<PAGE>  1

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

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K

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

                  For the fiscal year ended December 31, 1998

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

                 For the transition period from       to
                                                -----    -----

                        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.)

     Suite 1250, 400 Burrard Street
   Vancouver, British Columbia, Canada                 V6C 3A6
(Address of principal executive offices)            (Postal Code)

     Registrant's telephone number, including area code:  (604) 683-5767

      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 $1,785,095 as of March 23, 1999, computed on the 
basis of the average of the bid and ask prices on such date.

As of March 23, 1999, there were 4,907,520 shares of the Registrant's Common 
Stock outstanding.

                     DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's 1998 Proxy Statement to be filed within 120 days 
of the period ended December 31, 1998 are incorporated by reference into Part 
III.

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


<PAGE>  2


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 and regulatory 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.  


                                       2


<PAGE>  3


                               TABLE OF CONTENTS
                               -----------------
                                                                          PAGE
                                                                          ----
                                    PART I
                                    ------

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

ITEM 2.    PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ITEM 3.    LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . .  5

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . . 5

                                    PART II
                                    -------

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
           STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . . . . . . . . 6

ITEM 6.    SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . 7

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . 8

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
           MARKET RISK . . . . . . . . . . . . . . . . . . . . . . . . . . .10

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . .10

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . . .10

                                    PART III
                                    --------

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. . . . . . . .11

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

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
           AND MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . .11

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . . . . .11

                                    PART IV
                                    -------

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
           ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . .11

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29


                                       3


<PAGE>  4


                                    PART I
                                    ------

ITEM 1.  BUSINESS

The Corporation
---------------

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 Corporation 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 "Corporation" refers to ICHOR 
Corporation and its subsidiaries.

General
-------

From its inception to December 1997, the Corporation operated in the 
environmental services business.  The Corporation's initial operations 
included a thermal treatment facility in Florida and remediation services 
offices in Florida and Pennsylvania.  In December 1996, the Corporation 
acquired a waste oil recycling facility in Illinois.

In response to changes in the Florida market, the Corporation closed certain 
remediation services offices and sold certain remediation facilities in 1995 
and 1996.  The Corporation sold the balance of its remediation services 
operations in April 1997 and its waste oil recycling facility in December 
1997.  In March 1998, the Corporation sold its wholly-owned subsidiary, ICHOR 
Services, Inc. ("Services").

In 1998, the Corporation provided certain consulting services to an 
industrial customer in Europe.  The Corporation is currently seeking new 
business opportunities.

The Corporation completed its initial public offering in February 1995.  In 
July 1996, Drummond Financial Corporation ("Drummond") acquired a 59.5% 
interest in the Corporation from PDG Environmental, Inc.  In December 1996, 
the Corporation issued approximately 50.3% of the Corporation's common stock 
to Logan International Corp. ("Logan") as partial consideration for a loan 
receivable through which the Corporation acquired its waste oil recycling 
facility.  Logan and Drummond are controlled by MFC Bancorp Ltd. ("MFC").  In 
the first quarter of 1998, the Corporation completed the issuance of an 
aggregate of 467,500 shares of 5% Cumulative Redeemable Convertible Preferred 
Stock, Series 1 (the "Preferred Stock") of the Corporation to affiliates of 
MFC.  In December 1998, Drummond and Logan transferred all of their shares of 
common stock of the Corporation to a wholly-owned subsidiary of MFC.

Acquisition
-----------

In October 1998, the Corporation entered into an agreement to acquire all of 
the issued and outstanding shares of common stock of Nazca Holdings Ltd. 
("Nazca"), subject to the satisfaction by Nazca of certain performance 
criteria.  Nazca, through its subsidiary, is in the business of the 
exploration for and development of ground water resources in Chile.  Nazca 
holds two exploration concessions in Chile and has applied for an additional 
six concessions, and is in the process of


                                       4


<PAGE>  5


conducting exploration and development work on the granted concessions.  The 
consideration payable by the Corporation for the Nazca shares consists of: (i) 
$200,000 per concession, upon receipt of certain regulatory approvals, by the 
delivery of shares of common stock of the Corporation having an attributed 
value of between $1.00 and $1.75 per share, depending upon the fair market 
value of the shares at the time such approvals are granted, and (ii) one share 
of common stock of the Corporation for each $1.00 of net after tax income 
earned by the Corporation from the concessions, up to a maximum of 1,500,000 
shares.  Incorporated by reference herein is the Corporation's Form 8-K dated 
October 20, 1998 relating to the agreement to acquire the shares of common 
stock of Nazca.

At December 31, 1998, the Corporation had 4 employees.

ITEM 2.  PROPERTIES

The Corporation's administrative facilities are located on leased premises 
located in Vancouver, British Columbia, Canada.

ITEM 3.  LEGAL PROCEEDINGS

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 and alleged that the Corporation, its directors and certain of its 
officers, PDGE and the underwriters of the Corporation's initial public 
offering 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 alleged that the 
defendants knew or should have known that the Florida reimbursement program in 
which the Corporation participated was operating at a deficit and was being 
revised to eliminate funding of environmental remediation activities for lower 
priority sites.  The action was certified as a class action on behalf of all 
purchasers of the Corporation's common stock from February 9, 1995 through May 
23, 1995.  The plaintiff sought: (i) either the rescission of any agreement 
with respect to the purchase of shares of common stock of the Corporation by 
members of the class or statutory damages, and (ii) interest, attorneys' fees 
and other costs and expenses.

In October 1998, the Corporation agreed to an out of court settlement of all 
claims in the aforesaid class action lawsuit, without any admission of 
liability or wrongdoing, pursuant to which it paid the settlement amount of 
$259,500.

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

Not applicable.


