<PAGE>  1
==============================================================================

                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                            FORM 10-K

[   ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934

[ X ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934
For the transition period from February 1, 1996 to December 31, 1996

                 Commission File Number 000-25132

                        ICHOR CORPORATION
      (Exact name of Registrant as specified in its charter)

                  Delaware                           25-1741849
        (State or other jurisdiction of           (I.R.S. Employer
        incorporation or organization)            Identification No.)

  300 Oxford Drive, Monroeville, Pennsylvania           15146
   (Address of principal executive offices)           (Zip Code)

  Registrant's telephone number, including area code:  412-856-6100

Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:

                  Common Stock, $0.01 par value
                         (Title of Class)

Indicate by check mark whether the Registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
                                                      -----     -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]

The aggregate market value of the voting stock held by non-affiliates of the
Registrant was approximately $1,309,000 as of March 17, 1997, computed on the
basis of the average of the high and low trading prices on such date.

As of March 17, 1997, there were 4,922,720 shares of the Registrant's Common
Stock outstanding.

               DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 1996 Proxy Statement to be filed within 120 days of the period
ended December 31, 1996 are incorporated by reference into Part III.  Certain
exhibits in Part IV are incorporated by reference from prior filings made by
the Registrant under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended.

==============================================================================

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FORWARD-LOOKING STATEMENTS

Statements in this report, to the extent they are not based on historical
events, constitute forward-looking statements.  Forward-looking statements
include, without limitation, statements regarding the outlook for future
operations, forecasts of future costs and expenditures, evaluation of market
conditions, the outcome of legal proceedings, the adequacy of reserves, or
other business plans.  Investors are cautioned that forward-looking statements
are subject to an inherent risk that actual results may vary materially from
those described herein.  Factors that may result in such variance, in addition
to those accompanying the forward-looking statements, include changes in
interest rates, prices, and other economic conditions; actions by competitors;
natural phenomena; actions by government authorities; uncertainties associated
with legal proceedings; technological development; future decisions by
management in response to changing conditions; and misjudgments in the course
of preparing forward-looking statements.



































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                        TABLE OF CONTENTS
                        -----------------

                                                                         PAGE
                                                                         ----
                              PART I
                              ------


ITEM 1.    BUSINESS....................................................... 4

ITEM 2.    PROPERTIES..................................................... 11

ITEM 3.    LEGAL PROCEEDINGS...............................................11

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF
           SECURITY HOLDERS............................................... 12

                             PART II
                             -------

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND
           RELATED STOCKHOLDER MATTERS.....................................12

ITEM 6.    SELECTED FINANCIAL DATA........................................ 13

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS
           OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS................14

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................... 17

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE.............................17

                             PART III
                             --------

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............. 17

ITEM 11.   EXECUTIVE COMPENSATION......................................... 18

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
           OWNERS AND MANAGEMENT.......................................... 18

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................. 18

                             PART IV
                             -------

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
           REPORTS ON FORM 8-K............................................ 18

SIGNATURES................................................................ 43


<PAGE>  4
                              PART I
                              ------
ITEM 1.  BUSINESS

The Company
-----------

ICHOR Corporation was incorporated in July 1994 pursuant to the laws of the
Commonwealth of  Pennsylvania under the name "PDG Remediation, Inc.".  In
November 1996, the Company reincorporated under the laws of the State of
Delaware and changed its name to "ICHOR Corporation".  In this document,
unless the context otherwise requires, the "Company" refers to ICHOR
Corporation and its subsidiaries.

General
-------

The Company is in the environmental services business, including remediation
and recycling.  Its operations consist of providing remediation services to
assist commercial, industrial and government clients in complying with
environmental laws and regulations and re-refining petroleum waste products
and disposing of oily waste waters.  The Company's remediation services range
from initial assessment of site contamination through the design and
implementation of remediation and treatment systems to remove contamination.
In December 1996, the Company acquired a waste oil processing facility which
is in the process of being brought on-line and can convert waste oil into
distillate and other recycled petroleum products and process and dispose of
oily waste waters.  This plant is one of only four such facilities in North
America and is located in McCook, Illinois (the "McCook Facility").  The
Company initially plans to use the McCook Facility to produce distillate for
processing into either gasoline or base oil, depending on market conditions.

The Company's environmental remediation services business is conducted through
its wholly-owned subsidiary ICHOR Services, Inc. formerly called PDG
Environmental Services, Inc. ("Services") and its recycling business,
primarily consisting of the McCook Facility, is conducted through its wholly-
owned subsidiary Ortek Inc.

The Company was initially a wholly-owned subsidiary of PDG Environmental, Inc.
("PDGE"), who in 1994 transferred its environmental remediation services
business to the Company, including two operating entities, being Services and
GeoLogic Recovery Systems ("GeoLogic"), a limited partnership.  In February
1995, the Company went public and PDGE's ownership was reduced to 59.5% of the
Company's common stock.  The Company's initial operations included remediation
services offices located in Melbourne and Tallahassee, Florida, and
Pittsburgh, Pennsylvania and a thermal treatment facility in Florida operated
by GeoLogic.

In 1995, the Company responded to changes in the Florida market by closing its
Tallahassee remediation office.  Further, it discontinued the operations of
GeoLogic, including the thermal treatment facility, and sold the same in April
1996.  It also sold its Melbourne, Florida remediation services operation in
November 1996.

In July 1996, the Company's former parent, PDGE, transferred its 59.5%
interest in the Company to Drummond Financial Corporation ("Drummond").  In
December 1996, the Company acquired a wholly-owned subsidiary of Logan
International Corp. ("Logan") whose sole asset was a loan receivable (the
"McCook Loan") in consideration of a promissory note in the amount of $1.4
million which matures on

<PAGE>  5

December 16, 1999 and bears interest at the rate of 8% per annum and the
issuance of 2,500,000 shares of the Company's common stock.  As a result of
the transaction, Logan acquired 50.3% of the Company's issued shares of common
stock.  Logan and Drummond are controlled by the same company.  In December
1996, pursuant to the McCook Loan and a bankruptcy court action, the Company
acquired the McCook Facility.  The purchase price for the McCook Facility was
credited against the amount outstanding under the McCook Loan.

The Company intends to expand its business by the acquisition of niche and
synergistic businesses in the environmental services industry.

Operations
----------

The Company's remediation and decontamination operations are located in
Monroeville, Pennsylvania, with services offered throughout the Northeast,
Midwest, Mid-Atlantic and Southeastern states.  The Company provides a broad
range of remediation services, including assessments to determine the nature
and extent of contamination, feasibility studies to evaluate the
technologically and economically applicable remedial technologies, remedial
design and actions, and operations maintenance of installed remedial systems.

The Company focuses primarily on remediation of facilities contaminated by
hazardous substances and the remediation of contamination caused by leakage
from underground storage tanks ("USTs").  The Company's strategy is to be a
technically oriented "hands on" remediation specialist able to determine,
manage and implement all aspects of a clean-up project.  The sites which
typically require these services include industrial plants, laboratories,
disposal sites and government facilities.  The Company's strategy for its
environmental remediation business is to continue to develop its industrial
clients in the Mid-Atlantic and Southeastern states and to pursue the large
federal remediation market with major contractors and as a qualified small
business.

The Company has senior technical staff experienced in providing remediation
and decontamination services to both the public and private sectors.  Several
key contracts have been obtained by the Company, including serving as a
remedial action contractor for the U.S. Navy at multiple facilities under a
contract with J.A. Jones Management Services ("Jones"), and providing similar
remediation services for major industrial clients based in Pittsburgh.  During
the year ended January 31, 1995, the Company formed an alliance with Jones and
jointly bid on a major remediation project for the U.S. Navy, at which time
the Company executed an exclusive subcontractor pre-selection agreement with
Jones.  As a result of this alliance, the Company serves as a subcontractor to
Jones with respect to a $15 million per year contract with the U.S. Navy for
remediation services, under which the Company expects annual revenues to be
approximately $2 million to $5 million per year for up to the next two years.

Most of the Company's environmental remediation contracts are obtained on a
cost plus basis wherein the Company is reimbursed at standard rates for time
expended and expenses incurred, although some projects are secured on a fixed
price basis.

The McCook Facility was not operated in 1996.  When operational, it processes
waste oil into distillate, which can be further processed into base oil and
then into blended lube oil.  The facility has a current distillate production
capacity of approximately one million gallons per month.  The distillate can
be sold to other manufacturers of lube oil or to crude oil refineries which
use the distillate as feed stock for gasoline.  Any distillate which is
further processed into base lube oil can also be sold to other lube oil


<PAGE>  6

manufacturers or further processed into end user lube oil.  The McCook
Facility also processes and disposes of oily waste waters for customers in the
greater Chicago area and can process approximately 13,000 to 15,000 gallons
per day.

The McCook Facility's basic refining and processing capabilities include the
following: (i) wipe film evaporation treatment, which is a form of vacuum
distillation used to remove impurities from waste oil to enhance the quality
of the Company's distillate; (ii) atmospheric distillation of oily waste
waters, which separates oil from water and removes other impurities; and (iii)
fractional distillation, which distills products by multiple cuts according to
their various boiling points.

Since acquiring the McCook Facility in December 1996, the Company has made
extensive preparations to commence operations.  Operating permits are in the
process of being transferred, an environmental plan has been developed for
site remediation, relationships with customers and suppliers have been re-
established, an inventory of raw material has been accumulated and the
facility's workforce and operations have been reorganized.  All administrative
functions involving the McCook Facility have been consolidated with the
Company's head office administration in Monroeville, Pennsylvania.  The McCook
Facility is expected to commence operations early in the second quarter of
1997 and produce distillate for sale to lube oil customers or gasoline
producers, depending on market conditions.

Environmental Laws
------------------

The Company's environmental services business is primarily derived from and
regulated by federal laws and regulations.  Most environmental laws and
regulations are promulgated by the U.S. Congress and federal departments and
agencies, such as the U.S. Environmental Protection Agency ("EPA") and the
U.S. Occupational Safety and Health Administration ("OSHA"), which are
responsible for protecting and monitoring certain natural resources (such as
air, water and soil), and occupational working conditions.  Many of the
federal regulations contemplate enforcement by state agencies and adoption by
the states of similar regulations which must meet the minimum federal
requirements.  In areas of environmental law where federal regulation is
silent, the states may adopt their own environmental laws.  Local governments
such as counties and municipalities may also enact and enforce environmental
laws that address local concerns.  Federal laws which impact the Company's
environmental remediation business include those described below.

Occupational Safety and Health Administration Reform Act.  OSHA has
promulgated various regulations setting forth standards for disclosure of
health hazards in the workplace and for responses thereto.  The Company's
field staff receive safety and health training in accordance with OSHA
regulations.

The Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA") and the Superfund Amendments and Reauthorization Act of 1986
("Superfund").  CERCLA provides for the investigation and remediation of
existing contaminated hazardous waste sites and other releases of hazardous
substances into the environment.  Superfund imposes strict joint and several
liability on owners and operators of contaminated facilities and disposal
facility owners and operators for the costs of investigation and remedial
action.  CERCLA provides the EPA with the authority to compel private parties
to undertake a clean-up.

