Gramps,
From a November 20th, Sedar filing:
Schedule C: Management Discussion
This past year has been the most productive year in your Company's 17-year history. The multi-million dollar exploration and development program on the Company's Goddell Shear property was an unqualified success and your company has never had a stronger working capital position with over $1 million on deposit.
The focus of the exploration program was to assess the extent of gold mineralization within the Goddell Shear. This was accomplished by driving a 2600-foot decline into the mountain to access the zone and enable close proximity drilling. An aggressive diamond drill program from within the ramp, began in early 1997, confirmed the Goddell Shear as a significant gold bearing system. Diamond drilling expanded the known area of gold mineralization and after the completion of only 40 diamond drill holes, an independent engineer has reported over 830,000 tons of 7.04 grams (0.21 ounces) per ton gold as the drill indicated resource. Additional intercepts from other zones in the Goddell area bring the total drill indicated resource to over 900,000 tons of 7.13 grams (0.21 ounces) per ton gold. The project chief geologist has indicated that "further drilling within the defined block could add significant additional tonnage even before expanding along strike or to depth."
Over $4.7 million has been spent on exploration and development of the Goddell project. Arkona expects that Omni Resources Inc., as operator, will complete their option to acquire a 70% interest in the Goddell property by issuing the final $120,000 cash and 100,000 Omni Resource share payments by 1997-year end. Arkona will then retain a fully funded 30% interest. The significance of being fully funded is that Arkona is not obligated to fund further development of the project all the way to production and as a result will not be required to dilute the currently issued capital. The operator plans to develop the Goddell deposit along with their other deposits in the area, using a large pressure leach central processing facility. This would bring lower production costs, estimated at less than US $200 per ounce gold, from the improved economies of scale.
Arkona's interest in the Klondike City property was sold to the Federal Government in 1997 for $999,000, and will be preserved as a heritage site. The company realized a gain of $830,578 on the sale of the property. Consequently, your Company is in the strongest working capital position to date and is well provided to take advantage of new opportunities.
Arkona is looking forward to further work on the Goddell property in 1998 with additional exploration, drilling, and deposit definition, as feasibility work and plans for the centrally located facility advance. Your Company has advanced to the next step in our ultimate goal of putting the Goddell Property into production. On behalf of our Board of Directors, I would like to thank the many shareholders whom have been so supportive of us during the last year. We all look forward to an exciting and rewarding year ahead.
On Behalf of the Board of Directors,
Mark Aplas
President |
