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Q3 - 2002

As at Sep 30  (in thousands of dollars)

Sep 30, 2002


Dec 31, 2001
Cash $        32 $      114
Accounts receivable 5 134
Prepaid expenses 23 20
Total current assets 60 268
Cash for Exploration Expenditures - 116
Exploration and development projects (note 2) 17,514 17,260
Other Assets 147 156
  $ 17,721 $17,800
Accounts payable and accrued liabilities 497 288
Mortgage Payable (note 4)     -  500 
497 788
Convertible notes (note 3) 200     -
697 788
Share capital 54,731 53,858
Special   Warrants       - 197
Contributed surplus 759 759
Deficit (38,466) (37,797)
Net shareholders' equity 17,024 17,012
$ 17,721 $17,800

  (unaudited in  thousands of dollars)

2002 2001 2002 2001

Three mo ended Sep 30

Nine mo Sep 30

Operating activities
Net loss for the period  $ (84)  $ (88)  $ (669) $ (677)
Item not affecting cash - depreciation 3 5 9 15
Write-down E&D projects - - 300 -
(81) (83) (360) (662)
Changes in non-cash working capital     2 (111)   39   64
Cash used by operating activities (79) (194) (321) (598)
Financing activities
Convertible notes/mortgage funds received - 500 200 500
Issue of common shares 181    - 181 100
Cash provided by financing activities 181 500 381 600
Investing activities
Cash for exploration expenditure - - 116 -
Additions to exploration and development projects (75) (385) (258) (1,379)
Equipment purchases -   - (2)
Cash used by investing activities (75) (385) (142) (1,381)
Net increase/(decrease)  in cash during period 27 (79) (82) (1,379)
Cash beginning of period     5 419 114 1,719
Cash end of period $ 32 $340 $ 32 $340

(unaudited in thousands of dollars, except per share amounts)

    2002 $ 2001 $ 2002 $ 2001$

Three mo ended Sep 30

Nine mo Sep 30

Interest income $ - $ 5 $ 3 $ 28
Costs and Expenses
General/administrative 81 88 363 690
Depreciation 3 5 9 15
Write-down of E&D projects - - 300 -
  84 93 672 705
Net loss for period 84 88 669 677
Deficit, beginning of period 38,382 34,297 37,797 33,708
Deficit, end of period $ 38,466 $ 34,385  $ 38,466 $ 34,385
Loss - basic and fully diluted $ 0.001 $0.002 $0.012 $ 0.013
Average outstanding common shares 57,205,731 51,940,906 55,246,322 51,743,516



September 30, 2002


1(a) General

The consolidated interim financial statements of the Company are prepared by management using accounting principles generally accepted in Canada for interim financial statements and reflect the accounting principles set out in the notes to the Company's consolidated financial statements as of December 31, 2001, appearing in the Company's 2001 Annual Report. These interim financial statements should be read in conjunction with those annual financial statements and the notes thereto.

The results of operations and cash flows for the current periods are not necessarily indicative of the results to be expected for the full year.

1(b) Going Concern

These consolidated financial statements have been prepared using accounting principles applicable to a going concern entity, which assume that the entity will continue operating in the future and be able to realize its assets and discharge its liabilities in the normal course of its business.   The Company's exploration and development projects are in their early stages and, consequently, the Company, having no operating revenues to sustain its activities, has been wholly dependent on equity financings and the optioning of resource properties for its funds.

Several adverse conditions cast substantial doubt on the validity of the Company's application of the going concern principle.  The conditions include ongoing losses and property write-downs, working capital deficiencies and insufficient cash reserves to meet the Company's minimum commitments.  Therefore, the Company's ability to continue its operations, its planned development activities, and maintain its interest in its projects, is dependent upon the satisfactory completion of a financing or optioning or sale of property interests to provide the required funds.  Should the Company not be able to obtain the necessary financing and should the Company not be able to continue as a going concern, then adjustments would be required with respect to the carrying value of the Company's assets and liabilities, reported net loss, and the balance sheet classification used.


