U.S. REPORT Crowfoot-Lewis output sets record of 26,200 oz. gold

The Crowfoot-Lewis mine reported record gold production in the 1990 third quarter when the open pit operation turned out 26,200 oz. of gold. This compares to production of 24,000 oz. in the third quarter of 1989. The Crowfoot-Lewis mine is owned by Hycroft Resources & Development (VSE) and is about 55 miles west of Winnemucca, Nev. The company tied the recent jump in production to increased recoveries.

The company also announced that the first hole of its deep drilling program was abandoned because of a drill stem failure. The second hole, now being drilled, is expected to reach a depth of about 1,400 ft. Hycroft is exploring for deep feeders, or bonanza-type zones outside the present mining area in the hopes of increasing mining reserves.

Reserves at the mine are sufficient to last 2-3 years at current mining rates, according to Don MacDonald, vice-president of finance. He noted the reserve figure would be updated at year-end.

Hycroft recently filed a notice of intention with the Vancouver Stock Exchange allowing it to purchase up to 5% of the outstanding principal amount of its 7% convertible debentures over a 12-month period.

The principal amount currently outstanding on these debentures is about $6.2 million, and the debentures mature in March, 1992. MacDonald said the debentures are privately held and have recently traded at the 70-75 cents level making them a good investment for the company.

With a working capital deficit of about $10 million, Hycroft’s balance sheet at first glance shows little money available to buy back the debentures. Macdonald notes, however, that current liabilities include $8.5 million in deferred revenue and $7.9 million due to Granges (TSE).

Granges is the company’s major shareholder with 67% of the common equity, and the lion’s share of its debt.