U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB

                             Quarterly Report Under
                       the Securities Exchange Act of 1934

                        For Quarter Ended: September 30, 2002

                        Commission File Number: 001-31242

                            Navigator Ventures, Inc.
                          ----------------------------
        (Exact name of small business issuer as specified in its charter)

                                     Nevada
                                    --------
         (State or other jurisdiction of incorporation or organization)

                                   98-0232855
                                   ----------
                        (IRS Employer Identification No.)

                                       207-1425 Marine Drive
                                 West Vancouver, B.C.

                                ----------------
                    (Address of principal executive offices)

                                None

                            ------------------------
          (Former name or former address, if changed since last report)

                                     V7T 1B9
                                      -----
                                   (Zip Code)

                                 (604) 818-6804
                                 --------------
                           (Issuer's Telephone Number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days: Yes
__X__ No ____.

The number of shares of the registrant's only class of common stock issued and
outstanding, as of September 30, 2002 was 2,250,000 common shares.

<PAGE>




                                     PART I


ITEM 1. FINANCIAL STATEMENTS.

     The unaudited financial statements for the three-month period ended
September 30, 2002 are attached hereto.

     ITEM 2.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
RESULTS OF OPERATIONS

     The following discussion should be read in conjunction with our audited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or our behalf. We disclaim any obligation to update
forward-looking statements.
<PAGE>

OVERVIEW

     Navigator  Ventures,  Inc. was incorporated  under the laws of the State of
Nevada on May 24, 2000. We have not commenced active business operations.

         We are an exploration stage company. We have acquired a mineral lease
on a total of 5 patented and 10 un-patented lode mineral claims located in
Washington State. A patented lode mineral claim is the highest form of holding a
mineral claim. It means that no more assessment work is necessary and that all
mineral rights, both surface and underground, are included in the claim. An
un-patented claim means that more assessment work is necessary before all
mineral rights can be claimed. We intend to explore for metals, including silver
and gold, on our property. There is no assurance that valuable minerals will be
found until proper geologic exploration and analysis is performed.

         Our administrative office is located at 207-1425 Marine Drive, West
Vancouver, British Columbia, Canada V7T 1B9, telephone (604) 818-6804. Our
Nevada office is located at 5300 West Sahara Avenue, Suite 101, Las Vegas,
Nevada, 89146. Our fiscal year end is December 31.

Business Operations

         On September 30, 2000, Navigator acquired a 10-year mineral lease from
L.E. Lawson, the owner of five patented and ten un-patented lode mineral claims,
sometimes referred to as the Zala M claims, covering approximately 277 acres
located in the northeast section of the state of Washington. An un-patented
claim is one in which more assessment work is necessary before all mineral
rights can be claimed. We are presently in the pre-exploration stage and there
is no assurance that a commercially viable mineral deposit exists in our
property until exploration is done and a comprehensive evaluation concludes
economic and legal feasibility.

         Under the terms of the mineral lease, Navigator may extend the initial
term for two additional periods of ten years each by giving the owner notice of
such extension not less than thirty days prior to the expiration of the initial
term or any extension thereof. Navigator has the exclusive possession of the
property for mining purposes during the term of the lease.

         If Navigator fails to comply with any of the provisions of the lease
and does not initiate and diligently pursue steps to correct the default within
thirty days after notice has been given to it by owner specifying with
particularity the nature of the default, then upon the expiration of the
thirty-day period, all rights of Navigator under the lease terminate and all
liabilities and obligations of Navigator except royalties then due terminate.
Any default claimed with respect to the payment of money may be cured by the
deposit in escrow of the amount in controversy (not including claimed
consequential, special, exemplary, or punitive damages) and giving of notice of
the deposit to the owner, the amount to remain in escrow until the controversy
is resolved by decision of a court or otherwise. If Navigator by notice to owner
disputes the existence of a default, then the lease shall not terminate unless
Navigator does not initiate and diligently pursue steps to correct the default
within thirty days after the existence of a default has been determined by
decision of a court or otherwise.


