UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

or

Commission file number 0-17480

(Exact name of registrant as specified in charter)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES [X]   NO [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). YES [  ]   NO [X]

The aggregate market value (based on the closing price of our common stock on June 30, 2003) of common stock held by non-affiliates of the registrant as of March 19, 2004 was approximately $20,412,348. Shares of common stock held by officers and directors of the registrant are not included in the computations, however, the registrant made no determination that such individuals are "affiliates" within the meaning of Rule 405 of the Securities Act of 1933.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Act subsequent to the distribution of securities under a plan confirmed by a court. YES [X] NO [ ]

There were 22,424,806 shares of common stock, $0.01 par value, outstanding on March 19, 2004.

This Form 10-K consists of 72 pages

Exhibit Index Begins on Page 68

          This Annual Report on Form 10-K contains statements that constitute "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934. These statements can be identified by the fact that they do not relate strictly to historical information and include the words "expects", "believes", "anticipates", "plans", "may", "will", "intend", "estimate", "continue" or other similar expressions. These forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those currently anticipated. These risks and uncertainties include, but are not limited to, items discussed below in this section and elsewhere in this Form 10-K. Forward-looking statements speak only as of the date made. We undertake no obligation to publicly release or update forward-looking statements, whether as a result of new information, future events or otherwise. You are, however, advised to consult any further disclosures we make on related subjects in our quarterly reports on Form 10-Q and any reports made on Form 8-K filed with the Securities and Exchange Commission. These forward-looking statements may be adversely affected by a number of factors, which may include the following:

          Inability to consummate the Merger with Kinross Gold Corporation;

          Adverse results relating to the permitting process for our Buckhorn Mountain Project;

          Fluctuations in gold prices;

          Inability to obtain financing sufficient to allow the execution of Crown's business plans; and

          Other unanticipated events affecting Crown or our properties.

          (a) Overview

          Crown Resources Corporation ("Crown") is a precious metals exploration company operating in the western United States. Crown owns 38.7% of Solitario Resources Corporation ("Solitario"). Crown's investment in Solitario is accounted for under the equity method of accounting. Solitario operates as a precious and base metals exploration company in the United States, Brazil, Bolivia and Peru. Unless the context requires otherwise, "Crown", "we", "us" and "our" refer to Crown Resources Corporation and our consolidated subsidiaries.

          On November 20, 2003 we executed a definitive agreement to merge with Kinross Gold Corporation ("Kinross"), a Canadian corporation (the "Merger"). The Merger is subject to the approval of two thirds of our shareholders and customary closing conditions and is expected to be consummated immediately following approval of our shareholders and satisfaction of the necessary conditions.

          On October 8, 2003 we announced that we would be distributing our holdings of 9,633,585 shares of Solitario's common stock other than shares withheld to avoid the distribution of fractional shares (the "Spin-off"). We plan to distribute substantially all of our shares of Solitario's common stock to our shareholders prior to closing the Merger with Kinross.

          Our principal expertise is in identifying mineral properties and mineral interests with promising mineral potential, acquiring these interests and exploring them to an advanced stage. Our goal is to advance our properties and mineral interests, either on our own or through joint ventures, to the feasibility study stage and thereafter to pursue their development, typically through a joint venture with a partner that has expertise in mining operations. We have in the past recognized, and expect in the future to recognize, revenues from the option and sale of our properties and mineral interests to joint venture partners and from the sale of our share of metals produced from our mineral interests.

          We currently have limited financial resources and, accordingly are not engaged directly in any significant exploration or development activity other than at our Buckhorn Mountain Project, which is described in Item 2. Our current objective is to continue the permitting process for development of our Buckhorn Mountain Project, in conjunction with Kinross. Unless we are successful in these objectives, it is unlikely that we will be in a position in the foreseeable future to pursue additional exploration or development projects. Furthermore, in the event the Merger with Kinross is not completed as planned, we will need significant additional financial resources to develop the Buckhorn Mountain Project and we cannot assure you that we will be able to obtain such financial resources. We currently estimate the development of the Buckhorn Mountain Project will require up to $32.6 million in initial capital and will utilize toll-milli ng pursuant to an agreement with Kinross. Based on our current business plan, we estimate our current financial resources are sufficient to fund our operations through 2005.

          Crown was incorporated under the laws of the State of Washington in August 1988. We file annual reports, quarterly reports, proxy statements and other information with the Securities and Exchange Commission (SEC). You may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains our reports, proxy statements, and other information. The SEC's internet address is www.sec.gov.

          (b) Recent Developments

          On November 20, 2003, we executed a definitive agreement entitled "Acquisition Agreement and Agreement and Plan of Merger" (the "Merger Agreement") with Kinross, whereby each share of our outstanding common stock will be exchanged for 0.2911 shares of Kinross common stock at closing. The Merger is subject to the approval of two thirds of our shareholders and customary closing conditions. Under the Merger Agreement we are required to operate our business in the ordinary course, and we are restricted from engaging in certain significant business and financing transactions, or changes in corporate structure.

          We intend, and the Merger Agreement contemplates, that substantially all of our investment in the common stock of Solitario will be distributed to our shareholders prior to the effective time of the Merger. We have agreed to use commercially reasonable efforts to cause Solitario to make all filings and obtain all regulatory approvals required by the United States and Canadian securities laws and rules of the Toronto Stock Exchange ("TSX") in connection with our distribution of the Solitario common stock to our shareholders and to reasonably cooperate in providing all information to Solitario necessary to complete such filings.

          The Merger Agreement further contemplates that our Board of Directors will take action as permitted under the Crown 2002 Stock Incentive Plan so that all outstanding stock options to purchase Crown common stock will either be exercised or terminated prior to the effective time of the Merger. Additionally, holders of unexercised warrants to purchase shares of Crown common stock will be allowed to elect to exchange the warrant for 0.2911 shares of Kinross common stock for each share of Crown common stock that would have been issued on the exercise of the warrant immediately prior to the effective time of the Merger on a cashless basis, or absent making this election, the warrant will represent the right to acquire Kinross common shares in accordance with the terms and conditions of the warrant as amended pursuant to the Merger Agreement.

          The Merger Agreement may be terminated by either party if the transaction has not been consummated by September 30, 2004 subject to certain conditions, by mutual written consent, or upon our failure to obtain the approval of our shareholders. The Merger Agreement may also be terminated by Kinross or us upon the occurrence of a material breach of the agreement by the other party as defined in the Merger Agreement. Should we fail to complete the Merger as a result of receiving a superior proposal within six months of the date of the Merger Agreement, we will be obligated to pay Kinross a termination fee of $2.0 million plus Kinross' documented, reasonable third-party, out-of-pocket expenses in connection with the Merger Agreement. We have further agreed to use commercially reasonable efforts to amend or redeem our outstanding convertible notes prior to the effective time of the Merger.

          On October 8, 2003 we announced that we would be distributing our holdings of 9,633,585 shares of Solitario's common stock. When Solitario sold shares in a Canadian public offering in 1994, the Toronto Stock Exchange (the "TSX") required that the issued and outstanding shares of Solitario held by us be held in escrow pursuant to an escrow agreement (the "Escrow Agreement") to, among other things, prevent us from selling too large a volume of Solitario shares shortly after the public offering. Over the next three years sixty percent of the shares held in escrow were released to us pursuant to the Escrow Agreement. On December 29, 2003, as required by the TSX, Solitario's disinterested shareholders (which excluded Solitario's officers, directors and us) voted to approve the release of the remaining 3,140,162 shares of Solitario held in escrow. The shares were released from escrow on January 15, 2004. This will enable us to dist ribute substantially all of the 9,633,585 shares of Solitario's common stock to our shareholders in anticipation of closing the Merger with Kinross. No fractional shares will be issued and no cash payments will be made in lieu of fractional shares. We plan to retain any shares not distributed as fractional shares. We estimate the total number of Solitario shares from undistributed fractional shares will be less than 1,000 shares.

          As part of the Corporate Reorganization in 2002 discussed later in this section, we issued $2,000,000 in 10% convertible Secured Notes (the "Secured Notes"). On November 21, 2003 the Secured Notes were called for redemption, and prior to December 31, 2003 $1,994,000 in Secured Notes were converted into 5,679,142 shares of our common stock, with the remainder being redeemed for cash.

          Also as part of the Corporate Reorganization, we issued $4,000,000 in convertible Subordinated Notes (the "Subordinated Notes"). On October 31, 2003 and November 5, 2003 a total $839,331 of Subordinated Notes were converted into 1,119,108 shares of our common stock. On November 5, 2003 the remaining $3,160,669 of Subordinated Notes were automatically converted into 4,214,225 shares of our common stock.

