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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                      ----------------------------------
                                   FORM 10-K

[X]   Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934 [Fee required]

            For the fiscal year ended DECEMBER 31, 1996

                        or

[ ]  Transition report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of  1934   [No fee required]

            For the transition period from _________ to __________

                         Commission File Number 1-4350

                             ROYAL OAK MINES INC.
______________________________________________________________________________
            (Exact name of registrant as specified in its charter)

ONTARIO, CANADA                           NONE
_______________________________           _______________________________
(State or other jurisdiction of           (I.R.S. Employer Identification
incorporation or organization)            No.)


c/o Royal Oak Mines (USA) Inc.
5501 Lakeview Drive
Kirkland,  Washington
U.S.A.                                    98033
______________________________            ________________
(Address of principal executive           (Postal/Zip Code)
offices)


(206) 822-8992
______________
Registrant's telephone number,
including area code
______________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class                 Name of each exchange on which registered
_______________________________     _________________________________________
Common shares without par value     American Stock Exchange
                                    The Toronto Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None


                                   continued
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days.  Yes X      No __

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. __

Aggregate market value of the voting stock held by non-affiliates of the
registrant on March 17, 1997, based on the closing price of the shares on the
American Stock Exchange, was US$464,704,240.

Common shares outstanding as of March 17, 1997 was 140,770,079.  This includes
1,924,816 shares which are owned by a wholly-owned subsidiary and may not be
voted.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Management Information Circular of the Registrant (Proxy
Statement) to be filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 for the Annual Meeting of Shareholders to be held on May
29, 1997, have been incorporated by reference into Items 10, 11, 12 and 13.

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                                     INDEX


                                                                         PAGE

Glossary - Selected Mining Terms

Glossary - Selected Financial Terms


                                    Part I
Item
       1    Business
       2    Properties
       3    Legal Proceedings
       4    Submission of Matters to a Vote of Security Holders
            Executive Officers of the Registrant

                                    Part II

       5    Market for Registrant's Common Stock and Related Shareholder
            Matters
       6    Selected Financial Data
       7    Management's Discussion and Analysis of Financial Condition and
            Results of Operations
       8    Financial Statements and Supplementary Data
       9    Changes in and Disagreements with Accountants on Accounting and
            Financial Disclosures

                                   Part III

      10    Directors and Executive Officers of the Registrant
      11    Executive Compensation
      12    Security Ownership of Certain Beneficial Owners and Management
      13    Certain Relationships and Related Transactions


                                    Part IV

      14    Exhibits, Financial Statement Schedules and Reports on Form
            8-K



The Registrant will furnish a copy of any exhibit filed as part of this report
to any shareholder of record upon receipt of a written request from such
person and payment of the Registrant's reasonable expenses for furnishing such
an exhibit.  Requests should be made to the Vice President, Investor
Relations, at the address set forth on the cover page of this report.

REPORTING CURRENCY AND FINANCIAL INFORMATION

ALL DOLLAR AMOUNTS ARE STATED IN CANADIAN CURRENCY, UNLESS OTHERWISE
INDICATED.

The following table sets forth, for each of the years indicated, the exchange
rate of the Canadian dollar into United States currency at the end of each
such year, the average exchange rate during each such year and the range of
high and low rates of each such year:

<TABLE>

                                      1996       1995        1994        1993        1992
                                    ------     ------      ------      ------      ------
 <S>                                <C>        <C>         <C>         <C>         <C>
 Rate at end of                     0.7301     0.7323      0.7129      0.7544      0.7867
 Period (1)
 Average Rate (2)                   0.7332     0.7305      0.7321      0.7751      0.8276
 High Rate                          0.7513     0.7527      0.7632      0.8046      0.8760
 Low Rate                           0.7235     0.7023      0.7105      0.7439      0.7760

</TABLE>

(1)   The rate of exchange is the noon buying rate in New York City for cable
      transfers as certified for customs purposes by the Federal Reserve Bank
      of New York.

(2)   The Average Rate is the average of the exchange rates on the last day of
      each month during a year.

All of the amounts in the table are stated in U.S. currency.  Accordingly, at
December 31, 1992 C$1.00 equalled US$0.7867.  On March 17, 1997 the noon rate
of exchange of the Federal Reserve Bank of New York was C$1.00 equal to
US$0.7302.

               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains references to the future performance,
plans and expectations of Royal Oak Mines Inc. ("Royal Oak", the "Registrant"
or the "Company") that are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995.  Such forward-looking
statements are based on numerous variables and assumptions that are inherently
uncertain, including without limitation general economic and competitive
conditions and factors more fully described under "Risks and Uncertainties" in
"Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the Company's other Securities and Exchange
Commission filings.  Among such factors are those relating to the Company's
ability successfully to complete development projects within projected capital
budgets or to carry on mining operations within projected operating budgets,
volatility in the price of gold, copper and other commodities, interest and
foreign exchange rates, government regulation and agency action, competing
land claims, the accuracy of estimates of ore reserves and mineral inventory.
Actual future results or values may be materially more or less favorable than
projected.  The forward-looking statements in this Annual Report on Form 10-K
represent the Company's judgement as of the filing date, and the Company
disclaims any intent or obligation to publicly release the results of any
revisions that may be made to these forward-looking statements to reflect any
future events or circumstances.  Certain forward-looking statements in this
Annual Report on Form 10-K will be identified by a cross-reference to this
special note.

                       GLOSSARY - SELECTED MINING TERMS

ACID MINE DRAINAGE - Acidic run-off water from mine waste dumps and mill
tailings ponds.  Such drainage requires treatment to buffer acidity before it
can be released into the natural environment.

ADIT - A horizontal opening into the side of a hill to provide access for
underground mining.

ASSAY - The testing of a rock sample to determine its mineral content.

BACKFILLING - Waste material used to fill the void created by mining.

CARBON COLUMN CIRCUIT (FACILITY) - A process utilizing activated carbon to
recover soluble gold and silver values from a sodium cyanide leaching
solution.  The precious metal values are absorbed into the activated carbon
particles as the solution passes in an up-flow pattern through tanks or
columns.

CHALCOPYRITE - A sulphide mineral of copper and iron, a common ore of copper.

C.I.P. (Carbon-in-pulp) - A carbon loading process in which a slurry of gold
ore is subjected to cyanide leaching followed by gold adsorption onto carbon.

CONCENTRATE - A fine powdery product containing the valuable metal from which
most of the waste material in the ore has been eliminated and discarded.

CONCENTRATOR - A milling plant that produces a concentrate of the valuable
minerals or metals.

CONTAINED OUNCES - Reserves are estimated to encompass a stated number of
ounces of gold in place.  The number of ounces ultimately recovered and
available depends upon mining efficiency and processing efficiency.

CRUSHING AND GRINDING - The process by which ore is reduced to a suitable size
to prepare it for further processing.

CYANIDATION - A method of extracting gold or silver by dissolving it in a weak
solution of sodium or potassium cyanide.

DECLINE - A sloping underground opening for machine access from level to level
or from surface; also called a "ramp".

DILUTION - The effect of waste or low grade ore being included and removed
along with the ore in the mining process, subsequently lowering the grade of
the ore.

DORE BAR - Unrefined gold and silver bullion bars usually consisting of
approximately 90 per cent precious metals.

DRIFT - A horizontal underground tunnel driven alongside or through an ore
deposit, from either an adit or shaft, to gain access to the deposit.

DRILLING -
      BLASTHOLE:  Drilling holes deep into rock to place an explosive charge
      that breaks up the rock.

      DIAMOND:  Drilling with a hollow bit with a diamond cutting rim to
      produce a cylindrical core that is used for geological study and assays.
      Used in mine exploration.

      INFILL:  Diamond drilling at shorter intervals between existing holes,
      used to provide greater geological detail and to help establish reserve
      estimates.

      ROTARY (or reverse circulation):  Drilling that produces rock chips
      rather than core.  Faster and cheaper than diamond drilling, the chips
      are forced by air to the surface for examination.

DYKE - A tabular intrusive igneous rock that cuts across or along pre-existing
country rock.

EQUIVALENT OUNCES - Silver or copper metal dollar credits from production
expressed as ounces of gold by dividing the dollar credits by the price of
gold.

FLOTATION - A milling process by which some mineral particles are induced to
become attached to bubbles of froth and float, and others to sink so that the
valuable minerals are concentrated and separated from the worthless gangue.

FOOTWALL - The mass of rock beneath a geological structure (orebody, fault,
etc.).

GANGUE - Valueless rock or mineral aggregates in an ore which cannot be
avoided in mining.

GRADE - The amount of valuable mineral in each ton of ore, expressed as troy
ounces per ton for precious metals and as a percentage for other metals.

      CUTOFF GRADE:  The minimum content level at which an orebody can be
      economically mined.

      MILL HEAD GRADE:  Metal content of mined ore going into a mill for
      processing.

      RECOVERED GRADE:  Actual metal content recovered from the ore.

      RESERVE GRADE:  Estimated metal content of an orebody, based on reserve
      calculations.

HANGING WALL - The wall of rock on the upper side of a geological structure
(orebody, fault, etc.).

HEAP LEACHING - A low-cost process in which ore is placed in a large heap on
an impermeable pad.  A weak cyanide solution is sprinkled or dripped over the
heap and is collected at the bottom after percolating through the ore and
dissolving the metals.

HYPOGENE ZONE - Ores, or mineralized material, formed by upward moving
enrichment process, typically found beneath the supergene.

METRIC CONVERSION -

1 acre  =  0.405 hectare
1 foot  =  30.48 centimeters
1 mile  =  1.609 kilometers
1 ton  =  0.907 tonne
1 troy ounce  =  31.103 grams
1 ounce per ton  =  34.285 grams per tonne

MILL - A plant where ore is ground fine and undergoes physical or chemical
treatment to extract or upgrade the valuable metals.

MINEABLE ORE RESERVES - Ore reserves which include allowances for dilution in
mining and take into account losses which are likely to occur in mining.  All
ore reserves reported by Royal Oak Mines Inc. are mineable ore reserves.

MINERAL DEPOSIT - A deposit of mineralization which may or may not be ore, the
determination of which requires a comprehensive feasibility study.

MINERAL INVENTORY - Proven ore reserves plus probable ore reserves plus
mineralized material.

MINERALIZATION - Rock containing minerals or metals of economic interest.

MINERALIZED MATERIAL - A natural aggregate of one or more minerals which
either is not sufficiently delineated as to size, tonnage and grade or, even
if so delineated, cannot be economically extracted at the time of the reserve
determination and, accordingly, cannot be classified as mineable ore reserves.

OPT - Ounces per ton.

ORE - Mineralization that can be mined at a profit under existing economic
conditions.

OREBODY - A mineral deposit that can be mined at a profit under existing
economic conditions.

ORE RESERVES - The tonnage and grade of an economically and legally
extractable orebody.

OXIDE ORE - Ore subjected to weathering and oxidation of primary minerals.

PILLAR - A column of ore or waste remaining after primary extraction.

PORPHYRY - An igneous rock in which a number of mineral crystals are
conspicuously much larger than the majority of the crystals which make up the
rock.  These large crystals are often of the mineral feldspar.  Prophyry
copper and gold deposits are mineral deposits hosted in large intrusive
igneous bodies made up of porphyritic rock.  These deposits usually contain
very fine disseminations of minerals containing gold and copper.

PROBABLE ORE RESERVES - Ore reserves that have reasonable geologic continuity
but cannot be considered proven because inspection and measurement locations
are not detailed enough to estimate accurately the size, shape, and mineral
content of the body.  The degree of assurance, although lower than that for
proven reserves, is high enough to assume continuity between points of
observation.

PROVEN ORE RESERVES - Ore reserves that can be accurately estimated by
establishing the size, shape, and mineral content of an orebody by inspection
and closely spaced samples.

PYRITE - A common sulphide mineral, shiny and yellow in color and composed of
sulphur and iron, sometimes known as "fool's gold".

RAISE - A vertical hole between mine levels used to move ore or waste rock or
to provide ventilation.

RAMP - An inclined underground tunnel which provides access for exploration or
a connection between levels of a mine.

RECOVERY PERCENTAGE - A measurement of the efficiency of milling which
expresses the amount of metal recovered as a percentage of the metal included
in the ore which was sent into the milling circuit.

REFINING - The final stage of metal production in which impurities are removed
from the molten metal.

RESOURCE - Mineralization based on geological evidence and assumed continuity.
May or may not be supported by samples but is supported by geological,
geochemical, geophysical or other data.

ROASTING - The treatment of ore by heat and air, or oxygen enriched air, in
order to remove sulphur and arsenic and other volatile elements.

SEMI-AUTOGENOUS MILL ("SAG") - A large-diameter grinding mill utilizing a
combination of steel balls and the rock itself to grind ore from a coarse feed
size to a relatively small particle size.

SHAFT - A vertical or steeply inclined opening providing access to a mine for
equipment, personnel and supplies and to hoist out ore and waste.  It can also
be used for ventilation and as an auxiliary exit from the mine.

SHRINKAGE STOPING - A stoping method which uses part of the broken ore as a
working platform and as support for the walls of the stope.

SPLAY - A fracture, fault or vein which splits off of a larger fracture, fault
or vein.

STOPE - An excavation in a mine from which ore is being, or has been,
extracted.

STRIP RATIO OR STRIPPING RATIO - The ratio of waste tons mined to total tons
mined.

SULPHIDE ORE - Mineralization where the metal content is combined with
sulphur.

SULPHIDES - Compounds of sulphur with other metallic elements.

TAILINGS - The material that remains after all metals considered economic have
been removed from ore during milling.

TAILINGS POND - Containment area used to deposit tailings from milling.

TONS - Short tons.  Two thousand pounds.

TPD - Tons per day.

                      GLOSSARY - SELECTED FINANCIAL TERMS

CASH COST PER OUNCE - Includes all site operating expenses, but excludes
capital and exploration expenditures, depreciation, post-closure restoration
accruals, finance and corporate administrative expenses; divided by ounces
produced.  Cash costs has the same meaning, except not on a unit production
basis.

CASHFLOW - A measure of the fiscal strength of a business.  The net of the
inflow and outflow of cash during an accounting period.  Does not include
depreciation, amortization, or other items which do not involve an actual cash
outlay.

CONTANGO - Contango on gold is the positive difference between the spot market
gold price and the forward market gold price.  It is often expressed as an
interest rate and is the difference between inter-bank deposit rates and gold
lending rates.

FORWARD SELLING - An agreement to sell a certain quantity of future production
at a set future date at a predetermined price.

GOLD LOANS - An agreement in which a company may sell gold borrowed from
another party, usually a bank, and repay the borrowed gold with its own
production in the future.  Normally, these loans are used to finance project
development or to hedge future production.

GOLD REVENUE PER OUNCE - Total revenues received from gold sales, divided by
the number of ounces sold.  Gold revenues are the result of spot sales and
hedging activities.

LIBOR - London Interbank Offered Rate.

RATIO OF DEBT TO EQUITY - A measure of the total of a company's financial
strength which illustrates how much of the funds it uses were borrowed
compared with the total of how much was invested by shareholders plus earnings
retained by the company.  Formula for the Company: (total debt/total debt
plus total shareholders' equity).

RETURN ON AVERAGE EQUITY - How much a company earns with the money invested by
shareholders and on earnings retained in the business.  Simple formula:
Average equity  =  total of shareholders' equity at the beginning of the year
and at the end of the year divided by two.  Return =  (earnings/average
equity) x 100.

SPOT DEFERRED CONTRACT - A spot deferred contract is similar to a forward sale
except the company has the option to extend the contract (roll it over).  The
ultimate delivery date and sale price are not fixed on the contract.  If it is
rolled over, the new contract price is based on the price at maturity of the
old contract plus a contango premium on the rollover date.

SPOT SALES - Transactions in which gold is sold for cash.  The value date is
two business days in the future at which time gold is transferred to the buyer
and currency is sent to the seller.

WORKING CAPITAL - Current assets less current liabilities.

WORKING CAPITAL RATIO - The higher the ratio, the stronger the company's
liquidity.  Formula: (current assets/current liabilities).

                                    PART I

ITEM 1 - BUSINESS

Royal Oak is a major North American gold mining company which has produced in
excess of 50 million ounces of gold over a 60-year period.  The Company, which
owns and operates five producing gold mines, is in the process of expanding one
producing mine and is developing four major new projects.  The Company has
extensive land positions in Canada covering approximately 640,000 acres, as
well as over 7,000 acres in the United States, which provide it with the
opportunity to expand its reserves through focused exploration and
development.  As of and for the fiscal year ended December 31, 1996, Royal
Oak had approximately 9.9 million ounces of mineable gold reserves and
produced 389,203 ounces of gold.

The Company's five producing gold mines consist of the Colomac and Giant Mines
in the Northwest Territories, the Pamour and Nighthawk Mines in Ontario and
the Hope Brook Mine in Newfoundland.  Through acquisitions, exploration and
the implementation of more advanced and efficient mining methods, the Company
has increased its annual production from 194,952 ounces of gold in 1991 to
389,203 ounces of gold in 1996.  The Company conducts a focused exploration
program to develop additional mineable ore reserves in close proximity to its
existing mines in order to maximize the utilization of its processing
facilities and to increase processing efficiencies.  In 1996, the Company's
exploration efforts resulted in the addition of approximately 1.1 million
ounces of mineable gold reserves, net of reserve write-downs.  A significant
part of this exploration program was focused on the Pamour Mine open pit
expansion.

As of December 31, 1996, the Company employed 1,422 people, of which 987 are
represented by one of two unions.  The Company's principal executive offices
are located at 5501 Lakeview Drive, Kirkland, Washington 98033.  Its telephone
number is (206) 822-8992 and its fax number is (206) 822-3552.

Corporate Structure at March 17, 1997

Royal Oak Mines Inc.                                              Parent
10502 Newfoundland Ltd.                                           Wholly-owned
3199493 Canada Inc.                                               Wholly-owned
934962 Ontario Inc.                                               Wholly-owned
Arctic Precious Metals, Inc. (doing business as Royal
  Oak Mines (USA) Inc.) and its wholly-owned subsidiary,
      Oz Investments, Inc.                                        Wholly-owned
Beaverhouse Resources Limited                                     Wholly-owned
El Condor Resources Ltd.                                          Wholly-owned
Consolidated Professor Mines Limited                              Wholly-owned
Kemess Mines Inc. (formerly Geddes Resources Limited)             Wholly-owned
Royal Oak Hope Brook Ltd.                                         Wholly-owned
Royal Oak Timmins Ltd.                                            Wholly-owned
Royal Oak Yellowknife Ltd.                                        Wholly-owned
St. Philips Resources Inc. and its subsidiaries                   Wholly-owned
Witteck Development Inc.                                          Wholly-owned
Ronnoco Gold Mines Limited                                        89% owned
Northbelt Yellowknife Gold Mines Ltd.                             72% owned
Royal Eagle Exploration Inc. and its wholly-owned
      subsidiary, First Eagle Holdings, Inc.                      60% owned

In addition, the Company has certain strategic investments (see "Strategic
Investments").

HISTORY

The Company came into existence on July 23, 1991 as a result of the
amalgamation of five companies: Giant Yellowknife Mines Limited, Pamour Inc.,
Pamorex Minerals Inc., Royal Oak Resources Ltd., and Akaitcho Yellowknife Gold
Mines Limited, certain of which commenced operations approximately sixty years
ago.  As a result of this amalgamation, the Company had two operating mines,
Pamour and Giant.  On January 1, 1992, the Company amalgamated with its
wholly-owned subsidiary, Supercrest Mines Limited.  In addition to its wholly-
owned subsidiaries, the Company has a majority interest in three companies,
Ronnoco Gold Mines Limited, Northbelt Yellowknife Gold Mines Limited and Royal
Eagle Exploration Inc.

Since 1991, Royal Oak has acquired the following properties and interests:

-     the Broulan property in Ontario from Balmoral Mines Ltd. (1991);
-     a 20% (13.4% at December 31, 1996) interest in Athabaska Gold Resources
      Ltd. (1991-1993);
-     the Hope Brook Mine in Newfoundland from Hope Brook Gold Inc. (1992);
-     the Colomac Mine in the Northwest Territories (and an existing royalty
      interest) from Neptune Resources Corp. (1993);
-     a controlling interest in Kemess Mines Inc. (formerly Geddes Resources
      Limited) from Neptune Resources Corp. (1993);
-     an option in respect of the Kim-Cass property in the Northwest
      Territories from Echo Bay Mines Ltd., Comaplex Minerals Corp. and
      Petromet Resources Limited (1994);
-     the Red Mountain property in British Columbia from Barrick Gold
      Corporation (1995);
-     the Nicholas Lake gold property in the Northwest Territories from
      Athabaska Gold Resources Ltd. (1995);
-     an 89.4% interest in Ronnoco Gold Mines Limited, thereby providing the
      Company with a land position on the Nighthawk Lake Break in Ontario
      (1995-6);
-     a leasehold interest in the Copperstone property located in Arizona
      (1995);
-     all of the outstanding shares of Geddes, El Condor Resources Ltd. and
      St. Philips Resources Inc., thereby acquiring the Kemess property in
      British Columbia (1996);
-     all of the outstanding shares of Consolidated Professor Mines Limited,
      thereby acquiring the Duport property in Ontario (1996); and
-     the Cape Ray gold property in Newfoundland from American Gem Corporation
      and the net smelter return royalty on the property from Homestake Canada
      Inc. (1996).

STRATEGIC INVESTMENTS

ASIA MINERALS CORP.

In November 1993, the Company formed a strategic alliance with Asia Minerals
Corp. ("Asia Minerals") to identify and acquire gold mining properties in
China.  The Company purchased an initial 32% interest for $2 million.  In
1996, the Company increased its interest in Asia Minerals to 44.2% by
exercising options and by purchasing $2.8 million of additional equity.

Asia Minerals is active in mineral exploration in China.  In December 1995,
Asia Minerals signed a joint venture contract (the "Joint Venture Contract")
to acquire a 50% interest in the Yingezhuang gold mine located in Shandong
Province, China.  The Chinese partner is Zhaoyuan City Gold Corp.  The Joint
Venture Contract requires the approval of the Chinese Ministry of Foreign
Trade and Economic Cooperation ("MOFTEC").  MOFTEC's review is in progress.
Asia Minerals anticipates that MOFTEC will approve the Joint Venture Contract,
but there can be no assurance that such approval will be given or that it will
be given by a specific date or on conditions acceptable to Asia Minerals or
Zhaoyuan City Gold Corp.

The Yingezhuang gold mine began production in 1992.  In 1996, the mine
produced 15,000 ounces of gold at a total cost of US$199 per ounce.  The
proven and probable ore reserves and mineralized material of the Yingezhuang
mine total 21.48 million tons at a grade of 0.082 opt of gold for a gold
content of 1.78 million ounces.  This total includes probable ore reserves of
8.29 million tons for a gold content of approximately 670,000 ounces.

Asia Minerals can earn a 50% interest in the Yingezhuang joint venture by
making staged investments in the project.  The first stage requires Asia
Minerals to fund a US$3.5 million mine expansion feasibility study.  The total
investment required to earn a full 50% interest is estimated to be US$36
million.  In mid-1996, Asia Minerals commenced the mine expansion feasibility
study and production optimization plan at the Yingezhuang gold mine.  The
objective is to increase annual gold production from the 15,000 ounces
produced in 1996 to approximately 90,000 ounces of gold.  The production
capacity of the mine would be increased from 550 to about 2,500 tpd of ore.  A
10,000 meter drilling program is included in this plan to upgrade mineralized
material in the Central Zone of the No. 2 orebody to probable ore reserves.

Asia Minerals has a Strategic Alliance Agreement with the Zhaoyuan Industrial
Gold Group to jointly explore and develop gold projects in Shandong Province,
the largest gold producing region in China.  The province accounts for 25% of
China's annual gold production and it contains about 33% of the country's
known reserves.  Other targets include the acquisition and exploration of
additional gold projects in Shandong Province, other regions in China and in
the Philippines.

Asia Minerals also signed an agreement to jointly explore for gold in the
Muping-Rushan region of Shandong Province covering about 800 square
kilometers.  This region lies about 125 kilometers to the east of the
Yingezhuang gold mine and is the second largest gold producing area in
Shandong.  The Denggezhuang and Rushan deposits located in this region each
contain over one million ounces of gold at a grade of approximately 0.290 opt.
However, there can be no assurance that Asia Minerals will identify mineral
deposits on its property or that it will find mineral deposits of sufficient
quality and/or quantity to be mined profitably.  See "Special Note Regarding
Forward-Looking Statements".

A further agreement was signed to explore a 600 square kilometer area for new
gold discoveries in the South Qilian Mountains in northwest China.  A recent
survey has identified several areas of pronounced gold mineralization and
discovered significant new gold geochemical anomalies.  Placer gold occurs
throughout the project area and is mined on a small scale.  Geological zones
have the potential to host very large scale gold deposits.

In January 1997, Asia Minerals acquired new gold exploration concessions in
the highly prospective, but poorly explored, West Kunlun Shan (covering 15,000
square kilometers) and Altay Shan (covering 3,000 square kilometers) ranges in
Xinjiang Province, China.  Gold deposits in similar geological strata
immediately across the border in Kirghistan, Uzbekistan and Kazakhstan
indicate that both concessions have excellent exploration potential.  However,
there can be no assurance that Asia Minerals will identify mineral deposits on
its property or that it will find mineral deposits of sufficient quality
and/or quantity to be mined profitably.  See "Special Note Regarding Forward-
Looking Statements".

HIGHWOOD RESOURCES LTD.

In March 1996, Mountain Minerals Co. Ltd. ("Mountain Minerals") completed the
purchase of Conwest Exploration Company Limited's 34.7% interest in Highwood
Resources Ltd.("Highwood") for $3.4 million.  In August, through a Plan of
Arrangement, Highwood acquired all of the outstanding shares of Mountain
Minerals. The companies combined and continued under the name of Highwood
Resources Ltd.  The industrial minerals activities continue under the trade
names of Mountain Minerals and Limeco Products.  The Company currently has a
38.6% interest in Highwood.

Mountain Minerals produces and markets industrial minerals including barite,
silica, limestone and gypsum products, and zeolites.  In 1996, production of
barite and silica were at similar levels to those of 1995.  The Chinese barite
plant is operating satisfactorily and supplies high brightness barite filler
and extender products to Asian markets.  New markets are being developed in
order that the plant can operate at full capacity.  Production of limestone
increased from the 1995 level while gypsum production was slightly lower.
Increased production of zeolite in 1996 reflected the transition from product
development to commercial production.  Revenue of $12.4 million in 1996
increased approximately 6% from 1995 while cash flow from operations of $1.3
million was unchanged.

Highwood plans to develop the Thor Lake beryllium property on which $12
million has been spent.  Underground and surface exploration, metallurgical
testwork, and a feasibility study in the late 1980's established a mineral
inventory of approximately 500,000 tons grading 1% beryllium oxide and process
technology for recovery of a marketable beryllium product.  Currently the
feasibility study is being updated to take into account recent developments in
the beryllium and specialty metals industry.  Bulk samples have been taken
from surface for further metallurgical testwork and market development
studies.

