The owners of North Lily Mining Co. are trading in their drills for modems and mouse pads - and FICO scores.

The 84-year-old Denver company, whose metals mining operations have been foundering for 15 years, last week announced plans to get out of the business and acquire Denver-based, an on-line subprime mortgage lender. The price: 5.65 million North Lily shares, about $2.8 million worth.

Stephen E. Flechner, 57, and W. Gene Webb, 61, longtime mining-company investors and managers, took over North Lily in 1994, following a string of recent managers.

The company once found profits in gold, silver, copper, lead, and zinc. But after six years of failed exploration and development projects, including oil and natural gas speculation, the two men say they had concluded that the natural resource industry was not "economically viable."

They liquidated the company's assets (keeping 8,000 acres in Utah, which they plans to sell) and its obligations. And three months ago they homed in on, whose founders they had met earlier through Denver business circles.

"We're trying to get our company and our shareholders into the 21st century," Mr. Flechner said.

Whether the loan venture is any more viable than mining remains to be seen, but the move has already given a dramatic boost to North Lily's stock.

Its shares - held by about 10,000 investors - had been wallowing near historic lows for years. A month ago they were trading at between 11 cents and 15 cents.

But two weeks ago, apparently because word of the deal was getting around, the stock briefly traded as high as 85 cents. And on Thursday, when the deal was announced, it jumped from 20 cents to 55 cents., which showed $1.4 million in revenues in 1999, will continue to focus on subprime borrowers, though the partners stressed that the Web site is "still in development."

They said they plan adopt a typical mortgage banking strategy, setting up warehouse lines, and making loans which they will securitize to fund more loans. But Mr. Flechner said will focus more on achieving profit margins than volume.

Nick Karris, a mortgage analyst for Gomez Advisors, said North Lily faces a challenge in its new business, but not an insurmountable one. Almost 150 mortgage lenders have entered the Internet space in the last year, despite rising rates, a tighter market, and declining volume, he pointed out.

Still, with less than 1% of mortgages now being originated on-line, Mr. Karris said there is room for many players. Further, he said focusing on a niche is good business.

" 'Be everything to everybody through the Internet' is not a lasting strategy," he said. "On-line lenders have a much better chance if they specialize."

Both Mr. Webb and Mr. Flechner, who live in Englewood, Colo., an upscale suburb of Denver, are "turning full circle" to the high-tech world after careers based in low-tech.

Mr. Flechner said the partners had not considered the Internet until recently. "Now we're trying to run like hell to catch up," he said. "And we're learning to get along well with 28-year-olds."

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