The Company is an active junior mineral resource exploration company focused on the acquisition, exploration and development of precious metals, base metals and diamond projects.  Properties which the Company currently owns or which it is currently evaluating for acquisition are located in the traditional mining areas of Ontario, Canada. 

The recoverability of the amounts comprising mineral properties and deferred exploration costs is dependent upon the confirmation of economically recoverable reserves, the ability of the Company to obtain the necessary financing to successfully complete its exploration and development and upon future profitable production and royalties. 

Risks: 

The success of the Company’s business is subject to a number of factors including but not limited to those risks normally encountered in the mining industry such as exploration uncertainty, lack of operating cash flow, increasing environmental regulation, continued industry and public acceptance, regulatory compliance, potential liability claims, general markets and economic conditions, competition with Companies having greater resources, and further capital requirements and the uncertainty of obtaining required financing.

REVIEW OF OPERATIONS - MINERAL PROPERTIES  

DIAMOND EXPLORATION PROJECTS – NORTHEASTERN ONTARIO 

Temagami Diamond Claim Project, Ontario, Canada 

The Company is actively exploring more than 70,000 hectares of contiguous claims in the emerging northeastern Ontario diamond play.   The Temagami Diamond Claim project  is underlain by the same Superior Craton, and equivalent basement rocks as the Victor Pipe, where De Beers’ is carrying out feasibility studies to the north, near Attawapiskat, Ontario. 

Kimberlite indicator mineral (KIM) counts from Tres-Or’s 2001 work programs combined with previous Tres-Or check sampling has confirmed at least four (4) KIM dispersion trains occur in different parts of the project.  Recent programs have recovered high-interest kimberlite garnets, diamond inclusion chromites, kimberlitic ilmenite with chemistries indicating favourable conditions for diamond preservation, abundant kimberlitic olivine and a few chrome diopsides. 

The overall mineral chemistry of the kimberlite indicators recovered suggests the presence of diamondiferous source rocks.   The very sub-calcic G10 pyrope garnets from the project are comparable to the best indicator minerals from producing diamondiferous kimberlites worldwide, including the Ekati Mine in the Northwest Territories.  The ilmenite compositions are typical of kimberlitic ilmenite, with elevated Cr2O3 and MgO contents.  Their composition indicates favourable conditions for diamond preservation.  The diamond inclusion composition of chromite grains recovered from Tres-Or’s samples support that of the G10 garnet compositions indicating that the source kimberlite has potentially sampled diamondiferous mantle.  Olivine is abundant and is consistent with derivation from kimberlite.  A few kimberlitic chrome diopsides were also recovered. 

In summary, the kimberlite indicator mineral assemblage and mineral compositions compiled suggest good potential for the discovery of diamondiferous kimberlite bodies within Tres-Or’s 100%-owned Temagami Diamond Claim project. 

On March 5, 2002, Tres-Or entered into a Purchase Agreement to acquire a 100% interest in 1,626 claim units in the Temagami area for a cash payment of $150,000 and the issuance of 300,000 common shares of the capital stock of Tres-Or .  The claims a re subject to a 2.5% NSR.  Tres-Or has an option to purchase 1% of the NSR for $1.0 million and has a first right to purchase the remaining 1.5% NSR.  In addition, subject to further Exchange approval, Tres-Or agreed to deliver a further 100,000 shares of the common stock of Tres-Or one day prior to commercial production of any mineral discoveries on the claims. 

Concurrently, Tres-Or entered into a Letter Agreement with Rhonda Corporation (“Rhonda”), whereby  Rhonda could earn up to 50% interest in the 1,626 Temagami diamond claim units (Temagami Option).  On signing of the agreement, Rhonda paid $65,000 and on Exchange approval, issued 200,000 common shares of Rhonda to Tres-Or.  Rhonda will incur a total of $4.5 million in exploration expenditures staged over 3.5 years and make semi-annual property payments totaling $225,000.  Tres-Or   is the Operator and will charge a 15% management fee on exploration expenditures. 

In addition, Rhonda purchased by way of a private placement 300,000 shares of Tres-Or at $0.35 and a one year full warrant to purchase a further 300,000 common shares of Tres-Or exercisable at $0.50 per share.