Resource Conservation and Recovery Act ("RCRA") and Hazardous and Solid Waste
Amendments of 1984.  RCRA, as amended, provides a comprehensive framework for
the regulation of the generation, handling, transportation, treatment and
disposal of hazardous wastes.  Facilities that treat, store or dispose

<PAGE>  7

of hazardous wastes must obtain an RCRA permit from the EPA or appropriate
state agency, and must comply with certain operating, financial responsibility
and disclosure requirements.  Regulations have been issued pursuant to RCRA
covering areas such as permitting assistance, remediation of environmental
contamination associated with USTs, municipal solid waste disposal and land
disposal of hazardous wastes.  RCRA also imposes land disposal restrictions on
certain listed hazardous wastes which do not meet specified treatment
standards, prescribes more stringent standards for hazardous waste disposal,
sets standards for USTs, and provides for corrective action at or near sites
of waste management units.

Environmental Protection Agency Underground Storage Tank Regulations.  The UST
regulations were promulgated under RCRA and apply to petroleum products and
hazardous substances as defined by CERCLA.  USTs that are used to store
gasoline, diesel fuel, fuel oil, waste oil and hazardous materials must be
registered with the appropriate state regulatory agency, designed or upgraded
to meet construction and operational standards, and monitored to insure
against leaking.  Owners and operators are further required to report leaks
and undertake appropriate corrective action.

Environmental Remediation Market
--------------------------------

Projects involving remediation and potential closure of contaminated
facilities are primarily generated by: (i) clean-up programs funded by federal
agencies (e.g., Superfund, Department of Energy and Department of Defense);
(ii) RCRA corrective actions and closures mandated by regulations affecting
both government and industry; and (iii) vendors in real estate transfers.
Superfund and equivalent state programs typically cover clean-up at inactive
commercial and government disposal facilities and manufacturing facilities.
The RCRA corrective action program makes permitting contingent upon acceptable
programs to manage inactive waste management units that are part of active
facilities; the RCRA closure market involves closure of RCRA permitted sites
in accordance with regulation.  The transfer of real estate often involves an
environmental assessment of the land, groundwater and buildings being
transferred.  If contamination is discovered, generally either clean-up occurs
or the property is not transferred.

The environmental remediation of federal facilities presents the largest
growth area of the domestic environmental market.  The private sector
remediation market is also very significant.  Some major industrial companies
are carrying substantial liabilities on their balance sheets, which are often
associated with non-revenue generating assets.  These liabilities generally
increase with time and inhibit the sale of non-productive assets.
Revitalization of historically industrialized regions is hampered by the
reluctance of developers to recondition existing facilities or build new
plants in areas which carry potentially significant environmental liabilities.
As a result, facilities are often built in open lands which do not have a
history of industrialization.  Consequently, industrial areas are experiencing
declining usage and "green" areas are becoming industrialized.  Both local
economies and the environment are experiencing negative impacts.  As a result,
federal and state authorities have begun to promulgate rules encouraging the
redevelopment of historically industrialized regions.

The Company has historically performed a substantial amount of work under the
RCRA corrective action program, and, in particular, has remediated sites
contaminated by USTs where state programs funded by taxes on fuel and
petroleum products, rather than expenditures of the major oil companies,
provide the impetus for clean-up.

The Company's Florida remediation operation focused on a Florida State funded
site rehabilitation program known as the "EDI Program", which provided for the
remediation of contaminated sites related


<PAGE>  8

to the storage of petroleum and petroleum products.  During the year ended
January 31, 1996, the EDI Program was substantially modified to establish a
protocol for continued work on sites based on their priority ranking and pre-
approval process for both the scope and cost of work for petroleum clean-up
program tasks (the "Pre-Approval Program").  As a result of the changes in the
EDI Program, the Company's backlog of sites to be remediated was significantly
reduced, which resulted in substantially decreased revenues and significant
operating losses during the last three quarters of the period ended January
31, 1996 and the 11 months ended December 31, 1996.  Additionally, the volume
at the Company's divested thermal treatment facility was significantly reduced
by the EDI Program changes.

Re-Refined Lube Oil Market
--------------------------

The market for the McCook Facility's recycled waste oil products is dependent
on factors such as the market prices for virgin lube oils and fuels.  Since
December 1996, the market price for virgin lube oil fell from approximately
$1.05 per gallon to $0.65 per gallon, which has created a spread between crude
oil prices and lube oil prices, which are at an all-time low.  As a result,
the Company is focusing its marketing efforts on the sale of distillate to
refineries which use the distillate to produce gasoline, as fuel markets are
relatively strong.

The Company is also focusing its marketing efforts on niche markets.
Specifically, the Company believes that opportunities exist to market its
products to "tolling" customers (where the customer provides feedstock and
purchases the distillate) in the specialty lube oil market (metal working and
railroad lubricants).  Furthermore, the Company believes that as a low-cost
provider of quality distillate, it is positioned to market distillate to
traditional re-refiners and finishers.  Despite the foregoing, the current
depressed spread between crude and lube oil prices has restricted the
Company's market opportunities.

The Company is also looking to the sale of its distillate as vacuum gas-oil as
an entree to the catcracking feedstock market.  The distillate will be sold to
refineries which use the distillate to produce gasoline and diesel fuel.  The
fuel markets, which are relatively strong, historically have trended upward
during the spring and summer seasons.  This use of re-refined waste oil
products as catcracker feedstock represents a new application in the industry
and, consequently, has required extensive testing of the Company's distillate
by various refineries.  To date, the product has been approved as catcracker
feedstock at four refineries.  The margins in this market may be volatile as
the potential outside influences on the fuel markets are broad and include
crude prices, geography, transportation and terminal requirements, and market
pressure discounting.

Government Regulation
---------------------

Government regulations impact on all aspects of the Company's environmental
remediation and recycling operations, including the disposal of residual
chemical wastes, operating procedures, waste water discharges, fire
protection, safety standards, worker and community right-to-know, and
emergency response plans.  Government authorities have the power, under
various circumstances, to enforce compliance, and violators may be subject to
civil or criminal penalties.  Private individuals may also have the right to
sue to enforce compliance with certain of the governmental requirements.

Operating permits for the McCook Facility are required from both federal and
state environmental agencies.  Such permits must be renewed periodically and
government authorities have the power, under various circumstances, to revoke,
modify, or deny the issuance, transfer or renewal of these permits.


<PAGE>  9

When operating, the McCook Facility is authorized to accept non-hazardous oils
and lubricant fluids, oily waste waters and LUST waters.  The facility's
operating permits and waste stream permits are periodically renewed, subject
to approval of the state environmental protection agency, the principal
regulator responsible for such permits.  The facility also has a discharge
authorization permit with respect to waste water treatment processes.  The
McCook Facility has certain soil and groundwater contamination for which the
Company has accrued $0.8 million for remediation and also has PCB's stored on-
site for which the Company is developing a plan for removal in 1997.  The
Company does not believe these contaminants pose any immediate health or
safety threats.

The Company may be subject to liability for investigation and clean-up costs
under CERCLA and RCRA and parallel state and local laws.  In addition, the
Company may be subject to liability under UST regulations if during removal of
USTs, the Company causes the discharge of oil or petroleum products or
hazardous substances.

The Company believes it is in substantial compliance with all of the federal,
state and local statutes and regulations which affect its business.
Nonetheless, the Company may incur denials, fines and penalties from time to
time, some of which could have a material adverse impact on its business.

Suppliers and Customers
-----------------------

The Company is not limited to any one supplier or subcontractor in performing
its environmental services.  The Company's remediation customers include
private sector clients who are often responsible for multiple contaminated
facilities and industrial and government sector clients.  Revenues from three
customers provided 66% of the Company's revenues during the 11 months ended
December 31, 1996 and revenues in connection with Jones provided 43% of the
Company's total revenues during such period.  During the year ended January
31, 1996, revenues from Jones contributed 24% of the Company's total revenues.
The largest volume of subcontracted services is in the area of analytical
testing.

Purchasers of services and products refined at the McCook Facility may include
railroad companies, independent producers of oily waste waters, packaged
lubricant companies, pure base oil and distillate finished product bulk
blenders and packagers and crude oil refineries.  The Company's recycled waste
oil products may be sold either through fixed or market price contracts or
into the spot market depending on the Company's product mix.  The Company is
currently negotiating with several purchasers who may purchase substantially
all of the production of the McCook Facility on a committed basis.  The
Company expects that, when operational, revenues from the McCook Facility will
be lower during the winter months, primarily because of the liquid nature of
the wastes processed by the facility and the logistical problems caused by
below freezing temperatures.  Particularly harsh weather conditions in the
Midwest regions served by the McCook Facility could adversely effect the
Company's overall results of operations.

The primary material purchased for the McCook Facility is waste oil, and
independent waste collectors are the primary source thereof.  The Company is
currently negotiating with vendors for a long-term committed supply of waste
oil for the McCook Facility.  The McCook Facility has a capacity to process
approximately 1.25 million gallons of waste oil per month.  Waste oil is
currently procured in the spot market where the Company must compete for waste
products with seasonal demands of asphalt companies and other low grade fuel
burners.  This competition for the purchase of waste oil, which is heightened
during the spring/summer road construction seasons, causes the price of waste
oil to fluctuate


<PAGE>  10

based on the supply and demand for such products.  The Company can give no
assurances that it will be able to obtain sufficient streams of waste oil at
reasonably competitive prices.

Backlog
-------

The Company's environmental remediation business has completed its work under
the EDI Program, and in November 1996, the Company sold its contracts to
provide remediation services for USTs for private customers through the Pre-
Approval Program.  The Company continues to serve as a subcontractor to Jones
to provide remediation services to the U.S. Navy under a contract which is
expected to continue for up to the next two years.  At December 31, 1996, the
Company's environmental remediation backlog was approximately $2.5 million.

The Company is also negotiating several contracts to supplement the catcracker
feedstock spot market for its waste oil recycling business.  These contracts
will generally require six-month term commitments with minimum supply
requirements and open overages.

Insurance
---------

The Company maintains commercial general liability and umbrella liability
policies which provide aggregate coverage limits of $2.0 million and $5.0
million, respectively.  In connection with its environmental remediation
business, the Company also maintains contractors pollution and professional
liability insurance which provides an aggregate coverage limit of $3.0
million.  In connection with the McCook Facility, the Company has obtained
pollution liability and property insurance policies which provide aggregate
and blanket coverage limits of $2.0 million and $7.0 million, respectively.

Competitive Conditions
----------------------

The Company's environmental services business is highly competitive.
Remediation services are provided by several national firms with significant
financial resources and personnel and numerous small local firms.  The ability
of the Company to compete in this area depends on its ability to price its
services competitively and to maintain a reputation for safety and quality.

The recycled waste oil products which can be manufactured at the McCook
Facility and marketed for industry or public consumption will face strong
competition from a variety of re-refined and virgin-based products, including
those of the major oil companies.  Competition from virgin oil-based products
may continue to adversely impact the market for recycled waste oil products
until the public better understands that quality is not sacrificed by using a
recycled waste oil product.  Such competitors include companies that are well
established and have greater marketing, financial and operational resources
than the Company.

Employees
---------

At December 31, 1996, the Company had 32 full-time employees.  Approximately
18 of the Company's personnel are technical specialists, including
geotechnical engineers, geologists, environmental engineers, scientists,
technicians and CADD operators.  The Company has 6 pumpers, operators and
maintenance workers at the McCook Facility who are represented by Local 7-507
of the Oil, Atomic and Chemical Workers Union.  The balance of the  Company's
employees are management and administrative personnel.  The Company also hires
laborers and operators on a temporary basis as required for its projects.


<PAGE>  11

ITEM 2.  PROPERTIES

The Company's headquarters, administrative facilities and remediation services
operation are located in Monroeville, Pennsylvania in approximately 7,500
square feet of leased space.  The Company's lease expires in February 2000.

