lowered its axe on the Pamour group of companies in an attempt to cut operating and administrative costs. Having purchased control of Pamour (TSE) in November, Vancouver-based Royal Oak recently laid off 121 people, or about 15% of Pamour’s staff, and closed Pamour’s corporate offices in Toronto.

The Timmins division, owned by Pamour affiliate Giant Yellowknife Mines (TSE), took the biggest cuts. Royal Oak has instructed Giant to cease mining most of the narrow veins at Pamour 1, leaving 48 miners, maintenance workers and drillers out of work.

In Yellowknife, Royal Oak has closed the tailings retreatment project indefinitely and laid off nine workers at the Giant gold mine. Operating personnel in Yellowknife now totals 312 versus 351 earlier this year.

The activities of Pamour’s exploration arm, Pamorex Minerals (TSE), will also be severely curtailed, following layoffs of 18 geologists in Timmins and six geologists and clerical staff in Reno, Nev. The Reno office will be closed as of Dec. 31.

Next year’s exploration budget has not yet been finalized, said Steve Manz, a spokesman for Royal Oak. “It’s going to take us a while to learn all we need to know (about the Pamour group) before we finalize anything,” he said.

As a result of the cuts, Giant Yellowknife expects to produce 45,879 oz. of gold in the first quarter of 1991 at an average cash production cost of US$325 per oz. The company has 33,600 oz. sold forward for delivery in the first quarter at an average price of US$460.

Total gold production in 1990 is expected to reach 195,000 oz. at an average cost of US$360.

Royal Oak plans to amalgamate with Giant Yellowknife, Pamour, Pamorex and Akaitcho Yellowknife Gold Mines (TSE) to form one, intermediate-sized gold producer.