UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
  X     Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended
December 31, 2004
or
         Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from             to             
Commission file number 0-17480
CROWN RESOURCES CORPORATION
(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:
Common Stock, $0.01 par value
(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 of $1.75 on June 30, 2004) of common stock held by non-affiliates of the registrant was approximately $25,063,000. Shares of common stock held by officers and directors of the registrant and holders of more than 10% of the registrant common shares 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 40,525,772 shares of common stock, $0.01 par value, outstanding on March 14, 2005.

This Form 10-K consists of 76 pages
Exhibit Index Begins on Page 72
TABLE OF CONTENTS

          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. As discussed below, prior to our distribution of Solitario Resources Corporation ("Solitario") on July 26, 2004, we owned 37.1% of Solitario, which had been 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, as more fully described below (the "Merger"). The Merger is subject to the approval of our shareholders and customary closing conditions. We currently have no source of recurring revenue and we anticipate any future recurring revenue would only occur after the successful development of our Buckhorn Mountain Project. The successful development of the Buckhorn Mountain Project is dependent on several factors, many of which are beyond our control. We cannot provide any assurance that the Merger with Kinross will be completed as planned, or that we will be able to successfully permit and develop the Buckhorn Mountain Project in the event the Merger is not completed.

         On July 26, 2004, we completed a spin-off of Solitario's shares to our shareholders, as more fully discussed under Recent Developments below.

          Our principal expertise is in identifying mineral properties with promising mineral potential, acquiring these properties and exploring them to an advanced stage. Our goal is to advance our properties, 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 to joint venture partners and from the sale of our share of metals produced from our mineral properties.

          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 millin g 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 the first quarter of 2006.

          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. On July 26, 2004, we completed a spin-off of our Solitario shares to our shareholders as contemplated under the Merger Agreement as discussed below under "Spin-off of Solitario Stock."

        On December 30, 2004, we amended our Merger Agreement with Kinross to extend to May 31, 2005, the date on which either party may terminate the Merger Agreement if the merger contemplated therein has not closed. Prior to the amendment, this date had been December 31, 2004. Concurrently with the amendment, we agreed to sell to Kinross and Kinross agreed to purchase from us 511,640 newly issued shares of our common stock at the fair market value of the stock of $1.9545 per share or $1,000,000 in the aggregate. The fair market value of the common stock was based upon the average of the closing market price of a share of Crown common stock for the twenty days prior to December 30, 2004, per the terms of the amendment. The closing of the sale occurred on January 18, 2005. We sold the common stock in reliance on an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, based on our belief that the sale does not involve a distribution. Kinross received restricted stock in the offering. We expect to use the proceeds of this offering to pay for permitting costs related to our Buckhorn Mountain Project.

          Either Kinross or Crown may terminate the Merger Agreement upon the occurrence of a material breach of the agreement by the other party as defined in the Merger Agreement.

          The Merger Agreement further contemplates that all outstanding stock options to purchase Crown common stock will either be exercised or terminated prior to the effective time of the Merger. Between July 7 and July 12, 2004, holders of Crown options representing 3,287,500 shares exercised their options by paying a total of $1,318,000 to us. As of December 31, 2004, we had no outstanding stock options.

          Additionally, holders of unexercised warrants to purchase shares of Crown common stock have the right 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 date 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. On July 15, 2004, holders of Crown's warrants exercisable into 947,140 shares exercised the warrants on a cash basis into 947,140 shares of Crown common stock by paying a total of $711,000 to us. On July 12, 2004, Solitario exercised warrants for 3,771,428 shares of common stock on a cashless basis and received 2,398,336 shares of Crown common stock. On August 16, 2004, holders of Cro wn warrants exercisable into 419,049 shares exercised the warrants on a cashless basis and received 208,118 shares of Crown common stock. As of December 31, 2004, we had warrants outstanding which are exercisable for up to 8,243,335 shares with an exercise price of $0.75 per share and which expire in October 2006. See discussion of the unexercised warrant liability in Note 8 to the Consolidated Financial Statements, which are included in Item 8 of Part II.

         On July 26, 2004, we completed a spin-off of Solitario's shares to our shareholders, whereby each Crown shareholder received 0.2169 shares of Solitario common stock for each Crown share they owned. As part of the spin-off, we retained 998,306 shares of Solitario common stock (the "Retained Shares") for the benefit of our warrant holders who will receive those shares when the warrant holders exercise their warrants. Subsequent to the spin-off, we distributed 48,923 Retained Shares upon the exercise of warrants and at December 31, 2004, had 950,013 Retained Shares. Although we claim no beneficial ownership in the Retained Shares, we carry our investment in the Retained Shares at fair value with changes in the fair value recorded in the statement of operations. We have recorded an unexercised warrant liability of $12,881,000, which includes $1,428,000 classified as a current liability for the portion of the unexercised warrant liab ility which will be settled by the Retained Shares to be distributed and $11,453,000 for the fair value of the unexercised warrant liability which will be settled in shares of Crown common stock, classified as non-current. During the year ended December 31, 2004, we recorded a gain on our investment in Retained Shares of $1,263,000. In addition, we retained 93 Solitario shares, from fractional shares, which we intend to sell. After the disposition of the Solitario shares retained for warrant holders and fractional shares, we will no longer own any shares of Solitario.