In December 1996, the Company acquired the McCook Facility, which is located
on approximately six acres of land in McCook, Illinois, on the outskirts of
Chicago.  The facility includes, among other things, seven distillation
towers, evaporators, stills, agitators, fume incinerators, boilers, oil water
separators, numerous storage tanks having a total capacity of two million
gallons, water cooling towers, two filter presses, two railroad sidings,
numerous railroad tank cars and forklifts.  The McCook Facility converts waste
oil into distillate and processes and disposes of oily waste waters.  The
facility has a capacity of approximately one million gallons per month of
distillate and can process approximately 13,000 to 15,000 gallons of oily
waste water per day.  No assurances can be given that the estimated capacity
of the McCook Facility will be fully utilized. The McCook Facility has certain
soil and groundwater contamination for which the Company has accrued $0.8
million for remediation costs.

The Company believes that these facilities are adequate for its current needs
and, where applicable, additional space is available for future expansion.

ITEM 3.  LEGAL PROCEEDINGS

In 1996, the Company and International Surplus Lines Insurance, Inc. ("ISLIC")
settled litigation with respect to insurance advances made by ISLIC pursuant
to which the Company agreed to pay a total of $1,135,000 without interest in
equal monthly payments of $37,833.33 over a 30-month period.

In June 1995, Klein v. PDG Remediation, Inc., et al., No. CIV-4954 (DAB), was
filed in the United States District Court for the Southern District of New
York asserting federal securities law claims against the Company, its
directors and certain of its officers, PDGE and the underwriters of the
Company's initial public offering.  The Klein action is brought as a purported
class action on behalf of all purchasers of the Company's common stock from
February 9, 1995, the effective date of the initial public offering, through
May 23, 1995.  The plaintiff alleges that the defendants issued or
participated in issuing a registration statement and prospectus which
contained material misstatements or omissions, which were relied upon by the
plaintiff.   Specifically, the plaintiff alleges that the defendants knew or
should have known that the Florida reimbursement program in which the Company
participates was operating at a deficit and was being revised to eliminate
funding of remediation activities for lower priority sites.  The plaintiff is
seeking certification of the action as a class action and rescission of the
purchase of shares of common stock by the members of the purported class or
statutory damages, as well as interest, attorneys' fees and other costs and
expenses.

On September 1, 1995, an answer was filed on behalf of the Company, its
officers and directors and PDGE which generally denied the plaintiff's claims.
The plaintiff has filed a motion for class certification which is pending.

The Company believes that the allegations are without merit or that there are
meritorious defenses to the allegations, and intends to defend the action
vigorously.  However, if the plaintiff is successful in its

<PAGE>  12

claims, a judgement rendered against the Company and the other defendants may
have a material adverse effect on the business of the Company.

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

An Information Statement was sent by the Company to its shareholders in
October 1996, in connection with a proposed change in the jurisdiction of
incorporation of the Company from the Commonwealth of Pennsylvania to the
State of Delaware (the "Re-incorporation") pursuant to an agreement and plan
of merger between PDG Remediation, Inc. and ICHOR Corporation, a Delaware
corporation.  As the consent of shareholders holding 59.5% of the votes
entitled to be cast was obtained, the action was approved and no further
consents were solicited.  No shareholders exercised their dissent rights with
respect to the Re-incorporation, which became effective in November 1996.

                             PART II
                             -------

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS

(a)  Market Information.  The Company's common stock is listed for trading on
NASDAQ under the symbol "PDG".  The following information reflects the high
and low sale prices per share as reported by NASDAQ since the Company's
listing in February 1995.
<TABLE>
<CAPTION>

Fiscal Quarter Ended                   High                  Low
--------------------               ------------         ------------
<S>                                <C>                  <C>
1995
April 30.......................... $       4.75         $       2.25
July 31...........................         2.50                 1.00
October 31........................         1.25                 0.50
January 31, 1996..................         1.13                 0.63

1996
April 30..........................         1.41                 0.98
July 31...........................         1.38                 0.75
September 30(1)...................         1.19                 0.56
December 31.......................         1.75                 0.63

1997
March 17..........................         1.63                 1.13

</TABLE>
------------

(1)  In September 1996, the Company changed its fiscal year end from January 31
     to December 31.

(b)  Shareholders.  At March 17, 1997, the Company had approximately 13
stockholders of record, some of which are securities clearing agencies and
intermediaries.

(c)  Dividends.  The Company has not paid dividends with respect to its common
stock and has no intention to pay dividends in the foreseeable future.

(d)  Recent Sales of Unregistered Securities.  In December 1996, the Company
acquired the McCook Loan from Logan for an aggregate purchase price of $2.4
million through the issuance of 2,500,000 shares of the Company's common stock
and a promissory note in the amount of $1.4 million, which


<PAGE>  13

matures on December 16, 1999 and bears interest at the rate of 8% per annum.
The common shares were issued in reliance on the exemption from registration
under section 4(2) of the Securities Act of 1933, as amended, and the rules
promulgated thereunder, as transactions not involving a public offering.

ITEM 6.  SELECTED FINANCIAL DATA

The following table reflects selected consolidated financial data for the
Company for the 11 months ended December 31, 1996 and the four fiscal years
ended January 31, 1996, 1995, 1994 and 1993.  The operations of the Company
have been restated for the fiscal years ended January 31, 1995, 1994 and 1993
to reflect GeoLogic as a discontinued operation.
<TABLE>
<CAPTION>
                      For the 11           For the Years Ended January 31,
                     Months ended    -----------------------------------------------
                  December 31, 1996         1996       1995(1)      1994      1993
                  -----------------  -----------------------------------------------
                            (Dollars in thousands,  except per share amounts)
<S>                     <C>            <C>         <C>          <C>        <C>
OPERATING DATA
Contract revenues...... $   4,050      $   4,779   $   9,361    $   5,346  $   3,758
Gross margin...........       994          1,386       2,568        1,791      1,125
Income (loss) from
 operations............    (1,211)          (858)        614            3        124
Other expense..........      (278)          (392)       (499)        (229)       (83)
Income (loss) from
 continuing operations.    (1,489)        (1,250)         84         (226)        29
Net (loss) income......    (1,399)        (2,858)        896          206         57

COMMON SHARE DATA
Income (loss) from
 continuing  operations
 per common share......     (0.58)         (0.51)       0.04        (0.12)      0.02
Net (loss) income per
 common share..........     (0.54)         (1.16)       0.48         0.11       0.03
Weighted average common
 shares outstanding....     2,586          2,456       1,870        1,870      1,870

BALANCE SHEET DATA
Working capital........     1,182          2,257       6,296        3,406      2,376
Total assets...........     6,608          5,614      10,824        6,045      6,926

Long-term obligations..     2,911             20       3,579        1,588          2
Total stockholders'
 equity................     1,987          2,438       2,995        2,239      2,551

</TABLE>
-----------------

(1)  Includes an extraordinary item related to the early extinguishment of debt
     totaling $222,000  ($0.12 per common share).

<PAGE>  14

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

The following discussion and analysis of the results of operations and the
financial condition of the Company for the 11 months ended December 31, 1996,
and the years ended January 31, 1996 and January 31, 1995 should be read in
conjunction with the consolidated financial statements and related notes
included elsewhere herein.  In September 1996, the Company changed its fiscal
year end from January 31 to December 31.  As a result, the comparison of the
11 months ended December 31, 1996 to the year ended January 31, 1996 is a
comparison between an 11 month period and a 12 month period.

11 Months Ended December 31, 1996 Compared to Year Ended January 31, 1996
-------------------------------------------------------------------------

Contract revenues for the 11 months ended December 31, 1996 decreased to $4.1
million from $4.8 million for the year ended January 31, 1996, primarily as a
result of the continued decline in revenues at the Company's Florida
remediation services operation due to changes in the EDI Program, the sale of
the Florida remediation services operation effective November 1, 1996 and the
sale of GeoLogic effective January 31, 1996.  The decrease in revenues was
partially offset by an increase in revenues under a large federal contract
with Jones, which accounted for approximately 43% of the Company's revenues in
the current period.  The Company's Florida operation provided 27% of the
Company's revenues in the 11 months ended December 31, 1996 compared to 61% in
the year ended January 31, 1996.

Contract costs for the period ended December 31, 1996 decreased to $3.1
million from $3.4 million for the period ended January 31, 1996.  The
Company's gross margin decreased to $1.0 million or 25% of revenues for the 11
months ended December 31, 1996 from $1.4 million or 29% of revenues for the
year ended January 31, 1996, primarily as a result of the reduction in
revenues and reduced margins at the Company's Florida remediation services
operation.

Selling, general and administrative expenses for both the 11 months ended
December 31, 1996 and the year ended January 31, 1996 were $2.2 million.  The
increase in the selling, general and administrative expenses is principally
due to higher legal and accounting costs associated with certain litigation
involving the Company, certain insurance costs, costs associated with a
proposed acquisition, and increased marketing efforts at the Company's Florida
remediation services operation prior to same being sold.

The Company reported a loss from operations of $1.2 million in the 11 months
ended December 31, 1996 compared to a loss of $0.9 million in the year ended
January 31, 1996.

Interest expense was $0.4 million in both the period ended December 31, 1996
and the period ended January 31, 1996, as a result of increased long-term debt
and an increase in amounts funded under the Sirrom Agreements (as hereinafter
defined) in the current period.  Other income was $0.1 million in the period
ended December 31, 1996, compared to $14,000 for the period ended January 31,
1996.

The Company had income from discontinued operations of $90,000 in the 11
months ended December 31, 1996 as a result of a reduction in the reserve for
operating losses for GeoLogic, which was sold effective January 31, 1996.  The
Company had a loss from discontinued operations of $0.8 million and a loss on
disposal of GeoLogic of $0.8 million for the year ended January 31, 1996.

The Company's net loss for the 11 months ended December 31, 1996 was $1.4
million or $0.54 per share compared to $2.9 million or $1.16 per share for the
year ended January 31, 1996.





<PAGE>  15

During the 11 months ended December 31, 1996, the Company had made some
progress towards the replacement of revenues lost due to the changes in the
EDI Program by increasing its backlog of high priority sites eligible under
the new Pre-Approval Program in the State of Florida.  However, delays under
the new program prevented the Company from commencing work on these high
priority sites.  As a result of the ongoing losses which the Company continued
to experience at its Florida remediation services operation, this operation
was sold for its approximate book value effective November 1, 1996 to Custom
Biologicals, Inc. of Boca Raton, Florida.

Year Ended January 31, 1996 Compared to January 31, 1995
--------------------------------------------------------

During the year ended January 31, 1996, the Company's contract revenues
decreased by approximately 49% to $4.8 million compared to $9.4 million for
the year ended January 31, 1995.  The Company experienced a significant
reduction of approximately 63% in contract revenues during the year ended
January 31, 1996 at its Florida remediation services operation due to the
changes in the EDI Program which substantially decreased the Company's
available backlog of sites upon which it was able to continue to perform work.
The Company's Florida operations provided 61% of the Company's revenues during
the year ended January 31, 1996 compared to 85% during the year ended January
31, 1995.  Contract revenues at the Company's Pennsylvania remediation
services operation increased by approximately 34% in the period ended January
31, 1996 compared to the period ended January 31, 1995, and partially offset
the reduction experienced at the Florida remediation services operation.  The
increase in contract revenues within the Pennsylvania remediation services
operation was principally due to the U.S. Navy subcontract with Jones.