          On February 21, 2003, we issued $2,705,000 of 10% Convertible Subordinated Promissory Notes due 2006, Series B (The "Subordinated B Notes"). The Subordinated B Notes were convertible into our common stock at $0.75 per share. There was no beneficial conversion feature for the Subordinated B Note as the market price was below the conversion price when the transaction closed. The Subordinated B Notes paid interest at 10% in stock or cash at our option, and would have matured in October 2006. Solitario invested $400,000 in the Subordinated B Notes on the same terms as all other investors. On November 5, 2003, $2,705,000 of Subordinated B Notes were automatically converted into 3,606,667 shares of our common stock.

          On March 8, 2002, we filed a voluntary petition for protection under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy") in the United States Bankruptcy Court for the District of Colorado (the "Court"). As part of the Bankruptcy, we filed a Plan of Reorganization (the "Plan") and a Disclosure Statement with the Court on March 25, 2002. On May 30, 2002, the Court confirmed the Plan, which became effective on June 11, 2002 (the "Effective Date"). Accordingly, we were in Bankruptcy a total of 84 days (March 8, 2002 through May 30, 2002). While the Plan resulted in a change in ownership of greater than fifty percent, the reorganization value of our assets immediately before the Effective Date was greater than the total of all post-petition liabilities and allowed claims. As a result, we did not adopt fresh start reporting and continue to recognize our historical basis of accounting.

          As part of the Plan, we restructured our existing $15 million 5.75% Convertible Subordinated Debentures due August 2001 (the "Debentures"). The restructuring was completed through an exchange of outstanding Debentures, including any accrued interest thereon for the following consideration, which has been proportionally distributed to each Debenture holder:

          In order to effect the Plan on the Effective Date, we entered into a Custody and Disbursing Agreement with Wells Fargo Bank, Minnesota N.A. (the "Disbursing Agent") as well as trust indentures with Deutsche Bank Trust Company, Americas, as Trustee on the Secured Notes and with Wells Fargo Bank Minnesota, N.A. as Trustee on the Subordinated Notes. We also transferred $1,000,000 to the Disbursing Agent on the Effective Date. As of December 31, 2003, the Disbursing Agent had delivered $983,667 in cash, $1,967,333 in Secured Notes, $3,934,666 in Subordinated Notes (including any accrued and paid interest from June 11, 2002) and Warrants to purchase 5,620,952 shares of Crown common stock to Debenture holders who had presented $14,755,000 in Debenture certificates. As of March 5, 2004, $245,000 in Debenture certificates have not been presented. If all of these Debentures are presented, the disbursing agent will distribute $16,000 i n cash, 93,333 shares of our common stock from the converted Secured Notes (plus accrued interest since June 11, 2002), 87,111 shares of our common stock from the converted Subordinated Notes (plus accrued interest since June 11, 2002), and warrants to acquire 93,333 shares of our common stock with an exercise price of $0.75 per share. The Debenture holders have until June 2007 to present their certificates, at which time any undistributed cash, stock and warrants will revert to us.

          The Plan provided that all our other liabilities would be paid in the normal course.

          As part of the Plan we effected a one for five reverse split on the Effective Date of the currently outstanding common stock, while maintaining the conversion and exercise prices of the Senior Notes, the Secured Notes, the Subordinated Notes and the related warrants. Under the Plan, any shareholder holding less than 500 shares prior to the one for five reverse split and the holder of our Preferred Stock would receive no distribution. Accordingly, 66,580 shares of our common stock and the outstanding Preferred Stock, held by a wholly owned subsidiary, which had previously been eliminated in consolidation, were cancelled. The reverse split was applied retroactively to all prior periods.

          The Plan also approved the 2002 Crown Stock Incentive Plan (the "2002 Plan") as of the Effective Date. Under the 2002 Plan we may grant options to purchase up to an aggregate maximum of 5 million shares to employees, consultants and directors. As part of the Plan, we filed Restated Articles of Incorporation with the Secretary of State of the State of Washington.

          On July 23, 2001, we entered into an agreement (the "Termination Agreement") with Battle Mountain Gold Company, a wholly owned subsidiary of Newmont Gold Corporation, (both companies referred to as "Newmont") to terminate the joint venture regarding the Crown Jewel Project located in north central Washington. As part of the Termination Agreement we became the sole owner of the Crown Jewel Project and granted Newmont a sliding scale royalty on the first 1 million ounces of gold. In October 2002, we changed the name of the Crown Jewel Project to the Buckhorn Mountain Project to underscore the significant differences between our new underground mining approach and our previous partner's Crown Jewel open pit proposal. We also began seeking regulatory approval of a primarily underground mining plan at the Buckhorn Mountain Project, which we believe significantly reduces the environmental impacts compared to the open-pit mining plan proposed by Newmont.

          On November 11, 2003, we entered into a toll milling agreement (the "Toll Milling Agreement") with Echo Bay Minerals Co. ("Echo Bay Minerals"), a wholly-owned subsidiary of Kinross, whereby we would deliver ore from our Buckhorn Mountain Project deposit to Echo Bay Minerals' Kettle River mill, located near the Buckhorn Mountain Project. Under the terms of the Toll Milling Agreement, Echo Bay Minerals agreed to process up to 1,500 tons per day of ore (the "Production Ores") at a cost to Crown of $20 per ton and we agreed to pay a one-time capital charge of $5,000,000. The agreement is subject to us obtaining the necessary permits to mine and deliver the Production Ores, and other standard toll-milling terms.

          As of December 31, 2003 we are reporting gold reserves of 991,300 ounces based upon a feasibility study prepared by SRK Consulting of Toronto, Ontario Canada.

          (c) Considerations Related to Our Business

          As of December 31, 2003, all of our capitalized costs for mineral property and mineral interest relate to the Buckhorn Mountain Project, located in Washington State. We also hold an interest in the Kings Canyon exploration mineral property in Utah. The Buckhorn Mountain Project consists of a variety of interests including unpatented and patented claims and fee land that we own outright or under lease or option or purchase agreements. We have an indirect interest in Latin American properties through Solitario, which has interests in properties located in Peru, Bolivia, Brazil and, as of February 2004, Nevada (USA). We are currently the operator on all of our properties, and we do not hold any properties or mineral interests outside of the United States other than indirectly through Solitario. To the extent that we have in the past or will enter into joint ventures in the future, the success of projects held under joint ven tures that we do not operate is substantially dependent on the joint venture partner.

          Historically, after selecting a possible exploration area through our own efforts or with others, we compile reports, review past production records, and review geologic surveys concerning the area. We then undertake field exploration programs to determine whether the area merits work. Initial field exploration on a property normally consists of geologic mapping and geochemical and/or geophysical surveys, together with selected sampling to identify host environments that may contain specific mineral occurrences. If an area shows promise, we will generally either conduct geologic drilling programs in an effort to locate the existence of economic mineralization or seek a joint venture partner to undertake such work. If mineralization is delineated, further work will be undertaken to estimate mineralized material, evaluate the feasibility for the development of a mining project, obtain permits for commercial development and, if t he project appears to be economically viable, proceed to place the ore deposit into commercial production.

          We provide management and technical services to Solitario pursuant to a management agreement for which we receive management fees. Certain of our directors and officers are also directors and officers of Solitario. As such, certain of these officers devote a portion of their time to Solitario matters from which we may not receive the full benefit. Additionally, the fact that these officers receive cash compensation from us and not from Solitario may give rise to certain conflicts of interest between these officers' duties to us and to Solitario. Subsequent to the completion of the planned distribution of our Solitario common stock to our shareholders, we intend to continue the current management services arrangement with Solitario. Assuming the Merger is completed after the Spin-off as planned, our management will terminate their employment with us and intend to offer their services directly to Solitario, as we will become pa rt of Kinross.

          The capital required for exploration and development of our properties and mineral interests is substantial. We have financed operations through the issuance of convertible debt instruments, utilization of joint venture arrangements with third parties (generally providing that the third party will obtain a specified percentage of our interest in a certain property in exchange for the expenditure of a specified amount), the sale of interests in properties or other assets, and the issuance of common stock.