          As part of the Corporate Reorganization in 2002 discussed below, 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, Secured Notes of $1,994,000 were converted into 5,679,131 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 July 14, 2004, holders of Crown's $3,600,000 10% Convertible Senior Notes converted all of the outstanding notes into 10,744,249 shares of Crown common stock (which include 258,537 shares for accrued interest through the date of conversion). As of December 31, 2004, Crown has no Senior Notes outstanding.

          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. 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, all of the Subordinated B Notes were automatically converted into 3,606,667 shares of our common stock.          

          On December 22, 2004 the United States Department of the Interior/Bureau of Land Management ("BLM") issued patents for nine mining claims at the Buckhorn Mountain Project in Okanogan County, WA. Issuance of these patents, which cover about 154 acres of land, transfers the ownership of the surface of the mining claims to us from the United States government. We previously owned the minerals on the claims, which we have held since 1988.

          (c) Considerations Related to Our Business

          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 of Reorganization") and a Disclosure Statement with the Court on March 25, 2002. On May 30, 2002, the Court confirmed the Plan of Reorganization, 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 of Reorganization 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 histor ical basis of accounting.

          As part of the Plan of Reorganization, 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 of Reorganization 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, 2004, the Disbursing Agent had delivered $988,000 in cash, $1,967,333 in Secured Notes, $3,934,666 in Subordinated Notes (including any accrued and paid interest from June 11, 2002), 47,870 shares of our stock in lieu of converted Senior and Subordinated notes and accrued interest thereon, and Warrants to purchase 5,645,685 shares of Crown common stock to Debenture holders who had presented $14,820,000 in Debenture certificates. As of March 14, 2005, $180,000 in Debenture certificates had not been presented. If all of these Debentures are presented, the disbursing agent will distribute $12,000 in cash, 68,571 shares of our common stock from the converted Secured Notes (plus accrued interest since June 11, 2002), 64,000 shares of our common stock from the converted Subordinated Notes (plus accrued interest since June 11, 2002), and warrants to acquire 68,571 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 of Reorganization provided that all our other liabilities would be paid in the normal course.

          As part of the Plan of Reorganization 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 of Reorganization, 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 of Reorganization 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 of Reorganization, 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, 2004 we are reporting gold reserves of 991,300 ounces based upon a feasibility study prepared by SRK Consulting of Toronto, Ontario Canada.

          As of December 31, 2004, all of our capitalized costs for mineral property 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. 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 ventures 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. Assuming the Merger is completed as planned, our management will terminate their employment with us and intend to offer their services directly to Solitario, as we will become part of Kinross.

          (d) Risk Factors

          We announced our merger with Kinross in October 2003 and signed the definitive agreement in November 2003. We have extended the termination date of the merger to May 31, 2005. We cannot provide any assurance that the merger will be completed prior to the termination date. The current delay is primarily the result of difficulties encountered by Kinross regarding accounting and disclosure issues related to Kinross' allocation and subsequent impairment testing of goodwill. The merger will not be consummated until these issues are resolved. Kinross has engaged an independent valuation firm to review their allocation and impairment testing of goodwill. The completion of this review and its effects are not currently known. Further delays are possible that could result in termination of the Kinross agreement, unless we agree to another extension of the termination date with Kinross. We can provide no assurance that the termin ation date will be extended, nor any assurance that if the termination date is extended, the merger will be completed. If the merger is not completed, Crown would be required to either find another company to merge with, attempt to sell or joint venture the Buckhorn Mountain Project, or move forward with development of the Buckhorn Mountain Project on its own. Any of these options would require additional capital and imply additional risks, detailed below. There can be no assurance that Crown would be able to pursue any of these alternatives. If Crown were to pursue these alternatives, it may not be successful in completing them. The termination or failure to complete the merger with Kinross could have a negative impact on our share price, our financial condition and results of operations.

          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 and continue operations. Although we estimate we have adequate resources for our operations, including permitting of Buckhorn Mountain, through the first quarter of 2006, if the pending merger with Kinross is not completed, and we are unable to permit, develop and mine the Buckhorn Mountain Project on our own, we could not expect to operate with our existing resources or property which would negatively impact the market price of our stock and our future financial condition and results of operation.