The Rhonda/Tres-Or Temagami Option consists of over 26,000 hectares of claims in the Temagami-Marten River area.  Rhonda’s Vice President of Exploration, Judy Stoeterau said, “we are pleased to acquire a diamond project with good indicator mineral chemistry and excellent supportive infrastructure in the Southern Superior Craton, where exploration can be carried out year-round generating results quickly to advance projects through to discovery”. 

Preliminary review of the magnetic data obtained from the airborne survey has revealed discrete magnetic targets and detected responses of potential kimberlite pipes and structural features that may influence kimberlite emplacement.  In early June, Tres-Or commenced the Phase I field exploration program on priority targets.  Ground field work consists of detailed geochemical surveys, till sampling, mapping, prospecting and detailed follow-up ground geophysical surveys to fast-track priority kimberlite targets for drill testing.  

The Company is actively pursuing financing and discussing joint venture participation in the Temagami Diamond Claim project with a number of interested parties.  In addition, the Company is continuing with due diligence to pursue additional diamond property opportunities.

Temagami North Diamond Claim Project, Ontario, Canada 

Exploration work is underway on Tres-Or’s Temagami North diamond properties which consist of 134 claim units, covering  more than thirty (30) discrete circular magnetic targets within the New Liskeard/Cobalt kimberlite field, where more than a dozen kimberlites are already known, half of which are diamondiferous.  Tres-Or’s initial work on a portion of these claims confirmed indicator mineral compositions distinct from the known kimberlites, including eclogitic garnets comparable to the diamond-bearing eclogites from the Jericho kimberlite in northern Canada.   

In February and March 2002, the Company completed detailed ground magnetic surveys over several of the prospective claims and has outlined a number of high priority kimberlitic targets for ground truthing.  Phase I exploration will consist of additional ground geophysical surveys, till and stream sediment sampling, kimberlite indicator mineral analyses, back hoe testing and/or drilling. 

In April 2002, Tres-Or entered into a Letter of Intent with Rock Resources Inc. (“Rock”) whereby Rock could earn a two thirds interest in 104 claim units (Temagami North Option) for cash payments totaling $30,000, issuing 100,000 common shares of the capital of Rock and expending $300,000 in exploration to November 2003. Tres-Or will be the Operator and will charge a 10% management fee on exploration expenditures. 

Earlier in the year, Tres-Or collected two stream sediment samples from it’s 100%-owned Temagami North – 30 claim group which contained  prolific kimberlite indicator minerals suggesting that the source kimberlite is proximal. Extrapolating results from the counted indicators to the entire sample where more than 11,000 KIMs were recovered, suggest a potential diamondiferous source.   The samples were taken in a small stream that is within the till layer, and is located approximately 200 metres down-ice of a circular magnetic high.  Included among the prolific indicator minerals are eclogitic garnets and chromites that suggest the source kimberlite may have tapped the diamond stability field, and Mg-limenites that indicate the magma is favourable for preserving diamonds.

Surface textures suggest a proximal origin of the grains.  More than 80% of the Cr-pyropes have at least a trace of kelyphite preserved on their surface, and chrome diopside, Mg-ilmenite, and olivine surfaces are all rated fresh to very fresh.  Two hundred and eighty-one indicator grains from the sample were analyzed by electron microprobe to establish the chemical signature of the source kimberlite. 

Orange garnets (eclogitic garnets) are abundant in the sample and are all Mg-rich, and are good indicators of kimberlite.  Included among the orange garnet kimberlite indicators are some grains derived from mantle eclogites, and other grains from the Cr-poor megacryst suite that may form from the proto-kimberlite magma within the mantle.  Several of the 30 kimberlitic orange garnets analyzed have chemistries similar to eclogite garnets included in diamond.  Several other eclogitic garnets are closely comparable to diamond-bearing eclogites from the Jericho kimberlite in northern Canada (Cookenboo, 1998), and point to the potential source kimberlite of the Tres-Or sample to carry diamonds.

A single sub-calcic (G10) Cr-pyrope was recovered.  Of the 87 Cr-pyropes analyzed, the chemistries appear to be consistent with derivation from mantle temperatures likely within the diamond stability field. 