2.  Exploration and Development Projects

Project Sep 30, 2002 Dec 31, 2001

(in thousands)

Rainy River     $  11,684     $  11,429
Lac Rocher           4,607           4,066
Mel Properties           1,453           1,265
Strong/ Moak Lakes              -             300
Prairie Lake & Other             310             200
     $  17,514     $  17,260


3.  Convertible Notes

During the period $200,000 of convertible notes were issued which are secured by a pledge of the Minago Property leases.  The notes bear interest at 9% per year, payable annually and mature July 9, 2007.  The notes may be converted into common shares of the Company based on $0.19 per share.

4.       Share Capital

(a)  During the period, 4,783,334 common shares were issued as follows:

    i)   1,333,334 upon exchange of Special Warrants

    ii)  2,500,000 upon conversion of $500,000 mortgage

    iii)  600,000 upon exercise of stock options for proceeds of $111,000

    iv)  350,000 upon exercise of warrants for proceeds of $70,000

(b)  During the period, 1,400,000 stock options were granted under the stock option plan, at prices between $0.185 and $0.20, 325,000 options expired and 600,000 were exercised, resulting in outstanding options totalling 3,345,400.

(c)  Subsequent to the end of the period, a further 156,500 warrants were exercised for proceeds of $31,300.  At November 5, 2002, the issued and outstanding common shares of the Company totalled 57,954,490 and on a fully diluted basis there would be 63,925,606 common shares outstanding.

Nine months Ended September 30, 2002

This MD&A reflects the period ended September 30, 2002 and should be read in conjunction with the MD&A included in the 2001 Annual Report.


During the three months and the nine months ended September 30, 2002, the Company incurred losses of $84,000 and $669,000, respectively, compared to losses of $88,000 and $677,000 in the corresponding periods of 2001.  Interest income on excess cash balances continued to decline.  General and administrative expense have been lower due to reduced activity and cut backs.

Expenditures on exploration projects for the three months and the nine months ended September 30, 2002 were $75,000 and $258,000, respectively, compared to expenditures of $385,000 and $1,379,000 in the corresponding periods of 2001.  The significant reduction in project expenditures in 2002 is principally due to the Company's limited cash resources and adverse equity market conditions.  In view of these conditions, the Company is currently evaluating its financing alternatives and reviewing the priorities of the various projects.  Under the Mel Property Agreement terms, the Company is required to fund exploration of $808,000 prior to August 2003.



Having no producing properties, the Company has financed its activities through sales of its equity securities and debt.  In the first nine months of 2002, operating activities used $321,000 and $142,000 was spent on exploration projects offset by financings received of $200,000 in convertible notes and the exercise of warrants and options for $181,000 resulting in cash balances of $32,000 at Sept. 30, 2002. The $500,000 mortgage loan repayable in November 2002, was repaid by the issuance of 2,500,000 common shares of the Company.  Subsequent to the end of the period, a further 156,500 warrants were exercised resulting in proceeds of $31,300.



Following is a brief commentary on the status of active exploration and development projects and prospects of new discoveries over the near term: 

Since August 1999, Nuinsco has spent over $1.5 million for nickel exploration work on the Mel project at Thompson, Manitoba and, working with Inco, has advanced the project to the drill-ready stage.  Seven high priority drill targets will be further defined with state-of-the-art geophysics prior to diamond drilling by Nuinsco.  At the same time, a small fieldwork program on the Prairie Lake carbonatite complex near Marathon, Ontario has yielded high grade tantalum values in pyrochlore, suggesting that future follow-up exploration may produce mineable tantalum and niobium.

The Company's Rainy River property with drill-ready base and precious metal targets is still on hold awaiting only funds to drill test excellent MT geophysical anomalies.  Also, the Cameron Lake gold property, with its proven gold resource is being maintained in inventory awaiting a rise in the price of gold.

Your Company goes to great effort and expense to maintain and constantly update its website.  Shareholders are urged to keep themselves informed of ongoing news of our affairs by periodically checking the website.  Since early September, four press releases posted on our website have been disseminated broadly through CNNMathews, a major newswire service.  These releases provide full and true disclosure of our activities.  Exploration will be starting shortly on the winter work program with Inco at the Mel project in Thompson, Manitoba.  Shareholders should pay careful attention to the four releases mentioned and watch out for future  releases.

Nuinsco has initiated discussions with potential flow-through share investors to arrange financing for its projects.

November 2
6, 2002