          The capital required for exploration and development of our Buckhorn Mountain Project 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. Assuming our pending merger with Kinross is not completed, we currently estimate we have adequate resources to fund our operations through the first quarter of 2006. Failure to complete the pending merger with Kinross would cast doubt on our ability to obtain adequate financing and could negatively impact the market price of our stock and our future financial condition and results of operation.

          A large number of companies are engaged in the exploration and development of mineral properties, many of which have substantially greater technical and financial resources than we do. Our common stock trades on the over the counter bulletin board and is not widely held or traded. Therefore, we may be at a disadvantage with respect to many of our competitors in the acquisition, exploration and development of mining properties and market valuation of the shares of our common stock.

          The exploration for and the development and marketing of minerals are 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. We can provide no assurance that we will be able to compete in exploration and development of mineral properties if the planned merger with Kinross is not completed. The disadvantages we face could negatively impact the market price of our stock and our future financial condition and results of operation.

          Since October 2003, the return on our shareholders' investment in our stock has been almost exclusively tied to Kinross' share price. We expect this to continue as long as we are subject to the planned merger agreement with Kinross. We have virtually no control over the factors that affect Kinross stock price. If Kinross stock price declines for any reason, this could negatively impact the market price of our stock.

          The ownership of our properties is based upon a complex set of legal titles, which are subject to uncertainties that may be challenged and could be determined to be deficient or invalid, which could adversely affect our ownership of the Buckhorn Mountain Project.

          Our domestic property consists, to a large extent, of patented mining claims as well as 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 (i.e. unpatented mining claim) 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 uncertaint ies relate to such non-record facts as the sufficiency of the discovery 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"), with subsequent amending acts, currently 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 $135 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. We cannot assure you that we hold good and marketable title to all of our properties. Should the title to any of our properties be challenged or found to be invalid for any reason, this could negatively impact our ownership of all or a portion of the Buckhorn Mountain Project. Any degradation in the title to our Buckhorn Mountain Project could negatively impact the market price of our stock and our future financial condition and results of operation.

          Our operations could be negatively affected by existing as well as potential changes in laws and regulatory requirements that we are subject to, including regulation of mineral exploration and land ownership, environmental regulations and taxation.

          The development of the Buckhorn Mountain Project is subject to federal, state and local environmental regulations. A 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. Our operations involving the development of Buckhorn Mountain is 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, if the Kinross merger is not completed as planned, in order to conduct mining operations at the Buckhorn Mountain Project, 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 at Buckhorn Mountain 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.

          Adverse changes in environmental and other government regulations could have a material adverse effect on the price of our stock and our financial position or results of operations.

          The amount of taxes that the Buckhorn Mountain Project could be subject to is substantial and the potential increase in those taxes could negatively impact our operations.

          If the planned merger with Kinross is not completed, the Buckhorn Mountain Project is and may become subject to substantial taxes including, income taxes, state and local franchise taxes, personal property taxes, and state severance taxes levied by various governmental units where we operate. Washington State severance taxes are based on a percentage of the value of the mineral being extracted, and they vary from mineral to mineral. Taxes have historically increased and our operations may also be subject to increased taxation by each jurisdiction in which the Buckhorn Mountain Project is located, and we cannot predict what those increases may be. A substantial increase in taxes could have a material adverse effect on the price of our stock and our financial position or results of operations.

          Our operations will be significantly affected by changes in the market price of gold and other commodities since the evaluation of the commercial viability of the Buckhorn Mountain Project is heavily dependent upon the market price of gold and to a lesser extent other commodities. The price of commodities also affects the value of exploration projects we own or may wish to acquire if the Kinross merger is not completed. These prices of commodities fluctuate on a daily basis and are affected by numerous factors beyond our control. The supply and demand for gold and other commodities, the level of interest rates, the rate of inflation, investment decisions by large holders of these commodities, including governmental reserves, and stability of exchange rates can all cause significant fluctuations in prices. Such external economic factors are in turn influenced by changes in international investment patterns and monetary syst ems and political developments. The prices of gold and other commodities have fluctuated widely and future serious price declines could have a material adverse effect on the price of our stock and our financial position or results of operations.

          Our business is dependent on key executives and the loss of any of our key executives could adversely affect our business, future operations and financial condition.

