COAL, URANIUM & OIL SANDS — Royal Oak gets yet another chance — Court extends bankruptcy protection to beleagured company

The impatient creditors of Royal Oak Mines (RYO-T) have been told to wait just a little longer before they begin to pick at the bones of the moribund gold producer.

Mr. Justice James Farley of the Ontario Court (General Division) extended to April 9 Royal Oak’s protection under the Companies’ Creditors Arrangement Act, with the holders of Royal Oak’s senior notes providing a $1.6-million cash fund to keep the company in business until then. Provided Royal Oak makes progress satisfactory to the Court by April 9, Farley said he would extend the protection period to April 15. The same creditors would provide another $2.1 million to meet bills during that period.

Two of the company’s creditors, Trilon Financial and the Bank of Nova Scotia, had lined up behind those wishing to put Royal Oak into receivership. Judge Farley said that request was premature, but, at the same time, he refused to consider any extension beyond April 15, telling lawyers from Royal Oak, “Don’t come looking for more time.”

Price Waterhouse Coopers has been retained to perform a valuation of Royal Oak’s assets before the April 15 deadline, and the hope is that the creditors will agree on a restructuring plan before that date.