<PAGE>

         The owner of the property on which the Zala M claims are located is the
Lawson Trust. The beneficial owners of the Lawson Trust are L.E. Lawson and
Verla Lawson. By a lease agreement dated September 15, 2000 and amended October
25, 2001, the Company was granted the exclusive right to explore and mine the
Zala M Group claims located in Ferry and Okanogan Counties of North Central
Washington State. Under the terms of the lease, Navigator is obligated to pay
royalties of 2.5% of the net returns from all minerals sold or processed. In
addition, Navigator must pay a minimum annual royalty as follows, of which the
first payment of $1,000 has already been made:

     Navigator  Ventures  Inc.  agrees to pay the Owner in Canadian  funds,  the
minimum annual royalty as follows,  of which the first two payments have already
been made:

         September 30, 2001                          $1,000
         November 30, 2001                  $5,000
         September 30, 2002                          10,000
         September 30, 2003                          20,000
         September 30, 2004 & there after   40,000

         In addition Navigator Ventures is obligated under the terms of the
lease, paragraph 8,to expend $435, 719 as part of their exploration program, of
which now will proceed according to the following:

         $61,299  On or Before              September 30, 2002
         112,791                            September 30, 2003
         261,628                            September 30, 2004

         As of the time of this quarterly report, Navigator is in the process of
negotiating an extension of the September 30, 2002 payment.

         Our business activities to date have been restricted to obtaining a
report from our mining engineer, R.E. Miller, raising initial capital of $25,000
and conducting a public offering that raised $100,000. According to Mr. Miller's
report, since the discovery of the Zala M vein in 1898, considerable exploration
and minor intermittent precious metal production has taken place on the property
leased by Navigator. Early exploration appears to have been conducted mainly by
trenching and the development of shallow pits. More modern efforts have involved
geophysical and geochemical techniques, percussion drilling and core drilling.
Precious metal production has come primarily from underground workings at the
Zala M. Surface and underground stopes on the Zala M are reported to have
produced 5,000 tons of ore from quartz vein.

         This report recommends the investigation of two major targets that
exist on the property for additional exploration work. Initially 2000 feet of
drilling is recommended to evaluate the Zala M precious metal bearing quartz
vein at depth. The second recommendation involves detailed geologic mapping
followed by drilling of any targets that are found to occur along the eastern
zone of the Zala M vein system.

         The exploration program has been separated into the three phases. Each
phase is dependent on the results of the previous phase:

         Phase I- $ 61,299.00 Zala M drilling and east contact exploration Phase
         II- $ 112,791.00 Continued east contact zone exploration and
                                    drilling
         Phase III-  $ 261,628.00  Continued exploration and drilling

Location and Access

         The Zala M Group Properties consist of five patented and ten
un-patented claims totaling approximately 277 acres. The property is located in
the Wauconda mining district of Okanogan County and the Eureka mining district
of Ferry County and is approximately 17.5 miles northwest of Republic,
Washington. Access to the region from Vancouver, B.C. is by Highway No. 3 to
Carson B.C. and Washington State Highways No. 20 and No. 21 to Republic, a road
distance of 350 miles. Property access from Republic is by way of the Trout
Creek Road for 6.5 miles to Ferry County Road 514, a well-maintained gravel
road, and the Sheridan Road for 8.0 miles to the Zala M Group claims. A number
of well-maintained forestry service roads provide good access to most areas of
the property.
Physiography

         The topography is moderate with rounded ridges and narrow valleys.
Elevations range from 4500 feet to a high of 5498 feet at the summit of
Horseshoe Mountain. The area, located in the Colville National Forest, is
covered with merchantable timber and has been subject to logging in the past.

         The area is semi-arid with an average 18-inch rainfall, cold winters
and warm to hot summers. Good water supplies exist at Toroda Creek, 3.5 miles
west of the claims, and from a spring located near the Zala Mining claim on the
property.
<PAGE>

Property Geology

         Aegis Resources Ltd mapped the geology in 1976-77 by the Dusty
Mac-Occidental-Quintana consortium and in 1985. The two upper members of the
tertiary Klondike Mountain formation generally underlies most of the property.
The Middle Member, which is composed of pale, colored, greenish volcanic
breccias, a type of rock whose components are angular in shape, as distinguished
from a conglomerate, whose components are water-worn into a rounded shape, and
lava flows, occurs in the southern part of the property and the Upper Member,
consisting of dark gray, bitric lava flows in the northern property areas. The
flows are generally flat lying and at the Silver Bell breccias zone, they are of
rhyolite tuff composition. The host rocks at the Zala M mine have been described
as trachytic andesite and an andesite breccia. Andesite is a fine grained
igneous rock with no quartz or orthoclase, composed of about 75% plagioclase
feldspars and 25% ferromagnesium silicate.