          We are dependent on the services of key executives, including our Chief Executive Officer, Christopher E. Herald, our Chief Financial Officer, James R. Maronick, and our Vice President of Operations, Walter H. Hunt. All of the above named officers have many years of experience and an extensive background in Crown and the mining industry in general, and each is also an officer of Solitario. We may not be able to replace that experience and knowledge with other individuals. Pursuant to a Management Agreement between Solitario and us, we are reimbursed for direct out-of-pocket expenses, payment of between 25% and 75% of executive and administrative salaries and benefits as well as other administrative costs. In the event that the Kinross transaction is not completed, we anticipate that we would continue to operate under the Management Agreement with Crown. For more information regarding the Management Agreement see "Related Part y Transactions." We do not have key man life insurance policies on any of our executive officers. The loss of these persons or our inability to attract and retain additional highly skilled employees may adversely affect our business, future operations and financial condition.

          Occurrence of events for which we are not insured may require us to pay for losses for which we may not have adequate resources. These losses may be due to environmental liabilities, loss of property, death or injuries from activities incidental to our operations and other losses, which we cannot currently predict.

          Mineral exploration and development is subject to risks of human injury, environmental liability and loss of assets. We maintain insurance to protect ourselves against certain risks related to our operations, however, we may elect not to have insurance for certain risks because of the high premiums associated with insuring those risks or for various other reasons; in other cases, insurance may not be available for certain risks. We do not maintain insurance against political risk. Occurrence of events for which we are not insured could have a material adverse effect on stock price and our financial position or results of operations.

Item 2. Properties

          (a.)     Reserves and Mineral Deposits

          The following table shows our proven and probable gold reserves at December 31, 2004:

          Our proven and probable reserves are reported as mineable (extractable) ore reserves. The mineral reserves and resources reported herein were verified by SRK Consulting ("SRK"), based in Toronto, Canada, as of December 15, 2003. We undertook a review to test SRK's ore reserve estimate for impairment in late 2004 and determined that no changes in the SRK's estimate were necessary based upon the following: 1) none of the ore reserves were mined in 2004, consequently there was no depletion of the ore reserve; 2) the aspects of the mine plan have not materially changed; 3) permitting has not impacted the overall mine and milling plan; and 4) we elected to use the same price of gold used in determining ore reserves, $350 per ounce. There were also no new materially negative, or positive, information or developments that would cause us to modify the feasibility study or ore reserve estimate. 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 by SRK based on a gold price of $350 per ounce at December 31, 2003 and reviewed by Crown using the same gold price at December 31, 2004. The market price of gold has ranged from a high of $454 per ounce to a low of $375 per ounce during 2004. The use of $350 per ounce for our 2004 review of our reserves is reasonable as it takes into account our estimate of the lower end of potential gold pricing and volatility over the life of the mine. 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, 2004.

          The following discussion summarizes the mineral property in which we have a direct interest. We believe the mineral property described below are favorable for mineral development, although we cannot assure you that any of the mineral property 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 entirely on fee lands (patented mining claims) that 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 applied for patents on nine unpatented mining claims covering approximately 150 acres in 1992. In December 2004, the Department of Interior-Bureau of Land Manage approved our patent applications and we received title to both the surface and mineral estate on approximately 154 acres of land. These patented claims cover most of the ore reserves, the remaining portion of the reserves being covered by older patented claims. We now own title to both the mineral and surface estate covering the entire ore reserve.

          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. No drilling was conducted on the property in 2004.

          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 ("WDOE"). 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.

          As a result of the Department of Interior-Bureau of Land Management issuing the patents to us, the surface title was transferred from the USFS to us. Subsequently, the USFS determined that it was unnecessary for it to continue to be a co-lead agency in the permitting process. The WDOE is now the sole lead agency for all permitting activities. The USFS is currently preparing an Environmental Assessment (EA) for proposed activities that will occur on federal land, including upgrading of existing access roads, the construction of approximately 1.5 miles of new road, the installation and maintenance of water quality monitoring wells and construction of a perimeter fence line. Most baseline fieldwork necessary for completing the Draft Supplemental Environmental Impact Statement ("DSEIS") was completed by the end of 2004 and data generated by this work is under review and compilation. When this compilation is completed, the WDOE wil l issue a DSEIS for public comment and the USFS will issue an EA. The DSEIS and EA releases are currently scheduled for early fall of 2005. However, there can be no assurance that this schedule will be met.

          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 any 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

          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, 2004. 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 property and Exploration Expenditure Overview

          During 2004, we incurred $2,095,000 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 $5,000 and $6,000 for the years ended December 31, 2004 and 2003, 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 $21,000 and $17,000 for the years ended December 31, 2004 and 2003, 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 2005.

2005 Annual Maintenance Fee Commitments:

          There were no matters submitted to a vote of security holders during the fourth quarter of 2004.

          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, 2003 to December 31, 2004.

          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 14, 2005, there were approximately 170 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. All outstanding Senior Notes were converted to shares of our common stock in the third quarter of 2004. See Item I (b) Conversions of Debt Obligations to Equity under Recent Developments above.

