B.C. gives company time to raise Kemess dam level
Doug Ashbury
Northern News Services
NNSL (Feb 10/99) - Royal Oak Mines has been given a last-minute reprieve by the B.C. government.
Provincial government officials had told Royal Oak Tuesday to cease various mining operations at its Kemess South gold-copper mine because the mine's tailings pond dam was not high enough.
But after a Wednesday meeting, officials instead gave Royal Oak two-day's to come up with a new schedule for completion of the tailings dam.
Royal Oak is being allowed to continue operations, Don Zadravek, B.C. Ministry of Energy and Mines communications executive director, said.
Royal Oak now has until 6 p.m. today (Friday) to come up with a new tailings dam schedule.
Royal Oak spokesperson J. Patrick Howe said Thursday "bad weather and equipment failure" led to delays in raising the level of the dam.
The dam is seven to 10 centimetres short, he said.
The company has weekly dam-level requirements that it must achieve to keep its operating permit in good standing.
If the B.C. government decides to ultimately force Royal Oak to temporarily suspend operations at Kemess South, the company would have to shutdown the mine's milling operations, stop pumping into the tailings pond, stop mining ore from the pit and assign heavy equipment to dam construction.
On news of the tailings dam situation, Royal Oak's shares fell four cents to 36 cents Wednesday but rebounded to as high as 39 cents midday Thursday.
Failure to meet B.C. rules is the latest in a series of setbacks for Giant mine-owner Royal Oak.
The company is hundreds of millions of dollars in debt.
It has missed two monthly payments to Trilon Financial Corp. Trilon, though not Royal Oak's biggest creditor, has first call on the Kemess South mine.
The next key date for Royal Oak is Feb. 15 when the company has a $16.7 million ($11.2 million US) interest payment on $261 million ($175 million) in senior subordinated debentures.
Royal Oak has been in discussion with the debenture holders and "my guess is it's going right up to the wire," Howe said.