The Company's gross margin decreased to $1.4 million in the year ended January
31, 1996 compared to $2.6 million in the year ended January 31, 1995, which is
attributable to the significantly lower contract revenues at the Florida
remediation services operation as a result of the EDI Program changes.  Gross
margins as a percentage of contract revenues at the Company's Florida
remediation services operation increased in the period ended January 31, 1996
compared to the period ended January 31, 1995.  The Company's gross margin at
its Pennsylvania remediation services operation in the year ended January 31,
1996 decreased on higher contract revenues principally due to lower margins on
certain fixed price contracts.

Selling, general and administrative expenses increased to $2.2 million in the
year ended January 31, 1996 from $2.0 million in the year ended January 31,
1995.  Although the Company implemented cost reductions at its Florida
remediation services operation, which included closing the Tallahassee office,
staff reductions at its Melbourne office and the reallocation of a portion of
its workforce to the Company's Pennsylvania remediation services operation,
these reductions were more than offset by increased marketing and bidding
activity in an effort to replace the revenues lost as a result of the EDI
Program changes.  The Pennsylvania remediation services operation also
experienced an increase in selling, general and administrative expenses in the
year ended January 31, 1996 compared to the year ended January 31, 1995
associated with increased bidding activity.  Selling, general and
administrative expenses associated with the Company's corporate office
remained constant when comparing the year ended January 31, 1996 and the year
ended January 31, 1995.

The Company had a loss from operations of $0.9 million in the year ended
January 31, 1996 compared to income from operations of $0.6 million in the
year ended January 31, 1995.

Interest expense decreased to $0.4 million in the period ended January 31,
1996 compared to $0.5 million in the period ended January 31, 1995.  The
Company's interest expense in the period ended January 31, 1995 included
$94,000 related to the amortization of the estimated fair market value of
warrants.  Although


<PAGE>  16

the Company's average interest rate was significantly lower in the period
ended January 31, 1996 compared to the period ended January 31, 1995 (11.5%
versus 14.7%), the average outstanding borrowings were fairly constant when
comparing the two periods.  In addition, the Company was required to pay
ongoing interest expense on certain receivables which were funded by a third
party.

As the Company had a loss in the period ended January 31, 1996, no income
taxes were provided.  The Company had an income tax provision from continuing
operations of $31,000 during the year ended January 31, 1995.

In connection with the sale of the thermal treatment facility of its
subsidiary, GeoLogic, the Company has reflected the operations of this entity
as discontinued for the year ended January 31, 1996 and the year ended January
31, 1995.  The loss associated with the operation of this facility totalled
$0.8 million in the year ended January 31, 1996 compared with income from
discontinued operations of $0.6 million in the year ended January 31, 1995.
The significant loss from operations related to the Company's thermal
treatment facility in the year ended January 31, 1996 is the direct result of
the substantial reduction in volume processed at the facility combined with a
significantly lower price realized per ton processed, which the Company feels
is indirectly attributable to the EDI Program changes and the corresponding
impact of these changes on the thermal treatment market in the State of
Florida.  The overall change in the thermal treatment market in the State of
Florida prompted the Company to sell the thermal treatment facility.  The
Company also recorded a loss on the disposition of the thermal treatment
facility of $0.8 million in the period ended January 31, 1996.

The Company had an extraordinary gain on the extinguishment of debt of $0.2
million in the year ended January 31, 1995.

The Company had a net loss of $2.9 million or $1.16 per share in the year
ended January 31, 1996 compared to net income of $0.9 million or $0.48 per
share for the year ended January 31, 1995.

Liquidity and Capital Resources
-------------------------------

At December 31, 1996, the Company's cash and cash equivalents totalled $0.6
million, a net increase of $0.2 million from $0.4 million at January 31, 1996.
At December 31, 1996, the Company had $1.3 million held in escrow, compared to
$1.0 million at January 31, 1996.

The Company currently maintains two separate agreements with Sirrom
Environmental Funding, LLC (the "Sirrom Agreements") which have enabled the
Company, to fund amounts billed under the EDI Program at the prime rate of
interest (as defined) plus 2% for amounts up to $0.8 million and prime plus 3%
for additional amounts up to $4.0 million.  The Company is advanced 100% of
amounts billed and is required to deposit 10% and 34%, respectively, of such
amounts into an escrow account to cover potential disallowances, future
interest costs, and a commitment fee.  At December 31, 1996, the Company had
been advanced approximately $4.8 million under the Sirrom Agreements.

In May 1996, the State of Florida passed legislation which provides for State
funding of the existing backlog under the EDI Program through the issuance of
bonds, thereby enabling reimbursement applications submitted under the EDI
Program to be paid on an accelerated basis.  However, accelerated payments are
to be discounted at the rate of 3.5% effective January 1, 1997, and the
present value of an application will be based upon the accelerated settlement
date of a reimbursement application rather than the original settlement date.
The Company anticipates that this process will include the early release of
the cash which the Company holds in escrow, and the termination of interest
obligations in the third or fourth quarter of



<PAGE>  17

1997.  The Company will not be able to determine the impact of discounting on
its operating results until a schedule of anticipated payment dates is
established.  However, the Company may be required to record an adjustment to
reflect the negative impact of the discounting on its results of operations
and financial condition.

In January 1997, the Company established a line of credit with Drummond in the
amount of $0.3 million.  The Company also established a line of credit in
January 1997 with another lender in the amount of $0.8 million to fund the
working capital requirements of the McCook Facility.

Net cash provided by operating activities was $0.4 million for the period
ended December 31, 1996, compared to $2.3 million for the period ended January
31, 1996.  Operating activities provided cash primarily as a result of the
Company's reduction in accounts receivables of $1.2 million in the 11 months
ended December 31, 1996.  In the year ended January 31, 1996, account
receivables were reduced by $3.3 million.

Investing activities used cash of approximately $83,000 in the period ended
December 31, 1996 compared to using cash of $58,000 in the period ended
January 31, 1996, primarily as a result of the purchase of property and
equipment of $115,000 and $58,000, respectively.

Financing activities used cash of $25,000 in the period ended December 31,
1996 compared to using cash of $1.9 million in the period ended January 31,
1996.  In the period ended January 31, 1996, the Company used proceeds from
its initial public offering and the refinancing of indebtedness under lines of
credit to make principal payments on certain indebtedness.

The Company believes that the cash generated from operations and its lines of
credit should enable the Company to meet its ongoing liquidity requirements.
The Company is closely monitoring its liquidity requirements and continues to
implement cost reductions and conserve cash as necessary.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements and supplementary data required with
respect to this Item 8, and as listed in Item 14 of this annual report, are
included in this annual report commencing on page 21.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE

Not applicable.

                             PART III
                             --------

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Incorporated by reference from the Company's definitive proxy statement to be
filed within 120 days of the end of the Company's fiscal year.


<PAGE>  18

ITEM 11.  EXECUTIVE COMPENSATION

Incorporated by reference from the Company's definitive proxy statement to be
filed within 120 days of the end of the Company's fiscal year.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

Incorporated by reference from the Company's definitive proxy statement to be
filed within 120 days of the end of the Company's fiscal year.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated by reference from the Company's definitive proxy statement to be
filed within 120 days of the end of the Company's fiscal year.

                             PART IV
                             -------

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
          8-K
                              INDEX

(a)  (1)  FINANCIAL STATEMENTS

          Independent Auditors' Report
          Report of Independent Auditors
          Consolidated Balance Sheets
          Consolidated Statements of Operations
          Consolidated Statements of Changes in Shareholders' Equity
          Consolidated Statements of Cash Flows
          Notes to Consolidated Financial Statements

     (2)  FINANCIAL STATEMENT SCHEDULES

          Independent Auditors' Report
          Schedule II - Valuation and Qualifying Accounts

          All other schedules have been omitted because they are not
          applicable or the required information is shown in the financial
          statements or notes thereto.

     (3)  LIST OF EXHIBITS

     2.1    Agreement and Plan of Merger dated October 1, 1996 between ICHOR
            Corporation and PDG Remediation, Inc. Incorporated by reference to
            Schedule 14C dated September 17, 1996.

     3.1    Articles of Incorporation.(1)

     3.2    Bylaws.(1)



<PAGE>  19

     10.1   Warrant Agency Agreement.(2)

     10.2   Form of Representative's Warrant Agreement between the Company and
            Coleman and Company Securities, Inc.(2)

     10.3   Loan Agreement between Drummond Financial Corporation (formerly
            CVD Financial Corporation) and ICHOR Services, Inc. (formerly PDG
            Environmental Services, Inc.) dated October 28, 1993 in the amount
            of $2,500,000.(2)

     10.4   Amended and Restated Loan Agreement between Drummond Financial
            Corporation (formerly CVD Financial Corporation) and ICHOR
            Services, Inc. (formerly PDG Environmental Services, Inc.) dated
            September 6, 1994 in the amount of $4,000,000.(2)

     10.5   Loan Modification dated February 8, 1995 among Drummond Financial
            Corporation (formerly CVD Financial Corporation), the Company and
            certain other companies.(2)

     10.6   Master Funding and Indemnification Agreement between ICHOR
            Services, Inc. (formerly PDG Environmental Services, Inc.) and
            Sirrom Environmental Funding, LLC dated August 21, 1995.
            Incorporated by reference to the Company's quarterly report on
            Form 10-Q for the quarter ended July 31, 1995.

     10.7   Master Funding and Indemnification Agreement between ICHOR
            Services, Inc. (formerly PDG Environmental Services, Inc.) and
            Sirrom Environmental Funding, LLC dated January 27, 1995.
            Incorporated by reference to the Company's quarterly report on
            Form 10-Q for the quarter ended October 31, 1995.

     10.8   Warrant Agreement between the Company and Sirrom Environmental
            Funding, LLC dated August 21, 1995.(1)

     10.9   Letter Agreements dated July 15, 1994 among J.A. Jones
            Construction Services Company, the Company and U.S. Navy Contract
            N62470-23-D-3033.(2)

     10.10  Subcontract Agreement between J.A. Jones Construction Services
            Company and ICHOR Services, Inc. (formerly PDG Environmental
            Services, Inc.).(2)

     10.11  Amended 1994 Stock Option Plan.(3)

     10.12  1995 Qualified Incentive Stock Option Plan.(3)

     10.13  Employment contract for John M. Musacchio dated November 30,
            1995.(1)

     10.14  Purchase Agreement dated as of January 31, 1996 between Specialty
            Environmental, Inc. and the Company.(1)

     10.15  Purchase Agreement dated December 13, 1996 between the Company and
            Logan International Corp.(4)

<PAGE>  20

     10.16  Order of Court of the Honorable Jack B. Schmeitterer of the United
            States Bankruptcy Court of the Northern District of Illinois,
            Eastern Division approving the sale of assets of Enviropur Waste
            Refining and Technology, Inc. to Ortek Inc. (formerly BC Ventures
            Limited).(4)

     10.17  Loan Agreement dated January 15, 1997 between Ortek Inc. and
            Volendam Investments Limited.

     10.18  Loan Agreement dated January 15, 1997 among Drummond Financial
            Corporation, the Company and ICHOR Services, Inc.

     11     Statement re computation of per share earnings.

     21     List of subsidiaries of the Registrant.

     23     Consent of Independent Auditors.

     27     Article 5 - Financial Data Schedule for the 11 months ended
            December 31, 1996.
---------------------

(1)  Incorporated by reference to the Company's Form 10-K dated
     January 31, 1996.
(2)  Incorporated by reference to the Company's registration statement
     on Form S-1 (No. 33-82092).
(3)  Incorporated by reference to ICHOR Corporation's Definitive Schedule
     14A dated July 8, 1996.
(4)  Incorporated by reference to the Company's Form 8-K dated
     December 17, 1996.