          We intend to consummate the Merger with Kinross as planned, but can give no assurances that we will be successful in completing the Merger. In the event the Merger is not completed, we can give no assurance that we will be able to successfully complete the permitting process for the Buckhorn Mountain Project, or obtain adequate financing to allow us to develop and operate the Buckhorn Mountain Project, repay our long-term debt, and continue operations. Assuming our pending merger with Kinross is not completed, we currently estimate we have adequate resources to fund our operations through 2005. See Properties - Buckhorn Mountain Project, and Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.

          A large number of companies are engaged in the exploration and development of mineral interests and properties, many of which have substantially greater technical and financial resources than we do. Therefore, we may be at a disadvantage with respect to many of our competitors in the acquisition, exploration and development of mining properties and mineral interests.

          The exploration for and the development and marketing of minerals is affected by numerous factors, many of which are beyond our control. Among these factors are the price of the raw or refined minerals in the marketplace, imports of minerals from other countries, the availability of adequate milling and smelting facilities, the price of fuel, the availability and the cost of labor, and the market price of competitive minerals.

          Title - U.S. Properties

          Our domestic property consists, to a large extent, of unpatented mining claims on unappropriated federal land pursuant to procedures established by the Mining Law of 1872 and other federal and state laws. These laws generally provide that a citizen of the United States (including corporations) may acquire a possessory right to develop and mine valuable mineral deposits discovered upon unappropriated federal lands, provided that such lands have not been withdrawn from mineral exploration, e.g., national parks, military reservations and lands designated as part of the National Wilderness Preservation System. These laws also provide for the location of unpatented millsite claims for the purpose of mining and milling minerals from valid mining claims. The validity of all unpatented mining claims is dependent upon inherent uncertainties and conditions. These uncertainties relate to such non-record facts as the sufficiency of the dis covery of minerals, proper posting and marking of boundaries and possible conflicts with other claims not determinable from descriptions of record. Furthermore, the acquisition of unpatented millsite claims may be limited by several factors, which include the number of valid unpatented mining claims.

          Prior to discovery of a locatable mineral thereon, a mining claim may be open to location by others unless the owner is in possession of the claim. In the event that the discovery of a valuable mineral deposit is made on unpatented mining claims in the exploratory stage, we may not be able to assure clear title.

          The Budget Reconciliation Act of 1993 (the "1993 Act") requires the holder of each unpatented mining claim to pay a "claim maintenance fee" of $100 per claim on or before August 31 of each year. To locate new unpatented claims, we must pay the $100 per claim maintenance fee for the initial assessment year and a $25 per claim location fee. If we fail to pay a claim maintenance fee or a location fee as required by the 1993 Act, we conclusively forfeit the related unpatented claim.

          In connection with the acquisition of our properties, we have conducted limited reviews of title and related matters, and have obtained certain representations regarding ownership. Although we believe we have conducted reasonable investigations (in accordance with standard mining practice) of the validity of ownership, we cannot assure you that we hold good and marketable title to all of our properties.

          On April 16, 1992, we filed a patent application on unpatented mining claims covering approximately 150 acres at the Buckhorn Mountain Project with the United States Department of the Interior. The Mining Law of 1872 of the United States allows owners of unpatented mining claims that demonstrate economic viability of mineralization discovered on such claims to apply for patent of the unpatented claim. Patenting involves the transfer of surface ownership from the US Government to the successful patent applicant. Certain opposition groups filed a protest to our patent application with the Department of Interior. We filed a response to the protest. The Department of Interior has not set a time frame for granting the patents or responding to the protest.

          Approval of this patent application will not change the ultimate ownership of the reserves at the Buckhorn Mountain project. Currently the mineral rights under the unpatented claims are subject to meeting certain annual maintenance work requirements and payment of an annual claim fee. The US Government owns the surface rights on our unpatented claims. Approval of the patent application will eliminate the annual maintenance and fee requirement as well as vest in us perfected title to the surface and mineral rights on our existing unpatented claims. If the Department of the Interior does not grant the patents on our existing unpatented claims, it will not affect our rights to mine on the unpatented claims nor require us to modify our currently planned mining operation.

          The development, production and sale of minerals is subject to federal, state, provincial and local regulation in a variety of ways, including environmental regulation and taxation. Federal, state, and local environmental regulations generally have a significant effect on all companies, including ours, engaged in mining or other extractive activities, particularly with respect to the permitting requirements imposed on such companies, the possibilities of project delays, and the increased expense required to comply with such regulations. We believe we are in substantial compliance with all such regulations in all the jurisdictions in which we operate.

          We are or may be subject to income taxes, state and local franchise taxes, personal property taxes, and state severance taxes levied by various governmental units in the countries in which we operate. State severance taxes vary between the states and, within a single state, the amount of tax, based on a percentage of the value of the mineral being extracted, vary from mineral to mineral. Our operations may also be subject to taxation by each locality in which we own mineral properties or do business.

          Our exploration programs are subject to federal, state and local environmental regulations. A substantial portion of our mining claims are on U.S. public lands. The United States Forest Service ("USFS") and Bureau of Land Management ("BLM") extensively regulate mining operations conducted on public lands. Most operations involving the exploration for minerals are subject to laws and regulations relating to exploration procedures, safety precautions, employee health and safety, air quality standards, pollution of stream and fresh water sources, odor, noise, dust, and other environmental protection controls adopted by federal, state, and local governmental authorities as well as the rights of adjoining property owners. In addition, in order to conduct mining operations on our properties, we will be required to obtain performance bonds related to environmental permit compliance. These bonds may take the form of cash deposits or, if available, could be provided by outside insurance policies. We may be required to prepare and present to federal, state, or local authorities data pertaining to the effect or impact that any proposed exploration or mining activity may have upon the environment. All requirements imposed by any such authorities may be costly and time-consuming and may delay commencement or continuation of exploration or production operations.

          Future legislation and regulations are expected to continue to emphasize the protection of the environment and, as a consequence, our activities may be more closely regulated to further the cause of environmental protection. Such legislation and regulations, as well as future interpretation of existing laws may result in substantial increases in our capital and operating costs and delays, interruptions, or a termination of operations, the extent of which cannot be predicted.

          Bills proposing major changes to the mining laws of the United States have been considered by Congress. If these bills, which may include royalty fees or net profits interests, are enacted in the future, they could have a significant effect on the ownership and operation of patented and unpatented mining claims in the United States including claims that we own or hold. Although it is not possible to predict whether or in what form Congress might enact changes to the mining laws, amendments to current laws and regulations governing operations and activities of mining companies or more stringent implementation thereof could have a material adverse impact on our financial condition and results of operation.

          Applicable laws and regulations require us to make certain capital and operating expenditures to maintain current operations and initiate new operations. Our estimates of expenditures required to comply with applicable regulations are included in all of our budgets for our projects. Although these costs are difficult to determine, we are not currently aware of any expenditure that is required in excess of budgeted amounts. We incur expenditures for land reclamation undertaken in the normal course of operations in compliance with federal and state land restoration laws and regulations. Under certain circumstances, we may be required to close an operation until a particular problem is remedied or to undertake other remedial actions. However, we are not aware of the existence of any such circumstances at this time.

          The future profitability of our operations is significantly dependent on the price of gold. After reaching a 20-year low of $251 per ounce in late 1999, the price of gold remained at depressed levels through most of 2001, recovered to a price of $347 per ounce on December 31, 2002, and further improved to a price of $415 by December 31, 2003. Many factors influence the price of gold including interest rates, rate of inflation, and the strength of the U.S. dollar in relation to other currencies, supply and demand, economic conditions, and political turmoil. We cannot predict whether gold prices will remain at a level at which our reserves can be mined profitably.

          The gold mining industry is subject to risks of human injury, environmental liability and loss of assets. We maintain insurance coverage consistent with industry practice, but cannot assure you that this level of insurance can cover all risks of harm to Crown associated with being involved in the mining business.

Item 2. Properties

          (a.)     Reserves and Mineral Deposits

          The following table shows our proven and probable gold reserves at December 31, 2003:

          Our proven and probable reserves are reported as mineable (extractable) ore reserves. The mineral reserves and resources reported herein have been verified by SRK Consulting ("SRK"), based in Toronto, Canada, as of December 15, 2003. SRK's feasibility study for the Buckhorn Mountain Project incorporates the Toll Milling Agreement and determined that the reported mineral reserves are economically viable based on current information on costs and technology applicable to mining, metallurgy and other relevant factors that relate to the extraction of the mineral reserve. A summary of the major assumptions is provided below:

          Mineral reserves were estimated based on a gold price of $350 per ounce at December 15, 2003. The value of contained silver in the ore was ignored. The gold price at the time of reporting of the reserves was substantially higher than the level used in estimating. However, the price has been lower during recent time periods. If the market price were to decrease to lower levels, we may determine that our reserves should be re-estimated resulting in a potential reduction in the amount of reserves.

