Crown Announces 2000 Results.Business Editors DENVER--(BUSINESS WIRE)--April 2, 2001 Crown Resources Corporation today reported a net loss of $1,659,000, or $0.11 per share, for 2000 compared with a net loss before cumulative effect of an accounting change of $2,666,000, or $0.18 per share, for 1999. The reduced loss for 2000 was primarily due to Crown's share of the gain from Solitario For the Mexican professional wrestler, see . The Solitario is a large geologic formation in West Texas. Viewed from above, it suggests an impact crater. In fact, it is the eroded remains of a laccolith. The approximate center of the Solitario is located 56. Resources Corporation's ("Solitario"), Crown's 41.3% owned subsidiary, sale of its Yanacocha Yanacocha is a gold mine in northern Peru, considered one of the biggest and most profitable in the world producing over US$7 billion worth of gold to date. The 251-square kilometer open pit mine is situated about 30 kilometers (14km straight line) north of Cajamarca, in high property during the second quarter of 2000. As previously disclosed, on October October: see month. 18, 2000 (the "Effective Date"), Solitario completed a Plan of Arrangement, (the "Plan") whereby Solitario issued approximately 6.2 million shares of its common stock to acquire Altoro Gold Corp. of Vancouver Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . Primarily as a result of the issuance of the shares in connection with the Plan, Crown's ownership percentage in Solitario has been reduced from 57.2%, prior to the Effective Date, to 41.3% as of December December: see month. 31, 2000. Accordingly, Crown has accounted for its investment in Solitario under the equity method since the Effective Date. Solitario's income, expense and minority interest are included in the Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statement of Operations See Income statement. of Crown through the Effective Date. Crown's interest in the net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. of Solitario are shown on the December 31, 2000, Consolidated Balance Sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. as equity in unconsolidated subsidiary. Crown's share of Solitario's net loss from the Effective Date through December 31, 2000, is shown as equity in loss of unconsolidated subsidiary in Crown's Consolidated Statement of Operations. During 1999, Crown changed its method of accounting for exploration costs on properties without proven and probable reserves from capitalizing all expenditures to expensing all costs, other than acquisition costs, prior to the establishment of proven and probable reserves. The $8,451,000 cumulative effect of the change in accounting principle increased the net loss for 1999 by $0.58 per share to $0.76 per share. Revenues in 2000 were $6,401,000 compared with 1999 revenues of $538,000. The higher revenues in 2000 are the result of a gain on sale of $5,800,000 from the sale of Solitario's Yanacocha property to an affiliate of Newmont Mining Newmont Mining Corporation NYSE: NEM, based in Denver, Colorado, USA, is one of the world's largest producers of gold, with active mines in, Nevada, Indonesia, Australia/New Zealand, Ghana, and Peru. Some smaller operations include Bolivia, Mexico, and Canada. Company for $6,000,000. This gain on sale is partially off-set by the minority interest in income (loss) of subsidiary of $2,141,000. Crown recorded exploration expenses of $903,000 during 2000 compared to $1,025,000 during 1999. The reduction is primarily the result of the elimination in South American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of exploration expense in Solitario for consolidation purposes after the Effective Date. This reduction was offset by an exploration drilling program in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. performed during the first quarter of 2000. General and administrative expenses were $1,171,000 in 2000 compared with $1,367,000 in 1999. Lower administrative expenses in the current year are the result of the elimination of Solitario general and administrative expenses for consolidation purposes since the Effective Date as well as reduced exploration activity and reduced administrative staff and travel. Non-cash write-downs were $2,542,000 in 2000 compared to $166,000 in 1999. As a result of continued low gold prices, Crown wrote down its remaining interest in the Cord Ranch ranch, large farm devoted chiefly to raising and breeding cattle, horses, sheep, and goats. The cattle ranch was introduced from Latin America to Texas and the plains of the W United States and Canada. and Kings Canyon Kings Canyon may refer to several places:
Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. expense. Crown still holds an interest in portions of the Cord Ranch project and in the Kings Canyon property, and Crown will look to joint venture these properties for further exploration and development. On March 22, 2001, Crown paid the interest payment on its $15 million 5.75% Convertible Subordinated Debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before ("the Debentures") which was due on February February: see month. 27, 2001. By making the payment within 30 days of the due date, Crown remained in compliance with the terms of the Debentures. The last interest payment and the $15 million principal are due August 27, 2001. As previously announced, Crown is seeking outside secured financing to raise additional cash to facilitate payment or renegotiation of the Debentures and to maintain and enhance its assets. There can be no assurance that Crown will be able to complete this financing, raise other capital or sell assets to allow for repayment or a negotiated restructure of the Debentures on acceptable terms. Crown's potential inability to pay the interest and principal on the Debentures raises significant doubt as to Crown's ability to continue as a going concern. Crown's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge do not include any adjustments that might result from the outcome of that uncertainty. There can be no assurance that Crown will be able to remove this uncertainty in the near- or long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. future. With the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of the $15 million Debentures to current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. during the third quarter of 2000, the working capital at December 31, 2000, was a negative $14,211,000 compared with $4,881,000 at December 31, 1999. The Company's cash and cash equivalents were $971,000 at December 31, 2000, compared to $5,174,000 at December 31, 1999. Working capital and cash held in Solitario at December 31, 1999 were $2,383,000 and $2,386,000, respectively. Crown Resources Corporation is listed on the over the counter bulletin board (OTCBB OTCBB See OTC Bulletin Board (OTCBB). ) under the symbol CRRS CRRS Comprehensive Records Retention Schedule CRRS Combat Readiness Reporting System CRRS Comprehensive Risk Reduction Specialist and on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol CRO. The information set forth above includes "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " statements that include risks and uncertainties that could cause actual results to differ materially from those projected in such forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . These risks and uncertainties include, but are not limited to, the timing of receipt of necessary governmental permits, the market price of gold, results of current exploration activities and other factors detailed in the Company's Securities and Exchange Commission filings.
CROWN RESOURCES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
December 31, December 31,
2000 1999
------ ------
Assets
Cash and cash equivalents $ 971 $ 5,174
Other current assets 218 201
Mineral properties, net 13,902 16,772
Equity in unconsolidated subsidiary 4,873 -
Other assets 131 562
--- ---
Total Assets $20,095 $22,709
------ ------
Liabilities and Stockholders' Equity
Current liabilities $15,400 $ 494
Long-term liabilities - 15,000
Minority interest - 1,235
Stockholders' equity 4,695 5,980
----- -----
Total Liabilities and
Stockholders' Equity $20,095 $22,709
------ ------
CROWN RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
Years Ended December 31,
-------------------------
2000 1999 1998
---- ---- ----
Revenues $ 6,401 $ 538 $ 610
----- --- ---
Costs and expenses:
Exploration expense 903 1,025 -
General & admin. and other 1,208 1,431 1,605
Interest expense 971 971 971
Asset write-downs 2,542 166 867
Equity in loss of
unconsolidated subsidiary 295 - -
--- -- --
5,919 3,593 3,443
----- ----- -----
Income (loss) before income taxes 482 (3,055) (2,833)
Income tax benefit - - 731
-- -- ---
Loss before minority interest 482 (3,055) (2,102)
Minority interest (2,141) 389 174
----- --- ---
Net loss before cumulative
change in accounting principle (1,659) (2,666) (1,928)
Change in accounting principle - (8,451) -
-- ----- --
Net loss $ (1,659) $(11,117) $(1,928)
------ ------ ------
Per share amounts:
Basic and diluted loss before
change in accounting principle $ (0.11) $ (0.18) $ (0.13)
Change in accounting principle - (0.58) -
-- ----- --
Basic and diluted net loss $ (0.11) $ (0.76) $ (0.13)
------ ------ ------
Weighted average shares
outstanding 14,553 14,534 14,345
------ ------ ------
CROWN RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Years ended December 31,
------------------------
2000 1999
---- ----
Operating activities:
Net loss $ (1,659) $(11,117)
Adjustments:
Depreciation, depletion & amortization 141 167
Asset write-downs 2,542 166
Minority interest 2,141 (389)
Cumulative effect of change in
accounting principle - 8,451
Loss (gain) on asset sales (5,845) 3
Other 264 5
--- -
Net cash used in operating activities (2,416) (2,714)
------ ------
Investing activities:
Additions to mineral properties (258) (217)
Proceeds from asset sales 5,725 22
Cash effect of deconsolidation of subsidiary (6,908) -
Other (346) (64)
---- ---
Net cash used in investing activities (1,787) (259)
------ ----
Financing activities:
Common stock issued under options - 11
-- --
Net cash provided by financing activities - 11
-- --
Net increase in cash and cash equivalents (4,203) (2,962)
Cash and cash equivalents, beginning of period 5,174 8,136
----- -----
Cash and cash equivalents, end of period $ 971 $ 5,174
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