Dear Shareholder,

With the 2007 year coming to an end, I would like to update you on both our Platinum Group Metal and Nickel division.

Over the past few months, Pacific North West Capital has been very aggressive in acquiring and exploring properties related to both its PGM and Nickel divisions.  The first phases of work have been completed on the new acquisitions and our exploration team is currently finalizing next year's budget.  The 2008 budget is currently estimated to be $5 million and will include commitments from our major partners.

Project Updates

River Valley PGM Project, Ontario - Joint Venture with Anglo Platinum

We recently have announced a Phase 9B $525,000 budget for continued evaluation of the interior River Valley Intrusive (RVI), that has been approved for the River Valley PGM Project by joint venture partner Anglo Platinum Limited ("Anglo Platinum"); the world's largest primary producer of platinum.  The objective of the 2007 program is to define new PGM mineralization that could expand the potential of the project. These new areas have been indicated by geophysical (magnetic and IP) responses within the RVI. 

To date Anglo Platinum has expended approximately $20 million on this project.  This project, which has resulted in the delineation of a very substantial Palladium and Platinum resource.  Although Palladium and Platinum occur roughly in a ratio of 3:1, the differential in metal prices results in the Platinum content is being marginally more valuable than Palladium.

The company's thrust on this project is threefold.  Firstly, the resource established to date lies within 200 metres of the surface.  This resource is now being examined in greater detail to ascertain whether higher grade sections within it can be broken out, which might be amenable to open pit mining at specific metal prices.  Secondly, the company feels strongly that the mineralization established to date, along a very extensive (several km.) strike length and to relatively shallow depth, may represent just the near surface expression of much more extensive mineralization, extending several hundreds of metres to depth, with the possibility of higher grades and different styles of mineralization.  The company is now examining ways in which we vector in on deeper drill targets.  Finally, the price of Palladium is also a major factor for the River Valley Project and any major increase in Palladium will positively affect the projects economics.

Coldwell PGM-Cu Project, Ontario

One of our recent project acquisitions is located in the Coldwell Complex - the largest composite alkaline intrusive complex in North America.  Marathon PGM Corporation's PGE-Cu deposit is associated with the Eastern Border Gabbro unit of the Coldwell Complex.  A $900,000 exploration program commenced in the fall of 2007 including prospecting, mapping, lake bottom geochemical sampling and geophysics.  We are expecting our results on these areas in the first quarter of 2008.  The objective of the first phase for the program is to outline drill targets for the latter part of 2008.

Goodnews Bay Platinum Project, Alaska - Option/Joint Venture with Stillwater Mining Company

PFN and Stillwater are exploring the Goodnews Bay Platinum Project where numerous shallow soil and deep auger overburden samples have been taken in the Red Mountain and Susie Mountain target areas. The samples are currently being analyzed. Promising new chromite occurrences have been located in the Red Mountain area which have been sampled and sent for analysis. Final reports are in progress, and a budget proposal is being prepared for Stillwater and will focus on drilling the project in 2008.

Stillwater PGM Reconnaissance -- Alaska

In addition to our work with Stillwater Mining Company in the Goodnews Bay region, Stillwater provided an additional $500,000 budget for reconnaissance work in Alaska region.  Initial results from our reconnaissance projects look positive and are currently being tabulated and a 2008 recommendation will be submitted to Stillwater before year end.

Raglan Hills Nickel Project, Ontario -- Joint Venture with First Nickel

The Raglan Hills Project is situated northeast of Bancroft in the Province of Ontario and comprises 21 claim blocks totalling 2,752 hectares.  The Raglan Hills Project is located over the north-eastern portion of the Raglan Hills Intrusive Complex. The Complex is a differentiated mafic intrusive composed primarily of meta‐gabbro with lesser proportions of meta‐pyroxenite. The more mafic, pyroxenitic units host historical, nickel and copper sulphide showings and may represent the feeder system to the Intrusive Complex. Minimal exploration has occurred since the late 1980's and the property has potential to host economic nickel copper sulphide zones within this feeder system. The exploration program will be designed to identify and test priority areas within the property boundaries.

Pacific North West Capital and First Nickel have entered into a 50% ‐ 50% Joint Venture Agreement whereby both Companies agree to bear all expenditures and participate in a single purpose unincorporated Joint Venture for the purpose of carrying out all Mineral exploration.  First Nickel will act as Operator for the project and will be responsible for carrying out all exploration activities.

West Timmins Nickel Project -- Option/Joint Venture with Xstrata

The Project covers 355 square kilometres (87,720 acres), 60 kilometres west of Timmins, Ontario. The West Timmins project is adjacent to Xstrata's Montcalm deposit. The Montcalm deposit contains a proven mineral reserve of 4.1 million tonnes at 1.38% Ni, 0.64% Cu as of December 31, 2006 and has a remaining mine life of 4.5 years. Ore from the Montcalm operation is being trucked to Kidd Metallurgical Site, a distance of approximately 90 kilometres to the east. An extensive geophysical and ground proofing exploration program has been completed. PFN has expended approximately $2 million on the project to date with plans to spend an additional $1 million during the winter 2007/2008 program. In May, a diamond drill program commenced to evaluate EM conductors to depths of 2000 meters south of the Montcalm Mine claims. The targets are within the strike extension of the interpreted mine stratigraphy of the Montcalm Intrusive Complex (MIC). The program was expanded to 4000 metres in June 2007.

Current Activities:

�         15 hole 3,413 metre Drill Program completed

�         Year 1 and Year 2 expenditures have been met - $1.4 million spent to date

�         Significant sulphide mineralization intersected returning anomalous copper (up to 0.12%) and nickel (up to 0.14%) values

�         4,000 meter drill program completed November 2007
 

Our Nickel division has been expanded significantly this year with the acquisition of Nickelmuir in Timmins Ontario, Nickel Plats Saskatchewan, Northwest Territories Nickel, and Labrador Nickel.  Management continues to negotiate new acquisitions.

Pacific North West Capital Corp. currently has $8 Million in working capital and securities.

For additional information on our projects, please do not hesitate to contact our Investor Relations Department, Toll Free at 1.800.667.1870 or email us at info@pfncapital.com.

On behalf of everyone at Pacific North West Capital Corp., I would like to wish you a happy and healthy holiday season.

Best Regards,

Harry Barr, President & C.E.O.