Finger on the switch
Power Corp leaning on Royal Oak for Giant power bill
Richard Gleeson and Doug Ashbury
NNSL (Feb 10/99) - The NWT Power Corporation wants its money and Giant Mine is running out of options.
Corporation spokesperson Bill Braden confirmed yesterday meetings have been held "over the past several days" with Royal Oak, owners of the mine.
"We're talking to Royal Oak about getting a satisfactory payment plan in place," said Braden.
The meetings, he said, were spurred by news in December that Royal Oak was rearranging its financing.
"Our understanding was that they had stopped payment to most of their suppliers until new financing comes into place on Feb. 15."
Braden would not say how much Giant owes or exactly when the meetings were held.
"It is a very clear and a very firm policy of ours not to discuss clients' accounts in public," said Braden.
Asked what action NWT Power's policy dictates in the case of a customer that fails to come up with a repayment plan, Braden said, "If they don't, our options are quite straightforward. Like any other supplier, we would discontinue service."
The city is also on the long list of Royal Oak creditors. The company owes the city about $750,000 in property taxes, said Mayor Dave Lovell.
He said the city is not about to demand payment of the tax bill, considering Royal Oak's precarious situation and the $25 million it pumps into the city's economy annually.
On Thursday Royal Oak had been given a last-minute reprieve by the B.C. government over its Kemess mine.
Provincial officials had told Royal Oak Tuesday to cease mining operations at its Kemess South mine because the mine's tailings pond dam was not high enough. But after a Wednesday meeting, officials instead gave Royal Oak two days to come up with a new schedule for completion of the tailings dam.
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.
If the B.C. government forces Royal Oak to suspend operations at Kemess South, the company would have to shut down the mine's milling operations and assign heavy equipment to dam construction.
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.