Highwood is aggressively looking for business opportunities overseas and in
April 1996 opened an acquisitions office in China.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The Company operates in one dominant industry segment, gold mining, carried
out in the Northwest Territories and the Provinces of Ontario and Newfoundland
in Canada.

REVIEW OF OPERATIONS

RECORD GOLD PRODUCTION IN 1996
The Company produced a record 389,203 ounces of gold in 1996, an increase of
5% from the 371,151 ounces produced in 1995.

Gold production in 1996 included 53,995 ounces of recovered silver (55,537
ounces in 1995) expressed as 723 ounces of gold equivalent (758 ounces in
1995).

Copper production in 1996 was 1,558,155 pounds in concentrates, 355,622 pounds
or 30% more than the 1,202,533 pounds produced in 1995.  The concentrate is
shipped to a smelter for processing.  Revenue from the sale of the concentrate
is credited to minesite cash costs.

Average cash costs decreased by 4% from US$358 per ounce in 1995 to US$343 per
ounce in 1996.

On a per-ton of ore milled basis, production costs decreased from C$32.79 per
ton in 1995 to C$31.50 per ton in 1996, a decline of 4%.

Production in 1997 is forecast at approximately 375,000 ounces of gold at an
estimated cash cost of US$325 per ounce.  See "Special Note Regarding Forward-
Looking Statements".


<TABLE>

 PRODUCTION, RESERVES AND COST DATA
 ----------------------------------------------------------------------------------------------
                                    1996          1995          1994          1993         1992
 ----------------------------------------------------------------------------------------------
 <S>                          <C>           <C>           <C>           <C>          <C>
 PRODUCTION:
 Ore milled (tons)             5,772,771     5,556,450     3,992,472     2,892,891    2,160,230
 Recovered gold and              389,203       371,151       318,171       276,320      245,469
 equivalent (oz)
 TOTAL MINERAL INVENTORY:
 Mineable ore reserves(oz      9,875,000     9,263,000     2,516,000     2,682,000    2,133,000
 gold)
 Mineralized material (oz      7,384,000     6,303,000     3,969,000     2,327,000    2,381,000
 gold)
 Total mineral inventory
  (oz gold)                   17,259,000    15,566,000     6,485,000     5,009,000    4,514,000
 COSTS:
 Operating cost/ton                31.50         32.79         39.17         38.27        41.74
 milled(C$/ton)
 Cash cost (US$/oz)                  343           358           311           311          304
 Depreciation and                     45            29            22            14           14
 amortization (US$/oz)
</TABLE>


                        NORTHWEST TERRITORIES DIVISION

COLOMAC MINE
<TABLE>

 Production, Reserves and Cost Data
 ----------------------------------------------------------------------------------------------
                                                     1996        1995         1994         1993
 ----------------------------------------------------------------------------------------------
 <S>                                            <C>         <C>          <C>            <C>
 PRODUCTION:
 Ore milled (tons)                              3,013,156   2,725,388      985,091           --
 Head grade (oz/ton)                                0.046       0.047        0.047           --
 Recovery (%)                                       87.30       92.34        87.10           --
 Recovered gold & equivalent (oz)                 122,416     117,646       40,568           --
 TOTAL MINERAL INVENTORY:
 Mineable ore reserves(oz gold)                   261,000     711,000      694,000      709,000
 Mineralized material (oz gold)                   237,000     260,000      467,000      179,000
 Total mineral inventory (oz gold)                498,000     971,000    1,161,000      888,000
 COSTS:
 Operating cost/ton milled (C$/ton)                 20.51       22.72           --           --
 Cash cost (US$/oz)                                   370         383           --           --
 Depreciation and amortization (US$/oz)                66          46           --           --

 Note: In 1994, revenue from production at Colomac was netted against start-up costs and
 deferred as pre-production expenses.
</TABLE>

At the Colomac Mine gold production increased by 4% in 1996 to 122,416 ounces
compared to 117,646 ounces in 1995.  This improvement is attributable to an
11% increase in mill throughput.  The overall grade of 0.046 opt gold was
comparable to the 1995 grade.  Mill recovery for 1996 was 87.30% compared to
92.34% in 1995 and in part the decrease reflected the increase in mill
throughput.

Further drilling in the lower part of the orebody was completed and an
improved block model was developed to reconcile reserves with actual
production.  This resulted in a reserve reduction of 188,000 ounces of gold.

The Colomac Mine continued to successfully operate as a zero discharge
facility.  The total volume of fresh water consumed for all industrial
purposes at the Colomac mine site has been reduced by approximately 75% since
1994 through increased use of recycled water from the tailings impoundment.

The all-weather road between Colomac and the Kim/Cass pits was completed
during the fourth quarter.  However, the Company had to abandon planned mining
of the Kim pit due to high lake water that encroached inside the ultimate pit
limit.  Because of this environmental concern the Company excluded the Kim pit
reserves of 187,448 ounces from the total reserve base until such time as a
satisfactory solution is found.  The Cass pit does not impact on lake waters
and is included in the 1997 mining plan.  With the Cass ore having an average
grade of 0.075 opt gold, the overall mill feed grade at Colomac is expected to
be approximately 0.047 opt gold in 1997.

Gold production at Colomac in 1997 is forecast at approximately 125,000 ounces
at an estimated cash cost of US$365 per ounce.  See "Special Note Regarding
Forward-Looking Statements".

The Company has budgeted for a $2.0 million exploration program at Colomac and
its surrounding properties in 1997.  The program will focus on drill testing
for underground mineable ore.

GIANT MINE

<TABLE>
 Production, Reserves and Cost Data
 ----------------------------------------------------------------------------------------------
                                           1996        1995        1994        1993        1992
 ----------------------------------------------------------------------------------------------
 <S>                                 <C>         <C>         <C>         <C>         <C>
 PRODUCTION:
 Ore milled (tons)                      367,421     410,966     430,238     413,098    395,018
 Head grade (oz/ton)                      0.262       0.254       0.264       0.264      0.286
 Recovery (%)                             86.46       86.73       86.95       85.86      84.12
 Recovered gold and equivalent           83,385      91,423     101,176      92,948     95,878
 (oz)
 TOTAL MINERAL INVENTORY:*
 Mineable ore reserves(oz gold)         702,000     826,000     763,000     840,000    899,000
 Mineralized material (oz gold)       1,324,000   1,317,000   1,313,000   1,331,000  1,326,000
 Total mineral inventory (oz gold)    2,026,000   2,143,000   2,076,000   2,171,000  2,225,000
 COSTS:
 Operating cost/ton milled(C$/ton)       110.34      100.59       92.71       95.86      95.06
 Cash cost (US$/oz)                         357         329         289         330        324
 Depreciation and amortization               14          10          11           9         14
 (US$/oz)

 *1995 and 1996 reserves include Nicholas Lake.

</TABLE>

The Giant Mine has been in production since 1948 and has produced more than
7.5 million ounces of gold.

In 1996 gold production decreased to 83,385 ounces as technical difficulties
impacted the underground operations.  Production was 9% lower than the 91,423
ounces of gold produced in 1995.  Tonnages milled were also reduced by 11% to
367,421 tons from a 1995 total of 410,966 tons.  These production shortfalls
were due to the difficulty in accessing the higher grade ore zones north of
the main workings.  Mining of small, low grade stopes increased and added to
the difficulty of achieving targeted production levels.  Gold recovery was
86.46% in 1996, similar to recovery in 1995.

Throughout 1996, major programs focused on accessing the higher grade
Supercrest, Lower B, LAW and C Zones.  The new 1500 Level tram reached its
targeted capacity by the end of the year when higher grade ore from the
Supercrest area became available on a consistent basis.  In 1997, these
higher-grade development headings are expected to increase the average mill
head grade.  See "Special Note Regarding Forward-Looking Statements".

Cash costs of US$357 per ounce of gold were 9% higher than US$329 per ounce
experienced in 1995.  On a per ton of ore basis, the operating cost of
C$110.34 per ton was 10% higher than in 1995.  Higher milling costs resulted
from low sulphur ore which has a deleterious effect on roaster feed.  A
detailed metallurgical testing program led to recovery improvements in the
third quarter.  Mill improvements identified in the test program included
optimization of the flotation and carbon circuits, and several mechanical
changes.  In 1996, an electric power management system was implemented and is
expected to reduce power consumption by 20% by the second quarter of 1997.
See "Special Note Regarding Forward-Looking Statements".  Because of the high
cost of power (approximately 12 cents/kWh), the Company is evaluating other
alternatives for generating power at the mine.

The effluent treatment plant at Giant operated in substantial compliance with
the mine s water use license and the Company continued to work in cooperation
with the N.W.T. government on reducing ground level concentrations of sulphur
dioxide in the Yellowknife area resulting from operation of the roaster
facility.  The Company's Water Use License expires in 1998 and the permitting
process for renewal will commence in the second quarter of 1997.

A successful personnel recruiting effort, combined with completion of the 1500
Level tram and higher-grade development headings, are expected to increase
production at the Giant Mine in 1997.  See "Special Note Regarding Forward-
Looking Statements".

Production in 1997 is forecast at 90,000 ounces of gold at an estimated cash
cost of US$315 per ounce of gold.  See "Special Note Regarding Forward-Looking
Statements".

                               ONTARIO DIVISION

<TABLE>
 Production, Reserves and Cost Data
 ------------------------------------------------------------------------------------------
                                     1996          1995        1994        1993        1992
 ------------------------------------------------------------------------------------------
 <S>                            <C>           <C>         <C>         <C>         <C>
 PRODUCTION:
 Ore milled (tons)              1,381,665     1,329,846   1,350,007   1,330,722   1,224,797
 Head grade (oz/ton)                0.086         0.067       0.069       0.072       0.089
 Recovery (%)                       87.60         90.20       89.20       89.60       90.10
 Recovered gold and               104,577        80,120      85,755      87,346      98,898
 equivalent (oz)
 TOTAL MINERAL INVENTORY:*
 Mineable ore reserves (oz      3,993,000     2,656,000     716,000     386,000     378,000
 gold)
 Mineralized material (oz       3,278,000     1,885,000   1,712,000     506,000     719,000
 gold)
 Total mineral inventory        7,271,000     4,541,000   2,428,000     892,000   1,097,000
 (oz gold)
 COSTS:
 Operating cost/ton milled          30.06         30.29       28.34       26.25       30.25
 (C$/ton)
 Cash cost (US$/oz)                   291           368         327         310         310
 Depreciation and                      53            20          37          20          15
 amortization (US$/oz)

 *Reserves include Pamour Mine, Nighthawk Mine, Matachewan, Nighthawk Lake properties, and
 Duport project.
</TABLE>

The Pamour Mine is located approximately 15 miles east of the City of Timmins,
Ontario and has been in production for 60 years since operations commenced in
1936.  During this period the mine has produced more than four million ounces
of gold.  Total gold production from Royal Oak's properties in the Timmins
gold camp exceeds 43 million ounces.

The 4,000 tpd capacity mill at Pamour processes ore from the Pamour
underground mine, the two Pamour open pits, the adjacent Hoyle underground
mine and the Nighthawk underground mine.

In 1996, gold production at the Pamour mill increased to a record 104,577
ounces, an increase of 31% from the 80,120 ounces produced in 1995.
Production from the Pamour and Hoyle underground operations accounted for
45,102 ounces, and the Pamour open pits for 28,260 ounces.  The Nighthawk Mine
produced 31,215 ounces of gold.

A record 1,381,665 tons of ore were milled in 1996.  This was 4% higher than
the 1,329,846 tons milled in 1995.  In 1996, mill head grade increased by 28%
to 0.086 opt gold from 0.067 opt in 1995.  This increase resulted from
processing higher grade ore from the Nighthawk Mine which reached full
production early in the year, and from mining higher grade ore from the Hoyle
underground operation where development was accelerated into areas of higher
grade ore in the second quarter of the year.

Gold recovery of 87.60% was 3% lower than the recovery of 90.20% recorded in
1995, due in part to the higher throughput.  A number of operating
improvements will be implemented in 1997 that are expected to increase mill
recoveries to former levels.  A major electrical conversion from 25 cycle to
60 cycle power was completed in the mill which included the installation of
more efficient electric motors and switchgear.

In 1996, cash costs decreased by 21% to a record US$291 per ounce of gold from
US$368 per ounce in the previous year.  This significant decrease is mainly
attributable to the impact of mining and processing higher grade ores.  The
operating cost of C$30.06 per ton of ore milled was marginally lower than in
1995.  Cost savings have been realized underground at Pamour by changing the
mining method in some stopes from sub-level retreat to blasthole open stoping.
In the open pits, the purchase of additional trucks and shovels has improved
loading and haulage efficiencies and has resulted in cost savings.

In 1997, production at the Pamour Mine is budgeted at approximately 110,000
ounces of gold at an estimated cash cost of US$285 per ounce.  See "Special
Note Regarding Forward-Looking Statements".

NIGHTHAWK

The Nighthawk Mine is located 10 miles from the Pamour mill which processes
ore from the mine.  The mine was operated between 1924 and 1927 and produced
99,628 tons of ore grading 0.32 opt of gold.  Royal Oak developed the
Nighthawk Mine, placing it into production in September 1995.  Full production
of 750 tpd was attained in May 1996.  In 1996, the Nighthawk Mine produced
31,215 ounces of gold from 260,470 tons of ore.

The orebody is accessed by ramp which was driven from 450 feet to 625 feet
below surface during the year.  The Company plans ultimately to extend the
ramp to 750 feet below surface.  In addition, 8,654 feet of lateral
development was completed during the year.  Mining methods for this
underground mine are primarily longhole open stoping, with 50 feet between
sublevels.

The three principal ore zones, the Main Zone, 1 Zone and 4 Zone, have been
developed on the upper levels with the largest tonnage of ore being mined in
the Main Zone.  The Ramp Zone, located 500 feet along strike from the Main
Zone, is currently being drilled to establish continuity within the zone and
to explore the potential between the Ramp Zone and the Main Zone.

The mineral inventory at the Nighthawk Mine at the end of 1996 was 1.246
million tons grading 0.148 opt of gold.  In 1997, 10,000 feet of drilling is
planned in order to upgrade 400,000 tons from mineralized material to mineable
ore and to further investigate the potential of the deposit at depth.

An effluent treatment plant was installed at the mine to manage un-ionized
ammonia levels contained in the ground water pumped from the mine.

PAMOUR EXPANSION

At the Pamour Mine, low grade mineralization surrounds the higher grade bulk
stopes and has been drilled to examine the potential for large scale open pit
mining.

The results of recent drilling programs have been included in a geological
database which contains data from over 60 years of exploration, development
and production.  Drilling has outlined over 2,628,000 ounces of gold in open
pit reserves with further potential still to be tested to depth and along
strike.  This new reserve represents an increase of 1.2 million ounces of gold
over the Pamour 1995 year-end mineable reserves and a projected mine life of
approximately 20 years.  See "Special Note Regarding Forward-Looking
Statements".  Three surface drills and two underground drills were employed on
the open pit (now called 60 Pit) program in 1996, drilling over 242,000 feet
in 388 holes.

Preliminary studies indicate that there is sufficient geological potential for
open pit ore, when supplemented with ore from the Hallnor, Pamour, Nighthawk
and Ronnoco properties, to justify construction of a new 15,000 tpd mill.  A
feasibility study is being carried out to optimize the design of 60 Pit and to
determine the most economic production scheduling of underground and open pit
mining at the Company's Timmins operations.

The initial phases of development have commenced as drilling continues on 60
Pit.  Computerized modeling, mine planning, environmental baseline studies,
preliminary engineering of the mill and pre-stripping of the pit are all
underway.  Ore from 60 Pit and the other sources is scheduled to be processed
in the new 15,000 tpd mill in the fourth quarter of 1999.


                             NEWFOUNDLAND DIVISION

HOPE BROOK MINE

<TABLE>

 Production, Reserves and Cost Data
 -------------------------------------------------------------------------------------------
                                        1996        1995        1994        1993        1992
 -------------------------------------------------------------------------------------------
 <S>                              <C>         <C>         <C>         <C>         <C>
 PRODUCTION:
 Ore milled (tons)                 1,010,529   1,090,250   1,227,136   1,149,071     540,415
 Head grade (oz/ton)                   0.087       0.090       0.089       0.101       0.109
 Recovery (%)                          89.83       84.43       82.10       82.48       86.17
 Recovered gold and equivalent        78,825      81,962      90,672      96,026      50,693
 (oz)
 TOTAL MINERAL INVENTORY:
 Mineable ore reserves (oz            63,000     215,000     343,000     746,000     856,000
 gold)
 Mineralized material (oz gold)      104,000     399,000     477,000     311,000     336,000
 Total mineral inventory (oz         167,000     614,000     820,000   1,057,000   1,192,000
 gold)
 COSTS:
 Operating cost/ton milled             37.58       35.35       32.30       31.48       28.90
 (C$/ton)
 Cash cost (US$/oz)                      353         343         320         292         254
 Depreciation and amortization            37          32          23          13          10
 (US$/oz)
</TABLE>

The Hope Brook Mine experienced a difficult year as ground control problems
affected operations.  Gold production of 78,825 ounces was 4% less than the
81,962 ounces produced in 1995.  Both tonnage and grade were down by 7% and
3%, respectively, from 1995 results.  The mine operated continuously except
for a one week shutdown due to a sill pillar failure in the fourth quarter.

Mill recovery of 89.83% exceeded 1995 recovery of 84.43% by 6%.  The mill was
shut down as a cost saving measure for two months in the spring and for two
weeks in October because mining operations could not produce sufficient ore to
feed the mill continuously at full capacity.  During the mill shutdown ore was
stockpiled and major mill maintenance was completed.  Mill operations resumed
at full capacity during the remaining periods of the year by supplementing
mine feed with stockpiled material.

Cash costs of US$353 per ounce were 3% higher than 1995 costs of US$343 per
ounce.  Operating costs on a per-ton of ore milled basis increased in 1996 to
C$37.58 or 6% from C$35.35 in 1995.  This increase in cost reflects both the
difficult ground conditions experienced as the year progressed and the impact
of grinding harder ore in the mill.

In 1996, the Company purchased the Cape Ray deposit, located 37 miles west of
Hope Brook, which contains 500,000 tons grading 0.294 opt gold.  The drilling
program at Cape Ray during the year was designed to follow up on untested and
inadequately tested drill targets and to delineate open pit tonnages on the 51
Zone.  The drilling confirmed earlier indications of high grade material near
surface, however the high cost of transporting the ore to Hope Brook rendered
the project uneconomic.  As a result, the Cape Ray reserves have not been
included in the corporate total.

Considering the limited mine life at Hope Brook and the improved profitability
presented by the Matachewan project, the Company decided to shut down all
operations at Hope Brook in the third quarter of 1997 and to relocate
substantially all of the components of the facility to the Matachewan site in
Ontario.

In preparation for closure, reclamation plans for the Hope Brook mine site
have been updated and expanded in detail.  Plans for the reclamation of the
open pit, waste rock dumps, tailing impoundment areas and other surface
disturbances are in place ready for implementation beginning in the second
half of 1997.

In 1997, production at Hope Brook is forecast at 50,000 ounces at an estimated
cash cost of US$340 per ounce.  See "Special Note Regarding Forward-Looking
Statements".

FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES

Royal Oak currently does not carry on any operations for mining and treatment
of ore outside of Canada (other than through its interest in Asia Minerals and
Highwood).  The Company sells its gold production in US dollars which are
converted to Canadian dollars, the currency in which the majority of the
Company's costs are incurred.  The Company reports financial data in Canadian
dollars.  The Company has US$/C$ foreign currency hedge contracts in place,
the status of which are described in Note 12(c) to the Consolidated Financial
Statements.

EXPLORATION

Royal Oak's exploration strategy combines the close focus on satellite
deposits adjacent to the existing operations with the acquisition of advanced
stage development properties to ensure a steady supply of projects with the
potential to maintain long-term growth in gold production.

All exploration activities are managed out of the Company's Kirkland,
Washington corporate office.  In addition, the Company has an Eastern Canadian
office in Timmins, a Western Canadian office in Yellowknife, N.W.T. and a
British Columbia office in Smithers.

Exploration expenditures during 1996, including exploration activities at
operating mines, totaled $12.9 million with the primary focus on outlining
additional reserves proximate to the Company's mines.  With an exploration
budget of $10 million in 1997, the main exploration objective will be to
expand the reserves by 500,000 ounces of gold.  See "Special Note Regarding
Forward-Looking Statements".

MARKETING

The principal product produced at all the divisions is gold bullion dore bars
which are shipped to refineries for further refining.  Sales of the refined
gold are made to various banks and bullion dealers and are based both on
previously hedged prices and on spot market prices.  The dore bars also
contain silver which is separated from the gold in the refining process and
Royal Oak is credited with the silver content at spot market rates.  The
silver credit amounts to approximately 55,000 ounces of silver per year.

U.S. dollar proceeds generated through the sale of gold bullion are converted
to Canadian dollars and are based primarily on the exchange rate in effect at
the date of conversion.

The Company engages in hedging transactions to minimize the impact of
fluctuations in gold, oil and foreign currency prices.  The credit risk
related to hedging activities is limited to the unrealized gains on
outstanding contracts based on current market prices.  The Company has also
limited credit risk by dealing with large credit-worthy institutions and by
limiting credit exposure to each.  See Note 12(c) of the Consolidated
Financial Statements for the particulars on the Company's hedging activities.

Benchmark prices for gold are generally based on the London gold market
quotations.  The following is a summary of London afternoon fixing prices (US$
per ounce) for gold bullion for each of the last five years:

<TABLE>
                               High               Low            Average
                            -------           -------            -------
 <S>                        <C>               <C>                <C>
 1996                       $414.80           $367.40            $387.88
 1995                        395.55            372.40             384.07
 1994                        395.80            371.35             384.13
 1993                        405.60            326.10             359.82
 1992                        359.60            330.35             343.95
</TABLE>

ENVIRONMENTAL

The Canadian mining industry is subject to stringent environmental
regulations.  Government regulation of the industry requires extensive
monitoring activities and contingency planning.  All phases of the Company's
activities are subject to legislation from exploration through mine
development, and mine operations through decommissioning and reclamation.  In
1996 all of the Company's operations have continued to be in compliance in all
material respects with applicable environmental legislation.  There were no
environmental related legal proceedings pending against the Company in 1996.

The Hope Brook Mine operated in substantial compliance with the terms and
conditions contained in the mine's operating Certificate of Approval in 1996.
This Certificate is a perpetual certificate.  In December 1995, the operation
failed to comply with effluent quality limits on a weighted monthly average
basis.  This non-compliance rose from a circuit upset which occurred over a
three day period.  Steps have been taken by management to respond to such
circuit upsets in a more timely fashion.  The Newfoundland Department of
Environment was advised of the non-compliance condition and of the action plan
initiated by the Company to prevent recurrence.  To the Company's knowledge,
no action has been taken at this time by the regulator.

The Pamour Mine and the Nighthawk Mine operated in substantial compliance with
all of the terms and conditions of their respective operating Certificates of
Approval in 1996.  Both of these certificates are perpetual.

In 1996, the Giant Mine operated in substantial compliance with all of the
terms and conditions of its Water Use License.  In response to a complaint
filed under the Northwest Territories Environmental Rights Act alleging
damages to vegetation to the northwest of the mine site, the Northwest
Territories government is considering draft regulations under the
Environmental Protection Act (Northwest Territories) that would control the
amount of permissible sulphur dioxide emissions from the Company's roaster
facility at the Giant Mine.  The Company has undertaken a cooperative program
with the regulators to evaluate the technical feasibility of such emission
controls and of the environmental and economic impact of such regulations on
the Giant Mine.  The federal government of Canada is considering the drafting
of new regulations under the Environmental Protection Act (Canada) that would
control the amount of permissible airborne arsenic emissions from the
Company's roaster facility at the Giant Mine.  The government is currently
assessing the socio-economic benefits and impacts that would accrue from
implementing new regulations in the area of airborne arsenic emissions.  The
Company's Giant roaster facility currently operates in compliance with all
existing environmental requirements.  On May 1, 1993, Royal Oak was granted a
five-year renewal of its license to use water at the Giant Mine to a new
expiry date of April 30, 1998.

The Colomac Mine operated in substantial compliance with all of the terms and
conditions of its Water Use License in 1996, which is effective through
February 1999.  The Company implemented measures to reduce fresh water
consumption in the Colomac Mill in compliance with new standards that came
into effect in 1996.

In 1996, the Company spent approximately $1.5 million on capital improvements
and $2.4 million on operations and maintenance for environmental matters.  The
Company expects to spend the same amount in 1997 for these matters with the
exception of Hope Brook.  Reclamation costs due to the closure of Hope Brook
are estimated to be $6.3 million in 1997.  A provision for this amount was
made in 1996.  The majority of the operating costs incurred are related to
effluent treatment plants at the Giant Mine and the Hope Brook Mine, as well
as increasing the height of tailings pond dykes at the Pamour Mine.

The Company recognizes that it has a responsibility to operate in a manner
that minimizes the impact of its mining operations on the environment.  To
this end, the Company upgrades its policies and practices on a continuing
basis with a view to surpassing regulatory guidelines.  In 1994, the Company
instituted an Environmental Code of Practice which established principles
under which the Company manages the environmental performance of its
operations.  These principles encompass compliance with all applicable
statutory legislation, minimizing risk to the environment, self monitoring of
environmental protection management programs, and communicating effectively
with governments and the public on environmental protection matters.  In 1996,
the Company commenced development of a formal environmental management system,
including periodic internal audits and reporting of results, based on
standards developed by the Canadian Standards Association.

RECLAMATION

Where feasible, reclamation is conducted by the Company concurrently with
mining.  In general, the Company is required to mitigate long-term
environmental impacts by stabilizing, contouring, resloping and revegetating
various portions of a site once mining and mineral processing operations are
completed as well as by appropriately managing residual waste.  These
reclamation activities are conducted in accordance with detailed plans which
have been reviewed and, where applicable, approved by the appropriate
regulatory agencies.  In Ontario, the Northwest Territories and British
Columbia, the Company is required to post security against all or part of the
estimated cost of such reclamation and has done so.  The Company has completed
and filed reclamation plans for all of its active operations.  Reclamation
plans have also been prepared for most of the Company's inactive sites and
reclamation is well advanced on many of these sites.  The Company's total
estimated cost of reclamation at all active and inactive mining properties is
$33.5 million.  The Company has accrued $17.6 million in reclamation and
closure costs through December 1996 and will charge the remaining amount to
operations, over the remaining lives of its operations, on a unit-of-
production basis.  As of December 31, 1996 and 1995, the Company had
outstanding bonds and letters of credit for reclamation of $4.7 million and
$4.9 million, respectively.  Further, the Company believes that the salvage
value of its assets at its various mine sites will be sufficient to fund the
majority of these reclamation costs.

