PGM property holds promise.

Rumours of the arrival of a new drill were circulating through River Valley in January after Pacific Northwest Capital announced a Phase 6 drilling program at Dana Lake would begin this year.

"You should come take a picture of it," says Hector Giroux, a 77-year-old resident of the small community located in the Municipality of West Nipissing, about 20 minutes north of Sturgeon Falls. "It is good for the town."

Giroux is excited about the possibility of a platinum and palladium mine being setup in his small community, where a number of businesses have closed during the last few years, and where stories were circulating before Christmas the post office may close.

"There is still a spur line running near the drill site," adds Giroux. "There is talk they are going to relay the track going to the site. It's perfectly located for a mine."

The drilling program, which is being funded by Pacific North West's (PFN) joint venture partner Anglo American Platinum Corp. Ltd. is part of a $5.3-million test drill project to fill in areas around the Dana Lake and Lismer's Ridge sections of the property, located 65 kilometres northeast of Sudbury.

"A drill hasn't arrived yet," says Harry Barr, president and CEO of PFN from his office in Vancouver in mid-January.

"This phase will see us mostly fill in portions of the property where we have already drilled, but we will look into brand new areas of the property to see what is there," he says. "We could still spend an equal amount of money just filling in the areas we have looked.

Barr says the new funding represents an over 100 per cent increase over the 2002 budget of $2.25 million, and will be used to drill an additional 40,000 metres in 2003.

The platinum and palladium company has been operating a drilling program at the site for almost two years, with 47,000 metres, or 232 drill holes completed to date.

PFN wrapped up its Phase 5 project in the spring, drilling 83 holes in order to expand on its initial mineral findings: Barr says only 30 per cent of the 4,800-hectare property has been looked at by the company.

An analysis of the core samples from Phase 5, which the company says was completed by an independent consulting firm late last year, found total measured and indicated resources from the samples are 825,900 ounces of palladium, platinum and gold. In addition, the company says there are inferred resources of 200,600 ounces of palladium, platinum and gold.

"There is a lot of potential," says Lorne Luhta, the original staker and vendor of the property.

"I did a lot of work researching the site and looking at government information before going to see it," he says. "The results are turning out to be actually better than I hoped."

Platinum is a silvery metal as resistant to corrosion as gold, and is considered to be as rare and even more highly valued. It is used in the chemical industry as a catalyst, in medicine as an anti-cancer drug, and in catalytic converters to cut down on car exhaust.

During the thirty day period beginning in mid-December, platinum was averaging $600 U.S. per ounce.

Heather Pearson, who is involved in investor relations for Pacific North West, says there are only two platinum mines presently operating in North America, one located near Thunder Bay and the other in Still Water, Mont.

"The new budget proves Anglo American is serious about bringing this grassroots project into production," says Pearson from PFN's Sudbury office. "This is a major and very rare find."

Barr agrees; and notes the find is even more impressive because of its location.

"To be able to drive down a road to the site, with a rail bed close by and only 40 to 60 kilometres from Inco and Falconbridge - it's unbelievable."

He says in order for the operation to move from exploration to production, the cost of extracting the minerals would need to be outweighed by potential profits to be made.

A feasibility study could cost upwards of $10 million, while the opening of a mine, which Barr says would likely be an open-pit operation, is estimated at $200 million to $300 million.

"We don't have a crystal ball, but there will likely be another phase first," he says. "We will likely do a scoping study, and hopefully a feasibility study later this year."