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, 2004 has been derived from the our audited consolidated financial statements (Balance sheet data as of December 31, 2004 and 2003 and Statement of operations data for the years ended December 31, 2004, 2003 and 2002 are derived from audited consolidated financial statements included in Item 8, below. Balance sheet data as of December 31, 2002, 2001 and 2000 and Statement of operations data for the years ended December 31, 2001 and 2000 are derived from audited consolidated financial statements which have been presented in previous filings with the SEC). 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 in Item 8 of Part II.

(1)     As restated. See note 14 to the consolidated financial statements included in Item 8 of Part II.
(2)     Includes the operations of Solitario on a consolidated basis through October 18, 2000. Subsequent to October 18, 2000 and until
             July 26, 2004, the results of Solitario are reflected under the equity method of accounting. On July 26, 2004 we completed the spin-off
             of Solitario to our shareholders.  See Note 4 to the consolidated financial statements included in Item 8.
(3)     All per share amounts have been adjusted to account for the 1 for 5 reverse split pursuant to the Plan of Reorganization.

          As discussed in Note 14 to the consolidated financial statements, our financial statements as of and for the year ended December 31, 2003 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. As discussed below, prior to our distribution of Solitario Resources Corporation ("Solitario") on July 26, 2004, we owned 37.1% of Solitario, which had been 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 mineral properties, 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 mineral properties to joint venture partners and from the sale of our share of metals produced from our mineral properties.

          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. We currently have no source of recurring revenue and we anticipate any future recurring revenue would only occur after the successful development of our Buckhorn Mountain Project. The successful development of the Buckhorn Mountain Project is dependent on several factors, many of which are beyond our control. We cannot provide any assurance that the Merger with Kinross will be completed as planned, or that it will be able to successfully permit and develop the Buckhorn Mountain Project in the event the Merger is not completed.

          Our capitalized mineral property and mineral interests relate entirely to our Buckhorn Mountain Project, located in the State of Washington. We are currently developing the Buckhorn Mountain Project, which includes permitting efforts to build and operate an underground mine and to truck the ore extracted from the Buckhorn Mountain Project to the Kettle River mill, located approximately 52 miles from the Buckhorn Mountain Project. Kinross Gold Corporation, a Canadian corporation ("Kinross") owns the Kettle River mill. As discussed below, in December 2003, we entered into a toll-milling agreement with Kinross to facilitate the processing of the Buckhorn Mountain Project ore. As of December 31, 2004, our mineral reserves at the Buckhorn Mountain project, pursuant to a feasibility study prepared by an independent mining consulting firm, are 3,075,000 tons of ore at a grade of 0.32 ounces of gold per ton, for a total reserve of 991 ,000 ounces of gold. The vast majority of our current and near-term efforts are related to this development effort at the Buckhorn Mountain Project as well as the completion of the Merger.

          Since the announcement of the planned Kinross merger we have essentially limited our activities to permitting the Buckhorn Mountain Project and general and administrative duties required to complete the planned merger. However, we have historically derived our revenues principally from interest income and the option and sale of property 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. Our current objective is to complete the permitting process for development of the 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 consummated, we will need signi ficant additional financial resources to develop the Buckhorn Mountain Project and we cannot provide assurance that we will be able to obtain such financial resources. We currently estimate the initial capital cost for the Buckhorn Mountain Project will require up to $32.6 million. Based upon our current business plan, we estimate our current financial resources are sufficient to fund its operations through the first quarter of 2006.

          On July 26, 2004, we completed a spin-off of Solitario's shares to its shareholders, whereby each Crown shareholder received 0.2169 shares of Solitario common stock for each Crown share they owned. As part of the spin-off, on July 26, 2004, we retained 998,306 shares of Solitario common stock (the "Retained Shares") for the benefit of our warrant holders who will receive those shares when the warrant holders exercise their warrants. During the year ended December 31, 2004, we distributed 48,923 Retained Shares upon the exercise of warrants and at December 31, 2004, had 950,013 Retained Shares. Although we claim no beneficial interest in the Retained Shares, we carry our investment in the Retained Shares at fair value with changes in the fair value recorded in the statement of operations. We have recorded an unexercised warrant liability of $12,881,000, which includes $1,428,000 classified as a current liability for the portion of the unexercised warrant liability which will be settled by the Retained Shares to be distributed and $11,453,000 for the fair value of the unexercised warrant liability which will be settled in shares of Crown common stock, classified as non-current. We record any changes in the value of our unexercised warrant liability in the statement of operations. See Note 8 to the consolidated financial statement included elsewhere in this report. During the year ended December 31, 2004, we recorded a gain on our investment in Retained Shares of $1,263,000 and we recorded a loss on derivative instruments related to our unexercised warrant liability of $3,475,000. In addition, we retained 93 Solitario shares, from fractional shares, which we intend to sell. After the disposition of the Solitario shares retained for warrant holders and fractional shares, we will no longer own any shares of Solitario.