         In the southeastern property area units of the Pre Permian Tonata Creek
Formation comprising metamorphosed sediments and marbelized limestone occur and
are in contact with units of the Klondike and the granodiorite. Granodiorite is
a coarse-grained igneous rock intermediate in composition between granite and
diorite. The contact between these units and the granites on the east cuts
through the southeastern part of the claims and trends northeasterly, generally
within the eastern property boundary.

Our Proposed Exploration Program

         We must conduct exploration to determine what amount of minerals, if
any, exist on our properties, and if any minerals that are found can be
economically extracted and profitably processed.

         Our exploration program is designed to economically explore and
evaluate our claims.

         We do not claim to have any minerals or reserves whatsoever at this
time on any of our claims.

         We intend to implement an exploration program and to proceed in the
following three phases:

         Phase 1 will begin with research of the available geologic literature,
personal interviews with geologists, mining engineers and others familiar with
the prospect sites.

         When research is completed, our initial work will be augmented with
geologic mapping, geophysical testing and geo-chemical testing of our claims.
When available, existing workings, like trenches, prospect pits, shafts or
tunnels will be examined. If an apparent mineralized zone is identified and
narrowed down to a specific area by the studies, we will begin trenching the
area.

         Trenches that appear on the property are generally five feet in length
and 300 feet wide. These trenches are the result of exploration that was carried
out on the property between 1898 and 1985. Trenches allow for a thorough
examination of the surface of the vein structure types generally encountered in
the area. They also allow easier restoration of the land to its pre-exploration
condition when we conclude our operations. Once excavation of a trench is
completed, samples are taken and then analyzed for economically potential
minerals that are known to have occurred in the area. Careful interpretation of
this available data collected from the various tests aid in determining whether
or not the prospect has current economic potential and whether further
exploration is warranted. Phase 1 will take about three months and cost up to
$61,299.

         Phase 2 involves an initial examination of the underground
characteristics of the vein structure that was identified by Phase 1 of
exploration. Phase 2 is aimed at identifying any mineral deposits of potential
economic importance. The methods employed are

     -    more extensive trenching
     -    more advanced geophysical work
     -    drift driving

         Drift driving is the process of constructing a tunnel to take samples
of minerals for testing. Later, the tunnel can be used for mining minerals. The
geophysical work gives a general understanding of the location and extent of
mineralization at depths that are unreachable by surface excavations and
provides a target for more extensive trenching and core drilling. Trenching
identifies the continuity and extent of mineralization, if any, below the
surface. After a thorough analysis of the data collected in Phase 2, we will
decide if the property warrants a Phase 3 study. Phase 2 will take about six
months and cost up to $112,791.

Phase 3 is aimed at precisely defining the depth, the width, the length, the
tonnage and the value per ton of any mineral body. This is accomplished through
extensive drift driving. Phase 3 will take about twelve months and cost up to
$261,628.

         We do not intend to interest other companies in the property if we find
mineralized materials. We intend to try to develop the reserves ourselves.

Competitive Factors

         The mineral industry is fragmented. We compete with other exploration
companies looking for a variety of mineral reserves. We may be one of the
smallest exploration companies in existence. Although we will be competing with
other exploration companies, there is no competition for the exploration or
removal of minerals from our property. Readily available markets exist in North
America and around the world for the sale of minerals. Therefore, we intend to
develop mining claims to the production point in which major mining production
companies would seriously consider pursuing the property as a valuable and
significant acquisition.
<PAGE>

Regulations

         General exploration work including surveying, geophysical and
geochemical programs that do minimal surface disturbance do not require county,
state or federal permits. The initial drilling program will only require minimal
permits as the surface and minerals are privately owned. Expansion in the Phase
II and III will likely need approval and bonding.

         The activity in Phase I is related to work on the patented claims for
which the surface and mineral title is privately owned by the Lawson Trust. The
permitting process is for the purposes of notification. For private land, such
as the property leased by Navigator, it requires notifying Ferry County where
the claims are located of the planned work, including a map of the area where
the work is proposed.