          In addition to the above, we have identified mineral deposits on the Kings Canyon property in Utah. However, we have no proven and probable reserves or capitalized costs associated with this property as of December 31, 2003.

          The following discussion summarizes the primary mineral interests and mineral property in which we have a direct interest. We believe the mineral interests and mineral property described below are favorable for mineral development, although we cannot assure you that any of the mineral interests, in which we have or may acquire an interest, will be economically viable.

          (b.)     Buckhorn Mountain Project

          Property Description and Location. The Buckhorn Mountain Project is located on approximately 2,000 acres, 24 miles east of Oroville, Washington. We currently own 100% of the Buckhorn Mountain Project, which was held in a joint venture with Battle Mountain Gold Corporation ("Battle Mountain") prior to July 2001. During our joint venture with Battle Mountain, the Buckhorn Mountain Project was known as the Crown Jewel Project. Battle Mountain merged with Newmont Gold Corporation ("Newmont") on January 10, 2002.

          The Buckhorn Mountain Project is held by a combination of fee ownership, fee land for which leases are held with options to purchase, and unpatented mining claims. The ore deposit lies primarily on unpatented claims we own. Royalties on mineral property we control and payable to third parties vary from a 2% net smelter return ("NSR") royalty to an 8.33% net profits royalty on certain unpatented mining claims. The ore body as currently defined is subject only to a sliding-scale royalty payable to Newmont of 0.5% to 4%, depending on the price of gold. The Newmont royalty may be purchased in its entirety for $2.0 million at any time before July 23, 2006.

          We have applied for patents on nine unpatented mining claims covering approximately 150 acres.

          Accessibility, Climate, Local Resources, Infrastructure, and Terrain. The Buckhorn Mountain Project is located in the Okanogan Highlands, a mountainous terrain characterized by rounded peaks and moderately steep walled valleys. The elevation range in the project area is approximately 4,500 feet to 5,500 feet.

          Vegetative cover in the project area is mostly coniferous forest dominated by Douglas fir and western larch. Natural openings on forested hillsides consist of dry scrublands or grassy meadows. The climate in the deposit area can be considered temperate. The calculated mean annual precipitation is 20 inches, approximately 35% of which falls as snow. Average annual total snow accumulation in the area of the deposit is about three feet.

          The small community of Chesaw is the closest town. Oroville (population 1,500) is the nearest incorporated community. Paved roads from Oroville approach to within six miles of the property with the remaining access by graded county road and three miles of primitive USFS road. No power exists at the location of the ore deposit. The nearest power is located three miles to the south.

          History. We discovered the ore bodies known as the Buckhorn Mountain Project deposit shortly after acquiring the property in 1988. Prior to that time only small prospect pits, shafts and tunnels had explored the general area, none of which intersected the ore body, as it is currently defined.

          In March 1990, we entered into a joint venture agreement with Battle Mountain (the "Battle Mountain JV Agreement"), under which Battle Mountain could earn a 51% interest in the Buckhorn Mountain Project by building a 3,000-ton per day mining facility. The Battle Mountain JV Agreement was subsequently modified in May 1994 allowing Battle Mountain the right to earn a 54% interest in the Project. Under the Battle Mountain JV Agreement, as amended, Battle Mountain paid us $18,500,000, and funded all exploration and permitting on the Buckhorn Mountain Project through July 2001. On July 23, 2001, we entered into an agreement (the "Termination Agreement") with Battle Mountain to terminate the Battle Mountain JV Agreement. As part of the Termination Agreement, we became the sole owner and manager of the Buckhorn Mountain Project and granted Battle Mountain a sliding scale royalty of 0.5% to 4% on the first one million ounces of gold. The royalty varies with the price of gold and we may purchase the royalty from Newmont, as successor to Battle Mountain, for a payment of $2 million any time before July 23, 2006.

          Since return of 100% ownership of the property, we have conducted drilling, engineering, and environmental studies and permitting activities.

          Geology and Mineralization. The Buckhorn Mountain Project gold deposit occurs within a portion of an extensive calcic skarn system formed at the southern contact of the Buckhorn Mountain Jurassic/Cretaceous-aged diorite-granodiorite pluton with Triassic-aged limestones and andesites. Both the skarn system and the ore body are largely tabular and flat lying in geometry. The skarn system is compositionally zoned in relation to the intrusive pluton with gold mineralization both concordant and crosscutting to the various skarn assemblages. Gold enrichment occurs almost exclusively within skarnified rocks both as irregular bodies and as more continuous tabular replacements of limestone. Gold values are associated with low grades of silver (less than one ounce per ton). No other economic minerals occur within the ore.

          Exploration. We began an exploration program at the Buckhorn Mountain Project in mid-1988 and by the end of 1989 had drilled approximately 200 holes on the property. Between March 1990 and December 1992, Battle Mountain drilled over 550 holes designed to both confirm and expand the known reserve. In 2002 and 2003, we drilled 41 core holes to further confirm the grade and continuity of mineralization in selected parts of the ore body.

          Drilling, Sampling and Analysis, and Security of Samples. Drilling on the property occurred in three phases. We drilled core and reverse circulation rotary holes during the period of 1988 to early 1989. Battle Mountain drilled core and reverse circulation rotary holes from 1990 to 1995 and we drilled core holes in 2002 and 2003. During the first phase of our drilling, splits were taken of drill samples and submitted for analysis to Silver Valley Laboratories of Osburn, Idaho. Core was sawed and reverse circulation rotary chips were riffle split in order to obtain representative samples for analysis. Check assays of selected samples were submitted for comparison with original assays. Sample intervals were selected by the geologist in charge of the project. After acquiring its joint venture interest, Battle Mountain checked our drill results by submitting splits from the core, pulps from core and reverse circulation r otary samples and reverse circulation rotary duplicate chips to a second laboratory for confirmatory assays. Additionally, Battle Mountain drilled twin holes to confirm our results in selected areas.

          Battle Mountain's drilling was logged by a geologist and was sampled on five-foot intervals. Entire core samples were submitted for assay and pulps were checked for re-assay. Rejects of reverse circulation rotary holes were re-assayed. Standards and blanks were submitted along with exploration samples. Battle Mountain primarily used Silver Valley Laboratory of Osburn, Idaho for assay services.

          Samples from our second phase of drilling in 2002 and 2003 were assayed primarily by CAS Laboratories of Spokane, Washington with most check assays performed by ALS Chemex laboratory of Vancouver, British Columbia. Imbedded standards, sample duplicates and blanks were assayed. We used ALS laboratories of Spokane, Washington as the primary laboratory and ALS Chemex laboratory of Vancouver, British Columbia as the primary check assay laboratory. Core was logged and sample intervals were selected by the geological staff for analysis. Chain of custody was documented between the geologist and the laboratory. Core samples and rejects are stored on site under our supervision.

          No significant sampling or analytical biases are known to exist within any of the data sets that could affect the estimation of the resources or reserves.

          Toll Milling Agreement. On November 11, 2003, we entered into a toll milling agreement with Echo Bay Minerals, a wholly-owned subsidiary of Kinross, whereby we agreed to deliver ore from our Buckhorn Mountain Project deposit to Echo Bay Minerals' Kettle River mill, located near Republic, Washington approximately 92 kilometers (57 miles) from the Buckhorn Mountain Project. Under the terms of the toll milling agreement, Echo Bay Minerals agreed to process up to 1,500 tons per day of ore produced at the Buckhorn Mountain Project at a cost to us of $20 per ton. In addition, we agreed to pay a one-time capital charge of $5,000,000 to Echo Bay Minerals on or before the last day of the calendar month following the delivery of ores from the Buckhorn Mountain Project to the Kettle River mill. The toll milling agreement is subject to our obtaining the necessary permits to mine and deliver the ores from the Buckhorn Mountain Proje ct, standard toll-milling terms regarding (among other terms) grade, delivery, commingling and refining, and regulatory approval. If the Merger is consummated, the toll milling agreement will be between subsidiaries of Kinross and, therefore, may be terminated.

