With its first gold mine in production for just under a year, Crown Resources (VSE) managed to report earnings of US$953,000 for the year ended Dec. 31. Echo Bay Mines (TSE), operator and 70% owner of the Kettle River gold mine in Washington state, announced commercial operation of the mine at the end of January, 1990. Crown has a 30% interest in the mine.
Crown’s share of production from Kettle River for the year was 24,993 oz. Average cash operating costs at the mine totalled US$240 per oz., which is higher than forecast because of lower than expected head grades.
Year-end results include interest expense of US$1.97 million from debt associated with the Kettle mine. The company had been capitalizing the expense up to the point of commercial production.
Included in income for the year was a US$5-million payment received from Battle Mountain Gold. Battle Mountain paid the sum to Crown in March, 1990, for an option to earn a 51% interest in the Crown Jewel property in northern Washington state.
An addition US$5 million was paid to Crown by Battle Mountain in January, 1991, which will be included in the current year’s results.
Battle Mountain is now required to fund the property through to production to earn the interest.
Crown has about 11.8 million shares outstanding and working capital at year-end of US$3 million (not including the second US$5-million payment).
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