         The county will act like a "lead agency" and may require Navigator to
fill out the Washington State Environmental Agency forms which will help clarify
the counties position as lead agency. Should the county determine that the
United States Bureau of Land Management ("BLM") and/or Washington State
Department of Natural Resources ("DNR") has some jurisdiction they will notify
those agencies. From the Plan of Operation these agencies will determine what
restrictions will be set; if any bonding is required and the degree of
reclamation.

     Management's discussion and analysis of financial conditions and results of
operations


         We are a start-up, exploration stage company and have not yet generated
or realized any revenues from our business operations.

         Our auditors have issued a going concern opinion. This means that our
auditors believe there is doubt that we can continue as an on-going business for
the next twelve months unless we obtain additional capital to pay our bills.
This is because we have not generated any revenues and no revenues are
anticipated until we begin removing and selling minerals. Accordingly, we must
raise cash from sources other than the sale of minerals found on our property.
Our only other source for cash at this time is investments by others in our
company. We must raise cash to implement our project and stay in business.

Results of Operations
From Inception on May 24, 2000

         We have acquired our first interest in patented and un-patented lode
mineral claims. At this time we have not yet commenced the research and/or
exploration stage of our mining operations on that property. We have paid $6,000
for a mining lease. In addition, we have paid $4,000 to R.E. Miller, a mining
engineer, for a report on the property. As of September 30, 2002 we have
experienced operating losses of $135,495.
<PAGE>

Plan of Operations

         Since inception, we have used our common stock to raise money for our
property acquisition, for corporate expenses and to repay outstanding
indebtedness. Net cash provided by financing activities from inception on May
24, 2000 to December 31, 2000 was $25,000 as a result of proceeds received from
our president and sole director. Our business activities to date have been
restricted to obtaining a mining engineer's report and conducting a public
offering from which we raised $100,000 in gross proceeds.

         Navigator's plan of operations for the next twelve months is to
undertake Phase I of the drilling and exploration program. Phase I is estimated
to be $61,299.00. We may have to seek other sources of financing or we may have
to cease operations entirely. We have no plan to engage in any alternative
business if Navigator ceases or suspends operations as a result of not having
enough money to complete any phase of the exploration program.

         Phase I will involve drilling a three holes to investigate the extent
of mineralization of the Zala M claims. We also intend to investigate the east
contact zone of the leased property for additional mineral deposits. Permitting,
drilling and associated expenses for investigating the Zala M claims will cost
approximately $52,700. Geological mapping of the east contact zone will cost
approximately $3,710.00. Expenses associated with the geologist's report for
Phase I are anticipated to be approximately $1,970.00. We also plan to reserve a
5 percent contingency fund for unforeseen expenses of $2,919.00.

Liquidity and Capital Resources

         As of the date of this report, we have yet to generate any revenues
from our business operations. Since our inception, Mr. Anderson has paid $25,000
in cash in exchange for 250,000 shares of common stock. This money has been
utilized for organizational and start-up costs and as operating capital. We have
also raised gross proceeds of $100,000 from the sale of stock registered in our
SB-2 offering. As of September 30, 2002 we had sustained operating losses
$135,495.
<PAGE>

                           PART II. OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

     There are no material legal proceedings to which we (or any of our officers
and directors in their capacities as such) is a party or to which our property
is subject and no such material proceedings is known by our management to be
contemplated.

ITEM 2. CHANGES IN SECURITIES - NONE

ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -

     NONE

ITEM 5. OTHER INFORMATION - NONE

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -

     (a) Exhibits - NONE

     (b)  Reports  on Form 8-K - NONE


                                    SIGNATURE

In accordance with the requirements of the Securities and Exchange Act of 1934,
as amended, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                            NAVIGATOR VENTURES, INC.

     Dated: November 8, 2002 /s/ John Reid Anderson John Reid Anderson President



<PAGE>
<TABLE>
<CAPTION>


                            NAVIGATOR VENTURES, INC.
                         (An Exploration Stage Company)
                              INTERIM BALANCE SHEET
                    September 30, 2002 and December 31, 2001
                             (Stated in US Dollars)
                                   (Unaudited)


                                                                              September 30,       December 31,
                                                     ASSETS                        2002               2001
                                                     ------                        ----               ----
Current
   Cash                                                                      $           204     $        38,328
   Accounts receivable                                                                   250                 250
   Prepaid expenses                                                                      570              10,000

                                                                             $         1,024     $        48,578


                                                   LIABILITIES
Current
   Accounts payable                                                          $        11,519     $        12,303