PERMITTING

Permitting of the Company's operating divisions is an ongoing process, and as
the Company expands, it regularly amends its existing permits and obtains new
permits as required to sustain operations in compliance with the appropriate
legislation. The Company believes it has obtained all of the permits and
licenses for its current operations.

In 1995, the Company obtained an amended Certificate of Approval for the
Pamour operation from the Ontario Ministry of Environment and Energy
authorizing a 20% increase in the permitted mine capacity to 4,500 tons per
day.

The Company has obtained all of the approvals, permits and licenses required
to commence construction on the Kemess South Project in north central British
Columbia and construction is currently under way.  The Company is well
advanced in its application for all of the approvals, permits and licenses
required to commence mining operations in the second quarter of 1998.

EMPLOYEE RELATIONS

At year-end 1996 the Company's employees numbered 1,422 persons, comprising
435 salaried staff and 987 hourly paid employees.

The Company has a working partnership with two primary labor unions: the
United Steelworkers of America which represents members at the Colomac, Pamour
and Hope Brook mines and the Canadian Auto Workers (CAW) which represents
members at the Giant Mine.

On November 1, 1996 the Company and the United Steelworkers of America
representing hourly paid labor at the Colomac Mine signed a three-year
collective labor agreement which provides for no work stoppages.

On July 1, 1996 the Company and the United Steelworkers of America
representing hourly paid labor at the Pamour Mine signed a collective labor
agreement covering a three-year period.  Prior agreements were for a two-year
period.

The collective labor agreement with the United Steelworkers of America at the
Hope Brook Mine expires on May 1, 1997.  It is anticipated that with the
scheduled closing of the mine in September 1997, the current agreement will be
extended until closure date.

The collective agreement with the CAW at the Giant Mine expired on November
16, 1996. It contains a provision that there cannot be a strike or a lockout
at the end of the agreement.  Any matters which cannot be resolved between the
parties will be presented for binding arbitration.  The terms of a new
agreement are currently under mediation and a decision is expected in mid-
April 1997.

ITEM 2 - PROPERTIES

The Company's worldwide headquarters are located in Kirkland, Washington.
Mine offices are located in or near Smithers, British Columbia; Yellowknife,
Northwest Territories; Timmins, Ontario; and Hope Brook, Newfoundland.

SUMMARY OF MINEABLE (PROVEN AND PROBABLE) ORE RESERVES

Future production is contingent on available mineable ore reserves.  See
"Special Note Regarding Forward-Looking Statements".  Ore reserves were
estimated by the Company at December 31, 1996, using anticipated operating
costs and C$527 (US$390) per ounce as the projected price of gold.

<TABLE>
                                 Tons*       Grade     Ounces*
                               (000's)    (oz/ton)     (000's)
                               -------    --------    --------
 <S>                           <C>        <C>         <C>
 GOLD
 BRITISH COLUMBIA DIVISION
 Red Mountain                    3,053       0.262         800
 Kemess                        220,947       0.018       4,056
                               -------       -----       -----
 Total                         224,000       0.022       4,856
                               -------       -----       -----
 NORTHWEST TERRITORIES DIVISION
 Giant Mine**                    2,078       0.338         702
 Colomac***                      5,292       0.049         261
                               -------       -----       -----
 Total                           7,370       0.131         963
                               -------       -----       -----
 ONTARIO DIVISION
 Timmins ****                   66,835       0.042       2,790
 Matachewan                     12,440       0.066         820
 Duport                          1,008       0.380         383
                               -------       -----       -----
 Total                          80,283       0.050       3,993
                               -------       -----       -----
 NEWFOUNDLAND DIVISION
 Hope Brook                        708       0.089          63
                               -------       -----       -----
 Total                             708       0.089          63
                               -------       -----       -----
 Total Royal Oak Mines         312,361       0.032       9,875
                               =======       =====       =====

 *Tons and ounces are rounded to the nearest thousand.
 **Includes Nicholas Lake.
 ***Includes Cass.
 ****Includes Nighthawk Mine.

                                  Tons       Grade      Pounds
                               (000's)         (%)     (000's)
                               -------     -------      ------
 COPPER
 BRITISH COLUMBIA DIVISION
 Kemess                        220,947       0.224     989,843
                               =======     =======     =======

</TABLE>

SUMMARY OF MINERALIZED MATERIAL

The following table presents mineralized material by property as of December
31, 1996. Mineralized material is estimated by the Company.  This mineralized
material has not been included in the mineable ore reserve estimates because
even though enough inspection, sampling and measurement has been done to
indicate sufficient tonnage and grade to warrant further exploration or
development expenditures, these resources do not qualify under the U.S.
Securities and Exchange Commission standards as commercially mineable
orebodies until further drilling, metallurgical work, and other economic and
technological feasibility factors based upon such work are resolved.

<TABLE>
                                       Tons*        Grade     Ounces*
                                     (000's)     (oz/ton)     (000's)
                                     -------     --------     -------
 <S>                                 <C>         <C>          <C>
 GOLD
 BRITISH COLUMBIA DIVISION
 Red Mountain                            524        0.203         106
 Kemess                              173,063        0.011       1,918
                                     -------     --------     -------
 Total                               173,587        0.012       2,024
                                     -------     --------     -------
 NORTHWEST TERRITORIES DIVISION
 Giant Mine**                          5,992        0.221       1,324
 Colomac***                            4,107        0.058         237
                                     -------     --------     -------
 Total                                10,099        0.155       1,561
                                     -------     --------     -------
 ONTARIO DIVISION
 Timmins****                          41,599        0.060       2,479
 Matachewan                            6,357        0.075         477
 Duport                                1,007        0.320         322
                                     -------     --------     -------
 Total                                48,923        0.067       3,278
                                     -------     --------     -------
 NEWFOUNDLAND DIVISION
 Hope Brook                            1,048        0.099         104
                                     -------     --------     -------
 Total                                 1,048        0.099         104
                                     -------     --------     -------
 UNITED STATES DIVISION
 Copperstone                           2,424        0.172         417
                                     -------     --------     -------
 Total                                 2,424        0.172         417
                                     -------     --------     -------
 Total Royal Oak Mines               236,082        0.031       7,384
                                     =======     ========     =======

 *Tons and ounces are rounded to the nearest thousand.
 **Includes Nicholas Lake.
 ***Includes Cass.
 ****Includes Nighthawk Mine

                                        Tons        Grade      Pounds
                                     (000's)          (%)     (000's)
                                      ------      -------     -------
 COPPER
 BRITISH COLUMBIA DIVISION
 Kemess                              173,063        0.180     623,026
                                     =======       ======     =======
</TABLE>

For details concerning the total cost of property, plant and equipment at each
of the sites, see Note 4 to the Consolidated Financial Statements.


BRITISH COLUMBIA DIVISION

KEMESS SOUTH

BACKGROUND

The Kemess South Project is located 182 miles northwest of Mackenzie, British
Columbia, and to the east of Thutade Lake. Currently, access to the area is by
air from Smithers or Prince George to the airstrip on site (a 5,225 foot
gravel strip), or from the south via an all-weather road from Fort St. James
or Mackenzie.

In May 1993, Royal Oak acquired 39% of Geddes, a company whose only
significant asset was a 100% interest in a block of mineral claims located in
the vicinity of Windy Craggy mountain in northwestern British Columbia.  In
June 1993, the British Columbia provincial government announced that it would
permanently protect, as a provincial park, the region which included Windy
Craggy, and would provide compensation for holders of mineral claims in the
area.  Subsequently, in December 1994, the United Nations Educational,
Scientific and Cultural Organization (UNESCO) designated the Tatshenshini-
Alsek Provincial Park, which includes Windy Craggy, a World Heritage site.

In May 1995, the British Columbia provincial government commenced active
negotiations with senior officers of Geddes pertaining to compensation
respecting Windy Craggy.  In order to facilitate such negotiations, Royal Oak
indicated to the British Columbia provincial government a willingness to
purchase the Kemess and Red Mountain properties and to develop these
properties, provided appropriate project support and investment arrangements
were provided by the British Columbia provincial government.

In January 1996, the Company completed the acquisition of Geddes, El Condor
and St. Philips.  The remaining outstanding shares of Geddes were acquired for
shares of the Company and cash with a total acquisition cost of $40.9 million;
the outstanding shares of El Condor were acquired for shares of the Company
and cash worth $110.6 million; and the outstanding shares of St. Philips were
acquired for $38.6 million in cash.  El Condor and St. Philips owned the
Kemess South property and El Condor owned the Kemess North property.  These
properties are now owned by Kemess Mines Inc. (formerly Geddes Resources
Limited).  Although the Company will continue to evaluate the potential of the
Kemess North property, there is presently no plan to develop this property
until mining is well underway on Kemess South.

On April 29, 1996, the British Columbia provincial government announced that
it had issued a Project Approval Certificate for the Kemess South Project
which entitled the Company to proceed with permitting applications for
construction of a mine site and attendant infrastructure and since then, all
of the necessary permits material to construction have been granted.  Federal
approval under the Environmental Assessment Act (Canada) and the Fisheries Act
(Canada) was received on November 6, 1996, and will facilitate completion of
all infrastructure impacting on viable lakes and streams in the project area.

TIMETABLE FOR DEVELOPMENT

Construction of the Kemess South Project commenced in July 1996 and is
anticipated to be completed in April of 1998.  The construction phase
currently employs a work force of approximately 350 persons and is expected to
peak at 650 to 700 persons.

The engineering of the processing facilities, which commenced in November
1995, was completed in February of 1997.  Teshmont Consultants Inc. of
Winnipeg is managing construction of the power line and Knight Piesold Ltd.
has designed the tailings dam.

COMPENSATION, FINANCIAL ASSISTANCE AND INVESTMENT

The Company currently estimates that its total capital costs for the Kemess
South Project will be approximately $390 million plus the land acquisition
cost.  The net book value of the property, plant and equipment of the
Company's British Columbia operations which include the Kemess South Project,
was approximately $271.9 million as of December 31, 1996.

The Company expects to bring the Kemess South Project into production in the
second quarter of 1998.  The project development will be facilitated by up to
$166 million of economic assistance, investment and compensation from the
British Columbia provincial government as described below.  The Company is not
obligated to repay the British Columbia provincial government any of such
amounts.  Section 25 of the Financial Administration Act (British Columbia)
provides that, notwithstanding the commitment to pay, any payment of money by
the British Columbia provincial government pursuant to an agreement is subject
to (i) an appropriation being available for that agreement in the year in
which the payment falls due and (ii) the Treasury Board not having controlled
or limited expenditure under any such appropriation.

The compensation, financial assistance and investment of up to $166 million to
be provided by the British Columbia provincial government consist of the
following components described below:

   (i)        Compensation - $29 million payable over two years.  On April
              15, 1996, the Company s wholly-owned subsidiary, Kemess Mines
              Inc., received the first of two equal compensation payments of
              $14.5 million.  The final payment is due in April 1997.

   (ii)       Royalty interest investment - $50 million to develop on and
              off-site mine infrastructure for the Kemess South Project.  The
              Company will pay the British Columbia provincial government a
              royalty of 4.8% on all copper extracted and processed from the
              Kemess South Project.

   (iii)      Power line installation - $49 million payable over three years
              to cover the cost of constructing a 380 kilometre power line
              from the Kennedy substation to the Kemess Mine site together
              with related equipment.  The Company is evaluating alternate
              sources to supply the power.  The power line will be owned and
              operated by the Company for at least 20 years.

   (iv)       Regional resource infrastructure - $14 million payable over 14
              years for emergency health facilities, airport facilities and
              for developing and maintaining a connector road.

   (v)        Human resource development program - $4.0 million payable over
              two years to facilitate recruitment, selection, relocation,
              mobility, training, upgrading and safety training for personnel
              working at the Kemess South Project.

   (vi)       Mining development - $20 million to be matched dollar for
              dollar for the development of properties in British Columbia,
              including the Kemess and Red Mountain properties and
              extensions.

   (vii)      Facilitation and support - The British Columbia provincial
              government agreed to facilitate and support the Company with
              respect to the negotiation of appropriate contracts of rail
              transport, port and power charges and to facilitate the review
              and consideration of the development of the orebody and
              construction of mining and processing facilities relating to
              the project pursuant to all applicable legislative,
              environmental, permitting and other governmental requirements.

The compensation, financial assistance and investment outlined above are
documented in a legally binding Heads of Agreement signed on August 18, 1995.
This agreement contemplated that the provisions of the Heads of Agreement
would be embodied in a formal agreement to be negotiated between the parties.
This formal agreement is currently being negotiated. Part of the monies owed
pursuant to the Heads of Agreement has been deferred until the formal
agreement is signed.  Signing of the formal agreement is expected in the
second quarter of 1997.

OWNERSHIP

The Kemess property consists of 311 staked mineral claims in three distinct
groups that cover approximately 71,718 acres.  The Kemess South property was
owned by El Condor and St. Philips, and the Kemess North property was owned by
El Condor.  The property was transferred to Kemess Mines Inc. pursuant to the
winding up of El Condor and St. Philips.   The Company will pay the British
Columbia provincial government a royalty of 4.8% on all copper extracted and
processed from the Kemess South Project.  In addition, there are two royalty
agreements that affect a small number of claims.

GEOLOGY

The Kemess South deposit is a large low grade gold-copper porphyry-type
deposit.  It is hosted by a flat-lying porphyritic quartz monzodiorite
intrusion.  Pyrite, the dominant sulphide, occurs as veins and fracture
coatings accompanying quartz stringers.  Chalcopyrite occurs as disseminated
grains and in quartz stockwork veins.  Native gold is included within or is
peripheral to grains of chalcopyrite, and gold grades correlate closely with
those of copper in the hypogene zone.

The highest grade of gold and copper mineralization correlate with zones of
intense quartz stockwork development.

A supergene zone, comprising 20% of the deposit, formed during a period of
weathering synchronous with the formation of the Late Cretaceous Sustut Basin.
Copper grades within this zone are locally leached or enriched, while gold
concentrations remain relatively unchanged.  Native copper is the dominant
secondary copper mineral except at the base of the supergene zone where
chalcocite becomes increasingly abundant.

MINING AND MILLING

The development plan contemplates that the deposit will be mined at an average
rate of approximately 107,000 tons per day at an estimated cost of $1.56 per
ton.  Milling at the rate of approximately 50,000 tons per day is projected to
cost approximately $1.81 per ton.  At this mining rate, the life of the
project is estimated to be approximately 16 years.  See "Special Note
Regarding Forward-Looking Statements".

ORE RESERVES

Ore reserves for the Kemess South Project were calculated in a 1993 pre-
feasibility study completed by Kilborn Engineering Pacific Ltd., for El Condor
and St. Philips, the former owners of the property.  These reserves were
reviewed by Royal Oak prior to the purchase of the property in 1995.  In
addition, they were independently verified for the Company in February, 1996.
Reserves for this property are 221 million tons of ore averaging 0.018 ounces
per ton of gold and 0.224% copper.  These reserve estimates contain allowances
for mining losses and dilution, but not for losses in milling.  Net smelter
return calculations were carried out on mineralization at Kemess South in
order to determine the value that would be returned from mining and
processing.  These estimates included all transportation and smelter charges.
The prices of gold and copper used in the above feasibility studies were
US$350 per ounce and US$1.00 per pound, respectively, with an exchange rate of
US$0.78/Cdn $1.00.

RED MOUNTAIN

BACKGROUND

The Red Mountain project area is located in the Coastal Mountain Range, 11
miles east of the seaport of Stewart, in northwestern British Columbia.
Currently, access to the property is by helicopter from Stewart, however, a
road has been constructed to a potential portal site in Bitter Creek adjacent
to the ore zone but at a lower elevation.

OWNERSHIP

The property consists of 160 staked mining claims that cover 93,791 acres.
The Company acquired 100% of the Red Mountain property from Barrick Gold for
one dollar and the obligation to spend $3 million on the property.  The
Company assumed all past environmental liabilities, estimated at $3.0 million,
as part of this purchase.  The Company expended $8.0 million on a surface and
underground development program which was completed in late 1996, thereby
fulfilling its expenditure obligation.  The prior owner is entitled to receive
a 1% net smelter return royalty on all production from a portion of the
property, and on production over 1.85 million ounces of gold, an additional
$10.00 per ounce of gold is payable.  In addition, the Company is required to
pay a 2.5% net smelter return royalty to a third party.

GEOLOGY

The Red Mountain orebody is a hydrothermal gold deposit related to a
multiphase intrusion.  The Red Mountain area is underlain by Upper Triassic to
Middle Jurassic sedimentary and volcanic rocks of the Hazelton Group.  Early
Jurassic plutons, sills and dykes have intruded this volcanic-sedimentary
assemblage, the largest of which (the Goldslide-Hillslide intrusion) lies
beneath Red Mountain.  The orebody currently consists of three northwest
plunging, southwest dipping elliptical zones located beneath the summit
approximately at the contact between two phases of the Goldslide intrusion and
hosted within both the stratified sediments and the Hillslide intrusion.  Both
the ore zones and the host rocks have been disrupted by northwest plunging
folds and at least two phases of brittle faulting.

An extensive surface and underground drilling program was completed in 1996.
The drilling showed that the JW Zone was truncated to the north by faulting
or folding.  However, drilling intersected Red Mountain type mineralization
closer to the valley floor within a zone now called the SF Zone situated
1,000 feet below and 1,000 feet due north of the JW Zone.  The short field
season prevented sufficient drilling to fully define the SF Zone's extent and
grade.

MINING AND MILLING

It is estimated that over US$30 million was spent by former owners of this
property, Lac Minerals and Barrick Gold, between 1991 and 1994 outlining and
developing the Marc, AV and JW Zones, which included 300,000 feet of drilling.
These zones remain open down-plunge and the exploration potential for the area
north of the deposit is deemed by the Company to be excellent.

It is expected that the Red Mountain mine will be operated as an underground
mine.  The source of power for this property is expected to be British
Columbia Hydro.

ORE RESERVES

The Red Mountain deposit contains 800,000 ounces of gold in the mineable
category, grading 0.262 ounces of gold per ton.


NORTHWEST TERRITORIES DIVISION

COLOMAC MINE

Selected Operating Data
<TABLE>
                                                     Years ended December 31,
                                        1996        1995        1994        1993        1992
                                     -------      ------      ------      ------     -------
 <S>                                 <C>         <C>          <C>         <C>        <C>
 Tons of ore milled (000's)          3,013.2     2,725.4      *985.1           -           -
 Average grade of ore milled
  (oz of gold per ton or "opt")        0.046       0.047       0.047           -           -
 Production of gold - ozs            122,416     117,646      40,568           -           -
 Employees at period end                 222         194         258           -           -
 Cash cost per ounce (US)**             $370        $383           -           -           -

 *Mine reopened.
 **In 1994 revenue from production at Colomac was netted against start-up costs and the
 difference was deferred as pre-production costs.
</TABLE>

BACKGROUND

The Colomac Mine, which is located approximately 137 miles northwest of
Yellowknife in the vicinity of Indin Lake, was acquired in April 1993 from
Neptune Resources Corp. ("Neptune") after having been shut down since June
1991.  Stripping operations at the Colomac Mine recommenced in March 1994, and
the first gold production was realized in July 1994. As of December 31, 1996,
the Colomac Mine and the nearby Cass deposit had mineable ore reserves of
261,000 ounces of gold and additional mineralized material of 237,000 ounces
of gold.  The property is accessible by winter road from Yellowknife for
approximately three months each year or on a year round basis by chartered
aircraft to a 5,000 foot airstrip at the mine site.  The Cass property which
is located 9 miles southwest of the Colomac Mine is expected to provide feed
for the Colomac Mill in 1997.

OWNERSHIP

The Colomac property is comprised of 4 mining leases and 3 surface leases
which cover approximately 3,400 acres.  In 1993, the Company acquired the
Colomac Mine and surrounding properties in exchange for shares of Royal Oak
worth $7,875,000.  In a simultaneous transaction, the Company acquired the
gross production royalty on the Colomac property in exchange for shares of
Royal Oak worth $4,000,000.  The Company holds a 100% interest in the leases.
The mining leases are subject to an operating royalty payable to Neptune, when
the average price of gold for a calendar year exceeds US$400 per ounce.
Amounts payable are $1.0 million or $2.0 million annually depending on the
average price of gold.  No amount has been payable under this royalty to date.
Obligations under this agreement expire after five years of production, which
is currently expected to be reached at the end of 1999.  The net book value of
the Colomac property, plant and equipment was approximately $31.6 million as
of December 31, 1996.

The Cass property consists of 12 leased mining claims covering approximately
15,322 acres, and accessible from Colomac by an all-weather road that was
constructed in 1996.

In 1994, the Company entered into an agreement with Echo Bay Mines Ltd. as
operator of a joint venture pursuant to which the joint venture granted the
Company an option to acquire up to a 100% interest in the Kim-Cass property,
exclusive of diamond rights, by placing the property into production within a
four year period.  The Company is obligated to incur minimum annual
exploration expenses of $250,000 on the property during the four-year earn-in
period and has the right to extend the earn-in period for consideration of
$100,000 per year.  Upon the Company placing the Kim-Cass property into
production, the property will be subject to a net smelter return royalty which
will be on a sliding scale based on the price of gold.  The Company has spent
over $1.0 million for exploration on the property to date, which spending
satisfies the option requirements.

A $2.0 million exploration program will be implemented at Colomac and its
surrounding properties in 1997.  The program will focus on drill testing for
underground mineable ore.

MILLING AND MINING FACILITIES

The Colomac Mine uses conventional open pit mining techniques.  The mill,
built in 1989, is a conventional 9,300 tons per day CIP circuit with
historical recoveries of approximately 90%.  The mill circuity was modified,
including installation of a pebble crusher bypass in 1996, to overcome
operating difficulties and to facilitate the processing of 10,000 tpd of ore.
The plant and equipment are generally in good to excellent condition.  The
design of the open pit was carried out with computer-aided mine design
software which allows for block model generation, reserve calculation and
interactive pit design.  The power for this property is diesel-generated on
site.

GEOLOGY

The Colomac orebody is hosted within a large quartz feldspar porphyry sill of
the Pre-Cambrian age.  It was later tilted into a vertically dipping
orientation and has been named the Colomac Dyke.  This intrusion was fractured
and recemented by quartz veinlets containing free gold and pyrite.  The
Colomac Dyke averages 120 feet wide in the Zone 2.0 pit.  It has a strike
length of approximately 7 miles.  The Main Zone occurs within a package of
steeply dipping mafic pillowed volcanics.  The gold occurs associated with
enriched areas of sulphides.  The Cass Zone occurs within a steeply dipping
mafic intrusive body.  Gold occurs associated with swarms of quartz veinlets
containing minor amounts of sulphides.

ORE RESERVES

As of December 31, 1996, the Colomac operation, including its satellite
deposit, the Cass Zone, had mineable ore reserves (proven and probable) of
approximately 5,292,000 tons grading 0.049 ounces of gold per ton.  The cutoff
grade used in estimating these reserves of 0.030 ounces of gold per ton for
the open pit is based on current mining costs and a gold price of $527
(US$390) per ounce.  Allowances are made in these estimates for dilution and
mining losses.  Ore reserves do not include allowances for losses in milling.

GIANT MINE
<TABLE>

Selected Operating Data
                                                   Years ended December 31,
                                     1996        1995        1994        1993        1992
                                   ------      ------     -------      ------      ------
 <S>                               <C>         <C>        <C>          <C>         <C>
 Tons of ore milled (000 's)        367.4       411.0       430.2       413.1       395.0
 Avg grade of ore milled (opt)      0.262       0.254       0.264       0.264       0.286
 Production of gold - ozs          83,385      91,423     101,176      92,948      95,878
 Employees at period end              340         339         351         332        *246
 Cash cost per ounce (US)            $357        $329        $289        $330        $324

 *Significant number of contract employees on site in 1992.
</TABLE>

BACKGROUND

The Giant Mine, located approximately three miles north of Yellowknife, has
been in production continuously since 1948.  The Ingraham Trail, a paved all-
weather highway from Yellowknife passes through the centre of the property.
Mining is conducted underground and the ore is processed with an on-site mill.
Since the commissioning of the mill in 1948, the Giant Mine has produced in
excess of 7,000,000 ounces of gold.

In 1996 the Company completed rehabilitation of the infrastructure which
accesses the Supercrest orebody and large scale mining of this orebody is
currently taking place to supplement the ore from the main Giant orebody.  The
higher grade mineable ore from Supercrest averages 0.387 ounces of gold per
ton in situ compared to 0.301 ounces of gold per ton at Giant.  The net book
value of the Giant Mine property, plant and equipment was approximately $52.5
million as of December 31, 1996.

The Nicholas Lake property, which was acquired in 1995 from Athabaska Gold
Resources Ltd., is located 60 miles north of Yellowknife.  It can be accessed
by chartered aircraft from Yellowknife or by winter road.  Currently,
development studies are being undertaken and production is not expected to
commence before 1999 at the earliest.  The Company plans to mine ore year
round and to stockpile at site, for shipment to the Giant Mine in Yellowknife
on the winter ice road.  The ore will be processed at the Giant facility.  The
Nicholas Lake deposit is expected to be mined at 200 to 300 tons per day.  See
"Special Note Regarding Forward-Looking Statements".

OWNERSHIP

The Company owns 100% interest in the Giant Mine property (which includes
Supercrest), consisting of 6 mining leases covering 1,636 acres and one
surface lease covering 2,243 acres.

The Company purchased 100% interest in the Nicholas Lake property in 1995 from
Athabaska Gold Resources Ltd., for $3.8 million. The Nicholas Lake property is
subject to a 1% net smelter return royalty.

MILLING AND MINING FACILITIES

The Giant Mine operates as an underground mine with access provided by two
large service raises, five declines and the "C" shaft, which is the principal
operating opening for hoisting, extending to a depth of 2,124 feet.  Mining is
by conventional underground mining techniques such as cut and fill.  The mine
is mechanized with jumbo drills and 3-1/2 yard scooptrams.  The mill at the
Giant Mine is a 1,100 ton per day milling and refining complex.  The mine
operates on a five day a week schedule while the mill operates seven days a
week.  The power source for this property is Northwest Territories Power Corp.
Power costs have increased significantly in the last several years and the
Company is investigating alternative sources of providing power.

The Nicholas Lake orebody consists of eleven zones of mineralization.  These
zones are near vertical quartz-sulphide veins.  The zones have been drilled
from surface and underground at a spacing of approximately 65 feet.  The
orebody is accessed by a ramp (driven in 1994) to a depth of 300 feet below
surface.  A total of 750 feet of cross-cutting and silling has been conducted
on two of the major zones (including detailed mapping and sampling).  Mining
methods during the production phase will be shrinkage.  Access will be
provided by deepening the existing ramp as mining progresses.

