Crown Resources
OTC Bulletin Board : CRCE

July 08, 2005 17:43 ET

Crown Resources Corporation - Kinross Gold Corporation Transaction Likely Will Qualify as a Tax-Free Exchange

DENVER, Colo.--(CCNMatthews - Jul 8, 2005) -

Crown Resources Corporation (OTCBB:CRCE) ("Crown") announced that after further review of the Crown - Kinross Gold Corporation (TSX:K) (NYSE:KGC) ("Kinross") transaction as contemplated under the definitive acquisition agreement (the "Agreement"), Crown now believes the transaction likely will qualify as a tax-free exchange.

Kinross and Crown recently amended the Agreement to extend the termination date and to make certain other changes that have previously been announced. Also, as previously announced, Kinross has purchased convertible debt of Crown, and Crown has declared a dividend using some of the proceeds from the sale of the convertible debt. The payment of the dividend changes the tax analysis of the acquisition contemplated by the Agreement. For this reason, Crown undertook further analysis that has led it to conclude that the acquisition likely will continue to qualify as a tax-free reorganization, although certain facts, that Crown does not now regard as probable, could change that analysis prior to the closing of the acquisition. Crown and Kinross will continue to monitor the situation and will include a description of the probable tax consequences of the acquisition in the definitive Proxy Statement/Prospectus that they will jointly distribute as provided in the Agreement, which should be carefully reviewed by all Crown shareholders.

Crown previously announced that its board of directors declared a special dividend of $0.21 per share of Crown common stock (see the news release dated June 21, 2005). The dividend will be paid on July 26, 2005 to Crown shareholders of record as of the close of business on July 14, 2005.

To ensure compliance with Internal Revenue Service Circular 230, investors are hereby notified that: (A) any discussion of federal tax issues in this press release is not intended or written to be relied upon, and cannot be relied upon by any investor or any other person, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code; (B) such discussion was written to support the promotion or marketing (within the meaning of IRS Circular 230) of the transactions or matters addressed herein; and (C) each investor should seek advice based on the investor's particular circumstances from an independent tax advisor. This notice is given solely for purposes of ensuring compliance with IRS Circular 230. This notice is not intended to imply that any particular person in fact supported the promotion or marketing of any transaction or matter, and it does not itself constitute evidence that any particular person did so.

Where to Find Additional Information about the Transaction:

This press release is not, and is not intended to be, a solicitation of proxies or an offer of securities. Investors and security holders of Kinross and Crown are urged to read the definitive Proxy Statement/Prospectus and other relevant materials, when they become available, as they will contain a description of the anticipated tax consequences of the proposed transaction and other important information about Kinross, Crown and the proposed acquisition. When available, the definitive Proxy Statement/Prospectus will be mailed to Crown shareholders and it, together with other relevant materials and documents filed by Kinross or Crown with the SEC, will be available free of charge at the SEC's website at, or directly from Kinross.

This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding the potential tax treatment of the proposed transaction, are forward-looking statements that involve various risks and uncertainties. The tax treatment of the proposed transaction is subject to the facts and circumstances that may exist at the time of closing, which cannot currently be predicted and many of which are beyond the control of Crown and Kinross. There can be no assurance that the foregoing statements regarding the potential tax treatment of the proposed transaction will prove to be accurate and actual results and future events could differ materially from those anticipated. Crown shareholders should not rely on this press release as a definitive description of the tax consequences of the proposed transaction and should carefully review the definitive Proxy Statement/Prospectus when it is available.

Contact Information

  • Crown Resources Corporation
    Christopher E. Herald, 303-534-1030
    Debbie W. Mino, 800-229-5827