                                       5


<PAGE>  6


                                    PART II
                                    -------

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

(a)  Market Information.  The Corporation's common stock is quoted on the 
NASDAQ SmallCap Market under the trading symbol "ICHR".  The following table 
sets forth the quarterly high and low sale price per share of the 
Corporation's common stock for the periods indicated:

Fiscal Quarter Ended                 High               Low
--------------------                ------            ------

1997
March 31. . . . . . . . . . . . .   $ 1.63            $ 1.19
June 30 . . . . . . . . . . . . .     1.50              1.25
September 30. . . . . . . . . . .     1.75              1.63
December 31 . . . . . . . . . . .     1.75              1.50

1998
March 31. . . . . . . . . . . . .   $ 1.75            $ 1.25
June 30 . . . . . . . . . . . . .     2.00              1.25
September 30. . . . . . . . . . .     2.25              1.25
December 31 . . . . . . . . . . .     3.25              1.25

(b)  Shareholders.  At March 23, 1999, the Corporation had approximately 16 
holders of record of its common stock, some of which are securities clearing 
agencies and intermediaries.

(c)  Dividends.  The Corporation has not paid any dividends on its common 
stock and does not anticipate that it will pay any dividends in the 
foreseeable future.


                                       6


<PAGE>  7


ITEM 6.  SELECTED FINANCIAL DATA

The following table reflects selected consolidated financial data for the 
Corporation for the fiscal years ended December 31, 1998 and 1997, 
respectively, the 11 months ended December 31, 1996 and the fiscal year ended 
January 31, 1996.  In September 1996, the Corporation changed its fiscal year 
end from January 31 to December 31.  The Corporation does not have access to 
the information necessary to reclassify its financial information for the year 
ended January 31, 1995.

<TABLE>
<CAPTION>
                                For the Year    For the Year    For the 11    For the Year
                                    Ended           Ended      Months Ended       Ended
                                December 31,    December 31,   December 31,   January 31,
                                ------------    ------------   ------------   ------------
                                    1998            1997           1996           1996
                                ------------    ------------   ------------   ------------
                                     (Dollars in thousands, except per share amounts)
<S>                             <C>             <C>            <C>            <C>
OPERATING DATA
Fee income . . . . . . . . . . .$        144    $          -   $          -   $          -
General and administrative
  expenses . . . . . . . . . . .         497             418          1,042            791
Interest expense . . . . . . . .         102             613            423            406
Loss from continuing
  operations . . . . . . . . . .        (178)         (1,025)        (1,320)        (1,183)
Net loss . . . . . . . . . . . .        (178)         (4,054)        (1,399)        (2,858)

COMMON SHARE DATA(1)
Loss from continuing
  operations per common share. .       (0.08)          (0.21)         (0.51)         (0.48)
Net loss per common share. . . .       (0.08)          (0.83)         (0.54)         (1.16)
Weighted average common
  shares outstanding
  (in thousands) . . . . . . . .       4,908           4,913          2,586          2,456

BALANCE SHEET DATA
Working capital. . . . . . . . .       2,141              89          3,903          2,417
Total assets . . . . . . . . . .       3,281           2,028          5,582          5,578
Long-term obligations. . . . . .           -               -          1,916              -
Total stockholders' equity . . .       2,141              89          1,987          2,438
</TABLE>

-------------------
(1)       Basic and diluted common share data is the same.


                                       7


<PAGE>  8


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 
financial condition of the Corporation for the years ended December 31, 1998 
and 1997, respectively, and the 11 months ended December 31, 1996 should be 
read in conjunction with the Corporation's audited consolidated financial 
statements and related notes included elsewhere herein.  In September 1996, 
the Corporation changed its fiscal year end from January 31 to December 31.  
As a result, the comparison of the year ended December 31, 1997 to the 11 
months ended December 31, 1996 is a comparison between 12 and 11 month 
periods.

The Corporation sold its environmental remediation services operations in 
April 1997 and a waste oil recycling facility in December 1997.  These 
operations have been accounted for as discontinued operations for the year 
ended December 31, 1997.  Certain reclassifications have been made to the 
prior periods' financial statements to conform to the current period's method 
of presentation.

Results of Operations for the Year Ended December 31, 1998 Compared to the 
--------------------------------------------------------------------------
Year Ended December 31, 1997
----------------------------

Revenues for the year ended December 31, 1998 increased to $0.7 million, from 
$6,000 for the comparative period of 1997.  In the year ended December 31, 
1998, the Corporation reported income of $0.1 million from consulting fees.  
Effective March 31, 1998, the Corporation sold Services and recognized a non-
cash accounting gain of $0.4 million on the sale as a result of the disposal 
of net liabilities of Services.

Costs and expenses decreased to $0.9 million in the year ended December 31, 
1998 from $1.0 million in the year ended December 31, 1997.  Interest expense 
decreased to $0.1 million in the year ended December 31, 1998 from $0.6 
million in the year ended December 31, 1997, primarily as a result of the sale 
of Services in the first quarter of 1998, which had financed certain 
receivables for work performed under certain Florida State rehabilitation 
programs.  General and administrative expenses for the year ended December 31, 
1998 increased to $0.5 million from $0.4 million in the comparative period of 
1997, primarily as a result of an increase in professional fees.

In the year ended December 31, 1998, the Corporation paid $0.3 million in 
settlement of a class action lawsuit.  See "Item 3. Legal Proceedings" herein 
for further details with respect to the action.

The Corporation reported a net loss of $0.2 million, or $0.08 per share, in 
the year ended December 31, 1998.  In the year ended December 31, 1997, the 
Corporation reported a net loss of $4.1 million, or $0.83 per share, which 
included a loss of $3.0 million, or $0.62 per share, from discontinued 
operations.