The main infrastructure of the Giant Mine has been in place since 1946.  An
Edwards Hearth roaster was constructed in 1948 and a fluid bed roaster was
added in 1950.  In the mid-1950's, a two-stage fluid bed roaster was added
along with a roaster gas cleaning plant.  In the early 1980's, a new effluent
treatment plant was added, and in 1992 to 1994, the mill's flotation cells
were replaced.  The Company's roaster currently operates in compliance with
all existing legislation and regulations.  The Giant Mine's plant and
equipment are generally in good condition.

GEOLOGY

The Giant Mine is in the Yellowknife Greenstone belt, a package of Pre-
Cambrian basic volcanic rocks.  Orebodies are hosted in shear zones within the
greenstones.  Individual orebodies are veins, quartz lenses, or silicified
areas within the shear.  Gold is associated with fine-grained arsenopyrite.

The Nicholas Lake deposit is a series of narrow, steeply dipping quartz veins
containing gold, arsenopyrite and other sulphides.  These veins occur within a
granitic intrusive body.

ORE RESERVES

As of December 31, 1996, the Yellowknife operation, including Nicholas Lake,
had mineable ore reserves (proven and probable) of approximately 2,078,000
tons grading 0.338 ounces of gold per ton.  A cutoff grade of 0.20 ounces of
gold per ton, based on current mining costs and a gold price of $527 (US$390)
per ounce, was used in calculating these reserves.  Allowances are made in
these estimates for dilution and mining losses.  Ore reserves do not include
allowances for losses in milling.  In some areas, such as Nicholas Lake,
higher cutoff grades were used.

REGULATIONS

Operations at both the Colomac and Giant mines are governed by Federal and
Territorial statutes, ordinances and regulations.  Included under Northwest
Territorial jurisdiction are the Apprentices and Tradesmen Regulations, the
Boiler and Pressure Vessel Regulations, Business License Fire Regulations,
Explosive Use Regulations, Fire Prevention Act, Labour Standards Ordinance,
the Northwest Territories Mining Safety Act, Workers Compensation Act, Public
Health Ordinance, Emergency Measures Act and Environmental Protection
Ordinance.  Under Federal jurisdiction are the Clean Air Act, the Fisheries
Act, Northwest Territories Waters Act, Territorial Lands Act, Transportation
of Dangerous Goods Act and the Canada Mining Regulations.  Failure to comply
may result in cease work orders and/or fines.  Royal Oak believes it is
complying with the foregoing statutes and regulations where applicable and has
not been the recipient of any orders or directions in the past year other than
in the ordinary course of business.


                               ONTARIO DIVISION

TIMMINS OPERATIONS

Selected Operating Data - Ontario Division
<TABLE>
                                                   Years ended December 31,
                                     1996        1995        1994        1993        1992
                                  -------     -------     -------     -------     -------
 <S>                              <C>         <C>         <C>         <C>         <C>
 Tons of ore milled (000's)       1,381.7     1,329.8     1,350.0     1,330.7     1,224.8
 Avg grade of ore milled (opt)      0.086       0.067       0.069       0.072       0.089
 Production of gold - ozs         104,577      80,120      85,755      87,346      98,898
 Employees at period end              451         476         417         400         400
 Cash cost per ounce (US)            $291        $368        $327        $310        $310
</TABLE>

BACKGROUND

The Pamour Mine consists of two underground (Pamour and Hoyle) and two open
pit mining operations. The Pamour Mine is located approximately 15 miles east
of the City of Timmins, Ontario, and has been in production since 1936.  Both
the Pamour and Hoyle properties are transected by Highway 101.  Since the
commissioning of the mill in 1936, the Pamour Mine has produced in excess of
4.0 million ounces of gold.  The net book value of the Company's property,
plant and equipment in the Ontario operations which includes 47,089 acres of
exploration land, including those associated with the Pamour, Hoyle and
Nighthawk properties, was approximately $89.9 million as of December 31, 1996.

OWNERSHIP

The Pamour property consists of 38 patented mining claims and one License of
Occupation.  Together, the property covers approximately 1,531 acres of mining
and surface rights.  Directly adjacent to the Pamour Mine is the Hoyle
property which is comprised of 37 patented mining claims and 4 leased claims
covering approximately 1,608 acres. The Company has a renewable 10-year lease
on that portion of the Hoyle property lying south of the Timiskaming
Unconformity where current mining operations are conducted.  The lease terms
include the payment of a minimum annual rent of $100,000 which is credited
against a production royalty being the higher of $0.75 per ton or a 2% net
smelter return.  In order to renew the lease, which expires in 1999, for a
further 10-year term, the Company must spend $1.0 million on exploration and
mine one million tons of ore.  Both conditions have been met so the lease will
automatically be extended.  The Company has earned a 51% interest in the
portion of the Hoyle property north of the Timiskaming Unconformity, which is
not currently in production.

MINING AND MILLING

The Pamour Mine currently operates both open pit and underground mining
operations.  The underground operations currently produce approximately 2,000
tons of ore per day, while the open pit operations produce approximately 1,500
tons per day.  The Pamour Mine is comprised of the Pamour No. 1 Underground
Mine, surface pits and the Hoyle Mine.

The Pamour No. 1 Underground Mine commenced operations in 1936 as the original
Pamour Mine and has operated continuously since.  The leased Hoyle Mine
extension, which commenced production in April 1990, is the eastern strike
extension of the Pamour orebody and is a large resource of bulk mineable
conglomerate ore which has been accessed by a decline from surface and by
underground drifts from the Pamour shaft.  The underground mine currently
produces approximately 2,000 tons per day through a 3,145 foot deep five-
compartment timbered shaft.  The Hoyle property has the capacity to produce
18,000 tons per month.  The mine is adjacent to the Pamour No. 1 operation and
has higher grade ore than present reserves at the Pamour No. 1 Mine.

Where possible, bulk mining methods are utilized, primarily by modified
vertical crater retreat as well as sub-level blasthole stoping.  The bulk
mining areas are developed with large mechanized drill jumbos, scooptrams and
trucks.  Scooptrams and trucks move the blasted ore from the drawpoints to an
internal pass.  An electric trolley with 5 ton cars transports the ore from
the internal pass to 3 Shaft where it is skipped to the surface.  Higher
grade, narrow veins are mined by a modified open shrinkage method.  The ore is
developed and mined with jacklegs and stopers which drill 1-1/4 inch blast
holes.  The broken ore is transported to the shaft by mechanized scoops,
trucks and/or electric trains and then hoisted to the surface.

The No. 3 Pit is located immediately southeast of the Pamour Mill.  This open
pit was developed over the upper workings of the Pamour Mine and first came
into production in 1985.  The No. 5 Pit, at the extreme west end of the Pamour
No. 1 property, was brought into production in 1989.  Total pit production is
1,500 tons of ore per day.

An additional jaw crusher was added to the Pamour Mine in the early 1990's.
In 1995, all 25-cycle electrical motors in the mine were replaced due to the
change in the power supply from 25 cycles to 60 cycles.  Also in 1995, an
additional ball mill was installed to increase capacity from 3,600 to 4,000
tons per day.  The on-site mill at Pamour has the capacity to treat
approximately 4,000 tons per day.  The Pamour Mine plant and equipment are
generally in good condition.  A gold pyrite flotation concentrate is produced
from the ore and is treated by a conventional cyanidation process to produce a
gold precipitate which is refined into dore.  The power source for this
property is Ontario Hydro.

PAMOUR MINE OPEN PIT EXPANSION

As a result of its successful exploration program from 1994 to 1996, the
Company is developing a significant expansion project at the Pamour property.
The Company has focused on developing ore reserves in a low grade halo around
the mined out stopes at the Pamour Mine.  The current dimensions of the
ultimate pit are approximately 6,000 feet long, 2,400 feet wide and 1,000 feet
deep.

GEOLOGY

The Pamour Mine is located approximately one mile north of the Destor-
Porcupine Fault, an east-northeast to west-southwest striking structure.  The
majority of the historic gold producing mines in the Porcupine Gold Camp have
been located near this structure.  On the property, a series of basic volcanic
rocks are unconformably overlain by greywackes and a thick conglomerate, known
as the Pamour conglomerate. All rocks are of the Pre-Cambrian age.  Gold
occurs in narrow high grade quartz veins in the volcanics and in the
sediments.  The majority of the gold that has been mined from this property
occurs in sheeted sets of quartz veins in the Pamour conglomerate and in the
greywackes on either side of it.  Gold also occurs in broad irregular zones of
quartz veinlets in the volcanic rocks.

ORE RESERVES

As of December 31, 1996, the Pamour and Nighthawk operations had proven and
probable ore reserves of approximately 66,835,000 tons grading 0.042 ounces of
gold per ton.  The ore reserves at this division have increased in each of the
last three years due to expansion of open pit reserves.  Major drilling
campaigns were undertaken in 1995 and 1996 for this purpose.  Cutoff grades
(which range from 0.023 to 0.200 ounces per ton) are determined for each type
of ore based on current mining costs, and a gold price of $527 (US$390) per
ounce.   Allowances are made in these estimates for dilution and mining
losses.  Ore reserves do not include allowances for losses in milling.

NIGHTHAWK

BACKGROUND

The Nighthawk Mine, which was operated by Porcupine Peninsular Gold Mines
Limited between 1924 and 1927, is located east of the Pamour Mine and reopened
production in September 1995.  Access is via highway, 10 miles from the Pamour
Mill.

OWNERSHIP

The Company's land holdings in the Nighthawk Lake area are extensive with
approximately 11,726 acres held representing 254 claims.  Most of the property
is held outright by the Company as staked claims.  Other portions are held
through various option agreements which also provide for some form of
production royalty.  The Ronnoco claims on the east peninsula of the lake are
held through a subsidiary company, Ronnoco Gold Mines Limited.  The current
producing deposit, the Nighthawk Mine, is located on the north peninsula of
the lake and is subject to a production royalty being the higher of (i) $0.003
times tons mined times dollars per ounce of gold or (ii) 20% of the net
profits.

MINING AND MILLING FACILITIES

During the period from 1924 to 1927, the Nighthawk Mine produced 99,628 tons
of ore grading 0.32 ounces of gold per ton.  Additional exploration was done
periodically over the ensuing years.  The Company developed the Nighthawk Mine
and began production in September 1995.  Full production levels of 750 tons
per day were reached in May 1996.

The orebody is accessed by a ramp which will ultimately be driven to 750 feet
below surface.  Mining methods for this underground mine are primarily
longhole open stoping, with 50 feet between sublevels.  Waste rock will be
placed in stopes as delayed backfill.  Ore is hauled to surface stockpiles in
30 ton dump trucks.  The material is then hauled by truck 10 miles to the
Pamour Mill for processing.  The mine's equipment is generally in excellent
condition.  The power source for this property is Ontario Hydro.

GEOLOGY

The Nighthawk Mine is adjacent to a major structure called the Nighthawk
Break, which is thought to be a splay off of the Destor-Porcupine Fault.  The
geology in this area consists mainly of steeply dipping volcanic flows.  In
the mine area, these have undergone intensive carbonate alteration.  Gold
occurs in quartz veins and silicified zones associated with minor amounts of
sulphide minerals.

ORE RESERVES

As of December 31, 1996, the Nighthawk Mine had mineable ore reserves (proven
and probable) of 648,000 tons grading 0.142 ounces of gold per ton and
mineralized material of 599,000 tons grading 0.154 ounces of gold per ton.  A
cutoff grade of 0.100 ounces per ton, based on current mining costs and a gold
price of $527 (US$390) per ounce, was used in calculating these reserves.
Allowances are made in these estimates for dilution and mining losses.  Ore
reserves do not include allowances for losses in milling.

MATACHEWAN

BACKGROUND

The Matachewan project is located approximately 56 miles southeast of the city
of Timmins, Ontario and is accessed directly by Provincial Highway 566.  The
main area of interest is the site of two former producing mines, located two
miles west of the Town of Matachewan.

The Matachewan property was mined from 1933 to 1957 by Young Davidson Mines
Limited and Matachewan Consolidated Mines Limited and produced an aggregate of
956,117 ounces of gold grading 0.10 ounces per ton from both underground and
open pit developments.  The Matachewan deposit was milled historically using
flotation and cyanidation which achieved excellent recoveries.  In 1997 the
Company plans to shut down the Hope Brook operations, moving the plant to
Matachewan.  The Hope Brook mill will be upgraded to a 5,000 tpd facility by
the addition of another ball mill.  The source of power for this property will
be Ontario Hydro.

To date, the Company has received permits necessary to dewater the existing
mine shaft and to proceed with opening up the underground for access to the
old workings.  Detailed permitting of the 5,000 tpd project is currently under
way and expected to be completed by spring of 1998.

The development plan calls for milling of the open pit ore to commence by late
in the fourth quarter of 1998 while the underground mine is being developed.
Production is targeted for 100,000 ounces of gold per year at an average cash
cost of US$227 per ounce.  See "Special Note Regarding Forward-Looking
Statements".  The existence of a 2,450 foot deep shaft and very large ore
blocks will allow the underground mine to be economically developed.

OWNERSHIP

The Matachewan property is held under two lease agreements.  The lease
agreement with Matachewan Consolidated Mines Limited provides for advanced
royalty payments of $15,000 per year or rent of $7,500 per year, depending on
the current gold price.  The Young Davidson lease agreement provides for
advance royalty payments of approximately $40,000 per year.  The property is
subject to a minimum 3% net smelter return royalty.

GEOLOGY

The Matachewan deposit is hosted within a syenite body which has intruded
along and near the highly deformed contact between Timiskaming Group
sedimentary rocks and Larder Lake Group volcanic rocks.  The main syenite body
is approximately 2,460 feet long, 410 feet wide and dips steeply to the south.

ORE RESERVES

As of December 31, 1996 the Matachewan property had mineable ore reserves
(proven and probable) of 12,440,000 tons grading 0.066 ounces of gold per ton.
Allowances are made in these estimates for dilution and mining losses.  Ore
reserves do not include allowances for losses in milling.  Cutoff grades used
in estimating these mineable reserves are 0.027 ounces per ton for open pit
reserves and 0.080 ounces per ton for underground reserves and are based on
current mining costs and a gold price of $527 (US$390) per ounce.

DUPORT

BACKGROUND

The Duport property is located on Shoal Lake, 28 miles southwest of the town
of Kenora in northwestern Ontario, in the Lake of the Woods District.  The
development ramp is located on an island and is accessible by barge.

OWNERSHIP

Intermittent exploration of the Duport deposit was carried out by various
parties from 1930 to 1950, including underground exploration.  In 1973,
Consolidated Professor Mines Limited obtained an option on the Duport property
and conducted an extensive sampling and drilling program from 1973 to 1974.
Subsequently, this option was exercised and Consolidated Professor acquired a
100% interest in this property after amalgamating with Duport Mining Company
Limited.  The Company completed the acquisition of all of the shares of
Consolidated Professor in May 1996 pursuant to a tender offer followed by a
compulsory acquisition.  There is a royalty payable to Union Carbide Canada
Limited ("Union Carbide") equivalent to a 50% net profits interest until
recovery of pre-production expenditures, up to a maximum of $2.0 million.
Thereafter, Union Carbide will receive a 10% net profits interest until a
maximum of $5.0 million in the aggregate has been paid.  There is a buy out
provision for this royalty.

MINING AND MILLING FACILITIES

The Duport project is situated in the environmentally sensitive area of Shoal
Lake, the source of Winnipeg, Manitoba's residential and commercial water
supply.  Environmental concerns were raised in 1989 by local cottagers and the
City of Winnipeg, after Consolidated Professor announced its plans to advance
the project to the permitting stage.  The main concern was the perception of
potential environmental hazards associated with the processing of the
refractory gold ore and the disposal of cyanide treated tailings.  For the
past six years, Consolidated Professor conducted impact and sensitivity
studies related to these concerns.  As a result of Royal Oaks' purchase, all
aspects of mining, ore transport, milling, tailings disposal and site
reclamation are being reconsidered with the objective of satisfying all
concerned parties.  Among other features, the redesigned development plan will
involve transporting the ore by truck to the mainland via a year-round ferry
to a mill site located 5.2 miles in land, outside of the Shoal Lake watershed.
The new design concept effectively addressed every concern brought forth
during the consultation process.  Consolidated Professor has since submitted a
detailed environmental study of the project to the Ontario, Manitoba and
Canadian governments for review.

The Company plans to continue the environmental permitting process initiated
by Consolidated Professor.  Development of the project is anticipated shortly
after the permitting process is completed.

GEOLOGY

The northern end of the Lake of the Woods District is underlain by the
volcanic and sedimentary rocks of an extensive Keewatin greenstone belt.  In
the general Shoal Lake area, two granodiorite intrusions, namely, the Canoe
Lake Stock and the Snowshoe Bay Stock, intrude the greenstone belt assemblage
and are separated by a five mile broad section of volcanic and volcaniclastic
rocks.  Within this volcanic pile is a wide deformation zone which hosts the
gold mineralized zones of the Duport project which occur as en echelon lenses
within highly sheared felsic tuffs.

ORE RESERVES

The Duport project has mineable ore reserves (proven and probable) of
approximately 1,008,000 tons grading 0.38 ounces of gold per ton.  A cutoff
grade of 0.15 ounces per ton, based on current mining costs and a gold price
of $517 (US$390) per ounce, was used in calculating these reserves.
Allowances are made in these estimates for dilution and mining losses.  Ore
reserves do not include allowances for losses in milling.

REGULATIONS

The Ontario Division is governed by the Ontario Mining Act, Occupational and
Health and Safety Act, Environmental Protection Act, Environmental Assessment
Act, Ontario Water Resources Act  and the Pits and Quarries Act, and all
regulations passed thereunder.  Failure to comply therewith may result in
orders being issued which may require operations to cease or be curtailed or
the installation of additional equipment or remedial work to be carried out.
Royal Oak may be required to compensate those suffering loss or damage by
reason of its mining activities and may be fined if convicted of an offence
under any of such statutes.   Royal Oak believes it is complying with the
foregoing statutes and regulations where applicable and has not been the
recipient of any orders or directives other than in the ordinary course of
business at its Ontario Division.


NEWFOUNDLAND DIVISION

HOPE BROOK MINE

Selected Operating Data - Newfoundland Division
<TABLE>
                                                   Years ended December 31,
                                     1996        1995        1994        1993        1992
                                  -------     -------     -------     -------      ------
 <S>                              <C>         <C>         <C>         <C>          <C>

 Tons of ore milled (000's)       1,010.5     1,090.3     1,227.1     1,149.1       540.4
 Avg grade of ore milled (opt)      0.087       0.090       0.089       0.101       0.109
 Production of gold - oz.          78,825      81,962      90,672      96,026      50,693
 Employees at period end              281         271         285         283         238
 Cash cost per ounce (US)            $353        $343        $320        $292        $254
</TABLE>

BACKGROUND

The Hope Brook Mine is located approximately 5 miles inland from the southwest
coast of Newfoundland, between the towns of Burgeo and Port aux Basques.  The
mine currently produces 3,000 tons of ore per day.  As of December 31, 1996,
the Hope Brook Mine had mineable ore reserves of 63,000 ounces of gold and
mineralized material of 104,000 ounces of gold.  Access to the mine is
restricted to air or sea travel.  A 4,000 foot airstrip provides
transportation for the mine employees and the mine operates as a fly-in, fly-
out camp. The principal mode of access for supplies is by a ship owned and
operated by Royal Oak exclusively for the mine.  The ship is based out of Rose
Blanche, Newfoundland.  The net book value of the Hope Brook Mine property,
plant and equipment was approximately $10.3 million as of December 31, 1996.

The Hope Brook Mine reserves are expected to be substantially depleted by mid-
year 1997.  Therefore, in November 1996, the Company announced its decision to
close Hope Brook in the third quarter of 1997 and relocate the majority of the
mill assets and mine equipment to the Matachewan Project in Ontario, Canada.

OWNERSHIP

Production from the Hope Brook Mine is subject to an operating royalty for
five years ranging from $1.3 million to $3.3 million annually in favor of the
prior owner when the annual average spot price of gold exceeds US$380 per
ounce.  In 1996, the Company paid $1.3 million in respect of such royalty.
This operating royalty expired at the end of 1996.  The Hope Brook Mine area
consists of a 25 year mining lease, surface lease and extended exploration
licenses which cover approximately 6,800 acres of mining rights and 490 acres
of surface rights.  The Company holds a 100% interest in the property subject
to the above operating royalty.  All mining activities are confined to the
mining leases.

MINING AND MILLING

The Hope Brook Mill was first commissioned in September 1988.  In 1992, Royal
Oak successfully modified the mafic pebble crushing circuit and, coupled with
other circuit modifications, significantly increased overall throughput.  In
1996, Hope Brook produced an average of 2,768 tons per day.  Ore is delivered
to the surface and crushed to a nominal minus 6 inch using a primary gyratory
crusher.  The crushed ore is stockpiled and withdrawn as required to feed the
mill grinding circuit.  Grinding to 70% minus 200 mesh is accomplished in a
conventional SAG circuit followed by a conventional ball mill grinding circuit
operating in closed circuit with cyclones.  Gold is extracted from the
grinding circuit product in a conventional 60 hour cyanide leach circuit
followed by 6 stages of CIP.  Gold is recovered from activated carbon in a
pressure stripping-electrowinning circuit.  Gold is stripped from the
electrowinning cell cathodes and melted in an induction furnace to yield dore
bullion.  The dore is subsequently shipped to a refinery for final refining.

In 1993, a sulphide flotation circuit was added to the mill flowsheet.  The
final tailings from the CIP circuit is treated through an effluent treatment
plant utilizing the INCO SO2-Air process.  The treated slurry is conditioned
and then subjected to a conventional copper rougher-scavenger flotation
process.  The resulting concentrate is upgraded through several stages of
cleaner flotation to yield a concentrate grading 20 to 22% copper.  The
concentrate also bears significant gold values increasing overall mill gold
recovery by up to 4%.  The concentrate is dewatered, dried and shipped to a
custom smelter for processing of both the contained copper and gold values.

The Hope Brook effluent treatment circuit achieved wastewater quality that was
in substantial compliance with the mine's certificate of approval in 1994,
1995 and 1996.  However, while the effluent treatment circuit was in full
compliance with the mine's certificate of approval, the discharge from the
mine's tailings impoundment area did not consistently pass Environment
Canada's LC50 fish toxicity test.  In Canada, gold mining operations are
exempt from Environment Canada's Metal Mining Liquid Effluent Regulations,
including the LC50 fish toxicity test.  The Company is working cooperatively
with the Newfoundland Department of Environment to minimize the impact of this
discharge on the environment.

The main access to the underground mine is by ramp which has been driven to a
vertical depth of 1000 feet below surface.  The haulage component of the ramp-
haulage system installed at Hope Brook uses 55 ton capacity electric Kiruna
trucks and diesel trucks.  The prior owner of the Hope Brook Mine conducted
its underground mining using a blasthole stoping and fill method.  In 1995,
the Company changed the mining method to sublevel stoping, similar to that
used at its Hoyle property.  The Hope Brook plant and equipment are generally
in good condition.  The source of power for this property is Newfoundland
Hydro.

GEOLOGY

Gold mineralization occurs in an alteration zone of pervasive silica, pyrite,
and pyrophyllite which is approximately 4 kilometers long and 300 meters wide.
The alteration zone exists within the Mid-Ordovician Georges Brook Formation
which consists of a mixed volcanic-sedimentary sequence.  The Hope Brook
orebody is located in the zone of alteration.  Ore covers a strike length of
500 meters and extends from surface to a depth of 400 meters dipping steeply
at an angle of seventy-five degrees.

ORE RESERVES

As of December 31, 1996 the Hope Brook Mine had remaining mineable (proven and
probable) ore reserves of approximately 708,000 tons grading 0.089 ounces of
gold per ton.  A cutoff grade of 0.079 ounces per ton was used in calculating
stope reserves.  Allowances are made in these estimates for dilution and
mining losses.  Ore reserves do not include allowances for losses in milling.

REGULATIONS

The Newfoundland Division is governed by the Government of Newfoundland and
Labrador's Occupational Health and Safety Act, Department of Environment and
Lands Act, The Mineral Act, Waste Material Act, the Regulation of Mines Act,
and the Government of Canada's Fisheries Act and Environmental Protection Act,
and all regulations passed thereunder.  Failure to comply therewith can result
in cease work orders and/or fines.  Royal Oak believes it is complying with
the foregoing statutes and regulations where applicable and has not been the
recipient of any order or directions in the past year other than in the
ordinary course of business.


UNITED STATES DIVISION

COPPERSTONE MINE

BACKGROUND

In June 1995, the Company entered into a lease agreement for the Copperstone
property.  The Copperstone property is located 20 miles north of Quartzsite
and 60 miles south of Lake Havasu City in La Paz County, Arizona.

OWNERSHIP

The Copperstone property is held by the Company, under a renewable 10 year
lease agreement and consists of 284 unpatented mining claims totalling 5,680
acres and 2 state leases covering 1,300 acres located in La Paz County,
Arizona.

The Company is obligated to pay an advance minimum royalty annually of
US$30,000 against a minimum 1% gross production royalty, and must spend US$1
million by the year 2000.  As of December 31, 1996 the Company had spent
approximately $500,000.

MINING AND MILLING

Cyprus Gold Corp. operated the Copperstone property between 1987 and 1992 and
produced in excess of 500,000 ounces of gold from ore grading 0.10 ounces of
gold per ton in the Main Zone by open pit mining and heap leaching.  Compiled
data indicates a down dip extension of the Main Zone as well as parallel
structures in the footwall areas that could possibly be economically mined by
underground methods.  The Main Zone has been traced an additional 1600 feet
along the dip of the structure below the floor of the pit as well as 600 feet
along strike to the north.  Gold mineralization remains open at depth and
along strike.  Previous drilling encountered high gold values over significant
widths: 0.225 ounces of gold per ton over a core length of 50 feet (0.225
opt/50 ft), and 0.602 opt/10 ft approximately 2,000 feet to the north of the
previous hole.  Other intersections below the Main Zone recorded 0.646 opt/15
ft at a vertical depth of 900 feet and collared at the pit floor.  A second
phase of drilling in 1997 returned 1.55 opt/25 ft from a relatively untested
limestone unit near the periphery of the known mineralization.  A second hole
positioned to investigate an untested area adjacent to two mineralized shoots
returned 0.396 opt/35 ft.

GEOLOGY

The Copperstone deposit is hosted in variably altered, oxidized porphyritic
plutonic rocks with mineralization focused by moderately dipping second- and
third-order extensional structures related to a regional scale listric
(detachment) fault.

ORE RESERVES

Currently there are no mineable reserves at the Copperstone property.
However, a 500,000 (417,000 at December 31, 1996) ounce gold resource has been
located through two phases of drilling program.  A US$250,000 follow-up
exploration program is planned for 1997.  The objective of the program will be
to further delineate the underground potential of the Copperstone deposit.


ITEM 3 - LEGAL PROCEEDINGS

In the normal course of business, the Company is subject to proceedings,
lawsuits and other claims, including proceedings under laws and regulations
related to environmental and other matters.  It is the opinion of management
that the various asserted claims and litigation in which the Company is
currently involved will not have, individually or in the aggregate, a material
adverse effect on its financial position.  However, no assurance can be given
as to the ultimate outcome with respect to such claims and litigation.  The
resolution of such claims and litigation could be material to the Company's
operating results of any particular period, depending upon the level of income
for such period.

