Doug Ashbury
Northern News Services

NNSL (Nov 18/98) - A huge write-down in mine assets pushed Giant Mine owner Royal Oak's third- quarter financial results well into the red.

"Because of continued weakness in the gold price and little encouraging news on the horizon, the company decided to revalue its assets at a gold price of $300 US per ounce," Royal Oak CEO Margaret Witte said.

That meant a $81.4 million writedown. Royal Oak reports in US dollars.

For the three months ended Sept. 30, the company reports $107.4 million loss, or 72 cents a share, compared to a $2.4 million loss in the same frame a year earlier.

So far this year, the company has lost $140.1 million, or 98 cents a share.

Early next year, Royal Oak expects to complete refinancing of its $120 million senior secured debt.

Witte also said the company's Yellowknife and Timmins mines are generating positive cash flow. Average cash costs were $252 an ounce in third quarter compared to $299 a year earlier.

Average realized gold price in third quarter was $324, $35 above the average spot price.

Gold production from Yellowknife and Timmins operations in third quarter was 44,633 ounces, down from 48,630 ounces a year earlier. Nine month gold production was down seven per cent at 135,922 ounces.

The third quarter results do not include figures from the recently opened Kemess mine.

At Sept. 30, Royal Oak's assets stood at $840.3 million while liabilities were $645.8 million. Among the liabilities, $449.6 million in long-term debt.