          Permitting and Development. In July 2001, we became the sole owner of the Crown Jewel project and renamed it the Buckhorn Mountain Project. Previously, the Crown Jewel Project had been subject to a joint venture agreement between Crown and Battle Mountain. Battle Mountain had proposed an open-pit mining operation with an on-site processing facility. Battle Mountain's proposed open-pit Crown Jewel Project was subjected to numerous permitting and legal challenges and delays. In January of 2000, the Washington Pollution Control Hearings Board (the "PCHB") vacated the previously granted 401 Water Quality Permit and certain water rights for the Crown Jewel Project. Other permits previously granted to the Crown Jewel Project have since lapsed and will have to be reacquired as part of the ongoing permitting process.

          As part of the analysis of the Buckhorn Mountain Project subsequent to the January 2000 PCHB ruling, we retained Gochnour and Associates ("Gochnour") to review the required permits for a potential combination underground/open-pit-mine design for the Buckhorn Mountain Project ore deposit. Gochnour indicated this mine design would require conducting additional baseline studies and collecting data for modeling to amend previously approved permits as well as to obtain permits for activities that were not previously contemplated, for example the underground mining effects on ground water. Gochnour indicated the underground alternative would also require mitigation of environmental impacts. The Gochnour report concluded the proposed mine design is legally permittable.

          During 2002, we began seeking regulatory approval and permits to operate an exclusively underground mining operation at the Buckhorn Mountain Project. In May 2003, we submitted our Initial Buckhorn Mountain Project Plan of Operations with the USFS and the Washington State Department of Ecology. The Initial Buckhorn Mountain Project Plan of Operations was deemed complete by the USFS in August 2003. This plan proposed a processing facility seven miles from the mine that we would construct, own, and operate. The ore would have been trucked from the mine to the mill. We believed this development plan significantly reduced the environmental impacts compared to the Crown Jewel open-pit mining plan proposed by Battle Mountain.

          Subsequent to the signing of the toll milling agreement with Echo Bay Minerals, we filed an amended Buckhorn Mountain Plan of operations as outlined in the SRK feasibility study that provides for trucking of ore from the mine to the Kettle River processing facility owned by Echo Bay Minerals. This new development plan further reduces environmental impacts in comparison to the previous Buckhorn Mountain Project Plan of Operations by eliminating the need for new milling and tailings disposal facilities.

          Although we are not aware of any laws or regulations which would be violated by the mine design proposed in the SRK feasibility study, there will continue to be uncertainty regarding our ability to obtain the necessary permits from the regulatory authorities in a timely manner, if ever.

          Construction of the Buckhorn Mountain Project will not begin prior to the successful issuance of the remaining permits and resolution of the potential future legal and administrative challenges. Potential delays due to the appeals process, permit process or litigation are difficult to quantify. See Item 3, -Legal Proceedings.

          Financing. If the Kinross Merger is not completed, we would require additional capital in the form of either equity or debt financing, or we would need to enter into a joint venture to permit, develop, and operate the Buckhorn Mountain Project. We cannot assure you that such financing would be available on acceptable terms in order for the Buckhorn Mountain Project to enter into commercial production. See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

          (c.)     Other Property Interests

          Cord Ranch Project. We held certain mineral claims in the Dixie Creek and Pinon Range prospects adjacent to Cord Ranch in the state of Nevada. In September 1994, we signed a Joint Venture Option agreement, which was assigned to a subsidiary of Royal Standard Minerals Inc. ("Royal Standard"). Subsequently, Royal Standard earned a 70% interest in these properties pursuant to the agreement.

          On September 4, 2002, we sold our remaining 30% interest in the Cord Ranch properties to Royal Standard for one million shares of common stock of Royal Standard. We recorded a gain on sale of $171,000, based on the quoted market price of the shares received on the date of sale, as we had no carrying value for our interest in the Cord Ranch Properties.

          Kings Canyon. The Kings Canyon property in Utah consists of 360 acres of unpatented claims. We hold a 100% interest in the property, subject to a 4% net smelter royalty to third parties. There are no proven or probable reserves or capitalized costs related to the Kings Canyon property as of December 31, 2003. We will continue to maintain the property and may seek a joint venture partner to further evaluate and develop the Kings Canyon property.

          (d.)          Mineral Interest, Mineral property and Exploration Expenditure Overview

          During 2003, we incurred $858,000 in expenditures in support of permitting and development of our Buckhorn Mountain Project. We are required to pay annual property taxes on fee lands and patented mining claims we own, which we expense to operations as incurred. These amounted to $6,000 and $4,000 for the years ended December 31, 2003 and 2002, respectively. We are required to pay annual rental and maintenance fees to maintain our interests in unpatented mining claims, which we expense to operations as incurred. These amounted to $17,000 and $49,000 for the years ended December 31, 2003 and 2002, respectively. Any production from our fee lands, patented mining claims, and unpatented mining claims will be subject to ad valorem taxes. We have no work commitments to be fulfilled in 2004.

2004 Annual Maintenance Fee Commitments:

          We are not currently involved in any litigation.

          However, beginning in March 1997, the attempt to permit the Crown Jewel Project was subject to various legal challenges in Washington State court, United States District Court, and administrative hearings. Prior permitting efforts centered on Battle Mountain's proposed open pit mine that is no longer being pursued. Our current proposed plan of operation calls for an underground mine, which we anticipate will address many of the prior concerns. Most notably the current plan substantially reduces the number of surface acres that will be impacted by the mining operations, and utilizes the existing Kettle River processing facility owned by Echo Bay Minerals, so that a new processing facility will no longer need to be constructed at or near the site. Although none of the previous legal challenges or protests relate to our current plan of operations, we cannot make assurances that future litigation will not be filed.

          On April 16, 1992, we filed a patent application with the United States Department of the Interior. The Mining Law of 1872 of the United States allows owners of unpatented mining claims that demonstrate economic viability of mineralization discovered on such claims to apply for patent of the unpatented claim. Patenting involves the transfer of surface ownership from the US Government to the successful patent applicant. Certain opposition groups filed a protest to our patent application with the Department of Interior. We filed a response to the protest. The Department of Interior has not set a time frame for granting the patents or responding to the protest.

          Approval of this patent application will not change the ultimate ownership of the reserves at the Buckhorn Mountain project. Currently the mineral rights under the unpatented claims are subject to meeting certain annual maintenance work requirements and payment of an annual claim fee. The U.S. Government owns the surface rights on our unpatented claims. Approval of the patent application will eliminate the annual maintenance and fee requirement as well as combine perfected title to us regarding the surface rights on our existing unpatented claims. If the Department of the Interior does not grant the patents on our existing unpatented claims, it will not affect our rights to mine on the unpatented claims nor require us to modify our currently planned mining operation.

          The impact and timing of resolution of these and any other actions related to the permitting process cannot be determined with any accuracy at this time. See Item 2 - Properties - Buckhorn Mountain Project - Permitting and Development.

          There were no matters submitted to a vote of security holders during the fourth quarter of 2003.

          Our common shares are now traded on the Over the Counter Bulletin Board (OTCBB) under the symbol CRCE.

          The following table sets forth the high and low sales prices on the OTCBB for our common stock for the quarterly periods from January 1, 2002 to December 31, 2003. All prices have been adjusted to take into account the 1 for 5 reverse split in accordance with the Plan.

          Holders of common stock are entitled to receive such dividends as may be declared by the Board of Directors. We have not paid any dividends on our common stock and do not anticipate paying any dividends in the foreseeable future. At March 19, 2004, there were 2,043 record holders of Crown's common stock.

          In October 2001, we issued $3,600,000 of Senior Notes and related warrants. These securities were issued pursuant to an exemption under Section 4(2) of the Securities Act of 1933. In June 2002, we issued $2,000,000 of Secured Notes and $4,000,000 of Subordinated Notes. These notes were issued pursuant to the exemptions provided under section 1142 of the United States Bankruptcy Code. In February 2003, we issued $2,705,000 of Subordinated B Notes. These securities were issued pursuant to an exemption under Regulation D of the Securities Act of 1933. In the fourth quarter of 2003, our outstanding Subordinated and Subordinated B Notes were automatically converted into shares of our common stock and holders of $1,994,000 of our Secured Notes converted them into shares of our common stock. See Item I (b) "Conversions of Debt Obligations to Equity."

Code of ethics

          We adopted the Crown Resources Corporation Code of Ethics for the Chief Executive Officer and Senior Financial Officer (the "Code of Ethics") on March 17, 2004. A copy of which may be found on our website at www.crownresources.com. Any person who wishes to receive a copy of the Code of Ethics may do so at no charge by written request to Investor Relations, Crown Resources, 4251 Kipling St, Suite 390, Wheat Ridge, CO 80033,

          The selected consolidated financial data set forth below as of and for each of the five years in the period ended December 31, 2003 has been derived from the our audited consolidated financial statements (not all of which financial statements are presented herein). The selected consolidated financial data should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the audited consolidated financial statements and related notes thereto included elsewhere in this report.