On September 18, 1992, nine miners were murdered in an underground explosion
at the Company's Giant Mine.  A member of the union which was on strike at the
time was charged and convicted of nine counts of second degree murder.  In
September 1994, dependents of the deceased miners sued the Company and two of
its officers and directors, along with 23 other named defendants unrelated to
the Company, for losses allegedly suffered as a result of the explosion.  The
claim against the Company and all defendants but one, totals approximately
$10.8 million plus taxes, interest and costs.  The claim against the two
officers and directors and all other defendants, excluding the Company, totals
approximately $33.65 million plus taxes, interest and costs.  The Company's
insurers have been notified and a vigorous defense of the claim is intended.
Any liability that might be imposed in the matter as presently pleaded would
be within the Company's liability insurance coverage.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders of Royal Oak
Mines Inc. during the fourth quarter of 1996.

EXECUTIVE OFFICERS OF THE REGISTRANT

Listed below are the names and ages of each of the present executive officers
of the Company together with the principal positions and offices held for the
last five years.  Executive officers are appointed annually by the Board of
Directors to serve for the ensuing year or until their successors have been
appointed.  No executive officer or director is related to any other by blood,
marriage or adoption.

Name              Title                                             Age
Margaret K. Witte President and Chief Executive Officer              43
                  (since July 1989).

Timothy B. Acton  Vice-President, Operations (since February         45
                  1997; Director - International Operations,
                  Newmont Gold Company, August 1995 to February
                  1997; Senior Vice President, P.T. Freeport
                  Indonesia Company, August 1994 to February 1995;
                  Senior Vice-President-Strategic Mines Projects,
                  P.T. Freeport Indonesia Company, January 1994 to
                  August 1994; Vice President and Assistant General
                  Manager-Mines, P.T. Freeport Indonesia Company,
                  June 1991 to December 1993).

Ross F. Burns     Vice President, Exploration (since July 1989)      53

J. Graham Eacott  Vice President, Investor Relations (since Jan.     56
                  1995; Manager, Investor Relations, Aug. 1991 to
                  Jan. 1995).

John R. Smrke     Senior Vice President (since July 1993; Vice       46
                  President, Operations, Oct. 1992 to July 1993;
                  Vice President, Human Resources, Feb. 1992 to
                  Oct. 1992; Corporate Director of Human Resources,
                  Jan. 1991 to Feb. 1992).

Edmund Szol       Vice President, Human Resources (since Feb. 1995;  56
                  Vice President, Human Resources, Nerco Inc.
                  (mining operations), April 1990 to Feb. 1995).

James H. Wood     Chief Financial Officer (since May 1994; Vice      50
                  President Finance, Maclean Hunter Publishing
                  Limited, Dec. 1992 to May 1994; Vice President,
                  Finance and Administration, Kolmar Laboratories,
                  Inc. (custom manufacturer - cosmetics), March
                  1991 to Dec. 1992).

                                   PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS

The shares of Royal Oak were listed on the Toronto and American Stock
Exchanges effective July 25, 1991; the principal market now being the American
Stock Exchange.  The following table sets out the high and the low prices in
Canadian dollars of the shares as reported by The Toronto Stock Exchange for
board lots, and dividends paid, during the periods indicated:

<TABLE>
 Period        The Toronto Stock Exchange        High         Low     Dividends
 -------       --------------------------       -----       -----     ---------
 <S>           <C>                              <C>         <C>       <C>
 1996                       First Quarter       $7.13       $4.95           -
                           Second Quarter        6.30        4.95           -
                            Third Quarter        5.70        4.85           -
                           Fourth Quarter        5.55        4.26           -



 1995                       First Quarter        4.90        4.00           -
                           Second Quarter        4.90        4.05           -
                            Third Quarter       6 1/8        4.10           -
                           Fourth Quarter       5 7/8        4.75           -
</TABLE>

The following table sets out the high and the low prices in U.S. dollars of
the shares as reported by the American Stock Exchange for board lots, and
dividends paid, during the periods indicated:

<TABLE>
 Period           American Stock Exchange        High          Low     Dividends
 ------           -----------------------      ------      -------     ---------
 <S>             <C>                           <C>         <C>         <C>
 1996                       First Quarter      $5 1/8      $3 9/16            -
                           Second Quarter       4 5/8       3 9/16            -
                            Third Quarter       4 1/8        3 1/2            -
                           Fourth Quarter      4 1/16       3 1/16            -


 1995                       First Quarter       3 1/2      2 13/16            -
                           Second Quarter       3 5/8        2 7/8            -
                            Third Quarter       4 1/2      2 15/16            -
                           Fourth Quarter       4 3/8        3 1/2            -
</TABLE>

As of March 17, 1997, Royal Oak's shareholder register indicates that there
were 7,606 holders of record of common shares.  Of these, 5,902 record holders
of common shares holding an aggregate of 107,910,001 common shares,
representing approximately 77% of Royal Oak's issued and outstanding common
shares, were resident in the United States.

The Company has not paid dividends in the past and currently does not intend
to pay dividends in the foreseeable future.  The Company will retain cashflow
for future exploration, development and acquisitions.

There are no restrictions enforced by Canada or the Province of Ontario,
Canada under which Royal Oak is organized, on the export or import of capital
which affect the remittance of dividends on the Company's securities.

There are no limitations, either by the laws of the Province of Ontario,
Canada under which the Company is organized, or in the charter or other
constating documents of the Company on the right of foreigners to hold or vote
securities of Royal Oak.

Taxes

The following summary describes the principal Canadian federal income tax
considerations generally applicable to a holder of Royal Oak common shares
who, for purposes of the INCOME TAX ACT (Canada) (the "Canadian Tax Act") and
the CONVENTION BETWEEN CANADA AND THE UNITED STATES OF AMERICA WITH RESPECT TO
TAXES ON INCOME AND ON CAPITAL (the "Convention") and at all relevant times,
is resident in the United States and not resident in Canada, deals at arm's
length with Royal Oak, holds Royal Oak common shares as capital property and
does not use or hold and is not deemed to use or hold Royal Oak common shares
in or in the course of carrying on business in Canada (a "United States
holder").

This following summary is based upon the current provisions of the Canadian
Tax Act, the regulations thereunder, all specific proposals to amend the
Canadian Tax Act and the regulations announced by the Minister of Finance
(Canada) prior to the date hereof and an understanding of the published
administrative practices of Revenue Canada, Customs, Excise and Taxation.
This summary does not take into account or anticipate any other changes in the
governing law, whether by judicial, governmental or legislative decision or
action, nor does it take into account the tax legislation or considerations of
any province, territory or non-Canadian (including U.S.) jurisdiction, which
legislation or considerations may differ significantly from those described
herein.

This summary is of a general nature only and is not intended to be, and should
not be interpreted as, legal or tax advice to any prospective purchaser or
holder of Royal Oak common shares and no representation with respect to the
Canadian federal income tax consequences to any such prospective purchaser is
made.  Accordingly, prospective purchasers of Royal Oak common shares should
consult their own tax advisers with respect to their individual circumstances.

Dividends

Dividends and amounts deemed for purposes of the Canadian Tax Act to be
dividends, paid or credited on Royal Oak common shares to non-residents of
Canada will be subject to Canadian withholding tax at the rate of 25% of the
gross amount of such dividends.  In the case of United States holders, under
the Convention, the rate of withholding tax is reduced to 15% of the gross
amount of such dividends, unless the holder is a corporation resident in the
United States which owns at least 10% of the voting shares of Royal Oak, in
which case the withholding tax is levied at the rate of 5% of the gross amount
of such dividends paid.  Pursuant to the Convention, certain tax exempt
entities resident in the United States may be exempt from Canadian withholding
taxes levied in respect of dividends received on Royal Oak common shares.

Disposition of Common Shares

In general, a United States holder will not be subject to Canadian income tax
on capital gains arising on the disposition of Royal Oak common shares,
unless: (i) at any time in the five year period immediately preceding the
disposition, not less than 25% of the issued shares of any series or class
(including any interest in, option in respect of or right of conversion into
such shares) of the capital stock of Royal Oak belonged to the United States
holder, to persons with whom the United States holder did not deal at arm's
length or to the United States holder and persons with whom the United States
holder did not deal at arm's length; and (ii) the United States holder is not
entitled to any relief under the Convention.  Under the Convention, capital
gains arising on the disposition of Royal Oak common shares by a United States
holder will not be subject to Canadian tax provided that the value of Royal
Oak common shares at the time of the disposition is not derived principally
from real property (as defined in the Convention) situated in Canada.  The
Convention defines real property situated in Canada to include rights to
explore for or exploit mineral deposits and other natural resources situated
in Canada, certain other rights in respect of natural resources situated in
Canada and shares of a company the value of whose shares is derived
principally from real property situated in Canada.

Recent Sales Of Unregistered Securities

On January 11, 1996, the Company acquired all of the outstanding shares of
Geddes, El Condor and St. Philips not already owned by the Company pursuant to
a series of signed agreements (the "Plan of Arrangement"), see "Item 7 -
Properties - British Columbia Division - Kemess South - Background".  The
Company paid $3.40 cash for each St. Philips share and acquired the Geddes and
El Condor shares on the following terms:

Geddes            0.30 share of the Company for each share of Geddes
El Condor         0.95 share of the Company plus $2.00 cash for each share of
                  El Condor

In addition to the cash consideration that the Company paid to Geddes, El
Condor and St. Philips shareholders pursuant to the Plan of Arrangement, the
Company issued 19,011,883 common shares at an aggregate offering price of
$114,071,298 or $6.00 per share, which was the closing price of the Company's
common shares on The Toronto Stock Exchange on January 11, 1996.  The shares
were issued without registration under the Securities Act of 1933, as amended
in reliance on an exemption provided by Section 3(a)(10) of that Act.

ITEM 6 - SELECTED FINANCIAL DATA

Five-Year Summary of Results

Production, Reserves and Cost Data
<TABLE>
                                  1996          1995         1994       1993         1992
                             ---------     ---------    ---------   --------    ---------
 <S>                         <C>           <C>          <C>         <C>         <C>
 Production
 Ore milled (tons)           5,772,771     5,556,450    3,992,472   2,892,891   2,160,230
 Recovered gold and            389,203       371,151      318,171     276,320     245,469
 equivalent (oz)
 Cash cost (US$ per ounce)       $ 343         $ 358        $ 311       $ 311       $ 304
 Total Cost (US$ per ounce)      $ 425         $ 410        $ 353       $ 340       $ 346

 Reserves
 Gold (ounces)
 Mineable ore                9,875,000     9,263,000    2,516,000    2,682,000   2,133,000
 Mineralized material        7,384,000     6,303,000    3,969,000    2,327,000   2,381,000
 Total mineral inventory    17,259,000    15,566,000    6,485,000    5,009,000   4,514,000

 Copper (000's pounds)
 Mineable ore                  989,843       989,843           --           --          --
 Mineralized material          623,026       623,026           --           --          --
 Total mineral inventory     1,612,869     1,612,869           --           --          --

 Financial Results (C$000's)
 Revenue                      $255,168      $208,311     $162,111     $135,326    $113,673
 Operating income               29,204         4,933       12,308       15,135      14,176
 Net income (loss)              (5,985)       23,169       22,166       15,623      11,437
 Cash provided by operating
  activities                    57,449        31,760       55,979       18,921       6,334
 Additions to property, plant
  and equipment                123,844        66,018       52,461       26,803      19,889

 Financial Position (C$000's)
 Cash and short-term          $226,025      $142,381     $178,937      $79,644     $12,719
 investments
 Working capital               240,517       158,841      191,050       81,881      13,915
 Total assets                  821,630       428,963      384,074      217,226     111,670
 Senior subordinated notes     239,680            --           --           --          --
 Shareholders  equity          451,366       340,495      302,731      185,362      81,935

 Per Share Data (C$)
 Earnings (loss)                $(0.04)        $0.20        $0.22        $0.19       $0.18
 Cash flow                       $0.42         $0.27        $0.55        $0.23       $0.10
 Common shares outstanding
   (year-end)                138,845,263   119,118,714   114,494,747   96,956,213  69,946,751
 Weighted average common     136,758,106   117,900,306   101,399,347   84,073,179  62,683,117
   shares

Certain of prior years' amounts have been reclassified to conform with the current
year's presentation.
</TABLE>


ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion of the financial results of the Company's operations
for the years 1994 through 1996 should be read in conjunction with the review
of operations, financial data, and the Company's Consolidated Financial
Statements and notes thereto included elsewhere in this report.  The Company's
Consolidated Financial Statements are prepared in accordance with accounting
principles generally accepted in Canada.  In all material respects they
conform with those principles generally accepted in the United States, except
as described in Note 14 to the Company's Consolidated Financial Statements.

Summary of Financial Results
There was a net loss of $6.0 million, or 4 cents per share, on revenues of
$255.2 million for the year ended December 31, 1996.  This compares with net
income of $23.2 million, or 20 cents per share, on revenues of $208.3 million
in 1995, and net income of $22.2 million, or 22 cents per share, on revenues
of $162.1 million in 1994.

The loss in 1996 mainly reflects a charge of $37.6 million against income for
closure costs and the write-down of resource properties and other assets at
the Hope Brook and Colomac mines (see Note 16 to the Consolidated Financial
Statements for a breakdown of these expenses).

Operating income in 1996 was $29.2 million compared to $4.9 million in 1995
and $12.3 million in 1994.  These changes in operating income mainly reflect
the gold price realized by the Company resulting from the contribution of
hedging gains to sales revenue.

In 1996, cash provided by operating activities increased 81% to $57.4 million,
or 42 cents per share, from cash flow of $31.8 million, or 27 cents per share,
in 1995.  In 1994, cash provided by operating activities was $56.0 million, or
55 cents per share.

Revenue

Gold sales
The majority of the Company's revenue is derived from gold sales.  Revenue
varies with the quantity of gold produced and the price received for that
production.  The price of gold is affected by many factors which are beyond
the Company's control.  The Company engages in hedging transactions which
include spot deferred contracts, forward sales contracts, and options
contracts to minimize the impact of fluctuations in the gold price.

In 1996, revenue from gold sales of 389,203 ounces was $255.2 million, an
increase of 22% from revenue of $208.3 million in 1995 when gold sales were
371,151 ounces.  In 1994, revenue was $162.1 million from gold sales of
318,171 ounces.  Production in 1994 included 40,568 ounces from the Colomac
Mine which commenced operations in mid-year.  Because the mine had not reached
commercial levels of production by the end of the year, revenue from this
production was netted against start-up costs and the excess was deferred as
pre-production costs.

Hedging gains in 1996 contributed $51.3 million of the total revenue of $255.2
million.  In 1995, hedging gains accounted for $13.3 million of total revenue
of $208.3 million, and in 1994 hedging gains were $16.5 million of the $162.1
million in revenue.  In 1996, the Company's average realized gold price was
US$481 per ounce, a US$93 per ounce premium over the average spot price of
US$388 per ounce.  This realized price was an increase of 18% from the US$409
per ounce realized in 1995 when the premium was US$25 per ounce above the
average spot price of US$384 per ounce.  In 1994, the average gold price
realized by the Company was US$428 per ounce, a premium of US$44 per ounce
over the average spot price of US$384 per ounce.

The Company's accounting policy on gold hedging transactions is described in
Note 1 to the Consolidated Financial Statements, while the status of these
contracts from 1997 to 2001 is presented in Note 12(c).  At December 31, 1996,
the Company had contractual arrangements to deliver 312,182 ounces of gold at
prices of US$395 to US$445 per ounce from 1997 to the year 2000.  The Company
has opted to deliver 312,182 ounces in 1997 which will realize an average
price of approximately US$395 per ounce of gold.

The weakening of the Canadian dollar against the U.S. dollar during the past
few years, has also contributed to increased revenues, except in 1996 when a
stronger Canadian dollar negatively impacted revenue.

The impact of increased production and of the change in gold price on revenue
for the years 1994 through 1996 are set out in the table below.

<TABLE>
                                             ($ millions)
                                     1996        1995         1994
                                     ----        ----         ----
 <S>                                 <C>         <C>          <C>
 Impact on revenue due to:
 Increased Production                11.8        52.5          0.7
 Increased (Decreased) Prices        35.1        (6.3)        26.1
                                     ----        ----         ----
 Incremental revenue from prior      46.9        46.2         26.8
   year                              ====        ====         ====
</TABLE>

In 1996, an increase in the gold price of US$10 per ounce would have increased
revenue by approximately $5.3 million.

Interest and other income
In 1996, interest and other income decreased to $8.9 million from $21.0
million in 1995 but was higher than the $7.5 million recorded in 1994.  (See
Note 10 to the Consolidated Financial Statements for a breakdown and
comparison of these amounts).  Interest income in 1994 and 1995 reflected
higher cash balances than in previous years due to equity issues and the
exercise of warrants.  Interest income in 1995 includes $1.3 million of
interest received on a refund of 1988 Ontario mining taxes.

Interest income of $6.2 million was lower in 1996 than the $10.8 million
earned in 1995 mainly due to the cash outlay of $218.1 million for the
purchase of El Condor Resources Ltd., St. Philips Resources Inc. and
Consolidated Professor Mines Limited early in the year.  The cash balance
increased significantly again in August of 1996 when the Company issued
US$175.0 million of 11% Senior Subordinated Notes due 2006.  The Company
expects interest income to be approximately $6.0 million in 1997.  See
"Special Note Regarding Forward-Looking Statements".

Surplus cash is primarily invested in highly liquid, low risk financial
instruments with relatively short maturities.  This strategy provides the
Company with maximum flexibility should funds be needed for acquisitions or
other purposes.

In each of the years 1994 through 1996, the Company purchased shares in
certain companies as part of its acquisition strategy to establish an equity
position prior to holding discussions with management regarding a merger or
takeover.  These positions were completely or partially sold when discussions
and negotiations were terminated, resulting in gains on sales of securities.

The gain on sale of securities was $2.7 million in 1996 compared to $8.3
million in 1995 and $1.3 million in 1994.

Other income in 1995 includes a $2.0 million refund of 1988 Ontario mining
taxes previously paid.

Interest and other income is expected to decline significantly in 1997 and for
the next few years as the cash balance is used to fund the capital expenditure
programs on the Company's development and expansion projects.

Costs and Expenses

Operating
In 1996, operating costs of $181.9 million were essentially the same as $182.0
million in 1995.  In 1994, operating costs were $117.8 million when gold
production of 318,171 ounces was significantly lower than the 389,203 ounces
produced in 1996 and 371,151 ounces produced in 1995.  In 1995, the inclusion
of the Colomac Mine operating costs contributed approximately $61.5 million to
the increase from 1994.  In 1994, because the Colomac mill had not reached
commercial levels of production, start-up costs net of revenue from gold sales
were deferred to pre-production costs.

Operating costs are the cash costs incurred at the minesites and include the
mining and processing costs associated with the production of gold.  The most
significant of these costs are labor, consumable materials, fuel and
utilities, and maintenance of machinery and equipment.  The costs of
transporting personnel and freight to the Colomac and Hope Brook mines are
also significant costs for those operations.

In 1996, average cash costs decreased by 4% to US$343 per ounce from US$358
per ounce of gold in 1995.  In 1994, cash costs were US$311 per ounce.  The
increase in unit cash costs in aggregate from 1994 mainly reflects the impact
of high fixed costs, increased electric power costs, declining ore grades, and
lower productivity at certain mines.   The exception is at the Pamour Mine
where unit cash costs decreased significantly in 1996 due to higher mill
throughput and an increase in mill head grade resulting from processing higher
grade ore from the Nighthawk Mine.  An analysis of costs on a mine-by-mine
basis is presented in the "Review of Operations" of this Annual Report.

Royalties and marketing
Royalties and marketing expenses were $2.9 million in 1996, $2.5 million in
1995, and $2.5 million in 1994.  The increase mainly reflects increased gold
production and gold price in the case of royalties.  In each year 1994 through
1996, the Hope Brook Mine paid an annual royalty of $1.3 million.  This
agreement expired in 1996 and no royalty will be payable on production from
the Hope Brook Mine in 1997.  A royalty is payable on gold production from the
Nighthawk Mine which commenced production in September 1995.

Administrative and corporate
Administrative and corporate expenses in 1996 increased by 9% to $9.3 million
from $8.5 million in 1995, and were $5.3 million in 1994.  In both 1996 and
1995, salary and benefit costs increased due to staff additions at the
corporate office to manage the future growth of the Company.  In 1995, costs
incurred during the relocation of the Company's corporate office from
Vancouver, British Columbia to Kirkland, Washington, amounted to $0.5 million.
Administrative and corporate expenses are expected to be approximately $10.0
million annually over the next few years.  See "Special Note Regarding
Forward-Looking Statements".

Depreciation and amortization
Depreciation and amortization increased by 82% in 1996 to $24.9 million (US$47
per ounce of gold) from $13.6 million (US$27 per ounce) in 1995.  In 1994,
depreciation and amortization was $8.5 million (US$20 per ounce).  Increases
in capital assets and deferred mining costs over the past several years at the
Colomac and Nighthawk mines, combined with downward adjustments to mining
reserves on specific properties, have led to these increases.  Depreciation
and amortization are provided on the unit-of-production method based upon the
estimated gold contained in total mineral inventory.  See "Special Note
Regarding Forward-Looking Statements".  Depreciation and amortization in 1997
is expected to be approximately $22.0 million.  The decrease from 1996
reflects the write-down in the carrying value of the Colomac and Hope Brook
assets.

Reclamation
Management makes a provision for future reclamation costs on ultimate closure
of a mine or abandonment of a property.  The reclamation provision in 1996 was
$2.7 million compared to $1.3 million in 1995 and $0.2 million in 1994.
Reclamation expenses at the minesites have become more significant to the
Company as it expands its operations and maintains compliance with more
stringent environmental laws and regulations.  Estimated reclamation and site
restoration costs are charged against income on the unit-of-production method
based upon the estimated gold contained in total mineral inventory.

Exploration and other
Excluding exploration costs that were capitalized, exploration and other
expenses were $4.7 million in 1996 compared to $0.6 million in 1995 and $0.2
million in 1994.  The Company significantly increased its expenditures on
exploration in 1996 in order to increase ore reserves.  See Note 1 to the
Consolidated Financial Statements for the Company's accounting policy on
exploration.  The Company has budgeted approximately $10.0 million annually on
exploration over the next few years of which approximately $4.0 million is
expected to be expensed.  See "Special Note Regarding Forward-Looking
Statements".

Foreign currency contracts
The Company enters into foreign currency contracts for protection from
fluctuations in the U.S. dollar - Canadian dollar exchange rate, and to
provide a minimum Canadian dollar conversion rate for its U.S. dollar gold
sales revenue.  These contracts are associated with the Company's contractual
obligation to deliver future gold production at specified prices in U.S.
dollars.  The status of these contracts is described in Note 6(b) and 12(c) to
the Consolidated Financial Statements.  In 1996 and 1995, the Company made
provisions for a recovery of $0.5 million and $5.2 million on foreign currency
contracts, respectively, compared to a provision for a loss of $15.3 million
in 1994.

Interest expense
In August 1996, the Company issued US$175.0 million of 11% Senior Subordinated
Notes due 2006, the proceeds of which will be mainly used to finance
construction of the Kemess and other development projects.  In 1996, the
Company incurred an interest expense of $10.1 million on these notes.  An
amount of $5.4 million of interest related to funding the development projects
was capitalized in 1996.  The Company estimates an interest expense on the
Notes of approximately $26.0 million in 1997 of which approximately $22.0 will
be capitalized to development projects.  See "Special Note Regarding Forward-
Looking Statements".

Closure costs and write-down of resource properties and other assets
As previously mentioned, in 1996 there were closure costs and write-down of
resource properties and other assets of $37.6 million related to the Hope
Brook and Colomac mines.  The Hope Brook mill and mine equipment will be
dismantled after closure in September 1997 and relocated to the Matachewan
project in Ontario for longer term economic benefit to the Company.  In
addition, as a result of a reclassification of mineable reserves at the
Colomac Mine, a provision has been made to decrease the carrying value of the
Colomac property.  Details of these charges are given in Note 16 to the
Consolidated Financial Statements.  In 1995 there was a write-down of $0.9
million.

Income taxes
The Company paid minimal income taxes in 1996, 1995 and 1994.  The Company has
tax deductions, including earned depletion and mining exploration depletion,
available to be utilized in future years amounting to $212 million.  Because
of past reorganizations undertaken by the Company, utilization of some of
these tax deductions may be restricted.  The Company does not expect to pay
significant cash income taxes or mining taxes in Canada for at least the next
two years.  However, the Company is subject to capital taxes and minimum taxes
in certain Canadian jurisdictions.  The Company's U.S. operations are taxable,
however, the total of 1997 U.S. taxes is not expected to be material.

The balance of the Company's unrecognized deferred income tax assets is
decreasing.  Accordingly, the Company expects to report a deferred income tax
provision in 1997 which will increase the Company's effective tax rate above
6% in 1995.  In 1996, because the Company incurred a loss, there was a
negative effective tax rate of 20%.  The Company's tax accounts and tax
position are described in Notes 9 and 14(c) to the Consolidated Financial
Statements.

Cash Flow
<TABLE>
 Sources of Cash
 <S>                      <C>
 1996                     $ millions
 ----                     ----------
 Operating activities           57.4
 Issue of shares               116.9
 Issue of notes                230.9
 Long-term                      28.9
 investments/other
                          ----------
 Total                         434.1
                          ==========

 1995                           49.1
 1994                          152.2

 Uses of Cash

 1996                     $ millions
 -----                    ----------
 Acquisition of                202.0
 Kemess
 Acquisition of                 16.1
 Duport
 Capital expenditures          123.8
 Investments/other               8.5
                          ----------
 Total                         350.4
                          ==========

 1995                           85.6
 1994                           52.9
</TABLE>

Operating activities
Net cash provided by operating activities increased by 81% to $57.4 million in
1996 from $31.8 million in 1995, and was 3% higher than $56.0 million recorded
in 1994.  The combination of increased gold production and higher realized
gold prices on revenue and operating income has had a positive impact on
operating cash flow.  The provision for (recovery of) loss on foreign currency
contracts was a significant non-cash item in 1995 and 1994, but was not
significant in 1996 when the recovery reduced cash flow by $0.5 million.  In
1995 there was a recovery of $5.2 million which resulted in a reduction to
cash flow compared to 1994 when there was a favourable contribution to cash
flow of $15.3 million.

In respect to non-cash items, increases in depreciation in each of the last
three years, and to a lesser extent increases in reclamation provisions, have
had a positive impact on net cash provided by operating activities.  In 1996,
the closure costs and write-down of resource properties and other assets of
$37.6 million for the Hope Brook and Colomac mines had a significant positive
impact on cash provided by operating activities.  Net changes in other
operating items of $2.3 million in 1996 and $2.0 million in 1995 were used in
operating activities compared to a positive contribution of $12.9 million in
1994.