          On December 21, 2004, the Department of Interior-Bureau of Land Management approved our patent application on nine unpatented mining claims and we received title to both the surface and mineral estate on approximately 154 acres of land. We now own title to both the mineral and surface estate covering the entire ore reserve.

          (b.) Recent Financing Transactions

          On July 14, 2004, holders of our $3,600,000 10% Convertible Senior Notes converted all of the outstanding notes into 10,744,249 shares of our common stock (which include 258,537 shares for accrued interest through the date of conversion). As of December 31, 2004, we had no Senior Notes outstanding.

          Between January 1 and July 12, 2004, holders of Crown options, which had been granted to our employees and directors, representing 3,379,000 shares exercised their options for cash pursuant to their terms by paying a total of $1,321,000 to us. As of December 31, 2004, we have no outstanding stock options.

          On July 15, 2004, holders of our warrants exercisable into 947,140 shares exercised the warrants on a cash basis into 947,140 shares of our common stock by paying a total of $711,000 to us. On July 12, 2004 Solitario exercised warrants for 3,771,428 shares of common stock on a cashless basis pursuant to the terms of the warrants and received 2,398,319 shares of our common stock. On August 16, 2004 holders of our warrants exercisable into 419,049 shares exercised the warrants on a cashless basis and received 208,118 shares of our common stock. As of December 31, 2004, we have warrants outstanding which are exercisable for up to 8,243,335 shares with an exercise price of $0.75 per share and which expire in October 2006. See discussion of the unexercised warrant liability in Note 8 to the consolidated financial statements included elsewhere in this report.

          On December 30, 2004, we agreed to sell to Kinross and Kinross agreed to purchase from us 511,640 newly issued shares of our Common Stock at the fair market value of the stock of $1.9545 per share or $1,000,000 in the aggregate. The fair market value of the common stock was based upon the average of the closing market price of a share of Crown common stock for the twenty days prior to December 30, 2004, per the terms of the amendment. The closing of this sale occurred on January 18, 2005.

          (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 of Reorganization") and a Disclosure Statement with the Court on March 25, 2002. On May 30, 2002, the Court confirmed the Plan of Reorganization, 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 of Reorganization 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 of Reorganization, 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 of Reorganization 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, 2004, the Disbursing Agent had delivered $988,000 in cash, $1,967,333 in Secured Notes, $3,934,666 in Subordinated Notes (including any accrued and paid interest from June 11, 2002), 47,870 shares of our stock in lieu of converted Senior and Subordinated notes and accrued interest thereon, and Warrants to purchase 5,645,685 shares of Crown common stock to Debenture holders who had presented $14,820,000 in Debenture certificates. As of March 14, 2005, $180,000 in Debenture certificates had not been presented. If all of these Debentures are presented, the disbursing agent will distribute $12,000 in cash, 68,571 shares of our common stock from the converted Secured Notes (plus accrued interest since June 11, 2002), 64,000 shares of our common stock from the converted Subordinated Notes (plus accrued interest since June 11, 2002), and warrants to acquire 68,571 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 of Reorganization provided that all our other liabilities would be paid in the normal course.

          As part of the Plan of Reorganization 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 of Reorganization, 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 of Reorganization 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 December 31, 2004, all options granted had been exercised. As part of the Plan of Reorganization, we filed Restated Articles of Incorporation with the Secretary of State of the State of Washington.

          (d.) Results of Operations

          Since the announcement of the planned Kinross merger we have essentially limited our activities to permitting the Buckhorn Mountain Project and general and administrative duties required to complete the planned merger. We currently have no source of recurring revenue and if the planned merger with Kinross is not completed we anticipate any future recurring revenue would only occur after the successful development of the Buckhorn Mountain Project. Our activities, primarily consisting of permitting the Buckhorn Mountain Project have not been materially affected by inflationary factors over the last three years. 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 success ful 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 2004, we had a net loss of $6,004,000, or $0.20 per basic and diluted share, compared to a net loss of $3,854,000, or $0.59 per basic and diluted share, respectively, in 2003. We recorded no revenue in 2004 or 2003. The net loss in 2004 is primarily a result of a $3,475,000 loss on derivative instrument, offset by a $1,263,000 gain on our investment in Solitario, deferred income tax expense of $1,909,000, and other costs of operations aggregating $1,883,000. The net loss in 2003 is primarily a result of variable option compensation expense of $3,126,000 and other costs of operations aggregating $1,609,000, with an offsetting income tax benefit of $855,000. Each of these items is discussed in more detail below.

