Owner
Post by Franko10 ™ on Oct 14, 2004 11:19:34 GMT -5
TO THE SHAREHOLDERS
December 16, 1998
Six Month Report to the Shareholders
EXPLORATION ACTIVITIES:
DHK DIAMONDS - NORTHWEST TERRITORIES
Kettle River currently owns 11.67% carried interest in this project managed and operated by Kennecott Canada Exploration Inc. The three claim blocks containing 208,000 acres, have proven diamond bearing kimberlite pipes and are located in the Lac de Gras diamond production area of the Canadian Northwest Territories.
DHK BLOCK: Upcoming exploration will take place south of Lac de Gras in the vicinity of three kimberlite pipes originally discovered during the 1993 drilling. Micro-macro diamond count from core drilling of DD17 and DD42 was encouraging while, DD39 contained a modest diamond count.
The airborne geophysical survey completed last spring located five new targets on the DHK claim block. Kennecott expects that three of these geophysical anomalies will be tested early in 1999. One is an offset Mag anomaly about 200 meters from the DD42 pipe. Two EM anomalies occur west of the DD17 pipe. Definition ground Mag and EM surveys will confirm these anomalies prior to diamond drilling.
WO CLAIM BLOCK: It is anticipated that a sonic overburden drill, proven successful to trace indicator mineral dispersion trains to their kimberlite source, will be utilized on both the DHK and WO blocks. The innovative use of a light combination diamond/sonic drill will enable this winter's program to quickly evaluate targets and allow additional drilling during spring if required.
DHK Resources Ltd. (1/3 each Dentonia Resources Ltd., Horseshoe Gold Mining Inc., and Kettle River Resources Ltd.) and their partners (Kennecott Canada Exploration Inc., Aber Diamond Mines Ltd., and SouthernEra Resources Ltd.) have entered into a 'farm out' agreement with Archon Minerals Limited covering 35 of the 54 claims on the WO block. Certain claims containing kimberlite pipes, areas of indicator mineral trains and known potential have been excluded. Kennecott will continue as operator on excluded areas. Archon will earn a 25% carried and working interest in each kimberlite pipe they identify. The DHK interest in these pipes will be reduced from 35% to 26.25% leaving Kettle River with slightly less than 9% carried interest. The agreement is for one year and under the terms of a common area agreement, Archon may be required to assign 5% of any interest it earns to Dia Met Minerals Ltd.
Archon is a newly listed company formed by Dr. Stuart Blusson, co-discoverer of the Lac de Gras Ekati/Diamet/BHP diamond mines and operator of the Buffer Zone project.
COPPERMINE - NWT: Diamond and platinum exploration was active on nearby claims. Proposed programs were not implemented on these claims, lower copper prices could not stimulate any interest. Certain claims will be returned to the prospector.
SASKATCHEWAN DIAMONDS: The opening of the Choiceland Iron formation precipitated a staking rush and has triggered renewed interest to the area. The adjoining Garrick claims of the 50/50 Kettle River/New Nadina joint venture are still hopeful for diamond potential.
BRITISH COLUMBIA: The Phoenix and Summit camps are being examined for structurally controlled gold deposits. Known mineralized gold zones controlled by thrust faulting will be evaluated for structurally prepared larger zones. The construction of new logging roads on the Tam O' Shanter prospect near Greenwood has exposed areas of intense silicification in major fault zones as well as uncovering gold bearing float. Follow up is planned for the spring. A review of information from the Phoenix tailings is being undertaken for acceptable garnet use. These tailings contain 27% garnet as well as low gold values.
Silver Queen property - 100% New Nadina Explorations Limited: A detailed structural study was completed in 1998 and exploration targets in areas of high grade silver gold mineralization have been defined. The study correlated information from underground and surface workings, maps and logs, outcrops and drill core. The Silver Queen property is prepared for a major exploration program to increase ore reserves of silver, gold, zinc and prove bulk mineable stratigraphic/structural controlled mineralization. New Nadina is seeking expressions of interest on the project.
FINANCIAL SUMMARY:
For the six months ended October 31, 1998 the Company sustained a loss of $145,585 ($0.03 per share) compared with a loss of $150,529 ($0.03 per share) for the comparable period last year. During the current period, the Company recorded a $20,047 write-down of marketable securities to current quoted market value, compared to $21,929 in 1997. The Company reduced administration expenses from $125,011 to $100,157. Interest and other sundry income this period decreased by $5,134 from last year. Expenses include a $27,248 mineral property write-off for property interests allowed to lapse compared with $15,521 during last year's period. Property investigation expenses were $16,446 this period; last year's comparable period $11,119.
The Company expended $68,715 on mineral property acquisition and exploration costs on various properties in British Columbia and the Northwest Territories compared to $122,192 in 1997.
Working capital at October 31, 1998 was $1,120,043 compared with $1,531,581 at October 31, 1997. The change in working capital is attributed to increase in mineral property, other capital assets of $27,643, assets, financing of losses from operations, and an equity increase of $46,695 in the Company's investment in New Nadina Explorations Limited. Share ownership is now 15.82% which combined with other factors has resulted in the ability of the Company to exercise significant influence on New Nadina. Consequently the investment has been accounted for and restated on the equity basis. The Company's equity in New Nadina Explorations Limited loss for the current period was $11,227 compared to $11,623 during the same period last year.
SUMMARY
Kettle River is adequately financed for present commitments. The DHK diamond project continues to hold high expectations for benefit to the Company. The property is favorably located in a diamond producing area and our carried to feasibility agreement ensures shareholder equity will not severely diluted due as a result of high exploration costs.
Kettle River Resources Ltd.