Financing activities
Cash provided by financing activities amounted to $349.8 million in 1996
compared to $17.3 million in 1995 and $96.2 million in 1994.  In 1996, the
Company issued equity and debt securities, principally to acquire and fund the
development and construction of the Kemess gold-copper project.  The Kemess
Mine is expected to be a major contributor to the Company's growth in gold
production and cash flow starting in 1998.  The issue of common shares
provided $116.9 million in cash, of which the equivalent of $114.1 million in
Royal Oak shares was part payment for the purchase of El Condor Resources Ltd.
(the remainder being cash), and Geddes Resources Limited.  In 1995, the
exercising of warrants provided $14.6 million in cash, while in 1994 a public
offering of common shares provided the Company with $95.2 million in cash.  In
1996, the Company issued debt securities for the first time.  The issue of 11%
Senior Subordinated Notes due 2006 provided $230.9 million, net of issue
costs, to the Company's treasury.  The Company's debt to total capitalization
at year-end 1996 was 35%.

The Company currently has no plans to issue further equity or debt securities
to fund the construction of its development projects in 1997.  The Company can
draw on a $28 million unsecured, revolving line of credit with a major
Canadian bank as required to fund working capital needs for current
operations.

Investing activities
Net cash used in investing activities amounted to $323.6 million in 1996 and
was significantly higher than in previous years.   In 1995 and 1994, the
comparable amounts were $85.6 million and $52.9 million, respectively, and
mainly reflected additions to capital assets and properties of $66.0 million
in 1995 and $52.5 million in 1994.  In 1996, $202.0 million in cash and Royal
Oak shares was invested to acquire the Kemess assets.  Approximately $123.8
million in cash was used for net additions to property, plant and equipment of
which $49.0 million was spent on construction of the Kemess project.  The
acquisition of the Duport project amounted to $16.1 million.

Royal Oak's net cash requirement to fund capital projects in 1997 is estimated
at approximately $222 million, including approximately $14 million in
sustaining capital at current operations, and after a contribution of up to
$108 million from the British Columbia government for the Kemess project.

Liquidity and Capital Resources
Working capital was $240.5 million at year-end 1996, of which cash and
equivalents and marketable securities amounted to $226.0 million.  Working
capital was $158.8 million at the end of 1995, of which cash and equivalents
and marketable securities amounted to $142.4 million.  The increase mainly
reflects the net result of additions of cash to the Company's treasury
provided by the debt and equity issues.  The total of cash and equivalents,
and the commitment of funds from the British Columbia provincial government
for the Kemess project, provide the Company with a high degree of liquidity to
meet the cash outflow needs of the capital spending program and other working
capital needs of the Company in 1997.  The current ratio was 4.3:1 at year-end
1996 and 4.7:1 at year-end 1995.  Working capital is expected to decline in
1997 and 1998 as the Company uses cash to fund construction of its development
projects.

Risks and Uncertainties

Financial risks
The Company s profitability is primarily dependent on the quantity of gold
produced at its operations; the selling price of gold; the Canadian/U.S.
dollar exchange rate; and the capital and operating costs to produce the gold.
The selling price of gold and the exchange rate are beyond management s
control and are therefore considered to present the greatest risk to
maintaining profitability.  The Company employs hedging strategies to mitigate
the risk of these two variables.  The credit risk related to hedging
activities is limited to the unrealized gains on outstanding contracts based
on current market prices.  The Company believes it has minimized credit risk
by dealing with large credit-worthy institutions and by limiting credit
exposure to each.

The Company has consistently realized among the highest revenues per ounce of
gold in the mining industry through successful hedging strategies which take
advantage of the volatility in the spot gold price and the contango on future
gold prices.  Hedging gains are generated from spot deferred, forward sales
and call option contracts which are employed to provide price protection while
retaining the ability to benefit from higher gold prices.  The status of these
contracts is described in Note 12(c) to the Consolidated Financial Statements.
The Company is confident that it will continue to realize a gold price
significantly higher than the average spot price, although there can be no
assurance that the premiums of US$93 in 1996, US$25 in 1995, and US$44 per
ounce in 1994 can be maintained.

The Company has entered into oil swap agreements to hedge the cost of crude
oil which is used to generate power at the Colomac Mine.  The cost of power is
a significant component of total operating costs at Colomac.  The status of
these contracts is described in Note 12(c) to the Consolidated Financial
Statements.

The Company sells its gold production in U.S. dollars which are converted to
Canadian dollars, the currency in which the majority of the Company's costs
are incurred.  The Company also reports its financial statements in Canadian
dollars.  From 1991 to 1995, sales revenues have been beneficially impacted by
a weakening Canadian dollar.  There can be no assurance that this trend will
continue, as evidenced in 1996 when the Canadian dollar strengthened slightly
against the U.S. dollar.  The Company has US$/C$ foreign currency contracts in
place, the status of which are described in Note 12(c) to the Consolidated
Financial Statements.

Operating and capital costs are subject to inflationary factors.  The
financial statements of the Company reflect historical costs; hence they do
not show the cumulative effects of increasing costs and changes in the
purchasing power of the dollar.

Certain of the Company's costs have increased because of inflation.  Overall,
costs may increase more or less than general inflation rates as a result of
factors inherent in the mining industry and geographical location.  On the
other hand, the selling price of gold is influenced primarily by international
markets and other political, monetary and economic events and may not rise
with inflation.  Consequently, the Company cannot counter rising costs of
production by increasing selling prices, but must rely on controlling costs
within its ability by continually searching for and implementing more cost
efficient methods of mining and processing.

The ability to reduce unit cash costs is dependent on maintaining or
increasing ore grades, production tonnages and productivity in order that the
mines and mills can operate optimally.  In recent years the mill head grades
have generally declined due to a number of factors including lower ore grades
and mining dilution.  The Company has implemented plans to restore mined ore
grades to former levels, and in certain cases to increase mill feed grades by
bringing nearby deposits containing higher grade ore into production.

Reserve estimates may require revisions based on actual production experience.
The ore grade actually recovered may differ from the estimated grade of the
reserves.  Fluctuations in the gold price, as well as increased production
costs or reduced recovery rates, may render reserves containing relatively
lower grades of mineralization uneconomic to recover and may ultimately result
in a restatement of reserves.

The Company is continually seeking to replace and expand its reserves.  The
Company encounters competition from other mining companies, some with
significantly greater financial resources than the Company, in connection with
the acquisition of properties.  In addition, there are a number of
uncertainties inherent in any program relating to the location of economic ore
reserves, the development of appropriate metallurgical processes, the receipt
of necessary governmental permits and the construction of mining and
processing facilities and the appropriate financing of exploration,
development and operations.  Accordingly, no assurance can be given that the
Company's exploration programs will result in the replacement of current
production with new reserves or that development programs will be able to
extend the life of existing mines.

The Company takes a prudent approach to business and maintains adequate
insurance at all times to cover normal business risks.

Environmental risks
The Company's mining operations and exploration activities are subject to
extensive federal, provincial, state and local laws and regulations governing
exploration, development, production, exports, taxes, labor standards,
occupational health and safety, waste disposal, monitoring, protection and
remediation of the environment, reclamation, mine safety, toxic substances and
other matters.  Compliance with such laws and regulations increases the costs
of planning, designing, drilling, developing, constructing, operating and
closing mines and other facilities.  It is possible that the costs and delays
associated with compliance with such laws and regulations could become such
that the Company would not proceed with the development or continue the
operation of a mine or mines.

Royal Oak conducts its operations so as to protect its employees, the general
public and the environment and believes its operations are in compliance with
all applicable laws and regulations, in all material respects.

The Company is not able to determine the impact of future changes in
environmental laws and regulations, which are generally becoming more
restrictive, on its operations and future financial position due to the
uncertainty surrounding the ultimate form such changes may take.  Insurance
against certain liabilities for environmental pollution or other hazards as a
result of exploration and production is not generally available to companies
in the mining industry.  Without such insurance, if the Company becomes
subject to environmental liabilities, the payment of such liabilities would
reduce its available funds.  The Company believes that it has made adequate
financial provisions for the costs associated with mine closures and
reclamation, and is of the opinion that any changes to environmental laws and
regulations in the future should not have a material effect on the Company.

Political and other risks
All of the Company's mining operations are located in Canada and as such the
Company is not exposed to the political and economic risks associated with
operating in foreign countries.  The Company has an exploration and
development project (Copperstone) in the United States.  The Company's
interest in gold in China is through Asia Minerals Corp., a 44%-owned Canadian
affiliated company.  The Company believes that the risks and uncertainties of
operating and investing in these countries are manageable and reasonable
relative to the expected benefits.

Because the Company's new development projects are located in remote areas of
Canada and the United States, the Company is exposed to intervening parties
such as First Nations groups and various cottage residents.  In order to
minimize any potential risk to a project, the Company does not proceed with
development until all permits and licenses have been received.  The Company
works with special interest groups to understand their needs and provides
contract and employment opportunities to these groups.

Outlook

The statements contained in this Outlook are based on current expectations.
These statements are forward-looking and actual results may differ materially.
See "Special Note Regarding Forward-Looking Statements".

The outlook for Royal Oak over the next few years is most encouraging as the
Company develops a number of major capital projects that are expected to
increase gold production to approximately one million ounces by the year 2000,
and at the same time reduce cash costs significantly.  This will achieve a
major strategic objective set by management three years ago.

Each year since the acquisition of the Pamour and Giant Yellowknife Groups in
November 1990, the Company has increased its gold production, mineral
inventory, revenue, shareholders' equity and total assets through a number of
acquisitions.  This growth has been reflected in the market capitalization of
the Company which has increased significantly, from $90 million at the end of
1991 to $617 million at the end of 1996.  The Company's growth has been funded
by issuing new equity and debt while the Company has maintained a strong
balance sheet.  This 586% increase in market capitalization has been
accompanied by a 151% increase in the number of common shares outstanding.

The Company recognizes that further dilution of shareholders' equity is not
desirable and has no plans to issue more equity to fund the development and
construction of its capital projects.  Approximately $550 million (net to
Royal Oak) will be required to fund these projects over the next four years
and will be sourced from cash in treasury, operating cash flow and economic
assistance and compensation from the B. C. government.  In 1996, the Company
increased its cash position by issuing debt securities to complete the funding
of the Kemess project.  At year end, the debt to total capitalization ratio
was 35%.  The Company will maintain appropriate liquidity and a prudent level
of debt as it funds its aggressive growth.

Royal Oak's gold production has increased since 1990 primarily through the
acquisitions of the Hope Brook Mine and the Colomac Mine.  Gold production is
scheduled to decrease slightly from 389,203 ounces in 1996 to approximately
375,000 ounces in 1997 due to closure of the Hope Brook Mine in September of
1997.  Gold production in 1998 is estimated at approximately 508,000 ounces,
and 735,000 ounces in 1999.  Increases in production will come from Kemess,
Matachewan, the Pamour expansion and a number of other smaller projects
currently under development over the next four years.

Royal Oak begins 1997 with 9.9 million ounces of gold in mineable ore
reserves.  The Company plans to maintain an active exploration program on its
properties to increase ore reserves with expected expenditures of
approximately $10 million per year.  Royal Oak expects increased earnings and
cash flow for shareholders as lower-cost gold production and ore reserves
increase in the years ahead.


ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Statements

Report of Management Responsibility

Report of Independent Auditors

Consolidated Balance Sheets as of December 31, 1996 and 1995.

Consolidated Statements of Income and Retained Earnings for each of the three
years in the period ended December 31, 1996.

Consolidated Changes in Capital Stock for each of the three years in the
period ended December 31, 1996.  (See Note 8(a) of the Notes to Consolidated
Financial Statements).

Consolidated Statements of Cash Flow for each of the three years in the period
ended December 31, 1996.

Notes to Consolidated Financial Statements.


                       Consolidated Financial Statements

Accounting Responsibilities, Procedures and Policies

The Board of Directors which, among other things, is responsible for the
Consolidated Financial Statements of the Company, delegates to management the
responsibility for the preparation of the financial statements.
Responsibility for their review is that of the Audit Committee.  Each year the
shareholders appoint independent auditors to audit and report directly to them
on the consolidated financial statements.

In preparing financial statements, great care is taken to use the appropriate
generally accepted accounting principles and estimates considered necessary by
management to present fairly and consistently the consolidated financial
position and the results of operations.  The significant accounting policies
followed by the Company are summarized on the following pages.

The accounting systems employed by the Company include such appropriate
controls, checks and balances to provide reasonable assurance that the
Company's assets are safeguarded from loss or unauthorized use as well as
facilitating the preparation of comprehensive, timely and accurate financial
information.  There are limits inherent in all systems based on the
recognition that the cost of such systems should not exceed the benefits to be
derived.  The Company believes its systems provide the appropriate balance in
this respect.

The Company's Audit Committee is appointed by the Board of Directors annually
and comprises three members including two non-management directors.  The
Committee meets with management and with the independent auditors (who have
free access to the Audit Committee) to satisfy itself that each group is
properly discharging its responsibilities and to review the financial
statements and the independent auditors' report.  The Audit Committee reports
its findings to the Board of Directors for its consideration in approving the
financial statements for issuance to the shareholders.

February 6, 1997


/s/ M. K. Witte
------------------------------------
M.K. Witte
President and Chief Executive Officer



/s/ J. H. Wood
---------------------------------------
James H. Wood
Chief Financial Officer


Auditors  Report to the Shareholders

We have audited the consolidated balance sheets of Royal Oak Mines Inc. as at
December 31, 1996 and 1995 and the consolidated statements of income and
retained earnings and cash flow for the years ended December 31, 1996, 1995
and 1994.  These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.

In our opinion, these Consolidated Financial Statements present fairly, in all
material respects, the financial position of the Company as at December 31,
1996 and 1995 and the results of its operations and its cash flows for the
years ended December 31, 1996, 1995 and 1994 in accordance with generally
accepted accounting principles.


                                                         Arthur Andersen & Co.
                                                         Chartered Accountants
Vancouver, B.C.
February 6, 1997

                             ROYAL OAK MINES INC.
                          Consolidated Balance Sheets
                      (in thousands of Canadian dollars)
<TABLE>
                                                December 31             December 31
                                                       1996                    1995
                                                ===========             ===========
 <S>                                            <C>                     <C>
 ASSETS
 Current Assets
   Cash and cash equivalents                       $197,766                $139,410
   Marketable securities                             28,259                   2,971
   Receivables                                       17,492                   7,138
   Inventories (note 3)                              61,844                  46,136
   Prepaid expenses                                   7,729                   5,620
                                                -----------             -----------
      Total Current Assets                          313,090                 201,275
 Property, Plant and Equipment                      482,733                 191,381
 (note 4)
 Long-Term Investments (note 5)                      16,586                  36,307
 Deferred Charges and Other Assets                    9,221                      --
                                                -----------             -----------
                                                   $821,630                $428,963
                                                ===========             ===========

 LIABILITIES
 Current Liabilities
    Accounts payable                                $21,094                 $13,640
    Accrued payroll costs                             3,514                   5,267
    Deferred revenue and capital leases
      (note 6)                                       13,508                   5,495
    Income taxes payable (note 9)                     3,894                   3,350
    Senior subordinated notes interest
      payable (note 7)                               10,180                      --
    Other current liabilities                        20,383                  14,682
                                                -----------             -----------
      Total Current Liabilities                      72,573                  42,434

 Deferred Revenue and Other                          52,827                  40,800
 Liabilities (note 6)
 Senior Subordinated Notes (note 7)                 239,680                      --
 Deferred Income Taxes (note 9)                       5,064                   5,064
 Minority Interest in Subsidiary                        120                     170
   Companies
                                                -----------             -----------
 TOTAL LIABILITIES                                  370,264                  88,468
                                                -----------             -----------

 Contingencies and Commitments (note 12)

 SHAREHOLDERS' EQUITY
 Capital Stock (note 8)
    Common stock
    Authorized - unlimited
    Outstanding - 138,845,263
          (1995 - 119,118,714)                      378,813                 261,957
 Retained Earnings                                   72,553                  78,538
                                                -----------             -----------
 TOTAL SHAREHOLDERS' EQUITY                         451,366                 340,495
                                                -----------             -----------
 TOTAL LIABILITIES AND                             $821,630                $428,963
 SHAREHOLDERS' EQUITY
                                                ===========             ===========

 The accompanying notes are an integral part of the Consolidated Financial
 Statements.
</TABLE>


                        ROYAL OAK MINES INC.
                       Consolidated Statements of Income
          (in thousands of Canadian dollars except per share amounts)
<TABLE>
                                                  Year ended December 31
                                      ----------------------------------------------
                                           1996              1995               1994
                                      =========         =========          =========
 <S>                                  <C>               <C>                <C>
 REVENUE                               $255,168          $208,311           $162,111

 EXPENSES
   Operating                            181,869           182,024            117,790
   Royalties and marketing                2,904             2,535              2,490
   Administrative and corporate           9,339             8,549              5,271
   Depreciation and                      24,900            13,645              8,525
     amortization
   Reclamation                            2,663             1,250                212
   Exploration and other                  4,742               619                248
   Provision for (Recovery of) loss on
     foreign currency contracts            (453)           (5,244)            15,267
     (note 6(b))
                                      ---------         ---------          ---------
       Total operating expenses         225,964           203,378            149,803
                                      ---------         ---------          ---------
 OPERATING INCOME                        29,204             4,933             12,308

 OTHER INCOME (EXPENSE)
   Interest and other income,             8,934            21,010              7,511
     net (note 10)
   Interest expense                        (378)             (298)               (62)
   Senior subordinated notes            (10,089)               --                 --
     interest
   Senior subordinated notes              5,362                --                 --
     interest capitalized
   Closure costs and write-down of      (37,633)             (891)                --
     resource properties and other
     assets (note 16)
   Gain on issuance of shares by associated
     company                                 --                --              3,020
                                       --------         ---------           --------
 INCOME (LOSS) before                    (4,600)           24,754             22,777
   undernoted
   Income and mining taxes -               (900)           (1,542)              (636)
     current (note 9)
   Minority interest                         50               594                 --
   Equity in income (loss) of              (535)             (637)                25
     associated companies
                                       --------         ---------           --------
 NET INCOME (LOSS)                       (5,985)           23,169             22,166

 RETAINED EARNINGS - BEGINNING           78,538            55,369             33,203
 OF PERIOD
                                       --------         ---------           --------
 RETAINED EARNINGS - END OF            $ 72,553         $  78,538           $ 55,369
 PERIOD
                                       ========         =========           ========

 EARNINGS (LOSS) PER SHARE -           $  (0.04)        $    0.20           $   0.22
   BASIC (note 8)
                                       ========         =========           ========
 EARNINGS (LOSS) PER SHARE -           $  (0.04)        $    0.20           $   0.22
   FULLY DILUTED
                                      =========         =========           ========
 Weighted average number of common shares
   outstanding (000's)                  136,758           117,900            101,399
                                      =========         =========           ========

 The accompanying notes are an integral part of the Consolidated Financial Statements.
</TABLE>


                             ROYAL OAK MINES INC.
                     Consolidated Statements of Cash Flow
                      (in thousands of Canadian dollars)

<TABLE>
                                                 Year ended December 31
                                                --------------------------------
                                                  1996               1995               1994
                                              ========           ========           ========
 <S>                                          <C>                <C>                <C>
 CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
   Net income (loss) for the period            $(5,985)           $23,169            $22,166
   Items not affecting cash:
     Depreciation and amortization              24,900             13,645              8,525
     Reclamation                                 2,663              1,250                212
     Provision for (Recovery of) loss on foreign
       currency contracts                         (453)            (5,244)            15,267
     Closure costs and write-down of resource
       properties and other assets              37,633                891                 --
     Gain on issuance of shares by associated
       company                                      --                 --             (3,020)
     Other                                       1,014                 44                (25)
                                              --------           --------           --------
                                                59,772             33,755             43,125
 Net change in other operating items (note      (2,323)            (1,995)            12,854
   13)
                                              --------           --------           --------
 Net cash provided by operating activities      57,449             31,760             55,979
                                              --------           --------           --------
 CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
   Issue of common shares (note 8(a))          116,855             14,595             95,203
   Issue of senior subordinated notes          239,680                 --                 --
   Issue costs of senior subordinated notes     (8,786)                --                 --
   Accrued reclamation on acquisition               --              3,000                 --
     (note 4)
   Other                                         2,001               (300)             1,037
                                              --------           --------           --------
 Net cash provided by financing activities     349,750             17,295             96,240
                                              --------           --------           --------
 CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
   Investment in Kemess capital assets through
     purchase of companies                    (201,976)                --                 --
   Decrease in long-term investments            26,882                 --                 --
   Investment in capital assets through
     purchase of Consolidated Professor
     Mines Limited                             (16,100)                --                 --
   Net additions to property, plant and
     equipment                                (123,844)           (66,018)           (52,461)
   Investment, net of sales                     (7,697)           (19,025)              (415)
   Other assets                                   (820)              (568)               (50)
                                              --------           --------           --------
 Net cash used in investing activities        (323,555)           (85,611)           (52,926)
                                              --------           --------           --------
 INCREASE (DECREASE) IN CASH AND MARKETABLE
   SECURITIES DURING PERIOD                     83,644            (36,556)            99,293
 CASH AND MARKETABLE SECURITIES AT
   BEGINNING OF PERIOD                         142,381            178,937             79,644
                                              --------           --------           --------
 CASH AND MARKETABLE SECURITIES AT END OF     $226,025           $142,381           $178,937
   PERIOD
                                              ========           ========           ========
 Cash paid for:
   Income taxes                                   $788             $1,542               $636
   Interest expense                               $378               $298                $62

The accompanying notes are an integral part of the Consolidated Financial
Statements.
</TABLE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(tabular amounts in thousands of Canadian dollars unless otherwise stated)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of Royal Oak Mines Inc. (the "Company"),
amalgamated under the laws of the province of Ontario, have been prepared by
management in Canadian dollars in accordance with accounting principles
generally accepted in Canada. In all material respects, these accounting
policies are in conformity with accounting policies generally accepted in the
United States except as disclosed in note 14.

USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

BASIS OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its subsidiaries. The Company's principal subsidiaries include: Arctic
Precious Metals, Inc., Kemess Mines Inc., Consolidated Professor Mines
Limited, Beaverhouse Resources Ltd., 934962 Ontario Inc., 10502 Newfoundland
Ltd., and Witteck Development Inc. (all 100% owned); and Ronnoco Gold Mines
Limited (89% owned).

Joint ventures are accounted for on the proportionate consolidation method.

CASH EQUIVALENTS
The Company defines cash equivalents as highly liquid financial instruments
purchased with a maturity of ninety days or less.

MARKETABLE SECURITIES
Marketable securities are recorded at the lower of cost or quoted market
value.

INVENTORIES
Bullion which is in process but not yet in deliverable form is
recorded at estimated realizable value. Stores and operating
supplies are recorded at the lower of average cost or replacement
cost.

PROPERTY, PLANT AND EQUIPMENT
(I)   Plant and equipment and mining properties are recorded at cost.

(ii)  For underground operations, development expenditures incurred to expose
ore, increase production or extend the life of a mine which is currently in
production are capitalized.

(iii)   For open pit operations, mining costs are deferred when the ratio of
waste tons mined to ore tons mined exceeds the estimated life-of-mine strip
ratio. These deferred costs are charged to operating costs when the actual
ratio is below the life-of-mine strip ratio.

(iv)   Exploration, development and other pre-production expenditures incurred
on projects under development are capitalized.

(v)    Costs relating to the acquisition and exploration of non-producing
properties on which economically recoverable ore reserves have yet to be
identified are capitalized. The ultimate recovery of these costs depends upon
the discovery and development of economic ore reserves or the sale of the
mineral rights. When it has been established that a mineral property has
development potential, the exploration costs incurred are reclassified to the
category of mining properties. If an exploration property is abandoned, the
capitalized costs for that property are charged to income. The amounts shown
for non-producing properties do not necessarily reflect present or future
values.

(vi)   Depreciation and amortization of plant and equipment, mining properties
and capitalized expenditures are provided on the unit-of-production method
based upon estimated total mineral inventory.

(vii)  Reviews are undertaken regularly to evaluate the carrying values of
operating mines and development properties. If it is determined that the net
recoverable amount is significantly less than the carrying value and the
impairment in value is permanent, a write-down is made with a charge to
income.

INVESTMENTS IN ASSOCIATED COMPANIES
Investments in associated companies in which the Company has significant
influence are accounted for by the equity method.

RECLAMATION AND SITE RESTORATION COSTS
Estimated reclamation and site restoration costs are charged against income on
the unit-of-production method based upon estimated total mineral inventory.
Ongoing reclamation activities are charged against income as incurred.

REVENUE RECOGNITION
Revenue from gold production is recognized when the ore is mined and processed
at the on-site facility. Revenue is subject to adjustment on final settlement
to reflect changes in metal prices, weights and assays.

HEDGING TRANSACTIONS
Hedging transactions include spot deferred contracts, forward sale contracts
and option contracts. Contracted prices on spot deferred and forward sales
contracts are recognized in revenue as production is delivered against the
commitment. If actual delivery is not made against a particular spot deferred
contract at the time of maturity, losses, if any, are recognized at that time.

Gains and losses arising from the early liquidation of hedging contracts are
deferred and are recognized in revenue when the original contract would have
matured.

Net proceeds realized on the sale of options are deferred and are recognized
in revenue on the expiry date for options which expire or are repurchased, or
on the delivery date for options which have been exercised and for which the
settlement of the underlying ounces has been deferred.

INTEREST CAPITALIZED
The Company capitalizes interest on substantial development projects.

INCOME TAXES
The Company follows the deferral method of applying the tax allocation basis
of accounting for income taxes. Under this method, timing differences between
the period when income or expenses are reported for tax purposes and the
period when they are recorded for accounting purposes result in provisions or
recoveries of deferred income taxes.

FOREIGN CURRENCY TRANSLATION
Financial statements of the Company s principal United States subsidiary,
Arctic Precious Metals, Inc., are translated into Canadian dollars using the
temporal method. Under this method, monetary assets and liabilities are
translated at the year-end exchange rate and non-monetary assets and
liabilities and operating results are translated at the historical exchange
rate prevailing at the date of the transaction. Gains and losses arising from
the translation of the financial statements are included in the results of
operations.

SEGMENTED INFORMATION
The Company operates within one dominant industry segment, gold mining,
carried out in the Northwest Territories, Newfoundland, and Ontario, Canada.

COMPARATIVE FIGURES
Certain of prior years' amounts have been reclassified to conform with the
current year's presentation.

2. FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amount and fair value of the following financial instruments are:

<TABLE>
                                                        December 31
                                ---------------------------------------------------------
                                           1996                           1995
                                ---------         --------      --------         --------

                                 Carrying             Fair      Carrying             Fair
                                   Amount            Value        Amount            Value
                                ---------         --------      --------         --------
 <S>                            <C>               <C>           <C>              <C>
 Cash and cash equivalents       $197,766         $197,766      $139,410         $139,410
 Marketable securities            $28,259          $28,259        $2,971           $4,436
 Long-term investment             $16,586          $26,788       $36,307          $42,721
 Senior subordinated notes       $239,680         $239,680            --               --
</TABLE>

The carrying value of cash and cash equivalents approximates fair value
because of the short maturity of these instruments.

The fair value of marketable securities and long-term investments is based on
quoted market values.

In the opinion of management, the fair value of senior subordinated notes is
not materially different from the carrying value.

3. INVENTORIES
<TABLE>
                                               December 31
                                         -----------------------
                                            1996            1995
                                         -------         -------

 <S>                                     <C>             <C>

 Bullion in process                      $25,687         $18,574
 Stores and operating supplies            36,157          27,562
                                         -------         -------
                                         $61,844         $46,136
                                         =======         =======
</TABLE>

4. PROPERTY, PLANT AND EQUIPMENT

<TABLE>
                                                                   December 31
                                                              ---------------------------
                                                                  1996               1995
                                                              --------           --------
                                              Accumu-
                                                lated              Net                Net
                                              Amorti-             Book               Book
                                 Cost          zation            Value              Value
                             --------         -------         --------           --------
 <S>                         <C>              <C>             <C>                <C>
 Plant and Equipment         $105,223         $24,219          $81,004            $60,821
 Mining Properties and
   Deferred Development       406,700          31,621          375,079            104,997
 Exploration Costs and
   other Non-producing
   Properties                  26,650           --              26,650             25,563
                             --------         -------         --------           --------
                             $538,573         $55,840         $482,733           $191,381
                             ========         =======         ========           ========
</TABLE>

The following is a summary of the net book value of the Property, Plant and
Equipment by location:

<TABLE>
                                             Mining
                                         Properties
                              Plant             and       Explor-
                                and        Deferred         ation          December 31
                             Equip-        Develop-           and     --------------------
 Location                      ment            ment         Other         1996        1995
 -------------              -------      ----------       -------     --------    --------
 <S>                        <C>          <C>               <C>        <C>         <C>
 Giant                      $26,748         $21,376        $4,418     $52,542     $49,936
 Colomac                     17,298          13,661           614      31,573      45,918
 Timmins                     23,892          47,986        18,071      89,949      59,931
 Matachewan                      --           5,351            --       5,351         132
 Duport                          --          16,100            33      16,133          --
 Newfoundland                 8,573             354         1,386      10,313      19,697
 British Columbia             1,143         270,062           739     271,944      10,730
 U.S. and other               3,350             189         1,389       4,928       5,037
                            -------      ----------       -------     --------    --------
                            $81,004        $375,079       $26,650     $482,733    $191,381
                            =======      ==========       =======     ========    ========
</TABLE>

5. LONG-TERM INVESTMENTS
<TABLE>
                                                              December 31
                                                       -------------------------
                                                          1996              1995
                                                       -------           -------
 <S>                                                   <C>               <C>
 Partially-owned companies fully acquired
 subsequent to 1995 year end (note 15):
      Geddes Resources Limited                             $--           $12,143
      El Condor Resources Ltd.                              --             7,408
      St. Philips Resources Inc.                            --             7,331
                                                       -------           -------
                                                            --            26,882
 Highwood Resources Ltd. (formerly
 Mountain Minerals Co. Ltd.)                            10,790             7,056
 Asia Minerals Corp. and other                           5,796             2,369
                                                       -------           -------
                                                       $16,586           $36,307
                                                       =======           =======
</TABLE>

In 1994, Mountain Minerals Co. Ltd. ("Mountain Minerals") issued additional
share capital which reduced the Company's equity interest from 51% to 41%. As
a result of this share issuance by Mountain Minerals, the Company recorded a
gain on dilution of $3,020,000.

In March 1996, Mountain Minerals purchased a 34.7% interest in Highwood
Resources Ltd.("Highwood").  In August, 1996, through a Plan of Arrangement,
Highwood acquired all of the outstanding shares of Mountain Minerals.  The
companies combined and continued under the name of Highwood Resources Ltd.  In
December 1996, the Company agreed to convert part of the long-term debt to
Highwood into common shares.  Three million dollars of long-term debt was
repaid by Highwood issuing 1,935,483 common shares resulting in the Company
holding a 38.6% interest in Highwood.

6.  DEFERRED REVENUE AND OTHER LIABILITIES
<TABLE>
                                                    December 31
                                           ----------------------------
                                              1996                 1995
                                           -------              -------
 <S>                                       <C>                  <C>
 Deferred revenue                          $33,891              $29,711
 Provision for loss on foreign
   currency contracts                        9,570               10,023
 Accrued reclamation                         7,522                4,852
 Provision for closure costs                10,100                   --
 Capital leases                              4,962                1,709
 Other                                         290                   --
                                           -------              -------
                                            66,335               46,295
 Less current portion                       13,508                5,495
                                           -------              -------
                                           $52,827              $40,800
                                           =======              =======
</TABLE>

(a) DEFERRED REVENUE
The following table summarizes the years in which the deferred revenue is
expected to be recorded in income.

<TABLE>
 Year                      Amount
 -----                    -------
 <S>                      <C>
 1997                     $10,994
 1998                       9,149
 1999                      13,748
                          -------
                          $33,891
                          =======
</TABLE>

(b)  PROVISION FOR LOSS ON FOREIGN CURRENCY CONTRACTS
To protect the Company from foreign currency fluctuations and to provide a
minimum Canadian dollar conversion rate for its U.S. dollar gold sales
revenue, the Company enters into foreign currency contracts for conversion
into Canadian dollars.  Contracts are associated with the Company's
contractual obligation to deliver future gold production at specified prices
in U.S. dollars.  At the end of 1996, the Company had contracts to deliver
approximately US$116 million (1995 - US$116 million) at an average exchange
rate of 1.2822 (1995 - 1.2806) C$/US$.  The Company marks to market these
contracts and follows a policy of rolling forward these contracts as they
mature and expects to delay delivery of U.S. dollars against these contracts.

(c) CAPITAL LEASE OBLIGATIONS
Capital lease obligations will be settled as follows:
<TABLE>
 <S>                      <C>
 1997                     $2,514
 1998                     $1,336
 1999                     $  783
 2000                     $  329
 2001 and                 $   --
 thereafter
</TABLE>

7.  SENIOR SUBORDINATED NOTES

On August 12, 1996, the Company completed the sale of US$175 million principal
amount of 11% Senior Subordinated Notes due 2006 (the "Notes").  The Notes
were sold in a private placement to qualified institutional buyers pursuant to
Rule 144A under the Securities Act of 1933 and to certain other accredited
institutional buyers.  On October 9, 1996, an exchange offer was made to
exchange the Notes for Series B 11% Senior Subordinated Notes due 2006 (the
"Series B Notes"), pursuant to a Registration Statement on Form S-4 filed
under the Securities Act of 1933, as amended.  This exchange offer expired on
November 5, 1996 and all US$175 million principal amount of Notes were
exchanged for Series B Notes.

The Series B Notes are unsecured senior subordinated obligations of the
Company and, as such, will be subordinated in right of payment to all existing
and future senior indebtedness of the Company.  The Series B Notes are
guaranteed by Kemess Mines Inc., a wholly owned subsidiary of the Company.
The Series B Notes and interest payments are denominated in U.S. dollars.

Under the terms of the subordinated notes the Company must, in certain cases,
meet certain financial and other tests in order to issue additional debt.

8.  CAPITAL STOCK

(a) CHANGES IN CAPITAL STOCK
Authorized: An unlimited number of special shares issuable in series and an
unlimited number of common shares.
Issued, outstanding and fully paid - special: nil (1995 - nil)
Issued, outstanding and fully paid - common:

<TABLE>
                                                      Number of
                                                         shares           Amount
                                                    -----------         --------
 <S>                                                <C>                 <C>
 BALANCE, DECEMBER 31, 1993                          96,956,213         $152,159
 Issued via public offering                          17,400,000          100,050
 Exercise of warrants - Series 2                         19,000               61
 Issued for share purchase options                      119,534              132
 Share issue costs                                           --           (5,040)
                                                    -----------         --------
 BALANCE, DECEMBER 31, 1994                         114,494,747          247,362
 Exercise of warrants - Series 2                      4,475,300           14,545
 Issued for share purchase options                      148,667              190
 Issued to acquire Witteck Development                1,924,816            8,854
   Inc.
 Share issue costs                                           --             (140)
                                                    -----------         --------
 BALANCE, DECEMBER 31, 1995                         121,043,530          270,811
 Issued to acquire Geddes and El Condor
   (see note 15)                                     19,011,883          114,071
 Issued for share purchase options                      714,666            2,785
                                                    -----------         --------
 Balance, December 31, 1996 issued
   and outstanding                                  140,770,079          387,667
 Company shares held by Witteck
   Development Inc. (note 8(b))                      (1,924,816)          (8,854)
                                                    -----------         --------
 Balance, December 31, 1996 for financial
  reporting purposes                                138,845,263         $378,813
                                                    ===========         ========
</TABLE>

(b) ACQUISITION OF WITTECK DEVELOPMENT INC.
During 1995, the Board of Directors and the shareholders approved the
acquisition of all of the shares of Witteck Development Inc. ("Witteck") whose
sole asset is an investment in the Company of 1,924,816 shares.  This
investment has been recorded as a reduction of capital stock on the balance
sheet.  Consequently, the shares of the Company that are held by Witteck have
been excluded from the determination of earnings per share information.

(c) WARRANTS
During the year 3,000,000 Series 3 warrants expired, unexercised.  There were
no warrants outstanding at December 31, 1996.

(d) WEIGHTED AVERAGE NUMBER OF COMMON SHARES
Earnings per share has been calculated on the basis of the weighted average
number of common shares outstanding for the year which was 136,758,106 shares
(1995 - 117,900,306; 1994 - 101,399,347).

(e) STOCK OPTIONS
The Company grants stock options to employees and directors in recognition of
their service to the Company.

The following table outlines activity with respect to the Company's stock
options:
<TABLE>
                                 Number of           Price per
                                    shares               share
                                 ---------       -------------
 <S>                             <C>             <C>
 OUTSTANDING, DECEMBER 31, 1993  1,406,367       $0.48 - $6.25
 Granted                         1,100,000
 Exercised                        (119,534)      $0.48 - $2.85
 Canceled/Expired                 (166,000)
                                 ---------       -------------
 OUTSTANDING, DECEMBER 31, 1994  2,220,833       $0.48 - $6.25

 Granted                           605,000
 Exercised                        (148,667)      $0.90 - $2.85
 Canceled/Expired                 (215,000)
                                 ---------       -------------
 OUTSTANDING, DECEMBER 31, 1995  2,462,166       $0.48 - $6.25

 Granted                         1,482,000
 Exercised                        (714,666)      $0.48 - $4.50
 Canceled/Expired                 (375,000)
                                 ---------       -------------
 OUTSTANDING, DECEMBER 31, 1996  2,854,500       $1.60 - $6.75
                                 =========       =============
</TABLE>

9.  INCOME TAXES

The provisions for income tax are analyzed in the following table to show the
taxes that would be payable by applying statutory tax rates to the Company's
pre-tax earnings, and the taxes actually provided in the accounts:

<TABLE>
                                                            December 31
                                                 -------------------------------
                                                    1996        1995        1994
                                                 -------     -------     -------
 <S>                                             <C>         <C>         <C>
 Pre-tax income (loss), as reported              $(4,600)    $24,754     $22,777
 Combined statutory tax rates                        43%         43%         43%
 Tax (benefit) at combined statutory rates       $(1,978)    $10,644      $9,794

 Adjust for tax effect of:
    Resource allowance                            (4,432)       (771)     (3,782)
    Non-taxable portion of capital gains            (447)       (829)       (547)
    Deductible financing costs                    (1,147)     (1,152)       (860)
    Other                                             45          43          --
 Utilization of previously unrecognized
   deferred tax assets and net adjustment
   to deferred taxes                               7,984      (7,157)     (4,605)
 Foreign earnings subject to different
   tax rates                                          --        (117)         --
 Large corporation capital tax                       875         639         336
 Corporate minimum tax                                --         242         300
                                                 -------     -------     -------
                                                    $900      $1,542        $636
                                                 =======     =======     =======
</TABLE>

For income tax purposes, the Company has tax deductions available to be
utilized in future years totalling $198 million.  When claimed, a substantial
portion of these tax deductions will result in the creation of deferred income
tax liabilities.

The Company also has $14 million of earned depletion and mining exploration
depletion base carry forward available to be deducted against certain future
resource profits.

Because of reorganizations undertaken by the Company, utilization of tax
deductions and earned depletion base may be restricted.

10.  INTEREST AND OTHER INCOME, NET

Interest and other income is comprised of:
<TABLE>
                                                            December 31
                                               ------------------------------------------
                                                 1996             1995               1994
                                               ------          -------             ------
 <S>                                           <C>             <C>                 <C>
 Interest income                               $6,215          $10,776             $4,078
 Gain on sale of securities, net                2,691            8,309              1,290
 Other, net                                        28            1,925              2,143
                                               ------          -------             ------
                                               $8,934          $21,010             $7,511
                                               ======          =======             ======
</TABLE>

11.  EMPLOYEE BENEFIT PLANS

The Company has defined benefit and defined contribution pension plans
covering substantially all of its regular full-time employees.  Pension
benefits are based, in defined benefit plans, on employees' earnings and years
of service. Most of the plans are funded currently by contributions from the
Company, based on periodic actuarial valuations. Contributions to its defined
contribution plan are based on a specific percentage of base earnings.  The
market related value of the defined benefit pension plans  assets was
$37,811,000 at December 31, 1996 (1995 - $35,359,000) and the actuarial
present value of accrued pension benefits was estimated by the plans' actuary
to be $32,978,000 at December 31, 1996 (1995 - $31,321,000).  The total
pension expense for the year was $1,439,000 (1995 - $1,324,000; 1994 -
$1,163,000).

12.  CONTINGENCIES AND COMMITMENTS

(a)   LEGAL CLAIM
On September 18, 1992, nine miners were murdered in an underground explosion
at the Company's Giant Mine.  A member of the union which was on strike at the
time was charged and convicted of nine counts of second degree murder.  In
September, 1994, dependents of the deceased miners sued the Company and two of
its officers and directors, along with 23 other named defendants including
Procon Miners Inc., Pinkerton's of Canada Limited, the Government of the
Northwest Territories, and National Automobile, Aerospace and Agricultural
Implement Workers Union of Canada, for losses allegedly suffered as a result
of the explosion.  The claim against the Company and all defendants but one,
totals approximately $10.8 million plus taxes, interest and costs.  The claim
against the two officers and directors and all other defendants, excluding the
Company, totals approximately $33.65 million plus taxes, interest and costs.

The claim is being vigorously defended.  Counsel for the Company's insurer has
stated that, based on allegations in the amended Statement of Claim any
liability that might be imposed would be within the Company s liability
insurance coverage.  The Company believes that the claim is without merit.

(b)   LAWS AND REGULATIONS
The Company's current and proposed mining and exploration activities are
subject to various laws and regulations governing the protection of the
environment. These laws and regulations are continually changing and are
generally becoming more restrictive.  The Company conducts its operations so
as to protect its employees, the general public and the environment and
believes its operations are in compliance with all applicable laws and
regulations, in all material respects.  The Company has made, and expects to
make in the future, submissions and expenditures to comply with such laws and
regulations.

Where estimated reclamation and closure costs are reasonably determinable, the
Company has recorded a provision for environmental liabilities based on
management's estimate of these costs.  Such estimates are subject to
adjustment based on changes in laws and regulations and as new information
becomes available.

The Company is from time to time involved in various claims, legal proceedings
and complaints arising in the ordinary course of business.  The Company is
also subject to reassessment for income and mining taxes for certain years.
It does not believe that adverse decisions in any potential tax reassessments
or any amount which it may be required to pay by reason thereof will have a
material adverse effect on the financial condition or future results of
operations of the Company.

(c)   FORWARD SALES AND HEDGING CONTRACTS
The Company engages in hedging transactions to minimize the impact of
fluctuations in gold, copper, oil and foreign currency prices.

The credit risk related to hedging activities is limited to the unrealized
gains on outstanding contracts based on current market prices.  The Company
believes it has minimized credit risk by dealing with large credit-worthy
institutions and by limiting credit exposure to each.

(I)  At December 31, 1996 the Company had contractual arrangements to deliver
the following ounces of gold:

<TABLE>
                                     Gold           Price of Forward
 Year                             Forward                  Sales (oz)
 ----                             -------           ----------------
 <S>                              <C>               <C>
 1997                              82,182                     US$395
 1998                              60,000                     US$416
 1999                             110,000                     US$432
 2000                              60,000                     US$445
 2001                                  --                         --
                                 --------
                                  312,182
                                 ========
</TABLE>

Delivery under these contracts can be deferred for up to five years or
advanced at the Company's option depending on the individual contract.

(ii)  The Company's call option position as of December 31, 1996 was as
follows:

<TABLE>
                                 Gold Call                 Strike
                                   Options                  Price
 Year                             Sold (oz)               (per oz)
                                 ---------                -------
 <S>                             <C>                      <C>
 1997                              210,000                 US$401
 1997                              187,792                  C$540
 1998                              200,000                  C$540
 1999                              200,000                  C$540
 2000                                   --                     --
 2001                                   --                     --
                                   -------
                                   797,792
                                   =======
</TABLE>

If called, the Company has the ability to delay delivery of these ounces by
entering into fixed forward or spot deferred contracts originating with the
same number of ounces and strike prices as in the exercised option.

(iii)  The Company's put option position at December 31, 1996 was as follows:

<TABLE>
                          Gold Put Options          Strike Price
 Year                             Sold (oz)              (per oz)
 ---------                ----------------          ------------
 <S>                      <C>                       <C>
 1997                               50,000                US$366
 1997                               70,000                US$380
 1998-2001                              --                    --
                                   -------
                                   120,000
                                   =======
</TABLE>

(iv)  At December 31, 1996, the Company had contractual agreements, in US$, to
deliver the following tons of copper:

<TABLE>
                                    Copper        Strike Price per
 Year                         (metric tons)      metric ton in US$
 ---------                    ------------       -----------------
 <S>                          <C>                <C>
 1997                               12,958                  $2,051
 1998-2001                                                      --
                                   -------
                                    12,958
                                   =======
</TABLE>

(v )  At December 31, 1996, the Company's obligations to sell U.S. dollars
were as follows:

<TABLE>
                                                                       Exchange
                              U.S. Dollars       Rate     Carrying         Fair
 Year                               (000's)   (C$/US$)     Amount         Value
 ---------                    ------------    --------    --------      -------
 <S>                          <C>             <C>         <C>           <C>
 1997                             $115,866     1.2822     $(9,570)      $(9,570)
 1998-2001                              --         --          --            --
                              ------------    --------    --------      -------
                                  $115,866     1.2822     $(9,570)      $(9,570)
                              ============    ========    ========      =======
</TABLE>

The Company marks to market these contracts based on the applicable exchange
rate at the date of the balance sheet.  See Note 6(b).

(vi) At December 31, 1996, the Company's currency call option
position was as follows:

<TABLE>
                              U.S. Dollars       Exchange Rate
 Year                               (000's)            (C$/US$)
 ---------                    ------------       -------------
 <S>                          <C>                <C>
 1997                           US$100,000              1.3740
 1998-2001                              --                  --
                              ------------       -------------
                                US$100,000
                              ============
</TABLE>

(vii)  At December 31, 1996, the Company had oil swap agreements to hedge the
cost of Western Texas Intermediate ("WTI") crude oil to be used for the
operations of the Colomac Mine.  These agreements call for settlement as
follows:

<TABLE>
                            Barrels of WTI               Price Per
 Year                            Purchased                  Barrel
 --------                   --------------                --------
 <S>                        <C>                           <C>
 1997                              200,000                US$16.85
 1998-2001                              --                      --
                            --------------
                                   200,000
                            ==============
</TABLE>

(d)  OPERATING ROYALTIES

(I)   Under the terms of the Hope Brook Mine Asset Purchase Agreement, the
Company is obligated to pay an operating royalty when the average price of
gold exceeds US$380 per ounce.  Amounts payable vary between $1,300,000 and
$3,300,000 annually depending on the average price of gold.  In respect of
1996, the Company was obligated to pay $1,300,000 (1995 - $1,300,000; 1994 -
$1,300,000).  Obligations under this agreement expired in 1996.

(ii)   Under the terms of the Colomac Mine Asset Purchase Agreement, the
Company is obligated to pay an operating royalty when the average price of
gold exceeds US$400 per ounce.  Amounts payable vary between $1.0 million and
$2.0 million annually depending on the average price of gold.  In respect of
1996, no amount was payable under this royalty (1995 - nil; 1994 - nil).
Obligations under this agreement expire in 1999.

13.  NET CHANGE IN OTHER OPERATING ITEMS

<TABLE>
                                                     December 31
                                      -------------------------------------------
                                          1996             1995              1994
                                      --------           ------          --------
 <S>                                  <C>                <C>             <C>
 Cash provided by (used for)
    Receivables                       $(10,354)          $ (296)         $ (3,905)
    Inventories                        (17,708)          (9,886)          (17,530)
    Prepaid expenses                    (2,108)            (799)           (1,533)
    Accounts payable                     7,454              986            (1,498)
    Accrued payroll costs               (1,753)            (383)            1,717
    Income taxes payable                   543              935               802
    Deferred revenue                     4,180            5,593            22,768
    Interest payable                    10,180               --                --
    Other current liabilities            7,243            1,855            12,071
    Mountain Minerals                       --               --               (38)
      deconsolidation
                                       -------          -------           -------
                                       $(2,323)         $(1,995)          $12,854
                                       =======          =======           =======
</TABLE>

14.   RECONCILIATION TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Reconciliation of net income in accordance with Canadian generally accepted
accounting principles ("Canadian GAAP") to net income in accordance with
United States generally accepted accounting principles ("U.S. GAAP") is as
follows:

<TABLE>
                                                             December 31
                                                ----------------------------------
                                                    1996         1995         1994
                                                --------     --------      -------
 <S>                                                 <C>         <C>           <C>
 Net income (loss) in accordance
    with Canadian GAAP                           $(5,985)    $23,169       $22,166

 Decrease:
    Depreciation and amortization                 (4,506)     (5,633)       (2,188)
    Employee benefit plans                          (193)       (359)           --
                                                --------     --------      -------
 Net income (loss) in accordance
    with U.S. GAAP                              $(10,684)    $ 17,177      $19,978
                                                ========     ========      =======
 Earnings (loss) per share in
    accordance with U.S. GAAP:
 Primary earnings (loss)                          $(0.08)      $0.15         $0.19
 Fully diluted earnings (loss)                    $(0.08)      $0.15         $0.19
 </TABLE>

The effects on the balance sheets of the Company at December 31, prepared in
accordance with U.S. GAAP, are:
<TABLE>
                                                            December 31
                                                ----------------------------------
                                                    1996          1995        1994
                                                --------     ---------    --------
 <S>                                            <C>          <C>          <C>
 Increase (decrease):
    Property, plant and equipment               $  4,722     $ (11,794)   $ (6,161)
    Prepaid expenses (pension asset)            $   (552)    $   ( 359)   $     --
    Deferred income taxes                       $ 19,377            --          --
    Retained earnings                           $(15,207)    $( 12,153)   $( 6,161)
</TABLE>

(a)  DEPRECIATION AND AMORTIZATION
Under U.S. GAAP, depreciation and amortization are calculated on the
unit-of-production method based upon proven and probable reserves, whereas
under Canadian GAAP, total mineral inventory may be used in the calculations.

(b)  EMPLOYEE BENEFIT PLANS
Under U.S. GAAP, for defined benefit pension plans, the projected benefit
obligation should be discounted using interest rates at which the obligation
could be effectively settled whereas under Canadian GAAP, the projected
benefit obligation may be discounted using interest rates which are consistent
with long-term assumptions.  Also, under U.S. GAAP, experience gains and
losses as well as adjustments arising from changes in assumptions must be
amortized only if it exceeds a specified range.  Under Canadian GAAP, these
amounts must be amortized over the expected average remaining service life of
the employee group regardless of the amount.

Pension expense is determined each year based on actuarial recommendations.
The actuarial assumptions applied in determining the expense in accordance
with U.S. GAAP include a discount rate on the benefit obligation, rate of
compensation increases and long-term rate of return on the plan assets of
8.25%, 7.00% and 8.50%, respectively.  Assets of the plans are held in a range
of investments, which include fixed-income securities, equities and money
market securities.  At January 1, 1987, as a result of an actuarial valuation
of the plans, a surplus was identified which is being amortized over the
estimated average remaining service lives of the employees (EARSL) which, for
the Company s defined benefit pension plans, ranges from 12 to 18 years.

The components of pension expense, for the Company's defined
benefit pension plans, calculated in accordance with U.S. GAAP
are as follows:

<TABLE>
                                                   December 31
                                   ---------------------------------------
                                     1996              1995           1994
                                   ------            ------         ------
 <S>                               <C>               <C>            <C>
 Service cost - benefits earned
    during the year                $1,688            $1,374         $1,292
 Interest cost on projected benefit
    obligation                      2,710             2,541          2,445
 Return on assets                  (6,707)           (4,999)          (169)
 Other                              3,750             2,575         (2,586)
                                   ------            ------         ------
                                   $1,441            $1,491           $982
                                   ======            ======         ======
</TABLE>

The funded status and differences between amounts expensed and amounts funded
calculated under U.S. GAAP for the Company's defined benefit pension plans are
as follows:
<TABLE>
                                                            December 31
                                      ----------------------------------------------------
                                                 1996                       1995
                                      -----------    -----------   ----------  -----------
                                            Plans         Plan        Plans          Plan
                                            where        where        where         where
                                           assets  accumulated       assets   accumulated
                                           exceed     benefits       exceed      benefits
                                      accumulated       exceed  accumulated        exceed
                                         benefits       assets     benefits        assets
                                      -----------  -----------  -----------   -----------
 <S>                                  <C>          <C>          <C>           <C>
 Plans' assets at
   market                                 $43,346           --      $29,912        $8,743

 Projected benefits
   based on:
     Employment service to date
     and present pay levels
       Vested                              33,093           68       20,144         8,787
       Non-vested                             125           19           68            42
     Additional amount related to
     compensation increases                 3,692          253        3,246            --
                                           ------         ----       ------         -----
 Projected benefit obligations             36,910          340       23,458         8,829
                                           ------         ----       ------         -----
 Plans' assets in excess of
   (less than) projected benefit
   obligations                              6,436         (340)       6,454           (86)
 Unamortized
   January 1, 1987 surplus, net            (2,402)          --       (1,932)         (774)
 Unamortized net experience
   (gains) losses                          (2,189)          --       (3,055)        1,029
 Unamortized prior service cost             1,301          340           --         1,408
 Adjustment for minimum liability              --          (87)          --            --
 Prepaid (accrued) pension cost            $3,146         $(87)      $1,467        $1,577
                                           ======         ====       ======        ======
 Difference between amounts
  expensed and amounts funded                     $3,059                    $3,044
                                                  ======                    ======
</TABLE>

In addition to the defined benefit pension plans noted above, the Company
maintains a defined contribution pension plan for certain of its hourly
employees.  Under this plan, the Company contributes 2.5% of each member's
base earnings to the pension plan.  The pension expense for the year under
this pension plan was $191,000 (1995 - $192,000; 1994 - $181,000).

(c)INCOME TAXES
In accordance with the Financial Accounting Standards Board Statement No. 109
("SFAS 109"), U.S. GAAP requires that income taxes be accounted for by the
liability method.  Under this method, deferred tax assets and liabilities are
determined based on differences between the financial statement reporting and
the tax bases of the assets and liabilities and are measured at the enacted
tax rates that will be in effect when the differences are expected to reverse.
Such differences principally arise from the timing of income and expense
recognition for accounting and tax purposes.  The application of SFAS 109
would have no material effect on the assets, liabilities or operations for the
years presented in these consolidated financial statements as additional
deferred tax assets arising from the table of reconciling items have been
offset by the recording of an additional valuation allowance.  The following
additional disclosures with respect to income taxes are required by U.S. GAAP:
<TABLE>
                                            December 31
                                  -------      ------      ------
                                     1996        1995        1994
                                  -------      ------      ------
 <S>                              <C>          <C>         <C>
 Deferred Tax Liabilities:
    Exploration expenditures      $    --     $ 4,643      $5,519
    Mining properties and
       deferred development        12,212       6,979         941
    Pension asset                   1,215         985         997
    Investments                     1,057       1,057       1,057
    Other                              --          --          58
                                  -------     -------      ------
                                  $14,484     $13,664      $8,572
                                  =======     =======      ======

 Deferred Tax Assets:

    Exploration expenditures      $ 4,401      $   --       $  --
    Provisions for loss on
      foreign currency contracts    2,832       3,567       5,343
    Property, plant and             5,283       7,670       6,126
      equipment
    Accrued reclamation costs         912         648         163
    Other                           1,162       1,030         571
    Valuation allowance              (106)     (2,134)     (4,838)
                                  -------     -------      ------
                                  $14,484     $10,781      $7,365
                                  =======     =======      ======
</TABLE>

The net change in the valuation allowance from prior year-end was a decrease
of $2,028,000.

(d) STOCK BASED COMPENSATION

The Company has granted options to certain of its employees and directors.
The Company accounts for the issuance of these options under APB Opinion No.
25, under which no compensation cost has been recognized.  Had compensation
cost for these options been determined in accordance with FASB Statement No.
123, the Company's net income and earnings per share would have been reduced
to the following pro forma amounts:

<TABLE>
                                      1996            1995
                                  --------         -------
 <S>                              <C>              <C>
 Net Income
   In accordance with U.S. GAAP   $(10,684)        $17,177
   Pro Forma                      $(11,475)        $16,974

 Primary EPS
   In accordance with U.S. GAAP     $(0.08)          $0.15
   Pro Forma                        $(0.08)          $0.14

 Fully Diluted EPS
   In accordance with U.S. GAAP     $(0.08)          $0.15
   Pro Forma                        $(0.08)          $0.14
</TABLE>

Because the Statement 123 method of accounting has not been
applied to options granted prior to January 1, 1995, the
resulting pro forma compensation cost may not be representative
of that to be expected in future years.

A summary of the status of the outstanding stock options at
December 31, 1996 and 1995 and changes during the years then
ended is presented in the table and narrative below:

<TABLE>
                                       1996                                 1995
                      ------------------------------------        ----------------------------
                         Shares        Exercise   Weighted           Shares           Exercise
                                          Price    Average                               Price
                                                  Exercise
                                                     Price
                      ---------     -----------   --------        ---------        -----------
 <S>                  <C>           <C>           <C>             <C>              <C>
 Outstanding at
   beginning of year  2,462,166     $0.48-$6.25      $4.13        2,220,833        $0.48-$6.25
 Granted              1,482,000     $2.27-$6.75      $4.33          605,000         $4.26-5.41
 Exercised             (714,666)    $0.48-$4.50      $2.04         (148,667)       $0.90-$2.85
 Canceled/Expired      (375,000)    $4.50-$5.41      $4.70         (215,000)        $1.70-4.90
                      ---------     -----------      -----        ---------        -----------
 Outstanding at       2,854,500     $1.60-$6.75      $4.75        2,462,166        $0.48-$6.25
   end of year
                      =========     ===========      =====        =========        ===========

 Exercisable at       1,324,500     $1.60-$6.38      $4.48          922,166        $0.48-$6.00
   end of year
</TABLE>

The weighted average fair value of options granted during 1996 and 1995 are
$2.48 and $2.15, respectively.

1,324,500 of the 2,854,500 options outstanding at December 31, 1996 are
exercisable and have exercise prices between $1.60 and $6.38, with a weighted
average exercise price of $4.48 and a weighted average remaining contractual
life of 4 years.  The remaining 1,530,000 options have exercise prices between
$4.43 and $6.75, with a weighted average exercise price of $5.09 and a
weighted average remaining contractual life of 4 years.

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted-average
assumptions used for grants in 1996 and 1995, respectively: risk-free interest
rates ranging from 4.49 to 5.80 percent and 6.98 and 8.44 percent; expected
dividend yields of zero percent; expected lives of 5 years; and expected
volatility of 48 and 43 percent.

15.  ACQUISITIONS

(a) ACQUISITION OF GEDDES RESOURCES LIMITED, EL CONDOR RESOURCES LTD. AND ST.
PHILIPS RESOURCES INC.

On January 11, 1996, the Company acquired all of the outstanding shares of
Geddes Resources Limited ("Geddes"), El Condor Resources Ltd. ("El Condor")
and St. Philips Resources Inc. ("St. Philips") not already owned by the
Company pursuant to an arrangement (the "Plan of Arrangement") on the
following terms:

Geddes:            0.30 shares of the Company for each share of Geddes.
El Condor:         0.95 shares of the Company plus $2.00 cash for each share
                   of El Condor.
St. Philips:       $3.40 cash for each share of St. Philips.

As a result of these transactions, the Company issued 19,011,883 common shares
of the Company and paid approximately $56 million in cash pursuant to the Plan
of Arrangement.  The January 11, 1996 closing price on The Toronto Stock
Exchange for the Company s common shares was $6.00.  This price was used to
value the common shares of the Company issued under the Plan of Arrangement.
At the time of acquisition, St. Philips, with its wholly owned subsidiary, and
El Condor, jointly owned the Kemess South property.  El Condor owned 100% of
the Kemess North property.

The following table outlines the details of the purchase price and its
allocation to the assets and liabilities acquired:

<TABLE>
                                    Geddes         El         St.       Total
                                               Condor     Philips
                                  --------    --------    --------   --------
 <S>                              <C>         <C>         <C>        <C>
 Purchase price:
    Cash paid, including open
      market purchases           $   3,220    $ 34,222    $38,562    $ 76,004
    Issue of common shares          37,650      76,421         --     114,071
                                 ---------    --------    -------    --------
                                 $  40,870    $110,643    $38,562    $190,075
 Initial carrying value
   of Geddes                         9,192          --         --       9,192
 Transaction and other costs         2,290         680        679       3,649
                                   -------    --------    -------    --------
                                    52,352     111,323     39,241     202,916
 Cash and cash equivalents
   acquired from companies            (561)         (1)      (378)       (940)
                                   -------    --------    -------    --------
                                   $51,791    $111,322    $38,863    $201,976
                                   =======    ========    =======    ========

 Allocated to:
    Property, plant and equipment   52,101     112,087     39,015     203,203
    Other assets                        31         151          9         191
    Total liabilities                 (341)       (916)      (161)     (1,418)
                                   -------    --------   --------    --------
                                   $51,791    $111,322   $ 38,863    $201,976
                                   =======    ========   ========    ========
 </TABLE>

The following is a condensed consolidated balance sheet of the Company as at
January 11, 1996, after giving effect to the acquisition:

<TABLE>
                                         January 11                  December 31
                                         ----------                  -----------
                                               1996                         1995
                                         ----------                  -----------
 <S>                                     <C>                         <C>
 Cash and cash equivalents                  $79,982                     $139,410
 Other current assets                        62,057                       61,865
                                         ----------                  -----------
                                            142,039                      201,275                     4
 Property, plant and equipment              394,583                      191,381
 Long-term investments                        9,445                       36,307
                                         ----------                  -----------
                                           $546,067                     $428,963
                                         ==========                  ===========

 Current liabilities                        $43,852                      $42,434
 Long-term liabilities and                   47,649                       46,034
   other
                                         ----------                  -----------
                                             91,501                      188,468
 Capital stock
    (Outstanding:
    January 11, 1996 -                      376,028                      261,957
      138,130,597)
 Retained earnings(a)                        78,538                       78,538
                                         ----------                  -----------
                                           $546,067                     $428,963
                                         ==========                  ===========

(a)  Income for the interim period has been ignored for the purposes of this
comparative balance sheet.
</TABLE>

A.  The following shows pro forma what the results of operations would have
been if the acquisition had occurred at the beginning of the period:

<TABLE>
                                       Twelve months ended
                                       -------------------
                                      1996                   1995
                                 ---------              ---------
 <S>                             <C>                    <C>
 Revenue                          $255,168               $208,311
 Net income (loss)                 $(5,985)              $ 17,366
 Earnings (loss) per share         $ (0.04)              $   0.13
   - basic
 Earnings (loss) per share         $ (0.04)              $   0.13
   - fully diluted
</TABLE>

(b) ACQUISITION OF CONSOLIDATED PROFESSOR MINES LIMITED

On February 5, 1996, the Company made a public offer to purchase all of the
outstanding common shares of Consolidated Professor Mines Limited
("Consolidated Professor") consisting of approximately 20 million common
shares, at a cash price of $0.80 per share.  By June 30, 1996, the Company had
purchased all shares tendered and acquired all remaining shares in accordance
with compulsory acquisition procedures, for a total purchase price of $16.3
million.  The purchase price, net of cash acquired on the acquisition of $0.3
million, has been assigned as follows:

      Capital assets                                  $15.9 million
      Miscellaneous net assets                          0.1 million
                                                      -------------
      Purchase price, net of cash acquired            $16.0 million
                                                      =============

16.  CLOSURE COSTS AND WRITE-DOWN OF RESOURCE PROPERTIES AND OTHER ASSETS

On November 6, 1996, the Company announced it would close the Hope Brook Mine
in the third quarter of 1997 so that the mill and mine equipment can be
relocated to its Matachewan project in Ontario.  In addition, as a result of a
reclassification of mineable reserves at the Colomac Mine in the Northwest
Territories, a provision would be made to decrease the carrying value of the
Colomac property.  The company provided for the revaluation of the carrying
value of the Hope Brook and Colomac assets, and for a provision for closure
costs at Hope Brook.  These charges were approximately $37.6 million in total.
This comprises $10.1 million for closure costs at Hope Brook, the revaluation
of Hope Brook assets by a reduction of $10.1 million, and revaluation of
Colomac assets by a reduction of $17.4 million.

17.  RECLAMATION AND ENVIRONMENTAL REMEDIATION

Where feasible, reclamation is conducted concurrently with mining.  In general
the Company is required to mitigate long-term environmental impacts by
stabilizing, contouring, resloping and revegetating various portions of a site
once mining and mineral processing operations are completed.  These
reclamation activities are conducted in accordance with detailed plans which
have been reviewed and where applicable approved by the appropriate regulatory
agencies. In Ontario, the Northwest Territories and British Columbia the
Company is required to post security against all or part of the estimated cost
of such reclamation.  The Company has completed and filed reclamation plans
for all of its active operations. Reclamation plans have also been prepared
for most of the Company's inactive mine sites and reclamation is well advanced
at many of these sites.

Although the ultimate amount of the obligation to be incurred is uncertain,
the Company has currently estimated these future costs to be $33.5 million.
The Company has accrued $17.6 million of reclamation and closure costs through
December 1996 and will charge the remaining amount to operations, over the
remaining lives of its operations, on a unit-of-production basis.  At December
31, 1996 and 1995, the Company had outstanding bonds and letters of credit for
reclamation of $4.7 million and $4.9 million, respectively.  Further, the
Company believes that the salvage value of its assets at its various minesites
will be sufficient to fund the majority of these reclamation costs.

During 1995, the Company acquired 100% of the Red Mountain property located in
northwestern British Columbia for $1. The Company assumed the environmental
liabilities, estimated at $3.0 million, as part of this purchase. The vendor
will receive a production royalty on all production from the property.

The following table summarizes environmental costs incurred by the operating
mines in 1996:

<TABLE>
                                 Capital              Operating
                            Improvements                  Costs
                            ------------             ----------
 <S>                        <C>                      <C>
 Hope Brook                       $   --                 $1,239
 Pamour                              156                    368
 Colomac                           1,227                     20
 Giant                               143                    784
                            ------------             ----------
                                  $1,526                 $2,411
                            ============             ==========
</TABLE>

Costs for 1997 are expected to be comparable, with the exception of Hope Brook
where costs, due to the closure, are estimated to be approximately $6.3
million in 1997.  A provision for this amount was made in 1996.

18.  CREDIT LINE

The Company has a $28 million unsecured, revolving line of credit with a major
Canadian bank.  This line will be used as necessary to finance working capital
for current operations.  At December 31, 1996, the Company had drawn $2.7
million in the form of letters of credit.

19.  SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

The Company's payment obligations under the 11% Senior Subordinated Notes
issued in 1996 and due 2006 (see Note 7), are guaranteed by one of the
Company's wholly-owned subsidiaries, Kemess Mines Inc.  Such guarantee is
unconditional, jointly and severally, on a senior subordinated basis to each
holder and the trustee.  Separate financial statements of Kemess Mines Inc.
have not been presented because the Company's management has determined they
would not be material to investors.  Condensed consolidating statements of
income and cash flow of Kemess Mines Inc. are not presented because Kemess
Mines Inc. is currently in the construction phase of the Kemess South Project
and as such it has no active operations.  The following supplemental
information sets forth, on an unconsolidated basis, balance sheet information
for the Company ("Parent Company Only"), for the Guarantor subsidiary and for
the Company's other subsidiaries.

<TABLE>
                                                                                       Non-
                                    Parent    Guarantor                           Guarantor
                                   Company         Sub-        Sub-       Elim-     Consol-
                                      Only      sidiary   sidiaries   ination's      idated
                                  --------    ---------   ---------   ---------   ---------
 <S>                              <C>         <C>         <C>         <C>         <C>
 ASSETS
 Current Assets
 --------------
 Cash and cash equivalents        $197,426       $(449)        $789         $--    $197,766
 Marketable securities              19,309           --       8,950          --      28,259
 Receivables                         5,242       10,561       1,689          --      17,492
 Inventories                        61,840           --           4          --      61,844
 Prepaid expenses                    7,618           --         111          --       7,729
                                  --------    ---------   ---------   ---------    --------
                                   291,435       10,112      11,543          --     313,090

 Property, Plant and Equipment     265,881      194,985      27,967      (6,100)    482,733
 Noncurrent Intercompany            53,997           --          --     (53,997)         --
   Receivables
 Long Term Investments             181,760           --       1,754    (166,928)     16,586
 Deferred Charges and Other Assets   8,449           --         772          --       9,221
                                  --------    ---------   ---------   ---------   ---------
 TOTAL ASSETS                     $801,522     $205,097     $42,036   $(227,025)   $821,630
                                  ========    =========   =========   =========   =========

 LIABILITIES
 Current Liabilities
 -------------------
 Accounts payable                   $9,735      $10,172      $1,187         $--     $21,094
 Accrued payroll costs               3,514           --          --          --       3,514
 Deferred revenue and               12,725          783          --          --      13,508
   capital leases
 Income taxes payable                3,845           --          49          --       3,894
 Senior subordinated                10,180           --          --          --      10,180
   notes interest payable
 Other current liabilities          14,770        5,599           7           7      20,383
                                  --------    ---------   ---------   ---------    --------
 Total Current Liabilities          54,769       16,554       1,243           7      72,573

 Deferred Revenue and Other         50,643        1,894          --         290      52,827
   Liabilities
 Noncurrent Intercompany                --       40,286      13,711     (53,997)         --
  Payables
 Senior Subordinated Notes         239,680           --          --          --     239,680
 Deferred Income Taxes               5,064           --          --          --       5,064
 Minority Interest in                   --           --          --         120         120
   Subsidiary Companies
                                  --------    ---------   ---------   ---------    --------
 TOTAL LIABILITIES                 350,156       58,734      14,954     (53,580)    370,264
                                  --------    ---------   ---------   ---------    --------

 SHAREHOLDERS  EQUITY
 Common stock                      378,813      146,363      31,270    (177,633)    378,813
 Retained earnings                  72,553           --      (4,188)      4,188      72,553
                                  --------    ---------   ---------   ---------    --------
 TOTAL SHAREHOLDERS EQUITY         451,366      146,363      27,082    (173,445)    451,366
                                  --------    ---------   ---------   ---------    --------
 TOTAL LIABILITIES AND SHAREHOLDERS
   EQUITY                         $801,522     $205,097     $42,036   $(227,025)   $821,630
                                  ========    =========   =========   =========    ========

</TABLE>

SUPPLEMENTARY DATA
The following tables set forth selected quarterly financial data for the years
ended December 31, 1996 and 1995 (unaudited):

<TABLE>
                                                  YEAR ENDED DECEMBER 31, 1996
                                       -----------------------------------------------------
                                             1st           2nd           3rd             4th
                                       ---------     ---------     ---------       ---------
 <S>                                   <C>           <C>           <C>             <C>
 Production Statistics
 --------------------
 Ore milled - tons                     1,334,988     1,358,152     1,500,285       1,579,346
 Production - gold ounces                 88,196        91,447       104,012         105,548

 Financial Information
 ---------------------
 (000's omitted except per share amounts)
 Operating revenue
 - Canadian GAAP                         $51,049       $54,797       $77,323         $71,999
 - US GAAP                               $51,049       $54,797       $77,323         $71,999
 Operating income (loss)
 - Canadian GAAP                            $881        $4,514       $16,083           7,725
 - US GAAP                                  $416        $3,528       $15,232          $5,328
 Net income
 - Canadian GAAP                          $1,356        $3,749       $10,216        $(21,306)
 - US GAAP                                  $891        $2,763        $9,365        $(23,703)
 Earnings per share*
 - Canadian GAAP                           $0.01         $0.03         $0.07          $(0.15)
 - US GAAP                                 $0.01         $0.02         $0.07          $(0.17)


                                                   YEAR ENDED DECEMBER 31, 1995
                                       -----------------------------------------------------
                                             1st           2nd           3rd             4th
                                       ---------     ---------     ---------       ---------
 Production Statistics
 --------------------
 Ore milled - tons                     1,296,999     1,428,168     1,412,304       1,418,979
 Production - gold ounces                 86,960        97,246        92,159          94,786

 Financial Information
 ---------------------
 (000's omitted except per share amounts)
 Operating revenue
 - Canadian GAAP                         $47,386       $53,453       $52,258         $55,214
 - US GAAP                               $47,386       $53,453       $52,258         $55,214
 Operating income (loss)
 - Canadian GAAP                         $(1,882)       $4,265        $3,240           $(689)
 - US GAAP                               $(2,824)       $1,718        $2,026         $(1,978)
 Net income
 - Canadian GAAP                          $3,503        $9,748        $6,228          $3,691
 - US GAAP                                $2,561        $7,201        $5,014          $2,401
 Earnings per share*
 - Canadian GAAP                           $0.03         $0.08         $0.05           $0.03
 - US GAAP                                 $0.02         $0.06         $0.04           $0.02

*Quarterly earnings per share are based upon the average number of common
shares outstanding each quarter.  Because the average number of shares
increased in each quarter, the sum of quarterly earnings per share may not
equal earnings per share for the year.
</TABLE>


ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.


                                   PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

a) Reference is made to the information set forth in the section entitled
"Election of Directors" in the 1997 Management Information Circular (Proxy
Statement), to be filed pursuant to Regulation 14A for the Annual General
Meeting of Shareholders, to be held on May 29, 1997, which section is
incorporated herein by reference.

b) Executive Officers: See data following Item 4 of Part I.

Reference is made to the information set forth in the section entitled
"Directors and Executive Officers of the Registrant" in the 1997 Management
Information Circular, which section is incorporated herein by reference.


ITEM 11 - EXECUTIVE COMPENSATION

Reference is made to the information set forth in the section entitled
"Executive Compensation" in the 1997 Management Information Circular, which
section is incorporated herein by reference.


ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Reference is made to the information set forth in the section entitled "Voting
Shares and Principal Holders Thereof" in the 1997 Management Information
Circular, which section is incorporated herein by reference.


ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Reference is made to the information set forth in the sections entitled
"Certain Relationships and Related Transactions" and "Indebtedness of
Directors and Officers" in the 1997 Management Information Circular, which
section is incorporated herein by reference.


                                    PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  1.     Financial Statements:

            The financial statements filed as part of this report are listed
            on the index in Item 8.

      2.    Financial Statement Schedules:

            No financial statement schedules are required.

(b)   Reports on Form 8-K:

      A report on Form 8-K was filed on November 6, 1996, regarding a press
      release from Royal Oak Mines Inc., announcing third quarter 1996 results
      and the revaluation of certain assets.

(c)   Exhibits:  See Exhibit Index at page __.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                          ROYAL OAK MINES INC.


Date: March 31, 1997                By:   /s/ Margaret K. Witte
                                          ---------------------
                                          Margaret K. Witte, President and
                                          Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Date                    Signature                  Title
----                    ---------                  -----
March 31, 1997          /s/ Ross F. Burns          Director, Vice President,
                        -----------------          Global Exploration

March 31, 1997          /s/ Matthew Gaasenbeek     Director
                        ----------------------

March 31, 1997          /s/ William J. V. Sheridan Director
                        --------------------------

March 31, 1997          /s/ Margaret K. Witte      Director, Chairman of
                        ---------------------      the Board, President
                                                   and Chief Executive
                                                   Officer

March 31, 1997          /s/ James H. Wood          Chief Financial Officer
                        -----------------


                                 EXHIBIT INDEX

The Exhibit numbers in the following list correspond to the numbers assigned
to such exhibits in Item 601 of Regulation S-K.  The exhibit numbers noted by
an asterisk (*) indicate exhibits actually filed with this Annual Report on
Form 10-K.  All other exhibits are incorporated by reference into this Annual
Report on Form 10-K.  Exhibit descriptions followed by a double asterisk (**)
are management contracts or compensatory plans or arrangements filed pursuant
to Item 14(c) of Form 10-K.


 3.1    Articles of Amalgamation dated January 1, 1992 (incorporated by
        reference to Royal Oak Mines Inc. Form 20-F for the year ended
        December 31, 1991).

 3.2    Articles of Amalgamation dated July 23, 1991 (incorporated by
        reference to Royal Oak Mines Inc. Form 20-F for the year ended
        December 31, 1991).

 3.3    Constituting documents of Kemess Mines Inc. (incorporated by reference
        to Amendment No. 1 to Royal Oak Mines Inc. Form S-4 Registration
        Statement No. 333-11117 filed October 7, 1996).

 3.4    Bylaw No. 8 of Kemess Mines Inc. (incorporated by reference to
        Amendment No. 1 to Royal Oak Mines Inc. Form S-4 Registration
        Statement No. 333-11117 filed October 7, 1996).

 4.1    Indenture, dated as of August 12, 1996, by and among the Company, the
        Guarantor and Mellon Bank, F.S.B. (incorporated by reference to
        Amendment No. 1 to the Royal Oak Mines Inc. Form S-4 Registration
        Statement No. 333-11117 filed October 7, 1996).

 4.2    Form of Exchange Note (contained in Exhibit 4.1 as Exhibit B thereto).

10.1    Employment Agreement dated July 21, 1995 between Margaret K.
        Witte, Arctic Precious Metals, Inc. and Royal Oak Mines Inc.
        (incorporated by reference to Royal Oak Mines Inc. Form 10-K
        for the year ended December 31, 1995).**

10.2    Employment Agreement dated July 21, 1995 between Ross F. Burns,
        Precious Arctic Metals, Inc. and Royal Oak Mines Inc.
        (incorporated by reference to Royal Oak Mines Inc. Form 10-K
        for the year ended December 31, 1995).**

10.3    Employment Agreement dated July 21, 1995 between J. Graham Eacott,
        Arctic Precious Metals, Inc. and Royal Oak Mines Inc. and
        amendment dated February 16, 1996 (incorporated by reference
        to Royal Oak Mines Inc. Form 10-K for the year ended December 31,
        1995).**

10.4    Employment Agreement dated July 21, 1995 between John R. Smrke,
        Arctic Precious Metals, Inc. and Royal Oak Mines Inc. and
        amendment dated February 16, 1995 (incorporated by reference
        to Royal Oak Mines Inc. Exhibit 10.5 Form 10-K for the year ended
        December 31, 1995).**

10.5    Employment Agreement dated July 21, 1995 between Edmund Szol,
        Arctic Precious Metals, Inc. and Royal Oak Mines Inc. and
        amendment dated February 16, 1995. (incorporated by reference
        to Royal Oak Mines Inc. Exhibit 10.6 Form 10-K for the year ended
        December 31, 1995).**

10.6    Employment Agreement dated July 21, 1995 between James H. Wood,
        Arctic Precious Metals, Inc. and Royal Oak Mines Inc. and
        amendment dated February 16, 1995 (incorporated by reference to
        Royal Oak Mines Inc. Exhibit 10.7 Form 10-K for the year ended
        December 31, 1995).**

10.7    Credit Agreement, dated as of February 15, 1996, by and between the
        Company and The Bank of Nova Scotia (incorporated by reference to
        Exhibit 10.2 to Royal Oak Mines Inc. Form S-4 Registration Statement
        No. 333-11117 filed October 7, 1996).

10.8    Amending Agreement, dated as of August 5, 1996, by and between the
        Company and The Bank of Nova Scotia (incorporated by reference to
        Exhibit 10.3 to Royal Oak Mines Inc. Form S-4 Registration Statement
        No. 333-11117 filed October 7, 1996).

10.9    Form of Employee Stock Option Agreement (incorporated by reference to
        Exhibit 4 to Royal Oak Mines Inc. Form S-8 Registration Statement filed
        December 18, 1996).**

10.10   Arrangement Agreement dated as of August 29, 1995, between Royal Oak
        Mines Inc., El Condor Resources Ltd., St. Philips Resources Inc. and
        Geddes Resources Limited (incorporated by reference from the Joint
        Management Proxy Circular dated September 1, 1995, starting at page A-1,
        filed by El Condor Resources Limited (File No. 0-19555)).

21*     Subsidiaries of registrant

23*     Consent of Arthur Anderson & Co.

27*     Financial Data Schedule