Doug Ashbury
Northern News Services

NNSL (Jan 13/99) - Giant mine owner Royal Oak was in the red $107.4 million in third-quarter 1998.

Much of the loss was due to a $86.4-million in writedowns in mine assets and long-term investments. The company's nine-month loss was $140.1 million.

In third quarter, Giant produced 22,011 ounces of gold, down three per cent compared to 22,749 ounces in third-quarter '97.

Average cash costs fell by 11 per cent to $397 ($263 US) from $446 ($296 US).

In the first nine months of '97, Giant produced 65,825 ounces of gold, down four per cent from the 68,578 ounces for the same nine months in '96.

Over the nine months, cash costs were $416 ($US 276).

In an effort to expand Giant's gold reserves, the company started exploration work in third-quarter '97.

To fund the exploration, Giant received a $1.5-million funding package from the GNWT and the city (Yellowknife's portion was $150,000). The federal government is considering a $3-million funding package worth over two years.

Last week, Royal Oak defaulted on debt payments to creditors. Failure to meet the debt obligations led Moody's rating service to downgrade Royal Oak.

In 1998, Royal Oak expected to produce 278,000 ounces of gold at a cash cost of $362 per ounce ($240 US).

This year, with Kemess in full production, Royal Oak predicts its total gold production will be about 427,000 ounces at an estimated cash cost of $286 an ounce ($190 US).

Royal Oak predicts Kemess South will produce 250,000 ounces of gold per year at a cost of $220 an ounce ($146 US).

A year ago, Royal Oak said it expected to produce 250,000 ounces of gold at an average cash cost of $119 ($79 US) an ounce.

For the nine months ending Sept. 31, Royal Oak reports revenues of $66.9 million compared to $160.8 million for the same period in '97.

Expenses were $92.8 million compared to $182 million.

Per share losses were $1.48 compared to 68 cents.

Liabilities rose 22.5 per cent to $645.8 million from $527.0 million.

Assets fell slightly to $840.3 million compared to $843.4 million.

Figures are unaudited and in Canadian dollars.