Results of Operations for the Year Ended December 31, 1997 Compared to the 11 
-----------------------------------------------------------------------------
Months Ended December 31, 1996
------------------------------

Selling, general and administrative expenses for the year ended December 31, 
1997 decreased to $0.4 million from $1.0 million for the 11 months ended 
December 31, 1996, primarily as a result of the legal and accounting costs 
associated with certain litigation involving the Corporation and the


                                       8


<PAGE>  9


costs associated with a proposed acquisition in the 11 months ended December 
31, 1996 and reduced staffing as a result of the sale of the Corporation's 
environmental remediation services operations and a waste oil recycling 
facility in 1997.  Interest expense was $0.6 million in the period ended 
December 31, 1997, compared to $0.4 million in the period ended December 31, 
1996, primarily as a result of an increase in amounts funded under two 
agreements with Sirrom Environmental Funding, LLC during the year ended 
December 31, 1997, whereby the Corporation had funded the amounts billed and 
outstanding under certain Florida State environmental rehabilitation programs 
in the amount of $3.0 million, at the rate of prime plus 2% and 3%, 
respectively.

The Corporation reported a loss from continuing operations of $1.0 million in 
the year ended December 31, 1997, compared to $1.3 million in the 11 months 
ended December 31, 1996.

The Corporation recognized a loss from the operation of its environmental 
remediation services operations of $0.5 million in the year ended December 31, 
1997, compared to $0.2 million in the period ended December 31, 1996.  The 
Corporation recorded a gain of $59,000 from the sale of these operations in 
the period ended December 31, 1997.  The Corporation reported a loss of $1.2 
million from the operation of a waste oil recycling facility and a loss of 
$1.4 million from the sale of the facility in the year ended December 31, 
1997.  The Corporation had income from the operation of its soil remediation 
facility of $90,000 in the 11 months ended December 31, 1996, as a result of a 
reduction in the reserve for operating losses.

The Corporation's net loss for the year ended December 31, 1997 was $4.1 
million, or $0.83 per share, compared to $1.4 million, or $0.54 per share, for 
the 11 months ended December 31, 1996.

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

The Corporation had cash of $50,000 at December 31, 1998, compared to $0.1 
million at December 31, 1997.  The Corporation maintains a line of credit with 
an affiliate in the amount of $0.8 million to fund working capital 
requirements.  The line of credit was fully utilized as at December 31, 1998.

Net cash used in operating activities was $0.9 million in the year ended 
December 31, 1998, compared to $1.0 million in the year ended December 31, 
1997.  A decrease in accounts payable and other liabilities used cash of $0.1 
million in the year ended December 31, 1998, compared to $0.4 million in the 
comparable period of 1997.  A decrease in cash held in escrow provided cash of 
$0.1 million in the year ended December 31, 1998, compared to $0.6 million in 
the year ended December 31, 1997.  The Corporation recognized a non-cash 
accounting gain of $0.4 million on the sale of Services in the year ended 
December 31, 1998.

Investing activities used cash of $1.5 million in the year ended December 31, 
1998, primarily as a result of the acquisition of a note receivable.  The note 
is due in the near term and bears interest at a rate of 8.75% per annum.  On 
October 20, 1998, the Corporation entered into an agreement to acquire all of 
the issued and outstanding shares of common stock of Nazca, which is in the 
business of the exploration for and development of ground water resources in 
Chile.  See "Item 1. Business - Acquisition" herein for further details with 
respect to the agreement.

Financing activities provided cash of $2.2 million in the year ended December 
31, 1998, compared to $0.5 million in the year ended December 31, 1997. In the 
first quarter of 1998, the Corporation 


                                       9


<PAGE>  10


completed the issuance of an aggregate of 467,500 shares of Preferred Stock of 
the Corporation in consideration of debt forgiveness of $2.2 million and cash 
of $2.2 million, net of expenses.

The Corporation believes that its assets and line of credit should enable the 
Corporation to meet its current ongoing requirements.  The Corporation 
anticipates that it may require substantial capital to pursue current and 
future acquisitions of businesses and/or operating assets and will seek such 
capital through debt and/or equity financing.

Year 2000
---------

Many of the world's computer systems currently record years in a two-digit 
format.  These computer systems will be unable to properly interpret dates 
beyond the year 1999, which could lead to business disruptions and is commonly 
referred to as the "Year 2000" issue.  Based on its current information, 
management of the Corporation has determined that the Year 2000 issue will not 
pose significant operational problems for its computer systems as it only 
utilizes commercially available software and personal computers, which are 
Year 2000 compliant.  The total cost to the Corporation of Year 2000 
compliance activities has not been and is not currently anticipated to be 
material to its financial position or results of operations in any given year. 
In addition, management of the Corporation has initiated communications with 
clients to ascertain their Year 2000 readiness and develop contingency plans 
as required, and management intends to address this issue with any prospective 
client.  The determination by management and costs relating to the Year 2000 
issue are based on management's best estimates, which were derived utilizing 
numerous assumptions of future events.  However, there can be no assurance 
that these estimates will be achieved and actual results could vary materially 
from those anticipated.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
         RISK

Not applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

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

Not applicable.


                                       10


<PAGE>  11


                                    PART III
                                    --------

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

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

ITEM 11.  EXECUTIVE COMPENSATION

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

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

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

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

                                    PART IV
                                    -------

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

(a) (1)     Index to Financial Statements
            -----------------------------

    Independent Auditors' Report
    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.


                                       11


<PAGE>  12


    (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 the Corporation's Schedule 14C dated September 17, 1996.

    3.1     Articles of Incorporation.(1)

    3.2     Certificate of Designations.  Incorporated by reference to the
            Corporation's Form 8-K dated March 12, 1998.

