Sale of Poco holdings to provide Corona with funds for Eskay Creek

Selling off its Canadian oil and gas interests will allow Corona (TSE) to place more emphasis on its gold-mining activities and help the company to reduce its debt. President Peter Steen, meeting in Toronto with journalists, said sale of the controlling stake in Poco Pe0000,0600 troleum will provide the large North American gold producer with funds to develop the Eskay Creek project in northwestern British Columbia.

Corona, with a total debt load of about $450 million, is swapping “debt for low- cost gold,” Steen said.

Corona and its NYSE-listed subsidiary Avalon Corp. recently announced the sale of their combined 49% holdings in Poco.

“Essentially we’re a gold-mining company. We’ve got some really good assets tied up in gold,” Steen said, pointing out that once the Poco interests have been sold, Corona will have 90% of its assets in gold. (The remaining 10% is related to base metal and industrial mineral holdings.)

Production at the Eskay Creek deposit, which is shaping up to be a world-class project, is not expected until 1994. Construction of an exploration decline began this past summer.

Co-owners (on a 50/50 basis) of the Eskay Creek property are Prime Resources Group (VSE) and Stikine Resources (VSE). Corona has a 43% interest in Prime and a 42% interest in Stikine. Prime has a 3% interest in Stikine. Owner of a 45% interest in Stikine is gold producer Placer Dome (TSE).

During the first half of 1990, Corona produced 367,012 oz. gold (and gold equivalent silver ounces) from interests in 11 operating mines at an average cost of US$203 per oz.

The majority of the company’s output is attributed to half-interests in the Williams and David Bell mines at the Hemlo camp in northern Ontario.

The company reports that 50% of its production during the last four months of 1990 is covered by forward sales contracts at an average price of about US$420 per oz.

Corona is in the midst of moving its head office to Vancouver from Toronto, in large part to be closer to the Eskay Creek project.

The company recently announced changes to its board of directors. Now sitting on the Corona board are Steen, Ned Goodman (chairman), Norman Anderson, Peter Cole, Myron Gottlieb, John Ivany, John McMillan, Lord Shaughnessy, Barry Sparks, William Trebilcock, John Williams, Paul Carroll and Timothy Hoare.