Mg-ilmenite is abundant in the sample and of the 64 analyzed by electron microprobe, all of the ilmenite grains are good kimberlite indicators. The predominance of Cr-rich compositions at high MgO concentrations is comparable to most diamondiferous kimberlites.  The Fe3+/Fe2+ ratio is a low 0.25, comparable to (or better than) many economic pipes in Canada and elsewhere.  This low ratio indicates that the kimberlite magma was not highly oxidized, and would likely transport diamonds from the mantle to the surface without major resorption.  Diamond preservation within the kimberlite source would be good. 

Forty-five chromite grains were analyzed out of 63 recovered.  Included in the microprobe analyses are two very Cr-rich grains comparable to chromite chemistries from the diamond intergrowth field.  

Thirteen kimberlitic olivine grains were recovered.  All have surface textures consistent with proximal derivation from kimberlite.  Each grain was analyzed by electron microprobe, and confirmed to be kimberlitic (forsterite) olivine. 

The Company is continuing with due diligence and is actively pursuing additional diamond project opportunities in the area.

PGM PROJECT, ONTARIO

Mann Platinum/Palladium Project, Ontario, Canada 

A six hole, 998 metre diamond drill program was completed on the 19 claim unit, Mann property which covers part of a large mafic/ultramafic complex located approximately 47 kilometres northeast of Timmins, Ontario. The property is situated within the Mann complex, a mafic/ultramafic layered intrusion which hosts Platinum Group Elements (PGE) and copper-nickel sulphide mineralization.  Broadlands Resources Ltd. is negotiating an amendment to continue to earn up to 50% interest in the property as per an Agreement approved by the Exchange on February 8, 2001.   

Exploration work completed by Tres-Or included geological studies and the re-logging and sampling of approximately 1,155 metres of historic drill core.  One hundred-four (104) samples were taken. Thirty-one (31) samples were taken in clinopyroxenite of which twenty-four (24) are anomalous in PGE’s, up to 942 ppb PGE’s plus gold. Geophysical surveys included 21 kilometres of Total Field Magnetics and 7.5 kilometres of Induced Polarization (IP) surveys.  

The target of the most recent drill program was a clinopyroxenite horizon in the layered Mann ultramafic complex which hosts highly anomalous platinum and palladium values. On the Tres-Or claims, three continuous chip samples taken by the Ontario Geological Survey returned values of PGE + Au of 645 ppb over 12.20 metres, 574 ppb over 14.00 metres and 594 ppb over 22.00 metres.  This unit was intersected in three of six holes drilled.  It ranges from 13 to 15 meter in true thickness and dipping moderately to the east.  No anomalous PGE’s were returned from this unit, but anomalous PGE values to 79 ppb were encountered in a coarse, chaotic gabbro stratigraphically above the clinopyroxenite horizon.  Further exploration work including detailed structural mapping, sampling and additional diamond drilling testing is recommended.

Shallow River Base Metal Project, Ontario, Canada

Option Agreements to earn 100% interest in the Shallow River East and Northeast mineral claims consisting of 52 units totaling 832 hectares have been completed.  The title to the claims were transferred to Tres-Or on July 27, 2001.  Treasury shares will be issued as the final property payment subject to filing with the Exchange an acceptable geological report on the exploration work completed.

A 300 metre diamond drilling program was completed on the Botany claims to test a 1.6 kilometre long geobotanical anomaly identified in previous work.  Drilling intersected massive to intermediate volcanics and gabbro and no significant base metal mineralization was identified.  Further site investigations, prospecting and additional geochemical surveys are recommended

The Botany Option Agreement is complete subject to the issuance of 100,000 shares of the Company on approval of the Exchange of an acceptable geological report on the exploration work completed.  Title to the 26 claim units covering 416 hectares in Warden Township were transferred to Tres-Or on October 5, 2001. In addition, the Company staked 28 claim units contiguous and adjoining the Botany claims.

Earlier exploration programs carried out by the Company on the project identified a rhyolite porphyry unit which may be indicative of a semi-conformable alteration zone related to a volcanogenic massive sulphide (VMS) alteration system.  The prospective zinc-bearing felsic volcanic horizon has been identified over eight kilometres of property length and remains open along strike. The project is located approximately 65 kilometres northwest of Kirkland Lake, Ontario, and covers a largely under-explored southeast trending package of felsic volcanic, mafic volcanic and sedimentary rocks.   