(b)  REPORTS ON FORM 8-K

Reports on Form 8-K were filed on the following dates reporting under the
indicated items:

Dated November 19, 1996

  Item 1.  Change in Control of Registrant.
  Item 5.  Other Events.

Dated December 17, 1996

  Item 1.  Change in Control of Registrant.
  Item 2.  Acquisition or Disposition of Assets.
  Item 7.  Financial Statements and Exhibits.

Form 8-K/A dated December 17, 1996

  Item 1.  Change in Control of Registrant.
  Item 7.  Financial Statements and Exhibits.

Dated January 10, 1996

  Item 4.  Changes in Registrant's Certified Accountant.
  Item 5.  Other Information.



<PAGE> 21

------------------------------------------------------------------------------
PETERSON SULLIVAN P.L.L.C.
601 Union Street  Suite 2300  Seattle WA  98101  (206) 382-7777 fax 382-7700
                                                Certified Public Accountants




                   INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Shareholders
Ichor Corporation and Subsidiaries


We have audited the consolidated balance sheet of Ichor Corporation and
Subsidiaries (formerly PDG Remediation, Inc.) as of December 31, 1996, and the
related consolidated statements of operations, changes in shareholders'
equity, and cash flows for the eleven months then ended.  These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audit.  The consolidated balance sheet of Ichor Corporation and
Subsidiaries as of January 31, 1996, and the consolidated statements of
operations, changes in shareholders' equity, and cash flows for the years
ended January 31, 1996 and 1995, were audited by other auditors whose report
dated March 8, 1996, (except for Note 3, the date of which was April 25,
1996), expressed an unqualified opinion on those statements.

We conducted our audit in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Ichor
Corporation and Subsidiaries as of December 31, 1996, and the results of their
operations and their cash flows for the eleven months then ended in conformity
with generally accepted accounting principles.


                                             /s/  Peterson Sullivan P.L.L.C.



February 21, 1997
Seattle, Washington


<PAGE>  22

------------------------------------------------------------------------------
ERNST & YOUNG LLP        One Oxford Centre                 Phone  412 644 7800
                         Pittsburgh, Pennsylvania  15219




                  REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Ichor Corporation

We have audited the accompanying consolidated balance sheet of Ichor
Corporation (formerly PDG Remediation, Inc.) (the "Company") as of January 31,
1996, and the related consolidated statements of operations, shareholder's
equity, and cash flows for each of the two years in the period ended January
31, 1996.  Our audits also included the accompanying financial statement
schedules.  These financial statements and schedules are the responsibility of
the Company's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Ichor Corporation (formerly PDG Remediation, Inc.) at January 31, 1996, and
the consolidated results of their operations and their cash flows for each of
the two years in the period ended January 31, 1996, in conformity with
generally accepted accounting principles.  Also, in our opinion, the related
financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.


                                                        /s/ Ernst & Young LLP

Pittsburgh, Pennsylvania
March 8, 1996, except for Note 3
  as to which the date is April 25, 1996






<PAGE>  23
                ICHOR CORPORATION AND SUBSIDIARIES
                 (Formerly PDG Remediation, Inc.)
                   CONSOLIDATED BALANCE SHEETS
              December 31, 1996 and January 31, 1996
                    (In Thousands of Dollars)
<TABLE>
<CAPTION>
                                                    December 31,      January 31,
                                                       1996              1996
                                                    ------------      ------------
<S>                                                 <C>               <C>
     ASSETS
Current Assets
  Cash and cash equivalents                         $        628      $        362
  Cash held in escrow                                      1,254               968
  Accounts receivable, less allowance for doubtful
    accounts of $690 and $724 at December 31, 1996
    and at January 31, 1996, respectively                    434             1,626
  Costs and estimated earnings in excess of billings
    on uncompleted contracts                                 419             2,320
  Prepaid expenses                                           157               137
                                                    ------------      ------------
      Total current assets                                 2,892             5,413
Property and Equipment, at cost                            3,674               180
Other Assets                                                  42                21
                                                    ------------      ------------
                                                    $      6,608      $      5,614
                                                    ============      ============
</TABLE>
<TABLE>
<CAPTION>
     LIABILITIES AND SHAREHOLDERS' EQUITY
<S>                                                 <C>               <C>
Current Liabilities
  Accounts payable                                  $        531      $      1,060
  Other accrued liabilities                                  282               539
  Accrued loss on discontinued operations                      -               140
  Due to affiliate                                           420                 -
  Due to former parent                                         -               117
  Current portion of long-term debt                          477             1,300
                                                    ------------      ------------
     Total current liabilities                             1,710             3,156

Long-Term Liabilities
  Debt                                                     1,956                20
  Other                                                      955                 -
                                                    ------------      ------------
                                                           2,911                20
                                                    ------------      ------------
     Total Liabilities                                     4,621             3,176

Shareholders' Equity
  Common stock, $.01 par value; 30,000,000
    shares authorized; shares issued 4,970,320
    at December 31, 1996 and 2,470,320 at
    January 31, 1996                                          50                25
  Preferred stock, $.01 par value; 5,000,000
    shares authorized; none issued and outstanding             -                 -
  Additional paid-in capital                               5,743             4,768
  Retained deficit                                        (3,754)           (2,355)
                                                    ------------      ------------
                                                           2,039             2,438
Less cost of 47,600 shares of common stock held
  in treasury                                                (52)                -
                                                    ------------      ------------
                                                           1,987             2,438
                                                    ------------      ------------
                                                    $      6,608      $      5,614
                                                    ============      ============
</TABLE>
          See Notes to Consolidated Financial Statements

<PAGE>  24
                ICHOR CORPORATION AND SUBSIDIARIES
                 (Formerly PDG Remediation, Inc.)
              CONSOLIDATED STATEMENTS OF OPERATIONS
      Eleven Months Ended December 31, 1996 and Years Ended
                    January 31, 1996 and 1995
     (In Thousands of Dollars, Except for Per Share Amounts)

<TABLE>
<CAPTION>
                                      December 31,     January 31,      January 31,
                                          1996             1996             1995
                                      ------------     ------------     ------------
<S>                                   <C>              <C>              <C>
Contract revenues                     $      4,050     $      4,779     $      9,361

Contract costs                               3,056            3,393            6,793
                                      ------------     ------------     ------------
                                               994            1,386            2,568
Selling, general and
  administrative expenses                    2,205            2,244            1,954
                                      ------------     ------------     ------------

Income (loss) from operations               (1,211)            (858)             614

Other income (expense)
   Interest expense                           (423)            (406)            (418)
   Amortization of estimated fair
     value of warrants                           -                -              (94)
   Other                                       145               14               13
                                      ------------     ------------     ------------
                                              (278)            (392)            (499)
                                      ------------     ------------     ------------
Income (loss) from continuing
  operations before income taxes            (1,489)          (1,250)             115
Provision for income taxes                       -                -               31
                                      ------------     ------------     ------------
Income (loss) from continuing
  operations before extraordinary
  item                                      (1,489)          (1,250)              84

Discontinued operations
  Income (loss) from operations of
    soil remediation facility (less
    applicable income taxes of $159
    for the year ended January 31, 1995)        90             (768)             590
  Loss on disposal of soil remediation
    facility                                     -             (840)               -
                                      ------------     ------------     ------------
Income (loss) from discontinued
  operations                                    90           (1,608)             590
                                      ------------     ------------     ------------
Income (loss) before extraordinary
  item                                      (1,399)          (2,858)             674

Extraordinary item, gain on
  extinguishment of debt(less
  applicable income taxes of $60)                -                -              222
                                      ------------     ------------     ------------
Net income (loss)                     $     (1,399)    $     (2,858)    $        896
                                      ============     ============     ============
Net income (loss) per common share
  Income (loss) from continuing
    operations                        $       (.58)    $       (.51)    $        .04
  Discontinued operations                      .04             (.65)             .32
  Extraordinary item                             -                -              .12
                                      ------------     ------------     ------------
                                      $       (.54)    $      (1.16)    $        .48
                                      ============     ============     ============
</TABLE>
          See Notes to Consolidated Financial Statements


<PAGE>  25
                ICHOR CORPORATION AND SUBSIDIARIES
                 (Formerly PDG Remediation, Inc.)
    CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
      Eleven Months Ended December 31, 1996 and Years Ended
                    January 31, 1996 and 1995
                    (In Thousands of Dollars)
<TABLE>
<CAPTION>
                       Number             Additional               Retained
                     of Common   Common    Paid-in     Treasury    Earnings
                      Shares     Stock     Capital      Stock     (Deficit)    Total
                     ---------   ------   ----------   --------   ---------   --------
<S>                  <C>         <C>      <C>          <C>        <C>         <C>
Balance at January
  31, 1994           1,870,320   $   19   $    2,613   $      -   $    (393)  $ 2,239

Net Income for year
  ended January 31,
  1995                                -            -          -         896       896
Revaluation of fair
  market value of
  375,000 warrants                    -         (140)         -           -      (140)
                     ---------   ------   ----------   --------   ---------   -------
Balance at January
  31, 1995           1,870,320       19        2,473          -         503     2,995

Net loss for year
  ended January 31,
  1996                                -            -          -      (2,858)   (2,858)
Common shares sold
  in public offering   600,000        6        2,145          -           -     2,151
Warrants sold in
  initial public
  offering                            -          100          -           -       100
Issuance of 100,000
  warrants                            -           50          -           -        50
                     ---------   ------   ----------   --------   ---------   -------

Balance at January
  31, 1996           2,470,320       25        4,768          -      (2,355)    2,438

Net loss for eleven
  months ended
  December 31, 1996                   -            -          -      (1,399)   (1,399)
Common shares issued
  in the acquisition
  of wholly-owned
  subsidiary         2,500,000       25          975          -           -     1,000
Repurchase of 47,600
  shares of common
  stock held in
  treasury             (47,600)       -            -        (52)          -       (52)
                     ---------   ------   ----------   --------   ---------   -------
Balance at December
  31, 1996           4,922,720   $   50   $    5,743   $    (52)  $  (3,754)  $ 1,987
                     =========   ======   ==========   ========   =========   =======

</TABLE>


          See Notes to Consolidated Financial Statements

<PAGE>  26
                ICHOR CORPORATION AND SUBSIDIARIES
                 (Formerly PDG Remediation, Inc.)
              CONSOLIDATED STATEMENTS OF CASH FLOWS
Eleven Months Ended December 31, 1996 and Years Ended January 31, 1996 and 1995
                    (In Thousands of Dollars)
<TABLE>
<CAPTION>
                                      December 31,     January 31,      January 31,
                                          1996             1996             1995
                                      ------------     ------------     ------------
<S>                                   <C>              <C>              <C>
Cash Flows from Operating Activities
  Net income (loss)                   $     (1,399)    $     (2,858)    $        896
  Adjustments to reconcile net income
    (loss) to cash flows from operating
    activities
    Provision for disposal of
      discontinued operation                     -              840                -
    Depreciation and amortization              189              239              224
    Provision for losses on accounts
      receivables                               40              387              225
    Gain on settlement of insurance
      company accrual                         (149)               -                -
    Extraordinary item                           -                -             (166)
    Other                                       14               (8)              96
  Changes in current assets and liabilities
    Cash held in escrow                       (286)            (817)            (151)
    Accounts receivable                      1,176            3,279           (3,235)
    Costs and estimated earnings in excess
      of billings on uncompleted contracts   1,901            2,063           (2,010)
    Borrowings from (repayments to)
      former parent                           (117)            (541)             758
    Prepaid expenses                           (40)            (142)             (40)
    Accounts payable                          (530)              23              475
    Billings in excess of costs and estimated
      earnings on uncompleted contracts          -             (126)              46
    Advances from parent                       193                -                -
    Net assets of discontinued operations        -             (263)             (36)
    Other accrued liabilities                 (597)             202                7
    Other                                      (21)              (3)               2
                                      ------------     ------------     ------------
       Net cash provided by (used in)
         operating activities                  374            2,275           (2,909)

