Exploration activity:

DHK Diamonds Inc:  All claims on the WI and DHK Claim Blocks have been allowed to forfeit. The Company acquired a 25% working interest in nine claims within the WO Claim Block from Dentonia Resources Ltd. and will participate in further acquisitions on a similar basis.  Three areas covering the DO27 kimberlite cluster have been taken to lease.  Open ground to the north, south and east of the leases have been staked by an outside party.  Certain associates of the DHK properties have entered agreements with an outside party on three claims in the southern portion of the WO Claim Block.  On Aug. 19, 2002, DHK Diamonds Inc. reported a drill intersect of 127 feet of kimberlite on one of the four targets drilled.  BHP reported they have curtailed further work on the kimberlite sample pending execution of property agreements.  Should BHP conduct a bulk test and earn their interest, the DHK interest in the W0 Claim Block would be reduced to 20%.  The excluded areas containing known kimberlites would be 75% DHK when the agreement with Kennecott is concluded.  Kettle River is an equal 1/3 partner in DHK Diamonds Inc.  Once interests have been earned and interests established, Kettle River will contribute 1/3 of 20% costs (DHK portion) to pre-approved exploration programs. 
NAKET:  New Nadina Explorations Limited, the 50% JV partner, is currently planning fieldwork mainly consisting of sampling. 
Greenwood Area:  Fieldwork is currently being conducted on 100% owned properties within the Greenwood area for gold, copper and silver.  A 336 acre parcel, in close proximity to the Southern Provincial Highway will be offered for sale.  In the normal course of exploration a number of claims have been allowed to lapse as having no present potential.

Operation and financial condition:

At the end of the quarter, the Company had current assets of $59,373 with current liabilities of $75,668 resulting in a working capital deficiency of $16,295.  The loss for the period was $39,360 compared with $56,452 for the same period last year.  Included are $31,963 (2001 - $40,791) administrative expenses and $3,636 (2001 - $7,870) in property investigation costs.  There are no shares held in escrow and of the fifty million authorized common shares, there are 5,097,611 issued net of the 256,000 Company owned shares.

Financings, Principal Purposes And Milestones

-Financing of the company and its exploration projects is mainly dependant on equity financing and subject to market conditions.  The Company continues to explore for minerals and diamonds on land currently held as well as search for additional properties of merit.  Current exploration expenditures on the NAKET and DHK are funded through joint venture operations.

-In addition to equity financing, the Company plans to dispose of certain real estate to finance ongoing activities.

-During the period directors exercised 150,000 share options at 15 cents realizing $22,500.  The per share market price at the time of exercise was 13 cents.