Hope Brook mine enables Royal Oak to boost earnings

Owing to a full year’s output from the Hope Brook mine in southwestern Newfoundland, Royal Oak Mines (TSE) produced 13% more gold in 1993 than in 1992.

The company turned out 276,320 oz. from its three Canadian operations last year, compared with 245,469 oz. in 1992. The average production cost rose slightly, to US$311 from US$304 per oz., but net income was higher in 1993, at $15.6 million, compared with $11.4 million in 1992. At year-end, Royal Oak was debt-free, with working capital of $82 million.

In May, the company expects to pour its first gold from the re-opened Colomac mine in the Northwest Territories. Production for 1994 and 1995 is estimated at 70,000 oz. and 170,000 oz., respectively. This year’s cash production cost is estimated at US$275 per oz.

All equipment and supplies for the year, including 30 million litres of fuel oil, have been trucked to the site by winter road and pre-stripping of the open pit is under way.

Royal Oak expects to produce 375,000 oz. gold from all its operations this year and 475,000 oz. in 1995.

It is also the controlling shareholder of Geddes Resources (TSE), which owns the aborted Windy Craggy copper-gold deposit in northern British Columbia. With the support of Royal Oak, Geddes is seeking hundreds of millions of dollars in compensation from the provincial government as a result of its decision to expropriate the property in favor of creating a public park. Geddes management was recently informed that government officials will be contacting them shortly to discuss compensation.