Cash Flows from Investing Activities
  Purchase of property and equipment          (115)             (58)            (134)
  Proceeds from sale of property and
    equipment                                   32                -              116
                                      ------------     ------------     ------------
       Net cash used in investing
         activities                            (83)             (58)             (18)

Cash Flows from Financing Activities
  Proceeds from issuance of common shares        -            2,151                -
  Proceeds from warrants sold                    -              100                -
  Purchase of stock held in treasury           (52)               -                -
  Proceeds from debt                            51            3,676            3,688
  Principal payments on debt                   (24)          (7,789)            (862)
                                      ------------     ------------     ------------
       Net cash provided by (used in)
         financing activities                  (25)          (1,862)           2,826
                                      ------------     ------------     ------------
Increase (decrease) in cash and
  cash equivalents                             266              355             (101)
Cash and cash equivalents, beginning
  of year                                      362                7              108
                                      ------------     ------------     ------------
Cash and cash equivalents, end
  of year                             $        628     $        362     $          7
                                      ============     ============     ============
</TABLE>
          See Notes to Consolidated Financial Statements

<PAGE>  27

                ICHOR CORPORATION AND SUBSIDIARIES
                 (Formerly PDG Remediation, Inc.)
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     (In Thousands of Dollars, Except for Per Share Amounts)


NOTE 1.  THE CORPORATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

History
-------

Ichor Corporation and Subsidiaries, formerly PDG Remediation, Inc. ("the
Corporation"), operated as a wholly-owned subsidiary of PDG Environmental,
Inc. ("PDGE") until February 1995, when 1,000,000 shares of the Corporation's
common stock and 1,000,000 warrants were sold to the public.  The Corporation
sold 600,000 newly issued common shares and 1,000,000 warrants and received
net proceeds of approximately $2,251.  PDGE sold 400,000 shares of the
Corporation's common stock it held which reduced its interest to approximately
59.5%.  The warrants entitle the holder to purchase one share of common stock
at a $6 exercise price.  The warrants may be exercised at any time and expire
on February 8, 2000.

Effective July 31, 1996, Drummond Financial Corporation ("Drummond") acquired
PDGE's interest in the Corporation.  The acquisition was part of a plan by
Drummond's parent to financially restructure Drummond's loans outstanding to
other entities.  As part of this acquisition, the Corporation changed its year
end to December 31 from January 31.

In December 1996, another subsidiary of Drummond's parent, Logan International
Corporation ("Logan"), acquired a 50.3% interest in the Corporation as part of
the transaction described in Note 2.  At this point, Drummond's interest was
reduced to 29.6%.

Business Activities
-------------------

The Corporation is involved in the environmental industry, providing
environmental remediation services to the public and private sectors and
recycling waste oil at a facility located in Illinois.  Remediation services
include assisting clients located primarily in the eastern U.S. in complying
with environmental laws and regulations, such as those concerning leaking
underground storage tanks and contaminated industrial facilities.














<PAGE>  28

NOTE 1.  (CONTINUED)

Change in Fiscal Year
---------------------


The change in the Corporation's fiscal year end resulted in an eleven month
period in 1996.  Unaudited pro forma condensed consolidated results of
operations for the comparable 1995 and 1994 periods are as follows:
<TABLE>
<CAPTION>
                                      Eleven months ended December 31,
                                  1996             1995             1994
                              ------------     ------------     ------------
<S>                           <C>              <C>              <C>
Contract revenues             $      4,050     $      4,645     $      8,776
Contract costs                      (3,056)          (3,172)          (6,520)
Selling, general and
  administrative expenses           (2,205)          (1,974)          (1,818)
Other expenses, net                   (278)            (359)            (442)
Provision for income taxes               -                -              (36)
                              ------------     ------------     ------------
Income (loss) from continuing
  operations                        (1,489)            (860)             (40)
Discontinued operations                 90             (732)             525
Extraordinary item                       -                -              222
                              ------------     ------------     ------------
Net income (loss)             $     (1,399)    $     (1,592)    $        707
                              ============     ============     ============

Net income (loss) per common share
  Loss from continuing
    operations                $       (.58)    $       (.35)    $       (.02)
  Discontinued operations              .04             (.30)             .28
  Extraordinary item                     -                -              .12
                              ------------     ------------     ------------
                              $       (.54)    $       (.65)    $        .38
                              ============     ============     ============
</TABLE>

The unaudited proforma results have been prepared for comparability purposes
only and may not necessarily reflect the results of operations had the 1995
and 1994 fiscal periods actually included eleven months.

Principles of Consolidation
---------------------------

The consolidated financial statements include the accounts of the Corporation
and its subsidiaries.  Significant intercompany accounts and transactions of
continuing operations have been eliminated.
















<PAGE>  29

NOTE 1.  (CONTINUED)

Methods of Accounting for Contracts
-----------------------------------

Revenues for environmental remediation services on lump sum contracts are
recognized on the percentage-of-completion method, measured by the percentage
of costs incurred to date of total estimated contract costs.  Revenues for
environmental remediation services on time-and-materials contracts are
recognized based on estimated multipliers applied to cost incurred to date.
These margins are adjusted to actual as the contract is completed.

Contract costs include direct labor and material costs and those indirect
costs related to contract performance, such as supplies, tools, depreciation,
repairs and insurance.  Selling, general and administrative costs are charged
to expense as incurred.  Provisions for estimated losses on uncompleted
contracts are recognized in the period in which such losses are determined.
Because of the inherent uncertainties in estimating costs, it is at least
reasonably possible that the estimates used may change in the near term.

Cash and Cash Equivalents
-------------------------

Cash and cash equivalents consists principally of demand deposits at
commercial banks.  Cash balances are occasionally in excess of federally
insured amounts.

Cash Held in Escrow
-------------------

Cash held in escrow represents amounts which are subject to withdrawal
restrictions and principally relate to a funding arrangement with Sirrom
Environmental Funding, LLC, described in Note 8, and work performed as a
subcontractor to certain companies.

Environmental Conservation
--------------------------

Liabilities for environmental conservation are recorded when it is probable
that obligations have been incurred and the amounts can be reasonably
estimated.  Any potential recoveries of such liabilities are recorded when
there is an agreement with a reimbursing entity.

Taxes on Income
---------------

The Corporation accounts for income taxes under an asset and liability
approach that requires the recognition of deferred tax assets and liabilities
for expected future tax consequences of events that have been recognized in
the Corporation's financial statements or tax returns.  In estimating future
tax consequences, the Corporation generally considers all expected future
events other than enactments of changes in the tax laws or rates.






<PAGE>  30


NOTE 1.  (CONTINUED)

Earnings Per Share
------------------

Earnings or loss per common share has been computed based upon the weighted
average number of common shares outstanding for the eleven months ended
December 31, 1996, and the years ended January 31, 1996 and 1995.  Stock
options and warrants have not been reflected as exercised for purposes of
computing earnings or loss per share since the exercise of such options and
warrants would be antidilutive.  The weighted average number of shares was
2,585,590, 2,456,000 and 1,870,320 for the eleven months ended December 31,
1996 and the years ended January 31, 1996 and 1995, respectively.

Depreciation
------------

Property and equipment are depreciated over the estimated useful lives of the
assets using the straight-line method.  Permits are amortized over a 40-year
period representing their estimated economic lives.

Use of Estimates
----------------

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes.  Actual results could differ from those estimates.

Stock-Based Compensation
------------------------

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation," encourages, but does not require, companies to record
compensation cost for stock-based employee compensation plans at fair value.
The Corporation has chosen to account for stock-based compensation using
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees."  Accordingly, compensation cost for stock options is measured as
the excess, if any, of the quoted market price of the Corporation's stock at
the date of the grant over the amount an employee is required to pay for the
stock.

Reclassifications
-----------------

Certain reclassifications have been made to the prior year financial
statements to conform with the current year presentation.

NOTE 2.  ACQUISITION

In December 1996, the Corporation acquired all of the outstanding common
shares of a corporation which currently owns the waste oil recycling facility.
The subsidiary was acquired from Logan in








<PAGE>  31


NOTE 2.  (CONTINUED)

exchange for 2.5 million shares of the Corporation's common stock and a
promissory note in the amount of $1,425.  The cost of the assets acquired in
this nonmonetary transaction was approximately $3,619 and approximately $1,194
in liabilities were assumed.  Because of the bankruptcy proceeding which
included the facility, as discussed below, no reliable financial information
with respect to the facility's results of operations are available prior to
December 21, 1996.

The acquired subsidiary's assets and liabilities include only those which
relate to the waste oil recycling facility.  The facility had originally been
a part of an entity which declared bankruptcy.  That entity had a secured loan
outstanding from Drummond when it declared bankruptcy.  Through a series of
transactions, Logan acquired the subsidiary which held the loan.  The loan was
valued at $2,425 based primarily on the independent appraisal of the waste oil
recycling facility.  The subsidiary acquired the facility and its related
liabilities from the bankrupt estate on December 20, 1996.  The facility was
not operated by the Corporation during 1996.


NOTE 3.  DISCONTINUED OPERATION

In prior years, the Corporation provided services associated with the
decontamination of petroleum contaminated soils at its facility in Florida.
The services were supported by a state-sponsored program ("the Florida
program").  Because of significant changes in the Florida program, the
Corporation developed a plan during 1996 to exit the Florida soil remediation
market.  As a result, the Corporation has accounted for this segment of its
business as a discontinued operation as of January 31, 1996.

The Corporation recorded a loss on disposition of $840 in the year ended
January 31, 1996, comprised of a write-off of the segment's net assets and a
$140 provision for costs associated with disposition.  Net sales of the
segment were $1,500 and $3,900 for the years ended January 31, 1996 and 1995,
respectively.  The income amount at December 31, 1996, results from a
reduction in the reserve for operating losses on the discontinued operation
established at January 31, 1996.


NOTE 4.  ACCOUNTS RECEIVABLE AND MAJOR CUSTOMERS

During the eleven months ended December 31, 1996, revenues from three
customers were 66% of total revenues.  During the year ended January 31, 1996,
revenues from one customer were 24% of total revenues.  For the year ended
January 31, 1995, no single customer contributed 10% or more of the
Corporation's total revenues.  It is the Corporation's policy not to require
collateral with respect to outstanding receivables.  The Corporation
continuously reviews the creditworthiness of customers and, when necessary,
requests collateral to secure the performance of services.


<PAGE>  32

NOTE 4.  (CONTINUED)

The Corporation has contracts to provide services involving the remediation of
underground storage tank sites for private customers under the Florida
program.  Receivables under this program at December 31, 1996, January 31,
1996 and January 31, 1995, totaled $771, $2,000 and $4,942, respectively.
During the eleven months ended December 31, 1996, and the years ended January
31, 1996 and 1995, revenues equal to 19.9%, 60.9% and 79.7%, respectively, of
total revenues were attributable to this program.