          On July 1, 2004, as a result of declaring, as a dividend, the distribution of Crown's 9,633,585 shares of Solitario common stock, the classification of Crown's warrants changed from an equity derivative instrument to that of a liability derivative instrument in accordance with SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". As a result, Crown recorded an unexercised warrant liability of $16,107,000 for the fair value of the securities to be delivered to the warrant holders upon the exercise of their warrants, with a corresponding charge to additional paid-in capital. All subsequent increases and decreases in the fair value of the warrant are recorded in the statement of operations as gain or loss on derivative instruments. During the year ended December 31, 2004, Crown recorded a loss on derivative instrument of $3,475,000, related to the increases in the fair value of the unexercised warrants .

          On July 26, 2004, Crown completed a spin-off of Solitario's shares to its shareholders, whereby each Crown shareholder received 0.2169 shares of Solitario common stock for each Crown share they owned. As part of the spin-off, on July 26, 2004, Crown retained 998,306 Solitario shares, (the "Retained Shares") for the benefit of Crown's warrant holders who will receive those shares when the warrant holders exercise their warrants. During the year ended December 31, 2004, Crown recorded a gain of $1,263,000 on its investment in retained shares of Solitario related to the difference in the carrying cost of the Retained Shares on the date of the spin-off of $214,000 and the fair value of the balance of the Retained Shares at December 31, 2004 of $1.50 per share.

          General and administrative expenses decreased slightly to $935,000 in 2004 compared to $995,000 in 2003. Both years' costs reflect increased professional services costs associated with the Kinross merger and a modest increase in our management fees charged to Solitario to $390,000 in 2004 from $351,000 in 2003, which are classified as an offset to our general and administrative costs. Legal and accounting costs were $455,000 in 2004 versus $526,000 in 2003. Other general and administrative costs, including salaries and other personnel related costs, were comparable from 2003 to 2004.

          We recorded other income of $60,000 during 2004. This was primarily as a result of recording a gain of $70,000 on the sale of 1,000,000 shares of Royal Standard Minerals common stock for proceeds of $241,000. There were no similar transactions in 2003. As of December 31, 2004, we no longer hold any marketable equity securities and do not expect to record any gains or losses from similar transactions in the future.

          Variable option compensation expense decreased significantly to $518,000 in 2004 from $3,126,000 in 2003. This decrease is a result of the decrease in the intrinsic value of the options due to a decrease in the underlying market price of our stock from $2.52 at December 31, 2003 to between $1.85 on July 6, 2004 and $1.92 on July 12, 2004 when the vast majority of the options were exercised. This decrease was mitigated by the acceleration of vesting of the options from 60% at December 31, 2003 to 100% just prior to the exercise of the options during the third quarter of 2004. 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. All of our unexercised stock options were exercised during July 2004.

          Our equity in loss of Solitario was $475,000 in 2004, versus $571,000 in 2003. The $96,000 improvement resulted from the fact that we completed a spin-off of Solitario on July 26, 2004, as discussed above, and no longer had an equity interest in the company after that date. Prior to July 26, 2004, our loss in our equity-method investment reflected Solitario's increased general and administrative costs as a result of Solitario's filing a Form 10 registration statement during the first half of 2004 and increases in Solitario's exploration expenses through July 26, 2004 were $667,000 compared to $418,000 for the year ended December 31, 2003. Following the spin-off, the shares of Solitario held by Crown are recorded as an investment at fair value in our financial statements.

          We recorded income tax expense of $1,909,000 in 2004 versus an income tax benefit of $855,000 in 2003. The increase in income tax expense was primarily related to the spin-off of our holdings of Solitario being taxable at the fair market value of the shares distributed, rather than the recorded cost of our holdings. During 2004, we recorded $2,068,000 as a charge to income tax expense for the reversal of previously recorded deferred tax benefits related to the difference between Crown's book and tax basis in Solitario. The remaining change in tax expense and benefit from the same period in the prior year was related to the level of pre-tax loss in both periods. 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.

          For 2003, we had a net loss of $3,854,000, or $0.59 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 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 $855,000. 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 is discussed in more detail below.

          No amounts were reported as revenues and property sales in 2003, compared to a gain of $171,000 reported in 2002, related to the sale of our 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. 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.

          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 $2.52 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.

          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.

          We recorded an income tax benefit of $855,000 in 2003 versus an income tax provision of $4,867,000 in 2002, primarily related to the recognition of the gain on the discharge of our convertible debentures in 2002, resulting in net income, compared to our significant charge for variable option compensation expense, resulting in a net loss in 2003.

          (e.) Liquidity and Capital Resources

          Since the announcement of the planned Kinross merger we have essentially limited our activities to permitting the Buckhorn Mountain Project and general and administrative duties required to complete the planned merger. 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.