    3.3     Bylaws.(1)

    10.1    Amended 1994 Stock Option Plan.(2)

    10.2    1995 Qualified Incentive Stock Option Plan.(2)

    10.3    Amended and Restated Employment Agreement for John M. Musacchio
            dated February 1, 1997.(3)

    10.4    Loan Agreement dated January 15, 1997 between Ortek Inc. and
            Volendam Investments Limited.(4)

    10.5    Loan Agreement dated January 15, 1997 among Drummond Financial
            Corporation, the Corporation and ICHOR Services, Inc.(4)

    10.6    Amendment to Loan Agreement dated June 30, 1997 among Drummond
            Financial Corporation, the Corporation and ICHOR Services, Inc.(3)

    10.7    Stock Purchase Agreement between the Corporation and Evergreen
            Holding Inc. dated December 23, 1997.  Incorporated by reference
            to the Corporation's Form 8-K dated January 7, 1998.

    10.8    Debt Settlement Agreement between Logan International Corp. and
            the Corporation dated September 30, 1997.(5)

    10.9    Debt Settlement Agreement between Logan International Corp. and
            the Corporation dated February 20, 1998.(5)

    10.10   Debt Settlement Agreement between Sutton Park International Ltd.
            and the Corporation dated February 20, 1998.(5)

    10.11   Subscription Agreement between Constable Investments Ltd. and the
            Corporation dated February 26, 1998.(5)

    10.12   Subscription Agreement between Conqueror Holdings Ltd. and the
            Corporation dated February 26, 1998.(3)

    10.13   Subscription Agreement between Sutton Park International Ltd. and
            the Corporation dated February 26, 1998.(5)

    10.14   Subscription Agreement between Zellstoff-und Papierfabrik
            Rosenthal GmbH and the Corporation dated February 26, 1998.(3)


                                       12


<PAGE>  13


    10.15   Purchase Agreement between the Corporation and Nazca Holdings Ltd.
            dated October 17, 1998.  Incorporated by reference to the
            Corporation's Form 8-K dated October 20, 1998.

    23      Consent of Independent Auditors.

    27      Article 5 - Financial Data Schedule for the year ended December
            31, 1998.

---------------
(1)  Incorporated by reference to the Corporation's Form 10-K dated January
     31, 1996.
(2)  Incorporated by reference to the Corporation's Definitive Schedule 14A
     dated July 8, 1996.
(3)  Incorporated by reference to the Corporation's Form 10-K dated December
     31, 1997.
(4)  Incorporated by reference to the Corporation's Form 10-K dated December
     31, 1996.
(5)  Incorporated by reference to a Schedule 13D\A dated March 13, 1998.


(b)  Reports On Form 8-K
     -------------------

The Corporation filed the following reports with respect to the indicated 
items:

     Form 8-K dated October 20, 1998:
        Item 2. Acquisition or Disposition of Assets.
        Item 7. Financial Statements and Exhibits.

     Form 8-K/A dated January 4, 1999:
        Item 7. Financial Statements and Exhibits.


                                       13


<PAGE>  14


------------------------------------------------------------------------------
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 Subsidiary



We have audited the consolidated balance sheets of Ichor Corporation and its 
subsidiary as of December 31, 1998 and 1997, and the related consolidated 
statements of operations, changes in shareholders' equity, and cash flows for 
the years ended December 31, 1998, 1997 and the eleven months ended December 
31, 1996.  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 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 financial position of Ichor 
Corporation and its subsidiary as of December 31, 1998 and 1997, and the 
results of their operations and their cash flows for the years ended December 
31, 1998, 1997 and the eleven months ended December 31, 1996, in conformity 
with generally accepted accounting principles.



/s/ Peterson Sullivan P.L.L.C.
February 17, 1999
Seattle, Washington


                                       14


<PAGE>  15


                       ICHOR CORPORATION AND SUBSIDIARY
                         CONSOLIDATED BALANCE SHEETS
                          December 31, 1998 and 1997
                          (In Thousands of Dollars)

                                                      1998            1997
                                                   ----------      ----------
          ASSETS
Current Assets 
  Cash                                             $       50      $      127
  Cash held in escrow                                       -             617
  Accounts receivable, less allowance for doubtful
    accounts of none and $562 at December 31,
    1998 and 1997, respectively                           560             332
  Notes receivable                                      2,080             680
  Advances to affiliates                                  540             270
  Other assets                                             51               2
                                                   ----------      ----------

      Total current assets                              3,281           2,028
                                                   ----------      ----------

                                                   $    3,281      $    2,028
                                                   ==========      ==========

          LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
  Accounts payable and other liabilities           $        8      $      402
  Advances from affiliates                              1,132             780
  Debt                                                      -             757
                                                   ----------      ----------

      Total current liabilities                         1,140           1,939

Shareholders' Equity
  Preferred stock, $.01 par value; 5,000,000
    shares authorized; Series 1, nonvoting;
    shares issued and outstanding 467,500 at
    December 31, 1998 and 217,500 at
    December 31, 1997                                       5               2
  Common stock, $.01 par value; 30,000,000
    shares authorized; shares issued 4,970,320
    at December 31, 1998 and 1997                          50              50
  Additional paid-in capital on preferred stock         4,400           2,173
  Additional paid-in capital on common stock            5,743           5,743
  Retained deficit                                     (7,986)         (7,808)
                                                   ----------      ----------

                                                        2,212             160

  Less cost of 62,800 shares of common stock held
    in treasury at December 31, 1998 and 1997             (71)            (71)
                                                   ----------      ----------

                                                        2,141              89
                                                   ----------      ----------

                                                   $    3,281      $    2,028
                                                   ==========      ==========


  The accompanying notes are an integral part of these financial statements.