Mobile Metal Ion  (MMI) geochemical surveys were completed on the property.  Results from the western grid outlined a very strong multi station, multi line zinc anomaly. This anomaly is west of a previous drill hole (best intersection 0.91 metres of 1.56% copper) and continues to the west-northwest.  Copper, cadmium and lead are anomalous but not as intense or as continuous as the zinc anomaly.  The zinc anomaly outlined is a strong, unambiguous geochemical anomaly overlying a rhyolite breccia tuff  horizon that has been shown to contain VMS mineralization.   This is a priority drill target with good potential of intersecting VMS mineralization. Two diamond drill holes, NQ diameter or larger, are recommended to test the anomaly.

CORPORATE, FINANCE AND INVESTOR RELATIONS ACTIVITIES

The Company has working capital of approximately $114,850 and is pursuing additional financing and exploration partnerships.  The most recent exploration information and proprietary data is being presented to several companies active or interested in acquiring diamond exploration  projects.  The goal is to secure Option/Joint Venture agreements and to pursue additional funding for continued advancement of its properties. 

Subsequent to the period, Tres-Or closed a non-brokered private placement of 1.44 million units of the Company at $0.35 per unit, of which 1.14 million are flow-through units.  Each flow-through unit consists of one flow-through share and one non-transferable share purchase warrant.  Each flow-through share purchase warrant can be exercised to acquire one additional flow-through common share of Tres-or for a period of one year at an exercise price of $0.50 per share. 

As part of this private placement, in accordance with the terms of an agreement dated March 5, 2002, Rhonda Corporation subscribed for 300,000 units at $0.35 per unit.  Each unit consists of one share and one non-transferable share purchase warrant, each warrant is exercisable for one year at $0.50 per share. 

In accordance with the terms of an agreement dated April 15, 2002, Rock Resources Inc. subscribed for 290,000 common shares  of Tres-Or at $0.35 by way of a private placement.

Proceeds from the financing will be used for general working capital, and for the acquisition and exploration of the Temagami Diamond Claims, located in the Sudbury and Larder Lake Mining Divisions of Ontario.  

On March 27, 2002, 500,000 warrants at $0.45 per share expired unexercised.  Subsequently, the Exchange granted approval to extend the term of certain warrants relating to a private placement completed by the Company in May 2001.  The warrants are exercisable at a price of $0.50 per share.  The term of the warrants was extended one year and are set to expire on May 9, 2003 and June 28, 2003, respectively.  Other than the extension, the terms of the warrants remain unchanged. 

Subsequent to the quarter, the Board of Directors authorized the establishment of a Shareholder Rights Plan Agreement effective July 3, 2002. Although the Rights Plan is effective upon its adoption, in accordance with stock exchange requirements it will be submitted to the shareholders for ratification at the Company’s Annual and Extraordinary General Meeting scheduled to be held on August 12, 2002.  The Agreement has a term of 10 years, subject to confirmation by the shareholders of the Company at annual meetings immediately following the fifth and eighth anniversaries of the Effective Date.  

The Shareholder Rights Plan is designed to ensure that all shareholders receive equal treatment and to maximize shareholder values in the event of a take-over bid or other acquisition that could lead to the change in control of the Company. It is not intended to deter take-over bids. The Shareholder Rights Plan is intended to provide time for shareholders to properly assess any takeover bid and to provide the Board of Directors with sufficient time to explore and develop alternatives for maximizing shareholder value, including, if considered appropriate, identifying and locating other potential bidders.  

In making the announcement, the Company was not aware of any pending or threatened take‑over bid for the Company. 

Liquidity and solvency:

The financial statements presented in Schedule A, have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  The continuing operations of the company are dependent upon its ability to raise adequate financing, secure substantial option or joint venture partnerships and to advance project opportunities to viable operations in the future.  

ANNUAL AND EXTRAORDINARY GENERAL MEETING

The annual  and extraordinary general meeting of Tres-Or Resources Ltd. will be held on Monday, August 12, 2002 at Suite 1525 - 625 Howe Street, Vancouver, British Columbia.