On behalf of the board,
George Stewart
George O.M. Stewart, President
BALANCE SHEETS
As at October 31, 1998 and 1997
December 16, 1998
Six Month Report to the Shareholders
EXPLORATION ACTIVITIES:
DHK DIAMONDS - NORTHWEST TERRITORIES
Kettle River currently owns 11.67% carried interest in this project managed and operated by Kennecott Canada Exploration Inc. The three claim blocks containing 208,000 acres, have proven diamond bearing kimberlite pipes and are located in the Lac de Gras diamond production area of the Canadian Northwest Territories.
DHK BLOCK: Upcoming exploration will take place south of Lac de Gras in the vicinity of three kimberlite pipes originally discovered during the 1993 drilling. Micro-macro diamond count from core drilling of DD17 and DD42 was encouraging while, DD39 contained a modest diamond count.
The airborne geophysical survey completed last spring located five new targets on the DHK claim block. Kennecott expects that three of these geophysical anomalies will be tested early in 1999. One is an offset Mag anomaly about 200 meters from the DD42 pipe. Two EM anomalies occur west of the DD17 pipe. Definition ground Mag and EM surveys will confirm these anomalies prior to diamond drilling.
WO CLAIM BLOCK: It is anticipated that a sonic overburden drill, proven successful to trace indicator mineral dispersion trains to their kimberlite source, will be utilized on both the DHK and WO blocks. The innovative use of a light combination diamond/sonic drill will enable this winter's program to quickly evaluate targets and allow additional drilling during spring if required.
DHK Resources Ltd. (1/3 each Dentonia Resources Ltd., Horseshoe Gold Mining Inc., and Kettle River Resources Ltd.) and their partners (Kennecott Canada Exploration Inc., Aber Diamond Mines Ltd., and SouthernEra Resources Ltd.) have entered into a 'farm out' agreement with Archon Minerals Limited covering 35 of the 54 claims on the WO block. Certain claims containing kimberlite pipes, areas of indicator mineral trains and known potential have been excluded. Kennecott will continue as operator on excluded areas. Archon will earn a 25% carried and working interest in each kimberlite pipe they identify. The DHK interest in these pipes will be reduced from 35% to 26.25% leaving Kettle River with slightly less than 9% carried interest. The agreement is for one year and under the terms of a common area agreement, Archon may be required to assign 5% of any interest it earns to Dia Met Minerals Ltd.
Archon is a newly listed company formed by Dr. Stuart Blusson, co-discoverer of the Lac de Gras Ekati/Diamet/BHP diamond mines and operator of the Buffer Zone project.
COPPERMINE - NWT: Diamond and platinum exploration was active on nearby claims. Proposed programs were not implemented on these claims, lower copper prices could not stimulate any interest. Certain claims will be returned to the prospector.
SASKATCHEWAN DIAMONDS: The opening of the Choiceland Iron formation precipitated a staking rush and has triggered renewed interest to the area. The adjoining Garrick claims of the 50/50 Kettle River/New Nadina joint venture are still hopeful for diamond potential.
BRITISH COLUMBIA: The Phoenix and Summit camps are being examined for structurally controlled gold deposits. Known mineralized gold zones controlled by thrust faulting will be evaluated for structurally prepared larger zones. The construction of new logging roads on the Tam O' Shanter prospect near Greenwood has exposed areas of intense silicification in major fault zones as well as uncovering gold bearing float. Follow up is planned for the spring. A review of information from the Phoenix tailings is being undertaken for acceptable garnet use. These tailings contain 27% garnet as well as low gold values.
Silver Queen property - 100% New Nadina Explorations Limited: A detailed structural study was completed in 1998 and exploration targets in areas of high grade silver gold mineralization have been defined. The study correlated information from underground and surface workings, maps and logs, outcrops and drill core. The Silver Queen property is prepared for a major exploration program to increase ore reserves of silver, gold, zinc and prove bulk mineable stratigraphic/structural controlled mineralization. New Nadina is seeking expressions of interest on the project.
FINANCIAL SUMMARY:
For the six months ended October 31, 1998 the Company sustained a loss of $145,585 ($0.03 per share) compared with a loss of $150,529 ($0.03 per share) for the comparable period last year. During the current period, the Company recorded a $20,047 write-down of marketable securities to current quoted market value, compared to $21,929 in 1997. The Company reduced administration expenses from $125,011 to $100,157. Interest and other sundry income this period decreased by $5,134 from last year. Expenses include a $27,248 mineral property write-off for property interests allowed to lapse compared with $15,521 during last year's period. Property investigation expenses were $16,446 this period; last year's comparable period $11,119.
The Company expended $68,715 on mineral property acquisition and exploration costs on various properties in British Columbia and the Northwest Territories compared to $122,192 in 1997.
Working capital at October 31, 1998 was $1,120,043 compared with $1,531,581 at October 31, 1997. The change in working capital is attributed to increase in mineral property, other capital assets of $27,643, assets, financing of losses from operations, and an equity increase of $46,695 in the Company's investment in New Nadina Explorations Limited. Share ownership is now 15.82% which combined with other factors has resulted in the ability of the Company to exercise significant influence on New Nadina. Consequently the investment has been accounted for and restated on the equity basis. The Company's equity in New Nadina Explorations Limited loss for the current period was $11,227 compared to $11,623 during the same period last year.
SUMMARY
Kettle River is adequately financed for present commitments. The DHK diamond project continues to hold high expectations for benefit to the Company. The property is favorably located in a diamond producing area and our carried to feasibility agreement ensures shareholder equity will not severely diluted due as a result of high exploration costs.
Kettle River Resources Ltd.
On behalf of the board,
George Stewart
George O.M. Stewart, President
BALANCE SHEETS
As at October 31, 1998 and 1997