                                       15


<PAGE>  16


                       ICHOR CORPORATION AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                    Years Ended December 31, 1998 and 1997
                  and Eleven Months Ended December 31, 1996
           (In Thousands of Dollars, Except for Per Share Amounts)

                                           1998          1997         1996
                                        ----------    ----------   ----------
Revenues
  Fees                                  $      144    $        -   $        -
  Interest                                      92             6            -
  Gain on disposal of a subsidiary             437             -            -
  Other                                          8             -          145
                                        ----------    ----------   ----------

                                               681             6          145

Costs and expenses
  General and administrative                   497           418        1,042
  Interest                                     102           613          423
  Litigation settlement                        260             -            -
                                        ----------    ----------   ----------

                                               859         1,031        1,465
                                        ----------    ----------   ----------

Loss from continuing operations               (178)       (1,025)      (1,320)

Discontinued operations (any tax
  benefits from losses are fully
  reserved; any taxes associated
  with gains are offset by tax
  losses)
  Loss from operation of
    environmental remediation
    services segment                             -          (489)        (169)
  Gain on sale of environmental
    remediation services segment                 -            59            -
  Loss from operation of waste oil
    recycling facility                           -        (1,224)           -
  Loss on sale of waste oil
    recycling facility                           -        (1,375)           -
  Gain from operation of soil
    remediation facility                         -             -           90
                                        ----------    ----------   ----------

Loss from discontinued operations                -        (3,029)         (79)
                                        ----------    ----------   ----------

          Net loss                      $     (178)   $   (4,054)  $   (1,399)
                                        ==========    ==========   ==========

Basic loss per common share
  Loss from continuing operations       $     (.08)   $     (.21)  $     (.51)
  Discontinued operations                        -          (.62)        (.03)
                                        ----------    ----------   ----------

          Net loss                      $     (.08)   $     (.83)  $     (.54)
                                        ==========    ==========   ==========


  The accompanying notes are an integral part of these financial statements.


                                       16


<PAGE>  17


                       ICHOR CORPORATION AND SUBSIDIARY
          CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                    Years Ended December 31, 1998 and 1997
                   and Eleven Months Ended December 31, 1996
                           (In Thousands of Dollars)
<TABLE>
<CAPTION>
                        ---------------Common Stock---------------  --------Preferred Stock--------
                                              Additional                                 Additional 
                         Number       Par      Paid-in    Treasury    Number      Par     Paid-in   Retained
                        of Shares    Value     Capital     Stock    of Shares    Value    Capital   Deficit    Total
                        ---------  ---------  ----------  --------  ---------  --------- ---------- --------  -------
<S>                     <C>        <C>        <C>         <C>       <C>        <C>       <C>        <C>        <C>
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

Net loss for year ended
  December 31, 1997             -          -           -         -          -          -          -   (4,054)   (4,054)
Conversion of debt from
  related parties to
  preferred stock               -          -           -         -    217,500          2      2,173        -     2,175
Repurchase of 15,200
  shares of common stock
  held in treasury        (15,200)         -           -       (19)         -          -          -        -       (19)
                        ---------  ---------  ----------  --------  ---------  --------- ---------- --------   -------

Balance at December
  31, 1997              4,907,520         50       5,743       (71)   217,500          2      2,173   (7,808)       89

Net loss for year ended
  December 31, 1998             -          -           -         -          -          -          -     (178)     (178)
Preferred shares issued
  for cash (215,000
  shares purchased by
  related parties at
  $10 per share)                -          -           -         -    250,000          3      2,227        -     2,230
                        ---------  ---------  ----------  --------  ---------  --------- ---------- --------   -------

Balance at December
  31, 1998              4,907,520  $      50  $    5,743  $    (71)   467,500  $       5 $    4,400 $ (7,986)  $ 2,141
                        =========  =========  ==========  ========  =========  ========= ========== ========   =======
</TABLE>


  The accompanying notes are an integral part of these financial statements.


                                       17


<PAGE>  18


                       ICHOR CORPORATION AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                    Years Ended December 31, 1998 and 1997
                  and Eleven Months Ended December 31, 1996
                          (In Thousands of Dollars)

                                           1998          1997         1996
                                        ----------    ----------   ----------
Cash Flows from Operating Activities
  Net loss                              $     (178)   $   (4,054)  $   (1,399)
  Adjustments to reconcile net
    loss to cash flows from
    operating activities
    Gain on disposal of subsidiary            (437)            -            -
  Changes in current assets and
    liabilities
    Cash held in escrow                        145           637         (286)
    Accounts receivable                       (254)         (185)       3,077
    Advances to affiliates                    (270)         (270)           -
    Repayments to former parent                  -             -         (117)
    Prepaid expenses and other assets            -           106          (40)
    Accounts payable and other
      liabilities                             (115)         (403)      (1,127)
    Advances from affiliates                   352           360          193
    Net assets of discontinued
      operations                                 -         2,723           74
    Other                                     (100)           42          (84)
                                        ----------    ----------   ----------

          Net cash provided by (used
            in) operating activities          (857)       (1,044)         291

Cash Flows from Investing Activities
  Increase in note receivable               (1,400)            -            -
  Investment                                   (50)            -            -
                                        ----------    ----------   ----------

          Net cash used in investing
            activities                      (1,450)            -            -

Cash Flows from Financing Activities
  Proceeds from issuance of preferred
    shares                                   2,230             -            -
  Purchase of stock held in treasury             -           (19)         (52)
  Proceeds from debt                             -           750           51
  Principal payments on debt                     -          (188)         (24)
                                        ----------    ----------   ----------

          Net cash provided by (used
            in) financing activities         2,230           543          (25)
                                        ----------    ----------   ----------

Increase (decrease) in cash                    (77)         (501)         266

Cash, beginning of year                        127           628          362
                                        ----------    ----------   ----------

Cash, end of year                       $       50    $      127   $      628
                                        ==========    ==========   ==========


  The accompanying notes are an integral part of these financial statements.


                                       18


<PAGE>  19


                       ICHOR CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (In Thousands of Dollars, Except for Per Share Amounts)



Note 1.  The Company and Summary of Significant Accounting Policies

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

Prior to December 1997, Ichor Corporation ("the Company") was in the 
environmental industry, providing environmental remediation services and 
operating a recycling waste oil facility.  The Company sold the remediation 
services segment of its business in April 1997 for $147 in cash and retained 
the segment's current assets and liabilities.  The waste oil recycling 
facility was sold in December 1997 for $1,000 including $320 in cash and a 
$680 note which was paid in 1999.  Both segments were accounted for as 
discontinued operations and unless otherwise stated, all notes to financial 
statements relate to continuing operations.

In March 1998, the Company sold its subsidiary at a non-cash accounting gain 
of $437 which resulted from the assumption of the subsidiary's liabilities by 
the purchaser.  The Company is presently evaluating other potential business 
acquisitions.

During 1998, the Company entered into an agreement to acquire Nazca Holdings 
Ltd. ("Nazca").  A wholly-owned subsidiary of Nazca is in the business of 
locating and developing ground water resources in Chile to be sold to mining, 
agricultural and public utility customers.  Because the transaction was 
incomplete at December 31, 1998, the results of Nazca's operations are not 
included in these consolidated financial statements.

In July 1996, Drummond Financial Corporation ("Drummond") acquired a 59.5% 
interest in the Company.  In December 1996, Logan International Corporation 
("Logan") acquired a 50.3% interest in the Company which reduced Drummond's 
ownership to 29.6%.  Because of these acquisitions, the Company changed its 
year end from January 31 to December 31, beginning in 1996.  Effective 
December 31, 1998, Drummond and Logan transferred their interests in the 
Company to a subsidiary of their common parent corporation, MFC Bancorp Ltd. 
("MFC").  Advances to/from affiliates involve various subsidiaries of MFC and 
are due in the near term.

Notes receivable include $1,400 from one company which is secured with 
collateral in excess of the note balance, bears interest at 8.75%, and is due 
in the near term.


                                       19


<PAGE>  20


Note 1.  (Continued)

In 1997, Logan converted $1,425 of its debt from the Company into 142,500 
shares of the Company's Preferred Stock, Series 1.  In addition, another 
subsidiary of MFC converted a $750 advance into 75,000 shares of Preferred 
Stock, Series 1.  Interest paid on a cash basis was the same as interest 
expense for 1998 and 1997.  No interest was paid in cash in 1996.

During 1998, the Company settled a purported class action lawsuit for $260 
involving purchases of its common stock in a prior year.

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

The consolidated financial statements include the accounts of the Company and 
its subsidiary.  Significant intercompany accounts and transactions have been 
eliminated.

Cash
----

Cash balances are occasionally in excess of federally insured amounts.  Cash 
held in escrow represents amounts which were subject to withdrawal 
restrictions.

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

The Company 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 
Company's financial statements or tax returns.  In estimating future tax 
consequences, the Company generally considers all expected future events other 
than enactments of changes in the tax laws or rates.

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

Basic earnings per share is computed by dividing income available to common 
shareholders by the weighted average number of common shares outstanding in 
the period.  Diluted earnings per share takes into consideration common shares 
outstanding (computed under basic earnings per share) and potentially dilutive 
common shares.  The conversion of the convertible preferred stock, warrants 
and the stock options have not been reflected as exercised for the purposes of 
computing earnings or loss per share since the conversion of such stock or 
exercise of such warrants and options would be antidilutive.  The weighted 
average number of shares was 4,907,520, 4,912,643, and 2,585,590 for the years 
ended December 31, 1998, 1997, and the eleven months ended December 31, 1996. 
The loss from operations to compute the amount attributable to common 
shareholders includes the recognition of preferred stock dividends in arrears 
of $214 and none for 1998 and 1997, respectively.  The Company has 1,150,000 
warrants outstanding which allows the holder to acquire common shares at $6 
each until 2000.  The Company also has 100,000 warrants outstanding which 
allows the holder to acquire common shares at $1.37 each until 1999.


                                       20


<PAGE>  21


Note 1.  (Continued)

Preferred Stock
---------------

The entire redemption value of Preferred Shares, Series 1, can be exchanged 
for common stock at 90% of the common stock average market price (as defined). 
Redemption value is $10 per share and shares are redeemable only by the 
Company with a 30 day notice.  The Preferred Shares, Series 1, have a 
liquidation preference over other stock to the extent of the redemption value 
plus unpaid dividends.  This stock has an annual cumulative dividend rate of 
5%, payable quarterly and no dividends may be paid on common stock if 
preferred share dividends are in arrears.

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

Compensation cost for stock options is measured as the excess, if any, of the 
quoted market price of the Company's stock at the date of the grant over the 
amount an employee is required to pay for the stock.  There is no stock-based 
compensation included in these consolidated financial statements.

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

The preparation of 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.

Fair Value of Recorded Instruments
----------------------------------

The fair value of the notes receivable and advances to/from an affiliate were 
estimated to approximate their recorded values based on the terms of the 
instruments.

New Accounting Standards
------------------------

Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive 
Income" is effective for years beginning after December 15, 1997.  The primary 
objective of this statement is to report and disclose a measure of all changes 
in equity of an entity that result from transactions and other economic events 
of the period other than transactions with owners.  There are no elements of 
other comprehensive income for 1998, 1997 and 1996; therefore, no disclosures 
are necessary beyond the consolidated statements of operations.


                                       21


<PAGE>  22

Note 1.  (Continued)

Statement of Financial Accounting Standards No. 131, "Disclosure About 
Segments of an Enterprise and Related Information," is effective for years 
beginning after December 15, 1997.  This statement requires use of the 
"management approach" model for segment reporting.  The management approach 
model is based on the way a company's management organizes segments within the 
company for making operating decisions and assessing performance.  Currently, 
the Company has limited operations and, therefore, management believes there 
are no identifiable segments and no additional segment information is 
provided.