          During July and August 2004, we issued 17,585,326 shares from the (i) conversion of $3,600,000 of Senior Notes, (ii) the exercise of 3,287,500 of our options and (iii) the exercise of warrants exerciseable into 6,084,750 shares of our common stock as discussed above under Recent Financing Transactions. On July 26, 2004 we completed a spin-off of Solitario's shares to our shareholders as discussed above under Business Overview.

          In order to obtain the necessary permits for the Buckhorn Mountain Project, We submitted an Environmental Impact Statement (the Statement) to the Department of Ecology of the State of Washington (the "WDOE"). As of December 31, 2004, the WDOE was in the process of evaluating the Statement and is using third-party contractors to assist with this review. The costs of the review by the WDOE and any third-party contractors are billed to Crown by the WDOE on a periodic basis. We have accrued liabilities of $996,000 primarily for these costs at December 31, 2004, based on inquiries of the WDOE and third-party contractors regarding unbilled fees for services rendered through December 31, 2004.

          On December 30, 2004, we agreed to sell to Kinross and Kinross agreed to purchase from us 511,640 newly issued shares of our Common Stock at the fair market value of the stock of $1.9545 per share or $1,000,000 in the aggregate. The fair market value of the common stock was based upon the average of the closing market price of a share of Crown common stock for the twenty days prior to December 30, 2004, per the terms of the amendment. The closing of this sale occurred on January 18, 2005.

          Net cash used in operating activities decreased to $261,000 in 2004 from $813,000 in 2003. The decrease was primarily related to an increase in our accounts payable and other current liabilities of $759,000 as a result of delays by the WDOE in billing for permitting work at Buckhorn Mountain. If our pending Merger with Kinross is not completed we would expect our 2005 cash used in operating activities to increase significantly as we will have paid the majority of the WDOE and other accrued liabilities in 2005 and would not expect a similar balance in accrued liabilities at the end of 2005.

          Net cash used in investing activities increased to $2,039,000 in 2004 from $1,215,000 in 2003 as a result of our increased efforts at the Buckhorn Mountain Project. During 2004 we expended $2,095,000 on development of our Buckhorn Mountain Project compared to $1,168,000 during 2003. The large increase during 2004 was related to permitting and other costs necessary to advance the project in preparation for our pending Merger with Kinross. If our pending Merger with Kinross is not completed, we expect our 2005 net cash used in investing activities to be reduced compared to 2004 as we have budgeted approximately $1,100,000 for permitting and development at our Buckhorn Mountain Project in 2005.

          All interest costs, including non-cash interest costs, for the three years ended December 31, 2004 have been capitalized as part of our development of the Buckhorn Mountain Project. We capitalized interest costs of $3,884,000, $3,068,000 and $996,000 for the years ended December 31, 2004, 2003 and 2002, respectively. Interest costs increased significantly to $3,884,000 in 2004 from $3,068,000 in 2003, primarily as a result of interest cost of $3,105,000 capitalized upon conversion of our Senior Notes as well as additional interest of $397,000 from the issuance of common stock for interest upon the conversion of our Senior Notes. Interest cost on our debt obligations at the stated rate in 2004 was $194,000 compared to $1,075,000 in 2003. We recorded discount amortization charges (to capitalized interest) of $188,000 and $1,352,000 in 2004 and 2003, 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 $397,000 and $628,000 were recorded to interest costs in 2004 and 2003, respectively. We expect our interest costs that we capitalize to decline significantly in 2005 from 2004 as a result of conversion of our Senior, Secured, Subordinated and Subordinated B notes.

          Net cash provided from financing activities decreased to $2,016,000 in 2004 from $3,360,000 in 2003. The decrease is primarily related to the issuance of $2,705,000 Subordinated B Notes in February 2003. No debt instruments were issued during 2004. Cash provided by financing activities during 2004 is primarily related to the exercise of stock options and warrants, which were offset by a $50,000 cash payment on long-term debt. If our pending Merger with Kinross is not completed, we do not expect to have any significant cash provided from financing activities in 2005, other than the $1,000,000 in proceeds from the sale of shares to Kinross discussed above in Recent Developments, as all notes have been converted and options exercised. As of December 31, 2004, we had warrants outstanding which are exercisable for up to 8,243,335 shares with an exercise price of $0.75 per share and which expire in October 2006.

          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.

          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 2002.

          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.

          Net cash provided from financing activities increased to $3,360,000 in 2003 from $2,234,000 in 2002 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.

          (f.) Contractual obligations and planned expenditures

          We have budgeted $1,100,000 for permitting and development expenditures in 2005, 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. 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 significant 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, 2004 include the payment of: Long-term debt, unpatented mining claim payments, and operating leases, as follows: