Writeoffs push Crown Res. into red

Property writeoffs have pushed Crown Resources (TSE) well into the red with a net loss of US$8.6 million for the year ended Dec. 31, 1992.

The company withdrew from the Kettle River gold mine joint venture in Washington state, relinquishing its 30% to Echo Bay Mines (TSE), which is now total owner.

Crown suffered a pre-tax charge of US$13.9 million as a result of the Kettle River writeoff. This was offset somewhat by a corresponding gain of US$11 million from the cancellation of non-recourse debt owed to Echo Bay. The net after-tax effect of the Kettle River charges and writedowns of certain properties were US$1.9 million and US$1.8 million respectively. Higher production costs at Kettle River and lower gold prices added to losses. At year-end, Crown had US$4.8 million in working capital. Its long-term liabilities of US$15 million in convertible debentures carry a 5.75% coupon and are convertible into common stock at US$9.85 per share.

Environmental studies at the Crown Jewel gold project in Washington are almost complete and, depending on permits, production could begin as early as late 1994.

Battle Mountain Gold (NYSE) can earn 51% in Crown Jewel by bringing it into production at a minimum of 3,000 tons per day.

With no provision for capital payback in the earn-in agreement, Crown expects to receive more than US$50 million in operating profit during the first three years.

For 1993, Crown is planning extensive deep drilling at its Cord Ranch property, 20 miles southeast of Carlin, Nev. It is also evaluating opportunities in Latin America.