                                            STOCKHOLDERS' DEFICIENCY
Preferred stock, $0.001 par value
      5,000,000 shares authorized, none outstanding
Common stock, $0.001 par value
     45,000,000 shares authorized
      2,250,000 shares outstanding                                                     2,250               2,250
Additional paid-in capital                                                           122,750             122,750

                                                                                     125,000             125,000
Deficit accumulated during the exploration stage                                (    135,495)       (     88,725)

                                                                                (     10,495)             36,275

                                                                             $         1,024     $        48,578


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<CAPTION>

                            NAVIGATOR VENTURES, INC.
                         (An Exploration Stage Company)
                        INTERIM STATEMENTS OF OPERATIONS
                  for the three and nine months ended September
               30, 2002 and 2001, and for the period May 24, 2000
                  (Date of Incorporation) to September 30, 2002
                             (Stated in US Dollars)
                                   (Unaudited)


                                                                                                          May 24, 2000
                                                                                                         (Date of Incor-
                                            Three months ended               Nine months ended            poration) to
                                               September 30                     September 30              September 30,
                                           2002            2001             2002            2001              2002
                                           ----            ----             ----            ----              ----
Administrative expenses:
   Accounting fees                     $        1,109  $        1,915  $        4,724   $       2,680   $      15,485
   Bank charges                                    16             141             450             249           1,019
   Business plan                                    -               -               -               -           1,177
   Consulting fees                                  -               -           5,000               -           5,000
   Legal fees                                       -          20,797           2,464          26,494          40,127
   Management fees                                  -               -          10,000               -          22,000
   Transfer agent fees                            104             315           1,610           1,615           3,925

Loss before other items                   (     1,229)    (    23,168)    (    24,248)     (   31,038)     (   88,733)

Other items Mineral property costs:
  Exploration costs                       (     1,637)    (       150)    (    22,522)     (      150)     (   40,762)
  Royalty payments                                  -               -               -               -      (    6,000)

                                          (     1,637)    (       150)    (    22,522)     (      150)     (   46,762)

Net loss for the period                $  (     2,866) $  (    23,318) $  (    46,770)  $  (   31,188)  $  (  135,495)

Loss per share                         $  (     0.00)  $  (     0.09)  $  (     0.02)   $  (     0.12)

Weighted average number of
 shares outstanding                         2,250,000         250,000       2,250,000          250,000

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<CAPTION>

                            NAVIGATOR VENTURES, INC.
                         (An Exploration Stage Company)
                        INTERIM STATEMENTS OF CASH FLOWS
                     for the nine months ended September 30,
                 2002 and 2001, and for the period May 24, 2000
                  (Date of Incorporation) to September 30, 2002
                             (Stated in US Dollars)
                                   (Unaudited)

                                                                                                       May 24, 2000
                                                                 Nine months        Nine months      (Date of Incor-
                                                                    Ended              ended           poration) to
                                                                September 30,      September 30,      September 30,
                                                                    2002                2001               2002
                                                                    ----                ----               ----
Cash Flows used in Operating  Activities
   Net loss for the period                                     $ (     46,770)     $ (     31,188)    $ (    135,495)
   Changes in non-cash working capital items related
    to operations
     Share subscription receivable                                          -                   -      (         250)
     Prepaid expenses                                                   9,430        (        200)      (        570)
     Accounts payable                                            (        784)             22,089             11,519
     Due to shareholder                                                     -               1,700                  -

                                                                 (     38,124)       (      7,599)      (    124,796)

Cash Flows from Financing Activities
   Capital stock issued                                                     -               5,650            125,000

Increase (decrease) in cash during the period                    (     38,124)       (      1,949)               204

Cash, beginning of the period                                          38,328               2,696                  -

Cash, end of the period                                        $          204      $          747     $          204


Supplemental disclosure of cash flow information Cash paid for:
     Interest                                                  $            -     $            -      $            -

     Income taxes                                              $            -     $            -      $            -


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<CAPTION>


                             SEE ACCOMPANYING NOTES
                            NAVIGATOR VENTURES, INC.
                         (An Exploration Stage Company)
                       INTERIM STATEMENT OF STOCKHOLDERS'
                 DEFICIENCY for the period May 24, 2000 (Date of
                      Incorporation) to September 30, 2002
                             (Stated in US Dollars)
                                   (Unaudited)


