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Nov 06, 2001

Donner Lake Initial Results Positive





Kermode Resources Ltd. is pleased to report that its preliminary investigation of tantalum-bearing pegmatite occurrences on its optioned Donner Lake property in southeast Manitoba has confirmed and enhanced the significance of the initial previously reported sample results. By a series of staged stock payments over the next 15 months totaling 100,000 shares, Kermode will acquire 100% interest in the property subject to a 2% royalty.

Kermode is a Canadian junior company focused on tantalum exploration in Canada. Tantalum exploration has recently become quite active in Canada with the recognition of the inherent unique electrical and other properties that have made tantalum an extremely valuable and reliable component of capacitors in the personal communicator market. With only two primary producing sources (one in Canada and one in Australia) the supply of tantalum is very tight, limiting the growth of its consumption to about 20% annually. Tantalum pentoxide prices, currently in the US$85 to US$105 per pound range, spiked above US$ 400 per pound in 2000 (from U$40 per pound in 1998) because of the tight supply.

Kermode's 607 hectare (1500 acre) Donner Lake property is located 25 km north of the Bernic Lake tantalum-cesium-lithium-rubidium mine operated by Tantalum Mining Corporation (Tanco), Canada's only primary producing tantalum mine. The Donner Lake property adjoins immediately south of Tanco's Spot Group claims, which include a significant Li2O reserve in the Main Dike and reported intersections up to 670g/t Ta2O5 (1.34 lbs/ton)/ 1.0 meter in the High Grade Dike.

Prospecting in the area of the previously reported "South Dike" has exposed a 200 meter length of highly fractionated, tantalum-bearing pegmatite. A series of nine representative grab samples taken along the length of this dike returned values ranging from 250 g/t Ta2O5 (0.5 lbs/ton) to 550g/t Ta2O5 (1.1 lbs/ton). These results confirm the 1983 sampling from the central portion of the South Dike, which ranged from 460g/t Ta2O5 (0.92 lbs/ton) to 670g/t Ta2O5 (1.34 lbs/ton).

The real significance of these results, Kermode's Manitoba consultant reports, is that they provide a better understanding of rare element fractionation levels and distribution, in both the overall pegmatite field and individual dikes. Mineralogical indicators show that fractionation of rare elements within the pegmatite field increases to the south, and the mineralogy of the South Dike indicates that it is a highly fractionated pegmatite. Both the tantalum levels and the Ta/Nb ratio that averages 5.2/1 confirm this.

The sample results also show that fractionation levels are increasing from northeast to southwest in the South Dike. The three samples from the northeast end of the dike averaged 310g/t Ta2O5, while the three middle samples averaged 390g/t Ta2O5, and the three western samples averaged 470g/t Ta2O5. Exploration can now be focused toward exploring the southwest extent of the South Dike, and also on several untested geochemical anomalies occurring approximately one kilometer west of the South Dike.

Kermode plans a systematic program of geologic mapping, soil and bedrock geochemical sampling, and diamond drilling on the Donner Lake property.

"We are very encouraged by these initial sampling results from the Donner Lake property," said Neil Briggs, Director of Kermode and a former director of Tanco. "Highly fractionated pegmatites are the place to be when you are looking for tantalum. The fractionation trends tells us where we can now concentrate our exploration efforts, and we are certainly looking forward to testing the indicated geochemical anomalies."

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Donald G. Moore
President & Director