Doug Ashbury
Northern News Services

NNSL (Mar 17/99) - Insolvent Royal Oak Mines Inc. moved quickly to defend three payments totalling $1.2 million, including about $600,000 in life insurance premiums for top executives.

As well as the life insurance premiums payment to Pacific Life, Royal Oak also wrote cheques to Sun Life of Canada to cover employee benefits insurance premiums.

A third payment went to Trilon Bancorp. for a shovel and drill lease at Royal Oak's Kemess South gold-copper mine.

Royal Oak said Monday it believed it was "acting in good faith and in the best interests of the company and its employees to maintain operations and preserve values of the benefit of shareholders."

The company also said: "Actions taken by the company in making the above three payments were in accordance with the budget previously submitted to Trilon and (PricewaterhouseCoopers) and were not the result of any wrongdoing."

Trilon Financial Corp., which has lent Royal Oak millions of dollars and has first call on the Kemess South mine, asked Royal Oak to stop payment on cheques to Sun Life.

Royal Oak said all three payments have been stopped.

Because the payment to Sun Life was stopped, employees' "extended benefits are therefore not currently covered by insurance," Royal Oak said.

Mid-afternoon Monday, Canadian Autoworkers Local 2304 president Marc Danis said he had spoken to management at Giant mine.

"I understand the (employees' extended benefits) matter is in the process of being rectified," Danis said.

Danis said he has been given assurances that the members are protected.

"We are monitoring the situation. All we can do is wait a few days."

As for Royal Oak's position on life insurance premiums paid for executives, Royal Oak concluded: "There is no immediate benefit to any of the executives named in this life insurance plan."

Last month, Royal Oak, about $600 million in debt, was given court protection from creditors.

That protection runs out Thursday.

The money used to make the three payments came from an emergency loan from Trilon Financial, part of the EdperBrascan conglomerate.

Trilon advised PricewaterhouseCoopers, the firm appointed to monitor Royal Oak's financial activity, that it considered Royal Oak to be in default of the emergency loan, the Globe and Mail reported Saturday.

Under the loan arrangement, expenditures were to be run by Trilon and approved by the monitor.

Trilon president George Myhal could not be reached.

Royal Oak spokesperson Pat Howe said the company, originally given court protection until March 15, now has protection until Thursday after a Monday ruling.