The Corporation performed services as a subcontractor to companies with
respect to the Florida program.  In certain circumstances, the Corporation has
provided an indemnification for any amounts which are not reimbursed.  At
December 31, 1996, January 31, 1996 and January 31, 1995, the Corporation had
provided such indemnifications for $4,596, $7,011 and $3,137, respectively, of
work performed pursuant to such subcontractor arrangements.  The Corporation
has provided for any potential future losses associated with these
indemnifications as part of its allowance for doubtful accounts.


NOTE 5.  TRANSACTIONS WITH AFFILIATES

In addition to the transactions with Drummond and Logan discussed in Notes 1
and 2, the Corporation has advances from Drummond that total $420 at December
31, 1996.  The advances are expected to be paid in March 1997.

During the year ended January 31, 1996, PDGE provided the Corporation with
certain management services principally related to insurance coverage and the
rental of office space.  At January 31, 1996, the Corporation had an
outstanding payable of $117 to PDGE related to these services and the
settlement of intercompany balances subsequent to the initial public offering.
This amount was paid during the eleven months ended December 31, 1996.

During the years ended January 31, 1996 and 1995, PDGE provided certain
accounting and executive services on the basis of a management services
agreement between the entities.  The charge for such services was $51 for the
year ended January 31, 1996, and $814 for the year ended January 31, 1995.
This relationship was terminated during the year ended January 31, 1996.


<PAGE>  33

NOTE 6.  COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS
<TABLE>
<CAPTION>
                                            December 31,          January 31,
                                               1996                  1996
                                           ------------           -----------
<S>                                        <C>                    <C>
Revenues earned on uncompleted contracts   $      3,801           $     4,539

Less billings to date                             3,382                 2,219
                                           ------------           -----------
                                           $        419           $     2,320
                                           ============           ===========
</TABLE>

At December 31, 1996 and January 31, 1996, net under billings included $116
and $2,062, respectively, of amounts which were to be billed upon the
completion of certain program tasks as defined under the Florida program.


NOTE 7.  PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
                                            December 31,          January 31,
                                               1996                  1996
                                           ------------           -----------
<S>                                        <C>                    <C>
Land, building and equipment               $      2,291           $       617
Permits                                           1,750                     -
                                           ------------           -----------
                                                  4,041                   617
Less accumulated depreciation                      (367)                 (437)
                                           ------------           -----------
                                           $      3,674           $       180
                                           ============           ===========
</TABLE>


NOTE 8.  LINES OF CREDIT

On January 27, 1995, a wholly-owned subsidiary of the Corporation entered into
a credit agreement with Sirrom Environmental Funding, LLC, ("the Sirrom
Agreement") which provided $750 of funding in connection with clean-up
activities under the Florida program.  The Sirrom Agreement enabled the
Corporation to fund the amounts which the Corporation billed under the Florida
program at the prime rate of interest, as defined, plus 2%.  The ability to
draw on additional funding under the Sirrom Agreement expires on January 27,
1997.  The Corporation is advanced 100% of amounts billed, and is required to
deposit 10% into an escrow account to cover potential disallowances.  As of
December 31, 1996, and January 31, 1996, funding under this program was
approximately at its maximum level.


<PAGE>  34

NOTE 8.  (CONTINUED)

On August 21, 1995, a wholly-owned subsidiary of the Corporation entered into
a second credit agreement with Sirrom Environmental Funding, LLC ("Second
Sirrom Agreement"), which provided $4,000 of funding relative to unbilled
amounts under the Florida program.  The Second Sirrom Agreement, which expires
on August 21, 1997, enabled the Corporation to fund amounts billed at the
prime rate of interest, as defined, plus 3%.  Although the Corporation is
advanced 100% of amounts billed, it is required to deposit 34% into an escrow
account to cover potential disallowances, future interest costs, and a
commitment fee of 2% of the total funding provided.  The Corporation also
issued a warrant to purchase 100,000 shares of the Corporation's common stock
to Sirrom Environmental Funding, LLC at an exercise price of $1.37 per share
in conjunction with the execution of the Second Sirrom Agreement.  The warrant
expires on January 31, 1999.  The Corporation has recorded $50 as the
estimated fair market value of the warrant.  As of December 31, 1996, and
January 31, 1996, the Corporation was advanced approximately $4,000 and $1,868
under the Second Sirrom Agreement, respectively.

The Corporation has a commitment for a $750 line of credit from another lender
which was established in 1997.


NOTE 9.  LONG-TERM DEBT
<TABLE>
<CAPTION>
                                            December 31,          January 31,
                                               1996                  1996
                                           ------------           -----------
<S>                                        <C>                    <C>
Note payable to Logan as discussed in
Note 2, due December 1999, interest at
8% payable monthly, collateralized by
waste oil recycling facility               $      1,425           $         -

Amounts due to an insurance company in
monthly payments of $38.  No interest is
charged on this debt.  No interest has
been imputed since the amount is not
deemed material                                     945                 1,284

Other notes payable with interest rates
ranging from 6.75% to 14.3% with various
maturities                                           63                    36
                                           ------------           -----------
                                                  2,433                 1,320

Less current portion                                477                 1,300
                                           ------------           -----------
                                           $      1,956           $        20
                                           ============           ===========
</TABLE>


<PAGE>  35


NOTE 9.  (CONTINUED)

Principal maturities for the years ending December 31 are as follows:
<TABLE>
                   <S>            <C>
                   1997           $       477
                   1998                   476
                   1999                 1,477
                   2000                     3
                                  -----------
                   Total          $     2,433
                                  ===========
</TABLE>


The Corporation paid approximately $442, $643 and $767 for interest costs
during the eleven months ended December 31, 1996, and the years ended January
31, 1996 and 1995.

The fair value of the note payable to Logan and other notes payable are
estimated to approximate the recorded values.  The fair value of the amount
due to an insurance company is estimated to be $895 at December 31, 1996.
Fair values are based on the terms of the related debt.


NOTE 10.  OTHER LONG-TERM LIABILITIES

Other long-term liabilities consist of a reserve for environmental liability
and federal taxes.

The reserve for environmental liability cost amounts to $800 at December 31,
1996 and represents expected soil and groundwater remediation costs at the
waste oil recycling facility.  However, the ultimate cost may differ from the
amount presently accrued.


NOTE 11.  INCOME TAXES

The Corporation had net operating loss carryforwards of approximately $4,600
and $2,800 at December 31, 1996, and January 31, 1996, respectively.  Of the
$4,600 carryover as of December 31, 1996, $500 expires in 2004, $1,800 expires
in 2010, and $2,300 expires in 2011.  The Corporation's utilization of the
losses will be limited to the long-term exempt rate applied to the value of
the Corporation on an annual basis.

For financial reporting purposes, a valuation allowance of approximately
$1,945 and $1,003 was recognized at December 31, 1996 and January 31, 1996,
respectively, to offset the deferred tax asset related to these carryforwards
and other deferred tax assets.  The valuation allowance increased during the
year ended January 31, 1996, and the eleven months ended December 31, 1996,
due to the uncertainty of utilizing operating tax losses in future years.


<PAGE>  36

NOTE 11.  (CONTINUED)

Deferred income taxes reflect the net tax effects of temporary differences
between the amount of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes.  The significant components of
the Corporation's deferred tax assets as of December 31, 1996, and January 31,
1996, are as follows:
<TABLE>
<CAPTION>                                  December 31,           January 31,
                                               1996                  1996
                                           ------------           -----------
<S>                                        <C>                    <C>
Deferred tax liabilities:
  Tax over book depreciation               $          -          $        414
Deferred tax assets:
  Accounts receivable allowance                     213                   284
  Net operating loss carryforwards                1,732                 1,046
  Other                                               -                    87
                                           ------------           -----------
  Net deferred tax assets before
    valuation allowance                           1,945                 1,003

  Valuation allowance for deferred
     tax assets                                  (1,945)               (1,003)
                                           ------------           -----------
  Net deferred tax assets                  $          -           $         -
                                           ============           ===========
</TABLE>

Significant components of the provision for income taxes on continuing
operations are as follows:
<TABLE>
<CAPTION>                        Eleven
                              months ended
                               December 31,       Years ended January 31,
                                   1996              1996             1995
                              ------------      ------------      ------------
<S>                           <C>               <C>               <C>
Current:
  Federal                     $          -      $          -      $          8
  State                                  -                 -                23
                              ------------      ------------      ------------
  Total income tax provision  $          -      $          -      $         31
                              ============      ============      ============
</TABLE>

The reconciliation of income tax computed at the federal statutory rates to
income tax expense is as follows:
<TABLE>
<CAPTION>
                                Eleven
                              months ended
                               December 31,     Years ended January 31,
                                   1996            1996           1995
                              ------------    ------------    ------------
<S>                           <C>             <C>             <C>
Tax at statutory rate         $      (532)    $       (425)   $         39
Limitation (benefit) of net
  operating loss utilization          915              423             (24)
Other                                (383)               2              16
                              ------------    ------------    ------------
                              $          -    $          -    $         31
                              ============    ============    ============
</TABLE>


<PAGE>  37

NOTE 12.  STOCK OPTION PLANS

1994 Amended Stock Option Plan
------------------------------

The Corporation maintains a stock option plan which provides for the issuance
of up to 350,000 shares of the Corporation's common stock to employees and
non-employee directors.  Options to purchase 137,500 shares were granted on
July 21, 1994, at an option price of $5.00 per share, of which options to
purchase 93,500 shares were fully vested.  The remaining options vest one
third each year following the date of grant.

Options to purchase an additional 15,000 shares of the Corporation's common
stock were granted on May 23, 1995, at an exercise price of $1.91 per share
and options to purchase 5,000 shares of the Corporation's common stock were
granted on December 13, 1995, at an exercise price of $.75 per share.  These
options vest one third each year following the date of grant.

On October 2, 1995, pursuant to the terms of the stock option plan, options to
purchase 2,500 shares of the Corporation's common stock were granted to the
Corporation's non-employee directors at an exercise price of $1.34 per share.
These options vested on the date of grant.

On December 13, 1995, the Corporation's outstanding options priced at $1.34,
$1.91 and $5.00 per share were repriced to $.75 per share.  After repricing,
the fair value of options granted during the year ended January 31, 1996, was
$109 (weighted average fair value per option of $.74).

On August 22, 1996, pursuant to the terms of the stock option plan, options to
purchase 2,500 shares of the Corporation's common stock were granted to
certain non-employee directors of the Corporation at an exercise price of
$1.00 per share.  These options vested on the date of the grant.

On September 3, 1996, options to purchase 40,000 shares of the Corporation's
common stock were granted to certain non-employee directors at an exercise
price of $1.1875 per share.  These options vested at the date of the grant.
The fair value of options granted during the eleven months ended December 31,
1996, was $50 (weighted average fair value per option of $1.18).








<PAGE>  38

NOTE 12.  (CONTINUED)

The following table summarizes information with respect to the 1994 Amended
Stock Option Plan.
<TABLE>
<CAPTION>
                                                                 Weighted*
                                                                 Average
                                                Number of        Exercise
                                                 Shares           Price
                                                ---------        ---------
<S>                                             <C>              <C>

Outstanding at January 31, 1994                         -        $       -
Granted                                           137,500              .75
                                                ---------
Outstanding at January 31, 1995                   137,500              .75
Granted                                            22,500              .75
Canceled - Reusable                              (12,500)              .75
                                                ---------

Outstanding at January 31, 1996                   147,500              .75
Granted                                            42,500             1.18
Canceled - Reusable                               (10,500)             .75
                                                ---------
Outstanding at December 31, 1996                  179,500        $     .81
                                                =========        =========

Exercisable at December 31, 1996                  160,330        $     .86
                                                =========        =========
Reserved for future grants at
  December 31, 1996                               170,500
                                                =========
</TABLE>

* As repriced at December 13, 1995.