Statement of Financial Standards No. 133, "Accounting for Derivative 
Instruments and Hedging Activities" establishes accounting and reporting 
standards for derivative instruments and for hedging activities.  This 
statement requires that an entity recognize all derivatives as either assets 
or liabilities in the statement of financial position and measure those 
instruments at fair value.  Because the Company does not engage in any 
derivatives or hedging activities, there should be no impact on its financial 
statements.



Note 2.  Income Taxes

The reconciliation of income tax on income from continuing operations computed 
at the federal statutory rates to income tax expense is as follows:

                                                                     Eleven
                                     Year Ended     Year Ended    Months Ended
                                    December 31,   December 31,   December 31,
                                        1998           1997           1996
                                    ------------   ------------   ------------
Tax at statutory rate               $        (60)  $       (349)  $       (449)
Permanent difference
  associated with gain on
  disposal of subsidiary                    (149)             -              -
Valuation allowance                          209            377            832
Other                                          -            (28)          (383)
                                    ------------   ------------   ------------
                                    $          -   $          -   $          -
                                    ============   ============   ============


                                       22


<PAGE>  23


Note 2.  (Continued)

The significant components of the Company's deferred tax asset as of December 
31, 1998 and 1997, is as follows:

                                                        1998          1997
                                                     ----------    ----------
Accounts receivable allowance                        $        -    $      191
Net operating loss carryforward                             629         2,999
                                                     ----------    ----------
Net deferred tax asset before valuation allowance           629         3,190

Valuation allowance for deferred tax asset                 (629)       (3,190)
                                                     ----------    ----------
Net deferred tax asset                               $        -    $        -
                                                     ==========    ==========

The Company has a net operating loss carryforward of approximately $1,850 at 
December 31, 1998, which expires at:  $756 in 2010; $35 in 2011; $443 in 2012;
$616 in 2013.  The Company's utilization of the losses is subject to 
limitation due to ownership and operational changes, except those that expire 
in 2012 and 2013.  At December 31, 1997, $2,770 of the deferred tax asset was 
attributable to the net operating loss carryforwards of a subsidiary which was 
disposed of in 1998.



Note 3.  Stock Option Plans

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

The Company maintains a stock option plan which provides for the issuance of 
up to 350,000 shares of the Company's common stock to employees and non-
employee directors.

The following table summarizes information with respect to the 1994 Amended 
Stock Option Plan:

                                                                   Weighted
                                                                   Average
                                                    Number of      Exercise
                                                     Shares         Price
                                                    ---------      --------
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


                                       23


<PAGE>  24


Note 3.  (Continued)

                                                                   Weighted
                                                                   Average
                                                    Number of      Exercise
                                                     Shares         Price
                                                    ---------      --------
Granted                                               145,000          2.00
Canceled - Reusable                                   (89,500)         1.10
                                                    ---------
Outstanding at December 31, 1997                      235,000          1.39
Granted                                                     -             -
Canceled - Reusable                                  (170,000)         1.39
                                                    ---------
Outstanding at December 31, 1998                       65,000      $    .83
                                                    =========      ========
Exercisable at December 31, 1998                       65,000      $    .83
                                                    =========      ========
Reserved for future grants at December 31, 1998       285,000
                                                    =========

The weighted average fair value (per option) at date of grant for options 
granted during the year ended December 31, 1997, and the eleven months ended 
December 31, 1996, was $.65 and $1.18, respectively.  Almost all options have 
an expiration date ten years after issuance.  No options have been exercised.

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

The Company'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 
Company's common stock to key employees.

The following table summarizes information with respect to the 1995 Qualified 
Incentive Stock Option Plan:

                                                                   Weighted
                                                                   Average
                                                    Number of      Exercise
                                                     Shares         Price
                                                    ---------      --------
Outstanding at January 31, 1996                             -      $      -
Granted                                               150,000           .75
Canceled - Reusable                                   (25,000)          .75
                                                    ---------
Outstanding at December 31, 1996                      125,000           .75
Granted                                                     -             -
Canceled - Reusable                                   (25,000)          .75
                                                    ---------
Outstanding at December 31, 1997                      100,000           .75


                                       24


<PAGE>  25


Note 3.  (Continued)

                                                                   Weighted
                                                                   Average
                                                    Number of      Exercise
                                                     Shares         Price
                                                    ---------      --------
Granted                                                     -             -
Canceled - Reusable                                  (100,000)          .75
                                                    ---------
Exercisable at December 31, 1998                            -      $      -
                                                    =========      ========
Reserved for future grants at December 31, 1998       150,000
                                                    =========

The weighted average fair value (per option) at grant date for options granted 
during the eleven months ended December 31, 1996, was $.72.  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 
Company's common stock (as defined). However, had compensation expense been 
recognized on the basis of fair value pursuant to Statement of Financial 
Accounting Standards No. 123, "Accounting for Stock-Based Compensation," 
instead of the accepted accounting method used by the Company, net loss and 
per share data would have been adjusted as follows:

                                                                     Eleven
                                     Year Ended     Year Ended    Months Ended
                                    December 31,   December 31,   December 31,
                                        1998           1997           1996
                                    ------------   ------------   ------------

Net loss
-------------------------------
  As reported                       $      (178)   $    (4,054)   $    (1,399)
                                    ===========    ===========    ===========
  Proforma                          $      (178)   $    (4,085)   $    (1,551)
                                    ===========    ===========    ===========

Basic earnings per share data
-------------------------------
  As reported                       $      (.08)   $      (.83)   $      (.54)
                                    ===========    ===========    ===========
  Proforma                          $      (.08)   $      (.83)   $      (.60)
                                    ===========    ===========    ===========


                                       25


<PAGE>  26


Note 3.  (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:

                                                                     Eleven
                                                    Year Ended    Months Ended
                                                   December 31,   December 31,
                                                       1997           1996
                                                   ------------   ------------
Risk-free interest rate                                6.0%            5.0%
Expected life of the options                         3 years         10 years
Expected volatility                                   101.2%          111.5%
Expected dividend yield                                0.0%            0.0%


                                       26


<PAGE>  27


------------------------------------------------------------------------------
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 
Subsidiary is included on page 14 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 17, 1999
Seattle, Washington


                                       27


<PAGE>  28


                       ICHOR CORPORATION AND SUBSIDIARY
               SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                    Year Ended December 31, 1998 and 1997
                  and Eleven Months Ended December 31, 1996
                          (In Thousands of Dollars)


                                       Additions
                                 --------------------
                     Balance at              Charged               Balance at
                     beginning    Charged    to other                 close
                     of period   to income   accounts  Deductions   of period
                     ----------  ---------   --------  ----------  ----------

Year Ended December
  31, 1998                                                     (4)
Allowance for
  doubtful accounts  $      562  $       -   $      -  $      562  $        -
                     ==========  =========   ========  ==========  ==========

Year Ended December
  31, 1997                                                     (3)
Allowance for
  doubtful accounts  $      690  $       2   $      -  $      130  $      562
                     ==========  =========   ========  ==========  ==========

Eleven Months Ended
  December 31, 1996                                (1)         (2)
Allowance for
  doubtful accounts  $      724  $      40   $    130  $      204  $      690*
                     ==========  =========   ========  ==========  ==========

(1)  Allowance for uncollectibility to reflect the fair value of receivables
     purchased; recorded at the date of acquisition of the waste oil recycling
     facilities.
(2)  Uncollectible accounts written off, net of recoveries.
(3)  Allowance for uncollectibility sold in conjunction with sale of waste oil
     recycling facility.
(4)  Allowance for uncollectibility sold in conjunction with sale of ICHOR
     Services, Inc.





*  The consolidated balance sheet shows the allowance for doubtful accounts to 
be $560 (instead of $690).  This is because $130 was reclassified to "net 
assets of discontinued waste oil recycling facility" at December 31, 1996.


                                       28


<PAGE>  29


                                  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 26, 1999             ICHOR CORPORATION

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

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 26, 1999
------------------------------
Michael J. Smith
President, Chief Financial Officer,
Treasurer and Director


/s/ Roy Zanatta                                 March 26, 1999
------------------------------
Roy Zanatta
Secretary and Director


/s/ John Musacchio                              March 26, 1999
------------------------------
John Musacchio
Director


/s/ Leonard Petersen                            March 26, 1999
------------------------------
Leonard Petersen
Director


/s/ Young-Soo Ko                                March 26, 1999
------------------------------
Young-Soo Ko
Director


/s/ Jae-Sun Lee                                 March 26, 1999
------------------------------
Jae-Sun Lee
Director


                                       29


<PAGE>  30


                                 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
                             the Corporation's Schedule 14C dated September
                             17, 1996.

          3.1                Articles of Incorporation.(1)

          3.2                Certificate of Designations.  Incorporated by
                             reference to the Corporation's Form 8-K dated
                             March 12, 1998.

          3.3                Bylaws.(1)

          10.1               Amended 1994 Stock Option Plan.(2)

          10.2               1995 Qualified Incentive Stock Option Plan.(2)

          10.3               Amended and Restated Employment Agreement for
                             John M. Musacchio dated February 1, 1997.(3)

          10.4               Loan Agreement dated January 15, 1997 between
                             Ortek Inc. and Volendam Investments Limited.(4)

          10.5               Loan Agreement dated January 15, 1997 among
                             Drummond Financial Corporation, the Corporation
                             and ICHOR Services, Inc.(4)

          10.6               Amendment to Loan Agreement dated June 30, 1997
                             among Drummond Financial Corporation, the
                             Corporation and ICHOR Services, Inc.(3)

          10.7               Stock Purchase Agreement between the Corporation
                             and Evergreen Holding Inc. dated December 23,
                             1997.  Incorporated by reference to the
                             Corporation's Form 8-K dated January 7, 1998.

          10.8               Debt Settlement Agreement between Logan
                             International Corp. and the Corporation dated
                             September 30, 1997.(5)

          10.9               Debt Settlement Agreement between Logan
                             International Corp. and the Corporation dated
                             February 20, 1998.(5)


<PAGE>  31


          10.10              Debt Settlement Agreement between Sutton Park
                             International Ltd. and the Corporation dated
                             February 20, 1998.(5)

          10.11              Subscription Agreement between Constable
                             Investments Ltd. and the Corporation dated
                             February 26, 1998.(5)

          10.12              Subscription Agreement between Conqueror Holdings
                             Ltd. and the Corporation dated February 26, 1998.
                             (3)

          10.13              Subscription Agreement between Sutton Park
                             International Ltd. and the Corporation dated
                             February 26, 1998.(5)

          10.14              Subscription Agreement between Zellstoff-und
                             Papierfabrik Rosenthal GmbH and the Corporation
                             dated February 26, 1998.(3)

          10.15              Purchase Agreement between the Corporation and
                             Nazca Holdings Ltd. dated October 17, 1998.
                             Incorporated by reference to the Corporation's
                             Form 8-K dated October 20, 1998.

          23                 Consent of Independent Auditors.

          27                 Article 5 - Financial Data Schedule for the year
                             ended December 31, 1998.

----------------
(1)  Incorporated by reference to the Corporation's Form 10-K dated January
     31, 1996.
(2)  Incorporated by reference to the Corporation's Definitive Schedule 14A
     dated July 8, 1996.
(3)  Incorporated by reference to the Corporation's Form 10-K dated December
     31, 1997.
(4)  Incorporated by reference to the Corporation's Form 10-K dated December
     31, 1996.
(5)  Incorporated by reference to a Schedule 13D\A dated March 13, 1998.