Doug Ashbury
Northern News Services

NNSL (Sep 09/98) - Giant mine owner Royal Oak Mines Inc. will have to set aside a $6.6 million security deposit as part of its water licence.

The licence, issued this summer, was recently highlighted in an NWT Enviro Watch's enviro eye newsletter. Under the licence, Royal Oak will be required to post a $1.3 million security deposit June 30, 1999. That same amount will be required in 2000. An additional $2 million is required in 2001 and 2002. The money would go to restore the mine site.

It remains to be seen if the company will have to set aside money for arsenic trioxide cleanup.

The existing $400,000 security deposit has been rolled over into the new licence. That means the new licence, which expires June 29, 2003, carries no new security deposit fee this year, Kevin O'Reilly said. O'Reilly was among those who made presentations at the water licence hearings earlier this year.

The licence entitles Royal Oak to use water and dispose of waste for industrial undertakings in mining and milling at Giant.

As well as the security deposit, the licence outlines several conditions like an Oct. 1, 1999 deadline to submit an arsenic trioxide management plan.

O'Reilly also said the deposit amounts demonstrate "leniency" reflecting the company's financial position.

Several calls to Graham Eacott -- Royal Oak's vice-president of investor relations in Washington -- have not been returned.

Eacott has not responded to the Yellowknifer since he was quoted in an Aug. 24 Bloomberg Financial News story about Royal Oak's attempting to restructure its debt.

After the story, Royal Oak said it had no plans to ask bondholders to revamp terms of the debt but reiterated that the company is working with financial advisors in "seeking a long-term refinancing alternative."

Royal Oak suggested if the company's share price fell because of the story, Royal Oak would sue Bloomberg, a New York-based business news service.

Royal Oak closed up six cents Friday at 77 cents.