                                                                                         Deficit
                                                                                       Accumulated
                                                                      Additional       During the
                                             Common Shares              Paid-in        Exploration
                                             -------------
                                         Shares        Par Value        Capital           Stage           Total

Capital stock issued for cash
                      - at $0.10            250,000 $          250  $       24,750  $            -    $       25,000

Net loss for the period                           -              -               -     (    25,888)      (    25,888)

Balance, December 31, 2000                  250,000            250          24,750     (    25,888)      (       888)

Capital stock issued pursuant to an
initial public offering
                      - at $0.05          2,000,000          2,000          98,000               -           100,000

Net loss for the year                             -              -               -     (    62,837)      (    62,837)

Balance, December 31, 2001                2,250,000          2,250         122,750     (    88,725)           36,275

Net loss for the period                           -              -               -     (    46,770)      (    46,770)

Balance, September 30, 2002               2,250,000 $        2,250  $      122,750  $  (   135,495)   $  (    10,495)


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                            NAVIGATOR VENTURES, INC.
                         (An Exploration Stage Company) NOTES TO THE INTERIM
                    FINANCIAL STATEMENTS September 30, 2002 and December 31,
                    2001
                             (Stated in US Dollars)
                                   (Unaudited)

Note 1        Interim Reporting

              While the information presented in the accompanying interim three
              months financial statements is unaudited, it includes all
              adjustments which are, in the opinion of management, necessary to
              present fairly the financial position, results of operations and
              cash flows for the interim period presented. All adjustments are
              of a normal recurring nature. It is suggested that these financial
              statements be read in conjunction with the company's December 31,
              2001 annual financial statements.

Note 2        Continuance of Operations

              The financial statements have been prepared using generally
              accepted accounting principles in the United States of America
              applicable for a going concern which assumes that the Company will
              realize its assets and discharge its liabilities in the ordinary
              course of business. As at September 30, 2002, the Company
              accumulated losses of $135,495 since its commencement and has a
              working capital deficiency of $10,495, which is not sufficient to
              meet its planned business objective or to fund mineral property
              expenditures and ongoing operations for the next fiscal year. Its
              ability to continue as a going concern is dependent upon the
              ability of the Company to obtain the necessary financing to meet
              its obligations and pay its liabilities arising from normal
              business operations when they come due.

Note 3        Commitment

              By a lease agreement dated September 15, 2000 and amended October
              25, 2001, the Company was granted the exclusive right to explore
              and mine the Zala M Group claims located in Ferry and Okanogan
              Counties of North Central Washington State for the following
              minimum royalty payments and exploration commitment:

              Minimum Royalty Payments:

              The owner shall be paid a royalty of 2.5% of the net returns from
              all production. In respect to this royalty, the company is
              required to pay minimum royalty payments of the following:
-        $1,000 upon signing (paid);
-        $5,000 on November 30, 2001 (paid);
-        $10,000 on September 30, 2002
-        $20,000 on September 30, 2003
-        $40,000 on September 30, 2004 and thereafter


<PAGE>



Note 3        Commitment - (cont'd)
              ----------

              Exploration Commitment:

              The company must incur $435,718 on exploration expenditures prior
to September 30, 2004 as follows:
<TABLE>

                                                                              Minimum
                                                  Date                      Exploration
                                                  ----                      -----------
                                On or before September 30, 2002           $       61,299
                                On or before September 30, 2003                  112,791
                                On or before September 30, 2004                  261,628

                                                                          $      435,718

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              The term of this lease is for 10 years. The term may be extended
              by the Company for two periods of 10 years by the company giving
              notice to the owner.

              On September 30, 2002 the agreement was in default in respect to
              unpaid royalty payments and further exploration costs. The company
              is negotiating an extension to the royalty and exploration
              commitments.

Note 4        Subsequent Events

              The Company entered into a term sheet dated September 5, 2002 to
              acquire 100% of the issued and outstanding shares of Golden Apple
              Holding Company LLC, ("Golden Apple"). Golden Apple intends to
              conduct business in the area of property and casualty insurance.
              Consideration will be by the issue of 2,250,000 shares of the
              Company. In conjunction with the issue, the Company intends to
              forward split its outstanding shares on the basis of nine new for
              each share outstanding. Completion of the acquisition is subject
              to satisfactory due diligence procedures by the Company.