All options have an expiration date ten years after issuance.  No options have
been exercised.

1995 Qualified Incentive Stock Option Plan
------------------------------------------

The Corporation's board of directors approved a second stock option plan on
August 15, 1996.  This plan provides for the issuance of up to 150,000 shares
of the Corporation's common stock to key employees.  Options to purchase
150,000 shares were granted on August 15, 1996, at an option price of $.75 per
share.  All these options immediately vested.  Due to a termination, options
to purchase 25,000 shares were relinquished.  These options are reserved for
future grants.  The fair value of options granted during the eleven months
ended December 31, 1996, was $89 (weighted average fair value per option of
$.72).









<PAGE>  39

NOTE 12.  (CONTINUED)

The following table summarizes information with respect to the 1995 Qualified
Incentive Stock Option Plan:
<TABLE>
<CAPTION>
                                                                 Weighted*
                                                                 Average
                                                Number of        Exercise
                                                 Shares           Price
                                                ---------        ---------
<S>                                             <C>              <C>

Outstanding at January 31, 1996                         -        $       -
Granted                                           150,000              .75
Canceled - Reusable                               (25,000)             .75
                                                ---------

Outstanding at December 31, 1996                  125,000        $     .75
                                                =========        =========

Exercisable at December 31, 1996                  125,000        $     .75
                                                =========        =========

Reserved for future grants at
  December 31, 1996                                25,000
                                                =========
</TABLE>

All options have an expiration date ten years after issuance.  No options have
been exercised.

Compensation
------------

For both the 1994 Amended Stock Option Plan and the 1995 Qualified Incentive
Stock Option Plan, when options are granted, or the exercise price is
adjusted, the exercise price cannot be less than the fair market value of the
Corporation's common stock (as defined).  In accordance with Accounting
Principles Board Opinion No. 25, no compensation expense was recognized.  Had
compensation expense been recognized on the basis of fair value pursuant to
Statement of Financial Accounting Standards No. 123, net loss and per share
data would have been adjusted as follows:
<TABLE>
<CAPTION>                                  December 31,           January 31,
                                               1996                  1996
                                           ------------           -----------
<S>                                        <C>                    <C>
Net loss
-----------------
    As reported                            $     (1,399)          $    (2,858)
                                           ============           ===========
    Pro forma                              $     (1,551)          $    (2,953)
                                           ============           ===========

Per share data
-----------------
    As reported                            $       (.54)          $     (1.16)
                                           ============           ===========

    Pro forma                              $       (.60)          $     (1.20)
                                           ============           ===========
</TABLE>



<PAGE>  40


NOTE 12.  (CONTINUED)

The fair value of each option granted is estimated on the grant date using the
Black Scholes model.  The assumptions used in calculating fair value are as
follows:

     Risk-free interest rate              5.0%
     Expected life of the options         10 years
     Expected volatility                  111.5%
     Expected dividend yield                0.0%


NOTE 13.  COMMITMENTS AND CONTINGENCIES

The Corporation has been named as a defendant in a purported class action
lawsuit filed in U.S. Federal Court involving all persons and entities who
purchased the Corporation's common stock from February 9, 1995, the effective
date of the initial public offering, through May 23, 1995.  The plaintiff is
seeking certification of the action as a class action and recision for the
purchase of shares of common stock by members of the purported class or
statutory damages, as well as interest, attorneys' fees and other costs and
expenses.  The Corporation believes that the plaintiff's allegations are
without merit or that there are meritorious defenses, and intends to defend
the action vigorously.  However, if the plaintiff is successful, it may have
an adverse effect on the Corporation.  No liability has been recorded in
connection with this lawsuit.

The Corporation leases certain facilities and equipment under non-cancelable
operating leases.  Rental expense under operating leases totaled $219 for the
eleven months ended December 31, 1996, and $286 and $210 for the years ended
January 31, 1996 and 1995, respectively.  Minimum rental payments under these
leases with initial or remaining terms of one year or more at December 31,
1996, due during the next five fiscal years are as follows:  1997 - $163; 1998
- $148; 1999 - $133; 2000 - $22; and 2001 - $0.



<PAGE>  41

------------------------------------------------------------------------------
PETERSON SULLIVAN P.L.L.C.
601 Union Street  Suite 2300  Seattle WA  98101  (206) 382-7777 fax 382-7700
                                                Certified Public Accountants




                   INDEPENDENT AUDITORS' REPORT
                   ----------------------------



To the Board of Directors and Shareholders
Ichor Corporation and Subsidiaries

Our report on the consolidated financial statements of Ichor Corporation and
Subsidiaries is included on page 21 of this Form 10-K.  In connection with our
audits of such financial statements, we have also audited the related
financial statement schedule listed in Item 14 of this Form 10-K.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic consolidated financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.


                                             /s/  Peterson Sullivan P.L.L.C.

February 21, 1997
Seattle, Washington



<PAGE>  42

                ICHOR CORPORATION AND SUBSIDIARIES
                 (Formerly PDG Remediation, Inc.)
         SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the Eleven Months Ended December 31, 1996 and the Years Ended
                    January 31, 1996 and 1995
                    (In Thousands of Dollars)
<TABLE>
<CAPTION>

                                        Additions
                                  ----------------------
                    Balance at                 Charged                      Balance at
                    beginning      Charged     to other                      close
                    of period     to income   accounts(1)    Deductions(2)  of period
                    ----------    ---------   ----------     -----------    ----------
<S>                 <C>           <C>         <C>            <C>             <C>

Eleven Months Ended
  December 31, 1996
Allowance for
  doubtful accounts $      724    $      40   $      130     $       204     $     690
                    ==========    =========   ==========     ===========     =========

Year Ended
  January 31, 1996
Allowance for
  doubtful accounts $      307    $     387   $        -     $       (30)    $     724
                    ==========    =========   ==========     ===========     =========

Year Ended
  January 31, 1995
Allowance for
  doubtful accounts $      183     $    225   $        -     $       101     $     307
                    ==========    =========   ===========    ===========     =========


</TABLE>

(1)  Allowance for uncollectibility to reflect the fair value of receivables
     purchased; recorded at the date of acquisition of the waste oil
     recycling facility
(2)  Uncollectible accounts written off, net of recoveries




<PAGE>   43
                            SIGNATURES
                            ----------

  Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

Date:  March 18, 1997

                                        ICHOR CORPORATION

                                        By: /s/ Michael J. Smith
                                            ---------------------------------
                                        Michael J. Smith, President,
                                        Chief Financial Officer and Treasurer


  Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.



/s/ Michael J. Smith                            March 18, 1997
-----------------------------------
Michael J. Smith
President, Chief Financial Officer,
Treasurer and Director


/s/ Roy Zanatta                                 March 18, 1997
-----------------------------------
Roy Zanatta
Secretary and Director


/s/ John Musacchio                              March 18, 1997
-----------------------------------
John Musacchio
Director


/s/ Edgar Berkey                                March 18, 1997
-----------------------------------
Edgar Berkey
Director


/s/ Leonard Petersen                            March 18, 1997
-----------------------------------
Leonard Petersen
Director
















<PAGE>  44
                          EXHIBIT INDEX
                          -------------

Exhibit Number       Description
--------------       -----------

    2.1              Agreement and Plan of Merger dated October 1, 1996
                     between ICHOR Corporation and PDG Remediation, Inc.
                     Incorporated by reference to Schedule 14C dated September
                     17, 1996.

    3.1              Articles of Incorporation.(1)

    3.2              Bylaws.(1)

    10.1             Warrant Agency Agreement.(2)

    10.2             Form of Representative's Warrant Agreement between the
                     Company and Coleman and Company Securities, Inc.(2)

    10.3             Loan Agreement between Drummond Financial Corporation
                     (formerly CVD Financial Corporation) and ICHOR Services,
                     Inc. (formerly PDG Environmental Services, Inc.) dated
                     October 28, 1993 in the amount of $2,500,000.(2)

    10.4             Amended and Restated Loan Agreement between Drummond
                     Financial Corporation (formerly CVD Financial
                     Corporation) and ICHOR Services, Inc. (formerly PDG
                     Environmental Services, Inc.) dated September 6, 1994 in
                     the amount of $4,000,000.(2)

    10.5             Loan Modification dated February 8, 1995 among Drummond
                     Financial Corporation (formerly CVD Financial
                     Corporation), the Company and certain other companies.(2)

    10.6             Master Funding and Indemnification Agreement between
                     ICHOR Services, Inc. (formerly PDG Environmental
                     Services, Inc.) and Sirrom Environmental Funding, LLC
                     dated August 21, 1995.  Incorporated by reference to the
                     Company's quarterly report on Form 10-Q for the quarter
                     ended July 31, 1995.

    10.7             Master Funding and Indemnification Agreement between
                     ICHOR Services, Inc. (formerly PDG Environmental
                     Services, Inc.) and Sirrom Environmental Funding, LLC
                     dated January 27, 1995.  Incorporated by reference to the
                     Company's quarterly report on Form 10-Q for the quarter
                     ended October 31, 1995.

    10.8             Warrant Agreement between the Company and Sirrom
                     Environmental Funding, LLC dated August 21, 1995.(1)

    10.9             Letter Agreements dated July 15, 1994 among J.A. Jones
                     Construction Services Company, the Company and U.S. Navy
                     Contract N62470-23-D-3033.(2)

    10.10            Subcontract Agreement between J.A. Jones Construction
                     Services Company and ICHOR Services, Inc. (formerly PDG
                     Environmental Services, Inc.).(2)



<PAGE>  45

    10.11            Amended 1994 Stock Option Plan.(3)

    10.12            1995 Qualified Incentive Stock Option Plan.(3)

    10.13            Employment contract for John M. Musacchio dated November
                     30, 1995.(1)

    10.14            Purchase Agreement dated as of January 31, 1996 between
                     Specialty Environmental, Inc. and the Company.(1)

    10.15            Purchase Agreement dated December 13, 1996 between the
                     Company and Logan International Corp.(4)

    10.16            Order of Court of the Honorable Jack B. Schmeitterer of
                     the United States Bankruptcy Court of the Northern
                     District of Illinois, Eastern Division approving the sale
                     of assets of Enviropur Waste Refining and Technology,
                     Inc. to Ortek Inc. (formerly BC Ventures Limited).(4)

    10.17            Loan Agreement dated January 15, 1997 between Ortek Inc.
                     and Volendam Investments Limited.

    10.18            Loan Agreement dated January 15, 1997 among Drummond
                     Financial Corporation, the Company and ICHOR Services,
                     Inc.

    11               Statement re computation of per share earnings.

    21               List of subsidiaries of the Registrant.

    23               Consent of Independent Auditors

    27               Article 5 - Financial Data Schedule for the 11 months
                     ended December 31, 1996.
-----------------
(1)  Incorporated by reference to the Company's Form 10-K dated
     January 31, 1996.
(2)  Incorporated by reference to the Company's registration statement
     on Form S-1 (No. 33-82092).
(3)  Incorporated by reference to ICHOR Corporation's Definitive Schedule
     14A dated July 8, 1996.
(4)  Incorporated by reference to the Company's Form 8-K dated
     December 17, 1996.