Crown hurt by drop in Kettle River’s grade

Lower grades as well as slightly lower recoveries at the 30% owned Kettle River gold mine in northeastern Washington are reflected in this year’s first-half results for Crown Resources (VSE).

Crown reported a loss of US$900,000 in the second quarter ended June 30, compared with a loss of US$900,000 in 1990.

Net income for the first six months of 1991 was US$1.2 million. This compares with net income of US$2.4 million in the first half of 1990. First-half results for both years include option payments of US$5 million on Jan. 1, 1990, and Jan. 1, 1991, from Battle Mountain Gold which is earning a 51% interest in the company’s Crown Jewel property in Washington state. Gold production for the second quarter totalled 6,759 oz. from Crown’s interest in the Kettle River mine, down from production of 7,718 oz. in the second quarter of last year. Cash costs averaged US$255 per oz. for the first half of 1991 and US$262 for the quarter. This compares with cash costs of US$226 and US$207 for the first half and the second quarter of 1990 respectively.

Crown noted that the increase in production costs at the Kettle River mine were primarily the result of lower ore grades as well as slightly lower recoveries.

During the second quarter head grades dropped to an average of 0.16 oz. gold per ton from an average of 0.21 oz. in the second quarter of 1990. Average gold recovery was 84% in the second quarter compared with 88% in the same period last year.

Mill throughput has been increased and operating results at the mine are expected to improve in the second half of the year. Echo Bay, the operator of the mine, has also instituted a number of cost-reduction programs that are expected to improve results.