U.S. REPORT Progress toward amalgamation of Crown, Gold Texas

Negotiations are progressing towards an amalgamation of Crown Resource Corp. (NASDAQ), Gold Texas Resources (VSE), and Gold Capital Corp. (Spokane). Specific details of the merger are pending awaiting further ongoing legal and tax studies, says Crown Chairman, Mark E. Jones. The amalgamated company would control a total of 22 properties in five western states and one Canadian province. Crown and Gold Texas each hold a 15% interest in the Kettle River gold project in northeastern Washington which is being explored by Echo Bay Mines. Gold reserves currently stand at 891,000 oz and commercial production is expected in early 1990; their 30% joint venture interest in the project will generate 38,000 oz of gold production per year.

The two companies recently sold a 5% interest (10% total) in the project to Echo Bay for $5 million each. They also arranged financing with Echo Bay to bring their remaining 30% interest to commercial production. Under the financing agreement Echo Bay will provide funding in the form of a non-recourse loan to be paid out of 50% of Crown and Gold Texas net cash from the project.

Crown and Gold Texas each hold a 50% interest in eight other properties in northeastern Washington. Field activities to evaluate these properties are under way including mapping, sampling, geophysical studies and drilling.

Crown will begin a separate $300,000 exploration program on its Seattle/Flag Hill property in Ferry Cty., Wash., sometime this month. The program will be funded by a subsidiary of Texas Star Resource Corp. (VSE) which can earn a 50% interest for an expenditure of $2 million over four years.