(1)     As restated. See note 12 to the consolidated financial statements included in Item 8.

(2)     Includes the operations of Solitario on a consolidated basis through October 18, 2000. Subsequent to October 18, 2000, the results of Solitario are reflected under the equity method of accounting.

(3)     We changed our method of accounting for exploration costs and recorded an $8.5 million charge related to the cumulative effect of the change in accounting principle to operations in 1999.

(4)     All per share amounts have been adjusted to account for the 1 for 5 reverse split pursuant to the Plan.

          The following discussion should be read in conjunction with our consolidated financial statements for the years ended December 31, 2003, 2002 and 2001, included elsewhere in this report. Our financial condition and results of operations are not necessarily indicative of what may be expected in future years.

          As discussed in Note 12 to the consolidated financial statements, our financial statements as of and for the years ended December 31, 2002 and 2001 have been restated. The following discussion and analysis of our financial condition and results of operations gives effect to the restatement.

(a.) Business Overview

          We are a precious metals exploration company operating in the western United States. At December 31, 2003, we own 38.7% of Solitario Resources Corporation ("Solitario"). Our investment in Solitario is accounted for under the equity method of accounting. Solitario operates as a precious and base metals exploration company in the United States, Brazil, Bolivia and Peru.

          Our principal expertise is in identifying properties with promising mineral potential, acquiring these properties and exploring them to an advanced stage. Our goal is to advance our properties and mineral interests, either on our own or through joint ventures, to the feasibility study stage and thereafter to pursue their development, typically through a joint venture with a partner that has expertise in mining operations. We have in the past recognized, and expect in the future to recognize, revenues from the option and sale of our properties and mineral interests to joint venture partners and from the sale of our share of metals produced from our mineral interests.

          On November 20, 2003 we executed a definitive agreement to merge with Kinross Gold Corporation ("Kinross"), a Canadian corporation (the "Merger"). The Merger is subject to the approval of two thirds of our shareholders and customary closing conditions.

          On October 8, 2003 we announced that we would be distributing our holdings of 9,633,585 shares of Solitario's common stock other than shares withheld to avoid the distribution of fractional shares (the "Spin-off"). We plan to distribute substantially all of our shares of Solitario's common stock to our shareholders prior to closing the Merger with Kinross.

(b.) Recent Financing Transactions

          As part of the Corporate Reorganization in 2002, we issued $2,000,000 in 10% convertible Secured Notes and $4,000,000 in convertible Subordinated Notes. On November 21, 2003 the Secured Notes were called for redemption, and prior to December 31, 2003, $1,994,000 of Secured Notes were converted into 5,679,142 shares of our common stock, with the remainder being redeemed for cash. On October 31, 2003 and November 5, 2003 a total of $839,331 of Subordinated Notes were converted into 1,119,108 shares of our common stock. On November 5, 2003 the remaining $3,160,669 of Subordinated Notes were automatically converted into 4,214,225 shares of our common stock.

          On February 21, 2003, we issued $2.7 million of 10% Convertible Subordinated B Notes. On November 5, 2003, $2,705,000 of Subordinated B Notes automatically converted into 3,606,667 shares of our common stock.

(c.) Corporate Reorganization

          On March 8, 2002, we filed a voluntary petition for protection under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy") in the United States Bankruptcy Court for the District of Colorado (the "Court"). As part of the Bankruptcy, we filed a Plan of Reorganization (the "Plan") and a Disclosure Statement with the Court on March 25, 2002. On May 30, 2002, the Court confirmed the Plan, which became effective on June 11, 2002 (the "Effective Date"). Accordingly, we were in Bankruptcy a total of 84 days (March 8, 2002 through May 30, 2002). While the Plan resulted in a change in ownership of greater than fifty percent, the reorganization value of our assets immediately before the Effective Date was greater than the total of all post-petition liabilities and allowed claims. As a result, we did not adopt fresh start reporting and continue to recognize our historical basis of accounting.

          As part of the Plan, we restructured our existing $15 million 5.75% Convertible Subordinated Debentures due August 2001 (the "Debentures"). The restructuring was completed through an exchange of outstanding Debentures, including any accrued interest thereon for the following consideration, which has been proportionally distributed to each Debenture holder:

          In order to effect the Plan on the Effective Date, we entered into a Custody and Disbursing Agreement with Wells Fargo Bank, Minnesota N.A. (the "Disbursing Agent") as well as trust indentures with Deutsche Bank Trust Company, Americas, as Trustee on the Secured Notes and with Wells Fargo Bank Minnesota, N.A. as Trustee on the Subordinated Notes. We also transferred $1,000,000 to the Disbursing Agent on the Effective Date. As of December 31, 2003, the Disbursing Agent had delivered $983,667 in cash, $1,967,333 in Secured Notes, $3,934,666 in Subordinated Notes (including any accrued and paid interest from June 11, 2002) and Warrants to purchase 5,620,952 shares of Crown common stock to Debenture holders who had presented $14,755,000 in Debenture certificates. As of March 19, 2004, $245,000 in Debenture certificates have not been presented. If all of these Debentures are presented, the disbursing agent will distribute $16,000 in cash, 93,333 shares of our common stock from the converted Secured Notes (plus accrued interest since June 11, 2002), 87,111 shares of our common stock from the converted Subordinated Notes (plus accrued interest since June 11, 2002), and warrants to acquire 93,333 shares of our common stock with an exercise price of $0.75 per share. The Debenture holders have until June 2007 to present their certificates, at which time any undistributed cash, stock and warrants will revert to us.

          The Plan provided that all our other liabilities would be paid in the normal course.

          As part of the Plan we effected a one for five reverse split on the Effective Date of the currently outstanding common stock, while maintaining the conversion and exercise prices of the Senior Notes, the Secured Notes, the Subordinated Notes and the related warrants. Under the Plan, any shareholder holding less than 500 shares prior to the one for five reverse split and the holder of our Preferred Stock received no distribution. Accordingly, 66,580 shares of our common stock and the outstanding Preferred Stock, held by a wholly owned subsidiary, which had previously been eliminated in consolidation, were cancelled. The reverse split was applied retroactively to all periods.

          The Plan also approved the 2002 Crown Stock Incentive Plan (the "2002 Plan") as of the Effective Date. Under the 2002 Plan we may grant options to purchase up to an aggregate maximum of 5 million shares to employees, consultants and directors. As of March 19, 2004, options to purchase 3,291,500 shares are outstanding. As part of the Plan, we filed Restated Articles of Incorporation with the Secretary of State of the State of Washington.

(d.) Results of Operations

          We currently have no source of recurring revenue and we anticipate any future recurring revenue would only occur after the successful development of the Buckhorn Mountain Project. The successful development of the Buckhorn Mountain Project is dependent on several factors, many of which are beyond our control. Although we are in the late stages of the process of securing the necessary permits for the development of the Buckhorn Mountain Project, we cannot provide any assurance we will be successful in these efforts.

          We have historically derived our revenues from the option and sale of property interests, interest income and to a lesser extent from payments on royalty interests and the sale of our share of gold produced on our properties. Revenues from the option and sale of property interests have consisted of a small number of relatively large transactions. Such transactions have occurred, and in the future are likely to occur, if at all, at irregular intervals and have a significant impact on operating results in the periods in which they occur. In the past, our exploration and development expenditures, including those of Solitario, have constituted the bulk of our activities.

          For 2003, we had a net loss of $2,989,000, or $0.45 per basic and diluted share, compared to net income of $2,091,000, or $0.65 and $0.10 per basic and diluted share, respectively, in 2002. The net loss in 2003 primarily resulted from a lack of any revenue during the year, along with variable option compensation expense of $3,126,000 and other costs of our operations aggregating $1,609,000, with an offsetting income tax benefit of $1,720,000. The net income in 2002 primarily resulted from a $171,000 gain on the sale of our Cord Ranch properties and a gain of $8,684,000 from the discharge of convertible debentures in our 2002 Corporate Reorganization, offset by $387,000 in reorganization costs, variable option compensation expense of $175,000, other costs of our operations aggregating $1,406,000, and an income tax provision of $4,867,000. Each of these items are discussed in more detail below.

          No amounts were reported as revenues and property sales in 2003, and $171,000 was reported in 2002 in relation to the sale of the Cord Ranch properties.

          Exploration expense decreased to $27,000 in 2003 from $58,000 in 2002, as we focused our efforts on completing the Merger Agreement with Kinross and finalizing our Amended Plan of Operations for the Buckhorn Mountain Project.

          General and administrative expenses increased significantly to $995,000 in 2003 from $432,000 in 2002, primarily as a result of increased professional services costs and a decrease in amounts charged to Solitario, as a result of modifications to the Management and Technical Services Agreement with Solitario in July 2002. Legal and accounting costs were $526,000 in 2003 versus $81,000 in 2002. The increase in 2003 was primarily associated with costs in relation to the pending Kinross Merger. In addition, the 2002 costs were lower since certain other legal and accounting costs were charged to reorganization costs in the 2002 statement of operations as in relation to the Corporate Reorganization. All reorganization costs were related to our Bankruptcy in 2002, totaled $387,000, and were reported separately on our consolidated statement of operations. Amounts charged to Solitario for management fees in 2003 decreased to $351,000 from $449,000 in 2002 primarily as a result of a modification to the Management Agreement in July 2002 whereby the percentage of certain finance and administrative costs to be charged to Solitario decreased from 75% for both to 50% and 25%, respectively. Other general and administrative costs, including salaries and other personnel related costs, were comparable from 2002 to 2003. If our pending Merger with Kinross is not completed we expect our general and administrative costs to be comparable to 2003 during 2004 as a result of ongoing professional service costs related to the Merger, which we have incurred during the first three months of 2004.

          Variable option compensation expense increased significantly to $3,126,000 in 2003 from $175,000 in 2002, primarily as a result of an increase in the intrinsic value of stock options due to an increase in the value of our common stock from $0.58 per share at December 31, 2002 to $2.58 per share at December 31, 2003. Under variable plan accounting, which initially resulted from the re-pricing of existing options in 1999 and 1998, changes in the intrinsic value of the stock options are charged (credited) to expense over the service period (the vesting period) of the related options. Variable plan accounting continues until options are exercised, cancelled or expire. If our pending Merger with Kinross is not completed, unless there is a similar or greater increase in the market price of our stock in 2004 compared to 2003, we would expect our variable option expense to be less in 2004 than in 2003. If the market price of our stock declines during 2004 from the December 31, 2003 market price of $2.58 per share, we would record a credit to expense for the change in the intrinsic value.

          Our equity in the loss of Solitario was $571,000 in 2003, versus $873,000 in 2002. The $302,000 improvement resulted from Solitario's lower exploration expense, lower management fees, and increased interest income during 2003. Solitario's lower exploration expense accounted for approximately $220,000 of the improvement, due primarily to joint venture reimbursements during 2003. Lower management fees from us and increased interest income accounted for approximately $40,000 and $55,000 of the improvement, respectively, while the increase in interest income resulted primarily from our paying accrued interest on our debt instruments in shares of our common stock where the value of the shares at issuance was higher than the stated interest rate on the related debt instruments. If our distribution of our holdings of Solitario common stock is not completed, we expect our 2004 equity in loss of Solitario to be comparable to 200 3.

          We recorded an income tax benefit of $1,720,000 in 2003 versus an income tax provision of $4,867,000 in 2002. Although we expect the Spin-Off of our interest in Solitario to our stockholders to be a taxable transaction, we anticipate this will not result in current tax due to the utilization of net operating losses. If our pending Merger with Kinross is not completed, we anticipate offsetting any operating losses incurred in 2004 against our existing deferred tax liabilities at the statutory rate resulting in a tax benefit.

          We had net income of $2,091,000, or $0.65 and $0.10 per basic and diluted share, respectively in 2002 compared with a net loss of $2,098,000 or $0.72 per basic and diluted share in 2001. The net income in 2002 primarily resulted from a gain of $8,684,000 from the discharge of convertible debentures in our 2002 Corporate Reorganization less our general and administrative costs of $432,000, our option compensation expense of $175,000, our equity in the loss of Solitario of $873,000 and our income tax provision of $4,867,000.

          Revenues and property sales consisted of a $171,000 gain on the sale of the Cord Ranch properties in 2002, versus $214,000 in 2001. During 2001, we sold our interest in Judith Gold for 200,000 shares of Canyon Resources common stock, resulting in a gain on sale of $200,000, which equaled the proceeds from the sale.

          Exploration expense was $58,000 in 2002 versus $36,000 in 2001. Through mid 2001, these costs had previously been paid by our former joint venture partner, Battle Mountain.

         General and administrative expenses were $432,000 in 2002 compared to $828,000 in 2001. The lower costs in 2002 primarily resulted from reduced administrative costs, particularly related to legal and accounting expenses that were reduced from $425,000 in 2001 to $81,000 in 2002. The increased 2001 legal expenses for general corporate matters related to the default in 2001 on the Debentures and related restructuring negotiations. In addition, certain additional legal and accounting costs of $387,000 were incurred during 2002 as a result of the Bankruptcy filing and are charged as reorganization costs. Personnel costs decreased to $570,000 in 2002 from $668,000 in 2001, primarily due to lower staffing levels in 2002 and related severance charges in 2001 of $37,000. All other general and administrative costs decreased to $230,000 in 2002 from $325,000 in 2001, due to lower spending on public relations, travel and other office costs. We did not hold an annual meeting in 2002 due to the Bankruptcy, and as our corporate focus shifted to the corporate reorganization, we lowered our overall administrative spending. Amounts charged to Solitario for management fees decreased to $449,000 in 2002 from $590,000 in 2001, primarily as a result of a modification to the Management Agreement in July 2002 whereby the percentage of certain finance and administrative costs to be charged to Solitario decreased from 75% for both to 50% and 25%, respectively

          In 2002, we recorded a charge of $175,000 for variable option compensation expense related to 2002 options grants subject to variable plan accounting. There were no charges to compensation expense for variable plan accounting in 2001, as all variable plan option grants had exercise prices in excess of the market price during the year.

          Our equity in the loss of Solitario was $873,000 in 2002, versus $1,512,000 in 2001. The $639,000 improvement resulted from Solitario's lower exploration expense, general and administrative expenses, management fees and asset write-downs, offset by higher amortization in relation to its mineral interests. Solitario's lower exploration expense accounted for approximately $215,000 of the improvement. During 2002, Solitario's exploration activities were limited to a single project, versus three separate projects in 2001. Lower management fees from us and lower general and administrative expenses accounted for approximately $58,000 and $57,000 of the improvement, respectively. During 2001, Solitario recorded certain asset write-downs that accounted for $525,000 of the improvement. These improvements were offset by $191,000 due to the effect of amortization of Solitario's mineral interests recorded in 2002, where none was recorde d in 2001.

          We recorded an income tax provision of $4,867,000 in 2002, and did not record an income tax benefit in 2001 against our 2001 pretax loss due primarily to the establishment of a valuation allowance against deferred tax assets from operating loss carryovers. As a result of our bankruptcy during 2002, we recognized a gain of $8,684,000 on extinguishment of our Debentures and we had a greater than fifty percent change in ownership as defined in Section 382 of the Internal Revenue Code. This resulted in the utilization of $2,953,000 (tax effected) of our net operating loss carryovers and the change in ownership caused a permanent reduction in previously recorded net operating loss carryovers of $5,751,000 (tax effected) pursuant to Section 382 of the Internal Revenue Code, which limits future taxable income available to be offset. This reduction in our net operating losses during 2002 resulted in an offsetting reduction of our val uation allowance of $3,241,000 during 2002. We recognized tax benefits of $596,000 primarily related to net operating losses generated during the year that were offset against deferred tax liabilities.

Liquidity and Capital Resources

          Due to the nature of the mining business, the acquisition, exploration and development of mineral properties require significant expenditures prior to the commencement of production. We have in the past financed our activities through the sale of debt and equity securities, joint venture arrangements (including project financing) and the sale of interests in our properties. To the extent necessary, we expect to continue to use similar financing techniques.

          Our exploration and development activities and funding opportunities, as well as those of our joint venture partners, may be materially affected by gold price and mineral commodity levels and changes in those levels. The market price of gold and mineral commodities is determined in world markets and is affected by numerous factors, all of which are beyond our control.

          On November 21, 2003 all $2,000,000 of the Secured Notes were called for redemption, and prior to December 31, 2003, $1,994,000 of the Secured Notes converted into 5,679,142 shares of our common stock, with the remainder being redeemed for cash. On October 31, 2003 and November 5, 2003 a total $839,331 of Subordinated Notes were converted into 1,119,108 shares of our common stock. On November 5, 2003 the remaining $3,160,669 of Subordinated Notes were automatically converted into 4,214,225 shares of our common stock.

