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Gold/Mining/Energy : United Keno Hill, UKH, Toronto**** Opportunity Knocks! -- Ignore unavailable to you. Want to Upgrade?

To: Harry K who wrote (616)	11/5/1997 7:01:00 PM
From: Donald McRobb	Read Replies (1) \| Respond to of 1348

Subject: Stockwatch: United Keno Hill Mines Ltd - News Release Date: Wed, 05 Nov 1997 14:54:39 -0800 From: newsout@canada-stockwatch.com To: dmcrobb@kermode.net Possible merger United Keno Hill Mines Ltd UKH Shares issued 15,031,450 Oct 31 close $0.65 Wed 5 Nov 97 News Release See NDU Resources Ltd (NDU) News Release Mr James Stephen and Mr Stephen Powell report NDU and United Keno have entered into a letter agreement respecting the possible merger of their companies, a move that would permit the early recommencement of production of United Keno's mining properties at Elsa, Yukon and advance the development and exploitation of NDU's Marg deposit, to the east of United Keno's Elsa properties. The letter agreement contemplates that upon completion of the merger, each common share of NDU would be exchanged for 1.35 shares of United Keno. The proposed merger will be subject to, among other things, completion of due diligence, the negotiation of terms acceptable to the parties and the execution of a binding merger agreement, NDU having a minimum of $5,000,000 in its treasury at the time of the merger, less any amounts previously advanced to United Keno by way of loan, and receipt of all necessary shareholder, regulatory and other approvals. In order to assist United Keno in pursuing the merger discussions, NDU has agreed to advance to it up to $500,000 by way of a secured demand loan and, if a merger agreement is executed, a further $300,000 to cover certain operating and financing costs of United Keno, as well as costs of implementing the proposed merger. NDU and United Keno announced on July 23 1997 that Yukon Gold and Mineral Development Company had entered into letters of intent with them respecting the reactivation of United Keno's mines and mill at Elsa and the evaluation of the merits of a joint operation between United Keno and NDU involving a common milling facility and related infrastructure utilizing United Keno's present facilities at Elsa. NDU's polymetallic, volcanogenic massive sulphide Marg deposit currently hosts a drill-indicated reserve of over 5.5 million tonnes grading an average of 1.76% copper, 2.46% lead, 4.60% zinc, 62.7 g/t silver and 0.98 g/t gold. Excellent potential exists to expand those tonnages. The deposit remains open along strike and down-dip. A feasibility study of the Marg deposit is planned to confirm the economics of the deposit and proposed mining methods. As well, the study will evaluate the construction of a new mill and concentrator at Elsa to accommodate proposed production rates of 2500 to 3000 tonnes per day from the combined properties. Endeavor Financial, United Keno's financial adviser, is attempting to secure commitments for the development financing necessary to permit the recommencement of commercial production at the Elsa operation. Pre-production activities are expected to take approximately four months following receipt of the production financing. (c) Copyright 1997 Canjex Publishing Ltd. canada-stockwatch.com