          On February 21, 2003, we issued $2,705,000 of 10% Convertible Subordinated B Notes. On November 5, 2003, all $2,705,000 of Subordinated B Notes automatically converted into 3,606,667 shares of our common stock.

          Net cash used in operating activities increased to $813,000 in 2003 compared to $729,000 in 2002. The primary reason for the increase was an increase in professional services costs at the end of the year related to the our pending Merger with Kinross and a decrease in amounts charged to Solitario, as a result of modifications to the Management and Technical Services Agreement with Solitario in July 2002. Legal and accounting costs were $526,000 in 2003 versus $81,000 in 2002. The increase in 2003 was primarily associated with costs in relation to the pending Kinross Merger. However during 2002 certain other legal and accounting expense totaling $387,000 were charged to reorganization costs in the 2002 statement of operations in connection with the Corporate Reorganization. If our pending Merger with Kinross is not completed we would expect our 2004 cash used in operating activities to be comparable to 2003, as a result of ongoing professional services costs in 2004 being incurred related to the Merger.

          Net cash used in investing activities increased to $1,215,000 in 2003 from $582,000 as a result of our increased efforts at the Buckhorn Mountain Project since June of 2002 when the Bankruptcy became effective. During 2003 we expended $1,168,000 on development of our Buckhorn Mountain Project compared to $564,000 during 2002. The large increase during 2003 was primarily due to an increase in work performed to complete the SRK feasibility study as well as capitalization of cash paid for interest of $310,000 during 2003 compared to no cash paid for capitalized interest in 2002. Our total costs related to the feasibility study in 2003 were $345,000 compared to $56,000 in the prior year. In addition we hired additional staff and expanded our on-site administrative costs, which increased to $314,000 in 2003 compared to $173,000 in 2003. Capitalized costs during 2003 also included $159,000 for additional work related to obtaining p ermits for the underground mine compared to $53,000 in 2002. During 2002 we started a drilling campaign to provide data to assist in completion of the feasibility study and for permitting the Buckhorn Mountain Project. This drilling campaign ended in 2003. We capitalized $40,000 related to this drilling program in 2003 compared to $251,000 in 2003. If our pending Merger with Kinross is not completed, we expect our 2004 net cash used in investing activities to increase compared to 2003 as we have budgeted approximately $1,400,000 for permitting and development at our Buckhorn Mountain Project in 2004.

          All interest costs, including non-cash interest costs, for the three years ended December 31, 2003 have been capitalized as part of our development of the Buckhorn Mountain Project. We capitalized interest costs of $3,068,000, $996,000 and $1,046,000 for the years ended December 31, 2003, 2002 and 2001, respectively. Interest costs increased significantly to $3,068,000 in 2003 from $996,000 in 2002. This increase was due primarily to increased discount amortization in relation to beneficial conversion feature discounts associated with our convertible debt instruments, and additional interest cost resulting from our election to issue shares of our common stock in satisfaction of accrued interest obligations. Interest cost on our debt obligations at the stated rate in 2003 was $1,075,000 compared to $923,000 in 2002, which included $231,000 of interest on the Convertible Debentures. We recorded discount amortization charges (to capitalized interest) of $1,352,000 and $208,000 in 2003 and 2002, respectively. Of the 2003 discount amortization charges, $940,000 was recorded as the full amortization of all discounts associated with the conversion and redemption of the outstanding Secured Notes. As a result of fair value differences in relation to the issuance of our common stock in satisfaction of accrued interest charges, increases of $628,000 and decreases of $152,000 were recorded to interest costs in 2003 and 2002, respectively. If our pending Merger with Kinross is not completed, we would expect our interest costs to decline significantly in 2004 from 2003 as a result of conversion of our Secured, Subordinated and Subordinated B notes. In addition, because of an improvement in our cash position, we anticipate paying our 2004 interest on our remaining Senior Notes in cash rather than shares of our common stock, if the market price of our common stock is above the conversion and interest price of $0.35 per share in the Senior N otes.

          Net cash provided from financing activities increased to $3,360,000 in 2003 from $2,234,000 in 2004 primarily as a result of the issuance of the $2,705,000 Subordinated B Notes in February 2003 as well as the receipt of $708,000 of cash from the exercise of warrants during 2003. The balance of the $3,600,000 Senior Notes financing of $3,250,000, plus interest was delivered to us during 2002. Of this amount, $1,000,000 was used to pay the cash portion of the exchange with holders of the Debentures on the Effective Date of the plan of reorganization. If our pending Merger with Kinross is not completed, we do not expect 2004 to have any significant cash provided from financing activities as we have no control over note conversions or warrant exercises, such as those that occurred in 2003, and we have no 2004 planned financing activities.

          Net cash used in operating activities was $729,000 in 2002 compared to $763,000 in 2001. The staff levels and activities in both years were consistent and reflected a reduced level of activity for exploration and development as a result of the corporate reorganization. Although we recorded a gain of $8,684,000 on the discharge of our debentures in 2002, this was a non-cash transaction as was our deferred tax expense recorded during the year of $4,867,000. Our equity in the loss of Solitario was reduced in 2002 as a result of Solitario's decreased losses.

          Net cash used in investing activities in 2002 was $582,000 compared to $418,000 in 2001. We began work to permit and develop our Buckhorn Mountain Project during 2002 upon the completion of the corporate reorganization. These costs totaled $533,000 and included costs of $251,000 for an in-fill drilling program, $53,000 for permitting and monitoring work, $56,000 for feasibility study update, and $173,000 for related on-site administrative costs. Permitting and development work continued at a reduced rate from the time we terminated our joint venture with Newmont in July 2001 until the completion of our Bankruptcy in June of 2002. These increases in cash used in investing activities during 2002 were offset by the payment of capitalized interest costs in stock related to the Senior, Secured and Subordinated notes during 2002, compared to a cash payment for interest of $431,000 on the Debentures in 2001. During 2001 we received $211,000 in proceeds from asset sales, which offset our use of funds from investing activities and there was no comparable proceeds received during 2002.

          Total capitalized interest costs, including non-cash interest costs, were $996,000 in 2002 compared to $1,046,000 in 2001. Interest costs decreased in 2002 as a result of the filing of Bankruptcy and the confirmation of the Plan that resulted in no accrual of interest costs on the Debentures from the date of the filing. In addition as part of the Plan, we exchanged $6,000,000 in new notes for $15,000,000 of Debentures. Included in capitalized interest is amortization of warrant and beneficial conversion features related to the Senior and Secured notes of $208,000 in 2002 and $12,000 in 2001 as well as amortization of deferred offering costs related to the Debentures of $68,000 in 2001. In addition, 2002 capitalized interest cost was reduced by $152,000 as a result of our issuing shares of our common stock in satisfaction of accrued interest, where the fair value of the issued shares was lower than the accrued interest obligati on, in accordance with the terms of the related note agreements.

          Net cash provided by financing activities was $2,234,000 in 2002 compared to $320,000 in 2001. Proceeds of $350,000 from the Secured Note financing were delivered to us in October 2001. The balance of the $3,600,000 Senior Notes financing of $3,250,000, plus interest was delivered to us during 2002. Of this amount, $1,000,000 was used to pay the cash portion of the exchange with holders of the Debentures on the Effective Date of the plan of reorganization.

Contractual obligations and planned expenditures

          We have budgeted $1,400,000 for permitting and development expenditures in 2004, which will be fully expended by us only if our pending Merger with Kinross is not completed. The bulk of these costs will be for completion of a supplemental draft environmental impact statement related to the currently filed amended plan of operations for the Buckhorn Mountain Project. This plan assumes the ores from the Buckhorn Mountain Project will be trucked to Kinross' Kettle River Mill and will be processed in accordance with our toll milling agreement with Kinross. Additionally, we will pay certain maintenance and legal expenses to maintain our interest in the Buckhorn Mountain Project. The capital costs of the Buckhorn Mountain Project, through initial production, are currently estimated to be approximately $32.6 million, assuming the toll milling discussed above. If the pending merger with Kinross is not completed, we will require s ignificant new financial resources in order to develop the Buckhorn Mountain Project, which may be in the form of a joint venture, project or debt finance, or issuance of equity. There is no assurance we will be able to obtain the necessary financial resources on acceptable terms, if at all.

          Future contractual obligations and cash commitments at December 31, 2003 include the payment of: Senior Notes, long-term debt, unpatented mining claim payments, and operating leases, as follows: